SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
[X] Current Report Pursuant to Section 13 OR 15(d)
of the Securities Exchange Act of 1934
Date of Report January 14, 1997
Commission file number: 0-28354
Great Lakes REIT, Inc.
(Exact name of Registrant as specified in its Charter)
Maryland 36-3844714
(State or other jurisdiction (I.R.S. Employer
of incorporation organization) identification no.)
823 Commerce Drive, Suite 300, Oak Brook, IL 60521
(Address of principal executive offices) (Zip Code)
(630) 368 - 2900
(Registrant's telephone number, including area code)
2311 West 22nd St., Suite 109, Oak Brook, IL 60521
(Former address of principal executive offices) (Zip Code)
Indicate by check mark whether the registrant (1) has
filed all reports required to be filed by Section 13 or 15(d)
of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such
reports), and (2) has been subject to
such filing requirements for the past 90 days. Yes X No
The Exhibits List appears at page 4
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Item 5. Other events.
On April 12, 1996 Great Lakes REIT, Inc. (the "Company") entered into a Master
Revolving Credit Agreement with the First National Bank of Boston individually
and as agent pursuant to which the Bank of Boston and other banks which may
become parties to the Credit Agreement agreed to provide the Company a
$35,000,000 line of credit subject to the receipt of adequate collateral
represented by first mortgages on certain Company properties. The term of the
Master Revolving Credit Agreement is two years. On June 28, 1996 the Company
entered into an Amended and Restated Master Revolving Credit Agreement with Bank
of America Illinois and the First National Bank of Boston individually and as
agent (collectively the "Banks") pursuant to which the Banks agreed to provide
the Company a $50,000,000 line of credit subject to the receipt of adequate
collateral represented by first mortgages on certain Company properties. On
December 27, 1996 the Company entered into a revised Amended and Restated Master
Revolving Credit Agreement with First Bank National Association, Bank of America
Illinois and the First National Bank of Boston individually and as agent
(collectively the "Banks") pursuant to which the Banks agreed to provide the
Company a $75,000,000 line of credit subject to the receipt of adequate
collateral represented by first mortgages on certain Company properties.
On September 27, 1996 the Company and GLR No. 3, a Maryland Business Trust and a
wholly owned subsidiary of the Company, entered into an Agreement of Limited
Partnership of Great Lakes REIT, L.P.(the "Partnership Agreement"), and a
Certificate of Limited Partnership for Great Lakes REIT, L.P. (the
"Partnership") was filed in the state of Delaware on October 1, 1996. The
Partnership Agreement was subsequently amended by the original parties by the
adoption of the Amended and Restated Agreement of Limited Partnership of Great
Lakes REIT, L.P. dated December 27, 1996.
On December 27, 1996, in association with the amendment and restatement of the
Partnership Agreement and the amendment and revision of the Master Revolving
Credit Agreement, the Company transferred title to all of the real estate assets
(15 in total) which are provided as the collateral under the Amended and
Restated Master Revolving Credit Agreement, to the Partnership. The Company
intends to transfer title to the balance of its real estate assets to the
Partnership during the first quarter of 1997 and thereafter conduct all of its
business activities through the Partnership.
Item 7. Financial Statements and Exhibits
(c) Exhibits:
1. Master Revolving Credit Agreement dated April 12, 1996;
2. Amended and Restated Master Revolving Credit Agreement dated June 28, 1996.
3. Amended and Restated Master Revolving Credit Agreement dated December 27,
1996.
4. Agreement of Limited Partnership of Great Lakes REIT, L.P. dated September
27, 1996.
5. Amended and Restated Agreement of Limited Partnership of Great Lakes REIT,
L.P. dated December 27, 1996.
No information is reqiured under Items 1,2,3,4 and 6 and these items have
therefore been omitted.
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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 thereunto duly authorized.
Great Lakes REIT, Inc.
(Registrant)
Date: January 13, 1997
By:/s/Richard L. Rasley
Richard L. Rasley
Secretary, Executive Vice President
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Exhibits Index:
Exhibit No. Description Page No.
1. Master Revolving Credit Agreement 5
dated April 12, 1996;
2. Amended and Restated Master Revolving 89
Credit Agreement dated June 28, 1996.
3. Amended and Restated Master Revolving 179
Credit Agreement dated December 27, 1996
4. Agreement of Limited Partnership of 274
Great Lakes REIT, L.P. dated September
27, 1996.
5. Amended and Restated Agreement of 277
Limited Partnership of Great Lakes REIT,
L.P. dated December 27, 1996.
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MASTER REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 12, 1996
among
GREAT LAKES REIT, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
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MASTER
REVOLVING CREDIT AGREEMENT
This MASTER REVOLVING CREDIT AGREEMENT is made as of the 12th day of April,
1996, by and among GREAT LAKES REIT, INC. (the "Borrower"), a Maryland
corporation having its principal place of business at 2311 West 22nd Street,
Suite 109, Oak Brook, Illinois 60521, and THE FIRST NATIONAL BANK OF BOSTON
("FNBB"), and the other lending institutions which may become parties hereto
pursuant to paragraph 18 (the "Banks"), and THE FIRST NATIONAL BANK OF BOSTON,
as Agent for the Banks (the "Agent").
RECITALS
WHEREAS, the Borrower has requested that the Banks provide a revolving credit
facility to the Borrower; and
WHEREAS, Agent and the Banks are willing to provide such facility to the
Borrower upon the terms and conditions set forth herein;
NOW, THEREFORE, in consideration of the recitals herein and the mutual covenants
contained herein, the parties hereto hereby covenant and agrees
DEFINITIONS AND RULES OF INTERPRETATION.
paragraph 1. Definitions. The following terms shall have the meanings set
forth in this paragraph l or elsewhere in the provisions of this Agreement
referred to below:
Affected Bank. See paragraph 4.16.
Agent. The First National Bank of Boston acting as agent for the Banks.
Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks.
Agent's Special Counsel. Winston & Strawn or such other counsel as may be
approved by the Agent.
Agreement. This Master Revolving Credit Agreement, including the Schedules
and Exhibits hereto.
Applicable Margin. As of any date of determination, with respect to LIBOR Rate
loans, 1.875%, provided that upon completion of a Successful Initial Public
Offering the applicable margin shall be reduced to 1.750%.
Appraisal. An MAI appraisal of the value of a parcel of Real Estate, determined
on a fair value basis, performed by an independent appraiser selected by the
Agent who is not an employee of the Borrower, the Agent or a Bank, the form and
substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Banks and otherwise acceptable (i) to the Agent, in the case of such
appraisals delivered by the Borrower on the Closing Date, and (ii) the Majority
Banks, in the case of any such appraisals delivered by the Borrower after the
Closing Date, provided that if the Agent's appraisal department has determined
that the value of any parcel of Real Estate is within five percent (5%) of the
value for such parcel of Real Estate
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as set forth in the MAI appraisal delivered to the Agent by the Borrower, the
Banks shall accept such appraised value.
Appraised Value. The fair value of a parcel of Mortgaged Property determined by
the most recent Appraisal of such parcel or update obtained pursuant to
paragraph 5.2 or paragraph 10.7, subject, however, to such changes or
adjustments to the value determined thereby as may be required by (i) the
appraisal department of the Agent, in the case of such appraisals delivered by
the Borrower on the Closing Date, and (ii) the appraisal departments of the
Majority Banks, in the case of any such appraisals delivered by the Borrower
after the Closing Date, in their good faith business judgment after consultation
with the Borrower, provided that if the Agent's appraisal department has
determined that the value of any parcel of Mortgaged Property is within five
percent (5%) of the value for such Mortgaged Property as set forth in the MAI
appraisal delivered to the Agent by the Borrower, the Banks shall accept such
appraised value.
Assignment of Leases and Rents. Each of the collateral assignments of leases and
rents from the Borrower to the Agent, as the same may be modified or amended,
pursuant to which there shall be assigned to the Agent for the benefit of the
Banks a security interest in the interest of the Borrower as lessor with respect
to all Leases of all or any part of a Mortgaged Property, each such collateral
assignment to be in form and substance satisfactory to the Majority Banks.
Balance Sheet Date. December 31, 1995.
Banks. FNBB and any other Person who becomes an assignee of any rights of a
Bank pursuant to paragraph 18.
Base Rate. The annual rate of interest announced from time to time by Agent at
Agent's Head Office as its "base rate". Any change in the rate of interest
payable hereunder resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such change in the
Base Rate becomes effective.
Base Rate Loans. Those Loans bearing interest calculated by reference to the
Base Rate.
Borrower. As defined in the preamble hereto.
Borrowing Base. At any time with respect to the Borrower, the Borrowing Base
shall be the aggregate of the Borrowing Bases for each parcel of Eligible Real
Estate included in the Mortgaged Property owned by the Borrower. The Borrowing
Base for each parcel of Eligible Real Estate included in the Mortgaged Property
shall be the amount which is sixty percent (60%) of the Appraised Value of such
Mortgaged Property as most recently determined as provided under paragraph 5.2
or paragraph 10.7.
Building. With respect to each parcel of Mortgaged Property, all of the
buildings, structures and improvements now or hereafter located thereon.
Building Service Equipment. All apparatus, fixtures and articles of personal
property owned by the Borrower now or hereafter attached to or used or procured
for use in connection with the operation or maintenance of any building,
structure or other improvement located on or included in the Mortgaged Property,
including, but without limiting the generality of the foregoing, all engines,
furnaces, boilers, stokers, pumps, heaters, tanks,
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dynamos, motors, generators, switchboards, electrical equipment, heating,
plumbing, lifting and ventilating apparatus, air-cooling and air-conditioning
apparatus, gas and electric fixtures, elevators, escalators, fittings, and
machinery and all other equipment of every kind and description, used or
procured for use in the operation of a Building (except apparatus, fixtures or
articles of personal property belonging to lessees or other occupants of such
building or to persons other than the Borrower unless the same be abandoned by
any such lessee or other occupant or person and shall become the Borrower's
property by reason of such abandonment), together with any and all replacements
thereof and additions thereto.
Business Day. Any day on which banking institutions in Boston, Massachusetts are
open for the transaction of banking business and, in the case of LIBOR Rate
Loans, which also is a LIBOR Business Day.
Capital Expenditure Reserve Amount. With respect to any Person or property, a
reserve for replacements and capital expenditures equal to $ .50 per square foot
of building space located on all Real Estate owned by such Person.
Capital Improvement Project. With respect to any Real Estate now or hereafter
owned by the Borrower which is utilized principally for office, office/service
or light industry, capital improvements consisting of rehabilitation,
refurbishment, replacement and improvements (including related amenities) to the
existing Buildings on such Real Estate which may be properly capitalized under
generally accepted accounting principles.
CERCLA. See paragraph 6.18.
Closing Date. The first date on which all of the conditions set forth in
paragraph 10 and paragraph 11 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower which are
or are intended to be subject to the security interests, liens and mortgages
created by the Security Documents, including, without limitation, the Mortgaged
Property.
Commitment. With respect to each Bank, the amount set forth on Schedule I hereto
as the amount of such Bank's Commitment to make or maintain Loans to the
Borrower, as the same may be changed from time to time in accordance with the
terms of this Agreement
Commitment Percentage. With respect to each Bank, the percentage set forth on
Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
Compliance Certificate. See paragraph 7.4(e).
Consolidated or combined. With reference to any term defined herein, that term
as applied to the accounts of a Person and its Subsidiaries, consolidated or
combined in accordance with generally accepted accounting principles.
Consolidated Operating Cash Flow. With respect to any period of a Person, an
amount equal to the Operating Cash Flow such Person and its Subsidiaries for
such period consolidated in accordance with generally accepted accounting
principles.
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Consolidated Tangible Net Worth. The amount by which Consolidated Total
Adjusted Asset Value exceeds Consolidated Total Liabilities, and less the sum
of:
(a) the total book value of all assets of a Person and its Subsidiaries properly
classified as intangible assets under generally accepted accounting principles,
including such items as good will, the purchase price of acquired assets in
excess of the fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(a) all amounts representing any write-up in the book value of any assets of
such Person or its Subsidiaries resulting from a revaluation thereof subsequent
to the Balance Sheet Date.
Consolidated Total Adjusted Asset Value. With respect to any Person, all assets
of such Person and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles. All real estate shall
be valued on an undepreciated cost basis.
Consolidated Total Liabilities. All liabilities of a Person and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles and all Indebtedness of such Person and its Subsidiaries,
whether or not so classified. Amounts undrawn under this Agreement shall not be
included in Indebtedness for purposes of this definition. Construction
Inspector. A firm of professional engineers or architects selected by the
Borrower and reasonably acceptable to the Agent.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with paragraph 4.1.
Debt Offering. The issuance and sale by the Borrower of any debt securities
of the Borrower.
Debt Service. For any period, the sum of all interest and mandatory principal
payments due and payable during such period reduced by any balloon payments due
upon maturity of any Indebtedness.
Default. See paragraph 12.1.
Defaulting Bank. Any Bank which fails or refuses to perform its obligations
under this Agreement within the time period specified for performance of such
obligation or, if no time frame is specified, if such failure or refusal
continues for a period of five (5) Business Days after notice from the Agent.
Distribution. With respect to any Person, the declaration or payment of any
cash, cash flow, dividend or distribution on or in respect of any shares of any
class of capital stock or other beneficial interest of such Person other than
dividends or distributions payable solely in equity securities of such Person;
the purchase, redemption, exchange or other retirement of any shares of any
class of capital stock or other beneficial interest of such Person, directly or
indirectly through a Subsidiary of such Person or otherwise; the return of
capital by such Person to its shareholders or partners as such; or any other
distribution on or in respect of any shares of any class of capital stock or
other beneficial interest of such Person.
Dollars or $. Dollars in lawful currency of the United States of America.
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Domestic Lending Office. Initially, the office of each Bank designated as such
in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and the date
on which any Loan which is made prior to the Maturity Date is converted or
combined in accordance with paragraph 4.1.
Eligible Assignee. Any of the following assignees: (i) a commercial bank,
savings and loan association or savings bank organized under the laws of the
United States or any state thereof having total assets in excess of
$250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of business
extends credit of the type evidenced by the Notes and has total assets in excess
of $100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and having total assets
in excess of $250,000,000; provided that such bank is acting through a branch or
agency located in the United States and such bank shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W 8 or W 9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441 1, 1.1441 4 or
1.1441 6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (1)
not subject to Untied States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States or (2) totally exempt from the United States
Federal withholding tax; and (iv) any other financial institution satisfactory
to both the Borrower and the Agent.
Eligible Participant. Any of the following participants: (i) a commercial bank,
savings and loan association or savings bank organized under the laws of the
United States or any state thereof having total assets in excess of
$250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of business
extends credit of the type evidenced by the Notes and has total assets in excess
of $100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and having total assets
in excess of $250,000,000; provided that such bank is acting through a branch or
agency located in the United States and such bank shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W 8 or W 9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441 1, 1.1441 4 or
1.1441 6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (1)
not subject to Untied States Federal withholding tax under the Code because such
payment is effectively
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connected with the conduct by such entity of a trade or business in the United
States or (2) totally exempt from the United States Federal withholding tax; and
(iv) any other financial institution satisfactory to both the Borrower and the
Agent.
Eligible Real Estate. Real Estate:
(a) which is owned in fee by the Borrower;
(b) which is located within the contiguous 48 States of the continental United
States, excluding those States which prescribe a "single-action" or similar rule
limiting the rights of creditors secured by real property, which exclusion shall
apply, without limitation, to the States of California and Washington except to
the extent such exclusion is waived in writing by the Majority Banks with
respect to a specific parcel of Real Estate;
(c) which is utilized principally for offices, offices/service or light
industry;
(d) which is approved by the Majority Banks after the date hereof in their
sole judgment;
(e) as to which all of the representations set forth in paragraph 6 of this
Agreement concerning Mortgaged Property are true and correct; and
(f) as to which the Agent has received all Eligible Real Estate Qualification
Documents, so long as all of such documents remain in full force and effect.
Eligible Real Estate Qualification Documents. With respect to any parcel of
Real Estate of the Borrower proposed to be included in the Collateral, each of
the following:
(a) Security Documents. Such Security Documents relating to such Real Estate as
the Majority Banks shall require, in form and substance satisfactory to the
Agent and the Majority Banks and duly executed and delivered by the respective
parties thereto.
(a) Enforceability Opinion. The favorable legal opinion of counsel to the
Borrower reasonably acceptable to the Majority Banks qualified to practice in
the State in which such Real Estate is located, addressed to the Banks and in
form and substance satisfactory to the Majority Banks as to the enforceability
of such Security Documents and such other matters as the Majority Banks shall
reasonably request.
(a) Perfection of Liens. Evidence reasonably satisfactory to the Majority Banks
that the Security Documents are effective to create in favor of the Agent a
legal, valid and enforceable first (except for Permitted Liens approved by the
Majority Banks entitled to priority under applicable law) lien and security
interest in such Real Estate and that all filings, recordings, deliveries of
instruments and other actions necessary or desirable to protect and preserve
such liens or security interests have been duly effected.
(a) Survey and Taxes. The Survey of such Real Estate, together with the Surveyor
Certification and evidence of payment of all real estate taxes, assessments and
municipal charges on such Real Estate which on the date of determination are
required to have been paid under paragraph 7.8.
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(a) Title Insurance; Title Exception Documents. The Title Policy covering such
Real Estate, including all endorsements thereto, and together with proof of
payment of all fees and premiums for such policy, and true and accurate copies
of all documents listed as exceptions under such policy.
(a) UCC Certification. A certification from the Title Insurance Company or
counsel satisfactory to the Majority Banks that a search of the public records
designated by the Majority Banks disclosed no conditional sales contracts,
security agreements, chattel mortgages, leases of personalty, financing
statements or title retention agreements which affect any property, rights or
interests of the Borrower that are or are intended to be subject to the security
interest, assignments, and mortgage liens created by the Security Documents
relating to such Real Estate except to the extent that the same are discharged
and removed prior to or simultaneously with the inclusion of the Real Estate in
the Collateral.
(a) Management Agreement. A true copy of the Management Agreement, if any,
relating to such Real Estate.
(a) Service Agreements. True copies of all Service Agreements relating to
such Real Estate.
(a) Standard Form Leases. True copies of sample leases and Rent Rolls and
summaries thereof satisfactory to the Majority Banks certified by the Borrower
as accurate and complete as of a recent date.
(a) Certificates of Insurance. Each of (i) a current certificate of insurance as
to the insurance maintained by the Borrower on such Real Estate (including flood
insurance if necessary) from the insurer or an independent insurance broker
dated as of the date of determination, identifying insurers, types of insurance,
insurance limits, and policy terms; (ii) certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer); and (iii) such further information and
certificates from the Borrower, its insurers and insurance brokers as the
Majority Banks may reasonably request, all of which shall be in compliance with
the requirements of this Agreement.
(a) Hazardous Substance Assessments. A hazardous waste site assessment report
concerning Hazardous Substances and asbestos on such Real Estate dated or
updated not more than six (6) months prior to the inclusion of such Real Estate
in the Collateral, from an Environmental Engineer, such report to contain no
qualifications except those that are acceptable to the Majority Banks in their
sole discretion and to otherwise be in form and substance satisfactory to the
Majority Banks.
(a) Certificate of Occupancy. A copy of the certificate(s) of occupancy issued
to the Borrower for such parcel of Real Estate permitting the use and occupancy
of the Building thereon (or a copy of the certificates of occupancy issued for
such parcel of Real Estate and evidence satisfactory to the Majority Banks that
any previously issued certificate(s) of occupancy is not required to be reissued
to the Borrower), or a legal opinion reasonably satisfactory to the Agent that
no certificates of occupancy are necessary to the use and occupancy thereof. (a)
Appraisal. An Appraisal of such Real Estate, in form and substance satisfactory
to the Agent or the Majority Banks as provided in paragraph 5.2 and dated not
more than twelve (12) months prior to the inclusion of such Real Estate in the
Collateral.
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(a) Zoning and Land Use Opinion of Counsel. A favorable opinion concerning the
Real Estate addressed to the Agent and dated the date of the inclusion of such
Real Estate in the Collateral, in form and substance satisfactory to the
Majority Banks, from counsel approved by the Majority Banks admitted to practice
in the State in which such parcel is located, as to zoning and land use
compliance, or such other evidence regarding zoning and land use compliance as
the Majority Banks may approve in their reasonable discretion.
(a) Construction Inspector Report. A report or written confirmation from the
Construction Inspector satisfactory in form and content to the Majority Banks,
dated or updated not more than three months prior to the inclusion of such Real
Estate in the Collateral, addressing such matters as the Majority Banks may
reasonably require, including without limitation that the Construction Inspector
has reviewed the plans and specifications or other available materials for all
Buildings on the Real Estate, that the condition of the Buildings is good, that
all Buildings were constructed and completed in a good and workmanlike manner,
that the Buildings satisfy all applicable building, zoning, handicapped access
and Environmental Laws applicable thereto, whether or not the Real Estate and
the Buildings thereon are a conforming use under applicable zoning laws, and
that utilities and public water and sewer service are available at the lot lines
of the Real Estate through dedicated rights-of-way or through insured perpetual
private easements approved by the Majority Banks and connected directly to the
Building with all necessary permits.
(p) Permit and Legal Compliance Assurances. Evidence satisfactory to the
Majority Banks that all activities being conducted on such Real Estate which
require federal, state or local licenses or permits have been duly licensed and
that such licenses or permits are in full force and effect, and that the Real
Estate, the Buildings and the use and occupancy thereof are in compliance with
all applicable federal, state or local laws, ordinances or regulations.
(a) Operating Statements. Operating statements for such Real Estate in the form
of such statements delivered to the Banks under paragraph 6.4(c) covering each
of the four fiscal quarters ending immediately prior to the addition of such
Mortgaged Property to the Collateral.
(a) Doing Business Opinion. An opinion, dated the date of the inclusion of such
Real Estate in the Collateral, of legal counsel to the Borrower reasonably
acceptable to the Majority Banks qualified to practice in the State in which
such Real Estate is located to the effect that neither the Agent nor any Bank
shall be required to qualify to do business in such State or any political
subdivision thereof or to become liable to pay any taxes in such State or any
political subdivision thereof solely on account of the receipt of the lien on
such Real Estate securing the Obligation, such opinion to be satisfactory to the
Majority Banks.
(s) Additional Documents. Such other documents, certificates, reports or
assurances as the Majority Banks may reasonably require in their discretion.
Employee Benefit Plan. Any employee benefit plan within the meaning of paragraph
3(3) of ERISA maintained or contributed to by either of the Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
Environmental Engineer. EMG, Inc. or another firm of independent professional
engineers or other scientists generally recognized as expert in the detection,
analysis and remediation of Hazardous Substances and related environmental
matters and which has been previously approved by the Agent, or if not
previously approved by the Agent, with respect to which the Borrower has
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provided to the Agent a copy at such firm's errors and omissions insurance
policy and a reliance letter both in form and substance acceptable to the Agent.
Environmental Laws. See paragraph 6.18(a).
Equity Offering. The issuance and sale by the Borrower of any equity
securities of the Borrower.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under paragraph 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension
Plan within the meaning of paragraph 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. See paragraph 12.1.
FNBB. As defined in the Preamble.
Funds from Operations. With respect to any Person for any fiscal period, the Net
Income of such Person computed in accordance with generally accepted accounting
principles, excluding financing costs and gains (or losses) from debt
restructuring and sales of property, plus depreciation and amortization and
other non cash items.
Generally accepted accounting principles. Principles that are (a) consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, as in effect from time to time and (b) consistently
applied with past financial statements of the Person adopting the same
principles; provided that a certified public accountant would, insofar as the
use of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of
paragraph 3(2) of ERISA maintained or contributed to by either of the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Hazardous Substances. See paragraph 6.18(b).
HLT Notice Date. See paragraph 4.13.
Indebtedness. All obligations, contingent and otherwise, that in accordance with
generally accepted accounting principles should be classified upon the obligor's
balance sheet as liabilities, or to which reference should be made by footnotes
thereto, but without any double counting, including in any event and whether or
not so classified: (a) all debt and similar monetary obligations, whether direct
or indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance
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existing on property owned or acquired subject thereto, whether or not the
liability secured thereby shall have been assumed; and (c) all guarantees,
endorsements and other contingent obligations whether direct or indirect in
respect of indebtedness of others, including any obligation to supply funds to
or in any manner to invest directly or indirectly in a Person, to purchase
indebtedness, or to assure the owner of indebtedness against loss through an
agreement to purchase goods, supplies or services for the purpose of enabling
the debtor to make payment of the indebtedness held by such owner or otherwise,
and the obligation to reimburse the issuer in respect of any letter of credit.
Indemnity Agreement. The Indemnity Agreement Regarding Hazardous Materials made
by the Borrower in favor of the Agent and the Banks, as the same may be modified
or amended, pursuant to which the Borrower agrees to indemnify the Agent and the
Banks with respect to Hazardous Substances and Environmental Laws, such
Indemnity Agreement to be in form and substance satisfactory to the Majority
Banks.
Interest Payment Date. As to each Loan, the first day of each calendar month
during the term of such Loan.
Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period
commencing on the Drawdown Date of such Loan and ending one, three or six months
thereafter, and (b) thereafter, each period commencing on the day following the
last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; provided that all of the foregoing provisions
relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end
on a day that is not a LIBOR Business Day, that Interest Period shall end and
the next Interest Period shall commence on the next preceding or succeeding
LIBOR Business Day as determined conclusively by the Reference Bank in
accordance with the then current bank practice in the London Interbank Market;
(B) if the Borrower shall fail to give notice as provided in paragraph 4.1, the
Borrower shall be deemed to have requested a conversion of the affected LIBOR
Rate Loan to a Base Rate Loan on the last day of the then current Interest
Period with respect thereto; and
(C) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the
Maturity Date.
Interest Rate Contracts. Interest rate swap, collar, cap or similar
agreements providing interest rate protection.
Investments. With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person, all loans,
advances, or extensions of credit to, or contributions to the capital of, any
other Person, all purchases of the securities or business or integral part of
the business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance
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with customary trade terms. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any investment represented
as a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Leases. Leases, licenses and agreements whether written or oral, relating to
the use or occupation of space in or on the Building or on the Real Estate by
persons other than the Borrower.
LIBOR Business Day. Any day on which commercial banks are open for international
business (including dealings in Dollar deposits) in London.
LIBOR Lending Office. Initially, the office of each Bank designated as such in
Schedule 1 hereto; thereafter, such other office of such Bank, if any, that
shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the rate
per annum as determined by the Reference Bank's LIBOR Lending Office to be the
rate (rounded upwards to the nearest 1/16 of one percent) at which Dollar
deposits are offered to prime banks, by such banks in the London Interbank
Market as are selected in good faith by Reference Lender, at approximately 11:00
a.m. London time two LIBOR Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of the LIBOR
Rate Loan to which such Interest Period applies.
LIBOR Rate Loans. Loans bearing interest calculated by reference to a LIBOR
Rate.
Loan Documents. This Agreement, the Notes, the Security Documents and all other
documents, instruments or agreements now or hereafter executed or delivered by
or on behalf of the Borrower in connection with the Loans.
Loan Request. See paragraph 2.5.
Loans. See paragraph 2.1.
Majority Banks. As of any date, the Bank or Banks whose aggregate Commitment
Percentage is more than sixty six and two thirds percent (66 2/3%); provided,
that, in determining said percentage at any given time, all then existing
Defaulting Banks will be disregarded and excluded and the Commitment Percentages
of the Banks shall be redetermined, for voting purposes only, to exclude the
Commitment Percentages of such Defaulting Banks; and provided, further, that the
Agent must always be among the Majority Banks except that after an Event of
Default described in paragraph 12.1(a) or (b) decisions of the Majority Banks to
accelerate and/or exercise remedies pursuant to
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paragraph 12.4 shall be made without regard to whether the Agent is among the
Majority Banks.
Management Agreements. Agreements, whether written or oral, providing for the
management of the Mortgaged Properties or any of them.
Maturity Date. April 12, 1998, or such earlier date on which the Loans shall
become due and payable pursuant to the terms hereof.
Mortgaged Property or Mortgaged Properties. The Eligible Real Estate owned by
the Borrower which is conveyed to and accepted by the Agent as security for the
Obligations of the Borrower pursuant to the Security Deeds.
Multiemployer Plan. Any multiemployer plan within the meaning of paragraph
3(37) of ERISA maintained or contributed to by either of the Borrower or any
ERISA Affiliate.
Net Income (or Deficit). With respect to any Person (or any asset of any Person)
for any fiscal period, the net income (or deficit) of such Person (or
attributable to such asset), after deduction of all expenses, taxes and other
proper charges, determined in accordance with generally accepted accounting
principles.
Net Offering Proceeds. The gross cash proceeds received by the Borrower as a
result of a Debt Offering or an Equity Offering less customary and reasonable
costs, fees, expenses, underwriting commissions and discounts incurred by the
Borrower in connection therewith.
Non-recourse Indebtedness. Indebtedness of a Person which is secured by one or
more parcels of Real Estate (other than Mortgaged Property) and related personal
property or interests therein and Short-term Investments and is not a general
obligation of such Person, the holder of such Indebtedness having recourse
solely to the parcels of Real Estate securing such Indebtedness, the Building
and Leases thereon and the rents and profits thereof and the Short-term
Investments securing such Indebtedness.
Notes. See paragraph 2.3.
Notice. See paragraph 19.
Obligations. All indebtedness, obligations and liabilities of the Borrower to
any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans
or the Notes, or other instruments at any time evidencing any of the foregoing,
whether existing on the date of this Agreement or arising or incurred hereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise.
Operating Cash Flow. With respect to any Person (or any asset of any Person) for
any period, an amount equal to the sum of (a) the Net Income of such Person (or
attributable to such asset) for such period plus (b) depreciation and
amortization, interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income minus (c) any extraordinary or
nonrecurring gains included in calculating such Net Income minus (d) the Capital
Expenditure Reserve Amount, all as determined in accordance with generally
accepted accounting principles.
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Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by paragraph 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances permitted
by paragraph 8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Potential Collateral. Any property of the Borrower which is not at the time
included in the Collateral and which consists of (i) Eligible Real Estate and
(ii) Real Estate which is capable of becoming Eligible Real Estate through the
approval of the Majority Banks and the completion and delivery of Eligible Real
Estate Qualification Documents.
Pro Forma Debt Service Charges. For any period of four consecutive fiscal
quarters the sum of principal and interest which would have been payable during
such period on a loan in the original principal amount equal to the outstanding
principal balance of the Loans as of the date of such determination bearing
interest at a rate per annum equal to the greater of (i) the sum of the then
current annual yield on ten (10) year obligations issued by the United States
Treasury most recently prior to the date of such determination plus two percent
(2%) and (ii) the then applicable interest rate(s) and being payable based on a
20 year mortgage style amortization schedule. Such determination of the Pro
Forma Debt Service Charges by the Agent shall be conclusive and binding absent
manifest error.
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by any Bank with
respect to any Loan referred to in such Note.
Reference Bank. FNBB.
Register. See paragraph 18.2.
REIT Status. With respect to the Borrower, its status as a real estate
investment trust as defined in paragraph 856(a) of the Code.
Release. See paragraph 6.18(c)(iii).
Rent Roll. A report prepared by the Borrower showing for each unit its type,
occupancy status, lease expiration date, market rent, lease rent and other
information in substantially the form presented to the Banks prior to the date
hereof or in such other form as may have been approved by the Majority Banks,
such approval not to be unreasonably withheld.
SEC. The federal Securities and Exchange Commission.
Security Deeds. The Mortgages, Deeds to Secure Debt and Deeds of Trust from
the Borrower to the Agent for the benefit of the Banks (or to trustees named
therein acting on behalf of the Agent for the benefit of the Banks), as the
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same may be modified or amended, pursuant to which the Borrower has conveyed a
Mortgaged Property as security for the Obligations of the Borrower. Security
Documents. The Security Deeds, the Assignments of Rents and Leases, the
Indemnity Agreement, and any further collateral assignments to the Agent for the
benefit of the Banks, including, without limitation, UCC-1 financing statements
executed and delivered in connection therewith.
Service Agreement. Service agreements with third parties, whether written or
oral, relating to the operation, maintenance, security, finance or insurance of
Mortgaged Property.
Short-term Investments. Investments described in subsections (a) through (g),
inclusive, of paragraph 8.3.
State. A state of the United States of America.
Subsidiary. Any corporation, association, partnership, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding Voting Interests.
Successful Initial Public Offering. An offering of common equity of the Borrower
to the public pursuant to a registration statement under the Securities Act of
1933, as amended, and the rules and regulations in effect thereunder, which has
been declared effective by the Securities and Exchange Commission and results in
(i) the common equity being listed on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market System for a per share price of not
less than $12 per share and (ii) net proceeds to the Borrower after underwriting
fees or placement fees, as the case may be, of not less than $50,000,000.
Survey. An instrument survey of Mortgaged Property prepared by a registered land
surveyor which shall show the location of all buildings, structures, easements
and utility lines on such property, shall be sufficient to remove the standard
survey exception from the Title Policy, shall show that all buildings and
structures are within the lot lines of the Mortgaged Property and shall not show
any encroachments by others (or to the extent any encroachments are shown, such
encroachments shall be acceptable to the Majority Banks in their sole
discretion), shall show rights of way, adjoining sites, establish building lines
and street lines, the distance to, and names of the nearest intersecting streets
and such other details as the Majority Banks may reasonably require; shall show
the zoning district or districts in which the Mortgaged Property is located and
shall show whether or not the Mortgaged Property is located in a flood hazard
district as established by the Federal Emergency Management Agency or any
successor agency or is located in any flood plain, flood hazard or wetland
protection district established under federal, state or local law and shall
otherwise be in form and substance reasonably satisfactory to the Majority
Banks.
Surveyor Certification. With respect to each parcel of Mortgaged Property, a
certificate executed by the surveyor who prepared the Survey with respect
thereto, dated as of a recent date and containing such information relating to
such parcel as the Majority Banks or the Title Insurance Company may reasonably
require, such certificate to be reasonably satisfactory to the Majority Banks in
form and substance.
Title Insurance Company. Chicago Title Insurance Company or another title
insurance company or companies approved by the Majority Banks.
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Title Policy. With respect to each parcel of Mortgaged Property, an ALTA
standard form title insurance policy (or, if such form is not available, an
equivalent form of or legally promulgated form of mortgagee title insurance
policy reasonably acceptable to the Majority Banks) issued by a Title Insurance
Company (with such reinsurance or co-insurance as the Majority Banks may
require, any such reinsurance to be with direct access endorsements to the
extent available under applicable law) in such amount as the Majority Banks may
require insuring the priority of the Security Deeds and that the Borrower holds
marketable fee simple title to such parcel, subject only to the encumbrances
permitted by the Security Deed and which shall not contain standard exceptions
for mechanics liens, persons in occupancy (other than tenants as tenants only
under Leases) or matters which would be shown by a survey, shall not insure over
any matter except to the extent that any such affirmative insurance is
acceptable to the Majority Banks in their reasonable discretion, and shall
contain (a) a revolving credit endorsement and (b) such other endorsements and
affirmative insurance as the Majority Banks reasonably may require and is
available in the State in which the Real Estate is located, including but not
limited to (i) a comprehensive endorsement, (ii) a variable rate of interest
endorsement, (iii) a usury endorsement, (iv) a doing business endorsement, (v)
in States where available, an ALTA form 3.1 zoning endorsement, (vi) a "tie in"
endorsement and (vii) a "first loss" endorsement.
Total Commitment. The sum of the Commitments of the Banks, as in effect from
time to time. As of the date of this Agreement, the Total Commitment is
$35,000,000.00.
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
Voting Interests. Stock or similar ownership interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, (a) to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, partnership,
trust or other business entity involved, or (b) to control, manage, or conduct
the business of the corporation, partnership, association, trust or other
business entity involved.
1.2 Rules of Interpretation.
(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.
(b) The singular includes the plural and the plural includes the singular.
(c) A reference to any law includes any amendment or modification to such
law.
(d) A reference to any Person includes its permitted successors and
permitted assigns.
(e) Accounting terms not otherwise defined herein have the meanings assigned to
them by generally accepted accounting principles applied on a consistent basis
by the accounting entity to which they refer.
(f) The words "include", "includes" and "including" are not limiting.
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(g) The words "approval" and "approved", as the context so determines, means an
approval in writing given to the party seeking approval after full and fair
disclosure to the party giving approval of all material facts necessary in order
to determine whether approval should be granted.
(h) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the State of Illinois, have the meanings assigned to them therein.
(i) Reference to a particular "paragraph", refers to that section of this
Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
2. THE REVOLVING CREDIT FACILITY.
2.1. Commitment to Lend. Subject to the terms and conditions set forth in this
Agreement, each of the Banks severally agrees to lend to the Borrower (the
"Loans"), and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with paragraph 2.5, such sums as are requested by
the Borrower for the purposes set forth in paragraph 7.11 up to the lesser of
(a) a maximum aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment and (b) such
Bank's Commitment Percentage of the Borrowing Base; provided, that, in all
events no Default or Event of Default shall have occurred and be continuing; and
provided, further that the outstanding principal amount of the Loans (after
giving effect to all amounts requested) shall not at anytime exceed the Total
Commitment. The Loans shall be made pro rata in accordance with each Bank's
Commitment Percentage. Each request for a Loan hereunder shall constitute a
representation and warranty by the Borrower that all of the conditions set forth
in paragraph 10 and paragraph 11, in the case of the initial Loan, and paragraph
11, in the case of all other Loans, have been satisfied on the date of such
request.
2.2. Unused Facility Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
an unused facility fee calculated at the rate of one-fourth of one percent
(1/4%) per annum on the average daily amount by which the aggregate Commitment
exceeds the outstanding principal amount of Loans during each calendar quarter
or portion thereof commencing on the date hereof and ending on the Maturity
Date. The unused facility fee shall be payable quarterly in arrears on the first
day of each calendar quarter for the immediately preceding calendar quarter or
portion thereof, with a final payment on the Maturity Date.
2.3. Notes. The Loans shall be evidenced by separate promissory notes of the
Borrower in substantially the form of Exhibit A hereto (collectively, the
"Notes"), dated as of the Closing Date and completed with appropriate
insertions. One Note shall be payable to the order of each Bank in the principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Loans made by such Bank, plus interest accrued thereon, as set forth below.
The Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation
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on such Bank's Record reflecting the making of such Loan or (as the case may be)
the receipt of such payment. The outstanding amount of the Loans set forth on
such Bank's Record shall be prima facie evidence of the principal amount thereof
owing and unpaid to such Bank, but the failure to record, or any error in so
recording, any such amount on such Bank's Record shall not limit or otherwise
affect the obligations of the Borrower hereunder or under any Note to make
payments of principal of or interest on any Note when due.
2.4. Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the date on which such Base Rate Loan is
converted to a LIBOR Rate Loan at the per annum rate equal to the Base Rate.
(b) Each LIBOR Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at the rate per annum equal to the sum of the Applicable Margin
plus the LIBOR Rate determined for such Interest Period.
(c) The Borrower promises to pay interest on each Loan to it in arrears on each
Interest Payment Date with respect thereto.
(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other
Type as provided in paragraph 4.1.
2.5. Requests for Loans. The Borrower (i) shall notify the Agent of a potential
request for a Loan as soon as possible but not less than six (6) Business Days
prior to the Borrower's proposed Drawdown Date, and (ii) shall give to the Agent
written notice in the form of Exhibit B hereto (or telephonic notice confirmed
in writing in the form of Exhibit B hereto) of each Loan requested hereunder (a
"Loan Request") no less than three (3) Business Days prior to the proposed
Drawdown Date. Each such notice shall specify with respect to the requested Loan
the proposed principal amount, Drawdown Date, Interest Period (if applicable)
and Type. Each such notice shall also contain (i) a statement as to the purpose
for which such advance shall be or has been used (which purpose shall be in
accordance with the terms of paragraph 7.11), (ii) in the case of any advance
relating to any Capital Improvement Project, upon the request of the Agent (A) a
statement that such advance will reimburse the Borrower for or pay costs
incurred for work on the applicable Capital Improvement Project together with
such evidence as the Majority Banks may reasonably require to verify the cost of
such work (which evidence may include, without limitation, invoices and
receipts) and that such work is in place or that stored materials are properly
secured (which evidence may include a satisfactory report from the Construction
Inspector), and (B) in the event that such Capital Improvement Project relates
to a Mortgaged Property and if requested by the Majority Banks, delivery to the
Agent of affidavits, lien waivers or other evidence reasonably satisfactory to
the Majority Banks showing that all materialmen, laborers, subcontractors and
any other parties who might or could claim statutory or common law liens and are
furnishing or have furnished material or labor to the Mortgaged Property have
been paid all amounts due for such labor and materials, and (iii) a
certification by the chief financial or chief accounting officer of the Borrower
that the Borrower is and will be in compliance with all covenants under the Loan
Documents after giving effect to the making of such Loan. Notwithstanding
anything in this paragraph 2.5 to the contrary, the Borrower shall be permitted
to use the proceeds of a Loan to reimburse the Borrower for amounts paid from
its own funds within the preceding ninety (90) days for a
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purpose authorized by the terms of paragraph 7.11. Promptly upon receipt of any
such notice, the Agent shall notify each of the Banks thereof. Except as
provided in this paragraph 2.5, each such Loan Request shall be irrevocable and
binding on the Borrower and shall obligate the Borrower to accept the Loan
requested from the Banks on the proposed Drawdown Date, provided that, in
addition to the Borrower's other remedies against any Bank which fails to
advance its proportionate share of a requested Loan, such Loan Request may be
revoked by the Borrower by notice received by the Agent no later than the
Drawdown Date if any Bank fails to advance its proportionate share of the
requested Loan in accordance with the terms of this Agreement, provided further
that the Borrower shall be liable in accordance with the terms of this Agreement
to any Bank which is prepared to advance its proportionate share of the
requested Loan for any costs, expenses or damages actually incurred by such Bank
as a result of the Borrower's election to revoke such Loan Request. Nothing
herein shall prevent the Borrower from seeking recourse against any Bank that
fails to advance its proportionate share of a requested Loan as required by this
Agreement. The Borrower may without cost or penalty revoke a Loan Request by
delivering notice thereof to each of the Banks no later than three (3) Business
Days prior to the Drawdown Date. Each Loan Request shall be (a) for a Base Rate
Loan in a minimum aggregate amount of $1,000,000 or an integral multiple of
$100,000 in excess thereof, or (b) for a LIBOR Rate Loan in a minimum aggregate
amount of $2,000,000 or an integral multiple of $100,000 in excess thereof;
provided, however, that there shall be no more than four (4) LIBOR Rate Loans
outstanding at any one time. In the event that the proceeds from such Loan have
been or are to be used for a purpose other than a Capital Improvement Project,
then the Borrower shall provide to the Agent as soon as practicable such
evidence as the Majority Banks shall reasonably require to evidence that such
funds have been used for such purpose (which evidence may include, without
limitation, a closing statement).
2.6. Funds for Loans. Not later than 11:00 a.m. (Boston time) on the proposed
Drawdown Date of any Loans, each of the Banks will make available to the Agent,
at the Agent's Head Office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested Loans which may be
disbursed pursuant to paragraph 2.1. Upon receipt from each Bank of such amount,
and upon receipt of the documents required by paragraph 10 and paragraph 11 and
the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Loans made available to the Agent by the Banks by crediting such amount
to the account of the Borrower maintained at the Agent's Head Office. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Loans, including any additional Loans
that may be requested subject to the terms and conditions hereof to provide
funds to replace those not advanced by the Bank so failing or refusing, provided
that the Borrower may by notice received by the Agent no later than the Drawdown
Date refuse to accept any Loan which is not fully funded in accordance with the
Borrower's Loan Request subject to the terms of paragraph 2.5. In the event of
any such failure or refusal, the Banks not so failing or refusing shall be
entitled to a priority secured position as against the Bank or Banks so failing
or refusing for such Loans as provided in paragraph 12.5.
3. REPAYMENT OF THE LOANS.
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3.1. Stated Maturity. The Borrower promises to pay on the Maturity Date and
there shall become absolutely due and payable on the Maturity Date all of the
Loans outstanding on such date, together with any and all accrued and unpaid
interest thereon.
3.2. Mandatory Prepayments. If at any time the aggregate outstanding principal
amount of the Loans exceeds (a) the aggregate Commitment, or (a) the Borrowing
Base for the Loans, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks for application to
such Loans.
3.3. Optional Prepayments. The Borrower shall have the right, at its election,
to prepay the outstanding amount of the applicable Loans, as a whole or in part,
at any time without penalty or premium; provided, that the full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this
paragraph 3.3 may be made only on the last day of the Interest Period relating
thereto except as otherwise required pursuant to paragraph 4.7. The Borrower
shall give the Agent, no later than 10:00 a.m., Boston time, at least five (5)
Business Days' prior written notice of any prepayment pursuant to this paragraph
3.3, in each case specifying the proposed date of payment of Loans and the
principal amount to be paid.
3.4. Partial Prepayments. Each partial prepayment of the Loans under paragraph
3.2(a) and paragraph 3.3 shall be in an integral multiple of $100,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of payment and, after payment of such interest, shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of LIBOR Rate Loans.
3.5. Effect of Prepayments. Amounts of the Loans prepaid under paragraph 3.2
and paragraph 3.3 prior to the Maturity Date may be reborrowed as provided in
paragraph 2.
3.6. Proceeds from Debt or Equity Offering. At the option of the Majority Banks,
the Borrower shall cause any Net Offering Proceeds to be paid by the Borrower
(i) to the Agent for the account of the Banks as a prepayment of the Loans to
the Borrower to the extent of the outstanding balance of such Loans or (ii) to
American National Bank and Trust Company of Chicago to pay off its Indebtedness
referred to in item 5 of Schedule 8.1 and to have the liens in favor of American
National Bank and Trust Company of Chicago identified in items 4,6,7 and 9 of
Schedule 8.2 released.
CERTAIN GENERAL PROVISIONS.
Conversion Options.
The Borrower may elect from time to time to convert any of its outstanding Loans
to a Loan of another Type and such Loan shall thereafter bear interest as a Base
Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with respect to
any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the Borrower shall
give the Agent at least three (3) Business Days' prior written notice of such
election, and such conversion shall only be made on the last day of the Interest
Period with respect to such LIBOR Rate Loan; (ii) with respect to any such
conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower shall give the
Agent at least four (4) LIBOR Business Days' prior written notice of such
election and the Interest Period requested for such Loan, the principal amount
of the Loan so converted shall be in a minimum aggregate amount of $2,000,000 or
an integral multiple of $100,000 in excess
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thereof and, after giving effect to the making of such Loan, there shall be no
more than four (4) LIBOR Rate Loans outstanding at any one time; and (iii) no
Loan may be converted into a LIBOR Rate Loan when any Default or Event of
Default has occurred and is continuing. All or any part of the outstanding Loans
of any Type may be converted as provided herein, provided that no partial
conversion shall result in a Base Rate Loan in an aggregate principal amount of
less than $1,000,000 or a LIBOR Rate Loan in an aggregate principal amount of
less than $2,000,000 and that the aggregate principal amount of each Loan shall
be in an integral multiple of $100,000. On the date on which such conversion is
being made, each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR
Lending Office, as the case may be. Each Conversion Request relating to the
conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the
Borrower.
Any Loan may be continued as such Type upon the expiration of an Interest Period
with respect thereto by compliance by the Borrower with the terms of paragraph
4.1; provided that no LIBOR Rate Loan may be continued as such when any Default
or Event of Default has occurred and is continuing, but shall be automatically
converted to a Base Rate Loan on the last day of the Interest Period relating
thereto ending during the continuance of any Default or Event of Default.
In the event that the Borrower does not notify the Agent of its election
hereunder with respect to any Loan to it, such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.
Commitment and Syndication Fee. The Borrower agrees to pay to FNBB certain fees
for services rendered or to be rendered in connection with the Loan as provided
pursuant to an Agreement Regarding Fees dated as of March 15, 1996 between the
Borrower and FNBB.
Agent's Fee. The Borrower shall pay to the Agent, for the Agent's own account,
an annual Agent's fee calculated at the rate, and payable at such times as are,
set forth in the Agreement Regarding Fees referred to in paragraph 4.2.
Funds for Payments.
(a) All payments of principal, interest, unused facility fees, Agent's fees,
closing fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the Banks
and the Agent, as the case may be, at the Agent's Head Office, not later than
1:00 p.m. (Boston time) on the day when due, in each case in immediately
available funds. The Agent is hereby authorized to charge the accounts of the
Borrower with FNBB, on the dates when the amount thereof shall become due and
payable, with the amounts of the principal of and interest on the Loans and all
fees, charges, expenses and other amounts owing to the Agent and/or the Banks
under the Loan Documents.
(b) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by
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them hereunder or under any of the other Loan Documents, the Borrower will pay
to the Agent, for the account of the Banks or (as the case may be) the Agent, on
the date on which such amount is due and payable hereunder or under such other
Loan Document, such additional amount in Dollars as shall be necessary to enable
the Banks or the Agent to receive the same net amount which the Banks or the
Agent would have received on such due date had no such obligation been imposed
upon the Borrower. The Borrower will deliver promptly to the Agent certificates
or other valid vouchers for all taxes or other charges deducted from or paid
with respect to payments made by the Borrower hereunder or under such other Loan
Document. FNBB represents and warrants that, to the best of its knowledge, it is
exempt from United States Federal withholding requirements as it applies to
payments to be made by the Borrower to FNBB hereunder.
Computations. All computations of interest on the Loans and of other fees to the
extent applicable shall be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the records of the Agent from
time to time shall be considered prima facie evidence of such amount.
Inability to Determine LIBOR Rate. In the event that, prior to the commencement
of any Interest Period relating to any LIBOR Rate Loan, the Agent shall
reasonably determine that adequate and reasonable methods do not exist for
ascertaining the LIBOR Rate for such Interest Period, the Agent shall forthwith
give notice of such determination (which shall be conclusive and binding on the
Borrower and the Banks) to the Borrower and the Banks. In such event (a) any
Loan Request with respect to LIBOR Rate Loans shall be automatically withdrawn
and shall be deemed a request for Base Rate Loans and (b) each LIBOR Rate Loan
will automatically, on the last day of the then current Interest Period thereof,
become a Base Rate Loan, and the obligations of the Banks to make LIBOR Rate
Loans shall be suspended until the Agent determines that the circumstances
giving rise to such suspension no longer exist, whereupon the Agent shall so
notify the Borrower and the Banks.
Illegality. Notwithstanding any other provisions herein, if any present or
future law, regulation, treaty or directive or the interpretation or application
thereof shall make it unlawful, or any central bank or other governmental
authority having jurisdiction over a Bank or its LIBOR Lending Office shall
assert that it is unlawful, for any Bank to make or maintain LIBOR Rate Loans,
such Bank shall forthwith give notice of such circumstances to the Agent and the
Borrower and thereupon (a) the commitment of the Banks to make LIBOR Rate Loans
or convert Loans of another type to LIBOR Rate Loans shall forthwith be
suspended and (b) the LIBOR Rate Loans then outstanding shall be converted
automatically to Base Rate Loans on the last day of each Interest Period
applicable to such LIBOR Rate Loans or within such earlier period as may be
required by law.
Additional Interest. If any LIBOR Rate Loan or any portion thereof is repaid or
is converted to a Base Rate Loan for any reason on a date which is prior to the
last day of the Interest Period applicable to such LIBOR Rate Loan, the Borrower
will pay to the Agent upon the later of fifteen (15) days after demand or the
next scheduled Interest Payment Date for the account of the Banks in accordance
with their respective Commitment Percentages, in addition to any amounts of
interest otherwise payable hereunder, any amounts required
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to compensate the Banks for any losses, costs or expenses which may reasonably
be incurred as a result of such payment or conversion, including, without
limitation, an amount equal to daily interest for the unexpired portion of such
Interest Period on the LIBOR Rate Loan or portion thereof so repaid or converted
at a per annum rate equal to the excess, if any, of (a) the interest rate
calculated on the basis of the LIBOR Rate applicable to such LIBOR Rate Loan
minus (b) the yield obtainable by the Agent upon the purchase of debt securities
customarily issued by the Treasury of the United States of America which have a
maturity date most closely approximating the last day of such Interest Period
(it being understood that the purchase of such securities shall not be required
in order for such amounts to be payable).
Additional Costs, Etc. Notwithstanding anything herein to the contrary, if any
present or future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and legally binding interpretations
thereof by any competent court or by any governmental or other regulatory body
or official with appropriate jurisdiction charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, such Bank's Commitment or the Loans (other than taxes based upon
or measured by the income or profits of such Bank or the Agent), or
(a) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Bank of the principal of or the interest
on any Loans or any other amounts payable to any Bank under this Agreement or
the other Loan Documents, or
(a) impose or increase or render applicable any special deposit, reserve,
assessment, liquidity, capital adequacy or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or commitments of an office of any Bank, or
(a) impose on any Bank or the Agent any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, such Bank's
Commitment, or any class of loans or commitments of which any of the Loans or
such Bank's Commitment forms a part; and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing, renewing,
extending or maintaining any of the Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other amount payable to such
Bank or the Agent hereunder on account of such Bank's Commitment or any of the
Loans, or
(iii) to require such Bank or the Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from the Borrower
hereunder, then, and in each such case, the Borrower will, upon the later of
fifteen (15) days after demand made by such Bank or (as the case may be) the
Agent or the next scheduled Interest Payment Date at any time and from
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time to time and as often as the occasion therefor may arise, pay to such Bank
or the Agent such additional amounts as such Bank or the Agent shall determine
in good faith to be sufficient to compensate such Bank or the Agent for such
additional cost, reduction, payment or foregone interest or other sum. Each Bank
and the Agent in determining such amounts may use any reasonable averaging and
attribution methods, generally applied by such Bank or the Agent.
Capital Adequacy. If after the date hereof any Bank determines that (a) the
adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any governmental authority charged with
the administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Bank's or such holding company's capital
as a consequence of such Bank's commitment to make Loans hereunder to a level
below that which such Bank or holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
holding company's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed by
such Bank to be material, then such Bank may notify the Borrower thereof. The
Borrower agrees to pay to such Bank the amount of such reduction in the return
on capital upon the later of fifteen (15) days after such reduction is
determined or the next scheduled Interest Payment Date, upon presentation by
such Bank of a statement of the amount setting for the Bank's calculation
thereof. In determining such amount, such Bank may use any reasonable averaging
and attribution methods.
Indemnity of Borrower. The Borrower agrees to indemnify each Bank and to hold
each Bank harmless from and against any loss, cost or expense that such Bank may
sustain or incur as a consequence of (a) default by the Borrower in payment of
the principal amount of or any interest on any LIBOR Rate Loans as and when due
and payable, including any such loss or expense arising from interest or fees
payable by such Bank to lenders of funds obtained by it in order to maintain its
LIBOR Rate Loans, or (b) default by the Borrower in making a borrowing or
conversion after the Borrower has given (or is deemed to have given) a Loan
Request or a Conversion Request.
Interest on Overdue Amounts; Late Charge. Overdue principal and (to the extent
permitted by applicable law) interest on the Loans and all other overdue amounts
payable hereunder or under any of the other Loan Documents shall bear interest
payable on demand at a rate per annum equal to five percent (5.0%) above the
Base Rate until such amount shall be paid in full (after as well as before
judgment). In addition, the Borrower shall pay a late charge equal to four
percent (4.0%) of any amount of interest and/or principal payable on the Loans
or any other amounts payable hereunder or under the Loan Documents, which is not
paid by the Borrower within ten days of the date when due.
0.1 HLT Classification. The Banks acknowledge that as of the date hereof neither
the Commitments nor the Loans are classified as "highly leveraged transactions".
Notwithstanding the foregoing, if after the date hereof, the Agent determines,
or is advised by any Bank that such Bank has determined or has received notice
from any governmental authority, central bank or comparable agency having
jurisdiction over such Bank, that any of the Commitments or Loans are classified
as a "highly leveraged transaction" (an "HLT Classification") pursuant to any
existing regulations regarding "highly
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leveraged transactions" or any modification, amendment or interpretation
thereof, or the adoption of new regulations regarding "highly leveraged
transactions" after the date hereof by any governmental authority, central bank
or comparable agency, the Agent shall promptly give notice of such HLT
Classification to the Borrower and the Banks (which date is hereafter referred
to as the "HLT Notice Date"). The Agent, the Banks and the Borrower shall
thereupon commence negotiations in good faith to agree on the extent to which
fees, interest rates and/or margins hereunder should be increased so as to
reflect such HLT Classification. If the Borrower and the Majority Banks agree on
the amount of such increase or increases, this Agreement shall be promptly
amended to give effect to such increase or increases. If the Borrower and the
Majority Banks fail to so agree and the Borrower has failed to refinance the
Loans within 90 days after the HLT Notice Date, then the Agent shall, if so
requested by the Majority Banks, by notice to the Borrower terminate the
Commitments and accelerate the maturity date of the Loans and the Loans shall
become due and payable in full on the date specified in such notice, which date
shall be not earlier than 180 days after the HLT Notice Date. The Agent and the
Banks acknowledge that an HLT Classification is not a Default or an Event of
Default.
Certificate. A certificate setting forth any amounts payable pursuant to
paragraph 4.8, paragraph 4.9, paragraph 4.10, paragraph 4.11, paragraph 4.12 or
paragraph 4.13 and a brief explanation of such amounts which are due, submitted
by any Bank or the Agent to the Borrower, shall be conclusive in the absence of
manifest error.
0.1 Limitation on Interest. Notwithstanding anything in this Agreement to the
contrary, all agreements between the Borrower and the Banks and the Agent,
whether now existing or hereafter arising and whether written or oral, are
hereby limited so that in no contingency, whether by reason of acceleration of
the maturity of any of the Obligations or otherwise, shall the interest
contracted for, charged or received by the Banks exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to the Banks in excess of the maximum lawful amount,
the interest payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Banks shall
ever receive anything of value deemed interest by applicable law in excess of
the maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations of the
Borrower and to the payment of interest or, if such excessive interest exceeds
the unpaid balance of principal of the Obligations of the Borrower, such excess
shall be refunded to the Borrower. All interest paid or agreed to be paid to the
Banks shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations of the Borrower (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law. This section
shall control all agreements between the Borrower and the Banks and the Agent.
Substitution of a Bank. If any Bank (the "Affected Bank") has demanded
compensation or given notice of its intention to demand compensation pursuant to
paragraph 4.7, paragraph 4.9 or paragraph 4.10, and the circumstance triggering
such demand or intention to demand is not applicable to all of the Banks, the
Borrower shall have the right, with the assistance of the Agent, to seek one or
more mutually satisfactory substitute banks or financial institutions (which may
be one or more of the Banks) to replace such Affected
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Bank, subject to the payment to the Agent of an appropriate fee to be agreed
upon for the assistance to be provided by the Agent.
COLLATERAL SECURITY.
Collateral. The Obligations of the Borrower shall be secured by (i) a perfected
first priority lien or security title to be held by the Agent for the benefit of
the Banks in the Mortgaged Property of the Borrower, pursuant to the terms of
the Security Deeds, (ii) a perfected first priority security interest to be held
by the Agent for the benefit of the Banks in the Leases pursuant to the
Assignments of Rents and Leases from the Borrower and (iii) the Indemnity
Agreement.
Appraisals.
The Agent on behalf of the Banks shall require Appraisals of each of the
Mortgaged Properties once every five (5) years, which will be ordered by the
Agent and reviewed and approved by the appraisal department of the Agent, or, if
the Agent's appraisal department has determined that the value of any Mortgaged
Property is more than five percent (5%) different from the value for such
Mortgaged Property as set forth in the Appraisal delivered to the Agent by the
Borrower, by the appraisal departments of the Majority Banks, in order to
determine the current Appraised Value and Borrowing Base of the Mortgaged
Property, and the Borrower shall pay to the Agent on demand all reasonable costs
of all such Appraisals relating to the Mortgaged Property of the Borrower;
provided, however, that so long as (i) no Default or Event of Default shall have
occurred and be continuing, (ii) regulatory requirements of any Bank generally
applicable to real estate loans of the category made under this Agreement as
reasonably interpreted by such Bank shall not require more frequent Appraisals
and (iii) there has been no material change in the market for the leasing of any
of the Mortgaged Properties as reasonably determined by the Agent, the Borrower
shall not be required to pay for Appraisals for a particular Mortgaged Property
more often than once in any five (5) year period, with the result that unless
any such condition shall occur the first Appraisals of a Mortgaged Property for
which the Borrower shall be financially responsible shall not be required prior
to the date which is five (5) years from the date of the Appraisal for such
Mortgaged Property delivered to the Agent pursuant to this Agreement.
Notwithstanding the foregoing provisions, however, in the event of a material
change of the type referred to in clause (iii), the Borrower shall not be
required to pay for Appraisals of the affected Mortgaged Property or Mortgaged
Properties more often than once in any 12 month period.
Notwithstanding the provisions of paragraph 5.2(a), the Agent may, for the
purpose of determining the current Appraised Value and Borrowing Base of the
applicable Mortgaged Properties, perform annual internal studies updating and
revising prior Appraisals with respect to the Mortgaged Properties or such
portion thereof as the Agent shall determine at any time following (i) the
occurrence of an event or condition which, in the reasonable judgment of the
Agent, constitutes a material adverse change with respect to a Mortgaged
Property or presents a reasonable likelihood that such a change shall occur in
the future or (ii) a condemnation of or uninsured casualty to a Mortgaged
Property (provided that any such Appraisal as a result of an event or condition
described in clause (i) or (ii) shall be limited to the affected Mortgaged
Property). The expense of such Appraisals and updates performed pursuant to this
paragraph 5.2(b) shall be borne by the Borrower, provided that the Borrower
shall not be required to pay for any update pursuant to paragraph 5.2(b)(i) more
often than once in any twelve (12) month period.
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paragraph 1. In the event that the Agent shall advise the Borrower, on the basis
of any Appraisal or update pursuant to paragraph 5.2, that the Borrower's
Borrowing Base is insufficient to comply with the requirements of paragraph 9.1,
then until such Borrowing Base shall be restored to compliance with paragraph
9.1 the Banks shall not be required to make advances under paragraph 2.1.
0.1 Release of Collateral. Upon termination of this Agreement and the Commitment
of the Banks to make Loans hereunder and the payment in full of all of the
Obligations, the Agent, on behalf of the Banks, shall release the Collateral and
shall execute such instruments of release as the Borrower and its counsel may
reasonably request. In addition, Collateral may be released as provided in 8.8.
0.1 Substitution of Mortgaged Property. Any requested substitution by the
Borrower of any Real Estate for any Mortgaged Property shall require the consent
of the Majority Banks and shall require the completion and delivery to the
Agent, for the benefit of the Banks, of the Eligible Real Estate Qualification
Documents and the payment to the Agent, for the benefit of the Banks, of a
substitution fee of $5,000.
1. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as follows.
0.1 Corporate Authority, Etc.
(a) Incorporation; Good Standing. The Borrower is a Maryland corporation duly
organized pursuant to its Articles of Incorporation and amendments thereto filed
with the Secretary of the State of Maryland and is validly existing and in good
standing under the laws of Maryland. The Borrower (i) has all requisite power to
own its respective property and conduct its respective business as now conducted
and as presently contemplated, and (ii) is in good standing as a foreign entity
and is duly authorized to do business in the jurisdictions where the Mortgaged
Property of the Borrower is located and in each other jurisdiction where a
failure to be so qualified in such other jurisdiction could have a materially
adverse effect on the business, assets or financial condition of such person.
The Borrower is a real estate investment trust in full compliance with and
entitled to the benefits of 856 of the Code.
(a) Subsidiaries. Each of the Subsidiaries of the Borrower (i) is a corporation,
limited partnership or trust duly organized under the laws of its State of
organization and is validly existing and in good standing under the laws
thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where
Mortgaged Property held by it is located and in each other jurisdiction where a
failure to be so qualified could have a materially adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary.
(a) Authorization. The execution, delivery and performance of this Agreement and
the other Loan Documents to which the Borrower is or is to become a party and
the transactions contemplated hereby and thereby (i) are within the authority of
such Person, (ii) have been duly authorized by all necessary proceedings on the
part of such Person, (iii) do not and will not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction, license
or permit applicable to such Person, (iv) do
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not and will not conflict with or constitute a default (whether with the passage
of time or the giving of notice, or both) under any provision of the articles of
incorporation, partnership agreement, declaration of trust or other charter
documents or bylaws of, or any agreement or other instrument binding upon, such
Person or any of its properties, and (v) do not and will not result in or
require the imposition of any lien or other encumbrance on any of the
properties, assets or rights of such Person.
(a) Enforceability. The execution and delivery of this Agreement and the other
Loan Documents to which the Borrower is or is to become a party are valid and
legally binding obligations of such Person enforceable in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
(a) Governmental Approvals. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is or is to become
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained and the filing of the Security Documents in
the appropriate records office with respect thereto.
0.1 Title to Properties: Lease. The Borrower and its Subsidiaries own all of the
assets reflected in the consolidated balance sheet of the Borrower as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
0.1 Financial Statements. The Borrower has furnished to each of the Banks: (a)
the consolidated balance sheet of the Borrower and its Subsidiaries as of the
Balance Sheet Date, (b) an unaudited statement of Operating Cash Flow for each
of the Mortgaged Properties for the previous three (3) fiscal years ended
December 31, 1995, to the extent available, satisfactory in form to the Majority
Banks and certified by the chief financial or accounting officer of the Borrower
as fairly presenting the operating income for such parcels for such periods,
provided that such certification need only be made with respect to any Mortgaged
Property for the period such Mortgaged Property has been owned and operated by
the Borrower, if such period is less than three (3) fiscal years, and (c)
certain other financial information relating to the Borrower and the Real
Estate. Such balance sheet and statements have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
condition of the Borrower and its Subsidiaries as of such dates and the results
of the operations of the Borrower and the Mortgaged Properties for such periods.
There are no liabilities, contingent or otherwise, of the Borrower or any of its
Subsidiaries involving material amounts not disclosed in said financial
statements and the related notes thereto.
0.1 No Material Changes. Since the Balance Sheet Date, there has occurred no
materially adverse change in the financial condition or business of the Borrower
and its Subsidiaries taken as a whole as shown on or reflected in the
consolidated balance sheet of the Borrower as of the Balance Sheet Date, or its
consolidated statement of income or cash flows for the fiscal year then
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ended, other than changes in the ordinary course of business that have not had
any materially adverse effect either individually or in the aggregate on the
business or financial condition of such Person.
0.1 Franchises, Patents, Copyrights, Etc. The Borrower and its Subsidiaries
possess all franchises, patents, copyrights, trademarks, trade names,
servicemarks, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of their business substantially as now conducted
without known conflict with any rights of others.
0.1 Litigation. There are no actions, suits, proceedings or investigations of
any kind pending or to the knowledge of such person threatened in writing
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of such Person or materially impair the
right of such Person to carry on business substantially as now conducted by it,
or result in any liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such Person, or
which question the validity of this Agreement or any of the other Loan
Documents, any action taken or to be taken pursuant hereto or thereto or any
lien or security interest created or intended to be created pursuant hereto or
thereto, or which will adversely affect the ability of the Borrower to pay and
perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents.
0.1 No Materially Adverse Contracts, Etc. Neither the Borrower nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of such Person. Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the partners or officers of such Person, to have any materially adverse effect
on the business of any of them.
0.1 Compliance with Other Instruments, Laws, Etc. Neither the Borrower nor any
of its Subsidiaries is in violation of any provision of its charter or other
organizational documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of such Person.
0.1 Tax Status. The Borrower and each of its Subsidiaries (a) has made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all taxes and
other governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the partners or officers of such Person know of no basis
for any such claim. 0.1 No Event of Default. No Default or Event of Default has
occurred and is continuing.
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0.1 Holding Company and Investment Company Acts. 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", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is any of them an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
0.1 Absence of UCC Financing Statements, Etc. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry, or other public office, that purports to cover, affect or
give notice of any present or possible future lien on, or security interest or
security title in, any property of the Borrower or its Subsidiaries or rights
thereunder.
0.1 Setoff, Etc. The Collateral and the rights of the Agent and the Banks with
respect to the Collateral are not subject to any setoff, claims, withholdings or
other defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance or other claim or demand, except those
encumbrances permitted in the Security Deeds.
0.1 Certain Transactions. Except as set forth on Schedule 6.15, none of the
officers, trustees, directors, or employees of the Borrower or any of its
Subsidiaries is a party to any transaction with either or both of the Borrower
or any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
trustee, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, trustee,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
0.1 Employee Benefit Plans. Neither the Borrower nor any ERISA affiliate
maintains or contributes to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan; provided, however, that nothing hereon shall prohibit
the Borrower or any of its Subsidiaries from maintaining or contributing to an
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan so long as
the Borrower or its Subsidiary does so in compliance with all applicable laws.
0.1 Regulations U and X. No portion of any Loan is to be used for the purpose of
purchasing or carrying any "margin security" or "margin stock" as such terms are
used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
0.1 Environmental Compliance. The Borrower has taken all commercially reasonable
steps to investigate the past and present conditions and usage of the Real
Estate and the operations conducted thereon and, based upon such investigation,
makes the following representations and warranties.
(a) With respect to the Mortgaged Properties, and to the best of the Borrower's
knowledge with respect to any other Real Estate, neither the Borrower nor its
Subsidiaries or any operator of the Real Estate, or any operations thereon is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource
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Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to the
environment (hereinafter "Environmental Laws"), which violation involves any of
the Mortgaged Properties or involves other Real Estate and would have a material
adverse effect on the environment or the business, assets or financial condition
of the Borrower or any of its Subsidiaries.
(a) Neither the Borrower nor any of its Subsidiaries has received notice from
any third party including, without limitation, any federal, state or local
governmental authority, (i) that it has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. paragraph 9601(5), any hazardous substances as defined by 42 U.S.C.
paragraph 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
paragraph 9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of have been found
at any site at which a federal, state or local agency or other third party has
conducted or has ordered that either the Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a named party to any
claim, action, cause of action, complaint, or legal or administrative proceeding
(in each case, contingent or otherwise) arising out of any third party's
incurrence of costs, expenses, losses or damages of any kind whatsoever in
connection with the release of Hazardous Substances.
(a) With respect to the Mortgaged Properties, and to the best of the Borrower's
knowledge with respect to any other Real Estate, except as specifically set
forth in the written environmental site assessment reports of EMG, Inc. provided
to the Agent on or before the date hereof or, in the case of Real Estate
acquired after the date hereof, the environmental site assessment reports with
respect thereto provided to the Agent under paragraph 7.4(h): (i) no portion of
the Real Estate has been used for the handling, processing, storage or disposal
of Hazardous Substances except in accordance with applicable Environmental Laws,
and no underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Mortgaged Property; (ii) in the
course of any activities conducted by either the Borrower, its Subsidiaries or
the operators of its properties, no Hazardous Substances have been generated or
are being used on the Real Estate except in the ordinary course of business and
in accordance with applicable Environmental Laws; (iii) there has been no past
or present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a "Release") or
threatened Release of Hazardous Substances on, upon, into or from any of the
Mortgaged Properties, or, to the best of the Borrower's knowledge, on, upon,
into or from the other properties of either the Borrower or its Subsidiaries,
which Release would have a material adverse effect on the value of any of the
Real Estate or adjacent properties or the environment; (iv) to the best of the
Borrower's knowledge, there have been no Releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would have
a material adverse effect on the value of, the Real Estate; and (v) any
Hazardous Substances that have been generated on any of the Real Estate have
been transported off-site only by carriers having an identification number
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issued by the EPA or approved by a state or local environmental regulatory
authority having jurisdiction regarding the transportation of such substance and
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under all applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(a) Neither the Borrower, its Subsidiaries, the Mortgaged Properties nor any
other Real Estate is subject to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the recording of the Security
Deeds or to the effectiveness of any other transactions contemplated hereby.
0.1 Subsidiaries. Schedule 6.19 sets forth all of the Subsidiaries of the
Borrower. The form and jurisdiction of organization of each of the Subsidiaries,
and the Borrower's ownership interest therein, is set forth in said Schedule
6.19.
0.1 Leases. The Borrower has delivered to the Agent true copies of the forms of
the Leases used by the Borrower at the Mortgaged Properties as of the date
hereof.
0.1 Loan Documents. All of the representations and warranties made by or on
behalf of the Borrower and its Subsidiaries in this Agreement and the other Loan
Documents or any document or instrument delivered to the Agent or the Banks
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and the Borrower has not failed to disclose
such information as is necessary to make such representations and warranties not
misleading.
0.1 Mortgaged Property. The Borrower makes the following representations and
warranties concerning each Mortgaged Property:
(a) Off-Site Utilities. All water, sewer, electric, gas, telephone and other
utilities necessary for the use and operation of the Mortgaged Property are
installed to the property lines of the Mortgaged Property through dedicated
public rights of way or through perpetual private easements approved by the
Majority Banks with respect to which the applicable Security Deed creates a
valid and enforceable first lien and, except in the case of drainage facilities,
are connected to the Building located thereon with valid permits and are
adequate to service the Building in compliance with applicable law.
0.1 Access, Etc. The streets abutting the Mortgaged Property are dedicated and
accepted public roads, to which the Mortgaged Property has direct access by
trucks and other motor vehicles and by foot, or are perpetual private ways (with
direct access by trucks and other motor vehicles and by foot to public roads) to
which the Mortgaged Property has direct access approved by the Majority Banks
and with respect to which the applicable Security Deed creates a valid and
enforceable first lien. All private ways providing access to the Mortgaged
Property are zoned in a manner which will permit access to the Building over
such ways by trucks and other commercial and industrial vehicles.
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(a) Independent Building. The Building is fully independent in all respects
including, without limitation, in respect of structural integrity, heating,
ventilating and air conditioning, plumbing, mechanical and other operating and
mechanical systems, and electrical, sanitation and water systems, all of which
are connected directly to off-site utilities located in public streets or ways
or through insured perpetual private easements approved by the Majority Banks.
The Building is located on a lot or lots which is or are separately assessed for
purposes of real estate tax assessment and payment. The Building, all Building
Service Equipment and all paved or landscaped areas related to or used in
connection with the Building are located wholly within the perimeter lines of
the lot or lots on which the Mortgaged Property is located, except as may be
specifically shown on the Survey for such Mortgaged Property.
(a) Condition of Building; No Asbestos. The Building is structurally sound, in
good repair and free of defects in materials and workmanship. All major building
systems located within the Building, including without limitation heating,
ventilating and air conditioning, electrical, sprinkler, plumbing or other
mechanical systems, are in good working order and condition. No asbestos is
located in or on the Building, except for nonfriable asbestos or contained
friable asbestos which is being monitored and/or remediated in accordance with
the recommendations of an Environmental Engineer.
(a) Building Compliance with Law. The Building as presently constructed, used,
occupied and operated does not violate any applicable federal or state law or
governmental regulation, or any local ordinance, order or regulation, including
but not limited to laws, regulations, or ordinances relating to zoning, building
use and occupancy, subdivision control, fire protection, health, sanitation,
safety, handicapped access, historic preservation and protection, tidelands,
wetlands, flood control and Environmental Laws. The Building complies with
applicable zoning laws and regulations and is not a so-called non-conforming
use. The zoning laws permit use of the Building for its current use. There is
such number of parking spaces on the lot or lots on which the Mortgaged Property
is located as is adequate under the zoning laws and regulations to permit use of
the Building for its current use except as previously disclosed to the Agent in
writing. Each Mortgaged Property constitutes a separate parcel which has been
properly subdivided in accordance with all applicable state and local laws,
regulations and ordinances to the extent required thereby, and neither the
execution and delivery of the Security Deeds nor the exercise of any remedies
thereunder by Agent shall violate any such law or regulation relating to the
subdivision of real property.
(a) No Required Mortgaged Property Consents, Permits, Etc. The Borrower has not
received any notice of, and has no knowledge of, any approvals, consents,
licenses, permits, utility installations and connections (including, without
limitation, drainage facilities), curb cuts and street openings, required by
applicable laws, rules, ordinances or regulations or any agreement affecting the
Mortgaged Property for the maintenance, operation, servicing and use of the
Mortgaged Property or the Building for its current use which have not been
granted, effected, or performed and completed (as the case may be), or any fees
or charges therefor which have not been fully paid, or which are no longer in
full force and effect. No such approvals, consents, permits or licenses
(including, without limitation, any railway siding agreements) will terminate,
or become void or voidable or terminable on any foreclosure sale of the
Mortgaged Property pursuant to the Security Deed. To the best knowledge of the
Borrower, there are no outstanding notices, suits, orders, decrees or judgments
relating to zoning, building use and occupancy, fire, health,
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sanitation or other violations affecting, against, or with respect to, the
Mortgaged Property or any part thereof.
(a) Insurance. The Borrower has not received any notice from any insurer or its
agent requiring performance of any work with respect to the Mortgaged Property
or canceling or threatening to cancel any policy of insurance, and the Mortgaged
Property complies with the requirements of all of the Borrower's insurance
carriers.
(a) Real Property Taxes; Special Assessments. There are no unpaid or outstanding
real estate or other taxes or assessments on or against the Mortgaged Property
or any part thereof which are payable by the Borrower (except only real estate
or other taxes or assessments, that are not yet due and payable). The Borrower
has delivered to the Agent true and correct copies of real estate tax bills for
the Mortgaged Property for the past one fiscal tax year and, if available, for
the past three fiscal years. No abatement proceedings are pending with reference
to any real estate taxes assessed against the Mortgaged Property, other than
with respect to taxes which have been paid under protest and which are being
contested in good faith. There are no betterment assessments or other special
assessments presently pending with respect to any portion of the Mortgaged
Property, and the Borrower has not received any notice of any such special
assessment being contemplated.
(a) Historic Status. The Building is not a historic structure or landmark and
neither the Building nor the Mortgaged Property is located within any historic
district pursuant to any federal, state or local law or governmental regulation.
(a) Eminent Domain; Casualty. There are no pending eminent domain proceedings
against the Mortgaged Property or any part thereof, and, to the knowledge of the
Borrower, no such proceedings are presently threatened or contemplated by any
taking authority. Neither the Mortgaged Property, the Building nor any part
thereof is now damaged or injured as a result of any fire, explosion, accident,
flood or other casualty.
(a) Leases. An accurate and complete Rent Roll and summary thereof in a form
reasonably satisfactory to the Majority Banks as of the date of inclusion of the
Mortgaged Property in the Collateral (or such other recent date as may be
acceptable to the Agent) with respect to all Leases of any portion of the
Mortgaged Property has been provided to the Agent. The Leases reflected on such
Rent Roll constitute as of the date thereof the sole agreements and
understandings relating to leasing or licensing of space at the Mortgaged
Property and in the Building relating thereto. Each of the Leases was entered
into as the result of arms length negotiation and has not been modified,
changed, altered, assigned, supplemented or amended in any respect, except as
reflected on the Rent Roll, and no tenant is entitled to any free rent, partial
rent, rebate of rent payments, credit, offset or deduction in rent, including,
without limitation, lease support payments or lease buy outs, except as
reflected in the Rent Roll. There are no occupancies, rights, privileges or
licenses in or to the Mortgaged Property or portion thereof other than pursuant
to the Leases reflected in Rent Rolls previously furnished to the Agent for the
Mortgaged Property. Except as set forth in each Rent Roll, the Leases reflected
therein are in full force and effect in accordance with their respective terms,
without any payment default or any other material default thereunder, nor are
there any defenses, counterclaims, offsets, concessions or rebates available to
any tenant thereunder, and the Borrower has not given or made, any notice of any
payment or other material default, or any claim, which remains uncured or
unsatisfied, with respect to any of the
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Leases. The Rent Rolls furnished to the Banks accurately and completely set
forth all rents payable by and security, if any, deposited by tenants, no tenant
having paid more than one month's rent in advance. All tenant improvements or
work to be done for tenants on the Rent Roll, furnished or paid for by the
Borrower, or credited or allowed to a tenant, for, or in connection with, the
Building pursuant to any Lease has been completed and paid for or provided for
in a manner satisfactory to the Agent. No material leasing, brokerage or like
commissions, fees or payments are due from the Borrower in respect of the
Leases.
(a) Service Agreements; Management Agreements. Except as listed on Schedule
6.22, there are no material Service Agreements relating to the operation and
maintenance of the Building, the Mortgaged Property, or any portion thereof that
are not cancellable at any time. The Borrower has no Management Agreements for
the Mortgaged Properties. To the best knowledge of the Borrower, there are no
material claims or any bases for material claims in respect of the Mortgaged
Property or its operation by any party to any Service Agreement or Management
Agreement.
(a) Other Material Real Property Agreements; No Options. There are no material
agreements pertaining to the Mortgaged Property, any Building thereon or the
operation or maintenance of either thereof other than as described in this
Agreement (including the Schedules hereto) or otherwise disclosed in writing to
the Agent and the Banks by the Borrower; and no person or entity has any right
or option to acquire the Mortgaged Property on any Building thereon or any
portion thereof or interest therein.
0.1 Brokers. Neither the Borrower nor any of its Subsidiaries has engaged or
otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder.
0.1 Other Debt. Neither the Borrower nor any of its Subsidiaries is in default
of the payment of any Indebtedness or any other agreement, mortgage, deed of
trust, security agreement, financing agreement, indenture or lease to which any
of them is a party. The Borrower is not a party to or bound by any agreement,
instrument or indenture that may require the subordination in right or time or
payment of any of the Obligations to any other indebtedness or obligation of the
Borrower. The Borrower has provided to the Agent a schedule, and upon the
request of the Agent will provide copies, of all agreements, mortgages, deeds of
trust, financing agreements or other material agreements binding upon the
Borrower or its properties and entered into by the Borrower as of the date of
this Agreement with respect to any Indebtedness of the Borrower.
0.1 Solvency. As of the Closing Date and after giving effect to the transactions
contemplated by this Agreement and the other Loan Documents, including all Loans
made or to be made hereunder, the Borrower is not insolvent on a balance sheet
basis such that the sum of the Borrower's assets exceeds the sum of the
Borrower's liabilities, the Borrower is able to pay its debts as they become
due, and the Borrower has sufficient capital to carry on its business.
1. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
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0.1 Punctual Payment. The Borrower will duly and punctually pay or cause to be
paid the principal and interest on their respective Loans and all interest and
fees provided for in this Agreement, all in accordance with the terms of this
Agreement and the Notes as well as all other sums owing pursuant to the Loan
Documents.
0.1 Maintenance of Office. The Borrower will maintain its chief executive office
at 2311 West 22nd Street, Suite 109, Oak Brook, Illinois 60521, or at such other
place in the United States of America as the Borrower shall designate upon prior
written notice to the Agent and the Banks, where notices, presentations and
demands to or upon the Borrower in respect of the Loan Documents may be given or
made.
0.1 Records and Accounts. The Borrower will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation and amortization of its
properties and the properties of its Subsidiaries, contingencies and other
reserves.
0.1 Financial Statements, Certificates and Information. The Borrower will
deliver or cause to be delivered to each of the Banks:
(a) as soon as practicable, but in any event not later than ninety (90) days
after the end of each fiscal year of the Borrower, the audited consolidated
balance sheet of the Borrower and its Subsidiaries at the end of such year, and
the related audited consolidated statements of income, changes in shareholder's
equity and cash flows for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with generally accepted accounting principles,
and accompanied by an auditor's report prepared without qualification by Ernst &
Young or by another "Big Six" accounting firm, the Form 10-K filed with the SEC
(unless the SEC has approved an extension, in which event the Borrower will
deliver to the Agent and each of the Banks a copy of the Form 10-K
simultaneously with delivery to the SEC), and any other information the Banks
may need to complete a financial analysis of the Borrower and its Subsidiaries;
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each of the first three fiscal quarters of the Borrower, copies
of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such quarter, and the related unaudited consolidated statements
of income, changes in shareholder's equity and cash flows for the portion of the
Borrower's fiscal year then elapsed, and a statement showing the aging of the
receivables and payables for the Mortgaged Properties, all in reasonable detail
and prepared in accordance with generally accepted accounting principles (which
may be provided by inclusion in the Form 10-Q of the Borrower for such period
provided pursuant to subsection (c) below), together with a certification by the
principal financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each of the first three fiscal quarters of the Borrower in each
year, copies of Form 10-Q filed with the SEC (unless the SEC has approved an
extension in which event the Borrower will deliver such copies of
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the Form 10-Q to the Agent and each of the Banks simultaneously with delivery
to the SEC), if required;
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), copies of a consolidated statement of Operating
Cash Flow for such fiscal quarter for the Borrower and its Subsidiaries and a
statement of Operating Cash Flow for such fiscal quarter for the Borrower and
each of the Mortgaged Properties, prepared on a basis consistent with the
statement furnished pursuant to paragraph 6.4(c) together with a certification
by the chief financial or chief accounting officer of the Borrower, that the
information contained in such statement fairly presents the Operating Cash Flow
of the Borrower and its Subsidiaries and the Mortgaged Properties for such
period;
(a) simultaneously with the delivery of the financial statements referred to in
subsections (a) and (b) above, a statement (a "Compliance Certificate")
certified by the principal financial or accounting officer of the Borrower in
the form of Exhibit C hereto (or in such other form as the Agent may approve
from time to time) setting forth in reasonable detail computations evidencing
compliance with the covenants contained in paragraph 9 and the other covenants
described therein, and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet Date;
(a) contemporaneously with the filing or mailing thereof, copies of all material
of a financial nature filed with the SEC or sent to the stockholders of the
Borrower;
(a) as soon as practicable but in any event not later than thirty (30) days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), updated Rent Rolls with respect to the Mortgaged
Properties and a summary of each Rent Roll in form reasonably satisfactory to
the Majority Banks;
(a) not later than thirty (30) days following each acquisition of an interest in
Real Estate by the Borrower or any of its Subsidiaries (which for the purposes
of this paragraph 7.4(h) shall include the Investments described in paragraph
8.3(i)), each of the following (provided that with respect to the Investments
described in paragraph 8.3(i), the following items shall be provided to the
extent reasonably available to the Borrower or its Subsidiaries): (i) the
closing statement relating to such acquisition, (ii) a description of the
property acquired, (iii) a certificate from the chief financial or accounting
officer of the Borrower stating that (A) an environmental site assessment has
been prepared by an Environmental Engineer and such assessment contains no
material qualifications with respect to such Real Estate and (B) a statement of
condition of such Real Estate has been prepared by a construction engineer and
such statement contains no material qualifications, (iv) an historical operating
statement of such Real Estate for such period as may be available to the
Borrower and a current rent roll for such Real Estate, and (v) a Compliance
Certificate prepared using the financial statements of the Borrower most
recently provided or required to be provided to the Banks under paragraph 6.4 or
this paragraph 7.4 adjusted in the best good faith estimate of the Borrower to
give effect to such acquisition and demonstrating that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such acquisition;
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(a) promptly after they are filed with the Internal Revenue Service, copies of
all annual federal income tax returns and amendments thereto of the Borrower;
(a) promptly upon completion, copies of such market studies relating to the
Mortgaged Property and the other Eligible Real Estate as are from time to time
prepared by or on behalf of the Borrower or its Subsidiaries;
(a) not later than thirty (30) days following each acquisition of an interest in
a Subsidiary, each of the following: (i) the name and structure of the
Subsidiary, (ii) a description of the property owned by such Subsidiary, and
(iii) such other information as the Agent may reasonably request;
(a) simultaneously within the delivery of the financial statement referred to in
subsection (a) above, a statement (i) listing the Real Estate owned by the
Borrower and its Subsidiaries (or in which the Borrower or its Subsidiaries owns
an interest) and stating the location thereof, the date acquired and the
acquisition cost, (ii) listing the Indebtedness of the Borrower and its
Subsidiaries (excluding Indebtedness of the type described in paragraph 8.1(b)
(e), which statement shall include, without limitation, a statement of the
original principal amount of such Indebtedness and the current amount
outstanding, the holder thereof, the maturity date and any extension options,
the interest rate, the collateral provided for such Indebtedness and whether
such Indebtedness is recourse or non recourse, and (iii) listing the properties
of the Borrower and its Subsidiaries which are under "development" (as used in
paragraph 8.9) and providing a brief summary of the status of such development;
(a) not later than sixty (60) days prior to the end of each fiscal year of the
Borrower a budget and business plan for the next fiscal year; and
(a) from time to time such other financial data and information in the
possession of the Borrower or its Subsidiaries (including without limitation
auditors' management letters, property inspection and environmental reports and
information as to zoning and other legal and regulatory changes affecting the
Borrower) as the Agent may reasonably request.
0.1 Notices.
(a) Defaults. The Borrower will promptly notify the Agent in writing of the
occurrence of any Default or Event of Default. If any Person shall give any
notice or take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Agreement or under any note,
evidence of indebtedness, indenture or other obligation to which or with respect
to which the Borrower or any of its Subsidiaries is a party or obligor, whether
as principal or surety, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on the Borrower, the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Banks, describing the notice or action and the nature of the claimed
default.
(a) Environmental Events. The Borrower will promptly give notice to the Agent
(i) upon the Borrower obtaining knowledge of any potential or known Release, of
any Hazardous Substances at or from the Mortgaged Property; (ii) of any
violation of any Environmental Law that the Borrower or any of its Subsidiaries
reports in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal, state or
local environmental agency and (iii) upon becoming aware
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thereof, of any inquiry, proceeding, investigation, or other action, including a
notice from any agency of potential environmental liability, of any federal,
state or local environmental agency or board, that in either case involves the
Mortgaged Property or has the potential to materially affect the assets,
liabilities, financial conditions or operations of the Borrower or any
Subsidiary or the Agent's liens on the Collateral pursuant to the Security
Documents.
(a) Notification of Claims Against Collateral. The Borrower will, immediately
upon becoming aware thereof, notify the Agent in writing of any setoff, claims
(including, with respect to any Mortgaged Property, environmental claims),
withholdings or other defenses to which any of the Collateral, or the rights of
the Agent or the Banks with respect to the Collateral, are subject.
(a) Notice of Litigation and Judgments. The Borrower will give notice to the
Agent in writing within 15 days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrower or any of its Subsidiaries or to which the Borrower or
any of its Subsidiaries is or is to become a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Borrower and stating the
nature and status of such litigation or proceedings. The Borrower will give
notice to the Agent, in writing, in form and detail satisfactory to the Agent
and each of the Banks, within ten days of any judgment not covered by insurance,
whether final or otherwise, against the Borrower or any of its Subsidiaries in
an amount in excess of $100,000.
(a) Notice of Proposed Sales, Encumbrances, Refinance or Transfer of
Non-Mortgaged Property. The Borrower will give notice to the Agent of any
proposed or completed sale, encumbrance, refinance or transfer of any Real
Estate other than Mortgaged Property or other Investment described in paragraph
8.3(i) of the Borrower or its Subsidiaries within any fiscal quarter of the
Borrower, such notice to be submitted together with the Compliance Certificate
provided or required to be provided to the Banks under paragraph 7.4 with
respect to such fiscal quarter. The Compliance Certificate shall with respect to
any proposed or completed sale, encumbrance, refinance or transfer be adjusted
in the best good-faith estimate of the Borrower to give effect to such sale,
encumbrance, refinance or transfer and demonstrate that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such sale, encumbrance, refinance or transfer. Notwithstanding
the foregoing, in the event of any sale, encumbrance, refinance or transfer of
any Real Estate other than the Mortgaged Property or other Investment described
in paragraph 8.3(i) of the Borrower or its Subsidiaries, the Borrower shall
promptly give notice to the Agent of such transaction, which notice shall be
accompanied by a Compliance Certificate prepared using the financial statements
of the Borrower most recently provided or required to be provided to the Banks
under paragraph 6.4 or paragraph 7.4 adjusted as provided in the preceding
sentence.
(a) Notice of Proposed Renovations. The Borrower will promptly give notice to
the Agent of any proposed renovations (not including any tenant improvements) to
any Real Estate the projected cost of which will exceed $250,000.00.
(a) Debt and Equity Offerings. The Borrower shall provide the Agent with five
(5) Business Days' prior written notice of any Debt Offering or Equity Offering.
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(a) Notification of Banks. Promptly after receiving any notice under this
paragraph 7.5, the Agent will forward a copy thereof to each of the Banks,
together with copies of any certificates or other written information that
accompanied such notice.
0.1 Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its existence as a Maryland corporation. The
Borrower will cause each of its Subsidiaries to do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence. The Borrower will do or cause to be done all things necessary to
preserve and keep in full force all of its rights and franchises and those of
its Subsidiaries. The Borrower will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by it and in
related businesses.
(a) The Borrower (i) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order (ordinary wear and tear excepted) and supplied with all necessary
equipment, and (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof in all cases in which the
failure so to do would have a material adverse effect on the condition of the
applicable Mortgaged Property or on the financial condition, assets or
operations of the Borrower and its Subsidiaries.
