SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report: January 27, 1998
FRANCHISE FINANCE CORPORATION OF AMERICA
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(Exact Name of Registrant as Specified in Charter)
Delaware 1-13116 86-0736091
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(State or other (Commission (IRS Employer
jurisdiction of File Number) Identification Number)
incorporation)
17207 North Perimeter Drive, Scottsdale, AZ 85255
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(Address of Principal Executive Offices) (Zip Code)
Registrant's telephone number, including area code: (602) 585-4500
NONE
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(Former Name or Former Address, if Change Since Last Report)
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Item 5. Other Events.
On January 27, 1998, the Registrant entered into a Credit Agreement
with NationsBank of Texas, N.A., as Administrative Agent, and certain lenders
named therein (the "Credit Agreement"). The amount of credit available to the
Registrant under the Credit Agreement is $100,000,000. The Registrant intends to
use funds borrowed under the Credit Agreement to finance the ongoing working
capital and general corporate requirements of the Registrant, including
acquisitions to the extent permitted thereunder. The Credit Agreement is filed
as Exhibit 10.01 hereto.
Item 7. Financial Statements and Exhibits.
(c) Exhibits.
10.01 Credit Agreement dated as of January 27, 1998 among Franchise
Finance Corporation of America, Certain Lenders and NationsBank
of Texas, N.A.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
FRANCHISE FINANCE CORPORATION OF
AMERICA (Registrant)
Dated: February 10, 1998 By /s/ John Barravecchia
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John Barraveccia, Executive Vice President
and Chief Financial Officer
Dated: February 10, 1998 By /s/ Catherine F. Long
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Catherine F. Long, Senior Vice President,
Finance and Principal Accounting Officer
CREDIT AGREEMENT
Dated as of January 27, 1998
AMONG
FRANCHISE FINANCE CORPORATION OF AMERICA,
CERTAIN LENDERS
and
NATIONSBANK OF TEXAS, N.A.
as Administrative Agent
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TABLE OF CONTENTS
ARTICLE I. DEFINITIONS
1.1. Definitions................................................ 1
1.2. Accounting and Other Terms................................. 23
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.1. (a) Advances Under the Revolving Loan................. 23
(b) Bid Rate Loans.................................... 23
2.2. Making Advances............................................ 24
2.3. Evidence of Indebtedness................................... 28
2.4. Reduction of Commitment.................................... 28
2.5. Prepayments................................................ 29
2.6. Repayment.................................................. 29
2.7. Interest................................................... 30
2.8. Default Interest........................................... 31
2.9. Continuation and Conversion Elections...................... 31
2.10. Fees ...................................................... 32
2.11. Funding Losses ............................................ 33
2.12. Computations and Manner of Payments ....................... 33
2.13. Yield Protection .......................................... 34
2.14. Use of Proceeds ........................................... 37
ARTICLE III. CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Initial Advance................ 37
3.2. Conditions Precedent to All Advances....................... 38
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
4.2. Due Authorization; Validity................................ 40
4.3. Conflicting Agreements and Other Matters................... 40
4.4. Financial Statements....................................... 40
4.5. Litigation................................................. 40
4.6. Compliance With Laws Regulating the Incurrence of
Indebtedness............................................... 41
4.7. Authorizations, Title to Properties, and Related
Matters.................................................... 41
4.8. Outstanding Debt and Liens................................. 41
4.9. Taxes...................................................... 42
4.10. ERISA ..................................................... 42
4.11. Environmental Laws ........................................ 42
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4.12. Disclosure ................................................ 43
4.13. Investments; Subsidiaries ................................. 43
4.14. Certain Fees .............................................. 43
4.15. Intellectual Property ..................................... 43
4.16. Investment Company Act .................................... 44
4.17. Restricted Payments ....................................... 44
4.18. Status as a Real Estate Investment Trust .................. 44
4.19. Common Enterprise ......................................... 44
4.20. Survival of Representations and Warranties, etc. .......... 44
ARTICLE V. AFFIRMATIVE COVENANTS
5.1. Compliance with Laws and Payment of Debt................... 45
5.2. Insurance.................................................. 45
5.3. Inspection Rights.......................................... 45
5.4. Records and Books of Account; Changes in GAAP.............. 45
5.5. Reporting Requirements..................................... 45
5.6. Use of Proceeds............................................ 48
5.7. Maintenance of Existence and Assets........................ 48
5.8. Payment of Taxes........................................... 48
5.9. Indemnity.................................................. 48
5.10. Authorizations and Material Agreements .................... 49
5.11. Intercompany Notes ........................................ 49
5.12. Further Assurances ........................................ 49
5.13. Subsidiaries and Other Obligors ........................... 50
5.14. Interest Hedge Agreements ................................. 50
ARTICLE VI. NEGATIVE COVENANTS
6.1. Financial Covenants........................................ 50
6.2. Indebtedness............................................... 50
6.3. Contingent Liabilities..................................... 51
6.4. Liens...................................................... 51
6.5. Prohibition of Fundamental Changes......................... 51
6.6. Dispositions of Assets..................................... 51
6.7. Distributions and Restricted Payments...................... 52
6.8. Business................................................... 52
6.9. Transactions with Affiliates............................... 52
6.10. Loans and Investments ..................................... 53
6.11. Fiscal Year and Accounting Method ......................... 53
6.12. Amendment of Corporate Documents .......................... 53
6.13. Compliance with ERISA ..................................... 53
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6.14. Subsidiaries and Other Obligors ........................... 53
6.15. Amendments to Material Agreements ......................... 53
6.16. Prohibited Transactions ................................... 54
6.17. No New Subsidiaries ....................................... 54
6.18. Asset Securitization Affiliates ........................... 54
ARTICLE VII. EVENTS OF DEFAULT
7.1. Events of Default.......................................... 54
7.2. Remedies Upon Default...................................... 56
7.3. Cumulative Rights.......................................... 57
7.4. Waivers.................................................... 57
7.5. Performance by Administrative Agent or any Lender.......... 57
7.6. Expenditures............................................... 58
7.7. Control.................................................... 58
ARTICLE VIII. ADMINISTRATIVE AGENT
8.1. Authorization and Action................................... 58
8.2. Administrative Agent's Reliance, Etc....................... 59
8.3. NationsBank of Texas, N.A. and Affiliates.................. 59
8.4. Lender Credit Decision..................................... 59
8.5. Indemnification by Lenders................................. 59
8.6. Successor Administrative Agent............................. 60
ARTICLE IX. MISCELLANEOUS
9.1. Amendments and Waivers..................................... 61
9.2. Notices.................................................... 61
9.3. Parties in Interest........................................ 63
9.4. Assignments and Participations............................. 63
9.5. Sharing of Payments........................................ 64
9.6. Right of Set-off........................................... 64
9.7. Costs, Expenses, and Taxes................................. 65
9.8. Rate Provision............................................. 67
9.9. Confidentiality............................................ 68
9.10. Severability .............................................. 69
9.11. Exceptions to Covenants ................................... 69
9.12. Counterparts .............................................. 69
9.13. GOVERNING LAW; WAIVER OF JURY TRIAL ....................... 69
9.14. ENTIRE AGREEMENT .......................................... 70
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TABLE OF SCHEDULES AND EXHIBITS
SCHEDULES
Schedule 4.1 Organization and Qualification
Schedule 4.5 Litigation
Schedule 4.8 Debt, Contingent Liabilities and Liens of
Company and each Subsidiary Entity in Existence
on the Closing Date
Schedule 4.11 Environmental Liabilities of Company and each
Subsidiary on the Closing Date
Schedule 4.13 Investments
EXHIBITS
Exhibit A - Note (Evidencing Revolving Loan)
Exhibit B - Guaranty Agreement
Exhibit C - Compliance Certificate
Exhibit D - Conversion/Continuation Notice
Exhibit E - Borrowing Notice
Exhibit F - Assignment and Acceptance
Exhibit G - Subordination Agreement
Exhibit H - Confidentiality Agreement
Exhibit I - Bid Rate Note
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FRANCHISE FINANCE CORPORATION OF AMERICA
CREDIT AGREEMENT
THIS CREDIT AGREEMENT (this "Agreement") is dated as of January 27,
1998, among FRANCHISE FINANCE CORPORATION OF AMERICA, a Delaware corporation
("Company"), Lenders from time to time party hereto or to an Assignment and
Acceptance, and NATIONSBANK OF TEXAS, N.A., a national banking association, as
Administrative Agent (in such capacity, "Administrative Agent").
BACKGROUND
Lenders have been requested to provide Company funds to finance the
ongoing working capital and general corporate requirements of Company, including
acquisitions to the extent permitted hereunder. Lenders have agreed to provide
such financing, subject to the terms and conditions set forth below.
AGREEMENT
NOW, THEREFORE, for valuable consideration hereby acknowledged, the
parties hereto agree as follows:
ARTICLE I. DEFINITIONS
1.1. Definitions. As used in this Agreement, the following terms have
the respective meanings indicated below (such meanings to be applicable equally
to both the singular and plural forms of such terms):
"Absolute Bid Rate" means an absolute fixed rate of interest per annum.
"Absolute Bid Rate Loan" means a Bid Rate Loan which bears interest at
an Absolute Bid Rate.
"Accumulated Depreciation" means, as of any date of determination, the
accumulated depreciation and amortization of prepaid expenses of Company and its
Consolidated Subsidiaries determined in accordance with GAAP as of such date of
determination.
"Adjusted Net Worth" means, as of any date of determination, for
Company and its Consolidated Subsidiaries determined in accordance with GAAP,
the sum of (a) Net Worth,
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plus (b) Accumulated Depreciation.
"Adjustment Date" means, for purposes of the determination of the
Applicable Margin and the Commitment Fee, the effective date of any issuance of,
or change in, the Index Debt Rating which results in a change in the Applicable
Margin and the Commitment Fee.
"Administrative Agent" means NationsBank of Texas, N.A., in its
capacity as Administrative Agent hereunder, or any successor Administrative
Agent appointed pursuant to Section 8.6 hereof.
"Advance" means an advance made by a Lender to Company pursuant to
Section 2.1 hereof.
"Affiliate" means a Person that directly, or indirectly through one or
more intermediaries, Controls or is Controlled By or is Under Common Control
with another Person.
"Agreement" means this Credit Agreement, as hereafter amended,
modified, or supplemented from time to time.
"Amended and Restated Credit Agreement" means that certain Second
Amended and Restated Credit Agreement, dated as of December 29, 1997, among
Company, certain lenders and co-agents, and Administrative Agent, as amended,
modified, supplemented or restated from time to time.
"Amended and Restated Credit Agreement Commitment Increase Date" means
the date that the Commitment (as defined in the Amended and Restated Credit
Agreement) is increased.
"Applicable Law" means (a) in respect of any Person, all provisions of
Laws applicable to such Person, and all orders and decrees of all courts and
arbitrators in proceedings or actions to which the Person in question is a party
and (b) in respect of contracts made or performed in the State of Texas,
"Applicable Law" shall also mean the laws of the United States of America,
including, without limiting the foregoing, 12 USC Sections 85 and 86(a), as
amended to the date hereof and as the same may be amended at any time and from
time to time hereafter, and any other statute of the United States of America
now or at any time hereafter prescribing the maximum rates of interest on loans
and extensions of credit, and the laws of the State of Texas, including, without
limitations, Art. 1H, if applicable, and if Art. 1H is not applicable, Art. 1D,
and any other statute of the State of Texas now or at any time hereafter
prescribing maximum rates of interest on loans and extensions of credit,
provided however, that pursuant to Article 5069-15.10(b), Title 79, Revised
Civil Statutes of Texas, 1925, as amended, Company agrees that the provisions of
Chapter 15, Title 79, Revised Civil Statutes of Texas, 1925, as amended, shall
not apply to the Advances hereunder.
"Applicable Margin" means the following per annum percentages,
applicable in the following situations:
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Applicability Base Rate LIBOR
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Category 1 - There is no Index Debt 0.25 1.50
Rating or the Index Debt Rating is the
following: below BBB- by S&P or below
Baa3 by Moody's
Category 2 - The Index Debt Rating is 0.00 1.00
the following: BBB- by S&P or Baa3 by
Moody's
Category 3 - The Index Debt Rating is 0.00 0.95
the following: BBB by S&P or Baa2 by
Moody's
Category 4 - The Index Debt Rating is 0.00 0.90
the following: BBB+ by S&P or Baa1 by
Moody's
Category 5 - The Index Debt Rating is 0.00 0.80
the following: A- or better by S&P or
A3 or better by Moody's
The Applicable Margin payable by Company on the Advances outstanding hereunder
shall be adjusted on each Adjustment Date according to the most recent
determination of the Index Debt Rating; provided, that if (i) there exists a
Default or (ii) Company does not have an Index Debt Rating, the Applicable
Margin shall be (A) 0.25% per annum with respect to Base Rate Advances and (B)
1.50% per annum with respect to LIBOR Advances. For purposes of the foregoing,
if the Index Debt Rating established by S&P or Moody's shall fall within a
different category, the Applicable Margin shall be determined by reference to
whichever Index Debt Rating shall fall within the inferior (or numerically
lower) category. If the rating system of Moody's or S&P shall change prior to
the Maturity Date, Company and Lenders shall negotiate in good faith to amend
the references to specific ratings in this definition to reflect such changed
rating system.
"Art. 1D" means Article 5069-1D, Title 79, Revised Civil Statutes of
Texas, 1925, as amended.
"Art. 1H" means Article 5069-1H, Title 79, Revised Civil Statutes of
Texas, as amended.
"Asset Sale" means any sale or other disposition, or series of sales or
other dispositions (including, without limitation, by merger or consolidation,
and whether by operation of law or otherwise), made on or after the Closing Date
by Company or any of its Subsidiaries to any Person (other than Company or any
of its Subsidiaries) of (a) all or substantially all of the outstanding Capital
Stock of any of its Subsidiaries, (b) all or substantially all of its assets or
the assets of any division of Company or any of its Subsidiaries or (c) any
other asset or assets of Company or any of its Subsidiaries, including the sale
of notes in connection with an Asset Securitization (but excluding any Retained
Securities in connection with such Asset Securitization); provided, however,
that the following shall not be considered an Asset Sale hereunder: (i) the sale
or other disposition by Company or any of its Subsidiaries of worn out or
obsolete tools, property or equipment; (ii) the sale
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of debt or equity investment securities in the ordinary course of business; and
(iii) sales resulting from the exercise by Tenants under Leases with respect to
Property owned by Company and its Subsidiaries as of the Closing Date of
purchase options granted by Company and its Subsidiaries to such Tenants.
"Asset Sale Proceeds" means cash payments received by Company or any of
its Subsidiaries (including, without limitation, any cash payments received by
way of deferred payment of principal pursuant to a note or receivable or
otherwise, but only as and when received) from any Asset Sale (after repayment
of any Indebtedness due by reason of such Asset Sale or to effect the release of
any Lien on the property or assets being sold), in each case net of the amount
of (a) reasonable brokers', underwriters' and advisors' fees and commissions
payable in connection with such Asset Sale, (b) all Taxes reasonably estimated
to be payable as a direct consequence of such Asset Sale, (c) the reasonable
fees and expenses (including, without limitation, severance payments)
attributable to such Asset Sale, and (d) to the extent not included in clauses
(a) through (c), any amount required to be paid to any Person (other than
Company and any of its Subsidiaries) owning a beneficial interest in the
property or assets sold. For purposes of this definition, Asset Sale Proceeds
shall be deemed to include, without limitation, any award of compensation for
any asset or property or group thereof taken by condemnation or eminent domain
and insurance proceeds for the loss of or damage to any asset or property if
such award or proceeds equals or exceeds $50,000 (per occurrence) and within 90
days after the receipt thereof replacement or repair of such asset or property
has not commenced, except that in the event that at any time such replacement or
repair is abandoned or is otherwise discontinued or is not diligently pursued,
the remaining award or proceeds, as the case may be, shall constitute Asset Sale
Proceeds at such time.
"Asset Securitization" means the sale, disposition, transfer or
assignment by Company or any of its Subsidiaries to a special purpose
corporation, trust or other entity, of notes evidencing obligations to repay
secured or unsecured loans owned by Company or any such Subsidiary, which notes
are subsequently sold, transferred or assigned to one or more Asset
Securitization Affiliates, and, as a result of such sale, transfer or
assignment, bonds, certificates or other evidences of ownership representing
interests in pools of such loans are issued, either simultaneously or
subsequently.
"Asset Securitization Affiliate" means an Affiliate of Company or any
of its Subsidiaries which owns no assets (other than initial capitalization of
each Affiliate not to exceed $100,000) and transacts no business other than as a
depositor, conduit or grantor in an Asset Securitization, including, without
limitation, any real estate mortgage investment conduit or special purpose
corporation, trust or other entity whose sole purpose is to effect an Asset
Securitization or a warehousing of loans in anticipation of an Asset
Securitization.
"Assignment and Acceptance" means an assignment and acceptance entered
into by a Lender and an Eligible Assignee, and accepted by Administrative Agent,
in the form of Exhibit F hereto, as each such agreement may be amended,
modified, extended, restated, renewed, substituted or
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replaced from time to time.
"Auditor" means Arthur Andersen LLP, or other independent certified
public accountants selected by Company and acceptable to Administrative Agent.
"Authorizations" means all filings, recordings and registrations with,
and all validations or exemptions, consents and Licenses from, any Tribunal.
"Authorized Officer" means the chief executive officer, an executive
vice president or senior vice president of Company or any other executive
officer of Company authorized by Company from time to time of which
Administrative Agent has been notified in writing.
"Bank Affiliate" means the holding company of any Lender, or any
wholly-owned direct or indirect subsidiary of such holding company or of such
Lender.
"Base Rate Advance" means an Advance bearing interest at the Base Rate.
"Base Rate" means a fluctuating rate per annum as shall be in effect
from time to time equal to the lesser of (a) the higher of (i) the sum of the
Applicable Margin plus the rate of interest as then in effect announced publicly
by NationsBank of Texas, N.A. in Dallas, Texas from time to time as its U.S.
dollar prime commercial lending rate (such rate may or may not be the lowest
rate of interest charged by NationsBank from time to time) or (ii) the sum of
the Applicable Margin, plus 0.50%, plus the Federal Funds Rate, and (b) the
Highest Lawful Rate. The Base Rate shall be adjusted automatically without
notice as of the opening of business on the effective date of each change in the
prime rate or Federal Funds Rate, as applicable, to account for such change.
"Bid Rate Loan" means an Advance the interest rate on which is
determined by agreement between Company and Lender making such Advance pursuant
to Section 2.1(b).
"Bid Rate Note" means each promissory note of Company evidencing Bid
Rate Loans, in substantially the form of Exhibit I hereto, as each such note may
be amended, extended, restated, renewed, substituted or replaced from time to
time.
"Borrowing" means a borrowing under the Facility of the same Type made
on the same day.
"Borrowing Notice" has the meaning set forth in Section 2.2(a) hereof.
"Business Day" means a day on which commercial banks are open (a) for
the transaction of commercial banking business in Dallas, Texas and Phoenix,
Arizona and (b) with respect to any LIBOR Advance for the transaction of
international business (including dealings in Dollar deposits) in London,
England.
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"Capital Leases" means capital leases and subleases, as defined in
accordance with GAAP.
"Capital Stock" means, as to any Person, the equity interests in such
Person, including, without limitation, the shares of each class of capital stock
of any Person that is a corporation and each class of partnership interests
(including, without limitation, general, limited and preference units) in any
Person that is a partnership.
"Cash Equivalents" means investments (directly or through a money
market fund) in (a) certificates of deposit and other interest bearing deposits
or accounts with United States commercial banks having a combined capital and
surplus of at least $300,000,000, which certificates, deposits, and accounts
mature within one year from the date of investment and are fully insured as to
principal by the Federal Deposit Insurance Corporation or any successor agency,
(b) obligations issued or unconditionally guaranteed by the United States
government, or issued by an agency thereof and backed by the full faith and
credit of the United States government, which obligations mature within one year
from the date of investment, (c) direct obligations issued by any state or
political subdivision of the United States, which mature within one year from
the date of investment and have the highest rating obtainable from S&P or
Moody's on the date of investment, and (d) commercial paper which has one of the
three highest ratings obtainable from S&P or Moody's.
"Cash Flow From Operations" means, for any period of determination, for
Company and its Consolidated Subsidiaries on a consolidated basis, net income
plus depreciation and amortization, all as determined in accordance with GAAP;
provided that there shall not be included in such calculation (a) any proceeds
of any insurance policy other than rental guaranty insurance or business
interruption insurance received by such Person, (b) any gain or loss which is
classified as "extraordinary" in accordance with GAAP, (c) any capital gains and
taxes on capital gains or (d) any gains or losses from sales of Properties.
"Change of Control" means (a) a transaction or series of transactions
whereby any Person or group (within the meaning of Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended, and the rules and regulations
promulgated thereunder (the "1934 Act")) shall acquire beneficial ownership
(within the meaning of Rule 13d-3 of the 1934 Act), directly or indirectly, of
securities of Company (or other securities convertible into such securities)
representing 35% of the combined voting power of all securities of Company
entitled to vote in the election of directors (for purposes of this definition,
a "Controlling Person") or (b) at any time a majority of Company's directors are
persons who were not (i) in office on the Closing Date or (ii) initially
nominated by directors who were in office on the Closing Date or by successor
directors elected or appointed upon the initial nomination of such directors or
successors directors. In connection with clause (a) above, a Person or group
shall not be a "Controlling Person" if such Person or group holds voting power
in good faith and not for the purpose of circumventing the effect of the
occurrence of a Change of Control as an agent, bank, broker, nominee, trustee or
holder of revocable proxies given in response to a solicitation pursuant to the
1934 Act, for one or more beneficial owners who do not individually, or,
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if they are a group acting in concert, as a group, have the voting power
specified in the previous sentence.
"Closing Date" means the date of this Agreement.
"Code" means the Internal Revenue Code of 1986, as amended, and the
rules and regulations issued thereunder, as from time to time in effect.
"Commitment" means, with respect to the Revolving Loan, $100,000,000,
as such amount may be reduced from time to time in accordance with the terms of
Section 2.4 hereof.
"Commitment Fee" means the fee described in Section 2.10(a) hereof.
"Company" means Franchise Finance Corporation of America, a Delaware
corporation.
"Compliance Certificate" means a certificate of an Authorized Officer
of Company acceptable to Administrative Agent, in the form of Exhibit C hereto,
(a) certifying that such individual has no knowledge that a Default or Event of
Default has occurred and is continuing, or if a Default or Event of Default has
occurred and is continuing, a statement as to the nature thereof and the action
being taken or proposed to be taken with respect thereto, and (b) setting forth
detailed calculations with respect to each of the covenants described in Section
6.1 hereof.
"Confidential Information" has the meaning specified in Section 9.9
hereof.
"Confidentiality Agreement" means a Confidentiality Agreement in
substantially the form of Exhibit H hereto, as such agreement may be amended,
modified or supplemented from time to time.
"Consensual Lien" means any Lien of the type described in clauses (g)
and (h) of the definition of Permitted Liens.
"Consequential Loss," with respect to (a) Company's payment of all or
any portion of the then-outstanding principal amount of a LIBOR Advance on a day
other than the last day of the related Interest Period, including, without
limitation, payments made as a result of the acceleration of the maturity of a
Note, (b) (subject to Administrative Agent's prior consent), a LIBOR Advance
made on a date other than the date on which the Advance is to be made according
to Section 2.2(a) hereof or Section 2.9 hereof, or (c) any of the circumstances
specified in Section 2.4 hereof and Section 2.5 hereof on which a Consequential
Loss may be incurred, means any loss, cost or expense incurred by any Lender as
a result of the timing of the payment or Advance or in liquidating,
redepositing, redeploying or reinvesting the principal amount so paid or
affected by the timing of the Advance or the circumstances described in Section
2.4 hereof and Section 2.5 hereof, which amount shall be the sum of (i) the
interest that, but for the payment or timing of Advance, such Lender would
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have earned in respect of that principal amount, reduced, if such Lender is able
to redeposit, redeploy, or reinvest the principal amount, by the interest earned
by such Lender as a result of redepositing, redeploying or reinvesting the
principal amount plus (ii) any expense or penalty incurred by such Lender by
reason of liquidating, redepositing, redeploying or reinvesting the principal
amount. Each determination by each Lender of any Consequential Loss is, in the
absence of demonstrable error, conclusive and binding.
"Consolidated Subsidiary" means, as to any Person, each Subsidiary of
such Person (whether then existing or thereafter created or acquired) the
financial statements of which are (or should have been) consolidated with the
financial statements of such Person in accordance with GAAP.
"Contingent Liability" means, as to any Person, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness or obligation of any other Person in any
manner, whether directly or indirectly, including without limitation any
obligation of such Person, direct or indirect, (a) to purchase or pay (or
advance or supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any security for
the payment of such Indebtedness, (b) to purchase Property or services for the
purpose of assuring the owner of such Indebtedness of its payment, or (c) to
maintain the solvency, working capital, equity, cash flow, fixed charge or other
coverage ratio, or any other financial condition of the primary obligor so as to
enable the primary obligor to pay any Indebtedness or to comply with any
agreement relating to any Indebtedness or obligation, and shall, in any event,
include any contingent obligation under any letter of credit, application for
any letter of credit or other related documentation.
"Continue," "Continuation" and "Continued" each refer to the
continuation pursuant to Section 2.9 hereof of a LIBOR Advance from one Interest
Period to the next Interest Period.
"Control" or "Controlled By" or "Under Common Control" mean possession,
direct or indirect, of power to direct or cause the direction of management or
policies (whether through ownership of voting securities, by contract or
otherwise); provided that, in any event (a) it shall include any director (or
Person holding the equivalent position) or executive officer (or Person holding
the equivalent position) of such Person or of any Affiliate of such Person, (b)
any Person which beneficially owns 5% or more (in number of votes) of the
securities having ordinary voting power for the election of directors of a
corporation shall be conclusively presumed to control such corporation, (c) any
general partner of any partnership shall be conclusively presumed to control
such partnership, (d) any other Person who is a member of the immediate family
(including parents, spouse, siblings and children) of any general partner of a
partnership, and any trust whose principal beneficiary is such individual or one
or more members of such immediate family and any Person who is controlled by any
such member or trust, or is the executor, administrator or other personal
representative of such Person, shall be conclusively presumed to control such
Person, and (e) no Person shall be deemed to be an Affiliate of a corporation
solely by reason of his being an officer or director of such corporation.
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"Controlled Group" means, as to any Person, all members of a controlled
group of corporations and all trades or businesses (whether or not incorporated)
which are under common control with such Person and which, together with such
Person, are treated as a single employer under Section 414(b), (c), (m) or (o)
of the Code.
"Conversion or Continuance Notice" has the meaning set forth in Section
2.9(b) hereof.
"Debt for Borrowed Money" means, as to any Person, at any date, without
duplication, (a) all obligations of such Person for borrowed money, (b) all
obligations of such Person evidenced by bonds, debentures, notes, letters of
credit (or applications for letters of credit) or other similar instruments, (c)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (d) all obligations of such Person secured by a Lien on any assets or
property of any Person and (e) Intercompany Notes.
"Debtor Relief Laws" means applicable bankruptcy, reorganization,
insolvency, receivership, liquidation, arrangement, conservatorship, moratorium,
or similar Laws, or principles of equity affecting the enforcement of creditors'
rights generally.
"Default" means any event specified in Section 7.1 hereof, whether or
not any requirement in connection with such event for the giving of notice,
lapse of time, or happening of any further condition has been satisfied.
"Distribution" means, as to any Person, (a) any declaration or payment
of any distribution or dividend (other than a stock dividend) on, or the making
of any pro rata distribution, loan, advance, or investment to or in any holder
(in its capacity as a partner, shareholder or other equity holder) of, any
partnership interest or shares of Capital Stock or other equity interest of such
Person, or (b) any purchase, redemption, or other acquisition or retirement for
value of any shares of partnership interest or Capital Stock or other equity
interest of such Person.
"Dollars" and "$" means the lawful currency of the United States of
America.
"Eligible Assignee" means (a) any Bank Affiliate, (b) a commercial bank
organized under the laws of the United States, or any state thereof, and having
total assets in excess of $500,000,000; (c) 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 total assets in excess of $500,000,000, provided that such bank is acting
through a branch or agency located in the country in which it is organized or
another country which is a member of the Organization for Economic Cooperation
and Development; and (d) the central bank of any country which is a member of
the Organization for Economic Cooperation and Development.
"Environmental Claim" means any written notice by any Tribunal alleging
potential liability
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for damage to the environment, or by any Person alleging potential liability for
personal injury (including sickness, disease or death), resulting from or based
upon (a) the presence or release (including sudden or non-sudden, accidental or
non-accidental, leaks or spills) of any Hazardous Material at, in or from
property, whether or not owned by Company or any of its Subsidiaries, or (b)
circumstances forming the basis of any violation, or alleged violation, of any
Environmental Law.
"Environmental Laws" means the Comprehensive Environmental Response,
Compensation, and Liability Act (42 U.S.C. ss.9601 et seq.) ("CERCLA"), the
Hazardous Material Transportation Act (49 U.S.C. ss.1801 et seq.), the Resource
Conservation and Recovery Act (42 U.S.C ss.6901 et seq.), the Federal Water
Pollution Control Act (33 U.S.C. ss.1251 et seq.), the Clean Air Act (42 U.S.C.
ss.7401 et seq.), the Toxic Substances Control Act (15 U.S.C. ss.2601 et seq.),
and the Occupational Safety and Health Act (29 U.S.C. ss.651 et seq.) ("OSHA"),
as such laws have been or hereafter may be amended or supplemented, and any and
all similar present or future federal, state and local Laws.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended, and the rulings and regulations issued thereunder, as from time to time
in effect.
"ERISA Affiliate" means any Person that for purposes of Title IV of
ERISA is a member of the controlled group of Company or any of its Subsidiaries,
or is under common control with Company or any of its Subsidiaries, within the
meaning of Section 414(c) of the Code.
"ERISA Event" means (a) a Reportable Event, within the meaning of
Section 4043 of ERISA, unless the 30-day notice requirement with respect thereto
has been waived by the PBGC, (b) the issuance by the administrator of any Plan
of a notice of intent to terminate such Plan in a distress situation, pursuant
to Section 4041(a)(2) and 4041(c) of ERISA (including any such notice with
respect to a plan amendment referred to in Section 4041(e) of ERISA), (c) the
cessation of operations at a facility in the circumstances described in Section
4062(e) of ERISA, (d) the withdrawal by Company, any Subsidiary of Company, or
an ERISA Affiliate from a Multiple Employer Plan during a Plan year for which it
was a substantial employer, as defined in Section 4001(a)(2) of ERISA, (e) the
failure by Company, any Subsidiary of Company, or any ERISA Affiliate to make a
payment to a Plan required under Section 302 of ERISA, (f) the adoption of an
amendment to a Plan requiring the provision of security to such Plan, pursuant
to Section 307 of ERISA, or (g) the institution by the PBGC of proceedings to
terminate a Plan, pursuant to Section 4042 of ERISA, or the occurrence of any
event or condition that constitutes grounds under Section 4042 of ERISA for the
termination of, or the appointment of a trustee to administer, a Plan.
