UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 8-K/A
CURRENT REPORT
Pursuant to Section 13 OR 15(b) of The Securities Exchange Act of 1934
Date of Report (Date of earliest event reported) January 20, 1998 (November 6,
1997)___________
001-12910
(Commission File Number)
Storage USA, Inc.
(Exact name of registrant as specified in its charter)
Tennessee 62-1251239
State or other jurisdiction of (I.R.S. Employer
incorporation or organization Identification Number)
10440 Little Patuxent Parkway, Columbia, Maryland 21044
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (410) 730-9500
<PAGE>
Note: The purpose of this amendment to the Current Report on Form 8-K/A filed on
November 25, 1997, which amended the registrant's Current Report on Form 8-K
dated November 21, 1997, is to include audited historical summaries for certain
facilities for which only unaudited historical information was available on the
date of such report. This amendment also reports the acquisition of four
facilities acquired subsequent to November 25, 1997 and reflects the closing of
certain pending acquisitions reported on November 25, 1997.
Item 2: Acquisition or Disposition of Assets
Storage USA, Inc., (the "Company") consummated during the period October 29,
1997 through January 8, 1998, the acquisition of 48 self-storage facilities and
entered into an agreement to purchase an additional facility (the "Acquisition
Facilities") through SUSA Partnership, L.P. (the "Partnership"), a limited
partnership in which the Company serves as the sole general partner and owns
approximately a 91% interest as of the date of this report. The Acquisition
Facilities contain approximately 2,791,000 square feet, are located in 12 states
and were purchased for approximately $143,923,000 in aggregate consideration.
The acquisition of the Acquisition Facilities was funded by cash generated from
operations, the issuance of units of limited partnership interest in the
Partnership ("Units"), borrowings under the Company's lines of credit with The
First National Bank of Chicago and First Tennessee Bank, a $75,000,000 bridge
loan with First National Bank of Chicago and the assumption of a mortgage. Each
of the Acquisition Facilities was used by the seller as a self-storage facility
prior to its acquisition by the Company, and the Company intends to continue
such use of all the Acquisition Facilities. The Company's management determined
the contract price of each facility through arms-length negotiations, after
taking into consideration such factors as: the age and condition of the
facility; the projected amount of maintenance costs; anticipated capital
improvements; the facility's current revenues; comparable facilities competing
in the applicable market; market rental rates for comparable facilities; the
occupancy rate of the facility; and the estimated amount of taxes, utility
costs, personnel costs, and other anticipated expenses associated with the
facility. Other than changes in these factors, the Company, after reasonable
inquiry, is not aware of any material factors relating to the properties that
would cause the historical financial information provided in Item 7 not to be
necessarily indicative of future operating results for the applicable
facilities.
The following provides certain additional information concerning the Acquisition
Facilities:
<TABLE>
<CAPTION>
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Acquisition Facilities:
Roseville, CA Michael & Lisa Douglas 10/29/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Phoenix, AZ The Holding Company 11/1/97
Clarksville, IN The Holding Company 11/1/97
Clarksville, IN The Holding Company 11/1/97
Columbus, IN The Holding Company 11/1/97
Greenwood, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
<CAPTION>
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Jeffersonville, IN The Holding Company 11/1/97
New Albany, IN The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Columbus, OH The Holding Company 11/1/97
Trotwood, OH The Holding Company 11/1/97
Memphis, TN The Holding Company 11/1/97
Indianapolis, IN The Holding Company 11/1/97
Stamford, CT Access Self Storage of Stamford, L.P. 11/4/97
Millville, NJ A.M.C. Self-Service Storage Co. and The Space Place, Inc. 11/6/97
Williamstown, NJ A.M.C. Self-Service Storage Co. and The Space Place, Inc. 11/6/97
Roseville, CA GUAT Warehouse, Limited Partnership, A Massachusetts Partnership 11/7/97
Spring Valley, CA ACC Storage Partners Limited 11/19/97
Clute, TX Brazosport Investments, Inc. 11/25/97
Houston, TX Lone Star Mini Storage, Inc. 12/9/97
Columbus, OH CPS Associates 12/19/97
Hilliard, OH Avery Road Investments, Inc. 12/19/97
Dublin, OH Avery Road Investments, Inc. 12/19/97
Worthington, OH Worthington Woods Associates, Ltd. 12/19/97
Alexandria, VA Arlington Storage Fund Ltd. 12/22/97
Falls Church, VA Arlington Storage Fund Ltd. 12/22/97
Wheaton, MD Arlington Storage Fund Ltd. 12/22/97
Dallas, TX Uptown Storage, L.P. 1/7/98
Pasadena, TX B.S.S. Pasadena, L.L.C. 1/8/98
Santa Fe, NM (1) ABC Self Storage Limited Co. 1/30/98
</TABLE>
(1) The Company has this facility under contract with an anticipated closing
date of January 30, 1998.
In addition, the Company acquired seven other facilities on November 1, 1997,
containing approximately 299,000 square feet and located in two states for a
cost of approximately $12,224,000 that are not included in the Historical
Summaries and are not deemed to be significant either individually or in the
aggregate. The following table provides certain additional information
concerning the seven other facilities.
<TABLE>
<CAPTION>
Location Seller Date of Acquisition
- -------- ------ -------------------
<S> <C>
Indianapolis, IN The Holding Company 11/1/97
Jeffersonville, IN The Holding Company 11/1/97
Jeffersonville, IN The Holding Company 11/1/97
New Albany, IN The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
Louisville, KY The Holding Company 11/1/97
</TABLE>
The following unaudited data related to the Acquisition Facilities is derived
from the Company's internal records as of the last day of the month following
closing, or the most current information available:
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- - ------------ --------- --------- ----- - -----
<S> <C>
Acquisition Facilities:
Roseville, CA (1) 70,010 $5.96 81% 87% 597 $2,850,000
Phoenix, AZ (1) 102,397 $6.49 78% 78% 894 $4,700,000
Phoenix, AZ (1) 52,575 $5.98 80% 82% 579 $1,634,000
Phoenix, AZ (1) 47,510 $6.64 80% 81% 405 $1,889,000
Phoenix, AZ (1) 35,519 $9.44 72% 73% 425 $1,932,000
Phoenix, AZ (1) 32,860 $9.55 88% 89% 422 $1,933,000
Clarksville, IN (1) 45,080 $5.77 77% 84% 415 $1,030,000
Clarksville, IN (1)(3) 39,880 $5.64 61% 68% 352 $193,000
Columbus, IN (2) 49,094 $5.76 68% 80% 383 $513,000
Greenwood, IN (1) 75,515 $5.99 83% 85% 476 $2,855,000
Indianapolis, IN (1) 38,893 $7.62 83% 82% 324 $1,314,000
Indianapolis, IN (1) 50,200 $8.22 65% 69% 576 $2,151,000
Indianapolis, IN (1) 95,540 $7.78 72% 74% 848 $4,519,000
Indianapolis, IN (1) 55,636 $9.26 87% 91% 470 $3,785,000
Indianapolis, IN (1) 60,825 $8.14 67% 73% 573 $2,392,000
Indianapolis, IN (1) 30,575 $9.90 69% 75% 294 $1,427,000
Indianapolis, IN (1) 38,305 $6.60 79% 87% 430 $960,000
Indianapolis, IN (1) 63,332 $6.15 73% 80% 578 $2,219,000
Indianapolis, IN (1) 39,045 $5.87 91% 96% 328 $1,162,000
Jeffersonville, IN (1) 42,820 $6.31 80% 88% 403 $1,183,000
New Albany, IN (1) 52,525 $5.51 81% 87% 403 $1,394,000
Louisville, KY (1) 28,000 $6.49 90% 96% 300 $751,000
Columbus, OH (1) 84,000 $7.10 76% 82% 776 $3,205,000
Columbus, OH (1) 59,825 $6.85 85% 92% 466 $2,822,000
Columbus, OH (1) 49,850 $8.19 84% 93% 413 $6,094,000
Columbus, OH (1) 61,700 $6.37 82% 87% 461 $2,392,000
Columbus, OH (1) 23,000 $6.32 71% 73% 178 $275,000
Columbus, OH (1) 75,950 $6.34 73% 78% 605 $3,204,000
Columbus, OH (1) 57,940 $6.32 65% 72% 322 $1,866,000
Trotwood, OH (1) 73,760 $7.66 78% 83% 551 $3,743,000
Memphis, TN (1) 54,200 $5.54 87% 92% 434 $1,604,500
Indianapolis, IN (1)(3) 20,274 $10.34 3% 9% 220 $2,000,000
Stamford, CT (1) 65,514 $21.82 89% 90% 728 $11,550,000
Millville, NJ (1) 50,750 $7.67 75% 75% 416 $1,412,500
Williamstown, NJ (1) 38,900 $9.75 82% 80% 341 $1,412,500
Roseville, CA (1) 79,025 $7.36 85% 95% 660 $3,400,000
Spring Valley, CA (1) 55,214 $8.73 65% 99% 745 $3,050,000
Clute, TX (1) 72,044 $6.98 49% 93% 583 $2,300,000
Houston, TX (1) 57,175 $12.42 27% 74% 503 $4,100,000
Columbus, OH (1) 67,109 $8.10 70% 73% 529 $2,920,000
Hilliard, OH (1) 70,395 $7.45 63% 70% 458 $2,700,000
Dublin, OH (1) 59,400 $7.72 85% 88% 407 $2,600,000
Worthington, OH (1)(3) 31,456 $7.96 64% 66% 255 $1,600,000
Alexandria, VA (2) 69,175 $14.96 79% 96% 869 $9,207,777
Falls Church, VA (2) 73,425 $13.92 66% 94% 701 $7,538,726
Wheaton, MD (2) 92,925 $12.73 71% 92% 872 $9,364,606
Dallas, TX (1) 69,755 $12.74 64% 48% 594 $4,500,000
</TABLE>
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- - ------------ --------- --------- ----- - -----
<S> <C>
Pasadena, TX (1) 47,916 $8.15 56% 70% 529 $2,375,000
Santa Fe, NM (1) 84,554 $7.62 65% 89% 614 $3,900,000
-----------------------------------------------------------------------------------
Total Acquisition Facilities 2,791,367 $8.33 73% 82% 24,705 $143,922,609
============= ========================
</TABLE>
(1) These facilities are included in the Group 1 Facilities Historical Summaries
of Combined Gross Revenue and Direct Operating Expenses, for which financial
information is audited for the year ended December 31, 1996.
(2) These facilities are included in the Group 2 Facilities Historical Summaries
of Combined Gross Revenue and Direct Operating Expenses, for which financial
information is unaudited for the year ended December 31, 1996.
(3) These facilities were developed properties that opened in 1995, 1996 or
1997.
In addition the Company has acquired seven other facilities. Financial data
other than that presented is not available for these facilities. The Company
believes that these facilities are not material either individually or in the
aggregate.
<TABLE>
<CAPTION>
Square Rent per Economic Physical Total Contract
Location Feet Square Foot Occupancy Occupancy Units Price
-------- ---- - ------------ --------- --------- ----- - -----
<S> <C>
Indianapolis, IN 49,222 $6.11 88% 90% 364 $1,891,000
Jeffersonville, IN 43,467 $6.10 81% 84% 399 $1,084,000
Jeffersonville, IN 39,450 $6.13 63% 67% 392 $524,000
New Albany, IN 33,250 $5.80 84% 94% 275 $678,000
Louisville, KY 27,760 $7.43 75% 78% 281 $2,242,000
Louisville, KY 29,784 $8.03 88% 95% 314 $3,102,000
Louisville, KY 75,715 $6.20 85% 92% 512 $2,703,000
----------------------------------------------------------------------------------------------
298,648 $7.10 76% 82% 2,537 $12,224,000
============== ==============================
</TABLE>
Certain Acquisition Facilities identified in Item 2 of this Form 8-K/A are not
included in the Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses ("Historical Summaries"). These facilities and other
unaudited facilities acquired during the year do not individually constitute
acquisitions of a "significant amount of assets" as defined under Item 2 of Form
8-K or Rule 3-14 of Regulation S-X.
The audited Historical Summaries included in this Form 8-K/A when aggregated
with all other audited Historical Summaries for 1997, included in previous Forms
8-K, cover a mathematical majority of all individually insignificant 1997
acquisitions, which audited Historical Summaries satisfy the requirements of
Rule 3-14 of Regulation S-X.
Item 5: Other Events
On December 23, 1997, the Company amended its unsecured revolving credit
facility with The First National Bank of Chicago, as agent for a syndicate of
lenders (the "Line of Credit") to increase the aggregate borrowing capacity from
$75,000,000 to $150,000,000. A copy of the Line of Credit is filed in exhibit
10.1.
Item 7: Financial Statements and Exhibits
(a) Financial Statements Applicable to Real Estate Properties Acquired
* Report of Independent Accountants.
* Group 1 Facilities Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses for the year ended
December 31, 1996 (Audited), and for the nine months ended
September 30, 1997 (Unaudited).
* Notes to Group 1 Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
* Group 2 Facilities Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses for the year ended
December 31, 1996 (Unaudited), and for the nine months ended
September 30, 1997 (Unaudited).
* Notes to Group 2 Historical Summaries of Combined Gross
Revenue and Direct Operating Expenses.
(b) Pro Forma Financial Information
* Unaudited Pro Forma Combined Condensed Balance Sheet as of
September 30, 1997.
* Unaudited Pro Forma Combined Condensed Statement of Operations
for the nine months ended September 30, 1997.
* Unaudited Pro Forma Combined Condensed Statement of
Operations for the year ended December 31, 1996.
* Notes to Unaudited Pro Forma Combined Condensed Financial
Statements.
(c) Exhibits
Exhibit Description
10.1 Amended and Restated Unsecured Revolving Credit
Agreement dated December 23, 1997.
23.1 Consent of Independent Accountants.
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Directors
and Shareholders of
Storage USA, Inc.
We have audited the accompanying Historical Summaries of
Combined Gross Revenue and Direct Operating Expenses (the "Historical
Summaries") for certain self-storage facilities (the "Group 1 Facilities")
described in Note 1 to the Historical Summaries for the year ended December 31,
1996. These Historical Summaries are the responsibility of the management of the
Group 1 Facilities. Our responsibility is to express an opinion on these
Historical Summaries based on our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the Historical Summaries are free
of material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the Historical Summaries. An audit
also includes assessing the accounting principles used and the significant
estimates made by management, as well as evaluating the overall presentation of
the Historical Summaries. We believe that our audits provide a reasonable basis
for our opinion.
The accompanying Historical Summaries were prepared for the
purposes of complying with the Rules and Regulations of the Securities and
Exchange Commission (for inclusion in the Form 8-K/A of Storage USA, Inc.) as
described in Note 1 to the Historical Summaries, and are not intended to be a
complete presentation of the Group 1 Facilities' revenues and expenses.
In our opinion, based on our audits, the Historical Summaries
referred to above present fairly, in all material respects, the combined gross
revenue and direct operating expenses described in Note 1 of the Group 1
Facilities for the year ended December 31, 1996, in conformity with generally
accepted accounting principles.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
January 20, 1998
<PAGE>
GROUP 1 FACILITIES
HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the For the
year ended nine months ended
December 31, September 30,
1996 1997
-------------------- ----------------------
(unaudited)
(note 2)
<S> <C>
Gross Revenue:
Rental revenue $14,476 $10,975
Other revenue 306 108
-------------------- ----------------------
Total gross revenue 14,782 11,083
-------------------- ----------------------
Direct Operating Expenses:
Property operations and maintenance 3,431 2,433
Real estate taxes 1,188 932
-------------------- ----------------------
Total direct operating expenses 4,619 3,365
-------------------- ----------------------
Gross revenue in excess of direct operating expenses $10,163 $7,718
==================== ======================
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO GROUP 1 FACILITIES
HISTORICAL SUMMARIES OF COMBINED
GROSS REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
1. Basis of Presentation
The Historical Summaries of Combined Gross Revenue and Direct Operating
Expenses (the "Historical Summaries") relate to the operation of the following
self-storage facilities ("Group 1 Facilities") which have been acquired or are
under contract to be acquired by Storage USA, Inc. (the "Company").
Group 1 Facilities
Number of Number of
Location Facilities Location Facilities
- ------------------------------------- --------------------------------------
Roseville, CA 2 Millville, NJ 1
Phoenix, AZ 5 Williamstown, NJ 1
Clarksville, IN 2 Spring Valley, CA 1
Greenwood, IN 1 Pasadena, TX 1
Indianapolis, IN 10 Clute, TX 1
Jeffersonville, IN 1 Houston, TX 1
New Albany, IN 1 Sante Fe, NM 1
Louisville, KY 1 Dallas, TX 1
Columbus, OH 8 Hilliard, OH 1
Trotwood, OH 1 Dublin, OH 1
Memphis, TN 1 Worthington, OH 1
Stamford, CT 1
The Historical Summaries for the Group 1 Facilities with a total
acquisition cost of $117,299 have been prepared pursuant to the Rules and
Regulations of the Securities and Exchange Commission for real estate operations
to be acquired. The Historical Summaries are not representative of the actual
operations for the periods presented, as certain expenses which may not be
comparable to the expenses expected to be incurred by the Company in the future
operations of the Group 1 Facilities have been excluded. Expenses excluded
consist of management fees, interest, depreciation and amortization,
professional fees and other indirect costs not directly related to the future
operations of the Group 1 Facilities. Rental income is recognized when due from
occupants. Expenses are recognized on the accrual basis.
2. Interim Periods
The unaudited interim Historical Summaries for the Group 1 Facilities
have been prepared on a basis consistent with the audited Historical Summaries.
In the opinion of management, all adjustments considered necessary for a fair
presentation are of a normal recurring nature and have been included. Operating
results for the nine months ended September 30, 1997 are not necessarily
indicative of future operating results.
<PAGE>
GROUP 2 FACILITIES
UNAUDITED HISTORICAL SUMMARIES OF COMBINED GROSS
REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
<TABLE>
<CAPTION>
For the For the
year ended nine months ended
December 31, September 30,
1996 1997
------------------------- -------------------------
(note 2)
<S> <C>
Gross Revenue:
Rental revenue $2,852 $2,102
Other revenue 32 18
-------------- ----------------
Total gross revenue 2,884 2,120
-------------- ----------------
Direct Operating Expenses:
Property operations and maintenance 480 319
Real estate taxes 202 151
-------------- ----------------
Total direct operating expenses 682 470
-------------- ----------------
Gross revenue in excess of direct operating expenses $2,202 $1,650
============== ================
See accompanying notes.
</TABLE>
<PAGE>
NOTES TO GROUP 2 FACILITIES
UNAUDITED HISTORICAL SUMMARIES OF COMBINED
GROSS REVENUE AND DIRECT OPERATING EXPENSES
(amounts in thousands)
1. Basis of Presentation
The Unaudited Historical Summaries of Combined Gross Revenue and Direct
Operating Expenses (the "Historical Summaries") relate to the operation of the
following self-storage facilities ("Group 2 Facilities") which have been
acquired by Storage USA, Inc. (the "Company").
Group 2 Facilities - Locations
Columbus, IN Falls Church, VA Alexandria, VA
Wheaton, MD
The Historical Summaries for the Group 2 Facilities, with a total
acquisition cost of $26,624 have been prepared pursuant to the Rules and
Regulations of the Securities and Exchange Commission for real estate operations
acquired or to be acquired. The Historical Summaries are not representative of
the actual operations for the periods presented, as certain expenses which may
not be comparable to the expenses expected to be incurred by the Company in the
future operations of the Group 2 Facilities have been excluded. Expenses
excluded consist of management fees, interest, depreciation and amortization,
professional fees and other indirect costs not directly related to the future
operations of the Group 2 Facilities. Rental Income is recognized when due from
occupants. Expenses are recognized on the accrual basis.
2. Interim Periods
The unaudited interim Historical Summaries have been prepared on a
basis consistent with the unaudited Historical Summaries for the year ended
December 31, 1996. In the opinion of management, all adjustments considered
necessary for a fair presentation are of a normal recurring nature and have been
included. Operating results for the nine months ended September 30, 1997 are not
necessarily indicative of future operating results.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED FINANCIAL INFORMATION
The following unaudited Pro Forma Combined Condensed Balance Sheet was
prepared as if the Acquisition Facilities were purchased on September 30, 1997.
The unaudited Pro Forma Combined Condensed Statements of Operations for the nine
months ended September 30, 1997, and for the year ended December 31, 1996, have
been prepared to reflect the acquisition of the Group 1 and Group 2 Facilities
as if the Group 1 and Group 2 Facilities and other previously reported
transactions had been consummated at the beginning of the respective periods
shown. The Pro Forma Combined Condensed Financial Information is based on the
historical financial statements included in the Company's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997, and the pro forma financial
information set forth in the footnotes to the financial statements included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996,
and should be read in conjunction with those financial statements and the notes
thereto. The Combined Condensed Pro Forma Financial Information is not
necessarily indicative of the financial position or results of operations which
actually would have occurred if such transactions had been consummated on the
dates described, nor does it purport to represent the Company's future financial
position or results of operations.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED BALANCE SHEET
as of September 30, 1997
(Unaudited)
(amounts in thousands)
<TABLE>
<CAPTION>
Historical Acquired and Pro Forma
Storage Acquisition Pro Forma Storage
USA, Inc. Facilities Adjustments USA, Inc.
--------------- -------------- --------------- --------------
<S> <C>
Assets:
Investment in storage facilities, net $1,026,303 $145,422 $1,171,725
Cash and equivalents 4,103 4,103
Other assets 41,450 41,450
--------------- -------------- --------------- --------------
Total assets $1,071,856 $145,422 - $1,217,278
=============== ============== =============== ==============
Liabilities and shareholders' equity
Line of credit borrowings $34,929 $137,083 $172,012
Mortgage notes payable 39,864 39,864
Notes payable 200,000 200,000
Accounts payable and accrued expenses 14,471 14,471
Rents received in advance 6,553 6,553
Dividend payable 16,445 16,445
Minority interest 90,989 4,791 95,780
--------------- -------------- --------------- --------------
Total liabilities
403,251 141,874 - 545,125
--------------- -------------- --------------- --------------
Shareholders' equity
Common stock 274 1 275
Paid-in capital 705,319 3,547 708,866
Notes receivable - officers (8,817) (8,817)
Accumulated deficit (15,831) (15,831)
Distributions in excess of net income (12,340) (12,340)
--------------- -------------- --------------- --------------
Total shareholders' equity 668,605 3,548 - 672,153
--------------- -------------- --------------- --------------
Total liabilities and shareholders'
equity $1,071,856 $145,422 - $1,217,278
=============== ============== =============== ==============
</TABLE>
See accompanying notes.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the nine months ended September 30, 1997
(Unaudited)
(thousands, except per share data)
<TABLE>
<CAPTION>
Historical Group 1 Group 2 Pro Forma
Storage Audited Unaudited Pro Forma Storage
USA, Inc. Facilities Facilities Adjustments USA, Inc.
--------------- ------------- -------------- --------------- --------------
<S> <C>
Property Revenues:
Rental income $113,267 $10,975 $2,102 $8,442 (a) $134,786
Management income - -
Other income 2,213 108 18 194 (b) 2,533
--------------- ------------- -------------- --------------- --------------
Total revenues 115,480 11,083 2,120 8,636 137,319
--------------- ------------- -------------- --------------- --------------
Property Expenses:
Cost of property operations
and maintenance 28,359 2,433 319 1,798 (c) 32,909
Taxes 9,403 932 151 635 (d) 11,121
General & administrative 4,656 881 (e) 5,537
Depreciation & amortization 14,002 3,191 (f) 17,193
--------------- ------------- -------------- --------------- --------------
Total expenses 56,420 3,365 470 6,505 66,760
--------------- ------------- -------------- --------------- --------------
Income from property operations 59,060 7,718 1,650 2,131 70,559
Other Income (expenses):
Interest expense (11,604) (9,191) (g) (20,795)
Interest income 880 880
--------------- ------------- -------------- --------------- --------------
Income before minority interest and
gain on sale of assets 48,336 7,718 1,650 (7,060) 50,644
Gain on exchange of self-storage
facilities 2,569 (2,569) (h) -
--------------- ------------- -------------- --------------- --------------
Income before minority interest 50,905 7,718 1,650 (9,629) 50,644
Minority interest (4,115) (650) (i) (4,765)
--------------- ------------- -------------- --------------- --------------
Net income $ $ $ $ $
46,790 7,718 1,650 (10,279) 45,879
=============== ============= ============== =============== ==============
Net income per share $1.76 $1.67
=============== ==============
Weighted average shares outstanding 26,638 27,501
=============== ==============
</TABLE>
See accompanying notes.
<PAGE>
STORAGE USA, INC.
PRO FORMA COMBINED CONDENSED STATEMENT OF OPERATIONS
For the year ended December 31, 1996
(Unaudited)
(thousands, except per share data)
<TABLE>
<CAPTION>
Initial
Pro Forma Group 1 Group 2 Pro Forma
Storage Audited Unaudited Pro Forma Storage
USA, Inc. Facilities Facilities Adjustments USA, Inc.
---------------- -------------- -------------- --------------- --------------
<S> <C>
Property Revenues:
Rental income $130,839 $14,476 $2,852 $21,968 (j) $170,135
Management income 485 485
Other income 1,715 306 32 581 (k) 2,634
---------------- -------------- -------------- --------------- --------------
Total revenues 133,039 14,782 2,884 22,549 173,254
---------------- -------------- -------------- --------------- --------------
Property Expenses:
Cost of property operations
and maintenance 33,530 3,431 480 5,340 (l) 42,781
Taxes 10,827 1,188 202 1,256 (m) 13,473
General & administrative 4,722 1,427 (n) 6,149
Depreciation & amortization 16,097 5,867 (o) 21,964
---------------- -------------- -------------- --------------- --------------
Total expenses 65,176 4,619 682 13,890 84,367
---------------- -------------- -------------- --------------- --------------
Income from property operations 67,863 10,163 2,202 8,659 88,887
Other Income (expenses):
Interest expense (12,885) (14,639) (p) (27,524)
Interest income 687 687
---------------- -------------- -------------- --------------- --------------
Income before gain and minority interest 55,665 10,163 2,202 (5,980) 62,050
Gain on investment 288 (288) (q) -
---------------- -------------- -------------- --------------- --------------
Income before minority interest 55,953 10,163 2,202 (6,268) 62,050
Minority interest (3,870) (1,968) (r) (5,838)
---------------- -------------- -------------- --------------- --------------
Net income $52,083 $10,163 $2,202 $(8,236) $56,212
================ ============== ============== =============== ==============
Net income per share $2.11 $ 2.04
================ ==============
Weighted average shares outstanding 24,723 27,501
================ ==============
</TABLE>
See accompanying notes.
