FORM 10-Q
QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF
THE SECURITIES EXCHANGE ACT OF 1934
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934 [Fee Required]
For the quarterly period ended March 31, 1999
------------------------------------
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
------------------ -------------------------
(Amended by Exch Act Rel No. 312905. Eff 4/26/93)
Commission file Number 1-12286
-------------------------------------------------------
Mid-Atlantic Realty Trust
- - --------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 52-1832411
- - -------------------------------- -----------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
170 West Ridgely Road, Suite 300 - Lutherville, Maryland 21093
- - -------------------------------------------------------- -----------------------
(Address of principal executive offices) (Zip Code)
Registrants telephone number, including area code (410) 684-2000
- - --------------------------------------------------------------------------------
(Former name, former address and former fiscal year, if changed since last
report)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15 (d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
X Yes No
------------- -----------
14,307,517 Common Shares were outstanding as of April 23, 1999.
<PAGE>
MID-ATLANTIC REALTY TRUST
AND SUBSIDIARIES
Part I. FINANCIAL INFORMATION
Item 1. CONSOLIDATED FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
CONSOLIDATED STATEMENTS OF OPERATIONS
CONSOLIDATED STATEMENTS OF CASH FLOWS
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Item 2. MANAGEMENT'S DISCUSSION AND ANAYLSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Item 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Part II. OTHER INFORMATION
Item 1. LEGAL PROCEEDINGS
Item 2. CHANGES IN SECURITIES AND USE OF PROCEEDS
Item 3. DEFAULTS UPON SENIOR SECURITIES
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Item 5. OTHER INFORMATION
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
Consolidated Balance Sheets
<TABLE>
<CAPTION>
As of ,
--------------------------------------------------
March 31, 1999 December 31, 1998
--------------------------------------------------
(UNAUDITED)
<S> <C>
ASSETS
- - -------------------------
Properties:
Operating properties $ 367,258,620 347,921,101
Less accumulated depreciation and amortization 52,837,256 50,540,094
--------------------------------------------------
314,421,364 297,381,007
Development operations 2,767,995 11,281,252
Property held for development or sale 5,422,705 5,422,705
--------------------------------------------------
322,612,064 314,084,964
Cash and cash equivalents 1,206,982 611,107
Notes and accounts receivable - tenants and other 1,124,151 1,504,951
Prepaid expenses and deposits 2,085,391 2,381,137
Deferred financing costs 1,501,379 1,158,606
--------------------------------------------------
$ 328,529,967 319,740,765
--------------------------------------------------
--------------------------------------------------
LIABILITIES AND SHAREHOLDERS' EQUITY
- - ------------------------------------
Liabilities:
Accounts payable and accrued expenses $ 6,136,029 6,306,471
Notes payable 27,000,000 18,400,000
Construction loan payable 9,000,000 9,000,000
Mortgages payable 126,875,550 125,401,850
Convertible subordinated debentures 13,931,000 13,931,000
Deferred income 683,539 743,284
--------------------------------------------------
183,626,118 173,782,605
--------------------------------------------------
Minority interest in consolidated joint ventures 42,747,751 41,467,101
--------------------------------------------------
Shareholder's equity:
Preferred shares of beneficial interest, $.01 par value,
authorized 2,000,000 shares, issued and outstanding, none - -
Common shares of beneficial interest, $.01 par value,
Authorized 100,000,000 shares , issued and outstanding
14,316,817 and 14,495,045 shares, respectively 143,168 144,950
Additional paid-in capital 129,602,271 131,368,001
Distributions in excess of accumulated earnings (27,589,341) (27,021,892)
--------------------------------------------------
102,156,098 104,491,059
--------------------------------------------------
--------------------------------------------------
$ 328,529,967 319,740,765
--------------------------------------------------
--------------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
Consolidated Statements of Operations
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
---------------------------------------
1999 1998
---------------------------------------
<S> <C> <C>
REVENUES:
Rentals $ 10,915,078 10,051,087
Tenant Recoveries 2,050,644 1,661,106
Other 56,028 112,202
---------------------------------------
13,021,750 11,824,395
---------------------------------------
EXPENSES:
Interest 3,232,593 2,835,651
Depreciation and amortization
of property and improvements 2,295,418 2,118,279
Operating 2,820,466 2,381,620
General and administrative 699,062 701,117
---------------------------------------
9,047,539 8,036,667
---------------------------------------
EARNINGS FROM OPERATIONS
BEFORE MINORITY INTEREST 3,974,211 3,787,728
Minority Interest (799,242) (752,691)
---------------------------------------
EARNINGS FROM OPERATIONS 3,174,969 3,035,037
Gain on properties - 67,950
---------------------------------------
EARNINGS BEFORE EXTRAORDINARY LOSS 3,174,969 3,102,987
Extraordinary loss from early
extinguishment of debt - (32,984)
---------------------------------------
NET EARNINGS $ 3,174,969 3,070,003
---------------------------------------
---------------------------------------
NET EARNINGS PER SHARE - BASIC AND DILUTED:
Earnings before extraordinary loss $ 0.22 0.21
Extraordinary loss on early extinguishment of debt - -
---------------------------------------
Net earnings $ 0.22 0.21
---------------------------------------
---------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(UNAUDITED)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------------------------
1999 1998
------------------------------------------------
<S> <C> <C> <C>
Cash flows from operating activities:
Net earnings $ 3,174,969 3,070,003
Adjustments to reconcile net earnings to net
cash provided by operating activities:
Depreciation and amortization 2,295,418 2,118,279
Minority interest in earnings, net 799,242 745,342
Amortization of deferred financing costs 54,107 94,119
Gain on properties - (67,950)
Changes in operating assets and liabilities:
Decrease in operating assets 676,546 739,118
Decrease in operating liabilities (230,187) (537,557)
Other, net 80,692 30,952
------------------------------------------------
Total adjustments 3,677,561 3,122,303
------------------------------------------------
NET CASH PROVIDED BY OPERATING ACTIVITIES 6,852,530 6,192,306
------------------------------------------------
Cash flows from investing activities:
Acquisitions of and additions to properties (9,410,284) (12,816,641)
Proceeds from sales of properties - 128,076
Payments to minority partners (898,500) (935,224)
------------------------------------------------
NET CASH USED IN INVESTING ACTIVITIES (10,310,527) (13,623,789)
------------------------------------------------
Cash flows from financing activities:
Proceeds from notes payable 17,000,000 12,700,000
Principal payments on notes payable (8,400,000) (1,500,000)
Proceeds from mortgages payable 11,600,000 -
Principal payments on mortgages payable (10,126,300) (7,556,916)
Proceeds from construction loans payable - 184,042
Additions to deferred financing costs (379,054) (4,928)
Shares repurchased (1,898,356) -
Dividends paid (3,742,418) (3,629,704)
Other, net - (26,819)
------------------------------------------------
NET CASH PROVIDED BY FINANCING ACTIVITIES 4,053,872 165,675
------------------------------------------------
NET INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 595,875 (7,265,808)
CASH AND CASH EQUIVALENTS, beginning of period 611,107 8,427,217
------------------------------------------------
CASH AND CASH EQUIVALENTS, end of period $ 1,206,982 1,161,409
------------------------------------------------
------------------------------------------------
- - ---------------------------------------------------------
Schedule of noncash investing and financing activities
- - ---------------------------------------------------------
Conversion of subordinated debentures,
net of deferred financing costs $ - 1,526,103
Mortgages payable assumed - 8,299,132
Operating Partnership Units issued 1,379,908 -
-----------------------------------------------
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements
(UNAUDITED)
Organization
Mid-Atlantic Realty Trust was incorporated June 29, 1993, and
commenced operations effective with the completion of its initial public share
offering on September 11, 1993. Mid-Atlantic Realty Trust qualifies as a real
estate investment trust ("REIT") for Federal income tax purposes. As used
herein, the term "MART" or the "Company" refers to Mid-Atlantic Realty Trust and
entities owned or controlled by MART, including MART Limited Partnership (the
"Operating Partnership").
Description of Business
The Company is a fully integrated, self-administered real estate investment
trust which owns, acquires, develops, redevelops, leases and manages primarily
neighborhood or community shopping centers in the Middle Atlantic region of the
United States.
The Company has an equity interest in 33 operating shopping centers, 27 of
which are wholly owned by the Company and six in which the Company has ownership
interests ranging from 50% to 93%, as well as other commercial properties. The
Company also owns seven undeveloped parcels of land totaling approximately 147
acres, which it is holding for development or sale.
All of MART's interests in properties are held directly or indirectly by,
and substantially all of its operations relating to the properties are conducted
through, the Operating Partnership. Subject to certain conditions, units of
partnership interest in the Operating Partnership ("Units") may be exchanged by
the limited partners for cash or, at the option of MART, the obligation may be
assumed by MART and paid either in cash or in common shares of beneficial
interest in MART on a one-for-one basis. MART controls the Operating Partnership
as the sole general partner, and owns approximately 82% of the Units at March
31, 1999.
Consolidated Financial Statements
The consolidated balance sheet as of March 31, 1999 and the consolidated
statements of operations and cash flows for the Company for the three month
periods ended March 31, 1999 and March 31, 1998, have been prepared by the
Company without audit. In the opinion of management, all adjustments (which
include only normal recurring adjustments) necessary to present fairly the
financial position, results of operations and cash flows have been included. The
results of operations for the period ended March 31, 1999 are not necessarily
indicative of the operating results for the full year.
Segment Information
The segments' operating results are measured and assessed based on a performance
measure known as Funds From Operations ("FFO"), determined on a fully diluted
basis (i.e., assuming conversion to common stock of all convertible securities).
FFO is defined as net earnings (computed in accordance with generally accepted
accounting principles), excluding cumulative effects of changes in accounting
principles, extraordinary or unusual items and gains or losses from debt
restructurings and sales of properties, plus depreciation and amortization, and
after adjustments for minority interests and to record unconsolidated
partnerships and joint ventures on the same basis. FFO is not a measure of
operating results or cash flows from operating activities as measured by
generally accepted accounting principles, is not necessarily indicative of cash
available to fund cash needs and should not be considered an alternative to cash
flows as a measure of liquidity.
<PAGE>
Operating results for the segments are summarized as follows:
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------------------------------------------------------------------------------
1999 1998
-------------------------------------------------------------------------------------------------
Shopping All Shopping All
Centers Other Total Centers Other Total
-------------------------------------------- -----------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Revenues $ 12,508,074 513,676 13,021,750 11,300,417 523,978 11,824,395
Expenses, exclusive
of depreciation and
amortization of
property and
improvements 6,281,548 187,232 6,468,780 5,415,940 175,392 5,591,332
Minority interest 90,784 (279) 90,505 83,345 5,064 88,409
-------------------------------------------------------------------------------------------------
FFO- diluted $ 6,135,742 326,723 6,462,465 5,801,132 343,522 6,144,654
-------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements - Continued
(UNAUDITED)
Interest expense on subordinated debentures and minority interest in
earnings of the Operating Partnership are not considered in the calculation of
FFO-diluted.
A reconciliation of FFO - diluted reported above to earnings from
operations in the financial statements is summarized as follows:
<TABLE>
<CAPTION>
Three months ended March 31,
-------------------------------------------------------
1999 1998
-------------------------------------------------------
<S> <C> <C> <C>
FFO- diluted reported above $ 6,462,465 6,144,654
Depreciation and
amortization of property
and improvements 2,295,418 2,118,279
Convertible debenture
interest expense 283,341 327,056
Operating Partnership
minority interest expense 708,737 664,282
Earnings from operations
-------------------------------------------------------
in financial statements $ 3,174,969 3,035,037
-------------------------------------------------------
</TABLE>
Net Earnings Per Share
Basic earnings per share ("EPS") is computed by dividing earnings available to
common shareholders by the weighted average number of common shares outstanding.
Diluted EPS is computed after adjusting the numerator and denominator of the
basic EPS computation for the effects of all dilutive potential common shares
outstanding during the period. The dilutive effects of convertible securities
are computed using the "if-converted" method and the dilutive effects of
options, warrants and their equivalents (including fixed awards and nonvested
shares issued under share-based compensation plans) are computed using the
"treasury stock" method.
The following table sets forth information relating to the computation of
basic and diluted earnings per share.
<TABLE>
<CAPTION>
Three Months Ended March 31,
1999 1998
- - ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Numerator:
Earnings before extraordinary loss $ 3,174,969 3,102,987
Dividends on unvested restricted share awards (72,032) (76,667)
----------------------------------
Numerator for basic earnings per share--earnings available to common
shareholders 3,102,937 3,026,320
Adjustment to dividends on restricted share awards - 3,423
Interest on subordinated debentures 283,341 -
----------------------------------
----------------------------------
Numerator for diluted earnings per share--earnings available to common
shareholders 3,386,278 3,029,743
----------------------------------
----------------------------------
Denominator:
Denominator for basic earnings per share--weighted average shares outstanding 14,135,807 14,209,337
Effect of dilutive securities:
Subordinated debentures 1,326,762 -
Unvested portion of restricted share awards and share options 13,384 107,239
--------------------------------------
Denominator for diluted earnings per share--adjusted weighted average shares 15,475,953 14,316,576
--------------------------------------
--------------------------------------
</TABLE>
<PAGE>
Convertible Subordinated Debentures
Effective September 11, 1993, the Company issued $60,000,000 of convertible
subordinated debentures at 7.625% scheduled to mature in September 2003.
Interest on the debentures is paid semi-annually on March 15 and September 15.
The debentures are convertible, unless previously redeemed, at any time prior to
maturity into common shares of beneficial interest of the Company at $10.50 per
share, subject to certain adjustments. During the three months ended March 31,
1998, $1,570,000 in debentures were converted to 149,516 common shares of
beneficial interest. The balance of the debentures, at March 31, 1999, of
$13,931,000, if fully converted, would produce an additional 1,326,762 shares.
The debentures are redeemable by the Company at any time at 100% of the
principal amount thereof, together with accrued interest. The debentures are
subordinate to all mortgages payable.
<PAGE>
MID-ATLANTIC REALTY TRUST
Notes To Consolidated Financial Statements - Continued
(UNAUDITED)
Shareholders' Equity
During the three months ended March 31, 1999, shareholders' equity changed for
the following items: o Net earnings of $3,174,969 o Dividends paid of $3,742,418
o Common shares and additional paid-in capital decreased by $1,767,512 primarily
due to stock repurchases.
<PAGE>
Part I. FINANCIAL INFORMATION
ITEM 2.
MID-ATLANTIC REALTY TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of operating results covers each of the
Company's two business segments for the quarters ended March 31, 1999 and 1998.
Management believes that a segment analysis provides the most effective
means of understanding the business. The Company adopted Statement of Financial
Accounting Standards No. 131, "Disclosures about Segments of an Enterprise and
Related Information" in 1998. As required by the Statement, segment data are
reported using the accounting policies followed by the Company for internal
reporting to management. These policies are the same as those used for external
reporting.
Operating Results- Shopping Centers
Operating results of shopping center properties are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
1999 1998
-------------------------------
<S> <C> <C> <C>
Revenues $ 12,508 11,300
Operating and interest expenses, exclusive of depreciation and amortization 6,565 5,743
Depreciation and amortization 2,180 2,007
Minority interest 799 747
------------------------------
Earnings from operations $ 2,964 2,803
-------------------------------
-------------------------------
</TABLE>
Revenues from shopping centers increased by $1,208,000 in 1999 primarily
due to the operations of five additional operating properties acquired in 1999
and 1998 ($788,000), the completion of one redevelopment project ($210,000) and
other net rental and occupancy increases, partially offset by the disposition of
an operating property in 1998 ($165,000).
Operating and interest expenses (exclusive of depreciation and
amortization) for shopping center properties increased by $822,000 in 1999 due
primarily to the acquisitions and redevelopment referred to above ($623,000).
Depreciation and amortization expense increased by $173,000 in 1999 due
primarily to the acquisitions referred to above.
Operating Results- All Other Properties
Operating results of all other properties are summarized as follows (in
thousands):
<TABLE>
<CAPTION>
1999 1998
------------------------------
<S> <C> <C> <C>
Revenues $ 514 524
Operating and interest expenses, exclusive of depreciation and amortization 187 175
Depreciation and amortization 116 112
Minority interest - 5
------------------------------
Earnings from operations $ 211 232
------------------------------
------------------------------
</TABLE>
Cash Flow Comparison
The following discussion compares the statement of cash flows information for
1999 with the information for 1998.
Net cash provided by operating activities was $6,853,000 and $6,192,000 in
the three months ended March 31, 1999 and 1998, respectively. The changes in
cash provided by operating activities were due primarily to the factors
discussed above in the comparisons of operating results. The level of net cash
provided by operating activities is also affected by the timing of receipt of
revenues and the payment of operating and interest expenses.
<PAGE>
MID-ATLANTIC REALTY TRUST
MANAGEMENT'S DISCUSSION AND ANALYSIS
OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS - CONTINUED
Net cash used in investing activities decreased by $3,313,000 to
$10,311,000 in 1999 from $13,624,000 in 1998. The decrease was due primarily to
a lower level of acquisitions.
Net cash provided by financing activities increased by $3,888,000 to
$4,054,000 in 1999 from $166,000 in 1998. The increase was primarily a result of
increased credit line borrowings ($4,500,000, after considering a related
mortgage loan payoff in 1998) and net cash provided from refinancing a shopping
center ($1,800,000) partially offset by purchases of common shares of beneficial
interest under the Company's share purchase plan ($1,900,000).
Year 2000 Issue
The year 2000 issue relates to whether computer systems will properly recognize
date sensitive information to allow accurate processing of transactions and data
relating to the year 2000 and beyond. Systems that do not properly recognize
such information could generate erroneous data or fail.
As a result of the Company's normal upgrade and replacement processes, it
has been determined that all existing network and desktop equipment is year 2000
compliant. The Company's mission critical, property management and financial
reporting software has also been modified to be year 2000 compliant. The Company
plans to test the network's year 2000 compliance during the second quarter of
1999 by setting the server date to January 1, 2000 and evaluating the results.
The Company has determined that all non-mission critical software is year 2000
compliant. As the Company owns primarily community retail centers without
enclosed common areas, the use of this technology is very limited and management
does not believe that the year 2000 issue will pose significant problems in
these systems. The Company expects that the costs to specifically remediate year
2000 information technology issues will not be significant.
The Company believes the "most reasonably likely worst case scenario"
exposure to be indirect in nature involving vendors, suppliers, and tenants.
Currently, management does not believe it is practical to measure the effects of
potential complications. The Company will continually monitor and evaluate these
areas and develop contingency plans on an as needed basis.
Cautionary Disclosure Relating to Forward Looking Statements
Statements made in this document include forward looking statements under the
federal securities laws. Statements that are not historical in nature, including
the words "anticipate," "estimate," "should," "expect," "believe," "intend," and
similar expressions are intended to identify forward looking statements. While
these statements reflect the Company's good faith beliefs based on current
expectations, estimates and projections about (among other things) the industry
and the markets in which the Company operates, they are not guarantees of future
performance, involve known and unknown risks and uncertainties that could cause
actual results to differ materially from those in the forward looking
statements, and should not be relied upon as predictions of future events.
Factors which could impact future results include (among other things) general
economic conditions, local real estate conditions, oversupply of available
space, financial condition of tenants, timely ability to lease or re-lease space
upon favorable economic terms, agreements with anchor tenants, interest rates,
availability of financing, competitive factors, and similar considerations. The
Company disclaims any obligation to publicly update or revise any forward
looking statement, whether as a result of new information, future events or
otherwise. For a discussion of risks and uncertainties that could cause actual
results to differ materially from those contained in the forward looking
statements, see "Risk Factors" filed as Exhibit 99.1 to the Company's Form 10-K.
Item 3. Quantitative and Qualitative Disclosures about Market Risk - There have
been no material changes in the Company's market risk information since December
31, 1998.
<PAGE>
Part II. OTHER INFORMATION
Item 1. Legal Proceedings - In the ordinary course of business, the company is
involved in legal proceedings. However, there are no material legal proceedings
pending against the Company.
Item 2. Changes in Securities - None
Item 3. Defaults upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - The Annual Meeting
of Shareholders is to be held on May 14, 1999. At this time, matters which
appeared on the March 30, 1999 proxy statement will be submitted for approval.
Item 5. Other Information -
Summary Financial Data
The following sets forth summary financial data which has been prepared by the
Company without audit. Management believes the following data should be
used as a supplement to the historical statements of operations. The data
should be read in conjunction with the historical financial statements and
the notes thereto for MART.
<PAGE>
MID-ATLANTIC REALTY TRUST
Summary Financial Data
( In thousands, except per share data)
<TABLE>
<CAPTION>
Three Months
Ended March 31,
-------------------------------------
-------------------------------------
1999 1998
-------------------------------------
-------------------------------------
<S> <C> <C> <C>
Revenues $ 13,022 11,824
Net earnings 3,175 3,070
Net earnings per share - basic and diluted 0.22 0.21
OTHER FINANCIAL DATA:
- - -------------------------------------------------------
- - -------------------------------------------------------
FFO - diluted (1) $ 6,462 6,145
Weighted average number of shares outstanding - FFO diluted 18,721 19,103
SELECTED CASH FLOW DATA:
- - -------------------------------------------------------
- - -------------------------------------------------------
Net cash flow provided by operating activities $ 6,853 6,192
Net cash flow used in investing activities (10,311) (13,624)
Net cash flow provided by financing activities 4,054 166
RECONCILIATION OF NET EARNINGS TO FFO-DILUTED
- - -------------------------------------------------------
- - -------------------------------------------------------
Net earnings $ 3,175 3,070
Depreciation and amortization on real estate assets 2,295 2,118
Gain on properties - (68)
Extraordinary loss on early extinguishment of debt - 33
Operating Partnership minority interest expense 709 665
Convertible debenture interest expense 283 327
-------------------------------------
FFO-diluted $ 6,462 6,145
-------------------------------------
-------------------------------------
</TABLE>
(1) Funds from operations is defined as net earnings (computed in accordance
with generally accepted accounting principles), excluding cumulative effects of
changes in accounting principles, extraordinary or unusual items and gains or
losses from debt restructurings and sales of properties, plus depreciation and
amortization, and after adjustments for minority interests and to record
unconsolidated partnerships and joint ventures on the same basis. FFO is not a
measure of operating results or cash flows from operating activities as measured
by generally accepted accounting principles, is not necessarily indicative of
cash available to fund cash needs, and should not be considered an alternative
to cash flows as a measure of liquidity.
Item 6. Exhibits and Reports on From 8-K
Exhibit 10(l) Financing Agreement Dated April 23, 1999 Between Mid-Atlantic
Realty Trust and the Named Banks
Exhibit 27 Financial Data Schedule
<PAGE>
MID-ATLANTIC REALTY TRUST AND SUBSIDIARIES
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.
MID-ATLANTIC REALTY TRUST AND
SUBSIDIARIES
(Registrant)
Date: April 27, 1999 /s/ F. Patrick Hughes
------------------------ -------------------------------------
F. Patrick Hughes
President
Chief Executive Officer
Date: April 27, 1999 /s/ Janice C. Robinson
------------------------ -------------------------------------
Janice C. Robinson
Controller
<PAGE>
FINANCING AGREEMENT
THIS FINANCING AGREEMENT (this "Agreement") is made this 23rd day of
April, 1999, by and among MID-ATLANTIC REALTY TRUST, a real estate investment
trust organized under the laws of the State of Maryland ("Mid-Atlantic") and
MART LIMITED PARTNERSHIP, a limited partnership organized under the laws of the
State of Maryland ("MART"; each of Mid-Atlantic and MART a "Borrower";
Mid-Atlantic and MART, collectively, the "Borrowers"), jointly and severally;
and FMB BANK ("FMB"), FIRST UNION NATIONAL BANK ("First Union"), PROVIDENT BANK
OF MARYLAND, a banking corporation organized under the laws of the State of
Maryland ("Provident"), and CHEVY CHASE BANK, FSB, a depository institution
chartered under the laws of the United States ("Chevy Chase") and each other
financial institution which is a party to this Agreement, whether by execution
of this Agreement or otherwise (collectively, the "Lenders" and individually, a
"Lender"); and FMB BANK, in its capacity as administrative agent for each of the
Lenders (the "Administrative Agent") and FIRST UNION NATIONAL BANK, in its
capacity as documentation agent for each of the Lenders (the "Documentation
Agent").
RECITALS
A. The Borrowers have applied to the Lenders for credit facilities
consisting of (i) a revolving credit facility in the maximum principal amount of
$75,000,000 and (ii) a letter of credit facility in the maximum principal amount
of $5,000,000, as part of that revolving credit facility to be used by the
Borrowers for the Permitted Uses described in this Agreement.
B. The Lenders severally are willing to make those credit facilities
available jointly and severally to the Borrowers upon the terms and subject to
the conditions set forth in this Agreement.
AGREEMENTS
NOW, THEREFORE, in consideration of the premises and for other good and
valuable consideration, the receipt of which is hereby acknowledged, the parties
hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.1 Certain Defined Terms.
As used in this Agreement, the terms defined in the Preamble and
Recitals hereto shall have the respective meanings specified therein, and the
following terms shall have the following meanings:
"Adjusted Unencumbered NOI" means as to the Borrowers on a consolidated
basis for any period of determination thereof, the annualized NOI less the
Unencumbered Capital Expenditure Reserve.
1
<PAGE>
"Administrative Agent" means the Person defined as the "Administrative
Agent" in the preamble of this Agreement and shall also include any successor
Administrative Agent appointed pursuant to Section 8.7.3 (Successor
Administrative Agent).
"Administrative Agency Fee" and "Administrative Agency Fees" have the
meanings described in Section 8.8 (Administrative Agency Fee).
"Administrative Agent's Obligations" shall mean any and all Obligations
payable solely to and for the exclusive benefit of the Administrative Agent by
either of the Borrowers under the terms of this Agreement and/or any of the
other Financing Documents, including, without limitation, any and all
Administrative Agency Fees and Letter of Credit Fees.
"Affiliate" means, with respect to any designated Person, any other
Person, (a) directly or indirectly controlling, directly or indirectly
controlled by, or under direct or indirect common control with the Person
designated, (b) directly or indirectly owning or holding five percent (5%) or
more of any equity interest in such designated Person, or (c) five percent (5%)
or more of whose stock or other equity interest is directly or indirectly owned
or held by such designated Person. For purposes of this definition, the term
"control" (including with correlative meanings, the terms "controlling",
"controlled by" and "under common control with") means the possession, directly
or indirectly, of the power to direct or cause the direction of the management
and policies of a Person, whether through ownership of voting securities or
other equity interests or by contract or otherwise.
"Agreement" means this Financing Agreement, as amended, restated,
supplemented or otherwise modified in writing in accordance with the provisions
of Section 9.2 (Amendments; Waivers).
"Agents" means the Administrative Agent and the Documentation Agent,
collectively.
"Agents' Obligations" means the collective reference to any and all
Obligations payable solely to and for the exclusive benefit of either of the
Agents by either or both of the Borrowers under the terms of this Agreement
and/or any of the other Financing Documents.
"Annual Debt Service" means as to the Borrowers on a consolidated basis
for any period of determination thereof, the amount required to fully amortize
the outstanding Unsecured Indebtedness with an amortization of twenty (20) years
and an implied interest rate equivalent to the ten (10) year Treasury Note rate
plus two and one-half percent (2.5%) per annum.
"Applicable Interest Rate" means (a) the Eurodollar Rate or (b) the
Base Rate.
"Applicable Margin" means the applicable rate per annum added, as set
forth in Section 2.4.1 (Applicable Interest Rates) to the Eurodollar Base Rate
or the Prime Rate.
"Assets" means at any date all assets that, in accordance with GAAP
consistently applied, should be classified as assets on a consolidated balance
sheet of the Borrowers and their respective Subsidiaries.
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"Assignee" means any Eligible Assignee to which any Lender assigns all
or any portion of its interests under this Agreement, any Commitment, and the
Revolving Loan, in accordance with the provisions of Section 9.5 (Assignments by
Lenders), together with any and all successors and assigns of such Eligible
Assignees; "Assignees" means the collective reference to all Assignees.
"Bankruptcy Code" means Title 11 of the United States Code, as amended
from time to time, and any successor Laws.
"Base Rate" means the sum of (a) the Applicable Margin plus (b) the
Prime Rate.
"Base Rate Loan" means any advance of the Revolving Loan for which
interest is to be computed with reference to the Base Rate.
"Business Day" means any day other than a Saturday, Sunday or other day
on which (a) in the case of FMB (as Administrative Agent and Lender), commercial
banks in the State are authorized or required to close and, (b) in the case of
the Lenders other than FMB, those Lenders are closed for the transaction of
business at the addresses stated after their names on the signature pages of
this Agreement.
"Cancellation Fee" has the meaning described in Section 2.1.7
(Cancellation Fee).