0.1 Insurance. (a) The Borrower will, at its expense, procure and maintain for
the benefit of the Borrower and the Agent, insurance policies issued by such
insurance companies, in such amounts, in such form and substance, and with such
coverages, endorsements, deductibles and expiration dates as are acceptable to
the Majority Banks, providing the following types of insurance covering the
Mortgaged Property:
(i) "Named Peril" property insurance (including comprehensive boiler and
machinery coverages) on each Building and the contents therein of the Borrower
and its Subsidiaries in an amount not less than one hundred percent (100%) of
the full replacement cost of each Building and the contents therein of the
Borrower and its Subsidiaries or such other limit as the Agent may approve, with
deductibles not to exceed $10,000 for any one occurrence, with a replacement
cost coverage endorsement, and, if requested by the Majority Banks, a contingent
liability from operation of building laws endorsement in such amounts as the
Majority Banks may require. Full replacement cost as used herein means the cost
of replacing the Building (exclusive of the cost of excavations, foundations and
footings below the lowest basement floor) and the contents therein of the
Borrower and its Subsidiaries without deduction for physical depreciation
thereof;
(ii) During the course of construction or repair of any Building, the insurance
required by clause (i) above shall be written on riders to the Borrower's
existing policies or on a builders risk, completed value, non-reporting form,
meeting all of the terms required by clause (i) above, covering the total value
of work performed, materials, equipment, machinery and supplies furnished,
existing structures, and temporary structures being erected on or near the Real
Estate, including coverage against collapse and damage during transit or while
being stored off-site, and containing a soft costs (including loss of rents)
coverage endorsement and a permission to occupy endorsement;
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(iii) Flood insurance if at any time any Building is located in any federally
designated "special hazard area" (including any area having special flood,
mudslide and/or flood-related erosion hazards, and shown on a Flood Hazard
Boundary Map or a Flood Insurance Rate Map published by the Federal Emergency
Management Agency as Zone A, AO, Al-30, AE, A99, AH, VO, Vl-30, VE, V, M or E)
and the broad form flood coverage required by clause (i) above is not available,
in an amount equal to the full replacement cost or the maximum amount then
available under the National Flood Insurance Program;
(iv) Rent loss insurance in an amount sufficient to recover at least the total
estimated gross receipts from all sources of income, including without
limitation, rental income, for the Real Estate for a twelve month period;
(v) Commercial general liability insurance against claims for personal injury
(to include, without limitation, bodily injury and personal and advertising
injury) and property damage liability, all on an occurrence basis, if
commercially available, with such coverages as the Majority Banks may reasonably
request (including, without limitation, contractual liability coverage,
completed operations coverage for a period of two years following completion of
construction of any improvements on the Real Estate, and coverages equivalent to
an ISO broad form endorsement), with a general aggregate limit of not less than
$l,000,000, a completed operations aggregate limit of not less than $1,000,000,
and a combined single "per occurrence" limit of not less than $1,000,000 for
bodily injury, property damage and medical payments;
(vi) During the course of construction or repair of any improvements on the Real
Estate, owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the insurance required by clause
(v) above;
(vii) Employers liability insurance with respect to the Borrower's employees;
(viii) Umbrella liability insurance with limits of not less than $10,000,000 to
be in excess of the limits of the insurance required by clauses (v), (vi) and
(vii) above, with coverage at least as broad as the primary coverages of the
insurance required by clauses (v), (vi) and (vii) above, with any excess
liability insurance to be at least as broad as the coverages of the lead
umbrella policy. All such policies shall be endorsed to provide defense coverage
obligations;
(ix) Workers' compensation insurance for all employees of the Borrower or its
Subsidiaries engaged on or with respect to the Real Estate; and
(x) Such other insurance in such form and in such amounts as may from time to
time be reasonably required by the Majority Banks against other insurable
hazards and casualties which at the time are commonly insured against in the
case of properties of similar character and location to the Real Estate.
The Borrower shall pay all premiums on insurance policies. The insurance
policies with respect to all Mortgaged Property provided for in clauses (v),
(vi) and (viii) above with respect to all Mortgaged Property shall name the
Agent and each Bank as an additional insured and shall contain a cross
liability/ severability endorsement. The insurance policies provided for in
clauses (i), (ii), (iii) and (iv) above shall name the Agent as mortgagee and
loss payee, shall be first payable in case of loss to the Agent, and shall
contain mortgage clauses and lender's loss payable endorsements in form and
substance acceptable to the Majority Banks. The Borrower shall deliver
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duplicate originals or certified copies of all such policies to the Majority
Banks, and the Borrower shall promptly furnish to the Majority Banks all renewal
notices and evidence that all premiums or portions thereof then due and payable
have been paid. At least 30 days prior to the expiration date of the policies,
the Borrower shall deliver to the Banks evidence of continued coverage,
including a certificate of insurance, as may be satisfactory to the Majority
Banks.
(a) All policies of insurance required by this Agreement shall contain clauses
or endorsements to the effect that (i) no act or omission of the Borrower or any
Subsidiary or anyone acting for the Borrower or any Subsidiary (including,
without limitation, any representations made in the procurement of such
insurance), which might otherwise result in a forfeiture of such insurance or
any part thereof, no occupancy or use of the Real Estate for purposes more
hazardous then permitted by the terms of the policy, and no foreclosure or any
other change in title to the Real Estate or any part thereof, shall affect the
validity or enforceability of such insurance insofar as the Agent is concerned,
(ii) the insurer waives any right of setoff, counterclaim, subrogation, or any
deduction in respect of any liability of the Borrower or any Subsidiary and the
Agent, (iii) such insurance is primary and without right of contribution from
any other insurance which may be available, (iv) such policies shall not be
modified, canceled or terminated prior to the scheduled expiration date thereof
without the insurer thereunder giving at least 30 days prior written notice to
the Agent by certified or registered mail, and (v) that the Agent or the Banks
shall not be liable for any premiums thereon or subject to any assessments
thereunder, and shall in all events be in amounts sufficient to avoid any
coinsurance liability.
(a) The insurance required by this Agreement may be effected through a blanket
policy or policies covering additional locations and property of the Borrower
and other Persons not included in the Mortgage Property, provided that such
blanket policy or policies comply with all of the terms and provisions of this
paragraph 7.7 and contain endorsements or clauses assuring that any claim
recovery will not be less than that which a separate policy would provide,
including, without limitation, a priority claim provision with respect to
property insurance and an aggregate limits of insurance endorsement in the case
of liability insurance.
(a) All policies of insurance required by this Agreement shall be issued by
companies licensed to do business in the State where the policy is issued and
also in the states where the Real Estate is located and having a rating in
Best's Key Rating Guide of at least "A" and a financial size category of at
least "VIII".
(a) Neither the Borrower nor any Subsidiary shall carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Agreement unless such insurance complies with the
terms and provisions of this paragraph 7.7.
(a) In the event of any Loss or damage to the Mortgaged Property in excess of
$10,000, the Borrower shall give immediate written notice to the insurance
carrier and the Agent, and the Agent shall furnish a copy of such notice
promptly to each of the Banks. The Borrower may make proof of loss and adjust
and compromise any claim under insurance policies which is of an amount not more
than $250,000.00 so long as no Event of Default has occurred and is continuing
and so long as the Borrower shall in good faith diligently pursue such claim.
The Borrower hereby irrevocably authorizes and empowers the Agent, at the
Agent's option in the Agent's sole discretion or at the request
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of the Majority Banks in their sole discretion, as attorney in fact for the
Borrower, to make proof of any loss except as provided in the preceding
sentence, to adjust and compromise any claim under insurance policies, to appear
in and prosecute any action arising from such insurance policies, to collect and
receive insurance proceeds, and to deduct therefrom the Agent's expenses
incurred in the collection of such proceeds. If the Mortgaged Property is
acquired by the Agent or any nominee through foreclosure, deed in lieu of
foreclosure or otherwise is acquired from the Borrower, all right, title and
interest of the Borrower in and to any insurance policies and unearned premiums
thereon and in and to the proceeds thereof resulting from loss or damage to the
Mortgaged Property prior to such sale or acquisition shall pass to the Agent or
any other successor in interest to the Borrower or purchaser or grantee of the
Mortgaged Property.
(a) Subject to the terms of the following sentence, the Borrower authorizes the
Agent, at the Agent's option or at the request of the Majority Bank's in their
sole discretion, to (i) apply the balance of such proceeds to the payment of the
Obligations of the Borrower whether or not then due, or (ii) if the Agent or the
Majority Bank shall require the reconstruction or repair of the Mortgaged
Property, to hold the balance of such proceeds to be used to pay all taxes,
charges, sewer use fees, water rates and assessments which may be imposed upon
the Mortgaged Property and the Obligations of the Borrower as they become due
during the course of reconstruction or repair of the Mortgaged Property and to
reimburse the Borrower, in accordance with such terms and conditions as Agent
may prescribe, for the cost of such reconstruction or repair of the Mortgaged
Property, and on completion of such reconstruction or repair to apply any of the
excess to the payment of the Obligations of the Borrower. Notwithstanding the
foregoing, the Agent shall make such net proceeds available to the Borrower to
reconstruct and repair the Mortgaged Property, in accordance with such terms and
conditions as the Agent may prescribe for the disbursement of such proceeds to
assure completion of such reconstruction or repair provided that (x) no Default
or Event of Default shall have occurred and be continuing, (y) the Borrower
shall have provided to Agent additional cash security in an amount equal to the
amount reasonably estimated by the Agent to be the amount in excess of such
proceeds which will be required to complete such repair or restoration, and (z)
the Agent shall determine that such repair or reconstruction can be completed
prior to the Maturity Date.
(a) The Borrower will, at its expense, procure and maintain insurance covering
the Borrower and the Real Estate other than the Mortgaged Property in such
amounts and against such risks and casualties as are customary for properties of
similar character and location, due regard being given to the type of
improvements thereon, their construction, location, use and occupancy.
(a) The Borrower shall provide to the Agent for the benefit of the Banks Title
Policies for all of the Mortgaged Properties of the Borrower which shall at all
times be in an aggregate amount of not less than the total Commitments for the
Borrower at the time in effect. Each Title Policy shall also contain, to the
extent available, a tie-in endorsement aggregating the insurance coverage
provided under all of the policies relating to the Borrower with tie-in
endorsements.
0.1 Taxes. The Borrower and each Subsidiary will duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges imposed upon it and upon the
Mortgaged Property and the other Real Estate, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims
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for labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided, further, that forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor,
the Borrower and each Subsidiary of the Borrower either (i) will provide a bond
issued by a surety reasonably acceptable to the Majority Banks and sufficient to
stay all such proceedings or (ii) if no such bond is provided, will pay each
such tax, assessment, charge, levy or claim.
0.1 Inspection of Properties and Books. The Borrower shall permit the Banks,
through the Agent or any representative designated by the Agent, at the
Borrower's expense to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its officers, all at such reasonable times
and intervals as the Agent or any Bank may reasonably request. The Banks shall
use good faith efforts to coordinate such visits and inspections so as to
minimize the interference with and disruption to the Borrower's normal business
operations.
0.1 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower will
comply with, and will cause each of its Subsidiaries to comply in all respects
with (i) all material provisions of all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its corporate charter, partnership
agreement or declaration of trust, as the case may be, and other charter
documents and bylaws, (iii) all material agreements and instruments to which it
is a party or by which it or any of its properties may be bound, (iv) all
applicable decrees, orders, and judgments, and (v) all licenses and permits
required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties. If at any time while any Loan
or Note is outstanding or the Banks have any obligation to make Loans hereunder,
any authorization, consent, approval, permit or license from any officer, agency
or instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
0.1 Use of Proceeds. The Borrower will use the proceeds of the Loans to the
Borrower solely to provide short-term financing (a) for the acquisition of fee
interests by the Borrower in Real Estate which is utilized principally for
office, office/service or light industry, (b) for Capital Improvement Projects,
(c) for working capital purposes, and (d) for such other purposes as the
Majority Banks in their discretion from time to time may agree to in writing.
0.1 Further Assurances. The Borrower will cooperate with, and will cause each of
its Subsidiaries to cooperate with the Agent and the Banks and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Loan Documents.
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0.1 Compliance. The Borrower shall operate its business in compliance with the
terms and conditions of this Agreement and the other Loan Documents. The
Borrower shall at all times comply with all requirements of applicable laws
necessary to maintain REIT Status and shall operate its business in compliance
with the terms and conditions of this Agreement and the other Loan Documents.
0.1 Interest Rate Contracts. If at the end of any fiscal quarter of the
Borrower, (i) the combined Operating Cash Flow with respect to the Mortgaged
Properties for the period covered by the four previous fiscal quarters (treated
as a single accounting period) is less than 1.6 times the Pro Forma Debt Service
Charges for such period as determined pursuant to paragraph 9.5 or (ii) the
Distributions paid by the Borrower for the period covered by the four previous
fiscal quarters exceeds eighty eight percent (88%) of its Funds from Operations
for such four fiscal quarters, then the Borrower shall obtain and maintain in
effect Interest Rate Contracts which are satisfactory to the Agent on all
variable rate Indebtedness that exceeds twenty percent (20%) of the Borrower's
Consolidated Total Adjusted Asset Value.
1. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any of the Banks has any obligation to make any Loans:
0.1 Restrictions on Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan Documents;
(a) current liabilities of the Borrower or its Subsidiaries incurred in the
ordinary course of business but not incurred through (i) the borrowing of money,
or (ii) the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
(a) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of paragraph 7.8;
(a) Indebtedness in respect of judgments or awards that have been in force for
less than the applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which the Borrower shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or review;
(a) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of
business;
(a) subject to the provisions of paragraph 9, Non recourse Indebtedness of the
Borrower or any of its Subsidiaries, provided that neither the Borrower nor any
of its Subsidiaries shall incur any Non-recourse Indebtedness unless the
Borrower shall have provided to the Banks a statement that no Default or Event
of Default exists and a Compliance Certificate demonstrating that the Borrower
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will be in compliance with the covenants referred to therein after giving
effect to such incurrence;
(a) Indebtedness in respect of reverse repurchase agreements having a term of
not more than 180 days with respect to Investments described in paragraph 8.3(d)
or (e);
(a) Indebtedness existing on the date of this Agreement and listed and
described on Schedule 8.1 hereto; and
(a) subject to the provisions of paragraph 9, other recourse Indebtedness of the
Borrower and its Subsidiaries not secured by the Mortgaged Property in an
aggregate outstanding principal amount (excluding the Obligations) not exceeding
$5,000,000; provided that neither the Borrower nor any of its Subsidiaries shall
incur any recourse Indebtedness described in this paragraph 8.1(i) unless the
Borrower shall have provided to the Banks a statement that no Default or Event
of Default exists and a Compliance Certificate demonstrating that the Borrower
will be in compliance with the covenants referred to therein after giving effect
to such incurrence.
0.1 Restrictions on Liens, Etc. The Borrower will not, and will not permit any
of its Subsidiaries to, (a) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of its property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
30 days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse; or
(f) incur or maintain any obligation to any holder of Indebtedness of the
Borrower or such Subsidiary which prohibits the creation or maintenance of any
lien securing the Obligations; provided that the Borrower and any Subsidiary of
the Borrower may create or incur or suffer to be created or incurred or to
exist:
(i) liens in favor or the Borrower on all or part of the assets of Subsidiaries
of such Person (other than Collateral) securing Indebtedness owing by
Subsidiaries of such Person to such Person;
(ii) liens on properties to secure taxes, assessments and other governmental
charges or claims for labor, material or supplies in respect of obligations not
overdue;
(iii) deposits or pledges made in connection with, or to secure payment of,
workers' compensation, unemployment insurance, old age pensions or other social
security obligations;
(iv) liens on properties other than the Mortgaged Property or any interest
therein (including the rents, issues and profits therefrom) in respect of
judgments, awards or indebtedness, the Indebtedness with respect to which is
permitted by paragraph 8.1(d), paragraph 8.1(f) or paragraph 8.1(i);
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(v) encumbrances on properties other than the Mortgaged Property consisting of
easements, rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which the Borrower or a Subsidiary of such Person
is a party, and other minor liens or encumbrances none of which interferes
materially with the use of the property affected in the ordinary conduct of the
business of the Borrower or its Subsidiaries, which defects do not individually
or in the aggregate have a materially adverse effect on the business of the
Borrower individually or of such Person and its Subsidiaries on a consolidated
basis;
(vi) liens on Real Estate other than the Mortgaged Property and Short-term
Investments securing Non-recourse Indebtedness permitted by paragraph 8.1(f);
(vii) liens in favor of the Agent and the Banks under the Loan Documents;
(viii) liens and encumbrances on a Mortgaged Property expressly permitted
under the terms of the Security Deed relating thereto; and
(ix) other presently outstanding liens listed on Schedule 8.2 on properties
other than the Mortgaged Property.
0.1 Restrictions on Investments. The Borrower will not, and will not permit any
of its Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by the Borrower or its
Subsidiary;
(a) marketable direct obligations of any of the following: Federal Home Loan
Mortgage Corporation, Student Loan Marketing Association, Federal Home Loan
Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;
(a) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $100,000,000;
provided, however, that the aggregate amount at any time so invested with any
single bank having total assets of less than $1,000,000,000 will not exceed
$200,000;
(a) securities commonly known as "commercial paper" issued by a corporation
organized and existing under the laws of the United States of America or any
State which at the time of purchase are rated by Moody's Investors Service, Inc.
or by Standard & Poor's Corporation at not less than "P 1" if then rated by
Moody's Investors Service, Inc., and not less than "A 1", if then rated by
Standard & Poor's Corporation;
(a) mortgage-backed securities guaranteed by the Government National Mortgage
Association, the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation and other mortgage-backed bonds which at the time of
purchase are rated by Moody's Investors Service, Inc. or by Standard & Poor's
Corporation at not less than "Aa" if then rated by Moody's Investors Service,
Inc. and not less than "AA" if then rated by Standard & Poor's Corporation;
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(a) repurchase agreements having a term not greater than 90 days and fully
secured by securities described in the foregoing subsection (a), (b) or (e) with
banks described in the foregoing subsection (c) or with financial institutions
or other corporations having total assets in excess of $500,000,000;
(a) shares of so-called "money market funds" registered with the SEC under the
Investment Company Act of 1940 which maintain a level per-share value, invest
principally in investments described in the foregoing subsections (a) through
(f) and have total assets in excess of $50,000,000;
(a) Investments in Subsidiaries of the Borrower, but only with the consent of
the Majority Banks; and
(a) Investments in real estate investment trusts which own real property which
is used principally for offices, offices/service or light industry located
within a 400 mile radius of Chicago, provided that in no event shall the
aggregate costs of all Investments pursuant to this paragraph 8.3(i) exceed the
amount set forth with respect thereto in the Borrower's annual budget and
business plan delivered to the Agent pursuant to paragraph 7.4(m).
0.1 Merger, Consolidation. The Borrower will not, and will not permit any of its
Subsidiaries to, become a party to any merger or consolidation except (i) the
merger or consolidation of one or more of the Subsidiaries of the Borrower with
and into the Borrower and (ii) the merger or consolidation of two or more
Subsidiaries of the Borrower.
0.1 Sale and Leaseback. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any arrangement, directly or indirectly, whereby the
Borrower or any Subsidiary of the Borrower shall sell or transfer any Real
Estate owned by it in order that then or thereafter the Borrower or any
Subsidiary shall lease back such Real Estate.
0.1 Compliance with Environmental Laws. The Borrower will not, and will not
permit any of its Subsidiaries, to do any of the following: (a) use any of the
Real Estate or any portion thereof as a facility for the handling, processing,
storage or disposal of Hazardous Substances, except for small quantities of
Hazardous Substances used in the ordinary course of business and in compliance
with all applicable Environmental Laws, (b) cause or permit to be located on any
of the Real Estate any underground tank or other underground storage receptacle
for Hazardous Substances except in full compliance with Environmental Laws, (c)
generate any Hazardous Substances on any of the Real Estate except in full
compliance with Environmental Laws, (d) conduct any activity at any Real Estate
or use any Real Estate in any manner so as to cause a Release of Hazardous
Substances on, upon or into the Real Estate or any surrounding properties or any
threatened Release of Hazardous Substances which might give rise to liability
under CERCLA or any other Environmental Law, or (e) directly or indirectly
transport or arrange for the transport of any Hazardous Substances (except in
compliance with all Environmental Laws).
The Borrower shall:
(i) in the event of any change in Environmental Laws governing the assessment,
release or removal of Hazardous Substances, which change would lead a prudent
lender to require additional testing to avail itself of any statutory insurance
or limited liability, take all action (including, without limitation, the
conducting of engineering tests at the sole expense of the
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Borrower) to confirm that no Hazardous Substances are or ever were Released or
disposed of on the Mortgaged Property; and
(ii) if any Release or disposal of Hazardous Substances shall occur or shall
have occurred on the Mortgaged Property (including without limitation any such
Release or disposal occurring prior to the acquisition of such Mortgaged
Property by the Borrower), cause the prompt containment and removal of such
Hazardous Substances and remediation of the Mortgaged Property in full
compliance with all applicable laws and regulations and to the satisfaction of
the Majority Banks; provided, that the Borrower shall be deemed to be in
compliance with Environmental Laws for the purpose of this clause (ii) so long
as it or a responsible third party with sufficient financial resources is taking
reasonable action to remediate or manage any event of noncompliance to the
satisfaction of the Majority Banks and no action shall have been commenced by
any enforcement agency. The Majority Banks may engage their own Environmental
Engineer to review the environmental assessments and the Borrower's compliance
with the covenants contained herein.
At any time after an Event of Default shall have occurred hereunder, or, whether
or not an Event of Default shall have occurred, at any time that the Agent or
the Majority Banks shall have reasonable grounds to believe that a Release or
threatened Release of Hazardous Substances may have occurred, relating to any
Mortgaged Property, or that any of the Mortgaged Properties is not in compliance
with the Environmental Laws, the Agent may at its election (and will at the
request of the Majority Banks) obtain such environmental assessments of such
Mortgaged Property prepared by an Environmental Engineer as may be necessary or
advisable for the purpose of evaluating or confirming (i) whether any Hazardous
Substances are present in the soil or water at or adjacent to such Mortgaged
Property and (ii) whether the use and operation of such Mortgaged Property
comply with all Environmental Laws. Environmental assessments may include
detailed visual inspections of such Mortgaged Property including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and the taking of soil samples, as well as such other
investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of such Mortgaged Property and the use and
operation thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower.
0.1 Distributions. The Borrower shall not make any Distributions which would
cause it to violate any of the following covenants:
(a) The Borrower shall not pay any Distribution to the shareholders of the
Borrower if such Distribution is in excess of the amount which, when added to
the amount of all other Distributions paid in the same fiscal quarter and the
preceding three (3) fiscal quarters would exceed ninety percent (90%) of its
Funds from Operations for the four consecutive fiscal quarters ending prior to
the quarter in which such Distribution is paid;
(a) In the event that an Event of Default specified in paragraph 12.1(a) or (b)
shall have occurred and be continuing, the Borrower shall make no Distributions
other than the minimum Distributions required under the Code to maintain the
REIT Status of the Borrower, as evidenced by a certification of the principal
financial or accounting officer of the Borrower containing calculations in
reasonable detail satisfactory in form and substance to Agent; and
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(a) Notwithstanding the foregoing, at any time when an Event of Default shall
have occurred and the maturity of the Obligations has been accelerated, the
Borrower shall not make any Distributions whatsoever, directly or indirectly.
0.1 Asset Sales. Neither the Borrower nor any Subsidiary thereof shall sell,
transfer or otherwise dispose of any Real Estate (except as the result of a
condemnation or casualty and except for the granting of Permitted Liens) unless
there shall have been delivered to the Banks a statement that no Default or
Event of Default exists and a Compliance Certificate demonstrating that the
Borrower will be in compliance with the covenants referred to therein after
giving effect to such sale, transfer or other disposition. Upon compliance with
this paragraph 8.8, the Agent, on behalf of the Banks, shall release such Real
Estate.
0.1 Development Activity. Except for the renovation of the Borrower's
headquarters building located at 823 Commerce, Oak Brook, Illinois, which is
currently under way, neither the Borrower nor any of its Subsidiaries shall
engage, directly or indirectly, in the development of properties to be used
principally for offices, offices/service or light industry or otherwise, without
the prior written consent of the Majority Banks. For purposes of this paragraph
8.9, the term "development" shall include the new construction of an office,
office/service or light industry complex or the substantial renovation of
improvements to real property the costs of which renovation exceeds ten percent
(10%) of the Appraised Value of such real property, but shall not include the
addition of amenities or other related facilities to existing Real Estate or
renovations thereto the cost of which do not exceed ten percent (10%) of the
Appraised Value of such Real Estate which is already used principally for
offices, offices/service or light industry. The Borrower acknowledges that the
decision of the Majority Banks to grant or withhold such consent shall be based
on such factors as the Majority Banks deem relevant in their sole discretion,
including without limitation, evidence of sufficient funds both from borrowings
and equity to complete such development and evidence that the Borrower or its
Subsidiary has the resources and expertise necessary to complete such project.
Nothing herein shall prohibit the Borrower or any of its Subsidiaries thereof
from entering into an agreement to acquire Real Estate which has been developed
and initially leased by another Person.
1. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans, the Borrower will
comply with the following:
0.1 Borrowing Base. The Borrower will not, at the end of any fiscal quarter,
permit the outstanding principal balance of the Loans as of the date of
determination to be greater than the Borrowing Base of the Borrower as
determined as of the same date.
0.1 Liabilities to Assets Ratio. The Borrower will not, at the end of any fiscal
quarter, permit the ratio of the Borrower's Consolidated Total Liabilities to
Consolidated Total Adjusted Asset Value to exceed 0.55 to 1.
0.1 Debt Service Coverage. The Borrower will not, at the end of any fiscal
quarter, permit the Borrower's Consolidated Operating Cash Flow for the period
covered by the four previous consecutive fiscal quarters (treated as a single
accounting period) to be less than 2.0 times the Debt Service of the Borrower
for such period.
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0.1 Tangible Net Worth. The Borrower will not, at the end of any fiscal quarter,
permit its Consolidated Tangible Net Worth to be less than $40,000,000.00 plus
seventy five percent (75%) of any Net Offering Proceeds received by the Borrower
after the Closing Date.
0.1 Mortgaged Property Operating Net Income. The Borrower will not, at the end
of any fiscal quarter, permit the combined Operating Cash Flow with respect to
the Mortgaged Properties for the period covered by the four previous consecutive
fiscal quarters (treated as a single accounting period) to be less than 1.5
times the Pro Forma Debt Service Charges for such period, provided that prior to
such time as the Borrower has owned and operated a Mortgaged Property for four
full fiscal quarters, the Operating Cash Flow with respect to such Mortgaged
Property for the number of full fiscal quarters which the Borrower has owned and
operated such Mortgaged Property as annualized shall be utilized for purposes of
determining compliance with this covenant.
1. CLOSING CONDITIONS.
The obligations of the Agent and the Banks to make the initial Loans shall be
subject to the satisfaction of the following conditions precedent on or prior to
March 29, 1996:
0.1 Loan Documents. Each of the Loan Documents shall have been duly executed and
delivered by the respective parties thereto, shall be in full force and effect
and shall be in form and substance satisfactory to the Majority Banks. The Agent
shall have received a fully executed copy of each such document, except that
each Bank shall have received a fully executed counterpart of its Note.
0.1 Certified Copies of Organizational Documents. The Agent shall have received
from the Borrower a copy, certified as of a recent date by the appropriate
officer of each State in which the Borrower is organized or in which the
Mortgaged Properties are located and a duly authorized officer of the Borrower
to be true and complete, of the corporate charter of the Borrower or its
qualification to do business, as applicable, as in effect on such date of
certification.
0.1 Bylaws; Resolutions. All action on the part of the Borrower necessary for
the valid execution, delivery and performance by such Person of this Agreement
and the other Loan Documents to which such Person is or is to become a party
shall have been duly and effectively taken, and evidence thereof satisfactory to
the Agent shall have been provided to the Agent. The Agent shall have received
from the Borrower true copies of its bylaws and the resolutions adopted by its
boards of directors authorizing the transactions described herein, each
certified by its secretary as of a recent date to be true and complete.
0.1 Incumbency Certificate; Authorized Signers. The Agent shall have received
from the Borrower an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Borrower and giving the name and
bearing a specimen signature of each individual who shall be authorized to sign,
in the name and on behalf of such Person, each of the Loan Documents to which
such Person is or is to become a party. The Agent shall have also received from
the Borrower a certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower and giving the name and specimen signature of
each individual who shall be authorized to make Loan and
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Conversion Requests and to give notices and to take other action on behalf of
the Borrower under the Loan Documents.
0.1 Opinion of Counsel. The Agent shall have received a favorable opinion
addressed to the Banks and the Agent and dated as of the Closing Date, in form
and substance satisfactory to the Banks and the Agent, from counsel of the
Borrower as to such matters as the Agent shall reasonably request.
0.1 Payment of Fees. The Borrower shall have paid to the Agent the commitment
and syndication fee and the Agent's fee pursuant to ss.4.2 and ss.4.3,
respectively.
0.1 Appraisals. The Agent shall have received Appraisals of the Mortgaged
Properties in form and substance satisfactory to the Agent.
0.1 Environmental Reports. The Agent shall have received environmental site
assessment reports for the Mortgaged Properties prepared by an Environmental
Engineer no more than six months prior to the Closing Date, which indicate the
condition of the Mortgaged Property and any Building thereon and which set forth
no qualifications except those that are acceptable to the Agent in its sole
discretion, and disclosing that each piece of Mortgaged Property and any
Building thereon is free of oil, underground storage tanks, asbestos or asbestos
containing material, lead paint and other Hazardous Substances (except to the
extent acceptable to the Agent in its sole discretion), and which reports are
otherwise in form and substance satisfactory to the Agent.
0.1 Insurance. The Agent shall have received duplicate originals or certified
copies of all policies of insurance required by this Agreement.
0.1 Performance; No Default. The Borrower shall have performed and complied with
all terms and conditions herein required to be performed or complied with by it
on or prior to the Closing Date, and on the Closing Date there shall exist no
Default or Event of Default.
0.1 Representations and Warranties. The representations and warranties made by
the Borrower in the Loan Documents or otherwise made by or on behalf of the
Borrower or any of its Subsidiaries in connection therewith or after the date
thereof shall have been true and correct in all material respects when made and
shall also be true and correct in all material respects on the Closing Date.
0.1 Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory to the Agent and the Agent's Special Counsel in form
and substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.
0.1 Eligible Real Estate Qualification Documents. The Eligible Real Estate
Qualification Documents for each parcel of Mortgaged Property included in the
Collateral as of the Closing Date shall have been delivered to the Agent at the
Borrower's expense.
0.1 Compliance Certificate. A Compliance Certificate dated as of the date of the
Closing Date demonstrating compliance with each of the covenants calculated
therein as of the most recent fiscal quarter end for which the Borrower has
provided financial statements under paragraph 6.4 adjusted in the
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best good faith estimate of the Borrower dated as of the date of the Closing
Date shall have been delivered to the Agent.
0.1 Stockholder Consents. The Agent shall have received evidence satisfactory to
the Agent that all necessary stockholder consents required in connection with
the consummation of the transactions contemplated by this Agreement and the
other Loan Agreements have been obtained.
0.1 Other Documents. To the extent requested by the Majority Banks, the Majority
Banks shall have received executed copies of all material agreements of any
nature whatsoever to which the Borrower or any Subsidiary is a party affecting
or relating to the use, operation, development, construction or management of
the Mortgaged Property.
0.1 No Condemnation/Taking. The Agent shall have received written confirmation
from the Borrower that no condemnation proceedings are pending or to the
Borrower' knowledge threatened against any Mortgaged Property or, if any such
proceedings are pending or threatened, identifying the same and the Real Estate
affected thereby and the Agent shall have determined that none of such
proceedings is or will be material to the Mortgaged Property affected thereby.
0.1 Other. The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent's Special Counsel may reasonably have requested.
1. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, whether on or after the Closing
Date, shall also be subject to the satisfaction of the following conditions
precedent:
0.1 Prior Conditions Satisfied. All conditions set forth in ss.10 shall
continue to be satisfied as of the date upon which any Loan is to be made.
0.1 Representations True; No Default. Each of the representations and warranties
made by or on behalf of the Borrower or any of its Subsidiaries contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true at and as of the time
of the making of such Loan, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions contemplated
or permitted by this Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. Each of the Banks shall have
received a certificate of the Borrower signed by an authorized officer of the
Borrower to such effect.
0.1 No Legal Impediment. There shall be no law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Bank would make
it illegal for such Bank to make such Loan.
0.1 Governmental Regulation. Each Bank shall have received such statements
in substance and form reasonably satisfactory to such Bank as such Bank shall
require for the purpose of compliance with any applicable regulations of the
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Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
0.1 Proceedings and Documents. All proceedings in connection with the Loan shall
be satisfactory in substance and in form to the Majority Banks, and the Majority
Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Majority Banks may reasonably
request.
0.1 Borrowing Documents. In the case of any request for a Loan, the Agent
shall have received the request for a Loan required by paragraph 2.5 in the
form of Exhibit B hereto, fully completed.
0.1 Endorsement to Title Policy. At such times as Agent shall determine in its
discretion, to the extent available under applicable law, a "date down"
endorsement to each Title Policy indicating no change in the state of title and
containing no survey exceptions not approved by the Majority Banks, which
endorsement shall, expressly or by virtue of a proper "revolving credit" clause
or endorsement in the Title Policy, increase the coverage of the Title Policy to
the aggregate amount of all Loans advanced and outstanding on or before the
effective date of such endorsement, or if such endorsement is not available,
such other evidence and assurances as the Agent may reasonably require (which
evidence may include, without limitation, an affidavit from the Borrower stating
that there have been no changes in title from the date of the last effective
date of the Title Policy).
0.1 Future Advances Tax Payment. As a condition precedent to any Bank's
obligations to make any Loans available to the Borrower hereunder, the Borrower
will pay to the Agent any mortgage, recording, intangible, documentary stamp or
other similar taxes and charges which the Agent reasonably determines to be
payable as a result of such Loan to any state or any county or municipality
thereof in which any of the Mortgaged Properties are located and deliver to the
Agent such affidavits or other information which the Agent reasonably determines
to be necessary in connection with the payment of such tax, in order to insure
that the Security Deeds on Mortgaged Property located in such state secure the
Borrower's obligation with respect to the Loans then being requested by the
Borrower. The provisions of this paragraph 11.8 shall be without limitation of
the Borrower's obligations under other provisions of the Loan Documents,
including without limitation paragraph 15 hereof.
1. EVENTS OF DEFAULT; ACCELERATION; ETC.
0.1 Events of Default and Acceleration. If any of the following events ("Events
of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans within ten (10)
days after the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(a) the Borrower shall fail to pay any interest on the Loans or any other sums
due hereunder or under any of the other Loan Documents, within ten (10) days
after the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
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(a) the Borrower shall fail to comply with any covenant contained in ss.9, and
such failure shall continue for thirty (30) days after written notice thereof
shall have been given to the Borrower by the Agent;
(a) the Borrower or any of its Subsidiaries shall fail to perform any other
material term, covenant or agreement contained herein or in any of the other
Loan Documents (other than those specified above in this paragraph 12);
(a) any representation or warranty made by or on behalf of the Borrower or any
of its Subsidiaries in this Agreement or any other Loan Document, or in any
report, certificate, financial statement, request for a Loan, or in any other
document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan or any of the other Loan Documents shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;
(a) the Borrower or any of its Subsidiaries shall fail to pay at maturity, or
within any applicable period of grace, any obligation for borrowed money or
credit received or other Indebtedness, or fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing any such borrowed money or credit received or
other Indebtedness for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of any
obligations issued thereunder to accelerate the maturity thereof; provided that
the events described in this paragraph 12.1(f) shall not constitute an Event of
Default unless such failure to perform, together with other failures to perform
as described in this paragraph 12.1(f), involve singly or in the aggregate
obligations for borrowed money or credit received totalling in excess of
$1,000,000;
(a) the Borrower or any of its Subsidiaries, (i) shall make an assignment for
the benefit of creditors, or admit in writing its general inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of any such Person or of any substantial part of the assets of any
thereof, (ii) shall commence any case or other proceeding relating to any such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or (iii) shall take any action to
authorize or in furtherance of any of the foregoing;
(a) a petition or application shall be filed for the appointment of a trustee or
other custodian, liquidator or receiver of any of the Borrower or any of its
Subsidiaries or any substantial part of the assets of any thereof, or a case or
other proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, and any such Person shall indicate its approval thereof, consent
thereto or acquiescence therein or such petition, application, case or
proceeding shall not have been dismissed within sixty (60) days following the
filing or commencement thereof;
(a) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any of the Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of any
such Person, in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
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(a) there shall remain in force, undischarged, unsatisfied and unstayed, for
more than sixty (60) days, whether or not consecutive, any uninsured final
judgment against any of the Borrower or any of its Subsidiaries that, with other
outstanding uninsured final judgments, undischarged, against such Persons
exceeds in the aggregate $250,000.00;
(a) if any of the Loan Documents shall be canceled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any action
at law, suit in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of the Borrower or
any of its holders of Voting Interests, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;
(a) any dissolution, termination, partial or complete liquidation, merger or
consolidation of the Borrower or any sale, transfer or other disposition of the
assets of the Borrower other than as permitted under the terms of this Agreement
or the other Loan Documents;
(a) any suit or proceeding shall be filed against the Borrower or any of the
Mortgaged Properties which in the good faith business judgment of the Majority
Banks after giving consideration to the likelihood of success of such suit or
proceeding and the availability of insurance to cover any judgment with respect
thereto and based on the information available to them, if adversely determined,
would have a materially adverse effect on the ability of the Borrower to perform
each and every one of its obligations under and by virtue of the Loan Documents;
(a) the Borrower shall be indicted for a federal crime, a punishment for which
could include the forfeiture of any assets of such person included in the
Mortgaged Property;
(a) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall
have occurred and the Majority Banks shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $1,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan;
(a) Richard May and Richard Rasley shall in the aggregate own, directly or
indirectly, less than one percent (1.0%) of the issued and outstanding shares of
the capital stock of the Borrower;
(a) Richard May shall cease to be the Chairman and Chief Executive Officer of,
or Richard Rasley shall cease to be the Secretary of, the Borrower and a
competent and experienced successor for such Person shall not be approved by the
Majority Banks within six (6) months of such event, such approval not to be
unreasonably withheld; or
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(a) any Event of Default as defined in any of the other Loan Documents, shall
occur;
then, and in any such event, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement, the Notes and the other Loan Documents to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in paragraph 12.1(g), paragraph 12.1(h) or paragraph
12.1(i), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from any of the Banks or the Agent.
0.1 Certain Cure Periods.
(a) In the event that there shall occur any Default under paragraph 12.1(c),
then within five (5) Business Days after receipt of notice of such Default from
the Agent or the Majority Banks the Borrower may elect to cure such Default by
providing additional Collateral consisting of Potential Collateral, and/or to
reduce the outstanding Loans to it, in which event such actions shall be
completed not later than fifteen (15) days following the date on which the
Borrower is notified that the Majority Banks have approved the Borrower's
proposed actions (or thirty (30) days in the event that the Borrower intends to
provide additional Mortgaged Property). The Borrower's notice of its election
pursuant to the preceding sentence shall be delivered to the Agent within the
period of five (5) Business Days provided above. Within five (5) Business Days
after receipt of such advice, the Majority Banks shall advise the Borrower as to
whether in their good faith judgment the actions proposed by the Borrower are
sufficient to cure such Default without the creation of any other Default
hereunder. In the event that the Majority Banks determine the Borrower's
proposal is insufficient to cure such Default or is otherwise not in accordance
with the terms of this Agreement, the Borrower within an additional three (3)
Business Days after such negative notice may submit to the Agent an alternative
plan or evidence establishing that the Borrower's original election was
sufficient. In the event that within the times provided herein the Borrower
shall have failed to provide evidence satisfactory to the Majority Banks that
the Borrower's proposed actions are sufficient to cure such Default in
accordance with the terms hereof, the cure period shall terminate and such
Default immediately shall constitute an Event of Default.
(a) In the event that the Borrower shall elect in whole or in part under
paragraph 12.2(a) to provide additional Mortgaged Property, (i) the Real Estate
to be added to the Collateral shall be Eligible Real Estate and on or prior to
the expiration of the 30-day period each of the Eligible Real Estate
Qualification Documents shall have been completed at the Borrower's expense and
provided to the Agent for the benefit of the Banks, and (ii) the Borrower, in
addition to any other amounts payable under this Agreement, shall pay to the
Agent within fifteen (15) days following the commencement of such 60 day period
a review fee in the amount of $15,000.00, which fee shall be nonrefundable under
any circumstances.
0.1 Termination of Commitments. If any one or more Events of Default specified
in paragraph 12.1(g), paragraph 12.1(h) or paragraph 12.1(i) shall occur, then
immediately and without any action on the part of the Agent or any Bank any
unused portion of the credit hereunder shall terminate and the Banks shall be
relieved of all obligations to make Loans to the Borrower. If any
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other Event of Default shall have occurred, the Agent, upon the election of the
Majority Banks, may by notice to the Borrower terminate the obligation to make
Loans to the Borrower. No termination under this paragraph 12.3 shall relieve
the Borrower of its obligations to the Banks arising under this Agreement or the
other Loan Documents.
0.1 Remedies. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to paragraph 12.1, the Agent on behalf of the
Banks, may, with the consent of the Majority Banks but not otherwise, proceed to
protect and enforce their rights and remedies under this Agreement, the Notes or
any of the other Loan Documents by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations are evidenced, including to the
full extent permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right. No remedy herein conferred upon the Agent or the
holder of any Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an attorney at law, the Borrower shall
pay all costs of collection including, but not limited to, reasonable attorneys'
fees.
0.1 Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Security Documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of, the
Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent to protect or
preserve the collateral or in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all or
any of the rights, remedies, powers and privileges of the Agent under this
Agreement or any of the other Loan Documents or in respect of the Collateral or
in support of any provision of adequate indemnity to the Agent against any taxes
or liens which by law shall have, or may have, priority over the rights of the
Agent to such monies;
(a) Second, to all other Obligations in such order or preference as the Majority
Banks shall determine; provided, however, that (i) distributions in respect of
such Obligations shall be made pari passu among Obligations with respect to the
Agent's fee payable pursuant to pargraph 4.3 and all other Obligations, (ii) in
the event that any Bank shall have wrongfully failed or refused to make an
advance under paragraph 2.6 and such failure or refusal shall be continuing,
advances made by other Banks during the pendency of such failure or refusal
shall be entitled to be repaid as to principal and accrued interest in priority
to the other Obligations described in this subsection (b), (iii) Obligations
owing to the Banks with respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Banks pro rata, and (iv)
amounts received or realized from the Borrower shall be applied against the
Obligations of the Borrower; and provided,
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further that the Majority Banks may in their discretion make proper allowance to
take into account any Obligations not then due and payable; and
(a) Third, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.
1. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits (general or specific, time or demand, provisional
or final, regardless of currency, maturity, or the branch of where such deposits
are held) or other sums credited by or due from any of the Banks to the Borrower
and any securities or other property of the Borrower in the possession of such
Bank may be applied to or set off against the payment of Obligations of such
Person and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of such
Person to such Bank. Each of the Banks agrees with each other Bank that if such
Bank shall receive from the Borrower, whether by voluntary payment, exercise of
the right of setoff, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Bank any amount in excess of its ratable portion
of the payments received by all of the Banks with respect to the Notes held by
all of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
1. THE AGENT.
0.1 Authorization. The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank. The Borrower and
any other Person shall be entitled to conclusively rely on a statement from the
Agent that it has the authority to act for and bind the Banks pursuant to this
Agreement and the other Loan Documents.
0.1 Employees and Agents. The Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Agreement and the other Loan Documents. The Agent may utilize
the services of such Persons as the Agent may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.
0.1 No Liability. Neither the Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent, or employee thereof, shall be liable to any of the Banks for any
waiver, consent or approval given or any action taken, or omitted to be taken,
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in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
0.1 No Representations. The Agent shall not be responsible for the execution or
validity or enforceability of this Agreement, the Notes, any of the other Loan
Documents or any instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any other of the Loan Documents. The Agent shall not be
bound to ascertain whether any notice, consent, waiver or request delivered to
it by the Borrower or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the creditworthiness or
financial condition of the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such information and documents as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank, based upon such information and
documents as it deems appropriate at the time, continue to make its own credit
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents.
0.1 Payments.
(a) A payment by the Borrower to the Agent hereunder or under any of the other
Loan Documents for the account of any Bank shall constitute a payment to such
Bank. The Agent agrees to distribute to each Bank not later than one Business
Day after the Agent's receipt of good funds, determined in accordance with the
Agent's customary practices, such Bank's pro rata share of payments received by
the Agent for the account of the Banks except as otherwise expressly provided
herein or in any of the other Loan Documents.
(a) If in the opinion of the Agent the distribution of any amount received by it
in such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
(a) Notwithstanding anything to the contrary contained in this Agreement or any
of the other Loan Documents, any Bank that fails (i) to make available to the
Agent its pro rata share of any Loan or (ii) to comply with the provisions of
paragraph 13 with respect to making dispositions and arrangements with the
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other Banks, where such Bank's share of any payment received, whether by setoff
or otherwise, is in excess of its pro rata share of such payments due and
payable to all of the Banks, in each case as, when and to the full extent
required by the provisions of this Agreement, shall be deemed delinquent (a
"Delinquent Bank") and shall be deemed a Delinquent Bank until such time as such
delinquency is satisfied. A Delinquent Bank shall be deemed to have assigned any
and all payments due to it from the Borrower, whether on account of outstanding
Loans, interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of all
outstanding Loans. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective pro
rata shares of all outstanding Loans. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Banks or as a
result of other payments by the Delinquent Banks to the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.
0.1 Holders of Notes. Subject to the terms of Article 18, the Agent may deem and
treat the payee of any Note as the absolute owner or purchaser thereof for all
purposes hereof until it shall have been furnished in writing with a different
name by such payee or by a subsequent holder, assignee or transferee.
0.1 Indemnity. The Banks ratably agree hereby to indemnify and hold harmless the
Agent from and against any and all claims, actions and suits (whether groundless
or otherwise), losses, damages, costs, expenses (including any expenses for
which the Agent has not been reimbursed by the Borrower as required by paragraph
15), and liabilities of every nature and character arising out of or related to
this Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence.
0.1 Agent as Bank. In its individual capacity, FNBB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.
0.1 Resignation. The Agent may resign at any time by giving 60 days' prior
written notice thereof to the Banks and the Borrower. Upon any such resignation,
the Majority Banks shall have the right to appoint as a successor Agent any Bank
or any bank whose senior debt obligations are rated not less than "A" or its
equivalent by Moody's Investors Service, Inc. or not less than "A" or its
equivalent by Standard & Poor's corporation and which has a net worth of not
less than $500,000,000. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be any Bank or a bank whose
debt obligations are rated not less than "A" or its equivalent by Moody's
Investors Service, Inc. or not less than "A" or its equivalent by Standard &
Poor's Corporation and which has a net worth of not less than $500,000,000. Upon
the acceptance of any
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appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the retiring Agent, and the retiring Agent shall be discharged
from its duties and obligations hereunder as Agent. After any retiring Agent's
resignation, the provisions of this Agreement and the other Loan Documents 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 Agent.
0.1 Duties in the Case of Enforcement. In case one or more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent shall, if (a) so requested by the
Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and hold the Agent
harmless from all liabilities incurred in respect of all actions taken or
omitted in accordance with such directions, provided that the Agent need not
comply with any such direction to the extent that the Agent reasonably believes
the Agent's compliance with such direction to be unlawful or commercially
unreasonable in any applicable jurisdiction.
1. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income, except that
the Agent and the Banks shall be entitled to indemnification for any and all
amounts paid by them in respect of taxes based on income or other taxes assessed
by any State in which Mortgaged Property or other Collateral is located, such
indemnification to be limited to taxes due solely on account of the granting of
Collateral under the Security Documents and to be net of any credit allowed to
the indemnified party from any other State on account of the payment or
incurrence of such tax by such indemnified party), including any recording,
mortgage, documentary or intangibles taxes in connection with the Security Deeds
and other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes payable by
the Agent or any of the Banks after the Closing Date (the Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) all
title insurance premiums, appraisal fees, engineer's fees, reasonable internal
charges of the Agent (determined in good faith and in accordance with the
Agent's internal policies applicable generally to its customers) for commercial
finance exams and engineering and environmental reviews and the reasonable fees,
expenses and disbursements of the counsel to the Agent and any local counsel to
the Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein
(excluding, however, the preparation of agreements evidencing participation
granted under paragraph 18.4), each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable fees, expenses and disbursements of the Agent incurred by the Agent
in connection with the preparation or interpretation of the Loan Documents and
other instruments mentioned herein, and the making of each advance hereunder,
(e) all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and costs, which
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attorneys may be employees of any Bank or the Agent and the fees and costs of
appraisers, engineers, investment bankers or other experts retained by any Bank
or the Agent) incurred by any Bank or the Agent in connection with (i) the
enforcement of or preservation of rights under any of the Loan Documents against
the Borrower or the administration thereof after the occurrence of a Default or
Event of Default and (ii) any litigation, proceeding or dispute whether arising
hereunder or otherwise, in any way related to the Agent's or any of the Bank's
relationship with the Borrower, (f) all reasonable fees, expenses and
disbursements of any Bank or the Agent incurred in connection with UCC searches,
UCC filings, title rundowns, title searches or mortgage recordings, and (g) all
reasonable fees, expenses and disbursements (including reasonable attorneys'
fees and costs) which may be incurred by FNBB and the other Banks in connection
with the execution and delivery of this Agreement and the other Loan Documents.
The covenants of this paragraph 15 shall survive payment or satisfaction of
payment of amounts owing with respect to the Notes.
1. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the Banks
and each director, officer, employee, agent and Person who controls the Agent or
any Bank from and against any and all claims, actions and suits, whether
groundless or otherwise, and from and against any and all liabilities, losses,
damages and expenses of every nature and character arising out of or relating to
this Agreement or any of the other Loan Documents or the transactions
contemplated hereby and thereby including, without limitation, (a) any leasing
fees and any brokerage, finders or similar fees asserted against any Person
indemnified under this paragraph 16 based upon any agreement, arrangement or
action made or taken, or alleged to have been made or taken, by the Borrower or
any of its Subsidiaries, (b) any condition of the Mortgaged Properties, (c) any
actual or proposed use by the Borrower of the proceeds of any of the Loans, (d)
any actual or alleged infringement of any patent, copyright, trademark, service
mark or similar right of any of the Borrower or any of its Subsidiaries
comprised in the Collateral, (e) the Borrower entering into or performing this
Agreement or any of the other Loan Documents, (f) any actual or alleged
violation of any law, ordinance, code, order, rule, regulation, approval,
consent, permit or license relating to the Mortgaged Property, or (g) with
respect to the Borrower and its Subsidiaries and their respective properties and
assets, the violation of any Environmental Law, the Release or threatened
Release of any Hazardous Substances or any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous Substances
(including, but not limited to claims with respect to wrongful death, personal
injury or damage to property), in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs of internal
counsel incurred in connection with any such investigation, litigation or other
proceeding; provided, however, that the Borrower shall not be obligated under
this paragraph 16 to indemnify any Person for liabilities arising from such
Person's own gross negligence or willful misconduct. In litigation, or the
preparation therefor, the Banks and the Agent shall be entitled to select a
single nationally recognized law firm as their own counsel and, in addition to
the foregoing indemnity, the Borrower agrees to pay promptly the reasonable fees
and expenses of such counsel. If, and to the extent that the obligations of the
Borrower under this paragraph 16 are unenforceable for any reason, the Borrower
hereby agrees to make the maximum contribution to the payment in satisfaction of
such obligations which is permissible under applicable law. The provisions of
this paragraph 16 shall survive the repayment of the Loans and the termination
of the obligations of the Banks hereunder.
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1. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in
the Notes, in any of the other Loan Documents or in any documents or other
papers delivered by or on behalf of the Borrower or any of its Subsidiaries
pursuant hereto or thereto shall be deemed to have been relied upon by the Banks
and the Agent, notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Banks of any of the Loans, as
herein contemplated, and shall continue in full force and effect so long as any
amount due under this Agreement or the Notes or any of the other Loan Documents
remains outstanding or any Bank has any obligation to make any Loans. The
indemnification obligations of the Borrower provided herein and the other Loan
Documents shall survive the full repayment of amounts due and the termination of
the obligations of the Banks hereunder and thereunder to the extent provided
herein and therein. All statements contained in any certificate or other paper
delivered to any Bank or the Agent at any time by or on behalf of the Borrower
or any of its Subsidiaries pursuant hereto or in connection with the
transactions contemplated hereby shall constitute representations and warranties
by the such person hereunder.
1. ASSIGNMENT AND PARTICIPATION.
0.1 Conditions to Assignment by Banks. Except as provided herein, each Bank may
assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of its
Commitment Percentage and Commitment and the same portion of the Loans at the
time owing to it, and the Notes held by it); provided that (a) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (b) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), a notice of such assignment, together with
any Notes subject to such assignment, (c) in no event shall any voting, consent
or approval rights of a Bank be assigned to any Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by, the Borrower, which rights shall instead be allocated pro rata
among the other remaining Banks, and (d) such Eligible Assignee shall acquire an
interest in the Loans of not less than $10,000,000 . Upon such execution,
delivery, acceptance and recording, of such notice of assignment, (i) the
Eligible Assignee thereunder shall be a party hereto and all other Loan
Documents executed by the Banks and, to the extent provided in such assignment,
have the rights and obligations of a Bank hereunder, and (ii) the assigning Bank
shall, to the extent provided in such assignment and upon payment to the Agent
of the registration fee referred to in paragraph 18.2, be released from its
obligations under this Agreement. In connection with each assignment, the
Assignee shall represent and warrant to the Agent, the assignor and each other
Bank as to whether such Eligible Assignee is controlling, controlled by, under
common control with or is not otherwise free from influence or control by, the
Borrower.
0.1 Register. The Agent shall maintain a copy of each assignment delivered to it
and a register or similar list (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment Percentages of, and principal
amount of the Loans owing to the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and the Banks at any
reasonable time and from time to time upon reasonable prior
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notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.
0.1 New Notes. Upon its receipt of an assignment executed by the parties to such
assignment, together with each Note subject to such assignment, the Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrower and the Banks (other than the assigning
Bank). Within five Business Days after receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such assignee in an amount equal to
the amount assumed by such assignee pursuant to such assignment and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such assignment and shall otherwise be in
substantially the form of the assigned Notes. The surrendered Notes shall be
canceled and returned to the Borrower.
0.1 Participations. Each Bank may sell participations to one or more Eligible
Participants or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such participation shall not entitle
such Eligible Participant to any rights or privileges under this Agreement or
any Loan Documents, including without limitation, the right to approve waivers,
amendments or modifications, (c) such Eligible Participant shall have no direct
rights against the Borrower except the rights granted to the Banks pursuant to
paragraph 13, (d) such sale is effected in accordance with all applicable laws,
and (e) such Eligible Participant shall not be a Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by the Borrower. Any Bank which sells a participation shall promptly
notify the Agent of such sale and the identity of the purchaser of such
interest.
0.1 Pledge by Bank. Any Bank may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Note) to any of the twelve Federal Reserve Banks organized under paragraph 4 of
the Federal Reserve Act, 12 U.S.C. paragraph 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
0.1 No Assignment by Borrower. The Borrower shall not assign or transfer any
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
0.1 Disclosure. The Borrower agrees that in addition to disclosures made in
accordance with standard banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder.
0.1 Amendments to Mortgages. Upon any such assignment or participation, the
Borrower shall, upon the request of the Agent, enter into such documents as
may be reasonably required by the Agent to modify the Loan Documents to
reflect such assignment or participation.
1. NOTICES.
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Each notice, demand, election or request provided for or permitted to be given
pursuant to this Agreement (hereinafter in this paragraph 19 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
If to the Agent or FNBB:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Telecopy No.: (770) 390-8434
and to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attn: Charles E. Stahl
Telecopy No.: (312) 558-5700
If to the Borrower:
Great Lakes REIT, Inc.
2311 West 22nd Street
Suite 109
Oak Brook, Illinois 60521
Attn: Richard L. Rasley
Telecopy No. (708) 368-2929
With a copy to:
McBride, Baker & Coles
500 West Madison Street
40th Floor
Chicago, Illinois 60661
Attn: Anne Hamblin Schiave
Telecopy No.: (312) 993-9350
and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or upon
being deposited in the United States Mail as aforesaid. The time period in which
a response to such Notice must be given or any action taken with respect thereto
(if any), however, shall commence to run from the
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date of receipt if personally delivered or sent by overnight courier, or if so
deposited in the United States Mail, the earlier of three (3) Business Days
following such deposit or the date of receipt as disclosed on the return
receipt. Rejection or other refusal to accept or the inability to deliver
because of changed address for which no notice was given shall be deemed to be
receipt of the Notice sent. By giving at least fifteen (15) days prior Notice
thereof, the Borrower, a Bank or Agent shall have the right from time to time
and at any time during the term of this Agreement to change their respective
addresses and each shall have the right to specify as its address any other
address within the United States of America.
1. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of a lender
and borrower, and nothing contained herein or in any of the other Loan Documents
shall in any manner be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and borrower.
1. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
ILLINOIS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BRING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN PARAGRAPH 19. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
1. HEADINGS.
The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof.
1. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together shall constitute one
instrument. In proving this Agreement it shall not be necessary to produce or
account for more than one such counterpart signed by the party against whom
enforcement is sought.
1. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in paragraph
27.
1. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
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EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS PARAGRAPH 25.
1. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit to and
generally engage in any kind of banking, trust or other business with the
Borrower, its Subsidiaries or any of their affiliates regardless of the capacity
of the Bank hereunder.
1. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Bank: a change in the rate of interest
on and the term of the Notes; the amount of the Commitments of the Banks; a
reduction or waiver of the principal of any unpaid Loan or any interest thereon;
the amount of any fee (other than late fees) payable to a Bank hereunder; the
release of the Borrower or any Collateral except as otherwise provided herein;
or an amendment of the definition of Majority Banks or of any requirement for
consent by all of the Banks. The amount of the Agent's fee payable for the
Agent's account and the provisions of paragraph 14 may not be amended without
the written consent of the Agent. The Borrower agrees to enter into such
modifications or amendments of this Agreement or the other Loan Documents as may
be reasonably requested by FNBB in connection with the acquisition by each Bank
acquiring all or a portion of the Commitment, provided that no such amendment or
modification materially affects or increases any of the obligations of the
Borrower hereunder. No waiver shall extend to or affect any obligation not
expressly waived or impair any right consequent thereon. No course of dealing or
delay or omission on the part of the Agent or any Bank in exercising any right
shall operate as a waiver thereof or otherwise be prejudicial thereto. No notice
to or demand upon the Borrower shall entitle the Borrower to other or further
notice or demand in similar or other circumstances.
1. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
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such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
1. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant, agreement and
obligation of the Borrower under this Agreement and the other Loan Documents.
1. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH
BELOW.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
GREAT LAKES REIT, INC.
By: ______________________________________
Richard L. Rasley,
Secretary
THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent
By:_______________________________________
Michael J. Corbett,
Director
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EXHIBIT A
FORM OF NOTE
$35,000,000.00 April __, 1996
FOR VALUE RECEIVED, the undersigned GREAT LAKES REIT, INC., a Maryland
corporation, hereby promises to pay to The First National Bank of Boston or
order, in accordance with the terms of that certain Master Revolving Credit
Agreement dated as of April 12, 1996 (the "Credit Agreement"), as from time to
time in effect, among the undersigned, The First National Bank of Boston, for
itself and as Agent, and such other Banks as may be from time to time named
therein, to the extent not sooner paid, on or before the Maturity Date, the
principal sum of THIRTY FIVE MILLION DOLLARS ($35,000,000.00), or such amount as
may be advanced by the payee hereof under the Credit Agreement with daily
interest from the date hereof, computed as provided in the Credit Agreement, on
the principal amount hereof from time to time unpaid, at a rate per annum on
each portion of the principal amount which shall at all times be equal to the
rate of interest applicable to such portion in accordance with the Credit
Agreement, and with interest on overdue principal and, to the extent permitted
by applicable law, on overdue installments of interest and late charges at the
rates provided in the Credit Agreement. Interest shall be payable on the dates
specified in the Credit Agreement, except that all accrued interest shall be
paid at the stated or accelerated maturity hereof or upon the prepayment in full
hereof. Capitalized terms used herein and not otherwise defined herein shall
have the meanings set forth in the Credit Agreement.
Payments hereunder shall be made to The First National Bank of Boston, as Agent
for the payee hereof, 100 Federal Street, Boston, Massachusetts 02110.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the maturity date stated above and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.
Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Banks exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Banks in excess of the maximum lawful amount, the interest payable to the Banks
shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance the Banks shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Borrower and to the
payment of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Borrower, such excess shall be
refunded to the undersigned Borrower. All interest paid or agreed to be paid to
the Banks shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread throughout the full period until payment in full
of the principal of the Obligations of the
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undersigned Borrower (including the period of any renewal or extension thereof)
so that the interest thereon for such full period shall not exceed the maximum
amount permitted by applicable law. This paragraph shall control all agreements
between the undersigned Borrower and the Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement. In addition to and not in limitation of the
foregoing and the provisions of the Credit Agreement hereinabove defined, the
undersigned further agrees, subject only to any limitation imposed by applicable
law, to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this Note in endeavoring to collect any
amounts payable hereunder which are not paid when due, whether by acceleration
or otherwise.
This Note shall be governed by and construed in accordance with the laws of the
State of Illinois (without giving effect to the conflict of laws rules of any
jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers, executed
this Note under seal as of the day and year first above written.
GREAT LAKES REIT, INC.
By: _____________________________________
Title:____________________________________
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EXHIBIT B
FORM OF REQUEST FOR LOAN The First National Bank of Boston, for itself and as
Agent 115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
[Insert Addresses for other Banks]
Ladies and Gentlemen:
Pursuant to the provisions of ss.2.5 of the Master Revolving Credit Agreement
dated as of April 12, 1996, as from time to time in effect (the "Credit
Agreement"), among Great Lakes REIT, Inc. (the "Borrower"), The First National
Bank of Boston, for itself and as Agent, and the other Banks from time to time
party thereto, the undersigned Borrower hereby requests and certifies as
follows:
1. Loan. The undersigned Borrower hereby requests a Loan under ss.2.1 of the
Credit Agreement:
Principal Amount: $
Type (LIBOR, Base Rate):
Drawdown Date: , 19
Interest Period:
by credit to the general account of the undersigned Borrower with the Agent at
the Agent's Head Office.
2. Use of Proceeds. Such Loan shall be used for the following purposes
permitted by paragraph 7.11 of the Credit Agreement:
[Describe]
3. Capital Improvement Project. In the event that such Loan relates to any
Capital Improvement Project or portion thereof, the undersigned Borrower
represents and warrants that such Loan will not exceed the limit on such Loans
set forth in paragraph 7.11 of the Credit Agreement and will reimburse the
undersigned Borrower for or pay costs incurred for work on the Capital
Improvement Project identified above, which work covered by this request is in
place or is for stored materials which are properly secured. Attached hereto are
invoices, receipts or other evidence satisfactory to the Majority Banks to
verify the cost of such work. [If requested by the Agent Also attached hereto
are affidavits, lien waivers of other evidence reasonably satisfactory to the
Majority Banks showing that all materialmen, laborers, subcontractors and any
other parties who might or could claim statutory or common law liens and are
furnishing or have furnished material or labor to the Mortgaged Property in
connection with such Capital Improvement Project have been paid all amounts due
for such labor and materials.]
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4. Reimbursement. In the event that such Loan is requested to reimburse the
undersigned Borrower for amounts paid from its own funds for a purpose
authorized by the terms of paragraph 7.11 of the Credit Agreement, such funds
were used within ninety (90) days of the date of this Loan Request. [Also
attached hereto is evidence reasonably satisfactory to the Majority Banks
showing the date on which and purpose for which the undersigned Borrower's funds
were used.]
5. No Default. The undersigned chief financial or chief accounting officer of
the Borrower certifies that the Borrower is and will be in compliance with all
covenants under the Loan Documents after giving effect to the making of the Loan
requested hereby. Attached to this Request for Loan is a Compliance Certificate
prepared using the financial statements of the Borrower most recently provided
or required to be provided under paragraph 6.4 or paragraph 7.4 of the Credit
Agreement adjusted in the best good-faith estimate of the Borrower to give
effect to the making of the Loan requested hereby. No condemnation proceedings
are pending as to the undersigned Borrower's knowledge threatened against any
Mortgaged Property.
6. Representations True. Each of the representations and warranties made by or
on behalf of the Borrower, and its Subsidiaries contained in the Credit
Agreement, in the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true as of
the date as of which it was made and shall also be true at and as of the
Drawdown Date for the Loan requested hereby, with the same effect as if made at
and as of such Drawdown Date (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and except to the extent
that such representations and warranties relate expressly to an earlier date)
and no Default or Event of Default has occurred and is continuing.
7. Other Conditions. All other conditions to the making of the Loan requested
hereby set forth in paragraph 11 of the Credit Agreement have been satisfied.
(Reference title insurance "date down", if applicable.)
8. Drawdown Date. Except to the extent, if any, specified by notice actually
received by the Agent prior to the Drawdown Date specified above, the foregoing
representations and warranties shall be deemed to have been made by the Borrower
on and as of such Drawdown Date.
9. Definitions. Terms defined in the Credit Agreement are used herein with
the meanings so defined.
IN WITNESS WHEREOF, we have hereunto set our hands this _____ day of
_______________, 199___.
GREAT LAKES REIT, INC.
By: _______________________________
Title:______________________________
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EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
The First National Bank of Boston, for itself and as Agent 115 Perimeter Center
Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
[Insert Addresses for other Banks]
Ladies and Gentlemen:
Reference is made to the Master Revolving Credit Agreement dated as of April 12,
1996 (the "Credit Agreement") by and among Great Lakes REIT, Inc. (the
"Borrower"), The First National Bank of Boston, for itself and as Agent, and the
other Banks from time to time party thereto. Terms defined in the Credit
Agreement and not otherwise defined herein are used herein as defined in the
Credit Agreement.
Pursuant to the Credit Agreement, the Borrower is furnishing to you herewith (or
have most recently furnished to you) the financial statements of the Borrower
and its Subsidiaries for the fiscal period ended _______________ (the "Balance
Sheet Date"). Such financial statements have been prepared in accordance with
generally accepted accounting principles and present fairly the financial
position of the Borrower and the Subsidiaries covered thereby at the date
thereof and the results of their operations for the periods covered thereby,
subject in the case of interim statements only to normal year-end audit
adjustments.
This certificate is submitted in compliance with requirements of paragraph
7.4(h), paragraph 7.5(e), paragraph 8.1(f), paragraph 8.8 or paragraph 10.14 of
the Credit Agreement. If this certificate is provided under a provision other
than paragraph 7.4(e), the calculations provided below are made using the
financial statements of the Borrower and its Subsidiaries as of the Balance
Sheet Date adjusted in the best good-faith estimate of the Borrower to give
effect to the making of a Loan, extension of the Maturity Date, acquisition or
disposition of property or other event that occasions the preparation of this
certificate; and the nature of such event and the Borrower's estimate of its
effects are set forth in reasonable detail in an attachment hereto. The
undersigned officer of the Borrower is its chief financial or chief accounting
officer.
The undersigned officers have caused the provisions of the Loan Documents to be
reviewed and have no knowledge of any Default or Event of Default. (Note: If the
signers do have knowledge of any Default or Event of Default, the form of
certificate should be revised to specify the Default or Event of Default, the
nature thereof and the actions taken, being taken or proposed to be taken by the
Borrower with respect thereto.]
The Borrower is providing the attached information to demonstrate compliance as
of the date hereof with the covenants described in the attachment hereto.
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IN WITNESS WHEREOF, we have hereunto set our hand this _____ day of
______________, 199__.
GREAT LAKES REIT, INC.
By:________________________________
Title:_______________________________
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APPENDIX A
to
COMPLIANCE CERTIFICATE
Outstanding Loans cannot exceed the Borrowing Base (Section 9.1)
A.0.1 Outstanding principal balance of the Loans:
A.0.1 Approved Appraised Value:
A.0.1 Line 2 X 60%:
A.0.1 Line 3 must be > than or = to line 1.
A. Company Leverage cannot exceed 55% (Section 9.2)
1. Consolidated Total Liabilities:
1. Total GAP Assets:
1. Accumulated Depreciation:
1. Consolidated Total Adjusted Asset Value:
(line 2 plus line 3)
1. Company Leverage:
(line 1 divided by line 4):
1. Line 5 cannot exceed .55.
A. Company Debt Service Coverage must exceed 2.0X rolling 4Q's (Section
9.3)
1. Net Income:
2. Depreciation & Amortization:
3. Interest Expense:
4. Extraordinary/Non-recurring losses:
5. Extraordinary/Non-recurring gains:
6. CapX Reserve Amount ($ .50 psf):
7. Operating Cash Flow:
(Lines 1+2+3+4 5 6)
8. Debt Service:
9. DSC Ratio:
(line 7 divided by line 8)
10. Line 9 must exceed 2.0.
A. Minimum Consolidated Tangible Net Worth (Section 9.4)
1. Consolidated Total Adjusted Assets:
(Line B.4)
2. Consolidated Total Liabilities:
3. Initial Consolidated Tangible Net Worth:
Line 1 minus Line 2)
4. Net Offering Proceeds from offerings after Closing:
5. 75% of line 4:
6. Minimum Consolidated Tangible Net Worth:
($40,000,000 + line 5)
7. Line 3 must be > than or = to line 6.
A. Mortgaged Property Operating Net Income (Section 9.5)
1. NOI of existing Mortgaged Properties Rolling 4Q's:
2. NOI of new properties added during Q (annualized):
3. CapX Reserve ($ .50 psf):
4. OCF of all Mortgaged Properties:
line 1+ line 2 line 3)
5. L an Amount Outstanding at QE:
6. Actual Interest Rate:
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7. 10-Year Treasury+2%:
8. Applicable Interest Rate (the > of line 6 or 7):
9. Annual P&I payment using 20-yr amortization:
10. Mortgaged Property DSC Ratio:
(line 4 divided by line 9)
11. Line 10 must exceed 1.5.
A. Distributions cannot exceed 90% of Funds From Operations (Section 8.7(a))
1. Current Quarter Distributions:
2. Prior 3 Quarters Distributions:
3. Total Distributions last 4Q's:
4. GAAP Net Income for last 4Q's:
5. Adjustments to Net Income:
(exclude financing costs and gains (losses) from debt restructuring and sales
of property)
6. Depreciation and Amortization:
7. Other non-cash items:
8. Funds from Operations:
(lines 4-5+6+7=)
9. Distributions to Funds from Operations Ratio:
(line 3 divided by line 8)
10. Line 9 cannot exceed .90.
A. Liquidation Value of Portfolio
NOI stabilized income properties at ________: NOI capped at 10.5% List
Additional new Properties at Cost:
TOTAL PROPERTY VALUE
Cash & Equivalents
Receivables & Other Assets
TOTAL ASSET VALUE:
Mortgages & Line of Credit
Other Liabilities
TOTAL LIABILITIES:
LIQUIDATED PORTFOLIO VALUE:
Shares Outstanding
Liquidation Value per Share:
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SCHEDULE 1
BANKS AND COMMITMENTS
Commitment
Commitment Percentage
The First National Bank of Boston $35,000,000.00 100.0%
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
LIBOR Lending Office
Same as above
------------ -----
$35,000,000.00 100.0%
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SCHEDULE 6.15
AFFILIATE TRANSACTIONS
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SCHEDULE 6.19
SUBSIDIARIES OF THE BORROWER
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SCHEDULE 6.22
AGREEMENTS
NONE.
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SCHEDULE 8.1
INDEBTEDNESS
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SCHEDULE 8.2
LIENS
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TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION 1
paragraph 1.1. Definitions.1
paragraph 1.2. Rules of Interpretation 18
2. THE REVOLVING CREDIT FACILITY 19
paragraph 2.1. Commitment to Lend 19
paragraph 2.2. Unused Facility Fee 19
paragraph 2.3. Notes 19
paragraph 2.4. Interest on Loans 20
paragraph 2.5. Requests for Loans 20
paragraph 2.6. Funds for Loans 21
3. REPAYMENT OF THE LOANS 22
paragraph 3.1. Stated Maturity 22
paragraph 3.2. Mandatory Prepayments 22
paragraph 3.3. Optional Prepayments 22
paragraph 3.4. Partial Prepayments 22
paragraph 3.5. Effect of Prepayments 22
paragraph 3.6. Proceeds from Debt or Equity Offering 22
4. CERTAIN GENERAL PROVISIONS 23
paragraph 4.1. Conversion Options 23
paragraph 4.2. Commitment and Syndication Fee 23
paragraph 4.3. Agent's Fee 24
paragraph 4.4. Funds for Payments 24
paragraph 4.5. Computations 24
paragraph 4.6. Inability to Determine LIBOR Rate 24
paragraph 4.7. Illegality 25
paragraph 4.8. Additional Interest 25
paragraph 4.9. Additional Costs, Etc 25
paragraph 4.10. Capital Adequacy 26
paragraph 4.11. Indemnity of Borrower 27
paragraph 4.12. Interest on Overdue Amounts; Late Charge 27
paragraph 4.13. HLT Classification 27
paragraph 4.14. Certificate 28
paragraph 4.15. Limitation on Interest 28
paragraph 4.16. Substitution of a Bank 28
5. COLLATERAL SECURITY 29
paragraph 5.1. Collateral 29
paragraph 5.2. Appraisals 29
paragraph 5.3. Release of Collateral 30
paragraph 5.4. Substitution of Mortgaged Property 30
6. REPRESENTATIONS AND WARRANTIES 30
paragraph 6.1. Corporate Authority, Etc. 30
paragraph 6.2. Governmental Approvals 31
paragraph 6.3. Title to Properties: Lease. 31
paragraph 6.4. Financial Statements 31
paragraph 6.5. No Material Changes 32
paragraph 6.6. Franchises, Patents, Copyrights, Etc. 32
paragraph 6.7. Litigation 32
paragraph 6.8. No Materially Adverse Contracts, Etc. 32
paragraph 6.9. Compliance with Other Instruments, Laws, Etc. 33
paragraph 6.10. Tax Status 33
paragraph 6.11. No Event of Default 33
paragraph 6.12. Holding Company and Investment Company Acts 33
paragraph 6.13. Absence of UCC Financing Statements, Etc. 33
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paragraph 6.14. Setoff, Etc. 33
paragraph 6.15. Certain Transactions 33
paragraph 6.16. Employee Benefit Plans 34
paragraph 6.17. Regulations U and X 34
paragraph 6.18. Environmental Compliance 34
paragraph 6.19. Subsidiaries 36
paragraph 6.20. Leases 36
paragraph 6.21. Loan Documents 36
paragraph 6.22. Mortgaged Property 36
paragraph 6.23. Brokers 39
paragraph 6.24. Other Debt 39
paragraph 6.25. Solvency 39
7. AFFIRMATIVE COVENANTS OF THE BORROWER 40
paragraph 7.1. Punctual Payment 40
paragraph 7.2. Maintenance of Office 40
paragraph 7.3. Records and Accounts 40
paragraph 7.4. Financial Statements, Certificates and Information 40
paragraph 7.5. Notices 43
paragraph 7.6. Existence; Maintenance of Properties 44
paragraph 7.7. Insurance 45
paragraph 7.8. Taxes 48
paragraph 7.9. Inspection of Properties and Books 49
paragraph 7.10. Compliance with Laws, Contracts, Licenses, and Permits 49
paragraph 7.11. Use of Proceeds 49
paragraph 7.12. Further Assurances 50
paragraph 7.13. Compliance 50
paragraph 7.14. Interest Rate Contracts 50
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 50
paragraph 8.1. Restrictions on Indebtedness 50
paragraph 8.2. Restrictions on Liens, Etc. 51
paragraph 8.3. Restrictions on Investments 52
paragraph 8.4. Merger, Consolidation 53
paragraph 8.5. Sale and Leaseback. 54
paragraph 8.6. Compliance with Environmental Laws 54
paragraph 8.7. Distributions 55
paragraph 8.8. Asset Sales 55
paragraph 8.9. Development Activity 55
9. FINANCIAL COVENANTS OF THE BORROWER 56
paragraph 9.1. Borrowing Base 56
paragraph 9.2. Liabilities to Assets Ratio 56
paragraph 9.3. Debt Service Coverage 56
paragraph 9.4. Tangible Net Worth 56
paragraph 9.5. Mortgaged Property Operating Net Income 56
10. CLOSING CONDITIONS 57
paragraph 10.1. Loan Documents 57
paragraph 10.2. Certified Copies of Organizational Documents 57
paragraph 10.3. Bylaws; Resolutions 57
paragraph 10.4. Incumbency Certificate; Authorized Signers 57
paragraph 10.5. Opinion of Counsel 57
paragraph 10.6. Payment of Fees 58
paragraph 10.7. Appraisals 58
paragraph 10.8. Environmental Reports 58
paragraph 10.9. Insurance 58
paragraph 10.10. Performance; No Default 58
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paragraph 10.11. Representations and Warranties 58
paragraph 10.12. Proceedings and Documents 58
paragraph 10.13. Eligible Real Estate Qualification Documents 58
paragraph 10.14. Compliance Certificate 58
paragraph 10.15. Stockholder Consents 59
paragraph 10.16. Other Documents 59
paragraph 10.17. No Condemnation/Taking 59
paragraph 10.18. Other 59
11. CONDITIONS TO ALL BORROWINGS 59
paragraph 11.1. Prior Conditions Satisfied 59
paragraph 11.2. Representations True; No Default 59
paragraph 11.3. No Legal Impediment 60
paragraph 11.4. Governmental Regulation 60
paragraph 11.5. Proceedings and Documents 60
paragraph 11.6. Borrowing Documents 60
paragraph 11.7. Endorsement to Title Policy 60
paragraph 11.8. Future Advances Tax Payment 60
12. EVENTS OF DEFAULT; ACCELERATION; ETC. 61
paragraph12.1. Events of Default and Acceleration 61
paragraph 12.2. Certain Cure Periods 63
paragraph 12.3. Termination of Commitments 64
paragraph 12.4. Remedies 64
paragraph 12.5. Distribution of Collateral Proceeds 65
13. SETOFF 65
14. THE AGENT 66
paragraph 14.1. Authorization 66
paragraph 14.2. Employees and Agents 66
paragraph 14.3. No Liability 66
paragraph 14.4. No Representations 67
paragraph 14.5. Payments 67
paragraph 14.6. Holders of Notes 68
paragraph 14.7. Indemnity 68
paragraph 14.8. Agent as Bank 68
paragraph 14.9. Resignation 68
paragraph 14.10. Duties in the Case of Enforcement 69
15. EXPENSES 69
16. INDEMNIFICATION 70
17. SURVIVAL OF COVENANTS, ETC. 71
18. ASSIGNMENT AND PARTICIPATION 71
paragraph 18.1. Conditions to Assignment by Banks 71
paragraph 18.2. Register 72
paragraph 18.3. New Notes 72
paragraph 18.4. Participations 72
paragraph 18.5. Pledge by Bank 73
paragraph 18.6. No Assignment by Borrower 73
paragraph 18.7. Disclosure 73
paragraph 18.8. Amendments to Mortgages 73
19. NOTICES 73
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20. RELATIONSHIP 75
21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE 75
22. HEADINGS 75
23. COUNTERPARTS 75
24. ENTIRE AGREEMENT, ETC 76
25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS 76
26. DEALINGS WITH THE BORROWER 76
27. CONSENTS, AMENDMENTS, WAIVERS, ETC 76
28. EVERABILITY 77
29. TIME OF THE ESSENCE 77
30. NO UNWRITTEN AGREEMENTS 77
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF REQUEST FOR LOAN
EXHIBIT C FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 1 BANKS AND COMMITMENTS
SCHEDULE 6.15 AFFILIATE TRANSACTIONS
SCHEDULE 6.19 SUBSIDIARIES OF THE BORROWER
SCHEDULE 6.22 AGREEMENTS
SCHEDULE 8.1 INDEBTEDNESS
SCHEDULE 8.2 LIENS
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AMENDED AND RESTATED
MASTER REVOLVING CREDIT AGREEMENT
DATED AS OF JUNE 28, 1996
among
GREAT LAKES REIT, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
and
BANK OF AMERICA ILLINOIS
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
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AMENDED AND RESTATED MASTER
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED MASTER REVOLVING CREDIT AGREEMENT is made as of the
28th day of June, 1996, by and among GREAT LAKES REIT, INC. (the "Borrower"), a
Maryland corporation having its principal place of business at 2311 West 22nd
Street, Suite 109, Oak Brook, Illinois 60521, and THE FIRST NATIONAL BANK OF
BOSTON ("FNBB"), BANK OF AMERICA ILLINOIS ("BOA"), and the other lending
institutions which may become parties hereto pursuant to paragraph 18 (the
"Banks"), and THE FIRST NATIONAL BANK OF BOSTON, as Agent for the Banks (the
"Agent").
RECITALS
WHEREAS, the Borrower, FNBB and the Agent are parties to that certain Master
Revolving Credit Agreement dated as of April 12, 1996, (the "Prior Credit
Agreement");
WHEREAS, pursuant to the Prior Credit Agreement, FNBB has made certain loans to
the Borrower which are outstanding on the date hereof;
WHEREAS, the Borrower requires additional availability of funds in the operation
of its business and the Banks are willing to provide such additional funds
pursuant to the terms set forth herein; and
WHEREAS, the Borrower, the Banks and the Agent desire to amend and restate the
Prior Credit Agreement to provide for an increase in the commitment of the Banks
under the credit facility, it being understood that the loans heretofore made to
the Borrower by FNBB shall continue to remain outstanding and that this
Agreement is an amendment and restatement of the Prior Credit Agreement, which
shall remain in full force and effect, as amended and restated hereby.
NOW, THEREFORE, in consideration of the terms and conditions contained herein,
and of any loans, advances, or extensions of credit heretofore, now or hereafter
made to or for the benefit of the Borrower by the Banks, the parties hereto
hereby agree as follows:
1. DEFINITIONS AND RULES OF INTERPRETATION.
0.1 Definitions. The following terms shall have the meanings set forth in this
paragraph l or elsewhere in the provisions of this Agreement referred to below:
Affected Bank. See paragraph 4.16.
Agent. The First National Bank of Boston acting as agent for the Banks.
Agent's Head Office. The Agent's head office located at 100 Federal Street,
Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks. Agent's
Special Counsel. Winston & Strawn or such other counsel as may be approved by
the Agent.
Agreement. This Amended and Restated Master Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
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Applicable Margin. As of any date of determination, with respect to LIBOR Rate
loans, 1.875%, provided that upon completion of a Successful Initial Public
Offering the applicable margin shall be reduced to 1.750%.
Appraisal. An MAI appraisal of the value of a parcel of Real Estate, determined
on a fair value basis, performed by an independent appraiser selected by the
Agent who is not an employee of the Borrower, the Agent or a Bank, the form and
substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Banks and otherwise acceptable (i) to the Agent, in the case of such
appraisals delivered by the Borrower on the Closing Date, and (ii) the Majority
Banks, in the case of any such appraisals delivered by the Borrower after the
Closing Date, provided that if the Agent's appraisal department has determined
that the value of any parcel of Real Estate is within five percent (5%) of the
value for such parcel of Real Estate as set forth in the MAI appraisal delivered
to the Agent by the Borrower, the Banks shall accept such appraised value.
Appraised Value. The fair value of a parcel of Mortgaged Property determined by
the most recent Appraisal of such parcel or update obtained pursuant to
paragraph 5.2 or paragraph 10.7, subject, however, to such changes or
adjustments to the value determined thereby as may be required by (i) the
appraisal department of the Agent, in the case of such appraisals delivered by
the Borrower on the Closing Date, and (ii) the appraisal departments of the
Majority Banks, in the case of any such appraisals delivered by the Borrower
after the Closing Date, in their good faith business judgment after consultation
with the Borrower, provided that if the Agent's appraisal department has
determined that the value of any parcel of Mortgaged Property is within five
percent (5%) of the value for such Mortgaged Property as set forth in the MAI
appraisal delivered to the Agent by the Borrower, the Banks shall accept such
appraised value.
Assigned Interest. See paragraph 18.9.
Assignment of Leases and Rents. Each of the collateral assignments of leases and
rents from the Borrower to the Agent, as the same may be modified or amended,
pursuant to which there shall be assigned to the Agent for the benefit of the
Banks a security interest in the interest of the Borrower as lessor with respect
to all Leases of all or any part of a Mortgaged Property, each such collateral
assignment to be in form and substance satisfactory to the Majority Banks.
Balance Sheet Date. December 31, 1995.
Banks. FNBB, BOA and any other Person who becomes an assignee of any rights
of a Bank pursuant to paragraph 18.
Base Rate. The annual rate of interest announced from time to time by Agent at
Agent's Head Office as its "base rate". Any change in the rate of interest
payable hereunder resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such change in the
Base Rate becomes effective.
Base Rate Loans. Those Loans bearing interest calculated by reference to the
Base Rate.
BOA. As defined in the preamble hereto.
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Borrower. As defined in the preamble hereto.
Borrowing Base. At any time with respect to the Borrower, the Borrowing Base
shall be the aggregate of the Borrowing Bases for each parcel of Eligible Real
Estate included in the Mortgaged Property owned by the Borrower. The Borrowing
Base for each parcel of Eligible Real Estate included in the Mortgaged Property
shall be the amount which is sixty percent (60%) of the Appraised Value of such
Mortgaged Property as most recently determined as provided under paragraph 5.2
or paragraph 10.7.
Building. With respect to each parcel of Mortgaged Property, all of the
buildings, structures and improvements now or hereafter located thereon.
Building Service Equipment. All apparatus, fixtures and articles of personal
property owned by the Borrower now or hereafter attached to or used or procured
for use in connection with the operation or maintenance of any building,
structure or other improvement located on or included in the Mortgaged Property,
including, but without limiting the generality of the foregoing, all engines,
furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors, generators,
switchboards, electrical equipment, heating, plumbing, lifting and ventilating
apparatus, air-cooling and air-conditioning apparatus, gas and electric
fixtures, elevators, escalators, fittings, and machinery and all other equipment
of every kind and description, used or procured for use in the operation of a
Building (except apparatus, fixtures or articles of personal property belonging
to lessees or other occupants of such building or to persons other than the
Borrower unless the same be abandoned by any such lessee or other occupant or
person and shall become the Borrower's property by reason of such abandonment),
together with any and all replacements thereof and additions thereto.
Business Day. Any day on which banking institutions in Boston, Massachusetts are
open for the transaction of banking business and, in the case of LIBOR Rate
Loans, which also is a LIBOR Business Day.
Capital Expenditure Reserve Amount. With respect to any Person or property, a
reserve for replacements and capital expenditures equal to $ .50 per square foot
of building space located on all Real Estate owned by such Person. Capital
Improvement Project. With respect to any Real Estate now or hereafter owned by
the Borrower which is utilized principally for office, office/service or light
industry, capital improvements consisting of rehabilitation, refurbishment,
replacement and improvements (including related amenities) to the existing
Buildings on such Real Estate which may be properly capitalized under generally
accepted accounting principles.
CERCLA. See paragraph 6.18.
Closing Date. The first date on which all of the conditions set forth in
paragraph 10 and paragraph 11 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower which are
or are intended to be subject to the security interests, liens and mortgages
created by the Security Documents, including, without limitation, the Mortgaged
Property.
Commitment. With respect to each Bank, the amount set forth on Schedule I
hereto as the amount of such Bank's Commitment to make or maintain Loans to
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the Borrower, as the same may be changed from time to time in accordance with
the terms of this Agreement
Commitment Percentage. With respect to each Bank, the percentage set forth on
Schedule 1 hereto as such Bank's percentage of the aggregate Commitments of
all of the Banks.
Compliance Certificate. See paragraph 7.4(e).
Consolidated or combined. With reference to any term defined herein, that term
as applied to the accounts of a Person and its Subsidiaries, consolidated or
combined in accordance with generally accepted accounting principles.
Consolidated Operating Cash Flow. With respect to any period of a Person, an
amount equal to the Operating Cash Flow such Person and its Subsidiaries for
such period consolidated in accordance with generally accepted accounting
principles.
Consolidated Tangible Net Worth. The amount by which Consolidated Total
Adjusted Asset Value exceeds Consolidated Total Liabilities, and less the sum
of:
(a) the total book value of all assets of a Person and its Subsidiaries properly
classified as intangible assets under generally accepted accounting principles,
including such items as good will, the purchase price of acquired assets in
excess of the fair market value thereof, trademarks, trade names, service marks,
brand names, copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(a) all amounts representing any write-up in the book value of any assets of
such Person or its Subsidiaries resulting from a revaluation thereof subsequent
to the Balance Sheet Date.
Consolidated Total Adjusted Asset Value. With respect to any Person, all assets
of such Person and its Subsidiaries determined on a consolidated basis in
accordance with generally accepted accounting principles. All real estate shall
be valued on an undepreciated cost basis.
Consolidated Total Liabilities. All liabilities of a Person and its Subsidiaries
determined on a consolidated basis in accordance with generally accepted
accounting principles and all Indebtedness of such Person and its Subsidiaries,
whether or not so classified. Amounts undrawn under this Agreement shall not be
included in Indebtedness for purposes of this definition.
Construction Inspector. A firm of professional engineers or architects
selected by the Borrower and reasonably acceptable to the Agent.
Conversion Request. A notice given by the Borrower to the Agent of its
election to convert or continue a Loan in accordance with paragraph 4.1
Debt Offering. The issuance and sale by the Borrower of any debt securities
of the Borrower.
Debt Service. For any period, the sum of all interest and mandatory principal
payments due and payable during such period reduced by any balloon payments due
upon maturity of any Indebtedness.
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Default. See paragraph 2.1
Defaulting Bank. Any Bank which fails or refuses to perform its obligations
under this Agreement within the time period specified for performance of such
obligation or, if no time frame is specified, if such failure or refusal
continues for a period of five (5) Business Days after notice from the Agent.
Distribution. With respect to any Person, the declaration or payment of any
cash, cash flow, dividend or distribution on or in respect of any shares of any
class of capital stock or other beneficial interest of such Person other than
dividends or distributions payable solely in equity securities of such Person;
the purchase, redemption, exchange or other retirement of any shares of any
class of capital stock or other beneficial interest of such Person, directly or
indirectly through a Subsidiary of such Person or otherwise; the return of
capital by such Person to its shareholders or partners as such; or any other
distribution on or in respect of any shares of any class of capital stock or
other beneficial interest of such Person.
Dollars or $. Dollars in lawful currency of the United States of America.
Domestic Lending Office. Initially, the office of each Bank designated as such
in Schedule 1 hereto; thereafter, such other office of such Bank, if any,
located within the United States that will be making or maintaining Base Rate
Loans.
Drawdown Date. The date on which any Loan is made or is to be made, and the date
on which any Loan which is made prior to the Maturity Date is converted or
combined in accordance with paragraph 4.1.
Eligible Assignee. Any of the following assignees: (i) a commercial bank,
savings and loan association or savings bank organized under the laws of the
United States or any state thereof having total assets in excess of
$250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of business
extends credit of the type evidenced by the Notes and has total assets in excess
of $100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and having total assets
in excess of $250,000,000; provided that such bank is acting through a branch or
agency located in the United States and such bank shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W 8 or W 9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441 1, 1.1441 4 or
1.1441 6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (1)
not subject to Untied States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States or (2) totally exempt from the United States
Federal withholding tax; and (iv) any other financial institution satisfactory
to both the Borrower and the Agent.
Eligible Participant. Any of the following participants: (i) a commercial
bank, savings and loan association or savings bank organized under the laws of
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the United States or any state thereof having total assets in excess of
$250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of business
extends credit of the type evidenced by the Notes and has total assets in excess
of $100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and having total assets
in excess of $250,000,000; provided that such bank is acting through a branch or
agency located in the United States and such bank shall, if legally able to do
so, prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W 8 or W 9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 andany other certificate or statement of
exemption required by Treasury Regulation Section 1.1441 1, 1.1441 4 or 1.1441
6(c) or any subsequent version thereof or successors thereto, properly completed
and duly executed by such entity establishing that such payment is (1) not
subject to Untied States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States or (2) totally exempt from the United States
Federal withholding tax; and (iv) any other financial institution satisfactory
to both the Borrower and the Agent.
Eligible Real Estate. Real Estate:
(a) which is owned in fee by the Borrower;
(b) which is located within the contiguous 48 States of the continental United
States, excluding those States which prescribe a "single-action" or similar rule
limiting the rights of creditors secured by real property, which exclusion shall
apply, without limitation, to the States of California and Washington except to
the extent such exclusion is waived in writing by the Majority Banks with
respect to a specific parcel of Real Estate;
(c) which is utilized principally for offices, offices/service or light
industry;
(d) which is approved by the Majority Banks after the date hereof in their
sole judgment;
(e) as to which all of the representations set forth in paragraph 6 of this
Agreement concerning Mortgaged Property are true and correct; and
(f) as to which the Agent has received all Eligible Real Estate Qualification
Documents, so long as all of such documents remain in full force and effect.
Eligible Real Estate Qualification Documents. With respect to any parcel of
Real Estate of the Borrower proposed to be included in the Collateral, each of
the following:
(a) Security Documents. Such Security Documents relating to such Real Estate as
the Majority Banks shall require, in form and substance satisfactory to the
Agent and the Majority Banks and duly executed and delivered by the respective
parties thereto.
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(a) Enforceability Opinion. The favorable legal opinion of counsel to the
Borrower reasonably acceptable to the Majority Banks qualified to practice in
the State in which such Real Estate is located, addressed to the Banks and in
form and substance satisfactory to the Majority Banks as to the enforceability
of such Security Documents and such other matters as the Majority Banks shall
reasonably request.
(a) Perfection of Liens. Evidence reasonably satisfactory to the Majority Banks
that the Security Documents are effective to create in favor of the Agent a
legal, valid and enforceable first (except for Permitted Liens approved by the
Majority Banks entitled to priority under applicable law) lien and security
interest in such Real Estate and that all filings, recordings, deliveries of
instruments and other actions necessary or desirable to protect and preserve
such liens or security interests have been duly effected.
(a) Survey and Taxes. The Survey of such Real Estate, together with the Surveyor
Certification and evidence of payment of all real estate taxes, assessments and
municipal charges on such Real Estate which on the date of determination are
required to have been paid under paragraph 7.8.
(a) Title Insurance; Title Exception Documents. The Title Policy covering such
Real Estate, including all endorsements thereto, and together with proof of
payment of all fees and premiums for such policy, and true and accurate copies
of all documents listed as exceptions under such policy.
