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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
----------
FORM 8-K
CURRENT REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
Date of report (date of earliest event reported) April 17, 1998
Great Lakes REIT, Inc.
(Exact Name of Registrant as Specified in Charter)
Maryland 0-28354 36-3844714
(State or Other Jurisdiction (Commission (IRS Employer
of Incorporation) File Number) Identification No.)
823 Commerce Drive, Suite 300, Oak Brook, IL 60523
(Address of Principal Executive Offices)
(630) 368-2900
(registrant's telephone number, including area code)
N/A
(Former Name or Former Address, if Changed Since Last Report)
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ITEM 2. ACQUISITION OR DISPOSITION OF ASSETS.
Great Lakes REIT, Inc. owns a limited partnership interest and the sole
general partnership interest in Great Lakes REIT, L.P. (the "Operating
Partnership") totaling more than 99% of the outstanding partnership interests
of the Operating Partnership. Great Lakes REIT, Inc., its subsidiaries and
the Operating Partnership are referred to herein collectively as the
"Company."
ACQUISITIONS
On April 15, 1998, the Company, purchased Milwaukee Center Office Tower
located at 111 East Kilbourn Avenue, Milwaukee, Wisconsin. The Milwaukee
Center Office Tower is a thirty-two story office building located within
Milwaukee Center, a mixed-use development encompassing one square block in
the central business district of Milwaukee. The Milwaukee Center Office Tower
contains approximately 370,000 rentable square feet, is currently 88%
occupied and was purchased for approximately $46.7 million. The building's
exterior is a combination of granite, sculptured pre-cast concrete panels and
contemporary designed brick with tinted thermopane glass.
TERMS OF PURCHASE
Milwaukee Center Office Tower was purchased from an unaffiliated third party
for approximately $46.7 million. Funds for the purchase came from a borrowing
under the Company's unsecured line of credit which was established April 6,
1998 and is described in item 5 below.
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ITEM 5. OTHER EVENTS.
On April 6, 1998 the Company executed on behalf of the Operating Partnership,
the borrower, an Unsecured Revolving Credit Agreement (the "Credit Agreement")
with Bank of America National Trust and Savings Association, as lender and
administrative agent, The First National Bank of Chicago, as lender and
documentation agent, Dresdner Bank AG, New York and Grand Cayman branches, as
lender and co-agent, U.S. Bank National Association, as lender and co-agent,
and La Salle National Bank, as lender and co-agent, (collectively the
"Lenders") pursuant to which the Lenders agreed to provide the Company a
$150,000,000 line of credit subject to compliance by the Company with certain
covenants included in the Credit Agreement. The Company also executed a
guaranty in connection with the Credit Agreement. The term of the Credit
Agreement is three years. Proceeds from the Company's initial borrowing under
the Credit Agreement were used to repay the remaining interest and principal
due under the Amended and Restated Revolving Credit Agreement among the Company
and The First National Bank of Boston, Bank of America Illinois and First Bank
Association which Amended and Restated Revolving Credit Agreement expired April
15, 1998.
ITEM 7. FINANCIAL STATEMENTS, PRO FORMA FINANCIAL INFORMATION AND EXHIBITS.
(c) EXHIBITS.
The following exhibit is filed herewith:
<TABLE>
<CAPTION>
Exhibit Description
- ------- -------------
<C> <S>
10.1 Unsecured Revolving Credit Agreement
dated April 6, 1998.
</TABLE>
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
Great Lakes REIT, Inc.
(Registrant)
Date: April 20, 1998 By: /s/ Richard L. Rasley
------------------------------
Richard L. Rasley
Secretary, Executive Vice President
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EXHIBIT INDEX
<TABLE>
<CAPTION>
Exhibit Description
- ------- -------------
<C> <S>
10.1 Unsecured Revolving Credit Agreement
dated April 6, 1998.
</TABLE>
<PAGE>
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF APRIL 6, 1998
AMONG
GREAT LAKES REIT, L.P., AS BORROWER
AND
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
AS LENDER AND ADMINISTRATIVE AGENT,
THE FIRST NATIONAL BANK OF CHICAGO,
AS LENDER AND DOCUMENTATION AGENT,
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES,
AS LENDER AND CO-AGENT,
U.S. BANK NATIONAL ASSOCIATION, AS LENDER AND CO-AGENT,
AND
LA SALLE NATIONAL BANK, AS LENDER AND CO-AGENT
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TABLE OF CONTENTS
<TABLE>
<S> <C>
ARTICLE I DEFINITIONS AND ACCOUNTING TERMS. . . . . . . . . . . . . . . . . . 2
1.1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.2 FINANCIAL STANDARDS . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE II THE FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.1 THE FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
2.2 FINAL PRINCIPAL PAYMENT AND EXTENSION OPTION. . . . . . . . . . . . .17
2.3 REQUESTS FOR ADVANCES: RESPONSIBILITY FOR ADVANCES. . . . . . . . . .18
2.4 EVIDENCE OF CREDIT EXTENSIONS . . . . . . . . . . . . . . . . . . . .18
2.5 RATABLE LOANS . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
2.6 APPLICABLE MARGINS. . . . . . . . . . . . . . . . . . . . . . . . . .19
2.7 UNUSED COMMITMENT FEE . . . . . . . . . . . . . . . . . . . . . . . .19
2.8 OTHER FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.9 MINIMUM AMOUNT OF EACH ADVANCE. . . . . . . . . . . . . . . . . . . .20
2.10 INTEREST . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
2.11 SELECTION OF RATE OPTIONS AND LIBOR INTEREST PERIODS . . . . . . . .20
2.12 METHOD OF PAYMENT. . . . . . . . . . . . . . . . . . . . . . . . . .23
2.13 DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
2.14 LENDING INSTALLATIONS. . . . . . . . . . . . . . . . . . . . . . . .23
2.15 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT . . . . . . . . . . . .24
2.16 SWINGLINE LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . .24
2.17 APPLICATION OF MONEYS RECEIVED . . . . . . . . . . . . . . . . . . .25
2.18 VOLUNTARY REDUCTION OF AGGREGATE COMMITMENT AMOUNT . . . . . . . . .26
2.19 EXISTING FACILITY. . . . . . . . . . . . . . . . . . . . . . . . . .26
ARTICLE III INTENTIONALLY DELETED . . . . . . . . . . . . . . . . . . . . . .26
ARTICLE IV CHANGE IN CIRCUMSTANCES. . . . . . . . . . . . . . . . . . . . . .27
4.1 YIELD PROTECTION. . . . . . . . . . . . . . . . . . . . . . . . . . .27
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS . . . . . . . . . . . . . . .27
4.3 AVAILABILITY OF LIBOR ADVANCES. . . . . . . . . . . . . . . . . . . .28
4.4 FUNDING INDEMNIFICATION . . . . . . . . . . . . . . . . . . . . . . .28
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. . . . . . . . . . . . . . .29
ARTICLE V CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . .29
5.1 CONDITIONS PRECEDENT TO CLOSING . . . . . . . . . . . . . . . . . . .29
5.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES . . . . . . . . . . . . .31
ARTICLE VI REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . .32
6.1 EXISTENCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .32
6.2 CORPORATE/PARTNERSHIP POWERS. . . . . . . . . . . . . . . . . . . . .32
6.3 POWER OF OFFICERS . . . . . . . . . . . . . . . . . . . . . . . . . .33
6.4 GOVERNMENT AND OTHER APPROVALS. . . . . . . . . . . . . . . . . . . .33
6.5 SOLVENCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
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6.6 COMPLIANCE WITH LAWS AND AGREEMENTS . . . . . . . . . . . . . . . . .33
6.7 ENFORCEABILITY OF AGREEMENT . . . . . . . . . . . . . . . . . . . . .33
6.8 TITLE TO PROPERTY . . . . . . . . . . . . . . . . . . . . . . . . . .33
6.9 LITIGATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
6.10 EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . .34
6.11 INVESTMENT COMPANY ACT OF 1940 . . . . . . . . . . . . . . . . . . .34
6.12 PUBLIC UTILITY HOLDING COMPANY ACT . . . . . . . . . . . . . . . . .34
6.13 REGULATION U . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
6.14 NO MATERIAL ADVERSE FINANCIAL CHANGE . . . . . . . . . . . . . . . .34
6.15 FINANCIAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . .34
6.16 FACTUAL INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . .34
6.17 ERISA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
6.18 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .35
6.19 ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . .35
6.20 INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
6.21 NO BROKERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . .36
6.22 NO VIOLATION OF USURY LAWS . . . . . . . . . . . . . . . . . . . . .37
6.23 NOT A FOREIGN PERSON . . . . . . . . . . . . . . . . . . . . . . . .37
6.24 NO TRADE NAME. . . . . . . . . . . . . . . . . . . . . . . . . . . .37
6.25 SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
6.26 PROPERTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . .37
6.27 RELATIONSHIP OF THE BORROWER . . . . . . . . . . . . . . . . . . . .39
6.28 NO SIDE DEALS. . . . . . . . . . . . . . . . . . . . . . . . . . . .39
6.29 YEAR 2000 COMPLIANCE . . . . . . . . . . . . . . . . . . . . . . . .39
ARTICLE VII FINANCIAL COVENANTS . . . . . . . . . . . . . . . . . . . . . . .40
7.1 MINIMUM CONSOLIDATED NET WORTH. . . . . . . . . . . . . . . . . . . .40
7.2 MAXIMUM CONSOLIDATED LEVERAGE RATIO . . . . . . . . . . . . . . . . .40
7.3 MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO. . . . . . . . . . . . .40
7.4 MINIMUM FIXED CHARGE COVERAGE RATIO . . . . . . . . . . . . . . . . .40
7.5 MAXIMUM UNENCUMBERED ASSET COVERAGE RATIO . . . . . . . . . . . . . .40
7.6 MINIMUM UNENCUMBERED ASSET NOI TO UNSECURED INTEREST. . . . . . . . .40
7.7 MAXIMUM SECURED DEBT TO GROSS ASSET VALUE . . . . . . . . . . . . . .41
7.8 MAXIMUM DIVIDEND PAYOUT RATIO . . . . . . . . . . . . . . . . . . . .41
ARTICLE VIII AFFIRMATIVE COVENANTS. . . . . . . . . . . . . . . . . . . . . .41
8.1 NOTICES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
8.2 FINANCIAL STATEMENTS, REPORTS. ETC. . . . . . . . . . . . . . . . . .42
8.3 EXISTENCE AND CONDUCT OF OPERATIONS . . . . . . . . . . . . . . . . .44
8.4 MAINTENANCE OF PROPERTIES . . . . . . . . . . . . . . . . . . . . . .45
8.5 INSURANCE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
8.6 PAYMENT OF OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . .46
8.7 COMPLIANCE WITH LAWS. . . . . . . . . . . . . . . . . . . . . . . . .46
8.8 ADEQUATE BOOKS. . . . . . . . . . . . . . . . . . . . . . . . . . . .46
8.9 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .46
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8.10 MAINTENANCE OF STATUS. . . . . . . . . . . . . . . . . . . . . . . .46
8.11 USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . .47
8.12 PRE-ACQUISITION ENVIRONMENTAL INVESTIGATIONS . . . . . . . . . . . .47
8.13 NEW SUBSIDIARIES . . . . . . . . . . . . . . . . . . . . . . . . . .47
8.14 DISTRIBUTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . .47
ARTICLE IX NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . .48
9.1 CHANGE IN BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . .48
9.2. INTENTIONALLY DELETED. . . . . . . . . . . . . . . . . . . . . . . .48
9.3 CHANGE OF BORROWER OWNERSHIP. . . . . . . . . . . . . . . . . . . . .48
9.4 USE OF PROCEEDS . . . . . . . . . . . . . . . . . . . . . . . . . . .48
9.5 TRANSFERS OF UNENCUMBERED ASSETS. . . . . . . . . . . . . . . . . . .48
9.6 LIENS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
9.7 REGULATION U. . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
9.8 MERGERS AND DISPOSITIONS. . . . . . . . . . . . . . . . . . . . . . .49
9.9 NEGATIVE PLEDGE . . . . . . . . . . . . . . . . . . . . . . . . . . .49
9.10 CONSOLIDATED SECURED RECOURSE DEBT . . . . . . . . . . . . . . . . .50
ARTICLE X DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
10.1 NONPAYMENT OF PRINCIPAL. . . . . . . . . . . . . . . . . . . . . . .50
10.2 CERTAIN Covenants. . . . . . . . . . . . . . . . . . . . . . . . . .50
10.3 NONPAYMENT OF INTEREST AND OTHER OBLIGATIONS . . . . . . . . . . . .50
10.4 CROSS DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . .50
10.5 LOAN DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . .50
10.6 REPRESENTATION OR WARRANTY . . . . . . . . . . . . . . . . . . . . .50
10.7 COVENANTS, AGREEMENTS AND OTHER CONDITIONS . . . . . . . . . . . . .50
10.8 NO LONGER GENERAL PARTNER. . . . . . . . . . . . . . . . . . . . . .51
10.9 MATERIAL ADVERSE CHANGE. . . . . . . . . . . . . . . . . . . . . . .51
10.10 BANKRUPTCY. . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
10.11 LEGAL PROCEEDINGS . . . . . . . . . . . . . . . . . . . . . . . . .51
10.12 ERISA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
10.13 FAILURE TO SATISFY JUDGMENTS. . . . . . . . . . . . . . . . . . . .52
10.14 ENVIRONMENTAL REMEDIATION . . . . . . . . . . . . . . . . . . . . .52
ARTICLE XI ACCELERATION, WAIVERS AMENDMENTS AND REMEDIES. . . . . . . . . . .52
11.1 ACCELERATION . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
11.2 PRESERVATION OF RIGHTS; AMENDMENTS . . . . . . . . . . . . . . . . .52
ARTICLE XII THE ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . . . .53
12.1 APPOINTMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
12.2 POWERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .53
12.3 GENERAL IMMUNITY . . . . . . . . . . . . . . . . . . . . . . . . . .53
12.4 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC.. . . . . . . . . . . . .54
12.5 ACTION ON INSTRUCTIONS OF LENDERS. . . . . . . . . . . . . . . . . .54
12.6 EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL. . . . . . . . . . .54
12.7 RELIANCE ON DOCUMENTS. . . . . . . . . . . . . . . . . . . . . . . .54
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12.8 ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION . . . . . .54
12.9 RIGHTS AS A LENDER . . . . . . . . . . . . . . . . . . . . . . . . .55
12.10 COMMITMENT AS A LENDER. . . . . . . . . . . . . . . . . . . . . . .55
12.11 LENDER CREDIT DECISION. . . . . . . . . . . . . . . . . . . . . . .55
12.12 SUCCESSOR ADMINISTRATIVE AGENT. . . . . . . . . . . . . . . . . . .56
12.13 NOTICE OF DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . .56
12.14 REQUESTS FOR APPROVAL . . . . . . . . . . . . . . . . . . . . . . .57
12.15 COPIES OF DOCUMENTS . . . . . . . . . . . . . . . . . . . . . . . .57
12.16 DEFAULTING LENDERS. . . . . . . . . . . . . . . . . . . . . . . . .57
12.17 WITHHOLDING TAX . . . . . . . . . . . . . . . . . . . . . . . . . .58
12.18 BORROWER'S DEFAULT; ENFORCEMENT . . . . . . . . . . . . . . . . . .58
12.19 WORKOUT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
12.20 BANKRUPTCY OF BORROWER. . . . . . . . . . . . . . . . . . . . . . .59
12.21 RELATIONSHIP OF PARTIES . . . . . . . . . . . . . . . . . . . . . .59
12.22 COUNSEL . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
ARTICLE XIII BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS. . . . . . . .59
13.1 SUCCESSORS AND ASSIGNS . . . . . . . . . . . . . . . . . . . . . . .59
13.2 PARTICIPATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . .60
13.3 ASSIGNMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
13.4 DISSEMINATION OF INFORMATION . . . . . . . . . . . . . . . . . . . .61
13.5 TAX TREATMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . .61
ARTICLE XIV GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . .62
14.1 SURVIVAL OF REPRESENTATIONS. . . . . . . . . . . . . . . . . . . . .62
14.2 GOVERNMENTAL REGULATION. . . . . . . . . . . . . . . . . . . . . . .62
14.3 TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
14.4 HEADINGS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
14.5 NO THIRD PARTY BENEFICIARIES . . . . . . . . . . . . . . . . . . . .62
14.6 EXPENSES: INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . .62
14.7 SEVERABILITY OF PROVISIONS . . . . . . . . . . . . . . . . . . . . .63
14.8 NONLIABILITY OF THE LENDERS. . . . . . . . . . . . . . . . . . . . .63
14.9 CHOICE OF LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . .63
14.10 CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . . . . . . .63
14.11 WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . . . . . . .64
14.12 SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . .64
14.13 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT . . . . . . . . . . . .64
14.14 DEALINGS WITH THE BORROWER. . . . . . . . . . . . . . . . . . . . .65
14.15 SET-OFF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
14.16 COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . .66
14.17 DISCRETION. . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
ARTICLE XV NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.1 GIVING NOTICE. . . . . . . . . . . . . . . . . . . . . . . . . . . .66
15.2 CHANGE OF ADDRESS. . . . . . . . . . . . . . . . . . . . . . . . . .67
</TABLE>
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UNSECURED REVOLVING CREDIT AGREEMENT
THIS UNSECURED REVOLVING CREDIT AGREEMENT is entered into as of April 6,
1998, by and among the following:
GREAT LAKES REIT, L.P., a Delaware limited partnership having its
principal place of business at 823 Commerce Drive, Suite 300, Oak Brook,
Illinois 60521 ("Borrower"), the sole general partner of which is Great Lakes
REIT, Inc., a Maryland corporation;
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION ("BOFA"), a
national banking association organized under the laws of the United States of
America, having its principal place of business at 231 South LaSalle Street,
Chicago, Illinois 60697, as Lender (as defined below) and as administrative
agent (the "Agent") for the Lenders;
THE FIRST NATIONAL BANK OF CHICAGO ("First Chicago"), a national bank
organized under the laws of the United States of America, having its
principal place of business at One First National Plaza, Chicago, Illinois
60670, as Lender and as documentation agent ("Documentation Agent");
DRESDNER BANK AG, NEW YORK AND GRAND CAYMAN BRANCHES, a German banking
corporation, having a principal place of business at 190 South LaSalle
Street, Suite 2700, Chicago, Illinois 60603, as Lender and Co-Agent;
U.S. BANK NATIONAL ASSOCIATION, a national banking association, having
its principal place of business at 701 Lee Street, Des Plaines, Illinois
60016, as Lender and Co-Agent; and
LA SALLE NATIONAL BANK, a national banking association, having its
principal place of business at 135 South LaSalle Street, Chicago, Illinois
60603, as Lender and Co-Agent.
RECITALS
A. Borrower is primarily engaged in the business of acquiring,
developing, owning and operating suburban office and light industrial
properties.
B. The Borrower has requested that the Lenders make loans available to
the Borrower in the maximum aggregate principal amount of $150,000,000
outstanding from time to time pursuant to the terms of this Agreement (the
"Facility"), and that the Administrative Agent act as administrative agent
for the Lenders and that the Documentation Agent act as documentation agent
for the Lenders. The Administrative Agent, the Documentation Agent and the
Lenders have agreed to do so.
<PAGE>
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
1.1 DEFINITIONS. As used in this Agreement, the following terms have the
respective meanings set forth below:
"ADJUSTED BASE RATE" means a floating interest rate equal to the Base Rate
changing when and as the Base Rate changes.
"ADJUSTED EBITDA" means, for any quarter, the sum of (i) EBITDA (calculated
by annualizing actual EBITDA for such quarter), reduced by a capital reserve
equal to the product of $1.25 and the aggregate amount of Leased Space, measured
as the last day of such quarter, at those Projects held by Borrower throughout
such quarter, PLUS (ii) EBITDA for any Projects acquired or sold during such
quarter (calculated on an annualized basis), reduced by a capital reserve equal
to the product of $1.25 and the aggregate amount of Leased Space, measured on
the last day of such quarter, at those Projects acquired or sold during such
quarter, prorated based on the period of ownership during such quarter.
"ADJUSTED LIBOR RATE" means, with respect to a LIBOR Advance for the
relevant LIBOR Interest Period, the sum of (i) the quotient of (a) the LIBOR
Rate applicable to such LIBOR Interest Period, divided by (b) one minus the
Reserve Requirement (expressed as a decimal) applicable to such LIBOR Interest
Period, plus (ii) the Applicable Margin in effect from time to time during such
LIBOR Interest Period.
"ADMINISTRATIVE AGENT" means BOFA, acting as administrative agent for the
Lenders in connection with the transactions contemplated by this Agreement, and
its successors in such capacity.
"ADVANCE" means a Loan to the Borrower hereunder by one or more of the
Lenders pursuant to SECTION 2.1(a) hereof (including Swingline Loans), including
the initial Advance and all subsequent Advances, whether such Advances are, from
time to time, Base Rate Advances, LIBOR Advances or Swingline Loans.
"AFFILIATE" means any Person directly or indirectly controlling, controlled
by or under direct or indirect common control with any other Person. A Person
shall be deemed to control another Person if the controlling Person owns (i) ten
percent (10%) or more of any class of voting securities of the controlled Person
or possesses, directly or indirectly, the power to direct or cause the direction
of the management or policies of the controlled Person, whether through
ownership of stock, by contract or otherwise, or (ii) a general partnership
interest, a managing member's interest in a limited liability company or a
limited partnership interest or preferred stock (or other ownership interest)
representing ten percent (10%) or more of the
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outstanding limited partnership interests, preferred stock or other ownership
interests of such Person.
"AGGREGATE COMMITMENT" means, as of any date, the sum of all of the
Lenders' then-current Commitments, provided that the Aggregate Commitment
shall not at any time exceed an amount equal to the lesser of (i)
$150,000,000 and (ii) the maximum amount that permits compliance with Article
VII hereof.
"AGREEMENT" means this Unsecured Revolving Credit Agreement and all
amendments, modifications and supplements hereto.
"AGREEMENT EXECUTION DATE" shall mean April 6, 1998, the date on which
all of the parties hereto have executed and delivered this Agreement.
"ALLOCATED FACILITY AMOUNT" means, at any time, the sum of all then
outstanding Advances (including all Swingline Loans).
"APPLICABLE LAWS" is defined in SECTION 6.26(b) hereof.
"APPLICABLE MARGIN" means the applicable margin set forth in the table
in SECTION 2.6 used in calculating the interest rate applicable to the
various types of Advances, which shall vary from time to time in accordance
with the Borrower's Leverage Ratio, all in the manner set forth in SECTION
2.6.
"BASE RATE" means a rate per annum equal to the rate of interest
announced by BOFA from time to time as its reference rate, changing when and
as such reference rate changes.
"BASE RATE ADVANCE" means an Advance that bears interest at the Adjusted
Base Rate.
"BOFA" means Bank of America National Trust and Savings Association.
"BORROWER" means Great Lakes REIT, L.P., together with its permitted
successors and assigns.
"BORROWING DATE" means a Business Day on which an Advance is made to the
Borrower.
"BORROWING NOTICE" is defined in SECTION 2.11(a) hereof.
"BUSINESS DAY" means a day, other than a Saturday, Sunday or holiday, on
which banks are open for business in Chicago, Illinois and, where such term
is used in reference to the selection or determination of the Adjusted LIBOR
Rate, in London, England.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent equity ownership
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interests in a Person which is not a corporation and any and all warrants or
options to purchase any of the foregoing.
"CASH EQUIVALENTS" shall mean (i) short-term obligations of, or fully
guaranteed by, the United States of America, (ii) commercial paper rated A-1 or
better by S&P's or P-1 or better by Moody's, (iii) certificates of deposit
issued by and time deposits with commercial banks (whether domestic or foreign)
having capital and surplus in excess of $100,000,000, or (iv) shares of any
money market mutual fund rated at least AAA or the equivalent by S&P or at least
Aaa or the equivalent by Moody's.
"CODE" means the Internal Revenue Code of 1986 as amended from time to
time, or any replacement or successor statute, and the regulations promulgated
thereunder from time to time.
"COMMITMENT" means the obligation of each Lender, subject to the terms and
conditions of this Agreement and in reliance upon the representations and
warranties herein, to make Advances not exceeding in the aggregate the amount
set forth opposite its signature below, or the amount stated in any subsequent
amendment hereto.
"CONSOLIDATED OPERATING PARTNERSHIP" means the Borrower, the General
Partner and any other subsidiary partnerships or entities of either of them
which are required under GAAP to be consolidated with the Borrower and the
General Partner for financial reporting purposes.
"CONSOLIDATED SECURED DEBT" means, as of any date of determination, (i) the
aggregate principal amount of all Indebtedness of the Consolidated Operating
Partnership, plus the allocable portion of all Indebtedness of any Investment
Affiliate, whether recourse or non-recourse, equal to the applicable economic
interest in such Investment Affiliate held by any entity in the Consolidated
Operating Partnership, all of which Indebtedness is outstanding at such date and
secured by a Lien on any asset or Capital Stock, including without limitation
loans secured by mortgages, stock, or partnership interests, PLUS, without
duplication, (ii) the aggregate principal amount of all Indebtedness of any
Investment Affiliate which Indebtedness is outstanding at such date and not
secured by a Lien on any asset or Capital Stock but only to the extent same is
recourse to the Borrower or any other entity in the Consolidated Operating
Partnership.
"CONSOLIDATED NET WORTH" means, as of any date of determination, the
stockholders' equity as shown on the balance sheet of the General Partner as of
that date.
"CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of determination,
(i) all Indebtedness of the Consolidated Operating Partnership outstanding at
such date, determined in accordance with GAAP, after eliminating intercompany
items, PLUS (ii) the allocable percentage of any Indebtedness of any Investment
Affiliate outstanding at such date equal to the applicable economic interest in
such Investment Affiliate held by any entity in the Consolidated Operating
Partnership, in the aggregate, without duplication.
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"CONSOLIDATED UNSECURED DEBT" means, as of any date of determination, the
aggregate principal amount of all Indebtedness of the Consolidated Operating
Partnership, plus the allocable percentage of all Indebtedness of any Investment
Affiliate equal to the applicable economic interest in such Investment Affiliate
held by any entity in the Consolidated Operating Partnership, all of which
Indebtedness is outstanding at such date, but excluding that portion of the
Consolidated Secured Debt described under clause (i) of such definition.
"CONTROLLED GROUP" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with all or any of the entities in the Consolidated Operating
Partnership, are treated as a single employer under Sections 414(b) or 414(c) of
the Code.
"CREDIT PARTIES" means, collectively, Borrower and each Guarantor.
"DEBT SERVICE" means for any period, (a) Interest Expense for such period
PLUS (b) the aggregate amount of regularly scheduled or mandatory principal
payments of Indebtedness (excluding optional prepayments and balloon principal
payments due on maturity in respect of any Indebtedness) required to be made
during such period by the Borrower, or any entity in the Consolidated Operating
Partnership (and, if such period is less than a full twelve month period,
annualized by taking the sum of all of the payments required to be made during
such period and during any immediately subsequent periods required to create a
full twelve month test period), PLUS (c) a percentage of all such regularly
scheduled or mandatory principal payments required to be made during such period
by any Investment Affiliate on Indebtedness (excluding optional prepayments and
balloon principal payments due on maturity in respect of any Indebtedness) taken
into account in calculating Interest Expense, equal to the allocable economic
interest in such Investment Affiliate held by the Borrower and any entity in the
Consolidated Operating Partnership, in the aggregate, without duplication (and,
if such period is less than a full twelve month period, annualized by taking the
sum of all of the payments required to be made during such period and during any
immediately subsequent periods required to create a full twelve month test
period), PLUS (d) Senior Preferred Stock Expense for such period.
"DEFAULT" means an event which, with notice or lapse of time or both, would
become an Event of Default.
"DEFAULT RATE" means with respect to any Advance, a rate equal to the
interest rate applicable to such Advance plus three percent (3%) per annum.
"DEFAULTING LENDER" means any Lender 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 Business Days after written
notice from the Administrative Agent; PROVIDED that if such Lender cures such
failure or refusal, such Lender shall cease to be a Defaulting Lender.
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"DOCUMENTATION AGENT" means First Chicago, acting as documentation agent
for the Lenders in connection with the transactions contemplated by this
Agreement, and its successors in such capacity.
"DOLLARS" and "$" mean United States Dollars.
"EBITDA" means, as to any period, net income, adjusted by excluding gains
and losses from property sales, debt restructurings and property write-downs
(and reduced to eliminate any income from Investment Affiliates), as reported by
the Consolidated Operating Partnership in accordance with GAAP, plus Interest
Expense, depreciation, amortization and income tax (if any) expense plus a
percentage of such income (adjusted as described above) of any Investment
Affiliate equal to the allocable economic interest in such Investment Affiliate
held by any entity in the Consolidated Operating Partnership, in the aggregate
(provided that no item of income or expense shall be included more than once in
such calculation even if it falls within more than one of the foregoing
categories). For purposes of this definition, items of income and expense from
any Properties acquired or sold during the period in question shall be excluded.