"Cash and Cash Equivalents" means unrestricted (a) cash, (b) securities
with maturities of one year or less from the date of acquisition issued or fully
guaranteed or insured by the United States Government or any agency thereof, (c)
certificates of deposit with maturities of one (1) year or less from the date of
acquisition of, or money market accounts maintained with the Administrative
Agent, any Affiliate of the Administrative Agent, or any other domestic
commercial bank having capital and surplus in excess of One Hundred Million
Dollars ($100,000,000.00) or such other domestic financial institutions or
domestic brokerage houses to the extent disclosed to, and approved by, the
Administrative Agent and (d) commercial paper of a domestic issuer rated at
least either A-1 by Standard & Poor's Corporation (or its successor) or P-1 by
Moody's Investors Service, Inc. (or its successor) with maturities of six (6)
months or less from the date of acquisition.
"Closing Date" means the Business Day, in any event not later than
April 23, 1999 on which the Administrative Agent shall be satisfied that the
conditions precedent set forth in Section 4.1 (Conditions to Initial Advance)
have been fulfilled or otherwise waived by the Administrative Agent.
"Commitment" means with respect to each Lender, such Lender's Revolving
Credit Commitment or Letter of Credit Commitment, as the case may be, and
"Commitments" means the collective reference to the Revolving Credit Commitments
and the Letter of Credit Commitment of all of the Lenders.
"Committed Amount" means with respect to each Lender, such Lender's
Revolving Loan Committed Amount and Letter of Credit Committed Amount, as the
case may be, and "Committed Amounts" means collectively the Revolving Loan
Committed Amount and the Letter
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of Credit Committed Amount, of each of the Lenders.
"Commitment Fee" has the meaning described in Section 2.3.3 (Commitment
Fee).
"Commonly Controlled Entity" means an entity, whether or not
incorporated, which is under common control with either Borrower within the
meaning of Section 414(b) or (c) of the Internal Revenue Code.
"Contingent Liabilities" means as to the Borrowers on a consolidated
basis for any period of determination thereof (a) any contingent obligation of
any Person required to be shown on the Borrowers' balance sheet in accordance
with GAAP, and (b) any obligation required to be disclosed in the footnotes to
the Borrowers' financial statements in accordance with GAAP, guaranteeing
partially or in whole any Indebtedness, lease, dividend or other obligation,
exclusive of contractual indemnities and guarantees of non-monetary obligations
(other than guarantees of completion) which have not yet been called on or
quantified of any Person and excluding any long-term ground lease obligations.
Notwithstanding the foregoing, any litigation required to be disclosed in the
footnotes to the Borrowers' financial statements in accordance with GAAP shall
not be included as a "Contingent Liability" unless the same shall have been
reserved for in accordance with GAAP.
"Corporate Leverage Ratio" means as to the Borrowers on a consolidated
basis for any period of determination thereof the ratio of (a) Total
Indebtedness to (b) Total Asset Value.
"Current Letter of Credit Obligations" has the meaning described in
Section 2.2.5 (Payments of Letters of Credit).
"Credit Facility" means with respect to each Lender, such Lender's Pro
Rata Share of the Revolving Credit Facility or the Letter of Credit Facility, as
the case may be, and "Credit Facilities" means collectively the Revolving Credit
Facility and the Letter of Credit Facility and any and all other credit
facilities now or hereafter extended under or secured by this Agreement.
"Deed of Trust" and "Deeds of Trust" have the meanings described in
Section 4.1.6 (Deeds of Trust).
"Default" means an event that, with the giving of notice or lapse of
time, or both, would constitute an Event of Default under the provisions of this
Agreement.
"EBITDA" means as to the Borrowers on a consolidated basis for any
period of determination thereof, the net earnings (loss) for such period plus
the sum of the following (to the extent included in the calculation of net
earnings (loss) and without duplication): (a) depreciation and amortization
expense plus (b) Interest Expense plus (c) income tax expense paid or accrued
plus (d) extraordinary losses, losses from sales of assets and losses resulting
from forgiveness of Indebtedness minus (e) extraordinary gains and gains from
sales of assets plus (f) expenses associated with significant non-recurring
events minus (g) income associated with significant non-recurring events plus
(h) minority interest expense.
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"Eligible Assignee" means any Person who is: (a) currently a Lender;
(b) a commercial bank, trust company, insurance company, savings and loan
association, savings bank, investment bank, pension fund or mutual fund
organized under the laws of the United States of America, or any state thereof,
and having total assets in excess of $5,000,000,000; or (c) a commercial bank
organized under the laws of any other country which is a member of the
Organization for Economic Cooperation and Development ("OECD"), or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such Person is not currently a
Lender, such Person's senior unsecured long term indebtedness must be rated BBB
or higher by S&P, Baa2 or higher by Moody's, or the equivalent or higher of
either such rating by another rating agency of national reputation and
reasonably acceptable to the Administrative Agent.
"Enforcement Costs" means all expenses, charges, costs and fees
whatsoever (including, without limitation, reasonable outside and allocated
in-house counsel attorney's fees and expenses) of any nature whatsoever paid or
incurred following an uncured Event of Default by or on behalf of the
Administrative Agent and/or any of the Lenders in connection with (a) any or all
of the Obligations, the Agents' Obligations, this Agreement and/or any of the
other Financing Documents, (b) recording of the Deeds of Trust, (c) the
creation, perfection, collection, maintenance, preservation, defense,
protection, realization upon, disposition, sale or enforcement of all or any
part of this Agreement, any collateral securing the Obligations or any of the
other Financing Documents, including, without limitation, those costs and
expenses more specifically enumerated in Section 9.10 (Enforcement Costs), and
(d) the monitoring, administration, processing and/or servicing of any or all of
the Obligations, the Agents' Obligations, this Agreement and/or any of the other
Financing Documents.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time.
"Eurodollar Base Rate" means for any Interest Period with respect to
any Eurodollar Loan, the per annum interest rate rounded upward, if necessary,
to the nearest 1/100 of 1%, appearing on Telerate Page 3750 (or any successor
page) as the London interbank offered rate for deposits in Dollars at or about
11:00 a.m. (London time) on the date that is two (2) Eurodollar 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
"Eurodollar Base Rate" shall mean, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to the
nearest 1/100 of 1%) 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 (2) Eurodollar 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 Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates (rounded upwards,
if necessary, to the nearest 1/100 of 1%).
"Eurodollar Business Day" means any Business Day on which dealings in
United States Dollar deposits are carried out on the London interbank market and
on which commercial banks
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are open for domestic and international business (including dealings in Dollar
deposits) in London, England.
"Eurodollar Loan" means any advance of the Revolving Loan for which
interest is to be computed with reference to the Eurodollar Rate.
"Eurodollar Rate" means for any Interest Period with respect to any
Eurodollar Loan, (a) the Applicable Margin, plus (b) the per annum rate of
interest calculated pursuant to the following formula:
Eurodollar Base Rate
1.00 - Reserve Percentage
"Event of Default" has the meaning described in ARTICLE VII (Default
and Rights and Remedies).
"Extension Fee" has the meaning described in Section 2.3.4 (Extension
Fee).
"Facilities" means the collective reference to the loan, letter of
credit, interest rate protection, foreign exchange risk, cash management, and
other credit facilities now or hereafter provided to either of the Borrowers by
the Administrative Agent or the Lenders under this Agreement or otherwise by
FMB.
"FAD" or "funds available for distribution" means as to the Borrowers
on a consolidated basis for any period of determination thereof, FFO minus
principal amortization and non-revenue generating capital expenditures.
"Federal Funds Rate" means for any day of determination, 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) by the Federal Reserve Bank for the
next preceding Business Day) by the Federal Reserve Bank of Richmond or, if such
rate is not so published for any day that is a Business Day, the average of
quotations for such day on such transactions received by the Administrative
Agent from three (3) federal funds brokers of recognized standing selected by
the Administrative Agent.
"Fees" means the collective reference to each fee payable to the
Administrative Agent, for its own account or for the ratable benefit of the
Lenders, under the terms of this Agreement or under the terms of any of the
other Financing Documents, including, without limitation, the Revolving Credit
Unused Line Fees, Letter of Credit Fees, the Cancellation Fee, the Commitment
Fee, the Extension Fee and the Agency Fees.
"Financing Documents" means at any time collectively this Agreement,
the Notes, the Deeds of Trust, the Security Documents, the Letter of Credit
Documents, and any other instrument, agreement or document previously,
simultaneously or hereafter executed and delivered by the Borrowers, or either
of them and/or any other Person, singly or jointly with another Person or
Persons, evidencing, securing, guarantying or in connection with this Agreement,
any Note, any Deed of Trust, any of the Security Documents, any of the
Facilities, and/or any of the
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Obligations or the Agents' Obligations.
"Fixed Charge Coverage Ratio" means as to the Borrowers on a
consolidated basis for any period of determination thereof the ratio of (a)
EBITDA to (b) the sum of:
(i) total Interest Expense, whether paid,
accrued or capitalized;
(ii) scheduled principal payments (excluding
balloon payments due at maturity); and
(iii) dividends on preferred stock;
all for the most recent quarter.
"Fixed or Capital Assets" of a Person at any date means all assets
which would, in accordance with GAAP consistently applied, be classified on the
balance sheet of such Person as property, plant or equipment at such date.
"FFO" or "funds from operations" means as to the Borrowers on a
consolidated basis for any period of determination thereof, the sum of net
income (computed in accordance with GAAP), excluding the cumulative effects of
changes in accounting principles, extraordinary or unusual items, and gains or
losses from debt restructuring and sales of property, plus depreciation and
amortization, and after adjustments for unconsolidated partnerships and joint
ventures (which adjustments shall be calculated to reflect funds from operations
as aforesaid).
"GAAP" means generally accepted accounting principles in the United
States of America in effect from time to time.
"Governmental Authority" means any nation or government, any state or
other political subdivision thereof and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government and any department, agency or instrumentality thereof.
"Hazardous Materials" means (a) any "hazardous waste" as defined by the
Resource Conservation and Recovery Act of 1976, as amended from time to time,
and regulations promulgated thereunder; (b) any "hazardous substance" as defined
by the Comprehensive Environmental Response, Compensation and Liability Act of
1980, as amended from time to time, and regulations promulgated thereunder; (c)
any substance the presence of which on any property now or hereafter owned,
acquired or operated by either of the Borrowers, or any Affiliate of either of
the Borrowers, is prohibited by any Law similar to those set forth in this
definition; and (d) any other substance which by Law requires special handling
in its collection, storage, treatment or disposal.
"Hazardous Materials Contamination" means the contamination (whether
presently existing or occurring after the date of this Agreement) by Hazardous
Materials of any property owned, operated or controlled by either of the
Borrowers, or any Affiliate of either of the Borrowers, or
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for which either of the Borrowers, or any Affiliate of either of the Borrowers,
has responsibility, including, without limitation, improvements, facilities,
soil, ground water, air or other elements on, or of, any property now or
hereafter owned, acquired or operated by either of the Borrowers, or any
Affiliate of either of the Borrowers, and any other contamination by Hazardous
Materials for which either of the Borrowers, or any Affiliate of either of the
Borrowers, is, or is claimed to be, responsible.
"Indebtedness" of a Person means at any date the total liabilities of
such Person at such time determined in accordance with GAAP consistently
applied.
"Indebtedness for Borrowed Money" of a Person means at any time the sum
at such time of (a) Indebtedness of such Person for borrowed money or for the
deferred purchase price of property or services, (b) any obligations of such
Person in respect of letters of credit, banker's or other acceptances or similar
obligations issued or created for the account of such Person, (c) Lease
Obligations of such Person with respect to Capital Leases, (d) all liabilities
secured by any Lien on any property owned by such Person, to the extent attached
to such Person's interest in such property, even though such Person has not
assumed or become personally liable for the payment thereof, (e) obligations of
third parties which are being guarantied or indemnified against by such Person
or which are secured by the property of such Person; (f) any obligation of such
Person under an employee stock ownership plan or other similar employee benefit
plan; (g) any obligation of such Person or a Commonly Controlled Entity to a
Multi-employer Plan; and (h) any obligations, liabilities or indebtedness,
contingent or otherwise, under or in connection with, any interest rate or
currency swap agreements, cap, floor, and collar agreements, currency spot,
foreign exchange and forward contracts and other similar agreements and
arrangements; but excluding trade and other accounts payable in the ordinary
course of business in accordance with customary trade terms and which are not
overdue (as determined in accordance with customary trade practices) or which
are being disputed in good faith by such Person and for which adequate reserves
are being provided on the books of such Person in accordance with GAAP.
"Interest Coverage Ratio" means as to the Borrowers on a consolidated
basis for any period of determination thereof, the ratio of (a) EBITDA to (b)
total Interest Expense, whether paid, accrued or capitalized.
"Interest Expense" means, for any period and without duplication, total
interest expense of the Borrowers, whether paid, accrued or capitalized
(including the interest component of Capital Leases but excluding interest
expense covered by an interest reserve established under a construction loan
facility) plus the Borrowers' shares (based on ownership) of accrued, paid or
capitalized interest with respect to any Indebtedness of an affiliate of either
of the Borrowers.
"Interest Payment Date" means the first day of each calendar month
commencing on May 1, 1999 and continuing thereafter until the Obligations have
been irrevocably paid in full.
"Interest Period" means as to any Eurodollar Loan, the period
commencing on and including the date such Eurodollar Loan is made (or on the
effective date of the Borrowers' election to convert any Base Rate Loan to a
Eurodollar Loan in accordance with the provisions
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of this Agreement) and ending on and including the day which is 30, 60, 90, 120,
150, 180 or 270 days thereafter, as selected by the Borrowers in accordance with
the provisions of this Agreement, and thereafter, each period commencing on the
last day of the then preceding Interest Period for such Eurodollar Loan and
ending on and including the day which is 30, 60, 90, 120, 150, 180 or 270 days
thereafter, as selected by the Borrowers in accordance with the provisions of
this Agreement; provided, however that:
(a) the first day of any Interest Period shall be a Eurodollar
Business Day;
(b) if any Interest Period would end on a day that shall not
be a Eurodollar Business Day, such Interest Period shall be extended to
the next succeeding Eurodollar Business Day unless such next succeeding
Eurodollar Business Day would fall in the next calendar month, in which
case, such Interest Period shall end on the next preceding Eurodollar
Business Day; and
(c) no Interest Period shall extend beyond the Revolving
Credit Expiration Date.
"Interest Rate Election Notice" has the meaning described in Section
2.4.2(e) (Selection of Interest Rates).
"Interest Rate Protection Agreement" means any interest rate or
currency swap agreements, hedging, cap, floor, and collar agreements, currency
spot and forward contracts and other similar agreements and arrangements with
the Administrative Agent or any Affiliate of the Administrative Agent.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and the Income Tax Regulations issued and proposed to
be issued thereunder.
"Laws" means all ordinances, statutes, rules, regulations, orders,
injunctions, writs, or decrees of any Governmental Authority.
"Letter of Credit" and "Letters of Credit" shall have the meanings
described in Section 2.2.1 (Letters of Credit).
"Letter of Credit Agreement" means the collective reference to each
letter of credit application and agreement substantially in the form of the
Administrative Agent's then standard form of application for letter of credit or
such other form as may be approved by the Administrative Agent, executed and
delivered by either of the Borrowers in connection with the issuance of a Letter
of Credit, as the same may from time to time be amended, restated, supplemented
or modified; and "Letter of Credit Agreements" means all of the foregoing in
effect at any time and from time to time.
"Letter of Credit Cash Collateral Account" has the meaning described in
Section 2.2.3 (Terms of Letters of Credit).
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"Letter of Credit Documents" means any and all drafts under or
purporting to be under a Letter of Credit, any Letter of Credit Agreement, and
any other instrument, document or agreement executed and/or delivered by either
of the Borrowers or any other Person under, pursuant to or in connection with a
Letter of Credit or any Letter of Credit Agreement.
"Letter of Credit Facility" means the facility established pursuant to
Section 2.2 (Letter of Credit Facility).
"Letter of Credit Fee" and "Letter of Credit Fees" have the meanings
described in Section 2.2.2 (Letter of Credit Fees).
"Letter of Credit Obligations" means the collective reference to all
Obligations of either of the Borrowers with respect to the Letters of Credit and
the Letter of Credit Agreements.
"Liabilities" means at any date all liabilities that, in accordance
with GAAP consistently applied, should be classified as liabilities on a
consolidated balance sheet of the Borrowers and their respective Subsidiaries.
"Lien" means any mortgage, deed of trust, deed to secure debt, grant,
pledge, security interest, assignment, encumbrance, judgment, lien,
hypothecation, provision in any instrument or other document for confession of
judgment, cognovit or other similar right or remedy, claim or charge of any
kind, whether perfected or unperfected, avoidable or unavoidable, including,
without limitation, 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 under the Uniform Commercial Code of any jurisdiction,
excluding the precautionary filing of any financing statement by any lessor in a
true lease transaction under the Uniform Commercial Code of any jurisdiction or
the agreement to give any financing statement by any lessee in a true lease
transaction.
"Loan Notice" has the meaning described in Section 2.1.2 (Procedure for
Making Advances).
"Multi-employer Plan" means a Plan that is a Multi-employer plan as
defined in Section 4001(a)(3) of ERISA.
"Net Outstandings" of any Lender means, at any time, the sum of (a) all
amounts paid by such Lender (other than pursuant to Section 8.5
(Indemnification)) to the Administrative Agent in respect to the Revolving Loan
or otherwise under this Agreement, minus (b) all amounts paid by the
Administrative Agent to such Lender which are received by the Administrative
Agent and which, pursuant to this Agreement, are paid over to such Lender for
application in reduction of the outstanding principal balance of the Revolving
Loan.
"NOI" means as to the Borrowers on a consolidated basis for any period
of determination thereof the sum of (a) rents and other income received in the
ordinary course of business from the Unencumbered Properties (including proceeds
of rent loss insurance but excluding pre-paid rents and revenues and security
deposits except to the extent applied in satisfaction of tenants'
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obligations for rent and further adjusted to omit the straight-line treatment of
rent) minus (b) all expenses (other than Interest Expense and minority interest
expense) paid or accrued related to the ownership, operation or maintenance of
the Unencumbered Properties, including, but not limited to, taxes, assessments
and other similar charges, insurance, utilities, payroll costs, maintenance,
repair and landscaping expenses, marketing expenses, general and administrative
expenses and property management fees (equal to the greater of actual management
fees or three and one-half of one percent (3.5%) of revenues), but specifically
excluding general overhead expenses of the Borrowers.
"Non-Ratable Loan" means an advance under the Revolving Loan made by
FMB in accordance with the provisions of Section 2.5.2 (Settlement Procedures as
to Revolving Loan).
"Note" means any Revolving Credit Note, as the case may be, and "Notes"
means collectively each Revolving Credit Note, and any other promissory note
which may from time to time evidence all or any portion of the Obligations.
"Obligations" means all present and future indebtedness, duties,
obligations, and liabilities, whether now existing or contemplated or hereafter
arising, of either of the Borrowers to the Lenders and/or Administrative Agent
and/or the Documentation Agent under, arising pursuant to, in connection with
and/or on account of the provisions of this Agreement, each Note, each Security
Document, Interest Rate Protection Agreement and/or any of the other Financing
Documents, the Revolving Loan, and/or any of the Facilities including, without
limitation, the principal of, and interest on, each Note, late charges, the
Fees, Enforcement Costs, and prepayment premiums or breakage charges (if any),
letter of credit fees or fees charged with respect to any guaranty of any letter
of credit.
"Occupancy Rate" means for any period of determination the ratio,
expressed as a percentage, of (a) the aggregate square footage of a real estate
Asset actually occupied by tenants paying rent pursuant to binding leases to (b)
the aggregate rentable square footage of such real estate Asset.
"Outstanding Letter of Credit Obligations" has the meaning described in
Section 2.2.3 (Terms of Letters of Credit).
"PBGC" means the Pension Benefit Guaranty Corporation.
"Permitted Liens" means: (a) Liens for Taxes which are not delinquent
or which the Administrative Agent has determined in the exercise of its sole and
absolute discretion (i) are being diligently contested in good faith and by
appropriate proceedings, and such contest operates to suspend collection of the
contested Taxes and enforcement of a Lien, (ii) the respective Borrower has the
financial ability to pay, with all penalties and interest, at all times without
materially and adversely affecting such Borrower, and (iii) are not, and will
not be with appropriate filing, the giving of notice and/or the passage of time,
entitled to priority over any Lien of the Administrative Agent and/or the
Lenders; (b) deposits or pledges to secure obligations under workers'
compensation, social security or similar laws, or under unemployment insurance
in the ordinary course of business; (c) Liens existing as of the date hereof and
reflected on the
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Borrowers' financial statements provided pursuant to Section 3.1.10 (Financial
Condition) (d) judgment Liens to the extent the entry of such judgment does not
constitute a Default or an Event of Default under the terms of this Agreement or
result in the sale or levy of, or execution on any of the Unencumbered
Properties; and (e) Liens created subsequent to the date hereof which do not
constitute or result in a Default or an Event of Default under the terms of this
Agreement.
"Permitted Uses" means as of the date hereof, the payment of all of the
Borrowers' obligations to the Administrative Agent, and after the date hereof
(a) the payment of operating and general corporate expenses, (b) to provide
financing for acquisition, development, expansion and renovation costs of real
estate properties of either of the Borrowers and (c) to support the issuance of
standby letters of credit for the Borrowers' ordinary business purposes.
"Person" means and includes an individual, a corporation, a
partnership, a joint venture, a limited liability company or partnership, a
trust, an unincorporated association, a Governmental Authority, or any other
organization or entity.
"Plan" means any pension plan that is covered by Title IV of ERISA and
in respect of which either Borrower or a Commonly Controlled Entity is an
"employer" as defined in Section 3 of ERISA.
"Post-Default Rate" means the Base Rate in effect from time to time,
plus two percent (2%) per annum.
"Post-Termination Date Letter of Credit" and "Post-Termination Date
Letters of Credit" have the meanings described in Section 2.2.3 (Terms of
Letters of Credit).
"Prepayment" means a Revolving Loan Optional Prepayment, and
"Prepayments" mean collectively all Revolving Loan Optional Prepayments.
"Pricing Ratio" means the Corporate Leverage Ratio.
"Prime Rate" means the floating and fluctuating per annum prime
commercial lending rate of interest of the Administrative Agent, as established
and declared by the Administrative Agent at any time or from time to time. The
Prime Rate shall be adjusted automatically, without notice, as of the effective
date of any change in such prime commercial lending rate. The Prime Rate does
not necessarily represent the lowest rate of interest charged by the
Administrative Agent or any of the Lenders to borrowers.
"Pro Rata Share" means at any time and as to any Lender, the percentage
derived by dividing the unpaid principal amount of the Revolving Loan and Letter
of Credit Obligations owing to that Lender by the aggregate unpaid principal
amount of all Revolving Loans and Letter of Credit Obligations then outstanding;
or if no Revolving Loans or Letter of Credit Obligations are outstanding, by
dividing the total amount of such Lender's Commitments by the total amount of
the Commitments of the Administrative Agent and all of the Lenders.
"REIT" means a real estate investment trust under the Internal Revenue
Code.
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"Reportable Event" means any of the events set forth in Section 4043(c)
of ERISA or the regulations thereunder.
"Reserve Percentage" means, at any time, the then current maximum rate
for which reserves (including any basic, supplemental, marginal and emergency
reserves) are required to be maintained by member banks of the Federal Reserve
System under Regulation D of the Board of Governors of the Federal Reserve
System against "Eurocurrency liabilities", as that term is defined in Regulation
D. The Eurodollar Rate shall be adjusted automatically on and as of the
effective date of any change in the Reserve Percentage.
"Responsible Officer" means for each Borrower, its chief executive
officer, president or executive vice president or, with respect to financial
matters, its chief financial officer.
"Requisite Lenders" means at any time of determination one or more of
the Lenders holding at least sixty percent (60%) of the Commitments.
"Revolving Credit Commitment" means the agreement of a Lender relating
to the making the Revolving Loan and advances thereunder subject to and in
accordance with the provisions of this Agreement; and "Revolving Credit
Commitments" means the collective reference to the Revolving Credit Commitment
of each of the Lenders.
"Revolving Credit Commitment Period" means the period of time from the
Closing Date to the Business Day preceding the Revolving Credit Termination
Date.
"Revolving Credit Committed Amount" has the meaning described in
Section 2.1.1 (Revolving Credit Facility).
"Revolving Credit Expiration Date" means April 22 2002; provided,
however, from January 1, 2001 through January 31, 2001, the Borrowers may
request in writing to extend the Revolving Credit Expiration Date for a period
of one (1) year, provided no Event of Default exists. Any decision to extend the
Revolving Credit Expiration Date shall be made within sixty (60) days after
receipt of the Borrower's written request in the sole and absolute discretion of
the Administrative Agent and the Lenders, respectively, and shall be evidenced
in writing executed by each of them.
"Revolving Credit Facility" means the facility established by the
Lenders pursuant to Section 2.1 (Revolving Credit Facility).
"Revolving Credit Note" and "Revolving Credit Notes" have the meanings
described in Section 2.1.3 (Revolving Credit Notes).
"Revolving Credit Pro Rata Share" has the meaning described in Section
2.1.1 (Revolving Credit Facility).
"Revolving Credit Termination Date" means the earlier of (a) the
Revolving Credit Expiration Date, or (b) the date on which the Revolving Credit
Commitments are terminated
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pursuant to Section 7.2 (Remedies) or otherwise.
"Revolving Credit Unused Line Fee" and "Revolving Credit Unused Line
Fees" have the meanings described in Section 2.1.6 (Revolving Credit Unused Line
Fee).
"Revolving Loan" has the meaning described in Section 2.1.1 (Revolving
Credit Facility).
"Revolving Loan Account" has the meaning described in Section 2.1.5
(Revolving Loan Account).
"Revolving Loan Optional Prepayment" and "Revolving Loan Optional
Prepayments" have the meanings described in Section 2.1.4 (Optional Prepayment
of Revolving Loan).
"Secured Indebtedness" is defined as all indebtedness secured by deeds
of trust, mortgages, indemnity deeds of trust or any other lien instruments.
"Security Documents" means collectively any assignment, pledge
agreement, security agreement, mortgage, deed of trust, deed to secure debt,
financing statement and any similar instrument, document or agreement under or
pursuant to which a Lien is now or hereafter granted to, or for the benefit of,
the Administrative Agent and/or the Lenders on any real or personal property of
any Person to secure all or any portion of the Obligations and the Agents'
Obligations, all as the same may from time to time be amended, restated,
supplemented or otherwise modified.
"Settlement Date" means each Business Day after the Closing Date
selected by the Administrative Agent in its sole discretion subject to and in
accordance with the provisions of Section (Settlement Procedures as to Revolving
Loan) as of which a Settlement Report is delivered by the Administrative Agent
and on which settlement is to be made among the Lenders in accordance with the
provisions of Section 2.3.5 (Payments).
"Settlement Report" means each report prepared by the Administrative
Agent and delivered to each Lender and setting forth, among other things, as of
the Settlement Date indicated thereon and as of the next preceding Settlement
Date, the aggregate outstanding principal balance of the Revolving Loan, each
Lender's Revolving Credit Pro Rata Share thereof, each Lender's Net Outstandings
and all Non-Ratable Loans made, and all payments of principal, interest and Fees
received by the Administrative Agent from the Borrowers during the period
beginning on such next preceding Settlement Date and ending on such Settlement
Date.
"State" means the State of Maryland.
"Subordinated Debt" means the convertible subordinated debentures
issued by Mid- Atlantic in the principal amount of $60,000,000 scheduled to
mature September __, 2003.
"Subordinated Indebtedness" means all Indebtedness, including, without
limitation, the Subordinated Debt, incurred at any time by either of the
Borrowers, which is subordinated to the Obligations.
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"Subsidiary" means any corporation or limited liability company the
majority of the voting shares of which at the time are owned directly by either
Borrower and/or by one or more Subsidiaries of either Borrower or any
partnership, joint venture or limited partnership the majority ownership
interests of which at the time are owned directly by either Borrower and/or by
one or more Subsidiaries of either Borrower.
"Tangible Net Worth" means as to the Borrowers on a consolidated basis
at any date of determination thereof, Total Asset Value minus Total Liabilities.
"Taxes" means all taxes and assessments whether general or special,
ordinary or extraordinary, or foreseen or unforeseen, of every character
(including all penalties or interest thereon), which at any time may be
assessed, levied, confirmed or imposed by any Governmental Authority on either
of the Borrowers or any of its or their properties or assets or any part thereof
or in respect of any of its or their franchises, businesses, income or profits.
