<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, 1997
( ) Transition report pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934
---------------------
Commission file number 1-12630
CENTERPOINT PROPERTIES TRUST
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 Common Shares of Beneficial Interest outstanding as of October 17,
1997; 16,764,713
<PAGE>
PART 1. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT FOR SHARE INFORMATION)
(UNAUDITED)
ASSETS
<TABLE>
<CAPTION>
SEPTEMBER 30, DECEMBER 31,
1997 1996
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<S> <C> <C>
Assets:
Investment in real estate:
Land and leasehold $90,411 $72,004
Buildings 357,868 284,626
Building improvements 60,119 43,583
Furniture, fixtures, and equipment 12,983 10,429
Construction in progress 17,332 18,392
-------- --------
538,713 429,034
Less accumulated depreciation and amortization 40,406 30,206
-------- --------
Net investment in real estate 498,307 398,828
Cash and cash equivalents 13,866 1,070
Restricted cash and cash equivalents 40,279 977
Tenant accounts receivable, net 14,071 10,193
Mortgage notes receivable 19,584 22,665
Investment in and advances to affiliate 32,957 9,673
Prepaid expenses and other assets 4,647 3,630
Deferred expenses, net 5,611 4,170
-------- --------
$629,322 $451,206
-------- --------
-------- --------
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Mortgage notes payable $166,865 $114,451
Line of credit 103,250 46,100
Convertible subordinated debentures payable 11,790 14,380
Notes payable 83 2,418
Accounts payable 11,315 4,130
Accrued expenses 17,171 17,914
Rents received in advance and security deposits 4,196 3,699
-------- --------
314,670 203,092
-------- --------
Commitments and contingencies
Shareholders' equity:
Preferred shares of beneficial interest, $.001 par value, 10,000,000 shares
authorized; none issued and outstanding
Common shares of beneficial interest, $.001 par value, 47,727,273 shares
authorized; 16,762,713 and 14,333,231 issued and outstanding, respectively 17 14
Class B common shares of beneficial interest, $.001 par value,
2,272,727 shares authorized; 2,272,727 issued and outstanding 2 2
Additional paid-in-capital 346,377 276,142
Retained earnings (deficit) (31,241) (27,726)
Unearned compensation - restricted stock (503) (318)
-------- --------
Total shareholders' equity 314,652 248,114
-------- --------
$629,322 $451,206
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-------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT FOR PER SHARE INFORMATION)
(UNAUDITED)
<TABLE>
<CAPTION>
THREE MONTHS ENDED SEPTEMBER 30, NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------- -------------------------------
1997 1996 1997 1996
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Revenue:
Operating and investment revenue:
Minimum rents $14,544 $ 10,647 $40,856 $29,964
Straight-line rents 567 521 1,854 1,290
Expense reimbursements 4,283 2,869 13,658 8,499
Mortgage interest income 446 508 1,626 1,008
-------- -------- -------- --------
Total operating and investment revenue 19,840 14,545 57,994 40,761
-------- -------- -------- --------
Other Revenue:
Real estate fee income 455 1,241 2,069 2,773
Equity in net income of affiliate 1,264 (99) 1,356 533
-------- -------- -------- --------
Total other revenue 1,719 1,142 3,425 3,306
-------- -------- -------- --------
Total revenue 21,559 15,687 61,419 44,067
-------- -------- -------- --------
Expenses:
Real estate taxes 4,187 3,036 12,554 8,323
Property operating and leasing 2,847 1,930 8,294 5,645
General and administrative 783 420 2,225 1,655
Depreciation and amortization 4,179 2,660 10,767 7,572
Interest expense:
Interest incurred, net 2,687 2,018 7,559 7,204
Amortization of deferred financing costs 193 293 589 892
-------- -------- -------- --------
Total expenses 14,876 10,357 41,988 31,291
-------- -------- -------- --------
Operating income 6,683 5,330 19,431 12,776
Other income(expense), net 59 28 126 (177)
-------- -------- -------- --------
Income before extraordinary item 6,742 5,358 19,557 12,599
Extraordinary item, early extinguishment of debt (1,430)
-------- -------- -------- --------
Net income $ 6,742 $ 5,358 $ 19,557 $ 11,169
-------- -------- -------- --------
-------- -------- -------- --------
Income before extraordinary item per share $0.35 $0.32 $1.04 $0.88
Extraordinary item per share (0.10)
-------- -------- -------- --------
Net income per share $0.35 $0.32 $1.04 $0.78
-------- -------- -------- --------
-------- -------- -------- --------
Distributions per share $0.420 $0.405 $1.260 $1.215
-------- -------- -------- --------
-------- -------- -------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
NINE MONTHS ENDED SEPTEMBER 30,
-------------------------------
1997 1996
-------- --------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,557 $ 11,169
Adjustments to reconcile net income to net cash provided
by operating activities:
Extraordinary item-early extinguishment of debt 1,430
Bad debts 175
Depreciation 10,159 7,277
Amortization of deferred financing costs 589 892
Other amortization 608 295
Incentive stock awards 265 91
Interest on converted debentures 10 73
Equity in net income of affiliate (1,356) (533)
Gain on disposal of real estate (140)
Net changes in:
Tenant accounts receivable (4,236) (1,370)
Prepaid expenses and other assets 495 1,331
Rents received in advance and security deposits 276 115
Accounts payable and accrued expenses (2,881) (3,054)
-------- --------
Net cash provided by operating activities 23,521 17,716
-------- --------
Cash flows from investing activities:
Change in restricted cash and cash equivalents (39,302) (7,957)
Acquisition of real estate (59,552) (58,711)
Additions to construction in progress (22,952)
Improvements and additions to properties (19,729) (13,479)
Disposition of real estate 2,297 19,187
Change in deposits on acquisitions (1,361) 165
Issuance of mortgage notes receivable (7,237) (6,609)
Repayment of mortgage notes receivable 5,669
Investment in and advances to affiliate (17,278) (619)
Receivable from affiliates and employees 56 9
Addition to deferred expenses (2,768) (1,819)
-------- --------
Net cash used in investing activities (162,157) (69,833)
-------- --------
Cash flows from financing activities:
Proceeds from sale of common shares of beneficial interest 71,325 82,120
Offering costs paid (4,050) (1,967)
Proceeds from issuance of mortgage notes payable 55,000 28,643
Proceeds from issuance of line of credit 129,350
Proceeds from issuance of notes payable 250
Repayments of mortgage notes payable (2,586) (25,464)
Repayments of line of credit (72,200)
Repayments of notes payable (2,335) (57)
Distributions (23,071) (22,273)
Conversion of convertible subordinated debentures payable (1)
-------- --------
Net cash provided by financing activities 151,432 61,252
-------- --------
Net change in cash and cash equivalents 12,796 9,135
Cash and cash equivalents, beginning of the year 1,070 2,878
-------- --------
Cash and cash equivalents, end of period $ 13,866 $ 12,013
-------- --------
-------- --------
</TABLE>
The accompanying notes are an integral part of these consolidated financial
statements.
<PAGE>
CENTERPOINT PROPERTIES TRUST AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
BASIS OF PRESENTATION:
These unaudited Consolidated Financial Statements of CenterPoint Properties
Trust (formerly CenterPoint Properties Corporation - see Note 8), a Maryland
real estate investment trust, and Subsidiaries (collectively 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,
1996, 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, 1996, 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, 1996, 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. COMMON SHARES OF BENEFICIAL INTEREST AND RELATED TRANSACTIONS
Under the terms of the Company's 1995 Restricted Stock Incentive Plan,
adopted in 1995, certain key employees were granted 12,444 restricted
shares of the Company's common shares of beneficial interest in March,
1997. Shares were awarded in the name of each of the participants, who
have all the rights of other common shareholders, 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 shareholders' equity, is being amortized to expense over the
eight year vesting period.
Under the terms of the Company's 1995 Director Stock Plan, adopted in 1995,
<PAGE>
certain directors were granted 1,921 unrestricted shares of the Company's
common shares of beneficial interest in May, 1997. Shares were awarded in
the name of each of the participants, who have all the rights of other
common shareholders.
Under the terms of Company's 1993 Stock Option Plan, options for 226,769
shares of common shares of beneficial interest were granted to officers and
employees in March, 1997 at $31.50 per share and 15,000 shares of common
shares of beneficial interest were granted to directors in May, 1997 at
$30.625 per share. During the first, second and third quarters of 1997,
8,624, 1,635, and 12,957 options were exercised. During the third quarter,
17,904 options expired due to employee terminations.
Income per share amounts are based on the weighted average of common and
common equivalent (share options) shares of beneficial interest outstanding
of 19,377,337 and 16,685,417 for the three months ended September 30, 1997
and 1996, respectively, and 18,818,869 and 14,293,487 for the nine months
ended September 30, 1997 and 1996, respectively. The assumed conversion of
convertible subordinated debentures into common shares of beneficial
interest for purposes of computing fully diluted earnings per share would
be anti-dilutive.
In February, 1997, the Financial Accounting Standards Board (FASB) issued
Statement of Financial Standards (SFAS) No. 128 (SFAS 128), "Earnings per
Share", effective for financial statements issued after December 15, 1997.
The Company intends to adopt SFAS 128 in fiscal year 1997. The Company has
determined the financial impact to be immaterial for each of the three
month periods ended and the nine month periods ended September 30, 1997 and
1996.
SFAS No. 129, "Disclosure of Information about Capital Structure," was also
issued in February 1997 and is effective for periods ending after December
15, 1997. This statement establishes standards for disclosing information
about an entity's capital structure by superseding and consolidating
previously issued accounting standards. The financial standards of the
Company are prepared in accordance with the requirements of SFAS No. 129.
In June, 1997, the FASB issued SFAS Statement No. 130, "Reporting
Comprehensive Income." This statement, effective for fiscal years
beginning after December 15, 1997, would require the Company to report
components of comprehensive income in a financial statement that is
displayed with the same prominence as other financial statements.
Comprehensive income is defined by Concepts Statement No. 6, "Elements of
Financial Statements" as the change in equity of a business enterprise
during a period from transactions and other events and circumstances from
nonowner sources. It includes all changes in equity distributions to
owners. The Company has not yet determined its comprehensive income.
<PAGE>
In June, 1997, the FASB issued SFAS Statement No. 131, "Disclosures about
Segments of an Enterprise and Related Information." This statement,
effective for financial statements for periods beginning after December 15,
1997, requires that a public business enterprise report financial and
descriptive information about its reportable operating segments.
Generally, financial information is required to be reported on the basis
that it is used internally for evaluating segment performance and deciding
how to allocate resources to segments. This Company has not yet determined
the impact of this statement on it's financial statements.
On August 19, 1997, the Company declared a fourth quarter dividend of $0.42
per share to be paid December 1, 1997 to shareholders of record on November
10, 1997.
2. LONG-TERM DEBT AND LINES OF CREDIT
On September 8, 1997, the Company completed a $55 million tax-exempt bond
financing for the development of the Company's O'Hare Express air freight
center. CenterPoint O'Hare, L.L.C. ("CenterPoint O'Hare"), a subsidiary of
the Company, is the lessee of approximately 50 acres of land at O'Hare
International Airport and is constructing the O'Hare Express Center, a
825,000 square foot air freight forwarding and warehouse complex,
anticipated to be constructed in three phases over a three-year period.
The Company arranged for the tax-exempt financing to complete the remainder
of the O'Hare Express Center through the issuance of City of Chicago
Variable/Fixed Rate Demand Special Facilities Airport Revenue Bonds
(CenterPoint O'Hare L.L.C. Project Series 1997) in the principal amount of
$55 million with an initial term of 35 years which may be extended under
certain circumstances. The cash proceeds from the financing are restricted
for use in completion of the project. The tax-exempt bonds were issued at
par with an initial variable interest rate of 4% and were credit enhanced
by an initial letter of credit issued by The First National Bank of Chicago
for an initial term of 5 years. The Company guaranteed CenterPoint
O'Hare's obligations under the reimbursement agreement pursuant to which
the initial letter of credit was issued. In order to maintain the
tax-exempt status of the bonds, the term of the Ground Lease, under which
CenterPoint O'Hare leases the approximately 50 acres at O'Hare
International Airport from the City of Chicago, was shortened from 60 years
to approximately 45 years but provides CenterPoint O'Hare with an option to
extend the term for an additional 13 years.
3. ACQUISITION AND DISPOSITION OF REAL ESTATE
On January 17, 1997, the Company acquired a fully leased 300,000 square
foot industrial property located in Waukegan, Illinois for approximately
$6.4 million in a sale/lease-back transaction. The acquisition was funded
with an advance from the Company's line of credit of $5.1 million and the
balance from working capital. The seller was Outboard Marine Corporation.
A fully leased 243,000 square foot industrial property located in West
Allis,
<PAGE>
Wisconsin was purchased on April 3, 1997 for approximately $4.7 million.
The property, purchased from individual investors, was funded entirely with
an advance from the Company's line of credit.
The Company acquired an aggregate of 1,664,300 square feet of industrial
property during May, 1997. On May 14, 1997, four fully leased buildings
totaling 635,300 square feet and located in Bedford Park, Illinois were
acquired for approximately $13.8 million from New York Life Insurance
Company. A fully leased 21,000 square foot property located in Downers
Grove, Illinois was acquired on May 23, 1997 for approximately $1.0 million
from LaSalle National Bank, as Trustee. On May 28, 1997, a 1,008,000
square foot property located in Montgomery, Illinois was acquired for
approximately $12.3 million from All-Steel, Inc. The transactions were
funded with advances from the Company's line of credit totaling of $12.3
million and the balance from working capital.
On August 28, 1997, a 888,335 square foot warehouse/industrial building,
located in Elk Grove Village, Illinois, was purchase from Sears Development
Co. The purchase price of approximately $18.0 million was funded with an
advance on the Company's line of credit of $16.0 million and the balance
was funded from working capital.
Two industrial/warehouse properties, totaling 254,796 square feet, were
purchased during September 1997. On September 3, 1997, a fully leased
80,076 square foot facility in Chicago, Illinois was purchased from
Specialty Steel Products, Inc. for approximately $1.7 million funded with
working capital. On September 11, 1997, a 174,720 square foot facility in
Bedford Park, Illinois was purchased in a sale/lease-back transaction for
approximately $3.7 million from Petrie Retail, Inc. The acquisition was
funded with a $3.0 advance on the Company's line of credit and the balance
was funded from working capital.
A property, located in Wood Dale, Illinois was sold in June, 1997 for
approximately $1.7 million upon the execution of a tenant purchase option.
In September, 1997, an industrial property located in Alsip, IL was sold in
a transaction qualifying as a tax-free exchange under applicable provisions
of the Internal Revenue Code. The consideration for the property was
approximately $0.7 million. This amount was used to acquire qualified
replacement property in the fourth quarter.
4. MORTGAGE NOTES RECEIVABLE
In March, 1997, the Company assigned its $4.8 million mortgage note
receivable, collateralized by a property in Bedford Park, Illinois, for a
net fee of $176,000.
In September, 1997, a mortgage note receivable of approximately $0.9
million was
<PAGE>
repaid upon its maturity date.
5. 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 in the
form of non-voting equity ownership which qualifies CRS as an
unconsolidated taxable subsidiary.
As of September 30, 1997, the Company had advanced to CRS approximately
$30.4 million under a demand loan with an interest rate of 8.125%. The
proceeds of the loan were applied towards development projects currently
under construction and the purchase of land held for future development.
Principal and interest are due upon demand.
The Company typically purchases development projects upon completion of
construction on a turn-key basis or develops the property under guaranteed
maximum price contracts, substantially eliminating any construction risk.
6. SUPPLEMENTAL INFORMATION TO STATEMENTS OF CASH FLOWS (IN THOUSANDS)
Supplemental disclosures of cash flow information for nine months ended
September 30, 1997 and 1996:
1997 1996
-------- --------
Interest paid $ 8,308 $ 8,302
Interest capitalized 383 82
Construction loan transferred to affiliate 4,650
In conjunction with the acquisition of real estate, the Company acquired
the following asset and assumed the following liability amounts:
1997 1996
-------- --------
Purchase of real estate $ 61,415 $ 75,681
Accounts receivable 614
Prepaid expenses and other assets 1 125
Mortgage notes payable (13,307)
Rents received in advance and security deposits (283)
Accrued expenses (1,581) (4,402)
-------- --------
Acquisition of real estate $ 59,552 $ 58,711
-------- --------
-------- --------
<PAGE>
In conjunction with the disposition of real estate, the Company disposed of
the following asset and liability amounts:
1997 1996
-------- --------
Disposal of real estate $ 2,276 $ 22,663
Tenant accounts receivable 40 592
Deferred costs, net 44
Prepaid expenses and other assets 22
Mortgage notes receivable (100) (935)
Mortgage notes payable (2,207)
Accounts payable and accrued expenses (79) (948)
Rents received in advance and security deposits (24)
Gain on disposal of assets 140
-------- --------
Disposition of real estate $ 2,297 $ 19,187
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Conversion of convertible subordinated debentures payable:
1997 1996
-------- --------
Convertible subordinated debentures converted $ 2,590 $ 8,654
141,901 and 474,175 common shares of beneficial
interest issued at $18.25 per share, respectively 2,589 8,654
-------- --------
Cash disbursed for fractional shares $ 1 $ 0
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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, results
of operations and liquidity of the Company.
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, 1997, nine 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. The option to purchase 655 Wheat Lane, Wood Dale,
IL, was exercised by the tenant, who purchased the property in June, 1997
for a purchase price of $1.7 million. Management is not currently aware of
planned exercises of other such options and believes that any potential
exercises would not materially affect the results or prospects of the
Company.
8. SUBSEQUENT EVENTS
To date, four warehouse/industrial properties have been purchased in
October 1997.
<PAGE>
A 1,750,000 square foot facility, located in McCook, Illinois, was
purchased from General Motors Corporation on October 2, 1997 in a
sale/lease-back transaction. The purchase price of approximately $5.9
million was funded with an advance on the Company's line of credit. On
October 9, 1997, a 242,690 square foot fully leased building, located in
Bedford Park, Illinois. was purchased for approximately $5.4 million from
Sterling Logistics Real Estate Corporation. The acquisition was funded
with an advance on the Company's line of credit. A fully leased 41,976
square foot property was purchased on October 15, 1997 for approximately
$1.4 million. The property, located in Elk Grove Village, Illinois, was
purchased from NBD Trust Company, as Trustee, and was funded with working
capital. On October 23, 1997 a 118,041 square foot industrial building
located in Romeoville, Illinois was purchased for approximately $2.9
million. The acquisition, purchased from McKesson Corporation in a
sale/lease back transaction, was funded with working capital.
On October 15, 1997, the Company completed a reorganization pursuant to
which it converted from a Maryland corporation to a Maryland real estate
investment trust by means of a merger of CenterPoint Properties Corporation
(the "Corporation") with and into the Company, which prior to the merger
was a wholly-owned subsidiary of the Corporation, with the Company as the
surviving entity. The reorganization was effected to eliminate the
obligation to pay substantial franchise taxes each year in the State of
Illinois. Pursuant to a Plan of Reorganization, which was approved by the
stockholders of the Corporation at a Special Meeting of Stockholders held
on October 1, 1997, each issued and outstanding share of common stock of
the corporation, par value $.001 per share (the "Common Stock"), was
converted into one common share of beneficial interest in the Company, par
value $.001 per share (the "Common Shares"), each outstanding share of
Class B common stock of the Corporation was converted into one Class B
common share of beneficial interest in the Company; and the outstanding
principal amount of the Corporation's 8.22% Convertible Subordinated
Debentures due 2004 was assumed by the Company and converted into the same
principal amount of 8.22% Convertible Subordinated Debentures due 2004 of
the Company (the "Company Debentures"). The Common Shares and the Company
Debentures currently trade on the NYSE in the same manner as the Common
Stock and debentures of the Corporation, respectively, traded on the NYSE
prior to consummation of the merger.
No convertible subordinated debentures have been converted since September
30, 1997.
9. PRO FORMA FINANCIAL INFORMATION
See Part II, OTHER INFORMATION, Item 5 which includes the Company's Pro
Forma Condensed Statements of Operations for the nine months ended
September 30, 1997 and the year ended December 31, 1996 (Unaudited) along
with audited statements of revenue and certain expenses for the year ended
December 31, 1996 for The Sears Property and the Bedford Park Properties
acquired during 1997.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF
OPERATIONS AND FINANCIAL CONDITION.
RESULTS OF OPERATIONS - 1997 COMPARED WITH 1996:
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, 1996.
RESULTS OF OPERATIONS
COMPARISON OF NINE MONTHS ENDED SEPTEMBER 30, 1997 TO NINE MONTHS ENDED
SEPTEMBER 30, 1996.
Total revenues in the first nine months of 1997 increased by $17.4 million,
or 39.4%, 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, 1997.
Operating and investment revenues increased by $17.2 million in 1997. Full
period income from properties acquired in 1996 and eleven acquisitions in
1997 accounted for most of the increase. Also, mortgage interest income
contributed $0.6 million in increased operating and investment revenue from
new mortgages receivable acquired in the second half of 1996.
Other revenue for the nine months ended September 30, 1997 increased by
$0.1 million over the same period in 1996, as the volume of merchant
development business, through real estate fee income and equity in net
income of affiliate, continues at relatively the same pace as last year.
Real estate taxes increased $4.2 million, or 50.7%, due to full period
expenses for 1996 acquisitions and expenses related to 1997 acquisitions.
Full period expenses from 1996 acquisitions and expenses related to 1997
acquisitions account for $1.7 of the $2.6 million increase in property
operating and leasing expense. Property operating and leasing expense
includes insurance, utilities, repairs and maintenance and property
management costs. The balance, $0.9 million, of the increase is due to
increased property management costs due to the increase in properties and
general expense increases throughout the portfolio, most of which are
reimbursed by tenants.
General and administrative expenses increased by $0.6 million, or 34.4%,
due to the growth of the Company and increased corporate costs, but
decreased from 3.8% to
<PAGE>
3.6% of revenue.
Depreciation and other amortization increased by $3.2 million, from $7.6
million in 1996 to $10.8 million in 1997. $2.4 million of the increase is
due to the full period of depreciation on acquisitions completed during
1996 and acquisitions to date in 1997, with the balance attributable to
building improvements.
Interest incurred increased by $0.4 million over the same period last year
due to increased average loan balances over the previous, but was partially
offset by reduced interest rates.
Amortization of financing costs decreased by $0.3 million due to the
replacement of secured debt with unsecured debt during the fourth quarter
of 1996.
Other income (expense), generally non-operating items, increased in income
by $0.3 million from the same period last year largely due to a gain on the
disposition of a property in 1997, whereas disposition of property in 1996
generated a small loss.
In 1996, an extraordinary charge of $1.4 million was incurred representing
the unamortized balance of deferred costs associated with the initial
funding of the Company's 1991 and 1993 tax exempt bonds. The bonds were
refunded by issuing new tax exempt and taxable bonds in 1996.
As a result of the factors described above, net income increased 75.1%, or
$8.4 million, from $11.2 million for the first nine months of 1996 to $19.6
million for the first nine months 1997. Earnings before interest, income
taxes, depreciation and amortization for the nine months increased by $10.2
million, from $28.3 million in 1996 to $38.5 million in 1997.
The Company reviews it's operating results by comparing Net Revenue Margin
between periods. Net Revenue Margin is calculated by dividing net revenue
(total operating and investment revenue less real estate taxes and property
operating and leasing expense) by adjusted operating and investment revenue
(operating and investment revenue less expense reimbursements, adjusted for
leases containing expense stops). This margin indicates the percentage of
revenue actually retained by the Company or, alternatively, the amount of
operating expenses not recovered by tenant reimbursements. The margin for
the first nine months of 1997 was 89.1% compared with 88.2% for the same
period last year, an increase of 0.9%.
On a "same-store" basis (comparing the first nine months results of
operations of 1997, on a cash basis, of the properties owned at January 1,
1996, with the results of operations of the same properties at September
30, 1996), the Company recognized a 4.5 % increase in net operating income
primarily due to the lease-up of vacant spaces, rental increases on renewed
leases and contractual increases in minimum rent under leases in place.
<PAGE>
COMPARISON OF THREE MONTHS ENDED SEPTEMBER 30, 1997 TO THREE MONTHS ENDED
SEPTEMBER 30, 1996,
Total revenues for the three months ended September 30, 1997 increased by
$5.9 million or 37.4%, over the same period last year. Operating and
investment revenues increased by $5.3 million for the same period in 1997.
Full period income from properties acquired in 1996 and new acquisitions in
1997 accounted for most of the increase.
Other revenue for the three months ended September 30, 1997 increased by
$0.6 million over the same period in 1996, bringing merchant development
business, through real estate fee income and equity in net income of
affiliate, in line with the same pace of a year ago.
Real estate taxes increased $1.2 million, or 37.9%, due to full period
expenses for 1996 acquisitions and expense related to 1997 acquisitions.
Property operating and leasing expenses, which includes insurance,
utilities, repairs and maintenance and property management costs, increased
by $0.9 million, or 47.5%. The increase resulted from full period expenses
for 1996 acquisitions and expenses related to 1997 acquisitions of $0.5
million and the balance from operating cost increases throughout the
portfolio.
General and administrative expenses increased by $0.4 million, or 86.4%,
due to the growth of the Company and increased corporate costs, but
continues at 3.6% of revenue as does the year to date expenses, a drop of
0.2% over the same period last year.
Depreciation and other amortization increased by $1.5 million, from $2.7
million in 1996 to $4.2 million in 1997. $0.9 of the increase is due to
the full period of depreciation on 1996 acquisitions and expense related to
1997 acquisitions, with the balance attributable to building improvements
over the past year.
Interest incurred increased by $0.7 million over the same period last year
due to an increase in the average loan balance for the quarter over the
same quarter last year offset by a reduction in interest rates for the
period.
Amortization of financing costs decreased by $0.1 million due to the
replacement of secured debt with unsecured debt during the fourth quarter
of 1996.
As a result of the factors described above, net income increased 25.8%, or
$1.4 million, from $5.3 million for the third quarter of 1996 to $6.7
million for the third quarter of 1997. Earnings before interest, income
taxes, depreciation and amortization for the three months increased by $3.5
million, from $10.3 million in 1996 to $13.8 million in 1997.
<PAGE>
The Company reviews it's operating results by comparing Net Revenue Margin
between periods. Net Revenue Margin is calculated by dividing net revenue
(total operating and investment revenue less real estate taxes and property
operating and leasing expense) by adjusted operating and investment revenue
(operating and investment revenue less expense reimbursements, adjusted for
leases containing expense stops). This margin indicates the percentage of
revenue actually retained by the Company or, alternatively, the amount of
operating expenses not recovered by tenant reimbursements. The margin for
the third quarter of 1997 was 88.7% compared to 86.7% for the third quarter
of 1996, an increase of 1.0%.
On a "same-store" basis (comparing the third quarter results of operations
for 1997, on a cash basis, of the properties owned at July 1, 1996, with
the results of operations of the same properties for the third quarter of
1996), the Company recognized a 6.4% increase in net operating income
primarily due to the lease-up of vacant spaces, rental increases on renewed
leases and contractual increases in minimum rent under leases in place.
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, 1997, cash flow
from operations was $23.5 million. Cash flow during the period was used to
pay $23.1 million of distributions.
Acquisitions, construction in progress, advances to affiliate, increases to
mortgage notes receivable, improvements and additions to properties, and
additions to deferred expenses of approximately $129.5 million for the nine
months ended September 30,1997 were funded with a net increase in
borrowings under the Company's line of credit totaling $57.2 million,
repayment of mortgage notes receivable of $5.7 million, disposition of real
estate of $2.3 million, and the balance with net proceeds of the public
offering of common stock.
At September 30, 1997, the Company's debt constituted approximately 27% of
its fully diluted market capitalization. At that date, the Company's fully
diluted equity market capitalization was approximately $715 million, and
its fully diluted total market capitalization was approximately $985
million. The Company's leverage ratios benefited in the first nine months
of 1997 from the conversion of approximately $2.6 million of its 8.22%
Convertible Subordinated Debentures, due 2004, to 141,901 shares of common
stock.
At September 30, 1997, the Company had outstanding borrowings of
approximately $103.3 million under its revolving lines of credit
(approximately 17% of the Company's fully diluted market capitalization),
with current remaining availability
<PAGE>
of approximately $31.7 million. As of September 30, 1997, the Company's
line of credit consists of a $135 million unsecured credit facility co-led
by First Chicago NBD and Lehman Brothers with participating banks including
ABN LaSalle, Bank of America, Dresdner Bank AG and NationsBank. The
Company is currently negotiating with its lenders to expand the line of
credit to $150 million in the future.
On September 8, 1997, the Company completed a $55 million tax-exempt bond
financing for the development of the Company's O'Hare Express air freight
center through the issuance of City of Chicago Variable/Fixed Rate Demand
Special Facilities Airport Revenue Bonds (CenterPoint O'Hare L.L.C. Project
Series 1997) in the principal amount of $55 million with an initial term of
35 years which may be extended under certain circumstances. The tax-exempt
bonds were issued at par with an initial variable interest rate of 4% and
were credit enhanced by an initial letter of credit issued by The First
National Bank of Chicago for an initial term of 5 years.
Of the net bond proceeds of $53.9 million, $39.8 was invested and
restricted for completion of the remainder of the O'Hare Express Center,
$6.0 was used to pay down the Company's line of credit and the balance was
utilized for working capital.
On March 6, 1997, the Company completed a public offering of 2,250,000
shares of common stock at $31.50 per share. Net proceeds from the
offering, after the underwriting discounts, were approximately $66.9
million. The proceeds of the offering were used to repay approximately
$58.2 million in borrowings then outstanding under the Company's lines of
credit, with the balance of $8.7 million to fund working capital
requirements. The public offering left the entire amount of the Company's
line of credit available.
As of September 30, 1997, the Company had a cash balance of $13.9 million.
The Company believes that its liquidity is adequate for operations and that
positive cash flow from operations, 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 1997, the Company declared distributions of
$23.1 million, representing an annualized distribution rate of
approximately $1.68 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.
No matters were submitted to a vote of security-holders in the third
quarter.
ITEM 5: OTHER INFORMATION
Between January 17, 1997 and October 9, 1997, the Company acquired thirteen
industrial/warehouse properties for an aggregate purchase price in excess
of 10% of the total assets of the Company as of December 31, 1996. See
Notes 3 and 8 of Notes to Consolidated Financial Statements in this Form
10-Q.
The following unaudited pro forma financial information and financial
statements are filed as part of this report:
(1) CenterPoint Properties Trust Unaudited Pro Forma Condensed
Statements of Operations for the nine months ended September 30,
1997 and the year ended December 31, 1996
(2) Statement of Combined Revenues and Certain Expenses for the year
ended December 31, 1996 for The Bedford Park Properties and
independent accountants report
(3) Statement of Revenues and Certain Expenses for the year ended May
31, 1997 for The Sears Property and independent accountants
report
(4) Statement of Combined Revenues and Certain Expenses for the year
ended December 31, 1996 for the 1997 Other Acquisitions
(unaudited)
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K
(a) The following documents are filed as part of this report:
(1) Exhibit 10.50 - Documents relating to $55 million City of Chicago
Variable/Fixed Rate Demand Special Facilities Airport Revenue Bonds
(CenterPoint O'Hare, L.L.C. Project) Series 1997
(2) Exhibit 11 - Computation of Earnings per Share
(3) Exhibit 23 - Consent of independent accountants
(4) Exhibit 27 - Financial Data Schedule
<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 COMPANY
a Maryland Company
By: /S/ Paul S. Fisher
----------------------------------------------
Paul S. Fisher
Executive Vice President and
Chief Financial Officer
October 24, 1997 (Principal Accounting Officer)
<PAGE>
CENTERPOINT PROPERTIES TRUST
PRO FORMA CONDENSED STATEMENTS OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997 AND THE YEAR
ENDED DECEMBER 31, 1996 (UNAUDITED)
These unaudited pro forma Condensed Statements of Operations are presented as if
the acquisition of The Sears Property, The Bedford Park Properties and the 1997
Other Acquisitions, the July 2, 1996 offering of common stock, the March 6, 1997
offering of common stock, the acquisition of properties in 1996, and the
disposition of certain properties in 1996 and 1997 occurred on January 1, 1996.
Such pro forma information is based upon (i) the historical consolidated
statements of operations of CenterPoint Properties Trust and Subsidiaries (the
"Company"); (ii) the statements of revenues and certain expenses of The Sears
Property, The Bedford Park Properties, and the 1997 Other Acquisitions; and
(iii) with respect to the 1996 acquisitions, the adjustments include applicable
revenue and certain expense amounts. The required audits of statements of
revenues and certain expenses for 1996 acquisitions were included in the
Company's Form 8-K/A filed with the Commission on November 27, 1996. Revenues
and certain expenses for The Sears Property for the year ended May 31, 1997 are
being used to present the 1996 pro forma results of the Company as information
for the year ended December 31, 1996 is not available. Management believes that
information for the year ended May 31, 1997 is a fair representation of activity
for this property based on leases in place. The following should be read in
conjunction with the financial statements and notes thereto included elsewhere
herein. In the Company's opinion, all adjustments necessary to reflect the
effects of these transactions have been made.
These unaudited pro forma Condensed Statements of Operations are not necessarily
indicative of what actual results of the Company would have been assuming such
transactions had been completed as of January 1, 1996, nor do they purport to
represent the results of operations for future periods.
<PAGE>
CENTERPOINT PROPERTIES TRUST
PRO FORMA STATEMENT OF OPERATIONS
FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1997
(in thousands except for per share data)
<TABLE>
<CAPTION>
CenterPoint The Sears The Bedford 1997 Other Adjustments Pro Forma
(Historical) Property Park Properties Acquisitions
(Historical) (Historical) (Historical)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Total revenues $ 61,419 $ 2,312 $ 1,738 $ 2,095 $ (2,282)(A) $ 65,282
-------- -------- -------- -------- -------- --------
Expenses:
Operating expenses, excluding
depreciation and amortization 20,848 994 710 647 (828)(A) 22,371
Interest expense, net 7,559 911(B) 8,470
General and administrative 2,225 2,225
Depreciation and amortization 11,356 695(C) 12,051
Other (income) expense (126) (126)
-------- -------- -------- -------- -------- --------
Total expenses 41,862 994 710 647 778 44,991
-------- -------- -------- -------- -------- --------
Income before extraordinary item $ 19,557 $ 1,318 $ 1,028 $ 1,448 $ (3,060) $ 20,291
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Income before extraordinary item
per share $ 1.04 $ 1.05
-------- --------
-------- --------
The accompanying notes are an integral part of the pro forma statement of operations
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST
PRO FORMA STATEMENT OF OPERATIONS
FOR THE YEAR ENDED DECEMBER 31, 1996
(in thousands except for per share data)
<TABLE>
<CAPTION>
CenterPoint The Sears The Bedford 1997 Other Adjustments Pro Forma
(Historical) Property Park Properties Acquisitions
(Historical) (Historical) (Historical)
------------ ------------ ------------ ------------ ------------ ------------
<S> <C> <C> <C> <C> <C> <C>
Total revenues $ 63,330 $ 3,017 $ 2,613 $ 2,782 $ 5,031(D) $ 76,773
-------- -------- -------- -------- -------- --------
Expenses:
Operating expenses, excluding
depreciation and amortization 20,750 1,285 1,018 773 3,424(D) 27,250
Interest expense, net 9,865 (918)(B) 8,947
General and administrative 2,568 2,568
Depreciation and amortization 11,775 2,022(C) 13,797
Other (income) expense 100 100
-------- -------- -------- -------- -------- --------
Total expenses 45,058 1,285 1,018 773 4,528 52,662
-------- -------- -------- -------- -------- --------
Income before extraordinary item $ 18,272 $ 1,732 $ 1,595 $ 2,009 $ 503 $ 24,111
-------- -------- -------- -------- -------- --------
-------- -------- -------- -------- -------- --------
Income before extraordinary item
per share $ 1.22 $ 1.27
-------- --------
-------- --------
The accompanying notes are an integral part of the pro forma statement of operations
</TABLE>
<PAGE>
CENTERPOINT PROPERTIES TRUST
NOTES TO PRO FORMA STATEMENT OF OPERATIONS
(in thousands except share data)
(A) Decrease reflects the elimination of revenues and expenses included in the
statements of revenue and certain expenses which are also included in the
Company's statement of operations since the various dates of acquisition
(revenues - $2,063; expenses - $744) plus the elimination of revenues and
expenses of the properties disposed of during 1997 (revenues - $219;
expenses - $84).
(B) Increase reflects the interest costs associated with the acquisition of the
properties (1997 - $1,702; 1996 - $5,372) less the interest savings
associated with the disposition of properties during 1997 and 1996 (1997 -
$87; 1996 - $275) less the interest costs eliminated from the application
of proceeds from the July, 1996 offering of common shares and the March,
1997 offering of common shares (1997 - $704; 1996 - $6,015).
(C) Increase reflects depreciation expense related to the acquisition of
properties less the depreciation expenses related to the properties
disposed of during 1996 and 1997 (1996 - $1,787; 1997 - $614) plus
amortization expense related to the acquisition of properties less the
amortization expense related to the properties disposed of during 1996 and
1997 (1996 - $235; 1997 - $81).
(D) Increase reflects the addition of revenues and expenses included in the
Company's statements of operations from the properties acquired in 1996
(revenues - $6,857; expenses - $3,807) less the elimination of revenues
and expenses for the properties disposed of during 1996 and 1997 (revenues
- $1,826; expenses - $383).
(E) Based on 18,818,869 and 15,008,053 historical (19,338,100 and 18,983,053 -
pro forma) average number of common and common equivalent shares
outstanding for the nine months ended September 30, 1997 and the year ended
December 31, 1996, respectively. Conversion of all debentures into common
stock would be anti-dilutive.
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE BEDFORD PARK PROPERTIES
TABLE OF CONTENTS
PAGE(S)
Report of Independent Accountants 1
Combined Statement of Revenues and Certain Expenses
for the year ended December 31, 1996 2
Notes to Combined Statement of Revenues and 3-4
Certain Expenses
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
CenterPoint Properties Trust
We have audited the combined statement of revenues and certain expenses of The
Bedford Park Properties as described in Note 1 for the year ended December 31,
1996. This financial statement is the responsibility of The Bedford Park
Properties' management. Our responsibility is to express an opinion on this
financial statement based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
the Form 10-Q of CenterPoint Properties Trust and is not intended to be a
complete presentation of The Bedford Park Properties' revenues and expenses.
In our opinion, the combined financial statement referred to above presents
fairly, in all material respects, the revenues and certain expenses of The
Bedford Park Properties for the year ended December 31, 1996 in conformity with
generally accepted accounting principles.
Chicago, Illinois Coopers & Lybrand L.L.P
September 24, 1997
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE BEDFORD PARK PROPERTIES
COMBINED STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED DECEMBER 31, 1996
Revenues $ 2,613,374
-----------
Expenses:
Property operating and maintenance 103,967
Real estate taxes 892,040
Insurance 22,236
-----------
Total Expenses 1,018,243
-----------
Revenues in excess of certain expenses $ 1,595,131
-----------
-----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENT.
2
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE BEDFORD PARK PROPERTIES
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The Combined Statement of Revenues and Certain Expenses (the "Statement")
includes the combined operations of the four Bedford Park Properties, which
have been acquired by CenterPoint Properties Trust (the "Trust"). The
Trust intends to continue the leasing and management of the properties to
prospective and existing tenants. The properties have been acquired in a
singular transaction involving unrelated third-parties. A summary of the
Bedford Park Properties is as follows:
APPROXIMATE
DATE SQUARE FEET PURCHASE
LOCATION ACQUIRED (UNAUDITED) PRICE
6464 W. 51st Street, 5/16/97 209,000 $4,667,000
Bedford Park, Illinois
6500 W. 51st Street, 5/16/97 185,000 $4,025,000
Bedford Park, Illinois
7447 S. Central Ave., 5/16/97 118,000 $2,184,000
Bedford Park, Illinois
7525 Sayre Ave., 5/16/97 123,000 $2,929,000
Bedford Park, Illinois
BASIS OF PRESENTATION
The Statement is not representative of the actual operations of the Bedford
Park Properties for the periods presented as certain expenses, primarily
depreciation and amortization expense, interest expense, management fees
and certain corporate expenses, which may not be comparable to the expenses
expected to be incurred by the Trust in the proposed future operations of
the Bedford Park Properties, have been excluded.
3
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE BEDFORD PARK PROPERTIES
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES, CONTINUED
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
CONTINUED
REVENUE RECOGNITION
Certain leases of the Bedford Park Properties provide for tenant occupancy
during periods for which no rent is due or when minimum lease payments
increase over the term of the lease. Rental revenues for the full period
of occupancy are recorded on a straight-line basis over the lives of the
leases.
Recoveries from tenants for taxes, insurance and other property operating
expenses are recognized as revenues in the period the applicable costs are
incurred.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. Actual results could differ from those estimates.
2. FUTURE RENTAL REVENUES
Under noncancelable operating lease agreements in effect as of December 31,
1996, tenants are committed to pay, in the aggregate, the following minimum
base lease rentals:
YEARS ENDING
1997 $1,386,000
1998 1,159,000
1999 1,033,000
2000 459,000
----------
Totals $4,037,000
----------
----------
4
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE SEARS PROPERTY
TABLE OF CONTENTS
PAGE(S)
Report of Independent Accountants 1
Statement of Revenues and Certain Expenses
for the year ended May 31, 1997 2
Notes to Statement of Revenues and 3-4
Certain Expenses
<PAGE>
REPORT OF INDEPENDENT ACCOUNTANTS
To the Board of Trustees of
CenterPoint Properties Trust
We have audited the statement of revenues and certain expenses of The Sears
Property as described in Note 1 for the year ended May 31, 1997. This financial
statement is the responsibility of The Sears Property's management. Our
responsibility is to express an opinion on this financial statement based on our
audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statement is free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statement. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.
The accompanying statement was prepared for the purpose of complying with the
rules and regulations of the Securities and Exchange Commission for inclusion in
the Form 10-Q of CenterPoint Properties Trust and is not intended to be a
complete presentation of The Sears Property's revenues and expenses.
In our opinion, the financial statement referred to above presents fairly, in
all material respects, the revenues and certain expenses of The Sears Property
for the year ended May 31, 1997 in conformity with generally accepted accounting
principles.
Chicago, Illinois Coopers & Lybrand L.L.P.
October 21, 1997
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE SEARS PROPERTY
STATEMENT OF REVENUES AND CERTAIN EXPENSES
FOR THE YEAR ENDED MAY 31, 1997
Revenues $3,016,658
----------
Expenses:
Property operating and maintenance 804,199
Real estate taxes 422,498
Insurance 58,088
----------
Total Expenses 1,284,785
----------
Revenues in excess of certain expenses $1,731,873
----------
----------
THE ACCOMPANYING NOTES ARE AN INTEGRAL PART OF THE FINANCIAL STATEMENT.
2
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE SEARS PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS
The Statement of Revenues and Certain Expenses (the "Statement") includes
the operations of The Sears Property, which was acquired by CenterPoint
Properties Trust (the "Trust") from the Sears Development Company on August
28, 1997 for approximately $18 million. The property is located at 2525
Busse Highway in Elk Grove Village, Illinois and consists of approximately
888,000 square feet (unaudited). The Trust intends to continue the leasing
and management of the property to prospective and existing tenants. The
property was acquired in a singular transaction involving an unrelated
third-party.
BASIS OF PRESENTATION
The Statement is not representative of the actual operations of The Sears
Property for the period presented as certain expenses, primarily
depreciation and amortization expense, interest expense, management fees
and certain corporate expenses, which may not be comparable to the expenses
expected to be incurred by the Trust in the proposed future operations of
The Sears Property, have been excluded.
3
<PAGE>
CENTERPOINT PROPERTIES TRUST
THE SEARS PROPERTY
NOTES TO STATEMENT OF REVENUES AND CERTAIN EXPENSES, CONTINUED
1. BASIS OF PRESENTATION AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES,
CONTINUED
REVENUE RECOGNITION
Certain leases of The Sears Property provide for tenant occupancy during
periods for which no rent is due or when minimum lease payments increase
over the term of the lease. Rental revenues for the full period of
occupancy are recorded on a straight-line basis over the lives of the
leases.
Recoveries from tenants for taxes, insurance and other property operating
expenses are recognized as revenues in the period the applicable costs are
incurred.
ESTIMATES
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions. Actual results could differ from those estimates.
2. FUTURE RENTAL REVENUES
Under noncancelable operating lease agreements in effect as of May 31,
1997, tenants are committed to pay, in the aggregate, the following minimum
base lease rentals:
YEARS ENDING
Remainder of 1997 $1,268,000
1998 2,128,000
1999 2,162,000
2000 2,071,000
2001 1,296,000
2002 1,249,000
Thereafter 1,880,000
-----------
Totals
$12,054,000
-----------
-----------
4
<PAGE>
1997 OTHER ACQUISITIONS
CONDENSED HISTORICAL STATEMENTS OF REVENUES
AND CERTAIN EXPENSES
The Combined Statement of Revenues and Certain Expenses as shown below, present
the summarized results of operations of 4 of the 15 properties acquired by
CenterPoint Properties Trust and Subsidiaries (the "Company") during the period
January 1, 1997 through October 24, 1997 (the "1997 Other Acquisitions"). These
statements are exclusive of 5 properties (The Sears Property, and The Bedford
Park Properties) acquired by the Company, which have been audited and are
reported in Item 5 of this form 10-Q, dated October 24, 1997 and 6 properties
with no prior operating history.
The 1997 Other Acquisitions were acquired for an aggregate purchase price of
approximately $23.8 million, have an aggregate gross leasable area of 1,535,666
square feet and were 86% leased as of September 30, 1997. A description of each
property is included in either Notes 3 or 8 of Notes to Consolidated Financial
Statements in this Form 10-Q.
For the Nine Months Ended For the Year Ended
September 30, 1997 December 31, 1996
(Unaudited) (Unaudited)
----------- -----------
Revenues $ 2,095 $ 2,782
Property Operating Expenses
excluding Depreciation and
Amortization 647 773
--------- ---------
Revenues in excess of certain expenses $ 1,448 $ 2,009
--------- ---------
--------- ---------
<PAGE>
CREDIT AND REIMBURSEMENT AGREEMENT
DATED AS OF SEPTEMBER 1, 1997
AMONG
CENTERPOINT O'HARE, L.L.C., AS REIMBURSEMENT OBLIGOR,
CENTERPOINT PROPERTIES CORPORATION, AS GUARANTOR
THE FIRST NATIONAL BANK OF CHICAGO
AS ADMINISTRATIVE AGENT, LETTER OF CREDIT ISSUER AND LENDER
DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, AS CO-AGENT AND LENDER
THE SEVERAL OTHER LENDERS
FROM TIME TO TIME PARTIES HERETO
<PAGE>
TABLE OF CONTENTS
PAGE
ARTICLE I DEFINITIONS................................................... 2
ARTICLE II TERMS OF CREDIT AND DOCUMENTS................................. 19
2.1. Agreement to Provide Credit....................................... 19
2.2 Participation..................................................... 20
2.3 Reimbursement of Advances......................................... 20
2.4 Interest on Advances Other Than Term Loan Advances................ 21
2.5. Payment of Reimbursement Obligations.............................. 21
2.6 Issuing Bank Charges and Expenses................................. 23
2.7 Letter of Credit Fee.............................................. 23
2.8 Issuer Fee........................................................ 23
2.9 Transfer Fee...................................................... 23
2.10 Interest and Fee Basis............................................ 23
2.11. Applicable Margins................................................ 24
2.12 Cure.............................................................. 24
2.13. Method of Payment................................................. 25
2.14. Lending Installations............................................. 25
2.15. Non-Receipt of Funds by the Administrative Agent.................. 25
2.16. Reserved.......................................................... 26
2.17. Withholding Tax Exemption......................................... 26
2.18. Usury............................................................. 27
2.19. Application of Moneys Received.................................... 27
2.20. Letter of Credit Collateral Account............................... 28
ARTICLE III TERM LOAN FACILITY............................................ 28
3.1. Conversion to Term Loan........................................... 28
3.2. Conversion and Continuation of Outstanding Advances............... 28
3.3. Minimum Amount of Each LIBOR Advance.............................. 29
3.4. Optional Principal Payments....................................... 29
3.5. Changes in Interest Rate, Etc. for Term Loan Advances............. 29
3.6. Rates Applicable After Default For Term Loan Advances............. 30
3.7. Notes; Telephonic Notices......................................... 30
3.8. Interest Payment Dates for Term Loan Advances..................... 30
3.9. Notification of Interest Rates and Prepayments.................... 31
ARTICLE IV CHANGE IN CIRCUMSTANCES....................................... 31
4.1. Yield Protection.................................................. 31
4.2. Changes in Capital Adequacy Regulations........................... 32
4.3. Availability of LIBOR Advances.................................... 32
4.4. Funding Indemnification........................................... 33
4.5. Lender Statements; Survival of Indemnity ......................... 33
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(CONTINUED)
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4.6. Limitation on Guarantor's Liability............................... 33
ARTICLE V CONDITIONS PRECEDENT.............................................. 33
5.1. Issuance of Letter of Credit...................................... 33
ARTICLE VI REPRESENTATIONS AND WARRANTIES OF REIMBURSEMENT OBLIGOR.......... 36
6.1. Existence......................................................... 36
6.2. Authorization and Validity........................................ 36
6.3. No Conflict; Government Consent................................... 36
6.4. Financial Statements; Material Adverse Change..................... 36
6.5. Taxes............................................................. 37
6.6. Litigation and Contingent Obligations............................. 37
6.7. Subsidiaries...................................................... 37
6.8. ERISA............................................................. 37
6.9. Accuracy of Information........................................... 37
6.10. Regulation U...................................................... 37
6.11. Ownership of Properties........................................... 37
6.12. Investment Company Act............................................ 38
6.13. Public Utility Holding Company Act................................ 38
6.14. Insurance......................................................... 38
6.15. Environmental Matters............................................. 38
6.16. Property Manager.................................................. 39
ARTICLE VII REPRESENTATIONS AND WARRANTIES OF GUARANTOR................... 40
7.1. Existence......................................................... 40
7.2. Authorization and Validity........................................ 40
7.3. No Conflict; Government Consent................................... 40
7.4. Financial Statements; Material Adverse Change..................... 41
7.5. Taxes............................................................. 41
7.6. Litigation and Contingent Obligations............................. 41
7.7. Subsidiaries...................................................... 41
7.8. ERISA............................................................. 41
7.9. Accuracy of Information........................................... 42
7.10. Regulation U...................................................... 42
7.11. Material Agreements............................................... 43
7.12. Compliance With Laws.............................................. 43
7.13. Ownership of Properties........................................... 43
7.14. Investment Company Act............................................ 43
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(CONTINUED)
PAGE
7.15. Public Utility Holding Company Act................................ 43
7.16. Solvency.......................................................... 43
7.17. Insurance......................................................... 44
7.18. NYSE and REIT Status.............................................. 44
7.19. Environmental Matters............................................. 44
7.20. Licenses, etc..................................................... 46
7.21. Judgments......................................................... 46
7.22. Property Manager.................................................. 46
7.23. Updated Schedules................................................. 46
7.24. Unencumbered Assets............................................... 46
ARTICLE VIII COVENANTS..................................................... 49
8.1. Financial Reporting............................................... 49
8.2. Notice of Default................................................. 52
8.3. Conduct of Business............................................... 52
8.4. Taxes............................................................. 53
8.5. Insurance......................................................... 53
8.6. Compliance with Laws.............................................. 54
8.7. Maintenance of Properties......................................... 54
8.8. Inspection........................................................ 54
8.9. Maintenance of Status............................................. 54
8.10. Dividends......................................................... 54
8.11. Merger; Sale or Transfer of Assets................................ 55
8.12. Transfers of Unencumbered Assets.................................. 55
8.13. Transfer or Encumbrance of the O'Hare Project..................... 55
8.14. Ownership and Control............................................. 55
8.15. Subsidiaries and Qualifying Investment Affiliates................. 56
8.16. Liens............................................................. 56
8.17. Affiliates........................................................ 57
8.18. Interest Rate Hedging............................................. 57
8.19. Variable Interest Indebtedness.................................... 57
8.20. Consolidated Net Worth............................................ 57
8.21. Indebtedness and Cash Flow Covenants.............................. 58
8.22. Environmental Matters............................................. 58
8.23. Notification of Rating Change..................................... 59
8.24. Maximum Revenue from Single Tenant................................ 60
8.25. Negative Pledge................................................... 60
8.26. Manager........................................................... 60
8.27. Acceleration Notice............................................... 60
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(CONTINUED)
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8.28. Lien Searches; Title Searches.................................... 60
8.29. Additional Covenants............................................. 60
8.30. Calculation of Financial Covenants Upon Property Breaches........ 60
8.31 Optional Redemption of Bonds..................................... 61
ARTICLE IX DEFAULTS........................................................ 61
ARTICLE X ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES.................... 64
10.1. Acceleration and other Remedies.................................. 64
10.2. Amendments, Waivers, Decisions................................... 65
10.3. Preservation of Rights........................................... 66
ARTICLE XI GENERAL PROVISIONS............................................... 67
11.1. Survival of Representations...................................... 67
11.2. Governmental Regulation.......................................... 67
11.3. Taxes............................................................ 67
11.4. Headings......................................................... 67
11.5. Entire Agreement................................................. 67
11.6. Several Obligations; Benefits of this Agreement.................. 67
11.7. Expenses; Indemnification........................................ 67
11.8. Numbers of Documents............................................. 68
11.9. Accounting....................................................... 68
11.10. Severability of Provisions....................................... 68
11.11. Nonliability of Lenders, Arranger, and Administrative Agent...... 68
11.12. Publicity........................................................ 69
11.13. Brokers.......................................................... 69
11.14. Confidentiality.................................................. 69
11.15. Payment on a Non-Business Day.................................... 70
11.16. Telecopied or Telexed Documents.................................. 70
11.17. CHOICE OF LAW.................................................... 70
11.18. CONSENT TO JURISDICTION.......................................... 70
11.19. WAIVER OF JURY TRIAL............................................. 71
ARTICLE XII THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS.......... 71
12.1. Appointment...................................................... 71
12.2. Powers........................................................... 71
12.3. GeneralImmunity.................................................. 71
12.4. No Responsibility for Loans, Recitals, etc....................... 71
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12.5. Action on Instructions of Lenders................................ 72
12.6. Employment of Administrative Agents and Counsel.................. 72
12.7. Reliance on Documents; Counsel................................... 72
12.8. Administrative Agent's Reimbursement and Indemnification......... 72
12.9. Rights as a Lender............................................... 73
12.10. Lender Credit Decision........................................... 73
12.11. Successor Administrative Agent................................... 73
12.12. Notice of Defaults............................................... 74
12.13. Requests for Approval............................................ 74
12.14. Copies of Documents.............................................. 75
12.15. Defaulting Lenders............................................... 75
ARTICLE XIII RATABLE PAYMENTS.............................................. 76
13.1. Intentionally Deleted............................................ 76
13.2. Ratable Payments................................................. 76
ARTICLE XIV BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS.............. 76
14.1. Successors and Assigns........................................... 76
14.2. Participations................................................... 77
14.2.1. Permitted Participants; Effect.......................... 77
14.2.2. Voting Rights........................................... 77
14.3. Assignments...................................................... 77
14.3.1. Permitted Assignments................................... 77
14.3.2. Effect; Effective Date.................................. 78
14.4. Dissemination of Information..................................... 78
14.5. Tax Treatment.................................................... 79
14.6. Possession of Credit Documents and Register...................... 79
ARTICLE XV NOTICES.......................................................... 79
15.1. Giving Notice.................................................... 79
15.2. Change of Address................................................ 79
15.3. Accounts......................................................... 79
ARTICLE XVI COUNTERPARTS.................................................. 80
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Exhibits:
Exhibit A Table of Applicable Margins and Letter of Credit Fee
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
Exhibit G Form of Letter of Credit
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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CREDIT AND REIMBURSEMENT AGREEMENT
This Credit and Reimbursement Agreement, dated as of September 1, 1997,
is among CENTERPOINT O'HARE, L.L.C., an Illinois limited liability company
("REIMBURSEMENT OBLIGOR"), CENTERPOINT PROPERTIES CORPORATION, a Maryland
corporation (the "GUARANTOR"), the several banks, financial institutions and
other entities from time to time parties to this Agreement (collectively, the
"LENDERS"), DRESDNER BANK AG NEW YORK AND GRAND CAYMAN BRANCHES, not
individually but as "CO-AGENT" and THE FIRST NATIONAL BANK OF CHICAGO, not
individually, but as "ADMINISTRATIVE AGENT".