"Event of Default" means any of the events specified in Section 7.1
hereof, provided there has been satisfied any requirement in connection
therewith for the giving of notice, lapse of time, or happening of any further
condition.
"Facility" means the Revolving Loan and the Bid Rate Loans evidenced by
this Agreement
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and the other Loan Papers.
"Federal Funds Rate" means, for any period, a fluctuating interest rate
per annum equal for each day during such period to the weighted average of the
rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Dallas, or, if such rate is not so published for any day
which is a Business Day, the average of the quotations for such date on such
transactions received by Administrative Agent from three federal funds brokers
of recognized standing selected by it.
"Fixed Charge Coverage Ratio" means, as of any date of determination,
for Company and its Consolidated Subsidiaries determined in accordance with
GAAP, the ratio of (a) the sum of (i) Cash Flow From Operations for the twelve
calendar month period ending on or most recently ended prior to such date of
determination plus (ii) cash interest payable on all Indebtedness (including
interest in respect of Capital Leases) of Company and its Consolidated
Subsidiaries during such period to (b) the sum of (i) cash interest payable on
all Indebtedness (including interest in respect of Capitalized Leases) of
Company and its Consolidated Subsidiaries during such period plus (ii) regularly
scheduled principal amounts of all Indebtedness of Company and its Consolidated
Subsidiaries (including the principal portion of rentals payable under Lease
Obligations) payable during such period, excluding, however, any regularly
scheduled principal payment on Indebtedness of Company and its Consolidated
Subsidiaries which pays such Indebtedness in full, but only to the extent that
the amount of such final payment is greater than the scheduled principal payment
immediately preceding such final payment, plus (iii) without duplication, the
principal amounts of all Indebtedness of Company and its Subsidiaries (including
the principal portion of rentals payable under Lease Obligations) required to be
prepaid or purchased during such period.
"Funded Mortgages" means promissory notes secured by duly recorded
first priority mortgages, deeds of trust, assignments of rents, security
agreements, fixture filings and similar instruments executed by a purchaser or
owner of a Property in favor of Company or any Subsidiary of Company, or a
trustee acting for the benefit of Company or any Subsidiary of Company, relating
to loans made by Company or any Subsidiary of Company to unaffiliated third
parties secured by such Property, the principal amount of which was or will be
funded from proceeds of Advances or Intercompany Loans.
"GAAP" means generally accepted accounting principles applied on a
consistent basis. Application on a consistent basis shall mean that the
accounting principles observed in a current period are comparable in all
material respects to those applied in a preceding period, except for new
developments or statements promulgated by the Financial Accounting Standards
Board.
"Guaranty" of a Person means any agreement by which such Person
assumes, guarantees, endorses, contingently agrees to purchase or provide funds
for the payment of, or otherwise becomes liable upon, the obligation of any
other Person, or agrees to maintain the net worth or working capital
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or other financial condition of any other Person, or otherwise assures any
creditor or such other Person against loss, including, without limitation, any
agreement which assures any creditor or such other Person payment or performance
of any obligation, or any take-or-pay contract and shall include without
limitation, the contingent liability of such Person in connection with any
application for a letter of credit (without duplication of any amount already
included in Indebtedness).
"Guaranty Agreement" means a Guaranty Agreement, duly executed by each
Guarantor, in substantially the form of Exhibit B hereto, appropriately
completed, as such agreement may be amended, modified, extended, renewed,
restated, substituted or replaced from time to time.
"Guarantors" means each Subsidiary of Company and each other Person
from time to time guaranteeing payment of the Obligations to Administrative
Agent and Lenders.
"Hazardous Materials" means all materials subject to any Environmental
Law, including, without limitation, materials listed in 49 C.F.R. ss. 172.101,
Hazardous Substances, explosive or radioactive materials, hazardous or toxic
wastes or substances, petroleum or petroleum distillates, asbestos, or
material containing asbestos.
"Hazardous Substances" means hazardous waste as defined in the Clean
Water Act, 33 U.S.C. ss. 1251 et seq., the Comprehensive Environmental Response
Compensation and Liability Act as amended by the Superfund Amendments and
Reauthorization Act, 42 U.S.C. ss. 9601 et seq., the Resource Conservation
Recovery Act, 42 U.S.C. ss. 6901 et seq., and the Toxic Substances Control Act,
15 U.S.C. ss. 2601 et seq.
"Highest Lawful Rate" means at the particular time in question the
maximum rate of interest which, under Applicable Law, Administrative Agent is
then permitted to charge on the Obligations. If the maximum rate of interest
which, under Applicable Law, such Lender is permitted to charge on the
Obligations shall change after the date hereof, the Highest Lawful Rate shall be
automatically increased or decreased, as the case may be, from time to time as
of the effective time of each change in the Highest Lawful Rate without notice
to Company. For purposes of determining the Highest Lawful Rate under Applicable
Law, the applicable rate ceiling shall be (a) the indicated rate ceiling
described in and computed in accordance with the provisions of Section (a)(1) of
Art. 1.04; or (b) provided notice is given as required in Section (h)(1) of Art.
1.04, either the annualized ceiling or quarterly ceiling computed pursuant to
Section (d) of Art. 1.04; provided, however, that at any time the indicated rate
ceiling, the annualized ceiling or the quarterly ceiling, as applicable, shall
be less than 18% per annum or more than 24% per annum, the provisions of
Sections (b)(1) and (2) of said Art. l.04 shall control for purposes of such
determination, as applicable.
"Increased Advance Costs" has the meaning specified in Section 2.13(e)
hereof.
"Increased Advance Costs Retroactive Effective Date" has the meaning
specified in Section 2.13(e) hereof.
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"Increased Advance Costs Set Date" has the meaning specified in Section
2.13(e) hereof.
"Indebtedness" means, without duplication, with respect to any Person,
all obligations of such Person, determined on a consolidated basis and measured
in accordance with GAAP that is required to be classified on the balance sheet
as liabilities, and in any event shall include (without duplication) (a) Debt
for Borrowed Money, (b) Capital Lease obligations, (c) reimbursement obligations
relating to letters of credit, (d) Contingent Liabilities relating to any of the
foregoing, (e) Withdrawal Liability, (f) indebtedness, if any, associated with
Interest Hedge Agreements with other Persons, (g) payments due for the deferred
purchase price of property and services (but excluding trade payables that are
less than 90 days old and (h) obligations (contingent or otherwise) to purchase,
retire or redeem any Capital Stock of such Person.
"Indemnitees" has the meaning ascribed thereto in Section 5.9 hereof.
"Index Debt Rating" means the rating applicable to Company's senior,
unsecured, non-credit enhanced long term indebtedness for borrowed money.
"Initial Advance" means the initial Advance made in accordance with the
terms hereof, which shall only be after Company has satisfied each of the
conditions set forth in Section 3.1 and Section 3.2 hereof (or any such
condition shall have been waived by each Lender).
"Insufficiency" means, with respect to any Plan, the amount, if any, of
its unfunded benefit liabilities within the meaning of Section 4001(a)(18) of
ERISA.
"Intercompany Loans" means all loans made by Company to its
Subsidiaries.
"Intercompany Notes" means all promissory notes payable to Company by
any Subsidiary of Company evidencing the obligation to repay Intercompany Loans,
as such notes may be amended, modified, extended, renewed, substituted or
replaced from time to time.
"Interest Hedge Agreements" means any interest rate swap agreements,
interest cap agreements, interest rate collar agreements, or any similar
agreements or arrangements designed to hedge the risk of variable interest rate
volatility, or foreign currency hedge, exchange or similar agreements, on terms
and conditions reasonably acceptable to Administrative Agent (evidenced by
Administrative Agent's consent in writing), as such agreements or arrangements
may be modified, supplemented, and in effect from time to time.
"Interest Period" means the period beginning on the date an Advance is
made or continued as or converted into a LIBOR Advance and ending one or two
months thereafter (as Company, in its sole discretion, shall select) provided,
however, that:
(a) Company may not select any Interest Period that ends after
any principal
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repayment date unless, after giving effect to such selection, the
aggregate principal amount of LIBOR Advances having Interest Periods
that end on or prior to such principal repayment date, shall be at
least equal to the principal amount of Advances due and payable on and
prior to such date;
(b) whenever the last day of any Interest Period would
otherwise occur on a day other than a Business Day, the last day of
such Interest Period shall be extended to occur on the next succeeding
Business Day, provided, however, that if such extension would cause the
last day of such Interest Period to occur in the next following
calendar month, the last day of such Interest Period shall occur on the
next preceding Business Day; and
(c) whenever the first day of any Interest Period occurs on a
day of an initial calendar month for which there is no numerically
corresponding day in the calendar month that succeeds such initial
calendar month by the number of months equal to the number of months in
such Interest Period, such Interest Period shall end on the last
Business Day of such succeeding calendar month.
"Investment" means any acquisition of all or substantially all assets
of any Person, or any direct or indirect purchase or other acquisition of, or a
beneficial interest in, capital stock or other securities of any other Person,
or any direct or indirect loan, extension of credit, advance (other than
advances to employees for moving and travel expenses, drawing accounts, and
similar expenditures in the ordinary course of business), or capital
contribution to or investment in any other Person, including without limitation
the incurrence or sufferance of Debt or accounts receivable of any other Person
that are not current assets or do not arise from sales to that other Person in
the ordinary course of business.
"Law" means any constitution, statute, law, ordinance, regulation,
rule, order, writ, injunction, or decree of any Tribunal.
"Lease" means any lease, sublease, license, franchise, concession or
other agreement, whether written or oral, permitting any other Person to use,
occupy or possess any Property.
"Lease Obligations" means the obligations of Company and its
Consolidated Subsidiaries to pay rent or other amounts under a Capital Lease or
any Operating Lease.
"Lenders" means the lenders listed on the signature pages of this
Agreement, and each Eligible Assignee which hereafter becomes a party to this
Agreement pursuant to Section 9.4 hereof, for so long as any such Person is owed
any portion of the Obligations or obligated to make any Advances under the
Revolving Loan.
"Lending Office" means, with respect to each Lender, its branch or
affiliate, (a) initially, the office of such Lender, branch or affiliate
identified as such on the signature pages hereof, and
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(b) subsequently, such other office of such Lender, branch or affiliate as such
Lender may designate in writing to Company and Administrative Agent as the
office from which the Advances of such Lender will be made and maintained and
for the account of which all payments of principal and interest on the Advances
and the Commitment Fee will thereafter be made. Lenders may have more than one
Lending Office for the purpose of making Base Rate Advances and LIBOR Advances.
"LIBOR Advance" means an Advance bearing interest at the LIBOR Rate.
"LIBOR Bid Rate" means a rate per annum equal to the LIBOR Rate Basis
for the term in question plus a margin specified by a Lender.
"LIBOR Bid Rate Loan" means a Bid Rate Loan which bears interest at the
LIBOR Bid Rate.
"LIBOR Rate" means a simple per annum interest rate equal to the lesser
of (a) the Highest Lawful Rate, and (b) the sum of the LIBOR Rate plus the
Applicable Margin. The LIBOR Rate shall, with respect to LIBOR Advances subject
to reserve or deposit requirements, be subject to premiums assessed therefor by
each Lender, which are payable directly to each Lender.
"LIBOR Rate Basis" means, for any LIBOR Advance for any Interest Period
therefor, the rate per annum (rounded upwards, if necessary, to the nearest
1/100th of one percent) appearing on Telerate Page 3750 (or any successor page)
as the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period. If for any reason
such rate is not available, the term "LIBOR Rate Basis" shall mean, for any
LIBOR Advance for any Interest Period therefor, the rate per annum (rounded
upwards, if necessary, 1/100th of one percent) appearing on Reuters Screen LIBO
Page as the London interbank offered rate for deposits in Dollars at
approximately 11:00 a.m. (London time) two Business Days prior to the first day
of such Interest Period for a term comparable to such Interest Period; provided,
however, if more than one rate is specified on the Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"License" means, as to any Person, any license, permit, certificate of
need, authorization, orders, certification, accreditation, franchise, approval,
or grant of rights by any Tribunal or third person necessary or appropriate for
such Person to own, maintain, or operate its business or Property, unless the
failure to obtain, retain, or comply with same would not constitute a Material
Adverse Change.
"Lien" means any mortgage, pledge, security interest, encumbrance,
lien, or charge of any kind, including without limitation any agreement to give
or not to give any of the foregoing, any conditional sale or other title
retention agreement, any lease in the nature thereof, and the filing of or
agreement to give any financing statement or other similar form of public notice
under any Laws (except for the filing of a financing statement or notice in
connection with an Operating Lease).
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"Litigation" means any proceeding, claim, lawsuit, arbitration, and/or
investigation conducted or threatened by or before any Tribunal, including
without limitation proceedings, claims, lawsuits, and/or investigations under or
pursuant to any environmental, occupational, safety and health, antitrust,
unfair competition, securities, Tax, or other Law, or under or pursuant to any
contract, agreement, or other instrument.
"Loan Papers" means this Agreement; the Notes; any Interest Rate Hedge
Agreements executed between Company and any Lender or Bank Affiliate; all
Guaranty Agreements; each Assignment and Acceptance; all promissory notes
evidencing any portion of the Obligations; and all other documents, instruments,
agreements or certificates executed or delivered by Company or any of its
Subsidiaries, as security for Company's obligations hereunder, in connection
with the loans to Company or otherwise; as each such document shall, with the
consent of Lenders pursuant to the terms hereof, be amended, revised, renewed,
extended, substituted or replaced from time to time.
"Majority Lenders" means any combination of Lenders having at least
66.67% of the Advances under the Revolving Loan; provided, however, that if no
Advances under the Revolving Loan are outstanding under this Agreement, such
term means any combination of Lenders having a Specified Percentage equal to at
least 66.67% of the Commitment.
"Management Fees" means all fees from time to time directly or
indirectly paid or payable by Company or any Subsidiary of Company to any Person
for management services for managing any portion of any Property.
"Material Adverse Change" or "Material Adverse Effect" means any
circumstance or event that (a) can reasonably be expected to cause a Default or
an Event of Default, (b) otherwise can reasonably be expected to (i) be material
and adverse to the continued operation of any Company and its Subsidiaries taken
as a whole, or (ii) be material and adverse to the financial condition, business
operations, prospects or Properties of Company and its Subsidiaries taken as a
whole, or (c) in any manner whatsoever does or can reasonably be expected to (i)
materially and adversely affect the validity or enforceability of any material
provision of any of the Loan Papers or (ii) materially and adversely affect the
ability of Company or any Subsidiary of Company to perform its obligations under
the Loan Papers executed by it.
"Maturity Date" means the earliest of (a) May 29, 1998, (b) the Amended
and Restated Credit Agreement Commitment Increase Date, (c) the date that
Company obtains other material financing, and (d) the date all of the
Obligations become due and payable (whether by acceleration, prepayment in full,
scheduled reduction or otherwise).
"Maximum Amount" means the maximum amount of interest which, under
Applicable Law, Administrative Agent or any Lender is permitted to charge on the
Obligations.
"Moody's" means Moody's Investors Service, Inc.
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"Multiemployer Plan" means a multiemployer plan, as defined in Section
4001(a)(3) of ERISA, to which Company, any Subsidiary of Company, or any ERISA
Affiliate is making or accruing an obligation to make contributions, or has
within any of the preceding five plan years made or accrued an obligation to
make contributions, such plan being maintained pursuant to one or more
collective bargaining agreements.
"Multiple Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, that (a) is maintained for employees of Company,
any Subsidiary of Company, or any ERISA Affiliate and at least one Person other
than Company, any Subsidiary of Company, and any ERISA Affiliate, or (b) was so
maintained and in respect of which Company, any Subsidiary of Company, or any
ERISA Affiliate could have liability under Section 4064 or 4069 of ERISA in the
event such plan has been or were to be terminated.
"Net Cash Proceeds" means with respect to any offering or other
disposition of Capital Stock by any Person, the aggregate amount of cash
received by such Person in connection with such transaction minus reasonable
fees, costs and expenses and related Taxes.
"Net Worth" means, at any time, the shareholders' equity of Company and
its Consolidated Subsidiaries, determined on a consolidated basis in accordance
with GAAP at such time.
"Note" means each and "Notes" means all (a) Revolving Loan Notes, and
(b) Bid Rate Loan Notes.
"Obligations" means all present and future obligations, indebtedness
and liabilities, and all renewals and extensions of all or any part thereof, of
Company and each Subsidiary of Company to any Lender or Administrative Agent
arising from, by virtue of, or pursuant to this Agreement, any of the other Loan
Papers and any and all renewals and extensions thereof or any part thereof, or
future amendments thereto, all interest accruing on all or any part thereof and
reasonable attorneys' fees incurred by Lenders and Administrative Agent for the
administration, execution of waivers, amendments and consents, and in connection
with any restructuring, workouts or in the enforcement or the collection of all
or any part thereof, whether such obligations, indebtedness and liabilities are
direct, indirect, fixed, contingent, joint, several or joint and several.
Without limiting the generality of the foregoing, "Obligations" includes all
amounts which would be owed by Company, each Subsidiary of Company and any other
Person (other than Administrative Agent or Lenders) to Administrative Agent or
Lenders under any Loan Paper, but for the fact that they are unenforceable or
not allowable due to the existence of a bankruptcy, reorganization or similar
proceeding involving Company, any Subsidiary of Company or any other Person
(including all such amounts which would become due but for the filing of any
petition in bankruptcy, or the commencement of any insolvency, reorganization or
like proceeding of Company, any Subsidiary of Company or any other Person under
any Debtor Relief Law).
"Operating Leases" means operating leases, as defined in accordance
with GAAP.
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"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
agency or entity performing substantially the same functions.
"Permitted Distributions" means, for Company for any fiscal year of
Company, an amount not to exceed 95% of Cash Flow From Operations for such
fiscal year, commencing with the 1996 fiscal year of Company.
"Permitted Liens" means
(a) those imposed by the Loan Papers (as defined in this
Agreement) or by the Loan Papers (as defined in the Amended and
Restated Credit Agreement);
(b) Liens in connection with workers' compensation,
unemployment insurance or other social security obligations (which
phrase shall not be construed to refer to ERISA);
(c) deposits, pledges or liens to secure the performance of
bids, tenders, contracts (other than contracts for the payment of
borrowed money), leases, statutory obligations, surety, customs,
appeal, performance and payment bonds and other obligations of like
nature arising in the ordinary course of business;
(d) mechanics', workmen's, carriers, warehousemen's,
materialmen's, landlords' or other like Liens arising in the ordinary
course of business with respect to obligations which are not due or
which are either (i) being contested in good faith and by appropriate
proceedings diligently conducted (including, if applicable, by a Tenant
of a Property as required under the Lease relating thereto or by a
mortgagor under a Funded Mortgage as required thereby) and in respect
of which adequate reserves shall have been established in accordance
with GAAP on the books of Company or of its Subsidiaries or (ii) the
obligation of a Tenant of a Property under its Lease or of a mortgagor
under a Funded Mortgage and Company or any of its Subsidiaries has made
a demand upon such Tenant or mortgagor to pay amounts owed in order to
remove such Liens; provided that if the Tenant fails to pay such
amounts then Company or its Subsidiary, as applicable, shall promptly
take all necessary action to remove such Liens;
(e) Liens for taxes, assessments, fees or governmental charges
or levies not delinquent or to the extent that payment hereof is either
(i) being contested in good faith and by appropriate proceedings
diligently conducted (including, if applicable, by a Tenant of a
Property as required under the Lease relating thereto or by a mortgagor
under a Funded Mortgage as required thereby), and in respect of which
adequate reserves shall have been established in accordance with GAAP
on the books of Company or any Subsidiary of Company or (ii) the
obligation of a Tenant of Property under its Lease or of a mortgagor
under a Funded Mortgage and Company or any of its Subsidiaries has made
a demand upon such Tenant or mortgagor to pay amounts owed in order to
remove such Liens; provided that
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if the Tenant fails to pay such amounts then Company or its Subsidiary,
as applicable, shall promptly take all necessary action to remove such
Liens;
(f) easements, rights of way, restrictions, leases of Property
to others, easements for installations of public utilities, title
imperfections and restrictions, zoning ordinances and other similar
encumbrances affecting Property which in the aggregate do not
materially adversely affect the value of such Property or materially
impair its use for the operation of the business of Company or any
Subsidiary of Company.
(g) Liens on Property acquired by Company or any of its
Subsidiaries in the ordinary course of business, securing Indebtedness
of Company or any of its Subsidiaries incurred or assumed for the
purpose of financing all or part of the cost of acquiring such
Property; provided that (i) such Lien attaches solely to the Property
so acquired in such transaction, (ii) such Lien attaches to such
Property concurrently with or within 30 days after the acquisition
thereof, (iii) such Property is used in the business of Company or any
of its Subsidiaries, (iv) the amount of Indebtedness secured by Lien
shall not exceed 100% of the cost of such Property, and (v) such
Indebtedness is permitted to be incurred hereunder and would not
otherwise result in a Default or Event of Default hereunder; and
(h) Liens on the Property constituting Company's executive
offices located in Scottsdale, Arizona, securing Indebtedness for the
acquisition, construction or improvement thereof.
"Person" means an individual, partnership, joint venture, corporation,
trust, Tribunal, unincorporated organization, and government, or any department,
agency, or political subdivision thereof.
"Plan" means a Single Employer Plan or a Multiple Employer Plan.
"Prohibited Transaction" has the meaning specified therefor in Section
4975 of the Code or Section 406 of ERISA.
"Property" means all types of real, personal, tangible, intangible, or
mixed property, whether owned in fee simple or leased.
"Quarterly Date" means the last Business Day of each March, June,
September and December during the term of this Agreement, commencing on March
31, 1998.
"Ratable" means, as to any Lender, in accordance with its Specified
Percentage.
"Real Estate Investment Trust means the classification for federal tax
purposes as a real estate investment trust pursuant to Part II, Subchapter M of
Chapter 1 of the Code.
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"Refinancing Advance" means an Advance that is used to pay the
principal amount of an existing Advance (or any performance thereof) at the end
of its Interest Period and which, after giving effect to such application, does
not result in an increase in the aggregate amount of outstanding Advances.
"Regulatory Change" means any change after the date hereof in federal,
state, or foreign Laws (including the introduction of any new Law) or the
adoption or making after such date of any interpretations, directives, or
requests of or under any federal, state, or foreign Laws (whether or not having
the force of Law) by any Tribunal charged with the interpretation or
administration thereof, applying to a class of financial institutions that
includes any Lender.
"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.
"Restricted Payments" means (a) any direct or indirect distribution,
Distribution or other payment on account of any general or limited partnership
interest in (or the setting aside of funds for, or the establishment of a
sinking fund or analogous fund with respect to), or shares of Capital Stock or
other securities of, Company or any Subsidiary of Company; (b) any payments of
principal of, or interest on, or fees related to, or any other payments and
prepayments with respect to, or the establishment of, or any payment to, any
sinking fund or analogous fund for the purpose of making any such payments on,
Indebtedness of Company or any Subsidiary of Company (including, without
limitation, Debt evidenced by the Intercompany Notes, but excluding the
Obligations); (c) any Management Fee or any management, consulting or other
similar fees, or any interest thereon, payable by Company or any of its
Subsidiaries to any Affiliate of Company; and (d) any administration fee or any
administration, consulting or other similar fees, or any interest thereon,
payable by Company or any of its Subsidiaries to any Affiliate of Company or to
any other Person.
"Retained Securities" means any class of securities or portion thereof
purchased or retained by the Company or any Subsidiary from any corporation,
trust or other entity in conjunction with any Asset Securitization.
"Revolving Loan" means that certain Revolving Loan made to Company on
the Closing Date until the Maturity Date in accordance with Section 2.1(a)
hereof.
"Revolving Loan Note" means each promissory note of Company evidencing
the Advances and obligations owing hereunder to each Lender under the Revolving
Loan, in substantially the form of Exhibit A hereto, as each such note may be
amended, extended, restated, renewed, substituted or
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replaced from time to time.
"Rights" means rights, remedies, powers, and privileges.
"S&P" means Standard & Poor's Ratings Group, a Division of McGraw-Hill,
Inc., a New York corporation.
"Single Employer Plan" means a single employer plan, as defined in
Section 4001(a)(15) of ERISA, other than a Multiple Employer Plan, that is
maintained for employees of Company or any ERISA Affiliate.
"Solvent" means, with respect to any Person, that on such date (a) the
fair value of the Property of such Person is greater than the total amount of
liabilities, including, without limitation, Contingent Liabilities of such
Person, (b) the present fair salable value of the assets of such Person is not
less than the amount that will be required to pay the probable liability of such
Person on its debts as they become absolute and matured, (c) such Person does
not intend to, and does not believe that it will, incur debts or liabilities
beyond such Person's ability to pay as such debts and liabilities mature, and
(d) such Person is not engaged in business or a transaction, and is not about to
engage in business or a transaction, for which such Person's Property would
constitute an unreasonably small capital.
"Special Counsel" means the law firm of Donohoe, Jameson & Carroll,
P.C., Dallas, Texas, special counsel to Administrative Agent, or such other
counsel selected by Administrative Agent from time to time.
"Specified Percentage" means, as to any Lender, the percentage
indicated beside its name on the signature pages hereof, or as adjusted or
specified in any Assignment and Acceptance, or amendment to this Agreement.
"Structuring Fee" means the fee described in Section 2.10(b) hereof.
"Subordination Agreement" means a subordination agreement substantially
in the form of Exhibit G hereto, as amended, modified or supplemented from time
to time.
"Subsidiary" of any Person means
(a) any corporation, partnership, joint venture, trust, estate
or other Person of which (or in which) more than 50% of:
(i) the outstanding Capital Stock having voting power
to elect a majority of the Board of Directors of such
corporation (or other Persons performing similar functions of
such entity, and irrespective of whether at the time Capital
Stock of any
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other class or classes of such corporation shall or might have
voting power upon the occurrence of any contingency),
(ii) the interest in the capital or profits of such
partnership or joint venture,
(iii) the beneficial interest of such trust or
estate, or
(iv) the equity interest of such other Person,
is at the time directly or indirectly owned by (A) such Person, (B)
such Person and one or more of its Subsidiaries or (C) one or more of
such Person's Subsidiaries, and
(b)any corporation which is a non-qualified REIT Subsidiary
under the Code of which more than 50% of the non-voting preferred
Capital Stock is at the time directly or indirectly owned by (i) such
Person, (ii) such Person and one or more of its Subsidiaries or (iii)
one or more of such Person's Subsidiaries; provided, however,
Subsidiary does not mean or include any Asset Securitization Affiliate.
"Taxes" means all taxes, assessments, imposts, fees, or other charges
at any time imposed by any Laws or Tribunal.
"Tenants" means any and all tenants, licensees, occupants,
concessionaires or other Person or Persons possessing, occupying or otherwise
using or having a right to use, any space at Property of Company or its
Subsidiaries and giving or paying rent or other consideration, whether under
written agreement or otherwise.
"Total Assets" means, at any time, all assets (calculated without any
deduction for accumulated depreciation) of Company and its Consolidated
Subsidiaries determined on a consolidated basis in accordance with GAAP at such
time.
"Total Indebtedness" means, without duplication, with respect to
Company and its Consolidated Subsidiaries, the sum of all Indebtedness of
Company and its Consolidated Subsidiaries, excluding Indebtedness evidenced by
the Intercompany Notes (which Debt is subject to a Subordination Agreement),
calculated on a consolidated basis in accordance with GAAP.
"Total Secured Indebtedness" means, at any time, the aggregate amount
of Indebtedness of Company and its Consolidated Subsidiaries determined in
accordance with GAAP on a consolidated basis that is secured solely by a
Consensual Lien.
"Total Unencumbered Assets" means, at any time, the aggregate amount of
Total Assets of Company and its Consolidated Subsidiaries determined in
accordance with GAAP on a consolidated
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basis which are not subject to a Lien, other than Permitted Liens of the type
described in clauses (a) through (f) of the definition thereof.
"Total Unsecured Indebtedness" means, at any time, the aggregate amount
of Indebtedness of Company and its Consolidated Subsidiaries that is not secured
by a Lien, other than Permitted Liens of the type described in clauses (a)
through (f) of the definition thereof.
"Tribunal" means any state, commonwealth, federal, foreign,
territorial, or other court or government or regulatory body, subdivision,
agency, department, commission, board, bureau, or instrumentality of a
governmental body.
"Type" refers to the distribution between Advances bearing interest at
the Base Rate, LIBOR Rate, Absolute Bid Rate or LIBOR Bid Rate.
"UCC" means the Uniform Commercial Code as adopted in the State of
Texas.
"Unused Commitment" means, on any date, with respect to each Lender, an
amount equal to the product of such Lender's Specified Percentage multiplied by
the Commitment in effect on such date, minus an amount equal to the sum of (a)
all outstanding Advances made by such Lender under the Revolving Loan which are
outstanding on such date and (b) all Bid Rate Loans made by such Lender which
are outstanding on such date.
"Withdrawal Liability" has the meaning given such term under Part I of
Subtitle E of Title IV of ERISA.
1.2. Accounting and Other Terms. All accounting terms used in this
Agreement which are not otherwise defined herein shall be construed in
accordance with GAAP consistently applied on a consolidated basis for Company
and its Consolidated Subsidiaries, unless otherwise expressly stated herein.
References herein to one gender shall be deemed to include all other genders.
Except where the context otherwise requires, all references to time are deemed
to be Dallas, Texas time.
ARTICLE II. AMOUNTS AND TERMS OF ADVANCES
2.1. (a) Advances Under the Revolving Loan. Each Lender severally
agrees,on the terms and subject to the conditions hereinafter set forth, to make
Advances under the Revolving Loan to Company on any Business Day during the
period from the Closing Date until the Maturity Date, in an aggregate principal
amount not to exceed at any time outstanding such Lender's Specified Percentage
of the Commitment. Subject to the terms and conditions of this Agreement, until
the Maturity Date, Company may borrow, repay and reborrow the Advances under the
Revolving Loan. Notwithstanding anything in this Section 2.1(a) or Section
2.1(b) to the contrary, at no time shall the sum of (i) the aggregate principal
amount of Advances outstanding under the Revolving Loan and
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(ii) the aggregate principal amount of Bid Rate Loans outstanding exceed the
Commitment.
(b) Bid Rate Loans. Each Lender may, in its sole discretion and on the
terms and conditions set forth in this Agreement, make Bid Rate Loans to Company
from time to time until the Maturity Date in an aggregate amount not in excess
of the difference between (x) the product of 100% multiplied by the Commitment
minus (y) the aggregate outstanding principal amount of all Bid Rate Loans;
provided, however, at no time shall the sum of (i) the aggregate outstanding
principal amount of all Bid Rate Loans made by all Banks plus (ii) the aggregate
principal amount of all outstanding Advances under the Revolving Loan exceed the
Commitment. Each Bid Rate Loan shall be for a term of not less than 7 days and
not more than six months. Bid Rate Loans may not be prepaid without the prior
written consent of the Lender making such Bid Rate Loan. Each Borrowing of Bid
Rate Loans shall be an aggregate principal amount which is at least $5,000,000
and which is an integral multiple of $1,000,000 in excess thereof, and each Bid
Rate Loan by a Lender shall be in a principal amount which is at least
$1,000,000 and which is an integral multiple of $1,000,000 in excess thereof. No
Lender shall have any obligation to make Bid Rate Loans, and Company shall have
no obligation to accept any offers for Bid Rate Loans.
