<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 September 30, 1998
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
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(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)
359 East Paces Ferry Road, NE, Suite 400, Atlanta, GA 30305
------------------------------------------------------------
(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 October 23, 1998, 31,977,798 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--September 30, 1998 and
December 31, 1997 2
Condensed Consolidated Statements of Income--Three Months Ended
September 30, 1998 and 1997 3
Condensed Consolidated Statements of Income--Nine Months Ended
September 30, 1998 and 1997 4
Condensed Consolidated Statements of Cash Flows--Nine Months Ended
September 30, 1998 and 1997 5
Notes to Condensed Consolidated Financial Statements 6
1
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED BALANCE SHEETS
<TABLE>
<CAPTION>
September 30, December 31,
1998 1997
------------- ------------
(Unaudited)
(In thousands)
<S> <C> <C>
ASSETS
Shopping center properties, at cost:
Land $ 118,796 $ 85,837
Buildings and improvements 542,176 397,110
Property under development 107,662 52,356
--------- --------
768,634 535,303
Less: accumulated depreciation and amortization (49,627) (38,306)
--------- --------
Shopping center properties, net 719,007 496,997
Cash and cash equivalents - 11,439
Rents receivable 5,472 2,745
Investments in and advances to unconsolidated entities 125,344 71,221
Deferred costs, net of amortization 4,629 4,189
Other assets 11,772 13,162
--------- --------
$ 866,224 $599,753
========= ========
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
Unsecured notes payable $ 234,557 $159,511
Unsecured lines of credit 105,507 43,500
Mortgage notes payable 18,603 13,591
Accounts payable and accrued expenses 9,109 6,719
Other liabilities 10,269 4,844
--------- --------
Total Liabilities 378,045 228,165
Third party investors' interest 3,000 -
Shareholders' Equity
Preferred stock, par value $.01 per share -
authorized 20,000,000 shares: 9 3/8% Series A
Cumulative Redeemable Preferred Stock,
liquidation preference $25 per share, issued and
outstanding 2,000,000 and -0- shares in 1998
and 1997, respectively 20 -
Common stock, par value $.01 per share -
authorized 150,000,000 shares, issued and
outstanding 31,000,298 and 27,745,798 shares
in 1998 and 1997, respectively 310 277
Paid-in capital 491,938 378,400
Accumulated deficit (7,089) (7,089)
--------- --------
Total Shareholders' Equity 485,179 371,588
--------- --------
$ 866,224 $599,753
========= ========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
2
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
September 30,
1998 1997
------- -------
<S> <C> <C>
(In thousands)
Revenues:
Minimum and percentage rents $18,294 $11,070
Recoveries from tenants 2,308 1,238
Other revenue 15 30
------- -------
Total revenues 20,617 12,338
Operating expenses:
Operating and maintenance 1,659 851
Real estate taxes 1,043 701
General and administrative 1,866 976
Depreciation and amortization 4,240 2,573
------- -------
Total operating expenses 8,808 5,101
------- -------
Income from operations 11,809 7,237
Other income (expense):
Interest expense, net (2,602) (1,284)
Other income, net 226 331
Equity in net income of unconsolidated entities 878 1,146
------- -------
Income before minority interest in net income
of consolidated subsidiary, net gain (loss) on real estate
sales and extraordinary items 10,311 7,430
Minority interest in net income of consolidated subsidiary (50) -
------- -------
Income before net gain (loss) on real estate sales
and extraordinary items 10,261 7,430
Net gain (loss) on real estate sales 294 (352)
------- -------
Income before extraordinary items 10,555 7,078
Extraordinary items - (5,539)
------- -------
Net Income 10,555 1,539
Dividends to preferred shareholders (169) -
------- -------
Net income attributable to common shareholders $10,386 $ 1,539
======= =======
Income per common share - basic:
Income before extraordinary items (net of preferred dividends) $ 0.34 $ 0.31
Extraordinary items - (0.24)
------- -------
Net income attributable to common shareholders $ 0.34 $ 0.07
======= =======
Income per common share - diluted:
Income before extraordinary items (net of preferred dividends) $ 0.33 $ 0.30
Extraordinary items - (0.23)
------- -------
======= =======
Net income attributable to common shareholders $ 0.33 $ 0.07
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
3
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
-------------- --------------
(In thousands)
<S> <C> <C>
Revenues:
Minimum and percentage rents $50,590 $30,303
Recoveries from tenants 6,187 3,111
Other revenue 95 118
------- -------
Total revenues 56,872 33,532
Operating expenses:
Operating and maintenance 4,393 2,263
Real estate taxes 3,042 1,675
General and administrative 5,309 2,943
Depreciation and amortization 11,828 7,125
------- -------
Total operating expenses 24,572 14,006
------- -------
Income from operations 32,300 19,526
Other income (expense):
Interest expense, net (6,428) (3,297)
Other income, net 647 887
Equity in net income of unconsolidated entities 2,968 2,543
------- -------
Income before minority interest in net income
of consolidated subsidiary, net gain (loss)
on real estate sales and extraordinary items 29,487 19,659
Minority interest in net income of consolidated subsidiary (146) -
------- -------
Income before net gain on real estate sales
and extraordinary items 29,341 19,659
Net gain (loss) on real estate sales 379 (352)
------- -------
Income before extraordinary items 29,720 19,307
Extraordinary items - (5,940)
------- -------
Net Income 29,720 13,367
Dividends to preferred shareholders (169) -
------- -------
Net income attributable to common shareholders $29,551 $13,367
======= =======
Income per common share - basic:
Income before extraordinary items (net of
preferred dividends) $ 0.98 $ 0.87
Extraordinary items - (0.27)
------- -------
Net income attributable to common shareholders $ 0.98 $ 0.60
======= =======
Income per common share - diluted:
Income before extraordinary items (net of
preferred dividends) $ 0.96 $ 0.85
Extraordinary items - (0.26)
------- -------
Net income attributable to common shareholders $ 0.96 $ 0.59
======= =======
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
4
<PAGE>
JDN REALTY CORPORATION
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)
<TABLE>
<CAPTION>
Nine Months Ended September 30,
1998 1997
--------- ---------
(In thousands)
<S> <C> <C>
Net cash provided by operating activities $ 35,937 $ 27,513
Cash flows from investing activities:
Development of shopping center properties (113,636) (81,126)
Improvements to shopping center properties (1,233) (504)
Purchase of shopping center properties (93,007) (34,029)
Investments in and advances to unconsolidated entities (50,734) (30,269)
Other (8,741) (1,996)
--------- ---------
Net cash used in investing activities (267,351) (147,924)
Cash flows from financing activities:
Proceeds from unsecured line of credit 252,053 -
Proceeds from mortgage notes payable - 265,428
Proceeds from issuance of notes payable 76,548 159,486
Principal payments on unsecured line of credit (190,046) -
Principal payments on mortgage notes payable (358) (346,960)
Proceeds from issuance of common shares, net of
underwriting commissions and offering expenses 66,792 66,424
Proceeds from issuance of preferred shares, net of
underwriting commissions and offering expenses 48,276 -
Dividends paid to preferred shareholders (169) -
Dividends paid to common shareholders (32,415) (22,786)
Other (706) (1,683)
--------- ---------
Net cash provided by financing activities 219,975 119,909
--------- ---------
Decrease in cash and cash equivalents (11,439) (502)
Cash and cash equivalents, beginning of period 11,439 2,709
--------- ---------
Cash and cash equivalents, end of period $ - $ 2,207
========= =========
</TABLE>
SEE NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
5
<PAGE>
JDN REALTY CORPORATION
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
SEPTEMBER 30, 1998
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
anchored by value-oriented retailers. As of September 30, 1998, the Company
owned and operated, either directly or through affiliated entities or a joint
venture, a total of 85 shopping center properties and had 39 projects under
construction. The Company has elected to be treated 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. As of September 30, 1998,
the Company had invested $9.1 million in Development Company in the form of
equity capital, $87.8 million in the form of secured notes receivable and $28.5
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, 1997 has been
derived from the audited consolidated financial statements at that date.
Operating results for the three and nine month periods ended September 30, 1998
are not necessarily indicative of the results that may be expected for the year
ending December 31, 1998 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, 1997.
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, as amended (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.
Earnings Per Share. Earnings per share was computed and restated, in the
case of periods prior to the fourth quarter of 1997, using the requirements of
Statement of Financial Accounting Standards No. 128, Earnings Per Share, and
Staff Accounting Bulletin No. 98. Basic earnings per share was computed by
dividing earnings attributable to common shareholders by the weighted average
number of shares of common stock outstanding during the period excluding
unvested shares of restricted stock. The denominator for diluted earnings per
share considers the dilutive effect of outstanding stock options.
6
<PAGE>
Reclassifications. Certain amounts as previously reported have been
reclassified to conform to the current period's presentation.
4. DISTRIBUTION
On September 8, 1998, the Company's Board of Directors declared a cash
distribution of $0.36 per share to common shareholders of record on September
18, 1998. This distribution was paid on September 30, 1998.
5. UNSECURED LINE OF CREDIT
On September 2, 1998, the Company amended its unsecured line of credit (the
"Unsecured Line of Credit") as follows: (1) increased maximum borrowings allowed
from $150,000,000 to $174,750,000 (expandable to $200,000,000); (2) extended the
maturity date by one year from May 22, 2000 to May 22, 2001; and (3) reduced the
borrowing rate from LIBOR plus 1.25% to LIBOR plus 1.00%.
