<PAGE>
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 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 June 30, 1997
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(D) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to .
---------------------- ----------------------
Commission file number 1-12844
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JDN REALTY CORPORATION
- -------------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Maryland 58-1468053
- --------------------------- -----------------------------------
(State of Jurisdiction of (I.R.S. Employer Identification No.)
incorporation or organization)
3340 Peachtree Road, NE, Suite 1530, Atlanta, GA 30326
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(Address of principal executive offices - zip code)
(404) 262-3252
--------------
(Registrant's telephone number, including area code)
Not applicable
--------------
(Former name, former address and former fiscal year, if
changed since last report)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to such
filing requirements for the past 90 days.
Yes X No
--------- ----------
As of July 18, 1997, 15,461,612 shares of the Registrant's Common Stock,
$.01 par value, were outstanding.
<PAGE>
PART I
FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
Page No.
--------
Condensed Consolidated Balance Sheets - June 30, 1997 and
December 31, 1996 2
Condensed Consolidated Statements of Income - Three Months
Ended June 30, 1997 and 1996 3
Condensed Consolidated Statements of Income - Six Months
Ended June 30, 1997 and 1996 4
Condensed Consolidated Statements of Cash Flows - Six Months
Ended June 30, 1997 and 1996 5
Notes to Condensed Consolidated Financial Statements 6
1
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JDN REALTY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
June 30, December 31,
1997 1996
-------------- --------------
<S> <C> <C>
(Unaudited)
(In thousands)
ASSETS
Shopping center properties, at cost:
Land $ 57,843 $ 50,455
Buildings and improvements 298,769 262,568
Property under development 64,085 19,646
-------------- --------------
420,697 332,669
Less: accumulated depreciation and amortization (32,835) (27,973)
-------------- --------------
Shopping center properties, net 387,862 304,696
Cash and cash equivalents 15,934 2,709
Restricted cash - escrow 2,535 3,659
Rents receivable 1,272 2,208
Investments in and advances to unconsolidated entities 52,931 41,253
Deferred costs, net of amortization 5,753 6,181
Other assets 11,457 11,280
------------- --------------
$ 477,744 $ 371,986
============= =============
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Unsecured line of credit $ 100,000 $ -
Mortgage notes payable 85,032 141,882
Accounts payable and accrued expenses 2,092 1,264
Other liabilities 1,563 2,301
-------------- --------------
Total Liabilities 188,687 145,447
Shareholders' Equity
Preferred stock, par value $.01 per share-
authorized 20,000,000 shares, none outstanding - -
Common stock, par value $.01 per share-
authorized 150,000,000 shares, issued and
outstanding 15,461,612 and 13,056,054 shares
in 1997 and 1996, respectively 155 131
Paid-in capital 295,991 233,497
Accumulated deficit (7,089) (7,089)
-------------- --------------
Total Shareholders' Equity 289,057 226,539
-------------- --------------
$ 477,744 $ 371,986
============= ==============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
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JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended June 30,
1997 1996
------------ ------------
(In thousands)
<S> <C> <C>
Revenues:
Minimum and percentage rents $ 9,882 $ 7,967
Recoveries from tenants 978 868
Other revenue 56 75
-------- --------
Total revenues 10,916 8,910
Operating expenses:
Operating and maintenance 734 599
Real estate taxes 489 502
General and administrative 1,015 861
Depreciation and amortization 2,332 1,893
-------- --------
Total operating expenses 4,570 3,855
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Income from operations 6,346 5,055
Other income (expense):
Interest expense, net (692) (1,352)
Other income, net 272 15
Equity in net income of unconsolidated entities 800 437
-------- --------
Income before extraordinary items 6,726 4,155
Extraordinary items (401) -
-------- --------
Net income $ 6,325 $ 4,155
======== ========
Net income per share $ 0.41 $ 0.38
======== ========
Weighted average shares outstanding 15,460 11,012
======== ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
------- -------
(In thousands)
<S> <C> <C>
Revenue:
Minimum and percentage rents $19,234 $15,767
Recoveries from tenants 1,873 1,709
Other revenue 87 122
------- -------
Total revenues 21,194 17,598
Operating expenses:
Operating and maintenance 1,412 1,206
Real estate taxes 974 966
General and administrative 1,967 1,598
Depreciation and amortization 4,552 3,750
------- -------
Total operating expenses 8,905 7,520
------- -------
Income from operations 12,289 10,078
Other income (expense):
Interest expense, net (2,137) (2,905)
Other income, net 556 43
Equity in net income of unconsolidated entities 1,521 557
------- -------
Income before extraordinary items 12,229 7,773
Extraordinary items (401) -
------- -------
Net income $11,828 $ 7,773
======= =======
Net income per share $ 0.81 $ 0.73
======= =======
Weighted average shares outstanding 14,543 10,699
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
<S> <C> <C>
Six Months Ended June 30,
1997 1996
----------- ----------
(In thousands)
Net cash provided by operating activities $ 17,473 $ 13,994
Cash flows from investing activities:
Development of shopping center properties (47,528) (12,516)
Improvements to shopping center properties (667) (413)
Purchase of shopping center properties (6,496) -
Investments in and advances to unconsolidated entities (15,137) (25,575)
Other (3,589) (2,437)
------------- -------------
Net cash used in investing activities (73,417) (40,941)
Cash flows from financing activities:
Proceeds from mortgages and notes payable 140,424 38,361
Principal payments on mortgages and notes payable (122,296) (22,342)
Proceeds from issuance of common shares, net of
underwriting commissions and offering expenses 65,731 21,663
Dividends paid (15,040) (9,566)
Other 350 692
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Net cash provided by financing activities 69,169 28,808
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Increase in cash and cash equivalents 13,225 1,861
Cash and cash equivalents, beginning of period 2,709 3,109
------------- -------------
Cash and cash equivalents, end of period $ 15,934 $ 4,970
============= =============
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
JDN REALTY CORPORATION
Notes to Condensed Consolidated Financial Statements
(UNAUDITED)
JUNE 30, 1997
1. THE COMPANY
JDN Realty Corporation (the "Company") is a real estate company which
specializes in the development and asset management of retail shopping centers
which are located primarily in the Southeast and are anchored by value-oriented
retailers. As of June 30, 1997, the Company owned and operated, either directly
or through affiliated entities or a joint venture, a total of 54 shopping center
properties and had 17 projects under construction. The Company is operating as
a real estate investment trust ("REIT") for federal income tax purposes.
The Company owns an interest in JDN Development Company, Inc. ("Development
Company"), which is structured such that the Company owns 99% of the economic
interest while J. Donald Nichols, the Company's Chairman and Chief Executive
Officer, owns the remaining 1% and controls Development Company's operations and
activities through his voting common stock ownership. Current tax laws restrict
the ability of REITs to engage in certain activities, such as the sale of
certain properties and third party fee development; because it is not a REIT,
Development Company may engage in real estate development activities such as the
sale of all or a portion of a development project. As of June 30, 1997, the
Company had invested $6.7 million in Development Company in the form of equity
capital, $32.1 million in the form of secured notes receivable and $14.1 million
in the form of unsecured advances.
2. BASIS OF PRESENTATION
The accompanying unaudited condensed consolidated financial statements have
been prepared in accordance with generally accepted accounting principles for
interim financial information and with the instructions to Form 10-Q and Article
10 of Regulation S-X. Accordingly, they do not include all of the information
and footnotes required by generally accepted accounting principles for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for a fair presentation have
been included. The consolidated balance sheet at December 31, 1996 has been
derived from the audited consolidated financial statements at that date.
Operating results for the three and six month periods ended June 30, 1997 are
not necessarily indicative of the results that may be expected for the year
ending December 31, 1997 or any other interim period. For further information,
refer to the consolidated financial statements and footnotes thereto included in
the Company's Annual Report on Form 10-K for the year ended December 31, 1996.
3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Income Taxes. The Company has elected to be taxed as a REIT under the
Internal Revenue Code of 1986 (the "Code"). As a result, the Company will not
be subject to federal income taxes to the extent that it distributes annually at
least 95% of its taxable income to its shareholders and satisfies certain other
requirements defined in the Code. Accordingly, no provision has been made for
federal income taxes in the accompanying condensed consolidated financial
statements for the periods presented.
6
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Earnings Per Share. Net income per share for the three and six months
ended June 30, 1997 and 1996 is based on the weighted average number of common
shares outstanding during the respective periods.
New Accounting Standards. In April 1997, the Financial Accounting
Standards Board ("FASB") issued Statement No. 128, Earnings Per Share (the "EPS
Standard"). The EPS Standard replaces APB Opinion No. 15, Earnings Per Share,
and among other things eliminates "primary" earnings per share and requires the
presentation of "basic" earnings per share, which excludes from consideration
common stock equivalents. The Company will adopt the EPS Standard in the first
quarter of 1998, and based on current circumstances, does not believe the effect
of adoption will be material.
Reclassifications. Certain amounts as previously reported have been
reclassified to conform to the current period's presentation.
4. DISTRIBUTION
On May 22, 1997, the Company's Board of Directors declared a cash
distribution of $.50 per share payable June 30, 1997 to shareholders of record
on June 20, 1997.
5. COMMON STOCK OFFERING
On March 11, 1997, the Company completed a public offering of 2,400,000
shares of common stock which netted proceeds of approximately $65.7 million to
the Company. The Company used the proceeds from this offering to repay
construction loans and amounts outstanding under its secured line of credit.
6. ACQUISITIONS
On February 26, 1997, the Company acquired a shopping center in Jackson,
Mississippi containing 108,043 square feet of gross leasable area for
approximately $9.1 million, $7.3 million of which represents the assumption of
indebtedness. On March 25, 1997, the Company acquired a shopping center in
South Boston, Virginia containing 77,530 square feet of gross leasable area for
approximately $3.4 million.
On May 28, 1997, the Company purchased the interest of its third-party
joint venture partner in the limited liability company that owned the Asheville,
North Carolina property for $283,000. On June 26, 1997, the Company purchased
the interest of its third-party joint venture partner in the limited liability
company that owned the Loganville, Georgia property for $440,000.
7. UNSECURED LINE OF CREDIT
On May 23, 1997, the Company closed on a $150 million unsecured line of
credit with Wachovia Bank of Georgia, N.A., as agent (the "Unsecured Credit
Facility"). The initial rate on the Unsecured Credit Facility was LIBOR plus
140 basis points; as of July 21, 1997, the interest rate
7
<PAGE>
decreased to LIBOR plus 125 basis points. The Unsecured Credit Facility matures
in May 2000. The Company may borrow amounts under the Unsecured Credit Facility
up to an amount equal to 60% of the value of all Eligible Unencumbered
Stabilized Properties, as defined, plus 50% of the cost of all Construction in
Progress, as defined. The Unsecured Credit Facility contains the covenants
customary for credit facilities of this type including limitations on secured
debt, maintenance of minimum interest coverage ratios and maintenance of minimum
ratios of unencumbered assets to unsecured debt. The Unsecured Credit Facility
replaced the Company's $40 million secured line of credit (the "Bank Credit
Facility") which was terminated and satisfied in full. As a result of the
termination of the Bank Credit Facility, the Company charged $401,000 in
unamortized loan costs to earnings as extraordinary items.
8. SUBSEQUENT EVENTS
On July 7, 1997, the Company executed two Treasury Locks in the notional
amounts of $50 million and $75 million, respectively, which terminate August 7,
1997. The Company entered into these transactions in an effort to lock interest
rates on a portion of a proposed bond offering which is expected to close prior
to the termination date of the agreements. The $50 million transaction
effectively locks the underlying rate for the proposed 7-year bonds at 6.275%.
The $75 million transaction effectively locks the underlying rate for the
proposed 10-year bonds at 6.295%. The Company expects to amortize the payments
made or received on these transactions over the lives of the related bonds as
adjustments to interest expense.
8
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The Company
JDN Realty Corporation (the "Company") is a real estate development company
which specializes in the development and asset management of retail shopping
centers which are located primarily in the Southeast and are anchored by value-
oriented retailers. As of June 30, 1997, the Company owned and operated, either
directly or through affiliated entities or a joint venture, a total of 54
shopping center properties and had 17 projects under construction. The Company
is operating as a real estate investment trust ("REIT") for federal income tax
purposes.
The Company owns an interest in JDN Development Company, Inc. ("Development
Company"), which is structured such that the Company owns 99% of the economic
interest while J. Donald Nichols, the Company's Chairman and Chief Executive
Officer, owns the remaining 1% and controls Development Company's operations and
activities through his voting common stock ownership. Current tax laws restrict
the ability of REITs to engage in certain activities, such as the sale of
certain properties and third party fee development; because it is not a REIT,
Development Company may engage in real estate development activities such as the
sale of all or a portion of a development project. As of June 30, 1997, the
Company had invested $6.7 million in Development Company in the form of equity
capital, $32.1 million in the form of secured notes receivable and $14.1 million
in the form of unsecured advances.
RESULTS OF OPERATIONS
Comparison of the Three Months Ended June 30, 1997 to the Three Months Ended
June 30, 1996
Minimum and percentage rents increased $1.9 million or 24.0% to $9.9
million for the three months ended June 30, 1997 from $8.0 million for the same
period in 1996. Of this increase, $1.1 million relates to newly developed and
redeveloped properties. The Company acquired properties in Decatur, Alabama in
December 1996, Jackson, Mississippi in February 1997, and South Boston, Virginia
in March 1997. In addition, the Company acquired unaffiliated third parties'
interests in the limited liability companies which owned the Asheville, North
Carolina and Loganville, Georgia properties in May 1997 and June 1997,
respectively, and changed its accounting for these two properties from the
equity method to the consolidated method. Minimum and percentage rents increased
$669,000 due to the operations of the five properties noted above (collectively,
the "Acquisition Properties"). The remaining increase relates to higher rental
revenues at existing properties.
Recoveries from tenants increased $110,000 or 12.7% to $978,000 for the
three months ended June 30, 1997 from $868,000 for the same period in 1996. Of
this increase, $54,000 relates to newly developed and redeveloped properties and
$112,000 relates to the Acquisition Properties. These increases are offset by a
$56,000 reduction due to a decrease in recoverable expenses at existing
properties.
Other revenue decreased $19,000 or 25.3% to $56,000 for the three months
ended June 30, 1997 from $75,000 for the same period in 1996. This decrease is
the result of a reduction in revenues associated with managing and leasing fewer
properties for third-party owners.
9
<PAGE>
Operating and maintenance expenses increased $135,000 or 22.5% to $734,000
for the three months ended June 30, 1997 from $599,000 for the same period in
1996. Of this increase, $47,000 relates to newly developed and redeveloped
properties and $68,000 relates to the Acquisition Properties. The remaining
increase relates to increased expenses at the existing properties.
Real estate taxes decreased $13,000 or 2.6% to $489,000 for the three
months ended June 30, 1997 from $502,000 for the same period in 1996. This
decrease relates to the separate tax platting of an anchor tenant tract at an
existing property, offset by an increase of $17,000 at newly developed and
redeveloped properties and an increase of $43,000 at the Acquisition Properties.
General and administrative expenses increased $154,000 or 17.9% to $1.0
million for the three months ended June 30, 1997 from $861,000 for the same
period in 1996. This increase primarily reflects the cost of additional
employees and other expenses associated with the increase in the number of
properties owned and operated by the Company.
Depreciation and amortization expense increased $439,000 or 23.2% to $2.3
million for the three months ended June 30, 1997 from $1.9 million for the same
period in 1996. Of this increase, $239,000 relates to newly developed and
redeveloped properties and $154,000 relates to the Acquisition Properties. The
remaining increase relates primarily to amortization of tenant improvements,
tenant allowances and leasing commissions for new tenants and to amortization of
leasehold improvements and depreciation of furniture and fixtures at the
Company's corporate offices.
Interest expense decreased $660,000 or 48.8% to $692,000 for the three
months ended June 30, 1997 from $1.4 million for the same period in 1996. This
decrease is due primarily to a decrease in average debt balances resulting from
equity offerings in 1996 and 1997.
Other income increased $257,000 to $272,000 for the three months ended June
30, 1997 from $15,000 for the same period in 1996. This increase is due
primarily to interest income earned on a $10.5 million mortgage note receivable
purchased in December 1996.
Equity in net income of unconsolidated entities represents the Company's
share of the net income of Development Company and the operations of the limited
liability companies that owned the Asheville, North Carolina and Loganville,
Georgia projects prior to the Company's purchase of the outside parties'
interests. Equity in net income of unconsolidated entities increased $363,000
or 83.1% to $800,000 for the three months ended June 30, 1997 from $437,000 for
the same period in 1996. This increase is due primarily to the operations of
the recently developed properties in Asheville, North Carolina and Loganville,
Georgia, and to the operations of the following recently developed properties
operated by Development Company: Canton, Georgia; Conyers, Georgia; Warner
Robins, Georgia; and Steubenville, Ohio. In addition, Development Company
recorded gains due to increased land sales activity.
Extraordinary items for the three months ended June 30, 1997 represent
charges to earnings of unamortized deferred financing costs of $401,000
associated with the termination of the $40 million secured line of credit (the
"Bank Credit Facility"). There were no extraordinary items for the three months
ended June 30, 1996.
10
<PAGE>
Comparison of the Six Months Ended June 30, 1997 to the Six Months Ended June
30, 1996
Minimum and percentage rents increased $3.4 million or 22.0% to $19.2
million for the six months ended June 30, 1997 from $15.8 million for the same
period in 1996. Of this increase, $2.3 million relates to newly developed and
redeveloped properties and $1.0 million relates to the Acquisition Properties.
The remaining increase is the result of increased rentals and increased
occupancy at the existing properties.
Recoveries from tenants increased $164,000 or 9.6% to $1.9 million for the
six months ended June 30, 1997 from $1.7 million for the same period in 1996.
Of this increase, $111,000 relates to newly developed and redeveloped properties
and $138,000 relates to the Acquisition Properties. These increases are offset
by an $85,000 reduction due to a decrease in recoverable expenses at the
existing properties.
Other revenue decreased $35,000 or 28.7% to $87,000 for the six months
ended June 30, 1997 from $122,000 for the same period in 1996. This decrease is
the result of a reduction in revenues associated with managing and leasing fewer
properties for third-party owners.
Operating and maintenance expenses increased $206,000 or 17.1% to $1.4
million for the six months ended June 30, 1997 from $1.2 million for the same
period in 1996. Of this increase, $100,000 relates to the operations of newly
developed and redeveloped properties and $96,000 relates to the Acquisition
Properties. The remaining increase relates to increased expenses at the
existing properties.
Real estate taxes increased $8,000 or 0.8% to $974,000 for the six months
ended June 30, 1997 from $966,000 for the same period in 1996. Of this
increase, $34,000 relates to newly developed and redeveloped properties and
$65,000 relates to the Acquisition Properties. These increases are offset by a
decrease in property taxes at the existing properties due primarily to the
separate tax platting of an anchor tenant tract.
General and administrative expenses increased $369,000 or 23.1% to $2.0
million for the six months ended June 30, 1997 from $1.6 million for the same
period in 1996. This increase primarily reflects the cost of additional
employees and other expenses associated with the increase in the number of
properties owned and operated by the Company.
Depreciation and amortization expense increased $802,000 or 21.4% to $4.6
million for the six months ended June 30, 1997 from $3.8 million for the same
period in 1996. Of this increase, $492,000 relates to newly developed and
redeveloped properties and $220,000 relates to the Acquisition Properties. The
remaining increase relates primarily to amortization of tenant improvements,
tenant allowances and leasing commissions for new tenants and to amortization of
leasehold improvements and depreciation of furniture and fixtures at the
Company's corporate offices.
Interest expense decreased $768,000 or 26.4% to $2.1 million for the six
months ended June 30, 1997 from $2.9 million for the same period in 1996. This
decrease is primarily attributable to the repayment of interim financing with
the proceeds from equity offerings in 1996 and 1997.
Other income increased $513,000 to $556,000 for the six months ended June
30, 1997 from $43,000 for the same period in 1996. This increase is due
primarily to interest income earned on a $10.5 million mortgage note receivable
purchased in December 1996.
11
<PAGE>
Equity in net income of unconsolidated entities increased $964,000 to $1.5
million for the six months ended June 30, 1997 from $557,000 for the same period
in 1996. This increase is due primarily to the operations of recently developed
properties in Asheville, North Carolina; Loganville, Georgia; Canton, Georgia;
Conyers, Georgia; Warner Robins, Georgia; and Steubenville, Ohio and to
increased land sales activity by Development Company.
Extraordinary items for the six months ended June 30, 1997 represent
charges to earnings of unamortized deferred financing costs of $401,000
associated with the termination of the Bank Credit Facility. There were no
extraordinary items for the six months ended June 30, 1996.
Funds From Operations
Funds from operations ("FFO") is defined by the National Association of
Real Estate Investment Trusts, Inc. to mean net income, computed in accordance
with generally accepted accounting principles, excluding gains or losses from
debt restructuring and sales of property, plus depreciation and amortization of
real estate assets, and after adjustments for unconsolidated partnerships and
joint ventures. The Company believes that FFO is helpful to investors as a
measure of the performance of an equity REIT because, along with cash provided
by operating activities, it provides investors with an indicator of the ability
of the Company to make capital expenditures and to fund other cash needs. The
Company's method of calculating FFO may be different from methods used by other
REITs and, accordingly, may not be comparable to such other REITs. FFO does not
represent cash provided by operating activities as defined by generally accepted
accounting principles ("GAAP"), should not be considered an alternative to net
income (determined in accordance with GAAP) as an indication of operating
performance and is not indicative of cash available to fund all cash flow needs,
including the Company's ability to make cash distributions. The Company has
presented below the calculation of FFO for the periods indicated:
12
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<TABLE>
<CAPTION>
(Dollars in thousands) Three Months Ended June 30,
1997 1996
--------- ---------
<S> <C> <C>
Net income $ 6,325 $ 4,155
Depreciation of real estate assets 2,175 1,774
Amortization of tenant allowances and tenant
improvements 36 30
Amortization of deferred leasing commissions 72 61
Extraordinary items 401 -
Depreciation of real estate assets held in
unconsolidated entities 232 16
--------- ---------
FFO $ 9,241 $ 6,036
========= =========
</TABLE>
<TABLE>
<CAPTION>
Six Months Ended June 30,
1997 1996
---------- ---------
<S> <C> <C>
Net income $ 11,828 $ 7,773
Depreciation of real estate assets 4,257 3,521
Amortization of tenant allowances and tenant
improvements 68 59
Amortization of deferred leasing commissions 136 120
Net loss on real estate sales - 15
Extraordinary items 401 -
Depreciation of real estate assets held in
unconsolidated entities 426 32
--------- ---------
FFO $ 17,116 $ 11,520
========= =========
</TABLE>
Leasing
Properties owned and operated by the Company, Development Company and an
affiliated joint venture were 98.6% leased as of June 30, 1997.
Forward-Looking Statements
Management has included herein certain forward-looking statements within
the meaning of Section 27A of the Securities Act of 1933, as amended, and
Section 21E of the Securities and Exchange Act of 1934, as amended. When used,
statements which are not historical in nature including the words "anticipate,"
"estimate," "should," "expect," "believe," "intend" and similar expressions are
intended to identify forward-looking statements. Such statements are, by their
nature, subject to certain risks and uncertainties. Among the factors that could
cause actual results to differ materially from those projected are the
following: business conditions and the general economy, especially as they
affect interest rates; business conditions, especially as they affect value-
oriented retailers; the federal, state and local regulatory environment;
availability of debt and equity capital with favorable terms and conditions;
availability of new development and acquisition opportunities; changes in the
financial condition or corporate strategy of the Company's primary retail
tenants and in particular Wal-Mart and Lowe's ability to complete and lease
existing development and redevelopment projects on schedule and within budget;
and inability of the Company to maintain its qualification as a REIT. Other
risks, uncertainties and factors that could cause actual results to differ
materially than those projected are detailed from time to time in reports filed
by the Company with the Securities and Exchange Commission, including Forms 8-K,
10-Q and 10-K.
13
<PAGE>
LIQUIDITY AND CAPITAL RESOURCES
The Company's primary sources of funds are cash generated from operating
activities and proceeds from lines of credit and equity offerings. The
Company's primary uses of funds are development, redevelopment and acquisition
of shopping center properties, distributions to shareholders, scheduled debt
amortization, and capital improvements to its existing shopping center
properties. The Company generally uses cash provided by operations to fund its
distributions to shareholders, capital improvements to existing properties and
scheduled amortization of its indebtedness. The Company uses proceeds from its
lines of credit to finance its development, redevelopment and acquisition
activities. The Company uses proceeds from equity offerings to repay
construction loans, amounts outstanding under its lines of credit and to fund
its ongoing development, redevelopment and acquisition activities.
In March 1997, the Company completed a public offering of 2,400,000 shares
of common stock which netted proceeds of approximately $65.7 million to the
Company. The Company used the proceeds from this offering to repay construction
loans and amounts outstanding under the Bank Credit Facility. This offering has
allowed the Company to maintain its debt to total market capitalization ratio at
relatively low levels while continuing to grow its development and acquisition
activities. As a result, the Company's debt to total market capitalization
ratio decreased from 28.2% as of December 31, 1996 to 27.7% as of June 30, 1997.
Management believes that this lower leverage enables the Company to borrow more
competitively and increases its flexibility in the financing of its development,
redevelopment and acquisition activities with debt and equity securities.
On May 23, 1997, the Company closed on the Unsecured Credit Facility. The
initial rate on the Unsecured Credit Facility was LIBOR plus 140 basis points;
on July 21, 1997, the interest rate decreased to LIBOR plus 125 basis points.
The Unsecured Credit Facility matures in May 2000. The Company may borrow
amounts under the Unsecured Credit Facility up to an amount equal to 60% of the
value of all Eligible Unencumbered Stabilized Properties, as defined, plus 50%
of the cost of all Construction in Progress, as defined. The Unsecured Credit
Facility contains other covenants customary for credit facilities of this type
including limitations on secured debt, maintenance of minimum interest coverage
ratios and maintenance of minimum ratios of unencumbered assets to unsecured
debt. The Unsecured Credit Facility replaced the Bank Credit Facility, which
was terminated and satisfied in full. The replacement of the Bank Credit
Facility with the Unsecured Credit Facility had the effect of reducing the
interest rate from the 30-day Eurodollar rate plus 1.50% to LIBOR plus 1.40%,
increasing the Company's borrowing capacity from $40 million to $150 million,
and converting the Company's borrowings under the line from secured to
unsecured. Management believes that these changes will assist the Company in
implementing its development, redevelopment and acquisition strategies by
providing more flexibility in its borrowings and allowing the Company to borrow
less expensively, thereby reducing overall development costs and increasing
returns from its development and acquisition projects.
14
<PAGE>
The Company's total indebtedness as of June 30, 1997, consisted of the
following:
<TABLE>
<CAPTION>
Percent
Principal Interest Maturity of Total
Balance Rate Date Indebtedness
------------- --------- --------- ------------
(in thousands)
<S> <C> <C> <C>
Fixed Rate
Term Debt $ 71,311 8.64%(1) 29-Mar-01 38.5%
Mortgage note payable - Richmond, Kentucky 6,493 7.38% 01-Dec-03 3.5%
Mortgage note payable - Jackson, Mississippi 7,228 9.25% 01-Mar-17 3.9%
------------ -------- ---------
85,032 8.60% 45.9%
Floating Rate
Unsecured Credit Facility 100,000 7.54%(2) 22-May-00 54.1%
------------ -------- ---------
100,000 7.54% 54.1%
------------ -------- ---------
$ 185,032 8.03% 100.0%
============ ======== =========
</TABLE>
WEIGHTED AVERAGE INTEREST RATES:
<TABLE>
<CAPTION>
Weighted Weighted
Principal Average Average
Balance Interest Rate (3) Interest Rate (4)
----------- ----------------- -----------------
<S> <C> <C> <C>
Fixed Rate Debt $ 85,032 8.60% 7.01%
Hedged Floating Rate Debt 50,000 8.12% 7.88%
Floating Rate Debt 50,000 7.54% 7.59%
---------- -------- --------
Total Debt $ 185,032 8.18% 7.32%
========== ======== ========
</TABLE>
(1) Represents stated rate plus amortization of deferred loan costs.
(2) Stated rate of LIBOR plus 1.40% plus amortization of deferred loan costs.
(3) Interest when the amortization of deferred loan costs is included.
(4) Interest when the amortization of deferred loan costs is not included.
As of June 30, 1997, the Company had $46.7 million available under the
Unsecured Credit Facility.
During 1996, the Company and Morgan Guaranty Trust Company of New York
("Morgan") entered into a swap transaction as a hedge against increasing rates
on its floating rate debt. Under the initial terms of the agreement, the
Company paid a fixed rate of 6.44% and received a variable rate equal to the
rate for the one-month LIBOR rate based on the notional amount in the contract.
As of December 31, 1996, the notional amount was $70 million; on January 1,
1997, the notional amount increased to $80 million. On February 12, 1997, the
Company amended the terms of the swap transaction by reducing the notional
amount to $50 million, increasing the fixed rate the Company pays to 6.48% and
extending the maturity date to January 1, 2001.
As of June 30, 1997, the Company had development activities underway
totaling approximately 2.3 million square feet of gross leasable area which the
Company expects to own. This development activity includes projects undertaken
by the Company directly, through Development Company, and through a joint
venture in which Development Company participates directly. Management expects
completion of these projects to have a positive effect on cash generated by
operating activities. Additional funding required for these projects is
estimated to be $61.1 million. Management expects to fund the remaining costs
of these projects and the cost of any future projects undertaken by the Company
or Development Company with additional advances on its Unsecured Credit Facility
and with proceeds
15
<PAGE>
from public or private placements of debt or equity. However, there can be no
assurance that these sources will be available and the inability to obtain those
sources of capital could have an adverse effect on the Company's ability to fund
its development, redevelopment, and acquisition activities.
In order for the Company to continue to qualify as a REIT, it must annually
distribute to shareholders at least 95% of its taxable income. Management
believes that the Company will meet this requirement in 1997 with cash generated
by operating activities. In addition, management believes that cash generated
by operating activities will be adequate to fund improvements to the Company's
shopping center properties, leasing costs and scheduled debt amortization in
1997.