2.2. Making Advances.
(a) Each Borrowing of Advances under the Revolving Loan shall be made
upon the written notice of Company, received by Administrative Agent not later
than (i) 12:00 noon three Business Days prior to the proposed date of the
Borrowing, in the case of LIBOR Advances and (ii) not later than 10:00 a.m. on
the date of such Borrowing, in the case of Base Rate Advances. Each such notice
of a Borrowing (a "Borrowing Notice") shall be by telecopy, promptly confirmed
by letter, in substantially the form of Exhibit E hereto specifying therein:
(i) the date of such proposed Borrowing, which shall be a
Business Day;
(ii) the amount of such proposed Borrowing which, (A) with
respect to Advances under the Revolving Loan, shall not exceed the
Commitment less the sum of Advances under the Revolving Loan plus Bid
Rate Loans then outstanding, and (B) shall, for the Revolving Loan in
the case of a Borrowing of LIBOR Advances, be in an amount of not less
than $5,000,000 or an integral multiple of $1,000,000 in excess thereof
and, in the case of a Borrowing of Base Rate Advances, be in an amount
of not less than $1,000,000 or an integral multiple of $500,000 in
excess thereof;
(iii) the Type of Advances of which the Borrowing is to be
comprised; and
(iv) if the Borrowing is to be comprised of LIBOR Advances,
the duration of the initial Interest Period applicable to such
Advances.
If the Borrowing Notice fails to specify the duration of the initial
Interest Period for any
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Borrowing comprised of LIBOR Advances, such Interest Period shall be one month.
Administrative Agent shall give prompt notice (which may be by telecopy or
telephonic, to be confirmed by telecopy) of its receipt of a Borrowing Notice to
each Lender. Each Lender shall, before 2:00 p.m. on the date of each Advance
hereunder under the Revolving Loan (other than a Refinancing Advance), make
available to
Administrative Agent
NationsBank Plaza
901 Main Street
14th Floor
Dallas, Texas 75202
Attn. Theresa Belk
such Lender's Specified Percentage of the aggregate Advances under the Revolving
Loan to be made on that day in immediately available funds.
(b) Unless any applicable condition specified in Article III hereof has
not been satisfied, Administrative Agent will make the funds on Advances under
the Revolving Loan promptly available to Company (other than with respect to a
Refinancing Advance) by wiring Norwest Bank Minneapolis, N.A., ABA #091000019,
Beneficiary Bank: Norwest Bank Arizona, Beneficiary Account: 8711701002,
Beneficiary Name: FFCA, or such other account as shall have been specified by
Company.
(c) After giving effect to any Borrowing, (i) there shall not be more
than ten different Interest Periods in effect and (ii) the aggregate principal
of outstanding Advances, shall not exceed the Commitment.
(d) No Interest Period for a Borrowing under the Facility shall extend
beyond the Maturity Date.
(e) Unless a Lender shall have notified Administrative Agent prior to
the date of any Advance under the Revolving Loan that it will not make available
its Specified Percentage of any such Advance, Administrative Agent may assume
that such Lender has made the appropriate amount available in accordance with
Section 2.2(a), and Administrative Agent may, in reliance upon such assumption,
make available to Company a corresponding amount. If and to the extent any
Lender shall not have made such amount available to Administrative Agent, such
Lender and Company severally agree to repay to Administrative Agent immediately
on demand such corresponding amount together with interest thereon, from the
date such amount is made available to Company until the date such amount is
repaid to Administrative Agent, at (i) in the case of Company, the Base Rate,
and (ii) in the case of such Lender, the Federal Funds Rate. The obligation of
Company under this Section 2.2(e) shall not affect or impair any right of
Company against any Lender for such Lender's breach of its obligation to fund
Advances under the Revolving Loan.
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(f) The failure by any Lender to make available its Specified
Percentage of any Advance under the Revolving Loan shall not relieve any other
Lender of its obligation, if any, to make available its Specified Percentage of
any such Advance. In no event, however, shall any such Lender be responsible for
the failure of any other Lender to make available any portion of any Advance. No
Lender shall be relieved of its obligation to fund its Specified Percentage of
any Advance under the Revolving Loan notwithstanding the fact that at any time
the aggregate outstanding principal amount of all Bid Rate Loans and Advances
under the Revolving Loan made by such Lender exceeds its Specified Percentage of
the Commitment.
(g) Company shall indemnify each Lender against any Consequential Loss
incurred by each Lender as a result of (i) any failure to fulfill, on or before
the date specified in the Borrowing Notice for an Advance under the Revolving
Loan, the conditions to such Advance set forth herein or (ii) Company's
requesting that an Advance under the Revolving Loan not be made on the date
specified in the Borrowing Notice.
(h) With respect to each Borrowing consisting of Bid Rate Loans,
Company shall give Administrative Agent and each Lender prior to 10:00 a.m., (i)
in the case of LIBOR Bid Rate Loans, at least four Business Days prior to the
proposed Borrowing and (ii) in the case of Absolute Bid Rate Loans, at least two
Business Days prior to the proposed Borrowing, irrevocable written notice of its
intention to borrow Bid Rate Loans. Such notice of borrowing shall specify (i)
the requested funding date, which shall be a Business Day, (ii) the aggregate
amount of the proposed Borrowing of Bid Rate Loans (which shall be at least
$5,000,000 and which is an integral multiple of $1,000,000 in excess thereof),
(iii) the term of the Bid Rate Loans selected by Company, provided that such
term shall not extend past the Maturity Date, (iv) whether the Bid Rate Loans
requested are Absolute Bid Rate Loans or LIBOR Bid Rate Loans, and (v) any other
terms applicable thereto. Company shall pay a $1,000 non-refundable,
administrative fee for the account of Administrative Agent for each notice of
proposed Borrowing consisting of Bid Rate Loans. Such fee shall be paid to
Administrative Agent on the date of delivery of Company's notice of intention to
borrow Bid Rate Loans, and shall not be refunded notwithstanding that the
proposed Borrowing is canceled by Borrower or no Lender offers to make a Bid
Rate Loan.
(i) Each Lender shall, if, in its sole discretion, it elects
to do so, irrevocably offer to make one or more Bid Rate Loans to
Company as part of such proposed Borrowing at a rate or rates of
interest specified by such Lender in its sole discretion, by delivering
a written quote to Administrative Agent before 10:00 a.m., (A) three
Business Days prior to the proposed date of Borrowing, in the case of a
request for LIBOR Bid Rate Loans, and (B) one Business Day prior to the
proposed date of Borrowing, in the case of a request for Absolute Bid
Rate Loans, setting forth (A) the minimum amount (which shall be
$1,000,000 or an integral multiple in excess thereof) and maximum
amount of each Bid Rate Loan which such Lender would be willing to make
as part of the proposed Borrowing (which amounts may exceed such
Lender's Specified Percentage of the Commitment) and (B) the rate or
rates of interest therefor. If any Lender shall fail to respond to
Administrative Agent by such time,
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<PAGE>
such Lender shall be deemed to have elected not to make an offer.
(ii) Not later than 11:00 a.m. (A) three Business Days prior
to the proposed date of Borrowing in the case of LIBOR Bid Rate Loans
and (B) on the date of the proposed Borrowing in the case of Absolute
Bid Rate Loans, Company shall, in turn, either
(A) cancel such proposed Borrowing by giving
Administrative Agent notice to that effect, or
(B) accept one or more of the offers made by any
Lender or Lenders pursuant to clause (i) above, in its sole
discretion, by giving notice to Administrative Agent of the
amount of each Bid Rate Loan (which amount shall be equal to
or greater than the minimum amount, and equal to or less than
the maximum amount, for which notification was given to
Company by any Lender for such Bid Rate Loan pursuant to
clause (i) above) to be made by each Lender as part of such
Borrowing, and reject any remaining offers made by Lenders
pursuant to clause (i) above by giving Administrative Agent
notice to that effect; provided, however, that acceptance by
Company of offers may only be made on the basis of ascending
LIBOR Bid Rates and Absolute Bid Rates within each term with
respect to Lenders whose outstanding Advances do not exceed or
would not exceed as a result of such Bid Rate Loans its
Specified Percentage of the Commitment; and, provided,
further, that if offers are made by two or more such Lenders
with the same LIBOR Bid Rates or Absolute Bid Rates for a
greater aggregate principal amount than the amount for which
such offers are accepted for the related term, the principal
amount of Bid Rate Loans accepted shall be allocated by
Company among such Lenders as nearly as possible (in multiples
not less than $1,000,000) in proportion to the aggregate
principal amount of such offers.
(iii) Administrative Agent shall promptly notify each bidding
Lender whether or not its Bid Rate Loan has been accepted (which notice
to those Lenders whose Bid Rate Loans have been accepted will be given
within one hour from the time such bid was accepted by Company). After
completing the notifications referred to in the immediately preceding
sentence, Administrative Agent shall notify each bidding Lender (A) the
aggregate amount of Bid Rate Loans made in connection with such
proposed Borrowing, (B) each date on which any Bid Rate Loan shall
mature, (C) the principal amount of Bid Rate Loans which shall mature
on each such date, (D) the interest rate for each such Bid Rate Loan,
(E) the highest and lowest bid submitted by Lenders in connection with
each Bid Rate Loan request and (F) Lender making each such Bid Rate
Loan.
(iv) If Administrative Agent shall at any time elect to submit
a bid for a Bid Rate Loan in its capacity as a Lender, it shall submit
such bid directly to Company one-half hour earlier than the latest time
at which other Lenders are required to submit their bid to
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Administrative Agent pursuant to Section 2(h)(i) hereof.
(v) If Company accepts one or more offers made by any Lender
or Lenders pursuant to clause (ii)(B) above, each such Lender shall,
unless any applicable condition specified in Article III hereof has not
been satisfied, make the funds under the Bid Rate Loans promptly
available to Company by wiring Norwest Bank Minneapolis, N.A., ABA #
091000019, Beneficiary Bank: Norwest Bank Arizona, Beneficiary Account:
8711701002, Beneficiary Name: FFCA, or such other account as shall have
been specified by Company.
2.3. Evidence of Indebtedness.
(a) The obligations of Company with respect to all Advances (i) under
the Revolving Loan made by each Lender shall be evidenced by a Revolving Loan
Note in the amount of such Lender's Specified Percentage of $100,000,000 (as the
same may be modified pursuant to Section 9.4 hereof), and (ii) in respect of Bid
Rate Loans made by each Lender shall be evidenced by a Bid Rate Note in the
principal amount not to exceed $100,000,000.
(b) Absent demonstrable error, Administrative Agent's and each Lender's
records shall be conclusive as to amounts owed Administrative Agent and such
Lender under the Notes and this Agreement.
2.4. Reduction of Commitment.
(a) Voluntary Commitment Reduction. Company shall have the right from
time to time upon notice by Company to Administrative Agent not later than 1:00
p.m., five Business Days in advance, to reduce the Commitment, in whole or in
part; provided, however, that Company shall pay the accrued and unpaid
Commitment Fee on the amount of such reduction, if any, and any partial
reduction shall be in an aggregate amount which is not less than $1,000,000 and
an integral multiple of $500,000. Such notice shall specify the amount of
reduction and the proposed date of such reduction.
(b) Mandatory Commitment Reduction or Termination.
(i) Scheduled Reduction. The Commitment shall be terminated on
the Maturity Date.
(ii) Asset Sales. On the date of any Asset Sale by Company or
any Subsidiary of Company which (A) occurs on a date on which the
Amended and Restated Credit Agreement is no longer in effect and (B) is
not otherwise permitted to be made pursuant to Section 6.6 hereof, the
Commitment shall be automatically and permanently reduced by an amount
equal to the amount by which the Asset Sale Proceeds of such Asset Sale
exceeds the amount not otherwise permitted pursuant to Section 6.6
hereof.
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(c) Commitment Reductions, Generally. To the extent that the sum of the
aggregate outstanding (i) Advances under the Revolving Loan plus (ii) Bid Rate
Loans exceed the Commitment after any reduction thereof, Company shall
simultaneously repay on the date of such reduction, any such excess amount and
all accrued interest thereon, together with any amounts constituting any
Consequential Loss. Once reduced or terminated pursuant to this Section 2.4, the
Commitment may not be increased or reinstated.
2.5. Prepayments.
(a) Optional Prepayments. Company may, upon at least three Business
Days prior written notice to Administrative Agent stating the proposed date and
aggregate principal amount of the prepayment, prepay the outstanding principal
amount of any Advances in whole or in part, together with accrued interest to
the date of such prepayment on the principal amount prepaid without premium
other than any Consequential Loss; provided, however, that in the case of a
prepayment of a Base Rate Advance, the notice of prepayment may be given by
telephone by 11:00 a.m. on the date of prepayment. Each partial prepayment
shall, in the case of Base Rate Advances, be in an aggregate principal amount of
not less than $1,000,000 or a larger integral multiple of $500,000 in excess
thereof and, in the case of LIBOR Advances, be in an aggregate principal amount
of not less than $5,000,000 or a larger integral multiple of $1,000,000 in
excess thereof. If any notice of prepayment is given, the principal amount
stated therein, together with accrued interest on the amount prepaid and the
amount, if any, due under Sections 2.11 and 2.13 hereof, shall be due and
payable on the date specified in such notice.
(b) Mandatory Prepayments. On the date of any Asset Sale by Company or
any Subsidiary of Company (x) after termination of the Amended and Restated
Credit Agreement and (y) in which the Asset Sale Proceeds thereof exceed
$3,000,000, Company shall make a mandatory prepayment of Advances under the
Revolving Loan in an amount equal to the amount by which the Asset Sale Proceeds
of such Asset Sale exceeds $3,000,000. On the date of any Asset Sale of Company
or any Subsidiary of Company which (x) occurs on a date on which the Amended and
Restated Credit Agreement is no longer in effect and (y) is not otherwise
permitted to be made pursuant to Section 6.6 hereof, Company shall make a
mandatory prepayment of Advances under the Revolving Loan by an amount equal to
the amount by which the Asset Sale Proceeds of such Asset Sale exceeds the
amount not otherwise permitted pursuant to Section 6.6 hereof.
(c) Prepayments, Generally. No prepayments of Advances under the
Revolving Loan made pursuant to Section 2.5(a) or the first sentence of Section
2.5(b) shall cause the Commitment to be reduced. Any prepayment of Advances
under the Revolving Loan pursuant to the second sentence of Section 2.5(b) shall
cause the Commitment to be automatically and permanently reduced by the amount
of such required prepayment. Any prepayment of Advances pursuant to this Section
2.5 shall be applied first to Base Rate Advances, if any, then outstanding under
the Facility, second to LIBOR Advances for which the date of prepayment is the
last day of the applicable Interest
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Period, if any, outstanding under the Facility and third to LIBOR Advances with
the shortest remaining Interest Periods outstanding under the Facility.
2.6. Repayment.
(a) The Revolving Loan. (i) On the date of a reduction of the
Commitment pursuant to Section 2.4 hereof, to the extent the aggregate
outstanding Advances under the Revolving Loan on the date of reduction exceed
the Commitment as reduced, such excess amounts shall be immediately due and
payable, which principal payment may not be made by means of a Refinancing
Advance and (ii) Advances outstanding under the Revolving Loan are due and
payable in full on the Maturity Date.
(b) Bid Rate Loans. Company shall repay Bid Rate Loans at such time as
agreed upon between Company and each Lender making Bid Rate Loans pursuant to
Section 2.2(h).
(c) Other Obligations. Except if an earlier date is otherwise provided
in this Agreement, all Obligations not otherwise due and payable under Sections
2.6(a) and 2.6(b) above shall be due and payable in full on the Maturity Date.
2.7. Interest. Subject to Section 2.8 below, Company shall pay interest
on the unpaid principal amount of each Advance from the date of such Advance
until such principal shall be paid in full, at the following rates:
(a) Base Rate Advances. Base Rate Advances shall bear interest at a
rate per annum equal to the lesser of (i) the Base Rate as in effect from time
to time and (ii) the Highest Lawful Rate. If the amount of interest payable in
respect of any interest computation period is reduced to the Highest Lawful Rate
pursuant to the immediately preceding sentence and the amount of interest
payable in respect of any subsequent interest computation period would be less
than the Maximum Amount, then the amount of interest payable in respect of such
subsequent interest computation period shall be automatically increased to
Maximum Amount; provided that at no time shall the aggregate amount by which
interest paid has been increased pursuant to this sentence exceed the aggregate
amount by which interest has been reduced pursuant to the immediately preceding
sentence.
(b) LIBOR Advances. LIBOR Advances shall bear interest at the rate per
annum equal to the LIBOR Rate applicable to such Advance, which at no time shall
exceed the Highest Lawful Rate.
(c) Payment Dates. Accrued and unpaid interest on Base Rate Advances
shall be paid quarterly in arrears on each Quarterly Date and on the appropriate
maturity, repayment or prepayment date. Accrued and unpaid interest on LIBOR
Advances shall be paid on the last day of the appropriate Interest Period and on
the date of any prepayment or
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repayment of such Advance; provided, however, that if any Interest Period for a
LIBOR Advance exceeds three months, interest shall also be paid on each date
occurring during the Interest Period which is the three month anniversary date
of the first day of the Interest Period.
(d) Bid Rate Loans. Bid Rate Loans shall bear interest at the rate per
annum agreed to by Company and each Lender making Bid Rate Loans pursuant to
Section 2.2(h). Interest on each Bid Rate Loan shall be computed and shall be
payable at such times as agreed upon between Company and each Lender making Bid
Rate Loans pursuant to Section 2.2(h).
2.8. Default Interest. During the continuation of any Event of Default,
Company shall pay, on demand, interest (after as well as before judgment to the
extent permitted by Law) on the principal amount of all Advances outstanding and
on all other Obligations due and unpaid hereunder for each Advance equal to the
lesser of the (a) the Highest Lawful Rate and (b) the Base Rate (whether or not
in effect) plus 3.00%.
2.9. Continuation and Conversion Elections.
(a) Company may upon irrevocable written notice to Administrative Agent
and subject to the terms of this Agreement:
(i) elect to convert, on any Business Day, all or any portion
of outstanding Base Rate Advances (in an aggregate amount not less than
$5,000,000 or a larger integral multiple of $1,000,000 in excess
thereof) into LIBOR Advances.
(ii) elect to convert at the end of any Interest Period
therefor, all or any portion of outstanding LIBOR Advances comprised of
the same Borrowing (in an aggregate amount not less than $1,000,000 or
a larger integral multiple of $500,000 in excess thereof) into Base
Rate Advances; or
(iii) elect to continue, at the end of any Interest Period
therefor, any LIBOR Advances;
provided, however, that if the aggregate amount of outstanding LIBOR
Advances comprised in the same Borrowing shall have been reduced as a result of
any payment, prepayment or conversion of part thereof to an amount less than
$1,000,000, the LIBOR Advances comprised in such Borrowing shall automatically
convert into Base Rate Advances at the end of each respective Interest Period.
(b) Company shall deliver a notice of conversion or continuation (a
"Notice of Conversion/Continuation"), in substantially the form of Exhibit D
hereto, to Administrative Agent not later than (i) 12:00 noon three Business
Days prior to the proposed date of conversion or
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continuation, if the Advances or any portion thereof are to be converted into or
continued as LIBOR Advances; and (ii) not later than 10:00 a.m. on the proposed
date of conversion or continuation, if the Advances or any portion thereof are
to be converted into Base Rate Advances.
Each such Notice of Conversion/Continuation shall be by telecopy or
telephone, promptly confirmed in writing, specifying therein:
(i) the proposed date of conversion or continuation;
(ii) the aggregate amount of Advances to be converted or
continued;
(iii) the nature of the proposed conversion or continuation;
and
(iv) the duration of the applicable Interest Period.
(c) If, upon the expiration of any Interest Period applicable to LIBOR
Advances, Company shall have failed to select a new Interest Period to be
applicable to such LIBOR Advances or if an Event of Default shall then have
occurred and be continuing, Company shall be deemed to have elected to convert
such LIBOR Advances into Base Rate Advances effective as of the expiration date
of such current Interest Period.
(d) Upon receipt of a Notice of Conversion/Continuation, Administrative
Agent shall promptly notify each Lender thereof. All conversions and
continuations shall be made pro rata among Lenders based on their Specified
Percentage of the respective outstanding principal amounts of the Advances with
respect to which such notice was given held by each Lender.
(e) Notwithstanding any other provision contained in this Agreement,
after giving effect to any conversion or continuation of any Advances, there
shall not be outstanding Advances with more than ten different Interest Periods.
2.10. Fees. (a) Subject to Section 9.8 hereof, Company agrees to pay to
Administrative Agent, for the account of each Lender, a Commitment Fee on the
average daily amount of each Lender's Unused Commitment, from the Closing Date
through the Maturity Date, payable quarterly in arrears on each Quarterly Date
occurring after the Closing Date, with the last such payment due and owing on
the Maturity Date at the following per annum percentage applicable in the
following situations:
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Applicability Percentage
------------- ----------
Category 1 - There is no Index Debt Rating or the 0.375%
Index Debt Rating is the following: below BBB-
by S&P or below Baa3 by Moody's
Category 2 - The Index Debt Rating is the 0.200%
following: BBB-, BBB or BBB+ by S&P or Baa3,
Baa2 or Baa1 by Moody's
Category 3 - The Index Debt Rating is the 0.150%
following: A- or better by S&P or A3 or better
by Moody's
The Commitment Fee shall be (i) fully earned when due and nonrefundable when
paid and (ii) adjusted on each Adjustment Date according to the most recent
determination of the Index Debt Rating. For purposes of the foregoing, if the
Index Debt Rating established by S&P or Moody's shall fall within a different
category, the Commitment Fee shall be determined by reference to whichever Index
Debt Rating shall fall within the inferior (or numerically lower) category.
(b) Subject to Section 9.8 hereof, Company agrees to pay to
Administrative Agent a Structuring Fee equal to $50,000. The Structuring Fee
shall be fully earned when due and non-refundable when paid.
2.11. Funding Losses. If Company makes any payment or prepayment of
principal with respect to any LIBOR Advance (including payments made after any
acceleration thereof) or converts any Advance from a LIBOR Advance on any day
other than the last day of an Interest Period applicable thereto or if Company
fails to prepay, borrow, convert, or continue any LIBOR Advance after a notice
or prepayment, borrowing, conversion or continuation has been given (or is
deemed to have been given) to Administrative Agent, Company shall pay to each
Lender on demand (subject to Section 9.8 hereof) any Consequential Loss.
2.12. Computations and Manner of Payments.
(a) Company shall make each payment not later than 1:00 p.m. on the day
when due in immediately available funds to Administrative Agent, (i) in respect
of the Revolving Loan, for the Ratable account of Lenders unless otherwise
specifically provided herein, and (ii) in respect of the Bid Rate Loans, for the
account of each Lender making Bid Rate Loans, at
Administrative Agent
NationsBank Plaza
901 Main Street
14th Floor
Dallas, Texas 75202
Attn. Theresa Belk
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for the further credit to the account of Franchise Finance Corporation of
America. No later than the end of each day when each payment hereunder is made,
Company shall notify Theresa Belk, telephone (214) 508-9177, facsimile (214)
508-2515, or such other Person as Administrative Agent may from time to time
specify. Notwithstanding anything in this Section 2.16(a) or any other provision
of this Agreement or any other Loan Paper to the contrary, any payment by
Company in respect of any Advances after acceleration of the Advances pursuant
to Section 7.2 or any monies received by Administrative Agent or any Lender as a
result of the exercise of remedies under any Loan Paper after acceleration of
Advances pursuant to Section 7.2 shall be distributed pro rata to each Lender
based on the percentage that the outstanding Advances owed to such Lender bears
to the aggregate Advances owed to all Lenders.
(b) Unless Administrative Agent shall have received notice from Company
prior to the date on which any payment is due hereunder that Company will not
make payment in full, Administrative Agent may assume that such payment is so
made on such date and may, in reliance upon such assumption, make distributions
to Lenders. If and to the extent Company shall not have made such payment in
full, each Lender shall repay to Administrative Agent forthwith on demand the
applicable amount distributed, together with interest thereon at the Federal
Funds Rate, from the date of distribution until the date of repayment. Company
hereby authorizes each Lender, if and to the extent payment is not made when due
hereunder, to charge the amount so due against any account of Company with such
Lender.
(c) Subject to Section 9.8 hereof, interest on Advances, the Commitment
Fee and other amounts due under the Loan Papers shall be calculated on the basis
of actual days elapsed but computed as if each year consisted of 360 days. Such
computations shall be made including the first day but excluding the last day
occurring in the period for which such interest, payment or Commitment Fee is
payable. Each determination by Administrative Agent or a Lender of an interest
rate, fee or commission hereunder shall be conclusive and binding for all
purposes, absent demonstrable error. All payments under the Loan Papers shall be
made in United States dollars, and without setoff, counterclaim, or other
defense.
(d) Reference to any particular index or reference rate for determining
any applicable interest rate under this Agreement is for purposes of calculating
the interest due and is not intended as and shall not be construed as requiring
any Lender to actually fund any Advance at any particular index or reference
rate.
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2.13. Yield Protection.
(a) If any Lender determines that either (i) the adoption, after the
date hereof, of any Applicable Law, rule, regulation or guideline regarding
capital adequacy and applicable to commercial banks or financial institutions
generally or any change therein, or any change, after the date hereof, in the
interpretation or administration thereof by any Tribunal, central bank or
comparable agency charged with the interpretation or administration thereof, or
(ii) compliance by any Lender (or Lending Office of any Lender) with any request
or directive made after the date hereof applicable to commercial banks or
financial institutions generally regarding capital adequacy (whether or not
having the force of law) of any such authority, central bank or comparable
agency has the effect of reducing the rate of return on such Lender's capital as
a consequence of its obligations hereunder to a level below that which such
Lender could have achieved but for such adoption, change or compliance (taking
into consideration such Lender's policies with respect to capital adequacy (but
excluding consequences of such Lender's negligence or intentional disregard of
law or regulation)) by an amount reasonably deemed by such Lender to be
material, then from time to time, within fifteen days after demand by such
Lender, Company shall, subject to Section 9.8 hereof, pay to such Lender such
additional amount or amounts as will adequately compensate such Lender for such
reduction. Each Lender will notify Company of any event occurring after the date
of this Agreement which will entitle such Lender to compensation pursuant to
this Section 2.13(a) as promptly as practicable after such Lender obtains actual
knowledge of such event; provided, no Lender shall be liable for its failure or
the failure of any other Lender to provide such notification. A certificate of
such Lender claiming compensation under this Section 2.13(a), setting forth in
reasonable detail the calculation of the additional amount or amounts to be paid
to it hereunder and certifying that such claim is consistent with such Lender's
treatment of similar customers having similar provisions generally in their
agreements with such Lender shall be conclusive in the absence of demonstrable
error. Each Lender shall use reasonable efforts to mitigate the effect upon
Company of any such increased costs payable to such Lender under this Section
2.13(a).
(b) If, after the date hereof, any Tribunal, central bank or other
comparable authority, at any time imposes, modifies or deems applicable any
reserve (including, without limitation, any imposed by the Board of Governors of
the Federal Reserve System), special deposit or similar requirement against
assets of, deposits with or for the amount of, or credit extended by, any
Lender, or imposes on any Lender any other condition affecting a LIBOR Advance,
the Notes, or its obligation to make a LIBOR Advance; and the result of any of
the foregoing is to increase the cost to such Lender of making or maintaining
its LIBOR Advances, or to reduce the amount of any sum received or receivable by
such Lender under this Agreement or under the Notes or reimbursement obligations
by an amount deemed by such Lender to be material, then, within five days after
demand by such Lender, Company shall, subject to Section 9.8 hereof, pay to such
Lender such additional amount or amounts as will compensate such Lender for such
increased cost or reduction. Each Lender will (i) notify Company and
Administrative Agent of any event occurring after the date of this Agreement
that entitles such Lender to compensation pursuant to this Section 2.13(b), as
promptly as practicable after such Lender obtains actual knowledge of the event;
provided, no Lender
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shall be liable for its failure or the failure of any other Lender to provide
such notification and (ii) use good faith and reasonable efforts to designate a
different Lending Office for LIBOR Advances of such Lender if the designation
will avoid the need for, or reduce the amount of, the compensation and will not,
in the sole opinion of such Lender, be disadvantageous to such Lender. A
certificate of such Lender claiming compensation under this Section 2.13(b),
setting forth in reasonable detail the computation of the additional amount or
amounts to be paid to it hereunder and certifying that such claim is consistent
with such Lender's treatment of similar customers having similar provisions
generally in their agreements with such Lender shall be conclusive in the
absence of demonstrable error. If such Lender demands compensation under this
Section 2.13(b), Company may at any time, on at least five Business Days' prior
notice to such Lender (i) repay in full the then outstanding principal amount of
LIBOR Advances, of such Lender, together with accrued interest thereon, or (ii)
convert the LIBOR Advances to Base Rate Advances in accordance with the
provisions of this Agreement; provided, however, that Company shall be liable
for the Consequential Loss arising pursuant to those actions.
(c) Notwithstanding any other provision of this Agreement, if the
introduction of or any change in or in the interpretation or administration of
any Law shall make it unlawful, or any central bank or other Tribunal shall
assert that it is unlawful, for a Lender to perform its obligations hereunder to
make LIBOR Advances or to continue to fund or maintain LIBOR Advances hereunder,
then, on notice thereof and demand therefor by such Lender to Company, (i) each
LIBOR Advance will automatically, upon such demand, convert into a Base Rate
Advance and (ii) the obligation of such Lender to make, or to convert Advances
into, LIBOR Advances shall be suspended until such Lender notifies
Administrative Agent and Company that such Lender has determined that the
circumstances causing such suspension no longer exist.
(d) Upon the occurrence and during the continuance of any Default or
Event of Default, (i) each LIBOR Advance will automatically, on the last day of
the then existing Interest Period therefor, convert into a Base Rate Advance and
(ii) the obligation of each Lender to make, or to convert Advances into, LIBOR
Advances shall be suspended.
(e) Failure on the part of any Lender to demand compensation for any
increased costs, increased capital or reduction in amounts received or
receivable or reduction in return on capital pursuant to this Section 2.13
(collectively, "Increased Advance Costs") with respect to any period shall not
constitute a waiver of any Lender's right to demand compensation with respect to
such period or any other period, subject, however, to the limitations set forth
in this Section 2.13. Notwithstanding the foregoing, any Lender's demand for
Increased Advance Costs shall not include any Increased Advance Costs with
respect to any period more than two years prior to the date that such Lender
gives notice to Company of such Increased Advance Costs unless the effective
date of the condition which results in the right to receive Increased Advance
Costs is retroactive (the "Increased Advance Costs Retroactive Effective Date").
If any Increased Advance Costs has an Increased Advance Costs Retroactive
Effective Date and any Lender demands compensation within two years after the
date setting the Increased Advance Costs Retroactive Effective Date (the
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"Increased Advance Costs Set Date"), such Lender shall have the right to receive
such Increased Advance Costs from the Increased Advance Costs Retroactive
Effective Date. If a Lender does not demand such Increased Advance Costs within
two years after the Increased Advance Costs Set Date, such Lender may not
receive payment of Increased Advance Costs with respect to any period more than
two years prior to such demand.