"EFFECTIVE DATE" means each Borrowing Date and, if no Borrowing Date has
occurred in the preceding calendar month, the first Business Day of each
calendar month.
"ELIGIBLE ASSIGNEE" means (i) a commercial bank organized under the laws of
the United States, or any state thereof, and having a combined capital and
surplus of at least $100,000,000, (ii) 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 any such country, and
having a combined capital and surplus of at least $100,000,000, provided that
such bank is acting through a branch or agency located in the United States, or
(iii) a Person that is primarily engaged in the business of commercial banking
and that is (A) a Subsidiary of a Lender, (B) a Subsidiary of a Person of which
a Lender is a Subsidiary, or (C) a Person of which a Lender is a Subsidiary.
"ELIGIBLE JOINT VENTURES" means those joint ventures (i) in which any
entity included in the Consolidated Operating Partnership either is the managing
or co-managing general partner or equivalent, or has an equity interest equal or
greater than fifty percent (50%), AND (ii) in which such entity included in the
Consolidated Operating Partnership has the ability, in its sole discretion, to
sell, encumber or otherwise transfer any interest in the assets of such joint
venture, AND (iii) for which no restrictions exist on the upstreaming of Net
Operating Income, AND (iv) which have agreed to maintain no Indebtedness.
"ELIGIBLE LAND" means any Land for which all permits and other approvals
required of any applicable governmental authority or otherwise for the
development thereof have been received.
"ENVIRONMENTAL LAWS" means any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any governmental
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authority having jurisdiction over the Borrower, its Subsidiaries or
Investment Affiliates, or their respective assets, and regulating or imposing
liability or standards of conduct concerning protection of human health or
the environment, as now or may at any time hereafter be in effect, in each
case to the extent the foregoing are applicable to the operations of the
Borrower, any Investment Affiliate, or any Subsidiary or any of their
respective Properties or other assets.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and regulations promulgated thereunder from time to time.
"EVENT OF DEFAULT" means any event set forth in ARTICLE X hereof.
"EXTENSION NOTICE" is defined in SECTION 2.2 hereof.
"FACILITY" means the unsecured revolving credit facility described in
SECTION 2.1.
"FEDERAL FUNDS EFFECTIVE RATE" means, for any day, an interest 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 on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
"FIXED CHARGES" means, for any quarter, the sum of dividends payable on any
preferred stock of the General Partner and any Subsidiary of the Borrower,
calculated on an annualized basis, and Debt Service.
"FUNDED PERCENTAGE" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount of the
Aggregate Commitment actually disbursed and outstanding to Borrower by such
Lender at such time, and the denominator of which is the total amount of the
Aggregate Commitment disbursed and outstanding to Borrower by all of the Lenders
at such time.
"FUNDS FROM OPERATIONS" shall mean GAAP net income of the Consolidated
Operating Partnership, plus a percentage of GAAP net income of any Investment
Affiliate equal to the allocable economic interest in such Investment Affiliate
held by any entity in the Consolidated Operating Partnership, in the aggregate,
all of which income shall be adjusted by (i) excluding gains and losses from
property sales, debt restructurings and property write-downs and adjusted for
the non-cash effect of straight-lining of rents, (ii) straight-lining various
ordinary operating expenses which are payable less frequently than monthly
(e.g., real estate taxes) and (iii) adding back depreciation, amortization and
all non-cash items. In calculating Funds From Operations, no deduction shall be
made from net income for closing costs and other one-time charges associated
with the formation and capitalization of such Person.
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"GAAP" means generally accepted accounting principles in the United States
of America consistent with those utilized in preparing the audited financial
statements of the Borrower required hereunder and applied consistently from
period to period.
"GENERAL PARTNER" means Great Lakes REIT, Inc., a Maryland corporation
whose common stock is listed on the New York Stock Exchange and is qualified as
a real estate investment trust. General Partner is the sole general partner of
Borrower;
"GROSS ASSET VALUE" means, for the Consolidated Operating Partnership, for
any quarter, the sum of (i) total unrestricted cash and Cash Equivalents, PLUS a
percentage of the unrestricted cash and Cash Equivalents of any Investment
Affiliate equal to the allocable economic interest in such Investment Affiliate
held by the Consolidated Operating Partnership, PLUS (ii) Real Estate Asset
Value, PLUS (iii) Eligible Land, valued at the lesser of cost or market value,
provided that in no event shall the aggregate amount added to Gross Asset Value
pursuant to this clause (iii) exceed ten percent (10%) of the Gross Asset Value,
PLUS (iv) an amount equal to fifty percent (50%) of the cost of all 50%
Preleased Assets Under Development and one hundred percent (100%) of the cost of
all 75% Preleased Assets Under Development, provided, however, that in no event
shall the aggregate amount added to Gross Asset Value pursuant to this clause
(iv) exceed fifteen percent (15%) of the Gross Asset Value, and further provided
that in no event shall (A) the aggregate amount added to Gross Asset Value
pursuant to clauses (iii) and (iv) exceed $50,000,000, and (B) any amounts be
added to Gross Asset Value in violation of the restrictions set forth in SECTION
8.3 hereof.
"GROSS REVENUES" means total revenues, calculated in accordance with GAAP.
"GUARANTEE OBLIGATION" means as to any Person (the "GUARANTEEING PERSON"),
any obligation (determined without duplication) of the guaranteeing person (or
any other Person [including, without limitation, any bank under any letter of
credit] if the guaranteeing person has issued a reimbursement, counter indemnity
or similar obligation in favor of such other Person) guaranteeing or in effect
guaranteeing any Indebtedness, leases, dividends or other obligations (the
"PRIMARY OBLIGATIONS") of any other third Person (the "PRIMARY OBLIGOR") in any
manner, whether directly or indirectly, including, without limitation, any
obligation of the guaranteeing person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (1) for the purchase
or payment of any such primary obligation or (2) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (iii) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the ability of the primary obligor to make payment of such primary
obligation or (iv) otherwise to assure or hold harmless the owner of any such
primary obligation against loss in respect thereof; PROVIDED, HOWEVER, that the
term Guarantee Obligation shall not include endorsements of instruments for
deposit or collection in the ordinary course of business. The amount of any
Guarantee Obligation of any guaranteeing person shall be deemed to be the
maximum stated amount of the primary obligation relating to such Guarantee
Obligation (or, if less, the maximum stated liability set
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forth in the instrument embodying such Guarantee Obligation), PROVIDED, that
in the absence of any such stated amount or stated liability, the amount of
such Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as reasonably determined
by the Borrower in good faith, subject to the Administrative Agent's
approval, which approval shall not be unreasonably withheld.
"GUARANTOR" means, collectively, the General Partner, each Subsidiary
listed on SCHEDULE 1 attached hereto, and each other Person that executes and
delivers the Guaranty from time to time.
"GUARANTY" means the Guaranty or Guaranties executed and delivered in the
form attached hereto as EXHIBIT A, singly or collectively as the context
requires.
"HEDGING AGREEMENTS" means interest rate protection agreements, foreign
currency exchange agreements, commodity purchase or option agreements or other
interest, exchange rate or commodity price hedging agreements.
"INDEBTEDNESS" of any Person at any date means without duplication (i)
all indebtedness of such Person for borrowed money, (ii) all obligations of
such Person for the deferred purchase price of property or services (other
than current trade liabilities and other accounts payable, and accrued
expenses incurred in the ordinary course of business and payable in
accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (iii) any other
indebtedness of such Person which is evidenced by a note, bond, debenture or
similar instrument, (iv) all obligations of such Person under financing
leases and capital leases, (v) all obligations of such Person in respect of
acceptances issued or created for the account of such Person, (vi) all
Guarantee Obligations of such Person (excluding in any calculation of
consolidated indebtedness of the Borrower, Guarantee Obligations of the
Borrower in respect of primary obligations of any Subsidiary), (vii) all
reimbursement obligations of such Person for letters of credit and other
contingent liabilities, (viii) all liabilities secured by any Lien (other
than Liens for taxes not yet due and payable) on any property owned by such
Person even though such Person has not assumed or otherwise become liable for
the payment thereof, (ix) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes
receivable sold by such Person or any of its Subsidiaries, (x) Senior
Preferred Stock, (xi) such Person's allocable percentage of debt of any
Investment Affiliates equal to the greater of (a) the percentages of the
principal amount of such debt(s) for which such Person is liable and (b) the
applicable economic interest in such Investment Affiliate(s) held by such
Person, in the aggregate, (xii) all obligations to make advances and
contributions of a liquidated amount to Investment Affiliates, and (xiii) to
the extent not included in Interest Expense all obligations to make payments
under any Hedging Agreements. For purposes of this Agreement, Indebtedness
shall be deemed to include the aggregate obligations of any entity (or
entities) in the Consolidated Operating Partnership under any build to suit
or other construction contract that is contingent upon delivery by the
contractor of a certificate of occupancy (1) if and to the extent that any
such obligations would be considered a contingent liability under GAAP, and
(2) to the extent such total obligations, from time to time, exceed
$25,000,000.
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"INSOLVENCY" means insolvency as defined in the United States Bankruptcy
Code, as amended. "INSOLVENT" when used with respect to a Person, shall refer to
a Person who satisfies the definition of Insolvency.
"INTEREST EXPENSE" means, for any period, the sum (calculated on an
annualized basis) of (i) all interest expense of the Consolidated Operating
Partnership determined in accordance with GAAP, PLUS (ii) capitalized interest
not covered by an interest reserve from a loan facility, PLUS (iii) the
allocable portion (based on liability) of any accrued or paid interest incurred
on any obligation for which any entity in the Consolidated Operating Partnership
is wholly or partially liable under repayment, interest carry, or performance
guarantees, or other relevant liabilities, PLUS (iv) the allocable percentage of
any accrued or paid interest incurred on any Indebtedness of any Investment
Affiliate, whether recourse or non-recourse, equal to the applicable economic
interest in such Investment Affiliate held by any entity in the Consolidated
Operating Partnership, in the aggregate, provided that no expense shall be
included more than once in such calculation even if it falls within more than
one of the foregoing categories.
"INTEREST PERIOD" means a LIBOR Interest Period.
"INVESTMENT AFFILIATE" means any Person in which any entity in the
Consolidated Operating Partnership, directly or indirectly, has an ownership
interest but which is not a member of the Consolidated Operating Partnership.
"LAND" means any parcel of real property wholly-owned in fee simple of
record by any entity in the Consolidated Operating Partnership or any Investment
Affiliate (provided, however, that any such parcel of an Investment Affiliate
shall be included only to the extent of the allocable economic interest in such
Investment Affiliate held by any entity in the Consolidated Operating
Partnership, in the aggregate), which parcel is not improved.
"LEASED SPACE" means, as of any date of determination, the total rentable
area, then leased, subleased, licensed or otherwise occupied under any written
agreement at market rates (determined as of the time such agreement was entered
into), in all of the Projects.
"LENDERS" means, collectively, BOFA, First Chicago and the other Persons
executing this Agreement in such capacity, or any Person which subsequently
executes and delivers any amendment hereto in such capacity and each of their
respective permitted successors and assigns. Where reference is made to "the
Lenders" in any Loan Document it shall be read to mean "all of the Lenders"
"LENDING INSTALLATION" means any U.S. office of any Lender authorized to
make loans similar to the Advances described herein.
"LEVERAGE RATIO" means the ratio of Consolidated Total Indebtedness to
Gross Asset Value.
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"LIBOR ADVANCE" means an Advance that bears interest at the Adjusted
LIBOR Rate.
"LIBOR INTEREST PERIOD" means, with respect to a LIBOR Advance, a period
of 30, 60, 90 or 180 days (to the extent that periods in excess of three
months are generally available from the Lenders), as selected in advance by
the Borrower.
"LIBOR RATE" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the per annum rate of interest, rounded upward, if
necessary, to the nearest 1/16th of one percent (0.0625%), determined by the
Administrative Agent to be the rate at which deposits in immediately
available funds in U.S. Dollars would be offered by BOFA's London branch (or
at a time when BOFA is no longer either Administrative Agent or a Lender, by
the London branch of any Lender selected by the Majority Lenders) to
first-class banks in the London interbank eurodollar market at approximately
11:00 a.m. London time two Business Days prior to the first day of such LIBOR
Interest Period, in the approximate amount of the relevant LIBOR Advance and
having a maturity approximately equal to such LIBOR Interest Period.
"LIEN" means any mortgage, pledge, hypothecation, deposit arrangement,
preference, priority, security interest, collateral assignment, statutory or
consensual lien, charge, restriction or encumbrance of any kind (including,
without limitation, any conditional sale or other title retention agreement
or lease in the nature thereof, any filing or agreement to file a financing
statement as debtor under the Uniform Commercial Code on any property leased
to any Person under a lease which is not in the nature of a conditional sale
or title retention agreement, or any subordination agreement in favor of
another Person). For purposes of this Agreement, a Lien on the Capital Stock
of any Person shall be deemed to constitute a Lien on the assets of said
Person.
"LOAN" means, with respect to a Lender, such Lender's portion of any
Advance.
"LOAN DOCUMENTS" means this Agreement, the Notes, the Guaranty and any
and all other agreements or instruments required and/or provided to Lenders
hereunder or thereunder, as any of the foregoing may be amended from time to
time.
"MAJORITY LENDERS" means Lenders in the aggregate having in excess of
51% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding in excess of 51% of the
aggregate unpaid principal amount of the outstanding Advances.
"MARGIN STOCK" has the meaning ascribed to it in Regulation U of the
Board of Governors of the Federal Reserve System.
"MATERIAL ADVERSE EFFECT" shall be deemed to have occurred if (1) a
Material Adverse Financial Change has occurred or (2) a matter has occurred
that (x) materially and adversely affects the business condition (financial
or otherwise), properties, or results of operations of
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the Consolidated Operating Partnership taken as a whole, or (y) constitutes a
nonfrivolous challenge to the validity or enforceability of any material
provision of any Loan Document against any obligor party thereto.
"MATERIAL ADVERSE FINANCIAL CHANGE" shall be deemed to have occurred if
a material adverse financial change has occurred which has materially and
adversely impaired, or could reasonably be expected to materially and
adversely impair, Borrower's or any Guarantor's ability to perform its
obligations under any of the Loan Documents.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as
such in or under any Environmental Law, including, without limitation,
asbestos, radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"MATURITY DATE" means April 6, 2001, subject to extension pursuant to
the terms and conditions of SECTION 2.2 hereof, or such earlier date on which
the principal balance of the Facility and all other sums due in connection
with the Facility shall be due as a result of the acceleration of the
Facility.
"MONETARY DEFAULT" means any Default involving Borrower's failure to pay
any of the Obligations when due.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"NET OPERATING INCOME" means, as to any Property for any fiscal period,
an amount equal to (a) rents and other revenues received in the ordinary
course from such Property (including proceeds of rent loss insurance), less
(b) all expenses paid or accrued related to the ownership, operation or
maintenance of such Property, excluding capital expenditures, but including,
without limitation, taxes, assessments and the like, insurance, utilities,
payroll costs, maintenance, repair and landscaping expenses, management fees,
leasing commissions and on-site marketing expenses.
"NON-USE FEE" is defined in SECTION 2.7 hereof.
"NOTE" means the promissory note payable to the order of each Lender in
the amount of such Lender's maximum Commitment in the form attached hereto as
EXHIBIT B-1 (collectively, the "NOTES").
"OBLIGATIONS" means the Advances and all accrued and unpaid fees and all
other obligations of Borrower to the Administrative Agent or any or all of
the Lenders arising under this Agreement or any of the other Loan Documents.
"PARTICIPANTS" is defined in SECTION 13.2(a) hereof.
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"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"PERCENTAGE" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such
Lender's then-current Commitment.
"PERMITTED LIENS" are defined in SECTION 9.6 hereof.
"PERSON" means an individual, a corporation, a limited or general
partnership, an association, a joint venture or any other entity or
organization, including a governmental or political subdivision or an agent
or instrumentality thereof.
"PLAN" means an employee benefit plan as defined in Section 3(3) of
ERISA, whether or not terminated, as to which the Borrower or any member of
the Controlled Group may have any liability.
"PRELEASED ASSETS UNDER DEVELOPMENT" means as of any date of
determination, any Property which (i) is under construction and then treated
as an asset under development under GAAP, and (ii) has, as of such date, at
least fifty percent (50%) of its projected total rentable area leased at
market rates to third party tenants similar to those at Borrower's other
properties, both such land and improvements under construction to be valued
for purposes of this Agreement at then-current book value, as determined in
accordance with GAAP; provided, however, in no event shall Preleased Assets
Under Development include any Property after the date on which a certificate
of occupancy or comparable authorization has been issued for such Property by
the applicable governmental authority. Preleased Assets Under Development
shall be comprised of two groups: "75% Preleased Assets Under Development"
which shall mean, collectively, any Preleased Assets Under Development that
has, as of such date, at least seventy five percent (75%) of its projected
total rentable area so leased; and "50% Preleased Assets Under Development"
which shall mean, collectively, any Preleased Asset Under Development that
has, as of such date, less than seventy five percent (75%) but at least fifty
percent (50%) of its projected total rentable area so leased.
"PROJECT" means any parcel of real property wholly-owned in fee simple
of record by any entity in the Consolidated Operating Partnership or any
Investment Affiliate (provided, however, that any such parcel of an
Investment Affiliate shall be included only to the extent of the allocable
economic interest in such Investment Affiliate held by any entity in the
Consolidated Operating Partnership, in the aggregate), together with all
improvements thereon, which is fully improved for use and operated as a
office or light industrial property, and with respect to which a certificate
of occupancy or comparable authorization has been issued by the applicable
governmental authority.
"PROPERTY" means each parcel of real property wholly-owned in fee simple
of record by any entity in the Consolidated Operating Partnership or any
Investment Affiliate, together with all improvements, if any, thereon,
provided, however, that any such parcel of an Investment Affiliate shall be
included only to the extent of the allocable economic interest in such
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<PAGE>
Investment Affiliate held by any entity in the Consolidated Operating
Partnership, in the aggregate.
"PURCHASERS" is defined in SECTION 13.3(a) hereof.
"QUALIFIED OFFICER" means, with respect to any entity, the chief
financial officer, chief accounting officer or controller of such entity if
it is a corporation or of such entity's general partner if it is a
partnership or such other appropriate individual approved by the
Administrative Agent.
"RATE OPTION" means the Adjusted Base Rate or the Adjusted LIBOR Rate.
The Rate Option in effect on any date shall always be the Adjusted Base Rate
unless the Borrower has properly selected the Adjusted LIBOR Rate pursuant to
SECTION 2.11 hereof.
"REAL ESTATE ASSET VALUE" means, for any Property for any quarter, the
sum of (i) the quotient of (x) EBITDA for such Property during such quarter
(which EBITDA shall be calculated by annualizing actual EBITDA for such
quarter, but shall exclude EBITDA, if any, attributable to Preleased Assets
Under Development), divided by (y) a capitalization rate equal to 10.25%,
PLUS (ii) the gross acquisition cost paid for any Property acquired during
such quarter, less customary brokerage fees and other closing costs incurred
in connection with such acquisition.
"REGULATION D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or
other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a
Plan, excluding, however, such events as to which the PBGC by regulation
waived the requirement of Section 4043(a) of ERISA that it be notified within
30 days of the occurrence of such event, provided that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of
ERISA shall be a Reportable Event regardless of the issuance of any such
waivers in accordance with either Section 4043(a) of ERISA or Section 412(d)
of the Code.
"RESERVE REQUIREMENT" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on
Eurocurrency liabilities.
"S&P" means Standard & Poor's Ratings Group and its successors.
"SENIOR PREFERRED STOCK" means the stated value of any preferred stock
issued by the General Partner which is not typical preferred stock but
instead is both (i) redeemable by the holders thereof on any fixed date or
upon the occurrence of any event and (ii) as to payment of dividends or
amounts on liquidation, either guaranteed by any direct or indirect
Subsidiary of
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<PAGE>
the General Partner or secured by any property of the General Partner or any
direct or indirect Subsidiary of the General Partner.
"SENIOR PREFERRED STOCK EXPENSE" means, for any period for any Person,
the aggregate dividend payments due to the holders of Senior Preferred Stock
of such Person, whether payable in cash or in kind, and whether or not
actually paid during such period, in each case on an annualized basis (if
such period is less than a full fiscal year).
"SOLVENT" means, as to any Person on a particular date, that such Person
(a) has capital sufficient to carry on its existing business and transactions
and all business and transactions in which it is about to engage, (b) owns
property having a value, both at fair valuation and at present fair salable
value, greater than the amount required to pay its probable liabilities
(including, without limitation, contingencies), (c) does not intend to or
believe that it will incur debts or liabilities beyond its ability to pay the
same as they mature and (d) is not Insolvent.
"SUBORDINATED DEBT" means Indebtedness of the Consolidated Operating
Partnership is contractually subordinated in right of payment and otherwise
to the Indebtedness under the Loan Documents, on terms acceptable to the
Majority Lenders.
"SUBSIDIARY" means as to any Person, a corporation, partnership trust or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests
having such power only by reason of the happening of a contingency) to elect
a majority of the board of directors or other managers of such corporation,
partnership or other entity are at the time owned, or the management of which
is otherwise controlled, directly or indirectly through one or more
intermediaries, or both, by such Person, and provided such corporation,
partnership or other entity is consolidated with such Person for financial
reporting purposes under GAAP.
"SWINGLINE ADVANCES" means, as of any date, collectively, all Swingline
Loans then outstanding under this Facility.
"SWINGLINE COMMITMENT" means the obligation of the Swingline Lender to
make Swingline Loans not exceeding $10,000,000.
"SWINGLINE LENDER" means BOFA, in its capacity as a Lender.
"SWINGLINE LOAN" means a Loan made by the Swingline Lender under the
special availability provisions described in SECTIONS 2.16 hereof.
"TRANSFEREE" is defined in SECTION 13.4 hereof.
"UNENCUMBERED ASSET" means those Properties held by any entity in the
Consolidated Operating Partnership or any Eligible Joint Venture which, as of
any date of determination, (a) is not subject to any Liens other than
Permitted Liens (excluding Liens described in SCHEDULE 9.6 attached hereto),
(b) is not subject to any agreement (including any agreement governing
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<PAGE>
Indebtedness incurred in order to finance or refinance the acquisition of
such asset) which prohibits or limits the ability of any entity in the
Consolidated Operating Partnership or Eligible Joint Venture, as the case may
be, to create, incur, assume or suffer to exist any Lien upon any assets or
Capital Stock of such entity in the Consolidated Operating Partnership or
Eligible Joint Venture, (c) is not subject to any agreement (including any
agreement governing Indebtedness incurred in order to finance or refinance
the acquisition of such asset) which (i) entitles any Person to the benefit
of any Lien (other than Permitted Liens excluding Liens described in SCHEDULE
9.6 attached hereto) on any assets or Capital Stock of any entity in the
Consolidated Operating Partnership or Eligible Joint Venture or (ii) would
entitle any Person to the benefit of any Lien (other than Permitted Liens
excluding Liens described in SCHEDULE 9.6 attached hereto) on such assets or
Capital Stock upon the occurrence of any contingency (including, without
limitation, pursuant to an "equal and ratable" clause), (d) is not the
subject of any material architectural/engineering issue or any material
Environmental Law issue, as evidenced by a certification of Borrower, and (e)
is in material compliance with the applicable representations and warranties
in ARTICLE VI below; provided that that portion of the value of any Property
which would, as of the date of determination, exceed fifteen percent (15%) of
the Value of Unencumbered Assets shall be excluded herefrom. Notwithstanding
anything to the contrary contained in this Agreement, if the Administrative
Agent reasonably determines that any Property theretofore identified by
Borrower as an Unencumbered Asset may be the subject of a material
architectural/engineering issue or a material Environmental Law issue, the
Administrative Agent may (i) require Borrower to furnish a current detailed
environmental assessment or architectural/engineering assessment, as the case
may be, and, if applicable, a written estimate of any remediation costs from
a qualified architect, engineer or contractor acceptable to the
Administrative Agent, in which event Borrower shall promptly obtain and
furnish the same at its own expense, and (ii) exclude any such Property from
the Unencumbered Assets at its election. No Property of any entity in the
Consolidated Operating Partnership or any Investment Affiliate shall be
included as an Unencumbered Asset unless both such Property and all Capital
Stock (excluding Capital Stock that is publicly traded) of such entity or
Investment Affiliate, as the case may be, is unencumbered (other than
Permitted Liens, but excluding Liens described on SCHEDULE 9.6), and, in the
case of any Investment Affiliate only, such entity has no Indebtedness for
borrowed money (other than any Indebtedness due to the Borrower or any other
entity in the Consolidated Operating Partnership).
"UNENCUMBERED NOI" means, for any period, Net Operating Income for all
Unencumbered Assets during such period.
"VALUE OF UNENCUMBERED ASSETS" means, as of any date, the sum of (i) the
quotient of (a) the Unencumbered NOI for the immediately preceding full
fiscal quarter from each Property which is an Unencumbered Asset as of such
date (as such Unencumbered NOI is annualized), divided by (b) a
capitalization rate of 10.25%, PLUS (ii) the gross acquisition cost paid for
any Property that is an Unencumbered Asset and is acquired during such
quarter, less customary brokerage fees and other closing costs incurred by
the Consolidated Operating Partnership in connection with such acquisition;
provided, however, that in no event shall the aggregate amount added to the
Value of Unencumbered Assets on account of Eligible Joint
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<PAGE>
Ventures exceed ten percent (10%) of the Value of Unencumbered Assets. For
purposes of this definition, Net Operating Income from any Unencumbered
Assets acquired or sold during the period in question shall be excluded.
The foregoing definitions shall be equally applicable to both the
singular and the plural forms of the defined terms.
1.2 FINANCIAL STANDARDS. All financial and accounting terms used and
not otherwise defined herein shall be construed in accordance with GAAP. All
financial and accounting computations and determinations required of a Person
under this Agreement shall be made, and all financial information required
under this Agreement shall be prepared, in accordance with GAAP, except as
otherwise expressly provided herein.
ARTICLE II
THE FACILITY
2.1 THE FACILITY.
(a) Subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties of Borrower contained
herein, Lenders agree to make Advances through the Administrative Agent to
Borrower from time to time prior to the Maturity Date, PROVIDED THAT the
making of any such Advance will not cause the then Allocated Facility Amount
to exceed the then-current Aggregate Commitment. The Advances may be ratable
Base Rate Advances, ratable LIBOR Advances or non-pro rata Swingline Loans.
Except as provided in SECTION 12.16 hereof, each Lender shall be required to
fund only its Percentage of each such Advance and no Lender will be required
to fund any amounts which when aggregated with such Lender's Percentage of
(i) all other Advances then outstanding, and (ii) all Swingline Advances
would exceed such Lender's then-current Commitment. This facility
("FACILITY") is a revolving credit facility and, subject to the provisions of
this Agreement, Borrower may request Advances hereunder, repay such Advances
and reborrow Advances at any time prior to the Maturity Date.
(b) The Facility created by this Agreement, and that Commitment
of each Lender to lend hereunder, shall terminate on the Maturity Date,
unless sooner terminated in accordance with the terms of this Agreement.
(c) In no event shall the Aggregate Commitment exceed One
Hundred Fifty Million Dollars ($150,000,000).
2.2 FINAL PRINCIPAL PAYMENT AND EXTENSION OPTION. Any outstanding
Advances and all other unpaid Obligations shall be paid in full by the
Borrower on the Maturity Date. The Maturity Date can be extended for a single
extension period of one (1) year upon notice to the Administrative Agent not
later than ninety (90) days, nor earlier than one hundred twenty (120) days,
prior to the Maturity Date (an "Extension Notice"), if, but only if (i) no
Default has
17
<PAGE>
occurred and is continuing at the time of such notice or at the time of the
Maturity Date; (ii) all of the Lenders agree to such extension; and (iii)
Borrower pays, together with the giving of such Extension Notice, an
extension fee to the Agent pursuant to the Administrative Agent's letter
agreement with the Borrower. If the Borrower gives an Extension Notice to
the Administrative Agent, the Administrative Agent shall notify the Lenders
within 10 days of receipt of such notice. The Lenders shall have 30 days
after receipt of such notice from the Administrative Agent to notify
Administrative Agent as to whether they accept or reject such extension
request and Administrative Agent shall notify Borrower at least 40 days prior
to the Maturity Date of the acceptance or rejection by the Lenders of
Borrower's request to extend the Maturity Date. If all of the foregoing
conditions are satisfied other than the condition requiring the consent of
all Lenders, then Borrower shall have the right to replace any Lender that
does not agree to the extension with a replacement Lender acceptable to
Administrative Agent; provided, however, that no Monetary Default, other
material Default or any Event of Default shall then exist, and that Borrower
notifies such Lender that it has elected to replace such Lender and notifies
such Lender and the Administrative Agent of the identity of the proposed
replacement Lender at least 15 Business Days prior to the Maturity Date. The
Lender being replaced shall assign its Percentage of the Aggregate Commitment
and its rights and obligations under this Facility to the replacement Lender
in accordance with the requirements of SECTION 13.3 hereof and the
replacement Lender shall assume such Percentage of the Aggregate Commitment
and the related obligations under this Facility prior to the Maturity Date,
all pursuant to an assignment substantially in the form of EXHIBIT H hereto.
