<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
(X) Quarterly report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
for the quarterly period ended September 30, 1996
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
------------------------------
Commission file number 1-12630
CENTERPOINT PROPERTIES CORPORATION
MARYLAND 36-3910279
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
401 North Michigan Ave., Chicago, Illinois 60611
(312) 346-5600
(Registrant's telephone number, including area code)
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months, and (2) has been subject to such filing requirements
for the past 90 days. Yes X No
----- -----
Number of shares of Common Stock outstanding as of October 31, 1996; 14,312,195
----------
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTERPOINT PROPERTIES CORPORATION
CONSOLIDATED BALANCE SHEETS
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1996 1995
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<S> <C> <C>
Assets:
Investment in real estate:
Land $62,717,725 $49,413,885
Buildings 259,954,150 219,911,526
Building improvements 40,110,776 39,054,302
Furniture, fixtures, and equipment 10,157,192 9,080,444
Construction in progress 9,328,800
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382,268,643 317,460,157
Less accumulated depreciation 27,290,191 21,576,209
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Net investment in real estate 354,978,452 295,883,948
Cash and cash equivalents 12,012,633 2,877,760
Restricted cash and cash equivalents 9,258,830 1,301,362
Tenant accounts receivable, net 10,136,027 8,743,344
Mortgage notes receivable 16,294,472 8,750,000
Investment in and advances to affiliate 6,508,522 5,356,526
Prepaid expenses and other assets 4,298,896 5,679,610
Deferred expenses, net 5,188,463 6,273,583
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$418,676,295 $334,866,133
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<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $136,387,829 $121,970,756
Convertible subordinated debentures payable 14,590,000 23,244,000
Notes payable 250,000 56,660
Distributions payable 0 4,952,274
Accounts payable 807,812 1,781,433
Accrued expenses 12,593,581 11,837,810
Rents received in advance and security deposits 3,173,598 2,703,253
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167,802,820 166,546,186
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Stockholders' equity:
Series A preferred stock, $.001 par value, 2,272,727 million shares
authorized; 0 and 2,272,727 issued and outstanding, respectively 2,273
Common stock, $.001 par value, 47,727,273 million shares authorized;
14,301,237 and 10,358,958 issued and outstanding, respectively 14,301 10,359
Class B common stock, $.001 par value, 2,272,727 million shares
authorized; 2,272,727 and 0 issued and outstanding, respectively 2,273
Additional paid-in-capital 275,964,272 187,160,773
Retained earnings (deficit) (24,761,265) (18,602,473)
Unearned compensation - restricted stock (346,106) (250,985)
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Total stockholders' equity 250,873,475 168,319,947
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$418,676,295 $334,866,133
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</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
--------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenue:
Minimum rents $10,633,521 $8,461,933 $29,880,278 $24,742,952
Straight-line rents 520,475 379,034 1,289,837 965,802
Expense reimbursements 2,868,985 2,054,002 8,498,851 5,763,783
Miscellaneous tenant income 13,783 130,776 83,606 281,212
Mortgage interest income 507,774 1,007,764
Real estate fee income 1,241,387 396,504 2,773,537 1,499,310
Equity in net income (loss) of affiliate (98,982) 126,330 532,991 126,330
--------------- -------------- -------------- --------------
Total revenue 15,686,943 11,548,579 44,066,864 33,379,389
--------------- -------------- -------------- --------------
Expenses:
Real estate taxes 3,035,593 1,769,135 8,322,279 5,132,021
Repair and maintenance 400,360 361,300 1,091,612 1,010,107
Insurance 131,711 100,215 359,222 301,827
Utilities 239,245 240,479 859,918 832,635
Property operating and leasing 1,158,965 856,763 3,333,530 2,868,482
General and administrative 419,930 527,456 1,655,255 1,447,620
Depreciation and amortization 2,659,849 2,545,560 7,572,260 6,522,344
Interest expense:
Interest incurred, net 2,017,611 3,051,436 7,204,348 9,162,174
Amortization of deferred financing costs 293,453 353,021 892,397 1,008,764
--------------- -------------- -------------- --------------
Total expenses 10,356,717 9,805,365 31,290,821 28,285,974
--------------- -------------- -------------- --------------
Operating income 5,330,226 1,682,172 12,776,043 4,976,297
Other expense 27,988 (61,042) (177,253) (117,118)
--------------- -------------- -------------- --------------
Income before extraordinary item 5,358,214 1,682,172 12,598,790 4,976,297
--------------- -------------- -------------- --------------
Extraordinary item, early extinguishment of debt (1,429,866)
--------------- -------------- -------------- --------------
Net income $5,358,214 $1,682,172 $11,168,924 $4,976,297
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
Income before extraordinary item per share $0.32 $0.88
Extraordinary item per share (0.10)
--------------- -------------- -------------- --------------
Net income per share $0.32 $0.17 $0.78 $0.55
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
Distributions per share $0.405 $0.390 $1.215 $1.170
--------------- -------------- -------------- --------------
--------------- -------------- -------------- --------------
</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1996 1995
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<S> <C> <C>
Cash flows from operating activities:
Net income $11,168,924 $4,976,297
Adjustments to reconcile net income to net cash provided
by operating activities:
Extraordinary item-early extinguishment of debt 1,429,866
Depreciation 7,277,380 5,912,457
Amortization of deferred financing costs 892,397 1,008,764
Other amortization 294,880 609,887
Incentive stock awards 91,404 74,321
Interest on converted debentures 72,430 74,672
Equity in net income of affiliate (532,991) (126,330)
Net changes in:
Tenant accounts receivable (1,370,119) (1,712,753)
Prepaid expenses and other assets 1,330,690 (64,790)
Rents received in advance and security deposits 114,509 158,287
Accounts payable and accrued expenses (3,053,769) (1,054,869)
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Net cash provided by operating activities 17,715,601 9,855,943
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Cash flows from investing activities:
Change in restricted cash and cash equivalents (7,957,468) (223,704)
Acquisition of real estate (58,710,807) (41,111,875)
Improvements and additions to properties (13,479,107) (4,032,989)
Disposition of real estate 19,187,431 334,924
Change in deposits on acquisitions 165,404 112,696
Issuance of mortgage notes receivable (6,609,472)
Investment in and advances to affiliate (619,005) (1,235,114)
Receivable from affiliates and employees 9,245 155,932
Addition to deferred expenses (1,819,375) (897,988)
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Net cash used in investing activities (69,833,154) (46,898,118)
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Cash flows from financing activities:
Proceeds from sale of preferred stock 50,000,000
Proceeds from sale of common stock 82,120,448 47,232,825
Offering costs paid (1,967,127) (4,259,242)
Proceeds from issuance of mortgage notes payable 28,643,117 61,815,296
Repayments of mortgage notes payable (25,464,196) (105,728,400)
Proceeds from issuance of notes payable 250,000
Repayments of notes payable (56,660) (68,675)
Distributions (22,272,750) (9,684,564)
Conversion of convertible subordinated debentures payable (406) (348)
------------- -------------
Net cash provided by financing activities 61,252,426 39,306,892
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Net change in cash and cash equivalents 9,134,873 2,264,717
Cash and cash equivalents, beginning of the year 2,877,760 419,667
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Cash and cash equivalents, end of period $12,012,633 $2,684,384
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</TABLE>
The accompanying notes are an integral part of these
consolidated financial statements.
<PAGE>
CENTERPOINT PROPERTIES CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION:
These unaudited Consolidated Financial Statements of CenterPoint Properties
Corporation, a Maryland Corporation (the "Company"), have been prepared pursuant
to the Securities and Exchange Commission ("SEC") rules and regulations and
should be read in conjunction with the December 31, 1995, Financial Statements
and Notes thereto included in the Company's Form 10-K. The following Notes to
Consolidated Financial Statements highlight significant changes to the Notes
included in the December 31, 1995, Audited Financial Statements and present
interim disclosures as required by the SEC. The accompanying Consolidated
Financial Statements reflect, in the opinion of management, all adjustments
necessary for a fair presentation of the interim financial statements. All such
adjustments are of a normal and recurring nature. The consolidated balance
sheet as of December 31, 1995, has been derived from the Company's Audited
Financial Statements.
The consolidated statements of operations and statements of cash flows for prior
periods have been reclassified to conform with current classifications with no
effect on results of operations or cash flows.
1. PREFERRED STOCK, COMMON STOCK AND RELATED TRANSACTIONS
Under the terms of the Company's 1995 Director Stock Plan, adopted in 1995,
certain directors were granted 2,516 unrestricted shares of the Company's
common stock in March, 1996. Shares were awarded in the name of each of
the participants, who have all the rights of other common stockholders.
Under the terms of the Company's 1995 Restricted Stock Incentive Plan,
adopted in 1995, certain key employees were granted 8,290 restricted shares
of the Company's common stock in March, 1996. Shares were awarded in the
name of each of the participants, who have all the rights of other common
stockholders, subject to certain restrictions and forfeiture provisions.
Restrictions on the shares expire no more than eight years after the date
of award, or earlier if certain performance targets are met.
Unearned compensation was recorded at the date of award based on the market
value of the shares. Unearned compensation, which is shown as a separate
component of stockholders' equity, is being amortized to expense over the
eight year vesting period.
Under the terms of Company's 1993 Stock Option Plan, options for 104,428
shares of common stock were issued in March, 1996. The options were
granted at $22.50 per share and are exercisable per the plan.
<PAGE>
At the Annual Meeting of Stockholders on May 14, 1996, the stockholders
approved, among other things, an amendment to the Articles of Incorporation
of the Company to authorize the issuance of 2,272,727 shares of new non-
voting Class B Common Stock. The issued and outstanding shares of Series A
Preferred Stock were automatically converted, on a one for one basis, into
shares of Class B Common Stock upon the stockholders' approval of the
amendment to the Articles of Incorporation.
On June 12, 1996, the Company commenced trading its shares on the New York
Stock Exchange. The Company's stock was previously traded on the American
Stock Exchange.
On July 2, 1996, the Company completed a public offering of 3,450,000
shares of common stock at $23.75 per share under a shelf registration
statement declared effective by the Securities and Exchange Commission in
January, 1996. Net proceeds from the offering after the underwriting
discounts were approximately $80.2 million. The proceeds of the offering
were used to refund approximately $55.3 million outstanding under the
Company's lines of credit with the balance of $24.9 million to fund
investments.
Income per share amounts are based on the weighted average of common and
common equivalent (stock options and Class B common stock) shares
outstanding of 16,685,417 and 9,754,348 for the three months ended
September 30, 1996 and 1995, respectively, and 14,293,487 and 9,089,621 for
the nine months ended September 30, 1996 and 1995, respectively. The
assumed conversion of convertible subordinated debentures into common
shares for purposes of computing fully diluted earnings per share would be
anti-dilutive.
2. LONG-TERM DEBT AND LINES OF CREDIT
In April, 1996, the Company refunded its outstanding 1991 and 1993 tax
exempt and related taxable bonds by issuing new tax exempt and taxable
bonds in the aggregate principal amount of $22.22 million. The City of
Gary, Indiana, was the nominal issuer of both the refunded and the
refunding bonds.
The new bonds were issued under a flexible "multi-modal" facility
permitting the issuance of indebtedness in maturities up to five years,
with the interest rate resetting to market on the maturity date selected.
The new issuance facility is backed by a letter of credit issued by The
Royal Bank of Scotland, which issued a similar letter of credit supporting
the refunded debt.
The refunding bonds were issued in a tax exempt tranche of $20.54 million
and a $1.68 million taxable tranche. Both tranches have a nominal maturity
of March 1, 2031. The refunded bonds were issued in two series, 1991
($15.5 million) and 1993
<PAGE>
($7.5 million), which were divided into tax exempt and taxable tranches
aggregating $20.54 million and $2.46 million, respectively. The balance
of the bonds ($0.78 million) not refunded through the reissuance of new
bonds was refunded with cash on hand.
An extraordinary charge of $1.4 million was incurred representing the
unamortized balance of deferred costs associated with the initial fundings
in 1991 and 1993. Management believes the reduction in interest expense
and the simplification of the new form outweighs this one-time charge.
In May, 1996, a mortgage note payable by the Company, with a balance of
$2,069,529 at December 31, 1995, was assumed from the Company of the
collateralized property located in Hodgkins, Illinois.
In June, 1996, a mortgage note payable for $5,704,677 was assumed with the
acquisition of a property in Itasca, Illinois and a $7,603,004 mortgage
was assumed with the acquisition of a property in Franklin Park, Illinois.
3. ACQUISITION AND DISPOSITION OF REAL ESTATE
In April, 1996, the Company acquired an industrial property located in
Hodgkins, Illinois for approximately $13.2 million, which was funded with
an advance under the Company's lines of credit and sold a retail property
in Chicago, Illinois for approximately $0.9 million.
In May, 1996, the Company acquired an industrial property located in
Milwaukee, Wisconsin for approximately $5.1 million and one located in Elk
Grove Village, Illinois for approximately $1.2 million. Both were funded
with advances under the Company's lines of credit.
Also, in May, 1996, the Company acquired a 27.14 acre site in Elk Grove
Village, Illinois for approximately $3.8 million. The site will be
utilized for a warehouse and distribution development project.
In May, 1996, the Company disposed of four properties (located in Hodgkins,
Illinois, Naperville, Illinois and, with respect to two of the properties,
Itasca, Illinois) in transactions that qualify as a tax-free exchange under
applicable provisions of the Internal Revenue Code. The aggregate
consideration for the four properties was approximately $14.8 million.
This amount was used to acquire qualified replacement property.
One other property, located in Elk Grove Village, Illinois, was sold in
May, 1996 for approximately $1.1 million through a purchase option
exercised by the tenant of the property.
<PAGE>
In June, 1996, two industrial properties were purchased utilizing the
proceeds from the exchange properties sold in May, 1996, The two
industrial properties, located in Elk Grove Village, Illinois and Itasca,
Illinois, were purchased for approximately $2.9 million and $10.0 million,
respectively.
Two other industrial properties were purchased in June, 1996 with advances
under the Company's lines of credit, in Franklin Park, Illinois for
approximately $9.3 million and the other in Elk Grove Village, Illinois was
purchased for $5.2 million.
One industrial property, located in Alsip, Illinois, was sold in June, 1996
for approximately $0.5 million.
In September, 1996, two industrial properties were purchased. The first
property, located in Northlake, Illinois, was purchased for approximately
$22.6 million and funded in part with a $16.0 million advance under the
Company's line of credit with Lehman Brothers and in part with proceeds of
a public offering of shares of the Company's Common Stock completed on
July 2, 1996. The other property, located in Franklin Park, Illinois, was
purchased for approximately $1.9 million and funded with proceeds from the
exchange properties sold in May, 1996.
In September, 1996, the Company disposed of property located in St.
Charles, Illinois in a transaction that is intended to qualify as a tax-
free exchange under applicable provisions of the Internal Revenue Code.
Consideration for the property was approximately $5.4 million. This
amount, currently being held by a third party, must be used to acquire a
qualified replacement property within 180 days after the disposition in
order to preserve the tax-free exchange treatment for the transaction.
4. INVESTMENT IN AND ADVANCES TO AFFILIATE
The Company holds approximately 99% of the economic interest in
CenterPoint Realty Services Corporation ("CRS"). To maintain compliance
with limitations on income from business activities received by REITs and
their qualified REIT subsidiaries, the Company holds its interest in CRS as
an unconsolidated taxable subsidiary.
As of September 30, 1996, the Company had advanced to CRS
approximately $5.8 million under a demand loan with an interest rate of
8.125%. The proceeds of the loan were applied towards a development
project held for sale by CRS in the fourth quarter of 1996. Principal and
interest are due upon demand.
5. STOCK-BASED-COMPENSATION
In 1995, the FASB issued Statement of Financial Accounting Standards
No. 123, "Accounting for Stock-Based Compensation" (SFAS 123). Under the
provisions of SFAS 123, companies can elect to account for stock-based
compensation plans using
<PAGE>
a fair-value-based method or continue measuring compensation expense for
those plans using the intrinsic value method prescribed in Accounting
Principles Board Opinion No. 25, "Accounting for Stock Issued to
Employees." SFAS 123 requires that companies electing to continue using
the intrinsic value method must make pro-forma disclosures of net income
and earnings per share as if the fair-value-based method of accounting
had been applied.
The Company has elected to continue to account for stock-based compensation
using the intrinsic value method. As such, SFAS 123 did not have an impact
on the Company's reported results of operations or financial position. The
pro-forma information required by SFAS 123 will be included in the
footnotes to the Company's 1996 year end consolidated financial statements.
<PAGE>
6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS
Supplemental disclosures of cash flow information for nine months ended
September 30, 1996 and 1995:
September 30, September 30,
1996 1995
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Interest paid and interest capitalized
was as follows:
Interest paid $8,302,249 $10,383,800
Interest capitalized 81,813 20,386
In conjunction with the acquisition of real estate, the Company acquired
the following asset and assumed the following liability amounts:
Purchase of real estate $75,680,743 $42,186,014
Accounts receivable 614,227 44,953
Prepaid expenses and other assets 125,374
Mortgage notes payable (13,307,681)
Accrued expenses (4,401,856) (1,119,092)
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Acquisition of real estate $58,710,807 $41,111,875
------------- -------------
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In conjunction with the disposition of real estate, the Company disposed
of the following asset and liability amounts:
Disposal of real estate $22,662,968 $334,924
Accounts receivable 591,663
Prepaid expenses and other assets 22,432
Mortgage notes receivable (935,000)
Mortgage notes payable (2,069,529)
Accrued expenses (1,085,103)
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Disposition of real estate $19,187,431 $334,924
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Conversion of convertible subordinated debentures payable:
Convertible subordinated debentures
converted $ 8,654,000 $12,760,000
474,175 and 699,161 shares of common
stock issued at $18.25 per share,
respectively 8,653,594 12,759,652
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Cash disbursed for fractional shares $ 406 $ 348
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7. COMMITMENTS AND CONTINGENCIES
In the normal course of business, from time to time, the Company is
involved in legal actions relating to the ownership and operations of its
properties. In management's opinion, the liabilities, if any, that may
ultimately result from such legal actions are not expected to have a
materially adverse effect on the consolidated financial position of the
Company.
<PAGE>
In May, 1996, the Company acquired an existing 60-year land lease for 50
acres inside Chicago's O'Hare International Airport. Under the terms of
the lease, base rent is $0.30 per square foot, escalating by $0.009 per
square foot per year. Base rent is also increased in relation to the
development of the premises. An additional amount for percentage rent is
due under the lease in an amount equal to 3.13% of net cash flow, net
financing proceeds and net residual receipts. O'Hare Express Center, being
developed on the land, will be a $60 million air freight forwarding and
warehouse complex. The 825,000 square foot complex is anticipated to be
constructed in three phases over a three year period. Two buildings
consisting of 138,000 square feet for Burlington Air Express and 129,000
square feet for a tenant yet to be identified are under construction or
development.
The Company has entered into other contracts for the acquisition of
properties. Each acquisition is subject to satisfactory completion of due
diligence and, in the case of development projects, completion and
occupancy of the project.
At September 30, 1996, twelve of the properties owned are subject to
purchase options held by certain tenants. The purchase options are
exercisable at various intervals through 2006, each for an amount greater
than the net book value of the asset. Management does not currently
anticipate than such options will be exercised and believes that any such
exercises will not materially affect the results or prospects of the
Company.
8. RELATED PARTY TRANSACTIONS
In June, 1996, the Company acquired three properties in which Robert
Stovall, the Company's Chief Operations Officer and a director, and Michael
Mullen, the Company's Executive Vice President of Acquisitions had, or
will, in the case of two of the properties, continue to own a minority
interest in the partnership owning such properties. The three properties
were purchased for an aggregate amount of approximately $24.6 million in
transactions which satisfied the Company's investment criteria and were
approved by the Company's independent directors.
9. SUBSEQUENT EVENTS
On October 24, 1996, the Company closed a $135 million unsecured credit
facility to replace the Company's secured lines of credit. The line is co-
led by First Chicago NBD and Lehman Brothers, with participating banks
including ABN LaSalle, Bank of America, Bank of Boston and NationsBank.
The initial interest rate is LIBOR plus 1.45% for LIBOR borrowings and
First Chicago's corporate base rate plus .45% for other borrowings,
however, the margins over LIBOR and the corporate base rate are subject to
change based on the rating by Moody's Investors Service, Inc. of the long
term debt of the Company which the Company anticipates obtaining prior to
the end of the first quarter of 1997. The Company drew down $20.8 million
under the new credit facility to repay and terminate its secured line of
credit with Lehman
<PAGE>
Brothers Holdings Inc., and the Company terminated its secured line of
credit with ABN LaSalle under which nothing was outstanding.
Due to the closing of the unsecured credit facility referred to above, an
extraordinary charge of $1.8 million will be recognized in the fourth
quarter of 1996. The unamortized balance of deferred costs on the
Company's secured lines were expensed upon repayment and termination of the
lines.
In October, 1996 three properties were purchased, one in Lemont, Illinois
for $2.3 million, one in St. Charles, Illinois for $3.3 million and the
third in Elgin, Illinois for $5.2 million. The acquisitions were funded
with proceeds of $3.0 million from the tax-free exchange properties that
occurred in May, 1996, an advance on the Company's line of credit of $4.0
million and the balance with working capital.
Since September 30, 1996, an additional $200,000 of convertible
subordinated debentures have been converted to 10,958 shares of common
stock. As of October 31, 1996, the principal amount of convertible
subordinated debentures outstanding is $14,390,000.
<PAGE>
10. PRO FORMA FINANCIAL INFORMATION
Due to the effect of the January, 1995 public offering, the September, 1995
private offering, the July, 1996 public offering and the subsequent
acquisitions and dispositions of properties, the historical results are
not indicative of the future results of operations. The following
unaudited pro forma information for the nine months ended September 30,
1996 and 1995 is presented as if the 1995 acquisitions of properties, the
1996 acquisitions and dispositions of properties, the January, 1995 public
offering, the September, 1995 private offering, the July 2, 1996 public
offering and the corresponding repayment of certain debt had all occurred
on January 1, 1995 (or on the date the property first commenced operations
with a third party tenant, if later). The pro forma information is based
upon historical information and does not purport to present what actual
results would have been had the offering and related transactions, in fact,
occurred at January 1, 1995, or to project results for any future period.
Nine months ended September 30,
-------------------------------
1996 1995
---- ----
(in thousands, except for per share data)
-----------------------------------------
Revenues $49,219 $41,755
------- -------
Expenses:
Operating expenses 17,276 13,457
General and administrative 1,655 1,447
Depreciation and amortization 8,265 7,906
Interest expense, net 7,135 7,066
Amortization of financing costs 893 1,009
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Total expenses 35,224 30,885
------- -------
Net income before extraordinary item $13,995 $10,870
------- -------
------- -------
Net income per common share $ 0.84 $ 0.73
------- -------
------- -------
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
AND FINANCIAL CONDITION.
RESULTS OF OPERATIONS - 1996 COMPARED WITH 1995:
GENERAL BACKGROUND
The following is a discussion of the historical operating results of the
Company. The discussion should be read in conjunction with the Form 10-K
filed for the fiscal year ended December 31, 1995.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1996 TO NINE MONTHS ENDED
SEPTEMBER 30, 1995.
Total revenues in the first nine months of 1996 increased by $10.7 million
or 32.0% over the same period last year. The revenues of the Company are
derived primarily from base rents and additional rents from expense
reimbursements, pursuant to the terms of tenant leases for occupied space
at the warehouse/industrial properties. These properties represent
approximately 96% of the gross leasable area of the Company's portfolio as
of September 30, 1996.
Rental revenues increased by $8.0 million in 1996 primarily because of full
period income from properties acquired in 1995 and acquisitions in 1996 net
of disposals. In addition, mortgage interest income, which was non-
existent in 1995, contributed $1.0 million to revenue, while real estate
fee income primarily consisting of fees earned by the Company in connection
with its build-to-suit and development activities and third party
management fees increased by $1.3 million and equity in net income of
affiliate increased by $0.4 million. The Company's unconsolidated
affiliate began operations during the third quarter of 1995 and did not
recognize income from development activities until 1996.
On a "same-store" basis (comparing the results of operations, on a cash
basis, of the properties owned at September 30, 1995, with the results of
operations of the same properties at September 30, 1996), the Company
recognized a 4.2 % increase in revenues primarily due to lease up of vacant
space, rental increases on renewed leases and contractual increases in
minimum rent under leases in place.
Total operating expenses, excluding general and administrative, interest,
depreciation and amortization, increased by $3.9 million, from $10.1
million in 1995 to $14.0 million in 1996. $3.2 million of the increase is
due to real estate taxes. The majority of the increase, $2.2 million,
resulted from 1995 and 1996 acquisitions and the balance, $1.0 million from
tax increases throughout the portfolio with the largest increase in Cook
County, Illinois. Insurance, utilities and property operating and leasing
expenses, all components of operating expenses, increased at levels
comparable to the level of acquisitions.
<PAGE>
Depreciation and other amortization increased by $1.1 million, from
$6.5 million in 1995 to $7.6 million in 1996. The increase is due to full
period depreciation on acquisitions completed during 1995 and 1996.
General and administrative expenses increased by $0.2 million, from
$1.4 million in 1995 to $1.6 million in 1996, due primarily to the growth
of the Company.
Interest incurred decreased by $2.0 million over the same period last year.
Of this decrease, $1.5 million is due to the conversion to common stock of
$8.7 million of convertible subordinated debentures through September 30,
1996 and $20.7 million through December 31, 1995 and the balance is due to
lower average loan balances and reduced borrowing rates.
Other expenses, generally non-operating items, increased by $0.1 million
from the same period last year due to the loss on disposition of three
properties totaling $102,000.
As a result of the factors described above, net income, before
extraordinary item, increased by $7.6 million from $5.0 million for the
first nine months of 1995 to $12.6 million for the first nine months of
1996, an increase of 153.2%. Earnings before interest, income taxes,
depreciation and amortization for the nine months increased by $6.8
million, from $23.1 million in 1995 to $29.9 million in 1996.
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1996 TO THREE MONTHS ENDED
SEPTEMBER 30, 1995,
Total revenues for the three months ended September 30, 1996 increased by
$4.1 million or 35.8% over the same period last year. Rental revenues
increased by $3.0 million in 1996 primarily because of full period income
from properties acquired in 1995 and acquisitions in 1996 net of disposals.
In addition, mortgage interest income, which was non-existent in 1995,
contributed $0.5 million to revenue, while real estate fee income primarily
consisting of fees earned by the Company in connection with its build-to-
suit and development activities and third party management fees increased
by $0.8 million and equity in net income of affiliate decreased by $0.2
million. The nine month equity is ahead of last year, but the revenue from
development is not consistent throughout quarters.
On a "same-store" basis (comparing the results of operations, on a cash
basis, of the properties owned at September 30, 1995, with the results of
operations of the same properties at September 30, 1996), the Company
recognized a 3.9 % increase in revenues primarily due to rental increases
on renewed leases and contractual increases in minimum rent under leases in
place.
Total operating expenses, excluding general and administrative, interest,
depreciation and amortization, increased by $1.6 million, from $3.3 million
in 1995 to $4.9 million in 1996. The majority of the increase in operating
expenses, $1.2 million, is due to real estate taxes,
<PAGE>
and the balance, $0.4 million, to property operating expenses which have
increased with the growth of the Company.
Depreciation and other amortization increased by $0.1 million, from
$2.5 million in 1995 to $2.6 million in 1996. The increase is due to full
period depreciation on acquisitions completed during 1995 and 1996.
General and administrative expenses decreased by $0.1 million, from
$0.5 million in 1995 to $0.4 million in 1996, due primarily to the timing
of expenses during the year. The nine month total has increased from 1995
to 1996 due to the growth of the Company.
Interest incurred decreased by $1.0 million over the same period last year
due to primarily to the conversion to common stock of $8.7 million of
convertible subordinated debentures through September 30, 1996 and
$20.7 million through September 30, 1995.
As a result of the factors described above, net income, before
extraordinary item, increased by $3.7 million from $1.6 million for the
three months of 1995 to $5.3 million for the three months of 1996, an
increase of 218.5%. Earnings before interest, income taxes, depreciation
and amortization for the three months increased by $2.5 million, from
$8.2 million in 1995 to $10.7 million in 1996.
LIQUIDITY AND CAPITAL RESOURCES
Cash flow generated from Company operations has historically been utilized
for working capital purposes and making distributions, while proceeds from
financings and capital raises have been used to fund acquisitions and other
capital costs. For the nine months ended September 30, 1996, cash flow
from operations was $17.7 million. Cash flow during that period
contributed to payment of $17.3 million of current year distributions and
$5.0 million of distributions declared in the fourth quarter of 1995 and
paid in the first quarter of 1996.
Acquisitions and improvements and additions to properties of approximately
$72.2 million for the nine months were funded with borrowings under the
Company's lines of credit totaling $28.6 million, proceeds from the
disposition of real estate of $10.4 million and the net proceeds proceeds
of the July 2, 1996 public offering of common stock. The remaining
proceeds from disposition of real estate, $8.8 million, are invested in a
restricted cash account to be applied to acquisitions closing in the near
term.
At September 30, 1996, the Company's debt constitutes approximately 25% of
its fully diluted market capitalization. At that date, the Company's fully
diluted equity market capitalization was approximately $467 million, and
its fully diluted total market capitalization was approximately
$603 million. The Company's leverage ratios benefited in the first nine
months of 1996 from the conversion of approximately $8.7 million of its
8.22% Convertible Subordinated Debentures, due 2004, to 474,175 shares
of common stock.
<PAGE>
As of September 30, 1996, the Company had outstanding borrowings of
approximately $20.0 million under its secured revolving lines of credit
(approximately 3.3% of the Company's fully diluted market capitalization),
and the Company had remaining availability of approximately $72 million
under its lines of credit. As of September 30, 1996, the Company had two
lines of credit, a $52 million credit facility with an affiliate of Lehman
Brothers, Inc. and a $40 million facility with ABN/LaSalle. As noted in
the Notes to Financial Statements under the caption "Subsequent Events", on
October 24, 1996, the Company closed a $135 million unsecured credit
facility to replace the Company's secured lines of credit referred to
above. The line is co-led by First Chicago NBD and Lehman Brothers with
participating banks including ABN LaSalle, Bank of America, Bank of Boston
and NationsBank.
On July 2, 1996, the Company completed a public offering of 3,450,000
shares of common stock at $23.75 per share. Net proceeds from the
offering, after the underwriting discounts, were approximately
$80.2 million. The proceeds of the offering were used to repay
approximately $55.3 million then outstanding under the Company's lines of
credit and to fund future investments. The public offering left the entire
amount on the Company's lines of credit available.
As of September 30, 1996, the Company had $9.3 million in restricted cash,
most of which was held for reinvestment in future acquisitions as part of
the Company's tax free exchange of four properties in May, 1996 and one
property in September, 1996. The Company believes that its liquidity is
adequate for operations and that positive cash flow from operations, as
supplemented by proceeds of borrowings under its lines of credit and other
financings, will be adequate to fund the Company's acquisition activities
and allow distributions to the Company's stockholders in accordance with
the requirements for qualification as a REIT.
In the first nine months of 1996, the Company declared distributions of
$17.3 million, representing an annualized distribution rate of
approximately $1.62 per share. The following factors, among others, will
affect the future availability of funds for distribution: (i) scheduled
increases in base rents under existing leases and (ii) changes in minimum
base rents attributable to replacement of existing leases with new or
replacement leases.
<PAGE>
PART II. OTHER INFORMATION
ITEM 4: SUBMISSION OF MATTERS TO A VOTE OF SECURITY-HOLDERS.
During the third quarter of 1996, no matter was submitted to a vote of
security holders.
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Exhibit 10.43 - Unsecured Revolving Credit Agreement dated as of
October 23, 1996 and among The First National Bank of Chicago, as
administrative agent and lender, Lehman Brothers Holdings, Inc.,
as documentation agent and lender, the other lenders named therein
and CenterPoint Properties Corporation.
(2) Exhibit 11 - Computation of Earnings per Share.
(3) Exhibit 27 - Financial Data Schedule
(b) On July 2, 1996, the Company filed with the Commission a current
report on Form 8-K relating to the issuance and sale of up to
3,450,000 shares of the Company's Common Stock pursuant to a
Supplement to Prospectus dated June 26, 1996 under a registration
statement on Form S-3 filed with the Commission on June 5, 1995, as
amended. The Form 8-K filed the following as exhibits to the
Supplement: the form of Underwriting Agreement between the Company
and Lehman Brothers Inc., the opinion of Coffield Ungaretti & Harris
regarding the validity of the Common Stock and the opinion of
Ungaretti & Harris regarding tax matters.
<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.
CENTERPOINT PROPERTIES CORPORATION
a Maryland corporation
By: /s/ Paul S. Fisher
------------------------------------------
Paul S. Fisher
Executive Vice President and
Chief Financial Officer
November 13, 1996 (Principal Accounting Officer)
<PAGE>
UNSECURED REVOLVING CREDIT AGREEMENT
DATED AS OF OCTOBER 23, 1996
AMONG
CENTERPOINT PROPERTIES CORPORATION,
AS BORROWER,
THE FIRST NATIONAL BANK OF CHICAGO
AS ADMINISTRATIVE AGENT AND LENDER,
LEHMAN BROTHERS HOLDINGS INC.,
D/B/A
LEHMAN CAPITAL,
A DIVISION OF
LEHMAN BROTHERS HOLDINGS INC.