(f) The obligations of Company under this Section 2.13 shall survive
any termination of this Agreement, subject, however, to the limitations set
forth in Section 2.13(e) above.
(g) Determinations by Lenders for purposes of this Section 2.13 shall
be conclusive, absent demonstrable error. Any certificate delivered to Company
by a Lender pursuant to this Section 2.13 shall include in reasonable detail the
basis for such Lender's demand for additional compensation and a certification
that the claim for compensation is consistent with such Lender's treatment of
similar customers having similar provisions generally in their agreements with
such Lender.
(h) If any Lender notifies Administrative Agent that, in its reasonable
determination, the LIBOR Rate for any Interest Period for any LIBOR Advances
will not adequately reflect the cost to such Lender of making, funding or
maintaining LIBOR Advances for such Interest Period, Administrative Agent shall
promptly so notify Company, whereupon (i) each such LIBOR Advance will
automatically, on the last day of the then existing Interest Period therefor,
convert into a Base Rate Advance and (ii) the obligation of such Lender to make,
or to convert Advances into, LIBOR Advances shall be suspended until such Lender
notifies Administrative Agent that such Lender has determined that the
circumstances causing such suspension no longer exist and Administrative Agent
notifies Company of such fact.
2.14. Use of Proceeds. The proceeds of the Advances shall be available
(and Company and its Subsidiaries shall use such proceeds) to (a) finance
acquisition of, and making loans secured by, Property and (b) use for other
general working capital purposes.
ARTICLE III. CONDITIONS PRECEDENT
3.1. Conditions Precedent to the Initial Advance. The obligations of
each Lender under this Agreement and the obligation of each Lender to make the
Initial Advance shall be subject to the following conditions precedent that on
the Closing Date:
(a) All terms, conditions and documentation in connection with this
amendment and restatement shall be acceptable to Lenders.
(b) The making of the Commitment shall not contravene any Law
applicable to Administrative Agent or any Lender.
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(c) Each Lender shall have received a Certificate from an Authorized
Officer stating that no material adverse change in the business, assets,
prospects, or financial condition of Company and its Subsidiaries since the
December 31, 1996 financial statements provided to Lenders. Administrative Agent
shall have received financial information regarding Company and each Subsidiary
of Company requested by it.
(d) Each Lender shall have received an executed copy of this Agreement
and its respective Notes, duly completed and correct. Lenders shall have
received copies of the Fee Letters signed by Company, as applicable. Each of the
following shall have been delivered to Administrative Agent on behalf of
Lenders, in form and substance satisfactory to Administrative Agent, Special
Counsel and each Lender. The Guaranty Agreement executed by each Guarantor and a
Subordination Agreement executed by each payee of an Intercompany Note.
(e) Company shall have delivered to Administrative Agent a Certificate,
dated the Closing Date, executed by an Authorized Officer, certifying that, to
such Authorized Officer's knowledge, (i) no Default or Event of Default has
occurred and is continuing, (ii) the representations and warranties set forth in
Article IV hereof are true and correct in all material respects, and (iii)
Company and each Subsidiary of Company has complied with all agreements and
conditions to be complied with by it in all material respects under the Loan
Papers by such date.
(f) Company and each Guarantor shall have each delivered to
Administrative Agent on behalf of Lenders a Secretary's Certificate, dated the
Closing Date, certifying (i) that attached copies of the certificates of
organization certified by the Secretary of States of the appropriate states, and
bylaws are true and complete, and in full force and effect, without amendment
except as shown, and (ii) that a copy of the resolutions authorizing execution
and delivery of this Agreement and any Loan Papers, as appropriate, are true and
complete, and that such resolutions are in full force and effect, were duly
adopted, have not been amended, modified, or revoked, and constitute all
resolutions adopted with respect to this loan transaction. Administrative Agent
and Lenders may conclusively rely on the certificate delivered pursuant to this
subsection until they receive notice in writing to the contrary.
(g) Administrative Agent shall have received an opinion or opinions of
counsel to Company and its Subsidiaries, dated the Closing Date, acceptable to
Lenders and otherwise in form and substance satisfactory to Lenders and Special
Counsel, with respect to this loan transaction and otherwise, including, without
limitation, opinions (i) to the valid and binding nature of the Loan Papers,
(ii) to the power, authorization and corporate matters of each such Person taken
in connection with the transactions contemplated by the Loan Papers, (iii) that
the execution, delivery and performance by Company and the Subsidiaries of
Company of the respective Loan Papers does not violate any of the terms of
Company's or any such Subsidiary's agreements, and (iv) to such other matters as
are reasonably requested by Special Counsel.
(h) Administrative Agent shall have received, on behalf of Lenders,
each of the
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following, in form and substance satisfactory to Administrative Agent and
Special Counsel:
(i) evidence that all proceedings of Company and its
Subsidiaries taken in connection with the transactions contemplated by
this Agreement shall be reasonably satisfactory in form and substance
to Lenders and Special Counsel; and each Lender shall have received
copies of all documents or other evidence which Lenders or Special
Counsel may reasonably request in connection with this facility,
including without limitation the resolutions of the Board of Directors
of Company and each Subsidiary, and the requisite authorizations of all
other Persons necessary to authorize the transactions contemplated
herein, certified to be true and correct by an Authorized Officer;
(ii) payment of all fees, costs and expenses (including,
without limitation, attorneys' fees of Special Counsel and the
Structuring Fee due to be paid on or through the Closing Date); and
(iii) a Compliance Certificate computed after giving effect to
the Initial Advance.
(i) All corporate proceedings of Company and its Subsidiaries taken in
connection with the transactions contemplated hereby, and all documents
incidental thereto, shall be satisfactory in form and substance to each Lender.
Administrative Agent and each Lender shall have received copies of all documents
or other evidence that it may reasonably request in connection with such
transactions.
3.2. Conditions Precedent to All Advances. The obligation of each
Lender to make each Advance (including the Initial Advance) shall be subject to
the further conditions precedent that on the date of such Advance (a) the
following statements shall be true (and the delivery of each Borrowing Notice
under Section 2.2(a), each Application and each Conversion or Continuation
Notice under Section 2.9(b), or the failure to deliver a Conversion or
Continuation Notice under Section 2.9(b) shall constitute a representation that
on the disbursement date (except as to representations and warranties which (i)
refer to a specific date, (ii) have been modified by transactions permitted
pursuant to this Agreement or any other Loan Paper or (iii) have been
specifically waived by Administrative Agent, to the extent permitted pursuant to
Section 9.1) are true:
(i) The representations and warranties contained in Article IV
hereof are true and correct on such date, as though made on and as of
such date;
(ii) No event has occurred and is continuing, or would result
from such Advance (including the intended application of the proceeds
of such Advance), that does or could constitute a Default or Event of
Default; and
(iii) There shall have occurred no Material Adverse Change,
and the making of
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such Advance, shall not cause or result in a Material Adverse Change;
and
(iv) After giving effect to each such Advance, the aggregate
outstanding Advances do not exceed the Commitment;
and (b) Administrative Agent shall have received, in form and substance
acceptable to it, such other approvals, documents, certificates, opinions, and
information as it may deem necessary or appropriate.
ARTICLE IV. REPRESENTATIONS AND WARRANTIES
Company represents and warrants that the following are true and
correct:
4.1. Organization and Qualification. Company and each of its
Subsidiaries is a corporation duly organized, validly existing, and in good
standing under the Laws of its state of incorporation. Company and each of its
Subsidiaries is qualified to do business in all jurisdictions where the nature
of its business or Properties require such qualification, except where the
failure to so qualify could not reasonably be expected to have a Material
Adverse Effect. Set forth on Schedule 4.1 attached hereto is a complete and
accurate listing with respect to Company and each of its Subsidiaries, showing
(a) the jurisdiction of its organization and its mailing address, which is the
principal place of business and executive offices of each unless otherwise
indicated, (b) the classes of Capital Stock and shares of Capital Stock issued
and outstanding in Company and each of its Subsidiaries, and the numbers or
amounts of Capital Stock authorized and outstanding of Company and each of its
Subsidiaries, and (c) each record and beneficial owner of outstanding Capital
Stock on the date hereof, indicating the ownership percentage (provided that,
with Administrative Agent's consent, Schedule 4.1 need only set forth each
record and beneficial owner of 1% or more of Capital Stock of Company based on
the most current records of Company prior to the Closing Date). All Capital
Stock of Company and each of its Subsidiaries is validly issued and fully paid
and has been issued in compliance with all requirements of Applicable Law. No
share of Capital Stock of Company or any Subsidiary of Company is subject to any
Lien, including any restrictions on hypothecation or transfer.
4.2. Due Authorization; Validity. The board of directors of Company and
each Subsidiary of Company have duly authorized the execution, delivery, and
performance of the Loan Papers to be executed by Company and each Subsidiary of
Company, as appropriate. Company and each Subsidiary of Company has full legal
right, power, and authority to execute, deliver, and perform under the Loan
Papers to be executed and delivered by it. The Loan Papers constitute the legal,
valid, and binding obligations of Company and each Subsidiary of Company, as
appropriate, enforceable in accordance with their terms (subject as to
enforcement of remedies to any applicable Debtor Relief Laws).
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4.3. Conflicting Agreements and Other Matters. The execution or
delivery of any Loan Papers, and performance thereunder, does not conflict with,
or result in a breach of the terms, conditions, or provisions of, or constitute
a default under, or result in any violation of, or result in the creation of any
Lien (other than in favor of Administrative Agent) upon any Properties of
Company or any Subsidiary of Company under, or require any consent, approval, or
other action by, notice to, or filing with, any Tribunal or Person pursuant to,
the certificate of incorporation or bylaws of Company or any Subsidiary of
Company, any award of any arbitrator, or any agreement, instrument, or Law to
which Company or any Subsidiary of Company, or any of their Properties is
subject.
4.4. Financial Statements. The financial statements of Company and its
Consolidated Subsidiaries, dated September 30, 1997 and delivered to
Administrative Agent, fairly present its financial condition and the results of
operations as of the dates and for the periods shown, all in accordance with
GAAP. Such financial statements reflect all material liabilities, direct and
contingent, of Company and its Consolidated Subsidiaries that are required to be
disclosed in accordance with GAAP. As of the date of such financial statements,
there were no Contingent Liabilities, liabilities for Taxes, forward or
long-term commitments, or unrealized or anticipated losses from any unfavorable
commitments that are substantial in amount and that are not reflected on such
financial statements or otherwise disclosed in writing to Administrative Agent.
Since September 30, 1997, there has been no Material Adverse Change. Company and
each Subsidiary of Company is Solvent. The projections of Company dated December
19, 1996 delivered to Administrative Agent were prepared in good faith and
management believes them to be based on reasonable assumptions (each of which
are stated in such statement) and to provide reasonable estimations of future
performance as of the dates and for the periods shown for Company and its
Subsidiaries, subject to the uncertainty and approximation inherent in any
projections. Company's fiscal year ends on December 31.
4.5. Litigation. As of the Closing Date, Schedule 4.5 lists all
Litigation that is pending, and to Company's best knowledge, threatened by
written demand against Company or any of its Subsidiaries or any of their
Properties or assets on the Closing Date in which an adverse determination with
respect thereto could reasonably be expected to result in an uninsured liability
of Company or any of its Subsidiaries in excess of $500,000. Except as set forth
on Schedule 4.5, there is no pending or, to Company's best knowledge, threatened
Litigation against Company, any Subsidiary of Company or any of their respective
Properties that could reasonably be expected to result in a Material Adverse
Change.
4.6. Compliance With Laws Regulating the Incurrence of Indebtedness. No
proceeds of any Advance will be used directly or indirectly to acquire any
security in any transaction which is subject to Sections 13 and 14 of the
Securities Exchange Act of 1934, as amended. Company is not, nor is any
Subsidiary of Company, engaged in the business of extending credit for the
purpose of purchasing or carrying margin stock (within the meaning of Regulation
U issued by the Board of Governors of the Federal Reserve System), and no
proceeds of any Advance will be used to purchase
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or carry any margin stock or to extend credit to others for the purpose of
purchasing or carrying any margin stock. Following Company's intended use of the
proceeds of each Advance, not more than 25% of the value of the assets of
Company will be "margin stock" within the meaning of Regulation U. Company is
not subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Investment Company Act of 1940, the Interstate
Commerce Act (as any of the preceding acts have been amended), or any other Law
that the incurring of Indebtedness by Company would violate, including without
limitation Laws relating to common or contract carriers or the sale of
electricity, gas, steam, water, or other public utility services.
4.7. Authorizations, Title to Properties, and Related Matters. Company
and each Subsidiary of Company possess all material Authorizations necessary and
appropriate to own and operate their businesses and are not in violation thereof
in any material respect. All such Authorizations are in full force and effect,
and no event has occurred that permits, or after notice or lapse of time could
permit, the revocation, termination or material and adverse modification of any
such Authorization, except those which in the aggregate could not reasonably be
expected to cause a Material Adverse Change. Company and each Subsidiary of
Company has requisite corporate power (as applicable) and legal right to own and
operate its Property and to conduct its business. Each has good and indefeasible
title (fee or leasehold, as applicable) to its Property, subject to no Lien of
any kind, except Permitted Liens and first Liens for the benefit of Company or
any Subsidiary of Company. Neither Company nor any Subsidiary of Company is in
violation of its respective certificates or articles of incorporation or bylaws.
Neither Company nor any Subsidiary of Company is in violation of any Law, or
material agreement or instrument binding on or affecting it or any of its
Properties, the effect of which could reasonably be expected to cause a Material
Adverse Change. No business or Properties of Company or any Subsidiary of
Company is affected by any drought, storm, earthquake, embargo, act of God or
public enemy, or other casualty, the effect of which could reasonably be
expected to cause a Material Adverse Change.
4.8. Outstanding Debt and Liens. Company and its Subsidiaries have no
outstanding Debt, Contingent Liabilities or Liens, except Permitted Liens,
except as shown on Schedule 4.8 hereto. No breach, default or event of default
exists under any document, instrument or agreement evidencing or otherwise
relating to any Indebtedness of Company or any of its Subsidiaries. All
Intercompany Notes are subject to a Subordination Agreement.
4.9. Taxes. Company and each Subsidiary of Company has filed all
federal, state, and other Tax returns (or extensions related thereto) which are
required to be filed, and has paid all Taxes as shown on said returns, as well
as all other Taxes, to the extent due and payable, except to the extent payment
is contested in good faith and for which adequate reserves have been established
therefor in accordance with GAAP. All Tax liabilities of Company and each
Subsidiary of Company are adequately provided for on its books, including
interest and penalties, and adequate reserves have been established therefor in
accordance with GAAP. No income Tax liability of a material nature has been
asserted by taxing authorities for Taxes in excess of those already paid, and no
taxing authority has notified Company or any Subsidiary of Company of any
deficiency in any Tax return.
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4.10. ERISA. Each Plan of Company and each Subsidiary of Company has
satisfied the minimum funding standards under all Laws applicable thereto, and
no Plan has an accumulated funding deficiency thereunder. Company has not, and
neither has Subsidiary of Company incurred any material liability to the PBGC
with respect to any Plan. No ERISA Event has occurred with respect to any Plan
for which an Insufficiency in excess of $100,000 exists on the date of such
occurrence. Neither Company nor any ERISA Affiliate has participated in any
non-exempt Prohibited Transaction with respect to any Plan or trust created
thereunder. Neither Company nor any ERISA Affiliate has incurred any Withdrawal
Liability to any Multiemployer Plan that has not been satisfied. Neither Company
nor any ERISA Affiliate has been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or has been terminated, within
the meaning of Title IV of ERISA.
4.11. Environmental Laws. Company and Subsidiary of Company has
obtained all material environmental, health and safety Authorizations required
under all applicable Environmental Laws to carry on its business as being
conducted, except where the failure to obtain such Authorizations could not
reasonably be expected to have a Material Adverse Effect. On the Closing Date,
there are no environmental liabilities of Company or any Subsidiary of Company
(with respect to any fee owned Properties) which could reasonably be expected to
have a Material Adverse Effect, except as disclosed and described in detail on
Schedule 4.11 hereto. Each of such Authorizations is in full force and effect
and Company and each Subsidiary of Company is in compliance with the terms and
conditions thereof, and is also in compliance with all other limitations,
restrictions, conditions, standards, prohibitions, requirements, obligations,
schedules and timetables contained in any applicable Environmental Law or in any
regulation, code, plan, order, decree, judgment, injunction, notice or demand
letter issued, entered, promulgated or approved thereunder, except to the extent
the failure to have such Authorizations or comply with any of the terms and
conditions thereof could not reasonably be expected to have a Material Adverse
Effect. In addition, no written notice, notification, demand, request for
information, citation, summons or order has been issued, no written complaint
has been filed, no penalty has been assessed and no investigation or review is
pending or, to the best knowledge of Company, or any Subsidiary of Company,
threatened, by any Tribunal or other entity with respect to any alleged failure
by Company or any Subsidiary of Company to have any environmental, health or
safety Authorization required under any applicable Environmental Law in
connection with the conduct of the business of Company or any Subsidiary of
Company or with respect to any generation, treatment, storage, recycling,
transportation, discharge, disposal or release of any Hazardous Materials by
Company or any Subsidiary of Company, the effect of which could reasonably be
expected to have a Material Adverse Effect. There are no environmental
liabilities of Company or any Subsidiary of Company which could reasonably be
expected to cause a Material Adverse Change. Mortgagors in respect of Funded
Mortgages and Tenants under Leases are contractually (i) prohibited from
generating or producing Hazardous Materials at or in connection with the
Properties of Company and its Subsidiaries and disposing of any Hazardous
Materials on or to any Property of Company or any Subsidiary of Company, except
in compliance with applicable Environmental Laws or (ii) obligated to maintain
and occupy the Properties of Company and its Subsidiaries in compliance with all
applicable Laws.
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4.12. Disclosure. Neither Company nor any Subsidiary of Company has
made a material misstatement of fact, or failed to disclose any fact necessary
to make the facts disclosed not misleading, in light of the circumstances under
which they were made, to Administrative Agent or any Lender during the course of
application for and negotiation of any Loan Papers or otherwise in connection
with any Advances. There is no fact known to Company or any Subsidiary of
Company that materially adversely affects any of Company's or any Subsidiary of
Company's Properties or business, or that could constitute a Material Adverse
Change, and that has not been set forth in the Loan Papers or in other documents
furnished to Administrative Agent.
4.13. Investments; Subsidiaries. Company and its Subsidiaries have no
Investments except as described on Schedule 4.13 hereto and as permitted by
Section 6.10 hereof. Schedule 4.13 is a complete and accurate listing of Company
and each Subsidiary of Company, showing (a) its complete name, (b) its
jurisdiction of organization, (c) its capital structure, and (d) its street and
mailing address, which is its principal place of business and executive office.
4.14. Certain Fees. No broker's, finder's, management fee or other fee
or commission will be payable by Company with respect to the making of
Commitment or Advances hereunder (other than to Administrative Agent and Lenders
hereunder), or the offering, issuance or sale of the Capital Stock of Company.
Company and each Subsidiary of Company hereby agrees to indemnify and hold
harmless Administrative Agent and each Lender from and against any claims,
demand, liability, proceedings, costs or expenses asserted with respect to or
arising in connection with any such fees or commissions.
4.15. Intellectual Property. Company and each Subsidiary of Company has
obtained all patents, trademarks, service-marks, trade names, copyrights,
licenses and other rights, free from material restrictions, which are necessary
for the operation of their respective businesses as presently conducted and as
proposed to be conducted.
4.16. Investment Company Act. Neither Company nor any of its
Subsidiaries is an "investment company", "promoter", "principal under" or
"controlled by" an "investment company", within the meaning of the Investment
Company Act of 1940, as amended. The making of the Advances by Lenders, the
application of the proceeds and repayment thereof by Company and the
consummation of the transactions contemplated by the Loan Papers will not
violate any such Act or any rule, regulation or order thereunder issued by the
Securities and Exchange Commission.
4.17. Restricted Payments. Neither Company nor any of its Subsidiaries
has made any Restricted Payment during the period from and including September
30, 1997 through and including the Closing Date.
4.18. Status as a Real Estate Investment Trust. Company (i) has elected
to be treated as and is qualified as a Real Estate Investment Trust, (ii) has
not revoked its election to be a Real Estate Investment Trust, (iii) for each
taxable year, has satisfied the requirements of Section 856(c)(4) of
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the Code and (iv) for its current "tax year" (as defined in the Code) is and for
all prior tax years subsequent to its election as a Real Estate Investment Trust
has been entitled to a dividends paid deduction which meets the requirements of
Section 857 of the Code.
4.19. Common Enterprise. Company and its Subsidiaries are engaged in
the businesses set forth in Section 6.8 hereof. These operations require
financing on a basis such that the credit supplied can be made available to
Company and its Subsidiaries, as required for the continued successful operation
of the Company and its Subsidiaries, taken as a whole. Company and each of its
Subsidiaries expects to derive benefit (and the Board of Directors of Company
and each Subsidiary of Company has determined that such Subsidiary may
reasonably be expected to derive benefit), directly or indirectly, from the
credit extended by Lenders hereunder, both in its separate capacity and as a
member of the group of companies, since the successful operation and condition
of the Company and each of its Subsidiaries is dependent ont he continued
successful performance of the function of the group as a whole.
4.20. Survival of Representations and Warranties, etc. All
representations and warranties made under this Agreement shall be deemed to be
made at and as of the Closing Date and at and as of the date of each Advance,
and each shall be true and correct when made, except to the extent (a)
previously fulfilled in accordance with the terms hereof, (b) subsequently
inapplicable, or (c) previously waived in writing by Administrative Agent and
Lenders with respect to any particular factual circumstance. The representations
and warranties made under this Agreement shall be deemed applicable to each
Subsidiary as of the formation or acquisition of such Subsidiary and at and as
of each date the representations and warranties are remade pursuant to this
provision. All representations and warranties made under this Agreement shall
survive, and not be waived by, the execution hereof by Administrative Agent and
Lenders, any investigation or inquiry by Administrative Agent or any Lender, or
by the making of any Advance under this Agreement.
ARTICLE V. AFFIRMATIVE COVENANTS
So long as the Commitment, any Advance or any portion of the
Obligations is outstanding, or Company or any of its Subsidiaries owes any other
amount hereunder or under any other Loan Paper:
5.1. Compliance with Laws and Payment of Debt. Company shall, and shall
cause each Subsidiary of Company to, comply with all Applicable Laws, including
without limitation compliance with ERISA and all applicable federal and state
securities Laws. Company shall, and shall cause each of its Subsidiaries to, pay
its Indebtedness as and when due (or within any applicable grace period).
5.2. Insurance. Company (a) shall cause, and shall cause each
Subsidiary of Company to cause, the Tenants under Leases and the Mortgagors
under Funded Mortgages to keep the Properties
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of Company and its Subsidiaries adequately insured at all times by reputable
insurers to such extent and against such risks, including fire and other risks
insured against by extended coverage, as what is customary with companies
similarly situated and in the same or similar businesses, (b) shall, and shall
cause each Subsidiary of Company to, maintain in full force and effect public
liability (including liability insurance for all vehicles and other insurable
Property) and worker's compensation insurance, in amounts customary for such
similar companies to cover normal risks, by insurers satisfactory to
Administrative Agent, and (c) Company shall, and shall cause each Subsidiary of
Company to, maintain other insurance as may be required by Law or reasonably
requested by Administrative Agent. Company shall from time to time shall deliver
to Administrative Agent, upon demand, evidence of the maintenance of such
insurance.
5.3. Inspection Rights. Company shall, and shall cause each Subsidiary
of Company to, permit Administrative Agent or any Lender, upon reasonable notice
(provided that no advance notice is required after the occurrence and during the
continuance of an Event of Default), to examine and make copies of and abstracts
from their records and books of account, to visit and inspect their Properties
and to discuss their affairs, finances, and accounts with any of their
directors, officers, employees, accountants, attorneys and other
representatives, all as Administrative Agent or any Lender may reasonably
request.
5.4. Records and Books of Account; Changes in GAAP. Company shall, and
shall cause each of its Subsidiaries to keep adequate records and books of
account in conformity with GAAP. Company shall make such valuations of its
assets as may be required by the terms of Section 856(c)(5) of the Code. Company
shall not, nor shall Company permit any of its Subsidiaries to change its Fiscal
Year, nor change its method of financial accounting except in accordance with
GAAP. In connection with any such change after the date hereof, Company and
Lenders shall negotiate in good faith to make appropriate alterations to the
covenants set forth in Section 6.1 hereof, reflecting such change.
5.5. Reporting Requirements. Company shall furnish to each Lender and
Administrative Agent:
(a) As soon as available and in any event within 45 days after the end
of Company's fiscal quarters, consolidated balance sheets of Company and its
Consolidated Subsidiaries as of the end of such quarter, and consolidated
statements of income, and consolidated statements of changes in cash flow of
Company and its Consolidated Subsidiaries for the portion of the fiscal year
ending with such quarter, setting forth, in comparative form, figures for the
corresponding periods in the previous fiscal year, all in reasonable detail, and
certified by an Authorized Officer as prepared in accordance with GAAP, and
fairly presenting the financial condition and results of operations of Company
and its Consolidated Subsidiaries (subject to normal, year-end audit
adjustments);
(b) As soon as available and in any event within 90 days after the end
of each fiscal year, consolidated balance sheets of Company and its Consolidated
Subsidiaries as of the end of such
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fiscal year, and consolidated statements of income and changes in cash flow of
Company and its Consolidated Subsidiaries for such fiscal year, all in
reasonable detail, prepared in accordance with GAAP, and accompanied by an
unqualified opinion of the Auditor, which opinion shall state that such
financial statements were prepared in accordance with GAAP, that the examination
by the Auditor in connection with such financial statements was made in
accordance with generally accepted auditing standards, and that such financial
statements present fairly the financial condition and results of operations of
Company and its Consolidated Subsidiaries;
(c) Promptly upon receipt thereof, copies of all material reports or
letters submitted to Company or any Subsidiary of Company by the Auditor or any
other accountants in connection with any annual, interim, or special audit,
including without limitation the comment letter submitted to management in
connection with any such audit;
(d) Together with each set of financial statements delivered pursuant
to subsections (a) and (b) above, a Compliance Certificate executed by an
Authorized Officer, which such Compliance Certificate must (i) certify that
there has occurred no Default or Event of Default, (ii) compute the Applicable
Margin, (iii) set forth the detailed calculations with respect to the Sections
6.1(a), (b), (c), (d), (e), 6.3, 6.6 and 6.7 hereof and (iv) certify that
Company continues to qualify as a Real Estate Investment Trust under the Code;
(e) As soon as available and in any event not later than 30 days after
the beginning of each fiscal year of Company, the annual operating budgets of
Company and its Subsidiaries for such fiscal year;
(f) Promptly upon knowledge by Company of the occurrence of any Default
or Event of Default, a notice from an Authorized Officer, setting forth the
details of such Default or Event of Default, and the action being taken or
proposed to be taken with respect thereto;
(g) As soon possible and in any event within five Business Days after
knowledge thereof by Company or any of its Subsidiaries, notice of any
Litigation pending or threatened by written demand against Company, any of its
Subsidiaries or any of their respective Property which, if determined adversely,
could reasonably be expected to result in a judgment, penalties, or uninsured
liability or damages in excess of $1,000,000 together with a statement of an
Authorized Officer describing the allegations of such Litigation, and the action
being taken or proposed to be taken with respect thereto;
(h) Promptly following notice or knowledge thereof by Company or any of
its Subsidiaries, notice of any actual or threatened (which threat is evidenced
in writing) loss or termination of any Authorization of Company or any such
Subsidiary which if lost or terminated could reasonably be expected to have a
Material Adverse Effect, together with a statement of an Authorized Officer
describing the circumstances surrounding the same, and the action being taken or
proposed to be taken with respect thereto;
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(i) Promptly after filing or receipt thereof, copies of all reports and
notices that Company or any of its Subsidiaries (i) files or receives in respect
of any Plan with or from the Internal Revenue Service, the PBGC, or the United
States Department of Labor, or (ii) furnishes to or receives from any holders of
any Indebtedness or Contingent Liability, if in either case, any information or
dispute referred to therein either causes a Default or Event of Default, or
could reasonably be expected to cause or result in a Default or an Event of
Default;
(j) Within 120 days after the close of each fiscal year, a statement of
the Insufficiencies of each Plan (but only if the aggregate amount of all
Insufficiencies for all Plans exceeds $100,000), certified as correct by an
actuary enrolled under ERISA;
(k) As soon as possible and in any event within 10 days after Company
or any of its Subsidiaries knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by an Authorized Officer, describing
said Reportable Event and the action which the such Person proposes to take with
respect thereto;
(l) Promptly upon their becoming available, copies of all registration
statements and regularly provided reports, if any, filed by Company with the
Securities and Exchange Commission (of any governmental agency substituted
therefor) or any national securities exchange;
(m) Promptly upon the mailing thereof to the shareholders of Company
generally, copies of all financial statements, reports and proxy statements so
mailed;
(n) As soon as possible and in any event within 5 days after Company's
knowledge thereof, written notice of any change in the Index Debt Rating; and
(o) From time to time, such other information regarding the business,
affairs or financial condition of Company or any of its Subsidiaries as any
Lender may reasonably request, including consolidating financial statements of
Company and its Consolidated Subsidiaries pursuant to subsections (a) and (b)
above.
5.6. Use of Proceeds. The proceeds of the Advances shall be available
(and Company and its Subsidiaries shall use such proceeds) to (a) finance
acquisitions of, and making loans secured by, Property and (b) use for other
general working capital purposes; provided that no Lender shall have any
responsibility as to use by Company or any of its Subsidiaries of any such
proceeds.
5.7. Maintenance of Existence and Assets. Except as provided by Section
6.7 of this Agreement, Company shall maintain, and shall cause each of its
Subsidiaries to maintain, its corporate existence, authority to do business in
the jurisdictions in which it is necessary for Company or such Subsidiary of
Company to do so, and all Authorizations necessary for the operation of any of
their businesses. Company shall maintain, and shall cause each of its
Subsidiaries to maintain, the assets necessary for use in their respective
businesses in good repair, working order and
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condition, and make all such repairs, renewals and replacements thereof as may
be reasonably required by Company and its Subsidiaries.
5.8. Payment of Taxes. Company will and will cause each of its
Subsidiaries to, promptly pay and discharge all lawful Taxes imposed upon it or
upon its income or profit or upon any Property belonging to it, unless such Tax
shall not at the time be due and payable, or if the validity thereof shall
currently be contested on a timely basis in good faith by appropriate
proceedings (provided that the enforcement of any Liens arising out of any such
nonpayment shall be stayed or bonded during the proceedings) and adequate
reserves with respect to such Tax shall have been established in accordance with
GAAP.