"Total Asset Value" means as to the Borrowers on a consolidated basis
for any period of determination thereof, the sum of:
(a) for all properties owned during the entire fiscal quarter
most recently ended, EBITDA for the most recent quarter annualized and
divided by a capitalization rate of ten percent (10%) and with respect
to any properties acquired during the most recent fiscal quarter, the
undepreciated purchase price paid for such properties less any amounts
paid to either of the Borrowers or any Subsidiary as a purchase price
adjustment, held in escrow, retained as a contingency reserve, or other
similar arrangement (including without duplication the Borrower's or
Subsidiary's proportionate share of undepreciated purchase price paid
for such property of unconsolidated Affiliates of either of the
Borrowers or such Subsidiary;
(b) new development projects at GAAP value, limited to fifteen
percent (15%) of Total Asset Value;
(c) raw land at GAAP value, limited to five percent (5%) of
Total Asset Value; and
(d) Cash and Cash Equivalents.
"Total Indebtedness" means as to the Borrowers on a consolidated basis
for any period of determination thereof, all borrowings, including lines of
credit, mortgages payable, construction loans, debt in unconsolidated entities
and Contingent Liabilities, excluding the Subordinated Debt.
"Total Liabilities" means as to the Borrowers on a consolidated basis
for any period of determination thereof, all items shown as liabilities on the
Borrowers' consolidated balance sheet, excluding the Subordinated Debt and
minority interests.
"Total Revolving Credit Committed Amount" has the meaning described in
Section 2.1.1
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(Revolving Credit Facility).
"Unencumbered Asset Value" means as to the Borrowers on a consolidated
basis for any period of determination thereof, the Adjusted Unencumbered NOI for
all Unencumbered Properties for the most recent quarter annualized and divided
by a ten percent (10%) capitalization rate. Properties that do not satisfy the
conditions set forth in the definition of Unencumbered Properties will not be
given any worth in the determination of Unencumbered Asset Value.
"Unencumbered Capital Expenditure Reserve" means a reserve for capital
expenditures relating to the Unencumbered Properties calculated at the rate of
$.25 per square foot.
"Unencumbered Interest Coverage" means as to the Borrowers on a
consolidated basis for any period of determination thereof, the ratio of (a)
Adjusted Unencumbered NOI for the most recent quarter to (b) total Interest
Expense on all unsecured borrowings, excluding the Subordinated Debt, whether
paid, accrued or capitalized, for the most recent quarter.
"Unencumbered Leverage Ratio" means as to the Borrowers on a
consolidated basis for any period of determination thereof, the ratio of (a)
total Unsecured Indebtedness to (b) total Unencumbered Asset Value.
"Unencumbered Properties" means properties, excluding raw land, owned
by one or both of the Borrowers or a Subsidiary of either of the Borrowers,
that, collectively, have an Occupancy Rate in the aggregate equal to or greater
than eighty-five percent (85%) with all tenants comprising such Occupancy Rate
paying base rent in accordance with the terms of their respective leases (i.e.,
no arrearages in excess of sixty (60) days) and actually occupying and operating
at the premises (i.e., none of the tenants comprising the Occupancy Rate have
"gone dark") and each of which satisfies the following criteria:
(a) it is improved;
(b) it is either (i) owned in fee simple by one of the
Borrowers or a Subsidiary or (ii) leased to one of the Borrowers or a
Subsidiary pursuant to a ground lease with (A) an aggregate term of not
less than thirty (30) years inclusive of all ground lessee options to
extend acceptable to the Agents and the Lenders and (B) with notice of
default to the Administrative Agent with opportunity to cure acceptable
to the Agents and the Lenders, including, the Administrative Agent's
right to assume the ground lessee's obligations under the lease without
the ground lessor's approval;
(c) it is not subject to any Lien other than Permitted Liens
described in subsections (a) through (d), inclusive, of the definition
of Permitted Liens;
(d) it has been accepted by the Requisite Lenders for
inclusion as an Unencumbered Property; and
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(e) it has an Occupancy Rate of seventy percent (70%) or
greater, with all tenants comprising such Occupancy Rate paying base
rent in accordance with the terms of their respective leases (i.e., no
arrearages in excess of sixty (60) days) and actually occupying and
operating at the premises (i.e., none of the tenants comprising the
Occupancy Rate have "gone dark").
"Unsecured Indebtedness" includes all unsecured borrowings, excluding
the Subordinated Debt.
"Wholly Owned Subsidiary" means any domestic United States corporation
or limited liability company all the shares of stock of all classes of which
(other than directors' qualifying shares) at the time are owned directly or
indirectly by a Borrower and/or by one or more Wholly Owned Subsidiaries of a
Borrower or any partnership, joint venture or limited partnership all the
ownership interests of which at the time are owned directly by either Borrower
and/or by one or more Subsidiaries of either Borrower.
"Year 2000 Problem" means the inability of computers and computer
software, as well as embedded microchips in non-computing devices, to perform
properly, including the performance of date-sensitive functions with respect to
certain dates prior to and after December 31, 1999, together with any and all
consequences related thereto.
Section 1.2 Accounting Terms and Other Definitional Provisions.
--------------------------------------------------------
Unless otherwise defined herein, as used in this Agreement and in any
certificate, report or other document made or delivered pursuant hereto,
accounting terms not otherwise defined herein, and accounting terms only partly
defined herein, to the extent not defined, shall have the respective meanings
given to them under GAAP, as consistently applied to the applicable Person. All
terms used herein which are defined by the Uniform Commercial Code shall have
the same meanings as assigned to them by the Uniform Commercial Code unless and
to the extent varied by this Agreement. The words "hereof", "herein" and
"hereunder" and words of similar import when used in this Agreement shall refer
to this Agreement as a whole and not to any particular provision of this
Agreement, and article, section, subsection, schedule and exhibit references are
references to articles, sections or subsections of, or schedules or exhibits to,
as the case may be, this Agreement unless otherwise specified. As used herein,
the singular number shall include the plural, the plural the singular and the
use of the masculine, feminine or neuter gender shall include all genders, as
the context may require. Reference to any one or more of the Financing Documents
shall mean the same as the foregoing may from time to time be amended, restated,
substituted, extended, renewed, supplemented or otherwise modified. Reference in
this Agreement and the other Financing Documents to the "Borrower", the
"Borrowers", "each Borrower" or otherwise with respect to either of the
Borrowers shall mean each and every Borrower and both of the Borrowers, jointly
and severally, unless a specific Borrower is expressly identified.
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ARTICLE II
THE CREDIT FACILITIES
Section 2.1 The Revolving Credit Facility.
2.1.1 Revolving Credit Facility.
Subject to and upon the provisions of this Agreement, the
Lenders collectively, but severally, establish a revolving credit facility in
favor of the Borrowers. The aggregate of all advances under the Revolving Credit
Facility is sometimes referred to in this Agreement collectively as the
"Revolving Loan".
The amount set forth below opposite each Lender's name
is herein called such Lender's "Revolving Credit Committed Amount" and the total
of each Lender's Revolving Credit Committed Amount is herein called the "Total
Revolving Credit Committed Amount". The proportionate share set forth below
opposite each Lender's name is herein called such Lender's "Revolving Credit Pro
Rata Share":
Lender Revolving Credit Revolving Credit
- - ------ Committed Pro Rata Share
Amount --------------
------
FMB $30,000,000 40%
First Union $25,000,000 33.34%
Provident $10,000,000 13.33%
Chevy Chase $10,000,000 13.33%
Total Revolving Credit $75,000,000 100%
Committed Amount
Neither the Administrative Agent nor any of the Lenders
shall be responsible for the Revolving Credit Commitment of any other Lender,
nor will the failure of any Lender to perform its obligations under its
Revolving Credit Commitment in any way relieve any other Lender from performing
its obligations under its Revolving Credit Commitment.
During the Revolving Credit Commitment Period, any or
all of the Borrowers may request advances under the Revolving Credit Facility in
accordance with the provisions of this Agreement; provided that after giving
effect to either Borrower's request:
(a) the outstanding principal balance of each Lender's
Pro Rata Share of the Revolving Loan and of the Letter of Credit Obligations
would not exceed such Lender's Revolving Credit Pro Rata Share; and,
(b) the aggregate outstanding principal balance of the
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Revolving Loan and all Letter of Credit Obligations would not exceed the Total
Revolving Credit Committed Amount.
2.1.2 Procedure for Making Advances Under the Revolving Loan;
Lender Protection Loans.
The Borrowers may borrow under the Revolving Credit Facility on
any Business Day; provided, however, advances shall be in amounts not less than
One Million Dollars ($1,000,000) and may only be made in integral multiples of
Five Hundred Thousand Dollars ($500,000). The maximum number of advances of the
Revolving Loan outstanding at any point in time shall be ten (10). Advances
under the Revolving Loan shall be deposited to a demand deposit account of
Mid-Atlantic with the Administrative Agent or shall be otherwise applied as
directed by the Borrowers, which direction the Administrative Agent may require
to be in writing. Not later than 10:00 a.m. (Baltimore City Time) on the date of
the requested borrowing, the Borrowers shall give the Administrative Agent oral
or written notice (a "Loan Notice") of the amount and (if requested by the
Administrative Agent) the purpose of the requested borrowing. Any oral Loan
Notice shall be confirmed in writing by the Borrowers within three (3) Business
Days after the making of the requested advance under the Revolving Loan. Each
Loan Notice shall be irrevocable. Upon receipt of any such Loan Notice, the
Administrative Agent shall promptly notify each Lender of the amount of each
advance to be made by such Lender on the requested borrowing date under such
Lender's Revolving Credit Commitment.
Not later than 1:00 p.m. (Baltimore City Time) on each requested
borrowing date for the making of advances under the Revolving Loan, each Lender
shall, if it has received timely notice from the Administrative Agent of the
Borrowers' request for such advances, make available to the Administrative
Agent, in funds immediately available to the Administrative Agent at the
Administrative Agent's office set forth in Section 9.1 (Notices), such Lender's
Pro Rata Share of the advances to be made on such date.
In addition, subsequent to a Default each of the Borrowers hereby
irrevocably authorizes the Lenders at any time and from time to time, without
further request from or notice to the Borrowers, to make advances under the
Revolving Loan which the Administrative Agent, in its sole and absolute
discretion, deems necessary or appropriate to cure the Default, if curable by
the payment of money and protect the interests of the Administrative Agent
and/or any or all of the Lenders under this Agreement, including, without
limitation, principal of, and/or interest on, the Revolving Loan, the
Obligations (including any Letter of Credit Obligations), and/or Enforcement
Costs, prior to, on, or after the termination of other advances under this
Agreement, regardless of whether the outstanding principal amount of the
Revolving Loan which the Lenders may advance hereunder exceeds the Total
Revolving Credit Committed Amount.
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2.1.3 Revolving Credit Notes.
The obligation of the Borrowers to pay each Lender's Pro Rata
Share of the Revolving Loan, with interest, shall be evidenced by a series of
promissory notes (as from time to time extended, amended, restated, supplemented
or otherwise modified, collectively the "Revolving Credit Notes" and
individually a "Revolving Credit Note") substantially in the form of EXHIBIT "A"
attached hereto and made a part hereof, with appropriate insertions. Each
Lender's Revolving Credit Note shall be dated as of the Closing Date, shall be
payable to the order of such Lender at the times provided in the Revolving
Credit Note, and shall be in the principal amount of such Lender's Revolving
Credit Pro Rata Share. Each of the Borrowers acknowledges and agrees that if the
outstanding principal balance of the Revolving Loan outstanding from time to
time exceeds the aggregate face amount of the Revolving Credit Notes the excess
shall bear interest at the Post-Default Rate and shall be payable, with accrued
interest, ON DEMAND. The Revolving Credit Notes shall not operate as a novation
of any of the Obligations or nullify, discharge, or release any such Obligations
or the continuing contractual relationship of the parties hereto in accordance
with the provisions of this Agreement.
2.1.4 Optional Prepayments of Revolving Loan.
The Borrowers shall have the option at any time and from time to
time to prepay (each a "Revolving Loan Optional Prepayment" and collectively the
"Revolving Loan Optional Prepayments") the Revolving Loan, in whole or in part
without premium or penalty; provided, however, partial Revolving Loan Optional
Prepayments shall be in amounts not less than One Million Dollars ($1,000,000)
and may only be made in integral multiples of Five Hundred Thousand Dollars
($500,000) and any prepayment shall be subject to payment of all applicable sums
as calculated pursuant to Section 2.4.4 (Indemnity). Revolving Loan Optional
Prepayments shall be made following a timely and proper written notice to the
Administrative Agent with respect thereto specifying the date and amount of any
intended Revolving Loan Optional Prepayment. The amount to be prepaid shall be
paid by the Borrowers to the Administrative Agent on the date specified for such
prepayment. Revolving Loan Optional Prepayments shall be irrevocable.
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2.1.5 Revolving Loan Account.
The Administrative Agent will establish and maintain a loan
account on its books (the "Revolving Loan Account") to which the Administrative
Agent will (a) debit (i) the principal amount of each advance under the
Revolving Loan made by the Lenders hereunder as of the date made, (ii) the
amount of any interest accrued on the Revolving Loan as and when due, and (iii)
any other amounts due and payable by the Borrowers to the Administrative Agent
and/or the Lenders from time to time under the provisions of this Agreement in
connection with the Revolving Loan, including, without limitation, Enforcement
Costs, Fees, late charges, and service, collection and audit fees, as and when
due and payable, and (b) credit all payments made by the Borrowers to the
Administrative Agent on account of the Revolving Loan as of the date made. All
credit entries to the Revolving Loan Account are conditional and shall be
readjusted as of the date made if final and indefeasible payment is not received
by the Administrative Agent in cash or solvent credits. Any and all periodic or
other statements or reconciliations, and the information contained in those
statements or reconciliations, of the Revolving Loan Account shall be final,
binding and conclusive upon the Borrowers and the Lenders in all respects,
absent manifest error, unless the Administrative Agent receives specific written
objection thereto from the Borrowers within thirty (30) Business Days after such
statement or reconciliation shall have been sent by the Administrative Agent.
2.1.6 Revolving Credit Unused Line Fee.
The Borrowers shall pay to the Administrative Agent for the
ratable benefit of the Lenders a quarterly revolving credit facility fee
(collectively, the "Revolving Credit Unused Line Fees" and individually, a
"Revolving Credit Unused Line Fee") in an amount equal to the aggregate of (a)
one-quarter of one percent (.25%) per annum on the average daily unused and
undisbursed portion of the Total Revolving Credit Committed Amount up to and
including Forty Million Dollars ($40,000,000) and (b) fifteen one-hundredths of
one percent (.15%) per annum on the average daily unused and undisbursed portion
of the Total Revolving Credit Committed Amount in excess of Forty Million
Dollars ($40,000,000), as in effect from time to time accruing during each
calendar quarter. The accrued and unpaid portion of the Revolving Credit Unused
Line Fee shall be due and payable by the Borrowers to the Administrative Agent
on the first day of each calendar quarter, commencing on the first such date
following the date hereof, and on the Revolving Credit Termination Date. The
Outstanding Letter of Credit Obligations are considered usage of the Total
Revolving Credit Committed Amount for the purpose of determining the Revolving
Credit Unused Line Fee.
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2.1.7 Cancellation Fee.
In the event of the termination by, or on behalf of, the
Borrowers, of the Revolving Credit Commitment prior to April 23, 2002, or April
23, 2003 if the one-year extension is requested and granted, the Borrowers shall
pay a fee (the "Cancellation Fee") equal to one-eighth of one percent (.125%) of
the Total Revolving Credit Committed Amount ($93,750). Payment of the Revolving
Loan in whole or in part by or on behalf of the Borrowers, by court order or
otherwise, following and as a result of the institution of any bankruptcy
proceeding by or against the Borrowers, shall be deemed to be a prepayment of
the Revolving Loan subject to the Cancellation Fee provided in this subsection.
The Cancellation Fee shall be paid to the Administrative Agent for the ratable
benefit of the Lenders.
Section 2.2 The Letter of Credit Facility.
-----------------------------
2.2.1 Letters of Credit.
Subject to and upon the provisions of this Agreement, and as a
part of the Revolving Credit Commitments, each of the Borrowers, upon the prior
approval of the Administrative Agent, may obtain standby letters of credit (as
the same may from time to time be amended, supplemented or otherwise modified,
each a "Letter of Credit" and collectively the "Letters of Credit") from the
Administrative Agent from time to time. The Borrowers will not be entitled to
obtain a Letter of Credit unless (a) the Borrowers are then able to obtain a
Revolving Loan from the Lenders in an amount not less than the proposed face
amount of the Letter of Credit requested by the Borrowers, and (b) the sum of
the then Outstanding Letter of Credit Obligations (including the amount of the
requested Letter of Credit) does not exceed Five Million Dollars ($5,000,000).
2.2.2 Letter of Credit Fees.
Prior to or simultaneously with the opening of each Letter of
Credit, the Borrowers shall pay to the Administrative Agent for the ratable
benefit of the Lenders, a letter of credit fee (each a "Letter of Credit Fee"
and collectively the "Letter of Credit Fees") in an amount equal to one and
one-quarter of one percent (1.25%) per annum of the face amount of the Letter of
Credit. The Letter of Credit Fees shall be paid upon the opening of each Letter
of Credit for the initial period of the Letter of Credit up to one (1) year and
subsequent to the first anniversary thereof, quarterly in arrears. In addition,
the Borrowers shall pay to the Administrative Agent, for its own account, any
and all additional issuance, negotiation, processing, transfer or other fees to
the extent and as and when required by the provisions of any Letter of Credit
Agreement. All such additional fees are included in and are a part of the "Fees"
payable by the Borrowers under the provisions of this Agreement and are for the
sole and exclusive benefit of the Administrative Agent and are a part of the
Administrative Agent's Obligations.
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2.2.3 Terms of Letters of Credit; Post-Termination Date Letters
of Credit.
Each Letter of Credit shall (a) be opened pursuant to a Letter of
Credit Agreement and (b) expire on a date not later than the Business Day
preceding the Revolving Credit Expiration Date; provided, however, if any Letter
of Credit does have an expiration date later than the Business Day preceding the
Revolving Credit Termination Date (each a "Post- Termination Date Letter of
Credit" and collectively, the "Post-Termination Date Letters of Credit"),
effective as of the Business Day preceding the Revolving Credit Termination Date
and without prior notice to or the consent of the Borrowers, the Lenders shall
make advances under the Revolving Loan for the account of the Borrowers in the
aggregate face amount of all such Letters of Credit. The amount of each Lender's
advance shall be equal to its Revolving Credit Pro Rata Share of the aggregate
face amount of all such Letters of Credit. The Administrative Agent shall
deposit the proceeds of such advances into one or more non-interest bearing
accounts with and in the name of the Administrative Agent and over which the
Administrative Agent alone shall have exclusive power of access and withdrawal
(collectively, the "Letter of Credit Cash Collateral Account"). The Letter of
Credit Cash Collateral Account is to be held by the Administrative Agent, for
the ratable benefit of the Lenders, as additional collateral and security for
any Letter of Credit Obligations relating to the Post-Termination Date Letters
of Credit. The Borrowers hereby assign, pledge, grant and set over to the
Administrative Agent, for the ratable benefit of the Lenders, a first priority
security interest in, and Lien on, all of the funds on deposit in the Letter of
Credit Cash Collateral Account, together with any and all proceeds (cash and
non-cash) and products thereof as additional collateral and security for the
Letter of Credit Obligations relating to the Post-Termination Date Letters of
Credit. The Borrowers acknowledge and agree that the Administrative Agent shall
be entitled to fund any draw or draft on any Post-Termination Date Letter of
Credit from the monies on deposit in the Letter of Credit Cash Collateral
Account without notice to or consent of the Borrowers or any of the Lenders. The
Borrowers further acknowledge and agree that the Administrative Agent's election
to fund any draw or draft on any Post-Termination Date Letter of Credit from the
Letter of Credit Cash Collateral shall in no way limit, impair, lessen, reduce,
release or otherwise adversely affect the Borrowers' obligation to pay any
Letter of Credit Obligations under or relating to the Post-Termination Date
Letters of Credit. At such time as all Post-Termination Date Letters of Credit
have expired and all Letter of Credit Obligations relating to the
Post-Termination Date Letters of Credit have been paid in full, the
Administrative Agent agrees to apply the amount of any remaining funds on
deposit in the Letter of Credit Cash Collateral Account to the then unpaid
balance of the Obligations under the Revolving Credit Facility in such order and
manner as the Administrative Agent shall determine in its sole and absolute
discretion in accordance with the provisions of this Agreement, and thereafter,
any remaining balance shall be paid to the Borrowers.
The aggregate face amount of all Letters of Credit at any one
time outstanding and issued by the Administrative Agent pursuant to the
provisions of this Agreement, including, without limitation, any and all
Post-Termination Date Letters of Credit, plus the amount of any unpaid Letter of
Credit Fees accrued or scheduled to accrue thereon, and less the aggregate
amount of all drafts issued under or purporting to have been issued under such
Letters of Credit that have been paid by the Administrative Agent and for which
the Administrative
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Agent has been reimbursed by the Borrowers in full in accordance with Section
2.2.5 (Payments of Letters of Credit) and the Letter of Credit Agreements, and
for which the Administrative Agent has no further obligation or commitment to
restore all or any portion of the amounts drawn and reimbursed, is herein called
the "Outstanding Letter of Credit Obligations".
2.2.4 Procedures for Letters of Credit.
The Borrowers shall give the Administrative Agent written notice
at least five (5) Business Days prior to the date on which the Borrower desires
the Administrative Agent to issue a Letter of Credit. Such notice shall be
accompanied by a duly executed Letter of Credit Agreement specifying, among
other things: (a) the name and address of the intended beneficiary of the Letter
of Credit, (b) the requested face amount of the Letter of Credit, (c) whether
the Letter of Credit is to be revocable or irrevocable, (d) the Business Day on
which the Letter of Credit is to be opened and the date on which the Letter of
Credit is to expire, (e) the terms of payment of any draft or drafts which may
be drawn under the Letter of Credit, and (f) any other terms or provisions the
Borrowers desire to be contained in the Letter of Credit. Such notice shall also
be accompanied by such other information, certificates, confirmations, and other
items as the Administrative Agent may require to assure that the Letter of
Credit is to be issued in accordance with the provisions of this Agreement and a
Letter of Credit Agreement. In the event of any conflict between the provisions
of this Agreement and the provisions of a Letter of Credit Agreement, the
provisions of this Agreement shall prevail and control unless otherwise
expressly provided in the Letter of Credit Agreement. Upon (x) receipt of such
notice, (y) payment of all Letter of Credit Fees and all other Fees payable in
connection with the issuance of such Letter of Credit, and (z) receipt of a duly
executed Letter of Credit Agreement, the Administrative Agent shall process such
notice and Letter of Credit Agreement in accordance with its customary
procedures and open such Letter of Credit on the Business Day specified in such
notice.
2.2.5 Payments of Letters of Credit.
The Borrowers hereby promise to pay to the Administrative Agent,
ON DEMAND and in United States Dollars, the following which are herein
collectively referred to as the "Current Letter of Credit Obligations":
(a) the amount which the Administrative Agent has paid or will be
required to pay under each draft or draw on a Letter of Credit, whether such
demand be in advance of the Administrative Agent's payment or for reimbursement
for such payment;
(b) any and all reasonable charges and expenses which the
Administrative Agent may pay or incur relative to the Letter of Credit and/or
such draws or drafts; and
(c) interest on the amounts described in (a) and (b) not paid by
the Borrowers as and when due and payable under the provisions of (a) and (b)
above from the day the same are due and payable until paid in full at a rate per
annum equal to the then current highest rate of interest on the Revolving Loan.
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In addition, the Borrowers hereby promise to pay any and all
other Letter of Credit Obligations as and when due and payable in accordance
with the provisions of this Agreement and the Letter of Credit Agreements. The
obligation of the Borrowers to pay Current Letter of Credit Obligations and all
other Letter of Credit Obligations shall be absolute and unconditional under any
and all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrowers or any other account party may have or have had
against the beneficiary of such Letter of Credit, the Administrative Agent, any
of the Lenders, or any other Person, including, without limitation, any defense
based on the failure of any draft or draw to conform to the terms of such Letter
of Credit, any draft or other document proving to be forged, fraudulent or
invalid, or the legality, validity, regularity or enforceability of such Letter
of Credit, any draft or other documents presented with any draft, any Letter of
Credit Agreement, this Agreement, or any of the other Financing Documents, all
whether or not the Administrative Agent or any of the Lenders had actual or
constructive knowledge of the same, and irrespective of any collateral, security
or guarantee therefor or right of offset with respect thereto and irrespective
of any other circumstances whatsoever which constitutes, or might be construed
to constitute, an equitable or legal discharge of the Borrowers for any Letter
of Credit Obligations, in bankruptcy or otherwise; provided, however, that the
Borrowers shall not be obligated to reimburse the Administrative Agent for any
wrongful payment under such Letter of Credit made as a result of the
Administrative Agent's willful misconduct or gross negligence. The obligation of
the Borrowers to pay the Letter of Credit Obligations shall not be conditioned
or contingent upon the pursuit by the Administrative Agent or any other Person
at any time of any right or remedy against any Person which may be or become
liable in respect of all or any part of such obligation or against any
collateral, security or guarantee therefor or right of offset with respect
thereto.
The Letter of Credit Obligations shall continue to be effective,
or be reinstated, as the case may be, if at any time payment of all or any
portion of the Letter of Credit Obligations is rescinded or must otherwise be
restored or returned by the Administrative Agent or any of the Lenders upon the
insolvency, bankruptcy, dissolution, liquidation or reorganization of any
Person, or upon or as a result of the appointment of a receiver, intervenor, or
conservator of, or trustee or similar officer for, any Person, or any
substantial part of such Person's property, all as though such payments had not
been made.
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2.2.6 Change in Law; Increased Cost.
If any change in any law or regulation or in the interpretation
thereof by any court or other Governmental Authority charged with the
administration thereof shall either (a) impose, modify or deem applicable any
reserve, special deposit or similar requirement against Letters of Credit issued
by the Administrative Agent, or (b) impose on the Administrative Agent or any of
the Lenders any other condition regarding this Agreement or any Letter of
Credit, and the result of any event referred to in clauses (a) or (b) above
shall be to increase the cost to the Administrative Agent of issuing,
maintaining or extending the Letter of Credit or the cost to any of the Lenders
of funding any obligation under or in connection with the Letter of Credit
(which increase in cost shall be the result of the Administrative Agent's
reasonable allocation of the aggregate of such cost increases resulting from
such events), then, upon demand by the Administrative Agent, the Borrowers shall
immediately pay to the Administrative Agent from time to time as specified by
the Administrative Agent, additional amounts which shall be sufficient to
compensate the Administrative Agent and the Lenders for such increased cost,
together with interest on each such amount from the date demanded until payment
in full thereof at a rate per annum equal to the then highest current rate of
interest on the Revolving Loan. A certificate as to such increased cost incurred
by the Administrative Agent and/or any of the Lenders, submitted by the
Administrative Agent to the Borrowers, shall be conclusive, absent manifest
error.
2.2.7 General Letter of Credit Provisions.
The Borrowers hereby instruct the Administrative Agent to pay any
draft complying with the terms of any Letter of Credit irrespective of any
instructions of the Borrowers to the contrary. The Borrowers assume all risks of
the acts and omissions of the beneficiary and other users of any Letter of
Credit. The Administrative Agent, the Lenders and their respective branches,
Affiliates and/or correspondents shall not be responsible for and the Borrowers
hereby indemnify and hold the Administrative Agent, the Lenders and their
respective branches, Affiliates and/or correspondents harmless from and against
all liability, loss and expense (including reasonable attorney's fees and costs)
incurred by the Administrative Agent, the Lenders and/or their respective
branches, Affiliates and/or correspondents relative to and/or as a consequence
of (a) any failure by the Borrowers to perform the agreements hereunder and
under any Letter of Credit Agreement, (b) any Letter of Credit Agreement, this
Agreement, any Letter of Credit and any draft, draw and/or acceptance under or
purported to be under any Letter of Credit, (c) any action taken or omitted by
the Administrative Agent, any of the Lenders and/or any of their respective
branches, Affiliates and/or correspondents at the request of the Borrowers, (d)
any failure or inability to perform in accordance with the terms of any Letter
of Credit by reason of any control or restriction rightfully or wrongfully
exercised by any de facto or de jure Governmental Authority, group or individual
asserting or exercising governmental or paramount powers, and/or (e) any
consequences arising from causes beyond the control of the Administrative Agent,
any of the Lenders and/or any of their respective branches, Affiliates and/or
correspondents.
Except for willful misconduct or gross negligence, the
Administrative
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Agent, the Lenders and their respective branches, Affiliates and/or
correspondents, shall not be liable or responsible in any respect for any (a)
error, omission, interruption or delay in transmission, dispatch or delivery of
any one or more messages or advices in connection with any Letter of Credit,
whether transmitted by cable, telegraph, mail or otherwise and despite any
cipher or code which may be employed, and/or (b) action, inaction or omission
which may be taken or suffered by it or them in good faith or through
inadvertence in identifying or failing to identify any beneficiary or otherwise
in connection with any Letter of Credit.