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL
STATEMENTS (dollar amounts in thousands, except
share/unit and per share/unit data)
(Unaudited)
1. Storage USA, Inc.
The historical financial information of Storage USA, Inc. (the "Company")
includes SUSA Partnership, L.P. (the "Partnership"), Storage USA, Trust (the
"Trust") and SUSA Management, Inc. ("SUSA Management").
2. Group 1 and Group 2 Facilities- Balance Sheet
Amounts reflect the acquisition of 48 facilities acquired from October
29, 1997 to January 8, 1998 and one facility with anticipated closing date of
January 30, 1998 for a price of $145,422. The total acquisition price includes
the purchase price of the facilities ($143,923) plus the Company's estimated
average cost of $30 per property for capital improvements ($1,470) and other
closing costs ($29). The total acquisition price was assumed to be funded with
borrowings under the Company's lines of credit, including a $75,000 bridge loan,
the issuance of approximately 92,000 shares of common stock for approximately
$3,500 and the issuance of approximately 125,000 units of limited partnership
interest in the Operating Partnership ("Units") for approximately $4,800.
3. Storage USA, Inc. - Initial Pro Forma Statement of Operations
The Initial Pro Forma Statement of Operations for the year ended
December 31, 1996 is presented as if (a) the acquisition during 1996 of 82
facilities totaling 5,400 square feet for a cost of approximately $304,000, (b)
the issuance of 7,029,000 shares of common stock for net proceeds of
approximately $220,528 and (c) the issuance of $100,000 of 7.125% notes payable
had occurred on January 1, 1996.
4. Group 1 Facilities - Statement of Operations
The statements of operations for the Group 1 Facilities reflects the
results of operations of the Group 1 Facilities for the year ended December 31,
1996, and the results of operations of the Group 1 Facilities for the nine
months ended September 30, 1997, which are included in the Group 1 Facilities
Historical Summaries of Combined Gross Revenue and Direct Operating Expenses
included in this Form 8-K/A.
5. Group 2 Facilities - Statement of Operations
The statements of operations for the Group 2 Facilities reflects the results of
operations of the Group 2 Facilities for the year ended December 31, 1996, and
the results of operations of the Group 2 Facilities for the nine months ended
September 30, 1997, which are included in the Group 2 Facilities Historical
Summaries of Combined Gross Revenue and Direct Operating Expenses included in
this Form 8-K/A.
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
<S> <C>
(a) To record rental income for the 39 audited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 6,086
To record rental income for the 14 unaudited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 1,155
To reduce rental income for six facilities that are included in the Storage USA,
Inc. historical balances (the "Historical Balances") and were exchanged for
eight facilities on May 20, 1997. $ (1,375)
To record rental income for the nine facilities acquired during the third
quarter of 1997 from January 1, 1997 to the date acquired $ 2,576
-----------
Pro forma adjustment $ 8,442
(b) To record other income for the 39 audited facilities acquired during the
first six months of 1997 from January 1, 1997 to the date acquired. $ 101
To record other income for the 14 unaudited facilities acquired during
the first six months of 1997 from January 1, 1997 to the date acquired. $ 43
To reduce other income for six facilities that are included in the
Historical Balances and were exchanged for eight facilities on May 20,
1997. $ (3)
To record other income for the nine facilities acquired during the third
quarter of 1997 from January 1, 1997 to the date acquired $ 63
To reduce management income for the managed property acquired on May 15,
1997, based on actual management fees earned by the company from January
1, 1997 to the acquisition date. $ (10)
-----------
Pro forma adjustment $ 194
(c) To record cost of property operations and maintenance for the 39 audited
facilities acquired during the first six months of 1997 from January 1,
1997 to the date acquired. $ 1,362
To record cost of property operations and maintenance for the 14 unaudited
facilities acquired during the first six months of 1997 from January 1, 1997 to
the date acquired. $ 280
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
<S> <C>
To reduce cost of property operations and maintenance for six facilities
that are included in the Historical Balances and were exchanged for
eight facilities on May 20, 1997. $ (383)
To record cost of property operations and maintenance for the nine facilities
acquired during the third quarter of 1997 from January 1, 1997 to the date
acquired $ 539
-------------
Pro forma adjustment $ 1,798
(d) To record taxes for the 39 audited facilities acquired during the first six
months of 1997 from January 1, 1997 to the date acquired. $ 519
To record taxes for the 14 unaudited facilities acquired during the first six
months of 1997 from January 1, 1997 to the date acquired. $ 129
To reduce taxes for six facilities that are included in the Historical Balances
and were exchanged for eight facilities on May 20, 1997. $ (206)
To record taxes income for the nine facilities acquired during the third quarter
of 1997 from January 1, 1997 to the date acquired $ 193
-------------
Pro forma adjustment $ 635
(e) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 881
(f) To record depreciation for the 39 audited facilities acquired during the
first six months of 1997, based on approximately $94,047 of the purchase
price being allocated to depreciable assets, based on a 40 year life. $ 1,763
To record depreciation for the 14 unaudited facilities acquired during
the first six months of 1997, based on approximately $18,888 of the
purchase price being allocated to depreciable assets, based on a 40 year
life. $ 354
To record depreciation for the nine facilities acquired during the third
quarter of 1997 based on approximately $27,664 of the purchase price
being allocated to depreciable assets, based on a 40-year life. $ 519
To record depreciation for the 49 Group 1 and Group 2 Facilities based on
approximately $106,158 of the purchase price being allocated to depreciable
assets, based on a 40 year life. $ 1,990
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Nine Months Ended
September 30, 1997
<S> <C>
Less: Depreciation included in the Historical balance relating to the facilities
acquired during the first nine months of 1997. $ (1,295)
To reduce depreciation for six facilities that are included in the Historical
Balances and were exchanged for eight facilities on May 20, 1997. $ (140)
------------
Pro forma adjustment $ 3,191
(g) To reflect the interest expense on the pro forma line of credit balance
of $147,344 at a weighted average interest rate of 7.10% after assuming
all financing transactions to occur on January 1, 1997. $ (7,846)
To remove historical line of credit interest expense. $ 2,218
To reflect the pro forma effect of additional interest expense and
amortization of discount due to the issuance of $100,000 of 8.20% notes
payable assumed to occur on January 1, 1997. $ (3,473)
To reflect interest expense on mortgage notes payable from January 1, 1997 to
the date of acquisition for the $6,048 mortgages assumed during the period
January 1, 1997 to December 19, 1997. $ (275)
To reflect the pro forma effect on interest of assuming the payoff of all
mortgages that were paid off during the first nine months of 1997 occurred on
January 1, 1997. $ 185
------------
Pro forma adjustment $ (9,191)
(h) To remove gain on exchange of self-storage facilities $ (2,569)
(i) To reflect the pro forma effect on minority interest expense from the
income contributed from facilities acquired from January 1, 1997 to
September 3, 1997 and the Group 1 and Group 2 Facilities assuming those
acquisitions, pending acquisitions and all equity offerings and Unit
transactions occurred on January 1, 1997. $ (650)
Year ended
December 31, 1996
(j) To record rental income for the 39 audited facilities acquired during
the first six months of 1997. $ 16,664
To record rental income for the 14 unaudited facilities acquired during the
first six months of 1997. $ 3,306
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Year ended
December 31, 1996
<S> <C>
To record rental income for the nine facilities acquired during the third
quarter of 1997. $ 5,215
To reduce rental income for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997. $ (3,217)
-------------
Pro forma adjustment $ 21,968
(k) To record other income for the 39 audited facilities acquired during the
first six months of 1997. $ 313
To record other income for the 14 unaudited facilities acquired during the first
six months of 1997. $ 95
To record other income for the nine facilities acquired during the third quarter
of 1997. $ 210
To reduce other income for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997. $ (10)
To reduce management income for the managed property acquired on May
15, 1997, based on actual management fees earned by the company during
the year ended December 31, 1996. $ (27)
-------------
Pro forma adjustment $ 581
(l) To record cost of property operations and maintenance for the 39 audited
facilities acquired during the first six months of 1997. $ 3,863
To record cost of property operations and maintenance for the 14 unaudited
facilities acquired during the first six months of 1997. $ 1,061
To record cost of property operations and maintenance for the nine facilities
acquired during the third quarter of 1997. $ 1,146
To reduce cost of property operations and maintenance for six facilities that
are included in the Initial Pro Forma balances and were exchanged for eight
facilities on May 20, 1997. $ (730)
-------------
Pro forma adjustment $ 5,340
(m) To record taxes for the 39 audited facilities acquired during the first
six months of 1997. $ 1,082
To record taxes for the 14 unaudited facilities acquired during the first six
months of 1997. $ 291
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Year ended
December 31, 1996
<S> <C>
To record taxes for the nine facilities acquired during the third quarter of
1997. $ 460
To reduce taxes for six facilities that are included in the Initial Pro Forma
balances and were exchanged for eight facilities on May 20, 1997. $ (577)
---------------
Pro forma adjustment $ 1,256
(n) To reflect an estimated increase in general and administrative expense based on
results subsequent to acquisition. $ 1,427
(o) To record depreciation for the 39 audited facilities acquired during
the first six months of 1997, based on approximately $94,047 of the
purchase price being allocated to depreciable assets, based on a 40
year life. $ 2,351
To record depreciation for the 14 unaudited facilities acquired during
the first six months of 1997, based on approximately $18,888 of the
purchase price being allocated to depreciable assets, based on a 40
year life. $ 472
To record depreciation for the nine facilities acquired during the
third quarter of 1997 based on approximately $27,664 of the purchase
price being allocated to depreciable assets, based on a 40-year life. $ 692
To record depreciation for the 49 Group 1 and Group 2 Facilities based on
approximately $106,158 of the purchase price being allocated to depreciable
assets, based on a 40 year life. $ 2,654
To reduce depreciation for six facilities that are included in the Initial Pro
Forma balances and were exchanged for eight facilities on May 20, 1997. $ (302)
---------------
Pro forma adjustment $ 5,867
(p) To reflect the interest expense on the pro forma line of credit balance
increase of $94,614 at a weighted average interest rate of 6.99% after
effect of assuming all financing transactions to occur on January 1,
1996. $ (6,613)
To reflect the pro forma effect of additional interest expense and
amortization of discount due to the issuance of $100,000 of 8.20% notes
payable assumed to occur on January 1, 1996. $ (8,336)
</TABLE>
<PAGE>
NOTES TO PRO FORMA COMBINED CONDENSED FINANCIAL STATEMENTS
(dollar amounts in thousands, except per share data)
(Unaudited)
6. Pro Forma Adjustments - Statement of Operations - continued
<TABLE>
<CAPTION>
Year ended
December 31, 1996
<S> <C>
To reflect interest expense on mortgage notes payable from the $6,048
of mortgages assumed during the period January 1, 1997 to December 19,
1997. $ (526)
To reflect the pro forma effect on interest of assuming the payoff of
all mortgages that were paid off during the first nine months of 1997
occurred on January 1, 1996. $ 836
------------
Pro forma adjustment $ (14,639)
(q) To remove gain on exchange of self-storage facilities $ (288)
(r) To reflect the pro forma effect on minority interest expense from the
income contributed from facilities acquired from January 1, 1997 to
September 3, 1997 and the Group 1 and Group 2 Facilities assuming those
acquisitions, pending acquisitions and all equity offerings and Unit
transactions occurred on January 1, 1997. $ (1,968)
</TABLE>
<PAGE>
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.
DATED: January 20, 1998
STORAGE USA, INC.
By: /s/ Dennis A. Reeve
---------------------------------------
Dennis A. Reeve
Chief Financial Officer
(Principal Financial and Accounting Officer)
<PAGE>
Exhibit Index
10.1 Amended and Restated Unsecured Revolving Credit Agreement dated
December 23, 1997.
23.1 Consent of Independent Accountants.
AMENDED AND RESTATED
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF DECEMBER 23, 1997
AMONG
SUSA PARTNERSHIP L.P.,
STORAGE USA, INC.
STORAGE USA TRUST
AND
THE FIRST NATIONAL BANK OF CHICAGO,
AS ADMINISTRATIVE AGENT AND LENDER
AMSOUTH BANK,
AS CO-AGENT AND LENDER
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION,
AS CO-AGENT AND LENDER
FIRST UNION NATIONAL BANK,
AS CO-AGENT AND LENDER
CRESTAR BANK, AS LENDER
NATIONAL BANK OF COMMERCE, AS LENDER
AND
UNION PLANTERS BANK, AS LENDER
<PAGE>
AMENDED AND RESTATED
UNSECURED REVOLVING CREDIT AGREEMENT
This Amended and Restated Unsecured Revolving Credit Agreement
("Agreement"), dated as of December 23, 1997, is among SUSA Partnership L.P., a
Tennessee limited partnership (the "Borrower"), Storage USA, Inc., a Tennessee
corporation (the "General Partner," the "Guarantor" and the "REIT"), Storage USA
Trust, a Maryland business trust (the "Trust"), The First National Bank of
Chicago, a national banking association ("First Chicago"), Crestar Bank, First
Union National Bank, Bank of America National Trust and Savings Association,
AmSouth Bank, National Bank of Commerce and Union Planters Bank (collectively,
the "Lenders") and The First National Bank of Chicago, as administrative agent
("Administrative Agent") for the Lenders.
RECITALS
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning and operating storage properties.
B. The General Partner, the Borrower's sole general partner, is listed
on the New York Stock Exchange and is qualified as a real estate investment
trust. The General Partner owns approximately 0.9% of the total partnership
interests in Borrower, Storage USA Trust ("Trust") owns a 90% limited
partnership interest in the Borrower, and various limited partners in the
Borrower own approximately 9.1% of such partnership interests.
C. The Borrower, General Partner, the Administrative Agent, and certain
of the Lenders are parties to an Unsecured Revolving Credit Agreement dated as
of February 8, 1995 as previously amended (the "Existing Credit Agreement")
pursuant to which the Lenders that are parties thereto agreed to make loans to
the Borrower in the maximum aggregate amount of $75,000,000 (the "Existing
Facility").
D. The Borrower has requested that the Lenders increase the amount of
loans that are available to the Borrower to the aggregate amount of $150,000,000
and otherwise amend and restate in its entirety the Existing Credit Agreement
and the Existing Facility pursuant to the terms of this Agreement (the
"Facility"), and that the Administrative Agent act as administrative agent for
the Lenders and that certain other changes be made to the Existing Facility. The
Administrative Agent and the Lenders have agreed to do so.
E. First Chicago Capital Markets, Inc. has arranged the Facility
between the Lenders and Borrower and coordinated the closing of the Facility.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
<PAGE>
ARTICLE I
DEFINITIONS
As used in this Agreement:
"Absolute Interest Period" means, with respect to a Competitive Bid
Loan made at an Absolute Rate, a period of up to 180 days as requested by
Borrower in a Competitive Bid Quote Request and confirmed by a Lender in a
Competitive Bid Quote but in no event extending beyond the Facility Termination
Date. If an Absolute Interest Period would end on a day which is not a Business
Day, such Absolute Interest Period shall end on the next succeeding Business
Day.
"Absolute Rate" means a fixed rate of interest (rounded to the nearest
1/100 of 1%) for an Absolute Interest Period with respect to a Competitive Bid
Loan offered by a Lender and accepted by the Borrower at such rate.
"Acquisition" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by which the
General Partner, the Borrower or any of their Subsidiaries (i) acquires any
going business or all or substantially all of the assets of any firm,
corporation or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction or as the
most recent transaction in a series of transactions) at least a majority (in
number of votes) of the securities of a corporation which have ordinary voting
power for the election of directors (other than securities having such power
only by reason of the happening of a contingency) or a majority (by percentage
or voting power) of the outstanding partnership interests of a partnership.
"Administrative Agent" means The First National Bank of Chicago in its
capacity as administrative agent for the Lenders pursuant to Article XI, and not
in its individual capacity as a Lender, and any successor Administrative Agent
appointed pursuant to Article XI.
"Administrative Agent's Fee" is defined in Section 2.6.
"Advance" means a borrowing hereunder consisting of the aggregate
amount of the several Loans made by the Lenders to the Borrower of the same Type
(including Swing Line Loans and Competitive Bid Loans) and, in the case of LIBOR
Advances, for the same Interest Period.
"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or
-2-
<PAGE>
indirectly, the power to direct or cause the direction of the management or
policies of the controlled Person, whether through ownership of stock, by
contract or otherwise.
"Aggregate Commitment" means the aggregate of the Commitments of all
the Lenders.
"Agreement" means this Amended and Restated Unsecured Revolving Credit
Agreement, as it may be amended or modified and in effect from time to time.
"Annualized Consolidated Cash Flow" means Consolidated Cash Flow for
the two most recent fiscal quarters multiplied by two.
"Applicable Margin" is defined in Section 2.4.
"Arranger" means First Chicago Capital Markets, Inc.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the Chief Executive Officer,
President or Chief Financial Officer of the Borrower, acting singly.
"Borrower" means SUSA Partnership L.P., a Tennessee limited
partnership, and its successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.11.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago and New York for the conduct of
substantially all of their commercial lending activities and on which dealings
in United States dollars are carried on in the London interbank market and (ii)
for all other purposes, a day (other than a Saturday or Sunday) on which banks
generally are open in Chicago for the conduct of substantially all of their
commercial lending activities.
"Calculation Date" is defined in Section 2.4.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
-3-
<PAGE>
"Cash Equivalents" means, as of any date, (i) securities issued or
directly and fully guaranteed or insured by the United States Government or any
agency or instrumentality thereof having maturities of not more than one year
from such date, (ii) time deposits and certificates of deposit having maturities
of not more than one year from such date and issued by any domestic commercial
bank having (A) senior long-term unsecured debt rated at least A or the
equivalent thereof by S&P or A2 or the equivalent thereof by Moody's and (B)
capital and surplus in excess of $100,000,000, (iii) commercial paper rated at
least A-1 or the equivalent thereof by S&P or P-1 or the equivalent thereof by
Moody's and in either case maturing within 120 days from such date; and (iv)
shares of any money market mutual fund rated at least AAA or the equivalent
thereof by S&P or at least Aaa or the equivalent thereof by Moody's.
"CBR Advance" means an Advance which bears interest at the CBR Rate.
"CBR Applicable Margin" means, as of any date, the Applicable Margin in
effect on such date with respect to CBR Advances and CBR Loans, as determined in
accordance with Section 2.4.
"CBR Loan" means a Loan which bears interest at the CBR Rate.
"CBR Rate" means, for any day, a rate per annum equal to (i) the
Corporate Base Rate for such day plus (ii) CBR Applicable Margin for such day,
in each case changing when and as the Corporate Base Rate changes.
"Closing Date" means the date that all the conditions precedent to the
initial Advance, as specified in Section 4.1, have been satisfied, provided,
however, that the obligations of the Lenders to make Loans hereunder shall
automatically terminate if such date does not occur on or before December 31,
1997.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to
make Loans not exceeding the amount set forth opposite its signature below or as
set forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 14.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Competitive Bid Borrowing Notice" is defined in Section 2.16(f).
"Competitive Bid Lender" means a Lender or Designated Lender which has
a Competitive Bid Loan outstanding.
"Competitive Bid Loan" is a Loan made pursuant to Section 2.16 hereof.
-4-
<PAGE>
"Competitive Bid Note" means the promissory note payable to the order
of the applicable Lender in the form attached hereto as Exhibit B-2 to be used
to evidence any Competitive Bid Loans which such Lender elects to make
(collectively, the "Competitive Bid Notes").
"Competitive Bid Quote" means a response submitted by a Lender to the
Administrative Agent or the Borrower, as the case may be with respect to an
Invitation for Competitive Bid Quotes in the form attached as Exhibit C-3.
"Competitive Bid Quote Request" means a written request from Borrower
to Administrative Agent in the form attached as Exhibit C-1.
"Competitive LIBOR Margin" means, with respect to any Competitive Bid
Loan for an Interest Period, the percentage established in the applicable
Competitive Bid Quote which is to be used to determine the interest rate
applicable to such Competitive Bid Loan.
"Condemnation" is defined in Section 9.8.
"Consolidated Cash Flow," for any period (a "Cash Flow Test Period"),
means an amount equal to (a) Funds From Operations for such period plus (b)
Consolidated Interest Expense for such period.
"Consolidated Debt Service," for any period of two consecutive fiscal
quarters (a "Debt Service Test Period"), means (a) Consolidated Interest Expense
for such period plus (b) the aggregate amount of scheduled principal payments of
Indebtedness (excluding optional prepayments and scheduled principal payments in
respect of any Indebtedness which is payable in a single installment at final
maturity) required to be made during such period by the Borrower or any of its
consolidated Subsidiaries; provided, that, in the case of any Indebtedness which
amortizes in annual installments, (i) only 50% of the principal amount of any
such annual installment which is payable during any Debt Service Test Period
shall be included in Consolidated Debt Service for such Debt Service Test Period
and (ii) in the event that no annual installment is payable in respect of a
particular item of such Indebtedness during a Debt Service Test Period, but an
annual installment in respect of such Indebtedness is payable during the period
of two consecutive fiscal quarters commencing immediately after such Debt
Service Test Period, 50% of the amount of such annual installment shall
nevertheless be included in Consolidated Debt Service for such Debt Service Test
Period.
"Consolidated Interest Expense," for any period, means the amount of
interest expense of the Borrower and its Subsidiaries for such period on the
aggregate principal amount of their Indebtedness, determined on a consolidated
basis in accordance with GAAP plus any capitalized interest which accrued during
such period.
"Consolidated Net Income," for any period, means consolidated net
income (or loss) of the Borrower and its Subsidiaries for such period determined
on a consolidated basis in
-5-
<PAGE>
accordance with GAAP; provided that there shall be excluded (a) the income (or
deficit) of any other Person accrued prior to the date it becomes a Subsidiary
of the Borrower or is merged into or consolidated with the Borrower or any of
its Subsidiaries and (b) the undistributed earnings of any Subsidiary to the
extent that the declaration or payment of dividends or similar distributions by
such Subsidiary is not at the time permitted by the terms of any contractual
obligation or requirement of law applicable to such Subsidiary.
"Consolidated Secured Indebtedness," as of any date of determination,
means the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower, the General Partner and their respective Subsidiaries outstanding at
such date which does not constitute Unsecured Indebtedness and (b) the excess,
if any, of (i) the aggregate principal amount of all Unsecured Indebtedness of
the Subsidiaries of the Borrower over (ii) $10,000,000, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Senior Unsecured Indebtedness," as of any date of
determination, means the sum of (a) the aggregate principal amount of all
Indebtedness of the Borrower, and the General Partner, and their respective
Subsidiaries outstanding at such date which constitutes Unsecured Indebtedness
(excluding (i) Indebtedness which is contractually subordinated to the
Indebtedness of the Borrower, the General Partner and their Subsidiaries under
the Loan Documents on customary terms acceptable to the Administrative Agent,
(ii) Indebtedness of the Borrower, the General Partner and their Subsidiaries
under the Loan Documents and (iii) Indebtedness incurred pursuant to any
commitment referred to in clause (c) below), (b) the aggregate Commitments then
in effect under the Facility and (c) the aggregate commitments then in effect
with respect to any other unsecured committed line of credit extended to the
Borrower, the General Partner or any of their Subsidiaries, determined on a
consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth," at any date of determination, means
an amount equal to (a) Total Tangible Assets as of such date minus (b)
Consolidated Total Indebtedness as of such date.
"Consolidated Total Indebtedness," as of any date of determination,
means all Indebtedness of the Borrower, the General Partner and their respective
Subsidiaries outstanding at such date, determined on a consolidated basis in
accordance with GAAP.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower or any of its Subsidiaries, are
treated as a single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.12.
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"Corporate Base Rate" means a rate per annum equal to the corporate
base rate of interest announced by First Chicago from time to time, changing
when and as said corporate base rate changes.
"Current DSC Ratio" means, as of any date, the ratio calculated by
dividing Consolidated Cash Flow for the two most recently completed fiscal
quarters by Consolidated Debt Service for such two fiscal quarters.
"Default" means an event described in Article VIII.
"Defaulting Lender" means any Lender which fails or refuses to perform
its obligations under this Agreement within the time period specified for
performance of such obligation and such failure or refusal continues for one
Business Day after written notice from the Administrative Agent, or, if no time
frame is specified, if such failure or refusal continues for a period of five
Business Days after written notice from the Administrative Agent; provided that
if such Lender cures such failure or refusal, such Lender shall cease to be a
Defaulting Lender.
"Designated Lender" means any Person who has been designated by a
Lender to fund Competitive Bid Loans.
"Designating Lender" is defined in Section 2.16(j).
"Designation Agreement" means a designation agreement entered into by a
Lender (other than a Designated Lender) and a Designated Lender, and accepted by
the Administrative Agent and Borrower, in substantially the form of Exhibit H
hereto.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Facility Fee" is defined in Section 2.6.
"Facility Termination Date" means November 15, 2000.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Administrative Agent from
three Federal funds brokers of recognized standing selected by the
Administrative Agent in its sole discretion.
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"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are required in accordance with
GAAP to be capitalized on a balance sheet of the lessee.
"First Chicago" means The First National Bank of Chicago in its
individual capacity, and its successors.
"Fixed Rate" as defined in Section 2.17.
"Fixed Rate Advance" means an Advance which bears interest at a Fixed
Rate.
"Funded Percentage" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount actually
disbursed and outstanding to Borrower by such Lender at such time (including
Swing Line Loans and Competitive Bid Loans), and the denominator of which is the
total amount disbursed and outstanding to Borrower by all of the Lenders at such
time (including Swing Line Loans and Competitive Bid Loans).
"Funds From Operations," for any period, means (a) Consolidated Net
Income for such period as adjusted by (i) excluding gains and losses from
property sales, debt restructurings and property write-downs and adjusted for
the non-cash effect of straight-lining of rents, (ii) to the extent not already
accomplished under GAAP, straight-lining various ordinary operating expenses
which are payable less frequently than monthly (e.g. real estate taxes), and
(iii) adding back depreciation, amortization and all non-cash items.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied in a manner consistent
with that used in preparing the financial statements referred to in Section 6.4.
"General Partner" means Storage USA, Inc., a Tennessee corporation, the
sole general partner of Borrower, and its successors and assigns.