5.9. Indemnity.
(a) Company agrees to defend, protect, indemnify and hold harmless
Administrative Agent and each Lender, each of their respective Affiliates, and
each of their respective (including such Affiliates') officers, directors,
employees, agents, attorneys, shareholders and consultants (including, without
limitation, those retained in connection with the satisfaction or attempted
satisfaction of any of the conditions set forth herein) of each of the foregoing
(collectively, "Indemnitees") from and against any and all liabilities,
obligations, losses, damages, penalties, actions, judgments, suits, claims,
costs, expenses and disbursements of any kind or nature whatsoever (including,
without limitation, the reasonable fees and disbursements of counsel for such
Indemnitees in connection with any investigative, administrative or judicial
proceeding, whether or not such Indemnitees shall be designated a party thereto
or such proceeding shall have actually been instituted), imposed on, incurred
by, or asserted against such Indemnitees (whether direct, indirect or
consequential and whether based on any federal, state, or local laws and
regulations, under common law or at equitable cause, or on contract, tort or
otherwise), arising from or connected with the past, present or future
operations of Company, any Subsidiary of Company, any Affiliate of Company or
any predecessors in interest, or the past, present or future environmental
condition of property of Company, any Subsidiary of Company, any Affiliate of
Company or any predecessors in interest, in each case relating to or arising out
of this Agreement, the Loan Papers, or any act, event or transaction or alleged
act, event or transaction relating or attendant thereto and the management of
the Advances by Administrative Agent, expressly including in connection with, or
as a result, in whole or in part, of the ordinary or mere negligence of
Administrative Agent or any Lender, or the use or intended use of the proceeds
of the Advances hereunder, or in connection with any investigation of any
potential matter covered hereby, but excluding any claim or liability to the
extent it arises as the result of the gross negligence or willful misconduct of
any Indemnitee, as finally judicially determined by a court of competent
jurisdiction (collectively, "Indemnified Matters").
(b) In addition, Company shall periodically, upon request, reimburse
each Indemnitee for its reasonable legal and other actual reasonable expenses
(including the cost
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of any investigation and preparation) incurred in connection with any
Indemnified Matter. If for any reason the foregoing indemnification is
unavailable to any Indemnitee or insufficient to hold any Indemnitee harmless
with respect to Indemnified Matters, then Company shall contribute to the amount
paid or payable by such Indemnitee as a result of such loss, claim, damage or
liability in such proportion as is appropriate to reflect not only the relative
benefits received by Company and the holders of the Capital Stock of Company on
the one hand and such Indemnitee on the other hand but also the relative fault
of Company and such Indemnitee, as well as any other relevant equitable
considerations. The reimbursement, indemnity and contribution obligations under
this Section shall be in addition to any liability which Company may otherwise
have, shall extend upon the same terms and conditions to each Indemnitee, and
shall be binding upon and inure to the benefit of any successors, assigns, heirs
and personal representatives of Company, Administrative Agent, Lenders and all
other Indemnitees. The obligations of Company under this Section 5.9 shall
survive (i) the execution of this Agreement and (ii) any termination of this
Agreement and payment of the Obligations.
5.10. Authorizations and Material Agreements. Company shall, and shall
cause its Subsidiaries to, obtain, maintain and comply in all material respects
with all Authorizations and agreements necessary or appropriate for any of them
to own, maintain, or operate any of their businesses or Properties.
5.11. Intercompany Notes. Any portion of any Advance under the Facility
which is loaned by Company to any Subsidiary of Company shall be evidenced by
Intercompany Notes in form and substance acceptable to Administrative Agent, and
there shall be no prohibition on the ability of the Company to pledge to
Administrative Agent each such Intercompany Note. Company shall cause all
Intercompany Notes to be subject to a Subordination Agreement.
5.12. Further Assurances. Company and each Subsidiary of Company will
execute all such additional agreements and take any and all such other action,
as Administrative Agent may, from time to time, deem reasonably necessary or
proper in connection with the obligations of Company and each Subsidiary of
Company under any of the Loan Papers.
5.13. Subsidiaries and Other Obligors. Company shall cause each of its
Subsidiaries to comply with each provision of this Article V.
5.14. Interest Hedge Agreements. Company shall maintain an Interest
Hedge Agreement or Agreements such that, after giving effect to such Interest
Hedge Agreements, at least 50% of the aggregate Indebtedness of the Company and
its Subsidiaries outstanding at any time is subject to a fixed interest rate per
annum for a term of at least two years.
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ARTICLE VI. NEGATIVE COVENANTS
So long as the Commitment, any Advance or any portion of the
Obligations is outstanding, or Company or any of its Subsidiaries owes any other
amount hereunder or under any other Loan Paper:
6.1. Financial Covenants. Company and its Consolidated Subsidiaries
shall comply with the following covenants:
(a) Minimum Net Worth. At all times during the term hereof, Net Worth
shall not be less than the sum of (i) $425,000,000, plus (ii) an amount equal to
75% of the aggregate Net Cash Proceeds received by Company and its Consolidated
Subsidiaries after the Closing Date from the offering, sale or other disposition
of Capital Stock of Company or any Subsidiary of Company, plus (iii) an amount
equal to the net worth of any Person that becomes a direct or indirect
Subsidiary of Company or is merged into or consolidated with Company or any
Subsidiary of Company or substantially all of the assets of which are acquired
by Company or any Subsidiary of Company to the extent the purchase price paid
therefor is paid in Capital Stock of Company or any of its Subsidiaries.
(b) Total Indebtedness to Adjusted Net Worth. At all times during the
term hereof, the ratio of Total Indebtedness to Adjusted Net Worth shall not be
greater than 0.90 to 1.
(c) Fixed Charge Coverage Ratio. At all times during the term hereof,
the Fixed Charge Coverage Ratio shall not be less than 2.0 to 1.
(d) Maximum Total Secured Indebtedness. At all times during the term
hereof, the aggregate amount of Total Secured Indebtedness shall not exceed 10%
of Total Assets.
(e) Total Unencumbered Assets to Total Unsecured Indebtedness. At all
times during the term hereof, the ratio of Total Unencumbered Assets to Total
Unsecured Indebtedness shall not be less than 1.75 to 1.
6.2. Indebtedness. Company shall not, and shall not permit any of its
Subsidiaries to, create, incur, assume, become or be liable in any manner in
respect of, or suffer to exist, any Indebtedness, except (a) Indebtedness under
the Loan Papers, (b) Indebtedness in existence on the date hereof, as shown on
Schedule 4.8 hereto, (c) Indebtedness of a Subsidiary of Company to Company
evidenced by Intercompany Notes evidencing loans made by Company with the
proceeds of Advances, and (d) other Indebtedness, provided that (i) immediately
prior thereto and after the occurrence thereof there shall be no Default or
Event of Default and (ii) the covenants, terms and provisions with respect to
such Indebtedness are no more restrictive than the terms of this Agreement and
the other Loan Papers.
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6.3. Contingent Liabilities. Company shall not, and shall not permit
any of its Subsidiaries to, create, incur, assume, become or be liable in any
manner in respect of, or suffer to exist, any Contingent Liabilities, except (a)
Contingent Liabilities under or relating to the Loan Papers (as defined in this
Agreement) and the Loan Papers (as defined in the Amended and Restated Credit
Agreement), (b) Contingent Liabilities in existence on the Closing Date, as
shown on Schedule 4.8 hereto, (c) Contingent Liabilities resulting from the
endorsement of negotiable instruments for collection in the ordinary course of
business, (d) Contingent Liabilities in respect of Interest Hedge Agreements of
Company or any of its Subsidiaries, and (e) other Contingent Liabilities not to
exceed $5,000,000 in aggregate principal amount.
6.4. Liens. Company shall not, and shall not permit any of its
Subsidiaries to, create or suffer to exist any Lien upon any of its Properties,
except Permitted Liens. In case any Property shall be subject to a Lien in
violation of this Section 6.4, the Company or its Subsidiary, as the case may
be, shall immediately make or cause to be made provision whereby the Notes will
be secured equally and ratably with all other obligations secured thereby
pursuant to such agreements and instruments as shall be approved by Majority
Lenders, and in such case the Notes shall have the benefit, to the full extent
that, and with such priority as, Lenders may be entitled under Applicable Law,
of an equitable Lien on such Property securing the Notes. Such violation of
Section 6.4 shall constitute an Event of Default hereunder, whether or not such
provision is made pursuant to the immediately preceding sentence.
6.5. Prohibition of Fundamental Changes. Company will not, and will not
cause or permit any of its Subsidiaries to, enter into any transaction of sale,
transfer, merger or consolidation or amalgamation, except for sales in the
ordinary course of business, or liquidate, wind up or dissolve itself, or suffer
any liquidation or dissolution, except (a) for the liquidation or dissolution of
any Subsidiary and (b) a Subsidiary of Company may merge into, or consolidate
with, Company (provided Company is the survivor) or another Subsidiary of
Company. Company will not, and will not cause or permit any of its Subsidiaries
to, acquire any business or assets from, or capital stock of, or be a party to
any acquisition of, any Person except for purchases of assets to be sold or used
in the ordinary course of business. Company will not transfer any of the issued
and outstanding Capital Stock of any Subsidiary which is a qualified REIT
Subsidiary within the meaning of Section 865(i) of the Code and will not permit
the issuance of any additional shares of such Capital Stock if the issuance
thereof would cause such Subsidiary to fail to be characterized as a qualified
REIT Subsidiary.
6.6. Dispositions of Assets. Company shall not, and shall not permit
any of its Subsidiaries to, sell, lease, assign, or otherwise dispose of any
assets of Company or any of its Subsidiaries in an Asset Sale, or otherwise
consummate any Asset Sale, except so long as there exists no Default or Event of
Default, and no Default or Event of Default would be caused thereby, Company and
its Subsidiaries may consummate Asset Sales for fair market value in an
aggregate amount not to exceed during any period of four consecutive fiscal
quarters 25% of Total Assets (calculated as an amount equal to the result of (a)
the sum of Total Assets as of the first day of each
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fiscal quarter during such four quarter period (b) divided by four), provided
that the Asset Sale Proceeds in excess of $3,000,000 of each Asset Sale which
occurs on a date on which the Amended and Restated Credit Agreement is no longer
in effect are applied as provided in Section 2.5(b) hereof; provided that,
notwithstanding anything herein to the contrary, Company will not dispose of any
assets at any time in an amount that could impair or jeopardize the status of
Company as a Real Estate Investment Trust. On the day of any Asset Sale by
Company or its Subsidiaries in which the Asset Sales Proceeds thereof exceed
$3,000,000, Company shall deliver to Administrative Agent a certificate of an
Authorized Officer certifying as to the amount of gross proceeds thereof and
costs and expenses payable thereof which were deducted in determining the Asset
Sale Proceeds.
6.7. Distributions and Restricted Payments. Company shall not, and
shall not permit any Subsidiary to, make any Restricted Payments, except that,
notwithstanding the immediately preceding subsection, Company may (a) pay
Permitted Distributions unless a Default or Event of Default shall exist or
would be caused thereby, in which case Company may only pay such Distributions
as may be required to maintain the status of Company as a Real Estate Investment
Trust under the Code and (b) establish a stock option plan for employees and
directors of Company and, provided no Default or Event of Default shall exist or
would be caused thereby, Company may repurchase Capital Stock of Company for the
purpose of matching employee stock purchases in connection with Company's
retirement plans.
6.8. Business. Company shall not, and shall not permit any of its
Subsidiaries to, engage to any substantial extent in any line or lines of
business activity other than the lines of business activity engaged in by
Company and its Subsidiaries as of the Closing Date.
6.9. Transactions with Affiliates. Company shall not, and shall not
permit any of its Subsidiaries to, enter into or be party to a transaction with
any Affiliate, including, but not limited to, (a) dispositions of such assets in
an Affiliate, (b) a loan or advance to an Affiliate, unless such Investment is
evidenced by an Intercompany Note, and (c) mergers into, consolidations with, or
purchases or acquisitions of assets from, any Affiliate; provided, (i) that
Company may enter into such transactions if the value of the consideration for
all such transactions (other than Asset Securitizations) entered into after
April 15, 1997 does not exceed $10,000,000 in aggregate amount; (ii) that an
Affiliate who is an individual may serve as a director, officer or employee of
Company, and (iii) that Company and its Subsidiaries may (A) enter into Asset
Securitizations with Asset Securitization Affiliates, subject to the
restrictions in Section 6.6 hereof and the requirements of Section 2.5(b)
hereof, and (B) purchase or acquire Retained Securities.
6.10. Loans and Investments. Company shall not, and shall not permit
any of its Subsidiaries to, make any Investment to, or make or have any
Investment in, any Person, or make any commitment to make any such Investment,
or make any acquisition, except (a) Investments existing on the date hereof as
shown on Schedule 4.13 hereto, (b) Investments in Cash Equivalents, (c)
Investments in travel advances in the ordinary course of business to officers
and employees, (d) Investments in accounts receivable arising in the ordinary
course of business and (e) Investments
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in Subsidiaries of Company in compliance with Section 6.17 hereof.
6.11. Fiscal Year and Accounting Method. Company shall not, and shall
not permit any of its Subsidiaries to, change its fiscal year or method of
accounting, except as may be required by GAAP.
6.12. Amendment of Corporate Documents. Company shall not amend its
articles of organization or bylaws and Company shall not permit any of its
Subsidiaries to amend its articles of organization, bylaws or partnership
agreement in any manner which could reasonably be expected to be materially
adverse to the interests of the Lenders.
6.13. Compliance with ERISA. Company shall not, and shall not permit
any of its Subsidiaries to, directly or indirectly, or permit any member of such
Person's Controlled Group to directly or indirectly, (a) terminate any Plan so
as to result in any material (in the opinion of Administrative Agent) liability
to Company, any Subsidiary of Company or any member of its Controlled Group, (b)
permit to exist any ERISA Event, or any other event or condition, which presents
the risk of any material (in the opinion of Administrative Agent) liability of
Company, any Subsidiary of Company or any member of its Controlled Group, (c)
make a complete or partial withdrawal (within the meaning of Section 4201 of
ERISA) from any Multiemployer Plan so as to result in any material (in the
opinion of Administrative Agent) liability to Company, any Subsidiary of Company
or any member of its Controlled Group, (d) enter into any new Plan or modify any
existing Plan so as to increase its obligations thereunder (except in the
ordinary course of business consistent with past practice) which could result in
any material (in the opinion of Administrative Agent) liability to Company, any
Subsidiary of Company or any member of its Controlled Group, or (e) permit the
present value of all benefit liabilities, as defined in Title IV of ERISA, under
each Plan of Company and each Subsidiary of Company or any member of its
Controlled Group (using the actuarial assumptions utilized by the PBGC upon
termination of a Plan) to materially (in the opinion of Administrative Agent)
exceed the fair market value of Plan assets allocable to such benefits all
determined as of the most recent valuation date for each such Plan.
6.14. Subsidiaries and Other Obligors. Company shall not permit any of
its Subsidiaries to violate any provision of this Article VI.
6.15. Amendments to Material Agreements. Company shall not, nor shall
Company permit any of its Subsidiaries to, amend or change any Loan Paper other
than with the prior written consent of Lenders pursuant to Section 9.1 hereof,
nor shall Company or any of its Subsidiaries change or amend (or take any action
or fail to take any action the result of which is an effective amendment or
change), or accept any waiver or consent with respect to, any Intercompany Note
other than with the prior written consent of Lenders pursuant to Section 9,1
hereof.
6.16. Prohibited Transactions. Company shall not, and shall not permit
any Subsidiary to, sell or otherwise transfer any Property in a transaction
which constitutes a prohibited transaction
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within the meaning of Section 857(b)(6) of the Code if such prohibited
transaction would cause Company or such Subsidiary to fail to satisfy any of the
requirements of Section 856 of the Code.
6.17. No New Subsidiaries. Company shall not, and shall not permit any
of its Subsidiaries to, acquire, incorporate or otherwise organize any
Subsidiary which was not in existence on the Closing Date unless such Subsidiary
(a) executes a Guaranty Agreement, a Subordination Agreement and an Intercompany
Note and (b) delivers to Administrative Agent (i) the executed Guaranty
Agreement, Subordination Agreement and an Officer's Certificate containing
Articles of Incorporation, Bylaws, corporate resolutions, and incumbency of
officers, all in form and substance reasonably satisfactory to Administrative
Agent, and (ii) an opinion of legal counsel of such Subsidiary in form and
substance reasonably satisfactory to Administrative Agent.
6.18. Asset Securitization Affiliates. Company will not permit any
Asset Securitization Affiliate to conduct any active trade or business other
than directly in respect of an Asset Securitization. Without limiting the
generality of the foregoing, Company shall not permit any Asset Securitization
Affiliate to directly or indirectly, other than in conjunction with an Asset
Securitization, (a) incur, assume, guaranty or otherwise create or become liable
in respect of any Indebtedness, (b) make, or permit to remain outstanding, an
Investment in any Person, (c) create or suffer to be created or exist a Lien
upon any part of its property or upon any income, revenues, issues and profits
thereof, (d) sell, transfer, exchange or otherwise dispose of any part of its
property, (e) create, organize or establish any Person, including, without
limitation, any Subsidiary, or (f) maintain, contribute to or assume any
liability with respect to any Person.
ARTICLE VII. EVENTS OF DEFAULT
7.1. Events of Default. Any one or more of the following shall be an
"Event of Default" hereunder, if the same shall occur for any reason whatsoever,
whether voluntary or involuntary, by operation of Law, or otherwise:
(a) Company shall fail to pay any (i) principal under any Loan Paper
when due or (ii) any interest, fees, or other amounts under any Loan Paper
within two Business Days when due;
(b) Any representation or warranty made or deemed made by Company or
any Subsidiary of Company (or any of its officers or representatives) under or
in connection with any Loan Papers shall prove to have been incorrect or
misleading in any material respect when made or deemed made;
(c) Company or any Subsidiary of Company shall fail to perform or
observe any term or condition contained in Article V (other than Section 5.12
hereof) and such failure shall not be remedied within fifteen days after written
notice thereof shall have been given to Company by Administrative Agent;
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(d) Company or any Subsidiary of Company shall fail to perform or
observe Section 5.12 hereof or any term or covenant contained in Article VI;
(e) Company or any Subsidiary of Company shall fail to perform or
observe any other term or covenant contained in any Loan Paper, other than those
described in Sections 7.1(a), (b), (c) and (d), and such failure shall not be
remedied within fifteen days after written notice thereof shall have been given
to Company by Administrative Agent;
(f) Any material provision of any Loan Paper shall, for any reason, not
be valid and binding on Company or any Subsidiary of Company, or not be in full
force and effect, or shall be declared to be null and void; the validity or
enforceability of any Loan Paper shall be contested by Company or any Subsidiary
of Company; Company or any Subsidiary of Company shall deny that it has any or
further liability or obligation under its respective Loan Papers;
(g) Any of the following shall occur: (i) Company or any Subsidiary of
Company shall make an assignment for the benefit of creditors or be unable to
pay its debts generally as they become due; (ii) Company or any Subsidiary of
Company shall petition or apply to any Tribunal for the appointment of a
trustee, receiver, or liquidator of it, or of any substantial part of its
assets, or shall commence any proceedings relating to Company or any Subsidiary
of Company under any Debtor Relief Law, whether now or hereafter in effect;
(iii) any such petition or application shall be filed, or any such proceedings
shall be commenced, against Company or any Subsidiary of Company, or an order,
judgment or decree shall be entered appointing any such trustee, receiver, or
liquidator, or approving the petition in any such proceedings; (iv) any final
order, judgment, or decree shall be entered in any proceedings against Company
or any Subsidiary of Company decreeing its dissolution; (v) any final order,
judgment, or decree shall be entered in any proceedings against Company or any
Subsidiary of Company decreeing its split-up which requires the divestiture of a
substantial part of its assets; or (vi) Company or any Subsidiary of Company
shall petition or apply to any Tribunal for the appointment of a trustee,
receiver, or liquidator of it, or of any substantial part of its assets, or
shall commence any proceedings relating to Company or any Subsidiary of Company
under any Debtor Relief Law, whether now or hereafter in effect;
(h) Company or any Subsidiary of Company shall fail to pay any
Indebtedness or Contingent Liability in an aggregate amount of $1,000,000 or
more when due (whether by scheduled maturity, required prepayment, acceleration,
demand, or otherwise), and such failure shall continue after the applicable
grace period, if any, specified in the agreement or instrument relating to such
Indebtedness or Contingent Liability; or Company or any Subsidiary of Company
shall fail to perform or observe any term or covenant contained in any agreement
or instrument relating to any such Indebtedness or Contingent Liability, when
required to be performed or observed, and such failure shall continue after the
applicable grace period, if any, specified in such agreement or instrument, and
can result in acceleration of the maturity of such Indebtedness or Contingent
Liability; or any such Indebtedness or Contingent Liability shall be declared to
be due and payable, or required to be prepaid (other than by a regularly
scheduled required prepayment), prior to the
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stated maturity thereof;
(i) Company or any Subsidiary of Company shall have any final
judgment(s) outstanding against it for the payment of $500,000 or more, and such
judgment(s) shall remain unstayed, in effect, and unpaid for a period of 60
days;
(j) A Change of Control shall occur;
(k) Company, any Subsidiary of Company, or any ERISA Affiliate shall
have committed a failure described in Section 302(f)(l) of ERISA, and the amount
determined under Section 302(f)(3) of ERISA is equal to or greater than
$100,000;
(l) Company, any Subsidiary, or any ERISA Affiliate shall have been
notified by the sponsor of a Multiemployer Plan that such Plan is in
reorganization or is being terminated, within the meaning of Title IV of ERISA,
if as a result thereof the aggregate annual contributions to all Multiemployer
Plans in reorganization or being terminated is increased over the amounts
contributed to such Plans for the preceding Plan year by an amount exceeding
$50,000;
(m) Company or any Subsidiary of Company shall be required under any
Environmental Law to implement any remedial, neutralization, or stabilization
process or program, the cost of which could constitute a Material Adverse
Change;
(n) Company shall fail or cause to qualify, or be unable to certify to
Lenders its continuing status, as a Real Estate Investment Trust pursuant to
Sections 856 through 860 of the Code; or any Subsidiary which is a qualified
REIT subsidiary within the meaning of Section 856(i) of the Code shall fail to
qualify as a qualified REIT subsidiary within the meaning of Section 856(i) of
the Code; or
(o) An Event of Default (as defined in the Amended and Restated Credit
Agreement) shall occur and be continuing under the Amended and Restated Credit
Agreement.
7.2. Remedies Upon Default. If an Event of Default described in Section
7.1(g) shall occur, the Commitment shall be immediately terminated and the
aggregate unpaid principal balance of and accrued interest on all Advances
shall, to the extent permitted by applicable Law, thereupon become due and
payable concurrently therewith, without any action by Administrative Agent or
any Lender, and without diligence, presentment, demand, protest, notice of
protest or intent to accelerate, or notice of any other kind, all of which are
hereby expressly waived. Subject to the foregoing sentence, if any Event of
Default shall occur and be continuing, Administrative Agent may at its election
(provided (i) Administrative Agent has sent notice to all Lenders of its
intention to do any one ore more of the following and within five Business Days
of such notice Majority Lenders have not notified Administrative Agent not to
take such action or (ii) Administrative Agent in good faith determines that
immediate action is necessary to be taken to protect the Rights of the Lenders),
and
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shall at the discretion of Majority Lenders, do any one or more of the
following:
(a) Declare the entire unpaid balance of all Advances immediately due
and payable, whereupon it shall be due and payable without diligence,
presentment, demand, protest, notice of protest or intent to accelerate, or
notice of any other kind (except notices specifically provided for under Section
7.1), all of which are hereby expressly waived (except to the extent waiver of
the foregoing is not permitted by applicable Law);
(b) Terminate the Commitment;
(c) Reduce any claim of Administrative Agent and Lenders to judgment;
(d) Exercise any Rights afforded under any Loan Papers, by Law,
including but not limited to the UCC, at equity, or otherwise.
7.3. Cumulative Rights. All Rights available to Administrative Agent
and Lenders under the Loan Papers shall be cumulative of and in addition to all
other Rights granted thereto at Law or in equity, whether or not amounts owing
thereunder shall be due and payable, and whether or not Administrative Agent or
any Lender shall have instituted any suit for collection or other action in
connection with the Loan Papers. Nothing contained herein or in any other Loan
Papers shall limit the Right of any Lender to collect its Note upon acceleration
of the Obligations pursuant to the terms of this Agreement.
7.4. Waivers. The acceptance by Administrative Agent or any Lender at
any time and from time to time of partial payment of any amount owing under any
Loan Papers shall not be deemed to be a waiver of any Default or Event of
Default then existing. No waiver by Administrative Agent or any Lender of any
Default or Event of Default shall be deemed to be a waiver of any Default or
Event of Default other than such Default or Event of Default. No delay or
omission by Administrative Agent or any Lender in exercising any Right under the
Loan Papers shall impair such Right or be construed as a waiver thereof or an
acquiescence therein, nor shall any single or partial exercise of any such Right
preclude other or further exercise thereof, or the exercise of any other Right
under the Loan Papers or otherwise.
7.5. Performance by Administrative Agent or any Lender. Should any
covenant of Company or any Subsidiary of Company fail to be performed in
accordance with the terms of the Loan Papers, Administrative Agent may, at its
option, perform or attempt to perform such covenant on behalf of Company or such
Subsidiary. Notwithstanding the foregoing, it is expressly understood that
neither Administrative Agent nor any Lender assumes, and shall not ever have,
except by express written consent of Administrative Agent or such Lender, (a)
any liability or responsibility for the performance of any duties or covenants
of Company or any Subsidiary of Company or (b) any implied or fiduciary duties
whatsoever to Company or any Subsidiary of Company.
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7.6. Expenditures. Company shall reimburse Administrative Agent and
each Lender for any reasonable sums spent by it in connection with the exercise
of any Right provided herein. Such sums shall bear interest at the lesser of (a)
the Base Rate in effect from time to time, plus 3.0% and (b) the Highest Lawful
Rate, from the date spent until the date of repayment by Company.
7.7. Control. None of the covenants or other provisions contained in
this Agreement shall, or shall be deemed to, give Administrative Agent or any
Lender any Rights to exercise control over the affairs and/or management of
Company or any Subsidiary of Company, the power of Administrative Agent and each
Lender being limited to the Rights to exercise the remedies provided in this
Article.
ARTICLE VIII. ADMINISTRATIVE AGENT
8.1. Authorization and Action. Each Lender hereby appoints and
authorizes Administrative Agent to take such action as Administrative Agent on
its behalf and to exercise such powers under this Agreement and the other Loan
Papers as are delegated to Administrative Agent by the terms of the Loan Papers,
together with such powers as are reasonably incidental thereto. As to any
matters not expressly provided for by this Agreement and the other Loan Papers
(including without limitation enforcement or collection of the Notes),
Administrative Agent shall not be required to exercise any discretion or take
any action, but shall be required to act or to refrain from acting (and shall be
fully protected in so acting or refraining from acting) upon the instructions of
Majority Lenders (or all Lenders, if required under Section 9.1), and such
instructions shall be binding upon all Lenders; provided, however, that
Administrative Agent shall not be required to take any action which exposes
Administrative Agent to personal liability or which is contrary to any Loan
Papers or applicable Law. Administrative Agent agrees to distribute promptly to
each Lender copies of any notices, requests and other information received from
Company pursuant to the terms of this Agreement, and to distribute to each
applicable Lender in like funds all amounts delivered to Administrative Agent by
Company for the Ratable or individual account of any Lender, with such funds to
be distributed on the date of receipt by Administrative Agent provided such
funds are received by the time prescribed in Section 2.12(a), or the immediately
following Business Day if such funds are received after such time (any funds not
so distributed by Administrative Agent shall bear interest payable by
Administrative Agent at a rate per annum equal to the Federal Funds Rate to but
not including the date of receipt by such Lender).
8.2. Administrative Agent's Reliance, Etc. Neither Administrative
Agent, nor any of its directors, officers, agents, employees, Affiliates, or
representatives shall be liable for any action taken or omitted to be taken by
it or them under or in connection with this Agreement or any other Loan Paper,
except for its or their own gross negligence or willful misconduct. Without
limitation of the generality of the foregoing, Administrative Agent (a) may
treat the payee of any Note as the holder thereof until Administrative Agent
receives written notice of the assignment or transfer thereof signed by such
payee and in form satisfactory to Administrative Agent; (b) may consult with
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legal counsel (including counsel for Company or any of its Subsidiaries),
independent public accountants, and other experts selected by it, and shall not
be liable for any action taken or omitted to be taken in good faith by it in
accordance with the advice of such counsel, accountants, or experts; (c) makes
no warranty or representation to any Lender and shall not be responsible to any
Lender for any statements, warranties, or representations made in or in
connection with this Agreement or any other Loan Papers; (d) shall not have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants, or conditions of this Agreement or any other Loan Papers
on the part of Company or its Subsidiaries or to inspect the Property (including
the books and records) of Company or its Subsidiaries; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency, or value of this Agreement, any other
Loan Papers, or any other instrument or document furnished pursuant hereto; and
(f) shall incur no liability under or in respect of this Agreement or any other
Loan Papers by acting upon any notice, consent, certificate, or other instrument
or writing believed by it to be genuine and signed or sent by the proper party
or parties.
8.3. NationsBank of Texas, N.A. and Affiliates. With respect to its
Commitment, its Advances, and any Loan Papers, NationsBank of Texas, N.A. has
the same Rights under this Agreement as any other Lender and may exercise the
same as though it were not Administrative Agent. NationsBank of Texas, N.A. and
its Affiliates may accept deposits from, lend money to, act as trustee under
indentures of, and generally engage in any kind of business with, Company or any
Subsidiary of Company, any Affiliate thereof, and any Person who may do business
therewith, all as if NationsBank of Texas, N.A. were not Administrative Agent
and without any duty to account therefor to any Lender.
8.4. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon Administrative Agent or any other
Lender, and based on the financial statements referred to in Section 4.4 hereof
and such other documents and information as it has deemed appropriate, made its
own credit analysis and decision to enter into this Agreement. Each Lender also
acknowledges that it will, independently and without reliance upon
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 decisions in taking or not taking action under this Agreement and the
other Loan Papers.
8.5. Indemnification by Lenders. Lenders shall indemnify Administrative
Agent, pro rata, from and against any and all liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, or disbursements
of any kind or nature whatsoever which may be imposed on, incurred by, or
asserted against Administrative Agent in any way relating to or arising out of
any Loan Papers or any action taken or omitted by Administrative Agent
thereunder, including mere or ordinary negligence of Administrative Agent;
provided, however, that no Lender shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses, or disbursements resulting from Administrative Agent's gross
negligence or willful misconduct. Without limitation of the
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foregoing, Lenders shall reimburse Administrative Agent, pro rata, promptly upon
demand for any out-of-pocket expenses (including reasonable attorneys' fees)
incurred by Administrative Agent in connection with the preparation, execution,
delivery, administration, modification, amendment, or enforcement (whether
through negotiation, legal proceedings or otherwise) of, or legal and other
advice in respect of rights or responsibilities under, the Loan Papers. The
indemnity provided in this Section 8.5 shall survive the termination of this
Agreement.