6. REVOLVING LOAN CREDIT AGREEMENT
On September 2, 1998, the Company executed an unsecured $20.0 million
Revolving Loan Credit Agreement with Wachovia Bank, N. A. (the "Revolving Line
of Credit"). Under the terms of the Revolving Line of Credit, the Company may
borrow on a daily basis at an interest rate of LIBOR plus 1.00%. The Revolving
Line of Credit matures in September 1999.
7. PREFERRED STOCK OFFERING
On September 17, 1998, the Company issued 2,000,000 shares of its 9 3/8%
Series A Cumulative Redeemable Preferred Stock (the "Series A Preferred Stock"),
par value $0.01 per share, with a liquidation preference of $25.00 per share
(the "Preferred Stock Offering"). The Series A Preferred Stock have no stated
maturity but is redeemable at the Company's option on or after September 15,
2003. Dividends on the Series A Preferred Stock are cumulative from the date of
original issue and are payable quarterly on or about the last day of March,
June, September and December of each year, when and as declared. On September
30, 1998, the Company paid an initial dividend of $0.0846 per share to preferred
shareholders of record on September 17, 1998. The net proceeds from the
Preferred Stock Offering of approximately $48.3 million were used to repay
amounts outstanding under the Company's Unsecured Line of Credit.
8. SUBSEQUENT EVENTS
On October 7, 1998, the Company acquired all of the limited liability
company membership interests in an entity which owns a 244,631 square foot
shopping center in Denver, Colorado for approximately $12.8 million. The
property is subject to a $25.4 million mortgage loan under which the limited
liability Company is the obligor and the Company is the guarantor.
On October 19, 1998, the Company issued 977,500 shares of its common stock,
which netted proceeds to the Company of approximately $19.0 million. The net
proceeds from this offering were used to reduce amounts outstanding under the
Company's Unsecured Line of Credit.
7
<PAGE>
9. EARNINGS PER SHARE
The following table sets forth the computation of basic and diluted
earnings per share (in thousands except per share data):
<TABLE>
<CAPTION>
Three months ended September 30, Nine months ended September 30,
1998 1997 1998 1997
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Numerator:
Income before extraordinary items $ 10,555 $ 7,078 $ 29,720 $ 19,307
Extraordinary items - (5,539) - (5,940)
-------- ------- -------- --------
Net income 10,555 1,539 29,720 13,367
Dividends to preferred shareholders (169) - (169) -
-------- ------- -------- --------
Net income attributable to
common shareholders $ 10,386 $ 1,539 $ 29,551 $ 13,367
======== ======= ======== ========
Denominator:
Weighted-average shares outstanding 30,988 23,200 30,293 22,282
Unvested restricted stock outstanding (111) - (80) -
-------- ------- -------- --------
Denominator for basic earnings per share 30,877 23,200 30,213 22,282
Dilutive effect of stock options and
unvested restricted stock 501 506 537 385
-------- ------- -------- --------
Denominator for diluted earnings per share 31,378 23,706 30,750 22,667
======== ======= ======== ========
Income per common share - basic:
Income before extraordinary
items (net of preferred dividends) $ 0.34 $ 0.31 $ 0.98 $ 0.87
Extraordinary items - (0.24) - (0.27)
-------- ------- -------- --------
Net income attributable to
common shareholders $ 0.34 $ 0.07 $ 0.98 $ 0.60
======== ======= ======== ========
Income per common share - diluted:
Income before extraordinary
items (net of preferred dividends) $ 0.33 $ 0.30 $ 0.96 $ 0.85
Extraordinary items - (0.23) - (0.26)
-------- ------- -------- --------
Net income attributable to
common shareholders $ 0.33 $ 0.07 $ 0.96 $ 0.59
======== ======= ======== ========
</TABLE>
Options to purchase 18,000 and -0- shares of common stock for the three
months ended September 30, 1998 and 1997, respectively, were outstanding but
were not included in the computation of diluted earnings per share because the
options' exercise prices were greater than the average market price of the
common shares and, therefore, the effect would be antidilutive.
The Company is the general partner in a limited partnership that issued
limited partnership units valued at $3.0 million in a limited partnership formed
to own and operate a shopping center in Milwaukee, Wisconsin. Subject to
certain conditions, the limited partnership units are exchangeable for cash or
139,535 shares of the Company's common stock beginning in February 1999. Using
the "if-converted" method, the effect of these units is antidilutive; therefore,
they have been excluded from the computation of earnings per share.
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 company which
specializes in the development and asset management of retail shopping centers
anchored by value-oriented retailers. As of September 30, 1998, the Company
owned and operated, either directly or through affiliated entities or a joint
venture, a total of 85 shopping center properties and had 39 projects under
construction. The Company has elected to be treated 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 or the purchase, redevelopment
and sale of an existing real estate property. As of September 30, 1998, the
Company had invested $9.1 million in Development Company in the form of equity
capital, $87.8 million in the form of secured notes receivable and $28.5 million
in the form of unsecured advances.
Results of Operations
Comparison of the Three Months Ended September 30, 1998 to the Three Months
Ended September 30, 1997
Minimum and percentage rents increased $7.2 million or 65.3% to $18.3
million for the three months ended September 30, 1998 from $11.1 million for the
same period in 1997. During 1998 and 1997, the Company began operations at 22
properties which it developed totaling 2.2 million square feet (the "Development
Properties"). Minimum and percentage rents increased $3.6 million for the three
months ended September 30, 1998 over the same period in 1997 as a result of the
operations of the Development Properties. During 1998 and 1997, the Company
acquired 20 shopping center properties from third parties totaling 2.9 million
square feet of gross leasable area (the "Acquisition Properties"). Minimum and
percentage rents increased $3.6 million for the three months ended September 30,
1998 over the same period in 1997 as a result of the operations of the
Acquisition Properties. There were no significant changes in minimum and
percentage rents at existing properties.
Recoveries from tenants increased $1.1 million or 86.4% to $2.3 million for
the three months ended September 30, 1998 from $1.2 million for the same period
in 1997. Of this increase, $205,000 relates to the Development Properties and
$963,000 relates to the Acquisition Properties. These increases are offset by a
decrease in recoveries from tenants at existing properties due to a decrease in
recoverable expenses.
Other revenue decreased $15,000 or 50.0% to $15,000 for the three months
ended September 30, 1998 from $30,000 for the same period in 1997. 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 $808,000 or 94.9% to $1.7
million for the three months ended September 30, 1998 from $851,000 for the same
period in 1997. Of this increase, $144,000 relates to the Development
Properties and $699,000 relates to the Acquisition Properties. These increases
are offset by a decrease in operating and maintenance expenses at existing
properties.
Real estate taxes increased $342,000 or 48.8% to $1.0 million for the three
months ended September 30, 1998 from $701,000 for the same period in 1997. Of
this increase, $98,000 relates to the
9
<PAGE>
Development Properties and $315,000 relates to the Acquisition Properties. These
increases are offset by a decrease in real estate taxes at the existing
properties due primarily to savings from the separate tax platting of an anchor
tenant tract.
General and administrative expenses increased $890,000 or 91.2% to $1.9
million for the three months ended September 30, 1998 from $1.0 million for the
same period in 1997. The increase primarily reflects the cost of additional
employees and other expenses associated with the increased number of properties
owned and operated by the Company.
Depreciation and amortization expense increased $1.7 million or 64.8% to
$4.2 million for the three months ended September 30, 1998 from $2.6 million for
the same period in 1997. Of this increase, $765,000 relates to the Development
Properties and $981,000 relates to the Acquisition Properties. There was no
significant change in depreciation and amortization expense at existing
properties.
Interest expense, net of capitalized amounts, increased $1.3 million to
$2.6 million for the three months ended September 30, 1998 from $1.3 million for
the same period in 1997. This increase results primarily from an increase in
average debt balances between 1998 and 1997.
Other income, net decreased $105,000 or 31.7% to $226,000 for the three
months ended September 30, 1998 from $331,000 for the same period in 1997. The
decrease is primarily attributable to the decreased interest income associated
with the cancellation of a $10.5 million mortgage note receivable in February
1998, offset by an increase in interest income earned on an $8.0 million
mortgage note receivable issued in April 1998.
Equity in net income of unconsolidated entities decreased $268,000 or 23.4%
to $878,000 for the three months ended September 30, 1998 from $1.1 million for
the same period in 1997. This decrease results primarily from lower net gains
on land sales at Development Company.
Minority interest in net income of consolidated subsidiary for the three
months ended September 30, 1998 of $50,000 represents the third party investors'
share of the net income of a limited partnership, which owns and operates a
shopping center located in Milwaukee, Wisconsin. There was no such minority
interest in 1997.
Net gain on real estate sales for the three months ended September 30, 1998
of $294,000 represents a gain on the sale of a parcel of land located in
Lexington, Virginia. Net loss on real estate sales for the three months ended
September 30, 1997 of $352,000 represents a loss on the sale of two parcels of
land in Wilmington, North Carolina.
Extraordinary items for the three months ended September 30, 1997 represent
charges to earnings of unamortized deferred financing costs and prepayment
penalties of $5.5 million associated with the prepayment of a mortgage loan with
an outstanding balance of $71.2 million (the "Term Debt"). There were no
extraordinary items for the three months ended September 30, 1998.