Any Letter of Credit may be amended, modified or revoked only
upon the receipt by the Administrative Agent from the Borrowers and the
beneficiary (including any transferee and/or assignee of the original
beneficiary), of a written consent and request therefor.
If any Laws, order of court and/or ruling or regulation of any
Governmental Authority of the United States (or any state thereof) and/or any
country other than the United States permits a beneficiary under a Letter of
Credit to require the Administrative Agent, the Lenders and/or any of their
respective branches, Affiliates and/or correspondents to pay drafts under or
purporting to be under a Letter of Credit after the expiration date of the
Letter of Credit, the Borrowers shall reimburse the Administrative Agent and the
Lenders, as appropriate, for any such payment pursuant to provisions of Section
2.2.6 (Change in Law; Increased Cost).
Except as may otherwise be specifically provided in a Letter of
Credit or Letter of Credit Agreement, the laws of the State of Maryland and the
Uniform Customs and Practice for Documentary Credits, 1993 Revision,
International Chamber of Commerce Publication No. 500 shall govern the Letters
of Credit. The Laws, rules, provisions and regulations of the Uniform Customs
and Practice for Documentary Credits are hereby incorporated by reference. In
the event of a conflict between the Uniform Customs and Practice for Documentary
Credits and the laws of the State of Maryland, the Uniform Customs and Practice
for Documentary Credits shall prevail.
2.2.8 Participations in the Letters of Credit.
Each Lender hereby irrevocably authorizes the Administrative
Agent to issue Letters of Credit in accordance with the provisions of this
Agreement. As of the date each Letter of Credit is opened or issued by the
Administrative Agent pursuant to the provisions of this Agreement, each Lender
shall have an undivided participating interest in (a) the rights and obligations
of the Administrative Agent under such Letter of Credit, and (b) the Outstanding
Letter of Credit Obligations of the Borrowers with respect to such Letter of
Credit, in an amount equal to each Lender's Revolving Credit Pro Rata Share of
such Outstanding Letter of Credit Obligations.
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2.2.9 Payments by the Lenders to the Administrative Agent.
If the Borrowers fail to pay to the Administrative Agent any
Current Letter of Credit Obligations as and when due and payable, the
Administrative Agent shall promptly notify each of the Lenders and shall demand
payment from each of the Lenders such Lender's Revolving Credit Pro Rata Share
of such unpaid Current Letter of Credit Obligations. In addition, if any amount
paid to the Administrative Agent on account of Current Letter of Credit
Obligations is rescinded or required to be restored or turned over by the
Administrative Agent upon the insolvency, bankruptcy, dissolution, liquidation
or reorganization of the Borrowers or upon or as a result of the appointment of
a receiver, intervenor, trustee, conservator or similar officer for the
Borrowers, or is otherwise not indefeasibly covered by an advance under the
Revolving Loan, the Administrative Agent shall promptly notify each of the
Lenders and shall demand payment from each of the Lenders of its Revolving
Credit Pro Rata Share of its portion of the Current Letter of Credit Obligations
to be remitted to the Borrowers.
Each of the Lenders irrevocably and unconditionally agrees to
honor any such demands for payment under this Section and promises to pay to the
Administrative Agent's account on the same Business Day as demanded the amount
of its Revolving Credit Pro Rata Share of the Current Letter of Credit
Obligations in immediately available funds, without any setoff, counterclaim or
deduction of any kind. Any payment by a Lender hereunder shall in no way
release, discharge or lessen the obligation of the Borrowers to pay Current
Letter of Credit Obligations to the Administrative Agent in accordance with the
provisions of this Agreement.
The obligation of each of the Lenders to remit the amounts of its
Revolving Credit Pro Rata Share of Current Letter of Credit Obligations for the
account of the Administrative Agent pursuant to this Section shall be
unconditional and irrevocable under any and all circumstances and may not be
terminated, suspended or delayed for any reason whatsoever, provided that all
payments of such amounts by each of the Lenders shall be without prejudice to
the rights of each of the Lenders with respect to the Administrative Agent's
alleged willful misconduct. Any claim any Lender may have against the
Administrative Agent as a result of the Administrative Agent's alleged willful
misconduct may be brought by such Lender in a separate action against the
Administrative Agent but may not be used as a defense to payment under the
provisions of this Section.
No failure of any Lender to remit the amount of its Revolving
Credit Pro Rata Share of Current Letter of Credit Obligations to the
Administrative Agent pursuant to this Section shall affect the obligations of
the Administrative Agent under any Letter of Credit, and if any Lender does not
remit to the Administrative Agent the amount of its Revolving Credit Pro Rata
Share of Current Letter of Credit Obligations on the same day as demanded, then
without limiting such Lender's obligation to transmit funds on the same Business
Day as demanded, such Lender shall be obligated to pay, on demand of the
Administrative Agent and without setoff, counterclaim or deduction of any kind
whatsoever interest on the unpaid amount at the Federal Funds Rate for each day
from the date such amount shall be due and payable to the Administrative Agent
until the date such amount shall have been paid in full to the Administrative
Agent by such Lender.
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Section 2.3 General Financing Provisions.
2.3.1 Borrowers' Representatives.
The Borrowers hereby represent and warrant to the Administrative
Agent and the Lenders that each of them will derive benefits, directly and
indirectly, from each Letter of Credit and from each advance of the Revolving
Loan, both in their separate capacity and as a member of the integrated group to
which each of the Borrowers belong and because the successful operation of the
integrated group is dependent upon the continued successful performance of the
functions of the integrated group as a whole, because (a) the terms of the
consolidated financing provided under this Agreement are more favorable than
would otherwise be obtainable by the Borrowers individually, and (b) the
Borrowers' additional administrative and other costs and reduced flexibility
associated with individual financing arrangements which would otherwise be
required if obtainable would substantially reduce the value to the Borrowers of
the financing. The Borrowers in the discretion of their respective managements
are to agree among themselves as to the allocation of the benefits of Letters of
Credit and the proceeds of the Revolving Loan; provided, however, that the
Borrowers shall be deemed to have represented and warranted to the
Administrative Agent and the Lenders at the time of allocation that each benefit
and use of proceeds is a Permitted Use.
For administrative convenience, each Borrower hereby irrevocably
appoints Mid-Atlantic as the Borrower's attorney-in-fact, with power of
substitution (with the prior written consent of the Administrative Agent in the
exercise of its sole and absolute discretion), in the name of Mid-Atlantic or in
the name of the Borrower or otherwise to take any and all actions with respect
to this Agreement, the other Financing Documents and/or the Obligations as Mid-
Atlantic may so elect from time to time, including, without limitation, actions
to (a) request advances under the Revolving Loan, apply for and direct the
benefits of Letters of Credits, and direct the Administrative Agent to disburse
or credit the proceeds of any advance of the Revolving Loan directly to an
account of Mid-Atlantic, either of the Borrowers or otherwise, which direction
shall evidence the making of such advance of the Revolving Loan and shall
constitute the acknowledgment by each of the Borrowers of the receipt of the
proceeds of such advance of the Revolving Loan or the benefit of such Letter of
Credit, (b) enter into, execute, deliver, amend, modify, restate, substitute,
extend and/or renew this Agreement, any other Financing Documents, security
agreements, mortgages, deposit account agreements, instruments, certificates,
waivers, letter of credit applications, releases, documents and agreements from
time to time, and (c) endorse any check or other item of payment in the name of
the Borrower or in the name of Mid-Atlantic. The foregoing appointment is
coupled with an interest, cannot be revoked without the prior written consent of
the Administrative Agent, and may be exercised from time to time through
Mid-Atlantic duly authorized officer, officers or other Person or Persons
designated by Mid-Atlantic to act from time to time on behalf of Mid-Atlantic.
Each of the Borrowers hereby irrevocably authorizes each of the
Lenders to make advances of the Revolving Loan to either of the Borrowers, and
hereby irrevocably authorizes the Administrative Agent to issue or cause to be
issued Letters of Credit for the account of either of the Borrowers, pursuant to
the provisions of this Agreement upon the written,
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oral or telephone request any one or more of the Persons who is from time to
time a Responsible Officer of a Borrower under the provisions of the most recent
certificate of corporate resolutions and/or incumbency of the Borrowers on file
with the Administrative Agent and also upon the written, oral or telephone
request of any one of the Persons who is from time to time a Responsible Officer
of Mid-Atlantic under the provisions of the most recent certificate of corporate
resolutions and/or incumbency for Mid-Atlantic on file with the Administrative
Agent.
Neither the Administrative Agent nor any of the Lenders assumes
any responsibility or liability for any errors, mistakes, and/or discrepancies
in the oral, telephonic, written or other transmissions of any instructions,
orders, requests and confirmations between the Administrative Agent and the
Borrowers, or either of them, or the Administrative Agent and any of the Lenders
in connection with the Credit Facilities, any advance of the Revolving Loan, any
Letter of Credit or any other transaction in connection with the provisions of
this Agreement. Without implying any limitation on the joint and several nature
of the Obligations, the Lenders agree that, notwithstanding any other provision
of this Agreement, the Borrowers may create reasonable inter-company
indebtedness between or among the Borrowers with respect to the allocation of
the benefits and proceeds of the advances and Credit Facilities under this
Agreement. The Borrowers agree among themselves, and the Administrative Agent
and the Lenders consent to that agreement, that each Borrower shall have rights
of contribution from the other Borrower to the extent such Borrower incurs
Obligations in excess of the proceeds of the Revolving Loan received by, or
allocated to purposes for the direct benefit of, such Borrower. All such
indebtedness and rights shall be, and are hereby agreed by the Borrowers to be,
subordinate in priority and payment to the indefeasible repayment in full in
cash of the Obligations, and, unless the Administrative Agent agrees in writing
otherwise, shall not be exercised or repaid in whole or in part until all of the
Obligations have been indefeasibly paid in full in cash. Each Borrower hereby
waives all rights of counterclaim, recoupment and offset between or among
themselves arising on account of that indebtedness and otherwise. Each Borrower
shall not evidence the inter-company indebtedness or rights of contribution by
note or other instrument, and shall not secure such indebtedness or rights of
contribution with any Lien or security.
2.3.2 Computation of Interest and Fees.
All applicable Fees and interest shall be calculated on the basis
of a year of 360 days for the actual number of days elapsed. Any change in the
interest rate on any of the Obligations resulting from a change in the Prime
Rate shall become effective as of the opening of business on the day on which
such change in the Prime Rate is announced.
2.3.3 Commitment Fee.
On or before the Closing Date the Borrowers shall pay to the
Administrative Agent for the ratable benefit of the Lenders a commitment fee
(the "Commitment Fee") equal to one quarter of one percent (.25%) of the
Revolving Credit Facility ($187,500), which fee has been fully earned and is
non-refundable.
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2.3.4 Extension Fee.
In consideration of any agreement by the Administrative Agent and
the Lenders to extend the Revolving Credit Expiration Date for an additional one
(1) year period to April 22, 2003, the Borrowers shall pay to the Administrative
Agent for the ratable benefit of the Lenders, an extension fee equal to
one-eighth of one percent (.125%) of the Revolving Credit Facility ($93,750)
(the "Extension Fee"). Any extension fee shall be due and payable on the date
the extension is granted and shall be fully earned when due and non-refundable
upon payment.
2.3.5 Payments.
All payments of the Obligations and the Agents' Obligations,
including, without limitation, principal, interest, Prepayments, and Fees, shall
be paid by the Borrowers without setoff or counterclaim to the Administrative
Agent (except as otherwise provided herein) at the Administrative Agent's office
specified in Section 9.1 (Notices) in immediately available funds not later than
noon (Baltimore City Time) on the due date of such payment. All payments
received by the Administrative Agent after such time shall be deemed to have
been received by the Administrative Agent for purposes of computing interest and
Fees and otherwise as of the next Business Day. Payments shall not be considered
received by the Administrative Agent until such payments are paid to the
Administrative Agent in immediately available funds.
2.3.6 Liens; Setoff.
The Borrowers hereby grant to the Administrative Agent and to the
Lenders a continuing Lien for all of the Obligations and the Agents' Obligations
upon any and all monies, securities, and other property of the Borrowers and the
proceeds thereof, now or hereafter held or received by or in transit to, the
Administrative Agent, any of the Lenders, and/or any Affiliate of the
Administrative Agent and/or any of the Lenders, from or for the Borrowers, and
also upon any and all deposit accounts (general or special) and credits of the
Borrowers, if any, with the Administrative Agent, any of the Lenders or any
Affiliate of the Administrative Agent or any of the Lenders, at any time
existing, excluding any deposit accounts held by the Borrowers in their capacity
as trustee for Persons who are not Borrowers or Affiliates of the Borrowers.
Without implying any limitation on any other rights the Administrative Agent
and/or the Lenders may have under the Financing Documents or applicable Laws,
during the continuance of an Event of Default, the Administrative Agent is
hereby authorized by the Borrowers at any time and from time to time, without
notice to the Borrowers, to set off, appropriate and apply any or all items
hereinabove referred to against all Obligations and the Agents' Obligations then
outstanding (whether or not then due), all in such order and manner as shall be
determined by the Administrative Agent in its sole and absolute discretion.
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2.3.7 Requirements of Law.
In the event that any Lender shall have determined in good faith
that (a) the adoption of any Laws regarding capital adequacy, or (b) any change
therein or in the interpretation or application thereof or (c) compliance by
such Lender or any corporation controlling such Lender with any request or
directive regarding capital adequacy (whether or not having the force of law)
from any central bank or Governmental Authority, does or shall have the effect
of reducing the rate of return on the capital of such Lender or any corporation
controlling such Lender, as a consequence of the obligations of such Lender
hereunder to a level below that which such Lender or any corporation controlling
such Lender would have achieved but for such adoption, change or compliance
(taking into consideration the policies of such Lender and the corporation
controlling such Lender, with respect to capital adequacy) by an amount deemed
by such Lender to be material, then from time to time, after submission by such
Lender to the Borrowers of a written request therefor and a statement of the
basis for such determination, the Borrowers shall pay to such Lender such
additional amount or amounts in order to compensate for such reduction.
2.3.8 Guaranty.
(a) Each Borrower hereby unconditionally and irrevocably,
guarantees to the Administrative Agent and the Lenders:
(i) the due and punctual payment in full (and not merely the
collectibility) by the other Borrower of the Obligations and the Agents'
Obligations, including unpaid and accrued interest thereon, in each case when
due and payable, all according to the terms of this Agreement, the Notes and the
other Financing Documents;
(ii) the due and punctual payment in full (and not merely
the collectibility) by the other Borrower of all other sums and charges which
may at any time be due and payable in accordance with this Agreement, the Notes
or any of the other Financing Documents;
(iii) the due and punctual performance by the other Borrower
of all of the other terms, covenants and conditions contained in the Financing
Documents; and
(iv) all the other Obligations of the other Borrower.
(b) The obligations and liabilities of each Borrower as a
guarantor under this Section 2.3.8 shall be absolute and unconditional and joint
and several, irrespective of the genuineness, validity, priority, regularity or
enforceability of this Agreement, any of the Notes or any of the Financing
Documents or any other circumstance which might otherwise constitute a legal or
equitable discharge of a surety or guarantor. Each Borrower in its capacity as a
guarantor expressly agrees that the Administrative Agent and the Lenders may,
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in their sole and absolute discretion, without notice to or further assent of
such Borrower and without in any way releasing, affecting or in any way
impairing the joint and several obligations and liabilities of such Borrower as
a guarantor hereunder:
(i) waive compliance with, or any defaults under, or grant
any other indulgences under or with respect to any of the Financing Documents;
(ii) modify, amend, change or terminate any provisions of
any of the Financing Documents;
(iii) grant extensions or renewals of or with respect to the
Credit Facilities, the Notes or any of the other Financing Documents;
(iv) effect any release, subordination, compromise or
settlement in connection with this Agreement, any of the Notes or any of the
other Financing Documents;
(v) agree to the substitution, exchange, release or other
disposition of any collateral for the Obligations and the Agents' Obligations or
to the subordination of any lien or security interest therein;
(vi) make advances for the purpose of performing any term,
provision or covenant contained in this Agreement, any of the Notes or any of
the other Financing Documents with respect to which the Borrowers shall then be
in default;
(vii) make future advances pursuant to the Financing
Agreement or any of the other Financing Documents;
(viii) assign, pledge, hypothecate or otherwise transfer the
Commitments, the Obligations, the Notes, any of the other Financing Documents or
any interest therein, all as and to the extent permitted by the provisions of
this Agreement;
(ix) deal in all respects with the other Borrower as if this
Section 2.3.8 were not in effect;
(x) effect any release, compromise or settlement with the
other Borrower, whether in its capacity as a Borrower or as a guarantor under
this Section 2.3.8, or any other guarantor; and
(xi) provide debtor-in-possession financing or allow use of
cash collateral in proceedings under the Bankruptcy Code, it being expressly
agreed by all Borrowers that any such financing and/or use
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would be part of the Obligations.
(c) The obligations and liabilities of each Borrower, as guarantor
under this Section 2.3.8, shall be primary, direct and immediate, shall not be
subject to any counterclaim, recoupment, set off, reduction or defense based
upon any claim that a Borrower may have against the other Borrower, the
Administrative Agent, any one or more of the Lenders and/or any other guarantor
and shall not be conditional or contingent upon pursuit or enforcement by the
Administrative Agent or other Lenders of any remedies it may have against the
Borrowers with respect to this Agreement, the Notes or any of the other
Financing Documents, whether pursuant to the terms thereof or by operation of
law. Without limiting the generality of the foregoing, the Administrative Agent
and the Lenders shall not be required to make any demand upon either of the
Borrowers, or to sell any collateral or otherwise pursue, enforce or exhaust its
or their remedies against the Borrowers or any collateral either before,
concurrently with or after pursuing or enforcing its rights and remedies
hereunder. Any one or more successive or concurrent actions or proceedings may
be brought against each Borrower under this Section 2.3.8, either in the same
action, if any, brought against one of the Borrowers or in separate actions or
proceedings, as often as the Administrative Agent may deem expedient or
advisable. Without limiting the foregoing, it is specifically understood that
any modification, limitation or discharge of any of the liabilities or
obligations of either of the Borrowers, any other guarantor or any obligor under
any of the Financing Documents, arising out of, or by virtue of, any bankruptcy,
arrangement, reorganization or similar proceeding for relief of debtors under
federal or state law initiated by or against one of the Borrowers, in their
respective capacities as borrowers and guarantors under this Section 2.3.8, or
under any of the Financing Documents shall not modify, limit, lessen, reduce,
impair, discharge, or otherwise affect the liability of each Borrower under this
Section 2.3.8 in any manner whatsoever, and this Section 2.3.8 shall remain and
continue in full force and effect. It is the intent and purpose of this Section
2.3.8 that each Borrower shall and does hereby waive all rights and benefits
which might accrue to any other guarantor by reason of any such proceeding, and
the Borrowers agree that they shall be liable for the full amount of the
obligations and liabilities under this Section 2.3.8, regardless of, and
irrespective to, any modification, limitation or discharge of the liability of
one of the Borrowers, any other guarantor or any obligor under any of the
Financing Documents, that may result from any such proceedings.
(d) Each Borrower, as guarantor under this Section 2.3.8, hereby
unconditionally, jointly and severally, irrevocably and expressly waives:
(i) presentment and demand for payment of the Obligations
and protest of non-payment;
(ii) notice of acceptance of this Section 2.3.8 and of
presentment, demand and protest thereof;
(iii) notice of any default hereunder or under the Notes or
any of the other Financing Documents and notice of all indulgences;
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(iv) notice of any increase in the amount of any portion of
or all of the indebtedness guaranteed by this Section 2.3.8;
(v) demand for observance, performance or enforcement of any
of the terms or provisions of this Section 2.3.8, the Notes or any of the other
Financing Documents;
(vi) all errors and omissions in connection with the
Lender's administration of all indebtedness guaranteed by this Section 2.3.8;
(vii) any right or claim of right to cause a marshalling of
the assets of one or both of the Borrowers;
(viii) any act or omission of the Administrative Agent or
the Lenders which changes the scope of the risk as guarantor hereunder; and all
other notices and demands otherwise required by law which the Borrower may
lawfully waive.
Within ten (10) days following any request of the
Administrative Agent so to do, each Borrower will furnish the Administrative
Agent and the Lenders and such other persons as the Administrative Agent may
direct with a written certificate, duly acknowledged stating in detail whether
or not any credits, offsets or defenses exist with respect to this Section
2.3.8.
Section 2.4 Interest.
2.4.1 Applicable Interest Rates.
(a) Each advance of the Revolving Loan shall bear interest until
maturity (whether by acceleration, declaration, extension or otherwise) at
either the Base Rate or the Eurodollar Rate, as selected and specified by the
Borrowers in an Interest Rate Election Notice furnished to the Administrative
Agent in accordance with the provisions of Section 2.4.2(e) (Selection of
Interest Rates), or as otherwise determined in accordance with the provisions of
this Section.
(b) Notwithstanding the foregoing, following the occurrence and
during the continuance of an Event of Default, at the option of the
Administrative Agent, all Loans and all other Obligations and the Agents'
Obligations shall bear interest at the Post-Default Rate.
(c) The Applicable Margin for (i) Eurodollar Loans shall be one
and one quarter of one percent (1.25%) per annum, and (ii) Base Rate Loans shall
be zero percent (0%) per annum unless and until a change is required by the
operation of Section 2.4.1(d).
(d) Changes in the Applicable Margin shall be made not more
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frequently than quarterly based on the Pricing Ratio, determined by the
Administrative Agent in the exercise of its sole and absolute discretion from
the quarterly reports required by Section 6.1.1(b) (Quarterly Statements and
Certificates), except that the first such determination shall be made based on
the Borrowers' annual financial statements required by Section 6.1.1(a) (Annual
Statements and Certificates) for the Borrowers' fiscal year ended December 31,
1998 and shall be effective as of the first day of the first month after the
Administrative Agent receives such statements. The Applicable Margin (expressed
as percentages) shall vary depending upon the Borrowers' Pricing Ratio, as
follows:
- - --------------------------------------------------------------------------------
Pricing Ratio Applicable Margin Applicable Margin
for Eurodollar Loans for Base Rate Loans
- - --------------------------------------------------------------------------------
less than or equal to 45% 1.25% 0%
- - --------------------------------------------------------------------------------
Greater than 45% 1.50% 0%
2.4.2 Selection of Interest Rates.
(a) The Borrowers may select the initial Applicable Interest Rate
or Applicable Interest Rates to be charged on the Revolving Loan.
(b) From time to time after the date of this Agreement as provided
in this Section, by a proper and timely Interest Rate Election Notice furnished
to the Administrative Agent in accordance with the provisions of Section
2.4.2(e), the Borrowers may select an initial Applicable Interest Rate or
Applicable Interest Rates for any advances of the Revolving Loan or may convert
the Applicable Interest Rate and, when applicable, the Interest Period, for any
existing advance of the Revolving Loan to any other Applicable Interest Rate or,
when applicable, any other Interest Period.
(c) The Borrowers' selection of an Applicable Interest Rate and/or
an Interest Period, the Borrowers' election to convert an Applicable Interest
Rate and/or an Interest Period to another Applicable Interest Rate or Interest
Period, and any other adjustments in an interest rate are subject to the
following limitations:
(i) the Borrowers shall not at any time select or change to
an Interest Period that extends beyond the Revolving Credit
Expiration Date;
(ii) no change from the Eurodollar Rate to the Base Rate
shall become effective on a day other than a Business Day and on
a day which is the last day of the then current Interest Period,
no change of an Interest Period shall become effective on a day
other than the last day of the then current Interest Period, and
no change from the Base Rate to the Eurodollar Rate shall become
effective on a day other than a day which is a Eurodollar
Business Day;
(iii) any Applicable Interest Rate change for any portion of
the Revolving Loan to be effective on a date on which any
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principal payment on account of the Revolving Loan is
scheduled to be paid shall be made only after such payment
shall have been made;
(iv) the first day of each Interest Period shall be a
Eurodollar Business Day;
(v) as of the effective date of a selection, there shall not
exist a Default or an Event of Default; and
(vi) the minimum principal amount of a Eurodollar Loan shall
be One Million Dollars ($1,000,000).
(d) If a request for an advance under the Revolving Loan is
not accompanied by an Interest Rate Election Notice or does not otherwise
include a selection of an Applicable Interest Rate and, if applicable, an
Interest Period, or if, after having made a selection of an Applicable Interest
Rate and, if applicable, an Interest Period, the Borrowers fail or are not
otherwise entitled under the provisions of this Agreement to continue such
Applicable Interest Rate or Interest Period, the Borrowers shall be deemed to
have selected the Base Rate as the Applicable Interest Rate until such time as
the Borrowers have selected a different Applicable Interest Rate and specified
an Interest Period in accordance with, and subject to, the provisions of this
Section.
(e) The Lenders will not be obligated to make advances of the
Revolving Loan, to convert the Applicable Interest Rate on the Revolving Loan to
another Interest Rate, or to change Interest Periods, unless the Administrative
Agent shall have received an irrevocable written or telephonic notice (an
"Interest Rate Election Notice") from the Borrowers specifying the following
information:
(i) the amount to be borrowed or converted,
(ii) a selection of the Base Rate or the Eurodollar Rate,
(iii) the length of the Interest Period if the Applicable
Interest Rate selected is the Eurodollar Rate, and
(iv) the requested date on which such election is to be
effective.
Any telephonic notice must be confirmed in writing within
three (3) Business Days. Each Interest Rate Election Notice must be received by
the Administrative Agent not later than 10:00 a.m. (Baltimore City Time) on the
Business Day of any requested borrowing or conversion in the case of a selection
of the Base Rate and not later than 10:00 a.m. (Baltimore City Time) on the
third Business Day before the effective date of any requested borrowing or
conversion in the case of a selection of the Eurodollar Rate.
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2.4.3 Inability to Determine Eurodollar Base Rate.
In the event that (a) the Administrative Agent shall have
determined that, by reason of circumstances affecting the London interbank
eurodollar market, adequate and reasonable means do not exist for ascertaining
the Eurodollar Base Rate for any requested Interest Period with respect to an
advance of the Revolving Loan the Borrowers have requested to be made or to be
converted to a Eurodollar Loan or (b) the Administrative Agent shall determine
that the Eurodollar Base Rate for any requested Interest Period with respect to
an advance of the Revolving Loan the Borrowers have requested to be made or to
be converted to a Eurodollar Loan does not adequately and fairly reflect the
cost to the Lenders of funding or converting such advance of the Revolving Loan,
the Administrative Agent shall give telephonic or written notice of such
determination to the Borrowers at least one (1) day prior to the proposed date
for funding or converting such advance of the Revolving Loan. If such notice is
given, any request for a Eurodollar Loan shall be made or converted to a Base
Rate Loan. Until such notice has been withdrawn by the Administrative Agent, the
Borrowers will not request that any advance of the Revolving Loan be made or
converted to a Eurodollar Loan.
2.4.4 Indemnity.
The Borrowers agree to indemnify and reimburse the
Administrative Agent and the Lenders and to hold the Administrative Agent and
the Lenders harmless from any loss, cost (including administrative costs) or
expense which any one or more of the Administrative Agent or the Lenders may
sustain or incur as a consequence of (a) a default by the Borrowers in payment
when due of the principal amount of or interest on any Eurodollar Loan, (b) the
failure of the Borrowers to make, or convert the Applicable Interest Rate of, an
advance of the Revolving Loan after the Borrowers have given a Loan Notice or an
Interest Rate Election Notice, (c) the failure of the Borrowers to make any
prepayment of a Eurodollar Loan after the Borrowers have given notice of such
intention to make such a prepayment, and/or (d) the making by the Borrowers of a
prepayment of a Eurodollar Loan on a day which is not the last day of the
Interest Period for such Eurodollar Loan, calculated as provided in the
following paragraph. This agreement and covenant of the Borrowers shall survive
termination or expiration of this Agreement and payment of the other
Obligations.
Contemporaneously with any prepayment of principal of a
Eurodollar Loan, a prepayment premium shall be due and payable to the Lenders
calculated by discounting to present value, as of the date of the prepayment,
the remaining payments of principal and interest on the Eurodollar Loan, using a
discount rate equal to two and one-half of one percent (2.5%) above the yield to
maturity of that non-callable debt obligation of the United States Treasury
having a maturity date nearest in time to the maturity date of the Eurodollar
Loan. If such discounted value exceeds the unpaid principal amount of the
Eurodollar Loan, then the prepayment premium shall be an amount equal to such
excess, but in no event less than one-half of one percent (0.5 of 1%) of the
amount being prepaid. If the discounted value does not exceed the unpaid
principal amount of the Eurodollar Loan, the prepayment premium shall be equal
to one-half of one percent (0.5 of 1%) of the amount being prepaid. The maturity
date and yields to maturity of the applicable United States Treasury obligation
shall be determined on the basis
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of quotations published in The Wall Street Journal on the date of prepayment or
from such other source as the Administrative Agent, in its sole discretion,
shall deem appropriate.