The purchase by the replacement Lender shall be at par (plus all accrued and
unpaid interest and any other sums owed to such Lender being replaced
hereunder), which shall be paid to the Lender being replaced upon the
execution and delivery of the assignment, and no fee pursuant to SECTION
13.3(a) shall be required.
2.3 REQUESTS FOR ADVANCES: RESPONSIBILITY FOR ADVANCES. Ratable
Advances funded by the Lenders shall be made available to Borrower by
Administrative Agent in accordance with SECTION 2.1(a) and SECTION 2.11
hereof. The obligation of each Lender to fund its Percentage of each ratable
Advance shall be several, and not joint or joint and several.
2.4 EVIDENCE OF CREDIT EXTENSIONS. The Advances of each Lender
outstanding at any time shall be evidenced by the Notes (and, in the case of
any Swingline Loans, the note attached hereto as EXHIBIT B-2). Each Note
executed by the Borrower shall be in a maximum principal amount equal to each
Lender's Percentage of the Aggregate Commitment. Each Lender shall record
Advances and principal payments thereof on the schedule attached to its Note
or, at its option, in its records, and each Lender's record thereof shall be
conclusive absent Borrower furnishing to such Lender conclusive and
irrefutable evidence of an error made by such Lender with respect to that
Lender's records. Notwithstanding the foregoing, the failure to make, or an
error in making, a notation with respect to any Advance shall not limit or
otherwise affect the obligations of Borrower hereunder or under the Notes to
pay the amount actually owed by Borrower to Lenders.
2.5 RATABLE LOANS. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to their Percentages, except
for Swingline Loans which
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<PAGE>
shall be made by the Swingline Lender in accordance with SECTION 2.16. The
ratable Advances may be Base Rate Advances, LIBOR Advances or a combination
thereof selected by the Borrower in accordance with SECTIONS 2.10 and 2.11.
2.6 APPLICABLE MARGINS. The Applicable Margin over the then Base Rate
or LIBOR Rate, as applicable to the Advance(s) in question, shall vary from
time to time in accordance with Borrower's Leverage Ratio. The Applicable
Margin shall be adjusted effective as of the next Business Day following any
change in Borrower's Leverage Ratio, as established by Borrower to the
Agent's satisfaction. The applicable Leverage Ratios and the Applicable
Margins are set forth in the following table:
<TABLE>
<CAPTION>
APPLICABLE APPLICABLE
MARGIN-LIBOR MARGIN-BASE
LEVERAGE RATIO ADVANCES RATE ADVANCES
- ----------------------------------------------------------------------------
<S> <C> <C>
less than or equal to 35% 1 percent 0 percent
- ----------------------------------------------------------------------------
greater than 35% but less
than or equal to 45% 1.15 percent 0 percent
- ----------------------------------------------------------------------------
greater than 45% but not to
exceed 50% 1.30 percent .15 percent
- ----------------------------------------------------------------------------
</TABLE>
2.7 UNUSED COMMITMENT FEE. The Borrower agrees to pay to the
Administrative Agent for the account of each Lender a commitment fee (the
"Non-Use Fee"), payable quarterly in arrears on the first day of each
calendar quarter beginning on July 1, 1998, calculated for each calendar
quarter (or part thereof) from the Agreement Execution Date to and including
the Maturity Date, on the weighted average during such quarter of the daily
unborrowed portion of such Lender's Commitment (which is equal to the
difference between (a) such Lender's Commitment on such day and (b) the then
outstanding Loans owed to such Lender). Amounts outstanding under the
Swingline Loans shall be considered part of the available unborrowed portion
of the Facility for purposes of computing the Non-Use Fee. If such weighted
average is less than or equal to 33% of such Lender's portion of the
Aggregate Commitment, the Non-Use Fee for such quarter shall be calculated at
the rate of 0.15% per annum of such average. If such weighted average is
greater than 33% but not more than 66% of such Lender's portion of the
Aggregate Commitment, the Non-Use Fee for such quarter shall be calculated at
the increased rate of 0.20% per annum on such average, and if such weighted
average is greater than 66% of such Lender's portion of the Aggregate
Commitment, the Non-Use Fee for such quarter shall be calculated at the
increased rate of 0.25% per annum on such average. Notwithstanding the
foregoing, all Non-Use Fees shall be calculated and payable on the effective
date of any termination of the obligations of the Lenders to make Loans
hereunder with respect to any partial calendar quarter. The Non-Use Fee
shall be calculated for actual days elapsed on the basis of a 360-day year.
[For purposes of illustration only and not in limitation of the foregoing:
If, during the entire month of July, 1998, the
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<PAGE>
unborrowed portion of the Loan is 70%, and on August 1 through August 20,
such unborrowed portion is 50% and on August 21 through September 30, such
unborrowed portion is 30%, then the quarterly Non-Use Fee payable on October
1, 1998 would be calculated as follows: [.0025 x (31 DIVIDED BY 360) x (.7 x
$150,000,000)] + [.0020 x (20 DIVIDED BY 360) x (.5 x $150,000,000)] + [.0015
x (41 DIVIDED BY 360) x (.3 x $150,000,000)] = $38,625.00.
2.8 OTHER FEES. The Borrower shall pay all fees payable to the
Administrative Agent pursuant to the Administrative Agent's letter agreement
with the Borrower.
2.9 MINIMUM AMOUNT OF EACH ADVANCE. Each LIBOR Advance shall be in the
minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), and each Base Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $250,000 if in excess thereof), provided,
however, that any Base Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.10 INTEREST.
(a) The outstanding principal balance under the Notes shall bear
interest from time to time at a rate per annum equal to:
(i) the Adjusted Base Rate; or
(ii) at the election of Borrower with respect to all or
portions of the Obligations, the Adjusted LIBOR Rate.
(b) All interest shall be calculated for actual days elapsed on
the basis of a 360-day year. Interest accrued on each Advance shall be
payable in arrears on the first day of each calendar month, commencing with
the first such date to occur after the date hereof, and the Maturity Date.
Interest shall not be payable for the day of any payment on the amount paid
if payment is received by Administrative Agent prior to noon (Chicago time).
If any payment of principal or interest under the Notes shall become due on a
day that is not a Business Day, such payment shall be made on the next
succeeding Business Day and, in the case of a payment of principal, such
extension of time shall be included in computing interest due in connection
with such payment.
2.11 SELECTION OF RATE OPTIONS AND LIBOR INTEREST PERIODS.
(a) Borrower, from time to time, may select the Rate Option and,
in the case of each LIBOR Advance, the commencement date (which shall be a
Business Day) and the length of the LIBOR Interest Period applicable to each
LIBOR Advance. Borrower shall give Administrative Agent irrevocable notice (a
"Borrowing Notice") not later than 11:00 a.m. (Chicago time) (i) at least one
Business Day prior to a Base Rate Advance, (ii) at least three (3) Business
Days prior to a ratable LIBOR Advance, and (iii) not later than 11:00 a.m.
(Chicago time) on the Borrowing Date for each Swingline Loan, specifying:
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<PAGE>
(i) the Borrowing Date, which shall be a Business Day,
of such Advance,
(ii) the aggregate amount of such Advance,
(iii) the type of Advance selected, and
(iv) in the case of each LIBOR Advance, the LIBOR
Interest Period applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate referenced in SECTION 5.2(a), if required, and
otherwise comply with the conditions set forth in SECTION 5.2 for Advances.
Administrative Agent shall provide each Lender by facsimile with a copy of
each Borrowing Notice (and any compliance certificate) as soon as practicable
after receipt, and if timely received by Administrative Agent in accordance
with this Section 2.11(a), Administrative Agent shall provide same by 4:00
p.m. (Chicago time) on the same Business Day received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent. Administrative Agent will promptly make
the funds so received from the Lenders available to the Borrower.
(b) Administrative Agent shall, as soon as practicable after
receipt of a Borrowing Notice requesting a LIBOR Advance, determine the
Adjusted LIBOR Rate applicable to the requested ratable LIBOR Advance and
inform Borrower and Lenders of the same. Each determination of the Adjusted
LIBOR Rate by Administrative Agent shall be conclusive and binding upon
Borrower in the absence of manifest error.
(c) If Borrower shall prepay a LIBOR Advance other than on the
last day of the LIBOR Interest Period applicable thereto, Borrower shall be
responsible to pay all amounts due to Lenders as required by SECTION 4.4
hereof.
(d) As of the end of each LIBOR Interest Period selected for a
ratable LIBOR Advance, the interest rate on the LIBOR Advance will become the
Adjusted Base Rate, unless Borrower has once again selected a LIBOR Interest
Period in accordance with the timing and procedures set forth in SECTION
2.11(g).
(e) The right of Borrower to select the Adjusted LIBOR Rate for
an Advance pursuant to this Agreement is subject to the availability to
Lenders of a similar option. If Administrative Agent determines that (i)
deposits of Dollars in an amount approximately equal to the LIBOR Advance for
which the Borrower wishes to select the Adjusted LIBOR Rate are not generally
available at such time in the London interbank eurodollar market, or (ii) the
rate at which the deposits described in subsection (i) herein are being
offered will not adequately and fairly reflect the costs to Lenders of
maintaining an
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<PAGE>
Adjusted LIBOR Rate on an Advance or of funding the same in such market for
such LIBOR Interest Period, or (iii) reasonable means do not exist for
determining an Adjusted LIBOR Rate, or (iv) the Adjusted LIBOR Rate would be
in excess of the maximum interest rate which Borrower may by law pay, then in
any of such events, Administrative Agent shall so notify Borrower and Lenders
and such Advance shall bear interest at the Adjusted Base Rate.
(f) In no event may Borrower elect a LIBOR Interest Period which
would extend beyond the Maturity Date. In no event may Borrower have more
than five (5) different LIBOR Interest Periods for LIBOR Advances outstanding
at any one time.
(g) CONVERSION AND CONTINUATION.
(i) Borrower may elect from time to time, subject to the
other provisions of this SECTION 2.11, to convert all or any part of a
ratable Advance into any other type of Advance; provided that any
conversion of a ratable LIBOR Advance shall be made on, and only on,
the last day of the LIBOR Interest Period applicable thereto.
(ii) Base Rate Advances shall continue as Base Rate Advances
unless and until such Base Rate Advances are converted into ratable
LIBOR Advances pursuant to a Conversion/Continuation Notice from
Borrower in accordance with SECTION 2.11(g)(iv). Ratable LIBOR
Advances shall continue until the end of the then applicable LIBOR
Interest Period therefor, at which time each such Advance shall be
automatically converted into a Base Rate Advance unless the Borrower
shall have given the Administrative Agent a Conversion/Continuation
Notice in accordance with SECTION 2.11(g)(iv) requesting that, at the
end of such LIBOR Interest Period, such Advance either continue as an
Advance of such type for an additional LIBOR Interest Period of the
same or different duration.
(iii) Notwithstanding anything to the contrary contained in
this SECTION 2, no Advance may be converted into a LIBOR Advance or
continued (following the end of a LIBOR Interest Period) as a LIBOR
Advance when any Monetary Default or Event of Default has occurred and
is continuing.
(iv) The Borrower shall give the Administrative Agent
irrevocable notice (a "Conversion/Continuation Notice") of each
conversion of an Advance or continuation of a LIBOR Advance not later
than 11:00 a.m. (Chicago time) on the Business Day immediately
preceding the date of the requested conversion, in the case of a
conversion into a Base Rate Advance, or 11:00 a.m. (Chicago time) at
least three (3) Business Days prior to the date of the requested
conversion or continuation, in the case of a conversion into or
continuation of a ratable LIBOR Advance, specifying: (1) the requested
date (which shall be a Business Day) of such conversion or
continuation; (2) the amount and type of the Advance to be converted
or continued; and (3) the amounts and type(s) of Advance(s) into which
such Advance is to be converted or continued and, in the
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<PAGE>
case of a conversion into or continuation of a ratable LIBOR
Advance, the duration of the LIBOR Interest Period applicable
thereto.
(v) Administrative Agent shall provide each Lender by
facsimile with a copy of each Conversion/Continuation Notice as soon
as practicable after receipt, and if timely received by Administrative
Agent in accordance with Section 2.11(g)(iv) above, Administrative
Agent shall provide same by 4:00 p.m. (Chicago time) on the same
Business Day it is received.
2.12 METHOD OF PAYMENT. All payments of the Obligations hereunder shall
be made, without set-off, deduction, or counterclaim, by wire transfer to
Administrative Agent's account designated in writing from time to time by
notice to Borrower or, in the absence of such notice, to Administrative Agent
at its address specified herein, or at any other Lending Installation
specified in writing by Administrative Agent to Borrower, by noon (local
time) on the date when due and shall be applied ratably by Administrative
Agent among the Lenders, except as otherwise provided herein. Each payment
received by Administrative Agent for the account of any Lender shall be
delivered the same Business Day if received by 12:00 p.m. (Chicago time) by
Administrative Agent to such Lender, otherwise on the next Business Day, in
the same type of funds that Administrative Agent received at its address
specified herein or at any Lending Installation specified in a notice
received by Administrative Agent from such Lender. If the Administrative
Agent fails to forward such payment by the close of business on such Business
Day, or, with respect to any other payment received by the Administrative
Agent after 12:00 p.m. (Chicago time) of such Business Day, by the close of
business on the next Business Day, the Administrative Agent shall remit to
each Lender its applicable Percentage of such payment on the immediately
following Business Day, with interest accruing thereon until payment at the
Federal funds rate. Administrative Agent is hereby authorized to charge any
accounts of Borrower maintained with BOFA for each payment of principal,
interest and fees as it becomes due hereunder.
2.13 DEFAULT. Notwithstanding the foregoing, during the continuance of a
Monetary Default, any other material Default, or any Event of Default,
Borrower shall not have the right to request a LIBOR Advance, continue or
select a new LIBOR Interest Period for an existing ratable LIBOR Advance or
convert any Base Rate Advance to a ratable LIBOR Advance. During the
continuance of a Monetary Default or any Event of Default, outstanding
Advances shall bear interest at the applicable Default Rates until such
Monetary Default or Event of Default ceases to exist or the Obligations are
paid in full.
2.14 LENDING INSTALLATIONS. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to
any such Lending Installation and the Notes shall be deemed held by each
Lender for the benefit of such Lending Installation. Each Lender may, by
written notice to the Administrative Agent and Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account
payments are to be made.
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2.15 NON-RECEIPT OF FUNDS BY ADMINISTRATIVE AGENT. Unless Borrower or a
Lender, as the case may be, has notified Administrative Agent prior to the
date on which it is scheduled to make payment to Administrative Agent of (i)
in the case of a Lender, an Advance, or (ii) in the case of Borrower, a
payment of principal, interest or fees to the Administrative Agent for the
account of the Administrative Agent or any or all of the Lenders, that it
does not intend to make such payment (which notice shall not affect the
obligations of Borrower or any Lender, as the case may be, hereunder), and
such notice has been received by Administrative Agent, Administrative Agent
may assume that such payment will be made when due. Administrative Agent may,
but shall not be obligated to, make the amount of such payment available to
the intended recipient in reliance upon such assumption. If such Lender or
Borrower, as the case may be, has not in fact made such payment to
Administrative Agent, the recipient of such payment shall, on demand by
Administrative Agent, repay to Administrative Agent the amount so made
available together with interest thereon in respect of each day during the
period commencing on the date such amount was so made available by
Administrative Agent until the date Administrative Agent recovers such amount
at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate (as determined by Administrative Agent) for such
day or (ii) in the case of payment by Borrower, the interest rate applicable
to the relevant Advance. Nothing in this SECTION 2.15 shall be deemed to
relieve any Lender from its obligations to fulfill its Commitment or to
relieve Borrower of any of its obligations under this Agreement, or to
prejudice any rights which the Borrower may have against any Lender, or any
Lender may have against Borrower, upon a default of such obligations. No
Lender shall be responsible for any default by another Lender and each Lender
shall be obligated to make the Loans provided to be made by it under, and
subject to the terms of this Agreement, regardless of the failure of any
other Lender to fulfill its Commitment hereunder.
2.16 SWINGLINE LOANS. In addition to the other options available to
Borrower hereunder, the amount of the Swingline Commitment, shall be
available for Swingline Loans subject to the following terms and conditions.
Swingline Loans shall be made available for same day borrowings provided that
notice is given in accordance with SECTION 2.11 hereof. All Swingline Loans
shall bear interest at the Adjusted Base Rate and shall be deemed to be Base
Rate Advances. In no event shall the Swingline Lender be required to fund a
Swingline Loan if it would increase the total aggregate outstanding Loans by
Swingline Lender hereunder to an amount in excess of its Commitment. Upon
request of the Swingline Lender made to all the Lenders (which request shall
be made not later than five (5) Business Days after such Swingline Loan is
funded by Swingline Lender), each Lender irrevocably agrees to purchase its
Percentage of any Swingline Loan made by the Swingline Lender regardless of
whether the conditions for disbursement are satisfied at the time of such
purchase, including the existence of an Event of Default hereunder, provided
no Lender shall be required to have total outstanding Loans in an amount
greater than its Commitment. Such purchase shall take place on the date of
the request by Swingline Lender so long as such request is made by noon
(Chicago time), otherwise on the next Business Day following such request.
All requests for purchase shall be in writing. From and after the date it is
so purchased, each such Swingline Loan shall, to the extent purchased, (i) be
treated as a Loan made by the purchasing Lenders and not by the selling
Lender for all purposes under this Agreement and the payment of the purchase
price by a Lender shall be deemed to be the making of a Loan by such Lender
and
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shall constitute outstanding principal under such Lender's Note, and (ii)
shall no longer be considered a Swingline Loan, except that all interest
accruing on or attributable to such Swingline Loan for the period prior to
the date of such purchase shall be paid when due by the Borrower to the Agent
for the benefit of the Swingline Lender, but shall be considered a Base Rate
Advance by each such Lender and all interest accruing on or attributable to
such Loans for the period from and after the date of such purchase shall be
paid when due by the Borrower to the Agent for the benefit of the purchasing
Lenders. If prior to purchasing its Percentage of a Swingline Loan one of the
events described in SECTION 10.10 shall have occurred and such event prevents
the consummation of the purchase contemplated by the preceding provisions,
each Lender will purchase an undivided participating interest in the
outstanding Swingline Loan in an amount equal to its Percentage of such
Swingline Loan. From and after the date of each Lender's purchase of its
participating interest in a Swingline Loan, if the Swingline Lender receives
any payment on account thereof, the Swingline Lender will distribute to such
Lender its participating interest in such amount (appropriately adjusted, in
the case of interest payments, to reflect the period of time during which
such Lender's participating interest was outstanding and funded); provided,
however, that in the event that such payment was received by the Swingline
Lender and is required to be returned to the Borrower, each Lender will
return to the Swingline Lender any portion thereof previously distributed by
the Swingline Lender to it. If any Lender fails to so purchase its Percentage
of any Swingline Loan, such Lender shall be deemed to be a Defaulting Lender
hereunder. No Swingline Loan shall be outstanding for more than five (5)
Business Days at a time.
2.17 APPLICATION OF MONEYS RECEIVED. All moneys collected or received by
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all expenses then due and payable
by Borrower hereunder, including, without limitation, costs incurred in
the collection of such moneys;
(ii) to the reimbursement of any yield protection due to
any of the Lenders in accordance with SECTION 4.1;
(iii) to the payment of all indemnity obligations then due
and payable by Borrower hereunder;
(iv) to payment of all fees then due to the
Administrative Agent;
(v) to the payment of any Non-Use Fee, if then due, and
to the payment of all fees due hereunder or under Administrative Agent's
letter agreement with the Borrower;
(vi) to payment of the full amount of interest and
principal on the Swingline Loans;
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(vii) first to interest until paid in full and then to
principal for all Lenders (other than Defaulting Lenders), in accordance
with the respective Funded Percentages of the Lenders;
(viii) any other sums due to the Administrative Agent or
any Lender under any of the Loan Documents; and
(ix) to the payment of any sums due to each Defaulting
Lender as their respective Percentages appear (provided that
Administrative Agent shall have the right to set-off against such sums
any amounts due from such Defaulting Lender).
2.18 VOLUNTARY REDUCTION OF AGGREGATE COMMITMENT AMOUNT. Upon at least
fifteen (15) days prior irrevocable written notice (or telephone notice
promptly confirmed in writing) to the Administrative Agent, Borrower shall
have the right, without premium or penalty, to terminate the Aggregate
Commitment in whole or in part provided that (a) Borrower may not reduce the
Aggregate Commitment below the Allocated Facility Amount at the time of such
requested reduction, and (b) any such partial termination shall be in the
minimum aggregate amount of Five Million Dollars ($5,000,000.00) or any
integral multiple of Five Million Dollars ($5,000,000.00) in excess thereof.
Any partial termination of the Aggregate Commitment shall be applied pro rata
to each Lender's Commitment.
2.19 TERMINATION OF EXISTING FACILITY. Borrower hereby agrees that the
initial Advance hereunder shall include an amount sufficient to repay in full
all of the outstanding amounts owing under that certain existing credit
facility (the "Existing Facility") in the maximum principal amount of
$75,000,000 from The First National Bank of Boston, as agent for the lenders
thereunder, to Borrower (as same may be amended or supplemented from time to
time) and that all such outstanding amounts shall be repaid to, and all of
the collateral securing the Existing Facility shall be released by, The First
National Bank of Boston simultaneously with such initial Advance.
ARTICLE III
INTENTIONALLY DELETED
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ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1 YIELD PROTECTION. If the adoption of or change in any law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding on or from payments
due from Borrower (excluding federal and state taxation of the overall
net income of any Lender or applicable Lending Installation), or changes
the basis of such taxation of payments to any Lender in respect of its
Loans or other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or similar requirement
against assets of, deposits with or for the account of, or credit extended
by, any Lender or any applicable Lending Installation (including reserves
and assessments relating to LIBOR Advances), or
(iii) imposes any other condition, and the result is to
increase the cost to any Lender or any applicable Lending Installation
of making, funding or maintaining Loans or reduces any amount receivable
by any Lender or any applicable Lending Installation in connection with
Loans, or requires any Lender or any applicable Lending Installation to
make any payment calculated by reference to the amount of Loans held, or
interest received by it, by an amount deemed material by such Lender,
THEN, within fifteen (15) days after written demand by such Lender describing
the basis for such demand, Borrower shall pay such Lender that portion of
such increased expense incurred or reduction in an amount received which such
Lender determines is attributable to making, funding and maintaining its
Loans and its Commitment.
4.2 CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender determines
that the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporate entity
controlling such Lender is increased as a result of a Change (as defined
below), then, within fifteen (15) days after written demand by such Lender,
Borrower shall pay such Lender the amount necessary to compensate for any
shortfall in the rate of return on the portion of such increased capital
which such Lender determines is attributable to this Agreement, its Loans, or
its obligation to make Loans hereunder (after taking into account such
Lender's policies as to capital adequacy). "CHANGE" means (i) any change
after the date of this Agreement in the Risk-Based Capital Guidelines (as
defined below) or (ii) any adoption of or change in any other law,
governmental or
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quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "RISK-BASED CAPITAL GUIDELINES" means (i) the
risk-based capital guidelines in effect in the United States on the date of
this Agreement, including transition rules, and (ii) the corresponding
capital regulations promulgated by regulatory authorities outside the United
States implementing the July 1988 report of the Basle Committee on Banking
Regulation and Supervisory Practices Entitled "International Convergence of
Capital Measurements and Capital Standards", including transition rules, and
any amendments to such regulations adopted prior to the date of this
Agreement. Without in any way affecting the Borrower's obligation to pay
compensation actually claimed by a Lender under this SECTION 4.2, the
Borrower shall have the right to replace any Lender which has demanded such
compensation with a replacement Lender acceptable to Administrative Agent;
provided, however, that no Monetary Default, other material Default or any
Event of Default shall then exist, and that Borrower notifies such Lender
that it has elected to replace such Lender and notifies such Lender and the
Administrative Agent of the identity of the proposed replacement Lender not
more than sixty (60) days after the date of such Lender's most recent demand
for compensation under this SECTION 4.2. The Lender being replaced shall
assign its Percentage of the Aggregate Commitment and its rights and
obligations under this Facility to the replacement Lender in accordance with
the requirements of SECTION 13.3 hereof and the replacement Lender shall
assume such Percentage of the Aggregate Commitment and the related
obligations under this Facility, all pursuant to an assignment agreement
substantially in the form of EXHIBIT H hereto. The purchase by the
replacement Lender shall be at par (plus all accrued and unpaid interest and
any other sums owed to such Lender being replaced hereunder) which shall be
paid to the Lender being replaced upon the execution and delivery of the
assignment.
4.3 AVAILABILITY OF LIBOR ADVANCES. If any Lender determines that
maintenance of any of its Loans bearing interest at the Adjusted LIBOR Rate
at a suitable Lending Installation would violate any applicable law, rule,
regulation or directive of any Governmental Authority having jurisdiction,
the Administrative Agent shall suspend by written notice to Borrower the
availability of outstanding LIBOR Advances and require any outstanding LIBOR
Advances to be repaid. If the Majority Lenders determine that deposits of a
type or maturity appropriate to match fund LIBOR Advances are not available,
the Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances from and after the date of any such
determination. If the Majority Lenders determine that an interest rate
applicable to a LIBOR Advance does not accurately reflect the cost of making
a LIBOR Advance, and, if for any reason whatsoever the provisions of SECTION
4.1 are inapplicable, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances from and after the date
of any such determination.
4.4 FUNDING INDEMNIFICATION. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the LIBOR Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not
made on the date specified by Borrower for any reason other than default by
one or more of the Lenders, Borrower will indemnify and hold harmless each
Lender from and against any loss, damage, expense or cost incurred by
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such Lender resulting therefrom, including, without limitation, any loss,
damage, expense or cost in liquidating or employing deposits acquired to fund
or maintain the LIBOR Advance.
4.5 LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Advances to reduce any liability of Borrower to such
Lender under SECTIONS 4.1 and 4.2 or to avoid the unavailability of a LIBOR
Advance, so long as such designation is not disadvantageous to such Lender.
Each Lender shall deliver a written statement of such Lender as to the amount
due, if any, under SECTIONS 4.1, 4.2 or 4.4 hereof. Such written statement
shall set forth in reasonable detail the calculations upon which such Lender
determined such amount and shall be final, conclusive and binding on Borrower
in the absence of manifest error. Determination of amounts payable under such
Sections in connection with a LIBOR Advance shall be calculated as though
each Lender funded its LIBOR Advance through the purchase of a deposit of the
type and maturity corresponding to the deposit used as a reference in
determining the Adjusted LIBOR Rate applicable to such Advance, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement shall be payable on demand after receipt
by Borrower of the written statement. The obligations of Borrower under
SECTIONS 4.1, 4.2 and 4.4 hereof shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE V
CONDITIONS PRECEDENT
5.1 CONDITIONS PRECEDENT TO CLOSING. The Lenders shall not be required
to make the initial Advance hereunder unless (i) the Borrower shall have paid
all fees then due and payable to the Lenders and the Administrative Agent
hereunder and pursuant to Administrative Agent's letter agreement with the
Borrower, (ii) all of the conditions set forth in SECTION 5.2 are satisfied,
and (iii) the Borrower shall have furnished to the Administrative Agent, in
form and substance satisfactory to the Lenders and their counsel and with
sufficient copies for the Lenders, the following:
(a) CERTIFICATES OF LIMITED PARTNERSHIP/INCORPORATION. A copy
of the Certificate of Limited Partnership for the Borrower and a copy of the
articles of incorporation or other applicable organizational documents of
each of General Partner and the other Guarantors, each certified by the
appropriate Secretary of State or equivalent state official.
(b) AGREEMENTS OF LIMITED PARTNERSHIP/BYLAWS. A copy of the
Agreement of Limited Partnership for the Borrower and a copy of the bylaws,
partnership agreement, operating agreement or other applicable governing
instrument of each of the General Partner and the other Guarantors, including
all amendments thereto, each certified by the Secretary or other appropriate
officer of the Person in question as being in full force and effect on the
Agreement Execution Date.
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(c) GOOD STANDING CERTIFICATES. A certified copy of a certificate from
the Secretary of State or equivalent state official of the states where each of
the Borrower, General Partner and each other Guarantor are organized, dated as
of the most recent practicable date, showing the good standing or partnership
qualification (if issued) of each of Borrower, General Partner and each other
Guarantor.