"Guarantee Obligation" means, as to any Person (the "guaranteeing
person"), any obligation (determined without duplication) of (a) the
guaranteeing person or (b) another Person (including, without limitation, any
bank under any letter of credit) to induce the creation of which the
guaranteeing person has issued a reimbursement, counterindemnity or similar
obligation, in either case guaranteeing or in effect guaranteeing any
Indebtedness, leases, dividends or other obligations (the "primary obligations")
of any other third Person (the "primary obligor") in any manner, whether
directly or indirectly, including, without limitation, any obligation of the
guaranteeing person, whether or not contingent, (i) to purchase any such primary
obligation or any property constituting direct or indirect security therefor,
(ii) to advance or supply funds (1) for the purchase or payment of any such
primary obligation or (2) to maintain working capital or equity capital of the
primary obligor or otherwise to maintain the net worth or solvency of the
primary obligor, (iii) to purchase
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property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the maximum stated amount of the primary obligation
relating \to such Guarantee Obligation (or, if less, the maximum stated
liability set forth in the instrument embodying such Guarantee Obligation),
provided, that in the absence of any such stated amount or stated liability, the
amount of such Guarantee Obligation shall be such guaranteeing person's maximum
reasonably anticipated liability in respect thereof as determined by the
Borrower in good faith.
"Guarantor" means the General Partner and the Trust and any
Wholly-Owned Subsidiary that is the owner of an Unencumbered Asset and hereafter
executes a Guaranty in connection therewith.
"Guaranty" means that certain Amended and Restated Guaranty of even
date herewith executed by the Guarantor in favor of the Administrative Agent,
for the ratable benefit of the Lenders, as it may be amended or modified and in
effect from time to time, and any additional guaranty hereafter delivered.
"Indebtedness", of any Person at any date, means without duplication,
(a) all indebtedness of such Person for borrowed money, (b) all obligations of
such Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all obligations of such Person under Financing Leases, (e) all obligations
of such Person in respect of acceptances issued or created for the account of
such Person, (f) all Guarantee Obligations of such Person (excluding, in the
case of the Borrower, Guarantee Obligations of the Borrower in respect of
primary obligations of any Subsidiary), and (g) all liabilities secured by any
lien (other than liens for taxes not yet due and payable) on any property owned
by such Person even though such Person has not assumed or otherwise become
liable for the payment thereof.
"Intangible Assets" of any Person at any date, that portion of the
assets of such Person which constitute intangible assets for the purposes of
GAAP.
"Interest Period" means, with respect to a LIBOR Advance, a period of
one, two, three or six months commencing on a Business Day selected by the
Borrower pursuant to this Agreement. Such Interest Period shall end on (but
exclude) the day which corresponds numerically to such date one, two, three or
six months thereafter, provided, however, that if there is no such numerically
corresponding day in such next, second, third or sixth
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succeeding month, such Interest Period shall end on the last Business Day of
such next, second, third or sixth succeeding month. If an Interest Period would
otherwise end on a day which is not a Business Day, such Interest Period shall
end on the next succeeding Business Day, provided, however, that if said next
succeeding Business Day falls in a new calendar month, such Interest Period
shall end on the immediately preceding Business Day. If Borrower and Lenders
agree on a Fixed Rate Advance then reference herein to Interest Period shall
also include the applicable interest period agreed upon among Borrower and
Lenders for the Fixed Rate Advance.
"Invitation for Competitive Bid Quotes" means a written notice to the
Lenders from the Administrative Agent in the form attached as Exhibit C-2 for
Competitive Bid Loans made pursuant to Section 2.14.
"Lenders" means the lending institutions listed on the signature pages
of this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement.
"Lending Installation" means, with respect to a Lender, any office,
branch, subsidiary or affiliate of such Lender.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate,
whether a ratable Advance based on the LIBOR Applicable Margin or a Competitive
Bid Loan based on a Competitive LIBOR Margin.
"LIBOR Applicable Margin" means, as of any date with respect to any
Interest Period, the Applicable Margin in effect for such Interest Period as
determined in accordance with Section 2.4 hereof.
"LIBOR Base Rate" means, with respect to a LIBOR Advance for the
relevant Interest Period, the rate determined by the Administrative Agent to be
the rate at which deposits in U.S. dollars are offered by the Administrative
Agent to first-class banks in the London interbank market at approximately 11
a.m. (London time) two Business Days prior to the first day of such Interest
Period, in the approximate amount of the relevant LIBOR Advance and having a
maturity approximately equal to such Interest Period. The LIBOR Base Rate shall
be rounded to the next higher multiple of 1/100th of 1% if the rate is not a
multiple of 1/16th of 1% or 1/100th of 1%.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the LIBOR Applicable Margin in effect on the
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day that such LIBOR Base Rate was determined. The LIBOR Rate shall be rounded to
the next higher multiple of 1/16 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Guaranty, the Notes and any
other document from time to time evidencing or securing indebtedness incurred by
the Borrower under this Agreement, as any of the foregoing may be amended from
time to time.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or business prospects of the Borrower and its Subsidiaries taken as a whole,
(ii) the ability of the Borrower or the Guarantor to perform its obligations
under the Loan Documents, or (iii) the validity or enforceability of any of the
Loan Documents or the rights or remedies of the Administrative Agent or the
Lenders thereunder.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"New Lenders" is defined in Section 2.8.
"Note" means a promissory note, in substantially the form of Exhibit
B-1 hereto, duly executed by the Borrower and payable to the order of a Lender
in the amount of its Commitment, including any amendment, modification, renewal
or replacement of such promissory note or a competitive bid note, in
substantially the form of Exhibit B-2 hereto, duly executed by the Borrower and
payable to the order of a Competitive Bid Lender, including any amendment,
modification, renewal or replacement of such note.
"Notice of Assignment" is defined in Section 14.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Administrative Agent or any indemnified party hereunder
arising under the Loan Documents.
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"Participants" is defined in Section 14.2.1.
"Payment Date" means, with respect to the payment of interest accrued
on any Advance, the first day of each calendar month and with respect to any
LIBOR Advance, the last day of any Interest Period as well.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
"Percentage" means for each Lender the percentage of the Aggregate
Commitment allocated to such Lender as set forth opposite its signature.
"Permitted Acquisitions" are defined in Section 8.16.
"Permitted Liens" are defined in Section 8.18.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Pricing Certificate" is defined in Section 2.4.
"Property" means each parcel of real property (including the public
storage facility thereon) owned or operated by the Borrower, the General Partner
or any consolidated Subsidiary.
"Purchasers" is defined in Section 14.3.1.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any
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such waiver of the notice requirement in accordance with either Section 4043(a)
of ERISA or Section 412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to an Interest Period, the
maximum aggregate reserve requirement on Eurocurrency liabilities.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Storage Property" means each parcel of real property owned by the
Borrower, the General Partner or any of their Subsidiaries and upon which there
is located a self-storage facility.
"Subsidiary," as to any Person, means a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower or the General Partner.
"Substantial Portion" means, with respect to the Property of the
General Partner, the Borrower and its Subsidiaries, Property which (i)
represents more than 15% of the consolidated assets disclosed on the most
recently issued quarterly consolidated financial statements of the General
Partner and the Borrower, or (ii) is responsible for more than 15% of the
consolidated net sales or of the consolidated net income of the General Partner,
the Borrower and their Subsidiaries as reflected in the financial statements
referred to in clause (i) above.
"S&P" means Standard & Poor's Ratings Group and its successors.
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"Swing Line Lender" shall mean the Lender agreed upon by Borrower and
the designated Swing Line Lender to provide Swing Line Loans. The initial Swing
Line Lender is the Administrative Agent, in its capacity as a Lender.
"Swing Line Loans" means Loans of up to $15,000,000 made by the Swing
Line Lender in accordance with Section 2.13 hereof.
"Total Tangible Assets," of any Person at any date, means the current
book value of the total assets of such Person other than that portion of such
Person's assets that constitute intangible assets as determined in accordance
with GAAP plus accumulated depreciation on the real estate assets from such
Person's original book value of such assets which is reflected in the current
book value of such assets.
"Transferee" is defined in Section 14.4.
"Type" means, with respect to any Advance, its nature as a CBR Advance
or a LIBOR Advance.
"Unencumbered Asset," with respect to any asset, at any date of
determination, means the circumstance that such asset on such date (a) is not
subject to any Liens or claims (including restrictions on transferability or
assignability) of any kind (including any such Lien, claim or restriction
imposed by the organizational documents of any Subsidiary, but excluding
Permitted Liens), (b) is not subject to any agreement (including (i) any
agreement governing Indebtedness incurred in order to finance or refinance the
acquisition of such asset and (ii) if applicable, the organizational documents
of any Subsidiary) which prohibits or limits the ability of the Borrower, the
General Partner or any of their Subsidiaries to create, incur, assume or suffer
to exist any Lien upon any assets or Capital Stock of the Borrower, the General
Partner or any of their Subsidiaries (excluding any agreement which limits
generally the amount of secured Indebtedness which may be incurred by the
Borrower, the General Partner and their Subsidiaries and (c) is not subject to
any agreement (including any agreement governing Indebtedness incurred in order
to finance or refinance the acquisition of such asset) which entitles any Person
to the benefit of any Lien (other than Permitted Liens) on any assets or Capital
Stock of the Borrower, the General Partner or any of their Subsidiaries, or
would entitle any Person to the benefit of any Lien (other than Permitted Liens)
on such assets or Capital Stock upon the occurrence of any contingency
(including, without limitation, pursuant to an "equal and ratable" clause), and
(d) is wholly owned by Borrower or by a Wholly-Owned Subsidiary that is a
guarantor of Borrower's obligations under the Facility. For the purposes of this
Agreement, any Property of a Wholly-Owned Subsidiary shall not be deemed to be
unencumbered unless both (i) such Property and (ii) all Capital Stock of such
Subsidiary held by the Borrower and General Partner is unencumbered.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value
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of all such Plan assets allocable to such benefits, all determined as of the
then most recent valuation date for such Plans.
"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default, other than the
occurrence of an event under Section 8.14 during the grace period provided
therein.
"Unsecured Indebtedness" means all Indebtedness of any Person that is
not secured by a Lien on any income, Capital Stock, Property or any other asset
of such Person.
"Value of Unencumbered Assets," as of any date, means the book value,
as determined in accordance with GAAP, of all Unencumbered Assets plus the
accumulated depreciation from the original book value which is reflected in the
current book value of such Unencumbered Assets.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II
THE CREDIT
2.1. Commitment. From and including the date of this Agreement and
prior to the Facility Termination Date, each Lender severally agrees, on the
terms and conditions set forth in this Agreement, to make Loans to the Borrower
from time to time in amounts not to exceed in the aggregate at any one time
outstanding the amount of its Commitment. Subject to the terms of this
Agreement, the Borrower may borrow, repay and reborrow at any time prior to the
Facility Termination Date. The Commitments to lend hereunder shall expire on the
Facility Termination Date.
2.2. Final Principal Payment. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
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2.3. Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment except for Swing Line
Loans which shall be made by the Swing Line Lender in accordance with Section
2.15 and Competitive Bid Loans made in accordance with Section 2.16. The
Advances may be CBR Advances or LIBOR Advances, or a combination thereof,
selected by the Borrower in accordance with Sections 2.11 and 2.12.
2.4. Applicable Margins. The CBR Applicable Margin and the LIBOR
Margin to be used in calculating the interest rate applicable to different Types
of Advances shall vary from time to time in accordance with the long-term
unsecured debt ratings from Moody's and S&P of the General Partner and the
Borrower. The applicable debt ratings and the Applicable Margins are set forth
in the table attached as Exhibit A. All margins and fees change as and when the
rating classification changes. In the event the General Partner and the Borrower
have different ratings, the rating of the higher rated entity shall be used. In
the event the rating agencies are split on the rating for the higher rated
entity, the lower rating for the higher rated entity shall be deemed to be the
applicable rating (e.g., if the higher rated entity's Moody's debt rating is
Baa1 and its S&P debt rating is BBB then the Applicable Margins shall be
computed based on the S&P rating), and the Applicable Margins shall be adjusted
effective on the next Business Day following any change in the higher rated
entity's Moody's debt rating and/or S&P's debt rating, as the case may be. In
the event that either S&P or Moody's shall discontinue their ratings of the REIT
industry or the Borrower, a mutually agreeable substitute rating agency shall be
selected by the Required Lenders and the Borrower. If the Required Lenders and
the Borrower cannot agree on a substitute rating agency within thirty (30) days
of such discontinuance, or if both S&P and Moody's shall discontinue their
ratings of the REIT industry or the Borrower, the Applicable Margin to be used
for the calculation of interest on Advances hereunder shall be the highest
Applicable Margin for each Type.
2.5. Intentionally Deleted.
2.6. Facility Fee. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a per annum facility fee (the "Facility
Fee") on the amount of the Aggregate Commitment at the rate set forth in Exhibit
A. The Facility Fee varies according to the rating of the Borrower and General
Partner. The Facility Fee shall be payable quarterly in arrears on each February
1, May 1, August 1 and November 1 and on the Facility Termination Date
commencing February 1, 1998.
2.7. Reductions in Aggregate Commitment. The Borrower may permanently
reduce the Aggregate Commitment (and the Maximum Aggregate Commitment) in whole,
or in part ratably among the Lenders in integral multiples of $5,000,000, upon
at least ten Business Days' written notice to the Administrative Agent, which
notice shall specify the amount of any such reduction, provided, however, that
the amount of the Aggregate Commitment may not be reduced below the aggregate
principal amount of the outstanding Advances.
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2.8. Intentionally Deleted.
2.9. Minimum Amount of Each Advance. Each LIBOR Advance shall be in
the minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), and each CBR Advance shall be in the minimum amount of $1,000,000 (and
in multiples of $250,000 if in excess thereof), provided, however, that any CBR
Advance may be in the amount of the unused Aggregate Commitment if less than
$1,000,000.
2.10. Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding CBR Advances, or, in a minimum
aggregate amount of $500,000 or any integral multiple of $250,000 in excess
thereof, any portion of the outstanding CBR Advances upon two Business Days'
prior notice to the Administrative Agent. Subject to the provisions of Section
3.4, a LIBOR Advance may be paid prior to the last day of the applicable
Interest Period upon three Business Days' prior notice to the Administrative
Agent.
2.11. Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable to each Advance from time to time. The
Borrower shall give the Administrative Agent irrevocable notice (a "Borrowing
Notice") not later than 10:00 a.m. (Chicago time) at least one Business Day
before the Borrowing Date of each CBR Advance and three Business Days before the
Borrowing Date for each LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of
such Advance,
(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each LIBOR Advance, the Interest
Period applicable thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent at its address specified pursuant to Article
IX. The Administrative Agent will make the funds so received from the Lenders
available to the Borrower at the Administrative Agent's aforesaid address.
No Interest Period may end after the Facility Termination Date and,
unless the Lenders otherwise agree in writing, in no event may there be more
than five (5) different Interest Periods for LIBOR Advances outstanding at any
one time.
2.12. Conversion and Continuation of Outstanding Advances. CBR
Advances shall continue as CBR Advances unless and until such CBR Advances are
converted into LIBOR
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Advances. Each LIBOR Advance shall continue as a LIBOR Advance until the end of
the then applicable Interest Period therefor, at which time such LIBOR Advance
shall be automatically converted into an CBR Advance unless the Borrower shall
have given the Administrative Agent a Conversion/Continuation Notice requesting
that, at the end of such Interest Period, such LIBOR Advance continue as an
LIBOR Advance for the same or another Interest Period. Subject to the terms of
Section 2.9, the Borrower may elect from time to time to convert all or any part
of an Advance of any Type into any other Type or Types of Advances; provided
that any conversion of any LIBOR Advance shall be made on, and only on, the last
day of the Interest Period applicable thereto. The Borrower shall give the
Administrative Agent irrevocable notice (a "Conversion/Continuation Notice") of
each conversion of an Advance or continuation of a LIBOR Advance not later than
10:00 a.m. (Chicago time) at least one Business Day, in the case of a conversion
into an CBR Advance, or three Business Days, in the case of a conversion into or
continuation of a LIBOR Advance, prior to the date of the requested conversion
or continuation, specifying:
(i) the requested date which shall be a Business Day, of
such conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is
to be converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such
Advance is to be converted or continued and, in the
case of a conversion into or continuation of a LIBOR
Advance, the duration of the Interest Period
applicable thereto.
2.13. Changes in Interest Rate, Etc. Each CBR Advance or part thereof
shall bear interest on the outstanding principal amount thereof, for each day
from and including the date such Advance is made or is converted from a LIBOR
Advance into a CBR Advance pursuant to Section 2.12 to but excluding the date it
becomes due or is converted into a LIBOR Advance pursuant to Section 2.12
hereof, at a rate per annum equal to the CBR Rate for such day. Changes in the
rate of interest on that portion of any Advance maintained as a CBR Advance will
take effect simultaneously with each change in the Corporate Base Rate. Each
LIBOR Advance shall bear interest from and including the first day of the
Interest Period applicable thereto to (but not including) the last day of such
Interest Period at the interest rate determined as applicable to such LIBOR
Advance.
2.14. Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.11 or 2.12, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 10.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued (following the expiration of the then-current
Interest Period) as a LIBOR Advance. During the continuance of a Default the
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Required Lenders may, at their option, by notice to the Borrower (which notice
may be revoked at the option of the Required Lenders notwithstanding any
provision of Section 10.2 requiring unanimous consent of the Lenders to changes
in interest rates), declare that (i) each LIBOR Advance shall bear interest for
the remainder of the applicable Interest Period at the rate otherwise applicable
to such Interest Period plus 2% per annum and (ii) each CBR Advance shall bear
interest at a rate per annum equal to the CBR Rate otherwise applicable to the
CBR Advance plus 2% per annum.
2.15 Swing Line Loans. In addition to the other options available to
Borrower hereunder, up to $15,000,000 of the Swing Line Lender's commitment,
shall be available for Swing Line Loans subject to the following terms and
conditions. Swing Line Loans shall be made available for same day borrowings
provided that notice is given in accordance with Section 2.11 hereof. All Swing
Line Loans shall bear interest at the CBR Rate. In no event shall the Swing Line
Lender be required to fund a Swing Line Loan if it would increase the total
aggregate outstanding Loans by Swing Line Lender hereunder to an amount in
excess of its Commitment. Upon request of the Swing Line Lender, each Lender
irrevocably agrees to purchase its Percentage of any Swing Line Loan made by the
Swing Line Lender regardless of whether the conditions for disbursement are
satisfied at the time of such purchase, including the existence of an Default
hereunder (provided Swing Line Lender had no knowledge of an Default at the time
the Swing Line Loan was funded) provided no Lender shall be required to have
total outstanding Loans in an amount greater than its Commitment. Such purchase
shall take place on the date of the request by Swing Line Lender so long as such
request is made by noon (Chicago time), otherwise on the Business Day following
such request. All requests for purchase shall be in writing. From and after the
date it is so purchased, each such Loan shall be treated as a Loan made by the
purchasing Lender and not by the selling Lender for all purposes under this
Agreement, and shall no longer be considered a Swing Line Loan except that all
interest accruing on or attributable to such Loan for the period prior to the
date of such purchase shall be paid when due by the Borrower to the
Administrative Agent for the benefit of the Swing Line Lender and all such
amounts accruing on or attributable to such Loans for the period from and after
the date of such purchase shall be paid when due by the Borrower to the
Administrative Agent for the benefit of the purchasing Lender. If prior to
purchasing its Percentage in a Swing Line Loan one of the events described in
Section 9.6 or 9.7 shall have occurred and such event prevents the consummation
of the purchase contemplated by preceding provisions, each Lender will purchase
an undivided participating interest in the outstanding Swing Line Loan in an
amount equal to its Percentage of such Swing Line Loan. From and after the date
of each Lender's purchase of its participating interest in a Swing Line Loan, if
the Swing Line Lender receives any payment on account thereof, the Swing Line
Lender will distribute to such Lender its participating interest in such amount
(appropriately adjusted, in the case of interest payments, to reflect the period
of time during which such Lender's participating interest was outstanding and
funded); provided, however, that in the event that such payment was received by
the Swing Line Lender and is required to be returned to the Borrower, each
Lender will return to the Swing Line Lender any portion thereof previously
distributed by the Swing Line Lender to it. No Swing Line Loan shall be
outstanding for more than five (5)
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days at a time and Swing Line Loans shall not be outstanding for more than a
total of ten (10) days during any month.
2.16. Competitive Bid Loans.
a. Competitive Bid Option. In addition to ratable Advances
pursuant to Section 2.3, but subject to the terms and conditions of this
Agreement (including, without limitation the limitation set forth in Section 2.1
as to the maximum amount of all Loans not exceeding the Aggregate Commitment),
the Borrower may, as set forth in this Section 2.16, request the Lenders, prior
to the Facility Termination Date, to make offers to make Competitive Bid Loans
to the Borrower. Each Lender may, but shall have no obligation to, make such
offers and the Borrower may, but shall have no obligation to, accept any such
offers in the manner set forth in this Section 2.16. Competitive Bid Loans shall
be evidenced by the Competitive Bid Notes. In no event shall the aggregate of
all Competitive Bid Loans outstanding at any time exceed 50% of the Aggregate
Commitment and when added to all outstanding Advances (including, without
limitation, LIBOR Advances, Fixed Rate Advances and CBR Advances) shall not
exceed the Aggregate Commitment.
b. Competitive Bid Quote Request. When the Borrower wishes to
request offers to make Competitive Bid Loans under this Section 2.16, it shall
transmit to the Administrative Agent by telecopy a Competitive Bid Quote Request
substantially in the form of Exhibit C-1 hereto so as to be received no later
than (i) 10:00 a.m. (Chicago time) at least five Business Days prior to the
Borrowing Date proposed therein, in the case of a request for a Competitive
LIBOR Margin or (ii) 9:00 a.m. (Chicago time) at least one Business Day prior to
the Borrowing Date proposed therein, in the case of a request for an Absolute
Rate specifying:
(1) the proposed Borrowing Date for the
proposed Competitive Bid Loan,
(2) the requested aggregate principal amount
of such Competitive Bid Loan which must be at least
$10,000,000 and an integral multiple of $1,000,000,
(3) whether the Competitive Bid Quotes
requested are to set forth a Competitive LIBOR Margin or an
Absolute Rate, or both, and
(4) the Interest Period, if a Competitive
LIBOR Margin is requested, or the Absolute Interest Period, if
an Absolute Rate is requested.
(5) whether the Competitive Bid Loan shall be
subject to prepayment.
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The Borrower may request offers to make Competitive Bid Loans for more than one
(but not more than five) Interest Periods in a single Competitive Bid Quote
Request. No Competitive Bid Quote Request shall be given within five Business
Days (or such other number of days as the Borrower and the Administrative Agent
may agree) of any other Competitive Bid Quote Request. Competitive Bid requests
will be limited to a maximum of two bid auctions each 30 days. A Competitive Bid
Quote Request that does not conform substantially to the form of Exhibit C-1
hereto shall be rejected, and the Administrative Agent shall promptly notify the
Borrower of such rejection by telecopy.
c. Invitation for Competitive Bid Quotes. Promptly and in any
event before the close of business on the same Business Day of receipt of a
Competitive Bid Quote Request that is not rejected pursuant to Section 2.16(b),
the Administrative Agent shall send to each of the Lenders by telecopy an
Invitation for Competitive Bid Quotes substantially in the form of Exhibit C-2
hereto, which shall constitute an invitation by the Borrower to each Lender to
submit Competitive Bid Quotes offering to make the Competitive Bid Loans to
which such Competitive Bid Quote Request relates in accordance with this Section
2.16.
d. Submission and Contents of Competitive Bid Quotes.
(1) Each Lender may, in its sole discretion,
submit a Competitive Bid Quote containing an offer or offers
to make Competitive Bid Loans in response to any Invitation
for Competitive Bid Quotes. Each Competitive Bid Quote must
comply with the requirements of this Section 2.16(d) and must
be submitted to the Administrative Agent by telex or telecopy
at its offices not later than (a) 2:00 p.m. (Chicago time) at
least four Business Days prior to the proposed Borrowing Date,
in the case of a request for a Competitive LIBOR Margin or (b)
9:00 a.m. (Chicago time) on the proposed Borrowing Date, in
the case of a request for an Absolute Rate (or, in either case
upon reasonable prior notice to the Lenders, such other time
and date as the Borrower and the Administrative Agent may
agree); provided that Competitive Bid Quotes submitted by
First Chicago may only be submitted if the Administrative
Agent or First Chicago notifies the Borrower of the terms of
the Offer or Offers contained therein no later than 30 minutes
prior to the latest time at which the relevant Competitive Bid
Quotes must be submitted by the other Lenders. Subject to the
Borrower's compliance with all other conditions to
disbursement herein, any Competitive Bid Quote of a Lender so
made shall be irrevocable except with the written consent of
the Administrative Agent given on the instructions of the
Borrower.
(2) Each Competitive Bid Quote shall be in
substantially the form of Exhibit C-3 hereto and shall in any
case specify:
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(1) the proposed Borrowing Date,
which shall be the same as that set forth in the
applicable Invitation for Competitive Bid Quotes,
(2) the principal amount of the
Competitive Bid Loan for which each such offer is
being made, which principal amount (x) may be greater
than, less than or equal to the Commitment of the
quoting Lender, (y) must be at least $5,000,000 and
an integral multiple of $1,000,000, and (z) may not
exceed the principal amount of Competitive Bid Loans
for which offers are requested,
(3) as applicable, the Competitive
LIBOR Margin and Absolute Rate offered for each such
Competitive Bid Loan,
(4) the minimum amount, if any, of
the Competitive Bid Loan which may be accepted by the
Borrower,
(5) the identity of the quoting
Lender, provided that such Competitive Bid Loan may
be funded by such Lender's Designated Lender as
provided in Section 2.16(j), regardless of whether
that is specified in the Competitive Bid Quote,
(6) whether or not such Competitive
Bid Loan shall be subject to prepayment.
(3) The Administrative Agent shall
reject any Competitive Bid Quote that:
(1) is not substantially in the
form of Exhibit C-3 hereto or does not specify all of
the information required by Section 2.16(d)(ii),
(2) contains qualifying, conditional
or similar language, other than any such language
contained in Exhibit C-3 hereto,
(3) proposes terms other than or in
addition to those set forth in the applicable
Invitation for Competitive Bid Quotes, or
(4) arrives after the time set forth
in Section 2.16(d)(i).
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If any Competitive Bid Quote shall be rejected pursuant to
this Section 2.16(d)(iii), then the Administrative Agent shall
notify the relevant Lender of such rejection as soon as
practical.
e. Notice to Borrower. The Administrative Agent shall promptly
notify the Borrower of the terms (i) of any Competitive Bid Quote submitted by a
Lender that is in accordance with Section 2.16(d) and (ii) of any Competitive
Bid Quote that amends, modifies or is otherwise inconsistent with a previous
Competitive Bid Quote submitted by such Lender with respect to the same
Competitive Bid Quote Request. Any such subsequent Competitive Bid Quote shall
be disregarded by the Administrative Agent unless such subsequent Competitive
Bid Quote specifically states that it is submitted solely to correct a manifest
error in such former Competitive Bid Quote. The Administrative Agent's notice to
the Borrower shall specify the aggregate principal amount of Competitive Bid
Loans for which offers have been received for each Interest Period specified in
the related Competitive Bid Quote Request and the respective principal amounts
and Competitive LIBOR Margins or Absolute Rate, as the case may be, so offered.
f. Acceptance and Notice by Borrower. Not later than (i) 6:00
p.m. (Chicago time) at least four Business Days prior to the proposed Borrowing
Date in the case of a request for a Competitive LIBOR Margin or (ii) 10:00 a.m.