Comparison of the Nine Months Ended September 30, 1998 to the Nine Months Ended
September 30, 1997.
Minimum and percentage rents increased $20.3 million or 66.9% to $50.6
million for the nine months ended September 30, 1998 from $30.3 million for the
same period in 1997. Of this increase, $9.8 million relates to the Development
Properties and $10.2 million relates to the Acquisition Properties. The
remaining increase relates to higher minimum and percentage rents at existing
properties.
Recoveries from tenants increased $3.1 million or 98.9% to $6.2 million for
the nine months ended September 30, 1998 from $3.1 million for the same period
in 1997. Of this increase, $491,000 relates to the Development Properties and
$2.5 million relates to the Acquisition Properties. The remaining increase
relates to an increase in recoverable expenses at existing properties.
Other revenue decreased $23,000 or 19.5% to $95,000 for the nine months
ended September 30, 1998 from $118,000 for the same period in 1997. This
decrease is the result of a reduction in revenues associated with managing and
leasing fewer properties for third-party owners.
10
<PAGE>
Operating and maintenance expenses increased $2.1 million or 94.1% to $4.4
million for the nine months ended September 30, 1998 from $2.3 million for the
same period in 1997. Of this increase, $257,000 relates to the Development
Properties and $1.8 million relates to the Acquisition Properties. The
remaining increase relates to increased expenses at existing properties.
Real estate taxes increased $1.4 million or 81.6% to $3.0 million for the
nine months ended September 30, 1998 from $1.7 million for the same period in
1997. Of this increase, $285,000 relates to the Development Properties and $1.0
million relates to the Acquisition Properties. The remaining increase relates
to increased real estate taxes at existing properties.
General and administrative expenses increased $2.4 million or 80.4% to $5.3
million for the nine months ended September 30, 1998 from $2.9 million for the
same period in 1997. The increase primarily reflects the cost of additional
employees and other expenses associated with the increased number of properties
owned and operated by the Company and increased costs of the annual report and
annual meeting of shareholders.
Depreciation and amortization expense increased $4.7 million or 66.0% to
$11.8 million for the nine months ended September 30, 1998 from $7.1 million for
the same period in 1997. Of this increase, $2.1 million relates to the
Development Properties and $2.6 million relates to the Acquisition Properties.
There was no significant change in depreciation and amortization expense at
existing properties.
Interest expense, net of capitalized amounts, increased $3.1 million or
95.0% to $6.4 million for the nine months ended September 30, 1998 from $3.3
million for the same period in 1997. This increase results primarily from an
increase in average debt balances between 1998 and 1997.
Other income, net decreased $240,000 or 27.1% to $647,000 for the nine
months ended September 30, 1998 from $887,000 for the same period in 1997. The
decrease is primarily attributable to the decreased interest income associated
with the cancellation of a $10.5 million mortgage note receivable in February
1998, offset by an increase in interest income earned on an $8.0 million
mortgage note receivable issued in April 1998.
Equity in net income of unconsolidated entities increased $425,000 or 16.7%
to $3.0 million for the nine months ended September 30, 1998 from $2.5 million
for the same period in 1997. This increase results primarily from an increase
in net gains on land sales at Development Company.
Minority interest in net income of consolidated subsidiary for the nine
months ended September 30, 1998 of $146,000 represents a third party investors'
share of the net income of a limited partnership which owns and operates a
shopping center located in Milwaukee, Wisconsin. There was no such minority
interest in 1997.
Net gain on real estate sales for the nine months ended September 30, 1998
of $379,000 represents a gain on the sale of two parcels of land, one located in
Hickory, North Carolina and the other in Lexington, Virginia. Net loss on real
estate sales for the nine months ended September 30, 1997 of $352,000 represents
a loss on the sale of two parcels of land in Wilmington, North Carolina.
Extraordinary items for the nine months ended September 30, 1997 of $5.9
million represent charges to earnings of unamortized deferred financing costs
and prepayment penalties associated with the prepayment of the Term Debt and the
termination of a secured line of credit in May 1997. There were no
extraordinary items for the nine months ended September 30, 1998.
Funds From Operations
Funds from operations ("FFO") is defined by the National Association of
Real Estate Investment Trusts, Inc. to mean net income attributable to common
shareholders, computed in accordance with generally accepted accounting
principles ("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. 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, investing
activities and financing activities, it provides investors with an indication of
the ability of the Company to make capital expenditures and to fund other cash
needs. The Company's
11
<PAGE>
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 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:
<TABLE>
<CAPTION>
(Dollars in thousands) Three Months Ended September 30,
1998 1997
-------- ---------
<S> <C> <C>
Net income attributable to common shareholders $ 10,386 $ 1,539
Depreciation of real estate assets 4,000 2,404
Amortization of tenant allowances and tenant improvements 45 38
Amortization of deferred leasing commissions 55 81
Net (gain) loss on real estate sales (294) 352
Extraordinary items - 5,539
Adjustments related to activities in unconsolidated entities 166 (396)
-------- --------
FFO $ 14,358 $ 9,557
======== ========
<CAPTION>
Nine Months Ended September 30,
1998 1997
-------- --------
<S> <C> <C>
Net income attributable to common shareholders $ 29,551 $ 13,367
Depreciation of real estate assets 11,177 6,661
Amortization of tenant allowances and tenant improvements 129 106
Amortization of deferred leasing commissions 164 217
Net (gain) loss on real estate sales (379) 352
Extraordinary items - 5,940
Adjustments related to activities in unconsolidated entities 500 30
-------- --------
FFO $ 41,142 $ 26,673
======== ========
</TABLE>
Leasing and Property Information
As of September 30, 1998, Wal-Mart, Lowe's and Kroger represented 15.7%,
12.0% and 4.7%, respectively, of the combined annualized base rent of the
Company, Development Company and affiliated entities (collectively, "Combined
Annualized Base Rent"). In addition, at that date, anchor tenants represented
67.6% of Combined Annualized Base Rent and national and regional tenants
represented 85.5% of Combined Annualized Base Rent. As of September 30, 1998,
properties owned and operated by the Company, Development Company and affiliated
entities were 97.0% leased.
On a same property basis, net operating income increased 0.7% between the
nine months ended September 30, 1998 and the same period in 1997. Net operating
income represents property revenues less property expenses excluding interest
expense, depreciation and amortization.
As of September 30, 1998, the Company, Development Company and an
affiliated entity operated in 13 states, and 40.5%, 17.5%, 9.2% and 7.9% of
Combined Annualized Base Rent was represented by shopping center properties
located in Georgia, North Carolina, Tennessee and Wisconsin, respectively.
12
<PAGE>
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 and value-oriented retailers; the federal, state and local
regulatory environment; availability of debt and equity capital with favorable
terms and conditions including, without limitation, the availability of bank
credit facilities to fund development, redevelopment and acquisition activities;
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.
LIQUIDITY AND CAPITAL RESOURCES
Historically, the Company's primary sources of funds have been cash
provided by operating activities and proceeds from lines of credit, debt
offerings and equity offerings. The Company's primary uses of funds have been
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
has used cash provided by operating activities to fund its distributions to
shareholders, capital improvements to existing properties and scheduled debt
amortization. The Company has used proceeds from its lines of credit to finance
its development, redevelopment and acquisition activities. The Company has used
proceeds from debt and equity offerings to repay outstanding indebtedness and to
fund its ongoing development, redevelopment and acquisition activities.
During the first nine months of 1998, the Company acquired ten shopping
center properties from five third-party sellers, for aggregate consideration of
$111.9 million. The Company funded these acquisitions with advances under its
unsecured line of credit (the "Unsecured Line of Credit") in the aggregate
amount of approximately $93.0 million, assumption of indebtedness of $5.4
million, issuance of limited partnership units valued at $3.0 million in a
limited partnership formed to own and operate one of the shopping center
properties and cancellation of a $10.5 million mortgage loan receivable from the
seller of one of the shopping center properties. Subsequent to quarter end, on
October 7, 1998, the Company acquired all of the limited liability company
membership interests in an entity which owns a 244,631 square foot shopping
center in Denver, Colorado for approximately $12.8 million. The property is
subject to a $25.4 million mortgage loan under which the limited liability
company is the obligor and the Company is the guarantor. In addition, during
the nine months ended September 30, 1998, the Company funded $113.6 million in
development costs and advanced $50.7 million to Development Company to fund its
development and redevelopment activities.
As a result of this acquisition and development activity, the Company has
completed six public capital markets transactions to date in 1998. In February
and March 1998, the Company issued an aggregate of 2,076,754 shares of its
common stock in three public offerings, which netted proceeds to the Company of
approximately $66.5 million. On March 31, 1998, the Company issued $75.0
million of 6.918% MandatOry Par Put Remarketed Securities(SM) (the "MOPPRS").
In connection with this issuance, Merrill Lynch, Pierce, Fenner & Smith
Incorporated ("Merrill Lynch") purchased an option to remarket
13
<PAGE>
the MOPPRS on March 31, 2003. The Company's effective borrowing rate on the
MOPPRS is 6.52% as of September 30, 1998. On September 17, 1998, the Company
issued 2,000,000 shares of 9 3/8% Series A Cumulative Preferred Stock (the
"Series A Preferred Stock") which netted proceeds to the Company of
approximately $48.3 million. On October 19, 1998, the Company issued 977,500
shares of its common stock, which netted proceeds to the Company of
approximately $19.0 million (the "October 1998 Offering"). The net proceeds from
each of these offerings were used to reduce amounts outstanding under the
Unsecured Line of Credit.