RECITALS
A. The Guarantor 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 Guarantor's common stock is listed on the New York Stock
Exchange, and the Guarantor is qualified as a real estate investment trust.
C. The Guarantor is a 95% member of the Reimbursement Obligor, which
is the lessee of approximately 50 acres of land adjacent to O'Hare Airport
under that certain Ground Lease for Site 19 O'Hare International Airport from
the City of Chicago (the "CITY") to O'Hare Tech Center Associates, L.P.,
dated August 15, 1995, as amended by a Corrective and Implementing Supplement
to Ground Lease dated May 8, 1996. O'Hare Tech Center Associates, L.P.
assigned all of its right, title and interest in and to the Lease to the
Reimbursement Obligor by an Assignment and Assumption of Ground Lease dated
May 10, 1996, as amended by a Second Corrective and Implementing Supplement
to Ground Lease dated October 25, 1996 and as amended by Amendment to Ground
Lease dated as of September __, 1997 between the City and the Reimbursement
Obligor, as further amended and supplemented from time to time (the "GROUND
LEASE"). Reimbursement Obligor is constructing several buildings (together
with related land and infrastructure improvements) in accordance with the
terms of the ground lease and will lease these buildings to various air
freight companies operating at O'Hare Airport. The foregoing development is
hereinafter called the "O'HARE PROJECT".
D. The Reimbursement Obligor has arranged to finance the O'Hare
Project through the issuance of City of Chicago Variable/Fixed Rate Demand
Special Facilities Airport Revenue Bonds (CenterPoint O'Hare L.L.C. Project
Series 1997) in the principal amount of $55,000,000 (the "BONDS") pursuant to
an Indenture of Trust dated as of September 1, 1997 between the City and the
American National Bank and Trust Company of Chicago, as Trustee (the
"Indenture"). In connection with the issuance of the Bonds, the
Reimbursement Obligor is required to arrange for the issuance of a letter of
credit to be available to pay principal on the Bonds and up to 45 days'
interest on the principal of the Bonds at the maximum rate of 12%.
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E. The Reimbursement Obligor has requested that the Lenders make
available a credit facility pursuant to which the Issuing Bank issues the
letter of credit required in connection with the Bonds (the "FACILITY"), and
that the Administrative Agent act as administrative agent for the Lenders.
The Administrative Agent and the Lenders have agreed to provide the Facility
and the Issuing Bank has agreed to issue the Letter of Credit (as hereinafter
defined) on the terms and conditions hereinafter set forth.
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.
"ADVANCE" is defined in Section 2.3 hereof.
"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 shall be equal to the Stated Amount of the Letter of Credit.
"AGREEMENT" means this Credit and Reimbursement Agreement, as it may be
amended or modified and in effect from time to time.
"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 7.24(c).
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"APPLICABLE MARGIN" means the applicable margin set forth in the table in
EXHIBIT A 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 in the manner set forth in EXHIBIT A.
"ARRANGER" means First Chicago Capital Markets, Inc.
"ARTICLE" means an article of this Agreement unless another document is
specifically referenced.
"ASSIGNMENT" as defined in SECTION 14.3.
"AUTHORIZED OFFICER" means with respect to the Guarantor any of the
President, Executive Vice President, Chief Operating Officer, Chief Financial
Officer or Treasurer, acting singly, and with respect to Reimbursement Obligor
the foregoing officers of the Guarantor in its capacity as managing member of
the Reimbursement Obligor.
"BOND DOCUMENTS" means the Indenture, Loan Agreement and all other
documents entered into in connection with the issuance of the Bonds, whether or
not Reimbursement Obligor is a party to such documents, but not including the
Ground Lease.
"BOND PLEDGE AGREEMENT" means the Bond Pledge Agreement bearing even date
herewith between the Reimbursement Obligor and Administrative Agent, on behalf
of the Lenders, as amended and/or supplemented from time to time.
"BONDS" is defined in RECITAL D.
"BREAK-UP FEE" means the amount due pursuant to SECTION 3.2 in the event a
LIBOR 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, 5CENTS 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
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interests in a Person which is not a corporation and any and all warrants or
options to purchase any of the foregoing.
"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.
"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.
"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.
"CHANGE IN CONTROL" means any of the following has occurred: (i) "person"
or "group" (within the meaning of Sections 13(d) and 14(d)(2) of the Securities
Exchange Act of 1934, as amended (the "1934 Act"), other than the Guarantor or a
wholly-owned subsidiary of the Guarantor, becomes the beneficial owner (as
defined in Rule 13d-3 of the 1934 Act) of 51% or more of the voting membership
interest of the Reimbursement Obligor or (ii) a Person, other than the Guarantor
or a wholly-owned subsidiary of the Guarantor, becomes the managing member of
the Reimbursement Obligor.
"CLOSING DATE" means the date of this Agreement.
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"CODE" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"COMMITMENT" means, for each Lender, the obligation of such Lender to make
advances to reimburse the Issuing Bank for draws under the Letter of Credit not
exceeding the amount equal to such Lender's Percentage multiplied by the Stated
Amount, or as set forth in any Notice of Assignment relating to any assignment
that has become effective pursuant to SECTIN 13.3.2, as such amount may be
modified from time to time pursuant to the terms hereof.
"CONDEMNATION" is defined in SECTION 9.9.
"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
Guarantor and its Subsidiaries outstanding at such date which is secured by a
Lien on any asset of the Guarantor or any Subsidiary, including without
limitation loans secured by mortgages, stock, or partnership interests, and
(b) the Guarantor'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 Guarantor and its Subsidiaries outstanding at such date (excluding
Indebtedness which is contractually subordinated to the Indebtedness of the
Guarantor and its Subsidiaries under the Credit Documents on customary terms
acceptable to the Administrative Agent) which does not constitute Consolidated
Secured Indebtedness, and (b) the Guarantor's pro rata share (based 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 Guarantor 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 Guarantor and its Subsidiaries outstanding at such date
which does not constitute Consolidated Secured Indebtedness, after eliminating
intercompany items.
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"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 Guarantor 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 3.2.
"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.
"CREDIT DOCUMENTS" means this Agreement, the Guaranty, the Bond Pledge
Agreement and any other guaranty or other document executed and delivered by the
Reimbursement Obligor, Guarantor or a Qualifying Investment Affiliate from time
to time and evidencing, securing or guaranteeing payment of indebtedness or
obligations incurred by the Reimbursement Obligor, under this Agreement, as any
of the foregoing may be amended or modified from time to time.
"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 Guarantor, 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 Guarantor or any Subsidiary is liable and (y) the percentage ownership
interest in such Investment Affiliate held by the Guarantor 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.
"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.
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"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.
"DEFAULT RATE" means the interest rate that would otherwise be applicable
hereunder determined pursuant to Section 2.11 hereof, plus 2%.
"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 Guarantor 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 Guarantor 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
Guarantor, 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 Guarantor, 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
Guarantor 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 E.
"FACILITY TERMINATION DATE" means September 23, 2002, or such earlier date
on which all sums due in connection with the Facility shall be due as a result
of the acceleration of the Facility Termination Date.
"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
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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.
"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.
"FUNDING DATE" means a date on which an Advance is made hereunder.
"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 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 8.1.
"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.
"GROUND LEASE" is defined in RECITAL C.
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"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 Guarantor in good
faith.
"GUARANTOR" means CenterPoint Properties Corporation, and its successors
and permitted assigns.
"GUARANTY" means the Guaranty from Guarantor of all obligations of
Reimbursement Obligor hereunder.
"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 the account of such Person, (f) all Guarantee Obligations
of such Person (excluding in any calculation of consolidated indebtedness of the
Guarantor, Guarantee Obligations of the Guarantor 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
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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).
"INDENTURE" is defined in Recital D.
"INTEREST EXPENSE" means all interest expense of the Guarantor 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 Guarantor 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 Guarantor 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 Guarantor, directly or
indirectly, has an ownership interest, whose financial results are not
consolidated under GAAP with the financial results of the Guarantor on the
consolidated financial statements of the Guarantor.
"ISSUING BANK" means First Chicago, or any other Lender that may replace
First Chicago as the issuer of the Letter of Credit in accordance with SECTION 2
hereof.
"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.
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"LETTER OF CREDIT" that certain letter of credit issued by First Chicago,
in the Stated Amount, and any extensions, amendments, or supplement thereto, and
any replacement letter of credit issued by a Lender pursuant to the terms of
this Agreement.
"LETTER OF CREDIT COLLATERAL ACCOUNT" is defined in SECTION 2.20.
"LETTER OF CREDIT OBLIGATIONS" means, as at the time of determination
thereof, all liabilities, whether actual or contingent, without duplication, of
the Reimbursement Obligor with respect to the Letter of Credit, including the
aggregate available but undrawn Stated Amount of the Letter of Credit, and all
fees due in connection therewith, but not including Reimbursement Obligations.
"LIBOR ADVANCE" means a Term Loan 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.
"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 Reimbursement Obligor 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. The LIBOR Base Rate
shall be rounded to the next higher multiple of 1/16 of 1% if the rate is not
such a multiple.
"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
Reimbursement Obligor 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.
"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
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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 AGREEMENT" means the Loan Agreement dated as of September 1, 1997
between the City of Chicago and the Reimbursement Obligor.
"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 Guarantor 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 Guarantor 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
Guarantor and its Subsidiaries taken as a whole or (ii) the ability of the
Reimbursement Obligor and Guarantor to perform their obligations under the
Credit Documents, or (iii) the validity or enforceability of any of the Credit
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.
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"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 Credit 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 Guarantor or any member of the
Controlled Group is a party.
"NON-INDUSTRIAL PROPERTIES" is defined in RECITAL A.
"NOTICE OF ASSIGNMENT" is defined in SECTION 14.3.2.
"OBLIGATIONS" means the Letter of Credit Obligations and all Reimbursement
Obligations and all expenses, indemnities and other obligations of the
Reimbursement Obligor to the Lenders or to any Lender, the Administrative Agent,
or any indemnified party hereunder arising under the Credit Documents.
"O'HARE PROJECT" is defined in Recital C.
"ORDINANCE" means the Ordinance of the City of Chicago dated September 10,
1997 providing for the legislative authorization of the issuance of the Bonds by
the City.
"PARTICIPANTS" is defined in SECTION 14.2.1.
"PAYMENT DATE" means, with respect to the payment of interest accrued on
any CBR Advance, the first Business Day of each calendar month (and in addition
the day such Advance must be repaid in accordance with the terms contained
herein), and with respect to the payment of interest accrued on any LIBOR
Advance, the last day of the 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 8.16.
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"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 Guarantor 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 Guarantor or a Qualifying Investment
Affiliate (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 Guarantor 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
Guarantor'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 Guarantor 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 Guarantor, any Subsidiary or Investment Affiliate.
"PROPERTY BREACH" is defined in SECTION 8.30.
"PROPERTY OPERATING INCOME" means, with respect to any Property owned by
Guarantor, 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).
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"PURCHASER" is defined in SECTION 14.3.1.
"QUALIFIED LENDER" is defined in SECTION 14.3.1.
"QUALIFYING INVESTMENT AFFILIATE" means (a) any Subsidiary or Investment
Affiliate with respect to which (i) the Guarantor or one of its Wholly-Owned
Subsidiaries has management control of the Subsidiary or Investment Affiliate
and each of its assets and (ii) the Guarantor 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) Reimbursement Obligor 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 Guarantor on
any real estate asset operated or intended to be operated as an industrial
property.
"REGISTER" is defined in SECTION 14.6.
"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 Reimbursement Obligor 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 Letter of Credit, including any Term Loan Advances.
"REMARKETING AGREEMENT" means the Remarketing Agreement dated as of
September 1, 1997 between the Reimbursement Obligor and The First National Bank
of Chicago.
"REPORTABLE EVENT" means a reportable event as defined in Section 4043 of
ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
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"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 8.25.
"SECTION" means a numbered section of this Agreement, unless another
document is specifically referenced.
"SENIOR LOANS" as defined in SECTION 12.15.
"SINGLE EMPLOYER PLAN" means a Plan maintained by the Guarantor or any
member of the Controlled Group for employees of the Guarantor or any member of
the Controlled Group.
"STATED AMOUNT" means the maximum amount that can be drawn under the Letter
of Credit, which initially shall be $55,813,699.
"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 Guarantor, and
provided such corporation, partnership or other entity is consolidated with
Guarantor for financial reporting purposes under GAAP.
"SUBSTANTIAL PORTION" means, with respect to the Property of the Guarantor
or its Subsidiaries, Property which represents more than 10% of the Market
Capitalization.
"S&P" means Standard & Poor's Ratings Group and its successors.
"TERM LOAN ADVANCE" is defined in SECTION 3.1.
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"TOTAL LIABILITIES" means all Indebtedness plus all other GAAP liabilities
of the Guarantor and its Subsidiaries.
"TOTAL PROPERTY OPERATING INCOME" means the sum of (i) Property Operating
Income for each Property owned (including leaseholds) by Guarantor and its
Subsidiaries, and (ii) (without redundancy) the Guarantor'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 14.4.
"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
Guarantor 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
8.16(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 Guarantor, 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 Guarantor, 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 Guarantor 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 8.16(i)-(v)) on such assets or Capital Stock upon the occurrence of
any contingency (including, without limitation, pursuant to an "equal and
ratable" clause), (d) is not the subject of a material environmental issue
and, if requested by the Administrative Agent, Guarantor 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, Guarantor shall provide a current engineering report
(or one that is no more than two years old
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for Unencumbered Assets owned as of the Closing Date), and (f) is materially
compliant with property related representations and covenants contained in
SECTION 7.24 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 Guarantor is
unencumbered, (ii) none of the events described in SECTIONS 9.7, 9.8 or 9.9
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 Guarantor'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 Guarantor'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 8.14 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 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 Guarantor, PLUS
(b) the allocable share
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based on Guarantor'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 Guarantor, PLUS (d) the
allocable share based on Guarantor'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 Guarantor 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
TERMS OF CREDIT AND DOCUMENTS
II.1. AGREEMENT TO PROVIDE CREDIT
(a) Subject to all of the terms, provisions and conditions set
forth in this Agreement and the other Credit Documents, the Lenders shall
cause the Issuing Bank, and the Issuing Bank agrees, to issue the Letter of
Credit in accordance with all terms, conditions and limitations set forth
herein.
(b) The Letter of Credit shall solely provide liquidity and credit
enhancement with regard to the Bonds. The Stated Amount of the Letter of
Credit shall be in the outstanding principal amount of the Bonds, plus an
interest component as required by the Bond Documents. The form of the Letter
of Credit shall be substantially in accordance with the form attached hereto
as EXHIBIT G and its terms are incorporated herein by reference.
(c) The Reimbursement Obligor shall have the right, at any time and
from time to time, to replace the Issuing Bank with a Lender selected by
Reimbursement Obligor
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(with the consent of such Lender) to issue a Letter of Credit having the same
Stated Amount, taking into account any permanent reductions of the existing
Letter of Credit. In connection with the replacement of any Letter of
Credit, the Reimbursement Obligor agrees (i) to pay all reasonable expenses
in connection with any remarketing of Bonds required by the applicable Bond
Documents, and (ii) to execute all documents and instruments reasonably
required by Administrative Agent in connection therewith.
(d) Anything to the contrary in this Agreement contained
notwithstanding, any increase in the Stated Amount of the Letter of Credit or
extension of the Stated Expiration Date of the Letter of Credit shall be subject
to the prior approval of all Lenders.
II.2 PARTICIPATION.
(a) Immediately upon issuance by the Issuing Bank of the Letter of
Credit in accordance with the procedures set forth in SECTION 2.1, each
Lender shall be deemed to have irrevocably and unconditionally purchased and
received from the Issuing Bank, without recourse, representation or warranty,
an undivided interest and participation equal to such Lender's Percentage in
the Letter of Credit (including, without limitation, all obligations of the
Borrower with respect thereto) and any security therefor or guaranty
pertaining thereto.
(b) In the event that the Issuing Bank makes any payment under the
Letter of Credit and the Reimbursement Obligor shall not have repaid such
amount to the Issuing Bank on the date of the Advance, 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. The
failure of any Lender to make available to the Administrative Agent for the
account of the 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 2.2(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.
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(d) The obligations of a Lender to make payments to the
Administrative Agent for the account of each Issuing Bank with respect to the
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 terms of this Agreement
relating to the issuance of the Letter of Credit and shall be made in accordance
with the terms and conditions of this Agreement under all circumstances.
II.3 REIMBURSEMENT OF ADVANCES. The Reimbursement Obligor agrees to pay
to the Administrative Agent on behalf of the Lenders an amount equal to each
amount drawn under the Letter of Credit. Each drawing under the Letter of
Credit shall be deemed to be an advance to the Reimbursement Obligor (an
"ADVANCE").
(a) Any Advance made for the payment of interest on the Bonds
shall be payable no later than five (5) days following the Funding Date of such
Advance.
(b) Any Advance made to purchase a Bond tendered for purchase in
accordance with the terms of the Bond Documents shall be payable seven (7) days
following the Funding Date of the Advance except that the Reimbursement Obligor
shall have the right to convert such Advance to a term loan in accordance with
SECTION 3.1 hereof by providing notice to the Administrative Agent of such
election prior to the due date for such Advance.
(c) Any Advance made in connection with the optional redemption
of Bonds on behalf of the Reimbursement Obligor shall be payable five (5) days
following the Funding Date of the Advance.
(d) All other Advances, together with accrued and unpaid
interest, shall be immediately due and payable on the date made.
II.4 INTEREST ON ADVANCES OTHER THAN TERM LOAN ADVANCES. Each Advance
(other than Term Loan Advances which shall be governed by the provisions of
Article III) shall bear interest from the Funding Date of such Advance to the
date of repayment at a rate per annum equal to the CBR Rate and interest on the
amount of such outstanding Advances shall be payable on the first day of each
month and on the date an Advance is repaid. Notwithstanding the foregoing,
during the continuance of a Default, interest on outstanding Advances shall
accrue at the Default Rate and shall be payable on demand.
II.5. PAYMENT OF REIMBURSEMENT OBLIGATIONS.
(a) The Reimbursement Obligor agrees to pay to the Administrative
Agent for the account of the Issuing Bank and other Lenders the amount of all
Reimbursement Obligations, including interest and other amounts payable to
the Issuing Bank and other Lenders under or in connection with the Letter of
Credit, when due irrespective of any claim, set-off, defense or other right
which the Reimbursement Obligor may have at any time against
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the Issuing Bank, any Lender 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 Credit Documents;
(ii) the existence of any claim, setoff, defense or other right
which the Reimbursement Obligor may have at any time against the
beneficiary named in the Letter of Credit or any transferee of the
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, the
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transactions
between the Reimbursement Obligor and the beneficiary named in the
Letter of Credit);
(iii) any draft, certificate or any other document presented under
the Letter of Credit proving to be forged, fraudulent, invalid or
insufficient in any respect or any statement therein being untrue or
inaccurate in any respect or any particular conditions stipulated in
the documents presented under the Letter of Credit are superimposed
thereon;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents;
(v) the occurrence of any Default or Unmatured Default;
(vi) the failure of any instrument to bear any reference or
adequate reference to the Letter of Credit, or the failure of any
draft to be endorsed by the payee or to be accompanied by documents
at negotiation, or the failure of any negotiating bank to endorse
any draft or other instrument in connection with the Letter of
Credit or the failure of any person to note the amount of any draft
on the reverse of the Letter of Credit or to surrender or take up
the Letter of Credit or to forward documents apart from drafts as
required by the terms of the Letter of Credit (each of which
provisions, if contained in the Letter of Credit itself, may be
waived by the Issuing Bank);
(vii) any error, omission, interruption or delay in transmission
or delivery of any message or advice in connection with the Letter
of Credit;
(viii) any non-documentary conditions that may be stated in the
Letter of Credit.
The happening of any one or more of the foregoing contingencies shall not
affect, impair, or prevent the obligation of Reimbursement Obligor to make
reimbursement. In furtherance and
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extension and not limitation of the specific provisions hereinabove set
forth, Reimbursement Obligor and Guarantor agree that any action, inaction or
omission by the Issuing Bank or any of its branches, affiliates or
correspondents under or in connection with the Letter of Credit where the
related drafts, documents or property, is taken in good faith, shall be
binding on Reimbursement Obligor and Guarantor and shall not, except as set
forth below, put or create liability on the Issuing Bank or any of its
branches, affiliates or correspondents. Issuing Bank, Administrative Agent,
and the Lender shall not, except as set forth below, be responsible for any
act, error, neglect, default, omission, insolvency or failure in the business
of any of the affiliates or correspondents of the Issuing Bank or for any
refusal by the Issuing Bank to pay or honor drafts drawn under the Letter of
Credit because of any United States or foreign laws or regulations now or
hereafter in force or for any other matter beyond the control of such
parties. Notwithstanding the foregoing, the Reimbursement Obligor and the
Guarantor shall have a claim against the Issuing Bank and the Issuing Bank
shall be liable to the Reimbursement Obligor and the Guarantor, to the extent
of any actual direct contractual damages (and not indirect, special,
exemplary, incidental, punitive or consequential damages) suffered by the
Reimbursement Obligor or the Guarantor which are caused by the Issuing Bank's
willful misconduct or gross negligence in determining whether documents
presented under the Letter of Credit comply with the terms thereof.
(b) In the event any payment by the Reimbursement Obligor received
by the Issuing Bank or the Administrative Agent with respect to the 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.
II.6 ISSUING BANK CHARGES AND EXPENSES. The Reimbursement Obligor
agrees to pay to the Issuing Bank a fee of $200 for the issuance of the
Letter of Credit and $150 for each draw under the Letter of Credit.
II.7 LETTER OF CREDIT FEE. The Reimbursement Obligor agrees to pay to
the Administrative Agent for the account of the Lenders a letter of credit
fee (the "LETTER OF CREDIT FEE") which shall be computed (on the basis of a
year of 360 days) at an annual rate equal to the applicable L/C Fee set forth
in the table attached as EXHIBIT A, multiplied by the Stated Amount. The
Letter of Credit Fee for the period beginning on the date of issuance of the
Letter of Credit and ending on September 30, 1997 shall be payable upon the
issuance of the Letter of Credit. Thereafter, the Letter of Credit Fee shall
be payable quarterly in arrears on the last Business Day of each March, June,
September and December commencing in December, 1997. The Letter of Credit
Fee shall be prorated for any partial quarter that the Letter of Credit is
outstanding.
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II.8 ISSUER FEE. The Reimbursement Obligor agrees to pay to the
Issuing Bank such additional fees as may be set forth in a separate fee
letter entered into by the Reimbursement Obligor, Guarantor, and
Administrative Agent.
II.9 TRANSFER FEE. The Reimbursement Obligor agrees to pay to the
Issuing Bank upon each transfer of the Letter of Credit in accordance with
its terms its reasonable usual and customary charges in connection with such
transfer, together without duplication all reasonable expenses which the
Issuing Bank may pay or incur relative to such transfer.
II.10 INTEREST AND FEE BASIS. Interest and 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. 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.
II.11. 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 and the Letter of Credit Fee shall vary from time
to time in accordance with the ratings from Moody's and/or (as applicable as
described below) S&P for Guarantor's long-term unsecured debt. If a rating
has been issued by only one of S&P or Moody's, that rating shall 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 Guarantor's long-term
unsecured debt, the lower rating shall be deemed to be the applicable rating
(e.g., if the Guarantor's Moody's long-term unsecured debt rating is Baa1 and
its S&P long-term unsecured debt 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
Guarantor's long-term unsecured debt, 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 Guarantor's 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 and Letter of Credit Fee
(subject to the foregoing) are set forth in the table attached hereto as
EXHIBIT A. In the event that either S&P or Moody's shall discontinue their
ratings of the REIT industry or the Guarantor's long-term unsecured debt, a
mutually agreeable substitute rating agency shall be selected by the Required
Lenders and the Guarantor. If the Required Lenders and the Guarantor 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 Guarantor's unsecured long term debt may be
issued even though Guarantor has no outstanding unsecured long term debt.
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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 Guarantor's request, the Guarantor 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 Guarantor on the Advances at the differential between such
Applicable Margins.
II.12 CURE. The Reimbursement Obligor agrees to pay to the
Administrative Agent on demand any amounts advanced by the Lenders to cure
any default under the Bond Documents. Administrative Agent will endeavor to
provide Reimbursement Obligor with two days prior written notice of any such
advance but the failure to give such notice shall not in any way affect the
obligation of the Reimbursement Obligor to pay the amount of such advance.
This provision shall not be construed as obligating and shall not in any way
obligate the Lenders to cure any such default.
II.13. METHOD OF PAYMENT. All payments of the Reimbursement 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 Reimbursement Obligor, 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 Reimbursement Obligor, if any, maintained with First
Chicago for such purpose, for each payment of principal, interest and fees as
it becomes due hereunder. The Guarantor and Reimbursement Obligor 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 Guarantor
or Reimbursement Obligor to the Administrative Agent provided that it is
received by the Administrative Agent no later than the time specified in this
SECTION 2.13.
II.14. LENDING INSTALLATIONS. Each Lender may book its share of Advances
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
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Notes, if any, 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 Reimbursement Obligor, designate a Lending
Installation through which its share of Advances will be made by it and for
whose account payments are to be made.
II.15. NON-RECEIPT OF FUNDS BY THE ADMINISTRATIVE AGENT. Unless the
Reimbursement Obligor 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, its Percentage of an
Advance or (ii) in the case of the Reimbursement Obligor, 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 Reimbursement
Obligor 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 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 Reimbursement Obligor, and the
Reimbursement Obligor 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 CBR
Rate. Nothing in this SECTION 2.15 shall be deemed to relieve any Lender from
its obligation to fulfill any portion of its Obligations hereunder or to
prejudice any rights which the Reimbursement Obligor 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 fund its Percentage of an Advance, and each Lender shall be
obligated to fund its Percentage of an Advance provided to be made by it
hereunder, regardless of the failure of any other Lender to fund its Percentage.
II.16. RESERVED.
II.17. 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,
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agrees that it will deliver to each of the Reimbursement Obligor 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 Reimbursement Obligor 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 Reimbursement Obligor
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
Reimbursement Obligor 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.
II.18. USURY. This Agreement and any notes delivered pursuant hereto are
subject to the express condition that at no time shall Reimbursement Obligor be
obligated or required to pay interest on the Obligations at a rate which could
subject any 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
Credit Documents, Reimbursement Obligor 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 pursuant hereto, 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 Obligations does not exceed the
Maximum Legal Rate of interest from time to time in effect and applicable to the
Obligations for so long as the Obligations are outstanding.
II.19. APPLICATION OF MONEYS RECEIVED. All moneys collected or received by
the Administrative Agent on account of the Facility directly or indirectly,
shall be applied in the following order of priority:
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(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 Reimbursement Obligor;
(ii) to the reimbursement of any yield protection due to the Lenders
in accordance with SECTION 4.1;
(iii) to the payment of any fees due pursuant to this Agreement;
(iv) to the payment of the whole amount then due and payable on the
Reimbursement Obligations to the Lenders for principal, together
with interest thereon at the Default Rate or the interest rate,
as applicable, (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).
II.20. LETTER OF CREDIT COLLATERAL ACCOUNT. The Reimbursement Obligor
hereby agrees that it will, if required pursuant to SECTION 10.1, maintain a
special collateral account (the "LETTER OF CREDIT COLLATERAL ACCOUNT") at the
Administrative Agent's office at the address specified pursuant to SECTION 15.1,
in the name of the Reimbursement Obligor but under the sole dominion and control
of the Administrative Agent, for the benefit of the Lenders, and in which the
Reimbursement Obligor shall have no interest other than as set forth in
SECTION 10.1. Such Letter of Credit Collateral Account shall be funded to the
extent required by SECTION 10.1 which shall be applied by the Administrative
Agent in the manner described in Section 10.1. In addition to the foregoing,
the Reimbursement Obligor 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. Amounts in the Letter of Credit
Collateral Account may only be invested if Administrative Agent receives an
opinion of counsel or other evidence satisfactory to it that such investment
will not adversely affect the tax exempt status of the Bonds.
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ARTICLE III
TERM LOAN FACILITY
III.1. CONVERSION TO TERM LOAN. If there is a draw on the Letter of
Credit to purchase any tendered Bonds ("LIQUIDITY DRAW") and the Bonds cannot
be remarketed within the seven (7) day period provided for reimbursement of
such Advance, then the Reimbursement Obligor shall have the option to convert
such Advance to a term loan (hereinafter, a "TERM LOAN ADVANCE") which has a
maturity date on the earlier of (i) the Facility Termination Date, (ii) three
(3) years following the date of such conversion, and (iii) the date on which
the Bonds purchased with such Term Loan Advance are remarketed. If following
such conversion (and prior to the repayment of such Term Loan Advance) there
are additional Liquidity Draws that are not reimbursed because the Bonds are
unable to be remarketed, the maturity date for such additional Term Loan
Advances shall be the same as for the initial Term Loan Advance. The only
Advances that can be converted to Term Loan Advances are Liquidity Draws
which cannot be reimbursed from the proceeds of remarketing of the applicable
Bonds purchased with the proceeds of such Liquidity Draws. All other
Advances shall continue to be payable at the times set forth in SECTION 2.2.
III.2. CONVERSION AND CONTINUATION OF OUTSTANDING ADVANCES. All Term
Loan Advances shall initially be CBR 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
Reimbursement Obligor 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 Reimbursement Obligor may elect from time to time to convert all or any
part of a Term Loan 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
Reimbursement Obligor pays the applicable Break-up Fee. The Reimbursement
Obligor shall give the Administrative Agent irrevocable notice (a
"CONVERSION/CONTINUATION NOTICE") of each conversion of a Term Loan 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;
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(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.
III.3. MINIMUM AMOUNT OF EACH LIBOR ADVANCE. Each LIBOR Advance shall
be in the minimum amount of $2,000,000 (and in multiples of $100,000 if in
excess thereof). Reimbursement Obligor and Guarantor acknowledge that any
LIBOR Advance not in a multiple of $750,000 or $1,000,000 may result in a
higher LIBOR Rate.
III.4. OPTIONAL PRINCIPAL PAYMENTS. The Reimbursement Obligor may from
time to time pay, without penalty or premium, all or any part of outstanding
Term Loan Advances, upon two Business Days' prior notice to the
Administrative Agent 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
Reimbursement Obligor pays the applicable Break-up Fee.
III.5. CHANGES IN INTEREST RATE, ETC. FOR TERM LOAN ADVANCES. 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 3.2 to but
excluding the date it is paid or is converted into a LIBOR Advance pursuant
to SECTION 3.2 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.
III.6. RATES APPLICABLE AFTER DEFAULT FOR TERM LOAN ADVANCES.
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 Reimbursement Obligor
(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
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 Reimbursement Obligor (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 each Advance shall bear interest at
the Default Rate per annum until such Default shall have been cured; provided
that such rates shall become applicable automatically without notice to the
Reimbursement Obligor if a Default occurs under SECTION 9.7 or SECTION 9.8.
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III.7. NOTES; TELEPHONIC NOTICES. If any Advances are converted into
Term Loan Advances, then at the request of the Administrative Agent, the
Reimbursement Obligor shall execute and deliver to each of the Lenders a Note
evidencing such Lender's Percentage of the Term Loan Advance, provided that
the failure to deliver such Notes shall not affect the obligation of
Reimbursement Obligor to repay such Term Loan Advances in accordance with the
terms hereof. If Notes are executed and delivered to the Lenders, 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 Reimbursement Obligor'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 Reimbursement Obligor 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
Reimbursement Obligor 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.
III.8. INTEREST PAYMENT DATES FOR TERM LOAN ADVANCES. Interest accrued
on each Term Loan Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date an Advance is converted to a
Term Loan Advance, and at the Facility Termination Date, whether by
acceleration or otherwise. Interest accrued on each Term Loan Advance shall
also be payable on any date on which the Term Loan Advance is prepaid
(provided that nothing herein shall authorize a prepayment which is not
otherwise permitted hereunder).
III.9. NOTIFICATION OF INTEREST RATES AND PREPAYMENTS. Promptly after
receipt thereof (but in no event later than noon (Chicago time) one Business
Day prior to the proposed Conversion/Continuation Date for an Advance
continuing as, or being converted into, a CBR Advance or the close of
business three Business Days prior to the proposed Conversion/Continuation
Date for a Term Loan Advance continuing as, or being converted into, a LIBOR
Advance) the Administrative Agent will notify each Lender of the contents of
each Conversion/Continuation Notice, and repayment notice received by it
hereunder. The Administrative Agent will notify each Lender and the
Reimbursement Obligor of the interest rate applicable to each LIBOR Advance
promptly upon determination of such interest rate and will give each Lender
and the Reimbursement Obligor prompt notice of each change in the Corporate
Base Rate and the Applicable Margin.
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ARTICLE IV
CHANGE IN CIRCUMSTANCES
IV.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,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Reimbursement Obligor (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 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, the Reimbursement Obligor 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.
IV.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, the
Reimbursement Obligor 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
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Letter of Credit, or its obligation to make Loans hereunder or participate in
or issue the Letter 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 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.
IV.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 Reimbursement Obligor 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 Reimbursement Obligor 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 Reimbursement Obligor
the availability of LIBOR Advances with respect to any LIBOR Advances made
after the date of any such determination.
IV.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, the Reimbursement
Obligor 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 Reimbursement Obligor's receipt of
the written notice pursuant to SECTION 4.5.
IV.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 Reimbursement Obligor 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
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to the Administrative Agent and to the Reimbursement Obligor 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
Reimbursement Obligor 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 Reimbursement Obligor of the written statement. The obligations of
the Reimbursement Obligor under SECTIONS 4.1, 4.2 and 4.4 shall survive
payment of the Obligations and termination of this Agreement for a period of
one year.
IV.6. LIMITATION ON REIMBURSEMENT OBLIGOR'S LIABILITY. The
Reimbursement Obligor 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
V.1. ISSUANCE OF LETTER OF CREDIT. The Issuing Bank shall not be
required to issue the Letter of Credit unless (a) the Reimbursement Obligor
shall have paid all fees then due and payable to the Lenders and the
Administrative Agent hereunder, and (b) the Reimbursement Obligor 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 Credit Documents, including
this Agreement, the Bond Pledge Agreement and the Guaranty;
(ii) Certified copies of the articles of incorporation, limited
partnership certificate, limited liability company agreement or
other organizational document of the Reimbursement Obligor,
Guarantor, 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 Reimbursement Obligor,
Guarantor, each Subsidiary and each Qualifying Investment
Affiliate certified by the appropriate
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governmental officer of the state of organization, and foreign
qualification certificates for the Guarantor, 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 Reimbursement Obligor,
Guarantor, 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;
(v) An incumbency certificate, executed by an officer of the
Reimbursement Obligor and Guarantor, which shall identify by name
and title and bear the signature of the Persons authorized to
sign the Credit Documents on behalf of the Reimbursement Obligor
and Guarantor, upon which certificate the Administrative Agent
and the Lenders shall be entitled to rely until informed of any
change in writing by the Reimbursement Obligor and Guarantor;
(vi) Copies, certified by the Secretary or Assistant Secretary, of the
Guarantor's Board of Directors' resolutions (and resolutions of
other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the execution, delivery and performance of
the Credit Documents to be executed and delivered by the
Guarantor hereunder;
(vii) Copies, certified by an authorized representative of
Reimbursement Obligor, evidencing authority for the execution,
delivery and performance of the Credit Documents to be executed
and delivered by the Reimbursement Obligor;
(viii) A written opinion of counsel to Reimbursement Obligor and
Guarantor, addressed to the Lenders in substantially the form of
EXHIBIT B hereto;
(ix) A certificate, signed by an officer of the Reimbursement Obligor,
stating that on the Closing Date no Default or Unmatured Default
has occurred and is continuing and that all representations and
warranties of the Reimbursement Obligor contained herein are true
and correct as of the Closing Date as and to the extent set forth
herein;
(x) The most recent financial statements of the Reimbursement Obligor
and the Guarantor and a certificate from an Authorized Officer of
the Guarantor that no change in the Guarantor's financial
condition that would have a Material Adverse Effect has occurred
since December 31, 1996;
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(xi) UCC financing statement, judgment, and tax lien searches with
respect to the Reimbursement Obligor and Guarantor;
(xii) A compliance certificate in the form of Exhibit C, and evidence
of sufficient Unencumbered Assets to assist the Administrative
Agent in determining the Guarantor's compliance with the
covenants set forth in ARTICLE VII herein;
(xiii) Evidence that all parties whose consent is required for
Reimbursement Obligor and Guarantor to execute the Credit
Documents have provided such consents;
(xiv) To the extent requested by Administrative Agent, operating
statements for any Property and other evidence of income and
expenses to assist the Administrative Agent in determining
Guarantor's compliance with the covenants set forth in Article
VII herein;
(xv) Evidence that the insurance coverage required in SECTION 6.17 is
in full force and effect;
(xvi) Copies of each of the Bond Documents; and
(xvii) 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.
ARTICLE VI
REPRESENTATIONS AND WARRANTIES OF REIMBURSEMENT OBLIGOR
The Reimbursement Obligor represents and warrants to the Lenders that as of
the date hereof:
VI.1. EXISTENCE. It is a duly organized limited liability company,
validly existing and in good standing under the laws of the State of
Illinois, with its principal place of business in Chicago, Illinois.
VI.2. AUTHORIZATION AND VALIDITY. It has the power and authority and
legal right to execute and deliver the Credit Documents and to perform its
obligations thereunder. The execution and delivery by it of the Credit
Documents and the performance of its obligations thereunder have been duly
authorized by proper proceedings, and the Credit Documents constitute legal,
valid and binding obligations of the Reimbursement Obligor enforceable
against it in accordance with their terms, except as enforceability may be
limited by
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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).
VI.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by it of the Credit 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, operating agreement, or the
provisions of any indenture, declaration of trust, instrument or agreement to
which it is a party, including without limitation the Bond Documents, 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 its Property pursuant to the terms of any such
indenture, instrument or agreement. Except as set forth on Schedule 6.3, 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 Credit Documents.
VI.4. FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE. The most recent
financial statements of the Reimbursement Obligor 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
Reimbursement Obligor at such date and results of its 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 Reimbursement Obligor which have or could be reasonably
expected to have a Material Adverse Effect.
VI.5. TAXES. It has filed all United States federal tax returns and all
other tax returns which are required to be filed and have paid all taxes due
pursuant to said returns or pursuant to any assessment received by the
Reimbursement Obligor 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
Reimbursement Obligor in respect of any taxes or other governmental charges
are adequate.
VI.6. LITIGATION AND CONTINGENT OBLIGATIONS. 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
Reimbursement Obligor, against or affecting the Reimbursement Obligor which,
if adversely determined, would have a Material Adverse Effect. It has no
material contingent obligations not provided for or disclosed in the
financial statements referred to in SECTION 8.1, which would have or could be
reasonably expected to have a Material Adverse Effect.
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VI.7. SUBSIDIARIES. Reimbursement Obligor has no Subsidiaries or
Investment Affiliates.
VI.8. ERISA. The Reimbursement Obligor has no Plans. Throughout the
term of the Letter of Credit, Reimbursement Obligor is not 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
Reimbursement Obligor will constitute "plan assets" of one or more plans for
purposes of Title I of ERISA and Reimbursement Obligor is not be subject to
state statutes applicable to Reimbursement Obligor regulating investments and
fiduciary obligations with respect to governmental plans.
VI.9. ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of Reimbursement Obligor 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 Reimbursement
Obligor 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
Reimbursement Obligor known to Reimbursement Obligor and not disclosed to
Administrative Agent or not disclosed in the information furnished by or on
behalf of Reimbursement Obligor which, in the aggregate, have or could be
reasonably expected to have a Material Adverse Effect.
VI.10. REGULATION U. It does not hold any margin stock (as defined in
Regulation U).
VI.11. OWNERSHIP OF PROPERTIES. On the date of this Agreement,
Reimbursement Obligor has good title, free of all Liens other than Permitted
Liens, to its leasehold estate in the O'Hare Project.
VI.12. INVESTMENT COMPANY ACT. Reimbursement Obligor is not an
"investment company" or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
VI.13. PUBLIC UTILITY HOLDING COMPANY ACT. Reimbursement Obligor is not
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.
VI.14. INSURANCE. It carries insurance on the O'Hare Project 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,
including, without limitation:
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(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 Project with a waiver of depreciation;
(ii) Loss of rental income insurance in the amount not less than one
year's gross revenues from the Project; and
(iii) Comprehensive general liability insurance in the amount of
$20,000,000 per occurrence.
VI.15. 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 Reimbursement Obligor, the O'Hare Project
does 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 Reimbursement Obligor, the O'Hare Project and
all operations at the O'Hare Project 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 the O'Hare Project for which Reimbursement
Obligor, is or could be liable.
(iii) The Reimbursement Obligor has not received any written notice of
violation, alleged violation, non-compliance, liability or
potential liability regarding Environmental Laws with regard to
the O'Hare Project, nor does it have knowledge that any such
notice will be received or is being threatened.
(iv) To the knowledge of Reimbursement Obligor, Materials of
Environmental Concern have not been transported or disposed of
from the O'Hare Project in violation of, or in a manner or to a
location which could reasonably give rise to liability of
Reimbursement Obligor, under, Environmental Laws, nor have any
Materials of Environmental Concern been generated, treated,
stored or disposed of at, on or under the O'Hare
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Project violation of, or in a manner that could give rise to
liability of Reimbursement Obligor, under, any applicable
Environmental Laws.
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of Reimbursement Obligor,
threatened, under any Environmental Law to which Reimbursement
Obligor, is named as a party 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 the
O'Hare Project.
(vi) To the knowledge of Reimbursement Obligor, there has been no
release or threat of release of Materials of Environmental
Concern at or from the O'Hare Project, or arising from or related
to the operations of such entity in connection with the O'Hare
Project in violation of or in amounts or in a manner that could
give rise to liability under Environmental Laws.
VI.16. PROPERTY MANAGER. The manager of the O'Hare Project is the
Guarantor.
6.22 ACCURACY OF OFFERING DOCUMENTS. The preliminary and final private
placement memorandums for the sale of the Bonds and any supplement or
amendments to either of them are on the dates such documents are issued true
and correct in all material respects and do not contain any untrue or
misleading statement of a material fact or omit to state a material fact
necessary in order to make the statements therein not misleading; provided no
representation or warranty is made with respect to information furnished by
the Lenders, the City or the co-placement agents for the Bonds which is
contained therein.
ARTICLE VII
REPRESENTATIONS AND WARRANTIES OF GUARANTOR
The Guarantor represents and warrants to the Lenders that as of the date
hereof:
VII.1. EXISTENCE. Guarantor 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
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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.
VII.2. AUTHORIZATION AND VALIDITY. It has the power and authority and
legal right to execute and deliver the Credit Documents and to perform its
obligations thereunder. The execution and delivery by it of the Credit
Documents and the performance of its obligations thereunder have been duly
authorized by proper proceedings, and the Credit Documents constitute legal,
valid and binding obligations of the Guarantor 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).
VII.3. NO CONFLICT; GOVERNMENT CONSENT. Neither the execution and
delivery by it of the Credit 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 Guarantor
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 Credit Documents.
VII.4. FINANCIAL STATEMENTS; MATERIAL ADVERSE CHANGE. The most recent
consolidated financial statements of the Guarantor 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 Guarantor 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
Guarantor and its Subsidiaries which have or could be reasonably expected to
have a Material Adverse Effect.
VII.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 Guarantor 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
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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 Guarantor and
its Subsidiaries and to Guarantor's knowledge, its Qualifying Investment
Affiliates in respect of any taxes or other governmental charges are adequate.
VII.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 Guarantor, a Subsidiary, or a Qualifying Investment
Affiliate, against or affecting the Guarantor 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 8.1, which would have or could be
reasonably expected to have a Material Adverse Effect.
VII.7. SUBSIDIARIES. SCHEDULE 1 hereto contains an accurate list of all
of the presently existing Subsidiaries and Investment Affiliates of
Guarantor, 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 Guarantor's knowledge, such
Investment Affiliates have been duly authorized and issued and are fully paid
and non-assessable.
VII.8. ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $1,000,000. Neither the Guarantor 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 Guarantor's knowledge, each Multiemployer Plan,
complies in all material respects with all applicable requirements of law and
regulations and Guarantor 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 Guarantor 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
Guarantor's knowledge Multiemployer Plan. Neither Guarantor 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 Guarantor 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 Guarantor 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
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by Guarantor or any member of the Controlled Group which could reasonably be
expected to have a Material Adverse Effect. Neither Guarantor 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, Guarantor 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 Guarantor will constitute "plan
assets" of one nor more plans for purposes of Title I of ERISA and Guarantor
will not be subject to state statutes applicable to Guarantor regulating
investments and fiduciary obligations with respect to governmental plans.
VII.9. ACCURACY OF INFORMATION. All factual information heretofore or
contemporaneously furnished by or on behalf of Guarantor or any of its
Subsidiaries or 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 Guarantor 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 Guarantor, its Subsidiaries or any Investment
Affiliate known to Guarantor and not disclosed to Administrative Agent and
the Documentation Agent or not disclosed in the information furnished by or
on behalf of Guarantor, its Subsidiaries or Investment Affiliates, which, in
the aggregate, have or could be reasonably expected to have a Material
Adverse Effect.
VII.10. REGULATION U. It does not hold any margin stock (as defined in
Regulation U).
VII.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.
VII.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 Guarantor'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
Guarantor, any Subsidiary, or any Qualifying Investment Affiliate, has
received any written notice to the effect that its operations are not in
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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.
VII.13. OWNERSHIP OF PROPERTIES. On the date of this Agreement,
Guarantor 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.
VII.14. INVESTMENT COMPANY ACT. Neither Guarantor 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.
VII.15. PUBLIC UTILITY HOLDING COMPANY ACT. Neither Guarantor 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.
VII.16. SOLVENCY.
(i) Immediately after the Closing Date and immediately following the
sale of the Bonds and after giving effect to the application of the proceeds of
the Bonds, (a) the fair value of the assets of the Guarantor and its
Subsidiaries on a consolidated basis, at a fair valuation, will exceed the debts
and liabilities, subordinated, contingent or otherwise, of the Guarantor and its
Subsidiaries on a consolidated basis; (b) the present fair saleable value of the
Property of the Guarantor and its Subsidiaries on a consolidated basis will be
greater than the amount that will be required to pay the probable liability of
the Guarantor 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 Guarantor 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 Guarantor 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.
VII.17. INSURANCE. It and its Subsidiaries and the Qualifying Investment
Affiliates carry insurance on their Properties with financially sound and
reputable insurance
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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;
(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.
VII.18. NYSE AND REIT STATUS. The Guarantor's common stock is listed on
the New York Stock Exchange and there is no proceeding pending to delist the
Guarantor's stock, and the Guarantor is qualified as a real estate investment
trust and currently is in compliance with all applicable provisions of the
Code.
VII.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 Guarantor, the Properties of Guarantor,
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 Guarantor, the Properties of Guarantor 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 Guarantor, its Subsidiaries
or Investment Affiliates is or could be liable.
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(iii) Neither Guarantor 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 Guarantor, Materials of Environmental Concern
have not been transported or disposed of from the Properties of
Guarantor 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 Guarantor, 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 Guarantor, any Subsidiary or any
Qualifying Investment Affiliate under, any applicable
Environmental Laws.
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of Guarantor, threatened, under
any Environmental Law to which Guarantor, 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 Guarantor, its
Subsidiaries, or any Qualifying Investment Affiliate is or could
be liable.
(vi) To the knowledge of Guarantor, there has been no release or
threat of release of Materials of Environmental Concern at or
from the Properties of Guarantor 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.
VII.20. LICENSES, ETC. Guarantor, 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.
VII.21. JUDGMENTS. There are no judgments, decrees, or orders of any
kind against Guarantor, its Subsidiaries or any Qualifying Investment
Affiliate unpaid of record which would have a Material Adverse Effect.
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VII.22. PROPERTY MANAGER. As of the date hereof, the manager of each
Property is the Guarantor or a Qualifying Investment Affiliate.
VII.23. UPDATED SCHEDULES. The Guarantor 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
Guarantor hereunder shall be deemed to reflect such revised Schedule.
VII.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, Guarantor hereby 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, Guarantor or the respective Qualifying
Investment Affiliate has obtained and will maintain the insurance
prescribed in SECTION 6.17 hereof.
(b) To the Guarantor's knowledge, Guarantor 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 Guarantor'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.
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(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) Guarantor 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 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 Guarantor threatened
condemnation proceedings affecting the Unencumbered Asset, or any part
thereof.
(h) To Guarantor'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 Guarantor'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
Guarantor 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
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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 Guarantor
or any Qualifying Investment Affiliate holds a leasehold estate under a
Financeable Ground Lease, with respect to each such Financeable Ground
Lease (i) Guarantor 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 paid to the extent they are payable to the date hereof;
(iv) Guarantor or the respective Qualifying Investment Affiliate enjoys the
quiet and peaceful possession of the estate demised thereby, subject to any
sublease; (v) the Guarantor 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 Guarantor 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 7.24 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 8.21(iii) or 8.21(iv)).
ARTICLE VIII
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COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
VIII.1. FINANCIAL REPORTING. The Guarantor and Reimbursement Obligor
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 Guarantor an
unaudited consolidated balance sheet as of the close of each such
period and the related unaudited consolidated statements of
income and retained earnings and of cash flows of the Guarantor
and its Subsidiaries for such period and the portion of the
fiscal year through the end of such period, setting forth in each
case in comparative form the figures for the previous year, all
certified by the Guarantor'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 Guarantor and its
Subsidiaries, related reports in form and substance satisfactory
to the Lenders, all certified by Guarantor'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 Guarantor'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 Guarantor 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
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SECTION 8.1, 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 Guarantor and its
Subsidiaries, reports in form and substance satisfactory to the
Lenders, certified by the Guarantor'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
Guarantor's chief financial officer or chief accounting officer
confirming that Guarantor is in compliance with all of the
covenants of the Credit Documents, showing the calculations and
computations necessary to determine compliance with the financial
covenants contained in this Agreement (including such schedules
and backup information as may be necessary to demonstrate such
compliance) and stating that 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 Guarantor knows that any Reportable Event has occurred
with respect to any Plan, a statement, signed by the chief
financial officer of Guarantor, describing said Reportable Event
and within 20 days after such Reportable Event, a statement
signed by such chief financial officer describing the action
which Guarantor 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 Guarantor 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
Guarantor 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 Guarantor, a copy of (a) any notice or claim to the effect
that the Guarantor 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
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violation of any federal, state or local environmental, health or
safety law or regulation by the Guarantor 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
Guarantor, 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
Guarantor 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 Guarantor, describing such fire, casualty or
condemnation and the action Guarantor 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) Not later than 45 days after the end of each quarter, an
operating statement and updated rent roll for the O'Hare Project,
certified by an Authorized Officer of Reimbursement Obligor.