(Chicago time) on the proposed Borrowing Date, in the case of a request for an
Absolute Rate (or, in either case upon reasonable prior notice to the Lenders,
such other time and date as the Borrower and the Administrative Agent may
agree), the Borrower shall notify the Administrative Agent of its acceptance or
rejection of the offers so notified to it pursuant to Section 2.16(e); provided,
however, that the failure by the Borrower to give such notice to the
Administrative Agent shall be deemed to be a rejection of all such offers. In
the case of acceptance, such notice (a "Competitive Bid Borrowing Notice") shall
specify the aggregate principal amount of offers for each Interest Period that
are accepted. The Borrower may accept any Competitive Bid Quote in whole or in
part (subject to the terms of Section 2.16(d)(iii)); provided that:
(1) the aggregate principal amount of all
Competitive Bid Loans to be disbursed on a given Borrowing
Date may not exceed the applicable amount set forth in the
related Competitive Bid Quote Request,
(2) acceptance of offers may only be made on
the basis of ascending Competitive LIBOR Margins or Absolute
Rates, as the case may be, and
(3) the Borrower may not accept any offer that
is described in Section 2.16(d)(iii) or that otherwise fails
to comply with the requirements of this Agreement.
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g. Allocation by Administrative Agent. If offers are made by
two or more Lenders with the same Competitive LIBOR Margins or Absolute Rates,
as the case may be, for a greater aggregate principal amount than the amount in
respect of which offers are accepted for the related Interest Period, the
principal amount of Competitive Bid Loans in respect of which such offers are
accepted shall be allocated by the Administrative Agent among such Lenders as
nearly as possible (in such multiples, not greater than $1,000,000, as the
Administrative Agent may deem appropriate) in proportion to the aggregate
principal amount of such offers provided, however, that no Lender shall be
allocated any Competitive Bid Loan which is less than the minimum amount which
such Lender has indicated that it is willing to accept. Allocations by the
Administrative Agent of the amounts of Competitive Bid Loans shall be conclusive
in the absence of manifest error. The Administrative Agent shall promptly, but
in any event on the same Business Day, notify each Lender of its receipt of a
Competitive Bid Borrowing Notice and the principal amounts of the Competitive
Bid Loans allocated to each participating Lender.
h. Administration Fee. The Borrower hereby agrees to pay to
the Administrative Agent an administration fee of $2,500 per each Competitive
Bid Quote Request transmitted by the Borrower to the Administrative Agent
pursuant to Section 2.16(b). Such administration fee shall be payable monthly in
arrears on the first Business Day of each month and on the Maturity Date (or
such earlier date on which the Aggregate Commitment shall terminate or be
cancelled) for any period then ending for which such fee, if any, shall not have
been theretofore paid.
i. Other Terms. Any Competitive Bid Loan shall not reduce the
Commitment of the Lender making such Competitive Bid Loan, and each such Lender
shall continue to be obligated to fund its full Percentage of all pro rata
Advances under the Facility. In no event can the aggregate amount of all
Competitive Bid Loans at any time exceed fifty percent (50%) of the then
Aggregate Commitment and when added to all Advances (including, without
limitation, LIBOR Advances, Fixed Rate Advances and CBR Advances) shall not
exceed the Aggregate Commitment. Competitive Bid Loans shall not be prepaid
prior to the end of the applicable Interest Period unless the Competitive Bid
Lender consents. Competitive Bid Loans may not be continued and, if not repaid
at the end of the Interest Period applicable thereto, shall (subject to the
conditions set forth in this Agreement) be replaced by new Competitive Bid Loans
made in accordance with this Section 2.16 or by ratable Advances in accordance
with Section 2.13.
j. Designated Lenders. A Lender may designate its Designated
Lender to fund a Competitive Bid Loan on its behalf as described in Section
2.16(d)(ii)(5). Any Designated Lender which funds a Competitive Bid Loan shall
on and after the time of such funding become the obligee under such Competitive
Bid Loan and be entitled to receive payment thereof when due. No Lender shall be
relieved of its obligation to fund a Competitive Bid Loan, and no Designated
Lender shall assume such obligation, prior to the time such Competitive Bid Loan
is funded.
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2.17. Fixed Rate Loans. In addition to the other interest rate options
provided herein, the Borrower may request a fixed rate ("Fixed Rate") on any
ratable Advance for up to one (1) year. The Fixed Rate shall be as quoted by the
Administrative Agent, subject to the approval of all of the Lenders. If Borrower
and Lenders agree to a Fixed Rate for all or a portion of the advances
outstanding hereunder, all the provisions contained herein for LIBOR Advances
shall be applicable to such Fixed Rate Advances with the Interest Period being
the period of time agreed to by Borrower and Lenders and the LIBOR Rate being
equal to the Fixed Rate agreed to by Borrower and Lenders.
2.18. Method of Payment. All payments of the Obligations hereunder
shall be made without setoff, deduction, or counterclaim, in immediately
available funds to the Administrative Agent at the Administrative Agent's
address specified pursuant to Article IX, or at any other Lending Installation
of the Administrative Agent specified in writing by the Administrative Agent to
the Borrower, by noon (local time) on the date when due and shall be applied
ratably by the Administrative Agent among the Lenders. Each payment delivered to
the Administrative Agent for the account of any Lender shall be delivered the
same business day if received by 1:00 p.m. Chicago time by the Administrative
Agent to such Lender in the same type of funds that the Administrative Agent
received at its address specified pursuant to Article IX or at any Lending
Installation specified in a notice received by the Administrative Agent from
such Lender. If the Administrative Agent fails to forward such payment by the
close of business on such Business Day, or, with respect to any other payment
received by the Administrative Agent after 1:00 p.m. Chicago time, on the same
Business Day as received by the Administrative Agent, the Administrative Agent
shall remit to each Lender its applicable Percentage of such payment on the
immediately following Business Day,together with interest thereon until payment
at the customary rate set by the Administrative Agent for the correction of
errors among banks for three Business Days and thereafter at the Corporate Base
Rate. The Administrative Agent is hereby authorized to charge the account of the
Borrower maintained with First Chicago for each payment of principal, interest
and fees as it becomes due hereunder.
2.19 Application of Moneys Received. All moneys collected or received
by the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
(i) to the payment of all reasonable costs incurred in the
collection of such moneys of which the Administrative Agent shall have
given notice to the Borrower;
(ii) to the reimbursement of any amounts due to any of the
Lenders in accordance with Article III;
(iii) to payment of the full amount of interest and
principal on the Swingline Loans;
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(iv) first to interest until paid in full and then to principal
for all Lenders (i) as allocated by the Borrower (unless a Default
exists) between Competitive Bid Loans and ratable Advances (the amount
allocated to ratable Advances to be distributed in accordance with the
Percentage of the Lenders) or (ii) if a Default exits, in accordance
with the respective Funded Percentage of the Lenders; and
(v) any other sums due to the Administrative Agent or any Lender
under any of the Loan Documents.
2.20. Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Borrower's Obligations under such Note. The Borrower hereby
authorizes the Lenders and the Administrative Agent to extend, convert or
continue Advances, effect selections of Types of Advances and to transfer funds
based on telephonic notices made by any person or persons the Administrative
Agent or any Lender in good faith believes to be an Authorized Officer of the
Borrower. The Borrower agrees to deliver promptly to the Administrative Agent a
written confirmation, if such confirmation is requested by the Administrative
Agent or any Lender, of each telephonic notice signed by an Authorized Officer.
If the written confirmation differs in any material respect from the action
taken by the Administrative Agent and the Lenders, the records of the
Administrative Agent and the Lenders shall govern absent manifest error.
2.21. Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each CBR Advance shall be payable on each Payment Date, commencing with the
first such date to occur after the date hereof, and at maturity. Interest
accrued on each LIBOR Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, on any date on which
such the LIBOR Advance is prepaid, whether by acceleration or otherwise, and at
maturity. Interest and facility fees shall be calculated for actual days elapsed
on the basis of a 360-day year. Interest shall be payable for the day an Advance
is made but not for the day of any payment on the amount paid if payment is
received prior to noon (local time) at the place of payment. If any payment of
principal of or interest on an Advance shall become due on a day which is not a
Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.22. Notification of Advances, Interest Rates, Prepayments and
Commitment Reductions. Promptly after receipt thereof, but in no event later
than 3:00 p.m. Chicago time on the same Business Day it is received with respect
to any Borrowing Notice or Conversion/Continuation Notice, the Administrative
Agent will notify each Lender of the contents of each Aggregate Commitment
reduction notice, Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The
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Administrative Agent will notify each Lender of the interest rate applicable to
each LIBOR Advance promptly upon determination of such interest rate and will
give each Lender prompt notice of each change in the Corporate Base Rate and the
Applicable Margin.
2.23. Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Administrative Agent and the Borrower, designate a Lending
Installation through which Loans will be made by it and for whose account Loan
payments are to be made.
2.24. Non-Receipt of Funds by the Administrative Agent. Unless the
Borrower or a Lender, as the case may be, notifies the Administrative Agent
prior to the date on which it is scheduled to make payment to the Administrative
Agent of (i) in the case of a Lender, the proceeds of a Loan or (ii) in the case
of the Borrower, a payment of principal, interest or fees to the Administrative
Agent for the account of the Lenders, that it does not intend to make such
payment, the Administrative Agent may assume that such payment will be made. The
Administrative Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Administrative Agent, the recipient of such payment shall, on
demand by the Administrative Agent, repay to the Administrative Agent the amount
so made available together with interest thereon in respect of each day during
the period commencing on the date such amount was so made available by the
Administrative Agent until the date the Administrative Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.25. Withholding Tax Exemption. At least five Business Days prior to
the first date on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to each of
the Borrower and the Administrative Agent two duly completed copies of United
States Internal Revenue Service Form 1001 or 4224, certifying in either case
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or withholding of any United States federal income
taxes. Each Lender which so delivers a Form 1001 or 4224 further undertakes to
deliver to each of the Borrower and the Administrative Agent two additional
copies of such form (or a successor form) on or before the date that such form
expires (currently, three successive calendar years for Form 1001 and one
calendar year for Form 4224) or becomes obsolete or after the occurrence of any
event requiring a change in the most recent forms so delivered by it, and such
amendments thereto or extensions or renewals thereof as may be reasonably
requested by the Borrower or the Administrative Agent, in each case certifying
that such Lender is entitled to receive payments under this Agreement and the
Notes without deduction or
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withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises the Borrower and the Administrative Agent that it is not
capable of receiving payments without any deduction or withholding of United
States federal income tax.
ARTICLE III
CHANGE IN CIRCUMSTANCES
3.1. Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive of a person
with regulatory powers over any Lender, or any interpretation thereof, or the
compliance of any Lender therewith,
(i) subjects any Lender or any applicable Lending
Installation to any tax, duty, charge or withholding
on or from payments due from the Borrower (excluding
federal state or local taxation of the overall net
income of any Lender or applicable Lending
Installation), or changes the basis of taxation of
payments to any Lender in respect of its Loans or
other amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve,
assessment, insurance charge, special deposit or
similar requirement against assets of, deposits with
or for the account of, or credit extended by, any
Lender or any applicable Lending Installation (other
than reserves and assessments taken into account in
determining the interest rate applicable to LIBOR
Advances), or
(iii) imposes any other condition the result of which is to
increase the cost to any Lender or any applicable
Lending Installation of making, funding or
maintaining Loans or reduces any amount receivable by
any Lender or any applicable Lending Installation in
connection with Loans, or requires any Lender or any
applicable Lending Installation to make any payment
calculated by reference to the amount of Loans held
or interest received by it, by an amount deemed
material by such Lender,
then, within 15 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender reasonably determines is attributable to making,
funding and maintaining its Loans and its Commitment.
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3.2. Changes in Capital Adequacy Regulations. If a Lender determines
the amount of capital required or expected to be maintained by such Lender, any
Lending Installation of such Lender or any corporation controlling such Lender
is increased as a result of a Change (as hereinafter defined), then, within 15
days of demand by such Lender, the Borrower shall pay such Lender the amount
necessary to compensate for any shortfall in the rate of return on the portion
of such increased capital which such Lender reasonably determines is
attributable to this Agreement, its Loans or its obligation to make Loans
hereunder (after taking into account such Lender's policies as to capital
adequacy). "Change" means (i) any change after the date of this Agreement in the
Risk-Based Capital Guidelines or (ii) any adoption of or change in any other
law, governmental or quasi-governmental rule, regulation, policy, guideline,
interpretation, or directive (whether or not having the force of law) after the
date of this Agreement which affects the amount of capital required or expected
to be maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Authorized Committee on Banking Regulation and
Supervisory Practices Entitled "International Convergence of Capital
Measurements and Capital Standards," including transition rules, and any
amendments to such regulations adopted prior to the date of this Agreement.
3.3. Availability of LIBOR Advances. If any Lender determines that
maintenance of any of its LIBOR Loans at a suitable Lending Installation would
violate any applicable law, rule, regulation or directive of a person with
regulatory powers over any Lender the Administrative Agent shall suspend the
availability of LIBOR Advances and require any LIBOR Advances to be repaid; or
if the Required Lenders determine that (i) by reasons of circumstances affecting
the relevant market, adequate and reasonable means do not exist for ascertaining
the LIBOR Rate, the Administrative Agent shall suspend the availability of LIBOR
Advances with respect to any LIBOR Advances made after the date of any such
determination, or (ii) an interest rate applicable to a LIBOR Advance does not
accurately reflect the cost of making a LIBOR Advance, then, if for any reason
whatsoever the provisions of Section 3.1 are inapplicable, the Administrative
Agent shall suspend the availability of LIBOR Advances with respect to any LIBOR
Advances made after the date of any such determination.
3.4. Funding Indemnification. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by the Borrower for any reason other than default by the
Lenders, the Borrower will indemnify each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
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3.5. Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1 and 3.2 or to avoid the
unavailability of a LIBOR Advance under Section 3.3, so long as such designation
is not materially disadvantageous to such Lender. Each Lender shall deliver a
written statement of such Lender as to the amount due, if any, under Sections
3.1, 3.2 or 3.4. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be final,
conclusive and binding on the Borrower in the absence of manifest error.
Determination of amounts payable under such Sections in connection with a LIBOR
Loan shall be calculated as though each Lender funded its LIBOR Loan through the
purchase of a deposit of the type and maturity corresponding to the deposit used
as a reference in determining the LIBOR Rate applicable to such Loan, whether in
fact that is the case or not. Unless otherwise provided herein, the amount
specified in the written statement shall be payable on demand after receipt by
the Borrower of the written statement. The obligations of the Borrower under
Sections 3.1, 3.2 and 3.4 shall survive payment of the Obligations and
termination of this Agreement.
ARTICLE IV
CONDITIONS PRECEDENT
4.1. Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the General Partner (in its capacity as the
general partner of the Borrower and as the Guarantor) and the Borrower have
furnished to the Administrative Agent, with sufficient copies for the Lenders,
the following:
(i) The duly executed originals of the Loan Documents,
including the Notes, payable to the order of each of
the Lenders, the Guaranty, and this Agreement;
(ii) Copies of the certificate of limited partnership of
the Borrower, together with all amendments, and a
certificate of good standing or partnership
qualification (if issued), both certified by the
appropriate governmental officer of the State of
Tennessee, and foreign qualification certificates,
certified by the appropriate governmental officer,
for each jurisdiction where the failure to so qualify
or be licensed (if required) would have a Material
Adverse Effect;
(iii) Copies, certified by an officer of the General
Partner of the Borrower, of its Partnership
Agreement, together with all amendments;
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(iv) Copies of the formation and organizational documents
of the Trust, together with all amendments, and a
certificate of good standing, both certified by the
appropriate governmental officer of the State of
Maryland, and foreign qualification certificates,
including, but not limited to, a Certificate of Trust
filed with the Secretary of State of Maryland,
certified by the appropriate governmental officer,
for each jurisdiction where the failure to so qualify
or be licensed (if required) would have a Material
Adverse Effect;
(v) An incumbency certificate, executed by an officer of
the General Partner, which shall identify by name and
title and bear the signature of the Persons
authorized to sign the Loan Documents and to make
borrowings hereunder on behalf of the Borrower, upon
which certificate the Administrative Agent and the
Lenders shall be entitled to rely until informed of
any change in writing by the Borrower;
(vi) Copies of the articles of incorporation of the
General Partner, together with all amendments, and a
certificate of good standing, both certified by the
appropriate governmental officer of the State of
Tennessee, and foreign qualification certificates,
certified by the appropriate governmental officer,
for each jurisdiction where the failure to so qualify
or be licensed (if required) would have a Material
Adverse Effect;
(vii) Copies, certified by the Secretary or Assistant
Secretary of the General Partner, of its by-laws,
together with all amendments, and of its Board of
Directors' resolutions (and resolutions of other
bodies, if any are deemed necessary by counsel for
any Lender) authorizing the borrowing provided for
herein and the execution, delivery and performance of
the Loan Documents by the General Partner to be
executed and delivered by it hereunder on behalf of
itself and the Borrower and of the Guaranty by the
General Partner and Trust in their capacity as the
Guarantors;
(viii) An incumbency certificate, executed by the Secretary
or Assistant Secretary of the General Partner and
Trust, respectively, which shall identify by name and
title and bear the signature of the officers of the
General Partner and Trust authorized to sign this
Agreement and the Guaranty;
(ix) A written opinion of the Borrower, General Partner
and Trust's counsel, addressed to the Lenders in
substantially the form of Exhibit "D" hereto;
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(x) A certificate, signed by an officer of the General
Partner of the Borrower, stating that on the initial
Borrowing Date no Default or Unmatured Default has
occurred and is continuing and that all
representations and warranties of the Borrower and
the General Partner are true and correct as of the
initial Borrowing Date;
(xi) The most recent financial statements of the General
Partner and the Borrower and a certificate from an
officer of the General Partner that no material
adverse change in the Borrower's or General Partner's
financial condition has occurred since the date of
such statements;
(xii) UCC financing statement, judgment, and tax lien
searches with respect to the Borrower, General
Partner and the Trust from Maryland and Tennessee;
(xiii) Written money transfer instructions, in substantially
the form of Exhibit "G" hereto, addressed to the
Administrative Agent and signed by an Authorized
Officer, together with such other related money
transfer authorizations as the Administrative Agent
may have reasonably requested;
(xiv) A Pricing Certificate prepared in accordance with
Section 2.4;
(xv) Such other documents as any Lender or its counsel may
have reasonably requested, the form and substance of
which documents shall be acceptable to the parties
and their respective counsel.
4.2. Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default.
(ii) The representations and warranties contained in
Article V and Article VI are true and correct as of
such Borrowing Date except to the extent any such
representation or warranty is stated to relate solely
to an earlier date, in which case such representation
or warranty shall be true and correct on and as of
such earlier date.
(iii) All legal matters incident to the making of such
Advance shall be satisfactory to the Lenders and
their counsel.
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Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the General Partner and the Borrower
that the conditions contained in Sections 4.2(i) and (ii) have been satisfied.
Any Lender may require a duly completed compliance certificate in substantially
the form of Exhibit E hereto as a condition to making an Advance.
ARTICLE V
BORROWER'S REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1. Existence. Borrower is a limited partnership duly organized and
validly existing under the laws of the State of Tennessee, with its principal
place of business in Columbia, Maryland, and is duly qualified as a foreign
partnership, properly licensed (if required), and has all requisite authority to
conduct its business in each of the jurisdictions listed on Schedule 1, which
are the only jurisdictions in which the failure to so qualify would have a
Material Adverse Effect upon the Borrower. The Borrower's Subsidiaries are
corporations or limited partnerships duly organized and validly existing under
the laws of the state of their jurisdiction, and are duly qualified as a foreign
corporations/partnerships, properly licensed (if required), in good standing and
have all requisite authority to conduct their businesses in each jurisdiction in
which the failure to so qualify would have a Material Adverse Effect.
5.2. Authorization and Validity. The Borrower has the power and
authority and legal right to execute and deliver the Loan Documents and to
perform its obligations thereunder. The execution and delivery by the Borrower
of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper proceedings, and such
Loan Documents constitute legal, valid and binding obligations of the Borrower
enforceable against the Borrower in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
5.3. No Conflict; Government Consent. Neither the execution and
delivery by the Borrower of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate any law, rule, regulation, order, writ, judgment, injunction,
decree or award binding on the Borrower or any of its Subsidiaries or the
Borrower's or any Subsidiary's articles of incorporation/certificates of limited
partnership or by-laws/partnership agreements or the provisions of any
indenture, instrument or agreement to which the Borrower or any of its
Subsidiaries is a party or is subject, or by which the Borrower or any of its
Subsidiaries or their respective Property, is bound, or conflict with or
constitute a default thereunder, or
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result in the creation or imposition of any Lien in, of or on the Property of
the Borrower or a Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents.
5.4. Material Adverse Change. Since September 30, 1997, there has been
no change in the business, Property, business prospects, condition (financial or
otherwise) or results of operations of the Borrower or its Subsidiaries which is
reasonably likely to have a Material Adverse Effect.
5.5. Taxes. The Borrower and its Subsidiaries have filed or caused to
be filed all United States federal tax returns and all other tax returns which
are required to be filed and have paid all taxes due pursuant to said returns or
pursuant to any assessment received by the Borrower or any of its Subsidiaries,
except such taxes, if any, as are being contested in good faith and as to which
adequate reserves have been provided. No tax liens have been filed and no claims
are being asserted with respect to any such taxes. The charges, accruals and
reserves on the books of the Borrower and its Subsidiaries in respect of any
taxes or other governmental charges are adequate.
5.6. Litigation and Guarantee Obligations. Except as set forth in
Schedule 4, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the Borrower or any of its Subsidiaries which if
adversely determined is reasonably likely to have a Material Adverse Effect. The
Borrower has no material contingent obligations not provided for or disclosed in
the financial statements referred to in Section 6.4.
5.7. Subsidiaries. Schedule 2 hereto contains an accurate list of all
of the presently existing Subsidiaries of the Borrower, setting forth, if such
Subsidiaries are corporations, their respective jurisdictions of incorporation
and the percentage of their respective Capital Stock owned by the Borrower or
other Subsidiaries and, if such Subsidiaries are not corporations, similar
appropriate information for such Subsidiaries. All of the issued and outstanding
shares of Capital Stock of such corporate Subsidiaries have been duly authorized
and issued and are fully paid and non-assessable.
5.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $100,000. Neither the Borrower nor any other member
of the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $100,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other members of
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the Controlled Group has withdrawn from any Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan.
5.9. Accuracy of Information. No information, exhibit or report
furnished by the Borrower or any of its Subsidiaries to the Administrative Agent
or to any Lender in connection with the negotiation of, or compliance with, the
Loan Documents contained any material misstatement of fact or omitted to state a
material fact or any fact necessary to make the statements contained therein not
misleading.
5.10. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower and its Subsidiaries
which are subject to any limitation on sale, pledge, or other restriction
hereunder.
5.11. Material Agreements. Neither the Borrower nor any Subsidiary is a
party to any agreement or instrument or subject to any charter or other
corporate restriction which could have a Material Adverse Effect. Neither the
Borrower nor any Subsidiary is in default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default is reasonably likely to have
a Material Adverse Effect or (ii) any agreement or instrument evidencing or
governing Indebtedness.
5.12. Compliance With Laws. The Borrower and its Subsidiaries have
complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. Neither the Borrower
nor any Subsidiary has received any notice to the effect that its operations are
not in material compliance with any of the requirements of applicable federal,
state and local environmental, health and safety statutes and regulations or the
subject of any federal or state investigation evaluating whether any remedial
action is needed to respond to a release of any toxic or hazardous waste or
substance into the environment, which non-compliance or remedial action could
have a Material Adverse Effect.
5.13. Ownership of Properties. Except as set forth on Schedule 3
hereto, on the date of this Agreement, the Borrower and its Subsidiaries will
have good title, free of all Liens other than those permitted by Section 8.17,
to all of the Property and assets reflected in the financial statements as owned
by it.
5.14. Investment Company Act. Neither the Borrower nor any Subsidiary
thereof is an "investment company" or a company "controlled" by an "investment
company", within the meaning of the Investment Company Act of 1940, as amended.
5.15. Public Utility Holding Company Act. Neither the Borrower nor
any Subsidiary is a "holding company" or a "subsidiary company" of a "holding
company", or an
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"affiliate" of a "holding company" or of a "subsidiary company" of a "holding
company", within the meaning of the Public Utility Holding Company Act of 1935,
as amended.
5.16. Solvency. (i) Immediately after the Closing Date and immediately
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the Borrower and
its Subsidiaries on a consolidated basis, at a fair valuation, will exceed the
debts and liabilities, subordinated, contingent or otherwise, of the Borrower
and its Subsidiaries on a consolidated basis; (b) the present fair saleable
value of the property of the Borrower and its Subsidiaries on a consolidated
basis will be greater than the amount that will be required to pay the probable
liability of the Borrower and its Subsidiaries on a consolidated basis on their
debts and other liabilities, subordinated, contingent or otherwise, as such
debts and other liabilities become absolute and matured; (c) the Borrower and
its Subsidiaries on a consolidated basis will be able to pay their debts and
liabilities, subordinated, contingent or otherwise, as such debts and
liabilities become absolute and matured; and (d) the Borrower and its
Subsidiaries on a consolidated basis will not have unreasonably small capital
with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
(ii) The Borrower does not intend to, does not intend to permit any of
its Subsidiaries to, and does not believe that it or any of its Subsidiaries
will, incur debts beyond its ability to pay such debts as they mature, taking
into account the timing of and amounts of cash to be received by it or any such
Subsidiary and the timing of the amounts of cash to be payable on or in respect
of its Indebtedness or the Indebtedness of any such Subsidiary.
5.17. Insurance. The Borrower and each of its Subsidiaries carries
insurance on its Property, including its Storage Properties, with insurance
companies having Best ratings of A-VII or better in such amounts, with such
deductibles and covering such risks as are customarily carried by companies
engaged in similar businesses and owning similar Property in localities where
the Borrower operates, including, without limitation:
(i) Property and casualty insurance (including coverage
for flood and other water damage for any Storage
Properties located within a 100-year flood plain) in
the amount of the replacement cost of the
improvements at the Storage Properties;
(ii) Loss of rental income insurance in the amount not
less than one year's gross revenues from the
Properties; and
(iii) Comprehensive general liability insurance in the
amount of $5,000,000 per occurrence.