In addition, in February 1998, the Company entered into a Distribution
Agreement with a group of agents led by Merrill Lynch relating to the proposed
issue and sale from time to time of up to $505.5 million of the Company's
Medium-Term Notes Due Nine Months or More From the Date of Issue (the "Medium-
Term Notes Program"). The aggregate offering under the Medium-Term Notes
Program is subject to reduction as a result of the sale by the Company of other
securities described in its Prospectus dated October 30, 1997. The Medium-Term
Notes Program provides an additional facility for funding the Company's
acquisition and development activities. The MOPPRS were issued under the Medium-
Term Notes Program. As of September 30, 1998, the Company had $312.4 million
registered and available for issue under the Medium-Term Notes Program.
Following the October 1998 Offering, the Company had $293.2 million registered
and available for issue under the Medium-Term Notes Program.
The Company's total indebtedness as of September 30, 1998, consisted of the
following:
<TABLE>
<CAPTION>
Effective Percent
Principal Interest Maturity of Total
Balance Rate Date Indebtedness
-------------- -------- -------- ------------
(in thousands)
<S> <C> <C> <C> <C>
Fixed Rate
Seven Year Notes $ 74,793 7.10%(1) 01-Aug-04 20.9%
Ten Year Notes 84,764 7.23%(1) 01-Aug-07 23.6%
MandatOry Par Put Remarketed Securities (2) 75,000 6.52%(1) 31-Mar-03 20.9%
Mortgage note payable - Richmond, Kentucky 6,326 7.00%(3) 01-Dec-03 1.7%
Mortgage note payable - Jackson, Mississippi 7,057 9.25% 01-Mar-17 2.0%
Mortgage note payable - Milwaukee, Wisconsin 5,220 7.75% 01-Aug-09 1.5%
-------- ---- -----
253,160 7.04% 70.6%
Floating Rate
Unsecured Line of Credit 89,500 6.95%(4) 22-May-01 24.9%
Revolving Line of Credit 16,007 6.70%(4) 01-Sep-99 4.5%
-------- ---- -----
105,507 6.91% 29.4%
-------- ---- -----
$358,667 7.00% 100.0%
======== ==== =====
</TABLE>
(1) Represents stated rate plus amortization of deferred loan costs.
(2) Represents notes payable with a stated rate of 6.918% and a stated maturity
date of March 31, 2013. These notes are subject to mandatory tender on March
31, 2003.
(3) The interest rate on this note is adjusted on December 1 of each year.
(4) Stated rate of LIBOR plus 1.00% plus amortization of deferred loan costs.
As of September 30, 1998, the Company had $85.3 million available under the
Unsecured Line of Credit and $4.0 million available under the Revolving Line of
Credit.
In September 1998, the Company amended the Unsecured Line of Credit as
follows: (1) increased maximum borrowings allowed from $150,000,000 to
$174,750,000 (expandable to $200,000,000); (2) extended the maturity date by one
year from May 22, 2000 to May 22, 2001; and (3) reduced the borrowing rate from
LIBOR plus 1.25% to LIBOR plus 1.00%. In addition to amending the Unsecured
Line of Credit, the Company closed a $20.0 million Revolving Loan Credit
Agreement (the "Revolving Line of Credit") with Wachovia Bank, N. A. The
Revolving Line of Credit is unsecured, bears interest at LIBOR plus 1.00% and
matures in September 1999. The amendment to the Unsecured Line of Credit and
the Revolving Line of Credit provide the Company with additional capacity to
fund its development, redevelopment and acquisition activities.
In June 1998, the Division of Banking Supervision and Regulation of the
Board of Governors of the Federal Reserve System issued a supervisory letter
(the "Supervisory Letter") which addressed the
14
<PAGE>
subject of lending standards for business loans. The Supervisory Letter noted,
among other things, a significant increase in bank lending to REITs and
concluded that bank examiners should increase their understanding of REITs and
related lending and credit risks associated with lending to REITs. Management is
uncertain of the future effects of the Supervisory Letter on the Company.
However, any changes in bank lending practices as a result of the Supervisory
Letter may affect the Company's ability to fund its development, redevelopment
and acquisition activities with new secured or unsecured credit facilities from
commercial banks.
As of September 30, 1998, the Company, Development Company and affiliated
entities had 39 projects under construction which are expected to add
approximately 3.6 million square feet of gross leasable area which the Company
expects to own. The Company expects to place approximately 942,000 square feet
into operations during the remainder of 1998. Of these projects under
construction, 13 are located in Georgia, five each in North Carolina and
Tennessee, three in Florida, and two each in Mississippi, Pennsylvania and
Texas. Of the total square feet under construction, 73.9% is either leased or
committed to be leased by retailers. Additional funding needed to complete the
construction of these projects is estimated to be $165.0 million.
Management expects to fund the remaining costs of these projects and the
cost of any future projects undertaken by the Company, Development Company or
any affiliated joint ventures (including acquisitions) with additional advances
under the Unsecured Line of Credit and with proceeds from issuances under the
Medium-Term Notes Program, proceeds from public preferred or common stock
offerings, proceeds from issuances of additional debt securities, issuances of
limited partnership units in DownREIT structures, proceeds from the sale of one
or more of its existing shopping center properties or proceeds from mortgage
loans on new or existing shopping center properties. However, there can be no
assurance that these sources will be available and the inability to obtain this
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 its shareholders at least 95% of its taxable income. Management
believes that the Company will meet this requirement in 1998 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
1998.
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 distributions to shareholders, maintain and improve its
properties, make scheduled debt payments and obtain debt or equity financing for
its development, redevelopment and acquisition projects. With the exception of
a $7.1 million amortizing mortgage loan, all of the Company's debt requires
balloon payments in the future. The Revolving Line of Credit matures in 1999;
the Unsecured Line of Credit matures in 2001; the MOPPRS are subject to
mandatory tender in 2003; a note payable of $6.3 million matures in 2003; the
Seven Year Notes mature in 2004; the Ten Year Notes mature in 2007; and a note
payable of $5.2 million matures in 2009. Management intends to refinance or
repay these maturing debt instruments 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.
15
<PAGE>
YEAR 2000
As the year 2000 approaches, a critical business issue has emerged
regarding how existing application software programs and operating systems can
accommodate this date value. Many existing application software products in the
marketplace were designed to accommodate only two-digit date entries. Beginning
in the year 2000, these systems and products will need to be able to accept
four-digit entries to distinguish years beginning with 2000 from prior years. As
a result, computer systems and software used by many companies may need to be
upgraded to comply with such "Year 2000" requirements. Based on a recent
assessment, management believes that the arrival of the year 2000 and the
potential related computer problems should not have a material adverse impact on
the Company. The Company believes that its current software will be year 2000
compliant prior to January 1, 2000. The ability of third parties with whom the
Company transacts business to address adequately their Year 2000 issues is
outside of the Company's control. There can be no assurance that the failure of
the Company, or such third parties, to address adequately their respective Year
2000 issues will not have a material adverse effect on the Company's financial
condition or results of operations.
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 AND USE OF PROCEEDS
Not applicable.
ITEM 3. DEFAULTS UPON SENIOR SECURITIES
Not applicable.
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
Not applicable.
ITEM 5. OTHER INFORMATION
The deadline for shareholder proposals, other than proposals to be
included in the proxy statement, for the 1999 Annual Meeting of
Shareholders will be February 17, 1999, pursuant to Rule 14a-4 under
the Securities Exchange Act of 1934. The persons named as proxies in
the proxy statement may exercise discretionary authority to vote on
any proposals received after such date.
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(a) Exhibits
10.1 $200,000,000 Amended and Restated Credit Agreement dated as
of September 2, 1998 among JDN Realty Corporation, the
Banks Listed Herein and Wachovia Bank, N.A. as the Agent
12 Statement re: Computation of Ratio of Earnings to Fixed
Charges
27 Financial Data Schedule
(b) Reports on Form 8-K
During the three months ended September 30, 1998, the Company
filed the following reports on Form 8-K:
(i) Form 8-K dated September 18, 1998 containing Terms Agreement with
A.G. Edwards & Sons, Inc., J.C. Bradford & Co., LLC,
Interstate/Johnson Lane Corporation and Stifel, Nicolaus &
Company, Incorporated (collectively, the "Underwriters") relating
to the sale by the Company to the Underwriters of 2,000,000
shares of the Company's 9 3/8% Series A Cumulative Redeemable
Preferred Stock, par value $.01 per share, at a price of $25.00
per share.
17
<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.