In order to meet the Company's long term liquidity requirements, management
anticipates that the Company's cash from operating activities will continue to
increase as a result of new developments, redevelopments, acquisitions and
improved operations at existing centers. These activities should enable the
Company to make its distribution payments to shareholders, maintain and improve
its properties, make scheduled debt payments, and obtain debt or equity
financing for its development, redevelopment and acquisition projects. All but
$7.3 million of the Company's debt requires balloon payments in the future. The
Unsecured Credit Facility matures in 2000; the Term Debt matures in 2001; and a
note payable of $6.5 million matures in 2003. The Company is currently pursuing
an unsecured bond offering which is intended to repay the Term Debt and reduce
amounts outstanding under the Unsecured Credit Facility. Management intends to
refinance or repay the Unsecured Credit Facility and the note payable with
proceeds from other sources of capital at or prior to their respective
maturities. Management will evaluate various alternatives and select the best
options based on market conditions at the time. Management expects to seek
additional equity financing when market conditions are favorable in order to
maintain its debt-to-total-market-capitalization ratio within acceptable limits.
There can be no assurance that debt or equity markets will be favorable in the
future, and unfavorable markets could limit the Company's ability to grow its
business or repay or refinance maturing debt.
INFLATION
The Company's leases generally contain provisions designed to mitigate the
adverse impact of inflation on net income. These provisions include clauses
enabling the Company to pass through to tenants certain operating costs,
including real estate taxes, common area maintenance, utilities and insurance,
thereby reducing the Company's exposure to increases in costs and operating
expenses resulting from inflation. Certain of the Company's leases contain
clauses enabling the Company to receive percentage rents based on tenants' gross
sales, which generally increase as prices rise, and, in certain cases,
escalation clauses, which generally increase rental rates during the terms of
the leases. In addition, many of the Company's non-anchor leases are for terms
of less than ten years, which permits the Company to seek increased rents upon
re-leasing at higher market rates.
16
<PAGE>
PART II
OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS
Not applicable.
ITEM 2. CHANGES IN SECURITIES
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
On May 22, 1997, the Company held its Annual Meeting of Shareholders.
The following were the results of the meeting:
(1) The shareholders elected J. Donald Nichols and Craig Macnab as
Class III directors until the annual meeting of shareholders in
2000 or until their successors are elected and shall have
qualified.
The votes were as follows:
<TABLE>
<CAPTION>
J. Donald Craig
Nichols Macnab
---------- ----------
<S> <C> <C>
Votes Cast for 12,776,159 12,776,159
Votes Cast Against -0- -0-
Vote Withheld/Broker
Non-Votes 32,276 32,276
</TABLE>
(2) The shareholders ratified the appointment of Ernst & Young LLP
as independent auditors of the Company for the year ending
December 31, 1997.
<TABLE>
<CAPTION>
<S> <C>
Votes Cast for 12,730,953
Votes Cast Against 12,270
Votes Withheld/Broker
Non-Votes 65,212
</TABLE>
ITEM 5. OTHER INFORMATION
Not applicable.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 $150,000,000 Credit Agreement dated as of May 23, 1997 among JDN
Realty Corporation and Wachovia Bank of Georgia, N.A., as Agent
1
<PAGE>
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three months ended June 30, 1997, the Company filed
the following reports on Form 8-K:
Form 8-K dated May 30, 1997 containing the press release
announcing the closing of a $150 million unsecured line of credit
with Wachovia Bank of Georgia, N.A., as Agent
2
<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.
July 22, 1997 /s/ J. Donald Nichols
- ---------------------------------- ----------------------------------
(Date) J. Donald Nichols
Chief Executive Officer
July 22, 1997 /s/ William J. Kerley
- ---------------------------------- ----------------------------------
(Date) William J. Kerley
Chief Financial Officer
3
<PAGE>
INDEX TO EXHIBITS
EXHIBIT
NUMBER DESCRIPTION
- ------- -----------
10.1 $150,000,000 Credit Agreement dated as of May 23, 1997 among JDN
Realty Corporation and Wachovia Bank of Georgia, N.A. as Agent
27 Financial Data Schedule
<PAGE>
EXHIBIT 10.1
$150,000,000
CREDIT AGREEMENT
dated as of
May 23, 1997
among
JDN REALTY CORPORATION
The Banks Listed Herein
and
WACHOVIA BANK OF GEORGIA, N.A.,
as Agent
<PAGE>
TABLE OF CONTENTS
CREDIT AGREEMENT
ARTICLE I
DEFINITIONS............................................ 1
SECTION 1.01. Definitions................................. 1
SECTION 1.02. Accounting Terms and Determinations......... 18
SECTION 1.03. References.................................. 19
SECTION 1.04. Use of Defined Terms........................ 19
SECTION 1.05. Terminology................................. 19
ARTICLE II
THE CREDITS............................................ 19
SECTION 2.01. Commitments to Lend Loans................... 19
SECTION 2.02. Method of Borrowing Loans................... 20
SECTION 2.03. Notes....................................... 22
SECTION 2.04. Maturity of Loans........................... 22
SECTION 2.05. Interest Rates.............................. 23
SECTION 2.06. Fees........................................ 26
SECTION 2.07. Optional Termination or Reduction of
Commitments............................................. 26
SECTION 2.08. Mandatory Reduction and Termination of
Commitments............................................. 26
SECTION 2.09. Optional Prepayments........................ 26
SECTION 2.10. Mandatory Prepayments....................... 27
SECTION 2.11. General Provisions as to Payments........... 27
SECTION 2.12. Computation of Interest and Fees............ 29
(i)
<PAGE>
ARTICLE III
CONDITIONS TO BORROWINGS................................... 29
SECTION 3.01. Conditions to First Borrowing................... 29
SECTION 3.02. Conditions to All Borrowings.................... 31
ARTICLE IV
REPRESENTATIONS AND WARRANTIES............................. 32
SECTION 4.01. Corporate Existence and Power................... 32
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention............................................... 32
SECTION 4.03. Binding Effect.................................. 32
SECTION 4.04. Financial Information........................... 33
SECTION 4.05. No Litigation................................... 33
SECTION 4.06. Compliance with ERISA........................... 33
SECTION 4.07. Compliance with Laws; Payment of Taxes.......... 33
SECTION 4.08. Subsidiaries.................................... 34
SECTION 4.09. Investment Company Act.......................... 34
SECTION 4.10. Public Utility Holding Company Act.............. 34
SECTION 4.11. Ownership of Property; Liens.................... 34
SECTION 4.12. No Default...................................... 34
SECTION 4.13. Full Disclosure................................. 34
SECTION 4.14. Environmental Matters........................... 35
SECTION 4.15. Capital Stock................................... 35
SECTION 4.16. Margin Stock.................................... 36
SECTION 4.17. Insolvency...................................... 36
(ii)
<PAGE>
SECTION 4.18. Insurance....................................... 36
SECTION 4.19. Real Estate Investment Trust................... 37
ARTICLE V
COVENANTS.................................................. 37
SECTION 5.01. Information..................................... 37
SECTION 5.02. Inspection of Property, Books and Records....... 39
SECTION 5.03. Maintenance of Existence........................ 39
SECTION 5.04. Dissolution..................................... 39
SECTION 5.05. Consolidations, Mergers and Sales of Assets..... 40
SECTION 5.06. Use of Proceeds................................. 41
SECTION 5.07. Compliance with Laws; Payment of Taxes.......... 41
SECTION 5.08. Insurance....................................... 41
SECTION 5.09. Change in Fiscal Year........................... 42
SECTION 5.10. Maintenance of Property......................... 42
SECTION 5.11. Environmental Notices........................... 42
SECTION 5.12. Environmental Matters........................... 42
SECTION 5.13. Environmental Release........................... 42
SECTION 5.14. Transactions with Affiliates.................... 42
SECTION 5.15. Restricted Payments............................. 43
SECTION 5.16. Loans or Advances............................... 43
SECTION 5.17. Investments..................................... 43
SECTION 5.18. Liens on Eligible Property...................... 44
SECTION 5.19. Restrictions on Ability of Guarantors to Pay
Dividends................................................... 44
(iii)
<PAGE>
SECTION 5.20. Ratio of Total Consolidated Liabilities to
Gross Asset Value........................................... 45
SECTION 5.21. Ratio of Total Secured Debt to Gross Asset
Value....................................................... 45
SECTION 5.22. Ratio of EBITDA to Consolidated Interest
Expense..................................................... 45
SECTION 5.23. Ratio of Unencumbered Assets to Unsecured
Funded Debt................................................. 45
SECTION 5.24. Ratio of Unsecured Net Operating Income to
Unsecured Interest Expense.................................. 45
SECTION 5.25. Guarantees...................................... 45
SECTION 5.26. Additional Revolving Credit..................... 45
SECTION 5.27. Ownership....................................... 46
SECTION 5.28. Status as a REIT................................ 46
SECTION 5.29. New Subsidiaries to Become Guarantors........... 46
ARTICLE VI
DEFAULTS................................................... 46
SECTION 6.01. Events of Default............................... 46
SECTION 6.02. Notice of Default............................... 50
ARTICLE VII
THE AGENT.................................................. 50
SECTION 7.01. Appointment; Powers and Immunities.............. 50
SECTION 7.02. Reliance by Agent............................... 51
SECTION 7.03. Defaults........................................ 51
SECTION 7.04. Rights of Agent and its Affiliates as a Bank.... 52
(iv)
<PAGE>
SECTION 7.05. Indemnification................................. 52
SECTION 7.06 Consequential Damages........................... 53
SECTION 7.07. Payee of Note Treated as Owner.................. 53
SECTION 7.08. Nonreliance on Agent and Other Banks............ 53
SECTION 7.09. Failure to Act.................................. 53
SECTION 7.10. Resignation or Removal of Agent................. 54
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION...................... 54
SECTION 8.01. Basis for Determining Interest Rate Inadequate
or Unfair................................................... 54
SECTION 8.02. Illegality...................................... 55
SECTION 8.03. Increased Cost and Reduced Return............... 55
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar
Loans....................................................... 57
SECTION 8.05. Compensation.................................... 57
ARTICLE IX
MISCELLANEOUS.............................................. 58
SECTION 9.01. Notices......................................... 58
SECTION 9.02. No Waivers...................................... 58
SECTION 9.03. Expenses; Documentary Taxes..................... 59
SECTION 9.04. Indemnification................................. 59
SECTION 9.05. Setoff; Sharing of Setoffs...................... 59
SECTION 9.06. Amendments and Waivers.......................... 61
SECTION 9.07. No Margin Stock Collateral...................... 61
(v)
<PAGE>
SECTION 9.08. Successors and Assigns.......................... 62
SECTION 9.09. Confidentiality................................. 64
SECTION 9.10. Representation by Banks......................... 65
SECTION 9.11. Obligations Several............................. 65
SECTION 9.12. Georgia Law..................................... 65
SECTION 9.13. Severability.................................... 65
SECTION 9.14. Interest........................................ 65
SECTION 9.15. Interpretation.................................. 66
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction... 66
SECTION 9.17. Counterparts.................................... 67
SECTION 9.18. Source of Funds -- ERISA........................ 67
EXHIBIT A Form of Note
EXHIBIT B Form of Opinion of Counsel for the Borrower
EXHIBIT C Form of Opinion of Special Counsel for the Agent
EXHIBIT D Form of Assignment and Acceptance
EXHIBIT E Form of Notice of Borrowing
EXHIBIT F Form of Compliance Certificate
EXHIBIT G Form of Closing Certificate
EXHIBIT H Form of Officer's Certificate for Borrower
EXHIBIT I Form of Borrowing Base Certificate
EXHIBIT J List of Eligible Properties
EXHIBIT K Form of Guaranty
(vi)
<PAGE>
EXHIBIT L Form of Contribution Agreement
Schedule 1.01 Existing Loans to JDN Development Company, Inc.
Schedule 4.08 Subsidiaries
Schedule 4.14 Environmental Matters
Schedule 5.17 Existing Investments
Schedule 5.25 Existing Guarantees
(vii)
<PAGE>
CREDIT AGREEMENT
CREDIT AGREEMENT dated as of May 23, 1997 among JDN Realty
Corporation, the BANKS listed on the signature pages hereof and WACHOVIA BANK OF
GEORGIA, N.A., as Agent.
The parties hereto agree as follows:
ARTICLE I
DEFINITIONS
SECTION 1.01. Definitions. The terms as defined in this Section 1.01
-----------
shall, for all purposes of this Agreement and any amendment hereto (except as
herein otherwise expressly provided or unless the context otherwise requires),
have the meanings set forth herein:
"Adjusted London Interbank Offered Rate" has the meaning set forth in
Section 2.05(c).
"Affiliate" of any relevant Person means (i) any Person that directly,
or indirectly through one or more intermediaries, controls the relevant Person
(a "Controlling Person"), (ii) any Person (other than the relevant Person or a
Subsidiary of the relevant Person) which is controlled by or is under common
control with a Controlling Person, or (iii) any Person (other than a Subsidiary
of the relevant Person) of which the relevant Person owns, directly or
indirectly, 20% or more of the common stock or equivalent equity interests. As
used herein, the term "control" means possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ownership of voting securities, by contract or
otherwise.
"Agent" means Wachovia Bank of Georgia, N.A., a national banking
association organized under the laws of the United States of America, in its
capacity as agent for the Banks hereunder, and its successors and permitted
assigns in such capacity.
"Agent's Letter Agreement" means that certain letter agreement, dated
as of March 13, 1997 between the Borrower and the Agent relating to the
structure of the Loans, and certain
<PAGE>
fees from time to time payable by the Borrower to the Agent, together with all
amendments and supplements thereto.
"Agreement" means this Credit Agreement, together with all amendments
and supplements hereto.
"Applicable Margin" has the meaning set forth in Section 2.05(a).
"Assignee" has the meaning set forth in Section 9.08(c).
"Assignment and Acceptance" means an Assignment and Acceptance
executed in accordance with Section 9.08(c) in the form attached hereto as
Exhibit D.
- ----------
"Authority" has the meaning set forth in Section 8.02.
"Average Quarterly Usage" means, with respect to each Quarterly
Period, the percentage which the amount of the average daily aggregate Used
Commitments of all Banks bears to the amount of the average daily aggregate
Commitments of all Banks during such Quarterly Period.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns.
"Base Rate" means for any Base Rate Loan for any day, the rate per
annum equal to the higher as of such day of (i) the Prime Rate, or (ii) one-half
of one percent above the Federal Funds Rate. For purposes of determining the
Base Rate for any day, changes in the Prime Rate or the Federal Funds Rate shall
be effective on the date of each such change.
"Base Rate Borrowing" means a Borrowing consisting of Base Rate Loans.
"Base Rate Loan" means a Loan which bears or is to bear interest at a
rate based upon the Base Rate, and is to be made as a Base Rate Loan pursuant to
the applicable Notice of Borrowing, Section 2.02(f), or Article VIII, as
applicable.
"Base Rent" means, with respect to leases of the Properties, the
minimum annual contractual rent payable thereunder, excluding common area
maintenance and percentage rent.
2
<PAGE>
"Borrower" means JDN Realty Corporation, a Maryland corporation, and
its successors and its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Borrower at the same time by all of the Banks, and may be a Base Rate
Borrowing or a Euro-Dollar Borrowing.
"Borrowing Base" means the sum of each of the following, as determined
by reference to the most recent Borrowing Base Certificate furnished pursuant to
Section 3.01(h) or Section 5.01(i), as applicable:
(i) an amount equal to the product of (w) 10 (which is the
capitalization rate), times (x) 4 (which is the annualization factor),
times (y) 0.60 (which is the advance rate), times (z) the Net Operating
Income for the 3 month period ending on the last day of the Fiscal Quarter
just ended prior to the date of determination, from each Eligible
Unencumbered Stabilized Property and the Cross Pointe Centre Property; plus
(ii) an amount equal to the lesser of: (A) the product of (x) 0.50
(which is the advance rate), times (y) the book value of Construction in
Progress on all Eligible Properties not subject to a Mortgage and (B)
$40,000,000; less
(iii) so long as the Borrower does not have a Debt Rating equal to or
greater than BBB- from S&P or Duff & Phelps or Baa3 from Moody's, the
Construction Reserve.
"Borrowing Base Certificate" means a certificate substantially in the
form of Exhibit I, duly executed by an authorized officer, setting forth in
---------
reasonable detail the calculations for each component of the Borrowing Base.
"Capital Stock" means any nonredeemable capital stock of the Borrower
or any Consolidated Entity (to the extent issued to a Person other than the
Borrower), whether common or preferred.
"CERCLA" means the Comprehensive Environmental Response Compensation
and Liability Act, 42 U.S.C. (S) 9601 et. seq. and its implementing regulations
and amendments.
3
<PAGE>
"CERCLIS" means the Comprehensive Environmental Response Compensation
and Liability Inventory System established pursuant to CERCLA.
"Change of Law" shall have the meaning set forth in Section 8.02.
"Closing Certificate" has the meaning set forth in Section 3.01(e).
"Closing Date" means May 23, 1997.
"Code" means the Internal Revenue Code of 1986, as amended, or any
successor Federal tax code.
"Commitment" means, with respect to each Bank, (i) the amount set
forth opposite the name of such Bank on the signature pages hereof, and (ii)as
to any Bank which enters into any Assignment and Acceptance (whether as
transferor Bank or as Assignee thereunder), the amount of such Bank's Commitment
after giving effect to such Assignment and Acceptance, in each case as such
amount may be reduced from time to time pursuant to Sections 2.07 and 2.08.
"Compliance Certificate" has the meaning set forth in Section 5.01(c).
"Consolidated Entity" means at any date any Person the accounts of
which, in accordance with GAAP, are consolidated with those of the Borrower in
its consolidated financial statements as of such date.
"Consolidated Interest Expense" for any period means interest expensed
in respect of Debt of the Borrower or any of the Guarantors.
"Consolidated Liabilities" means the sum of (i) all liabilities that,
in accordance with GAAP, should be classified as liabilities on a consolidated
balance sheet of Borrower and the Guarantors, and (ii) to the extent not
included in clause (i) of this definition, all Redeemable Preferred Stock.
"Consolidated Net Income" means, for any period, the Net Income of the
Borrower and its Consolidated Subsidiaries determined on a consolidated basis,
but excluding (i) extraordinary items and (ii) any equity interests of the
Borrower
4
<PAGE>
or any Subsidiary in the unremitted earnings of any Person that is not
a Subsidiary.
"Consolidated Operating Profits" means, for any period, the Operating
Profits of the Borrower and its Consolidated Subsidiaries.
"Consolidated Total Assets" means, at any time, the total assets of
the Borrower and its Consolidated Subsidiaries, determined on a consolidated
basis, as set forth or reflected on the most recent consolidated balance sheet
of the Borrower and its Consolidated Subsidiaries, prepared in accordance with
GAAP.
"Construction in Progress" means, for any retail Property, calculated
on a consolidated basis for the Borrower and the Guarantors, the construction-
in-progress as shown from time to time on the books and records of the Borrower
and the Guarantors, maintained in accordance with GAAP.
"Construction Reserve" means, at any time during which the ratio of
Pro-forma Total Consolidated Liabilities to Pro-forma Gross Asset Value exceeds
0.55 to 1.0, the Dollar amount by which Pro-forma Total Consolidated Liabilities
would have to be reduced in order that such ratio would not be exceeded.
"Contribution Agreement" means the Contribution Agreement of even date
herewith in substantially the form of Exhibit L to be executed by the Borrower
---------
and each of the Guarantors pursuant to Section 5.29.
"Control" means, with respect to any Person, the power to direct the
management and policies of such Person, directly or indirectly, whether through
the ownership of voting securities or otherwise.
"Controlled Group" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which, together with the Borrower, are treated as a single
employer under Section 414 of the Code.
"Cross Pointe Centre Property" means a retail center containing
204,284 square feet of space and located in Fayetteville, North Carolina, on
which the Borrower has a first mortgage Lien in the original principal amount of
$10,500,000.
5
<PAGE>
"Debt" of any Person means at any date, without duplication, (i) all
obligations of such Person for borrowed money, (ii) all obligations of such
Person evidenced by bonds, debentures, notes or other similar instruments, (iii)
all obligations of such Person to pay the deferred purchase price of property or
services, except trade accounts payable arising in the ordinary course of
business, (iv) all obligations of such Person as lessee under capital leases,
(v) all obligations of such Person to reimburse any bank or other Person in
respect of amounts payable under a banker's acceptance, (vi) all Redeemable
Preferred Stock of such Person (in the event such Person is a corporation),
(vii) all obligations of such Person to reimburse any bank or other Person in
respect of amounts paid or to be paid or to be paid under a letter of credit or
similar instrument, (viii) all Debt of others secured by a Lien on any asset of
such Person, whether or not such Debt is assumed by such Person, (ix) all
obligations of such Person with respect to interest rate protection agreements,
foreign currency exchange agreements or other hedging arrangements (valued as
the termination value thereof computed in accordance with a method approved by
the International Swap Dealers Association and agreed to by such Person in the
applicable hedging agreement, if any), and (x) all Debt of others Guaranteed by
such Person.
"Debt Rating" means at any time whichever is the lowest of the rating
of the Borrower's senior unsecured, unenhanced debt (or, if no such debt exists,
its issuer credit rating for debt of such type) by Moody's, S&P and Duff &
Phelps (provided, that (i) if any two of such ratings are the same, such ratings
--------
shall apply, and (ii) in the event of a double or greater split rating, the
rating immediately above the lowest rating shall apply), or if only one of them
rates the Borrower's senior unsecured, unenhanced debt, such rating.
"Default" means any condition or event which constitutes an Event of
Default or which with the giving of notice or lapse of time or both would,
unless cured or waived, become an Event of Default.
"Default Rate" means, with respect to any Loan, on any day, the sum of
2% plus the highest interest rate (including the Applicable Margin) which may be
applicable to any Loans hereunder (irrespective of whether any such type of
Loans are actually outstanding hereunder).
6
<PAGE>
"Dividends" means for any period the sum of all dividends and other
distributions paid or declared during such period in respect of any Capital
Stock and Redeemable Preferred Stock (other than dividends paid or payable in
the form of additional Capital Stock).
"Dollars" or "$" means dollars in lawful currency of the United States
of America.
"Domestic Business Day" means any day except a Saturday, Sunday or
other day on which commercial banks in Georgia are authorized by law to close.
"EBITDA" means at any time the sum of the following, determined on a
consolidated basis for the Borrower and the Guarantors, at the end of each
Fiscal Quarter, for the applicable measuring period: (i) Consolidated Net
Income; plus (ii) Consolidated Interest Expense; plus (iii) taxes on income;
---- ----
plus (iv) depreciation; plus (v) amortization; plus (vi) other non-cash charges.
- ---- ---- ----
"Eligible Property" means any retail Property which is either (i)
listed on Exhibit J or (ii) which has been approved as an Eligible Property by
---------
the Required Banks, at the request of the Borrower, taking into account the
following information concerning the Property provided to the Agent and the
Banks by the Borrower: a physical description, applicable environmental reports,
information regarding its age, location and occupancy, an operating statement
and rent roll for the most recent Fiscal Quarter, and an operating budget for
the current Fiscal Year.
"Eligible Unencumbered Stabilized Property" means any Eligible
Property which (i) is not subject to a Mortgage, and (ii) is a Stabilized
Property.
"Environmental Authority" means any foreign, federal, state, local or
regional government that exercises any form of jurisdiction or authority under
any Environmental Requirement.
"Environmental Authorizations" means all licenses, permits, orders,
approvals, notices, registrations or other legal prerequisites for conducting
the business of the Borrower or any Subsidiary required by any Environmental
Requirement.
"Environmental Judgments and Orders" means all judgments, decrees or
orders arising from or in any way
7
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associated with any Environmental Requirements, whether or not entered upon
consent, or written agreements with an Environmental Authority or other entity
arising from or in any way associated with any Environmental Requirement,
whether or not incorporated in a judgment, decree or order.
"Environmental Liabilities" means any liabilities, whether accrued,
contingent or otherwise, arising from and in any way associated with any
Environmental Requirements.
"Environmental Notices" means notice from any Environmental Authority
or by any other person or entity, of possible or alleged noncompliance with or
liability under any Environmental Requirement, including without limitation any
complaints, citations, demands or requests from any Environmental Authority or
from any other person or entity for correction of any violation of any
Environmental Requirement or any investigations concerning any violation of any
Environmental Requirement.
"Environmental Proceedings" means any judicial or administrative
proceedings arising from or in any way associated with any Environmental
Requirement.
"Environmental Releases" means releases as defined in CERCLA or under
any applicable state or local environmental law or regulation.
"Environmental Requirements" means any legal requirement relating to
health, safety or the environment and applicable to the Borrower, any Subsidiary
or the Properties, including but not limited to any such requirement under
CERCLA or similar state legislation and all federal, state and local laws,
ordinances, regulations, orders, writs, decrees and common law.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, or any successor law. Any reference to any provision
of ERISA shall also be deemed to be a reference to any successor provision or
provisions thereof.
"Euro-Dollar Borrowing" means a Borrowing consisting of Euro-Dollar
Loans.
"Euro-Dollar Business Day" means any Domestic Business Day on which
dealings in Dollar deposits are carried out in the London interbank market.
8
<PAGE>
"Euro-Dollar Loan" means a Loan which bears or is to bear interest at
a rate based upon the Euro-Dollar Rate, and to be made as a Euro-Dollar Loan
pursuant to the applicable Notice of Borrowing.
"Euro-Dollar Reserve Percentage" has the meaning set forth in Section
2.05(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Federal Funds Rate" means, for any day, the rate per annum (rounded
upward, if necessary, to the next higher 1/100th of 1%) 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 by the Federal Reserve Bank of New York on the Domestic Business Day
next succeeding such day, provided that (i) if the day for which such rate is to
--------
be determined is not a Domestic Business Day, the Federal Funds Rate for such
day shall be such rate on such transactions on the next preceding Domestic
Business Day as so published on the next succeeding Domestic Business Day, and
(ii) if such rate is not so published for any day, the Federal Funds Rate for
such day shall be the average rate charged to the Agent on such day on such
transactions, as determined by the Agent.
"Fiscal Month" means any fiscal month of the Borrower.
"Fiscal Quarter" means any fiscal quarter of the Borrower.
"Fiscal Year" means any fiscal year of the Borrower and the
Guarantors.
"Funds From Operations" means net income or loss computed in
accordance with GAAP, excluding gains (or losses) from debt restructuring and
sales of property, plus depreciation and amortization of real estate assets, and
after adjustments for unconsolidated partnerships and joint ventures.
"GAAP" means generally accepted accounting principles applied on a
basis consistent with those which, in accordance with Section 1.02, are to be
used in making the calculations for
9
<PAGE>
purposes of determining compliance with the terms of this Agreement.
"Gross Asset Value" means, on a consolidated basis for the Borrower
and the Guarantors, the sum of:
(i) an amount equal to the product of (x) 10 (which is the
capitalization rate), times (y) 4 (which is the annualization factor),
times (z) the Net Operating Income for the 3 month period ending on the
last day of the month just ended prior to the date of determination, from
each Property and the Cross Pointe Centre Property; plus
(ii) a amount equal to the book value of Construction in Progress on
the last day of the Fiscal Quarter just ended; plus
(iii) the principal balance as of the last day of the Fiscal Quarter
just ended of (x) the existing Debt of JDN Development Company, Inc. listed
on Schedule 1.01 which was Guaranteed by the Borrower and (y) the principal
amount of Debt Guaranteed pursuant to Borrower's 50% Guarantee in existence
as of the Closing Date of Debt of Dogwood Drive, LLC (which is 60% owned by
JDN Development Company, Inc.), not to exceed $4,950,000; plus
(iv) the book value of the interests of the Borrower in all Guarantors
which are not Consolidated Subsidiaries.
"Guarantee" by any Person means any obligation, contingent or
otherwise, of such Person directly or indirectly guaranteeing any Debt or other
obligation of any other Person and, without limiting the generality of the
foregoing, any obligation, direct or indirect, contingent or otherwise, of such
Person (i) to secure, purchase or pay (or advance or supply funds for the
purchase or payment of) such Debt or other obligation (whether arising by virtue
of partnership arrangements, by agreement to keep-well, to purchase assets,
goods, securities or services, to provide collateral security, to take-or-pay,
or to maintain financial statement conditions or otherwise) or (ii) entered into
for the purpose of assuring in any other manner the obligee of such Debt or
other obligation of the payment thereof or to protect such obligee against loss
in respect thereof (in whole or in part), provided that the term Guarantee shall
--------
not include endorsements for collection or deposit in the ordinary course
10
<PAGE>
of business. The term "Guarantee" used as a verb has a corresponding meaning.
"Guarantors" means any one, or more or all, as the context shall
require, of any Significant Subsidiary which becomes a Guarantor pursuant to
Section 5.29, and JDN Structured Finance 1, Inc., when required pursuant to the
provisions of such Section; in each case subject to the provisions of the last
sentence of Section 5.05.
"Guaranty" means the Guaranty Agreement in substantially the form of
Exhibit K to be executed by each of the Guarantors pursuant to Section 5.29,
- ---------
unconditionally and jointly and severally Guaranteeing payment of the Loans, the
Notes and all other obligations of the Borrower to the Agent and the Banks
hereunder, including without limitation all principal, interest, fees, costs,
and compensation and indemnification amounts.
"Hazardous Materials" includes, without limitation, (a) solid or
hazardous waste, as defined in the Resource Conservation and Recovery Act of
1980, 42 U.S.C. (S) 6901 et seq. and its implementing regulations and
amendments, or in any applicable state or local law or regulation, (b)
"hazardous substance", "pollutant", or "contaminant" as defined in CERCLA, or in
any applicable state or local law or regulation, (c) gasoline, or any other
petroleum product or by-product, including, crude oil or any fraction thereof,
(d) toxic substances, as defined in the Toxic Substances Control Act of 1976, or
in any applicable state or local law or regulation and (e) insecticides,
fungicides, or rodenticides, as defined in the Federal Insecticide, Fungicide,
and Rodenticide Act of 1975, or in any applicable state or local law or
regulation, as each such Act, statute or regulation may be amended from time to
time.