(xiv) Such other information (including, without limitation, financial
statements for the Guarantor and non-financial information) as
the Administrative Agent or any Lender may from time to time
reasonably request.
To the extent that any of the foregoing document deliveries, including, but
not limited to, the financial statements of the Guarantor, filings with the
Securities and Exchange Commission, the compliance certificate and the report
on Property receivables, are required under the Credit Agreement dated
October 23, 1996 among the Guarantor, the Administrative Agent and the other
lenders named therein (the "Revolving Credit Agreement), delivery of such
documents in the form and in the manner required under the provisions of the
Revolving Credit Agreement
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shall be deemed to satisfy the respective requirements of this Section 8.1 so
long as Administrative Agent is also the administrative agent under the
Revolving Credit Agreement.
VIII.2. NOTICE OF DEFAULT. The Guarantor and Reimbursement Obligor 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.
VIII.3. CONDUCT OF BUSINESS. The Reimbursement Obligor will do all
things necessary to remain a validly existing limited liability company in
good standing in the State of Illinois. The Guarantor 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 Guarantor, is no longer in the best
interests of the Guarantor and the failure to preserve its corporate
existence would not have a Material 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 Guarantor 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 Guarantor 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 Guarantor 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:
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==============================================================================
CATEGORIES OF ASSETS TOTAL INVESTMENT LIMITATIONS
- ------------------------------------------------------------------------------
(i) unimproved land 7% of Market Capitalization
- ------------------------------------------------------------------------------
(ii) other property holdings 5% of Market Capitalization
(excluding cash, Cash
Equivalents, the
Non-industrial Properties
and Indebtedness of any
Subsidiary or Qualifying
Investment Affiliate to the
Guarantor)
- ------------------------------------------------------------------------------
(iii) stock holdings other than in 5% of Market Capitalization
Subsidiaries and Qualifying
Investment Affiliates
- ------------------------------------------------------------------------------
(iv) mortgages other than 5% of Market Capitalization
Qualified Mortgages
- ------------------------------------------------------------------------------
(v) joint ventures and 10% of Market Capitalization
partnerships other than
investments in Qualifying
Investment Affiliates
==============================================================================
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
Guarantor, 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 8.3, all investments shall be valued in accordance
with GAAP.
VIII.4. TAXES. The Guarantor and Reimbursement Obligor will pay, and
will cause each of their 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.
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VIII.5. INSURANCE. (i) The Guarantor and Reimbursement Obligor will,
and will cause each of their 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 Guarantor will furnish to the
Administrative Agent or any Lender upon request full information as to the
insurance carried. (ii) The Guarantor and Reimbursement Obligor 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.
VIII.6. COMPLIANCE WITH LAWS. The Guarantor and Reimbursement Obligor
will, and will cause each of their 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.
VIII.7. MAINTENANCE OF PROPERTIES. The Guarantor and Reimbursement
Obligor will, and will cause each of their 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.
VIII.8. INSPECTION. Upon reasonable notice, the Guarantor and
Reimbursement Obligor will, and will cause each of their 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 Guarantor 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 Guarantor, Reimbursement Obligor
and each of their respective Subsidiaries and Qualifying Investment
Affiliates, and to discuss the affairs, finances and accounts of the
Guarantor 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.
VIII.9. MAINTENANCE OF STATUS. The Guarantor 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.
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VIII.10. DIVIDENDS. Provided there is NOT a continuing Default under
SECTION 9.1 or SECTION 9.2, and there is not a continuing Default under
SECTION 9.3 relating to a breach of any of the covenants contained in
SECTIONS 8.20 and 8.21, the Guarantor and Reimbursement Obligor shall be
permitted to declare and pay dividends on their Capital Stock from time to
time in amounts determined by the Guarantor or Reimbursement Obligor, as the
case may be, PROVIDED, HOWEVER, subject to the terms of the next sentence, in
no event shall the Guarantor declare or pay dividends on its 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 Letter of Credit Fee, the Guarantor
shall be permitted to distribute whatever amount of dividends is necessary to
maintain its tax status as a real estate investment trust.
VIII.11. MERGER; SALE OR TRANSFER OF ASSETS. The Reimbursement Obligor
and Guarantor will not, nor will they permit any of their 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 Guarantor 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 8.11, 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 Guarantor, 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
Guarantor, 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, or (iii) include all or
any portion of the O'Hare Project.
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VIII.12. TRANSFERS OF UNENCUMBERED ASSETS. Neither the Guarantor nor any
of its Qualifying Investment Affiliates shall transfer or otherwise dispose
of (other than the creation or incurrence of Liens permitted under SECTION
8.16) 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 8.20 and 8.21.
VIII.13. TRANSFER OR ENCUMBRANCE OF THE O'HARE PROJECT. The
Reimbursement Obligor shall not transfer, encumber, or otherwise dispose of
its interest or any part thereof in the O'Hare Project or any revenues
derived from the operation of the O'Hare Project while the Letter of Credit
is outstanding; provided, however, the foregoing shall not in any manner
affect the ability of the Reimbursement Obligor to convey leasehold interests
in the O'Hare Project, or to make distributions of funds derived from the
operation of the O'Hare Project (to the extent such distributions are
permitted under Section 8.10).
VIII.14. OWNERSHIP AND CONTROL. The Guarantor'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 the ownership (which shall include
vested options) of a minimum 550,000 common shares of the Guarantor adjusted
for stock splits, provided that if Guarantor'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. The Guarantor shall not permit a
Change of Control to occur.
VIII.15. SUBSIDIARIES AND QUALIFYING INVESTMENT AFFILIATES. In the event
that Guarantor 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 8.11 or whether such disposition requires a written
consent of Lenders pursuant to SECTION 8.12.
VIII.16. LIENS. The Guarantor and Reimbursement Obligor will not, nor
will they permit any of their Subsidiaries or Qualifying Investment
Affiliates to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Guarantor, Reimbursement Obligor, or any of their
Subsidiaries or Qualifying Investment Affiliates except:
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(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 Guarantor or its
Subsidiaries or Qualifying Investment Affiliates;
(v) Liens of any Subsidiary or Investment Affiliate in favor of the
Guarantor;
(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 8.16 shall be deemed to be "PERMITTED
LIENS".
VIII.17. AFFILIATES. The Guarantor and Reimbursement Obligor will not,
nor will they permit any of their 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 applicable entity's business
and upon fair and reasonable terms no less favorable to the Guarantor,
Reimbursement Obligor or such Subsidiary or Qualifying Investment Affiliate
than the Guarantor or such Subsidiary or Qualifying Investment Affiliate
would obtain in a comparable arms-length transaction.
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VIII.18. INTEREST RATE HEDGING. The Guarantor and Reimbursement Obligor
will not enter into or remain liable upon, nor will they 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 in the ordinary course
of its business for the purpose of hedging interest rate risk to the
Guarantor, Reimbursement Obligor, a Subsidiary or Qualifying Investment
Affiliate.
VIII.19. VARIABLE INTEREST INDEBTEDNESS. The Guarantor shall not at any
time permit the outstanding principal balance of Indebtedness of the
Guarantor 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, Guarantor shall be entitled
to exclude up to $75,000,000 of tax exempt bonds from the calculation of
Variable Rate Debt.
VIII.20. CONSOLIDATED NET WORTH. The Guarantor 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 the Guarantor (net of customary related fees and
expenses) in connection with any offering of stock in the Guarantor after
October 23, 1996.
VIII.21. INDEBTEDNESS AND CASH FLOW COVENANTS. The Guarantor 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;
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(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) Guarantor'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.
VIII.22. ENVIRONMENTAL MATTERS. The Guarantor, and Reimbursement Obligor
will, and will cause each of their 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;
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(ii) conduct and complete, or will use its reasonable efforts to cause
its tenants or subtenants to conduct and complete, all investigations,
studies, sampling 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 Guarantor, 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 Guarantor has determined in good faith that contesting
the same is not in the best interests of the Guarantor 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 Guarantor, its Subsidiaries and Qualifying Investment Affiliates or
the Properties for which the Guarantor, 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, Guarantor 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.
VIII.23. NOTIFICATION OF RATING CHANGE. The Guarantor 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 Guarantor'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.
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VIII.24. MAXIMUM REVENUE FROM SINGLE TENANT. Guarantor 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.
VIII.25. NEGATIVE PLEDGE. Guarantor agrees that throughout the term of
this Facility, no "negative pledge" on Unencumbered Assets shall be given to
any other lender.
VIII.26. MANAGER. The Properties (other than the Non-industrial
Properties) shall at all times be managed by the Guarantor or a Qualifying
Investment Affiliate.
VIII.27. ACCELERATION NOTICE. Guarantor and Reimbursement Obligor agree
that they shall, within ten (10) days after receipt of written notice that
any Indebtedness aggregating $5,000,000 or more of Guarantor, Reimbursement
Obligor, or any Subsidiary or Qualifying Investment Affiliate has been
accelerated, provide written notice to the Administrative Agent of such
acceleration.
VIII.28. LIEN SEARCHES; TITLE SEARCHES. Guarantor 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
UCC, tax lien, judgment and litigation searches with respect to Guarantor 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 8.25, such Title Searches may be required more
frequently provided, however, that the Guarantor shall not be required to pay
for more than one set of searches during any calendar year.
VIII.29. ADDITIONAL COVENANTS. Guarantor and Reimbursement Obligor will
not engage in or knowingly permit any illegal activities at any Property.
VIII.30. CALCULATION OF FINANCIAL COVENANTS UPON PROPERTY BREACHES. In
the event of a breach of a representation or warranty under ARTICLE VII or of
a covenant under SECTION 8.5, 8.6, 8.7, 8.8, 8.16, 8.22 or 8.26 (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, Guarantor shall be required to demonstrate
financial covenant compliance under applicable provisions of Article VIII
both with and without the affected Property for as long as such breach or
condition shall exist.
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VIII.31 OPTIONAL REDEMPTION OF BONDS. The Reimbursement Obligor shall
not cause a notice of redemption to be sent to the Bond holders with respect
to all or a portion of the Bonds unless prior to causing a notice of
redemption to be sent to the Bondholders the Reimbursement Obligor has
provided Administrative Agent with evidence satisfactory to it that
Reimbursement Obligor has a source of funds available to reimburse the
Lenders for any draw on the Letter of Credit in connection with such optional
redemption.
VIII.32 GROUND LEASE. The Reimbursement Obligor shall comply with all
of its obligations under the Ground Lease and will not terminate the Ground
Lease without the prior written consent of the Required Lenders.
ARTICLE IX
DEFAULTS
The occurrence of any one or more of the following events shall constitute
a Default:
IX.1. Nonpayment of any Reimbursement Obligation when due and payable;
IX.2. Nonpayment of (i) interest upon any Reimbursement Obligation, any
Letter of Credit Fee, or Administrative Agent's Fee under any of the Credit
Documents within five (5) Business Days after the same becomes due or (ii)
any other payment obligation under any of the Credit Documents within five
(5) Business Days of Guarantor's receipt of written notice;
IX.3. The breach of any of the terms or provisions of SECTIONS 8.1(iii),
(iv) and (v), 8.5(i) (to the extent such breach relates to a cancellation of
an insurance policy or Guarantor's failure to pay the required premium to
renew a policy), 8.5(II), 8.9, 8.10, 8.11, 8.12, 8.13, 8.14, 8.16, 8.18,
8.20, 8.21 or 8.25, or a breach of any of the terms or provisions of SECTION
8.1 (other than as set forth above) which remains uncured for ten (10)
business days;
IX.4. Any representation or warranty made or deemed made by or on behalf
of the Guarantor, Reimbursement Obligor or any of their Subsidiaries to the
Lenders or the Administrative Agent under or in connection with this
Agreement (other than SECTION 7.24 and a Property Breach unless such breach
causes a Default under another provision of this Article IX), or any
certificate or information delivered in connection with this Agreement or any
other Credit Document shall be materially false on the date as of which made;
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IX.5. The breach (other than a breach which constitutes a Default under
SECTION 9.1, 9.2, 9.3 or 9.4 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;
IX.6. Failure of the Guarantor, any Qualifying Investment Affiliate (to
the extent the Indebtedness is recourse to Guarantor 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;
IX.7. The Guarantor, the Reimbursement Obligor, 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 9.7, (vi) fail
to contest in good faith any appointment or proceeding described in SECTION
9.8 or (vii) not pay, or admit in writing its inability to pay, its debts
generally as they become due;
IX.8. A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Guarantor, the Reimbursement Obligor, 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
9.7(iv) shall be instituted against the Guarantor any Qualifying Investment
Affiliate or any such Subsidiary and such appointment continues undischarged
or such proceeding continues undismissed or unstayed for a period of sixty
(60) consecutive days;
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IX.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 Guarantor,
Reimbursement Obligor and their Subsidiaries and Qualifying Investment
Affiliates which, when taken together with all other Property of the
Guarantor 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;
IX.10. The Guarantor, Reimbursement Obligor or any of their 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 Guarantor, Reimbursement Obligor 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;
IX.11. The Guarantor 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 Guarantor 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;
IX.12. The Guarantor 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
Guarantor 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;
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IX.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) Guarantor 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)
Guarantor or any member of the Controlled Group shall fail to pay when due an
amount which it shall have become liable to pay to the PBGC, or any Plan, any
Multiemployer Plan, or (v) Guarantor 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 Guarantor or any member of the
Controlled Group to any tax, penalty or other liability or the imposition of
any lien or security interest on Guarantor or any member of the Controlled
Group, provided, however, that any event or circumstance in SECTIONS 9.13(i)
through (vi) shall only be an Event of Default if it would result in
liability to Guarantor in excess of $250,000 per year; or (vii) the assets of
Guarantor 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 9.13 shall be deemed to have been or be
waived or corrected because of any disclosure by Guarantor;
IX.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
Guarantor, Reimbursement Obligor and their 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;
IX.15. The occurrence of any default under any Credit Document other than
this Agreement or the breach of any of the terms or provisions of any Credit
Document other than this Agreement, which default or breach continues beyond
any period of grace therein provided;
IX.16 A default by Reimbursement Obligor under the terms of any of the
Bonds, Indenture or Loan Agreement, which default continues beyond any period
of grace therein provided;
IX.17 Any amendment to any of the Bonds, Indenture or Loan Agreement or
any material amendment to any other Bond Documents shall have been agreed to
by Reimbursement Obligor or Guarantor without the prior written consent of
the Administrative Agent.
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IX.18 The Administrative Agent shall fail to have a valid and
enforceable perfected security interest in all of the pledged Bonds described
in the Bond Pledge Agreement;
IX.19 A Change in Control occurs; or
IX.20 The failure to replace the Letter of Credit at least five days
before a notice of redemption would go to the Bondholders due to the
expiration of the Letter of Credit, unless the Required Lenders otherwise
consent in writing.
ARTICLE X
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
X.1. ACCELERATION AND OTHER REMEDIES. If any Default occurs and is
continuing the Issuing Bank may, and upon direction of the Required Lenders
shall, terminate the Letter of Credit and/or declare all Reimbursement
Obligations to be immediately due and payable. If any Default occurs and is
continuing, the Issuing Bank, at the request of the Required Lenders, shall
direct the Trustee to declare the Bonds to be due and payable or to direct
that Bonds be called for redemption as provided in the Paragraph entitled
"Mandatory Redemption at the Direction of the Bank" as provided in Section 8
of the Bonds. A copy of such notice shall be sent to the Reimbursement
Obligor. If the Letter of Credit has not been replaced at least five days
before a notice of redemption of the Bonds is due to be issued by the Trustee
under Section 8 of the Bonds because of the pending expiration of the Letter
of Credit, the Issuing Bank may, with the consent of all Lenders, elect to
extend the Stated Expiration Date of the Letter of Credit for such period as
it determines by issuing a notice in the form of Exhibit H to the Letter of
Credit and Reimbursement Obligor and Guarantor hereby consent to any such
extension and acknowledge that such extension shall not be deemed to cure or
satisfy the Default. Reimbursement Obligor and Guarantor hereby confirm that
their obligations pursuant to this Agreement and the Guaranty shall not be
affected by such amendments and they agree to execute such documentation as
Administrative Agent may require in connection with any such extension but
the absence of such documentation shall in no way limit or affect their
respective obligations.
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In addition to the foregoing, following the occurrence and during the
continuance of a Default and so long as the Letter of Credit has not been
fully drawn and has not been cancelled or expired by its terms or terminated
by the Lenders under this Section 10.1, upon demand by the Administrative
Agent, the Reimbursement Obligor shall establish and deposit in the Letter of
Credit Collateral Account cash in an amount equal to the aggregate undrawn
face amount of the Letter of Credit and all fees and other amounts due or
which may become due with respect thereto. The Reimbursement Obligor 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 Letter of Credit. Such funds, if any, remaining in the
Letter of Credit Collateral Account following the payment of all obligations
under the Credit Documents in full shall, unless Administrative Agent is
otherwise directed by a court of competent jurisdiction, be promptly paid
over to the Reimbursement Obligor.
X.2. AMENDMENTS, WAIVERS, DECISIONS. Subject to the provisions of this
ARTICLE X, the Required Lenders (or the Administrative Agent with the consent
or direction in writing of the Required Lenders), the Guarantor and the
Reimbursement Obligor may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Credit Documents or
changing in any manner the rights of the Lenders or the Reimbursement Obligor
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 (except for an extension of
the Letter of Credit in accordance with SECTION 10.1 to prevent a
redemption of the Bonds) or forgive all or any portion of the
Obligations, 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.
(iv) Permit the Reimbursement Obligor to assign its rights under this
Agreement.
(v) Amend SECTION 2.2, 2.3, 3.8(a), 13.2, or this SECTION 10.2.
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(vi) Release or limit the liability of Guarantor 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.
X.3. PRESERVATION OF RIGHTS. No delay or omission of the Lenders or the
Administrative Agent to exercise any right under the Credit 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 Guarantor 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
Credit Documents whatsoever shall be valid unless in writing signed by the
Lenders required pursuant to SECTION 10.2, and then only to the extent in
such writing specifically set forth. All remedies contained in the Credit
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 XI
GENERAL PROVISIONS
XI.1. SURVIVAL OF REPRESENTATIONS. All representations and warranties
contained in this Agreement shall survive issuance of the Letter of Credit
contemplated.
XI.2. GOVERNMENTAL REGULATION. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit
to the Guarantor in violation of any limitation or prohibition provided by
any applicable statute or regulation.
XI.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 Credit Documents shall be paid by the
Reimbursement Obligor, together with interest and penalties, if any.
XI.4. HEADINGS. Section headings in the Credit Documents are for
convenience of reference only, and shall not govern the interpretation of any
of the provisions of the Credit Documents.
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XI.5. ENTIRE AGREEMENT. The Credit Documents embody the entire agreement
and understanding among the Reimbursement Obligor, Guarantor, the
Administrative Agent, and the Lenders and supersede all prior commitments,
agreements and understandings among the Guarantor, the Administrative Agent,
and the Lenders relating to the subject matter thereof, except for the
agreement of the Guarantor to pay certain fees to the Administrative Agent
and the agreement of the Administrative Agent to pay certain fees to the
Lenders.
XI.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.
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XI.7. EXPENSES; INDEMNIFICATION. The Reimbursement Obligor shall
reimburse the Arranger 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 Arranger and Administrative Agent (without duplication),
which attorneys may be employees of the Arranger or Administrative Agent)
paid or incurred by the Arranger (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 Credit Documents. The Reimbursement Obligor also
agrees to reimburse the Arranger, 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 Credit Documents
(including, without limitation, any workout). The Reimbursement Obligor
further agrees to indemnify the Administrative Agent, the Arranger 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 Credit
Documents, the Properties, the transactions contemplated hereby or the direct
or indirect application or proposed application of the proceeds of any
Advance hereunder; provided, however, the Reimbursement Obligor shall not
have any liability for any claim, loss, cost or expense arising from (i) the
gross negligence or wilful misconduct of the party seeking to be indemnified,
(ii) a misrepresentation in materials provided by any of the Lenders or their
agents for inclusion in the preliminary or final Private Placement Memorandum
or re-marketing circular prepared in connection with the sale or re-marketing
of the Bonds, or (iii) the refusal or inability of an Issuing Bank to pay a
draft strictly complying with the terms and conditions of the Letter of
Credit. The obligations of the Reimbursement Obligor under this SECTION 11.7
shall survive for two years after the termination of this Agreement.
XI.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.
XI.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 Guarantor and all its Subsidiaries.
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XI.10. SEVERABILITY OF PROVISIONS. Any provision in any Credit 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 Credit Documents are
declared to be severable.
XI.11. NONLIABILITY OF LENDERS, ARRANGER, AND ADMINISTRATIVE AGENT. The
relationship between the Reimbursement Obligor, on the one hand, and the
Lenders, the Arranger and the Administrative Agent, on the other, shall be
solely that of borrower and lender. Neither the Administrative Agent, the
Arranger nor any Lender shall have any fiduciary responsibilities to the
Reimbursement Obligor. Neither the Administrative Agent, the Arranger nor
any Lender undertakes any responsibility to the Reimbursement Obligor to
review or inform the Reimbursement Obligor of any matter in connection with
any phase of the Reimbursement Obligor's business or operations. Neither the
Arranger nor the Administrative Agent shall have any responsibilities to the
Reimbursement Obligor or Lenders under this Agreement except to the extent,
if any, expressly provided for herein.
XI.12. PUBLICITY. Each Lender and Arranger shall have the right to do
a tombstone publicizing the transaction contemplated hereby upon the consent
of the Guarantor which shall not be unreasonably withheld.
XI.13. BROKERS. Reimbursement Obligor, Guarantor and Administrative
Agent each hereby represent and warrant that no brokers or finders were used
in connection with procuring the financing contemplated hereby and
Reimbursement Obligor and Guarantor hereby agree to indemnify and save the
Administrative 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, or any Lender as a
result of any claim or assertion by any party claiming by, through or under
Reimbursement Obligor, Guarantor, 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 Reimbursement Obligor and Guarantor harmless from and
against any and all liabilities, losses, costs and expenses (including
attorneys' fees or court costs) suffered or incurred by Reimbursement Obligor
or Guarantor 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.
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XI.14. CONFIDENTIALITY. With respect to the financial statements and
other information delivered pursuant to SECTION 8.1, and any other
information obtained by any Lender or any assignee of any Lender pursuant to
this SECTION 11.14 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 affiliates; (b) employees, agents,
attorneys and accountants of such Lender, or their respective affiliates who
would ordinarily have access to such information in the normal course of the
performance of their duties; (c) 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 (d) 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.
XI.15. PAYMENT ON A NON-BUSINESS DAY. Whenever any payment to be made
hereunder or any other documents which may be delivered in connection
herewith shall be stated to be due on a day which is not a Business Day, such
payment shall be payable on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
interest; PROVIDED, HOWEVER, that if the day on which any such payment shall
be stated to be due is not a Business Day and is a day of the month after
which no further Business Day occurs in such month, then the due date of such
payment shall be the next preceding Business Day.
XI.16. TELECOPIED OR TELEXED DOCUMENTS. At the request of the
Reimbursement Obligor, the Letter of Credit provides that documents required
under the Letter of Credit may be presented to the Issuing Bank by, among
other methods, telecopy or telex. The Reimbursement Obligor acknowledges and
assumes all risks relating to the use of such telecopied or telexed documents
and agrees that its obligations under this Agreement shall remain absolute,
unconditional and irrevocable if the Issuing Bank honors such telecopied or
telexed documents and if such telecopied or telexed documents otherwise
conform to the terms hereof.
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XI.17. CHOICE OF LAW. THE CREDIT 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.
XI.18. CONSENT TO JURISDICTION. THE REIMBURSEMENT OBLIGOR AND GUARANTOR
HEREBY IRREVOCABLY SUBMIT 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 CREDIT DOCUMENTS AND THE
REIMBURSEMENT OBLIGOR AND GUARANTOR HEREBY IRREVOCABLY AGREE THAT ALL CLAIMS
IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY
SUCH COURT AND IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE
AS TO THE VENUE OF ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A
COURT OR THAT SUCH COURT IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL
LIMIT THE RIGHT OF THE ADMINISTRATIVE AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST THE REIMBURSEMENT OBLIGOR OR GUARANTOR IN THE COURTS OF
ANY OTHER JURISDICTION. ANY JUDICIAL PROCEEDING BY THE GUARANTOR 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 CREDIT DOCUMENT SHALL BE
BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
XI.19. WAIVER OF JURY TRIAL. THE REIMBURSEMENT OBLIGOR, GUARANTOR, 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 CREDIT DOCUMENT OR THE RELATIONSHIP ESTABLISHED
THEREUNDER.
ARTICLE XII
THE ADMINISTRATIVE AGENT AND AGREEMENTS AMONG LENDERS
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XII.1. APPOINTMENT. Subject to the provisions of SECTION 12.11, The
First National Bank of Chicago is hereby appointed Administrative Agent
hereunder and under each other Credit 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 Guarantor 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.
XII.2. POWERS. The Administrative Agent shall have and may exercise such
powers under the Credit 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 Credit
Documents to be taken by the Administrative Agent.
XII.3. GENERAL IMMUNITY. Neither the Administrative Agent nor any of its
directors, officers, agents or employees shall be liable to the Guarantor,
the Lenders or any Lender for any action taken or omitted to be taken by it
or them hereunder or under any other Credit 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.
XII.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 Credit Document or any borrowing hereunder; (ii) the performance or
observance of any of the covenants or agreements of any obligor under any
Credit 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 Credit Document or any other instrument or writing
furnished in connection therewith (provided that Administrative Agent shall
be obligated to furnish copies of the Credit 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 Guarantor to the Administrative Agent at such time, but is voluntarily
furnished by the Guarantor to the Administrative Agent in its individual
capacity.
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XII.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 Credit 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 Credit 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.
XII.6. EMPLOYMENT OF ADMINISTRATIVE AGENTS AND COUNSEL. The
Administrative Agent may execute any of its duties as Administrative Agent
hereunder and under any other Credit 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 Credit Document.
XII.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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XII.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
Reimbursement Obligor or Guarantor for which the Administrative Agent is
entitled to reimbursement by the Reimbursement Obligor and Guarantor under
the Credit Documents including reasonable out-of-pocket expenses in
connection with the preparation, execution, delivery of the Credit 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 Credit 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 Credit 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 12.8
shall survive payment of the Obligations and termination of this Agreement.
XII.9. RIGHTS AS A LENDER.
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 Credit 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 Credit Document, with the Reimbursement Obligor, Guarantor or any
of their Subsidiaries in which the Reimbursement Obligor, Guarantor or such
Subsidiary is not restricted hereby from engaging with any other Person.
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XII.10. LENDER CREDIT DECISION. Each Lender acknowledges that it has,
independently and without reliance upon the Administrative Agent, or any
other Lender and based on the financial statements prepared by the
Reimbursement Obligor and Guarantor 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 Credit Documents. Each Lender also
acknowledges that it will, independently and without reliance upon the
Administrative Agent, or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its
own credit decisions in taking or not taking action under this Agreement and
the other Credit Documents.
XII.11. SUCCESSOR ADMINISTRATIVE AGENT. The Administrative Agent may
resign at any time by giving written notice thereof to the Lenders, the
Reimbursement Obligor and the Guarantor, 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 Guarantor if such successor is not a Lender, on
behalf of the Guarantor 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 Reimbursement Obligor,
Guarantor and the Lenders, a successor Administrative Agent upon the
confirmation of the Guarantor (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 Guarantor 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 Credit
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 Credit Documents.
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<PAGE>
XII.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.
XII.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.
XII.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 in accordance with SECTION 15 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 Guarantor's unsecured debt rating except to
the extent such items are required to be furnished directly to the Lenders by
Guarantor 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 Guarantor, 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.
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<PAGE>
XII.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 amount due from the Lenders hereunder and until
such time as such Defaulting Lender subsequently funds its Percentage of such
amount, 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 amount funded by the other Lenders for 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 Reimbursement Obligor 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
Reimbursement Obligor to the extent a portion of the Senior Loans had been
repaid with amounts that otherwise would have been distributed to a
Defaulting Lender but for the operation of this SECTION 12.15. This
provision governs only the relationship among the Administrative Agent, each
Defaulting Lender and the other Lenders; nothing hereunder shall limit the
obligation of the Reimbursement Obligor 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 Reimbursement Obligor 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 XIII
RATABLE PAYMENTS
XIII.1. Intentionally Deleted.
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<PAGE>
XIII.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 XIV
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
XIV.1. SUCCESSORS AND ASSIGNS. The terms and provisions of the Credit
Documents shall be binding upon and inure to the benefit of the Reimbursement
Obligor, Guarantor and the Lenders and their successors and permitted
assigns, except that (i) the Reimbursement Obligor and Guarantor shall not
have the right to assign their rights or obligations under the Credit
Documents and (ii) any assignment by any Lender must be made in compliance
with SECTION 14.3. Notwithstanding clause (ii) of this SECTION 14.1, any
Lender may at any time, without the consent of the Reimbursement Obligor or
Guarantor assign all or any portion of its rights under this Agreement 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 a Lender as not having made an assignment or
transfer unless and until such payee complies with SECTION 14.3 in the case
of an assignment or, in the case of any other transfer, a written notice of
the transfer is filed with the Administrative Agent. Any assignee or
transferee agrees by acceptance thereof to be bound by all the terms and
provisions of the Credit Documents. Any request, authority or consent of any
Person, who at the time of making such request or giving such authority or
consent is a Lender, shall be conclusive and binding on any subsequent
transferee or assignee of such Lender.
XIV.2. PARTICIPATIONS.
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<PAGE>
XIV.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 Commitment of such Lender or any other interest of such Lender
under the Credit 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 Credit 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 Credit Documents, all amounts payable
by the Reimbursement Obligor under this Agreement shall be determined as if
such Lender had not sold such participating interests, and the
Reimbursement Obligor 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 Credit Documents.
XIV.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 Credit 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.
XIV.3. ASSIGNMENTS.
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<PAGE>
XIV.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 Credit 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 the assigning Lender shall not be
subject to either the $10,000,000 minimum assignment amount or the
requirement set forth below regarding Reimbursement Obligor's consent or
the fee in SECTION 14.3.2(ii). If the Aggregate Commitment is reduced the
references to $10,000,000 contained in this SECTION 14.3.1 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"). The consent of the Issuing Bank to any
such assignment shall be required. So long as no Default has occurred and
is continuing, Reimbursement Obligor's consent shall also 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
Reimbursement Obligor 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.
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<PAGE>
XIV.3.2. EFFECT; EFFECTIVE DATE. Upon (i) delivery to the
Administrative Agent and the Reimbursement Obligor 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 14.3.1, 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 Credit 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
Credit Document executed by the Lenders and shall have all the rights and
obligations of a Lender under the Credit Documents, to the same extent as
if it were an original party hereto, and no further consent or action by
the Guarantor, 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.
XIV.4. DISSEMINATION OF INFORMATION. The Reimbursement Obligor
authorizes each Lender to disclose to any Participant or Purchaser or any
other Person acquiring an interest in the Credit 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 Reimbursement Obligor, Guarantor and their Subsidiaries, provided that
such Transferees agree to maintain the confidentiality of any information
that is confidential in the manner set forth in SECTION 11.14.
XIV.5. TAX TREATMENT. If any interest in any Credit 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.
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<PAGE>
XIV.6. POSSESSION OF CREDIT DOCUMENTS AND REGISTER. The Administrative
Agent shall keep and maintain complete and accurate files and records of all
matters pertaining to the Facility. 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 XV, 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 the Reimbursement Obligor, 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 the Reimbursement
Obligor or any Lender during normal business hours upon reasonable prior
notice to the Administrative Agent.
ARTICLE XV
NOTICES
XV.1. GIVING NOTICE. All notices and other communications provided to
any party hereto under this Agreement or any other Credit Document shall be
in writing or by telex or by facsimile and addressed or delivered to such
party at its address set forth below its signature hereto or at such other
address as may be designated by such party in a notice to the other parties.
Any notice, if mailed and properly addressed with postage prepaid, shall be
deemed given when received; any notice, if transmitted by telex or facsimile,
shall be deemed given when transmitted (answerback confirmed in the case of
telexes).
XV.2. CHANGE OF ADDRESS. Any of the parties to this Agreement may change
the address for service of notice upon it by a notice in writing to the other
parties hereto.
XV.3. ACCOUNTS. The Administrative Agent shall deliver to each Lender
and Reimbursement Obligor, and each Lender shall deliver to Administrative
Agent wiring instructions containing account information for purposes of the
payment of sums due under this Agreement.
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<PAGE>
ARTICLE XVI
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Reimbursement
Obligor, Guarantor, the Administrative Agent and the Lenders and each party
has notified the Administrative Agent by telex or telephone, that it has
taken such action.
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<PAGE>
IN WITNESS WHEREOF, the Reimbursement Obligor, Guarantor, the Lenders and
the Administrative Agent have executed this Agreement as of the date first
above written.
CENTERPOINT O'HARE, L.L.C., an
Illinois limited liability company
By: CenterPoint Properties Corporation,
its Manager
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
c/o CENTERPOINT PROPERTIES
CORPORATION, a Maryland corporation
401 N. Michigan Avenue, Suite 3000
Chicago, IL 60611
Attention: Paul S. Fisher
Telephone: (312) 346-5600
Facsimile: (312) 456-7696
CENTERPOINT PROPERTIES CORPORATION, a
Maryland corporation
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
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<PAGE>
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>
THE FIRST NATIONAL BANK OF CHICAGO,
Individually and as Administrative Agent
PERCENTAGE:
By:
33 1/3% ----------------------------------------
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
DRESDNER BANK AG
NEW YORK AND GRAND CAYMAN
BRANCHES
PERCENTAGE:
By:
33 1/3% ----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
By:
----------------------------------------
Print Name:
--------------------------------
Title:
-------------------------------------
Notice Address:
190 South LaSalle Street
Suite 2700
Chicago, Illinois 60603
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<PAGE>
Attention: Maureen M. Slentz
Telephone: (312) 444-1316
Facsimile: (312) 444-1301
LASALLE NATIONAL BANK
By: ______________________________
PERCENTAGE: Name:
Title:
33 1/3%
Notice Address:
LaSalle National Bank
135 S. LaSalle Street, Suite 1225
Chicago, Illinois 60603
Attention: John Hein
Telephone: (312) 904-8620
Facsimile: (312) 904-6467
-90-
<PAGE>
EXHIBIT A
<TABLE>
<CAPTION>
PRICING GRID
BASE ON GUARANTOR'S RATINGS
- ------------------------------------------------------------------------------------
Ratings: Below either
At least At least At least At least BBB- or
S&P & Moody's A- or A3 BBB+ or BBB or BBB- or Baa3**
Baa1 Baa2 Baa3
- -------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Corporate Base Rate Margin* 0 0 0 10 25
- -------------------------------------------------------------------------------------
LIBOR Margin* 80 90 100 110 125
- -------------------------------------------------------------------------------------
L/C Fee* 80 90 100 110 125
- -------------------------------------------------------------------------------------
Pricing Category 0 1 2 3 4
- -------------------------------------------------------------------------------------
</TABLE>
* In basis points per annum.
** Commencing October 23, 1998, this rating category will be deemed to apply
if the Guarantor does not have a rating of at least BBB- from S&P and a
rating of at least Baa3 from Moody's (or an alternate agency to the extent
provided below). This rating category shall also apply at any time that
either S&P has issued a rating of less than BBB- or Moody's has issued a
rating of less than Baa3, or either S&P or Moody's has withdrawn its
rating.
All margins and fees change as and when the rating classification of the
Guarantor changes. In the event the rating agencies are split on the rating for
the Guarantor, the lower rating shall be deemed to be the applicable rating. In
the event either rating agency has not issued a rating, the rating from the
agency that has issued its rating shall govern subject to the provisions above
regarding the time by which certain ratings must be obtained.
In the event of a rating agency downgrade, the Reimbursement Obligor will
receive a credit for any incremental borrowing cost should the rating
agency(ies) restore the higher rating within a ninety day period. In the event
that either S & P or Moody shall cease to follow the REIT industry, an alternate
agency will be selected that is mutually acceptable to the Required Lenders and
the Reimbursement Obligor.
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<PAGE>
EXHIBIT B
FORM OF OPINION
______________ , 19__
The Administrative Agent and
the Lenders who are parties to the
Credit Agreement described below
Gentlemen/Ladies:
We are counsel for CenterPoint O'Hare, L.L.C. ("REIMBURSEMENT OBLIGOR")
CenterPoint Properties Corporation (the "GUARANTOR"), and have represented the
Reimbursement Obligor and Guarantor in connection with their execution and
delivery of an Credit and Reimbursement Agreement among the Reimbursement
Obligor, Guarantor, The First National Bank of Chicago, individually and as
Administrative Agent, and the Lenders named therein, dated as of
__________________, 1997, providing for issuance of a Letter of Credit in the
amount of _____________ (the "AGREEMENT"). All capitalized terms used in this
opinion and not otherwise defined shall have the meanings attributed to them in
the Agreement.
We have examined the Reimbursement Obligor's and Guarantor's operating
agreement, articles of incorporation, by-laws, and resolutions, the Credit
Documents and such other matters of fact and law which we deem necessary in
order to render this opinion. Based upon the foregoing, it is our opinion that:
l. The Reimbursement Obligor, Guarantor and each of their Subsidiaries
and each Qualifying Investment Affiliate are either duly incorporated
corporations or duly qualified and formed limited partnerships or limited
liability companies, 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 the obligations under, the Credit
Documents and to conduct business in each jurisdiction in which they conduct
business.
2. The execution and delivery of the Credit Documents by the Guarantor
and Reimbursement Obligor and the performance by the Guarantor and Reimbursement
Obligor of their obligations under the Credit Documents have been duly
authorized by all necessary action and/or proceedings on the part of the
Guarantor and Reimbursement Obligor and will not:
(a) require any consent of the shareholders of Guarantor or
members of the Reimbursement Obligor;
(b) violate any law, rule, regulation, order, writ, judgment,
injunction, decree or award binding on the Reimbursement Obligor, Guarantor
or any of its
<PAGE>
Subsidiaries or the Reimbursement Obligor's, Guarantor's or any
Subsidiary's articles of incorporation, by-laws, certificate of limited
partnership, partnership agreement, operating agreement or any indenture,
instrument or agreement binding upon the Reimbursement Obligor, Guarantor
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 Reimbursement Obligor, Guarantor or any of its
Subsidiaries.
3. The Credit Documents have been duly executed and delivered by the
Reimbursement Obligor and Guarantor and constitute legal, valid and binding
obligations of the Reimbursement Obligor and Guarantor enforceable in accordance
with their terms except to the extent the enforcement thereof may be limited by
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and subject also to the availability of equitable remedies if
equitable remedies are sought.
4. There is no litigation or proceeding against the Reimbursement
Obligor, Guarantor or any of their Subsidiaries which, if adversely determined,
could 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 Reimbursement Obligor, Guarantor or any of their
Subsidiaries, is required to be obtained or made by the Reimbursement Obligor,
Guarantor or any of their Subsidiaries in connection with the execution and
delivery of the Credit Documents, the borrowings under the Agreement or in
connection with the payment by the Reimbursement Obligor or Guarantor of their
obligations under the Credit Documents.
6. The Loan does not violate the usury laws or laws regulating the use
or forbearance of money of Illinois and the operation of any term of the
Agreement or Credit Documents, including, without limitation, the terms
regarding late charges and default interest rate or the lawful exercise of any
right thereunder, shall not render the Agreement or Credit Documents
unenforceable, in whole or in part, or subject to any right of rescission,
set-off, counterclaim or defense.
7. The Guarantor qualifies as a real estate investment trust in
accordance with all applicable requirements of the Internal Revenue Code.
This opinion may be relied upon by the Administrative Agent, the Lenders
and their participants, assignees and other transferees.
Very truly yours,
-----------------------------
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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 Credit
and Reimbursement Agreement, dated as of __________, 1997 (as amended,
modified, renewed or extended from time to time, the "AGREEMENT") among
CenterPoint O'Hare, L.L.C. ("REIMBURSEMENT OBLIGOR"), CenterPoint Properties
Corporation (the "GUARANTOR"), The First National Bank of Chicago,
individually and as Administrative 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 Guarantor.
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 Guarantor 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 Guarantor'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 8.1(i),
8.1(ii), 8.1(iv), or 8.1(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 Guarantor and its Subsidiaries at such date
and the consolidated results of their operations for the period then-ended,
in accordance
<PAGE>
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 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 Guarantor 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)
===============================================================================
Maximum
Percent Percent of
Category Investment of Market Market
(i.e. Book Value) Capitalization Capitalization
- --------------------------------------------------------------------------------
(a) unimproved land 7%
- --------------------------------------------------------------------------------
(b) other property 5%
holdings
(excluding
cash, Cash
Equivalents,
the
Non-industrial
Properties and
Indebtedness of
any Subsidiary
or Qualifying
Investment
Affiliate to
the Guarantor)
- -------------------------------------------------------------------------------
(c) stock holdings 5%
other than in
Subsidiaries
and Qualifying
Investment
Affiliates
- -------------------------------------------------------------------------------
(d) mortgages other 5%
than Qualified
Mortgages
- -------------------------------------------------------------------------------
(e) joint ventures 10%
and
partnerships
other than
investments in
Qualifying
Investment
Affiliates
- -------------------------------------------------------------------------------
(f) total 20%
investments in
(a)-(e)
- -------------------------------------------------------------------------------
(g) investments in 5%
unimproved land
not adjacent to
existing
improvements
and not under
active planning
for near term
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<PAGE>
- -------------------------------------------------------------------------------
development
- -------------------------------------------------------------------------------
(h) interest in 10%
operating
leases
- -------------------------------------------------------------------------------
(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
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<PAGE>
(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)]: ---------
MUST BE LESS THAN OR EQUAL TO: $100,000,000
4. Minimum Consolidated Net Worth (Section 8.20)
(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 23, 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 8.21(i))
(a) EBITDA for the quarter most recently ended
(i) Guarantor and its Subsidiaries ---------
(ii) Allocable EBITDA of Investment Affiliates ---------
(See Schedule)
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<PAGE>
(iii) EBITDA [(i) PLUS (ii)] ---------
(b) Fully Diluted Debt Service for the quarter most recently ended.
(i) Debt Service
(1) Interest (Guarantor and Subsidiaries) ---------
(2) Principal (Guarantor 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 8.21(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.
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<PAGE>
(ii) Other Income capped at 15% ---------
(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 8.21(iii))
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<PAGE>
(a) Value of Unencumbered Assets
(i) Property Operating Income
attributable to Unencumbered Assets
owned by Guarantor 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 Guarantor
(iii) Allocable Share of Unrestricted Cash and Cash ---------
Equivalents Owned by Qualifying Investment
Affiliates
(vi) sum of (i)(5) plus (ii) plus (iii) is ---------
"Value of Unencumbered Assets
-8-
<PAGE>
(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 8.21(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 (Guarantor and Subsidiaries) ---------
(ii) Principal (Guarantor 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 8.21(v))
(a) Consolidated Secured Indebtedness
(i) secured indebtedness of Guarantor and Subsidiaries ---------
(ii) prorata share of secured indebtedness of
Investment Affiliates ---------
(iii) Consolidated Secured Indebtedness [SUM OF (i) PLUS
(ii)] ---------
(b) Market Capitalization [(6)(b)(vii)] ---------
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<PAGE>
(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 8.24)
(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 8.1(x)). If yes, provide statement describing the
occurrence and action Guarantor intends to take with
respect thereto ---------
Current on tax payments (Yes/No) (Section 8.4) ---------
Insurance in full force and effect (Yes/No)
(Sections 7.17 and 8.5) ---------
Have any shares owned by Guarantor's management (as
defined in Section 8.14) been traded (Yes/No)
If yes, describe ---------
Acceleration notice received for indebtedness
aggregating $5,000,000 or more (Section 8.27) since
last Section 8.27 notice (Yes/No) If yes, promptly
provide copy of notice to the extent not previously
submitted ---------
List all outstanding judgments (Section 9.10) ---------
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 8.12, 8.13, and 8.14).
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<PAGE>
List all Property Breaches and the nature of such breach, ---------
if any. (Section 8.30). 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.
-11-
<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
Credit and Reimbursement 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 Credit 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 Credit 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 Credit 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
<PAGE>
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 (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 Guarantor 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 Guarantor 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 Guarantor 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
Guarantor,
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<PAGE>
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 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
Credit Document, including without limitation, documents granting the
Assignor and the other Lenders a security interest in assets of the
Guarantor or any guarantor, (ii) any representation, warranty or
statement made in or in connection with any of the Credit Documents,
(iii) the financial condition or creditworthiness of the Guarantor or
any guarantor, (iv) the performance of or compliance with any of the
terms or provisions of any of the Credit Documents, (v) inspecting any
of the Property, books or records of the Guarantor, 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 Credit Documents.
7. REPRESENTATIONS OF THE ASSIGNEE. The Assignee (i)
confirms that it has received a copy of the Credit Agreement and the
other Credit 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 Credit Documents,
(iii) appoints and authorizes the Administrative Agent to take such
action as agent on its behalf and to exercise such powers under the
Credit 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 Credit
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 Credit
Documents will not be "plan assets" under ERISA, [AND (vii) ATTACHES
THE FORMS PRESCRIBED
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<PAGE>
BY THE INTERNAL REVENUE SERVICE OF THE UNITED STATES CERTIFYING THAT THE
ASSIGNEE IS ENTITLED TO RECEIVE PAYMENTS UNDER THE CREDIT 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 Credit Documents or any law, rule, regulation, order, writ,
judgment, injunction or decree and that any consent required under the
terms of the Credit 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.
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<PAGE>
13. NOTICES. Notices shall be given under this Assignment
Agreement in the manner set forth in the Credit Agreement. For the
purpose hereof, the addresses of the parties hereto (until notice of a
change is delivered) shall be the address set forth in the attachment
to Schedule 1.
IN WITNESS WHEREOF, the parties hereto have executed this
Assignment Agreement by their duly authorized officers as of the date
first above written.
[NAME OF ASSIGNOR]
By:
---------------------------------
Title:
------------------------------
------------------------------
------------------------------
[NAME OF ASSIGNEE]
By:
---------------------------------
Title:
------------------------------
------------------------------
------------------------------
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<PAGE>
SCHEDULE 1
to Assignment Agreement
1. Description and Date of Credit Agreement:
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 Credit and Reimbursement 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
<PAGE>
effective on such date pursuant to SECTION 3 hereof, and will confer with the
Administrative Agent to determine the Effective Date pursuant to SECTION 3
hereof if it occurs thereafter. The Assignor shall notify the Administrative
Agent if the Assignment Agreement does not become effective on any proposed
Effective Date as a result of the failure to satisfy the conditions precedent
agreed to by the Assignor and the Assignee. At the request of the
Administrative Agent, the Assignor will give the Administrative Agent written
confirmation of the satisfaction of the conditions precedent.
5. The Assignor or the Assignee shall pay to the Administrative
Agent on or before the Effective Date the processing fee of $3,000 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 Guarantor 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 Guarantor
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 Credit
Documents will not be "plan assets" under ERISA.
9. The Assignee authorizes the Administrative Agent to act as
its agent under the Credit Documents in accordance with the terms thereof.
The Assignee acknowledges that the Administrative Agent has no duty to
supply information with respect to the Guarantor or the Credit 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:
------------------------ ---------------------------
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<PAGE>
ACKNOWLEDGED AND CONSENTED TO
BY THE FIRST NATIONAL BANK OF CHICAGO, as Administrative Agent
By:
---------------------------------
Title:
------------------------------
[ATTACH PHOTOCOPY OF SCHEDULE 1 TO ASSIGNMENT]
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<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
"GUARANTOR"), 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 Guarantor, provided, however, that the Administrative
Agent may otherwise transfer funds as hereafter directed in writing by the
Guarantor 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
--------------------------------
<PAGE>
- ------------------------------------ -------------------------------------
(Please Print) Signature
(Deliver Completed Form to Credit Support Staff For Immediate Processing)
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<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. Guarantor and Lenders may agree in
advance on qualified firms or environmental professionals that will conduct
the Phase I Reports. Guarantor 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.
<PAGE>
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
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 Guarantor determines that a Phase
II is necessary, then the Guarantor will request the firm or environmental
professional to prepare a bid, and may
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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 Guarantor can assess whether remediation is
required under applicable Environmental Laws. If the Guarantor plans to
conduct remediation estimated to cost more than $250,000 for any Project, the
Guarantor will promptly provide written notice to the Administrative Agent.
If the Guarantor does not follow the recommendation of the firm or
environmental professional to conduct a Phase II investigation or remediation
for any Project, the Guarantor 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.
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<PAGE>
EXHIBIT G
FORM OF LETTER OF CREDIT
<PAGE>
<TABLE>
<CAPTION>
SCHEDULE 1
SUBSIDIARIES AND OTHER INVESTMENTS
(See SECTION 7.7)
=================================================================================================================
Qualifying Investment Description
Investment Owned Amount of Percent Jurisdiction of Affiliate Properties of Business
In By Investment Ownership Organization (Yes or No) Owned Operations
- -----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
- -----------------------------------------------------------------------------------------------------------------
=================================================================================================================
</TABLE>
<PAGE>
SCHEDULE 2
<TABLE>
<CAPTION>
UNENCUMBERED ASSETS
(See SECTION 7.24)
- ---------------------------------------------------------------------------------------------
Project Name Date Placed Fee or If Leasehold,
and Address (*) Type of Project In Service Owned By Leasehold Ground Lessor
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
</TABLE>
(*) Those Properties identified with an asterisk are Restricted
Unencumbered Assets (as defined in SECTION 7.25).
<PAGE>
SCHEDULE 3
INDEBTEDNESS AND LIENS
(See SECTION 8.16)
==============================================================================
Maturity and
Indebtedness Indebtedness Property Amount of
Incurred By Owned To Encumbered Indebtedness
- ------------------------------------------------------------------------------
==============================================================================
<PAGE>
SCHEDULE 4
PLANS AND MULTIEMPLOYER PLANS
None.
<PAGE>
SCHEDULE 5
ENVIRONMENTAL DISCLOSURES
None.
<PAGE>
SCHEDULE 6
NONCOMPLIANCE WITH LAWS
None.
<PAGE>
SCHEDULE 7
LITIGATION AND INVESTIGATIONS
None.
<PAGE>
SCHEDULE 8
CONTINGENT OBLIGATIONS
None.
<PAGE>
SCHEDULE 9
INDEBTEDNESS DEFAULTS
None.
<PAGE>
GUARANTY
This Guaranty is made as of September 1, 1997, by CenterPoint Properties
Corporation, a Maryland corporation (the "GUARANTOR"), to and for the benefit
of The First National Bank of Chicago, individually ("FNBC") and as
administrative agent (the "AGENT") for itself and the lenders under the
Credit and Reimbursement Agreement (as defined below) and their respective
successors and assigns (collectively, the "LENDERS").
RECITALS
A. CenterPoint O'Hare, L.L.C., an Illinois limited liability company
("Reimbursement Obligor"), and the Guarantor have requested that the Lenders
make available a credit facility to the Reimbursement Obligor in the amount
of $55,813,699 for the purpose of providing credit enhancement for certain
bonds as is more fully described in the Credit Agreement described below.
B. The Lenders have agreed to make available the Facility to the
Reimbursement Obligor pursuant to the terms and conditions set forth in a
Credit and Reimbursement Agreement of even date herewith between the
Reimbursement Obligor, the Guarantor, FNBC, individually, and as
Administrative Agent, and the Lenders named therein (as amended, modified or
restated from time to time, the "CREDIT AGREEMENT"). All capitalized terms
used herein and not otherwise defined shall have the meanings ascribed to
such terms in the Credit Agreement.
C. The Guarantor is the manager and owner of 95% of the membership
interest of the Reimbursement Obligor and, therefore, the Guarantor will
derive financial benefit from the Facility. The execution and delivery of
this Guaranty by the Guarantor is a condition precedent to the performance by
the Lenders of their obligations under the Credit Agreement.
AGREEMENTS
NOW, THEREFORE, the Guarantor, in consideration of the matters described
in the foregoing Recitals, which Recitals are incorporated herein and made a
part hereof, and for other good and valuable consideration, hereby agrees as
follows:
1. The Guarantor absolutely, unconditionally, and irrevocably guarantees to
each of the Lenders:
(a) the full and prompt payment of all unpaid, outstanding amounts
which may now be or may hereafter become due and owing to Agent and Lenders
under the Credit Agreement and any other Credit Documents, whether at
stated maturity, upon acceleration or otherwise, and at all times
thereafter;
<PAGE>
(b) the payment of all Enforcement Costs (as hereinafter defined in
PARAGRAPH 7 hereof); and
(c) the full, complete, and punctual observance, performance, and
satisfaction of all of the obligations, duties, covenants, and agreements
of the Reimbursement Obligor under the Credit Agreement and the Credit
Documents.