8.6. Successor Administrative Agent. Administrative Agent may resign at
any time by giving written notice thereof to Lenders and Company, and may be
removed at any time with cause by the Majority Lenders or without cause by
action of all Lenders (other than Administrative Agent, if it is a Lender);
provided, however, so long as (a) NationsBank of Texas, N.A. is a Lender and (b)
no Default or Event of Default has occurred and is continuing, NationsBank of
Texas, N.A. shall not have the right to resign as Administrative Agent. Upon any
such resignation, Majority Lenders shall have the right, with the consent of
Company (which consent shall not be unreasonably withheld), to appoint a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed and shall have accepted such appointment within thirty days
after the retiring Administrative Agent's giving of notice of resignation, then
the retiring Administrative Agent may, on behalf of Lenders, with the consent of
Company (which consent shall not be unreasonably withheld), appoint a successor
Administrative Agent, which shall be a commercial bank organized under the Laws
of the United States of America or of any State thereof and having a combined
capital and surplus of at least $250,000,000. 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 and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations under the Loan Papers, provided that (a) if the retiring or removed
Administrative Agent is unable to appoint a successor Administrative Agent and
(b) a Default or Event of Default shall have occurred and be continuing,
Administrative Agent shall, after the expiration of a sixty day period from the
date of notice, be relieved of all obligations as Administrative Agent
hereunder. Notwithstanding any Administrative Agent's resignation or removal
hereunder, the provisions of this Article shall continue to inure to its benefit
as to any actions taken or omitted to be taken by it while it was Administrative
Agent under this Agreement.
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ARTICLE IX. MISCELLANEOUS
9.1. Amendments and Waivers. No amendment or waiver of any provision of
this Agreement or any other Loan Papers, nor consent to any departure by Company
or any Subsidiary of Company therefrom, shall be effective unless the same shall
be in writing and signed by Administrative Agent with the consent of Majority
Lenders, and then any such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given; provided,
however, that no amendment, waiver, or consent shall (and the result of action
or failure to take action shall not) unless in writing and signed by all of
Lenders and Administrative Agent, (a) increase the Commitment, (b) reduce any
principal, interest, fees, or other amounts payable hereunder, or waive or
result in the waiver of any Event of Default under Section 7.1(a), (c) extend
the Maturity Date or otherwise postpone any date fixed for any payment of
principal, interest, fees, or other amounts payable hereunder, (d) release any
Guaranties securing the Obligations, other than releases contemplated hereby and
by the Loan Papers, (e) change the definition of Specified Percentage or the
number of Lenders required to take any action hereunder, (f) amend this Section
9.1, or (g) release or amend any Subordination Agreement. No amendment, waiver,
or consent shall affect the Rights or duties of Administrative Agent under any
Loan Papers, unless it is in writing and signed by Administrative Agent in
addition to the requisite number of Lenders.
9.2. Notices.
(a) Manner of Delivery. All notices communications and other materials
to be given or delivered under the Loan Papers shall, except in those cases
where giving notice by telephone is expressly permitted, be given or delivered
in writing. All written notices, communications and materials shall be sent by
registered or certified mail, postage prepaid, return receipt requested, by
telecopier, or delivered by hand. In the event of a discrepancy between any
telephonic notice and any written confirmation thereof, such written
confirmation shall be deemed the effective notice except to the extent
Administrative Agent, any Lender or Company has acted in reliance on such
telephonic notice.
(b) Addresses. All notices, communications and materials to be given or
delivered pursuant to this Agreement shall be given or delivered at the
following respective addresses and telecopier and telephone numbers and to the
attention of the following individuals or departments:
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If to Company:
Franchise Finance Corporation of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
Telephone No.: (602) 585-4500
Facsimile No. (602) 585-2225
Attention: John R. Barravecchia
Executive Vice President and Chief Financial
Officer
With a copy to:
Franchise Finance Corporation of America
The Perimeter Center
17207 North Perimeter Drive
Scottsdale, Arizona 85255
Telephone No.: (602) 585-4500
Facsimile No. (602) 585-2225
Attention: Dennis L. Ruben, Esq.
Executive Vice President and General Counsel
If to Administrative Agent:
NationsBank of Texas, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-3363
Facsimile No.: (214) 508-0980
Attention: Kimberley A. Knop
Vice President
(c) If to any Lender, to its address set forth below opposite its
signature or on any Assignment and Acceptance or amendment to this Agreement;
or at such other address or, telecopier or telephone number or to the attention
of such other individual or department as the party to which such information
pertains may hereafter specify for the purpose in a notice to the other
specifically captioned "Notice of Change of Address".
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(d) Effectiveness. Each notice, communication and any material to be
given or delivered to any party pursuant to this Agreement shall be effective or
deemed delivered or furnished (i) if sent by mail, on the fifth day after such
notice, communication or material is deposited in the mail, addressed as above
provided, (ii) if sent by telecopier, when such notice, communication or
material is transmitted to the appropriate number determined as above provided
in this Section 9.2 and the appropriate receipt is received or otherwise
acknowledged, (iii) if sent by hand delivery or overnight courier, when left at
the address of the addressee addressed as above provided, and (iv) if given by
telephone, when communicated to the individual or any member of the department
specified as the individual or department to whose attention notices,
communications and materials are to be given or delivered except that notices of
a change of address, telecopier or telephone number or individual or department
to whose attention notices, communications and materials are to be given or
delivered shall not be effective until received; provided, however, that notices
to Administrative Agent pursuant to Article II shall be effective when received.
Company agrees that Administrative Agent shall have no duty or obligation to
verify or otherwise confirm telephonic notices given pursuant to Article II, and
agrees to indemnify and hold harmless Administrative Agent and Lenders for any
and all liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, claims, costs, and expenses resulting, directly or indirectly,
from acting upon any such notice.
9.3. Parties in Interest. All covenants and agreements contained in
this Agreement and all other Loan Papers shall bind and inure to the benefit of
the respective successors and assigns of the parties hereto. Each Lender may
from time to time assign or transfer its interests hereunder pursuant to Section
9.4 hereof. Neither Company nor any Subsidiary of Company may assign or transfer
its Rights or obligations under any Loan Paper without the prior written consent
of Administrative Agent.
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9.4. Assignments and Participations.
(a) Subject to the following sentence, each Lender (an "Assignor") may
assign its Rights and obligations as a Lender under the Loan Papers to one or
more Eligible Assignees pursuant to an Assignment and Acceptance, so long as (i)
each assignment shall be of a constant, and not a varying percentage of all
Rights and obligations thereunder, (ii) each Assignor shall obtain in each case
the prior written consent of Administrative Agent and Company, which consent
shall not be unreasonably withheld (provided, however, notwithstanding anything
herein to the contrary, no consent of Company is required for any assignment
during any time that an Event of Default has occurred and is continuing), (iii)
each Assignor shall in each case pay a $3,500 processing fee to Administrative
Agent, (iv) no such assignment is for an amount less than $10,000,000, and (v)
so long as no Default or Event of Default has occurred and is continuing,
NationsBank of Texas, N.A. shall retain an amount of the Commitment not less
than the lesser of (A) 10% of the Commitment or (B) $40,000,000. Within five
Business Days after Administrative Agent receives notice of any such assignment,
Company shall execute and deliver to Administrative Agent, in exchange for the
Notes issued to Assignor, new Notes to the order of such Assignor and its
assignee in amounts equal to their respective Specified Percentages of the
Commitment, if the Commitment is outstanding. Such new Notes shall be dated the
effective date of the assignment. It is specifically acknowledged and agreed
that on and after the effective date of each assignment, the assignee shall be a
party hereto and shall have the Rights and obligations of a Lender under the
Loan Papers.
(b) Each Lender may sell participations to one or more Persons in all
or any of its Rights and obligations under the Loan Papers; provided, however,
that (i) such Lender's obligations under the Loan Papers shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) such Lender shall remain the holder
of its Notes for all purposes of the Loan Papers, (iv) the participant shall be
granted the Right to vote on or consent to only those matters described in
Sections 9.1(a), (b), (c) and (d), and (v) Company and each Subsidiary of
Company, Administrative Agent, and other Lenders shall continue to deal solely
and directly with such Lender in connection with its Rights and obligations
under the Loan Papers.
(c) Any Lender may, in connection with any assignment or participation,
or proposed assignment or participation, disclose to the assignee or
participant, or proposed assignee or participant, any information relating to
Company or any Subsidiary of Company furnished to such Lender by or on behalf of
Company or any Subsidiary of Company, provided such Person executes a
Confidentiality Agreement.
(d) Notwithstanding any other provision set forth in this Agreement,
each Lender may at any time create a security interest in all or any portion of
its Rights under this Agreement (including, without limitation, the Advances
owing to it and the Note or Notes held by it) in favor of any Federal Reserve
Bank in accordance with Regulation A of the Board of Governors of the Federal
Reserve System.
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9.5. Sharing of Payments. If any Lender shall obtain any payment
(whether voluntary, involuntary, through the exercise of any Right of set-off,
or otherwise) on account of its Advances in excess of its pro rata share of
payments made by Company, such Lender shall forthwith purchase participations in
Advances made by the other Lenders as shall be necessary to share the excess
payment pro rata with each of them; provided, however, that if any of such
excess payment is thereafter recovered from the purchasing Lender, its purchase
from each Lender shall be rescinded and each Lender shall repay the purchase
price to the extent of such recovery together with a pro rata share of any
interest or other amount paid or payable by the purchasing Lender in respect of
the total amount so recovered. Company agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 9.5 may, to the
fullest extent permitted by Law, exercise all its Rights of payment (including
the Right of set-off) with respect to such participation as fully as if such
Lender were the direct creditor of Company in the amount of such participation.
9.6. Right of Set-off. Upon the occurrence and during the continuance
of any Event of Default, each Lender is hereby authorized at any time and from
time to time, to the fullest extent permitted by Law, to set-off and apply any
and all deposits (general or special, time or demand, provisional or final) at
any time held and other indebtedness at any time owing by such Lender to or for
the credit or the account of Company against any and all of the obligations of
Company now or hereafter existing under this Agreement and the other Loan
Papers, whether or not Administrative Agent or any Lender shall have made any
demand under this Agreement or the other Loan Papers, and even if such
obligations are unmatured. Each Lender shall promptly notify Company after any
such set-off and application, provided that the failure to give such notice
shall not affect the validity of such set-off and application. The Rights of
each Lender under this Section 9.6 are in addition to other Rights (including,
without limitation, other Rights of set-off) which such Lender may have.
9.7. Costs, Expenses, and Taxes.
(a) Company agrees to pay on demand (i) all reasonable costs and
expenses of Administrative Agent and its Affiliates in connection with the
preparation and negotiation of all Loan Papers, including without limitation the
reasonable fees and out-of-pocket expenses of Special Counsel, and the
reasonable costs and expenses of Administrative Agent and its Affiliates in
connection with the syndication of the Commitment and (ii) all costs and
expenses (including reasonable attorneys' fees and expenses) of Administrative
Agent and each Lender in connection with administration, interpretation,
modification, amendment, waiver, or release of any Loan Papers and any
restructuring, work-out, or collection of any portion of the Obligations or the
enforcement of any Loan Papers.
(b) In addition, Company shall pay any and all stamp, debt, and other
Taxes payable or determined to be payable in connection with any payment
hereunder (other than Taxes on the overall net income of Administrative Agent or
any Lender or franchise Taxes or Taxes on capital or capital receipts of
Administrative Agent or any Lender), or the execution, delivery, or recordation
of any Loan Papers, and agrees to save Administrative Agent and each Lender
harmless from and against
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any and all liabilities with respect to, or resulting from any delay in paying
or omission to pay any Taxes in accordance with this Section 9.7, including any
penalty, interest, and expenses relating thereto. All payments by Company or any
Subsidiary of Company under any Loan Papers shall be made free and clear of and
without deduction for any present or future Taxes (other than Taxes on the
overall net income of Administrative Agent or any Lender of any nature now or
hereafter existing, levied, or withheld, or franchise Taxes or Taxes on capital
or capital receipts of Administrative Agent or any Lender), including all
interest, penalties, or similar liabilities relating thereto. If Company shall
be required by Law to deduct or to withhold any Taxes from or in respect of any
amount payable hereunder, (i) the amount so payable shall be increased to the
extent necessary so that, after making all required deductions and withholdings
(including Taxes on amounts payable to Administrative Agent or any Lender
pursuant to this sentence), Administrative Agent or any Lender receives an
amount equal to the sum it would have received had no such deductions or
withholdings been made, (ii) Company shall make such deductions or withholdings,
and (iii) Company shall pay the full amount deducted or withheld to the relevant
taxing authority in accordance with applicable Law. Without prejudice to the
survival of any other agreement of Company hereunder, the agreements and
obligations of Company contained in this Section 9.7 shall survive the execution
of this Agreement, termination of the Commitment, repayment of the Obligations,
satisfaction of each agreement securing or assuring the Obligations and
termination of this Agreement and each other Loan Paper.
(c) Within 30 days after the date of any payment of Taxes, Company will
furnish to Administrative Agent the original or a certified copy of a receipt
evidencing payment thereof. If no Taxes are payable in respect of any payment
hereunder, Company will furnish to Administrative Agent a certificate from each
appropriate taxing authority, or an opinion of counsel acceptable to
Administrative Agent, in either case stating that such payment is exempt from or
not subject to Taxes, provided, however, that such certificate or opinion need
only be given if: (i) Company makes any payment from any account located outside
the United States, or (ii) the payment is made by a payor that is not a United
States Person. For purposes of this Section 9.7 the terms "United States" and
"United States Person" shall have the meanings set forth in Section 7701 of the
Code.
(d) Each Lender which is not a United States Person (as defined in
Section 7701 of the Code) hereby agrees that:
(i) it shall, no later than the Closing Date (or, in the case
of a Lender which becomes a party hereto pursuant to Section 9.4 after
the Closing Date, the date upon which such Lender becomes a party
hereto) deliver to Company through Administrative Agent, with a copy to
Administrative Agent:
(A) if any lending office is located in the United States
of America, two (2) accurate and complete signed
originals of Internal Revenue Service Form 4224 or
any successor thereto ("Form 4224"),
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(B) if any lending office is located outside the United
States of America, two (2) accurate and complete
signed originals of Internal Revenue Service Form
1001 or any successor thereto ("Form 1001").
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such lending office or lending offices under this
Agreement free from withholding of United States Federal income tax;
(ii) if at any time such Lender changes its lending office or
lending offices or selects an additional lending office it shall, at
the same time or reasonably promptly thereafter but only to the extent
the forms previously delivered by it hereunder are no longer effective,
deliver to Company through Administrative Agent, with a copy to
Administrative Agent, in replacement for the forms previously delivered
by it hereunder:
(A) if such changed or additional lending office is
located in the United States of America, two (2)
accurate and complete signed originals of Form 4224;
or
(B) otherwise, two (2) accurate and complete signed
originals of Form 1001,
in each case indicating that such Lender is on the date of delivery
thereof entitled to receive payments of principal, interest and fees
for the account of such changed or additional lending office under this
Agreement free from withholding of United States Federal income tax;
(iii) it shall, before or promptly after the occurrence of any
event (including the passing of time but excluding any event mentioned
in clause (ii) above) requiring a change in the most recent Form 4224
or Form 1001 previously delivered by such Lender and if the delivery of
the same be lawful, deliver to Company through Administrative Agent
with a copy to Administrative Agent, two (2) accurate and complete
original signed copies of Form 4224 or Form 1001 in replacement for the
forms previously delivered by such Lender;
(iv) it shall, promptly upon the request of Company to that
effect, deliver to Company such other forms or similar documentation as
may be required from time to time by any applicable law, treaty, rule
or regulation in order to establish such Lender's tax status for
withholding purposes; and
(v) it shall notify Company within 30 days after any event
(including an amendment to, or a change in any applicable law or
regulation or in the written interpretation thereof by any regulatory
authority or any judicial authority, or by ruling applicable to such
Lender of any governmental authority charged with the interpretation or
administration of any law) shall occur that results in such Lender no
longer being capable of receiving payments without any deduction or
withholding of United States federal income tax.
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9.8. Rate Provision. It is not the intention of any party to any Loan
Papers to make an agreement violative of the Laws of any applicable jurisdiction
relating to usury. In no event shall Company or any other Person be obligated to
pay any amount in excess of the Maximum Amount. If Administrative Agent or any
Lender ever receives, collects or applies, as interest, any such excess, such
amount which would be excessive interest shall be deemed a partial repayment of
principal and treated hereunder as such; and if principal is paid in full, any
remaining excess shall be paid to Company or the other Person entitled thereto.
In determining whether or not the interest paid or payable, under any specific
contingency, exceeds the Maximum Amount, Company, each Subsidiary of Company,
Administrative Agent and each Lender shall, to the maximum extent permitted
under Applicable Law, (a) characterize any nonprincipal payment as an expense,
fee or premium rather than as interest, (b) exclude voluntary prepayments and
the effect thereof, and (c) amortize, prorate, allocate and spread in equal
parts, the total amount of interest throughout the entire contemplated term of
the Obligations so that the interest rate is uniform throughout the entire term
of the Obligations; provided that if the Obligations are paid and performed in
full prior to the end of the full contemplated term thereof, and if the interest
received for the actual period of existence thereof exceeds the Maximum Amount,
Administrative Agent or Lenders, as appropriate, shall refund to Company the
amount of such excess or credit the amount of such excess against the total
principal amount owing, and, in such event, neither Administrative Agent nor any
Lender shall be subject to any penalties provided by any Laws for contracting
for, charging or receiving interest in excess of the Maximum Amount. This
Section 9.8 shall control every other provision of all agreements among the
parties to the Loan Papers pertaining to the transactions contemplated by or
contained in the Loan Papers.
9.9. Confidentiality. Each Lender and Administrative Agent agrees (on
behalf of itself and each of its Affiliates, directors, officers, employees and
representatives) to (a) keep confidential any non-public information supplied to
it by Company pursuant to this Agreement which is identified by Company as being
confidential at the time the same is delivered to Lenders or Administrative
Agent, including, without limitation, written information and information
transferred visually or electronically, together with all notes, analyses,
compilations, studies or other documents that contain all or a portion of such
information (collectively, "Confidential Information") and (b) use the
Confidential Information solely in connection with the Loan Papers and the
evaluation of Company and its Subsidiaries, provided that nothing herein shall
limit the disclosure of any Confidential Information (a) to the extent required
by Law or judicial process, (b) to counsel for any Lender or Administrative
Agent, (c) to bank examiners, auditors or accountants of any Lender, (d) to
Administrative Agent or any other Lender, (e) in connection with any Litigation
to which any one or more of Lenders is a party, provided, further, that, unless
specifically prohibited by applicable Law or court order, each Lender shall,
prior to disclosure thereof, give prompt notification to Company of any request
for disclosure of any such non-public information (i) by any governmental agency
or representative thereof (other than any such request in connection with an
examination of such Lender's financial condition by such governmental agency) or
(ii) pursuant to legal process, or (f) to any assignee or participant (or
prospective assignee or participant) so long as such assignee or participant (or
prospective assignee or participant) executes a Confidentiality Agreement. With
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respect to any disclosure of any Confidential Information set forth in subclause
(i) or (ii) of clause (e) above, each Lender agrees, to the extent not
prohibited by applicable law or court order, to (a) cooperate with Company so
that Company may seek a protective order or other appropriate remedy and (b) use
its best efforts to obtain an order or reasonable assurance that confidential
treatment will be afforded such Confidential Information. At the earlier of such
time as (a) a Person is no longer a Lender or participant under this Agreement,
or (b) all Advances under this Agreement are paid in full and the Commitment is
terminated, upon written request by Company and subject to any restrictions or
regulations of any Tribunal having supervisory authority over Lenders, such
Lender or participant shall return to Company the Confidential Information which
is in tangible form, including any copies which such Lender or participant or
any Persons to whom such Lender or participant transmitted the Confidential
Information may have made, and such Lender or participant or such Person will
destroy all abstracts, summaries thereof or references thereto in such Lender's
or participant's or such Person's documents, and after written request by
Company, shall promptly provide Company reasonable assurance in writing that
such Lender or participant or such Person have complied with this paragraph.
Each Lender acknowledges that Company is in the business of financing commercial
real estate, equipment and enterprises and from time to time such Lender and
Company may be in direct competition with each other for business. This
Agreement does not constitute a license for any Lender to use, employ or exploit
the Confidential Information to gain any advantage in the marketplace against
Company; it being expressly understood and agreed that any use, employment or
exploitation of the Confidential Information for a purpose not expressly
permitted herein is strictly prohibited.
9.10. Severability. If any provision of any Loan Papers is held to be
illegal, invalid, or unenforceable under present or future Laws during the term
thereof, such provision shall be fully severable, the appropriate Loan Paper
shall be construed and enforced as if such illegal, invalid, or unenforceable
provision had never comprised a part thereof, and the remaining provisions
thereof shall remain in full force and effect and shall not be affected by the
illegal, invalid, or unenforceable provision or by its severance therefrom.
Furthermore, in lieu of such illegal, invalid, or unenforceable provision there
shall be added automatically as a part of such Loan Paper a legal, valid, and
enforceable provision as similar in terms to the illegal, invalid, or
unenforceable provision as may be possible.
9.11. Exceptions to Covenants. Neither Company nor any of its
Subsidiaries shall be deemed to be permitted to take any action or to fail to
take any action that is permitted as an exception to any covenant in any Loan
Papers, or that is within the permissible limits of any covenant, if such action
or omission would result in a violation of any other covenant in any Loan
Papers.
9.12. Counterparts. This Agreement and the other Loan Papers may be
executed in any number of counterparts, all of which taken together shall
constitute one and the same instrument. In making proof of any such agreement,
it shall not be necessary to produce or account for any counterpart other than
one signed by the party against which enforcement is sought.
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9.13. GOVERNING LAW; WAIVER OF JURY TRIAL.
(a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS SHALL BE DEEMED TO BE
CONTRACTS MADE AND PERFORMABLE IN DALLAS, TEXAS, AND SHALL BE GOVERNED BY AND
CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS (WITHOUT GIVING
EFFECT TO CONFLICT OF LAWS) AND THE UNITED STATES OF AMERICA. WITHOUT EXCLUDING
ANY OTHER JURISDICTION, COMPANY AGREES THAT THE STATE AND FEDERAL COURTS OF
TEXAS LOCATED IN DALLAS, TEXAS, WILL HAVE JURISDICTION OVER PROCEEDINGS IN
CONNECTION HEREWITH. TO THE MAXIMUM EXTENT PERMITTED BY LAW, COMPANY HEREBY
WAIVES ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY OF ANY DISPUTE (WHETHER A
CLAIM IN TORT, CONTRACT, EQUITY, OR OTHERWISE) ARISING UNDER OR RELATING TO THIS
AGREEMENT, THE OTHER LOAN PAPERS, OR ANY RELATED MATTERS, AND AGREES THAT ANY
SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE SITTING WITHOUT A JURY.
(b) COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS UPON
IT. COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE UPON IT BY REGISTERED
MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO COMPANY AT ITS ADDRESS DESIGNATED
FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL BE DEEMED TO BE
COMPLETED FIVE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL. NOTHING IN THIS
SECTION 9.13 SHALL AFFECT THE RIGHT OF ADMINISTRATIVE AGENT OR ANY LENDER TO
SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
9.14. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES REGARDING THE SUBJECT MATTER
HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENT OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
================================================================================
REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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IN WITNESS WHEREOF, this Credit Agreement is executed as of the date
first set forth above.
COMPANY:
FRANCHISE FINANCE CORPORATION OF
AMERICA
By: /s/ John R. Barravecchia
-------------------------------------
John R. Barravecchia
Executive Vice President and
Chief Financial Officer
LENDERS:
NATIONSBANK OF TEXAS, N.A., individually
and as Administrative Agent
Specified Percentage:
100%
By: /s/ Frank M. Johnson
-------------------------------------
Name: Frank M. Johnson
--------------------------------
Title: Senior Vice President
-------------------------------
Address:
901 Main, 67th Floor
Dallas, Texas 75202
Facsimile: (214) 508-0980
Attention: Frank M. Johnson
Telephone: (214) 508-3091
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EXHIBIT A
PROMISSORY NOTE
$ Dallas, Texas January 27, 1998
FOR VALUE RECEIVED, the undersigned, FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the
order of __________ ("Lender") ___________, payable at such times, and in such
amounts, as are specified in the Credit Agreement as hereinafter defined. The
books and records of Administrative Agent shall be prima facie evidence of all
sums due Lender.
Borrower promises to pay interest on the unpaid principal amount of the
Advances from the date made until such principal amount is paid in full, at such
interest rates, and payable at such times, as are specified in the Credit
Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Administrative Agent (as defined in the Credit Agreement)
(for the account of Lender) at its principal banking house at NationsBank Plaza,
901 Main Street, Dallas, Texas 75202, or such other place as Administrative
Agent may direct, in immediately available funds.
This Note is one of the Notes evidencing Obligations under the
Revolving Loans referred to in, and is entitled to the benefits of, Credit
Agreement dated as of January 27, 1998, among Borrower, NationsBank of Texas,
N.A., as Administrative Agent, Lender and certain other lenders (as from time to
time amended, modified or supplemented, the "Credit Agreement"). The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of an Event of Default (as defined in the
Credit Agreement) and also for prepayments on account of principal hereof prior
to the maturity hereof upon the terms and conditions therein specified.
Borrower and each guarantor, surety and endorser waives demand,
presentment, notice of dishonor, protest and diligence in collecting sums due
hereunder; agrees to application of any debt of Lender to the payment hereof;
agrees that extensions and renewals without limit as to number, acceptance of
any number of partial payments, releases of any party liable hereon, and
releases or substitutions of collateral, before or after maturity, shall not
release or discharge its obligation under this Note; and agrees to pay in
addition to all other sums due hereunder reasonable attorney's fees if this Note
is placed in the hands of an attorney for collection or if it is collected
through bankruptcy or other judicial proceeding. Borrower agrees that during the
full term hereof the maximum lawful interest rate for this Note determined under
Texas law shall be the weekly ceiling as specified in Article 5069-1D of
V.A.T.S.
<PAGE>
Further, to the extent that any other lawful rate ceiling exceeds the rate
ceiling so determined, then the higher rate ceiling shall apply. Chapter 15 of
the Texas Credit Code does not apply to this Note.
This Note shall be governed by and construed in accordance with the
laws of the State of Texas.
FRANCHISE FINANCE CORPORATION
OF AMERICA, a Delaware corporation
By:
John R. Barravecchia
Executive Vice President and
Chief Financial Officer
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EXHIBIT B
GUARANTY AGREEMENT
------------------
THIS GUARANTY AGREEMENT (this "Guaranty"), dated as of January 27, 1998
(this "Guaranty"), is made by FFCA Acquisition Corporation, a Delaware
corporation and FFCA Institutional Advisors, Inc., a Delaware corporation
(collectively, the "Guarantors"), of the obligations of Franchise Finance
Corporation of America, a Delaware corporation ("Company"), under the Credit
Agreement (defined below) among the Company, NationsBank of Texas, N.A. as
Administrative Agent ("Administrative Agent"), and the lenders parties to the
Credit Agreement (singly, a "Lender" and collectively, the "Lenders").
BACKGROUND
----------
1. The Company, the Administrative Agent, and the Lenders have entered
into a Credit Agreement, dated as of January 27, 1998, (said Credit Agreement,
as it may hereafter be amended or otherwise modified from time to time, being
the "Credit Agreement"). The capitalized terms not otherwise defined herein have
the meanings specified in the Credit Agreement.
2. Pursuant to the Credit Agreement, the Company may, subject to the
terms of the Credit Agreement and the other Loan Papers, request that the
Lenders make Advances.
3. It is a condition precedent to the obligation of the Lenders to make
such Advances that each Guarantor guarantee repayment thereof upon the terms and
conditions set forth herein.
4. Each of the Guarantors is a Subsidiary of the Company, and the
Company and each of the Guarantors are members of the same consolidated group of
companies and are engaged in related businesses.
5. The Board of Directors of each Guarantor has determined that (i) the
execution, delivery, and performance of this Guaranty is necessary and
convenient to the conduct, promotion, and attainment of each Guarantor's
business and (ii) the Advances may reasonably be expected to benefit, directly
or indirectly, each Guarantor.
6. The Guarantors desire to induce the Lenders to make such Advances.
NOW, THEREFORE, in consideration of the premises and in order to induce
the Lenders to make Advances under the Credit Agreement, the Guarantors hereby
agree as follows:
<PAGE>
1. Guaranty.
(a) Each Guarantor, jointly and severally, hereby
unconditionally guarantees the full and punctual payment of, and
promises to pay, when due, whether at stated maturity, by mandatory
prepayment, by acceleration or otherwise, the Obligations, and agrees
to pay any and all reasonable expenses (including reasonable counsel
fees and expenses) incurred in enforcement or collection of all or any
part thereof, whether such obligations, indebtedness and liabilities
are direct, indirect, fixed, contingent, joint, several or joint and
several, and any rights under this Guaranty.
(b) Anything contained in this Guaranty to the contrary
notwithstanding, the obligations of each Guarantor hereunder shall be
limited to a maximum aggregate amount equal to the largest amount that
would not render its obligations hereunder subject to avoidance as a
fraudulent transfer or conveyance under Section 548 of title 11 of the
United States Code or any applicable provisions of comparable state law
(collectively, the "Fraudulent Transfer Laws"), in each case after
giving effect to all other liabilities of such Guarantor, contingent or
otherwise, that are relevant under the Fraudulent Transfer Laws
(specifically excluding, however, any liabilities of such Guarantor in
respect of intercompany indebtedness to the Company or other Affiliates
of the Company to the extent that such indebtedness would be discharged
in an amount equal to the amount paid by such Guarantor hereunder) and
treating as assets, subject to Paragraph 4(a) hereof, to the value (as
determined under the applicable provisions of the Fraudulent Transfer
Laws) of any rights to subrogation or contribution of such Guarantor
pursuant to (i) Applicable Law or (ii) any agreement providing for an
equitable allocation among such Guarantor and other Affiliates of the
Company of obligations arising under guaranties by such parties.