(a) UCC Certification. A certification from the Title Insurance Company or
counsel satisfactory to the Majority Banks that a search of the public records
designated by the Majority Banks disclosed no conditional sales contracts,
security agreements, chattel mortgages, leases of personalty, financing
statements or title retention agreements which affect any property, rights or
interests of the Borrower that are or are intended to be subject to the security
interest, assignments, and mortgage liens created by the Security Documents
relating to such Real Estate except to the extent that the same are discharged
and removed prior to or simultaneously with the inclusion of the Real Estate in
the Collateral.
(a) Management Agreement. A true copy of the Management Agreement, if any,
relating to such Real Estate.
(a) Service Agreements. True copies of all Service Agreements relating to
such Real Estate.
(a) Standard Form Leases. True copies of sample leases and Rent Rolls and
summaries thereof satisfactory to the Majority Banks certified by the Borrower
as accurate and complete as of a recent date.
(a) Certificates of Insurance. Each of (i) a current certificate of insurance as
to the insurance maintained by the Borrower on such Real Estate (including flood
insurance if necessary) from the insurer or an independent insurance broker
dated as of the date of determination, identifying insurers, types of insurance,
insurance limits, and policy terms; (ii) certified copies of all policies
evidencing such insurance (or certificates therefor signed by the insurer or an
agent authorized to bind the insurer); and (iii) such further information and
certificates from the Borrower, its insurers and insurance brokers as the
Majority Banks may reasonably request, all of which shall be in compliance with
the requirements of this Agreement.
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(a) Hazardous Substance Assessments. A hazardous waste site assessment report
concerning Hazardous Substances and asbestos on such Real Estate dated or
updated not more than six (6) months prior to the inclusion of such Real Estate
in the Collateral, from an Environmental Engineer, such report to contain no
qualifications except those that are acceptable to the Majority Banks in their
sole discretion and to otherwise be in form and substance satisfactory to the
Majority Banks.
(a) Certificate of Occupancy. A copy of the certificate(s) of occupancy issued
to the Borrower for such parcel of Real Estate permitting the use and occupancy
of the Building thereon (or a copy of the certificates of occupancy issued for
such parcel of Real Estate and evidence satisfactory to the Majority Banks that
any previously issued certificate(s) of occupancy is not required to be reissued
to the Borrower), or a legal opinion reasonably satisfactory to the Agent that
no certificates of occupancy are necessary to the use and occupancy thereof.
(a) Appraisal. An Appraisal of such Real Estate, in form and substance
satisfactory to the Agent or the Majority Banks as provided in paragraph 5.2 and
dated not more than twelve (12) months prior to the inclusion of such Real
Estate in the Collateral.
(a) Zoning and Land Use Opinion of Counsel. A favorable opinion concerning the
Real Estate addressed to the Agent and dated the date of the inclusion of such
Real Estate in the Collateral, in form and substance satisfactory to the
Majority Banks, from counsel approved by the Majority Banks admitted to practice
in the State in which such parcel is located, as to zoning and land use
compliance, or such other evidence regarding zoning and land use compliance as
the Majority Banks may approve in their reasonable discretion.
(a) Construction Inspector Report. A report or written confirmation from the
Construction Inspector satisfactory in form and content to the Majority Banks,
dated or updated not more than three months prior to the inclusion of such Real
Estate in the Collateral, addressing such matters as the Majority Banks may
reasonably require, including without limitation that the Construction Inspector
has reviewed the plans and specifications or other available materials for all
Buildings on the Real Estate, that the condition of the Buildings is good, that
all Buildings were constructed and completed in a good and workmanlike manner,
that the Buildings satisfy all applicable building, zoning, handicapped access
and Environmental Laws applicable thereto, whether or not the Real Estate and
the Buildings thereon are a conforming use under applicable zoning laws, and
that utilities and public water and sewer service are available at the lot lines
of the Real Estate through dedicated rights of way or through insured perpetual
private easements approved by the Majority Banks and connected directly to the
Building with all necessary permits.
(a) Permit and Legal Compliance Assurances. Evidence satisfactory to the
Majority Banks that all activities being conducted on such Real Estate which
require federal, state or local licenses or permits have been duly licensed and
that such licenses or permits are in full force and effect, and that the Real
Estate, the Buildings and the use and occupancy thereof are in compliance with
all applicable federal, state or local laws, ordinances or regulations.
(a) Operating Statements. Operating statements for such Real Estate in the form
of such statements delivered to the Banks under paragraph 6.4(c) covering each
of the four fiscal quarters ending immediately prior to the addition of such
Mortgaged Property to the Collateral.
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(a) Doing Business Opinion. An opinion, dated the date of the inclusion of such
Real Estate in the Collateral, of legal counsel to the Borrower reasonably
acceptable to the Majority Banks qualified to practice in the State in which
such Real Estate is located to the effect that neither the Agent nor any Bank
shall be required to qualify to do business in such State or any political
subdivision thereof or to become liable to pay any taxes in such State or any
political subdivision thereof solely on account of the receipt of the lien on
such Real Estate securing the Obligation, such opinion to be satisfactory to the
Majority Banks.
(a) Additional Documents. Such other documents, certificates, reports or
assurances as the Majority Banks may reasonably require in their discretion.
Employee Benefit Plan. Any employee benefit plan within the meaning of paragraph
3(3) of ERISA maintained or contributed to by either of the Borrower or any
ERISA Affiliate, other than a Multiemployer Plan.
Environmental Engineer. EMG, Inc. or another firm of independent professional
engineers or other scientists generally recognized as expert in the detection,
analysis and remediation of Hazardous Substances and related environmental
matters and which has been previously approved by the Agent, or if not
previously approved by the Agent, with respect to which the Borrower has
provided to the Agent a copy at such firm's errors and omissions insurance
policy and a reliance letter both in form and substance acceptable to the Agent.
Environmental Laws. See paragraph 6.18(a).
Equity Offering. The issuance and sale by the Borrower of any equity
securities of the Borrower.
ERISA. The Employee Retirement Income Security Act of 1974, as amended and in
effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer with the
Borrower under paragraph 414 of the Code.
ERISA Reportable Event. A reportable event with respect to a Guaranteed Pension
Plan within the meaning of paragraph 4043 of ERISA and the regulations
promulgated thereunder as to which the requirement of notice has not been
waived.
Event of Default. See paragraph 12.1.
Federal Funds Effective Rate. For any day, the rate per annum 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, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
FNBB. As defined in the Preamble.
Funds from Operations. With respect to any Person for any fiscal period, the Net
Income of such Person computed in accordance with generally accepted accounting
principles, excluding financing costs and gains (or losses) from
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debt restructuring and sales of property, plus depreciation and amortization and
other non cash items.
Generally accepted accounting principles. Principles that are (a) consistent
with the principles promulgated or adopted by the Financial Accounting Standards
Board and its predecessors, as in effect from time to time and (b) consistently
applied with past financial statements of the Person adopting the same
principles; provided that a certified public accountant would, insofar as the
use of such accounting principles is pertinent, be in a position to deliver an
unqualified opinion (other than a qualification regarding changes in generally
accepted accounting principles) as to financial statements in which such
principles have been properly applied.
Guaranteed Pension Plan. Any employee pension benefit plan within the meaning of
paragraph 3(2) of ERISA maintained or contributed to by either of the Borrower
or any ERISA Affiliate the benefits of which are guaranteed on termination in
full or in part by the PBGC pursuant to Title IV of ERISA, other than a
Multiemployer Plan.
Hazardous Substances. See paragraph 6.18(b).
HLT Notice Date. See paragraph 4.13.
Indebtedness. All obligations, contingent and otherwise, that in accordance with
generally accepted accounting principles should be classified upon the obligor's
balance sheet as liabilities, or to which reference should be made by footnotes
thereto, but without any double counting, including in any event and whether or
not so classified: (a) all debt and similar monetary obligations, whether direct
or indirect; (b) all liabilities secured by any mortgage, pledge, security
interest, lien, charge or other encumbrance existing on property owned or
acquired subject thereto, whether or not the liability secured thereby shall
have been assumed; and (c) all guarantees, endorsements and other contingent
obligations whether direct or indirect in respect of indebtedness of others,
including any obligation to supply funds to or in any manner to invest directly
or indirectly in a Person, to purchase indebtedness, or to assure the owner of
indebtedness against loss through an agreement to purchase goods, supplies or
services for the purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the obligation to reimburse
the issuer in respect of any letter of credit.
Indemnity Agreement. The Amended and Restated Indemnity Agreement Regarding
Hazardous Materials made by the Borrower in favor of the Agent and the Banks, as
the same may be modified or amended, pursuant to which the Borrower agrees to
indemnify the Agent and the Banks with respect to Hazardous Substances and
Environmental Laws, such Indemnity Agreement to be in form and substance
satisfactory to the Majority Banks.
Interest Payment Date. As to each Loan, the first day of each calendar month
during the term of such Loan.
Interest Period. With respect to each LIBOR Rate Loan (a) initially, the period
commencing on the Drawdown Date of such Loan and ending one, three or six months
thereafter, and (b) thereafter, each period commencing on the day following the
last day of the next preceding Interest Period applicable to such Loan and
ending on the last day of one of the periods set forth above, as selected by the
Borrower in a Conversion Request; provided that all of the
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foregoing provisions relating to Interest Periods are subject to the
following:
(A) if any Interest Period with respect to a LIBOR Rate Loan would otherwise end
on a day that is not a LIBOR Business Day, that Interest Period shall end and
the next Interest Period shall commence on the next preceding or succeeding
LIBOR Business Day as determined conclusively by the Reference Bank in
accordance with the then current bank practice in the London Interbank Market;
(B) if the Borrower shall fail to give notice as provided in paragraph 4.1, the
Borrower shall be deemed to have requested a conversion of the affected LIBOR
Rate Loan to a Base Rate Loan on the last day of the then current Interest
Period with respect thereto; and
(C) no Interest Period relating to any LIBOR Rate Loan shall extend beyond the
Maturity Date.
Interest Rate Contracts. Interest rate swap, collar, cap or similar
agreements providing interest rate protection.
Investments. With respect to any Person, all shares of capital stock, evidences
of Indebtedness and other securities issued by any other Person, all loans,
advances, or extensions of credit to, or contributions to the capital of, any
other Person, all purchases of the securities or business or integral part of
the business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any investment represented
as a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Leases. Leases, licenses and agreements whether written or oral, relating to
the use or occupation of space in or on the Building or on the Real Estate by
persons other than the Borrower.
LIBOR Business Day. Any day on which commercial banks are open for international
business (including dealings in Dollar deposits) in London.
LIBOR Lending Office. Initially, the office of each Bank designated as such in
Schedule 1 hereto; thereafter, such other office of such Bank, if any, that
shall be making or maintaining LIBOR Rate Loans.
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LIBOR Rate. For any Interest Period with respect to a LIBOR Rate Loan, the rate
per annum as determined by the Reference Bank's LIBOR Lending Office to be the
rate (rounded upwards to the nearest 1/16 of one percent) at which Dollar
deposits are offered to prime banks, by such banks in the London Interbank
Market as are selected in good faith by Reference Bank, at approximately 11:00
a.m. London time two LIBOR Business Days prior to the beginning of such Interest
Period for delivery on the first day of such Interest Period for the number of
days comprised therein and in an amount comparable to the amount of the LIBOR
Rate Loan to which such Interest Period applies.
LIBOR Rate Loans. Loans bearing interest calculated by reference to a LIBOR
Rate.
Loan Documents. This Agreement, the Notes, the Security Documents and all other
documents, instruments or agreements now or hereafter executed or delivered by
or on behalf of the Borrower in connection with the Loans.
Loan Request. See paragraph 2.5.
Loans. See paragraph 2.1.
Majority Banks. As of any date, the Bank or Banks whose aggregate Commitment
Percentage is more than sixty six and two thirds percent (66 2/3%); provided,
that, in determining said percentage at any given time, all then existing
Defaulting Banks will be disregarded and excluded and the Commitment Percentages
of the Banks shall be redetermined, for voting purposes only, to exclude the
Commitment Percentages of such Defaulting Banks.
Management Agreements. Agreements, whether written or oral, providing for the
management of the Mortgaged Properties or any of them.
Maturity Date. April 12, 1998, or such earlier date on which the Loans shall
become due and payable pursuant to the terms hereof.
Mortgaged Property or Mortgaged Properties. The Eligible Real Estate owned by
the Borrower which is conveyed to and accepted by the Agent as security for the
Obligations of the Borrower pursuant to the Security Deeds.
Multiemployer Plan. Any multiemployer plan within the meaning of paragraph
3(37) of ERISA maintained or contributed to by either of the Borrower or any
ERISA Affiliate.
Net Income (or Deficit). With respect to any Person (or any asset of any Person)
for any fiscal period, the net income (or deficit) of such Person (or
attributable to such asset), after deduction of all expenses, taxes and other
proper charges, determined in accordance with generally accepted accounting
principles.
Net Offering Proceeds. The gross cash proceeds received by the Borrower as a
result of a Debt Offering or an Equity Offering less customary and reasonable
costs, fees, expenses, underwriting commissions and discounts incurred by the
Borrower in connection therewith.
Non-recourse Indebtedness. Indebtedness of a Person which is secured by one or
more parcels of Real Estate (other than Mortgaged Property) and related personal
property or interests therein and Short-term Investments and is not a general
obligation of such Person, the holder of such Indebtedness having
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recourse solely to the parcels of Real Estate securing such Indebtedness, the
Building and Leases thereon and the rents and profits thereof and the Short-term
Investments securing such Indebtedness.
Notes. See paragraph 2.3.
Notice. See paragraph 19.
Obligations. All indebtedness, obligations and liabilities of the Borrower to
any of the Banks and the Agent, individually or collectively, under this
Agreement or any of the other Loan Documents or in respect of any of the Loans
or the Notes, or other instruments at any time evidencing any of the foregoing,
whether existing on the date of this Agreement or arising or incurred hereafter,
direct or indirect, joint or several, absolute or contingent, matured or
unmatured, liquidated or unliquidated, secured or unsecured, arising by
contract, operation of law or otherwise.
Operating Cash Flow. With respect to any Person (or any asset of any Person) for
any period, an amount equal to the sum of (a) the Net Income of such Person (or
attributable to such asset) for such period plus (b) depreciation and
amortization, interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income minus (c) any extraordinary or
nonrecurring gains included in calculating such Net Income minus (d) the Capital
Expenditure Reserve Amount, all as determined in accordance with generally
accepted accounting principles.
Outstanding. With respect to the Loans, the aggregate unpaid principal
thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by paragraph 4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances permitted
by paragraph 8.2.
Person. Any individual, corporation, partnership, trust, unincorporated
association, business, or other legal entity, and any government or any
governmental agency or political subdivision thereof.
Potential Collateral. Any property of the Borrower which is not at the time
included in the Collateral and which consists of (i) Eligible Real Estate and
(ii) Real Estate which is capable of becoming Eligible Real Estate through the
approval of the Majority Banks and the completion and delivery of Eligible Real
Estate Qualification Documents.
Pro Forma Debt Service Charges. For any period of four consecutive fiscal
quarters the sum of principal and interest which would have been payable during
such period on a loan in the original principal amount equal to the outstanding
principal balance of the Loans as of the date of such determination bearing
interest at a rate per annum equal to the greater of (i) the sum of the then
current annual yield on ten (10) year obligations issued by the United States
Treasury most recently prior to the date of such determination plus two percent
(2%) and (ii) the then applicable interest rate(s) and being payable based on a
20 year mortgage style amortization schedule. Such determination of the Pro
Forma Debt Service Charges by the Agent shall be conclusive and binding absent
manifest error.
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Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Borrower or any of its Subsidiaries.
Record. The grid attached to any Note, or the continuation of such grid, or any
other similar record, including computer records, maintained by any Bank with
respect to any Loan referred to in such Note.
Reference Bank. FNBB.
Register. See paragraph 18.2.
REIT Status. With respect to the Borrower, its status as a real estate
investment trust as defined in paragraph 856(a) of the Code.
Release. See paragraph 6.18(c)(iii).
Rent Roll. A report prepared by the Borrower showing for each unit its type,
occupancy status, lease expiration date, market rent, lease rent and other
information in substantially the form presented to the Banks prior to the date
hereof or in such other form as may have been approved by the Majority Banks,
such approval not to be unreasonably withheld.
SEC. The federal Securities and Exchange Commission.
Security Deeds. The Mortgages, Deeds to Secure Debt and Deeds of Trust from the
Borrower to the Agent for the benefit of the Banks (or to trustees named therein
acting on behalf of the Agent for the benefit of the Banks), as the same may be
modified or amended, pursuant to which the Borrower has conveyed a Mortgaged
Property as security for the Obligations of the Borrower.
Security Documents. The Security Deeds, the Assignments of Rents and Leases, the
Indemnity Agreement, and any further collateral assignments to the Agent for the
benefit of the Banks, including, without limitation, UCC-1 financing statements
executed and delivered in connection therewith.
Service Agreement. Service agreements with third parties, whether written or
oral, relating to the operation, maintenance, security, finance or insurance of
Mortgaged Property.
Short-term Investments. Investments described in subsections (a) through (g),
inclusive, of paragraph 8.3.
State. A state of the United States of America.
Subsidiary. Any corporation, association, partnership, trust, or other business
entity of which the designated parent shall at any time own directly or
indirectly through a Subsidiary or Subsidiaries at least a majority (by number
of votes or controlling interests) of the outstanding Voting Interests.
Successful Initial Public Offering. An offering of common equity of the Borrower
to the public pursuant to a registration statement under the Securities Act of
1933, as amended, and the rules and regulations in effect thereunder, which has
been declared effective by the Securities and Exchange Commission and results in
(i) the common equity being listed on the New York Stock Exchange, the American
Stock Exchange or the NASDAQ National Market System for a per share price of not
less than $12 per share and (ii) net proceeds to the Borrower after underwriting
fees or placement fees, as the case may be, of not less than $50,000,000.
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Survey. An instrument survey of Mortgaged Property prepared by a registered land
surveyor which shall show the location of all buildings, structures, easements
and utility lines on such property, shall be sufficient to remove the standard
survey exception from the Title Policy, shall show that all buildings and
structures are within the lot lines of the Mortgaged Property and shall not show
any encroachments by others (or to the extent any encroachments are shown, such
encroachments shall be acceptable to the Majority Banks in their sole
discretion), shall show rights of way, adjoining sites, establish building lines
and street lines, the distance to, and names of the nearest intersecting streets
and such other details as the Majority Banks may reasonably require; shall show
the zoning district or districts in which the Mortgaged Property is located and
shall show whether or not the Mortgaged Property is located in a flood hazard
district as established by the Federal Emergency Management Agency or any
successor agency or is located in any flood plain, flood hazard or wetland
protection district established under federal, state or local law and shall
otherwise be in form and substance reasonably satisfactory to the Majority
Banks.
Surveyor Certification. With respect to each parcel of Mortgaged Property, a
certificate executed by the surveyor who prepared the Survey with respect
thereto, dated as of a recent date and containing such information relating to
such parcel as the Majority Banks or the Title Insurance Company may reasonably
require, such certificate to be reasonably satisfactory to the Majority Banks in
form and substance.
Title Insurance Company. Chicago Title Insurance Company or another title
insurance company or companies approved by the Majority Banks.
Title Policy. With respect to each parcel of Mortgaged Property, an ALTA
standard form title insurance policy (or, if such form is not available, an
equivalent form of or legally promulgated form of mortgagee title insurance
policy reasonably acceptable to the Majority Banks) issued by a Title Insurance
Company (with such reinsurance or co-insurance as the Majority Banks may
require, any such reinsurance to be with direct access endorsements to the
extent available under applicable law) in such amount as the Majority Banks may
require insuring the priority of the Security Deeds and that the Borrower holds
marketable fee simple title to such parcel, subject only to the encumbrances
permitted by the Security Deed and which shall not contain standard exceptions
for mechanics liens, persons in occupancy (other than tenants as tenants only
under Leases) or matters which would be shown by a survey, shall not insure over
any matter except to the extent that any such affirmative insurance is
acceptable to the Majority Banks in their reasonable discretion, and shall
contain (a) a revolving credit endorsement and (b) such other endorsements and
affirmative insurance as the Majority Banks reasonably may require and is
available in the State in which the Real Estate is located, including but not
limited to (i) a comprehensive endorsement, (ii) a variable rate of interest
endorsement, (iii) a usury endorsement, (iv) a doing business endorsement, (v)
in States where available, an ALTA form 3.1 zoning endorsement, (vi) a "tie in"
endorsement and (vii) a "first loss" endorsement.
Total Commitment. The sum of the Commitments of the Banks, as in effect from
time to time. As of the date of this Agreement, the Total Commitment is
$50,000,000.00, provided that prior to the compliance by the Borrower with the
covenant set forth in paragraph 7.15, the total amount available to be drawn
under the Total Commitment shall be limited to $35,000,000.00.
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate Loan.
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Voting Interests. Stock or similar ownership interests, of any class or classes
(however designated), the holders of which are at the time entitled, as such
holders, (a) to vote for the election of a majority of the directors (or persons
performing similar functions) of the corporation, association, partnership,
trust or other business entity involved, or (b) to control, manage, or conduct
the business of the corporation, partnership, association, trust or other
business entity involved.
0.1 Rules of Interpretation.
(a) A reference to any document or agreement shall include such document or
agreement as amended, modified or supplemented from time to time in accordance
with its terms and the terms of this Agreement.
(a) The singular includes the plural and the plural includes the singular.
(a) A reference to any law includes any amendment or modification to such law.
(a) A reference to any Person includes its permitted successors and permitted
assigns.
(a) Accounting terms not otherwise defined herein have the meanings assigned to
them by generally accepted accounting principles applied on a consistent basis
by the accounting entity to which they refer.
(a) The words "include", "includes" and "including" are not limiting.
(a) The words "approval" and "approved", as the context so determines, means an
approval in writing given to the party seeking approval after full and fair
disclosure to the party giving approval of all material facts necessary in order
to determine whether approval should be granted.
(a) All terms not specifically defined herein or by generally accepted
accounting principles, which terms are defined in the Uniform Commercial Code as
in effect in the State of Illinois, have the meanings assigned to them therein.
(a) Reference to a particular "paragraph", refers to that section of this
Agreement unless otherwise indicated.
(a) The words "herein", "hereof", "hereunder" and words of like import shall
refer to this Agreement as a whole and not to any particular section or
subdivision of this Agreement.
1. THE REVOLVING CREDIT FACILITY.
0.1 Commitment to Lend. Subject to the terms and conditions set forth in this
Agreement, each of the Banks severally agrees to lend to the Borrower (the
"Loans"), and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with paragraph 2.5, such sums as are requested by
the Borrower for the purposes set forth in paragraph 7.11 up to the lesser of
(a) a maximum aggregate principal amount outstanding (after giving effect to all
amounts requested) at any one time equal to such Bank's Commitment and (b) such
Bank's Commitment Percentage of the Borrowing Base; provided, that, in all
events no Default or Event of Default shall have occurred and be continuing; and
provided, further that the outstanding principal amount of the Loans (after
giving effect to all amounts requested)
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shall not at anytime exceed the Total Commitment. The Loans shall be made pro
rata in accordance with each Bank's Commitment Percentage. Each request for a
Loan hereunder shall constitute a representation and warranty by the Borrower
that all of the conditions set forth in paragraph 10 and paragraph 11, in the
case of the initial Loan, and paragraph 11, in the case of all other Loans, have
been satisfied on the date of such request.
0.1 Unused Facility Fee. The Borrower agrees to pay to the Agent for the
accounts of the Banks in accordance with their respective Commitment Percentages
an unused facility fee calculated at the rate of one-fourth of one percent
(1/4%) per annum on the average daily amount by which the aggregate Commitment
exceeds the outstanding principal amount of Loans during each calendar quarter
or portion thereof commencing on the date hereof and ending on the Maturity
Date; provided that until October 1, 1996, for purposes of calculating the
unused facility fee only, the aggregate Commitment shall be deemed to be
$35,000,000. The unused facility fee shall be payable quarterly in arrears on
the first day of each calendar quarter for the immediately preceding calendar
quarter or portion thereof, with a final payment on the Maturity Date.
0.1 Notes. The Loans shall be evidenced by separate promissory notes of the
Borrower in substantially the form of Exhibit A hereto (collectively, the
"Notes"), dated as of the Closing Date and completed with appropriate
insertions. One Note shall be payable to the order of each Bank in the principal
amount equal to such Bank's Commitment or, if less, the outstanding amount of
all Loans made by such Bank, plus interest accrued thereon, as set forth below.
The Borrower irrevocably authorizes each Bank to make or cause to be made, at or
about the time of the Drawdown Date of any Loan or at the time of receipt of any
payment of principal thereof, an appropriate notation on such Bank's Record
reflecting the making of such Loan or (as the case may be) the receipt of such
payment. The outstanding amount of the Loans set forth on such Bank's Record
shall be prima facie evidence of the principal amount thereof owing and unpaid
to such Bank, but the failure to record, or any error in so recording, any such
amount on such Bank's Record shall not limit or otherwise affect the obligations
of the Borrower hereunder or under any Note to make payments of principal of or
interest on any Note when due.
0.1 Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the date on which such Base Rate Loan is
converted to a LIBOR Rate Loan at the per annum rate equal to the Base Rate. (a)
Each LIBOR Rate Loan shall bear interest for the period commencing with the
Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at the rate per annum equal to the sum of the Applicable Margin
plus the LIBOR Rate determined for such Interest Period.
(a) The Borrower promises to pay interest on each Loan to it in arrears on each
Interest Payment Date with respect thereto.
(a) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the other
Type as provided in paragraph 4.1.
0.1 Requests for Loans. The Borrower (i) shall notify the Agent of a potential
request for a Loan as soon as possible but not less than six (6) Business Days
prior to the Borrower's proposed Drawdown Date, and (ii) shall give to the Agent
written notice in the form of Exhibit B hereto (or telephonic notice confirmed
in writing in the form of Exhibit B hereto) of
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each Loan requested hereunder (a "Loan Request") no less than three (3) Business
Days prior to the proposed Drawdown Date. Each such notice shall specify with
respect to the requested Loan the proposed principal amount, Drawdown Date,
Interest Period (if applicable) and Type. Each such notice shall also contain
(i) a statement as to the purpose for which such advance shall be or has been
used (which purpose shall be in accordance with the terms of paragraph 7.11),
(ii) in the case of any advance relating to any Capital Improvement Project,
upon the request of the Agent (A) a statement that such advance will reimburse
the Borrower for or pay costs incurred for work on the applicable Capital
Improvement Project together with such evidence as the Majority Banks may
reasonably require to verify the cost of such work (which evidence may include,
without limitation, invoices and receipts) and that such work is in place or
that stored materials are properly secured (which evidence may include a
satisfactory report from the Construction Inspector), and (B) in the event that
such Capital Improvement Project relates to a Mortgaged Property and if
requested by the Majority Banks, delivery to the Agent of affidavits, lien
waivers or other evidence reasonably satisfactory to the Majority Banks showing
that all materialmen, laborers, subcontractors and any other parties who might
or could claim statutory or common law liens and are furnishing or have
furnished material or labor to the Mortgaged Property have been paid all amounts
due for such labor and materials, and (iii) a certification by the chief
financial or chief accounting officer of the Borrower that the Borrower is and
will be in compliance with all covenants under the Loan Documents after giving
effect to the making of such Loan. Notwithstanding anything in this paragraph
2.5 to the contrary, the Borrower shall be permitted to use the proceeds of a
Loan to reimburse the Borrower for amounts paid from its own funds within the
preceding ninety (90) days for a purpose authorized by the terms of paragraph
7.11. Promptly upon receipt of any such notice, the Agent shall notify each of
the Banks thereof. Except as provided in this paragraph 2.5, each such Loan
Request shall be irrevocable and binding on the Borrower and shall obligate the
Borrower to accept the Loan requested from the Banks on the proposed Drawdown
Date, provided that, in addition to the Borrower's other remedies against any
Bank which fails to advance its proportionate share of a requested Loan, such
Loan Request may be revoked by the Borrower by notice received by the Agent no
later than the Drawdown Date if any Bank fails to advance its proportionate
share of the requested Loan in accordance with the terms of this Agreement,
provided further that the Borrower shall be liable in accordance with the terms
of this Agreement to any Bank which is prepared to advance its proportionate
share of the requested Loan for any costs, expenses or damages actually incurred
by such Bank as a result of the Borrower's election to revoke such Loan Request.
Nothing herein shall prevent the Borrower from seeking recourse against any Bank
that fails to advance its proportionate share of a requested Loan as required by
this Agreement. The Borrower may without cost or penalty revoke a Loan Request
by delivering notice thereof to each of the Banks no later than three (3)
Business Days prior to the Drawdown Date. Each Loan Request shall be (a) for a
Base Rate Loan in a minimum aggregate amount of $1,000,000 or an integral
multiple of $100,000 in excess thereof, or (b) for a LIBOR Rate Loan in a
minimum aggregate amount of $2,000,000 or an integral multiple of $100,000 in
excess thereof; provided, however, that there shall be no more than four (4)
LIBOR Rate Loans outstanding at any one time. In the event that the proceeds
from such Loan have been or are to be used for a purpose other than a Capital
Improvement Project, then the Borrower shall provide to the Agent as soon as
practicable such evidence as the Majority Banks shall reasonably require to
evidence that such funds have been used for such purpose (which evidence may
include, without limitation, a closing statement).
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0.1 Funds for Loans. Not later than 12:00 a.m. (Boston time) on the proposed
Drawdown Date of any Loans, each of the Banks will make available to the Agent,
at the Agent's Head Office, in immediately available funds, the amount of such
Bank's Commitment Percentage of the amount of the requested Loans which may be
disbursed pursuant to paragraph 2.1. Upon receipt from each Bank of such amount,
and upon receipt of the documents required by paragraph 10 and paragraph 11 and
the satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Loans made available to the Agent by the Banks by crediting such amount
to the account of the Borrower maintained at the Agent's Head Office. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Loans, including any additional Loans
that may be requested subject to the terms and conditions hereof to provide
funds to replace those not advanced by the Bank so failing or refusing, provided
that the Borrower may by notice received by the Agent no later than the Drawdown
Date refuse to accept any Loan which is not fully funded in accordance with the
Borrower's Loan Request subject to the terms of paragraph 2.5. In the event of
any such failure or refusal, the Banks not so failing or refusing shall be
entitled to a priority secured position as against the Bank or Banks so failing
or refusing for such Loans as provided in paragraph 12.5.
1. REPAYMENT OF THE LOANS.
0.1 Stated Maturity. The Borrower promises to pay on the Maturity Date and there
shall become absolutely due and payable on the Maturity Date all of the Loans
outstanding on such date, together with any and all accrued and unpaid interest
thereon.
0.1 Mandatory Prepayments. If at any time the aggregate outstanding principal
amount of the Loans exceeds (a) the aggregate Commitment, or (a) the Borrowing
Base for the Loans, then the Borrower shall immediately pay the amount of such
excess to the Agent for the respective accounts of the Banks for application to
such Loans.
0.1 Optional Prepayments. The Borrower shall have the right, at its election, to
prepay the outstanding amount of the applicable Loans, as a whole or in part, at
any time without penalty or premium; provided, that the full or partial
prepayment of the outstanding amount of any LIBOR Rate Loans pursuant to this
paragraph 3.3 may be made only on the last day of the Interest Period relating
thereto except as otherwise required pursuant to paragraph 4.7. The Borrower
shall give the Agent, no later than 10:00 a.m., Boston time, at least five (5)
Business Days' prior written notice of any prepayment pursuant to this paragraph
3.3, in each case specifying the proposed date of payment of Loans and the
principal amount to be paid.
0.1 Partial Prepayments. Each partial prepayment of the Loans under paragraph
3.2(a) and paragraph 3.3 shall be in an integral multiple of $100,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of payment and, after payment of such interest, shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of LIBOR Rate Loans.
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0.1 Effect of Prepayments. Amounts of the Loans prepaid under paragraph 3.2 and
paragraph 3.3 prior to the Maturity Date may be reborrowed as provided in
paragraph 2.
0.1 Proceeds from Debt or Equity Offering. At the option of the Majority Banks,
the Borrower shall cause any Net Offering Proceeds to be paid by the Borrower
(i) to the Agent for the account of the Banks as a prepayment of the Loans to
the Borrower to the extent of the outstanding balance of such Loans or (ii) to
American National Bank and Trust Company of Chicago to pay off its Indebtedness
referred to in item 5 of Schedule 8.1 and to have the liens in favor of American
National Bank and Trust Company of Chicago identified in items 4,6,7 and 9 of
Schedule 8.2 released.
1. CERTAIN GENERAL PROVISIONS.
0.1 Conversion Options.
(a) The Borrower may elect from time to time to convert any of its outstanding
Loans to a Loan of another Type and such Loan shall thereafter bear interest as
a Base Rate Loan or a LIBOR Rate Loan, as applicable; provided that (i) with
respect to any such conversion of a LIBOR Rate Loan to a Base Rate Loan, the
Borrower shall give the Agent at least three (3) Business Days' prior written
notice of such election, and such conversion shall only be made on the last day
of the Interest Period with respect to such LIBOR Rate Loan; (ii) with respect
to any such conversion of a Base Rate Loan to a LIBOR Rate Loan, the Borrower
shall give the Agent at least four (4) LIBOR Business Days' prior written notice
of such election and the Interest Period requested for such Loan, the principal
amount of the Loan so converted shall be in a minimum aggregate amount of
$2,000,000 or an integral multiple of $100,000 in excess thereof and, after
giving effect to the making of such Loan, there shall be no more than four (4)
LIBOR Rate Loans outstanding at any one time; and (iii) no Loan may be converted
into a LIBOR Rate Loan when any Default or Event of Default has occurred and is
continuing. All or any part of the outstanding Loans of any Type may be
converted as provided herein, provided that no partial conversion shall result
in a Base Rate Loan in an aggregate principal amount of less than $1,000,000 or
a LIBOR Rate Loan in an aggregate principal amount of less than $2,000,000 and
that the aggregate principal amount of each Loan shall be in an integral
multiple of $100,000. On the date on which such conversion is being made, each
Bank shall take such action as is necessary to transfer its Commitment
Percentage of such Loans to its Domestic Lending Office or its LIBOR Lending
Office, as the case may be. Each Conversion Request relating to the conversion
of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the Borrower.
(a) Any Loan may be continued as such Type upon the expiration of an Interest
Period with respect thereto by compliance by the Borrower with the terms of
ss.4.1; provided that no LIBOR Rate Loan may be continued as such when any
Default or Event of Default has occurred and is continuing, but shall be
automatically converted to a Base Rate Loan on the last day of the Interest
Period relating thereto ending during the continuance of any Default or Event of
Default.
(a) In the event that the Borrower does not notify the Agent of its election
hereunder with respect to any Loan to it, such Loan shall be automatically
converted to a Base Rate Loan at the end of the applicable Interest Period.
0.1 Commitment and Syndication Fee. The Borrower agrees to pay to FNBB the
additional commitment and syndication fee provided for in the Agreement
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Regarding Fees dated as of March 15, 1996 between the Borrower and FNBB in
connection with the increase of the Total Commitment from $35,000,000 to
$50,000,000.
0.1 Agent's Fee. The Borrower has paid to the Agent, for the Agent's own
account, an annual Agent's fee calculated at the rate, and payable at such times
as are, set forth in the Agreement Regarding Fees referred to in paragraph 4.2.
0.1 Funds for Payments.
(a) All payments of principal, interest, unused facility fees, Agent's fees,
closing fees and any other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts of the Banks
and the Agent, as the case may be, at the Agent's Head Office, not later than
1:00 p.m. (Boston time) on the day when due, in each case in immediately
available funds. The Agent is hereby authorized to charge the accounts of the
Borrower with FNBB, on the dates when the amount thereof shall become due and
payable, with the amounts of the principal of and interest on the Loans and all
fees, charges, expenses and other amounts owing to the Agent and/or the Banks
under the Loan Documents.
(a) All payments by the Borrower hereunder and under any of the other Loan
Documents shall be made without setoff or counterclaim and free and clear of and
without deduction for any taxes, levies, imposts, duties, charges, fees,
deductions, withholdings, compulsory loans, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or any political
subdivision thereof or taxing or other authority therein unless the Borrower is
compelled by law to make such deduction or withholding. If any such obligation
is imposed upon the Borrower with respect to any amount payable by them
hereunder or under any of the other Loan Documents, the Borrower will pay to the
Agent, for the account of the Banks or (as the case may be) the Agent, on the
date on which such amount is due and payable hereunder or under such other Loan
Document, such additional amount in Dollars as shall be necessary to enable the
Banks or the Agent to receive the same net amount which the Banks or the Agent
would have received on such due date had no such obligation been imposed upon
the Borrower. The Borrower will deliver promptly to the Agent certificates or
other valid vouchers for all taxes or other charges deducted from or paid with
respect to payments made by the Borrower hereunder or under such other Loan
Document. FNBB represents and warrants that, to the best of its knowledge, it is
exempt from United States Federal withholding requirements as it applies to
payments to be made by the Borrower to FNBB hereunder.
0.1 Computations. All computations of interest on the Loans and of other fees to
the extent applicable shall be based on a 360-day year and paid for the actual
number of days elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to LIBOR Rate Loans, whenever a payment
hereunder or under any of the other Loan Documents becomes due on a day that is
not a Business Day, the due date for such payment shall be extended to the next
succeeding Business Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the records of the Agent from
time to time shall be considered prima facie evidence of such amount.
0.1 Inability to Determine LIBOR Rate. In the event that, prior to the
commencement of any Interest Period relating to any LIBOR Rate Loan, the Agent
shall reasonably determine that adequate and reasonable methods do not exist
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for ascertaining the LIBOR Rate for such Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower and the Banks) to the Borrower and the Banks. In such
event (a) any Loan Request with respect to LIBOR Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans and
(b) each LIBOR Rate Loan will automatically, on the last day of the then current
Interest Period thereof, become a Base Rate Loan, and the obligations of the
Banks to make LIBOR Rate Loans shall be suspended until the Agent determines
that the circumstances giving rise to such suspension no longer exist, whereupon
the Agent shall so notify the Borrower and the Banks. 0.1 Illegality.
Notwithstanding any other provisions herein, if any present or future law,
regulation, treaty or directive or the interpretation or application thereof
shall make it unlawful, or any central bank or other governmental authority
having jurisdiction over a Bank or its LIBOR Lending Office shall assert that it
is unlawful, for any Bank to make or maintain LIBOR Rate Loans, such Bank shall
forthwith give notice of such circumstances to the Agent and the Borrower and
thereupon (a) the commitment of the Banks to make LIBOR Rate Loans or convert
Loans of another type to LIBOR Rate Loans shall forthwith be suspended and (b)
the LIBOR Rate Loans then outstanding shall be converted automatically to Base
Rate Loans on the last day of each Interest Period applicable to such LIBOR Rate
Loans or within such earlier period as may be required by law.
0.1 Additional Interest. If any LIBOR Rate Loan or any portion thereof is repaid
or is converted to a Base Rate Loan for any reason on a date which is prior to
the last day of the Interest Period applicable to such LIBOR Rate Loan, the
Borrower will pay to the Agent upon the later of fifteen (15) days after demand
or the next scheduled Interest Payment Date for the account of the Banks in
accordance with their respective Commitment Percentages, in addition to any
amounts of interest otherwise payable hereunder, any amounts required to
compensate the Banks for any losses, costs or expenses which may reasonably be
incurred as a result of such payment or conversion, including, without
limitation, an amount equal to daily interest for the unexpired portion of such
Interest Period on the LIBOR Rate Loan or portion thereof so repaid or converted
at a per annum rate equal to the excess, if any, of (a) the interest rate
calculated on the basis of the LIBOR Rate applicable to such LIBOR Rate Loan
minus (b) the yield obtainable by the Agent upon the purchase of debt securities
customarily issued by the Treasury of the United States of America which have a
maturity date most closely approximating the last day of such Interest Period
(it being understood that the purchase of such securities shall not be required
in order for such amounts to be payable).
0.1 Additional Costs, Etc. Notwithstanding anything herein to the contrary, if
any present or future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and legally binding interpretations
thereof by any competent court or by any governmental or other regulatory body
or official with appropriate jurisdiction charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to any Bank or
the Agent by any central bank or other fiscal, monetary or other authority
(whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty, charge, fee,
deduction or withholding of any nature with respect to this Agreement, the other
Loan Documents, such Bank's Commitment or the Loans (other than taxes based upon
or measured by the income or profits of such Bank or the Agent), or
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(a) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Bank of the principal of or the interest
on any Loans or any other amounts payable to any Bank under this Agreement or
the other Loan Documents, or
(a) impose or increase or render applicable any special deposit, reserve,
assessment, liquidity, capital adequacy or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or commitments of an office of any Bank, or
(a) impose on any Bank or the Agent any other conditions or requirements with
respect to this Agreement, the other Loan Documents, the Loans, such Bank's
Commitment, or any class of loans or commitments of which any of the Loans or
such Bank's Commitment forms a part; and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing, renewing,
extending or maintaining any of the Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other amount payable to such
Bank or the Agent hereunder on account of such Bank's Commitment or any of the
Loans, or
(iii) to require such Bank or the Agent to make any payment or to forego any
interest or other sum payable hereunder, the amount of which payment or foregone
interest or other sum is calculated by reference to the gross amount of any sum
receivable or deemed received by such Bank or the Agent from the Borrower
hereunder, then, and in each such case, the Borrower will, upon the later of
fifteen (15) days after demand made by such Bank or (as the case may be) the
Agent or the next scheduled Interest Payment Date at any time and from time to
time and as often as the occasion therefor may arise, pay to such Bank or the
Agent such additional amounts as such Bank or the Agent shall determine in good
faith to be sufficient to compensate such Bank or the Agent for such additional
cost, reduction, payment or foregone interest or other sum. Each Bank and the
Agent in determining such amounts may use any reasonable averaging and
attribution methods, generally applied by such Bank or the Agent.
0.1 Capital Adequacy. If after the date hereof any Bank determines that (a) the
adoption of or change in any law, rule, regulation or guideline regarding
capital requirements for banks or bank holding companies or any change in the
interpretation or application thereof by any governmental authority charged with
the administration thereof, or (b) compliance by such Bank or its parent bank
holding company with any guideline, request or directive of any such entity
regarding capital adequacy (whether or not having the force of law), has the
effect of reducing the return on such Bank's or such holding company's capital
as a consequence of such Bank's commitment to make Loans hereunder to a level
below that which such Bank or holding company could have achieved but for such
adoption, change or compliance (taking into consideration such Bank's or such
holding company's then existing policies with respect to capital adequacy and
assuming the full utilization of such entity's capital) by any amount deemed by
such Bank to be material, then such Bank may notify the Borrower thereof. The
Borrower agrees to pay to such Bank the amount of such reduction in the return
on capital upon the later of fifteen (15) days after such reduction is
determined or the next scheduled Interest Payment Date, upon presentation by
such Bank of a statement of the amount setting for the Bank's calculation
thereof. In determining such amount, such Bank may use any reasonable averaging
and attribution methods.
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0.1 Indemnity of Borrower. The Borrower agrees to indemnify each Bank and to
hold each Bank harmless from and against any loss, cost or expense that such
Bank may sustain or incur as a consequence of (a) default by the Borrower in
payment of the principal amount of or any interest on any LIBOR Rate Loans as
and when due and payable, including any such loss or expense arising from
interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its LIBOR Rate Loans, or (b) default by the Borrower in making
a borrowing or conversion after the Borrower has given (or is deemed to have
given) a Loan Request or a Conversion Request.
0.1 Interest on Overdue Amounts; Late Charge. Overdue principal and (to the
extent permitted by applicable law) interest on the Loans and all other overdue
amounts payable hereunder or under any of the other Loan Documents shall bear
interest payable on demand at a rate per annum equal to five percent (5.0%)
above the Base Rate until such amount shall be paid in full (after as well as
before judgment). In addition, the Borrower shall pay a late charge equal to
four percent (4.0%) of any amount of interest and/or principal payable on the
Loans or any other amounts payable hereunder or under the Loan Documents, which
is not paid by the Borrower within ten days of the date when due.
0.1 HLT Classification. The Banks acknowledge that as of the date hereof neither
the Commitments nor the Loans are classified as "highly leveraged transactions".
Notwithstanding the foregoing, if after the date hereof, the Agent determines,
or is advised by any Bank that such Bank has determined or has received notice
from any governmental authority, central bank or comparable agency having
jurisdiction over such Bank, that any of the Commitments or Loans are classified
as a "highly leveraged transaction" (an "HLT Classification") pursuant to any
existing regulations regarding "highly leveraged transactions" or any
modification, amendment or interpretation thereof, or the adoption of new
regulations regarding "highly leveraged transactions" after the date hereof by
any governmental authority, central bank or comparable agency, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the Banks
(which date is hereafter referred to as the "HLT Notice Date"). The Agent, the
Banks and the Borrower shall thereupon commence negotiations in good faith to
agree on the extent to which fees, interest rates and/or margins hereunder
should be increased so as to reflect such HLT Classification. If the Borrower
and the Majority Banks agree on the amount of such increase or increases, this
Agreement shall be promptly amended to give effect to such increase or
increases. If the Borrower and the Majority Banks fail to so agree and the
Borrower has failed to refinance the Loans within 90 days after the HLT Notice
Date, then the Agent shall, if so requested by the Majority Banks, by notice to
the Borrower terminate the Commitments and accelerate the maturity date of the
Loans and the Loans shall become due and payable in full on the date specified
in such notice, which date shall be not earlier than 180 days after the HLT
Notice Date. The Agent and the Banks acknowledge that an HLT Classification is
not a Default or an Event of Default.
0.1 Certificate. A certificate setting forth any amounts payable pursuant to
paragraph 4.8, paragraph 4.9, paragraph 4.10, paragraph 4.11, paragraph 4.12 or
paragraph 4.13 and a brief explanation of such amounts which are due, submitted
by any Bank or the Agent to the Borrower, shall be conclusive in the absence of
manifest error.
0.1 Limitation on Interest. Notwithstanding anything in this Agreement to
the contrary, all agreements between the Borrower and the Banks and the Agent,
whether now existing or hereafter arising and whether written or oral, are
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hereby limited so that in no contingency, whether by reason of acceleration of
the maturity of any of the Obligations or otherwise, shall the interest
contracted for, charged or received by the Banks exceed the maximum amount
permissible under applicable law. If, from any circumstance whatsoever, interest
would otherwise be payable to the Banks in excess of the maximum lawful amount,
the interest payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Banks shall
ever receive anything of value deemed interest by applicable law in excess of
the maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations of the
Borrower and to the payment of interest or, if such excessive interest exceeds
the unpaid balance of principal of the Obligations of the Borrower, such excess
shall be refunded to the Borrower. All interest paid or agreed to be paid to the
Banks shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations of the Borrower (including the period of any
renewal or extension thereof) so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law. This section
shall control all agreements between the Borrower and the Banks and the Agent.
0.1 Substitution of a Bank. If any Bank (the "Affected Bank") has demanded
compensation or given notice of its intention to demand compensation pursuant to
paragraph 4.7, paragraph 4.9 or paragraph 4.10, and the circumstance triggering
such demand or intention to demand is not applicable to all of the Banks, the
Borrower shall have the right, with the assistance of the Agent, to seek one or
more mutually satisfactory substitute banks or financial institutions (which may
be one or more of the Banks) to replace such Affected Bank, subject to the
payment to the Agent of an appropriate fee to be agreed upon for the assistance
to be provided by the Agent.
1. COLLATERAL SECURITY.
0.1 Collateral. The Obligations of the Borrower shall be secured by (i) a
perfected first priority lien or security title to be held by the Agent for the
benefit of the Banks in the Mortgaged Property of the Borrower, pursuant to the
terms of the Security Deeds, (ii) a perfected first priority security interest
to be held by the Agent for the benefit of the Banks in the Leases pursuant to
the Assignments of Rents and Leases from the Borrower and (iii) the Indemnity
Agreement.
0.1 Appraisals.
(a) The Agent on behalf of the Banks shall require Appraisals of each of the
Mortgaged Properties once every five (5) years, which will be ordered by the
Agent and reviewed and approved by the appraisal department of the Agent, or, if
the Agent's appraisal department has determined that the value of any Mortgaged
Property is more than five percent (5%) different from the value for such
Mortgaged Property as set forth in the Appraisal delivered to the Agent by the
Borrower, by the appraisal departments of the Majority Banks, in order to
determine the current Appraised Value and Borrowing Base of the Mortgaged
Property, and the Borrower shall pay to the Agent on demand all reasonable costs
of all such Appraisals relating to the Mortgaged Property of the Borrower;
provided, however, that so long as (i) no Default or Event of Default shall have
occurred and be continuing, (ii) regulatory requirements of any Bank generally
applicable to real estate loans of the category made under this Agreement as
reasonably interpreted by such Bank shall not require more frequent Appraisals
and (iii) there has been no material change in the market
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for the leasing of any of the Mortgaged Properties as reasonably determined by
the Agent, the Borrower shall not be required to pay for Appraisals for a
particular Mortgaged Property more often than once in any five (5) year period,
with the result that unless any such condition shall occur the first Appraisals
of a Mortgaged Property for which the Borrower shall be financially responsible
shall not be required prior to the date which is five (5) years from the date of
the Appraisal for such Mortgaged Property delivered to the Agent pursuant to
this Agreement. Notwithstanding the foregoing provisions, however, in the event
of a material change of the type referred to in clause (iii), the Borrower shall
not be required to pay for Appraisals of the affected Mortgaged Property or
Mortgaged Properties more often than once in any 12 month period.
(a) Notwithstanding the provisions of paragraph 5.2(a), the Agent may, for the
purpose of determining the current Appraised Value and Borrowing Base of the
applicable Mortgaged Properties, perform annual internal studies updating and
revising prior Appraisals with respect to the Mortgaged Properties or such
portion thereof as the Agent shall determine at any time following (i) the
occurrence of an event or condition which, in the reasonable judgment of the
Agent, constitutes a material adverse change with respect to a Mortgaged
Property or presents a reasonable likelihood that such a change shall occur in
the future or (ii) a condemnation of or uninsured casualty to a Mortgaged
Property (provided that any such Appraisal as a result of an event or condition
described in clause (i) or (ii) shall be limited to the affected Mortgaged
Property). The expense of such Appraisals and updates performed pursuant to this
paragraph 5.2(b) shall be borne by the Borrower, provided that the Borrower
shall not be required to pay for any update pursuant to paragraph 5.2(b)(i) more
often than once in any twelve (12) month period.
(a) In the event that the Agent shall advise the Borrower, on the basis of any
Appraisal or update pursuant to paragraph 5.2, that the Borrower's Borrowing
Base is insufficient to comply with the requirements of paragraph 9.1, then
until such Borrowing Base shall be restored to compliance with paragraph 9.1 the
Banks shall not be required to make advances under paragraph 2.1.
0.1 Release of Collateral. Upon termination of this Agreement and the Commitment
of the Banks to make Loans hereunder and the payment in full of all of the
Obligations, the Agent, on behalf of the Banks, shall release the Collateral and
shall execute such instruments of release as the Borrower and its counsel may
reasonably request. In addition, Collateral may be released as provided in
paragraph 8.8.
0.1 Substitution of Mortgaged Property. Any requested substitution by the
Borrower of any Real Estate for any Mortgaged Property shall require the consent
of the Majority Banks and shall require the completion and delivery to the
Agent, for the benefit of the Banks, of the Eligible Real Estate Qualification
Documents and the payment to the Agent, for the benefit of the Banks, of a
substitution fee of $5,000, of which BOA shall be entitled to $2,000.
1. REPRESENTATIONS AND WARRANTIES.
The Borrower represents and warrants to the Agent and the Banks as follows.
0.1 Corporate Authority, Etc.
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(a) Incorporation; Good Standing. The Borrower is a Maryland corporation duly
organized pursuant to its Articles of Incorporation and amendments thereto filed
with the Secretary of the State of Maryland and is validly existing and in good
standing under the laws of Maryland. The Borrower (i) has all requisite power to
own its respective property and conduct its respective business as now conducted
and as presently contemplated, and (ii) is in good standing as a foreign entity
and is duly authorized to do business in the jurisdictions where the Mortgaged
Property of the Borrower is located and in each other jurisdiction where a
failure to be so qualified in such other jurisdiction could have a materially
adverse effect on the business, assets or financial condition of such person.
The Borrower is a real estate investment trust in full compliance with and
entitled to the benefits of paragraph 856 of the Code.
(a) Subsidiaries. Each of the Subsidiaries of the Borrower (i) is a corporation,
limited partnership or trust duly organized under the laws of its State of
organization and is validly existing and in good standing under the laws
thereof, (ii) has all requisite power to own its property and conduct its
business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where
Mortgaged Property held by it is located and in each other jurisdiction where a
failure to be so qualified could have a materially adverse effect on the
business, assets or financial condition of the Borrower or such Subsidiary.
(a) Authorization. The execution, delivery and performance of this Agreement and
the other Loan Documents to which the Borrower is or is to become a party and
the transactions contemplated hereby and thereby (i) are within the authority of
such Person, (ii) have been duly authorized by all necessary proceedings on the
part of such Person, (iii) do not and will not conflict with or result in any
breach or contravention of any provision of law, statute, rule or regulation to
which such Person is subject or any judgment, order, writ, injunction, license
or permit applicable to such Person, (iv) do not and will not conflict with or
constitute a default (whether with the passage of time or the giving of notice,
or both) under any provision of the articles of incorporation, partnership
agreement, declaration of trust or other charter documents or bylaws of, or any
agreement or other instrument binding upon, such Person or any of its
properties, and (v) do not and will not result in or require the imposition of
any lien or other encumbrance on any of the properties, assets or rights of such
Person.
(a) Enforceability. The execution and delivery of this Agreement and the other
Loan Documents to which the Borrower is or is to become a party are valid and
legally binding obligations of such Person enforceable in accordance with the
respective terms and provisions hereof and thereof, except as enforceability is
limited by bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors' rights and
except to the extent that availability of the remedy of specific performance or
injunctive relief is subject to the discretion of the court before which any
proceeding therefor may be brought.
0.1 Governmental Approvals. The execution, delivery and performance of this
Agreement and the other Loan Documents to which the Borrower is or is to become
a party and the transactions contemplated hereby and thereby do not require the
approval or consent of, or filing with, any governmental agency or authority
other than those already obtained and the filing of the Security Documents in
the appropriate records office with respect thereto.
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0.1 Title to Properties: Lease. The Borrower and its Subsidiaries own all of the
assets reflected in the consolidated balance sheet of the Borrower as at the
Balance Sheet Date or acquired since that date (except property and assets sold
or otherwise disposed of in the ordinary course of business since that date),
subject to no rights of others, including any mortgages, leases, conditional
sales agreements, title retention agreements, liens or other encumbrances except
Permitted Liens.
0.1 Financial Statements. The Borrower has furnished to each of the Banks: (a)
the consolidated balance sheet of the Borrower and its Subsidiaries as of the
Balance Sheet Date, (b) an unaudited statement of Operating Cash Flow for each
of the Mortgaged Properties for the previous three (3) fiscal years ended
December 31, 1995, to the extent available, satisfactory in form to the Majority
Banks and certified by the chief financial or accounting officer of the Borrower
as fairly presenting the operating income for such parcels for such periods,
provided that such certification need only be made with respect to any Mortgaged
Property for the period such Mortgaged Property has been owned and operated by
the Borrower, if such period is less than three (3) fiscal years, and (c)
certain other financial information relating to the Borrower and the Real
Estate. Such balance sheet and statements have been prepared in accordance with
generally accepted accounting principles and fairly present the financial
condition of the Borrower and its Subsidiaries as of such dates and the results
of the operations of the Borrower and the Mortgaged Properties for such periods.
There are no liabilities, contingent or otherwise, of the Borrower or any of its
Subsidiaries involving material amounts not disclosed in said financial
statements and the related notes thereto.
0.1 No Material Changes. Since the Balance Sheet Date, there has occurred no
materially adverse change in the financial condition or business of the Borrower
and its Subsidiaries taken as a whole as shown on or reflected in the
consolidated balance sheet of the Borrower as of the Balance Sheet Date, or its
consolidated statement of income or cash flows for the fiscal year then ended,
other than changes in the ordinary course of business that have not had any
materially adverse effect either individually or in the aggregate on the
business or financial condition of such Person.
0.1 Franchises, Patents, Copyrights, Etc. The Borrower and its Subsidiaries
possess all franchises, patents, copyrights, trademarks, trade names,
servicemarks, licenses and permits, and rights in respect of the foregoing,
adequate for the conduct of their business substantially as now conducted
without known conflict with any rights of others.
0.1 Litigation. There are no actions, suits, proceedings or investigations of
any kind pending or to the knowledge of such person threatened in writing
against the Borrower or any of its Subsidiaries before any court, tribunal or
administrative agency or board that, if adversely determined, might, either in
any case or in the aggregate, materially adversely affect the properties,
assets, financial condition or business of such Person or materially impair the
right of such Person to carry on business substantially as now conducted by it,
or result in any liability not adequately covered by insurance, or for which
adequate reserves are not maintained on the balance sheet of such Person, or
which question the validity of this Agreement or any of the other Loan
Documents, any action taken or to be taken pursuant hereto or thereto or any
lien or security interest created or intended to be created pursuant hereto or
thereto, or which will adversely affect the ability of the Borrower to pay and
perform the Obligations in the manner contemplated by this Agreement and the
other Loan Documents.
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0.1 No Materially Adverse Contracts, Etc. Neither the Borrower nor any of its
Subsidiaries is subject to any charter, corporate or other legal restriction, or
any judgment, decree, order, rule or regulation that has or is expected in the
future to have a materially adverse effect on the business, assets or financial
condition of such Person. Neither the Borrower nor any of its Subsidiaries is a
party to any contract or agreement that has or is expected, in the judgment of
the partners or officers of such Person, to have any materially adverse effect
on the business of any of them.
0.1 Compliance with Other Instruments, Laws, Etc. Neither the Borrower nor any
of its Subsidiaries is in violation of any provision of its charter or other
organizational documents, bylaws, or any agreement or instrument to which it may
be subject or by which it or any of its properties may be bound or any decree,
order, judgment, statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result in the imposition of substantial penalties
or materially and adversely affect the financial condition, properties or
business of such Person.
0.1 Tax Status. The Borrower and each of its Subsidiaries (a) has made or filed
all federal and state income and all other tax returns, reports and declarations
required by any jurisdiction to which it is subject, (b) has paid all taxes and
other governmental assessments and charges shown or determined to be due on such
returns, reports and declarations, except those being contested in good faith
and by appropriate proceedings and (c) has set aside on its books provisions
reasonably adequate for the payment of all taxes for periods subsequent to the
periods to which such returns, reports or declarations apply. There are no
unpaid taxes in any material amount claimed to be due by the taxing authority of
any jurisdiction, and the partners or officers of such Person know of no basis
for any such claim.
0.1 No Event of Default. No Default or Event of Default has occurred and is
continuing.
0.1 Holding Company and Investment Company Acts. 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", as such terms are defined in
the Public Utility Holding Company Act of 1935; nor is any of them an
"investment company", or an "affiliated company" or a "principal underwriter" of
an "investment company", as such terms are defined in the Investment Company Act
of 1940.
0.1 Absence of UCC Financing Statements, Etc. Except with respect to Permitted
Liens, there is no financing statement, security agreement, chattel mortgage,
real estate mortgage or other document filed or recorded with any filing
records, registry, or other public office, that purports to cover, affect or
give notice of any present or possible future lien on, or security interest or
security title in, any property of the Borrower or its Subsidiaries or rights
thereunder.
0.1 Setoff, Etc. The Collateral and the rights of the Agent and the Banks with
respect to the Collateral are not subject to any setoff, claims, withholdings or
other defenses. The Borrower is the owner of the Collateral free from any lien,
security interest, encumbrance or other claim or demand, except those
encumbrances permitted in the Security Deeds.
0.1 Certain Transactions. Except as set forth on Schedule 6.15, none of the
officers, trustees, directors, or employees of the Borrower or any of its
Subsidiaries is a party to any transaction with either or both of the Borrower
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or any of its Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other arrangement providing for
the furnishing of services to or by, providing for rental of real or personal
property to or from, or otherwise requiring payments to or from any officer,
trustee, director or such employee or, to the knowledge of the Borrower, any
corporation, partnership, trust or other entity in which any officer, trustee,
director, or any such employee has a substantial interest or is an officer,
director, trustee or partner.
0.1 Employee Benefit Plans. Neither the Borrower nor any ERISA Affiliate
maintains or contributes to any Employee Benefit Plan, Multiemployer Plan or
Guaranteed Pension Plan; provided, however, that nothing hereon shall prohibit
the Borrower or any of its Subsidiaries from maintaining or contributing to an
Employee Benefit Plan, Multiemployer Plan or Guaranteed Pension Plan so long as
the Borrower or its Subsidiary does so in compliance with all applicable laws.
0.1 Regulations U and X. No portion of any Loan is to be used for the purpose of
purchasing or carrying any "margin security" or "margin stock" as such terms are
used in Regulations U and X of the Board of Governors of the Federal Reserve
System, 12 C.F.R. Parts 221 and 224.
0.1 Environmental Compliance. The Borrower has taken all commercially reasonable
steps to investigate the past and present conditions and usage of the Real
Estate and the operations conducted thereon and, based upon such investigation,
makes the following representations and warranties.
(a) With respect to the Mortgaged Properties, and to the best of the Borrower's
knowledge with respect to any other Real Estate, neither the Borrower nor its
Subsidiaries or any operator of the Real Estate, or any operations thereon is in
violation, or alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including without
limitation, those arising under the Resource Conservation and Recovery Act
("RCRA"), the Comprehensive Environmental Response, Compensation and Liability
Act of 1980 as amended ("CERCLA"), the Superfund Amendments and Reauthorization
Act of 1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air Act,
the Toxic Substances Control Act, or any state or local statute, regulation,
ordinance, order or decree relating to the environment (hereinafter
"Environmental Laws"), which violation involves any of the Mortgaged Properties
or involves other Real Estate and would have a material adverse effect on the
environment or the business, assets or financial condition of the Borrower or
any of its Subsidiaries.
(a) Neither the Borrower nor any of its Subsidiaries has received notice from
any third party including, without limitation, any federal, state or local
governmental authority, (i) that it has been identified by the United States
Environmental Protection Agency ("EPA") as a potentially responsible party under
CERCLA with respect to a site listed on the National Priorities List, 40 C.F.R.
Part 300 Appendix B (1986); (ii) that any hazardous waste, as defined by 42
U.S.C. paragraph 9601(5), any hazardous substances as defined by 42 U.S.C.
paragraph 9601(14), any pollutant or contaminant as defined by 42 U.S.C.
paragraph 9601(33) or any toxic substances, oil or hazardous materials or other
chemicals or substances regulated by any Environmental Laws ("Hazardous
Substances") which it has generated, transported or disposed of have been found
at any site at which a federal, state or local agency or other third party has
conducted or has ordered that either the Borrower or any of its Subsidiaries
conduct a remedial investigation, removal or other response action pursuant to
any Environmental Law; or (iii) that it is or shall be a
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named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
(a) With respect to the Mortgaged Properties, and to the best of the Borrower's
knowledge with respect to any other Real Estate, except as specifically set
forth in the written environmental site assessment reports of EMG, Inc. provided
to the Agent on or before the date hereof or, in the case of Real Estate
acquired after the date hereof, the environmental site assessment reports with
respect thereto provided to the Agent under paragraph 7.4(h): (i) no portion of
the Real Estate has been used for the handling, processing, storage or disposal
of Hazardous Substances except in accordance with applicable Environmental Laws,
and no underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Mortgaged Property; (ii) in the
course of any activities conducted by either the Borrower, its Subsidiaries or
the operators of its properties, no Hazardous Substances have been generated or
are being used on the Real Estate except in the ordinary course of business and
in accordance with applicable Environmental Laws; (iii) there has been no past
or present releasing, spilling, leaking, pumping, pouring, emitting, emptying,
discharging, injecting, escaping, disposing or dumping (a "Release") or
threatened Release of Hazardous Substances on, upon, into or from any of the
Mortgaged Properties, or, to the best of the Borrower's knowledge, on, upon,
into or from the other properties of either the Borrower or its Subsidiaries,
which Release would have a material adverse effect on the value of any of the
Real Estate or adjacent properties or the environment; (iv) to the best of the
Borrower's knowledge, there have been no Releases on, upon, from or into any
real property in the vicinity of any of the Real Estate which, through soil or
groundwater contamination, may have come to be located on, and which would have
a material adverse effect on the value of, the Real Estate; and (v) any
Hazardous Substances that have been generated on any of the Real Estate have
been transported off-site only by carriers having an identification number
issued by the EPA or approved by a state or local environmental regulatory
authority having jurisdiction regarding the transportation of such substance and
treated or disposed of only by treatment or disposal facilities maintaining
valid permits as required under all applicable Environmental Laws, which
transporters and facilities have been and are, to the best of the Borrower's
knowledge, operating in compliance with such permits and applicable
Environmental Laws.
(a) Neither the Borrower, its Subsidiaries, the Mortgaged Properties nor any
other Real Estate is subject to any applicable Environmental Law requiring the
performance of Hazardous Substances site assessments, or the removal or
remediation of Hazardous Substances, or the giving of notice to any governmental
agency or the recording or delivery to other Persons of an environmental
disclosure document or statement by virtue of the transactions set forth herein
and contemplated hereby, or as a condition to the recording of the Security
Deeds or to the effectiveness of any other transactions contemplated hereby.
0.1 Subsidiaries. Schedule 6.19 sets forth all of the Subsidiaries of the
Borrower. The form and jurisdiction of organization of each of the Subsidiaries,
and the Borrower's ownership interest therein, is set forth in said Schedule
6.19.
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0.1 Leases. The Borrower has delivered to the Agent true copies of the forms of
the Leases used by the Borrower at the Mortgaged Properties as of the date
hereof.
0.1 Loan Documents. All of the representations and warranties made by or on
behalf of the Borrower and its Subsidiaries in this Agreement and the other Loan
Documents or any document or instrument delivered to the Agent or the Banks
pursuant to or in connection with any of such Loan Documents are true and
correct in all material respects, and the Borrower has not failed to disclose
such information as is necessary to make such representations and warranties not
misleading.
0.1 Mortgaged Property. The Borrower makes the following representations and
warranties concerning each Mortgaged Property:
(a) Off-Site Utilities. All water, sewer, electric, gas, telephone and other
utilities necessary for the use and operation of the Mortgaged Property are
installed to the property lines of the Mortgaged Property through dedicated
public rights of way or through perpetual private easements approved by the
Majority Banks with respect to which the applicable Security Deed creates a
valid and enforceable first lien and, except in the case of drainage facilities,
are connected to the Building located thereon with valid permits and are
adequate to service the Building in compliance with applicable law.
(a) Access, Etc. The streets abutting the Mortgaged Property are dedicated and
accepted public roads, to which the Mortgaged Property has direct access by
trucks and other motor vehicles and by foot, or are perpetual private ways (with
direct access by trucks and other motor vehicles and by foot to public roads) to
which the Mortgaged Property has direct access approved by the Majority Banks
and with respect to which the applicable Security Deed creates a valid and
enforceable first lien. All private ways providing access to the Mortgaged
Property are zoned in a manner which will permit access to the Building over
such ways by trucks and other commercial and industrial vehicles.
(a) Independent Building. The Building is fully independent in all respects
including, without limitation, in respect of structural integrity, heating,
ventilating and air conditioning, plumbing, mechanical and other operating and
mechanical systems, and electrical, sanitation and water systems, all of which
are connected directly to off-site utilities located in public streets or ways
or through insured perpetual private easements approved by the Majority Banks.
The Building is located on a lot or lots which is or are separately assessed for
purposes of real estate tax assessment and payment. The Building, all Building
Service Equipment and all paved or landscaped areas related to or used in
connection with the Building are located wholly within the perimeter lines of
the lot or lots on which the Mortgaged Property is located, except as may be
specifically shown on the Survey for such Mortgaged Property.
(a) Condition of Building; No Asbestos. The Building is structurally sound, in
good repair and free of defects in materials and workmanship. All major building
systems located within the Building, including without limitation heating,
ventilating and air conditioning, electrical, sprinkler, plumbing or other
mechanical systems, are in good working order and condition. No asbestos is
located in or on the Building, except for nonfriable asbestos or contained
friable asbestos which is being monitored and/or remediated in accordance with
the recommendations of an Environmental Engineer.
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(a) Building Compliance with Law. The Building as presently constructed, used,
occupied and operated does not violate any applicable federal or state law or
governmental regulation, or any local ordinance, order or regulation, including
but not limited to laws, regulations, or ordinances relating to zoning, building
use and occupancy, subdivision control, fire protection, health, sanitation,
safety, handicapped access, historic preservation and protection, tidelands,
wetlands, flood control and Environmental Laws. The Building complies with
applicable zoning laws and regulations and is not a so-called non-conforming
use. The zoning laws permit use of the Building for its current use. There is
such number of parking spaces on the lot or lots on which the Mortgaged Property
is located as is adequate under the zoning laws and regulations to permit use of
the Building for its current use except as previously disclosed to the Agent in
writing. Each Mortgaged Property constitutes a separate parcel which has been
properly subdivided in accordance with all applicable state and local laws,
regulations and ordinances to the extent required thereby, and neither the
execution and delivery of the Security Deeds nor the exercise of any remedies
thereunder by Agent shall violate any such law or regulation relating to the
subdivision of real property.
(a) No Required Mortgaged Property Consents, Permits, Etc. The Borrower has not
received any notice of, and has no knowledge of, any approvals, consents,
licenses, permits, utility installations and connections (including, without
limitation, drainage facilities), curb cuts and street openings, required by
applicable laws, rules, ordinances or regulations or any agreement affecting the
Mortgaged Property for the maintenance, operation, servicing and use of the
Mortgaged Property or the Building for its current use which have not been
granted, effected, or performed and completed (as the case may be), or any fees
or charges therefor which have not been fully paid, or which are no longer in
full force and effect. No such approvals, consents, permits or licenses
(including, without limitation, any railway siding agreements) will terminate,
or become void or voidable or terminable on any foreclosure sale of the
Mortgaged Property pursuant to the Security Deed. To the best knowledge of the
Borrower, there are no outstanding notices, suits, orders, decrees or judgments
relating to zoning, building use and occupancy, fire, health, sanitation or
other violations affecting, against, or with respect to, the Mortgaged Property
or any part thereof.
(a) Insurance. The Borrower has not received any notice from any insurer or its
agent requiring performance of any work with respect to the Mortgaged Property
or canceling or threatening to cancel any policy of insurance, and the Mortgaged
Property complies with the requirements of all of the Borrower's insurance
carriers.
(a) Real Property Taxes; Special Assessments. There are no unpaid or outstanding
real estate or other taxes or assessments on or against the Mortgaged Property
or any part thereof which are payable by the Borrower (except only real estate
or other taxes or assessments, that are not yet due and payable). The Borrower
has delivered to the Agent true and correct copies of real estate tax bills for
the Mortgaged Property for the past one fiscal tax year and, if available, for
the past three fiscal years. No abatement proceedings are pending with reference
to any real estate taxes assessed against the Mortgaged Property, other than
with respect to taxes which have been paid under protest and which are being
contested in good faith. There are no betterment assessments or other special
assessments presently pending with respect to any portion of the Mortgaged
Property, and the Borrower has not received any notice of any such special
assessment being contemplated.
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(a) Historic Status. The Building is not a historic structure or landmark and
neither the Building nor the Mortgaged Property is located within any historic
district pursuant to any federal, state or local law or governmental regulation.
(a) Eminent Domain; Casualty. There are no pending eminent domain proceedings
against the Mortgaged Property or any part thereof, and, to the knowledge of the
Borrower, no such proceedings are presently threatened or contemplated by any
taking authority. Neither the Mortgaged Property, the Building nor any part
thereof is now damaged or injured as a result of any fire, explosion, accident,
flood or other casualty.
(a) Leases. An accurate and complete Rent Roll and summary thereof in a form
reasonably satisfactory to the Majority Banks as of the date of inclusion of the
Mortgaged Property in the Collateral (or such other recent date as may be
acceptable to the Agent) with respect to all Leases of any portion of the
Mortgaged Property has been provided to the Agent. The Leases reflected on such
Rent Roll constitute as of the date thereof the sole agreements and
understandings relating to leasing or licensing of space at the Mortgaged
Property and in the Building relating thereto. Each of the Leases was entered
into as the result of arms length negotiation and has not been modified,
changed, altered, assigned, supplemented or amended in any respect, except as
reflected on the Rent Roll, and no tenant is entitled to any free rent, partial
rent, rebate of rent payments, credit, offset or deduction in rent, including,
without limitation, lease support payments or lease buy-outs, except as
reflected in the Rent Roll. There are no occupancies, rights, privileges or
licenses in or to the Mortgaged Property or portion thereof other than pursuant
to the Leases reflected in Rent Rolls previously furnished to the Agent for the
Mortgaged Property. Except as set forth in each Rent Roll, the Leases reflected
therein are in full force and effect in accordance with their respective terms,
without any payment default or any other material default thereunder, nor are
there any defenses, counterclaims, offsets, concessions or rebates available to
any tenant thereunder, and the Borrower has not given or made, any notice of any
payment or other material default, or any claim, which remains uncured or
unsatisfied, with respect to any of the Leases. The Rent Rolls furnished to the
Banks accurately and completely set forth all rents payable by and security, if
any, deposited by tenants, no tenant having paid more than one month's rent in
advance. All tenant improvements or work to be done for tenants on the Rent
Roll, furnished or paid for by the Borrower, or credited or allowed to a tenant,
for, or in connection with, the Building pursuant to any Lease has been
completed and paid for or provided for in a manner satisfactory to the Agent. No
material leasing, brokerage or like commissions, fees or payments are due from
the Borrower in respect of the Leases.
(a) Service Agreements; Management Agreements. Except as listed on Schedule
6.22, there are no material Service Agreements relating to the operation and
maintenance of the Building, the Mortgaged Property, or any portion thereof that
are not cancellable at any time. The Borrower has no Management Agreements for
the Mortgaged Properties. To the best knowledge of the Borrower, there are no
material claims or any bases for material claims in respect of the Mortgaged
Property or its operation by any party to any Service Agreement or Management
Agreement.
(a) Other Material Real Property Agreements; No Options. There are no
material agreements pertaining to the Mortgaged Property, any Building thereon
or the operation or maintenance of either thereof other than as described in
this Agreement (including the Schedules hereto) or otherwise disclosed in
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writing to the Agent and the Banks by the Borrower; and no person or entity has
any right or option to acquire the Mortgaged Property on any Building thereon or
any portion thereof or interest therein.
0.1 Brokers. Neither the Borrower nor any of its Subsidiaries has engaged or
otherwise dealt with any broker, finder or similar entity in connection with
this Agreement or the Loans contemplated hereunder.
0.1 Other Debt. Neither the Borrower nor any of its Subsidiaries is in default
of the payment of any Indebtedness or any other agreement, mortgage, deed of
trust, security agreement, financing agreement, indenture or lease to which any
of them is a party. The Borrower is not a party to or bound by any agreement,
instrument or indenture that may require the subordination in right or time or
payment of any of the Obligations to any other indebtedness or obligation of the
Borrower. The Borrower has provided to the Agent a schedule, and upon the
request of the Agent will provide copies, of all agreements, mortgages, deeds of
trust, financing agreements or other material agreements binding upon the
Borrower or its properties and entered into by the Borrower as of the date of
this Agreement with respect to any Indebtedness of the Borrower.
0.1 Solvency. As of the Closing Date and after giving effect to the transactions
contemplated by this Agreement and the other Loan Documents, including all Loans
made or to be made hereunder, the Borrower is not insolvent on a balance sheet
basis such that the sum of the Borrower's assets exceeds the sum of the
Borrower's liabilities, the Borrower is able to pay its debts as they become
due, and the Borrower has sufficient capital to carry on its business.
1. AFFIRMATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans:
0.1 Punctual Payment. The Borrower will duly and punctually pay or cause to be
paid the principal and interest on their respective Loans and all interest and
fees provided for in this Agreement, all in accordance with the terms of this
Agreement and the Notes as well as all other sums owing pursuant to the Loan
Documents.
0.1 Maintenance of Office. The Borrower will maintain its chief executive office
at 2311 West 22nd Street, Suite 109, Oak Brook, Illinois 60521, or at such other
place in the United States of America as the Borrower shall designate upon prior
written notice to the Agent and the Banks, where notices, presentations and
demands to or upon the Borrower in respect of the Loan Documents may be given or
made.
0.1 Records and Accounts. The Borrower will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of account in which
full, true and correct entries will be made in accordance with generally
accepted accounting principles and (b) maintain adequate accounts and reserves
for all taxes (including income taxes), depreciation and amortization of its
properties and the properties of its Subsidiaries, contingencies and other
reserves.
0.1 Financial Statements, Certificates and Information. The Borrower will
deliver or cause to be delivered to each of the Banks:
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(a) as soon as practicable, but in any event not later than ninety (90) days
after the end of each fiscal year of the Borrower, the audited consolidated
balance sheet of the Borrower and its Subsidiaries at the end of such year, and
the related audited consolidated statements of income, changes in shareholder's
equity and cash flows for such year, each setting forth in comparative form the
figures for the previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with generally accepted accounting principles,
and accompanied by an auditor's report prepared without qualification by Ernst &
Young or by another "Big Six" accounting firm, the Form 10-K filed with the SEC
(unless the SEC has approved an extension, in which event the Borrower will
deliver to the Agent and each of the Banks a copy of the Form 10-K
simultaneously with delivery to the SEC), and any other information the Banks
may need to complete a financial analysis of the Borrower and its Subsidiaries;
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each of the first three fiscal quarters of the Borrower, copies
of the unaudited consolidated balance sheet of the Borrower and its Subsidiaries
as at the end of such quarter, and the related unaudited consolidated statements
of income, changes in shareholder's equity and cash flows for the portion of the
Borrower's fiscal year then elapsed, and a statement showing the aging of the
receivables and payables for the Mortgaged Properties, all in reasonable detail
and prepared in accordance with generally accepted accounting principles (which
may be provided by inclusion in the Form 10-Q of the Borrower for such period
provided pursuant to subsection (c) below), together with a certification by the
principal financial or accounting officer of the Borrower that the information
contained in such financial statements fairly presents the financial position of
the Borrower and its Subsidiaries on the date thereof (subject to year-end
adjustments);
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each of the first three fiscal quarters of the Borrower in each
year, copies of Form 10-Q filed with the SEC (unless the SEC has approved an
extension in which event the Borrower will deliver such copies of the Form 10-Q
to the Agent and each of the Banks simultaneously with delivery to the SEC), if
required;
(a) as soon as practicable, but in any event not later than forty five (45) days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), copies of a consolidated statement of Operating
Cash Flow for such fiscal quarter for the Borrower and its Subsidiaries and a
statement of Operating Cash Flow for such fiscal quarter for the Borrower and
each of the Mortgaged Properties, prepared on a basis consistent with the
statement furnished pursuant to paragraph 6.4(c) together with a certification
by the chief financial or chief accounting officer of the Borrower, that the
information contained in such statement fairly presents the Operating Cash Flow
of the Borrower and its Subsidiaries and the Mortgaged Properties for such
period;
(a) simultaneously with the delivery of the financial statements referred to in
subsections (a) and (b) above, a statement (a "Compliance Certificate")
certified by the principal financial or accounting officer of the Borrower in
the form of Exhibit C hereto (or in such other form as the Agent may approve
from time to time) setting forth in reasonable detail computations evidencing
compliance with the covenants contained in paragraph 9 and the other covenants
described therein, and (if applicable) reconciliations to reflect changes in
generally accepted accounting principles since the Balance Sheet Date;
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(a) contemporaneously with the filing or mailing thereof, copies of all material
of a financial nature filed with the SEC or sent to the stockholders of the
Borrower;
(a) as soon as practicable but in any event not later than thirty (30) days
after the end of each fiscal quarter of the Borrower (including the fourth
fiscal quarter in each year), updated Rent Rolls with respect to the Mortgaged
Properties and a summary of each Rent Roll in form reasonably satisfactory to
the Majority Banks;
(a) not later than thirty (30) days following each acquisition of an interest in
Real Estate by the Borrower or any of its Subsidiaries (which for the purposes
of this paragraph 7.4(h) shall include the Investments described in paragraph
8.3(i)), each of the following (provided that with respect to the Investments
described in pargraph 8.3(i), the following items shall be provided to the
extent reasonably available to the Borrower or its Subsidiaries): (i) the
closing statement relating to such acquisition, (ii) a description of the
property acquired, (iii) a certificate from the chief financial or accounting
officer of the Borrower stating that (A) an environmental site assessment has
been prepared by an Environmental Engineer and such assessment contains no
material qualifications with respect to such Real Estate and (B) a statement of
condition of such Real Estate has been prepared by a construction engineer and
such statement contains no material qualifications, (iv) an historical operating
statement of such Real Estate for such period as may be available to the
Borrower and a current rent roll for such Real Estate, and (v) a Compliance
Certificate prepared using the financial statements of the Borrower most
recently provided or required to be provided to the Banks under paragraph 6.4 or
this paragraph 7.4 adjusted in the best good faith estimate of the Borrower to
give effect to such acquisition and demonstrating that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such acquisition;
(a) promptly after they are filed with the Internal Revenue Service, copies of
all annual federal income tax returns and amendments thereto of the Borrower;
(a) promptly upon completion, copies of such market studies relating to the
Mortgaged Property and the other Eligible Real Estate as are from time to time
prepared by or on behalf of the Borrower or its Subsidiaries;
(a) not later than thirty (30) days following each acquisition of an interest in
a Subsidiary, each of the following: (i) the name and structure of the
Subsidiary, (ii) a description of the property owned by such Subsidiary, and
(iii) such other information as the Agent may reasonably request;
(a) simultaneously within the delivery of the financial statement referred to in
subsection (a) above, a statement (i) listing the Real Estate owned by the
Borrower and its Subsidiaries (or in which the Borrower or its Subsidiaries owns
an interest) and stating the location thereof, the date acquired and the
acquisition cost, (ii) listing the Indebtedness of the Borrower and its
Subsidiaries (excluding Indebtedness of the type described in paragraph 8.1(b)
(e), which statement shall include, without limitation, a statement of the
original principal amount of such Indebtedness and the current amount
outstanding, the holder thereof, the maturity date and any extension options,
the interest rate, the collateral provided for such Indebtedness and whether
such Indebtedness is recourse or non recourse, and (iii) listing the properties
of the Borrower and its Subsidiaries which are under "development"
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(as used in paragraph 8.9) and providing a brief summary of the status of such
development;
(a) not later than sixty (60) days prior to the end of each fiscal year of the
Borrower a budget and business plan for the next fiscal year; and
(a) from time to time such other financial data and information in the
possession of the Borrower or its Subsidiaries (including without limitation
auditors' management letters, property inspection and environmental reports and
information as to zoning and other legal and regulatory changes affecting the
Borrower) as the Agent may reasonably request.
0.1 Notices.
(a) Defaults. The Borrower will promptly notify the Agent in writing of the
occurrence of any Default or Event of Default. If any Person shall give any
notice or take any other action in respect of a claimed default (whether or not
constituting an Event of Default) under this Agreement or under any note,
evidence of indebtedness, indenture or other obligation to which or with respect
to which the Borrower or any of its Subsidiaries is a party or obligor, whether
as principal or surety, and such default would permit the holder of such note or
obligation or other evidence of indebtedness to accelerate the maturity thereof,
which acceleration would have a material adverse effect on the Borrower, the
Borrower shall forthwith give written notice thereof to the Agent and each of
the Banks, describing the notice or action and the nature of the claimed
default.
(a) Environmental Events. The Borrower will promptly give notice to the Agent
(i) upon the Borrower obtaining knowledge of any potential or known Release, of
any Hazardous Substances at or from the Mortgaged Property; (ii) of any
violation of any Environmental Law that the Borrower or any of its Subsidiaries
reports in writing or is reportable by such Person in writing (or for which any
written report supplemental to any oral report is made) to any federal, state or
local environmental agency and (iii) upon becoming aware thereof, of any
inquiry, proceeding, investigation, or other action, including a notice from any
agency of potential environmental liability, of any federal, state or local
environmental agency or board, that in either case involves the Mortgaged
Property or has the potential to materially affect the assets, liabilities,
financial conditions or operations of the Borrower or any Subsidiary or the
Agent's liens on the Collateral pursuant to the Security Documents.
(a) Notification of Claims Against Collateral. The Borrower will, immediately
upon becoming aware thereof, notify the Agent in writing of any setoff, claims
(including, with respect to any Mortgaged Property, environmental claims),
withholdings or other defenses to which any of the Collateral, or the rights of
the Agent or the Banks with respect to the Collateral, are subject.
(a) Notice of Litigation and Judgments. The Borrower will give notice to the
Agent in writing within 15 days of becoming aware of any litigation or
proceedings threatened in writing or any pending litigation and proceedings
affecting the Borrower or any of its Subsidiaries or to which the Borrower or
any of its Subsidiaries is or is to become a party involving an uninsured claim
against the Borrower or any of its Subsidiaries that could reasonably be
expected to have a materially adverse effect on the Borrower and stating the
nature and status of such litigation or proceedings. The Borrower will give
notice to the Agent, in writing, in form and detail satisfactory to the Agent
and each of the Banks, within ten days of any judgment not covered by
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insurance, whether final or otherwise, against the Borrower or any of its
Subsidiaries in an amount in excess of $100,000.
(a) Notice of Proposed Sales, Encumbrances, Refinance or Transfer of
Non-Mortgaged Property. The Borrower will give notice to the Agent of any
proposed or completed sale, encumbrance, refinance or transfer of any Real
Estate other than Mortgaged Property or other Investment described in paragraph
8.3(i) of the Borrower or its Subsidiaries within any fiscal quarter of the
Borrower, such notice to be submitted together with the Compliance Certificate
provided or required to be provided to the Banks under paragraph 7.4 with
respect to such fiscal quarter. The Compliance Certificate shall with respect to
any proposed or completed sale, encumbrance, refinance or transfer be adjusted
in the best good-faith estimate of the Borrower to give effect to such sale,
encumbrance, refinance or transfer and demonstrate that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such sale, encumbrance, refinance or transfer. Notwithstanding
the foregoing, in the event of any sale, encumbrance, refinance or transfer of
any Real Estate other than the Mortgaged Property or other Investment described
in paragraph 8.3(i) of the Borrower or its Subsidiaries, the Borrower shall
promptly give notice to the Agent of such transaction, which notice shall be
accompanied by a Compliance Certificate prepared using the financial statements
of the Borrower most recently provided or required to be provided to the Banks
under paragraph 6.4 or paragraph 7.4 adjusted as provided in the preceding
sentence.
(a) Notice of Proposed Renovations. The Borrower will promptly give notice to
the Agent of any proposed renovations (not including any tenant improvements) to
any Real Estate the projected cost of which will exceed $250,000.00.
(a) Debt and Equity Offerings. The Borrower shall provide the Agent with five
(5) Business Days' prior written notice of any Debt Offering or Equity Offering.
(a) Notification of Banks. Promptly after receiving any notice under this
paragraph 7.5, the Agent will forward a copy thereof to each of the Banks,
together with copies of any certificates or other written information that
accompanied such notice.
0.1 Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things necessary to preserve
and keep in full force and effect its existence as a Maryland corporation. The
Borrower will cause each of its Subsidiaries to do or cause to be done all
things necessary to preserve and keep in full force and effect its legal
existence. The Borrower will do or cause to be done all things necessary to
preserve and keep in full force all of its rights and franchises and those of
its Subsidiaries. The Borrower will, and will cause each of its Subsidiaries to,
continue to engage primarily in the businesses now conducted by it and in
related businesses.
(a) The Borrower (i) will cause all of its properties and those of its
Subsidiaries used or useful in the conduct of its business or the business of
its Subsidiaries to be maintained and kept in good condition, repair and working
order (ordinary wear and tear excepted) and supplied with all necessary
equipment, and (ii) will cause to be made all necessary repairs, renewals,
replacements, betterments and improvements thereof in all cases in which the
failure so to do would have a material adverse effect on the
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condition of the applicable Mortgaged Property or on the financial condition,
assets or operations of the Borrower and its Subsidiaries.
0.1 Insurance. (a) The Borrower will, at its expense, procure and maintain for
the benefit of the Borrower and the Agent, insurance policies issued by such
insurance companies, in such amounts, in such form and substance, and with such
coverages, endorsements, deductibles and expiration dates as are acceptable to
the Majority Banks, providing the following types of insurance covering the
Mortgaged Property:
(i) "Named Peril" property insurance (including comprehensive boiler and
machinery coverages) on each Building and the contents therein of the Borrower
and its Subsidiaries in an amount not less than one hundred percent (100%) of
the full replacement cost of each Building and the contents therein of the
Borrower and its Subsidiaries or such other limit as the Agent may approve, with
deductibles not to exceed $10,000 for any one occurrence, with a replacement
cost coverage endorsement, and, if requested by the Majority Banks, a contingent
liability from operation of building laws endorsement in such amounts as the
Majority Banks may require. Full replacement cost as used herein means the cost
of replacing the Building (exclusive of the cost of excavations, foundations and
footings below the lowest basement floor) and the contents therein of the
Borrower and its Subsidiaries without deduction for physical depreciation
thereof;
(ii) During the course of construction or repair of any Building, the insurance
required by clause (i) above shall be written on riders to the Borrower's
existing policies or on a builders risk, completed value, non-reporting form,
meeting all of the terms required by clause (i) above, covering the total value
of work performed, materials, equipment, machinery and supplies furnished,
existing structures, and temporary structures being erected on or near the Real
Estate, including coverage against collapse and damage during transit or while
being stored off-site, and containing a soft costs (including loss of rents)
coverage endorsement and a permission to occupy endorsement;
(iii) Flood insurance if at any time any Building is located in any federally
designated "special hazard area" (including any area having special flood,
mudslide and/or flood-related erosion hazards, and shown on a Flood Hazard
Boundary Map or a Flood Insurance Rate Map published by the Federal Emergency
Management Agency as Zone A, AO, Al-30, AE, A99, AH, VO, Vl-30, VE, V, M or E)
and the broad form flood coverage required by clause (i) above is not available,
in an amount equal to the full replacement cost or the maximum amount then
available under the National Flood Insurance Program;
(iv) Rent loss insurance in an amount sufficient to recover at least the total
estimated gross receipts from all sources of income, including without
limitation, rental income, for the Real Estate for a twelve month period;
(v) Commercial general liability insurance against claims for personal injury
(to include, without limitation, bodily injury and personal and advertising
injury) and property damage liability, all on an occurrence basis, if
commercially available, with such coverages as the Majority Banks may reasonably
request (including, without limitation, contractual liability coverage,
completed operations coverage for a period of two years following completion of
construction of any improvements on the Real Estate, and coverages equivalent to
an ISO broad form endorsement), with a general aggregate limit of not less than
$l,000,000, a completed operations aggregate limit of not less than $1,000,000,
and a combined single "per occurrence"
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limit of not less than $1,000,000 for bodily injury, property damage and
medical payments;
(vi) During the course of construction or repair of any improvements on the Real
Estate, owner's contingent or protective liability insurance covering claims not
covered by or under the terms or provisions of the insurance required by clause
(v) above;
(vii) Employers liability insurance with respect to the Borrower's employees;
(viii) Umbrella liability insurance with limits of not less than $10,000,000 to
be in excess of the limits of the insurance required by clauses (v), (vi) and
(vii) above, with coverage at least as broad as the primary coverages of the
insurance required by clauses (v), (vi) and (vii) above, with any excess
liability insurance to be at least as broad as the coverages of the lead
umbrella policy. All such policies shall be endorsed to provide defense coverage
obligations;
(ix) Workers' compensation insurance for all employees of the Borrower or its
Subsidiaries engaged on or with respect to the Real Estate; and
(x) Such other insurance in such form and in such amounts as may from time to
time be reasonably required by the Majority Banks against other insurable
hazards and casualties which at the time are commonly insured against in the
case of properties of similar character and location to the Real Estate.
The Borrower shall pay all premiums on insurance policies. The insurance
policies with respect to all Mortgaged Property provided for in clauses (v),
(vi) and (viii) above shall name the Agent and each Bank as an additional
insured and shall contain a cross liability/ severability endorsement. The
insurance policies provided for in clauses (i), (ii), (iii) and (iv) above shall
name the Agent as mortgagee and loss payee, shall be first payable in case of
loss to the Agent, and shall contain mortgage clauses and lender's loss payable
endorsements in form and substance acceptable to the Majority Banks. The
Borrower shall deliver duplicate originals or certified copies of all such
policies to the Majority Banks, and the Borrower shall promptly furnish to the
Majority Banks all renewal notices and evidence that all premiums or portions
thereof then due and payable have been paid. At least 30 days prior to the
expiration date of the policies, the Borrower shall deliver to the Banks
evidence of continued coverage, including a certificate of insurance, as may be
satisfactory to the Majority Banks.
(a) All policies of insurance required by this Agreement shall contain clauses
or endorsements to the effect that (i) no act or omission of the Borrower or any
Subsidiary or anyone acting for the Borrower or any Subsidiary (including,
without limitation, any representations made in the procurement of such
insurance), which might otherwise result in a forfeiture of such insurance or
any part thereof, no occupancy or use of the Real Estate for purposes more
hazardous then permitted by the terms of the policy, and no foreclosure or any
other change in title to the Real Estate or any part thereof, shall affect the
validity or enforceability of such insurance insofar as the Agent is concerned,
(ii) the insurer waives any right of setoff, counterclaim, subrogation, or any
deduction in respect of any liability of the Borrower or any Subsidiary and the
Agent, (iii) such insurance is primary and without right of contribution from
any other insurance which may be available, (iv) such policies shall not be
modified, canceled or terminated prior to the scheduled expiration date thereof
without the insurer thereunder giving at least 30 days prior written notice to
the Agent by certified or registered
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mail, and (v) that the Agent or the Banks shall not be liable for any premiums
thereon or subject to any assessments thereunder, and shall in all events be in
amounts sufficient to avoid any coinsurance liability.