AS DOCUMENTATION AGENT AND LENDER, AND
THE SEVERAL OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE II THE CREDIT. . . . . . . . . . . . . . . . . . . . . . . 18
2.1. Commitment. . . . . . . . . . . . . . . . . . . . . . . 18
2.2. Final Principal Payment and Extension Option. . . . . . 19
2.3. Ratable Loans . . . . . . . . . . . . . . . . . . . . . 19
2.4. Applicable Margins. . . . . . . . . . . . . . . . . . . 19
2.5. Commitment Fee. . . . . . . . . . . . . . . . . . . . . 21
2.6. Other Fees. . . . . . . . . . . . . . . . . . . . . . . 21
2.7. Minimum Amount of Each Advance. . . . . . . . . . . . . 21
2.8. Optional Principal Payments . . . . . . . . . . . . . . 21
2.9. Method of Selecting Types and Interest Periods for
New Advances . . . . . . . . . . . . . . . . . . . . . 21
2.10. Conversion and Continuation of Outstanding Advances . . 22
2.11. Changes in Interest Rate, Etc.. . . . . . . . . . . . . 23
2.12. Rates Applicable After Default. . . . . . . . . . . . . 23
2.13. Swing Line Loans. . . . . . . . . . . . . . . . . . . . 24
2.14. Fixed Rate Loans. . . . . . . . . . . . . . . . . . . . 24
2.15. Method of Payment . . . . . . . . . . . . . . . . . . . 25
2.16. Notes; Telephonic Notices . . . . . . . . . . . . . . . 25
2.17. Interest Payment Dates; Interest and Fee Basis. . . . . 25
2.18. Notification of Advances, Interest Rates and
Prepayments . . . . . . . . . . . . . . . . . . . . . . 26
2.19. Lending Installations . . . . . . . . . . . . . . . . . 26
2.20. Non-Receipt of Funds by the Administrative Agent. . . . 26
2.21. Withholding Tax Exemption . . . . . . . . . . . . . . . 27
2.22. Voluntary Reduction of Aggregate Commitment Amount. . . 28
2.23. Usury . . . . . . . . . . . . . . . . . . . . . . . . . 28
2.24. Application of Moneys Received. . . . . . . . . . . . . 28
ARTICLE III THE LETTER OF CREDIT SUBFACILITY. . . . . . . . . . . . 29
3.1. Obligation to Issue . . . . . . . . . . . . . . . . . . 29
3.2. Types and Amounts . . . . . . . . . . . . . . . . . . . 29
3.3. Conditions. . . . . . . . . . . . . . . . . . . . . . . 30
3.4. Procedure for Issuance of Facility Letters of Credit. . 30
3.5. Reimbursement Obligations; Duties of Issuing Bank . . . 32
3.6. Participation . . . . . . . . . . . . . . . . . . . . . 32
3.7. Payment of Reimbursement Obligations. . . . . . . . . . 34
3.8. Compensation for Facility Letters of Credit . . . . . . 35
3.9. Letter of Credit Collateral Account . . . . . . . . . . 35
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ARTICLE IV CHANGE IN CIRCUMSTANCES . . . . . . . . . . . . . . . . 35
4.1. Yield Protection. . . . . . . . . . . . . . . . . . . . 35
4.2. Changes in Capital Adequacy Regulations . . . . . . . . 36
4.3. Availability of LIBOR Advances. . . . . . . . . . . . . 37
4.4. Funding Indemnification . . . . . . . . . . . . . . . . 37
4.5. Lender Statements; Survival of Indemnity. . . . . . . . 37
4.6. Limitation on Borrower's Liability. . . . . . . . . . . 38
ARTICLE V CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . 38
5.1. Initial Advance . . . . . . . . . . . . . . . . . . . . 38
5.2. Conditions to Each Advance, Issuance of Facility Letter
of Credit and Continuation/Conversion . . . . . . . . . 40
ARTICLE VI REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . 41
6.1. Existence. . . . . . . . . . . . . . . . . . . . . . . 41
6.2. Authorization and Validity. . . . . . . . . . . . . . . 41
6.3. No Conflict; Government Consent . . . . . . . . . . . . 41
6.4. Financial Statements; Material Adverse Change . . . . . 42
6.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 42
6.6. Litigation and Contingent Obligations . . . . . . . . . 42
6.7. Subsidiaries. . . . . . . . . . . . . . . . . . . . . . 43
6.8. ERISA . . . . . . . . . . . . . . . . . . . . . . . . . 43
6.9. Accuracy of Information . . . . . . . . . . . . . . . . 43
6.10. Regulation U. . . . . . . . . . . . . . . . . . . . . . 44
6.11. Material Agreements . . . . . . . . . . . . . . . . . . 44
6.12. Compliance With Laws. . . . . . . . . . . . . . . . . . 44
6.13. Ownership of Properties . . . . . . . . . . . . . . . . 44
6.14. Investment Company Act. . . . . . . . . . . . . . . . . 44
6.15. Public Utility Holding Company Act. . . . . . . . . . . 45
6.16. Solvency. . . . . . . . . . . . . . . . . . . . . . . . 45
6.17. Insurance . . . . . . . . . . . . . . . . . . . . . . . 45
6.18. NYSE and REIT Status. . . . . . . . . . . . . . . . . . 46
6.19. Environmental Matters . . . . . . . . . . . . . . . . . 46
6.20. Licenses, etc.. . . . . . . . . . . . . . . . . . . . . 47
6.21. Judgments . . . . . . . . . . . . . . . . . . . . . . . 47
6.22. Property Manager. . . . . . . . . . . . . . . . . . . . 47
6.23. Updated Schedules . . . . . . . . . . . . . . . . . . . 47
6.24. Unencumbered Assets . . . . . . . . . . . . . . . . . . 47
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ARTICLE VII COVENANTS . . . . . . . . . . . . . . . . . . . . . . . 50
7.1. Financial Reporting . . . . . . . . . . . . . . . . . . 50
7.2. Use of Proceeds . . . . . . . . . . . . . . . . . . . . 53
7.3. Notice of Default . . . . . . . . . . . . . . . . . . . 53
7.4. Conduct of Business . . . . . . . . . . . . . . . . . . 53
7.5. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 54
7.6. Insurance . . . . . . . . . . . . . . . . . . . . . . . 55
7.7. Compliance with Laws. . . . . . . . . . . . . . . . . . 55
7.8. Maintenance of Properties . . . . . . . . . . . . . . . 55
7.9. Inspection. . . . . . . . . . . . . . . . . . . . . . . 55
7.10. Maintenance of Status . . . . . . . . . . . . . . . . . 55
7.11. Dividends . . . . . . . . . . . . . . . . . . . . . . . 55
7.12. Merger; Sale of Assets. . . . . . . . . . . . . . . . . 56
7.13. Transfers of Unencumbered Assets. . . . . . . . . . . . 56
7.14. Ownership and Control of Borrower . . . . . . . . . . . 56
7.15. Subsidiaries and Qualifying Investment Affiliates . . . 57
7.16. Liens . . . . . . . . . . . . . . . . . . . . . . . . . 57
7.17. Affiliates. . . . . . . . . . . . . . . . . . . . . . . 58
7.18. Interest Rate Hedging . . . . . . . . . . . . . . . . . 58
7.19. Variable Interest Indebtedness. . . . . . . . . . . . . 58
7.20. Consolidated Net Worth. . . . . . . . . . . . . . . . . 58
7.21. Indebtedness and Cash Flow Covenants. . . . . . . . . . 58
7.22. Environmental Matters . . . . . . . . . . . . . . . . . 59
7.23. Notification of Rating Change . . . . . . . . . . . . . 60
7.24. Maximum Revenue from Single Tenant. . . . . . . . . . . 60
7.25. Negative Pledge . . . . . . . . . . . . . . . . . . . . 61
7.26. Manager . . . . . . . . . . . . . . . . . . . . . . . . 61
7.27. Acceleration Notice . . . . . . . . . . . . . . . . . . 61
7.28. Lien Searches; Title Searches . . . . . . . . . . . . . 61
7.29. Additional Covenants. . . . . . . . . . . . . . . . . . 62
7.30. Calculation of Financial Covenants Upon Property
Breaches. . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE VIII DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . 62
ARTICLE IX ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES. . . . . 65
9.1. Acceleration. . . . . . . . . . . . . . . . . . . . . . 65
9.2. Amendments, Waivers, Decisions. . . . . . . . . . . . 66
9.3. Preservation of Rights. . . . . . . . . . . . . . . . . 67
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ARTICLE X GENERAL PROVISIONS. . . . . . . . . . . . . . . . . . . 67
10.1. Survival of Representations . . . . . . . . . . . . . . 67
10.2. Governmental Regulation . . . . . . . . . . . . . . . . 67
10.3. Taxes . . . . . . . . . . . . . . . . . . . . . . . . . 67
10.4. Headings. . . . . . . . . . . . . . . . . . . . . . . . 68
10.5. Entire Agreement. . . . . . . . . . . . . . . . . . . . 68
10.6. Several Obligations; Benefits of this Agreement . . . . 68
10.7. Expenses; Indemnification . . . . . . . . . . . . . . . 68
10.8. Numbers of Documents. . . . . . . . . . . . . . . . . . 69
10.9. Accounting. . . . . . . . . . . . . . . . . . . . . . . 69
10.10. Severability of Provisions. . . . . . . . . . . . . . . 69
10.11. Nonliability of Lenders, Arrangers, Administrative
Agent and Documentation Agent . . . . . . . . . . . . . 69
10.12. Publicity . . . . . . . . . . . . . . . . . . . . . . . 69
10.13. Brokers . . . . . . . . . . . . . . . . . . . . . . . . 69
10.14. Confidentiality . . . . . . . . . . . . . . . . . . . . 70
10.15. CHOICE OF LAW . . . . . . . . . . . . . . . . . . . . . 70
10.16. CONSENT TO JURISDICTION . . . . . . . . . . . . . . . . 70
10.17. WAIVER OF JURY TRIAL. . . . . . . . . . . . . . . . . . 71
ARTICLE XI THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS . 71
11.1. Appointment . . . . . . . . . . . . . . . . . . . . . . 71
11.2. Powers. . . . . . . . . . . . . . . . . . . . . . . . . 71
11.3. General Immunity. . . . . . . . . . . . . . . . . . . . 71
11.4. No Responsibility for Loans, Recitals, etc. . . . . . . 72
11.5. Action on Instructions of Lenders . . . . . . . . . . . 72
11.6. Employment of Administrative Agents and Counsel . . . . 72
11.7. Reliance on Documents; Counsel. . . . . . . . . . . . . 72
11.8. Administrative Agent's Reimbursement and
Indemnification . . . . . . . . . . . . . . . . . . . . 73
11.9. Rights as a Lender. . . . . . . . . . . . . . . . . . . 73
11.10. Lender Credit Decision. . . . . . . . . . . . . . . . . 74
11.11. Successor Administrative Agent. . . . . . . . . . . . . 74
11.12. Notice of Defaults. . . . . . . . . . . . . . . . . . . 75
11.13. Requests for Approval . . . . . . . . . . . . . . . . . 75
11.14. Copies of Documents . . . . . . . . . . . . . . . . . . 75
11.15. Defaulting Lenders. . . . . . . . . . . . . . . . . . . 75
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ARTICLE XII RATABLE PAYMENTS. . . . . . . . . . . . . . . . . . . . 76
12.1. Intentionally Deleted . . . . . . . . . . . . . . . . . 76
12.2. Ratable Payments. . . . . . . . . . . . . . . . . . . . 76
ARTICLE XIII BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS . . . 76
13.1. Successors and Assigns. . . . . . . . . . . . . . . . . 76
13.2. Participations. . . . . . . . . . . . . . . . . . . . . 77
13.2.1. Permitted Participants; Effect. . . . . . . . . . . . . 77
13.2.2. Voting Rights . . . . . . . . . . . . . . . . . . . . . 77
13.3. Assignments . . . . . . . . . . . . . . . . . . . . . . 77
13.3.1. Permitted Assignments . . . . . . . . . . . . . . . . . 77
13.3.2. Effect; Effective Date. . . . . . . . . . . . . . . . . 78
13.4. Dissemination of Information. . . . . . . . . . . . . . 79
13.5. Tax Treatment . . . . . . . . . . . . . . . . . . . . . 79
13.6. Possession of Loan Documents and Register . . . . . . . 79
ARTICLE XIV NOTICES . . . . . . . . . . . . . . . . . . . . . . . . 79
14.1. Giving Notice . . . . . . . . . . . . . . . . . . . . . 79
14.2. Change of Address . . . . . . . . . . . . . . . . . . . 80
14.3. Accounts. . . . . . . . . . . . . . . . . . . . . . . . 80
ARTICLE XV. COUNTERPARTS . . . . . . . . . . . . . . . . . . . . . 80
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Exhibit A Form of Note
Exhibit B Form of Opinion
Exhibit C Form of Compliance Certificate
Exhibit D Form of Assignment Agreement
Exhibit E Form of Loan/Credit Related Money Transfer Instruction
Exhibit F Minimum Specifications for Environmental Investigations
Schedules:
Schedule 1 Subsidiaries and Other Investments
Schedule 2 Unencumbered Assets
Schedule 3 Indebtedness and Liens
Schedule 4 Plans and Multiemployer Plans
Schedule 5 Environmental Disclosures
Schedule 6 Noncompliance with Laws
Schedule 7 Litigation and Investigations
Schedule 8 Contingent Obligations
Schedule 9 Indebtedness Defaults
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UNSECURED REVOLVING CREDIT AGREEMENT
This Unsecured Revolving Credit Agreement, dated as of October 23, 1996, is
among CENTERPOINT PROPERTIES CORPORATION, a Maryland corporation (the
"BORROWER"), the several banks, financial institutions and other entities from
time to time parties to this Agreement (collectively, the "LENDERS"), LEHMAN
BROTHERS HOLDINGS INC. D/B/A LEHMAN CAPITAL, A DIVISION OF LEHMAN BROTHERS
HOLDINGS INC. ("Lehman") not individually but as Documentation Agent and THE
FIRST NATIONAL BANK OF CHICAGO, not individually, but as "ADMINISTRATIVE AGENT".
RECITALS
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning, operating, leasing, managing, financing and selling
warehouse/industrial properties. It also currently owns four retail
properties having approximately 73,000 square feet of gross leasable area and
one 682-unit apartment complex located at 440 North Lake Street, Miller,
Indiana (collectively, the "NON-INDUSTRIAL PROPERTIES").
B. The Borrower's common stock is listed on the New York Stock
Exchange, and the Borrower is qualified as a real estate investment trust.
C. The Borrower has requested that the Lenders make loans available to
the Borrower in the maximum aggregate principal amount of $135,000,000
outstanding from time to time pursuant to the terms of this Agreement (the
"Facility"), and that the Administrative Agent act as administrative agent
for the Lenders and that the Documentation Agent act as documentation agent
for the Lenders. The Administrative Agent, the Documentation Agent and the
Lenders have agreed to do so.
D. The Documentation Agent and First Chicago Capital Markets, Inc. have
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:
ARTICLE I
DEFINITIONS
As used in this Agreement:
"ADMINISTRATIVE AGENT" means The First National Bank of Chicago in its
capacity as agent for the Lenders pursuant to ARTICLE X, 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.
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"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, in the case of LIBOR Advances, for the same
Interest Period, including Reimbursement Obligations.
"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 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, which initially shall be $135,000,000, subject to Borrower's right to
reduce the Aggregate Commitment pursuant to SECTION 2.22 and which shall
otherwise only be increased with the consent of all Lenders.
"AGREEMENT" means this Unsecured Revolving Credit Agreement, as it may be
amended or modified and in effect from time to time.
"ALLOCATED FACILITY AMOUNT" means, at any time, the sum of all then
outstanding Advances and the then Facility Letter of Credit Obligations.
"APPLICABLE CAP RATE" means 10.25% for all Non-industrial Properties that
are not multi-family Properties and 9.50% for all industrial and multi-family
Properties.
"APPLICABLE LAWS" is defined in SECTION 6.24(c).
"APPLICABLE MARGIN" means the applicable margin set forth in the table in
SECTION 2.4 used in calculating the interest rate applicable to the various
Types of Advances, which shall vary from time to time in accordance with the
long term unsecured debt rating of Borrower or the rating of this Facility in
the manner set forth in SECTION 2.4.
"ARRANGERS" means Documentation Agent and First Chicago Capital Markets,
Inc.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"ASSIGNMENT" as defined in SECTION 13.3.
"AUTHORIZED OFFICER" means with respect to the Borrower any of the
President, Executive Vice President, Chief Operating Officer, Chief Financial
Officer or Treasurer, acting singly.
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"BORROWER" means CenterPoint Properties Corporation, and its successors and
permitted assigns.
"BORROWING DATE" means a date on which an Advance is made hereunder.
"BORROWING NOTICE" is defined in SECTION 2.9.
"BREAK-UP FEE" means the amount due pursuant to SECTION 4.4 in the event a
LIBOR Advance or Fixed Rate Advance is prepaid.
"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, Illinois, and New York, 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, Illinois and New York, New York for
the conduct of substantially all of their commercial lending activities.
"CAPITAL EXPENDITURE RESERVE AMOUNT" means, for any period, 5 cents per
square foot of leasable space in Unencumbered Assets (on an annualized basis).
"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 which is not a corporation
and any and all warrants or options to purchase any of the foregoing.
"CAPITALIZED LEASE" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"CAPITALIZED LEASE OBLIGATIONS" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"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.
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"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 of this Agreement.
"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMITMENT FEE" is defined in SECTION 2.5.
"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 13.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"CONDEMNATION" is defined in SECTION 8.9.
"CONSOLIDATED NET WORTH" means, as of any date of determination, an amount
equal to (a) Market Capitalization as of such date MINUS (b) Total Liabilities
(other than Excludable Convertible Securities) as of such date.
"CONSOLIDATED SECURED INDEBTEDNESS" means, as of any date of determination,
the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date which is secured by a
Lien on any asset of the Borrower or any Subsidiary, including without
limitation loans secured by mortgages, stock, or partnership interests, and
(b) the Borrower's pro rata share (based on economic interest) of any secured
debt of Investment Affiliates, without duplication of any Indebtedness included
under clause (a), after eliminating intercompany items.
"CONSOLIDATED SENIOR UNSECURED INDEBTEDNESS" means, as of any date of
determination, the sum of (a) the aggregate principal amount of all Indebtedness
of the Borrower and its Subsidiaries outstanding at such date (excluding
Indebtedness which is contractually subordinated to the Indebtedness of the
Borrower and its Subsidiaries under the Loan Documents on customary terms
acceptable to the Administrative Agent) which does not constitute Consolidated
Secured Indebtedness, and (b) the Borrower's pro rata share (based
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on economic interest) of any unsecured debt of Qualifying Investment Affiliates
that own assets included in the calculation of Value of Unencumbered Assets,
without duplication of any Indebtedness included under clause (a), after
eliminating intercompany items.
"CONSOLIDATED TOTAL INDEBTEDNESS" means, as of any date of determination,
all Indebtedness of the Borrower and its Subsidiaries outstanding at such date,
determined on a consolidated basis in accordance with GAAP, after eliminating
intercompany items.
"CONSOLIDATED UNSECURED INDEBTEDNESS" means, as of any date of
determination, the sum of the aggregate principal amount of all Indebtedness for
borrowed money of the Borrower and its Subsidiaries outstanding at such date
which does not constitute Consolidated Secured Indebtedness, after eliminating
intercompany items.
"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 or Qualifying
Investment Affiliates, are treated as a single employer under Section 414 of the
Code.
"CONVERSION/CONTINUATION NOTICE" is defined in SECTION 2.10.
"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 such corporate base rate changes.
"DEBT SERVICE" means, for any period, (a) Interest Expense for such period
PLUS (b) the aggregate amount of regularly scheduled principal payments of
Indebtedness (excluding optional prepayments and balloon principal payments due
on maturity in respect of any Indebtedness) required to be made during such
period by the Borrower, or any of its Subsidiaries PLUS (c) a percentage of all
such regularly scheduled principal payments required to be made during such
period by any Investment Affiliate on Indebtedness (excluding optional
prepayments and balloon principal payments due on maturity in respect of any
Indebtedness) taken into account in calculating Interest Expense, equal to the
greater of (x) the percentage of the principal amount of such Indebtedness for
which the Borrower or any Subsidiary is liable and (y) the percentage ownership
interest in such Investment Affiliate held by the Borrower and any Subsidiaries,
in the aggregate, without duplication.
"DEBT-TYPE PREFERRED STOCK" means, for any Person, any preferred stock
issued by such Person which is not typical preferred stock but instead is both
(i) redeemable by the holders thereof on any fixed date or upon the occurrence
of any event and (ii) as to payment of dividends or amounts on liquidation,
either guaranteed by any direct or indirect subsidiary of such Person or secured
by any property of such Person or any direct or indirect subsidiary of such
Person.
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"DEBT-TYPE PREFERRED STOCK EXPENSE" for any period for any Person, the
aggregate dividend payments due to the holders of Debt-Type Preferred Stock of
such Person, whether payable in cash or in kind, and whether or not actually
paid during such period.
"DEFAULT" means an event of default 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, 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.
"DOCUMENTATION AGENT" means Lehman Brothers Holdings Inc.
"EBITDA" means income before extraordinary items (but after the impact of
minority interests and reduced to eliminate any income from Investment
Affiliates), as reported by the Borrower and its Subsidiaries on a consolidated
basis in accordance with GAAP, plus Interest Expense, depreciation, amortization
and income tax (if any) expense plus a percentage of such income (adjusted as
described above) of any Investment Affiliate equal to the allocable economic
interest in such Investment Affiliate held by the Borrower and any Subsidiaries,
in the aggregate (provided that no item of income or expense shall be included
more than once in such calculation even if it falls within more than one of the
foregoing categories).
"ENVIRONMENTAL LAWS" means any and all Federal, state, local or municipal
laws, rules, orders, regulations, statutes, ordinances, codes, decrees,
requirements of any Governmental Authority having jurisdiction over the
Borrower, its Subsidiaries or Investment Affiliates, or their respective assets,
and regulating or imposing liability or standards of conduct concerning
protection of human health or the environment, as now or may at any time
hereafter be in effect, in each case to the extent the foregoing are applicable
to the operations of the Borrower, any Investment Affiliate, or any Subsidiary
or any of their respective assets or Properties.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"EXCLUDABLE CONVERTIBLE SECURITIES" means convertible subordinated debt
instruments which can be converted by the holder into common shares of the
Borrower at a price which is less than the market price for such shares as of
the end of the applicable quarter or which were converted during such quarter.
"FACILITY" is defined in RECITAL C.
"FACILITY LETTER OF CREDIT" means a Letter of Credit issued hereunder.
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"FACILITY LETTER OF CREDIT OBLIGATIONS" means, as at the time of
determination thereof, all liabilities, whether actual or contingent, without
duplication, of the Borrower with respect to Facility Letters of Credit,
including the aggregate undrawn face amount of the then outstanding Facility
Letters of Credit, but not including Reimbursement Obligations.
"FACILITY TERMINATION DATE" means October 24, 1999, subject to extension
pursuant to the terms and conditions of SECTION 2.2 hereof or such earlier date
on which the principal balance of the Facility and all other sums due in
connection with the Facility shall be due as a result of the acceleration of the
Facility.
"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.
"FINANCEABLE GROUND LEASE" means, a ground lease satisfactory to the
Required Lenders and the Administrative Agent's counsel in their reasonable
discretion, which must provide protections for a potential leasehold mortgagee
("MORTGAGEE") which include, among other things (i) a remaining term of no less
than 25 years from the Closing Date, (ii) that the lease will not be terminated
until the Mortgagee has received notice of a default and has had a reasonable
opportunity to cure or complete foreclosure, and fails to do so, (iii) a new
lease on the same terms to the Mortgagee as tenant if the ground lease is
terminated for any reason, (iv) non-merger of the fee and leasehold estates,
(v) free transferability of the tenant's interest under the ground lease and
(vi) that insurance proceeds and condemnation awards (from the fee interest as
well as the leasehold interest) will be applied pursuant to the terms of a
leasehold mortgage.
"FIRST CHICAGO" means The First National Bank of Chicago in its individual
capacity, and its successors.
"FIXED RATE" as defined in SECTION 2.14.
"FIXED RATE ADVANCE" means an Advance which bears interest at a Fixed Rate.
"FULLY DILUTED DEBT SERVICE" means Debt Service less the amount of Debt
Service attributable to instruments which as of the end of the applicable
quarter are Excludable Convertible Securities.
"FUNDS FROM OPERATIONS" means, for any period, net income for such period
before depreciation and amortization, gains or losses from extraordinary items
(but including gains
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or losses on sales of real estate in the ordinary course of business, E.G. build
to suits), gains or losses on investments in marketable securities and any
provisions/benefits for income taxes for such period, and after adjustments for
Investment Affiliates, including joint ventures.
"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 7.1.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or other
political subdivision thereof and any quasi-governmental agency exercising
executive, legislative, judicial, regulatory or administrative functions of or
pertaining to government.
"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, counter-indemnity 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
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.
"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 and other accounts payable and accrued expenses
incurred in the ordinary course of business and payable in accordance with
customary practices), to the extent such obligations constitute indebtedness for
the purposes of GAAP, (c) any other indebtedness of such Person which is
evidenced by a note, bond, debenture or similar instrument, (d) all Capitalized
Lease Obligations, (e) all obligations of such Person in respect of acceptances
issued or created for
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the account of such Person, (f) all Guarantee Obligations of such Person
(excluding in any calculation of consolidated indebtedness of the Borrower,
Guarantee Obligations of the Borrower in respect of primary obligations of any
Subsidiary), (g) all reimbursement obligations of such Person for Letters of
Credit and other contingent liabilities, (h) 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, (i) any repurchase obligation or liability of such
Person or any of its Subsidiaries with respect to accounts or notes receivable
sold by such Person or any of its Subsidiaries, (j) Debt-Type Preferred Stock,
and (k) such Person's pro rata share of debt in Investment Affiliates and any
loans where such Person is liable as a general partner, provided, however, that
Indebtedness shall not include Excludable Convertible Securities or ground lease
payments (other than Capitalized Lease Obligations).
"INTEREST EXPENSE" means all interest expense of the Borrower and its
Subsidiaries determined in accordance with GAAP PLUS (i) capitalized interest
not covered by an interest reserve from a loan facility, PLUS (ii) the allocable
portion (based on liability) of any accrued or paid interest incurred on any
obligation for which the Borrower is wholly or partially liable under repayment,
interest carry, or performance guarantees, or other relevant liabilities, PLUS
(iii) the allocable percentage of any accrued or paid interest incurred on any
Indebtedness of any Investment Affiliate, whether recourse or non-recourse,
equal to the applicable economic interest in such Investment Affiliate held by
the Borrower and any Subsidiaries, in the aggregate, PLUS (iv) Debt-Type
Preferred Stock Expense, provided that no expense shall be included more than
once in such calculation even if it falls within more than one of the foregoing
categories.
"INVESTMENT" of a Person means any loan, advance (other than commission,
travel and similar advances to officers and employees made in the ordinary
course of business and other than advances to, or deposits with, contractors and
suppliers in the ordinary course of business), extension of credit (other than
accounts receivable arising in the ordinary course of business on terms
customary in the trade), deposit account or contribution of capital by such
Person to any other Person or any investment in, or purchase or other
acquisition of, the stock, partnership interests, notes, debentures or other
securities of any other Person made by such Person.
"INVESTMENT AFFILIATE" means any Person in which the Borrower, directly or
indirectly, has an ownership interest, whose financial results are not
consolidated under GAAP with the financial results of the Borrower on the
consolidated financial statements of the Borrower.
"ISSUANCE DATE" as defined in SECTION 3.4(a)(2).
"ISSUANCE NOTICE" as defined in SECTION 3.4(c).
"ISSUING BANK" means, with respect to each Facility Letter of Credit, any
Lender which issues such Facility Letter of Credit.
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"LENDERS" means the lending institutions listed on the signature pages of
this Agreement, their respective permitted 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.
"LETTER OF CREDIT" of a Person means a letter of credit which is issued
upon the application of such Person or upon which such Person is an account
party or for which such Person is in any way liable.
"LETTER OF CREDIT COLLATERAL ACCOUNT" is defined in SECTION 3.9.
"LETTER OF CREDIT REQUEST" as defined in SECTION 3.4(a).
"LIBOR ADVANCE" means an Advance which bears interest at a LIBOR Rate.
"LIBOR APPLICABLE MARGIN" means, as of any date with respect to any LIBOR
Advance, the Applicable Margin in effect for such LIBOR Advance as determined in
accordance with SECTION 2.4 hereof.
"LIBOR BASE RATE" means, with respect to a LIBOR Advance for the relevant
LIBOR Interest Period, the rate determined by the Administrative Agent to be the
rate at which deposits in U.S. dollars are offered by First Chicago (or if First
Chicago is no longer either Administrative Agent or a Lender, then another
Lender agreed upon by Borrower and the Required Lenders) 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 LIBOR Interest Period, in the approximate
amount of the relevant LIBOR Advance and having a maturity approximately equal
to such LIBOR Interest Period.
"LIBOR 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 LIBOR Interest Period with respect to
a LIBOR Advance 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 succeeding month, such LIBOR Interest Period shall end on the last
Business Day of such next, second, third or sixth succeeding month. If a LIBOR
Interest Period would otherwise end on a day which is not a Business Day, such
LIBOR 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 LIBOR Interest Period shall end on the immediately preceding
Business Day. If Borrower and Lenders agree on a Fixed Rate Advance then
reference herein to LIBOR Interest Period shall also include the applicable
interest period agreed upon among Borrower and Lenders for the Fixed Rate
Advance.
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"LIBOR LOAN" means a Loan which bears interest at a LIBOR Rate.
"LIBOR RATE" means, with respect to a LIBOR Advance for the relevant LIBOR
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such LIBOR Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such LIBOR Interest Period,
plus (ii) the LIBOR Applicable Margin in effect on the 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 but excluding the leasehold interest of a lessee in a lease that is
not a Capitalized Lease).
"LIKE-KIND EXCHANGE" means any exchange of like-kind properties in
accordance with Section 1031 of the Code.
"LOAN" means, with respect to a Lender, such Lender's portion of any
Advance.
"LOAN DOCUMENTS" means this Agreement, the Notes, and any guaranty or other
document executed and delivered by the Borrower or a Qualifying Investment
Affiliate from time to time and evidencing, securing or guaranteeing payment of
indebtedness or obligations incurred by the Borrower under this Agreement, as
any of the foregoing may be amended or modified from time to time.
"MARKET CAPITALIZATION" means, without duplication, (a) Total Property
Operating Income (allocated appropriately by category of Property) capitalized
at the Applicable Cap Rates for each Property type, plus (b) other income (other
than income derived from Qualified Mortgages and Cash and Cash Equivalents)
capitalized at 15%, plus (c) the Value of Qualified Mortgages, plus (d) 100% of
the value of Preleased Assets Under Development but in no event shall the value
of Preleased Assets Under Development exceed $50,000,000, plus (e) the amount of
any Unrestricted Cash and Cash Equivalents owned by Borrower and its
Subsidiaries and the pro rata share of Unrestricted Cash and Cash Equivalents
owned by Qualifying Investment Affiliates, plus (f) 50% of the lower of book
value or market value of land not under development which is adjacent to
stabilized improved properties (whether or not such stabilized improved
properties are owned by the Borrower or its Subsidiaries). Market
Capitalization shall be determined based on the results of the most recent
fiscal quarter as appropriately annualized in the case of items (a) and (b) in
the foregoing definition.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on (i) the
business, Property, results of operations or financial condition of the Borrower
and its Subsidiaries taken as a whole or (ii) the ability of the Borrower to
perform its obligations under the Loan
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Documents, or (iii) the validity or enforceability of any of the Loan Documents
or the remedies or material rights of the Administrative Agent or the Lenders
thereunder.
"MATERIALS OF ENVIRONMENTAL CONCERN" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
radon, polychlorinated biphenyls and urea-formaldehyde insulation.
"MAXIMUM LEGAL RATE" means the maximum nonusurious interest rate, if any,
that at any time or from time to time may be contracted for, taken, reserved,
charged or received on the indebtedness evidenced by the Note and as provided
for herein or in the Note or other Loan Documents, under the laws of such state
or states whose laws are held by any court of competent jurisdiction to govern
the interest rate provisions of the Loan.
"MOODY'S" means Moody's Investors Service, Inc. and its successors.
"MULTIEMPLOYER PLAN" means a Plan to which more than one employer is
obligated to make contributions, and which is maintained pursuant to one or more
collective bargaining agreements to which the Borrower or any member of the
Controlled Group is a party.
"NEGATIVE PLEDGE AGREEMENT" is defined in SECTION 7.25.
"NON-INDUSTRIAL PROPERTIES" is defined in RECITAL A.
"NOTE" means a promissory note, in substantially the form of EXHIBIT A
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.
"NOTICE OF ASSIGNMENT" is defined in SECTION 13.3.2.
"OBLIGATIONS" means all unpaid principal of and accrued and unpaid interest
on the Notes, the Facility Letter of Credit Obligations and all accrued and
unpaid fees and all expenses, reimbursements, indemnities and other obligations
of the Borrower or if and to the extent applicable, any Qualifying Investment
Affiliates to the Lenders or to any Lender, the Administrative Agent, the
Documentation Agent, or any indemnified party hereunder arising under the Loan
Documents.
"PARTICIPANTS" is defined in SECTION 13.2.1.
"PAYMENT DATE" means, with respect to the payment of interest accrued on
any CBR Advance or any Fixed Rate Advance, the first Business Day of each
calendar month (and in addition the last day of the applicable interest period
for a Fixed Rate Advance), and with respect to the payment of interest accrued
on any LIBOR Advance, the last day of the
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applicable LIBOR Interest Period, and if the length of the LIBOR Interest Period
is greater than 3 months, interest shall also be payable every 3 months during
the term of such LIBOR Interest Period.
"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 LIENS" are defined in SECTION 7.16.
"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.