The Administrative Agent and the Lenders shall not be
obligated or required to have actually reinvested the prepaid amount of the
Eurodollar Loan in any Treasury obligation as a condition precedent to the
Borrowers being obligated to pay a prepayment premium as outlined above. The
Administrative Agent and the Lenders shall not be obligated to accept any
prepayment of principal unless it is accompanied by the prepayment premium, if
any, due in connection therewith as calculated pursuant to the provisions of
this paragraph. No prepayment premium payable in connection herewith shall in
any event or under any circumstances be deemed or construed as a penalty.
2.4.5 Payment of Interest.
(a) Unpaid and accrued interest on any advance of the
Revolving Loan shall be paid monthly, in arrears, on the first day of each
calendar month, commencing on the first such date after the date of this
Agreement, and on the first day of each calendar month thereafter, and at
maturity (whether by acceleration, declaration, extension or otherwise).
(b) Notwithstanding the foregoing, any and all unpaid and
accrued interest on any Base Rate Loan converted to a Eurodollar Loan or prepaid
shall be paid immediately upon such conversion and/or prepayment, as
appropriate.
(c) Unpaid and accrued interest on any Eurodollar Loan shall
be paid on the last Business Day of each Interest Period for such Eurodollar
Loan and at maturity (whether by acceleration, declaration, extension or
otherwise); provided, however that any and all unpaid and accrued interest on
any Eurodollar Loan prepaid prior to expiration of the then current Interest
Period for such Eurodollar Loan shall be paid immediately upon prepayment.
Section 2.5 Settlement Among Lenders.
2.5.1 Revolving Loan.
It is agreed that each Lender's Net Outstandings are intended
by the Lenders to be equal at all times to such Lender's Revolving Credit Pro
Rata Share of the aggregate outstanding principal amount of the Revolving Loan
outstanding. Notwithstanding such agreement, the several and not joint
obligation of each Lender to fund the Revolving Loan made in accordance with the
terms of this Agreement ratably in accordance with such Lender's Revolving
Credit Pro Rata Share and each Lender's right to receive its ratable share of
principal payments on the Revolving Loan in accordance with its Revolving Credit
Pro Rata Share, the Lenders agree that in order to facilitate the administration
of this Agreement and the Financing Documents that settlement among them may
take place on a periodic basis in accordance with the provisions of this Section
2.5 (Settlement Among Lenders).
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2.5.2 Settlement Procedures as to Revolving Loan.
(a) In General. To the extent and in the manner hereinafter
provided in this Section 2.5.2, settlement among the Lenders as to the Revolving
Loan may occur periodically on Settlement Dates determined from time to time by
the Administrative Agent not less frequently than weekly, which may occur before
or after the occurrence or during the continuance of a Default or Event of
Default and whether or not all of the conditions set forth in Section 4.2
(Conditions to All Extensions of Credit) have been met. On each Settlement Date
payments shall be made by or to FMB and the other Lenders in the manner provided
in this Section 2.5.2 in accordance with the Settlement Report delivered by the
Administrative Agent pursuant to the provisions of this Section 2.5.2 in respect
of such Settlement Date so that as of each Settlement Date, and after giving
effect to the transactions to take place on such Settlement Date, each Lender's
Net Outstandings shall equal such Lender's Revolving Credit Pro Rata Share of
the Revolving Loan outstanding.
(b) Selection of Settlement Dates. If the Administrative
Agent elects, in its discretion, but subject to the consent of FMB, to settle
accounts among the Lenders with respect to principal amounts of the Revolving
Loan less frequently than each Business Day, then the Administrative Agent shall
designate periodic Settlement Dates which may occur on any Business Day after
the Closing Date; provided, however, that the Administrative Agent shall
designate as a Settlement Date any Business Day which is an Interest Payment
Date; and provided further, that a Settlement Date shall occur at least once
during each seven-day period. The Administrative Agent shall designate a
Settlement Date by delivering to each Lender a Settlement Report not later than
12:00 noon (Baltimore City Time) on the proposed Settlement Date, which
Settlement Report shall be with respect to the period beginning on the next
preceding Settlement Date and ending on such designated Settlement Date.
(c) Non-Ratable Loans and Payments. Between Settlement Dates,
the Administrative Agent shall request and FMB may (but shall not be obligated
to) advance to the Borrowers out of FMB's own funds, the entire principal amount
of any advance under the Revolving Loan requested or deemed requested pursuant
to Section 2.1.2 (Procedure for Making Advances Under the Revolving Loan) (any
such advance under the Revolving Loan being referred to as a "Non-Ratable
Loan"). The making of each Non-Ratable Loan by FMB shall be deemed to be a
purchase by FMB of a 100% participation in each other Lender's Revolving Credit
Pro Rata Share of the amount of such Non-Ratable Loan. All payments of
principal, interest and any other amount with respect to such Non-Ratable Loan
shall be payable to and received by the Administrative Agent for the account of
FMB. Upon demand by FMB, with notice to the Administrative Agent, each other
Lender shall pay to FMB, as the repurchase of such participation, an amount
equal to 100% of such Lender's Revolving Credit Pro Rata Share of the principal
amount of such Non-Ratable Loan. Any payments received by the Administrative
Agent between Settlement Dates which in accordance with the terms of this
Agreement are to be applied to the reduction of the outstanding principal
balance of Revolving Loan, shall be paid over to and retained by FMB for such
application, and such payment to and retention by FMB shall be deemed, to the
extent of each other Lender's Revolving Credit Pro Rata Share of such payment,
to be a purchase by each such other Lender of a participation in the
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advance under the Revolving Loan (including the repurchase of participations in
Non-Ratable Loans) made by FMB. Upon demand by another Lender, with notice
thereof to the Administrative Agent, FMB shall pay to the Administrative Agent,
for the account of such other Lender, as a repurchase of such participation, an
amount equal to such other Lender's Revolving Credit Pro Rata Share of any such
amounts (after application thereof to the repurchase of any participations of
FMB in such other Lender's Revolving Credit Pro Rata Share of any Non- Ratable
Loans) paid only to FMB by the Administrative Agent.
(d) Net Decrease in Outstandings. If on any Settlement Date
the increase, if any, in the dollar amount of any Lender's Net Outstandings
which is required to comply with the first sentence of Section 2.5.1 (Revolving
Loan) is less than such Lender's Revolving Credit Pro Rata Share of amounts
received by the Administrative Agent but paid only to FMB since the next
preceding Settlement Date, such Lender and the Administrative Agent, in their
respective records, shall apply such Lender's Revolving Credit Pro Rata Share of
such amounts to the increase in such Lender's Net Outstandings, and FMB shall
pay to the Administrative Agent, for the account of such Lender, the excess
allocable to such Lender.
(e) Net Increase in Outstandings. If on any Settlement Date
the increase, if any, in the dollar amount of any Lender's Net Outstandings
which is required to comply with the first sentence of Section 2.5.1 (Revolving
Loan) exceeds such Lender's Revolving Credit Pro Rata Share of amounts received
by the Administrative Agent but paid only to FMB since the next preceding
Settlement Date, such Lender and the Administrative Agent, in their respective
records, shall apply such Lender's Revolving Credit Pro Rata Share of such
amounts to the increase in such Lender's Net Outstandings, and such Lender shall
pay to the Administrative Agent, for the account of FMB, any excess.
(f) No Change in Outstandings. If a Settlement Report
indicates that no advance under the Revolving Loan has been made during the
period since the next preceding Settlement Date, then such Lender's Revolving
Credit Pro Rata Share of any amounts received by the Administrative Agent but
paid only to FMB shall be paid by FMB to the Administrative Agent, for the
account of such Lender. If a Settlement Report indicates that the increase in
the dollar amount of a Lender's Net Outstandings which is required to comply
with the first sentence of Section 2.5.1 (Revolving Loan) is exactly equal to
such Lender's Revolving Credit Pro Rata Share of amounts received by the
Administrative Agent but paid only to FMB since the next preceding Settlement
Date, such Lender and the Administrative Agent, in their respective records,
shall apply such Lender's Revolving Credit Pro Rata Share of such amounts to the
increase in such Lender's Net Outstandings.
(g) Return of Payments. If any amounts received by FMB in
respect of the Obligations or the Agents' Obligations are later required to be
returned or repaid by FMB to the Borrowers or any other obligor or their
respective representatives or successors in interest, whether by court order,
settlement or otherwise, in excess of the FMB's Revolving Credit Pro Rata Share
of all such amounts required to be returned by all Lenders, each other Lender
shall, upon demand by FMB with notice to the Administrative Agent, pay to the
Administrative Agent for the account of FMB, an amount equal to the excess of
such Lender's
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Revolving Credit Pro Rata Share of all such amounts required to be returned by
all Lenders over the amount, if any, returned directly by such Lender.
(h) Payments to Administrative Agent; Lenders.
(i) Payment by any Lender to the Administrative Agent
shall be made not later than 2:00 p.m. (Baltimore City Time)
on the Business Day such payment is due, provided that if
such payment is due on demand by another Lender, such demand
is made on the paying Lender not later than 10:00 a.m.
(Baltimore City Time) on such Business Day. Payment by the
Administrative Agent to any Lender shall be made by wire
transfer, promptly following the Administrative Agent's
receipt of funds for the account of such Lender and in the
type of funds received by the Administrative Agent, provided
that if the Administrative Agent receives such funds at or
prior to 12:00 p.m. noon (Baltimore City Time), the
Administrative Agent shall pay such funds to such Lender by
2:00 p.m. (Baltimore City Time) on such Business Day. If a
demand for payment is made after the applicable time set
forth above, the payment due shall be made by 2:00 p.m.
(Baltimore City Time) on the first Business Day following
the date of such demand.
(ii) If a Lender shall, at any time, fail to make any
payment to the Administrative Agent required hereunder, the
Administrative Agent may, but shall not be required to,
retain payments that would otherwise be made to such Lender
hereunder and apply such payments to such Lender's defaulted
obligations hereunder, at such time, and in such order, as
the Administrative Agent may elect in its sole discretion.
(iii) With respect to the payment of any funds under
this Section 2.5.2, whether from the Administrative Agent to
a Lender or from a Lender to the Administrative Agent, the
party failing to make full payment when due pursuant to the
terms hereof shall, upon demand by the other party, pay such
amount together with interest on such amount at the Federal
Funds Rate.
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2.5.3 Settlement of Other Obligations.
All other amounts received by the Administrative Agent on
account of, or applied by the Administrative Agent to the payment of, any
Obligation owed to the Lenders (including, without limitation, Fees payable to
the Lenders and proceeds from the sale of, or other realization upon, all or any
part of any collateral following an Event of Default) that are received by the
Administrative Agent not later than 11:00 a.m. (Baltimore City Time) on a
Business Day will be paid by the Administrative Agent to each Lender on the same
Business Day, and any such amounts that are received by the Administrative Agent
after 11:00 a.m. (Baltimore City Time) will be paid by the Administrative Agent
to each Lender on the following Business Day. Unless otherwise stated herein,
the Administrative Agent shall distribute Fees payable to the Lenders ratably to
the Lenders based on each Lender's Revolving Credit Pro Rata Share and shall
distribute proceeds from the sale of, or other realization upon, all or any part
of any collateral following an Event of Default ratably to the Lenders based on
the amount of the Obligations then owing to each Lender.
2.5.4 Presumption of Payment.
Unless the Administrative Agent shall have received notice
from a Lender prior to 12:00 p.m. noon (Baltimore City Time) on the date of the
requested date for the making of advances under the Revolving Loan that such
Lender will not make available to the Administrative Agent, such Lender's
Revolving Credit Pro Rata Share of the advances to be made on such date, the
Administrative Agent may assume that such Lender has made such amount available
to the Administrative Agent on such date in accordance with this Section 2.5
(Settlement Among Lenders), and the Administrative Agent, in its sole discretion
may, in reliance upon such assumption, make available to the Borrowers on such
date a corresponding amount on behalf of such Lender.
If and to the extent such Lender shall not have so made
available to the Administrative Agent its Revolving Credit Pro Rata Share of the
advances under the Revolving Loan made on such date, and the Administrative
Agent shall have so made available to the Borrowers a corresponding amount on
behalf of such Lender, such Lender shall, on demand, pay to the Administrative
Agent such corresponding amount, together with interest thereon, at the Federal
Funds Rate, for each day from the date such corresponding amount shall have been
so available by the Administrative Agent to the Borrowers until the date such
amount shall have been repaid to the Administrative Agent. Such Lender shall not
be entitled to payment of any interest which accrues on the amount made
available by the Administrative Agent to the Borrowers for the account of such
Lender until such time as such Lender reimburses the Administrative Agent for
such amount, together with interest thereon, as provided in this Section 2.5.4.
A certificate of the Administrative Agent submitted to any
Lender with respect to any amounts owing to the Administrative Agent by such
Lender under this Section 2.5 shall be conclusive and binding on such Lender,
absent manifest error. If such Lender does not pay such amounts to the
Administrative Agent promptly upon the Administrative Agent's
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demand, the Administrative Agent shall promptly notify the Borrowers of such
Lender's failure to make payment, and the Borrowers shall immediately repay such
amounts to the Administrative Agent, together with accrued interest thereon at
the applicable rate on the Revolving Loan, all without prejudice to the rights
and remedies of the Administrative Agent against any defaulting Lender. Any and
all amounts due and payable to the Administrative Agent by the Borrowers under
this Section 2.5 constitute and shall be part of the Administrative Agent's
Obligations.
Unless the Administrative Agent shall have received notice
from the Borrowers prior to the date on which any payment is due to the
Administrative Agent that the Borrowers will not make such payment in full, the
Administrative Agent may assume that the Borrowers have made such payment in
full to the Administrative Agent on such date and the Administrative Agent in
its sole discretion may, in reliance upon such assumption, cause to be
distributed to each Lender on such due date an amount equal to the amount then
due such Lender. If and to the extent the Borrowers shall not have so made such
payment in full to the Administrative Agent and the Administrative Agent shall
have distributed to any Lender all or any portion of such amount, such Lender
shall repay to the Administrative Agent on demand the amount so distributed to
such Lender, together with interest thereon at the Federal Funds Rate, for each
day from the date such amount is distributed to such Lender until the date such
Lender repays such amount to the Administrative Agent.
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Section 3.1 Representations and Warranties.
The Borrowers, for themselves and for each other, represent and warrant to
the Administrative Agent and the Lenders, as follows:
3.1.1 Standing.
Each Borrower (a) is duly organized, and existing under the laws
of the state in which it is organized, (b) has the power to own its property and
to carry on its business as now being conducted and is duly qualified to do
business and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it therein or in which the transaction of its
business makes such qualification necessary.
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3.1.2 Power and Authority.
Each Borrower has full power and authority to execute and deliver
this Agreement, and the other Financing Documents to which it is a party, to
make the borrowings and request Letters of Credit under this Agreement and to
incur and perform the Obligations whether under this Agreement, the other
Financing Documents or otherwise, all of which have been duly authorized by all
proper and necessary action. No consent or approval of shareholders, partners or
any creditors of either Borrower, and no consent, approval, filing or
registration with or notice to any Governmental Authority on the part of either
Borrower, is required as a condition to the execution, delivery, validity or
enforceability of this Agreement, or any of the other Financing Documents, or
the performance by either Borrower of the Obligations.
3.1.3 Binding Agreements.
This Agreement and the other Financing Documents executed and
delivered by the Borrowers have been properly executed and delivered and
constitute the valid and legally binding obligations of the Borrowers and are
fully enforceable against each of the Borrowers in accordance with their
respective terms, subject to bankruptcy, insolvency, reorganization, moratorium
and other laws of general applications affecting the rights and remedies of
creditors and secured parties, and general principles of equity regardless of
whether applied in a proceeding in equity or at law.
3.1.4 No Conflicts.
Neither the execution, delivery and performance of the terms of
this Agreement or of any of the other Financing Documents executed and delivered
by either Borrower nor the consummation of the transactions contemplated by this
Agreement will conflict with, violate or be prevented by (a) either Borrower's
organizational documents, (b) any existing mortgage, indenture, contract or
agreement binding on either Borrower or affecting its property, or (c) any Laws.
3.1.5 No Defaults, Violations.
(a) No Default or Event of Default has occurred and is continuing.
(b) None of the Borrowers is in default under or with respect to
any obligation under any existing mortgage, indenture, contract or agreement
binding on it or affecting its property in any respect which could be materially
adverse to the business, operations, property or financial condition of either
Borrower, or which could materially adversely affect the ability of either
Borrower to perform its obligations under this Agreement or the other Financing
Documents, to which either Borrower is a party.
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3.1.6 Compliance with Laws.
None of the Borrowers is in violation of any applicable Laws
(including, without limitation, any Laws relating to employment practices, to
environmental, occupational and health standards and controls) or order, writ,
injunction, decree or demand of any court, arbitrator, or any Governmental
Authority affecting either Borrower or any of its properties, the violation of
which, considered in the aggregate, could materially adversely affect the
business, operations or properties of either Borrower.
3.1.7 Margin Stock.
None of the proceeds of the Revolving Loan will be used, directly
or indirectly, by either Borrower for the purpose of purchasing or carrying, or
for the purpose of reducing or retiring any indebtedness which was originally
incurred to purchase or carry, any "margin security" within the meaning of
Regulation G (12 CFR Part 207), or "margin stock" within the meaning of
Regulation U (12 CFR Part 221), of the Board of Governors of the Federal Reserve
System or for any other purpose which might make the transactions contemplated
in this Agreement a "purpose credit" within the meaning of said Regulation G or
Regulation U, or cause this Agreement to violate any other regulation of the
Board of Governors of the Federal Reserve System or the Securities Exchange Act
of 1934 or the Small Business Investment Act of 1958, as amended, or any rules
or regulations promulgated under any of such statutes.
3.1.8 Investment Company Act; Margin Securities.
None of the Borrowers is an investment company within the meaning
of the Investment Company Act of 1940, as amended, nor is it, directly or
indirectly, controlled by or acting on behalf of any Person which is an
investment company within the meaning of said Act. Neither of the Borrowers is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose of purchasing or carrying "margin security"
within the meaning of Regulation G (12 CFR Part 207), or "margin stock" within
the meaning of Regulation U (12 CFR Part 221), of the Board of Governors of the
Federal Reserve System.
3.1.9 Litigation.
Except as otherwise disclosed on Schedule 3.1.9 attached to and
made a part of this Agreement, there are no proceedings, actions or
investigations pending or, so far as either Borrower knows, threatened before or
by any court, arbitrator or any Governmental Authority which, in any one case or
in the aggregate, if determined adversely to the interests of either Borrower,
would have a material adverse effect on the business, properties, condition
(financial or otherwise) or operations, present or prospective, of either
Borrower.
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3.1.10 Financial Condition.
The consolidated financial statements of the Borrowers dated
December 31, 1998, are complete and correct and fairly present the financial
position of each of the Borrowers and the results of their operations and
transactions in their surplus accounts as of the date and for the period
referred to and have been prepared in accordance with GAAP applied on a
consistent basis throughout the period involved. There are no liabilities,
direct or indirect, fixed or contingent, of either Borrower as of the date of
such financial statements which are not reflected therein or in the notes
thereto. There has been no adverse change in the financial condition or
operations of either Borrower since the date of such financial statements and to
the Borrowers' knowledge no such adverse change is pending or threatened. None
of the Borrowers has guaranteed the obligations of, or made any investment in or
advances to, any Person, except as disclosed in such financial statements.
3.1.11 Full Disclosure.
The financial statements referred to in Section 3.1.10 (Financial
Condition) of this Agreement, the Financing Documents (including, without
limitation, this Agreement), and the statements, reports or certificates
furnished by either Borrower in connection with the Financing Documents (a) do
not contain any untrue statement of a material fact and (b) when taken in their
entirety, do not omit any material fact necessary to make the statements
contained therein not misleading. There is no fact known to either Borrower
which such Borrower has not disclosed to the Administrative Agent and the
Lenders in writing prior to the date of this Agreement with respect to the
transactions contemplated by the Financing Documents which materially and
adversely affects or in the future could, in the reasonable opinion of that
Borrower materially adversely affect the condition, financial or otherwise,
results of operations, business, or assets of either Borrower.
3.1.12 Indebtedness for Borrowed Money.
Except for the Obligations and the Agents' Obligations and except
as set forth in Schedule 3.1.12 attached to and made a part of this Agreement,
the Borrowers have no Indebtedness for Borrowed Money. The Administrative Agent
has received photocopies of all promissory notes evidencing any Indebtedness for
Borrowed Money set forth in Schedule 3.1.12, together with any and all
subordination agreements, other agreements, documents, or instruments securing,
evidencing, guarantying or otherwise executed and delivered in connection
therewith.
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3.1.13 Taxes.
Each of the Borrowers has filed all returns, reports and forms for
Taxes which, to the knowledge of the Borrowers, are required to be filed, and
has paid all Taxes as shown on such returns or on any assessment received by it,
to the extent that such Taxes have become due, unless and to the extent only
that such Taxes, assessments and governmental charges are currently contested in
good faith and by appropriate proceedings by a Borrower, such Taxes are not the
subject of any Liens other than Permitted Liens, and adequate reserves therefor
have been established as required under GAAP. All tax liabilities of the
Borrowers were as of the date of audited financial statements referred to in
Section 3.1.10 (Financial Condition), and are now, adequately provided for on
the books of the Borrowers, as appropriate. No tax liability has been asserted
by the Internal Revenue Service or any state or local authority against either
Borrower for Taxes in excess of those already paid.
3.1.14 ERISA.
With respect to any Plan that is maintained or contributed to by
the Borrower and/or by any Commonly Controlled Entity or as to which either of
the Borrowers retains material liability: (a) no "accumulated funding
deficiency" as defined in Code ss.412 or ERISA ss.302 has occurred, whether or
not that accumulated funding deficiency has been waived; (b) no Reportable Event
has occurred other than events for which reporting has been waived or that are
unlikely to result in material liability for either of the Borrowers; (c) no
termination of any plan subject to Title IV of ERISA has occurred; (d) neither
the Borrower nor any Commonly Controlled Entity has incurred a "complete
withdrawal" within the meaning of ERISA ss.4203 from any Multi-employer Plan
that is likely to result in material liability for one or more of the Borrowers;
(e) neither the Borrower nor any Commonly Controlled Entity has incurred a
"partial withdrawal" within the meaning of ERISA ss.4205 with respect to any
Multi-employer Plan that is likely to result in material liability for one or
more of the Borrowers; (f) no Multi-employer Plan to which the Borrower or any
Commonly Controlled Entity has an obligation to contribute is to the knowledge
of the Borrowers, in "reorganization" within the meaning of ERISA ss.4241 nor
has notice been received by the Borrower or any Commonly Controlled Entity that
such a Multi-employer Plan will be placed in "reorganization".
3.1.15 Title to Properties.
The Borrowers have good and marketable title to all of their
respective properties, including, without limitation, the properties and assets
reflected in the balance sheets described in Section 3.1.10 (Financial
Condition). The Borrowers have legal, enforceable and uncontested rights to use
freely such property and assets. The Borrowers represent and warrant that either
one of the Borrowers or a Wholly Owned Subsidiary of one of the Borrowers has
good and marketable title to each of the Unencumbered Properties free and clear
of any liens other than the Permitted Liens and the unrecorded Deeds of Trust.
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3.1.16 Presence of Hazardous Materials or Hazardous Materials
Contamination.
To the best of each Borrower's knowledge, (a) no Hazardous
Materials are located on any real property owned, controlled or operated by
either Borrower or for which either Borrower is, or is claimed to be,
responsible, except for reasonable quantities of necessary supplies and products
for use by a Borrower or its tenants in the ordinary course of its current line
of business and stored, used and disposed in accordance with applicable Laws;
and (b) no property owned, controlled or operated by either Borrower or for
which either Borrower has, or is claimed to have, responsibility has ever been
used as a manufacturing, storage, or dump site for Hazardous Materials nor is
affected by Hazardous Materials Contamination at any other property.
3.1.17 Year 2000 Representations and Warranties.
Each of the Borrowers represents and warrants to the Agents and
the Lenders that the following statements are true, correct and complete as of
the date hereof, and as of the date of each advance of the Revolving Loan or the
issuance of any Letter of Credit hereunder: (a) based on a comprehensive review
and assessments of its systems and equipment and those of its material
suppliers, vendors and customers, the Borrowers reasonably believe that the Year
2000 Problem, including costs of remediation, could not be expected to result in
a material adverse change in the financial condition of the Borrowers from that
expressed in the financial statements most recently submitted by the Borrowers
prior to the date hereof; (b) each of the Borrowers has developed plans for
preventing the Year 2000 Problem from having a material impact within its
operations, and the implementation of such plans, including testing, are on
schedule in all material respects; and (c) the Borrowers have developed feasible
contingency plans to insure uninterrupted and unimpaired business operation in
the event of failure of their own systems or equipment or those of their
material suppliers, vendors or customers due to the Year 2000 Problem. The
Borrowers covenant and agree with the Agents and the Lenders that the Borrowers
shall provide the Agents and the Lenders with any further assurances as to the
Borrowers' avoidance and resolution of the Year 2000 Problem as the Agents and
the Lenders may request from the Borrowers from time to time.
Section 3.2 Survival; Updates of Representations and Warranties.
--------------------------------------------------------
All representations and warranties contained in or made under or in
connection with this Agreement and the other Financing Documents shall survive
the Closing Date, the making of any advance under the Revolving Loan and
extension of credit made hereunder, and the incurring of any other Obligations
and shall be deemed to have been made at the time of each request for, and again
at the time the making of, each advance under the Revolving Loan or the issuance
of each Letter of Credit, except that the representations and warranties which
relate to financial statements which are referred to in Section 3.1.10
(Financial Condition), shall also be deemed to cover financial statements
furnished from time to time to the Administrative Agent and the Lenders pursuant
to Section 6.1.1 (Financial Statements).
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ARTICLE IV
CONDITIONS PRECEDENT
Section 4.1 Conditions to the Initial Advance and Initial Letter of Credit.
--------------------------------------------------------------
The making of the initial advance under the Revolving Loan and the issuance
of the initial Letter of Credit is subject to the fulfillment on or before the
Closing Date of the following conditions precedent in a manner satisfactory in
form and substance to the Administrative Agent and its counsel:
4.1.1 Organizational Documents - Borrowers.
The Administrative Agent shall have received for each Borrower (as
appropriate):
(a) a certificate of good standing certified by the Secretary of
State, or other appropriate Governmental Authority, of the state of organization
of such Borrower;
(b) a certified copy from the appropriate Governmental Authority
under which such Borrower is organized, of such Borrower's recorded limited
partnership certificate and all recorded amendments thereto;
(c) a certificate of qualification to do business for such
Borrower certified by the Secretary of State or other Governmental Authority of
each state in which such Borrower conducts business;
(d) a certificate dated as of the Closing Date by the Secretary or
an Assistant Secretary of Mid-Atlantic covering:
(i) true and complete copies of Mid- Atlantic's corporate
charter, bylaws, and all amendments thereto;
(ii) true and complete copies of the resolutions of
Mid-Atlantic's Board of Trustees authorizing (A) the execution,
delivery and performance of the Financing Documents to which it
is a party, (B) the borrowings hereunder, and (C) the granting of
the Liens contemplated by this Agreement and the Financing
Documents to which Mid-Atlantic is a party;
(iii) the incumbency, authority and signatures of the
officers of Mid-Atlantic authorized to sign this Agreement and
the other Financing Documents to which Mid- Atlantic is a party;
and
(iv) the identity of Mid-Atlantic's current
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trustees.
(e) a certificate of the general partners of MART, dated as of the
Closing Date:
(i) stating that attached to the certificate is a true and
complete copy of MART's Partnership Agreement, with all
amendments, modifications, restatements, substitutions,
extensions and renewals thereto;
(ii) authorizing (A) the execution, delivery and performance
of the Financing Documents to which MART is a party, (B) the
borrowings hereunder and any and all other Obligations, (C) the
granting of the Liens contemplated by this Agreement and the
Security Documents to which MART is a party, and (D) any and all
other actions or agreements taken with respect to the Obligations
or any collateral by any general partner of MART at any time;
(iii) setting forth the identity and signatures of the
general partners of MART and of other Responsible Officers then
authorized to sign this Agreement and the other Financing
Documents and the Security Documents to which MART is a party;
and
(iv) identifying MART's current partners and other equity
holders, as well as their respective percentage ownership
interests.