(a) The insurance required by this Agreement may be effected through a blanket
policy or policies covering additional locations and property of the Borrower
and other Persons not included in the Mortgage Property, provided that such
blanket policy or policies comply with all of the terms and provisions of this
paragraph 7.7 and contain endorsements or clauses assuring that any claim
recovery will not be less than that which a separate policy would provide,
including, without limitation, a priority claim provision with respect to
property insurance and an aggregate limits of insurance endorsement in the case
of liability insurance.
(a) All policies of insurance required by this Agreement shall be issued by
companies licensed to do business in the State where the policy is issued and
also in the states where the Real Estate is located and having a rating in
Best's Key Rating Guide of at least "A" and a financial size category of at
least "VIII".
(a) Neither the Borrower nor any Subsidiary shall carry separate insurance,
concurrent in kind or form or contributing in the event of loss, with any
insurance required under this Agreement unless such insurance complies with the
terms and provisions of this paragraph 7.7. In the event of any Loss or damage
to the Mortgaged Property in excess of $10,000, the Borrower shall give
immediate written notice to the insurance carrier and the Agent, and the Agent
shall furnish a copy of such notice promptly to each of the Banks. The Borrower
may make proof of loss and adjust and compromise any claim under insurance
policies which is of an amount not more than $250,000.00 so long as no Event of
Default has occurred and is continuing and so long as the Borrower shall in good
faith diligently pursue such claim. The Borrower hereby irrevocably authorizes
and empowers the Agent, at the Agent's option in the Agent's sole discretion or
at the request of the Majority Banks in their sole discretion, as attorney in
fact for the Borrower, to make proof of any loss except as provided in the
preceding sentence, to adjust and compromise any claim under insurance policies,
to appear in and prosecute any action arising from such insurance policies, to
collect and receive insurance proceeds, and to deduct therefrom the Agent's
expenses incurred in the collection of such proceeds. If the Mortgaged Property
is acquired by the Agent or any nominee through foreclosure, deed in lieu of
foreclosure or otherwise is acquired from the Borrower, all right, title and
interest of the Borrower in and to any insurance policies and unearned premiums
thereon and in and to the proceeds thereof resulting from loss or damage to the
Mortgaged Property prior to such sale or acquisition shall pass to the Agent or
any other successor in interest to the Borrower or purchaser or grantee of the
Mortgaged Property.
(a) Subject to the terms of the following sentence, the Borrower authorizes the
Agent, at the Agent's option or at the request of the Majority Bank's in their
sole discretion, to (i) apply the balance of such proceeds to the payment of the
Obligations of the Borrower whether or not then due, or (ii) if the Agent or the
Majority Bank shall require the reconstruction or repair of the Mortgaged
Property, to hold the balance of such proceeds to be used to pay all taxes,
charges, sewer use fees, water rates and assessments which may be imposed upon
the Mortgaged Property and the Obligations of the Borrower as they become due
during the course of reconstruction or repair of the Mortgaged Property and to
reimburse the Borrower, in accordance with such terms and conditions as Agent
may prescribe, for the cost of such reconstruction or
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repair of the Mortgaged Property, and on completion of such reconstruction or
repair to apply any of the excess to the payment of the Obligations of the
Borrower. Notwithstanding the foregoing, the Agent shall make such net proceeds
available to the Borrower to reconstruct and repair the Mortgaged Property, in
accordance with such terms and conditions as the Agent may prescribe for the
disbursement of such proceeds to assure completion of such reconstruction or
repair provided that (x) no Default or Event of Default shall have occurred and
be continuing, (y) the Borrower shall have provided to Agent additional cash
security in an amount equal to the amount reasonably estimated by the Agent to
be the amount in excess of such proceeds which will be required to complete such
repair or restoration, and (z) the Agent shall determine that such repair or
reconstruction can be completed prior to the Maturity Date.
(a) The Borrower will, at its expense, procure and maintain insurance covering
the Borrower and the Real Estate other than the Mortgaged Property in such
amounts and against such risks and casualties as are customary for properties of
similar character and location, due regard being given to the type of
improvements thereon, their construction, location, use and occupancy.
(a) The Borrower shall provide to the Agent for the benefit of the Banks Title
Policies for all of the Mortgaged Properties of the Borrower which shall at all
times be in an aggregate amount of not less than the total Commitments for the
Borrower at the time in effect. Each Title Policy shall also contain, to the
extent available, a tie-in endorsement aggregating the insurance coverage
provided under all of the policies relating to the Borrower with tie-in
endorsements.
0.1 Taxes. The Borrower and each Subsidiary will duly pay and discharge, or
cause to be paid and discharged, before the same shall become overdue, all
taxes, assessments and other governmental charges imposed upon it and upon the
Mortgaged Property and the other Real Estate, sales and activities, or any part
thereof, or upon the income or profits therefrom, as well as all claims for
labor, materials, or supplies that if unpaid might by law become a lien or
charge upon any of its property; provided that any such tax, assessment, charge,
levy or claim need not be paid if the validity or amount thereof shall currently
be contested in good faith by appropriate proceedings and if the Borrower or
such Subsidiary shall have set aside on its books adequate reserves with respect
thereto; and provided, further, that forthwith upon the commencement of
proceedings to foreclose any lien that may have attached as security therefor,
the Borrower and each Subsidiary of the Borrower either (i) will provide a bond
issued by a surety reasonably acceptable to the Majority Banks and sufficient to
stay all such proceedings or (ii) if no such bond is provided, will pay each
such tax, assessment, charge, levy or claim.
0.1 Inspection of Properties and Books. The Borrower shall permit the Banks,
through the Agent or any representative designated by the Agent, at the
Borrower's expense to visit and inspect any of the properties of the Borrower or
any of its Subsidiaries, to examine the books of account of the Borrower and its
Subsidiaries (and to make copies thereof and extracts therefrom) and to discuss
the affairs, finances and accounts of the Borrower and its Subsidiaries with,
and to be advised as to the same by, its officers, all at such reasonable times
and intervals as the Agent or any Bank may reasonably request. The Banks shall
use good faith efforts to coordinate such visits and inspections so as to
minimize the interference with and disruption to the Borrower's normal business
operations.
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0.1 Compliance with Laws, Contracts, Licenses, and Permits. The Borrower will
comply with, and will cause each of its Subsidiaries to comply in all respects
with (i) all material provisions of all applicable laws and regulations now or
hereafter in effect wherever its business is conducted, including all
Environmental Laws, (ii) the provisions of its corporate charter, partnership
agreement or declaration of trust, as the case may be, and other charter
documents and bylaws, (iii) all material agreements and instruments to which it
is a party or by which it or any of its properties may be bound, (iv) all
applicable decrees, orders, and judgments, and (v) all licenses and permits
required by applicable laws and regulations for the conduct of its business or
the ownership, use or operation of its properties. If at any time while any Loan
or Note is outstanding or the Banks have any obligation to make Loans hereunder,
any authorization, consent, approval, permit or license from any officer, agency
or instrumentality of any government shall become necessary or required in order
that the Borrower may fulfill any of its obligations hereunder, the Borrower
will immediately take or cause to be taken all steps necessary to obtain such
authorization, consent, approval, permit or license and furnish the Agent and
the Banks with evidence thereof.
0.1 Use of Proceeds. The Borrower will use the proceeds of the Loans to the
Borrower solely to provide short-term financing (a) for the acquisition of fee
interests by the Borrower in Real Estate which is utilized principally for
office, office/service or light industry, (b) for Capital Improvement Projects,
(c) for working capital purposes, and (d) for such other purposes as the
Majority Banks in their discretion from time to time may agree to in writing.
0.1 Further Assurances. The Borrower will cooperate with, and will cause each of
its Subsidiaries to cooperate with the Agent and the Banks and execute such
further instruments and documents as the Banks or the Agent shall reasonably
request to carry out to their satisfaction the transactions contemplated by this
Agreement and the other Loan Documents.
0.1 Compliance. The Borrower shall operate its business in compliance with the
terms and conditions of this Agreement and the other Loan Documents. The
Borrower shall at all times comply with all requirements of applicable laws
necessary to maintain REIT Status and shall operate its business in compliance
with the terms and conditions of this Agreement and the other Loan Documents.
0.1 Interest Rate Contracts. If at the end of any fiscal quarter of the
Borrower, (i) the combined Operating Cash Flow with respect to the Mortgaged
Properties for the period covered by the four previous fiscal quarters (treated
as a single accounting period) is less than 1.6 times the Pro Forma Debt Service
Charges for such period as determined pursuant to paragraph 9.5 or (ii) the
Distributions paid by the Borrower for the period covered by the four previous
fiscal quarters exceeds eighty eight percent (88%) of its Funds from Operations
for such four fiscal quarters, then the Borrower shall obtain and maintain in
effect Interest Rate Contracts which are satisfactory to the Agent on all
variable rate Indebtedness that exceeds twenty percent (20%) of the Borrower's
Consolidated Total Adjusted Asset Value.
0.1 Title Insurance Updates. Prior to the earlier of (i) the completion of the
UP REIT transaction currently being contemplated by the Borrower or (ii)
December 31, 1996, the Borrower shall deliver to the Agent a "date down"
endorsement to each Title Policy with respect to each Mortgaged Property and new
tie in endorsements with respect to all of the Title Policies for the aggregate
Commitment of $50,000,000 in forms satisfactory to the Banks,
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including, without limitation, the absence of any new exceptions to title since
the date of each of the original Title Policies issued to the Agent in
connection with the Prior Credit Agreement. Upon the request of the Agent, but
in no event later than forty five (45) days after the date of this Agreement,
Borrower shall deliver to the Agent tract searches with respect to each
Mortgaged Property covering the period between April 12, 1996 and the date of
this Agreement showing no liens or other encumbrances in contravention of this
Agreement, including, without limitation, paragraph 8.2.
1. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any of the Banks has any obligation to make any Loans:
0.1 Restrictions on Indebtedness. The Borrower will not, and will not permit any
of its Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan Documents;
(a) current liabilities of the Borrower or its Subsidiaries incurred in the
ordinary course of business but not incurred through (i) the borrowing of money,
or (ii) the obtaining of credit except for credit on an open account basis
customarily extended and in fact extended in connection with normal purchases of
goods and services;
(a) Indebtedness in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies to the extent that payment
therefor shall not at the time be required to be made in accordance with the
provisions of paragraph 7.8;
(a) Indebtedness in respect of judgments or awards that have been in force for
less than the applicable period for taking an appeal so long as execution is not
levied thereunder or in respect of which the Borrower shall at the time in good
faith be prosecuting an appeal or proceedings for review and in respect of which
a stay of execution shall have been obtained pending such appeal or review;
(a) endorsements for collection, deposit or negotiation and warranties of
products or services, in each case incurred in the ordinary course of
business;
(a) subject to the provisions of paragraph 9, Non recourse Indebtedness of the
Borrower or any of its Subsidiaries, provided that neither the Borrower nor any
of its Subsidiaries shall incur any Non-recourse Indebtedness unless the
Borrower shall have provided to the Banks a statement that no Default or Event
of Default exists and a Compliance Certificate demonstrating that the Borrower
will be in compliance with the covenants referred to therein after giving effect
to such incurrence;
(a) Indebtedness in respect of reverse repurchase agreements having a term of
not more than 180 days with respect to Investments described in paragraph 8.3(d)
or (e);
(a) Indebtedness existing on the date of this Agreement and listed and
described on Schedule 8.1 hereto; and
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(a) subject to the provisions of paragraph 9, other recourse Indebtedness of the
Borrower and its Subsidiaries not secured by the Mortgaged Property in an
aggregate outstanding principal amount (excluding the Obligations) not exceeding
$5,000,000; provided that neither the Borrower nor any of its Subsidiaries shall
incur any recourse Indebtedness described in this paragraph 8.1(i) unless the
Borrower shall have provided to the Banks a statement that no Default or Event
of Default exists and a Compliance Certificate demonstrating that the Borrower
will be in compliance with the covenants referred to therein after giving effect
to such incurrence.
0.1 Restrictions on Liens, Etc. The Borrower will not, and will not permit any
of its Subsidiaries to, (a) create or incur or suffer to be created or incurred
or to exist any lien, encumbrance, mortgage, pledge, charge, restriction or
other security interest of any kind upon any of its property or assets of any
character whether now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of its property or assets or the income or profits
therefrom for the purpose of subjecting the same to the payment of Indebtedness
or performance of any other obligation in priority to payment of its general
creditors; (c) acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase money security
agreement, device or arrangement; (d) suffer to exist for a period of more than
30 days after the same shall have been incurred any Indebtedness or claim or
demand against it that if unpaid might by law or upon bankruptcy or insolvency,
or otherwise, be given any priority whatsoever over its general creditors; (e)
sell, assign, pledge or otherwise transfer any accounts, contract rights,
general intangibles, chattel paper or instruments, with or without recourse; or
(f) incur or maintain any obligation to any holder of Indebtedness of the
Borrower or such Subsidiary which prohibits the creation or maintenance of any
lien securing the Obligations; provided that the Borrower and any Subsidiary of
the Borrower may create or incur or suffer to be created or incurred or to
exist:
(i) liens in favor or the Borrower on all or part of the assets of Subsidiaries
of such Person (other than Collateral) securing Indebtedness owing by
Subsidiaries of such Person to such Person;
(ii) liens on properties to secure taxes, assessments and other governmental
charges or claims for labor, material or supplies in respect of obligations not
overdue;
(iii) deposits or pledges made in connection with, or to secure payment of,
workers' compensation, unemployment insurance, old age pensions or other social
security obligations;
(iv) liens on properties other than the Mortgaged Property or any interest
therein (including the rents, issues and profits therefrom) in respect of
judgments, awards or indebtedness, the Indebtedness with respect to which is
permitted by paragraph 8.1(d), paragraph 8.1(f) or paragraph 8.1(i); (v)
encumbrances on properties other than the Mortgaged Property consisting of
easements, rights of way, zoning restrictions, restrictions on the use of real
property and defects and irregularities in the title thereto, landlord's or
lessor's liens under leases to which the Borrower or a Subsidiary of such Person
is a party, and other minor liens or encumbrances none of which interferes
materially with the use of the property affected in the ordinary conduct of the
business of the Borrower or its Subsidiaries, which defects do not individually
or in the aggregate have a materially adverse effect on the business of the
Borrower individually or of such Person and its Subsidiaries on a consolidated
basis;
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(vi) liens on Real Estate other than the Mortgaged Property and Short-term
Investments securing Non-recourse Indebtedness permitted by paragraph 8.1(f);
(vii) liens in favor of the Agent and the Banks under the Loan Documents;
(viii) liens and encumbrances on a Mortgaged Property expressly permitted
under the terms of the Security Deed relating thereto; and
(ix) other presently outstanding liens listed on Schedule 8.2 on properties
other than the Mortgaged Property.
0.1 Restrictions on Investments. The Borrower will not, and will not permit any
of its Subsidiaries to, make or permit to exist or to remain outstanding any
Investment except Investments in:
(a) marketable direct or guaranteed obligations of the United States of America
that mature within one (1) year from the date of purchase by the Borrower or its
Subsidiary;
(a) marketable direct obligations of any of the following: Federal Home Loan
Mortgage Corporation, Student Loan Marketing Association, Federal Home Loan
Banks, Federal National Mortgage Association, Government National Mortgage
Association, Bank for Cooperatives, Federal Intermediate Credit Banks, Federal
Financing Banks, Export-Import Bank of the United States, Federal Land Banks, or
any other agency or instrumentality of the United States of America;
(a) demand deposits, certificates of deposit, bankers acceptances and time
deposits of United States banks having total assets in excess of $100,000,000;
provided, however, that the aggregate amount at any time so invested with any
single bank having total assets of less than $1,000,000,000 will not exceed
$200,000;
(a) securities commonly known as "commercial paper" issued by a corporation
organized and existing under the laws of the United States of America or any
State which at the time of purchase are rated by Moody's Investors Service, Inc.
or by Standard & Poor's Corporation at not less than "P 1" if then rated by
Moody's Investors Service, Inc., and not less than "A 1", if then rated by
Standard & Poor's Corporation;
(a) mortgage-backed securities guaranteed by the Government National Mortgage
Association, the Federal National Mortgage Association or the Federal Home Loan
Mortgage Corporation and other mortgage-backed bonds which at the time of
purchase are rated by Moody's Investors Service, Inc. or by Standard & Poor's
Corporation at not less than "Aa" if then rated by Moody's Investors Service,
Inc. and not less than "AA" if then rated by Standard & Poor's Corporation;
(a) repurchase agreements having a term not greater than 90 days and fully
secured by securities described in the foregoing subsection (a), (b) or (e) with
banks described in the foregoing subsection (c) or with financial institutions
or other corporations having total assets in excess of $500,000,000;
(a) shares of so-called "money market funds" registered with the SEC under the
Investment Company Act of 1940 which maintain a level per-share value, invest
principally in investments described in the foregoing subsections (a) through
(f) and have total assets in excess of $50,000,000;
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(a) Investments in Subsidiaries of the Borrower, but only with the consent of
the Majority Banks; and
0.1 Investments in real estate investment trusts which own real property which
is used principally for offices, offices/service or light industry located
within a 400 mile radius of Chicago, provided that in no event shall the
aggregate costs of all Investments pursuant to this paragraph 8.3(i) exceed the
amount set forth with respect thereto in the Borrower's annual budget and
business plan delivered to the Agent pursuant to paragraph 7.4(m).
0.1 Merger, Consolidation. The Borrower will not, and will not permit any of its
Subsidiaries to, become a party to any merger or consolidation except (i) the
merger or consolidation of one or more of the Subsidiaries of the Borrower with
and into the Borrower and (ii) the merger or consolidation of two or more
Subsidiaries of the Borrower.
0.1 Sale and Leaseback. The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any arrangement, directly or indirectly, whereby the
Borrower or any Subsidiary of the Borrower shall sell or transfer any Real
Estate owned by it in order that then or thereafter the Borrower or any
Subsidiary shall lease back such Real Estate.
0.1 Compliance with Environmental Laws. The Borrower will not, and will not
permit any of its Subsidiaries, to do any of the following: (a) use any of the
Real Estate or any portion thereof as a facility for the handling, processing,
storage or disposal of Hazardous Substances, except for small quantities of
Hazardous Substances used in the ordinary course of business and in compliance
with all applicable Environmental Laws, (b) cause or permit to be located on any
of the Real Estate any underground tank or other underground storage receptacle
for Hazardous Substances except in full compliance with Environmental Laws, (c)
generate any Hazardous Substances on any of the Real Estate except in full
compliance with Environmental Laws, (d) conduct any activity at any Real Estate
or use any Real Estate in any manner so as to cause a Release of Hazardous
Substances on, upon or into the Real Estate or any surrounding properties or any
threatened Release of Hazardous Substances which might give rise to liability
under CERCLA or any other Environmental Law, or (e) directly or indirectly
transport or arrange for the transport of any Hazardous Substances (except in
compliance with all Environmental Laws).
The Borrower shall:
(i) in the event of any change in Environmental Laws governing the assessment,
release or removal of Hazardous Substances, which change would lead a prudent
lender to require additional testing to avail itself of any statutory insurance
or limited liability, take all action (including, without limitation, the
conducting of engineering tests at the sole expense of the Borrower) to confirm
that no Hazardous Substances are or ever were Released or disposed of on the
Mortgaged Property; and
(ii) if any Release or disposal of Hazardous Substances shall occur or shall
have occurred on the Mortgaged Property (including without limitation any such
Release or disposal occurring prior to the acquisition of such Mortgaged
Property by the Borrower), cause the prompt containment and removal of such
Hazardous Substances and remediation of the Mortgaged Property in full
compliance with all applicable laws and regulations and to the satisfaction of
the Majority Banks; provided, that the Borrower shall be deemed to be in
compliance with Environmental Laws for the purpose of this clause (ii) so long
as it or a responsible third party with sufficient financial resources is
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taking reasonable action to remediate or manage any event of noncompliance to
the satisfaction of the Majority Banks and no action shall have been commenced
by any enforcement agency. The Majority Banks may engage their own Environmental
Engineer to review the environmental assessments and the Borrower's compliance
with the covenants contained herein.
At any time after an Event of Default shall have occurred hereunder, or, whether
or not an Event of Default shall have occurred, at any time that the Agent or
the Majority Banks shall have reasonable grounds to believe that a Release or
threatened Release of Hazardous Substances may have occurred, relating to any
Mortgaged Property, or that any of the Mortgaged Properties is not in compliance
with the Environmental Laws, the Agent may at its election (and will at the
request of the Majority Banks) obtain such environmental assessments of such
Mortgaged Property prepared by an Environmental Engineer as may be necessary or
advisable for the purpose of evaluating or confirming (i) whether any Hazardous
Substances are present in the soil or water at or adjacent to such Mortgaged
Property and (ii) whether the use and operation of such Mortgaged Property
comply with all Environmental Laws. Environmental assessments may include
detailed visual inspections of such Mortgaged Property including, without
limitation, any and all storage areas, storage tanks, drains, dry wells and
leaching areas, and the taking of soil samples, as well as such other
investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of such Mortgaged Property and the use and
operation thereof with all applicable Environmental Laws. All such environmental
assessments shall be at the sole cost and expense of the Borrower. 0.1
Distributions. The Borrower shall not make any Distributions which would cause
it to violate any of the following covenants:
(a) The Borrower shall not pay any Distribution to the shareholders of the
Borrower if such Distribution is in excess of the amount which, when added to
the amount of all other Distributions paid in the same fiscal quarter and the
preceding three (3) fiscal quarters would exceed ninety percent (90%) of its
Funds from Operations for the four consecutive fiscal quarters ending prior to
the quarter in which such Distribution is paid;
(a) In the event that an Event of Default specified in paragraph 12.1(a) or (b)
shall have occurred and be continuing, the Borrower shall make no Distributions
other than the minimum Distributions required under the Code to maintain the
REIT Status of the Borrower, as evidenced by a certification of the principal
financial or accounting officer of the Borrower containing calculations in
reasonable detail satisfactory in form and substance to Agent; and
(a) Notwithstanding the foregoing, at any time when an Event of Default shall
have occurred and the maturity of the Obligations has been accelerated, the
Borrower shall not make any Distributions whatsoever, directly or indirectly.
0.1 Asset Sales. Neither the Borrower nor any Subsidiary thereof shall sell,
transfer or otherwise dispose of any Real Estate (except as the result of a
condemnation or casualty and except for the granting of Permitted Liens) unless
there shall have been delivered to the Banks a statement that no Default or
Event of Default exists and a Compliance Certificate demonstrating that the
Borrower will be in compliance with the covenants referred to therein after
giving effect to such sale, transfer or other disposition. Upon compliance with
this paragraph 8.8, the Agent, on behalf of the Banks, shall release such Real
Estate.
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0.1 Development Activity. Except for the renovation of the Borrower's
headquarters building located at 823 Commerce, Oak Brook, Illinois, which is
currently under way, neither the Borrower nor any of its Subsidiaries shall
engage, directly or indirectly, in the development of properties to be used
principally for offices, offices/service or light industry or otherwise, without
the prior written consent of the Majority Banks. For purposes of this paragraph
8.9, the term "development" shall include the new construction of an office,
office/service or light industry complex or the substantial renovation of
improvements to real property the costs of which renovation exceeds ten percent
(10%) of the Appraised Value of such real property, but shall not include the
addition of amenities or other related facilities to existing Real Estate or
renovations thereto the cost of which do not exceed ten percent (10%) of the
Appraised Value of such Real Estate which is already used principally for
offices, offices/service or light industry. The Borrower acknowledges that the
decision of the Majority Banks to grant or withhold such consent shall be based
on such factors as the Majority Banks deem relevant in their sole discretion,
including without limitation, evidence of sufficient funds both from borrowings
and equity to complete such development and evidence that the Borrower or its
Subsidiary has the resources and expertise necessary to complete such project.
Nothing herein shall prohibit the Borrower or any of its Subsidiaries thereof
from entering into an agreement to acquire Real Estate which has been developed
and initially leased by another Person.
1. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note is
outstanding or any Bank has any obligation to make any Loans, the Borrower will
comply with the following:
0.1 Borrowing Base. The Borrower will not, at the end of any fiscal quarter,
permit the outstanding principal balance of the Loans as of the date of
determination to be greater than the Borrowing Base of the Borrower as
determined as of the same date.
0.1 Liabilities to Assets Ratio. The Borrower will not, at the end of any fiscal
quarter, permit the ratio of the Borrower's Consolidated Total Liabilities to
Consolidated Total Adjusted Asset Value to exceed 0.55 to 1.
0.1 Debt Service Coverage. The Borrower will not, at the end of any fiscal
quarter, permit the Borrower's Consolidated Operating Cash Flow for the period
covered by the four previous consecutive fiscal quarters (treated as a single
accounting period) to be less than 2.0 times the Debt Service of the Borrower
for such period.
0.1 Tangible Net Worth. The Borrower will not, at the end of any fiscal quarter,
permit its Consolidated Tangible Net Worth to be less than $40,000,000.00 plus
seventy five percent (75%) of any Net Offering Proceeds received by the Borrower
after the Closing Date.
0.1 Mortgaged Property Operating Net Income. The Borrower will not, at the end
of any fiscal quarter, permit the combined Operating Cash Flow with respect to
the Mortgaged Properties for the period covered by the four previous consecutive
fiscal quarters (treated as a single accounting period) to be less than 1.5
times the Pro Forma Debt Service Charges for such period, provided that prior to
such time as the Borrower has owned and operated a Mortgaged Property for four
full fiscal quarters, the Operating Cash Flow with respect to such Mortgaged
Property for the number of full fiscal quarters
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which the Borrower has owned and operated such Mortgaged Property as annualized
shall be utilized for purposes of determining compliance with this covenant.
1. CLOSING CONDITIONS.
Pursuant to the Prior Credit Agreement, the Borrower executed and delivered
various documents to the Agent as a condition to the obligations of the Agent
and FNBB to make the initial Loans under the Prior Credit Agreement. Except to
the extent expressly amended and replaced as provided in this paragraph 10, all
such documents shall remain in full force and effect, and none of such documents
is superseded by the provisions of this paragraph 10 or any other provision of
this Agreement. The obligation of the Agent and the Banks to increase the Total
Commitment to $50,000,000.00 and to make further Loans to the Borrower is
subject to the satisfaction of the following conditions precedent:
0.1 Loan Documents. The Borrower shall have duly executed and delivered to the
Agent, except that each Bank shall have received a fully executed counterpart of
its Note, each of the following Loan Documents, each of which shall be in full
force and effect and shall be in form and substance satisfactory to the Majority
Banks:
(a) Agreement; Notes. Four (4) duly executed copies of this Agreement, one (1)
duly executed copy of the Note in favor of FNBB and one (1) duly executed copy
of the Note in favor of BOA. Upon delivery the Notes, the Note executed and
delivered by the Borrower to FNBB in connection with the Prior Credit Agreement
shall be marked cancelled and delivered to the Borrower.
(b) Indemnity Agreement. Four (4) duly executed copies of the Indemnity
Agreement.
(c) Amendments to Security Deeds and Assignments of Rents. Four (4) duly
executed copies of an Amendment to each Security Deed and Assignment of Rents
executed and delivered in connection with the Prior Credit Agreement.
0.1 Resolutions. All action on the part of the Borrower necessary for the valid
execution, delivery and performance by such Person of this Agreement and the
other Loan Documents to which such Person is or is to become a party shall have
been duly and effectively taken, and evidence thereof satisfactory to the Agent
shall have been provided to the Agent. The Agent shall have received from the
Borrower true copies of the resolutions adopted by its board of directors
authorizing the transactions described herein, certified by its secretary as of
a recent date to be true and complete.
0.1 Incumbency Certificate; Authorized Signers. The Agent shall have received
from the Borrower an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Borrower and giving the name and
bearing a specimen signature of each individual who shall be authorized to sign,
in the name and on behalf of such Person, each of the Loan Documents to which
such Person is or is to become a party. The Agent shall have also received from
the Borrower a certificate, dated as of the Closing Date, signed by a duly
authorized officer of the Borrower and giving the name and specimen signature of
each individual who shall be authorized to make Loan and Conversion Requests and
to give notices and to take other action on behalf of the Borrower under the
Loan Documents.
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0.1 Opinion of Counsel. The Agent shall have received a favorable opinion
addressed to the Banks and the Agent and dated as of the Closing Date, in form
and substance satisfactory to the Banks and the Agent, from counsel of the
Borrower as to such matters as the Agent shall reasonably request.
0.1 Payment of Fees. The Borrower shall have paid to the Agent the additional
commitment and syndication fee pursuant to paragraph 4.2.
0.1 Performance; No Default. The Borrower shall have performed and complied with
all terms and conditions herein required to be performed or complied with by it
on or prior to the Closing Date, and on the Closing Date there shall exist no
Default or Event of Default.
0.1 Representations and Warranties. The representations and warranties made by
the Borrower in the Loan Documents or otherwise made by or on behalf of the
Borrower or any of its Subsidiaries in connection therewith or after the date
thereof shall have been true and correct in all material respects when made and
shall also be true and correct in all material respects on the Closing Date.
0.1 Proceedings and Documents. All proceedings in connection with the
transactions contemplated by this Agreement and the other Loan Documents shall
be reasonably satisfactory to the Agent and the Agent's Special Counsel in form
and substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.
0.1 Compliance Certificate. A Compliance Certificate dated as of the date of the
Closing Date demonstrating compliance with each of the covenants calculated
therein as of the most recent fiscal quarter end for which the Borrower has
provided financial statements under ss.6.4 adjusted in the best good faith
estimate of the Borrower shall have been delivered to the Agent.
0.1 Stockholder Consents. The Agent shall have received evidence satisfactory to
the Agent that all necessary stockholder consents required in connection with
the consummation of the transactions contemplated by this Agreement and the
other Loan Agreements have been obtained.
0.1 Other Documents. To the extent requested by the Majority Banks, the Majority
Banks shall have received executed copies of all material agreements of any
nature whatsoever to which the Borrower or any Subsidiary is a party affecting
or relating to the use, operation, development, construction or management of
the Mortgaged Property.
0.1 No Condemnation/Taking. The Agent shall have received written confirmation
from the Borrower that no condemnation proceedings are pending or to the
Borrower' knowledge threatened against any Mortgaged Property or, if any such
proceedings are pending or threatened, identifying the same and the Real Estate
affected thereby and the Agent shall have determined that none of such
proceedings is or will be material to the Mortgaged Property affected thereby.
0.1 Assignment and Assumption. FNBB and BOA shall have entered into an
Assignment and Assumption Agreement providing for the assignment by FNBB to BOA
of an undivided interest in $10,000,000 of its initial $35,000,000 Commitment on
a pari passu basis.
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0.1 Other. The Agent shall have reviewed such other documents, instruments,
certificates, opinions, assurances, consents and approvals as the Agent or the
Agent's Special Counsel may reasonably have requested.
1. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, whether on or after the Closing
Date, shall also be subject to the satisfaction of the following conditions
precedent:
0.1 Prior Conditions Satisfied. All conditions set forth in paragraph 10 or
in paragraph 10 of the Prior Credit Agreement shall continue to be satisfied
as of the date upon which any Loan is to be made.
0.1 Representations True; No Default. Each of the representations and warranties
made by or on behalf of the Borrower or any of its Subsidiaries contained in
this Agreement, the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with this Agreement shall be true as of
the date as of which they were made and shall also be true at and as of the time
of the making of such Loan, with the same effect as if made at and as of that
time (except to the extent of changes resulting from transactions contemplated
or permitted by this Agreement and the other Loan Documents and changes
occurring in the ordinary course of business that singly or in the aggregate are
not materially adverse, and except to the extent that such representations and
warranties relate expressly to an earlier date) and no Default or Event of
Default shall have occurred and be continuing. Each of the Banks shall have
received a certificate of the Borrower signed by an authorized officer of the
Borrower to such effect.
0.1 No Legal Impediment. There shall be no law or regulations thereunder or
interpretations thereof that in the reasonable opinion of any Bank would make
it illegal for such Bank to make such Loan.
0.1 Governmental Regulation. Each Bank shall have received such statements in
substance and form reasonably satisfactory to such Bank as such Bank shall
require for the purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the Federal Reserve
System.
0.1 Proceedings and Documents. All proceedings in connection with the Loan shall
be satisfactory in substance and in form to the Majority Banks, and the Majority
Banks shall have received all information and such counterpart originals or
certified or other copies of such documents as the Majority Banks may reasonably
request.
0.1 Borrowing Documents. In the case of any request for a Loan, the Agent
shall have received the request for a Loan required by paragraph 2.5 in the
form of Exhibit B hereto, fully completed.
0.1 Endorsement to Title Policy. At such times as Agent shall determine in its
discretion, to the extent available under applicable law, a "date down"
endorsement to each Title Policy indicating no change in the state of title and
containing no survey exceptions not approved by the Majority Banks, which
endorsement shall, expressly or by virtue of a proper "revolving credit" clause
or endorsement in the Title Policy, increase the coverage of the Title Policy to
the aggregate amount of all Loans advanced and outstanding on or before the
effective date of such endorsement, or if such endorsement is not available,
such other evidence and assurances as the Agent may reasonably require (which
evidence may include, without limitation, an affidavit from the
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Borrower stating that there have been no changes in title from the date of the
last effective date of the Title Policy).
0.1 Future Advances Tax Payment. As a condition precedent to any Bank's
obligations to make any Loans available to the Borrower hereunder, the Borrower
will pay to the Agent any mortgage, recording, intangible, documentary stamp or
other similar taxes and charges which the Agent reasonably determines to be
payable as a result of such Loan to any state or any county or municipality
thereof in which any of the Mortgaged Properties are located and deliver to the
Agent such affidavits or other information which the Agent reasonably determines
to be necessary in connection with the payment of such tax, in order to insure
that the Security Deeds on Mortgaged Property located in such state secure the
Borrower's obligation with respect to the Loans then being requested by the
Borrower. The provisions of this paragraph 11.8 shall be without limitation of
the Borrower's obligations under other provisions of the Loan Documents,
including without limitation paragraph 15 hereof.
1. EVENTS OF DEFAULT; ACCELERATION; ETC.
0.1 Events of Default and Acceleration. If any of the following events ("Events
of Default" or, if the giving of notice or the lapse of time or both is
required, then, prior to such notice or lapse of time, "Defaults") shall occur:
(a) the Borrower shall fail to pay any principal of the Loans within ten (10)
days after the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(a) the Borrower shall fail to pay any interest on the Loans or any other fees
or sums due hereunder or under any of the other Loan Documents, within ten (10)
days after the same shall become due and payable, whether at the stated date of
maturity or any accelerated date of maturity or at any other date fixed for
payment;
(a) the Borrower shall fail to comply with any covenant contained in paragraph
9, and such failure shall continue for thirty (30) days after written notice
thereof shall have been given to the Borrower by the Agent; (a) the Borrower or
any of its Subsidiaries shall fail to perform any other material term, covenant
or agreement contained herein or in any of the other Loan Documents (other than
those specified above in this paragraph 12);
(a) any representation or warranty made by or on behalf of the Borrower or any
of its Subsidiaries in this Agreement or any other Loan Document, or in any
report, certificate, financial statement, request for a Loan, or in any other
document or instrument delivered pursuant to or in connection with this
Agreement, any advance of a Loan or any of the other Loan Documents shall prove
to have been false in any material respect upon the date when made or deemed to
have been made or repeated;
(a) the Borrower or any of its Subsidiaries shall fail to pay at maturity, or
within any applicable period of grace, any obligation for borrowed money or
credit received or other Indebtedness, or fail to observe or perform any
material term, covenant or agreement contained in any agreement by which it is
bound, evidencing or securing any such borrowed money or credit received or
other Indebtedness for such period of time as would permit (assuming the giving
of appropriate notice if required) the holder or holders thereof or of
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any obligations issued thereunder to accelerate the maturity thereof; provided
that the events described in this paragraph 12.1(f) shall not constitute an
Event of Default unless such failure to perform, together with other failures to
perform as described in this paragraph 12.1(f), involve singly or in the
aggregate obligations for borrowed money or credit received totalling in excess
of $1,000,000;
(a) the Borrower or any of its Subsidiaries, (i) shall make an assignment for
the benefit of creditors, or admit in writing its general inability to pay or
generally fail to pay its debts as they mature or become due, or shall petition
or apply for the appointment of a trustee or other custodian, liquidator or
receiver of any such Person or of any substantial part of the assets of any
thereof, (ii) shall commence any case or other proceeding relating to any such
Person under any bankruptcy, reorganization, arrangement, insolvency,
readjustment of debt, dissolution or liquidation or similar law of any
jurisdiction, now or hereafter in effect, or (iii) shall take any action to
authorize or in furtherance of any of the foregoing;
(a) a petition or application shall be filed for the appointment of a trustee or
other custodian, liquidator or receiver of any of the Borrower or any of its
Subsidiaries or any substantial part of the assets of any thereof, or a case or
other proceeding shall be commenced against any such Person under any
bankruptcy, reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction, now or hereafter
in effect, and any such Person shall indicate its approval thereof, consent
thereto or acquiescence therein or such petition, application, case or
proceeding shall not have been dismissed within sixty (60) days following the
filing or commencement thereof;
(a) a decree or order is entered appointing any such trustee, custodian,
liquidator or receiver or adjudicating any of the Borrower or any of its
Subsidiaries bankrupt or insolvent, or approving a petition in any such case or
other proceeding, or a decree or order for relief is entered in respect of any
such Person, in an involuntary case under federal bankruptcy laws as now or
hereafter constituted;
(a) there shall remain in force, undischarged, unsatisfied and unstayed, for
more than sixty (60) days, whether or not consecutive, any uninsured final
judgment against any of the Borrower or any of its Subsidiaries that, with other
outstanding uninsured final judgments, undischarged, against such Persons
exceeds in the aggregate $250,000.00;
(a) if any of the Loan Documents shall be canceled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or with the
express prior written agreement, consent or approval of the Banks, or any action
at law, suit in equity or other legal proceeding to cancel, revoke or rescind
any of the Loan Documents shall be commenced by or on behalf of the Borrower or
any of its holders of Voting Interests, or any court or any other governmental
or regulatory authority or agency of competent jurisdiction shall make a
determination that, or issue a judgment, order, decree or ruling to the effect
that, any one or more of the Loan Documents is illegal, invalid or unenforceable
in accordance with the terms thereof;
(a) any dissolution, termination, partial or complete liquidation, merger or
consolidation of the Borrower or any sale, transfer or other disposition of the
assets of the Borrower other than as permitted under the terms of this Agreement
or the other Loan Documents;
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(a) any suit or proceeding shall be filed against the Borrower or any of the
Mortgaged Properties which in the good faith business judgment of the Majority
Banks after giving consideration to the likelihood of success of such suit or
proceeding and the availability of insurance to cover any judgment with respect
thereto and based on the information available to them, if adversely determined,
would have a materially adverse effect on the ability of the Borrower to perform
each and every one of its obligations under and by virtue of the Loan Documents;
(a) the Borrower shall be indicted for a federal crime, a punishment for which
could include the forfeiture of any assets of such person included in the
Mortgaged Property;
(a) with respect to any Guaranteed Pension Plan, an ERISA Reportable Event shall
have occurred and the Majority Banks shall have determined in their reasonable
discretion that such event reasonably could be expected to result in liability
of the Borrower or any of its Subsidiaries to the PBGC or such Guaranteed
Pension Plan in an aggregate amount exceeding $1,000,000 and such event in the
circumstances occurring reasonably could constitute grounds for the termination
of such Guaranteed Pension Plan by the PBGC or for the appointment by the
appropriate United States District Court of a trustee to administer such
Guaranteed Pension Plan; or a trustee shall have been appointed by the United
States District Court to administer such Plan; or the PBGC shall have instituted
proceedings to terminate such Guaranteed Pension Plan; (a) Richard May and
Richard Rasley shall in the aggregate own, directly or indirectly, less than one
percent (1.0%) of the issued and outstanding shares of the capital stock of the
Borrower;
(a) Richard May shall cease to be the Chairman and Chief Executive Officer of,
or Richard Rasley shall cease to be the Secretary of, the Borrower and a
competent and experienced successor for such Person shall not be approved by the
Majority Banks within six (6) months of such event, such approval not to be
unreasonably withheld; or
(a) any Event of Default as defined in any of the other Loan Documents, shall
occur;
then, and in any such event, the Agent may, and upon the request of the Majority
Banks shall, by notice in writing to the Borrower declare all amounts owing with
respect to this Agreement, the Notes and the other Loan Documents to be, and
they shall thereupon forthwith become, immediately due and payable without
presentment, demand, protest or other notice of any kind, all of which are
hereby expressly waived by the Borrower; provided that in the event of any Event
of Default specified in paragraph 12.1(g), paragraph 12.1(h) or paragraph
12.1(i), all such amounts shall become immediately due and payable automatically
and without any requirement of notice from any of the Banks or the Agent.
0.1 Certain Cure Periods.
(a) In the event that there shall occur any Default under paragraph 12.1(c),
then within five (5) Business Days after receipt of notice of such Default from
the Agent or the Majority Banks the Borrower may elect to cure such Default by
providing additional Collateral consisting of Potential Collateral, and/or to
reduce the outstanding Loans to it, in which event such actions shall be
completed not later than fifteen (15) days following the date on which the
Borrower is notified that the Majority Banks have approved the
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Borrower's proposed actions (or thirty (30) days in the event that the Borrower
intends to provide additional Mortgaged Property). The Borrower's notice of its
election pursuant to the preceding sentence shall be delivered to the Agent
within the period of five (5) Business Days provided above. Within five (5)
Business Days after receipt of such advice, the Majority Banks shall advise the
Borrower as to whether in their good faith judgment the actions proposed by the
Borrower are sufficient to cure such Default without the creation of any other
Default hereunder. In the event that the Majority Banks determine the Borrower's
proposal is insufficient to cure such Default or is otherwise not in accordance
with the terms of this Agreement, the Borrower within an additional three (3)
Business Days after such negative notice may submit to the Agent an alternative
plan or evidence establishing that the Borrower's original election was
sufficient. In the event that within the times provided herein the Borrower
shall have failed to provide evidence satisfactory to the Majority Banks that
the Borrower's proposed actions are sufficient to cure such Default in
accordance with the terms hereof, the cure period shall terminate and such
Default immediately shall constitute an Event of Default. (a) In the event that
the Borrower shall elect in whole or in part under paragraph 12.2(a) to provide
additional Mortgaged Property, (i) the Real Estate to be added to the Collateral
shall be Eligible Real Estate and on or prior to the expiration of the 30-day
period each of the Eligible Real Estate Qualification Documents shall have been
completed at the Borrower's expense and provided to the Agent for the benefit of
the Banks, and (ii) the Borrower, in addition to any other amounts payable under
this Agreement, shall pay to the Agent within fifteen (15) days following the
commencement of such 60 day period a review fee in the amount of $15,000.00,
which fee shall be nonrefundable under any circumstances.
0.1 Termination of Commitments. If any one or more Events of Default specified
in paragraph 12.1(g), paragraph 12.1(h) or paragraph 12.1(i) shall occur, then
immediately and without any action on the part of the Agent or any Bank any
unused portion of the credit hereunder shall terminate and the Banks shall be
relieved of all obligations to make Loans to the Borrower. If any other Event of
Default shall have occurred, the Agent, upon the election of the Majority Banks,
may by notice to the Borrower terminate the obligation to make Loans to the
Borrower. No termination under this paragraph 12.3 shall relieve the Borrower of
its obligations to the Banks arising under this Agreement or the other Loan
Documents.
0.1 Remedies. In case any one or more of the Events of Default shall have
occurred and be continuing, and whether or not the Banks shall have accelerated
the maturity of the Loans pursuant to paragraph 12.1, the Agent on behalf of the
Banks, may, with the consent of the Majority Banks but not otherwise, proceed to
protect and enforce their rights and remedies under this Agreement, the Notes or
any of the other Loan Documents by suit in equity, action at law or other
appropriate proceeding, whether for the specific performance of any covenant or
agreement contained in this Agreement and the other Loan Documents or any
instrument pursuant to which the Obligations are evidenced, including to the
full extent permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right. No remedy herein conferred upon the Agent or the
holder of any Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an
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attorney at law, the Borrower shall pay all costs of collection including, but
not limited to, reasonable attorneys' fees.
0.1 Distribution of Collateral Proceeds. In the event that, following the
occurrence or during the continuance of any Event of Default, any monies are
received in connection with the enforcement of any of the Security Documents, or
otherwise with respect to the realization upon any of the Collateral, such
monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the reimbursement of, the
Agent for or in respect of all reasonable costs, expenses, disbursements and
losses which shall have been incurred or sustained by the Agent to protect or
preserve the collateral or in connection with the collection of such monies by
the Agent, for the exercise, protection or enforcement by the Agent of all or
any of the rights, remedies, powers and privileges of the Agent under this
Agreement or any of the other Loan Documents or in respect of the Collateral or
in support of any provision of adequate indemnity to the Agent against any taxes
or liens which by law shall have, or may have, priority over the rights of the
Agent to such monies;
(a) Second, to all other Obligations in such order or preference as the Majority
Banks shall determine; provided, however, that (i) distributions in respect of
such Obligations shall be made pari passu among Obligations with respect to the
Agent's fee payable pursuant to paragraph 4.3 and all other Obligations, (ii) in
the event that any Bank shall have wrongfully failed or refused to make an
advance under paragraph 2.6 and such failure or refusal shall be continuing,
advances made by other Banks during the pendency of such failure or refusal
shall be entitled to be repaid as to principal and accrued interest in priority
to the other Obligations described in this subsection (b), (iii) Obligations
owing to the Banks with respect to each type of Obligation such as interest,
principal, fees and expenses, shall be made among the Banks pro rata, and (iv)
amounts received or realized from the Borrower shall be applied against the
Obligations of the Borrower; and provided, further that the Majority Banks may
in their discretion make proper allowance to take into account any Obligations
not then due and payable; and
0.1 Third, the excess, if any, shall be returned to the Borrower or to such
other Persons as are entitled thereto.
1. SETOFF.
Regardless of the adequacy of any collateral, during the continuance of any
Event of Default, any deposits (general or specific, time or demand, provisional
or final, regardless of currency, maturity, or the branch of where such deposits
are held) or other sums credited by or due from any of the Banks to the Borrower
and any securities or other property of the Borrower in the possession of such
Bank may be applied to or set off against the payment of Obligations of such
Person and any and all other liabilities, direct, or indirect, absolute or
contingent, due or to become due, now existing or hereafter arising, of such
Person to such Bank. Each of the Banks agrees with each other Bank that if such
Bank shall receive from the Borrower, whether by voluntary payment, exercise of
the right of setoff, or otherwise, and shall retain and apply to the payment of
the Note or Notes held by such Bank any amount in excess of its ratable portion
of the payments received by all of the Banks with respect to the Notes held by
all of the Banks, such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of
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the Notes held by it its proportionate payment as contemplated by this
Agreement; provided that if all or any part of such excess payment is thereafter
recovered from such Bank, such disposition and arrangements shall be rescinded
and the amount restored to the extent of such recovery, but without interest.
1. THE AGENT.
0.1 Authorization. The Agent is authorized to take such action on behalf of each
of the Banks and to exercise all such powers as are hereunder and under any of
the other Loan Documents and any related documents delegated to the Agent,
together with such powers as are reasonably incident thereto, provided that no
duties or responsibilities not expressly assumed herein or therein shall be
implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank. The Borrower and
any other Person shall be entitled to conclusively rely on a statement from the
Agent that it has the authority to act for and bind the Banks pursuant to this
Agreement and the other Loan Documents.
0.1 Employees and Agents. The Agent may exercise its powers and execute its
duties by or through employees or agents and shall be entitled to take, and to
rely on, advice of counsel concerning all matters pertaining to its rights and
duties under this Agreement and the other Loan Documents. The Agent may utilize
the services of such Persons as the Agent may reasonably determine, and all
reasonable fees and expenses of any such Persons shall be paid by the Borrower.
0.1 No Liability. Neither the Agent nor any of its shareholders, directors,
officers or employees nor any other Person assisting them in their duties nor
any agent, or employee thereof, shall be liable to any of the Banks for any
waiver, consent or approval given or any action taken, or omitted to be taken,
in good faith by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the consequences
of any oversight or error of judgment whatsoever, except that the Agent or such
other Person, as the case may be, may be liable for losses due to its willful
misconduct or gross negligence.
0.1 No Representations. The Agent shall not be responsible for the execution or
validity or enforceability of this Agreement, the Notes, any of the other Loan
Documents or any instrument at any time constituting, or intended to constitute,
collateral security for the Notes, or for the value of any such collateral
security or for the validity, enforceability or collectability of any such
amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Borrower or any of its Subsidiaries, or be bound to ascertain or inquire as
to the performance or observance of any of the terms, conditions, covenants or
agreements herein or in any other of the Loan Documents. The Agent shall not be
bound to ascertain whether any notice, consent, waiver or request delivered to
it by the Borrower or any holder of any of the Notes shall have been duly
authorized or is true, accurate and complete. The Agent has not made nor does it
now make any representations or warranties, express or implied, nor does it
assume any liability to the Banks, with respect to the creditworthiness or
financial condition of the Borrower or any of its Subsidiaries. Each Bank
acknowledges that it has, independently and without reliance upon the Agent or
any other Bank, and based upon such
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information and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement. Each Bank also acknowledges
that it will, independently and without reliance upon the Agent or any other
Bank, based upon such information and documents as it deems appropriate at the
time, continue to make its own credit analysis and decisions in taking or not
taking action under this Agreement and the other Loan Documents.
0.1 Payments.
(a) A payment by the Borrower to the Agent hereunder or under any of the other
Loan Documents for the account of any Bank shall constitute a payment to such
Bank. The Agent agrees to distribute to each Bank not later than one Business
Day after the Agent's receipt of good funds, determined in accordance with the
Agent's customary practices, such Bank's pro rata share of payments received by
the Agent for the account of the Banks except as otherwise expressly provided
herein or in any of the other Loan Documents. In the event that the Agent fails
to distribute such amounts within one Business Day as provided above, the Agent
shall pay interest on such amount at a rate per annum equal to the Federal Funds
Effective Rate from time to time in effect.
(a) If in the opinion of the Agent the distribution of any amount received by it
in such capacity hereunder, under the Notes or under any of the other Loan
Documents might involve it in liability, it may refrain from making distribution
until its right to make distribution shall have been adjudicated by a court of
competent jurisdiction. If a court of competent jurisdiction shall adjudge that
any amount received and distributed by the Agent is to be repaid, each Person to
whom any such distribution shall have been made shall either repay to the Agent
its proportionate share of the amount so adjudged to be repaid or shall pay over
the same in such manner and to such Persons as shall be determined by such
court.
(A) Notwithstanding anything to the contrary contained in this Agreement or any
of the other Loan Documents, any Bank that fails (i) to make available to the
Agent its pro rata share of any Loan or (ii) to comply with the provisions of
paragraph 13 with respect to making dispositions and arrangements with the other
Banks, where such Bank's share of any payment received, whether by setoff or
otherwise, is in excess of its pro rata share of such payments due and payable
to all of the Banks, in each case as, when and to the full extent required by
the provisions of this Agreement, shall be deemed delinquent (a "Delinquent
Bank") and shall be deemed a Delinquent Bank until such time as such delinquency
is satisfied. A Delinquent Bank shall be deemed to have assigned any and all
payments due to it from the Borrower, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining nondelinquent Banks for
application to, and reduction of, their respective pro rata shares of all
outstanding Loans. The Delinquent Bank hereby authorizes the Agent to distribute
such payments to the nondelinquent Banks in proportion to their respective pro
rata shares of all outstanding Loans. A Delinquent Bank shall be deemed to have
satisfied in full a delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent Banks or as a
result of other payments by the Delinquent Banks to the nondelinquent Banks, the
Banks' respective pro rata shares of all outstanding Loans have returned to
those in effect immediately prior to such delinquency and without giving effect
to the nonpayment causing such delinquency.
0.1 Holders of Notes. Subject to the terms of Article 18, the Agent may deem
and treat the payee of any Note as the absolute owner or purchaser thereof for
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all purposes hereof until it shall have been furnished in writing with a
different name by such payee or by a subsequent holder, assignee or transferee.
0.1 Indemnity. The Banks ratably agree hereby to indemnify and hold harmless the
Agent from and against any and all claims, actions and suits (whether groundless
or otherwise), losses, damages, costs, expenses (including any expenses for
which the Agent has not been reimbursed by the Borrower as required by paragraph
15), and liabilities of every nature and character arising out of or related to
this Agreement, the Notes, or any of the other Loan Documents or the
transactions contemplated or evidenced hereby or thereby, or the Agent's actions
taken hereunder or thereunder, except to the extent that any of the same shall
be directly caused by the Agent's willful misconduct or gross negligence or
arises on account of a strictly internal administrative or regulatory matter
relating to the Agent (such as the Agent's legal lending limit) or related
solely to a dispute between the Agent and one or more of the Banks.
0.1 Agent as Bank. In its individual capacity, FNBB shall have the same
obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as it
would have were it not also the Agent.
0.1 Resignation. The Agent may resign at any time by giving 60 days' prior
written notice thereof to the Banks and the Borrower. Upon any such resignation,
the Majority Banks shall have the right to appoint as a successor Agent any Bank
or any bank whose senior debt obligations are rated not less than "A" or its
equivalent by Moody's Investors Service, Inc. or not less than "A" or its
equivalent by Standard & Poor's corporation and which has a net worth of not
less than $500,000,000. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been so appointed by the Majority
Banks and shall have accepted such appointment within 30 days after the retiring
Agent's giving of notice of resignation, then the retiring Agent may, on behalf
of the Banks, appoint a successor Agent, which shall be any Bank or a bank whose
debt obligations are rated not less than "A" or its equivalent by Moody's
Investors Service, Inc. or not less than "A" or its equivalent by Standard &
Poor's Corporation and which has a net worth of not less than $500,000,000. Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder as Agent.
After any retiring Agent's resignation, the provisions of this Agreement and the
other Loan Documents 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 Agent.
0.1 Duties in the Case of Enforcement. In case one or more Events of Default
have occurred and shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Agent shall, if (a) so requested by the
Majority Banks and (b) the Banks have provided to the Agent such additional
indemnities and assurances against expenses and liabilities as the Agent may
reasonably request, proceed to enforce the provisions of the Security Documents
authorizing the sale or other disposition of all or any part of the Collateral
and exercise all or any such other legal and equitable and other rights or
remedies as it may have in respect of such Collateral. The Majority Banks may
direct the Agent in writing as to the method and the extent of any such sale or
other disposition, the Banks hereby agreeing to indemnify and
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hold the Agent harmless from all liabilities incurred in respect of all actions
taken or omitted in accordance with such directions, provided that the Agent
need not comply with any such direction to the extent that the Agent reasonably
believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
1. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and reproducing
this Agreement, the other Loan Documents and the other agreements and
instruments mentioned herein, (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income, except that
the Agent and the Banks shall be entitled to indemnification for any and all
amounts paid by them in respect of taxes based on income or other taxes assessed
by any State in which Mortgaged Property or other Collateral is located, such
indemnification to be limited to taxes due solely on account of the granting of
Collateral under the Security Documents and to be net of any credit allowed to
the indemnified party from any other State on account of the payment or
incurrence of such tax by such indemnified party), including any recording,
mortgage, documentary or intangibles taxes in connection with the Security Deeds
and other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes payable by
the Agent or any of the Banks after the Closing Date (the Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) all
title insurance premiums, appraisal fees, engineer's fees, reasonable internal
charges of the Agent (determined in good faith and in accordance with the
Agent's internal policies applicable generally to its customers) for commercial
finance exams and engineering and environmental reviews and the reasonable fees,
expenses and disbursements of the counsel to the Agent and any local counsel to
the Agent incurred in connection with the preparation, administration or
interpretation of the Loan Documents and other instruments mentioned herein
(excluding, however, the preparation of agreements evidencing participation
granted under paragraph 18.4), each closing hereunder, and amendments,
modifications, approvals, consents or waivers hereto or hereunder, (d) the
reasonable fees, expenses and disbursements of the Agent incurred by the Agent
in connection with the preparation or interpretation of the Loan Documents and
other instruments mentioned herein, and the making of each advance hereunder,
(e) all reasonable out-of-pocket expenses (including reasonable attorneys' fees
and costs, which attorneys may be employees of any Bank or the Agent and the
fees and costs of appraisers, engineers, investment bankers or other experts
retained by any Bank or the Agent) incurred by any Bank or the Agent in
connection with (i) the enforcement of or preservation of rights under any of
the Loan Documents against the Borrower or the administration thereof after the
occurrence of a Default or Event of Default and (ii) any litigation, proceeding
or dispute whether arising hereunder or otherwise, in any way related to the
Agent's or any of the Bank's relationship with the Borrower, (f) all reasonable
fees, expenses and disbursements of any Bank or the Agent incurred in connection
with UCC searches, UCC filings, title rundowns, title searches or mortgage
recordings, and (g) all reasonable fees, expenses and disbursements (including
reasonable attorneys' fees and costs) which may be incurred by FNBB and the
other Banks in connection with the execution and delivery of this Agreement and
the other Loan Documents. The covenants of this paragraph 15 shall survive
payment or satisfaction of payment of amounts owing with respect to the Notes.
1. INDEMNIFICATION.
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The Borrower agrees to indemnify and hold harmless the Agent and the Banks and
each director, officer, employee, agent and Person who controls the Agent or any
Bank from and against any and all claims, actions and suits, whether groundless
or otherwise, and from and against any and all liabilities, losses, damages and
expenses of every nature and character arising out of or relating to this
Agreement or any of the other Loan Documents or the transactions contemplated
hereby and thereby including, without limitation, (a) any leasing fees and any
brokerage, finders or similar fees asserted against any Person indemnified under
this paragraph 16 based upon any agreement, arrangement or action made or taken,
or alleged to have been made or taken, by the Borrower or any of its
Subsidiaries, (b) any condition of the Mortgaged Properties, (c) any actual or
proposed use by the Borrower of the proceeds of any of the Loans, (d) any actual
or alleged infringement of any patent, copyright, trademark, service mark or
similar right of any of the Borrower or any of its Subsidiaries comprised in the
Collateral, (e) the Borrower entering into or performing this Agreement or any
of the other Loan Documents, (f) any actual or alleged violation of any law,
ordinance, code, order, rule, regulation, approval, consent, permit or license
relating to the Mortgaged Property, or (g) with respect to the Borrower and its
Subsidiaries and their respective properties and assets, the violation of any
Environmental Law, the Release or threatened Release of any Hazardous Substances
or any action, suit, proceeding or investigation brought or threatened with
respect to any Hazardous Substances (including, but not limited to claims with
respect to wrongful death, personal injury or damage to property), in each case
including, without limitation, the reasonable fees and disbursements of counsel
and allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that the
Borrower shall not be obligated under this paragraph 16 to indemnify any Person
for liabilities arising from such Person's own gross negligence or willful
misconduct. In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select a single nationally recognized law firm as their own
counsel and, in addition to the foregoing indemnity, the Borrower agrees to pay
promptly the reasonable fees and expenses of such counsel. If, and to the extent
that the obligations of the Borrower under this paragraph 16 are unenforceable
for any reason, the Borrower hereby agrees to make the maximum contribution to
the payment in satisfaction of such obligations which is permissible under
applicable law. The provisions of this paragraph 16 shall survive the repayment
of the Loans and the termination of the obligations of the Banks hereunder.
1. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or other papers
delivered by or on behalf of the Borrower or any of its Subsidiaries pursuant
hereto or thereto shall be deemed to have been relied upon by the Banks and the
Agent, notwithstanding any investigation heretofore or hereafter made by any of
them, and shall survive the making by the Banks of any of the Loans, as herein
contemplated, and shall continue in full force and effect so long as any amount
due under this Agreement or the Notes or any of the other Loan Documents remains
outstanding or any Bank has any obligation to make any Loans. The
indemnification obligations of the Borrower provided herein and the other Loan
Documents shall survive the full repayment of amounts due and the termination of
the obligations of the Banks hereunder and thereunder to the extent provided
herein and therein. All statements contained in any certificate or other paper
delivered to any Bank or the Agent at any time by or on behalf of the Borrower
or any of its Subsidiaries pursuant hereto or in
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connection with the transactions contemplated hereby shall constitute
representations and warranties by the such person hereunder.
1. ASSIGNMENT AND PARTICIPATION.
0.1 Conditions to Assignment by Banks. Except as provided herein, each Bank may
assign to one or more Eligible Assignees all or a portion of its interests,
rights and obligations under this Agreement (including all or a portion of its
Commitment Percentage and Commitment and the same portion of the Loans at the
time owing to it, and the Notes held by it); provided that (a) each such
assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (b) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), a notice of such assignment, together with
any Notes subject to such assignment, (c) in no event shall any voting, consent
or approval rights of a Bank be assigned to any Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by, the Borrower, which rights shall instead be allocated pro rata
among the other remaining Banks, and (d) such Eligible Assignee shall acquire an
interest in the Loans of not less than $10,000,000 . Upon execution, delivery
and acceptance of such notice of assignment, (i) the Eligible Assignee
thereunder shall be a party hereto and all other Loan Documents executed by the
Banks and, to the extent provided in such assignment, have the rights and
obligations of a Bank hereunder, and (ii) the assigning Bank shall, to the
extent provided in such assignment and upon payment to the Agent of the
registration fee referred to in paragraph 18.2, be released from its obligations
under this Agreement. In connection with each assignment, the Assignee shall
represent and warrant to the Agent, the assignor and each other Bank as to
whether such Eligible Assignee is controlling, controlled by, under common
control with or is not otherwise free from influence or control by, the
Borrower.
0.1 Register. The Agent shall maintain a copy of each assignment delivered to it
and a register or similar list (the "Register") for the recordation of the names
and addresses of the Banks and the Commitment Percentages of, and principal
amount of the Loans owing to the Banks from time to time. The entries in the
Register shall be conclusive, in the absence of manifest error, and the
Borrower, the Agent and the Banks may treat each Person whose name is recorded
in the Register as a Bank hereunder for all purposes of this Agreement. The
Register shall be available for inspection by the Borrower and the Banks at any
reasonable time and from time to time upon reasonable prior notice. Upon each
such recordation, the assigning Bank agrees to pay to the Agent a registration
fee in the sum of $2,000.
0.1 New Notes. Upon its receipt of an assignment executed by the parties to such
assignment, together with each Note subject to such assignment, the Agent shall
(a) record the information contained therein in the Register, and (b) give
prompt notice thereof to the Borrower and the Banks (other than the assigning
Bank). Within five Business Days after receipt of such notice, the Borrower, at
its own expense, shall execute and deliver to the Agent, in exchange for each
surrendered Note, a new Note to the order of such assignee in an amount equal to
the amount assumed by such assignee pursuant to such assignment and, if the
assigning Bank has retained some portion of its obligations hereunder, a new
Note to the order of the assigning Bank in an amount equal to the amount
retained by it hereunder. Such new Notes shall provide that they are
replacements for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered Notes, shall
be dated the effective date of such assignment and
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shall otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be canceled and returned to the Borrower.
0.1 Participations. Each Bank may sell participations to one or more Eligible
Participants or other entities in all or a portion of such Bank's rights and
obligations under this Agreement and the other Loan Documents; provided that (a)
any such sale or participation shall not affect the rights and duties of the
selling Bank hereunder to the Borrower, (b) such participation shall not entitle
such Eligible Participant to any rights or privileges under this Agreement or
any Loan Documents, including without limitation, the right to approve waivers,
amendments or modifications, (c) such Eligible Participant shall have no direct
rights against the Borrower except the rights granted to the Banks pursuant to
paragraph 13, (d) such sale is effected in accordance with all applicable laws,
and (e) such Eligible Participant shall not be a Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by the Borrower. Any Bank which sells a participation shall promptly
notify the Agent of such sale and the identity of the purchaser of such
interest.
0.1 Pledge by Bank. Any Bank may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any portion of its
Note) to any of the twelve Federal Reserve Banks organized under paragraph 4 of
the Federal Reserve Act, 12 U.S.C. paragraph 341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
0.1 No Assignment by Borrower. The Borrower shall not assign or transfer any
of its rights or obligations under any of the Loan Documents without the prior
written consent of each of the Banks.
0.1 Disclosure. The Borrower agrees that in addition to disclosures made in
accordance with standard banking practices any Bank may disclose information
obtained by such Bank pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder.
0.1 Amendments to Loan Documents. Upon any such assignment or participation, the
Borrower shall, upon the request of the Agent, enter into such documents as may
be reasonably required by the Agent to modify the Loan Documents to reflect such
assignment or participation.
0.1 Borrower Acknowledgment of Assignment to BOA. The Borrower hereby
acknowledges that (i) BOA has acquired a portion of FNBB's interest (the
"Assigned Interest") in the Revolving Loan pursuant to that certain Assignment
and Assumption Agreement dated June 28, 1996 by and between FNBB and BOA; (ii)
the Borrower has no existing claim against FNBB under the Prior Credit Agreement
or this Credit Agreement or any of the Loan Documents; (iii) FNBB, including in
its capacity as Agent, is not in violation of, or in default under, any of the
Loan Documents and the Borrower has no knowledge of any facts or circumstances
that would give rise to a claim or right of offset by the Borrower under any of
the Loan Documents; (iv) BOA's Commitment and Commitment Percentage will, as of
June 28, 1996, be as set forth on Schedule 1 hereto, without the need for any
further requirements or conditions being satisfied, including, without
limitation, without the requirement for recording a notice of assignment as set
forth in paragraph 18.1; (v) upon assignment of the Assigned Interest and
execution of this Agreement, BOA shall be entitled to an undivided interest to
the extent of its Commitment and Commitment Percentage on a pari passu basis
with FNBB in and to the rights of the Banks with respect to the Loans and the
Loan Documents; and (vi) the
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outstanding principal balance of the Loans as of the date hereof is
$29,002,367.50 and interest has been paid through and including May 31, 1996.
1. NOTICES.
Each notice, demand, election or request provided for or permitted to be given
pursuant to this Agreement (hereinafter in this paragraph 19 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
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If to the Agent or FNBB:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
With a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Telecopy No.: (770) 390 8434
and to:
Winston & Strawn
35 West Wacker Drive
Chicago, Illinois 60601
Attn: Charles E. Stahl
Telecopy No.: (312) 558 5700
If to BOA:
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Andy Hensel, Real Estate Department
Telecopy: (312) 974 4970
If to the Borrower:
Great Lakes REIT, Inc.
2311 West 22nd Street
Suite 109
Oak Brook, Illinois 60521
Attn: Richard L. Rasley
Telecopy No. (708) 368 2929
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With a copy to:
McBride, Baker & Coles
500 West Madison Street
40th Floor
Chicago, Illinois 60661
Attn: Anne Hamblin Schiave
Telecopy No.: (312) 993 9350
and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or upon
being deposited in the United States Mail as aforesaid. The time period in which
a response to such Notice must be given or any action taken with respect thereto
(if any), however, shall commence to run from the date of receipt if personally
delivered or sent by overnight courier, or if so deposited in the United States
Mail, the earlier of three (3) Business Days following such deposit or the date
of receipt as disclosed on the return receipt. Rejection or other refusal to
accept or the inability to deliver because of changed address for which no
notice was given shall be deemed to be receipt of the Notice sent. By giving at
least fifteen (15) days prior Notice thereof, the Borrower, a Bank or Agent
shall have the right from time to time and at any time during the term of this
Agreement to change their respective addresses and each shall have the right to
specify as its address any other address within the United States of America.
1. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of a lender
and borrower, and nothing contained herein or in any of the other Loan Documents
shall in any manner be construed as making the parties hereto partners, joint
venturers or any other relationship other than lender and borrower.
1. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS OTHERWISE
SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE STATE OF
ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS OR CHOICE
OF LAW). THE BORROWER AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS AGREEMENT
OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN THE COURTS OF THE STATE OF
ILLINOIS OR ANY FEDERAL COURT SITTING THEREIN AND CONSENT TO THE NONEXCLUSIVE
JURISDICTION OF SUCH COURT AND THE SERVICE OF PROCESS IN ANY SUCH SUIT BRING
MADE UPON THE BORROWER BY MAIL AT THE ADDRESS SPECIFIED IN PARAGRAPH 19. THE
BORROWER HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE
VENUE OF ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
1. HEADINGS.
The captions in this Agreement are for convenience of reference only and shall
not define or limit the provisions hereof.
1. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several counterparts
and by each party on a separate counterpart, each of which when so executed and
delivered shall be an original, and all of which together
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shall constitute one instrument. In proving this Agreement it shall not be
necessary to produce or account for more than one such counterpart signed by the
party against whom enforcement is sought.
1. ENTIRE AGREEMENT, ETC.
The Loan Documents and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with respect to the
transactions contemplated hereby. Neither this Agreement nor any term hereof may
be changed, waived, discharged or terminated, except as provided in paragraph
27.
1. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
EACH OF THE BORROWER, THE AGENT AND THE BANKS HEREBY WAIVES ITS RIGHT TO A
JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN
CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, ANY
RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE PERFORMANCE OF SUCH RIGHTS
AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, THE BORROWER
HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION
ANY SPECIAL, EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. THE BORROWER (A) CERTIFIES THAT NO
REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT, IN THE EVENT OF
LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B) ACKNOWLEDGES THAT THE
AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT AND THE OTHER
LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED IN THIS PARAGRAPH 25.
1. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend credit to and
generally engage in any kind of banking, trust or other business with the
Borrower, its Subsidiaries or any of their affiliates regardless of the capacity
of the Bank hereunder.
1. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given, and any term of
this Agreement or of any other instrument related hereto or mentioned herein may
be amended, and the performance or observance by the Borrower of any terms of
this Agreement or such other instrument or the continuance of any Default or
Event of Default may be waived (either generally or in a particular instance and
either retroactively or prospectively) with, but only with, the written consent
of the Majority Banks. Notwithstanding the foregoing, none of the following may
occur without the written consent of each Bank: a change in the rate of interest
on and the term of the Notes; the amount of the Commitments of the Banks; a
reduction or waiver of the principal of any unpaid Loan or any interest thereon;
the amount of any fee (other than late fees) payable to a Bank hereunder; the
release of the Borrower or any Collateral except as otherwise provided herein;
or an amendment of the definition of Majority Banks or of any requirement for
consent by all of the Banks. The amount of the Agent's fee payable for the
Agent's account and the provisions of paragraph 14 may not be amended without
the written consent of the Agent. The Borrower agrees to enter into such
modifications or amendments of this Agreement or the other Loan Documents as may
be reasonably requested by FNBB in connection with the acquisition by each Bank
acquiring all or a portion of
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the Commitment, provided that no such amendment or modification materially
affects or increases any of the obligations of the Borrower hereunder. No waiver
shall extend to or affect any obligation not expressly waived or impair any
right consequent thereon. No course of dealing or delay or omission on the part
of the Agent or any Bank in exercising any right shall operate as a waiver
thereof or otherwise be prejudicial thereto. No notice to or demand upon the
Borrower shall entitle the Borrower to other or further notice or demand in
similar or other circumstances.
1. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause or
provision hereof shall be held invalid or unenforceable in whole or in part in
any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
1. TIME OF THE ESSENCE.
Time is of the essence with respect to each and every covenant, agreement and
obligation of the Borrower under this Agreement and the other Loan Documents.
1. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND
MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL
AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE
PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN THE PARTIES ARE SET FORTH
BELOW.
[signature page follows]
Document Number: FORM8KLO.C1
1-14-97/01:49pm
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<PAGE>
IN WITNESS WHEREOF, the undersigned have duly executed this Agreement as a
sealed instrument as of the date first set forth above.
GREAT LAKES REIT, INC.
By:
Print Name:
Title:
THE FIRST NATIONAL BANK OF BOSTON, individually and as Agent
By:
Print Name:
Title:
BANK OF AMERICA ILLINOIS
By:
Print Name:
Title:
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EXHIBIT A
FORM OF NOTE
$______________ _______ __, 1996
FOR VALUE RECEIVED, the undersigned GREAT LAKES REIT, INC., a Maryland
corporation, hereby promises to pay to ___________________ or order, in
accordance with the terms of that certain Amended and Restated Master Revolving
Credit Agreement dated as of June 28, 1996 (the "Credit Agreement"), as from
time to time in effect, among the undersigned, The First National Bank of
Boston, for itself and as Agent, Bank of America Illinois, and such other Banks
as may be from time to time named therein, to the extent not sooner paid, on or
before the Maturity Date, the principal sum of ______________________ DOLLARS
($__________), or such amount as may be advanced by the payee hereof under the
Credit Agreement with daily interest from the date hereof, computed as provided
in the Credit Agreement, on the principal amount hereof from time to time
unpaid, at a rate per annum on each portion of the principal amount which shall
at all times be equal to the rate of interest applicable to such portion in
accordance with the Credit Agreement, and with interest on overdue principal
and, to the extent permitted by applicable law, on overdue installments of
interest and late charges at the rates provided in the Credit Agreement.
Interest shall be payable on the dates specified in the Credit Agreement, except
that all accrued interest shall be paid at the stated or accelerated maturity
hereof or upon the prepayment in full hereof. Capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
Payments hereunder shall be made to The First National Bank of Boston, as Agent
for the payee hereof, 100 Federal Street, Boston, Massachusetts 02110.
This Note is one of one or more Notes evidencing borrowings under and is
entitled to the benefits and subject to the provisions of the Credit Agreement.
The principal of this Note may be due and payable in whole or in part prior to
the maturity date stated above and is subject to mandatory prepayment in the
amounts and under the circumstances set forth in the Credit Agreement, and may
be prepaid in whole or from time to time in part, all as set forth in the Credit
Agreement.
Notwithstanding anything in this Note to the contrary, all agreements between
the undersigned Borrower and the Banks and the Agent, whether now existing or
hereafter arising and whether written or oral, are hereby limited so that in no
contingency, whether by reason of acceleration of the maturity of any of the
Obligations or otherwise, shall the interest contracted for, charged or received
by the Banks exceed the maximum amount permissible under applicable law. If,
from any circumstance whatsoever, interest would otherwise be payable to the
Banks in excess of the maximum lawful amount, the interest payable to the Banks
shall be reduced to the maximum amount permitted under applicable law; and if
from any circumstance the Banks shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Borrower and to the
payment of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Borrower, such excess shall be
refunded to the undersigned Borrower. All interest paid or agreed to be paid to
the Banks shall, to the extent permitted by applicable law, be amortized,
prorated,
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allocated and spread throughout the full period until payment in full of the
principal of the Obligations of the undersigned Borrower (including the period
of any renewal or extension thereof) so that the interest thereon for such full
period shall not exceed the maximum amount permitted by applicable law. This
paragraph shall control all agreements between the undersigned Borrower and the
Banks and the Agent.
In case an Event of Default shall occur, the entire principal amount of this
Note may become or be declared due and payable in the manner and with the effect
provided in said Credit Agreement. In addition to and not in limitation of the
foregoing and the provisions of the Credit Agreement hereinabove defined, the
undersigned further agrees, subject only to any limitation imposed by applicable
law, to pay all expenses, including reasonable attorneys' fees and legal
expenses, incurred by the holder of this Note in endeavoring to collect any
amounts payable hereunder which are not paid when due, whether by acceleration
or otherwise.
This Note shall be governed by and construed in accordance with the laws of the
State of Illinois (without giving effect to the conflict of laws rules of any
jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers, executed
this Note under seal as of the day and year first above written.
GREAT LAKES REIT, INC.
By: _____________________________________
Title:____________________________________
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EXHIBIT B
FORM OF REQUEST FOR LOAN
The First National Bank of Boston, as Agent 115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Ladies and Gentlemen:
Pursuant to the provisions of paragraph 2.5 of the Amended and Restated Master
Revolving Credit Agreement dated as of June 28, 1996, as from time to time in
effect (the "Credit Agreement"), among Great Lakes REIT, Inc. (the "Borrower"),
The First National Bank of Boston, for itself and as Agent, Bank of America
Illinois and the other Banks from time to time party thereto, the undersigned
Borrower hereby requests and certifies as follows:
1. Loan. The undersigned Borrower hereby requests a Loan under paragraph 2.1
of the Credit Agreement:
Principal Amount: $
Type (LIBOR, Base Rate):
Drawdown Date: , 19
Interest Period:
by credit to the general account of the undersigned Borrower with the Agent at
the Agent's Head Office.
2. Use of Proceeds. Such Loan shall be used for the following purposes
permitted by paragraph 7.11 of the Credit Agreement:
[Describe]
3. Capital Improvement Project. In the event that such Loan relates to any
Capital Improvement Project or portion thereof, the undersigned Borrower
represents and warrants that such Loan will not exceed the limit on such Loans
set forth in paragraph 7.11 of the Credit Agreement and will reimburse the
undersigned Borrower for or pay costs incurred for work on the Capital
Improvement Project identified above, which work covered by this request is in
place or is for stored materials which are properly secured. Attached hereto are
invoices, receipts or other evidence satisfactory to the Majority Banks to
verify the cost of such work. [If requested by the Agent Also attached hereto
are affidavits, lien waivers of other evidence reasonably satisfactory to the
Majority Banks showing that all materialmen, laborers, subcontractors and any
other parties who might or could claim statutory or common law liens and are
furnishing or have furnished material or labor to the Mortgaged Property in
connection with such Capital Improvement Project have been paid all amounts due
for such labor and materials.]
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4. Reimbursement. In the event that such Loan is requested to reimburse the
undersigned Borrower for amounts paid from its own funds for a purpose
authorized by the terms of paragraph 7.11 of the Credit Agreement, such funds
were used within ninety (90) days of the date of this Loan Request. [Also
attached hereto is evidence reasonably satisfactory to the Majority Banks
showing the date on which and purpose for which the undersigned Borrower's funds
were used.]
5. No Default. The undersigned chief financial or chief accounting officer of
the Borrower certifies that the Borrower is and will be in compliance with all
covenants under the Loan Documents after giving effect to the making of the Loan
requested hereby. Attached to this Request for Loan is a Compliance Certificate
prepared using the financial statements of the Borrower most recently provided
or required to be provided under paragraph 6.4 or paragraph 7.4 of the Credit
Agreement adjusted in the best good-faith estimate of the Borrower to give
effect to the making of the Loan requested hereby. No condemnation proceedings
are pending as to the undersigned Borrower's knowledge threatened against any
Mortgaged Property.
6. Representations True. Each of the representations and warranties made by or
on behalf of the Borrower, and its Subsidiaries contained in the Credit
Agreement, in the other Loan Documents or in any document or instrument
delivered pursuant to or in connection with the Credit Agreement was true as of
the date as of which it was made and shall also be true at and as of the
Drawdown Date for the Loan requested hereby, with the same effect as if made at
and as of such Drawdown Date (except to the extent of changes resulting from
transactions contemplated or permitted by the Credit Agreement and the other
Loan Documents and changes occurring in the ordinary course of business that
singly or in the aggregate are not materially adverse, and except to the extent
that such representations and warranties relate expressly to an earlier date)
and no Default or Event of Default has occurred and is continuing.
7. Other Conditions. All other conditions to the making of the Loan
requested hereby set forth in paragraph 11 of the Credit Agreement have been
satisfied. (Reference title insurance "date down", if applicable.)
8. Drawdown Date. Except to the extent, if any, specified by notice actually
received by the Agent prior to the Drawdown Date specified above, the foregoing
representations and warranties shall be deemed to have been made by the Borrower
on and as of such Drawdown Date.
9. Definitions. Terms defined in the Credit Agreement are used herein with
the meanings so defined.
IN WITNESS WHEREOF, we have hereunto set our hands this _____ day of
_______________, 199___.
GREAT LAKES REIT, INC.
By: _______________________________
Title:______________________________
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EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
The First National Bank of Boston, for itself and as Agent 115 Perimeter Center
Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Andy Hensel, Real Estate Department
Ladies and Gentlemen:
Reference is made to the Amended and Restated Master Revolving Credit Agreement
dated as of June 28, 1996 (the "Credit Agreement") by and among Great Lakes
REIT, Inc. (the "Borrower"), The First National Bank of Boston, for itself and
as Agent, Bank of America Illinois and the other Banks from time to time party
thereto. Terms defined in the Credit Agreement and not otherwise defined herein
are used herein as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower is furnishing to you herewith (or
have most recently furnished to you) the financial statements of the Borrower
and its Subsidiaries for the fiscal period ended _______________ (the "Balance
Sheet Date"). Such financial statements have been prepared in accordance with
generally accepted accounting principles and present fairly the financial
position of the Borrower and the Subsidiaries covered thereby at the date
thereof and the results of their operations for the periods covered thereby,
subject in the case of interim statements only to normal year-end audit
adjustments.
This certificate is submitted in compliance with requirements of paragraph
7.4(h), paragraph 7.5(e), paragraph 8.1(f), paragraph 8.8 or paragraph 10.14 of
the Credit Agreement. If this certificate is provided under a provision other
than paragraph 7.4(e), the calculations provided below are made using the
financial statements of the Borrower and its Subsidiaries as of the Balance
Sheet Date adjusted in the best good-faith estimate of the Borrower to give
effect to the making of a Loan, extension of the Maturity Date, acquisition or
disposition of property or other event that occasions the preparation of this
certificate; and the nature of such event and the Borrower's estimate of its
effects are set forth in reasonable detail in an attachment hereto. The
undersigned officer of the Borrower is its chief financial or chief accounting
officer.
The undersigned officers have caused the provisions of the Loan Documents to be
reviewed and have no knowledge of any Default or Event of Default. (Note: If the
signers do have knowledge of any Default or Event of Default, the form of
certificate should be revised to specify the Default or Event of Default, the
nature thereof and the actions taken, being taken or proposed to be taken by the
Borrower with respect thereto.]
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The Borrower is providing the attached information to demonstrate compliance as
of the date hereof with the covenants described in the attachment hereto.
IN WITNESS WHEREOF, we have hereunto set our hand this _____ day of
______________, 199__.
GREAT LAKES REIT, INC.
By:________________________________
Title:_______________________________
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APPENDIX A
to
COMPLIANCE CERTIFICATE
A. Outstanding Loans cannot exceed the Borrowing Base (Section 9.1)
A.0.1 Outstanding principal balance of the Loans:
A.0.1 Approved Appraised Value:
A.0.1 Line 2 X 60%:
A.0.1 Line 3 must be > than or = to line 1.
A. Company Leverage cannot exceed 55% (Section 9.2)
1. Consolidated Total Liabilities:
1. Total GAP Assets:
1. Accumulated Depreciation:
1. Consolidated Total Adjusted Asset Value:
(line 2 plus line 3)
1. Company Leverage:
(line 1 divided by line 4):
1. Line 5 cannot exceed .55.
A. Company Debt Service Coverage must exceed 2.0X rolling 4Q's (Section
9.3)
1. Net Income:
2. Depreciation & Amortization:
3. Interest Expense:
4. Extraordinary/Non-recurring losses:
5. Extraordinary/Non-recurring gains:
6. CapX Reserve Amount ($ .50 psf):
7. Operating Cash Flow:
(Lines 1+2+3+4-5-6)
8. Debt Service:
9. DSC Ratio:
(line 7 divided by line 8)
10. Line 9 must exceed 2.0.
A. Minimum Consolidated Tangible Net Worth (Section 9.4)
1. Consolidated Total Adjusted Asset Value:
(Line B.4)
2. Consolidated Total Liabilities:
3. Initial Consolidated Tangible Net Worth:
(Line 1 minus Line 2)
4. Net Offering Proceeds from offerings after Closing:
5. 75% of line 4:
6. Minimum Consolidated Tangible Net Worth:
($40,000,000 + line 5)
7. Line 3 must be > than or = to line 6.
Mortgaged Property Operating Net Income (Section 9.5)
1. NOI of existing Mortgaged Properties Rolling 4Q's:
2. NOI of new properties added during Q (annualized):
3. CapX Reserve ($ .50 psf):
4. OCF of all Mortgaged Properties:
(line 1+ line 2 line 3)
5. Loan Amount Outstanding at QE:
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6. Actual Interest Rate:
7. 10-Year Treasury+2%:
8. Applicable Interest Rate (the > of line 6 or 7):
9. Annual P&I payment using 20-yr amortization:
10. Mortgaged Property DSC Ratio:
(line 4 divided by line 9)
11. Line 10 must exceed 1.5.
A. Distributions cannot exceed 90% of Funds From Operations (Section 8.7(a))
1. Current Quarter Distributions:
2. Prior 3 Quarters Distributions:
3. T otal Distributions last 4Q's:
4. GAAP Net Income for last 4Q's:
5. Adjustments to Net Income:
( exclude financing costs and gains (losses) from debt restructuring and
sales of property)
6. Depreciation and Amortization:
7. Other non-cash items:
8. Funds from Operations:
(lines 4 5+6+7=)
9. Distributions to Funds from Operations Ratio:
(line 3 divided by line 8)
10. Line 9 cannot exceed .90.
A. Liquidation Value of Portfolio
NOI stabilized income properties at ________: NOI capped at 10.5% List
Additional new Properties at Cost:
TOTAL PROPERTY VALUE
Cash & Equivalents
Receivables & Other Assets
TOTAL ASSET VALUE:
Mortgages & Line of Credit
Other Liabilities
TOTAL LIABILITIES:
LIQUIDATED PORTFOLIO VALUE:
Shares Outstanding
Liquidation Value per Share:
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SCHEDULE 1
BANKS AND COMMITMENTS
Commitment
Commitment Percentage
The First National Bank of Boston $25,000,000.00 50.0%
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Division
LIBOR Lending Office
Same as above
Bank of America Illinois $25,000,000.00 50.0%
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Real Estate Division
LIBOR Lending Office
Same as above
------------ -----
$50,000,000.00 100.0%
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SCHEDULE 6.15
AFFILIATE TRANSACTIONS
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SCHEDULE 6.19
SUBSIDIARIES OF THE BORROWER
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SCHEDULE 6.22
AGREEMENTS
NONE.