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ARTICLE VI
GENERAL PARTNER'S REPRESENTATIONS AND WARRANTIES
The General Partner represents and warrants to the Lenders that:
6.1. Corporate Existence and Standing. The General Partner is a
corporation duly incorporated, validly existing and in good standing under the
laws of its jurisdiction of incorporation and has all requisite authority to
conduct its business in each jurisdiction in which the failure to qualify would
have a Material Adverse Effect.
6.2. Authorization and Validity. The General Partner has the corporate
power and authority and legal right to execute and deliver the Loan Documents to
which it is a party (including the Guaranty in its capacity as Guarantor) and to
perform its obligations thereunder. The execution and delivery by the General
Partner of the Loan Documents to which it is a party and the performance of its
obligations thereunder have been duly authorized by proper corporate
proceedings, and such Loan Documents constitute legal, valid and binding
obligations of the General Partner enforceable against the General Partner in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally.
6.3. No Conflict; Government Consent. Neither the execution and
delivery by the General Partner of the Loan Documents, to which it is a party
nor the consummation of the transactions therein contemplated, nor compliance
with the provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the General Partner or any of
its Subsidiaries or the General Partner's or any Subsidiary's articles of
incorporation/certificates of limited partnership or by-laws/partnership
agreements or the provisions of any indenture, instrument or agreement to which
the General Partner or any of its Subsidiaries is a party or is subject, or by
which the General Partner's or any of its Subsidiaries' Property, is bound, or
conflict with or constitute a default thereunder, or result in the creation or
imposition of any Lien in, of or on the Property of the General Partner or a
Subsidiary pursuant to the terms of any such indenture, instrument or agreement.
No order, consent, approval, license, authorization, or validation of, or
filing, recording or registration with, or exemption by, any governmental or
public body or authority, or any subdivision thereof, is required to authorize,
or is required in connection with the execution, delivery and performance of, or
the legality, validity, binding effect or enforceability of, any of the Loan
Documents to which the General Partner is a party.
6.4. Financial Statements. The September 30, 1997 consolidated
financial statements and related reports of the General Partner and its
Subsidiaries heretofore delivered to the Lenders were prepared in accordance
with generally accepted accounting principles in effect on the date such
statements were prepared and fairly present the consolidated financial
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condition and operations of the General Partner and its Subsidiaries at such
date and the consolidated results of their operations for the period then ended.
6.5. Material Adverse Change. Since September 30, 1997, there has been
no change in the business, Property, business prospects, condition (financial or
otherwise) or results of operations of the General Partner and its Subsidiaries
which is reasonably likely to have a Material Adverse Effect.
6.6. Taxes. The General Partner and its Subsidiaries have filed or
caused to be filed all United States federal tax returns and all other tax
returns which are required to be filed and have paid all taxes due pursuant to
said returns or pursuant to any assessment received by the General Partner or
any of its Subsidiaries, except such taxes, if any, as are being contested in
good faith and as to which adequate reserves have been provided. No tax liens
have been filed and no claims are being asserted with respect to any such taxes.
The charges, accruals and reserves on the books of the General Partner and its
Subsidiaries in respect of any taxes or other governmental charges are adequate.
6.7. Litigation and Guarantee Obligations. Except as set forth in
Schedule 4, there is no litigation, arbitration, governmental investigation,
proceeding or inquiry pending or, to the knowledge of any of their officers,
threatened against or affecting the General Partner or any of its Subsidiaries
which if adversely determined is reasonably likely to have a Material Adverse
Effect. The General Partner has no material contingent obligations not provided
for or disclosed in the financial statements referred to in Section 6.4.
6.8. Subsidiaries. Schedule 2 hereto contains an accurate list of all
of the presently existing Subsidiaries of the General Partner, setting forth, if
such Subsidiaries are corporations, their respective jurisdictions of
incorporation and the percentage of their respective Capital Stock owned by the
General Partner or other Subsidiaries and, if such Subsidiaries are not
corporations, similar appropriate information for such Subsidiaries. All of the
issued and outstanding shares of Capital Stock of such corporate Subsidiaries
have been duly authorized and issued and are fully paid and non-assessable.
6.9. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $100,000. Neither the General Partner nor any other
member of the Controlled Group has incurred, or is reasonably expected to incur,
any withdrawal liability to Multiemployer Plans in excess of $100,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the General Partner nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan.
6.10. Accuracy of Information. No information, exhibit or report
furnished by the General Partner or any of its Subsidiaries to the
Administrative Agent or to any Lender in connection with the negotiation of, or
compliance with, the Loan Documents contained any
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material misstatement of fact or omitted to state a material fact or any fact
necessary to make the statements contained therein not misleading.
6.11. Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the General Partner and its
Subsidiaries which are subject to any limitation on sale, pledge, or other
restriction hereunder.
6.12. Material Agreements. Neither the General Partner nor any
Subsidiary is a party to any agreement or instrument or subject to any charter
or other corporate restriction which could have a Material Adverse Effect.
Neither the General Partner nor any Subsidiary is in default in the performance,
observance or fulfillment of any of the obligations, covenants or conditions
contained in (i) any agreement to which it is a party, which default is
reasonably likely to have a Material Adverse Effect or (ii) any agreement or
instrument evidencing or governing Indebtedness.
6.13. Compliance With Laws. The General Partner and its Subsidiaries
have complied with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. Neither the General
Partner nor any Subsidiary has received any notice to the effect that its
operations are not in material compliance with any of the requirements of
applicable federal, state and local environmental, health and safety statutes
and regulations or the subject of any federal or state investigation evaluating
whether any remedial action is needed to respond to a release of any toxic or
hazardous waste or substance into the environment, which non-compliance or
remedial action could have a Material Adverse Effect.
6.14. Ownership of Properties. Except as set forth on Schedule 3
hereto, on the date of this Agreement, the General Partner and its Subsidiaries
will have good title, free of all Liens other than those permitted by Section
8.17, to all of the Property and assets reflected in the financial statements as
owned by it.
6.15. Investment Company Act. Neither the General Partner nor any
Subsidiary thereof is an "investment company" or a company "controlled" by an
"investment company", within the meaning of the Investment Company Act of 1940,
as amended.
6.16. Public Utility Holding Company Act. Neither the General Partner
nor any Subsidiary is a "holding company" or a "subsidiary company" of a
"holding company", or an "affiliate" of a "holding company" or of a "subsidiary
company" of a "holding company", within the meaning of the Public Utility
Holding Company Act of 1935, as amended.
6.17. Insurance. The General Partner and each of its Subsidiaries,
carries insurance on its Property, including its Storage Properties, with
insurance companies having Best ratings of A-VII or better in such amounts, with
such deductibles and covering such risks as
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are customarily carried by companies engaged in similar businesses and owning
similar Property in localities where the General Partner operates, including,
without limitation:
(i) Property and casualty insurance (including coverage
for flood and other water damage for any Storage
Properties located within a 100-year flood plain) in
the amount of the replacement cost of the
improvements at the Storage Properties;
(ii) Loss of rental income insurance in the amount not
less than one year's gross revenues from the
Properties; and
(iii) Comprehensive general liability insurance in the
amount of $5,000,000 per occurrence.
6.18. Solvency. (i) Immediately after the Closing Date and immediately
following the making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of the General
Partner and its Subsidiaries on a consolidated basis, at a fair valuation, will
exceed the debts and liabilities, subordinated, contingent or otherwise, of the
General Partner and its Subsidiaries on a consolidated basis; (b) the present
fair saleable value of the property of the General Partner and its Subsidiaries
on a consolidated basis will be greater than the amount that will be required to
pay the probable liability of the General Partner and its Subsidiaries on a
consolidated basis on their debts and other liabilities, subordinated,
contingent or otherwise, as such debts and other liabilities become absolute and
matured; (c) the General Partner and its Subsidiaries on a consolidated basis
will be able to pay their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and matured; and (d)
the General Partner and its Subsidiaries on a consolidated basis will not have
unreasonably small capital with which to conduct the businesses in which they
are engaged as such businesses are now conducted and are proposed to be
conducted after the date hereof.
(ii) The General Partner does not intend to, does not intend to permit
any of its Subsidiaries to, and does not believe that it or any of its
Subsidiaries will, incur debts beyond its ability to pay such debts as they
mature, taking into account the timing of and amounts of cash to be received by
it or any such Subsidiary and the timing of the amounts of cash to be payable on
or in respect of its Indebtedness or the Indebtedness of any such Subsidiary.
6.19. REIT Status. The General Partner's common stock is listed on the
New York Stock Exchange and the General Partner is qualified and will at all
times maintain its qualification as a real estate investment trust and comply
with all applicable provisions of the Code.
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ARTICLE VII
TRUST'S REPRESENTATIONS AND WARRANTIES
The Trust represents and warrants to the Lender that:
7.1 Corporate Existence and Standing. The Trust is a Maryland business
trust, duly organized, validly existing and in good standing under the laws of
the State of Maryland and has all requisite authority to conduct its business in
each jurisdiction in which the failure to qualify would have a Material Adverse
Effect.
7.2 Authorization and Validity. The Trust has the organizational power
and authority and legal right to execute and deliver the Loan Documents to which
it is a party, including without limitation the Guaranty, and to perform its
obligations thereunder. The execution and delivery by the Trust of the Loan
Documents to which it is a party and the performance of its obligations
thereunder have been duly authorized by the trustees thereof, and such Loan
Documents constitute legal, valid and binding obligations of the Trust
enforceable against the Trust in accordance with their terms, except as
enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
7.3 No Conflict; Government Consent. Neither the execution and delivery
by the Trust of the Loan Documents to which it is a party nor the consummation
of the transactions therein contemplated, nor compliance with the provisions
thereof will violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Trust or the Trust's organizational
documents or the provisions of any indenture, instrument or agreement to which
the Trust is a party or is subject, or by which the Trust's Property is bound,
or conflict with or constitute a default thereunder, or result in the creation
or imposition of any Lien in, of or on the Property of the Trust pursuant to the
terms of any such indenture, instrument or agreement. No order, consent,
approval, license, authorization, or validation of, or filing, recording or
registration with, or exemption by, any governmental or public body or
authority, or any subdivision thereof, is required to authorize, or is required
in connection with the execution, delivery and performance of, or the legality,
validity, binding effect or enforceability of, any of the Loan Documents to
which the Trust is a party.
ARTICLE VIII
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
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8.1. Financial Reporting. The General Partner and the Borrower will
maintain, for themselves and each Subsidiary, a system of accounting established
and administered in accordance with GAAP, and furnish to the Lenders:
(i) Within 45 days after the close of each fiscal
quarter, for the General Partner consolidated with
its Subsidiaries, an unaudited balance sheet as of
the close of each such period a statement of
operations and reconciliation of stockholders equity
and a statement of cash flows for the period from the
beginning of the fiscal year to the end of such
quarter, all certified by the General Partner's chief
financial officer or chief accounting officer;
(ii) Together with the financial statements required
hereunder, a compliance certificate in substantially
the form of Exhibit E hereto signed by the General
Partner's chief financial officer or chief accounting
officer showing the calculations necessary to
determine compliance with this Agreement and stating
that no Default or Unmatured Default exists, or if
any Default or Unmatured Default exists, stating the
nature and status thereof;
(iii) Within 45 days after the close of each fiscal
quarter, for themselves and their Subsidiaries,
related reports in form and substance satisfactory to
the Lenders, all certified by the entity's chief
financial officer or chief accounting officer,
including a statement of Funds From Operations,
listing of capital expenditures, report of newly
acquired Properties, including their net operating
income, cost and mortgage debt, if any, and summary
Property information and other information as may be
reasonably requested;
(iv) As soon as possible and in any event within 10 days
after the Borrower knows that any Reportable Event
has occurred with respect to any Plan, a statement,
signed by the chief financial officer of the
Borrower, describing said Reportable Event and the
action which the Borrower proposes to take with
respect thereto;
(v) As soon as possible and in any event within 10 days
after receipt by the Borrower, a copy of (a) any
notice or claim to the effect that the Borrower or
any of its Subsidiaries is or may be liable to any
Person as a result of the release by the Borrower,
any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the
environment, and (b) any notice alleging any
violation of any federal, state or local
environmental, health or safety law or regulation by
the Borrower or any of its Subsidiaries, which, in
either case, is reasonably likely to have a Material
Adverse Effect;
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(vi) Promptly upon the furnishing thereof to the
shareholders of the General Partner or the holder of
the partnership interests in the Borrower, copies of
all financial statements, reports and proxy
statements or other information so furnished;
(vii) Promptly upon the filing thereof, copies of all
registration statements and annual, quarterly,
monthly or other reports and any other public
information which the General Partner, the Borrower
or any of their Subsidiaries files with the
Securities and Exchange Commission; and
(viii) Such other information (including, without
limitation, financial statements for the Borrower and
non-financial information) as the Administrative
Agent may from time to time reasonably request.
8.2. Use of Proceeds. The General Partner and the Borrower will, and
will cause each of their Subsidiaries to, use the proceeds of the Advances for
the general business purposes of the Borrower, including working capital needs
and interim financing for property acquisitions, and to repay outstanding
Advances. The Borrower will not, nor will it permit any Subsidiary to, use any
of the proceeds of the Advances to purchase or carry any "margin stock" (as
defined in Regulation U) or to make any Acquisition other than a Permitted
Acquisition.
8.3. Notice of Default. The General Partner and the Borrower will, and
will cause each of their Subsidiaries to, give prompt notice in writing to the
Lenders of the occurrence of any Default or Unmatured Default and of any other
development, financial or otherwise, which is reasonably likely to have a
Material Adverse Effect.
8.4. Conduct of Business. The General Partner and the Borrower will,
and will cause each of their Subsidiaries to, do all things necessary to remain
duly incorporated or duly qualified as a limited partnership (as applicable),
validly existing and in good standing as a domestic corporation or limited
partnership in its jurisdiction of incorporation/formation and maintain all
requisite authority to conduct its business in each jurisdiction in which its
business is conducted and to carry on and conduct their businesses in
substantially the same manner as they are presently conducted and, specifically,
neither the Borrower, the General Partner nor their respective Subsidiaries may
undertake any business other than the development, ownership, management and
operation of storage properties, and ancillary businesses reasonably related to
storage properties. The Borrower, General Partner and such Subsidiaries may
manage storage properties for third party accounts, provided that if such third
party management exceeds 15% of the annual Consolidated Cash Flow, such excess
amount shall be excluded for purposes of determining compliance with the
financial covenants set forth in this Agreement.
8.5. Taxes. The General Partner and the Borrower will, and will
cause each of their Subsidiaries to, pay when due all taxes, assessments and
governmental charges and
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levies upon them of their income, profits or Property, except those which are
being contested in good faith by appropriate proceedings and with respect to
which adequate reserves have been set aside.
8.6. Insurance. The General Partner and the Borrower will, and will
cause each of their Subsidiaries to, maintain with insurance companies having
Best ratings of A-VII or better insurance on all their Property in such amounts
and covering such risks as is consistent with sound business practice, and the
Borrower will furnish to any Lender upon request full information as to the
insurance carried.
8.7. Compliance with Laws. The General Partner and the Borrower will,
and will cause each of their Subsidiaries to, comply with all laws, rules,
regulations, orders, writs, judgments, injunctions, decrees or awards to which
they may be subject unless the compliance with such laws, rules, regulations,
orders, writs, judgements, injunctions, decrees or awards is being diligently
contested in good faith and by appropriate proceedings, provided that such
action is not reasonably likely to result in a Material Adverse Effect.
8.8. Maintenance of Properties. The General Partner and the Borrower
will, and will cause each of their Subsidiaries to, do all things necessary to
maintain, preserve, protect and keep its Property in good repair, working order
and condition, and make all necessary and proper repairs, renewals and
replacements so that their businesses carried on in connection therewith may be
properly conducted at all times.
8.9. Inspection. The General Partner and the Borrower will, and will
cause each of their Subsidiaries to, permit the Administrative Agent, to inspect
any of the Property, corporate books and financial records of the General
Partner, the Borrower and each of their Subsidiaries, to examine and make copies
of the books of accounts and other financial records of the General Partner, the
Borrower and each of their Subsidiaries, and to discuss the affairs, finances
and accounts of the General Partner, the Borrower and each of their
Subsidiaries, and to be advised as to the same by the Administrative Agent at
such reasonable times and intervals as the Lenders may designate.
8.10. Maintenance of Status. The General Partner shall at all times (i)
maintain the listing of its common stock on the New York Stock Exchange, and
(ii) maintain its status as a real estate investment trust in compliance with
all applicable provisions of the Code.
8.11. Dividends. The General Partner will not, nor will it permit any
Subsidiary to, declare or pay any dividends on its Capital Stock if, in any
period of four fiscal quarters, such dividends, in the aggregate, would exceed
90% of the General Partner's Funds From Operations for such period, provided,
however, that unless a Default has occurred under Section 9.2, the General
Partner shall be permitted at all times to distribute whatever amount is
necessary to maintain its tax status as a real estate investment trust.
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8.12. Merger. The General Partner and the Borrower will not, nor will
they permit any of their Subsidiaries to, enter into any merger, consolidation,
reorganization or liquidation or transfer or otherwise dispose of all or a
Substantial Portion of their Properties, except for such transactions that occur
between Wholly-Owned Subsidiaries or as otherwise approved in advance by the
Lenders, provided, however, that mergers shall be permitted as a means for the
Borrower or the General Partner or a Subsidiary to acquire additional Storage
Properties or ancillary businesses reasonably related to Storage Properties so
long as such merger is not accomplished through a hostile takeover and the
Borrower is the surviving entity.
8.13. General Partner's Ownership and Control of Borrower. At all times
during the entire term of this Agreement (i) the REIT shall be the sole
beneficial owner of the Trust, (ii) the Trust shall not incur any indebtedness,
(iii) the Trust shall not suffer or permit to exist any Liens against its
Property, and (iv) the Trust shall not own any Property other than its interest
in the Borrower and (v) there will be no reduction in the General Partner's
ownership and control of Borrower. The General Partner will not allow or suffer
to exist any pledge, other encumbrance or the conversion to limited partnership
interests of any of the general partnership interests in the Borrower without
the prior written consent of the Lenders.
8.14. Sale of Accounts. The General Partner and the Borrower will not,
nor will they permit any of their Subsidiaries to, sell or otherwise dispose of
any notes receivable or accounts receivable, with or without recourse except in
the ordinary course of business.
8.15. Sale and Leaseback. The General Partner and the Borrower will
not, nor will they permit any of their Subsidiaries to, sell or transfer any of
its Property in order to concurrently or subsequently lease as lessee such or
similar Property.
8.16. Acquisitions and Investments. The General Partner and the
Borrower will not, nor will they permit any of their Subsidiaries to:
(i) make any Acquisition, except for (a) mergers
permitted pursuant to Section 8.12 and (b) other
Acquisitions of additional Storage Properties or
ancillary businesses reasonably related to Storage
Properties not otherwise prohibited by this Section
8.16;
(ii) make any Acquisition of any single additional Storage
Property if the cost of such property would be more
than $20,000,000; and
(iii) make any investments in, or loans or advances to, any
unconsolidated Person to the extent such investments,
loans and advances in the aggregate would exceed ten
percent (10%) of the Total Tangible Assets of the
General Partner and the Borrower on a consolidated
basis.
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Acquisitions permitted pursuant to this Section 8.16 shall be deemed to be
"Permitted Acquisitions".
8.17. Liens. The General Partner and the Borrower will not, nor will
they permit any of their Subsidiaries to, create, incur, or suffer to exist any
Lien in, of or on the Property of the Borrower or any of its Subsidiaries in an
aggregate consolidated amount greater than $50,000, except for:
(i) Liens for taxes, assessments or governmental charges
or levies on its Property if the same shall not at
the time be delinquent or thereafter can be paid
without penalty, or are being contested in good faith
and by appropriate proceedings and for which adequate
reserves shall have been set aside on its books;
(ii) Liens imposed by law, such as carriers',
warehousemen's and mechanics' liens and other similar
liens arising in the ordinary course of business
which secure payment of obligations not more than 60
days past due or which are being contested in good
faith by appropriate proceedings and for which
adequate reserves shall have been set aside on its
books;
(iii) Liens arising out of pledges or deposits under
worker's compensation laws, unemployment insurance,
old age pensions, or other social security or
retirement benefits, or similar legislation;
(iv) Utility easements, building restrictions and such
other encumbrances or charges against real property
as are of a nature generally existing with respect to
properties of a similar character and which do not in
any material way affect the marketability of the same
or interfere with the use thereof in the business of
the General Partner, the Borrower or their
Subsidiaries;
(v) Liens existing on the date hereof and described in
Schedule 3 hereto; and
(vi) Liens arising in connection with any Indebtedness
permitted hereunder.
Liens permitted pursuant to this Section 8.18 shall be deemed to be "Permitted
Liens".
8.18. Affiliates. The General Partner and the Borrower will not, nor
will they permit any of their Subsidiaries to, enter into any transaction
(including, without limitation, the purchase or sale of any Property or service)
with, or make any payment or transfer to, any Affiliate except in the ordinary
course of business and pursuant to the reasonable requirements of the General
Partner's, the Borrower's or such Subsidiary's business and
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upon fair and reasonable terms no less favorable to the General Partner, the
Borrower or such Subsidiary than the General Partner, the Borrower or such
Subsidiary would obtain in a comparable arms-length transaction.
8.19. Current DSC Ratio. The Borrower and General Partner on a
consolidated basis with their respective Subsidiaries shall maintain a Current
DSC Ratio of not less than 2.5. Such test must be satisfied as of the end of
each fiscal quarter, based on annualized results for the preceding two fiscal
quarters.
8.20. Consolidated Tangible Net Worth. The Borrower and General Partner
on a consolidated basis with their respective Subsidiaries shall maintain a
Consolidated Tangible Net Worth of not less than the sum of (i) $600,000,000
plus (ii) fifty percent (50%) of the aggregate proceeds received by the General
Partner (net of customary related fees and expenses) in connection with any
offering of stock in the General Partner after the Closing Date.
8.21. Indebtedness and Cash Flow Covenants. The Borrower and General
Partner on a consolidated basis with their respective Subsidiaries shall not, as
of the last day of any fiscal quarter, permit:
(i) Consolidated Total Indebtedness to exceed forty-five
percent (45%) of Total Tangible Assets;
(ii) Consolidated Secured Indebtedness to exceed fifteen
percent (15%) of Total Tangible Assets;
(iii) the Value of Unencumbered Assets to be less than 2.25
times the Consolidated Senior Unsecured Indebtedness;
and
(iv) Annualized Consolidated Cash Flow to be less than
fifteen percent (15%) of Consolidated Total
Indebtedness.
ARTICLE IX
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
9.1. Any representation or warranty made or deemed made by or on
behalf of the General Partner, the Borrower or any of their Subsidiaries to the
Lenders or the Administrative Agent under or in connection with this Agreement,
any Loan, or any
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certificate or information delivered in connection with this Agreement or any
other Loan Document shall be materially false on the date as of which made.
9.2. Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under any
of the Loan Documents within five days after the same becomes due.
9.3. The breach of any of the terms or provisions of Sections 8.2
and 8.11 through 8.21.
9.4. The breach by the General Partner or the Borrower (other than a
breach which constitutes a Default under Section 9.1, 9.2, or 9.3) of any of the
terms or provisions of this Agreement which is not remedied within ten Business
Days after written notice from the Administrative Agent or any Lender provided,
however, that if such Default is not curable within such time period, it shall
not constitute a Default if the Borrower has commenced appropriate actions to
effect a cure within ten days and diligently proceeds thereafter to effect a
cure and cures such Default in no event later than 45 days after such written
notice.
9.5. Failure of the General Partner, the Borrower or any of their
Subsidiaries to pay when due any Indebtedness which is outstanding in an
aggregate amount of at least $10,000,000; or the default by the General Partner,
the Borrower or any of their Subsidiaries in the performance of any term,
provision or condition contained in any agreement under which such Indebtedness
was created or is governed, or any other event shall occur or condition exist,
the effect of which is to cause, or to permit the holder or holders of such
Indebtedness to cause, such Indebtedness to become due prior to its stated
maturity; or any such Indebtedness of the General Partner, the Borrower or any
of their Subsidiaries shall be declared to be due and payable or required to be
prepaid (other than by a regularly scheduled payment) prior to the stated
maturity thereof; or the General Partner, the Borrower or any of their
Subsidiaries shall not pay, or admit in writing its inability to pay, its debts
generally as they become due.
9.6. The General Partner, the Borrower or any of their Subsidiaries
that has more than $20,000,000 of Total Tangible Assets shall (i) have an order
for relief entered with respect to it under the Federal bankruptcy laws as now
or hereafter in effect, (ii) make an assignment for the benefit of creditors,
(iii) apply for, seek, consent to, or acquiesce in, the appointment of a
receiver, custodian, trustee, examiner, liquidator or similar official for it or
any Substantial Portion of its Property, (iv) institute any proceeding seeking
an order for relief under the Federal bankruptcy laws as now or hereafter in
effect or seeking to adjudicate it a bankrupt or insolvent, or seeking
dissolution, winding up, liquidation, reorganization, arrangement, adjustment or
composition of it or its debts under any law relating to bankruptcy, insolvency
or reorganization or relief of debtors or fail to file an answer or other
pleading denying the material allegations of any such proceeding filed against
it, (v) take any corporate action to authorize or effect any of the foregoing
actions set
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forth in this Section 9.6 or (vi) fail to contest in good faith any appointment
or proceeding described in Section 9.7.
9.7. A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the General Partner, the Borrower or any Subsidiary that
has more than $20,000,000 of Total Tangible Assets or any Substantial Portion of
their Property, or a proceeding described in Section 9.6(iv) shall be instituted
against the General Partner, the Borrower or any such Subsidiary and such
appointment continues undischarged or such proceeding continues undismissed or
unstayed for a period of 30 consecutive days.
9.8. Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the General Partner, the Borrower and
their Subsidiaries which, when taken together with all other Property of the
General Partner, the Borrower and their Subsidiaries so condemned, seized,
appropriated, or taken custody or control of, during the twelve-month period
ending with the month in which any such Condemnation occurs, constitutes a
Substantial Portion of their Property.
9.9. The General Partner, the Borrower or any of their Subsidiaries
shall fail within 30 days to pay, bond or otherwise discharge any judgment or
order for the payment of money in excess of $5,000,000, which is not stayed on
appeal or otherwise being appropriately contested in good faith.