All amounts due, debts, liabilities, and payment obligations described in
subparagraphs (a) and (b) of this PARAGRAPH 1 are referred to herein as the
"FACILITY INDEBTEDNESS." All obligations described in subparagraph (c) of
this PARAGRAPH 1 are referred to herein as the "OBLIGATIONS."
2. Upon the occurrence of a Default, the Guarantor agrees, on written demand
by the Agent, to pay all the Facility Indebtedness and to perform all the
Obligations as are then or thereafter become due and owing or are to be
performed under the terms of the Credit Agreement and the other Credit
Documents.
3. The Guarantor does hereby waive (i) notice of acceptance of this Guaranty
by the Agent and the Lenders and any and all notices and demands of every
kind which may be required to be given by any statute, rule or law, (ii) any
defense, right of set-off or other claim which the Guarantor may have against
the Reimbursement Obligor or which the Guarantor or the Reimbursement Obligor
may have against the Agent or the Lenders, (iii) presentment for payment,
demand for payment (other than as provided for in PARAGRAPH 2 above), notice
of nonpayment (other than as provided for in PARAGRAPH 2 above) or dishonor,
protest and notice of protest, diligence in collection and any and all
formalities which otherwise might be legally required to charge the Guarantor
with liability, (iv) any failure by the Agent and the Lenders to inform the
Guarantor of any facts the Agent and the Lenders may now or hereafter know
about the Reimbursement Obligor, the Facility, or the transactions
contemplated by the Credit Agreement, it being understood and agreed that the
Agent and the Lenders have no duty so to inform and that the Guarantor is
fully responsible for being and remaining informed by the Reimbursement
Obligor of all circumstances bearing on the existence or creation, or the
risk of nonpayment of the Facility Indebtedness or the risk of nonperformance
of the Obligations, and (v) any and all right to cause a marshalling of
assets of the Reimbursement Obligor or any other action by any court or
governmental body with respect thereto, or to cause the Agent and the Lenders
to proceed against any other security given to a Lender in connection with
the Facility Indebtedness or the Obligations. Credit may be granted or
continued from time to time by the Lenders to the Reimbursement Obligor
without notice to or authorization from the Guarantor, regardless of the
financial or other condition of the Reimbursement Obligor at the time of any
such grant or continuation. The Agent and the Lenders shall have no
obligation to disclose or discuss with the Guarantor their assessment of the
financial condition of the Reimbursement Obligor. The Guarantor acknowledges
that no representations of any kind whatsoever have been made by the Agent
and the Lenders to the Guarantor. No modification or waiver of any of the
provisions of this Guaranty shall be binding upon the Agent and the Lenders
except as expressly set forth in a writing duly signed and delivered on
behalf of the Agent and the Lenders.
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<PAGE>
4. The Guarantor further agrees that Guarantor's liability as guarantor
shall in no way be impaired by any renewals or extensions which may be made
from time to time, with or without the knowledge or consent of the Guarantor
of the time for payment of any Facility Indebtedness or by any waiver by the
Agent and the Lenders under the Credit Agreement, or any other Credit
Documents, or by the Agent or the Lenders' failure or election not to pursue
any other remedies they may have against the Reimbursement Obligor, or by any
change or modification in the Credit Agreement, the Letter of Credit
(including any extension of the term of the Letter of Credit) or any other
Credit Documents, or by the acceptance by the Agent or the Lenders of any
security or any increase, substitution or change therein, or by the release
by the Agent and the Lenders of any security or any withdrawal thereof or
decrease therein, or by the application of payments received from any source
to the payment of any obligation of the Reimbursement Obligor other than the
Facility Indebtedness, even though a Lender might lawfully have elected to
apply such payments to any part or all of the Facility Indebtedness, it being
the intent hereof that Guarantor shall remain liable as principal for payment
of the Facility Indebtedness and performance of the Obligations until all
indebtedness has been paid in full and the other terms, covenants and
conditions of the Credit Agreement, and other Credit Documents and this
Guaranty have been performed, notwithstanding any act or thing which might
otherwise operate as a legal or equitable discharge of a surety. The
Guarantor further understands and agrees that the Agent and the Lenders may
at any time enter into agreements with the Reimbursement Obligor to amend and
modify the Credit Agreement or any of the other Credit Documents, or any
thereof, and may waive or release any provision or provisions of the Credit
Agreement, or any other Credit Document and, with reference to such
instruments, may make and enter into any such agreement or agreements as the
Agent, the Lenders and the Reimbursement Obligor may deem proper and
desirable, without in any manner impairing this Guaranty or any of the Agent
and the Lenders' rights hereunder or any of the Guarantor's obligations
hereunder.
5. This is an absolute, unconditional, complete, present and continuing
guaranty of payment and performance and not of collection. The Guarantor
agrees that this Guaranty may be enforced by the Agent and the Lenders
without the necessity at any time of resorting to or exhausting any security
or collateral, if any, given in connection herewith or with the Credit
Agreement, or any of the other Credit Documents or by or resorting to any
other guaranties, and the Guarantor hereby waives the right to require the
Agent and the Lenders to join the Reimbursement Obligor in any action brought
hereunder or to commence any action against or obtain any judgment against
the Reimbursement Obligor or to pursue any other remedy or enforce any other
right. The Guarantor further agrees that nothing contained herein or
otherwise shall prevent the Agent and the Lenders from pursuing concurrently
or successively all rights and remedies available to them at law and/or in
equity or under the Credit Agreement or any other Credit Documents, and the
exercise of any of their rights or the completion of any of their remedies
shall not constitute a discharge of any of the Guarantor's obligations
hereunder, it being the purpose and intent of the Guarantor that the
obligations of such Guarantor hereunder shall be primary, absolute,
independent and unconditional under any and all circumstances whatsoever.
Neither the Guarantor's obligations under this Guaranty
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<PAGE>
nor any remedy for the enforcement thereof shall be impaired, modified,
changed or released in any manner whatsoever by any impairment, modification,
change, release or limitation of the liability of the Reimbursement Obligor
under the Credit Agreement (except to the extent the Reimbursement Obligor's
liability is limited under Section 11.7 of the Credit Agreement) or any other
Credit Document or by reason of the Reimbursement Obligor's bankruptcy or by
reason of any creditor or bankruptcy proceeding instituted by or against the
Reimbursement Obligor. This Guaranty shall continue to be effective and be
deemed to have continued in existence or be reinstated (as the case may be)
if at any time payment of all or any part of any sum payable pursuant to the
Credit Agreement or any other Credit Document is rescinded or otherwise
required to be returned by the payee upon the insolvency, bankruptcy, or
reorganization of the payor, all as though such payment to such Lender had
not been made, regardless of whether such Lender contested the order
requiring the return of such payment. The obligations of the Guarantor
pursuant to the preceding sentence shall survive any termination,
cancellation, or release of this Guaranty.
6. This Guaranty shall be assignable by a Lender to any permitted assignee of
all or a portion of such Lender's rights under the Credit Documents.
7. If: (i) this Guaranty, or any of the Credit Documents are placed in the
hands of an attorney for collection or is collected through any legal
proceeding; (ii) an attorney is retained to represent the Agent or any Lender
in any bankruptcy, reorganization, receivership, or other proceedings
affecting creditors' rights and involving a claim under this Guaranty, the
Credit Agreement, or any Credit Document; (iii) an attorney is retained to
enforce any of the other Credit Documents or to provide advice or other
representation with respect to the Credit Documents in connection with an
enforcement action or potential enforcement action; or (iv) an attorney is
retained to represent the Agent or any Lender in any other legal proceedings
whatsoever in connection with this Guaranty, the Credit Agreement, any of the
Credit Documents, or any property subject thereto (other than any action or
proceeding brought by any Lender or participant against the Agent alleging a
breach by the Agent of its duties under the Credit Documents), then the
Guarantor shall pay to the Agent or such Lender upon demand all reasonable
attorney's fees, costs and expenses, including, without limitation, court
costs, filing fees and all other costs and expenses reasonably incurred in
connection therewith (all of which are referred to herein as "ENFORCEMENT
COSTS"), in addition to all other amounts due hereunder.
8. The parties hereto intend that each provision in this Guaranty comports
with all applicable local, state and federal laws and judicial decisions.
However, if any provision or provisions, or if any portion of any provision
or provisions, in this Guaranty is found by a court of law to be in violation
of any applicable local, state or federal ordinance, statute, law,
administrative or judicial decision, or public policy, and if such court
should declare such portion, provision or provisions of this Guaranty to be
illegal, invalid, unlawful, void or
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<PAGE>
unenforceable as written, then it is the intent of all parties hereto that
such portion, provision or provisions shall be given force to the fullest
possible extent that they are legal, valid and enforceable, that the
remainder of this Guaranty shall be construed as if such illegal, invalid,
unlawful, void or unenforceable portion, provision or provisions were not
contained therein, and that the rights, obligations and interest of the Agent
and the Lender or the holder of a NOTE under the remainder of this Guaranty
shall continue in full force and effect.
9. Any indebtedness of the Reimbursement Obligor to the Guarantor now or
hereafter existing is hereby subordinated to the Facility Indebtedness. The
Guarantor agrees that until the entire Facility Indebtedness has been paid in
full, (i) the Guarantor will not seek, accept, or retain for the Guarantor's
own account, any payment from the Reimbursement Obligor on account of such
subordinated debt, and (ii) any such payments to the Guarantor on account of
such subordinated debt shall be collected and received by the Guarantor in
trust for the Lenders and shall be paid over to the Agent on behalf of the
Lenders on account of the Facility Indebtedness without impairing or
releasing the obligations of the Guarantor hereunder.
10. The Guarantor waives and releases any claim (within the meaning of 11
U.S.C. Section 101) which the Guarantor may have against the Reimbursement
Obligor arising from a payment made by the Guarantor under this Guaranty and
agrees not to assert or take advantage of any subrogation rights of the
Guarantor or the Lenders or any right of the Guarantor or the Lenders to
proceed against (i) the Reimbursement Obligor for reimbursement, or (ii) any
other guarantor or any collateral security or guaranty or right of offset
held by the Lenders for the payment of the Facility Indebtedness and
performance of the Obligations, nor shall the Guarantor seek or be entitled
to seek any contribution or reimbursement from the Reimbursement Obligor or
any other guarantor in respect of payments made by the Guarantor hereunder
unless and until the Facility Indebtedness is paid in full. It is expressly
understood that the waivers and agreements of the Guarantor set forth above
constitute additional and cumulative benefits given to the Lenders for their
security and as an inducement for their extension of credit to the
Reimbursement Obligor. Nothing contained in this Paragraph 10 is intended to
prohibit the Guarantor from making all distributions to its constituent
shareholders which are required by law from time to time in order for the
Guarantor to maintain its status as a real estate investment trust in
compliance with all applicable provisions of the Code.
11. Any amounts received by a Lender from any source on account of any
Facility Indebtedness may be applied by such Lender toward the payment of
such Facility Indebtedness, and in such order of application, as a Lender may
from time to time elect.
12. The Guarantor hereby submits to personal jurisdiction in the State of
Illinois for the enforcement of this Guaranty and waives any and all personal
rights to object to such jurisdiction for the purposes of litigation to
enforce this Guaranty. The Guarantor hereby consents to the jurisdiction of
either the Circuit Court of Cook County, Illinois, or the United States
District Court for the Northern District of Illinois, in any action, suit, or
proceeding which the Agent or a Lender may at any time wish to file in
connection with this Guaranty or any related matter. The Guarantor hereby
agrees that an action, suit, or proceeding to enforce this Guaranty may be
brought in any state or federal court in the State of Illinois and hereby
waives any objection which the Guarantor may have to the laying of the venue
of any such action, suit, or proceeding in any such court; provided, however,
that the provisions of this
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<PAGE>
Paragraph shall not be deemed to preclude the Agent or a Lender from filing
any such action, suit, or proceeding in any other appropriate forum.
13. All notices and other communications provided to any party hereto under
this Agreement or any other Credit Document shall be in writing or by telex
or by facsimile and addressed or delivered to such party at its address set
forth below or at such other address as may be designated by such party in a
notice to the other parties. Any notice, if mailed and properly addressed
with postage prepaid, shall be deemed given when received; any notice, if
transmitted by telex or facsimile, shall be deemed given when transmitted
(answerback confirmed in the case of telexes). Notice may be given as
follows:
To the Guarantor:
CENTERPOINT PROPERTIES CORPORATION
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
To FNBC as Agent, and as a Lender:
The First National Bank of Chicago
One First National Plaza
Chicago, Illinois 60670
Attention: Kevin L. Gillen
Real Estate Portfolio Management
Suite 0315,14th Floor
Telephone: (312) 732-1486
Facsimile: (312) 732-1117
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<PAGE>
With a copy to:
Sonnenschein Nath & Rosenthal
8000 Sears Tower
Chicago, Illinois 60606
Attention: Steven R. Davidson, Esq.
Telephone: (312) 876-8238
Facsimile: (312) 876-7934
or at such other address as the party to be served with notice may have
furnished in writing to the party seeking or desiring to serve notice as a
place for the service of notice.
14. This Guaranty shall be binding upon the successors and assigns of the
Guarantor and shall inure to the benefit of the Agent and the Lenders'
successors and assigns.
15. This Guaranty shall be construed and enforced under the internal laws of
the State of Illinois.
16. THE GUARANTOR, THE AGENT AND THE LENDERS, BY THEIR 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 GUARANTY OR ANY OTHER CREDIT DOCUMENT OR RELATING
THERETO OR ARISING FROM THE LENDING RELATIONSHIP WHICH IS THE SUBJECT OF THIS
GUARANTY AND AGREE THAT ANY SUCH ACTION OR PROCEEDING SHALL BE TRIED BEFORE A
COURT AND NOT BEFORE A JURY.
[SIGNATURE PROCEED ON FOLLOWING PAGES]
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<PAGE>
IN WITNESS WHEREOF, the Guarantor has delivered this Guaranty in the
State of Illinois as of the date first written above.
CENTERPOINT PROPERTIES
CORPORATION, a Maryland corporation
By:
----------------------------------------
Print Name:
---------------------------------
Title:
--------------------------------------
By:
-----------------------------------------
Print Name:
---------------------------------
Title:
--------------------------------------
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<PAGE>
INDENTURE OF TRUST
Dated as of September 1, 1997
between
CITY OF CHICAGO
and
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO,
as trustee
-----------------------------------------------------
City of Chicago Variable/Fixed Rate Demand
Special Facilities Airport Revenue Bonds
(CenterPoint O'Hare, L.L.C Project)
Series 1997
------------------------------------------------------
<PAGE>
TABLE OF CONTENTS
GRANTING CLAUSE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .2
ARTICLE I DEFINITIONS AND RULES OF CONSTRUCTION. . . . . . . . . . . . . .2
Section 1.01. Definitions . . . . . . . . . . . . . . . . . . . . . . . .2
Section 1.02. Rules of Construction . . . . . . . . . . . . . . . . . . .7
ARTICLE II THE SERIES 1997 BONDS; ADDITIONAL BONDS. . . . . . . . . . . . .7
Section 2.01. Issuance of Series 1997 Bonds; Form; Dating . . . . . . . .7
Section 2.02. Interest on the Series 1997 Bonds . . . . . . . . . . . . .8
Section 2.03. Execution and Authentication. . . . . . . . . . . . . . . 15
Section 2.04. Bond Register . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.05. Registration and Exchange of Bonds; Persons Treated as
Owners . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Section 2.06. Mutilated, Lost, Stolen, Destroyed or Undelivered Bonds . 16
Section 2.07. Cancellation of Bonds . . . . . . . . . . . . . . . . . . 16
Section 2.08. Temporary Bonds . . . . . . . . . . . . . . . . . . . . . 16
Section 2.09. Book-Entry System . . . . . . . . . . . . . . . . . . . . 17
Section 2.10. Additional Bonds. . . . . . . . . . . . . . . . . . . . . 18
ARTICLE III REDEMPTION, PURCHASES IN LIEU OF REDEMPTION AND REMARKETING. . 19
Section 3.01. Notices to Trustee. . . . . . . . . . . . . . . . . . . . 19
Section 3.02. Redemption Dates. . . . . . . . . . . . . . . . . . . . . 19
Section 3.03. Selection of Bonds to Be Redeemed . . . . . . . . . . . . 19
Section 3.04. Redemption Notices. . . . . . . . . . . . . . . . . . . . 20
Section 3.05. Payment of Bonds Called for Redemption. . . . . . . . . . 21
Section 3.06. Bonds Redeemed in Part. . . . . . . . . . . . . . . . . . 21
Section 3.07. Purchase of Series 1997 Bonds in Lieu of Redemption . . . 21
Section 3.08. Disposition of Purchased Series 1997 Bonds. . . . . . . . 22
ARTICLE IV APPLICATION OF PROCEEDS AND PAYMENT OF SERIES 1997 BONDS . . . 24
Section 4.01. Application of Proceeds . . . . . . . . . . . . . . . . . 24
Section 4.02. Payments of Series 1997 Bonds . . . . . . . . . . . . . . 28
Section 4.03. Investments of Moneys . . . . . . . . . . . . . . . . . . 30
Section 4.04. Moneys Held in Trust. . . . . . . . . . . . . . . . . . . 30
ARTICLE V LETTER OF CREDIT . . . . . . . . . . . . . . . . . . . . . . . 30
Section 5.01. Requirements for Letter of Credit . . . . . . . . . . . . 30
Section 5.02. Draws . . . . . . . . . . . . . . . . . . . . . . . . . . 33
ARTICLE VI COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.01. Payment of Bonds. . . . . . . . . . . . . . . . . . . . . 34
Section 6.02. Further Assurances. . . . . . . . . . . . . . . . . . . . 34
Section 6.03. Rebate Fund . . . . . . . . . . . . . . . . . . . . . . . 34
Section 6.04. Tax Covenants . . . . . . . . . . . . . . . . . . . . . . 35
ARTICLE VII DISCHARGE OF INDENTURE . . . . . . . . . . . . . . . . . . . . 36
Section 7.01. Bonds Deemed Paid; Discharge of Indenture . . . . . . . . 36
Section 7.02. Application of Trust Moneys . . . . . . . . . . . . . . . 37
Section 7.03. Repayment to Bank and Company . . . . . . . . . . . . . . 37
ARTICLE VIII DEFAULTS AND REMEDIES. . . . . . . . . . . . . . . . . . . . . 37
Section 8.01. Events of Default . . . . . . . . . . . . . . . . . . . . 37
Section 8.02. Acceleration. . . . . . . . . . . . . . . . . . . . . . . 39
Section 8.03. Other Remedies. . . . . . . . . . . . . . . . . . . . . . 39
Section 8.04. Waiver of Past Defaults . . . . . . . . . . . . . . . . . 40
Section 8.05. Control by Majority . . . . . . . . . . . . . . . . . . . 40
Section 8.06. Limitation on Suits . . . . . . . . . . . . . . . . . . . 40
Section 8.07. Rights of Owners to Receive Payment . . . . . . . . . . . 40
Section 8.08. Collection Suit by Trustee. . . . . . . . . . . . . . . . 41
Section 8.09. Trustee May File Proofs of Claim. . . . . . . . . . . . . 41
Section 8.10. Priorities. . . . . . . . . . . . . . . . . . . . . . . . 41
Section 8.11. Undertaking for Costs . . . . . . . . . . . . . . . . . . 41
ARTICLE IX TRUSTEE AND REMARKETING AGENT. . . . . . . . . . . . . . . . . 42
Section 9.01. Duties of Trustee . . . . . . . . . . . . . . . . . . . . 42
Section 9.02. Rights of Trustee . . . . . . . . . . . . . . . . . . . . 43
Section 9.03. Individual Rights of Trustee. . . . . . . . . . . . . . . 43
Section 9.04. Trustee's Disclaimer. . . . . . . . . . . . . . . . . . . 44
Section 9.05. Notice of Defaults. . . . . . . . . . . . . . . . . . . . 44
Section 9.06. Compensation of Trustee . . . . . . . . . . . . . . . . . 44
Section 9.07. Eligibility of Trustee. . . . . . . . . . . . . . . . . . 44
Section 9.08. Replacement of Trustee. . . . . . . . . . . . . . . . . . 44
Section 9.09. Acceptance of Trust by Successor Trustee. . . . . . . . . 45
Section 9.10. Duties of Remarketing Agent . . . . . . . . . . . . . . . 46
Section 9.11. Eligibility of Remarketing Agent. . . . . . . . . . . . . 46
Section 9.12. Replacement of Remarketing Agent. . . . . . . . . . . . . 47
Section 9.13. Compensation of Remarketing Agent . . . . . . . . . . . . 47
Section 9.14. Successor Trustee or Remarketing Agent by Merger. . . . . 47
Section 9.15. Separate or Co-Trustee. . . . . . . . . . . . . . . . . . 47
ARTICLE X AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE . . . . . . . . . . 48
Section 10.01. Without Consent of Bondholders. . . . . . . . . . . . . . 48
Section 10.02. With Consent of Bondholders . . . . . . . . . . . . . . . 49
Section 10.03. Effect of Consents. . . . . . . . . . . . . . . . . . . . 50
Section 10.04. Notation on or Exchange of Bonds. . . . . . . . . . . . . 50
Section 10.05. Signing by Trustee of Amendments and Supplements. . . . . 50
Section 10.06. Company and Bank Consent Required . . . . . . . . . . . . 50
Section 10.07. Notice to Bondholders . . . . . . . . . . . . . . . . . . 50
ARTICLE XI AMENDMENTS OF AND SUPPLEMENTS TO LEASE AGREEMENT . . . . . . . 51
Section 11.01. Without Consent of Bondholders. . . . . . . . . . . . . . 51
Section 11.02. With Consent of Bondholders . . . . . . . . . . . . . . . 51
Section 11.03. Consents by Trustee to Amendments or Supplements. . . . . 51
ARTICLE XII MISCELLANEOUS. . . . . . . . . . . . . . . . . . . . . . . . .. 51
Section 12.01. Notices . . . . . . . . . . . . . . . . . . . . . . . . .. 51
Section 12.02. Bondholders' Consents . . . . . . . . . . . . . . . . . .. 52
Section 12.03. Limitation of Rights. . . . . . . . . . . . . . . . . . .. 52
Section 12.04. Severability. . . . . . . . . . . . . . . . . . . . . . .. 53
Section 12.05. Payments Due on Non-Business Days . . . . . . . . . . . .. 53
Section 12.06. Governing Law . . . . . . . . . . . . . . . . . . . . . .. 53
Section 12.07. Captions. . . . . . . . . . . . . . . . . . . . . . . . .. 53
Section 12.08. No Recourse Against City's Officers . . . . . . . . . . .. 53
Section 12.09. Limitation of Liability . . . . . . . . . . . . . . . . .. 53
Section 12.10. Counterparts. . . . . . . . . . . . . . . . . . . . . . .. 53
Section 12.11. Notice to Rating Agencies . . . . . . . . . . . . . . . .. 53
Signature . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54
Exhibit A -- Form of Bond
EXHIBIT B -- Form of Disbursement from Project Fund
<PAGE>
INDENTURE OF TRUST
THIS INDENTURE OF TRUST, made and entered into as of the first day of
September 1, 1997, by and between CITY OF CHICAGO, a home rule unit duly
organized and existing under the laws of the State of Illinois (the "CITY"), and
AMERICAN NATIONAL BANK AND TRUST COMPANY OF CHICAGO, a national banking
association duly organized, existing and authorized to accept and execute trusts
of the character herein set out under and by virtue of the laws of United States
of America, with its principal office located at 33 North LaSalle Street,
Chicago, Illinois 60690, as trustee (the "TRUSTEE").
WITNESSETH:
WHEREAS, the City is a home rule unit of local government, duly organized
and validly existing under the laws of the State of Illinois, and, in accordance
with the provisions of Section 6(a) of the 1970 Constitution of the State of
Illinois, is authorized to issue bonds for the purpose of financing a portion of
the costs of funding the designing, constructing, rehabilitating, furnishing and
equipping and leasing of air cargo facilities used for the receiving and storing
of cargo being transported at Chicago-O'Hare International Airport (the
"AIRPORT") and other incidental uses and other improvements related to the
operation of the Airport (the "PROJECT");
WHEREAS, the City now intends to issue its Variable/Fixed Rate Demand
Special Facilities Airport Revenue Bonds (CenterPoint O'Hare, L.L.C. Project)
Series 1997 in the aggregate principal amount of $55,000,000 (the "SERIES 1997
BONDS") and loan the proceeds to CenterPoint O'Hare, L.L.C. (the "COMPANY") for
the purpose of financing a portion of the costs of funding the designing,
constructing, rehabilitating, furnishing and equipping and leasing the Project
on property owned by the City and leased to the Company under the Ground Lease
(defined in Article I); and
WHEREAS, the execution and delivery of this Indenture, as hereinafter
defined, and the issuance of the Series 1997 Bonds as herein provided have been
in all respects duly and validly authorized by proceedings duly passed on and
approved by the City; and
<PAGE>
WHEREAS, the Series 1997 Bonds and any additional parity bonds issued
hereunder (the Series 1997 Bonds and any such additional parity bonds are
hereinafter called the "BONDS") will be payable from and secured by a pledge of
certain of the City's rights under the Loan Agreement, as hereinafter defined;
NOW, THEREFORE, the City and the Trustee agree as follows for the benefit
of the other and for the benefit of the Owners, as hereinafter defined, of the
Bonds issued pursuant to this Indenture.
GRANTING CLAUSE
To secure the payment of the Bonds, the City assigns to the Trustee and
grants to the Trustee a security interest in all right, title and interest of
the City in and to (a) the Loan Agreement, including the current and continuing
right to claim, collect, receive and give receipts for all amounts payable by or
receivable from the Company under the Loan Agreement, to bring actions and
proceedings under the Loan Agreement for the enforcement of the Loan Agreement
and to do all things that the City is entitled to under the Loan Agreement, but
excluding the Unassigned Rights, as hereinafter defined, and (b) all moneys and
securities held from time to time by the Trustee as provided in this Indenture
for the equal and proportionate benefit of all Owners of the Bonds without
priority or distinction as to lien or otherwise of any Bonds over any other
Bonds, except the Rebate Fund and the Purchase Fund created herein and as
otherwise provided in this Indenture. Neither the Trustee, the Owners nor the
Beneficial Owners shall have any interest in the Ground Lease (defined in
Article I) or any amounts payable thereunder or in the Project or in any
property or improvements at the Airport or any revenues derived by the City from
the operation of the Airport generally.
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ARTICLE I
DEFINITIONS AND RULES OF CONSTRUCTION
SECTION 1.01. DEFINITIONS. For all purposes of this Indenture, unless the
context requires otherwise, the following terms shall have the following
meanings:
"ADDITIONAL BONDS" means the additional parity bonds authorized to be
issued by the City pursuant to Section 2.10.
"AIRPORT" is defined in the first recital clause of this Indenture.
"ALTERNATE LETTER OF CREDIT" means an irrevocable letter of credit
authorizing drawings thereunder by the Trustee, issued by a national banking
association, a bank, a trust company or other financial institution, and
satisfying the requirements of Article V.
"BANK" means the issuer of a Letter of Credit and its successors and
assigns in that capacity and, in the event an Alternate Letter of Credit is
outstanding, the issuer of the Alternate Letter of Credit.
"BANKRUPTCY LAW" is defined in Section 8.01.
"BENEFICIAL OWNER" is defined in Section 2.09 when the Bonds are in the
Book-Entry System and otherwise means the Bondholder.
"BONDHOLDER" or "OWNER" means the registered owner of any Bond.
"BONDS" is defined in the fourth recital clause of this Indenture.
"BOOK-ENTRY SYSTEM" means the system maintained by the Securities
Depository and described in Section 2.09.
"BUSINESS DAY" means any day other than (i) a Saturday or Sunday, (ii) a
day on which commercial banks in Chicago, Illinois, or the city or cities in
which are located the principal corporate trust office of the Trustee and the
office of the Bank at which demands for payment under the Letter
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of Credit are to be presented are authorized by law to close or (iii) a day
on which the New York Stock Exchange is closed.
"CODE" means the Internal Revenue Code of 1986, as amended, and the
Treasury regulations promulgated thereunder.
"COMMERCIAL PAPER MODE" means each period of time, comprised of Commercial
Paper Periods, during which Commercial Paper Rates are in effect.
"COMMERCIAL PAPER PERIOD" means, with respect to any Series 1997 Bond, each
period set under Section 2.02(a)(3).
"COMMERCIAL PAPER RATE" means, with respect to any Series 1997 Bond, the
interest rate on such Bond set under Section 2.02(a)(3).
"COMPANY" means CenterPoint O'Hare, L.L.C., a limited liability company,
and its permitted successors and assigns as provided in Section 5.6 of the Loan
Agreement.
"COMPANY REPRESENTATIVE" means the President, any Executive Vice President
or Senior Vice President of the Manager or any other person at the time
designated by a written certificate furnished to the Trustee and the City
containing the specimen signature of such person and signed on behalf of the
Company by any of its officers. The certificate may designate an alternate or
alternates.
"COSTS OF ISSUANCE FUND" is the fund of that name created in Section 4.01.
"DAILY RATE" means any interest rate on the Series 1997 Bonds set under
Section 2.02(a)(1).
"EVENT OF DEFAULT" is defined in Section 8.01.
"EXPIRATION DATE" means the stated expiration date of the Letter of Credit,
as such date may be extended from time to time by the Bank.
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"FAVORABLE OPINION OF TAX COUNSEL" means an Opinion of Tax Counsel
addressed to the City and the Trustee to the effect that the action proposed to
be taken is permitted by the laws of the State, is not prohibited by this
Indenture and will not adversely affect any exclusion from gross income for
federal income tax purposes of interest on the Bonds. Tax Counsel, with the
consent of the Company, may take such actions it deems necessary in order to
enable it to deliver a Favorable Opinion of Tax Counsel, including, without
limitation, the filing of a Form 8038 with the Internal Revenue Service.
"GROUND LEASE" means the Ground Lease for Site 19 O'Hare International
Airport from the City, as Landlord, to O'Hare Tech Center Associates, L.P.,
Tenant, dated August 15, 1995, as heretofore supplemented and amended, as
amended by the Ground Lease Amendment and as hereafter further supplemented and
amended from time to time. The Ground Lease was assigned to the Company
pursuant to an Assignment and Assumption of Ground Lease dated May 10, 1996 from
O'Hare Tech Center Associates, L.P., which assignment was consented to by the
City.
"GROUND LEASE AMENDMENT" means the First Amendment to Ground Lease dated as
of September 1, 1997 between the City and the Company.
"INDENTURE" means this Indenture of Trust, as amended or supplemented from
time to time in accordance with its terms.
"INTEREST PAYMENT DATE" is defined in the Series 1997 Bonds.
"INTEREST PERIOD" is defined in the Series 1997 Bonds.
"J.J. KENNY INDEX" means, as of any date, the index of 30-day yields on
high-grade tax exempt municipal bonds as determined by J.J. Kenny Co., Inc. or
any successor thereto and published on such date (or, if not published on such
date, on the most recent day prior thereto on which such index shall have been
so published) or, if such index is unavailable, then such other publicly
available index or measurement of short-term yields on high-grade tax-exempt
municipal bonds selected by the Trustee.
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<PAGE>
"LETTER OF CREDIT" means a letter of credit or other credit facility
satisfying the requirements of Article V, including any extensions or amendments
thereto, and including any Alternate Letter of Credit delivered pursuant to
Section 5.01.
"LOAN AGREEMENT" means the Loan Agreement, dated as of the date of this
Indenture, between the City and the Company, as amended or supplemented from
time to time in accordance with its terms.
"LONG-TERM INTEREST RATE" means any interest rate on the Series 1997 Bonds
set under Section 2.02(a)(4).
"LONG-TERM INTEREST RATE PERIOD" is defined in Section 2.02(a)(4).
"MANAGER" means the manager of the Company pursuant to its Operating
Agreement, the initial Manager being CenterPoint Properties Corporation, a
Maryland corporation.
"MATURITY DATE" means, with respect to Series 1997 Bonds, September 1, 2032
or any extension thereof pursuant to Section 9 of the Series 1997 Bonds.
"OPINION OF COUNSEL" means a written opinion of counsel who is reasonably
acceptable to the City and the Trustee. The counsel may be an employee of or
counsel to the City, the Trustee or the Company.
"OPINION OF TAX COUNSEL" means an Opinion of Counsel by counsel of
nationally recognized standing in matters relating to the exclusion of interest
from gross income on obligations issued by states and their political
subdivisions or agencies.
"OUTSTANDING," when used with reference to Bonds, means all Bonds which
have been authenticated and delivered by the Trustee under this Indenture,
except the following:
a. Bonds canceled or purchased by or delivered to the Trustee for
cancellation;
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b. Bonds that have become due (at maturity or on redemption,
acceleration or otherwise) and for the payment, including premium and
interest accrued to the due date, of which sufficient moneys are held by
the Trustee;
c. Bonds deemed paid by Section 7.01; and
d. Bonds in lieu of which others have been authenticated under
Section 2.05 (relating to registration and exchange of Bonds) or 2.06
(relating to mutilated, lost, stolen, destroyed or Undelivered Bonds).
Bonds purchased by the Trustee or the Company pursuant to tenders or in lieu of
redemption under Article III will continue to be Outstanding until the Company
directs the Trustee to cancel them. Undelivered Bonds are not Outstanding, but
Bonds authenticated and delivered in lieu of Undelivered Bonds as provided in
the second paragraph of Section 2.06 will be Outstanding.
"PSA MUNICIPAL INDEX" means the Public Securities Association Municipal
Index as of the most recent date for which such index was published or such
other weekly, high-grade index comprised of seven-day, tax-exempt variable rate
demand notes produced by Municipal Market Data, Inc., or its successor, or
otherwise designated by the Public Securities Association.
"PARTICIPANT" means one of the entities which deposit securities, directly
or indirectly, in the Book-Entry System.
"PROJECT" means the facilities financed from the proceeds of the Series
1997 Bonds and described in Exhibit A to the Loan Agreement.
"PROJECT CERTIFICATE" means the Project Certificate executed and delivered
by the Company on the date of issuance of the Series 1997 Bonds.
"PROJECT COSTS" is defined in Section 4.01.
"PROJECT FUND" is the fund of that name created in Section 4.01.
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<PAGE>
"PROJECT SITE" means the real property described in the Ground Lease,
including any property added thereto pursuant to Article 27 of the Ground Lease.
"PURCHASE CONTRACT" means the Bond Placement Agreement, dated September 17
1997, among the City, the Company and The First National Bank of Chicago and
LaSalle National Bank, relating to the placement of the Series 1997 Bonds upon
the original issuance thereof.
"PURCHASE FUND" is the fund of that name created in Section 4.02.
"RATING AGENCY" means Moody's Investors Service, Inc., a corporation duly
organized and existing under and by virtue of the laws of the State of Delaware,
and its successors and assigns, and Standard & Poor's Ratings Services, a
division of The McGraw-Hill Companies, Inc., a corporation duly organized and
existing under and by virtue of the laws of the State of New York, and its
successors and assigns, except that if either such entity shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, then the term "Rating Agency" shall be deemed to include any other
nationally recognized securities rating agency selected by the Company and
approved by the Trustee (which shall not be subject to any liability by reason
of such approval).
"REBATE FUND" is the fund of that name created in Section 6.03.
"RECORD DATE" is defined in the Bonds.
"REMARKETING AGENT" means The First National Bank of Chicago and its
successors acting in such capacity under this Indenture.
"REMARKETING AGREEMENT" means the Remarketing Agreement, dated as of the
date of this Indenture, between the Company and the Remarketing Agent, or any
similar agreement between the Company and the Remarketing Agent, as amended or
supplemented from time to time in accordance with its terms.
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<PAGE>
"RESPONSIBLE OFFICER" means the Chairman of the Board, the President or any
other officer or assistant officer of the Trustee assigned by the Trustee to
administer its corporate trust matters.
"SECURITIES DEPOSITORY" means The Depository Trust Company, New York, New
York, or its nominee and the successors and assigns of such nominee, or any
successor appointed under Section 2.09.
"SERIES 1997 BONDS" is defined in the second recital clause of this
Indenture.
"STATE" means the State of Illinois.
"TAX AGREEMENT" means the Tax Exemption Certificate and Agreement, dated
the date of issuance of the Series 1997 Bonds, among the Company, the City and
the Trustee.
"TRUSTEE" means American National Bank and Trust Company of Chicago and its
successors acting in such capacity under this Indenture.
"UNASSIGNED RIGHTS" means the rights of the City under Section 5.1
(relating to fees and expenses), Section 5.3 (relating to indemnification),
Section 6.2 (relating to expenses of collection) and Section 8.4 (relating to
payment of certain expenses) of the Loan Agreement.
"UNDELIVERED BOND" means any Bond purchased pursuant to tender or in lieu
of redemption and which is not delivered to the Trustee for payment of the
purchase price thereof and is subject to the second paragraph of Section 2.06.
"U.S. GOVERNMENT OBLIGATIONS" is defined in Section 7.01.
"WEEKLY RATE" means any interest rate on the Series 1997 Bonds set under
Section 2.02(a)(2).
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<PAGE>
SECTION 1.02. RULES OF CONSTRUCTION. Unless the context otherwise
requires:
(a) an accounting term not otherwise defined has the meaning assigned
to it in accordance with generally accepted accounting principles;
(b) references to Articles and Sections are to the Articles and
Sections of this Indenture; and
(c) the singular form of any word, including the terms defined in
Section 1.01, includes the plural, and vice versa, and a word of any gender
includes all genders.
ARTICLE II
THE SERIES 1997 BONDS; ADDITIONAL BONDS
The Series 1997 Bonds shall be designated "City of Chicago Variable/Fixed
Rate Demand Special Facilities Airport Revenue Bonds (CenterPoint O'Hare,
L.L.C. Project) Series 1997." The total aggregate principal amount of Series
1997 Bonds that may be Outstanding shall not exceed the amount specified in
the Series 1997 Bonds, except as provided in Section 2.06 with respect to the
replacement of lost, stolen, destroyed or Undelivered Bonds. The Series 1997
Bonds shall be substantially in the form of EXHIBIT A to this Indenture,
which is hereby incorporated by reference and made a part hereof, and in the
denominations provided for in the Series 1997 Bonds. The Series 1997 Bonds
may have notations, legends or endorsements required by law or usage.
Each Series 1997 Bond shall be dated the date of the original issuance and
delivery of the Bonds and shall mature, subject to prior redemption, on the
Maturity Date. Series 1997 Bonds issued in exchange for Series 1997 Bonds
surrendered for transfer or exchange or in replacement of mutilated, lost,
stolen, destroyed or Undelivered Bonds shall bear interest from the last date to
which interest has been paid on the Series 1997 Bonds being transferred,
exchanged or replaced or, if no interest has been paid, from the
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date of the original issuance and delivery of the Series 1997 Bonds. Series
1997 Bonds shall be numbered as determined by the Trustee.
Upon the execution and delivery of this Indenture, the City shall execute
and deliver to the Trustee and, upon receipt by the Trustee of a Letter of
Credit satisfying the requirements of Article V, the Trustee shall authenticate,
the Series 1997 Bonds and deliver them to the purchaser or purchasers as
directed by the City.
SECTION 2.02. INTEREST ON THE SERIES 1997 BONDS. Interest on the Series
1997 Bonds shall be payable as provided in the Series 1997 Bonds and in this
Section 2.02. Interest on the Series 1997 Bonds shall initially be payable at
the Weekly Rate. The interest rate determination method may be changed by the
Company as described in the following subsection (b). The effective date of any
such change in the interest rate determination method shall be the first day of
the first Interest Period during which the Bonds shall bear interest at a rate
determined by the new method. The methods of determining the interest rate on
the Bonds are as provided in the following subsection (a).
(a) INTEREST RATE DETERMINATION METHODS. While there exists an Event of
Default, the interest rate on each Series 1997 Bond shall be the interest rate
on such Series 1997 Bond on the day before the Event of Default occurred.
(1) DAILY RATE. When interest on the Series 1997 Bonds is payable at
a Daily Rate, the Remarketing Agent shall set the Daily Rate on or before
9:30 a.m., New York City time, on each Business Day for that Business Day.
Each Daily Rate shall be the minimum rate necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt obligations
comparable to the Series 1997 Bonds known by the Remarketing Agent to have
been priced or traded under then-prevailing market conditions) for the
Remarketing Agent to sell the Series 1997 Bonds on the effective date of
such Daily Rate at their principal amount (without regard to accrued
interest). The Daily Rate for any non-Business Day shall be the Daily Rate
for the last day on which a Daily Rate was set.
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(2) WEEKLY RATE. The Remarketing Agent shall set a Weekly Rate on or
before 4:30 p.m., New York City time, on the last Business Day before the
commencement of a period during which the Series 1997 Bonds will bear
interest at a Weekly Rate and on each Tuesday thereafter so long as
interest on the Series 1997 Bonds is to be payable at a Weekly Rate or, if
any Tuesday is not a Business Day, on the next preceding Business Day.
Each Weekly Rate shall be the minimum rate necessary (as determined by the
Remarketing Agent based on the examination of tax-exempt obligations
comparable to the Series 1997 Bonds known by the Remarketing Agent to have
been priced or traded under then-prevailing market conditions) for the
Remarketing Agent to sell the Series 1997 Bonds on the effective date of
such Weekly Rate at their principal amount (without regard to accrued
interest). The first Weekly Rate shall apply to the period beginning on
the date of original issuance and delivery of the Series 1997 Bonds and
ending on the next Tuesday. Thereafter, each Weekly Rate shall apply to
(i) the period beginning on the Wednesday of the week in which such Weekly
Rate is set and ending on the following Tuesday or, if earlier, ending on
the day before the effective date of a new method of determining the
interest rate on the Series 1997 Bonds or (ii) the period beginning on the
effective date of a change to a Weekly Rate and ending on the next Tuesday.
(3) COMMERCIAL PAPER RATE. During a Commercial Paper Mode, each
Series 1997 Bond shall bear interest during the Commercial Paper Period
then applicable to such Series 1997 Bond at the then applicable Commercial
Paper Rate for such Series 1997 Bond. Different Commercial Paper Periods
may apply to different Series 1997 Bonds at any time and from time to time.
Except as otherwise described in this subdivision (3), the Commercial Paper
Period and Commercial Paper Rate for each Series 1997 Bond shall be
determined by the Remarketing Agent no later than 4:30 p.m., New York City
time, on the first day of each Commercial Paper Period.
(i) DETERMINATION OF COMMERCIAL PAPER PERIODS. Each Commercial Paper
Period shall be a period of at least one day and not more than 365 days,
determined by the
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Remarketing Agent to be the period which, together with all other
Commercial Paper Periods for all Series 1997 Bonds then Outstanding, will
result in the lowest overall interest expense on the Series 1997 Bonds
over the next 365 days. Each Commercial Paper Period shall end on either
the day before a Business Day or on the day before the Maturity Date.
However, any Series 1997 Bond purchased on behalf of the Company and
remaining unsold by the Remarketing Agent as of the close of business on
the first day of a Commercial Paper Period for such Series 1997 Bond
shall have a Commercial Paper Period of one day or, if that Commercial
Paper Period would not end on a day before a Business Day, a Commercial
Paper Period of the shortest possible duration greater than one day and
ending on a day before a Business Day.
In determining the number of days in each Commercial Paper Period,
the Remarketing Agent shall take into account the following factors: (I)
existing short-term tax-exempt market rates and indices of such
short-term rates, (II) the existing market supply and demand for
short-term tax-exempt securities, (III) existing yield curves for
short-term and long-term tax-exempt securities for obligations of credit
quality comparable to the Series 1997 Bonds, (IV) general economic
conditions, (V) industry economic and financial conditions that may
affect or be relevant to the Series 1997 Bonds, (VI) the number of days
in other Commercial Paper Periods applicable to the Series 1997 Bonds and
(VII) such other facts, circumstances and conditions as the Remarketing
Agent, in its sole discretion, shall determine to be relevant.
(ii) DETERMINATION OF COMMERCIAL PAPER RATES. The Commercial Paper
Rate for each Commercial Paper Period for each Series 1997 Bond shall be
the minimum rate necessary (as determined by the Remarketing Agent based on
the examination of tax-exempt obligations comparable to the Series 1997
Bonds known by the Remarketing Agent to have been priced or traded under
the then-prevailing market conditions) for the Remarketing Agent to sell
such Series 1997
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Bond on the effective date of such Commercial Paper Rate at its principal
amount (without regard to accrued interest).
Notwithstanding anything in this Indenture to the contrary, no
Commercial Paper Period may be established (i) in respect of Series 1997
Bonds to be redeemed or purchased in lieu of redemption after the making of
a determination requiring a "MANDATORY REDEMPTION ON DETERMINATION OF
TAXABILITY" as described in Section 8 of the Series 1997 Bonds and (ii)
unless the Letter of Credit, if any, terminates no earlier than 20 days
after the last day of such Commercial Paper Rate Period.
(4) LONG-TERM INTEREST RATE. The Remarketing Agent shall set a
Long-Term Interest Rate on a date no later than the day before the
beginning of any period (a "LONG-TERM INTEREST RATE PERIOD") during which
interest on the Series 1997 Bonds will be payable at a Long-Term Interest
Rate. Each Long-Term Interest Rate shall be the minimum rate necessary
(as determined by the Remarketing Agent based on the examination of
tax-exempt obligations comparable to the Series 1997 Bonds known by the
Remarketing Agent to have been priced or traded under then-prevailing
market conditions) for the Remarketing Agent to sell the Series 1997
Bonds on the effective date of such Long-Term Interest Rate at their
principal amount (without regard to accrued interest). The Long-Term
Interest Rate Period shall be determined as provided in the following
subsection (b).
(5) FAILURE OF REMARKETING AGENT TO ANNOUNCE INTEREST RATES ON THE
SERIES 1997 BONDS. In the event that the appropriate interest rate or
Commercial Paper Period is not or cannot be determined for whatever reason,
the method of determining interest on the Series 1997 Bonds shall be
converted automatically to the Weekly Rate (without the necessity of
complying with the requirements of Section 2.02(b)) and the interest rate
shall be equal to the PSA Municipal Index, provided that if such index is
no longer provided by Municipal Market Data, Inc. or its successor, the
rate shall be equal to the J.J. Kenny Index or if such index is not
available,
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such other index (or percentage of an index) deemed appropriate for
tax-exempt securities of the nature of the Series 1997 Bonds as the
Remarketing Agent, with the consent of the Trustee, may have previously
selected; PROVIDED that if the Series 1997 Bonds are then in a Long-Term
Interest Rate Period, the Series 1997 Bonds shall bear interest at a Weekly
Rate, but only if a Favorable Opinion of Tax Counsel with respect to the
change to a Weekly Rate has been delivered to the Trustee and not rescinded
prior to the effective date of such conversion. If such Favorable Opinion
of Tax Counsel has not been delivered or has been delivered but thereafter
rescinded prior to the effective date of such conversion, the Series 1997
Bonds shall remain in a Long-Term Interest Rate Period with an interest
rate equal to the interest rate for the immediately prior Long-Term
Interest Rate Period and with a duration equal to such Long-Term Interest
Rate Period (or, if shorter, a Long-Term Interest Rate Period ending on the
day before the Maturity Date). The Trustee shall promptly notify the
holders of Series 1997 Bonds of any such automatic change as set forth in
Section 2.02(c). While Series 1997 Bonds are in a Commercial Paper Mode,
during any transition period caused by an automatic conversion of such
Series 1997 Bonds to a Weekly Rate in accordance with this subdivision (5),
Series 1997 Bonds bearing interest at a Weekly Rate and Series 1997 Bonds
bearing interest at a Commercial Paper Rate, as applicable, shall be
governed by the provisions of this Indenture applicable to such methods of
determining interest on the Series 1997 Bonds, respectively.
(b) (1) CHANGE IN INTEREST RATE DETERMINATION METHOD. The Company may
change the method of determining the interest rate on the Series 1997 Bonds by
notifying the City, the Trustee, the Bank, the Remarketing Agent and, if the
Book-Entry System is then in effect for the Series 1997 Bonds, the Securities
Depository. Such notice shall contain (a) the effective date of the change (as
specified in the fourth sentence of this Section 2.02), (b) the new interest
rate determination method and (c) if the change is to a Long-Term Interest Rate,
the last day of the first Long-Term Interest Rate Period and, at the option of
the Company, the effective date and last day of any succeeding Long-Term
Interest Rate Period or Periods (which last day for each Long-Term Interest Rate
Period must be either the day before the Maturity Date or a day before a
Business Day
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which is at least 365 days after the effective date). The notice must be
accompanied by a Favorable Opinion of Tax Counsel, except as described below.
Except in the case of the rescission of such Favorable Opinion of Tax Counsel
as described in Section 2.02(e), if the Company's notice complies with this
subsection (b), the interest rate on the Series 1997 Bonds shall be
determined in accordance with the method specified therein, to become
effective on the date specified therein; and such new method shall continue
in effect until there is another change as provided in this Section 2.02.
Notwithstanding anything in this Indenture to the contrary, the Company must
deliver a Favorable Opinion of Tax Counsel whenever there is a change from a
method during which the interest rate on the Series 1997 Bonds is set at
intervals of one year or less to a method during which the interest rate on
the Series 1997 Bonds is set at intervals in excess of one year, or vice
versa.
If at any time the Series 1997 Bonds shall bear interest at a Long-Term
Interest Rate and 30 days before the end of the then current Long-Term Interest
Rate Period the Company shall not have provided for the next interest rate
period, a new Long-Term Interest Rate Period of the same duration shall follow
(or, if shorter, a Long-Term Interest Rate Period ending on the day before the
Maturity Date).
When one Long-Term Interest Rate Period succeeds another, all provisions of
this Indenture applying to a change in the interest rate determination method
shall apply, except:
(A) there shall be no redemption as described under "MANDATORY
REDEMPTION UPON A CHANGE IN THE METHOD OF DETERMINING THE INTEREST RATE ON
THE SERIES 1997 BONDS" in Section 8 of the Series 1997 Bonds;
(B) the Company shall not be required to deliver a Favorable Opinion
of Tax Counsel if the new Long-Term Interest Rate Period automatically
occurs because the Company has not provided for the next Long-Term Interest
Rate Period as described in the preceding paragraph; and
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(C) the Company shall not be required to deliver a Favorable Opinion
of Tax Counsel if the Company has previously designated one or more
successive Long-Term Interest Rate Periods substantially equal in length to
the then current Long-Term Interest Rate Period and if a Favorable Opinion
of Tax Counsel was delivered before the first such Long-Term Interest Rate
Period.
(2) LIMITATIONS. Any change in the method of determining the interest
rate on the Series 1997 Bonds pursuant to subdivision (1) above must also comply
with the following:
(i) the effective date of the change (or each effective date in the
case of a change from a Commercial Paper Mode) shall be a Business Day
which is at least 15 days (30 days if the effective date is earlier than
the day after the last day of the then current Long-Term Interest Rate
Period) after the fifth Business Day (or such shorter period as shall be
agreed to by the Trustee) following receipt by the Trustee of the Company's
notice of change;
(ii) if a Long-Term Interest Rate is then in effect, the effective
date of any change must be either (A) the day after the last day of the
then current Long-Term Interest Rate Period or (B) provided that the
Company delivers a Favorable Opinion of Tax Counsel on the date notice of
such change is given to the Trustee, any other day on which the Series 1997
Bonds would be subject to redemption as described under the paragraph
captioned "OPTIONAL REDEMPTION DURING LONG-TERM INTEREST RATE PERIOD" in
Section 8 of the Series 1997 Bonds;
(iii) if the Company designates successive Long-Term Interest Rate
Periods, the effective date of each later Long-Term Interest Rate Period
must be the day after the last day of the immediately preceding Long-Term
Interest Rate Period;
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(iv) if a Commercial Paper Mode is then in effect, the effective date
of any change must be either the day after the last day of the then current
Commercial Paper Mode or, as to any Series 1997 Bond, the day after the
last day of the Commercial Paper Period then in effect (or to be in effect)
with respect to such Series 1997 Bond;
(v) (A) if any Series 1997 Bonds have been called for redemption and
the redemption has not yet been effected, the effective date of the change
cannot occur before the redemption date, and (B) after a determination is
made requiring a redemption as described under "MANDATORY REDEMPTION ON
DETERMINATION OF TAXABILITY" in Section 8 of the Series 1997 Bonds, no
change in the method of determining the interest rate on the Series 1997
Bonds may become effective until such redemption or purchase in lieu of
redemption has been effected;
(vi) if a Commercial Paper Mode is then in effect, the Remarketing
Agent shall determine Commercial Paper Periods of such duration as will, in
the judgment of the Remarketing Agent, best promote an orderly transition
to the new method; and after the receipt by the Trustee of the Company's
notice of such change, the day after the last day of the then current
Commercial Paper Period for each Series 1997 Bond shall be, with respect to
such Series 1997 Bond, the effective date of such change; and the
Remarketing Agent shall promptly give written notice of each such last day
and each such effective date with respect to each Series 1997 Bond to the
City, the Company and the Trustee;
(vii) if a Long-Term Interest Rate or a Daily Rate is then in
effect, the effective date of any change cannot occur during the period
after a Record Date and to, but not including, the related Interest Payment
Date; and
(viii) if a Letter of Credit is then in effect, the number of days
of interest covered by the Letter of Credit shall be as set forth in
Article V.