October 28, 1998 /s/ J. Donald Nichols
- ---------------- ---------------------
(Date) J. Donald Nichols
Chief Executive Officer
October 28, 1998 /s/ William J. Kerley
- ---------------- ---------------------
(Date) William J. Kerley
Chief Financial Officer
18
<PAGE>
INDEX TO EXHIBITS
Exhibit
Number EXHIBIT
- ------ -------
10.1 $200,000,000 Amended and Restated Credit Agreement dated as of
September 2, 1998 among JDN Realty Corporation, the Banks Listed
Herein and Wachovia Bank, N.A. as the Agent
12 Statement re: Computation of Ratio of Earnings to Fixed Charges
27 Financial Data Schedule
19
<PAGE>
EXHIBIT 10.1
$200,000,000
AMENDED AND RESTATED CREDIT AGREEMENT
dated as of
September 2, 1998
among
JDN REALTY CORPORATION
The Banks Listed Herein
and
WACHOVIA BANK, 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........................ 21
SECTION 1.03. References................................................. 21
SECTION 1.04. Use of Defined Terms....................................... 21
SECTION 1.05. Terminology................................................ 21
ARTICLE II THE CREDITS.................................................. 22
SECTION 2.01. Commitments to Lend Syndicated Loans....................... 22
SECTION 2.02. Method of Borrowing Syndicated Loans....................... 22
SECTION 2.03. Money Market Loans........................................ 24
SECTION 2.04. Notes...................................................... 28
SECTION 2.05. Maturity of Loans.......................................... 29
SECTION 2.06. Interest Rates............................................. 30
SECTION 2.07. Fees....................................................... 32
SECTION 2.08. Optional Termination or Reduction of Commitments........... 33
SECTION 2.09. Mandatory Reduction and Termination of
Commitments............................................... 33
SECTION 2.10. Optional Prepayments....................................... 33
SECTION 2.11. Mandatory Prepayments...................................... 33
SECTION 2.12. General Provisions as to Payments.......................... 34
SECTION 2.13. Computation of Interest and Fees........................... 35
SECTION 2.14. Additional Banks and Commitments........................... 36
ARTICLE III CONDITIONS TO BORROWINGS.................................... 36
SECTION 3.01. Conditions to First Borrowing.............................. 36
(i)
<PAGE>
SECTION 3.02. Conditions to All Borrowings............................... 38
ARTICLE IV REPRESENTATIONS AND WARRANTIES............................... 39
SECTION 4.01. Corporate Existence and Power.............................. 39
SECTION 4.02. Corporate and Governmental Authorization; No
Contravention............................................ 39
SECTION 4.03. Binding Effect............................................. 39
SECTION 4.04. Financial Information...................................... 40
SECTION 4.05. No Litigation.............................................. 40
SECTION 4.06. Compliance with ERISA...................................... 40
SECTION 4.07. Compliance with Laws; Payment of Taxes..................... 40
SECTION 4.08. Guarantors and Subsidiaries................................ 41
SECTION 4.09. Investment Company Act..................................... 41
SECTION 4.10. Public Utility Holding Company Act......................... 41
SECTION 4.11. Ownership of Property...................................... 41
SECTION 4.12. No Default................................................. 41
SECTION 4.13. Full Disclosure............................................ 41
SECTION 4.14. Environmental Matters...................................... 42
SECTION 4.15. Capital Stock.............................................. 42
SECTION 4.16. Margin Stock............................................... 43
SECTION 4.17. Insolvency................................................. 43
SECTION 4.18. Insurance.................................................. 43
SECTION 4.19. Real Estate Investment Trust.............................. 43
SECTION 4.20. Y2K Plan................................................... 44
ARTICLE V COVENANTS.................................................... 44
SECTION 5.01. Information................................................ 44
(ii)
<PAGE>
SECTION 5.02. Inspection of Property, Books and Records.................. 46
SECTION 5.03. Maintenance of Existence................................... 46
SECTION 5.04. Dissolution................................................ 46
SECTION 5.05. Consolidations, Mergers and Sales of Assets................ 47
SECTION 5.06. Use of Proceeds............................................ 48
SECTION 5.07. Compliance with Laws; Payment of Taxes..................... 48
SECTION 5.08. Insurance.................................................. 48
SECTION 5.09. Change in Fiscal Year...................................... 49
SECTION 5.10. Maintenance of Property.................................... 49
SECTION 5.11. Environmental Notices...................................... 49
SECTION 5.12. Environmental Matters...................................... 49
SECTION 5.13. Environmental Release...................................... 49
SECTION 5.14. Transactions with Affiliates............................... 49
SECTION 5.15. Restricted Payments........................................ 49
SECTION 5.16. Loans or Advances.......................................... 50
SECTION 5.17. Investments................................................ 50
SECTION 5.18. [Intentionally Deleted].................................... 51
SECTION 5.19. Restrictions on Ability of Guarantors to Pay
Dividends................................................. 51
SECTION 5.20. Ratio of Total Consolidated Liabilities to Gross
Asset Value............................................... 51
SECTION 5.21. Ratio of Total Secured Debt to Gross Asset
Value..................................................... 51
SECTION 5.22. Ratio of EBITDA to Consolidated Interest
Expense................................................... 51
SECTION 5.23. Ratio of Unencumbered Assets to Unsecured
Funded Debt............................................... 52
SECTION 5.24. Ratio of Unsecured Net Operating Income to
Unsecured Interest Expense................................ 52
(iii)
<PAGE>
SECTION 5.25. Guarantees................................................. 52
SECTION 5.26. Additional Revolving Credit................................ 52
SECTION 5.27. Ownership.................................................. 52
SECTION 5.28. Status as a REIT........................................... 52
SECTION 5.29. Guaranty by the Initial Guarantor; New Subsidiaries
to Become Guarantors...................................... 52
ARTICLE VI DEFAULTS..................................................... 53
SECTION 6.01. Events of Default.......................................... 53
SECTION 6.02. Notice of Default.......................................... 56
ARTICLE VII THE AGENT................................................... 57
SECTION 7.01. Appointment; Powers and Immunities......................... 57
SECTION 7.02. Reliance by Agent.......................................... 57
SECTION 7.03. Defaults................................................... 58
SECTION 7.04. Rights of Agent and its Affiliates as a Bank............... 58
SECTION 7.05. Indemnification............................................ 59
SECTION 7.06 Consequential Damages...................................... 59
SECTION 7.07. Payee of Note Treated as Owner............................. 59
SECTION 7.08. Nonreliance on Agent and Other Banks....................... 59
SECTION 7.09. Failure to Act............................................. 60
SECTION 7.10. Resignation or Removal of Agent............................ 60
ARTICLE VIII CHANGE IN CIRCUMSTANCES; COMPENSATION...................... 61
SECTION 8.01. Basis for Determining Interest Rate Inadequate or
Unfair.................................................... 61
SECTION 8.02. Illegality................................................. 61
SECTION 8.03. Increased Cost and Reduced Return.......................... 62
(iv)
<PAGE>
SECTION 8.04. Base Rate Loans Substituted for Euro-Dollar
Loans..................................................... 63
SECTION 8.05. Compensation............................................... 63
ARTICLE IX MISCELLANEOUS................................................ 64
SECTION 9.01. Notices.................................................... 64
SECTION 9.02. No Waivers................................................. 65
SECTION 9.03. Expenses; Documentary Taxes................................ 65
SECTION 9.04. Indemnification............................................ 65
SECTION 9.05. Setoff; Sharing of Setoffs................................. 66
SECTION 9.06. Amendments and Waivers..................................... 67
SECTION 9.07. No Margin Stock Collateral................................. 68
SECTION 9.08. Successors and Assigns..................................... 68
SECTION 9.09. Confidentiality............................................ 72
SECTION 9.10. Representation by Banks.................................... 72
SECTION 9.11. Obligations Several........................................ 72
SECTION 9.12. Georgia Law................................................ 73
SECTION 9.13. Severability............................................... 73
SECTION 9.14. Interest................................................... 73
SECTION 9.15. Interpretation............................................. 74
SECTION 9.16. Waiver of Jury Trial; Consent to Jurisdiction.............. 74
SECTION 9.17. Counterparts............................................... 74
SECTION 9.18. Source of Funds -- ERISA................................... 75
SECTION 9.19. No Bankruptcy Proceedings.................................. 75
EXHIBIT A-1 Form of Syndicated Loan Note
EXHIBIT A-2 Form of Money Market Loan Note
EXHIBIT B Form of Opinion of Counsel for the Borrower and Initial Guarantor
(v)
<PAGE>
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
EXHIBIT L Form of Contribution Agreement
EXHIBIT M Form of Money Market Quote Request
EXHIBIT N Form of Money Market Quote
EXHIBIT O Form of Designation Agreement
Schedule 4.08 Subsidiaries
Schedule 4.14 Environmental Matters
Schedule 5.17 Existing Investments
Schedule 5.25 Existing Guarantees
(vi)
<PAGE>
AMENDED AND RESTATED CREDIT AGREEMENT
AMENDED AND RESTATED CREDIT AGREEMENT dated as of September 2, 1998
among JDN Realty Corporation, the BANKS listed on the signature pages hereof and
WACHOVIA BANK, N.A. (as successor in interest to Wachovia of Georgia, N.A.), as
Agent.
WHEREAS, the Borrower, the Banks and the Agent are party to that
certain Credit Agreement by and between the Borrower, the Banks and the Agent
dated as of May 23, 1997 (the "Existing Credit Agreement") and desire to provide
for Money Market Loans, substitute a New Bank (as defined herein) for Mellon
Bank, N.A., and increase the Commitments to an aggregate total of $200,000,000.
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 2.06(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, 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.