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SCHEDULE 8.1
INDEBTEDNESS
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SCHEDULE 8.2
LIENS
TABLE OF CONTENTS
1. DEFINITIONS AND RULES OF INTERPRETATION 1
paragraph 1.1. Definitions. 1
paragraph 1.2. Rules of Interpretation 18
2. THE REVOLVING CREDIT FACILITY 19
paragraph 2.1. Commitment to Lend 19
paragraph 2.2. Unused Facility Fee 19
paragraph 2.3. Notes 20
paragraph 2.4. Interest on Loans 20
paragraph 2.5. Requests for Loans 20
paragraph 2.6. Funds for Loans 22
3. REPAYMENT OF THE LOANS 22
paragraph 3.1. Stated Maturity 22
paragraph 3.2. Mandatory Prepayments 22
paragraph 3.3. Optional Prepayments 22
paragraph 3.4. Partial Prepayments 22
paragraph 3.5. Effect of Prepayments 23
paragraph 3.6. Proceeds from Debt or Equity Offering 23
4. CERTAIN GENERAL PROVISIONS 23
paragraph 4.1. Conversion Options 23
paragraph 4.2. Commitment and Syndication Fee 24
paragraph 4.3. Agent's Fee 24
paragraph 4.4. Funds for Payments 24
paragraph 4.5. Computations 25
paragraph 4.6. Inability to Determine LIBOR Rate 25
paragraph 4.7. Illegality 25
paragraph 4.8. Additional Interest 25
paragraph 4.9. Additional Costs, Etc. 26
paragraph 4.10. Capital Adequacy 27
paragraph 4.11. Indemnity of Borrower 27
paragraph 4.12. Interest on Overdue Amounts; Late Charge 27
paragraph 4.13. HLT Classification 28
paragraph 4.14. Certificate 28
paragraph 4.15. Limitation on Interest 28
paragraph 4.16. Substitution of a Bank 29
5. COLLATERAL SECURITY 29
paragraph 5.1. Collateral 29
paragraph 5.2. Appraisals 29
paragraph 5.3. Release of Collateral 30
paragraph 5.4. Substitution of Mortgaged Property 30
6. REPRESENTATIONS AND WARRANTIES 30
paragraph 6.1. Corporate Authority, Etc. 30
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paragraph 6.2. Governmental Approvals 31
paragraph 6.3. Title to Properties: Lease 32
paragraph 6.4. Financial Statements 32
paragraph 6.5. No Material Changes 32
paragraph 6.6. Franchises, Patents, Copyrights, Etc. 32
paragraph 6.7. Litigation 32
paragraph 6.8. No Materially Adverse Contracts, Etc. 33
paragraph 6.9. Compliance with Other Instruments, Laws, Etc. 33
paragraph 6.10. Tax Status 33
paragraph 6.11. No Event of Default 33
paragraph 6.12. Holding Company and Investment Company Acts 33
paragraph 6.13. Absence of UCC Financing Statements, Etc. 33
paragraph 6.14. Setoff, Etc. 34
paragraph 6.15. Certain Transactions 34
paragraph 6.16. Employee Benefit Plans 34
paragraph 6.17. Regulations U and X 34
paragraph 6.18. Environmental Compliance 34
paragraph 6.19. Subsidiaries 36
paragraph 6.20. Leases 36
paragraph 6.21. Loan Documents 36
paragraph 6.22. Mortgaged Property 36
paragraph 6.23. Brokers 39
paragraph 6.24. Other Debt 39
paragraph 6.25. Solvency 40
7. AFFIRMATIVE COVENANTS OF THE BORROWER 40
paragraph 7.1. Punctual Payment 40
paragraph 7.2. Maintenance of Office 40
paragraph 7.3. Records and Accounts 40
paragraph 7.4. Financial Statements, Certificates and Information 40
paragraph 7.5. Notices 43
paragraph 7.6. Existence; Maintenance of Properties 45
paragraph 7.7. Insurance 45
paragraph 7.8. Taxes 49
paragraph 7.9. Inspection of Properties and Books 49
paragraph 7.10. Compliance with Laws, Contracts, Licenses, and Permits 49
paragraph 7.11. Use of Proceeds 50
paragraph 7.12. Further Assurances 50
paragraph 7.13. Compliance 50
paragraph 7.14. Interest Rate Contracts 50
paragraph 7.15. itle Insurance Updates 50
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER 51
paragraph 8.1. Restrictions on Indebtedness 51
paragraph 8.2. Restrictions on Liens, Etc. 52
paragraph 8.3. Restrictions on Investments 53
paragraph 8.4. Merger, Consolidation 54
paragraph 8.5. Sale and Leaseback 54
paragraph 8.6. Compliance with Environmental Laws 54
paragrpah 8.7. Distributions 56
paragraph 8.8. Asset Sales 56
paragraph 8.9. Development Activity 56
9. FINANCIAL COVENANTS OF THE BORROWER 57
paragraph 9.1. Borrowing Base 57
paragraph 9.2. Liabilities to Assets Ratio 7
paragraph 9.3. Debt Service Coverage 57
paragraph 9.4. Tangible Net Worth 57
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paragraph 9.5. Mortgaged Property Operating Net Income 57
10. CLOSING CONDITIONS 58
paragraph 10.1. Loan Documents 58
paragraph 10.2. Resolutions 58
paragraph 10.3. Incumbency Certificate; Authorized Signers 58
paragraph 10.4. Opinion of Counsel 59
paragraph 10.5. Payment of Fees 59
paragraph 10.6. Performance; No Default 59
paragraph 10.7. Representations and Warranties 59
paragraph 10.8. Proceedings and Documents 59
paragraph 10.9. Compliance Certificate 59
paragraph 10.10. Stockholder Consents 59
paragraph 10.11. Other Documents 59
paragraph 10.12. No Condemnation/Taking 60
paragraph 10.13. Assignment and Assumption 60
paragraph 10.14. Other 60
11. CONDITIONS TO ALL BORROWINGS 60
paragraph 11.1. Prior Conditions Satisfied 60
paragraph 11.2. Representations True; No Default 60
paragraph 11.3. No Legal Impediment 60
paragraph 11.4. Governmental Regulation 60
paragraph 11.5. Proceedings and Documents 61
paragrapn 11.6. Borrowing Documents 61
paragraph 11.7. Endorsement to Title Policy 61
paragraph 11.8. Future Advances Tax Payment 61
12. EVENTS OF DEFAULT; ACCELERATION; ETC. 61
paragraph 12.1. Events of Default and Acceleration 61
paragraph 12.2. Certain Cure Periods 64
paragraph 12.3. Termination of Commitments 65
paragraph 12.4. Remedies 65
paragraph 12.5. Distribution of Collateral Proceeds 65
13. SETOFF 66
14. THE AGENT 67
paragraph 14.1. Authorization 67
paragraph 14.2. Employees and Agents 67
paragraph 14.3. No Liability 67
paragraph 14.4. No Representations 67
paragraph 14.5. Payments 68
paragraph 14.6. Holders of Notes 69
paragraph 14.7. Indemnity 69
paragraph 14.8. Agent as Bank 69
paragraph 14.9. Resignation 69
paragraph 14.10. Duties in the Case of Enforcement 70
15. EXPENSES 70
16. INDEMNIFICATION 71
17. SURVIVAL OF COVENANTS, ETC. 72
18. ASSIGNMENT AND PARTICIPATION 72
paragraph 18.1. Conditions to Assignment by Banks 72
paragraph 18.2. Register 73
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paragraph 18.3. New Notes 73
paragraph 18.4. Participations 73
paragraph 18.5. Pledge by Bank 73
paragraph 18.6. No Assignment by Borrower 74
paragraph 18.7. Disclosure 74
paragraph 18.8. Amendments to Loan Documents 74
paragraph 18.9. Borrower Acknowledgment of Assignment to BOA 74
19. NOTICES 74
20. RELATIONSHIP 76
21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE 76
22. HEADINGS 77
23. COUNTERPARTS 77
24. ENTIRE AGREEMENT, ETC. 77
25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS 77
26. DEALINGS WITH THE BORROWER 78
27. CONSENTS, AMENDMENTS, WAIVERS, ETC. 78
28. SEVERABILITY 78
29. TIME OF THE ESSENCE 78
30. NO UNWRITTEN AGREEMENTS 79
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EXHIBITS AND SCHEDULES
EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF REQUEST FOR LOAN
EXHIBIT C FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 1 BANKS AND COMMITMENTS
SCHEDULE 6.15 AFFILIATE TRANSACTIONS
SCHEDULE 6.19 SUBSIDIARIES OF THE BORROWER
SCHEDULE 6.22 AGREEMENTS
SCHEDULE 8.1 INDEBTEDNESS
SCHEDULE 8.2 LIENS
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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 27, 1996
among
GREAT LAKES REIT, L.P.
and
GREAT LAKES REIT, INC.
and
THE FIRST NATIONAL BANK OF BOSTON
and
BANK OF AMERICA ILLINOIS
and
FIRST BANK NATIONAL ASSOCIATION
and
OTHER BANKS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
THE FIRST NATIONAL BANK OF BOSTON,
AS AGENT
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TABLE OF CONTENTS
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.................................2
ss.1.1. Definitions...........................................................2
ss.1.2. Rules of Interpretation..............................................18
ss.2. THE REVOLVING CREDIT FACILITY..........................................19
ss.2.1. Commitment to Lend...................................................19
ss.2.2. Unused Facility Fee..................................................19
ss.2.3. Notes................................................................19
ss.2.4. Interest on Loans....................................................20
ss.2.5. Requests for Loans...................................................20
ss.2.6. Funds for Loans......................................................21
ss.3. ASSUMPTION AND REPAYMENT OF THE LOANS..................................22
ss.3.1. Assumption by Borrower...............................................22
ss.3.2. Stated Maturity......................................................22
ss.3.3. Mandatory Prepayments................................................22
ss.3.4. Optional Prepayments.................................................22
ss.3.5. Partial Prepayments..................................................22
ss.3.6. Effect of Prepayments................................................22
ss.3.7. Proceeds from Debt or Equity Offering................................23
ss.4. CERTAIN GENERAL PROVISIONS.............................................23
ss.4.1. Conversion Options...................................................23
ss.4.2. Commitment and Syndication Fee.......................................24
ss.4.3. Agent's Fee..........................................................24
ss.4.4. Funds for Payments...................................................24
ss.4.5. Computations.........................................................24
ss.4.6. Inability to Determine LIBOR Rate....................................25
ss.4.7. Illegality...........................................................25
ss.4.8. Additional Interest..................................................25
ss.4.9. Additional Costs, Etc................................................25
ss.4.10. Capital Adequacy....................................................26
ss.4.11. Indemnity of Borrower...............................................27
ss.4.12. Interest on Overdue Amounts; Late Charge............................27
ss.4.13. HLT Classification..................................................27
ss.4.14. Certificate.........................................................28
ss.4.15. Limitation on Interest..............................................28
ss.4.16. Substitution of a Bank..............................................28
ss.5. COLLATERAL SECURITY....................................................29
ss.5.1. Collateral...........................................................29
ss.5.2. Appraisals...........................................................29
ss.5.3. Release of Collateral................................................30
ss.5.4. Substitution of Mortgaged Property...................................30
ss.6. REPRESENTATIONS AND WARRANTIES.........................................30
ss.6.1. Corporate Authority, Etc.............................................30
ss.6.2. Governmental Approvals...............................................31
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ss.6.3. Title to Properties..................................................31
ss.6.4. Financial Statements.................................................32
ss.6.5. No Material Changes..................................................32
ss.6.6. Franchises, Patents, Copyrights, Etc.................................32
ss.6.7. Litigation...........................................................32
ss.6.8. No Materially Adverse Contracts, Etc.................................33
ss.6.9. Compliance with Other Instruments, Laws, Etc.........................33
ss.6.10. Tax Status..........................................................33
ss.6.11. No Event of Default.................................................33
ss.6.12. Holding Company and Investment Company Acts.........................33
ss.6.13. Absence of UCC Financing Statements, Etc............................33
ss.6.14. Setoff, Etc.........................................................33
ss.6.15. Certain Transactions................................................34
ss.6.16. Employee Benefit Plans..............................................34
ss.6.17. Regulations U and X.................................................34
ss.6.18. Environmental Compliance............................................34
ss.6.19. Subsidiaries........................................................36
ss.6.20. Leases..............................................................36
ss.6.21. Loan Documents......................................................36
ss.6.22. Mortgaged Property..................................................36
ss.6.23. Brokers.............................................................39
ss.6.24. Other Debt..........................................................39
ss.6.25. Solvency............................................................39
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER..................................40
ss.7.1. Punctual Payment.....................................................40
ss.7.2. Maintenance of Office................................................40
ss.7.3. Records and Accounts.................................................40
ss.7.4. Financial Statements, Certificates and Information...................40
ss.7.5. Notices..............................................................43
ss.7.6. Existence; Maintenance of Properties.................................44
ss.7.7. Insurance............................................................45
ss.7.8. Taxes................................................................48
ss.7.9. Inspection of Properties and Books...................................49
ss.7.10. Compliance with Laws, Contracts, Licenses, and Permits..............49
ss.7.11. Use of Proceeds.....................................................49
ss.7.12. Further Assurances..................................................49
ss.7.13. Compliance..........................................................50
ss.7.14. Interest Rate Contracts.............................................50
ss.7.15. Transfer to Borrower................................................50
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.............................50
ss.8.1. Restrictions on Indebtedness.........................................50
ss.8.2. Restrictions on Liens, Etc...........................................51
ss.8.3. Restrictions on Investments..........................................52
ss.8.4. Merger, Consolidation................................................53
ss.8.5. Sale and Leaseback...................................................54
ss.8.6. Compliance with Environmental Laws...................................54
ss.8.7. Distributions........................................................55
ss.8.8. Asset Sales..........................................................55
ss.8.9. Development Activity.................................................56
ss.8.10. The Company.........................................................56
ss.9. FINANCIAL COVENANTS OF THE BORROWER....................................56
ss.9.1. Borrowing Base.......................................................56
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ss.9.2. Liabilities to Assets Ratio..........................................57
ss.9.3. Debt Service Coverage................................................57
ss.9.4. Tangible Net Worth...................................................57
ss.9.5. Mortgaged Property Operating Net Income..............................57
ss.9.6. Accounting...........................................................57
ss.10. CLOSING CONDITIONS....................................................57
ss.10.1. Loan Documents......................................................57
ss.10.2. Resolutions.........................................................58
ss.10.3. Incumbency Certificate; Authorized Signers..........................58
ss.10.4. Opinion of Counsel..................................................58
ss.10.5. Payment of Fees.....................................................58
ss.10.6. Performance; No Default.............................................59
ss.10.7. Representations and Warranties......................................59
ss.10.8. Proceedings and Documents...........................................59
ss.10.9. Compliance Certificate..............................................59
ss.10.10. Stockholder Consents...............................................59
ss.10.11. Other Documents....................................................59
ss.10.12. No Condemnation/Taking.............................................59
ss.10.13. Title Insurance Endorsements.......................................59
ss.10.14. Other..............................................................60
ss.11. CONDITIONS TO ALL BORROWINGS..........................................60
ss.11.1. Prior Conditions Satisfied..........................................60
ss.11.2. Representations True; No Default....................................60
ss.11.3. No Legal Impediment.................................................60
ss.11.4. Governmental Regulation.............................................60
ss.11.5. Proceedings and Documents...........................................60
ss.11.6. Borrowing Documents.................................................60
ss.11.7. Endorsement to Title Policy.........................................60
ss.11.8. Future Advances Tax Payment.........................................61
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC..................................61
ss.12.1. Events of Default and Acceleration..................................61
ss.12.2. Certain Cure Periods................................................64
ss.12.3. Termination of Commitments..........................................64
ss.12.4. Remedies............................................................65
ss.12.5. Distribution of Collateral Proceeds.................................65
ss.13. SETOFF................................................................66
ss.14. THE AGENT.............................................................66
ss.14.1. Authorization.......................................................66
ss.14.2. Employees and Agents................................................66
ss.14.3. No Liability........................................................67
ss.14.4. No Representations..................................................67
ss.14.5. Payments............................................................67
ss.14.6. Holders of Notes....................................................68
ss.14.7. Indemnity...........................................................68
ss.14.8. Agent as Bank.......................................................68
ss.14.9. Resignation.........................................................69
ss.14.10. Duties in the Case of Enforcement..................................69
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ss.15. EXPENSES..............................................................69
ss.16. INDEMNIFICATION.......................................................70
ss.17. SURVIVAL OF COVENANTS, ETC............................................71
ss.18. ASSIGNMENT AND PARTICIPATION..........................................71
ss.18.1. Conditions to Assignment by Banks...................................71
ss.18.2. Register............................................................72
ss.18.3. New Notes...........................................................72
ss.18.4. Participations......................................................72
ss.18.5. Pledge by Bank......................................................73
ss.18.6. No Assignment by Borrower...........................................73
ss.18.7. Disclosure..........................................................73
ss.18.8. Amendments to Loan Documents........................................73
ss.18.9. Company and Borrower Acknowledgment of FBNA Becoming a Bank.........73
ss.19. NOTICES...............................................................73
ss.20. RELATIONSHIP..........................................................75
ss.21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE....................75
ss.22. HEADINGS..............................................................76
ss.23. COUNTERPARTS..........................................................76
ss.24. ENTIRE AGREEMENT. ETC.................................................76
ss.25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS........................76
ss.26. DEALINGS WITH THE BORROWER............................................77
ss.27. CONSENTS, AMENDMENTS, WAIVERS, ETC....................................77
ss.28. SEVERABILITY..........................................................77
ss.29. TIME OF THE ESSENCE...................................................78
ss.30. NO UNWRITTEN AGREEMENTS...............................................78
EXHIBITS AND SCHEDULES
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EXHIBIT A FORM OF NOTE
EXHIBIT B FORM OF REQUEST FOR LOAN
EXHIBIT C FORM OF COMPLIANCE CERTIFICATE
SCHEDULE 1 BANKS AND COMMITMENTS
SCHEDULE 6.15 AFFILIATE TRANSACTIONS
SCHEDULE 6.19 SUBSIDIARIES OF THE BORROWER AND THE COMPANY
SCHEDULE 6.22 AGREEMENTS
SCHEDULE 8.1 INDEBTEDNESS
SCHEDULE 8.2 LIENS
SCHEDULE 8.10 PARTNERSHIP INTERESTS OWNED BY THE COMPANY
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AMENDED AND RESTATED
REVOLVING CREDIT AGREEMENT
This AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT is made as of
the 27th day of December, 1996, by and among GREAT LAKES REIT, L.P., a Delaware
limited partnership (the "Borrower"), GREAT LAKES REIT, INC., a Maryland
corporation (the "Company"), each of the Borrower and the Company having its
principal place of business at 231 West 22nd Street, Suite 109, Oak Brook,
Illinois 60521, and THE FIRST NATIONAL BANK OF BOSTON ("FNBB"), BANK OF AMERICA
ILLINOIS ("BOA"), FIRST BANK NATIONAL ASSOCIATION ("FBNA") and the other lending
institutions which may become parties hereto pursuant to ss.18 (the "Banks"),
and THE FIRST NATIONAL BANK OF BOSTON, as Agent for the Banks (the "Agent").
RECITALS
WHEREAS, the Company, FNBB and the Agent are parties to that certain
Master Revolving Credit Agreement dated as of April 12, 1996 as amended and
restated by Amended and Restated Master Revolving Credit Agreement dated as of
June 28, 1996 among the Company, FNBB, BOA and the Agent (the "Prior Credit
Agreement");
WHEREAS, pursuant to the Prior Credit Agreement, FNBB and BOA have
made certain loans to the Company which are outstanding on the date hereof;
WHEREAS, the Company has formed the Borrower and has transferred to
the Borrower substantially all of its assets and operations;
WHEREAS, the parties hereto desire that the Borrower assume all
outstanding loans, indebtedness and other obligations of the Company under the
Prior Credit Agreement and the Loan Documents executed and delivered in
connection therewith;
WHEREAS, the Borrower requires additional availability of funds in
the operation of its business and the Banks are willing to provide such
additional funds pursuant to the terms set forth herein; and
WHEREAS, the Borrower, the Company, the Banks and the Agent desire to
amend and restate the Prior Credit Agreement to provide for said assumption by
Borrower and an increase in the commitment of the Banks under the credit
facility, it being understood that the loans heretofore made to the Company by
FNBB and BOA shall continue to remain outstanding and that this Agreement is an
amendment and restatement of the Prior Credit Agreement, which shall remain in
full force and effect, as amended and restated hereby.
NOW, THEREFORE, in consideration of the terms and conditions
contained herein, and of any loans, advances, or extensions of credit
heretofore, now or hereafter made to or for the benefit of the Company or the
Borrower by the Banks, the parties hereto hereby agree as follows:
ss.1. DEFINITIONS AND RULES OF INTERPRETATION.
ss.1. Definitions. The following terms shall have the meanings set
forth in this ss.1 or elsewhere in the provisions of this Agreement referred to
below:
Affected Bank. See ss.4.16.
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Agent. The First National Bank of Boston acting as agent for the
Banks.
Agent's Head Office. The Agent's head office located at 100 Federal
Street, Boston, Massachusetts 02110, or at such other location as the Agent may
designate from time to time by notice to the Borrower and the Banks.
Agent's Special Counsel. Verrill & Dana or such other counsel as may
be approved by the Agent.
Agreement. This Amended and Restated Revolving Credit Agreement,
including the Schedules and Exhibits hereto.
Applicable Margin. As of any date of determination, with respect to
LIBOR Rate loans 1.875%, provided that upon completion of a Successful Initial
Public Offering the applicable margin shall be reduced to 1.750%.
Appraisal. An MAI appraisal of the value of a parcel of Real Estate,
determined on a fair value basis, performed by an independent appraiser selected
by the Agent who is not an employee of the Borrower, the Agent or a Bank the
form and substance of such appraisal and the identity of the appraiser to be in
compliance with the Financial Institutions Reform, Recovery and Enforcement Act
of 1989, as amended, the rules and regulations adopted pursuant thereto and all
other regulatory laws and policies (both regulatory and internal) applicable to
the Banks and otherwise acceptable (i) to the Agent, in the case of such
appraisals delivered on or before the Closing Date, and (ii) the Requisite
Banks, in the case of any such appraisals delivered after the Closing Date,
provided that if the Agent's appraisal department has determined that the value
of any parcel of Real Estate is within five percent (5%) of the value for such
parcel of Real Estate as set forth in the Appraisal delivered to the Agent, the
Banks shall accept such appraised value.
Appraised Value. The fair value of a parcel of Mortgaged Property
determined by the most recent Appraisal of such parcel or update obtained
pursuant to ss.5.2 or ss.10.7, subject, however, to such changes or adjustments
to the value determined thereby as may be required by (i) the appraisal
department of the Agent, in the case of such appraisals delivered by the
Borrower on or before the Closing Date, and (ii) the appraisal departments of
the Requisite Banks, in the case of any such appraisals delivered by the
Borrower after the Closing Date, in their good faith business judgment after
consultation with the Borrower, provided that if the Agent's appraisal
department has determined that the value of any parcel of Mortgaged Property is
within five percent (5%) of the value for such Mortgaged Property as set forth
in the Appraisal delivered to the Agent by the Borrower, the Banks shall accept
such appraised value.
Assigned Interest. See ss.18.9.
Assignment of Leases and Rents. Each of the collateral assignments of
leases and rents from the Borrower (or from the Company and assumed by the
Borrower) to the Agent, as the same may be modified or amended, pursuant to
which there shall be assigned to the Agent for the benefit of the Banks a
security interest in the interest of the Borrower as lessor with respect to all
Leases of all or any part of a Mortgaged Property, each such collateral
assignment to be in form and substance satisfactory to the Requisite Banks.
Balance Sheet Date. December 31, 1995.
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Banks. FNBB, BOA, FBNA and any other Person who becomes an assignee
of any rights of a Bank pursuant to ss.18.
Base Rate. The annual rate of interest announced from time to time by
Agent at Agent's Head Office as its "base rate". Any change in the rate of
interest payable hereunder resulting from a change in the Base Rate shall become
effective as of the opening of business on the day on which such change in the
Base Rate becomes effective.
Base Rate Loans. Those Loans bearing interest calculated by reference to
the Base Rate.
BOA. As defined in the preamble hereto.
Borrower. As defined in the preamble hereto.
Borrowing Base. At any time with respect to the Borrower, the
Borrowing Base shall be the aggregate of the Borrowing Bases for each parcel of
Eligible Real Estate included in the Mortgaged Property owned by the Borrower.
The Borrowing Base for each parcel of Eligible Real Estate included in the
Mortgaged Property shall be the amount which is sixty percent (60%) of the
Appraised Value of such Mortgaged Property as most recently determined as
provided under ss.5.2 or ss.10.7.
Building. With respect to each parcel of Mortgaged Property, all of
the buildings, structures and improvements now or hereafter located thereon.
Building Service Equipment. All apparatus, fixtures and articles of
personal property owned by the Borrower now or hereafter attached to or used or
procured for use in connection with the operation or maintenance of any
building, structure or other improvement located on or included in the Mortgaged
Property, including, but without limiting the generality of the foregoing, all
engines, furnaces, boilers, stokers, pumps, heaters, tanks, dynamos, motors,
generators, switchboards, electrical equipment, heating, plumbing, lifting and
ventilating apparatus, air-cooling and air-conditioning apparatus, gas and
electric fixtures, elevators, escalators, fittings, and machinery and all other
equipment of every kind and description, used or procured for use in the
operation of a Building (except apparatus, fixtures or articles of personal
property belonging to lessees or other occupants of such building or to persons
other than the Borrower unless the same be abandoned by any such lessee or other
occupant or person and shall become the Borrower's property by reason of such
abandonment), together with any and all replacements thereof and additions
thereto.
Business Day. Any day on which banking institutions in Boston,
Massachusetts are open for the transaction of banking business and, in the case
of LIBOR Rate Loans, which also is a LIBOR Business Day.
Capital Expenditure Reserve Amount. With respect to any Person or
property, a reserve for replacements and capital expenditures equal to $ .50 per
square foot of building space located on all Real Estate owned by such Person,
per year which amount shall be prorated when used in computations relating to a
period shorter than a year.
Capital Improvement Project. With respect to any Real Estate now or
hereafter owned by the Borrower which is utilized principally for office,
office/service or light industry, capital improvements consisting of
rehabilitation, refurbishment, replacement and improvements (including related
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amenities) to the existing Buildings on such Real Estate which may be properly
capitalized under generally accepted accounting principles.
CERCLA. See ss.6.18.
Closing Date. The first date on which all of the conditions set forth
in ss.10 and ss.11 have been satisfied.
Code. The Internal Revenue Code of 1986, as amended.
Collateral. All of the property, rights and interests of the Borrower
which are or are intended to be subject to the security interests, liens and
mortgages created by the Security Documents, including, without limitation, the
Mortgaged Property.
Commitment. With respect to each Bank, the amount set forth on
Schedule 1 hereto as the amount of such Bank's Commitment to make or maintain
Loans to the Borrower, as the same may be changed from time to time in
accordance with the terms of this Agreement
Commitment Percentage. With respect to each Bank, the percentage set
forth on Schedule l hereto as such Bank's percentage of the aggregate
Commitments of all of the Banks.
Company. As defined in the preamble hereto.
Compliance Certificate. See ss.7.4(e).
Consolidated or combined. With reference to any term defined herein,
that term as applied to the accounts of a Person and its Subsidiaries,
consolidated or combined in accordance with generally accepted accounting
principles.
Consolidated Operating Cash Flow. With respect to any period of a
Person, an amount equal to the Operating Cash Flow such Person and its
Subsidiaries for such period consolidated in accordance with generally accepted
accounting principles.
Consolidated Tangible Net Worth. The amount by which Consolidated
Total Adjusted Asset Value exceeds Consolidated Total Liabilities, and less
the sum of:
(a) the total book value of all assets of a Person and its
Subsidiaries properly classified as intangible assets under generally
accepted accounting principles, including such items as good will,
the purchase price of acquired assets in excess of the fair market
value thereof, trademarks, trade names, service marks, brand names,
copyrights, patents and licenses, and rights with respect to the
foregoing; plus
(b) all amounts representing any write-up in the book
value of any assets of such Person or its Subsidiaries resulting from
a revaluation thereof subsequent to the Balance Sheet Date.
Consolidated Total Adjusted Asset Value. With respect to any Person,
all assets of such Person and its Subsidiaries determined on a consolidated
basis in accordance with generally accepted accounting principles. All real
estate shall be valued on an undepreciated cost basis.
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Consolidated Total Liabilities. All liabilities of a Person and its
Subsidiaries determined on a consolidated basis in accordance with generally
accepted accounting principles and all Indebtedness of such Person and its
Subsidiaries, whether or not so classified. Amounts undrawn under this Agreement
shall not be included in Indebtedness for purposes of this definition.
Construction Inspector. A firm of professional engineers or
architects selected by the Borrower and reasonably acceptable to the Agent.
Conversion Request. A notice given by the Borrower to the Agent of
its election to convert or continue a Loan in accordance with ss.4.1.
Debt Offering. The issuance and sale by the Borrower of any debt
securities of the Borrower or by the Company of any debt securities of the
Company.
Debt Service. For any period, the sum of all interest and mandatory
principal payments due and payable during such period reduced by any balloon
payments due upon maturity of any Indebtedness.
Default. See ss.12.1.
Defaulting Bank. Any Bank which fails or refuses to perform its
obligations under this Agreement within the time period specified for
performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Business Days after notice
from the Agent.
Distribution. With respect to any Person, the declaration or payment
of any cash, cash flow, dividend or distribution on or in respect of any shares
of any class of capital stock or other beneficial interest of such Person other
than dividends or distributions payable solely in equity securities of such
Person; the purchase, redemption, exchange or other retirement of any shares of
any class of capital stock or other beneficial interest of such Person, directly
or indirectly through a Subsidiary of such Person or otherwise; the return of
capital by such Person to its shareholders or partners as such; or any other
distribution on or in respect of any shares of any class of capital stock or
other beneficial interest of such Person.
Dollars or $. Dollars in lawful currency of the United States of
America.
Domestic Lending Office. Initially, the office of each Bank
designated as such in Schedule I hereto; thereafter, such other office of such
Bank if any, located within the United States that will be making or maintaining
Base Rate Loans.
Drawdown Date. The date on which any Loan is made or is to be made,
and the date on which any Loan which is made prior to the Maturity Date is
converted or combined in accordance with ss.4.1.
Eligible Assignee. Any of the following assignees: (i) a commercial
bank, savings and loan association or savings bank organized under the laws of
the United States or any state thereof having total assets in excess of
$250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of
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business extends credit of the type evidenced by the Notes and has total assets
in excess of $100,000,000; (iii) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic Cooperation
and Development or a political subdivision of such country and having total
assets in excess of $250,000,000; provided that such bank is acting through a
branch or agency located in the United States and such bank shall, if legally
able to do so, prior to the immediately following due date of any payment by the
Borrower hereunder, deliver to the Borrower such certificates, documents or
other evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (1)
not subject to Untied States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States or (2) totally exempt from the United States
Federal withholding tax; and (iv) any other financial institution satisfactory
to both the Borrower and the Agent.
Eligible Participant. Any of the following participants: (i) a
commercial bank, savings and loan association or savings bank organized under
the laws of the United States or any state thereof having total assets in excess
of $250,000,000; (ii) a finance company, insurance company or other financial
institution or fund acceptable to the Agent which is organized under the laws of
the United States or any state thereof and in the ordinary course of business
extends credit of the type evidenced by the Notes and has total assets in excess
of $100,000,000; (iii) a commercial bank organized under the laws of any other
country which is a member of the Organization for Economic Cooperation and
Development or a political subdivision of such country and having total assets
in excess of $250,000,000; provided that such bank is acting through a branch or
agency located in the United States and such bank shall, if legally able to do
so. prior to the immediately following due date of any payment by the Borrower
hereunder, deliver to the Borrower such certificates, documents or other
evidence, as required by the Code or Treasury Regulations issued pursuant
thereto, including (A) Internal Revenue Service Form W-8 or W-9 and (B) Internal
Revenue Service Forms 1001 or Form 4224 and any other certificate or statement
of exemption required by Treasury Regulation Section 1.1441-1, 1.1441-4 or
1.1441-6(c) or any subsequent version thereof or successors thereto, properly
completed and duly executed by such entity establishing that such payment is (1)
not subject to Untied States Federal withholding tax under the Code because such
payment is effectively connected with the conduct by such entity of a trade or
business in the United States or (2) totally exempt from the United States
Federal withholding tax; and (iv) any other financial institution satisfactory
to both the Borrower and the Agent.
Eligible Real Estate. Real Estate:
(a) which is owned in fee by the Borrower;
(b) which is located within the States of Illinois,
Minnesota, Wisconsin, Michigan, Indiana or Ohio except to the extent
such limitation is waived in writing with the consent of all Banks
with respect to a specific parcel of Real Estate;
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(c) which is utilized principally for offices,
offices/service or light industry;
(d) which is approved by the Requisite Banks in their sole
judgment;
(e) as to which all of the representations set forth in ss.6
of this Agreement concerning Mortgaged Property are true and correct;
and
(f) as to which the Agent has received all Eligible Real
Estate Qualification Documents, so long as all of such documents
remain in full force and effect.
Eligible Real Estate Qualification Documents. With respect to any
parcel of Real Estate of the Borrower proposed to be included in the
Collateral, each of the following:
(a)Security Documents. Such Security Documents relating to
such Real Estate as the Agent shall require, in form and substance
satisfactory to the Agent and duly executed and delivered by the
respective parties thereto.
(b) Enforceability Opinion. The favorable legal opinion of
counsel to the Borrower reasonably acceptable to the Agent qualified
to practice in the State in which such Real Estate is located,
addressed to the Banks and in form and substance satisfactory to the
Agent as to the enforceability of such Security Documents and such
other matters as the Agent shall reasonably request.
(c) Perfection of Liens. Evidence reasonably satisfactory
to the Agent that the Security Documents are effective to create in
favor of the Agent a legal, valid and enforceable first (except for
Permitted Liens entitled to priority under applicable law) lien and
security interest in such Real Estate and that all filings.
recordings, deliveries of instruments and other actions necessary or
desirable to protect and preserve such liens or security interests
have been duly effected.
(d) Survey and Taxes. The Survey of such Real Estate,
together with the Surveyor Certification and evidence of payment of
all real estate taxes, assessments and municipal charges on such Real
Estate which on the date of determination are required to have been
paid under ss.7.8.
(e) Title Insurance; Title Exception Documents. The Title
Policy covering such Real Estate, including all endorsements thereto,
and together with proof of payment of all fees and premiums for such
policy, and true and accurate copies of all documents listed as
exceptions under such policy.
(f) UCC Certification. A certification from the Title
Insurance Company or counsel satisfactory to the Agent that a search
of the public records designated by the Agent disclosed no
conditional sales contracts, security agreements, chattel mortgages,
leases of personally, financing statements or title retention
agreements which affect any property, rights or interests of the
Borrower that are or are intended to be subject to the security
interest, assignments, and
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mortgage liens created by the Security Documents relating to such
Real Estate except to the extent that the same are discharged and
removed prior to or simultaneously with the inclusion of the Real
Estate in the Collateral.
(g) Management Agreement. A true copy of the Management
Agreement, if any, relating to such Real Estate.
(h) Service Agreements. True copies of all Service
Agreements relating to such Real Estate.
(i) Standard Form Leases and Estoppel Certificates. True
copies of sample leases and Rent Rolls and summaries thereof
satisfactory to the Agent certified by the Borrower as accurate and
complete as of a recent date and Estoppel Certificates satisfactory
to the Agent from tenants occupying at least 60% of the gross
leasable area of all Buildings on said Real Estate.
(j) Certificates of Insurance. Each of (i) a current
certificate of insurance as to the insurance maintained by the
Borrower on such Real Estate (including flood insurance if necessary)
from the insurer or an independent insurance broker dated as of the
date of determination, identifying insurers, types of insurance,
insurance limits, and policy terms; (ii) certified copies of all
policies evidencing such insurance (or certificates therefor signed
by the insurer or an agent authorized to bind the insurer); and (iii)
such further information and certificates from the Borrower, its
insurers and insurance brokers as the Agent may reasonably request,
all of which shall be in compliance with the requirements of this
Agreement.
(k) Hazardous Substance Assessments. A hazardous waste
site assessment report concerning Hazardous Substances and asbestos
on such Real Estate dated or updated not more than six (6) months
prior to the inclusion of such Real Estate in the Collateral, from an
Environmental Engineer, such report to be approved by the Requisite
Banks.
(l) Certificate of Occupancy. A copy of the certificate(s)
of occupancy issued to the Borrower for such parcel of Real Estate
permitting the use and occupancy of the Building thereon (or a copy
of the certificates of occupancy issued for such parcel of Real
Estate and evidence satisfactory to the Agent that any previously
issued certificate(s) of occupancy is not required to be reissued to
the Borrower), or a legal opinion reasonably satisfactory to the
Agent that no certificates of occupancy are necessary to the use and
occupancy thereof.
(m) Appraisal. An Appraisal of such Real Estate, in form
and substance satisfactory to the Agent or the Requisite Banks as
provided in ss.5.2 and dated not more than twelve ( 12) months prior
to the inclusion of such Real Estate in the Collateral.
(n) Zoning and Land Use Opinion of Counsel. A favorable
opinion concerning the Real Estate addressed to the Agent and dated
the date of the inclusion of such Real Estate in the Collateral, in
form and substance satisfactory to the Agent, from counsel approved
by the Agent admitted to practice in the State in which such parcel
is located, as to zoning and land use compliance, or an ALTA Zoning
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Endorsement 3.1 (with parking) or such other evidence regarding
zoning and land use compliance as the Agent may approve in their
reasonable discretion.
(o) Construction Inspector Report. A report or written
confirmation from the Construction Inspector satisfactory in form and
content to the Agent, dated or updated not more than six (6) months
prior to the inclusion of such Real Estate in the Collateral,
addressing such matters as the Agent may reasonably require,
including without limitation that the Construction Inspector has
reviewed the plans and specifications or other available materials
for all Buildings on the Real Estate, that the condition of the
Buildings is good, that all Buildings were constructed and completed
in good and workmanlike manner, that the Buildings satisfy all
applicable building, zoning and handicapped access laws applicable
thereto, whether or not the Real Estate and the Buildings thereon are
a conforming use under applicable zoning laws, and that utilities and
public water and sewer service are available at the lot lines of the
Real Estate through dedicated rights-of-way or through insured
perpetual private easements approved by the Agent and connected
directly to the Building with all necessary permits.
(p) Permit and Legal Compliance Assurances. Evidence
satisfactory to the Agent that all activities being conducted on such
Real Estate which require federal, state or local licenses or permits
have been duly licensed and that such licenses or permits are in full
force and effect, and that the Real Estate, the Buildings and the use
and occupancy thereof are in compliance with all applicable federal,
state or local laws, ordinances or regulations.
(q) Operating Statements. Operating statements for such
Real Estate in the form of such statements delivered to the Banks
under ss.6.4(c) covering each of the four fiscal quarters ending
immediately prior to the addition of such Mortgaged Property to the
Collateral provided, however, that if the Borrower (or the Company as
predecessor in interest to the Borrower) has owned such Real Estate
for a shorter period of time such operating statements need only
cover the period of Borrower's and/or the Company's ownership.
(r) Doing Business Opinion. An opinion, dated the date of
the inclusion of such Real Estate in the Collateral, of legal counsel
to the Borrower reasonably acceptable to the Agent qualified to
practice in the State in which such Real Estate is located to the
effect that neither the Agent nor any Bank shall be required to
qualify to do business in such State or any political subdivision
thereof or to become liable to pay any taxes in such State or any
political subdivision thereof solely on account of the receipt of the
lien on such Real Estate securing the Obligation, such opinion to be
satisfactory to the Agent.
(s) Additional Documents. Such other documents,
certificates, reports or assurances as the Agent may reasonably
require in their discretion.
Employee Benefit Plan. Any employee benefit plan within the meaning
of ss.3(3) of ERISA maintained or contributed to by either of the Borrower or
any ERISA Affiliate, other than a Multiemployer Plan.
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Environmental Engineer. EMG, Inc. or another firm of independent
professional engineers or other scientists generally recognized as expert in the
detection, analysis and remediation of Hazardous Substances and related
environmental matters and which has been previously approved by the Agent, or if
not previously approved by the Agent, with respect to which the Borrower has
provided to the Agent a copy at such firm's errors and omissions insurance
policy and a reliance letter both in form and substance acceptable to the Agent.
Environmental Laws. See ss.6.18(a).
Equity Offering. The issuance and sale by the Company of any equity
securities of the Company or the issuance by the Borrower of any limited
partnership interests in the Borrower in exchange for contributions to the
capital of Borrower whether in the form of cash or Real Estate.
ERISA. The Employee Retirement Income Security Act of 1974, as
amended and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single employer
with the Borrower under ss.414 of the Code.
ERISA Reportable Event. A reportable event with respect to a
Guaranteed Pension Plan within the meaning of ss.4043 of ERISA and the
regulations promulgated thereunder as to which the requirement of notice has not
been waived.
Event of Default. See ss.12.1.
FBNA. As defined in the Preamble.
Federal Funds Effective Rate. For any day, the rate per annum 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, as
published for such day (or, if such day is not a Business Day, for the next
preceding Business Day) by the Federal Reserve Bank of New York, or, if such
rate is not so published for any day that is a Business Day, the average of the
quotations for such day on such transactions received by the Agent from three
Federal funds brokers of recognized standing selected by the Agent.
FNBB. As defined in the Preamble.
Funds from Operations. With respect to any fiscal period of the
Borrower, an amount equal to the Borrower's Funds from Operations determined in
accordance with the definition approved by the National Association of Real
Estate Investment Trusts.
Generally accepted accounting principles. Principles that are (a)
consistent with the principles promulgated or adopted by the Financial
Accounting Standards Board and its predecessors, as in effect from time to time
and (b) consistently applied with past financial statements of the Person
adopting the same principles; provided that a certified public accountant would,
insofar as the use of such accounting principles is pertinent, be in a position
to deliver an unqualified opinion (other than a qualification regarding changes
in generally accepted accounting principles) as to financial statements in which
such principles have been properly applied.
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Guaranteed Pension Plan. Any employee pension benefit plan within the
meaning of ss.3(2) of ERISA maintained or contributed to by either of the
Borrower or any ERISA Affiliate the benefits of which are guaranteed on
termination in full or in part by the PBGC pursuant to Title IV of ERISA, other
than a Multiemployer Plan.
Guaranty. The Guaranty of even date herewith from the Company to the
Agent for the benefit of the Banks pursuant to which the Company has guaranteed
the payment and performance of the Obligations.
Hazardous Substances. See ss.6.1 8(b).
HLT Notice Date. See ss.4.13.
Indebtedness. All obligations, contingent and otherwise, that in
accordance with generally accepted accounting principles should be classified
upon the obligor's balance sheet as liabilities, or to which reference should be
made by footnotes thereto, but without any double counting, including in any
event and whether or not so classified: (a) all debt and similar monetary
obligations, whether direct or indirect; (b) all liabilities secured by any
mortgage, pledge, security interest, lien, charge or other encumbrance existing
on property owned or acquired subject thereto, whether or not the liability
secured thereby shall have been assumed; and (c) all guarantees, endorsements
and other contingent obligations whether direct or indirect in respect of
indebtedness of others, including any obligation to supply funds to or in any
manner to invest directly or indirectly in a Person, to purchase indebtedness,
or to assure the owner of indebtedness against loss through an agreement to
purchase goods, supplies or services for the purpose of enabling the debtor to
make payment of the indebtedness held by such owner or otherwise, and the
obligation to reimburse the issuer in respect of any letter of credit.
Indemnity Agreement. The Amended and Restated Indemnity Agreement
Regarding Hazardous Materials made by the Borrower and the Company in favor of
the Agent and the Banks, as the same may be modified or amended, pursuant to
which the Borrower and the Company agree to indemnify the Agent and the Banks
with respect to Hazardous Substances and Environmental Laws.
Interest Payment Date. As to each Loan, the first day of each
calendar month during the term of such Loan.
Interest Period. With respect to each LIBOR Rate Loan (a) initially,
the period commencing on the Drawdown Date of such Loan and ending one, three or
six months thereafter, and (b) thereafter, each period commencing on the day
following the last day of the next preceding Interest Period applicable to such
Loan and ending on the last day of one of the periods set forth above, as
selected by the Borrower in a Conversion Request; provided that all of the
foregoing provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a LIBOR Rate
Loan would otherwise end on a day that is not a LIBOR Business Day,
that Interest Period shall end and the next Interest Period shall
commence on the next preceding or succeeding LIBOR Business Day as
determined conclusively by the Reference Bank in accordance with the
then current bank practice in the London Interbank Market;
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(B) if the Borrower shall fail to give notice as provided
in ss.4.1, the Borrower shall be deemed to have requested a
conversion of the affected LIBOR Rate Loan to a Base Rate Loan on the
last day of the then current Interest Period with respect thereto;
and
(C) no Interest Period relating to any LIBOR Rate Loan
shall extend beyond the Maturity Date.
Interest Rate Contracts. Interest rate swap, collar, cap or similar
agreements providing interest rate protection.
Investments. With respect to any Person, all shares of capital stock,
evidences of Indebtedness and other securities issued by any other Person, all
loans, advances, or extensions of credit to, or contributions to the capital of,
any other Person, all purchases of the securities or business or integral part
of the business of any other Person and commitments and options to make such
purchases, all interests in real property, and all other investments; provided,
however, that the term "Investment" shall not include (i) equipment, inventory
and other tangible personal property acquired in the ordinary course of
business, or (ii) current trade and customer accounts receivable for services
rendered in the ordinary course of business and payable in accordance with
customary trade terms. In determining the aggregate amount of Investments
outstanding at any particular time: (a) the amount of any investment represented
as a guaranty shall be taken at not less than the principal amount of the
obligations guaranteed and still outstanding; (b) there shall be included as an
Investment all interest accrued with respect to Indebtedness constituting an
Investment unless and until such interest is paid; (c) there shall be deducted
in respect of each such Investment any amount received as a return of capital
(but only by repurchase, redemption, retirement, repayment, liquidating dividend
or liquidating distribution); (d) there shall not be deducted in respect of any
Investment any amounts received as earnings on such Investment, whether as
dividends, interest or otherwise, except that accrued interest included as
provided in the foregoing clause (b) may be deducted when paid; and (e) there
shall not be deducted from the aggregate amount of Investments any decrease in
the value thereof.
Leases. Leases, licenses and agreements whether written or oral,
relating to the use or occupation of space in or on the Building or on the
Real Estate by persons other than the Borrower.
LIBOR Business Day. Any day on which commercial banks are open for
international business (including dealings in Dollar deposits) in London.
LIBOR Lending Office. Initially, the office of each Bank designated
as such in Schedule 1 hereto; thereafter, such other office of such Bank, if
any, that shall be making or maintaining LIBOR Rate Loans.
LIBOR Rate. For any Interest Period with respect to a LIBOR Rate
Loan, the rate per annum as determined by the Reference Bank's LIBOR Lending
Office to be the rate (rounded upwards to the nearest 1/16 of one percent) at
which Dollar deposits are offered to prime banks, by such banks in the London
Interbank Market as are selected in good faith by Reference Bank, at
approximately 11:00 a.m. London time two LIBOR Business Days prior to the
beginning of such Interest Period for delivery on the first day of such Interest
Period for the number of days comprised therein and in an amount comparable to
the amount of the LIBOR Rate Loan to which such Interest Period applies.
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LIBOR Rate Loans. Loans bearing interest calculated by reference to a
LIBOR Rate.
Loan Documents. This Agreement, the Notes, the Security Documents and
all other documents, instruments or agreements now or hereafter executed or
delivered by or on behalf of the Borrower in connection with the Loans.
Loan Request. See ss.2.5.
Loans. Collectively, Loans made to the Company pursuant to the Prior
Credit Agreement and Loans made by the Banks to the Borrower pursuant to ss.2.1.
Management Agreements. Agreements, whether written or oral, providing
for the management of the Mortgaged Properties or any of them.
Maturity Date. April 12, 1998, or such earlier date on which the
Loans shall become due and payable pursuant to the terms hereof.
Mortgaged Property or Mortgaged Properties. The Eligible Real Estate
owned by the Borrower which is conveyed to and accepted by the Agent as security
for the Obligations of the Borrower pursuant to the Security Deeds.
Multiemployer Plan. Any multiemployer plan within the meaning of
ss.3(37) of ERISA maintained or contributed to by either of the Borrower or any
ERISA Affiliate.
Net Income (or Deficit). With respect to any Person (or any asset of
any Person) for any fiscal period, the net income (or deficit) of such Person
(or attributable to such asset), after deduction of all expenses, taxes and
other proper charges, determined in accordance with generally accepted
accounting principles.
Net Offering Proceeds. The gross cash proceeds received by the
Borrower or the Company as a result of an Equity Offering less customary and
reasonable costs, fees, expenses, underwriting commissions and discounts
incurred by the Borrower or the Company in connection therewith plus the value
of any Real Estate contributed to the Borrower, such value to be reasonably
determined by Borrower and approved by the Agent.
Non-recourse Indebtedness. Indebtedness of a Person which is secured
by one or more parcels of Real Estate (other than Mortgaged Property) and
related personal property or interests therein and Short-term Investments and is
not a general obligation of such Person, the holder of such Indebtedness having
recourse solely to the parcels of Real Estate securing such Indebtedness, the
Building and Leases thereon and the rents and profits thereof and the Short-term
Investments securing such Indebtedness.
Notes. See ss.2.3.
Notice. See ss.19.
Obligations. All indebtedness, obligations and liabilities of the
Borrower to any of the Banks and the Agent, individually or collectively, under
this Agreement or any of the other Loan Documents or in respect of any of the
Loans or the Notes, or other instruments at any time evidencing any of the
foregoing, whether existing on the date of this Agreement or arising or incurred
hereafter, direct or indirect, joint or several, absolute or
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contingent, matured or unmatured, liquidated or unliquidated, secured or
unsecured, arising by contract, operation of law or otherwise.
Operating Cash Flow. With respect to any Person (or any asset of any
Person) for any period, an amount equal to the sum of (a) the Net Income of such
Person (or attributable to such asset) for such period plus (b) depreciation and
amortization, interest expense, and any extraordinary or non-recurring losses
deducted in calculating such Net Income minus (c) any extraordinary or
nonrecurring gains included in calculating such Net Income minus (d) the Capital
Expenditure Reserve Amount, all as determined in accordance with generally
accepted accounting principles.
Outstanding. With respect to the Loans, the aggregate unpaid
principal thereof as of any date of determination.
PBGC. The Pension Benefit Guaranty Corporation created by ss.4002 of
ERISA and any successor entity or entities having similar responsibilities.
Permitted Liens. Liens, security interests and other encumbrances
permitted by ss.8.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and any government
or any governmental agency or political subdivision thereof.
Potential Collateral. Any property of the Borrower which is not at
the time included in the Collateral and which consists of (i) Eligible Real
Estate and (ii) Real Estate which is capable of becoming Eligible Real Estate
through the approval of the Requisite Banks and the completion and delivery of
Eligible Real Estate Qualification Documents.
Pro Forma Debt Service Charges. For any period of four consecutive
fiscal quarters the sum of principal and interest which would have been payable
during such period on a loan in the original principal amount equal to the
outstanding principal balance of the Loans as of the date of such determination
bearing interest at a rate per annum equal to the greater of (i) the sum of the
then-current annual yield on ten ( 10) year obligations issued by the United
States Treasury most recently prior to the date of such determination plus two
percent (2%) and (ii) the weighted average of the then applicable interest
rate(s) on the Loans and being payable based on a 20 year mortgage style
amortization schedule. Such determination of the Pro Forma Debt Service Charges
by the Agent shall be conclusive and binding absent manifest error.
Real Estate. All real property at any time owned or leased (as lessee or
sublessee) by the Company, the Borrower or any of its Subsidiaries.
Record. The grid attached to any Note, or the continuation of such
grid, or any other similar record, including computer records, maintained by any
Bank with respect to any Loan referred to in such Note.
Reference Bank. FNBB.
Register. See ss.18.2.
REIT Status. With respect to the Company, its status as a real estate
investment trust as defined in ss.856(a) of the Code.
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Release. See ss.6.18(c)(iii).
Rent Roll. A report prepared by the Borrower showing for each unit
its type, occupancy status, lease expiration date, market rent, lease rent and
other information in substantially the form presented to the Banks prior to the
date hereof or in such other form as may have been approved by the Agent, such
approval not to be unreasonably withheld.
Requisite Banks. As of any date, the Bank or Banks whose aggregate
Commitment Percentage is more than sixty-six percent (66%); provided, that, in
determining said percentage at any given time, all then existing Defaulting
Banks will be disregarded and excluded and the Commitment Percentages of the
Banks shall be redetermined, for voting purposes only, to exclude the Commitment
Percentages of such Defaulting Banks.
SEC. The federal Securities and Exchange Commission.
Security Deeds. The mortgages, deeds to secure debt and deeds of
trust from the Borrower (or from the Company and assumed by the Borrower) to the
Agent for the benefit of the Banks (or to trustees named therein acting on
behalf of the Agent for the benefit of the Banks), as the same may be modified
or amended, pursuant to which the Borrower or the Company has conveyed a
Mortgaged Property as security for the Obligations.
Security Documents. The Security Deeds, the Assignments of Rents and
Leases, the Indemnity Agreement, and any further collateral assignments to the
Agent for the benefit of the Banks, including, without limitation, UCC-1
financing statements executed and delivered in connection therewith.
Service Agreement. Service agreements with third parties, whether
written or oral, relating to the operation, maintenance, security, finance or
insurance of Mortgaged Property.
Short-term Investments. Investments described in subsections (a)
through (g), inclusive, of ss.8.3.
State. A state of the United States of America.
Subsidiary. Any corporation, association, partnership, trust, or
other business entity of which the designated parent shall at any time own
directly or indirectly through a Subsidiary or Subsidiaries at least a majority
(by number of votes or controlling interests) of the outstanding Voting
Interests, provided, however, that any references in this Agreement to the
Subsidiaries of the Borrower shall be deemed to also include all Subsidiaries of
the Company.
Successful Initial Public Offering. An offering of common equity of
the Company to the public pursuant to a registration statement under the
Securities Act of 1933, as amended, and the rules and regulations in effect
thereunder, which has been declared effective by the Securities and Exchange
Commission and results in (i) the common equity being listed on the New York
Stock Exchange, the American Stock Exchange or the NASDAQ National Market System
for a per share price of not less than $12 per share and (ii) net proceeds to
the Company after underwriting fees or placement fees, as the case may be, of
not less than $50,000,000.
Survey. An instrument survey of Mortgaged Property prepared by a
registered land surveyor which shall show the location of all buildings,
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structures, easements and utility lines on such property, shall be sufficient to
remove the standard survey exception from the Title Policy, shall show that all
buildings and structures are within the lot lines of the Mortgaged Property and
shall not show any encroachments by others (or to the extent any encroachments
are shown, such encroachments shall be acceptable to the Agent in its sole
discretion), shall show rights of way, adjoining sites, establish building lines
and street lines, the distance to, and names of the nearest intersecting streets
and such other details as the Agent may reasonably require; shall show the
zoning district or districts in which the Mortgaged Property is located and
shall show whether or not the Mortgaged Property is located in a flood hazard
district as established by the Federal Emergency Management Agency or any
successor agency or is located in any flood plain, flood hazard or wetland
protection district established under federal, state or local law and shall
otherwise be in form and substance reasonably satisfactory to the Agent.
Surveyor Certification. With respect to each parcel of Mortgaged
Property, a certificate executed by the surveyor who prepared the Survey with
respect thereto, dated as of a recent date and containing such information
relating to such parcel as the Agent or the Title Insurance Company may
reasonably require, such certificate to be reasonably satisfactory to the Agent
in form and substance.
Title Insurance Company. Chicago Title Insurance Company or another
title insurance company or companies approved by the Agent.
Title Policy. With respect to each parcel of Mortgaged Property, an
ALTA standard form title insurance policy (or, if such form is not available, an
equivalent form of or legally promulgated form of mortgagee title insurance
policy reasonably acceptable to the Agent) issued by a Title Insurance Company
(with such reinsurance or co-insurance as the Agent may require, any such
reinsurance to be with direct access endorsements to the extent available under
applicable law) in such amount as the Agent may require insuring the priority of
the Security Deeds and that the Borrower holds marketable fee simple title to
such parcel, subject only to the encumbrances permitted by the Security Deed and
which shall not contain standard exceptions for mechanics liens, persons in
occupancy (other than tenants as tenants only under Leases consistent with the
Rent Rolls delivered to the Agent hereunder) or matters which would be shown by
a survey, shall not insure over any matter except to the extent that any such
affirmative insurance is acceptable to the Agent in their reasonable discretion,
and shall contain (a) a revolving credit endorsement and (b) such other
endorsements and affirmative insurance as the Agent reasonably may require and
is available in the State in which the Real Estate is located, including but not
limited to (i) a comprehensive endorsement, (ii) a variable rate of interest
endorsement, (iii) a usury endorsement, (iv) a doing business endorsement, (v)
in States where available, an ALTA form 3.1 zoning endorsement, (vi) a "tie-in"
endorsement and (vii) a "first loss" endorsement.
Total Commitment. The sum of the Commitments of the Banks, as in
effect from time to time. As of the date of this Agreement, the Total
Commitment is $75,000,000.00.
Type. As to any Loan, its nature as a Base Rate Loan or a LIBOR Rate
Loan.
Voting Interests. Stock or similar ownership interests, of any class
or classes (however designated), the holders of which are at the time
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entitled, as such holders, (a) to vote for the election of a majority of the
directors (or persons performing similar functions) of the corporation,
association, partnership, trust or other business entity involved, or (b) to
control, manage, or conduct the business of the corporation, partnership,
association, trust or other business entity involved.
ss.1.2. Rules of Interpretation.
(a) A reference to any document or agreement shall include
such document or agreement as amended, modified or supplemented from time to
time in accordance with its terms and the terms of this Agreement.
(b)The singular includes the plural and the plural includes
the singular.
(c)A reference to any law includes any amendment or
modification to such law.
(d) A reference to any Person includes its permitted
successors and permitted assigns.
(e) Accounting terms not otherwise defined herein have the
meanings assigned to them by generally accepted accounting principles applied on
a consistent basis by the accounting entity to which they refer.
(f)The words "include", "includes" and "including" are not
limiting.
(g) The words "approval" and "approved", as the context so
determines, means an approval in writing given to the party seeking approval for
full and fair disclosure to the party giving approval of all material facts
necessary in order to determine whether approval should be granted.
(h) All terms not specifically defined herein or by
generally accepted accounting principles, which terms are defined in the Uniform
Commercial Code as in effect in the State of Illinois, have the meanings
assigned to them therein.
(i)Reference to a particular "ss.", refers to that section of
this Agreement unless otherwise indicated.
(j) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole and not to any particular
section or subdivision of this Agreement.
ss.2. THE REVOLVING CREDIT FACILITY.
ss.1. Commitment to Lend. Subject to the terms and conditions set
forth in this Agreement, each of the Banks severally agrees to lend to the
Borrower, and the Borrower may borrow (and repay and reborrow) from time to time
between the Closing Date and the Maturity Date upon notice by the Borrower to
the Agent given in accordance with ss.2.5, such sums as are requested by the
Borrower for the purposes set forth in ss.7.11 up to the lesser of (a) a maximum
aggregate principal amount outstanding (after giving effect to all amounts
requested) at any one time equal to such Bank's Commitment and (b) such Bank's
Commitment Percentage of the Borrowing Base; provided, that, in all events no
Default or Event of Default shall have occurred and be continuing; and provided,
further that the outstanding principal amount of the
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Loans (after giving effect to all amounts requested) shall not at anytime exceed
the Total Commitment. The Loans shall be made pro rata in accordance with each
Bank's Commitment Percentage. Each request for a Loan hereunder shall constitute
a representation and warranty by the Borrower that all of the conditions set
forth in ss.10 and ss.11, in the case of the initial Loan advanced after the
date hereof, and ss.11 , in the case of all other Loans, have been satisfied on
the date of such request.
ss.2. Unused Facility Fee. The Borrower agrees to pay to the Agent
for the accounts of the Banks in accordance with their respective Commitment
Percentages an unused facility fee calculated at the rate of one-fourth of one
percent (1/4%) per annum on the average daily amount by which the aggregate
Commitment exceeds the outstanding principal amount of Loans during each
calendar quarter or portion thereof commencing on the date hereof and ending on
the Maturity Date. The unused facility fee shall be payable quarterly in arrears
on the first day of each calendar quarter for the immediately preceding calendar
quarter or portion thereof, with a final payment on the Maturity Date.
ss.3. Notes. The Loans shall be evidenced by separate promissory
notes of the Borrower in substantially the form of Exhibit A hereto
(collectively, the "Notes"), dated as of the Closing Date and completed with
appropriate insertions. One Note shall be payable to the order of each Bank in
the principal amount equal to such Bank's Commitment. The Borrower irrevocably
authorizes each Bank to make or cause to be made, at or about the time of the
Drawdown Date of any Loan or at the time of receipt of any payment of principal
thereof, an appropriate notation on such Bank's Record reflecting the making of
such Loan or (as the case may be) the receipt of such payment. The outstanding
amount of the Loans set forth on such Bank's Record shall be prima facie
evidence of the principal amount thereof owing and unpaid to such Bank, but the
failure to record, or any error in so recording, any such amount on such Bank's
Record shall not limit or otherwise affect the obligations of the Borrower
hereunder or under any Note to make payments of principal of or interest on any
Note when due.
ss.4. Interest on Loans.
(a) Each Base Rate Loan shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the date on which such Base Rate Loan is
converted to a LIBOR Rate Loan at the per annum rate equal to the Base Rate.
(b) Each LIBOR Rate Loan shall bear interest for the period commencing with
the Drawdown Date thereof and ending on the last day of the Interest Period with
respect thereto at the rate per annum equal to the sum of the Applicable Margin
plus the LIBOR Rate determined for such Interest Period.
(c) The Borrower promises to pay interest on each Loan to it in arrears on
each Interest Payment Date with respect thereto.
(d) Base Rate Loans and LIBOR Rate Loans may be converted to Loans of the
other Type as provided in ss.4.1.
ss.5. Requests for Loans. The Borrower (i) shall notify the Agent of
a potential request for a Loan as soon as possible but not less than six (6)
Business Days prior to the Borrower's proposed Drawdown Date, and (ii) shall
give to the Agent written notice in the form of Exhibit B hereto of each Loan
requested hereunder (a "Loan Request") no less than three (3) Business Days
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prior to the proposed Drawdown Date. Each such notice shall specify with respect
to the requested Loan the proposed principal amount, Drawdown Date, Interest
Period (if applicable) and Type. Each such notice shall also contain (i) a
statement as to the purpose for which such advance shall be or has been used
(which purpose shall be in accordance with the terms of ss.7.11), (ii) in the
case of any advance relating to any Capital Improvement Project, upon the
request of the Agent (A) a statement that such advance will reimburse the
Borrower for or pay costs incurred for work on the applicable Capital
Improvement Project together with such evidence as the Agent may reasonably
require to verify the cost of such work (which evidence may include, without
limitation, invoices and receipts) and that such work is in place or that stored
materials are properly secured (which evidence may include a satisfactory report
from the Construction Inspector), and (B) in the event that such Capital
Improvement Project relates to a Mortgaged Property and if requested by the
Agent, delivery to the Agent of affidavits, lien waivers or other evidence
reasonably satisfactory to the Agent showing that all materialmen, laborers'
subcontractors and any other parties who might or could claim statutory or
common law liens and are furnishing or have furnished material or labor to the
Mortgaged Property have been paid all amounts due for such labor and materials,
and (iii) a certification by the chief financial or chief accounting officer of
the Company that the Borrower is and will be in compliance with all covenants
under the Loan Documents after giving effect to the making of such Loan.
Notwithstanding anything in this ss.2.5 to the contrary, the Borrower shall be
permitted to use the proceeds of a Loan to reimburse the Borrower for amounts
paid from its own funds within the preceding ninety (90) days for a purpose
authorized by the terms of ss.7.11. Promptly upon receipt of any such notice,
the Agent shall notify each of the Banks thereof. Except as provided in this
ss.2.5, each such Loan Request shall be irrevocable and binding on the Borrower
and shall obligate the Borrower to accept the Loan requested from the Banks on
the proposed Drawdown Date, provided that, in addition to the Borrower's other
remedies against any Bank which fails to advance its proportionate share of a
requested Loan, such Loan Request may be revoked by the Borrower by notice
received by the Agent no later than the Drawdown Date if any Bank fails to
advance its proportionate share of the requested Loan in accordance with the
terms of this Agreement, provided further that the Borrower shall be liable in
accordance with the terms of this Agreement to any Bank which is prepared to
advance its proportionate share of the requested Loan for any costs, expenses or
damages actually incurred by such Bank as a result of the Borrower's election to
revoke such Loan Request. Nothing herein shall prevent the Borrower from seeking
recourse against any Bank that fails to advance its proportionate share of a
requested Loan as required by this Agreement. The Borrower may without cost or
penalty revoke a Loan Request by delivering notice thereof to each of the Banks
no later than three (3) Business Days prior to the Drawdown Date. Each Loan
Request shall be (a) for a Base Rate Loan in a minimum aggregate amount of
$1,000,000 or an integral multiple of $100,000 in excess thereof, or (b) for a
LIBOR Rate Loan in a minimum aggregate amount of $2,000,000 or an integral
multiple of $100,000 in excess thereof; provided, however, that there shall be
no more than six (6) LIBOR Rate Loans outstanding at any one time. In the event
that the proceeds from such Loan have been or are to be used for a purpose other
than a Capital Improvement Project, then the Borrower shall provide to the Agent
as soon as practicable such evidence as the Agent shall reasonably require to
evidence that such funds have been used for such purpose (which evidence may
include, without limitation, a closing statement).
ss.6. Funds for Loans. Not later than 12:00 a.m. (Boston time) on
the proposed Drawdown Date of any Loans, each of the Banks will make available
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to the Agent, at the Agent's Head Office, in immediately available funds, the
amount of such Bank's Commitment Percentage of the amount of the requested Loans
which may be disbursed pursuant to ss.2.1. Upon receipt from each Bank of such
amount, and upon receipt of the documents required by ss.10 and ss.11 and the
satisfaction of the other conditions set forth therein, to the extent
applicable, the Agent will make available to the Borrower the aggregate amount
of such Loans made available to the Agent by the Banks by crediting such amount
to the account of the Borrower maintained at the Agent's Head Office. The
failure or refusal of any Bank to make available to the Agent at the aforesaid
time and place on any Drawdown Date the amount of its Commitment Percentage of
the requested Loans shall not relieve any other Bank from its several obligation
hereunder to make available to the Agent the amount of such other Bank's
Commitment Percentage of any requested Loans, including any additional Loans
that may be requested subject to the terms and conditions hereof to provide
funds to replace those not advanced by the Bank so failing or refusing, provided
that the Borrower may by notice received by the Agent no later than the Drawdown
Date refuse to accept any Loan which is not fully funded in accordance with the
Borrower's Loan Request subject to the terms of ss.2.5. In the event of any such
failure or refusal, the Banks not so failing or refusing shall be entitled to a
priority secured position as against the Bank or Banks so failing or refusing
for such Loans as provided in ss.12.5.
ss.3. ASSUMPTION AND REPAYMENT OF THE LOANS.
ss.1. Assumption by Borrower. In consideration for the consent of the
Agent and the Banks to the transfer of the assets of the Company, including the
Mortgaged Properties, to the Borrower, and for other good and valuable
consideration, the Borrower hereby assumes all obligations of the Company under
the Prior Credit Agreement and all Loan Documents executed and delivered by the
Company pursuant to the Prior Credit Agreement and without limiting the
foregoing, the Borrower hereby assumes and agrees to pay all Loans presently
outstanding under the Prior Credit Agreement and the Notes executed and
delivered by the Company to FNBB and BOA thereunder. The Borrower and the
Company agree to execute all further documents which may be requested by the
Agent or the Requisite Banks to effect or confirm the foregoing assumption
including without limitation assumption and amendment agreements relating to the
Security Documents delivered by the Company to the Agent pursuant to the Prior
Credit Agreement and UCC Financing Statements naming the Borrower as debtor
perfecting the security interests granted pursuant to said Security Documents.
The Company shall remain liable for the obligations assumed hereunder as the
original obligor thereof, as general partner of the Borrower and as guarantor
under the Guaranty.
ss.2. Stated Maturity. The Borrower promises to pay on the Maturity
Date and there shall become absolutely due and payable on the Maturity Date
all of the Loans outstanding on such date, together with any and all accrued
and unpaid interest thereon.
ss.3. Mandatory Prepayments. If at any time the aggregate outstanding
principal amount of the Loans exceeds (a) the aggregate Commitment, or (b) the
Borrowing Base for the Loans, then the Borrower shall immediately pay the amount
of such excess to the Agent for the respective accounts of the Banks for
application to such Loans.
ss.4. Optional Prepayments. The Borrower shall have the right, at
its election, to prepay the outstanding amount of the applicable Loans, as a
whole or in part, at any time without penalty or premium; provided, that the
full or partial prepayment of the outstanding amount of any LIBOR Rate Loans
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pursuant to this ss.3.4 may be made only on the last day of the Interest Period
relating thereto except as otherwise required pursuant to ss.4.7. The Borrower
shall give the Agent, no later than 10:00 a.m., Boston time, at least five (5)
Business Days' prior written notice of any prepayment pursuant to this ss.3.4,
in each case specifying the proposed date of payment of Loans and the principal
amount to be paid.
ss.5. Partial Prepayments. Each partial prepayment of the Loans under
ss.3.3(a) and ss.3.4 shall be in an integral multiple of $100,000, shall be
accompanied by the payment of accrued interest on the principal prepaid to the
date of payment and, after payment of such interest, shall be applied, in the
absence of instruction by the Borrower, first to the principal of Base Rate
Loans and then to the principal of LIBOR Rate Loans.
ss.6. Effect of Prepayments. Amounts of the Loans prepaid under ss.3.3
and ss.3.4 prior to the Maturity Date may be reborrowed as provided in ss.2.
ss.7. Proceeds from Debt or Equity Offering. The Company agrees that
all Net Offering Proceeds and the net proceeds of any unsecured Debt Offering
shall be immediately contributed by the Company to the Borrower. At the option
of the Requisite Banks, the Borrower shall cause any Net Offering Proceeds
(other than Net Offering Proceeds in the form of Real Estate contributed to the
Borrower) and the net proceeds of any unsecured Debt Offering to be paid by the
Borrower to the Agent for the account of the Banks as a prepayment of the Loans
to the Borrower to the extent of the outstanding balance of such Loans.
ss.4. CERTAIN GENERAL PROVISIONS.
ss.1. Conversion Options.
(a)The Borrower may elect from time to time to convert any
of its outstanding Loans to a Loan of another Type and such Loan shall
thereafter bear interest as a Base Rate Loan or a LIBOR Rate Loan, as
applicable; provided that (i) with respect to any such conversion of a LIBOR
Rate Loan to a Base Rate Loan, the Borrower shall give the Agent at least three
(3) Business Days' prior written notice of such election, and such conversion
shall only be made on the last day of the Interest Period with respect to such
LIBOR Rate Loan; (ii) with respect to any such conversion of a Base Rate Loan to
a LIBOR Rate Loan, the Borrower shall give the Agent at least four (4) LIBOR
Business Days' prior written notice of such election and the Interest Period
requested for such Loan, the principal amount of the Loan so converted shall be
in a minimum aggregate amount of $2,000,000 or an integral multiple of $100,000
in excess thereof and, after giving effect to the making of such Loan, there
shall be no more than four (4) LIBOR Rate Loans outstanding at any one time; and
(iii) no Loan may be converted into a LIBOR Rate Loan when any Default or Event
of Default has occurred and is continuing. All or any part of the outstanding
Loans of any Type may be converted as provided herein, provided that no partial
conversion shall result in a Base Rate Loan in an aggregate principal amount of
less than $1,000,000 or a LIBOR Rate Loan in an aggregate principal amount of
less than $2,000,000 and that the aggregate principal amount of each Loan shall
be in an integral multiple of $100,000. On the date on which such conversion is
being made, each Bank shall take such action as is necessary to transfer its
Commitment Percentage of such Loans to its Domestic Lending Office or its LIBOR
Lending Office, as the case may be. Each Conversion Request relating to the
conversion of a Base Rate Loan to a LIBOR Rate Loan shall be irrevocable by the
Borrower.
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(b) Any Loan may be continued as such Type upon the
expiration of an Interest Period with respect thereto by compliance by the
Borrower with the terms of ss.4.1; provided that no LIBOR Rate Loan may be
continued as such when any Default or Event of Default has occurred and is
continuing, but shall be automatically converted to a Base Rate Loan on the last
day of the Interest Period relating thereto ending during the continuance of any
Default or Event of Default.
(c)In the event that the Borrower does not notify the Agent
of its election hereunder with respect to any Loan to it, such Loan shall be
automatically converted to a Base Rate Loan at the end of the applicable
Interest Period.
ss.2. Commitment and Syndication Fee. The Borrower agrees to pay to
FNBB the additional commitment and syndication fee provided for in the Agreement
Regarding Fees dated as of March 15, 1996 between the Company and FNBB as
assumed by the Borrower and amended December , 1996 in connection with the
increase of the Total Commitment from $50,000,000 to $75,000,000.
ss.3. Agent's Fee. The Borrower has paid to the Agent, for the
Agent's own account, an annual Agent's fee calculated at the rate, and payable
at such times as are, set forth in the Agreement Regarding Fees referred to in
ss. 4.2.
ss.4. Funds for Payments.
(a) All payments of principal, interest, unused facility
fees, Agent's fees, closing fees and any other amounts due hereunder or under
any of the other Loan Documents shall be made to the Agent, for the respective
accounts of the Banks and the Agent, as the case may be, at the Agent's Head
Office, not later than 1:00 p.m. (Boston time) on the day when due, in each case
in immediately available funds. The Agent is hereby authorized to charge the
accounts of the Borrower with FNBB, on the dates when the amount thereof shall
become due and payable, with the amounts of the principal of and interest on the
Loans and all fees, charges, expenses and other amounts owing to the Agent
and/or the Banks under the Loan Documents.
(b)All payments by the Borrower hereunder and under any of
the other Loan Documents shall be made without setoff or counterclaim and free
and clear of and without deduction for any taxes, levies, imposts, duties,
charges, fees, deductions, withholdings, compulsory loans, restrictions or
conditions of any nature now or hereafter imposed or levied by any jurisdiction
or any political subdivision thereof or taxing or other authority therein unless
the Borrower is compelled by law to make such deduction or withholding. If any
such obligation is imposed upon the Borrower with respect to any amount payable
by them hereunder or under any of the other Loan Documents, the Borrower will
pay to the Agent, for the account of the Banks or (as the case may be) the
Agent, on the date on which such amount is due and payable hereunder or under
such other Loan Document, such additional amount in Dollars as shall be
necessary to enable the Banks or the Agent to receive the same net amount which
the Banks or the Agent would have received on such due date had no such
obligation been imposed upon the Borrower. The Borrower will deliver promptly to
the Agent certificates or other valid vouchers for all taxes or other charges
deducted from or paid with respect to payments made by the Borrower hereunder or
under such other Loan Document. FNBB represents and warrants that, to the best
of its knowledge, it is exempt from United States Federal withholding
requirements with respect to payments to be made by the Borrower to FNBB
hereunder.
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ss.5. Computations. All computations of interest on the Loans and of
other fees to the extent applicable shall be based on a 360-day year and paid
for the actual number of days elapsed. Except as otherwise provided in the
definition of the term "Interest Period" with respect to LIBOR Rate Loans,
whenever a payment hereunder or under any of the other Loan Documents becomes
due on a day that is not a Business Day, the due date for such payment shall be
extended to the next succeeding Business Day, and interest shall accrue during
such extension. The outstanding amount of the Loans as reflected on the records
of the Agent from time to time shall be considered prima facie evidence of such
amount.
ss.6. Inability to Determine LIBOR Rate. In the event that, prior to
the commencement of any Interest Period relating to any LIBOR Rate Loan, the
Agent shall reasonably determine that adequate and reasonable methods do not
exist for ascertaining the LIBOR Rate for such Interest Period, the Agent shall
forthwith give notice of such determination (which shall be conclusive and
binding on the Borrower and the Banks) to the Borrower and the Banks. In such
event (a) any Loan Request with respect to LIBOR Rate Loans shall be
automatically withdrawn and shall be deemed a request for Base Rate Loans and
(b) each LIBOR Rate Loan will automatically, on the last day of the then current
Interest Period thereof, become a Base Rate Loan, and the obligations of the
Banks to make LIBOR Rate Loans shall be suspended until the Agent determines
that the circumstances giving rise to such suspension no longer exist, whereupon
the Agent shall so notify the Borrower and the Banks.
ss.7. Illegality. Notwithstanding any other provisions herein, if any
present or future law, regulation, treaty or directive or the interpretation or
application thereof shall make it unlawful, or any central bank or other
governmental authority having jurisdiction over a Bank or its LIBOR Lending
Office shall assert that it is unlawful, for any Bank to make or maintain LIBOR
Rate Loans, such Bank shall forthwith give notice of such circumstances to the
Agent and the Borrower and thereupon (a) the commitment of the Banks to make
LIBOR Rate Loans or convert Loans of another type to LIBOR Rate Loans shall
forthwith be suspended and (b) the LIBOR Rate Loans then outstanding shall be
converted automatically to Base Rate Loans on the last day of each Interest
Period applicable to such LIBOR Rate Loans or within such earlier period as may
be required by law.
ss.8. Additional Interest. If any LIBOR Rate Loan or any portion
thereof is repaid or is converted to a Base Rate Loan for any reason on a date
which is prior to the last day of the Interest Period applicable to such LIBOR
Rate Loan, the Borrower will pay to the Agent upon the later of fifteen (15)
days after demand or the next scheduled Interest Payment Date for the account of
the Banks in accordance with their respective Commitment Percentages, in
addition to any amounts of interest otherwise payable hereunder, any amounts
required to compensate the Banks for any losses, costs or expenses which may
reasonably be incurred as a result of such payment or conversion, including,
without limitation, an amount equal to daily interest for the unexpired portion
of such Interest Period on the LIBOR Rate Loan or portion thereof so repaid or
converted at a per annum rate equal to the excess, if any, of (a) the interest
rate calculated on the basis of the LIBOR Rate applicable to such LIBOR Rate
Loan minus (b) the yield obtainable by the Agent upon the purchase of debt
securities customarily issued by the Treasury of the United States of America
which have a maturity date most closely approximating the last day of such
Interest Period (it being understood that the purchase of such securities shall
not be required in order for such amounts to be payable).
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ss.9. Additional Costs, Etc. Notwithstanding anything herein to the
contrary, if any present or future applicable law, which expression, as used
herein, includes statutes, rules and regulations thereunder and legally binding
interpretations thereof by any competent court or by any governmental or other
regulatory body or official with appropriate jurisdiction charged with the
administration or the interpretation thereof and requests, directives,
instructions and notices at any time or from time to time hereafter made upon or
otherwise issued to any Bank or the Agent by any central bank or other fiscal,
monetary or other authority (whether or not having the force of law), shall:
(a) subject any Bank or the Agent to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement, the
other Loan Documents, such Bank's Commitment or the Loans (other than taxes
based upon or measured by the income or profits of such Bank or the Agent), or
(b) materially change the basis of taxation (except for changes in taxes on
income or profits) of payments to any Bank of the principal of or the interest
on any Loans or any other amounts payable to any Bank under this Agreement or
the other Loan Documents, or
(c) impose or increase or render applicable any special deposit, reserve,
assessment, liquidity, capital adequacy or other similar requirements (whether
or not having the force of law) against assets held by, or deposits in or for
the account of, or loans by, or commitments of an office of any Bank, or
(d) impose on any Bank or the Agent any other conditions or requirements
with respect to this Agreement, the other Loan Documents, the Loans, such Bank's
Commitment, or any class of loans or commitments of which any of the Loans or
such Bank's Commitment forms a part; and the result of any of the foregoing is
(i) to increase the cost to any Bank of making, funding, issuing, renewing,
extending or maintaining any of the Loans or such Bank's Commitment, or
(ii) to reduce the amount of principal, interest or other
amount payable to such Bank or the Agent hereunder on account of such Bank's
Commitment or any of the Loans, or
(iii)to require such Bank or the Agent to make any payment or
to forego any interest or other sum payable hereunder, the amount of which
payment or foregone interest or other sum is calculated by reference to the
gross amount of any sum receivable or deemed received by such Bank or the Agent
from the Borrower hereunder, then, and in each such case, the Borrower will,
upon the later of fifteen (15) days after demand made by such Bank or (as the
case may be) the Agent or the next scheduled Interest Payment Date at any time
and from time to time and as often as the occasion therefor may arise, pay to
such Bank or the Agent such additional amounts as such Bank or the Agent shall
determine in good faith to be sufficient to compensate such Bank or the Agent
for such additional cost, reduction, payment or foregone interest or other sum.
Each Bank and the Agent in determining such amounts may use any reasonable
averaging and attribution methods, generally applied by such Bank or the Agent.
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ss.10. Capital Adequacy. If after the date hereof any Bank determines
that (a) the adoption of or change in any law, rule, regulation or guideline
regarding capital requirements for banks or bank holding companies or any change
in the interpretation or application thereof by any governmental authority
charged with the administration thereof, or (b) compliance by such Bank or its
parent bank holding company with any guideline, request or directive of any such
entity regarding capital adequacy (whether or not having the force of law), has
the effect of reducing the return on such Bank's or such holding company's
capital as a consequence of such Bank's commitment to make Loans hereunder to a
level below that which such Bank or holding company could have achieved but for
such adoption, change or compliance (taking into consideration such Bank's or
such holding company's then existing policies with respect to capital adequacy
and assuming the full utilization of such entity's capital) by any amount deemed
by such Bank to be material, then such Bank may notify the Borrower
thereo(pound) The Borrower agrees to pay to such Bank the amount of such
reduction in the return on capital upon the later of fifteen (15) days after
such reduction is determined or the next scheduled Interest Payment Date, upon
presentation by such Bank of a statement of the amount setting for the Bank's
calculation thereof. In determining such amount, such Bank may use any
reasonable averaging and attribution methods.
ss.11. Indemnity of Borrower. The Borrower agrees to indemnify each
Bank and to hold each Bank harmless from and against any loss, cost or expense
that such Bank may sustain or incur as a consequence of (a) default by the
Borrower in payment of the principal amount of or any interest on any LIBOR Rate
Loans as and when due and payable, including any such loss or expense arising
from interest or fees payable by such Bank to lenders of funds obtained by it in
order to maintain its LIBOR Rate Loans, or (b) default by the Borrower in making
a borrowing or conversion after the Borrower has given (or is deemed to have
given) a Loan Request or a Conversion Request.
ss.12. Interest on Overdue Amounts; Late Charge. Overdue principal
and (to the extent permitted by applicable law) interest on the Loans and all
other overdue amounts payable hereunder or under any of the other Loan Documents
shall bear interest payable on demand at a rate per annum equal to five percent
(5.0%) above the Base Rate until such amount shall be paid in full (after as
well as before judgment). In addition, the Borrower shall pay a late charge
equal to four percent (4.0%) of any amount of interest and/or principal payable
on the Loans or any other amounts payable hereunder or under the Loan Documents,
which is not paid by the Borrower within ten days of the date when due.
ss.13. HLT Classification. The Banks acknowledge that as of the date
hereof neither the Commitments nor the Loans are classified as "highly leveraged
transactions". Notwithstanding the foregoing, if after the date hereof, the
Agent determines, or is advised by any Bank that such Bank has determined or has
received notice from any governmental authority, central bank or comparable
agency having jurisdiction over such Bank, that any of the Commitments or Loans
are classified as a "highly leveraged transaction" (an "HLT Classification")
pursuant to any existing regulations regarding "highly leveraged transactions"
or any modification, amendment or interpretation thereof, or the adoption of new
regulations regarding "highly leveraged transactions" after the date hereof by
any governmental authority, central bank or comparable agency, the Agent shall
promptly give notice of such HLT Classification to the Borrower and the Banks
(which date is hereafter referred to as the "HLT Notice Date"). The Agent, the
Banks and the Borrower shall thereupon commence negotiations in good faith to
agree on the extent to which fees, interest rates and/or margins hereunder
should be increased so as to
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reflect such HLT Classification. If the Borrower and the Requisite Banks agree
on the amount of such increase or increases, this Agreement shall be promptly
amended to give effect to such increase or increases. If the Borrower and the
Requisite Banks fail to so agree and the Borrower has failed to refinance the
Loans within 90 days after the HLT Notice Date, then the Agent shall, if so
requested by the Requisite Banks, by notice to the Borrower terminate the
Commitments and accelerate the maturity date of the Loans and the Loans shall
become due and payable in full on the date specified in such notice, which date
shall be not earlier than 180 days after the HLT Notice Date. The Agent and the
Banks acknowledge that an HLT Classification is not a Default or an Event of
Default.
ss.14. Certificate. A certificate setting forth any amounts payable
pursuant to ss.4.8, ss.4.9, ss.4.10, ss.4.11, ss.4.12 or ss.4.13 and a brief
explanation of such amounts which are due, submitted by any Bank or the Agent to
the Borrower, shall be conclusive in the absence of manifest error.
ss.15. Limitation on Interest. Notwithstanding anything in this
Agreement to the contrary, all agreements between the Borrower and the Banks and
the Agent, whether now existing or hereafter arising and whether written or
oral, are hereby limited so that in no contingency, whether by reason of
acceleration of the maturity of any of the Obligations or otherwise, shall the
interest contracted for, charged or received by the Banks exceed the maximum
amount permissible under applicable law. If, from any circumstance whatsoever,
interest would otherwise be payable to the Banks in excess of the maximum lawful
amount, the interest payable to the Banks shall be reduced to the maximum amount
permitted under applicable law; and if from any circumstance the Banks shall
ever receive anything of value deemed interest by applicable law in excess of
the maximum lawful amount, an amount equal to any excessive interest shall be
applied to the reduction of the principal balance of the Obligations of the
Borrower and to the payment of interest or, if such excessive interest exceeds
the unpaid balance of principal of the Obligations of the Borrower, such excess
shall be refunded to the Borrower. All interest paid or agreed to be paid to the
Banks shall, to the extent permitted by applicable law, be amortized, prorated,
allocated and spread throughout the full period until payment in full of the
principal of the Obligations of the Borrower (including the period of any
renewal or extension thereof so that the interest thereon for such full period
shall not exceed the maximum amount permitted by applicable law. This section
shall control all agreements between the Borrower and the Banks and the Agent.
ss.16. Substitution of a Bank. If any Bank (the "Affected Bank") has
demanded compensation or given notice of its intention to demand compensation
pursuant to ss.4.7, ss.4.9 or ss.4.10, and the circumstance triggering such
demand or intention to demand is not applicable to all of the Banks, the
Borrower shall have the right, with the assistance of the Agent, to seek one or
more mutually satisfactory substitute banks or financial institutions (which may
be one or more of the Banks) to replace such Affected Bank subject to the
payment to the Agent of an appropriate fee to be agreed upon for the assistance
to be provided by the Agent.
ss.5. COLLATERAL SECURITY.
ss.1. Collateral. The Obligations of the Borrower shall be secured
by (i) a perfected first priority lien or security title to be held by the
Agent for the benefit of the Banks in the Mortgaged Property of the Borrower,
pursuant to the terms of the Security Deeds, (ii) a perfected first priority
security interest to be held by the Agent for the benefit of the Banks in the
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Leases pursuant to the Assignments of Rents and Leases from the Borrower and
(iii) the Indemnity Agreement. The Borrower shall notify the Agent of any
proposed additions of Collateral at least thirty (30) days in advance of the
date that Borrower expects to deliver the last of the Eligible Real Estate
Qualification Documents with respect to such Collateral. The Agent shall
promptly provide each Bank with copies of such notice, the Rent Roll, each
document received by the Agent pursuant to paragraphs (k), (m), (o) and (q) of
the definition of Eligible Real Estate Qualification Documents and any of the
other Eligible Real Estate Qualification Documents specifically requested by
such Bank.
ss.2. Appraisals.
(a) The Agent on behalf of the Banks shall require
Appraisals of each of the Mortgaged Properties once every five (5) years, which
will be ordered by the Agent and reviewed and approved by the appraisal
department of the Agent, or, if the Agent's appraisal department has determined
that the value of any Mortgaged Property is more than five percent (5%)
different from the value for such Mortgaged Property as set forth in the
Appraisal delivered to the Agent by the Borrower, by the appraisal departments
of the Requisite Banks, in order to determine the current Appraised Value and
Borrowing Base of the Mortgaged Property, and the Borrower shall pay to the
Agent on demand all reasonable costs of all such Appraisals relating to the
Mortgaged Property of the Borrower; provided, however, that so long as (i) no
Default or Event of Default shall have occurred and be continuing, (ii)
regulatory requirements of any Bank generally applicable to real estate loans of
the category made under this Agreement as reasonably interpreted by such Bank
shall not require more frequent Appraisals and (iii) there has been no material
change in the market for the leasing of any of the Mortgaged Properties as
reasonably determined by the Agent, the Borrower shall not be required to pay
for Appraisals for a particular Mortgaged Property more often than once in any
five (5) year period, with the result that unless any such condition shall occur
the first Appraisals of a Mortgaged Property for which the Borrower shall be
financially responsible shall not be required prior to the date which is five
(5) years from the date of the Appraisal for such Mortgaged Property delivered
to the Agent pursuant to this Agreement. Notwithstanding the foregoing
provisions, however, in the event of a material change of the type referred to
in clause (iii), the Borrower shall not be required to pay for Appraisals of the
affected Mortgaged Property or Mortgaged Properties more often than once in any
12-month period.
(b) Notwithstanding the provisions of ss.5.2(a), the Agent
may, for the purpose of determining the current Appraised Value and Borrowing
Base of the applicable Mortgaged Properties, perform annual internal studies
updating and revising prior Appraisals with respect to the Mortgaged Properties
or such portion thereof as the Agent shall determine at any time following (i)
the occurrence of an event or condition which, in the reasonable judgment of the
Agent, constitutes a material adverse change with respect to a Mortgaged
Property or presents a reasonable likelihood that such a change shall occur in
the future or (ii) a condemnation of or uninsured casualty to a Mortgaged
Property (provided that any such Appraisal as a result of an event or condition
described in clause (i) or (ii) shall be limited to the affected Mortgaged
Property). The expense of such Appraisals and updates performed pursuant to this
ss.5.2(b) shall be borne by the Borrower, provided that the Borrower shall not
be required to pay for any update pursuant to ss.5.2(b)(i) more often than once
in any twelve (12) month period.
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(c) In the event that the Agent shall advise the Borrower,
on the basis of any Appraisal or update pursuant to ss.5.2. that the Borrower's
Borrowing Base is insufficient to comply with the requirements of ss.9.1, then
until such Borrowing Base shall be restored to compliance with ss.9.1 the Banks
shall not be required to make advances under ss.2.1.
ss.3. Release of Collateral. Upon termination of this Agreement and
the Commitment of the Banks to make Loans hereunder and the payment in full of
all of the Obligations, the Agent, on behalf of the Banks, shall release the
Collateral and shall execute such instruments of release as the Borrower and its
counsel may reasonably request. In addition, Collateral may be released as
provided in ss.8.8.
ss.4. Substitution of Mortgaged Property. Any requested substitution
by the Borrower of any Real Estate for any Mortgaged Property shall require the
consent of the Requisite Banks and shall require the completion and delivery to
the Agent, for the benefit of the Banks, of the Eligible Real Estate
Qualification Documents and the payment to the Agent, for the benefit of the
Banks, of a substitution fee of $5,000, which shall be distributed to the Banks
pro-rata in accordance with their Commitment Percentages. The release of a
Mortgaged Property pursuant to ss.8.8 in connection with its sale, transfer or
other disposition by the Borrower to an unrelated third party and the
simultaneous or later addition of Eligible Real Estate as Collateral hereunder
shall not be deemed to be a substitution under this section..
ss.6. REPRESENTATIONS AND WARRANTIES.
Each of the Borrower and the Company represents and warrants to the
Agent and the Banks as follows:
ss.1. Corporate Authority, Etc.
(a) Incorporation; Good Standing. The Borrower is a
Delaware limited partnership duly organized pursuant to its Agreement of Limited
Partnership and its Certificate of Limited Partnership and amendments thereto
filed with the Secretary of State of Delaware. The Company is a Maryland
corporation duly organized pursuant to its Articles of Incorporation and
amendments thereto filed with the Secretary of the State of Maryland and is
validly existing and in good standing under the laws of Maryland. Each of the
Borrower and the Company (i) has all requisite power to own its respective
property and conduct its respective business as now conducted and as presently
contemplated, and (ii) is in good standing as a foreign entity and is duly
authorized to do business in the jurisdictions where the Mortgaged Property is
located and in each other jurisdiction where a failure to be so qualified in
such other jurisdiction could have a materially adverse effect on the business,
assets or financial condition of such person. The Company is a real estate
investment trust in full compliance with and entitled to the benefits of ss.856
of the Code. The Company is the sole general partner of the Borrower and its
percentage interest in the Borrower is not less than 51%.
(b) Subsidiaries. Each of the Subsidiaries of the Borrower
(i) is a corporation, limited partnership or trust duly organized under the laws
of its State of organization and is validly existing and in good standing under
the laws thereof, (ii) has all requisite power to own its property and conduct
its business as now conducted and as presently contemplated and (iii) is in good
standing and is duly authorized to do business in each jurisdiction where
Mortgaged Property held by it is located and in each other jurisdiction where a
failure to be so qualified could have a materially
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adverse effect on the business, assets or financial condition of the Borrower
or such Subsidiary.
(c)Authorization. The execution, delivery and performance
of this Agreement and the other Loan Documents to which the Borrower or the
Company is or is to become a party and the transactions contemplated hereby and
thereby (i) are within the authority of such Person, (ii) have been duly
authorized by all necessary proceedings on the part of such Person, (iii) do not
and will not conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which such Person is subject or
any judgment, order, writ, injunction, license or permit applicable to such
Person, (iv) do not and will not conflict with or constitute a default (whether
with the passage of time or the giving of notice, or both) under any provision
of the articles of incorporation, partnership agreement, declaration of trust or
other charter documents or bylaws of, or any agreement or other instrument
binding upon, such Person or any of its properties, and (v) do not and will not
result in or require the imposition of any lien or other encumbrance on any of
the properties, assets or rights of such Person.
(d) Enforceability. The execution and delivery of this
Agreement and the other Loan Documents to which the Borrower or the Company is
or is to become a party are valid and legally binding obligations of such Person
enforceable in accordance with the respective terms and provisions hereof and
thereof, except as enforceability is limited by bankruptcy, insolvency,
reorganization, moratorium or other laws relating to or affecting generally the
enforcement of creditors' rights and except to the extent that availability of
the remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may be brought.
ss.2. Governmental Approvals. The execution, delivery and performance
of this Agreement and the other Loan Documents to which the Borrower or the
Company is or is to become a party and the transactions contemplated hereby and
thereby do not require the approval or consent of, or filing with, any
governmental agency or authority other than those already obtained and the
filing of the Security Documents in the appropriate records office with respect
thereto.
ss.3. Title to Properties. The Borrower and its Subsidiaries own all
of the assets reflected in the consolidated balance sheet of the Company as at
the Balance Sheet Date or acquired since that date (except property and assets
sold or otherwise disposed of in the ordinary course of business since that
date), subject to no rights of others, including any mortgages, leases,
conditional sales agreements, title retention agreements, liens or other
encumbrances except Permitted Liens.
ss.4. Financial Statements. The Borrower has furnished to each of
the Banks: (a) the consolidated balance sheet of the Company and its
Subsidiaries as of the Balance Sheet Date, (b) an unaudited statement of
Operating Cash Flow for each of the Mortgaged Properties for the previous
three (3) fiscal years ended December 31, 1995, to the extent available,
satisfactory in form to the Agent and certified by the chief financial or
accounting officer of the Company as fairly presenting the operating income
for such parcels for such periods, provided that such certification need only
be made with respect to any Mortgaged Property for the period such Mortgaged
Property has been owned and operated by the Borrower, if such period is less
than three (3) fiscal years, and (c) certain other financial information
relating to the Company, the Borrower and the Real Estate. Such balance sheet
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and statements have been prepared in accordance with generally accepted
accounting principles and fairly present the financial condition of the Company
and its Subsidiaries as of such dates and the results of the operations of the
Company and the Mortgaged Properties for such periods. There are no liabilities,
contingent or otherwise, of the Company, the Borrower or any of its Subsidiaries
involving material amounts not disclosed in said financial statements and the
related notes thereto.
ss.5. No Material Changes. Since the Balance Sheet Date, there has
occurred no materially adverse change in the financial condition or business of
the Company, the Borrower and its Subsidiaries taken as a whole as shown on or
reflected in the consolidated balance sheet of the Company as of the Balance
Sheet Date, or its consolidated statement of income or cash flows for the fiscal
year then ended, other than changes in the ordinary course of business that have
not had any materially adverse effect either individually or in the aggregate on
the business or financial condition of such Person.
ss.6. Franchises, Patents, Copyrights, Etc. The Borrower and its
Subsidiaries possess all franchises, patents, copyrights, trademarks, trade
names, servicemarks, licenses and permits, and rights in respect of the
foregoing, adequate for the conduct of their business substantially as now
conducted without known conflict with any rights of others.
ss.7. Litigation. There are no actions, suits, proceedings or
investigations of any kind pending or to the knowledge of such person threatened
in writing against the Company, the Borrower or any of its Subsidiaries before
any court, tribunal or administrative agency or board that, if adversely
determined, might, either in any case or in the aggregate, materially adversely
affect the properties, assets, financial condition or business of such Person or
materially impair the right of such Person to carry on business substantially as
now conducted by it, or result in any liability not adequately covered by
insurance, or for which adequate reserves are not maintained on the balance
sheet of such Person, or which question the validity of this Agreement or any of
the other Loan Documents, any action taken or to be taken pursuant hereto or
thereto or any lien or security interest created or intended to be created
pursuant hereto or thereto, or which will adversely affect the ability of the
Borrower or the Company to pay and perform the Obligations in the manner
contemplated by this Agreement and the other Loan Documents.
ss.8. No Materially Adverse Contracts, Etc. None of the Company, the
Borrower nor any of its Subsidiaries is subject to any partnership charter,
corporate or other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a materially adverse
effect on the business, assets or financial condition of such Person. Neither
the Borrower nor any of its Subsidiaries is a party to any contract or agreement
that has or is expected, in the judgment of the partners or officers of such
Person, to have any materially adverse effect on the business of any of them.
ss.9. Compliance with Other Instruments, Laws, Etc. None of the
Company, the Borrower nor any of its Subsidiaries is in violation of any
provision of its charter or other organizational documents, bylaws, or any
agreement or instrument to which it may be subject or by which it or any of its
properties may be bound or any decree, order, judgment, statute, license, rule
or regulation, in any of the foregoing cases in a manner that could result in
the imposition of substantial penalties or materially and adversely affect the
financial condition, properties or business of such Person.
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ss.10. Tax Status. The Company, the Borrower and each of its
Subsidiaries (a) has made or filed all federal and state income and all other
tax returns, reports and declarations required by any jurisdiction to which it
is subject, (b) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports and declarations,
except those being contested in good faith and by appropriate proceedings and
(c) has set aside on its books provisions reasonably adequate for the payment of
all taxes for periods subsequent to the periods to which such returns, reports
or declarations apply. There are no unpaid taxes in any material amount claimed
to be due by the taxing authority of any jurisdiction, and the partners or
officers of such Person know of no basis for any such claim.
ss.11. No Event of Default. No Default or Event of Default has
occurred and is continuing.
ss.12. Holding Company and Investment Company Acts. None of the
Company, 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", as such terms are defined in the Public Utility Holding Company Act of
1935; nor is any of them an "investment company", or an "affiliated company" or
a "principal underwriter" of an "investment company", as such terms are defined
in the Investment Company Act of 1940.
ss.13. Absence of UCC Financing Statements, Etc. Except with respect
to Permitted Liens, there is no financing statement, security agreement, chattel
mortgage, real estate mortgage or other document filed or recorded with any
filing records, registry, or other public office, that purports to cover, affect
or give notice of any present or possible future lien on, or security interest
or security title in, any property of the Company, the Borrower or its
Subsidiaries or rights thereunder.
ss.14. Setoff, Etc. The Collateral and the rights of the Agent and
the Banks with respect to the Collateral are not subject to any setoff, claims,
withholdings or other defenses. The Borrower is the owner of the Collateral free
from any lien, security interest, encumbrance or other claim or demand, except
those encumbrances permitted in the Security Deeds.
ss.15. Certain Transactions. Except as set forth on Schedule 6.15,
none of the officers, trustees, directors, or employees of the Company, the
Borrower or any of its Subsidiaries is a party to any transaction with either or
both of the Company, the Borrower or any of its Subsidiaries (other than for
services as employees, officers and directors), including any contract,
agreement or other arrangement providing for the furnishing of services to or
by, providing for rental of real or personal property to or from, or otherwise
requiring payments to or from any officer, trustee, director or such employee
or, to the knowledge of the Borrower, any corporation, partnership, trust or
other entity in which any officer, trustee, director, or any such employee has a
substantial interest or is an officer, director, trustee or partner.
ss.16. Employee Benefit Plans. Neither the Borrower nor any ERISA
Affiliate maintains or contributes to any Employee Benefit Plan, Multiemployer
Plan or Guaranteed Pension Plan; provided, however, that nothing hereon shall
prohibit the Borrower or any of its Subsidiaries from maintaining or
contributing to an Employee Benefit Plan, Multiemployer Plan or Guaranteed
Pension Plan so long as the Borrower or its Subsidiary does so in compliance
with all applicable laws.