(d) FOREIGN QUALIFICATION CERTIFICATES. A certified copy of a certificate
from the Secretary of State or equivalent state official of the state where each
of the Borrower, General Partner and the other Guarantors maintain its principal
place of business, dated as of the most recent practicable date, showing the
qualification to transact business in such state as a foreign entity, for each
of Borrower, General Partner and the other Guarantors.
(e) RESOLUTIONS. A copy of a resolution or resolutions adopted by the
Board of Directors or other applicable governing body of each of the General
Partner and the other Guarantors, certified by the Secretary or other
appropriate officer of the Person in question as being in full force and effect
on the Agreement Execution Date, authorizing the execution, delivery and
performance of the Loan Documents to which such Person is a party and the
consummation of the transactions provided for therein.
(f) INCUMBENCY CERTIFICATE. A certificate for each of the General Partner
and the other Guarantors, signed by the Secretary or other appropriate officer
of the Person in question and dated the Agreement Execution Date, as to the
incumbency, and containing the specimen signature or signatures, of the Persons
authorized to execute and deliver the Loan Documents to be executed and
delivered by such entity.
(g) LOAN DOCUMENTS. Originals of the Loan Documents (in such quantities
as the Lenders may reasonably request), duly executed by authorized officers of
the appropriate entity.
(h) OPINION OF BORROWER'S COUNSEL. A written opinion, dated the Agreement
Execution Date, from outside counsel for the Borrower which counsel is
reasonably satisfactory to Administrative Agent, substantially in the form
attached hereto as EXHIBIT C.
(i) OPINION OF GUARANTOR'S COUNSEL. A written opinion, dated the
Agreement Execution Date, from outside counsel for the Guarantors which counsel
is reasonably satisfactory to Administrative Agent, substantially in the form
attached hereto as EXHIBIT D.
(j) COMPLIANCE CERTIFICATE. An original compliance certificate in the
form attached hereto as EXHIBIT F, duly executed by a Qualified Officer of
Borrower.
(k) FINANCIAL AND RELATED INFORMATION. The following information:
(i) A certificate, signed by an executive officer of the Borrower,
stating that on the Agreement Execution Date no Default or Event of Default
has
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occurred and is continuing and that all representations and warranties
of the Borrower contained herein are true and correct as of the Agreement
Execution Date as and to the extent set forth herein;
(ii) The most recent consolidated annual and quarterly financial
statements of the Borrower and a certificate from a Qualified Officer of
the Borrower that no change in the Borrower's financial condition that
could have a Material Adverse Effect has occurred since December 31, 1997;
(iii) Evidence of sufficient Unencumbered Assets, which evidence may
include pay-off letters (together with evidence of payment or a direction
of Borrower to use a portion of the proceeds of the Advances to repay such
Indebtedness), mortgage releases and/or title policies, to assist the
Administrative Agent in determining the Borrower's compliance with the
covenants set forth in ARTICLE VII and ARTICLE IX herein;
(iv) Written money transfer instructions, in substantially the form
of EXHIBIT E hereto, addressed to the Administrative Agent and signed by a
Qualified Officer of Borrower, together with such other related money
transfer authorizations as the Administrative Agent may have reasonably
requested; and
(v) Operating statements for the Unencumbered Assets and other
evidence of income and expenses to assist the Administrative Agent in
determining Borrower's compliance with the covenants set forth in ARTICLES
VII, VIII and IX herein.
(l) OTHER EVIDENCE AS ANY LENDER MAY REQUIRE. Such other documents and
evidence as the Administrative Agent and any Lender may reasonably request to
fully effectuate and establish the consummation of the transactions contemplated
hereby, the taking of all necessary actions in any proceedings in connection
herewith and compliance with the conditions set forth in this Agreement.
5.2 CONDITIONS PRECEDENT TO SUBSEQUENT ADVANCES. Advances after the
initial Advance shall be made from time to time as requested by Borrower, and
the obligation of each Lender to make any Loan for any such Advance (including
Swingline Loans) are subject to the following terms and conditions:
(a) prior to and at the time of each such Advance, no Default or Event of
Default shall have occurred and be continuing under this Agreement or any of the
Loan Documents and, if required by Administrative Agent, Borrower shall deliver
a compliance certificate of Borrower to such effect; and
(b) The representations and warranties contained in ARTICLE VI are true
and correct as and to the extent set forth therein as of such Borrowing Date or
date of conversion and/or continuation, except to the extent any such
representation or warranty is stated to relate
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solely to an earlier date, in which case such representation or warranty
shall be true and correct on and as of such earlier date.
(c) As to each Person that executes and delivers a Guaranty after the
Agreement Execution Date (or that is required to do so), the Borrower has
delivered to the Administrative Agent the items described in subsections (a)
through (g) of SECTION 5.1 hereof.
(d) As of the date of such Advance, the making of the Advance will not
cause Consolidated Unsecured Debt (after giving effect to such Advance) to
exceed 50% of the Value of Unencumbered Assets (as measured in Borrower's most
recent compliance certificate delivered to Administrative Agent).
Each Borrowing Notice and Conversion/Continuation Notice, and any notice by
Borrower under SECTION 2.16 hereof, shall constitute a representation and
warranty by the Borrower that the conditions contained in SECTIONS 5.2(a)
through (d) have been satisfied.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
Borrower hereby represents and warrants that:
6.1 EXISTENCE. Attached hereto as SCHEDULE 6.1 (as updated from time to
time in accordance with this Agreement) is a table showing, for each Credit
Party, its organizational form (E.G., corporation, partnership, limited
liability company, etc.), state of organization, state in which its principal
place of business is located, owner(s) of its Capital Stock and percentage
ownership interest. Each Credit Party is an entity of the type indicated for
such Credit Party on SCHEDULE 6.1 (as updated from time to time) duly organized
and validly existing under the laws of the state of its organization as
indicated on SCHEDULE 6.1 (as updated from time to time), with its principal
place of business in the state indicated for such Credit Party on SCHEDULE 6.1
(as updated from time to time), and is duly qualified as a foreign entity,
properly licensed (if required), in good standing and has all requisite
authority to conduct its business in each jurisdiction in which it owns any
Property and, except where the failure to be so qualified or to obtain such
authority would not have a Material Adverse Effect, in each other jurisdiction
in which the nature of its business or activities requires such qualification or
authority. Each Subsidiary of each Credit Party, if any, is duly organized,
validly existing and in good standing under the laws of its jurisdiction of
organization and has all requisite authority to conduct its business in each
jurisdiction in which it owns any Property, and except where the failure to be
so qualified or to obtain such authority would not have a Material Adverse
Effect, in each other jurisdiction in which the nature of its business or
activities requires such qualification.
6.2 CORPORATE/PARTNERSHIP POWERS. The execution, delivery and performance
of the Loan Documents required to be delivered by each Credit Party hereunder
are within the authority of such entity and the powers of the Borrower under its
partnership agreement have
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been duly authorized by all requisite action, and are not in conflict with
the terms of any organizational instruments of such entity, or any instrument
or agreement to which such Credit Party is a party or by which such Credit
Party or any of its respective assets may be bound or affected.
6.3 POWER OF OFFICERS. The officers of each Credit Party executing the
Loan Documents required to be delivered by such entities or by the Borrower
hereunder have been duly elected or appointed and were fully authorized to
execute the same at the time each such agreement, certificate or instrument was
executed.
6.4 GOVERNMENT AND OTHER APPROVALS. No approval, consent, exemption or
other action by, or notice to or filing with, any governmental authority is
necessary in connection with the execution, delivery or performance of any of
the Loan Documents by any of the Credit Parties. No other consent to or
approval of the transactions contemplated hereunder is required from any ground
lessor, mortgagee, beneficiary under a deed of trust or any other Person, except
as has been delivered to the Lenders on or before the Agreement Execution Date.
6.5 SOLVENCY. Immediately after the Agreement Execution Date and
immediately following the making of each Advance and after giving effect to the
application of the proceeds of such Advance, each of the Credit Parties will be
Solvent.
6.6 COMPLIANCE WITH LAWS AND AGREEMENTS. There is no judgment, decree or
order or any law, rule or regulation of any court or governmental authority
binding on any of the Credit Parties or any of their respective assets which
would be violated or contravened by the execution, delivery or performance of
the Loan Documents. The Credit Parties and their respective Property and other
assets are in substantial compliance with applicable laws, and with all material
leases, licenses and other agreements to which any Credit Party is a party or by
which such Credit Party or any of its assets is bound. No other party to any
such lease, license or other agreement is in default thereunder in any material
respect.
6.7 ENFORCEABILITY OF AGREEMENT. This Agreement and each of the other
Loan Documents is (or, when fully executed and delivered, will be) the legal,
valid and binding agreement of each of the Credit Parties thereto, enforceable
against each such Credit Party in accordance with its respective terms, except
to the extent that such enforcement may be limited by applicable bankruptcy,
insolvency, reorganization or other similar laws affecting the rights of
creditors generally.
6.8 TITLE TO PROPERTY. Borrower or its Subsidiaries has fee simple title
(subject only to Permitted Liens) to the Property and assets reflected in
Borrower's consolidated financial statements most recently delivered to the
Administrative Agent as owned by it or any such Subsidiary, free and clear of
Liens except for the Permitted Liens. Neither the execution, delivery nor
performance of the Loan Documents required by the Credit Parties will result in
the creation of any Lien on the Property or such assets. Borrower and its
Subsidiaries either own, or have entered into valid leases, licenses and other
agreements for, all assets, services
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and facilities necessary for the conduct of their respective businesses and
the operation of their respective assets.
6.9 LITIGATION. There are no suits, arbitrations, claims, disputes or
other proceedings (including, without limitation, any civil, criminal,
administrative or environmental proceedings), pending or, to the best of
Borrower's knowledge after due inquiry, threatened against or affecting the
Borrower, any of the other Credit Parties or any of the Property, the adverse
determination of which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, except as disclosed on SCHEDULE 6.9
hereto.
6.10 EVENTS OF DEFAULT. No Default or Event of Default has occurred and is
continuing or would result from the incurring of obligations by any of the
Credit Parties under any of the Loan Documents or any other document to which
any of the Credit Parties is a party.
6.11 INVESTMENT COMPANY ACT OF 1940. None of the Credit Parties is an
investment company within the meaning of the Investment Company Act of 1940 and
none of the Credit Parties will become such an investment company.
6.12 PUBLIC UTILITY HOLDING COMPANY ACT. None of the Credit Parties is a
"holding company" or a "subsidiary company" of a "holding company," or an
"affiliate" of a "holding company," or of a "subsidiary company" of a "holding
company," within the definitions of the Public Utility Holding Company Act of
1935, as amended.
6.13 REGULATION U. The proceeds of the Advances will not be used, directly
or indirectly, to purchase or carry any Margin Stock or to extend credit to
others for the purpose of purchasing or carrying any Margin Stock.
6.14 NO MATERIAL ADVERSE FINANCIAL CHANGE. There has been no Material
Adverse Financial Change since the date of the financial and/or operating
statements most recently submitted to the Lenders.
6.15 FINANCIAL INFORMATION. All financial statements and operating
statements furnished to the Lenders by or at the direction of any of the Credit
Parties and all other financial information and data furnished by any of the
Credit Parties to the Lenders are complete and correct in all material respects
as of the date thereof, and such statements have been prepared in accordance
with GAAP and fairly present the consolidated financial condition and results of
operations of the Credit Parties and the Property as of such date. None of the
Credit Parties has any contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material in the aggregate, except as
disclosed in such statements, information and data.
6.16 FACTUAL INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of any of the Credit Parties to the
Lenders for purposes of or in connection with this Agreement and the other Loan
Documents and the transactions
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<PAGE>
contemplated therein is, and all other such factual information hereafter
furnished by or on behalf of any of the Credit Parties to the Lenders will
be, true and accurate in all material respects on the date as of which such
information is dated or certified and not incomplete by omitting to state any
material fact necessary to make such information not misleading at such time.
6.17 ERISA. (i) None of the Credit Parties is an entity deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan within the meaning of Section
4975 of the Code, and (ii) the execution of this Agreement and the other Loan
Documents and the transactions contemplated hereunder and thereunder do not give
rise to a prohibited transaction within the meaning of Section 406 of ERISA or
Section 4975 of the Code.
6.18 TAXES. All required tax returns have been filed by each of the Credit
Parties with the appropriate authorities except to the extent that extensions of
time to file have been requested, granted and have not expired or except to the
extent such taxes are being contested in good faith by appropriate proceedings
and for which adequate reserves, in accordance with GAAP, are being maintained.
6.19 ENVIRONMENTAL MATTERS. Except as disclosed in SCHEDULE 6.19:
(i) To the knowledge of Borrower, no Property contains any
Materials of Environmental Concern in amounts or concentrations which
constitute a violation of, and no Materials of Environmental Concern are
managed in violation of, any Environmental Laws or could reasonably be
expected to give rise to liability thereunder.
(ii) None of Borrower, its Subsidiaries or Investment Affiliates has
received any written notice alleging that any or all of the Property or any
or all of the operations at the Property are not in compliance with all
applicable Environmental Laws, or alleging the existence of any
contamination at or under such Property in amounts or concentrations which
constitute a violation of, or could reasonably be expected to give rise to
liability under, any Environmental Law.
(iii) To the best of Borrower's knowledge after due inquiry, no
notice, violation, non-compliance or liability referred to in SECTION
6.19(ii) above is threatened, and no condition, fact or circumstance
exists that could reasonably be expected to result in such notice,
violation, non-compliance or liability.
(iv) To the knowledge of Borrower, during the ownership of the
Property by any or all of Borrower, its Subsidiaries and Investment
Affiliates, no Materials of Environmental Concern have been released,
transported or
35
<PAGE>
disposed of, or otherwise migrated, from the Property in violation of,
or in a manner or to a location which could reasonably be expected to
give rise to liability under, any applicable Environmental Laws, nor
during the ownership of the Property by any or all of Borrower, its
Subsidiaries and Investment Affiliates have any Materials of
Environmental Concern been generated, treated, stored, abandoned or
disposed of at, on or under any of such Property in violation of, or in
a manner that could reasonably be expected to give rise to liability
under, any applicable Environmental Laws. To the best knowledge of
Borrower after due inquiry, no such release, transport, disposal,
migration, generation, treatment, abandonment or storage from, at, on
or under any of the Property occurred, prior to ownership thereof by
Borrower, its Subsidiaries and Investment Affiliates, in violation of,
or in a manner or to a location which could reasonably be expected to
give rise to liability under, any applicable Environmental Laws.
(v) No judicial proceedings or governmental or administrative
action is pending, or, to the best knowledge of Borrower after due inquiry,
threatened, under any Environmental Law to which Borrower, any of its
Subsidiaries or any Investment Affiliate is named as a party with respect
to any of the Property, nor are there any consent or other decrees, orders,
or other administrative or judicial decisions or requirements outstanding
under any Environmental Law with respect to such Property.
6.20 INSURANCE. Borrower has obtained, and fully paid all premiums due on,
the following policies or binders of insurance on the Properties, all of which
shall be issued by companies with a Best Insurance Reports (1992) Policyholder's
and Financial Size Rating of "A-1X" or better:
(i) Property insurance (including coverage for flood and other
water damage for any Properties located within a 100-year flood plain) in
the amount of 100 percent of the replacement cost of the improvements at
the Properties;
(ii) Loss of rental income insurance in the amount not less than one
year's Gross Revenues from the Properties; and
(iii) Commercial general liability insurance in the amount of at
least $5,000,000 per occurrence.
All insurance must be carried by companies with a Best Insurance Reports
(1992) Policyholder's and Financial Size Rating of "A-IX" or better.
6.21 NO BROKERS. None of the Credit Parties has dealt with any brokers,
finders or other intermediaries in connection with this Facility, and no fees,
commissions or other compensation are payable by or to any such Person in
connection with this Agreement or the Advances. Lenders shall not be responsible
for the payment of any fees or commissions to any
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<PAGE>
brokers, finders or other intermediaries and Borrower shall indemnify, defend
and hold Lenders harmless from and against any claims, liabilities,
obligations, damages, costs and expenses (including attorneys' fees and
disbursements) made against or incurred by Lenders as a result of claims made
or actions instituted by any brokers, finders or other intermediaries
claiming by, through or under any of the Credit Parties in connection with
the Facility.
6.22 NO VIOLATION OF USURY LAWS. No aspect of any of the transactions
contemplated herein or in any of the other Loan Documents violates or will
violate any applicable usury laws or laws regarding the validity of agreements
to pay interest.
6.23 NOT A FOREIGN PERSON. None of the Credit Parties is a "foreign
person" within the meaning of Section 1445 or Section 7701 of the Code.
6.24 NO TRADE NAME. Except as otherwise set forth on SCHEDULE 6.24
attached hereto, none of the Credit Parties uses any trade name and has not and
does not do business under any name other than their actual names set forth
herein.
6.25 SUBSIDIARIES. SCHEDULE 6.25 (as updated from time to time in
accordance with this Agreement) hereto contains an accurate list of all of
the Subsidiaries of each of the Credit Parties, which Subsidiaries are not
themselves Credit Parties, and of all of the Investment Affiliates of each of
the Credit Parties, setting forth their respective jurisdictions of
formation, the percentage of their respective Capital Stock owned by each
Credit Party and the Property owned by them. All of the issued and
outstanding shares of Capital Stock of all of the direct and indirect
Subsidiaries and Investment Affiliates of Borrower have been duly authorized
and issued and are fully paid and non-assessable. All of such Capital Stock
owned directly or indirectly by Borrower is free and clear of Liens, except
as otherwise specifically noted on SCHEDULE 6.25 (as updated from time to
time).
6.26 PROPERTIES. SCHEDULE 6.26 hereto (as updated from time to time in
accordance with the terms of this Agreement) contains a complete and accurate
description, as of the Agreement Execution Date and the date of each update of
SCHEDULE 6.26 submitted by Borrower from time to time in accordance with the
terms of this Agreement, of each Property, including the name of the entity that
owns each such Property, and whether such Property is Eligible Land, Land, a
Project, and/or an Unencumbered Asset. As of the Agreement Execution Date, the
Borrower represents that those Properties described on SCHEDULE 2 attached
hereto constitute all of the Unencumbered Assets as of such date. With respect
to each Property, Borrower hereby represents and warrants as follows:
(a) Except as expressly described on SCHEDULE 6.26, no portion of any
improvement on any such Property is located in an area identified by the
Secretary of Housing and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood Insurance Act of
1968 or the Flood Disaster Protection Act of 1973, as amended, or any successor
law, or, if located within any such area, Borrower has obtained and will
maintain the insurance prescribed in SECTION 6.20 hereof.
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<PAGE>
(b) To the Borrower's knowledge, except as expressly described on SCHEDULE
6.26, each such Property and the development, use and occupancy thereof are in
material compliance with all applicable zoning ordinances (without reliance upon
adjoining or other properties), building codes, land use and Environmental Laws,
and other laws regulating the development, use and occupancy of real property
("APPLICABLE LAWS").
(c) Except as expressly described on SCHEDULE 6.26, each such Property is
served by all utilities required for the current and contemplated uses thereof.
All utility service is provided by public utilities and such Property has
accepted or is equipped to accept such utility service.
(d) Except as expressly described on SCHEDULE 6.26, all public roads and
streets necessary for service of and access to each such Property for the
current or contemplated use thereof have been completed, are serviceable and
all-weather and are physically and legally open for use by the public.
(e) Except as expressly described on SCHEDULE 6.26, each such Property is
served by public water and sewer systems.
(f) Except as expressly described on SCHEDULE 6.26, each such Property is
free of any patent or, to the best knowledge of Borrower and its Subsidiaries,
latent structural or other material defect or deficiency. Each such Property is
free of damage and waste that would materially and adversely affect its value,
is in good repair and there is no deferred maintenance other than ordinary wear
and tear. Each such Property is free from damage caused by fire or other
casualty. There is no pending or, to the best knowledge of Borrower after due
inquiry, threatened condemnation proceedings affecting any such Property, or any
material part thereof.
(g) Except as expressly described on SCHEDULE 6.26, all liquid and solid
waste disposal, septic and sewer systems located on each such Property are in a
good and safe condition and repair and are in compliance with all Applicable
Laws with respect to such systems.
(h) Except as expressly described on SCHEDULE 6.26, all improvements on
each such Property, lie within the boundaries and building restrictions of the
legal description of record of such Property no such improvements encroach upon
any adjoining property, and no improvements on adjoining properties encroach
upon such Property or easements benefiting such Property. All amenities, access
routes or other items that benefit such Property are under direct control of
Borrower or one of its Subsidiaries, constitute permanent easements that benefit
all or part of such Property or are public property, and such Property, by
virtue of such easements or otherwise, is contiguous to a physically open,
dedicated all weather public street, and has the necessary permits for ingress
and egress.
(i) Except as expressly described on SCHEDULE 6.26, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments,
insurance premiums, leasehold
38
<PAGE>
payments, or other outstanding charges affecting any such Property except to
the extent such items are being contested in good faith by appropriate
proceedings and as to which adequate reserves have been provided.
(j) Except as expressly described on SCHEDULE 6.26, with respect to each
parcel of Eligible Land, each required performance bond, surety or other
security has been issued to and in favor of and unconditionally accepted by each
relevant governmental authority, all plans, specifications and drawings for
improvements have been approved by all relevant governmental authorities, and
all necessary easements, licenses, permits and other authorizations have been
granted for the development thereof (including, without limitation, demolition,
grading and construction permits).
Any breach of the representations or warranties in clauses (a) through (j)
of this SECTION 6.26 shall disqualify such Property from being an Unencumbered
Asset but shall not PER SE constitute an Event of Default or Default under this
Agreement.
6.27 RELATIONSHIP OF THE BORROWER. The Credit Parties are engaged as an
integrated group in the business of owning, developing operating and selling
real estate. The Credit Parties require financing on such a basis that funds
can be made available from time to time to such entities, to the extent required
for the continued successful operation of their integrated operations. The
Advances to be made to the Borrower under this Agreement are for the purpose of
financing the integrated operations of the Credit Parties, and each of the
Credit Parties expects to derive benefit, directly or indirectly, from the
Advances, both individually and as a member of the integrated group, since the
financial success of the operations of Borrower and each Guarantor is dependent
upon the continued successful performance of the integrated group as a whole.
6.28 NO SIDE DEALS. None of the Borrower or its Subsidiaries or Affiliates
have entered into any written or oral agreements, arrangements or understandings
with any Lender or any Affiliate of any Lender relating to the Facility or the
Loan Documents, except as otherwise disclosed in this Agreement.
6.29 YEAR 2000 COMPLIANCE. The Borrower has conducted a thorough review
and assessment of the material computer applications of each entity in the
Consolidated Operating Partnership and made inquiry of their key suppliers,
vendors and customers with respect to the "year 2000 problem" (that is, the risk
that computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on such review and inquiry, the
Borrower does not believe the year 2000 problem will result in a Material
Adverse Effect.
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<PAGE>
ARTICLE VII
FINANCIAL COVENANTS
The Borrower covenants and agrees that, so long as the Commitment of any
Lender shall remain in effect and until full and final payment of all
Obligations, without the prior written consent of the Majority Lenders, it
shall not, and shall cause the other Credit Parties not to:
7.1 MINIMUM CONSOLIDATED NET WORTH. As of the end of any fiscal quarter,
permit Consolidated Net Worth to be less than the sum of (i) $150,000,000, PLUS
(ii) an amount equal to seventy-five percent (75%) of the aggregate proceeds
received by Borrower (net of customary related fees and expenses) in connection
with any equity offering (including the issuance of shares in the General
Partner or units in the Borrower) after the Agreement Execution Date.
7.2 MAXIMUM CONSOLIDATED LEVERAGE RATIO. As of the end of any fiscal
quarter, permit Consolidated Total Indebtedness to exceed 50% of the Gross Asset
Value.
7.3 MINIMUM CONSOLIDATED INTEREST COVERAGE RATIO. As of the end of any
fiscal quarter, permit the ratio of Adjusted EBITDA to Interest Expense to be
less than 2.00:1.
7.4 MINIMUM FIXED CHARGE COVERAGE RATIO. As of the end of any fiscal
quarter, permit the ratio of Adjusted EBITDA to Fixed Charges to be less than
1.75:1.
7.5 MAXIMUM UNENCUMBERED ASSET COVERAGE RATIO. As of the end of any fiscal
quarter, permit Consolidated Unsecured Debt to exceed 50% of the Value of
Unencumbered Assets.
7.6 MINIMUM UNENCUMBERED ASSET NOI TO UNSECURED INTEREST. As of the end of
any fiscal quarter, permit the ratio obtained by dividing (A) "Total
Unencumbered NOI" (as hereinafter defined) for such quarter by (B) "Unencumbered
Interest Expense" (as hereafter defined) on all Consolidated Unsecured Debt for
such quarter to be less than 2.00 to 1. For purposes of this SECTION 7.6, (1)
"Unencumbered Interest Expense" shall have the same meaning as Interest Expense
except that clause (iv) of such definition shall include only Indebtedness of
those Investment Affiliates that are also Eligible Joint Ventures, and (2)
"Total Unencumbered NOI" shall mean the sum of (i) Unencumbered NOI qualifying
for inclusion in the calculation of the Value of Unencumbered Assets for such
quarter (as such Unencumbered NOI is annualized), less a capital reserve equal
to the product of (a) $1.25, multiplied by (b) the aggregate amount of Leased
Space, measured as of the last day of such quarter, at those Projects
constituting Unencumbered Assets and held throughout such quarter, plus (ii)
Unencumbered NOI for any Unencumbered Assets acquired or sold during such
quarter (as such Unencumbered NOI is annualized), less a capital reserve equal
to (a) $1.25, multiplied by (b) the aggregate amount of Leased Space, measured
as of the last day of such quarter, at those
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Projects constituting Unencumbered Assets that were acquired or sold during
such quarter, prorated based on the period of ownership during such quarter.
7.7 MAXIMUM SECURED DEBT TO GROSS ASSET VALUE. As of the end of any fiscal
quarter, permit Consolidated Secured Debt to exceed 35% of Gross Asset Value.
7.8 MAXIMUM DIVIDEND PAYOUT RATIO. Pay out, in any fiscal quarter,
aggregate dividends to the shareholders of the General Partner in excess of 90%
of its Funds From Operations from such quarter.
Compliance with each of the foregoing financial covenants shall be measured
and certified as of December 31, 1997 and on the last day of each fiscal quarter
in accordance with SECTION 8.2 hereof.
ARTICLE VIII
AFFIRMATIVE COVENANTS
The Borrower covenants and agrees that so long as the Commitment of any
Lender shall remain available and until the full and final payment of all
Obligations incurred under the Loan Documents it will:
8.1 NOTICES. Promptly give written notice to Administrative Agent of:
(a) all litigation or arbitration proceedings affecting the Borrower or
any of the other Credit Parties where the amount claimed is $5,000,000 or more;
(b) any Default or Event of Default, specifying the nature and the period
of existence thereof and what action has been taken or been proposed to be taken
with respect thereto;
(c) all claims filed against any of the Property which, if adversely
determined, could have a Material Adverse Effect;
(d) the occurrence of any other event which might have a Material Adverse
Effect;
(e) any Reportable Event or any "prohibited transaction" (as such term is
defined in Section 4975 of the Code) in connection with any Plan or any trust
created thereunder, which may, singly or in the aggregate materially impair the
ability of any of the Credit Parties to repay any of its obligations under the
Loan Documents, describing the nature of each such event and the action, if any,
such Credit Party proposes to take with respect thereto;
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(f) any notice from any federal, state, local or foreign authority
regarding any Hazardous Material, asbestos, or other environmental condition,
proceeding, order, claim or violation affecting any of the Properties.