"Interest Period" means: (1) with respect to each Euro-Dollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the first, second, third or sixth month
thereafter, as the Borrower may elect in the applicable Notice of Borrowing;
provided that:
- --------
(a) any Interest Period (subject to paragraph (c) below) which would
otherwise end on a day which is not a Euro-Dollar Business Day shall be
extended to the next succeeding Euro-Dollar Business Day unless such Euro-
Dollar Business Day falls in another calendar month, in which case
11
<PAGE>
such Interest Period shall end on the next preceding Euro-Dollar Business
Day;
(b) any Interest Period which begins on the last Euro-Dollar Business
Day of a calendar month (or on a day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall,
subject to paragraph (c) below, end on the last Euro-Dollar Business Day of
the appropriate subsequent calendar month; and
(c) no Interest Period may be selected which begins before the
Termination Date and would otherwise end after the Termination Date; and
(2) with respect to each Base Rate Borrowing, the period commencing on the date
of such Borrowing and ending 30 days thereafter; provided that:
--------
(a) any Interest Period (subject to paragraph (b) below) which would
otherwise end on a day which is not a Domestic Business Day shall be
extended to the next succeeding Domestic Business Day; and
(b) no Interest Period which begins before the Termination Date and
would otherwise end after the Termination Date may be selected.
"Investment" means any investment in any Person, whether by means of
purchase or acquisition of obligations or securities of such Person, capital
contribution to such Person, loan or advance to such Person, making of a time
deposit with such Person, or assumption of any obligation of such Person or
otherwise.
"JDN Venture" means any Person formed by the Borrower or any
Consolidated Entity: (i) which is not a Consolidated Entity and (ii) in which
the Borrower or such Consolidated Entity owns either (x) 50% or more of the
beneficial interests therein, but does not have Control thereof, or (y) 20% or
more of the beneficial interests therein, but does have Control thereof.
"Lending Office" means, as to each Bank, its office located at its
address set forth on the signature pages hereof (or identified on the signature
pages hereof as its Lending Office) or such other office as such Bank may
hereafter designate as its Lending Office by notice to the Borrower and the
Agent.
12
<PAGE>
"Lien" means, with respect to any asset, any mortgage, deed to secure
debt, deed of trust, lien, pledge, charge, security interest, security title,
preferential arrangement which has the practical effect of constituting a
security interest or encumbrance, or encumbrance or servitude of any kind in
respect of such asset to secure or assure payment of a Debt or a Guarantee,
whether by consensual agreement or by operation of statute or other law, or by
any agreement, contingent or otherwise, to provide any of the foregoing. For
the purposes of this Agreement, the Borrower or any Subsidiary shall be deemed
to own subject to a Lien any asset which it has acquired or holds subject to the
interest of a vendor or lessor under any conditional sale agreement, capital
lease or other title retention agreement relating to such asset.
"Loan" means a Base Rate Loan or a Euro-Dollar Loan, and "Loans" means
Base Rate Loans or Euro-Dollar Loans, or any or all of them, as the context
shall require.
"Loan Documents" means this Agreement, the Notes, the Guaranty, the
Contribution Agreement, any other document evidencing, relating to or securing
the Loans, and any other document or instrument delivered from time to time in
connection with this Agreement, the Notes or the Loans, as such documents and
instruments may be amended or supplemented from time to time.
"Loans" means Base Rate Loans or Euro-Dollar Loans made pursuant to
the terms and conditions set forth in Section 2.01.
"London Interbank Offered Rate" has the meaning set forth in Section
2.05(c).
"Margin Stock" means "margin stock" as defined in Regulations G, T, U
or X.
"Material Adverse Effect" means, with respect to any event, act,
condition or occurrence of whatever nature (including any adverse determination
in any litigation, arbitration, or governmental investigation or proceeding),
whether singly or in conjunction with any other event or events, act or acts,
condition or conditions, occurrence or occurrences, whether or not related, a
material adverse change in, or a material adverse effect upon, any of (a) the
financial condition, operations, business, properties or prospects of the
Borrower and the Guarantors taken as a whole, (b) the rights and remedies of the
13
<PAGE>
Agent or the Banks under the Loan Documents, or the ability of the Borrower or
the Guarantors to perform its obligations under the Loan Documents to which it
is a party, as applicable, or (c) the legality, validity or enforceability of
any Loan Document.
"Moody's" means Moody's Investor Service, Inc.
"Mortgage" means (i) with respect to any referenced Property, a
mortgage, deed to secure debt, deed of trust or similar instrument encumbering
such Property, and (ii) with respect to the owner of any referenced Property, a
pledge of any of its capital stock or partnership interests.
"Multiemployer Plan" shall have the meaning set forth in Section
4001(a)(3) of ERISA.
"Net Income" means, as applied to any Person for any period, the
aggregate amount of net income of such Person for such period, as determined in
accordance with GAAP.
"Net Operating Income" means, (A) for any Property, calculated on a
consolidated basis for the Borrower and the Guarantors, the sum of the following
derived from such Property: (i) Property revenues, less (ii) Property expenses
(excluding depreciation, amortization and debt service), less (iii) a management
fee equal to 3% of Base Rent, and less (iv) a capital reserve equal to $0.15 for
each leasable square foot; and (B) for the Cross Pointe Centre Property, so long
as the Borrower has a mortgage lien thereon, all interest paid under the related
note held by the Borrower.
"Non-Recourse Mortgage Debt" means Debt secured by a Mortgage on
Property, which the Borrower has determined in good faith is by its terms non-
recourse, except for customary exclusions for environmental liability,
misapplication or fraudulent application of rent after default, insurance
proceeds and condemnation awards and other customary exclusions.
"Notes" means the promissory notes of the Borrower, substantially in
the form of Exhibit A, evidencing the obligation of the Borrower to repay Loans,
---------
together with all amendments, consolidations, modifications, renewals and
supplements thereto.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
14
<PAGE>
"Officer's Certificate" has the meaning set forth in Section 3.01(f).
"Operating Profits" means, as applied to any Person for any period,
the operating income of such Person for such period, as determined in accordance
with GAAP.
"Participant" has the meaning set forth in Section 9.08(b).
"PBGC" means the Pension Benefit Guaranty Corporation or any entity
succeeding to any or all of its functions under ERISA.
"Performance Pricing Determination Date" has the meaning set forth in
Section 2.05(a).
"Person" means an individual, a corporation, a partnership, an
unincorporated association, a limited liability corporation, a limited liability
partnership, a trust or any other entity or organization, including, but not
limited to, a government or political subdivision or an agency or
instrumentality thereof.
"Plan" means at any time 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 and is either (i) maintained by a member of the
Controlled Group for employees of any member of the Controlled Group or (ii)
maintained pursuant to a collective bargaining agreement or any other
arrangement under which more than one employer makes contributions and to which
a member of the Controlled Group is then making or accruing an obligation to
make contributions or has within the preceding 5 plan years made contributions.
"Prime Rate" refers to that interest rate so denominated and set by
Wachovia from time to time as an interest rate basis for borrowings. The Prime
Rate is but one of several interest rate bases used by Wachovia. Wachovia lends
at interest rates above and below the Prime Rate.
"Pro-forma Gross Asset Value" means at any time the sum of: (i) Gross
Asset Value; less (ii) Construction in Progress; plus (iii) the product of (x)
10 (which is the capitalization rate), times (y) the proforma projected annual
Net Operating Income of Construction in Progress.
15
<PAGE>
"Pro-forma Total Consolidated Liabilities" means at any time the sum
of: (i) Total Consolidated Liabilities; plus (ii) the estimated cost to complete
Construction in Progress.
"Properties" means all real property owned, leased or otherwise used
or occupied by the Borrower or any Guarantor, wherever located.
"Quarterly Period" means a 3 month period (or portion thereof) ending
on each March 31, June 30, September 30 and December 31 after the Closing Date
and prior to the Termination Date.
"Redeemable Preferred Stock" of any Person means any preferred stock
issued by such Person which is at any time prior to the Termination Date either
(i) mandatorily redeemable (by sinking fund or similar payments or otherwise) or
(ii) redeemable at the option of the holder thereof.
"Refunding Loan" means a new Loan made on the day on which an
outstanding Loan is maturing or a Base Rate Borrowing is being converted to a
Euro-Dollar Borrowing, if and to the extent that the proceeds thereof are used
entirely for the purpose of paying such maturing Loan or Loan being converted,
excluding any difference between the amount of such maturing Loan or Loan being
converted and any greater amount being borrowed on such day and actually either
being made available to the Borrower pursuant to Section 2.02(c) or remitted to
the Agent as provided in Section 2.11, in each case as contemplated in Section
2.02(d).
"Regulation G" means Regulation G of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation T" means Regulation T of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
16
<PAGE>
"Regulation X" means Regulation X of the Board of Governors of the
Federal Reserve System, as in effect from time to time, together with all
official rulings and interpretations issued thereunder.
"REMIC Financing" means the financing pursuant to which JDN Structured
Finance 1, Inc. obtained a non-recourse loan in the initial principal amount of
$75,000,000, secured by certain mortgaged properties consisting of all or
portions of 20 retail shopping centers located in 7 states in the Southeastern
United States, in connection with the issuance of $75,000,000 Class A Commercial
Mortgage Pass-Through Certificates evidencing beneficial interests in the JDN
REMIC Trust created by Bankers Trust Company.
"Required Banks" means at any time Banks having at least 66 2/3% of
the aggregate amount of the Commitments or, if the Commitments are no longer in
effect, Banks holding at least 66 2/3% of the aggregate outstanding principal
amount of the sum of the Loans.
"Restricted Payment" means (i) any dividend or other distribution on
any shares of the Borrower's Capital Stock (except dividends payable solely in
shares of its Capital Stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (a) any shares of the Borrower's
Capital Stock (except shares acquired upon the conversion thereof into other
shares of its Capital Stock) or (b) any option, warrant or other right to
acquire shares of the Borrower's Capital Stock.
"S&P" means Standard & Poor's Ratings Group, a division of McGraw-
Hill, Inc.
"Significant Subsidiary" means any Subsidiary which either (x) has
assets which constitute more than 5% of Gross Asset Value at the end of the most
recent Fiscal Quarter, or (y) contributed more than 5% of Consolidated Operating
Profits during the most recent Fiscal Quarter and the 3 Fiscal Quarters
immediately preceding such Fiscal Quarter (or, with respect to any Subsidiary
which existed during the entire 4 Fiscal Quarter period but was acquired by the
Borrower during such period, which would have contributed more than 5% of Gross
Asset Value during such period had it been a Subsidiary for the entire period).
17
<PAGE>
"Stabilized Property" means at any time retail Properties (i) which
are at least 90% leased (pursuant to written leases which have been signed by
both landlord and tenant and under which the payment of Base Rent has commenced)
or (ii) are at least 80% occupied by tenants which have accepted the premises
and signed (together with the landlord) a lease, and with respect to which the
date for the commencement of payment of Base Rent has been established.
"Subsidiary" means any corporation or other entity of which securities
or other ownership interests having ordinary voting power to elect a majority of
the board of directors or other persons performing similar functions are at the
time directly or indirectly owned by the Borrower; provided, however, that
-------- -------
"Subsidiary" shall not include JDN Development Company, Inc. or any JDN Venture.
"Taxes" has the meaning set forth in Section 2.11(c).
"Termination Date" means whichever is applicable of (i) May 22, 2000,
(ii) such later date to which it is extended by the Banks pursuant to Section
2.04(b), in their sole and absolute discretion, (iii) the date the Commitments
are terminated pursuant to Section 6.01 following the occurrence of an Event of
Default, or (iv) the date the Borrower terminates the Commitments entirely
pursuant to Section 2.07.
"Third Parties" means all lessees, sublessees, licensees and other
users of the Properties, excluding those users of the Properties in the ordinary
course of the Borrower's business and on a temporary basis.
"Transferee" has the meaning set forth in Section 9.08(d).
"Total Consolidated Liabilities" means at any time, for the Borrower
and the Guarantors, determined on a consolidated basis, the sum of (i)
Consolidated Liabilities, plus (ii) all Debt Guaranteed by the Borrower or any
Guarantor, plus (iii) the face amount of all letters of credit issued for the
account of the Borrower or any Guarantor.
"Total Secured Debt" means at any time, for the Borrower and the
Guarantors, determined on a consolidated basis, the sum of the following, but
only if any Property, or ownership interest of the owner thereof, is subject to
a Mortgage with
18
<PAGE>
respect thereto: (i) all indebtedness for borrowed money; (ii) the deferred
purchase price of Property; (iii) all capital leases in which the Borrower is
the tenant; (iv) all obligations to reimburse any bank or other Person in
respect of amounts paid or to be paid under a letter of credit or similar
instrument; and (v) all Guarantees of Debt of Persons other than the Borrower
and the Guarantors.
"Unencumbered Assets" means at any time, for the Borrower and the
Guarantors, determined on a consolidated basis, the sum of the following: (i) an
amount equal to the product of (x) 10 (which is the capitalization factor),
times (y) 4 (which is the annualization factor), times (z) the Net Operating
Income for the 3 month period ending on the last day of the Fiscal Quarter just
ended prior to the date of determination, from each Property not subject to a
Mortgage; plus (ii) the book value of Construction in Progress of all Property
not subject to a Mortgage.
"Unencumbered Stabilized Properties" means at any time, all Stabilized
Properties not subject to a Mortgage.
"Unfunded Vested Liabilities" means, with respect to any Plan at any
time, the amount (if any) by which (i) the present value of all vested
nonforfeitable benefits under such Plan exceeds (ii) the fair market value of
all Plan assets allocable to such benefits, all determined as of the then most
recent valuation date for such Plan, but only to the extent that such excess
represents a potential liability of a member of the Controlled Group to the PBGC
or the Plan under Title IV of ERISA.
"Unsecured Net Operating Income" means at any time all Net Operating
Income attributable to Unencumbered Stabilized Properties.
"Unsecured Funded Debt" means at any time, for the Borrower and the
Guarantors, determined on a consolidated basis, the sum of the following, but
only if any Property, or ownership interest of the owner thereof, is not subject
to a Mortgage with respect thereto: (i) all indebtedness for borrowed money;
(ii) the deferred purchase price of Property; (iii) all capital leases in which
the Borrower is the tenant; (iv) all obligations to reimburse any bank or other
Person in respect of amounts paid or to be paid under a letter of credit or
similar instrument; and (v) all Guarantees of Debt of Persons other than the
Borrower and the Guarantors.
19
<PAGE>
"Unsecured Interest Expense" means at any time that portion of
Consolidated Interest Expense attributable to Unsecured Funded Debt.
"Unused Commitment" means at any date, with respect to any Bank, an
amount equal to its Commitment less the aggregate outstanding principal amount
of its Loans.
"Used Commitment" means, at any date, with respect to any Bank, the
amount by which the Commitment of such Bank exceeds its Unused Commitment.
"Wachovia" means Wachovia Bank of Georgia, N.A., a national banking
association, and its successors.
"Wholly Owned Subsidiary" means any Subsidiary all of the shares of
capital stock or other ownership interests of which (except directors'
qualifying shares) are at the time directly or indirectly owned by the Borrower.
SECTION 1.02. Accounting Terms and Determinations. Unless otherwise
-----------------------------------
specified herein, all terms of an accounting character used herein shall be
interpreted, all accounting determinations hereunder shall be made, and all
financial statements required to be delivered hereunder shall be prepared, in
accordance with GAAP, applied on a basis consistent (except for changes
concurred in by the Borrower's independent public accountants or otherwise
required by a change in GAAP) with the most recent audited consolidated
financial statements of the Borrower and its Consolidated Subsidiaries delivered
to the Banks unless with respect to any such change concurred in by the
Borrower's independent public accountants or required by GAAP, in determining
compliance with any of the provisions of this Agreement or any of the other Loan
Documents: (i) the Borrower shall have objected to determining such compliance
on such basis at the time of delivery of such financial statements, or (ii) the
Required Banks shall so object in writing within 30 days after the delivery of
such financial statements, in either of which events such calculations shall be
made on a basis consistent with those used in the preparation of the latest
financial statements as to which such objection shall not have been made (which,
if objection is made in respect of the first financial statements delivered
under Section 5.01 hereof, shall mean the financial statements referred to in
Section 4.04).
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<PAGE>
SECTION 1.03. References. Unless otherwise indicated, references in
----------
this Agreement to "Articles", "Exhibits", "Schedules", "Sections" and other
Subdivisions are references to articles, exhibits, schedules, sections and other
subdivisions hereof.
SECTION 1.04. Use of Defined Terms. All terms defined in this
--------------------
Agreement shall have the same defined meanings when used in any of the other
Loan Documents, unless otherwise defined therein or unless the context shall
require otherwise.
SECTION 1.05. Terminology. All personal pronouns used in this
-----------
Agreement, whether used in the masculine, feminine or neuter gender, shall
include all other genders; the singular shall include the plural, and the plural
shall include the singular. Titles of Articles and Sections in this Agreement
are for convenience only, and neither limit nor amplify the provisions of this
Agreement.
ARTICLE II
THE CREDITS
SECTION 2.01. Commitments to Lend Loans. Each Bank severally agrees,
-------------------------
on the terms and conditions set forth herein, to make Loans to the Borrower from
time to time before the Termination Date; provided that,
--------
(i) immediately after each such Loan is made, the aggregate
outstanding principal amount of Loans by such Bank shall not exceed the
amount of its Commitment, and
(ii) the aggregate outstanding amount of all Loans shall not exceed
the lesser of (A) the aggregate amount of the Commitments and (B) the
Borrowing Base.
Each Borrowing under this Section shall be in an aggregate principal amount of
(x) for Base Rate Loans, $1,000,000 or any larger integral multiple of $500,000,
and (y) for Euro-Dollar Loans, $3,000,000 or any larger integral multiple of
$1,000,000 (except that in each case any such Borrowing may be in the aggregate
amount of the Unused Commitments) and shall be made from the several Banks
ratably in proportion to their respective Commitments. Within the foregoing
limits, the Borrower may borrow under this Section, repay or, to the extent
permitted by
21
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Section 2.08, prepay Loans and reborrow under this Section at any
time before the Termination Date.
SECTION 2.02. Method of Borrowing Loans. (a) The Borrower shall give
-------------------------
the Agent notice (a "Notice of Borrowing"), which shall be substantially in the
form of Exhibit E, prior to 11:00 A.M. (Atlanta, Georgia time) on the same
---------
Domestic Business Day as each Base Rate Borrowing and at least 3 Euro-Dollar
Business Days before each Euro-Dollar Borrowing, specifying:
(i) the date of such Borrowing, which shall be a Domestic Business Day
in the case of a Base Rate Borrowing or a Euro-Dollar Business Day in the
case of a Euro-Dollar Borrowing,
(ii) the aggregate amount of such Borrowing,
(iii) whether the Loans comprising such Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, and
(iv) in the case of a Euro-Dollar Borrowing, the duration of the
Interest Period applicable thereto, subject to the provisions of the
definition of Interest Period.
(b) Upon receipt of a Notice of Borrowing, the Agent shall promptly
notify each Bank of the contents thereof and of such Bank's ratable share of
such Borrowing and such Notice of Borrowing, once received by the Agent, shall
not thereafter be revocable by the Borrower.
(c) Not later than 11:00 A.M. (Atlanta, Georgia time), as to Euro-
Dollar Borrowings, and 2:00 P.M. (Atlanta, Georgia time), as to Base Rate
Borrowings, on the date of each Borrowing, each Bank shall (except as provided
in paragraph (d) of this Section) make available its ratable share of such
Borrowing, in Federal or other funds immediately available in Atlanta, Georgia,
to the Agent at its address determined pursuant to Section 9.01. Unless the
Agent determines that any applicable condition specified in Article III has not
been satisfied, the Agent will make the funds so received from the Banks
available to the Borrower at the Agent's aforesaid address. Unless the Agent
receives notice from a Bank, at the Agent's address referred to in or specified
pursuant to Section 9.01, no later than 4:00 P.M. (local time at such address)
on the date of a Borrowing with respect to Base Rate Borrowings Domestic
Business Day before the date of a Borrowing with respect to Euro-Dollar
Borrowing stating
22
<PAGE>
that such Bank will not make a Loan in connection with such Borrowing,
the Agent shall be entitled to assume that such Bank will make a Loan
in connection with such Borrowing and, in reliance on such assumption, the Agent
may (but shall not be obligated to) make available such Bank's ratable share of
such Borrowing to the Borrower for the account of such Bank. If the Agent makes
such Bank's ratable share available to the Borrower and such Bank does not in
fact make its ratable share of such Borrowing available on such date, the Agent
shall be entitled to recover such Bank's ratable share from such Bank or the
Borrower (and for such purpose shall be entitled to charge such amount to any
account of the Borrower maintained with the Agent), together with interest
thereon for each day during the period from the date of such Borrowing until
such sum shall be paid in full at a rate per annum equal to the rate at which
the Agent determines that it obtained (or could have obtained) overnight Federal
funds to cover such amount for each such day during such period, provided that
--------
(i) any such payment by the Borrower of such Bank's ratable share and interest
thereon shall be without prejudice to any rights that the Borrower may have
against such Bank and (ii) until such Bank has paid its ratable share of such
Borrowing, together with interest pursuant to the foregoing, it will have no
interest in or rights with respect to such Borrowing for any purpose hereunder.
If the Agent does not exercise its option to advance funds for the account of
such Bank, it shall forthwith notify the Borrower of such decision.
(d) If any Bank makes a new Loan hereunder on a day on which the
Borrower is to repay all or any part of an outstanding Loan from such Bank, such
Bank shall apply the proceeds of its new Loan to make such repayment as a
Refunding Loan and only an amount equal to the difference (if any) between the
amount being borrowed and the amount of such Refunding Loan shall be made
available by such Bank to the Agent as provided in paragraph (c) of this
Section, or remitted by the Borrower to the Agent as provided in Section 2.11,
as the case may be.
(e) Notwithstanding anything to the contrary contained in this
Agreement, no Euro-Dollar Borrowing may be made if there shall have occurred a
Default or an Event of Default, which Default or Event of Default shall not have
been cured or waived, and all Refunding Loans shall be made as Base Rate Loans
(but shall bear interest at the Default Rate, if applicable).
(f) In the event that a Notice of Borrowing fails to specify whether
the Loans comprising such Borrowing are to be
23
<PAGE>
Base Rate Loans or Euro-Dollar Loans, such Loans shall be made as Base Rate
Loans. If the Borrower is otherwise entitled under this Agreement to repay any
Loans maturing at the end of an Interest Period applicable thereto with the
proceeds of a new Borrowing, and the Borrower fails to repay such Loans using
its own moneys and fails to give a Notice of Borrowing in connection with such
new Borrowing, a new Borrowing shall be deemed to be made on the date such Loans
mature in an amount equal to the principal amount of the Loans so maturing, and
the Loans comprising such new Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than 6 Euro-Dollar Borrowings outstanding at any given time.
SECTION 2.03. Notes. (a) The Loans of each Bank shall be evidenced
-----
by a single Note payable to the order of such Bank for the account of its
Lending Office in an amount equal to the original principal amount of such
Bank's Commitment.
(b) Upon receipt of each Bank's Notes pursuant to Section 3.01, the
Agent shall deliver such Notes to such Bank. Each Bank shall record, and prior
to any transfer of its Notes shall endorse on the schedules forming a part
thereof appropriate notations to evidence, the date, amount and maturity of, and
effective interest rate for, each Loan made by it, the date and amount of each
payment of principal made by the Borrower with respect thereto, and such
schedules of each such Bank's Notes shall constitute rebuttable presumptive
evidence of the respective principal amounts owing and unpaid on such Bank's
Notes; provided that the failure of any Bank to make, or any error in making,
--------
any such recordation or endorsement shall not affect the obligation of the
Borrower hereunder or under the Notes or the ability of any Bank to assign its
Notes. Each Bank is hereby irrevocably authorized by the Borrower so to endorse
its Notes and to attach to and make a part of any Note a continuation of any
such schedule as and when required.
SECTION 2.04. Maturity of Loans. (a) Each Loan included in any
-----------------
Borrowing shall mature, and the principal amount thereof shall be due and
payable, on the last day of the Interest Period applicable to such Borrowing.
(b) Notwithstanding the foregoing, the outstanding principal amount of
the Loans, if any, together with all accrued but unpaid interest thereon, if
any, shall be due and payable on
24
<PAGE>
May 22, 2000, unless the Termination Date is otherwise extended by the Banks, in
their sole and absolute discretion. Upon the written request of the Borrower,
which request shall be delivered to the Agent at least 60 days prior to each
Extension Date (as such term is hereinafter defined), the Banks shall have the
option (without any obligation whatsoever so to do) of extending the Termination
Date for additional one-year periods on each of May 22, 1998 and May 22, 1999
(each, any "Extension Date"). In the event that a Bank chooses not to extend the
Termination Date for such an additional one-year period, notice shall be given
by such Bank to the Borrower and the Agent at least 30 days prior to the
relevant Extension Date; provided, that the Termination Date shall not be
extended with respect to any of the Banks unless the Required Banks are willing
to extend the Termination Date and (x) the remaining Banks shall purchase
ratable assignments (without any obligation so to do) from such terminating Bank
(in the form of an Assignment and Acceptance) in accordance with their
respective percentage of the remaining Aggregate Commitments; provided, that,
--------------
such Banks shall be provided such opportunity (which opportunity shall allow
such Banks at least 5 Domestic Business Days in which to make a decision) prior
to the Borrower finding another bank pursuant to the immediately succeeding
clause (y); and, provided, further, that, should any of the remaining Banks
-----------------------
elect not to purchase such an assignment, then, such other remaining Banks shall
be entitled to purchase an assignment from any Terminating Bank which includes
the ratable interest that was otherwise available to such non-purchasing
remaining Bank or Banks, as the case may be, (y) the Borrower shall find another
bank, acceptable to the Agent, willing to accept an assignment from such
terminating Bank (in the form of an Assignment and Acceptance) or (z) the
Borrower shall reduce the aggregate Commitments in an amount equal to the
Commitment of any such terminating Bank. Notwithstanding the foregoing, if the
Termination Date is not extended for an additional one year period on or before
May 22, 1998, then the Borrower may not request that the Termination Date be
extended for an additional one year period on May 22, 1999. In the event of any
extension pursuant to the foregoing, on each Extension Date, the Borrower shall
pay to the Agent, for the ratable account of the Banks, an extension fee equal
to 0.10% of the aggregate amount of the Commitments in effect on such Extension
Date.
SECTION 2.05. Interest Rates. (a) "Applicable Margin" means: (i)
--------------
until the Borrower receives a Debt Rating from at least two of the rating
agencies, (x) for any Base Rate Loan, 0.00%, and (y) for each Euro-Dollar Loan
1.40%; and (ii) from and
25
<PAGE>
after the Borrower receives a Debt Rating from at least two of the rating
agencies, (x) for any Base Rate Loan, 0.00% and (y) for each Euro-Dollar Loan,
the percentage determined on each Performance Pricing Determination Date by
reference to the table set forth below as to such type of Loan and the Debt
Rating for the quarterly or annual period ending immediately prior to such
Performance Pricing Determination Date; provided, that if there is no Debt
Rating from at least two of the rating agencies, the Applicable Margin for Euro-
Dollar Loans shall be based upon Level IV of the table below.
<TABLE>
<CAPTION>
===============================================================================
Level Level Level Level
I II III IV
<S> <C> <C> <C> <C>
(equal to or
greater than)BBB+ BBB BBB- (less than)BBB-
Debt Rating and/1/ and1 and1 and1
Baa1 Baa2 Baa3 Baa3
- -------------------------------------------------------------------------------
Applicable 0.95% 1.10% 1.25% 1.40%
Margin
================================================================================
</TABLE>
In determining the amounts to be paid by the Borrower pursuant to Sections
2.05(b), and 2.06(a), the Borrower and the Banks shall refer to the Borrower's
Debt Rating from time to time. For purposes hereof, "Performance Pricing
Determination Date" shall mean each date on which the Debt Rating changes. Each
change in interest and fees as a result of a change in Debt Rating shall be
effective only for Loans (including Refunding Loans) which are made on or after
the relevant Performance Pricing Determination Date. All determinations
hereunder shall be made by the Agent unless the Required Banks shall object to
any such determination. The Borrower shall promptly notify the Agent of any
change in the Debt Rating.
(b) Each Base Rate Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Loan is made until it
becomes due, at a rate per annum equal to the Base Rate for such day plus the
Applicable Margin. Such interest shall be payable for each Interest Period on
the last day thereof. Any overdue principal of and, to the extent permitted by
applicable law, overdue interest on any Base Rate Loan shall bear interest,
payable on demand, for each day until paid at a rate per annum equal to the
Default Rate.
- -------
/1/ if applicable
26
<PAGE>
(c) Each Euro-Dollar Loan shall bear interest on the outstanding
principal amount thereof, for the Interest Period applicable thereto, at a rate
per annum equal to the sum of the Applicable Margin plus the applicable Adjusted
London Interbank Offered Rate for such Interest Period. Such interest shall be
payable for each Interest Period on the last day thereof and, if such Interest
Period is longer than 3 months, at intervals of 3 months after the first day
thereof. Any overdue principal of and, to the extent permitted by law, overdue
interest on any Euro-Dollar Loan shall bear interest, payable on demand, for
each day until paid at a rate per annum equal to the Default Rate.
The "Adjusted London Interbank Offered Rate" applicable to any
Interest Period means a rate per annum equal to the quotient obtained (rounded
upwards, if necessary, to the next higher 1/100th of 1%) by dividing (i) the
applicable London Interbank Offered Rate for such Interest Period by (ii) 1.00
minus the Euro-Dollar Reserve Percentage.
The "London Interbank Offered Rate" applicable to any Euro-Dollar Loan
means for the Interest Period of such Euro-Dollar Loan, the rate per annum
determined on the basis of the offered rate for deposits in Dollars of amounts
equal or comparable to the principal amount of such Euro-Dollar Loan offered for
a term comparable to such Interest Period, which rates appear on the Telerate
Page 3750 effective as of 11:00 A.M., London time, 2 Euro-Dollar Business Days
prior to the first day of such Interest Period, provided that if no such offered
-------------
rates appear on such page, the "London Interbank Offered Rate" for such Interest
Period will be the arithmetic average (rounded upward, if necessary, to the next
higher 1/100th of 1%) of rates quoted by not less than 2 major banks in New York
City, selected by the Agent, at approximately 10:00 A.M., New York City time, 2
Euro-Dollar Business Days prior to the first day of such Interest Period, for
deposits in Dollars offered by leading European banks for a period comparable to
such Interest Period in an amount comparable to the principal amount of such
Euro-Dollar Loan.