"PRELEASED ASSETS UNDER DEVELOPMENT" means, as of any date of
determination, any Project owned by Borrower (i) which is then treated as an
asset under development under GAAP, (ii) which is located in the United States
of America (iii) which has been preleased under binding leases to unaffiliated
tenants to the extent of at least fifty percent (50%) of the projected gross
leasable area of such Project and (iv) which has been designated by Borrower in
a written notice to Administrative Agent as a "Preleased Asset Under
Development" for purposes of this Agreement, with the land and improvements
being valued at then-current book value, as determined in accordance with GAAP,
provided however, (a) in no event shall any Project be included in such category
of "Preleased Assets Under Development" for more than two hundred seventy (270)
days after construction of such asset commenced and (b) upon written designation
to Administrative Agent delivered during such 270-day period, any Project which
has previously been designated as a "Preleased Asset Under Development", shall
be removed from such category. Upon the earlier to occur of (x) the expiration
of any above-described 270-day period or (y) Administrative Agent's receipt of
Borrower's written designation in accordance with (b) above, any Project which
has been designated a "Preleased Asset Under Development" shall automatically
lose such designation (effective as of the next determination date) for the
purpose of determining Market Capitalization.
"PROJECT" means any Property owned or operated by the Borrower or any
Subsidiary or Investment Affiliate and operated or intended to be operated as an
industrial or warehouse property.
"PROPERTY" means each parcel of real property owned (including leasehold
interests) or operated by the Borrower, any Subsidiary or Investment Affiliate.
"PROPERTY BREACH" is defined in SECTION 7.30.
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"PROPERTY OPERATING INCOME" means, with respect to any Property owned by
Borrower, any Subsidiary or any Investment Affiliate, for any period, earnings
from rental operations after deduction for ground lease rents (computed in
accordance with GAAP but without deduction for reserves) attributable to such
Property plus depreciation, amortization and interest expense for such period,
and, if such period is less than a year, adjusted by straight lining various
ordinary operating expenses which are payable less frequently than once during
every such period (e.g. real estate taxes and insurance).
"PURCHASER" is defined in SECTION 13.3.1.
"QUALIFIED LENDER" is defined in SECTION 13.3.1.
"QUALIFYING INVESTMENT AFFILIATE" means (a) any Subsidiary or Investment
Affiliate with respect to which (i) the Borrower or one of its Wholly-Owned
Subsidiaries has management control of the Subsidiary or Investment Affiliate
and each of its assets and (ii) the Borrower or such Wholly-Owned Subsidiary, as
the case may be, is not subject to restrictions contained in the organizational
documents of any of such entities (or any such restrictions have expired) on its
ability to sell or finance the real property owned by such Subsidiary or
Investment Affiliate or its interest in the Subsidiary or Investment Affiliate,
and (b) CenterPoint Realty Services Corporation ("CRS"), (c) CenterPoint Realty
Management Corporation, (d) CP Realty Management Co. I, and (e) CenterPoint
O'Hare Limited Liability Company provided that the entities described in clauses
(b) through (e) inclusive do not materially change the nature of their current
business or operations.
"QUALIFIED MORTGAGE" means a first or second mortgage held by Borrower on
any real estate asset operated or intended to be operated as an industrial
property.
"REGISTER" is defined in SECTION 13.6.
"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.
"REIMBURSEMENT OBLIGATIONS" means at any time, the aggregate of the
Obligations of the Borrower to the Lenders, the Issuing Bank and the
Administrative Agent in respect of all unreimbursed payments or disbursements
made by the Lenders, the Issuing Bank and the Administrative Agent under or in
respect of the Facility Letters of Credit.
"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
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and of Section 302 of ERISA shall be a Reportable Event regardless of the
issuance of any 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 (not held by Defaulting Lenders who are not entitled
to vote) 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 (not held by Defaulting Lenders who are not entitled to
vote).
"RESERVE REQUIREMENT" means, with respect to a LIBOR Loan and LIBOR
Interest Period, that percentage (expressed as a decimal) which is in effect on
such day, as prescribed by the Federal Reserve Board or other governmental
authority or agency having jurisdiction with respect thereto for determining the
maximum reserves (including, without limitation, basic, supplemental, marginal
and emergency reserves) for eurocurrency funding (currently referred to as
"Eurocurrency Liabilities" in Regulation D) maintained by a member bank of the
Federal Reserve System.
"RESTRICTED UNENCUMBERED ASSETS" is defined in SECTION 7.25.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SENIOR LOANS" as defined in SECTION 11.15.
"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.
"SUBSIDIARY" 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 Borrower, and
provided such corporation, partnership or other entity is consolidated with
Borrower for financial reporting purposes under GAAP.
"SUBSTANTIAL PORTION" means, with respect to the Property of the Borrower
or its Subsidiaries, Property which represents more than 10% of the Market
Capitalization.
"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 $10,000,000 made by the Swing Line
Lender in accordance with SECTION 2.13 hereof.
"TOTAL LIABILITIES" means all Indebtedness plus all other GAAP liabilities
of the Borrower and its Subsidiaries.
"TOTAL PROPERTY OPERATING INCOME" means the sum of (i) Property Operating
Income for each Property owned (including leaseholds) by Borrower and its
Subsidiaries, and (ii) (without redundancy) the Borrower's pro rata share (based
on economic interest) of Property Operating Income from Property owned
(including leaseholds) by Investment Affiliates. The earnings from rental
operations shall be adjusted to include pro forma earnings (as substantiated to
the reasonable satisfaction of the Administrative Agent) for an entire quarter
for any Property acquired or placed in service during the quarter and to exclude
earnings during such quarter from any Property not owned as of the end of the
quarter.
"TRANSFEREE" is defined in SECTION 13.4.
"TYPE" means, with respect to any Advance, its nature as a CBR Advance or a
LIBOR Advance.
"UNENCUMBERED ASSET" means, with respect to any Property owned by Borrower
or any Qualifying Investment Affiliate (provided that leasehold interests shall
be included only if such interest is pursuant to a Financeable Ground Lease)
which is in service, at any date of determination, the circumstance that such
asset on such date (a) is not subject to any Liens other than those in favor of
the Lenders 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 Qualifying Investment Affiliate,
but excluding the Permitted Liens described in SECTION 7.16(i)-(v)), (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 Qualifying Investment
Affiliate) which prohibits or limits the ability of the Borrower, or such
Qualifying Investment Affiliate, as the case may be, to create, incur, assume or
suffer to exist any Lien upon any assets or Capital Stock of the Borrower, or
any of its Qualifying Investment Affiliates, (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 (but excluding liens in favor of Lenders and other Permitted
Liens) on any assets or Capital Stock of the Borrower or any of its Qualifying
Investment Affiliates or would entitle any Person to the benefit of any Lien
(but excluding liens in favor of Lenders and the Permitted Liens described in
SECTION 7.16(i)-(v)) on such assets or Capital Stock upon the occurrence of any
contingency (including, without limitation, pursuant to an "equal
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and ratable" clause), (d) is not the subject of a material environmental issue
and, if requested by the Administrative Agent, Borrower shall provide a current
or updated supplemental environmental investigative report which may be an
environmental site assessment conducted in accordance with the minimum
specifications in EXHIBIT F (or one which is not more than two years old for
Unencumbered Assets owned as of the Closing Date), (e) is not the subject of any
material architectural/engineering issue and, if requested by the Administrative
Agent, Borrower shall provide a current engineering report (or one that is no
more than two years old for Unencumbered Assets owned as of the Closing Date),
and (f) is materially compliant with property related representations and
covenants contained in SECTION 6.24 hereof. No Property of a Qualifying
Investment Affiliate shall be deemed to be unencumbered unless (i) both such
Property and all Capital Stock of such Qualifying Investment Affiliate held by
the Borrower is unencumbered, (ii) none of the events described in SECTIONS 8.7,
8.8 or 8.9 has occurred with respect to such Qualifying Investment Affiliate
(without regard to its Market Capitalization or whether its Indebtedness is
recourse) and (iii) the aggregate Value of Unencumbered Assets attributable to
Properties owned by Qualifying Investment Affiliates does not exceed 10% of the
total Value of Unencumbered Assets except that Properties owned by a Qualifying
Investment Affiliate shall not be counted toward such 10% cap if the Qualifying
Investment Affiliate has become a co-obligor or guarantor on the Facility (with
liability limited to the applicable Unencumbered Asset) by executing and
delivering to the Administrative Agent a guaranty in form acceptable to the
Required Lenders or if the Borrower's interest in such Qualifying Investment
Affiliate has been validly pledged for the benefit of the Lenders so, pursuant
to documents in form and substance reasonably satisfactory to the Required
Lenders, that the Lenders can succeed to all of the Borrower's rights with
respect to such Qualifying Investment Affiliate.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present value
of all vested nonforfeitable benefits under all Single Employer Plans determined
under Section 4001(a)(18)(A) of ERISA exceeds the fair market value of all such
Plan assets allocable to such benefits 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 7.14 during the grace period provided therein.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" means, as of any date of
determination, the sum of (a) the aggregate amount of Unrestricted cash and (b)
the aggregate amount of Unrestricted Cash Equivalents (valued at the fair market
value). As used in this definition, "UNRESTRICTED" means the specified asset is
not subject to any Liens or claims of any kind in favor of any Person.
"VALUE OF QUALIFIED MORTGAGES" means the sum of the value of each Qualified
Mortgage which shall be the lesser of (i) the outstanding principal balance of
such Qualified Mortgage at the time of any determination thereof, or (ii) 85% of
the value of the collateral encumbered by such Qualified Mortgage (less the
outstanding balance of the first mortgage if the Qualified Mortgage is a second
mortgage) determined by capitalizing the operating
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income of such collateral, computed in the same manner as the Property Operating
Income at 9.5%, provided that the aggregate principal balance of all Qualified
Mortgages included in this determination shall not exceed $50,000,000.
"VALUE OF UNENCUMBERED ASSETS" means, as of the end of a quarter, the sum
of (a) the value of all Unencumbered Assets wholly owned by the Borrower, PLUS
(b) the allocable share based on Borrower's economic interest in the value of
the Unencumbered Assets owned by Qualifying Investment Affiliates, plus (c) the
amount of Unrestricted Cash and Cash Equivalents owned by Borrower, PLUS (d) the
allocable share based on Borrower's economic interest in the amount of
Unrestricted Cash and Cash Equivalents owned by a Qualifying Investment
Affiliate. Unencumbered Assets shall be valued by capitalizing at a rate equal
to the Applicable Cap Rate, the Property Operating Income from each Property
which is an Unencumbered Asset for such quarter less, without duplication, an
assumed management fee of 1% of gross revenues (excluding tenant recoveries) and
the assumed Capital Expenditure Reserve Amount. If a Property is acquired
during a quarter then Borrower shall be entitled to include pro forma Property
Operating Income from such Property for the entire quarter in the foregoing
calculation. If a Property is no longer owned as of the last day of a quarter,
then no value shall be included for such Property.
"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 (ii) any partnership, association, joint venture or similar
business organization of which 100% of the ownership interests having ordinary
voting power and at least 95% of all other classes of ownership interest shall
at the time be so owned or controlled by such Person.
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, subject to
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 such Lender's Commitment minus such
Lender's Percentage of Facility Letter of Credit Obligations and, minus such
Lender's Percentage of any outstanding Swing Line Loans. 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 of each Lender
to lend hereunder shall expire on the Facility Termination Date.
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2.2. FINAL PRINCIPAL PAYMENT AND EXTENSION OPTION. Any outstanding
Advances and all other unpaid Obligations shall be paid in full by the
Borrower on the Facility Termination Date. The Facility Termination Date can
be extended for one year upon notice to the Administrative Agent at least
ninety (90) days before the original Facility Termination Date if (i) no
Default has occurred and is continuing at the time of such notice and at the
time of the original Facility Termination Date, (ii) all of the Lenders agree
to such extension, and (iii) the Borrower pays an extension fee equal to
0.15% of the Aggregate Commitment at the time of the extension. If the
Borrower gives such notice to the Administrative Agent, the Administrative
Agent shall notify the Lenders within 10 days of receipt of such request.
The Lenders shall have 30 days after receipt of such notice to notify
Administrative Agent as to whether they accept or reject such extension
request and Administrative Agent shall notify Borrower at least 45 days prior
to the Facility Termination Date of the acceptance or rejection of the
Lenders of Borrower's request to extend the Facility Termination Date. If
the foregoing conditions are satisfied other than the condition requiring the
consent of all Lenders, then Borrower shall have the right to replace any
Lender that does not agree to the extension provided that: (a) Borrower
notifies such Lender that it has elected to replace such Lender and notifies
such Lender and the Administrative Agent of the identity of the proposed
replacement Lender at least 15 Business Days prior to the Facility
Termination Date and (b) the proposed replacement Lender is a Qualifying
Lender. The Lender being replaced shall assign its Percentage of the
Aggregate Commitment and its rights and obligations under this Facility to
the replacement Lender pursuant to an Assignment and the replacement Lender
shall assume such Percentage of the Aggregate Commitment and the related
obligations under this Facility prior to the Facility Termination Date. The
purchase by the replacement Lender shall be at par (plus all accrued and
unpaid interest and any other sums owed to such Lender being replaced
hereunder) which shall be paid to the Lender being replaced upon the
execution and delivery of the Assignment and no fee pursuant to SECTION
13.3.2(ii) shall be required.
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
2.13. The Advances may be CBR Advances, LIBOR Advances, Fixed Rate Advances,
or a combination thereof, selected by the Borrower in accordance with
SECTIONS 2.9 and 2.10.
2.4. APPLICABLE MARGINS. The CBR Applicable Margin and the LIBOR
Applicable 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 ratings from Moody's and/or (as applicable as described below) S&P for
either Borrower's long-term unsecured debt or this Facility. For purposes of
determining the Applicable Margins, Pricing Category 3 (as defined in the
following table) shall apply until the earlier of (a) six months following
the Closing Date and (b) the date on which a rating is issued by either
Moody's or S&P for this Facility or Borrower's long-term unsecured debt. At
that time, if no rating has been issued by either S&P or Moody's, then
Pricing Category 4 (as defined in the following table) shall apply. If a
rating has been issued by only one of S&P or Moody's, that rating shall
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determine the Pricing Category. In the event both rating agencies have issued a
rating and the rating agencies are split on the rating for the Borrower's long-
term unsecured debt or this Facility, the lower rating shall be deemed to be the
applicable rating (e.g., if the Borrower's Moody's long-term unsecured debt or
this Facility's rating is Baa1 and its S&P long-term unsecured debt or this
Facility's rating is BBB then the Applicable Margins shall be computed based on
the S&P rating). Commencing two years after the Closing Date, if both rating
agencies have not issued a rating for the Borrower's long-term unsecured debt or
this Facility, then Pricing Category 4 shall be applicable until such time as
both rating agencies have issued a rating. The Applicable Margins shall be
adjusted effective on the next Business Day following any change in the
Borrower's (or the Facility's if applicable) Moody's long-term unsecured debt
rating and/or S&P's long-term unsecured debt rating, as the case may be
(provided that if Administrative Agent does not receive notice of a change in
rating within forty-five days after it occurs then any reduction in Applicable
Margin shall be effective only when such notice is received). The applicable
debt ratings and the Applicable Margins (subject to the foregoing) are set forth
in the following table:
<TABLE>
<CAPTION>
LIBOR CBR
MOODY'S APPLICABLE APPLICABLE PRICING
S&P RATING RATING MARGIN MARGIN CATEGORY
---------- ------- ---------- ---------- --------
<S> <C> <C> <C> <C>
BBB+ or Baa1 or 1.15% 0.15% 1
higher higher
BBB Baa2 1.25% 0.25% 2
BBB- Baa3 1.45% 0.45% 3
Less than BBB- Less than Baa3 1.60% 0.60% 4
</TABLE>
In the event that either S&P or Moody's shall discontinue their ratings of the
REIT industry or the Borrower's long-term unsecured debt or this Facility, 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 forty-five (45) days of such
discontinuance, the Applicable Margin to be used for the calculation of interest
on Advances hereunder shall be Pricing Category 4. Lenders acknowledge that the
rating for Borrower's unsecured long term debt may be issued even though
Borrower has no outstanding unsecured long term debt.
If a rating agency downgrade or discontinuance results in an increase in
the CBR Applicable Margin or the LIBOR Applicable Margin and if such increase is
reversed and the affected Applicable Margin is restored within ninety (90) days
thereafter, at the Borrower's request, the Borrower shall receive a credit
against interest next due the Lenders equal to interest accrued from time to
time during such period of downgrade or discontinuance and actually paid by the
Borrower on the Advances at the differential between such Applicable Margins.
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2.5. COMMITMENT FEE. The Borrower agrees to pay to the Administrative
Agent for the account of each Lender a commitment fee (the "COMMITMENT FEE")
from the Closing Date to and including the Facility Termination Date,
calculated at the rate of 0.25% per annum on the daily unborrowed portion of
such Lender's Commitment (which is equal to the difference between (a) such
Lender's Commitment on such day and (b) the then outstanding Loans owed to
such Lender plus the Lender's Percentage of any outstanding and undrawn
Facility Letters of Credit) payable quarterly in arrears on the last day of
each calendar quarter hereafter beginning December 31, 1996 and on the
Facility Termination Date; provided, however, that the Commitment Fee shall
be calculated at the reduced rate of 0.1875% per annum on the daily
unborrowed portion of such Lender's Commitment for any day on which the
principal balance of all outstanding and unpaid Loans held by such Lender
plus its Percentage of outstanding and undrawn Facility Letters of Credit is
greater than 1/3 and equal to or less than 2/3 of such Lender's Commitment,
and provided further that the Commitment Fee shall be reduced to 0.125% per
annum on the daily unborrowed portion of such Lender's Commitment for any day
on which the principal balance of all outstanding and unpaid Loans held by
such Lender plus its Percentage of outstanding and undrawn Facility Letters
of Credit is greater than 2/3. Amounts outstanding under the Swing Line shall
be considered part of the available unborrowed portion of the Facility for
purposes of computing the Commitment Fee. Notwithstanding the foregoing, all
accrued Commitment Fees shall be payable on the effective date of any
termination of the obligations of the Lenders to make Loans hereunder.
2.6. OTHER FEES. The Borrower agrees to pay all other fees payable to
the Administrative Agent and the Arrangers pursuant to the Borrower's prior
letter agreements with them, including an annual administrative agent fee of
$25,000 to the Administrative Agent, payable quarterly in arrears (the
"Administrative Agent's fee") commencing December 31, 1996.
2.7. MINIMUM AMOUNT OF EACH ADVANCE. Each LIBOR Advance shall be in the
minimum amount of $2,000,000 (and in multiples of $100,000 if in excess
thereof), and each CBR Advance shall be in the minimum amount of $1,000,000
(and in multiples of $100,000 if in excess thereof), provided, however, that
any CBR Advance may be in the amount of the unused Aggregate Commitment.
Borrower acknowledges that any LIBOR Advance not in a multiple of $750,000 or
$1,000,000 may result in a higher LIBOR Rate.
2.8. OPTIONAL PRINCIPAL PAYMENTS. The Borrower may from time to time
pay, without penalty or premium, all or any part of outstanding CBR Advances
or LIBOR Advances, upon two Business Days' prior notice to the Administrative
Agent and each Lender and each such prepayment shall be in a minimum amount
of $50,000.00 or in multiples thereof, provided that a LIBOR Advance may not
be paid prior to the last day of the applicable LIBOR Interest Period unless
Borrower pays the applicable Break-up Fee.
2.9. METHOD OF SELECTING TYPES AND INTEREST PERIODS FOR NEW ADVANCES.
Unless Borrower and Lenders have agreed upon a Fixed Rate in accordance with
SECTION 2.14, the Borrower shall select the Type of Advance and, in the case
of each LIBOR Advance, the
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LIBOR Interest Period applicable to each Advance from time to time. The
Borrower shall give the Administrative Agent irrevocable notice (a "BORROWING
NOTICE") (i) not later than 10:00 a.m. (Chicago time) at least one Business Day
before the Borrowing Date of each CBR Advance, (ii) not later than 10:00 a.m.
(Chicago time) at least three Business Days before the Borrowing Date for each
LIBOR Advance, and (iii) not later than 11:00 a.m. (Chicago time) on the
Borrowing Date for each Swing Line Loan, 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 (which must be a CBR Advance in the
case of Swing Line Loans), and
(iv) in the case of each LIBOR Advance, the LIBOR Interest Period
applicable thereto.
The Borrower shall also deliver together with each Borrowing Notice the
compliance certificate required in SECTION 5.2 and otherwise comply with the
conditions set forth in SECTION 5.2 for Advances. The Administrative Agent
shall provide each Lender by facsimile with a copy of each Borrowing Notice and
compliance certificate on the same Business Day it is received.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Administrative Agent at the account specified pursuant to ARTICLE
XIV. The Lenders shall not be obligated to match fund their LIBOR Advances.
The Administrative Agent will promptly make the funds so received from the
Lenders available to the Borrower from the Administrative Agent's aforesaid
account.
No LIBOR Interest Period may end after the Facility Termination Date and,
unless all of the Lenders otherwise agree in writing, in no event may there be
more than seven (7) different LIBOR Interest Periods for LIBOR Advances
outstanding at any one time.
2.10. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. CBR
Advances shall continue as CBR Advances unless and until such CBR Advances
are converted into LIBOR Advances. Each LIBOR Advance shall continue as a
LIBOR Advance until the end of the then applicable LIBOR Interest Period
therefor, at which time such LIBOR Advance shall be automatically converted
into a CBR Advance unless the Borrower shall have given the Administrative
Agent a Conversion/Continuation Notice requesting that, at the end of such
LIBOR Interest Period, such LIBOR Advance shall continue as a LIBOR Advance
for the same or another LIBOR Interest Period. Subject to the terms of
SECTION 2.7, the Borrower may elect from time to time to convert all or any
part of an Advance of any Type into any other Type of Advance; provided that
any conversion of any LIBOR Advance shall be made on, and only on, the last
day of the Interest Period applicable thereto unless Borrower pays
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the applicable Break-up Fee. The Borrower shall give the Administrative Agent
irrevocable notice (a "CONVERSION/CONTINUATION NOTICE") of each conversion of an
Advance not later than 10:00 a.m. (Chicago time) at least one Business Day, in
the case of a conversion into a 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
LIBOR Interest Period applicable thereto.
2.11. CHANGES IN INTEREST RATE, ETC. Each CBR Advance 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 2.10 to but excluding the date it is
paid or is converted into a LIBOR Advance pursuant to SECTION 2.10 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
LIBOR Interest Period applicable thereto to (but not including) the last day
of such LIBOR Interest Period at the LIBOR Rate determined as applicable to
such LIBOR Advance.
2.12. RATES APPLICABLE AFTER DEFAULT. Notwithstanding anything to the
contrary contained in SECTION 2.9 or 2.10, during the continuance of a
Default or Unmatured Default, the Required Lenders may, at their option, by
written notice to the Borrower (which notice may be revoked at the option of
the Required Lenders notwithstanding any provision of SECTION 9.2 requiring
unanimous consent of the Lenders to changes in interest rates), declare that
no Advance may be made as, converted into or continued beyond its current
term as a LIBOR Advance. During the continuance of a Default the Required
Lenders may, at their option, by prior written notice to the Borrower (which
notice may be revoked at the option of the Required Lenders notwithstanding
any provision of SECTION 9.2 requiring unanimous consent of the Lenders to
changes in interest rates), declare that (i) each LIBOR Advance shall bear
interest for the applicable LIBOR Interest Period at the rate otherwise
applicable to such LIBOR Interest Period plus 2% per annum until such Default
shall have been cured 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 until such Default shall have been cured; provided that such
rates shall become applicable automatically without notice to the Borrower if
a Default occurs under SECTION 8.7 or SECTION 8.8.
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2.13. SWING LINE LOANS. In addition to the other options available to
Borrower hereunder, up to $10,000,000 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 2.9 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 plus its
Percentage of Facility Letter of Credit Obligations 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
Event of Default hereunder provided no Lender shall be required to have total
outstanding Loans plus its Percentage of Facility Letters of Credit to be 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 8.7 or 8.8 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)
days at a time and Swing Line Loans shall not be outstanding for more than a
total of ten (10) days during any month.
2.14. FIXED RATE LOANS. In addition to the other interest rate options
provided herein, the Borrower may request a fixed rate ("Fixed Rate") on any
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
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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.
2.15. 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
account specified pursuant to ARTICLE XIV, or at any other Lending
Installation of the Administrative Agent specified in writing by the
Administrative Agent to the Borrower, by noon (Chicago 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 promptly by the Administrative Agent to such
Lender in the same type of funds that the Administrative Agent received at
its account specified pursuant to ARTICLE XIV or at any Lending Installation
specified in a notice received by the Administrative Agent from such Lender
promptly. If any payment received by the Administrative Agent is not
delivered to a Lender by the closing of business on the same Business Day as
received by the Administrative Agent (with respect to payments received by
2:00 p.m., Chicago time) or the next Business Day (with respect to payments
received after 2:00 p.m., Chicago time), Lender shall receive from the
Administrative Agent interest at the Federal Funds Effective Rate on the
payment. The Administrative Agent is hereby authorized to charge the
specific account of the Borrower, if any, maintained with First Chicago for
such purpose, for each payment of principal, interest and fees as it becomes
due hereunder. The Borrower shall not have any liability to any Lender for
the failure of the Administrative Agent to promptly deliver funds to any such
Lender and shall be deemed to have made all such payments on the date the
respective payment is made by the Borrower to the Administrative Agent
provided that it is received by the Administrative Agent no later than the
time specified in this SECTION 2.15.
2.16. 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. Each
Lender's books and records, including without limitation, the information, if
any, recorded by the Lender on the schedule attached to its Note, shall be
deemed to be PRIMA FACIA correct absent manifest error. 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. The Borrower agrees to deliver promptly to the Administrative Agent
a written confirmation signed by an Authorized Officer of each telephonic
notice, if such confirmation is requested by the Administrative Agent or any
Lender. 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.
2.17. INTEREST PAYMENT DATES; INTEREST AND FEE BASIS. Interest accrued
on each Advance shall be payable on each Payment Date, commencing with the
first such date to
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occur after the date hereof, and at the Facility Termination Date, whether by
acceleration or otherwise. Interest accrued on each LIBOR Advance shall also be
payable on any date on which the LIBOR Advance is prepaid (provided that nothing
herein shall authorize a prepayment which is not otherwise permitted hereunder).
Interest and Commitment 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 (Chicago time) at the place of payment, unless such
Advance is repaid on the date that it was made. 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.
2.18. NOTIFICATION OF ADVANCES, INTEREST RATES AND PREPAYMENTS.
Promptly after receipt thereof (but in no event later than noon (Chicago
time) one Business Day prior to the proposed Borrowing Date for a CBR Advance
or the close of business three Business Days prior to the proposed Borrowing
Date for a LIBOR Advance) the Administrative Agent will notify each Lender of
the contents of each Borrowing Notice, Conversion/Continuation Notice, and
repayment notice received by it hereunder. The Administrative Agent will
notify each Lender and the Borrower of the interest rate applicable to each
LIBOR Advance promptly upon determination of such interest rate and will give
each Lender and the Borrower prompt notice of each change in the Corporate
Base Rate and the Applicable Margin.
2.19. 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.
2.20. 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 has been 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 the Borrower 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 the Federal Funds Effective
Rate for such day. If a Lender has not in
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fact made such payment to the Administrative Agent, the Administrative Agent
shall be entitled to recover such corresponding amount on demand from such
Lender 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 the Federal Funds Effective Rate for such date. If such Lender
does not make such payment upon the Administrative Agent's demand therefor, the
Administrative Agent shall promptly notify the Borrower, and the Borrower shall
immediately pay such amount to the Administrative Agent 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 the rate applicable to the relevant
Loan. Nothing in this SECTION 2.20 shall be deemed to relieve any Lender from
its obligation to fulfill any portion of its Commitment hereunder or to
prejudice any rights which the Borrower may have against any Lender as a result
of any default by such Lender hereunder.
No Lender shall be responsible for any default by any other Lender in its
obligation to make Loans hereunder, and each Lender shall be obligated to make
the Loans provided to be made by it hereunder, regardless of the failure of any
other Lender to fulfill its Commitment hereunder.
2.21. 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 and an Internal Revenue Service Form W-8
or W-9 or applicable successor form, as the case may be, to establish an
exemption from United States backup withholding tax. Each Lender which so
delivers a Form 1001 or 4224 and Form W-8 or W-9 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 withholding of any United States
federal income taxes and is exempt from backup withholding, 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 or is not exempt from backup withholding tax.
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2.22. VOLUNTARY REDUCTION OF AGGREGATE COMMITMENT AMOUNT. Upon at
least five (5) Business Days' prior irrevocable written notice (or telephonic
notice promptly confirmed in writing) to the Administrative Agent, Borrower
shall have the right, without premium or penalty, to permanently reduce the
Aggregate Commitment provided that (a) Borrower may not reduce the Aggregate
Commitment below the Allocated Facility Amount at the time of such requested
reduction, (b) any such partial reduction shall be in the minimum aggregate
amount of Five Million Dollars (U.S. $5,000,000.00) or any integral multiple
of Five Million Dollars (U.S. $5,000,000.00) in excess thereof and (c)
Borrower may not reduce the Aggregate Commitment to an amount less than Fifty
Million Dollars (U.S. $50,000,000.00). Any reduction of the Aggregate
Commitment shall be applied pro rata to each Lender's Commitment.
2.23. USURY. This Agreement and the Note are subject to the express
condition that at no time shall Borrower be obligated or required to pay
interest on the principal balance of the Loan at a rate which could subject
any Lender (including the Swing Line Lender) to either civil or criminal
liability as a result of being in excess of the Maximum Legal Rate. If by
the terms of this Agreement or the Loan Documents, Borrower is at any time
required or obligated to pay interest on the principal balance due hereunder
at a rate in excess of the Maximum Legal Rate, the interest rate or the
Default Rate, as the case may be, shall be deemed to be immediately reduced
to the Maximum Legal Rate and all previous payments in excess of the Maximum
Legal Rate shall be deemed to have been payments in reduction of principal
and not on account of the interest due hereunder. All sums paid or agreed to
be paid to Lender for the use, forbearance, or detention of the sums due
under the Loan, shall, to the extent permitted by applicable law, be
amortized, prorated, allocated, and spread throughout the full stated term of
the Loan until payment in full so that the rate or amount of interest on
account of the Loan does not exceed the Maximum Legal Rate of interest from
time to time in effect and applicable to the Loan for so long as the Loan is
outstanding.
2.24. 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 yield protection due to the Lenders
in accordance with SECTION 4.1;
(iii) to the payment of any fee due pursuant to SECTION 3.8(b) in
connection with the issuance of a Facility Letter of Credit to
the Issuing Bank, to the payment of the Commitment Fee to the
Lenders, if then due, in accordance with their Percentages and to
the payment of the Administrative Agent's Fee to the
Administrative Agent if then due;
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(iv) (a) in case the entire unpaid principal of the Loan shall not
have become due and payable, the whole amount received as
interest and Facility Letter of Credit Fee then due to the
Lenders (other than a Defaulting Lender) as their respective
Percentages appear (except to the extent there are Swing Line
Loans outstanding in which event the full amount of interest
attributable to the Swing Line Loans shall be payable to the
Swing Line Lender, unless the Swing Line Lender shall be a
Defaulting Lender), together with the whole amount, if any,
received as principal first to the Swing Line Lender, unless the
Swing Line Lender shall be a Defaulting Lender, to repay any
outstanding Swing Line Loans and then to the Lenders as their
respective Percentages appear, or (b) in case the entire unpaid
principal of the Loan shall have become due and payable, as a
result of a Default or otherwise, to the payment of the whole
amount then due and payable on the Loan for principal, together
with interest thereon at the Default Rate or the interest rate,
as applicable, to the Swing Line Lender, unless the Swing Line
Lender shall be a Defaulting Lender, for all such amounts due in
connection with Swing Line Loans and then to the Lenders (other
than a Defaulting Lender) as their respective Percentages appear
until paid in full; and
(v) to the payment of any sums due to each Defaulting Lender as their
respective Percentages appear (provided that Administrative Agent
shall have the right to set-off against such sums any amounts due
from such Defaulting Lender).
ARTICLE III
THE LETTER OF CREDIT SUBFACILITY
3.1. OBLIGATION TO ISSUE. Subject to the terms and conditions of this
Agreement and in reliance upon the representations and warranties of the
Borrower herein set forth, the Issuing Bank hereby agrees to issue for the
account of Borrower, one or more Facility Letters of Credit in accordance
with this ARTICLE III, from time to time during the period ending on the
Business Day prior to the Facility Termination Date.
3.2. TYPES AND AMOUNTS. The Issuing Bank shall not except with the
prior written consent of all Lenders:
(i) issue any Facility Letter of Credit if the aggregate maximum
amount then available for drawing under Letters of Credit issued by such
Issuing Bank, after giving effect to the Facility Letter of Credit
requested hereunder, shall exceed any limit imposed by law or regulation
upon such Issuing Bank provided, in such event, the Borrower shall have the
right to select (with the approval of the alternate Issuing
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Bank but not the other Lenders) an alternate Issuing Bank which shall be
one of the Lenders;
(ii) issue any Facility Letter of Credit if, after giving effect
thereto, the aggregate Facility Letter of Credit Obligations would exceed
$10,000,000 or the Allocated Facility Amount would exceed the Aggregate
Commitment;
(iii) issue any Facility Letter of Credit having an expiration date,
or containing automatic extension provisions to extend such date, to a date
which is after the Business Day immediately preceding the Facility
Termination Date; or
(iv) issue any Facility Letter of Credit having an expiration date
which is more than fifteen (15) months after the date of its issuance.
3.3. CONDITIONS. In addition to being subject to the satisfaction of
the conditions contained in SECTION 5.2 hereof, the obligation of the Issuing
Bank to issue any Facility Letter of Credit is subject to the satisfaction in
full of the following conditions:
(i) the Borrower shall have delivered to the Issuing Bank at such
times and in such manner as the Issuing Bank may reasonably prescribe
such documents and materials as may be reasonably required pursuant to
the terms of the proposed Facility Letter of Credit (it being understood
that if any inconsistency exists between such documents and the Loan
Documents, the terms of the Loan Documents shall control) and the proposed
Facility Letter of Credit shall be reasonably satisfactory to the Issuing
Bank as to form and content;
(ii) as of the date of issuance, no order, judgment or decree of any
court, arbitrator or governmental authority shall purport by its terms to
enjoin or restrain the Issuing Bank from issuing the requested Facility
Letter of Credit and no law, rule or regulation applicable to the Issuing
Bank and no request or directive (whether or not having the force of law)
from any governmental authority with jurisdiction over the Issuing Bank
shall prohibit or request that the Issuing Bank refrain from the issuance
of Letters of Credit generally or the issuance of the requested Facility
Letter or Credit in particular, provided, in such event, the Borrower
shall have the right to select an alternate Issuing Bank which shall be
one of the Lenders; and
(iii) there shall not exist any Default or Unmatured Default.