8.2 FINANCIAL STATEMENTS, REPORTS. ETC. The Borrower shall maintain, for
itself and each entity in the Consolidated Operating Partnership, a system of
accounting established and administered in accordance with GAAP, and furnish to
the Lenders:
(i) as soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Consolidated Operating
Partnership an unaudited consolidated balance sheet as of the close of each
such period and the related unaudited consolidated statements of income and
retained earnings and of cash flows of the Consolidated Operating
Partnership for such period and the portion of the fiscal year through the
end of such period, setting forth in each case in comparative form the
corresponding figures for the previous year, all certified by a Qualified
Officer of the General Partner;
(ii) As soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Consolidated Operating
Partnership, related reports in form and substance satisfactory to the
Lenders, all certified by a Qualified Officer of the General Partner,
including updates of Schedules 6.1, 6.25 and 6.26 of this Agreement, a
statement of Funds From Operations, a description of Unencumbered Assets, a
listing of capital expenditures (in the level of detail as currently
disclosed in Borrower's "Supplemental Information"), a report listing and
describing all newly formed or acquired Subsidiaries and all newly acquired
Properties, including their cost and Indebtedness assumed in connection
with such acquisition, if any, summary information for all Property,
including, without limitation, occupancy rates (including Leased Space),
square footage, property type, date acquired or built, Gross Revenues, Net
Operating Income, operating expenses, capital expenditures, the status of
development, and such other information as may be requested (including,
without limitation, operating statements) to evaluate the quarterly
compliance certificate delivered as provided below;
(iii) As soon as available but in no event later than the fifth
Business Day after the date such reports are to be filed with the
Securities Exchange Commission, copies of any Forms 10K, 10Q, 8K, and,
within ten (10) Business Days after filing, any other annual, quarterly,
monthly or other reports, copies of all registration statements and any
other public information which the Consolidated Operating Partnership files
with the Securities Exchange Commission or other governmental authority,
and to the extent any of such reports contains information furnished under
other subsections of this SECTION 8.2, the information need not be
separately furnished;
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(iv) As soon as available, but in any event not later than 90 days
after the close of each fiscal year of the Consolidated Operating
Partnership, a consolidated and, if available, consolidating balance sheet
of the Consolidated Operating Partnership as of the end of that fiscal year
and related consolidated and, if available, consolidating statements of
income, retained earnings, cash flows and stockholders' equity for that
fiscal year, in each case with accompanying notes and schedules, prepared
in accordance with GAAP and audited by a firm of independent certified
public accountants of recognized standing selected by Borrower and
acceptable to the Administrative Agent, which accountants shall have issued
an unqualified audit report thereon;
(v) Within thirty (30) days after the beginning of each fiscal year
of Consolidated Operating Partnership, a projection in reasonable detail
and in form and substance satisfactory to the Administrative Agent, on an
annual basis, of the assets, liabilities, cash flow and earnings of the
Consolidated Operating Partnership for that fiscal year and the following
fiscal year;
(vi) As soon as available, but in any event not later than three
Business Days after receipt thereof by any entity in the Consolidated
Operating Partnership, all quarterly financial statements, operating
reports and other financial and operating information regarding Investment
Affiliates and/or Property owned by any Investment Affiliate;
(vii) As soon as available, but in any event not later than 120 days
after the close of each fiscal year of each Investment Affiliate, a balance
sheet of such Investment Affiliate as of the end of that fiscal year and
related statements of income, retained earnings, cash flow and
stockholders' equity for that fiscal year, with accompanying notes and
schedules, prepared in accordance with GAAP and in a form acceptable to
Administrative Agent;
(viii) Not later than forty-five (45) days after the end of each of
the first three fiscal quarters, and not later than ninety (90) days after
the end of the fiscal year, a compliance certificate in substantially the
form of EXHIBIT F hereto signed by a Qualified Officer of the General
Partner confirming that the Borrower is in compliance with all of the
covenants of the Loan Documents, showing the calculations and computations
necessary to determine compliance with the financial covenants contained in
this Agreement (including such schedules and backup information as may be
necessary to demonstrate such compliance) and stating that no Default or
Event of Default exists, or if any Default or Event of Default exists,
stating the nature and status thereof;
(ix) As soon as possible and in any event within 10 Business Days
after any Reportable Event has occurred with respect to any Plan, a
statement, signed by a Qualified Officer of the General Partner, describing
said Reportable Event and within 20 days after such Reportable Event, a
statement signed by
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such officer describing the action which Borrower proposes to take with
respect thereto; and (b) within 10 Business Days of receipt, any notice
from the Internal Revenue Service, PBGC or Department of Labor with
respect to a Plan regarding any excise tax, proposed termination of a
Plan, prohibited transaction or fiduciary violation under ERISA or the
Code which could result in any liability to Borrower or any member of
the Controlled Group in excess of $100,000; and (c) within 10 Business
Days of filing, any Form 5500 filed by Borrower with respect to a Plan,
or any member of the Controlled Group which includes a qualified
accountant's opinion.
(x) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to the effect
that any entity in the Consolidated Operating Partnership or Investment
Affiliate is or may be liable to any Person as a result of the release by
such entity, or any of its Subsidiaries, or any other Person of any toxic
or hazardous waste or substance into the environment, and (b) any notice
alleging any violation of any federal, state or local environmental, health
or safety law or regulation by the Borrower or any of its Subsidiaries or
Investment Affiliates, which, in either case, could be reasonably likely to
have a Material Adverse Effect;
(xi) Within thirty (30) days of the furnishing thereof to the
shareholders of the Borrower, copies of all financial statements, reports,
notices and proxy statements so furnished, provided that to the extent any
of such information has been furnished under other subsections of this
SECTION 8.2, such information need not be separately furnished;
(xii) As soon as possible, and in any event within 10 days after the
Borrower knows of any fire or other casualty or any pending or threatened
condemnation or eminent domain proceeding with respect to all or any
material portion of any of the Property, a statement signed by a Qualified
Officer of General Partner, describing such fire, casualty or condemnation
and the action Borrower intends to take with respect thereto; and
(xiii) Such supplements to the foregoing documents and other
information (including, without limitation, non-financial information) as
the Administrative Agent or any Lender may from time to time reasonably
request.
8.3 EXISTENCE AND CONDUCT OF OPERATIONS. Except as otherwise expressly
permitted herein (including any transaction allowed under SECTION 9.8 hereof),
the Borrower shall, and shall cause each of the other Credit Parties to,
maintain and preserve its existence and all rights, privileges and franchises
now enjoyed and necessary for the operation of its business, including remaining
in good standing in each jurisdiction in which business is currently operated.
The Borrower shall, and shall cause each of the other Credit Parties to, carry
on and conduct their respective businesses in substantially the same manner and
in substantially the same fields of enterprise as presently conducted. The
Borrower shall, and shall cause each of the other Credit Parties to, do all
things necessary to remain duly incorporated and/or duly qualified, validly
existing and in good standing as a real estate investment trust, corporation,
general partnership, limited liability company or limited partnership, as the
case may be, in its jurisdiction of incorporation/formation. The Borrower
shall, and shall cause each of
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the other Credit Parties to, maintain all requisite authority to conduct its
business in each jurisdiction in which any of the Properties are located and,
except where the failure to be so qualified would not have a Material Adverse
Effect, in each jurisdiction required to carry on and conduct its businesses
in substantially the same manner as it is presently conducted, and,
specifically, neither the Borrower nor its Subsidiaries will undertake any
business other than the acquisition, development, ownership, management,
operation and leasing of office and industrial warehouse properties and
ancillary businesses specifically related thereto (such industrial warehouse
properties and ancillary businesses being limited to 25% of Gross Asset
Value), except that the Borrower and its Subsidiaries and Investment
Affiliates may invest in other assets subject to the following limitations
with respect to the following specified categories of assets:
<TABLE>
<S> <C> <C>
- -----------------------------------------------------------------------------------
(i) Land(1) not to exceed
10% of Gross Asset Value
- -----------------------------------------------------------------------------------
(ii) property holdings other than office and not to exceed
industrial warehouse properties and ancillary 10% of Gross Asset Value
businesses (excluding cash, Cash Equivalents, and
Indebtedness of any Subsidiary to the Borrower)(2)
- -----------------------------------------------------------------------------------
(iii) stock holdings other than in Subsidiaries(1) not to exceed
5% of Gross Asset Value
- -----------------------------------------------------------------------------------
(iv) mortgages(1) not to exceed
10% of Gross Asset Value
- -----------------------------------------------------------------------------------
(v) joint ventures and partnerships not to exceed
10% of Gross Asset Value
- -----------------------------------------------------------------------------------
(vi) projects under development not to exceed
15% of Gross Asset Value
- -----------------------------------------------------------------------------------
(vii) total investment in all of categories not to exceed
(i) - (vi) above(3) 25% of Gross Asset Value
- -----------------------------------------------------------------------------------
</TABLE>
(1) valued at the lower of acquisition cost or market value.
(2) calculated as the quotient of (x) annualized Net Operating Income
generated from such investment, divided by (y) 15%.
(3) calculated so that no asset shall be included more than once even if
such asset falls within more than one of the foregoing categories.
For purposes of this SECTION 8.3, a flex office property shall not be deemed to
be an industrial warehouse property. Notwithstanding anything to the contrary
contained in this SECTION 8.3, (a) category (iii) above shall not be deemed to
include an interest in a joint venture or partnership, and (b) category (v)
above shall not be deemed to include any Eligible Joint Venture which is a
Guarantor.
8.4 MAINTENANCE OF PROPERTIES. The Borrower shall, and shall cause the
other Credit Parties to, maintain, preserve, protect and keep the Properties in
good and safe repair,
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working order and condition, and make all necessary and proper repairs,
renewals and replacements.
8.5 INSURANCE. The Borrower shall, and shall cause the other Credit
Parties to, provide a certificate of insurance from all insurance carriers
which have issued policies with respect to any Properties within thirty (30)
days after the end of each fiscal year, evidencing that the insurance
required to be furnished to Lenders pursuant to SECTION 6.20 hereof is in
full force and effect. All such policies of insurance shall contain
provisions to the effect that they may not be canceled or materially changed
without at least 30 days prior notice to Administrative Agent. Borrower
shall timely pay, or cause to be paid, all premiums on all insurance policies
required under this Agreement from time to time. Borrower shall, and shall
cause the other Credit Parties to, promptly notify the insurance carrier or
agent therefor (with a copy of such notification being provided
simultaneously to Administrative Agent) if there is any occurrence which,
under the terms of any insurance policy then in effect with respect to any of
the Properties, requires such notification. Promptly following the
occurrence of any event entitling Borrower to seek payment under an insurance
policy with respect to any Property, Borrower shall recalculate and submit to
Administrative Agent a new compliance certificate in the form of EXHIBIT F
attached hereto.
8.6 PAYMENT OF OBLIGATIONS. The Borrower shall, and shall cause the other
Credit Parties to, pay all taxes, assessments, governmental charges and other
obligations when due, except such as may be contested in good faith by
appropriate proceedings, and for which adequate reserves have been provided in
accordance with sound accounting principles.
8.7 COMPLIANCE WITH LAWS. The Borrower shall, and shall cause the other
Credit Parties to, comply in all material respects with all applicable laws,
rules, regulations, orders and directions of any governmental authority having
jurisdiction over Borrower, any of the other Credit Parties, or any of their
respective businesses or assets.
8.8 ADEQUATE BOOKS. The Borrower shall, and shall cause the other Credit
Parties to, maintain adequate books, accounts and records in order to provide
financial statements in accordance with GAAP and, if requested by any Lender,
permit employees or representatives of such Lender at any reasonable time and
upon reasonable notice (i) to inspect and audit the assets of the Credit Parties
or any of them, (ii) to examine or audit the inventory, books, accounts and
records of each of them and make copies and memoranda thereof, and (iii) to
consult with appropriate personnel of each of them regarding the foregoing.
8.9 ERISA. The Borrower shall, and shall cause the other Credit Parties
to, comply in all material respects with all requirements of ERISA applicable
with respect to each Plan.
8.10 MAINTENANCE OF STATUS. General Partner shall at all times continue to
have its common stock listed on the New York Stock Exchange (NYSE), and Borrower
shall take all necessary steps to maintain General Partner's status as a real
estate investment trust in compliance with all applicable provisions of the
Code.
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8.11 USE OF PROCEEDS. The Borrower shall use the proceeds of the Facility
solely for the general business purposes of the Borrower, including, without
limitation, working capital needs, closing costs, and interim funding for
acquisitions and development of office and light industrial real properties.
8.12 PRE-ACQUISITION ENVIRONMENTAL INVESTIGATIONS. The Borrower shall, and
shall cause each of the Credit Parties to, obtain, prior to the acquisition of
each parcel of real property that it intends to acquire, an environmental report
of the scope described in EXHIBIT G attached hereto and made a part hereof.
8.13 NEW SUBSIDIARIES. The Borrower shall, from time to time, promptly
cause each Person that becomes a wholly-owned Subsidiary of General Partner
after the Agreement Execution Date to duly execute and deliver to the
Administrative Agent a Guaranty of the Obligations. Notwithstanding anything to
the contrary contained herein, such duly executed Guaranty, together with the
related documentation required to be furnished pursuant to SECTION 5.2(c)
hereof, shall be delivered to the Administrative Agent no later than 45 days
after the end of the fiscal quarter during which such Person became a Subsidiary
of General Partner.
8.14 DISTRIBUTIONS. Neither the General Partner nor the Borrower shall
make any distributions which would cause a violation of any of the following
covenants:
(a) The General Partner shall not pay any distributions to its
shareholders and the Borrower shall not pay any distribution to the partners
of the Borrower if such distribution would cause a violation of SECTION 7.8
hereof; provided, however, the Borrower may make distributions to the General
Partner which correspond in amount and timing to distributions which the
General Partner is permitted by SECTION 7.8 to make to its shareholders and
other distributions to the General Partner for "REIT Expenses" as defined in
Borrower's Agreement of Limited Partnership delivered pursuant to SECTION
5.1(b) hereof;
(b) If an Event of Default specified in SECTION 10.1 or SECTION
10.3, or an Event of Default relating to a breach of the financial covenants
contained in ARTICLE VII above, shall have occurred and be continuing, the
Borrower and the General Partner shall make no distributions other than the
minimum distributions required under the Code to maintain the tax status of
the General Partner as a REIT, as evidenced by a certification of the
principal financial or accounting officer of the General Partner containing
calculations in reasonable detail satisfactory in form and substance to
Administrative 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 General Partner shall not make any
distributions whatsoever, directly or indirectly.
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ARTICLE IX
NEGATIVE COVENANTS
The Borrower covenants and agrees that, so long as the Commitment of any
Lender shall remain in effect and until full and final payment of all
Obligations incurred under the Loan Documents, without the prior written consent
of the Majority Lenders, it shall not, and shall cause the other Credit Parties
not to:
9.1 CHANGE IN BUSINESS. Except as otherwise permitted under SECTION 8.3,
engage in any business activities or operations other than acquisition,
development, ownership, management, operation and leasing of office and light
industrial real property and ancillary businesses specifically related thereto.
9.2 Intentionally Deleted.
9.3 CHANGE OF BORROWER OWNERSHIP. Allow (i) the General Partner to own
less than fifty-one percent (51%) of the partnership interests in Borrower, (ii)
the Borrower to be controlled by a Person other than the General Partner, or
(iii) any pledge of, other encumbrance on, or conversion to limited partnership
interests of, any of the general partnership interests in the Borrower.
9.4 USE OF PROCEEDS. Apply or permit to be applied any proceeds of any
Advance directly or indirectly, to the funding of any purchase of, or offer for,
any share of capital stock of any publicly held corporation constituting (alone
or together with other shares owned by Borrower or its Subsidiaries) a
controlling interest in such corporation, or as part of a series of transactions
to acquire such controlling interest, unless the board of directors of such
corporation has consented to such purchase or offer and the Majority Lenders
have consented to such use of the proceeds of the Facility.
9.5 TRANSFERS OF ASSETS. Sell or otherwise dispose of (other than the
creation or continuance of Permitted Liens) any Properties or other assets or
any interest therein, if such Property or other assets, together with all other
assets which have been transferred or disposed of prior to such date, exceeds
twenty percent (20%) of the Gross Asset Value of the Consolidated Operating
Partnership.
9.6 LIENS. Create, incur, or suffer to exist any Lien in, of or on any of
the Properties except:
(i) Liens for taxes, assessments or governmental charges or
levies on their Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for which
adequate reserves shall have been set aside on their books;
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(ii) Liens which arise by operation of law, such as
carriers', warehousemen's, landlords', materialmen and mechanics'
liens and other similar liens arising in the ordinary course of
business which secure payment of obligations not more than 30 days
past due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set aside
on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or other
social security or retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions, zoning
restrictions, easements and such other encumbrances or charges against
real property as are of a nature generally existing with respect to
properties of a similar character and which do not in any material way
affect the marketability of the same or interfere with the use thereof
in the business of the Borrower or any of the other Credit Parties;
(v) Liens of any Subsidiary in favor of the Borrower;
(vi) Liens arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result in a
violation of any of the provisions of this Agreement; and
(vii) Liens described in SCHEDULE 9.6 attached hereto.
Liens permitted pursuant to this SECTION 9.6 shall be deemed to be "PERMITTED
LIENS".
9.7 REGULATION U. Use any of the proceeds of the Advances to purchase or
carry any Margin Stock.
9.8 MERGERS AND DISPOSITIONS. Enter into any merger, consolidation, pool,
business combination, reorganization or liquidation, or transfer or otherwise
dispose of all or a substantial portion of its properties, except for: such
transactions that occur between wholly-owned Subsidiaries; transactions where
Borrower is the surviving entity and there is no change in business conducted,
and no Default or Event of Default under the Loan Documents results from such
transaction; or as otherwise approved in advance by the Majority Lenders.
9.9 NEGATIVE PLEDGE. Enter into or maintain any agreement with any third
party which prohibits the creation, assumption or maintenance of any Lien
securing a charge or obligation on any of its real or personal property, whether
now owned or hereafter acquired (other than with respect to this Facility and
other than such agreements relating solely to those assets constituting
collateral for the Consolidated Secured Debt).
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9.10 CONSOLIDATED SECURED RECOURSE DEBT. At any time, allow
Consolidated Secured Debt that is recourse to the Borrower or any other
entity in the Consolidated Operating Partnership to exceed ten percent (10%)
of Gross Asset Value of the Consolidated Operating Partnership.
ARTICLE X
DEFAULTS
The occurrence of any one or more of the following events shall
constitute an Event of Default:
10.1 NONPAYMENT OF PRINCIPAL. The Borrower fails to pay any principal
portion of the Obligations when due, whether on the Maturity Date or
otherwise.
10.2 CERTAIN COVENANTS. The Borrower, General Partner and/or
Consolidated Operating Partnership, as the case may be, is not in compliance
with any one or more of the provisions of ARTICLE VII or ARTICLE IX
(excluding SECTION 9.1) hereof.
10.3 NONPAYMENT OF INTEREST AND OTHER OBLIGATIONS. The Borrower fails
to pay any interest or other portion of the Obligations, other than payments
of principal, and such failure continues for a period of ten (10) days after
the date such payment is due.
10.4 CROSS DEFAULT. Any monetary default occurs (after giving effect to
any applicable cure period) under any Indebtedness (which includes liability
under guaranties) of any entity in the Consolidated Operating Group, singly
or in the aggregate, in excess of Five Million Dollars ($5,000,000), other
than Indebtedness arising from the purchase of personal property or the
provision of services, the amount of which is being contested by Borrower in
good faith by appropriate proceedings.
10.5 LOAN DOCUMENTS. Any Loan Document is not in full force and effect
in accordance with its terms, or a default has occurred and is continuing
thereunder after giving effect to any cure or grace period in any such
document.
10.6 REPRESENTATION OR WARRANTY. At any time or times hereafter any
representation or warranty set forth in ARTICLE VI or ARTICLE VII of this
Agreement or in any other Loan Document or in any statement, report or
certificate now or hereafter made by any entity in the Consolidated Operating
Group to the Lenders or the Administrative Agent is not true and correct in
any material respect.
10.7 COVENANTS, AGREEMENTS AND OTHER CONDITIONS. The Borrower fails to
perform or observe any of the covenants, agreements and conditions contained
in this Agreement or any of the other Loan Documents not specifically
referred to in any other Section of this ARTICLE X, in accordance with the
terms hereof or thereof, and such Default continues unremedied for a period
of thirty (30) days after written notice from Administrative Agent, PROVIDED,
HOWEVER,
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that if such Default is susceptible of cure but cannot by the use of
reasonable efforts be cured within such thirty (30) day period, such Default
shall not constitute an Event of Default under this SECTION 10.7 so long as
(i) the Borrower has commenced a cure within such thirty-day period in a
manner satisfactory to the Administrative Agent and (ii) thereafter, Borrower
is proceeding to cure such default continuously and diligently and in a
manner reasonably satisfactory to Administrative Agent and (iii) such default
is cured to Administrative Agent's satisfaction not later than sixty (60)
days after the expiration of such thirty (30) day period.
10.8 NO LONGER GENERAL PARTNER. The General Partner shall no longer be
the sole general partner of Borrower.
10.9 MATERIAL ADVERSE CHANGE. Any of the Borrower or the Guarantors
have suffered a Material Adverse Effect or is Insolvent.
10.10 BANKRUPTCY.
(a) Any of the Borrower or the Guarantors (i) have an order for
relief entered with respect to it under the Federal bankruptcy laws as now or
hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it
or any substantial portion of its Property, (iv) institute any proceeding
seeking an order for relief under the Federal bankruptcy laws as now or
hereafter in effect or seeking to adjudicate it as a bankrupt or insolvent,
or seeking dissolution, winding up, liquidation, reorganization, arrangement,
adjustment or composition of it or its debts under any law relating to
bankruptcy, insolvency or reorganization or relief of debtors or fail to file
an answer or other pleading denying the material allegations of any such
proceeding filed against it, (v) take any corporate action to authorize or
effect any of the foregoing actions set forth in this SECTION 10.10(A), (vi)
fail to contest in good faith any appointment or proceeding described in
SECTION 10.10(B) or (vii) not pay, or admit in writing its inability to pay,
its debts generally as they become due.
(b) A receiver, trustee, examiner, liquidator or similar official
shall be appointed for any of the Borrower or any Guarantor or any
substantial portion of any of their Properties or other material assets, or a
proceeding described in SECTION 10.10(A)(IV) shall be instituted against any
of the Borrower or any such Guarantor and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a
period of sixty (60) consecutive days.
10.11 LEGAL PROCEEDINGS. Any of the Borrower or the Guarantors is
enjoined, restrained or in any way impaired by any court order or judgment or
if a notice of lien, levy, or assessment is filed of record with respect to
all or any part of their Properties or other material assets by any
governmental department, office, agency or authority, which, alone or in the
aggregate, could reasonably be expected to have a Materially Adverse Effect,
or any proceeding is filed or commenced seeking to enjoin, restrain or
otherwise impair any of said Persons from conducting all or a substantial
part of their respective business affairs, and such
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proceeding is not vacated, stayed, dismissed, set aside, removed or otherwise
or remedied within ninety (90) days after the occurrence thereof.
10.12 ERISA. Any of the Borrower or the Guarantors is deemed to hold
"plan assets" within the meaning of ERISA or any regulations promulgated
thereunder of an employee benefit plan (as defined in Section 3(3) of ERISA)
which is subject to Title I of ERISA or any plan (within the meaning of
Section 4975 of the Code).
10.13 FAILURE TO SATISFY JUDGMENTS. Any of the Borrower or the
Guarantors shall fail within sixty (60) days to pay, bond or otherwise
discharge any judgments or orders for the payment of money in an amount
which, when added to all other judgments or orders outstanding against the
Borrower or any Guarantor would exceed Five Million Dollars ($5,000,000) in
the aggregate, which have not been stayed pending appeal, unless the
liability is insured against and the insurer has not challenged coverage of
such liability.
10.14 ENVIRONMENTAL REMEDIATION. Failure to remediate within the time
period required by law or governmental order, (or within a reasonable time in
light of the nature of the problem if no specific time period is so
established), environmental problems in violation of applicable law related
to any Property where the estimated cost of remediation is in the aggregate
in excess of Five Million and No/100 Dollars ($5,000,000), in each case after
all administrative hearings and appeals have been concluded.
ARTICLE XI
ACCELERATION, WAIVERS AMENDMENTS AND REMEDIES
11.1 ACCELERATION. If any Event of Default described in SECTION 10.10
hereof occurs, the obligation of the Lenders to make Advances hereunder shall
automatically terminate and the Obligations shall immediately become due and
payable. If any other Event of Default described in ARTICLE X hereof shall
have occurred and be continuing, the Administrative Agent may (and upon
demand of the Majority Lenders, shall) notify Borrower that such obligation
to make Advances has terminated and the Obligations shall immediately become
due and payable.
11.2 PRESERVATION OF RIGHTS; AMENDMENTS. No delay or omission of the
Lenders in exercising any right under the Loan Documents shall impair such
right or be construed to be a waiver of any Default or Event of Default or an
acquiescence therein, and the making of an Advance notwithstanding the
existence of a Default or Event of Default or the inability of the Borrower
to satisfy any conditions precedent to such Advance shall not constitute any
waiver or acquiescence. Any single or partial exercise of any such right
shall not preclude other or further exercise thereof or the exercise of any
other right, and no waiver, amendment, release or other variation of the
terms, conditions or provisions of the Loan Documents whatsoever shall be
valid unless in writing signed by the Administrative Agent and the number of
Lenders required hereunder and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by
law afforded shall be cumulative, and may be
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exercised concurrently or successively, and all shall be available to the
Lenders until the Obligations have been paid in full.
ARTICLE XII
THE ADMINISTRATIVE AGENT
12.1 APPOINTMENT. BOFA is hereby irrevocably appointed Administrative
Agent hereunder and under each other Loan Document, and each of the Lenders
irrevocably authorizes the Administrative Agent to act as the agent of such
Lender. The Administrative Agent agrees to act as such upon the express
conditions contained in this ARTICLE XII. The Administrative Agent shall not
have any duties or responsibilities except those expressly set forth herein
and shall not have a fiduciary relationship in respect of any Lender by
reason of this Agreement.
12.2 POWERS. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers
as are reasonably incidental thereto (but subject to SECTION 14.13 below).
The Administrative Agent shall have no implied duties, obligations or
liabilities to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan
Documents to be taken by the Administrative Agent. Only Administrative Agent
may perform the duties reserved to it under the Loan Documents and no Lender
shall act or purport to act on behalf of the other Lenders or Administrative
Agent on any such matters. Without limiting the generality of the foregoing:
(a) Administrative Agent shall have the exclusive right to
collect from Borrower and any Guarantor, or third parties, on account of the
Facility, including, principal, interest, fees, protective advances and
prepayment premiums (if any), whether such sums are received directly from
Borrower, Guarantor, or any other Persons, or are obtained by right of offset
by Administrative Agent of any kind, or by enforcement of the Loan Documents.
Administrative Agent will receive and hold all collections with respect to
the Loan for the benefit of the Lenders in accordance with their Percentages
or as otherwise provided herein.
(b) If any Lender shall receive any payments or property in
connection with the Facility (whether or not voluntary), from any Person
other than Administrative Agent, such Lender shall transfer to Administrative
Agent all such payments or property within one Business Day of receipt.
(c) No Lender shall independently initiate any judicial action
or other proceeding against Borrower or any Guarantor with respect to the
Facility.
12.3 GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower or
the Lenders for any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in
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connection herewith or therewith, except for its or their own gross
negligence or willful misconduct.
12.4 NO RESPONSIBILITY FOR LOANS, RECITALS, ETC. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or
verify (i) any statement, warranty or representation made in connection with
any Loan Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any
Loan Document; (iii) the satisfaction of any condition specified in ARTICLE
V, except receipt of items required to be delivered to the Administrative
Agent; or (iv) the validity, effectiveness or genuineness of any Loan
Document or any other instrument or writing furnished in connection therewith.
12.5 ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent shall
in all cases be fully protected in acting, or in refraining from acting,
hereunder and under any other Loan Document in accordance with written
instructions signed by the Majority Lenders (or, in the case of any waiver or
amendment listed in SECTION 14.13(A) hereof, all of the Lenders) and such
instructions and any action taken or failure to act pursuant thereto shall be
binding on all of the Lenders and on all holders of Notes. The
Administrative Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first
receive such advise or concurrence, if it so requests, of the Majority
Lenders and shall first be indemnified to its satisfaction by the Lenders pro
rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
12.6 EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents
and attorneys-in-fact and shall not be answerable to the Lenders, except as
to money or securities received by it or its authorized agents, for the
default or misconduct of any such agents or attorneys-in-fact selected by it
with reasonable care. The Administrative Agent shall be entitled to engage
and rely upon advice of legal counsel (including the Borrower's counsel),
independent accountants and other professionals and experts selected by the
Administrative Agent concerning all matters pertaining to the agency hereby
created and its duties hereunder and under any other Loan Document.
12.7 RELIANCE ON DOCUMENTS. The Administrative Agent shall be entitled
to rely upon any Note, writing, notice, consent, certificate, facsimile,
affidavit, letter, telegram, statement, paper, document or other
communication believed by it to be genuine and correct and to have been
signed, sent or otherwise communicated by the proper person or persons.
12.8 ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The
Lenders agree to reimburse and indemnify upon demand the Administrative Agent
ratably in accordance with their respective Percentages (i) for any amounts
not reimbursed by the Borrower for which the Administrative Agent is entitled
to reimbursement by the Borrower under the Loan Documents, (ii) for any other
expenses (including reasonable attorneys' fees) incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration, modification and
enforcement of the Loan Documents, if not paid by
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Borrower, and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be
liable for any of the foregoing to the extent they arise from the gross
negligence or willful misconduct of the Administrative Agent. Each Lender
shall indemnify the Administrative Agent and the other Lenders with respect
to claims, liabilities, damages, costs, losses and expenses (including,
without limitation, attorneys' fees) arising from or relating to the failure
of such indemnifying Lender to satisfy its obligations under this Agreement
and the other Loan Documents.