4.1.2 Opinion of Borrowers' Counsel.
The Administrative Agent shall have received the favorable
opinion of counsel for the Borrowers addressed to the Administrative Agent and
the Lenders in form satisfactory to the Administrative Agent and the
Documentation Agent.
4.1.3 Consents, Licenses, Approvals, Etc.
The Administrative Agent shall have received copies of all
consents, licenses and approvals, required in connection with the execution,
delivery, performance, validity and enforceability of the Financing Documents,
and such consents, licenses and approvals shall be in full force and effect.
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4.1.4 Notes.
The Administrative Agent shall have received for delivery to
each of the Lenders the Revolving Credit Notes, each conforming to the
requirements hereof and executed by a Responsible Officer of each Borrower and
attested by a duly authorized representative of each Borrower.
4.1.5 Financing Documents.
Each Borrower shall have executed and delivered the
Financing Documents to be executed by it.
4.1.6 Unencumbered Properties.
(a) The Borrowers shall have delivered to the Agents and the
Lenders for each of the Unencumbered Properties described on Schedule 4.1.6
attached hereto and made a part hereof:
(i) evidence satisfactory to the Administrative Agent
regarding the current and past pollution control practices
at such real property in connection with the discharge,
emission, handling, disposal or existence of Hazardous
Materials, which may include, at the Administrative Agent's
request, an environmental audit of such real property
prepared by a person or firm acceptable to the
Administrative Agent;
(ii) an unconditional commitment or binder for
mortgagee's title insurance in form and substance
satisfactory to the Administrative Agent and issued by a
title insurance company satisfactory to the Administrative
Agent;
(iii) a current survey satisfactory in all respects to
the Administrative Agent, prepared by a registered land
surveyor or engineer satisfactory to the Administrative
Agent;
(iv) a description of the property including age,
location and Occupancy Rate and a structural engineer's
report of the improvements;
(v) an operating statement and rent roll for the three
(3) preceding fiscal years (or portion thereof that one of
the Borrowers or a Subsidiary owned the real property) and
the current fiscal year through the fiscal quarter most
recently ended, prepared by a Responsible Officer of
Mid-Atlantic;
(vi) an operating budget for the current fiscal year
and a capital expenditure budget for the next twelve (12)
months;
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(vii) lease roll over schedule and lease abstracts;
(viii) a deed of trust, mortgage, indemnity deed of
trust or other lien instrument, as appropriate, granting to
the Administrative Agent, for the ratable benefit of the
Lenders with respect to the Obligations and the ratable
benefit of the Agents with respect to the Agents'
Obligations, a first lien on such real property, subject
only to the Permitted Liens (individually a "Deed of Trust"
and collectively, the "Deeds of Trust"). The Deeds of Trust
shall be held in escrow by the Administrative Agent and
recorded only in accordance with the terms of Section 7.2.5
(Recordation of Deeds of Trust);
(ix) upon request of the Administrative Agent, be
accompanied by a signed opinion of counsel addressed to the
Administrative Agent and each of the Lenders, in form and
substance satisfactory to the Administrative Agent, and from
counsel, satisfactory to the Administrative Agent, licensed
to practice in the state where the subject real property is
located;
(x) if the property is subject to a ground lease, a
copy of the ground lease and all amendments thereto, as
recorded; and
(xi) such other information as the Administrative Agent
may reasonably request.
4.1.7 Other Financing Documents.
In addition to the Financing Documents to be delivered by
the Borrowers, the Administrative Agent shall have received the Financing
Documents duly executed and delivered by Persons other than the Borrowers.
4.1.8 Other Documents, Etc.
The Administrative Agent shall have received such other
certificates, opinions, documents and instruments confirmatory of or otherwise
relating to the transactions contemplated hereby as may have been reasonably
requested by the Administrative Agent.
4.1.9 Payment of Fees.
The Administrative Agent and the Lenders shall have received
payment of any Fees due on or before the Closing Date.
4.1.10 Solvency.
The Administrative Agent shall have received and approved
the Financial Condition Certificate in the form of EXHIBIT "C" attached hereto
and made a part hereof.
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4.1.11 Letters of Credit.
The Administrative Agent and the Lenders shall have received
and approved a list of all Letters of Credit issued and outstanding, or to be
issued and outstanding, as of the Closing Date.
Section 4.2 Conditions to all Extensions of Credit.
---------------------------------------
The making of all advances under the Revolving Loan and the
issuance of all Letters of Credit are subject to the fulfillment of the
following conditions precedent in a manner satisfactory in form and substance to
the Administrative Agent and its counsel:
4.2.1 Compliance.
Each Borrower shall have complied and shall then be in
compliance with all terms, covenants, conditions and provisions of this
Agreement and the other Financing Documents that are binding upon it.
4.2.2 Default.
There shall exist no Event of Default or Default hereunder.
4.2.3 Representations and Warranties.
The representations and warranties of each of the Borrowers
contained among the provisions of this Agreement shall be true and with the same
effect as though such representations and warranties had been made at the time
of the making of, and of the request for, each advance under the Revolving Loan
or the issuance of each Letter of Credit, except that the representations and
warranties which relate to financial statements which are referred to in Section
3.1.10 (Financial Condition), shall also be deemed to cover financial statements
furnished from time to time to the Administrative Agent pursuant to Section
6.1.1 (Financial Statements).
4.2.4 Adverse Change.
No adverse change shall have occurred in the condition
(financial or otherwise), operations or business of either Borrower that would,
in the good faith judgment of the Administrative Agent, materially impair the
ability of that Borrower to pay or perform any of the Obligations.
4.2.5 Legal Matters.
All legal documents incident to each advance under the
Revolving Loan and each of the Letters of Credit shall be reasonably
satisfactory to counsel for the Administrative Agent.
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ARTICLE V
UNENCUMBERED PROPERTIES.
Section 5.1 Unencumbered Properties as of the Closing Date.
-----------------------------------------------
The Unencumbered Properties as of the date hereof are those properties
identified on Schedule 4.1.6 (Unencumbered Properties).
Section 5.2 Addition of Unencumbered Properties
Subsequent to the date hereof the Borrower may request that other
properties be included in the Unencumbered Properties and in conjunction with
such request, deliver to the Administrative Agent and each of the Lenders, each
of the items required pursuant to Section 4.1.6 (Unencumbered Properties) for
such real property. The Administrative Agent and the Lenders shall have a period
not to exceed thirty (30) Business Days after receipt of all of the items
referred to in Section 4.1.6 (Unencumbered Properties) to review such
submissions and determine whether or not such real property will be included in
the Unencumbered Properties. If the Requisite Lenders approve the inclusion of
the real property in the Unencumbered Properties, the real property shall be
included.
Section 5.3 Removal of Properties from the Unencumbered Properties.
-------------------------------------------------------
The Borrowers shall provide to the Administrative Agent and the Lenders
notice not less than thirty (30) days prior to the date they desire to have any
property removed from the Unencumbered Properties. A property may cease to be
one of the Unencumbered Properties provided that (a) no Default or Event of
Default exists under the Financing Documents and the removal of such property
from the Unencumbered Properties does not result in a Default or an Event of
Default and (b) the Requisite Lenders approve of the elimination of the subject
property from the Unencumbered Properties.
ARTICLE VI
COVENANTS OF THE BORROWERS
Section 6.1 Affirmative Covenants.
So long as any of the Obligations or Letters of Credit (or the
Commitments therefor) or the Agents' Obligations shall be outstanding
hereunder, the Borrowers agree jointly and severally with the Agents and
the Lenders as follows:
6.1.1 Financial Statements.
The Borrowers shall furnish to the Administrative Agent and the
Lenders:
(a) Annual Statements and Certificates. The Borrowers shall
furnish to the Administrative Agent and the Lenders as soon as available, but in
no event more than one hundred and twenty (120) days after the close of the
Borrowers' fiscal years, (i) a copy
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of the annual financial statement in reasonable detail satisfactory to the
Administrative Agent relating to the Borrowers, prepared in accordance with GAAP
and examined and audited by independent certified public accountants
satisfactory to the Administrative Agent, which financial statement shall
include a consolidated and consolidating balance sheet of the Borrowers as of
the end of such fiscal year and consolidated and consolidating statements of
income, cash flows and changes in shareholders equity of the Borrowers for such
fiscal year, and (ii) a Compliance Certificate, in substantially the form
attached to this Agreement as EXHIBIT "B", containing a detailed computation of
each financial covenant in this Agreement which is applicable for the period
reported and a certification that no change has occurred to the information
provided to the Lenders in connection with the application for the Credit
Facilities (except as set forth on any schedule attached to the certification),
each prepared by a Responsible Officer of the Borrowers in a format acceptable
to the Administrative Agent and (iii) a management letter in the form prepared
by the Borrowers' independent certified public accountants.
(b) Quarterly Statements and Certificates. The Borrowers
shall furnish to the Administrative Agent and the Lenders as soon as available,
but in no event more than forty five (45) days after the close of the Borrowers'
fiscal quarters, (i) consolidated and consolidating balance sheets of the
Borrowers as of the close of such period, consolidated and consolidating income,
cash flows and changes in equity statements for such period, all as prepared and
certified by a Responsible Officer of the Borrowers, (ii) consolidated
statements of operation, occupancy summaries, leasing activity reports,
operating statements by profit center and such other financial reports and
information as the Administrative Agent may require, all as prepared and
certified by a Responsible Officer of the Borrowers and (iii) a Compliance
Certificate, in substantially the form attached to this Agreement as EXHIBIT B,
containing a detailed computation of each financial covenant in this Agreement
which is applicable for the period reported and a certification that no material
adverse change has occurred to the information provided to the Lenders in
connection with the application for the Credit Facilities (except as set forth
on any schedule attached to the certification), prepared by a Responsible
Officer of or on behalf of each Borrowers in a format acceptable to the Lenders,
all as prepared and certified by a Responsible Officer of the Borrowers and
accompanied by a certificate of that officer stating whether any event has
occurred which constitutes a Default or an Event of Default hereunder, and, if
so, stating the facts with respect thereto.
(c) Monthly Statements and Certificates. The Borrowers shall
furnish to the Administrative Agent and the Lenders as soon as available, but in
no event more than thirty (30) days after the close of the Borrowers' fiscal
months, consolidated statements of operation, occupancy summaries, leasing
activity reports, operating statements by profit center and such other financial
reports and information as the Administrative Agent may require, all as prepared
and certified by a Responsible Officer of the Borrowers.
(d) Annual Budget and Projections. The Borrowers shall
furnish to the Lender as soon as available, but in no event later than the 10th
day before the end of each fiscal year:
(i) a consolidated and consolidating budget for
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the following fiscal year, and
(ii) a loan usage projection on a consolidated and
consolidating basis.
(e) Additional Reports and Information. The Borrowers shall
furnish to the Administrative Agent and the Lenders promptly, such additional
information, reports or statements as the Administrative Agent and/or any of the
Lenders may from time to time reasonably request and additional Compliance
Certificates as required pursuant to Section 7.1.3 (Failure to Comply).
6.1.2 Reports to SEC and to Stockholders.
The Borrowers will furnish to the Administrative Agent and
the Lenders, promptly upon the filing or making thereof, at least one (l) copy
of all financial statements, reports, notices and proxy statements sent by
either Borrower to its stockholders, and of all regular and other reports filed
by either Borrower with any securities exchange or with the Securities and
Exchange Commission. Mid-Atlantic shall at all times remain a publicly traded
company listed on a public stock exchange.
6.1.3 Recordkeeping, Rights of Inspection, Etc.
(a) Each of the Borrowers shall maintain (i) a standard
system of accounting in accordance with GAAP, and (ii) proper books of record
and account in which full, true and correct entries are made of all dealings and
transactions in relation to its properties, business and activities.
(b) Each of the Borrowers shall permit authorized
representatives of the Administrative Agent to review, audit, check and inspect
the Borrowers' books of record at any time with reasonable notice and to make
abstracts and photocopies thereof, and to discuss the affairs, finances and
accounts of the Borrowers, with the officers, directors, employees and other
representatives of the Borrowers and their respective accountants, all at such
times during normal business hours and other reasonable times and as often as
the Administrative Agent may reasonably request.
(c) Each of the Borrowers hereby irrevocably authorizes and
directs all accountants and auditors employed by either of the Borrowers at any
time prior to the repayment in full of the Obligations and the Agents'
Obligations to exhibit and deliver to the Administrative Agent and the Lenders
copies of any and all of the financial statements, trial balances, management
letters, or other accounting records of any nature of either of the Borrowers in
the accountant's or auditor's possession, and to disclose to the Administrative
Agent and any of the Lenders any information they may have concerning the
financial status and business operations of either of the Borrowers. Further,
the Borrowers each hereby authorize all Governmental Authorities to furnish to
the Administrative Agent and the Lenders copies of reports or examinations
relating to either of the Borrowers, whether made by the Borrowers or otherwise.
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(d) Any and all costs and expenses incurred by, or on behalf
of, the Administrative Agent in connection with the conduct of any of the
foregoing shall be part of the Enforcement Costs and shall be payable to the
Administrative Agent upon demand.
6.1.4 REIT Existence.
Mid-Atlantic shall maintain its existence as a real estate
investment trust under the Internal Revenue Code in good standing in the
jurisdiction in which it is incorporated and in each other jurisdiction where it
is required to register or qualify to do business if the failure to do so in
such other jurisdiction might have a material adverse effect on the ability of
the Borrowers to perform the Obligations and the Agents' Obligations, on the
conduct of Mid- Atlantic's operations or on the Borrowers' consolidated
financial condition.
6.1.5 Partnership Existence.
MART shall maintain its existence as a limited partnership
in good standing in the jurisdiction in which it is formed and in each other
jurisdiction where it is required to register or qualify to do business if the
failure to do so in such other jurisdiction might have a material adverse effect
on the ability of the Borrowers to perform the Obligations and the Agents'
Obligations, on the conduct of MART's operations or on the Borrowers'
consolidated financial condition.
6.1.6 Compliance with Laws.
Each of the Borrowers shall comply with all applicable Laws
and observe the valid requirements of Governmental Authorities, the
noncompliance with or the nonobservance of which might have a material adverse
effect on the ability of the Borrowers to perform the Obligations and the
Agents' Obligations, on the conduct of the Borrowers' operations or on the
Borrowers' consolidated financial condition.
6.1.7 Preservation of Properties.
Each of the Borrowers will at all times (a) maintain,
preserve, protect and keep its properties, whether owned or leased, in good
operating condition, working order and repair (ordinary wear and tear excepted),
and from time to time will make all proper repairs, maintenance, replacements,
additions and improvements thereto needed to maintain such properties in good
operating condition, working order and repair, and (b) do or cause to be done
all things necessary to preserve and to keep in full force and effect its
material franchises, leases of real and personal property, trade names, patents,
trademarks and permits which are necessary for the orderly continuance of its
business.
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6.1.8 Line of Business.
Each of the Borrowers will, and will cause each of their
Subsidiaries to, continue to engage substantially only in the business of
owning, acquiring, developing, leasing and managing primarily neighborhood or
community shopping centers in the Middle Atlantic region of the United States.
6.1.9 Insurance.
Each of the Borrowers will at all times maintain with "A" or
better rated insurance companies such insurance as is required by applicable
Laws and such other insurance, in such amounts, of such types and against such
risks, hazards, liabilities, casualties and contingencies as are usually insured
against in the same geographic areas by business entities engaged in the same or
similar business. Without limiting the generality of the foregoing, each of the
Borrowers will keep adequately insured all of its property against loss or
damage resulting from fire or other risks insured against by extended coverage
and maintain public liability insurance against claims for personal injury,
death or property damage occurring upon, in or about any properties occupied or
controlled by it, or arising in any manner out of the businesses carried on by
it, all in such amounts not less than the Administrative Agent shall reasonably
determine from time to time. Each of the Borrowers shall deliver to the
Administrative Agent on the Closing Date (and thereafter on each date there is a
material change in the insurance coverage) a certificate of a Responsible
Officer of the Borrowers containing a detailed list of the insurance then in
effect and stating the names of the insurance companies, the types, the amounts
and rates of the insurance, dates of the expiration thereof and the properties
and risks covered thereby. Within thirty (30) days after notice in writing from
the Administrative Agent, the Borrowers will obtain such additional insurance as
the Administrative Agent may reasonably request.
6.1.10 Taxes.
Except to the extent that the validity or amount thereof is
being contested in good faith and by appropriate proceedings, each of the
Borrowers will pay and discharge all Taxes prior to the date when any interest
or penalty would accrue for the nonpayment thereof. Each of the Borrowers shall
furnish to the Administrative Agent at such times as the Administrative Agent
may require proof satisfactory to the Administrative Agent of the making of
payments or deposits required by applicable Laws including, without limitation,
payments or deposits with respect to amounts withheld by either of the Borrowers
from wages and salaries of employees and amounts contributed by either of the
Borrowers on account of federal and other income or wage taxes and amounts due
under the Federal Insurance Contributions Act, as amended.
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6.1.11 ERISA.
Each of the Borrowers will, and will cause each of its
Commonly Controlled Entities to, comply with the funding requirements of ERISA
with respect to Plans for its respective employees. Neither of the Borrowers
will permit with respect to any Plan (a) any prohibited transaction or
transactions under ERISA or the Internal Revenue Code, which results, or may
result, in any material liability of the Borrower, or (b) any Reportable Event
if, upon termination of the plan or plans with respect to which one or more such
Reportable Events shall have occurred, there is or would be any material
liability of the Borrower to the PBGC. Upon the Lender's request, each of the
Borrowers will deliver to the Lender a copy of the most recent actuarial report,
financial statements and annual report completed with respect to any Plan.
6.1.12 Notification of Events of Default and Adverse Developments.
Each of the Borrowers shall promptly notify the
Administrative Agent upon obtaining knowledge of the occurrence of:
(a) any Event of Default;
(b) any Default;
(c) any litigation instituted or threatened against either
of the Borrowers and of the entry of any judgment or Lien (other than any
Permitted Liens) against any of the assets or properties of either of the
Borrowers where the claims against either Borrower exceed Five Hundred Thousand
Dollars ($500,000) and are not covered by insurance;
(d) any event, development or circumstance whereby the
financial statements furnished hereunder fail in any material respect to present
fairly, in accordance with GAAP, the financial condition and operational results
of either of the Borrowers;
(e) any judicial, administrative or arbitral proceeding
pending against either of the Borrowers and any judicial or administrative
proceeding known by either of the Borrowers to be threatened against either
Borrower which, if adversely decided, could materially adversely affect the
financial condition or operations (present or prospective) of either Borrower;
(f) the receipt by either of the Borrowers of any notice,
claim or demand from any Governmental Authority which alleges that either of the
Borrowers is in violation of any of the terms of, or has failed to comply with
any applicable Laws regulating its operation and business, including, but not
limited to, the Occupational Safety and Health Act and the Environmental
Protection Act; and
(g) any other development in the business or affairs of
either of the Borrowers which may be materially adverse;
in each case describing in detail satisfactory to the Administrative Agent the
nature thereof
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and the action the Borrowers propose to take with respect thereto.
6.1.13 Hazardous Materials; Contamination.
Each of the Borrowers agree to:
(a) give notice to the Administrative Agent immediately upon
acquiring knowledge of the presence of any Hazardous Materials or any Hazardous
Materials Contamination on any property owned, operated or controlled by either
Borrower or for which either Borrower is, or is claimed to be, responsible
(provided that such notice shall not be required for Hazardous Materials placed
or stored on such property in accordance with applicable Laws in the ordinary
course (including, without limitation, quantity) of a Borrower's or its tenant's
line of business expressly described in this Agreement), with a full description
thereof;
(b) promptly comply with any Laws requiring the removal,
treatment or disposal of Hazardous Materials or Hazardous Materials
Contamination and provide the Administrative Agent with satisfactory evidence of
such compliance;
(c) provide the Administrative Agent, within thirty (30)
days after a demand by the Administrative Agent, with a bond, letter of credit
or similar financial assurance evidencing to the Administrative Agent's
satisfaction that the necessary funds are available to pay the cost of removing,
treating, and disposing of such Hazardous Materials or Hazardous Materials
Contamination and discharging any Lien which may be established as a result
thereof on any property owned, operated or controlled by either Borrower or for
which either Borrower is, or is claimed to be, responsible; and
(d) as part of the Obligations, defend, indemnify and hold
harmless the Administrative Agent, each of the Lenders and each of their
respective Administrative Agents, employees, trustees, successors and assigns
from any and all claims which may now or in the future (whether before or after
the termination of this Agreement) be asserted as a result of the presence of
any Hazardous Materials or any Hazardous Materials Contamination on any property
owned, operated or controlled by either Borrower for which either Borrower is,
or is claimed to be, responsible. Each Borrower acknowledges and agrees that
this indemnification shall survive the termination of this Agreement and the
Commitments and the payment and performance of all of the other Obligations.
6.1.14 Financial Covenants.
(a) Corporate Leverage Ratio. The Borrowers shall maintain
at all times and tested as of the end of each fiscal quarter a Corporate
Leverage Ratio of less than or equal to fifty-five percent (55%).
(b) Interest Coverage Ratio. The Borrowers shall maintain at
all times and tested as of the end of each fiscal quarter an Interest Coverage
Ratio of equal to or greater than 2.0 to 1.0.
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(c) Fixed Charge Coverage Ratio. The Borrowers shall
maintain at all times and tested as of the end of each fiscal quarter a Fixed
Charge Coverage Ratio equal to or greater than 1.5 to 1.0.
(d) Unencumbered Leverage Ratio. The Borrowers shall
maintain at all times and tested as of the end of each fiscal quarter an
Unencumbered Leverage Ratio of less than or equal to fifty-five percent (55%).
(e) Unencumbered Interest Coverage Ratio. The Borrowers
shall maintain at all times and tested as of the end of each fiscal quarter an
Unencumbered Interest Coverage Ratio of equal to or greater than 2.0 to 1.0.
(f) Unencumbered Debt Service Coverage Ratio. The Borrowers
shall maintain at all times and tested as of the end of each fiscal quarter a
ratio of Adjusted Unencumbered NOI for the most recent fiscal quarter annualized
divided by the Annual Debt Service on the Unsecured Indebtedness of equal to or
greater than 1.5 to 1.0.
(g) Tangible Net Worth. The Borrowers shall maintain at all
times and tested as of the end of each fiscal quarter a Tangible Net Worth of
not less than $200,000,000 plus eighty percent (80%) of the net proceeds of each
public or private equity offering of the Borrowers subsequent to September 30,
1998.
(h) Secured Indebtedness Ratio. The Borrowers shall maintain
at all times and tested as of the end of each fiscal quarter, a total Secured
Indebtedness of less than or equal to forty percent (40%) of Total Asset Value.
6.1.15 Investments in Real Estate Assets.
Each of the Borrowers agree that investments in:
(a) real estate Assets other than anchored neighborhood or
community shopping centers shall at no time have an aggregate value in excess of
ten percent (10%) of Total Asset Value;
(b) new development projects shall at no time have an
aggregate value in excess of fifteen percent (15%) of Total Asset Value;
(c) raw land shall at no time have an aggregate value in
excess of five percent (5%) of Total Asset Value; and
(d) unconsolidated joint ventures shall at no time have an
aggregate value in excess of ten percent (10%) of Total Asset Value.
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6.1.16 Deeds of Trust a Contemporaneous Exchange; Financial
Condition Certificates.
The Deeds of Trust are a transfer of the owner's interest in
the applicable real property as of the date delivered to the Administrative
Agent. As Deeds of Trust are delivered subsequent to the Closing Date, such
Deeds of Trust are not being delivered or transferred on account of an
antecedent debt; the Deeds of Trust are intended to be a contemporaneous
exchange for new value. The Borrowers shall deliver, or cause to be delivered,
to the Administrative Agent, a Financial Condition Certificate in the form of
EXHIBIT "D" attached hereto and made a part hereof simultaneous with the
delivery of any Deed of Trust after the date hereof.
6.1.17 Deeds of Trust.
Each Deed of Trust to be executed and delivered pursuant
hereto shall:
(a) be in form and substance satisfactory to the
Administrative Agent and the Documentation Agent; and
(b) upon recording, create a first priority Lien in such
real property in favor of the Administrative Agent, for the ratable benefit of
the Lenders with respect to the Obligations and for the benefit of the Agents
with respect to the Agents' Obligations, subject only to Permitted Liens, zoning
ordinances, and such other matters as the Administrative Agent may approve.
Section 6.2 Negative Covenants.
So long as any of the Obligations or Letters of Credit (or the
Commitments therefor) or the Agents' Obligations shall be outstanding hereunder,
the Borrowers agree with the Agents and the Lenders that without the prior
written consent of the Administrative Agent:
6.2.1 Merger, Acquisition or Sale of Assets.
Neither of the Borrowers will enter into any merger or
consolidation unless one of the Borrowers is the surviving controlling entity
and the merger or consolidation will not cause a violation of any term or
condition of this Agreement. Neither of the Borrowers will enter into any
amalgamation, windup or dissolve themselves (or suffer any liquidation or
dissolution), or sell, lease or otherwise dispose of any of its assets, except
assets disposed of in the ordinary course of business prior to an Event of
Default and assets disposed of that, when aggregated with the assets disposed of
by both of the Borrowers since the Closing Date, is less than twenty percent
(20%) of the Borrowers' assets as of the Closing Date. Any consent of the
Administrative Agent to the disposition of any assets may be conditioned on a
specified use of the proceeds of disposition.
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6.2.2 Indebtedness.
Neither of the Borrowers will create, incur, assume or
suffer to exist any Indebtedness for Borrowed Money or permit any Subsidiary to
do so, except:
(a) the Obligations;
(b) current accounts payable arising in the ordinary course;
(c) Indebtedness secured by Permitted Liens;
(d) Indebtedness of the Borrowers existing on the date
hereof and reflected on the financial statements furnished pursuant to Section
3.1.10 (Financial Condition); and
(e) Subordinated Debt and Subordinated Indebtedness.
6.2.3 Loans and Other Transactions.
Except as otherwise provided in this Agreement, neither of
the Borrowers will, and nor will either of them permit any of its Subsidiaries
to, (a) guaranty or otherwise become contingently liable for the Indebtedness or
obligations of any Person (other than a Subsidiary), or (b) make any loans or
advances, or otherwise extend credit to any Person, except:
(i) any advance to an officer or employee of either
Borrower or any Subsidiary, provided that the maximum amount
of any such advance to one individual shall not exceed
$150,000 and the aggregate amount of all such advances by
all of the Borrowers and their Subsidiaries (taken as a
whole) outstanding at any time shall not exceed Five Hundred
Thousand Dollars ($500,000);
(ii) the endorsement of negotiable instruments for
deposit or collection or similar transactions in the
ordinary course of business; and
(iii) loans to any officers or employees pursuant to
MART's Restricted Stock Plan so long as such loans in the
aggregate shall not exceed $2,150,000 outstanding at any
time.
6.2.4 Distributions.
Neither of the Borrowers will, or permit any of its
Subsidiaries to, make distributions in excess ninety percent (90%) of diluted
FFO and ninety-five percent (95%) of FAD for the most recent four (4) fiscal
quarters; provided, however, this limitation shall not preclude the Borrowers
from making the minimum distributions required to maintain REIT status under the
Internal Revenue Code.
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6.2.5 Liens.
Neither of the Borrowers will (a) create, incur, assume or
suffer to exist any Lien upon any of its properties or assets, whether now owned
or hereafter acquired, or permit any Subsidiary so to do, except for Permitted
Liens and (b) allow or suffer to exist the failure of any Lien described in the
Security Documents to attach to, and/or remain at all times perfected on, any of
the property described in the Security Documents.
6.2.6 Transactions with Affiliates.
Neither of the Borrowers nor any of their Subsidiaries will
enter into or participate in any transaction with any Affiliate or, except in
the ordinary course of business, with the officers, directors, employees and
other representatives of either Borrower and/or any Subsidiary.
6.2.7 Other Businesses.
Neither of the Borrowers nor any of their Subsidiaries will
engage directly or indirectly in any business other than its current line of
business described elsewhere in this Agreement.
6.2.8 ERISA Compliance.
Neither of the Borrowers nor any Commonly Controlled Entity
shall: (a) engage in or permit any "prohibited transaction" (as defined in
ERISA); (b) cause any "accumulated funding deficiency" as defined in ERISA
and/or the Internal Revenue Code; (c) terminate any pension plan in a manner
which could result in the imposition of a lien on the property of either
Borrower pursuant to ERISA; (d) terminate or consent to the termination of any
Multi-employer Plan; or (e) incur a complete or partial withdrawal with respect
to any Multi- employer Plan.
6.2.9 Prohibition on Hazardous Materials.
Neither of the Borrowers shall place, manufacture or store
or permit to be placed, manufactured or stored any Hazardous Materials on any
property owned, operated or controlled by either Borrower, or any Affiliate of
either of the Borrowers, or for which either Borrower, or any Affiliate of
either of the Borrowers, is responsible other than Hazardous Materials placed or
stored on such property in accordance with applicable Laws in the ordinary
course of a Borrower's business expressly described in this Agreement.