3.4. PROCEDURE FOR ISSUANCE OF FACILITY LETTERS OF CREDIT.
(a) Borrower shall give the Issuing Bank and the Administrative Agent at
least five (5) Business Days' prior written notice of any requested issuance
of a Facility Letter of Credit under this Agreement (a "LETTER OF CREDIT
REQUEST") (except that, in lieu of such written notice, the Borrower may give
the Issuing Bank and the Administrative Agent telephonic notice of such
request if confirmed in writing by delivery to the Issuing Bank and
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the Administrative Agent (i) by the close of business on such day (A) of a
telecopy of the written notice required hereunder which has been signed by an
Authorized Officer, or (B) of a telex containing all information required to be
contained in such written notice and (ii) promptly (but in no event later than
the requested date of issuance) of the written notice required hereunder
containing the original signature of an Authorized Officer); such notice shall
specify:
(1) the stated amount of the Facility Letter of Credit requested (which
stated amount shall not be less than $50,000);
(2) the effective date (which day shall be a Business Day) of issuance of
such requested Facility Letter of Credit (the "ISSUANCE DATE");
(3) the date on which such requested Facility Letter of Credit is to
expire which date (exclusive of automatic extension periods so long as
the Facility Letter of Credit gives the Issuing Bank the right to
issue a notice that the expiration date will not be extended) shall be
a Business Day and shall in no event be later than the earlier of
fifteen months after the Issuance Date and the Business Day
immediately preceding the Facility Termination Date;
(4) the purpose for which such Facility Letter of Credit is to be issued
(such purpose shall comply with the requirements of SECTION 7.2);
(5) the Person for whose benefit the requested Facility Letter of Credit
is to be issued; and
(6) any special language required to be included in the Facility Letter of
Credit.
At the time such request is made, the Borrower shall also provide the
Administrative Agent and the Issuing Bank with a copy of the form of the
Facility Letter of Credit that the Borrower is requesting be issued, which shall
be subject to the reasonable approval of the Issuing Bank and Administrative
Agent. Such notice, to be effective, must be received by such Issuing Bank and
the Administrative Agent not later than 2:00 p.m. (Chicago time) on the last
Business Day on which notice can be given under this SECTION 3.4(a).
Administrative Agent shall promptly but in no event later than three (3)
Business Days prior to the Issuance Date give a copy of the Letter of Credit
Request to the other Lenders. Borrower shall also deliver the compliance
certificate required in SECTION 5.2 together with each Letter of Credit Request.
(b) Subject to the terms and conditions of this ARTICLE III and
provided that the applicable conditions set forth in SECTION 5.2 hereof have
been satisfied, such Issuing Bank shall, on the Issuance Date, issue a
Facility Letter of Credit on behalf of the Borrower in accordance with the
Letter of Credit Request and the Issuing Bank's usual and customary
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business practices unless the Issuing Bank has actually received (i) written
notice from the Borrower specifically revoking the Letter of Credit Request with
respect to such Facility Letter of Credit, or (ii) written or telephonic notice
from the Administrative Agent stating that the issuance of such Facility Letter
of Credit would violate SECTION 3.2.
(c) The Issuing Bank shall give the Administrative Agent and the Borrower
written or telex notice, or telephonic notice confirmed promptly thereafter in
writing, of the issuance of a Facility Letter of Credit (the "ISSUANCE NOTICE")
and Administrative Agent shall promptly give a copy of the Issuance Notice to
the other Lenders.
(d) The Issuing Bank shall not extend or amend any Facility Letter of
Credit (other than an automatic extension) unless the requirements of this
SECTION 3.4 are met as though a new Facility Letter of Credit was being
requested and issued.
3.5. REIMBURSEMENT OBLIGATIONS; DUTIES OF ISSUING BANK.
(a) The Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of any draw under a Facility Letter of Credit, and the
Administrative Agent shall promptly notify the other Lenders that such draw has
occurred. Any such draw shall constitute an Advance of the Facility in the
amount of the Reimbursement Obligation with respect to such Facility Letter of
Credit and shall bear interest from the date of the relevant drawing(s) under
the pertinent Facility Letter of Credit at a rate selected by Borrower in
accordance with SECTION 2.10 hereof; provided that if any Default or an
Unmatured Default involving the payment of money exists at the time of any such
drawing(s), then the Borrower shall reimburse the Issuing Bank for drawings
under a Facility Letter of Credit issued by the Issuing Bank no later than the
next succeeding Business Day after the payment by the Issuing Bank and until
repaid such Reimbursement Obligation shall bear interest from the date funded at
the Default Rate.
(b) Any action taken or omitted to be taken by the Issuing Bank under or
in connection with any Facility Letter of Credit, if taken or omitted in the
absence of willful misconduct or gross negligence, shall not put the Issuing
Bank under any resulting liability to Borrower or any Lender or, provided that
such Issuing Bank has complied with the procedures specified in SECTION 3.4,
relieve a Lender of its obligations hereunder to the Issuing Bank. In
determining whether to pay under any Facility Letter of Credit, the Issuing Bank
shall have no obligation relative to the Lenders other than to confirm that any
documents required to be delivered under such Letter of Credit appear to have
been delivered in compliance, and that they appear to comply on their face, with
the requirements of such Letter of Credit.
3.6. PARTICIPATION.
(a) Immediately upon issuance by the Issuing Bank of any Facility Letter
of Credit in accordance with the procedures set forth in SECTION 3.4, each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Issuing
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Bank, without recourse, representation or warranty, an undivided interest and
participation equal to such Lender's Percentage in such Facility Letter of
Credit (including, without limitation, all obligations of the Borrower with
respect thereto) and any security therefor or guaranty pertaining thereto. Each
Lender's obligation to make further Loans to the Borrower (other than any
payments such Lender is required to make under subparagraph (b) below) or issue
any letters of credit on behalf of Borrower shall be reduced by such Lender's
Percentage of the undrawn portion of each Facility Letter of Credit outstanding.
(b) In the event that the Issuing Bank makes any payment under any
Facility Letter of Credit and the Borrower shall not have repaid such amount to
the Issuing Bank pursuant to SECTION 3.7 hereof, the Issuing Bank shall promptly
notify the Administrative Agent, which shall promptly notify each Lender of the
same, and each Lender shall promptly and unconditionally pay to the
Administrative Agent for the account of the Issuing Bank the amount of such
Lender's Percentage of the unreimbursed amount of such payment, and the
Administrative Agent shall promptly pay such amount to the Issuing Bank.
Notwithstanding the foregoing, unless Borrower shall notify Administrative Agent
of Borrower's intent to repay the Reimbursement Obligation on the date of the
related drawing under any Facility Letter of Credit, such Reimbursement
Obligation shall simultaneously with such drawing be converted to and become a
CBR Loan as set forth in SECTION 2.10. The failure of any Lender to make
available to the Administrative Agent for the account of any Issuing Bank its
Percentage of the unreimbursed amount of any such payment shall not relieve any
other Lender of its obligation hereunder to make available to the Administrative
Agent for the account of such Issuing Bank its Percentage of the unreimbursed
amount of any payment on the date such payment is to be made, but no Lender
shall be responsible for the failure of any other Lender to make available to
the Administrative Agent its Percentage of the unreimbursed amount of any
payment on the date such payment is to be made. Any Lender which fails to make
any payment required pursuant to this SECTION 3.6(b) shall be deemed to be a
Defaulting Lender hereunder.
(c) If the Issuing Bank receives a payment on account of a Reimbursement
Obligation, including any interest thereon, the Issuing Bank shall promptly pay
to the Administrative Agent and the Administrative Agent shall promptly pay to
each Lender which has funded its participating interest therein, in immediately
available funds, an amount equal to such Lender's Percentage thereof.
(d) Upon the request of the Administrative Agent or any Lender, an Issuing
Bank shall furnish to such Administrative Agent or Lender copies of any Facility
Letter of Credit to which that Issuing Bank is party and such other
documentation as may reasonably be requested by the Administrative Agent or
Lender.
(e) The obligations of a Lender to make payments to the Administrative
Agent for the account of each Issuing Bank with respect to a Facility Letter of
Credit shall be absolute, unconditional and irrevocable, not subject to any
counterclaim, set-off, qualification or exception whatsoever other than a
failure of any such Issuing Bank to comply with the
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terms of this Agreement relating to the issuance of such Facility Letter of
Credit and shall be made in accordance with the terms and conditions of this
Agreement under all circumstances.
3.7. PAYMENT OF REIMBURSEMENT OBLIGATIONS.
(a) The Borrower agrees to pay to the Administrative Agent for the account
of each Issuing Bank the amount of all Advances for Reimbursement Obligations,
interest and other amounts payable to such Issuing Bank under or in connection
with any Facility Letter of Credit when due irrespective of any claim, set-off,
defense or other right which the Borrower may have at any time against any
Issuing Bank or any other Person, under all circumstances, including without
limitation any of the following circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Loan Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Borrower may have at any time against a beneficiary named in
a Facility Letter of Credit or any transferee of any Facility Letter
of Credit (or any Person for whom any such transferee may be acting),
the Administrative Agent, the Issuing Bank, any Lender, or any other
Person, whether in connection with this Agreement, any Facility Letter
of Credit, the transactions contemplated herein or any unrelated
transactions (including any underlying transactions between the
Borrower and the beneficiary named in any Facility Letter of Credit);
(iii) any draft, certificate or any other document presented
under the Facility Letter of Credit proving to be forged, fraudulent,
invalid or insufficient in any respect of any statement therein being
untrue or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Loan
Documents; or
(v) the occurrence of any Default or Unmatured Default.
(b) In the event any payment by the Borrower received by the Issuing Bank
or the Administrative Agent with respect to a Facility Letter of Credit and
distributed by the Administrative Agent to the Lenders on account of their
participations is thereafter set aside, avoided or recovered from the
Administrative Agent or the Issuing Bank in connection with any receivership,
liquidation, reorganization or bankruptcy proceeding, each Lender which received
such distribution shall, upon demand by the Administrative Agent, contribute
such Lender's Percentage of the amount set aside, avoided or recovered together
with interest at the rate required to be paid by the Issuing Bank or the
Administrative Agent upon the amount required to be repaid by the Issuing Bank
or the Administrative Agent.
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3.8. COMPENSATION FOR FACILITY LETTERS OF CREDIT.
(a) The Borrower shall pay to the Administrative Agent, for the ratable
account of the Lenders, based upon the Lenders' respective Percentages, a per
annum fee (the "FACILITY LETTER OF CREDIT FEE") with respect to each Facility
Letter of Credit that is equal to the LIBOR Applicable Margin in effect from
time to time. The Facility Letter of Credit Fee relating to any Facility Letter
of Credit shall be due and payable in arrears in equal installments on the first
Business Day of each month following the issuance of any Facility Letter of
Credit and, to the extent any such fees are then due and unpaid, on the Facility
Termination Date. The Administrative Agent shall promptly remit such Facility
Letter of Credit Fees, when paid, to the other Lenders in accordance with their
Percentages thereof. The Borrower shall not have any liability to any Lender
for the failure of the Administrative Agent to promptly deliver funds to any
such Lender and shall be deemed to have made all such payments on the date the
respective payment is made by the Borrower to the Administrative Agent, provided
such payment is received by the time specified in SECTION 2.15 hereof.
(b) The Issuing Bank also shall have the right to receive solely for its
own account an issuance fee of 0.15% of the face amount of each Facility Letter
of Credit, payable by the Borrower on the Issuance Date for each such Facility
Letter of Credit. The Issuing Bank shall also be entitled to receive its
reasonable out-of-pocket costs and the Issuing Bank's standard charges of
issuing, amending and servicing Facility Letters of Credit and processing draws
thereunder.
3.9. LETTER OF CREDIT COLLATERAL ACCOUNT. The Borrower hereby agrees that
it will, if required pursuant to SECTION 9.1, maintain a special collateral
account (the "LETTER OF CREDIT COLLATERAL ACCOUNT") at the Administrative
Agent's office at the address specified pursuant to SECTION 14.1, in the name of
the Borrower but under the sole dominion and control of the Administrative
Agent, for the benefit of the Lenders, and in which the Borrower shall have no
interest other than as set forth in SECTION 9.1. Such Letter of Credit
Collateral Account shall be funded to the extent required by SECTION 9.1. In
addition to the foregoing, the Borrower hereby grants to the Administrative
Agent, for the benefit of the Lenders, a properly perfected security interest in
and to the Letter of Credit Collateral Account, any funds that may hereafter be
on deposit in such account and the proceeds thereof.
ARTICLE IV
CHANGE IN CIRCUMSTANCES
4.1. YIELD PROTECTION. If, after the date hereof, any law or any
governmental or quasi-governmental rule, regulation, policy, guideline or
directive (whether or not having the force of law), or any interpretation
thereof, or the compliance of any Lender therewith,
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(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 and local income,
franchise or similar taxes on the overall income of any Lender
or applicable Lending Installation), or changes the basis of
taxation of payments to any Lender in respect of its Loans,
Facility Letters of Credit 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, Letters of Credit
issued or participated in, or interest received by it, by an
amount deemed material by such Lender, then, within 15 days of
written demand by such Lender pursuant to SECTION 4.5, the
Borrower shall pay such Lender that portion of such increased
expense incurred or reduction in an amount received which such
Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment.
4.2. CHANGES IN CAPITAL ADEQUACY REGULATIONS. If a Lender reasonably
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 fifteen days of written demand by such Lender pursuant
to SECTION 4.5, the Borrower shall pay such Lender the amount necessary to
compensate for any shortfall in the rate of return on the portion on such
increased capital which such Lender determines is attributable to this
Agreement, its Loans, its interest in the Facility Letters of Credit, or its
obligation to make Loans hereunder or participate in or issue Facility
Letters of Credit (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, rule, regulation, policy, guideline, interpretation,
or directive of any Governmental Authority having jurisdiction after the date
of this Agreement which affects the amount of capital required or reasonably
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
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regulatory authorities outside the United States implementing the July 1988
report of the Basle Committee on Banking Regulation and Supervisory Practices
Entitled "INTERNATIONAL CONVERGENCE OF CAPITAL MEASUREMENTS AND CAPITAL
STANDARDS," including transition rules, and any amendments to such regulations
adopted prior to the date of this Agreement.
4.3. 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 any Governmental
Authority having jurisdiction, the Administrative Agent shall suspend by written
notice to Borrower the availability of LIBOR Advances and require any LIBOR
Advances to be repaid; or if the Required Lenders determine that (i) deposits of
a type or maturity appropriate to match fund LIBOR Advances are not available,
the Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances 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, and, if
for any reason whatsoever the provisions of SECTION 4.1 are inapplicable, the
Administrative Agent shall suspend by written notice to Borrower the
availability of LIBOR Advances with respect to any LIBOR Advances made after the
date of any such determination.
4.4. FUNDING INDEMNIFICATION. If any payment of a LIBOR Advance occurs on
a date which is not the last day of the 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 the Borrower will indemnify
each Lender (other than any Lender whose default was the reason that the LIBOR
Advance was not made on the date specified), 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
upon Borrower's receipt of the written notice pursuant to SECTION 4.5.
4.5. LENDER STATEMENTS; SURVIVAL OF INDEMNITY. To the extent reasonably
possible, each Lender shall designate an alternate Lending Installation with
respect to its LIBOR Loans and shall take other measures in its discretion to
reduce any liability of the Borrower to such Lender under SECTIONS 4.1 and 4.2
or to avoid the unavailability of a Type of a LIBOR Advance under SECTION 4.3,
so long as such designation or other measure is not disadvantageous to such
Lender. Each Lender shall deliver a written statement of such Lender to the
Administrative Agent and to the Borrower as to the amount due, if any, under
SECTIONS 4.1, 4.2 or 4.4. 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
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4.1, 4.2 and 4.4 shall survive payment of the Obligations and termination of
this Agreement for a period of one year.
4.6. LIMITATION ON BORROWER'S LIABILITY. The Borrower shall not be
obligated to compensate any Lender pursuant to SECTION 4.1, 4.2 or 4.4 for any
amounts attributable to a period more than one year prior to such Lender's
written notice under SECTION 4.5 of its intention to seek compensation under
SECTION 4.1, 4.2 or 4.4.
ARTICLE V
CONDITIONS PRECEDENT
5.1. INITIAL ADVANCE. The Lenders shall not be required to make the
initial Advance hereunder unless (a) the Borrower shall have paid all fees then
due and payable to the Lenders, the Documentation Agent, and the Administrative
Agent hereunder, and (b) the Borrower shall have furnished to the Administrative
Agent, in form and substance satisfactory to the Lenders and their counsel and
with sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents, including
the Notes, payable to the order of each of the Lenders, and this
Agreement;
(ii) Certified copies of the articles of incorporation, limited
partnership certificate, limited liability company agreement or
other organizational document of the Borrower, each Subsidiary
and each Qualifying Investment Affiliate, to the extent
applicable, with all amendments and certified by the appropriate
governmental officer of the state of organization as of a recent
date;
(iii) Certificates of good standing for the Borrower, each Subsidiary
and each Qualifying Investment Affiliate certified by the
appropriate governmental officer of the state of organization,
and foreign qualification certificates for the Borrower,
certified by the appropriate governmental officer, for each
jurisdiction where an Unencumbered Asset is located and each
other jurisdiction where the failure to so qualify or be
licensed (if required) would have a Material Adverse Effect;
(iv) Copies, certified by an officer of the Borrower, each Subsidiary
and each Qualifying Investment Affiliate of its by-laws,
partnership agreement, operating agreement or similar document,
to the extent applicable together with all amendments thereto;
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(v) An incumbency certificate, executed by an officer of the
Borrower, 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, certified by the Secretary or Assistant Secretary, of
the Borrower's Board of Directors' resolutions (and resolutions
of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the Advances provided for herein and the
execution, delivery and performance of the Loan Documents to be
executed and delivered by the Borrower hereunder;
(vii) A written opinion of the Borrower's counsel, addressed to the
Lenders in substantially the form of EXHIBIT B hereto;
(viii) A certificate, signed by an officer of the Borrower, stating
that on the Closing Date and on the initial Borrowing Date no
Default or Unmatured Default has occurred and is continuing and
that all representations and warranties of the Borrower
contained herein are true and correct as of the Closing Date and
initial Borrowing Date as and to the extent set forth herein;
(ix) The most recent financial statements of the Borrower and a
certificate from an Authorized Officer of the Borrower that no
change in the Borrower's financial condition that would have a
Material Adverse Effect has occurred since December 31, 1995;
(x) UCC financing statement, judgment, and tax lien searches with
respect to the Borrower, any Subsidiary or Qualifying Investment
Affiliate from the States of Maryland and Illinois and the
counties in which Borrower, any Subsidiary or any Qualifying
Investment Affiliate owns properties;
(xi) Evidence of sufficient Unencumbered Assets (which evidence may
include pay-off letters (together with evidence of payment or a
direction of Borrower to use a portion of the proceeds of the
Advances to repay such Indebtedness), mortgage releases and/or
title policies) to assist the Administrative Agent in
determining the Borrower's compliance with the covenants set
forth in ARTICLE VII herein;
(xii) Written money transfer instructions, in substantially the form
of EXHIBIT E hereto, addressed to the Administrative Agent and
signed by an Authorized Officer, together with such other
related money transfer
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authorizations as the Administrative Agent may have reasonably
requested;
(xiii) Evidence that all parties whose consent is required for
Borrower to execute the Loan Documents have provided such
consents;
(xiv) Evidence that the LaSalle National Bank and Lehman credit
facilities available to Borrower have been terminated and all
outstandings thereunder will be repaid with the proceeds of the
Advances contemporaneously with the Closing.
(xv) Operating statements for each Property and other evidence of
income and expenses to assist the Administrative Agent in
determining Borrower's compliance with the covenants set forth
in Article VII herein;
(xvi) A copy of the standard lease form generally used at the
Properties;
(xvii) Evidence that the insurance coverage required in SECTION 6.17
is in full force and effect; and
(xviii) 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.
5.2. CONDITIONS TO EACH ADVANCE, ISSUANCE OF FACILITY LETTER OF CREDIT AND
CONTINUATION/CONVERSION. The following conditions must be satisfied as a
condition precedent to the making of an Advance (including Swing Line Loans),
the issuance of a Facility Letter of Credit, or the continuation of a LIBOR
Advance or conversion of an existing Advance into a LIBOR Advance:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in ARTICLE VI are
true and correct as of such Borrowing Date, Issuance Date, or
date of conversion and/or continuation as and to the extent set
forth therein, 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 and except for Property Breaches,
in which case the compliance certificate shall contain a
calculation of the financial covenants with and without
including the Property with respect to which there is a Property
Breach and demonstrate compliance with such covenants both with
and without inclusion of such Property; and
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(iii) All legal matters incident to the making of such
Advance shall be reasonably satisfactory to the
Lenders and their counsel.
Each Borrowing Notice, Letter of Credit Request, and
Conversion/Continuation Notice shall constitute a representation and warranty
by the Borrower that the conditions contained in SECTIONS 5.2(i) and (ii)
have been satisfied. Borrower shall also furnish a duly completed compliance
certificate in substantially the form of EXHIBIT C hereto (including all
schedules or exhibits if applicable) as a condition to making an Advance or
issuing a Facility Letter of Credit; provided that although the covenants in
SECTION 7.21 must be satisfied at all times (and any deviations therefrom
noted on the compliance certificate) the detailed calculations contained in
Schedule I of the compliance certificate shall be based on the most recent
quarterly information available.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that as of the date
hereof, and as of each Borrowing Date, Issuance Date and each conversion
and/or continuation (except as otherwise disclosed to and approved by the
Required Lenders):
6.1. EXISTENCE. It is duly organized, validly existing and in good
standing under the laws of the State of Maryland, with its principal place of
business in Chicago, Illinois, and is duly qualified as a foreign
corporation, properly licensed (if required), in good standing and has all
requisite authority to conduct its business in each jurisdiction in which it
owns Properties and, except where the failure to be so qualified or to obtain
such authority would not have a Material Adverse Effect, in each other
jurisdiction in which its business is conducted. Each of its Subsidiaries
and Investment Affiliates is duly organized, validly existing and in good
standing under the laws of its jurisdiction of organization and has all
requisite authority to conduct its business in each jurisdiction in which it
owns Property, and except where the failure to be so qualified or to obtain
such authority would not have a Material Adverse Effect, in each other
jurisdiction in which it conducts business.
6.2. AUTHORIZATION and VALIDITY. It 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 it of the Loan
Documents and the performance of its obligations thereunder have been duly
authorized by proper proceedings, and the Loan Documents constitute legal,
valid and binding obligations of the Borrower enforceable against it in
accordance with their terms, except as enforceability may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of
creditors' rights generally and general principles of equity (regardless of
whether enforcement is sought in a proceeding in equity or at law).
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6.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by it of the Loan Documents, nor the consummation of the
transactions therein contemplated, nor compliance with the provisions thereof
will violate in any material respect any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on, respectively, the Borrower
or any of its Subsidiaries or Qualifying Investment Affiliates or any of such
entities' articles of incorporation, by-laws, certificate of limited
partnership, partnership agreement or operating agreement, as the case may
be, or the provisions of any indenture, declaration of trust, instrument or
agreement to which any entity is a party or is subject, or by which it, or
its 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 such entity 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.
6.4. FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE. The most recent
consolidated financial statements of the Borrower and its Subsidiaries
delivered to the Lenders prior to the date that this representation is made
were prepared in accordance with GAAP in effect on the date such statements
were prepared and fairly present the consolidated financial condition and
operations of the Borrower and its Subsidiaries at such date and the
consolidated results of their operations for the period then ended. Since the
date of such financial statements, there has been no change in the business,
Property, results of operations or financial condition of the Borrower and
its Subsidiaries which have or could be reasonably expected to have a
Material Adverse Effect.
6.5. TAXES. It, its Subsidiaries, and its Qualifying Investment
Affiliates, have 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,
respectively, 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 and to Borrower's
knowledge, its Qualifying Investment Affiliates in respect of any taxes or
other governmental charges are adequate.
6.6. LITIGATION AND CONTINGENT OBLIGATIONS. Except as set forth on
Schedule 7, there is no litigation, arbitration, governmental investigation
or proceeding pending or, to the knowledge of any of its officers, threatened
in a writing received by Borrower, a Subsidiary, or a Qualifying Investment
Affiliate, against or affecting the Borrower or any of its Subsidiaries or
Investment Affiliates which, if adversely determined, would have a Material
Adverse Effect. Except as disclosed on Schedule 8, it has no material
contingent obligations not provided for or disclosed in the financial
statements referred to in SECTION 7.1, which would have or could be
reasonably expected to have a Material Adverse Effect.
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6.7. SUBSIDIARIES. SCHEDULE 1 hereto contains an accurate list of all
of the presently existing Subsidiaries and Investment Affiliates of Borrower,
setting forth their respective jurisdictions of formation, the percentage of
their respective Capital Stock owned by it or its Subsidiaries, Properties
owned and a description or its business and with respect to Investment
Affiliates, whether such Investment Affiliate constitutes a Qualifying
Investment Affiliate. All of the issued and outstanding shares of Capital
Stock of such Subsidiaries and, to Borrower's knowledge, such Investment
Affiliates have been duly authorized and issued and are fully paid and
non-assessable.
6.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither the Borrower nor any other
member of the Controlled Group has incurred any withdrawal liability to
Multiemployer Plans in excess of $250,000 in the aggregate. If withdrawals
from all Multiemployer Plans occurred, the liability would not exceed
$250,000. Each Plan and, to Borrower's knowledge, each Multiemployer Plan,
complies in all material respects with all applicable requirements of law and
regulations and Borrower and all members of the Controlled Group have
complied in all material respects with ERISA and the Code with respect to
each Plan. No Reportable Event has occurred with respect to any Plan,
neither the Borrower nor any other member of the Controlled Group has
withdrawn from any Plan or Multiemployer Plan or initiated steps to do so,
and no steps have been taken to reorganize or terminate any Plan or to
Borrower's knowledge Multiemployer Plan. Neither Borrower nor any member of
the Controlled Group has any Plans or is a party to any collective bargaining
agreements other than those listed on Schedule 4. There is no accumulated
funding deficiency (as defined in Section 412 of the Code or Section 302 of
ERISA) outstanding which could reasonably be expected to have a Material
Adverse Effect, there is no lien outstanding under Section 412 of the Code or
Section 302 of ERISA with respect to assets of Borrower or any member of the
Controlled Group and no requirement to provide security under Section
401(a)(29) of the Code or Section 307 of ERISA has been or is reasonably
expected to be imposed on assets of Borrower or any member of the Controlled
Group. No liability to the PBGC or the Internal Revenue Service with respect
to any Plan or Multiemployer Plan or trust related thereto has been or is
reasonably expected to be incurred by Borrower or any member of the
Controlled Group which could reasonably be expected to have a Material
Adverse Effect. Neither Borrower nor any member of the Controlled Group has
any contingent liability with respect to any post-retirement benefits under
any "welfare plan" (as defined in Section 3(1) of ERISA) nor withdrawal
liability or exit fee or charge with respect to any such post-retirement
benefits under any welfare plan which could reasonably be expected to have a
Material Adverse Effect. Throughout the term of the Loan, Borrower is not and
will not be an "employee benefit plan" as defined in Section 3(32) of ERISA
or a "governmental plan" within the meaning of Section 3(3) of ERISA, none of
the assets of Borrower neither will constitute "plan assets" of one nor more
plans for purposes of Title I of ERISA and Borrower will not be subject to
state statutes applicable to Borrower regulating investments and fiduciary
obligations with respect to governmental plans.
6.9. ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of Borrower or any of its
Subsidiaries or
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Investment Affiliates to the Administrative Agent or any Lender for purposes
of or in connection with this Agreement or any transaction contemplated
hereby is, and all other such factual information hereafter furnished by or
on behalf of Borrower or any of its Subsidiaries or Investment Affiliates to
the Administrative Agent or any Lender will be, true and accurate (taken as a
whole) on the date as of which such information is dated or certified and not
incomplete by omitting to state any material fact necessary to make such
information (taken as a whole) not misleading at such time. There are no
facts, events or conditions directly and specifically affecting Borrower, its
Subsidiaries or any Investment Affiliate known to Borrower and not disclosed
to Administrative Agent and the Documentation Agent or not disclosed in the
information furnished by or on behalf of Borrower, its Subsidiaries or
Investment Affiliates, which, in the aggregate, have or could be reasonably
expected to have a Material Adverse Effect.
6.10. REGULATION U. It does not hold any margin stock (as defined in
Regulation U).
6.11. MATERIAL AGREEMENTS. Neither it nor any Subsidiary or Qualifying
Investment Affiliate 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 could have a Material
Adverse Effect, or (ii) except as disclosed on Schedule 9 any agreement or
instrument evidencing or governing Indebtedness.
6.12. COMPLIANCE WITH LAWS. Except as set forth in Schedule 6 it and
its Subsidiaries and Qualifying Investment Affiliates have complied in all
material respects, to Borrower's knowledge, 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 except where such non-compliance would not have a
Material Adverse Effect. Except as disclosed on Schedule 6, neither
Borrower, any Subsidiary, or any Qualifying Investment Affiliate, has
received any written 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 remedial action responding 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.
6.13. OWNERSHIP OF PROPERTIES. On the date of this Agreement, Borrower
and its Subsidiaries and Qualifying Investment Affiliates will have good
title, free of all Liens other than Permitted Liens, to all of the Property
and assets reflected in the financial statements as owned by it and as set
forth on SCHEDULE 2.
6.14. INVESTMENT COMPANY ACT. Neither Borrower nor any Subsidiary is
an "investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
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6.15. PUBLIC UTILITY HOLDING COMPANY ACT. Neither Borrower 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.
6.16. 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) It does not intend to, or to permit any of its Subsidiaries
to 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.
6.17. INSURANCE. It and its Subsidiaries and the Qualifying Investment
Affiliates carry insurance on their Properties with financially sound and
reputable insurance companies, in such amounts, with such deductibles and
covering such risks as are customarily carried by companies engaged in
similar businesses and owning similar projects in localities where it and its
Subsidiaries and the Qualifying Investment Affiliates operate, including,
without limitation:
(i) Property and casualty insurance (including coverage
for flood and other water damage for any Property located
in an area identified by the Secretary of Housing and Urban
Development or any successor thereto as an area having special
flood hazards pursuant to the National Flood Insurance Act
of 1968 or the Flood Disaster Protection Act of 1973, as
amended, or any successor law) in the amount of 100% of the
replacement cost of the improvements at the Property with a
waiver of depreciation;
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(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
$20,000,000 per occurrence.
6.18. NYSE AND REIT STATUS. The Borrower's common stock is listed on
the New York Stock Exchange and there is no proceeding pending to delist the
Borrower's stock, and the Borrower is qualified as a real estate investment
trust and currently is in compliance with all applicable provisions of the
Code.
6.19. ENVIRONMENTAL MATTERS. Except as disclosed in Schedule 5, each
of the following representations and warranties is true and correct except to
the extent that the facts and circumstances giving rise to any such failure
to be so true and correct, in the aggregate, could not reasonably be expected
to have a Material Adverse Effect:
(i) To the knowledge of the Borrower, the Properties of Borrower,
its Subsidiaries, and Qualifying Investment Affiliates do not
contain, any Materials of Environmental Concern in amounts or
concentrations which constitute a violation of, or could
reasonably give rise to liability under, Environmental Laws.
(ii) To the knowledge of Borrower, the Properties of Borrower and its
Subsidiaries and Investment Affiliates and all operations at
the Properties are in compliance with all applicable
Environmental Laws, and there is no contamination at or under
such Properties, or violation of any Environmental Law with
respect to such Properties for which Borrower, its Subsidiaries
or Investment Affiliates is or could be liable.
(iii) Neither Borrower nor any of its Subsidiaries or Qualifying
Investment Affiliates has received any written notice of
violation, alleged violation, non-compliance, liability or
potential liability regarding Environmental Laws with regard to
any of the Properties, nor does it have knowledge that any such
notice will be received or is being threatened.
(iv) To the knowledge of Borrower, Materials of Environmental Concern
have not been transported or disposed of from the Properties of
Borrower and its Subsidiaries and Qualifying Investment
Affiliates in violation of, or in a manner or to a location
which could reasonably give rise to liability of Borrower, any
Subsidiary, or any Qualifying Investment Affiliate under,
Environmental Laws, nor have any Materials of Environmental
Concern been generated, treated, stored or disposed of at, on
or under any of such Properties in violation of, or in a manner
that could give rise to liability of Borrower, any Subsidiary
or any
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Qualifying Investment Affiliate under, any applicable
Environmental Laws.
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of Borrower, threatened, under
any Environmental Law to which Borrower, any of its
Subsidiaries, or any Qualifying Investment Affiliate, is named
as a party with respect to the Properties of such entity, nor
are there any consent decrees or other decrees, consent orders,
administrative order or other orders, or other administrative
or judicial requirements outstanding under any Environmental
Law with respect to such Properties for which Borrower, its
Subsidiaries, or any Qualifying Investment Affiliate is or
could be liable.
(vii) To the knowledge of Borrower, there has been no release or
threat of release of Materials of Environmental Concern at or
from the Properties of Borrower and its Subsidiaries and
Qualifying Investment Affiliates, or arising from or related
to the operations of such entity in connection with the
Properties in violation of or in amounts or in a manner that
could give rise to liability under Environmental Laws.