12.9 RIGHTS AS A LENDER. With respect to the Commitment, Advances made
by it, the Note issued to it and otherwise, the Administrative Agent shall
have the same rights and powers hereunder and under any other Loan Document
as any Lender and may exercise the same as though it were not the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its capacity
as a Lender. The Administrative Agent, in its capacity as a Lender, may
accept deposits from, lend money to, and generally engage in any kind of
trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted
hereby from engaging with any other Person. The Lenders acknowledge that
Administrative Agent and its Affiliates now or in the future may have banking
or other financial relationships, including being an agent on other loans,
with Borrower and its Affiliates, as though BOFA were not Administrative
Agent hereunder and without notice to or consent of the Lenders. Each Lender
hereby expressly waives any objection to such actual or potential conflict of
interest. The Lenders acknowledge that in the course of such activities,
BOFA or its Affiliates may receive information regarding Borrower or its
Affiliates and acknowledge that Administrative Agent shall be under no
obligation to provide such information to them, whether or not confidential.
12.10 COMMITMENT AS A LENDER. BOFA agrees to maintain at all times a
Commitment equal to at least $20,000,000 so long as BOFA remains as
Administrative Agent; provided, that the foregoing agreement of BOFA shall
not apply at any time following a Monetary Default or Event of Default
(irrespective of whether such Monetary Default or Event of Default
subsequently is waived).
12.11 LENDER CREDIT DECISION. Each Lender acknowledges that neither the
Administrative Agent nor any of its agents has made any representation or
warranty to such Lender and that no action or statement hereafter made or
taken by the Administrative Agent or any of its agents shall be deemed to be
representation or warranty by the Administrative Agent to such Lenders. Each
Lender further acknowledges that it has, independently and without reliance
upon the Administrative Agent or any other Lender and based on the financial
statements prepared by the Borrower and such other documents and information
as it has
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deemed appropriate, made its own credit analysis and decision to enter into
this Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative
Agent or any other Lender and based on such documents and information as it
shall deem 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.
12.12 SUCCESSOR ADMINISTRATIVE AGENT. Each Lender agrees that BOFA
shall serve as Administrative Agent at all times during the term of this
Facility, except that BOFA may resign as Administrative Agent at any time, in
its sole discretion, upon thirty (30) days' prior written notice to the
Lenders and Borrower. If the Administrative Agent assigns or participates
its total Commitment, then Administrative Agent agrees to resign upon the
request of any Lender. Upon any such resignation, the Majority Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall
have been so appointed by the Majority Lenders and shall have accepted such
appointment within thirty (30) days after the retiring Administrative Agent's
giving notice of resignation, then the retiring Administrative Agent may
appoint, on behalf of the Borrower and the Lenders, a successor
Administrative Agent. Such successor Administrative Agent shall be a
commercial bank having capital and retained earnings of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor Administrative Agent, such successor Administrative
Agent shall thereupon succeed to and become vested with all the rights,
powers, privileges and duties of the retiring Administrative Agent (including
the right to receive any fees for performing such duties which accrue
thereafter), and the retiring Administrative Agent shall be discharged from
its duties and obligations hereunder and under the other Loan Documents.
After any retiring Administrative Agent's resignation hereunder as
Administrative Agent, the provisions of this ARTICLE XII shall continue in
effect for its benefit and that of the other Lenders in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder and under the other Loan Documents.
12.13 NOTICE OF DEFAULTS. If a Lender becomes aware of a Default or
Event of Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Event of Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact. Except for defaults in the payment of principal, interest and fees
payable to Administrative Agent for the account of the Lenders and such other
Obligations for which Administrative Agent is expressly responsible for
determining Borrower's compliance, Administrative Agent shall not be deemed
to have knowledge or notice of the occurrence of any Default or Event of
Default, unless Administrative Agent shall have received written notice from
a Lender or Borrower referring to the Loan, describing such Default or Event
of Default and stating that such notice is a "notice of default".
Administrative Agent will notify the Lenders of its receipt of any such
notice. Administrative Agent shall take action with respect to such Default
or Event of Default in accordance with the provisions of this Agreement and
the Loan Documents.
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12.14 REQUESTS FOR APPROVAL. If the Administrative Agent requests in
writing the consent or approval of a Lender, whether or not such consent or
approval is required hereunder (and no such requirement shall be inferred
from any such request), such Lender shall respond and either approve or
disapprove definitively in writing to the Administrative Agent within seven
(7) Business Days (or sooner if such notice specifies a shorter period based
on Administrative Agent's good faith determination that circumstances warrant
an earlier response) after such written request from the Administrative
Agent. If any Lender does not so respond, that Lender shall be deemed to
have approved the request. Upon request, the Administrative Agent shall
notify the Lenders which Lenders, if any, failed to respond to a request for
approval.
12.15 COPIES OF DOCUMENTS. Administrative Agent shall promptly deliver
to each of the Lenders copies of all notices of default and other formal
notices sent to or received by the Administrative Agent pursuant to SECTION
15.1 of this Agreement. Within fifteen (15) Business Days after a request by
a Lender to the Administrative Agent for other documents furnished to the
Administrative Agent by the Borrower, the Administrative Agent shall provide
copies of such documents to such Lender except where this Agreement obligates
Administrative Agent to provide copies in a shorter period of time.
12.16 DEFAULTING LENDERS. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject
to the consent or approval of the Majority Lenders, such Defaulting Lender or
all Lenders shall be immediately suspended until such time as the Lender is
no longer a Defaulting Lender. If a Defaulting Lender has failed to fund its
Percentage of any Advance and until such time as such Defaulting Lender
subsequently funds its Percentage of such Advance, all Obligations owing to
such Defaulting Lender hereunder shall be subordinated in right of payment,
as provided in the following sentence, to the prior payment in full of all
principal of, interest on and fees relating to the Loans funded by the other
Lenders in connection with any such Advance in which the Defaulting Lender
has not funded its Percentage (such principal, interest and fees being
referred to as "Senior Loans" for the purposes of this section). All amounts
paid by the Borrower and otherwise due to be applied to the Obligations owing
to such Defaulting Lender pursuant to the terms hereof shall be distributed
by the Administrative Agent to the other Lenders in accordance with their
respective Percentages (recalculated for the purposes hereof to exclude the
Defaulting Lender) until all Senior Loans have been paid in full. At that
point, the "Defaulting Lender" shall no longer be deemed a Defaulting Lender.
After the Senior Loans have been paid in full equitable adjustments will be
made in connection with future payments by the Borrower to the extent a
portion of the Senior Loans had been repaid with amounts that otherwise would
have been distributed to a Defaulting Lender but for the operation of this
SECTION 12.16. This provision governs only the relationship among the
Administrative Agent, each Defaulting Lender and the other Lenders; nothing
hereunder shall limit the obligation of the Borrower to repay all Loans in
accordance with the terms of this Agreement. The provisions of this SECTION
12.16 shall apply and be effective regardless of whether a Default occurs and
is continuing, and notwithstanding (i) any other provision of this Agreement
to the contrary, (ii) any instruction of the Borrower as to its desired
application of
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payments or (iii) the suspension of such Defaulting Lender's right to vote on
matters as provided above.
12.17 WITHHOLDING TAX. All taxes due and payable on any payments to be
made to a Lender under this Agreement shall be such Lender's sole
responsibility, except to the extent such taxes are actually reimbursed by
Borrower under the Loan Documents. All payments to be made to each Lender
under this Agreement shall be made after deduction for any taxes, charges,
levies or withholdings which are imposed by the country of incorporation of
Borrower, the United States of America or any other applicable taxing
authority. Each Lender agrees to provide to Administrative Agent completed
and signed copies of any forms that may be required by the United States
Internal Revenue Service (and any applicable state authority) in order to
certify such Lender's exemption from or reduction of United States (or
applicable state) withholding taxes with respect to payments to be made to
such Lender under this Agreement or the Loan Documents. Each Lender agrees
to promptly notify Administrative Agent of any change which would modify or
render invalid any claimed exemption or reduction, or of any sale,
assignment, participation, or other transfer by such Lender of all or part of
its interest in the Facility. If any governmental authority of the United
States or other jurisdiction asserts a claim that Administrative Agent did
not properly withhold tax from amounts paid to or for the account of any
Lender, such Lender shall indemnify Administrative Agent fully for all
amounts paid by Administrative Agent as tax or otherwise, including penalties
and interest, and including any taxes imposed by any jurisdiction on the
amount payable to Administrative Agent under this section, together with all
costs and expenses (including legal expenses). The obligation of the Lenders
under this subsection shall survive the payment of all Obligations and the
resignation or replacement of Administrative Agent.
12.18 BORROWER'S DEFAULT; ENFORCEMENT. Upon the occurrence of an Event
of Default under any Loan Document, the Majority Lenders shall have the
right, upon written notice to Administrative Agent, to require that
Administrative Agent exercise the rights of the Lenders as directed by the
Majority Lenders; provided, however, that the Lenders shall indemnify,
exonerate and hold Administrative Agent harmless from and against any and all
claims, losses, liabilities, damages and costs (including reasonable legal
fees) incurred by Administrative Agent as a result of any such exercise of
rights at the direction of the Lenders and not resulting from the gross
negligence or willful misconduct of Administrative Agent.
12.19 WORKOUT. If Borrower is in material default under the Loan
Documents and has not cured the default within any applicable cure period,
Administrative Agent may declare by written notice to the Lenders that the
Loan is "in workout" (the "NOTICE OF WORKOUT"). The Lenders acknowledge that
workouts of defaulted loans usually are resolved by either a borrower cure of
the default; or a restructure of or other modification to the loan; or by
exercising remedies; and that it is in the interest of the Lenders to attain
a resolution within a reasonable period of time. Therefor the Lenders agree
that if, after 90 days from the date of Administrative Agent's Notice of
Workout, there has been neither a cure of the default(s), nor a restructure
nor other modification executed, nor exercise of the Lenders' remedies
hereunder, then Administrative Agent on behalf of the Lenders shall sue
Borrower and any Guarantors for collection of amounts owing to the Lenders,
subject to and in accordance with
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advice of Administrative Agent's counsel. Notwithstanding any action by
Administrative Agent under this SECTION 12.19, Administrative Agent shall
follow the direction of the Majority Lenders under SECTION 12.18 above at any
time. Nevertheless, unless and until the Majority Lenders shall direct
Administrative Agent to the contrary, Administrative Agent shall have the
right but not the obligation to take such action as it may deem appropriate
to preserve the rights of the Lenders to recover any amounts owing under the
Loan Documents, without the consent of the Majority Lenders.
12.20 BANKRUPTCY OF BORROWER. In the event of a bankruptcy by Borrower,
the Lenders shall act through Administrative Agent to petition the court,
make any motion for relief from the automatic stay, participate in any
appropriate creditors' committee, vote on a plan of reorganization or pursue
other remedies or actions in accordance with the approval of the Majority
Lenders.
12.21 RELATIONSHIP OF PARTIES. This Agreement is not intended to
establish a partnership or joint venture between Administrative Agent and the
Lenders. The provisions of the Loan Documents regarding the relationships
among Administrative Agent and the Lenders and this ARTICLE XII is intended
solely to facilitate co-lending relationships among the Lenders for the
Facility. No security or investment contract under any federal or state law
is intended to be created among the Lenders or between Administrative Agent
and the Lenders. The execution of this Agreement, the performance of the
terms thereof, and the Lenders' purchase of and ownership interest in the
Facility and the Loan Documents shall not constitute any Lender as owner,
purchaser or seller of any security (as that term is defined in the
Securities Act of 1933 or the Securities Exchange Act of 1934) issued, owned,
purchased or sole by BOFA or any of its Subsidiaries or Affiliates, either as
principal or as agent for Borrower. Each Lender is purchasing and acquiring
legal and equitable ownership of its Percentage and is not making a loan to
BOFA, and no debtor-creditor relationship exists between them as a result of
this Agreement.
12.22 COUNSEL. The Lenders acknowledge that Administrative Agent's
counsel has represented and shall represent only Administrative Agent, in its
capacity as Administrative Agent and Lender, in connection with the Loan
Documents and this Agreement. Each other Lender shall retain independent
legal counsel regarding all such matters, documents and agreements. After an
Event of Default, the Lenders shall enter into a joint privilege agreement
regarding the exchange of information that is or may be subject to
attorney-client privilege or related privileges. Administrative Agent's
counsel shall prepare such joint privilege agreement, subject to the approval
of the Majority Lenders which approval shall not be unreasonably withheld by
any Lender.
ARTICLE XIII
BENEFIT OF AGREEMENT; PARTICIPATIONS; ASSIGNMENTS
13.1 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of Borrower and the
Lenders and their respective
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successors and assigns, except that the Borrower shall not have the right to
assign its rights or obligations under the Loan Documents without the consent
of all the Lenders and any assignment by any Lender must be made in
compliance with SECTION 13.3. The Administrative Agent may treat the payee
of any Note as the owner thereof for all purposes hereof unless and until
such payee complies with SECTION 13.3 in the case of an assignment thereof
or, in the case of any other transfer, a written notice of the transfer is
filed with the Administrative Agent. Any assignee or transferee of a Note
agrees by acceptance thereof to be bound by all the terms and provisions of
the Loan Documents. Any request, authority or consent of any Person who at
the time of making such request or giving such authority or consent is the
holder of any Note, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Note or of any Note or Notes issued in
exchange therefor.
13.2 PARTICIPATIONS.
(a) PERMITTED PARTICIPANTS: EFFECT. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at any
time sell to one or more banks or other entities ("PARTICIPANTS"), in an
amount not less than $10,000,000 with $1,000,000 increments thereafter,
participating interests in any Advance owing to such Lender, any Note held by
such Lender, any Commitment of such Lender or any other interest of such
Lender under the Loan Documents. In the event of any such sale by a Lender
of participating interests to a Participant, such Lender's obligations under
the Loan Documents shall remain unchanged, such Lender shall remain solely
responsible to the other parties hereto for the performance of such
obligations, such Lender shall remain the holder of any such Note for all
purposes under the Loan Documents, all amounts payable by Borrower under this
Agreement shall be determined as if such Lender had not sold such
participating interests, and Borrower and the Administrative Agent and the
other Lenders shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under the Loan Documents.
(b) VOTING RIGHTS. Each Lender shall retain the sole right to
vote its Percentage of the Aggregate Commitment, without the consent of any
Participant, for the approval or disapproval of any amendment, modification
or waiver of any provision of the Loan Documents, provided that such Lender
may grant such Participant the right to approve any amendment, modification
or waiver which forgives principal, interest or fees or reduces the interest
rate or fees payable hereunder, postpones any date fixed for any
regularly-scheduled payment of principal of or interest on the Obligations,
releases Collateral beyond any releases expressly provided for herein or
extends the Maturity Date.
13.3 ASSIGNMENTS.
(a) PERMITTED ASSIGNMENTS. Any Lender may, with the prior
written consent of Administrative Agent, Documentation Agent and Borrower
(which consents shall not be unreasonably withheld or delayed), in accordance
with applicable law, at any time assign to one or more Eligible Assignees
(collectively, "Purchasers"), in an amount not less than $10,000,000 with
$1,000,000 increments thereafter, all or any part of its rights and
obligations under the Loan Documents, except that no consent of Borrower or
Administrative Agent shall be required if any Monetary Default, other
material Default or Event of Default has occurred and is continuing and that
no consent of Administrative Agent or Borrower shall ever be
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required for (i) any assignment to a Person directly or indirectly
controlling, controlled by or under direct or indirect common control with
the assigning Lender or (ii) the pledge or assignment by a Lender of such
Lender's Note and other rights under the Loan Documents to any Federal
Reserve Bank in accordance with applicable law. Such assignments and
assumptions shall be substantially in the form of EXHIBIT H hereto. The
Borrower shall execute any and all documents which are customarily required
by such Lender (including, without limitation, a replacement promissory note
or notes in the forms provided hereunder) in connection with any such
assignment, but Borrower shall not be obligated to pay any fees and expenses
incurred by any Lender in connection with any assignment pursuant to this
Section. Any Lender selling all or any part of its rights and obligation
hereunder in a transaction requiring the consent of the Administrative Agent
shall pay to the Administrative Agent a fee of $3,500.00 per assignee to
reimburse Administrative Agent for its involvement in such assignment (except
in connection with an assignment to a branch office or Affiliate of such
Lender).
(b) EFFECTIVE DATE OF ASSIGNMENT. Upon delivery to the
Administrative Agent of a notice of assignment executed by the assigning
Lender and the Purchaser, such assignment shall become effective on the
effective date specified in such notice of assignment. The notice of
assignment shall contain an undertaking by the Purchaser to be bound as a
Lender by this Agreement and the other Loan Documents with the same force and
effect as if it were an original signatory hereto, and a representation by
the Purchaser to the effect that none of the consideration used to make the
purchase of the Commitment and the Loan under the applicable assignment
agreement are "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be "plan
assets" under ERISA, all in form and content satisfactory to the
Administrative Agent. On and after the effective date of such assignment,
such Purchaser shall for all purposes be a Lender party to this Agreement and
any other Loan Document executed by the Lenders and shall have all the rights
and obligations of a Lender under the Loan Documents, to the same extent as
if it were an original party hereto, and no further consent or action by
Borrower, the Lenders or the Administrative Agent shall be required to
release the transferor Lender with respect to the percentage of the
Commitment and Advances assigned to such Purchaser. Upon the consummation of
any assignment to a Purchaser pursuant to this SECTION 13.3.2, the transferor
Lender, the Administrative Agent and Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor Lender
and new Notes or, as appropriate, replacement Notes, are issued to such
Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
13.4 DISSEMINATION OF INFORMATION. Borrower authorizes each Lender to
disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and
any prospective Transferee any and all information in such Lender's
possession concerning the creditworthiness of Borrower and the Guarantors.
Each Transferee shall agree to keep confidential any such information which
is not publicly available.
13.5 TAX TREATMENT. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States
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or any State thereof, the transferor Lender shall cause such Transferee,
concurrently with the effectiveness of such transfer, to comply with all
applicable provisions of the Code with respect to withholding and other tax
matters.
ARTICLE XIV
GENERAL PROVISIONS
14.1 SURVIVAL OF REPRESENTATIONS. All representations and warranties
contained in this Agreement shall survive delivery of the Notes and the
making of the Advances herein contemplated.
14.2 GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
14.3 TAXES. Any recording and other taxes (excluding franchise, income
or similar taxes) or other similar assessments or charges payable or ruled
payable by any governmental authority incurred in connection with the
consummation of the transactions contemplated by this Agreement shall be paid
by the Borrower, together with interest and penalties, if any.
14.4 HEADINGS. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Loan Documents.
14.5 NO THIRD PARTY BENEFICIARIES. This Agreement shall not be
construed so as to confer any right or benefit upon any Person other than the
parties to this Agreement and their respective successors and assigns.
14.6 EXPENSES: INDEMNIFICATION. Subject to the provisions of this
Agreement, Borrower will pay upon demand (a) all out-of-pocket costs and
expenses incurred by the Administrative Agent (including the reasonable fees,
out-of-pocket expenses and other reasonable expenses of counsel, which
counsel may be employees of Administrative Agent) in connection with the
preparation, execution and delivery of this Agreement, the Notes, the Loan
Documents and any other agreements or documents referred to herein or therein
and any amendments thereto, (b) all out-of-pocket costs and expenses incurred
by the Administrative Agent and the Lenders (including the reasonable fees,
out-of-pocket expenses and other reasonable expenses of counsel for the
Administrative Agent, the Documentation Agent and each of the other Lenders)
in connection with the enforcement and protection of the rights of the
Lenders under this Agreement, the Notes, the Loan Documents or any other
agreement or document referred to herein or therein; provided, however, that
the expenses of counsel for which Borrower is obligated under this subsection
(b) shall be limited to the reasonable non-duplicative expenses of (A) a
single outside law firm representing Administrative Agent, (B) a single
outside law firm representing Documentation Agent (which may or may not be
the same law firm representing Administrative Agent) and (C) a single outside
law firm representing all of the other Lenders as a group (which may or may
not be the same law firm representing
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Administrative Agent or Documentation Agent), and (c) all reasonable and
customary costs and expenses of periodic audits by the Administrative Agent's
personnel of the Borrower's books and records provided that prior to an Event
of Default, Borrower shall not be required to pay for more than one such
audit during any year. The Borrower further agrees to indemnify the Lenders,
their directors, officers and employees against all losses, claims, damages,
penalties, judgments, liabilities and reasonable expenses (including, without
imitation, all expenses of litigation or preparation therefor, whether or not
any Lender is a party thereto) which any of them may pay or incur arising out
of or relating to this Agreement, the other Loan Documents, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Advance hereunder, except that the
foregoing indemnity shall not apply to a Lender to the extent that any
losses, claims, etc. are the result of such Lender's gross negligence or
willful misconduct. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
14.7 SEVERABILITY OF PROVISIONS. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are
declared to be severable.
14.8 NONLIABILITY OF THE LENDERS. The relationship between the
Borrower and the Lenders shall be solely that of borrower and lender.
Neither the Administrative Agent nor the Lenders shall have any fiduciary
responsibilities to the Borrower. Neither the Administrative Agent nor the
Lenders undertake responsibility to the Borrower to review or inform the
Borrower of any matter in connection with any phase of the Borrower's
business or operations.
14.9 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
14.10 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS
STATE COURT SITTING IN CHICAGO, ILLINOIS IN ANY ACTION OR PROCEEDING ARISING
OUT OF OR RELATING TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY
AGREES THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD
AND DETERMINED IN ANY SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY
NOW OR HEREAFTER HAVE AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING
BROUGHT IN SUCH A COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING
HEREIN SHALL LIMIT THE RIGHT OF THE LENDERS TO BRING PROCEEDINGS AGAINST THE
BORROWER IN THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY
THE BORROWER AGAINST THE LENDERS OR ANY AFFILIATE
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OF THE LENDERS INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER IN ANY WAY
ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
14.11 WAIVER OF JURY TRIAL. EACH OF THE BORROWER, ADMINISTRATIVE AGENT,
DOCUMENTATION AGENT AND LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND
INTENTIONALLY WAIVE ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY
LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS AGREEMENT, THE NOTES,
OR ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN, OR ANY OTHER STATEMENTS OR
ACTIONS OF ANY PARTY HERETO. EACH SUCH ENTITY ACKNOWLEDGES THAT IT HAS BEEN
REPRESENTED IN THE SIGNING OF THIS AGREEMENT AND IN THE MAKING OF THIS WAIVER
BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS
DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES
THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS
WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND BORROWER'S COUNSEL
AND IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND LENDERS TO MAKE THE
LOAN, ENTER INTO THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS, AND
(iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN DOCUMENTS
AS IF FULLY INCORPORATED THEREIN.
[ILLEGIBLE]
- ----------------------
INITIALS OF BORROWER
14.12 SUCCESSORS AND ASSIGNS. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and
the Lenders and their respective successors and assigns, except that the
Borrower shall not have the right to assign its rights or obligations under
the Loan Documents. Any assignee or transferee of the Notes agrees by
acceptance thereof to be bound by all the terms and provisions of the Loan
Documents. Any request, authority or consent of any Person, who at the time
of making such request or giving such authority or consent is the holder of
the Notes, shall be conclusive and binding on any subsequent holder,
transferee or assignee of such Notes or of any note or notes issued in
exchange therefor.
14.13 ENTIRE AGREEMENT; MODIFICATION OF AGREEMENT. The Loan Documents,
together with the letter from Administrative Agent to Borrower, accepted by
Borrower, regarding the underwriting fee, embody the entire agreement among
the Borrower, the Administrative Agent, and Lenders and supersede all prior
conversations, agreements, understandings, commitments and term sheets among
any or all of such parties with respect to the subject matter hereof. Any
provisions of this Agreement and the Guaranties may be amended or waived, or
any liability thereunder released, if, but only if, such amendment or waiver
is in writing and is signed by the Borrower, and Administrative Agent if the
rights or duties of Administrative Agent are affected thereby, and
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(a) each of the Lenders, if such amendment or waiver
(i) reduces or forgives any payment of principal or interest
on the Obligations or any fees payable by Borrower to such Lender
hereunder; or
(ii) postpones the date fixed for any payment of principal
of or interest on the Obligations or any fees payable by Borrower to
such Lender hereunder; or
(iii) changes the amount of such Lender's Commitment (other
than pursuant to an assignment permitted under SECTION 13.3) or the
unpaid principal amount of such Lender's Note; or
(iv) extends the Maturity Date; or
(v) changes the definition of Majority Lenders or modifies
any requirement for consent by each of the Lenders under this
SECTION 14.13(A); or
(vi) releases any Guarantor from the obligations of any
Guaranty; or
(vii) increases the Aggregate Commitment above $150,000,000.
(b) the Majority Lenders, as to all such material amendments or
material waivers not otherwise listed in SECTION 14.13(A)
above.
(c) the Administrative Agent, as to all other matters.
14.14 DEALINGS WITH THE BORROWER. The Lenders and their affiliates may
accept deposits from, extend credit to and generally engage in any kind of
banking, trust or other business with any of the Borrower or the Guarantors
or any of their Affiliates regardless of the capacity of the Lenders
hereunder.
14.15 SET-OFF.
(a) If an Event of Default shall have occurred, each Lender
shall have the right, at any time and from time to time without notice to the
Borrower, any such notice being hereby expressly waived, to set-off and to
appropriate or apply any and all deposits of money or property or any other
indebtedness at any time held or owing by such Lender to or for the credit or
the account of the Borrower against and on account of all outstanding
Obligations and all Obligations which from time to time may become due
hereunder and all other obligations and liabilities of the Borrower under
this Agreement, irrespective of whether or not such Lender shall have made
any demand hereunder and whether or not said obligations and liabilities
shall have matured.
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(b) Each Lender agrees that if it shall, by exercising any right
of set-off or counterclaim or otherwise, receive payment of a proportion of
the aggregate amount of principal, interest or fees due with respect to any
Note held by it which is greater than the proportion received by any other
Lender in respect of the aggregate amount of principal, interest or fees due
with respect to any Note held by such other Lender, the Lender receiving such
proportionately greater payment shall purchase such participations in the
Notes held by the other Lenders and such other adjustments shall be made as
may be required so that all such payments of principal, interest or Fees with
respect to the Notes held by the Lenders shall be shared by the Lenders pro
rata according to their respective Commitments.
14.16 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, all of which taken together shall constitute one agreement, and
any of the parties hereto may execute this Agreement by signing any such
counterpart. This Agreement shall be effective when it has been executed by
the Borrower and each of the Lenders shown on the signature pages hereof.
14.17 DISCRETION. In exercising any discretion reserved herein to the
Administrative Agent, the Majority Lenders or the Lenders, the Administrative
Agent, the Majority Lenders or the Lenders, as the case may be, shall
exercise such discretion in a manner which is commercially reasonable by the
standards of the commercial lending industry with respect to credits
comparable to the Facility.
ARTICLE XV
NOTICES
15.1 GIVING NOTICE. All notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party
at its address set forth below or at such other address as may be designated
by such party in a notice to the other parties. Any notice, if mailed and
properly addressed with postage prepaid, shall be deemed given when received;
any notice, if transmitted by telex or facsimile, shall be deemed given when
transmitted (answerback confined in the case of telexes). Notice may be given
as follows:
To the Borrower:
Great Lakes REIT, L.P.
823 Commerce Drive
Suite 300
Oak Brook, Illinois 60523
Attention: Jim Hicks
Telecopy: (630) 368-2929
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With a copy to:
Ungaretti and Harris
Three First National Plaza
Suite 3500
Chicago, Illinois 60602
Attn: Rich Ungaretti
Telecopy: (312) 977-4405
To each Lender:
As shown below the Lender's signature.
To the Administrative Agent:
Bank of America National Trust and Savings Association
Commercial Real Estate Services
231 South LaSalle Street, 12th Floor
Chicago, Illinois 60697
Attention: Dan Walsh
Telecopy: (312) 974-4970
With a copy to:
Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 West Wacker Drive
Suite 2700
Chicago, Illinois 60606
Attention: Howard J. Kirschbaum, Esq.
Telecopy: (312) 984-3150
15.2 CHANGE OF ADDRESS. Each party may change the address for service
of notice upon it by a notice in writing to the other parties hereto.
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IN WITNESS WHEREOF, the undersigned have executed this Agreement as of the
date first above written.
BORROWER: GREAT LAKES REIT, L.P.