9.10. The Unfunded Liabilities of all Single Employer Plans shall
exceed in the aggregate $200,000 or any Reportable Event shall occur in
connection with any Plan.
9.11. The General Partner, the Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that it has incurred withdrawal liability to such Multiemployer Plan in an
amount which, when aggregated with all other amounts required to be paid to
Multiemployer Plans by the General Partner, the Borrower or any other member of
the Controlled Group as withdrawal liability (determined as of the date of such
notification), exceeds $500,000 or requires payments exceeding $1,000,000 per
annum.
9.12. The General Partner, the Borrower or any other member of the
Controlled Group shall have been notified by the sponsor of a Multiemployer Plan
that such Multiemployer Plan is in reorganization or is being terminated, within
the meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the General Partner, the
Borrower and the other members of the Controlled Group (taken as a whole) to all
Multiemployer Plans which are then in reorganization or being terminated have
been or will be increased over the amounts contributed to such Multiemployer
Plans for the respective plan years of each such Multiemployer Plan immediately
preceding the plan year in which the reorganization or termination occurs by an
amount exceeding $200,000.
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9.13. Failure to remediate within the time period permitted by law or
governmental order (or within a reasonable time give the nature of the problem
if no specific time period has been given) material environmental problems
related to the Storage Properties whose aggregate book values are in excess of
$20,000,000 or where the estimated cost of remediation is in the aggregate in
excess of $100,000, in each case after all administrative and judicial hearings
and appeals have been concluded.
9.14. The Guaranty shall fail to remain in full force or effect or any
action shall be taken to discontinue or to assert the invalidity or
unenforceability of the Guaranty, or the Guarantor shall fail to comply with any
of the terms or provisions of the Guaranty, or the Guarantor denies that it has
any further liability under the Guaranty, or gives notice to such effect.
9.15. The occurrence of any default under any Loan Document or the
breach of any of the terms or provisions of any Loan Document, which default or
breach continues beyond any period of grace therein provided.
ARTICLE X
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
10.1. Acceleration. If any Default described in Section 9.6 or 9.7
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Administrative Agent or any Lender. If any other Default occurs, the
Required Lenders may terminate or suspend the obligations of the Lenders to make
Loans hereunder, or declare the Obligations to be due and payable, or both,
whereupon the Obligations shall become immediately due and payable, without
presentment, demand, protest or notice of any kind, all of which the Borrower
hereby expressly waives.
If, within 10 days after acceleration of the maturity of the
Obligations or termination of the obligations of the Lenders to make Loans
hereunder as a result of any Default (other than any Default as described in
Section 9.6 or 9.7 with respect to the Borrower) and before any judgment or
decree for the payment of the Obligations due shall have been obtained or
entered, the Required Lenders (in their sole discretion) shall so direct, the
Administrative Agent shall, by notice to the Borrower, rescind and annul such
acceleration and/or termination.
10.2. Amendments. Subject to the provisions of this Article IX, the
Required Lenders (or the Administrative Agent with the consent in writing of the
Required Lenders) and the General Partner, the Trust, and the Borrower may enter
into agreements supplemental hereto for the purpose of adding or modifying any
provisions to the Loan
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Documents or changing in any manner the rights of the Lenders or the General
Partner, the Trust, and the Borrower hereunder or waiving any Default hereunder;
provided, however, that no such supplemental agreement shall, without the
consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note or forgive
all or any portion of the principal amount thereof,
or reduce the rate or extend the time of payment of
interest or fees thereon.
(ii) Reduce the percentage specified in the definition of
Required Lenders.
(iii) Extend the Facility Termination Date or reduce the
amount or extend the payment date for, the mandatory
payments required under Section 2.2 (other than as
provided for under Section 2.2), or increase the
amount of the Commitment of any Lender hereunder, or
permit the Borrower to assign its rights under this
Agreement.
(iv) Amend Section 2.19.
(v) Amend this Section 10.2.
(vi) Release the Guarantor.
No amendment of any provision of this Agreement relating to the Administrative
Agent shall be effective without the written consent of the Administrative
Agent.
10.3. Preservation of Rights. No delay or omission of the Lenders or
the Administrative Agent to exercise any right under the Loan Documents shall
impair such right or be construed to be a waiver of any Default or an
acquiescence therein, and the making of a Loan notwithstanding the existence of
a Default or the inability of the Borrower to satisfy the conditions precedent
to such Loan shall not constitute any waiver or acquiescence. Any single or
partial exercise of any such right shall not preclude other or further exercise
thereof or the exercise of any other right, and no waiver, amendment or other
variation of the terms, conditions or provisions of the Loan Documents
whatsoever shall be valid unless in writing signed by the Lenders required
pursuant to Section 10.2, and then only to the extent in such writing
specifically set forth. All remedies contained in the Loan Documents or by law
afforded shall be cumulative and all shall be available to the Administrative
Agent and the Lenders until the Obligations have been paid in full.
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ARTICLE XI
GENERAL PROVISIONS
11.1. Survival of Representations. All representations and warranties
of the General Partner and the Borrower contained in this Agreement shall
survive delivery of the Notes and the making of the Loans herein contemplated.
11.2. Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
11.3. Taxes. Any taxes (excluding federal state or local income taxes
on the overall net income of any Lender) or other similar assessments or charges
made by any governmental or revenue authority in respect of the Loan Documents
shall be paid by the Borrower, together with interest and penalties, if any.
11.4. Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
11.5. Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent and the Lenders
and supersede all prior agreements and understandings among the Borrower, the
Administrative Agent and the Lenders relating to the subject matter thereof.
11.6. Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Administrative Agent is authorized to act as such). The failure of any Lender to
perform any of its obligations hereunder shall not relieve any other Lender from
any of its obligations hereunder. This Agreement shall not be construed so as to
confer any right or benefit upon any Person other than the parties to this
Agreement and their respective successors and assigns.
11.7. Expenses; Indemnification. The Borrower shall reimburse the
Administrative Agent for any costs, internal charges and out-of-pocket expenses
(including, without limitation, all reasonable fees for consultants and fees and
reasonable expenses for attorneys for the Administrative Agent, which attorneys
may be employees of the Administrative Agent) paid or incurred by the
Administrative Agent in connection with the preparation, negotiation, execution,
delivery, review, amendment, modification, and administration of the Loan
Documents. The Borrower also agrees to reimburse the Administrative Agent and
the Lenders for any costs, internal charges and out-of-pocket expenses
(including, without limitation, all fees and reasonable expenses for attorneys
for the Administrative Agent and
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the Lenders, which attorneys may be employees of the Administrative Agent or the
Lenders) paid or incurred by the Administrative Agent or any Lender in
connection with the collection and enforcement of the Loan Documents (including,
without limitation, any workout). The Borrower further agrees to indemnify the
Administrative Agent and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Administrative Agent or any Lender is a
party thereto) which any of them may pay or incur arising out of or relating to
this Agreement, the other Loan Documents, the Properties, the transactions
contemplated hereby or the direct or indirect application or proposed
application of the proceeds of any Loan hereunder, except as otherwise provided
by this Section 11.7. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
11.8. Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Administrative Agent with
sufficient counterparts so that the Administrative Agent may furnish one to each
of the Lenders.
11.9. Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the General Partner and the Borrower and all their Subsidiaries,
including those Subsidiaries, if any, which are unconsolidated on the General
Partner's or Borrower's official financial statements.
11.10. Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
11.11. Nonliability of Lenders. The relationship between the General
Partner and the Borrower, on the one hand, and the Lenders and the
Administrative Agent, on the other, shall be solely that of borrower and lender.
Neither the Administrative Agent nor any Lender shall have any fiduciary
responsibilities to the General Partner or the Borrower. Neither the
Administrative Agent nor any Lender undertakes any responsibility to the General
Partner or the Borrower to review or inform the General Partner or the Borrower
of any matter in connection with any phase of the General Partner's or the
Borrower's business or operations.
11.12. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND
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NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT GIVING EFFECT TO FEDERAL
LAWS APPLICABLE TO NATIONAL BANKS.
11.13. CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH
COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO
THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT
SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE
ADMINISTRATIVE AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN
THE COURTS OF ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER
AGAINST THE ADMINISTRATIVE AGENT OR ANY LENDER OR ANY AFFILIATE OF THE
ADMINISTRATIVE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER
IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT SHALL
BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
11.14. WAIVER OF JURY TRIAL. THE BORROWER, THE ADMINISTRATIVE AGENT AND
EACH LENDER HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING,
DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR
OTHERWISE) IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN
DOCUMENT OR THE RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE XII
THE ADMINISTRATIVE AGENT
12.1. Appointment. The First National Bank of Chicago is hereby
appointed Administrative Agent hereunder and under each other Loan Document, and
each of the Lenders irrevocably authorizes the Administrative Agent to act as
the administrative agent of such Lender. The Administrative Agent agrees to act
as such upon the express conditions contained in this Article XII. The
Administrative Agent shall administer this Agreement and service the Loans with
the same degree of care as Agent would use in servicing a loan of same size and
type for its own account. The Administrative Agent shall not have a fiduciary
relationship in respect of the Borrower or any Lender by reason of this
Agreement. The Co-
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Agents shall have no duties or responsibilities (other than as a Lender) unless
otherwise agreed to by such Co-Agent and the Administrative Agent.
12.2. Powers. The Administrative Agent shall have and may exercise such
powers under the Loan Documents as are specifically delegated to the
Administrative Agent by the terms of each thereof, together with such powers as
are reasonably incidental thereto. The Administrative Agent shall have no
implied duties to the Lenders, or any obligation to the Lenders to take any
action thereunder except any action specifically provided by the Loan Documents
to be taken by the Administrative Agent.
12.3. General Immunity. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Borrower, the
Lenders or any Lender for (i) any action taken or omitted to be taken by it or
them hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct; or
(ii) any determination by the Administrative Agent that compliance with any law
or any governmental or quasi-governmental rule, regulation, order, policy,
guideline or directive (whether or not having the force of law) requires the
Advances and Commitments hereunder to be classified as being part of a "highly
leveraged transaction".
12.4. No Responsibility for Loans, Recitals, etc. Neither the
Administrative Agent nor any of its directors, officers, agents or employees
shall be responsible for or have any duty to ascertain, inquire into, or verify
(i) any statement, warranty or representation made in connection with any Loan
Document or any borrowing hereunder; (ii) the performance or observance of any
of the covenants or agreements of any obligor under any Loan Document,
including, without limitation, any agreement by an obligor to furnish
information directly to each Lender; (iii) the satisfaction of any condition
specified in Article IV, except receipt of items required to be delivered to the
Administrative Agent; (iv) the validity, effectiveness or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or priority of
any interest in any collateral security. Except to the extent expressly required
pursuant to the terms and provisions of the Agreement the Administrative Agent
shall have no duty to disclose to the Lenders information that is not required
to be furnished by the General Partner or the Borrower to the Administrative
Agent at such time, but is voluntarily furnished by the General Partner or the
Borrower to the Administrative Agent (either in its capacity as Administrative
Agent or in its individual capacity).
12.5. Action on Instructions of Lenders. The Administrative Agent shall
in all cases act upon the written instructions of the Required Lenders or all
Lenders, as this Agreement may require, so long as such directions (i) are
consistent with the Lender's express obligations hereunder and (ii) in the
Administrative Agent's good faith judgment, do not expose the Administrative
Agent to any material risk or liability to the Borrowers as a result thereof.
The Administrative Agent shall be fully protected in so acting, or in refraining
from acting, hereunder and under any other Loan Document in accordance with
written instructions signed by the Required Lenders, and such instructions and
any action taken or
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failure to act pursuant thereto shall be binding on all of the Lenders and on
all holders of Notes. The Administrative Agent shall be fully justified in
failing or refusing to take any action hereunder and under any other Loan
Document unless it shall first be indemnified to its satisfaction by the Lenders
pro rata against any and all liability, cost and expense that it may incur by
reason of taking or continuing to take any such action.
12.6. Employment of Administrative Agents and Counsel. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Loan Document by or through employees, agents, and
attorneys-in-fact and shall not be answerable to the Lenders, except as to money
or securities received by it or its authorized agents, for the default or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care. The Administrative Agent shall be entitled to advice of counsel
concerning all matters pertaining to the agency hereby created and its duties
hereunder and under any other Loan Document.
12.7. Reliance on Documents; Counsel. The Administrative Agent shall be
entitled to rely upon any Note, notice, consent, certificate, affidavit, letter,
telegram, statement, paper or document believed by it to be genuine and correct
and to have been signed or sent by the proper person or persons, and, in respect
to legal matters, upon the opinion of counsel selected by the Administrative
Agent, which counsel may be employees of the Administrative Agent.
12.8. Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent in its
capacity as Administrative Agent only and not as Lender, ratably in proportion
to their respective Commitments (i) for any amounts not reimbursed by the
Borrower for which the Administrative Agent is entitled to reimbursement by the
Borrower under the Loan Documents, (ii) for any other expenses incurred by the
Administrative Agent on behalf of the Lenders, in connection with the
preparation, execution, delivery, administration and enforcement of the Loan
Documents and (iii) for any liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, expenses or disbursements of any
kind and nature whatsoever which may be imposed on, incurred by or asserted
against the Administrative Agent in any way relating to or arising out of the
Loan Documents or any other document delivered in connection therewith or the
transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the (a) gross negligence
or willful misconduct of the Administrative Agent or (b) matters particularly
related to Administrative Agent in its capacity as a Lender only and not related
Borrower or another Lender (i.e., a violation of Administrative Agent's legal
lending limit). The obligations of the Lenders under this Section 12.8 shall
survive payment of the Obligations and termination of this Agreement.
12.9. Rights as a Lender. In the event the Administrative Agent is a
Lender, the Administrative Agent shall have the same rights and powers hereunder
and under any other Loan Document as any Lender and may exercise the same as
though it were not the
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Administrative Agent, and the term "Lender" or "Lenders" shall, at any time when
the Administrative Agent is a Lender, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The Administrative
Agent may accept deposits from, lend money to, and generally engage in any kind
of trust, debt, equity or other transaction, in addition to those contemplated
by this Agreement or any other Loan Document, with the Borrower or any of its
Subsidiaries in which the Borrower or such Subsidiary is not restricted hereby
from engaging with any other Person. The Administrative Agent, in its individual
capacity, is not obligated to remain a Lender.
12.10. Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent or any other
Lender and based on the financial statements prepared by the Borrower and such
other documents and information as it has deemed appropriate, made its own
credit analysis and decision to enter into this Agreement and the other Loan
Documents. Each Lender also acknowledges that it will, independently and without
reliance upon the Administrative Agent or any other Lender and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under this
Agreement and the other Loan Documents.
12.11. Successor Administrative Agent. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation to be effective upon the appointment of a successor
Administrative Agent or, if no successor Administrative Agent has been
appointed, forty-five days after the retiring Administrative Agent gives notice
of its intention to resign. If the Administrative Agent assigns or participates
its total Commitment, then Administrative Agent agrees to resign upon the
request of any Lender. Upon any such resignation, the Required Lenders shall
have the right to appoint, on behalf of the Borrower and the Lenders, a
successor Administrative Agent. If no successor Administrative Agent shall have
been so appointed by the Required Lenders within thirty days after the resigning
Administrative Agent's giving notice of its intention to resign, then the
resigning Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. If the Administrative Agent has
resigned and no successor Administrative Agent has been appointed, the Lenders
may perform all the duties of the Administrative Agent hereunder and the
Borrower shall make all payments in respect of the Obligations to the applicable
Lender and for all other purposes shall deal directly with the Lenders. No
successor Administrative Agent shall be deemed to be appointed hereunder until
such successor Administrative Agent has accepted the appointment. Any such
successor Administrative Agent shall be a commercial bank having capital and
retained earnings of at least $500,000,000. Upon the acceptance of any
appointment as Administrative Agent hereunder by a successor Administrative
Agent, such successor Administrative Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the resigning
Administrative Agent. Upon the effectiveness of the resignation of the
Administrative Agent, the resigning Administrative Agent shall pro rate any
agency fees it has already received with the successor Administrative Agent, and
the resigning Administrative Agent shall be discharged from its
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duties and obligations hereunder as Administrative Agent and under the Loan
Documents arising or occurring after the effective date of such resignation.
After the effectiveness of the resignation of an Administrative Agent, the
provisions of this Article XI shall continue in effect for the benefit of such
Administrative Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Administrative Agent hereunder and under the other
Loan Documents.
12.12. Administrative Agent's Fee. The Borrower agrees to pay to the
Administrative Agent, for its own account, the fees agreed to by the Borrower
and the Administrative Agent pursuant to that certain letter agreement dated
December 9, 1997, or as otherwise agreed from time to time.
12.13. Notice of Defaults. If a Lender becomes aware of a Default or
Unmatured Default, such Lender shall notify the Administrative Agent of such
fact. Upon receipt of such notice that a Default or Unmatured Default has
occurred, the Administrative Agent shall notify each of the Lenders of such
fact.
12.14 Requests for Approval. If the Administrative Agent requests in
writing the consent or approval of a Lender, such Lender shall respond and
either approve or disapprove definitively in writing to the Administrative Agent
within ten Business Days (or sooner if such notice specifies a shorter period,
but in no event less than five Business Days, for responses based on
Administrative Agent's good faith determination that circumstances exist
warranting its request for an earlier response) after such written request from
the Administrative Agent. If the Lender does not so respond, that Lender shall
be deemed to have approved the request. Upon request, the Administrative Agent
shall notify the Lenders which Lenders, if any, failed to respond to a request
for approval.
12.15 Copies of Documents. Administrative Agent shall promptly deliver
to each of the Lenders copies of all notices of default and other formal notices
sent or received and according to Section 15.1 of this Agreement. Administrative
Agent shall deliver to Lenders within 10 Business Days following receipt, copies
of all financial statements and other financial reporting information,
certificates and notices received regarding the Borrower's ratings except to the
extent such items are required to be furnished directly to the Lenders by
Borrower hereunder. Within 10 Business Days after a request by a Lender to the
Administrative Agent for other documents furnished to the Administrative Agent
by the Borrower, the Administrative Agent shall provide copies of such documents
to such Lender except where this Agreement obligates Administrative Agent to
provide copies in a shorter period of time.
12.16 Defaulting Lenders. At such time as a Lender becomes a Defaulting
Lender, such Defaulting Lender's right to vote on matters which are subject to
the consent or approval of the Majority or Required Lenders or all Lenders,
shall be immediately suspended until such time as the Lender is no longer a
Defaulting Lender and the calculation of Required Lenders shall be made without
reference to such Defaulting Lender's Percentage.
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If a Defaulting Lender has failed to fund its Percentage of any Advance and
until such time as such Defaulting Lender subsequently funds its Percentage of
such Advance, all Obligations owing to such Defaulting Lender hereunder shall be
subordinated in right of payment, as provided in the following sentence, to the
prior payment in full of all principal of, interest on and fees relating to the
Loans funded by the other Lenders in connection with any such Advance in which
the Defaulting Lender has not funded its Percentage (such principal, interest
and fees being referred to as "Senior Loans" for the purposes of this section).
All amounts paid by the Borrower in connection with ratable Loans and otherwise
due to be applied to the Obligations owing to such Defaulting Lender pursuant to
the terms hereof shall be distributed by the Administrative Agent to the other
Lenders in accordance with their respective Percentages (recalculated for the
purposes hereof to exclude the Defaulting Lender) until all Senior Loans have
been paid in full. At that point, the "Defaulting Lender" shall no longer be
deemed a Defaulting Lender and the remainder of the Advances due to such
"Defaulting Lender" shall no longer be subordinated but shall be payable on the
same basis as payments to the other Lenders. After the Senior Loans have been
paid in full equitable adjustments will be made in connection with future
payments by the Borrower to the extent a portion of the Senior Loans had been
repaid with amounts that otherwise would have been distributed to a Defaulting
Lender but for the operation of this Section 12.15. This provision governs only
the relationship among the Administrative Agent, each Defaulting Lender and the
other Lenders; nothing hereunder shall limit the obligation of the Borrower to
repay all Loans in accordance with the terms of this Agreement. The provisions
of this Section 12.16 shall apply and be effective regardless of whether a
Default occurs and is continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of the Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters as provided above.
ARTICLE XIII
SETOFF; RATABLE PAYMENTS
13.1. Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if the Borrower becomes insolvent, however
evidenced, or any Default or Unmatured Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due. Any Lender may, by
separate agreement with the Borrower, waive such set-off rights with respect to
deposits held by such Lender, which waiver shall be binding upon all other
Lenders as to deposits held by such Lender.
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13.2. Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Sections 3.1, 3.2 or 3.4) in a greater proportion than that received by any
other Lender, such Lender agrees, promptly upon demand, to purchase a portion of
the Loans held by the other Lenders so that after such purchase each Lender will
hold its ratable proportion of Loans. If any Lender, whether in connection with
setoff or amounts which might be subject to setoff or otherwise, receives
collateral or other protection for its Obligations or such amounts which may be
subject to setoff, such Lender agrees, promptly upon demand, to take such action
necessary such that all Lenders share in the benefits of such collateral ratably
in proportion to their Loans. In case any such payment is disturbed by legal
process, or otherwise, appropriate further adjustments shall be made.
ARTICLE XIV
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
14.1. Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 14.3. Notwithstanding clause (ii) of this Section, any Lender may
at any time, without the consent of the Borrower or the Administrative Agent,
assign all or any portion of its rights under this Agreement and its Notes to a
Federal Reserve Bank; provided, however, that no such assignment shall release
the transferor Lender from its obligations hereunder. The Administrative Agent
may treat the payee of any Note as the owner thereof for all purposes hereof
unless and until such payee complies with Section 13.3 in the case of an
assignment thereof or, in the case of any other transfer, a written notice of
the transfer is filed with the Administrative Agent. Any assignee or transferee
of a Note agrees by acceptance thereof to be bound by all the terms and
provisions of the Loan Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is the holder of any Note, shall be conclusive and binding on any
subsequent holder, transferee or assignee of such Note or of any Note or Notes
issued in exchange therefor.
14.2. Participations.
14.2.1 Permitted Participants; Effect. Any Lender, in the
ordinary course of its business and in accordance with applicable law,
at any time may sell to one or more financial institutions, pension
funds, or any other fund or entity that regularly makes or participates
in real estate loans as part of its business participating interests in
any Loan owing to such Lender, any Note held by such Lender, any
Commitment of such Lender or any other interest of such Lender under
the Loan Documents. If a
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Default has occurred and is continuing, a Lender shall not be
restricted as to whom it can sell such participating interests. Any
Person to whom such a participating interest is sold is a
"Participant". In the event of any such sale by a Lender of
participating interests to a Participant, such Lender's obligations
under the Loan Documents shall remain unchanged, such Lender shall
remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the holder of
any such Note for all purposes under the Loan Documents, all amounts
payable by the Borrower under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the Borrower
and the Administrative Agent shall continue to deal solely and directly
with such Lender in connection with such Lender's rights and
obligations under the Loan Documents.
14.2.2. Voting Rights. Each Lender shall retain the sole right
to approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other
than any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which forgives
principal, interest or fees or reduces the interest rate or fees
payable with respect to any such Loan or Commitment, postpones any date
fixed for any regularly-scheduled payment of principal of, or interest
or fees on, any such Loan or Commitment, releases any guarantor of any
such Loan or releases any substantial portion of collateral, if any,
securing any such Loan.
14.2.3. Benefit of Setoff. The General Partner and the
Borrower agree that each Participant shall be deemed to have the right
of setoff provided in Section 12.1 in respect of its participating
interest in amounts owing under the Loan Documents to the same extent
as if the amount of its participating interest were owing directly to
it as a Lender under the Loan Documents, provided that each Lender
shall retain the right of setoff provided in Section 13.1 with respect
to the amount of participating interests sold to each Participant. The
Lenders agree to share with each Participant, and each Participant, by
exercising the right of setoff provided in Section 13.1, agrees to
share with each Lender, any amount received pursuant to the exercise of
its right of setoff, such amounts to be shared in accordance with
Section 13.2 as if each Participant were a Lender.
14.3. Assignments.
14.3.1. Permitted Assignments. Any Lender, in the ordinary
course of its business and in accordance with applicable law, at any
time may assign to one or more financial institutions, pension funds,
or any other fund or entity that regularly makes or participates in
real estate loans as part of its business all or any portion (greater
than or equal to $5,000,000 per assignee) of its rights and obligations
under the Loan Documents. If a Default has occurred and is continuing,
a Lender shall not be restricted as to whom it can assign such rights
and obligations. Any Person to whom such rights and obligations are
assigned is a "Purchaser". Such assignment
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shall be substantially in the form of Exhibit F hereto or in such other
form as may be agreed to by the parties thereto.
14.3.2. Effect; Effective Date. Upon (i) delivery to the
Administrative Agent of a notice of assignment, substantially in the
form attached as Exhibit I to Exhibit F hereto (a "Notice of
Assignment"), and (ii) payment of a $3,500 fee to the Administrative
Agent for processing such assignment (except for transfer to an
Affiliate), such assignment shall become effective on the effective
date specified in such Notice of Assignment. The Notice of Assignment
shall contain a representation by the Purchaser to the effect that none
of the consideration used to make the purchase of the Commitment and
Loans under the applicable assignment agreement are "plan assets" as
defined under ERISA and that the rights and interests of the Purchaser
in and under the Loan Documents will not be "plan assets" under ERISA.
On and after the effective date of such assignment, such Purchaser
shall for all purposes be a Lender party to this Agreement and any
other Loan Document executed by the Lenders and shall have all the
rights and obligations of a Lender under the Loan Documents, to the
same extent as if it were an original party hereto, and no further
consent or action by the Borrower, the Lenders or the Administrative
Agent shall be required to release the transferor Lender with respect
to the percentage of the Aggregate Commitment and Loans assigned to
such Purchaser. Upon the consummation of any assignment to a Purchaser
pursuant to this Section 14.3.2, the transferor Lender, the
Administrative Agent and the Borrower shall make appropriate
arrangements so that replacement Notes are issued to such transferor
Lender and new Notes or, as appropriate, replacement Notes, are issued
to such Purchaser, in each case in principal amounts reflecting their
Commitment, as adjusted pursuant to such assignment.
14.4. Dissemination of Information. The General Partner and the
Borrower authorize each Lender to disclose to any Participant or Purchaser or
any other Person acquiring an interest in the Loan Documents by operation of law
(each a "Transferee") and any prospective Transferee any and all information in
such Lender's possession concerning the creditworthiness of the General Partner,
the Borrower and their Subsidiaries provided that such transferrees shall be
subject to an obligation to keep all non-public information confidential.
14.5. Tax Treatment. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States or any State thereof, the transferor
Lender shall cause such Transferee, concurrently with the effectiveness of such
transfer, to comply with the provisions of Section 2.19.