6.2.10 Amendments.
Neither of the Borrowers will amend or terminate or agree to
amend or terminate any ground lease governing any of the Unencumbered Properties
or consent to or waive any material provisions thereof.
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6.2.11 Method of Accounting; Fiscal Year.
Neither of the Borrowers shall:
(a) change the method of accounting employed in the
preparation of any financial statements furnished to the Administrative Agent
under the provisions of Section 6.1.1 (Financial Statements), unless required to
conform to GAAP and on the condition that the Borrowers' accountants shall
furnish such information as the Administrative Agent may request to reconcile
the changes with the Borrowers' prior financial statements
(b) change its fiscal year from a year ending on December
31.
ARTICLE VII
DEFAULT AND RIGHTS AND REMEDIES
Section 7.1 Events of Default.
The occurrence of any one or more of the following events shall
constitute an "Event of Default" under the provisions of this Agreement:
7.1.1 Failure to Pay.
The failure of the Borrowers to pay any of the Obligations
or the Agents' Obligations as and when due and payable in accordance with the
provisions of this Agreement, the Notes and/or any of the other Financing
Documents and such failure continues for five (5) days.
7.1.2 Breach of Representations and Warranties.
Any representation or warranty made in this Agreement or in
any report, statement, schedule, certificate, opinion (including any opinion of
counsel for the Borrowers), financial statement or other document furnished in
connection with this Agreement, any of the other Financing Documents, or the
Obligations, shall prove to have been false or misleading when made (or, if
applicable, when reaffirmed) in any material adverse respect.
7.1.3 Failure to Comply with Specific Covenants.
The failure of the Borrowers to perform, observe or comply
with any covenant contained in Section 6.1.14 (Financial Covenants), Section
6.1.15 (Investments in Real Estate Assets) or Section 6.2.5 (Liens) and such
failure is not corrected and the Borrower in compliance with such covenant, as
evidenced and certified by the Borrowers' Compliance Certificate in
substantially the form attached to this Agreement as Exhibit B, dated not later
than thirty (30) days after notice from the Administrative Agent to the
Borrowers.
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7.1.4 Failure to Comply with Other Covenants.
The failure of the Borrowers to materially perform, observe
or comply with any covenant, condition or agreement contained in this Agreement
and not otherwise specifically covered in this ARTICLE VII and such failure
continues uncured for a period of thirty (30) days after notice from the
Administrative Agent to the Borrowers, unless the nature of the failure is such
that (a) it cannot be cured within the thirty (30) day period, (b) the Borrowers
institute corrective action within the thirty (30) day period and (c) the
Borrowers complete the cure within a period of an additional thirty (30) days.
7.1.5 Default Under Other Financing Documents or
Obligations.
A default shall occur under any of the other Financing
Documents or under any other Obligations, and such default is not cured within
any applicable grace period provided therein.
7.1.6 Receiver; Bankruptcy.
Either Borrower or any Subsidiary shall (a) apply for or
consent to the appointment of a receiver, trustee or liquidator of itself or any
of its property, (b) admit in writing its inability to pay its debts as they
mature, (c) make a general assignment for the benefit of creditors, (d) be
adjudicated a bankrupt or insolvent, (e) file a voluntary petition in bankruptcy
or a petition or an answer seeking or consenting to reorganization or an
arrangement with creditors or to take advantage of any bankruptcy,
reorganization, insolvency, readjustment of debt, dissolution or liquidation law
or statute, or an answer admitting the material allegations of a petition filed
against it in any proceeding under any such law, or take corporate action for
the purposes of effecting any of the foregoing, or (f) by any act indicate its
consent to, approval of or acquiescence in any such proceeding or the
appointment of any receiver of or trustee for any of its property, or suffer any
such receivership, trusteeship or proceeding to continue undischarged for a
period of sixty (60) days, or (g) by any act indicate its consent to, approval
of or acquiescence in any order, judgment or decree by any court of competent
jurisdiction or any Governmental Authority enjoining or otherwise prohibiting
the operation of a material portion of either Borrower's or any Subsidiary's
business or the use or disposition of a material portion of either Borrower's or
any Subsidiary's assets.
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7.1.7 Involuntary Bankruptcy, etc.
(a) An order for relief shall be entered in any involuntary
case brought against either Borrower or any Subsidiary under the Bankruptcy
Code, or (b) any such case shall be commenced against either Borrower or any
Subsidiary and shall not be dismissed within sixty (60) days after the filing of
the petition, or (c) an order, judgment or decree under any other Law is entered
by any court of competent jurisdiction or by any other Governmental Authority on
the application of a Governmental Authority or of a Person other than either
Borrower or any Subsidiary (i) adjudicating either Borrower, or any Subsidiary
bankrupt or insolvent, or (ii) appointing a receiver, trustee or liquidator of
either Borrower or of any Subsidiary, or of a material portion of either
Borrower's or any Subsidiary's assets, or (iii) enjoining, prohibiting or
otherwise limiting the operation of a material portion of either Borrower's or
any Subsidiary's business or the use or disposition of a material portion of
either Borrower's or any Subsidiary's assets, and such order, judgment or decree
continues unstayed and in effect for a period of thirty (30) days from the date
entered.
7.1.8 Judgment.
Unless adequately insured in the opinion of the
Administrative Agent, the entry of a final judgment for the payment of money
involving more than $100,000 against either Borrower or any Subsidiary, and the
failure by such Borrower or such Subsidiary to discharge the same, or cause it
to be discharged, within thirty (30) days from the date of the order, decree or
process under which or pursuant to which such judgment was entered, or to secure
a stay of execution pending appeal of such judgment.
7.1.9 Default Under Other Borrowings.
Subject to the provisions of Section 9.19 (Default by
Related Entities), default shall be made with respect to any Indebtedness for
Borrowed Money of either of the Borrowers in excess of $250,000 in the aggregate
if the effect of such default is to accelerate the maturity of such Indebtedness
for Borrowed Money or to permit the holder or obligee thereof or other party
thereto to cause such Indebtedness for Borrowed Money to become due prior to its
stated maturity.
7.1.10 Challenge to Agreements.
Either Borrower shall challenge the validity and binding
effect of any provision of any of the Financing Documents or shall state its
intention to make such a challenge of any of the Financing Documents or any of
the Financing Documents shall for any reason (except to the extent permitted by
its express terms) cease to be effective.
7.1.11 Material Adverse Change.
The Administrative Agent, in its sole discretion, determines
in good faith that a material adverse change has occurred in the financial
condition of either of the Borrowers.
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7.1.12 Impairment of Position.
The Administrative Agent, in its sole discretion, determines
in good faith that an event has occurred which impairs the prospect of payment
of any of the Obligations.
7.1.13 Liquidation, Termination, Dissolution, Change in
Management, etc.
Either Borrower shall liquidate, dissolve or terminate its
existence or any change occurs in the executive management of either Borrower
without the prior written consent of the Administrative Agent.
Section 7.2 Remedies.
Upon the occurrence of any Default or Event of Default, the
Administrative Agent may, in the exercise of its sole and absolute discretion
from time to time, and shall, at the direction of the Requisite Lenders, at any
time thereafter exercise any one or more of the following rights, powers or
remedies.
7.2.1 Acceleration.
The Administrative Agent may declare any or all of the
Obligations to be immediately due and payable, notwithstanding anything
contained in this Agreement or in any of the other Financing Documents to the
contrary, without presentment, demand, protest, notice of protest or of
dishonor, or other notice of any kind, all of which the Borrowers hereby waive.
7.2.2 Further Advances.
The Administrative Agent may from time to time without
notice to the Borrowers suspend, terminate or limit any further advances, loans
or other extensions of credit under the Commitments, under this Agreement and/or
under any of the other Financing Documents. So long as (a) a Default pursuant to
Section 7.1.3 (Failure to Comply with Specific Covenants) exists and prior to
delivery of the Compliance Certificate required pursuant to such Section or (b)
a Default exists pursuant to Section 7.1.4 (Failure to Comply with Other
Covenants), no further advances, loans or other extensions of credit requested
by the Borrowers under the Commitments, under this Agreement and/or any of the
other Financing Documents shall be made. Further, upon the occurrence of an
Event of Default or Default specified in Sections 7.1.6 (Receiver; Bankruptcy)
or 7.1.7 (Involuntary Bankruptcy, etc.), the Commitments and any agreement in
any of the Financing Documents to provide additional credit and/or to issue
Letters of Credit shall immediately and automatically terminate and the unpaid
principal amount of the Notes (with accrued interest thereon) and all other
Obligations then outstanding, shall immediately become due and payable without
further action of any kind and without presentment, demand, protest or notice of
any kind, all of which are hereby expressly waived by the Borrowers.
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7.2.3 Performance by Administrative Agent.
If the Borrowers shall fail to pay the Obligations and the
Agents' Obligations or otherwise fail to perform, observe or comply with any of
the conditions, covenants, terms, stipulations or agreements contained in this
Agreement or any of the other Financing Documents, the Administrative Agent
without notice to or demand upon the Borrowers and without waiving or releasing
any of the Obligations or any Default or Event of Default, may (but shall be
under no obligation to) at any time thereafter make such payment or perform such
act for the account and at the expense of the Borrowers, and may enter upon the
premises of the Borrowers for that purpose and take all such action thereon as
the Administrative Agent may consider necessary or appropriate for such purpose
and each of the Borrowers hereby irrevocably appoints the Administrative Agent
as its attorney-in-fact to do so, with power of substitution, in the name of the
Administrative Agent, in the name of any or all of the Lenders, or in the name
of any or all of the Borrowers or otherwise, for the use and benefit of the
Administrative Agent, but at the cost and expense of the Borrowers and without
notice to the Borrowers. All sums so paid or advanced by the Administrative
Agent together with interest thereon from the date of payment, advance or
incurring until paid in full at the Post-Default Rate and all costs and
expenses, shall be deemed part of the Enforcement Costs, shall be paid by the
Borrowers to the Administrative Agent on demand, and shall constitute and become
a part of the Administrative Agent's Obligations.
7.2.4 Other Remedies.
The Administrative Agent may from time to time proceed to
protect or enforce the rights of the Administrative Agent and/or any of the
Lenders by an action or actions at law or in equity or by any other appropriate
proceeding, whether for the specific performance of any of the covenants
contained in this Agreement or in any of the other Financing Documents, or for
an injunction against the violation of any of the terms of this Agreement or any
of the other Financing Documents, or in aid of the exercise or execution of any
right, remedy or power granted in this Agreement, the Financing Documents,
and/or applicable Laws. The Administrative Agent and each of the Lenders is
authorized to offset and apply to all or any part of the Obligations all moneys,
credits and other property of any nature whatsoever of any or all of the
Borrowers now or at any time hereafter in the possession of, in transit to or
from, under the control or custody of, or on deposit with, the Administrative
Agent, any of the Lenders or any Affiliate of the Administrative Agent or any of
the Lenders.
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7.2.5 Recordation of Deeds of Trust.
Upon the occurrence of an Event of Default under Section
7.1.1 (Failure to Pay), Section 7.1.3 (Failure to Comply with Specific
Covenants), Section 7.1.6 (Receiver; Bankruptcy), Section 7.1.7 (Involuntary
Bankruptcy), Section 7.1.8 (Judgment), Section 7.1.9 (Default Under Other
Borrowings) or Section 7.1.13 (Liquidation, Termination, Dissolution), the
Administrative Agent shall be entitled to record immediately the Deeds of Trust,
at the expense of the Borrowers. Upon the occurrence of any Event of Default
under any provision of this Agreement other than those specifically identified
in the preceding sentence, with notice to the Borrowers, the Administrative
Agent shall record the Deeds of Trust, at the expense of the Borrowers thirty
(30) days after occurrence of the Event of Default (including all applicable
cure and grace periods).
ARTICLE VIII
THE ADMINISTRATIVE AGENT
Section 8.1 Appointment.
Each Lender hereby designates and appoints FMB as its Administrative
Agent under this Agreement and the Financing Documents, and each Lender hereby
irrevocably authorizes the Administrative Agent to take such action or to
refrain from taking such action on its behalf under the provisions of this
Agreement and the Financing Documents and to exercise such powers as are set
forth herein or therein, together with such other powers as are reasonably
incidental thereto. The Administrative Agent agrees to act as such on the
express conditions contained in this ARTICLE VIII. The provisions of this
ARTICLE VIII are solely for the benefit of the Administrative Agent and the
Lenders and neither the Borrowers nor any Person shall have any rights as a
third party beneficiary of any of the provisions hereof. In performing its
functions and duties under this Agreement, the Administrative Agent shall act
solely as an administrative representative of the Lenders and does not assume
and shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for the Lenders, the Borrowers or any Person. The
Administrative Agent may perform any of its duties hereunder, or under the
Financing Documents, by or through its agents or employees.
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Section 8.2 Nature of Duties.
8.2.1 In General
The Administrative Agent shall have no duties, obligations
or responsibilities except those expressly set forth in this Agreement or in the
Financing Documents. The duties of the Administrative Agent shall be mechanical
and administrative in nature. The Administrative Agent shall not have by reason
of this Agreement a fiduciary relationship in respect of any Lender. Each Lender
shall make its own independent investigation of the financial condition and
affairs of the Borrowers in connection with the extension of credit hereunder
and shall make its own appraisal of the credit worthiness of the Borrowers, and
the Administrative Agent shall have no duty or responsibility, either initially
or on a continuing basis, to provide any Lender with any credit or other
information with respect thereto, whether coming into its possession before the
Closing Date or at any time or times thereafter. If the Administrative Agent
seeks the consent or approval of any of the Lenders to the taking or refraining
from taking of any action hereunder, then the Administrative Agent shall send
notice thereof to each Lender. The Administrative Agent shall promptly notify
each Lender any time that the applicable percentage of Lenders has instructed
the Administrative Agent to act or refrain from acting pursuant hereto.
8.2.2 Express Authorization
The Administrative Agent is hereby expressly and irrevocably
authorized by each of the Lenders, as Administrative Agent on behalf of itself
and the other Lenders:
(a) to receive on behalf of each of the Lenders any payment
or collection on account of the Obligations and to distribute to each Lender its
Pro Rata Share of all such payments and collections so received as provided in
this Agreement;
(b) to receive all documents and items to be furnished to
the Lenders under the Financing Documents (nothing contained herein shall
relieve the Borrowers of any obligation to deliver any item directly to the
Lenders to the extent expressly required by the provisions of this Agreement);
(c) to act or refrain from acting in this Agreement and in
the other Financing Documents with respect to those matters so designated for
the Administrative Agent;
(d) to act as nominee for and on behalf of the Lenders in
and under this Agreement and the other Financing Documents;
(e) to arrange for the means whereby the funds of the
Lenders are to be made available to the Borrowers;
(f) to distribute promptly to the Lenders, if required by
the terms of this Agreement, all written information, requests, notices, Loan
Notices, payments,
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Prepayments, documents and other items received from the Borrowers or other
Person;
(g) to amend, modify, or waive any provisions of this
Agreement or the other Financing Documents on behalf of the Lenders subject to
the requirement that certain of the Lenders' consent be obtained in certain
instances as provided in 9.2.2 (Circumstances Where Consent of all of the
Lenders is Required) and in certain other provisions of this Agreement which
require the consent of the Requisite Lenders;
(h) to deliver to the Borrowers and other Persons, all
requests, demands, approvals, notices, and consents received from any of the
Lenders;
(i) to exercise on behalf of each Lender all rights and
remedies of the Lenders upon the occurrence of any Event of Default and/or
Default specified in this Agreement and/or in any of the other Financing
Documents or applicable Laws;
(j) to execute any of the Security Documents and any other
documents on behalf of the Lenders as the secured party for the benefit of the
Administrative Agent and the Lenders; and
(k) to take such other actions as may be requested by the
Requisite Lenders.
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Section 8.3 Rights, Exculpation, Etc.
Neither the Administrative Agent nor any of its officers, directors,
employees or agents shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Financing Documents, or in
connection herewith or therewith, except that the Administrative Agent shall be
obligated on the terms set forth herein for performance of its express
obligations hereunder, and except that the Administrative Agent shall be liable
with respect to its own gross negligence or willful misconduct. The
Administrative Agent shall not be liable for any apportionment or distribution
of payments made by it in good faith and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Lender to whom payment was due but not made, shall be to recover
from the other Lenders any payment in excess of the amount to which they are
determined to be entitled (and such other Lenders hereby agree to return to such
Lender any such erroneous payments received by them). The Administrative Agent
agrees with each Lender to assist the Lenders in a reasonable manner in any
Lender's efforts to recover payments due to it from one or more of the Lenders.
The Administrative Agent shall not be responsible to any Lender for any
recitals, statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectible, or
sufficiency of this Agreement or any of the Financing Documents or the
transactions contemplated thereby, or for the financial condition of any Person.
The Administrative Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Financing Documents or the financial
condition of any Person, or the existence or possible existence of any Default
or Event of Default. The Administrative Agent may at any time request
instructions from the Lenders with respect to any actions or approvals which by
the terms of this Agreement or of any of the Financing Documents the
Administrative Agent is permitted or required to take or to grant, and the
Administrative Agent shall be absolutely entitled to refrain from taking any
action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from any action or withholding any
approval under any of the Financing Documents until it shall have received such
instructions from the applicable percentage of the Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against the
Administrative Agent as a result of the Administrative Agent acting or
refraining from acting under this Agreement or any of the other Financing
Documents in accordance with the instructions of the applicable percentage of
the Lenders and notwithstanding the instructions of the Lenders, the
Administrative Agent shall have no obligation to take any action if it, in good
faith, believes that such action exposes the Administrative Agent to any
liability and the Administrative Agent provides justification for its refusal to
the Lenders.
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Section 8.4 Reliance.
The Administrative Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents or any telephone
message or other communication (including any writing, telex, telecopy or
telegram) believed by it in good faith to be genuine and correct and to have
been signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Financing Documents and its duties
hereunder or thereunder, upon advice of counsel selected by it. The
Administrative Agent may deem and treat the original Lenders as the owners of
the respective Notes for all purposes until receipt by the Administrative Agent
of a written notice of assignment, negotiation or transfer of any interest
therein by the Lenders in accordance with the terms of this Agreement. Any
interest, authority or consent of any holder of any of the Notes shall be
conclusive and binding on any subsequent holder, transferee, or assignee of such
Notes. The Administrative Agent shall be entitled to rely upon the advice of
legal counsel, independent accountants, and other experts selected by the
Administrative Agent in its sole discretion.
Section 8.5 Indemnification.
Each Lender, severally, agrees to reimburse and indemnify the
Administrative Agent for and against any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses, advances
or disbursements including, without limitation, Enforcement Costs, of any kind
or nature whatsoever which may be imposed on, incurred by, or asserted against
the Administrative Agent in any way relating to or arising out of this Agreement
or any of the Financing Documents or any action taken or omitted by the
Administrative Agent under this Agreement for any of the Financing Documents, in
proportion to each Lender's Pro Rata Share, all of the foregoing as they may
arise, be asserted or be imposed from time to time; provided, however, that no
Lender shall be liable for any portion of such liabilities, obligations, losses,
damages, penalties, actions, judgments, suits, costs, expenses, advances or
disbursements resulting from the Administrative Agent's gross negligence or
willful misconduct. The obligations of the Lenders under this Section 8.5 shall
survive the payment in full of the Obligations and the termination of this
Agreement.
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Section 8.6 FMB Individually.
With respect to its Commitments and the Revolving Loan made by it, and
the Notes issued to it, FMB shall have and may exercise the same rights and
powers hereunder and is subject to the same obligations and liabilities as and
to the extent set forth herein for any other Lender. The terms "the Lenders" or
"Requisite Lenders" or any similar terms shall, unless the context clearly
otherwise indicates, include FMB in its individual capacity as a Lender or one
of the Requisite Lenders. FMB and its Affiliates may lend money to, accept
deposits from and generally engage in any kind of banking, trust or other
business with the Borrowers, any Affiliate of either Borrower, or any other
Person or any of their officers, directors and employees as if FMB were not
acting as the Administrative Agent pursuant hereto and the Administrative Agent
may accept fees and other consideration from the Borrowers, any Affiliate of the
Borrowers or any of their officers, directors and employees (in addition to the
Agency Fees or other arrangement fees heretofore agreed to between the Borrowers
and the Administrative Agent) for services in connection with this Agreement or
otherwise without having to account for or share the same with the Lenders.
Section 8.7 Successor Administrative Agent.
8.7.1 Resignation.
The Administrative Agent may resign from the performance of
all its functions and duties hereunder at any time by giving at least thirty
(30) Business Days' prior written notice to the Borrowers and the Lenders. Such
resignation shall take effect upon the acceptance by a successor Administrative
Agent of appointment pursuant to Section 8.7.2 (Appointment of Successor) or as
otherwise provided below.
8.7.2 Appointment of Successor.
Upon any such notice of resignation pursuant to Section
8.7.1 (Resignation), the Requisite Lenders shall appoint a successor to the
Administrative Agent. If a successor to the Administrative Agent shall not have
been so appointed within said thirty (30) Business Day period, the
Administrative Agent retiring, upon notice to the Borrowers, shall then appoint
a successor Administrative Agent who shall serve as the Administrative Agent
until such time, as the Requisite Lenders appoint a successor the Administrative
Agent as provided above.
8.7.3 Successor Administrative Agent.
Upon the acceptance of any appointment as the Administrative
Agent under the Financing Documents by a successor Administrative Agent, such
successor to the Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the Administrative
Agent retiring, and the Administrative Agent retiring shall be discharged from
its duties and obligations under the Financing Documents. After any
Administrative Agent's resignation as the Administrative Agent under the
Financing Documents, the provisions of this ARTICLE VIII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was the
Administrative Agent under the Financing Documents.
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Section 8.8 Administrative Agency Fee.
The Borrowers shall pay to the Administrative Agent a loan
administration and agency fee (collectively, the "Administrative Agency Fees"
and individually, an "Administrative Agency Fee") in accordance with the terms
and provisions of the Agency Letter Agreement dated January 8, 1999 by and
between the Borrowers and the Administrative Agent.
Section 8.9 Exercise of Remedies.
Each Lender agrees that it will not have any right individually to
enforce or seek to enforce this Agreement or any Financing Document or to
realize upon any collateral security for the Commitments, it being understood
and agreed that such rights and remedies may be exercised only by the
Administrative Agent.
Section 8.10 Consents.
(a) In the event the Administrative Agent requests the consent
of a Lender and does not receive a written denial thereof, or a written notice
from a Lender that due course consideration of the request requires additional
time, in each case, within ten (10) Business Days after such Lender's receipt of
such request, then such Lender will be deemed to have given such consent.
(b) In the event the Administrative Agent requests the consent
of a Lender and such consent is denied, then FMB may, at its option, require
such Lender to assign its interest in the Revolving Loan to FMB for a price
equal to the then outstanding principal amount thereof plus accrued and unpaid
interest, fees and costs and expenses due such Lender under the Financing
Documents, which principal, interest, fees and costs and expenses will be paid
on the date of such assignment. In the event that FMB elects to require any
Lender to assign its interest to FMB, FMB will so notify such Lender in writing
within thirty (30) days following such Lender's denial, and such Lender will
assign its interest to FMB no later than five (5) days following receipt of such
notice.
Section 8.11 Dissemination of Information.
The Administrative Agent will provide the Lenders with any information
received by the Administrative Agent from the Borrowers which is required to be
provided to the Administrative Agent or to the Lenders hereunder; provided,
however, that the Administrative Agent shall not be liable to any one or more
the Lenders for any failure to do so, except to the extent that such failure is
attributable to the Administrative Agent's gross negligence or willful
misconduct.
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ARTICLE IX
MISCELLANEOUS
Section 9.1 Notices.
All notices, requests and demands to or upon the parties to this
Agreement shall be in writing and shall be deemed to have been given or made
when delivered by hand on a Business Day, or two (2) days after the date when
deposited in the mail, postage prepaid by registered or certified mail, return
receipt requested, or when sent by overnight courier, on the Business Day next
following the day on which the notice is delivered to such overnight courier,
addressed as follows:
Borrowers: Mid-Atlantic Realty Trust
MART Limited Partnership
170 West Ridgely Road, Suite 300
Lutherville, Maryland 21093
Attention: F. Patrick Hughes, President
Administrative
Agent: FMB Bank
25 South Charles Street, 12th Floor
P.O. Box 1596
Baltimore, Maryland 21203
Attention: David A. Kennedy
Mary Frances Isakov
Documentation
Agent: First Union National Bank
Real Estate Capital Markets
REIT Banking Group
One First Union Center, NC-01-66
Attention: Rex E. Rudy
Chevy Chase: Baltimore Business Group
Chevy Chase Bank, FSB
135 East Baltimore Street
Baltimore, Maryland 21201
Attention: Robert H. Newton, Jr.
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Provident: Provident Bank of Maryland
Real Estate Lending Division
114 East Lexington Street, 4th Floor
P.O. Box 1661
Baltimore, Maryland 21203-1661
Attention: Christopher M. Nevin
By written notice, each party to this Agreement may change the address
to which notice is given to that party, provided that such changed notice shall
include a street address to which notices may be delivered by overnight courier
in the ordinary course on any Business Day.
Section 9.2 Amendments; Waivers.
9.2.1 In General.
This Agreement and the other Financing Documents may not be
amended, modified, or changed in any respect except by an agreement in writing
signed by the Administrative Agent, the Requisite Lenders and the Borrowers,
and, to the extent provided in Section 9.2.2 (Circumstances Where Consent of all
of the Lenders is Required), by an agreement in writing signed by the
Administrative Agent, all of the Lenders and the Borrowers. No waiver of any
provision of this Agreement or of any of the other Financing Documents, nor
consent to any departure by the Borrowers therefrom, shall in any event be
effective unless the same shall be in writing signed by the Requisite Lenders.
No course of dealing between the Borrowers and the Administrative Agent and/or
any of the Lenders and no act or failure to act from time to time on the part of
the Administrative Agent and/or any of the Lenders shall constitute a waiver,
amendment or modification of any provision of this Agreement or any of the other
Financing Documents or any right or remedy under this Agreement, under any of
the other Financing Documents or under applicable Laws. Without implying any
limitation on the foregoing, and subject to the provisions of Section 9.2.2
(Circumstances Where Consent of all of the Lenders is Required):
(a) Any waiver or consent shall be effective only in
the specific instance, for the terms and purpose for which
given, subject to such conditions as the Administrative
Agent and Lenders may specify in any such instrument.
(b) No waiver of any Default or Event of Default shall
extend to any subsequent or other Default or Event of
Default, or impair any right consequent thereto.
(c) No notice to or demand on the Borrowers in any case
shall entitle the Borrowers to any other or further notice
or demand in the same, similar or other circumstance.
(d) No failure or delay by the Lenders to insist upon
the
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strict performance of any term, condition, covenant or agreement
of this Agreement or of any of the other Financing Documents, or
to exercise any right, power or remedy consequent upon a breach
thereof, shall constitute a waiver, amendment or modification of
any such term, condition, covenant or agreement or of any such
breach or preclude the Lenders from exercising any such right,
power or remedy at any time or times.
(e) By accepting payment after the due date of any
amount payable under this Agreement or under any of the
other Financing Documents, the Lenders shall not be deemed
to waive the right either to require prompt payment when due
of all other amounts payable under this Agreement or under
any of the other Financing Documents, or to declare a
default for failure to effect such prompt payment of any
such other amount.
9.2.2 Circumstances Where Consent of all of the Lenders is
Required.
Notwithstanding anything to the contrary contained herein,
no amendment, modification, change or waiver shall be effective without the
consent of all of the Lenders to:
(a) extend the maturity of the principal of, or
interest on, any Note or of any of the other Obligations;
(b) reduce the principal amount of any Note or of any
of the other Obligations, the rate of interest thereon or
the Fees due to the Lenders, except as expressly permitted
therein;
(c) change the aggregate Commitments;
(d) change the date of payment of principal of, or
interest on, any Note or of any of the other Obligations;
(e) change the method of calculation utilized in
connection with the computation of interest and Fees;
(f) change the manner of pro rata application by the
Administrative Agent of payments made by the Borrowers, or
any other payments required hereunder or under the other
Financing Documents;
(g) modify this Section, Section 8.11 (Dissemination of
Information), or the definition of "Requisite Lenders";
(h) release or agree to subordinate any material
portion of any collateral or Financing Document (except to
the extent provided herein or therein); or
(i) waive the performance, observance or compliance
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with or amend Section 6.1.14 (Financial Covenants) or
Section 6.2 (Negative Covenants).
Additionally, no change may be made to the amount of a Lender's
Commitment or to the Lender's percentage of all Commitments without the prior
written consent of that Lender.