6.20. LICENSES, ETC. Borrower, its Subsidiaries or the Qualifying
Investment Affiliates have obtained and hold in full force and effect, all
material trademarks, trade names, copyrights, licenses, permits,
certificates, authorizations, qualifications, accreditations, easements,
rights of way and other rights, consents and approvals which are necessary
for the operation of the Properties.
6.21. JUDGMENTS. There are no judgments, decrees, or orders of any
kind against Borrower, its Subsidiaries or any Qualifying Investment
Affiliate unpaid of record which would have a Material Adverse Effect.
6.22. PROPERTY MANAGER. As of the date hereof, the manager of each
Property is the Borrower or a Qualifying Investment Affiliate.
6.23. UPDATED SCHEDULES. The Borrower may at any time and from time to
time update any Schedule to this Agreement by delivery to the Administrative
Agent of a revised Schedule and, from and after the date of delivery of such
updated Schedule to the Administrative Agent, and its approval by the
Required Lenders, the representations and warranties of the Borrower
hereunder shall be deemed to reflect such revised Schedule.
6.24. UNENCUMBERED ASSETS. SCHEDULE 2 hereto contains a complete and
accurate description of Unencumbered Assets as of the Closing Date and as
supplemented from time to time including the entity that owns each
Unencumbered Asset. With respect to each Property identified from time to
time as an Unencumbered Asset, Borrower hereby
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represents and warrants as follows except to the extent disclosed in writing
to the Lenders and approved by the Required Lenders (which approval shall not
be unreasonably withheld):
(a) No portion of any improvement on the Unencumbered Asset
is located in an area identified by the Secretary of Housing
and Urban Development or any successor thereto as an area
having special flood hazards pursuant to the National Flood
Insurance Act of 1968 or the Flood Disaster Protection Act of
1973, as amended, or any successor law, or, if located within
any such area, Borrower or the respective Qualifying
Investment Affiliate has obtained and will maintain the
insurance prescribed in SECTION 6.17 hereof.
(b) To the Borrower's knowledge, Borrower or the respective
Qualifying Investment Affiliate has obtained all material
certificates, licenses and other approvals, governmental and
otherwise, necessary for the operation of the Unencumbered
Asset and the conduct of its business and all required zoning,
building code, land use, environmental and other similar
permits or approvals which it is required to maintain, all of
which are in full force and effect as of the date hereof and
not subject to revocation, suspension, forfeiture or
modification.
(c) To the Borrower's knowledge, the Unencumbered Asset
and the present use and occupancy thereof are in material
compliance with all applicable zoning ordinances (without
reliance upon adjoining or other properties), building codes,
land use and Environmental Laws, laws relating to the disabled
including, but not limited to, the Americans with Disabilities
Act to the extent applicable, and other similar laws
("Applicable Laws").
(d) The Unencumbered Asset is served by all utilities
required for the current or contemplated use thereof. All
utility service is provided by public utilities and the
Unencumbered Asset has accepted or is equipped to accept such
utility service.
(e) All public roads and streets necessary for service of
and access to the Unencumbered Asset for the current or
contemplated use thereof have been completed, are serviceable
and all-weather and are physically and legally open for use by
the public.
(f) The Unencumbered Asset is served by public water and
sewer systems or, if the Unencumbered Asset is not serviced by
a public water and sewer system, such alternate systems are
adequate and meet, in all material respects, all requirements
and regulations of, and otherwise complies in all material
respects with, all Applicable Laws with respect to such
alternate systems.
(g) Borrower is not aware of any latent or patent
structural or other significant deficiency of the Unencumbered
Asset. The Unencumbered Asset is free of damage and waste
that would materially and adversely affect the value of the
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Unencumbered Asset, is in good repair and there is no deferred
maintenance other than ordinary wear and tear. The
Unencumbered Asset is free from damage caused by fire or other
casualty. There is no pending or, to the actual knowledge of
Borrower threatened condemnation proceedings affecting the
Unencumbered Asset, or any part thereof.
(h) To Borrower's knowledge, all liquid and solid
waste disposal, septic and sewer systems located on the
Unencumbered Asset are in a good and safe condition and
repair and to Borrower's knowledge, in material compliance
with all Applicable Laws with respect to such systems.
(i) All improvements on the Unencumbered Asset lie
within the boundaries and building restrictions of the legal
description of record of the Unencumbered Asset, no such
improvements encroach upon easements benefitting the
Unencumbered Asset other than encroachments that do not
materially adversely affect the use or occupancy of the
Unencumbered Asset and no improvements on adjoining properties
encroach upon the Unencumbered Asset or easements benefitting
the Unencumbered Asset other than encroachments that do not
materially adversely affect the use or occupancy of the
Unencumbered Asset. All amenities, access routes or other
items that materially benefit the Unencumbered Asset are under
direct control of Borrower or the respective Qualifying
Investment Affiliate, constitute permanent easements that
benefit all or part of the Unencumbered Asset or are public
property, and the Unencumbered Asset, by virtue of such
easements or otherwise, is contiguous to a physically open,
dedicated all weather public street, and has the necessary
permits for ingress and egress.
(j) There are no delinquent taxes, ground rents,
water charges, sewer rents, assessments, insurance premiums,
leasehold payments, or other outstanding charges affecting the
Unencumbered Asset except to the extent such items are being
contested in good faith and as to which adequate reserves have
been provided.
(k) The Unencumbered Asset is assessed for real
estate tax purposes as one or more wholly independent tax lot
or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or
improvements is assessed and taxed together with the
Unencumbered Asset or any portion thereof.
(l) With respect to those Unencumbered Assets in
which Borrower or any Qualifying Investment Affiliate holds a
leasehold estate under a Financeable Ground Lease, with
respect to each such Financeable Ground Lease (i) Borrower or
the respective Qualifying Investment Affiliate is the owner of
a valid and subsisting interest as tenant under the
Financeable Ground Lease; (ii) the Financeable Ground Lease is
in full force and effect, unmodified and not supplemented by
any writing or otherwise; (iii) all rent, additional rent and
other charges reserved therein have been
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paid to the extent they are payable to the date hereof; (iv)
Borrower or the respective Qualifying Investment Affiliate
enjoys the quiet and peaceful possession of the estate demised
thereby, subject to any sublease; (v) the Borrower or the
respective Qualifying Investment Affiliate is not in default
under any of the terms thereof and there are no circumstances
which, with the passage of time or the giving of notice or
both, would constitute an event of default thereunder; (vi)
the lessor under the Financeable Ground Lease is not in
default under any of the terms or provisions thereof on the
part of the lessor to be observed or performed; (vii) the
lessor under the Financeable Ground Lease has satisfied all of
its repair or construction obligations, if any, to date
pursuant to the terms of the Financeable Ground Lease; (viii)
the execution, delivery and performance by Borrower and any
applicable Qualifying Investment Affiliate of the Negative
Pledge Agreements do not require the consent (other than those
consents which have been obtained and are in full force and
effect) under, and will not contravene any provision of or
cause a default under, the Financeable Ground Lease; (ix)
Schedule 2 lists all the Financeable Ground Leases to which
any of the Unencumbered Assets are subject and all amendments
and modifications thereto; and (x) the lessor indicated on
Schedule 2 for each Financeable Ground Lease is the current
lessor under the related Financeable Ground Lease.
A breach of any of the representations and warranties
contained in this SECTION 6.24 with respect to a Property
shall disqualify unless otherwise approved by the Required
Lenders, such Property from being an Unencumbered Asset but
shall not constitute a Default (unless the elimination of such
Property as an Unencumbered Asset results in a Default under
one of the other provisions of this Agreement including
without limitation SECTIONS 7.21(iii) or 7.21(iv)).
ARTICLE VII
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
7.1. FINANCIAL REPORTING. The Borrower will maintain, for themselves
and each Subsidiary, and shall cause each Qualifying Investment Affiliate to
maintain, a system of accounting established and administered in accordance
with GAAP, and furnish to the Lenders:
(i) as soon as available, but in any event not later than 45
days after the close of each fiscal quarter, for the
Borrower an unaudited consolidated balance heet as of
the close of each such period and the related unaudited
consolidated statements of income and retained earnings and
of cash flows of the Borrower and its Subsidiaries for
such period and
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the portion of the fiscal year through the end of such period,
setting forth in each case in comparative form the figures for
the previous year, all certified by the Borrower's chief financial
officer or chief accounting officer;
(ii) As soon as available, but in any event not later than 45 days
after the close of each fiscal quarter, for the Borrower and its
Subsidiaries, related reports in form and substance satisfactory
to the Lenders, all certified by Borrower's chief financial
officer or chief accounting officer, including a statement of
Funds From Operations, a description of Unencumbered Assets, a
listing of capital expenditures (in the level of detail as
disclosed in Borrower's most recent Form 10Q), a report listing
and describing all newly acquired Properties, including their
cash flow, cost and secured or unsecured Indebtedness assumed in
connection with such acquisition, if any, summary Property
information for all Properties, including, without limitation,
their Property Operating Income, occupancy rates, square footage,
property type and date acquired or built, and such other
information as may be requested to evaluate the quarterly
compliance certificate delivered as provided below;
(iii) As soon as publicly available but in no event later than the date
such reports are to be filed with the Securities Exchange
Commission, copies of all Form 10Ks, 10Qs, 8Ks, and any other
annual, quarterly, monthly or other reports, copies of all
registration statements and any other public information which
the Borrower or any of its Subsidiaries files with the Securities
Exchange Commission and to the extent any of such reports
contains information required under the other subsections of this
SECTION 7.1, the information need not be furnished separately
under the other subsections;
(iv) As soon as available, but in any event not later than 90 days
after the close of each fiscal year of the Borrower and its
Subsidiaries, reports in form and substance satisfactory to the
Lenders, certified by the Borrower's chief financial officer or
chief accounting officer containing Property Operating Income
for each individual Property;
(v) Not later than forty-five (45) days after the end of each of the
first three fiscal quarters, and not later than ninety (90) days
after the end of the fiscal year, a compliance certificate in
substantially the form of EXHIBIT C hereto signed by the
Borrower's chief financial officer or chief accounting officer
confirming that Borrower is in compliance with all of the
covenants of the Loan Documents, showing the calculations and
computations necessary to determine compliance with the financial
covenants contained in this Agreement (including such schedules
and
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backup information as may be necessary to demonstrate such
compliance) and stating that to such officer's best knowledge,
there is no other Default or Unmatured Default exists, or if any
Default or Unmatured Default exists, stating the nature and
status thereof;
(vi) (a) As soon as possible and in any event within 10 Business 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 Borrower, describing said Reportable Event
and within 20 days after such Reportable Event, a statement
signed by such chief financial officer describing the action
which Borrower proposes to take with respect thereto; and (b)
within 10 Business Days of receipt, any notice from the Internal
Revenue Service, PBGC or Department of Labor with respect to a
Plan regarding any excise tax, proposed termination of a Plan,
prohibited transaction or fiduciary violation under ERISA or the
Code which could result in any liability to Borrower or any
member of the Controlled Group in excess of $100,000; and (c)
within 10 Business Days of filing, any Form 5500 filed by
Borrower with respect to a Plan, or any member of the Controlled
Group which includes a qualified accountant's opinion.
(vii) As soon as possible and in any event within 30 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 or Qualifying
Investment Affiliates is or may be liable to any Person as a
result of the release by such entity, or any of its Subsidiaries,
or any other Person of any toxic or hazardous waste or substance
into the environment, and (b) any notice alleging any violation
of any federal, state or local environmental, health or safety
law or regulation by the Borrower or any of its Subsidiaries or
Investment Affiliates, which, in either case, could be reasonably
likely to have a Material Adverse Effect;
(viii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished;
(ix) Promptly upon the distribution thereof to the press or the
public, copies of all press releases;
(x) As soon as possible, and in any event within 10 days after the
Borrower knows of any fire or other casualty or any pending or
threatened condemnation or eminent domain proceeding with respect
to all or any portion of any Property or any property secured by
a Qualified Mortgage, a statement signed by the Chief Financial
Officer of
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Borrower, describing such fire, casualty or condemnation and the
action Borrower intends to take with respect thereto;
(xi) Not later than 45 days after the end of each quarter, a report on
the aging of receivables with respect to each of the Properties
(I.E. 0-29, 30-59, 60-89 and 90 or more days past due) showing
aggregate delinquencies for each of the Properties (including a
characterization of the type of receivable) and trends for the
prior four quarters;
(xii) Not later than 45 days after the end of each quarter, an
unaudited financial statement for each Qualifying Investment
Affiliate that is not a Subsidiary that owns an Unencumbered
Asset; and
(xiii) Such other information (including, without limitation, financial
statements for the Borrower and non-financial information) as the
Administrative Agent or any Lender may from time to time
reasonably request.
7.2. USE OF PROCEEDS. (i) The Borrower will use the proceeds of the
Advances and the Facility Letters of Credit for the general business purposes
of the Borrower, including working capital needs, closing costs, and interim
or other financing for acquisitions of new Projects, construction of new
improvements or expansions of existing improvements on Projects, and to repay
outstanding Indebtedness; and (ii) The Borrower will not, nor will it permit
any Subsidiary to, use any of the proceeds of the Advances (x) to purchase or
carry any "MARGIN STOCK" (as defined in Regulation U) or (y) to fund any
tender offer for all or substantially all of another Person's outstanding
Capital Stock registered with the Securities and Exchange Commission under
the Securities Act of 1933, unless such Person shall have consented to such
tender offer prior to its commencement and the Required Lenders shall have
consented to such use of the proceeds of such Advance.
7.3. NOTICE OF DEFAULT. The Borrower will give, and will cause each of
its Subsidiaries and each Qualifying Investment Affiliate 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
could be reasonably likely to have a Material Adverse Effect.
7.4. CONDUCT OF BUSINESS. The Borrower will do, and will cause each of
its Subsidiaries and Qualifying Investment Affiliates to do, all things
necessary to remain duly incorporated and/or duly qualified, validly existing
and in good standing as a real estate investment trust, corporation, general
partnership, limited liability company or limited partnership, as the case
may be, in its jurisdiction of incorporation/formation, except, with respect
to any Subsidiary or any Qualifying Investment Affiliate having less than
$10,000,000 of Market Capitalization, where the preservation of its corporate
existence, in the good faith business judgment of the Borrower, is no longer
in the best interests of the Borrower and the failure to preserve its
corporate existence would not have a Material
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Adverse Effect and the elimination of its Properties from the calculation of
financial covenant compliance would not cause a Default or an Unmatured
Default. The Borrower will maintain all requisite authority to conduct its
business in each jurisdiction in which the Properties are located and, except
where the failure to be so qualified would not have a Material Adverse
Effect, in each jurisdiction required to carry on and conduct its businesses
in substantially the same manner as it is presently conducted, and,
specifically, neither the Borrower nor its Subsidiaries nor the Qualifying
Investment Affiliates will undertake any business other than the acquisition,
development, ownership, management, operation and leasing of
warehouse/industrial properties and ancillary businesses specifically related
thereto, except that the Borrower and its Subsidiaries and Qualifying
Investment Affiliates may invest in other assets subject to the following
limitations with respect to the specified categories of assets:
<TABLE>
<CAPTION>
CATEGORIES OF ASSETS TOTAL INVESTMENT LIMITATIONS
-------------------- ----------------------------
<S> <C> <C>
(i) unimproved land 7% of Market Capitalization
(ii) other property holdings (excluding 5% of Market Capitalization
cash, Cash Equivalents, the
Non-industrial Properties and
Indebtedness of any Subsidiary or
Qualifying Investment Affiliate to
the Borrower)
(iii) stock holdings other than in 5% of Market Capitalization
Subsidiaries and Qualifying
Investment Affiliates
(iv) mortgages other than Qualified 5% of Market Capitalization
Mortgages
(v) joint ventures and partnerships 10% of Market Capitalization
other than investments in
Qualifying Investment Affiliates
</TABLE>
The total investment in all the foregoing investment categories in the aggregate
shall be less than or equal to twenty percent (20%) of Market Capitalization.
In addition to the foregoing restrictions, (a) investments in unimproved land
which is not adjacent to existing improvements and not under active planning for
near term development as evidenced to the reasonable satisfaction of
Administrative Agent shall not exceed 5% of Market Capitalization, (b) lessee's
interests in operating leases pursuant to which Borrower, its Subsidiaries or
Investment Affiliates operate any properties shall not exceed 10% of Market
Capitalization, and (c) no single industrial property investment shall exceed
10% of Market Capitalization. For the purposes of this SECTION 7.4, all
investments shall be valued in accordance with GAAP.
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7.5. TAXES. The Borrower will pay, and will cause each of its
Subsidiaries and Qualifying Investment Affiliates to pay, when due all taxes,
assessments and governmental charges and levies upon them of their income,
profits or Properties, except those which are being contested in good faith
by appropriate proceedings and with respect to which adequate reserves have
been set aside.
7.6. INSURANCE. (i) The Borrower will, and will cause each of its
Subsidiaries and Qualifying Investment Affiliates to, maintain with
financially sound and reputable insurance companies insurance on all its
Property in such amounts and covering such risks as is consistent with sound
business practice and in compliance with the representation in SECTION 6.17,
and the Borrower will furnish to the Administrative Agent or any Lender upon
request full information as to the insurance carried. (ii) The Borrower
will promptly notify the Administrative Agent if there has been a termination
of any insurance policy or a material change in coverage or of the credit
rating of the insurer providing such coverage.
7.7. COMPLIANCE WITH LAWS. The Borrower will, and will cause each of
its Subsidiaries and Qualifying Investment Affiliates to, be in material
compliance, with all laws, rules and regulations and with all final orders,
writs, judgments, injunctions, decrees or awards to which they may be subject.
7.8. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause each
of its Subsidiaries and Qualifying Investment Affiliates 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.
7.9. INSPECTION. Upon reasonable notice, the Borrower will, and will
cause each of its Subsidiaries and Qualifying Investment Affiliates to,
permit the Lenders, by their respective representatives and agents, to
inspect any of the Properties, corporate books and financial records of the
Borrower and each of its Subsidiaries and Qualifying Investment Affiliates,
to examine and make copies of the books of accounts and other financial
records of the Borrower and each of its Subsidiaries and Qualifying
Investment Affiliates, and to discuss the affairs, finances and accounts of
the Borrower and each of its Subsidiaries and Qualifying Investment
Affiliates, and to be advised as to the same by, their respective officers at
such reasonable times during normal business hours and reasonable intervals
as the Lenders may reasonably designate.
7.10. MAINTENANCE OF STATUS. The Borrower shall at all times (i)
maintain the listing of its common stock on the New York Stock Exchange and
not take any action that results in a proceeding to delist such stock, and
(ii) maintain its status as a real estate investment trust in compliance with
all applicable provisions of the Code.
7.11. DIVIDENDS. Provided there is NOT a continuing Default under
SECTION 8.1 or SECTION 8.2, and there is not a continuing Default under
SECTION 8.3 relating to a breach of any of the covenants contained in
SECTIONS 7.20 and 7.21, the Borrower shall be permitted to
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declare and pay dividends on their Capital Stock from time to time in amounts
determined by the Borrower, PROVIDED, HOWEVER, that subject to the terms of
the next sentence, in no event shall the Borrower declare or pay dividends on
their Capital Stock if dividends paid in any period of four fiscal quarters,
in the aggregate, would exceed 90% of Funds From Operations for such period.
Notwithstanding the foregoing, unless at the time of distribution there
exists a Default in the payment of principal, interest, or the Commitment
Fee, the Borrower shall be permitted to distribute whatever amount of
dividends is necessary to maintain its tax status as a real estate investment
trust.
7.12. MERGER; SALE OF ASSETS. The Borrower will not, nor will it
permit any of its Subsidiaries or Qualifying Investment Affiliates to, enter
into any merger, consolidation, reorganization or liquidation or transfer or
otherwise dispose of all or a portion of their Property if such disposition
would constitute a "Restricted Disposition," except for (i) such transactions
that occur between Wholly-Owned Subsidiaries, (ii) transactions where
Borrower is the surviving entity and there is no change in business conducted
or loss of an investment grade rating on such entity's long-term unsecured
debt and no other Default results from such transaction, or (iii)
transactions that are approved in advance in writing by the Lenders. For
purposes of this SECTION 7.12, a "RESTRICTED DISPOSITION" shall mean any
disposition of assets (exclusive of Like-Kind Exchanges of one
industrial/warehouse property for another and dispositions of Non-industrial
Properties) if such disposition is of assets that (i) when aggregated with
all other assets of the Borrower, its Subsidiaries and Qualifying Investment
Affiliates previously disposed of during the fiscal year (exclusive of
Like-Kind Exchanges of one industrial/warehouse property for another and
dispositions of Non-industrial Properties), comprise more than 10% of Market
Capitalization for the most recent available quarter or (ii) when aggregated
with all other assets of the Borrower, its Subsidiaries and Qualifying
Investment Affiliates previously disposed of (exclusive of Like-Kind
Exchanges of one industrial/warehouse property for another and dispositions
of Non-industrial Properties) from the Closing Date to the date of such sale
comprise 25% or more of Market Capitalization for the most recent available
quarter.
7.13. TRANSFERS OF UNENCUMBERED ASSETS. Neither the Borrower nor any
of its Qualifying Investment Affiliates shall transfer or otherwise dispose
of (other than the creation or incurrence of Liens permitted under SECTION
7.16) an Unencumbered Asset (excluding its Non-industrial Properties) without
the prior written consent of Lenders holding 51% or more of the Aggregate
Commitment if such Unencumbered Asset, together with any other Unencumbered
Assets (excluding the Non-industrial Properties) which have been disposed of
during the period of four fiscal quarters ending with the quarter during
which such transfer occurs, have a value which exceeds 20% of the Value of
Unencumbered Assets (as determined at the beginning of such four quarter
period and increased to reflect the acquisition of Unencumbered Assets during
such four quarter period) or if such transfer would result in a violation of
the covenants contained in SECTIONS 7.20 and 7.21.
7.14. OWNERSHIP AND CONTROL OF BORROWER. The Borrower's management
(president, vice president, senior vice president, secretary, treasurer,
executive vice president, chief financial officer or chief executive officer)
and directors shall directly or indirectly control
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the ownership (which shall include vested options) of a minimum 550,000
common shares of the Borrower adjusted for stock splits, provided that if
Borrower's management and directors fail to maintain such ownership, such
failure shall not constitute a Default unless such failure continues for six
months without approval by the Required Lenders of such lower level of
ownership.
7.15. SUBSIDIARIES AND QUALIFYING INVESTMENT AFFILIATES. In the event
that Borrower shall, directly or indirectly, transfer or otherwise dispose of
the Capital Stock (other than intercompany transfers where following such
transfer the assets of the Subsidiary or Qualifying Investment Affiliate
still meet the requirements for being an Unencumbered Asset) or other
ownership interests in any Subsidiaries or Qualifying Investment Affiliates,
such transfer or disposal shall be treated as though the applicable
Subsidiary or Qualifying Investment Affiliate had disposed of its assets for
purposes of determining whether such disposition is a Restricted Disposition
as defined in SECTION 7.12 or whether such disposition requires a written
consent of Lenders pursuant to SECTION 7.13.
7.16. LIENS. The Borrower will not, nor will it permit any of its
Subsidiaries or Qualifying Investment Affiliates to, create, incur, or suffer
to exist any Lien in, of or on the Property of the Borrower or any of their
Subsidiaries or Qualifying Investment Affiliates except:
(i) Liens for taxes, assessments or governmental charges or levies on
their Property if the same shall not at the time be delinquent or
thereafter can be paid without penalty, or are being contested in
good faith and by appropriate proceedings and for which adequate
reserves shall have been set aside on their books;
(ii) Liens which arise by operation of law, such as carriers',
warehousemen's, landlords', materialmen and mechanics' liens and
other similar liens arising in the ordinary course of business
which secure payment of obligations not more than 30 days past
due or which are being contested in good faith by appropriate
proceedings and for which adequate reserves shall have been set
aside on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions, zoning restrictions,
easements and such other encumbrances or charges against real
property as are of a nature generally existing with respect to
properties of a similar character and which do not in any
material way affect the marketability of the same or interfere
with the use thereof in the business of the Borrower or its
Subsidiaries or Qualifying Investment Affiliates;
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(v) Liens of any Subsidiary or Investment Affiliate in favor of the
Borrower;
(vi) Liens existing on the date hereof and described in SCHEDULE 3
hereto; and
(vii) Liens arising in connection with any Indebtedness permitted
hereunder to the extent such Liens will not result in a violation
of any of the provisions of this Agreement.
Liens permitted pursuant to this SECTION 7.16 shall be deemed to be "PERMITTED
LIENS".
7.17. AFFILIATES. The Borrower will not, nor will it permit any of its
Subsidiaries or Qualifying Investment Affiliates 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 Borrower's or such Subsidiary's or Qualifying Investment
Affiliate's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary or Qualifying Investment Affiliate than the
Borrower or such Subsidiary or Qualifying Investment Affiliate would obtain
in a comparable arms-length transaction.
7.18. INTEREST RATE HEDGING. The Borrower will not enter into or
remain liable upon, nor will it permit any Subsidiary or Qualifying
Investment Affiliate to enter into or remain liable upon, any agreements,
devices or arrangements designed to protect at least one of the parties
thereto from the fluctuations of interest rates, exchange rates or forward
rates applicable to such party's assets, liabilities or exchange
transactions, including, but not limited to, interest rate exchange
agreements, forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options unless
such agreement, device or arrangement was entered into by the Borrower, a
Subsidiary or Qualifying Investment Affiliate in the ordinary course of its
business for the purpose of hedging interest rate risk to the Borrower, a
Subsidiary or Qualifying Investment Affiliate.
7.19. VARIABLE INTEREST INDEBTEDNESS. The Borrower shall not at any
time permit the outstanding principal balance of Indebtedness of the Borrower
and its Subsidiaries or Qualifying Investment Affiliates which bears interest
at an interest rate that is not fixed through the maturity date of such
Indebtedness ("Variable Rate Debt") to exceed $100,000,000, unless the amount
in excess of $100,000,000 is covered by interest rate caps or other interest
rate protection products reasonably satisfactory to the Required Lenders.
Notwithstanding the foregoing, Borrower shall be entitled to exclude up to
$75,000,000 of tax exempt bonds from the calculation of Variable Rate Debt.
7.20. CONSOLIDATED NET WORTH. The Borrower as of the last day of any
fiscal quarter, shall maintain a Consolidated Net Worth of not less than the
sum of (i) $225,000,000 plus (ii) seventy-five percent (75%) of the aggregate
proceeds received by
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the Borrower (net of customary related fees and expenses) in connection with
any offering of stock in the Borrower after the Closing Date.
7.21. INDEBTEDNESS AND CASH FLOW COVENANTS. The Borrower shall not at
any time permit:
(i) the ratio of EBITDA to Fully Diluted Debt Service
to be less than 2.25 to 1.0 for the quarter then
ended;
(ii) Consolidated Total Indebtedness to exceed fifty
percent (50%) of Market Capitalization;
(iii) the Value of Unencumbered Assets to be less than
1.75 times the Consolidated Senior Unsecured
Indebtedness;
(iv) the ratio obtained by dividing: (a) the Property
Operating Income after deducting (without
duplication) the Capital Expenditure Reserve Amount
and an assumed management fee equal to 1% of gross
revenues (excluding tenant reimbursements) from all
Unencumbered Assets qualifying for inclusion in the
calculation of Value of Unencumbered Assets for
such quarter by (b) that portion of Debt Service
attributable to Consolidated Unsecured Indebtedness
plus (without duplication) Borrower's pro rata
share (based on economic interest) of Debt Service
for such quarter attributable to unsecured
indebtedness of Qualifying Investment Affiliates
that own assets qualifying for inclusion in the
calculation of Value of Unencumbered Assets to be
less than 2.00 to 1.0 for the quarter then ended;
and
(v) Consolidated Secured Indebtedness to exceed forty
percent (40%) of Market Capitalization for quarters
ending on or before March 31, 1998, and thirty-five
percent (35%) thereafter.
7.22. ENVIRONMENTAL MATTERS. The Borrower will, and will cause each of
its Subsidiaries and Qualifying Investment Affiliates to:
(i) be in material compliance with, and use its reasonable efforts
to ensure material compliance by all tenants and subtenants, if any, with,
all applicable Environmental Laws and obtain and be in material compliance
with and maintain, and use its reasonable efforts to ensure that all
tenants and subtenants obtain and be in material compliance with and
maintain, all material licenses, approvals, notifications, registrations
or permits required by applicable Environmental Laws;
(ii) conduct and complete, or will use its reasonable efforts to
cause its tenants or subtenants to conduct and complete, all
investigations, studies, sampling
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and testing, and all remedial, removal and other actions required under
Environmental Laws and promptly comply in all material respects with all
lawful orders and directives of all Governmental Authorities applicable
to Borrower, its Subsidiaries or Qualifying Investment Affiliates or
their respective Properties regarding Environmental Laws, except to the
extent that (a) the same are being contested in good faith by appropriate
proceedings and the pendency of such proceedings could not be reasonably
expected to have a Material Adverse Effect, or (b) the Borrower has
determined in good faith that contesting the same is not in the best
interests of the Borrower and its Subsidiaries and the failure to contest
the same could not be reasonably expected to have a Material Adverse
Effect;
(iii) defend, indemnify and hold harmless the Administrative Agent,
the Documentation Agent and each Lender, and their respective employees,
agents, officers and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and expenses
arising out of, or in any way relating to the violation of, noncompliance
with or liability under any Environmental Laws applicable to the operations
of the Borrower, its Subsidiaries and Qualifying Investment Affiliates or
the Properties for which the Borrower, its Subsidiaries or Qualifying
Investment Affiliates are liable or could reasonably be expected to be
liable, including, without limitation, reasonable attorney's and
consultant's fees, investigation and laboratory fees, response costs, court
costs and litigation expenses, except to the extent that any of the
foregoing arise out of the gross negligence or willful misconduct of the
party seeking indemnification therefor. This indemnity shall continue in
full force and effect regardless of the termination of this Agreement; and
(iv) prior to the acquisition of a new Property after the Closing
Date, perform or cause to be performed an environmental investigation,
which investigation shall at a minimum comply with the specifications and
procedures attached hereto as EXHIBIT F. In connection with any such
investigation, Borrower shall cause to be prepared a report of such
investigation and make it available to the Administrative Agent, and any
Lender may request that Administrative Agent obtain a copy of such report.
Such report shall be reasonably satisfactory in form and substance to the
Administrative Agent.
7.23. NOTIFICATION OF RATING CHANGE. The Borrower shall notify the
Administrative Agent promptly (but no later than ten days following the
occurrence of any of the following events) if there is any change in the
rating assigned to Borrower's long term unsecured debt (regardless of whether
any such debt is outstanding) or Facility rating from Moody's or S&P or any
substitute rating agency of either of such ratings.
7.24. MAXIMUM REVENUE FROM SINGLE TENANT. Borrower shall not permit
the rent revenue (exclusive of tenant reimbursements) received from a single
tenant during any quarter (as annualized), to exceed 5% of Market
Capitalization as of the last day of such quarter.
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7.25. NEGATIVE PLEDGE. Borrower agrees that throughout the term of this
Facility, no "negative pledge" on Unencumbered Assets shall be given to any
other lender. Borrower also agrees in addition to other restrictions on
transfer contained herein, that if within six (6) months after the Closing
Date, Borrower has not obtained a rating of at least Baa3 from Moody's or a
rating of at least BBB- from S&P on either its long-term unsecured debt or
this Facility, then until such time as either of such ratings is obtained,
Borrower shall not transfer, assign, mortgage, hypothecate or otherwise
encumber any of the Unencumbered Assets, selected by Borrower and approved by
the Required Lenders that are identified as "Restricted Unencumbered Assets
in Schedule 2" (the "Restricted Unencumbered Assets") without the prior
written consent of the Required Lenders (the "Negative Pledge Agreement").
The list of Restricted Unencumbered Assets can be changed from time to time
with the consent of the Required Lenders (which consent will not be
unreasonably withheld). Borrower further agrees to deliver to
Administrative Agent within five (5) days following written demand (which
demand shall be made by Administrative Agent at its option and at the request
of the Required Lenders), instruments that are in recordable form which
contain the foregoing Negative Pledge Agreement and can be recorded against
each of the Restricted Unencumbered Assets. The effectiveness of the
Negative Pledge Agreement shall not in any way be conditioned upon the
recordation of such recordable instruments. If any of the Restricted
Unencumbered Assets are owned by a Qualifying Investment Affiliate, then
prior to the effective date of the Negative Pledge Agreement, such Qualifying
Investment Affiliate shall execute a guarantee of all indebtedness incurred
pursuant to the Facility, with liability limited to such Restricted
Unencumbered Assets owned by the Qualifying Investment Affiliate. If after
the effective date of the Negative Pledge Agreement, the required rating is
obtained by the Borrower, then the Negative Pledge Agreement shall be of no
further force and effect and if any instruments evidencing the Negative
Pledge Agreement had been recorded, the Administrative Agent shall promptly
cause releases to be filed with respect to such instruments. Further, if a
Qualifying Investment Affiliate has delivered a guarantee pursuant to the
terms of this SECTION 7.25, in form acceptable to the Required Lenders then
the Administrative Agent shall also execute and deliver to such Qualifying
Investment Affiliates a release of its liability pursuant to that guarantee.
7.26. MANAGER. The Properties (other than the Non-industrial
Properties) shall at all times be managed by the Borrower or a Qualifying
Investment Affiliate.
7.27. ACCELERATION NOTICE. Borrower agrees that it shall, within ten
(10) days after receipt of written notice that any Indebtedness aggregating
$5,000,000 or more of Borrower or any Subsidiary or Qualifying Investment
Affiliate has been accelerated, provide written notice to the Administrative
Agent of such acceleration.