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ARTICLE XV
NOTICES
15.1. Giving Notice. Except as otherwise permitted by Section 2.16 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by telex or by facsimile and addressed or delivered to such party at
its address set forth below its signature hereto or at such other address as may
be designated by such party in a notice to the other parties. Any notice, if
mailed and properly addressed with postage prepaid, shall be deemed given when
received; any notice, if transmitted by telex or facsimile, shall be deemed
given when transmitted (answerback confirmed in the case of telexes).
15.2. Change of Address. The General Partner, the Trust, the Borrower,
the Administrative Agent and any Lender may each change the address for service
of notice upon it by a notice in writing to the other parties hereto.
ARTICLE XVI
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Administrative Agent and the Lenders and each party has notified the
Administrative Agent by telex or telephone, that it has taken such action.
IN WITNESS WHEREOF, the Borrower, the General Partner, the Trust, the
Lenders and the Administrative Agent have executed this Agreement as of the date
first above written.
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SUSA PARTNERSHIP L.P.
By: STORAGE USA, INC.,
its General Partner
By:
Print Name:
Title:
c/o Storage USA, Inc.
30 Corporate Center
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
Attention: Christopher P. Marr
Telephone: (410) 730-9500
Facsimile: (410) 730-3426
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STORAGE USA, INC.
By:
Print Name:
Title:
c/o Storage USA, Inc.
30 Corporate Center
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
Attention: Christopher P. Marr
Telephone: (410) 730-9500
Facsimile: (410) 730-3426
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STORAGE USA TRUST
By:
Print Name:
Title:
c/o Storage USA, Inc.
30 Corporate Center
10440 Little Patuxent Parkway
Suite 1100
Columbia, Maryland 21044
Attention: Christopher P. Marr
Telephone: (410) 730-9500
Facsimile: (410) 730-3426
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Commitments:
$30,000,000 THE FIRST NATIONAL BANK OF
CHICAGO, Individually and as
Administrative Agent
By:
Print Name:
Title:
One First National Plaza
Chicago, Illinois 60670
Attention: Kevin L. Gillen
Telephone: (312) 732-1486
Facsimile: (312) 732-1117
$25,000,000 AMSOUTH BANK, Individually and
as Co-Agent
By:
Print Name:
Title:
1900 5th Avenue, North
Amsouth South Sonat Tower, 9th Floor
Birmingham, AL 35288
Attention: Lawrence Clark
Telephone: (205) 581-7493
Facsimile: (205) 326-4075
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Commitments:
$25,000,000 FIRST UNION BANK, Individually and
as Co-Agent
By:
Print Name:
Title:
One First Union Center, DC-6
Charlotte, NC 28288-0166
Attention: John A. Schissel
Telephone: (704) 383-1967
Facsimile: (704) 383-6205
$25,000,000 BANK OF AMERICA NATIONAL
TRUST AND SAVINGS ASSOCIATION,
Individually and as Co-Agent
By:
Print Name:
Title:
231 South LaSalle Street
Chicago, Illinois 60697-1516
Attention: Mickey Edwards
Telephone: (312) 828-5175
Facsimile: (312) 974-4970
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Commitments:
$20,000,000 CRESTAR BANK
By:
Print Name:
Title:
8245 Boone Boulevard, Suite 820
Vienna, Virginia 22182
Attention: Gregory T. Horstman
Telephone: (703) 902-9384
Facsimile: (703) 902-9190
$15,000,000 NATIONAL BANK OF COMMERCE
By:
Print Name:
Title:
One Commerce Square
Memphis, Tennessee 38150
Attention: Donald Abel
Telephone: (901) 523-3396
Facsimile: (901) 529-4653
-69-
<PAGE>
Commitments:
$10,000,000 UNION PLANTERS BANK
By:
Print Name:
Title:
6200 Poplar
Memphis, Tennessee 38119
Attention: Leonard McKinnon
Telephone: (901) 580-5481
Facsimile: (901) 580-5451
-70-
<PAGE>
EXHIBIT A
PRICING GRID
<TABLE>
<CAPTION>
====================================================================================================================================
Ratings: At least At least At least At least Below
S&P & Moody's A- and A3 BBB+ and BBB and BBB- and either
Baa1 Baa2 Baa3 BBB- or
Baa3
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Corporate Base Rate 0 0 0 20 60
Margin*
- ------------------------------------------------------------------------------------------------------------------------------------
LIBOR Margin* 65 80 90 100 135
- ------------------------------------------------------------------------------------------------------------------------------------
Facility Fee Rate 15 20 20 20 25
- ------------------------------------------------------------------------------------------------------------------------------------
- ------------------------------------------------------------------------------------------------------------------------------------
All-in Funded Cost 80 100 110 120 160
====================================================================================================================================
</TABLE>
* = in basis points per annum
All margins and fees change as and when the rating classification changes.
The Corporate Base Rate Margin and the LIBOR Margin to be used in calculating
the interest rate applicable to different Types of Advances shall vary from time
to time in accordance with the long-term unsecured debt ratings from Moody's and
S&P of the General Partner and the Borrower. All margins and fees change as and
when the rating classification changes. In the event the General Partner and the
Borrower have different ratings, the rating of the higher rated entity shall be
used. In the event the rating agencies are split on the rating for the higher
rated entity, the lower rating for the higher rated entity shall be deemed to be
the applicable rating (e.g., if the higher rated entity's Moody's debt rating is
Baa1 and its S&P debt rating is BBB then the Applicable Margins shall be
computed based on the S&P rating), and the Applicable Margins shall be adjusted
effective on the next Business Day following any change in the higher rated
entity's Moody's debt rating and/or S&P's debt rating, as the case may be. In
the event that either S&P or Moody's shall discontinue their ratings of the REIT
industry or the Borrower, a mutually agreeable substitute rating agency shall be
selected by the Required Lenders and the Borrower. If the Required Lenders and
the Borrower cannot agree on a substitute rating agency within thirty (30) days
of such discontinuance, or if both S&P and Moody's shall discontinue their
ratings of the REIT industry or the Borrower, the Applicable Margin to be used
for the calculation of interest on Advances hereunder shall be the highest
Applicable Margin for each Type.
-71-
<PAGE>
EXHIBIT B-1
NOTE
$___________________________ December , 1997
---
SUSA Partnership L.P., a Tennessee limited partnership (the
"Borrower"), promises to pay to the order of (the "Lender") the lesser of the
principal sum of Dollars or the aggregate unpaid principal amount of all Loans
made by the Lender to the Borrower pursuant to the Amended and Restated
Unsecured Revolving Credit Agreement hereinafter referred to without setoff or
counterclaim, in immediately available funds at the main office of The First
National Bank of Chicago in Chicago, Illinois, as Administrative Agent, together
with interest on the unpaid principal amount hereof at the rates and on the
dates set forth in the Agreement. The Borrower shall pay the principal of and
accrued and unpaid interest on the Loans in full on the Facility Termination
Date.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date and amount of each Loan and the date and amount of each principal
payment hereunder.
This Note is one of the Notes issued pursuant to, and is entitled to
the benefits of, the Amended and Restated Unsecured Revolving Credit Agreement,
dated as of December , 1997 among the Borrower, Storage USA, Inc., The First
National Bank of Chicago, individually and as Administrative Agent, and the
lenders named therein, including the Lender, to which Agreement, as it may be
amended from time to time, reference is hereby made for a statement of the terms
and conditions governing this Note, including the terms and conditions under
which this Note may be prepaid or its maturity date accelerated. Capitalized
terms used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
SUSA PARTNERSHIP L.P.
By: STORAGE USA, INC.
Its General Partner
By:
Print Name:
Title:
-72-
<PAGE>
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF SUSA PARTNERSHIP L.P.
DATED DECEMBER ___, 1997
<TABLE>
<CAPTION>
Principal Maturity of Maturity
Amount Interest Principal Unpaid
Date of Loan Period Amount Paid Balance
<S> <C>
</TABLE>
-73-
<PAGE>
EXHIBIT B-2
FORM OF COMPETITIVE BID NOTE
__________, 1997
On or before the last day of each "Interest Period" applicable to a
"Competitive Bid Loan", as defined in that certain Amended and Restated
Unsecured Revolving Credit Agreement dated as of _______________, 1997 (the
"Agreement") between SUSA PARTNERSHIP L.P., a Tennessee limited partnership (the
"Borrower"), whose sole general partner is STORAGE USA, INC., a Tennessee
corporation (the "General Partner"), and THE FIRST NATIONAL BANK OF CHICAGO, a
national bank organized under the laws of the United States of America,
individually and as Administrative Agent for the Lenders and others (as such
terms are defined in the Agreement), Borrower promises to pay to the order of
_________________________ (the "Lender"), or its successors and assigns, the
unpaid principal amount of such Competitive Bid Loan made by the Lender to the
Borrower pursuant to Section 2.16 of the Agreement without setoff or
counterclaim, in immediately available funds at the office of the main
Administrative Agent in Chicago, Illinois, together with interest on the unpaid
principal amount hereof at the rates and on the dates set forth in the
Agreement. The Borrower shall pay any remaining unpaid principal amount of such
Competitive Bid Loans and any accrued and unpaid interest under this Competitive
Bid Note ("Note") in full on or before the Facility Termination Date in
accordance with the terms of the Agreement.
The Lender shall, and is hereby authorized to, record on the schedule
attached hereto, or to otherwise record in accordance with its usual practice,
the date, amount and due date of each Competitive Bid Loan and the date and
amount of each principal payment hereunder.
This Note is issued pursuant to, and is entitled to the security under
and benefits of, the Agreement and the other Loan Documents, to which Agreement
and Loan Documents, as they may be amended from time to time, reference is
hereby made for, inter alia, a statement of the terms and conditions under which
this Note may be prepaid or its maturity date accelerated. Capitalized terms
used herein and not otherwise defined herein are used with the meanings
attributed to them in the Agreement.
If there is an Unmatured Default or Default under the Agreement or any
other Loan Document and Lender exercises its remedies provided under the
Agreement and/or any of the Loan Documents, then in addition to all amounts
recoverable by the Lender under such documents, Lender shall be entitled to
receive reasonable attorneys fees and expenses incurred by Lender in exercising
such remedies.
-74-
<PAGE>
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this Note
(except as otherwise expressly provided for in the Agreement), and any and all
lack of diligence or delays in collection or enforcement of this Note, and
expressly agree that this Note, or any payment hereunder, may be extended from
time to time, and expressly consent to the release of any party liable for the
obligation secured by this Note, the release of any of the security of this
Note, the acceptance of any other security therefor, or any other indulgence or
forbearance whatsoever, all without notice to any party and without affecting
the liability of the Borrower and any endorsers hereof.
This Note shall be governed and construed under the internal laws of
the State of Illinois.
BORROWER AND LENDER, BY ITS ACCEPTANCE HEREOF, EACH HEREBY WAIVE ANY
RIGHT TO A TRIAL BY JURY IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY
RIGHT UNDER THIS PROMISSORY NOTE OR ANY OTHER LOAN DOCUMENT OR RELATING THERETO
OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS NOTE AND
AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT
BEFORE A JURY.
STORAGE PARTNERSHIP L.P.
By: STORAGE USA, INC.,
its General Partner
By:
Print Name:
Title:
-75-
<PAGE>
EXHIBIT C-1
FORM OF COMPETITIVE BID QUOTE REQUEST
(Section 2.16(b))
To: The First National Bank of Chicago,
as administrative agent (the "Administrative Agent")
From: SUSA Partnership L.P.
Re: Amended and Restated Unsecured Revolving Credit Agreement dated as of
_________________, 1997, as amended among the Borrower, the Lenders
from time to time party thereto, The First National Bank of Chicago, as
Arranger, and The First National Bank of Chicago, as Administrative
Agent for the Lenders (as amended, supplemented or otherwise modified
from time to time through the date hereof, the "Agreement")
1. Capitalized terms used herein have the meanings assigned to them in
the Agreement.
2. We hereby give notice pursuant to Section 2.16(b) of the Agreement
that we request Competitive Bid Quotes for the following proposed Competitive
Bid Loan(s):
Borrowing Date: _______________, 19___
Principal Amount1 Interest Period2
3. Such Competitive Bid Quotes should offer [a Competitive LIBOR
Margin] [an Absolute Rate].
- --------
1 Amount must be at least $10,000,000 and an integral multiple of $1,000,000. 2
Up to 180 days, subject to the provisions of the definitions of LIBOR Interest
Period and Absolute Interest Period.
-76-
<PAGE>
4. Upon acceptance by the undersigned of any or all of the Competitive
Bid Loans offered by Lenders in response to this request, the undersigned shall
be deemed to affirm as of the Borrowing Date thereof the representations and
warranties made in Article V and Article VI of the Agreement.
SUSA PARTNERSHIP L.P.
By: STORAGE USA, INC.
its General Partner
By:
Print Name:
Title:
-77-
<PAGE>
EXHIBIT C-2
INVITATION FOR COMPETITIVE BID QUOTES
(Section 2.16(c))
To: Each of the Lenders party to
the Agreement referred to below
Re: Invitation for Competitive Bid Quotes to
SUSA Partnership L.P.
Pursuant to Section 2.16(c) of the Amended and Restated Unsecured
Revolving Credit Agreement dated as of ________________, 1997 as amended from
time to time, among the Borrower, the lenders from time to time party thereto,
The First National Bank of Chicago, as Arranger, and the First National Bank of
Chicago as Administrative Agent for the Lenders (as amended, supplemented or
otherwise modified from time to time through the date hereof, the "Agreement"),
we are pleased on behalf of the Borrower to invite you to submit Competitive Bid
Quotes to the Borrower for the following proposed Competitive Bid Loan(s):
Borrowing Date: _______________, 19___
Principal Amount Interest Period
Such Competitive Bid Quotes should offer [a Competitive LIBOR Margin]
[an Absolute Rate]. Your Competitive Bid Quote must comply with Section 2.16(c)
of the Agreement and the foregoing. Capitalized terms used herein have the
meanings assigned to them in the Agreement.
Please respond to this invitation by no later than [9:00 a.m.] (Chicago
time) on _______________, 19___.
THE FIRST NATIONAL BANK OF CHICAGO,
as Administrative Agent
By:
Title:
-78-
<PAGE>
EXHIBIT C-3
COMPETITIVE BID QUOTE
(Section 2.16(d))
_______________, 19___
To: The First National Bank of Chicago,
as Administrative Agent
Re: Competitive Bid Quote to SUSA Partnership L.P.
(the "Borrower")
In response to your invitation on behalf of the Borrower dated
_______________, 19___, we hereby make the following Competitive Bid Quote
pursuant to Section 2.16(d) of the Agreement hereinafter referred to and on the
following terms:
1. Quoting Lender:
2. Person to contact at Quoting Lender: 1
3. Borrowing Date:
4. We hereby offer to make Competitive Bid Loan(s) in the following
principal amounts, for the following Interest Periods and at the
following rates:
<TABLE>
<S> <C>
================================================================================================================================
[Competitive
Principal Interest LIBOR [Absolute Minimum
Amount2 Period3 Margin4] Rate5] Amount6
================================================================================================================================
</TABLE>
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Amended and
Restated Unsecured Revolving Credit Agreement dated as of __________, 1997,
among the Borrower, the Lenders from time to time party thereto, and The First
National Bank of Chicago, as Administrative Agent for the Lenders (as amended,
supplemented or otherwise modified from time to time through the date hereof,
the "Agreement"), irrevocably obligates us to make the Competitive Bid Loan(s)
for which any offer(s) are accepted, in whole or in part. Capitalized terms used
herein and not otherwise defined herein shall have their meanings as defined in
the Agreement.
Very truly yours,
[NAME OF LENDER]
By:
Title:
- --------
1 As specified in the related Invitation For Competitive Bid Quotes.
2 Principal amount bid for each Interest Period may not exceed the principal
amount requested. Bids must be made for at least $5,000,000 and integral
multiples of $1,000,000.
3 Up to 180 days, as specified in the related Invitation For Competitive Bid
Quotes.
4 Competitive LIBOR Margin for the applicable LIBOR Interest Period. Specify
percentage (rounded to the nearest 1/100 of 1%) and specify whether "PLUS" or
"MINUS".
5 Specify rate of interest per annum (rounded to the nearest 1/100 of 1%). 6
Specify minimum amount, if any, which the Borrower may accept (see Section
2.16(d)(ii)(4)).
-79-
<PAGE>
EXHIBIT D
FORM OF OPINION
______________ , 19
The Administrative Agent and the Lenders who are parties to the Credit Agreement
described below.
Gentlemen/Ladies:
We are counsel for SUSA Partnership L.P., a Tennessee limited
partnership (the "Borrower"), Storage USA Trust, a Maryland business trust (the
"Trust") and Storage USA, Inc., a Tennessee corporation (the "General Partner"
and, collectively with the Borrower and the Trust, the "SUSA Entities"), and
have represented the SUSA Entities in connection with their execution and
delivery of an Amended and Restated Unsecured Revolving Credit Agreement among
the SUSA Entities, The First National Bank of Chicago, individually and as
Administrative Agent, and the Lenders named therein, providing for Advances in
an aggregate principal amount not exceeding $150,000,000 at any one time
outstanding and dated as of (the "Agreement"). All capitalized terms used in
this opinion and not otherwise defined shall have the meanings attributed to
them in the Agreement.
We have examined the SUSA Entities' articles of incorporation, by-laws,
resolutions, certificate of limited partnership, partnership agreement, the
Agreement, the Amended and Restated Guaranty dated , the Notes (the foregoing
documents are sometimes collectively referred to herein as the "Loan Documents")
and such other matters of fact and law which we deem necessary in order to
render this opinion.
For purposes of the opinions expressed below, we have assumed (i) the
authenticity of all documents submitted to us as originals, (ii) the conformity
to the originals of all documents submitted as certified or photostatic copies
and the authenticity of the originals, (iii) for purposes of opinion number 5,
below, we have assumed that the Loan Documents will be governed exclusively by
the laws of Virginia, notwithstanding any contrary provision of the Loan
Documents that the Loan Documents be governed by the law of Illinois, as to
which we express no opinion, and (iv) the due authorization, execution and
delivery of all documents by all parties and the validity and binding effect
thereof (other than the authorization, execution and delivery of documents by
the Borrower, the General Partner and the Trust and the validity and binding
effect thereof upon the Borrower, General Partner and the Trust).
As to factual matters, we have relied upon representations included in
the Credit Agreement, upon certificates of officers of the Borrower, the General
Partner and the Trust, upon certificates of public officials, the SUSA Entities'
organizational documents and such other matters of fact and law which we deem
necessary in order to render this opinion. Whenever the phrase "to our
knowledge" is used herein, it refers to the actual knowledge of the attorneys of
-80-
<PAGE>
this firm involved in the representation of the Borrower, the General Partner
and the Trust in this transaction without independent investigation. Based upon
the foregoing, it is our opinion that:
1. The General Partner is a corporation duly incorporated, validly
existing and in good standing under the laws of the state of Tennessee and has
all requisite authority to conduct its business in each jurisdiction in which
its business is conducted.
2. The Trust is duly organized, validly existing and in good standing
under the laws of the state of Maryland and has all requisite authority to
conduct its business in each jurisdiction in which its business is conducted.
3. The Borrower is a limited partnership duly qualified and formed and
validly existing under the laws of the state of Tennessee and has all requisite
authority to conduct its business in each jurisdiction in which its business is
conducted.
4. The execution and delivery of the Loan Documents by the SUSA
Entities and the performance by the SUSA Entities of their obligations under the
Loan Documents have been duly authorized by all necessary corporate or
partnership action and/or proceedings on the part of the SUSA Entities and will
not:
(a) require any consent of the SUSA Entities's shareholders or
limited partners;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the SUSA Entities or any of
their Subsidiaries or the SUSA Entities's or any Subsidiary's articles
of incorporation, by-laws, certificate of limited partnership,
partnership agreement, any indenture, instrument or agreement binding
upon the SUSA Entities or any of their Subsidiaries; or
(c) result in, or require, the creation or imposition of any
Lien pursuant to the provisions of any indenture, instrument or
agreement binding upon the SUSA Entities or any of their Subsidiaries.
5. The Loan Documents have been duly executed and delivered by the SUSA
Entities and constitute legal, valid and binding obligations of the SUSA
Entities enforceable in accordance with their terms except to the extent the
enforcement thereof may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally and subject also to the
availability of equitable remedies if equitable remedies are sought.
6. Except as set forth in the Credit Agreement, we know of no
litigation or proceeding against the SUSA Entities or any of their Subsidiaries
which, if adversely determined, could have a Material Adverse Effect.
-81-
<PAGE>
7. No approval, authorization, consent, adjudication or order of any
governmental authority, which has not been obtained by the SUSA Entities or any
of their Subsidiaries, is required to be obtained by the SUSA Entities or any of
their Subsidiaries in connection with the execution and delivery of the Loan
Documents, the borrowings under the Agreement or in connection with the payment
by the SUSA Entities of their obligations under the Loan Documents.
We do not purport to express an opinion on any laws other than those of
the Commonwealth of Virginia, the state of Tennessee and the general corporate
laws of the state of Maryland.
This opinion may be relied upon only by the Agent, the Lenders and
their participants, assignees and other transferees in connection with the
matters set forth herein and may not, without our express written consent, be
furnished or quoted to or relief upon by any other person or entity for any
purpose. Subject to the preceding sentence, this opinion shall not be published
or reproduced in any manner or distributed or circulated to any person or entity
without our express written consent. Our opinion is limited to the matters
stated herein, and no opinion is implied or may be inferred beyond the matters
expressly stated herein.
Very truly yours,
-82-
<PAGE>
EXHIBIT E
COMPLIANCE CERTIFICATE
To: The Lenders parties to the
Credit Agreement Described Below
This Compliance Certificate is furnished pursuant to that certain
Amended and Restated Unsecured Revolving Credit Agreement dated as of December
___, 1997 (as amended, modified, renewed or extended from time to time, the
"Agreement") among the Borrower, Storage USA, Inc., Storage USA Trust, the
lenders party thereto and The First National Bank of Chicago, as Administrative
Agent for the Lenders. Unless otherwise defined herein, capitalized terms used
in this Compliance Certificate have the meanings ascribed thereto in the
Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected of the Borrower;
2. I have reviewed the terms of the Agreement and I have made, or have
caused to be made under my supervision, a detailed review of the transactions
and conditions of the Borrower and its Subsidiaries during the accounting period
covered by the attached financial statements;
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which constitutes
a Default or Unmatured Default during or at the end of the accounting period
covered by the attached financial statements or as of the date of this
Certificate, except as set forth below; and
4. Schedule I attached hereto sets forth financial data and
computations evidencing the Borrower's compliance with certain covenants of the
Agreement, all of which data and computations are true, complete and correct.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it has
existed and the action which the Borrower has taken, is taking, or proposes to
take with respect to each such condition or event:
-83-
<PAGE>
The foregoing certifications, together with the computations set forth
in Schedule I hereto and the financial statements delivered with this
Certificate in support hereof, are made and delivered this day of , 19 .
SUSA PARTNERSHIP L.P.
By: STORAGE USA, INC.
Its General Partner
By:
Print Name:
Title:
-84-
<PAGE>
[SAMPLE]
SCHEDULE I TO COMPLIANCE CERTIFICATE
Schedule of Compliance as of with
Provisions of and of
the Agreement
-85-
<PAGE>
EXHIBIT F
ASSIGNMENT AGREEMENT
This Assignment Agreement (this "Assignment Agreement") between
(the "Assignor") and (the "Assignee") is dated as of
, 19 . The parties hereto agree as follows:
1. PRELIMINARY STATEMENT. The Assignor is a party to an Amended and
Restated Unsecured Revolving Credit Agreement (which, as it may be amended,
modified, renewed or extended from time to time is herein called the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have the
meanings attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the Assignor,
an interest in and to the Assignor's rights and obligations under the Credit
Agreement such that after giving effect to such assignment the Assignee shall
have purchased pursuant to this Assignment Agreement the percentage interest
specified in Item 3 of Schedule 1 of all outstanding rights and obligations
under the Credit Agreement relating to the facilities listed in Item 3 of
Schedule 1 and the other Loan Documents. The aggregate Commitment (or Loans, if
the applicable Commitment has been terminated) purchased by the Assignee
hereunder is set forth in Item 4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of Schedule
1 or two Business Days (or such shorter period agreed to by the Administrative
Agent) after a Notice of Assignment substantially in the form of Exhibit I
attached hereto has been delivered to the Administrative Agent. Such Notice of
Assignment must include any consents required to be delivered to the
Administrative Agent by Section 13.3.1 of the Credit Agreement. In no event will
the Effective Date occur if the payments required to be made by the Assignee to
the Assignor on the Effective Date under Sections 4 and 5 hereof are not made on
the proposed Effective Date. The Assignor will notify the Assignee of the
proposed Effective Date no later than the Business Day prior to the proposed
Effective Date. As of the Effective Date, (i) the Assignee shall have the rights
and obligations of a Lender under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder and (ii) the Assignor shall
relinquish its rights and be released from its corresponding obligations under
the Loan Documents with respect to the rights and obligations assigned to the
Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees
-86-
<PAGE>
with respect to the interest assigned hereby. The Assignee shall advance funds
directly to the Administrative Agent with respect to all Loans and reimbursement
payments made on or after the Effective Date with respect to the interest
assigned hereby. [In consideration for the sale and assignment of Loans
hereunder, (i) the Assignee shall pay the Assignor, on the Effective Date, an
amount equal to the principal amount of the portion of all Adjusted CBR Loans
assigned to the Assignee hereunder and (ii) with respect to each Adjusted LIBOR
Loan made by the Assignor and assigned to the Assignee hereunder which is
outstanding on the Effective Date, (a) on the last day of the Interest Period
therefor or (b) on such earlier date agreed to by the Assignor and the Assignee
or (c) on the date on which any such Adjusted LIBOR Loan either becomes due (by
acceleration or otherwise) or is prepaid (the date as described in the foregoing
clauses (a), (b) or (c) being hereinafter referred to as the "Payment Date"),
the Assignee shall pay the Assignor an amount equal to the principal amount of
the portion of such Adjusted LIBOR Loan assigned to the Assignee which is
outstanding on the Payment Date. If the Assignor and the Assignee agree that the
Payment Date for such Adjusted LIBOR Loan shall be the Effective Date, they
shall agree to the interest rate applicable to the portion of such Loan assigned
hereunder for the period from the Effective Date to the end of the existing
Interest Period applicable to such Adjusted LIBOR Loan (the "Agreed Interest
Rate") and any interest received by the Assignee in excess of the Agreed
Interest Rate shall be remitted to the Assignor. In the event interest for the
period from the Effective Date to but not including the Payment Date is not paid
by the Borrower with respect to any Adjusted LIBOR Loan sold by the Assignor to
the Assignee hereunder, the Assignee shall pay to the Assignor interest for such
period on the portion of such Adjusted LIBOR Loan sold by the Assignor to the
Assignee hereunder at the applicable rate provided by the Credit Agreement. In
the event a prepayment of any Adjusted LIBOR Loan which is existing on the
Payment Date and assigned by the Assignor to the Assignee hereunder occurs after
the Payment Date but before the end of the Interest Period applicable to such
Adjusted LIBOR Loan, the Assignee shall remit to the Assignor the excess of the
prepayment penalty paid with respect to the portion of such Adjusted LIBOR Loan
assigned to the Assignee hereunder over the amount which would have been paid if
such prepayment penalty was calculated based on the Agreed Interest Rate. The
Assignee will also promptly remit to the Assignor (i) any principal payments
received from the Administrative Agent with respect to Adjusted LIBOR Loans
prior to the Payment Date and (ii) any amounts of interest on Loans and fees
received from the Administrative Agent which relate to the portion of the Loans
assigned to the Assignee hereunder for periods prior to the Effective Date, in
the case of Adjusted CBR Loans or fees, or the Payment Date, in the case of
Adjusted LIBOR Loans, and not previously paid by the Assignee to the Assignor.]*
In the event that either party hereto receives any payment to which the other
party hereto is entitled under this Assignment Agreement, then the party
receiving such amount shall promptly remit it to the other party hereto.