By: Great Lakes REIT, Inc., its
General Partner
By: /s/ Richard L. Resley
-----------------------------------
Title: Secretary
--------------------------------
LENDERS: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ D. G. Walsh
-----------------------------------
Title: Vice-President
--------------------------------
Commitment: $30,000,000
Percentage of Aggregate Commitment: 20%
Address for Notices:
Commercial Real Estate Services
231 South LaSalle Street, 12th Floor
Chicago, Illinois 60697
Attention: Dan Walsh
Telephone: (312) 828-5087
Telecopy: (312) 974-4970
THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Corporate Banking Officer
--------------------------------
Commitment: $30,000,000
Percentage of Aggregate Commitment: 20%
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Kevin Gillen
Telephone: (312) 732-1486
Telecopy: (312) 732-1117
68
<PAGE>
DRESDNER BANK AG, NEW YORK AND GRAND
CAYMAN BRANCHES
By: /s/ Beverly G. Cason
-----------------------------------
Title: Vice President
--------------------------------
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Assistant Treasurer
--------------------------------
Commitment: $30,000,000
Percentage of Aggregate Commitment: 20%
Address for Notices:
190 South LaSalle Street, Suite 2700
Chicago, Illinois 60603
Attention: Jim Blessing
Telephone: (312) 444-1318
Telecopy: (312) 444-1301
U.S. BANK NATIONAL ASSOCIATION
By: /s/ Gregory T. Warsek
-----------------------------------
Title: Senior Vice President
--------------------------------
Commitment: $30,000,000
Percentage of Aggregate Commitment: 20%
Address for Notices:
701 Lee Street
Des Plaines, Illinois 60016
Attention: Gregory T. Warsek
Telephone: (847) 390-5616
Telecopy: (847) 390-5698
LA SALLE NATIONAL BANK
By: /s/ John C. Hein
-----------------------------------
Title: FVP
--------------------------------
Commitment: $30,000,000
Percentage of Aggregate Commitment: 20%
69
<PAGE>
Address for Notices:
135 South LaSalle Street
Chicago, Illinois 60603
Attention: John C. Hein
Telephone: (312) 904-8620
Telecopy: (312) 904-6467
ADMINISTRATIVE AGENT: BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION
By: /s/ D. G. Walsh
-----------------------------------
Title: Vice-President
--------------------------------
Address for Notices:
Commercial Real Estate Services
231 South LaSalle Street, 12th Floor
Chicago, Illinois 60697
Attention: Dan Walsh
Telephone: (312) 828-5087
Telecopy: (312) 974-4970
DOCUMENTATION AGENT: THE FIRST NATIONAL BANK OF CHICAGO
By: /s/ [ILLEGIBLE]
-----------------------------------
Title: Corporate Banking Officer
--------------------------------
Address for Notices:
One First National Plaza
Chicago, Illinois 60670
Attention: Kevin Gillen
Telephone: (312) 732-1486
Telecopy: (312) 732-1117
70
<PAGE>
SCHEDULE 1
LIST OF SUBSIDIARIES
1. GLR No. 1, Inc. an Illinois corporation
2. GLR No. 2, Inc., an Illinois corporation
3. GLR No. 3, a Maryland real estate investment trust
S1-1
<PAGE>
SCHEDULE 2
LIST OF UNENCUMBERED ASSETS
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
1. Arlington Ridge Service Center 601 Campus Drive
Arlington Heights, IL
2. 3400 Corporate Drive 3400 Dundee Road
Northbrook, IL
3. Highpoint Business Center 160, 165, 175, 180 and 185 Hansen
Court
Wood Dale, IL
(5 buildings)
4. 1251 Plum Grove Road 1251 Plum Grove Road
Schaumburg, IL
5. Park Place VII 11925 West Lake Park Drive
Milwaukee, WI
6. 1011 Touhy Atrium 1011 East Touhy Avenue
Des Plaines, IL
7. One Hawthorn Place 175 East Hawthorn Parkway
Vernon Hills, IL
8. Court Office Center 16601 S. Kedzie
Markham, IL
9. One Century Centre 1750 East Golf Road
Schaumburg, IL
10. Metro Center V 655 Metro Place South
Dublin, OH
11. Corporate Woods 375 Bishops Way
Brookfield, WI
12. Metro Center IV 425 Metro Place North
Dublin, OH
</TABLE>
S2-1
<PAGE>
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
13. Arlington Business Center 3455, 3550 and 3555 Salt Creek Lane
Arlington Heights, IL
(3 buildings)
14. 777 Eisenhower Plaza 777 Eisenhower Parkway
Ann Arbor, MI
15. 2800 River Road 2800 River Road
Des Plaines, IL
16. Kensington Corporate Center 1660 Feehanville Drive
Mount Prospect, IL
17. Oak Hollow Gateway 24800 Denso Drive
Southfield, MI
18. One Park Place 11270 West Park Place
Milwaukee, WI
19. 823 Commerce Drive 823 Commerce Drive
Oak Brook, IL
20. 565 Lakeview Parkway 565 Lakeview Parkway
Vernon Hills, IL
21. 30 Merchant Street 30 Merchant Street
Springdale, OH
22. 2 Marriot Drive 2 Marriot Drive
Lincolnshire, IL
23. Dublin Tech Mart 4860-5000 Blazer Memorial Parkway
Dublin, OH
24. 3010 and 3020 Wood Creek Drive 3010 and 3020 Wood Creek Drive
Downers Grove, IL
25. Lincoln Center II and III 2514 South 102nd Street and
10150 West National Avenue
West Allis, WI
26. Long Lake Crossing 1301 West Long Lake Road
Troy, MI
</TABLE>
S2-2
<PAGE>
<TABLE>
<CAPTION>
Name Address
---- -------
<S> <C>
27. Court International Two 2550 University Avenue West
St. Paul, MN
28. No. 40 Oak Hollow No. 40 Oak Hollow
Southfield, MI
29. Centennial Center 1900 East Golf Road
Schaumburg, IL
30. Star Bank Center 175 South 3rd Street
Columbus, OH
</TABLE>
S2-3
<PAGE>
EXHIBIT A
FORM OF GUARANTY
This Guaranty made as of _____________________, by ______________________
("GUARANTOR"), to and for the benefit of Bank of America National Trust and
Savings Association, individually as a lender ("BOFA") and as administrative
agent ("Administrative Agent") for itself and the other Lenders, as defined
in the Credit Agreement (as defined below), and The First National Bank of
Chicago, individually as a lender ("First Chicago") and as documentation
agent ("Documentation Agent"), and their respective successors and assigns.
RECITALS
A. Great Lakes REIT, L.P. a Delaware limited partnership ("BORROWER") has
requested that the Lenders make an unsecured revolving credit facility available
to Borrower in the aggregate principal amount of up to $150,000,000
("FACILITY"), and that Administrative Agent act as administrative agent and
Documentation Agent act as documentation agent with respect thereto.
B. The Lenders have agreed to make available the Facility to Borrower,
and Administrative Agent and Documentation Agent have agreed to act in said
agency capacities, pursuant to the terms and conditions set forth in an
Unsecured Revolving Credit Agreement dated____________, 1998, between Borrower,
Administrative Agent, Documentation Agent and the Lenders ("CREDIT AGREEMENT"),
and Guarantor desires that the Lenders continue to make Advances under the
Credit Agreement and that Administrative Agent and Documentation Agent continue
to act in said agency capacities. All capitalized terms used and not otherwise
defined herein shall have the respective meanings ascribed to such terms in the
Credit Agreement.
C. Borrower has executed and delivered to the Lenders one or more
promissory notes each dated ___________, 1998 in the aggregate principal amount
of $150,000,000 as evidence of its indebtedness to the Lenders with respect to
the Facility (the promissory notes described above, together with any amendments
or allonges thereto, or restatements, replacements or renewals thereof, and/or
new promissory notes to new Lenders under the Credit Agreement, are collectively
referred to herein as the "Revolving Note"). Borrower has also executed and
delivered to BOFA a promissory note dated _________, 1998 ("Swingline Note")
which evidences any Swingline Loans that may be made by BOFA under the Credit
Agreement.
D. Guarantor is deriving and will continue to derive substantial
financial benefit from the Facility evidenced by the Revolving Note, the
Swingline Note, the Credit Agreement and the other Loan Documents.
A-1
<PAGE>
E. The execution and delivery of this Guaranty by Guarantor is required
pursuant to the express terms of the Credit Agreement as a condition to any
further Advances under the Facility.
AGREEMENTS
NOW, THEREFORE, in consideration of the matters described in the foregoing
Recitals, which Recitals are incorporated herein and made a part hereof, and for
other good and valuable consideration, Guarantor hereby agrees as follows:
1. Guarantor hereby jointly and severally, absolutely, unconditionally,
and irrevocably guarantees to Administrative Agent and the Lenders:
(a) the full and prompt payment of the principal of and interest on
the Revolving Note and/or the Swingline Note when due, whether at stated
maturity, upon acceleration or otherwise, and at all times thereafter, and
the prompt payment of all other sums which may now be or may hereafter
become due and owing under the Revolving Note, the Swingline Note, the
Credit Agreement and/or the other Loan Documents;
(b) the payment of all Enforcement Costs (as hereinafter defined);
and
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements
of Borrower under the Credit Agreement and the Loan Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this PARAGRAPH 1 are referred to herein as the
"FACILITY INDEBTEDNESS. " All obligations described in subparagraph (c) of this
PARAGRAPH 1 are referred to herein as the "OBLIGATIONS."
2. In the event of any default by Borrower in making payment of the
Facility Indebtedness, or in performance of the Obligations, Guarantor agrees,
on demand by Administrative Agent, to pay all the Facility Indebtedness and to
perform all the Obligations as are or then or thereafter become due and owing or
are to be performed under the terms of the Revolving Note, the Swingline Note,
the Credit Agreement and/or the other Loan Documents, and to pay any reasonable
expenses incurred by Administrative Agent or the Lenders in protecting,
preserving or defending its interest in the Property or any collateral for the
Facility, or otherwise in connection with the Facility or under any of the Loan
Documents, including, without limitation, all reasonable attorneys' fees and
costs. Administrative Agent shall have the right, at its option, either before,
during or after pursuing any other right or remedy against Borrower or
Guarantor, to perform any and all of the Obligations by or through any agent,
contractor or subcontractor, or any of their agents, of its selection, all as
Administrative Agent in its sole discretion deems proper, and Guarantor shall
indemnify and hold Administrative Agent and the Lenders free and harmless from
and against any and all loss, damage, cost, expense, injury, or liability
Administrative Agent or the Lenders may suffer or incur in connection with the
exercise of its rights under this Guaranty or the performance of the
A-2
<PAGE>
Obligations, except to the extent the same arises as a result of the gross
negligence or willful misconduct of Administrative Agent.
All of the remedies set forth herein and/or provided by any of the Loan
Documents or law or equity shall be equally available to Administrative Agent
for the benefit of itself and the Lenders, and the choice by Administrative
Agent of one such alternative over another shall not be subject to question or
challenge by Guarantor or any other person, nor shall any such choice be
asserted as a defense, set-off or failure to mitigate damages in any action,
proceeding or counteraction by Administrative Agent for the benefit of itself
and/or the Lenders to recover or seeking any other remedy under this Guaranty,
nor shall such choice preclude Administrative Agent from subsequently electing
to exercise a different remedy. The parties have agreed to the alternative
remedies hereinabove specified in part because they recognize that the choice of
remedies in the event of a failure hereunder will necessarily and should
properly be a matter of business judgment, which, with hindsight after the
passage of time and events, may or may not prove to have been the best choice to
maximize recovery by Administrative Agent for the benefit of itself and the
Lenders at the lowest cost to Borrower and/or Guarantor. It is the intention of
the parties that such choice by Administrative Agent be given conclusive effect
regardless of such subsequent developments.
3. Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by Administrative Agent or the Lenders and any and all notices and demands of
every kind which may be required to be given by any statute, rule or law, (ii)
any defense, right of set-off or other claim which Guarantor may have against
the Borrower or which Guarantor or Borrower may have against Administrative
Agent or any of the Lenders or the holder of the Revolving Note or the holder of
the Swingline Note, (iii) presentment for payment, demand for payment, notice of
nonpayment, dishonor, protest and notice of protest, diligence in collection and
any and all formalities which otherwise might be legally required to charge
Guarantor with liability, (iv) any failure by Administrative Agent or any of the
Lenders to inform Guarantor of any facts Administrative Agent or any of the
Lenders may now or hereafter know about Borrower, the Facility, or the
transactions contemplated by the Credit Agreement, it being understood and
agreed that Administrative Agent and the Lenders have no duty so to inform and
that Guarantor is fully responsible for being and remaining informed by Borrower
of all circumstances bearing on the existence or creation or risk of nonpayment
of the Facility Indebtedness or the risk of nonperformance of the Obligations,
and (v) any and all right to cause a marshaling of assets of the Borrower or any
other action by any court or governmental body with respect thereto, or to cause
Administrative Agent or any of the Lenders to proceed against any other security
given to Administrative Agent or any of the Lenders in connection with the
Facility Indebtedness or the Obligations. Credit may be granted or continued
from time to time by Lenders to Borrower without notice to or authorization from
Guarantor, regardless of the financial or other condition of Borrower at the
time of any such grant or continuation. Guarantor acknowledges that no
representations of any kind whatsoever have been made by Administrative Agent or
any of the Lenders to Guarantor. No modification or waiver of any of the
provisions of this Guaranty shall be binding upon Administrative Agent or the
Lenders except as expressly set forth in a writing duly signed and delivered on
behalf of Administrative Agent and the Lenders.
A-3
<PAGE>
4. Guarantor further agrees that Guarantor's liability as guarantor shall
in nowise be impaired by any renewals or extensions which may be made from time
to time, with or without the knowledge or consent of Guarantor of the time for
payment of interest or principal under the Revolving Note or the Swingline Note
or by any forbearance or delay in collecting interest or principal under the
Revolving Note or the Swingline Note, or by any waiver under the Credit
Agreement or any other Loan Documents, or by failure or election not to pursue
any other remedies against Borrower, or by any change or modification in the
Revolving Note, the Swingline Note, the Credit Agreement or any other Loan
Documents, or by the acceptance of any additional security or any increase,
substitution or change therein, or by the release of any security or any
withdrawal thereof or decrease therein, or by the application of payments
received from any source to the payment of any obligation other than the
Facility Indebtedness, even though Administrative Agent or the Lenders might
lawfully have elected to apply such payments to any part or all of the Facility
Indebtedness, it being the intent hereof that Guarantor shall remain liable as
principal for payment of the Facility Indebtedness and performance of the
Obligations until all indebtedness has been paid in full and the other terms,
covenants and conditions of the Credit Agreement and other Loan Documents and
this Guaranty have been performed, notwithstanding any act or thing which might
otherwise operate as a legal or equitable discharge of a surety. Guarantor
further understands and agrees that Administrative Agent and the Lenders may at
any time enter into agreements with Borrower to amend and modify the Revolving
Note, the Swingline Note, Credit Agreement or other Loan Documents, and may
waive or release any provision or provisions thereof, and, with reference to
such instruments, may make and enter into any such agreement or agreements as
Administrative Agent, the Lenders and Borrower may deem proper and desirable,
without in any manner impairing this Guaranty or any of Administrative Agent's
or the Lenders' rights hereunder or any of the Guarantor's obligations
hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance, and not of collection only. Guarantor
agrees that this Guaranty may be enforced by Administrative Agent and the
Lenders without the necessity at any time of resorting to or exhausting any
other security or collateral given in connection herewith or with the Facility
or any of the Loan Documents, or resorting to any other guaranties, and
Guarantor hereby waives the right to require Administrative Agent or the Lenders
to join Borrower in any action brought hereunder or to commence any action
against or obtain any judgment against Borrower or to pursue any other remedy or
enforce any other right. Guarantor further agrees that nothing contained herein
or otherwise shall prevent Administrative Agent and the Lenders from pursuing
concurrently or successively all rights and remedies available to it at law
and/or in equity or under any of the Loan Documents, and the exercise of any of
its rights or the completion of any of its remedies shall not constitute a
discharge of any of Guarantor's obligations hereunder, it being the purpose and
intent of Guarantor that the obligations of Guarantor hereunder shall be
primary, absolute, independent and unconditional under any and all circumstances
whatsoever. Neither Guarantor's obligations under this Guaranty nor any remedy
for the enforcement thereof shall be impaired, modified, changed or released in
any manner whatsoever by any impairment, modification, change, release or
limitation of the liability of Borrower under the Revolving Note, the Swingline
Note, the Credit Agreement or
A-4
<PAGE>
any other Loan Documents or by reason of Borrower's bankruptcy or by reason
of any creditor or bankruptcy proceeding instituted by or against Borrower.
This Guaranty shall continue to be effective and be deemed to have continued
in existence or be reinstated (as the case may be) if at any time payment of
all or any part of any sum payable pursuant to the Revolving Note, the
Swingline Note, the Credit Agreement or any other Loan Document is rescinded
or otherwise required to be returned by the payee upon the insolvency,
bankruptcy, or reorganization of the payer, all as though such payment had
not been made, regardless of whether Administrative Agent or any of the
Lenders contested the order requiring the return of such payment. The
obligations of Guarantor pursuant to the preceding sentence shall survive any
termination, cancellation or release of this Guaranty.
6. This Guaranty shall be assignable by Agents and/or any of the Lenders
to any assignee of all or a portion of Agents and/or such Lender's rights under
the Loan Documents.
7. If: (i) this Guaranty, the Revolving Note, the Swingline Note, the
Credit Agreement or any other Loan Document is placed in the hands of an
attorney for collection or is collected through any legal proceeding; (ii) an
attorney is retained to represent Administrative Agent and/or any of the Lenders
in any bankruptcy, reorganization, receivership, or other proceedings affecting
creditors' rights and involving a claim under this Guaranty, the Revolving Note,
the Swingline Note, the Credit Agreement or any Loan Document; (iii) an attorney
is retained to provide advice or other representation with respect to the Loan
Documents in connection with an enforcement action or potential enforcement
action; or (iv) an attorney is retained to represent Administrative Agent and/or
any of the Lenders in any other legal proceedings whatsoever in connection with
this Guaranty, the Revolving Note, the Swingline Note, the Credit Agreement, any
of the other Loan Documents or any property subject thereto, then Guarantor
shall pay upon demand all reasonable attorney's fees, costs and expenses for the
Administrative Agent, Documentation Agent and each of the other Lenders,
including, without limitation, court costs, filing fees, recording costs and all
other costs and expenses whatsoever incurred in connection therewith (all of
which are referred to herein as "ENFORCEMENT COSTS"), in addition to all other
amounts due hereunder; provided, however, that the expenses of counsel for which
Borrower is obligated under this subsection (b) shall be limited to the
reasonable non-duplicative expenses of (A) a single outside law firm
representing Administrative Agent, (B) a single outside law firm representing
Documentation Agent (which may or may not be the same law firm representing
Administrative Agent) and (C) a single outside law firm representing all of the
other Lenders as a group (which may or may not be the same law firm representing
Administrative Agent or Documentation Agent).
8. The parties hereto intend that each provision in this Guaranty
comports with all applicable local, state and federal laws and judicial
decisions. However, if any provision or provisions, or if any portion of any
provision or provisions, in this Guaranty is found by a court of competent
jurisdiction to be in violation of any applicable local, state or federal
ordinance, statute, law, administrative or judicial decision, or public policy,
and if such court should declare such portion, provision or provisions of this
Guaranty to be illegal, invalid, unlawful, void or unenforceable as written,
then it is the intent of all parties hereto that such portion, provision or
provisions shall be given force to the fullest possible extent that they are
A-5
<PAGE>
legal, valid and enforceable, that the remainder of this Guaranty shall be
construed as if such illegal, invalid, unlawful, void or unenforceable portion,
provision or provisions were not contained therein, and that the rights,
obligations and interest of Administrative Agent, the Lenders and the holder(s)
of the Revolving Note or the Swingline Note under the remainder of this Guaranty
shall continue in full force and effect.
9. Any indebtedness of Borrower to Guarantor now or hereafter existing is
hereby subordinated to the Facility Indebtedness. Guarantor agrees that until
the entire Facility Indebtedness has been paid in full, (i) Guarantor will not
seek, accept or retain for Guarantor's own account, any payment from Borrower on
account of such subordinated debt, and (ii) any such payments to Guarantor on
account of such subordinated debt shall be collected and received by Guarantor
in trust for Administrative Agent and the Lenders and shall be paid over to
Administrative Agent on account of the Facility Indebtedness without impairing
or releasing the obligations of Guarantor hereunder.
10. Guarantor waives and releases any claim (within the meaning of 11
U.S.C. Section 101) which Guarantor may have against Borrower arising from a
payment made by Guarantor under this Guaranty and agrees not to assert or take
advantage of any subrogation rights of Guarantor, Administrative Agent or the
Lenders or any right of Guarantor, Administrative Agent or the Lenders to
proceed against (i) Borrower for reimbursement, or (ii) any other guarantor or
any collateral security or guaranty or right of offset held by Administrative
Agent or the Lenders for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall Guarantor seek or be entitled to seek
any contribution or reimbursement from Borrower or any other guarantor in
respect of payments made by Guarantor hereunder. It is expressly understood that
the waivers and agreements of Guarantor set forth above constitute additional
and cumulative benefits given to Administrative Agent and the Lenders for their
security and as an inducement for their continuing extension of credit to
Borrower.
11. Any amounts received by Administrative Agent or Lender from any source
on account of any indebtedness may be applied by Administrative Agent toward the
payment of such indebtedness, and in such order of application, as
Administrative Agent may from time to time elect.
12. This Guaranty shall be governed by the internal laws of the State of
Illinois, without regard to its choice of law rules or conflict of laws
principles. The Guarantor hereby submits to personal jurisdiction in the State
of Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to enforce
this Guaranty. Guarantor hereby consents to the jurisdiction of either the
Circuit Court of Cook County, Illinois, or the United States District Count for
the Northern District of Illinois, in any action, suit, or proceeding which
Administrative Agent or the Lenders may at any time wish to file in connection
with this Guaranty or any related matter. Guarantor hereby agrees that an
action, suit, or proceeding to enforce this Guaranty may be brought in any state
or federal court in the State of Illinois and hereby waives any objection which
Guarantor may have to the laying of the venue of any such action, suit, or
proceeding in any such court;
A-6
<PAGE>
provided, however, that the provisions of this Paragraph shall not be deemed
to preclude Administrative Agent or the Lenders from filing any such action,
suit, or proceeding in any other appropriate forum.
13. All notices and other communications provided to any party hereto
under this Agreement or any other Loan Document shall be in writing or by
facsimile and addressed or delivered to such party at its address set forth
below or at such other address as may be designated by such party in a notice to
the other parties. Any notice, if mailed and properly addressed with postage
prepaid, shall be deemed given when received; any notice, if transmitted by
facsimile, shall be deemed given when transmitted. Notice may be given as
follows:
To the Guarantor:
--------------------------------
c/o Great Lakes REIT, Inc.
823 Commerce Drive, Ste. 300
Oak Brook, Illinois 60523
Attention: Jim Hicks
Telecopy: (630) 368-2929
With a copy to:
Ungaretti & Harris
3500 Three First National Plaza
Chicago, Illinois 60602
Attention: Richard Ungaretti, Esq.
Telecopy: (312) 977-4405
To the Administrative Agent or the Lenders:
Bank of America National Trust and Savings Association
231 S. LaSalle Street, 12th Floor
Chicago, Illinois 60697
Attention: Dan Walsh
Telecopy: (312) 974-4970
With a copy to:
Barack Ferrazzano Kirschbaum Perlman & Nagelberg
333 W. Wacker Drive, Suite 2700
Chicago, Illinois 60606
Attention: Howard J. Kirschbaum, Esq.
Telecopy: (312) 984-3150
A-7
<PAGE>
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a place
for the service of notice.
14. Guarantors and Lender agree that such Guarantor's obligations
hereunder shall not exceed the greater of: (i) the aggregate amount of all
monies received, directly or indirectly, by such Guarantor from Borrower after
the date hereof (whether by loan, capital infusion or other means), or (ii) the
maximum amount not subject to avoidance under Title 11 of the United State Code,
as same may be amended from time to time, or any applicable state law (the
"Bankruptcy Code"). To that end, to the extent such obligations would otherwise
be subject to avoidance under the Bankruptcy Code if such Guarantor is not
deemed to have received valuable consideration, fair value or reasonably
equivalent value for its obligations hereunder, any such Guarantor's obligations
hereunder shall be reduced to that amount which, after giving effect thereto,
would not render such Guarantor insolvent, or leave such Guarantor with an
unreasonably small capital to conduct its business, or cause the Guarantor to
have incurred debts (or intended to have incurred debts) beyond its ability to
pay such debts as they mature, as such terms are determined, and at the time
such obligations are deemed to have been incurred, under the Bankruptcy Code.
In the event any Guarantor shall make any payment or payments under this
Guaranty, each other Guarantor shall contribute to such paying Guarantor an
amount equal to such non-paying Guarantor's pro rata share (based on their
respective maximum liabilities hereunder) of such payment or payments made by
such paying Guarantor, provided that such contribution right shall be
subordinate and junior in right of payment to all the Facility Indebtedness and
performance of all of the Obligations to Lender.
15. All obligations under this Guaranty are joint and several to the
Guarantor and any other party which now or hereafter guaranties the payment of
any portion of the Facility Indebtedness or the performance of the Obligations.
This Guaranty shall be binding upon the heirs, executors, legal and personal
representatives, successors and assigns of Guarantor and shall inure to the
benefit of Administrative Agent's, Documentation Agent's and Lender's successors
and assigns.
16. This Guaranty shall be construed and enforced under the internal laws
of the State of Illinois.
17. EACH GUARANTOR HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE
ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LITIGATION ARISING IN ANY
WAY IN CONNECTION WITH THIS GUARANTY, OR ANY OF THE OTHER LOAN DOCUMENTS, THE
LOAN, OR ANY OTHER STATEMENTS OR ACTIONS OF ANY PARTY HERETO. EACH GUARANTOR
ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING OF THIS GUARANTY AND IN
THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL SELECTED OF ITS OWN FREE
WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH LEGAL COUNSEL. GUARANTOR
FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND UNDERSTANDS THE MEANING AND
RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS BEEN REVIEWED BY GUARANTOR
AND GUARANTOR'S COUNSEL
A-8
<PAGE>
AND IS A MATERIAL INDUCEMENT FOR ADMINISTRATIVE AGENT AND LENDERS TO MAKE THE
LOAN, ENTER INTO THE CREDIT AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS,
AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER LOAN
DOCUMENTS AS IF FULLY INCORPORATED THEREIN.
IN WITNESS WHEREOF, Guarantor has delivered this Guaranty as of the date
first written above.
---------------------------------------
By:
------------------------------------
Its:
---------------------------------
A-9
<PAGE>
STATE OF ________________)
) SS.
COUNTY OF _______________)
I, the undersigned, a Notary Public, in and for said County, in the State
aforesaid, DO HEREBY CERTIFY, that _________________, the ____________________
of ____________________________________, personally known to me to be the
same person whose name is subscribed to the foregoing instrument, appeared
before me this day in person and acknowledged that he signed and delivered the
said instrument as his own free and voluntary act and as the free and voluntary
act of said corporation, for the uses and purposes therein set forth.
GIVEN under my hand and Notarial Seal, this ______ day of _____________, 199__.
--------------------------------------
Notary Public
A-10
<PAGE>
EXHIBIT B-1
FORM OF REVOLVING NOTE
PROMISSORY NOTE
$__________________ ________________, 1998
On or before the Maturity Date, as defined in that certain Unsecured
Revolving Credit Agreement dated as of_______________, 1998 (the "AGREEMENT")
between Great Lakes REIT, L.P., a Delaware limited partnership corporation
("BORROWER"), Bank of America National Trust and Savings Association,
individually and as Administrative Agent for the Lenders (as such terms are
defined in the Agreement), The First National Bank of Chicago, individually and
as Documentation Agent ("First Chicago") and the other Lenders, Borrower
promises to pay to the order of _____________________ (the "LENDER"), or its
successors and assigns, the principal sum of _______________________ AND
NO/100 DOLLARS ($_______________) or the aggregate unpaid principal amount of
all Loans (other than Swingline Loans) made by the Lender to Borrower pursuant
to SECTION 2.1 of the Agreement, in immediately available funds to the account,
or at the office of, Administrative Agent specified in SECTION 2.12 of the
Agreement, together with interest on the unpaid principal amount hereof at the
rates and on the dates set forth in the Agreement. The Borrower shall pay this
Promissory Note ("NOTE") in full on or before the Maturity Date in accordance
with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is issued pursuant to, and is entitled to the security under and
benefits of, the Agreement and the other Loan Documents, to which Agreement and
Loan Documents, as they may be amended from time to time, reference is hereby
made for, INTER ALIA, a statement of the terms and conditions under which this
Note may be prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.
If there is an Event of Default or Default under the Agreement or any other
Loan Document and Lender exercises its remedies provided under the Agreement
and/or any of the Loan Documents, then in addition to all amounts recoverable by
the Lender under such documents, Lender shall be entitled to receive reasonable
attorneys fees and expenses incurred by Lender in exercising such remedies.