"Euro-Dollar Reserve Percentage" means for any day that percentage
(expressed as a decimal) which is in effect on such day, as prescribed by the
Board of Governors of the Federal Reserve System (or any successor) for
determining the maximum
27
<PAGE>
reserve requirement for a member bank of the Federal Reserve System in respect
of "Eurocurrency liabilities" (or in respect of any other category of
liabilities which includes deposits by reference to which the interest rate on
Euro-Dollar Loans is determined or any category of extensions of credit or other
assets which includes loans by a non-United States office of any Bank to United
States residents). The Adjusted London Interbank Offered Rate shall be adjusted
automatically on and as of the effective date of any change in the Euro-Dollar
Reserve Percentage.
(d) The Agent shall determine each interest rate applicable to the
Loans hereunder. The Agent shall give prompt notice to the Borrower and the
Banks by telecopier of each rate of interest so determined, and its
determination thereof shall be conclusive in the absence of manifest error.
(e) After the occurrence and during the continuance of an Event of
Default, the principal amount of the Loans (and, to the extent permitted by
applicable law, all accrued interest thereon) may, at the election of the
Required Banks, bear interest at the Default Rate.
SECTION 2.06. Fees. (a) The Borrower shall pay to the Agent, for the
----
ratable account of each Bank, a commitment fee, calculated on the average daily
amount of the Unused Commitments, at the rate of (x) when the Average Quarterly
Usage is equal to or less than 50%, 0.18% per annum and (y) when the Average
Quarterly Usage is greater than 50%, 0.125% per annum. Such commitment fees
shall accrue from and including the Closing Date to but excluding the
Termination Date and shall be payable within 5 days after the last day of each
Quarterly Period and on the Termination Date.
(b) The Borrower shall pay to the Agent, for the account and sole
benefit of the Agent, such fees and other amounts at such times as set forth in
the Agent's Letter Agreement, and the Agent shall pay to the Banks the upfront
fee described in the Offering Memorandum dated March, 1997.
SECTION 2.07. Optional Termination or Reduction of Commitments. The
------------------------------------------------
Borrower may, upon at least 3 Domestic Business Days' notice to the Agent,
terminate in its entirety at any time, or proportionately reduce from time to
time, the Unused Commitments by an aggregate amount of at least $10,000,000 or
any larger integral multiple of $1,000,000. If the Commitments
28
<PAGE>
are terminated in their entirety, all accrued fees (as provided under Section
2.06) shall be due and payable on the effective date of such termination.
SECTION 2.08. Mandatory Reduction and Termination of Commitments. The
--------------------------------------------------
Commitments shall terminate on the Termination Date and any Loans then
outstanding (together with accrued interest thereon) shall be due and payable on
such date.
SECTION 2.09. Optional Prepayments. (a) The Borrower may, upon at
--------------------
least 1 Domestic Business Days' notice to the Agent, prepay any Base Rate
Borrowing in whole at any time, or from time to time in part in amounts
aggregating at least $1,000,000 or any larger integral multiple of $500,000 (or
any lesser amount equal to the outstanding balance of such Loan), by paying the
principal amount to be prepaid together with accrued interest thereon to the
date of prepayment. Each such optional prepayment shall be applied to prepay
ratably the Base Rate Loans of the several Banks included in such Base Rate
Borrowing.
(b) Subject to any payments required pursuant to the terms of Article
VIII for such Euro-Dollar Loan, upon 3 Domestic Business Day's prior written
notice, the Borrower may prepay in minimum amounts of $3,000,000 or any larger
integral multiple of $1,000,000 (or any lesser amount equal to the outstanding
balance of such Loan) all or any portion of the principal amount of any Euro-
Dollar Loan prior to the maturity thereof.
(c) Upon receipt of a notice of prepayment pursuant to this Section
2.09, the Agent shall promptly notify each Bank of the contents thereof and of
such Bank's ratable share of such prepayment and such notice, once received by
the Agent, shall not thereafter be revocable by the Borrower.
SECTION 2.10. Mandatory Prepayments. (a) On each date on which the
---------------------
Commitments are reduced pursuant to Section 2.07 or Section 2.08, the Borrower
shall repay or prepay such principal amount of the outstanding Loans, if any
(together with interest accrued thereon and any amount due under Section
8.05(a)), as may be necessary so that after such payment the aggregate unpaid
principal amount of the Loans does not exceed the aggregate amount of the
Commitments as then reduced.
(b) On each date on which the aggregate principal amount of the Loans
outstanding exceeds the Borrowing Base on such date, the Borrower shall repay or
prepay such principal amount of the
29
<PAGE>
outstanding Loans (together with interest thereon and any amount due under
Section 8.05(a)) as may be necessary so that after such payment the aggregate
unpaid principal amount of the Loans does not exceed the Borrowing Base on such
date.
(c) Each such payment or prepayment shall be applied ratably to the Loans
of the Banks outstanding on the date of payment or prepayment in the following
order of priority:(i) first, to Base Rate Loans; and (ii) secondly, to Euro-
Dollar Loans.
SECTION 2.11. General Provisions as to Payments. (a) The Borrower
---------------------------------
shall make each payment of principal of, and interest on, the Loans and of fees
hereunder, not later than 11:00 A.M. (Atlanta, Georgia time) on the date when
due, in Federal or other funds immediately available in Atlanta, Georgia, to
the Agent at its address referred to in Section 9.01. The Agent will promptly
distribute to each Bank its ratable share of each such payment received by the
Agent for the account of the Banks.
(b) Whenever any payment of principal of, or interest on, the Base
Rate Loans or of fees hereunder shall be due on a day which is not a Domestic
Business Day, the date for payment thereof shall be extended to the next
succeeding Domestic Business Day. Whenever any payment of principal of or
interest on, the Euro-Dollar Loans shall be due on a day which is not a Euro-
Dollar Business Day, the date for payment thereof shall be extended to the next
succeeding Euro-Dollar Business Day unless such Euro-Dollar Business Day falls
in another calendar month, in which case the date for payment thereof shall be
the next preceding Euro-Dollar Business Day.
(c) All payments of principal, interest and fees and all other amounts
to be made by the Borrower pursuant to this Agreement with respect to any Loan
or fee relating thereto shall be paid without deduction for, and free from, any
tax, imposts, levies, duties, deductions, or withholdings of any nature now or
at anytime hereafter imposed by any governmental authority or by any taxing
authority thereof or therein excluding in the case of each Bank, taxes imposed
on or measured by its net income, and franchise taxes imposed on it, by the
jurisdiction under the laws of which such Bank is organized or any political
subdivision thereof and, in the case of each Bank, taxes imposed on its income,
and franchise taxes imposed on it, by the jurisdiction of such Bank's applicable
Lending Office or any political subdivision thereof (all such non-excluded
taxes, imposts,
30
<PAGE>
levies, duties, deductions or withholdings of any nature being "Taxes"). In the
event that the Borrower is required by applicable law to make any such
withholding or deduction of Taxes with respect to any Loan or fee or other
amount, the Borrower shall pay such deduction or withholding to the applicable
taxing authority, shall promptly furnish to any Bank in respect of which such
deduction or withholding is made all receipts and other documents evidencing
such payment and shall pay to such Bank additional amounts as may be necessary
in order that the amount received by such Bank after the required withholding or
other payment shall equal the amount such Bank would have received had no such
withholding or other payment been made.
Each Bank which is not organized under the laws of the United States
or any state thereof agrees, as soon as practicable after receipt by it of a
request by the Borrower to do so, to file all appropriate forms and take other
appropriate action to obtain a certificate or other appropriate document from
the appropriate governmental authority in the jurisdiction imposing the relevant
Taxes, establishing that it is entitled to receive payments of principal and
interest under this Agreement and the Notes without deduction and free from
withholding of any Taxes imposed by such jurisdiction; provided that if it is
-------------
unable, for any reason, to establish such exemption, or to file such forms and,
in any event, during such period of time as such request for exemption is
pending, the Borrower shall nonetheless remain obligated under the terms of the
immediately preceding paragraph.
In the event any Bank receives a refund of any Taxes paid by the
Borrower pursuant to this Section 2.11(c), it will pay to the Borrower the
amount of such refund promptly upon receipt thereof; provided that if at any
-------------
time thereafter it is required to return such refund, the Borrower shall
promptly repay to it the amount of such refund.
Without prejudice to the survival of any other agreement of the
Borrower hereunder, the agreements and obligations of the Borrower and the Banks
contained in this Section 2.11(c) shall be applicable with respect to any
Participant, Assignee or other Transferee, and any calculations required by such
provisions (i) shall be made based upon the circumstances of such Participant,
Assignee or other Transferee, and (ii) constitute a continuing agreement and
shall survive the termination of this Agreement and the payment in full or
cancellation of the Notes.
31
<PAGE>
SECTION 2.12. Computation of Interest and Fees. Interest on Base Rate
--------------------------------
Loans shall be computed on the basis of a year of 360 days and paid for the
actual number of days elapsed (including the first day but excluding the last
day). Interest on Euro-Dollar Loans shall be computed on the basis of a year of
360 days and paid for the actual number of days elapsed, calculated as to each
Interest Period from and including the first day thereof to but excluding the
last day thereof. Commitment fees and any other fees payable hereunder shall be
computed on the basis of a year of 360 days and paid for the actual number of
days elapsed (including the first day but excluding the last day).
ARTICLE III
CONDITIONS TO BORROWINGS
SECTION 3.01. Conditions to First Borrowing. The obligation of each
-----------------------------
Bank to make a Loan on the occasion of the first Borrowing is subject to the
satisfaction of the conditions set forth in Section 3.02 and receipt by the
Agent of the following (as to the documents described in paragraphs (a),(c),
(d)and (e) below, in sufficient number of counterparts for delivery of a
counterpart to each Bank and retention of one counterpart by the Agent):
(a) from each of the parties hereto of either (i) a duly executed
counterpart of this Agreement signed by such party or (ii) a facsimile
transmission of such executed counterpart, with the original to be sent to
the Agent by overnight courier);
(b) a duly executed Note for the account of each Bank complying with
the provisions of Section 2.03 and a duly executed Guaranty and
Contribution Agreement;
(c) an opinion letter of Glass, McCullough, Sherrill & Harrold,
counsel for the Borrower, dated as of the Closing Date, substantially in
the form of Exhibit B and covering such additional matters relating to the
---------
transactions contemplated hereby as the Agent or any Bank may reasonably
request;
(d) an opinion of Jones, Day, Reavis & Pogue, special counsel for the
Agent, dated as of the Closing Date,
32
<PAGE>
substantially in the form of Exhibit C and covering such additional matters
---------
relating to the transactions contemplated hereby as the Agent may
reasonably request;
(e) a certificate (the "Closing Certificate") substantially in the
form of Exhibit G), dated as of the Closing Date, signed by a principal
---------
financial officer of the Borrower, to the effect that, to the best of his
or her knowledge, (i) no Default has occurred and is continuing on the date
of the first Borrowing and (ii) the representations and warranties of the
Borrower contained in Article IV are true on and as of the date of the
first Borrowing hereunder;
(f) all documents which the Agent or any Bank may reasonably request
relating to the existence of the Borrower, the corporate authority for and
the validity of this Agreement, the Notes and the Contribution Agreement,
and any other matters relevant hereto, all in form and substance
satisfactory to the Agent, including, without limitation, a certificate of
the Borrower substantially in the form of Exhibit H (the "Officer's
---------
Certificate"), signed by the Secretary or an Assistant Secretary of the
Borrower and as to the names, true signatures and incumbency of the officer
or officers of the Borrower authorized to execute and deliver the Loan
Documents, and certified copies of the following items for the Borrower (i)
its Certificate of Incorporation, (ii) its Bylaws, (iii) a certificate of
the Secretary of State of the State of its incorporation as to its good
standing as a corporation incorporated therein, and (iv) the action taken
by its Board of Directors authorizing the execution, delivery and
performance of the Loan Documents to which it is a party;
(g) a Notice of Borrowing;
(h) receipt of the initial Borrowing Base Certificate, showing the
Borrowing Base as of last day of the Fiscal Quarter ending prior to the
Closing Date;
(i) termination and payment in full of the existing line of credit
facility from Bankers Trust Company (and proceeds of Loans on the Closing
Date may be used for such purpose);
(j) review by the Agent of all applicable mortgage documents relating
to the Cross Pointe Centre Property; and
33
<PAGE>
(k) receipt of all fees payable to the Agent on the Closing Date
pursuant to the Agent's Letter Agreement.
In addition, if the Borrower desires funding of a Euro-Dollar Loan on the
Closing Date, the Agent shall have received, the requisite number of days prior
to the Closing Date, a funding indemnification letter satisfactory to it,
pursuant to which (i) the Agent and the Borrower shall have agreed upon the
interest rate, amount of Borrowing and Interest Period for such Euro-Dollar
Loan, and (ii) the Borrower shall indemnify the Banks from any loss or expense
arising from the failure to close on the anticipated Closing Date identified in
such letter or the failure to borrow such Euro-Dollar Loan on such date.
SECTION 3.02. Conditions to All Borrowings. The obligation of each
----------------------------
Bank to make a Loan on the occasion of each Borrowing is subject to the
satisfaction of the following conditions except as expressly provided in the
last sentence of this Section 3.02:
(a) receipt by the Agent of a Notice of Borrowing.
(b) the fact that, immediately before and after such Borrowing, no
Default shall have occurred and be continuing;
(c) the fact that the representations and warranties of the Borrower
and each Guarantor contained in Article IV of this Agreement shall be true
on and as of the date of such Borrowing; and
(d) the fact that, immediately after such Borrowing, the conditions
set forth in clauses (i) and (ii) of Section 2.01 shall have been
satisfied.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the truth and accuracy of the
facts specified in paragraphs (b), (c) and (d) of this Section; provided that if
-------------
such Borrowing is a Borrowing which consists solely of a Refunding Loan, such
Borrowing shall not be deemed to be such a representation and warranty to the
effect set forth in Section 4.04(b) as to any event, act or condition having a
Material Adverse Effect which has theretofore been disclosed in writing by the
Borrower to the Banks.
34
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
The Borrower and (by incorporation by reference in the Guaranty) the
Guarantors, as expressly stated, each represents and warrants that:
SECTION 4.01. Corporate Existence and Power. The Borrower and each
------------------------------
Guarantor is a corporation duly organized, validly existing and in good standing
under the laws of the jurisdiction of its incorporation, is duly qualified to
transact business in every jurisdiction where, by the nature of its business,
such qualification is necessary, and has all corporate powers and all
governmental licenses, authorizations, consents and approvals required to carry
on its business as now conducted.
SECTION 4.02. Corporate and Governmental Authorization; No
--------------------------------------------
Contravention. The execution, delivery and performance by the Borrower of this
- -------------
Agreement, the Notes and the other Loan Documents and by the Guarantors of the
Guaranty (i) are within the Borrower's or such Guarantor's corporate powers,
(ii) have been duly authorized by all necessary corporate action, (iii) require
no action by or in respect of or filing with, any governmental body, agency or
official, (iv) do not contravene, or constitute a default under, any provision
of applicable law or regulation or of the certificate of incorporation or by-
laws of the Borrower or any Guarantor or of any agreement, judgment, injunction,
order, decree or other instrument binding upon the Borrower or any Guarantor and
(v) do not result in the creation or imposition of any Lien on any asset of the
Borrower or any of Guarantor.
SECTION 4.03. Binding Effect. This Agreement constitutes a valid and
---------------
binding agreement of the Borrower enforceable in accordance with its terms, and
the Notes, the Guaranty and the other Loan Documents, when executed and
delivered in accordance with this Agreement, will constitute valid and binding
obligations of the Borrower and the Guarantor parties thereto, enforceable in
accordance with their respective terms, provided that the enforceability hereof
--------
and thereof is subject in each case to general principles of equity and to
bankruptcy, insolvency and similar laws affecting the enforcement of creditors'
rights generally.
35
<PAGE>
SECTION 4.04. Financial Information. (a) The consolidated balance
----------------------
sheet of the Borrower as of December 31, 1996 and the related consolidated
statements of income, shareholders' equity and cash flows for the Fiscal Year
then ended, reported on by Ernst & Young LLP, copies of which have been
delivered to each of the Banks, fairly present, in conformity with GAAP, the
consolidated financial position of the Borrower and its Consolidated
Subsidiaries as of such dates and their consolidated results of operations and
cash flows for such periods stated.
(b) Since December 31, 1996 there has been no event, act, condition or
occurrence having a Material Adverse Effect.
SECTION 4.05. No Litigation. There is no action, suit or proceeding
--------------
pending, or to the knowledge of the Borrower threatened, against or affecting
the Borrower or any of its Subsidiaries before any court or arbitrator or any
governmental body, agency or official which could have a Material Adverse
Effect or which in any manner draws into question the validity of or could
impair the ability of the Borrower to perform its obligations under, this
Agreement, the Notes or any of the other Loan Documents.
SECTION 4.06. Compliance with ERISA. (a) The Borrower and each member
----------------------
of the Controlled Group have fulfilled their obligations under the minimum
funding standards of ERISA and the Code with respect to each Plan and are in
compliance in all material respects with the presently applicable provisions of
ERISA and the Code, and have not incurred any liability to the PBGC or a Plan
under Title IV of ERISA.
(b) Neither the Borrower nor any member of the Controlled Group is or
ever has been obligated to contribute to any Multiemployer Plan.
SECTION 4.07. Compliance with Laws; Payment of Taxes. To the best of
---------------------------------------
the Borrower's knowledge, the Borrower and its Subsidiaries are in compliance
with all applicable laws, regulations and similar requirements of governmental
authorities, except where such compliance is being contested in good faith
through appropriate proceedings. There have been filed on behalf of the
Borrower and its Subsidiaries all material Federal, state and local income,
excise, property and other tax returns which are required to be filed by them
and all taxes due pursuant to such returns or pursuant to any assessment
received by or on
36
<PAGE>
behalf of the Borrower or any Subsidiary have been paid. The charges, accruals
and reserves on the books of the Borrower and its Subsidiaries in respect of
taxes or other governmental charges are, in the opinion of the Borrower,
adequate.
SECTION 4.08. Subsidiaries. Each of the Borrower's Subsidiaries is a
------------
corporation duly organized, validly existing and in good standing under the laws
of its jurisdiction of incorporation, is duly qualified to transact business in
every jurisdiction where, by the nature of its business, such qualification is
necessary, and has all corporate powers and all governmental licenses,
authorizations, consents and approvals required to carry on its business as now
conducted. The Borrower has no Subsidiaries except for those Subsidiaries
listed on Schedule 4.08, which accurately sets forth each such Subsidiary's
complete name and jurisdiction of incorporation.
SECTION 4.09. Investment Company Act. Neither the Borrower nor any of
-----------------------
its Subsidiaries is an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 4.10. Public Utility Holding Company Act. Neither the
-----------------------------------
Borrower nor any of its Subsidiaries 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", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property; Liens. Each of the Borrower and
-----------------------------
its Consolidated Subsidiaries has title to its properties sufficient for the
conduct of its business, and none of such property which constitutes Eligible
Property is subject to any Lien except as permitted in Section 5.18.
SECTION 4.12. No Default. To the best of Borrower's knowledge,
-----------
neither the Borrower nor any of its Consolidated Subsidiaries is in default
under or with respect to any agreement, instrument or undertaking to which it is
a party or by which it or any of its property is bound which could have or cause
a Material Adverse Effect. No Default or Event of Default has occurred and is
continuing.
SECTION 4.13. Full Disclosure. All information heretofore furnished
----------------
by the Borrower to the Agent or any Bank for purposes of or in connection with
this Agreement or any
37
<PAGE>
transaction contemplated hereby is, and all such information hereafter furnished
by the Borrower to the Agent or any Bank will be, true, accurate and complete in
every material respect or based on reasonable estimates on the date as of which
such information is stated or certified. The Borrower has disclosed to the Banks
in writing any and all facts which could have or cause a Material Adverse
Effect.
SECTION 4.14. Environmental Matters. (a) Except as set forth in
----------------------
Schedule 4.14, to the best of the Borrower's knowledge, neither the Borrower nor
any Subsidiary is subject to any Environmental Liability which could have or
cause a Material Adverse Effect and neither the Borrower nor any Subsidiary has
been designated as a potentially responsible party under CERCLA or under any
state statute similar to CERCLA. None of the Properties has been identified on
any current or proposed (i) National Priorities List under 40 C.F.R. (S) 300,
(ii) CERCLIS list or (iii) any list arising from a state statute similar to
CERCLA.
(b) Except as set forth in Schedule 4.14, to the best of the
Borrower's knowledge, no Hazardous Materials have been or are being used,
produced, manufactured, processed, treated, recycled, generated, stored,
disposed of, managed or otherwise handled at, or shipped or transported to or
from the Properties or are otherwise present at, on, in or under the Properties,
or, to the best of the knowledge of the Borrower, at or from any adjacent site
or facility, except for Hazardous Materials, such as cleaning solvents,
pesticides and other materials used, produced, manufactured, processed, treated,
recycled, generated, stored, disposed of, managed, or otherwise handled in the
ordinary course of business in material compliance with all applicable
Environmental Requirements.
(c) Except as set forth in Schedule 4.14, to the best of the
Borrower's knowledge, the Borrower, and each of its Subsidiaries and Affiliates,
has procured all Environmental Authorizations necessary for the conduct of its
business, and is in compliance with all Environmental Requirements in connection
with the operation of the Properties and the Borrower's, and each of its
Subsidiary's and Affiliate's, respective businesses.
SECTION 4.15. Capital Stock. All Capital Stock, debentures, bonds,
--------------
notes and all other securities of the Borrower and its Subsidiaries presently
issued and outstanding are validly and properly issued in all material respects
in accordance with all applicable laws, including, but not limited to, the "Blue
38
<PAGE>
Sky" laws of all applicable states and the federal securities laws. The issued
shares of Capital Stock of the Borrower's Wholly Owned Subsidiaries are owned by
the Borrower free and clear of any Lien or adverse claim. At least a majority
of the issued shares of capital stock of each of the Borrower's other
Subsidiaries (other than Wholly Owned Subsidiaries) is owned by the Borrower,
and all such shares which are owned by the Borrower are owned by it free and
clear of any Lien or adverse claim (other than, with respect to any JDN Venture,
any rights of first refusal and buy/sell obligations in favor of other parties
to such JDN Venture).
SECTION 4.16. Margin Stock. Neither the Borrower nor any of its
-------------
Subsidiaries is engaged principally, or as a significant part of its business,
in the business of purchasing or carrying any Margin Stock, and no part of the
proceeds of any Loan will be used to purchase or carry any Margin Stock or to
extend credit to others for the purpose of purchasing or carrying any Margin
Stock (other than loans to employees for the purchase of Capital Stock pursuant
to options granted by the Borrower), or be used for any purpose which violates,
or which is inconsistent with, the provisions of Regulation G,T, U or X.
SECTION 4.17. Insolvency. After giving effect to the execution and
-----------
delivery of the Loan Documents and the making of the Loans under this Agreement:
(i) the Borrower will not (x) be "insolvent," within the meaning of such term as
used in O.C.G.A. (S) 18-2-22 or as defined in (S) 101 of the "Bankruptcy Code",
or Section 2 of either the "UFTA" or the "UFCA", or as defined or used in any
"Other Applicable Law" (as those terms are defined below), or (y) be unable to
pay its debts generally as such debts become due within the meaning of Section
548 of the Bankruptcy Code, Section 4 of the UFTA or Section 6 of the UFCA, or
(z) have an unreasonably small capital to engage in any business or transaction,
whether current or contemplated, within the meaning of Section 548 of the
Bankruptcy Code, Section 4 of the UFTA or Section 5 of the UFCA; and (ii) the
obligations of the Borrower under the Loan Documents and with respect to the
Loans will not be rendered avoidable under any Other Applicable Law. For
purposes of this Section 4.17, "Bankruptcy Code" means Title 11 of the United
States Code, "UFTA" means the Uniform Fraudulent Transfer Act, "UFCA" means the
Uniform Fraudulent Conveyance Act, and "Other Applicable Law" means any other
applicable law pertaining to fraudulent transfers or acts voidable by creditors,
in each case as such law may be amended from time to time.
39
<PAGE>
SECTION 4.18. Insurance. The Borrower and each of its Subsidiaries
---------
has (either in the name of the Borrower or in such Subsidiary's own name), or
has caused its tenants to obtain (or, for tenants approved by the Agent), to
provide self-insurance with respect thereto), with financially sound and
reputable insurance companies, all-risk insurance in at least such amounts and
against at least such risks (including on all its property, and public liability
and worker's compensation) as are usually insured against in the same general
area by companies of established repute engaged in the same or similar business.
SECTION 4.19. Real Estate Investment Trust. The Borrower is
----------------------------
qualified under the Code as a real estate investment trust.
ARTICLE V
COVENANTS
The Borrower and (by incorporation by reference in the Guaranty) the
Guarantors agree that, so long as any Bank has any Commitment hereunder or any
amount payable hereunder or under any Note remains unpaid:
SECTION 5.01. Information. The Borrower will deliver to each of the
------------
Banks:
(a) as soon as available and in any event within 90 days after the end
of each Fiscal Year, either (i) an executed copy of the Annual Report on
Form 10K for such Fiscal Year, or (ii) a consolidated balance sheet of the
Borrower and the
Guarantors as of the end of such Fiscal Year and the related consolidated
statements of income, shareholders' equity and cash flows for such Fiscal
Year, setting forth in each case in comparative form the figures for the
previous fiscal year, in either case audited by Ernst & Young LLP or other
independent public accountants of nationally recognized standing, with such
audit opinion to be free of exceptions and qualifications not acceptable to
the Required Banks;
(b) as soon as available and in any event within 45 days after the end
of each of the first 3 Fiscal Quarters of each Fiscal Year, either (i) an
executed copy of the Quarterly Report on Form 10Q for such Fiscal Quarter,
or (ii) a consolidated balance sheet of the Borrower and the
40
<PAGE>
Guarantors as of the end of such Fiscal Quarter and the related statement
of income and statement of cash flows for such Fiscal Quarter and for the
portion of the Fiscal Year ended at the end of such Fiscal Quarter, setting
forth in each case in comparative form the figures for the corresponding
Fiscal Quarter and the corresponding portion of the previous Fiscal Year,
all certified (subject to normal year-end adjustments) as to fairness of
presentation, GAAP and consistency by the chief financial officer or the
chief accounting officer of the Borrower;
(c) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, a certificate,
substantially in the form of Exhibit F (a "Compliance Certificate"), of the
---------
chief financial officer or the chief accounting officer of the Borrower (i)
setting forth in reasonable detail the calculations required to establish
whether the Borrower was in compliance with the requirements of Sections
5.05, 5.15, 5.16, 5.17, 5.20 through 5.25, inclusive, on the date of such
financial statements and (ii) stating whether any Default exists on the
date of such certificate and, if any Default then exists, setting forth the
details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(d) simultaneously with the delivery of each set of annual financial
statements referred to in paragraph (a) above, a statement of the firm of
independent public accountants which reported on such statements to the
effect that nothing has come to their attention to cause them to believe
that any Default existed under Sections 5.20 through 5.24, inclusive, or
Section 6.01(e) or (f) on the date of such financial statements;
(e) within 5 Domestic Business Days after the Borrower becomes aware
of the occurrence of any Default, a certificate of the chief financial
officer or the chief accounting officer of the Borrower setting forth the
details thereof and the action which the Borrower is taking or proposes to
take with respect thereto;
(f) promptly upon the mailing thereof to the shareholders of the
Borrower generally, copies of all financial statements, reports and proxy
statements so mailed;
41
<PAGE>
(g) promptly upon the filing thereof, copies of all registration
statements (other than the exhibits thereto and any registration statements
on Form S-8 or its equivalent) and annual, quarterly or monthly reports
which the Borrower shall have filed with the Securities and Exchange
Commission;
(h) if and when any member of the Controlled Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined
in Section 4043 of ERISA) with respect to any Plan which might constitute
grounds for a termination of such Plan under Title IV of ERISA, or knows
that the plan administrator of any Plan has given or is required to give
notice of any such reportable event, a copy of the notice of such
reportable event given or required to be given to the PBGC; (ii) receives
notice of complete or partial withdrawal liability under Title IV of ERISA,
a copy of such notice; or (iii) receives notice from the PBGC under Title
IV of ERISA of an intent to terminate or appoint a trustee to administer
any Plan, a copy of such notice;
(i) within 45 days after the end of each Fiscal Quarter, a Borrowing
Base Certificate as of the last day of the Fiscal Quarter just ended, and,
prior to the date of any removal or addition of any Property from the
Borrowing Base, a Borrowing Base Certificate as of such date, giving effect
to such removal or addition;
(j) simultaneously with the delivery of each set of financial
statements referred to in paragraphs (a) and (b) above, operating
statements for each Eligible Property for the period covered by such
financial statements; and
(k) from time to time such additional information regarding the
financial position or business of the Borrower and the Guarantors as the
Agent, at the request of any Bank, may reasonably request.
SECTION 5.02. Inspection of Property, Books and Records. The Borrower
------------------------------------------
and the Guarantors will (i) keep proper books of record and account in which
full, true and correct entries in conformity with GAAP shall be made of all
dealings and transactions in relation to its business and activities; and (ii)
permit representatives of any Bank at such Bank's expense prior to the
occurrence of a Default and at the Borrower's expense
42
<PAGE>
after the occurrence of a Default to visit and inspect any of their respective
properties, to examine and make abstracts from any of their respective books and
records and to discuss their respective affairs, finances and accounts with
their respective officers, employees and independent public accountants. The
Borrower and the Guarantors agree to cooperate and assist in such visits and
inspections, in each case at such reasonable times and as often as may
reasonably be desired.
SECTION 5.03. Maintenance of Existence. The Borrower shall and the
------------------------
Guarantors will each maintain its corporate existence and carry on its business
in substantially the same manner and in substantially the same fields as such
business is now carried on and maintained.
SECTION 5.04. Dissolution. Neither the Borrower nor any of the
-----------
Guarantors shall suffer or permit dissolution or liquidation either in whole or
in part or redeem or retire any shares of its own stock or that of any
Guarantor, except an established stock repurchase program of which the Agent has
been notified or through corporate reorganization to the extent permitted by
Section 5.05.