7.28. LIEN SEARCHES; Title Searches. Borrower shall, upon the
Administrative Agent's request therefor given from time to time, but not more
frequently than once during the term of this Facility, unless a Default shall
have occurred and be continuing or such Title Search indicates a Lien other
than a Permitted Lien or another state of facts not reasonably satisfactory
to the Administrative Agent and the Required Lenders, pay for (a) reports of
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UCC, tax lien, judgment and litigation searches with respect to Borrower and
each Qualifying Investment Affiliate that owns an Unencumbered Asset, and (b)
searches of title to each of the Properties which are Unencumbered Assets
(each, a "Title Search"). All Title Searches and lien searches required
under this Agreement shall be conducted by search firms designated by
Administrative Agent in each of the locations designated by the
Administrative Agent. After the effective date of the Negative Pledge
Agreement pursuant to SECTION 7.25, such Title Searches may be required more
frequently provided, however, that the Borrower shall not be required to pay
for more than one set of searches during any calendar year.
7.29. ADDITIONAL COVENANTS. Borrower will not engage in or knowingly
permit any illegal activities at any Property.
7.30. CALCULATION OF FINANCIAL COVENANTS UPON PROPERTY BREACHES. In
the event of a breach of a representation or warranty under ARTICLE VI or of
a covenant under SECTION 7.5, 7.6, 7.7, 7.8, 7.16, 7.22 or 7.26 (which
relates to a Property and which does not have a Material Adverse Effect (a
"Property Breach")), or if there are environmental disclosures concerning a
Property contained in Schedule 5, Borrower shall be required to demonstrate
financial covenant compliance under applicable provisions of Article VII both
with and without the affected Property for as long as such breach or
condition shall exist.
7.31. RELEASE OF LIENS ON UNENCUMBERED ASSETS . Borrower shall cause
the release of any Liens existing as of the date hereof on Unencumbered
Assets no later than October 31, 1996, and upon such release shall deliver a
certification of an Authorized Officer which confirms that such releases have
been recorded.
The occurrence of any one or more of the following events shall
constitute a Default:
8.1. Nonpayment of any principal payment on any Note when due and
payable.
8.2. Nonpayment of (i) interest upon any Note, any Commitment Fee,
Administrative Agent's Fee or Facility Letter of Credit Fee, under any of the
Loan Documents within five (5) Business Days after the same becomes due or
(ii) any other payment Obligation under any of the Loan Documents within five
(5) Business Days of Borrower's receipt of written notice.
8.3. The breach of any of the terms or provisions of SECTIONS 7.1(iii),
(iv) and (v), 7.2(ii), 7.6(i) (to the extent such breach relates to a
cancellation of an insurance policy or Borrower's failure to pay the required
premium to renew a policy), 7.6(ii), 7.10, 7.11, 7.12, 7.13, 7.14, 7.16,
7.18, 7.20, 7.21 or 7.25(i) and (ii), or a breach of any of the terms or
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provisions of SECTION 7.1 (other than as set forth above) which remains
uncured for ten (10) business days.
8.4. Any representation or warranty made or deemed made by or on behalf
of the Borrower or any of its Subsidiaries to the Lenders or the
Administrative Agent under or in connection with this Agreement (other than
SECTION 6.24 and a Property Breach unless such breach causes a Default under
another provision of this Article VIII), any Loan, or any 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.
8.5. The breach (other than a breach which constitutes a Default under
SECTION 8.1, 8.2, 8.3 or 8.4 and other than a Property Breach) of any of the
other terms or provisions of this Agreement which is not remedied within
thirty (30) days or ninety (90) days, for a breach which is curable but
cannot be cured within 30 days but is being diligently cured, after the
earlier to occur of the breach or receipt of written notice from the
Administrative Agent or any Lender.
8.6. Failure of the Borrower, any Qualifying Investment Affiliate (to
the extent the Indebtedness is recourse to Borrower or any Subsidiary) or any
of its Subsidiaries to pay when due (after applicable cure periods) any
Indebtedness aggregating in excess of $5,000,000 for which liability is not
limited to specific pledged collateral.
8.7. The Borrower, any Qualifying Investment Affiliate that is not a
Subsidiary having a Market Capitalization which is more than 3% of Market
Capitalization,or any Subsidiary having more than $10,000,000 of Market
Capitalization 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 as a bankrupt or insolvent, or seeking dissolution, winding up,
liquidation, reorganization, arrangement, adjustment or composition of it or
its debts under any law relating to bankruptcy, insolvency or reorganization
or relief of debtors or fail to file an answer or other pleading denying the
material allegations of any such proceeding filed against it, (v) take any
corporate action to authorize or effect any of the foregoing actions set
forth in this SECTION 8.7, (vi) fail to contest in good faith any appointment
or proceeding described in SECTION 8.8 or (vii) not pay, or admit in writing
its inability to pay, its debts generally as they become due.
8.8. A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower, any Qualifying Investment Affiliate that
is not a Subsidiary having a Market Capitalization which is more than 3% of
Market Capitalization, or any Subsidiary having more than $10,000,000 of
Market Capitalization or any Substantial Portion of its Property, or a
proceeding described in SECTION 8.7(iv) shall be instituted against the
Borrower any Qualifying Investment Affiliate or any such Subsidiary and such
appointment continues
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undischarged or such proceeding continues undismissed or unstayed for a
period of sixty (60) consecutive days.
8.9. 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 Properties of the Borrower and its
Subsidiaries and Qualifying Investment Affiliates which, when taken together
with all other Property of the Borrower and its Subsidiaries and Qualifying
Investment Affiliates 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.
8.10. The Borrower or any of its Subsidiaries or any Qualifying
Investment Affiliate shall fail within sixty (60) days to pay, bond or
otherwise discharge any judgments or orders for the payment of money in an
amount which, when added to all other judgments or orders outstanding against
the Borrower or any Subsidiary or any Qualifying Investment Affiliate would
exceed $10,000,000 in the aggregate, which have not been stayed on appeal or
otherwise appropriately contested in good faith, unless the liability is
insured against and the insurer has not challenged coverage of such liability.
8.11. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan, the PBGC or other
party that it has incurred withdrawal liability or is in default of payments
to such Multiemployer Plan in an amount which, when aggregated with all other
amounts required to be paid to Multiemployer Plans by the Borrower or any
other member of the Controlled Group as withdrawal liability (determined as
of the date of such notification) or amounts in default, exceeds $250,000 or
requires payments exceeding $100,000 per annum.
8.12. The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan or the PBGC or
other party 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
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 $250,000 per year.
8.13. (i) A Reportable Event shall occur with respect to a Plan, or
(ii) any Plan shall incur an accumulated funding deficiency (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, or
fail to make a required installment payment on or before the due date under
Section 412 of the Code or Section 302 of ERISA, or (iii) Borrower or a
member of the Controlled Group shall have engaged in a nonexempt prohibited
transaction under Section 4975 of the Code or Section 406 of ERISA, or (iv)
Borrower or any member of the Controlled Group shall fail to pay when due an
amount
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which it shall have become liable to pay to the PBGC, or any Plan, any
Multiemployer Plan, or (v) Borrower or any member of the Controlled Group
shall have received a notice from the PBGC of its intention to terminate a
Plan or to appoint a trustee to administer a Plan, or Multiemployer Plan, or
a condition exists by reason of which the PBGC would be entitled to obtain a
decree adjudicating that a Plan must be terminated, or (vi) any other event
or condition shall occur or exist with respect to any employee benefit plan
(as defined in SECTION 3(3) of ERISA) or Plan or any Multiemployer Plan,
which could reasonably be expected to subject Borrower or any member of the
Controlled Group to any tax, penalty or other liability or the imposition of
any lien or security interest on Borrower or any member of the Controlled
Group, provided, however, that any event or circumstance in SECTIONS 8.13(i)
through (vi) shall only be an Event of Default if it would result in
liability to Borrower in excess of $250,000 per year; or (vii) the assets of
Borrower become or are deemed to be assets of an employee benefit plan (as
defined in Section 3(3) of ERISA or a plan as defined in Section 4975 of the
Code). No Default under this Section 8.13 shall be deemed to have been or
be waived or corrected because of any disclosure by Borrower.
8.14. Failure to remediate within the time period required by law or
governmental order, (or within a reasonable time in light of the nature of
the problem if no specific time period is so established), environmental
problems in violation of applicable law (i) related to Properties of the
Borrower and its Subsidiaries and the Qualifying Investment Affiliates if the
affected Properties have an aggregate book value in excess of $10,000,000 or
(ii) where the estimated cost of remediation is in the aggregate in excess of
$500,000, in each case after all administrative hearings and appeals have
been concluded.
8.15. The occurrence of any default under any Loan Document other than
this Agreement or the breach of any of the terms or provisions of any Loan
Document other than this Agreement, which default or breach continues beyond
any period of grace therein provided.
ARTICLE IX
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
9.1. ACCELERATION. If any Default described in Section 8.7 or 8.8
occurs with respect to the Borrower or any Subsidiary or Qualifying
Investment Affiliate, the obligations of the Lenders to make Loans and of the
Issuing Bank to issue Facility Letters of Credit 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 and is continuing, the
Required Lenders may terminate or suspend the obligations of the Lenders to
make Loans hereunder and to issue Facility Letters of Credit, or declare the
Obligations to be due and payable, or both, whereupon the Obligations shall
become immediately due and payable, upon written notice to the Borrower.
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In addition to the foregoing, following the occurrence and during the
continuance of a Default and so long as any Facility Letter of Credit has not
been fully drawn and has not been cancelled or expired by its terms, upon
demand by the Administrative Agent the Borrower shall establish and deposit
in the Letter of Credit Collateral Account cash in an amount equal to the
aggregate undrawn face amount of all outstanding Facility Letters of Credit
and all fees and other amounts due or which may become due with respect
thereto. The Borrower shall have no control over funds in the Letter of
Credit Collateral Account, which funds will be invested by the Administrative
Agent from time to time at its discretion in certificates of deposit of First
Chicago having a maturity not exceeding 30 days. Such funds shall be
promptly applied by the Administrative Agent to reimburse any Issuing Bank
for drafts drawn from time to time under the Facility Letters of Credit.
Such funds, if any, remaining in the Letter of Credit Collateral Account
following the payment of all Obligations in full shall, unless Administrative
Agent is otherwise directed by a court of competent jurisdiction, be promptly
paid over to the Borrower.
If, within forty-five (45) days after acceleration of the maturity of
the Obligations or termination of the obligations of the Lenders to make
Loans hereunder or to issue Facility Letters of Credit as a result of any
Default (other than any Default as described in SECTION 8.7 or 8.8 with
respect to the Borrower) and before any judgment or decree for the payment of
the Obligations shall have been obtained or entered, the Required Lenders (in
their sole discretion) may direct, the Administrative Agent shall, by notice
to the Borrower, rescind and annul such acceleration and/or termination.
9.2. AMENDMENTS, WAIVERS, DECISIONS. Subject to the provisions of this
ARTICLE IX, the Required Lenders (or the Administrative Agent with the
consent or direction in writing of the Required Lenders) and the Borrower may
enter into agreements supplemental hereto for the purpose of adding or
modifying any provisions to the Loan Documents or changing in any manner the
rights of the Lenders or the Borrower hereunder, releasing any Restricted
Unencumbered Assets from the Negative Pledge Agreements, if applicable or
waiving any Default hereunder; PROVIDED, HOWEVER, that no such supplemental
agreement shall, without the consent of all Lenders:
(i) Extend the Facility Termination Date or forgive all or any portion
of the principal amount of any Loan or accrued interest thereon or
the Commitment Fee, reduce the Applicable Margins on the
underlying interest rate options or otherwise modify or add to
such interest rate options, or extend the time of payment of any
of the Obligations.
(ii) Reduce the percentage specified in the definition of Required
Lenders or change any provision that currently requires an
approval from the Required Lenders, all Lenders or the specific
Lender affected, to approval by a different standard.
(iii) Increase the amount of the Aggregate Commitment.
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(iv) Permit the Borrower to assign its rights under this Agreement.
(v) Amend SECTION 2.2, 2.3, 3.8(a), 12.2, or this SECTION 9.2.
(vi) Release or limit the liability of Borrower or any guarantor with
respect to the Obligations.
No amendment of any provision of this Agreement relating to the
Administrative Agent shall be effective without the written consent of the
Administrative Agent, and no amendment increasing the Commitment of any
Lender shall be effective without the written consent of such Lender.
9.3. 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 9.2, 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.
ARTICLE X
GENERAL PROVISIONS
10.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties
of the Borrower contained in this Agreement shall survive delivery of the
Notes and the making of the Loans herein contemplated.
10.2. 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.
10.3. TAXES. Any taxes (excluding federal, state and local income or
franchise or other similar 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.
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10.4. 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.
10.5. ENTIRE AGREEMENT. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Administrative Agent, the
Documentation Agent and the Lenders and supersede all prior commitments,
agreements and understandings among the Borrower, the Administrative Agent,
the Documentation Agent and the Lenders relating to the subject matter
thereof, except for the agreement of the Borrower to pay certain fees to the
Administrative Agent and the Documentation Agent and the agreement of the
Administrative Agent to pay certain fees to the Lenders.
10.6. 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.
10.7. EXPENSES; INDEMNIFICATION. The Borrower shall reimburse the
Arrangers and Administrative Agent on demand for any costs, and reasonable
out-of-pocket expenses (including, without limitation, all reasonable fees
for consultants and reasonable fees and expenses for attorneys for the
Arrangers and Administrative Agent (without duplication), which attorneys may
be employees of the Arrangers or Administrative Agent) paid or incurred by
the Arrangers (whether in their capacity as arrangers, or, in the case of
First Chicago, in its capacity as Administrative Agent) in connection with
the preparation, negotiation, execution, delivery, amendment or modification
of the Loan Documents. The Borrower also agrees to reimburse the Arrangers,
Administrative Agent, and the Lenders for any costs, internal charges and
reasonable out-of-pocket expenses (including, without limitation, all
reasonable fees and expenses for attorneys for the Arrangers, Administrative
Agent and the Lenders, which attorneys may be employees of the Arrangers or
the Lenders) paid or incurred by the Arrangers or Administrative Agent
(whether in their capacity as arrangers, or, in the case of First Chicago, in
its capacity as 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, the Arrangers and each Lender and their directors,
officers and employees against all losses, claims, damages, penalties,
judgments, liabilities and reasonable expenses (including, without
limitation, all expenses of litigation or preparation therefor whether or not
such entity 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,
other than liability arising from the gross negligence or wilful misconduct
of the party being indemnified. The obligations of the Borrower under this
SECTION 10.7 shall survive for two years after the termination of this
Agreement.
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10.8. 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.
10.9. 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 Borrower and all its Subsidiaries.
10.10. 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.
10.11. NONLIABILITY OF LENDERS, ARRANGERS, ADMINISTRATIVE AGENT AND
DOCUMENTATION AGENT. The relationship between the Borrower, on the one hand,
and the Lenders, the Arrangers, the Administrative Agent, and the
Documentation Agent on the other, shall be solely that of borrower and
lender. Neither the Administrative Agent, the Documentation Agent, the
Arrangers nor any Lender shall have any fiduciary responsibilities to the
Borrower. Neither the Administrative Agent, the Documentation Agent, the
Arrangers nor any Lender undertakes any responsibility to the Borrower to
review or inform the Borrower of any matter in connection with any phase of
the Borrower's business or operations. Neither the Arrangers nor the
Documentation Agent shall have any responsibilities to the Borrower or
Lenders under this Agreement except to the extent, if any, expressly for
herein.
10.12. PUBLICITY. Each Lender and each Arranger shall have the right
to do a tombstone publicizing the transaction contemplated hereby upon the
consent of the Borrower which shall not be unreasonably withheld.
10.13. BROKERS. Borrower, Administrative Agent and Documentation Agent
each hereby represent and warrant that no brokers or finders were used in
connection with procuring the financing contemplated hereby and Borrower
hereby agrees to indemnify and save the Administrative Agent, the
Documentation Agent and each Lender harmless from and against any and all
liabilities, losses, costs and expenses (including attorneys' fees or court
costs) suffered or incurred by the Administrative Agent, the Documentation
Agent or any Lender as a result of any claim or assertion by any party
claiming by, through or under Borrower, its Subsidiaries or any Investment
Affiliate that it is entitled to compensation in connection with the
financing contemplated hereby. Administrative Agent hereby agrees to
indemnify and save Borrower harmless from and against any and all
liabilities, losses, costs and expenses (including attorneys' fees or court
costs) suffered or incurred by Borrower as a result of any claim or assertion
by any party claiming by, through or under Administrative Agent that it is
entitled to compensation in connection with the financing contemplated
hereby. Documentation Agent hereby agrees to indemnify and save Borrower
harmless from
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and against any and all liabilities, losses, costs and expenses (including
attorneys' fees or court costs) suffered or incurred by Borrower as a result
of any claim or assertion by any party claiming by, through or under
Documentation Agent that it is entitled to compensation in connection with
the financing contemplated hereby.
10.14. CONFIDENTIALITY. With respect to the financial statements and
other information delivered pursuant to SECTION 7.1, and any other
information obtained by any Lender or any assignee of any Lender pursuant to
this SECTION 10.14 or otherwise, each Lender and each assignee of any Lender
agree that, to the extent that such information therein contained has not
theretofore otherwise been disclosed in such a manner as to render such
information no longer confidential, such Lender and such assignee will employ
reasonable procedures reasonably designed to maintain the confidential nature
of the information therein contained; provided that anything herein contained
to the contrary notwithstanding, any Lender or its assignee may disclose or
disseminate such information to: (a) its employees, agents, attorneys and
accountants who would ordinarily have access to such information in the
normal course of the performance of their duties; (b) such third parties as
such Lender may deem reasonably necessary in connection with or in response
to (i) compliance with any law, ordinance or governmental order, regulation,
rule, policy, subpoena, investigation, regulatory authority request or
requests, or (ii) any order, decree, judgment, subpoena, notice of discovery
or similar ruling or pleading issued, filed, served or purported on its face
to be issued, filed or served by or under authority of any court, tribunal,
arbitration board of any governmental or industry agency, commission,
authority, board or similar entity or in connection with any proceeding, case
or matter pending (or on its face purported to be pending) before any court,
tribunal, arbitration board or any governmental agency, commission,
authority, board or similar entity; and (c) any prospective assignee of or
Participant in such Lender's interest, provided such prospective assignee or
Participant agrees in writing to be bound by these provisions.
10.15. CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING
A CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE
WITH THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF
ILLINOIS, BUT GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
10.16. 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 OF THE 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
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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.
10.17. 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 XI
THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS
11.1. APPOINTMENT. Subject to the provisions of Section 11.11, 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 agent of such Lender. The
Administrative Agent agrees to act as such upon the express conditions
contained in this ARTICLE XI. The Administrative Agent shall not have a
fiduciary relationship in respect of the Borrower or any Lender by reason of
this Agreement. The Administrative Agent agrees to administer this Facility
in the same manner as it administers similar facilities for its own account.
11.2. 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.
11.3. 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 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
and except for liability of Administrative Agent for breach of an express
agreement made by the Administrative Agent herein to take or not take actions
based on the approval or direction of a requisite number of Lenders.
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11.4. 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 V, 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 (provided that Administrative Agent shall be
obligated to furnish copies of the Loan Documents to the Lenders); or (v) the
value, sufficiency, creation, perfection or priority of any interest in any
collateral security. The Administrative Agent shall have no duty to disclose
to the Lenders information that is not required to be furnished by the
Borrower to the Administrative Agent at such time, but is voluntarily
furnished by the Borrower to the Administrative Agent in its individual
capacity.
11.5. ACTION ON INSTRUCTIONS OF LENDERS. The Administrative Agent
shall in all cases be fully protected in acting, or in refraining from
acting, hereunder and under any other Loan Document in accordance with
written instructions signed by the Required Lenders unless such action or
inaction requires the consent of all the Lenders or an individual Lender not
included in the direction of the Required Lenders pursuant to this Agreement,
and such instructions and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders and on all holders of Notes. The
Administrative Agent shall be fully justified in failing or refusing to take
any action hereunder and under any other Loan Document unless it shall first
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.
11.6. 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 so long as it exercises reasonable care in the
selection of such parties, the Administrative Agent 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 parties. 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.
11.7. 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.
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11.8. ADMINISTRATIVE AGENT'S REIMBURSEMENT AND INDEMNIFICATION. The
Lenders agree to reimburse and indemnify the Administrative Agent (in its
capacity as Administrative Agent but 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 including reasonable out-of-pocket
expenses in connection with the preparation, execution, delivery of the Loan
Documents, (ii) for any other reasonable out-of-pocket expenses incurred by
the Administrative Agent on behalf of the Lenders, in connection with the
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 gross negligence or willful
misconduct of the Administrative Agent or an action relating to a dispute
which is solely between the Administrative Agent and one or more Lenders in
which the other Lender prevails, or an action taken or not taken by
Administrative Agent contrary to the express requirements contained herein
pertaining to the requisite number of Lenders required to approve or direct
certain actions. The obligations of the Lenders under this SECTION 11.8
shall survive payment of the Obligations and termination of this Agreement.
11.9. RIGHTS AS A LENDER.
(a) In the event the Administrative Agent is a Lender, the
Administrative Agent shall have the same rights and powers and the same
duties and obligations hereunder and under any other Loan Document as any
Lender and may exercise the same as though it were not the Administrative
Agent, and the term "LENDER" or "LENDERS" shall, 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 and any Lender may accept deposits from, lend money to,
and generally engage in any kind of trust, debt, equity or other transaction,
in addition to those contemplated by this Agreement or any other Loan
Document, with the Borrower or any of its Subsidiaries in which the Borrower
or such Subsidiary is not restricted hereby from engaging with any other
Person.
(b) In the event the Documentation Agent is a Lender, the Documentation
Agent shall have the same rights and powers and the same duties and
obligations hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Documentation Agent, and the term
"LENDER" or "LENDERS" shall, at any time when the Documentation Agent is a
Lender, unless the context otherwise indicates, include the Documentation
Agent in its individual capacity. The Documentation 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.
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11.10. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, the
Documentation 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, the Documentation 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.
11.11. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders and the
Borrower, such resignation in either case to be effective upon the
appointment of a successor Administrative Agent or, if no successor
Administrative Agent has been appointed, sixty days after the retiring
Administrative Agent gives notice of its intention to resign. Upon any such
resignation, the Required Lenders shall have the right to appoint upon the
confirmation of the Borrower if such successor is not a Lender, 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 forty-five 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 upon the confirmation of the Borrower (if required). If
the Administrative Agent has resigned and no successor Administrative Agent
has been appointed and confirmed (if required) within 60 days, the Lenders
shall 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 either a
Lender or a commercial bank (or a subsidiary thereof) having capital and
retained earnings of at least $500,000,000 that is generally in the business
of making loans comparable to the Loans made under this Facility, except that
if the successor Administrative Agent is a subsidiary of a bank, such capital
and retained earnings requirement shall apply only to the parent bank. 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 or removed Administrative Agent. Upon
the effectiveness of the resignation of the Administrative Agent, the
resigning Administrative Agent and the successor Administrative Agent shall
pro rate any agency fees, and the resigning Administrative Agent shall be
discharged from its duties and obligations hereunder and under the Loan
Documents. 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.
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11.12. 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.
11.13. 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.
11.14. 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 14 of this
agreement. Administrative Agent shall deliver to Lenders within 15 Business
Days following receipt, copies of all financial statements, certificates and
notices received regarding the Borrower's unsecured debt rating except to the
extent such items are required to be furnished directly to the Lenders by
Borrower hereunder. Within fifteen 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.
11.15. 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 Required Lenders, each affected
Lender or all Lenders shall be immediately suspended until such time as the
Lender is no longer a Defaulting Lender. If a Defaulting Lender has failed
to fund its Percentage of any Advance and until such time as such Defaulting
Lender subsequently funds its Percentage of such Advance, all Obligations
owing to such Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior payment in full
of all principal of, interest on and fees relating to the Loans funded by the
other Lenders in connection with any such Advance in which the Defaulting
Lender has not funded its Percentage (such principal, interest and fees being
referred to as "SENIOR LOANS" for the purposes of this section). All amounts
paid by the Borrower and otherwise due to be applied to the Obligations owing
to such Defaulting Lender pursuant to the terms hereof shall be distributed
by the Administrative Agent to the other Lenders in accordance with their
respective Percentages (recalculated for the purposes hereof to exclude the
Defaulting Lender) until all Senior Loans have been paid in full. At that
point, the "Defaulting Lender" shall no longer be deemed a Defaulting Lender.
After the Senior Loans have been paid in full equitable adjustments will be
made in connection with future payments by the Borrower to the extent a
portion of the Senior Loans had been repaid with amounts that otherwise would
have been distributed to a Defaulting Lender but
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for the operation of this SECTION 11.15. 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 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 which are subject to the
consent or approval of the Required Lenders or all Lenders.
ARTICLE XII
RATABLE PAYMENTS
12.1. Intentionally Deleted.
12.2. RATABLE PAYMENTS. If any Lender has payment made to it upon
its Loans (other than payments received pursuant to SECTIONs 4.1, 4.2 or 4.4)
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 XIII
BENEFIT OF AGREEMENT: ASSIGNMENTS: PARTICIPATIONS
13.1. 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 successors and permitted 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 13.3. Notwithstanding clause (ii) of this SECTION
13.1, any Lender may at any time, without the consent of the Borrower 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
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<PAGE>
the transfer is filed with the Administrative Agent. Any assignee or
transferee of a Note agrees by acceptance thereof to be bound by all the
terms and provisions of the Loan Documents. Any request, authority or
consent of any Person, who at the time of making such request or giving such
authority or consent is the holder of any Note, shall be conclusive and
binding on any subsequent holder, transferee or assignee of such Note or of
any Note or Notes issued in exchange therefor.
13.2. PARTICIPATIONS.
13.2.1. PERMITTED PARTICIPANTS; EFFECT. Any Lender, in the
ordinary course of its business and in accordance with applicable law,
at any time, may sell 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. 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.
13.2.2. 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 or postpones any date fixed
for any regularly-scheduled payment of principal of, or interest or
fees on, any such Loan or Commitment or releases any guarantor of any
such Loan or releases any substantial portion of collateral, if any,
securing such Loan.
13.3. ASSIGNMENTS.
13.3.1. PERMITTED ASSIGNMENTS. Any Lender, in the ordinary course
of its business and in accordance with applicable law, at any time, may
assign all or any portion (greater than or equal to $10,000,000 per
assignee) of its rights and obligations under the Loan Documents, provided
that unless such Lender sells its entire interest, it must maintain a
minimum Commitment of $10,000,000 (exclusive of any portion of its
Commitment in which it has sold a participation interest other than
participations where the Lender, Documentation Agent or Administrative
Agent retains full voting control). Notwithstanding the foregoing
provision, any assignment by a Lender to another Lender in the Facility
or an Affiliate thereof or an Affiliate of
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<PAGE>
the assigning Lender shall not be subject to either the $10,000,000
minimum assignment amount or the requirement set forth below regarding
Borrower's consent or the fee in Section 13.3.2(ii). If the Aggregate
Commitment is reduced the references to $10,000,000 contained in this
Section 13.3.1 shall be reduced proportionately. Any Person to whom
such rights and obligations are assigned is a "PURCHASER". Such
assignment shall be substantially in the form of EXHIBIT D hereto or
in such other form as may be agreed to by the parties thereto (the
"Assignment"). So long as no Default has occurred and is continuing,
Borrower's consent shall be required for any assignment provided that
if such assignment is to an entity that is a "Qualified Lender", such
consent shall not be unreasonably denied or delayed. "QUALIFIED LENDER"
shall mean an institution with assets over $5,000,000,000.00 that is
generally in the business of making loans comparable to the Loans made
under this Facility and that maintains an office in the United States.
Any Lender which is an Arranger, Documentation Agent, or Administrative
Agent may make an assignment only if it first resigns its status as
Arranger, Documentation Agent, or Administrative Agent as the case may
be or if it obtains the consent of Borrower and any Lender which after
such assignment would have a Percentage greater than the new Percentage
of the Lender making the assignment. Notwithstanding any other provision
set forth in this Agreement, any Lender may at any time create a security
interest in all or any portion of its rights under this Agreement
(including, without limitation, amounts owing to it in favor of any
Federal Reserve Bank in accordance with Regulation A of the Board of
Governors of the Federal Reserve System), provided that no such security
interest or the exercise by the secured party of any of its rights
thereunder shall release Lender from its funding obligations hereunder
and such Lender shall retain all voting rights.
13.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the
Administrative Agent and the Borrower of a notice of assignment,
substantially in the form attached as EXHIBIT I to EXHIBIT D hereto
(a "NOTICE OF ASSIGNMENT"), together with any consents required by
SECTION 13.3.1, and (ii) payment of a $3,000 fee to the Administrative
Agent for processing such assignment, 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 13.3.2, the transferor Lender,
the Administrative Agent and the Borrower shall make
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<PAGE>
appropriate arrangements so that replacement Notes are issued to such
transferor Lender, if applicable, 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.
13.4. DISSEMINATION OF INFORMATION. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "TRANSFEREE") and
any prospective Transferee any and all information in such Lender's
possession concerning the creditworthiness of the Borrower and its
Subsidiaries, provided that such Transferees agree to maintain the
confidentiality of any information that is confidential in the manner set
forth in SECTION 10.14.
13.5. TAX TREATMENT. If any interest in any Loan Document is
transferred to any Transferee which is organized under the laws of any
jurisdiction other than the United States 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 2.17.
13.6. POSSESSION OF LOAN DOCUMENTS AND REGISTER. The Administrative
Agent shall keep and maintain complete and accurate files and records of all
matters pertaining to the Loan. Upon reasonable prior notice to the
Administrative Agent by any Lender, the Administrative Agent will make
available to such Lender and their representatives and agents, the files and
records relating to the Facility for inspection and copying during normal
business hours. The Administrative Agent shall also maintain at its address
specified pursuant to Article XIV, a copy of each Assignment delivered to and
accepted by it and a listing of the names and addresses of the Lenders, the
amount of each Lender's Commitment and Percentage (the "Register"). The
entries in the Register shall be conclusive and binding for all purposes,
absent manifest error, and Borrower, Administrative Agent, and the Lenders
may treat each person or entity whose name is recorded in the Register as a
Lender hereunder for all purposes of this Agreement. The Register shall be
available for inspection and copying by Borrower or any Lender during normal
business hours upon reasonable prior notice to the Administrative Agent.
ARTICLE XIV
NOTICES
14.1. 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
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<PAGE>
when received; any notice, if transmitted by telex or facsimile, shall be
deemed given when transmitted (answerback confirmed in the case of telexes).
14.2. CHANGE OF ADDRESS. 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.
14.3. ACCOUNTS. The Administrative Agent shall deliver to each Lender
and Borrower, and each Lender shall deliver to Administrative Agent wiring
instructions containing account information for purposes of the payment of
sums due under this Agreement.
ARTICLE XV
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
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<PAGE>
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 Lenders and the Administrative
Agent have executed this Agreement as of the date first above written.
CENTERPOINT PROPERTIES CORPORATION,
a Maryland corporation
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
401 N. Michigan Avenue, Suite 3000
Chicago, IL 60611
Attention: Paul S. Fisher
Telephone: (312) 346-5600
Facsimile: (312) 456-7696
with a copy to:
Ungaretti & Harris
3500 Three First National Plaza
Chicago, IL 60602
Attention: Richard A. Ungaretti
Telephone: (312) 977-4400
Facsimile: (312) 977-4405
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<PAGE>
COMMITMENT:
$25,000,000 THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent
PERCENTAGE:
By:
18.5185185185% -----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
One First National Plaza
Chicago, Illinois 60670
Attention: Kevin L. Gillen
Suite 0151, 14th Floor
Telephone: (312) 732-1486
Facsimile: (312) 732-1117
COMMITMENT: LEHMAN BROTHERS HOLDINGS INC.,
D/B/A Lehman Capital, A Division of
$25,000,000 Lehman Brothers Holdings Inc.,
Individually and as Documentation Agent
By:
PERCENTAGE: -----------------------------------
Print Name:
18.5185185185% ---------------------------
Title:
--------------------------------
3 World Financial Center
New York, New York 10285-1200
Attention: Allyson V. Bailey, Floor 12
Telephone: (212) 526-5849
Facsimile: (212) 526-5484
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<PAGE>
with a copy to:
3 World Financial Center
New York, New York 10285-1200
Attention: Mr. Frank Gilhool, Floor 9
Telephone: (212) 526-6970
Facsimile: (212) 528-8986
With a copy to:
Hatfield Philips Inc.
245 Peachtree Center Avenue
Marquis One Tower, Suite 2701
Atlanta, Georgia 30303
Attention: Mr. Greg Winchester
Telephone: (404) 420-5600
Facsimile: (404) 420-5610
COMMITMENT: THE FIRST NATIONAL BANK OF BOSTON
$25,000,000
By:
-----------------------------------
PERCENTAGE: Name: Lori Y. Litow
Title: Vice President
18.5185185185%
Notice Address:
The First National Bank of Boston
100 Federal Street
Boston, Massachusetts 02110
Attention: Real Estate Department
Facsimile: (617) 434-7108
with a copy to:
The First National Bank of Boston
115 Perimeter Center Place NE
Suite 500
Atlanta, Georgia 30346
Attention: Lori Y. Litow
Telephone: (770) 390-6544
Facsimile: (770) 390-8434
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<PAGE>
COMMITMENT: NATIONSBANK, N.A. (SOUTH)
$25,000,000
By:
----------------------------------
PERCENTAGE: Name: Donna Friedel
Title: Senior Vice President
18.5185185185%
Notice Address:
Nationsbank Plaza
600 Peachtree, 6th Floor
Atlanta, Georgia 30308
Attention: Donna Friedel
Telephone: (404) 607-4107
Facsimile: (404) 607-4145
COMMITMENT: BANK OF AMERICA ILLINOIS
$25,000,000
By:
----------------------------------
PERCENTAGE: Name: George W. Kirtland, Jr.
Title: Vice President
18.5185185185%
Notice Address:
Bank of America, Illinois
231 S. LaSalle Street, 15th Floor
Chicago, Illinois 60697
Attention: George W. Kirtland, Jr.