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ss.17. Regulations U and X. No portion of any Loan is to be used for
the purpose of purchasing or carrying any "margin security" or "margin stock" as
such terms are used in Regulations U and X of the Board of Governors of the
Federal Reserve System, 12 C.F.R. Parts 221 and 224.
ss.18. Environmental Compliance. The Borrower and/or the Company have
taken all commercially reasonable steps to investigate the past and present
conditions and usage of the Real Estate and the operations conducted thereon
and, based upon such investigation, makes the following representations and
warranties.
(a) With respect to the Mortgaged Properties, and to the
best of the Borrower's knowledge with respect to any other Real Estate, none of
the Company, the Borrower nor its Subsidiaries or any operator of the Real
Estate, or any operations thereon is in violation, or alleged violation, of any
judgment, decree, order, law, license, rule or regulation pertaining to
environmental matters, including without limitation, those arising under the
Resource Conservation and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended ("CERCLA"), the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), the Federal Clean
Water Act, the Federal Clean Air Act, the Toxic Substances Control Act, or any
state or local statute, regulation, ordinance, order or decree relating to the
environment (hereinafter "Environmental Laws"), which violation involves any of
the Mortgaged Properties or involves other Real Estate and would have a material
adverse effect on the environment or the business, assets or financial condition
of the Company, the Borrower or any of its Subsidiaries.
(b) None of the Company, the Borrower nor any of its
Subsidiaries has received notice from any third party including, without
limitation, any federal, state or local governmental authority, (i) that it has
been identified by the United States Environmental Protection Agency ("EPA") as
a potentially responsible party under CERCLA with respect to a site listed on
the National Priorities List, 40 C.F.R. Part 300 Appendix B (1986); (ii) that
any hazardous waste, as defined by 42 U.S.C. ss.9601(5), any hazardous
substances as defined by 42 U.S.C. ss.9601(14), any pollutant or contaminant as
defined by 42 U.S.C. ss.9601(33) or any toxic substances, oil or hazardous
materials or other chemicals or substances regulated by any Environmental Laws
("Hazardous Substances") which it has generated, transported or disposed of have
been found at any site at which a federal, state or local agency or other third
party has conducted or has ordered that any of the Company, the Borrower or any
of its Subsidiaries conduct a remedial investigation, removal or other response
action pursuant to any Environmental Law; or (iii) that it is or shall be a
named party to any claim, action, cause of action, complaint, or legal or
administrative proceeding (in each case, contingent or otherwise) arising out of
any third party's incurrence of costs, expenses, losses or damages of any kind
whatsoever in connection with the release of Hazardous Substances.
(c) With respect to the Mortgaged Properties, and to the
best of the Borrower's knowledge with respect to any other Real Estate, except
as specifically set forth in the written environmental site assessment reports
of EMG, Inc. provided to the Agent on or before the date hereof or, in the case
of Real Estate acquired after the date hereof, the environmental site assessment
reports with respect thereto referenced in the certificate to be provided to the
Agent under ss.7.4(h): (i) no portion of the Real Estate has been used for the
handling, processing, storage or disposal of Hazardous Substances except in
accordance with applicable Environmental Laws, and no
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underground tank or other underground storage receptacle for Hazardous
Substances is located on any portion of the Mortgaged Property; (ii) in the
course of any activities conducted by any of the Company, the Borrower, its
Subsidiaries or the operators of its properties, no Hazardous Substances have
been generated or are being used on the Real Estate except in the ordinary
course of business and in accordance with applicable Environmental Laws; (iii)
there has been no past or present releasing, spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, disposing or
dumping (a "Release") or threatened Release of Hazardous Substances on, upon,
into or from any of the Mortgaged Properties, or, to the best of the Borrower's
knowledge, on, upon, into or from the other properties of any of the Company,
the Borrower or its Subsidiaries, which Release would have a material adverse
effect on the value of any of the Real Estate or adjacent properties or the
environment; (iv) to the best of the Borrower's knowledge, there have been no
Releases on, upon, from or into any real property in the vicinity of any of the
Real Estate which, through soil or groundwater contamination, may have come to
be located on, and which would have a material adverse effect on the value of,
the Real Estate; and (v) any Hazardous Substances that have been generated on
any of the Real Estate have been transported off-site only by carriers having an
identification number issued by the EPA or approved by a state or local
environmental regulatory authority having jurisdiction regarding the
transportation of such substance and treated or disposed of only by treatment or
disposal facilities maintaining valid permits as required under all applicable
Environmental Laws, which transporters and facilities have been and are, to the
best of the Borrower's knowledge, operating in compliance with such permits and
applicable Environmental Laws.
(d)None of the Company, the Borrower, its Subsidiaries, the
Mortgaged Properties nor any other Real Estate is subject to any applicable
Environmental Law requiring the performance of Hazardous Substances site
assessments, or the removal or remediation of Hazardous Substances, or the
giving of notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or statement by virtue of
the transactions set forth herein and contemplated hereby, or as a condition to
the recording of the Security Deeds or to the effectiveness of any other
transactions contemplated hereby.
ss.19.Subsidiaries. Schedule 6.19 sets forth all of the Subsidiaries
of the Borrower and of the Company. The form and jurisdiction of organization
of each of the Subsidiaries, and the Borrower's or the Company's ownership
interest therein, is set forth in said Schedule 6.19.
ss.20.Leases. The Borrower has delivered to the Agent true copies of
the forms of the Leases used by the Borrower at the Mortgaged Properties as of
the date hereof.
ss.21. Loan Documents. All of the representations and warranties made
by or on behalf of the Company, the Borrower and its Subsidiaries in this
Agreement and the other Loan Documents or any document or instrument delivered
to the Agent or the Banks pursuant to or in connection with any of such Loan
Documents are true and correct in all material respects, and the Borrower and
the Company have not failed to disclose such information as is necessary to make
such representations and warranties not misleading.
ss.22.Mortgaged Property. Each of the Company and the Borrower makes
the following representations and warranties concerning each Mortgaged
Property:
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(a) Off-Site Utilities. All water, sewer, electric, gas,
telephone and other utilities necessary for the use and operation of the
Mortgaged Property are installed to the property lines of the Mortgaged Property
through dedicated public rights-of-way or through perpetual private easements
approved by the Agent with respect to which the applicable Security Deed creates
a valid and enforceable first lien and, except in the case of drainage
facilities, are connected to the Building located thereon with valid permits and
are adequate to service the Building in compliance with applicable law.
(b) Access, Etc. The streets abutting the Mortgaged
Property are dedicated and accepted public roads, to which the Mortgaged
Property has direct access by trucks and other motor vehicles and by foot, or
are perpetual private ways (with direct access by trucks and other motor
vehicles and by foot to public roads) to which the Mortgaged Property has direct
access approved by the Agent and with respect to which the applicable Security
Deed creates a valid and enforceable first lien. All private ways providing
access to the Mortgaged Property are zoned in a manner which will permit access
to the Building over such ways by trucks and other commercial and industrial
vehicles.
(c) Independent Building. The Building is fully independent
in all respects including, without limitation, in respect of structural
integrity, heating, ventilating and air conditioning, plumbing, mechanical and
other operating and mechanical systems, and electrical, sanitation and water
systems, all of which are connected directly to off-site utilities located in
public streets or ways or through insured perpetual private easements approved
by the Agent. The Building is located on a lot or lots which is or are
separately assessed for purposes of real estate tax assessment and payment. The
Building, all Building Service Equipment and all paved or landscaped areas
related to or used in connection with the Building are located wholly within the
perimeter lines of the lot or lots on which the Mortgaged Property is located,
except as may be specifically shown on the Survey for such Mortgaged Property.
(d) Condition of Building; No Asbestos. The Building is
structurally sound, in good repair and free of defects in materials and
workmanship. All major building systems located within the Building, including
without limitation heating, ventilating and air conditioning, electrical,
sprinkler, plumbing or other mechanical systems, are in good working order and
condition. No asbestos is located in or on the Building, except for nonfriable
asbestos or contained friable asbestos which is being monitored and/or
remediated in accordance with the recommendations of an Environmental Engineer.
(e) Building Compliance with Law. The Building as presently
constructed, used, occupied and operated does not violate any applicable federal
or state law or governmental regulation, or any local ordinance, order or
regulation, including but not limited to laws, regulations, or ordinances
relating to zoning, building use and occupancy, subdivision control, fire
protection, health, sanitation, safety, handicapped access, historic
preservation and protection, tidelands, wetlands, flood control and
Environmental Laws. The Building complies with applicable zoning laws and
regulations and is not a so-called non-conforming use. The zoning laws permit
use of the Building for its current use. There is such number of parking spaces
on the lot or lots on which the Mortgaged Property is located as is adequate
under the zoning laws and regulations to permit use of the Building for its
current use. Each Mortgaged Property constitutes a separate parcel
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which has been properly subdivided in accordance with all applicable state and
local laws, regulations and ordinances to the extent required thereby, and
neither the execution and delivery of the Security Deeds nor the exercise of any
remedies thereunder by Agent shall violate any such law or regulation relating
to the subdivision of real property.
(f) No Required Mortgaged Property Consents, Permits, Etc.
The Borrower has not received any notice of, and has no knowledge of, any
approvals, consents, licenses, permits, utility installations and connections
(including, without limitation, drainage facilities), curb cuts and street
openings, required by applicable laws, rules, ordinances or regulations or any
agreement affecting the Mortgaged Property for the maintenance, operation,
servicing and use of the Mortgaged Property or the Building for its current use
which have not been granted, effected, or performed and completed (as the case
may be), or any fees or charges therefor which have not been fully paid, or
which are no longer in full force and effect. No such approvals, consents,
permits or licenses (including, without limitation, any railway siding
agreements) will terminate, or become void or voidable or terminable on any
foreclosure sale of the Mortgaged Property pursuant to the Security Deed. To the
best knowledge of the Borrower, there are no outstanding notices, suits, orders,
decrees or judgments relating to zoning, building use and occupancy, fire,
health, sanitation or other violations affecting, against, or with respect to,
the Mortgaged Property or any part thereof.
(g) Insurance. Neither the Company nor the Borrower has
received any notice from any insurer or its agent requiring performance of any
work with respect to the Mortgaged Property or canceling or threatening to
cancel any policy of insurance, and the Mortgaged Property complies with the
requirements of all of the Borrower's insurance carriers.
(h)Real Property Taxes; Special Assessments. There are no
unpaid or outstanding real estate or other taxes or assessments on or against
the Mortgaged Property or any part thereof which are payable by the Borrower
(except only real estate or other taxes or assessments, that are not yet due and
payable). The Borrower has delivered to the Agent true and correct copies of
real estate tax bills for the Mortgaged Property for the past one fiscal tax
year and, if available, for the past three fiscal years. No abatement
proceedings are pending with reference to any real estate taxes assessed against
the Mortgaged Property, other than with respect to taxes which have been paid
under protest and which are being contested in good faith. There are no
betterment assessments or other special assessments presently pending with
respect to any portion of the Mortgaged Property, and neither the Company nor
the Borrower has received any notice of any such special assessment being
contemplated.
(i) Historic Status. The Building is not a historic
structure or landmark and neither the Building nor the Mortgaged Property is
located within any historic district pursuant to any federal, state or local law
or governmental regulation.
(j)Eminent Domain; Casualty. There are no pending eminent
domain proceedings against the Mortgaged Property or any part thereof, and, to
the knowledge of the Borrower, no such proceedings are presently threatened or
contemplated by any taking authority. Neither the Mortgaged Property, the
Building nor any part thereof is now damaged or injured as a result of any fire,
explosion, accident, flood or other casualty.
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(k)Leases. An accurate and complete Rent Roll and summary
thereof in a form reasonably satisfactory to the Agent as of the date of
inclusion of the Mortgaged Property in the Collateral (or such other recent date
as may be acceptable to the Agent) with respect to all Leases of any portion of
the Mortgaged Property has been provided to the Agent. The Leases reflected on
such Rent Roll constitute as of the date thereof the sole agreements and
understandings relating to leasing or licensing of space at the Mortgaged
Property and in the Building relating thereto. Each of the Leases was entered
into as the result of arms-length negotiation and has not been modified,
changed, altered, assigned, supplemented or amended in any respect, except as
reflected on the Rent Roll, and no tenant is entitled to any free rent, partial
rent, rebate of rent payments, credit, offset or deduction in rent, including,
without limitation, lease support payments or lease buy-outs, except as
reflected in the Rent Roll. There are no occupancies, rights, privileges or
licenses in or to the Mortgaged Property or portion thereof other than pursuant
to the Leases reflected in Rent Rolls previously furnished to the Agent for the
Mortgaged Property. Except as set forth in each Rent Roll, the Leases reflected
therein are in full force and effect in accordance with their respective terms,
without any payment default or any other material default thereunder, nor are
there any defenses, counterclaims, offsets, concessions or rebates available to
any tenant thereunder, and neither the Company nor the Borrower has given or
made, any notice of any payment or other material default, or any claim, which
remains uncured or unsatisfied, with respect to any of the Leases. The Rent
Rolls furnished to the Banks accurately and completely set forth all rents
payable by and security, if any, deposited by tenants, no tenant having paid
more than one month's rent in advance. All tenant improvements or work to be
done for tenants on the Rent Roll, furnished or paid for by the landlord under
the applicable Lease, or credited or allowed to a tenant, for, or in connection
with, the Building pursuant to any Lease has been completed and paid for or
provided for in a manner satisfactory to the Agent. No material leasing,
brokerage or like commissions, fees or payments are due from the Borrower or the
Company in respect of the Leases.
(1) Service Agreements; Management Agreements. Except as
listed on Schedule 6.22, there are no material Service Agreements relating to
the operation and maintenance of the Building, the Mortgaged Property, or any
portion thereof that are not cancellable at any time. Neither the Company nor
the Borrower has any Management Agreements for the Mortgaged Properties. To the
best knowledge of the Borrower, there are no material claims or any bases for
material claims in respect of the Mortgaged Property or its operation by any
party to any Service Agreement or Management Agreement.
(m) Other Material Real Property Agreements; No Options.
There are no material agreements pertaining to the Mortgaged Property, any
Building thereon or the operation or maintenance of either thereof other than as
described in this Agreement (including the Schedules hereto) or otherwise
disclosed in writing to the Agent and the Banks by the Borrower; and no person
or entity has any right or option to acquire the Mortgaged Property on any
Building thereon or any portion thereof or interest therein.
ss.23. Brokers. None of the Company, the Borrower nor any of its
Subsidiaries has engaged or otherwise dealt with any broker, finder or similar
entity in connection with this Agreement or the Loans contemplated hereunder.
ss.24. Other Debt. None of the Company, the Borrower nor any of its
Subsidiaries is in default of the payment of any Indebtedness or any other
agreement, mortgage, deed of trust, security agreement, financing agreement,
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indenture or lease to which any of them is a party. Neither the Company nor the
Borrower is a party to or bound by any agreement, instrument or indenture that
may require the subordination in right or time or payment of any of the
Obligations to any other indebtedness or obligation of the Company or the
Borrower. The Borrower has provided to the Agent a schedule, and upon the
request of the Agent will provide copies, of all agreements, mortgages, deeds of
trust, financing agreements or other material agreements binding upon the
Company or the Borrower or its properties and entered into by the Company or the
Borrower as of the date of this Agreement with respect to any Indebtedness of
the Company or the Borrower.
ss.25. Solvency. As of the Closing Date and after giving effect to
the transactions contemplated by this Agreement and the other Loan Documents,
including all Loans made or to be made hereunder, neither the Company nor the
Borrower is insolvent on a balance sheet basis such that the sum of the
Borrower's assets exceeds the sum of the Borrower's liabilities, the sum of the
Company's assets exceeds the sum of the Company's liabilities and each of the
Company and the Borrower is able to pay its debts as they become due, and each
of the Company and the Borrower has sufficient capital to carry on its business.
ss.7. AFFIRMATIVE COVENANTS OF THE BORROWER.
Each of the Borrower and the Company covenants and agrees that, so
long as any Loan or Note is outstanding or any Bank has any obligation to make
any Loans:
ss.1. Punctual Payment. The Borrower will duly and punctually pay or
cause to be paid the principal and interest on their respective Loans and all
interest and fees provided for in this Agreement, all in accordance with the
terms of this Agreement and the Notes as well as all other sums owing pursuant
to the Loan Documents.
ss.2. Maintenance of Office. The Borrower will maintain its chief
executive office at 2311 West 22nd Street, Suite 109, Oak Brook, Illinois 60521,
or at such other place in the United States of America as the Borrower shall
designate upon prior written notice to the Agent and the Banks, where notices,
presentations and demands to or upon the Borrower in respect of the
Loan Documents may be given or made.
ss.3. Records and Accounts. The Borrower will (a) keep, and cause
each of its Subsidiaries to keep, true and accurate records and books of account
in which full, true and correct entries will be made in accordance with
generally accepted accounting principles and (b) maintain adequate accounts and
reserves for all taxes (including income taxes), depreciation and amortization
of its properties and the properties of its Subsidiaries, contingencies and
other reserves. The Borrower's fiscal year shall be the same as the fiscal year
of the Company.
ss.4. Financial Statements, Certificates and Information. The
Borrower will deliver or cause to be delivered to each of the Banks:
(a)as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of the Borrower, the audited
consolidated balance sheet of the Borrower and its Subsidiaries at the end of
such year and the audited consolidated balance sheet of the Company and its
Subsidiaries at the end of such year, and the related audited consolidated
statements of income, changes in shareholder's equity and cash flows for such
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year, each setting forth in comparative form the figures for the previous fiscal
year and all such statements to be in reasonable detail, prepared in accordance
with generally accepted accounting principles, and accompanied by an auditor's
report prepared without qualification by Ernst & Young or by another "Big Six"
accounting firm, the Company's Form 10-K filed with the SEC (unless the SEC has
approved an extension, in which event the Borrower will deliver to the Agent and
each of the Banks a copy of the Form 10-K simultaneously with delivery to the
SEC), and any other information the Banks may need to complete a financial
analysis of the Company, the Borrower and its Subsidiaries;
(b)as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
the Borrower, copies of the unaudited consolidated balance sheet of the Borrower
and its Subsidiaries as at the end of such quarter and the unaudited
consolidated balance sheet of the Company and its Subsidiaries, and the related
unaudited consolidated statements of income, changes in partner's or
shareholder's equity and cash flows for the portion of the Borrower's fiscal
year then elapsed, and a statement showing the aging of the receivables and
payables for the Mortgaged Properties, all in reasonable detail and prepared in
accordance with generally accepted accounting principles (which may be provided
by inclusion in the Form 10-Q of the Company for such period provided pursuant
to subsection (c) below), together with a certification by the principal
financial or accounting officer of the Company that the information contained in
such financial statements fairly presents the financial position of the Company
and of the Borrower and its Subsidiaries on the date thereof (subject to
year-end adjustments);
(c)as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of the first three fiscal quarters of
the Borrower in each year, copies of Form 10-Q of the Company filed with the SEC
(unless the SEC has approved an extension in which event the Borrower will
deliver such copies of the Form 10-Q to the Agent and each of the Banks
simultaneously with delivery to the SEC), if required;
(d)as soon as practicable, but in any event not later than
forty-five (45) days after the end of each fiscal quarter of the Borrower
(including the fourth fiscal quarter in each year), copies of a consolidated
statement of Operating Cash Flow for such fiscal quarter for the Borrower and
its Subsidiaries and a statement of Operating Cash Flow for such fiscal quarter
for the Borrower and each of the Mortgaged Properties, prepared on a basis
consistent with the statement furnished pursuant to ss.6.4(b) together with a
certification by the chief financial or chief accounting officer of the Company,
that the information contained in such statement fairly presents the Operating
Cash Flow of the Borrower and its Subsidiaries and the Mortgaged Properties for
such period;
(e) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a statement (a
"Compliance Certificate") certified by the principal financial or accounting
officer of the Company in the form of Exhibit C hereto (or in such other form as
the Agent may approve from time to time) setting forth in reasonable detail
computations evidencing compliance with the covenants contained in ss.9 and the
other covenants described therein, and (if applicable) reconciliations to
reflect changes in generally accepted accounting principles since the Balance
Sheet Date;
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(f) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the SEC or sent to the
stockholders of the Company;
(g) as soon as practicable but in any event not later than
thirty (30) days after the end of each fiscal quarter of the Borrower (including
the fourth fiscal quarter in each year), updated Rent Rolls with respect to the
Mortgaged Properties and a summary of each Rent Roll in form reasonably
satisfactory to the Agent;
(h) not later than thirty (30) days following each
acquisition of an interest in Real Estate by the Borrower or any of its
Subsidiaries (which for the purposes of this ss.7.4(h) shall include the
Investments described in ss.8.3(i)), each of the following (provided that with
respect to the Investments described in ss.8.3(i), the following items shall be
provided to the extent reasonably available to the Borrower or its
Subsidiaries): (i) the closing statement relating to such acquisition, (ii) a
description of the property acquired, (iii) a certificate from the chief
financial or accounting officer of the Company stating that (A) an environmental
site assessment has been prepared by an Environmental Engineer and such
assessment contains no material qualifications with respect to such Real Estate
and (B) a statement of condition of such Real Estate has been prepared by a
construction engineer and such statement contains no material qualifications,
(iv) an historical operating statement of such Real Estate for such period as
may be available to the Borrower and a current rent roll for such Real Estate,
and (v) a Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Banks under
ss.6.4 or this ss.7.4 adjusted in the best good-faith estimate of the Borrower
to give effect to such acquisition and demonstrating that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such acquisition;
(i)promptly after they are filed with the Internal Revenue
Service, copies of all annual federal income tax returns and amendments
thereto of the Company and of the Borrower;
(j)promptly upon completion, copies of such market studies
relating to the Mortgaged Property and the other Eligible Real Estate as are
from time to time prepared by or on behalf of the Borrower or its Subsidiaries;
(k) not later than thirty (30) days following each
acquisition of an interest in a Subsidiary, each of the following: (i) the
name and structure of the Subsidiary, (ii) a description of the property owned
by such Subsidiary, and (iii) such other information as the Agent may
reasonably request;
(1)simultaneously within the delivery of the financial
statement referred to in subsection (a) above, a statement (i) listing the Real
Estate owned by the Borrower and its Subsidiaries (or in which the Borrower or
its Subsidiaries owns an interest) and stating the location thereof, the date
acquired and the acquisition cost, (ii) listing the Indebtedness of the Company,
the Borrower and its Subsidiaries (excluding Indebtedness of the type described
in ss.8.l(b)-(e)), which statement shall include, without limitation, a
statement of the original principal amount of such Indebtedness and the current
amount outstanding, the holder thereof, the maturity date and any extension
options, the interest rate, the collateral provided for such Indebtedness and
whether such Indebtedness is recourse or
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non-recourse, and (iii) listing the properties of the Borrower and its
Subsidiaries which are under "development" (as used in ss.8.9) and providing a
brief summary of the status of such development;
(m)not later than sixty (60) days prior to the end of each
fiscal year of the Borrower a budget and business plan for the next fiscal
year; and
(n) from time to time such other financial data and
information in the possession of the Company, the Borrower or its Subsidiaries
(including without limitation auditors' management letters, property inspection
and environmental reports and information as to zoning and other legal and
regulatory changes affecting the Company or the Borrower) as the Agent may
reasonably request.
ss.5. Notices.
(a) Defaults. The Borrower will promptly notify the Agent
in writing of the occurrence of any Default or Event of Default. If any Person
shall give any notice or take any other action in respect of a claimed default
(whether or not constituting an Event of Default) under this Agreement or under
any note, evidence of indebtedness, indenture or other obligation to which or
with respect to which the Company, the Borrower or any of its Subsidiaries is a
party or obligor, whether as principal or surety, and such default would permit
the holder of such note or obligation or other evidence of indebtedness to
accelerate the maturity thereof, which acceleration would have a material
adverse effect on the Borrower, the Borrower shall forthwith give written notice
thereof to the Agent and each of the Banks, describing the notice or action and
the nature of the claimed default.
(b) Environmental Events. The Borrower will promptly give
notice to the Agent (i) upon the Borrower obtaining knowledge of any potential
or known Release, of any Hazardous Substances at or from the Mortgaged Property;
(ii) of any violation of any Environmental Law that the Company, the Borrower or
any of its Subsidiaries reports in writing or is reportable by such Person in
writing (or for which any written report supplemental to any oral report is
made) to any federal, state or local environmental agency and (iii) upon
becoming aware thereof, of any inquiry, proceeding, investigation, or other
action, including a notice from any agency of potential environmental liability,
of any federal, state or local environmental agency or board, that in either
case involves the Mortgaged Property or has the potential to materially affect
the assets, liabilities, financial conditions or operations of the Borrower or
any Subsidiary or the Agent's liens on the Collateral pursuant to the Security
Documents.
(c)Notification of Claims Against Collateral. The Borrower
will, immediately upon becoming aware thereof, notify the Agent in writing of
any setoff, claims (including, with respect to any Mortgaged Property,
environmental claims), withholdings or other defenses to which any of the
Collateral, or the rights of the Agent or the Banks with respect to the
Collateral, are subject.
(d) Notice of Litigation and Judgments. The Borrower will
give notice to the Agent in writing within 15 days of becoming aware of any
litigation or proceedings threatened in writing or any pending litigation and
proceedings affecting the Company, the Borrower or any of its Subsidiaries or to
which the Company, the Borrower or any of its Subsidiaries is or is to become a
party involving an uninsured claim against the Company, the Borrower
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or any of its Subsidiaries that could reasonably be expected to have a
materially adverse effect on the Borrower or the Company and stating the nature
and status of such litigation or proceedings. The Borrower will give notice to
the Agent, in writing, in form and detail satisfactory to the Agent and each of
the Banks, within ten days of any judgment not covered by insurance, whether
final or otherwise, against the Company, the Borrower or any of its Subsidiaries
in an amount in excess of $100,000.
(e) Notice of Proposed Sales, Encumbrances, Refinance or
Transfer of Non-Mortgaged Property. The Borrower will give notice to the Agent
of any proposed or completed sale, encumbrance, refinance or transfer of any
Real Estate other than Mortgaged Property or other Investment described in
ss.8.3(i) of the Borrower or its Subsidiaries within any fiscal quarter of the
Borrower, such notice to be submitted together with the Compliance Certificate
provided or required to be provided to the Banks under ss.7.4 with respect to
such fiscal quarter. The Compliance Certificate shall with respect to any
proposed or completed sale, encumbrance, refinance or transfer be adjusted in
the best good-faith estimate of the Borrower to give effect to such sale,
encumbrance, refinance or transfer and demonstrate that no Default or Event of
Default with respect to the covenants referred to therein shall exist after
giving effect to such sale, encumbrance, refinance or transfer. Notwithstanding
the foregoing, in the event of any sale, encumbrance, refinance or transfer of
any Real Estate other than the Mortgaged Property or other Investment described
in ss.8.3(i) of the Borrower or its Subsidiaries, the Borrower shall promptly
give notice to the Agent of such transaction, which notice shall be accompanied
by a Compliance Certificate prepared using the financial statements of the
Borrower most recently provided or required to be provided to the Banks under
ss.6.4 or ss.7.4 adjusted as provided in the preceding sentence.
(f) Notice of Proposed Renovations. The Borrower will
promptly give notice to the Agent of any proposed renovations (not including any
tenant improvements) to any Real Estate the projected cost of which will exceed
$250,000.00.
(g) Debt and Equity Offerings. The Borrower shall provide
the Agent with five (5) Business Days' prior written notice of any Debt Offering
or Equity Offering.
(h) Notification of Banks. Promptly after receiving any
notice under this ss.7.5, the Agent will forward a copy thereof to each of the
Banks, together with copies of any certificates or other written information
that accompanied such notice.
ss.6. Existence; Maintenance of Properties.
(a) The Borrower will do or cause to be done all things
necessary to preserve and keep in full force and effect its existence as a
Delaware limited partnership and the Company will do or cause to be done all
things necessary to preserve and keep in full force and effect its existence as
a Maryland corporation. The Borrower will cause each of its Subsidiaries to do
or cause to be done all things necessary to preserve and keep in full force and
effect its legal existence. The Borrower will do or cause to be done all things
necessary to preserve and keep in full force all of its rights and franchises
and those of its Subsidiaries. The Borrower will, and will cause each of its
Subsidiaries to, continue to engage primarily in the businesses now conducted by
it and in related businesses.
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(b) The Borrower (i) will cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its business or the
business of its Subsidiaries to be maintained and kept in good condition, repair
and working order (ordinary wear and tear excepted) and supplied with all
necessary equipment, and (ii) will cause to be made all necessary repairs,
renewals, replacements, betterments and improvements thereof in all cases in
which the failure so to do would have a material adverse effect on the condition
of the applicable Mortgaged Property or on the financial condition, assets or
operations of the Borrower and its Subsidiaries.
ss.7. Insurance. (a) The Borrower will, at its expense, procure and
maintain for the benefit of the Borrower and the Agent, insurance policies
issued by such insurance companies, in such amounts, in such form and substance,
and with such coverages, endorsements, deductibles and expiration dates as are
acceptable to the Agent, providing the following types of insurance covering the
Mortgaged Property:
(i) "Named Peril" property insurance (including
comprehensive boiler and machinery coverages) on each Building and
the contents therein of the Borrower and its Subsidiaries in an
amount not less than one hundred percent (100%) of the full
replacement cost of each Building and the contents therein of the
Borrower and its Subsidiaries or such other limit as the Agent may
approve, with deductibles not to exceed $10,000 for any one
occurrence, with a replacement cost coverage endorsement, and, if
requested by the Agent, a contingent liability from operation of
building laws endorsement in such amounts as the Agent may require.
Full replacement cost as used herein means the cost of replacing the
Building (exclusive of the cost of excavations, foundations and
footings below the lowest basement floor) and the contents therein of
the Borrower and its Subsidiaries without deduction for physical
depreciation thereof;
(ii) During the course of construction or repair of any
Building, the insurance required by clause (i) above shall be written
on riders to the Borrower's existing policies or on a builders risk,
completed value, non-reporting form, meeting all of the terms
required by clause (i) above, covering the total value of work
performed, materials, equipment, machinery and supplies furnished,
existing structures, and temporary structures being erected on or
near the Real Estate, including coverage against collapse and damage
during transit or while being stored off-site, and containing a soft
costs (including loss of rents) coverage endorsement and a permission
to occupy endorsement;
(iii) Flood insurance if at any time any Building is
located in any federally designated "special hazard area" (including
any area having special flood, mudslide and/or flood-related erosion
hazards, and shown on a Flood Hazard Boundary Map or a Flood
Insurance Rate Map published by the Federal Emergency Management
Agency as Zone A, AO, Al-30, AK, A99, AH, VO, V1-30, VE, V, M or E)
and the broad form flood coverage required by clause (i) above is not
available, in an amount equal to the full replacement cost or the
maximum amount then available under the National Flood Insurance
Program;
(iv) Rent loss insurance in an amount sufficient to
recover at least the total estimated gross receipts from all sources
of income, including without limitation, rental income, for the Real
Estate for a twelve month period;
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(v) Commercial general liability insurance against claims
for personal injury (to include, without limitation, bodily injury
and personal and advertising injury) and property damage liability,
all on an occurrence basis, if commercially available, with such
coverages as the Agent may reasonably request (including, without
limitation, contractual liability coverage, completed operations
coverage for a period of two years following completion of
construction of any improvements on the Real Estate, and coverages
equivalent to an ISO broad form endorsement), with a general
aggregate limit of not less than $1,000,000, a completed operations
aggregate limit of not less than $1,000,000, and a combined single
"per occurrence" limit of not less than $1,000,000 for bodily injury,
property damage and medical payments;
(vi) During the course of construction or repair of any
improvements on the Real Estate, owner's contingent or protective
liability insurance covering claims not covered by or under the terms
or provisions of the insurance required by clause (v) above;
(vii) Employers liability insurance with respect to the
Borrower's and the Company's employees;
(viii) Umbrella liability insurance with limits of not
less than $10,000,000 to be in excess of the limits of the insurance
required by clauses (v), (vi) and (vii) above, with coverage at least
as broad as the primary coverages of the insurance required by
clauses (v), (vi) and (vii) above, with any excess liability
insurance to be at least as broad as the coverages of the lead
umbrella policy. All such policies shall be endorsed to provide
defense coverage obligations;
(ix) Workers' compensation insurance for all employees of the
Company, the Borrower or its Subsidiaries engaged on or with respect
to the Real Estate; and
(x) Such other insurance in such form and in such amounts
as may from time to time be reasonably required by the Agent against
other insurable hazards and casualties which at the time are commonly
insured against in the case of properties of similar character and
location to the Real Estate
The Borrower shall pay all premiums on insurance policies. The
insurance policies with respect to all Mortgaged Property provided for in
clauses (v), (vi) and (viii) above shall name the Agent and each Bank as an
additional insured and shall contain a cross liability/severability endorsement.
The insurance policies provided for in clauses (i), (ii), (iii) and (iv) above
shall name the Agent as mortgagee and loss payee, shall be first payable in case
of loss to the Agent, and shall contain mortgage clauses and lender's loss
payable endorsements in form and substance acceptable to the Agent. The Borrower
shall deliver duplicate originals or certified copies of all such policies to
the Agent, and the Borrower shall promptly furnish to the Agent all renewal
notices and evidence that all premiums or portions thereof then due and payable
have been paid. At least 30 days prior to the expiration date of the policies,
the Borrower shall deliver to the Agent evidence of continued coverage,
including a certificate of insurance, as may be satisfactory to the Agent.
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(b) All policies of insurance required by this Agreement
shall contain clauses or endorsements to the effect that (i) no act or omission
of the Company, the Borrower or any Subsidiary or anyone acting for the Company,
the Borrower or any Subsidiary (including, without limitation, any
representations made in the procurement of such insurance), which might
otherwise result in a forfeiture of such insurance or any part thereof, no
occupancy or use of the Real Estate for purposes more hazardous then permitted
by the terms of the policy, and no foreclosure or any other change in title to
the Real Estate or any part thereof, shall affect the validity or enforceability
of such insurance insofar as the Agent is concerned, (ii) the insurer waives any
right of setoff, counterclaim, subrogation, or any deduction in respect of any
liability of the Company, the Borrower or any Subsidiary and the Agent, (iii)
such insurance is primary and without right of contribution from any other
insurance which may be available, (iv) such policies shall not be modified,
canceled or terminated prior to the scheduled expiration date thereof without
the insurer thereunder giving at least 30 days prior written notice to the Agent
by certified or registered mail, and (v) that the Agent or the Banks shall not
be liable for any premiums thereon or subject to any assessments thereunder, and
shall in all events be in amounts sufficient to avoid any coinsurance liability.
(c) The insurance required by this Agreement may be effected
through a blanket policy or policies covering additional locations and property
of the Borrower and other Persons not included in the Mortgaged Property,
provided that such blanket policy or policies comply with all of the terms and
provisions of this ss.7.7 and contain endorsements or clauses assuring that any
claim recovery will not be less than that which a separate policy would provide,
including, without limitation, a priority claim provision with respect to
property insurance and an aggregate limits of insurance endorsement in the case
of liability insurance.
(d) All policies of insurance required by this Agreement
shall be issued by companies licensed to do business in the State where the
policy is issued and also in the states where the Real Estate is located and
having a rating in Best's Key Rating Guide of at least "A" and a financial size
category of at least "VIII".
(e) None of the Company, the Borrower nor any Subsidiary
shall carry separate insurance, concurrent in kind or form or contributing in
the event of loss, with any insurance required under this Agreement unless such
insurance complies with the terms and provisions of this ss.7.7.
(f) In the event of any Loss or damage to the Mortgaged
Property in excess of $10,000, the Borrower shall give immediate written notice
to the insurance carrier and the Agent, and the Agent shall furnish a copy of
such notice promptly to each of the Banks. The Borrower may make proof of loss
and adjust and compromise any claim under insurance policies which is of an
amount not more than $250,000.00 so long as no Event of Default has occurred and
is continuing and so long as the Borrower shall in good faith diligently pursue
such claim. The Borrower hereby irrevocably authorizes and empowers the Agent,
at the Agent's option in the Agent's sole discretion or at the request of the
Requisite Banks in their sole discretion, as attorney in fact for the Borrower,
to make proof of any loss except as provided in the preceding sentence, to
adjust and compromise any claim under insurance policies, to appear in and
prosecute any action arising from such insurance policies, to collect and
receive insurance proceeds, and to deduct therefrom the Agent's expenses
incurred in the collection of such proceeds. If the Mortgaged Property is
acquired by the Agent or any nominee through
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foreclosure, deed in lieu of foreclosure or otherwise is acquired from the
Borrower, all right, title and interest of the Borrower in and to any insurance
policies and unearned premiums thereon and in and to the proceeds thereof
resulting from loss or damage to the Mortgaged Property prior to such sale or
acquisition shall pass to the Agent or any other successor in interest to the
Borrower or purchaser or grantee of the Mortgaged Property.
(g) Subject to the terms of the following sentence, the
Borrower authorizes the Agent, at the Agent's option or at the request of the
Requisite Bank's in their sole discretion, to (i) apply the balance of such
proceeds to the payment of the Obligations of the Borrower whether or not then
due, or (ii) if the Agent or the Requisite Bank shall require the reconstruction
or repair of the Mortgaged Property, to hold the balance of such proceeds to be
used to pay all taxes, charges, sewer use fees, water rates and assessments
which may be imposed upon the Mortgaged Property and the Obligations of the
Borrower as they become due during the course of reconstruction or repair of the
Mortgaged Property and to reimburse the Borrower, in accordance with such terms
and conditions as Agent may prescribe, for the cost of such reconstruction or
repair of the Mortgaged Property, and on completion of such reconstruction or
repair to apply any of the excess to the payment of the Obligations of the
Borrower. Notwithstanding the foregoing, the Agent shall make such net proceeds
available to the Borrower to reconstruct and repair the Mortgaged Property, in
accordance with such terms and conditions as the Agent may prescribe for the
disbursement of such proceeds to assure completion of such reconstruction or
repair provided that (x) no Default or Event of Default shall have occurred and
be continuing, (y) the Borrower shall have provided to Agent additional cash
security in an amount equal to the amount reasonably estimated by the Agent to
be the amount in excess of such proceeds which will be required to complete such
repair or restoration, and (z) the Agent shall determine that such repair or
reconstruction can be completed prior to the Maturity Date.
(h) The Borrower will, at its expense, procure and maintain
insurance covering the Company, the Borrower and the Real Estate other than the
Mortgaged Property in such amounts and against such risks and casualties as are
customary for properties of similar character and location, due regard being
given to the type of improvements thereon, their construction, location, use and
occupancy.
(i) The Borrower shall provide to the Agent for the benefit
of the Banks Title Policies for all of the Mortgaged Properties of the Borrower
which shall at all times be in an aggregate amount of not less than the total
Commitments for the Borrower at the time in effect. Each Title Policy shall also
contain, to the extent available, a tie-in endorsement aggregating the insurance
coverage provided under all of the policies relating to the Borrower with tie-in
endorsements.
ss.8. Taxes. The Company, the Borrower and each of its Subsidiary
will duly pay and discharge, or cause to be paid and discharged, before the same
shall become overdue, all taxes, assessments and other governmental charges
imposed upon it and upon the Mortgaged Property and the other Real Estate, sales
and activities, or any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if unpaid might by law
become a lien or charge upon any of its property; provided that any such tax,
assessment, charge, levy or claim need not be paid if the validity or amount
thereof shall currently be contested in good faith by appropriate proceedings
and if the Company, the Borrower or such Subsidiary shall have set aside on its
books adequate reserves with respect thereto; and
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provided, further, that forthwith upon the commencement of proceedings to
foreclose any lien that may have attached as security therefor, the Company, the
Borrower and each Subsidiary of the Borrower either (i) will provide a bond
issued by a surety reasonably acceptable to the Agent and sufficient to stay all
such proceedings or (ii) if no such bond is provided, will pay each such tax,
assessment, charge, levy or claim.
ss.9. Inspection of Properties and Books. The Company and the
Borrower shall permit the Banks, through the Agent or any representative
designated by the Agent, at the Borrower's expense to visit and inspect any of
the properties of the Borrower or any of its Subsidiaries, to examine the books
of account of the Company, the Borrower and its Subsidiaries (and to make copies
thereof and extracts therefrom) and to discuss the affairs, finances and
accounts of the Company, the Borrower and its Subsidiaries with, and to be
advised as to the same by, its officers, all at such reasonable times and
intervals as the Agent or any Bank may reasonably request. The Banks shall use
good faith efforts to coordinate such visits and inspections so as to minimize
the interference with and disruption to the Borrower's normal business
operations.
ss.10. Compliance with Laws, Contracts, Licenses, and Permits. Each
of the Company and the Borrower will comply with, and will cause each of its
Subsidiaries to comply in all respects with (i) all material provisions of all
applicable laws and regulations now or hereafter in effect wherever its business
is conducted, including all Environmental Laws, (ii) the provisions of its
corporate charter, partnership agreement or declaration of trust, as the case
may be, and other charter documents and bylaws, (iii) all material agreements
and instruments to which it is a party or by which it or any of its properties
may be bound, (iv) all applicable decrees, orders, and judgments, and (v) all
licenses and permits required by applicable laws and regulations for the conduct
of its business or the ownership, use or operation of its properties. If at any
time while any Loan or Note is outstanding or the Banks have any obligation to
make Loans hereunder, any authorization, consent, approval, permit or license
from any officer, agency or instrumentality of any government shall become
necessary or required in order that the Borrower may fulfill any of its
obligations hereunder, the Borrower will immediately take or cause to be taken
all steps necessary to obtain such authorization, consent, approval, permit or
license and furnish the Agent and the Banks with evidence thereof.
ss.11. Use of Proceeds. The Borrower will use the proceeds of the
Loans to the Borrower solely to provide short-term financing (a) for the
acquisition of fee interests by the Borrower in Real Estate which is utilized
principally for office, office/service or light industry, (b) for Capital
Improvement Projects, (c) for working capital purposes, and (d) for such other
purposes as the Requisite Banks in their discretion from time to time may agree
to in writing.
ss.12. Further Assurances. Each of the Company and the Borrower will
cooperate with, and will cause each of its Subsidiaries to cooperate with the
Agent and the Banks and execute such further instruments and documents as the
Banks or the Agent shall reasonably request to carry out to their satisfaction
the transactions contemplated by this Agreement and the other Loan Documents.
ss.13. Compliance. The Borrower shall operate its business in
compliance with the terms and conditions of this Agreement and the other Loan
Documents. The Company shall at all times comply with all requirements of
applicable laws necessary to maintain REIT Status. After a Successful Initial
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Public Offering, the Company shall at all times remain a publicly traded
company. The Borrower shall operate its business in compliance with the terms
and conditions of this Agreement and the other Loan Documents.
ss.14. Interest Rate Contracts. If at the end of any fiscal quarter
of the Borrower, (i) the combined Operating Cash Flow with respect to the
Mortgaged Properties for the period covered by the four previous fiscal quarters
(treated as a single accounting period) is less than 1.6 times the Pro Forma
Debt Service Charges for such period as determined pursuant to ss.9.5 or (ii)
the Distributions paid by the Borrower and the Company for the period covered by
the four previous fiscal quarters exceeds eighty-eight percent (88%) of its
Funds from Operations for such four fiscal quarters, then the Borrower shall
obtain and maintain in effect Interest Rate Contracts which are satisfactory to
the Agent on all variable rate Indebtedness that exceeds twenty percent (20%) of
the Borrower's Consolidated Total Adjusted Asset Value.
ss.15. Transfer to Borrower. Within thirty (30) days after the
Closing Date the Company shall complete the transfer of all of its material
assets to the Borrower and shall obtain all third party consents necessary with
respect to such transfer. After the Closing Date the Company shall cause all
assets and liabilities to be acquired or incurred in the name of the Borrower.
ss.8. CERTAIN NEGATIVE COVENANTS OF THE BORROWER.
Each of the Borrower and the Company covenants and agrees that, so
long as any Loan or Note is outstanding or any of the Banks has any obligation
to make any Loans:
ss.1. Restrictions on Indebtedness. The Borrower and the Company
will not, and each of the Borrower and the Company will not permit any of its
Subsidiaries to, create, incur, assume, guarantee or be or remain liable,
contingently or otherwise, with respect to any Indebtedness other than:
(a) Indebtedness to the Banks arising under any of the Loan
Documents;
(b) current liabilities of the Borrower or its Subsidiaries
incurred in the ordinary course of business including liabilities originally
incurred by the Company and assumed by the Borrower but not incurred through (i)
the borrowing of money, or (ii) the obtaining of credit except for credit on an
open account basis customarily extended and in fact extended in connection with
normal purchases of goods and services;
(c) Indebtedness in respect of taxes, assessments,
governmental charges or levies and claims for labor, materials and supplies to
the extent that payment therefor shall not at the time be required to be made in
accordance with the provisions of ss.7.8;
(d) Indebtedness in respect of judgments or awards that have
been in force for less than the applicable period for taking an appeal so long
as execution is not levied thereunder or in respect of which the Borrower shall
at the time in good faith be prosecuting an appeal or proceedings for review and
in respect of which a stay of execution shall have been obtained pending such
appeal or review;
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(e) endorsements for collection, deposit or negotiation and
warranties of products or services, in each case incurred in the ordinary
course of business;
(f) subject to the provisions of ss.9, Non-recourse
Indebtedness of the Borrower or any of its Subsidiaries, provided that neither
the Borrower nor any of its Subsidiaries shall incur any Non-recourse
Indebtedness unless the Borrower shall have provided to the Banks a statement
that no Default or Event of Default exists and a Compliance Certificate
demonstrating that the Borrower will be in compliance with the covenants
referred to therein after giving effect to such incurrence;
(g) Indebtedness in respect of reverse repurchase agreements
having a term of not more than 180 days with respect to Investments described
in ss.8.3(d) or (e);
(h) Indebtedness existing on the date of this Agreement and
listed and described on Schedule 8.1 hereto provided that all such
Indebtedness of the Company shall be assumed by the Borrower; and
(i) subject to the provisions of ss.9, other recourse
Indebtedness of the Borrower and its Subsidiaries not secured by the Mortgaged
Property in an aggregate outstanding principal amount (excluding the
Obligations) not exceeding $5,000,000; provided that neither the Borrower nor
any of its Subsidiaries shall incur any recourse Indebtedness described in this
ss.8.1(i) unless the Borrower shall have provided to the Banks a statement that
no Default or Event of Default exists and a Compliance Certificate demonstrating
that the Borrower will be in compliance with the covenants referred to therein
after giving effect to such incurrence.
ss.2. Restrictions on Liens, Etc. The Company will not, the Borrower
will not, and the Borrower will not permit any of its Subsidiaries to, (a)
create or incur or suffer to be created or incurred or to exist any lien,
encumbrance, mortgage, pledge, charge, restriction or other security interest of
any kind upon any of its property or assets of any character whether now owned
or hereafter acquired, or upon the income or profits therefrom; (b) transfer any
of its property or assets or the income or profits therefrom for the purpose of
subjecting the same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c) acquire, or
agree or have an option to acquire, any property or assets upon conditional sale
or other title retention or purchase money security agreement, device or
arrangement; (d) suffer to exist for a period of more than 30 days after the
same shall have been incurred any Indebtedness or claim or demand against it
that if unpaid might by law or upon bankruptcy or insolvency, or otherwise, be
given any priority whatsoever over its general creditors; (e) sell, assign,
pledge or otherwise transfer any accounts, contract rights, general intangibles,
chattel paper or instruments, with or without recourse; or (f) incur or maintain
any obligation to any holder of Indebtedness of the Borrower or such Subsidiary
which prohibits the creation or maintenance of any lien securing the
Obligations; provided that the Borrower and any Subsidiary of the Borrower may
create or incur or suffer to be created or incurred or to exist:
(i) liens in favor of the Borrower on all or part of the
assets of Subsidiaries of the Borrower (other than Collateral)
securing Indebtedness owing by such Subsidiaries to the Borrower;
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(ii) liens on properties to secure taxes, assessments and
other governmental charges or claims for labor, material or supplies
in respect of obligations not overdue;
(iii) deposits or pledges made in connection with, or to
secure payment of, workers' compensation, unemployment insurance, old
age pensions or other social security obligations;
(iv) liens on properties other than the Mortgaged Property
or any interest therein (including the rents, issues and profits
therefrom) in respect of judgments, awards or indebtedness, the
Indebtedness with respect to which is permitted by ss.8.1(d),
ss.8.1(f) or ss.8.1 (i);
(v) encumbrances on properties other than the Mortgaged
Property consisting of easements, rights of way, zoning restrictions,
restrictions on the use of real property and defects and
irregularities in the title thereto, landlord's or lessor's liens
under leases to which the Borrower or a Subsidiary of such Person is
a party, and other minor liens or encumbrances none of which
interferes materially with the use of the property affected in the
ordinary conduct of the business of the Borrower or its Subsidiaries.
which defects do not individually or in the aggregate have a
materially adverse effect on the business of the Borrower
individually or of such Person and its Subsidiaries on a consolidated
basis;
(vi)liens on Real Estate other than the Mortgaged Property
and Short-term Investments securing Non-recourse Indebtedness
permitted by ss.8.1(f);
(vii)liens in favor of the Agent and the Banks under the Loan
Documents;
(viii) liens and encumbrances on a Mortgaged Property expressly
permitted under the terms of the Security Deed relating thereto; and
(ix) other presently outstanding liens listed on Schedule
8.2 on properties other than the Mortgaged Property.
ss.3. Restrictions on Investments. The Company will not, the Borrower
will not, and the Borrower will not permit any of its Subsidiaries to, make or
permit to exist or to remain outstanding any Investment except that the Borrower
(and the Company, but only to the extent permitted by ss.8.10) may make or
permit to exist or to remain outstanding Investments in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the date of
purchase by the Borrower or its Subsidiary;
(b) marketable direct obligations of any of the following:
Federal Home Loan Mortgage Corporation, Student Loan Marketing Association,
Federal Home Loan Banks, Federal National Mortgage Association, Government
National Mortgage Association, Bank for Cooperatives, Federal Intermediate
Credit Banks, Federal Financing Banks, Export-Import Bank of the United States,
Federal Land Banks, or any other agency or instrumentality of the United States
of America;
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(c) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total assets in
excess of $100,000,000; provided, however, that the aggregate amount at any time
so invested with any single bank having total assets of less than $1,000,000,000
will not exceed $200,000;
(d) securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the United States of
America or any State which at the time of purchase are rated by Moody's
Investors Service, Inc. or by Standard & Poor's Corporation at not less than "P
1" if then rated by Moody's Investors Service, Inc., and not less than "A 1", if
then rated by Standard & Poor's Corporation;
(e)mortgage-backed securities guaranteed by the Government
National Mortgage Association, the Federal National Mortgage Association or the
Federal Home Loan Mortgage Corporation and other mortgage-backed bonds which at
the time of purchase are rated by Moody's investors Service, Inc. or by Standard
& Poor's Corporation at not less than "Aa" if then rated by Moody's Investors
Service, Inc. and not less than "AA" if then rated by Standard & Poor's
Corporation;
(f)repurchase agreements having a term not greater than 90
days and fully secured by securities described in the foregoing subsection (a),
(b) or (e) with banks described in the foregoing subsection (c) or with
financial institutions or other corporations having total assets in excess of
$500,000,000;
(g)shares of so-called "money market funds" registered with
the SEC under the Investment Company Act of 1940 which maintain a level
per-share value, invest principally in investments described in the foregoing
subsections (a) through (f) and have total assets in excess of $50,000,000;
(h)Investments in Subsidiaries of the Borrower, but only
with the consent of the Requisite Banks; and
(i)Investments in real property which is used principally
for offices, offices/service or light industry located within the States of
Illinois, Minnesota, Wisconsin, Michigan, Indiana or Ohio, provided that in no
event shall the aggregate costs of all Investments pursuant to this ss.8.3(i)
exceed the amount set forth with respect thereto in the Borrower's annual budget
and business plan delivered to the Agent pursuant to ss.7.4(m).
ss.4. Merger, Consolidation. The Company will not, the Borrower will
not, and the Borrower will not permit any of its Subsidiaries to, become a party
to any merger or consolidation except (i) the merger or consolidation of one or
more of the Subsidiaries of the Borrower with and into the Borrower and (ii) the
merger or consolidation of two or more Subsidiaries of the Borrower.
ss.5. Sale and Leaseback. The Company will not, the Borrower will
not, and the Borrower will not permit any of its Subsidiaries to, enter into any
arrangement, directly or indirectly, whereby the Company, the Borrower or any
Subsidiary of the Borrower shall sell or transfer any Real Estate owned by it in
order that then or thereafter the Company, the Borrower or any Subsidiary shall
lease back such Real Estate.
ss.6. Compliance with Environmental Laws. The Company will not, the
Borrower will not, and the Borrower will not permit any of its Subsidiaries,
to do any of the following: (a) use any of the Real Estate or any portion
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thereof as a facility for the handling, processing, storage or disposal of
Hazardous Substances, except for small quantities of Hazardous Substances used
in the ordinary course of business and in compliance with all applicable
Environmental Laws, (b) cause or permit to be located on any of the Real Estate
any underground tank or other underground storage receptacle for Hazardous
Substances except in full compliance with Environmental Laws, (c) generate any
Hazardous Substances on any of the Real Estate except in full compliance with
Environmental Laws, (d) conduct any activity at any Real Estate or use any Real
Estate in any manner so as to cause a Release of Hazardous Substances on, upon
or into the Real Estate or any surrounding properties or any threatened Release
of Hazardous Substances which might give rise to liability under CERCLA or any
other Environmental Law, or (e) directly or indirectly transport or arrange for
the transport of any Hazardous Substances (except in compliance with all
Environmental Laws).
The Borrower shall:
(i) in the event of any change in Environmental Laws
governing the assessment, release or removal of Hazardous Substances, which
change would lead a prudent lender to require additional testing to avail itself
of any statutory insurance or limited liability, take all action (including,
without limitation, the conducting of engineering tests at the sole expense of
the Borrower) to confirm that no Hazardous Substances are or ever were Released
or disposed of on the Mortgaged Property; and
(ii) if any Release or disposal of Hazardous Substances shall
occur or shall have occurred on the Mortgaged Property (including without
limitation any such Release or disposal occurring prior to the acquisition of
such Mortgaged Property by the Borrower), cause the prompt containment and
removal of such Hazardous Substances and remediation of the Mortgaged Property
in full compliance with all applicable laws and regulations and to the
satisfaction of the Requisite Banks; provided, that the Borrower shall be deemed
to be in compliance with Environmental Laws for the purpose of this clause (ii)
so long as it or a responsible third party with sufficient financial resources
is taking reasonable action to remediate or manage any event of noncompliance to
the satisfaction of the Requisite Banks and no action shall have been commenced
by any enforcement agency. The Requisite Banks may engage their own
Environmental Engineer to review the environmental assessments and the
Borrower's compliance with the covenants contained herein.
At any time after an Event of Default shall have occurred hereunder,
or, whether or not an Event of Default shall have occurred, at any time that the
Agent or the Requisite Banks shall have reasonable grounds to believe that a
Release or threatened Release of Hazardous Substances may have occurred,
relating to any Mortgaged Property, or that any of the Mortgaged Properties is
not in compliance with the Environmental Laws, the Agent may at its election
(and will at the request of the Requisite Banks) obtain such environmental
assessments of such Mortgaged Property prepared by an Environmental Engineer as
may be necessary or advisable for the purpose of evaluating or confirming (i)
whether any Hazardous Substances are present in the soil or water at or adjacent
to such Mortgaged Property and (ii) whether the use and operation of such
Mortgaged Property comply with all Environmental Laws. Environmental assessments
may include detailed visual inspections of such Mortgaged Property including,
without limitation, any and all storage areas, storage tanks, drains. dry wells
and leaching areas, and the taking of soil samples, as well as such other
investigations or analyses as are necessary or appropriate for a complete
determination of the compliance of such Mortgaged Property and the use and
operation thereof with all applicable Environmental Laws. All such
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environmental assessments shall be at the sole cost and expense of the
Borrower.
ss.7. Distributions. Neither the Company nor the Borrower shall make
any Distributions which would cause it to violate any of the following
covenants:
(a) The Company shall not pay any Distribution to the
shareholders of the Company and the Borrower shall not pay any Distribution to
the partners of the Borrower if such Distribution is in excess of the amount
which, when added to the amount of all other Distributions paid in the same
fiscal quarter and the preceding three (3) fiscal quarters would exceed ninety
percent (90%) of the Borrower's Funds from Operations for the four consecutive
fiscal quarters ending prior to the quarter in which such Distribution is paid;
provided, however, the Borrower may make distributions to the Company which
correspond in amount and timing to Distributions which the Company is permitted
by this ss.8.7 to make to its shareholders and other Distributions to the
Company for "REIT Expenses" as defined in Borrower's Agreement of Limited
Partnership delivered pursuant to ss.10.3;
(b)In the event that an Event of Default specified in ss.12.
1 (a) or (b) shall have occurred and be continuing, the Borrower and the Company
shall make no Distributions other than the minimum Distributions required under
the Code to maintain the REIT Status of the Company, as evidenced by a
certification of the principal financial or accounting officer of the Company
containing calculations in reasonable detail satisfactory in form and substance
to Agent; and
(c) Notwithstanding the foregoing, at any time when an Event
of Default shall have occurred and the maturity of the Obligations has been
accelerated, the Borrower and the Company shall not make any Distributions
whatsoever, directly or indirectly.
ss.8. Asset Sales. Neither the Borrower nor any Subsidiary thereof
shall sell, transfer or otherwise dispose of any Real Estate (except as the
result of a condemnation or casualty and except for the granting of Permitted
Liens) unless there shall have been delivered to the Banks a statement that no
Default or Event of Default exists and a Compliance Certificate demonstrating
that the Borrower will be in compliance with the covenants referred to therein
after giving effect to such sale, transfer or other disposition. Upon compliance
with this ss.8.8, the Agent, on behalf of the Banks, shall release such Real
Estate if it was a Mortgaged Property.
ss.9. Development Activity. Neither the Borrower nor any of its
Subsidiaries shall engage, directly or indirectly, in the development of
properties to be used principally for offices, offices/service or light industry
or otherwise, without the prior written consent of the Requisite Banks,
provided, however, that such consent shall not be required for the development
projects in which at least 70% of the gross leasable area is leased prior to the
start of construction as long as the aggregate total project costs of all
development projects in process at any time does not exceed five percent (5%) of
Borrower's Consolidated Total Adjusted Asset Value. Development projects shall
be considered "in process" from the time of the start of construction until the
issuance of certificates of occupancy and the occupancy by tenants of at least
70% of the gross leasable area of the applicable project. For purposes of this
ss.8.9, the term "development" shall include the new construction of an office,
office/service or light industry complex or the substantial renovation of
improvements to real property the
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costs of which renovation exceeds ten percent (10%) of the Appraised Value of
such real property, but shall not include the addition of amenities or other
related facilities to existing Real Estate or renovations thereto the cost of
which do not exceed ten percent (10%) of the Appraised Value of such Real Estate
which is already used principally for offices, offices/service or light
industry. The Borrower acknowledges that the decision of the Requisite Banks to
grant or withhold such consent shall be based on such factors as the Requisite
Banks deem relevant in their sole discretion, including without limitation,
evidence of sufficient funds both from borrowings and equity to complete such
development and evidence that the Borrower or its Subsidiary has the resources
and expertise necessary to complete such project. Nothing herein shall prohibit
the Borrower or any of its Subsidiaries thereof from entering into an agreement
to acquire Real Estate which has been developed and initially leased by another
Person.
ss.10. The Company. Following completion of the transfer of its
assets to the Borrower pursuant to ss.7.15, the Company shall not own any Real
Estate or other material assets and shall not engage in any business other than
acting as general partner of the Borrower, the ownership of the Subsidiaries
described in Schedule 6.19 and the ownership of the partnership interests
described on Schedule 8.10. The Company shall not cease to be the sole general
partner of the Borrower and the Company's percentage interest in the Borrower
shall not be less than 51%. The Company will not pledge or otherwise encumber
any of its partnership interests in the Borrower.
ss.9. FINANCIAL COVENANTS OF THE BORROWER.
The Borrower covenants and agrees that, so long as any Loan or Note
is outstanding or any Bank has any obligation to make any Loans, the Borrower
will comply with the following:
ss.1. Borrowing Base. The Borrower will not, at any time, permit the
outstanding principal balance of the Loans as of the date of determination to
be greater than the Borrowing Base of the Borrower as determined as of the
same date.
ss.2. Liabilities to Assets Ratio. The Borrower will not, at any
time, permit the ratio of the Borrower's Consolidated Total Liabilities to
Consolidated Total Adjusted Asset Value to exceed 0.55 to 1.
ss.3. Debt Service Coverage. The Borrower will not, at the end of any
fiscal quarter, permit the Borrower's Consolidated Operating Cash Flow for the
period covered by the four previous consecutive fiscal quarters (treated as a
single accounting period) to be less than 2.0 times the Debt Service of the
Borrower for such period.
ss.4. Tangible Net Worth. The Borrower will not, at the end of any
fiscal quarter, permit its Consolidated Tangible Net Worth to be less than
$40,000,000.00 plus seventy-five percent (75%) of any Net Offering Proceeds
received by the Borrower or the Company after April 12, 1996.
ss.5. Mortgaged Property Operating Net Income. The Borrower will not,
at the end of any fiscal quarter, permit the combined Operating Cash Flow with
respect to the Mortgaged Properties for the period covered by the four previous
consecutive fiscal quarters (treated as a single accounting period) to be less
than 1.5 times the Pro Forma Debt Service Charges for such period, provided that
prior to such time as the Borrower (or the Company) has owned and operated a
Mortgaged Property for four full fiscal quarters, the Operating
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Cash Flow with respect to such Mortgaged Property for the number of full fiscal
quarters which the Borrower (or the Company) has owned and operated such
Mortgaged Property as annualized shall be utilized for purposes of determining
compliance with this covenant.
ss.6. Accounting. Whenever this ss.9 or the definitions used
(directly or indirectly) herein apply to accounting periods of the Borrower
commencing prior to the date hereof, the applicable financial condition and
results from operations of the Company as predecessor to the Borrower shall be
counted as though they were those of the Borrower.
ss.10. CLOSING CONDITIONS.
Pursuant to the Prior Credit Agreement, the Company executed and
delivered various documents to the Agent as a condition to the obligations of
the Agent and the Banks to make the initial Loans under the Prior Credit
Agreement. Except to the extent expressly amended and replaced as provided in
this ss.10, all such documents shall remain in full force and effect, and none
of such documents is superseded by the provisions of this ss.10 or any other
provision of this Agreement. The obligation of the Agent and the Banks to
increase the Total Commitment to $75,000,000.00 and to make further Loans to the
Borrower is subject to the satisfaction of the following conditions precedent:
ss.1. Loan Documents. The Borrower shall have duly executed and
delivered to the Agent, except that each Bank shall have received a fully
executed counterpart of its Note, each of the following Loan Documents, each of
which shall be in full force and effect and shall be in form and substance
satisfactory to the Requisite Banks:
(a)Agreement; Notes. Five (5) duly executed copies of this
Agreement, one (1) duly executed Note in favor of FNBB, one (1) duly executed
Note in favor of BOA, and one (1) duly executed Note in favor of FBNA. Upon
delivery the Notes, the Notes executed and delivered by the Company to FNBB and
BOA in connection with the Prior Credit Agreement shall be marked cancelled and
delivered to the Borrower.
(b) Guaranty and Indemnity Agreement. Four (4) duly
executed copies of the Guaranty and the Indemnity Agreement.
(c) Assumption and Amendments to Security Deeds and
Assignments of Rents. Two (2) duly executed copies of an Assumption and
Amendment to each Security Deed and Assignment of Rents executed and delivered
in connection with the Prior Credit Agreement.
(d) UCC Financing Statements. UCC Financing Statements
naming the Borrower as debtor relating to all security interests in personal
property or fixtures granted pursuant to the Security Deeds executed and
delivered in connection with the Prior Credit Agreement.
ss.2. Resolutions. All action on the part of the Borrower and the
Company necessary for the valid execution, delivery and performance by such
Person of this Agreement and the other Loan Documents to which such Person is or
is to become a party shall have been duly and effectively taken, and evidence
thereof satisfactory to the Agent shall have been provided to the Agent. The
Agent shall have received from the Company true copies of the resolutions
adopted by its board of directors authorizing the transactions
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described herein, certified by its secretary as of a recent date to be true
and complete.
ss.3. Incumbency Certificate; Authorized Signers. The Agent shall
have received from the Company an incumbency certificate, dated as of the
Closing Date, signed by a duly authorized officer of the Company and giving the
name and bearing a specimen signature of each individual who shall be authorized
to sign, in the name and on behalf of the Company and the Borrower, each of the
Loan Documents to which such Person is or is to become a party. The Agent shall
have also received from the Company a certificate, dated as of the Closing Date,
signed by a duly authorized officer of the Company and giving the name and
specimen signature of each individual who shall be authorized to make Loan and
Conversion Requests and to give notices and to take other action on behalf of
the Borrower under the Loan Documents. The Agent shall have also received a
certificate of the Company to which is attached correct and complete copies of
the Agreement of Limited Partnership and the Certificate of Limited Partnership
of the Borrower.
ss.4. Opinion of Counsel. The Agent shall have received a favorable
opinion addressed to the Banks and the Agent and dated as of the Closing Date,
in form and substance satisfactory to the Banks and the Agent, from counsel of
the Borrower and the Company as to such matters as the Agent shall reasonably
request.
ss.5. Payment of Fees. The Borrower shall have paid to the Agent the
additional commitment and syndication fee pursuant to ss.4.2.
ss.6. Performance; No Default. The Borrower and the Company shall
have performed and complied with all terms and conditions herein required to
be performed or complied with by it on or prior to the Closing Date, and on
the Closing Date there shall exist no Default or Event of Default.
ss.7. Representations and Warranties. The representations and
warranties made by the Borrower or the Company in the Loan Documents or
otherwise made by or on behalf of the Company, the Borrower or any of its
Subsidiaries in connection therewith or after the date thereof shall have been
true and correct in all material respects when made and shall also be true and
correct in all material respects on the Closing Date.
ss.8. Proceedings and Documents. All proceedings in connection with
the transactions contemplated by this Agreement and the other Loan Documents
shall be reasonably satisfactory to the Agent and the Agent's Special Counsel in
form and substance, and the Agent shall have received all information and such
counterpart originals or certified copies of such documents and such other
certificates, opinions or documents as the Agent and the Agent's Special Counsel
may reasonably require.
ss.9. Compliance Certificate. A Compliance Certificate dated as of
the date of the Closing Date demonstrating compliance with each of the covenants
calculated therein as of the most recent fiscal quarter end for which the
Borrower has provided financial statements under ss.6.4 adjusted in the best
good faith estimate of the Borrower shall have been delivered to the Agent.
ss.10. Stockholder Consents. The Agent shall have received evidence
satisfactory to the Agent that all necessary stockholder consents required in
connection with the consummation of the transactions contemplated by this
Agreement and the other Loan Agreements have been obtained.
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ss.11. Other Documents. To the extent requested by the Agent, the
Agent shall have received executed copies of all material agreements of any
nature whatsoever to which the Borrower or any Subsidiary is a party affecting
or relating to the use, operation, development, construction or management of
the Mortgaged Property.
ss.12. No Condemnation/Taking. The Agent shall have received written
confirmation from the Borrower that no condemnation proceedings are pending or
to the Borrower' knowledge threatened against any Mortgaged Property or, if any
such proceedings are pending or threatened, identifying the same and the Real
Estate affected thereby and the Agent shall have determined that none of such
proceedings is or will be material to the Mortgaged Property affected thereby.
ss.13. Title Insurance Endorsements. Endorsements to each Title
Policy satisfactory to the Agent reflecting the transfer of title from the
Company to the Borrower, the recording of the amendments referenced in
ss.10.1(c) and providing replacement tie-in endorsements providing aggregate
title insurance coverage of at least $75,000,000 and not containing any new
exceptions other than as may be approved by the Agent.
ss.14. Other. The Agent shall have reviewed such other documents,
instruments, certificates, opinions, assurances, consents and approvals as the
Agent or the Agent's Special Counsel may reasonably have requested.
ss.11. CONDITIONS TO ALL BORROWINGS.
The obligations of the Banks to make any Loan, whether on or after
the Closing Date, shall also be subject to the satisfaction of the following
conditions precedent:
ss.1. Prior Conditions Satisfied. All conditions set forth in ss.10
and in ss.10 of the Prior Credit Agreement shall continue to be satisfied as of
the date upon which any Loan is to be made.
ss.2. Representations True; No Default. Each of the representations
and warranties made by or on behalf of the Company, the Borrower or any of its
Subsidiaries contained in this Agreement, the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made and shall also
be true at and as of the time of the making of such Loan, with the same effect
as if made at and as of that time (except to the extent of changes resulting
from transactions contemplated or permitted by this Agreement and the other Loan
Documents and changes occurring in the ordinary course of business that singly
or in the aggregate are not materially adverse, and except to the extent that
such representations and warranties relate expressly to an earlier date) and no
Default or Event of Default shall have occurred and be continuing. Each of the
Banks shall have received a certificate of the Borrower signed by an authorized
officer of the Borrower to such effect.
ss.3. No Legal Impediment. There shall be no law or regulations
thereunder or interpretations thereof that in the reasonable opinion of any
Bank would make it illegal for such Bank to make such Loan.
ss.4. Governmental Regulation. Each Bank shall have received such
statements in substance and form reasonably satisfactory to such Bank as such
Bank shall require for the purpose of compliance with any applicable
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regulations of the Comptroller of the Currency or the Board of Governors of
the Federal Reserve System.
ss.5. Proceedings and Documents. All proceedings in connection with
the Loan shall be satisfactory in substance and in form to the Agent, and the
Agent shall have received all information and such counterpart originals or
certified or other copies of such documents as the Agent may reasonably request.
ss.6. Borrowing Documents. In the case of any request for a Loan,
the Agent shall have received the request for a Loan required by ss.2.5 in the
form of Exhibit B hereto, fully completed.
ss.7. Endorsement to Title Policy. At such times as Agent shall
determine in its discretion, to the extent available under applicable law, a
"date down" endorsement to each Title Policy indicating no change in the state
of title and containing no survey exceptions not approved by the Agent, or if
such endorsement is not available, such other evidence and assurances as the
Agent may reasonably require (which evidence may include, without limitation, an
affidavit from the Borrower stating that there have been no changes in title
from the date of the last effective date of the Title Policy).
ss.8. Future Advances Tax Payment. As a condition precedent to any
Bank's obligations to make any Loans available to the Borrower hereunder, the
Borrower will pay to the Agent any mortgage, recording, intangible, documentary
stamp or other similar taxes and charges which the Agent reasonably determines
to be payable as a result of such Loan to any state or any county or
municipality thereof in which any of the Mortgaged Properties are located and
deliver to the Agent such affidavits or other information which the Agent
reasonably determines to be necessary in connection with the payment of such
tax, in order to insure that the Security Deeds on Mortgaged Property located in
such state secure the Borrower's obligation with respect to the Loans then being
requested by the Borrower. The provisions of this ss.11.8 shall be without
limitation of the Borrower's obligations under other provisions of the Loan
Documents, including without limitation ss.15 hereof.
ss.12. EVENTS OF DEFAULT; ACCELERATION; ETC.
ss.1. Events of Default and Acceleration. If any of the following
events ("Events of Default" or, if the giving of notice or the lapse of time
or both is required, then, prior to such notice or lapse of time, "Defaults")
shall occur:
(a) the Borrower shall fail to pay any principal of the
Loans within ten (10) days after the same shall become due and payable, whether
at the stated date of maturity or any accelerated date of maturity or at any
other date fixed for payment;
(b)the Borrower shall fail to pay any interest on the Loans
or any other fees or sums due hereunder or under any of the other Loan
Documents, within ten (10) days after the same shall become due and payable,
whether at the stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(c) the Borrower shall fail to comply with any covenant
contained in ss.9, and such failure shall continue for thirty (30) days after
written notice thereof shall have been given to the Borrower by the Agent;
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(d) the Company, the Borrower or any of its Subsidiaries
shall fail to perform any other material term, covenant or agreement contained
herein or in any of the other Loan Documents (other than those specified above
in this ss.12);
(e) any representation or warranty made by or on behalf of
the Company, the Borrower or any of its Subsidiaries in this Agreement or any
other Loan Document, or in any report, certificate, financial statement, request
for a Loan, or in any other document or instrument delivered pursuant to or in
connection with this Agreement, any advance of a Loan or any of the other Loan
Documents shall prove to have been false in any material respect upon the date
when made or deemed to have been made or repeated;
(f) the Company, the Borrower or any of its Subsidiaries
shall fail to pay at maturity, or within any applicable period of grace, any
obligation for borrowed money or credit received or other Indebtedness, or fail
to observe or perform any material term, covenant or agreement contained in any
agreement by which it is bound, evidencing or securing any such borrowed money
or credit received or other Indebtedness for such period of time as would permit
(assuming the giving of appropriate notice if required) the holder or holders
thereof or of any obligations issued thereunder to accelerate the maturity
thereof; provided that the events described in this ss.12.1(f) shall not
constitute an Event of Default unless such failure to perform, together with
other failures to perform as described in this ss.12.1(f), involve singly or in
the aggregate obligations for borrowed money or credit received totaling in
excess of $1,000,000;
(g) the Company, the Borrower or any of its Subsidiaries,
(i) shall make an assignment for the benefit of creditors, or admit in writing
its general inability to pay or generally fail to pay its debts as they mature
or become due, or shall petition or apply for the appointment of a trustee or
other custodian, liquidator or receiver of any such Person or of any substantial
part of the assets of any thereof, (ii) shall commence any case or other
proceeding relating to any such Person under any bankruptcy, reorganization,
arrangement, insolvency, readjustment of debt, dissolution or liquidation or
similar law of any jurisdiction, now or hereafter in effect, or (iii) shall take
any action to authorize or in furtherance of any of the foregoing;
(h) a petition or application shall be filed for the
appointment of a trustee or other custodian, liquidator or receiver of any of
the Company, the Borrower or any of its Subsidiaries or any substantial part of
the assets of any thereof, or a case or other proceeding shall be commenced
against any such Person under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation or similar law of
any jurisdiction, now or hereafter in effect, and any such Person shall indicate
its approval thereof, consent thereto or acquiescence therein or such petition,
application, case or proceeding shall not have been discussed within sixty (60)
days following the filing or commencement thereof;
(i) a decree or order is entered appointing any such
trustee, custodian, liquidator or receiver or adjudicating any of the Company,
the Borrower or any of its Subsidiaries bankrupt or insolvent, or approving a
petition in any such case or other proceeding, or a decree or order for relief
is entered in respect of any such Person, in an involuntary case under federal
bankruptcy laws as now or hereafter constituted;
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(j) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than sixty (60) days, whether or not consecutive, any
uninsured final judgment against any of the Company, the Borrower or any of its
Subsidiaries that, with other outstanding uninsured final judgments,
undischarged, against such Persons exceeds in the aggregate $250,000.00;
(k) if any of the Loan Documents shall be canceled,
terminated, revoked or rescinded otherwise than in accordance with the terms
thereof or with the express prior written agreement, consent or approval of the
Banks, or any action at law, suit in equity or other legal proceeding to cancel,
revoke or rescind any of the Loan Documents shall be commenced by or on behalf
of the Borrower, the Company or any of its holders of Voting Interests, or any
court or any other governmental or regulatory authority or agency of competent
jurisdiction shall make a determination that, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the Loan Documents is illegal,
invalid or unenforceable in accordance with the terms thereof;
(1) any dissolution, termination, partial or complete
liquidation, merger or consolidation of the Borrower or the Company or any sale,
transfer or other disposition of the assets of the Borrower or the Company other
than as permitted under the terms of this Agreement or the other Loan Documents;
(m) any suit or proceeding shall be filed against the
Borrower or the Company or any of the Mortgaged Properties which in the good
faith business judgment of the Requisite Banks after giving consideration to the
likelihood of success of such suit or proceeding and the availability of
insurance to cover any judgment with respect thereto and based on the
information available to them, if adversely determined, would have a materially
adverse effect on the ability of the Borrower or the Company to perform each and
every one of its obligations under and by virtue of the Loan Documents;
(n) the Borrower or the Company shall be indicted for a
federal crime, a punishment for which could include the forfeiture of any
assets of such person included in the Mortgaged Property;
(o) with respect to any Guaranteed Pension Plan, an ERISA
Reportable Event shall have occurred and the Requisite Banks shall have
determined in their reasonable discretion that such event reasonably could be
expected to result in liability of the Company, the Borrower or any of its
Subsidiaries to the PBGC or such Guaranteed Pension Plan in an aggregate amount
exceeding $1,000,000 and such event in the circumstances occurring reasonably
could constitute grounds for the termination of such Guaranteed Pension Plan by
the PBGC or for the appointment by the appropriate United States District Court
of a trustee to administer such Guaranteed Pension Plan; or a trustee shall have
been appointed by the United States District Court to administer such Plan; or
the PBGC shall have instituted proceedings to terminate such Guaranteed Pension
Plan;
(p) Richard May and Richard Rasley shall in the aggregate
own, directly or indirectly, less than one percent (1.0%) of the issued and
outstanding shares of the capital stock of the Company;
(q) Richard May shall cease to be the Chairman and Chief
Executive Officer of or Richard Rasley shall cease to be the Secretary of, the
Company and a competent and experienced successor for such Person shall not be
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approved by the Requisite Banks within six (6) months of such event, such
approval not to be unreasonably withheld; or
(r)any Event of Default as defined in any of the other Loan
Documents, shall occur;
then, and in any such event, the Agent may, and upon the request of the
Requisite Banks shall, by notice in writing to the Borrower declare all amounts
owing with respect to this Agreement, the Notes and the other Loan Documents to
be, and they shall thereupon forthwith become, immediately due and payable
without presentment, demand, protest or other notice of any kind, all of which
are hereby expressly waived by the Borrower; provided that in the event of any
Event of Default specified in ss.12.1(g), ss.12.l(h) or ss.12.l(i), all such
amounts shall become immediately due and payable automatically and without any
requirement of notice from any of the Banks or the Agent.
ss.2. Certain Cure Periods.
(a) In the event that there shall occur any Default under
ss.12.l(c), then within five (5) Business Days after receipt of notice of such
Default from the Agent or the Requisite Banks the Borrower may elect to cure
such Default by providing additional Collateral consisting of Potential
Collateral, and/or to reduce the outstanding Loans to it, in which event such
actions shall be completed not later than fifteen (15) days following the date
on which the Borrower is notified that the Requisite Banks have approved the
Borrower's proposed actions (or thirty (30) days in the event that the Borrower
intends to provide additional Mortgaged Property). The Borrower's notice of its
election pursuant to the preceding sentence shall be delivered to the Agent
within the period of five (5) Business Days provided above. Within five (5)
Business Days after receipt of such advice, the Requisite Banks shall advise the
Borrower as to whether in their good faith judgment the actions proposed by the
Borrower are sufficient to cure such Default without the creation of any other
Default hereunder. In the event that the Requisite Banks determine the
Borrower's proposal is insufficient to cure such Default or is otherwise not in
accordance with the terms of this Agreement, the Borrower within an additional
three (3) Business Days after such negative notice may submit to the Agent an
alternative plan or evidence establishing that the Borrower's original election
was sufficient. In the event that within the times provided herein the Borrower
shall have failed to provide evidence satisfactory to the Requisite Banks that
the Borrower's proposed actions are sufficient to cure such Default in
accordance with the terms hereof, the cure period shall terminate and such
Default immediately shall constitute an Event of Default.
(b) In the event that the Borrower shall elect in whole or
in part under ss.12.2(a) to provide additional Mortgaged Property, (i) the Real
Estate to be added to the Collateral shall be Eligible Real Estate and on or
prior to the expiration of the 30-day period each of the Eligible Real Estate
Qualification Documents shall have been completed at the Borrower's expense and
provided to the Agent for the benefit of the Banks, and (ii) the Borrower, in
addition to any other amounts payable under this Agreement, shall pay to the
Agent within fifteen (15) days following the commencement of such 60-day period
a review fee in the amount of $15,000.00, which fee shall be nonrefundable under
any circumstances.
ss.3. Termination of Commitments. If any one or more Events of
Default specified in ss.12.1(g), ss.12.1(h) or ss.12.1(i) shall occur, then
immediately and without any action on the part of the Agent or any Bank any
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unused portion of the credit hereunder shall terminate and the Banks shall be
relieved of all obligations to make Loans to the Borrower. If any other Event of
Default shall have occurred, the Agent, upon the election of the Requisite
Banks, may by notice to the Borrower terminate the obligation to make Loans to
the Borrower. No termination under this ss.12.3 shall relieve the Borrower of
its Obligations to the Banks arising under this Agreement or the other Loan
Documents.
ss.4. Remedies. In case any one or more of the Events of Default
shall have occurred and be continuing, and whether or not the Banks shall have
accelerated the maturity of the Loans pursuant to ss.12.1, the Agent on behalf
of the Banks, may, with the consent of the Requisite Banks but not otherwise,
proceed to protect and enforce their rights and remedies under this Agreement,
the Notes or any of the other Loan Documents by suit in equity, action at law or
other appropriate proceeding, whether for the specific performance of any
covenant or agreement contained in this Agreement and the other Loan Documents
or any instrument pursuant to which the Obligations are evidenced, including to
the full extent permitted by applicable law the obtaining of the ex parte
appointment of a receiver, and, if such amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof or any other
legal or equitable right. No remedy herein conferred upon the Agent or the
holder of any Note is intended to be exclusive of any other remedy and each and
every remedy shall be cumulative and shall be in addition to every other remedy
given hereunder or now or hereafter existing at law or in equity or by statute
or any other provision of law. In the event that all or any portion of the
Obligations is collected by or through an attorney-at-law, the Borrower shall
pay all costs of collection including, but not limited to, reasonable attorneys'
fees.
ss.5. Distribution of Collateral Proceeds. In the event that,
following the occurrence or during the continuance of any Event of Default, any
monies are received in connection with the enforcement of any of the Security
Documents, or otherwise with respect to the realization upon any of the
Collateral, such monies shall be distributed for application as follows:
(a) First, to the payment of, or (as the case may be) the
reimbursement of, the Agent for or in respect of all reasonable costs, expenses,
disbursements and losses which shall have been incurred or sustained by the
Agent to protect or preserve the collateral or in connection with the collection
of such monies by the Agent, for the exercise, protection or enforcement by the
Agent of all or any of the rights, remedies, powers and privileges of the Agent
under this Agreement or any of the other Loan Documents or in respect of the
Collateral or in support of any provision of adequate indemnity to the Agent
against any taxes or liens which by law shall have, or may have, priority over
the rights of the Agent to such monies;
(b) Second, to all other Obligations in such order or
preference as the Requisite Banks shall determine; provided, however, that (i)
distributions in respect of such Obligations shall be made pari passu among
Obligations with respect to the Agent's fee payable pursuant to ss.4.3 and all
other Obligations, (ii) in the event that any Bank shall have wrongfully failed
or refused to make an advance under ss.2.6 and such failure or refusal shall be
continuing, advances made by other Banks during the pendency of such failure or
refusal shall be entitled to be repaid as to principal and accrued interest in
priority to the other Obligations described in this subsection (b), (iii)
Obligations owing to the Banks with respect to each type of Obligation such as
interest, principal. fees and expenses, shall be made among the Banks pro rata,
and (iv) amounts received or realized from the Borrower
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shall be applied against the Obligations of the Borrower; and provided, further
that the Requisite Banks may in their discretion make proper allowance to take
into account any Obligations not then due and payable; and
(c) Third, the excess, if any, shall be returned to the
Borrower or to such other Persons as are entitled thereto.
ss.13. SETOFF.
Regardless of the adequacy of any Collateral, during the continuance
of any Event of Default, any deposits (general or specific, time or demand,
provisional or final, regardless of currency, maturity, or the branch of where
such deposits are held) or other sums credited by or due from any of the Banks
to the Borrower or to the Company and any securities or other property of the
Borrower or of the Company in the possession of such Bank may be applied to or
set off against the payment of Obligations of such Person and any and all other
liabilities, direct, or indirect, absolute or contingent, due or to become due,
now existing or hereafter arising, of such Person to such Bank. Each of the
Banks agrees with each other Bank that if such Bank shall receive from the
Borrower or from the Company, whether by voluntary payment, exercise of the
right of setoff, or otherwise, and shall retain and apply to the payment of the
Note or Notes held by such Bank any amount in excess of its ratable portion of
the payments received by all of the Banks with respect to the Notes held by all
of the Banks such Bank will make such disposition and arrangements with the
other Banks with respect to such excess, either by way of distribution, pro
tanto assignment of claims, subrogation or otherwise as shall result in each
Bank receiving in respect of the Notes held by it its proportionate payment as
contemplated by this Agreement; provided that if all or any part of such excess
payment is thereafter recovered from such Bank, such disposition and
arrangements shall be rescinded and the amount restored to the extent of such
recovery, but without interest.
ss.14. THE AGENT.
ss.1. Authorization. The Agent is authorized to take such action on
behalf of each of the Banks and to exercise all such powers as are hereunder and
under any of the other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident thereto, provided
that no duties or responsibilities not expressly assumed herein or therein shall
be implied to have been assumed by the Agent. The relationship between the Agent
and the Banks is and shall be that of agent and principal only, and nothing
contained in this Agreement or any of the other Loan Documents shall be
construed to constitute the Agent as a trustee for any Bank. The Borrower and
any other Person shall be entitled to conclusively rely on a statement from the
Agent that it has the authority to act for and bind the Banks pursuant to this
Agreement and the other Loan Documents.
ss.2. Employees and Agents. The Agent may exercise its powers and
execute its duties by or through employees or agents and shall be entitled to
take, and to rely on, advice of counsel concerning all matters pertaining to its
rights and duties under this Agreement and the other Loan Documents. The Agent
may utilize the services of such Persons as the Agent may reasonably determine,
and all reasonable fees and expenses of any such Persons shall be paid by the
Borrower.
ss.3. No Liability. Neither the Agent nor any of its shareholders,
directors, officers or employees nor any other Person assisting them in their
duties nor any agent, or employee thereof, shall be liable to any of the Banks
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for any waiver, consent or approval given or any action taken, or omitted to be
taken, in good faith by it or them hereunder or under any of the other Loan
Documents, or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever, except that the
Agent or such other Person, as the case may be, may be liable for losses due to
its willful misconduct or gross negligence.
ss.4. No Representations. The Agent shall not be responsible for the
execution or validity or enforceability of this Agreement, the Notes, any of the
other Loan Documents or any instrument at any time constituting, or intended to
constitute, collateral security for the Notes, or for the value of any such
collateral security or for the validity, enforceability or collectability of any
such amounts owing with respect to the Notes, or for any recitals or statements,
warranties or representations made herein or in any of the other Loan Documents
or in any certificate or instrument hereafter furnished to it by or on behalf of
the Company, the Borrower or any of its Subsidiaries, or be bound to ascertain
or inquire as to the performance or observance of any of the terms, conditions,
covenants or agreements herein or in any other of the Loan Documents. The Agent
shall not be bound to ascertain whether any notice, consent, waiver or request
delivered to it by the Borrower or any holder of any of the Notes shall have
been duly authorized or is true, accurate and complete. The Agent has not made
nor does it now make any representations or warranties, express or implied, nor
does it assume any liability to the Banks, with respect to the creditworthiness
or financial condition of the Company, the Borrower or any of its Subsidiaries.
Each Bank acknowledges that it has, independently and without reliance upon the
Agent or any other Bank, and based upon such information and documents as it has
deemed appropriate, made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will, independently and without
reliance upon the Agent or any other Bank. based upon such information and
documents as it deems appropriate at the time, continue to make its own credit
analysis and decisions in taking or not taking action under this Agreement and
the other Loan Documents.
ss.5. Payments.
(a) A payment by the Borrower to the Agent hereunder or
under any of the other Loan Documents for the account of any Bank shall
constitute a payment to such Bank. The Agent agrees to distribute to each Bank
not later than one Business Day after the Agent's receipt of good funds,
determined in accordance with the Agent's customary practices, such Bank's pro
rata share of payments received by the Agent for the account of the Banks except
as otherwise expressly provided herein or in any of the other Loan Documents. In
the event that the Agent fails to distribute such amounts within one Business
Day as provided above, the Agent shall pay interest on such amount at a rate per
annum equal to the Federal Funds Effective Rate from time to time in effect.
(b) If in the opinion of the Agent the distribution of any
amount received by it in such capacity hereunder, under the Notes or under any
of the other Loan Documents might involve it in liability, it may refrain from
making distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction. If a court of competent
jurisdiction shall adjudge that any amount received and distributed by the Agent
is to be repaid, each Person to whom any such distribution shall have been made
shall either repay to the Agent its proportionate share of the amount so
adjudged to be repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
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(c) Notwithstanding anything to the contrary contained in
this Agreement or any of the other Loan Documents, any Bank that fails (i) to
make available to the Agent its pro rata share of any Loan or (ii) to comply
with the provisions of ss.13 with respect to making dispositions and
arrangements with the other Banks, where such Bank's share of any payment
received, whether by setoff or otherwise, is in excess of its pro rata share of
such payments due and payable to all of the Banks, in each case as, when and to
the full extent required by the provisions of this Agreement, shall be deemed
delinquent (a "Delinquent Bank") and shall be deemed a Delinquent Bank until
such time as such delinquency is satisfied. A Delinquent Bank shall be deemed to
have assigned any and all payments due to it from the Borrower, whether on
account of outstanding Loans, interest, fees or otherwise, to the remaining
nondelinquent Banks for application to, and reduction of, their respective pro
rata shares of all outstanding Loans. The Delinquent Bank hereby authorizes the
Agent to distribute such payments to the nondelinquent Banks in proportion to
their respective pro rata shares of all outstanding Loans. A Delinquent Bank
shall be deemed to have satisfied in full a delinquency when and if, as a result
of application of the assigned payments to all outstanding Loans of the
nondelinquent Banks or as a result of other payments by the Delinquent Banks to
the nondelinquent Banks, the Banks' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency.
ss.6. Holders of Notes. Subject to the terms of Article 18, the Agent
may deem and treat the payee of any Note as the absolute owner or purchaser
thereof for all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder, assignee or
transferee.
ss.7. Indemnity. The Banks ratably agree hereby to indemnify and hold
harmless the Agent from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs, expenses (including
any expenses for which the Agent has not been reimbursed by the Borrower as
required by ss.15), and liabilities of every nature and character arising out of
or related to this Agreement, the Notes, or any of the other Loan Documents or
the transactions contemplated or evidenced hereby or thereby, or the Agent's
actions taken hereunder or thereunder, except to the extent that any of the same
shall be directly caused by the Agent's willful misconduct or gross negligence
or arises on account of a strictly internal administrative or regulatory matter
relating to the Agent (such as the Agent's legal lending limit) or related
solely to a dispute between the Agent and one or more of the Banks.
ss.8. Agent as Bank. In its individual capacity, FNBB shall have the
same obligations and the same rights, powers and privileges in respect to its
Commitment and the Loans made by it, and as the holder of any of the Notes as
it would have were it not also the Agent.
ss.9. Resignation. The Agent may resign at any time by giving 60
days' prior written notice thereof to the Banks and the Borrower. Upon any such
resignation, the Requisite Banks shall have the right to appoint as a successor
Agent any Bank or any bank whose senior debt obligations are rated not less than
"A" or its equivalent by Moody's Investors Service, Inc. or not less than "A" or
its equivalent by Standard & Poor's corporation and which has a net worth of not
less than $500,000,000. Unless a Default or Event of Default shall have occurred
and be continuing, such successor Agent shall be reasonably acceptable to the
Borrower. If no successor Agent shall have been
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so appointed by the Requisite Banks and shall have accepted such appointment
within 30 days after the retiring Agent's giving of notice of resignation, then
the retiring Agent may, on behalf of the Banks, appoint a successor Agent, which
shall be any Bank or a bank whose debt obligations are rated not less than "A"
or its equivalent by Moody's Investors Service, Inc. or not less than "A" or its
equivalent by Standard & Poor's Corporation and which has a net worth of not
less than $500,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
retiring Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder as Agent. After any retiring Agent's resignation, the
provisions of this Agreement and the other Loan Documents 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 Agent.
ss.10. Duties in the Case of Enforcement. In case one or more Events
of Default have occurred and shall be continuing, and whether or not
acceleration of the Obligations shall have occurred, the Agent shall, if (a) so
requested by the Requisite Banks and (b) the Banks have provided to the Agent
such additional indemnities and assurances against expenses and liabilities as
the Agent may reasonably request, proceed to enforce the provisions of the
Security Documents authorizing the sale or other disposition of all or any part
of the Collateral and exercise all or any such other legal and equitable and
other rights or remedies as it may have in respect of such Collateral. The
Requisite Banks may direct the Agent in writing as to the method and the extent
of any such sale or other disposition, the Banks hereby agreeing to indemnify
and hold the Agent harmless from all liabilities incurred in respect of all
actions taken or omitted in accordance with such directions, provided that the
Agent need not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to be unlawful or
commercially unreasonable in any applicable jurisdiction.
ss.15. EXPENSES.