Section 9.3 Cumulative Remedies.
The rights, powers and remedies provided in this Agreement and in the
other Financing Documents are cumulative, may be exercised concurrently or
separately, may be exercised from time to time and in such order as the
Administrative Agent shall determine, subject to the provisions of this
Agreement, and are in addition to, and not exclusive of, rights, powers and
remedies provided by existing or future applicable Laws. In order to entitle the
Administrative Agent to exercise any remedy reserved to it in this Agreement, it
shall not be necessary to give any notice, other than such notice as may be
expressly required in this Agreement. Without limiting the generality of the
foregoing and subject to the terms of this Agreement, the Administrative Agent
may:
(a) proceed against either of the Borrowers with or without
proceeding against any other Person who may be liable (by endorsement, guaranty,
indemnity or otherwise) for all or any part of the Obligations;
(b) proceed against either of the Borrowers with or without
proceeding under any of the other Financing Documents or against any collateral
and security for all or any part of the Obligations;
(c) without reducing or impairing the obligation of the
Borrowers and without notice, release or compromise with any guarantor or other
Person liable for all or any part of the Obligations under the Financing
Documents or otherwise;
(d) without reducing or impairing the obligations of the
Borrowers and without notice thereof:
(i) fail to perfect the Lien in any or all collateral
or to release any or all collateral or to accept substitute
collateral;
(ii) approve the making of advances under the Revolving
Loan under this Agreement;
(iii) waive any provision of this Agreement or the
other Financing Documents;
(iv) exercise or fail to exercise rights of set-off or
other rights; or
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(v) accept partial payments or extend from time to time
the maturity of all or any part of the Obligations.
Section 9.4 Severability.
In case one or more provisions, or part thereof, contained in this
Agreement or in the other Financing Documents shall be invalid, illegal or
unenforceable in any respect under any Law, then without need for any further
agreement, notice or action:
(a) the validity, legality and enforceability of the
remaining provisions shall remain effective and binding on the parties thereto
and shall not be affected or impaired thereby;
(b) the obligation to be fulfilled shall be reduced to the
limit of such validity;
(c) if such provision or part thereof pertains to repayment
of the Obligations, then, at the sole and absolute discretion of the
Administrative Agent, all of the Obligations of the Borrowers to the Agents and
the Lenders shall become immediately due and payable; and
(d) if the affected provision or part thereof does not
pertain to repayment of the Obligations, but operates or would prospectively
operate to invalidate this Agreement in whole or in part, then such provision or
part thereof only shall be void, and the remainder of this Agreement shall
remain operative and in full force and effect.
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Section 9.5 Assignments by Lenders.
Any Lender may, with the prior written consent of the Administrative
Agent (which consent shall not be unreasonably withheld), but without notice to
or consent of the Borrowers, assign to any Eligible Assignee (each an "Assignee"
and collectively, the "Assignees") all or a portion of such Lender's
Commitments; provided that, after giving effect to such assignment, such Lender
must continue to hold a Pro Rata Share of the Commitments at least equal to
fifty percent (50%) of its Pro Rata Share of the Commitments as of the date
hereof and the minimum amount which may be assigned shall be Five Million
Dollars ($5,000,000). Any Lender that elects to make such an assignment shall
pay to the Administrative Agent, for the exclusive benefit of the Administrative
Agent, an administrative fee for processing each such assignment in the amount
of Three Thousand Five Hundred Dollars ($3,500.00). Such Lender and its Assignee
shall notify the Administrative Agent and the Borrowers in writing of the date
on which the assignment is to be effective (the "Adjustment Date"). On or before
the Adjustment Date, the assigning Lender, the Administrative Agent, the
Borrowers and the respective Assignee shall execute and deliver a written
assignment agreement in the form of EXHIBIT "E" attached hereto and made a part
hereof, which shall constitute an amendment to this Agreement to the extent
necessary to reflect such assignment. Upon the request of any assigning Lender
following an assignment made in accordance with this Section 9.5, the Borrowers
shall issue new Notes to the assigning Lender and its Assignee reflecting such
assignment, in exchange for the existing Notes held by the assigning Lender.
In addition, notwithstanding the foregoing, any Lender may at any time
pledge all or any portion of such Lender's rights under this Agreement, any of
the Commitments or any of the Obligations to a Federal Reserve Bank.
Section 9.6 Participations by Lenders.
-------------------------
Any Lender may at any time sell to one or more financial institutions
participating interests in any of such Lender's Obligations or Commitments;
provided, however, that (a) no such participation shall relieve such Lender from
its obligations under this Agreement or under any of the other Financing
Documents to which it is a party, (b) such Lender shall remain solely
responsible for the performance of its obligations under this Agreement and
under all of the other Financing Documents to which it is a party, and (c) the
Borrowers, the Administrative Agent and the other Lenders shall continue to deal
solely and directly with such Lender in connection with such Lender's rights and
obligations under this Agreement and the other Financing Documents.
Section 9.7 Disclosure of Information by Lenders.
-------------------------------------
In connection with any sale, transfer, assignment or participation by
any Lender in accordance with Section 9.5 (Assignments by Lenders) or Section
9.6 (Participations by Lenders), each Lender shall have the right to disclose to
any actual or potential purchaser, assignee, transferee or participant all
financial records, information, reports, financial statements and documents
obtained in connection with this Agreement and/or any of the other Financing
Documents or otherwise.
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Section 9.8 Successors and Assigns.
----------------------
This Agreement and all other Financing Documents shall be binding upon
and inure to the benefit of the Borrowers, the Administrative Agent and the
Lenders and their respective heirs, personal representatives, successors and
assigns, except that the Borrowers shall not have the right to assign their
rights hereunder or any interest herein without the prior written consent of the
Administrative Agent and the Requisite Lenders of the Lenders.
Section 9.9 Continuing Agreements.
---------------------
All covenants, agreements, representations and warranties made by the
Borrowers in this Agreement, in any of the other Financing Documents, and in any
certificate delivered pursuant hereto or thereto shall survive the making by the
Lenders of the Revolving Loan, the issuance of Letters of Credit by the
Administrative Agent and the execution and delivery of the Notes, shall be
binding upon the Borrowers regardless of how long before or after the date
hereof any of the Obligations were or are incurred, and shall continue in full
force and effect so long as any of the Obligations are outstanding and unpaid.
From time to time upon the Administrative Agent's request, and as a condition of
the release of any one or more of the Security Documents, the Borrowers and
other Persons obligated with respect to the Obligations shall provide the
Administrative Agent with such acknowledgments and agreements as the
Administrative Agent may require to the effect that there exists no defenses,
rights of setoff or recoupment, claims, counterclaims, actions or causes of
action of any kind or nature whatsoever against the Administrative Agent, any or
all of the Lenders, and/or any of its or their Administrative Agents and others,
or to the extent there are, the same are waived and released.
Section 9.10 Enforcement Costs.
-----------------
The Borrowers agree to pay to the Administrative Agent on demand all
Enforcement Costs, together with interest thereon from the date incurred or
advanced until paid in full at a per annum rate of interest equal at all times
to the Post-Default Rate. Enforcement Costs shall be immediately due and payable
at the time advanced or incurred, whichever is earlier. Without implying any
limitation on the foregoing, the Borrowers agree, as part of the Enforcement
Costs, to pay upon demand any and all recordation, stamp and other Taxes and
fees payable or determined to be payable in connection with the execution and
delivery of this Agreement and the other Financing Documents and to save the
Administrative Agent and the Lenders harmless from and against any and all
liabilities with respect to or resulting from any delay in paying or omission to
pay any Taxes or fees referred to in this Section. The provisions of this
Section shall survive the execution and delivery of this Agreement, the
repayment of the other Obligations and shall survive the termination of this
Agreement.
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Section 9.11 Applicable Law; Jurisdiction.
9.11.1 Applicable Law.
As a material inducement to the Agents and the Lenders to
enter into this Agreement, each of the Borrowers acknowledges and agrees that
the Financing Documents, including, this Agreement, shall be governed by the
Laws of the State, as if each of the Financing Documents and this Agreement had
each been executed, delivered, administered and performed solely within the
State even though for the convenience and at the request of the Borrowers, one
or more of the Financing Documents may be executed elsewhere. The Agents and the
Lenders acknowledge, however, that remedies under certain of the Financing
Documents that relate to property outside the State may be subject to the laws
of the state in which the property is located.
9.11.2 Submission to Jurisdiction.
Each of the Borrowers irrevocably submits to the
jurisdiction of any state or federal court sitting in the State over any suit,
action or proceeding arising out of or relating to this Agreement or any of the
other Financing Documents. Each of the Borrowers irrevocably waives, to the
fullest extent permitted by law, any objection that it may now or hereafter have
to the laying of the venue of any such suit, action or proceeding brought in any
such court and any claim that any such suit, action or proceeding brought in any
such court has been brought in an inconvenient forum. Final judgment in any such
suit, action or proceeding brought in any such court shall be conclusive and
binding upon the Borrowers and may be enforced in any court in which the
Borrowers are subject to jurisdiction, by a suit upon such judgment, provided
that service of process is effected upon the Borrowers in one of the manners
specified in this Section or as otherwise permitted by applicable Laws.
9.11.3 Service of Process.
Each of the Borrowers hereby consents to process being
served in any suit, action or proceeding of the nature referred to in this
Section by the mailing of a copy thereof by registered or certified mail,
postage prepaid, return receipt requested, to the Borrower at the Borrower's
address designated in or pursuant to Section 9.1 (Notices). The Borrowers
irrevocably agree that such service (y) shall be deemed in every respect
effective service of process upon the Borrowers in any such suit, action or
proceeding, and (z) shall, to the fullest extent permitted by law, be taken and
held to be valid personal service upon the Borrowers. Nothing in this Section
shall affect the right of the Administrative Agent to serve process in any
manner otherwise permitted by law or limit the right of the Administrative Agent
otherwise to bring proceedings against the Borrowers in the courts of any
jurisdiction or jurisdictions.
Section 9.12 Duplicate Originals and Counterparts.
------------------------------------
This Agreement may be executed in any number of duplicate originals or
counterparts, each of such duplicate originals or counterparts shall be deemed
to be an original and all taken together shall constitute but one and the same
instrument.
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Section 9.13 Headings.
The headings in this Agreement are included herein for convenience
only, shall not constitute a part of this Agreement for any other purpose, and
shall not be deemed to affect the meaning or construction of any of the
provisions hereof.
Section 9.14 No Agency.
Nothing herein contained shall be construed to constitute the Borrowers
as the Administrative Agent of the Administrative Agent or any of the Lenders
for any purpose whatsoever or to permit the Borrowers to pledge any of the
credit of the Administrative Agent or any of the Lenders. Neither the
Administrative Agent nor any of the Lenders shall be responsible or liable for
any shortage, discrepancy, damage, loss or destruction of any part of any
collateral wherever the same may be located and regardless of the cause thereof.
Neither the Administrative Agent nor any of the Lenders shall, by anything
herein or in any of the Financing Documents or otherwise, assume either of the
Borrowers' obligations under any contract or agreement assigned to the
Administrative Agent and/or the Lenders, and neither the Administrative Agent
nor any of the Lenders shall be responsible in any way for the performance by
the Borrowers of any of the terms and conditions thereof.
Section 9.15 Date of Payment.
---------------
Should the principal of or interest on the Notes become due and payable
on other than a Business Day, the maturity thereof shall be extended to the next
succeeding Business Day and in the case of principal, interest shall be payable
thereon at the rate per annum specified in the Notes during such extension.
Section 9.16 Entire Agreement.
----------------
This Agreement is intended by the Administrative Agent, the Lenders and
the Borrowers to be a complete, exclusive and final expression of the agreements
contained herein. Neither the Administrative Agent, the Lenders nor the
Borrowers shall hereafter have any rights under any prior agreements pertaining
to the matters addressed by this Agreement but shall look solely to this
Agreement for definition and determination of all of their respective rights,
liabilities and responsibilities under this Agreement.
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Section 9.17 Waiver of Trial by Jury.
------------------------
THE BORROWERS, THE ADMINISTRATIVE AGENT AND THE LENDERS HEREBY JOINTLY
AND SEVERALLY WAIVE TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO WHICH THE
BORROWERS, OR EITHER OF THEM, AND THE ADMINISTRATIVE AGENT AND/OR ANY OR ALL OF
THE LENDERS MAY BE PARTIES, ARISING OUT OF OR IN ANY WAY PERTAINING TO (A) THIS
AGREEMENT, (B) ANY OF THE FINANCING DOCUMENTS, OR (C) ANY COLLATERAL. THIS
WAIVER CONSTITUTES A WAIVER OF TRIAL BY JURY OF ALL CLAIMS AGAINST ALL PARTIES
TO SUCH ACTIONS OR PROCEEDINGS, INCLUDING CLAIMS AGAINST PARTIES WHO ARE NOT
PARTIES TO THIS AGREEMENT.
This waiver is knowingly, willingly and voluntarily made by the
Borrowers, the Administrative Agent and the Lenders, and the Borrowers, the
Administrative Agent and the Lenders hereby represent that no representations of
fact or opinion have been made by any individual to induce this waiver of trial
by jury or to in any way modify or nullify its effect. The Borrowers, the
Administrative Agent and the Lenders further represent that they have been
represented in the signing of this Agreement and in the making of this waiver by
independent legal counsel, selected of their own free will, and that they have
had the opportunity to discuss this waiver with counsel.
Section 9.18 Liability of the Administrative Agent and the Lenders.
------------------------------------------------------
The Borrowers hereby agree that neither the Administrative Agent nor
any of the Lenders shall be chargeable for any negligence, mistake, act or
omission of any accountant, examiner, agency or attorney employed by the
Administrative Agent and/or any of the Lenders in making examinations,
investigations or collections, or otherwise in perfecting, maintaining,
protecting or realizing upon any lien or security interest or any other interest
in any collateral or other security for the Obligations.
By accepting or approving anything required to be observed, performed
or fulfilled by the Borrowers or to be given to the Administrative Agent and/or
any of the Lenders pursuant to this Agreement or any of the other Financing
Documents, neither the Administrative Agent nor any of the Lenders shall be
deemed to have warranted or represented the condition, sufficiency, legality,
effectiveness or legal effect of the same, and such acceptance or approval shall
not constitute any warranty or representation with respect thereto by the
Administrative Agent and/or the Lenders.
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Section 9.19 Default By Related Entities.
---------------------------
A payment default or any other default by the Borrowers or any entity
in which one or more of them has a controlling interest with respect to any
Indebtedness for Borrowed Money which is non-recourse and secured solely by one
or more properties shall not constitute an Event of Default if (a) the default
does not cause an event of default under Section 6.1.14 (Financial Covenants),
(b) no assets other than the property or properties securing the indebtedness in
default is subject to recourse for payment of the indebtedness, and (c) the
Borrowers have promptly notified the Administrative Agent of the default and
provided the Administrative Agent a current Compliance Certificate in the form
of Exhibit B taking into account the default that has occurred and the impact of
the collection of the indebtedness by the lender to whom it is owed.
IN WITNESS WHEREOF, each of the parties hereto have executed and
delivered this Agreement under their respective seals as of the day and year
first written above.
WITNESS OR ATTEST: MID-ATLANTIC REALTY TRUST
_________________________ By:____________________________(Seal)
Paul F. Robinson
Vice President
WITNESS OR ATTEST: MART LIMITED PARTNERSHIP
By: Mid-Atlantic Realty Trust,
General Partner
_________________________ By:____________________________(Seal)
Paul F. Robinson
Vice President
88
<PAGE>
WITNESS: FMB BANK
in its capacity as Administrative Agent
_________________________ By:____________________________(Seal)
Mary Frances Isakov
Assistant Vice President
_________________________ By:____________________________(Seal)
David A. Kennedy
Vice President
Address: FMB Bank
25 South Charles Street,
12th Floor
P.O. Box 1596
Baltimore, Maryland 21203
Attention: David A. Kennedy
WITNESS: FMB BANK
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Mary Frances Isakov
Assistant Vice President
_________________________ By:____________________________(Seal)
David A. Kennedy
Vice President
Address: FMB Bank
25 South Charles Street,
12th Floor
P.O. Box 1596
Baltimore, Maryland 21203
Attention: David A. Kennedy
89
<PAGE>
WITNESS: FIRST UNION NATIONAL BANK
in its capacity as Documentation Agent
_________________________ By:____________________________(Seal)
Name:
Title:
Address: Real Estate Capital Markets
REIT Banking Group
One First Union Center,
NC-01-66
Attention: Rex E. Rudy
WITNESS: FIRST UNION NATIONAL BANK
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name:
Title:
Address: Real Estate Capital Markets
REIT Banking Group
One First Union Center,
NC-01-66
Attention: Rex E. Rudy
90
<PAGE>
WITNESS: PROVIDENT BANK OF MARYLAND
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Christopher M. Nevin
Vice President
Address: Provident Bank of Maryland
Real Estate Lending
Division
114 East Lexington Street,
4th Floor
P.O. Box 1661
Baltimore, Maryland 21203-1661
Attention: Christopher M. Nevin
91
<PAGE>
WITNESS: CHEVY CHASE BANK, FSB
in its capacity as a Lender
_________________________ By:____________________________(Seal)
Name:
Title:
Address: Baltimore Business Group
Chevy Chase Bank, FSB
135 East Baltimore Street
Baltimore, Maryland 21201
Attention: Robert H. Newton,
Jr.
92
<PAGE>
LIST OF EXHIBITS
Revolving Credit Note
Compliance Certificate
Financial Condition Certificate - Closing
Financial Condition Certificate - Post Closing
Assignment and Assumption Agreement
Financing Agreement
93
<PAGE>
LIST OF SCHEDULES
Schedule 3.1.9 Litigation
Schedule 3.1.12 Indebtedness for Borrowed Money
Schedule 4.1.6 Unencumbered Properties
94
<PAGE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
<S> <C>
ARTICLE I DEFINITIONS 1
Section 1.1 Certain Defined Terms. 1
Section 1.2 Accounting Terms and Other Definitional Provisions. 17
ARTICLE II THE CREDIT FACILITIES 17
Section 2.1 The Revolving Credit Facility. 17
2.1.1 Revolving Credit Facility. 17
2.1.2 Procedure for Making Advances Under the Revolving Loan; Lender Protection Loans. 18
2.1.3 Revolving Credit Notes. 19
2.1.4 Optional Prepayments of Revolving Loan. 20
2.1.5 Revolving Loan Account. 20
2.1.6 Revolving Credit Unused Line Fee. 20
2.1.7 Cancellation Fee. 21
Section 2.2 The Letter of Credit Facility. 21
2.2.1 Letters of Credit. 21
2.2.2 Letter of Credit Fees. 21
2.2.3 Terms of Letters of Credit; Post-Termination Date Letters of Credit. 22
2.2.4 Procedures for Letters of Credit. 23
2.2.5 Payments of Letters of Credit. 23
2.2.6 Change in Law; Increased Cost. 24
2.2.7 General Letter of Credit Provisions. 25
2.2.8 Participations in the Letters of Credit. 26
2.2.9 Payments by the Lenders to the Administrative Agent. 26
Section 2.3 General Financing Provisions. 27
2.3.1 Borrowers' Representatives. 27
2.3.2 Computation of Interest and Fees. 29
2.3.3 Commitment Fee. 29
2.3.4 Extension Fee. 29
2.3.5 Payments. 29
2.3.6 Liens; Setoff. 29
2.3.7 Requirements of Law. 30
2.3.8 Guaranty. 30
Section 2.4 Interest. 33
2.4.1 Applicable Interest Rates. 33
2.4.2 Selection of Interest Rates. 34
2.4.3 Inability to Determine Eurodollar Base Rate. 36
2.4.4 Indemnity. 36
2.4.5 Payment of Interest. 37
Section 2.5 Settlement Among Lenders. 37
2.5.1 Revolving Loan. 37
2.5.2 Settlement Procedures as to Revolving Loan. 38
2.5.3 Settlement of Other Obligations. 40
2.5.4 Presumption of Payment. 41
i
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
ARTICLE III REPRESENTATIONS AND WARRANTIES 42
Section 3.1 Representations and Warranties. 42
3.1.1 Standing. 42
3.1.2 Power and Authority. 42
3.1.3 Binding Agreements. 42
3.1.4 No Conflicts. 42
3.1.5 No Defaults, Violations. 43
3.1.6 Compliance with Laws. 43
3.1.7 Margin Stock. 43
3.1.8 Investment Company Act; Margin Securities. 43
3.1.9 Litigation. 44
3.1.10 Financial Condition. 44
3.1.11 Full Disclosure. 44
3.1.12 Indebtedness for Borrowed Money. 44
3.1.13 Taxes. 45
3.1.14 ERISA. 45
3.1.15 Title to Properties. 45
3.1.16 Presence of Hazardous Materials or Hazardous Materials Contamination. 46
3.1.17 Year 2000 Representations and Warranties. 46
Section 3.2 Survival; Updates of Representations and Warranties. 46
ARTICLE IV CONDITIONS PRECEDENT 47
Section 4.1 Conditions to the Initial Advance and Initial Letter of Credit. 47
4.1.1 Organizational Documents - Borrowers. 47
4.1.2 Opinion of Borrowers' Counsel. 48
4.1.3 Consents, Licenses, Approvals, Etc. 48
4.1.4 Notes. 48
4.1.5 Financing Documents. 49
4.1.6 Unencumbered Properties. 49
4.1.7 Other Financing Documents. 50
4.1.8 Other Documents, Etc. 50
4.1.9 Payment of Fees. 50
4.1.10 Solvency. 50
4.1.11 Letters of Credit. 50
Section 4.2 Conditions to all Extensions of Credit. 51
4.2.1 Compliance. 51
4.2.2 Default. 51
4.2.3 Representations and Warranties. 51
4.2.4 Adverse Change. 51
4.2.5 Legal Matters. 51
ARTICLE V Unencumbered Properties. 51
Section 5.1 Unencumbered Properties as of the Closing Date. 51
Section 5.2 Addition of Unencumbered Properties 52
Section 5.3 Removal of Properties from the Unencumbered Properties. 52
ARTICLE VI COVENANTS OF THE BORROWERS 52
Section 6.1 Affirmative Covenants. 52
6.1.1 Financial Statements. 52
ii
<PAGE>
6.1.2 Reports to SEC and to Stockholders. 54
6.1.3 Recordkeeping, Rights of Inspection, Etc. 54
6.1.4 REIT Existence. 54
6.1.5 Partnership Existence. 55
6.1.6 Compliance with Laws. 55
6.1.7 Preservation of Properties. 55
6.1.8 Line of Business. 55
6.1.9 Insurance. 55
6.1.10 Taxes. 56
6.1.11 ERISA. 56
6.1.12 Notification of Events of Default and Adverse Developments. 56
6.1.13 Hazardous Materials; Contamination. 57
6.1.14 Financial Covenants. 58
6.1.15 Investments in Real Estate Assets. 59
6.1.16 Deeds of Trust a Contemporaneous Exchange; Financial Condition Certificates. 59
6.1.17 Deeds of Trust. 59
Section 6.2 Negative Covenants. 59
6.2.1 Merger, Acquisition or Sale of Assets. 60
6.2.2 Indebtedness. 60
6.2.3 Loans and Other Transactions. 60
6.2.4 Distributions. 61
6.2.5 Liens. 61
6.2.6 Transactions with Affiliates. 61
6.2.7 Other Businesses. 61
6.2.8 ERISA Compliance. 61
6.2.9 Prohibition on Hazardous Materials. 61
6.2.10 Amendments. 62
6.2.11 Method of Accounting; Fiscal Year. 62
ARTICLE VII DEFAULT AND RIGHTS AND REMEDIES 62
Section 7.1 Events of Default. 62
7.1.1 Failure to Pay. 62
7.1.2 Breach of Representations and Warranties. 62
7.1.3 Failure to Comply with Specific Covenants. 63
7.1.4 Failure to Comply with Other Covenants. 63
7.1.5 Default Under Other Financing Documents or Obligations. 63
7.1.6 Receiver; Bankruptcy. 63
7.1.7 Involuntary Bankruptcy, etc. 63
7.1.8 Judgment. 64
7.1.9 Default Under Other Borrowings. 64
7.1.10 Challenge to Agreements. 64
7.1.11 Material Adverse Change. 64
7.1.12 Impairment of Position. 64
7.1.13 Liquidation, Termination, Dissolution, Change in Management, etc. 65
Section 7.2 Remedies. 65
7.2.1 Acceleration. 65
7.2.2 Further Advances. 65
7.2.3 Performance by Administrative Agent. 65
7.2.4 Other Remedies. 66
7.2.5 Recordation of Deeds of Trust. 66
iii
<PAGE>
ARTICLE VIII THE ADMINISTRATIVE AGENT 67
Section 8.1 Appointment. 67
Section 8.2 Nature of Duties. 67
8.2.1 In General 67
8.2.2 Express Authorization 67
Section 8.3 Rights, Exculpation, Etc. 68
Section 8.4 Reliance. 69
Section 8.5 Indemnification. 70
Section 8.6 FMB Individually. 70
Section 8.7 Successor Administrative Agent. 70
8.7.1 Resignation. 70
8.7.2 Appointment of Successor. 70
8.7.3 Successor Administrative Agent. 71
Section 8.8 Administrative Agency Fee. 71
Section 8.9 Exercise of Remedies. 71
Section 8.10 Consents. 71
Section 8.11 Dissemination of Information. 72
ARTICLE IX MISCELLANEOUS 72
Section 9.1 Notices. 72
Section 9.2 Amendments; Waivers. 73
9.2.1 In General. 73
9.2.2 Circumstances Where Consent of all of the Lenders is Required. 74
Section 9.3 Cumulative Remedies. 75
Section 9.4 Severability. 76
Section 9.5 Assignments by Lenders. 76
Section 9.6 Participations by Lenders. 77
Section 9.7 Disclosure of Information by Lenders. 77
Section 9.8 Successors and Assigns. 77
Section 9.9 Continuing Agreements. 77
Section 9.10 Enforcement Costs. 78
Section 9.11 Applicable Law; Jurisdiction. 78
9.11.1 Applicable Law. 78
9.11.2 Submission to Jurisdiction. 78
9.11.3 Service of Process. 79
Section 9.12 Duplicate Originals and Counterparts. 79
Section 9.13 Headings. 79
Section 9.14 No Agency. 79
Section 9.15 Date of Payment. 79
Section 9.16 Entire Agreement. 80
Section 9.17 Waiver of Trial by Jury. 80
Section 9.18 Liability of the Administrative Agent and the Lenders. 80
Section 9.19 Default By Related Entities. 81
</TABLE>
iv
<PAGE>
$75,000,000 CREDIT FACILITIES
FINANCING AGREEMENT
Dated April 23, 1999
By and Between
MID-ATLANTIC REALTY TRUST,
MART LIMITED PARTNERSHIP
And
FMB BANK,
as Administrative Agent
And
FIRST UNION NATIONAL BANK,
as Documentation Agent
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
(Replace this text with the legend)
</LEGEND>
<CIK> 000909298
<NAME> Mid-Atlantic Realty Trust
<MULTIPLIER> 1,000
<CURRENCY> U.S. DOLLARS
<S> <C> <C> <C>
<PERIOD-TYPE> 3-MOS YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1999 DEC-31-1996 DEC-31-1995
<PERIOD-END> MAR-31-1999 DEC-31-1996 DEC-31-1995
<EXCHANGE-RATE> 1 1 1
<CASH> 1,207 1,014 514
<SECURITIES> 0 0 0
<RECEIVABLES> 1,124 1,373 2,351
<ALLOWANCES> 0 0 0
<INVENTORY> 0 0 0
<CURRENT-ASSETS> 0 0 0
<PP&E> 322,612 167,556 174,392
<DEPRECIATION> 52,837 42,702 39,430
<TOTAL-ASSETS> 328,530 173,278 182,521
<CURRENT-LIABILITIES> 0 0 0
<BONDS> 149,807 117,405 122,391
0 0 0
0 0 0
<COMMON> 143 72 60
<OTHER-SE> 98,410 30,739 20,878
<TOTAL-LIABILITY-AND-EQUITY> 328,530 173,278 182,521
<SALES> 0 0 0
<TOTAL-REVENUES> 13,022 32,406 29,593
<CGS> 0 0 0
<TOTAL-COSTS> 9,048 28,684 26,431
<OTHER-EXPENSES> 799 514 718
<LOSS-PROVISION> 0 0 0
<INTEREST-EXPENSE> 3,233 12,354 11,928
<INCOME-PRETAX> 3,175 3,509 3,165
<INCOME-TAX> 0 0 0
<INCOME-CONTINUING> 3,175 3,509 3,165
<DISCONTINUED> 0 0 0
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 612
<NET-INCOME> 3,175 3,509 3,777
<EPS-PRIMARY> 0.22 0.56 0.61
<EPS-DILUTED> 0.22 0.56 0.66
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