<PAGE>
"Agent's Letter Agreement" means that certain letter agreement, dated
as of March 13, 1997, as amended by the letter agreement dated June 10, 1998,
between the Borrower and the Agent relating to the structure of the Loans, and
certain 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 2.06(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.
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"Authority" has the meaning set forth in Section 8.02.
"Bank" means each bank listed on the signature pages hereof as having
a Commitment, and its successors and assigns, and the Designated Banks, if any;
provided, however, that the term "Bank" shall exclude each Designated Bank when
- -------- -------
used in reference to a Syndicated Loan, the Commitments or terms relating to the
Syndicated Loans and the Commitments.
"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.
"Borrower" means JDN Realty Corporation, a Maryland
<PAGE>
corporation, and its successors and its permitted assigns.
"Borrowing" means a borrowing hereunder consisting of Loans made to
the Borrower (i) at the same time by all of the Banks in the case of a
Syndicated Borrowing, which may be a Base Rate Borrowing or a Euro-Dollar
Borrowing or (ii) Money Market Loans made to the Borrower by one or more of the
Banks, in each case pursuant to Article II. A Borrowing is a "Money Market
Borrowing" if such Loans are made pursuant to Section 2.03 or a "Syndicated
Borrowing" if such Loans are made pursuant to Section 2.01.
"Borrowing Base" means the sum (without duplication with respect to
any Property) 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 owned by the Borrower or any Guarantor for
at least one Fiscal Quarter; plus
(ii) an amount equal to the product of (x) the book value of each
Eligible Unencumbered Stabilized Property owned by the Borrower or any
Guarantor for less than a Fiscal Quarter, times (y) 0.60 (which is the
advance rate); plus
(iii) 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.
"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
<PAGE>
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.
"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 September 2, 1998.
"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 2.08 and 2.09.
"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 and its Consolidated Subsidiaries
and 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 its Consolidated Subsidiaries 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
<PAGE>
Net Income of the Borrower and its Consolidated Subsidiaries and the Guarantors
determined on a consolidated basis, but excluding (i) extraordinary items and
(ii) any equity interests of the Borrower 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 Subsidiary" means at any date any Subsidiary or other
entity the accounts of which, in accordance with GAAP, would be consolidated
with those of the Borrower in its consolidated financial statements as of such
date.
"Construction in Progress" means, for any retail Property, calculated
on a consolidated basis for the Borrower and the Guarantors, the sum of (x)
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, plus (y)
the book value, calculated in accordance with GAAP, of any Property that (i)
previously constituted construction-in-progress and (ii) has not yet become a
Stabilized Property.
"Contribution Agreement" means the Contribution Agreement of even date
herewith in substantially the form of Exhibit L to be executed by the Borrower
---------
and by the Initial Guarantor on the Closing Date and by 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.
"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
<PAGE>
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).
"Designated Bank" means a special purpose corporation sponsored by its
Designating Bank that is identified as such on the signature pages hereto next
to the caption "Designated Bank" as well as each special purpose corporation
sponsored by its Designating Bank that (i) shall have become a party to this
Agreement pursuant to Section 9.08(g), and (ii) is not otherwise a Bank.
"Designated Bank Note" means a Money Market Loan Note, evidencing the
obligation of the Borrower to repay Money Market Loans made by a Designated
Bank, and "Designated Bank Notes" means any and all such Money Market Loan Notes
to Designated Banks issued hereunder.
"Designating Bank" shall mean each Bank that is
<PAGE>
identified as such on the signature pages hereto next to the caption
"Designating Bank" and immediately above the signature of its Designated Bank as
well as each Bank that shall designate a Designated Bank pursuant to Section
9.08(g).
"Designation Agreement" means a designation agreement in substantially
the form of Exhibit O, entered into by a Bank and a Designated Bank and
---------
acknowledged by the Borrower and the Agent.
"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,
<PAGE>
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 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
<PAGE>
Day on which dealings in Dollar deposits are carried out in the London interbank
market.
"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
2.06(c).
"Event of Default" has the meaning set forth in Section 6.01.
"Existing Credit Agreement" has the meaning set forth in the Recitals
hereof.
"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.
"Fixed Rate Borrowing" means a Euro-Dollar Borrowing or a Money Market
Borrowing, or any or all of them, as the context requires.
"Fixed Rate Loan" means any Euro-Dollar Loan or Money Market Loan, or
any or all of them as the context requires.
"Funds From Operations" means net income or loss computed in
accordance with GAAP, excluding gains (or losses)
<PAGE>
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 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 (without duplication with respect to any
Property):
(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 owned by the Borrower or any Guarantor for at least one
Fiscal Quarter; plus
(ii) an amount equal to the book value as of the last day of the month
just ended prior to the date of determination of Property owned by the
Borrower or any Guarantor for less than a Fiscal Quarter; plus
(iii) the book value of Construction in Progress on the last day of
the Fiscal Quarter just ended.
"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 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 the Initial Guarantor and any
<PAGE>
Significant Subsidiary which becomes a Guarantor pursuant to Section
5.29(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 the Initial Guarantor on the Closing Date and by
- ---------
each of the other Guarantors as required by and 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.
"Initial Guarantor" means JDN DCI.
"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 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
<PAGE>
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.
(3) with respect to each Money Market Borrowing, the period commencing on the
date of such Borrowing and ending on the Stated Maturity Date or such other
date or dates as may be specified in the applicable Money Market Quote;
provided that:
(a) any Interest Period (subject to clause (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 may be selected which would end after the
Termination Date.
"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 DCI" means JDN Development Company, Inc., a Delaware corporation.
"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.
<PAGE>
"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.
"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.
"Liquidity Bank" means for any Designated Bank, at any date of
determination, the collective reference to the financial institutions which at
such date are providing liquidity or credit support facilities to or for the
account of such Designated Bank to fund such Designated Bank's obligations
hereunder or to support the securities, if any, issued by such Designated Bank
to fund such obligations.
"Loan" means a Base Rate Loan, a Money Market Loan or a Euro-Dollar
Loan, and "Loans" means Base Rate Loans, Money Market 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.
"London Interbank Offered Rate" has the meaning set forth in Section
2.06(c).
"Margin Stock" means "margin stock" as defined in Regulations 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
<PAGE>
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 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.
"Money Market Borrowing" means a Borrowing consisting of Money Market
Loans.
"Money Market Borrowing Date" has the meaning specified in Section
2.03(b)(i).
"Money Market Facility Limit" means 50% of the total Commitments in
effect from time to time hereunder.
"Money Market Loan" means a Loan made by a Bank pursuant to Section
2.03 which bears interest at the Money Market Rate.
"Money Market Loan Notes" means the promissory notes of the Borrower,
substantially in the form of Exhibit A-2, including any Designated Bank Notes,
evidencing the obligation of the Borrower to repay the Money Market Loans,
together with all amendments, consolidations, modifications, renewals and
supplements thereto.
"Money Market Quote" has the meaning specified in Section 2.03.
"Money Market Quote Request" has the meaning specified in Section
2.03(b).
"Money Market Rate" has the meaning specified in Section
2.03(c)(ii)(C).
"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
<PAGE>
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, 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.
"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 each of the Syndicated Loan Notes or the Money Market
Loan Notes, or any or all of them as the context shall require.
"Notice of Borrowing" has the meaning set forth in Section 2.02.
"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 2.06(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
<PAGE>
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.
"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 Syndicated Loan made on the day on which
an outstanding Syndicated 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 Syndicated
Loan or Syndicated 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 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.
<PAGE>
"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.
"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.
"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 (i) Syndicated Loans and (ii) Money Market 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).
"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.
"Stated Maturity Date" means, with respect to any Money
<PAGE>
Market Loan, the Stated Maturity Date therefor specified by the Bank in the
applicable Money Market Quote.
"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 any JDN Venture.
"Syndicated Loans" means Base Rate Loans or Euro-Dollar Loans made
pursuant to the terms and conditions set forth in Section 2.01.
"Syndicated Loan Notes" means the promissory notes of the Borrower
substantially in the form of Exhibit A-1 evidencing the Obligation of the
Borrower to repay Syndicated Loans, together with all amendments,
consolidations, modifications, renewals and supplements thereto.
"Taxes" has the meaning set forth in Section 2.12(c).
"Termination Date" means whichever is applicable of (i) May 22, 2001,
(ii) such later date to which it is extended by the Banks pursuant to Section
2.05(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 2.08.
"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 respect thereto: (i) all indebtedness for borrowed money; (ii)
<PAGE>
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 (without duplication
with respect to any Property) of the following:
(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 Fiscal Quarter just ended prior to the date of
determination, from each Property not subject to a Mortgage and owned by
the Borrower or any Guarantor for at least one Fiscal Quarter; plus
(ii) an amount equal to the book value of each Property not subject to
a Mortgage and owned by the Borrower or any Guarantor for less than a
Fiscal Quarter; plus
(iii) an amount equal to the book value of Construction in Progress on
all Properties 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)
<PAGE>
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.
"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 Syndicated Loans (but not its Money Market 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, 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.
"Y2K Plan" has the meaning set forth in Section 4.20.