The Borrower agrees to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the other agreements
and instruments mentioned herein (b) any taxes (including any interest and
penalties in respect thereto) payable by the Agent or any of the Banks (other
than taxes based upon the Agent's or any Bank's gross or net income, except that
the Agent and the Banks shall be entitled to indemnification for any and all
amounts paid by them in respect of taxes based on income or other taxes assessed
by any State in which Mortgaged Property or other Collateral is located, such
indemnification to be limited to taxes due solely on account of the granting of
Collateral under the Security Documents and to be net of any credit allowed to
the indemnified party from any other State on account of the payment or
incurrence of such tax by such indemnified party), including any recording,
mortgage, documentary or intangibles taxes in connection with the Security Deeds
and other Loan Documents, or other taxes payable on or with respect to the
transactions contemplated by this Agreement, including any such taxes payable by
the Agent or any of the Banks after the Closing Date (the Borrower hereby
agreeing to indemnify the Agent and each Bank with respect thereto), (c) all
title insurance premiums, appraisal fees, engineer's fees, reasonable internal
charges of the Agent (determined in good faith and in accordance with the
Agent's internal policies applicable generally to its customers) for commercial
finance exams and engineering and environmental reviews and the reasonable fees,
expenses and disbursements of the counsel to the Agent and any local counsel to
the Agent incurred in connection with the
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preparation, administration or interpretation of the Loan Documents and other
instruments mentioned herein (excluding, however, the preparation of agreements
evidencing participation granted under ss.18.4), each closing hereunder, and
amendments, modifications, approvals, consents or waivers hereto or hereunder,
(d) the reasonable fees, expenses and disbursements of the Agent incurred by the
Agent in connection with the preparation or interpretation of the Loan Documents
and other instruments mentioned herein, and the making of each advance
hereunder, (e) all reasonable out-of-pocket expenses (including reasonable
attorneys' fees and costs, which attorneys may be employees of any Bank or the
Agent and the fees and costs of appraisers, engineers, investment bankers or
other experts retained by any Bank or the Agent) incurred by any Bank or the
Agent in connection with (i) the enforcement of or preservation of rights under
any of the Loan Documents against the Borrower or the administration thereof
after the occurrence of a Default or Event of Default and (ii) any litigation,
proceeding or dispute whether arising hereunder or otherwise, in any way related
to the Agent's or any of the Bank's relationship with the Borrower, (f) all
reasonable fees, expenses and disbursements of any Bank or the Agent incurred in
connection with UCC searches, UCC filings, title rundowns, title searches or
mortgage recordings, and (g) all reasonable fees, expenses and disbursements
(including reasonable attorneys' fees and costs) which may be incurred by Agent
in connection with the execution and delivery of this Agreement and the other
Loan Documents. The covenants of this ss.15 shall survive payment or
satisfaction of payment of amounts owing with respect to the Notes.
ss.16. INDEMNIFICATION.
The Borrower agrees to indemnify and hold harmless the Agent and the
Banks and each director, officer. employee, agent and Person who controls the
Agent or any Bank from and against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all liabilities,
losses, damages and expenses of every nature and character arising out of or
relating to this Agreement or any of the other Loan Documents or the
transactions contemplated hereby and thereby including, without limitation, (a)
any leasing fees and any brokerage, finders or similar fees asserted against any
Person indemnified under this ss.16 based upon any agreement, arrangement or
action made or taken, or alleged to have been made or taken, by the Company, the
Borrower or any of its Subsidiaries, (b) any condition of the Mortgaged
Properties, (c) any actual or proposed use by the Borrower of the proceeds of
any of the Loans, (d) any actual or alleged infringement of any patent,
copyright, trademark, service mark or similar right of any of the Company, the
Borrower or any of its Subsidiaries comprised in the Collateral, (e) the Company
or the Borrower entering into or performing this Agreement or any of the other
Loan Documents, (f) any actual or alleged violation of any law, ordinance, code,
order, rule, regulation, approval, consent, permit or license relating to the
Mortgaged Property, or (g) with respect to the Borrower and its Subsidiaries and
their respective properties and assets, the violation of any Environmental Law,
the Release or threatened Release of any Hazardous Substances or any action,
suit, proceeding or investigation brought or threatened with respect to any
Hazardous Substances (including, but not limited to claims with respect to
wrongful death, personal injury or damage to property), in each case including,
without limitation, the reasonable fees and disbursements of counsel and
allocated costs of internal counsel incurred in connection with any such
investigation, litigation or other proceeding; provided, however, that the
Borrower shall not be obligated under this ss.16 to indemnify any Person for
liabilities arising from such Person's own gross negligence or willful
misconduct. In litigation, or the preparation therefor, the Banks and the Agent
shall be entitled to select a single nationally
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recognized law firm as their own counsel and, in addition to the foregoing
indemnity, the Borrower agrees to pay promptly the reasonable fees and expenses
of such counsel. If, and to the extent that the obligations of the Borrower
under this ss.16 are unenforceable for any reason, the Borrower hereby agrees to
make the maximum contribution to the payment in satisfaction of such obligations
which is permissible under applicable law. The provisions of this ss.16 shall
survive the repayment of the Loans and the termination of the obligations of the
Banks hereunder.
ss.17. SURVIVAL OF COVENANTS, ETC.
All covenants, agreements, representations and warranties made
herein, in the Notes, in any of the other Loan Documents or in any documents or
other papers delivered by or on behalf of the Company, the Borrower or any of
its Subsidiaries pursuant hereto or thereto shall be deemed to have been relied
upon by the Banks and the Agent, notwithstanding any investigation heretofore or
hereafter made by any of them, and shall survive the making by the Banks of any
of the Loans, as herein contemplated, and shall continue in full force and
effect so long as any amount due under this Agreement or the Notes or any of the
other Loan Documents remains outstanding or any Bank has any obligation to make
any Loans. The indemnification obligations of the Borrower provided herein and
the other Loan Documents shall survive the full repayment of amounts due and the
termination of the obligations of the Banks hereunder and thereunder to the
extent provided herein and therein. All statements contained in any certificate
or other paper delivered to any Bank or the Agent at any time by or on behalf of
the Company, the Borrower or any of its Subsidiaries pursuant hereto or in
connection with the transactions contemplated hereby shall constitute
representations and warranties by the such person hereunder.
ss.18. ASSIGNMENT AND PARTICIPATION.
ss.1. Conditions to Assignment by Banks. Except as provided herein,
each Bank may assign to one or more Eligible Assignees all or a portion of its
interests, rights and obligations under this Agreement (including all or a
portion of its Commitment Percentage and Commitment and the same portion of the
Loans at the time owing to it, and the Notes held by it); provided that (a) each
such assignment shall be of a constant, and not a varying, percentage of all the
assigning Bank's rights and obligations under this Agreement, (b) the parties to
such assignment shall execute and deliver to the Agent, for recording in the
Register (as hereinafter defined), a notice of such assignment, together with
any Notes subject to such assignment, (c) in no event shall any voting, consent
or approval rights of a Bank be assigned to any Person controlling, controlled
by or under common control with, or which is not otherwise free from influence
or control by, the Borrower, which rights shall instead be allocated pro rata
among the other remaining Banks, and (d) such Eligible Assignee shall acquire an
interest in the Loans of not less than $10,000,000. Upon execution, delivery and
acceptance of such notice of assignment, (i) the Eligible Assignee thereunder
shall be a party hereto and all other Loan Documents executed by the Banks and,
to the extent provided in such assignment, have the rights and obligations of a
Bank hereunder, and (ii) the assigning Bank shall, to the extent provided in
such assignment and upon payment to the Agent of the registration fee referred
to in ss.18.2, be released from its obligations under this Agreement. In
connection with each assignment, the Assignee shall represent and warrant to the
Agent, the assignor and each other Bank as to whether such Eligible Assignee is
controlling, controlled by, under common control with or is not otherwise free
from influence or control by, the Borrower.
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ss.2. Register. The Agent shall maintain a copy of each assignment
delivered to it and a register or similar list (the "Register") for the
recordation of the names and addresses of the Banks and the Commitment
Percentages of, and principal amount of the Loans owing to the Banks from time
to time. The entries in the Register shall be conclusive, in the absence of
manifest error, and the Borrower, the Agent and the Banks may treat each Person
whose name is recorded in the Register as a Bank hereunder for all purposes of
this Agreement. The Register shall be available for inspection by the Borrower
and the Banks at any reasonable time and from time to time upon reasonable prior
notice. Upon each such recordation, the assigning Bank agrees to pay to the
Agent a registration fee in the sum of $2,000.
ss.3. New Notes. Upon its receipt of an assignment executed by the
parties to such assignment, together with each Note subject to such assignment,
the Agent shall (a) record the information contained therein in the Register,
and (b) give prompt notice thereof to the Borrower and the Banks (other than the
assigning Bank). Within five Business Days after receipt of such notice, the
Borrower, at its own expense, shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of such assignee in
an amount equal to the amount assumed by such assignee pursuant to such
assignment and, if the assigning Bank has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Bank in an
amount equal to the amount retained by it hereunder. Such new Notes shall
provide that they are replacements for the surrendered Notes, shall be in an
aggregate principal amount equal to the aggregate principal amount of the
surrendered Notes, shall be dated the effective date of such assignment and
shall otherwise be in substantially the form of the assigned Notes. The
surrendered Notes shall be canceled and returned to the Borrower.
ss.4. Participations. Each Bank may sell participations to one or
more Eligible Participants or other entities in all or a portion of such Bank's
rights and obligations under this Agreement and the other Loan Documents;
provided that (a) any such sale or participation shall not affect the rights and
duties of the selling Bank hereunder to the Borrower, (b) such participation
shall not entitle such Eligible Participant to any rights or privileges under
this Agreement or any Loan Documents, including without limitation, the right to
approve waivers, amendments or modifications, (c) such Eligible Participant
shall have no direct rights against the Borrower except the rights granted to
the Banks pursuant to ss.13, (d) such sale is effected in accordance with all
applicable laws, and (e) such Eligible Participant shall not be a Person
controlling, controlled by or under common control with, or which is not
otherwise free from influence or control by the Borrower. Any Bank which sells a
participation shall promptly notify the Agent of such sale and the identity of
the purchaser of such interest.
ss.5. Pledge by Bank. Any Bank may at any time pledge all or any
portion of its interest and rights under this Agreement (including all or any
portion of its Note) to any of the twelve Federal Reserve Banks organized under
ss.4 of the Federal Reserve Act, 12 U.S.C. ss.341. No such pledge or the
enforcement thereof shall release the pledgor Bank from its obligations
hereunder or under any of the other Loan Documents.
ss.6. No Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Banks.
ss.7. Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard banking practices any Bank may
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disclose information obtained by such Bank pursuant to this Agreement to
assignees or participants and potential assignees or participants hereunder.
ss.8. Amendments to Loan Documents. Upon any such assignment or
participation, the Borrower shall, upon the request of the Agent, enter into
such documents as may be reasonably required by the Agent to modify the Loan
Documents to reflect such assignment or participation.
ss.9. Company and Borrower Acknowledgment of FBNA Becoming a Bank.
Each of the Company and the Borrower hereby acknowledges that (i) FBNA shall
become a Bank as of the Closing Date; (ii) neither the Company nor the Borrower
has any existing claim against the Agent, FNBB or BOA under the Prior Credit
Agreement or this Credit Agreement or any of the Loan Documents; (iii) neither
the Agent nor any Bank is in violation of, or in default under, any of the Loan
Documents and neither the Company nor the Borrower has knowledge of any facts or
circumstances that would give rise to a claim or right of offset by the Company
or the Borrower under any of the Loan Documents; (iv) each Bank's Commitment and
Commitment Percentage will, as of the Closing Date, be as set forth on Schedule
1 hereto, without the need for any further requirements or conditions being
satisfied; (v) upon the Closing Date FBNA shall be entitled to an undivided
interest to the extent of its Commitment and Commitment Percentage on a pari
passu basis with FNBB and BOA in and to the rights of the Banks with respect to
the Loans and the Loan Documents; and (vi) the outstanding principal balance of
the Loans as of December 26, 1996 was $38,302,367.50 and interest has been paid
through and including November 30, 1996.
ss.19. NOTICES.
Each notice, demand, election or request provided for or permitted to
be given pursuant to this Agreement (hereinafter in this ss.19 referred to as
"Notice"), but specifically excluding to the maximum extent permitted by law any
notices of the institution or commencement of foreclosure proceedings, must be
in writing and shall be deemed to have been properly given or served by personal
delivery or by sending same by overnight courier or by depositing same in the
United States Mail, postpaid and registered or certified, return receipt
requested, or as expressly permitted herein, by telegraph, telecopy, telefax or
telex, and addressed as follows:
If to the Agent or FNBB:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Department
With a copy to:
The First National Bank of Boston
115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Telecopy No.: (770) 390-8434
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and to:
Verrill & Dana
One Portland Square
P. O. Box 586
Portland, Maine 04112
Attn: James C. Palmer
Telecopy No.: (207)774-7499
If to BOA:
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Megan McBride, Real Estate Department
Telecopy No.: (312) 974-4970
If to FBNA:
First Bank National Association
701 Lee Street
Des Plaines, IL 60016-4554
Attn: Greg Warsek
Telecopy No.: (844)390-5698
If to the Borrower or to the Company:
Great Lakes REIT, Inc.
823 Commerce Drive
Oak Brook, Illinois 60521
Attn: Richard L. Rasley
Telecopy No. (630) 368-2929
With a copy to:
McBride, Baker & Coles
500 West Madison Street
40th Floor
Chicago, Illinois 60661
Attn: Anne Hamblin Schiave
Telecopy No.: (312) 993-9350
and to each other Bank which may hereafter become a party to this Agreement at
such address as may be designated by such Bank. Each Notice shall be effective
upon being personally delivered or upon being sent by overnight courier or upon
being deposited in the United States Mail as aforesaid. The time period in which
a response to such Notice must be given or any action taken with respect thereto
(if any), however, shall commence to run from the date of receipt if personally
delivered or sent by overnight courier, or if so deposited in the United States
Mail, the earlier of three (3) Business Days following such deposit or the date
of receipt as disclosed on the return receipt. Rejection or other refusal to
accept or the inability to deliver because of changed address for which no
notice was given shall be deemed to be receipt of the Notice sent. By giving at
least fifteen (15) days prior Notice thereof, the Borrower, the Company, a Bank
or Agent shall have the right from time to time and at any time during the term
of this Agreement to change their respective addresses and each shall have the
right to specify as its address any other address within the United States of
America.
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ss.20. RELATIONSHIP.
The relationship between each Bank and the Borrower is solely that of
a lender and borrower, and nothing contained herein or in any of the other Loan
Documents shall in any manner be construed as making the parties hereto
partners, joint venturers or any other relationship other than lender and
borrower.
ss.21. GOVERNING LAW; CONSENT TO JURISDICTION AND SERVICE.
THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS EXCEPT AS
OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS UNDER THE LAWS OF THE
STATE OF ILLINOIS AND SHALL FOR ALL PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND
GOVERNED BY THE LAWS OF SUCH STATE (EXCLUDING THE LAWS APPLICABLE TO CONFLICTS
OR CHOICE OF LAW). EACH OF THE COMPANY AND THE BORROWER AGREES THAT ANY SUIT FOR
THE ENFORCEMENT OF THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE
BROUGHT IN THE COURTS OF THE STATE OF ILLINOIS OR ANY FEDERAL COURT SITTING
THEREIN AND CONSENTS TO THE NONEXCLUSIVE JURISDICTION OF SUCH COURT AND THE
SERVICE OF PROCESS IN ANY SUCH SUIT BRING MADE UPON THE BORROWER OR THE COMPANY
BY MAIL AT THE ADDRESS SPECIFIED IN ss.19. EACH OF THE COMPANY AND THE BORROWER
HEREBY WAIVES ANY OBJECTION THAT IT MAY NOW OR HEREAFTER HAVE TO THE VENUE OF
ANY SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN INCONVENIENT
COURT.
ss.22. HEADINGS.
The captions in this Agreement are for convenience of reference only
and shall not define or limit the provisions hereof
ss.23. COUNTERPARTS.
This Agreement and any amendment hereof may be executed in several
counterparts and by each party on a separate counterpart, each of which when so
executed and delivered shall be an original and all of which together shall
constitute one instrument. In proving this Agreement it shall not be necessary
to produce or account for more than one such counterpart signed by the party
against whom enforcement is sought
ss.24. ENTIRE AGREEMENT. ETC.
The Loan Documents and any other documents executed in connection
herewith or therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby Neither this Agreement nor any
term hereof may be changed, waived, discharged or terminated, except as provided
in ss.27
ss.25. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS.
EACH OF THE BORROWER, THE COMPANY, THE AGENT AND THE BANKS HEREBY
WAIVES ITS RIGHT TO A JURY TRIAL WITH RESPECT TO ANY ACTION OR CLAIM ARISING OUT
OF ANY DISPUTE IN CONNECTION WITH THIS AGREEMENT, ANY NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER OR THE
PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS. EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY LAW, EACH OF THE COMPANY AND THE BORROWER HEREBY WAIVES ANY RIGHT
IT MAY HAVE TO CLAIM OR RECOVER IN ANY SUCH LITIGATION ANY SPECIAL, EXEMPLARY,
PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO,
ACTUAL DAMAGES. EACH OF THE BORROWER AND THE COMPANY
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(A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY BANK OR THE AGENT
HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH BANK OR THE AGENT WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGES THAT THE AGENT AND THE BANKS HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH THEY ARE PARTIES BY, AMONG OTHER
THINGS, THE WAIVERS AND CERTIFICATIONS CONTAINED IN THIS ss.25.
ss.26. DEALINGS WITH THE BORROWER.
The Banks and their affiliates may accept deposits from, extend
credit to and generally engage in any kind of banking, trust or other business
with the Company, the Borrower, its Subsidiaries or any of their affiliates
regardless of the capacity of the Bank hereunder.
ss.27. CONSENTS, AMENDMENTS, WAIVERS, ETC.
Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement may be given, and any term
of this Agreement or of any other instrument related hereto or mentioned herein
may be amended, and the performance or observance by the Borrower and the
Company of any terms of this Agreement or such other instrument or the
continuance of any Default or Event of Default may be waived (either generally
or in a particular instance and either retroactively or prospectively) with, but
only with, the written consent of the Requisite Banks. Notwithstanding the
foregoing, none of the following may occur without the written consent of each
Bank: a change in the rate of interest on and the term of the Notes; the amount
of the Commitments of the Banks; a reduction or waiver of the principal of any
unpaid Loan or any interest thereon; a reduction or waiver of the amount of any
fee (other than late fees) payable to a Bank hereunder; the release of the
Borrower, the Company or any Collateral except as otherwise provided herein; or
an amendment of the definition of Requisite Banks or of any requirement for
consent by all of the Banks. The amount of the Agent's fee payable for the
Agent's account and the provisions of ss.14 may not be amended without the
written consent of the Agent. The Borrower and the Company agree to enter into
such modifications or amendments of this Agreement or the other Loan Documents
as may be reasonably requested by FNBB in connection with the acquisition by
each Bank acquiring all or a portion of the Commitment, provided that no such
amendment or modification materially affects or increases any of the obligations
of the Borrower or the Company hereunder. No waiver shall extend to or affect
any obligation not expressly waived or impair any right consequent thereon. No
course of dealing or delay or omission on the part of the Agent or any Bank in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. No notice to or demand upon the Borrower or the Company
shall entitle the Borrower or the Company to other or further notice or demand
in similar or other circumstances.
ss.28. SEVERABILITY.
The provisions of this Agreement are severable, and if any one clause
or provision hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability shall affect only
such clause or provision, or part thereof, in such jurisdiction, and shall not
in any manner affect such clause or provision in any other jurisdiction, or any
other clause or provision of this Agreement in any jurisdiction.
ss.29. TIME OF THE ESSENCE.
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<PAGE>
Time is of the essence with respect to each and every covenant,
agreement and obligation of the Borrower and of the Company under this Agreement
and the other Loan Documents.
ss.30. NO UNWRITTEN AGREEMENTS.
THE WRITTEN LOAN DOCUMENTS REPRESENT THE FINAL AGREEMENT BETWEEN THE
PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR
SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO UNWRlTTEN ORAL
AGREEMENTS BETWEEN THE PARTIES. ANY ADDITIONAL TERMS OF THE AGREEMENT BETWEEN
THE PARTIES ARE SET FORTH BELOW.
[signature page follows]
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IN WITNESS WHEREOF, the undersigned have duly executed this Agreement
as a sealed instrument as of the date first set forth above.
GREAT LAKES REIT, L.P.
By its sole general partner:
GREAT LAKES REIT, INC.
By:_____________________________
Print Name:_____________________
Title:__________________________
GREAT LAKES REIT, INC.
By:_____________________________
Print
Name:________________________________
Title:_______________________________
THE FIRST NATIONAL BANK OF BOSTON,
individually and as Agent
By:_____________________________
Print
Name:________________________________
Title:_____________________________________
BANK OF AMERICA ILLINOIS
By:_____________________
Print Name:____________________________
Title:_____________________________________
FIRST BANK NATIONAL ASSOCIATION
By:____________________________
Print Name:______________________________
Title:_____________________________________
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EXHIBIT A
FORM OF NOTE
$__________ ____________, 1996
FOR VALUE RECEIVED, the undersigned GREAT LAKES REIT, L.P., a Delaware
limited partnership, hereby promises to pay to [Insert name of Bank] or order,
in accordance with the terms of that certain Amended and Restated Revolving
Credit Agreement dated as of December 27, 1996 (the "Credit Agreement"), as from
time to time in effect, among the undersigned, Great Lakes REIT, Inc., The First
National Bank of Boston, for itself and as Agent, and such other Banks as may be
from time to time named therein, to the extent not sooner paid, on or before the
Maturity Date, the principal sum of ______________________________ DOLLARS
($__________), or such amount as may be advanced by the payee hereof under the
Credit Agreement with daily interest from the date hereof, computed as provided
in the Credit Agreement, on the principal amount hereof from time to time
unpaid, at a rate per annum on each portion of the principal amount which shall
at all times be equal to the rate of interest applicable to such portion in
accordance with the Credit Agreement, and with interest on overdue principal
and, to the extent permitted by applicable law, on overdue installments of
interest and late charges at the rates provided in the Credit Agreement.
Interest shall be payable on the dates specified in the Credit Agreement, except
that all accrued interest shall be paid at the stated or accelerated maturity
hereof or upon the prepayment in full hereof. Capitalized terms used herein and
not otherwise defined herein shall have the meanings set forth in the Credit
Agreement.
Payments hereunder shall be made to The First National Bank of Boston,
as Agent for the payee hereof, 100 Federal Street, Boston, Massachusetts 02110.
This Note is one of one or more Notes evidencing borrowings under and
is entitled to the benefits and subject to the provisions of the Credit
Agreement. The principal of this Note may be due and payable in whole or in part
prior to the maturity date stated above and is subject to mandatory prepayment
in the amounts and under the circumstances set forth in the Credit Agreement,
and may be prepaid in whole or from time to time in part, all as set forth in
the Credit Agreement.
Notwithstanding anything in this Note to the contrary, all agreements
between the undersigned Borrower and the Banks and the Agent, whether now
existing or hereafter arising and whether written or oral, are hereby limited so
that in no contingency, whether by reason of acceleration of the maturity of any
of the Obligations or otherwise, shall the interest contracted for, charged or
received by the Banks exceed the maximum amount permissible under applicable
law. If, from any circumstance whatsoever, interest would otherwise be payable
to the Banks in excess of the maximum lawful amount, the interest payable to the
Banks shall be reduced to the maximum amount permitted under applicable law; and
if from any circumstance the Banks shall ever receive anything of value deemed
interest by applicable law in excess of the maximum lawful amount, an amount
equal to any excessive interest shall be applied to the reduction of the
principal balance of the Obligations of the undersigned Borrower and to the
payment of interest or, if such excessive interest exceeds the unpaid balance of
principal of the Obligations of the undersigned Borrower, such excess shall be
refunded to the undersigned Borrower. All interest paid or agreed to be paid to
the Banks shall, to the
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extent permitted by applicable law, be amortized, prorated, allocated and spread
throughout the full period until payment in full of the principal of the
Obligations of the undersigned Borrower (including the period of any renewal or
extension thereof) so that the interest thereon for such full period shall not
exceed the maximum amount permitted by applicable law. This paragraph shall
control all agreements between the undersigned Borrower and the Banks and the
Agent.
In case an Event of Default shall occur, the entire principal amount of
this Note may become or be declared due and payable in the manner and with the
effect provided in said Credit Agreement. In addition to and not in limitation
of the foregoing and the provisions of the Credit Agreement hereinabove defined,
the undersigned further agrees, subject only to any limitation imposed by
applicable law, to pay all expenses, including reasonable attorneys' fees and
legal expenses, incurred by the holder of this Note in endeavoring to collect
any amounts payable hereunder which are not paid when due, whether by
acceleration or otherwise.
This Note shall be governed by and construed in accordance with the
laws of the State of Illinois (without giving effect to the conflict of laws
rules of any jurisdiction).
The undersigned maker and all guarantors and endorsers, hereby waive
presentment, demand, notice, protest, notice of intention to accelerate the
indebtedness evidenced hereby, notice of acceleration of the indebtedness
evidenced hereby and all other demands and notices in connection with the
delivery, acceptance, performance and enforcement of this Note, except as
specifically otherwise provided in the Credit Agreement, and assent to
extensions of time of payment or forbearance or other indulgence without notice.
IN WITNESS WHEREOF the undersigned has by its duly authorized officers,
executed this Note under seal as of the day and year first above written.
GREAT LAKES REIT, L.P.
By its sole general partner:
GREAT LAKES REIT, INC.
By:____________________________________
Title:_________________________________
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EXHIBIT B
FORM OF REQUEST FOR LOAN
The First National Bank of Boston, as Agent 115 Perimeter Center Place, N.E.
Suite 500
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Ladies and Gentlemen:
Pursuant to the provisions of ss.2.5 of the Amended and Restated
Revolving Credit Agreement dated as of December 27, 1996, as from time to time
in effect (the "Credit Agreement"), among Great Lakes REIT, L.P. (the
"Borrower"), Great Lakes REIT, Inc. (the "Company"), The First National Bank of
Boston, for itself and as Agent and the other Banks from time to time party
thereto, the undersigned Borrower hereby requests and certifies as follows:
1. Loan. The undersigned Borrower hereby requests a Loan under ss.2.1
of the Credit Agreement:
Principal Amount: $
Type (LIBOR, Base Rate):
Drawdown Date: ____________, 19__
Interest Period:
by credit to the general account of the undersigned Borrower with the Agent at
the Agent's Head Office.
2. Use of Proceeds. Such Loan shall be used for the following
purposes permitted by ss.7.11 of the Credit Agreement:
[Describe]
3. Capital Improvement Project. In the event that such Loan relates to
any Capital Improvement Project or portion thereof, the undersigned Borrower
represents and warrants that such Loan will not exceed the limit on such Loans
set forth in ss.7.11 of the Credit Agreement and will reimburse the undersigned
Borrower for or pay costs incurred for work on the Capital Improvement Project
identified above, which work covered by this request is in place or is for
stored materials which are properly secured. Attached hereto are invoices,
receipts or other evidence satisfactory to the Agent to verify the cost of such
work [If requested by the Agent - Also attached hereto are affidavits, lien
waivers of other evidence reasonably satisfactory to the Agent showing that all
materialmen, laborers, subcontractors and any other parties who might or could
claim statutory or common law liens and are furnishing or have furnished
material or labor to the Mortgaged Property in connection with such Capital
Improvement Project have been paid all amounts due for such labor and
materials.]
4. Reimbursement. In the event that such Loan is requested to
reimburse the undersigned Borrower for amounts paid from its own funds for a
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purpose authorized by the terms of ss.7.11 of the Credit Agreement, such funds
were used within ninety (90) days of the date of this Loan Request. [Also
attached hereto is evidence reasonably satisfactory to the Agent showing the
date on which and purpose for which the undersigned Borrower's funds were used.]
5. No Default. The undersigned chief financial or chief accounting
officer of the Company certifies on behalf of the Borrower that the Borrower is
and will be in compliance with all covenants under the Loan Documents after
giving effect to the making of the Loan requested hereby. Attached to this
Request for Loan is a Compliance Certificate prepared using the financial
statements of the Borrower (or of the Company for periods commencing prior to
January 1, 1997) most recently provided or required to be provided under ss.6.4
or ss.7.4 of the Credit Agreement adjusted in the best good-faith estimate of
the Borrower to give effect to the making of the Loan requested hereby. No
condemnation proceedings are pending as to the undersigned Borrower's knowledge
threatened against any Mortgaged Property.
6. Representations True. Each of the representations and warranties
made by or on behalf of the Company, the Borrower, and its Subsidiaries
contained in the Credit Agreement, in the other Loan Documents or in any
document or instrument delivered pursuant to or in connection with the Credit
Agreement was true as of the date as of which it was made and shall also be true
at and as of the Drawdown Date for the Loan requested hereby, with the same
effect as if made at and as o(pound) such Drawdown Date (except to the extent of
changes resulting from transactions contemplated or permitted by the Credit
Agreement and the other Loan Documents and changes occurring in the ordinary
course of business that singly or in the aggregate are not materially adverse,
and except to the extent that such representations and warranties relate
expressly to an earlier date) and no Default or Event of Default has occurred
and is continuing.
7. Other Conditions. All other conditions to the making of the Loan
requested hereby set forth in ss.11 of the Credit Agreement have been satisfied.
(Reference title insurance "date down", if applicable.)
8. Drawdown Date. Except to the extent, if any, specified by notice
actually received by the Agent prior to the Drawdown Date specified above, the
foregoing representations and warranties shall be deemed to have been made by
the Borrower on and as of such Drawdown Date.
9. Definitions. Terms defined in the Credit Agreement are used
herein with the meanings so defined.
IN WITNESS WHEREOF, we have hereunto set our hands this ____ day of
_________, 199_.
GREAT LAKES REIT, L.P.
By its sole general partner,
GREAT LAKES REIT, INC.
By:____________________________________
Title:__________________________________
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EXHIBIT C
FORM OF
COMPLIANCE CERTIFICATE
The First National Bank of Boston, First Bank National Association
for itself and as Agent 701 Lee Street
115 Perimeter Center Place, N.E. Des Plaines, IL 60016-4554
Suite 500 Attn: Greg Warsek
Atlanta, Georgia 30346
Attn: Lori Y. Litow
Bank of America Illinois
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Andy Hensel, Real Estate Department
Ladies and Gentlemen:
Reference is made to the Amended and Restated Revolving Credit
Agreement dated as of December 27, 1996 (the "Credit Agreement") by and among
Great Lakes REIT, L.P. (the "Borrower"), Great Lakes REIT, Inc. (the "Company"),
The First National Bank of Boston, for itself and as Agent, Bank of America
Illinois, First Bank National Association and the other Banks from time to time
party thereto. Terms defined in the Credit Agreement and not otherwise defined
herein are used herein as defined in the Credit Agreement.
Pursuant to the Credit Agreement, the Borrower is furnishing to you
herewith (or have most recently furnished to you) the financial statements of
the Borrower and its Subsidiaries (or of the Company for periods commencing
prior to January 1, 1997) for the fiscal period ended ________________________
(the "Balance Sheet Date"). Such financial statements have been prepared in
accordance with generally accepted accounting principles and present fairly the
financial position of the Borrower (or of the Company for periods commencing
prior to January 1, 1997) and the Subsidiaries covered thereby at the date
thereof and the results of their operations for the periods covered thereby,
subject in the case of interim statements only to normal year-end audit
adjustments.
This certificate is submitted in compliance with requirements of
ss.7.4(h), ss.7.5(e), ss.8.1(f), ss.8.8 or ss.10.14 of the Credit Agreement. If
this certificate is provided under a provision other than ss.7.4(e), the
calculations provided below are made using the financial statements of the
Borrower and its Subsidiaries as of the Balance Sheet Date adjusted in the best
good-faith estimate of the Borrower to give effect to the making of a Loan,
acquisition or disposition of property, incurrence of Indebtedness or other
event that occasions the preparation of this certificate; and the nature of such
event and the Borrower's estimate of its effects are set forth in reasonable
detail in an attachment hereto. The undersigned officer of the Borrower is its
chief financial or chief accounting officer.
The undersigned officers have caused the provisions of the Loan
Documents to be reviewed and have no knowledge of any Default or Event of
Default. (Note: If the signers do have knowledge of any Default or Event of
Default, the form of certificate should be revised to specify the Default or
Event of Default, the nature thereof and the actions taken, being taken or
proposed to be taken by the Borrower with respect thereto.)
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<PAGE>
The Borrower is providing the attached information to demonstrate
compliance as of the date hereof with the covenants described in the attachment
hereto.
IN WITNESS WHEREOF, we have hereunto set our hands this ____ day of
_________, 199_.
GREAT LAKES REIT, L.P.
y its sole general partner:
GREAT LAKES REIT, INC.
By:____________________________________
Title:__________________________________
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<PAGE>
APPENDIX A
to
COMPLIANCE CERTIFICATE
A. Outstanding Loans cannot exceed the Borrowing Base (Section 9.1 )
1. Outstanding principal balance of the Loans:
2. Approved Appraised Value:
3. Line 2 X 60%:
4. Line 3 must be > than or = to line 1.
B. Company Leverage cannot exceed 55% (Section 9.2)
1. Consolidated Total Liabilities:
2. Total GAAP Assets:
3. Accumulated Depreciation:
4. Consolidated Total Adjusted Asset Value:
(line 2 plus line 3)
5. Company Leverage:
(line l divided by line 4):
6. Line 5 cannot exceed .55.
C. Company Debt Service Coverage must exceed 2.0X - rolling 4Q's (Section
9.3)
1. Net Income:
2. Depreciation & Amortization:
3. Interest Expense:
4. Extraordinary/Non-recurring losses:
5. Extraordinary/Non-recurring gains:
6. CapX Reserve Amount ($ .50 psf):
7. Operating Cash Flow:
(Lines 1+2+3+4-5-6)
8. Debt Service:
9. DSC Ratio:
(line 7 divided by line 8)
10. Line 9 must exceed 2.0.
D. Minimum Consolidated Tangible Net Worth (Section 9.4)
1. Consolidated Total Adjusted Asset Value:
(Line B.4)
2. Consolidated Total Liabilities:
3. Initial Consolidated Tangible Net Worth:
(Line 1 minus Line 2)
4. Net Offering Proceeds from offerings after April 12, 1996:
5. 75% of line 4:
6. Minimum Consolidated Tangible Net Worth:
($40,000,000 + line 5)
7. Line 3 must be > than or = to line 6.
E. Mortgaged Property Operating Net Income (Section 9.5)
1. NOI of existing Mortgaged Properties - Rolling 4Q's:
2. NOI of new properties added during Q (annualized):
3. CapX Reserve ($ .50 psf):
4. OCF of all Mortgaged Properties:
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(line 1 + line 2 - line 3)
5. Loan Amount Outstanding at QE:
6. Actual Interest Rate:
7. 10-Year Treasury+2%:
8. Applicable Interest Rate (the > of line 6 or 7):
9. Annual P&I payment using 20-yr amortization:
10. Mortgaged Property DSC Ratio:
(line 4 divided by line 9)
11. Line 10 must exceed 1.5.
F. Distributions cannot exceed 90% of Funds From Operations (Section
8.7(a))
1. Current Quarter Distributions:
2. Prior 3 Quarters Distributions:
3. Total Distributions last 4Q's:
4. Funds from Operations for last 4Q's:
5. Distributions to Funds from Operations Ratio:
(line 3 divided by line 4)
6. Line 5 cannot exceed .90.
G. Liquidation Value of Portfolio
NOI stabilized income properties at __________:
NOI capped at 10.5%
List Additional new Properties at Cost:
TOTAL PROPERTY VALUE
Cash & Equivalents
Receivables & Other Assets
TOTAL ASSET VALUE:
Mortgages & Line of Credit
Other Liabilities
TOTAL LIABILITIES:
LIQUIDATED PORTFOLIO VALUE:
Shares Outstanding
Liquidation Value per Share:
H. Development Projects. Set forth below is a description of the status of
all development projects (as defined in ss.8.9) presently in process:
Project Location Sq. Ft. Total Project Cost Start Date
Expected Completion
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SCHEDULE 1
BANKS AND COMMITMENTS
Commitment
Commitment Percentage
The First National Bank of Boston $30,000,000.00 40.00%
100 Federal Street
Boston, Massachusetts 02110
Attn: Real Estate Department
LIBOR Lending Office
Same as above
Bank of America Illinois $25,000,000.00 33.33%
231 South LaSalle Street
Chicago, Illinois 60697
Attn: Real Estate Division
LIBOR Lending Office
Same as above
First Bank National Association $20,000,000.00 26.67%
701 Lee Street
Des Plaines, IL 60016-4554
Attn: Greg Warsek
LIBOR Lending Office
Same as above _____________ ______
$75,000,000.00 100.0%
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SCHEDULE 6.15
AFFILIATE TRANSACTIONS
1. Stock Option Agreement dated July 2, 1992 with respect to Independent
Directors.
2. Stock Option Agreement dated July 2, 1992 (currently effects employees
of Great Lakes REIT, Inc. who were formerly employees of Equity Partners Ltd.)
3. Indemnification Agreement dated April 1, 1996 from the former
shareholders of Equity Partners Ltd. including Richard A. May and Richard L.
Rasley to Great Lakes REIT, Inc. regarding certain activities of Equity Partners
Ltd. prior to the merger.
4. Restricted Stock Agreements dated April 1, 1996 between Great Lakes
REIT, Inc. and the following employees of Great Lakes REIT, Inc.:
Richard L. Rasley, James Hicks, Edith M. Scurto, Raymond M. Braun and
Brett A. Brown.
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SCHEDULE 6.19
SUBSIDIARIES OF THE BORROWER
1. GLR No. 1, Inc., an Illinois corporation, was formed by the Borrower to
assume the general partnership interest of Equity Partners Ltd. in JMG
Fox Valley Limited Partnership in conjunction with the merger of Equity
Partners Ltd. and the Borrower. The Borrower owns 100% of the stock of
GLR No. 1, Inc.
2. GLR No. 2, Inc., an Illinois corporation was formed by the Borrower to
assume the general partnership interest of Equity Partners Ltd. in JMG Court
Office Limited Partnership in connection with the merger of Equity Partners Ltd.
and the Borrower. The Borrower owns 100% of the stock of GLR No. 2, Inc.
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SCHEDULE 6.22
AGREEMENTS
NONE.
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SCHEDULE 8.1
INDEBTEDNESS
<TABLE>
<CAPTION>
Committed Outstanding
Lender Amount Indebtedness
<S> <C> <C>
1. Great Northern Insured Annuity Corporation $862,041.00 $827,139.00
2. Calumet Federal Savings and Loan Association 1,470,610.00 1,410,208.00
of Chicago
3. Firstar Bank Milwaukee, N.A., as servicing agent 1,201,228.00 1,175,080.00
for Catholic Knights Insurance Society
4. General American Life Insurance Company 2,154,697.00 2,069,790.00
5. American National Bank and Trust Company 5,000,000.00 -0-
of Chicago
6. General American Life Insurance Company 2,494,780.00 2,437,894.00
7. General American Life Insurance Company 2,810,474.00 2,699,726.00
8. American Family Life Insurance Company 3,394,224.00 3,355,652.00
9. Heritage Bank 3,207,377.00 3,150,319.00
10. First Bank National Association 5,420,000.00
5,235,000.00
</TABLE>
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SCHEDULE 8.2
LIENS
Real and Personal Encumbrance
Property Location Amount Lender(s)
1. 11100 Hampshire Avenue $940,000 Great Northern Insured Annuity
Corporation
Bloomington, MN
2. 601 Campus Drive 1,600,000 Calumet Federal Savings & Loan
Arlington Heights, IL Association of Chicago
3. 11925 West Lake Park Drive 1,260,000 Firstar Bank Milwaukee, N.A.,
as servicing agent for
Milwaukee, WI agent for
Catholic Knights Insurance
Society
4. 3400 Dundee Road 2,300,000 General American Life Insurance
Company
Northbrook, IL 5,000,000 American National Bank and Trust
Company of Chicago
5. 1011 Touhy Avenue 2,675,000 General American Life Insurance
Company
Des Plaines, IL 5,000,000 American National Bank and Trust
Company of Chicago
6. 160-185 Hansen Court 3,000,000 General American Life Insurance
Company
Wood Dale, IL 5,000,000 American National Bank and Trust
Company of Chicago
7. 150, 175, 250 Patrick Blvd. 3,500,000 American Family Life Insurance
Company
Brookfield, WI
8. 175 Hawthorn Parkway 3,250,000 Heritage Bank
Vernon Hills, IL 5,000,000 American National Bank and Trust
Company of Chicago
9. 2221 University Avenue S.E. 5,676,576 First Bank National Association
Minneapolis, MN
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Schedule 8.10
PARTNERSHIP INTERESTS OWNED BY THE COMPANY
General Partnership Interest in JMG Court Officenter Limited Partnership
(2.5%) owned by GLR No. 2, Inc.
General Partnership Interest in JMG Fox Valley Limited Partnership (2.5%)
owned by GLR No. 1, Inc.
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<PAGE>
AGREEMENT OF LIMITED PARTNERSHIP OF GREAT LAKES REIT, L.P.
THIS AGREEMENT of Limited Partnership of Great Lakes REIT, L.P. (this
"Agreement"), is entered into by and between GLR No. 3, a Maryland business
trust, as general partner (the "General Partner") and Great Lakes REIT, Inc., a
Maryland corporation, as limited partner (the "Initial Limited Partner").
The General Partner and the Initial Limited Partner (collectively, the
"Partners") hereby form a limited partnership pursuant to and in accordance with
the Delaware Revised Uniform Limited Partnership Act, as amended from time to
time (the "Act"), and hereby agree as follows:
1. Name. The name of the limited partnership formed hereby is Great Lakes
REIT, L.P. (the "Partnership").
2. Purpose. The Partnership is formed for the purpose of, and the nature of
the business to be conducted and promoted by the Partnership is, engaging in any
lawful act or activity for which limited partnerships may be formed under the
Act and engaging in any and all activities necessary or incidental to the
foregoing.
3. Registered Office. The address of the registered office of the
Partnership in the State of Delaware is c/o The Corporation Trust Company, 1209
Orange Street, New Castle County, Wilmington, Delaware 19801.
4. Registered Agent. The name and address of the registered agent of the
Partnership for service of process of the Partnership in the State of Delaware
is The Corporation Trust Company, 1209 Orange Street, New Castle County,
Wilmington, Delaware 19801.
5. Partners. The names and the business addresses of the Partners are as
follows:
General Partner:
GLR No. 3
823 Commerce Drive
Oak Brook, Illinois 60521
Initial Limited Partner:
Great Lakes REIT, Inc.
823 Commerce Drive
Oak Brook, Illinois 60521
6. Powers. The powers of the General Partner include all powers,
statutory and otherwise, possessed by general partners under the laws of the
State of Delaware.
7. Dissolution. The Partnership shall dissolve, and its affairs shall
be wound up, on December 31, 2046, or at such earlier time as: (a) all of the
Partners approve in writing, (b) an event of withdrawal of a general partner has
occurred under the Act, or (c) an entry of a decree of judicial dissolution has
occurred under Section 17-802 of the Act; provided, however, the Partnership
shall not be dissolved or required to be wound up upon an event of withdrawal of
the general partner described in Section 7(b) if (i) at the time of such event
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of withdrawal, there is a least one (1) other general partner of the Partnership
who carries on the business of the Partnership (any remaining general partner
being hereby authorized to carry on the business of the Partnership), or (ii)
within ninety (90) days after the occurrence of such event of withdrawal, all
remaining partners agree in writing to continue the business of the Partnership
and to the appointment, effective as of the date of the event of withdrawal, of
one or more additional general partners of the Partnership.
8. Initial Capital Contributions. The Partners have contributed the
following amounts, in cash, and no other property, to the capital of the
Partnership
(a) General Partner: $10;
(b) Initial Limited Partner: $990.
9. Additional Capital Contributions. The Partners may make additional
capital contributions to the Partnership from time to time in cash or property,
in such amounts as they shall mutually agree, provided that the general partners
shall at all times maintain an aggregate capital account balance equal to not
less than one percent (1%) of the positive capital account balances of all
partners. Except as provided herein, no Partner is required to make any
additional capital contribution to the Partnership.
10. Allocation of Profits and Losses. The Partnership's profits and
losses shall be allocated in proportion to the capital contributions of the
Partners, provided that the general partners shall have an aggregate interest in
the profits and losses of the Partnership that is not less than one percent
(1%).
11. Distributions. Distributions shall be made to the Partners at the times
and in the aggregate amounts determined by the General Partner. Such
distributions shall be allocated among the Partners in the same proportion as
their then capital account balances.
12. Assignments. No Partner may assign all or any part of its interest in
the Partnership.
13. Withdrawal. No Partner shall have any right to withdraw from the
Partnership.
14. Admission of Additional or Substitute Partners.
(a) One (1) or more additional limited partners of the
Partnership may be admitted to the Partnership with only the consent of the
General Partner.
(b) One (1) or more additional general partners of the Partnership may be
admitted to the Partnership with the consent of all of the Partners.
15. Liability of Initial Limited Partner. No limited partner shall have any
liability for the obligations or liabilities of the Partnership except to the
extent provided in the Act.
16. Indemnification. The Partnership shall indemnify, defend and hold
harmless any general partner, any officer, trustee, director, beneficiary,
shareholder agent or employee of a general partner, or any other person acting
on behalf, or in furtherance of the interests, of the Partnership, to the
fullest extent permitted under applicable law.
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17. Amendment. This Agreement may be amended from time to time with the
consent of all of the Partners.
18. Governing Law. This Agreement shall be governed by, and construed
under, the laws of the State of Delaware, all rights and remedies being governed
by said laws.
IN WITNESS WHEREOF, the undersigned, intending to be legally bound
hereby, have duly executed this Agreement of Limited Partnership as of the 27th
day of September, 1996.
GENERAL PARTNER:
GLR No. 3
By: /s/ Richard A. May
Its: Trustee
INITIAL LIMITED PARTNER:
Great Lakes REIT, Inc.
By: /s/ Richard A. May
Its: President
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AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GREAT LAKES REIT, L.P.
THIS AMENDED AND RESTATED AGREEMENT OF LIMITED PARTNERSHIP is made and
entered into as of the 19th day of December, 1996, by and between Great Lakes
REIT, Inc., a Maryland corporation, as General Partner, and GLR No. 3, a
Maryland business trust, as a Limited Partner.
W I T N E S S E T H:
WHEREAS, the parties hereto have formed a limited partnership, pursuant
to the Delaware Revised Uniform Limited Partnership Act, under the name of
"Great Lakes REIT, L.P.", by filing with the Secretary of State of Delaware on
October 1, 1996, a Certificate of Limited Partnership dated September 27, 1996
(the "Original Certificate") and entering into an Agreement of Limited
Partnership, dated as of September 27, 1996 (the "Original Partnership
Agreement"); and
WHEREAS, the parties hereto desire to continue the existence of the
partnership and to amend and restate the Original Partnership Agreement so that
the business and affairs of the partnership will be conducted in accordance with
the terms and conditions of this Agreement, as it may be amended from time to
time;
NOW THEREFORE, in consideration of the mutual covenants of the parties
hereto, and for other good and valuable consideration, the receipt and
sufficiency of which is hereby acknowledged, the parties hereby agree that the
Original Partnership Agreement is hereby restated and amended in its entirety as
follows:
ARTICLE I
DEFINED TERMS
Section 1.1 Definitions
(a) As used throughout this Agreement:
(1) "Act" shall mean the Delaware Revised Uniform Limited Partnership Act,
as the same may be amended from time to time, and any successor to that statute.
(2) "Adjusted Capital Account Deficit" means, with respect to any Partner,
the deficit balance, if any, in such Partner's Capital Account as of the end of
the relevant fiscal year, after giving effect to the following adjustments:
(a) Credit to such Capital Account (i) all amounts that such Partner is
obligated to restore, or is deemed to be obligated to restore, pursuant to any
provision of this Agreement, Regulations ss.1.704-1(b)(2)(ii)(c) or (ii)(h), or
any other provision of the Regulations; (ii) the Partner's share of Partnership
Minimum Gain, if any, and (iii) the Partner's share of Partner Minimum Gain, if
any; and
(b) Debit to such Capital Account the items described in Regulations
ss.1.704-1(b)(2)(ii)(d)(4) through (d)(6).
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The foregoing definition of Adjusted Capital Account Deficit is intended to
comply with the provisions of Regulations ss.1.704-1(b)(2)(ii)(d) and shall be
interpreted consistently therewith.
(3) "Administrative Expenses" shall mean (a) all administrative and
operating costs and expenses incurred by the Partnership, (b) those
administrative, operating, and other costs and expenses of the Company, the
General Partner (if different than the Company), and their respective
Subsidiaries, if any, including salaries paid to their respective officers and
employees, and accounting, legal and other professional expenses, undertaken on
behalf or for the benefit of the Partnership, and (c) to the extent not included
in clause (b), REIT Expenses.
(4) "Affiliate" means, with respect to any Person, (a) any Person directly
or indirectly controlling, controlled by or under common control with such
Person, (b) any Person owning (except for ownership that arises out of that
Person's engagement as an underwriter in a securities offering) or controlling
ten percent (10%) or more of the outstanding voting interests of such Person;
(c) any Person of which such Person owns (except for ownership that arises out
of that Person's engagement as an underwriter in a securities offering) or
controls ten percent (10%) or more of the voting interests, or (d) any officer,
director, general partner or trustee of such Person or of any Person referred to
in clauses (a), (b), or (c) above.
(5) "Affiliate Financing" shall mean financing or refinancing obtained from
a Partner or an Affiliate of a Partner by the Partnership.
(6) "Agreed Value" means (a) in the case of any property contributed to the
Partnership as of the time of its contribution to the Partnership, the Gross
Asset Value of such property, reduced by any liabilities either assumed by the
Partnership upon such contribution or to which such property is subject when
contributed, as determined under Code ss.752 and the Regulations thereunder, and
(b) in the case of any property distributed to a Partner by the Partnership, the
Partnership's Gross Asset Value of such property at the time such property is
distributed, reduced by any indebtedness either assumed by such Partner upon
such distribution or to which such property is subject at the time of
distribution as determined under Code ss.752 and the Regulations thereunder. The
aggregate Agreed Value of the property contributed or deemed contributed by each
Partner as of the date hereof is as set forth in Exhibit A.
(7) "Agreement" means this Amended and Restated Agreement of Limited
Partnership, as it may be amended, supplemented or restated from time to time.
(8) "Assignee" means a Person to whom Partnership Interests have been
transferred in a manner permitted under this Agreement, but who has not become a
Substituted Limited Partner.
(9) "Available Cash Flow" means, with respect to any period for which such
calculation is being made, (a) all cash received by the Partnership from any
source (including borrowings by the Partnership, cash Capital Contributions and
proceeds of the sale, exchange or other disposition of all or portions of the
Partnership assets) and any cash released from working capital, capital
replacement, debt repayment or other reserves, less (b) all cash expended,
reserved or required by the Partnership for (i) debts and expenses, interest and
principal payments on any indebtedness, capital expenditures, taxes, fees, (ii)
investments in the acquisition, development, construction, expansion or
redevelopment of real estate or personal property appurtenant thereto, or
entities which hold direct or indirect interests in real estate or such personal
property, or (iii) other requirements of the Partnership, in each case as
reasonably determined by the General Partner. Notwithstanding the foregoing,
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Available Cash Flow shall not include any cash received or reductions in
reserves, or take into account any disbursements made or reserves established,
after commencement of or incident to the dissolution and liquidation of the
Partnership.
(10) "Capital Contribution" means, with respect to any Partner, any cash,
cash equivalents or the Agreed Value of property which such Partner contributes
or is deemed to contribute to the Partnership pursuant to Sections 4.1, 4.2, or
4.3 hereof.
(11) "Cash Amount" means an amount as of the Valuation Date equal to the
product of (a) the Current Per Share Market Price, multiplied by (b) the number
of Partnership Units that are the subject of the Redeeming Partner's Notice of
Redemption, multiplied by (c) the Conversion Factor.
(12) "Certificate" means the Amended and Restated Certificate of Limited
Partnership relating to the Partnership filed in the office of the Delaware
Secretary of State, as amended or restated from time to time in accordance with
the terms hereof and the Act.
(13) "Closing Price" on any date shall be determined as follows:
(a) if the Company Shares are listed or admitted to
trading on any securities exchange or the NASDAQ-National Market
System, the closing price of a Company Share, regular way, on such day,
or if no such sale takes place on such day, the average of the closing
bid and asked prices on such day;
(b) if the Company Shares are not listed or admitted
to trading on any securities exchange or the NASDAQ-National Market
System, the last reported sale price on such day of a Company Share or,
if no sale takes place on such day, the average of the closing bid and
asked prices on such day, as reported by a reliable quotation source
designated by the General Partner; or
(c) if the Company Shares are not listed or admitted
to trading on any securities exchange or the NASDAQ-National Market
System and no such last reported sale price or closing bid and asked
prices are available, the average of the reported high bid and low
asked prices of a Company Share on such day, as reported by a reliable
quotation source designated by the General Partner, or if there shall
be no bid and asked prices on such day, the average of the high bid and
low asked prices, as so reported, on the most recent day (not more than
ten (10) Trading Days prior to the date in question) for which prices
have been so reported; provided that if there are no bid and asked
prices reported during the ten (10) Trading Days prior to the date in
question, the daily market price of a Company Share shall be determined
by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable
judgment, appropriate. In addition, if the Company Shares Amount
includes any Rights that a holder of Company Shares would be entitled
to receive, then the Closing Price of such Rights shall be determined
by the General Partner acting in good faith on the basis of such
quotations and other information as it considers, in its reasonable
judgment, appropriate.
(14) "Code" means the Internal Revenue Code of 1986, as amended and in
effect from time to time, as interpreted by the applicable Regulations
thereunder. Any
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reference herein to a specific section or sections of the Code shall be deemed
to include a reference to any corresponding provision of future law.
(15) "Company" means Great Lakes REIT, Inc., a Maryland corporation, or its
successor(s).
(16) "Company Share" shall mean a share of common stock of the Company, or
if the Company is not a corporation, a nonpreferential unit of equity ownership
in the Company, including without limitation, any share of nonpreferential
capital stock or unit of equity ownership issued to, or deemed to be held by, a
Person because the Person has exceeded certain ownership limitations that must
be satisfied for the Company to maintain its status as a REIT for federal income
tax purposes.
(17) "Company Shares Amount" shall mean a number of Company Shares equal to
the product of the number of Partnership Units offered for redemption by a
Redeeming Partner, multiplied by the Conversion Factor, provided that in the
event the Company issues to all holders of Company Shares rights, options,
warrants or convertible or exchangeable securities entitling all of its
shareholders to subscribe for or purchase Company Shares, or any other
securities or property (collectively, the "Rights"), then the Company Shares
Amount shall also include such Rights that a holder of that number of Company
Shares would be entitled to receive.
(18) "Conversion Factor" means 1.0; provided however, that in the event
that the Company (a) declares or pays a dividend on its outstanding Company
Shares in Company Shares or makes a distribution to all holders of its
outstanding Company Shares in Company Shares, (b) subdivides its outstanding
Company Shares, or (c) combines its outstanding Company Shares into a smaller
number of Company Shares, the Conversion Factor shall be adjusted by multiplying
the Conversion Factor then in effect by a fraction, the numerator of which shall
be the number of Company Shares issued and outstanding on the record date for
such dividend, distribution, subdivision or combination, assuming for such
purpose that such dividend, distribution subdivision or combination has occurred
as of such time, and the denominator of which shall be the actual number of
Company Shares (determined without the above assumption) issued and outstanding
on the record date for such dividend, distribution, subdivision or combination.
Any adjustment to the Conversion Factor shall become effective immediately after
the effective date of such event, retroactive to the record date, if any, for
such event.
(19) "Current Per Share Market Price" shall mean, on any date, the average
of the Closing Prices for the ten (10) consecutive Trading Days ending on such
date.
(20) "Deemed Partnership Unit Value" shall mean, as of any date, the
quotient of (a) the Current Per Share Market Price as of the Trading Day
immediately preceding such date, divided by (b) the Conversion Factor.
(21) "Depreciation" means, for each fiscal year of the Partnership or other
period, an amount equal to the depreciation, amortization, or other cost
recovery deduction allowable with respect to an asset for such year or other
period, except that if the Gross Asset Value of the asset differs from its
adjusted basis for federal income tax purposes at the beginning of such year or
other period, Depreciation shall be an amount that bears the same ratio to such
beginning Gross Asset Value as the federal income tax depreciation,
amortization, or other cost recovery deduction for such year or other period
bears to such beginning adjusted tax basis; provided, however, that if the
federal income tax depreciation, amortization, or other cost recovery deduction
for such year is zero, Depreciation shall be determined with reference to such
beginning Gross Asset Value using any reasonable method selected by the General
Partner.
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(22) "Effective Date of Transfer" means: (a) the first day of the month in
which a Partnership Interest is Transferred to an Assignee or Substituted
Limited Partner in a manner permitted under this Agreement, or issued to an
Additional Limited Partner in a manner permitted under this Agreement, if such
Transfer or issuance occurred on or prior to the fifteenth day of the month; (b)
the first day of the month immediately following the month in which the Transfer
occurred if such Transfer or issuance occurred after the fifteenth day of the
month; or (c) another date determined by the General Partner as it may deem
administratively feasible and consistent with applicable law.
(23) "ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time and as interpreted by the applicable regulations
thereunder, or any corresponding provisions of succeeding law.
(24) "General Partner" shall mean Great Lakes REIT, Inc., a Maryland
corporation, and any other Person who is admitted as a successor general partner
of the Partnership at the time of reference thereto.
(25) "General Partner Interest" means all Partnership Units, Preferred
Units and any other Partnership Interests held by the General Partner, in its
capacity as a general partner of the Partnership.
(26) "Gross Asset Value" means, with respect to any asset, the asset's
adjusted basis for federal income tax purposes, except as follows:
(a) The initial Gross Asset Value of an asset
contributed by a Partner to the Partnership shall be the gross fair
market value of the asset on the date of contribution, as determined by
the General Partner;
(b) The Gross Asset Values of all Partnership assets
shall be adjusted to equal their respective gross fair market values,
as determined by the General Partner, as of the following times: (i)
the acquisition of additional Partnership Interests by any new or
existing Partner in exchange for more than a de minimis Capital
Contribution; (ii) the distribution by the Partnership to a Partner of
more than a de minimis amount of property as consideration for a
Partnership Interest; and (iii) the liquidation of the Partnership
within the meaning of Regulations ss.1.704-1(b)(2)(ii)(g); provided,
however, that adjustments pursuant to subclauses (i) and (ii) of this
clause shall be made only if the General Partner reasonably determines
that such adjustments are necessary or appropriate to reflect the
relative economic interests of the Partners; and
(c) The Gross Asset Value of a Partnership asset
distributed to any Partner shall be the gross fair market value of the
asset on the date of distribution, as determined by the General
Partner.
If the Gross Asset Value of an asset has been determined or adjusted pursuant to
clause (a) or (b) of this definition, the such Gross Asset Value thereafter
shall be adjusted by the Depreciation taken into account with respect to such
asset for purposes of computing Profits and Losses.
(27) "Immediate Family" shall mean, with respect to any Person who is an
individual, such Person's spouse, parents, grandparents, descendants, brothers,
or sisters, whether such relationship is achieved by blood or adoption.
(28) "Interest Holders" means any Person who holds a Partnership Interest,
whether as a Partner or as an Assignee.
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(29) "Limited Partner" means any Person named as a "Limited Partner" on
Exhibit A hereto, as it may be amended from time to time, or any Person admitted
as a Substituted Limited Partner or Additional Limited Partner, in such Person's
capacity as a limited partner of the Partnership.
(30) "Limited Partner Interest" means the Partnership Units and any other
Partnership Interests held by a Limited Partner, in its capacity as such, and
includes any and all benefits to which the Limited Partner holding such
Partnership Units and other Partnership Interests may be entitled, as provided
in this Agreement, together with all obligations of such Limited Partner to
comply with the terms and provisions of this Agreement.
(31) "Majority in Interest of the Limited Partners" means Limited Partners
(including the General Partner in its capacity as a Limited Partner, unless
otherwise expressly specified herein) who hold in the aggregate more than fifty
percent (50%) of the Partnership Units held by the Limited Partners as a class
(including Partnership Units held by the General Partner in its capacity as a
Limited Partner, unless otherwise expressly specified herein).
(32) "Nonrecourse Deductions" has the meaning set forth in Regulations
ss.1.704-2(b)(1), and the amount of Nonrecourse Deductions for a Partnership
fiscal year shall be determined in accordance with the rules of Regulations
ss.1.704-2(c).
(33) "Nonrecourse Liability" has the meaning set forth in Regulations
ss.1.752- 1(a)(2).
(34) "Partner Minimum Gain" means an amount, with respect to each Partner
Nonrecourse Debt, equal to the Partnership Minimum Gain that would result if
such Partner Nonrecourse Debt were treated as a Nonrecourse Liability,
determined in accordance with Regulations ss.1.704-2(i)(3).
(35) "Partner Nonrecourse Debt" has the meaning set forth in Regulations
ss.1.704-2(b)(4).
(36) "Partner Nonrecourse Deductions" has the meaning set forth in
Regulations ss.1.704-2(i)(2), and the amount of Partner Nonrecourse Deductions
with respect to a Partner Nonrecourse Debt for a Partnership fiscal year shall
be determined in accordance with the rules of Regulations ss.1.704-2(i)(2).
(37) "Partners" shall mean the General Partner and all Limited Partners.
(38) "Partnership" shall mean the limited partnership hereby constituted,
as such limited partnership may from time to time be constituted, and its
successors and assigns.
(39) "Partnership Interest" means the interest in the Partnership held by a
Partner together with all obligations of such Person to comply with the terms
and provisions of this Agreement.
(40) "Partnership Minimum Gain" has the meaning ascribed to "partnership
minimum gain" in Regulations ss.1.704-2(d).
(41) "Partnership Record Date" means the record date established by the
General Partner for the distribution of Available Cash Flow pursuant to Section
5.1, which record date will be the same date as that established by the Company
as the record date for a distribution to its shareholders of some or all of its
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portion of any such distribution received by the Company or an Affiliate from
the Partnership.
(42) "Partnership Unit" means a fractional, undivided share of the
Partnership Interests, other than Partnership Interests represented by Preferred
Units, of all Partners issued pursuant to Sections 4.1, 4.2 and 4.3 of this
Agreement. As of the date of this Agreement, the number of Partnership Units
outstanding and the Percentage Interests in the Partnership represented by such
Partnership Units are set forth in Exhibit A attached hereto.
(43) "Percentage Interest" means, as to a Partner, its interest in the
Partnership as determined by dividing the Partnership Units owned by such
Partner by the total number of Partnership Units then outstanding as specified
in Exhibit A attached hereto, as such Exhibit may be amended from time to time.
(44) "Person" means an individual or a corporation, partnership,
limited liability company, trust, unincorporated organization, association or
other entity.
(45) "Preferred Redemption Amount" shall mean, with respect to any
class or series of Preferred Units, the sum of (a) the amount of any accumulated
Preferred Distribution Shortfall with respect to such class or series of
Preferred Units, (b) the Preferred Distribution Requirement with respect to such
class or series of Preferred Units to the date of redemption, and (c) the
Preferred Redemption Price indicated in the Preferred Unit Designation with
respect to such class or series of Preferred Units.
(46) "Preferred Shares" shall mean any class of equity securities of
the Company now or hereafter authorized or reclassified, other than the Company
Shares, either having dividend rights that are superior or prior to the rights
with respect to dividends payable on the Company Shares, or designated as
"Preferred" by the Company.
(47) "Preferred Units" shall mean interests in the Partnership issued
to the Company or the General Partner pursuant to Section 4.1(a)(iii) and
Section 4.2(c) hereof. The holder of Preferred Units shall have such rights to
the allocations of Profits and Losses as specified in Article VI hereof and to
distributions pursuant to Section 5.1 hereof, but shall not, by reason of its
ownership of such Preferred Units, be entitled to participate in the management
of the Partnership or to consent to or approve any action which is not required
by the Act.
(48) "Proceeds" means net proceeds after the deduction of all related
expenses.
(49) "Profits" and "Losses" means, for each fiscal year of the Partnership
or other period, an amount equal to the Partnership's taxable income or loss,
respectively, for such year or period determined in accordance with Code
ss.703(a) (and for this purpose, all items of income, gain, loss, or deduction
required to be stated separately pursuant to Code ss.703(a)(1) shall be included
in such taxable income or loss), with the following adjustments:
(a) Any income of the Partnership that is exempt from federal income tax or
not otherwise taken into account in computing Profits or Losses pursuant to this
subparagraph shall be added to such taxable income or subtracted from such
taxable loss;
(b)Any expenditures of the Partnership described in Code ss.705(a)(2)(B),
or treated as Code ss.705(a)(2)(B) expenditures pursuant to
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Regulation ss.1.704-1(b)(2)(iv)(i), and not otherwise taken into
account in computing Profits and Losses pursuant to this subsection,
shall be subtracted from such taxable income or added to such taxable
loss;
(c) In the event that the Gross Asset Value of any
asset is adjusted pursuant to subparagraphs (b) or (c) of Section
1.1(a)(26) hereof, the amount of such adjustment shall be taken into
account as gain or loss from the disposition of such asset;
(d) Gain or loss resulting from any disposition of an
asset with respect to which gain or loss is recognized for federal
income tax purposes shall be computed by reference to the Gross Asset
Value of such asset, notwithstanding that the adjusted tax basis of the
asset differs from its Gross Asset Value;
(e) In lieu of depreciation, amortization, and other
cost recovery deductions, there shall be taken into account
Depreciation in computing taxable income or loss for such fiscal year
or other period; and
(f) Notwithstanding any other provision of this
Section, any items that are specially allocated pursuant to Section 6.2
and Section 7.6 of this Agreement shall not be taken into account.
(50) "Qualified REIT Subsidiary" shall have the meaning set forth in Code
ss.856(i)(2).
(51) "Recapture Income" means any gain recognized by the Partnership
upon the disposition of any property or asset of the Partnership, which gain is
characterized as ordinary income for federal income tax purposes because it
represents the recapture of deductions previously taken with respect to such
property or asset.
(52) "Regulations" means the Income Tax Regulations promulgated under
the Code, as such regulations may be amended from time to time (including
corresponding provisions of succeeding regulations).
(53) "REIT" means a real estate investment trust under Code ss.856.
(54) "REIT Expenses" shall mean (a) costs and expenses relating to the
continuity of existence of the Company, the General Partner (if different than
the Company) and their respective Subsidiaries, if any (all such entities shall,
for purposes of this definition, be included within the definition of General
Partner), including, without limitation, taxes, fees and assessments associated
therewith and the portion of any costs, expenses or fees payable to any
director, officer or trustee of the General Partner (including, without
limitation, any costs of indemnification) that are not included in the
definition of Administrative Expenses, (b) costs and expenses relating to the
Initial Public Offering, any other offer or registration of Company Shares or
other securities by the General Partner and all statements, reports, fees and
expenses incidental thereto, including, without limitation, underwriting
discounts and selling commissions applicable to any such offer of securities and
any costs and expenses associated with any claims made by any holders of such
securities or any underwriters or placement agents thereof, (c) costs incurred
in connection with the repurchase of any securities by the General Partner, (d)
costs and expenses associated with the preparation and filing of any periodic or
other reports and communications by the General Partner under federal, state or
local laws or regulations, including filings with the SEC, (e) costs and
expenses associated with compliance by the General Partner with laws, rules and
regulations
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promulgated by any regulatory body, including the SEC and any securities
exchange, (f) costs and expenses associated with any 401(k) plan, incentive
plan, bonus plan or other plan providing for compensation for the employees of
the General Partner, and all other operating or administrative costs of the
General Partner incurred in the ordinary course of its business; provided,
however, that amounts described herein shall be considered REIT Expenses
hereunder only if and to the extent during the fiscal year in question the
aggregate amount of such expenses for such fiscal year and all prior fiscal
years exceeds the aggregate of all amounts theretofore distributed or
distributable directly to the General Partner by any Subsidiary thereof other
than the Partnership.
(55) "REIT Requirements" shall mean the requirements set forth in the Code
and the Regulations for qualifying as a REIT and for maintaining status as a
REIT for federal income tax purposes.
(56) "Related Issue" shall mean, with respect to a class or series of
Preferred Units, the class or series of Preferred Shares designated by the
General Partner, or absent any designation, the class or series of Preferred
Shares the sale of which provided the Company or the General Partner with
proceeds to contribute to the Partnership in exchange for such Preferred Units.
(57) "SEC" shall mean the United States Securities and Exchange Commission.
(58) "Specified Redemption Date" means the tenth (10th) day after the date
of receipt by the General Partner of a Notice of Redemption (as described in
Section 11.2(a)).
(59) "Subsidiary" means, with respect to any Person, any corporation,
partnership or other entity of which a majority of the voting power of the
voting equity securities or a majority of the outstanding equity interests is
owned, directly or indirectly, by that Person.
(60) "Substituted Limited Partner" means a Person who is admitted as a
Limited Partner to the Partnership pursuant to Section 9.5 hereof.
(61) "Tax Depreciation" means the actual depreciation, amortization or cost
recovery deductions claimed by the Partnership with respect to its assets for
federal income tax purposes.
(62) "Terminating Capital Transaction" means any sale or other disposition
of all or substantially all of the assets of the Partnership or a related series
of transactions that, taken together, result in the sale or other disposition of
all or substantially all of the assets of the Partnership.
(63) "Third Party" shall mean a Person who is neither a Partner nor an
Affiliate of a Partner.
(64) "Third Party Financing" shall mean financing or refinancing
obtained from a Third Party by the Partnership.
(65) "Trading Day" shall mean a day on which the principal national
securities exchange on which the Company Shares are listed or admitted to
trading is open for the transaction of business or, if the Company Shares are
not listed or admitted to trading on any national securities exchange, shall
mean any day other than a Saturday, a Sunday or a day on which banking
institutions in the State of New York are authorized or obligated by law or
executive order to close.
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(66) "Transfer" means, when used as a verb, to sell, assign transfer,
exchange, convey, gift, hypothecate, pledge, encumber, or otherwise dispose,
whether voluntarily or involuntarily, and when used as a noun, the act of making
a Transfer (as defined herein).
(67) "Valuation Date" means the date of receipt by the General Partner of a
Notice of Redemption.
(b) The following table indicates the location in this Agreement of the
other terms defined herein:
Defined Term Location
Additional Limited Partner Section 10.2(a)
Adjustment Date Section 4.2(b)
Capital Account Section 4.6
Cash Amount Section 11.1(b)
Contributed Funds Section 4.2(b)
Dissolution Events Section 12.1(a)
Indemnitee Section 14.1(a)
Initial Public Offering Section 4.3(b)
IRS Section 15.4(a)
Liquidator Section 12.2(a)
New Securities Section 4.3(c)
Notice of Redemption Section 11.2(a)
Original Certificate Page 1
Original Partnership Agreement Page 1
Other Interest Holders Section 6.1(e)
Post-Exchange Distribution Section 5.1(a)
Preferred Contributed Funds Section 4.2(c)
Preferred Distribution Section 4.2(c)
Requirement
Preferred Distribution Section 5.1(b)
Shortfall
Preferred Redemption Price Section 4.2(c)
Preferred Unit Designation Section 4.2(c)
Preferred Unit Holders Section 6.1(e)
Redeeming Partner Section 11.2(a)
Redemption Right Section 11.1(a)
Regulatory Allocations Section 6.2(g)
Required Funds Section 4.2(a)
Rights Section
1.1(a)(17)
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ARTICLE II
ORGANIZATION
Section 2.1 Continuation
(a) The Partners hereby continue the existence of the Partnership as a
limited partnership, pursuant to the provisions of the Act and all other
applicable laws of the State of Delaware, upon the terms and conditions, and for
the limited purpose and scope, set forth in the Agreement. Except as expressly
provided herein to the contrary, the rights and obligations of the Partners and
the administration of the Partnership shall be governed by the Act.
(b) On November 21, 1996, the General Partner filed the Certificate with
the Secretary of State of Delaware as required by the Act. The Certificate is an
amendment and restatement of the Original Certificate filed on October 1, 1996.
The General Partner shall use all reasonable efforts to cause to be filed such
other certificates or documents as may be reasonable and necessary or
appropriate for the formation, continuation, qualification and operation of a
limited partnership (or a partnership in which the limited partners have limited
liability) in the State of Delaware and any other state in which the Partnership
may elect to do business or own property. To the extent that such action is
determined by the General Partner to be reasonable and necessary or appropriate,
the General Partner shall file amendments to and restatements of the Certificate
and do all of the things to maintain the Partnership as a limited partnership
(or a partnership in whic h the limited partners have limited liability) under
the laws of the State of Delaware and each other state in which the Partnership
may elect to do business or own property. The General Partner shall not be
required, before or after filing, to deliver or mail a copy of the Certificate
or any amendment thereto to any Limited Partner.
Section 2.2 Name
The name of the Partnership shall be "Great Lakes REIT, L.P." The
Partnership's business may be conducted under any other name or names deemed
advisable in the sole discretion of the General Partner, including the name of
the General Partner or any Affiliate thereof; provided, however, that the
General Partner may not choose the name of any Limited Partner (or any
derivative thereof) without the prior consent of that Limited Partner. The words
"Limited Partnership," "L.P." "Ltd." or similar words or letters shall be
included in the Partnership's name where necessary for the purposes of complying
with the laws of any jurisdiction that so requires. The General Partner in its
sole and absolute discretion may change the name of the Partnership at any time
and from time to time and shall notify the Limited Partners of such change in
its next regular communication to the Limited Partners.
Section 2.3 Registered Office and Agent
The registered agent of the Partnership in the State of Delaware shall be
The Corporation Trust Company or such other Person as the General Partner may
select in its sole discretion. The address of the registered office of the
Partnership in the State of Delaware is 1209 Orange Street, New Castle County,
Wilmington, Delaware, 19801, or such other address as the General Partner may
from time to time select in its sole discretion. The General Partner, in its
sole discretion, shall designate a registered agent and registered office for
the Partnership in each state in which the Partnership is required to qualify to
do business or to designate an agent for the service of process.
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Section 2.4 Principal Business Office
The principal office of the Partnership shall be located at 823 Commerce
Drive, Oak Brook, Illinois 60521, or such other place as the General Partner may
from time to time designate by notice to the Limited Partners. The Partnership
may maintain offices at such other place or places within or outside the State
of Illinois as the General Partner deems advisable.
Section 2.5 Term
The term of the Partnership commenced on October 1, 1996, the date on which
the Original Certificate was filed in the office of the Secretary of State of
Delaware in accordance with the Act, and shall continue until December 31, 2046,
unless the Partnership is dissolved sooner pursuant to the provisions of Article
XII or as otherwise provided by law.
ARTICLE III
PURPOSES, BUSINESS AND POWERS OF THE PARTNERSHIP
Section 3.1 Purpose and Business of the Partnership
The purpose and nature of the business to be conducted by the Partnership
is: to acquire, hold, own, develop, redevelop, construct, reconstruct, alter,
improve, maintain, operate, manage, sell, lease, rent, transfer, encumber,
convey, exchange, mortgage, pledge and otherwise dispose of real property of all
kinds and any personal property and fixtures associated therewith; to acquire,
hold, own, sell, convey, exchange and otherwise dispose of notes, mortgages,
deeds of trust, bonds and other evidences of indebtedness, whether or not
secured directly or indirectly by real property; to provide asset management or
other services required by the General Partner in connection with the operation
of the business and affairs of the General Partner, including, without
limitation, the payment of REIT Expenses, and to conduct any business that may
be lawfully conducted by a limited partnership organized pursuant to the Act; to
enter into any partnership, limited liability company, trust, joint venture or
other similar arrangements to engage in any of the foregoing or to own interests
in any entity engaged in any of the foregoing; and to do anything necessary,
appropriate, proper, advisable, desirable, convenient or incident to, or in
connection with the foregoing; provided, however that such business shall be
limited to and conducted in such manner as to permit the Company to be at all
times classified as a REIT, unless the Company ceases to qualify as a REIT for
reasons other than the conduct of the Partnership's business. The Partners
acknowledge that the Company's current status as a REIT inures to the benefit of
the Partnership and all of the Partners and not solely the General Partner.
Section 3.2 Powers
(a) The Partnership is empowered to do any and all acts and things
necessary, appropriate, proper, advisable, incidental to or convenient for the
furtherance and accomplishment of the purposes and business described herein and
for the protection and benefit of the Partnership.
(b) Notwithstanding the provisions of the preceding paragraph, the
Partnership shall not take, or refrain from taking, any action which, in the
judgment of the General Partner, in its sole and absolute discretion, (i) could
adversely affect the ability of the Company to satisfy all REIT Requirements,
(ii) could subject the Company to any additional taxes under ss.ss.857 or 4981
of the Code, or (iii) could violate any law or regulation of any governmental
body or agency having jurisdiction
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over the Company or its securities, unless such action (or inaction) shall have
been specifically consented to by the Company in writing.
ARTICLE IV
CAPITAL CONTRIBUTIONS AND CAPITAL ACCOUNTS
Section 4.1 Capital Contributions of the Partners
(a) (i) At the time of the execution of this Agreement, the Partners shall
make the Capital Contributions set forth in Exhibit A to this Agreement. The
Partners shall own Partnership Units and Preferred Units in the amounts set
forth for such Partner in Exhibit A and shall have Percentage Interests in the
Partnership as set forth in Exhibit A, which Percentage Interests shall be
adjusted in Exhibit A from time to time by the General Partner to the extent
necessary to reflect accurately redemptions, the issuance of additional
Partnership Units or Preferred Units, or similar events having an effect on the
number of any Partner's Partnership Units or Preferred Units or on any Partner's
Percentage Interest. The Partnership Interest of each Partner shall be
considered "personal property" for all purposes.
(ii) To the extent the Partnership acquires any property by the
merger of any other Person into the Partnership, Persons who receive Partnership
Interests in exchange for their interests in the Person merging into the
Partnership shall become Partners and shall be deemed to have made Capital
Contributions as provided in the applicable merger agreement and as set forth in
Exhibit A, as amended to reflect such deemed Capital Contributions.
(iii) The Partnership shall issue to the Company Preferred Units
having the same economic rights, including the right to convert such Preferred
Units into Partnership Units under certain conditions, and subject to the same
restrictions as the sole class of Preferred Shares that is issued and
outstanding as of the date hereof. The Partnership shall issue a number of
Preferred Units to the Company equal to the number of Preferred Shares that are
issued and outstanding as of the date hereof, which amount shall be set forth in
Exhibit A to this Agreement.
(iv) The General Partner may acquire and hold a portion of its
Partnership Interest in the capacity of a Limited Partner, and in such event, it
shall be treated as one of the Limited Partners for all purposes hereunder, to
the extent of the Partnership Units or other Partnership Interests acquired in
such capacity. Any Partnership Units or other Partnership Interests held by the
General Partner in the capacity of a Limited Partner shall be designated as such
in Exhibit A, as amended from time to time.
(b) Except as provided in Section 4.3 of this Agreement, neither the
General Partner nor any Limited Partner shall be obligated to make any
additional Capital Contributions, or to loan any funds, to the Partnership. No
Partner shall be required, upon the dissolution or liquidation of the
Partnership, or at any other time, to contribute capital to the Partnership
because of the loss of some or all of the capital contributed by any other
Partner.
Section 4.2 Additional Funds
(a) The Partnership may obtain funds ("Required Funds") which
it considers necessary to meet the needs, obligations and requirements of the
Partnership, or to maintain adequate working capital or to repay Partnership
indebtedness, and to carry out the Partnership's purposes, from the proceeds of
Third Party Financing or Affiliate Financing, in each case pursuant to such
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terms, provisions and conditions and in such manner (including the engagement of
brokers and/or investment bankers to assist in providing such financing) and
amounts as the General Partner shall determine to be in the best interests of
the Partnership, subject to the terms and conditions of this Agreement. Any and
all funds required or expended, directly or indirectly, by the Partnership for
capital expenditures may be obtained or replenished through Partnership
borrowings. Any Third Party Financing or Affiliate Financing obtained by the
General Partner for and on behalf of the Partnership may be convertible in whole
or in part into Additional Units (to be issued in accordance with Section 7.13
hereof), may be unsecured, may be secured by mortgage(s) or deed(s) of trust
and/or assignments on or in respect of all or any portion of the assets of the
Partnership or any other security made available by the Partnership, may include
or be obtained through the public or private placement of debt and/or other
instruments, domestic and foreign, may include provision for the option to
acquire Additional Units (to be issued in accordance with Section 7.13 hereof),
and may include the acquisition of or provision for interest rate swaps, credit
enhancers and/or other transactions or items in respect of such Third Party
Financing or Affiliate Financing; provided, however, that in no event may the
Partnership obtain any Affiliate Financing or Third Party Financing that is
recourse to any Partner or any Affiliate, partner, shareholder, beneficiary,
principal, officer or director of any Partner without the consent of the
affected Partner and any other Person or Persons to whom such recourse may be
had.
(b) To the extent the Partnership does not borrow all of the
Required Funds (and whether or not the Partnership is able to borrow all or part
of the Required Funds), the General Partner (for purposes of this Section 4.2(b)
and Section 4.2(c), the term "General Partner" shall also include an Affiliate
of the General Partner) (i) may itself borrow such Required Funds, in which case
the General Partner shall lend such Required Funds to the Partnership on the
same economic terms and otherwise on substantially identical terms, or (ii) may
raise such Required Funds in any other manner (including, without limitation, an
issuance of Company Shares that requires registration with the SEC as an initial
public offering or is otherwise designated by the General Partner as an initial
public offering (the "Initial Public Offering")), in which case, unless such
Required Funds are raised by the General Partner through the sale of Preferred
Shares, the General Partner shall contribute to the Partnership as an additional
Capital Contribution the amount of the Required Funds so raised ("Contributed
Funds") (hereinafter, each date on which the General Partner so contributes
Contributed Funds pursuant to this Section 4.2(b) is referred to as an
"Adjustment Date"). Any Required Funds raised from the sale of Preferred Shares
shall either be contributed to the Partnership as Contributed Funds or lent to
the Partnership pursuant to Section 4.2(c) below. In the event the General
Partner advances Required Funds to the Partnership pursuant to this Section
4.2(b) as Contributed Funds, then the Partnership shall assume and pay (or
reflect on its books as additional Contributed Funds) the expenses (including
any applicable underwriting discounts) incurred by the General Partner in
connection with raising such Required Funds through a public offering of its
securities or otherwise. If the General Partner advances Required Funds to the
Partnership as Contributed Funds pursuant to this Section 4.2(b), additional
Partnership Units shall be issued to the General Partner to reflect its
contribution of the Contributed Funds. The number of Partnership Units so issued
shall be determined by dividing the amount of Contributed Funds by the Deemed
Partnership Unit Value, computed as of the Trading Day immediately preceding the
Adjustment Date. The General Partner shall promptly give each Limited Partner
written notice of the number of Partnership Units so issued.
(c) In the event the General Partner contributes to the Partnership any
Required Funds obtained from the sale of Preferred Shares ("Preferred
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Contributed Funds"), then the Partnership shall assume and pay the expenses
(including any applicable underwriter discounts) incurred by the General Partner
in connection with raising such Required Funds and shall issue to the General
Partner Preferred Units of a designated class or series to reflect its
contribution of such funds. Each class or series of Preferred Units so issued
shall be designated by the General Partner to identify such class or series with
the class or series of Preferred Shares which constitutes the Related Issue.
Each class or series of Preferred Units shall be described in a written document
(the "Preferred Unit Designation") that shall set forth, in sufficient detail,
the economic rights, including dividend, distribution, redemption and conversion
rights and sinking fund provisions, of the class or series of Preferred Units
and the Related Issue. The Preferred Unit Designation must be executed and
delivered by the Partnership to each holder of the related class or series of
Preferred Units, and upon being so executed and delivered will be a part of this
Agreement. The number of Preferred Units of a class or series shall be equal to
the number of shares of the Related Issue sold. The Preferred Unit Designation
shall provide for such terms for the class or series of Preferred Units that
shall entitle the General Partner to substantially the same economic rights as
the holders of the Related Issue. Specifically, the General Partner shall
receive distributions on the class or series of Preferred Units pursuant to
Section 5.1 equal to the dividends, if any, payable on the Related Issue at the
times such dividends are paid (the "Preferred Distribution Requirement"). The
Partnership shall redeem the class or series of Preferred Units for a redemption
price per Preferred Unit equal to the redemption price per share of the Related
Issue, exclusive of any accrued unpaid dividends (the "Preferred Redemption
Price") upon the redemption of any shares of the Related Issue, plus the unpaid
Preferred Distribution Shortfall, if any, and the Preferred Distribution
Requirement, if any. Each class or series of Preferred Units shall also be
converted into additional Partnership Units at the time and on such economic
terms and conditions as the Related Issue is converted into Company Shares. Upon
the issuance of any class or series of Preferred Units pursuant to this Section
4.2(c), the General Partner shall provide the Limited Partners with a copy of
the Preferred Unit Designation relating to such class or series. The General
Partner shall have the right, in lieu of contributing to the Partnership
proceeds from the sale of Preferred Shares as Preferred Contributed Funds, to
lend such proceeds to the Partnership. Any such loan shall be on the same terms
and conditions as the Related Issue, except that dividends payable on the
Related Issue shall be payable by the Partnership to the General Partner as
interest, any redemption shall take the form of principal payments, and no
Preferred Units shall be issued to the General Partner. If any such loan is
made, the Partnership shall promptly reimburse the General Partner for all
expenses (including any applicable underwriter discounts) incurred by the
General Partner in connection with raising the Required Funds. Any such loan
made by the General Partner to the Partnership may at any time be contributed to
the Partnership as Preferred Contributed Funds in exchange for Preferred Units
as above provided; and if the Related Issue is by its terms convertible into
Company Shares, such loan shall be so contributed to the Partnership prior to
the effectuation of such conversion.
Section 4.3 Required Additional Capital Contributions
(a) The General Partner shall, from time to time, contribute cash or
property to the Partnership as an additional Capital Contribution in exchange
for additional Partnership Units such that: (i) the General Partner's Percentage
Interest shall at all times be at least one percent (1%); and (ii) the General
Partner's Capital Account balance shall not be less than one percent (1%) of the
total Capital Account balances of all Partners.
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(b) Without limiting the foregoing, the Company is expressly authorized to
issue Company Shares for less than fair market value, and the General Partner is
expressly authorized to cause the Partnership to issue to the Company
corresponding Partnership Interests, so long as (i) the General Partner
concludes in good faith that such issuance is in the interests of the Company
and the Partnership (for example, and not by way of limitation, the issuance of
Company Shares and corresponding Partnership Units pursuant to an employee stock
purchase plan providing for employee purchases of Company Shares at a discount
from fair market value or employee stock options that have an exercise price
that is less than the fair market value of the Company Shares, either at the
time of issuance or at the time of exercise), and (ii) the Company contributes
all proceeds from such issuance and/or exercise to the Partnership. In the case
of employee purchases of Company Shares at a discount from fair market value,
the amount of the discount representing compensation to the employee shall be
treated as an expense paid by the Company in connection with the issuance of the
Company Shares.
Section 4.4 No Third Party Beneficiary.
No creditor or other third party having dealings with the Partnership shall
have the right to enforce the right or obligation of any Partner to make Capital
Contributions or loans or to pursue any other right or remedy hereunder or at
law or in equity, it being understood and agreed that the provisions of this
Agreement shall be solely for the benefit of, and may be enforced solely by, the
parties hereto and their respective successors and assigns. None of the rights
or obligations of the Partners herein set forth to make Capital Contributions or
loans to the Partnership shall be deemed an asset of the Partnership for any
purpose by any creditor or other third party, nor may such rights or obligations
be sold, transferred or assigned by the Partnership or pledged or encumbered by
the Partnership to secure any debt or other obligation of the Partnership or of
any of the Partners.
Section 4.5 No Preemptive Rights
No Person shall have any preemptive, preferential or other similar right
with respect to (a) additional Capital Contributions or loans to the
Partnership; or (b) issuance or sale of any Partnership Units or other
Partnership Interests.
Section 4.6 Capital Accounts
A separate Capital Account shall be maintained for each Partner. "Capital
Account" means, with respect to any Partner, the amount of cash and the Gross
Asset Value of property contributed by the Partner to the Partnership (reduced
by liabilities assumed by the Partnership and liabilities to which such
contributed property is subject for purposes of ss.752 of the Code and the
Regulations thereunder), adjusted as follows:
(a) Reduced by:
(1) All Losses (including all items of deduction or
loss) allocated to such Partner under Sections 6.1 and 6.2 (but not
paragraph (j) of Section 6.2) of this Agreement;
(2) All distributions to such Partner under Section
6.1 of this Agreement and the Gross Asset Value of property distributed
to the Partner by the Partnership (reduced by liabilities assumed by
the Partner and liabilities to which such distributed property is
subject for purposes of ss.752 of the Code and the Regulations
thereunder); and
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(3) Any other decreases required by Regulations ss.1.704-1(b)(2)(iv); and
(b) Increased by:
(1) All Profits (including all items of income or gain) allocated to such
Partner under Sections 6.1 and 6.2 (but not paragraph (j) of Section 6.2) of
this Agreement; and
(2) Any other increases required by Regulations ss.1.704-1(b)(2)(iv).
The Capital Account with respect to any Assignee, Substituted Limited Partner or
other transferee of a Partnership Interest shall reflect all prior adjustments
to the Capital Account of the transferor Partner. The Capital Accounts shall be
maintained in strict accordance with Code ss.704(b)(2) and the Regulations
promulgated thereunder. In addition, the Partnership shall maintain such other
separate and additional accounts for each Partner as shall be necessary to
reflect accurately the rights and interests of the respective Partners.
Section 4.7 Interest on and Return of Capital Contributions.
No Partner shall receive any interest on its Capital Contributions to the
Partnership or on its Capital Account, notwithstanding any disproportion therein
as between the Partners. No Partner shall be liable for the return of the
Capital Contribution of any other Partner or for the return of any Partnership
asset. Except as provided in this Agreement or by law, no Partner shall have any
right to withdraw any part of its Capital Account or to demand or obtain a
return of all or any part of its Capital Contributions from the Partnership.
Section 4.8 Dividend Reinvestment Plan.
If the Company institutes a dividend reinvestment plan, all amounts
received by the Company in respect of its dividend reinvestment plan, either (a)
shall be utilized by the Company to effect open market purchases of Company
Shares, or (b) if the Company elects instead to issue new Company Shares with
respect to such amounts, shall be contributed by the Company to the Partnership
in exchange for additional Partnership Units. The number of Partnership Units so
issued shall be determined by dividing the amount of funds so contributed by the
Deemed Partnership Unit value, computed as of the Trading Day immediately
preceding the date such funds are contributed. The General Partner shall
promptly give each Limited Partner written notice of the number of Partnership
Units so issued.
ARTICLE V
DISTRIBUTIONS
Section 5.1 Distributions
(a) Except with respect to the liquidation of the Partnership
and subject to the priority set forth in Sections 5.l(b) and 5.1(c) below, the
General Partner shall cause the Partnership to distribute all or a portion of
Available Cash Flow to the Partners who are Partners on the applicable
Partnership Record Date from time to time as determined by the General Partner,
but in any event not less frequently than quarterly, in such amounts as the
General Partner shall determine in its sole discretion; provided, however, that,
except as provided in Sections 5.1(b) and 5.1(c) below, all such distributions
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shall be made pro rata in accordance with the outstanding Partnership Units on
the relevant Partnership Record Date. In no event may a Limited Partner receive
a distribution of Available Cash Flow with respect to a Partnership Unit that
such Partner has exchanged or caused the Partnership to redeem pursuant to the
Redemption Rights granted under Article XI and for which the Specified
Redemption Date was on or before the relevant Partnership Record Date (a
"Post-Exchange Distribution"); if that Partnership Unit has been or will be
acquired by the Company for the Cash Amount or the Company Shares Amount as
described in Section 11.3, then all such Post-Exchange Distributions shall be
distributed to the Company.
(b) Except to the extent Available Cash Flow is distributed
pursuant to Section 5.1(c), and except with respect to the liquidation of the
Partnership, distributions of Available Cash Flow shall be made in the following
order of priority:
(i)First, to the extent that the amount of Available Cash Flow
distributed to the holders of Preferred Units for any prior quarter was
less than the Preferred Distribution Requirement for such quarter, and
has not been subsequently distributed pursuant to this Section
5.1(b)(i) (a "Preferred Distribution Shortfall"), Available Cash Flow
shall be distributed to the holders of Preferred Units in an amount
necessary to satisfy such Preferred Distribution Shortfall for all
periods;
(ii) Second, Available Cash Flow shall be distributed to the
holders of Preferred Units in an amount equal to the Preferred
Distribution Requirement for the then current quarter for each
outstanding Preferred Unit; and
(iii) The balance of the Available Cash Flow to be distributed, if
any, shall be distributed to holders of Partnership Units, in
proportion to their ownership of Partnership Units.
(c) If, in any quarter the Partnership redeems any outstanding
Preferred Units, unless and except to the extent that such redemption is
effected out of borrowed funds, Capital Contributions or other sources,
Available Cash Flow shall be distributed to the General Partner in an amount
equal to the applicable Preferred Redemption Amount for the Preferred Units
being redeemed before any amounts are distributed pursuant to Section 5.1(b).
(d) Notwithstanding the provision of the first sentence of
Section 5.1(a), the General Partner shall use its best efforts to cause the
Partnership to distribute sufficient amounts, in accordance with Section 5.1(a)
above, to enable the Company to pay shareholder dividends that will (i) satisfy
the REIT Requirements, and (ii) avoid any federal income or excise tax liability
of the Company.
(e) If any Partnership Interest is Transferred in compliance with
Article IX, then, except as otherwise provided in Section 5.1(a), all
distributions of Available Cash Flow attributable to such Partnership Interest
with respect to which the Partnership Record Date is on or before the Effective
Date of Transfer shall be made to the transferor Partner, and in the case of a
Transfer other than a redemption by the Partnership, all distributions of
Available Cash Flow thereafter attributable to such Partnership Interest shall
be made to the transferee.