*Each Assignor may insert its standard payment provisions in lieu of the payment
terms included in this Exhibit.
-87-
<PAGE>
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor
a fee on each day on which a payment of interest or fees (including any
Commitment Fee, Extension Fee or Unused Facility Fee) is made under the Credit
Agreement with respect to the amounts assigned to the Assignee hereunder (other
than a payment of interest or commitment fees for the period prior to the
Effective Date or, in the case of Adjusted LIBOR Loans, the Payment Date, which
the Assignee is obligated to deliver to the Assignor pursuant to Section 4
hereof). The amount of such fee shall be the difference between (i) the interest
or fee, as applicable, paid with respect to the amounts assigned to the Assignee
hereunder and (ii) the interest or fee, as applicable, which would have been
paid with respect to the amounts assigned to the Assignee hereunder if each
interest rate was of 1% less than the interest rate paid by the Borrower or if
the commitment fee was of 1% less than the commitment fee paid by the Borrower,
as applicable. In addition, the Assignee agrees to pay % of the recordation fee
required to be paid to the Administrative Agent in connection with this
Assignment Agreement.
6. REPRESENTATIONS OF THE ASSIGNOR; LIMITATIONS ON THE ASSIGNOR'S
LIABILITY. The Assignor represents and warrants that it is the legal and
beneficial owner of the interest being assigned by it hereunder and that such
interest is free and clear of any adverse claim created by the Assignor and that
it has the right power and authority to enter into this Agreement. It is
understood and agreed that the assignment and assumption hereunder are made
without recourse to the Assignor and that the Assignor makes no other
representation or warranty of any kind to the Assignee. Neither the Assignor nor
any of its officers, directors, employees, agents or attorneys shall be
responsible for (i) the due execution, legality, validity, enforceability,
genuineness, sufficiency or collectability of any Loan Document, including
without limitation, documents granting the Assignor and the other Lenders a
security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, (vi) the validity, enforceability,
perfection, priority, condition, value or sufficiency of any collateral securing
or purporting to secure the Loans or (vii) any mistake, error of judgment, or
action taken or omitted to be taken in connection with the Loans or the Loan
Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement, together with copies of the
financial statements requested by the Assignee and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment Agreement, (ii) agrees that it will,
independently and without reliance upon the Administrative Agent, the Assignor
or any other Lender and based on such documents and information at it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Loan Documents, (iii) appoints and authorizes the
Administrative Agent to take such action as administration agent on its behalf
and to exercise such powers under the
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<PAGE>
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) confirms
that none of the funds, monies, assets or other consideration being used to make
the purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, (vii) confirms that it is either a financial
institution, a pension fund, or a fund or entity that regularly makes or
participates in real estate loans as part of its business (viii) confirms that
it has the right power and authority to enter into this Agreement, [and attaches
the forms prescribed by the Internal Revenue Service of the United States
certifying that the Assignee is entitled to receive payments under the Loan
Documents without deduction or withholding of any United States federal income
taxes].*
*to be inserted if the Assignee is not incorporated under the laws of the United
States, or a state thereof.
8. INDEMNITY. The Assignee agrees to indemnify and hold the Assignor
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Assignor
in connection with or arising in any manner from the Assignee's non-performance
of the obligations assumed under this Assignment Agreement.
9. SUBSEQUENT ASSIGNMENTS. After the Effective Date, the Assignee shall
have the right pursuant to Section 13.3.1 of the Credit Agreement to assign the
rights which are assigned to the Assignee hereunder to any entity or person,
provided that (i) any such subsequent assignment does not violate any of the
terms and conditions of the Loan Documents or any law, rule, regulation, order,
writ, judgment, injunction or decree and that any consent required under the
terms of the Loan Documents has been obtained and (ii) unless the prior written
consent of the Assignor is obtained, the Assignee is not thereby released from
its obligations to the Assignor hereunder, if any remain unsatisfied, including,
without limitation, its obligations under Sections 4, 5 and 8 hereof.
10. REDUCTIONS OF AGGREGATE COMMITMENT. If any reduction in the
Aggregate Commitment occurs between the date of this Assignment Agreement and
the Effective Date, the percentage interest specified in Item 3 of Schedule 1
shall remain the same, but the dollar amount purchased shall be recalculated
based on the reduced Aggregate Commitment.
11. ENTIRE AGREEMENT. This Assignment Agreement and the attached Notice
of Assignment embody the entire agreement and understanding between the parties
hereto and
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supersede all prior agreements and understandings between the parties hereto
relating to the subject matter hereof.
12. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Illinois.
13. NOTICES. Notices shall be given under this Assignment Agreement in
the manner set forth in the Credit Agreement. For the purpose hereof, the
addresses of the parties hereto (until notice of a change is delivered) shall be
the address set forth in the attachment to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
[NAME OF ASSIGNOR]
By: ___________________________
Title: ________________________
[NAME OF ASSIGNEE]
By: ___________________________
Title: ________________________
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<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement: Credit Agreement dated
as of December ___, 1997.
2. Date of Assignment Agreement: , 19
3. Amounts (As of Date of Item 2 above):
a. Total of Commitments
under Credit Agreement $
b. Assignee's Percentage
of Facility
purchased under the
Assignment Agreement** %
c. Amount of Assigned
Share in Facility
purchased under the
Assignment Agreement $
4. Assignee's Aggregate Commitment
Amount Purchased Hereunder: $
5. Proposed Effective Date:
* Percentage taken to 10 decimal places
Accepted and Agreed:
THE FIRST NATIONAL BANK [NAME OF ASSIGNEE]
OF CHICAGO
By: _________________________ By: _________________________
Title: ______________________ Title: ______________________
<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet,
which must include notice address for the Assignor
and the Assignee
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<PAGE>
EXHIBIT I
to Assignment Agreement
NOTICE
OF ASSIGNMENT
, 199__
To: SUSA PARTNERSHIP L.P.
STORAGE USA, INC.
THE FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent
From: THE FIRST NATIONAL BANK OF CHICAGO, as a Lender (the
"Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Amended and Restated Unsecured Revolving
Credit Agreement (the "Credit Agreement") described in Item 1 of Schedule 1
attached hereto ("Schedule 1"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement.
2. This Notice of Assignment (this "Notice") is given and
delivered to the Administrative Agent pursuant to Section 13.3.2 of the Credit
Agreement.
3. The Assignor and the Assignee have entered into an
Assignment Agreement, dated as of , 199__ (the "Assignment"), pursuant to which,
among other things, the Assignor has sold, assigned, delegated and transferred
to the Assignee, and the Assignee has purchased, accepted and assumed from the
Assignor the percentage interest specified in Item 3 of Schedule 1 of all
outstandings, rights and obligations under the Credit Agreement relating to the
facilities listed in Item 3 of Schedule 1. The Effective Date of the Assignment
shall be the later of the date specified in Item 5 of Schedule 1 or two Business
Days (or such shorter period as agreed to by the Administrative Agent) after
this Notice of Assignment and any consents and fees required by Sections 13.3.1
and 13.3.2 of the Credit Agreement have been delivered to the Administrative
Agent, provided that the Effective Date shall not occur if any condition
precedent agreed to by the Assignor and the Assignee has not been satisfied.
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<PAGE>
4. The Assignor and the Assignee hereby give to the Borrower
and the Administrative Agent notice of the assignment and delegation referred to
herein. The Assignor will confer with the Administrative Agent before the date
specified in Item 5 of Schedule 1 to determine if the Assignment Agreement will
become effective on such date pursuant to Section 3 hereof, and will confer with
the Administrative Agent to determine the Effective Date pursuant to Section 3
hereof if it occurs thereafter. The Assignor shall notify the Administrative
Agent if the Assignment Agreement does not become effective on any proposed
Effective Date as a result of the failure to satisfy the conditions precedent
agreed to by the Assignor and the Assignee. At the request of the Administrative
Agent, the Assignor will give the Administrative Agent written confirmation of
the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the
Administrative Agent on or before the Effective Date the processing fee of
$3,500 required by Section 13.3.2 of the Credit Agreement.
6. If Notes are outstanding on the Effective Date, the
Assignor and the Assignee request and direct that the Administrative Agent
prepare and cause the Borrower to execute and deliver new Notes or, as
appropriate, replacements notes, to the Assignor and the Assignee. The Assignor
and, if applicable, the Assignee each agree to deliver to the Administrative
Agent the original Note received by it from the Borrower upon its receipt of a
new Note in the appropriate amount.
7. The Assignee advises the Administrative Agent that notice
and payment instructions are set forth in the attachment to Schedule 1.
8. The Assignee hereby represents and warrants that none of
the funds, monies, assets or other consideration being used to make the purchase
pursuant to the Assignment are "plan assets" as defined under ERISA and that its
rights, benefits, and interests in and under the Loan Documents will not be
"plan assets" under ERISA.
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<PAGE>
THE FIRST NATIONAL BANK NAME OF ASSIGNEE
OF CHICAGO
By: __________________________ By: __________________________
Title: ________________________ Title: _______________________
ACKNOWLEDGED AND CONSENTED TO ACKNOWLEDGED
BY THE FIRST NATIONAL BANK BY SUSA PARTNERSHIP L.P.
OF CHICAGO, AS ADMINISTRATIVE AGENT
By: ___________________________ By: __________________________
Title: ________________________ Title: _______________________
[Attach photocopy of Schedule 1 to Assignment]
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<PAGE>
EXHIBIT G
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To The First National Bank of Chicago,
as Administrative Agent (the "Administrative Agent") under the Credit Agreement
Described Below.
Re: Amended and Restated Unsecured Revolving Credit Agreement, dated
December ___, 1997 (as the same may be amended or modified, the "Credit
Agreement"), among SUSA Partnership L.P. (the "Borrower"), Storage USA,
Inc., Storage USA Trust, the Administrative Agent, and the Lenders
named therein. Terms used herein and not otherwise defined shall have
the meanings assigned thereto in the Credit Agreement.
The Administrative Agent is specifically authorized and directed to act
upon the following standing money transfer instructions with respect to the
proceeds of Advances or other extensions of credit from time to time until
receipt by the Administrative Agent of a specific written revocation of such
instructions by the Borrower, provided, however, that the Administrative Agent
may otherwise transfer funds as hereafter directed in writing by the Borrower in
accordance with Section 14.1 of the Credit Agreement or based on any telephonic
notice made in accordance with Section 2.19 of the Credit Agreement.
Facility Identification Number ______________________________
Customer/Account Name __________________________________
Transfer Funds To ______________________________________
For Account No. _________________________________________
Reference/Attention To ____________________________________
Authorized Officer
(Customer Representative) Date ___________________
- ----------------------------------- ---------------------------
(Please Print) Signature
Bank Officer Name Date ___________________
- ----------------------------- ---------------------------
(Please Print) Signature
<PAGE>
EXHIBIT H
FORM OF DESIGNATION AGREEMENT
Dated _____________, 199__
Reference is made to the Amended and Restated Unsecured Credit
Agreement dated as of ______________, 1997 (as amended, supplemented or
otherwise modified from time to time, the "Credit Agreement") among SUSA
Partnership L.P., a Tennessee limited partnership (the "Borrower"), whose sole
general partner is STORAGE USA, INC., a Tennessee corporation (the "General
Partner"), and The First National Bank of Chicago, as Administrative Agent (the
"Administrative Agent") for the Banks. Terms defined in the Credit Agreement are
used herein with the same meaning.
[NAME OF DESIGNOR] (the "Designor"), [NAME OF DESIGNEE] (the
"Designee"), the Administrative Agent and the Borrower agree as follows:
1. The Designor hereby designates the Designee, and the Designee hereby
accepts such designation, to have a right to make Competitive Bid Loans pursuant
to Section 2.16 of the Credit Agreement. Any assignment by Designor to Designee
of its rights to make a Competitive Bid Loan pursuant to such Section 2.16 shall
be effective at the time of the funding for such Competitive Bid Loan and not
before such time.
2. Except as set forth in Section 7 below, the Designor makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or any Loan Party of the
performance or observance by the Borrower or any Loan Party or any of their
respective obligations under any Loan Document or any other instrument or
document furnished pursuant thereto. (It is acknowledged that the Designor may
make representations and warranties of the type described above in other
agreements to which the Designor is a party).
3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to in
Section 7.1 of the Credit Agreement and such other documents and information as
it has deemed appropriate to make its own independent credit analysis and
decision to enter into this Designation Agreement, (b) agrees that it will,
independently and without reliance upon the Administrative Agent, the Designor
or any other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under Loan Document; (c) confirms that it is a Designated
Lender; (d) appoints and authorizes
-5-
<PAGE>
the Administrative Agent to take such action as administrative agent on its
behalf and to exercise such powers and discretion under any Loan Document as are
delegated to the Administrative Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto, and (e) agrees that
it will perform in accordance with their terms all of the obligations which by
the terms of any Loan Document are required to be performed by it as a Lender.
4. The Designee hereby appoints Designor as Designee's agent and
attorney in fact, and grants to Designor an irrevocable power of attorney, to
deliver and receive all communications and notices under the Credit Agreement
and other Loan Documents and to exercise on Designee's behalf all rights to vote
and to grant and made approvals, waivers, consents or amendment to or under the
Credit Agreement or other Loan Documents. Any document executed by the Designor
on the Designee's behalf in connection with the Credit Agreement or other Loan
Documents shall be binding on the Designee. The Borrower, the Administrative
Agent and each of the Banks may rely on and are beneficiaries of the preceding
provisions.
5. Following the execution of this Designation Agreement by the
Designor and its Designee, it will be delivered to the Administrative Agent for
acceptance and recording by the Administrative Agent. The effective date for
this Designation Agreement (the "Effective Date") shall be the date of
acceptance hereof by the Administrative Agent, unless otherwise specified on the
signature page thereto.
6. Upon such acceptance and recording by the Administrative Agent, as
of the Effective Date, the Designee shall be a party to the Credit Agreement
with a right to make Competitive Bid Loans as pursuant to Section 2.16 of the
Credit Agreement and the rights and obligations of a Lender related thereto.
7. This Designation Agreement shall be governed by, and construed in
accordance with, the laws of the State of Illinois, without reference to the
provisions thereof regarding conflicts of law.
8. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as of delivery of a manually executed
counterpart of this Designation Agreement.
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<PAGE>
IN WITNESS WHEREOF, the Designor and the Designee, intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.
Effective Date1 , , 199__
[NAME OF DESIGNOR], as Designor
By:
Title:
[NAME OF DESIGNEE], as Designee
By:
Title:
Applicable Lending
Office (and
address for
notices):
[ADDRESS]
Accepted this ____ day
of _______________, 199__
[ADMINISTRATIVE AGENT], as Administrative Agent
[BORROWER]
By: By:
Title: Title:
- --------
1 This date should be no earlier than five Business Days after the delivery of
this Designation Agreement to the Agent.
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<PAGE>
PAYMENTS OF PRINCIPAL
<TABLE>
<CAPTION>
Unpaid
Principal Notation
Date Balance Made by
<S> <C>
</TABLE>
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<PAGE>
TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
<S> <C>
ARTICLE I DEFINITIONS..................................................................................... 2
ARTICLE II THE CREDIT...................................................................................... 15
2.1. Commitment...................................................................................... 15
2.2. Final Principal Payment......................................................................... 15
2.3. Ratable Loans................................................................................... 15
2.4. Applicable Margins.............................................................................. 16
2.5. Intentionally Deleted. ........................................................................ 16
2.6. Facility Fee.................................................................................... 16
2.7. Reductions in Aggregate Commitment.............................................................. 16
2.8. Increases in Aggregate Commitment............................................................... 16
2.9. Minimum Amount of Each Advance.................................................................. 17
2.10. Optional Principal Payments..................................................................... 17
2.11. Method of Selecting Types and Interest Periods for New Advances................................. 17
2.12. Conversion and Continuation of Outstanding Advances............................................. 18
2.13. Changes in Interest Rate, Etc................................................................... 19
2.14. Rates Applicable After Default.................................................................. 19
2.15 Swing Line Loans................................................................................ 19
2.16. Competitive Bid Loans........................................................................... 20
2.17. Fixed Rate Loans................................................................................ 25
2.18. Method of Payment............................................................................... 25
2.19. Notes; Telephonic Notices....................................................................... 25
2.20. Interest Payment Dates; Interest and Fee Basis.................................................. 26
2.21. Notification of Advances, Interest Rates, Prepayments and Commitment
Reductions...................................................................................... 26
2.22. Lending Installations........................................................................... 26
2.23. Non-Receipt of Funds by the Administrative Agent................................................ 26
2.24. Withholding Tax Exemption....................................................................... 27
ARTICLE III CHANGE IN CIRCUMSTANCES......................................................................... 27
3.1. Yield Protection................................................................................ 27
3.2. Changes in Capital Adequacy Regulations......................................................... 28
3.3. Availability of LIBOR Advances.................................................................. 28
3.4. Funding Indemnification......................................................................... 29
3.5. Lender Statements; Survival of Indemnity........................................................ 29
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TABLE OF CONTENTS
(continued)
Page
ARTICLE IV CONDITIONS PRECEDENT............................................................................ 29
4.1. Initial Advance................................................................................. 29
4.2. Each Advance.................................................................................... 32
ARTICLE V BORROWER'S REPRESENTATIONS AND WARRANTIES....................................................... 32
5.1. Existence. .................................................................................... 32
5.2. Authorization and Validity...................................................................... 32
5.3. No Conflict; Government Consent................................................................. 33
5.4. Material Adverse Change......................................................................... 33
5.5. Taxes........................................................................................... 33
5.6. Litigation and Guarantee Obligations............................................................ 33
5.7. Subsidiaries.................................................................................... 34
5.8. ERISA........................................................................................... 34
5.9. Accuracy of Information......................................................................... 34
5.10. Regulation U.................................................................................... 34
5.11. Material Agreements............................................................................. 34
5.12. Compliance With Laws............................................................................ 34
5.13. Ownership of Properties......................................................................... 35
5.14. Investment Company Act.......................................................................... 35
5.15. Public Utility Holding Company Act.............................................................. 35
5.16. Solvency........................................................................................ 35
5.17. Insurance....................................................................................... 35
ARTICLE VI GENERAL PARTNER'S REPRESENTATIONS AND
WARRANTIES............................................................................. 36
6.1. Corporate Existence and Standing................................................................ 36
6.2. Authorization and Validity...................................................................... 36
6.3. No Conflict; Government Consent................................................................. 36
6.4. Financial Statements............................................................................ 37
6.5. Material Adverse Change......................................................................... 37
6.6. Taxes........................................................................................... 37
6.7. Litigation and Guarantee Obligations............................................................ 37
6.8. Subsidiaries.................................................................................... 37
6.9. ERISA........................................................................................... 38
6.10. Accuracy of Information......................................................................... 38
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<PAGE>
TABLE OF CONTENTS
(continued)
Page
6.11. Regulation U.................................................................................... 38
6.12. Material Agreements............................................................................. 38
6.13. Compliance With Laws............................................................................ 38
6.14. Ownership of Properties......................................................................... 38
6.15. Investment Company Act.......................................................................... 39
6.16. Public Utility Holding Company Act.............................................................. 39
6.17. Insurance....................................................................................... 39
6.18. Solvency........................................................................................ 39
6.19. REIT Status..................................................................................... 40
ARTICLE VII TRUST'S REPRESENTATIONS AND WARRANTIES.......................................................... 41
7.1 Corporate Existence and Standing................................................................ 41
7.2 Authorization and Validity...................................................................... 41
7.3 No Conflict; Government Consent................................................................. 41
ARTICLE VIII COVENANTS....................................................................................... 41
8.1. Financial Reporting............................................................................. 42
8.2. Use of Proceeds................................................................................. 43
8.3. Notice of Default............................................................................... 43
8.4. Conduct of Business............................................................................. 43
8.5. Taxes........................................................................................... 43
8.6. Insurance....................................................................................... 44
8.7. Compliance with Laws............................................................................ 44
8.8. Maintenance of Properties....................................................................... 44
8.9. Inspection...................................................................................... 44
8.10. Maintenance of Status........................................................................... 44
8.11. Dividends....................................................................................... 44
8.12. Merger.......................................................................................... 45
8.13. General Partner's Ownership and Control of Borrower............................................. 45
8.14. Sale of Accounts................................................................................ 45
8.15. Sale and Leaseback.............................................................................. 45
8.16. Acquisitions and Investments.................................................................... 45
8.17. Liens........................................................................................... 46
8.18. Affiliates...................................................................................... 46
8.19. Current DSC Ratio............................................................................... 47
8.20. Consolidated Tangible Net Worth................................................................. 47
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TABLE OF CONTENTS
(continued)
<CAPTION>
Page
<S> <C>
8.21. Indebtedness and Cash Flow Covenants............................................................ 47
ARTICLE IX DEFAULTS........................................................................................ 47
ARTICLE X ACCELERATION, WAIVERS, AMENDMENTS AND
REMEDIES............................................................................... 50
10.1. Acceleration.................................................................................... 50
10.2. Amendments...................................................................................... 50
10.3. Preservation of Rights.......................................................................... 51
ARTICLE XI GENERAL PROVISIONS.............................................................................. 52
11.1. Survival of Representations..................................................................... 52
11.2. Governmental Regulation......................................................................... 52
11.3. Taxes........................................................................................... 52
11.4. Headings........................................................................................ 52
11.5. Entire Agreement................................................................................ 52
11.6. Several Obligations; Benefits of this Agreement................................................. 52
11.7. Expenses; Indemnification....................................................................... 52
11.8. Numbers of Documents............................................................................ 53
11.9. Accounting...................................................................................... 53
11.10. Severability of Provisions...................................................................... 53
11.11. Nonliability of Lenders......................................................................... 53
11.12. CHOICE OF LAW................................................................................... 53
11.13. CONSENT TO JURISDICTION......................................................................... 54
11.14. WAIVER OF JURY TRIAL............................................................................ 54
ARTICLE XII THE ADMINISTRATIVE AGENT........................................................................ 54
12.1. Appointment..................................................................................... 54
12.2. Powers.......................................................................................... 54
12.3. General Immunity................................................................................ 55
12.4. No Responsibility for Loans, Recitals, etc...................................................... 55
12.5. Action on Instructions of Lenders............................................................... 55
12.6. Employment of Administrative Agents and Counsel................................................. 55
12.7. Reliance on Documents; Counsel.................................................................. 56
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</TABLE>
<TABLE>
<CAPTION>
TABLE OF CONTENTS
(continued)
Page
<S> <C>
12.8. Administrative Agent's Reimbursement and Indemnification........................................ 56
12.9. Rights as a Lender.............................................................................. 56
12.10. Lender Credit Decision.......................................................................... 56
12.11. Successor Administrative Agent.................................................................. 57
12.12. Administrative Agent's Fee...................................................................... 57
ARTICLE XIII SETOFF; RATABLE PAYMENTS........................................................................ 58
13.1. Setoff.......................................................................................... 58
13.2. Ratable Payments................................................................................ 58
ARTICLE XIV BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS......................................................................... 58
14.1. Successors and Assigns.......................................................................... 58
14.2. Participations.................................................................................. 59
14.3. Assignments..................................................................................... 60
14.4. Dissemination of Information.................................................................... 61
14.5. Tax Treatment................................................................................... 61
ARTICLE XV NOTICES......................................................................................... 61
15.1. Giving Notice................................................................................... 61
15.2. Change of Address............................................................................... 61
ARTICLE XVI COUNTERPARTS.................................................................................... 61
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TABLE OF CONTENTS
(continued)
</TABLE>
<TABLE>
<CAPTION>
Page
<S> <C>
Exhibits:
Exhibit A Pricing Grid
Exhibit B-1 Form of Note
Exhibit B-2 Competitive Bid Notes
Exhibit C-1 Competitive Bid Quote Request
Exhibit C-2 Invitation to Submit Competitive Bids
Exhibit C-3 Competitive Bid Quote
Exhibit D Form of Opinion
Exhibit E Form of Compliance Certificate
Exhibit F Form of Assignment Agreement
Exhibit G Form of Loan/Credit Related Money Transfer Instruction
Exhibit H Form of Designation Agreement
Schedules:
Schedule 1 Jurisdictions
Schedule 2 Subsidiaries and Other Investments
Schedule 3 Indebtedness and Liens
Schedule 4 Litigation
</TABLE>
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CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the incorporation by reference into (A) the Registration
Statements on Forms S-8 (Commission File Nos. 33-80967, 33-93884, 33-93882,
33-86362, 333-29753 and 333-29773) of Storage USA, Inc.; (B) the
Registration Statements on Forms S-3 (Commission File Nos. 333-10903,
333-4556, 33-80965, 33-98142, 33-93886, 33-91302, 333-25821, 333-21991 and
333-31145) of Storage USA, Inc.; and (C) the Registration Statements on
Forms S-3 (Commission File Nos. 333-3344 and 333-21991) of SUSA
Partnership, L. P. of our report dated January 20, 1998, on our audit of
the Historical Summaries of Combined Gross Revenue and Direct Operating
Expenses of the Group 1 Facilities for the year ended December 31, 1996,
which report is included in this Form 8-K/A.
COOPERS & LYBRAND L.L.P.
Baltimore, Maryland
January 20, 1998