2. Guaranty Absolute. The Guarantors guarantee that the Obligations
will be paid strictly in accordance with the terms of the Credit Agreement, the
Notes, and the other Loan Papers, regardless of any Applicable Law, regulation
or order now or hereafter in effect in any jurisdiction affecting any of such
terms or the rights of the Lender with respect thereto; provided, however,
nothing contained in this Guaranty shall require the Guarantors to make any
payment under this Guaranty in violation of any Applicable Law, regulation or
order now or hereafter in effect. The obligations and liabilities of each
Guarantor hereunder are independent of the obligations of the Company under the
Credit Agreement and any Applicable Law. The liability of each Guarantor under
this Guaranty shall be absolute and unconditional irrespective of:
(a) the taking or accepting of any other security or guaranty
for any or all of the Obligations, including any reduction or
termination of the Commitment;
(b) any increase, reduction or payment in full at any time or
from time
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<PAGE>
to time of any part of the Obligations;
(c) any lack of validity or enforceability of the Credit
Agreement, the Notes, or any other Loan Paper or other agreement or
instrument relating thereto, including but not limited by the
unenforceability of all or any part of the Obligations by reason of the
fact that (i) the Obligations, and/or the interest paid or payable with
respect thereto, exceeds the amount permitted by Applicable Law, (ii)
the act of creating the Obligations, or any part thereof, is ultra
vires, (iii) the officers creating same acted in excess of their
authority, or (iv) for any other reason;
(d) any lack of corporate power of the Company or any other
Person at any time liable for the payment of any or all of the
Obligations;
(e) any Debtor Relief Laws involving the Company, any
Guarantor or any other Person obligated on any of the Obligations;
(f) any renewal, compromise, extension, acceleration or other
change in the time, manner or place of payment of, or in any other term
of, all or any of the Obligations; any adjustment, indulgence,
forbearance, or compromise that may be granted or given by any Lender
or the Administrative Agent to the Company, any Guarantor, or any
Person at any time liable for the payment of any or all of the
Obligations; or any other modification, amendment, or waiver of or any
consent to departure from the Credit Agreement, the Notes, or any other
Loan Paper and other agreement or instrument relating thereto without
notification of any Guarantor (the right to such notification being
herein specifically waived by Guarantors);
(g) any exchange, release, sale, subordination, or
non-perfection of any collateral or Lien therein or any lack of
validity or enforceability or change in priority, destruction,
reduction, or loss or impairment of value of any collateral or Lien
therein;
(h) any release or amendment or waiver of or consent to
departure from any other guaranty for all or any of the Obligations;
(i) the failure by any Lender or the Administrative Agent to
make any demand upon or to bring any legal, equitable, or other action
against the Company or any other Person (including without limitation
any other Guarantor), or the failure or delay by any Lender or the
Administrative Agent to, or the manner in which any Lender or the
Administrative Agent shall, proceed to exhaust rights against any
direct or indirect security for the Obligations;
(j) the existence of any claim, defense, set-off, or other
rights which the Company or any Guarantor may have at any time against
the Company, the Lenders, or any Guarantor, or any other Person,
whether in connection with this Guaranty, the other Loan Papers, the
transactions contemplated thereby, or any
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<PAGE>
other transaction;
(k) any failure of any Lender or the Administrative Agent to
notify any Guarantor of any renewal, extension, or assignment of the
Obligations or any part thereof, or the release of any security, or of
any other action taken or refrained from being taken by any Lender or
the Administrative Agent, it being understood that the Lenders and the
Administrative Agent shall not be required to give any Guarantor any
notice of any kind under any circumstances whatsoever with respect to
or in connection with the Obligations;
(l) any payment by the Company to the Lenders or the
Administrative Agent is held to constitute a preference under any
Debtor Relief Law or if for any other reason the Lenders or the
Administrative Agent is required to refund such payment or pay the
amount thereof to another Person; or
(m) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Company, any Guarantor,
any other guarantor or other Person liable on the Obligations,
including without limitation any defense by reason of any disability or
other defense of the Company, or the cessation from any cause
whatsoever of the liability of the Company, or any claim that the
Guarantors' obligations hereunder exceed or are more burdensome than
those of the Company.
This Guaranty shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by any Lender or any other Person upon the insolvency,
bankruptcy or reorganization of the Company, any Guarantor or otherwise, all as
though such payment had not been made.
3. Waiver. To the extent not prohibited by Applicable Law, each
Guarantor hereby waives: (a) promptness, protests, diligence, presentments,
acceptance, performance, demands for performance, notices of nonperformance,
notices of protests, notices of dishonor, notices of acceptance of this Guaranty
and of the existence, creation or incurrence of new or additional indebtedness,
and any of the events described in Section 2 and of any other occurrence or
matter with respect to any of the Obligations, this Guaranty or any of the other
Loan Papers; (b) any requirement that the Administrative Agent or any Lender
protect, secure, perfect, or insure any Lien or security interest or any
property subject thereto or exhaust any right or take any action against the
Company or any other Person or any collateral or pursue any other remedy in the
Administrative Agent's or any Lender's power whatsoever; (c) any right to assert
against the Administrative Agent or any Lender as a counterclaim, set-off or
cross-claim, any counterclaim, set-off or claim which it may now or hereafter
have against the Company or other Person liable on the Obligations; (d) any
right to seek or enforce any remedy or right that the Administrative Agent or
any Lender now has or may hereafter have against the Company (to the extent
permitted by Applicable Law); (e) any right to participate in any collateral or
any right
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<PAGE>
benefiting the Administrative Agent or the Lenders in respect of the
Obligations; and (f) any right by which it might be entitled to require suit on
an accrued right of action in respect of any of the Obligations or require suit
against the Company or any other Person, whether arising pursuant to Section
34.02 of the Texas Business and Commerce Code, as amended, Section 17.001 of the
Texas Civil Practice and Remedies Code, as amended, Rule 31 of the Texas Rules
of Civil Procedure, as amended, or otherwise.
4. Subrogation and Subordination. Notwithstanding any reference to
subrogation contained herein to the contrary, each Guarantor hereby irrevocably
waives any claim or other rights which it may have or hereafter acquire against
the Company that arise from the existence, payment, performance or enforcement
of such Guarantor's obligations under this Guaranty, including, without
limitation, any right of subrogation, reimbursement, exoneration, contribution,
indemnification, any right to participate in any claim or remedy of any Lender
against the Company or any collateral which any Lender now has or hereafter
acquires, whether or not such claim, remedy or right arises in equity, or under
contract, statutes or common law, including without limitation, the right to
take or receive from the Company, directly or indirectly, in cash or other
property or by set-off or in any other manner, payment or security on account of
such claim or other rights. If any amount shall be paid to any Guarantor in
violation of the preceding sentence and the Obligations shall not have been paid
in full, such amount shall be deemed to have been paid to such Guarantor for the
benefit of, and held in trust for the benefit of, the Lenders, and shall
forthwith be paid to the Administrative Agent to be credited and applied upon
the Obligations, whether matured or unmatured, in accordance with the terms of
the Credit Agreement. Each Guarantor acknowledges that it will receive direct
and indirect benefits from the financing arrangements contemplated by the Credit
Agreement and that the waiver set forth in this Paragraph 4 is knowingly made in
contemplation of such benefits.
5. Representations and Warranties. Each Guarantor hereby represents and
warrants that all representations and warranties as they apply to such Guarantor
only set forth in Article IV of the Credit Agreement (each of which is hereby
incorporated by reference) is true and correct.
6. Covenants. Each Guarantor hereby expressly assumes, confirms, and
agrees to perform, observe, and be bound by all conditions and covenants set
forth in the Credit Agreement, to the extent applicable to it, as if it were a
signatory thereto. Each Guarantor further covenants and agrees (a) punctually
and properly to perform all of such Guarantor's covenants and duties under any
other Loan Papers; (b) from time to time promptly to furnish the Administrative
Agent with any information or writings which the Administrative Agent may
reasonably request concerning this Guaranty; and (c) promptly to notify the
Administrative Agent of any claim, action, or proceeding affecting this
Guaranty.
7. Amendments, Etc. No amendment or waiver of any provision of this
Guaranty nor consent to any departure by any Guarantor therefrom shall in any
event
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<PAGE>
be effective unless the same shall be in writing and signed by the Lenders as
required pursuant to Section 9.1 of the Credit Agreement, and then such waiver
or consent shall be effective only in the specific instance and for the specific
purpose for which given.
8. Addresses for Notices. Unless otherwise provided herein, all
notices, requests, consents and demands shall be in writing and shall be
delivered by hand or overnight courier service, mailed or sent by telecopy to
the respective addresses specified herein and to the attention of the
individuals listed thereunder, or, as to any party, to such other addresses as
may be designated by it in written notice to all other parties. All notices,
requests, consents and demands hereunder shall be deemed to have been given on
the date of receipt if delivered by hand or overnight courier service or sent by
telecopy, or if mailed, effective on the earlier of actual receipt or three (3)
days after being mailed by certified mail, return receipt requested, postage
prepaid, addressed as aforesaid.
9. No Waiver; Remedies. No failure on the part of the Administrative
Agent or any Lender to exercise, and no delay in exercising, any right hereunder
or under any of the other Loan Papers shall operate as a waiver thereof; nor
shall any single or partial exercise of any right hereunder or under any of the
other Loan Papers preclude any other or further exercise thereof or the exercise
of any other right. Neither the Administrative Agent nor any Lender shall be
required to (a) prosecute collection or seek to enforce or resort to any
remedies against the Company or any other Person liable on any of the
Obligations, (b) join the Company or any other Person liable on any of the
Obligations in any action in which Lender prosecutes collection or seeks to
enforce or resort to any remedies against the Company or other Person liable on
any of the Obligations, or (c) seek to enforce or resort to any remedies with
respect to any Liens granted to (or benefiting, directly or indirectly) the
Administrative Agent or any Lender by the Company or any other Person liable on
any of the Obligations. Neither the Administrative Agent nor any Lender shall
have any obligation to protect, secure or insure any of the Liens or the
properties or interests in properties subject thereto. The remedies herein
provided are cumulative and not exclusive of any remedies provided by Applicable
Law.
10. Right of Set-off. Upon the occurrence and during the continuance of
any Event of Default, each Lender is hereby authorized at any time and from time
to time, to the fullest extent permitted by Law, to set off and apply any and
all deposits (general or special, time or demand, provisional or final) at any
time held and other indebtedness at any time owing by such Lender to or for the
credit or the account of any Guarantor against any and all of the obligations of
any Guarantor now or hereafter existing under this Guaranty, irrespective of
whether or not such Lender shall have made any demand under this Guaranty. Each
Lender agrees promptly to notify such Guarantor after any such set-off and
application, provided that the failure to give such notice shall not affect the
validity of such set-off and application. The rights of each Lender under this
Section 10 are in addition to other rights and remedies (including, without
limitation, other rights of set-off) which such Lender may have.
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<PAGE>
11. Continuing Guaranty; Transfer of Notes. This Guaranty is an
irrevocable continuing guaranty of payment and shall (a) remain in full force
and effect until termination of the Commitment and final payment in full (after
the Maturity Date) of the Obligations and all other amounts payable under this
Guaranty, (b) be binding upon each Guarantor, its successors and assigns, and
(c) inure to the benefit of and be enforceable by each Lender and its
successors, transferees and assigns. Without limiting the generality of the
foregoing clause (c), to the extent permitted by Section 9.4 of the Credit
Agreement, each Lender may assign or otherwise transfer its rights under the
Credit Agreement, the Notes or any of the other Loan Papers or any interest
therein to any other Person, and such other Person shall thereupon become vested
with all the rights or any interest therein, as appropriate, in respect thereof
granted to the Lender herein or otherwise.
12. Information. Each Guarantor acknowledges and agrees that it shall
have the sole responsibility for obtaining from the Company such information
concerning the Company's financial condition or business operations as such
Guarantor may require, and that neither the Administrative Agent nor any Lender
has any duty at any time to disclose to any Guarantor any information relating
to the business operations or financial conditions of the Company.
13. GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF TEXAS AND THE UNITED STATES OF AMERICA.
WITHOUT EXCLUDING ANY OTHER JURISDICTION, EACH GUARANTOR AGREES THAT THE STATE
AND FEDERAL COURTS OF TEXAS LOCATED IN DALLAS, TEXAS, SHALL HAVE JURISDICTION
OVER PROCEEDINGS IN CONNECTION HEREWITH.
14. WAIVER OF JURY TRIAL. EACH GUARANTOR, THE ADMINISTRATIVE AGENT, AND
THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY, IRREVOCABLY AND INTENTIONALLY WAIVE,
TO THE MAXIMUM EXTENT PERMITTED BY LAW, ALL RIGHT TO TRIAL BY JURY IN ANY
ACTION, PROCEEDING OR CLAIM ARISING OUT OF OR RELATED TO THIS AGREEMENT OR ANY
OF THE LOAN PAPERS OR THE TRANSACTIONS CONTEMPLATED THEREBY. THIS PROVISION IS A
MATERIAL INDUCEMENT TO EACH LENDER ENTERING INTO THE CREDIT AGREEMENT.
15. Ratable Benefit. This Guaranty is for the ratable benefit of the
Lenders, each of which shall share any proceeds of this Guaranty pursuant to the
terms of the Credit Agreement.
16. Guarantor Insolvency. Should any Guarantor become insolvent, fail
to pay its debts generally as they become due, voluntarily seek, consent to, or
acquiesce in the benefits of any Debtor Relief Law or become a party to or be
made the subject of any proceeding provided for by any Debtor Relief Law (other
than as a creditor or claimant) that could suspend or otherwise adversely affect
the rights of any Lender
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<PAGE>
granted hereunder, then, the obligations of such Guarantor under this Guaranty
shall be, as between such Guarantor and such Lender, a fully-matured, due, and
payable obligation of such Guarantor to such Lender (without regard to whether
there is a Default or Event of Default under the Credit Agreement or whether any
part of the Obligations is then due and owing by the Company to such Lender),
payable in full by such Guarantor to such Lender upon demand, which shall be the
estimated amount owing in respect of the contingent claim created hereunder.
17. ENTIRE AGREEMENT. THIS GUARANTY, TOGETHER WITH THE OTHER LOAN
PAPERS, REPRESENTS THE FINAL AGREEMENT AMONG THE PARTIES REGARDING THE SUBJECT
MATTER HEREIN AND THEREIN AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES HERETO. THERE ARE
NO UNWRITTEN ORAL AGREEMENTS AMONG THE PARTIES.
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<PAGE>
IN WITNESS WHEREOF, the Guarantors have caused this Guaranty to be duly
executed and delivered by their respective officers thereunto duly authorized as
of the date first above written.
FFCA ACQUISITION CORPORATION
Address for each Guarantor:
c/o Franchise Finance Corporation of America
The Perimeter Center
17207 North Perimeter Drive By:
Scottsdale, Arizona 85255 John R. Barravecchia
Telephone No.: (602) 585-4500 Executive Vice President and
Facsimile No.: (602) 585-2225 Chief Financial Officer
Attention: John R. Barravecchia
Executive Vice President and
Chief Financial Officer
FFCA INSTITUTIONAL ADVISORS,
INC.
with a copy to:
Franchise Finance Corporation of America
The Perimeter Center By:
17207 North Perimeter Drive John R. Barravecchia
Scottsdale, Arizona 85255 Executive Vice President and
Telephone No.: (602) 585-4500 Chief Financial Officer
Facsimile No. (602) 585-2225
Attention: Dennis L. Ruben, Esq.
Executive Vice President
and General Counsel
Address for Administrative Agent:
NationsBank of Texas, N.A.
901 Main Street, 67th Floor
Dallas, Texas 75202
Telephone No.: (214) 508-3091
Facsimile No.: (214) 508-0980
Attention: Frank M. Johnson
Senior Vice President
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<PAGE>
EXHIBIT C
QUARTERLY COMPLIANCE CERTIFICATE
The undersigned hereby certifies that he/she is a duly elected
Authorized Officer of Franchise Finance Corporation of America, a Delaware
corporation ("Borrower"), and that he/she is authorized to execute this
Certificate on behalf of Borrower in connection with that certain Credit
Agreement dated as of January 27, 1998 ("Credit Agreement"), among Borrower,
NationsBank of Texas, N.A., individually and as Administrative Agent, and each
Lender a party thereto. All terms used but not defined herein shall have the
meanings set forth in the Credit Agreement. This Certificate is submitted
concurrently with quarterly financial statements of Borrower for the period
ended ____________, ____. The undersigned hereby further certifies to the
following as of the date set forth below:
1. The representations and warranties of Borrower under the Credit
Agreement are true and complete in all material respects, before and after
giving effect to any Advances.
2. No event has occurred which constitutes a Default or Event of
Default.
3. Company continues to qualify as a Real Estate Investment Trust under
the Code.
4. The following calculations are true, accurate and complete, and are
made in accordance with the terms and provisions of the Credit Agreement:
1. Applicable Margin.
The Index Debt Rating is ______________. The Applicable Margin with
respect to Base Rate Advances is _____%. The Applicable Margin with
respect to LIBOR Advances is _____%.
<TABLE>
<CAPTION>
2. Section 6.1(a). Minimum Net Worth.
<S> <C> <C>
(a) Minimum Net Worth
(i) $425,000,000 $425,000,000
(ii) 75% of aggregate Net Cash Proceeds $
received by Borrower and its Consolidated
Subsidiaries after April 15, 1997, disposition
of Capital Stock
(iii) amount equal to Net Worth of any Person $
acquired (via asset or stock purchase) by
Borrower or any Subsidiary to the extent
purchase price is paid for in Capital Stock of
Borrower or such Subsidiary
(iv) Minimum Net Worth [(i) + (ii) + (iii)] $
</TABLE>
<PAGE>
<TABLE>
<S> <C> <C>
(b) Actual Net Worth (determined in accordance with $
GAAP)
3. Section 6.1(b). Total Indebtedness to Adjusted Net Worth Ratio.
(a) Maximum Ratio 0.90 to 1
(b) Actual Ratio
(i) Indebtedness of Company and Consolidated
Subsidiaries
a. Debt for Borrowed Money $
b. Capital Lease obligations $
c. Reimbursement obligations relating to $
letters of credit
d. Contingent Liabilities relating to (a), $
(b) and (c) above
e. Withdrawal Liability $
f. indebtedness associated with Interest $
Hedge Agreements
g. payments due for the deferred $
purchase price of property and
services (excluding trade payables less
than 90 days old)
h. obligations (contingent or otherwise to $
purchase, retire or redeem any Capital
Stock)
i. [a. + b. + c. + d. + e. + f. + g. $
+ h.]
(ii) Indebtedness evidenced by Intercompany $
Notes and which is subject to a Subordination
Agreement
(iii) Total Indebtedness [(i) - (ii)] $
(iv) Adjusted Net Worth
a. Actual Net Worth (determined in $
accordance with GAAP)
b. Accumulated Depreciation $
(determined in accordance with
GAAP)
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
c. Adjusted Net Worth [a. + b.] $
(v) Total Indebtedness to Adjusted Net Worth _____ to 1
[(iii)/(iv)]
4. Section 6.1(c). Fixed Charge Coverage Ratio.
(a) Minimum Ratio 2.0 to 1
(b) Actual Ratio
(i) Cash Flow From Operations for twelve- $
calendar month period ending on or most
recently ended prior to date of determination
(ii) cash interest payable on all Indebtedness $
(including interest on Capitalized Leases)
(iii) [(i) + (ii)] $
(iv) cash interest payable on all Indebtedness $
(including interest on Capitalized Leases)
(v) regularly scheduled principal amounts on $
Indebtedness (including rentals under Lease
Obligations but excluding any payment which
pays Indebtedness in full to the extent such
payment exceeds the immediately preceding
scheduled principal payment)
(vi) principal amounts of all Indebtedness $
(including under Lease Obligations) required
to be prepaid or purchased during such
period
(vii) [(iv) + (v) + (vi)] $
(viii) Fixed Charge Coverage Ratio [(iii)/(vii)] _____ to 1
5. Section 6.1(d). Maximum Total Secured Indebtedness.
(a) Maximum Total Secured Indebtedness (10% of Total $
Assets)
(b) Actual Total Secured Indebtedness
Indebtedness of Borrower and its Consolidated $
Subsidiaries (from Section 3(b)(i) above that is
secured by a Consensual Lien)
</TABLE>
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<PAGE>
<TABLE>
<S> <C> <C>
6. Section 6.1(e). Ratio of Total Unencumbered Assets to Total Unsecured
Indebtedness.
(a) Minimum Ratio 1.75 to 1
(b) Actual Ratio
(i) Total Assets not subject to a Lien other than $
Liens of the type described in clause (a)
through (f) of the definition of Permitted
Liens
(ii) Aggregate amount of Indebtedness of $
Company and its Consolidated Subsidiaries
that is not secured by a Lien other than Liens
of the type described in clause (a) through (f)
of the definition of Permitted Liens
(iii) [(i)/(ii)] _____ to 1
7. Section 6.3. Contingent Liabilities.
(a) Maximum $5,000,000
(b) Actual $
8. Section 6.6. Disposition of Assets.
(a) Maximum during any four consecutive fiscal
quarters
(i) Total Assets as of the first day of preceding $
four consecutive fiscal quarters divided by
four
(ii) 25% times 8(a)(i) above $
(b) Actual $
9. Section 6.7. Permitted Distributions.
(a) Maximum
(i) Cash Flow From Operations (from $
Section 4(b)(i) above)
(ii) 95% times 9(a)(i) above $
(b) Actual $
</TABLE>
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<PAGE>
IN WITNESS WHEREOF, I have executed this Certificate as of the _____
day of _____________, 19___.
FRANCHISE FINANCE CORPORATION
OF AMERICA
By:
Name:
Title:
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<PAGE>
EXHIBIT D
CONVERSION/CONTINUANCE NOTICE
[Date]
NationsBank of Texas, N.A.
Administrative Agent
NationsBank Plaza
901 Main Street, 13th Floor
Dallas, Texas 75202
Attention: Marie Lancaster
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement dated as of January 27,
1998 (the "Credit Agreement", the terms defined therein being used herein as
therein defined) among Franchise Finance Corporation of America, NationsBank of
Texas, N.A., as Administrative Agent, and each Lender party thereto, and hereby
gives you notice pursuant to Section 2.9 of the Credit Agreement that the
undersigned hereby requests Borrowing[s] [a continuation/conversion of an
existing Advance] [continuations/conversions of existing Advances] under the
Credit Agreement, and in that connection sets forth below the information
relating to [each] such Advance as required by Section 2.9 of the Credit
Agreement:
(i) The principal amount of existing [LIBOR Advances] [Base
Rate Advances] to be [converted] [continued] is $ _____________ .
(ii) The Business Day of such [continuation] [conversion] is ,
199 .
(iii) The Type of Advance[s] comprising such [continuation]
[conversion] of Revolving Loans is [are] [Base Rate Advance [to the
extent of an aggregate amount of $ ]] [LIBOR Advance [to the extent of
an aggregate amount of $________________]].
(iv) The Type of Advance[s] comprising such [continuation]
[conversion] of Term Loans is [are] [Base Rate Advance [to the extent
of an aggregate amount of $_______]] [LIBOR Advance [to the extent of
an aggregate amount of
$__________________]].
<PAGE>
(v) The initial Interest Period for each LIBOR Advance made as
part of such [continuation] [conversion] is months.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the [continuation]
[conversion], before and after giving effect thereto and to the application of
the proceeds therefrom:
(A) the conditions precedent specified in Article III of the
Credit Agreement have been satisfied with respect to the [continuation]
[conversion] and will remain satisfied on the date of such
[continuation] [conversion];
(B) the representations and warranties specified in Article IV
of the Credit Agreement are true and correct in all material respects
as though made on and as of such date; and
(C) no event has occurred and is continuing or would result
from such [continuation] [conversion], which constitutes a Default or
Event of Default.
Very truly yours,
FRANCHISE FINANCE CORPORATION
OF AMERICA, a Delaware corporation
By:
Name:
Title:
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<PAGE>
EXHIBIT E
BORROWING NOTICE
[Date]
NationsBank of Texas, N.A.,
Administrative Agent
NationsBank Plaza
901 Main Street, 14th Floor
Dallas, Texas 75202
Attention: Theresa Balk
Ladies and Gentlemen:
The undersigned refers to the Credit Agreement dated as of January 27,
1998 (the "Credit Agreement", the terms defined therein being used herein as
therein defined) among Franchise Finance Corporation of America, NationsBank of
Texas, N.A., as Administrative Agent, and each Lender, and hereby gives you
notice pursuant to Section 2.2 of the Credit Agreement that the undersigned
hereby requests _______________ Borrowing[s] under the Credit Agreement, and in
that connection sets forth below the information relating to [each] such Advance
(a "Proposed Borrowing") as required by Section 2.2 of the Credit Agreement:
Proposed Borrowing:
(i) The Business Day of such Proposed Borrowing is
______________, 19___.
(ii) The Type of Advance[s] comprising such Proposed Borrowing
of Revolving Loans is [are] [Base Advance [to the extent of an
aggregate amount of $____________]] [LIBOR Advance [to the extent of an
aggregate amount of $________________]].
(iii) The Type of Advance[s] comprising such Proposed
Borrowing of Term Loans is [are] [Base Advance [to the extent of an
aggregate amount of $_______]] [LIBOR Advance [to the extent of an
aggregate amount of $__________________]].
(iv) The aggregate amount of such Proposed Borrowing is $____.
[(v) The initial Interest Period for each LIBOR Advance made
as part of such Proposed Borrowing is ________________ months.]
<PAGE>
The undersigned hereby certifies that the following statements are true
on the date hereof, and will be true on the date of the Proposed Borrowing,
before and after giving effect thereto and to the application of the proceeds
therefrom:
(A) the conditions precedent specified in Article III of the
Credit Agreement have been satisfied with respect to the Proposed
Borrowing and will remain satisfied on the date of such Proposed
Borrowing;
(B) the representations and warranties specified in Article IV
of the Credit Agreement are true and correct in all material respects
as though made on and as of such date; and
(C) no event has occurred and is continuing or would result
from such Proposed Borrowing, which constitutes a Default or Event of
Default.
Very truly yours,
FRANCHISE FINANCE CORPORATION
OF AMERICA, a Delaware corporation
By:
Name:
Title:
- 2 -
<PAGE>
EXHIBIT F
ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT ("Assignment and Acceptance")
is dated ________________, _____, among ________________________ ("Assignor")
and _____________________ ("Assignee") and NationsBank of Texas, N.A., as
Administrative Agent ("Administrative Agent").
BACKGROUND.
A. Reference is made to the Credit Agreement dated as of January 27,
1998 (as it may hereafter be amended or otherwise modified from time to time,
being referred to as the "Credit Agreement") among Franchise Finance Corporation
of America (the "Company"), the financial institutions parties thereto as
Lenders thereunder, and Administrative Agent for Lenders under the Credit
Agreement. Unless otherwise defined, terms are used herein as defined in the
Credit Agreement.
B. This Assignment and Acceptance is made with reference to the
following facts:
(i) Assignor is a Lender under and as defined in the Credit
Agreement and, as such, presently holds a percentage of the rights and
obligations of Lenders under the Credit Agreement.
(ii) As of the date hereof, the Commitment is $__________, and
Assignor's Specified Percentage is ___%.
(iii) On the terms and conditions set forth below, Assignor
desires to sell and assign to Assignee, and Assignee desires to
purchase and assume from Assignor, as of the Transfer Date (as defined
below), a portion of Assignor's Specified Percentage of the Commitment
equal to ______% [express as a percentage of Commitment] (the "Assigned
Percentage").
AGREEMENT.
NOW, THEREFORE, Assignor and Assignee hereby agree as follows:
1. Assignor hereby sells and assigns to Assignee, without recourse and,
except as provided in paragraph 2 of this Assignment and Acceptance, without
representation and warranty, and Assignee hereby purchases and assumes from
Assignor, Assignor's rights and obligations under the Credit Agreement, to the
extent
<PAGE>
of the Assigned Percentage (including without limitation, (a) the Assigned
Percentage of the Commitment as in effect as of the Transfer Date and (b) _____%
of each of the Advances owing to Assignor on the Transfer Date).
2. Assignor (a) 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; (b) makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with the Credit
Agreement, any other Loan Paper or any other instrument or document furnished
pursuant thereto, or with respect to the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or any
other Loan Paper or any other instrument or document furnished pursuant thereto
or any collateral; and (c) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the Company or any
Person the performance or observance by the Company or any Person of any of its
obligations under the Loan Papers or any other instrument or document furnished
pursuant thereto.
3. Assignee (a) confirms that it has received a copy of the Credit
Agreement, together with copies of the most recent financial statements
delivered to Assignor pursuant to Section 5.5 of the Credit Agreement, and such
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into this Assignment and Acceptance; (b)
agrees that it will, independently and without reliance upon the Administrative
Agent, Assignor 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
decisions in taking or not taking action under the Credit Agreement and the
other Loan Papers; (c) appoints and authorizes the Administrative Agent to take
such action as agent on its behalf and to exercise such powers under the Credit
Agreement and the other Loan Papers as are delegated to the Administrative Agent
by the terms thereof, together with such powers as are reasonably incidental
thereto; (d) agrees that it will perform in accordance with their terms all of
the obligations which by the terms of the Credit Agreement and the other Loan
Papers are required to be performed by it as a Lender; (e) specifies, as its
address for notice and Lending Office, the office set forth beneath its name on
the signature pages hereof; (f) confirms that it is an Eligible Assignee[; and
(g) attaches the forms prescribed by the IRS certifying as to Assignee's status
for purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to Assignee under the Credit Agreement, the
other Loan Papers and this Assignment or Acceptance or such other documents as
are necessary to indicate that all such payments are subject to taxes at a rate
reduced by applicable treaty].
4. The effective date for this Assignment and Acceptance (the "Transfer
Date") shall be the date following execution by the parties hereto on which
Assignor receives from Assignee an amount in same day funds equal to _____% of
the aggregate principal amount of Advances owing to Assignor on such date,
together with
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<PAGE>
the $3,500 processing fee required under Section 9.4 of the Credit Agreement,
and Administrative Agent and the Company receive notice thereof and an executed
copy of this Assignment and Acceptance. The Company acknowledges its obligations
under the Credit Agreement, and agrees, within five Business Days after
receiving an executed copy of this Assignment and Acceptance to execute and
deliver to Administrative Agent, in exchange for the Note originally delivered
to Assignor, new Notes to the order of Assignor and Assignee in amounts equal to
their respective Specified Percentages of the Commitment.
5. As of the Transfer Date, (a) Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment and Acceptance, have
the rights and obligations of a Lender thereunder, (b) Assignor shall, to the
extent provided in this Assignment and Acceptance, relinquish its rights and be
released from its obligations under the Credit Agreement and other Loan Papers,
and (c) Assignor's Specified Percentage shall be _____%, and Assignee's
Specified Percentage shall be ________%.
6. From and after the Transfer Date, Administrative Agent shall make
all payments under the Credit Agreement in respect of the interest assigned
hereby (including, without limitation, all payments of principal, interest and
fees with respect thereto) to Assignee. Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement for periods prior
to the Transfer Date directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the state of Texas, without reference to
principles of conflict of laws.
\ ASSIGNOR:
By:
Name:
Title:
Address: ASSIGNEE:
Attn: By:
Telephone No.: ( ) ___-____ Name:
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<PAGE>
Telecopier No.: ( ) ___-____ Title:
LIBOR Lending Office:
Attn:
Telephone No.: ( ) ___-____
Telecopier No.: ( ) ___-____
ADMINISTRATIVE AGENT
NATIONSBANK OF TEXAS, N.A.,
Administrative Agent
By:
Name:
Title:
Accepted and approved this _____
day of ___________, 199___:
FRANCHISE FINANCE CORPORATION OF AMERICA
By:
Name:
Title:
- 4 -
<PAGE>
EXHIBIT G
SUBORDINATION AGREEMENT
-----------------------
SUBORDINATION AGREEMENT, dated as of ____________________, _____ (as
amended, supplemented, or otherwise modified from time to time, this
"Agreement") made by ___________________ , a ____________________ (the
"Company") and Franchise Finance Corporation of America, a Delaware corporation
(the "Subordinated Creditor") for the benefit of the Lenders (each a "Lender")
party to the Credit Agreement (as defined below), and NationsBank of Texas,
N.A., as the Administrative Agent (the "Administrative Agent") for itself and
the Lenders.
BACKGROUND:
-----------
(1) The Lenders, and the Administrative Agent have entered into a
Credit Agreement dated as of January 27, 1998, with the Subordinated Creditor
(as amended, supplemented, or otherwise modified from time to time, the "Credit
Agreement"). Unless otherwise defined herein, defined terms used herein shall
have the meanings ascribed to them in the Credit Agreement.