SECTION 5.05. Consolidations, Mergers and Sales of Assets. Neither
--------------------------------------------
the Borrower nor any of the Guarantors will consolidate or merge with or into,
or acquire all or substantially all of the assets or stock of any other Person,
or sell, lease or otherwise transfer all or any substantial part of its assets
to, any other Person, provided that:
--------
(i) the Borrower may merge with another Person if (x) such Person was
organized under the laws of the United States of America or one of its
states, (y) the Borrower is the corporation surviving such merger and (z)
immediately after giving effect to such merger, no Default shall have
occurred and be continuing;
(ii) Guarantors may merge with one another, and the Guarantors may
sell, lease or otherwise transfer assets to the Borrower;
(iii) the foregoing limitation on the acquisition of all or
substantially all the assets or stock of another Person shall not prohibit,
during any Fiscal Quarter, the acquisition of all or substantially all of
the assets or stock of another Person unless the aggregate assets or stock
43
<PAGE>
acquired in a single acquisition or series of related acquisitions of all
or substantially all of the assets or stock of another Person by the
Borrower and the Guarantors during such Fiscal Quarter constituted more
than 20% of Gross Asset Value at the end of the most recent Fiscal Quarter
immediately preceding such Fiscal Quarter; and
(iv) the foregoing limitation on the sale, lease or other transfer of
assets shall not prohibit, during any Fiscal Quarter, a transfer of assets
(in a single transaction or in a series of related transactions) unless the
aggregate assets to be so transferred, when combined with all other assets
transferred, by the Borrower and the Guarantors during such Fiscal Quarter
and the immediately preceding 3 Fiscal Quarters, constituted more than 20%
of Gross Asset Value at the end of the most recent Fiscal Quarter
immediately preceding such Fiscal Quarter.
In the case of any Guarantor which transfers substantially all of its
assets pursuant to clause (iv) of the preceding sentence, and in the case of any
Guarantor the stock of which is being sold and with respect to which clause (iv)
would have been satisfied if the transaction had been a sale of assets of such
Guarantor, such Guarantor may dissolve and shall be entitled to obtain from the
Agent a written release from the Guaranty, provided that it can demonstrate to
--------
the reasonable satisfaction of the Agent that (A) it has repaid in full all Debt
owed to the Borrower or any other Guarantor and (B) such sale was for cash and
in the case of an asset transfer, the net cash proceeds received in connection
therewith are being distributed to the Borrower as part of such dissolution, and
upon obtaining such written release, it shall no longer be a Guarantor for any
purpose hereunder.
SECTION 5.06. Use of Proceeds. The proceeds of the Loans may be used
---------------
for working capital and general corporate purposes; provided, however, that no
-----------------
portion of the proceeds of the Loans will be used by the Borrower or any
Subsidiary (i) in connection with, whether directly or indirectly, any tender
offer for, or other acquisition of, stock of any corporation with a view
towards obtaining control of such other corporation, unless such tender offer or
other acquisition is to be made on a negotiated basis with the approval of the
Board of Directors of the Person to be acquired, and the provisions of Section
5.17 would not be violated, (ii) directly or indirectly, for the purpose,
whether immediate, incidental or ultimate, of purchasing
44
<PAGE>
or carrying any Margin Stock, or (iii) for any purpose in violation of any
applicable law or regulation.
SECTION 5.07. Compliance with Laws; Payment of Taxes. [(a)] The
---------------------------------------
Borrower and the Guarantors will, and will cause each member of the Controlled
Group to, comply with applicable laws (including but not limited to ERISA),
regulations and similar requirements of governmental authorities (including but
not limited to PBGC), except where the necessity of such compliance is being
contested in good faith through appropriate proceedings diligently pursued. The
Borrower and the Guarantors will pay promptly when due all taxes, assessments,
governmental charges, claims for labor, supplies, rent and other obligations
which, if unpaid, might become a lien against the Property of the Borrower or
any Guarantor, except liabilities being contested in good faith and against
which, if requested by the Agent, the Borrower will set up reserves in
accordance with GAAP.
SECTION 5.08. Insurance. The Borrower and the Guarantors will
---------
maintain (either in the name of the Borrower or in such Guarantor's own name),
or will cause its tenants to obtain, with financially sound and reputable
insurance companies (or, for tenants which have been approved in writing by the
Agent self insurance), all-risk insurance on all its property in at least such
amounts and against at least such risks (including on all its property, and
public liability and worker's compensation) as are usually insured against in
the same general area by companies of established repute engaged in the same or
similar business.
SECTION 5.09. Change in Fiscal Year. The Borrower and each of the
---------------------
Guarantors agrees that it will not change its Fiscal Year without the consent of
the Required Banks.
SECTION 5.10. Maintenance of Property. The Borrower and each
-----------------------
Guarantor shall maintain all of its Properties and assets in good condition,
repair and working order, ordinary wear and tear excepted.
SECTION 5.11. Environmental Notices. The Borrower and each Guarantor
---------------------
shall furnish to the Banks and the Agent prompt written notice of all
Environmental Liabilities, pending, threatened or anticipated Environmental
Proceedings, Environmental Notices, Environmental Judgments and Orders, and
Environmental Releases at, on, in, under or in any way affecting
45
<PAGE>
the Properties or any adjacent property, and all facts, events, or conditions
that could lead to any of the foregoing.
SECTION 5.12. Environmental Matters. The Borrower and the Guarantors
---------------------
will not, and will not permit any Third Party to, use, produce, manufacture,
process, treat, recycle, generate, store, dispose of, manage at, or otherwise
handle, or ship or transport to or from the Properties any Hazardous Materials
except for Hazardous Materials such as cleaning solvents, pesticides and other
similar materials used, produced, manufactured, processed, treated, recycled,
generated, stored, disposed, managed, or otherwise handled in minimal amounts in
the ordinary course of business in compliance with all applicable Environmental
Requirements.
SECTION 5.13. Environmental Release. The Borrower and each Guarantor
---------------------
agrees that upon the occurrence of an Environmental Release at or on any of the
Properties it will act immediately to investigate the extent of, and to take
appropriate remedial action to eliminate, such Environmental Release, whether or
not ordered or otherwise directed to do so by any Environmental Authority.
SECTION 5.14. Transactions with Affiliates. Neither the Borrower nor
----------------------------
any of the Guarantors shall enter into, or be a party to, any transaction with
any Affiliate of the Borrower or such Guarantor (which Affiliate is not the
Borrower or a Guarantor), except as permitted by law and in the ordinary course
of business and pursuant to reasonable terms which are no less favorable to
Borrower or such Subsidiary than would be obtained in a comparable arm's length
transaction with a Person which is not an Affiliate.
SECTION 5.15. Restricted Payments. The Borrower's Restricted Payments
-------------------
in any calendar year shall not exceed 95% of Funds from Operations for such
period, unless the Borrower must pay out an amount in excess of 95% of Funds
from Operations to permit the Borrower to preserve its status as a real estate
investment trust under the applicable provision of the Code.
SECTION 5.16. Loans or Advances. Neither the Borrower nor any of the
-----------------
Guarantors shall make loans or advances to any Person except as permitted by
Section 5.17 and except:
46
<PAGE>
(i) loans or advances to employees and directors not exceeding
$10,000,000 in the aggregate principal amount outstanding at any time;
(ii) deposits required by government agencies or public utilities;
(iii) loans or advances from the Borrower to a Guarantor or from a
Guarantor to the Borrower or another Guarantor; and/or
(iv) other loans and advances by the Borrower and the Guarantors to
any JDN Venture which (x) are evidenced by notes (and, if requested by the
Agent, acting at the direction of the Required Banks, with such notes,
together with any related mortgage, have been assigned to and pledged with
the Agent, for the benefit of itself and the Banks, as security for the
payment of all obligations of the Borrower to the Agent and the Banks
hereunder) and (y) are in an amount which, together with Investments
permitted by clause (vi) of Section 5.17, do not exceed 15% of Gross Asset
Value as of the end of the most recent Fiscal Quarter;
provided that after giving effect to the making of any loans, advances or
- --------
deposits permitted by this Section, and no Default shall be in existence or be
created thereby.
SECTION 5.17. Investments. Investments of the Borrower as of the
-----------
Closing Date (other than in Subsidiaries, which are set forth in Schedule 4.08),
are set forth on Schedule 5.17. Neither the Borrower nor any of the Guarantors
shall make Investments after the Closing Date in any Person except as permitted
by Section 5.16 and except Investments in:
(i) direct obligations of the United States Government maturing within
one year;
(ii) certificates of deposit issued by a commercial bank whose credit
is satisfactory to the Agent;
(iii) commercial paper rated A1 or the equivalent thereof by S&P or P1
or the equivalent thereof by Moody's and in either case maturing within 6
months after the date of acquisition;
47
<PAGE>
(iv) tender bonds the payment of the principal of and interest on
which is fully supported by a letter of credit issued by a United States
bank whose long-term certificates of deposit are rated at least AA or the
equivalent thereof by S&P and Aa or the equivalent thereof by Moody's,; and
(v) Investments consisting of the acquisition of all or substantially
all of the assets or stock of another Person permitted by Section
5.05(iii); and/or
(vi) other Investments by the Borrower and the Guarantors in an amount
which, (x) together with loans and advances permitted by clause (iv) of
Section 5.16, do not exceed 15% of Gross Asset Value as of the end of the
most recent Fiscal Quarter, and (y) with respect to Investments in Persons
over which, after giving effect to such Investment, the Borrower or the
Guarantors do not have Control, do not exceed 5% of Gross Asset Value as of
the end of the most recent Fiscal Quarter;
provided, however, immediately after giving effect to the making of any
- -----------------
Investment, no Default shall have occurred and be continuing.
SECTION 5.18. Liens on Eligible Property. Neither the Borrower nor
--------------------------
any Guarantor will create, assume or suffer to exist any Lien on any Eligible
Property now owned or hereafter acquired by it, except Liens incidental to the
conduct of its business or the ownership of its assets which (i) do not secure
Debt and (ii) do not in the aggregate materially detract from the value of its
assets or materially impair the use thereof in the operation of its business;
provided, however, that from and after the date the Borrower achieves a Debt
- -----------------
Rating of at least BBB- from S&P or Baa3 from Moody's, and so long as no Event
of Default is in existence when such rating is first achieved, and the Borrower
has at that time furnished the Agent with a certificate to the effect that it is
not aware of any Default in existence at such time, the covenant contained in
this Section 5.18 shall terminate and be of no further force and effect.
SECTION 5.19. Restrictions on Ability of Guarantors to Pay Dividends.
-------------------------------------------------------
The Borrower shall not permit any Guarantor to, directly or indirectly, create
or otherwise cause or suffer to exist or become effective any encumbrance or
restriction on the ability of any such Guarantor to (i) pay any dividends or
make any other distributions on its Capital Stock or any other
48
<PAGE>
interest or (ii) make or repay any loans or advances to the Borrower or the
parent of such Guarantor.
SECTION 5.20. Ratio of Total Consolidated Liabilities to Gross Asset
------------------------------------------------------
Value. The ratio of Total Consolidated Liabilities to Gross Asset Value shall at
- -----
all times be equal to or less than 0.55 to 1.0.
SECTION 5.21. Ratio of Total Secured Debt to Gross Asset Value. The
------------------------------------------------
ratio of Total Secured Debt to Gross Asset Value shall at all times be equal to
or less than: (i) until the earlier of (x) repayment in full of the REMIC
Financing and (y) September 30, 1997, 0.45 to 1.00; and (ii) thereafter, 0.40 to
1.0.
SECTION 5.22. Ratio of EBITDA to Consolidated Interest Expense. The
------------------------------------------------
ratio of EBITDA to Consolidated Interest Expense for the Fiscal Quarter just
ended and the 3 immediately preceding Fiscal Quarters will not be less than 2.0
to 1.00, calculated at the end of each Fiscal Quarter.
SECTION 5.23. Ratio of Unencumbered Assets to Unsecured Funded Debt.
-------------------------------------------------------
The ratio of Unencumbered Assets to Unsecured Funded Debt shall at all times be
equal to or greater than 1.75 to 1.00.
SECTION 5.24. Ratio of Unsecured Net Operating Income to Unsecured
----------------------------------------------------
Interest Expense. The ratio of Unsecured Net Operating Income to Unsecured
- ----------------
Interest Expense shall at all times be equal to or greater than 1.75 to 1.0.
SECTION 5.25. Guarantees. Neither the Borrower nor any Guarantor will
----------
create, assume or suffer to exist any Guarantees of Debt of other Persons,
except (i) Guarantees in existence on the Closing Date in the aggregate amount
of $36,643,000 and set forth on Schedule 5.25, (ii) Guarantees of Debt of the
Borrower or other Guarantors and (iii) other Guarantees in an aggregate amount
not exceeding at any time 10% of Gross Asset Value as of the last day of the
Fiscal Quarter just ended.
SECTION 5.26. Additional Revolving Credit. Neither the Borrower nor
---------------------------
any Guarantor will create, assume or suffer to exist any Debt for money borrowed
pursuant to revolving credit arrangements, except (i) Debt under this Agreement
and (ii) other Debt of such type not to exceed at any time a maximum of
$25,000,000 of principal and commitments.
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SECTION 5.27. Ownership. The Borrower shall at all times own 100% of
---------
JDN Structured Finance 1, Inc. and 99% of the capital stock of JDN Development
Company, Inc.
SECTION 5.28. Status as a REIT. The Borrower shall at all times
----------------
maintain its status as a real estate investment trust under the Code.
SECTION 5.29. New Subsidiaries to Become Guarantors. Any Subsidiary
-------------------------------------
acquired or created after the Closing Date, must become a Guarantor promptly
upon becoming a Significant Subsidiary, and JDN Structured Finance 1, Inc., upon
payment in full of the REMIC Financing must become a Guarantor promptly after
such repayment (unless it is to be dissolved or merged into the Borrower
contemporaneously with or shortly after such repayment), in each case by (x)
executing and delivering to the Agent a counterpart of the Guaranty and a
counterpart of the Contribution Agreement (which the Borrower agrees to execute
when the initial Guarantor executes it), thereby becoming a party to each of
them, (y) delivering to the Agent an opinion of counsel to such Subsidiary, in
substantially the form and substance of Exhibit B, but limited to such
---------
Subsidiary and the Guaranty and Contribution Agreement, and excluding paragraph
2 thereof, and (z) delivering to the Agent documents pertaining to the
Subsidiary reasonably requested by the Agent of the types described in paragraph
(f) of Section 3.01, but relating to the Guaranty and the Contribution
Agreement.
ARTICLE VI
DEFAULTS
SECTION 6.01. Events of Default. If one or more of the following
-----------------
events ("Events of Default") shall have occurred and be continuing:
(a) the Borrower shall fail to pay when due any principal of any Loan
or shall fail to pay any interest on any Loan within 5 Domestic Business
Days after such interest shall become due, or shall fail to pay any fee or
other amount payable hereunder within 5 Domestic Business Days after such
fee or other amount becomes due; or
(b) the Borrower shall fail to observe or perform any covenant
contained in Sections 5.01(e), 5.01(i), 5.02(ii),
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5.03 through 5.06, inclusive, or Sections 5.17 through 5.29, inclusive; or
(c) the Borrower or any Guarantor shall fail to observe or perform any
covenant or agreement contained or incorporated by reference in this
Agreement (other than those covered by paragraph (a) or (b) above) or the
Guaranty and such failure shall not have been cured within 30 days after
the earlier to occur of (i) written notice thereof has been given to the
Borrower or such Guarantor by the Agent at the request of any Bank or (ii)
the Borrower or such Guarantor otherwise becomes aware of any such failure;
or
(d) any representation, warranty, certification or statement made by
the Borrower or any Guarantor in Article IV of this Agreement or the
Guaranty or in any certificate, financial statement or other document
delivered pursuant to this Agreement or the Guaranty shall prove to have
been incorrect or misleading in any material respect when made (or deemed
made); or
(e) the Borrower or any Guarantor shall fail to make any payment in
respect of Debt in an aggregate principal amount outstanding in excess of
$5,000,000 (other than the Notes) when due or within any applicable grace
period; or
(f) any event or condition shall occur which results in the
acceleration of the maturity of Debt in an aggregate principal amount
outstanding in excess of $5,000,000 of the Borrower, any Guarantor
(including, without limitation, any required mandatory prepayment or "put"
of such Debt to the Borrower or any Subsidiary) or enables (or, with the
giving of notice or lapse of time or both, would enable) the holders of
such Debt or commitment or any Person acting on such holders' behalf to
accelerate the maturity thereof or terminate any such commitment
(including, without limitation, any required mandatory prepayment or "put"
of such Debt to the Borrower or any Guarantor); provided, however, that
-----------------
there shall be excluded from the foregoing any Non-Recourse Mortgage Debt
which, on a cumulative basis since the Closing Date, together with Non-
Recourse Mortgage Debt of JDN Ventures permitted by the proviso in
paragraph (g) below, does not exceed $20,000,000 in aggregate principal
amount; or
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(g) failure of any JDN Venture to make any payment when due,
including payment of principal or interest (whether by acceleration or
otherwise), on any obligation of such JDN Venture, the aggregate
outstanding principal amount of which (whether or not then due) exceeds
$5,000,000, or there shall occur any event or condition which results in
the acceleration of the maturity of such obligation (including, without
limitation, any required mandatory prepayment of "put" to such JDN Venture
or to the Borrower or any Guarantor) or the termination of any commitment
pertaining thereto; provided, however, that there shall be excluded from
-----------------
the foregoing any Non-Recourse Mortgage Debt which, on a cumulative basis
since the Closing Date, together with Non-Recourse Mortgage Debt of the
Borrower and the Guarantors permitted by the proviso in paragraph (f)
above, does not exceed $20,000,000 in aggregate principal amount; or
(h) the Borrower or any Subsidiary shall commence a voluntary case or
other proceeding seeking liquidation, reorganization or other relief with
respect to itself or its debts under any bankruptcy, insolvency or other
similar law now or hereafter in effect or seeking the appointment of a
trustee, receiver, liquidator, custodian or other similar official of it or
any substantial part of its property, or shall consent to any such relief
or to the appointment of or taking possession by any such official in an
involuntary case or other proceeding commenced against it, or shall make a
general assignment for the benefit of creditors, or shall fail generally,
or shall admit in writing its inability, to pay its debts as they become
due, or shall take any corporate action to authorize any of the foregoing;
or
(i) an involuntary case or other proceeding shall be commenced against
the Borrower or any Guarantor seeking liquidation, reorganization or other
relief with respect to it or its debts under any bankruptcy, insolvency or
other similar law now or hereafter in effect or seeking the appointment of
a trustee, receiver, liquidator, custodian or other similar official of it
or any substantial part of its property, and such involuntary case or other
proceeding shall remain undismissed and unstayed for a period of 60 days;
or an order for relief shall be entered against the Borrower or any
Guarantor under the federal bankruptcy laws as now or hereafter in effect;
or
52
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(j) the Borrower or any member of the Controlled Group shall fail to
pay when due any material amount which it shall have become liable to pay
to the PBGC or to a Plan under Title IV of ERISA; or notice of intent to
terminate a Plan or Plans shall be filed under Title IV of ERISA by the
Borrower, any member of the Controlled Group, any plan administrator or any
combination of the foregoing; or the PBGC shall institute proceedings under
Title IV of ERISA to terminate or to cause a trustee to be appointed to
administer any such Plan or Plans or a proceeding shall be instituted by a
fiduciary of any such Plan or Plans to enforce Section 515 or 4219(c)(5) of
ERISA and such proceeding shall not have been dismissed within 30 days
thereafter; or a condition shall exist by reason of which the PBGC would be
entitled to obtain a decree adjudicating that any such Plan or Plans must
be terminated;
(k) one or more judgments or orders for the payment of money in an
aggregate amount in excess of $5,000,000 shall be rendered against the
Borrower or any Subsidiary and such judgment or order shall continue
unsatisfied and unstayed for a period of 30 days; or
(l) a federal tax lien shall be filed against the Borrower or any
Subsidiary under Section 6323 of the Code or a lien of the PBGC shall be
filed against the Borrower or any Subsidiary under Section 4068 of ERISA
and in either case such lien shall remain undischarged for a period of 25
days after the date of filing; or
(m) (i) any Person or two or more Persons acting in concert, other
than J. Donald Nichols, Elizabeth L. Nichols or their immediate family
members, or trusts or other entities established for the benefit of any of
them, shall have acquired beneficial ownership (within the meaning of Rule
13d-3 of the Securities and Exchange\Commission under the Securities
Exchange Act of 1934) of 20% or more of the outstanding shares of the
voting stock of the Borrower; or (ii) as of any date a majority of the
Board of Directors of the Borrower consists of individuals who were not
either (A) directors of the Borrower as of the corresponding date of the
previous year, (B) selected or nominated to become directors by the Board
of Directors of the Borrower of which a majority consisted of individuals
described in clause (A), or (C) selected or nominated to become directors
by the Board of Directors of the Borrower of which a majority
53
<PAGE>
consisted of individuals described in clause (A) and individuals described
in clause (B); or
(n) the occurrence of any event, act, occurrence, or condition which
the Required Banks determine has caused a Material Adverse Effect.
then, and in every such event, (i) the Agent shall, if requested by the Required
Banks, by notice to the Borrower terminate the Commitments and they shall
thereupon terminate, and (ii) the Agent shall, if requested by the Required
Banks, by notice to the Borrower declare the Notes (together with accrued
interest thereon), and all other amounts payable hereunder and under the other
Loan Documents, to be, and the Notes (together with accrued interest thereon),
and all other amounts payable hereunder and under the other Loan Documents shall
thereupon become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby waived by the
Borrower together with interest at the Default Rate accruing on the principal
amount thereof from and after the date of such Event of Default; provided that
--------
if any Event of Default specified in paragraph (h) or (i) above occurs with
respect to the Borrower, without any notice to the Borrower or any other act by
the Agent or the Banks, the Commitments shall thereupon terminate and the Notes
(together with accrued interest thereon) and all other amounts payable hereunder
and under the other Loan Documents shall automatically and without notice become
immediately due and payable without presentment, demand, protest or other notice
of any kind, all of which are hereby waived by the Borrower together with
interest thereon at the Default Rate accruing on the principal amount thereof
from and after the date of such Event of Default. Notwithstanding the
foregoing, the Agent shall have available to it all other remedies at law or
equity, and shall exercise any one or all of them at the request of the Required
Banks. Following acceleration of the Notes by the Agent, nothing contained in
this Agreement shall limit the right of a Bank from initiating or conducting any
litigation or collection proceedings, or from exercising any other rights or
remedies, with respect to the Note on which it is named as payee.
SECTION 6.02. Notice of Default. The Agent shall give notice to the
-----------------
Borrower of any Default under Section 6.01(c) promptly upon being requested to
do so by any Bank and shall thereupon notify all the Banks thereof.
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ARTICLE VII
THE AGENT
SECTION 7.01. Appointment; Powers and Immunities. Each Bank hereby
----------------------------------
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Loan Documents with such powers as are specifically delegated to
the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent: (a) shall have no duties or
responsibilities except as expressly set forth in this Agreement and the other
Loan Documents, and shall not by reason of this Agreement or any other Loan
Document be a trustee for any Bank; (b) shall not be responsible to the Banks
for any recitals, statements, representations or warranties contained in this
Agreement or any other Loan Document, or in any certificate or other document
referred to or provided for in, or received by any Bank under, this Agreement or
any other Loan Document, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any other Loan Document or
any other document referred to or provided for herein or therein or for any
failure by the Borrower to perform any of its obligations hereunder or
thereunder; (c) shall not be required to initiate or conduct any litigation or
collection proceedings hereunder or under any other Loan Document except to the
extent requested by the Required Banks, and (d) shall not be responsible for any
action taken or omitted to be taken by it hereunder or under any other Loan
Document or any other document or instrument referred to or provided for herein
or therein or in connection herewith or therewith, except for its own gross
negligence or wilful misconduct. The Agent may employ agents and attorneys-in-
fact and shall not be responsible for the negligence or misconduct of any such
agents or attorneys-in-fact selected by it with reasonable care. The
provisions of this Article VII are solely for the benefit of the Agent and the
Banks, and the Borrower shall not have any rights as a third party beneficiary
of any of the provisions hereof. In performing its functions and duties under
this Agreement and under the other Loan Documents, the Agent shall act solely as
agent of the Banks and does not assume and shall not be deemed to have assumed
any obligation towards or relationship of agency or trust with or for the
Borrower. The duties of the Agent shall be ministerial and administrative in
nature, and the Agent shall not have by reason of this Agreement or any other
Loan Document a fiduciary relationship in respect of any Bank.
55
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SECTION 7.02. Reliance by Agent. The Agent shall be entitled to rely
-----------------
upon any certification, notice or other communication (including any thereof by
telephone, telecopier, telegram or cable) believed by it to be genuine and
correct and to have been signed or sent by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel, independent
accountants or other experts selected by the Agent. As to any matters not
expressly provided for by this Agreement or any other Loan Document, the Agent
shall in all cases be fully protected in acting, or in refraining from acting,
hereunder and thereunder in accordance with instructions signed by the Required
Banks, and such instructions of the Required Banks in any action taken or
failure to act pursuant thereto shall be binding on all of the Banks.
SECTION 7.03. Defaults. The Agent shall not be deemed to have
--------
knowledge of the occurrence of a Default or an Event of Default (other than the
nonpayment of principal of or interest on the Loans) unless the Agent has
received notice from a Bank or the Borrower specifying such Default or Event of
Default and stating that such notice is a "Notice of Default". In the event
that the Agent receives such a notice of the occurrence of a Default or an Event
of Default, the Agent shall give prompt notice thereof to the Banks. The Agent
shall give each Bank prompt notice of each nonpayment of principal of or
interest on the Loans whether or not it has received any notice of the
occurrence of such nonpayment. The Agent shall (subject to Section 9.06) take
such action hereunder with respect to such Default or Event of Default as shall
be directed by the Required Banks, provided that, unless and until the Agent
shall have received such directions, the Agent may (but shall not be obligated
to) take such action, or refrain from taking such action, with respect to such
Default or Event of Default as it shall deem advisable in the best interests of
the Banks.
SECTION 7.04. Rights of Agent and its Affiliates as a Bank. With
--------------------------------------------
respect to the Loans made by the Agent and any Affiliate of the Agent, Wachovia
in its capacity as a Bank hereunder and any Affiliate of the Agent or such
Affiliate in its capacity as a Bank hereunder shall have the same rights and
powers hereunder as any other Bank and may exercise the same as though Wachovia
were not acting as the Agent, and the term "Bank" or "Banks" shall, unless the
context otherwise indicates, include Wachovia in its individual capacity and any
Affiliate of the Agent in its individual capacity. The Agent and any Affiliate
of the Agent may (without having to account therefor to any Bank)
56
<PAGE>
accept deposits from, lend money to and generally engage in any kind of banking,
trust or other business with the Borrower (and any of the Borrower's Affiliates)
as if Wachovia were not acting as the Agent, and the Agent and any Affiliate of
the Agent may accept fees and other consideration from the Borrower (in addition
to any agency fees and arrangement fees heretofore agreed to between the
Borrower and the Agent) for services in connection with this Agreement or any
other Loan Document or otherwise without having to account for the same to the
Banks.
SECTION 7.05. Indemnification. Each Bank severally agrees to
---------------
indemnify the Agent, to the extent the Agent shall not have been reimbursed by
the Borrower, ratably in accordance with its Commitment, for any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses (including, without limitation, counsel fees and disbursements)
or disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Loan Document or any other documents contemplated
by or referred to herein or therein or the transactions contemplated hereby or
thereby (excluding, unless an Event of Default has occurred and is continuing,
the normal administrative out of pocket costs and expenses incident to the
performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or any such other documents; provided that no Bank shall
--------
be liable for any of the foregoing to the extent they arise from the gross
negligence or wilful misconduct of the Agent. If any indemnity furnished to the
Agent for any purpose shall, in the opinion of the Agent, be insufficient or
become impaired, the Agent may call for additional indemnity and cease, or not
commence, to do the acts indemnified against until such additional indemnity is
furnished.
SECTION 7.06 Consequential Damages. THE AGENT SHALL NOT BE
---------------------
RESPONSIBLE OR LIABLE TO ANY BANK, THE BORROWER OR ANY OTHER PERSON OR ENTITY
FOR ANY PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES WHICH MAY BE ALLEGED AS A
RESULT OF THIS AGREEMENT, THE OTHER LOAN DOCUMENTS OR ANY OF THE TRANSACTIONS
CONTEMPLATED HEREBY OR THEREBY.
SECTION 7.07. Payee of Note Treated as Owner. The Agent may deem and
------------------------------
treat the payee of any Note as the owner thereof for all purposes hereof unless
and until a written notice of the assignment or transfer thereof shall have been
filed with the Agent and the provisions of Section 9.08(c) have been
57
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satisfied. Any requests, authority or consent of any Person who at the time of
making such request or giving such authority or consent is the holder of any
Note shall be conclusive and binding on any subsequent holder, transferee or
assignee of that Note or of any Note or Notes issued in exchange therefor or
replacement thereof.
SECTION 7.08. Nonreliance on Agent and Other Banks. Each Bank agrees
------------------------------------
that it has, independently and without reliance on the Agent or any other Bank,
and based on such documents and information as it has deemed appropriate, made
its own credit analysis of the Borrower and decision to enter into this
Agreement and that it will, independently and without reliance upon the Agent or
any other Bank, and based on such documents and information as it shall deem
appropriate at the time, continue to make its own analysis and decisions in
taking or not taking action under this Agreement or any of the other Loan
Documents. The Agent shall not be required to keep itself (or any Bank)
informed as to the performance or observance by the Borrower of this Agreement
or any of the other Loan Documents or any other document referred to or provided
for herein or therein or to inspect the properties or books of the Borrower or
any other Person. Except for notices, reports and other documents and
information expressly required to be furnished to the Banks by the Agent
hereunder or under the other Loan Documents, the Agent shall not have any duty
or responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of the Borrower or any
other Person (or any of their Affiliates) which may come into the possession of
the Agent.