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Section 5.2 Amounts Withheld
All amounts withheld pursuant to the Code or any provisions of any state or
local tax law and Section 15.6 hereof with respect to any allocation, payment or
distribution to the General Partner, the Limited Partners or Assignees shall be
treated as amounts distributed to the General Partner, Limited Partners, or
Assignees pursuant to Section 5.1 for all purposes under this Agreement.
Section 5.3 Distributions Upon Liquidation
Proceeds from a Terminating Capital Transaction and any other cash received
or reductions in reserves made after commencement of the liquidation of the
Partnership shall be distributed to the Interest Holders in accordance with
Section 12.2 of this Agreement.
ARTICLE VI
ALLOCATIONS
Section 6.1 General Allocations
Except as provided in Sections 6.1(e), 6.2 and 7.6 of this Agreement, all
Profits and Losses of the Partnership shall be allocated as follows:
(a) Profits shall be allocated among the Interest Holders for each fiscal year
of the Partnership as follows:
(i) First, Profits for that year, or other applicable
period, shall be allocated to the General Partner until it has been
allocated Profits from the current period and all prior periods equal
to all Losses allocated to it for the current year and all prior years
pursuant to Section 6.1(b)(ii); and
(ii) Then, Profits for that year, or other applicable
period, shall be allocated among the Interest Holders in accordance
with their respective Percentage Interests.
(b) Losses shall be allocated among the Interest Holders for each fiscal year
of the Partnership as follows:
(i) Losses for that year, or other applicable period, shall be allocated
among the Interest Holders in accordance with their Percentage Interests; and
(ii) Notwithstanding the allocation of Losses
pursuant to Section 6.1(b)(i), no Loss shall be allocated to an
Interest Holder to the extent that such allocation would cause Interest
Holder to have an Adjusted Capital Account Deficit at the end of any
fiscal year (or increase any existing Adjusted Capital Account
Deficit), and all such Losses shall be allocated to the General
Partner.
(c) Interest Holders who received the benefit of Depreciation
deductions that are recaptured as ordinary income upon the sale or other
disposition of Partnership property shall bear the burden of such recapture.
Therefore, after the taxable gain on such sale or other disposition is allocated
as provided in this Article, a portion of each Interest Holder's share of such
gain shall be characterized as ordinary income in accordance with the proportion
in which each
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Interest Holder (or the Interest Holder's transferor) was allocated the
deductions that gave rise to the Recapture Income. Tax liability arising out of
the recapture of tax credits, if any, also shall be allocated among the Interest
Holders in accordance with the proportion in which each Interest Holder (or the
Interest Holder's transferor) was allocated the credits that are being
recaptured.
(d) If any Partnership Interest is Transferred in compliance with the
provisions of Article IX or exchanged or Transferred pursuant to Article XI, on
any day other than the first day of the Partnership's fiscal year, Profits,
Losses, each item thereof and all other items attributable to such Interest for
such fiscal year shall be divided and allocated between the transferor Partner
and the transferee Partner or Assignee by taking into account their varying
interests during the taxable year in accordance with Code ss. 706(d), using the
interim closing of the books method (unless the General Partner, in its sole and
absolute discretion, elects to adopt another reasonable method permitted by
law).
(e) Notwithstanding the foregoing, in the event the assets of the
Partnership are Transferred in connection with or in contemplation of the
dissolution , liquidation and winding up of the Partnership, the Profits and
Losses resulting therefrom shall be allocated as follows:
(i) Profits shall be allocated: (A) first, to make
the Capital Accounts of each holder of Preferred
Units (the "Preferred Unit Holders") equal to the
respective Preferred Redemption Amounts; (B) second,
to make the Capital Accounts of the Interest Holders
other than the Preferred Unit Holders (the "Other
Interest Holders"), and the Capital Account balances
of the Preferred Unit Holders in excess of the
Preferred Redemption Amounts, stand in the ratio of
their respective Percentage Interests; and (C)
thereafter, to the Partners in proportion to their
respective Percentage Interests.
(ii) Losses shall be allocated: (A) first, to make
the Capital Accounts of the Preferred Unit Holders in
excess of the Preferred Redemption Amounts stand in
the same ratio with the aggregate Capital Account
balances of the Other Interest Holders, as the
aggregate Percentage Interests of the Preferred Unit
Holders bears to the aggregate Percentage Interests
of all such Other Interest Holders; (B) second, to
the Interest Holders in proportion to their
respective Percentage Interests to the extent of
their then positive Capital Account balances; and (C)
thereafter, to the General Partner.
Any amounts allocated pursuant to this Section 6.1(e) to the
Other Interest Holders, as a group, shall be allocated among them in
proportion to their respective Percentage Interests.
Section 6.2 Special Allocation Rules
(a)Nonrecourse Deductions. Nonrecourse Deductions shall be allocated to the
Partners in accordance with their respective Percentage Interests, determined as
of the end of the fiscal year in question.
(b) Partner Nonrecourse Deductions. Partner Nonrecourse Deductions for
any fiscal year or other period shall be specially allocated to the Interest
Holder(s) who bear the economic risk of loss with respect to the Partner
Nonrecourse Debt to which such Partner Nonrecourse Deductions are attributable
in accordance with Regulations ss.1.704-2(i).
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(c) Partnership Minimum Gain Chargeback. Notwithstanding any other
provision of this Section, if there is a net decrease in Partnership Minimum
Gain during any Partnership fiscal year, each Interest Holder shall be specially
allocated items of Partnership gross income and gain for such year (and if
necessary, subsequent years) in an amount equal to the Interest Holder's share
of such net decrease, determined in accordance with the provisions of
Regulations ss.1.704-2(g). This Section is intended to comply with the minimum
gain chargeback requirements in Regulations ss.1.704-2(f) and shall be
interpreted consistently therewith. Solely for purposes of this Section, an
Interest Holder's Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Section 6.1 during such fiscal year.
(d) Partner Minimum Gain Chargeback. Notwithstanding any other
provision of this Article (except paragraph (c) of this Section), if there is a
net decrease in Partner Minimum Gain in respect of Partner Nonrecourse Debt
during any Partnership fiscal year, each Interest Holder who has a share of the
Partner Minimum Gain attributable to such Partner Nonrecourse Debt, determined
in accordance with Regulations ss.1.704-2(i)(5), shall be specially allocated
items of Partnership gross income and gain for such year (and if necessary,
subsequent years) in an amount equal to the Interest Holder's share of such net
decrease, determined in accordance with the provisions of Regulations
ss.1.704-2(i)(4). This Section is intended to comply with the minimum gain
chargeback requirement in such ss.1.704-2(i)(4) of the Regulations and shall be
interpreted consistently therewith. Solely for purposes of this Section, each
Interest Holder's Adjusted Capital Account Deficit shall be determined prior to
any other allocations pursuant to Section 6.1 of the Agreement with respect to
such fiscal year, other than allocations pursuant to Section 6.2(c) hereof.
(e) Qualified Income Offset. In the event that any Interest Holder
unexpectedly receives any adjustment, allocation, or distribution described in
Regulations ss.1.704-1(b)(2)(ii)(d)(4) through (d)(6), and after giving effect
to the special allocations in Sections 6.2(c) and 6.2(d), the Interest Holder
has an Adjusted Capital Account Deficit, items of Partnership income and gain
shall be specially allocated to each such Interest Holder in an amount and
manner sufficient to eliminate, to the extent required by the Regulations, the
Adjusted Capital Account Deficit of such Interest Holder as quickly as possible;
provided, however, that an allocation pursuant to this Section 6.2(e) shall be
made if and only to the extent that such Interest Holder would have an Adjusted
Capital Account Deficit after all other allocations provided for in this
Agreement have been tentatively made as if this paragraph were not in the
Agreement. This provision is intended to comply with the qualified income offset
requirement contained in Regulations ss.1.704- 1(b)(2)(ii)(d)(3) and shall be
construed in accordance with the provisions thereof.
(f) Code ss.754 Adjustments. To the extent an adjustment to the
adjusted tax basis of any Partnership asset under ss.734(b) or 743(b) of the
Code is required, pursuant to Regulations ss.1.704-1(b)(2)(iv)(m), to be taken
into account in determining Capital Accounts, the amount of such adjustment to
the Capital Accounts shall be treated as an item of gain (if the adjustment
increases the basis of the asset) or loss (if the adjustment decreases such
basis), and such item of gain or loss shall be specially allocated to the
Interest Holders in a manner consistent with the manner in which their Capital
Accounts are required to be adjusted pursuant to that Section of the
Regulations.
(g) Curative Allocations. The allocations set forth in paragraphs (a)
through (f) of this Section and in Section 6.1(b)(ii) (the "Regulatory
Allocations") are intended to comply with certain requirements of the
Regulations. It is the intent of the Partners that, to the extent possible, all
Regulatory Allocations shall be offset either with other Regulatory Allocations
or with special allocations
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of other items of Partnership income, gain, loss or deduction. Therefore,
notwithstanding any other provision of Section 6.1 or this Section (other than
the Regulatory Allocations), all remaining Profits and Losses (including items
of income, gain, loss, and deduction) shall be allocated among the Partners in
the discretion of the General Partner so that, when combined with the Regulatory
Allocations, the net allocations of Profits and Losses (including items of
income, gain, loss, and deduction), to the greatest extent possible, shall be
equal to the net allocations that would have been made as if the Regulatory
Allocations were not in this Agreement. In exercising its discretion hereunder,
the General Partner may take into account future Regulatory Allocations that are
likely to be made and which would offset other Regulatory Allocations.
(h) Preferred Allocation. Items of Partnership income and gain for any
fiscal year of the Partnership shall be specially allocated to the holders of
Preferred Units in proportion to and to the extent of the excess, if any, of:
(i) the cumulative distributions each holder of Preferred Units has received
pursuant to Sections 5.1(b)(i) and 5.1(b)(ii) hereof from the commencement of
the Partnership to a date thirty (30) days after the end of such fiscal year,
over (ii) the cumulative items of income and gain allocated to such holder
pursuant to this Section 6.2(h) for all prior fiscal years of the Partnership.
(i) Recharacterized Payments. If and to the extent that any amount paid
to any Partner or its Affiliate is recharacterized for federal income tax
purposes as a distribution to that Partner, an amount of gross income or gain
equal to the amount of the payment so recharacterized shall be allocated to that
Partner.
(j) Code Section 704(c) Allocations.
(i) In accordance with Code ss. 704(c) and the
Regulations thereunder, but solely for income tax purposes, income,
gain, loss and deduction with respect to an asset contributed to the
capital of the Partnership shall be allocated among the Partners so as
to take account of any variation between the Partnership's adjusted
basis in that asset for federal income tax purposes and its Gross Asset
Value. The General Partner, in its sole and absolute discretion, shall
choose among the alternatives set forth in the Regulations issued under
Code ss. 704(c) for handling any such items.
(ii) In the event that the Gross Asset Value of any
Partnership asset is adjusted pursuant to this Agreement, subsequent
allocations of income, gain, loss, and deduction with respect to such
asset shall take account of any variation between the adjusted basis of
such asset for federal income tax purposes and its Gross Asset Value,
in the manner required under Code ss.704(c) and the Regulations
thereunder; provided, however, that the General Partner, in its sole
and absolute discretion, shall choose among the alternatives set forth
in the applicable Regulations to make such allocations.
(iii) Allocations pursuant to this Section 6.2(j) are
solely for tax purposes and shall not affect or in any way be taken
into account in computing Capital Accounts or any Person's share of
Profits, Losses, other items or distributions pursuant to this
Agreement. Each Partner hereby agrees to report income, gain, loss and
deduction on such Partner's federal income tax return in a manner
consistent with the methods adopted by the General Partner and used by
the Partnership as described herein.
(k) Successor Partners. For purposes of this Agreement, an Assignee or
other transferee of a Partnership Interest shall be deemed to have been
allocated the Profits, Losses and other items of income, gain, loss, deduction
and credits
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allocable to the transferred Partnership Interest previously allocated to the
transferor pursuant to this Agreement.
ARTICLE VII
RIGHTS AND OBLIGATIONS OF THE GENERAL PARTNER
Section 7.1 Management.
Except as otherwise expressly provided in this Agreement, all
management powers over the business and affairs of the Partnership are and shall
be exclusively vested in the General Partner, and no Limited Partner or Interest
Holder, other than the General Partner, shall have any right to participate in
or exercise control or management power over the business and affairs of the
Partnership. The General Partner may not be removed by the Limited Partners,
with or without cause.
Section 7.2 Powers of the General Partner.
(a) In addition to the powers which are granted to the General Partner
under any provision of the Act or under any other provision of this Agreement,
subject to Section 7.3 of this Agreement, the General Partner shall have full
power and authority to do all things deemed necessary or desirable by it to
conduct the business of the Partnership, and to effectuate the purposes set
forth in Section 3.1 of this Agreement, including, without limitation, the power
and authority:
(1) to manage, control, invest, reinvest, acquire by
purchase, lease or otherwise, sell, contract to purchase or sell, hold
for investment, grant, obtain or exercise options to purchase, options
to sell or conversion rights, assign, transfer, convey, deliver,
endorse, exchange, pledge, mortgage, abandon, improve, repair,
maintain, insure, lease for any term and otherwise deal with any and
all property of whatsoever kind and nature, and wheresoever situated,
in furtherance of the business or purposes of the Partnership;
(2) to acquire, directly or indirectly, interests in
real estate of any kind and of any type, and any and all kinds of
interests therein, and to determine the manner in which title thereto
is to be held; to manage, insure against loss, protect and subdivide
any real estate, interests therein or parts thereof; to improve,
develop or redevelop any such real estate; to participate in the
ownership and development of any property; to dedicate any property for
public use, to vacate any subdivisions or parts thereof, to resubdivide
any property, to contract to sell, to grant options to purchase or
lease, or to sell any property on any terms; to convey, mortgage,
pledge or otherwise encumber any property, or any part thereof; to
lease any property or any part thereof from time to time, upon any
terms and for any period of time, and to renew or extend leases of any
property, to amend, change or modify the terms and provisions of any
leases of any property and to grant options to lease and options to
renew leases of any property and options to purchase any property; to
partition or to exchange any real property, or any part thereof, for
other real or personal property or to grant easements or charges of any
kind; to relay, convey or assign any right, title or interest in or
about or easement appurtenant to any property or any part thereof; to
construct and reconstruct, remodel, alter, repair, add to or take from
buildings on any real property in which the Partnership owns an
interest; to insure any Person having an interest in or responsibility
for the care, management or repair of any property of the Partnership;
to direct the trustee of any land trust to mortgage, lease, convey or
contract to convey the real estate held in such land trust or to
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execute and deliver deeds, mortgages, notes, and any and all documents
pertaining to the property subject to such land trust or in any matter
regarding such trust; to execute assignments of all or any part of the
beneficial interest in any land trust in which the Partnership owns a
beneficial interest;
(3) to employ, engage or contract with or dismiss
from employment or engagement Persons to the extent deemed necessary by
the General Partner for the operation and management of the Partnership
business, including, without limitation, property managers, leasing
agents, contractors, subcontractors, engineers, architects, surveyors,
mechanics, consultants, accountants, attorneys, insurance brokers, real
estate brokers, financial counsel, professional advisers and others; to
pay compensation for services rendered to the Partnership;
(4) to enter into, make, amend, perform and carry
out, or cancel and rescind, contracts and other obligations, including,
without limitation, guaranties and indemnity agreements for any purpose
pertaining to the business of the Partnership; and to loan money to,
borrow money from and engage in transactions with Affiliates of the
Partnership or any other Person;
(5) to borrow money or procure loans and advances
from any Person for Partnership purposes, and to apply for and secure,
from any Person, credit or accommodations, without limitation as to
amount; to incur liabilities and obligations, direct or contingent and
of every kind and nature, with or without security; to assume
outstanding liabilities, obligations and indebtedness in connection
with the acquisition by the Partnership of any real or personal
property or other assets; to repay, discharge, settle, adjust,
compromise or liquidate any such loan, advance, credit, obligation or
liability; and to draw, make, accept, endorse, execute and issue
promissory notes, drafts, bills of exchange, warrants, bonds,
debentures, evidences of indebtedness end other instruments, and to
secure the payment thereof, the interest thereon and any other
obligations or liabilities relating thereto, in any manner, including,
without limitation, by mortgage on, security interest in or pledge of,
or conveyance or assignment in trust of, the whole or any part of the
assets of the Partnership, real, personal or mixed, including contract
rights and options, whether at the time owned or thereafter acquired,
and future earnings, and to sell, pledge or otherwise dispose of such
securities or other obligations of the Partnership for the furtherance
of any purpose of the Partnership, and to guaranty or indemnify any
Person in connection with any of the foregoing or any other activity of
the Partnership;
(6) to pledge, hypothecate, mortgage, assign,
deposit, deliver, enter into sale and leaseback arrangements or
otherwise give as security or as additional or substitute security, or
sell or otherwise dispose of any and all Partnership property, tangible
or intangible, including, without limitation, real estate and
beneficial interests in land trusts, and to make substitutions thereof,
and to receive any proceeds thereof upon the release or surrender
thereof; to sign, execute and deliver any and all assignments, deeds
and other contracts and instruments in writing; to authorize, give,
make, procure, accept and receive moneys, payments, property, notices,
demands, vouchers, receipts, releases, compromises and adjustments; to
accept or take title to any real or personal property or other assets
to be acquired by the Partnership subject to mortgages, assignments,
security interests or obligations of any kind; to waive notices,
demands and protests and authorize and execute waivers of every kind
and nature; to enter into,
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make, execute, deliver and receive written agreements, undertakings and
instruments of every kind and nature; to give oral instructions and
make oral agreements; and generally to do any and all other acts and
things incidental to any of the foregoing or with reference to any
dealings or transactions which the General Partner may deem necessary,
proper or advisable to effect or accomplish any of the foregoing or to
carry out the business and purposes of the Partnership;
(7) to acquire and enter into any contract of
insurance which the General Partner deems necessary or appropriate for
the protection of the Partnership, for the conservation of the
Partnership's assets or for any purpose convenient or beneficial to the
Partnership;
(8) to conduct any and all banking transactions on
behalf of the Partnership; to adjust and settle checking, savings and
other accounts with such institutions as the General Partner shall deem
appropriate; to draw, sign, execute, accept, endorse, guarantee,
deliver, receive and pay any checks, drafts, bills of exchange,
acceptances, notes, obligations, undertakings and other instruments for
or relating to the payment of money in, into or from any account in the
Partnership's name; to hold, manage, invest and reinvest cash and other
assets of the Partnership; to execute, procure, consent to and
authorize extensions and renewals of any of the foregoing; to make
deposits into and withdrawals from the Partnership's bank accounts and
to negotiate or discount commercial paper, acceptances, negotiable
instruments, bills of exchange and dollar drafts; and to invest funds
of the Partnership;
(9) to demand, sue for, receive and otherwise take
steps to collect or recover all debt, rents, proceeds, interests,
dividends, goods, chattels, income from property, damages and all other
property, to which the Partnership may be entitled or which are or may
become due the Partnership from any Person; to commence, prosecute or
enforce, or to defend, answer or oppose, contest and abandon all legal
proceedings in which the Partnership is or may hereafter be interested;
and to settle, compromise or submit to arbitration any accounts, debts,
claims, disputes and matters which may arise between the Partnership
and any other Person and to grant an extension of time for the payment
or satisfaction thereof on any terms, with or without security;
(10) to make arrangements for financing, including the taking of all action
deemed necessary or appropriate by the General Partner to cause any approved
loans to be closed;
(11) to take all reasonable measures necessary to
ensure compliance by the Partnership with applicable statutes, rules
and regulations, and other contractual obligations and arrangements
entered into by the Partnership from time to time in accordance with
the provisions of this Agreement, including periodic reports as
required to be submitted to lenders, and using all due diligence to
ensure that the Partnership is in compliance with its contractual
obligations;
(12) to prepare and file tax, regulatory and other
filings, or to render periodic or other reports to governmental or
other agencies having jurisdiction over the business or assets of the
Partnership;
(13) to make any expenditures, to lend or borrow
money or to prepay loans, to permit the Partnership to make
distributions to its Partners in such amounts as will permit the
Company (so long as it qualifies as a REIT)
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to avoid the payment of any federal income tax (including, for this
purpose, any excise tax pursuant to Section 4981 of the Code) and to
make distributions to its shareholders in amounts sufficient to permit
the Company to maintain REIT status;
(14) to distribute Available Cash Flow or other Partnership assets in
accordance with this Agreement;
(15) to merge or combine the Partnership with or into another Person;
(16) to establish one or more divisions of the Partnership;
(17) to form or acquire an interest in, and to
contribute property to, any corporations, trusts, limited or general
partnerships, limited liability companies, joint ventures or other
relationships that it deems desirable;
(18) to undertake any action in connection with the
Partnership's direct or indirect investment in any other Person
(including, without limitation, the contribution or lending of funds by
the Partnership to such Persons);
(19) to determine the fair market value of any
property contributed to the Partnership or any Partnership assets
distributed in kind, using such reasonable method of valuation as the
General Partner may adopt;
(20) to exercise, directly or indirectly, through any
attorney-in-fact acting under a general or limited power of attorney,
any right, including the right to vote, appurtenant to any asset or
investment held by the Partnership;
(21) to exercise any of the powers of the General Partner
enumerated in this Agreement on behalf of or in connection with any or
any other Person in which the Partnership has a direct or indirect
interest, or jointly with any such Person;
(22) to exercise any of the powers of the General
Partner enumerated in this Agreement on behalf of any Person in which
the Partnership does not have an interest pursuant to contractual or
other arrangements with such Person;
(23) to issue additional Partnership Interests pursuant to the terms of
this Agreement;
(24) to maintain the Partnership's books and records;
(25) to act in any state or nation in which the Partnership may lawfully
act, for itself or as principal, agent or representative for any Person with
respect to any business of the Partnership;
(26) to apply for, register, obtain, purchase or
otherwise acquire trademarks, trade names, labels and designs relating
to or useful in connection with any business of the Partnership, and to
use, exercise, develop and license the use of the same;
(27) to pay or reimburse any and all actual fees, costs and expenses
incurred in the formation and organization of the Partnership;
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(28) to do all acts which are necessary, customary or appropriate for the
protection and preservation of the Partnership's assets, including the
establishment of reserves; and
(29) in general, to exercise all of the general rights, privileges and
powers permitted to be had and exercised by the provisions of this Agreement or
the Act.
(b) Each Limited Partner agrees that the General Partner is authorized to
execute, deliver and perform the above-mentioned agreements and transactions on
behalf of the Partnership without any further act, approval or vote of the
Partners, notwithstanding any other provision of this Agreement (except as
provided in Section 7.3), the Act or any applicable law, rule or regulation, to
the fullest extent permitted under the Act or other applicable law, rule or
regulation. The execution, delivery or performance by the General Partner or the
Partnership of any agreement authorized or permitted under this Agreement shall
not constitute a breach by the General Partner of any duty that the General
Partner may owe the Partnership or the Limited Partners or any other Persons
under this Agreement or of any duty stated or implied by law or equity.
(c) At all times from and after the date hereof, the General Partner may
cause the Partnership to establish and maintain at any and all times working
capital accounts and other cash or similar balances in such amounts as the
General Partner, in its sole and absolute discretion, deems appropriate and
reasonable from time to time.
(d) In exercising its authority under this Agreement, the General Partner
may, but shall be under no obligation to, take into account the tax consequences
to any Partner of any action taken by it. The General Partner and the
Partnership shall not have liability to a Limited Partner under any
circumstances as a result of an income tax liability incurred by such Limited
Partner as a result of an action (or inaction) by the General Partner taken
pursuant to its authority under this Agreement and in accordance with the terms
of Section 7.3
Section 7.3 Restrictions on General Partner Authority.
(a) Notwithstanding any provisions of Section 7.2 of this Agreement,
the General Partner shall not cause the Partnership to take any action expressly
prohibited to be taken by the Partnership pursuant to Section 3.2(b) of this
Agreement or in contravention of an express prohibition or limitation of this
Agreement without the written consent of a Majority in Interest of the Limited
Partners or such other percentage of the Limited Partners as may be specifically
provided for herein.
(b) Except as provided in Article XII hereof, the General Partner may
not cause the Partnership to engage in a Terminating Capital Transaction
(including by way of merger, consolidation or other combination with any other
Person), without the consent of a Majority in Interest of the Limited Partners
and the required consent, if any, of the holders of Preferred Units.
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Section 7.4 Restrictions on Transfers or Withdrawal.
(a) The General Partner shall not Transfer all or any part of its General
Partner Interest; unless such Transfer is made: (i) to any Person which is
wholly owned by the General Partner and qualifies as a Qualified REIT
Subsidiary, or (ii) with the consent of a Majority in Interest of the Limited
Partners (excluding the General Partner and its Affiliates). If all or any part
of the General Partner Interest is transferred to a Qualified REIT Subsidiary,
then the transfer of any interest in that Qualified REIT Subsidiary shall be
subject to the restrictions, and must comply with all of the conditions, set
forth in this Section 7.4(a).
(b) Notwithstanding Section 7.4(a), the Company may not withdraw as General
Partner or Transfer any of its General Partner Interest unless:
(i) following such withdrawal or Transfer, the Percentage Interests held by
the General Partner(s) constituting the General Partner Interest, is at least
one percent (1%) of all Partnership Interests;
(ii) the transferee of the General Partner Interest consents to be liable
for all obligations and responsible for all duties of the General Partner;
(iii) the transferee executes such instruments as may be necessary to
effectuate such admission and to confirm the agreement of such transferee to be
bound by all the terms and provisions of this Agreement with respect to the
Partnership Interest so acquired; and
(iv) the transferee otherwise satisfied the conditions to be admitted as an
Additional Partner pursuant to Section 10.1 of this Agreement.
(c) It shall be a condition to any Transfer otherwise permitted pursuant to
this Section 7.4 that the transferee assumes by express agreement (or pursuant
to a statutory merger or consolidation wherein all obligations and liabilities
of the General Partner are assumed by a successor trust or corporation by
operation of law) all of the obligations of the transferor General Partner,
whether set forth in this Agreement with respect to such Transferred General
Partner Interest or in any other agreement. No such Transfer (other than
pursuant to a statutory merger or consolidation wherein all obligations and
liabilities of the transferor General Partner are assumed by a successor trust
or corporation by operation of law) shall relieve the transferor General Partner
of its obligations under this Agreement or in any other agreement without the
consent of a Majority in Interest of the Limited Partners. In connection with
any such permitted Transfer, the successor General Partner shall be deemed
admitted as of the Effective Date of Transfer and shall continue the business of
the Partnership without dissolution.
Section 7.5 Operation in Accordance with REIT Requirements.
The Partners acknowledge and agree that the General Partner has the
authority to cause the Partnership to be operated in a manner that will enable
the Company to (i) satisfy all of the REIT Requirements, and (ii) avoid the
imposition of any federal income or excise tax liability on the Company. The
General Partner has the authority to cause the Partnership to avoid taking any
action which would result in the Company ceasing to satisfy the REIT
Requirements or would result in the imposition of any federal income or excise
tax liability on the Company .
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Section 7.6 Reimbursement of the General Partner.
(a) Except as provided in this Section 7.6 and elsewhere in this
Agreement (including the provisions of Section 7.7 and Articles V, VI and XII of
this Agreement regarding distributions, payments, and allocations to which it
may be entitled), the General Partner shall not be compensated for its services
as general partner of the Partnership.
(b) The General Partner shall be reimbursed on a monthly basis, or such
other basis as the General Partner may determine in its sole and absolute
discretion, for all expenses that it incurs relating to the ownership and
operation of the properties of, or for the benefit of, the Partnership,
including any compensation it pays for accounting, administrative, legal,
technical, management and other services rendered to the Partnership. The
Partnership shall also assume, and pay when due, all Administrative Expenses,
including REIT Expenses; all such Expenses shall be reimbursed to the General
Partner and the Company (if different than the General Partner) to the extent
they are paid by the General Partner or the Company (if different than the
General Partner). Any such reimbursements provided for in this Section 7.6(b)
shall be in addition to any reimbursement to the General Partner or the Company
(if different than the General Partner) as a result of indemnification pursuant
to Article XIV hereof.
(c) The General Partner and the Company (if different than the General
Partner) shall also be reimbursed for all expenses it incurs relating to the
organization and formation of the Partnership, the issuance of additional
Partnership Units or other Partnership Interests, or the issuance of additional
Company Shares pursuant to Article XI of this Agreement.
(d) If and to the extent any reimbursements to the General Partner or the
Company (if different than the General Partner), as the case may be, are for
REIT Expenses, such reimbursements shall be treated as distributions to such
Person, and the General Partner or the Company (if different than the General
Partner), as the case may be, shall be specially allocated items of Partnership
gross income or gain in an amount equal to such reimbursements.
Section 7.7 Contracts with Affiliates.
(a) The Partnership may enter into contracts or agreement for (i) the
management, operation, maintenance upkeep and repair of the properties and
assets of the Partnership, and/or (ii) for the administration and supervision of
the day-to-day activities of the Partnership, with the Company or its
Affiliates, on such terms and conditions as the General Partner, in its sole
discretion, deems to be fair, and in the best interests of the Partnership.
(b) The Partnership may lend or contribute funds or other assets to
Subsidiaries or other Persons in which it has an equity investment and such
Persons may borrow funds from the Partnership, on terms and conditions
established in the sole and absolute discretion of the General Partner. The
foregoing authority shall not create any right or benefit in favor of any
Subsidiary or any other Person.
(c) The Partnership may transfer assets to joint ventures, other
partnerships, corporations or other business entities in which it is or thereby
becomes a participant upon such terms and subject to such conditions consistent
with this Agreement and applicable law as the General Partner, in its sole and
absolute discretion, believes are advisable.
(d) Except as expressly permitted by this Agreement, neither the General
Partner nor any of its Affiliates shall sell, transfer or convey any property
to,
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or purchase any property from, the Partnership, directly or indirectly, except
pursuant to transactions that are determined by the General Partner in good
faith to be fair and reasonable and no less favorable to the Partnership than
would be obtained from an unaffiliated third party.
(e) The General Partner, in its sole and absolute discretion and
without the approval of the Limited Partners, may propose and adopt on behalf of
the Partnership employee benefit plans, stock option plans, and similar plans
funded by the Partnership for the benefit of employees of the General Partner,
the Partnership, Subsidiaries, or any Affiliate of any of them in respect of
services performed, directly or indirectly, for the benefit of the Partnership,
the General Partner, or any Subsidiaries.
(f) The General Partner is expressly authorized to enter into, in the
name and on behalf of the Partnership, a right of first opportunity arrangement
and other conflict avoidance agreements with various Affiliates of the
Partnership and the General Partner, on such terms as the General Partner, in
its sole and absolute discretion, believes are advisable.
Section 7.8 General Partner Participation.
All activities and business operations of the General Partner,
including but not limited to, activities pertaining to the acquisition,
development, redevelopment and ownership of properties, shall be conducted
directly or indirectly, through the Partnership or any Subsidiary; any property
acquisitions shall henceforth be acquired through the Partnership or any
Subsidiary; and, except as provided below, any funds raised by the General
Partner, whether by issuance of stock, borrowing or otherwise, will be made
available to the Partnership, whether as Capital Contributions, loans, or
otherwise, as appropriate. Notwithstanding the provisions of the preceding
sentence, the General Partner shall have the right to: (a) form Qualified REIT
Subsidiaries to act as general partners of the Partnership or its Subsidiaries,
and (b) to borrow money or issue Preferred Shares and lend the proceeds of such
borrowing or lend or contribute in exchange for Preferred Units the proceeds
obtained from the issuance of such Preferred Shares for the purpose of enabling
the Partnership or any of its Subsidiaries to acquire, maintain, renovate or
expand any property or to refinance any of its indebtedness. Without the
approval of a Majority in Interest of the Limited Partners, the General Partner
shall not, directly or indirectly, participate in or otherwise acquire any
interest in any real or personal property other than in accordance with this
Section 7.8.
Section 7.9 Liability of the General Partner.
(a) Notwithstanding anything to the contrary set forth in this
Agreement, none of the General Partner, any of its Affiliates or any of their
respective directors, trustees, managers, officers, shareholders, members, or
any other Person acting on their behalf pursuant hereto shall be liable,
responsible, or accountable, in damages or otherwise, to the Partnership, any
Partners or any Assignee, for losses sustained or liabilities incurred as a
result of errors in judgment or of any act or omission if the Person's conduct
or omission to act was taken in good faith and the Person was not guilty of
fraud, willful misconduct, or gross negligence.
(b) The Limited Partners expressly acknowledge that the General Partner
is acting on behalf of the Partnership and the shareholders of the Company
collectively, that the General Partner is under no obligation, except as
provided at Sections 5.1 and 12.2 of this Agreement, to consider the separate
interests of the Limited Partners (including, without limitation, the tax
consequences to Limited Partners or Assignees) in deciding whether to cause the
Partnership to take (or
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decline to take) any actions, and that the General Partner shall not be liable
for monetary damages for losses sustained, liabilities incurred, or benefits not
derived by Limited Partners in connection with such decisions, provided that the
General Partner has acted in good faith. The General Partner acknowledges that
it owes fiduciary duties to its shareholders, to the shareholders of the
Company, and to the Limited Partners, and it shall use its reasonable efforts to
discharge such duties to each; provided, however, that in the event of an
apparent conflict between the interests of the shareholders of the General
Partner and the Company and the interests of the Limited Partners, the Limited
Partners agree that the General Partner shall discharge its fiduciary duties to
the Limited Partners by acting in the best interests of the shareholders of the
Company and the General Partner.
(c) Subject to its obligations and duties as General Partner set forth
in Section 7.2 hereof, the General Partner may exercise any of the powers
granted to it by this Agreement and perform any of the duties imposed upon it
hereunder either directly or by or through its agents. The General Partner shall
not be responsible for any misconduct or negligence on the part of any such
agent appointed by the General Partner in good faith.
(d) Any amendment, modification or repeal of this Section 7.9 or any
provision hereof shall be prospective only and shall not in any way affect the
limitations on the General Partner's liability to the Partnership and the
Limited Partners under this Section 7.9 as in effect immediately prior to such
amendment, modification or repeal with respect to claims arising from or
relating to matters occurring, in whole or in part, prior to such amendment,
modification or repeal, regardless of when such claims may arise or be asserted.
Section 7.10 Other Matters Concerning the General Partner
--------------------------------------------
(a) The General Partner may rely and shall be protected in acting or
refraining from acting upon any resolution, certificate, statement, instrument,
opinion, report, notice, request, consent, order, bond, debenture, or other
paper or document believed by it in good faith to be genuine and to have been
signed or presented by the proper party or parties.
(b) The General Partner may consult with legal counsel, accountants,
appraisers, management consultants, investment bankers, architects, engineers,
environmental consultants and other consultants and advisers selected by it, and
any act taken or omitted to be taken in reliance upon the opinion of such
Persons as to matters which such General Partner reasonably believes to be
within such Person's professional or expert competence shall be conclusively
presumed to have been done or omitted in good faith and in accordance with such
opinion.
(c) The General Partner shall have the right, in respect of any of its
powers or obligations hereunder, to act through any of its duly authorized
officers and a duly appointed attorney or attorneys-in-fact. Each such attorney
shall, to the extent provided by the General Partner in the power of attorney,
have full power and authority to do and perform all and every act and duty which
is permitted or required to be done by the General Partner hereunder.
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Section 7.11 Title to Partnership Assets
Title to Partnership assets, whether real, personal or mixed and whether
tangible or intangible, shall be deemed to be owned by the Partnership as an
entity, and neither the General Partner nor any other Partner or Interest
Holder, individually or collectively, shall have any ownership interest in such
Partnership assets or any portion thereof. Title to any or all of the
Partnership assets may be held in the name of Partnership, the General Partner
or one or more nominees, as the General Partner may determine, including
Affiliates of the General Partner. The General Partner hereby warrants that any
Partnership assets for which legal title is held in the name of the General
Partner shall be held by the General Partner for the use and benefit of the
Partnership in accordance with the provisions of this Agreement; provided,
however, that the General Partner shall use its best efforts to cause beneficial
and record title to such assets to be held in the name of the Partnership as
soon as reasonably practicable. All Partnership assets shall be recorded as the
property of the Partnership in its books and records, irrespective of the name
in which legal title to such Partnership assets is held.
Section 7.12 Reliance by Third Parties
Notwithstanding anything to the contrary in this Agreement, any Person
dealing with the Partnership shall be entitled to assume that the General
Partner has full power and authority, without consent or approval of any other
Partner or Person, to encumber, sell or otherwise use in any manner any and all
assets of the Partnership and to enter into any contracts on behalf of the
Partnership, and take any and all actions on behalf of the Partnership and such
Person shall be entitled to deal with the General Partner as if the General
Partner were the Partnership's sole party in interest, both legally and
beneficially. Each Limited Partner hereby waives any and all defenses or other
remedies which may be available against such Person to contest, negate or
disaffirm any action of the General Partner in connection with any such dealing.
In no event shall any Person dealing with the General Partner or its
representatives be obligated to ascertain that the terms of this Agreement have
been complied with or to inquire into the necessity or expedience of any act or
action of the General partner or its representatives. Each and every
certificate, document or other instrument executed on behalf of the Partnership
by the General Partner or its representatives shall be conclusive evidence in
favor of any and every Person relying thereon or claiming thereunder that (a) at
the time of the execution and delivery of such certificate, document or
instrument, this Agreement was in full force and effect; (b) the Person
executing and delivering such certificate, document or instrument was duly
authorized and empowered to do so for and on behalf of the Partnership; and (c)
such certificate, document or instrument was duly executed and delivered in
accordance with the terms and provisions of this Agreement and is binding upon
the Partnership.
Section 7.13 Issuance of Additional Partnership Units and Preferred Units.
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At any time after the date hereof, subject to the provisions of Section
7.14 hereof, the General Partner may, upon its determination that the issuance
of additional Partnership Units ("Additional Units") is in the best interests of
the Partnership, cause the Partnership to issue Additional Units to any existing
Partner or issue Additional Units to and admit any Person as a Partner in
exchange for the contribution by such Person of cash and/or property which the
General Partner determines, in its sole discretion, is desirable to further the
purposes of the Partnership under Section 3.1 hereof and has a value that
justifies the issuance of such Additional Units. In the event that Additional
Units are issued by the Partnership pursuant to this Section 7.13, the number of
Partnership Units issued shall be determined by dividing the Gross Asset Value
of the property contributed
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(reduced by the amount of any indebtedness assumed by the Partnership or to
which such property is subject) as of the date of contribution to the
Partnership (the "Contribution Date") by the Deemed Partnership Unit Value,
computed as of the Trading Day immediately preceding the Contribution Date.
In addition, the General Partner may, upon its determination that the
issuance of Preferred Units is in the best interests of the Partnership, issue
Preferred Units in accordance with Section 4.2(c) hereof.
The General Partner shall be authorized on behalf of each of the Partners
to amend this Agreement to reflect the admission of any Partner or any increase
in the Partnership Units or Preferred Units of any Partner in accordance with
the provisions of this Section 7.13. The Limited Partners hereby irrevocably
appoint the General Partner as their attorney-in-fact, coupled with an interest,
solely for the purpose of executing and delivering such documents, and taking
such actions (other than granting any consent of such Limited Partners), as
shall be reasonably necessary in connection with the provisions of this Section
7.13.
Section 7.14 Restrictions on Issuance of Additional Units
--------------------------------------------
In addition to any other restrictions herein contained, in no
event may any new Partnership Unit or Preferred Unit be issued by the
Partnership: (a) to any Person which lacks the legal right, power or capacity to
own a Partnership Unit or Preferred Unit; (b) in violation of applicable law;
(c) if such issuance would immediately or with the passage of time cause the
Company to fail to comply with the REIT Requirements, such determination to be
made assuming that all Partners comply with the REIT Requirements immediately
prior to the proposed issuance; (d) if such issuance would cause the Partnership
to become with respect to any Partner that is an employee benefit plan subject
to Title I of ERISA, a "party-in-interest" (as defined in ss. 3(14) of ERISA) or
a "disqualified person" (as defined in Code ss. 4975(e)); (e) if such issuance
would, in the opinion of counsel to the Partnership, cause any portion of the
underlying assets of the Partnership to constitute assets of any Partner that is
an employee benefit plan pursuant to Department of Labor Regulations
ss.2510.3-101; (f) if such issuance would result in a deemed distribution to any
Partner attributable to a failure to meet the requirements of Regulations ss.
1.752-2(d)(1), unless such Partner consents thereto; or (g) if such issuance
would cause any lender to the Partnership to hold in excess of ten percent (10%)
of the Partnership Interests that would, pursuant to the Regulations under Code
ss. 752 or any successor provision, cause a loan by such lender to constitute
Partner Nonrecourse Debt.
Section 7.15 Limitation of Liability of Directors, Shareholders and Officers of
the General Partner.
Any obligation or liability whatsoever of the General Partner which may
arise at any time under this Agreement or any other instrument, transaction, or
undertaking contemplated hereby shall be satisfied, if at all, out of the assets
of the General Partner or the Partnership only. No such obligation or liability
shall be personally binding upon, nor shall resort for the enforcement thereof
be had to, any of the General Partner's directors, shareholders, members,
trustees, officers, employees, or agents, regardless of whether such obligation
or liability is in the nature of contract, tort or otherwise.
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ARTICLE VIII
RIGHTS AND OBLIGATIONS OF LIMITED PARTNERS
Section 8.1 Limitation of Liability
The Limited Partners shall have no liability under this Agreement except as
expressly provided in this Agreement, or under the Act.
Section 8.2 Management of Business
No Limited Partner or Assignee (other than the General Partner, any of its
Affiliates or any officer, director, employee, partner, agent or trustee of the
General Partner, the Partnership or any of their Affiliates, in their capacity
as such) shall take part in the operation, management or control (within the
meaning of the Act) of the Partnership's business, transact any business in the
Partnership's name or have the power to sign documents for or otherwise bind the
Partnership. The transaction of any such business by the General Partner, any of
its Affiliates or any officer, director, employee, partner, agent or trustee of
the General Partner, the Partnership or any of their Affiliates, in their
capacity as such, shall not affect, impair or eliminate the limitations on the
liability of the Limited Partners or Assignees under this Agreement.
Section 8.3 Withdrawal and Transfer.
Except as otherwise provided in Articles IX and XI of this Agreement, no
Limited Partner or Assignee may Transfer all or any portion of its Limited
Partner Interests, and no Limited Partner may withdraw as a Limited Partner from
the Partnership, except with the prior written consent of the General Partner.
Any attempt by a Limited Partner to withdraw from the Partnership and any
Transfer or attempted Transfer of Partnership Interests by a Limited Partner or
Assignee, other than in compliance with this Agreement, shall have no legal
effect and shall be void ab initio.
Section 8.4 Outside Activities of Limited Partners
(a) Subject to any other agreements entered into by a Limited Partner or
its Affiliates with the Partnership or any of its Affiliates, any Limited
Partner (other than the General Partner) and any officer, director, employee,
agent, trustee, Affiliate or shareholder of any Limited Partner (other than the
General Partner) shall be entitled to and may have business interests and engage
in business activities in addition to those relating to the Partnership,
including business interests and activities that are in direct competition with
the Partnership or that are enhanced by the activities of the Partnership.
Neither the Partnership nor any Partners shall have any rights by virtue of this
Agreement in any business ventures of any Limited Partner or Assignee. None of
the Limited Partners nor any other Person shall have any rights by virtue of
this Agreement or the partnership relationship established hereby in any
business ventures of any other Person and such Persons shall have no obligation
pursuant to this Agreement to offer any interest in any such business ventures
to the Partnership, any Limited Partner or any such other Person, even if such
opportunity is of a character which, if presented to the Partnership, any
Limited Partner or such other Person, could be taken by such Person.
(b) Notwithstanding the foregoing, no Limited Partner or Interest Holder or
any Affiliate thereof shall take any action which would have the effect of
causing the Company to fail to satisfy the REIT Requirements. Each Limited
Partner
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and Interest Holder shall use its best efforts to notify the General Partner on
a timely basis of any transaction that could reasonably be expected to have such
effect.
Section 8.5 Provision of Information.
(a) With respect to any information required to be provided to the Limited
Partners pursuant to ss.17-305 (or any successor thereto) of the Act: (i) the
cost of preparing or providing any such information (including, without
limitation, fees paid to any person or entity in connection therewith) shall be
paid by the requesting Partner and in no event shall such information be
required to be given to the requesting Partner until such payment has been made
to the Partnership; (ii) in no event shall any financial statements of the
Partnership be required to be provided except for such statements as have
already been prepared or are otherwise required to be provided to the Limited
Partners under this Agreement and in no event shall any statements which have
been prepared be required to be audited, reviewed or other wise examined by a
certified public accountant, if the statements are not otherwise required to be
so audited, reviewed or examined pursuant to the provisions of this Agreement;
and (iii) in no event shall such information be required to be furnished until
forty-five (45) days after such request and unless the information is already in
the possession of the Partnership.
(b) Notwithstanding any other provision of this Section 8.5, the General
Partner may keep confidential from the Limited Partners, for such period of time
as the General Partner determines in its sole and absolute discretion to be
reasonable, any information that is not material to the Limited Partners and
that (i) the General Partner reasonably believes to be in the nature of trade
secrets or other information the disclosure of which the General Partner in good
faith believes is not in the best interests of the Partnership or could damage
the Partnership or its business or (ii) the Partnership is required by law or by
agreements with an unaffiliated third party to keep confidential.
Section 8.6 Power of Attorney.
(a) Each Limited Partner and Assignee constitutes and appoints the General
Partner, any Liquidator (as defined hereafter), and authorized officers and
attorneys-in-fact of each, and each of such Persons acting separately, in each
case with full power of substitution, as its true and lawful agent and
attorney-in-fact, with full power and authority in its name, place and stead to:
execute, swear to, acknowledge, deliver, file and record in the appropriate
public offices (i) all certificates, documents and other instruments (including,
without limitation, this Agreement and the Certificate and all amendments or
restatements thereof) that the General Partner or the Liquidator deems
appropriate or necessary to form, qualify or continue the existence or
qualification of the Partnership as a limited partnership (or a partnership in
which the limited partners have limited liability) in the State of Delaware and
in all other jurisdictions in which the Partnership may conduct business or own
property; (ii) all instruments that the General Partner deems appropriate or
necessary to reflect any amendment, change, modification or restatement of this
Agreement in accordance with its terms; (iii) all conveyances and other
instruments or documents that the General Partner deems appropriate or necessary
to reflect the dissolution and liquidation of the Partnership pursuant to the
terms of this Agreement, including, without limitation, a certificate of
cancellation; (iv) all instruments relating to the admission, withdrawal,
removal or substitution of any Partner or Transfer of any Partnership Interest
pursuant to the provisions of this Agreement or the Capital Contribution of any
Partner; and (v) all certificates, documents and other instruments relating to
the determination of the rights, privileges and preferences of any Partnership
Interests.
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(b) The foregoing power of attorney is irrevocable and a power coupled with
an interest, in recognition of the fact that each of the Partners will be
relying upon the power of the General Partner or Liquidator to act as
contemplated by this Agreement in any filing or other action by it on behalf of
the Partnership. The power of attorney shall survive the death, bankruptcy,
subsequent incapacity or incompetency of a Limited Partner or Assignee to the
effect and extent permitted by law, and the Transfer of all or any portion of
such Person's Partnership Interests and shall extend to such Person's heirs,
successors, assigns and personal representatives.
(c) Each such Limited Partner or Assignee hereby agrees to be bound by any
representation made by the General Partner or any Liquidator, acting in good
faith pursuant to such power of attorney, and each Limited Partner or Assignee
hereby waives any and all defenses which may be available to contest, negate or
disaffirm the action of the General Partner or Liquidator, taken in good faith
under such power of attorney and in accordance with the provisions of this
Agreement. Each Limited Partner or Assignee shall execute and deliver to the
General Partner or the Liquidator, within fifteen (15) days after receipt of the
General Partner's or Liquidator's request therefor, such further designation,
powers of attorney and other instruments as the General Partner or the
Liquidator, as the case may be, deems necessary to effect the provisions of this
Section 8.6.
ARTICLE IX
TRANSFERS OF LIMITED PARTNER INTERESTS
Section 9.1 Transfers By Limited Partners.
(a) Except as otherwise provided in Section 9.2 of this Agreement, no
Limited Partner shall have the right, directly or indirectly, to Transfer all or
any part of his Partnership Interest to any Person without the prior written
consent of the General Partner, which consent may be given or withheld by the
General Partner in its sole and absolute discretion.
(b) A Limited Partner may not Transfer less than a whole Partnership Unit
at any time.
(c) The Limited Partners acknowledge that the Partnership Interests have
not been registered under any federal or state securities laws and, as a result
thereof, they may not be sold or otherwise transferred, except in compliance
with such laws. Notwithstanding anything to the contrary contained in this
Agreement, no Partnership Interest may be Transferred unless such Transfer is
exempt from registration under any applicable securities laws or such Transfer
is registered under such laws, it being acknowledged that the Partnership has no
obligation to take any action which would cause any such Partnership Interests
to be registered.
Section 9.2 Permitted Transfers By Limited Partners.
(a) Notwithstanding Section 9.1(a) of this Agreement, consent of the
General Partner for a Transfer shall be deemed to be granted and the conditions
for Transfer shall be deemed to have been satisfied upon the delivery to the
General Partner of written notice of the following Transfers: (i) Transfers of
Partnership Interests (whether outright or in trust) to members of a Partner's
Immediate Family; (ii) transfers of Partnership Interests to an Affiliate of
such Partner or to another Partner; (iii) transfers of Partnership Interests
pursuant to an exercise of Redemption Rights; or (iv) pledges to secure bona
fide indebtedness to institutional lenders.
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(b) In addition, for Transfers that are not described in Section 9.2(a), a
Limited Partner may transfer its Limited Partner Interests only upon the
following conditions:
(i) the transferor Limited Partner delivers to the General Partner advance
written notice of the proposed Transfer, which notice shall state, to the best
of the transferor's knowledge, that such Transfer will not violate any of the
restrictions set forth in Section 9.3 hereof; and
(ii) the Assignee provides any other information requested by the General
Partner.
(c) Notwithstanding that a Limited Partner Interest is otherwise permitted
to be Transferred pursuant to this Section 9.2, an Assignee of a Partnership
Interest shall not be admitted as a Substituted Limited Partner without (i) the
prior written consent of the General Partner, which consent may be given or
withheld by the General Partner in its sole and absolute discretion and (ii) the
compliance by the Assignee with all of the other conditions set forth in Section
9.5 of this Agreement.
(d) Any Assignee to whom a Transfer of a Partnership Interest has been made
in accordance with this Section 9.2, but has not been admitted as a Substituted
Limited Partner pursuant to Section 9.5 of this Agreement, shall be deemed to
have assigned to him, and shall be entitled to receive, the Redemption Rights,
the right to receive distributions from the Partnership, and the share of
Profits, Losses and any other items of income, gain, loss, deduction and credit
of the Partnership attributable to the Partnership Interest assigned to such
transferee, but shall not be deemed to be a Partner or a holder of a Partnership
Interest for any other purpose of this Agreement. Such an Assignee shall not be
entitled to exercise voting rights with respect to such Partnership Interests on
any matter presented to the Limited Partners for a vote. In addition, such an
Assignee shall succeed to the obligations of the transferor (unless such
Transfer is a pledge, encumbrance, hypothecation or mortgage, in which case the
Assignee will succeed to such obligations only if it forecloses its security
interest, lien or other encumbrance on the Partnership Interest or if the
Partnership Interest is Transferred to the Assignee in lieu of foreclosure). In
the event any such Assignee desires to make a further Transfer of any such
Partnership Interests, such an Assignee shall be subject to all the provisions
of this Article IX to the same extent and in the same manner as any Limited
Partner desiring to make a Transfer of Partnership Interests.
Section 9.3 Certain Restrictions on Transfer.
(a) Notwithstanding Section 9.2(a) or Section 9.2(b) hereof, except with
the prior written consent of the General Partner, no Limited Partner may
Transfer its Limited Partner Interests:
(i) to any Person that lacks the legal right, power or capacity to own a
Partnership Interest;
(ii) in the event such Transfer would cause the Company to cease to comply
with the REIT Requirements;
(iii) if such Transfer would cause a termination of the Partnership for
federal income tax purposes;
(iv) if such Transfer would, in the opinion of counsel to the Partnership,
cause the Partnership to cease to be classified as a partnership for federal
income tax purposes;
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(v) if such Transfer would result in the Partnership being treated as a
"publicly traded partnership" or is effectuated through an "established
securities market" or a "secondary market (or the substantial equivalent
thereof)" within the meaning of Code ss.7704 and the Regulations thereunder;
(vi) in violation of the Hart-Scott-Rodino Antitrust Improvements Act of
1976;
(vii) to a lender to the Partnership or to any Person who is related
(within the meaning of ss.1.752-4(b) of the Regulations) to any such lender if
the loan from such lender constitutes a Nonrecourse Liability; or
(viii) if the General Partner reasonably believes that such Transfer may:
(A) cause any portion or all of the assets of the Partnership to be deemed,
pursuant to United States Department of Labor Regulation ss.2510.3-101, ERISA or
the Code to be for any purpose of ERISA or Code ss.4975, assets of any Partner
that is an employee benefit plan, or
(B) cause to occur a "prohibited transaction" (as defined in Code
ss.4975(c) or within the meaning of ss.406 of ERISA), or
(C) cause the Partnership to become with
respect to any Person a "party in interest" (as defined in
ss.3(14) of ERISA) or a "disqualified person" (as defined in
Code ss.4975(e) of the Code), or
(D) cause the Partnership to be jointly and
severally liable for any obligation arising under ERISA or the
Code with respect to any "employee benefit plan" as defined in
and subject to ERISA or any "plan" as defined in Code ss.4975.
Any purported Transfer described in this Section 9.3 shall be
void ab initio.
(b) No Preferred Unit may be Transferred by the General Partner to any
Person who is not a General Partner of the Partnership.
Section 9.4 Effective Dates of Transfers.
Transfers pursuant to this Article IX may be made on any day, but for
purposes of this Agreement, the effective date of any such Transfer for purposes
of determining the Percentage Interests of the Assignee and transferor Limited
Partner, shall be the Effective Date of Transfer.
Section 9.5 Substituted Limited Partners
(a) No Assignee shall have the right to become a Substituted Limited
Partner except with the prior written consent of the General Partner, the
granting or denying of which shall be in the General Partner's sole and absolute
discretion, and subject to such conditions, if any, as the General Partner may
impose.
(b) Notwithstanding the granting of the aforementioned consent by the
General Partner, the admission of an Assignee as a Substituted Limited Partner
pursuant to this Section 9.5, shall be further conditioned as follows:
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(i) the execution of an assignment instrument and
other such instruments as the General Partner may deem necessary or
desirable to effect admission of the Assignee as a Substituted Limited
Partner, being in the form and substance satisfactory to the General
Partner;
(ii) the transferor Limited Partner and the Assignee
named therein executing and acknowledging such other instruments as the
General Partner may deem necessary or desirable to effectuate such
admission;
(iii) the Assignee's written acceptance and adoption of all terms and
provisions of this Agreement, as the same may have been amended; and
(iv) such other conditions as the General Partner reasonably may impose.
(c) An Assignee who has been admitted as a Substituted Limited Partner in
accordance with this Section 9.5 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
(d) Upon the admission of a Substituted Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units (or other Partnership Interests that may be issued), and
Percentage Interest of such Substituted Limited Partner and to eliminate or
adjust, if necessary, the name, address and interest of the predecessor of such
Substituted Limited Partner.
(e) The General Partner's failure or refusal to permit an Assignee to
become a Substituted Limited Partner shall not give rise to any cause of action
against the Partnership or any Partner.
(f) For provisions regarding distributions before and after Transfers of
Partnership Interests, see Section 5.1(e) hereof. For provisions regarding
allocations in years when there are Transfers of Partnership Interests, see
Section 6.1(d) hereof .
ARTICLE X
ADMISSION OF NEW PARTNERS
Section 10.1 Admission of Successor General Partner.
--------------------------------------
A transferee of the General Partner Interests who acquires a General
Partner Interest pursuant to Section 7.4 of this Agreement shall be admitted to
the Partnership as the General Partner, in accordance with Section 7.4(c)
hereof. as of the Effective Date of Transfer. In the case of such admission on
any day other than the first day of a calendar year, all items attributable to
the General Partner Interest shall be allocated between the transferor and
transferee in the manner provided in Section 9.5(f) hereof.
Section 10.2 Admission of Additional Limited Partners.
----------------------------------------
(a) No Person may be admitted as a Limited Partner after the date of this
Agreement (an "Additional Limited Partner") except upon the consent of the
General Partner, the granting or denying of which shall be in the General
Partner's sole and absolute discretion.
(b) Notwithstanding the granting of the aforementioned consent by the
General Partner, the admission of a Person as an Additional Limited Partner
shall be further conditioned as follows:
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(i) the execution of a power of attorney and other
such instruments as the General Partner may deem necessary or desirable
to effect admission as an Additional Limited Partner, in such form as
is satisfactory to the General Partner;
(ii) the Person named therein and the Partnership
executing and acknowledging such other instruments as the General
Partner may deem necessary or desirable to effectuate such admission;
(iii) the Person's written acceptance and adoption of all terms and
provisions of this Agreement, as the same may have been amended;
(iv) the admission of such Person will not violate any restrictions set
forth in Section 7.14 or elsewhere in this Agreement; and
(v) such other conditions as the General Partner reasonably may impose.
(c) A Person who has been admitted as an Additional Limited Partner in
accordance with this Section 10.2 shall have all the rights and powers and be
subject to all the restrictions and liabilities of a Limited Partner under this
Agreement.
(d) Upon the admission of an Additional Limited Partner, the General
Partner shall amend Exhibit A to reflect the name, address, number of
Partnership Units or other Partnership Interests, and Percentage Interest of
such Additional Limited Partner.
(e) If any Person is admitted as an Additional Limited Partner in
accordance with this Section 10.2 on any day other than the first day of the
Partnership's fiscal year, the effective date of the admission of that Partner
shall be determined in accordance with Section 9.4 hereof.
Section 10.3 Amendment of Agreement and Certificate.
--------------------------------------
For the admission to the Partnership of any Additional Limited Partner,
the General Partner shall take all steps necessary and appropriate under the Act
to amend the records of the Partnership, to prepare as soon as practical any
necessary amendment of this Agreement (including an amendment of Exhibit A). For
this purpose, the General Partner shall exercise the power of attorney granted
pursuant to Section 8.6 hereof.
ARTICLE XI
REDEMPTION OF PARTNERSHIP UNITS
Section 11.1 Redemption Rights
Except as otherwise provided in Sections 11.3 and 11.4 of this Agreement
and subject to Section 11.2 hereof, each Partner, other than the General Partner
and the Company, shall have the right (the "Redemption Right") to require the
Partnership to redeem on a Specified Redemption Date all or a portion of the
Partnership Units held by such Partner at a redemption price equal to and in the
form of the Cash Amount to be paid by the Partnership as provided in this
Article XI; provided, however, that unless the General Partner otherwise
consents in writing, no Partner may exercise its Redemption Right pursuant to
this Section 11.1 until the earlier of: (a) first anniversary of the completion
of the Initial Public Offering, or (b) December 31, 1999.
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Section 11.2 Exercise of Redemption Rights
(a) The Redemption Right shall be exercised upon the delivery of written
notice (a "Notice of Redemption") to the Partnership (with a copy to the General
Partner and, if different, the Company) by the Partner or Assignee who is
exercising the Redemption Right (the "Redeeming Partner") in the form set forth
in Exhibit B attached hereto.
(b) A Redeeming Partner may not exercise the Redemption Right for less than
five thousand (5,000) Partnership Units or, if such Redeeming Partner holds less
than five thousand (5,000) Partnership Units, all of the Partnership Units held
by Redeeming Partner.
(c) The Redeeming Partner shall have no right, with respect to any
Partnership Units so redeemed, to receive any distributions for which the
Partnership Record Date is on or after the Specified Redemption Date.
(d) An Assignee of a Limited Partner may exercise the Redemption Rights of
such Limited Partner with respect to the Partnership Units Transferred to the
Assignee in accordance with this Agreement and such Limited Partner shall be
deemed to have assigned such Redemption Rights to such Assignee and shall be
bound by the exercise of such Redemption Rights by such Assignee. In connection
with any exercise of Redemption Rights by an Assignee, the Partnership and the
Company shall receive, and shall be entitled to rely on, a certificate from the
Assignee: (i) identifying the Limited Partner who Transferred the Partnership
Units that are the subject of the Redemption Rights and the number of Units so
Transferred; (ii) certifying that the Assignee has full power and authority to
exercise the Redemption Rights; and (iii) accompanied by a copy of the written
instrument, signed by both the transferor and the Assignee, by which the
Partnership Units were Transferred to the Assignee, which copy shall be
certified as true, correct and complete by the Assignee. Upon the Assignee's
exercise of the Redemption Rights in the manner described in this Section
11.2(d), the Cash Amount or Company Shares Amount shall be paid by the
Partnership or the Company directly to such Assignee and not to such Limited
Partner, and such Limited Partner will be deemed to have Transferred its
Partnership Interest to the Partnership or the Company, as appropriate.
Section 11.3 Limitation on Redemption Rights.
(a) Notwithstanding the provisions of Section 11.1 or 11.2 of this
Agreement, a Redeeming Partner shall be deemed to have offered to sell the
Partnership Units described in the Notice of Redemption to the Company and the
Company may, in its sole and absolute discretion, elect to acquire all or part
of such Partnership Units by paying directly to the Redeeming Partner either the
Cash Amount or the Company Shares Amount, as elected by the Company (in its sole
and absolute discretion), on the Specified Redemption Date.
(b) If the Company shall elect to exercise its right to purchase
Partnership Units under Section 11.3(a) hereof with respect to a Notice of
Redemption, it shall so notify the Redeeming Partner within five (5) business
days after its receipt of such Notice of Redemption. Unless the Company (in its
sole and absolute discretion) shall affirmatively exercise its right to purchase
Partnership Units from the Redeeming Partner pursuant to its rights under this
Section 11.3, the Company shall have no further obligation to the Redeeming
Partner or the Partnership with respect to the Redeeming Partner's exercise of
the Redemption Right.
(c) In the event the Company shall exercise its right to purchase all of
the Partnership Units with respect to the exercise of a Redemption Right in the
manner described in Section 11.3(a), the Partnership shall have no obligation to
pay the
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Cash Amount or any other amount to the Redeeming Partner with respect to such
Redeeming Partner's exercise of such Redemption Right. Each of the Redeeming
Partner, the Partnership, and the Company shall treat the transaction between
the Company and the Redeeming Partner for federal income tax purposes as a sale
of the Redeeming Partner's Partnership Units to the Company. Each Redeeming
Partner agrees to execute such documents as the Company may reasonably require
in connection with any issuance of Company Shares upon exercise of the
Redemption Right.
Section 11.4 Prohibition on the Issuance of Company Shares.
---------------------------------------------
Notwithstanding the provisions of Sections 11.1 or 11.3, a Partner shall
not be entitled to exercise the Redemption Right pursuant to Section 11.1, if
the delivery of Company Shares to such Partner on the Specified Redemption Date
(regardless of whether or not the Company would in fact exercise its rights
under Section 11.3) would be prohibited under the Articles of Incorporation of
the Company or would adversely affect the ability of the Company to satisfy all
REIT Requirements.
ARTICLE XII
DISSOLUTION, LIQUIDATION AND TERMINATION
Section 12.1 Dissolution.
(a) The first to occur of the following events ("Dissolution Events") shall
cause the Partnership to dissolve:
(i) subject to Section 12.1(b), any event described
in ss.17-402(a) of the Act (other than a Transfer to a Qualified REIT
Subsidiary described in Section 7.4(a)(i) hereof) by reason of which
the General Partner ceases to be a general partner of the Partnership;
(ii) the election to dissolve the Partnership made in
writing by the General Partner, with the consent of Limited Partners
holding 75% of the Partnership Units held by all Limited Partners;
(iii) the expiration of the term of the Partnership as set forth in Section
2.5 hereof; or
(iv) the entry of a decree of judicial dissolution of
the Partnership pursuant to the provisions of the Act, which decree is
final and not subject to appeal.
(b) If an event described in paragraph (a)(i) of this Section 12.1
occurs, the Partnership shall not dissolve and the Partnership's business shall
continue if, within 90 days after such an event, a Majority in Interest of the
Limited Partners and Partners who hold more than fifty percent (50%) of each
series of Preferred Units then issued and outstanding (with each series voting
as a class) elect in writing to continue the Partnership and appoint, effective
as of the date of such event, a successor General Partner. Absent such an
election and appointment, the event shall be considered a Dissolution Event, and
the Partnership shall be wound up and terminated pursuant to Section 12.2 of
this Agreement.
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Section 12.2 Winding Up.
(a) Upon the occurrence of a Dissolution Event, the Partnership shall
continue solely for the purposes of winding up its affairs in an orderly manner,
liquidating its assets, and satisfying the claims of its creditors and Partners.
No Partner shall take any action that is inconsistent with, or not necessary to
or appropriate for, the winding up of the Partnership's business and affairs.
The General Partner, or, in the event there is no remaining General Partner, any
Person elected by a Majority in Interest of the Limited Partners (the General
Partner or such other Person being referred to herein as the "Liquidator"),
shall be responsible for overseeing the winding up and dissolution of the
Partnership and shall take full account of the Partnership's liabilities and
property and the Partnership property shall be liquidated as promptly as is
consistent with obtaining the fair value thereof, and the proceeds therefrom
shall be applied and distributed in the following order:
(1) First, to the payment and discharge of all of the
Partnership's debts and liabilities to creditors other than the
Partners;
(2) Second, to the payment and discharge of all of the
Partnership's debts and liabilities to the General Partner;
(3) Third, to the payment and discharge of all of the
Partnership's debts and liabilities to the other Partners;
(4) Fourth, after giving effect to
all prior contributions, distributions, and
allocations for all periods, to those Partners with
positive Capital Account balances, pro rata to the
extent of such positive Capital Account balances; and
(5) Fifth, the balance, if any, to the Partners in
accordance with their Percentage Interests.
The General Partner shall not receive any additional compensation for any
services performed pursuant to this Article XII.
(b) Notwithstanding the provisions of Section 12.2.(a) of this
Agreement, if prior to or upon dissolution of the Partnership, the Liquidator
determines that an immediate sale of part or all of the Partnership's assets
would be impractical or would cause undue loss to the Partners, the Liquidator
may, in its sole and absolute discretion, defer for a reasonable time the
liquidation of any assets except those necessary to satisfy liabilities of the
Partnership (including to those Partners as creditors) and/or distribute to the
Partners, in lieu of cash, as tenants in common and in accordance with the
provisions of Section 12.2.(a), undivided interests in such Partnership assets
as the Liquidator deems not suitable for liquidation. Any such distributions in
kind shall be made only if, in the good faith judgment of the Liquidator, such
distributions in kind are in the best interest of the Partners, and shall be
subject to such conditions relating to the disposition and management of such
properties as the Liquidator deems reasonable and equitable and to any
agreements governing the operation of such properties at such time. The
Liquidator shall determine the fair market value of any property distributed in
kind using such reasonable method of valuation as it may adopt.
(c) In the discretion of the Liquidator, a pro rata portion of the
distributions that would otherwise be made to the General Partner and Limited
Partners pursuant to this Article XII may be:
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(1) distributed to a trust
established for the benefit of the General Partner
and Limited Partners for the purposes of liquidating
Partnership assets, collecting amounts owed to the
Partnership, and paying any contingent or unforeseen
liabilities or obligations of the Partnership or the
General Partner arising out of or in connection with
the Partnership. The assets of any such trust shall
be distributed to the General Partner and Limited
Partners from time to time, in the reasonable
discretion of the Liquidator, in the same proportions
as the amount distributed to such trust by the
Partnership would otherwise have been distributed to
the General Partner and Limited Partners pursuant to
this Agreement; or
(2) withheld or escrowed to provide
a reasonable reserve for Partnership liabilities
(contingent or otherwise) and to reflect the
unrealized portion of any installment obligations
owed to the Partnership, provided that such withheld
or escrowed amounts shall be distributed to the
General Partner and Limited Partners in the manner
and order of priority set forth in Section 12.2(a) of
this Agreement as soon as practicable.
Section 12.3 Negative Capital Accounts.
No Partner, whether a General or Limited Partner, shall be liable to
the Partnership or to any other Person to repay or restore all or any portion of
any negative balance outstanding in such Partner's Capital Account, whether such
negative Capital Account results from the allocation of Losses or other items of
deduction and loss to such Partner or from distributions to such Partner. A
negative balance in any Partner's Capital Account shall not be considered an
asset of the Partnership.
Section 12.4 Deemed Distribution and Recontribution.
Notwithstanding any other provision of this Article XII, in the event
the Partnership is considered liquidated within the meaning of Regulations
ss.1.704- 1(b)(2)(ii)(g), but no Dissolution Event has occurred, the
Partnership's property shall not be liquidated, the Partnership's liabilities
shall not be paid or discharged, and the Partnership's affairs shall not be
wound up. Instead, for federal income tax purposes and for purposes of
maintaining Capital Accounts, the Partnership shall be deemed to have
transferred all of its assets and liabilities in accordance with the procedure
set forth in the applicable Regulations under Code ss.708.
Section 12.5 Rights of Limited Partners.
Except as otherwise provided in this Agreement, each Limited Partner
shall look solely to the assets of the Partnership for the return of its Capital
Contributions and shall have no right or power to demand or receive property
other than cash from the Partnership. Except as otherwise provided in this
Agreement, no Limited Partner shall have priority over any other Partner as to
the return of its Capital Contributions, distribution or allocations.
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Section 12.6 Notice of Dissolution
In the event a Dissolution Event occurs or an event occurs that would,
but for the provisions of an election or objection by one or more Partners
pursuant to Section 12.1, result in a dissolution of the Partnership, the
General Partner shall provide within thirty (30) days thereafter written notice
thereof to each of the Partners.
Section 12.7 Termination of Partnership and Cancellation of Certificate of
Limited Partnership.
Upon the completion of the liquidation of the Partnership cash and
property as provided in Section 12.2 hereof, the Partnership shall be
terminated, a certificate of cancellation shall be filed, and all qualifications
of the Partnership as a foreign limited partnership in jurisdictions other than
the State of Delaware shall be canceled and such other actions as may be
necessary to terminate the Partnership shall be taken.
Section 12.8 Reasonable Time for Winding Up.
------------------------------
A reasonable time shall be allowed for the orderly winding-up of the
business and affairs of the Partnership and the liquidation of its assets
pursuant to Section 12.2 hereof, in order to minimize any losses otherwise
attendant upon such winding-up, and the provisions of this Agreement shall
remain in effect between the Partners during the period of liquidation.
ARTICLE XIII
AMENDMENT OF PARTNERSHIP AGREEMENT
Section 13.1 Amendments.
(a) Amendments to this Agreement may only be proposed by the General
Partner. Following such proposal, the General Partner shall submit any proposed
amendment to the Limited Partners. The General Partner shall seek the written
vote of the Partners on the proposed amendment. Except as otherwise provided in
this Agreement, a proposed amendment shall be adopted and be effective as an
amendment hereto if it is approved by the General Partner and a Majority in
Interest of the Limited Partners.
(b) Notwithstanding Section 13.1 (a), the General Partner shall have
the power, without the consent of the Limited Partners, to amend this Agreement
as may be required to facilitate or implement any of the following purposes:
(i) to add to the obligations of the General Partner or surrender any right
or power granted to the General Partner or any Affiliate of the General Partner
for the benefit of the Limited Partners;
(ii) to reflect the admission, termination, or withdrawal of Partners in
accordance with this Agreement;
(iii) to set forth the designations, rights, powers, duties, and
preferences of the Preferred Units in one or more Preferred Unit Designations;
(iv) to reflect a change that is of an inconsequential nature and does not
adversely affect the Limited Partners in any material respect, or to cure any
ambiguity, correct or supplement any provision in this Agreement not
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inconsistent with law or with other provisions, or make other changes
with respect to matters arising under this Agreement that will not be
inconsistent with law or with the provisions of this Agreement; and
(v) to satisfy any requirements, conditions, or
guidelines contained in any order, directive, opinion, ruling or
regulation of a federal or state agency or contained in federal or
state law; and
(vi) to evidence Transfers of Partnership Interests.
The General Partner shall provide notice to the Limited Partners when any action
under this Section 13.1(b) is taken.
(c) Notwithstanding Section 13.1(a) and 13.2(b) hereof, this Agreement
shall not be amended without the consent of each Partner adversely affected if
such amendment would (i) convert a Limited Partner's interest in the Partnership
into a General Partner Interest, (ii) modify the limited liability of a Limited
Partner in a manner adverse to such Limited Partner, (iii) alter rights of the
Partner to receive distributions pursuant to Article V or Article XII, or the
allocations specified in Article VI, (iv) alter or modify the Redemption Right
and Company Shares Amount as set forth in Article XI, and the related
definitions, in a manner adverse to such Partner, (v) cause the termination of
the Partnership prior to the time set forth in Section 12.1, or (vi) amend this
Section 13.1(c). Further, no amendment may alter the restrictions on the General
Partner's authority set forth in Section 7.3 without the consent specified in
that Section.
(d) The General Partner will deliver to each Partner a complete copy of any
amendment to this Agreement.
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ARTICLE XIV
INDEMNIFICATION
Section 14.1 Indemnification of General Partners.
(a) To the fullest extent permitted by law, the Partnership shall and does
hereby indemnify its officers, agents, employees, and contractors, the General
Partner and its Affiliates, and any of the officers, directors, agents,
contractors and employees of the General Partner and its Affiliates
(collectively, the "Indemnitee") from and against any and all losses, claims,
damages, liabilities, joint or several, expenses (including reasonable legal
fees and expenses), judgments, fines, settlements, and other amounts arising
from any and all claims, demands, actions, suits or proceedings (including
arbitration and mediation proceedings), civil, criminal, administrative or
investigative, that relate, directly or indirectly, to the formation, business
or operations of the Partnership in which any Indemnitee may be involved, or is
threatened to be involved, as a party, witness or otherwise, by reason of the
fact that such Person was made a party to a proceeding by reason of status as an
Indemnitee, or his or its liabilities, pursuant to a loan guarantee or otherwise
for any indebtedness of the Partnership or any Subsidiary of the Partnership has
assumed or taken assets subject to whether or not the same shall proceed to
judgment or be settled or otherwise be brought to a conclusion, except only if
and to the extent that it is finally adjudicated that the act or omission of the
Indemnitee was material to the matter giving rise to the proceeding and was
committed with fraud, gross negligence or willful misconduct. The termination of
any proceeding by judgment, order or settlement does not create a presumption
that the Indemnitee did not meet the requisite standard of conduct set forth in
this Section 14.1(a). Any indemnification pursuant to this Section 14.1 shall be
made only out of the assets of the Partnership and no Partner shall have any
personal liability therefor. The provisions of this Section 14.1 are for the
benefit of the Indemnitees, their heirs, successors, assigns, personal
representatives and administrators, and shall not be deemed to create any rights
for the benefit of any other Persons.
(b) Reasonable expenses incurred by an Indemnitee who is a party or witness
in a proceeding shall be paid or reimbursed by the Partnership in advance of the
final disposition of the proceeding upon receipt by the Partnership of: (i) a
written affirmation by the Indemnitee of the Indemnitee's good faith belief that
the standard of conduct necessary for indemnification by the Partnership, as
authorized in this Section 14.1, has been met; and (ii) a written undertaking by
or on behalf of the Indemnitee to repay the amount paid or reimbursed if it
shall ultimately be determined that such Indemnitee is not entitled to be
indemnified hereunder.
(c) The indemnification provided by this Section 14.1 shall be in addition
to any other rights to which an Indemnitee may be entitled under any agreement,
as a matter of law or otherwise, and shall continue as to an Indemnitee who has
ceased to serve in such capacity. The Partnership may purchase and maintain
insurance, on behalf of the Indemnitees, against any liability that may be
asserted against or expenses that may be incurred by such Person in connection
with the Partnership's activities, regardless of whether the Partnership would
have the power to indemnify such Person against such liability under the
provisions of this Agreement. An Indemnitee shall not be denied indemnification
in whole or in part under this Section 14.1 solely because the Indemnitee had an
interest in the transaction with respect to which the indemnification applies.
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Section 14.2 Indemnification of Limited Partners.
From and after the date hereof, the Partnership shall indemnify and hold
harmless each Limited Partner, its Affiliates, employees, officers, directors
and agents against and from all liability, demands, claims, actions or causes of
action, assessments, losses, fines, penalties, costs, damages and expenses
(including, without limitation, reasonable attorneys' and accountants' fees and
expenses) sustained or incurred by such Limited Partner or Affiliate or any
assignee or successor thereof (including, without limitation, any permitted
assignee of a Limited Partner under Article IX hereof) as a result of or arising
out of any action, suit or proceeding (including mediation and arbitration
proceedings) (a) arising out of or relating to the operation of the
Partnership's business or the Limited Partner being a Partner in the Partnership
(excluding, specifically, actions, suits or proceedings arising out of actual or
alleged breaches of a Partner's representations, warranties or covenants under
any agreement or arising out of acts by a Limited Partner other than in its
capacity as such) and (b) naming a Limited Partner or any of its Affiliates as a
party to such proceeding. Any indemnification pursuant to this Section 14.2
shall be made only out of the assets of the Partnership and no Partner shall
have any personal liability therefor. The provisions of this Section 14.2 are
for the benefit of the Limited Partners, their Affiliates, employees, officers,
directors and agents, and shall not be deemed to create any rights for the
benefit of any other Persons.
Section 14.3 Notice of Claims.
If any Person believes that it is entitled to indemnification under this
Article XIV, such Person shall so notify the Partnership promptly in writing
describing such claim for indemnification, the amount thereof, if known, and the
method of computation, all with reasonable particularity and containing a
reference to the provisions of this Agreement in respect of which such claim
shall have occurred; provided, however, that the omission by such indemnified
party to give notice as provided herein shall not relieve the Partnership of its
indemnification obligation under this Article XIV except to the extent that the
Partnership is materially damaged as a result of such failure to give notice. If
any action at law or suit in equity is instituted by or against a third party
with respect to which any of the Persons entitled to indemnification under this
Article XIV intends to make a claim for indemnification under this Article XIV,
any such Person shall promptly notify the Partnership of such action or suit.
Any Person entitled to indemnification hereunder shall use reasonable efforts to
minimize the amount of any claim for indemnification hereunder.
Section 14.4 Third Party Claims.
In the event of any claim for indemnification hereunder resulting from or
in connection with any claim or legal proceeding by a third party, the
indemnified Person shall give such notice thereof to the partnership not later
than twenty (20) business days prior to the time any response to the asserted
claim is required, if possible, and in any event within fifteen (15) business
days following the date such indemnified Person has actual knowledge thereof;
provided, however, that the omission by such indemnified Person to give notice
as provided herein shall not relieve the Partnership of its indemnification
obligation under this Article XIV except to the extent that the Partnership is
materially prejudiced as a result of such failure to give notice.
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ARTICLE XV
GENERAL
Section 15.1 Records and Accounting
The General Partner shall keep or cause to be kept at the principal office
of the Partnership those records and documents required to be maintained by the
Act and other books and records deemed by the General Partner to be appropriate
with respect to the Partnership's business, including, without limitation, all
books and records necessary to provide to the Limited Partners any information,
lists and copies of documents required to be provided pursuant to Section 15.8
hereof. Any records maintained by or on behalf of the Partnership in the regular
course of its business may be kept on, or be in the form of, magnetic tape,
photographs, micrographics or any other information storage device, provided
that the records so maintained are convertible into clearly legible written form
within a reasonable period of time. The books of the Partnership shall be
maintained, for financial and tax reporting purposes, on an accrual basis in
accordance with generally accepted accounting principles, or such other basis as
the General Partner determines to be necessary or appropriate.
Section 15.2 Preparation of Tax Returns
The General Partner shall arrange for the preparation and timely filing
(giving effect to any extensions or waivers) of all returns of Partnership
income, gains, deductions, losses and other items required of the Partnership
for federal and state income tax purposes and shall use all reasonable efforts
to furnish, within ninety (90) days of the close of each fiscal year, the tax
information reasonably required by Limited Partners for federal and state income
tax reporting purposes.
Section 15.3 Tax Elections
Except as otherwise provided herein, the General Partner shall, in its sole
and absolute discretion, determine whether to make any available election
pursuant to the Code. The General Partner shall have the right to seek to revoke
any such election (including, without limitation, the election under Code
ss.754) upon the General Partner's determination in its sole and absolute
discretion that such revocation is in the best interests of the Partners.
Section 15.4 Tax Matters Partner
(a) The General Partner shall be the "tax matters partner" of the
Partnership for federal income tax purposes within the meaning of Code
ss.6231(a)(7) and shall have all rights and authority as a "tax matters partner"
under this Agreement. Pursuant to Code ss.6230(e), upon receipt of notice from
the Internal Revenue Service ("IRS") of the beginning of an administrative
proceeding with respect to the Partnership, the tax matters partner shall
furnish the IRS with the name, address, taxpayer identification number, and
profits interest of each of the Limited Partners and the Assignees; provided,
however, that such information is provided to the Partnership by the Limited
Partners and the Assignees.
(b) Without limiting the provisions of Section 15.4(a) hereof, the tax
matters partner is authorized, but not required:
(i) to enter into any settlement with the IRS with respect to
any administrative or judicial proceedings for the adjustment of
Partnership items required to be taken into account by a Partner for
income tax purposes (such administrative proceedings being referred to
as a "tax audit" and such
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Judicial proceedings being referred to as "judicial review"), and in
the settlement agreement the tax matters partner may expressly state
that such agreement shall bind all Partners, except that such
settlement agreement shall not bind any Partner (a) who (within the
time prescribed pursuant to the Code and Regulations) filed a statement
with the IRS providing that the tax matters partner shall not have the
authority to enter into a settlement agreement on behalf of such
Partner or (b) who is a "notice partner" (as defined in Code
ss.6231(a)(8)) or a member of a "notice group" (as defined in Code
ss.6223(b)(2));
(ii) in the event that a notice of a final administrative
adjustment at the Partnership level of any item required to be taken
into account by a Partner for tax purposes (a "final adjustment") is
mailed to the tax matters partner, to seek judicial review of such
final adjustment, including the filing of a petition for readjustment
with the Tax Court or the filing of a complaint for refund with the
United States Claims Court or the District Court of the United States
for the district which the Partnership's principal place of business is
located;
(iii) to intervene in any action brought by any other Partner for judicial
review of a final adjustment;
(iv) to file a request for an administrative adjustment with
the IRS and, if any part of such request is not allowed by the IRS, to
file an appropriate pleading (petition or complaint) for judicial
review with respect to such request;
(v) to enter into an agreement with the IRS to extend the
period for assessing any tax which is attributable to any item required
to be taken into account by a Partner for tax purposes, or an item
affected by such item; and
(vi) to take any other action on behalf of the Partners or the
Partnership in connection with any tax audit or judicial review
proceeding to the extent permitted by applicable law or regulations.
The taking of any action and the incurring of any expense by the tax
matters partner in connection with any such proceeding, except to the extent
required by law, is a matter in the sole and absolute discretion of the tax
matters partner and the provisions relating to indemnification of the General
Partner set forth in Section 14.1 of this Agreement shall be fully applicable to
the tax matters partner in its capacity as such.
(c) The tax matters partner shall receive no compensation for its services.
All third party costs and expenses incurred by the tax matters partner in
performing its duties as such (including legal and accounting fees and expenses)
shall be borne by the Partnership. Nothing herein shall be construed to restrict
the Partnership from engaging an accounting firm to assist the tax matters
partner in discharging its duties hereunder, so long as the compensation paid by
the Partnership for such services is reasonable.
Section 15.5 Organizational Expenses
The Partnership shall elect to deduct expenses, if any, incurred by it in
organizing the Partnership ratably over a sixty (60) month period as provided in
Code ss.709.
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Section 15.6 Withholding
(a) Each Limited Partner hereby authorizes the Partnership to withhold
from, or pay on behalf of or with respect to, such Limited Partner any amount of
federal, state, local, or foreign taxes that the General Partner determines that
the Partnership is required to withhold or pay with respect to any amount
distributable or allocable to such Limited Partner pursuant to this Agreement,
including, without limitation, any taxes required to be withheld or paid by the
Partnership pursuant to Code ss.ss.1441, 1442, 1445, or 1446. Any amount paid on
behalf of or with respect to a Limited Partner shall constitute a loan by the
Partnership to such Limited Partner, which loan shall be repaid by such Limited
Partner within fifteen (15) days after notice from the General Partner that such
payment must be made unless: (i) the Partnership withholds such payment from a
distribution which would otherwise be made to the Limited Partner, or (ii) the
General Partner determines, in its sole and absolute discretion, that such
payment may be satisfied out of the available funds of the Partnership which
would, but for such payment, be distributed to the Limited Partner. Any amounts
withheld pursuant to the foregoing clauses (i) or (ii) shall be treated as
having been distributed to such Limited Partner.
(b) Each Limited Partner hereby unconditionally and irrevocably grants to
the Partnership a security interest in such Limited Partner's Partnership
Interest to secure such Limited Partner's obligation to pay to the Partnership
any amounts required to be paid pursuant to this Section 15.6. In the event that
a Limited Partner fails to pay any amounts owed to the Partnership pursuant to
this Section 15.6 when due, the General Partner may, in its sole and absolute
discretion, elect to make the payment to the Partnership on behalf of such
defaulting Limited Partner, and in such event shall be deemed to have loaned
such amount to such defaulting Limited Partner.
(c) Without limitation, in such event the General Partner: (i) shall have
the right to receive distributions that would otherwise be distributable to such
defaulting Limited Partner until such time as such loan, together with all
interest thereon, has been paid in full, and any such distributions so received
by the General Partner shall be treated as having been distributed to the
defaulting Limited Partner and immediately paid by the defaulting Limited
Partner to the General Partner in repayment of such loan; and (ii) shall succeed
to all rights and remedies of the Partnership as against such defaulting Limited
Partner.
(d) Any amounts payable by a Limited Partner hereunder shall bear interest
at the lesser of: (i) the "prime rate" as published from time to time in the
Wall Street Journal, plus four (4) percentage points, or (ii) the maximum lawful
rate of interest on such obligation, such interest to accrue from the date such
amount is due (i.e., fifteen (15) days after demand) until such amount is paid
in full. Each Limited Partner shall take such actions as the Partnership or the
General Partner shall request in order to perfect or enforce the security
interest created hereunder.
Section 15.7 Fiscal Year; Taxable Year
The fiscal year and taxable year of the Partnership shall be the calendar
year.
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Section 15.8 Reports
As soon as practicable, but in no event later than 105 days after the close
of each fiscal year of the Partnership, the General Partner shall cause to be
mailed to each Limited Partner as of the close of the fiscal year, an annual
report containing financial statements of the Partnership, or of the General
Partner if such statements are prepared solely on a consolidated basis with the
General Partner, for such year, presented in accordance with generally accepted
accounting principles, such statements to be audited by a nationally recognized
firm of independent public accountants selected by the General Partner.
Section 15.9 Addresses and Notice.
Any notice, demand, request or report required or permitted to be given
or made to a Partner or Assignee under this Agreement shall be in writing and
shall be deemed given or made when delivered in person or when sent by first
class United States mail or by other means of written communication to the
Partner or Assignee at the address set forth in Exhibit A or such other address
of which the Partner shall notify the General Partner in writing. All notices to
the Partnership shall be sent in care of the General Partner at its address set
forth in Exhibit A, as amended from time to time.
Section 15.10 Titles and Captions.
All article or section titles or captions in this Agreement are for
convenience only. They shall not be deemed part of this Agreement and in no way
define, limit, extend or describe the scope or intent of any provisions hereof.
Except as specifically provided otherwise, references to "Articles" and
"Sections" are to Articles and Sections of this Agreement.
Section 15.11 Waiver of Partition.
Each Partner hereby irrevocably waives during the term of the
Partnership any right to maintain an action for partition with respect to any
property of the Partnership.
Section 15.12 Time.
Time is of the essence for all purposes under this Agreement
Section 15.13 Binding Effect.
Subject to the limits on transferability contained herein, each and all
covenants, terms, provisions and agreements contained herein shall be binding
upon and inure to the benefit of the parties hereto, and their respective heirs,
assigns, successors and legal representatives.
Section 15.14 Remedies Not Exclusive.
Any remedy herein contained for breach of an obligation hereunder shall
not be deemed to be exclusive, and shall not impair the right of any party to
exercise any other right or remedy, whether for damages, injunction or
otherwise. No single or partial exercise by any party of any right, power or
remedy hereunder shall preclude any other or further exercise thereof.
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Section 15.15 Pronouns and Headings.
As used herein, all pronouns shall include the masculine, feminine and
neuter, and all defined terms shall include the singular and plural thereof
whenever the context and facts require such construction. The headings, titles
and subtitles herein are inserted for convenience of reference only and are to
be ignored in any construction of the provisions hereof. Any references in this
Agreement to "including" shall be deemed to mean "including without limitation".
Section 15.16 Creditors.
No provision of this Agreement shall be construed for the benefit of or
be enforceable by any creditor of the Partnership.
Section 15.17 Waiver.
No failure by any party to insist upon the strict performance of any
covenant, duty, agreement or condition of this Agreement or to exercise any
right or remedy consequent upon a breach thereof shall constitute waiver of any
such breach or any other covenant, duty, agreement or condition.
Section 15.18 Counterparts.
This Agreement may be executed in counterparts, all of which together
shall constitute one agreement binding on all the parties hereto,
notwithstanding that all such parties are not signatories to the original or the
same counterpart. Each party shall become bound by this Agreement immediately
upon affixing its signature hereto.
Section 15.19 Applicable Law.
This Agreement shall be construed and enforced in accordance with and
governed by the laws of the State of Delaware, without regard to the principles
of conflict of laws of that State which would apply the laws of another
jurisdiction.
Section 15.20 Severability.
If any provision of this Agreement, or the application thereof to any
Person or circumstance, is invalid or unenforceable to any extent, then the
remainder of this Agreement, and the application of such remaining provisions to
other Persons or circumstances, shall not be affected thereby and shall be
enforced to the greatest extent permitted by law.
Section 15.21 Entire Agreement.
This Agreement, including the Exhibits hereto, contains the entire
agreement between the parties hereto relative to the formation and operation of
the Partnership. Except as expressly provided herein, no variation, modification
or change to this Agreement shall be binding upon any party hereto, unless set
forth in a document duly executed by or on behalf of such party. From time to
time and at all times, each party hereto shall do all such other and further
acts as reasonably necessary in order fully to perform and carry out the terms
and intent of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date and year first above written.
GREAT LAKES REIT, INC. GLR NO. 3
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<PAGE>
By: By:
Its President Its Trustee
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<PAGE>
<TABLE>
EXHIBIT A TO THE
AMENDED AND RESTATED
AGREEMENT OF LIMITED PARTNERSHIP
OF
GREAT LAKES REIT, L.P.
EFFECTIVE DATE: December 20, 1996
<CAPTION>
Partnership Preferred Percentage
Name and Address Capital Units Units Interest
Contribution
<S> <C> <C> <C> <C>
GENERAL PARTNER:
Great Lakes REIT, Inc. Real estate with 68,116.7 49.9923%
823 Commerce Drive total net value 2,855,425.5
Oak Brook, IL 60521 of $37,943,026
(per attached
Schedule 1)
LIMITED PARTNERS:
GLR No. 3 Cash in the 0 0.0154%
823 Commerce Drive amount of 881
Oak Brook, IL 60521 $11,706.
Great Lakes REIT, Real estate with 68,116.7 49.9923%
Inc. total net value 2,855,425.5
823 Commerce Drive of $37,943,026
Oak Brook, IL 60521 (per attached
Schedule 1)
</TABLE>
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<PAGE>
EXHIBIT B
NOTICE OF REDEMPTION
The undersigned Limited Partner hereby irrevocably (i) exercises the
undersigned's Redemption Right with respect to ___________ Partnership Units in
Great Lakes REIT, L.P. in accordance with the terms and conditions of the
Amended and Restated Agreement of Limited Partnership of Great Lakes REIT, L.P.
as it may be amended from time to time (the "Partnership Agreement"); (ii)
surrenders such Partnership Units and all right, title and interest therein;
(iii) directs that any notices to the undersigned, including without limitation,
notice of the exercise by Great Lakes REIT, Inc. (or its successors) of its
right to purchase all or any part of the undersigned's Partnership Units on the
terms set forth in the Partnership Agreement, be sent to the address specified
below; and (iv) directs that the Cash Amount or Company Shares Amount
deliverable upon exercise of the Redemption Right be delivered to the address
specified below, and if Company Shares are to be delivered, such Company Shares
be registered or placed in the name(s) and at the address(es) specified below.
The undersigned hereby acknowledges that exercise of the Redemption Right is
subject to certain restrictions and limitations set forth in the Partnership
Agreement. The undersigned hereby represents, warrants, and certifies that the
undersigned (a) has unencumbered title to such Partnership Units, free and clear
of the rights or interests of any other person or entity; (b) has the full
right, power, and authority to redeem and surrender such Partnership Units as
provided herein; and (c) has obtained the consent or approval of all Persons or
entities, if any, having the right to consent to or approve such redemption and
surrender. The undersigned further certifies, under penalties of perjury, that
(1) the number shown on this form is the correct taxpayer identification number
of the undersigned; and (2) the undersigned is not subject to backup withholding
(cross out item (2) if you are subject to backup withholding).
Dated:
Name of Limited Partner:
Please Print
(Signature of Limited Partner)
(Street Address)
(City) (State) (Zip Code)
(Taxpayer Identification Number)
If Shares are to be issued, issue in the following name(s):
Name:
(If the Shares are to be issued in a name different than the name of the Limited
Partner listed above, please provide below the mailing address and taxpayer
identification number of the Person in whose name the Shares should be issued):
=================================
---------------------------------
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