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During any transition period, Series 1997 Bonds bearing interest at a
Commercial Paper Rate shall be governed by the provisions of this Indenture
applicable to a Commercial Paper Mode and Series 1997 Bonds bearing
interest at a Daily Rate, Weekly Rate or Long-Term Interest Rate, as
applicable, shall be governed by the provisions of this Indenture
applicable to such methods of determining the interest rate on the Series
1997 Bonds.
(c) NOTICE TO HOLDERS OF SERIES 1997 BONDS OF CHANGE IN INTEREST RATE
DETERMINATION METHOD. When a change in the method of determining the interest
rate on the Series 1997 Bonds is to be made, or upon the commencement of any new
Long-Term Interest Rate Period, the Trustee will notify the holders of Series
1997 Bonds by first-class mail at least 15 days before the effective date (or
each effective date in the case of a change from a Commercial Paper Mode) of
such change or new period, except that such notice shall be given at least 30
days prior to the effective date if a Long-Term Interest Rate is then in effect
and the effective date is earlier than the day after the last day of the then
current Long-Term Interest Rate Period. The notice shall state:
(1) that the interest rate determination method for the Series 1997
Bonds will be changed and what the new method will be;
(2) the effective date of the change; and
(3) that the Series 1997 Bonds will be subject to mandatory
redemption on the effective date of the change, as provided in Section 8 of
the Series 1997 Bonds.
The information required in any notice pursuant to this subsection (c) and
the information required in any redemption notice (including an Additional
Notice) pursuant to Section 3.04 may be combined in a single notice if the same
shall be sent to holders of Series 1997 Bonds in the manner and at the time
specified in "NOTICE OF REDEMPTION" in Section 8 of the Series 1997 Bonds.
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(d) CALCULATION OF INTEREST. The Remarketing Agent shall provide the
Trustee, the Bank and the Company with notice in writing or by telephone
(promptly confirmed by facsimile transmission):
(1) by 3:00 p.m., New York City time, on the last Business Day of
each month during which interest on the Series 1997 Bonds is payable at a
Daily Rate, the Daily Rate for each day in such month;
(2) by 9:00 a.m., New York City time, on the Business Day after each
day on which a Weekly Rate is set, such Weekly Rate;
(3) by 9:00 a.m., New York City time, on the Business Day after the
first Business Day of each Commercial Paper Period, the duration thereof
and the related Commercial Paper Rate, PROVIDED that, for Commercial Paper
Periods of only one Business Day such information shall be provided by
12:00 noon on the first day of such Commercial Paper Period;
(4) on the first Business Day of each Long-Term Interest Rate Period,
the duration thereof and the related Long-Term Interest Rate; and
(5) on a Business Day preceding any redemption date, any interest
rate required by the Trustee in order to enable it to calculate the accrued
interest, if any, due on such redemption date.
Using the interest rates supplied by such notices, the Trustee shall
calculate the amount of interest payable on the Series 1997 Bonds. The
Remarketing Agent shall inform the Trustee, the Bank and the Company orally
(promptly confirmed by facsimile, if requested) at the oral request of either of
them of any interest rate set by the Remarketing Agent. The Remarketing Agent
shall confirm the current interest rate by telephone or in writing to any holder
of Series 1997 Bonds who requests it in any manner.
The setting of interest rates and the calculation of the amount of interest
payable on the Series 1997 Bonds, as provided in this Indenture, shall be
conclusive and binding on the parties to the Indenture, the
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Company, the Bank, the Remarketing Agent and the holders of Series 1997 Bonds.
(e) CHANGE IN RATE DETERMINATION METHOD-OPINIONS OF COUNSEL.
Notwithstanding any other provision of this Section 2.02, no change shall be
made in the method of determining the interest rate on the Series 1997 Bonds at
the direction of the Company pursuant to Section 2.02(b)(1) if the Trustee shall
receive written notice prior to the effective date of such change that the
Favorable Opinion of Tax Counsel required by Section 2.02(b)(1) or Section
2.02(b)(2)(ii) has been rescinded. If the Trustee shall have sent notice to the
holders of Series 1997 Bonds regarding such change under Section 2.02(c), the
Trustee shall promptly notify the holders of Series 1997 Bonds of such
rescission and the Series 1997 Bonds shall continue to bear interest in
accordance with the current method.
SECTION 2.03. EXECUTION AND AUTHENTICATION. The Bonds shall be signed on
behalf of the City by the manual or facsimile signature of its Mayor or Chief
Financial Officer and attested by the manual or facsimile signature of its City
Clerk, and the seal of the City shall be impressed or imprinted on the Bonds by
facsimile or otherwise. All authorized facsimile signatures shall have the same
effect as if manually signed. If an officer of the City whose signature is on a
Bond no longer holds that office at the time the Trustee authenticates the Bond,
the Bond shall nevertheless be valid. Also, if a person signing a Bond is the
proper officer on the actual date of execution, the Bond shall be valid even if
that person is not the proper officer on the nominal date of action.
A Bond shall not be valid or become obligatory for any purpose or be
entitled to any security or benefit under this Indenture until the Trustee
manually signs the certificate of authentication on such Bond. Such signature
shall be conclusive evidence that such Bond has been authenticated under this
Indenture.
SECTION 2.04. BOND REGISTER. Bonds must be presented at the principal
corporate trust office of the Trustee for registration of transfer, exchange and
payment. Bonds tendered by their Owners must be delivered as specified in the
Bonds. The Trustee shall keep a register of Bonds and of
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their transfer and exchange, which register shall be open to inspection by
the City and the Company during normal business hours.
Bonds may be transferred only on the register maintained by the Trustee.
Upon surrender for transfer of any Bond to the Trustee, duly endorsed for
transfer or accompanied by an assignment duly executed by the Owner or the
Owner's attorney duly authorized in writing, the City shall execute and the
Trustee shall authenticate and deliver a new Bond or Bonds in an equal aggregate
principal amount and registered in the name of the transferee.
Bonds may be exchanged for an equal aggregate principal amount of Bonds of
different authorized denominations. The City shall execute and the Trustee
shall authenticate and deliver the new Bond or Bonds that the Bondholder making
the exchange is entitled to receive, bearing numbers not then outstanding.
Except in connection with the purchase of Bonds tendered for purchase or
purchased in lieu of redemption, the Trustee shall not be required to transfer
or exchange any Bond called for redemption or during the period beginning 15
days before the mailing of a notice calling the Bonds or any portion of the
Bonds for redemption and ending on the redemption date. In the event the
Trustee transfers such Bonds, the new owner shall be given notice of the pending
redemption.
The Owner of a Bond shall be the absolute owner of such Bond for all
purposes, and all payments of principal, premium, if any, interest or purchase
price shall be made only to or upon the written order of such Owner or such
Owner's legal representative.
The Trustee shall require the payment by a Bondholder requesting exchange
or transfer of any tax or other governmental charge required to be paid in
respect of the exchange or transfer but will not impose any other charge.
If any Bond is mutilated, lost, stolen or destroyed, the City shall
execute and the Trustee shall authenticate and deliver a new Bond of the same
denomination if any mutilated Bond shall first be surrendered to the Trustee,
and if, in the case of any lost, stolen or destroyed Bond, there shall
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first be furnished to the City, the Trustee, the Bank and the Company
evidence of such loss, theft or destruction, together with an indemnity
satisfactory to them. If such Bond has matured, instead of issuing a
replacement Bond, the Trustee may with the consent of the Company pay such
Bond without requiring surrender of such Bond upon satisfaction of such
requirements as the Trustee deems fit for the protection of the City, the
Company and the Trustee, including a lost instrument bond. The City, the
Company and the Trustee may charge reasonable fees and expenses in this
connection.
If a Series 1997 Bond is called for redemption and the Company elects to
purchase such Bond in lieu of redemption as provided in Article III, or if the
Owner of a Series 1997 Bond gives irrevocable notice of tender to the
Remarketing Agent, and in either case if funds are deposited with the Trustee
sufficient for the purchase or purchase in lieu of redemption, upon request of
the Company or the Remarketing Agent, the City shall execute and the Trustee
shall authenticate a new Series 1997 Bond in the same denomination registered as
the Company or the Remarketing Agent may direct and deliver it to the Company or
its order, whether the Series 1997 Bond so purchased is ever delivered, but if
the funds are obtained by a drawing on the Letter of Credit, the Trustee must
comply with Section 3.08(a)(3). From and after the purchase date, interest on
the purchased Series 1997 Bond shall cease to be payable to the prior Owner
thereof; such Owner shall cease to be entitled to the benefits or security of
this Indenture and shall have recourse solely to the funds held by the Trustee
for the purchase of such Series 1997 Bond, and the Trustee shall not register
any further transfer of such Series 1997 Bond by such prior Owner.
SECTION 2.07. CANCELLATION OF BONDS. Whenever a Bond is delivered to the
Trustee for cancellation (upon payment, redemption or otherwise), or for
transfer, exchange or replacement pursuant to Section 2.05 or 2.06, the Trustee
shall promptly cancel and destroy such Bond and deliver a certificate of
destruction to the Company and the City.
SECTION 2.08. TEMPORARY BONDS. Until definitive Bonds are ready for
delivery, the City may execute and the Trustee shall authenticate and deliver
temporary Bonds substantially in the form of the definitive
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Bonds, with appropriate variations. The City shall, without unreasonable
delay, prepare and execute and the Trustee shall authenticate and deliver
definitive Bonds in exchange for the temporary Bonds. Such exchange shall be
made by the Trustee without charge.
SECTION 2.09. BOOK-ENTRY SYSTEM. The Series 1997 Bonds shall be
initially registered in the name of Cede & Co., as nominee for The Depository
Trust Company as the initial Securities Depository, and held in the custody
of the Securities Depository. A single certificate shall be issued and
delivered to the Securities Depository for the Series 1997 Bonds. The actual
purchasers of the Series 1997 Bonds (the "BENEFICIAL OWNERS") will not
receive physical delivery of Series 1997 Bond certificates except as provided
herein. So long as there exists a Securities Depository as provided herein,
all transfers of beneficial ownership interests in the Series 1997 Bonds
shall be made by book-entry only, and no person purchasing, selling or
otherwise transferring beneficial ownership interests in the Series 1997
Bonds will be permitted to receive, hold or deliver any Series 1997 Bond
certificate. The City, the Company and the Trustee shall treat the
Securities Depository or its nominee as the sole and exclusive Owner of
Series 1997 Bonds for all purposes, including payments of principal of,
premium, if any, and interest on the Bonds, notices and voting.
The City and the Trustee covenant and agree, so long as The Depository
Trust Company shall continue to serve as Securities Depository for the Series
1997 Bonds, to meet the requirements of The Depository Trust Company with
respect to required notices and other provisions of the Letter of
Representations executed by the City, the Trustee and the Remarketing Agent with
respect to the Series 1997 Bonds.
The City, the Trustee and the Remarketing Agent may conclusively rely upon
(i) a certificate of the Securities Depository as to the identity of the
Participants in the Book-Entry System with respect to the Series 1997 Bonds and
(ii) a certificate of any such Participant as to the identity of, and the
respective principal amount of Bonds beneficially owned by, the Beneficial
Owners.
Whenever Series 1997 Bonds remain Outstanding and the beneficial ownership
thereof must be determined by the books of the Securities
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Depository, the requirements in this Indenture for holding, delivering,
tendering or transferring Series 1997 Bonds shall be deemed modified to
require the appropriate person to meet the requirements of the Securities
Depository with respect to such actions to produce the same effect. Any
provision hereof permitting or requiring delivery of Series 1997 Bonds shall,
while the Series 1997 Bonds are in the Book-Entry System, be satisfied by
notation on the books of the Securities Depository in accordance with state
law.
The Trustee and the City, at the direction and expense of the Company and
with the consent of the Remarketing Agent, may from time to time appoint a
successor Securities Depository and enter into any agreement with such
Securities Depository to establish procedures with respect to the Series 1997
Bonds not inconsistent with the provisions of this Indenture. Any successor
Securities Depository shall be a "clearing agency" registered under Section 17A
of the Securities Exchange Act of 1934, as amended.
None of the City, the Company, the Trustee and the Remarketing Agent shall
have any responsibility or obligation to any Securities Depository, any
Participant in the Book-Entry System or the Beneficial Owners with respect to
(i) the accuracy of any records maintained by the Securities Depository or any
Participant; (ii) the payment by the Securities Depository or by any Participant
of any amount due to any Beneficial Owner in respect of the principal amount
(including premium) or redemption or purchase price of, or interest on, any
Series 1997 Bonds; (iii) the delivery of any notice by the Securities Depository
or any Participant; (iv) the selection of the Beneficial Owners to receive
payment in the event of any partial redemption of the Series 1997 Bonds; or (v)
any other action taken by the Securities Depository or any Participant in
connection with the Series 1997 Bonds.
Series 1997 Bond certificates shall be delivered to and registered in the
name of the Beneficial Owners only under the following circumstances:
(a) The Securities Depository determines to discontinue providing its
service with respect to the Series 1997 Bonds and no successor Securities
Depository is appointed as described above. Such a determination may be
made at any time by giving reasonable
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notice to the City or the Trustee and discharging its responsibilities with
respect thereto under applicable law.
(b) The Company determines not to continue the Book-Entry System
through any Securities Depository.
If at any time the Securities Depository ceases to hold the Series 1997 Bonds,
all references herein to the Securities Depository shall be of no further force
or effect.
A supplemental indenture authorizing Additional Bonds need not provide for
the same securities depository or any securities depository.
SECTION 2.10. ADDITIONAL BONDS. Additional Bonds may be issued under and
secured by this Indenture at one time or from time to time, in addition to the
Series 1997 Bonds and, subject to the conditions hereinafter provided in this
Section 2.10, for the purposes set forth in Section 4.5 of the Loan Agreement.
Such Additional Bonds shall be dated, shall be stated to mature on such date and
in such year or years, shall bear interest at such rate or rates, and may be
made redeemable at such times and prices, all as may be provided by the
supplemental indenture authorizing the issuance of such Additional Bonds.
Additional Bonds may be issued as taxable or tax exempt.
Such Additional Bonds shall be executed substantially in the form and
manner hereinabove set forth and shall be deposited with the Trustee for
authentication, but before such Additional Bonds shall be authenticated and
delivered by the Trustee, there shall be delivered to the Trustee the following:
(a) A written statement by the Company approving the terms,
conditions, manner of issuance, delivery and contemplated disposition of
the proceeds of the sale of such Additional Bonds and agreeing that the
amounts payable under Section 4.2 of the Loan Agreement shall be computed
so as to include such Additional Bonds.
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(b) Original executed counterparts of the amendment to the Loan
Agreement and the supplemental indenture.
(c) An Opinion of bond counsel to the effect that the Additional
Bonds have been validly issued under the supplemental indenture and that
all requirements under the supplemental indenture precedent to the delivery
of the Additional Bonds have been satisfied.
(d) A request and authorization to the Trustee on behalf of the City
and signed by an authorized officer to authenticate and deliver such
Additional Bonds to or as directed by the purchaser or purchasers therein
identified, registered in the names and in the denominations specified to
the Trustee by the purchaser or purchasers, upon payment to the Trustee,
but for the account of the City, of a sum specified in such request and
authorization plus accrued interest, if any, on such Additional Bonds to
the date of delivery. The proceeds of the sale of such Additional Bonds
shall be paid over to the Trustee and applied as provided in the
supplemental indenture authorizing their issuance.
Article III
REDEMPTION, PURCHASES IN LIEU OF REDEMPTION AND REMARKETING
SECTION 3.01. NOTICES TO TRUSTEE. If the Company elects to redeem any
Bonds pursuant to any optional redemption provision in the Bonds, the Company
shall notify the Trustee of the applicable provision, the redemption date, the
principal amount of Bonds to be redeemed, the redemption price and other
necessary particulars. The Company shall give such notice at least 45 days
before the redemption date.
SECTION 3.02. REDEMPTION DATES. The redemption date of the Bonds to be
redeemed pursuant to any optional redemption provision in the Bonds shall be a
date permitted by the Bonds and specified by the Company in the notice delivered
pursuant to Section 3.01. The redemption date for mandatory redemptions shall
be as specified in the Bonds or as determined by the Trustee consistently with
the provisions of the Bonds.
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SECTION 3.03. SELECTION OF BONDS TO BE REDEEMED. Except as otherwise
provided in the Bonds, and while a Book-Entry System is not in effect, if fewer
than all the Bonds of a series are to be redeemed, the Trustee shall select the
Bonds of that series to be redeemed by lot or other method it deems fair and
appropriate, except that the Trustee shall select, FIRST, any Bonds owned by the
Bank or any of its nominees or held by the Trustee for the account of the Bank
or any of its nominees and, SECOND, any Undelivered Bonds if the Company has
offered to purchase such Bonds in lieu of redemption. The Trustee shall make
its selection from Bonds not previously called for redemption. For this
purpose, the Trustee shall consider each Bond in a denomination larger than the
minimum denomination permitted by the Bonds at the time to be separate Bonds,
each in the minimum denomination. Provisions of this Indenture that apply to
Bonds called for redemption shall also apply to portions of Bonds called for
redemption. While a Book-Entry System is in effect, the procedures of the
Securities Depository shall control with respect to the selection of Bonds to be
redeemed.
SECTION 3.04. REDEMPTION NOTICES. (a) OFFICIAL NOTICE OF REDEMPTION. The
Trustee shall give notice of each redemption as provided in the Bonds and shall
at the same time give a copy of such notice to the Bank and the Remarketing
Agent, PROVIDED that no redemption notice shall be required with respect to a
redemption of Series 1997 Bonds under the paragraph captioned "MANDATORY
REDEMPTION ON EACH INTEREST PAYMENT DATE DURING COMMERCIAL PAPER MODE" in
Section 8 of the Bonds. The notice shall identify the Bonds to be redeemed and
shall state (1) the redemption date, (2) the redemption price, (3) that the
Bonds called for redemption must be surrendered to collect the redemption price,
(4) the address at which the Bonds must be surrendered and (5) that interest on
the Bonds called for redemption ceases to accrue on the redemption date. In
addition, if a Letter of Credit is expiring, the notice will state the
expiration date and that the expiration might result in reduction or withdrawal
of either of or both the Rating Agencies' ratings of the Bonds.
With respect to any redemption of the Series 1997 Bonds under the paragraph
captioned "OPTIONAL REDEMPTION DURING LONG-TERM INTEREST RATE PERIOD,"
"EXTRAORDINARY OPTIONAL REDEMPTION" or "OPTIONAL REDEMPTION DURING DAILY OR
WEEKLY RATE PERIOD" in Section 8 of the Series
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1997 Bonds, unless moneys sufficient to pay the principal of, and the
premium, if any, and interest on, the Series 1997 Bonds to be redeemed shall
have been received by the Trustee prior to the giving of such notice of
redemption, such notice may state that said redemption shall be conditional
upon the receipt of such moneys by the Trustee on or prior to the date fixed
for redemption. If such moneys are not received by the redemption date, such
notice shall be of no force and effect, the City shall not redeem such Series
1997 Bonds, the redemption price shall not be due and payable and the Trustee
shall give notice, in the same manner in which the notice of redemption was
given, that such moneys were not so received and that such Series 1997 Bonds
will not be redeemed.
The Trustee will give a notice of redemption under "MANDATORY REDEMPTION
UPON EXPIRATION OF LETTER OF CREDIT" or "MANDATORY REDEMPTION UPON DELIVERY OF
AN ALTERNATE LETTER OF CREDIT" in Section 8 of the Series 1997 Bonds under the
circumstances described in Section 5.01.
Failure to give any required notice of redemption as to any particular
Bonds shall not affect the validity of the call for redemption of any Bonds in
respect of which no such failure has occurred. Any notice mailed as provided in
the Bonds shall be conclusively presumed to have been given, whether or not
actually received by the addressee Owner.
(b) ADDITIONAL NOTICE OF REDEMPTION. In addition to the redemption notice
required in subsection (a) above, if the Book-Entry System is not then in effect
for the Bonds, a further notice (the "ADDITIONAL NOTICE") shall be given by the
Trustee as set out below. No defect in the Additional Notice nor any failure to
give all or any portion of the Additional Notice shall in any manner defeat the
effectiveness of a call for redemption if the notice required in subsection (a)
above is given.
(1) Each Additional Notice shall contain (i) the CUSIP numbers of all
Bonds being redeemed; (ii) the date of original issuance of the Bonds;
(iii) the interest rate determination method for, or the rate of interest
borne by, each Bond being redeemed; (iv) the Maturity Date of the Bonds;
and (v) any other descriptive information needed to identify accurately the
Bonds being redeemed.
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(2) Each check or other transfer of funds issued for payment of the
redemption price of the Bonds being redeemed shall bear the CUSIP number
identifying, by issue and maturity, the Bonds being redeemed with the
proceeds of such check or other transfer.
(3) Each Additional Notice shall be sent at least 35 days before the
redemption date by registered or certified mail or overnight delivery
service to all registered securities depositories then in the business of
holding substantial amounts of obligations similar to the Bonds (such
depositories now being The Depository Trust Company of New York, New York
and Philadelphia Depository Trust Company of Philadelphia, Pennsylvania)
and to one or more national information services that disseminate notices
of redemption of obligations such as the Bonds.
The information required in any redemption notice (including an Additional
Notice) pursuant to this Section 3.04 and the information required in any notice
pursuant to Section 2.02(c) may be combined in a single notice if the same shall
be sent to Bondholders in the manner and at the time specified in "NOTICE OF
REDEMPTION" in Section 8 of the Bonds.
SECTION 3.05. PAYMENT OF BONDS CALLED FOR REDEMPTION. Upon surrender to
the Trustee, Bonds called for redemption shall be paid or purchased in lieu of
redemption as provided in this Article III and the Bonds at the redemption price
stated in the notice, plus accrued interest, if any, to the redemption date, or
at a purchase price calculated as set forth in the Bonds, plus accrued interest,
if any, to the purchase date; PROVIDED, HOWEVER, that while a Book-Entry System
is in effect, the Bond held by the Securities Depository need not be surrendered
for a partial redemption.
SECTION 3.06. BONDS REDEEMED IN PART. Upon surrender of a Bond to be
redeemed or purchased in lieu of redemption in part, the City shall execute and
the Trustee shall authenticate and deliver to the Owner a new Bond or Bonds of
the same series and maturity in authorized denominations equal in aggregate
principal amount to the unredeemed or unpurchased portion of the Bond
surrendered.
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SECTION 3.07. PURCHASE OF SERIES 1997 BONDS IN LIEU OF REDEMPTION. When
Series 1997 Bonds are called for redemption pursuant to the paragraphs captioned
"MANDATORY REDEMPTION AT BEGINNING OF A NEW LONG-TERM INTEREST RATE PERIOD,"
"MANDATORY REDEMPTION UPON A CHANGE IN THE METHOD OF DETERMINING THE INTEREST
RATE ON THE BONDS," "MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT,"
"MANDATORY REDEMPTION UPON DELIVERY OF AN ALTERNATE LETTER OF CREDIT,"
"MANDATORY REDEMPTION ON DETERMINATION OF TAXABILITY," "MANDATORY REDEMPTION
DURING A LONG-TERM INTEREST RATE PERIOD UPON EXTENSION OF BOND MATURITY,"
"MANDATORY REDEMPTION AT THE DIRECTION OF THE BANK" or "MANDATORY REDEMPTION
UPON EXTENSION OF BOND MATURITY" in Section 8 of the Series 1997 Bonds, the
Company may purchase some of or all the Series 1997 Bonds (in authorized
denominations) called for redemption. Unless the Company and the Bank give
written instructions to the Trustee no later than two Business Days prior to the
redemption date that the Company is not exercising its option to purchase the
Series 1997 Bonds in lieu of redemption, the Company shall be deemed to have
exercised such option and on the proposed redemption date the Trustee shall
purchase in lieu of redemption Series 1997 Bonds called for redemption pursuant
to any of the foregoing paragraphs. The Trustee shall purchase Series 1997
Bonds pursuant to this Section 3.07 only as provided in Section 4.02. Series
1997 Bonds purchased in lieu of redemption shall not be redeemed and shall
remain outstanding hereunder.
SECTION 3.08. DISPOSITION OF PURCHASED SERIES 1997 BONDS. (a) SERIES 1997
BONDS TO BE REMARKETED. Series 1997 Bonds purchased pursuant to tenders as
provided in the Bonds or in lieu of redemption as provided in Section 3.07 shall
be offered for sale by the Remarketing Agent as provided in this Section 3.08,
except as follows:
(1) Series 1997 Bonds purchased pursuant to a tender after having
been called for redemption under a provision in the Series 1997 Bonds that
does not provide the Company an option to purchase in lieu of redemption
shall be canceled.
(2) Series 1997 Bonds which are tendered between the date notice of
any redemption is given and the redemption date may be remarketed before
the redemption date only if the buyer receives a copy of the redemption
notice from the Remarketing Agent.
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(3) Series 1997 Bonds purchased with funds obtained by a drawing on
the Letter of Credit will be held by the Trustee as pledgeholder for the
benefit of the Bank (or, if the Series 1997 Bonds are held in the Book-Entry
System, such Series 1997 Bonds shall be recorded in the books of the
Securities Depository for the account of the Trustee and shall be deemed
pledged to the Bank), all in accordance with the reimbursement agreement or
any pledge agreement under which the Letter of Credit is issued. The Bank's
security interest in such Series 1997 Bonds shall be released, and the
Trustee shall release such Series 1997 Bonds, only after the Trustee has
been notified in writing by the Bank that the Letter of Credit has been
reinstated by the amount of the funds drawn to purchase such Bonds (A) as
a result of reimbursement by the Company to the Bank or (B) because such
Series 1997 Bonds have been remarketed and the proceeds of such remarketing
have been received by the Securities Depository for the account of the
Trustee (for the benefit of the Bank). The Trustee shall promptly give
the Bank notice by facsimile transmission that the proceeds referred to in
clause (B) above have been credited to its account (for the benefit of
the Bank) by the Securities Depository. If such Series 1997 Bonds have been
released pursuant to clause (B) above, the Trustee shall instruct the
Securities Depository to transfer such Series 1997 Bonds on its records to
the account of the Remarketing Agent or its Participant. If such Series 1997
Bonds have been released pursuant to clause (A) above, the Trustee shall
instruct the Securities Depository to transfer any such Series 1997 Bonds
to the account of a Participant designated by the Company.
(4) Series 1997 Bonds shall not be offered for sale under this
Section 3.08 during the continuance of an Event of Default, but Series 1997
Bonds may be offered for sale under this Section 3.08 in the sole
discretion of the Remarketing Agent during the continuance of an event
which, with the giving of notice or lapse of time or both, would become an
Event of Default.
(b) REMARKETING EFFORT. Except to the extent the Company directs the
Remarketing Agent not to do so, the Remarketing Agent shall offer for sale and
use its best efforts to sell all Series 1997 Bonds to be sold as
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provided in subsection (a) of this Section and, when directed by the Company,
any Series 1997 Bonds held by or on behalf of the Bank or the Company. The
purchase price of each Series 1997 Bond must be equal to the principal amount
of such Series 1997 Bond plus accrued interest, if any, to the purchase date.
The Company may direct the Remarketing Agent from time to time to cease and
to resume sales efforts with respect to some or all of the Series 1997 Bonds.
The Remarketing Agent may buy as principal any Series 1997 Bonds to be
offered under this Section. The Remarketing Agent shall give telephonic or
telecopier notice, promptly confirmed in writing, to the Trustee specifying
the principal amount of the Series 1997 Bonds for which it has remarketing
proceeds (that meet the requirements of Section 4.02, clause FIRST) on hand
to purchase Series 1997 Bonds on any purchase date, as well as the principal
amount of the Series 1997 Bonds for which it does not have remarketing
proceeds on hand to purchase Series 1997 Bonds on such purchase date and the
amount of accrued interest, if any, due on such Series 1997 Bonds. When the
Series 1997 Bonds bear interest at a Daily Rate, such notice shall be given
at or prior to 12:30 p.m., New York City time, on the applicable purchase
date; at all other times, such notice shall be given at or prior to 10:00
a.m., New York City time, on the applicable purchase date. When the
Book-Entry System is not in effect, the Remarketing Agent shall also provide
the Trustee at the time of such notice with the names, addresses and taxpayer
identification numbers of the new Owners of the Series 1997 Bonds which have
been remarketed in order to enable the Trustee to comply with subsection (c)
of this Section. The Remarketing Agent shall deliver directly to the Trustee
an amount equal to the principal of and accrued interest, if any, on the
Series 1997 Bonds which the Remarketing Agent has advised the Trustee have
been remarketed and for which it has remarketing proceeds on hand for direct
deposit in the Purchase Fund as described in Section 4.02 no later than 12:00
noon, New York City time (1:00 p.m. when the Series 1997 Bonds bear interest
at a Daily Rate), on the applicable purchase date.
(c) DELIVERY OF REMARKETED SERIES 1997 BONDS. When the Book-Entry System
is not in effect, the Trustee shall deliver Series 1997 Bonds sold by the
Remarketing Agent under this Section to the Remarketing Agent (or, at the
direction of the Remarketing Agent, to the purchasers), registered in the manner
directed by the Remarketing Agent, against payment therefor in immediately
available funds.
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(d) REMARKETING AFTER EXTENSION OF MATURITY AND THE PURCHASE OF THE SERIES
1997 BONDS IN LIEU OF REDEMPTION. Upon the extension of the maturity of the
Series 1997 Bonds pursuant to Section 9 thereof, (1) Series 1997 Bonds may be
remarketed as taxable bonds and (2) Series 1997 Bonds may only be remarketed as
tax exempt if the City and the Trustee receive a Favorable Opinion of Tax
Counsel. Series 1997 Bonds purchased in lieu of redemption in connection with a
redemption pursuant to the paragraph entitled "MANDATORY REDEMPTION ON
DETERMINATION OF TAXABILITY" may be remarketed as taxable bonds.
ARTICLE IV
APPLICATION OF PROCEEDS AND PAYMENT OF SERIES 1997 BONDS
SECTION 4.01. APPLICATION OF PROCEEDS. (a) The City will cause the
proceeds of the initial sale of the Series 1997 Bonds to be deposited with the
Trustee as described below. The Trustee will hold those proceeds in trust for
the benefit of the Company and the Bondholders and will apply the proceeds in
accordance with this Section.
The Trustee will deposit $1,092,820 of the proceeds of the initial sale
of the Series 1997 Bonds into the "Costs of Issuance Fund" which is hereby
created with the Trustee, to pay a portion of the costs of issuing the Series
1997 Bonds, including, without limitation, the underwriting fee for the
initial sale of the Series 1997 Bonds, all printing expenses in connection
with the Indenture, the Loan Agreement, the Reimbursement Agreement, the
preliminary offering memorandum and offering memorandum for the Series 1997
Bonds; legal fees; Rating Agency fees; and the initial fees of the City and
the Trustee. The costs described above are payable upon submission of a
written request from a Company Representative stating that the amount
indicated thereon is justly due and owing, has not been the subject of
another written request which has been paid and is a proper cost of issuing
the Series 1997 Bonds. Any moneys remaining in the Costs of Issuance Fund on
the earlier of the payment of all costs of issuance of the Series 1997 Bonds
or April 1, 1998 shall be transferred to the Project Fund and applied as
described below.
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The Trustee will deposit all remaining proceeds from the initial sale of
the Series 1997 Bonds and any excess proceeds from the Costs of Issuance Fund
into the "Project Fund," which is hereby created with the Trustee. Moneys in
the Project Fund will be disbursed to pay the Project Costs and certain
Non-Qualified Costs, or to reimburse the Company for Project Costs or certain
Non-Qualified Costs paid by it, upon receipt of a requisition signed by a
Company Representative stating with respect to each disbursement to be made,
the following:
(1) that the costs of an aggregate amount set forth in such
requisition have been made or incurred or financed and were necessary for
the Project and were made or incurred in accordance with the construction
contracts, plans and specifications and building permits therefor then in
effect;
(2) that the amount paid or to be paid, as set forth in such
requisition, represents either (i) capitalized interest and is to be used
to pay interest on the Series 1997 Bonds or (ii) a part of the amount due
and payable for Project Costs and that such payment was not paid in advance
of the time, if any, fixed for payment and was made in accordance with the
terms of any contracts applicable thereto and in accordance with usual and
customary practice under existing conditions;
(3) that no part of the Project Costs was included within the costs
referred to in any requisition previously filed with the Trustee under the
provisions of this Indenture;
(4) that (i) the withdrawal of moneys from the Project Fund and the
use of the property financed or reimbursed therefrom has not and will not
result in a violation of any representation, term or covenant in the Tax
Agreement and (ii) any Opinion of Tax Counsel required to be delivered as a
result of changes to the Project pursuant to Section 3.2 of the Loan
Agreement has been delivered to the Trustee and the City;
(5) that the amount remaining in the Project Fund, together with (i)
moneys then on hand at the Company or committed to the
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Company which are or will be available, and are anticipated by the
Company to be applied, to pay the Project Costs and (ii) expected
investment earnings to be deposited into the Project Fund pursuant to
this Indenture, will, after payment of the amount requested in said
requisition, be sufficient to pay the costs of completing the Project
substantially in accordance with the construction contracts, plans and
specifications and building permits therefor, if any, then in effect; and
(6) that the amounts paid or to be paid as set forth in the
requisition are properly payable under the terms of this Indenture and that
all conditions precedent to payment as prescribed in this Indenture have
been satisfied.
The Company may direct the use of not to exceed $2,165,000 of Series 1997
Bond proceeds (including all earnings thereon) to pay, in the aggregate, (i)
certain working capital costs directly related to the Project and to pay
interest on the Series 1997 Bonds which does not constitute Project Costs as
defined below because such interest costs would not be Capitalizable Costs as
defined below; (ii) costs of issuance, and (iii) any fees related to the Letter
of Credit (the "NON-QUALIFIED COSTS"). With respect to any requisition from the
Project Fund or the Costs of Issuance Fund that requests payment or
reimbursement of Non-Qualified Costs, the Company shall additionally certify
that, taking into account such requisition of Non-Qualified Costs, the running
total of Non-Qualified Costs paid or reimbursed from Series 1997 Bond proceeds
does not exceed the lesser of $2,165,000 or 4% of the sum of (i) amount of
Series 1997 Bond proceeds paid or reimbursed pursuant to all previous
requisitions and (ii) the amount of Series 1997 Bond proceeds requested to be
paid or reimbursed pursuant to the requisition to which such certification
relates.
The Company shall attach to each requisition a list of invoices or bills of
sale covering all items for which payment is being requested in such requisition
issued by the manufacturers, suppliers or other sellers of such items. The
invoices or bills shall be available for review by the Trustee in the offices of
the Company; PROVIDED that the Trustee shall have no duty or obligation to
review such invoices and may conclusively rely on such requisitions.
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To the extent that the Company leases from third parties or otherwise
provides items for the Project from sources other than funds on deposit in the
Project Fund, the costs thereof shall not be included in the Project Costs
referred to above.
The Trustee will maintain adequate records pertaining to the proceeds of
the Bonds held by it and all disbursement from them made by the Trustee.
"PROJECT COSTS" means all costs that would be properly chargeable to the
acquisition, construction, installation or equipping of the Project or to its
financing if the City were a corporation subject to federal income taxation
("CAPITALIZABLE COSTS"), including, without limitation, the following:
(A) The cost of construction and acquisition of all lands,
structures, real or personal property, rights, rights-of-way, franchises,
easements and interests acquired or used for the Project and infrastructure
improvements located on the Project Site or on land owned by the City and
related to the Project.
(B) The cost of demolishing or removing any buildings or structures
on land so acquired, including the cost of acquiring any lands to which
such buildings or structures may be moved.
(C) The cost of all machinery and equipment.
(D) Interest during construction of the Project.
(E) Reserves for extensions, enlargements, additions, replacements,
renovations and improvements.
(F) The cost of architectural, engineering, financial and legal
services, plans, specifications, studies, surveys, estimates,
administrative expenses and other expenses necessary or incident to
determining the feasibility of constructing the Project or incident to its
construction, acquisition or financing.
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(b) COMPLETION DATE. The Company shall deliver to the City, the Trustee
and the Bank upon completion of the Project a certificate as described below
(the "COMPLETION CERTIFICATE") signed by a Company Representative stating the
following:
1. All portions of the Project have been fully completed in
accordance with the plans and specifications therefor, as then amended, and
the date of completion.
2. Such persons have made such investigation of such sources of
information as are deemed by such persons to be necessary, including
pertinent records of the Company, and are of the opinion that the Project
has been fully paid for and no claim or claims exist against the Company or
against the properties of the Company or, to the best of such persons'
knowledge, against the City or against the properties of the City, out of
which a lien based on furnishing labor or material for the Project exists
or might ripen; PROVIDED, HOWEVER, there may be excepted from the foregoing
statement any claim or claims out of which a lien exists or might ripen in
the event that the Company intends to contest such claim or claims, in
which event such claim or claims shall be described; PROVIDED, FURTHER,
HOWEVER, that in such event such certificate shall state that funds are on
deposit in the Project Fund which, together with (i) moneys then on hand at
the Company or committed to the Company which are or will be available, and
are anticipated by the Company to be applied, to pay the Project Costs, and
(ii) expected investment earnings to be deposited into the Project Fund
pursuant to this Indenture, are sufficient to make payment of the full
amount which might in any event be payable in order to satisfy such claim
or claims. In the event such certificate shall state that there is a claim
or claims in controversy which create or might ripen into a lien, there
shall be filed with the City and the Trustee a certificate of the Company
Representative stating that such claim or claims have been paid when the
same has in fact occurred.
3. The withdrawal of moneys from the Project Fund and the use of the
property financed or reimbursed therefrom has not and will
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not result in a violation of any representation, term or covenant in the Tax
Agreement.
4. All Opinions of Tax Counsel required to be delivered as a result
of changes made pursuant to Section 3.2 of the Loan Agreement have been
delivered to the Trustee and the City.
(c) DISPOSITION OF PROJECT FUND MONEYS AFTER PROJECT IS IN SERVICE OR UPON
DETERMINATION NOT TO COMPLETE THE PROJECT. Any moneys ("EXCESS FUNDS")
(including investment proceeds) remaining in the Project Fund on the earlier of
the following dates (the "REMEDIAL ACTION DATE") (i) the date on which the
Company determines that the Project will not be completed; or (ii) the date on
which the entire Project is placed in service (I.E., the date the Project is
operating at substantially the level for which it is designed), shall be used at
the direction of the Company Representative in accordance with Treasury
Regulation 1.142-2 (the "PLACED IN SERVICE DATE") for one or more of the
following purposes:
(1) for the payment, in accordance with the provisions of this
Indenture, of any Project Costs not theretofore paid;
(2) for the payment of costs of any additional improvements to be
installed or constructed on the Project Site upon compliance with Section
3.2 of the Loan Agreement;
(3) to pay principal or interest on the Bonds when due; or
(4) (a) to pay, on or before 90 days following the Remedial Action
Date, all or part of the price of purchasing a portion of the Series 1997
Bonds on tender, in the open market or at private sale, at a purchase price
not in excess of 100 percent of the principal amount of such Series 1997
Bonds plus accrued interest to the date of such purchase for the purpose of
cancellation;
(b) if the Series 1997 Bonds are callable within 90 days
following the Remedial Action Date, to pay, on or before
90 days following the Remedial Action Date, all or part
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of the redemption price of a portion of the Series 1997 Bonds; or
(c) if the Series 1997 Bonds are not callable within 90 days
following the Remedial Action Date, for transfer into an escrow account
established with the Trustee, upon filing required notice to the Internal
Revenue Service, such transfer and notice to be on or before 90 days
following the Remedial Action Date, to be used to pay, on the first date on
which Series 1997 Bonds may be redeemed, but in any event within ten and
one-half years from the date of issuance of the Series 1997 Bonds, all or
part of the redemption price of a portion of the Series 1997 Bonds;
PROVIDED, that, except for the purpose described in subparagraph (1) above, no
money, including earnings on the investment on such moneys, may be so used
unless and until the Trustee has been furnished with a Favorable Opinion of Tax
Counsel; PROVIDED FURTHER that the earnings on the investment of the moneys on
deposit in such escrow account described in subparagraph (4)(c) above shall be
used to pay interest on the Series 1997 Bonds coming due on each interest
payment date on the Series 1997 Bonds (or to reimburse the Bank for draws under
the Letter of Credit to pay interest on the Series 1997 Bonds); and PROVIDED
FURTHER that, until used for the foregoing purpose described in subparagraph
(4)(c) above, moneys on deposit in such escrow account may be invested in
investments authorized by Section 4.03 hereof, but may not be invested to
produce a yield on such moneys (computed from the Placed in Service Date and
taking into account any investment of such moneys during the period from the
Placed in Service Date until such moneys were deposited in such escrow account)
greater than the yield on the Series 1997 Bonds from which such proceeds were
derived, all as such terms are used in and determined in accordance with the
Code and regulations promulgated thereunder.
(d) INVESTMENT OF PROJECT FUND MONEYS. Moneys on deposit in the Project
Fund may be invested only in accordance with the provisions of Sections 5.4 and
5.5 of the Loan Agreement and Section 4.03 hereof, and income resulting
therefrom shall be credited to the Project Fund or the Rebate Fund as provided
in the Tax Agreement.
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(e) EVENT OF DEFAULT. If an Event of Default occurs and the maturity of
the Series 1997 Bonds is accelerated, the Trustee will to the extent necessary
use moneys in the Project Fund to reimburse the Bank for draws under the Letter
of Credit to make payments on the Series 1997 Bonds, regardless of the other
provisions of this Section.
SECTION 4.02. PAYMENTS OF SERIES 1997 BONDS. When a Letter of Credit is
in effect, the Trustee will make payments of principal and purchase price
(whether pursuant to tenders or purchase in lieu redemption) of, and interest
on, the Series 1997 Bonds FIRST (for payment of purchase price of Series 1997
Bonds only), from the proceeds of the sale of Series 1997 Bonds under Section
3.08, except proceeds from Series 1997 Bonds sold by the Remarketing Agent to
the City or the Company or any "insider" of either of the foregoing (as defined
in the Bankruptcy Law); SECOND, from moneys drawn under the Letter of Credit;
THIRD, from any other moneys or securities if there is delivered to the Trustee
an Opinion of Counsel experienced in bankruptcy matters (which may assume that
no Owner is an "insider" as defined in the Bankruptcy Law) to the effect that
the use of such moneys or securities to pay the principal or purchase price of,
premium, if any, or interest on the Series 1997 Bonds would not be avoidable as
preferential payments under Section 547 of the Bankruptcy Law recoverable under
Section 550 of the Bankruptcy Law should the City or the Company become a debtor
in any proceeding commenced thereunder, which opinion shall also be addressed to
and acceptable to any Rating Agency then rating the Series 1997 Bonds; and LAST
from any other moneys available to the Trustee. All moneys referred to in
clause FIRST of such sentence shall be held in a separate and segregated account
by the Trustee in the Purchase Fund, which is hereby created with the Trustee.
However, payments of principal and interest on Series 1997 Bonds held by the
Company or by the Trustee for the account of the Company will be paid only from
the FIRST and LAST categories of moneys. The proceeds of investments of any
moneys in any of these categories may be used to the same extent as if the
moneys invested could be used had they not been invested. Funds in each
category will be held in a separate and segregated account and will not be
commingled with funds from the other categories or from any other source. In
addition to the funds and accounts established in this Article IV, the Trustee
may establish such funds and accounts as it
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deems necessary and appropriate in order to discharge its duties under this
Indenture.
"BANKRUPTCY FILING" means the filing of a petition by or against the City
or the Company under any bankruptcy act or similar act. If the petition has
been dismissed and the dismissal is final and not subject to appeal at the
relevant time, the filing will not be considered to have occurred.
When a Letter of Credit is not in effect, the Trustee will make payments
of principal of and interest on the Series 1997 Bonds and the purchase price
of Series 1997 Bonds FIRST from the proceeds of the initial sale of the
Series 1997 Bonds to the extent such proceeds are available for the purpose,
SECOND (for payment of purchase price of Series 1997 Bonds only) from the
proceeds of the sale of Series 1997 Bonds under Section 3.08, and THIRD from
other moneys available to the Trustee for the purpose. The proceeds of
investments of any moneys in any of these categories may be used to the same
extent as if the moneys invested could be used had they not be invested. All
moneys referred to in clauses FIRST and SECOND above shall each be held
segregated by the Trustee.
The Remarketing Agent will pay to the Trustee upon receipt the proceeds
of sales of Series 1997 Bonds under Section 3.08. The Trustee shall make
payments of the principal of, and premium, if any, and interest on, the
Series 1997 Bonds only from moneys available to the Trustee under this
Indenture for that purpose. If the Remarketing Agent has been removed or has
resigned and no successor Remarketing Agent has been appointed, the Trustee
will pay the purchase price of tendered Series 1997 Bonds with any moneys
available to it under this Indenture for such purpose.
SECTION 4.03. INVESTMENTS OF MONEYS. Except as provided below, the
Trustee shall invest and reinvest moneys held by the Trustee as directed by
the Company Representative in any investment permitted by law and the Tax
Agreement. In the absence of any other direction, the Company Representative
has directed that such moneys be invested in a money market fund selected by
the Trustee with a rating of "Am" or "Am-g" or better by a Rating Agency.
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Notwithstanding anything in this Indenture to the contrary, moneys held by
the Trustee which are proceeds of a drawing under the Letter of Credit shall not
be invested.
The Trustee may make investments permitted by this Article IV through its
own bond department or the bond department of any bank or trust company under
common control with the Trustee. Investments shall be made so as to mature or
be subject to redemption at the option of the holder on or before the date or
dates on which the Trustee anticipates that moneys from the investments will be
required. Investments shall be registered in the name of the Trustee and held
by or under the control of the Trustee. The Trustee shall sell and reduce to
cash a sufficient amount of investments whenever the cash held by the Trustee is
insufficient. The Trustee shall not be liable for any loss from such
investments to the extent directed by the Company Representative and to the
extent such directions have been complied with by the Trustee.
SECTION 4.04. MONEYS HELD IN TRUST. The Trustee shall hold in trust for
the benefit of the Bondholders all moneys held by it for any payment on the
Bonds. Moneys in the Costs of Issuance Fund and the Project Fund shall be held
by the Trustee for the benefit of the owners and holders of the Bonds and
invested in accordance with Section 4.03 until disbursed as described in Section
4.01. Money received by the Remarketing Agent or the Trustee from the sale of
any Series 1997 Bond under Section 3.08 or for the purchase of any Series 1997
Bond shall be held segregated from other funds of the Remarketing Agent or the
Trustee in trust for the benefit of the Series 1997 Bondholder from whom such
Series 1997 Bond was purchased or the person delivering such purchase money, as
the case may be, and shall not be invested. The Trustee shall promptly, but in
no event later than 30 days after their original deposit, apply moneys received
from the Company in accordance with this Indenture and the Tax Agreement as
directed by the Company Representative.
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ARTICLE V
LETTER OF CREDIT
SECTION 5.01. REQUIREMENTS FOR LETTER OF CREDIT. (a) The initial letter
of credit will be an irrevocable letter of credit of a commercial bank
providing for direct payments to or upon the order of the Trustee of amounts
up to (1) the principal of the Series 1997 Bonds when due, at maturity or
upon acceleration, redemption, purchase pursuant to a tender or in lieu of
redemption or otherwise; (2) interest on the Series 1997 Bonds for a period
of 45 days at the rate of 12 percent per annum or such lower maximum interest
rate as may be specified in the Letter of Credit; PROVIDED, HOWEVER that (A)
if the Letter of Credit will be in effect during a Commercial Paper Mode, the
stated coverage amount of the Letter of Credit will include an amount equal
to interest on the Series 1997 Bonds for a period of 375 days (or such other
number of days as may be required by any Rating Agency then rating the Series
1997 Bonds) at a stated maximum interest rate; and (B) if the Letter of
Credit will be in effect during a Long-Term Interest Rate Period, the stated
coverage amount of the Letter of Credit will include interest on the Series
1997 Bonds for a period of 210 days (or such other number of days as may be
required by any Rating Agency then rating the Series 1997 Bonds) at the
Long-Term Interest Rate plus an amount equal to the premium required for
redemption described under the paragraphs captioned "MANDATORY REDEMPTION
UPON EXPIRATION OF LETTER OF CREDIT," "MANDATORY REDEMPTION UPON DELIVERY OF
AN ALTERNATE LETTER OF CREDIT," "MANDATORY REDEMPTION AT BEGINNING OF A NEW
LONG-TERM INTEREST RATE PERIOD" and "MANDATORY REDEMPTION UPON A CHANGE IN
THE METHOD OF DETERMINING THE INTEREST RATE ON THE BONDS" and "MANDATORY
REDEMPTION DURING A LONG-TERM INTEREST RATE PERIOD UPON EXTENSION OF BOND
MATURITY" in Section 8 of the Series 1997 Bonds. The Letter of Credit will
expire (A) at its stated expiration date, which will be no earlier than 20
days after an Interest Payment Date that (except for the initial Letter of
Credit) is one year from its date of issuance, and if a Long-Term Interest
Rate Period will be in effect, its stated expiration date will be no earlier
than the first date on which the Series 1997 Bonds are subject to redemption
as described under the paragraph "OPTIONAL REDEMPTION DURING LONG-TERM
INTEREST RATE PERIOD" in Section 8 of the Series 1997 Bonds, (B) receipt by
the Bank of Trustee certificates to the effect that all Bonds
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have been paid or that an Alternate Letter of Credit has been delivered to
and accepted by the Trustee; or (C) 25 days after the Trustee has received
the Bank's written notice that an Event of Default has occurred under the
Reimbursement Agreement pursuant to which the Letter of Credit was issued and
requesting that the principal of all Bonds and accrued interest thereon be
declared due and payable or be called for redemption.
At least 45 days (or such shorter period as shall be acceptable to the
Trustee, but not less than 30 days) prior to the Interest Payment Date next
preceding the Expiration Date of the current Letter of Credit, the Company may
provide for the delivery to the Trustee of an amendment to the Letter of Credit
which extends the Expiration Date to a date that is not earlier than one year
from its then current Expiration Date. If the Letter of Credit is so extended,
the mandatory redemption described under the paragraph "MANDATORY REDEMPTION
UPON EXPIRATION OF LETTER OF CREDIT" in Section 8 of the Series 1997 Bonds shall
not occur. Unless all of the conditions of this paragraph which are required to
be met 45 days (or such shorter period as shall be acceptable to the Trustee,
but not less than 30 days) preceding the Interest Payment Date next preceding
the Expiration Date of the Letter of Credit have been satisfied, the Trustee
shall take all action necessary to call the Series 1997 Bonds for mandatory
redemption described under the paragraph "MANDATORY REDEMPTION UPON EXPIRATION
OF LETTER OF CREDIT" in Section 8 of the Series 1997 Bonds on the Interest
Payment Date next preceding such Expiration Date; PROVIDED that if the Company
shall have notified the Trustee in writing that it expects to meet all the
conditions for the delivery of an amendment extending the existing Letter of
Credit on or before the Interest Payment Date next preceding the Expiration Date
of the existing Letter of Credit, then the notice of such mandatory redemption
shall state that it is subject to rescission, and the Trustee shall rescind such
notice, if such conditions are so met (in which case such mandatory redemption
shall not occur).
(b) ALTERNATE LETTER OF CREDIT. The Company may elect to replace any
Letter of Credit with a new Letter of Credit conforming to the requirements of
Section 5.01(a).
In addition, if the method of determining interest on the Series 1997 Bonds
is a Daily, Weekly or Commercial Paper Rate, the Company may
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elect to terminate the existing Letter of Credit (or elect not to replace an
expiring Letter of Credit) by delivering to the Trustee at least 30 days
before the end of the last full Interest Period before the termination or
expiration of the Letter of Credit, a letter from each Rating Agency then
rating the Series 1997 Bonds that the Series 1997 Bonds will be rated at
least "A-1" or "P-1" (or its equivalent) after the termination or expiration
of the Letter of Credit. If such election is made, the Series 1997 Bonds
will be called for redemption as described under the caption "MANDATORY
REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT" in Section 8 of the Series
1997 Bonds.
Notwithstanding anything to the contrary contained herein, (1) unless the
requirements of the preceding paragraph are met, while the Series 1997 Bonds
bear interest at a Daily, Weekly or Commercial Paper Rate, they shall be
secured by a Letter of Credit, and (2) if the Series 1997 Bonds bear interest
at a Long-Term Interest Rate, they shall not be secured or supported by a
Letter of Credit or any other type of credit enhancement unless, immediately
prior to the effective date of any change in the method of determining the
interest rate on the Series 1997 Bonds from a Daily, Weekly or Commercial
Paper Rate, the Remarketing Agent makes an objective determination in a
certificate delivered to the Trustee that the present value of the cost of
securing the Series 1997 Bonds with the Letter of Credit or any other type of
credit enhancement (including the cost of paying interest on the Series 1997
Bonds at the expected interest rate and all fees associated with the Letter
of Credit or any other type of credit enhancement) would be less than the
cost of paying interest on the Series 1997 Bonds if it is not so secured
(using as a discount rate the yield to maturity on the Series 1997 Bonds
being converted to a Long-Term Interest Rate and treating the fees paid and
to be paid for the credit enhancement as interest on the Series 1997 Bonds).