(2) The Company is or may be indebted to the Subordinated Creditor in
the principal amount of $100,000,000 or such lesser amount as shall equal the
aggregate unpaid principal amount of Intercompany Loans made by Subordinated
Creditor to the Company evidenced by the promissory note of even date herewith
in such principal amount (as the same may hereafter be amended, supplemented, or
otherwise modified from time to time, the "Debt Agreement"). All such
obligations of the Company now or hereafter existing under the Debt Agreement,
whether for principal, interest (including, without limitation, interest
accruing after the filing of a petition initiating any Proceeding (as defined
below), whether or not such interest accrues after the filing of such petition
for purposes of the Bankruptcy Code of 1978, 11 U.S.C. ss.101 et seq. (the
"Bankruptcy Code") or is an allowed claim in such Proceeding), fees, expenses or
otherwise are hereinafter referred to as "Subordinated Debt". For purposes of
this Agreement, "Proceeding" means any bankruptcy, insolvency, arrangement,
reorganization, receivership, relief or other similar case or proceeding under
any federal or state bankruptcy or similar law or an assignment for the benefit
of creditors or any other marshalling of the assets and liabilities of a Person.
(3) It is a condition precedent to the making of Advances by the
Lenders under the Credit Agreement that the Subordinated Creditor shall have
executed and delivered this Agreement.
NOW, THEREFORE, in consideration of the premises, the Company and the
Subordinated Creditor hereby agree as follows:
<PAGE>
SECTION 1. Agreement to Subordinate. Each of the Subordinated Creditor
and the Company agrees that the Subordinated Debt is and shall be subordinate,
to the extent and in the manner hereinafter set forth, to the prior payment in
full of all obligations of the Company now or hereafter existing under the
Credit Agreement and the other Loan Papers, whether for principal, interest
(including, without limitation, interest, as provided in the Notes, accruing
after the filing of a petition initiating any Proceeding, whether or not such
interest accrues after the filing of such petition for purposes of the
Bankruptcy Code or is an allowed claim in such Proceeding), fees, expenses or
otherwise (such obligations and all Obligations, as defined in the Credit
Agreement, being herein collectively called the "Obligations"). For the purposes
of this Agreement, the Obligations shall not be deemed to have been paid in full
until (a) all maturity dates therefor shall have elapsed, (b) the Commitment
shall have been terminated, and (c) the Lenders shall have received indefeasible
payment of the Obligations in full in cash (such date that the conditions
described in (a), (b), and (c) herein are satisfied shall be the "Credit
Agreement Termination Date").
SECTION 2. Events of Subordination. (a) In the event of any
dissolution, winding up, liquidation, arrangement, reorganization, adjustment,
protection, relief or composition of the Company or any Subsidiary of the
Company or any of their respective debts, whether voluntary or involuntary, in
any Proceeding of the Company or any Subsidiary of the Company or otherwise, the
Lenders shall be entitled to receive indefeasible payment in full in cash of the
Obligations before the Subordinated Creditor is entitled to receive any payment
of all or any of the Subordinated Debt, and any payment or distribution of any
kind (whether in cash, property or securities) that otherwise would be payable
or deliverable upon or with respect to the Subordinated Debt in any such
Proceeding (including any payment that may be payable by reason of any other
indebtedness of the Company being subordinated to payment of the Subordinated
Debt) shall, subject to the following sentence, be paid or delivered directly to
the Administrative Agent for the account of the Lenders for application (in the
case of cash) to, or as collateral (in the case of non-cash property or
securities) for, the payment or prepayment of the Obligations until the
Obligations shall have been paid indefeasibly in full in cash and the Credit
Agreement Termination Date to have occurred.
(b) Upon the occurrence of a Default or Event of Default and during the
continuance thereof, no payment (including any payment that may be payable by
reason of any other indebtedness of the Company being subordinated to payment of
the Subordinated Debt) shall be made by the Company for or on account of any
Subordinated Debt, and the Subordinated Creditor shall not take or receive from
the Company or any Subsidiary of the Company, directly or indirectly, in cash or
other property or by set-off or in any other manner, including, without
limitation, from or by way of collateral, any payment of all or any of the
Subordinated Debt, unless and until the Obligations shall have been paid
indefeasibly in full in cash and the Credit Agreement Termination Date has
occurred.
(c) During the continuance of a Default or Event of Default, the
Lenders shall
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<PAGE>
be entitled to receive payment in full of all amounts due or to become due on or
in respect of all Obligations before the Subordinated Creditor is entitled to
receive any payment (including any payment which may be payable by reason of the
payment of any other indebtedness of the Company being subordinated to the
payment of the Subordinated Debt) by the Company on account of the Subordinated
Debt.
SECTION 3. In Furtherance of Subordination. The Subordinated Creditor
agrees as follows:
(a) All payments or distributions upon or with respect to the
Subordinated Debt which are received by the Subordinated Creditor contrary to
the provisions of this Agreement shall be received in trust for the benefit of
the Lenders, shall be segregated from other funds and property held by the
Subordinated Creditor and shall be forthwith paid over to the Administrative
Agent for the account of the Lenders in the same form as so received (with any
necessary endorsement) to be applied (in the case of cash) to, or held as
collateral (in the case of non-cash property or securities) for, the payment or
prepayment of the Obligations in accordance with the terms of the Credit
Agreement.
(b) The Subordinated Creditor hereby waives and agrees not to assert
against Administrative Agent or any Lender any rights which a guarantor or
surety with respect to any indebtedness of the Company or any obligor could
exercise. The Subordinated Creditor shall not assert, enforce, or otherwise
exercise (a) any right of subrogation to any of the rights or Liens of
Administrative Agent or any Lender or any other Person against the Company or
any of its Subsidiaries or any other obligor on all or any part of the
Obligations or any collateral or other security, or (b) any right of recourse,
reimbursement, contribution, indemnification, or similar right against the
Company or any of its Subsidiaries or any other obligor on all or any part of
the Obligations or any collateral or any security, and the Subordinated Creditor
hereby waives any and all of the foregoing rights and the benefit of, and any
right to participate in, any collateral or other security given to
Administrative Agent or any Lender or any other Person to secure payment of the
Obligations, however any such Rights arise, whether hereunder or any other Loan
Paper or by operation of Law until after the Credit Agreement Termination Date
has occurred.
(c) The Subordinated Creditor hereby irrevocably appoints
Administrative Agent, the Subordinated Creditor's attorney-in-fact, with full
authority in the place and stead of the Subordinated Creditor and in the name of
the Subordinated Creditor or otherwise to, after the occurrence of a Default or
Event of Default and during the continuance thereof, (a) file any claims, proofs
of claim, or other instruments of similar character necessary to enforce the
obligations of the Company and its Subsidiaries with respect to the Subordinated
Debt and (b) collect and receive any and all payments or distributions which may
be payable or deliverable upon or with respect to the Subordinated Debt. Such
power of attorney is coupled with an interest and is irrevocable prior to final
indefeasible payment in full of the Obligations.
-3-
<PAGE>
(d) The Administrative Agent is hereby authorized to demand specific
performance of this Agreement, whether or not the Company shall have complied
with any of the provisions hereof applicable to it, at any time when the
Subordinated Creditor shall have failed to comply with any of the provisions of
this Agreement applicable to it. The Subordinated Creditor hereby irrevocably
waives any defense based on the adequacy of a remedy at law, which might be
asserted as a bar to such remedy of specific performance.
(e) No assets or Properties of the Company or its Subsidiaries shall
secure the Subordinated Debt, except to the extent of Liens which are assigned
to the Administrative Agent on behalf of the Lenders.
SECTION 4. Remedies of the Subordinated Creditor. The Subordinated
Creditor agrees that, so long as the Obligations shall not have been paid
indefeasibly in full in cash and the Credit Agreement Termination Date has
occurred, the Subordinated Creditor will not take, sue for, ask or demand from
the Company or its Subsidiaries, payment of all or any of the Subordinated Debt,
or exercise any remedy against the Company or its Subsidiaries available
contractually, by law or otherwise, or commence in its capacity as a creditor,
or join with any creditor in commencing, or directly or indirectly cause in its
capacity as creditor to the Company or its Subsidiaries to commence, or assist
the Company or its Subsidiaries in commencing, any Proceeding or any other
remedy against the Company or its Subsidiaries.
SECTION 5. Agreements in Respect of Subordinated Debt.
(a) The Subordinated Creditor will not:
(i) Sell, assign, pledge, encumber or otherwise dispose of any
of the Subordinated Debt; or
(ii) Permit any of the terms of any of the Subordinated Debt
to be changed or amended (or issue any consent, waiver or approval
which has the effect of resulting in any change or amendment) in any
manner which could reasonably be expected to be materially adverse to
the interests of the Lenders.
(b) The Subordinated Creditor shall immediately notify the
Administrative Agent of the occurrence of any breach or default under the
Subordinated Debt beyond any grace period provided with respect thereto.
SECTION 6. Agreement by the Company. The Company agrees that it will
not make any payment of any of the Subordinated Debt (or take any other action)
in contravention of the provisions of this Agreement.
SECTION 7. Obligations Hereunder Not Affected. All rights and interests
of the Administrative Agent and the Lenders hereunder, and all agreements and
obligations of the Subordinated Creditor and the Company under this Agreement,
shall remain in full force and effect irrespective of:
-4-
<PAGE>
(i) any lack of validity or enforceability of the Credit
Agreement, the Notes, the Loan Papers or any other agreement or
instrument relating thereto;
(ii) any change in the time, manner or place of payment of, or
in any other term of, all or any of the Obligations, or any other
amendment or waiver of or any consent to any departure from the Credit
Agreement, the Loan Papers or the Notes, including, without limitation,
any increase in the Obligations resulting from the extension of
additional credit to the Company or otherwise;
(iii) any taking, release or amendment or waiver of or consent
to departure from any guaranty, for all or any of the Obligations; or
(iv) any change, restructuring or termination of the corporate
structure or existence of the Company or its Subsidiaries.
This Agreement shall continue to be effective or be reinstated, as the case may
be, if at any time any payment of any of the Obligations is rescinded or must
otherwise be returned by the Administrative Agent or any Lender upon the
insolvency, bankruptcy or reorganization of the Company or otherwise, all as
though such payment had not been made.
SECTION 8. Waiver. Each of the Subordinated Creditor and the Company
hereby waives promptness, diligence, notice of acceptance and any other notice
with respect to any of the Obligations and this Agreement and any requirement
that the Administrative Agent or any Lender or exhaust any right or take any
action against the Company, its Subsidiaries or any other Person or entity.
SECTION 9. Representations and Warranties. The Subordinated Creditor
and the Company each hereby represent and warrant as follows:
(a) The Subordinated Debt now outstanding, true and complete copies of
instruments evidencing which have been furnished to the Administrative Agent,
has been duly authorized, issued and delivered by the Company, and constitutes
the legal, valid and binding obligation of the Company, enforceable against the
Company in accordance with its terms. There exists no default in respect of the
Subordinated Debt.
(b) The Subordinated Creditor has, independently and without reliance
upon the Administrative Agent or any Lender and based on such documents and
information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement.
SECTION 10. Amendments to this Agreement. No amendment or waiver of any
provision of this Agreement, and no consent to any departure by the Subordinated
Creditor or the Company herefrom, shall in any event be effective unless the
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<PAGE>
same shall be in writing and signed as provided in the Credit Agreement, and
then such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given.
SECTION 11. Expenses. Each of the Subordinated Creditor and the Company
agrees, jointly and severally, upon demand to pay to the Administrative Agent
the amount of any and all reasonable out-of-pocket expenses, including the
reasonable fees and expenses of its counsel and of any experts or agents, which
the Administrative Agent or any Lender may incur in connection with the (a) the
administration of this Agreement, (b) the exercise or enforcement of any of the
rights of the Administrative Agent or the Lenders hereunder or (c) the failure
by the Subordinated Creditor to perform or observe any of the provisions hereof.
SECTION 12. Addresses for Notices. All notices and other communications
provided for hereunder shall be in writing (including telecopier, telegraphic,
telex or cable communication) and mailed, telecopied, telegraphed, telexed,
cabled or delivered to it, if to the Subordinated Creditor, at its address
specified in the Credit Agreement, and if to the Administrative Agent or any
Lender, at its address specified in the Credit Agreement, or as to each party,
at such other address as shall be designated by such party in a written notice
to each other party. All such notices and other communications shall, when
mailed, telecopied, telegraphed, telexed or cabled, be effective as provided in
the Credit Agreement.
SECTION 13. No Waiver; Remedies. No failure on the part of the
Administrative Agent or any Lender to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right hereunder preclude any other or further exercise
thereof or the exercise of any other right. The remedies herein provided are
cumulative and not exclusive of any remedies provided by Law.
SECTION 14. Continuing Agreement; Assignments Under the Credit
Agreement. This Agreement is a continuing agreement and shall (a) remain in full
force and effect until the indefeasible payment in full in cash of the
Obligations and until the Commitment has terminated, (b) be binding upon the
Subordinated Creditor and its successors and assigns, and (c) inure to the
benefit of, and be enforceable by, the Administrative Agent, the Lenders and
their respective permitted successors, transferees and assigns. Without limiting
the generality of the foregoing clause (c), any Lender may assign or otherwise
transfer all or any portion of its rights and obligations under, and in
accordance with the terms of, the Credit Agreement to any other Person, and such
other Person shall thereupon become vested with all the rights in respect
thereof granted to such Lender herein or otherwise. Notwithstanding any other
provision of this Agreement, this Agreement shall continue to be effective or be
reinstated, as the case may be, if at any time any payment of any of the
Obligations is rescinded or must otherwise be returned by the Administrative
Agent or any Lender upon the insolvency, bankruptcy or reorganization of the
Company or its Subsidiaries
-6-
<PAGE>
or otherwise, all as though such payment had not been made. In any such event,
all payments and distributions upon or with respect to the Subordinated Debt
which have been theretofore received by the Subordinated Creditor shall be
deemed to have been received in trust for the benefit of the Lenders, shall be
segregated from other funds and property held by the Subordinated Creditor and
shall be forthwith paid over to the Administrative Agent for the account of the
Lenders in the same form as so received (with any necessary indorsement) to be
applied (in the case of cash) to, or held as collateral (in the case of non-cash
property or securities) for, the payment or prepayment of the Obligations in
accordance with the terms of the Credit Agreement.
SECTION 15. GOVERNING LAW. (a) THIS AGREEMENT AND ALL OTHER LOAN PAPERS
RELATED HERETO SHALL BE DEEMED CONTRACTS MADE UNDER THE LAWS OF TEXAS AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF TEXAS,
EXCEPT TO THE EXTENT FEDERAL LAWS GOVERN THE VALIDITY, CONSTRUCTION, ENFORCEMENT
AND INTERPRETATION OF ALL OR ANY PART OF THIS AGREEMENT AND ALL LOAN PAPERS.
WITHOUT EXCLUDING ANY OTHER JURISDICTION, THE SUBORDINATED CREDITOR AGREES THAT
THE COURTS OF TEXAS WILL HAVE JURISDICTION OVER PROCEEDINGS IN CONNECTION
HEREWITH.
(b) THE COMPANY HEREBY WAIVES PERSONAL SERVICE OF ANY LEGAL PROCESS
UPON IT. IN ADDITION, THE COMPANY AGREES THAT SERVICE OF PROCESS MAY BE MADE
UPON IT BY REGISTERED MAIL (RETURN RECEIPT REQUESTED) DIRECTED TO THE COMPANY AT
ITS ADDRESS DESIGNATED FOR NOTICE UNDER THIS AGREEMENT AND SERVICE SO MADE SHALL
BE DEEMED TO BE COMPLETED UPON RECEIPT BY THE COMPANY. NOTHING IN THIS SECTION
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.
SECTION 16. WAIVER OF JURY TRIAL. TO THE MAXIMUM EXTENT PERMITTED BY
LAW, THE PARTIES HERETO HEREBY WAIVE ANY RIGHT THAT THEY MAY HAVE TO A TRIAL BY
JURY OF ANY DISPUTE (WHETHER A CLAIM IN TORT, CONTRACT, EQUITY, OR OTHERWISE)
ARISING UNDER OR RELATING TO THIS AGREEMENT, THE OTHER LOAN PAPERS, OR ANY
RELATED MATTERS, AND AGREES THAT ANY SUCH DISPUTE SHALL BE TRIED BEFORE A JUDGE
SITTING WITHOUT A JURY.
SECTION 17. ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER LOAN PAPERS
RELATED HERETO REPRESENT THE FINAL AGREEMENT BETWEEN THE PARTIES AND MAY NOT BE
CONTRADICTED BY EVIDENCE OF PRIOR, CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS
OF THE PARTIES. THERE ARE NO UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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<PAGE>
SECTION 18. Counterparts. This Agreement may be executed in any number
of counterparts, all of which taken together shall constitute one and the same
instrument. In making proof of any such agreement, it shall not be necessary to
produce or account for any counterpart other than one signed by the party
against which enforcement is sought.
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REMAINDER OF PAGE LEFT INTENTIONALLY BLANK
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<PAGE>
IN WITNESS WHEREOF, each party hereto has caused this Agreement to be
duly executed and delivered by its officer thereunto duly authorized as of the
date first above written.
FRANCHISE FINANCE CORPORATION
OF AMERICA
By:
John R. Barravecchia
Executive Vice President and
Chief Financial Officer
(THE COMPANY)
By:
Name:
Title:
- 9 -
<PAGE>
EXHIBIT H
[Form of Confidentiality Agreement]
CONFIDENTIALITY AGREEMENT
[Date]
[Insert Name and Address
of Prospective Participant
or Assignee]
Re: Credit Agreement dated as of January 27, 1998, among Franchise
Finance Corporation of America ("FFCA"), the lenders named therein (the
"Lenders"), and NationsBank of Texas, N.A., as Administrative Agent.
Dear ______________:
As a Lender under the above-referenced Credit Agreement (the "Credit
Agreement"), we have agreed with FFCA pursuant to Section 9.9 of the Credit
Agreement to use reasonable precautions to keep confidential, except as
otherwise provided therein, all non-public information identified by FFCA as
being confidential at the time the same is delivered to us pursuant to the
Credit Agreement, including, without limitation, written information and
information transferred visually or electronically, together with all notes,
analyses, compilations, studies or other documents that contain all or a portion
of such information (collectively, "Confidential Information").
As provided in said Section 9.9, we are permitted to provide you, as a
prospective [participant] [assignee Lender], with certain Confidential
Information subject to the execution and delivery by you, prior to receiving
Confidential Information, of a Confidentiality Agreement in this form. No
Confidential Information will be made available to you until your execution and
return to us of this Confidentiality Agreement.
Accordingly, in consideration of the foregoing, you agree (on behalf of
yourself and each of your affiliates, directors, officers, employees, agents and
representatives) that (A) the Confidential Information will not be used by you
except in connection with the proposed [participation] [assignment] mentioned
above and (B) you shall keep all Confidential Information confidential, provided
that nothing herein shall limit the disclosure of any Confidential Information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) to your counsel or to counsel for any of the other Lenders or the
Administrative Agent, (iii) to your bank examiners, auditors or accountants,
(iv) to the Administrative Agent or any other Lender, (v) in connection with any
litigation to which you or any one or more of the Lenders are a party; provided,
further, that, unless specifically prohibited by applicable law or court order,
<PAGE>
_________, 199___
Page 2
you agree, prior to disclosure thereof, to give prompt notification to FFCA of
any request for disclosure of any Confidential Information (x) by any
governmental agency or representative thereof (other than any such request in
connection with an examination of your financial condition by such governmental
agency) or (y) pursuant to legal process. With respect to any disclosure of any
Confidential Information set forth in subclause (x) or (y) of clause (v) above,
you agree, to the extent not prohibited by applicable law or court order, to (i)
cooperate with FFCA so that FFCA may seek a protective order or other
appropriate remedy and (ii) use its best efforts to obtain an order or
reasonable assurance that confidential treatment will be afforded such
information.
At the earlier of such time as (i) you are no longer a Lender, an
assignee or participant under the Credit Agreement, or (ii) all Advances (as
defined in the Credit Agreement) under the Credit Agreement are paid in full and
the Commitment (as defined in the Credit Agreement) is terminated, upon written
request by FFCA and subject to any restrictions or regulations of any Tribunal
having supervisory authority over you, you shall return to FFCA the Confidential
Information which is in tangible form, including any copies which you or any
persons to whom you transmitted the Confidential Information may have made, and
you and they will destroy all abstracts, summaries thereof or references thereto
in your and their documents, and after written request by FFCA, shall promptly
provide FFCA reasonable assurance in writing that you have destroyed such
documents.
It is acknowledged that FFCA is in the business of financing commercial
real estate, equipment and enterprises and from time to time you and FFCA may be
in direct competition with each other for business. This Confidentiality
Agreement does not constitute a license for you to use, employ or exploit the
Confidential Information to gain any advantage in the marketplace against FFCA;
it being expressly understood and agreed that any use, employment or
exploitation of the Confidential Information for a purpose not expressly
permitted herein is strictly prohibited.
This Confidentiality Agreement contains the entire understanding of the
parties to this Confidentiality Agreement with respect to the matters addressed
in this Confidentiality Agreement and may be amended, modified, supplemented or
altered only by a writing duly executed by you and us which is consented in
writing to by FFCA and any prior agreements or understandings, whether oral or
written, are entirely superseded by this Confidentiality Agreement.
The covenants, conditions and agreements contained in this
Confidentiality Agreement shall bind you and use and inure to the benefit of
you, us and FFCA and their respective parent corporations, affiliated companies,
subsidiaries, officers, employees, partners, agents and successors and assigns.
Would you please indicate your agreement to the foregoing by signing at
the
<PAGE>
_________, 199___
Page 3
place provided below the enclosed copy of this Confidentiality Agreement.
Very truly yours,
By:
Title:
THE FOREGOING IS AGREED TO AS
OF THE DATE OF THIS LETTER.
By:
Title:
<PAGE>
EXHIBIT I
BID RATE NOTE
$100,000,000.00 Dallas, Texas January 27, 1998
FOR VALUE RECEIVED, the undersigned, FRANCHISE FINANCE CORPORATION OF
AMERICA, a Delaware corporation ("Borrower"), HEREBY PROMISES TO PAY to the
order of ___________________________________ ("Lender") the lesser of ONE
HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000.00) and the unpaid principal
amount of the Bid Rate Loans (as defined in the Credit Agreement hereinafter
defined) made by Lender to Borrower, pursuant to the Credit Agreement, payable
at such times, and in such amounts, as are agreed to by Lender and Borrower
pursuant to Section 2.2(h) of the Credit Agreement. The books and records of
Administrative Agent shall be prima facie evidence of all sums due Lender.
Borrower promises to pay interest on the unpaid principal amount of the
Bid Rate Loans from the date made until such principal amount is paid in full,
at such interest rates, and payable at such times, as are agreed to by Lender
and Borrower pursuant to Section 2.2(h) of the Credit Agreement.
Both principal and interest are payable in lawful money of the United
States of America to Administrative Agent (as defined in the Credit Agreement)
(for the account of Lender) at its principal banking house at NationsBank Plaza,
901 Main Street, Dallas, Texas 75202, or such other place as Administrative
Agent may direct, in immediately available funds.
This Bid Rate Note is one of the Bid Rate Notes evidencing Bid Rate
Loans referred to in, and is entitled to the benefits of, the Credit Agreement
dated as of January 27, 1998, among Borrower, NationsBank of Texas, N.A., as
Administrative Agent, Lender and certain other lenders (as from time to time
amended, modified or supplemented, the "Credit Agreement"). The Credit
Agreement, among other things, contains provisions for acceleration of the
maturity hereof upon the happening of an Event of Default (as defined in the
Credit Agreement) and also for prepayments on account of principal hereof prior
to the maturity hereof upon the terms and conditions therein specified.
Borrower and each guarantor, surety and endorser waives demand,
presentment, notice of dishonor, protest and diligence in collecting sums due
hereunder; agrees to application of any debt of Lender to the payment hereof;
agrees that extensions and renewals without limit as to number, acceptance of
any number of partial payments, releases of any party liable hereon, and
releases or substitutions of collateral, before or after maturity, shall not
release or discharge its obligation under this Bid Rate Note; and agrees to pay
in addition to all other sums due hereunder
<PAGE>
reasonable attorney's fees if this Bid Rate Note is placed in the hands of an
attorney for collection or if it is collected through bankruptcy or other
judicial proceeding. Borrower agrees that during the full term hereof the
maximum lawful interest rate for this Bid Rate Note determined under Texas law
shall be the weekly ceiling as specified in Article 5069-1D of V.A.T.S. Further,
to the extent that any other lawful rate ceiling exceeds the rate ceiling so
determined, then the higher rate ceiling shall apply. Chapter 15 of the Texas
Credit Code does not apply to this Bid Rate Note.
This Bid Rate Note shall be governed by and construed in accordance
with the laws of the State of Texas.
FRANCHISE FINANCE CORPORATION
OF AMERICA, a Delaware corporation
By:
John R. Barravecchia
Executive Vice President and
Chief Financial Officer
- 2 -
<PAGE>
Schedule 4.1
ORGANIZATION AND QUALIFICATION
Franchise Finance Corporation of America (FFCA)
A Delaware Corporation
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 200,000,000 shares of common stock, par value
$.01 per share issued and outstanding 41,787,542* shares as of December 26, 1997
FFCA Acquisition Corporation
A Delaware Corporation and wholly-owned subsidiary of FFCA
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share issued and outstanding 100 shares
FFCA Institutional Advisors, Inc.
A Delaware Corporation and wholly-owned subsidiary of FFCA
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share issued and outstanding 100 shares
FFCA Secured Assets Corporation
A Delaware Corporation and wholly-owned subsidiary of FFCA
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share issued and outstanding 100 shares
*As of the date of the latest available 13F filings, the following shareholders
held 1% or more of the outstanding common stock of FFCA:
European Investors Inc. 1,377,100
Morton H. Fleischer 1,208,469
Travelers Group Inc. 1,115,746
Mellon Bank Corporation 1,048,942
Smith Barney Inc. 956,160
Vanguard Group 690,800
Robert W. Halliday 429,600
<PAGE>
FFCA Secured Lending Corporation
A Delaware Corporation and wholly-owned subsidiary of FFCA
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share issued and outstanding 100 shares
FFCA Residual Interest Corporation
A Delaware Corporation and wholly-owned subsidiary of FFCA
17207 N. Perimeter Drive
Scottsdale, AZ 85255
The Corporation has authorized 100 shares of common stock, par value $.01 per
share issued and outstanding 100 shares
<PAGE>
Schedule 4.8
DEBT, CONTINGENT LIABILITIES AND LIENS OF COMPANY
AND EACH SUBSIDIARY ENTITY IN EXISTENCE ON DECEMBER 26, 1997
FRANCHISE FINANCE CORPORATION OF AMERICA
Capital Leases Payable $ 28,469
Acquisition Loan Facility $266,000,000
Senior Notes Payable ($200,000,000 less
unamortized discount of $811,276) $199,188,724
Medium Term Notes $110,150,000
Mortgage Payable to Affiliate $ 8,500,000
FFCA also executed on December 31, 1996 an unconditional guaranty
whereby FFCA guarantees to NationsBank the payment of all obligations and
liabilities of FFCA Acquisition Corporation arising from transactions under its
derivative agreements with NationsBank
FFCA INSTITUTIONAL ADVISORS, INC.
None
FFCA ACQUISITION CORPORATION
Intercompany note payable to parent company FFCA
(eliminates in consolidation) $417,587,420
FFCA RESIDUAL INTEREST CORPORATION
None
FFCA SECURED ASSETS CORPORATION
None
FFCA SECURED LENDING CORPORATION
None
<PAGE>
Schedule 4.13
INVESTMENTS
FRANCHISE FINANCE CORPORATION OF AMERICA
Investment in FFCA Institutional Advisors, Inc. $3,237,655
(100 shares of common stock, par value $.01 per share)
Investment in FFCA Acquisition Corporation $100
(100 shares of common stock, par value $.01 per share)
Investment in FFCA Residual Interest Corporation $100
(100 shares of common stock, par value $.01 per share)
Investment in FFCA Secured Assets Corporation $100
(100 shares of common stock, par value $.01 per share)
Investment in FFCA Secured Lending Corporation $100
(100 shares of common stock, par value $.01 per share)
FFCA INSTITUTIONAL ADVISORS, INC.
Investment in FFCA Co-Investment Limited Partnership $250,782
(.98% general partnership interest)
FFCA ACQUISITION CORPORATION
None
FFCA RESIDUAL INTEREST CORPORATION
Secured Franchise Loan Pass-Through Certificates, Series 1996-C1 $28,703,761
Secured Franchise Loan Pass-Through Certificates, Series 1997-1 $26,688,327
FFCA SECURED ASSETS CORPORATION
None
FFCA SECURED LENDING CORPORATION
None
<PAGE>
SCHEDULE 4.5
------------
1. On September 28, 1989, a complaint was filed in the United States
District Court for the Eastern District of New York, captioned C.D.S.
Diversified, Inc. ("CDS"), Claude Shipman and Roland Davis v. Franchise Finance
Corporation of America, Ticor Title Insurance Company and United Guaranty
Insurance Company, Civil Action No. CV-89 2887 (the "CDS Complaint"). The CDS
Complaint alleges, among other things, that FFCA misrepresented to the
Plaintiffs the purpose of both a rent guaranty insurance policy with United
Guaranty Commercial Insurance Company and an $80,000 letter of credit. The
Plaintiffs further allege that FFCA breached a lease agreement between FFCA (in
reality, FFCA's predecessor in interest, FFCA/IIP 1985 Property Company) and
CDS, and that FFCA fraudulently presented the letter of credit for payment.
Finally, the Plaintiffs allege that FFCA wrongfully converted $36,000 which had
been placed in escrow with Ticor Title Insurance Company. The Plaintiffs seek
compensatory damages from FFCA on their various causes of action in the amounts
of $1,500,000, $36,000, $80,000 and $35,000, respectively, and punitive damages
in the amount of $1,000,000. Both parties filed motions for summary judgment,
which were denied by the Court. All pretrial discovery has been completed and
the parties are awaiting the setting of a trial date by the Court.
2. On December 12, 1991, a complaint was filed in the Circuit Court of
Knox County, Tennessee, captioned Interstate Franchise Management Corporation,
Tennessee Valley Investments, Inc., and John W. Pirkle v. FFCA/IIP 1986 Property
Company and William E. Fort. The complaint alleges that a former employee of
FFCA's predecessor in interest, FFCA/IIP 1986 Property Company ("IIP 86"),
William E. Fort and other officers of IIP 86 misrepresented to the Plaintiffs
that C. Randy Lance ("Lance") and his related entities were extremely
trustworthy, creditworthy and had sufficient net worth to acquire the restaurant
business owned by the Plaintiffs. Plaintiffs contend that, as a result of those
misrepresentations, they entered into an agreement with Lance and an affiliated
entity for the management and acquisition of Plaintiffs' businesses. The
complaint alleges that Lance and his affiliated entity mismanaged Plaintiffs'
businesses and were financially unable to consummate the acquisition thereof,
causing Plaintiffs to lose their businesses and sustain compensatory damages in
the amount of $3,000,000. Based upon its inquiry, IIP 86 believes that the
allegations contained in the complaint are without merit. Plaintiffs have not
actively prosecuted this case since the filing date. However, FFCA intends to
vigorously defend this action and assert counterclaims against the Plaintiffs
resulting from breach of two lease agreements and guaranties.
<PAGE>
Schedule 4.11
Environmental Liabilities
NONE