Telephone: (312) 828-7230
Facsimile: (312) 974-4970
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<PAGE>
COMMITMENT: LASALLE NATIONAL BANK
$10,000,000
By:
-----------------------------------
PERCENTAGE: Name:
Title:
7.0740740740%
Notice Address:
LaSalle National Bank
135 S. LaSalle Street, Suite 1225
Chicago, Illinois 60603
Attention: John Hein
Telephone: (312) 781-8620
Facsimile: (312) 904-6467
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<PAGE>
EXHIBIT A
NOTE
$
------------------
CenterPoint Properties Corporation, a Maryland corporation (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 Unsecured Revolving Credit Agreement
hereinafter referred to, 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
remaining unpaid 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 Unsecured Revolving Credit Agreement (as the same may be
amended or modified the "Agreement"), dated as of October ____, 1996 among
the Borrower, The First National Bank of Chicago, individually and as
Administrative Agent, Lehman Brothers Holdings Inc., individually and as
Document Agent and the other Lenders named therein, to which Agreement
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.
If there is an Unmatured Default or Default under the Agreement or any
other Loan Document and Administrative Agent exercises the remedies provided
under the Agreement and/or any of the Loan Documents for the Lenders, then in
addition to all amounts recoverable by the Administrative Agent and the
Lenders under such documents, the Administrative Agent and the Lenders shall
be entitled to receive reasonable attorneys fees and expenses incurred by
Administrative Agent and the Lenders in connection with the exercise of such
remedies.
Borrower and all endorsers severally waive presentment, protest and
demand, notice of protest, demand and of dishonor and nonpayment of this
Note, 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 for 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.
<PAGE>
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
PROMISSORY NOTE AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED
BEFORE A JUDGE AND NOT BEFORE A JURY.
CENTERPOINT PROPERTIES CORPORATION
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
-2-
<PAGE>
SCHEDULE OF LOANS AND PAYMENTS OF PRINCIPAL
TO
NOTE OF CENTERPOINT PROPERTIES CORPORATION
DATED __________________, 1996
<TABLE>
<CAPTION>
Principal Maturity Maturity
Amount of Interest Principal Unpaid
Date Type of Loan Rate Period Amount Paid Balance
- ---- ---- -------- ---- ----------- ----------- -------
<S> <C> <C> <C> <C> <C> <C>
</TABLE>
<PAGE>
EXHIBIT B
October 24, 1996
The Administrative Agent and the Lenders who are parties to
the Credit Agreement described below
Gentlemen/Ladies:
We are counsel for CenterPoint Properties Corporation, a Maryland
corporation (the "Borrower"), and have represented the Borrower in connection
with its execution and delivery of an Unsecured Revolving Credit Agreement dated
as of October 23, 1996 (the "Agreement") among the Borrower, The First National
Bank of Chicago, individually and as Administrative Agent, Lehman Brothers
Holdings Inc., individually and as Documentation Agent, and the Lenders named
therein, providing for loans in an aggregate principal amount from time to time
not exceeding $135,000,000 at any one time outstanding. 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 Borrower's articles of incorporation, by-laws and
resolutions, each Subsidiary's articles of incorporation, declaration of trust,
limited partnership agreement, partnership agreement, operating agreement or by-
laws, as the case may be, the Agreement, the Notes, the Officer's Certificate of
the Borrower attached as Exhibit A hereto (the "Officer's Certificate") and such
other certificates of the Borrower and public officials and matters of fact and
law as we deem necessary or appropriate to render this opinion.
Based on the foregoing, and subject to the limitations, qualifications and
assumptions set forth herein, we are of the opinion that:
1. The Borrower is a duly incorporated corporation, and each of its
Subsidiaries and each Qualifying Investment Affiliate is duly formed as a
corporation, limited partnership, limited liability company or real estate
investment trust, as the case may be; and the Borrower, its Subsidiaries and
Qualifying Investment Affiliates are validly existing and in good standing under
the laws of their states of incorporation or formation, and they each have all
requisite authority and power to enter into, and perform their respective
obligations under, the Loan Documents and to conduct business in each
jurisdiction in which they conduct business, except where the failure to be so
licensed or qualified would not have a Material Adverse Effect.
<PAGE>
The Adminstrative Agent and the Lenders
who are parties to the Credit Agreement
October 24, 1996
Page 2
2. The execution and delivery of the Agreement and the Notes by the
Borrower and the performance by the Borrower of its obligations under the
Agreement and the Notes have been duly authorized by all necessary corporate
action and/or proceedings on the part of the Borrower and will not:
(a) require the consent of the Borrower's stockholders;
(b) violate (i) any law, rule or regulation of the State of Illinois
or of the United States of America, (ii) the Borrower's articles of
incorporation or by-laws or any Subsidiary's articles of incorporation, by-
laws, limited partnership agreement, partnership agreement, declaration of
trust or operating agreement, as the case may be, or (iii) any order, writ
or decree binding on the Borrower or any of its Subsidiaries or any
indenture, instrument or agreement binding upon the Borrower or any of its
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 Borrower or any of its Subsidiaries.
The opinion set forth in clauses (b)(iii) and (c) above are limited to
orders, writs, decrees, indentures, instruments and agreements that have been
identified to us in the Officer's Certificate, and we express no opinion in
clause (b)(iii) with respect to any violation of any indenture, instrument or
agreement so identified to us based upon any cross-default provision which
relates to a default under an agreement not so identified to us or arising under
or based upon any covenant of a financial or numerical nature or requiring
computation.
3. The Agreement and the Notes have been duly executed and delivered by
the Borrower and constitute legal, valid and binding obligations of the Borrower
enforceable in accordance with their respective terms, subject to bankruptcy,
reorganization, insolvency, fraudulent conveyance and similar laws affecting
creditors' rights generally, and general principles of equity (regardless of
whether the application of such principles is considered in a proceeding in
equity or at law).
<PAGE>
Page 3
4. To our knowledge, there is no litigation or proceeding in any court or
before any Governmental Authority against the Borrower or any of its
Subsidiaries which, if adversely determined, would have a Material Adverse
Effect.
5. No approval, authorization, consent, adjudication or order of, or
registration or filing with, any Governmental Authority, which has not been
obtained or made by the Borrower, is required to be obtained or made by the
Borrower in connection with the execution and delivery of the Agreement and the
Notes, the borrowings under the Agreement or in connection with the payment by
the Borrower of its obligations under the Agreement and the Notes.
6. The payment by the Borrower of all amounts required to be paid with
respect to the Notes in accordance with the terms of the Agreement will not
violate the provisions of any Illinois or federal law limiting or regulating the
payment of interest on obligations.
In rendering the foregoing opinion, we have assumed, but not independently
verified, (a) the genuineness of the signatures and the authority of all persons
signing documents in connection with the matters addressed by this opinion on
behalf of parties other than the Borrower, (b) the authenticity of all documents
submitted to us as originals and (c) the conformity to authentic original
documents of all documents submitted to us as certified, conformed or
photostatic copies.
We are admitted to the Bar of the State of Illinois and, except as set
forth below, we express no opinion regarding the laws of any other jurisdiction
other than the federal law of the United States of America. Insofar as our
opinion in paragraph 1 relates to matters of Indiana law, our opinion is given
in reliance upon an examination of the published compilation of the Indiana
Revised Uniform Limited Partnership Act contained in the Indiana Code, Title 23,
Article 16 (West 1995). In so far as our opinion in paragraphs 1 and 2 relates
to matters of Maryland law, our opinion is given in reliance upon the opinion of
Gordon, Feinblatt, Rothman, Hoffberger & Hollander, LLC dated the date hereof.
This opinion is delivered to you for your own use and benefit in connection
with the transactions contemplated by the Agreement and is not to be relied upon
by any other person (other than Participants and the Lenders' permitted
assignees) or for any other purpose. We assume no obligation to supplement this
opinion if any applicable laws
<PAGE>
Page 4
change after the date hereof or if we become aware of any facts that might
change the opinions expressed herein after the date hereof.
Very truly yours,
Ungaretti & Harris
<PAGE>
[LETTERHEAD]
October 24, 1996
Ungaretti & Harris
3500 Three First National Plaza
Chicago, Illinois 60602-4282
Re: CenterPoint Properties Corporation
CP Financing Trust
Ladies and Gentlemen:
We have acted as special Maryland counsel to your firm in connection with
your opinion to be rendered with respect to the execution and delivery of an
Unsecured Revolving Credit Agreement dated as of October 23, 1996 (the
"Agreement") among CenterPoint Properties Corporation (the "Corporation"), The
First National Bank of Chicago, Lehman Brothers Holdings, Inc., and the various
lenders named therein.
In this connection, we have examined:
a. the amended and restated articles of incorporation of the Corporation;
b. the by-laws of the Corporation,
C. resolutions of the Board of Directors of the
Corporation,
d. the Agreement, and
e. a Certificate of the State Department of Assessments and Taxation of
Maryland dated September 30, 1996 to the effect that the Corporation is in good
standing.
Based upon the foregoing, we are of the opinion that:
1. The Corporation is duly incorporated, validly existing and in good
standing in the State of Maryland.
2. The execution and delivery of the Agreement and the Notes (as defined
therein) by the Corporation and the
<PAGE>
[LETTERHEAD]
Ungaratti & Harris
October 24, 1996
Page 2
performance by the Corporation of its obligations under the Agreement and the
Notes have been duly authorized by all necessary corporate action on the part of
the Corporation and do not violate the Corporation's articles of incorporation
or bylaws.
The parties to the Agreement (other than the Corporation) have also
requested our opinion with respect to the Corporation's related entity, CP
Financing Trust (the "Trust"). In this connection we have examined the
Certificate of the State Department of Assessments and Taxation of Maryland
dated October 8, 1996 to the effect that the Trust is in good standing.
Based on the foregoing, we are of the opinion that the Trust is duly
formed, validly existing and in good standing in the State of Maryland.
Very truly yours,
GORDON, FEINBLATT, ROTHMAN
HOFFBERGER & HOLLANDER, LLC
By: /s/ Edward E. Obstler
-----------------------------------
Edward E. Obstler, Member
<PAGE>
October 24, 1996
The Administrative Agent and the Lenders who are parties to the Credit Agreement
described below
Gentlemen/Ladies:
We are counsel for CenterPoint Properties, Corporation (the "Borrower"),
and have represented the Borrower in connection with its execution and delivery
of an Unsecured Revolving Credit Agreement dated as of October 23, 1996 (the
"Agreement") among the Borrower, The First National Bank of Chicago,
individually and as Administrative Agent, Lehman Brothers Holdings Inc.,
individually and as Documentation Agent, and the Lenders named therein,
providing for loans in an aggregate principal amount from time to time not
exceeding $135,000,000 at any one time outstanding. All capitalized terms used
in this opinion and not otherwise defined shall have the meanings attributed to
them in the Agreement. Pursuant to Section 5.1 of the Agreement, the Borrower
has requested that we provide you with our opinion as to whether the Borrower
should be classified as a real estate investment trust ("REIT") under section
856 of the Internal Revenue Code of 1986, as amended (the "Code").
In this connection. we have examined:
a. the amended and restated articles of incorporation, by-laws and
organizational documents of the Borrower; and
b. such other documents as we have deemed relevant for the purpose of
rendering the opinions set forth herein, including certifications as
to certain matters of fact by a responsible officer of the Borrower
(the "Officer's Certificate").
Based upon the foregoing, we are of the opinion that:
1. The Borrower is organized in conformity with the requirements for
qualification as a REIT under the Code.
<PAGE>
CenterPoint Properties Corporation
October 24, 1996
Page 2
2. The Borrower has met the requirements to qualify as a REIT for
calendar years 1994 and 1995. If results of operations for its
current taxable year and subsequent taxable years are in accordance
with expectations set forth in the Officers' Certificate, the Borrower
will continue to so qualify.
Our opinion as expressed herein is based upon the Code, applicable Treasury
regulations adopted thereunder, reported judicial decisions and rulings of the
Internal Revenue Service, all as of the date hereof, It should be noted that
whether the Borrower will qualify as a REIT under the Code in the current
taxable year and future taxable years will depend upon whether the Borrower
continues to meet the various qualification tests imposed under the Code through
actual annual operating results. We express no opinion as to whether the actual
results of the Borrower's operations for any such taxable year will satisfy such
requirements.
This opinion is delivered to you for your own use and benefit in connection
with the transactions contemplated by the Agreement and is not to be relied upon
by any other person (other than Participants and the Lenders' permitted
assignees) or for any other purpose. We assume no obligation to supplement this
opinion if any applicable laws change after the date hereof or if we become
aware of any facts that might change the opinions expressed herein after the
date hereof.
Very truly yours,
Ungaretti & Harris
<PAGE>
CERTIFICATE
THE UNDERSIGNED, PAUL S. FISHER, DOES HEREBY CERTIFY THAT:
1. He is the Chief Financial Officer of CenterPoint Properties
Corporation, a Maryland corporation (the "Company").
2. The Company has elected to be taxed as a real estate investment
trust ("REIT") as of January 1, 1994 under the provisions of Section 856 of
the Internal Revenue Code of 1986, as amended (the "Code"). As of the
effective date of its election, the Company did not have any earnings and
profits within the meaning of the Code. The election has not been terminated
or revoked.
3. The Company's taxable year is the calendar year.
4. Beneficial ownership of the Company is held by 100 or more persons.
The Company intends to take steps reasonably designed to assure that this
will be true for at least 335 days out of the Company's 1996 taxable year and
each subsequent taxable year of 12 months (and a proportional part of any
taxable year of less than 12 months), and is not aware of any facts or
circumstances indicating that such results will not occur.
5. The Company is not now, and has not been at any time during the last
half of its 1996 taxable year, "closely held" within the meaning of Section
856(h) of the Code, providing generally that an entity is closely held if
five or fewer individuals directly or indirectly own (or are deemed to own)
more than 50% by value of the Company's stock. The Company intends to take
steps (including enforcement of ownership limitations set forth in the
Company's amended and restated articles of incorporation and limitations on
the conversion of the Company's convertible subordinated debentures)
reasonably designed to assure that this will be true throughout the last half
of its 1995 taxable year and the last half of every subsequent taxable year.
6. In its 1994 and 1995 taxable years, the Company met the gross income
tests of paragaphs (2), (3) and (4) of Section 856(c) of the Code. The
Company expects to meet such tests in its 1996 taxable year and subsequent
taxable years. In addition:
<PAGE>
a. The Company does not manage any properties under contract with
third parties, and any such management activities in the past did not
produce enough gross income to cause the Company to fail any of the gross
income tests.
b. The Company does not and will not charge rents to any tenant
based in whole or part on the income or profits of such tenant.
c. The Company does not and will not derive rent attributable to
personal property in connection with any lease of real property that would
exceed 15 percent of the total rent from any such lease.
d. The Company does not and will not provide services to any of
its tenants that are not customarily provided to tenants in properties of
a similar class in the geographic market in which the properties are
located.
7. At the close of each calendar quarter beginning with the first
quarter of 1994 and through the end of the most recently completed calendar
quarter, the Company has met the assets tests of Section 856(c)(5) of the
Code. The Company expects to meet such tests at the end of the current
calendar quarter and at the end of each subsequent calendar quarter.
8. The Company's deduction for dividends paid for its 1994 and 1995
taxable years met the requirement of Section 857(a)(1) of the Code, and the
Company expects to meet such requirement for the current taxable year and all
subsequent taxable years.
9. The Company has complied with requirements to collect certain
shareholder information and maintain certain records under Section 857(a)(2)
of the Code for its 1994 and 1995 taxable years, and intends to comply with
such requirements for its 1996 taxable year and all subsequent taxable years.
Ungaretti & Harris may rely upon this Certificate in rendering their
opinion with respect to the Company's eligibility and qualification for
taxation as a REIT.
IN WITNESS WHEREOF, I have executed this Certificate as of the_____ day
of October, 1996.
______________________________________
Paul S. Fisher
Chief Financial Officer
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<PAGE>
EXHIBIT C
COMPLIANCE CERTIFICATE
To: The Administrative Agent and the Lenders
who are parties to the Agreement described below
This Compliance Certificate is furnished pursuant to that certain
Unsecured Revolving Credit Agreement, dated as of October __, 1996 (as
amended, modified, renewed or extended from time to time, the "Agreement")
among CenterPoint Properties Corporation (the "Borrower"), The First National
Bank of Chicago, individually and as Administrative Agent, Lehman Brothers
Holdings Inc., individually and as Documentation Agent, and the Lenders named
therein. 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 Chief Financial Officer 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 and Qualifying Investment
Affiliates during the accounting period covered by the financial statements
attached (or most recently delivered to the Administrative Agent if none are
attached).
3. The examinations described in paragraph 2 did not disclose, and I
have no knowledge of, the existence of any condition or event which
constitutes a Material Adverse Effect, 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 Compliance Certificate, except as set
forth below.
4. Schedule I (if attached) attached hereto sets forth financial data
and computations and other information evidencing the Borrower's compliance
with certain covenants of the Agreement, all of which data, computations and
information (or if no Schedule I is attached, the data, computations and
information contained in the most recent Schedule I attached to a prior
Compliance Certificate) are true, complete and correct in all material
respects.
5. The financial statements and reports referred to in SECTION 7.1(i),
7.1(ii), 7.1(iv), or 7.1(xi), as the case may be, of the Agreement which are
delivered concurrently with the delivery of this Compliance Certificate, if
any, fairly present in all material respects the consolidated financial
condition and operations of the Borrower and its Subsidiaries at such date
and the consolidated results of their operations for the period then-ended,
in accordance with GAAP applied consistently throughout such period and with
prior periods (except as approved by the accountants performing the audit in
connection therewith or the undersigned, as the case may be, and disclosed
therein), the Property Operating Income for each Property in accordance with
GAAP and adjusted per the definition of Property Operating Income contained
in the Agreement, and the aggregate aging of
<PAGE>
tenant receivables at such date. The following required reporting items are
not yet available but will be delivered within the ten Business Day grace
period: ____________________________________________.
Described below are the exceptions, if any, to paragraph 3 by listing,
in detail, the nature of the condition or event, the period during which it
has existed and the action which the Borrower has taken, is taking, or
proposes to take with respect to each such condition or event:
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
_____________________________________________________________________________
The foregoing certifications, together with the computations and
information set forth in Schedule I hereto and the financial statements
delivered with this Compliance Certificate in support hereof, are made and
delivered this ______ day of ______________, 19___.
CENTERPOINT PROPERTIES CORPORATION
By:
-----------------------------------
Print Name:
---------------------------
Title:
--------------------------------
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<PAGE>
SCHEDULE I
Calculation of Covenants
[QUARTER]
1. Permitted Investments (Section 7.4)
<TABLE>
<CAPTION>
Maximum
Percent Percent of
Category Investment of Market Market
-------- ---------- Capitalization Capitalization
(i.e. Book Value) -------------- --------------
<S> <C> <C> <C> <C>
(a) unimproved land 7%
(b) other property holdings 5%
(excluding cash, Cash
Equivalents, the
Non-industrial Properties
and Indebtedness of any
Subsidiary or Qualifying
Investment Affiliate to the
Borrower)
(c) stock holdings other than 5%
in Subsidiaries and
Qualifying Investment
Affiliates
(d) mortgages other than 5%
Qualified Mortgages
(e) joint ventures and 10%
partnerships other than
investments in Qualifying
Investment Affiliates
(f) total investments in 20%
(a)-(e)
(g) investments in 5%
unimproved land not
adjacent to existing
improvements and not
under active planning for
near term development
(h) interest in operating 10%
leases
</TABLE>
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<PAGE>
(i) Identify any single property investments in excess of 10% of Market
Capitalization (If none, insert "none".): _________________
2. Dividends (Section 7.11)
(a) Amount paid during most recent quarter ______
(b) Amount paid during preceding three quarters ______
(c) Funds From Operation during such four quarter period
(i) net income for such period ______
(ii) adjustments to net income per definition
of Funds From Operation (See Schedule) ______
(iii) Funds From Operation ______
TOTAL DIVIDEND PAY OUT RATIO [(a) PLUS (b), DIVIDED BY (c)(iii)] ______
MUST BE LESS THAN OR EQUAL TO: 90% of Funds
From Operation
3. Variable Interest Indebtedness (Section 7.19)
(a) Indebtedness which bears interest at an interest rate that ______
is not fixed through the maturity date of such Indebtedness
(b) Amount of (a) subject to a swap, rate cap or other interest ______
rate management program that effectively converts the
interest rate on such amount to a fixed rate or has otherwise
been approved by the Required Lenders
(c) Excludable tax exempt bonds (subject to $75,000,000 cap) ______
VARIABLE INTEREST INDEBTEDNESS [(a) MINUS (b) MINUS (c)]: ______
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<PAGE>
MUST BE LESS THAN OR EQUAL TO: $100,000,000
4. Minimum Consolidated Net Worth (Section 7.20)
(a) Consolidated Net Worth
(i) Market Capitalization ______
(ii) Total Liabilities (including all
Indebtedness and other GAAP
liabilities) ______
(iii) Excludable Convertible Securities
(iv) Consolidated Net Worth [(i) MINUS (ii) PLUS (iii)] ______
(b) $225,000,000
(c) product of .75 and net proceeds of stock offerings
since October __, 1996 ______
(d) sum of (b) plus (c) ______
(a) MUST BE GREATER THAN OR EQUAL TO (d).
5. EBITDA To Fully Diluted Debt Service Ratio (Section 7.21(i))
(a) EBITDA for the quarter most recently ended
(i) Borrower and its Subsidiaries ______
(ii) Allocable EBITDA of Investment Affiliates ______
(See Schedule)
(iii) EBITDA [(i) plus (ii)] ______
(b) Fully Diluted Debt Service for the quarter most recently ended.
(i) Debt Service
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<PAGE>
(1) Interest (Borrower and Subsidiaries) ______
(2) Principal (Borrower and Subsidiaries) ______
(3) Allocable Interest (Investment Affiliates) ______
(4) Allocable Principal (Investment Affiliates) ______
(5) Debt Service [SUM OF (1)-(4)] ______
(ii) Amount of Debt Service attributable to Excludable
Convertible Securities ______
(iii) Fully Diluted Debt Service [(i) MINUS (ii)] ______
EBITDA TO FULLY DILUTED DEBT SERVICE RATIO
[(a) DIVIDED BY (b)]:
MUST BE LESS THAN OR EQUAL TO: 2.25
6. Consolidated Total Indebtedness Ratio (Section 7.21(ii))
(a) Consolidated Total Indebtedness (See Schedule) ______
(b) Market Capitalization
(i) Total Property Income Capped at Applicable Cap Rate
(Attach schedule noting Property Operating Income for
the most recent quarter by Property as appropriately
annualized; for Subsidiaries and Investment Affiliates
include allocable share only).
(1) Industrial and Multi-Family Properties ______
capped at 9.5%
(2) Non-industrial that is not Multi-Family
capped at 10.25% ______
(3) Sum of (1) plus (2) is Total Property ______
Income capped at Applicable Cap Rate.
(ii) Other Income capped at 15% ______
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<PAGE>
(iii) Value of Qualified Mortgages
(1) [IDENTIFY MORTGAGE]
A. Principal Balance ______
B. 85% of value of Property ______
encumbered by Qualified Mortgage
(i.e. Property Operating Income for
the most recent quarter as
appropriately annualized, and
capitalized at the Applicable Cap Rate)
less first mortgage if applicable
C. Lesser of (A.) and (B.) ______
(__) Sum of amount shown as (C.) for (1)-(__) ______
above (maximum $50,000,000) is Value of
Qualified Mortgages
(iv) Book value of Preleased Assets Under Development ______
[IDENTIFY ASSET, LEASE PERCENTAGE, AND DATE CONSTRUCTION
COMMENCED]
(v) Unrestricted Cash and Cash Equivalents ______
(vi) 50% of lower of book value and market value ______
for land adjacent to stabilized improved
Properties
(vii) Sum of (i) through (vi) is "Market Capitalization" ______
CONSOLIDATED TOTAL INDEBTEDNESS RATIO ______
[(a) DIVIDED BY (b) EXPRESSED AS A PERCENTAGE]:
MUST BE LESS THAN OR EQUAL TO: 50%
7. Value of Unencumbered Assets Ratio (Section 7.21(iii))
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<PAGE>
(a) Value of Unencumbered Assets
(i) Property Operating Income attributable to
Unencumbered Assets owned by Borrower and
Qualifying Investment Affiliates as of end
of quarter as appropriately annualized
(including pro forma Property Operating Income
for entire quarter for Unencumbered Assets
acquired during the quarter), less assumed 1%
management fee and assumed Capital Reserve
Expenditure Amount (attach schedule noting
Property Operating Income for each Unencumbered
Asset as appropriately annualized; for Qualifying
Investment Affiliates include allocable share only)
(1) Industrial and Multi-family Properties
capped at 9.5% ______
(2) Non-Industrial Properties that are not
Multi-family Properties capped at 10.25% ______
(3) Total value of Unencumbered Assets other
than Cash and Cash Equivalents [(1) PLUS (2)] ______
(4) Deduction for Unencumbered Assets owned ______
by Qualifying Investment Affiliates
to the extent the value attributable
to such Unencumbered Assets exceeds 10%
of the total shown in (3) unless permitted
by the definition of Unencumbered Assets
(5) (3) minus (4) ______
(ii) Unrestricted Cash and Cash Equivalents owned ______
by Borrower
(iii) Allocable Share of Unrestricted Cash and Cash ______
Equivalents Owned by Qualifying Investment
Affiliates
-8-
<PAGE>
(vi) sum of (i)(5) plus (ii) plus (iii) is ______
"Value of Unencumbered Assets
(b) Consolidated Senior Unsecured Indebtedness ______
(provided schedule of such Indebtedness, including
unsecured debt of Investment Affiliates which own
Unencumbered Assets.)
VALUE OF UNENCUMBERED ASSETS RATIO [(a) DIVIDED BY (b)]:
MUST BE GREATER THAN OR EQUAL TO: 1.75
8. Property Operating Income Ratio (Section 7.21(iv)
(a) Property Operating Income (after assumed management ______
fee and Capital Reserve Expenditure Amount from all
Unencumbered Assets other than those which are excluded
from the Value of Unencumbered Assets under 7(a)(i)(4)
(b) Debt Service on Consolidated Unsecured Indebtedness
and unsecured indebtedness of Qualifying Investment
Affiliates other than those which are excluded from
the Value of Unencumbered Assets under 7(a)(i)(4)
(i) Interest (Borrower and Subsidiaries) ______
(ii) Principal (Borrower and Subsidiaries) ______
(iii) Allocable Interest (Qualifying Investment Affiliates) ______
(iv) Allocable Principal (Qualifying Investment Affiliates) ______
(v) Debt Service [Sum of (i)-(iv)] ______
PROPERTY OPERATING INCOME RATIO [(a) DIVIDED BY (b)] ______
MUST BE GREATER THAN OR EQUAL TO: 2.00
9. Consolidated Secured Indebtedness to Market Capitalization
(Section 7.21(v))
(a) Consolidated Secured Indebtedness
(i) secured indebtedness of Borrower and Subsidiaries ______
(ii) prorata share of secured indebtedness of Investment ______
Affiliates
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<PAGE>
(iii) Consolidated Secured Indebtedness [SUM OF (i) PLUS (ii)] ______
(b) Market Capitalization [(6)(b)(vii)] ______
(c) (a) divided by (b)
MUST BE LESS THAN OR EQUAL TO 40% OF MARKET CAPITALIZATION ON OR BEFORE MARCH
31, 1998, AND 35% THEREAFTER
10. Maximum Revenue From a Single Tenant (Section 7.24)
(a) 5% of Market Capitalization ______
(b) Identify any tenant for which rent revenue
(exclusive of tenant reimbursements) as
annualized exceeds amount shown in (a). ______
11. Other
Occurrence of Casualty or Condemnation at any Property or
Property secured by an Qualified Mortgage. (Yes/No)
(Section 7.1(x)). If yes, provide statement describing the
occurrence and action Borrower intends to take with
respect thereto ______
Current on tax payments (Yes/No) (Section 7.5) ______
Insurance in full force and effect (Yes/No)
(Sections 6.17 and 7.6) ______
Have any shares owned by Borrower's management (as
defined in Section 7.14) been traded (Yes/No)
If yes, describe ______
Acceleration notice received for indebtedness
aggregating $5,000,000 or more (Section 7.27) since
last Section 7.27 notice (Yes/No) If yes, promptly
provide copy of notice to the extent not previously
submitted ______
List all outstanding judgments (Section 8.10) ______
List all properties acquired or disposed of since the date ______
of the last financial statements delivered (including the date
of such acquisition or disposition) (Sections 7.12 and 7.13).
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<PAGE>
_____
List all Property Breaches and the nature of such breach,
if any. (Section 7.30). If such Property Breaches exist, the covenants
calculated herein should be performed both with and without the affected
Properties.
NOTE: To the extent of any inconsistency between the form of this
Compliance Certificate and the terms of the Agreement, the terms
of the Agreement shall prevail.
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<PAGE>
EXHIBIT D
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 Unsecured
Revolving Credit Agreement (which, as it may be amended, modified, renewed or
extended from time to time is herein called the "Credit Agreement") described
in Item 1 of Schedule 1 attached hereto ("Schedule 1"). Capitalized terms
used herein and not otherwise defined herein shall have the meanings
attributed to them in the Credit Agreement.
2. ASSIGNMENT AND ASSUMPTION. The Assignor hereby sells and assigns to
the Assignee, and the Assignee hereby purchases and assumes from the
Assignor, an interest in and to the Assignor's rights and obligations under
the Credit Agreement such that after giving effect to such assignment the
Assignee shall have purchased pursuant to this Assignment Agreement the
percentage interest specified in Item 3 of Schedule 1 of all outstanding
rights and obligations under the Credit Agreement and the other Loan
Documents. The aggregate Commitment (or Loans, if the applicable Commitment
has been terminated) purchased by the Assignee hereunder is set forth in Item
4 of Schedule 1.
3. EFFECTIVE DATE. The effective date of this Assignment Agreement (the
"Effective Date") shall be the later of the date specified in Item 5 of
Schedule 1 or two (2) Business Days (or such shorter period agreed to by the
Administrative Agent) after a Notice of Assignment substantially in the form
of Exhibit "I" attached hereto has been delivered to the Agent. In no event
will the Effective Date occur if the payments required to be made by the
Assignee to the Assignor on the Effective Date under SECTIONS 4 AND 5 hereof
are not made on the proposed Effective Date, unless otherwise agreed to in
writing by Assignor and Assignee. The Assignor will notify the Assignee of
the proposed Effective Date no later than the Business Day prior to the
proposed Effective Date. As of the Effective Date, (i) the Assignee shall
have the rights and obligations of a Lender under the Loan Documents with
respect to the rights and obligations assigned to the Assignee hereunder and
(ii) the Assignor shall relinquish its rights and be released from its
corresponding obligations under the Loan Documents with respect to the rights
and obligations assigned to the Assignee hereunder.
4. PAYMENTS OBLIGATIONS. On and after the Effective Date, the Assignee
shall be entitled to receive from the Administrative Agent all payments of
principal, interest and fees with respect to the interest assigned hereby.
The Assignee shall advance funds directly to the Administrative Agent with
respect to all Loans and reimbursement payments made on or after the
Effective Date with respect to the interest assigned hereby.
[In consideration for the sale and assignment of Loans hereunder, (i) the
Assignee shall pay the Assignor, on the Effective Date, an amount equal to
the principal amount of the portion of all CBR Loans assigned to the Assignee
hereunder and (ii) with respect to each LIBOR Loan made by the Assignor and
assigned to the Assignee hereunder which is outstanding on the Effective
Date, (a) on the last day of the Interest Period therefor or (b) on such
earlier date agreed to by the Assignor and the Assignee or (c) on the date on
which any such LIBOR Loan either becomes due (by acceleration or otherwise)
or is prepaid
<PAGE>
(the date as described in the foregoing clauses (a), (b) or (c) being
hereinafter referred to as the "LIBOR Due Date"), the Assignee shall pay the
Assignor an amount equal to the principal amount of the portion of such LIBOR
Loan assigned to the Assignee which is outstanding on the LIBOR Due Date. If
the Assignor and the Assignee agree that the applicable LIBOR Due Date for such
LIBOR Loan shall be the Effective Date, they shall agree, solely for purposes of
dividing interest paid by the Borrower on such LIBOR Loan, to an alternate
interest rate applicable to the portion of such Loan assigned hereunder for the
period from the Effective Date to the end of the related Interest Period (the
"Agreed Interest Rate") and any interest received by the Assignee in excess of
the Agreed Interest Rate, with respect to such LIBOR Loan for such period, shall
be remitted to the Assignor. In the event a prepayment of any LIBOR Loan which
is existing on the Effective Date and assigned by the Assignor to the Assignee
hereunder occurs after the Effective Date but before the applicable LIBOR Due
Date, the Assignee shall remit to the Assignor any excess of the funding
indemnification amount paid by the Borrower under SECTION 3.4 of the Credit
Agreement an account of such prepayment with respect to the portion of such
LIBOR Loan assigned to the Assignee hereunder over the amount which would have
been paid if such prepayment amount were calculated based on the Agreed Interest
Rate and only covered the portion of the Interest Period after the Effective
Date. The Assignee will promptly remit to the Assignor (i) the portion of any
principal payments assigned hereunder and received from the Administrative Agent
with respect to any LIBOR Loan prior to its LIBOR Due Date and (ii) any amounts
of interest on Loans and fees received from the Administrative Agent which
relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date, in the case of CBR Loans or fees, or the
LIBOR Due Date, in the case of LIBOR Loans, and not previously paid by the
Assignee to the Assignor.]* In the event that either party hereto receives any
payment to which the other party hereto is entitled under this Assignment
Agreement, then the party receiving such amount shall promptly remit it to the
other party hereto.