SECTION 7.09. Failure to Act. Except for action expressly required of
--------------
the Agent hereunder or under the other Loan Documents, the Agent shall in all
cases be fully justified in failing or refusing to act hereunder and thereunder
unless it shall receive further assurances to its satisfaction by the Banks of
their indemnification obligations under Section 7.05 against any and all
liability and expense which may be incurred by the Agent by reason of taking,
continuing to take, or failing to take any such action.
SECTION 7.10. Resignation or Removal of Agent. Subject to the
-------------------------------
appointment and acceptance of a successor Agent as provided below, the Agent may
resign at any time by giving notice thereof to the Banks and the Borrower and
the Agent may be removed at any time with or without cause by the Required
Banks.
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Upon any such resignation or removal, the Required Banks shall have the
right to appoint a successor Agent. If no successor Agent shall have been so
appointed by the Required Banks and shall have accepted such appointment within
30 days after the retiring Agent's notice of resignation or the Required Banks'
removal of the retiring Agent, then the retiring Agent may, on behalf of the
Banks, appoint a successor Agent. Any successor Agent shall be a bank which
has a combined capital and surplus of at least $500,000,000. Upon the
acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent, and the retiring
Agent shall be discharged from its duties and obligations hereunder. After any
retiring Agent's resignation or removal hereunder as Agent, the provisions of
this Article VII shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the Agent
hereunder.
ARTICLE VIII
CHANGE IN CIRCUMSTANCES; COMPENSATION
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
-------------------------------------------------
Unfair. If on or prior to the first day of any Interest Period:
- ------
(a) the Agent determines that deposits in Dollars (in the applicable
amounts) are not being offered in the relevant market for such Interest
Period, or
(b) the Required Banks advise the Agent that the London Interbank
Offered Rate as determined by the Agent will not adequately and fairly
reflect the cost to such Banks of funding the Euro-Dollar Loans for such
Interest Period,
the Agent shall forthwith give notice thereof to the Borrower and the Banks,
whereupon until the Agent notifies the Borrower that the circumstances giving
rise to such suspension no longer exist, the obligations of the Banks to make
Euro-Dollar Loans specified in such notice shall be suspended. Unless the
Borrower notifies the Agent at least 2 Domestic Business Days before the date of
any Borrowing of such Euro-Dollar Loans for which a Notice of Borrowing
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has previously been given that it elects not to borrow on such date, such
Borrowing shall instead be made as a Base Rate Borrowing.
SECTION 8.02. Illegality. If, after the date hereof, the adoption of
----------
any applicable law, rule or regulation, or any change therein or any existing or
future law, rule or regulation, or any change in the interpretation or
administration thereof by any governmental authority, central bank or comparable
agency charged with the interpretation or administration thereof (any such
agency being referred to as an "Authority" and any such event being referred to
as a "Change of Law"), or compliance by any Bank (or its Lending Office) with
any request or directive (whether or not having the force of law) of any
Authority shall make it unlawful or impossible for any Bank (or its Lending
Office) to make, maintain or fund its Euro-Dollar Loans and such Bank shall so
notify the Agent, the Agent shall forthwith give notice thereof to the other
Banks and the Borrower, whereupon until such Bank notifies the Borrower and the
Agent that the circumstances giving rise to such suspension no longer exist, the
obligation of such Bank to make Euro-Dollar Loans shall be suspended. Before
giving any notice to the Agent pursuant to this Section, such Bank shall
designate a different Lending Office if such designation will avoid the need for
giving such notice and will not, in the judgment of such Bank, be otherwise
disadvantageous to such Bank. If such Bank shall determine that it may not
lawfully continue to maintain and fund any of its outstanding Euro-Dollar Loans
to maturity and shall so specify in such notice, the Borrower shall immediately
prepay in full the then outstanding principal amount of each Euro-Dollar Loan of
such Bank, together with accrued interest thereon and any amount due such Bank
pursuant to Section 8.05(a). Concurrently with prepaying each such Euro-Dollar
Loan, the Borrower shall borrow a Base Rate Loan in an equal principal amount
from such Bank (on which interest and principal shall be payable
contemporaneously with the related Euro-Dollar Loans of the other Banks), and
such Bank shall make such a Base Rate Loan.
SECTION 8.03. Increased Cost and Reduced Return. (a) If after the
---------------------------------
date hereof, a Change of Law or compliance by any Bank (or its Lending Office)
with any request or directive (whether or not having the force of law) of any
Authority:
(i) shall impose, modify or deem applicable any reserve, special
deposit or similar requirement (including, without limitation, any such
requirement imposed by the Board of Governors of the Federal Reserve
System, but
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excluding with respect to any Euro-Dollar Loan any such requirement
included in an applicable Euro-Dollar Reserve Percentage) against assets
of, deposits with or for the account of, or credit extended by, any Bank
(or its Lending Office); or
(ii) shall impose on any Bank (or its Lending Office) or on the United
States market for certificates of deposit or the London interbank market
any other condition affecting its Euro-Dollar Loans, its Notes or its
obligation to make Euro-Dollar Loans;
and the result of any of the foregoing is to increase the cost to such Bank (or
its Lending Office) of making or maintaining any Loan, or to reduce the amount
of any sum received or receivable by such Bank (or its Lending Office) under
this Agreement or under its Notes with respect thereto, by an amount deemed by
such Bank to be material, then, within 15 days after demand by such Bank (with a
copy to the Agent), the Borrower shall pay to such Bank such additional amount
or amounts as will compensate such Bank for such increased cost or reduction.
(b) If any Bank shall have determined that after the date hereof the
adoption of any applicable law, rule or regulation regarding capital adequacy,
or any change therein, or any change in the interpretation or administration
thereof, or compliance by any Bank (or its Lending Office) with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any Authority, has or would have the effect of reducing the rate of return on
such Bank's capital as a consequence of its obligations hereunder to a level
below that which such Bank could have achieved but for such adoption, change or
compliance (taking into consideration such Bank's policies with respect to
capital adequacy) by an amount deemed by such Bank to be material, then from
time to time, within 15 days after demand by such Bank, the Borrower shall pay
to such Bank such additional amount or amounts as will compensate such Bank for
such reduction.
(c) Each Bank will promptly notify the Borrower and the Agent of any
event of which it has knowledge, occurring after the date hereof, which will
entitle such Bank to compensation pursuant to this Section and will designate a
different Lending Office if such designation will avoid the need for, or reduce
the amount of, such compensation and will not, in the judgment of such Bank, be
otherwise disadvantageous to such Bank.
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A certificate of any Bank claiming compensation under this Section and setting
forth the additional amount or amounts to be paid to it hereunder shall be
conclusive in the absence of manifest error. In determining such amount, such
Bank may use any reasonable averaging and attribution methods.
(d) The provisions of this Section 8.03 shall be applicable with
respect to any Participant, Assignee or other Transferee, and any calculations
required by such provisions shall be made based upon the circumstances of such
Participant, Assignee or other Transferee.
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar Loans. If
-------------------------------------------------
(i) the obligation of any Bank to make or maintain any Euro-Dollar Loans has
been suspended pursuant to Section 8.02 or (ii) any Bank has demanded
compensation under Section 8.03, and the Borrower shall, by at least 5 Euro-
Dollar Business Days' prior notice to such Bank through the Agent, have elected
that the provisions of this Section shall apply to such Bank, then, unless and
until such Bank notifies the Borrower that the circumstances giving rise to such
suspension or demand for compensation no longer apply:
(a) all Loans which would otherwise be made by such Bank as Euro-
Dollar Loans shall be made instead as Base Rate Loans (in all cases
interest and principal on such Loans shall be payable contemporaneously
with the related Euro-Dollar Loans of the other Banks), and
(b) after each of its Euro-Dollar Loans has been repaid, all payments
of principal which would otherwise be applied to repay such Euro-Dollar
Loans shall be applied to repay its Base Rate Loans instead.
SECTION 8.05. Compensation. Upon the request of any Bank, delivered
------------
to the Borrower and the Agent, the Borrower shall pay to such Bank such amount
or amounts as shall compensate such Bank for any loss, cost or expense incurred
by such Bank as a result of:
(a) any payment or prepayment (pursuant to Section 2.09, 2.10, 6.01,
8.02 or otherwise) of a Euro-Dollar Loan on a date other than the last day of an
Interest Period for such Loan; or
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(b) any failure by the Borrower to prepay a Euro-Dollar Loan on the
date for such prepayment specified in the relevant notice of prepayment
hereunder; or
(c) any failure by the Borrower to borrow a Euro-Dollar Loan on the
date for the Euro-Dollar Borrowing of which such Euro-Dollar Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02;
such compensation to include, without limitation, an amount equal to the excess,
if any, of (x) the amount of interest which would have accrued on the amount so
paid or prepaid or not prepaid or borrowed for the period from the date of such
payment, prepayment or failure to prepay or borrow to the last day of the then
current Interest Period for such Euro-Dollar Loan (or, in the case of a failure
to prepay or borrow, the Interest Period for such Euro-Dollar Loan which would
have commenced on the date of such failure to prepay or borrow) at the
applicable rate of interest for such Euro-Dollar Loan provided for herein over
(y) the amount of interest (as reasonably determined by such Bank) such Bank
would have paid on deposits in Dollars of comparable amounts having terms
comparable to such period placed with it by leading banks in the London
interbank market.
ARTICLE IX
MISCELLANEOUS
-------------
SECTION 9.01. Notices. All notices, requests and other communications
-------
to any party hereunder shall be in writing (including telecopier or similar
writing) and shall be given to such party at its address or telecopier number
set forth on the signature pages hereof or such other address or telecopier
number as such party may hereafter specify for the purpose by notice to each
other party. Each such notice, request or other communication shall be
effective (i) if given by telecopier, when such telecopy is transmitted to the
telecopier number specified in this Section and the confirmation is received,
(ii) if given by mail, 72 hours after such communication is deposited in the
mails with first class postage prepaid, addressed as aforesaid or (iii) if given
by any other means, when delivered at the address specified in this Section;
provided that notices to the Agent under Article II or Article VIII shall not be
- --------
effective until received.
63
<PAGE>
SECTION 9.02. No Waivers. No failure or delay by the Agent or any
----------
Bank in exercising any right, power or privilege hereunder or under any Note or
other Loan Document shall operate as a waiver thereof nor shall any single or
partial exercise thereof preclude any other or further exercise thereof or the
exercise of any other right, power or privilege. The rights and remedies herein
provided shall be cumulative and not exclusive of any rights or remedies
provided by law.
SECTION 9.03. Expenses; Documentary Taxes. The Borrower shall pay (i)
---------------------------
all out-of-pocket expenses of the Agent, including fees and disbursements of
special counsel for the Agent, in connection with the preparation of this
Agreement and the other Loan Documents, any waiver or consent hereunder or
thereunder or any amendment hereof or thereof or any Default or alleged Default
hereunder or thereunder and (ii) if a Default occurs, all out-of-pocket expenses
incurred by the Agent and the Banks, including fees and disbursements of
counsel, in connection with such Default and collection and other enforcement
proceedings resulting therefrom, including out-of-pocket expenses incurred in
enforcing this Agreement and the other Loan Documents. The Borrower shall
indemnify the Agent and each Bank against any transfer taxes, documentary taxes,
assessments or charges made by any Authority by reason of the execution and
delivery of this Agreement or the other Loan Documents.
SECTION 9.04. Indemnification. The Borrower shall indemnify the
---------------
Agent, the Banks and each Affiliate thereof and their respective directors,
officers, employees and agents from, and hold each of them harmless against, any
and all losses, liabilities, claims or damages to which any of them may become
subject, insofar as such losses, liabilities, claims or damages arise out of or
result from any actual or proposed use by the Borrower of the proceeds of any
extension of credit by any Bank hereunder or breach by the Borrower of this
Agreement or any other Loan Document or from any investigation, litigation
(including, without limitation, any actions taken by the Agent or any of the
Banks to enforce this Agreement or any of the other Loan Documents) or other
proceeding (including, without limitation, any threatened investigation or
proceeding) relating to the foregoing, and the Borrower shall reimburse the
Agent and each Bank, and each Affiliate thereof and their respective directors,
officers, employees and agents, upon demand for any expenses (including, without
limitation, legal fees) incurred in connection with any such investigation or
proceeding; but excluding any such losses, liabilities, claims, damages or
64
<PAGE>
expenses incurred by reason of the gross negligence or wilful misconduct of the
Person to be indemnified.
SECTION 9.05. Setoff; Sharing of Setoffs. (a) The Borrower hereby
--------------------------
grants to the Agent and each Bank a lien for all indebtedness and obligations
owing to them from the Borrower upon all deposits or deposit accounts, of any
kind, or any interest in any deposits or deposit accounts thereof, now or
hereafter pledged, mortgaged, transferred or assigned to the Agent or any such
Bank or otherwise in the possession or control of the Agent or any such Bank for
any purpose for the account or benefit of the Borrower and including any balance
of any deposit account or of any credit of the Borrower with the Agent or any
such Bank, whether now existing or hereafter established hereby authorizing the
Agent and each Bank at any time or times with or without prior notice to apply
such balances or any part thereof to such of the indebtedness and obligations
owing by the Borrower to the Banks and/or the Agent then past due and in such
amounts as they may elect, and whether or not the collateral, if any, or the
responsibility of other Persons primarily, secondarily or otherwise liable may
be deemed adequate. For the purposes of this paragraph, all remittances and
property shall be deemed to be in the possession of the Agent or any such Bank
as soon as the same may be put in transit to it by mail or carrier or by other
bailee.
(b) Each Bank agrees that if it shall, by exercising any right of
setoff or counterclaim or resort to collateral security or otherwise, receive
payment of a proportion of the aggregate amount of principal and interest owing
with respect to the Note held by it which is greater than the proportion
received by any other Bank in respect of the aggregate amount of all principal
and interest owing with respect to the Note held by such other Bank, the Bank
receiving such proportionately greater payment shall purchase such
participations in the Notes held by the other Banks owing to such other Banks,
and such other adjustments shall be made, as may be required so that all such
payments of principal and interest with respect to the Notes held by the Banks
owing to such other Banks shall be shared by the Banks pro rata; provided that
--------
(i) nothing in this Section shall impair the right of any Bank to exercise any
right of setoff or counterclaim it may have and to apply the amount subject to
such exercise to the payment of indebtedness of the Borrower other than its
indebtedness under the Notes, and (ii) if all or any portion of such payment
received by the purchasing Bank is thereafter recovered from such purchasing
Bank, such purchase
65
<PAGE>
from each other Bank shall be rescinded and such other Bank shall repay to the
purchasing Bank the purchase price of such participation to the extent of such
recovery together with an amount equal to such other Bank's ratable share
(according to the proportion of (x) the amount of such other Bank's required
repayment to (y) the total amount so recovered from the purchasing Bank) of any
interest or other amount paid or payable by the purchasing Bank in respect of
the total amount so recovered. The Borrower agrees, to the fullest extent it may
effectively do so under applicable law, that any holder of a participation in a
Note, whether or not acquired pursuant to the foregoing arrangements, may
exercise rights of setoff or counterclaim and other rights with respect to such
participation as fully as if such holder of a participation were a direct
creditor of the Borrower in the amount of such participation.
SECTION 9.06. Amendments and Waivers. (a) Any provision of this
----------------------
Agreement, the Notes or any other Loan Documents may be amended or waived if,
but only if, such amendment or waiver is in writing and is signed by the
Borrower and the Required Banks (and, if the rights or duties of the Agent are
affected thereby, by the Agent); provided that, unless signed by all Banks, no
--------
such amendment or waiver shall, unless signed by all Banks, (i) change the
Commitment of any Bank or subject any Bank to any additional obligation, (ii)
change the principal of or rate of interest on any Loan or any fees (other than
fees payable to the Agent) hereunder, (iii) change the date fixed for any
payment of principal of or interest on any Loan or any fees hereunder, (iv)
change the amount of principal, interest or fees due on any date fixed for the
payment thereof, (v) change the percentage of the Commitments or of the
aggregate unpaid principal amount of the Notes, or the percentage of Banks,
which shall be required for the Banks or any of them to take any action under
this Section or any other provision of this Agreement, (vi) change the manner of
application of any payments made under this Agreement or the Notes, (vii)
release or substitute all or any substantial part of the collateral (if any)
held as security for the Loans, or (viii) release any Guarantee given to support
payment of the Loans, or (ix) change the definition of "Borrowing Base".
(b) The Borrower will not solicit, request or negotiate for or with
respect to any proposed waiver or amendment of any of the provisions of this
Agreement except through the Agent, unless each Bank shall be informed thereof
by the Borrower and shall be afforded an opportunity of considering the same and
66
<PAGE>
shall be supplied by the Borrower with sufficient information to enable it to
make an informed decision with respect thereto. Executed or true and correct
copies of any waiver or consent effected pursuant to the provisions of this
Agreement shall be delivered by the Borrower to each Bank forthwith following
the date on which the same shall have been executed and delivered by the
requisite percentage of Banks. The Borrower will not, directly or indirectly,
pay or cause to be paid any remuneration, whether by way of supplemental or
additional interest, fee or otherwise, to any Bank (in its capacity as such) as
consideration for or as an inducement to the entering into by such Bank of any
waiver or amendment of any of the terms and provisions of this Agreement unless
such remuneration is concurrently paid, on the same terms, ratably to all such
Banks.
SECTION 9.07. No Margin Stock Collateral. Each of the Banks
--------------------------
represents to the Agent and each of the other Banks that it in good faith is
not, directly or indirectly (by negative pledge or otherwise), relying upon any
Margin Stock as collateral in the extension or maintenance of the credit
provided for in this Agreement.
SECTION 9.08. Successors and Assigns. (a) The provisions of this
----------------------
Agreement shall be binding upon and inure to the benefit of the parties hereto
and their respective successors and assigns; provided that the Borrower may not
--------
assign or otherwise transfer any of its rights under this Agreement.
(b) Any Bank may at any time sell to one or more Persons (each a
"Participant") participating interests in any Loan owing to such Bank, any Note
held by such Bank, any Commitment hereunder or any other interest of such Bank
hereunder. In the event of any such sale by a Bank of a participating interest
to a Participant, such Bank's obligations under this Agreement shall remain
unchanged, such Bank shall remain solely responsible for the performance
thereof, such Bank shall remain the holder of any such Note for all purposes
under this Agreement, and the Borrower and the Agent shall continue to deal
solely and directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. In no event shall a Bank that sells a
participation be obligated to the Participant to take or refrain from taking any
action hereunder except that such Bank may agree that it will not (except as
provided below), without the consent of the Participant, agree to (i) the
change of any date fixed for the payment of principal of or interest on the
related loan or loans, (ii) the change of
67
<PAGE>
the amount of any principal, interest or fees due on any date fixed for the
payment thereof with respect to the related loan or loans, (iii) the change of
the principal of the related loan or loans, (iv) any change in the rate at which
either interest is payable thereon or (if the Participant is entitled to any
part thereof) fee is payable hereunder from the rate at which the Participant is
entitled to receive interest or fee (as the case may be) in respect of such
participation, (v) the release or substitution of all or any substantial part of
the collateral (if any) held as security for the Loans, or (vi) the release of
any Guarantee given to support payment of the Loans. Each Bank selling a
participating interest in any Loan, Note, Commitment or other interest under
this Agreement shall, within 10 Domestic Business Days of such sale, provide the
Borrower and the Agent with written notification stating that such sale has
occurred and identifying the Participant and the interest purchased by such
Participant. The Borrower agrees that each Participant shall be entitled to the
benefits of Article VIII with respect to its participation in Loans outstanding
from time to time.
(c) Any Bank may at any time assign to one or more banks or financial
institutions (each an "Assignee") all or a proportionate part of its rights and
obligations under this Agreement, the Notes and the other Loan Documents, and
such Assignee shall assume all such rights and obligations, pursuant to an
Assignment and Acceptance, executed by such Assignee, such transferor Bank and
the Agent (and, in the case of an Assignee that is not then a Bank, subject to
clause (iii) below, by the Borrower); provided that (i) no interest may be sold
--------
by a Bank pursuant to this paragraph (c) unless the Assignee shall agree to
assume ratably equivalent portions of the transferor Bank's Commitment, (ii) if
a Bank is assigning only a portion of its Commitment, then, the amount of the
Commitment being assigned (determined as of the effective date of the
assignment) shall be in an amount not less than $5,000,000, (iii) except during
the continuance of a Default, no interest may be sold by a Bank pursuant to this
paragraph (c) to any Assignee that is not then a Bank (or an Affiliate of a
Bank) without the consent of the Borrower and the Agent, which consent shall not
be unreasonably withheld, and (iv) a Bank may not have more than 3 Assignees
that are not then Banks at any one time. Upon (A) execution of the Assignment
and Acceptance by such transferor Bank, such Assignee, the Agent and (if
applicable) the Borrower, (B) delivery of an executed copy of the Assignment and
Acceptance to the Borrower and the Agent, (C) payment by such Assignee to such
transferor Bank of an amount equal to the purchase price agreed between such
68
<PAGE>
transferor Bank and such Assignee, and (D) payment of a processing and
recordation fee of $2,500 to the Agent, such Assignee shall for all purposes be
a Bank party to this Agreement and shall have all the rights and obligations of
a Bank under this Agreement to the same extent as if it were an original party
hereto with a Commitment as set forth in such instrument of assumption, and the
transferor Bank shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by the Borrower, the
Banks or the Agent shall be required. Upon the consummation of any transfer to
an Assignee pursuant to this paragraph (c), the transferor Bank, the Agent and
the Borrower shall make appropriate arrangements so that, if required, a new
Note is issued to each of such Assignee and such transferor Bank.
(d) Subject to the provisions of Section 9.09, the Borrower authorizes
each Bank to disclose to any Participant, Assignee or other transferee (each a
"Transferee") and any prospective Transferee any and all financial information
in such Bank's possession concerning the Borrower which has been delivered to
such Bank by the Borrower pursuant to this Agreement or which has been delivered
to such Bank by the Borrower in connection with such Bank's credit evaluation
prior to entering into this Agreement.
(e) No Transferee shall be entitled to receive any greater payment
under Section 8.03 than the transferor Bank would have been entitled to receive
with respect to the rights transferred, unless such transfer is made with the
Borrower's prior written consent or by reason of the provisions of Section 8.02
or 8.03 requiring such Bank to designate a different Lending Office under
certain circumstances or at a time when the circumstances giving rise to such
greater payment did not exist.
(f) Anything in this Section 9.08 to the contrary notwithstanding, any
Bank may assign and pledge all or any portion of the Loans and/or obligations
owing to it to any Federal Reserve Bank or the United States Treasury as
collateral security pursuant to Regulation A of the Board of Governors of the
Federal Reserve System and any Operating Circular issued by such Federal Reserve
Bank, provided that any payment in respect of such assigned Loans and/or
--------
obligations made by the Borrower to the assigning and/or pledging Bank in
accordance with the terms of this Agreement shall satisfy the Borrower's
obligations hereunder in respect of such assigned Loans and/or obligations to
69
<PAGE>
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
SECTION 9.09. Confidentiality. Each Bank agrees to exercise
---------------
commercially reasonable efforts to keep any information delivered or made
available by the Borrower to it which is clearly indicated to be confidential
information, confidential from anyone other than persons employed or retained by
such Bank who are or are expected to become engaged in evaluating, approving,
structuring or administering the Loans; provided that nothing herein shall
--------
prevent any Bank from disclosing such information (i) to any other Bank, (ii)
upon the order of any court or administrative agency, (iii) upon the request or
demand of any regulatory agency or authority having jurisdiction over such Bank,
(iv) which has been publicly disclosed, (v) to the extent reasonably required in
connection with any litigation to which the Agent, any Bank or their respective
Affiliates may be a party, (vi) to the extent reasonably required in connection
with the exercise of any remedy hereunder, (vii) to such Bank's legal counsel
and independent auditors and (viii) to any actual or proposed Participant,
Assignee or other Transferee of all or part of its rights hereunder which has
agreed in writing to be bound by the provisions of this Section 9.09; provided
--------
that should disclosure of any such confidential information be required by
virtue of clause (ii) of the immediately preceding sentence, to the extent
permitted by law, any relevant Bank shall promptly notify the Borrower of same
so as to allow the Borrower to seek a protective order or to take any other
appropriate action; provided, further, that, no Bank shall be required to delay
-------- ------- ----
compliance with any directive to disclose any such information so as to allow
the Borrower to effect any such action.
SECTION 9.10. Representation by Banks. Each Bank hereby represents
-----------------------
that it is a commercial lender or financial institution which makes loans in the
ordinary course of its business and that it will make its Loans hereunder for
its own account in the ordinary course of such business; provided that, subject
--------
to Section 9.08, the disposition of the Note or Notes held by that Bank shall at
all times be within its exclusive control.
SECTION 9.11. Obligations Several. The obligations of each Bank
-------------------
hereunder are several, and no Bank shall be responsible for the obligations or
commitment of any other Bank hereunder. Nothing contained in this Agreement and
no action taken by the Banks pursuant hereto shall be deemed to constitute the
Banks to
70
<PAGE>
be a partnership, an association, a joint venture or any other kind of
entity. The amounts payable at any time hereunder to each Bank shall be a
separate and independent debt, and each Bank shall be entitled to protect and
enforce its rights arising out of this Agreement or any other Loan Document and
it shall not be necessary for any other Bank to be joined as an additional party
in any proceeding for such purpose.
SECTION 9.12. Georgia Law. This Agreement and each Note shall be
-----------
construed in accordance with and governed by the law of the State of Georgia.
SECTION 9.13. Severability. In case any one or more of the provisions
------------
contained in this Agreement, the Notes or any of the other Loan Documents should
be invalid, illegal or unenforceable in any respect, the validity, legality and
enforceability of the remaining provisions contained herein and therein shall
not in any way be affected or impaired thereby and shall be enforced to the
greatest extent permitted by law.
SECTION 9.14. Interest. In no event shall the amount of interest, and
--------
all charges, amounts or fees contracted for, charged or collected pursuant to
this Agreement, the Notes or the other Loan Documents and deemed to be interest
under applicable law (collectively, "Interest") exceed the highest rate of
interest allowed by applicable law (the "Maximum Rate"), and in the event any
such payment is inadvertently received by any Bank, then the excess sum (the
"Excess") shall be credited as a payment of principal, unless the Borrower shall
notify such Bank in writing that it elects to have the Excess returned
forthwith. It is the express intent hereof that the Borrower not pay and the
Banks not receive, directly or indirectly in any manner whatsoever, interest in
excess of that which may legally be paid by the Borrower under applicable law.
The right to accelerate maturity of any of the Loans does not include the right
to accelerate any interest that has not otherwise accrued on the date of such
acceleration, and the Agent and the Banks do not intend to collect any unearned
interest in the event of any such acceleration. All monies paid to the Agent or
the Banks hereunder or under any of the Notes or the other Loan Documents,
whether at maturity or by prepayment, shall be subject to rebate of unearned
interest as and to the extent required by applicable law. By the execution of
this Agreement, the Borrower covenants, to the fullest extent permitted by law,
that (i) the credit or return of any Excess shall constitute the acceptance by
the Borrower of such Excess, and (ii) the Borrower shall not seek or
71
<PAGE>
pursue any other remedy, legal or equitable , against the Agent or any Bank,
based in whole or in part upon contracting for charging or receiving any
Interest in excess of the Maximum Rate. For the purpose of determining whether
or not any Excess has been contracted for, charged or received by the Agent or
any Bank, all interest at any time contracted for, charged or received from the
Borrower in connection with this Agreement, the Notes or any of the other Loan
Documents shall, to the extent permitted by applicable law, be amortized,
prorated, allocated and spread in equal parts throughout the full term of the
Commitments. The Borrower, the Agent and each Bank shall, to the maximum extent
permitted under applicable law, (i) characterize any non-principal payment as an
expense, fee or premium rather than as Interest and (ii) exclude voluntary
prepayments and the effects thereof. The provisions of this Section shall be
deemed to be incorporated into each Note and each of the other Loan Documents
(whether or not any provision of this Section is referred to therein). All such
Loan Documents and communications relating to any Interest owed by the Borrower
and all figures set forth therein shall, for the sole purpose of computing the
extent of obligations hereunder and under the Notes and the other Loan Documents
be automatically recomputed by the Borrower, and by any court considering the
same, to give effect to the adjustments or credits required by this Section.
SECTION 9.15. Interpretation. No provision of this Agreement or any
--------------
of the other Loan Documents shall be construed against or interpreted to the
disadvantage of any party hereto by any court or other governmental or judicial
authority by reason of such party having or being deemed to have structured or
dictated such provision.
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction. The
---------------------------------------------
Borrower (a) and each of the Banks and the Agent irrevocably waives, to the
fullest extent permitted by law, any and all right to trial by jury in any legal
proceeding arising out of this Agreement, any of the other Loan Documents, or
any of the transactions contemplated hereby or thereby, (b) submits to the
nonexclusive personal jurisdiction in the State of Georgia, the courts thereof
and the United States District Courts sitting therein, for the enforcement of
this Agreement, the Notes and the other Loan Documents, (c) waives any and all
personal rights under the law of any jurisdiction to object on any basis
(including, without limitation, inconvenience of forum) to jurisdiction or venue
within the State of Georgia for the purpose of litigation to enforce this
Agreement, the Notes or the other Loan Documents, and (d) agrees that service of
process may be made upon it in the manner prescribed in Section
72
<PAGE>
9.01 for the giving of notice to the Borrower. Nothing herein contained,
however, shall prevent the Agent from bringing any action or exercising any
rights against any security and against the Borrower personally, and against any
assets of the Borrower, within any other state or jurisdiction.
SECTION 9.17. Counterparts. This Agreement may be signed in any
------------
number of counterparts, each of which shall be an original, with the same effect
as if the signatures thereto and hereto were upon the same instrument.
SECTION 9.18. Source of Funds -- ERISA. Each of the Banks hereby
------------------------
severally (and not jointly) represents to the Borrower that no part of the funds
to be used by such Bank to fund the Loans hereunder from time to time
constitutes (i) assets allocated to any separate account maintained by such Bank
in which any employee benefit plan (or its related trust) has any interest nor
(ii) any other assets of any employee benefit plan. As used in this Section,
the terms "employee benefit plan" and "separate account" shall have the
respective meanings assigned to such terms in Section 3 of ERISA.
[Signatures are contained on the following pages.]