Borrower and all endorsers severally waive presentment, protest and demand,
notice of protest, demand and of dishonor and nonpayment of this Note (except as
otherwise expressly provided for in the Agreement), and any and all lack of
diligence or delays in collection or
B1-1
<PAGE>
enforcement of this Note, and expressly agree that this Note, or any payment
hereunder, may be extended from time to time, and expressly consent to the
release of any party liable for the obligation secured by this Note, the
release of any of the security of this Note, the acceptance of any other
security therefor, or any other indulgence or forbearance whatsoever, all
without notice to any party and without affecting the liability of the
Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE, OR
ANY OF THE OTHER LOAN DOCUMENTS, THE LOAN, OR ANY OTHER STATEMENTS OR ACTIONS
OF ANY PARTY HERETO. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN
THE SIGNING OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT
LEGAL COUNSEL SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS
WAIVER WITH SUCH LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT
HAS READ AND UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii)
THIS WAIVER HAS BEEN REVIEWED BY BORROWER AND BORROWER'S COUNSEL AND IS A
MATERIAL INDUCEMENT FOR LENDER TO MAKE THE LOAN, ENTER INTO THE AGREEMENT AND
EACH OF THE OTHER LOAN DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS
TO EACH OF SUCH OTHER LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.
GREAT LAKES REIT, L.P.
By: Great Lakes REIT, Inc., its
general partner
By:
---------------------------
Its:
--------------------------
B1-2
<PAGE>
LOANS AND PAYMENTS
<TABLE>
<CAPTION>
Unpaid
Principal Principal Notation
Date Loan Payments Balance Made By
<S> <C> <C> <C> <C>
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
</TABLE>
B1-3
<PAGE>
EXHIBIT B-2
FORM OF SWINGLINE NOTE
$10,000,000 , 1998
------------
On or before the due date of each "Swingline Loan", as defined in that
certain Unsecured Revolving Credit Agreement dated as of ____________, 1998
(the "AGREEMENT") between Great Lakes REIT, L.P., a Delaware limited
partnership ("BORROWER"), Bank of America National Trust and Savings
Association, individually ("BOFA") and as Administrative Agent for the
Lenders (as such terms are defined in the Agreement), The First Chicago
National Bank of Chicago, individually and as Documentation Agent ("First
Chicago"), and the other Lenders, Borrower promises to pay to the order of
BOFA (the "LENDER"), or its successors and assigns, the unpaid principal
amount of such Swingline Loan made by the Lender to the Borrower pursuant to
SECTION 2.16 of the Agreement, in immediately available funds to the account,
or at the office of, Agent specified in SECTION 2.12 of the Agreement,
together with interest on the unpaid principal amount hereof at the rates and
on the dates set forth in the Agreement. The Borrower shall pay any remaining
unpaid principal amount of such Swingline Loans under this Swingline Note
("Note") in full on or before the Maturity Date in accordance with the terms
of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date, amount and due date of each Swingline Loan and the date and amount of
each purchase of a Swingline Loan by the Lenders or principal payment hereunder.
This Note is issued pursuant to, and is entitled to the security under and
benefits of, the Agreement and the other Loan Documents, to which Agreement and
Loan Documents, as they may be amended from time to time, reference is hereby
made for, INTER ALIA, a statement of the terms and conditions under which this
Note may be prepaid or its maturity date accelerated. Capitalized terms used
herein and not otherwise defined herein are used with the meanings attributed to
them in the Agreement.
If there is an Event of Default or Default under the Agreement or any other
Loan Document and Lender exercises its remedies provided under the Agreement
and/or any of the Loan Documents, then in addition to all amounts recoverable by
the Lender under such documents, Lender shall be entitled to receive reasonable
attorneys fees and expenses incurred by Lender in exercising such remedies.
Borrower and all endorsers severally waive presentment, protest and demand,
notice of protest, demand and of dishonor and nonpayment of this Note (except as
otherwise expressly provided for in the Agreement), and any and all lack of
diligence or delays in collection or enforcement of this Note, and expressly
agree that this Note, or any payment hereunder, may
B2-1
<PAGE>
be extended from time to time, and expressly consent to the release of any
party liable for the obligation secured by this Note, the release of any of
the security of this Note, the acceptance of any other security therefor, or
any other indulgence or forbearance whatsoever, all without notice to any
party and without affecting the liability of the Borrower and any endorsers
hereof.
This Note shall be governed and construed under the internal laws of the
State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY KNOWINGLY,
VOLUNTARILY AND INTENTIONALLY WAIVE ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY
JURY IN ANY LITIGATION ARISING IN ANY WAY IN CONNECTION WITH THIS NOTE, OR ANY
OF THE OTHER LOAN DOCUMENTS, THE LOAN, OR ANY OTHER STATEMENTS OR ACTIONS OF ANY
PARTY HERETO. BORROWER ACKNOWLEDGES THAT IT HAS BEEN REPRESENTED IN THE SIGNING
OF THIS NOTE AND IN THE MAKING OF THIS WAIVER BY INDEPENDENT LEGAL COUNSEL
SELECTED OF ITS OWN FREE WILL, AND THAT IT HAS DISCUSSED THIS WAIVER WITH SUCH
LEGAL COUNSEL. BORROWER FURTHER ACKNOWLEDGES THAT (i) IT HAS READ AND
UNDERSTANDS THE MEANING AND RAMIFICATIONS OF THIS WAIVER, (ii) THIS WAIVER HAS
BEEN REVIEWED BY BORROWER AND BORROWER'S COUNSEL AND IS A MATERIAL INDUCEMENT
FOR LENDER TO MAKE THE LOAN, ENTER INTO THE AGREEMENT AND EACH OF THE OTHER LOAN
DOCUMENTS, AND (iii) THIS WAIVER SHALL BE EFFECTIVE AS TO EACH OF SUCH OTHER
LOAN DOCUMENTS AS IF FULLY INCORPORATED THEREIN.
GREAT LAKES REIT, L.P.
By: Great Lakes REIT, Inc., it general partner
By:
--------------------------------------
Its:
-------------------------------------
B2-2
<PAGE>
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Purchase Unpaid
or Principal Principal Notation
Date Loan Payment Balance Made By
<S> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
- -----------------------------------------------------------------------------------------
</TABLE>
B2-3
<PAGE>
EXHIBIT C
OPINION OF BORROWER'S COUNSEL
(Attached Hereto)
C-1
<PAGE>
EXHIBIT D
OPINION OF GUARANTORS' COUNSEL
See EXHIBIT C attached hereto.
D-1
<PAGE>
EXHIBIT E
WIRING INSTRUCTIONS
To: Bank of America National Trust and Saving Association,
as Administrative Agent (the "Administrative Agent") under the Credit
Agreement described below
Re: Unsecured Revolving Credit Agreement, dated as of___________, 1998 (as
amended, modified, renewed or extended from time to time, the
"Agreement"), among Great Lakes REIT, L.P. (the "Borrower"),
Administrative Agent, the Documentation Agent and the Lenders named
therein. Terms used herein and not otherwise defined shall have the
meanings assigned thereto in the Agreement.
The Administrative Agent is specifically authorized and directed to act upon
the following standing money transfer instructions with respect to the proceeds
of Advances or other extensions of credit from time to time until receipt by the
Administrative Agent of a specific written revocation of such instructions by
the Borrower, provided, however, that the Administrative Agent may also transfer
funds as hereafter directed in writing by the Borrower in accordance with
SECTION 15.1 of the Agreement.
Facility Identification Number(s)
----------------------------------------------
Customer/Account Name
----------------------------------------------------------
Transfer Funds To
--------------------------------------------------------------
--------------------------------------
For Account No.
----------------------------------------------------------------
Reference/Attention To
---------------------------------------------------------
Authorized Officer (Customer Representative) Date
--------------------------
- ------------------------------------------ ------------------------------
(Please Print) Signature
Bank Officer Name Date
--------------------------
- ------------------------------------------ ------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
E-1
<PAGE>
EXHIBIT F
FORM OF COMPLIANCE CERTIFICATE
To: The Administrative Agent and the Lenders
who are parties to the Agreement described below
This Compliance Certificate is furnished pursuant to that certain Unsecured
Revolving Credit Agreement, dated as of______________, 1998 (as amended,
modified, renewed or extended from time to time, the "Agreement") among Great
Lakes REIT, L.P. ("Borrower"), Bank of America National Trust and Savings
Association, individually and as Administrative Agent, the Documentation Agent
and the Lenders named therein. Unless otherwise defined herein, capitalized
terms used in this Compliance Certificate have the respective meanings ascribed
thereto in the Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected Chief Financial Officer of General Partner.
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Consolidated Operating Partnership and Investment
Affiliates during the accounting period covered by the financial statements
attached (or most recently delivered to the Administrative Agent if none are
attached).
3. The examinations described in Paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes a
Material Adverse Financial Change, Event of Default or Default during or at the
end of the accounting period covered by the attached financial statements or as
of the date of this Compliance Certificate, except as set forth below.
4. Schedule I (if attached) attached hereto sets forth financial data and
computations and other information evidencing Borrower's compliance with the
covenants contained in Article VII of the Agreement and with certain other
covenants of the Agreement, all of which data, computations and information (or
if no Schedule I is attached, the data, computations and information contained
in the most recent Schedule I attached to a prior Compliance Certificate) are
true, complete and correct in all material respects.
5. The financial statements, updates, reports and other materials
referred to in SECTION 8.2(i), 8.2(ii), 8.2(iv), or 8.2(viii), as the case may
be, of the Agreement which are delivered concurrently with the delivery of this
Compliance Certificate, if any, and those most recently delivered pursuant to
SECTION 8.2(v) and SECTION 8.14 of the Agreement, if any, fairly and accurately
present in all material respects, in the case of financial statements, the
consolidated financial condition and operations of the Consolidated Operating
Partnership at such date and the consolidated results of their operations for
the period then-ended, in
F-1
<PAGE>
accordance with GAAP applied consistently throughout such period and with
prior periods and, in the case of deliveries other than financial statements,
the matters set forth therein as of the dates and for the periods covered
thereby; provided, however, that any projections included therein constitute
good faith estimates of reasonably anticipated future matters which cannot be
predicted with certainty.
6. Attached hereto is a statement listing (i) the Properties and stating
the location thereof, the date acquired and the acquisition cost, (ii) the
Indebtedness of the General Partner, the Borrower and its Subsidiaries, 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) the Properties of any entity in the
Consolidated Operating Partnership which are under "development" and providing a
brief summary of the status of such development.
Described below are the exceptions, if any, to Paragraph 3 by listing, in
detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
The foregoing certifications, together with the computations and
information set forth in Schedule I hereto and the financial statements,
updates, reports and other materials delivered with or covered by this
Compliance Certificate are made and delivered this _____ day of ____________,
19__.
--------------------------------------------
____________, a Qualified Officer of General Partner
F-2
<PAGE>
EXHIBIT G
SCOPE OF WORK FOR ENVIRONMENTAL INVESTIGATIONS
ENVIRONMENTAL SITE ASSESSMENTS
BANK OF AMERICA ("BofA") REPORTING STANDARDS
The following are BofA Guidelines for the qualification of firms and for
information to be included in Environmental Site Assessments. These standards
include the minimum elements common to acceptable site assessments. Generally,
it is intended for the standards to be consistent with those outlined in the
American Society for Testing and Materials (ASTM) Designation: E 1527-93. This
listing is not intended to be a "how to" manual, as we rely on the environmental
professionals to expand the scope of their services and the information included
in the reports as required.
QUALIFICATIONS OF INVESTIGATING FIRM
The environmental consulting firm ("Firm") must have 5 years of experience
in hazardous substances investigation. Many of these firms began as
geotechnical consultants, but expertise only in soils analysis does not
qualify them for hazardous substance analysis. The person supervising and
signing the report should be an experienced project manager for all matters
covered in the report (the "Consultant"). He should be a registered
professional engineer or have advanced degrees or professional experience
in related environmental disciplines. The Firm performing the work should
be of a professional nature WITH KNOWLEDGE OF LOCAL CONDITIONS.
DEPTH OF REPORTING REQUIRED
Phase I - Consists of site description, review of historical and regulatory
data and a physical inspection. If no potential contamination is
indicated, the report should so state, and a specific statement should be
made that no further investigation is required (see content requirements
below).
Phase II - If a Phase I examination indicates the possibility of
contamination, the consultant should describe his suspicions, the areas to
be tested, sampling procedures to be used and methods used to assess the
sample. He should then specify and carry out a testing program for further
evaluation.
Phase III - If Phase II reveals any contamination at the site that
constitutes a violation of any applicable Environmental Laws, the
consultant will design and implement a remediation program to remediate or
remove the identified hazardous materials in accordance with all
Environmental Laws. The report should include an estimated cost for such
program.
G-1
<PAGE>
BofA will initially require a Phase I site assessment report including the
following:
SITE DESCRIPTION
The site description section should include a detailed description of the
site, existing buildings and current site use. It should also include a
general description of the uses and conditions of adjacent properties which
might result in migrating contamination. It should include a summary of
the visual observations including, but not limited to, vegetation stress,
debris, fill materials, ponding, evidence of underground storage tanks,
evidence of previous dumping or storage, discolored or stained soils,
wetlands, groundwater flows, and a description of regional geology and
hydrology. On vacant sites, the investigator should compare his
observations to a USGS topographic map, noting any changes in elevations or
depressions which have been covered over, possibly indicating past dumping
or burial of wastes.
On sites with existing improvements, the investigator should interview
personnel at the site regarding hazardous materials currently or previously
used at the site, underground storage tanks, pipeline right of ways and any
other areas of concern. Buildings should be checked for asbestos
containing materials, PCB equipment, etc.
HISTORICAL USES OF SITE, ADJACENT PROPERTIES, AND SIGNIFICANT NEARBY PROPERTIES
The historical analysis should provide a chronology of past and present
significant uses of the subject site and adjacent sites, and highlight
activities which might have contributed unacceptable levels of
contaminants. It should contain an explanation of the methods of
historical search which were pursued, the information expected to be
obtained and the information actually obtained from each search. In
general, the historical review should cover 30-40 years of history
depending on the availability of information. Its purpose is to
investigate the possibility of prior hazardous substances releases at the
property, identify potential contingent liability from historic off-site
disposal of hazardous substances, or identify sources of contamination
which have or might in the future migrate to the site.
The historical analysis should include but not be limited to:
- Review of aerial photographs to identify past land uses and
development trends, and identify possible locations of ponds,
landfills, tanks, areas of soil discoloration or drum storage.
- Review of county tax records or title search to identify past uses of
potential concern such as gas stations or industrial uses.
G-2
<PAGE>
- Conversations with local environmental and health officials,
investigation of local, state and federal regulatory agencies files
including the EPA and Corps of Engineers, and a check of EPA lists of
known contaminated sites, to check for recorded hazardous substances
handling, or potential permitting requirements of air emissions,
wastewater, RCRA or TSD permits.
Other information which may be attached to the report include, but should
not be limited to:
- A discussion of all existing and proposed environmental standards and
legislation applicable to the site [and adjacent properties if any
potential hazardous sources are identified on adjacent or nearby
properties]
- Site Plan
- Ground level photos of the site with specific attention to any
characteristics noted in the report
- Area diagram showing the location of any environmental concerns
mentioned in the report and showing the site and adjacent properties
if any potential hazardous sources are identified on adjacent or
nearby properties
- Copies of representative aerial photos
- Copies of correspondence with regulatory agencies
- Documents acquired during title search
- Chain of custody records
- Location map of site and immediate surroundings
- Listing of publicly available information regarding adjacent property
owners and use of the properties
- Any other material available which describes or verifies information
given or conclusions drawn in the report
CONCLUSIONS AND RECOMMENDATIONS
The Consultant will prepare or cause to be prepared a complete written
report which fully defines the scope of his responsibilities and
objectives. It should describe the sources used, the activities performed,
the dates when activities were performed, the results of research and
recommendations. Specific recommendations for remedial action, additional
tests or investigations for each recognized area of concern or condition
and approximate costs of further investigation or remediation shall be
provided within the report.
G-3
<PAGE>
The conclusion section must clearly state that the Firm has exercised
professional judgment in reaching one of the following:
The Consultant, after performing the appropriate level of
investigation, has revealed no evidence of recognized environmental
conditions in connection with the subject property and no further
testing or investigation is warranted.
or
The Consultant, after performing the appropriate level of
investigation, has revealed no evidence of recognized environmental
conditions in connection with the subject property except for the
following:
If the Consultant was restricted by factors such as time limitations or
scope-of-service limitations agreed to with the borrower, the report should
so state.
The report is to be signed by an authorized professional engineer,
environmental manager or supervisor or any other authorized individual
having advanced degrees or professional experience in related environmental
disciplines who has provided significant professional assistance in
completing the assignment. The qualifications of the individuals signing
the report should be included.
G-4
<PAGE>
EXHIBIT H
FORM OF ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
________________ (the "Assignor") and ________________, (the "Assignee") is
dated as of __________________. The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Unsecured
Revolving Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("SCHEDULE 1"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns
to the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement such that after giving effect to such assignment the
Assignee shall have purchased pursuant to this Assignment Agreement the
percentage interest specified in Item 3 of Schedule 1 of all outstanding
rights and obligations under the Credit Agreement and the other Loan
Documents. The aggregate Commitment (or Loans, if the applicable Commitment
has been terminated) purchased by the Assignee hereunder is set forth in Item
4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement
(the "Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two (2) Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form
of SCHEDULE 2 attached hereto has been delivered to the Administrative Agent.
In no event will the Effective Date occur if the payments required to be
made by the Assignee to the Assignor on the Effective Date under SECTIONS 4
AND 5 hereof are not made on the proposed Effective Date, unless otherwise
agreed to in writing by Assignor and Assignee. The Assignor will notify the
Assignee of the proposed Effective Date no later than the Business Day prior
to the proposed Effective Date. As of the Effective Date, (i) the Assignee
shall have the rights and obligations of a Lender under the Loan Documents
with respect to the rights and obligations assigned to the Assignee hereunder
and (ii) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees with respect to the interest assigned hereby. The
Assignee shall advance funds directly to the Administrative Agent with respect
to all Loans and reimbursement payments made on or after the Effective Date with
respect to the interest assigned hereby. [In consideration for the sale and
assignment of Loans hereunder, (i) the Assignee shall pay the Assignor, on the
Effective Date, an amount equal to the principal amount of the portion of all
H-1
<PAGE>
Base Rate Loans assigned to the Assignee hereunder and (ii) with respect to each
LIBOR Loan made by the Assignor and assigned to the Assignee hereunder which is
outstanding on the Effective Date, (a) on the last day of the Interest Period
therefor or (b) on such earlier date agreed to by the Assignor and the Assignee
or (c) on the date on which any such Loan either becomes due (by acceleration or
otherwise) or is prepaid (the date as described in the foregoing clauses (a),
(b) or (c) being hereinafter referred to as the "Fixed Due Date"), the Assignee
shall pay the Assignor an amount equal to the principal amount of the portion of
such Loan assigned to the Assignee which is outstanding on the Fixed Due Date.
If the Assignor and the Assignee agree that the applicable Fixed Due Date for
such Loan shall be the Effective Date, they shall agree, solely for purposes of
dividing interest paid by the Borrower on such Loan, to an alternate interest
rate applicable to the portion of such Loan assigned hereunder for the period
from the Effective Date to the end of the related Interest Period (the "Agreed
Interest Rate") and any interest received by the Assignee in excess of the
Agreed Interest Rate, with respect to such Loan for such period, shall be
remitted to the Assignor. In the event a prepayment of any Loan which is
existing on the Effective Date and assigned by the Assignor to the Assignee
hereunder occurs after the Effective Date but before the applicable Fixed Due
Date, the Assignee shall remit to the Assignor any excess of the funding
indemnification amount paid by the Borrower under SECTION 4.4 of the Credit
Agreement an account of such prepayment with respect to the portion of such Loan
assigned to the Assignee hereunder over the amount which would have been paid if
such prepayment amount were calculated based on the Agreed Interest Rate and
only covered the portion of the Interest Period after the Effective Date. The
Assignee will promptly remit to the Assignor (i) the portion of any principal
payments assigned hereunder and received from the Administrative Agent with
respect to any such Loan prior to its Fixed Due Date and (ii) any amounts of
interest on Loans and fees received from the Administrative Agent which relate
to the portion of the Loans assigned to the Assignee hereunder for periods prior
to the Effective Date, in the case of Base Rate Loans or fees, or the Fixed Due
Date, in the case of LIBOR Loans, and not previously paid by the Assignee to the
Assignor.]* In the event that either party hereto receives any payment to which
the other party hereto is entitled under this Assignment Agreement, then the
party receiving such amount shall promptly remit it to the other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the
Assignor a fee on each day on which a payment of interest or fees is made
under the Credit Agreement with respect to the amounts assigned to the
Assignee hereunder (other than a payment of interest or fees attributable to
the period prior to the Effective Date in the case of Base Rate Loans or, in
the case of LIBOR Loans, prior to the Fixed Due Date, which the Assignee is
obligated to deliver to the Assignor pursuant to SECTION 4 hereof). The
amount of such fee shall be the difference between (i) the interest or fee,
as applicable, paid with respect to the amounts assigned to the Assignee
hereunder and (ii) the interest or fee, as applicable, which would have been
paid with respect to the amounts assigned to the Assignee hereunder if each
interest rate was calculated at the rate of _% rather than the actual
percentage used to calculate the interest rate paid by the Borrower or if the
fee was calculated at the rate of __% rather than the actual percentage used
to calculate the fee paid by the Borrower, as applicable. In addition, the
Assignee agrees to pay ____ % of the fee required to be paid to the
Administrative Agent in
H-2
<PAGE>
connection with this Assignment Agreement. [This sentence can be revised
appropriately based on how the fee is being paid.]
6. *Each Assignor may insert its standard provisions in lieu of the
payment terms included in SECTIONS 4 and 5 of this Exhibit.
7. REPRESENTATIONS OF THE ASSIGNOR: LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor. It
is understood and agreed that the assignment and assumption hereunder are
made without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor
nor any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of
the Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of
the terms or provisions of any of the Loan Documents, (v) inspecting any of
the Property, books or records of the Borrower, its Subsidiaries or
Investment Affiliates, (vi) the validity, enforceability, perfection,
priority, condition, value or sufficiency of any collateral securing or
purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
8. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that
it has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements requested by the Assignee
and such other documents and information as it has deemed appropriate to make
its own credit analysis and decision to enter into this Assignment Agreement,
(ii) agrees that it will, independently and without reliance upon the
Administrative Agent, the Assignor or any other Lender and based on such
documents and information at it shall deem appropriate at the time, continue
to make its own credit decisions in taking or not taking action under the
Loan Documents, (iii) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and
notice instructions are as set forth in the attachment to Schedule 1, (vi)
confirms that none of the funds, monies, assets or other consideration being
used to make the purchase and assumption hereunder are "plan assets" as
defined under ERISA and that its rights, benefits and interests in and under
the Loan Documents will not be "plan assets" under ERISA, [AND (vii) ATTACHES
THE FORMS PRESCRIBED BY THE INTERNAL REVENUE SERVICE OF THE UNITED STATES
CERTIFYING THAT THE ASSIGNEE IS ENTITLED TO RECEIVE PAYMENTS UNDER THE LOAN
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<PAGE>
DOCUMENTS WITHOUT DEDUCTION OR WITHHOLDING OF ANY UNITED STATES FEDERAL
INCOME TAXES].**
** TO BE INSERTED IF THE ASSIGNEE IS NOT INCORPORATED UNDER THE LAWS OF THE
UNITED STATES, OR A STATE THEREOF.
9. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
10. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee
shall have the right pursuant to SECTION 13.3.1 of the Credit Agreement to
assign the rights which are assigned to the Assignee hereunder to any entity
or person, provided that (i) any such subsequent assignment does not violate
any of the terms and conditions of the Loan Documents or any law, rule,
regulation, order, writ, judgment, injunction or decree and that any consent
required under the terms of the Loan Documents has been obtained and (ii)
unless the prior written consent of the Assignor is obtained, the Assignee is
not thereby released from its obligations to the Assignor hereunder, if any
remain unsatisfied, including, without limitation, its obligations under
SECTIONS 4, 5 AND 8 hereof.
11. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
12. ENTIRE AGREEMENT. This Assignment Agreement and the attached
Notice of Assignment embody the entire agreement and understanding between
the parties hereto and supersede all prior agreements and understandings
between the parties hereto relating to the subject matter hereof.
13. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
14. NOTICES. Notices shall be given under this Assignment Agreement
in the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto until notice of a change is delivered) shall
be the address set forth in the attachment to Schedule 1.
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<PAGE>
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By:
--------------------------------
Title:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
[NAME OF ASSIGNEE]
By:
--------------------------------
Title:
--------------------------------
--------------------------------
--------------------------------
--------------------------------
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<PAGE>
SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: , 19
------------ --
3. Amounts (as of date of Item 2 above):
a. Aggregate Commitment
(Loans)* under
Loan Agreement $
---------------------------
b. Assignee's Percentage
of the Aggregate Commitment
purchased under this
Assignment Agreement** %
----------------------------
4. Amount of Assignee's Commitment (Loan Amount)*
purchased under this Assignment Agreement: $
----------------
5. Amount of Assignor's Commitment (Loan Amount)
after purchase under this Assignment Agreement
----------------
6. Commitment Fee
----------------
7. Extension Fee
----------------
8. Proposed Effective Date:
----------------
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
-------------------------------- --------------------------
Title: Title:
----------------------------- -----------------------
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment.
** Percentage taken to 10 decimal places.
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<PAGE>
ATTACHMENT TO SCHEDULE 1 TO
ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must include notice
address and account information for the Assignor and the Assignee.
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<PAGE>
SCHEDULE 2 TO
ASSIGNMENT AGREEMENT
NOTICE OF ASSIGNMENT
-----------------
To: [NAME OF ADMINISTRATIVE AGENT]
------------------------------
------------------------------
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Unsecured Revolving Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Loan Agreement.
2. This Notice of Assignment (this "Notice") is given and delivered
to the Administrative Agent pursuant to SECTION 13.3(a) of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an Assignment
Agreement, dated as of ______________, (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and
transferred to the Assignee, and the Assignee has purchased, accepted and
assumed from the Assignor the percentage interest specified in Item 3 of
Schedule 1 of all outstanding rights and obligations under the Credit
Agreement. From and after such purchase, the Assignor's Commitment shall be
the amount specified in Item 5 of Schedule 1. The Effective Date of the
Assignment shall be the later of the date specified in Item 5 of Schedule 1
or two (2) Business Days (or such shorter period as agreed to by the
Administrative Agent) after this Notice of Assignment and any fee required by
SECTION 13.3(a) of the Credit Agreement have been delivered to the
Administrative Agent, provided that the Effective Date shall not occur if any
condition precedent agreed to by the Assignor and the Assignee or set forth
in SECTION 13 of the Credit Agreement has not been satisfied.
4. The Assignor and the Assignee hereby give to the Administrative Agent
notice of the assignment and delegation referred to herein. The Assignor will
confer with the Administrative Agent before the date specified in Item 6 of
Schedule 1 to determine if the Assignment Agreement will become effective on
such date pursuant to SECTION 3 hereof, and will confer with the Administrative
Agent to determine the Effective Date pursuant to SECTION 3 hereof if it occurs
thereafter. The Assignor shall notify the Administrative Agent if the
Assignment Agreement does not become effective on any proposed Effective Date as
a result
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<PAGE>
of the failure to satisfy the conditions precedent agreed to by the Assignor
and the Assignee. At the request of the Administrative Agent, the Assignor
will give the Administrative Agent written confirmation of the satisfaction
of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative Agent
on or before the Effective Date the processing fee of $3,500 required by
SECTION 13.3(a) of the Loan Agreement.
6. If Notes are outstanding on the Effective Date, the Assignor and the
Assignee request and direct that the Administrative Agent prepare and cause the
Borrower to execute and deliver new Notes or, as appropriate, replacements notes
to the Assignor and the Assignee. The Assignor and, if applicable, the Assignee
each agree to deliver to the Administrative Agent the original Note received by
it from the Borrower upon its receipt of a new Note in the appropriate amount.
7. The Assignee advised the Administrative Agent that notice and payment
instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of the funds,
monies, assets or other consideration being used to make the purchase pursuant
to the Assignment are "plan assets" as defined under ERISA and that its rights,
benefits and interests in and under the Loan Documents will not be "plan assets"
under ERISA.
9. The Assignee authorized the Administrative Agent to act as its agent
under the Loan Document in accordance with the terms thereof. The Assignee
acknowledges that the Administrative Agent has no duty to supply information
with respect to the Borrower or the Loan Documents to the Assignee until the
Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Loan Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
-------------------------------- --------------------------
Title: Title:
----------------------------- -----------------------
ACKNOWLEDGED AND CONSENTED TO
BY BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION OF CHICAGO,
as Administrative Agent
By:
--------------------------------
Title:
-----------------------------
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