The Remarketing Agent is required in the event of a change from a Daily,
Weekly or Commercial Paper Rate to a Long-Term Interest Rate to perform such
analysis and, if present value savings would result under the above formula,
must obtain the form of credit enhancement generating the greatest present
value savings under the above formula. The provisions of this paragraph
shall not apply if (i) the Series 1997 Bonds bore interest at a Long-Term
Interest Rate on the day before the effective date of the change or (ii) a
Favorable Opinion of Tax Counsel stating that this paragraph need not be
applied to such change is delivered to the Trustee. In addition, if a
Long-Term Interest Rate will be in
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effect during the term of the current Letter of Credit, the Company may not
furnish an alternate Letter of Credit with a stated expiration date earlier
than the stated expiration date in the Letter of Credit then in effect.
Upon delivery to the Trustee of an Alternate Letter of Credit conforming to
the requirements of this Section 5.01 and delivery of the opinions described in
Section 5.01(c), then the Trustee shall accept such Alternate Letter of Credit
and promptly surrender for cancellation the previously held Letter of Credit to
the issuer thereof in accordance with the terms of such Letter of Credit;
PROVIDED that no delivery of such Alternate Letter of Credit shall be effective
unless the Company has given written notice to the Trustee (a copy of which
shall be delivered to the Bank providing the current Letter of Credit) not less
than 45 days prior to such delivery of the Company's intention to provide for
delivery of such Alternate Letter of Credit and the anticipated date of such
delivery. Upon receipt of such notice, the Trustee shall take all actions
necessary to call the Series 1997 Bonds for mandatory redemption as described
under the paragraph "MANDATORY REDEMPTION UPON DELIVERY OF AN ALTERNATE LETTER
OF CREDIT" in Section 8 of the Series 1997 Bonds on the Interest Payment Date
next preceding the proposed effective date of such Alternate Letter of Credit;
PROVIDED that the notice of such mandatory redemption shall state that it is
subject to rescission, and the Trustee shall rescind such notice (unless the
Series 1997 Bonds are then subject to mandatory redemption as described under
the paragraph "MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT") if all
of the requirements of this Section 5.01(b) are not met on or before the
Interest Payment Date on which the Series 1997 Bonds are subject to mandatory
redemption as described under the paragraph "MANDATORY REDEMPTION UPON DELIVERY
OF AN ALTERNATE LETTER OF CREDIT" (in which case such mandatory redemption shall
not occur). Nothing in this Section 5.01(b) shall be construed to modify the
provisions relating to the redemption as described under the paragraph
"MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT" or Section 5.01(a).
(c) OPINIONS OF COUNSEL. Any Alternate Letter of Credit or other credit
facility delivered to the Trustee must be accompanied by (1) a Favorable Opinion
of Tax Counsel as to the delivery of the Alternate Letter of Credit or other
facility; (2) an Opinion of Counsel stating that delivery of the Alternate
Letter of Credit or other facility is authorized under this
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Indenture and complies with its terms; (3) an opinion of counsel to the
issuer or provider of such Alternate Letter of Credit or other facility
stating that such Alternate Letter of Credit or other facility is a legal,
valid, binding and enforceable obligation of such issuer or obligor in
accordance with its terms; (4) an Opinion of Counsel that payments made by
the Bank of amounts drawn under the Alternate Letter of Credit will not be
recoverable from the Bondholders as voidable preferences under the provisions
of the U.S. Bankruptcy Code in the event of a bankruptcy or similar
insolvency proceeding with respect to the Company or the City; and (5)
evidence satisfactory to the Trustee that the unsecured indebtedness of the
new Bank (or parent company of the new Bank) is rated by a Rating Agency at
"A-1/P-1", or, if a Favorable Opinion of Tax Counsel is delivered with
respect to a different rating, some other rating. In addition, if the
Company or any natural person, firm, association or public body related to
the Company within the meaning of Section 147(a) of the Code grants a
security interest in any cash, securities or investment type property to the
issuer or provider of such Letter of Credit or other facility, the Company
must furnish the Trustee a Favorable Opinion of Tax Counsel with respect to
such grant.
SECTION 5.02. DRAWS. Whenever any amount is payable on the Series 1997
Bonds or for their purchase as provided in this Indenture or the Series 1997
Bonds, the Trustee will draw on the Letter of Credit to the extent necessary to
make such full and timely payment of principal and interest when due, whether on
an Interest Payment Date, at maturity, upon redemption, acceleration or
otherwise, in accordance with this Indenture, the Series 1997 Bonds and the
Letter of Credit, except that the Trustee may not draw on the Letter of Credit
to pay Series 1997 Bonds held by the Trustee for the benefit of the Bank in
accordance with Section 3.08(a)(3). In drawing on the Letter of Credit, the
Trustee will be acting on behalf of the Bondholders by facilitating payment of
their Series 1997 Bonds and not on behalf of the City or Company and will not be
subject to the control of either.
Upon receiving notice of a tender, or upon the date Series 1997 Bonds are
to be purchased by the Company in lieu of redemption, the Trustee promptly shall
draw on the Letter of Credit, in accordance with its terms, on the date fixed
for any such purchase, an amount to the end that
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immediately available funds in Chicago, Illinois will be provided on such
date from such draw to pay the purchase price. No such drawing need be made
to the extent that the Trustee has received telephone notice from the
Remarketing Agent, promptly confirmed in writing, that such Series 1997 Bonds
have been remarketed and the remarketing proceeds (that meet the requirements
of Section 4.02, clause FIRST) on hand are sufficient to pay the purchase
price of such Series 1997 Bonds.
ARTICLE VI
COVENANTS
SECTION 6.01. PAYMENT OF BONDS. The City shall promptly pay the principal
of, and the premium, if any, and interest on, the Bonds on the dates and in the
manner provided in the Bonds, but only from the amounts assigned to and held by
the Trustee under this Indenture.
SECTION 6.02. FURTHER ASSURANCES. The City shall execute and deliver such
supplemental indentures and such further instruments, and do such further acts,
as the Trustee may reasonably require for the better assuring, assigning and
confirming to the Trustee the amounts assigned under this Indenture for the
payment of the Bonds.
SECTION 6.03. REBATE FUND. (a) The Trustee shall establish and maintain a
fund separate from any other fund established and maintained under this
Indenture designated as the "Rebate Fund." Within the Rebate Fund, the Trustee
shall maintain such accounts as shall be necessary in order to comply with the
terms and requirements of the Tax Agreement. Subject to the transfer provisions
provided in paragraph (e) below, all money at any time deposited in the Rebate
Fund shall be held by the Trustee in trust, to the extent required pursuant to
the Tax Agreement, for payment to the federal government of the United States of
America, and neither the City, the Company, the Bank nor the owner of any Bonds
shall have any rights or claim to such money. All amounts deposited into or on
deposit in the Rebate Fund shall be governed by this Section, by Section 6.04
and by the Tax Agreement.
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(b) Upon the Company's written direction, an amount shall be deposited to
the Rebate Fund by the Trustee from deposits by the Company or from available
investment earnings on amounts held under this Indenture and available for this
purpose, if and to the extent required, so that the balance of the amount on
deposit thereto shall be equal to the amount required by the Tax Agreement.
Computations of the amount required to be deposited into the Rebate Fund shall
be furnished by or on behalf of the Company in accordance with the Tax
Agreement.
(c) The Trustee shall have no obligation to rebate any amounts required to
be rebated pursuant to this Section, other than from moneys held in the funds
and accounts created under this Indenture or from other moneys provided to it by
the Company.
(d) The Trustee shall invest all amounts held in the Rebate Fund as set
forth in the Tax Agreement. Money shall not be transferred from the Rebate Fund
except as provided in paragraph (e) below.
(e) Upon receipt of the Company's written directions, the Trustee shall
remit part or all of the balances in the Rebate Fund to the United States, as so
directed. In addition, if the Company so directs, the Trustee will deposit
moneys into or transfer moneys out of the Rebate Fund from or into such accounts
or funds as directed by the Company's written directions. Any funds remaining
in the Rebate Fund after payment of all of the Bonds and payment and
satisfaction of any amount required to be paid pursuant to the Tax Agreement, or
provision made therefor satisfactory to the Trustee, shall be withdrawn and
remitted to the Company.
(f) Notwithstanding any other provision of this Indenture, including in
particular Article VII, the obligation to remit the amounts required to be paid
pursuant to the Tax Agreement to the United States and to comply with all other
requirements of this Section and Section 6.04 and the Tax Agreement shall
survive the discharge of the lien of this Indenture or payment in full of the
Bonds.
SECTION 6.04. TAX COVENANTS. The City shall not knowingly take or omit to
take any action within its control, to the extent permitted by law,
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that would cause the Series 1997 Bonds to be "arbitrage bonds" within the
meaning of Section 148(a) of the Code.
As long as Series 1997 Bonds are outstanding, the City hereby covenants for
the benefit of the Beneficial Owners that it will, solely at the Company's
expense, (a) take any action which, in the opinion delivered to City and Company
of nationally recognized bond counsel acceptable to the City and the Company, is
necessary to preserve the exclusion of interest on the Series 1997 Bonds from
federal gross income and (b) refrain from taking any action which, in the
opinion delivered to City and Company of nationally recognized bond counsel
acceptable to the City and the Company, would adversely affect the exclusion of
interest on the Series 1997 Bonds from federal gross income.
Notwithstanding any provision of this Section, if the Company provides to
the Trustee and the City an Opinion of Tax Counsel to the effect that any action
required under this Section is no longer required, or to the effect that some
further action is required, to maintain the exclusion of interest on the Series
1997 Bonds from federal gross income, the Trustee and the City may conclusively
rely on such opinion in complying with the provisions of this Section, and the
covenants under this Section shall be deemed to be modified to that extent.
ARTICLE VII
DISCHARGE OF INDENTURE
Any Bond shall be deemed paid for all purposes of this Indenture when
(a) payment of the principal of and premium, if any, and interest on such Bond
to the due date of such principal and interest (whether at maturity, upon
redemption or otherwise) either (1) has been made in accordance with the terms
of the Bonds or (2) has been provided for by irrevocably depositing with the
Trustee (A) moneys sufficient to make such payment (PROVIDED that with respect
to Series 1997 Bonds while a Letter of Credit is in effect, such moneys shall
have been derived from the proceeds of a draw under such Letter of Credit)
and/or (B) U.S. Government Obligations (PROVIDED that with respect to the Series
1997 Bonds while a Letter of Credit is in effect, they have been purchased with
moneys derived from the
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proceeds of a draw under such Letter of Credit) maturing as to principal and
interest in such amounts and at such times as will assure the availability of
sufficient moneys to make such payment (PROVIDED that with respect to Series
1997 Bonds, such deposit under this clause (2) is made during a Commercial
Paper Rate Period or a Long-Term Interest Rate Period), and (b) all
compensation and reasonable expenses of the Trustee pertaining to such Bond
have been paid or provided for to the Trustee's satisfaction. When a Bond is
deemed paid, it will no longer be secured by or entitled to the benefits of
this Indenture, except for payment from moneys or U.S. Government Obligations
under clause (a)(2) above and except that it may be tendered as provided in
the Bonds and transferred, exchanged or replaced as provided in Article II.
"U.S. GOVERNMENT OBLIGATIONS" means (i) noncallable direct obligations of
the United States of America for which its full faith and credit are pledged,
(ii) noncallable obligations of a person controlled or supervised by and acting
as an agency or instrumentality of the United States of America, the payment of
which is unconditionally guaranteed as a full faith and credit obligation of the
United States of America, or (iii) securities or receipts evidencing ownership
interests in obligations or specified portions (such as principal or interest)
of obligations described in clause (i) or (ii).
Notwithstanding the first paragraph of this Section 7.01, in the case of
any Bond which by its terms may be redeemed prior to the Maturity Date, no
deposit under clause (a)(2) thereof shall be deemed a payment of such Bond until
the Company has furnished the Trustee (a) an Opinion of Tax Counsel stating that
such deposit will not cause the Bonds to become "arbitrage bonds" under Section
148 of the Code and (b) irrevocable instructions in form satisfactory to the
Trustee:
(i) stating the date when the principal (and premium, if any) of such
Bond is to be paid, whether at maturity or on a redemption date;
(ii) if such Bond is to be redeemed pursuant to this Indenture, to
call such Bond for redemption; and
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(iii) to mail, as soon as practicable, in the manner prescribed by
Article III, a notice to the Owner of such Bond that the deposit required
by clause (a)(2) of the first paragraph of this Section has been made with
the Trustee and that such Bond is deemed to have been paid in accordance
with this Section and stating the maturity or redemption date upon which
moneys are to be available for the payment of such Bond or of its
redemption price.
In addition, if the Bonds are to be rated by either Rating Agency on and after
the date of such deposit, the Company shall furnish to the Trustee a letter from
all such Rating Agencies to the effect that such deposit will not cause the
current rating on the Bonds to be reduced or withdrawn.
When all Outstanding Bonds are deemed paid under the provisions of this
Section, the Trustee shall, upon request, acknowledge the discharge of the lien
of this Indenture; PROVIDED, HOWEVER, that the obligations under Article II in
respect of the transfer, exchange and replacement of Bonds shall survive the
discharge of the lien of this Indenture.
SECTION 7.02. APPLICATION OF TRUST MONEYS. The Trustee shall hold in
trust moneys or U. S. Government Obligations deposited with it pursuant to
Section 7.01 and shall apply such moneys and the money derived from such U.S.
Government Obligations in accordance with this Indenture only to the payment of
the principal of, and the premium, if any, and interest on, the Bonds.
SECTION 7.03. REPAYMENT TO BANK AND COMPANY. The Trustee shall promptly
pay to the Bank (to the extent the Bank certifies to the Trustee that the
Company is indebted to it under the Reimbursement Agreement) and then to the
Company, upon request, any excess moneys or securities held by the Trustee at
any time under this Article VII and any money held by the Trustee under any
other provision of this Indenture for the payment of principal, premium, if any,
or interest on the Bonds that remains unclaimed for two years.
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ARTICLE VIII
DEFAULTS AND REMEDIES
SECTION 8.01. EVENTS OF DEFAULT. An "EVENT OF DEFAULT" is any of the
following:
(a) Default in the payment of any interest on any Bond when due and
payable.
(b) Default in the payment of principal or premium on any Bond when
due and payable, whether at maturity, upon redemption, by declaration or
otherwise.
(c) Default in the due and punctual payment of the purchase price of
any Bond tendered by its Beneficial Owner pursuant to the Series 1997
Bonds.
(d) The City fails to perform any of its agreements in this Indenture
or the Bonds (except a failure that results in an Event of Default under
clause (a), (b) or (c) above), the performance of which is material to the
Bondholders, and the failure continues after the notice and for the period
specified in this Section.
(e) The Company fails to perform any of its agreements in the Loan
Agreement (except a failure that results in an Event of Default under
clause (a), (b) or (c) of this Section or a failure under Section 5.4 or
Section 5.5 of the Loan Agreement, relating to the impairment of the
exclusion of interest on the Bonds from federal gross income), and the
failure continues after the notice and for the period specified in this
Section, PROVIDED that such a failure (other than a failure to perform an
agreement in Section 5.6 of the Loan Agreement, relating to maintenance of
the Company's existence) is not an Event of Default if it is a result of
any cause or event not reasonably within the Company's control.
(f) The Company pursuant to or within the meaning of any Bankruptcy
Law (1) commences a voluntary case, (2) consents to the
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entry of an order for relief against it in an involuntary case, (3)
consents to the appointment of a Custodian for the Company or any
substantial part of its property or (4) makes a general assignment for
the benefit of its creditors.
(g) A court of competent jurisdiction enters an order or decree under
any Bankruptcy Law that (1) is for relief against the Company in an
involuntary case, (2) appoints a Custodian for the Company or any
substantial part of its property or (3) orders the winding up or
liquidation of the Company, and the decree or order remains unstayed and in
effect for 60 days.
(h) The Trustee receives written notice from the Bank that an "event
of default" has occurred and is continuing (all periods for curing such
default having expired without a cure having been made) under the
reimbursement agreement pursuant to which the Letter of Credit was issued
and a direction to accelerate the Bonds.
(i) The Trustee receives written notice from the Bank on or before
the date or dates specified in the Letter of Credit following a drawing on
the Letter of Credit to pay interest on the Bonds that it will not
reinstate its Letter of Credit.
"BANKRUPTCY LAW" means Title 11 of the United States Code or any similar
federal or state law for the relief of debtors. "CUSTODIAN" means any receiver,
trustee, assignee, liquidator, custodian or similar official under any
Bankruptcy Law.
A default under clause (d) or (e) of this Section is not an Event of
Default until the Trustee or the holders of at least 25 percent in principal
amount of the Bonds then outstanding give the City and the Company a notice
specifying the default, demanding that it be remedied and stating that the
notice is a "Notice of Default," and the City (if the default is under clause
(d)) or the Company (if the default is under clause (e) or if the default is
under clause (d) and the Company has elected to perform the City's agreements
under this Indenture and the Bonds as described in the last sentence of this
paragraph) does not cure the default within 90 days after receipt of the notice,
or within such longer period as the Trustee shall agree
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to. The Trustee shall not unreasonably refuse to agree to a longer period if
the default can be cured but cannot reasonably be cured within 90 days after
receipt of the notice and the City or the Company has begun within 90 days
and continued diligent efforts to correct the default. The City authorizes
the Company to perform, in the name and on behalf of the City and for the
purpose of preventing the occurrence of an Event of Default, any agreement of
the City in this Indenture or the Bonds.
SECTION 8.02. ACCELERATION. If an Event of Default under clause (h) or
(i) of the foregoing Section occurs and is continuing, the Trustee shall declare
the principal and accrued interest to the date of declaration of acceleration on
the Bonds to be due and payable immediately and at such time interest on the
Bonds shall cease to accrue. If any other Event of Default occurs and is
continuing, the Trustee by notice to the City and the Company, or the holders of
at least 25 percent in principal amount of the Bonds then outstanding by notice
to the City, the Company and the Trustee (except for an Event of Default under
clause (f) or (g) of the foregoing Section, for which a declaration can be made
without any notice) may declare the principal of and accrued interest on the
Bonds to the date of declaration of acceleration of the Bonds to be due and
payable immediately. Upon any declaration of acceleration, the Trustee shall
immediately exercise such rights as it may have under the Loan Agreement.
If a Letter of Credit is in effect, if the Event of Default is not under
clause (h) or (i) of the foregoing Section and is not the result of a failure by
the Bank to honor a draw on the Letter of Credit, the Trustee will not declare
the Series 1997 Bonds to be due and payable or pursue any other remedy without
first obtaining the Bank's consent. Upon a declaration that the principal of
and accrued interest on the Series 1997 Bonds shall be due and payable, the
Trustee shall immediately draw on the Letter of Credit to pay the principal of
and accrued interest on the Series 1997 Bonds. The Trustee shall immediately
give notice of acceleration to the Bondholders.
The Trustee may, and upon the request of holders of a majority in principal
amount of the affected Bonds then outstanding shall, rescind an acceleration and
its consequences if all existing Events of Default have been cured or waived,
and (a) with respect to the Series 1997 Bonds, if, when a Letter of Credit is in
effect, the Bank gives its written consent to the waiver
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of the event of default under the Reimbursement Agreement and gives notice in
writing that the Letter of Credit has not expired in accordance with its
terms and that the Letter of Credit is reinstated up to an amount equal to
the principal of all outstanding Series 1997 Bonds and (except during a
Commercial Paper Mode or a Long-Term Interest Rate Period) up to 45 days'
interest accrued on the Series 1997 Bonds at a maximum rate of 12 percent;
(b) the rescission would not conflict with any judgment or decree; and (c)
all payments due the Trustee and any predecessor Trustee under Section 9.06
have been made.
SECTION 8.03. OTHER REMEDIES. If an Event of Default has occurred and is
continuing, the Trustee may pursue any available remedy by proceeding at law or
in equity to collect the principal of, and the premium, if any, and interest on,
the Bonds or to enforce the performance of any provision of the Bonds, this
Indenture or the Loan Agreement.
The Trustee, as the assignee of certain rights, titles and interests of the
City in and to the Loan Agreement, may enforce each and every right, title and
interest so assigned.
The Trustee may maintain a proceeding even if it does not possess any of
the Bonds or does not produce any of them in the proceeding. A delay or
omission by the Trustee or any Bondholder in exercising any right or remedy
accruing upon an Event of Default shall not impair the right or remedy or
constitute a waiver of or acquiescence in such Event of Default. No remedy is
exclusive of any other remedy. All available remedies are cumulative.
SECTION 8.04. WAIVER OF PAST DEFAULTS. The Owners of not less than a
majority in aggregate principal amount of the Bonds then Outstanding together,
when a Letter of Credit is in effect, with the Bank, by notice to the Trustee
and the Company, may waive an Event of Default and its consequences if the
Letter of Credit is reinstated up to the amount specified in Section 5.01 and
the Bank has waived in writing all defaults under the reimbursement agreement
pursuant to which the Letter of Credit was issued, but taking into account Bonds
held for the account of the Bank. When an Event of Default is waived, it is
cured and stops continuing, but no
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such waiver shall extend to any subsequent or other Event of Default or impair
any right consequent to it.
SECTION 8.05. CONTROL BY MAJORITY. Subject to Section 9.01, the Owners of
not less than a majority in aggregate principal amount of the Bonds then
Outstanding may direct the time, method and place of conducting any proceeding
for any remedy available to the Trustee or of exercising any trust or power
conferred on it. However, the Trustee may refuse to follow any direction that
conflicts with law or this Indenture. During any period when the Bonds are
secured by a Letter of Credit and the Bank has honored draws on the Letter of
Credit, any such direction of the Owners shall be followed by the Trustee only
with the prior written consent of the Bank.
SECTION 8.06. LIMITATION ON SUITS. A Bondholder may not pursue any remedy
with respect to this Indenture or the Bonds unless (a) such Owner gives the
Trustee notice stating that an Event of Default is continuing, (b) the Owners of
at least 25 percent in aggregate principal amount of the Bonds then Outstanding
make a written request to the Trustee to pursue such remedy, (c) such Owner or
Owners offer to the Trustee indemnity satisfactory to the Trustee against any
loss, liability or expense incurred in connection therewith and (d) the Trustee
does not comply with such request within 60 days after receipt of such request
and offer of indemnity.
A Bondholder may not use this Indenture to prejudice the rights of another
Bondholder or to obtain a preference or priority over any other Bondholder.
SECTION 8.07. RIGHTS OF OWNERS TO RECEIVE PAYMENT. Notwithstanding any
other provision of this Indenture, the right of any Owner to receive payment of
the principal of, and premium, if any, and interest on, a Bond, on or after the
due dates expressed in such Bond, or the purchase price of a Bond on or after
the date for its purchase as provided in such Bond, or to bring suit for the
enforcement of any such payment on or after such dates, shall not be impaired or
affected without the consent of such Owner.
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SECTION 8.08. COLLECTION SUIT BY TRUSTEE. If an Event of Default under
Section 8.01(a), (b) or (c) has occurred and is continuing, the Trustee may
recover judgment in its own name and as trustee of an express trust against the
Company for the whole amount remaining unpaid.
SECTION 8.09. TRUSTEE MAY FILE PROOFS OF CLAIM. The Trustee may file such
proofs of claim and other papers or documents as may be necessary or advisable
in order to have the claims of the Trustee and the Bondholders allowed in any
judicial proceedings relative to the Company or the Bank, their creditors or
their property and, unless prohibited by law or applicable regulations, may vote
on behalf of the Owners in any election of a trustee in bankruptcy or other
person performing similar functions. In the event of a bankruptcy or
reorganization of the Company, the Trustee may file a proof of claim on behalf
of all Bondholders with respect to the obligations of the Company pursuant to
the Loan Agreement.
SECTION 8.10. PRIORITIES. If the Trustee collects any money pursuant to
this Article VIII, it shall pay out such money as soon as practicable in the
following order:
FIRST: To the Trustee for amounts to which it is entitled under
Section 9.06, but the Trustee may not pay itself for such amount from
moneys drawn under the Letter of Credit;
SECOND: To the Bondholders for amounts due and unpaid on the Bonds
for principal, premium, if any, and interest, ratably, without preference
or priority of any kind, according to the amounts due and payable on the
Bonds for principal, premium, if any, and interest, respectively;
THIRD: To the Bank to the extent the Bank certifies to the Trustee
that the Company is indebted to the Bank under the Reimbursement Agreement;
and
FOURTH: To the Company.
The Trustee may fix a payment date for any payment to the Bondholders.
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SECTION 8.11. UNDERTAKING FOR COSTS. In any suit for the enforcement of
any right or remedy under this Indenture or in any suit against the Trustee for
any action taken or omitted by it as Trustee, a court in its discretion may
require the filing by any party litigant in such suit of an undertaking to pay
the costs of such suit, and the court in its discretion may assess reasonable
costs, including reasonable attorneys' fees, against any party litigant in such
suit, having due regard to the merits and good faith of the claims or defenses
made by the party litigant. This Section does not apply to a suit by the
Trustee, a suit by an Owner pursuant to Section 8.07 or a suit by Owners of more
than 10 percent in aggregate principal amount of the Bonds then Outstanding.
ARTICLE IX
TRUSTEE AND REMARKETING AGENT
SECTION 9.01. DUTIES OF TRUSTEE. (a) If an Event of Default has occurred
and is continuing, the Trustee shall exercise its rights and powers and use the
same degree of care and skill in their exercise as a prudent person would
exercise or use under the circumstances in the conduct of such person's own
affairs.
(b) Except during the continuance of an Event of Default:
(1) the Trustee need perform only those duties that are specifically
set forth in this Indenture and applicable laws and regulations and no
others and no implied duties or covenants shall be read into this Indenture
against the Trustee, and
(2) in the absence of bad faith on its part, the Trustee may
conclusively rely, as to the truth of the statements and the correctness of
the opinions expressed, upon certificates, opinions, requisitions or any
other writing furnished to the Trustee and conforming to the requirements
of this Indenture. However, the Trustee shall examine the same to
determine whether they conform to the requirements of this Indenture.
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(c) The Trustee shall not be relieved from liability for its own negligent
action, its own negligent failure to act or its own willful misconduct, except
that:
(1) this subsection (c) shall not limit the effect of subsection (b)
of this Section 9.01;
(2) the Trustee shall not be liable for any error of judgment made in
good faith by a Responsible Officer, unless it is proved that the Trustee
was negligent in ascertaining the pertinent facts;
(3) the Trustee shall not be liable with respect to any action it
takes or omits to take in good faith in accordance with a direction
received by it pursuant to Section 8.05; and
(4) no provision of this Indenture shall require the Trustee to
expend or risk its own funds or otherwise incur any financial liability in
the performance of any of its duties hereunder or in the exercise of any of
its rights or powers hereunder, if it shall have reasonable grounds for
believing that repayment of such funds or adequate indemnity against such
risk or liability is not reasonably assured to it.
(d) Every provision of this Indenture that in any way relates to the
Trustee is subject to all the provisions of this Section 9.01.
(e) The Trustee may refuse to perform any duty or exercise any right or
power unless it receives indemnity satisfactory to it against any loss,
liability or expense, but the Trustee may not require indemnity as a condition
to declaring the principal of and interest on the Bonds to be due immediately
under Section 8.02, to drawing on the Letter of Credit or to making any payment
of principal, premium or interest on the Series 1997 Bonds.
(f) The Trustee shall not be liable for interest on any cash held by it,
except as the Trustee may agree with the Company or the City with the consent of
the Company.
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(g) The Trustee may rely on a Company Representative's certificate as to
whether a Bankruptcy Filing has occurred.
(h) In addition to the funds and accounts established by this Indenture,
the Trustee may establish such funds and accounts as it deems necessary and
appropriate in order to discharge its duties under this Indenture.
(i) The Trustee, on behalf of the City, shall appoint an authenticating
agent acceptable to the Company to authenticate Bonds if required pursuant to
Section 9.07. An authenticating agent may authenticate Bonds whenever the
Trustee may do so. Each reference in this Indenture to authentication by the
Trustee shall include authentication by such authenticating agent.
SECTION 9.02. RIGHTS OF TRUSTEE. Subject to Section 9.01:
(a) The Trustee may rely on any document believed by it to be genuine
and to have been signed or presented by the proper person. The Trustee
need not investigate any fact or matter stated in such document.
(b) The Trustee shall not be liable for any action it takes or omits
to take in good faith in reliance on any certificate of an appropriate
officer or officers of the City or the Company or any Opinion of Counsel.
(c) The Trustee may act through agents or, as provided in Section
9.16, through co-trustees so long as each such co-trustee shall agree in
writing to be bound by the standards of conduct for the Trustee specified
in this Indenture, and the Trustee shall not be responsible for the willful
misconduct or negligence of any agent or co-trustee appointed by it with
due care.
SECTION 9.03. INDIVIDUAL RIGHTS OF TRUSTEE. The Trustee in its individual
or any other capacity may become the Owner or a pledgee of Bonds and may
otherwise deal with the City or with the Company or its affiliates with the same
rights it would have if it were not the Trustee.
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SECTION 9.04. TRUSTEE'S DISCLAIMER. The Trustee makes no representation
as to the validity or adequacy of this Indenture, the Loan Agreement or the
Bonds, except for its execution hereof and its authentication of any Bond
hereunder. The Trustee shall not be accountable for the Company's use of Bond
proceeds, nor shall it be responsible for any statement in the Bonds other than
its certificate of authentication.
SECTION 9.05. NOTICE OF DEFAULTS. If an event occurs which, with the
giving of notice or lapse of time or both, would become an Event of Default, and
if such event is continuing and is known to the Trustee, the Trustee shall mail
to the City and to each Bondholder notice of such event within 90 days after it
occurs. Except in the case of a default in the payment or purchase on any Bonds,
the Trustee may withhold such notice from the Bondholders if and so long as a
committee of its Responsible Officers in good faith determines that withholding
such notice is in the best interests of the Bondholders.
SECTION 9.06. COMPENSATION OF TRUSTEE. For acting under this Indenture,
the Trustee shall be entitled to payment as previously agreed upon in writing by
the Company and the Trustee.
To secure the payment or reimbursement to the Trustee provided for in this
Section, the Trustee shall have a senior claim, to which the Bonds are made
subordinate, on all money or property held or collected by the Trustee, except
any money or property held under Section 4.04 or Article VII or otherwise held
in trust to pay the principal of, and the premium, if any, and interest on, or
the purchase price of, particular Bonds and except amounts drawn under the
Letter of Credit.
SECTION 9.07. ELIGIBILITY OF TRUSTEE. This Indenture shall always have a
Trustee that is a corporation or association organized and doing business under
the laws of the United States of America or any state or the District of
Columbia, is authorized under such laws to exercise corporate trust powers, is
subject to supervision or examination by United States of America, state or
District of Columbia authority and has a combined capital, surplus and undivided
profits of at least $10,000,000 as set forth in its most recent published annual
report of condition. If at any time the Trustee ceases to be eligible in
accordance with this Section, the Trustee shall resign
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immediately as set forth in Section 9.08. If the Bonds are then rated by
Moody's Investors Service, Inc., any successor Trustee shall be rated at
least Baa3/P-3 or otherwise be acceptable to Moody's Investors Service, Inc.
SECTION 9.08. REPLACEMENT OF TRUSTEE. (a) The Trustee may resign by
notifying the City and the Company in writing and by mailing notice thereof by
first-class mail to the Bondholders.
Upon receiving such notice of resignation, the Company, with the consent of
the City, shall promptly appoint a successor trustee by an instrument in
writing; PROVIDED that the Company may not make such appointment if an Event of
Default has occurred and is continuing, or if an event has occurred and is
continuing which, with the giving of notice or lapse of time or both, would
become an Event of Default. If no successor trustee shall have been so
appointed and have accepted appointment within 30 days after the giving of such
notice of resignation, the resigning Trustee may petition any court of competent
jurisdiction for the appointment of a successor trustee or any Bondholder who
has been a bona fide Owner of a Bond for at least six months may, on behalf of
himself and all others similarly situated, petition any such court for the
appointment of a successor trustee. Such court may thereupon, after such
notice, if any, as it may deem proper and may prescribe, appoint a successor
trustee.
(b) In case at any time either of the following shall occur:
(1) the Trustee shall cease to be eligible in accordance with the
provisions of Section 9.07 and shall fail to resign after written request
therefor by the Company, the City or any Bondholder who has been a bona
fide Owner of a Bond for at least six months, or
(2) the Trustee shall become incapable of acting, or shall be
adjudged a bankrupt or insolvent, or a receiver of the Trustee or of its
property shall be appointed, or any public officer shall take charge or
control of the Trustee or of its property or affairs for the purpose of
rehabilitation, conservation or liquidation,
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then, in any such case, the Company shall remove the Trustee and appoint a
successor trustee by an instrument in writing; PROVIDED that the Company may not
make such appointment if an Event of Default has occurred and is continuing, or
if an event has occurred and is continuing which, with the giving of notice or
lapse of time or both, would become an Event of Default, in which case the
successor trustee shall be appointed by a court as provided in subsection (a) of
this Section.
(c) Owners of a majority in aggregate principal amount of the Bonds at the
time Outstanding may at any time remove the Trustee by an instrument or
concurrent instruments in writing signed by such Bondholders and delivered to
the Trustee and the Company. Upon receiving such notice of removal, the Company
shall promptly appoint a successor trustee by an instrument in writing; PROVIDED
that the Company may not make such appointment if an Event of Default has
occurred and is continuing, or if an event has occurred and is continuing which,
with the giving of notice or lapse of time or both, would become an Event of
Default, in which case the successor trustee shall be appointed by a court as
provided in subsection (a) of this Section.
(d) Any resignation or removal of the Trustee and the appointment of a
successor trustee pursuant to any of the provisions of this Section shall become
effective only upon acceptance of appointment by the successor trustee as
provided in Section 9.09. The Company shall give written notification to any
Rating Agency then rating the Bonds if a successor trustee shall be appointed
pursuant to this Section.
SECTION 9.09. ACCEPTANCE OF TRUST BY SUCCESSOR TRUSTEE. Any successor
trustee appointed as provided in Section 9.08 shall execute, acknowledge and
deliver to the City and to its predecessor trustee an instrument accepting such
appointment hereunder, and thereupon the resignation or removal of the
predecessor trustee shall become effective and such successor trustee, without
any further act, deed or conveyance, shall become vested with all the rights,
powers, trusts, duties and obligations of its predecessor in the trusts
hereunder, with like effect as if originally named as Trustee herein; but,
nevertheless, on the written request of the City or the written request of the
successor trustee, the Trustee ceasing to act shall execute and deliver an
instrument transferring to such successor
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trustee, upon the trusts herein expressed, all the rights, powers and trusts
of the Trustee so ceasing to act. Upon request of any such successor trustee,
the City shall execute any and all instruments in writing necessary or
desirable for more fully and certainly vesting in and confirming to such
successor trustee all such rights, powers and trusts. Any Trustee ceasing to
act shall, nevertheless, retain a lien upon all property or funds held or
collected by such Trustee to secure the amounts due it as compensation,
reimbursement, expenses and indemnity afforded to it by Section 9.06.
No successor trustee shall accept appointment as provided in this Section
unless at the time of such acceptance such successor trustee shall be eligible
under the provisions of Section 9.07.
At the time of appointment, the Company and the successor trustee shall
execute an agreement with respect to the compensation of the successor trustee.
Upon acceptance of appointment by a successor trustee as provided in this
Section, the City or such successor trustee shall give the Bondholders notice of
the succession of such trustee to the trusts hereunder in the manner prescribed
in Section 9.08 for the giving of notice of resignation of the Trustee.
SECTION 9.10. DUTIES OF REMARKETING AGENT. The Remarketing Agent shall
set the interest rates on the Series 1997 Bonds and perform the other duties
provided for in Section 2.02 and will remarket Series 1997 Bonds as provided in
Section 3.08, subject to any provisions of the Remarketing Agreement, which
shall control in the case of any conflict with this Indenture. So long as the
Series 1997 Bonds are held in the Book-Entry System, the Remarketing Agent must
be the sole Participant in such system with respect to the Series 1997 Bonds,
except under the circumstances described in Section 3.08(3). The Remarketing
Agent may for its own account or as broker or agent for others deal in the Bonds
and may do anything any other Bondholder may do to the same extent as if the
Remarketing Agent were not serving as such.
SECTION 9.11. ELIGIBILITY OF REMARKETING AGENT. The initial Remarketing
Agent appointed under this Indenture is First National Bank of
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Chicago, Chicago, Illinois. The Remarketing Agent shall be a bank, trust
company or member of the National Association of Securities Dealers, Inc.
organized and doing business under the laws of the United States of America
or any state or the District of Columbia, shall have a combined capital
stock, surplus and undivided profits of at least $15,000,000 as set forth in
its most recent published annual report and shall be authorized by law to
perform all the duties imposed upon the Remarketing Agent by this Indenture
and the Remarketing Agreement. If the Series 1997 Bonds are then rated by
Moody's Investors Service, Inc., any successor Remarketing Agent shall be
rated at least Baa3/P-3 or otherwise be acceptable to Moody's Investors
Service, Inc.
SECTION 9.12. REPLACEMENT OF REMARKETING AGENT. The Remarketing Agent may
resign by notifying the City, the Trustee and the Company. Such resignation
will take effect only on the day a successor Remarketing Agent appointed in
accordance with this Section has accepted the appointment. The Company may
remove the Remarketing Agent at any time by an instrument signed by the Company
and delivered to the Remarketing Agent, the City and the Trustee at least 30
days prior to the effective date of such removal (which shall not in any event
occur prior to the appointment of a successor Remarketing Agent). A new
Remarketing Agent may be appointed by the Company with the consent of the City
upon the resignation or removal of the Remarketing Agent. The Trustee shall
promptly notify the holders of Series 1997 Bonds and all Rating Agencies of any
change in the Remarketing Agent.
SECTION 9.13. COMPENSATION OF REMARKETING AGENT. The Remarketing Agent
shall not be entitled to any compensation from the City, the Trustee or any
property held under this Indenture but must make separate arrangements with the
Company for compensation.
SECTION 9.14. SUCCESSOR TRUSTEE OR REMARKETING AGENT BY MERGER. If the
Trustee or the Remarketing Agent consolidates with, merges or converts into, or
transfers all or substantially all its assets (or, in the case of a bank or
trust company, its corporate trust assets) to, another corporation, the
resulting, surviving or transferee corporation without any further act shall be
the successor Trustee or Remarketing Agent, PROVIDED
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that such successor shall be eligible under the applicable provisions of
this Article IX.
SECTION 9.15. SEPARATE OR CO-TRUSTEE. It is the purpose of this Indenture
that there shall be no violation of any law of any jurisdiction (including
particularly the laws of the State) denying or restricting the right of banking
corporations or associations to transact business as trustee in such
jurisdiction. It is recognized that in the case of litigation under this
Indenture, and in particular in the case of the enforcement of this Indenture
upon the occurrence of an Event of Default, or in case the Trustee deems that by
reason of any present or future law of any jurisdiction it may not exercise any
of the rights, powers, trusts or remedies herein granted to the Trustee or hold
title to the trust estate, as herein granted and described in the Granting
Clause, or take any other action which may be desirable or necessary in
connection therewith, it may be necessary or desirable for the Trustee to
appoint an individual or institution as a separate or co-trustee. The Trustee
is hereby authorized to appoint a separate or co-trustee under such
circumstances, and the following provisions of this Section shall apply to any
separate or co-trustee so appointed.
In the event that the Trustee appoints an individual or institution as a
separate or co-trustee, each and every right, power, trust, remedy, estate,
title, interest, claim, cause of action and lien expressed or intended by this
Indenture to be exercised by or vested in or conveyed to the Trustee shall be
exercisable by and vested in such separate or co-trustee, but only to the extent
necessary to enable the separate or co-trustee to exercise such rights, powers,
trusts and remedies.
Should any deed, conveyance or instrument in writing from the City be
reasonably required by any separate trustee or co-trustee so appointed by the
Trustee for more fully and certainly vesting in and confirming to him or it
such estates, rights, powers, trusts, duties and obligations, any and all
such deeds, conveyances and instruments in writing shall, on request, be
executed, acknowledged and delivered by the City. In case any separate
trustee or co-trustee, or a successor to either, shall die, become incapable
of acting, resign or be removed, all the estates, rights, powers, trusts,
duties and obligations of such separate trustee or co-trustee, so far as
permitted by
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law, shall vest in and be exercised by the Trustee until the appointment of a
successor, separate or co-trustee.
Except as otherwise required by applicable law, no right or power granted
by this Indenture to any separate or co-trustee shall be exercised by such
separate or co-trustee alone unless such separate or co-trustee shall have
obtained the written consent of the Trustee to do so.
The Trustee may at any time, by an instrument in writing executed by it,
remove any separate or co-trustee, and in such event may, in its discretion, by
an instrument in writing executed by it, appoint a successor to such separate or
co-trustee.
ARTICLE X
AMENDMENTS OF AND SUPPLEMENTS TO INDENTURE
SECTION 10.01. WITHOUT CONSENT OF BONDHOLDERS. The City and the Trustee
may amend or supplement this Indenture or the Bonds without notice to or the
consent of any Bondholder:
(a) to cure any ambiguity, inconsistency or formal defect or
omission;
(b) to grant to the Trustee for the benefit of the Bondholders
additional rights, remedies, powers or authority;
(c) to subject to this Indenture additional collateral, but only upon
receipt of a Favorable Opinion of Tax Counsel, or to add other agreements
of the City;
(d) to modify this Indenture or the Bonds to permit qualification
under the Trust Indenture Act of 1939, as amended, or any similar federal
statute at the time in effect, or to permit the qualification of the Bonds
for sale under the securities laws of any state of the United States of
America;
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(e) to authorize different authorized denominations of the Bonds and
to make correlative amendments and modifications to this Indenture
regarding exchangeability of Bonds of different authorized denominations,
redemptions of portions of Bonds of particular authorized denominations and
similar amendments and modifications of a technical nature;
(f) to increase or decrease the number of days specified for the
giving of notices under Section 2.02 and to make corresponding changes to
the period for notice of redemption of the Bonds; PROVIDED that no
decreases in any such number of days shall become effective except while
the Series 1997 Bonds bear interest at a Daily Rate or a Weekly Rate and
until 30 days after the Trustee has given notice to the Owners of the
Series 1997 Bonds;
(g) to provide for an uncertificated system of registering the Bonds
or to provide for the change to or from the Book-Entry System for the
Bonds;
(h) to evidence the succession of a new Trustee or the appointment by
the Trustee or the City of a co-trustee;
(i) to make any change (including a change in Section 4.01 to reflect
any amendment to the Code or interpretations by the Internal Revenue
Service of the Code) that does not materially adversely affect the rights
of any Bondholder;
(j) to make any change necessary to secure from a Rating Agency a
rating on the Series 1997 Bonds equal to the rating on the unsecured
indebtedness of the Bank (or parent company of the Bank) or the issuer of
any other type of credit enhancement;
(k) to provide for the issuance of Additional Bonds; or
(l) in connection with the extension of the maturity of the Series
1997 Bonds as provided in Section 9 of the Series 1997 Bonds.
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Prior to consenting to such amendment or supplement, the Trustee may request,
and may conclusively rely, on an Opinion of Counsel that such amendment or
supplement complies with this Section.
SECTION 10.02. WITH CONSENT OF BONDHOLDERS. If an amendment of or
supplement to this Indenture or the Bonds without the consent of Bondholders is
not permitted by Section 10.01, the City and the Trustee may enter into such
amendment or supplement with the consent of the Owners of at least a majority in
the aggregate principal amount of the Bonds then Outstanding. However, without
the consent of each Bondholder affected, no amendment or supplement may (a)
extend the maturity of the principal of, or interest on, any Bond, (b) reduce
the principal amount of, or rate of interest on, any Bond (other than an
extension of the maturity of Series 1997 Bonds as provided in Section 9 of the
Series 1997 Bonds), (c) effect a privilege or priority of any Bond or Bonds over
any other Bond or Bonds, (d) reduce the percentage of the aggregate principal
amount of the Bonds the Owners of which are required to consent to such
amendment or supplement, (e) impair the exclusion from federal gross income of
interest on any Bond, (f) eliminate the Owners' rights to tender the Bonds or
any mandatory redemption of the Bonds, or extend the due date for the purchase
of Bonds tendered by the Owners thereof or any call date for mandatory
redemption, or reduce the purchase or redemption price of the Bonds, (g) create
a lien ranking prior to or on a parity with the lien of this Indenture on the
property described in the Granting Clause of this Indenture or (h) deprive any
Bondholder of the lien created by this Indenture on such property. In addition,
if moneys or U.S. Government Obligations have been deposited or set aside with
the Trustee pursuant to Article VII for the payment of Bonds and such Bonds
shall not have in fact been actually paid in full, no amendment to the
provisions of such Article VII shall be made without the consent of the Owner of
each affected Bond.
SECTION 10.03. EFFECT OF CONSENTS. After an amendment or supplement
becomes effective, it will bind every Bondholder unless it makes a change
described in clauses (a) through (h) of the second sentence of Section 10.02, in
which case the amendment or supplement will bind each Bondholder who consented
to it and each subsequent Owner of a Bond or portion of a Bond evidencing the
same debt as the consenting Owner's Bond.
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SECTION 10.04. NOTATION ON OR EXCHANGE OF BONDS. If an amendment or
supplement changes the terms of a Bond, the Trustee may require the Owner to
deliver such Bond to the Trustee. The Trustee may place an appropriate notation
on such Bond about the changed terms and return it to the Owner. Alternatively,
if the Trustee, the City and the Company so determine, the City, in exchange for
such Bond, shall execute and the Trustee shall authenticate and deliver a new
Bond that reflects the changed terms.
SECTION 10.05. SIGNING BY TRUSTEE OF AMENDMENTS AND SUPPLEMENTS. The
Trustee shall sign any amendment or supplement to this Indenture or the Bonds
authorized by this Article X if such amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If such
amendment or supplement has such an adverse effect, the Trustee may, but need
not, sign it. In signing such an amendment or supplement, the Trustee shall be
entitled to receive and (subject to Section 9.01) shall be fully protected in
relying on an Opinion of Counsel stating that such amendment or supplement is
authorized by this Indenture.
SECTION 10.06. COMPANY AND BANK CONSENT REQUIRED. No amendment or
supplement to this Indenture or the Bonds shall become effective unless the
Company and, when a Letter of Credit is in effect or any amounts are owed to the
Bank under the Reimbursement Agreement, the Bank deliver to the Trustee and to
the City their written consents to the amendment or supplement.
SECTION 10.07. NOTICE TO BONDHOLDERS. The Trustee shall cause notice of
the execution of each amendment or supplement to this Indenture or the Loan
Agreement to be mailed to the Bondholders by first-class mail. The notice
shall, at the option of the Trustee, either (i) briefly state the nature of the
amendment or supplement and that copies of it are on file with the Trustee for
inspection by the Bondholders or (ii) enclose a copy of such amendment or
supplement.
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ARTICLE XI
AMENDMENTS OF AND SUPPLEMENTS TO LOAN AGREEMENT
SECTION 11.01. WITHOUT CONSENT OF BONDHOLDERS. The City may enter into,
and the Trustee may consent to, any amendment of or supplement to the Loan
Agreement without notice to or the consent of any Bondholder if such amendment
or supplement is required or permitted (a) by the provisions of the Loan
Agreement or this Indenture (including, in connection with transactions
permitted by Section 5.6 of the Loan Agreement, relating to maintenance of the
Company's existence), (b) to cure any ambiguity, inconsistency or formal defect
or omission, (c) to identify more precisely the Project, (d) in connection with
any authorized amendment of or supplement to this Indenture, (e) to make any
change that does not materially adversely affect the rights of any Bondholder,
(f) to make any change necessary to secure from a Rating Agency a rating on the
Bonds equal to the rating on the unsecured indebtedness of the Bank (or the
parent company of the Bank) or the issuer of any other type of credit
enhancement or (g) in connection with the issuance of Additional Bonds. Prior
to consenting to such amendment or supplement, the Trustee may request, and may
conclusively rely, on an Opinion of Counsel that such amendment or supplement
complies with this Section.
SECTION 11.02. WITH CONSENT OF BONDHOLDERS. If an amendment of or
supplement to the Loan Agreement without the consent of Bondholders is not
permitted by Section 11.01, the City may enter into, and the Trustee may consent
to, such amendment or supplement with the consent of the Owners of at least a
majority in the aggregate principal amount of the Bonds then Outstanding.
However, without the consent of each Bondholder affected, no amendment or
supplement may result in any occurrence described in clauses (a) through (h) of
the second sentence of Section 10.02.
SECTION 11.03. CONSENTS BY TRUSTEE TO AMENDMENTS OR SUPPLEMENTS. The
Trustee shall consent to any amendment or supplement to the Loan Agreement
authorized by this Article XI if such amendment or supplement does not adversely
affect the rights, duties, liabilities or immunities of the Trustee. If such
amendment or supplement has such an adverse effect, the Trustee may, but need
not, sign it. In signing a consent
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to such an amendment or supplement, the Trustee shall be entitled to receive
and (subject to Section 9.01) shall be fully protected in relying on an
Opinion of Counsel stating that such amendment or supplement is authorized by
this Indenture.
ARTICLE XII
MISCELLANEOUS
SECTION 12.01. NOTICES. (a) Any notice, request, direction, designation,
consent, acknowledgment, certification, appointment, waiver or other
communication required or permitted by this Indenture or the Bonds must be in
writing except as expressly provided otherwise in this Indenture or the Bonds.
(b) Any notice or other communication shall be sufficiently given and
deemed given when delivered by hand or mailed by first-class mail, postage
prepaid, addressed as follows: if to the City, to Office of Chief Financial
Officer, Room 501, City Hall, 121 North LaSalle Street, Chicago, Illinois 60602,
Attention: Chief Financial Officer; if to the Trustee, to 33 North LaSalle
Street, 13th Floor, Chicago, Illinois 60690, Attention: Corporate Trust
Division; if to the Company, to 401 North Michigan Avenue, 30th Floor, Chicago,
Illinois 60611, Attention: Chief Financial Officer; if to the Remarketing
Agent, to The First National Bank of Chicago, One First National Plaza, Suite
0826, Chicago, Illinois 60670, Attention: Mary Duff; if to the Bank, to The
First National Bank of Chicago, One First National Plaza, 14th Floor, Chicago,
Illinois 60670, Attention: Kevin L. Gillen, and if to the Bondholders, as
provided in the Bond registration books kept pursuant to this Indenture. Any
addressee may designate additional or different addresses for purposes of this
Section 12.01.
SECTION 12.02. BONDHOLDERS' CONSENTS. Any consent or other instrument
required by this Indenture to be signed by Bondholders may be in any number of
concurrent documents and may be signed by a Bondholder or by the Bondholder's
agent appointed in writing. Proof of the execution of such document or of the
instrument appointing an agent and of the ownership of Bonds, if made in the
following manner, shall be conclusive
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<PAGE>
for any purposes of this Indenture with regard to any action taken by the
Trustee under such document or instrument:
(a) The fact and date of a person's signing any document or
instrument may be proved by the certificate of any officer in any
jurisdiction who by law has power to take acknowledgments within that
jurisdiction that the person signing such document or instrument
acknowledged before such officer the execution of such document or
instrument, or by an affidavit of any witness to the signing.
(b) The fact of ownership of any Bond, the principal amount thereof,
the number and other identification thereof and the date of holding shall
be proved by the registration books kept pursuant to this Indenture.
In determining whether the Owners of the required aggregate principal
amount of Bonds Outstanding have taken any action under this Indenture, Bonds
owned by the Company or any person controlling, controlled by or under common
control with the Company shall be disregarded and deemed not to be Outstanding.
In determining whether the Trustee shall be protected in relying on any such
action, only Bonds which the Trustee knows to be so owned shall be disregarded.
Any consent or other instrument shall be irrevocable and shall bind any
subsequent Owner of a Bond or of any Bond delivered in substitution therefor.
SECTION 12.03. LIMITATION OF RIGHTS. Nothing expressed or implied in this
Indenture or the Bonds shall give to any person other than the Trustee, the
City, the Bank, the Company, the Remarketing Agent and the Bondholders any
right, remedy or claim under or with respect to this Indenture.
SECTION 12.04. SEVERABILITY. If any provision of this Indenture shall be
determined to be unenforceable, such unenforceability shall not affect the
enforceability of any other provision of this Indenture.
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<PAGE>
SECTION 12.05. PAYMENTS DUE ON NON-BUSINESS DAYS. If a payment date is not
a Business Day at the place of payment, then payment may be made at that place
on the next Business Day, and no interest shall accrue for the intervening
period.
SECTION 12.06. GOVERNING LAW. This Indenture shall be governed exclusively
by and construed in accordance with the applicable laws of the State.
SECTION 12.07. CAPTIONS. The captions in this Indenture are for
convenience only and do not define or limit the scope or intent of any
provisions or Sections of this Indenture.
SECTION 12.08. NO RECOURSE AGAINST CITY'S OFFICERS. No officer, member,
director, agent or employee of the City shall be individually or personally
liable for any payment on the Bonds or be subject to any personal liability or
accountability by reason of the issuance of the Bonds.