73
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
JDN REALTY CORPORATION (SEAL)
By:
--------------------------------------
Title:
JDN Realty Corporation
3340 Peachtree Road, NE
Suite 1530
Atlanta, Georgia 30326
Attention: William J. Kerley
Chief Financial Officer
Telecopier number: 404-364-6444
Confirmation number: 404-262-3252
74
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
COMMITMENTS WACHOVIA BANK OF GEORGIA, N.A.,
- ----------- as Agent and as a Bank (SEAL)
$49,500,000
By:
-------------------------------------
Title:
Lending Office
--------------
Wachovia Bank of Georgia, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Telecopier number: 404-332-4005
Confirmation number: 404-332-6971
75
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
PNC BANK OF KENTUCKY, INC. (SEAL)
$35,000,000 By:
---------------------------------------
Title:
Lending Office
--------------
PNC Bank of Kentucky, Inc.
500 W. Jefferson
Suite 1200
Louisville, Kentucky 40202
Attention: Ms. Denise F. Fazio
Telecopier number: 502-581-3919
Confirmation number: 502-3334
76
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
$20,000,000 BANKERS TRUST COMPANY (SEAL)
By:
----------------------------------------
Title:
Lending Office
--------------
Bankers Trust Company
280 Park Avenue, Floor 21 West
New York, New York 10017
Attention: Mr. Alexander B.V. Johnson
Telecopier number: 212-454-1733
Confirmation number: 212-454-4171
77
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
$15,250,000 COMMERZBANK, A.G., ATLANTA
AGENCY (SEAL)
By:
------------------------------------------
Title:
By:
-----------------------------------------
Title:
Lending Office
--------------
Commerzbank, A.G., Atlanta Agency
1230 Peachtree Street
Promanade 2, 35th Floor
Atlanta, Georgia 30309
Attention: Mr. Mark Wortmann
Telecopier number: 404-888-6539
Confirmation number: 404-888-6518
78
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
$15,250,000 MELLON BANK, N.A. (SEAL)
By:
------------------------------------------
Title:
Lending Office
--------------
Mellon Bank, N.A.
Mellon Bank Center
1735 Market Street
Room 193-0425
Philadelphia, PA 19103
Attention: Mr. Brant Henderson
Telecopier number: 215-553-3472
Confirmation number: 215-553-3649
79
<PAGE>
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed, under seal, by their respective authorized officers as of the
day and year first above written.
$15,000,000 THE BANK OF NOVA SCOTIA (SEAL)
By:
----------------------------------------
Title:
Lending Office
--------------
Bank of Nova Scotia
The Bank of Nova Scotia
One Liberty Plaza
New York, New York 10006
Attention: Mr. Nick Voulgaris
Telecopier number: 212-225-5168
Confirmation number: 212-225-5157
TOTAL COMMITMENTS:
$150,000,000
80
<PAGE>
EXHIBIT A
---------
NOTE
Atlanta, Georgia
May 23, 1997
For value received, JDN REALTY CORPORATION, a Maryland corporation
(the "Borrower"), promises to pay to the order of
, a (the
- -------------------------------------------------- --------------------
"Bank"), for the account of its Lending Office, the principal sum of
----------
AND NO/100 DOLLARS ($ ), or such
- ----------------------------------- ------------
lesser amount as shall equal the unpaid principal amount of each Loan made by
the Bank to the Borrower pursuant to the Credit Agreement referred to below, on
the dates and in the amounts provided in the Credit Agreement. The Borrower
promises to pay interest on the unpaid principal amount of this Note on the
dates and at the rate or rates provided for in the Credit Agreement. Interest
on any overdue principal of and, to the extent permitted by law, overdue
interest on the principal amount hereof shall bear interest at the Default Rate,
as provided for in the Credit Agreement. All such payments of principal and
interest shall be made in lawful money of the United States in Federal or other
immediately available funds at the office of Wachovia Bank of Georgia, N.A., 191
Peachtree Street, N.E., Atlanta, Georgia 30303-1757, or such other address as
may be specified from time to time pursuant to the Credit Agreement.
All Loans made by the Bank, the respective maturities thereof, the
interest rates from time to time applicable thereto, and all repayments of the
principal thereof shall be recorded by the Bank and, prior to any transfer
hereof, endorsed by the Bank on the schedule attached hereto, or on a
continuation of such schedule attached to and made a part hereof; provided that
--------
the failure of the Bank to make any such recordation or endorsement shall not
affect the obligations of the Borrower hereunder or under the Credit Agreement.
This Note is one of the Notes referred to in the Credit Agreement
dated as of May 23, 1997 among the Borrower, the Banks listed on the signature
pages thereof and Wachovia Bank of Georgia, N.A., as Agent (as the same may be
amended and modified from time to time, the "Credit Agreement"). Terms defined
in the
<PAGE>
Credit Agreement are used herein with the same meanings. Reference is
made to the Credit Agreement for provisions for the optional and mandatory
prepayment and the repayment hereof and the acceleration of the maturity hereof,
as well as the obligation of the Borrower to pay all costs of collection,
including reasonable attorneys fees, in the event this Note is collected by law
or through an attorney at law.
The Borrower hereby waives presentment, demand, protest, notice of
demand, protest and nonpayment and any other notice required by law relative
hereto, except to the extent as otherwise may be expressly provided for in the
Credit Agreement.
IN WITNESS WHEREOF, the Borrower has caused this Note to be duly
executed, under seal, by its duly authorized officer as of the day and year
first above written.
JDN REALTY CORPORATION (SEAL)
By:
--------------------------
Title:
2
<PAGE>
Note (cont'd)
LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Base Rate Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
3
<PAGE>
EXHIBIT B
---------
OPINION OF
COUNSEL FOR THE BORROWER
------------------------
[Dated as provided in
Section 3.01 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attn: Syndications Group
Dear Sirs:
We have acted as counsel for JDN Realty Corporation, a Maryland
corporation (the "Borrower"), in connection with the Credit Agreement (the
"Credit Agreement") dated as of May 23, 1997, among the Borrower, the banks
listed on the signature pages thereof and Wachovia Bank of Georgia, N.A., as
Agent. Terms defined in the Credit Agreement are used herein as therein
defined.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact and law as we have deemed necessary or advisable for
purposes of this opinion. We have assumed for purposes of our opinions set
forth below that the execution and delivery of the Credit Agreement by each Bank
and by the Agent have been duly authorized by each Bank and by the Agent.
Upon the basis of the foregoing, we are of the opinion that:
1. The Borrower is a corporation duly incorporated, validly existing
and in good standing under the laws of Maryland
<PAGE>
and has all corporate powers required to carry on its business as now conducted.
[INCLUDE SIMILAR OPINION AS TO EACH SUBSIDIARY]
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes (i) are within its corporate powers, (ii) have
been duly authorized by all necessary corporate action, (iii) require no action
by or in respect of, or filing with, any governmental body, agency or official,
(iv) do not contravene, or constitute a default under, any provision of
applicable law or regulation or of the certificate of incorporation or by-laws
of the Borrower or of any agreement, judgment, injunction, order, decree or
other instrument which to our knowledge is binding upon the Borrower and (v) to
our knowledge, except as provided in the Credit Agreement, do not result in the
creation or imposition of any Lien on any asset of the Borrower or any of its
Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower, enforceable against it in accordance with its terms, and the Notes
constitute valid and binding obligations of the Borrower, enforceable in
accordance with its terms, except as such enforceability may be limited by: (i)
bankruptcy, insolvency or similar laws affecting the enforcement of creditors'
rights generally and (ii) general principles of equity.
4. To our knowledge, there is no action, suit or proceeding pending,
or threatened, against or affecting the Borrower before any court or arbitrator
or any governmental body, agency or official in which there is a reasonable
possibility of an adverse decision which could materially adversely affect the
business, consolidated financial position or consolidated results of operations
of the Borrower or which in any manner questions the validity or enforceability
of the Credit Agreement or any Note.
5. The Borrower is not an "investment company" within the meaning of
the Investment Company Act of 1940, as amended.
6. The Borrower 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", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
2
<PAGE>
We are qualified to practice in the State of Georgia and do not purport to
be experts on any laws other than the laws of the United States and the State of
Georgia and this opinion is rendered only with respect to such laws, and, as
expressly provided and subject to the limitations contained in the last sentence
of this paragraph, the corporate law of the State of Maryland. We have made no
independent investigation of the laws of any other jurisdiction. As to (x) the
opinions expressed in paragraph 1 with respect to as to due incorporation, valid
existence and good standing in Maryland of the Borrower, our opinion is based
solely on our review of the good standing certificate issued by the Secretary of
State of Maryland dated May __, 1997, and (y) the opinions expressed in
paragraph 1 and clause (ii) of paragraph 2 with respect to the Borrower's
corporate powers under Maryland law, we have relied solely on our review of
Sections 2-101 through 2-104, inclusive, of the Maryland General Corporation
Law, and our review of the Borrower's Articles of Incorporation and Bylaws and
relevant resolutions of its Board of Directors.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you, any Assignee, Participant
or other Transferee under the Credit Agreement, and Jones, Day, Reavis & Pogue
without our prior written consent.
Very truly yours,
3
<PAGE>
EXHIBIT C
---------
OPINION OF
JONES, DAY, REAVIS & POGUE, SPECIAL COUNSEL
FOR THE AGENT
---------------
[Dated as provided in
Section 3.01 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank of Georgia, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-175
Attention: Syndications Group
Dear Sirs:
We have participated in the preparation of the Credit Agreement (the
"Credit Agreement") dated as of May 23, 1997, among JDN Realty Corporation, a
Maryland corporation (the "Borrower"), the banks listed on the signature pages
thereof (the "Banks") and Wachovia Bank of Georgia, N.A., as Agent (the
"Agent"), and have acted as special counsel for the Agent for the purpose of
rendering this opinion pursuant to Section 3.01(d) of the Credit Agreement.
Terms defined in the Credit Agreement are used herein as therein defined.
This opinion letter is limited by, and is in accordance with, the
January 1, 1992 edition of the Interpretive Standards applicable to Legal
Opinions to Third Parties in Corporate Transactions adopted by the Legal Opinion
Committee of the Corporate and Banking Law Section of the State Bar of Georgia
which Interpretive Standards are incorporated herein by this reference.
We have examined originals or copies, certified or otherwise identified
to our satisfaction, of such documents, corporate records, certificates of
public officials and other instruments and have conducted such other
investigations of fact
<PAGE>
and law as we have deemed necessary or advisable for purposes of this opinion.
Upon the basis of the foregoing, and assuming the due authorization,
execution and delivery of the Credit Agreement and each of the Notes by or on
behalf of the Borrower, we are of the opinion that the Credit Agreement
constitutes a valid and binding agreement of the Borrower, each Note constitutes
valid and binding obligations of the Borrower, enforceable in accordance with
its terms except as: (i) the enforceability thereof may be affected by
bankruptcy, insolvency, reorganization, fraudulent conveyance, voidable
preference, moratorium or similar laws applicable to creditors' rights or the
collection of debtors' obligations generally; (ii) rights of acceleration and
the availability of equitable remedies may be limited by equitable principles of
general applicability; and (iii) the enforceability of certain of the remedial,
waiver and other provisions of the Credit Agreement and the Notes may be further
limited by the laws of the State of Georgia; provided that such additional laws
--------
do not, in our opinion, substantially interfere with the practical realization
of the benefits expressed in the Credit Agreement or the Notes, except for the
economic consequences of any procedural delay which may result from such laws.
In giving the foregoing opinion, we express no opinion as to the effect (if
any) of any law of any jurisdiction except the State of Georgia. We express no
opinion as to the effect of the compliance or noncompliance of the Agent or any
of the Banks with any state or federal laws or regulations applicable to the
Agent or any of the Banks by reason of the legal or regulatory status or the
nature of the business of the Agent or any of the Banks.
This opinion is delivered to you in connection with the transaction
referenced above and may only be relied upon by you and any Assignee,
Participant or other Transferee under the Credit Agreement without our prior
written consent.
Very truly yours,
2
<PAGE>
EXHIBIT D
---------
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated ,
-------------- --- ----
Reference is made to the Credit Agreement dated as of May 23, 1997
(together with all amendments and modifications thereto, the "Credit Agreement")
among JDN Realty Corporation, a Maryland corporation (the "Borrower"), the Banks
(as defined in the Credit Agreement) and Wachovia Bank of Georgia, N.A., as
Agent (the "Agent"). Terms defined in the Credit Agreement are used herein with
the same meaning.
(the
----------------------------------------------------------------
"Assignor") and (the "Assignee")
----------------------------------------
agree as follows:
1. The Assignor hereby sells and assigns to the Assignee, without
recourse to the Assignor, and the Assignee hereby purchases and assumes from the
Assignor, a % interest in and to all of the Assignor's rights and
-----
obligations under the Credit Agreement as of the Effective Date (as defined
below) (including, without limitation, a % interest (which on the Effective
-----
Date hereof is $ ) in the Assignor's Commitment and a interest
---------- --------
(which on the Effective Date hereof is $ ) in the Loans owing to
---------------
the Assignor and a % interest in the Note[s] held by the Assignor (which on
---
the Effective Date hereof is $ ).
----------
2. The Assignor (i) makes no representation or warranty and assumes
no responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto, other
than that it is the legal and beneficial owner of the interest being assigned by
it hereunder, that such interest is free and clear of any adverse claim and that
as of the date hereof its Commitment (without giving effect to assignments
thereof which have not yet become effective) is $ and the aggregate
----------
outstanding principal amount of Loans owing to it (without giving effect to
assignments thereof which have not yet become effective) is $ ;
-----------------
(ii) makes no representation or warranty and assumes no
<PAGE>
responsibility with respect to the financial condition of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iii) attaches the Note[s] referred to in paragraph 1 above and requests
that the Agent exchange such Note[s] for [a new Note dated ,
------------- ----
in the principal amount of $ payable to the order of the Assignee [new
----------
Notes as follows: a (i) Note dated , in the principal
---------------- ----
amount of $ payable to the order of the Assignor and (ii) a Note
-------------
dated , in the principal amount of $ payable to the
---------- ---- --------------
order of the Assignee.
3. The Assignee (i) confirms that it has received a copy of the
Credit Agreement, together with copies of the financial statements referred to
in Section 4.04(a) thereof (or any more recent financial statements of the
Borrower delivered pursuant to Section 5.01(a) or (b) thereof) and such other
documents and information as it has deemed appropriate to make its own credit
analysis and decision to enter into this Assignment and Acceptance; (ii) agrees
that it will, independently and without reliance upon the Agent, the Assignor or
any other Bank and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under the Credit Agreement; (iii) confirms that it is a bank
or financial institution; (iv) appoints and authorizes the Agent to take such
action as agent on its behalf and to exercise such powers under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers as are reasonably incidental thereto; (v) agrees that it will perform in
accordance with their terms all of the obligations which by the terms of the
Credit Agreement are required to be performed by it as a Bank; (vi) specifies as
its Lending Office (and address for notices) the office set forth beneath its
name on the signature pages hereof, (vii) represents and warrants that the
execution, delivery and performance of this Assignment and Acceptance are within
its corporate powers and have been duly authorized by all necessary corporate
action, (viii) makes the representation and warranty contained in Section 9.18
of the Credit Agreement[, and (ix) attaches the forms prescribed by the Internal
Revenue Service of the United States certifying as to the Assignee's status for
purposes of determining exemption from United States withholding taxes with
respect to all payments to be made to the Assignee under the Credit Agreement
and the Notes or such other documents
2
<PAGE>
as are necessary to indicate that all such payments are subject to such taxes at
a rate reduced by an applicable tax treaty].
4. The Effective Date for this Assignment and Acceptance shall be
, (the "Effective Date"). Following the execution of this
- ------------- ----
Assignment and Acceptance, it will be delivered to the Agent for execution and
acceptance by the Agent and to the Borrower for execution by the Borrower.
5. Upon such execution and acceptance by the Agent [and execution by
the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT], from and after the
Effective Date, (i) the Assignee shall be a party to the Credit Agreement and,
to the extent rights and obligations have been transferred to it by this
Assignment and Acceptance, have the rights and obligations of a Bank thereunder
and (ii) the Assignor shall, to the extent its rights and obligations have been
transferred to the Assignee by this Assignment and Acceptance, relinquish its
rights (other than under Sections 8.03, 9.03 and 9.04 of the Credit Agreement)
and be released from its obligations under the Credit Agreement.
6. Upon such execution and acceptance by the Agent [and execution by
the Borrower] [IF REQUIRED BY THE CREDIT AGREEMENT], from and after the
Effective Date, the Agent shall make all payments in respect of the interest
assigned hereby to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments for periods prior to such acceptance by the
Agent directly between themselves.
7. This Assignment and Acceptance shall be governed by, and construed
in accordance with, the laws of the State of Georgia.
[NAME OF ASSIGNOR]
By:
---------------------------
Title:
[NAME OF ASSIGNEE]
By:
---------------------------
Title:
3
<PAGE>
Lending Office:
[Address]
WACHOVIA BANK OF GEORGIA, N.A.,
As Agent
By:
--------------------------
Title:
JDN REALTY CORPORATION
IF REQUIRED BY THE CREDIT AGREEMENT
By:
--------------------------
Title:
4
<PAGE>
EXHIBIT E
---------
NOTICE OF BORROWING
-------------------
,
--------------- ----
Wachovia Bank of Georgia, N.A., as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Credit Agreement (as amended and modified from time to time, the
"Credit Agreement") dated as of May 23, 1997 by and among JDN Realty
Corporation, the Banks from time to time parties thereto, and Wachovia
Bank of Georgia, N.A., as Agent.
Gentlemen:
Unless otherwise defined herein, capitalized terms used herein shall have
the meanings attributable thereto in the Credit Agreement.
This Notice of Borrowing is delivered to you pursuant to Section 2.02 of
the Credit Agreement.
The Borrower hereby requests a [Euro-Dollar Borrowing] [Base Rate
Borrowing] in the aggregate principal amount of $ to be made on
-----------
, , and for interest to accrue thereon at the rate established
- ------------ ----
by the Credit Agreement for [Euro-Dollar Loans] [Base Rate Loans]. The duration
of the Interest Period with respect thereto shall be [1 month] [2 months] [3
months] [6 months] [30 days].
The amount available to be borrowed under Section 2.01 of the Credit
Agreement, net of amounts to be paid with the proceeds of this Borrowing, is as
follows:
(a) Aggregate amount of Commitments $______________
(b) Borrowing Base per most recent
Borrowing Base Certificate $______________
<PAGE>
(c) Principal amount outstanding under
Loans $______________
(e) Amount available to be borrowed
(lesser of (a) and (b), less (c)) $______________
The Borrower has caused this Notice of Borrowing to be executed and
delivered by its duly authorized officer this day of , .
----- ----------- ----
JDN REALTY CORPORATION
By:
-------------------------------
Title:
2
<PAGE>
EXHIBIT F
---------
COMPLIANCE CERTIFICATE
----------------------
Reference is made to the Credit Agreement dated as of May 23, 1997 (as
modified and supplemented and in effect from time to time, the "Credit
Agreement") by and among JDN Realty Corporation, the Banks from time to time
parties thereto, and Wachovia Bank of Georgia, N.A., as Agent. Capitalized
terms used herein shall have the meanings ascribed thereto in the Credit
Agreement.
Pursuant to Section 5.01(c) of the Credit Agreement, ,
---------------
the duly authorized of the Borrower, hereby (i) certifies
----------------------
to the Agent and the Banks that the information contained in the Compliance
Check List attached hereto is true, accurate and complete as of ,
----------
, and that no Default is in existence on and as of the date hereof and
- ------
(ii) restates and reaffirms that the representations and warranties contained in
Article IV of the Credit Agreement are true on and as of the date hereof as
though restated on and as of this date.
JDN REALTY CORPORATION
By:
----------------------------------
Its:
<PAGE>
COMPLIANCE CHECK LIST
JDN REALTY CORPORATION
--------------------------
,
-------------------- ----
1. Ratio of Consolidated Total Liabilities to Gross Asset Value
(Section 5.20)
The ratio of Total Consolidated Liabilities to Gross Asset Value shall at
all times be equal to or less than 0.55 to 1.0.
(a) Total Consolidated Liabilities
Schedule 1 $
---------
(b) Gross Asset Value Schedule 2 $
---------
(c) Actual ratio of (a) to (b) to 1.0
------
Maximum ratio 0.55 to 1.0
2. Ratio of Total Secured Debt to Gross Asset Value (Section 5.21)
The ratio of Total Secured Debt to Gross Asset Value shall at all times be
equal to or less than: (i) until the earlier of (x) repayment in full of the
REMIC Financing and (y) September 30, 1997, 0.45 to 1.00; and (ii)
thereafter, 0.40 to 1.0.
(a) Total Secured Debt Schedule 3 $
---------
(b) Gross Asset Value Schedule 2 $
---------
(c) Actual ratio of (a) to (b) to 1.0
------
Maximum ratio [0.45 to 1.0]
[0.40 to 1.0]
3. Ratio of EBITDA to Consolidated Interest Expense (Section 5.22)
2
<PAGE>
The ratio of EBITDA to Consolidated Interest Expense for the Fiscal Quarter
just ended and the 3 immediately preceding Fiscal Quarters will not be less
than 2.0 to 1.00, calculated at the end of each Fiscal Quarter.
(a) EBITDA Schedule 4 $
---------
(b) Consolidated Interest Expense $
---------
(c) actual ratio of (a) to (b) to 1.0
------
Minimum ratio 2.0 to 1.0
4. Ratio of Unencumbered Assets to Unsecured Funded Debt (Section 5.23)
The ratio of Unencumbered Assets to Unsecured Funded Debt shall at all times
be equal to or greater than 1.75 to 1.00.
(a) Net Operating Income from each
Property not subject to a Mortgage
Schedule 5 $
---------
(b) 10 times (a) $
---------
(c) 4 times (b) $
---------
(d) book value of all Construction in Progress $
---------
(e) sum of (c) and (d) $
---------
(f) Unsecured Funded Debt Schedule 6 $
---------
(g) Actual ratio of (e) to (f) to 1.0
------
Minimum ratio 1.75 to 1.0
5. Ratio of Unsecured Net Operating Income to Unsecured Interest Expense
(Section 5.24)
The ratio of Unsecured Net Operating Income to Unsecured Interest Expense
shall at all times be equal to or greater than 1.75 to 1.0.
(a) Unsecured Net Operating Income Schedule 5 $
---------
3
<PAGE>
(b) Unsecured Interest Expense/2/ $
---------
(c) Actual ratio of (a) to (b) to 1.0
------
Minimum ratio 1.75 to 1.0
6. Restricted Payments (Section 5.15)/3/
The Borrower's Restricted Payments in any calendar year shall not exceed 95%
of Funds from Operations for such period, unless (i) the Borrower must pay
out an amount in excess of 95% of Funds from Operations to permit the
Borrower to preserve its status as a real estate investment trust under the
applicable provision of the Code.
(a) Restricted Payments for current
calendar year $
---------
(b) Funds from Operations for current
calendar year Schedule 7 $
---------
(c) 95% of (b) $
---------
Limitation: (a) may not exceed (c)
7. Guarantees (Section 5.25)
Neither the Borrower nor any Guarantor will create, assume or suffer to
exist any Guarantees of Debt of other Persons, except (i) Guarantees in
existence on the Closing Date in the aggregate amount of $ , (ii)
----------
Guarantees of Debt of the Borrower or other Guarantors and (iii) other
Guarantees in an aggregate amount not exceeding at any time 10% of Gross
Asset Value as of the last day of the Fiscal Quarter just ended.
(a) Amount Guaranteed by other Guarantees
not permitted by clauses (i) and (ii) $
---------
- ---------------
/2/ Include only Consolidated Interest Expense for Fiscal Quarter attributable
to Unsecured Funded Debt.
/3/ Include this paragraph 6 and Schedule 7 only with the first Compliance
Certificate furnished after the end of each Fiscal Year.
4
<PAGE>
(b) Gross Asset Value Schedule 2 $
---------
(c) 10% of (b) $
---------
Limitation: (a) may not exceed (c)
8. Consolidations, Mergers and Sales of Assets (Section 5.05)
Neither the Borrower nor any of the Guarantors will consolidate or merge
with or into, or acquire all or substantially all of the assets or stock of
any other Person, or sell, lease or otherwise transfer all or any
substantial part of its assets to, any other Person, provided that:
--------------
[(i) . . . (ii)]
(iii) the foregoing limitation on the acquisition of all or
substantially all the assets or stock of another Person shall not
prohibit, during any Fiscal Quarter, the acquisition of all or
substantially all of the assets or stock of another Person unless the
aggregate assets or stock acquired in a single acquisition or series of
related acquisitions of all or substantially all of the assets or stock
of another Person by the Borrower and the Guarantors during such Fiscal
Quarter constituted more than 20% of Gross Asset Value at the end of
the most recent Fiscal Quarter immediately preceding such Fiscal
Quarter; and
(iv) the foregoing limitation on the sale, lease or other transfer
of assets shall not prohibit, during any Fiscal Quarter, a transfer of
assets (in a single transaction or in a series of related transactions)
unless the aggregate assets to be so transferred, when combined with
all other assets transferred by the Borrower and the Guarantors during
such Fiscal Quarter and the immediately preceding 3 Fiscal Quarters,
constituted more than 20% of Gross Asset Value at the end of the most
recent Fiscal Quarter immediately preceding such Fiscal Quarter.
(a) Aggregate amount of assets or stock
acquired in a single acquisition or
series of related acquisitions
during Fiscal Quarter just ended $
---------
5
<PAGE>
(b) Gross Asset Value Schedule 2 $
---------
(c) 20% of (b) $
---------
Limitation: (a) may not exceed (c)
(d) Aggregate amount of assets sold
during Fiscal Quarter just
ended $
---------
(e) Aggregate amount of assets sold
during 3 prior Fiscal Quarters $
---------
(f) Sum of (d) and (e) $
---------
Limitation: (f) may not exceed (c)
9. Loans or Advances (Section 5.16)
Neither the Borrower nor any of the Guarantors shall make loans or advances
to any Person except as permitted by Section 5.17 and except:
(i) loans or advances to employees and directors not exceeding
$10,000,000 in the aggregate principal amount outstanding at any time;
[(ii) . . . (iii)]
(iv) other loans and advances by the Borrower and the Guarantors
to any JDN Venture which (x) are evidenced by notes (and, if requested
by the Agent, acting at the direction of the Required Banks, with such
notes, together with any related mortgage, have been assigned to and
pledged with the Agent, for the benefit of itself and the Banks, as
security for the payment of all obligations of the Borrower to the
Agent and the Banks hereunder) and (y) are in an amount which, together
with Investments permitted by clause (vi) of Section 5.17, do not
exceed 15% of Gross Asset Value as of the end of the most recent Fiscal
Quarter;
(a) Loans and advances to officers
and directors $
---------
6
<PAGE>
Limitation $10,000,000
(b) Other loans and advances evidenced by
notes (and, if required, pledged with
Agent) and not
permitted by clauses (i) through (iii) $
---------
(c) See line (e) and "Limitation" of paragraph 10 below
10. Investments (Section 5.17)
Investments of the Borrower as of the Closing Date (other than in
Subsidiaries, which are set forth in Schedule 4.08), are set forth on
Schedule 5.17. Neither the Borrower nor any of the Guarantors shall make
Investments after the Closing Date in any Person except as permitted by
Section 5.16 and except Investments in:
[(i) . . . (v)]
(vi) other Investments by the Borrower and the Guarantors in an amount
which, (x) together with loans and advances permitted by clause (iv) of
Section 5.16, do not exceed 15% of Gross Asset Value as of the end of the
most recent Fiscal Year, and (y) with respect to Investments in Persons over
which, after giving effect to such Investment, the Borrower or the
Guarantors do not have Control, do not exceed 5% of Gross Asset Value as of
the end of the most recent Fiscal Year;
(a) Line (b) of paragraph 9 above $
---------
(b) Other Investments not permitted by
clauses (i) through (v) $
---------
(c) Sum of (a) and (b) $
---------
(d) Gross Asset Value Schedule 2 $
---------
(e) 15% of (d) $
---------
Limitation: (c) may not exceed (e)
(f) Investments included in line (b) in
Persons over which the Borrower or the
7
<PAGE>
Guarantors do not have control $
---------
(g) 5% of (d) $
---------
Limitation: (f) may not exceed (g)
8
<PAGE>
Schedule 1
----------
Total Consolidated Liabilities
------------------------------
(a) Consolidated Liabilities $
---------
(b) Debt Guaranteed by Borrower or any
Guarantor $
---------
(c) face amount of all letters of credit
issued for the account of the Borrower
or any Guarantor $
---------
TOTAL CONSOLIDATED LIABILITIES (sum of (a)
through (c) $
---------
9
<PAGE>
Schedule 2
----------
Gross Asset Value
-----------------
(a) Net Operating Income for the 3 month
period ending on the last day of the
month just ended prior to the date of
determination, from each Stabilized
Property and the Cross Pointe Centre
Property $
---------
(b) 40 times (a) $
---------
(c) book value of Construction in Progress $
---------
(d) principal balance as of the last day
of the Fiscal Quarter just ended of
(x) the Debt of JDN Development Company,
Inc. listed on Schedule 1.01 which was
Guaranteed by the Borrower $
---------
(e) principal amount of Borrower's 50%
Guarantee of Debt of Dogwood Drive, LLC,
not to exceed $4,950,000 $
---------
(f) for all Guarantors which are not
Consolidated Entities, the book value
of the Borrower's or any other
Guarantor's interest therein $
---------
GROSS ASSET VALUE (sum of (b) through (f) $
---------
10
<PAGE>
Schedule 3
----------
Total Secured Debt/4/
-------------------
INTEREST FINAL
RATE/5/ MATURITY TOTAL
------- -------- ---------
Money Borrowed
- --------------
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
Total Money Borrowed $
--------
Deferred Purchase Price/6/
- --------------------------
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
Total Deferred Purchase Price $
--------
- ---------------
/4/ Include only Debt secured by a Mortgage
/5/ If rate is fixed, insert contract rate. If rate is floating, state that.
/6/ Exclude trade accounts payable in the ordinary course of business.