5. FEES PAYABLE BY THE ASSIGNEE. The Assignee shall pay to the Assignor
a fee on each day on which a payment of interest or Commitment Fees 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
attributable to the period prior to the Effective Date or, in the case of
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
calculated at the rate of ___% rather than the actual percentage used to
calculate the interest rate paid by the Borrower or if the Commitment Fee was
calculated at the rate of ___% rather than the actual percentage used to
calculate the Commitment Fee paid by the Borrower, as applicable. In
addition, the Assignee agrees to pay ___% of the fee required to be paid to
the Agent in connection with this Assignment Agreement.
[THIS SENTENCE CAN BE REVISED APPROPRIATELY BASED ON HOW THE FEE IS BEING PAID.]
*EACH ASSIGNOR MAY INSERT ITS STANDARD PROVISIONS IN LIEU OF THE PAYMENT TERMS
INCLUDED IN SECTIONS 4 AND 5 OF THIS EXHIBIT.
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. It
is understood and agreed that the assignment and
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<PAGE>
assumption hereunder are made without recourse to the Assignor and that the
Assignor makes no other representation or warranty of any kind to the Assignee.
Neither the Assignor nor any of its officers, directors, employees, agents or
attorneys shall be responsible for (i) the due execution, legality, validity,
enforceability, genuineness, sufficiency or collectability of any Loan Document,
including without limitation, documents granting the Assignor and the other
Lenders a security interest in assets of the Borrower or any guarantor, (ii) any
representation, warranty or statement made in or in connection with any of the
Loan Documents, (iii) the financial condition or creditworthiness of the
Borrower or any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Loan Documents, (v) inspecting any of the
Property, books or records of the Borrower, its Subsidiaries or Investment
Affiliates, (vi) the validity, enforceability, perfection, priority, condition,
value or sufficiency of any collateral securing or purporting to secure the
Loans or (vii) any mistake, error of judgment, or action taken or omitted to be
taken in connection with the Loans or the Loan Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i) confirms that it
has received a copy of the Credit Agreement and the other Loan Documents,
together with copies of the financial statements requested by the Assignee and
such other documents and information as it has deemed appropriate to make its
own credit analysis and decision to enter into this Assignment Agreement, (ii)
agrees that it will, independently and without reliance upon the Administrative
Agent, the Documentation Agent, the Assignor or any other Lender and based on
such documents and information at it shall deem appropriate at the time,
continue to make its own credit decisions in taking or not taking action under
the Loan Documents, (iii) appoints and authorizes the Administrative Agent to
take such action as agent on its behalf and to exercise such powers under the
Loan Documents as are delegated to the Administrative Agent by the terms
thereof, together with such powers as are reasonably incidental thereto, (iv)
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of the Loan Documents are required to be
performed by it as a Lender, (v) agrees that its payment instructions and notice
instructions are as set forth in the attachment to Schedule 1, (vi) confirms
that none of the funds, monies, assets or other consideration being used to make
the purchase and assumption hereunder are "plan assets" as defined under ERISA
and that its rights, benefits and interests in and under the Loan Documents will
not be "plan assets" under ERISA, [AND (VII) ATTACHES THE FORMS PRESCRIBED BY
THE INTERNAL REVENUE SERVICE OF THE UNITED STATES CERTIFYING THAT THE ASSIGNEE
IS ENTITLED TO RECEIVE PAYMENTS UNDER THE LOAN 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
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<PAGE>
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 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:
--------------------------------
--------------------------------
--------------------------------
-4-
<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
2. Date of Assignment Agreement: ________________, 19 ___
3. Amounts (As of Date of Item 2 above):
a. Aggregate Commitment (Loans)* under
Credit Agreement $ __________
b. Assignee's Percentage of the Aggregate
Commitment purchased under this
Assignment Agreement** __________%
4. Amount of Assignee's Commitment (Loan Amount)*
Purchased under this Assignment Agreement: $___________
5. Amount of Assignor's Commitment (Loan Amount)
After Purchase under this Assignment Agreement ___________
6. Proposed Effective Date:
Accepted and Agreed:
[NAME OF ASSIGNOR] [NAME OF ASSIGNEE]
By: By:
---------------------------- -----------------------------------
Title: Title:
------------------------- --------------------------------
* If a Commitment has been terminated, insert outstanding Loans in place of
Commitment
** Percentage taken to 10 decimal places
<PAGE>
Attachment to SCHEDULE 1 to ASSIGNMENT AGREEMENT
Attach Assignor's Administrative Information Sheet, which must
include notice address and account information for the Assignor and the Assignee
<PAGE>
EXHIBIT "I"
to Assignment Agreement
NOTICE
OF ASSIGNMENT
____________________, 19 __
To: [NAME OF ADMINISTRATIVE AGENT]
_________________________________
_________________________________
From: [NAME OF ASSIGNOR] (the "Assignor")
[NAME OF ASSIGNEE] (the "Assignee")
1. We refer to that Unsecured Revolving Credit Agreement (the "Credit
Agreement") described in Item 1 of Schedule 1 attached hereto ("Schedule 1").
Capitalized terms used herein and not otherwise defined herein shall have
the meanings attributed to them in the 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 __________ , 19 ___ (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. From and after such purchase, the Assignee's Commitment shall be
the amount specified in Item 4 of Schedule 1 and the Assignor's Commitment
shall be the amount specified in Item 5 of Schedule 1. The Effective Date of
the Assignment shall be the later of the date specified in Item 5 of Schedule
1 or two (2) Business Days (or such shorter period as agreed to by the
Administrative Agent) after this Notice of Assignment and any fee required by
SECTION 13.3.2 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 or set forth
in SECTION 13 of the Credit Agreement has not been satisfied.
4. The Assignor and the Assignee hereby give to the Administrative
Agent notice of the assignment and delegation referred to herein. The
Assignor will confer with the Administrative Agent before the date specified
in Item 6 of Schedule 1 to determine if the Assignment Agreement will become
effective on such date pursuant to SECTION 3 hereof, and will confer with the
Administrative Agent to determine the Effective Date pursuant to SECTION 3
hereof if it occurs thereafter. The Assignor shall notify the Administrative
Agent if the Assignment Agreement does not become effective on any proposed
Effective Date as a result of the failure to satisfy the
<PAGE>
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 $3,000 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.
9. The Assignee authorizes the Administrative Agent to act as its agent
under the Loan Documents in accordance with the terms thereof. The Assignee
acknowledges that the Administrative Agent has no duty to supply information
with respect to the Borrower or the Loan Documents to the Assignee until the
Assignee becomes a party to the Credit Agreement.*
*May be eliminated if Assignee is a party to the Credit Agreement prior to the
Effective Date.
NAME OF ASSIGNOR NAME OF ASSIGNEE
By: By:
----------------------------- -----------------------------------
Title: Title:
-------------------------- --------------------------------
ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent
By:
-----------------------------
Title:
--------------------------
[ATTACH PHOTOCOPY OF SCHEDULE 1 TO ASSIGNMENT]
-2-
<PAGE>
EXHIBIT E
LOAN/CREDIT RELATED MONEY TRANSFER INSTRUCTION
To: The First National Bank of Chicago,
as Administrative Agent (the "Agent") under the Credit Agreement
Described Below
Re: Unsecured Revolving Credit Agreement, dated as of ___________, ____
1996 (as amended, modified, renewed or extended from time to time, the
"Agreement"), among CenterPoint Properties Corporation (the
"Borrower"), The First National Bank of Chicago, individually and as
Administrative Agent, Lehman Brothers Holdings Inc., individually and
as Document 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 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 2.16 of the Credit Agreement.
Facility Identification Number(s)
---------------------------------------------
Customer/Account Name
---------------------------------------------------------
Transfer Funds To
-------------------------------------------------------------
-------------------------------------------------------------
-------------------------------------------------------------
For Account No.
---------------------------------------------------------------
Reference/Attention To
--------------------------------------------------------
Authorized Officer (Customer Representative) Date
-------------------------
- ----------------------------------
- ---------------------------------- ---------------------------------------
(Please Print) Signature
Bank Officer Name Date
-----------------------------------
- ---------------------------------- ---------------------------------------
(Please Print) Signature
<PAGE>
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
-1-
<PAGE>
EXHIBIT F
MINIMUM SPECIFICATIONS FOR ENVIRONMENTAL INVESTIGATIONS
The following are Guidelines for the qualification of firms and
environmental professionals and for information to be included in
Environmental Site Assessments. These standards include the minimum elements
common to acceptable site assessments. Generally, it is intended for the
standards to be consistent with those outlined in the American Society for
Testing and Materials ("ASTM") Designation: E 1527-93.
QUALIFICATIONS OF INVESTIGATING FIRM
The firm or environmental professional must have 5 years of experience
in hazardous substances investigation. The environmental professional
supervising and signing the report should be experienced in environmental
site investigations, and should have relevant environmental experience and
technical qualifications, such as demonstrated by professional registration
and/or advanced education in related disciplines. The firm or environmental
professional performing the work should have adequate professional liability
insurance. Borrower and Lenders may agree in advance on qualified firms or
environmental professionals that will conduct the Phase I Reports. Borrower
may from time to time select other firms or environmental professionals that
meet the minimum qualifications set out above to conduct a Phase I Report,
subject to approval of the Administrative Agent, which approval shall not be
unreasonably withheld or delayed.
DEPTH OF REPORTING REQUIRED
Phase I - consists of site description, review of historical and
regulatory data and physical inspection. The firm or environmental
professional will follow the standard practices set out in the
<PAGE>
ASTM E 1527-93 guidelines in conducting the Phase I Site Assessment and drafting
the Report and in preparing the Findings and Conclusions. All deletions and
deviations from the ASTM E 1527-93 guidelines shall be listed individually and
in detail. As an additional component of the Phase I Site Assessment, the firm
or environmental professional will conduct an asbestos survey or inspection in
accordance with the protocols set by OSHA under the Occupational Safety & Health
Act (including protocols set forth under the Asbestos Hazard Emergency Response
Act (AHERA) that are incorporated into the OSHA protocols) unless an alternate
protocol is approved by the Administrative Agent. In all events such survey or
inspection shall comply with all applicable Environmental Laws, including, but
not limited to, 29 C.F.R. Section 1910.1001. The firm or environmental
professional will also conduct a lead-based paint survey or inspection when
necessary, including but not limited to prior to demolition or renovation work
and as required by all applicable Environmental Laws, including, but not limited
to 29 C.F.R. Sections 1910.1025 and 1926.62. If no potential
contamination is indicated, the report should so state, and a specific statement
should be made that no further investigation is required.
Phase II - If a Phase I examination indicates the presence of recognized
environmental conditions which would warrant further appropriate inquiry, the
consultant should document the basis for that conclusion, recommend a testing
program for further evaluation, including the areas to be tested and, if
appropriate, the hazardous constituents of concern, sampling procedures to be
used and methods used to assess the samples. If after evaluating the
recommendation, the Borrower determines that a Phase II is necessary, then
the Borrower will request the firm or environmental professional to prepare a
bid, and may solicit competitive bids from other firms or environmental
professionals. The Phase II Report should document the extent, and, if
possible, source, of contamination so that the Borrower can assess whether
remediation is required under applicable Environmental Laws. If the Borrower
plans to conduct
-2-
<PAGE>
remediation estimated to cost more than $250,000 for any Project, the Borrower
will promptly provide written notice to the Administrative Agent. If the
Borrower does not follow the recommendation of the firm or environmental
professional to conduct a Phase II investigation or remediation for any Project,
the Borrower will promptly provide written notice to the Administrative Agent.
RELIANCE ON PHASE I REPORT
The Phase I Report shall include a statement that the firm or
environmental professional acknowledges that the Lenders will be relying on
the Report.
-3-
<PAGE>
SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS
(See Section 6.7)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Type of
Name of Subsidiary Securities Amount of Percentage
or Investment Owned By Owned Investment Ownership
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
CenterPoint Realty Services CenterPoint Properties 1 Class A Common $1.00 0.01%
Corporation Corporation shs.
--------------------------------------------------------
9,990 Class B 9,990.00 99.90%
Common shs.
-------------------------------------------------------------------------------------------
Robert L. Stovall 33 Class A Common 33.00 0.33%
shs.
-------------------------------------------------------------------------------------------
Michael Mullen 33 Class A Common 33.00 0.33%
shs.
-------------------------------------------------------------------------------------------
Paul S. Fisher 33 Class A Common 33.00 0.33%
shs.
- ------------------------------------------------------------------------------------------------------------------------------
CenterPoint Realty Management CenterPoint Realty Services 100 Common shs. 1,000.00 100.00%
Corporation Corporation
- ------------------------------------------------------------------------------------------------------------------------------
CP Realty Management Co. I CenterPoint Realty Management 100 Common shs. 100.00 100.00%
Corporation
- ------------------------------------------------------------------------------------------------------------------------------
CP Financing Corporation II CenterPoint Properties 100 Common shs. 100.00 100.00%
Corporation
- ------------------------------------------------------------------------------------------------------------------------------
The Miller Partnership, L.P. CenterPoint Realty Services General partnership 22,225,000.00 99.00%
Corporation interest
-------------------------------------------------------------------------------------------
CenterPoint Properties Limited partnership 100.00 1.00%
Corporation interest
- ------------------------------------------------------------------------------------------------------------------------------
East Chicago Partners, L.P. CenterPoint Properties General partnership 5,228,000.00 99.00%
Corporation interest
-------------------------------------------------------------------------------------------
CenterPoint Realty Services Limited partnership 100.00 1.00%
Corporation interest
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Jurisdiction
Name of Subsidiary of Description of
or Investment Organization "QIA" Properties Owned Business Operations
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
CenterPoint Realty Services IL Yes None Real estate development
Corporation
- ------------------------------------------------------------------------------------------------------------------------------
CenterPoint Realty Management IL Yes None Real estate management
Corporation services
- ------------------------------------------------------------------------------------------------------------------------------
CP Realty Management Co. I IL Yes None Real estate management services
- ------------------------------------------------------------------------------------------------------------------------------
CP Financing Corporation II IL Yes None Inactive
- ------------------------------------------------------------------------------------------------------------------------------
The Miller Partnership, L.P. IL Yes Lakeshore Dunes, IN Acquisition, ownership and
investment in real property
- ------------------------------------------------------------------------------------------------------------------------------
East Chicago Partners, L.P. IL Yes 425 W. 151st St., East Acquisition, ownership and
Chicago, IN investment in real property
- ------------------------------------------------------------------------------------------------------------------------------
1
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Type of
Name of Subsidiary Securities Amount of Percentage
or Investment Owned By Owned Investment Ownership
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Elk Grove Limited Partnership CenterPoint Properties General partnership $5,317,217.00 99.00%
Corporation interest
-------------------------------------------------------------------------------------------
CenterPoint Realty Services Limited partnership 100.00 1.00%
Corporation interest
- ------------------------------------------------------------------------------------------------------------------------------
The Edge Venture CenterPoint Properties General partnership 9,445,141.00 99.00%(2)
Corporation interest
-------------------------------------------------------------------------------------------
CenterPoint Realty Services General partnership 0 1.00%(2)
Corporation interest
- ------------------------------------------------------------------------------------------------------------------------------
CenterPoint O'Hare L.L.C. CenterPoint Properties Member and manager 7,750,000.00 95.00%
Corporation
- ------------------------------------------------------------------------------------------------------------------------------
CP Financing Trust CenterPoint Properties 1,000 Common shs. 81,802,270.00 100.00%
Corporation of beneficial
interest
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
Jurisdiction
Name of Subsidiary of Description of
or Investment Organization "QIA" Properties Owned Business Operations
<S> <C> <C> <C> <C>
- ----------------------------------------------------------------------------------------------------------------------------------
Elk Grove Limited Partnership IL Yes 1501 Pratt Ave., Elk Grove Village, IL (1) Acquisition, ownership
and investment in real
property
- ----------------------------------------------------------------------------------------------------------------------------------
The Edge Venture IL Yes 2553 N. Edgington, Franklin Park, IL (3) Acquisition, ownership
and investment in real
property
- ----------------------------------------------------------------------------------------------------------------------------------
CenterPoint O'Hare L.L.C. IL Yes None Develop buildings on Site
19, O'Hare International
Airport
- -----------------------------------------------------------------------------------------------------------------------------------
CP Financing Trust MD Yes 1201 Lunt Ave., Elk Grove Village, IL Acquisition, ownership
245 Beinoris Dr., Wood Dale, IL and investment in real
7001 Adams St., Willowbrook, IL property
1300 Northpoint Rd., Waukegan, IL
1520 Pratt Ave., Elk Grove Village, IL
8901 102nd St., Pleasant Prairie, WI
1 Wildlife Way, Long Grove, IL
950-970 Tower Rd., Mundelein, IL
1319 Marquette Dr., Romeoville, IL
1733 Downs Dr., West Chicago, IL
1646 Downs Dr., West Chicago, IL
1810-1820 Industrial Dr., Libertyville, IL
1700 Butterfield Rd., Mundelein, IL
5619-25 W. 115th St., Alsip, IL
1800 Industrial Dr., Libertyville, IL
5200 100th St., Pleasant Prairie, WI
900 W. University Dr., Arlington Hts., IL
4400 S. Kolmar, Chicago, IL
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
- --------------------------------
(1) Title to this property is held by LaSalle National Bank, Trustee of Trust
No. 113920 under Trust Agreement dated October 1, 1988, of which Elk Grove
Limited Partnership is the sole beneficiary.
(2) Profits and loss interest. Two other partners from whom CenterPoint
acquired its interest, Davidola Venture and FCLS Pulaski Partnership,
have fixed interests in the partnership totalling $227,379.50 and
$97,756.50, respectively, which areconvertible into CenterPoint common
stock. Pending conversion, such partners are entiled to a priority
distribution (which accrues to the extent unpaid) equal to dividends
declared on the number of shares of common stock into which their
interests are convertible.
(3) Title to this property is held by LaSalle National Bank, Trustee of Trust
No. 114283 under Trust Agreement dated April 4, 1989, of which The Edge
Venture is the sole beneficiary.
2
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Type of
Name of Subsidiary Securities Amount of Percentage
or Investment Owned By Owned Investment Ownership
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------
Great Lakes Industrial CP Financing Trust General partnership $27,095,809.00 99.00%
Partners, L.P. interest
------------------------------------------------------------------------------------------
CenterPoint Realty Limited partnership 100.00 1.00%
Services Corporation interest
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
Jurisdiction
Name of Subsidiary of Description of
or Investment Organization "QIA" Properties Owned Business Operations
<S> <C> <C> <C> <C>
- ------------------------------------------------------------------------------------------------------------------------------
Great Lakes Industrial IN Yes 201 Mississippi St., Gary, IN Acquisition, ownership
Partners, L.P. 1827 N. Bendix Dr., South Bend, IN and investment in real property
- ------------------------------------------------------------------------------------------------------------------------------
</TABLE>
3
<PAGE>
CENTERPOINT PROPERTIES CORPORATION AND SUBSIDIARIES
UNENCUMBERED ASSETS SCHEDULE
SCHEDULE 2
<TABLE>
<CAPTION>
PROJECT NAME AND ADDRESS TYPE OF PROJECT DATE ACQUIRED
- ------------------------ --------------- -------------
<S> <C> <C> <C>
745 Birginal Road, Bensenville, IL Industrial building 06/15/94
11743 Mayfield, Alsip, IL Industrial building 11/20/95
1100 Chase, Elk Grove, Il * Industrial building 05/21/96
875 Fargo Ave., Elk Grove Village, IL * Industrial building 06/11/96
400 N. Wolf Road, Northlake, IL - (A.G.) * Industrial building 09/18/96
2725 Armstrong Court, Des Plaines, IL * Industrial building 12/10/93
1700 West Hawthorne, West Chicago, IL * Industrial building 12/17/94
1015 East State Parkway, Schaumburg, IL * Industrial building 12/15/94
800 Chase Avenue, Elk Grove Village, IL Industrial building 01/25/95
750 East 110th Street, Chicago, IL * Industrial building 03/15/95
10601 Seymour Ave., Franklin Park, IL Industrial building 09/07/95
900 East 103rd Street, Chicago, IL * Industrial building 12/10/93
1850 Greenleaf, Elk Grove Village, IL * Industrial building 12/10/93
21399 Torrence Avenue, Sauk Village, IL * Industrial building 07/27/94
5990 Touhy Avenue, Niles, IL * Industrial building 12/10/93
4501 West Augusta Boulevard, Chicago, IL * Industrial building 12/10/93
11601 S. Central Ave., Alsip, IL * Industrial building 10/03/95
11701 S. Central Ave., Alsip, IL * Industrial building 10/03/95
6600 River Road, Hodgkins, IL * Industrial building 04/10/96
655 Wheat Lane, Wood Dale, IL * Industrial building 09/08/94
7501 N. 81st, Milwaukee, WI * Industrial building 05/01/96
351 North Rohlwing Road, Itasca, IL * Retail building 12/10/93
4-48 Barrington Road, Streamwood, IL * Retail building 10/28/94
84-120 McHenry Road, Wheeling, IL * Retail building 12/10/93
1501 Pratt Ave., Elk Grove Village, IL Industrial building 06/18/96
425 West 151st Street, East Chicago, IN * Industrial building 12/10/93
</TABLE>
<TABLE>
<CAPTION>
FEE OR IF LEASEHOLD,
PROJECT NAME AND ADDRESS OWNED BY LEASEHOLD GROUND LESSOR
- ------------------------ -------- ---------
<S> <C> <C> <C>
745 Birginal Road, Bensenville, IL CenterPoint Properties Corp. Fee N/A
11743 Mayfield, Alsip, IL CenterPoint Properties Corp. Fee N/A
1100 Chase, Elk Grove, Il CenterPoint Properties Corp. Fee N/A
875 Fargo Ave., Elk Grove Village, IL CenterPoint Properties Corp. Fee N/A
400 N. Wolf Road, Northlake, IL - (A.G.) CenterPoint Properties Corp. Fee N/A
2725 Armstrong Court, Des Plaines, IL CenterPoint Properties Corp. Fee N/A
1700 West Hawthorne, West Chicago, IL CenterPoint Properties Corp. Fee N/A
1015 East State Parkway, Schaumburg, IL CenterPoint Properties Corp. Fee N/A
800 Chase Avenue, Elk Grove Village, IL CenterPoint Properties Corp. Fee N/A
750 East 110th Street, Chicago, IL CenterPoint Properties Corp. Fee N/A
10601 Seymour Ave., Franklin Park, IL CenterPoint Properties Corp. Fee N/A
900 East 103rd Street, Chicago, IL CenterPoint Properties Corp. Fee N/A
1850 Greenleaf, Elk Grove Village, IL CenterPoint Properties Corp. Fee N/A
21399 Torrence Avenue, Sauk Village, IL CenterPoint Properties Corp. Fee N/A
5990 Touhy Avenue, Niles, IL CenterPoint Properties Corp. Fee N/A
4501 West Augusta Boulevard, Chicago, IL CenterPoint Properties Corp. Fee N/A
11601 S. Central Ave., Alsip, IL CenterPoint Properties Corp. Fee N/A
11701 S. Central Ave., Alsip, IL CenterPoint Properties Corp. Fee N/A
6600 River Road, Hodgkins, IL CenterPoint Properties Corp. Fee N/A
655 Wheat Lane, Wood Dale, IL CenterPoint Properties Corp. Fee N/A
7501 N. 81st, Milwaukee, WI CenterPoint Properties Corp. Fee N/A
351 North Rohlwing Road, Itasca, IL CenterPoint Properties Corp. Fee N/A
4-48 Barrington Road, Streamwood, IL CenterPoint Properties Corp. Fee N/A
84-120 McHenry Road, Wheeling, IL CenterPoint Properties Corp. Fee N/A
1501 Pratt Ave., Elk Grove Village, IL Elk Grove Limited Partnership Fee N/A
425 West 151st Street, East Chicago, IN East Chicago Partners L.P. Fee N/A
</TABLE>
* Designates proposed Restricted Unencumbered Assets
<PAGE>
CENTERPOINT PROPERTIES CORPORATION AND SUBSIDIARIES
SCHEDULE OF INDEBTEDNESS AND LIENS
SCHEDULE 3
<TABLE>
<CAPTION>
INDEBTEDNESS INCURRED BY INDEBTEDNESS OWED TO PROPERTY ENCUMBERED
- ------------------------ -------------------- -------------------
<S> <C> <C>
C.P. Financing Trust Bondholders 1201 Lunt Avenue, Elk Grove Village, IL
C.P. Financing Trust Bondholders 245 Beinoris Drive, Wood Dale, IL
C.P. Financing Trust Bondholders 7001 Adams Street, Willowbrook, IL
C.P. Financing Trust Bondholders 1300 Northpoint Road, Waukegan, IL
C.P. Financing Trust Bondholders 1520 Pratt Avenue, Elk Grove Village, IL
C.P. Financing Trust Bondholders 8901 102nd Street, Pleasant Prairies, WI
C.P. Financing Trust Bondholders 1 Wildlife Way, Long Grove, IL
C.P. Financing Trust Bondholders 950-970 Tower Road, Mundelein, IL
C.P. Financing Trust Bondholders 1319 Marquette Drive, Romeoville, IL
C.P. Financing Trust Bondholders 1733 Downs Drive, West Chicago, IL
C.P. Financing Trust Bondholders 1645 Downs Drive, West Chicago, IL
C.P. Financing Trust Bondholders 1810-1820 Industrial Drive, Libertyville, IL
C.P. Financing Trust Bondholders 1700 Butterfield Road Mundelin, IL
C.P. Financing Trust Bondholders 5619-25 West 115th Street, Alsip, IL
C.P. Financing Trust Bondholders 1800 Industrial Drive, Libertyville, IL
C.P. Financing Trust Bondholders 201 Mississippi Street, Gary, IN
C.P. Financing Trust Bondholders 8200 100th Street, Pleasant Prairie, WI
C.P. Financing Trust Bondholders 900 W. University Dr., Arlington Heights, IL
C.P. Financing Trust Bondholders 4400 S. Kolmar, Chicago, IL
C.P. Financing Trust Bondholders 1827 North Bendix Drive, South Bend, IN
CenterPoint Properties Corporation Prudential Realty Group 720 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1250 Carolina Drive, West Chicago, IL
CenterPoint Properties Corporation Prudential Realty Group 2339-41 Ernie Krueger Court, Waukegan, IL
CenterPoint Properties Corporation Prudential Realty Group 1150 Shore Rd, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1120 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1510 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1020 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1560 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 820 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 800 Enterprise Court, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1651 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 1500 Shore Drive, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 2764 Golfview, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 920 Frontenac, Naperville, IL
CenterPoint Properties Corporation Prudential Realty Group 825 Tollgate Road, Elgin, IL
CenterPoint Properties Corporation Prudential Realty Group 620-630 Butterfield Road, Mundelein, IL
CenterPoint Properties Corporation Prudential Realty Group 2600 Elmhurst Rd., Elk Grove Village, IL
CenterPoint Properties Corporation Prudential Realty Group 825-845 Hawthorne Lane, West Chicago, IL
CenterPoint Properties Corporation Royal Bank of Scotland 1400 Busse Road, Elk Grove Village, IL
CenterPoint Properties Corporation Royal Bank of Scotland Lakeshore Dunes
The Edge Venture Northern Trust 2553 N. Edgington, Franklin Park, IL
CenterPoint Properties Corporation Principal Mutual 1800 Bruning Drive, Itasca, IL
CenterPoint Properties Corporation Lurie Family Trust 850 Arther Avenue, Elk Grove Village
CenterPoint Properties Corporation Lincoln National Letter of credit
</TABLE>
<TABLE>
<CAPTION>
AMOUNT OF
INDEBTEDNESS INCURRED BY MATURITY INDEBTEDNESS
- ------------------------ -------- ------------
<S> <C> <C>
C.P. Financing Trust 11/01/2002 $185,614
C.P. Financing Trust 11/01/2002 $394,340
C.P. Financing Trust 11/01/2002 $869,632
C.P. Financing Trust 11/01/2002 $1,516,030
C.P. Financing Trust 11/01/2002 $1,072,156
C.P. Financing Trust 11/01/2002 $2,942,249
C.P. Financing Trust 11/01/2002 $2,922,097
C.P. Financing Trust 11/01/2002 $594,389
C.P. Financing Trust 11/01/2002 $2,018,314
C.P. Financing Trust 11/01/2002 $1,286,558
C.P. Financing Trust 11/01/2002 $1,554,501
C.P. Financing Trust 11/01/2002 $1,144,466
C.P. Financing Trust 11/01/2002 $938,451
C.P. Financing Trust 11/01/2002 $7,832,473
C.P. Financing Trust 11/01/2002 $3,508,185
C.P. Financing Trust 11/01/2002 $12,979,507
C.P. Financing Trust 11/01/2002 $2,582,990
C.P. Financing Trust 11/01/2002 $2,234,720
C.P. Financing Trust 11/01/2002 $1,000,000
C.P. Financing Trust 11/01/2002 $2,423,328
----------
$50,000,000
CenterPoint Properties Corporation 05/08/99 $2,800,000
CenterPoint Properties Corporation 05/08/99 $2,800,000
CenterPoint Properties Corporation 05/08/99 $1,300,000
CenterPoint Properties Corporation 05/08/99 $1,200,000
CenterPoint Properties Corporation 05/08/99 $2,600,000
CenterPoint Properties Corporation 05/08/99 $2,000,000
CenterPoint Properties Corporation 05/08/99 $1,300,000
CenterPoint Properties Corporation 05/08/99 $1,600,000
CenterPoint Properties Corporation 05/08/99 $2,600,000
CenterPoint Properties Corporation 05/08/99 $900,000
CenterPoint Properties Corporation 05/08/99 $500,000
CenterPoint Properties Corporation 05/08/99 $1,000,000
CenterPoint Properties Corporation 05/08/99 $400,000
CenterPoint Properties Corporation 05/08/99 $1,300,000
CenterPoint Properties Corporation 05/08/99 $2,300,000
CenterPoint Properties Corporation 05/08/99 $1,500,000
CenterPoint Properties Corporation 05/08/99 $2,400,000
CenterPoint Properties Corporation 05/08/99 $1,500,000
----------
$30,000,000
CenterPoint Properties Corporation 03/01/2031 $3,470,000
CenterPoint Properties Corporation 03/01/2031 $18,750,000
-----------
$22,220,000
The Edge Venture 11/15/98 $6,000,000
CenterPoint Properties Corporation 10/10/97 $5,704,000
CenterPoint Properties Corporation 10/03/2000 $575,000
CenterPoint Properties Corporation 07/15/97 $1,956,000
</TABLE>
<PAGE>
SCHEDULE 4
PLANS AND MULTIEMPLOYER PLANS
None.
-7-
<PAGE>>
SCHEDULE 5
ENVIRONMENTAL DISCLOSURES
None.
-8-
<PAGE>
SCHEDULE 6
NONCOMPLIANCE WITH LAWS
None.
-9-
<PAGE>
SCHEDULE 7
LITIGATION AND INVESTIGATIONS
None.
-10-
<PAGE>
SCHEDULE 8
CONTINGENT OBLIGATIONS
None.
-11-
<PAGE>
SCHEDULE 9
INDEBTEDNESS DEFAULTS
None.
-12-
<PAGE>
EXHIBIT 11
CENTERPOINT PROPERTIES CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1996 1995 1996 1995
-------------- -------------- -------------- --------------
<S> <C> <C> <C> <C>
Net income (A) $5,358,214 $1,682,172 $11,168,924 $4,976,297
Interest expense-debentures 318,654 754,869 1,088,264 2,555,976
-------------- -------------- -------------- --------------
Adjusted net income (B) $5,676,868 $2,437,041 $12,257,188 $7,532,273
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Weighted average number of shares of common
stock outstanding 14,210,430 9,406,191 11,822,133 8,908,548
Additional number of common equivalent shares
outstanding:
Stock options - net (1) 202,260 348,157 198,627 181,073
Class B common stock (2) 2,272,727 2,272,727
-------------- -------------- -------------- --------------
Weighted average common and common
equivalent shares outstanding (C) 16,685,417 9,754,348 14,293,487 9,089,621
Additional weighted average shares outstanding
assuming debentures converted at issue price 850,938 2,017,006 967,249 2,271,752
-------------- -------------- -------------- --------------
Weighted average shares outstanding for fully-
diluted (D) 17,536,355 11,771,354 15,260,736 11,361,373
-------------- -------------- -------------- --------------
-------------- -------------- -------------- --------------
Net income per share:
Primary (A/C) $0.32 $0.17 $0.78 $0.55
Fully -diluted (3) (B/D) $0.32 $0.21 $0.80 $0.66
</TABLE>
_________________________________________________
Notes:
(1) Represents stock options using the treasury stock method.
(2) Represents Class B common stock as if converted on a share for share
basis; prorated for the days the Class B common stock was outstanding.
The Class B common stock is considered a common stock equivalent as it
participates in dividends with common stock and was converted into
common stock with shareholder approval in May, 1996.
(3) Conversion of debentures is anti-dilutive.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-START> JAN-01-1996
<PERIOD-END> SEP-30-1996
<CASH> 21,271
<SECURITIES> 0
<RECEIVABLES> 26,796
<ALLOWANCES> (366)
<INVENTORY> 0
<CURRENT-ASSETS> 15,997
<PP&E> 382,268
<DEPRECIATION> (27,290)
<TOTAL-ASSETS> 418,676
<CURRENT-LIABILITIES> 16,575
<BONDS> 151,228
0
0
<COMMON> 17
<OTHER-SE> 250,856
<TOTAL-LIABILITY-AND-EQUITY> 418,676
<SALES> 0
<TOTAL-REVENUES> 44,067
<CGS> 0
<TOTAL-COSTS> 23,194
<OTHER-EXPENSES> 177
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 8,097
<INCOME-PRETAX> 12,599
<INCOME-TAX> 0
<INCOME-CONTINUING> 0
<DISCONTINUED> 0
<EXTRAORDINARY> (1,430)
<CHANGES> 0
<NET-INCOME> 11,169
<EPS-PRIMARY> .78
<EPS-DILUTED> .80
</TABLE>