SECTION 12.09. LIMITATION OF LIABILITY. Notwithstanding anything contained
in this Indenture to the contrary, the Bonds shall be limited obligations of the
City and shall be payable solely from the revenues and receipts and other
amounts received by or on behalf of the City pursuant solely to the Loan
Agreement. Anything herein to the contrary notwithstanding, neither the
Trustee, the Owners nor the Beneficial Owners shall have any interest in the
Ground Lease or any amounts payable thereunder or in the Project or in any
property at the Airport.
SECTION 12.10. COUNTERPARTS. This Indenture may be signed in several
counterparts, each of which shall be an original, but all of which together
shall constitute the same instrument.
SECTION 12.11. NOTICE TO RATING AGENCIES. The Trustee will promptly notify
in writing each Rating Agency then rating the Bonds of the following events:
(1) the expiration, termination, substitution or extension of the
Letter of Credit;
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(2) the redemption, purchase or payment of all outstanding Bonds;
(3) changes in the Loan Agreement, this Indenture, the Letter of
Credit, the Reimbursement Agreement or any other legal agreements relating
to the Bonds of which the Trustee has notice;
(4) a change in the method of determining interest on the Series 1997
Bonds to a Commercial Paper Rate or a Long-Term Interest Rate; and
(5) any contemplated change in the Trustee or the Remarketing
Agreement.
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<PAGE>
IN WITNESS WHEREOF, the City of Chicago has caused this Indenture to be
signed in its name and its corporate seal to be hereunto affixed and attested by
its duly authorized officers, and American National Bank and Trust Company of
Chicago, in token of its acceptance of the trust created hereunder, has caused
this Indenture to be signed in its name by its duly authorized officer, all as
of the day and year first above written.
CITY OF CHICAGO
By
-----------------------
Chief Financial Officer
[SEAL]
ATTEST:
- ---------------------
City Clerk
AMERICAN NATIONAL BANK AND TRUST
COMPANY OF CHICAGO, as Trustee
By
----------------------------
[SEAL]
ATTEST:
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EXHIBIT A
[FORM OF BOND]
UNLESS THIS BOND IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF THE DEPOSITORY
TRUST COMPANY, A NEW YORK CORPORATION ("DTC"), TO THE CITY OR THE REGISTRAR FOR
REGISTRATION OF TRANSFER, EXCHANGE, OR PAYMENT, AND ANY BOND ISSUED IS
REGISTERED IN THE NAME OF CEDE & CO. OR IN SUCH OTHER NAME AS IS REQUESTED BY AN
AUTHORIZED REPRESENTATIVE OF DTC ( AND ANY PAYMENT IS MADE TO CEDE & CO. OR THE
SUCH OTHER ENTITY AS IS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF DTC), ANY
TRANSFER, PLEDGE, OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL INASMUCH AS THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.
UNITED STATES OF AMERICA
STATE OF ILLINOIS
No. ________ $_________________
_________________
CITY OF CHICAGO VARIABLE/FIXED RATE DEMAND
SPECIAL FACILITIES AIRPORT REVENUE BOND
(CENTERPOINT O'HARE, L.L.C. PROJECT)
SERIES 1997
INITIAL MATURITY DATE DATED DATE CUSIP 167495 AD 2
September 1, 2032 September 18, 1997
REGISTERED OWNER:
<PAGE>
PRINCIPAL AMOUNT:
The City of Chicago, a home rule unit of local government, duly organized
and validly existing under the laws of the State of Illinois, in accordance with
the provisions of Section 6(a) of the 1970 Constitution of the State of
Illinois, hereby promises to pay, solely from the sources described in this
Bond, to the Registered Owner identified above, or registered assigns, on the
Maturity Date stated above or on the Maturity Date as it may be extended as
provided in Section 9 of this Bond (or if this Bond is called for earlier
redemption as described herein, on the redemption date) the principal amount
identified above and to pay interest and premium, if any, as provided in this
Bond.
1. INDENTURE; LOAN AGREEMENT. This Bond is one of the bonds (the
"BONDS"), limited to $55,000,000 in aggregate principal amount, issued under the
Indenture of Trust dated as of September 1, 1997 (the "INDENTURE") between the
City of Chicago (the "CITY") and American National Bank and Trust Company of
Chicago, as trustee (the "TRUSTEE"). The terms of the Bonds include those in
the Indenture. Bondholders are referred to the Indenture for a statement of
those terms. The Indenture also provides for the issuance, under the
conditions, limitations and restrictions therein set forth, of additional series
of bonds on a parity with the Bonds and all other bonds issued under the
Indenture. Capitalized terms used herein and not otherwise defined shall have
the meanings ascribed to them in the Indenture.
The City will provide the proceeds of the Bonds to CenterPoint O'Hare,
L.L.C. an Illinois limited liability company (the "COMPANY"), pursuant to a Loan
Agreement dated as of September 1, 1997 (the "LOAN AGREEMENT") between the City
and the Company. The Company will use the proceeds of the Bonds to pay a
portion of the costs of funding the designing, constructing, rehabilitating,
furnishing and equipping and leasing of air cargo facilities used for the
receiving and storing of cargo being transported at Chicago-O'Hare International
Airport (the "AIRPORT") and other incidental uses and other improvements related
to the operation of the Airport (the "PROJECT"). The Company has agreed in the
Loan Agreement to pay the City amounts sufficient to pay all amounts coming due
on the
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Bonds, and the City has assigned its right to such payments under the Loan
Agreement to the Trustee as security for the Bonds.
The Indenture and the Loan Agreement may be amended, and references to them
include any amendments.
The City has established a book-entry only system of registration for the
Bonds (the "BOOK-ENTRY SYSTEM"). Except as specifically provided otherwise in
the Indenture, the Securities Depository (or its nominee) will be the Registered
Owner of this Bond. By acceptance of a confirmation of purchase, delivery or
transfer, the Beneficial Owner of this Bond shall be deemed to have agreed to
this arrangement. The Securities Depository (or its nominee), as Registered
Owner of this Bond, shall be treated as its owner for all purposes.
2. SOURCE OF PAYMENTS. The Bonds are issued pursuant to and in full
compliance with the Constitution and laws of the State of Illinois and pursuant
to an ordinance adopted by the City on September 10, 1997, which ordinance
authorizes the execution and delivery of the Loan Agreement and the Indenture.
The Bonds are limited obligations of the City and, as provided in the Indenture,
are payable solely from payments to be made by the Company under the Loan
Agreement, from a Letter of Credit as described below (but only so long as a
Letter of Credit is in effect) and from any other moneys held by the Trustee
under the Indenture for such purpose, and there shall be no recourse against the
City or any other property now or hereafter owned by it. THE BONDS SHALL NOT
CONSTITUTE AN INDEBTEDNESS OF THE CITY OR A LOAN OF CREDIT THEREOF WITHIN THE
MEANING OF ANY CONSTITUTIONAL OR STATUTORY PROVISION OF THE STATE OF ILLINOIS.
NEITHER THE FAITH AND CREDIT NOR THE TAXING POWER OF THE CITY, THE STATE OF
ILLINOIS OR ANY POLITICAL SUBDIVISION THEREOF, IS PLEDGED TO THE PAYMENT OF THE
PRINCIPAL OF THE BONDS, OR THE INTEREST OR ANY PREMIUM THEREON, OR OTHER COSTS
INCIDENT THERETO. THE BONDS ARE PAYABLE SOLELY FROM THE REVENUES IN THE
INDENTURE PLEDGED TO SUCH PAYMENT AND NO OWNER OR OWNERS OF THE BONDS SHALL EVER
HAVE THE RIGHT TO COMPEL ANY EXERCISE OF THE TAXING POWER OF THE CITY, THE STATE
OF ILLINOIS OR ANY POLITICAL SUBDIVISION THEREOF NOR TO ENFORCE THE PAYMENT OF
THE BONDS AGAINST ANY PROPERTY OF THE CITY, THE STATE OF ILLINOIS OR ANY SUCH
POLITICAL SUBDIVISION. THE PROJECT IS NOT SECURITY FOR THE BONDS, AND THE BONDS
ARE NOT SECURED BY
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ANY OTHER PROPERTY OR IMPROVEMENTS AT THE AIRPORT OR ANY REVENUES DERIVED BY
THE CITY FROM THE OPERATION OF THE AIRPORT GENERALLY.
3. INTEREST RATE. Interest on this Bond will be paid at the lesser of
(a) a Daily Rate, a Weekly Rate, a Commercial Paper Rate or a Long-Term Interest
Rate, as selected by the Company and as determined in accordance with the
Indenture, and (b) 12 percent per annum or, when a Letter of Credit secures the
Bonds, such lower maximum rate as may be specified in the Letter of Credit.
Interest will initially be payable at a Weekly Rate as set forth in the
Indenture. The Company may change the interest rate determination method from
time to time. A change in the interest rate determination method will result in
redemption of the Bonds (see "REDEMPTION" below). While there exists an Event
of Default under the Indenture, the interest rate on the Bonds will be the
interest rate on the Bonds in effect on the day before the Event of Default
occurred.
When interest is payable at a Daily, Weekly or Commercial Paper Rate, it
will be computed on the basis of the actual number of days elapsed over a year
of 365 days (366 in leap years), and when payable at a Long-Term Interest Rate,
it will be computed on the basis of a 360-day year of twelve 30-day months.
Interest on overdue principal and, to the extent lawful, on overdue premium and
interest will be payable at the interest rate on each Bond in effect on the day
before the default occurred.
4. INTEREST PAYMENT AND RECORD DATES. Interest will accrue on the unpaid
portion of the principal of this Bond from the last date to which interest was
paid or, if no interest has been paid, from the date of the original issuance of
the Bonds until the entire principal amount of this Bond is paid. When interest
on this Bond is payable at the rate shown in the first column below, interest
accrued during the period (an "INTEREST PERIOD") shown in the second column
below will be paid on the date (an "INTEREST PAYMENT DATE") shown in the third
column below to the Registered Owner on the date (a "RECORD DATE") shown in the
fourth column below:
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<TABLE>
<CAPTION>
INTEREST
RATE INTEREST PERIOD PAYMENT DATE RECORD DATE
<S> <C> <C> <C>
Daily* First Business Day of each First Business Day of the Last Business Day before
calendar month through the day next succeeding Interest Interest Payment Date
prior to the first Business Day of Period
the next succeeding calendar month
Weekly* First Business Day of each First Business Day of the Last Business Day before
calendar month through the day next succeeding Interest Interest Payment Date
prior to the first Business Day of Period
the nextsucceeding calendar month
Commercial Paper From one to 365 days as Day after the last day of Last Business Day before
determined for each Bond Commercial Paper Period Interest Payment Date
pursuant to Section 2.02(a)(3) of
the Indenture ("COMMERCIAL
PAPER PERIOD")
Long-Term** Six-month period or portion Next March 1 or Fifteenth of the month
thereof ending March 1 or September 1 before the Interest Payment
September 1 Date (February 15 or
August 15)***
</TABLE>
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* If there shall be a change from a Daily Rate or a Weekly Rate on a day
other than the first Business Day of a calendar month, the then current
Interest Period relating to such Daily Rate or Weekly Rate shall end on the
day immediately preceding the date on which the new interest rate on the
Bonds shall become effective, which date shall be the Interest Payment Date
for such Interest Period, for which the Record Date shall be the
immediately preceding Business Day. If such new interest rate shall be a
Daily Rate or a Weekly Rate, the first Interest Period relating thereto
shall begin on the effective date of such new interest rate and end on the
day prior to the first Business Day of the next succeeding calendar month,
for which the Interest Payment Date and the Record Date shall be as
prescribed in this Table.
** If there shall be a change from a Long-Term Interest Rate on a day other
than the day after the last day of the then current Long-Term Interest Rate
Period, or if there shall be an early termination of such Long-Term
Interest Rate Period and a new Long-Term Interest Rate shall be set, such
Long-Term Interest Rate Period
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"BUSINESS DAY" is defined in the Indenture. Any interest on this Bond which is
payable, but is not punctually paid or duly provided for on any Interest Payment
Date, will forthwith cease to be payable to the Registered Owner on the relevant
Record Date and will be paid to the Registered Owner on the fifth Business Day
preceding the date of payment of such defaulted interest.
5. METHOD OF PAYMENT. Owners must surrender Bonds to the Trustee to
collect principal at maturity or upon redemption. See "Tenders" below for the
method of collecting the payment of the purchase price of tendered Bonds.
Interest on Bonds bearing interest at a Commercial Paper Rate is payable only
upon presentation of such Bonds to the Trustee. Interest on Bonds bearing
interest at a Daily Rate, Weekly Rate or Long-Term Interest Rate will be paid to
the Registered Owner as of each Record Date by check mailed by first-class mail
on the Interest Payment Date to such Registered Owner's registered address. A
Registered Owner of $1,000,000 or more in aggregate principal amount of Bonds
may be paid interest at a Daily Rate, Weekly Rate or Commercial Paper Rate by
wire transfer to an account in the continental United States if such Registered
Owner makes written request to the Trustee (in form satisfactory to the Trustee)
at least two Business Days before the Record Date specifying the account number
and address. The notice may provide that it will remain in effect for all later
interest payments until changed or revoked by another written notice.
Principal, premium, if any, and interest will be paid in money of the United
States that at the time of payment is legal tender for
- ------------------------------------------------------------------------------
shall end on the day immediately preceding the date on which the new
interest rate shall become effective, which date shall be the Interest
Payment Date for such Long-Term Interest Rate Period, for which the Record
Date shall be 15 days prior to such Interest Payment Date or, if sooner,
the first day of such Long-Term Interest Rate Period. If such new interest
rate shall be a Daily Rate or a Weekly Rate, the first Interest Period
relating thereto shall begin on the effective date of such new interest
rate and end on the day prior to the first Business Day of the next
succeeding calendar month, for which the Interest Payment Date and the
Record Date shall be prescribed in this Table.
*** If an Interest Payment Date occurs less than 15 days after the first day of
a Long-Term Interest Rate Period, the first day of such Long-Term Interest
Rate Period is the Record Date for such Interest Payment Date.
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<PAGE>
payment of public and private debts. If any payment on the Bonds is due on a
non-Business Day, it will be made on the next Business Day, and no interest
will accrue as a result of such later payment.
6. TENDERS. "TENDER" means to require, or the act of requiring, the
Trustee to purchase a Bond at its Owner's option under the provisions of this
Section 6 at 100 percent of the principal amount thereof plus accrued interest,
if any, to the date of purchase.
DAILY RATE TENDER. When interest on the Bonds is payable at a Daily
Rate and the Book-Entry System is in effect, a Beneficial Owner of a Bond
may tender such Bond (or any portion thereof in an authorized denomination)
by delivering an irrevocable written notice or an irrevocable telephone
notice, promptly confirmed in writing, to the Remarketing Agent by 11:00
a.m., New York City time, on any Business Day, stating the principal amount
of the Bond (or portion thereof) being tendered, the name, address and
taxpayer identification number of such Beneficial Owner, payment
instructions for the purchase price and the Business Day (which may be the
date the notice is delivered) on which such Bond (or portion thereof) is to
be purchased.
When interest on the Bonds is payable at a Daily Rate and the
Book-Entry System is not in effect, an Owner of a Bond may tender such
Bond (or any portion thereof in an authorized denomination) by delivering
a notice as described above (which shall include the certificate number of
such Bond), and shall also deliver such Bond to the Remarketing Agent by
1:00 p.m., New York City time, on the date of purchase (see Section 7).
WEEKLY RATE TENDER. When interest on the Bonds is payable at a Weekly
Rate and the Book-Entry System is in effect, a Beneficial Owner of a Bond
may tender such Bond (or any portion thereof in an authorized denomination)
by delivering an irrevocable written notice or an irrevocable telephone
notice, promptly confirmed in writing, to the Remarketing Agent on any
Business Day, stating the principal amount of the Bond (or portion thereof)
being tendered, the name, address and taxpayer identification number of
such Beneficial Owner,
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<PAGE>
payment instructions for the purchase price and the date (which must be a
Business Day at least seven days after the notice is delivered) on which
such Bond (or portion thereof) is to be purchased.
When interest on the Bonds is payable at a Weekly Rate and the
Book-Entry System is not in effect, an Owner of a Bond may tender such Bond
(or any portion thereof in an authorized denomination) by delivering a
notice as described above (which shall include the certificate number of
such Bond), and shall also deliver such Bond to the Remarketing Agent by
10:00 a.m., New York City time, on the date of purchase (see Section 7).
PAYMENT OF PURCHASE PRICE. The purchase price for a tendered Bond will be
paid in immediately available funds to the Owner of the Bond by the close of
business on the date of purchase.
7. DELIVERY ADDRESS; ADDITIONAL DELIVERY REQUIREMENTS. Notices in
respect of tenders and Bonds tendered must be delivered to the Remarketing Agent
as follows:
The First National Bank of Chicago
One First National Plaza, Suite 0463
Chicago, Illinois 60670-0463
Attention: Municipal Department
Telephone: (312) 732-9274
Fax: (312) 732-8733
The address of the Remarketing Agent may be changed by notice mailed by
first-class mail to the Bondholders at their registered addresses.
All tendered Bonds must be duly endorsed for transfer or accompanied by an
instrument of transfer satisfactory to the Remarketing Agent and the Trustee
duly executed in blank by the Owner or his duly authorized attorney, with the
signature guaranteed by a bank, trust company or member firm of the New York
Stock Exchange, Inc.
LIMITATION ON TENDERS. No Bonds may be tendered while they bear interest
at a Commercial Paper Rate or a Long-Term Interest Rate or during
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<PAGE>
the existence of an Event of Default under Section 8.01(h) or (i) of the
Indenture which has led to an acceleration of the Bonds.
IRREVOCABLE NOTICE DEEMED TO BE TENDER OF BOND; UNDELIVERED BONDS. The
giving of any notice of tender by a Beneficial Owner of a Bond as provided in
Section 6 constitutes the irrevocable tender for purchase of each Bond with
respect to which such notice was given, irrespective of whether such Bond is
delivered as provided in Section 6. The determination of the Remarketing Agent
as to whether a notice of tender has been properly delivered shall be conclusive
and binding upon such Beneficial Owner. Any notice received by the Remarketing
Agent from any person reasonably believed by the Remarketing Agent to be the
Beneficial Owner of a Bond may be conclusively relied upon by the Remarketing
Agent as an effective irrevocable notice of tender for such Bond.
The Remarketing Agent may refuse to accept delivery of any Bond not duly
endorsed for transfer or for which a proper instrument of transfer has not been
provided. If any Beneficial Owner of a Bond who gives notice of tender fails to
deliver such Bond to the Remarketing Agent at the place and on the applicable
date and time specified, or fails to deliver such Bond properly endorsed or with
a proper instrument of transfer, such Bond shall constitute an Undelivered Bond
as described in the Indenture. BY ACCEPTANCE OF THIS BOND, THE OWNER AGREES TO
SELL AND SURRENDER THIS BOND, PROPERLY ENDORSED OR WITH A PROPER INSTRUMENT OF
TRANSFER, TO THE REMARKETING AGENT AFTER THE GIVING OF IRREVOCABLE NOTICE OF
TENDER FOR PURCHASE AS DESCRIBED ABOVE.
8. REDEMPTIONS. As provided below, the Company has the right to purchase
Bonds in lieu of certain redemptions. BY ACCEPTANCE OF THIS BOND, THE OWNER
AGREES TO SELL AND SURRENDER THIS BOND, PROPERLY ENDORSED OR WITH A PROPER
INSTRUMENT OF TRANSFER, TO THE COMPANY IN LIEU OF REDEMPTION UNDER THE
CONDITIONS DESCRIBED BELOW. All redemptions and purchases in lieu of redemption
will be paid in funds immediately available on the redemption or purchase date
at a redemption or purchase price of 100 percent of the principal amount of the
Bonds being redeemed or purchased (plus any premium required as provided below),
plus accrued interest, if any, to the relevant
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<PAGE>
redemption or purchase date; PROVIDED, HOWEVER, that installments of interest
which shall have become due and payable on or prior to such redemption or
purchase date shall be payable to the Owners of the Bonds being redeemed or
purchased (or any predecessor Bonds) at the close of business on the relevant
Record Date. Bonds tendered for purchase on a date after a call for
redemption but before the redemption date will be purchased pursuant to the
tender. No purchase of Bonds by or on behalf of the Company shall be deemed
to be a payment or redemption of such Bonds or of any portion thereof, and
such purchase will not operate to extinguish or discharge the indebtedness
evidenced by such Bonds.
OPTIONAL REDEMPTION DURING DAILY OR WEEKLY RATE PERIOD. When interest on
the Bonds is payable at a Daily Rate or Weekly Rate, the Bonds may be redeemed,
without premium, at the option of the Company, in whole or in part, on any
Business Day.
OPTIONAL REDEMPTION DURING LONG-TERM INTEREST RATE PERIOD. During any
Long-Term Interest Rate Period, the Bonds may be redeemed at the option of the
Company, in whole at any time or in part from time to time, as follows:
(a) until interest on the Bonds shall have been payable at the same
Long-Term Interest Rate for more than 10 consecutive years, the Bonds will
not be redeemable pursuant to this option; and
(b) after the elapse of such 10-year period, the Bonds may be
redeemed at the redemption price specified in the introductory paragraph of
this Section 8, plus a premium of two percent of the principal amount
thereof during the first year after such 10-year period, a premium of one
percent of the principal amount thereof during the second year after such
10-year period and thereafter without premium.
Upon receipt by the Trustee of a Favorable Opinion of Tax Counsel, the
redemption periods and prices required by the preceding paragraph may be changed
by the Remarketing Agent (with the written consent of the Company) with respect
to any Long-Term Interest Rate Period prior to the establishment thereof. In
order to effectuate such a change, the
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Remarketing Agent will determine and certify to the Trustee, on a date which
is no later than the date of establishment of the related Long-Term Interest
Rate, the period during which the Bonds will not be subject to redemption
(the "CALL PROTECTION PERIOD"), the redemption premium or premiums (the "CALL
PREMIUMS"), if any, applicable to the redemption of the Bonds after the Call
Protection Period and the period or periods during which the Call Premiums
shall be effective (the "CALL PREMIUM PERIODS") necessary to establish such
Long-Term Interest Rate. Such Call Protection Period, Call Premiums and Call
Premium Periods shall be established in accordance with optional call
redemption provisions which the Remarketing Agent certifies, and demonstrates
to the satisfaction of the Trustee and the Company, are generally accepted as
the standard features for obligations such as the Bonds, based on the
duration of such Long-Term Interest Rate Period.
EXTRAORDINARY OPTIONAL REDEMPTION. The Bonds may be redeemed, without
premium, at the option of the Company, in whole at any time within 180 days of
the occurrence of any of the following:
(a) all or substantially all of the Project shall be damaged or
destroyed and the Company shall determine that it is not practicable or
desirable to rebuild, repair and restore the Project; or
(b) all or substantially all of the Project shall be condemned or
such use or control thereof shall be taken by eminent domain as to render
the Project unsatisfactory to the Company for continued operation; or
(c) unreasonable burdens or excessive liabilities shall be imposed
upon the City or the Company with respect to the Project or the operation
thereof; or
(d) as a result of any changes in the Constitution of Illinois or in
the Constitution of the United States of America or of legislative or
administrative action (whether state or federal), or by final decree,
judgment or order of any court or administrative body (whether state or
federal) entered after the contest thereof by the Company in good faith,
the Loan Agreement shall have become impossible of
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<PAGE>
performance in accordance with the intent and purposes of the parties as
expressed in the Loan Agreement.
MANDATORY REDEMPTION ON DETERMINATION OF TAXABILITY. The Bonds will be
redeemed or purchased by the Company in lieu of redemption, without premium, in
whole (or in part as provided below) on any day within 120 days after the
Company receives written notice from a Beneficial Owner or former Beneficial
Owner or the Trustee of a final determination by the Internal Revenue Service or
a court of competent jurisdiction that, as a result of a failure by the Company
to perform any of its agreements in the Loan Agreement or the Tax Agreement or
the inaccuracy of any of its representations in the Loan Agreement or the Tax
Agreement, the interest paid or to be paid on any Bond (except to a "substantial
user" of the Project or a "related person" within the meaning of Section 147(a)
of the Code) is or will be includible in the gross income of the Beneficial
Owner thereof for federal income tax purposes. No such determination will be
considered final unless the Beneficial Owner or former Beneficial Owner involved
in the determination gives the Company and the Trustee prompt written notice of
the commencement of the proceedings resulting in such determination and offers
the Company, subject to the Company's agreeing to pay all reasonable expenses of
the proceedings and to indemnify such Beneficial Owner or former Beneficial
Owner against all liabilities that might result from it, the opportunity to
control the defense of the proceedings and either the Company does not agree
within 30 days to pay such reasonable expenses, to so indemnify and to control
the defense or the Company exhausts or chooses not to exhaust available
procedures to contest or obtain review of the result of the proceedings. Fewer
than all the Bonds may be redeemed if redemption of fewer than all would result
in the interest payable on the Bonds remaining Outstanding being not includible
in the gross income for federal income tax purposes of any Beneficial Owner
other than a "substantial user" or "related person." If fewer than all Bonds
are redeemed, the Trustee will select the Bonds to be redeemed as provided in
the Indenture and as may be specified in an Opinion of Tax Counsel.
MANDATORY REDEMPTION UPON A CHANGE IN THE METHOD OF DETERMINING THE
INTEREST RATE ON THE BONDS. On the effective date of any change in the
method of determining the interest rate on the Bonds, the Bonds will be
redeemed or purchased by the Company in lieu of redemption, without
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<PAGE>
premium, on the effective date of such change, but if interest on the Bonds
is payable at a Long-Term Interest Rate and if such effective date is before
the day after the last day of the then current Long-Term Interest Rate
Period, the Bonds will be redeemed or purchased at the redemption or purchase
price specified in the introductory paragraph of this Section 8, plus such
premium as would be payable at such time upon a redemption described under
"OPTIONAL REDEMPTION DURING LONG-TERM INTEREST RATE PERIOD" above.
MANDATORY REDEMPTION UPON EXPIRATION OF LETTER OF CREDIT. The Bonds will
be redeemed or purchased by the Company in lieu of redemption on the Interest
Payment Date next preceding the Expiration Date of the Letter of Credit
unless the Trustee has received notice that the Letter of Credit has been or
will be extended as provided in the Indenture. When the Bonds bear interest
at a Long-Term Interest Rate, the Bonds will be redeemed or purchased at the
percentage of their principal amount which would be payable upon a redemption
described under the paragraph "OPTIONAL REDEMPTION DURING LONG-TERM INTEREST
RATE PERIOD" above. If Bonds are to be redeemed under another paragraph of
this Section on the same day, the Bonds will be called under, and redemption
will be governed by, the other paragraph and not by this paragraph, except
that any premium required by this paragraph shall be paid upon such
redemption.
MANDATORY REDEMPTION UPON DELIVERY OF AN ALTERNATE LETTER OF CREDIT. The
Bonds will be redeemed or purchased by the Company in lieu of redemption on
the Interest Payment Date next preceding the effective date of any Alternate
Letter of Credit delivered to the Trustee. When the Bonds bear interest at a
Long-Term Interest Rate, the Bonds will be redeemed or purchased at the
percentage of their principal amount which would be payable upon a redemption
described under the paragraph "OPTIONAL REDEMPTION DURING LONG-TERM INTEREST
RATE PERIOD" above. If Bonds are to be redeemed under another paragraph of
this Section on the same day, the Bonds will be called under, and redemption
will be governed by, the other paragraph and not by this paragraph, except
that any premium required by this paragraph shall be paid upon such
redemption.
MANDATORY REDEMPTION AT BEGINNING OF A NEW LONG-TERM INTEREST RATE PERIOD.
When the Bonds bear interest at a Long-Term Interest Rate
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<PAGE>
and a new Long-Term Interest Rate Period is to be determined, the Bonds will
be redeemed or purchased by the Company in lieu of redemption, without
premium, on the first day of the new Long-Term Interest Rate Period. If such
first day is before the day after the last day of the then current Long-Term
Interest Rate Period, the Bonds will be redeemed or purchased at the
redemption or purchase price specified in the introductory paragraph of this
Section 8, plus such premium as would be payable at such time upon a
redemption described under "OPTIONAL REDEMPTION DURING LONG-TERM INTEREST
RATE PERIOD" above.
MANDATORY REDEMPTION ON EACH INTEREST PAYMENT DATE DURING COMMERCIAL PAPER
MODE. When the Bonds bear interest at a Commercial Paper Rate, each Bond will
be redeemed or purchased by the Company in lieu of redemption, without premium,
on the Interest Payment Date of such Bond. If the Bonds are also required to be
redeemed under the paragraph "MANDATORY REDEMPTION UPON A CHANGE IN THE METHOD
OF DETERMINING THE INTEREST RATE ON THE BONDS" above, the Bonds will be called
under, and the redemption will be governed by, that paragraph and not this
paragraph.
MANDATORY REDEMPTION UPON TERMINATION OF THE GROUND LEASE. The Bonds will
be redeemed as a whole, without premium, on the effective date of any
termination of the Ground Lease.
MANDATORY REDEMPTION DURING A LONG-TERM INTEREST RATE PERIOD UPON EXTENSION
OF BOND MATURITY. When the Bonds bear interest at a Long-Term Interest Rate,
the Bonds will be redeemed or purchased by the Company in lieu of redemption at
the percentage of their principal amount which would be payable upon a
redemption described under the paragraph "OPTIONAL REDEMPTION DURING LONG-TERM
INTEREST RATE PERIOD" above, on the effective date of the extension of the
maturity of the Bonds pursuant to the Company's exercise of its option under
Section 7.4(a) of the Loan Agreement.
MANDATORY REDEMPTION UPON EXTENSION OF BOND MATURITY. The Bonds will be
redeemed or purchased by the Company in lieu of redemption, without premium, on
the effective date of the extension of the maturity of the Bonds pursuant to the
Company's exercise of its option under Section 7.4(b) of the Loan Agreement.
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<PAGE>
MANDATORY REDEMPTION AT THE DIRECTION OF THE BANK. The Bonds will be
redeemed or purchased by the Company in lieu of redemption, without premium, on
a Business Day specified by the Bank (which Business Day must be no more than
four days after the receipt by the Trustee of such notice) if the Bank has
delivered to the Trustee a written notice (a) that an event of default under the
reimbursement agreement pursuant to which the Letter of Credit was issued has
occurred and (b) directing the Trustee to call all Bonds for redemption pursuant
to this paragraph.
NOTICE OF REDEMPTION. The Trustee will mail a notice of redemption by
first-class mail to each Bondholder at its registered address at least 30 days
before each redemption of the Bonds except for (a) a redemption described in
"MANDATORY REDEMPTION ON EACH INTEREST PAYMENT DATE DURING COMMERCIAL PAPER
MODE" as described above, for which no notice will be given; (b) redemptions as
described in "MANDATORY REDEMPTION UPON A CHANGE IN THE METHOD OF DETERMINING
THE INTEREST RATE ON THE BONDS" or "MANDATORY REDEMPTION AT BEGINNING OF A NEW
LONG-TERM INTEREST RATE PERIOD," for which notice of redemption will be given at
least 15 days before the redemption date if a Long-Term Interest Period is not
then in effect; PROVIDED, HOWEVER, that when the Book-Entry System is not in
effect, such notice will be mailed not more than five Business Days after
receipt by the Trustee of the Company's notice of a change in the method of
determining the interest rate on the Bonds which will result in a "MANDATORY
REDEMPTION UPON A CHANGE IN THE METHOD OF DETERMINING THE INTEREST RATE ON THE
BONDS" as described above and (c) a redemption described in "MANDATORY
REDEMPTION AT THE DIRECTION OF THE BANK" shall be given at least two days prior
to the redemption date. Failure to give any required notice of redemption as to
any particular Bonds will not affect the validity of the call for redemption of
any Bonds in respect of which no such failure has occurred. Any notice mailed
as provided in this paragraph will be conclusively presumed to have been given,
whether or not actually received by the addressee.
EFFECT OF NOTICE OF REDEMPTION. When notice of redemption is required and
duly given, or when Bonds are to be redeemed without notice, all Bonds called
for redemption will become due and payable on the redemption date at the
applicable redemption price, subject to the Company's right to purchase such
Bonds in lieu of redemption as provided
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<PAGE>
above; in any such case, when funds are deposited with the Trustee sufficient
for such redemption or for such purchase, interest on the Bonds to be so
redeemed or purchased will cease to accrue as of the date of such redemption
or purchase.
9. EXTENSION OF MATURITY OF THE BONDS. The maturity of the Bonds may be
extended at the option of the Company as provided in Section 7.4 of the Loan
Agreement. Upon compliance with all conditions to such extension contained in
Section 7.4 of the Loan Agreement, on the effective date the maturity date of
the Bonds shall for all purposes be extended to the date specified in the
Company's notice exercising such option.
10. LETTER OF CREDIT. The Bonds are initially secured by a letter of
credit issued by The First National Bank of Chicago in favor of the Trustee.
This letter of credit entitles the Trustee to draw an amount sufficient to pay
the principal of the Bonds, plus an amount equal to 45 days' interest accrued on
the Bonds at a maximum rate of 12 percent. It expires September 23, 2002, or on
the earlier occurrence of events specified in it. On its expiration, unless the
Company has provided another credit facility meeting the requirements of the
Indenture, the Bonds will be redeemed or purchased by the Company in lieu of
redemption (see "REDEMPTION" above).
11. DENOMINATIONS; TRANSFER; EXCHANGE. The Bonds are issuable in
registered form without coupons in denominations as follows: (1) when interest
is payable at a Long-Term Interest Rate, $5,000 and integral multiples of $5,000
up to $100,000 and integral multiples of $100,000 thereafter; and (2) when
interest is payable at a Daily Rate, Weekly Rate or Commercial Paper Rate,
$100,000 or any integral multiple of $100,000. An Owner may transfer or
exchange Bonds in accordance with the Indenture. The Trustee may require an
Owner, among other things, to furnish appropriate endorsements and transfer
documents and to pay any taxes and fees required by law or permitted by the
Indenture. Except in connection with the purchase of Bonds tendered for
purchased in lieu of redemption, the Trustee shall not be required to transfer
or exchange any Bond which has been called for redemption or during the period
beginning 15 days before the mailing of a notice calling the Bonds or any
portion of the Bonds for redemption and ending on the redemption date.
A-16
<PAGE>
12. PERSONS DEEMED OWNERS. The Registered Owner of this Bond will be
treated as the owner for all purposes, and all payments of principal, premium,
interest and purchase price shall be made only to or upon the written order of
the Registered Owner or the Registered Owner's legal representative.
13. UNCLAIMED MONEY. If money for the payment of principal, premium,
interest or purchase price with respect to any Bond remains unclaimed for two
years after all outstanding Bonds have become due at maturity or through
redemption, the Trustee will pay the money to or for the account of the
Company. After such payment, the persons entitled to such money must look
only to the Company (unless an abandoned property law designates another
person) and not to the Trustee, the City, the Bank or the Remarketing Agent
for payment.
14. DISCHARGE BEFORE REDEMPTION OR MATURITY. If the Company at any time
deposits with the Trustee moneys or U.S. Government Obligations as described
in the Indenture sufficient to pay at maturity or on redemption the principal
of and premium, if any, and interest on the Outstanding Bonds, and if the
Company also pays all other sums then payable by the Company under the
Indenture, the lien of the Indenture with respect to the Bonds will be
discharged. After discharge, Bondholders must look only to the deposited
moneys and securities for payment. U.S. Government Obligations means (i)
noncallable direct obligations of the United States of America for which its
full faith and credit are pledged, (ii) noncallable obligations of a person
controlled or supervised by and acting as an agency or instrumentality of the
United States of America, the payment of which is unconditionally guaranteed
as a full faith and credit obligation of the United States of America, or
(iii) securities or receipts evidencing ownership interests in obligations or
specified portions (such as principal or interest) of obligations described
in clause (i) or (ii).
15. AMENDMENT, SUPPLEMENT. Subject to certain exceptions, the
Indenture, the Loan Agreement and the Bonds may be amended or supplemented
with the consent of the Owners of a majority in aggregate principal amount of
the Bonds and any additional parity bonds then Outstanding. Any such consent
shall be irrevocable and shall bind any subsequent Owner of this Bond or any
Bond delivered in substitution for
A-17
<PAGE>
this Bond. Without the consent of any Bondholder, the City may amend or
supplement the Indenture, the Loan Agreement and the Bonds as described in
the Indenture, among other things, to cure any ambiguity, inconsistency or
formal defect or omission, to provide for the issuance of additional parity
bonds, to provide for uncertificated Bonds in addition to or in place of
certificated Bonds, to provide for the Book-Entry System for the Bonds, to
make any change necessary to secure from a Rating Agency a rating on these
Bonds equal to the rating on the unsecured indebtedness of the Bank (or the
parent company of the Bank) or to make any change that does not materially
adversely affect the rights of any Bondholder.
16. DEFAULTS AND REMEDIES. The Indenture provides that the occurrence of
certain events constitute Events of Default. If an Event of Default has
occurred and is continuing, Bank or, with the prior consent of the Bank in
certain instances, the Trustee, or the holders of at least 25 percent in
principal amount of the Bonds and any additional parity bonds then Outstanding
may declare the principal of all the Bonds to be due and payable immediately.
An Event of Default and its consequences (including any acceleration) may be
waived as provided in the Indenture. Bondholders may not enforce the Indenture
or the Bonds except as provided in the Indenture. Except as specifically
provided in the Indenture, the Trustee may refuse to enforce the Indenture or
the Bonds unless it receives indemnity satisfactory to it. Subject to certain
limitations, Owners of a majority in aggregate principal amount of the Bonds and
any additional parity bonds then Outstanding may direct the Trustee in its
exercise of any trust or power.
17. NO RECOURSE AGAINST OTHERS. No recourse shall be had for the payment
of the principal of, or the premium, if any, and interest on, this Bond or for
any claim based hereon or upon any obligation, covenant or agreement contained
in the Indenture, the Loan Agreement or the Tax Agreement against any past,
present or future member, officer, official, director, agent or employee of the
City, as such, either directly or through the City, under any rule of law or
equity, statute or constitution or by the enforcement of any assessment or
penalty or otherwise, and all such liability of any such member, officer,
official, director, agent or employee as such is hereby expressly waived and
released as a condition of and consideration
A-18
<PAGE>
for the execution of the Indenture, the Loan Agreement, the Tax Agreement and
the issuance of the Bonds.
18. AUTHENTICATION. This Bond shall not be valid or become obligatory for
any purpose or be entitled to any security or benefit under the Indenture until
the certificate of authentication hereon shall have been duly executed by the
Trustee.
19. ABBREVIATIONS. Customary abbreviations may be used in the name of the
Registered Owner or an assignee, such as TEN COM (= tenants in common), TEN ENT
(= tenants by the entireties), JT TEN (= joint tenants with right of
survivorship and not as tenants in common), CUST (= Custodian), and U/G/M/A (=
Uniform Gifts to Minors Act).
A copy of the Indenture may be inspected at the office of the Trustee
located at 33 North LaSalle Street, 13th Floor, Chicago, Illinois 60690.
IT IS HEREBY CERTIFIED, RECITED AND DECLARED that all acts, conditions and
things required to exist, happen and be performed precedent to and in the
execution and delivery of the Indenture and the issuance of this Bond do exist,
have happened and have been performed in due time, form and manner as required
by law; and the issuance of this Bond and the issue of which it forms a part,
together with all other obligations of the City, does not exceed or violate any
constitutional or statutory limitation.
A-19
<PAGE>
IN WITNESS WHEREOF, the City of Chicago has caused this Bond to be executed
in its name by its Chief Financial Officer by his manual or facsimile signature
and its corporate seal to be hereunto affixed or printed and attested by the
manual or facsimile signature of its City Clerk.
CITY OF CHICAGO
By
------------------------------------
Chief Financial Officer
[SEAL]
ATTEST:
- -----------------------------
City Clerk
A-20
<PAGE>
TRUSTEE'S CERTIFICATE OF AUTHENTICATION
Date of Authentication: ___________________, ________.
AMERICAN NATIONAL
BANK AND TRUST
COMPANY OF CHICAGO,
Trustee, certifies that this
is one of the Bonds
referred to in the
Indenture.
By
------------------------------------
Authorized Signatory
A-21
<PAGE>
The following abbreviations, when used in the inscription on the face of the
within Bond, shall be construed as though they were written out in full
according to applicable laws or regulations:
TEN-COM as tenants in UNIF GIFT MIN ACT - ____________Custodian_________
common (Cust) (Minor)
TEN ENT- as tenants by the
entireties under Uniform Gifts to Minors
JT TEN- as joint tenants
with right of Act___________________________
survivorship and (State)
not as tenants in
common
Additional abbreviations may also be used though not in list above.
ASSIGNMENT
FOR VALUE RECEIVED, the undersigned sells, assigns and transfers unto
________________
___________________________________________________________________________
________________
PLEASE INSERT SOCIAL SECURITY OR
OTHER IDENTIFYING NUMBER OF ASSIGNEE
- -----------------------------------------------
- -----------------------------------------------
___________________________________________________________________________
(Name and Address of Assignee)
___________________________________________________________________________
the within Bond and does hereby irrevocably constitute and appoint
___________________________________________________________________________
attorney to transfer the said Bond on the books kept for registration thereof
with full power of substitution in the premises.
A-22
<PAGE>
Dated: _________________________
Signature guaranteed:
__________________________________ ____________________________________
NOTICE: The signature to this
assignment must correspond with the
name of the registered owner as it
appears upon the face of the within
Bond in every particular, without
alteration or enlargement or any
change whatever. Signatures must be
guaranteed by an "eligible guarantor
institution" meeting the requirements
of the Trustee, which requirements
include membership or participation
in the Securities Transfer Agents
Medallion Program ("STAMP"), the
Stock Exchange Medallion Program
("SEMP") or the New York Stock
Exchange, Inc. Medallion Signature
Program ("MSP").
A-23
<PAGE>
EXHIBIT B
REQUISITION CERTIFICATE
$55,000,000
CITY OF CHICAGO, ILLINOIS
VARIABLE/FIXED RATE DEMAND
SPECIAL FACILITIES AIRPORT REVENUE BONDS
(CENTERPOINT O'HARE, L.L.C. PROJECT) SERIES 1997
American National Bank
and Trust Company of Chicago
33 North LaSalle Street, 13th Floor
Chicago, Illinois 60690
Attention: Corporate Trust Division
Re: $55,000,000
City of Chicago
Variable/Fixed Rate Demand
Special Facilities Airport Revenue Bonds
(CenterPoint O'Hare, L.L.C. Project) Series 1997
_______________________________________________
Pursuant to Section 4.1 of the Indenture of Trust dated as of September 1,
1997 (the "INDENTURE"), from the City of Chicago (the "CITY") to American
National Bank and Trust Company of Chicago, as Trustee, you are hereby directed
to disburse from the Project Fund established by the Indenture (the "PROJECT
FUND") the amount indicated below.
As required by the Indenture, the undersigned hereby certifies as follows:
1. This requisition number ____ from the Project Fund.
<PAGE>
2. The name and address of the person, firm or corporation, to whom the
disbursement is due and the method of payment thereof is as follows:
- -----------------------------------------------------------------------------
- -----------------------------------------------------------------------------
3. The amount to disbursed is $__________.
4. The costs of an aggregate amount set forth in this requisition have
been made or incurred or financed and were necessary for the Project and were
made or incurred in accordance with the construction contracts, plans and
specifications and building permits therefor currently in effect.
5. The amount paid or to be paid represents either (a) capitalized
interest and is to be used to pay interest on the Series 1997 Bonds, (b) a
part of the amount due and payable for Project Costs or (c), if applicable,
Non-Qualified Costs and that such payment will not be paid in advance of the
time, if any, fixed for payment and was made in accordance with the terms of
any contracts applicable thereto and in accordance with usual and customary
practice under existing conditions.
6. No part of the Project Costs or Non-Qualified Costs was included with
the costs referred to in any requisition previously filed with the Trustee under
the provision of the Indenture.
7. The withdrawal of moneys from the Project Fund and the use of the
property financed or reimbursed therefrom has not and will not result in a
violation of any representation, term or covenant in the Tax Agreement and any
Opinion of Tax Counsel required to be delivered as a result of changes to the
Project pursuant to Section 3.2 of the Loan Agreement has been delivered to the
Trustee and the City.
8. The amount remaining in the Project Fund, together with (a) moneys
then on hand at the Company or committed to the Company which are or will be
available, and are anticipated by the Company to be applied, to pay the Project
Costs and Non-Qualified Costs and (b) expected
B-2
<PAGE>
investment earnings to be deposited into the Project Fund pursuant to the
Indenture, will, after payment of the amount requested in this requisition,
be sufficient to pay the costs of completing the Project substantially in
accordance with the construction contracts, plans and specifications and
building permits therefor, if any, currently in effect.
9. The amounts paid or to be paid as set forth in the requisition are
properly payable under the terms of the Indenture and that all conditions
precedent to payment as prescribed in the Indenture have been satisfied.
10. Paragraph 3 includes $__________ of Non-Qualified Costs. The Company
certifies that, taking into account this requisition and any requisition made on
this date from the Cost of Issuance Fund, the running total of Non-Qualified
Costs paid or reimbursed from Bond Proceeds does not exceed the lesser of
$2,165,000 or 4% of the sum of (i) amount of Bond proceeds paid or reimbursed
pursuant to all previous requisitions from the Project Fund and the Costs of
Issuance Fund and (ii) the amount of Bond proceeds requested to be paid or
reimbursed pursuant to this requisition.
B-3
<PAGE>
Attached to this requisition a list of invoices or bills of sale covering
all items for which payment is being requested issued by the manufacturers,
suppliers or other sellers of such items. The invoices or bills are available
for review by the Trustee in the offices of the Company.
Dated this ___ day of __________, 199__.
CENTERPOINT O'HARE, L.L.C.
By
-----------------------------------
Authorized Company Representative
B-4
<PAGE>
CITY OF CHICAGO
AND
CENTERPOINT O'HARE, L.L.C.
LOAN AGREEMENT
Dated as of September 1, 1997
<PAGE>
TABLE OF CONTENTS
SECTION HEADING PAGE
Recitals . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Article I Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . .1
Article II Representations. . . . . . . . . . . . . . . . . . . . . . . . . .2
Section 2.1. Representations by the City . . . . . . . . . . . . . . . .2
Section 2.2. Representations by the Company. . . . . . . . . . . . . . .2
Article III Completion and Operation of Project. . . . . . . . . . . . . . ..3
Section 3.1. Construction of Project.. . . . . . . . . . . . . . . . . .3
Section 3.2. Plans and Specifications. . . . . . . . . . . . . . . . .. 4
Section 3.3. Records.. . . . . . . . . . . . . . . . . . . . . . . . .. 4
Section 3.4. Operation of Project. . . . . . . . . . . . . . . . . . .. 4
Section 3.5. Right of Access to the Project and Inspection of Records.. 4
Section 3.6. Company Representative. . . . . . . . . . . . . . . . . .. 5
Article IV Loan of Bond Proceeds; Payments by Company; Assignment by Issuer5
Section 4.1. The Loan. . . . . . . . . . . . . . . . . . . . . . . . .. 5
Section 4.2. Payments by Company . . . . . . . . . . . . . . . . . . .. 5
Section 4.3. No Defense or Set-Off . . . . . . . . . . . . . . . . . .. 6
Section 4.4. Assignment of City's Rights . . . . . . . . . . . . . . .. 6
Section 4.5. Additional Bonds. . . . . . . . . . . . . . . . . . . . .. 6
Article V Covenants of the Company . . . . . . . . . . . . . . . . . . .. 7
Section 5.1. Trustee and City Expenses . . . . . . . . . . . . . . . .. 7
Section 5.2. No Liability of City. . . . . . . . . . . . . . . . . . .. 7
Section 5.3. Indemnification . . . . . . . . . . . . . . . . . . . . .. 7
Section 5.4. Company's Obligation with Respect to Exclusion of
Interest Paid on the Bonds. . . . . . . . . . . . . . . .. 9
Section 5.5. Covenants and Representations with Respect to Arbitrage .. 9
Section 5.6. Merger and Consolidation. . . . . . . . . . . . . . . . .. 9
Section 5.7. Taxes and Governmental Charges. . . . . . . . . . . . . ..10
Section 5.8. Agreement to Supply Letter of Credit. . . . . . . . . . ..10
Section 5.9. Ground Lease Amendments . . . . . . . . . . . . . . . . ..10
Section 5.10. No Amendment of Ground Lease. . . . . . . . . . . . . . ..10
Section 5.11. Remarketing Agreement . . . . . . . . . . . . . . . . . ..11
Article VI Defaults and Remedies. . . . . . . . . . . . . . . . . . . . ..11
Section 6.1. Remedies. . . . . . . . . . . . . . . . . . . . . . . . ..11
Section 6.2. Certain Fees and Expenses . . . . . . . . . . . . . . . ..11
-i-
<PAGE>
Section 6.3. No Remedy Exclusive . . . . . . . . . . . . . . . . . . . 11
Section 6.4. Waiver. . . . . . . . . . . . . . . . . . . . . . . . . . 12
Article VII Special Options and Obligations. . . . . . . . . . . . . . . . 12
Section 7.1. Obligation to Prepay. . . . . . . . . . . . . . . . . . . 12
Section 7.2. Option to Prepay. . . . . . . . . . . . . . . . . . . . . 12
Section 7.3. Option to Change Modes. . . . . . . . . . . . . . . . . . 12
Section 7.4. Additional Company Options. . . . . . . . . . . . . . . . 12
Article VIII Miscellaneous. . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.1. Notices . . . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.2. Assignments . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.3. Amendments. . . . . . . . . . . . . . . . . . . . . . . . 13
Section 8.4. Right of Company to Perform City's Agreements . . . . . . 14
Section 8.5. Applicable Law. . . . . . . . . . . . . . . . . . . . . . 14
Section 8.6. Severability. . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.7. Counterparts. . . . . . . . . . . . . . . . . . . . . . . 14
Section 8.8. Term of Loan Agreement. . . . . . . . . . . . . . . . . . 14
Section 8.9. No Personal Liability . . . . . . . . . . . . . . . . . . 14
Section 8.10. City's Obligations Limited. . . . . . . . . . . . . . . . 14
-ii-
<PAGE>
LOAN AGREEMENT
THIS LOAN AGREEMENT, made and entered into as of the first day of
September 1, 1997, by and between the CITY OF CHICAGO (the "CITY"), a home
rule unit duly organized and validly existing under the laws of the State of
Illinois, and CENTERPOINT O'HARE, L.L.C. (the "COMPANY"), a limited liability
company duly organized and validly existing under the laws of the State of
Illinois.
WITNESSETH:
WHEREAS, the City is a home rule unit of local government, duly organized
and validly existing under the laws of the State of Illinois, and, in
accordance with the provisions of Section 6(a) of the 1970 Constitution of
the State of Illinois, is authorized to issue bonds for the purpose of
financing a portion of the costs of funding the designing, constructing,
rehabilitating, furnishing and equipping and leasing of air cargo facilities
used for the receiving and storing of cargo being transported at
Chicago-O'Hare International Airport (the "AIRPORT") and other incidental
uses and other improvements related to the operation of the Airport to be
operated by the Company (the "PROJECT"); and
WHEREAS, the City intends to issue its Variable/Fixed Rate Demand Special
Facilities Airport Revenue Bonds (CenterPoint O'Hare Project) Series 1997 in
the aggregate principal amount of $55,000,000 (the "BONDS") and loan the
proceeds to the Company; and
WHEREAS, all Bonds issued under the Indenture, as hereinafter defined,
will be secured by a pledge of certain of the City's rights under this Loan
Agreement;
NOW, THEREFORE, for and in consideration of the premises and the mutual
covenants hereinafter contained, the parties hereto formally covenant, agree
and bind themselves as follows, to wit:
<PAGE>
ARTICLE I
DEFINITIONS
All words and terms defined in Article I of the Indenture shall have the
same meanings in this Loan Agreement. In addition, the following words and
terms shall have the following meanings when used in this Loan Agreement:
"BONDS" means the Series 1997 Bonds defined in the Indenture.
"INDENTURE" means the Indenture of Trust dated as of September 1, 1997,
as amended or supplemented from time to time in accordance with its terms,
between the City and American National Bank and Trust Company of Chicago, as
trustee, pursuant to which the Bonds are authorized to be issued.
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ARTICLE II
REPRESENTATIONS
SECTION 2.1. REPRESENTATIONS BY THE CITY. The City makes the following
representations as the basis for the undertakings on its part contained in
this Loan Agreement:
(a) The City (1) is a municipal corporation and a home rule unit of
local government duly organized and existing under the laws of the State
and (2) has full power and authority to enter into this Loan Agreement,
the Indenture and the Tax Agreement and to issue the Bonds.
(b) Each of this Loan Agreement, the Bonds, the Indenture and the
Tax Agreement has been duly authorized, executed and delivered by the
City and each constitutes the legal, valid and binding obligation of the
City enforceable against the City in accordance with its terms, except to
the extent that the enforcement thereof may be limited by laws relating
to bankruptcy, insolvency, reorganization, moratorium or other similar
laws and equitable principles of general application affecting the rights
and remedies of creditors and secured parties.
(c) So long as any of the Bonds remain outstanding and except as
may be authorized by the Indenture, the City will not issue or sell any
bonds or obligations, other than the Bonds or Additional Bonds, the
principal of or interest on which will be payable from the property
described in the granting clause of the Indenture.