"Year 2000 Compliant and Ready" means that (a) the Borrower's and its
Subsidiaries hardware and software systems with respect to the operation of its
business and its general business plan will: (i) handle date information
involving any and all dates before, during and/or after January 1, 2000,
including accepting input, providing output and performing date calculations in
whole or in part; (ii) operate, accurately without interruption on and in
respect of any and all dates before, during and/or after January 1, 2000 and
without any change in performance; (iii) store and provide date input
information without creating any ambiguity as to the century and; (b) the
Borrower has developed alternative plans to ensure business continuity in the
event of the failure of any or all of items (i) through (iii) in clause (a)
above in this definition.
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,
<PAGE>
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).
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 Syndicated Loans. Each Bank
------------------------------------
severally agrees, on the terms and conditions set forth herein, to make
Syndicated Loans to the Borrower from time to time before the Termination Date;
provided that,
- --------
(i) immediately after each such Syndicated Loan is
<PAGE>
made, the aggregate outstanding principal amount of Syndicated Loans by
such Bank shall not exceed the amount of its Commitment, and
(ii) the aggregate outstanding amount of all Syndicated Loans and
Money Market Loans shall not exceed the lesser of (A) the aggregate amount
of the Commitments and (B) the Borrowing Base.
Each Syndicated 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 Section 2.09, prepay Loans and reborrow under this Section
at any time before the Termination Date.
SECTION 2.02. Method of Borrowing Syndicated Loans. For all Loans
------------------------------------
other than Money Market 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 Syndicated 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 Syndicated Borrowing,
(iii) whether the Syndicated 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 Syndicated Borrowing and such Notice of Borrowing, once received by the
Agent, shall not
<PAGE>
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 Syndicated Borrowing, each Bank shall (except as
provided in paragraph (d) of this Section) make available its ratable share of
such Syndicated 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 Syndicated Borrowing with respect to Base Rate
Borrowings Domestic Business Day before the date of a Syndicated Borrowing with
respect to Euro-Dollar Borrowing stating that such Bank will not make a
Syndicated Loan in connection with such Syndicated Borrowing, the Agent shall be
entitled to assume that such Bank will make a Syndicated Loan in connection with
such Syndicated 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
Syndicated 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 Syndicated 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 Syndicated
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 Syndicated Borrowing, together with interest pursuant to
the foregoing, it will have no interest in or rights with respect to such
Syndicated 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 Syndicated Loan hereunder on a day on
which the Borrower is to repay all or any part of an
<PAGE>
outstanding Syndicated Loan from such Bank, such Bank shall apply the proceeds
of its new Syndicated 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 2.12, 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 Syndicated Loans comprising such Syndicated Borrowing are to be Base Rate
Loans or Euro-Dollar Loans, such Syndicated Loans shall be made as Base Rate
Loans. If the Borrower is otherwise entitled under this Agreement to repay any
Syndicated 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
Syndicated Loans using its own moneys and fails to give a Notice of Borrowing in
connection with such new Syndicated Borrowing, a new Syndicated Borrowing shall
be deemed to be made on the date such Syndicated Loans mature in an amount equal
to the principal amount of the Syndicated Loans so maturing, and the Syndicated
Loans comprising such new Syndicated Borrowing shall be Base Rate Loans.
(g) Notwithstanding anything to the contrary contained herein, there
shall not be more than 6 Borrowings outstanding at any given time.
SECTION 2.03. Money Market Loans. (a) In addition to making Syndicated
------------------
Borrowings, the Borrower may, as set forth in this Section 2.03, request the
Banks to make offers to make Money Market Borrowings available to the Borrower.
The Banks may, but shall have no obligation to, make such offers and the
Borrower may, but shall have no obligation to, accept any such offers in the
manner set forth in this Section 2.03, provided that:
(i) the number of interest rates applicable to Money Market Loans
which may be outstanding at any given time is subject to the provisions of
Section 2.02(g);
(ii) the aggregate principal amount of all Money Market Loans, (A) do
not exceed the Money Market Facility Limit, and (B) together with the
aggregate principal amount
<PAGE>
of all Syndicated Loans, at any one time outstanding shall not exceed the
aggregate amount of the Commitments of all of the Banks at such time; and
(iii) the Money Market Loans of any Bank will be deemed to be usage
of the Commitments for the purpose of calculating availability pursuant to
Sections 2.01(ii) and 2.03(a)(ii), but will not reduce such Bank's
obligation to lend its pro rata share of its remaining Unused Commitment.
(b) When the Borrower wishes to request offers to make Money Market
Loans, it shall give the Agent (which shall promptly notify the Banks) notice
substantially in the form of Exhibit M hereto (a "Money Market Quote Request")
---------
so as to be received no later than 10:00 A.M. (Atlanta, Georgia time) at least 2
Domestic Business Days prior to the date of the Money Market Borrowing proposed
therein (or such other time and date as the Borrower and the Agent, with the
consent of the Required Banks, may agree), specifying:
(i) the proposed date of such Money Market Borrowing, which shall be
a Euro-Dollar Business Day (the "Money Market Borrowing Date");
(ii) the maturity date (or dates) (each a "Stated Maturity Date") for
repayment of each Money Market Loan to be made as part of such Money Market
Borrowing (which Stated Maturity Date shall be that date occurring not less
than 7 days but not more than 180 days from the date of such Money Market
Borrowing), provided that the Stated Maturity Date for any Money Market
Loan may not extend beyond the Termination Date (as in effect on the date
of such Money Market Quote Request); and
(iii) the aggregate amount of principal to be requested by the
Borrower as a result of such Money Market Borrowing, which shall be at
least $5,000,000 (and in larger integral multiples of $1,000,000) but shall
not cause the limits specified in Section 2.03(a) to be violated.
The Borrower may request offers to make Money Market Loans having up to 2
different Stated Maturity Dates in a single Money Market Quote Request; provided
that the request for each separate Stated Maturity Date shall be deemed to be a
separate Money Market Quote Request for a separate Money Market Borrowing.
Except as otherwise provided in the immediately preceding sentence, after the
first Money Market Quote Request has been given hereunder, no Money Market Quote
Request shall be given until at least 5 Domestic Business Days after all prior
Money Market Quote Requests have been fully processed by the Agent, the Banks
and
<PAGE>
the Borrower pursuant to this Section 2.03.
(c) (i) Each Bank may, but shall have no obligation to, submit a
response containing an offer to make a Money Market Loan substantially in
the form of Exhibit N hereto (a "Money Market Quote") in response to any
---------
Money Market Quote Request; provided that, if the Borrower's request under
Section 2.03(b) specified more than 1 Stated Maturity Date, and Bank may,
but shall have no obligation to, make a single submission containing a
separate offer for each such Stated Maturity Date and each such separate
offer shall be deemed to be a separate Money Market Quote. Each Money
Market Quote must be submitted to the Agent not later than 10:00 A.M.
(Atlanta, Georgia time) on the Money Market Borrowing Date; provided that
any Money Market Quote submitted by Wachovia may be submitted, and may only
be submitted, if Wachovia notifies the Borrower of the terms of the offer
contained therein not later than 9:45 A.M. (Atlanta, Georgia time) on the
Money Market Borrowing Date (or 15 minutes prior to the time that the other
Banks are required to have submitted their respective Money Market Quotes).
Subject to Section 6.01, any Money Market Quote so made shall be
irrevocable except with the written consent of the Agent given on the
instructions of the Borrower.
(ii) Each Money Market Quote shall specify:
(A) the proposed Money Market Borrowing Date and the Stated
Maturity Date therefor;
(B) the principal amounts of the Money Market Loan which the
quoting Bank is willing to make for the applicable Money Market Quote,
which principal amounts (x) may be greater than or less than the
Commitment of the quoting Bank, (y) shall be at least $5,000,000 or a
larger integral multiple of $1,000,000, and (z) may not exceed the
principal amount of the Money Market Borrowing for which offers were
requested;
(C) the rate of interest per annum rounded upwards, if necessary,
to the nearest 1/100th of 1%) offered for each such Money Market Loan
(such amounts being hereinafter referred to as the "Money Market
Rate"); and
(D) the identity of the quoting Bank.
Unless otherwise agreed by the Agent and the Borrower, no Money Market
Quote shall contain qualifying, conditional or similar language or propose
terms other than or in addition
<PAGE>
to those set forth in the applicable Money Market Quote Request (other than
setting forth the principal amounts of the Money Market Loan which the
quoting Bank is willing to make for the applicable Interest Period) and, in
particular, no Money Market Quote may be conditioned upon acceptance by the
Borrower of all (or some specified minimum) of the principal amount of the
Money Market Loan for which such Money Market Quote is being made.
(d) The Agent shall as promptly as practicable after the Money Market
Quote is submitted (but in any event not later than 10:30 A.M. (Atlanta, Georgia
time)) on the Money Market Borrowing Date, notify the Borrower of the terms (i)
of any Money Market Quote submitted by a Bank that is in accordance with Section
2.03(c) and (ii) of any Money Market Quote that amends, modifies or is otherwise
inconsistent with a previous Money Market Quote submitted by such Bank with
respect to the same Money Market Quote Request. Any such subsequent Money
Market Quote shall be disregarded by the Agent unless such subsequent Money
Market Quote is submitted solely to correct a manifest error in such former
Money Market Quote. The Agent's notice to the Borrower shall specify (A) the
principal amounts of the Money Market Borrowing for which offers have been
received and (B) the respective principal amounts and Money Market Rates so
offered by each Bank (identifying the Bank that made each Money Market Quote).