11
<PAGE>
Capital Leases in which Borrower is the Tenant
- ----------------------------------------------
$
-------------------------------------------------------------- --------
- -
$
-------------------------------------------------------------- --------
- -
Total Capital Leases $
--------
Letter of Credit Reimbursement
Obligations
- -----------
$
-------------------------------------------------------------- --------
- -
$
-------------------------------------------------------------- --------
- -
Total Letter of Credit
Reimbursement Obligations $
--------
Guarantees of Debt of Persons other than Borrower and Guarantors
- ----------------------------------------------------------------
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
$
---------------------------- ------- -------- --------
- -
TOTAL SECURED DEBT $
========
12
<PAGE>
Schedule 4
----------
EBITDA
------
quarter
- --- ---
consolidated net income $
---------
less extraordinary gains ($ )
---------
plus extraordinary losses $
--------
plus Consolidated Interest Expense $
--------
plus taxes on income $
--------
plus depreciation and amortization $
--------
plus other non-cash charges $
--------
Total $
--------
quarter
- --- ---
consolidated net income $
---------
less extraordinary gains ($ )
---------
plus extraordinary losses $
--------
plus Consolidated Interest Expense $
--------
plus taxes on income $
--------
plus depreciation and amortization $
--------
plus other non-cash charges $
--------
Total $
--------
quarter
- --- ---
consolidated net income $
---------
less extraordinary gains ($ )
---------
plus extraordinary losses $
--------
plus Consolidated Interest Expense $
--------
plus taxes on income $
--------
plus depreciation and amortization $
--------
plus other non-cash charges $
--------
Total $
--------
quarter
- --- ---
consolidated net income $
---------
less extraordinary gains ($ )
---------
plus extraordinary losses $
--------
plus Consolidated Interest Expense $
--------
plus taxes on income $
--------
plus depreciation and amortization $
--------
plus other non-cash charges $
--------
Total $
--------
EBITDA $
========
13
<PAGE>
Schedule 5
----------
Net Operating Income/7/
-----------------------
(for Fiscal Quarter just ended)
quarter
----- ---
Property revenues $
---------
less Property expenses
(excluding depreciation, amortization
and debt service) ($ )
---------
less management fee (3% of gross
rental income, excluding
percentage rents) ($ )
---------
less capital reserve ($0.15 per leasable
square foot) ($ )
---------
NET OPERATING INCOME $
---------
- ---------------
/7/ Include only Properties not subject to a Mortgage
14
<PAGE>
Schedule 6
----------
Unsecured Funded Debt/8/
------------------------
INTEREST FINAL
RATE/9/ MATURITY TOTAL
-------- -------- --------
Money Borrowed
- --------------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
Total Money Borrowed $
-------
Deferred Purchase Price/10/
- ---------------------------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
Total Deferred Purchase Price $
-------
Capital Leases in which the Borrower is the tenant
- --------------------------------------------------
$
----------------------------------------------------------------- -------
$
----------------------------------------------------------------- -------
Total Capital Leases $
-------
- ---------------
/8/ Include only Debt not secured by a Mortgage
/9/ If rate is fixed, insert contract rate. If rate is floating, state that.
/10/ Exclude trade accounts payable in the ordinary course of business.
15
<PAGE>
Letter of Credit Reimbursement
Obligations
- -----------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
Total Letter of Credit
Reimbursement Obligations $
-------
Guarantees of Debt of Persons other than Borrower and Guarantors
- ----------------------------------------------------------------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
$
---------------------------- -------- -------- -------
TOTAL UNSECURED FUNDED DEBT $
=======
16
<PAGE>
Schedule 7
----------
Funds from Operations
---------------------
(for Fiscal Year just ended)
Net income $
--------
plus depreciation and amortization
of real estate assets $
--------
plus net loss/(gain) on real estate
sales $
--------
plus loss/(gains) on extraordinary
items $
--------
plus depreciation of real estate
assets held in unconsolidated
entities $
--------
FUNDS FROM OPERATIONS $
--------
17
<PAGE>
EXHIBIT G
---------
JDN REALTY CORPORATION
CLOSING CERTIFICATE
-------------------
Reference is made to the Credit Agreement (the "Credit Agreement") dated as
of May 23, 1997, among JDN Realty Corporation, the Banks listed therein, and
Wachovia Bank of Georgia, N.A., as Agent. Capitalized terms used herein have
the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section 3.01(e) of the Credit Agreement,
-----------------------
, the duly authorized of JDN Realty Corporation,
- -------------- -----------------
hereby certifies to the Agent and the Banks that, to the best of my knowledge,
(i) no Default has occurred and is continuing as of the date hereof, and (ii)
the representations and warranties contained in Article IV of the Credit
Agreement are true on and as of the date hereof.
Certified as May 23, 1997.
By:___________________________
Printed Name:______________
Title:_____________________
<PAGE>
EXHIBIT H
---------
JDN REALTY CORPORATION
SECRETARY'S CERTIFICATE
The undersigned, , ,
------------------------------ ---------------------------
Secretary of JDN Realty Corporation, a Maryland corporation (the "Borrower"),
hereby certifies that [s]he has been duly elected, qualified and is acting in
such capacity and that, as such, [s]he is familiar with the facts herein
certified and is duly authorized to certify the same, and hereby further
certifies, in connection with the Credit Agreement dated as of May 23, 1997
among the Borrower, Wachovia Bank of Georgia, N.A. as Agent and as a Bank, and
certain other Banks listed on the signature pages thereof, that:
1. Attached hereto as Exhibit A is a complete and correct copy of the
Certificate of Incorporation of the Borrower as in full force and effect on the
date hereof as certified by the Secretary of State of the State of Maryland, the
Borrower's state of incorporation.
2. Attached hereto as Exhibit B is a complete and correct copy of the
Bylaws of the Borrower as in full force and effect on the date hereof.
3. Attached hereto as Exhibit C is a complete and correct copy of the
resolutions duly adopted by the Board of Directors of the Borrower on ,
----------
1997 approving, and authorizing the execution and delivery of, the Credit
Agreement, the Notes and the other Loan Documents (as such terms are defined in
the Credit Agreement) to which the Borrower is a party. Such resolutions have
not been repealed or amended and are in full force and effect, and no other
resolutions or consents have been adopted by the Board of Directors of the
Borrower in connection therewith.
4. , who is
--------------------------- ------------------------
of the Borrower signed the Credit Agreement, the Notes and the other Loan
Documents to which the Borrower is a party, was duly elected, qualified and
acting as such at the time [s]he signed the Credit Agreement, the Notes and
other Loan Documents to which the Borrower is a party, and [his/her] signature
appearing on the Credit Agreement, the Notes and the other Loan Documents to
which the Borrower is a party is [his/her] genuine signature.
<PAGE>
IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand as of May
23, 1997.
-------------------------------
2
<PAGE>
EXHIBIT I
---------
BORROWING BASE CERTIFICATE
Reference is made to the Credit Agreement dated as of May 23, 1997 (as
modified and supplemented and in effect from time to time, the "Credit
Agreement") among JDN Realty Corporation, the Banks from time to time parties
thereto, and Wachovia Bank of Georgia, N.A., as Agent. Capitalized terms used
herein shall have the meanings ascribed thereto in the Credit Agreement.
Pursuant to Section [3.01(h)][5.01(i)] of the Credit Agreement, ,
--------------
the duly authorized of the Borrower, hereby (i)
--------------------------
certifies to the Agent and the Banks that the calculation of the Borrowing Base
contained in this Borrowing Base Certificate is true, accurate and complete in
all material respects as of , .
----------- -----
The calculation of the Borrowing Base is as follows:
(a) Net Operating Income for the 3 month
period ending on the last day of the
Fiscal Quarter just ended prior to
the date of determination, from each
Eligible Unencumbered Stabilized
Property and the Cross Pointe Centre
Property $_________
(b) 10 times (a) $_________
(c) 4 times (b) $_________
(d) 0.60 times (c) $_________
(e) book value of Construction in Progress
on all Eligible Properties $_________
(f) 0.50 times (e) $_________
(g) lesser of (f) and $40,000,000 $_________
(h) Construction Reserve/11/ $_________
- --------------------------
/11/ Include only so long as Borrower does not have a Debt Rating of at least
BBB-from S&P or Baa3 from Moody's
<PAGE>
BORROWING BASE: sum of (d), plus (g), less
---- -----
(if applicable) (h) $________
JDN REALTY CORPORATION
By:_____________________________
Its:
2
<PAGE>
EXHIBIT J
---------
LIST OF ELIGIBLE PROPERTIES
---------------------------
[To follow]
<PAGE>
EXHIBIT K
---------
GUARANTY
--------
THIS GUARANTY (this "Guaranty") is made as of , , by ,
--------- ----- ----------
a corporation (the "Initial Guarantor" and a "Guarantor"; the
---------------
terms "Guarantor" and "Guarantors" shall include any Subsidiary of JDN Realty
Corporation which becomes a Guarantor pursuant to Section 15 hereof and Section
5.29 of the Credit Agreement referred to below) in favor of the Agent, for the
ratable benefit of the Banks, under the Credit Agreement referred to below;
W I T N E S S E T H
WHEREAS, JDN REALTY CORPORATION, a Maryland corporation (the "Borrower"),
WACHOVIA BANK OF GEORGIA, N.A., as Agent (the "Agent"), and certain other Banks
from time to time party thereto have entered into a certain Credit Agreement
dated as May 23, 1997 (as amended as of the date hereof and as it may be amended
or modified further from time to time, the "Credit Agreement"), providing,
subject to the terms and conditions thereof, for extensions of credit to be made
by the Banks to the Borrower which will the benefit the Guarantors;
WHEREAS, it is required by Section 5.29 of the Credit Agreement, that the
Initial Guarantor execute and deliver this Guaranty whereby it and, together
with other Guarantors which become such as contemplated in Section 15 hereof,
shall guarantee the payment when due of all principal, interest and other
amounts that shall be at any time payable by the Borrower under the Credit
Agreement, the Notes and the other Loan Documents; and
WHEREAS, in consideration of the financial and other support that the Borrower
has provided, and such financial and other support as the Borrower may in the
future provide, to the Guarantors, whether directly or indirectly, and in order
to induce the Banks and the Agent to enter into the Credit Agreement, the
Guarantors are willing to guarantee the obligations of the Borrower under the
Credit Agreement, the Notes, and the other Loan Documents;
<PAGE>
NOW, THEREFORE, in consideration of the premises and other good and valuable
consideration, the receipt and sufficiency of which are hereby acknowledged, the
parties hereto agree as follows:
SECTION 1. Definitions. Terms defined in the Credit Agreement and not
------------
otherwise defined herein have, as used herein, the respective meanings provided
for therein.
SECTION 2. Representations and Warranties. The Guarantors incorporate herein
-------------------------------
by reference as fully as if set forth herein all of the representations and
warranties pertaining to the Guarantors contained in Article IV of the Credit
Agreement (which representations and warranties shall be deemed to have been
renewed by the Guarantors upon each Borrowing under the Credit Agreement).
SECTION 3. Covenants. The Guarantors covenant that, so long as any Bank has
----------
any Commitment outstanding under the Credit Agreement or any amount payable
under the Credit Agreement or any Note shall remain unpaid, the Guarantors will
fully comply with those covenants set forth in Article V of the Credit Agreement
pertaining to the Guarantors, and the Guarantors incorporate herein by reference
as fully as if set forth herein all of such covenants.
SECTION 4. The Guaranty. The Guarantors hereby irrevocably, unconditionally
-------------
and jointly and severally guarantee (i) the full and punctual payment (whether
at stated maturity, upon acceleration or otherwise) of the principal of and
interest on each Note issued by the Borrower pursuant to the Credit Agreement,
and the full and punctual payment of all other amounts payable by the Borrower
under the Credit Agreement, including, without limitation, all Loans and
interest thereon, all compensation and indemnification amounts and fees payable
pursuant to the Credit Agreement and the Agent's Letter Agreement, and (ii) the
timely performance of all other obligations of the Borrower under the Credit
Agreement and the other Loan Documents (all of the foregoing obligations being
referred to collectively as the "Guaranteed Obligations"). Upon failure by the
Borrower to pay punctually any such amount or perform such obligations, each of
the Guarantors agrees that it shall forthwith on demand pay the amount not so
paid at the place and in the manner specified in the Credit Agreement, the
relevant Note or the relevant Loan Document, as the case may be, or perform such
obligation in accordance with the terms and conditions therefor specified in the
Credit Agreement or the other Loan Documents, and pay all costs of collection,
2
<PAGE>
including reasonable attorneys fees; provided that, notwithstanding the
--------
provisions of O.C.G.A. (S) 13-1-11(a)(2) to the contrary, the Guarantor shall
not be obligated to pay more than the attorneys fees actually incurred in
connection with such collection.
SECTION 5. Guaranty Unconditional. The obligations of the Guarantor
----------------------
hereunder shall be unconditional and absolute and, without limiting the
generality of the foregoing, shall not be released, discharged or otherwise
affected by:
(i) any extension, renewal, settlement, compromise, waiver or
release in respect of any obligation of the Borrower under the Credit
Agreement, any Note, or any other Loan Document, by operation of law or
otherwise or any obligation of any other guarantor of any of the Guaranteed
Obligations;
(ii) any modification or amendment of or supplement to the Credit
Agreement, any Note, or any other Loan Document;
(iii) any release, nonperfection or invalidity of any direct or
indirect security, if any, for any obligation of the Borrower under the
Credit Agreement, any Note, any Loan Document, or any obligations of any
other guarantor of any of the Guaranteed Obligations;
(iv) any change in the corporate structure or ownership of the
Borrower or any Guarantor or any other guarantor of any of the Guaranteed
Obligations, or any insolvency, bankruptcy, reorganization or other similar
proceeding affecting the Borrower, or any other Guarantor or any other
guarantor of the Guaranteed Obligations, or its assets or any resulting
release or discharge of any obligation of the Borrower, or any other
Guarantor or any other guarantor of any of the Guaranteed Obligations;
(v) the existence of any claim, setoff or other rights which the
Guarantors may have at any time against the Borrower, any other Guarantor or
any other guarantor of any of the Guaranteed Obligations, the Agent, any
Bank or any other Person, whether in connection herewith or any unrelated
transactions, provided that nothing herein shall prevent the assertion of
any such claim by separate suit or compulsory counterclaim;
3
<PAGE>
(vi) any invalidity or unenforceability relating to or against
the Borrower, or any other Guarantor or any other guarantor of any of the
Guaranteed Obligations, for any reason related to the Credit Agreement, any
other Loan Document, or any other Guaranty, or any provision of applicable
law or regulation purporting to prohibit the payment by the Borrower, or any
other Guarantor or any other guarantor of the Guaranteed Obligations, of the
principal of or interest on any Note or any other amount payable by the
Borrower under the Credit Agreement, the Notes, or any other Loan Document;
or
(vii) any other act or omission to act or delay of any kind by
the Borrower, any other Guarantor or any other guarantor of the Guaranteed
Obligations, the Agent, any Bank or any other Person or any other
circumstance whatsoever which might, but for the provisions of this
paragraph, constitute a legal or equitable discharge of the Guarantor's
obligations hereunder.
SECTION 6. Discharge Only Upon Payment In Full; Reinstatement In
-----------------------------------------------------
Certain Circumstances. The Guarantors' obligations hereunder shall remain in
- ---------------------
full force and effect until all Guaranteed Obligations shall have been paid in
full and the Commitments under the Credit Agreement shall have terminated or
expired. If at any time any payment of the principal of or interest on any Note
or any other amount payable by the Borrower under the Credit Agreement or any
other Loan Document is rescinded or must be otherwise restored or returned upon
the insolvency, bankruptcy or reorganization of the Borrower or otherwise, the
Guarantors' obligations hereunder with respect to such payment shall be
reinstated as though such payment had been due but not made at such time.
SECTION 7. Waiver of Notice by the Guarantors. The Guarantors
----------------------------------
irrevocably waive acceptance hereof, presentment, demand, protest and, to the
fullest extent permitted by law, any notice not provided for herein, as well as
any requirement that at any time any action be taken by any Person against the
Borrower, any other Guarantor or any other guarantor of the Guaranteed
Obligations, or any other Person.
4
<PAGE>
SECTION 8. Stay of Acceleration. If acceleration of the time for
--------------------
payment of any amount payable by the Borrower under the Credit Agreement, any
Note or any other Loan Document is stayed upon the insolvency, bankruptcy or
reorganization of the Borrower, all such amounts otherwise subject to
acceleration under the terms of the Credit Agreement, any Note or any other Loan
Document shall nonetheless be payable by the Guarantors hereunder forthwith on
demand by the Agent made at the request of the Required Banks.
SECTION 9. Notices. All notices, requests and other communications to
-------
any party hereunder shall be given or made by telecopier or other writing and
telecopied or mailed or delivered to the intended recipient at its address or
telecopier number set forth on the signature pages hereof or such other address
or telecopy number as such party may hereafter specify for such purpose by
notice to the Agent in accordance with the provisions of Section 9.01 of the
Credit Agreement. Except as otherwise provided in this Guaranty, all such
communications shall be deemed to have been duly given when transmitted by
telecopier, or personally delivered or, in the case of a mailed notice, 3
Domestic Business Days after such communication is deposited in the mails with
first class postage prepaid, in each case given or addressed as aforesaid.
SECTION 10. No Waivers. No failure or delay by the Agent or any Banks
----------
in exercising any right, power or privilege hereunder shall operate as a waiver
thereof nor shall any single or partial exercise thereof preclude any other or
further exercise thereof or the exercise of any other right, power or privilege.
The rights and remedies provided in this Guaranty, the Credit Agreement, the
Notes, and the other Loan Documents shall be cumulative and not exclusive of any
rights or remedies provided by law.
SECTION 11. Successors and Assigns. This Guaranty is for the benefit
----------------------
of the Agent and the Banks and their respective successors and assigns and in
the event of an assignment of any amounts payable under the Credit Agreement,
the Notes, or the other Loan Documents, the rights hereunder, to the extent
applicable to the indebtedness so assigned, may be transferred with such
indebtedness. This Guaranty may not be assigned by the Guarantors without the
prior written consent of the Agent and the Required Banks, and shall be binding
upon the Guarantors and their respective successors and permitted assigns.
5
<PAGE>
SECTION 12. Changes in Writing. Neither this Guaranty nor any
------------------
provision hereof may be changed, waived, discharged or terminated orally, but
only in writing signed by the Guarantors and the Agent, with the consent of the
Required Banks.
SECTION 13. GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF JURY
---------------------------------------------------------
TRIAL. THIS GUARANTY SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE
- -----
LAW OF THE STATE OF GEORGIA. EACH OF THE GUARANTOR AND THE AGENT HEREBY SUBMITS
TO THE NONEXCLUSIVE JURISDICTION OF THE UNITED STATES DISTRICT COURT FOR THE
NORTHERN DISTRICT OF GEORGIA AND OF ANY GEORGIA STATE COURT SITTING IN ATLANTA,
GEORGIA AND FOR PURPOSES OF ALL LEGAL PROCEEDINGS ARISING OUT OF OR RELATING TO
THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED HEREBY. THE GUARANTORS
IRREVOCABLY WAIVE, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH
ANY OF THEM MAY NOW OR HEREAFTER HAVE TO THE LAYING OF THE VENUE OF ANY SUCH
PROCEEDING BROUGHT IN SUCH A COURT AND ANY CLAIM THAT ANY SUCH PROCEEDING
BROUGHT IN SUCH A COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. EACH OF THE
GUARANTORS AND THE Agent HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN ANY LEGAL PROCEEDING
ARISING OUT OF OR RELATING TO THIS GUARANTY OR THE TRANSACTIONS CONTEMPLATED
HEREBY.
SECTION 14. Taxes, etc. All payments required to be made by the
----------
Guarantor hereunder shall be made without setoff or counterclaim and free and
clear of and without deduction or withholding for or on account of, any present
or future taxes, levies, imposts, duties or other charges of whatsoever nature
imposed by any government or any political or taxing authority pursuant and
subject to the provisions of Section 2.11(c) of the Credit Agreement, the terms
of which are incorporated herein by reference as to the Guarantors as fully as
if set forth herein, and for such purposes, the rights and obligations of the
Borrower under such Section shall devolve to the Guarantors as to payments
required to be made by the Guarantors hereunder.
SECTION 15. Additional Guarantors; Release of Guarantors. Section
--------------------------------------------
5.29 of the Credit Agreement provides that all new Subsidiaries and, under the
circumstances described therein, JDN Structured Finance 1, Inc., must become
Guarantors, by, among other things, executing and delivering to the Agent a
counterpart of this Guaranty. Any Subsidiary which executes and delivers to the
Agent a counterpart of this Guaranty shall be a Guarantor for all purposes
hereunder. Under certain circumstances described in the last sentence of
6
<PAGE>
Section 5.05 of the Credit Agreement, Guarantors may obtain from the Agent a
written release from this Guaranty pursuant to the provisions of such sentence,
and upon obtaining such written release, any such Subsidiary shall no longer be
a Guarantor hereunder. Each other Guarantor consents and agrees to any such
release and agrees that no such release shall affect its obligations hereunder.
SECTION 16. Other Waivers by the Guarantors. The Guarantors hereby
-------------------------------
expressly waive, renounce, and agree not to assert, any right, claim or cause of
action, including, without limitation, a claim for reimbursement, subrogation,
indemnification or otherwise, against the Borrower arising out of or by reason
of this Guaranty or the obligations of the Guarantors hereunder, including,
without limitation, the payment or securing or purchasing of any of the
Guaranteed Obligations by the Guarantors. The waiver, renunciation and
agreement contained in the immediately preceding sentence is for the benefit of
the Agent and the Banks and also for the benefit of the Borrower who may assert
the benefits thereof as a third-party beneficiary, and the Guarantors may be
released from such waiver, renunciation and agreement only by the execution and
delivery, by the Agent, the Required Banks and the Borrower, of an instrument
expressly releasing the Guarantors therefrom.
[Signatures commence on next page]
7
<PAGE>
IN WITNESS WHEREOF, the Initial Guarantor has caused this Guaranty to
be duly executed, under seal, by its authorized officer as of the date first
above written.
--------------------------
By: ______________________
Title:
8
<PAGE>
EXHIBIT L
---------
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
, , by and between JDN REALTY CORPORATION, a Maryland
- ------- -------
corporation (the "Principal") and , a
------------------------ -----------------
corporation] (the"Initial Subsidiary Guarantor and a "Subsidiary Guarantor"; the
terms "Subsidiary Guarantor" and "Subsidiary Guarantors" shall include any
Subsidiary of JDN Realty Corporation which becomes a Guarantor pursuant to the
last paragraph hereof and Section 5.29 of the Credit Agreement referred to
below). The Principal and each of the Subsidiary Guarantors are sometimes
hereinafter referred to individually as a "Contributing Party" and collectively
as the "Contributing Parties").
W I T N E S S E T H:
WHEREAS, pursuant to that certain Credit Agreement, dated as of May 23,
1997 among the Principal, the Banks party thereto and Wachovia Bank of Georgia,
N.A., as Agent (such agreement, as amended as of the date hereof and as the same
may from time to time be amended, modified, restated or extended, being
hereinafter referred to as the "Credit Agreement"; capitalized terms used herein
shall have the meanings ascribed thereto in the Credit Agreement), the Banks
have agreed to extend financial accommodations to the Principal;
WHEREAS, it is required by Section 5.29 of the Credit Agreement that
the Initial Subsidiary Guarantor, execute and deliver that certain Guaranty,
dated as of even date herewith (such agreement, as the same may from time to
time be amended, modified, restated or extended, being hereinafter referred to
as the "Guaranty"), pursuant to which, among other things, the Subsidiary
Guarantor and, together with other Subsidiary Guarantors which become such as
contemplated in the last paragraph hereof, have jointly and severally agreed to
guarantee the "Guaranteed Obligations" (as defined in the Guaranty); and
WHEREAS, each Subsidiary Guarantor is a direct or indirect subsidiary
of the Principal and is engaged in businesses related to those of the Principal
and each other Subsidiary Guarantor, and each of the Subsidiary Guarantors will
derive direct or indirect economic benefit from the effectiveness and existence
of the Credit Agreement;
<PAGE>
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce each Subsidiary Guarantor to enter into the
Guaranty, it is agreed as follows:
To the extent that any Subsidiary Guarantor shall, under the Guaranty,
make a payment (a "Subsidiary Guarantor Payment") of a portion of the Guaranteed
Obligations, then, without limiting its rights of subrogation against the
principal, such Subsidiary Guarantor shall be entitled to contribution and
indemnification from, and be reimbursed by, each of the other Contributing
Parties in an amount, for each such Contributing Party, equal to a fraction of
such Subsidiary Guarantor Payment, the numerator of which fraction is such
Contributing Party's Allocable Amount and the denominator of which is the sum of
the Allocable Amounts of all of the Contributing Parties.
As of any date of determination, the "Allocable Amount" of each
Contributing Party shall be equal to the maximum amount of liability which could
be asserted against such Contributing Party hereunder with respect to the
applicable Subsidiary Guarantor Payment without (i) rendering such Contributing
Party "insolvent" within the meaning of Section 101(31) of the Federal
Bankruptcy Code (the "Bankruptcy Code") or Section 2 of either the Uniform
Fraudulent Transfer Act (the "UFTA") or the Uniform Fraudulent Conveyance Act
(the "UFCA"), (ii) leaving such Contributing Party with unreasonably small
capital, within the meaning of Section 548 of the Bankruptcy Code or Section 4
of the UFTA or Section 5 of the UFCA, or (iii) leaving such Contributing Party
unable to pay its debts as they become due within the meaning of Section 548 of
the Bankruptcy Code or Section 4 of the UFTA or Section 6 of the UFCA.
This Agreement is intended only to define the relative rights of the
Contributing Parties, and nothing set forth in this Agreement is intended to or
shall impair the obligations of the Subsidiary Guarantors, jointly and
severally, to pay any amounts, as and when the same shall become due and payable
in accordance with the terms of the Guaranty.
The parties hereto acknowledge that the rights of contribution and
indemnification hereunder shall constitute assets in favor of each Subsidiary
Guarantor to which such contribution and indemnification is owing.
2
<PAGE>
This Agreement shall become effective upon its execution by each of the
Contributing Parties and shall continue in full force and effect and may not be
terminated or otherwise revoked by any Contributing Party until all of the
Guaranteed Obligations shall have been indefeasibly paid in full (in lawful
money of the United States of America) and discharged and the Credit Agreement
and financing arrangements evidenced and governed by the Credit Agreement shall
have been terminated. Each Contributing Party agrees that if, notwithstanding
the foregoing, such Contributing Party shall have any right under applicable law
to terminate or revoke this Agreement, and such Contributing Party shall attempt
to exercise such right, then such termination or revocation shall not be
effective until a written notice of such revocation or termination, specifically
referring hereto and signed by such Contributing Party, is actually received by
each of the other Contributing Parties and by the Agent at its notice address
set forth in the Credit Agreement. Such notice shall not affect the right or
power of any Contributing Party to enforce rights arising prior to receipt of
such written notice by each of the other Contributing Parties and the Agent. If
any Bank grants additional loans to the Principal or takes other action giving
rise to additional Guaranteed Obligations after any Contributing Party has
exercised any right to terminate or revoke this Agreement but before the Agent
receives such written notice, the rights of each other Contributing Party to
contribution and indemnification hereunder in connection with any Subsidiary
Guarantor Payments made with respect to such loans or Guaranteed Obligations
shall be the same as if such termination or revocation had not occurred.
Section 5.29 of the Credit Agreement provides that new Subsidiaries, and
under the circumstances described therein, JDN Structured Finance 1, Inc., must
become Guarantors by, among other things, executing and delivering to the Agent
a counterpart of the Guaranty and of this Contribution Agreement. Any
Subsidiary which executes and delivers to the Agent a counterpart of the
Guaranty and of this Contribution Agreement shall be a Subsidiary Guarantor for
all purposes hereunder. Under certain circumstances described in the last
sentence of Section 5.05 of the Credit Agreement, Guarantors may obtain from the
Agent a written release from the Guaranty pursuant to the provisions of such
sentence, and upon obtaining such written release, any such Subsidiary shall no
longer be a Subsidiary Guarantor or Contributing Party hereunder, and such
release shall automatically and without further action constitute a release by
each other Contributing Party of all obligations of such Subsidiary hereunder.
Each other Subsidiary Guarantor consents and agrees to any such release and
agrees that no such release shall affect its obligations hereunder, except as to
the Subsidiary so released.
3
<PAGE>
IN WITNESS WHEREOF, each Contributing Party has executed and delivered
this Agreement, under seal, as of the date first above written.
JDN REALTY CORPORATION (SEAL)
By:__________________________
Title:
---------------------- (SEAL)
By: ______________________
Title:
4
<PAGE>
Schedule 1.01
-------------
Loans to JDN Development Company, Inc. guaranteed by Borrower
-------------------------------------------------------------
which were closed as of the Closing Date
----------------------------------------
[TO BE COMPLETED BY THE BORROWER]
5
<PAGE>
Schedule 4.08
-------------
Subsidiaries
------------
Name Jurisdiction of Incorporation
- ---- -----------------------------
[TO BE COMPLETED BY THE BORROWER]
6
<PAGE>
Schedule 4.14
-------------
Environmental Matters
---------------------
The Borrower discloses the existence of the following: (i) a remediation
agreement (relating to a leaking, underground storage tank) entered into between
the State of Georgia and the owner of the Stop 'n' Go site adjacent to the
QuikTrip parcel located at the Borrower's Lawrenceville Property; (ii) a
remediation agreement (relating to soil and groundwater contamination) entered
into between the State of North Carolina and the owner of a tract adjoining the
Borrower's Greenville, North Carolina Property; and (iii) a limited Phase II
environmental assessment recommendation that impacted soils be remediated at the
Greensboro, North Carolina Property (but the Borrower has no knowledge that any
soil or water on or adjacent to any Property is contaminated by any Hazardous
Material.
7
<PAGE>
Schedule 5.17
-------------
Existing Investments/12/
---------------------
(TO BE COMPLETED BY THE BORROWER)
- ----------------------
/12/ Exclude Subsidiaries, which are set forth on Schedule 4.08.
----------------------------------------------------------
8
<PAGE>
Schedule 5.25
-------------
Existing Guarantees
-------------------
[TO BE COMPLETED BY THE BORROWER]
9
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