SECTION 2.2. REPRESENTATIONS BY THE COMPANY. The Company makes the
following representations as the basis for the undertakings on its part
contained in this Loan Agreement:
(a) The Company is a limited liability company duly organized,
validly existing and in good standing under the laws of the State, has
full corporate power to enter into, and by proper corporate action has
duly authorized (1) the execution and delivery of this Loan Agreement,
the Reimbursement Agreement, the Tax Agreement and
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the Ground Lease Amendment and (2) the assumption of the Ground Lease
by the Company.
(b) The execution and delivery of this Loan Agreement, the
Reimbursement Agreement and the Tax Agreement by the Company and the
performance of the Company's obligations thereunder and hereunder will
not conflict with or result in a breach of any of the terms or provisions
of, or constitute a default under the terms of Company's Certificate of
Formation, as amended, the Ground Lease, or any indenture, mortgage deed
of trust, loan agreement or other agreement or instrument to which the
Company is bound or to which any of the property or assets of the Company
is subject, which would cause a material adverse change in the financial
position or results of operations of the Company or affect the validity
of this Loan Agreement, the Reimbursement Agreement, the Tax Agreement or
the Ground Lease or the legal authority of the Company to comply with the
terms thereof or hereof; nor will such action result in a violation of
any statute or any rule or regulation of any court or governmental agency
or other body in the United States having jurisdiction over the Company
or any of its properties which would cause a material adverse change in
the financial position or results of operations of the Company or affect
the validity of this Loan Agreement, the Reimbursement Agreement, the
Ground Lease, the Tax Agreement or the legal authority of the Company to
comply with the terms thereof or hereof.
(c) This Loan Agreement, the Reimbursement Agreement, the Ground
Lease Amendment, the Tax Agreement and the assumption of the Ground Lease
by the Company have each been duly authorized, executed and delivered by
the Company and each constitutes the legal, valid and binding obligation
of the Company enforceable against the Company in accordance with its
terms, except to the extent that the enforcement thereof may be limited
by laws relating to bankruptcy, insolvency, reorganization, moratorium or
other similar laws and equitable principles of general application
affecting the rights and remedies of creditors and secured parties.
(d) There is no litigation or proceeding pending, or to the
knowledge of the Company after due inquiry threatened, against the
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Company, or affecting it, which could adversely affect the validity of this
Loan Agreement, the Ground Lease Amendment, the Tax Agreement or the
ability of the Company to comply with its obligations under either such
document.
(e) The information contained in the Tax Agreement and the Project
Certificate is, and at the time of issuance of the Bonds will be, true
and correct in all material respects.
(f) The Project consists and will consist of the facilities
described in Exhibit A, and no changes shall be made in the Project
except as permitted by Section 3.2.
(g) To the knowledge of the officers of the Company executing this
Loan Agreement, no member, director, officer or official of the City has
any interest (financial, employment or other) in the Company or the
transactions contemplated by this Loan Agreement which is prohibited by
law.
ARTICLE III
COMPLETION AND OPERATION OF PROJECT
SECTION 3.1. CONSTRUCTION OF PROJECT. The Company will complete the
construction, installation and equipping of the Project as soon as
practicable in accordance with the plans and specifications kept, and as they
may be revised, under the following Section. The City does not represent
that the proceeds of the Bonds will be sufficient to pay the costs of
completing the Project. If the proceeds from the Bonds are not sufficient
for completion of the Project, the Company will complete the Project with its
own funds and will not thereby be entitled to reimbursement of any amount
from the City, the Trustee or any Bondholder or to any reduction of any
amounts payable by the Company hereunder.
SECTION 3.2. PLANS AND SPECIFICATIONS. Subject to the provisions of
the next paragraph and to any applicable provisions of the Ground Lease, the
Company may make, authorize or permit changes or amendments in the components
of the Project or may determine not to complete any portion of the Project
for which Bond proceeds (and investment income thereon) are available, or may
finance such portion of the Project from any other source;
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PROVIDED, HOWEVER, that Bond proceeds (and investment income) otherwise
allocable to such portion of the Project must be used either (i) to pay costs
of the remaining parts of the Project, (ii) to pay the cost of other air
cargo facilities as approved by an Opinion of Tax Counsel, subject to the
provisions of the next paragraph or (iii) to pay or redeem principal on the
Bonds in accordance with the provisions of this Loan Agreement and the
Indenture, PROVIDED that in the case of (ii) or (iii), the Company shall have
received a Favorable Opinion of Tax Counsel with respect to such application.
If the Company determines not to complete any portion of the Project or to
fund such portion from any other source, such portion of the Project shall no
longer be deemed to be within the meaning of the term "Project" for any
purpose of this Loan Agreement or the Indenture.
No change or amendment in the components of the Project pursuant to the
terms of the preceding paragraph shall be made if such change or amendment
causes the economic life of the Project to be reduced unless the Company
shall have delivered to the Trustee a Favorable Opinion of Tax Counsel with
respect to such change or amendment. A copy of each such change in or
amendment to EXHIBIT A hereof shall be filed promptly with the City and the
Trustee. In addition, the Company shall deliver to the Trustee a certificate
of a Company Representative detailing the proposed changes.
SECTION 3.3. RECORDS. The Company will maintain such records in
connection with the Project as are required to permit ready identification of
the Project and items of Project Costs.
SECTION 3.4. OPERATION OF PROJECT. The Company will operate the
Project, or cause the Project to be operated, as airport facilities as
contemplated by Section 142(a)(1) of the Code and as Airport Support Services
within the meaning of such term in the Ground Lease.
SECTION 3.5. RIGHT OF ACCESS TO THE PROJECT AND INSPECTION OF RECORDS.
The Company agrees that during the term of this Loan Agreement the City, the
Trustee and the duly authorized agents of either of them shall have the right
(but not any duty or obligation) at all reasonable times upon reasonable
notice to the Company during normal business hours to inspect the records
maintained by the Company pursuant to Section 3.3 and to enter upon the site
of the Project to examine and inspect the Project; PROVIDED, HOWEVER, that
this right is subject to federal and State laws and regulations
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applicable to the Project Site. The rights of inspection and access hereby
reserved to the City and the Trustee may be exercised only after such agent
shall have executed release of liability and secrecy agreements if requested
by the Company in the form then currently used by the Company, and nothing
contained in this Section or in any other provision of this Loan Agreement
shall be construed to entitle the City or the Trustee to any information or
inspection involving the confidential know-how of the Company.
Notwithstanding the foregoing, the City shall have all rights of access and
inspection to the Project as are set forth in the Ground Lease.
SECTION 3.6. COMPANY REPRESENTATIVE. The Company has appointed the
Company Representative for the purpose of acting on behalf of the Company and
taking all actions and making all certificates required to be taken and made
by a Company Representative under the provisions of this Loan Agreement and
the Indenture. The Company may appoint alternative Company Representatives
to take any such action or make any such certificate if the same is not taken
or made by the Company Representative. In the event any of said persons, or
any successor appointed pursuant to the provisions of this Section, should
resign or become unavailable or unable to take any action or make any
certificate provided for in this Loan Agreement or the Indenture, another
Company Representative or alternate Company Representative shall thereupon be
appointed by the Company. If the Company fails to make such designation
within 10 days following the date when the then incumbent resigns or becomes
unavailable or unable to take any of the said actions, the Treasurer of the
Company shall serve as the Company Representative.
Whenever under the provisions of this Loan Agreement or the Indenture the
approval of the Company is required or the City is required to take some
action at the request of the Company, such approval or such request shall be
made by the Company Representative or alternate Company Representative unless
otherwise specified in this Loan Agreement or the Indenture, and the City or
the Trustee shall be authorized to act on any such approval or request.
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ARTICLE IV
LOAN OF BOND PROCEEDS; PAYMENTS BY COMPANY;
ASSIGNMENT BY CITY
SECTION 4.1. THE LOAN. The City agrees, upon the terms and conditions
in this Loan Agreement, to lend to the Company the proceeds received by the
City from the sale of the Bonds, in order to pay Project Costs, by depositing
the same as provided in Section 4.01 of the Indenture.
SECTION 4.2. PAYMENTS BY COMPANY. The Company agrees to pay to the
Trustee, as assignee of the City, for so long as any Bonds are Outstanding,
on or before each date upon which the principal of, or the premium, if any,
or interest on, the Bonds is payable in accordance with the provisions of the
Indenture, a sum which, together with other money available therefor under
the Indenture, will equal the sum of the principal of, and the premium, if
any, and interest on, the Bonds which will be payable on such date (whether
at maturity or by redemption or otherwise in accordance with the terms of the
Indenture). The Company will further pay to the Trustee, on each day on
which a payment of the purchase price of a tendered Bond shall become due and
payable, an amount which, together with other money held by the Trustee under
the Indenture and available therefor, will enable the Trustee to make such
payment in full in a timely manner. In furtherance of the foregoing, so long
as any Bonds are Outstanding, the Company will pay or cause to be paid all
amounts required to prevent any deficiency or default in any payment of the
principal of, the premium, if any, and interest on, and the purchase price
of, the Bonds, including any deficiency caused by an act or failure to act by
the Trustee, the Company, the City, the Remarketing Agent or any other
person. In the event the Company should fail to make or cause to be made any
of the payments required in this Section 4.2, the payment so in default shall
continue as an obligation of the Company until the amount in default shall
have been fully paid, and the Company agrees to pay the same with interest
thereon (to the extent permitted by law) until paid at the rate or rates then
borne by the Bonds.
SECTION 4.3. NO DEFENSE OR SET-OFF. The obligation of the Company to
make the payments required under this Loan Agreement shall be absolute and
unconditional, without defense, recoupment or set-off by
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reason of any default by the City under this Loan Agreement, the Ground Lease
or under any other agreement between the Company and the City or for any
other reason, including, without limitation, any acts or circumstances that
might constitute failure of consideration, destruction of or damage to the
Project, condemnation or failure of title of the Project or the Project Site,
commercial frustration of purpose or failure of the City to perform and
observe any agreement, whether express or implied, or any duty, liability or
obligation to the Company, whether arising out of or connected with this Loan
Agreement, it being the intention of the parties that the payments required
by this Loan Agreement will be paid in full when due without any delay or
diminution whatsoever.
SECTION 4.4. ASSIGNMENT OF CITY'S RIGHTS. As security for the payment
of the Bonds, the City will upon the issuance of the Bonds pledge and assign
to the Trustee the City's rights under this Loan Agreement (except the right
to receive payments, if any, under Sections 5.1, 5.3, 6.2 and 8.4). The City
directs the Company, and the Company agrees, to pay to the Trustee at its
principal corporate trust office all payments due and payable to the Trustee
hereunder. The Company will make payments directly to the Trustee without
defense or set-off by reason of any dispute between the Company and the
Trustee or the City. The City and the Company hereby agree that the Trustee
as assignee may enforce any and all rights and remedies hereunder, but the
City retains the right to proceed in its own name against the Company for the
enforcement or the specific performance of any obligation of the Company
under Sections 5.1, 5.3, 6.2 and 8.4.
SECTION 4.5. ADDITIONAL BONDS. Subject to approval of the City
Council, Additional Bonds may be authorized by the City upon the request of
the Company for the purpose of (i) completing the Project, (ii) financing the
cost of expansion to or improvements of the Project which the Company may
deem necessary or desirable, (iii) funding the cost of the Company's exercise
of its option to extend the term of the Ground Lease pursuant to Section 1(b)
of the Ground Lease Amendment, or (iv) refunding the Bonds. Additional Bonds
may be issued if the Company and the City enter into an amendment to this
Loan Agreement to describe any additional properties not described in Exhibit
A hereto with respect to (ii) above, and to provide for such increase in the
loan payments to be paid by the Company to the City as shall be sufficient to
pay the principal of, premium, if any, and
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interest on the Additional Bonds. The City will deposit the proceeds from the
sale of Additional Bonds with the Trustee as may be provided in the
supplemental indenture pertaining to such Additional Bonds.
ARTICLE V
COVENANTS OF THE COMPANY
SECTION 5.1. TRUSTEE AND CITY EXPENSES. (a) The Company agrees that
there shall be paid to the City as an administrative fee on the date of
issuance of the Bonds an amount equal to one-quarter of one percent of the
principal amount of the Bonds. Such amount shall be paid from Bond proceeds
from the Costs of Issuance Fund;
(b) the Company agrees to pay to the Trustee until the principal of,
and the premium, if any, and interest on, all Outstanding Bonds shall have
been fully paid:
(i) an amount, as previously agreed upon in writing between
the Company and the Trustee, equal to the annual fee of the Trustee
for its ordinary services, plus its ordinary expenses, as and when
the same become due;
(ii) the reasonable fees, charges and expenses of the Trustee for
its necessary extraordinary services, as and when the same become due;
and
(iii) the cost of registering and transferring any Bonds under the
provisions of the Indenture.
The Company will pay all reasonable expenses of the City incurred in
connection with this Loan Agreement and the Indenture or arising out of the
issuance of the Bonds, including the fees of Rudnick & Wolfe, special counsel
to the City.
SECTION 5.2. NO LIABILITY OF CITY. The Bonds, together with premium,
if any, and interest thereon, shall be limited obligations of the City giving
rise to no pecuniary liability of the City nor a charge against its general
credit or taxing powers and shall be payable by the City solely out of the
amounts payable by the Company pursuant to Section 4.2 of this Loan
Agreement. No Owner or Beneficial Owner of any Bond shall have
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the right to compel any exercise of the taxing power of the City or the State
or any political subdivision thereof to pay the Bonds, the interest or
premium, if any, thereon and the Bonds shall not constitute an indebtedness
of the City or the State or any political subdivision thereof or a loan of
credit thereof within the meaning of any constitutional or statutory
provision or limitation of indebtedness applicable to the City. No moneys
payable by the Company to the City under the Ground Lease are assigned
hereunder. Neither the Trustee, the Owners nor the Beneficial Owners shall
have any interest in the Ground Lease or any amounts payable thereunder. The
Bonds are not secured by the Project, nor are the Bonds secured by any
property or improvements at the Airport or any revenues derived by the City
from the operation of the Airport generally.
SECTION 5.3. INDEMNIFICATION. The Company will pay, and will protect,
indemnify and save the City harmless from and against any and all
liabilities, losses, damages, costs and expenses (including attorneys fees
and expenses of the Company and the City), causes of action, suits, claims,
demands and judgments of whatsoever kind and nature (including those arising
or resulting from any injury to or death of any person or damage to Project)
arising out of the following except when caused by the City's gross
negligence or willful misconduct as determined by final judicial proceedings:
(a) the financing, design, construction and installation of the
Project;
(b) the use by the Company of the Project;
(c) violation by the Company of any agreement, warranty, covenant or
condition of this Loan Agreement;
(d) violation by the Company of any other contract, agreement or
restriction relating to the Project;
(e) violation by the Company of any law, ordinance, regulation or
court order applicable to the Project or the ownership, occupancy or use
thereof.
(f) compliance by the Company with Sections 5.4 and 5.5 hereof and
compliance by the City with Section 6.04 of the Indenture
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or any tax or project certificate delivered in connection with issuance
the of Bonds (including in each case, but not limited to, the use of
insurance or condemnation proceeds in a manner different from that set
forth in the Ground Lease or any restriction or limitation imposed on the
use of the "Project" or the "Premises" as defined in the Ground Lease or
any portion thereof following any termination, in whole or in part of the
Ground Lease).
The City shall promptly notify the Company in writing of any claim or
action brought against the City in respect of which indemnity may be sought
against the Company, setting forth the particulars of such claim or action,
and the Company will assume the defense thereof, including the employment
counsel, and the payment of all expenses. The City may employ separate
counsel in any such action and participate in the defense thereof, but the
fees and expenses of such counsel shall not be payable by the Company unless
such employment has been specifically authorized by the Company or unless the
City concludes that there may be defenses available to it that are different
from or in addition to those available to the Company.
So long as no Event of Default has occurred and is continuing under the
Ground Lease or the Loan Agreement, the Company shall have the right to
exercise its option to redeem Bonds in lieu of the City taking or refraining
from taking an action described in the opinion of nationally recognized bond
counsel delivered in connection with Section 6.04 of the Indenture or any tax
or project certificate delivered in connection with the Bonds, if such
optional redemption shall be sufficient, in the opinion of such nationally
recognized bond counsel to cause any tax or use restriction imposed upon the
related portion of the Project or Premises (as each are defined in the Ground
Lease) or upon proceeds belonging to the City by reason of the Bonds to be no
longer applicable.
Except as provided below, the indemnity provided for in this Section 5.3
shall be independent of, and shall not supersede or in any way limit, any
indemnities to which the City may be entitled under the provisions of the
Ground Lease, the Bond Placement Agreement relating to the Bonds and any
other agreements between the City and the Company; provide that, as regards
clauses (b) and (d) above, in the event that and only to the extent that the
claim or action in respect to which the indemnity may be sought
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against the Company arises from matters independent of the issuance of the
Bonds and which matters are directly covered by provisions relating to
indemnification and hazardous substances in the Ground Lease, then such
provisions in the Ground Lease shall control.
The Company agrees to indemnify the Trustee, and to hold it harmless
against, any loss, liability or expense incurred without negligence or bad
faith on its part arising out of or in connection with the acceptance or
administration of the Indenture, including the costs and expenses of
defending itself against any claim or liability in connection with the
exercise or performance of any of its powers or duties under the Indenture.
SECTION 5.4. COMPANY'S OBLIGATION WITH RESPECT TO EXCLUSION OF INTEREST
PAID ON THE BONDS. Notwithstanding any other provision hereof or in the
Ground Lease, the Company covenants and agrees that it will not knowingly
take or authorize or permit, to the extent such action is within the control
of the Company, any action to be taken with respect to the Project, the
proceeds of the Bonds (including investment earnings thereon) or any
insurance, condemnation or other proceeds derived directly or indirectly in
connection with the Project which will result in the loss of the exclusion of
interest on the Bonds from federal gross income under Section 103 of the Code
(except for any Bond during any period while such Bond is held by a person
referred to in Section 147(a) of the Code and except for Bonds which may be
remarketed as taxable Bonds as provided in the first sentence of Section
3.08(d) of the Indenture); and the Company also will not knowingly omit to
take any action in its power which, if omitted, would cause such result. The
preceding sentence shall control in case of conflict or ambiguity with any
other provision of this Loan Agreement. The Company covenants for the
benefit of the Beneficial Owners to comply with all of the requirements of
Section 6.03 of the Indenture.
The Company covenants and agrees to notify the Trustee and the City of
the occurrence of any event of which the Company has notice and which event
would require the Company to prepay the amounts due hereunder because of a
redemption of the Bonds upon a determination of taxability.
SECTION 5.5. COVENANTS AND REPRESENTATIONS WITH RESPECT TO ARBITRAGE.
The Company covenants and represents to the City and to and for the benefit
of the Beneficial Owners that so long as any of the Bonds
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remain Outstanding, moneys on deposit in any fund in connection with the
Bonds, whether such moneys were derived from the proceeds of the sale of the
Bonds or from any other sources, will not be used in a manner which will
cause the Bonds to be "arbitrage bonds" within the meaning of Section 148 of
the Code and any lawful regulations promulgated thereunder, as the same exist
on this date or may from time to time hereafter be amended, supplemented or
revised. The Company also covenants to the City and for the benefit of the
Beneficial Owners to comply with all of the provisions of the Tax Agreement.
The Company reserves the right, however, to make any investment of such
moneys permitted by State law, if, when and to the extent that said Section
148 or regulations promulgated thereunder shall be repealed or relaxed or
shall be held void by final judgment of a court of competent jurisdiction,
but only upon receipt of a Favorable Opinion of Tax Counsel with respect to
such investment.
SECTION 5.6. MERGER AND CONSOLIDATION. The Company agrees that during
the term of this Loan Agreement it will maintain its corporate existence,
will not dissolve or otherwise dispose of all or substantially all of its
assets and will not consolidate with or merge into another corporation,
business entity or trust (each such corporation, business entity or trust is
herein called a "CORPORATION") or permit one or more Corporations to
consolidate with or merge into it unless the Company is the surviving,
resulting or transferee Corporation, as the case may be; provided that the
Company may, without violating the agreements contained in this Section,
consolidate with or merge into another domestic Corporation (I.E., a
Corporation incorporated or created and existing under the laws of the United
States of America or any state, district or territory thereof) or permit one
or more other domestic Corporations to consolidate with or merge into it, or
sell or otherwise transfer to another domestic Corporation all or
substantially all of its assets as an entirety and thereafter dissolve,
notwithstanding that the Company is not the surviving, resulting or
transferee Corporation, as the case may be, if the surviving, resulting or
transferee Corporation (i) is a domestic Corporation qualified to do business
in the State and (ii) assumes in writing all of the obligations of the
Company under this Loan Agreement and the Tax Agreement. Notwithstanding the
foregoing, any such transaction shall be subject to the terms of the Ground
Lease and shall be subject to the restrictions, prohibitions and conditions
contained in the Ground Lease.
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SECTION 5.7. TAXES AND GOVERNMENTAL CHARGES. The Company will promptly
pay, as the same become due, all lawful taxes, assessments and governmental
charges of any kind whatsoever including, without limitation, income,
profits, property and excise taxes levied or assessed by any federal, state
or municipal government upon the City with respect to any payments under this
Loan Agreement. The City agrees to give the Company prompt notice of any
such taxes, assessments or governmental charges.
The Company may, at its expense and in its own name and behalf, or in the
name and behalf of the City if it is a necessary party thereto, contest in
good faith any such taxes, assessments and governmental charges and, in the
event of any such contest, permit the taxes, assessments or governmental
charges so contested to remain unpaid during the period of such contest and
any appeal therefrom, provided during such period enforcement of any such
contested item shall be effectively stayed. The City, at the expense of the
Company, will cooperate fully with the Company in any such contest.
SECTION 5.8. AGREEMENT TO SUPPLY LETTER OF CREDIT. The Company shall
provide for the delivery of a Letter of Credit meeting the requirements of
Section 5.01 of the Indenture to the Trustee upon the original issuance of
the Bonds.
SECTION 5.9. GROUND LEASE AMENDMENTS. The Company agrees that the
provisions of Section 1 of the Ground Lease Amendment may not be amended, and
that it will not otherwise extend the term of the Ground Lease unless, in
each case, a Favorable Opinion of Tax Counsel is delivered to the Trustee
with respect to such amendment or extension.
SECTION 5.10. NO AMENDMENT OF GROUND LEASE. This Loan Agreement shall
not be deemed to amend or in any way supersede or alter the Ground Lease;
although by its terms, the provisions of Section 5.4 could, under certain
circumstances, require acts of the Company inconsistent with the Ground
Lease. Nothing herein shall limit the City's exercise of any right or remedy
under the Ground Lease in the event of a default by the Company under the
Ground Lease.
SECTION 5.11. REMARKETING AGREEMENT. The Company agrees in the
Remarketing Agreement to cooperate with the Remarketing Agent to
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comply with applicable provisions of Rule 15c2-12 of the Exchange Act (the
"RULE"). The Company hereby covenants to provide notice to the City, the
Trustee and any institution which is subject to the Rule and which is then
making a market in the Bonds of any material events requiring disclosure,
pursuant to any undertaking to provide continuing information required by the
Rule.
ARTICLE VI
DEFAULTS AND REMEDIES
SECTION 6.1. REMEDIES. Whenever any Event of Default has occurred and
is continuing, the Trustee may take whatever reasonable action may appear
necessary or desirable to collect the payments then due and to become due or
to enforce performance of any agreement of the Company in this Loan Agreement.
In addition to such remedies, the City (on its behalf to enforce the
Unassigned Rights and without the consent of the Trustee) or the Trustee, as
assignee of certain rights of the City hereunder, may at any time take any
action at law or in equity to collect any payments then due, or to enforce
performance and observance of any obligation, agreement or covenant of the
Company under this Loan Agreement, it being understood that the City shall
not be obligated to exercise any such remedies.
Any amounts collected pursuant to action taken under this Section shall
be applied in accordance with the Indenture.
SECTION 6.2. CERTAIN FEES AND EXPENSES. If an Event of Default occurs
and the City employs attorneys or incurs other expenses for the collection of
payments due under this Loan Agreement or for the enforcement of performance
or observance of any obligation, agreement or covenant on the part of the
Company contained in this Loan Agreement, the Company will on demand therefor
reimburse the reasonable fees of such attorneys and other reasonable expenses
so incurred.
SECTION 6.3. NO REMEDY EXCLUSIVE. No remedy herein conferred upon or
reserved to the City or the Company is intended to be exclusive of any other
available remedy or remedies, but each and every such remedy shall be
cumulative and shall be in addition to every other remedy given
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under this Loan Agreement or now or hereafter existing at law or in equity or
by statute. No delay or omission to exercise any right or power accruing upon
any default shall impair any such right or power or shall be construed to be
a waiver thereof, but any such right or power may be exercised from time to
time and as often as may be deemed expedient. In order to entitle the City
to exercise any remedy reserved to it in this Article VI, it shall not be
necessary to give any notice, other than such notice as may be herein
expressly required. Such rights and remedies as are given the City hereunder
shall also extend to the Trustee, and the Trustee, as assignee of the City
(except for the Unassigned Rights) and the Bondholders and the Beneficial
Owners, subject to the provisions of the Indenture, shall be entitled to the
benefit of all covenants and agreements contained in this Loan Agreement.
SECTION 6.4. WAIVER. In the event that any agreement contained in this
Loan Agreement shall be breached by either party and such breach shall
thereafter be waived by the other party with the consent of the Trustee, such
waiver shall be limited to the particular breach so waived and shall not be
deemed to waive any other breach under this Loan Agreement.
ARTICLE VII
SPECIAL OPTIONS AND OBLIGATIONS
SECTION 7.1. OBLIGATION TO PREPAY. The Company shall, under Section
4.2, make payments on such dates and in such amounts as will enable the City
to redeem Bonds called for redemption pursuant to the Indenture.
SECTION 7.2. OPTION TO PREPAY. Whenever the Bonds are subject to
optional redemption, the City will, but only upon the direction of the
Company, redeem the same in accordance with such direction. The Company
shall, pursuant to Section 4.2, make payment on the redemption date specified
of an amount sufficient to pay the principal of, and the premium, if any, and
interest on, the Bonds so called for redemption.
SECTION 7.3. OPTION TO CHANGE MODES. The Company shall have, and is
hereby granted, the option to elect from time to time to change the method of
determining the interest rate on the Bonds in accordance with the provisions
of the Indenture.
-17-
<PAGE>
(a) The Company shall have the option to extend the stated maturity of
the Bonds from the initial Bond maturity of September 1, 2032 to August 1,
2042. This option cannot be exercised during a Long-Term Interest Rate
Period unless the Bonds are then callable under the paragraph captioned
"OPTIONAL REDEMPTION DURING LONG-TERM INTEREST RATE PERIOD" as set forth in
Section 8 of the Bonds, but may be exercised in conjunction with the
commencement of a new Long-Term Interest Rate Period. The Company shall give
the City and the Trustee written notice of its intent to exercise this
option. Such notice shall be accompanied by a Favorable Opinion of Tax
Counsel and shall state an effective date. The effective date of such
extension shall be set forth in the notice and may not be earlier than 30
days after the giving of such notice, but must be no later than the day
before the Bonds are then scheduled to mature. On the effective date the
Company must deliver to the Trustee a Favorable Opinion of Tax Counsel. If
such opinion is received on the effective date, the maturity of the Bonds
shall be August 1, 2042 as provided in Section 9 of the Bonds. Promptly after
the effective date, the Trustee will mail notice to Bondholders of the
extension of the maturity.
(b) The Company shall have the option to extend the maturity of the
Bonds to the extended term of the Ground Lease as such term may be extended
by the Company pursuant to Section 1(b) of the Ground Lease Amendment (the
"EXTENDED GROUND LEASE TERMINATION DATE"). The Company shall give the City
and the Trustee written notice of its intent to exercise this option no later
than 90 days prior to the stated maturity of the Bonds (or the extended
maturity of the Bonds if the Company has exercised the option set forth in
(a) above). Such notice shall be accompanied by a Favorable Opinion of Tax
Counsel (it being understood that the opinion relating to the tax exemption
of the Bonds may be limited to interest paid on the Bonds prior to the
effective date). The effective date of such extension shall be the day
before the date the Bonds are then scheduled to mature. On the effective
date the Company must deliver to the Trustee such Favorable Opinion of Tax
Counsel (it being understood that the opinion relating to the tax exemption
of the Bonds may be limited to interest paid on the Bonds prior to the
effective date). If such opinion is received on the effective date, the
maturity of the Bonds shall be the Extended Ground Lease Termination Date as
provided in Section 9 of the Bonds. After the effective date the
-18-
<PAGE>
Bonds may be remarketed as tax-exempt Bonds only under the circumstances set
forth in Section 3.08(d) of the Indenture. Promptly after the effective date
the Trustee will mail notice to Bondholders of the extension of the maturity.
ARTICLE VIII
MISCELLANEOUS
SECTION 8.1. NOTICES. All notices, requests, certificates or other
communications shall be sufficiently given and shall be deemed given when
delivered or mailed as provided in the Indenture.
SECTION 8.2. ASSIGNMENTS. This Loan Agreement may not be assigned
except as provided herein. The City shall assign to the Trustee its rights
under this Loan Agreement as and to the extent provided by Section 4.4. The
Company may assign its rights hereunder to any transferee or any surviving or
resulting Corporation permitted by Section 5.6. In addition to the
foregoing, this Loan Agreement may be assigned in whole or in part by the
Company without the necessity of obtaining the consent of the Trustee,
subject however, to each of the following conditions:
(a) no assignment (other than pursuant to Section 5.6) shall
relieve the Company from liability for any of its obligations hereunder
in the event that its assignee does not perform, and in the event of any
such assignment the Company shall continue to remain liable for the
performance and observance of the covenants, warranties, representations
and agreements on its part herein provided to be performed and observed
to the same extent as though no assignment had been made;
(b) the assignee shall assume, in writing, the obligations of the
Company hereunder to the extent of the interest assigned; and
(c) the Company shall, at least five days prior to any such
assignment, provide the Trustee with written notice thereof and, within
five days after any such event, furnish to or cause to be furnished to
the Trustee a true and complete copy of such assignment and an executed
counterpart of the assumption of obligations agreement; and
-19-
<PAGE>
(d) the Company shall obtain the written consent of the City to such
assignment.
SECTION 8.3. AMENDMENTS. This Loan Agreement may not be amended except
by an instrument in writing signed by the parties and concurred in by the
Trustee in accordance with the Indenture.
SECTION 8.4. RIGHT OF COMPANY TO PERFORM CITY'S AGREEMENTS. The City
irrevocably authorizes and empowers the Company to perform in the name and on
behalf of the City any agreement made by the City in this Loan Agreement or
in the Indenture which the City fails to perform in a timely fashion if the
continuance of such failure could affect the tax-exempt status of the Bonds
or the validity thereof provided that the Company shall have given the City
written notice of any action the Company proposes to take and the City shall
not have cured such failure within 30 days of receipt of such notice. This
Section does not require the Company to perform any agreement of the City.
The Company covenants and agrees to pay the expenses of the City incurred
under, and to use its best efforts to cause the City to perform the
obligations of the City under, Section 6.02 of the Indenture at the expense
of the Company.
SECTION 8.5. APPLICABLE LAW. This Loan Agreement shall be governed by
and construed in accordance with the laws of the State.
SECTION 8.6. SEVERABILITY. If any provision of this Loan Agreement
shall be held invalid or unenforceable by any court of competent
jurisdiction, such holding shall not invalidate or render unenforceable any
other provision hereof.
SECTION 8.7. COUNTERPARTS. This Loan Agreement may be signed in
several counterparts, each of which shall be an original and all of which
shall constitute the same instrument.
SECTION 8.8. TERM OF LOAN AGREEMENT. When no Bonds are Outstanding
under the Indenture, the Company and the City shall not have any further
obligations under this Loan Agreement; provided that the Company's covenants
in Sections 5.4 and 5.5 shall survive so long as any Bond remains unpaid and
the Company's obligations to the City and the Trustee under Section 5.3 shall
survive the term of this Agreement and shall apply to all claims whenever
made.
-20-
<PAGE>
SECTION 8.9. NO PERSONAL LIABILITY. No covenant contained herein shall
be deemed a covenant or agreement of any official, employee or agent of the
City.
SECTION 8.10. CITY'S OBLIGATIONS LIMITED. Anything in this Loan
Agreement to the contrary notwithstanding, it is expressly understood and
agreed by the parties hereto that (a) the City may rely conclusively on the
truth and accuracy of any certificate, opinion, notice or other instrument
furnished to the City by the Trustee or the Company as to the existence of
any fact or state of affairs required hereunder to be noticed by the City;
(b) the City shall not be under any obligation hereunder to perform any
record keeping or to provide any legal services, it being understood that
such services shall be performed either by the Trustee or the Company; and
(c) none of the provisions of this Loan Agreement shall require the City to
expend or risk its own funds or otherwise to incur financial liability in the
performance of any of its duties or in the exercise of any of its rights or
powers hereunder.
Notwithstanding anything herein contained to the contrary, any obligation
that the City may incur under this Loan Agreement or under any instrument
executed in connection herewith that shall entail the expenditure of money
shall not be a general obligation of the City but shall be a limited
obligation payable solely from payments to be made by the Company hereunder.
-21-
<PAGE>
IN WITNESS WHEREOF, the City and the Company have caused this Loan
Agreement to be executed in their respective corporate names and their
respective corporate seals to be hereunto affixed and attested by their duly
authorized officers, all as of the date first above written.
CITY OF CHICAGO
By
---------------------------
Chief Financial Officer
(SEAL)
Attest:
______________________________
City Clerk
CENTERPOINT O'HARE, L.L.C.
By
------------------------
Title
(SEAL)
Attest:
______________________________
Title__________________________
All right, title and interest of the City in and to this Loan Agreement,
except for the rights of the City under Sections 5.1, 5.3, 6.2 and 8.4, have
been assigned to the Trustee pursuant to the Indenture.
-22-
<PAGE>
EXHIBIT A
DESCRIPTION OF THE PROJECT
The Project consists of the development of approximately 53 acres of
land located at O'Hare International Airport, including the acquisition,
improvement, construction and related development of a multi tenant
airfreight targeted for cargo related carriers and handlers, freight
forwarders, trucking companies and distribution firms, including the
installation of infrastructure improvements at or in connection with the site
of the Project. The Project consists of rive building phases expected to be
financed with Bond proceeds in the following amounts with the following
completion dates.
<PAGE>
FIRST AMENDMENT TO GROUND LEASE
This First Amendment to Ground Lease ("Amendment") is executed and entered
into as of the first day of September, 1997 by and between the City of Chicago,
a municipal corporation and home rule unit of local government organized and
existing under Article VII, Sections 1 and (6)(a), respectively, of the 1970
Constitution of the State of Illinois ("Landlord"), as landlord, and CenterPoint
O'Hare L.L.C., an Illinois limited liability company ("Tenant"), as tenant.
RECITALS:
A. Landlord and Tenant's predecessor in interest, O'Hare Tech Center
Associates, L.P., an Illinois limited partnership ("OTCA"), entered into a
Ground Lease for Site 19/O'Hare International Airport dated August 15, 1995
("Ground Lease"), relating to certain real estate consisting of approximately
50 acres of land defined as the "Land" and described on Exhibit A to the Ground
Lease, together with all improvements thereon, situated at O'Hare International
Airport ("Airport"), pursuant to an ordinance of the City Council of Chicago
dated June 14, 1995 (C.J.P., pp. 2480-2700). Landlord and OTCA entered into a
Corrective and Implementing Supplement to Ground Lease dated May 8, 1996 ("First
Supplement") to reflect certain corrections to the Ground Lease dated August 15,
1995, and provide for certain easements. OTCA assigned all of its right, title
and interest in and to the Lease to Tenant by an Assignment and Assumption of
Ground Lease dated May 10, 1996, consented to in advance by Landlord in a letter
to OTCA dated April 22, 1995. Landlord and Tenant entered into a Second
Corrective and Implementing Supplement to the Ground Lease dated October 25,
1996 to reflect additional corrections to the Ground Lease, to delete the
Phase A-1 Parcel from the Premises under the Ground Lease and confirm other
matters relating to the creation of the Separate Lease with respect to the Phase
A-1 Parcel, to provide for a change in use of the Detention Area, modify Design
Standards and modify certain drainage easements, among other matters. The
Ground Lease as modified by the First Supplement, Second Supplement and
Landlord's consent letter herein sometimes referred to as the "Lease."
B. The Commencement Date of the Term is August 15, 1995.
C. Landlord owns and operates the Airport, with the power to lease
premises and facilities and to grant rights and privileges with respect thereto.
D. Execution of this Amendment by Landlord is authorized by Ordinance
passed by the City Council of the City of Chicago on September 10, 1997 (C.J.P.,
pp. _________) ("Ordinance").
E. Tenant expects to pay certain of the costs of acquiring, constructing,
installing and equipping with the proceeds of the City of Chicago Variable/Fixed
Rate Demand Special Facilities Airport Revenue Bonds (CenterPoint O'Hare, L.L.C.
Project), Series 1997 (the "Bonds") described in the Ordinance, which require a
shorter term than the Term provided for
<PAGE>
in the Lease. Landlord and Tenant agree to shorten the Term, subject to an
option to be granted to Tenant to extend the shortened term for a period not
to exceed the original Term of the Lease in the aggregate, on the terms
provided herein.
F. Capitalized terms used in this Amendment shall have the meanings set
forth in the Lease except as otherwise defined herein.
TERMS, COVENANTS, AND CONDITIONS
NOW, THEREFORE, in consideration of the foregoing premises, and the terms,
covenants and conditions hereinafter set forth, Landlord and Tenant agree as
follows:
1. TERM.
(a) Section 2.01 of the Lease is amended by amending and restating
the last sentence, as follows:
"The term of this Lease ("Term") shall commence on the
commencement Date and terminate on August 1, 2042, (unless
terminated sooner or extended as provided in this Lease) on the
condition that Tenant shall pay Rent, comply with the terms,
covenants and conditions, and yield possession, all as set forth
in this Lease."
(b) The following provision is added to the Lease as a new Section
2.06 to the Lease:
"2.06 EXTENSION OPTION . Subject to the provisions
hereinafter set forth, Landlord hereby grants to Tenant an option
to extend the Term of this Lease on the same terms, conditions
and provisions as contained in this Lease, except as otherwise
provided herein, for one period (the "Extension Period") after
the stated expiration date of the Term, which Extension Period
shall commence on August 2, 2042 (the "Extension Period
Commencement Date") and end on the day before the sixtieth (60th)
anniversary of the Commencement Date (being September 14, 2055)."
(A) Said option shall be exercisable by written notice from
Tenant to Landlord of Tenant's election to exercise said option
given not later than the date which is twenty four (24) months
prior to the Extension Period Commencement Date, time being of
the essence. If Tenant's option is not so exercised, said option
shall thereupon expire.
2
<PAGE>
(B) Tenant may exercise said option, and an exercise
thereof shall be effective, only if (1) at the time of Tenant's
exercise of said option and on the Extension Period Commencement
Date this Lease is in full force and effect and an Event of
Default under Section 14.01(A) or (B) or other material Event of
Default does not exist under this Lease, (2) an Event of Default
in payment of principal or interest under the Bonds or other
material Event of Default does not exist under the Loan Agreement
or Indenture (as such terms are defined on Exhibit A), and (3)
Tenant has received and furnished to Landlord a Favorable Opinion
of Tax Counsel (as defined on Exhibit A hereto) and Tenant's
determination of Bond-Financed Property Rent (as defined on
Exhibit A hereto).
(C) Rent during the Extension Period shall include the
following:
(i) Base Rent at the rate set forth in Sections 3.01
and 3.02 of the Lease;
(ii) Percentage Rent as provided in Section 3.03 of the
Lease; and
(iii) Bond-Financed Property Rent.
(D) If Tenant has validly exercised said option, then
within sixty (60) days after request by either party hereto,
Landlord and Tenant shall enter into a written amendment to this
Lease confirming the terms, conditions and provisions applicable
to the Extension Period as determined in accordance herewith,
with such revisions to the rental provisions of this lease as may
be necessary to include the Bond Financed Property Rent. As the
Extension Period does not extend beyond the original Term of the
Lease, no additional act by the City Council shall be required
with respect to any such extension or amendment on the terms
stated herein, the Commissioner having authority to execute or
approve the confirmatory amendment and all documents in
connection therewith.
2. APPLICATION OF CERTAIN DEFINITIONS UNDER LEASE.
(a) The financing transaction described in the Ordinance, including
the issuance of the Bonds by the Landlord, the loaning of the proceeds
thereof by the Landlord to the Tenant pursuant to the Loan Agreement and
the incurrence by the Tenant, the Guarantor or any Affiliate thereof of any
obligations currently set forth in the Loan Agreement to pay principal,
purchase price, interest and premium owing with respect to the Bonds or
under or in connection therewith either to the holders of the Bonds or as
reimbursement to any national banking association, bank, trust company or
3
<PAGE>
other financial institution issuing a letter of credit or similar credit
enhancement instrument to secure the Bonds, shall be collectively referred
to herein as the "Bond Related Indebtedness."
(b) The Bond Related Indebtedness shall not be deemed to constitute a
Sale under the Lease.
(c) A portion of the Bond Related Indebtedness not to exceed
seventy-five percent (75%) of the Costs of Construction shall be deemed to
constitute "Construction Debt" and "Financing" for all purposes under the
Lease, including, without limitation, for the purpose of applying the
following defined terms in the Lease: "Construction Debt," "Debt," "Free
Cash Flow," "Gross Proceeds," "Net Financing Proceeds," "Net Rent," Net
Residual Proceeds," "Net Sales Proceeds," and "Reinvested Funds." The
remainder of the Bond Related Indebtedness shall not be deemed to
constitute "Debt," "Construction Debt" or "Financing" for any purpose under
the Lease. Statements required under Section 3.03(B) of the Lease shall
also include computation of Debt Service (including its components) and
Construction Debt used in any calculation of Percentage Rent. No later
than nineteen (19) months after Substantial Completion of Phase 3, Tenant
shall furnish to Landlord the exact amount of the Construction Debt,
together with such detail as will enable Landlord to verify its calculation
as being an amount not to exceed seventy-five percent (75%) of the Costs of
Construction. Within nineteen (19) months after Substantial Completion of
a Phase, Tenant shall furnish Landlord information on the allocation of
actual Construction Costs to such Phase. Within thirty (30) days after
disbursement of the Bond proceeds, Tenant shall furnish Landlord the
allocation of Costs of Construction for Phases which have previously been
Substantially Completed and which are being reimbursed from the Bond
proceeds. Tenant shall retain information on Costs of Construction and
their allocation between Phases for future use and furnish Landlord such
information as may be required from time to time to calculate Percentage
Rent throughout the Term.
(d) Tenant represents that the Bond Related Indebtedness to be
incurred in connection with the initial issuance of the Bonds is not
secured by a Leasehold Mortgage; provided, however, if at any time
hereafter Tenant grants a Leasehold Mortgage in connection with the Bond
Related Indebtedness, all provisions of the Lease relating to Leasehold
Mortgages shall become applicable to the Bond Related Indebtedness from and
after the date of such Leasehold Mortgage.
(e) With respect to certain definitions as applied to the portion of
Bond Related Indebtedness deemed to constitute Construction Debt,
(i) the term "Costs of Construction" shall not include
those extraordinary costs of issuance of the
Bonds, as may be excluded by
4
<PAGE>
Landlord, which Landlord determines exceed, in
the aggregate, those costs which would reasonably
have been incurred in connection with more
conventional Construction Debt secured by a
Leasehold Mortgage;
(ii) for any Lease Year, the term "Net Rent" shall not
include interest earned during such Lease Year on
proceeds of the Bonds pending disbursement to pay
Costs of Construction, and the term "Debt Service"
shall not include any interest, principal or
letter of credit fees paid on Bonds allocable to
the undisbursed Bond proceeds during such Lease
Year;
(iii) for any Lease Year, the term "Debt Service"
shall include payments of letter of credit
fees in connection with the Bonds during such
Lease Year, if any such payment is determined
to be an interest cost under Section 148 of
the Internal Revenue Code in calculating the
yield of the Bonds.
(f) The renewal, extension or replacement of the initial letter of
credit securing the Bonds, or any renewal, extension or replacement
thereof or any refunding or reissuance of the Bonds, including without
limitation the execution and delivery by Tenant, Guarantor or any
Affiliate of either of them of a reimbursement agreement or similar
financing agreement with the issuer of such letter of credit or
similar credit enhancement instrument securing the Bonds issued by the
Landlord to finance the Project or any amendment, supplement or
restatement of the Indenture, shall not be deemed to constitute a new
"Financing" under the Lease if: (i) the outstanding principal amount
of the Bonds is not increased in connection therewith, (ii) the Bonds
remain outstanding under the Indenture, as amended, supplemented, or
restated by Landlord, and (iii) interest on the Bonds is excludable
from gross income of the holders thereof.
(g) The Landlord hereby acknowledges receipt of the Loan Agreement
and the Indenture as the loan agreement described in Section 6.01(H) of the
Lease without regard to the provisions of Article 12 and acknowledges that
no assignment of the financing commitment is required by Landlord under
Section 6.01(G) of the Lease.
5
<PAGE>
(h) There shall be no double counting of the same payment of
principal (i.e., deducting as both principal paid and Debt discharged) in
calculating Net Cash Flow or Net Financing Proceeds.
3. BASE RENT AND COMMENCEMENT OF CONSTRUCTION. The following changes are
made to Articles 3 and 6 of the Lease:
(a) The phrase "five (5) years" in Section 6.01(A)(4) is changed to
"three (3) years."
(b) The phrase "twenty-four months" in the first sentence of
Section 6.01(I) is changed to "eighteen months."
(c) The phrase "forty-two (42) months" in Section 3.01(B)(3) is
changed to "thirty-six (36) months."
4. LOAN AGREEMENT. The Loan Agreement shall not be deemed to amend or
supersede the terms of the Lease. If, in order to comply with its obligations
under Section 5.4 of the Loan Agreement, Tenant is obligated to take an action
at variance with the terms of the Lease, Tenant may not take such action unless
it either redeems the Bonds or first obtains Landlord's consent in writing to
such action. Landlord may condition its consent on receiving indemnification
and security satisfactory to Landlord in its sole discretion. A breach or
default by Landlord of its obligations under the Loan Agreement shall not be
deemed a breach or default of its obligations under the Lease.
5. AMENDMENT. Except as expressly modified herein, the provisions of the
Lease, including Article 21, remain unmodified and in full force and effect.
6. SHORT FORM OF LEASE. Landlord and Tenant shall amend the Short Form
of Lease recorded on August 21, 1995 in the Recorder's Office of Cook County,
Illinois, as Document No. 95552388, as amended and recorded on May 13, 1996 in
the Recorder's Office of Cook County, Illinois, as Document No. 96362099, as
amended and recorded on October 25, 1996, 1996, in the Recorder's Office of Cook
County, Illinois, as Document No. 96828939, to reflect the change in Term of the
Lease.
7. CERTIFICATES REGARDING STATUS OF LEASE.
(a) TENANT CERTIFICATE. Tenant hereby states that: (a) this Lease is
unmodified and in full force and effect (amendments to the Lease, being
this Amendment, Second Supplement, Landlord's Consent Letter and the First
Supplement), (b) Base Rent has been paid to September 1, 1997 and
Impositions have been paid to the date hereof, and (c) to the best
knowledge of Tenant, neither Tenant nor Landlord is in
6
<PAGE>
default in the observance or performance of any covenant, agreement or
condition contained in this Lease.
(b) LANDLORD CERTIFICATE. Landlord hereby states that: (a) this
Lease is unmodified and in full force and effect (amendments to the Lease,
being this Amendment, Second Supplement, Landlord's Consent Letter and the
First Supplement), (b) Base Rent has been paid to September 1, 1997.
7
<PAGE>
IN WITNESS WHEREOF, the parties have executed this Amendment as of the date
above stated.
LANDLORD:
CITY OF CHICAGO,
a municipal corporation
By:______________________________________
Commissioner, Department of Aviation
APPROVED AS TO FORM AND LEGALITY:
_____________________________________
Deputy or Assistant
Corporation Counsel
TENANT:
CENTERPOINT O'HARE L.L.C., an
Illinois limited liability company
By: CENTERPOINT PROPERTIES CORPORATION,
a Maryland corporation,
its managing member
By:_________________________________
Name:____________________________
Title:___________________________
By:_________________________________
Name:____________________________
Title:___________________________
8
<PAGE>
The undersigned Guarantor under the Guaranty dated May 10, 1996 hereby consents
to the Amendment and agrees that its Guaranty is unmodified and in full force
and effect. Guarantor has no offsets or defenses to its performance under the
Guaranty which it may assert against Landlord.
CENTERPOINT PROPERTIES
CORPORATION, a Maryland corporation
___________________________________
Name:______________________________
Title:_____________________________
9
<PAGE>
The undersigned Guarantor under the Guaranty dated September ___, 1997 hereby
consents to the Amendment and agrees that its Guaranty is unmodified and in full
force and effect. Guarantor has no offsets or defenses to its performance under
the Guaranty which it may assert against Landlord.
CENTERPOINT PROPERTIES
CORPORATION, a Maryland corporation
___________________________________
Name:______________________________
Title:_____________________________
10
<PAGE>
EXHIBIT A
"Bond-Financed Property" shall mean that portion of the Premises under the
Lease financed with the proceeds of the Bonds.
"Bond-Financed Property Rent" shall mean such rent as Tenant may be
required to pay with respect to Bond-Financed Property under the Internal
Revenue Code of 1986, as amended, as determined by Tenant, subject to Tenant
having received a Favorable Opinion of Tax Counsel it being acknowledged and
agreed that Tenant has surrendered a portion of the Term without compensation
for the sole purpose of qualifying the Project for tax-exempt financing under
Section 142 of the Internal Revenue Code of 1986, as amended, and the parties
intend that the Bond Financed Property Rent shall be no greater than is deemed
necessary in order to permit delivery of the Favorable Opinion of Tax Counsel.
"Favorable Opinion of Tax Counsel" shall have the meaning given thereto in
the Indenture.
"Indenture" shall mean that certain Indenture of Trust dated as of
September 1, 1997 between the City of Chicago and American National Bank and
Trust Company of Chicago, as Trustee, as such Indenture of Trust is thereafter
amended, supplemented or restated with respect to the Bond Financed Property.
"Loan Agreement" shall mean the Loan Agreement between Landlord and Tenant
dated as of September 1, 1997, with respect to the Bonds as such Loan Agreement
thereafter amended, supplemented or restated.
A-1
<PAGE>
<TABLE>
<CAPTION>
EXHIBIT 11
CENTERPOINT PROPERTIES COMPANY AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
(IN THOUSANDS, EXCEPT PER SHARE INFORMATION)
THREE MONTHS NINE MONTHS
ENDED SEPTEMBER 30, ENDED SEPTEMBER 30,
--------------------- ----------------------
1997 1996 1997 1996
------ ------ ------- -------
<S> <C> <C> <C> <C>
Net income (A) $6,742 $5,358 $19,557 $11,169
Interest expense-debentures 243 319 756 1,088
------ ------ ------- -------
Adjusted net income (B) $6,985 $5,677 $20,313 $12,257
------ ------ ------- -------
------ ------ ------- -------
Weighted average number of common shares of
beneficial interest outstanding 19,028 16,483 18,472 13,071
Additional number of common equivalent shares
of beneficial interest outstanding:
Share options - net (1) 349 202 347 199
Convertible preferred stock (2) 1,024
------ ------ ------- -------
Weighted average common and common
equivalent shares outstanding (C) 19,377 16,685 18,819 14,294
Additional weighted average shares outstanding
assuming debentures converted at issue price 649 851 672 967
------ ------ ------- -------
Weighted average shares outstanding for fully-
diluted (D) 20,026 17,536 19,491 15,261
------ ------ ------- -------
------ ------ ------- -------
Net income per share:
Primary (A/C) $0.35 $0.32 $1.04 $0.78
Fully -diluted (3) (B/D) $0.35 $0.32 $1.04 $0.80
</TABLE>
- ---------------
Notes:
(1) Represents stock options using the treasury stock method.
(2) Represents convertible preferred stock as if converted on a share for
share basis; prorated for the days the convertible preferred stock was
outstanding. The convertible preferred stock is considered a common
stock equivalent as it participates in dividends with common stock
and was converted into common stock upon shareholder approval in
May 1996.
(3) Conversion of debentures is anti-dilutive.
<PAGE>
EXHIBIT 23
CENTERPOINT PROPERTIES TRUST
CONSENT OF INDEPENDENT ACCOUNTANTS
We consent to the inclusion in this Form 10-Q for the quarter ended September
30, 1997 and the incorporation by reference in the registration statements of
CenterPoint Properties Trust (formerly CenterPoint Properties Corporation) on
Form S-3 (Nos. 33-95792, 33-99858 and 333-18235), Form S-8/S-3 (File
Nos. 333-05087 and 333-34687) and Form S-8 (File No. 333-05141) of our report
dated September 24, 1997 on our audit of the combined financial statement of
The Bedford Park Properties for the year ended December 31, 1996 and of our
report dated October 21, 1997 on our audit of the financial statement of The
Sears Property for the year ended May 31, 1997.
COOPERS & LYBRAND L.L.P.
Chicago, Illinois
October 24, 1997
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
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0
0
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