(e) Not later than 11:00 A.M. (Atlanta, Georgia time) on the Money
Market Borrowing Date, the Borrower shall notify the Agent of its acceptance or
nonacceptance of the offers so notified to it pursuant to Section 2.03(d) and
the Agent shall promptly notify each Bank which submitted an offer. In the case
of acceptance, such notice shall specify the aggregate principal amount of
offers (for each Stated Maturity Date) that are accepted. The Borrower may
accept any Money Market Quote in whole or in part; provided that:
(i) the aggregate principal amount of each Money Market Borrowing may
not exceed the applicable amount set forth in the related Money Market
Quote Request;
(ii) the aggregate principal amount of each Money Market Loan
comprising a Money Market Borrowing shall be at least $5,000,000 (and in
larger integral multiples of $1,000,000) but shall not cause the limits
specified in Section 2.03(a) to be violated;
(iii) acceptance of offers may only be made in ascending order of
Money Market Rates; and
<PAGE>
(iv) the Borrower may not accept any offer where the Agent has
advised the Borrower that such offer fails to comply with Section
2.03(c)(ii) or otherwise fails to comply with the requirements of this
Agreement (including without limitation, Section 2.03(a)).
If offers are made by 2 or more Banks with the same Money Market Rates for a
greater aggregate principal amount than the amount in respect of which offers
are accepted for the related Stated Maturity Date, the principal amount of Money
Market Loans in respect of which such offers are accepted shall be allocated by
the Borrower among such Banks as nearly as possible in proportion to the
aggregate principal amount of such offers. Determinations by the Borrower of
the amounts of Money Market Loans shall be conclusive in the absence of manifest
error.
(f) Any Bank whose offer to make any Money Market Loan has been
accepted shall, not later than 12:00 P.M. (Atlanta, Georgia time) on the Money
Market Borrowing Date, make the amount of such Money Market Loan allocated to it
available to the Agent at its address referred to in Section 9.01 in immediately
available funds. The amount so received by the Agent shall, subject to the
terms and conditions of this Agreement, be made available to the Borrower on
such date by depositing the same, in immediately available funds, not later than
4:00 P.M. (Atlanta, Georgia time), in an account of such Borrower maintained
with Wachovia.
(g) After any Money Market Loan has been funded, the Agent shall
notify the Banks of the aggregate principal amount of the Money Market Quotes
received and the highest and lowest rates included in such Money Market Quotes.
(h) For any Bank which is a Designating Bank, any Money Market Loan to
be made by such Bank may from time to time be made by its Designated Bank in
such Designated Bank's sole discretion, and nothing herein shall constitute a
commitment to make Money Market Loans by such Designated Bank; provided that if
any Designated Bank elects not to, or fails to, make any such Money Market Loan
pursuant to a Money Market Quote that has been accepted by the Borrower in
accordance with the foregoing, its Designating Bank hereby agrees that it shall
make such Money Market Loan pursuant to the terms hereof on the date such Money
Market Loan is otherwise required to be made to the Borrower hereunder.
SECTION 2.04. Notes. (a) The Syndicated Loans of each Bank shall be
-----
evidenced by a single Syndicated Loan 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
<PAGE>
Bank's Commitment. The Money Market Loans made by any Bank to the Borrower
shall be evidenced by a single Money Market Loan Note payable to the order of
such Bank for the account of its Lending Office in an amount equal to the Money
Market Facility Limit.
(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 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 2.05. 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 May 22, 2001, 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 an additional one-year period on
May 22, 1999 (the "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 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
<PAGE>
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. In
the event of an extension pursuant to the foregoing the Borrower shall pay to
the Agent, on the Extension Date 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 2.06. Interest Rates. (a) "Applicable Margin" means (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.
==========================================================================
| Level I | Level | Level | Level
| I | II | III | IV
==========================================================================
| equal to or | | | less than
Debt Rating | greater than BBB+ | BBB | BBB- | BBB-
| and/1/ | and/1/ | and/1/ | and/1/
| Baa1 | Baa2 | Baa3 | Baa3
--------------------------------------------------------------------------
Applicable | | | |
Margin | 0.75% | 0.85% | 1.00% | 1.35%
==========================================================================
In determining the amounts to be paid by the Borrower pursuant to Sections
2.06(b) and 2.06(c), the Borrower and the Banks shall refer to the Borrower's
Debt Rating from time to time. For purposes hereof, "Performance Pricing
Determination
- --------------
/1/ if applicable
<PAGE>
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.
(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
<PAGE>
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 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) Each Money Market Loan shall bear interest on the outstanding
principal amount thereof, for each day from the date such Money Market Loan is
made until it becomes due, at a rate per annum equal to the applicable Money
Market Rate set forth in the relevant Money Market Quote. Such interest shall
be payable on the Stated Maturity Date thereof, and, if the Stated Maturity Date
occurs more than 90 days after the date of the relevant Money Market Loan, at
intervals of 90 days after the first day thereof. Any overdue principal of and,
to the extent permitted by law, overdue interest on any Money Market Loan shall
bear interest, payable on demand, for each day until paid at a rate per annum
equal to the Default Rate.
(e) 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.
(f) 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 2.07. Fees. (a) The Borrower shall pay to the Agent, for the
----
ratable account of each Bank, a facility fee, calculated on the amount of such
Bank's Commitment (without
<PAGE>
taking into account the amount of outstanding Loans made by such Bank), at the
rate per annum of 0.15%. Such facility fee 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.
SECTION 2.08. 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 are terminated in
their entirety, all accrued fees (as provided under Section 2.07) shall be due
and payable on the effective date of such termination.
SECTION 2.09. 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 2.10. 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
2.10, 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.
<PAGE>
SECTION 2.11. Mandatory Prepayments. (a) On each date on which the
---------------------
Commitments are reduced pursuant to Section 2.08 or Section 2.09, 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 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;(ii) secondly, to
Euro-Dollar Loans; and lastly to Money Market Loans.
SECTION 2.12. 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 distribute to
each Bank its ratable share of each such payment received by the Agent for the
account of the Banks, such payment to be distributed by the Agent (x) by 2:00
P.M. on the date of receipt by the Agent, provided that such payment was
received by the Agent by 1:00 P.M. (Atlanta, Georgia time), and (y) by 2:00 P.M.
(Atlanta, Georgia time) on the date following the date of receipt by the Agent,
if such payment was received by the Agent after 1:00 P.M. (Atlanta, Georgia
time). If the Agent shall fail to make such distribution within the time
required by the immediately preceding sentence, such distribution shall be made
together with interest thereon, for each day during the period from the date
such distribution should have been so made until the date such distribution
actually is made, at a rate per annum equal to the Federal Funds Rate.
(b) Whenever any payment of principal of, or interest on, the Base
Rate Loans, Money Market 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
<PAGE>
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, 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
<PAGE>
paid by the Borrower pursuant to this Section 2.12(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 2.12(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.
SECTION 2.13. 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 and Money Market 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).
SECTION 2.14. Additional Banks and Commitments. Upon (i) the execution
--------------------------------
of a signature page to this Agreement by a new bank or financial institution (a
"New Bank") and acceptance thereof by the Agent,(ii) execution and delivery by
the Borrower of a Syndicated Loan Note and a Money Market Loan Note in favor of
the New Bank, and (iii) delivery of notice to the Banks by the Agent setting
forth the effective date of the addition of the New Bank hereunder and the
amount of such New Bank's Commitment, such New Bank shall be for all purposes a
Bank party to this Agreement to the same extent as if it were an original party
hereto with a Commitment as set forth on the signature page executed by the New
Bank; provided, however, (i) the total Commitments of all Banks shall not exceed
in the aggregate $200,000,000, (ii) New Banks may become Banks only if the
conditions of this Section 2.14 have been fulfilled prior to December 31, 1998,
and (iii) the Commitments and obligations of all Banks party hereto prior to the
addition of any New Bank shall not be affected by the addition of such New Bank.
<PAGE>
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 Syndicated Loan Note and a duly executed Money
Market Loan Note for the account of each Bank complying with the provisions
of Section 2.03 (including a Designated Bank Note in favor of Four Winds
Funding Corporation, as the Designated Bank of Commerzbank AG, Atlanta
Agency) and a Guaranty duly executed by the Initial Guarantor and a
Contribution Agreement duly executed by the Borrower and the Initial
Guarantor;
(c) an opinion letter of McCullough Sherrill, LLP, counsel for the
Borrower and the Initial Guarantor, 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, 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
<PAGE>
reasonably request relating to the existence of the Borrower and the
Initial Guarantor, the corporate authority for and the validity of this
Agreement, the Notes, the Guaranty 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 each of the
Borrower and the Initial Guarantor substantially in the form of Exhibit H
---------
(the "Officer's Certificate"), signed by the Secretary or an Assistant
Secretary of the Borrower and the Initial Guarantor, respectively, and as
to the names, true signatures and incumbency of the officer or officers of
the Borrower or Initial Guarantor authorized to execute and deliver the
Loan Documents, and certified copies of the following items for each of the
Borrower and Initial Guarantor (i) a certificate of the Secretary of State
of the State of its incorporation as to its good standing as a corporation
incorporated therein, and (ii) 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 or notification pursuant to Section 2.03(e)
of acceptance of one or more Money Market Quotes, as applicable;
(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 Credit Agreement
(and proceeds of Loans on the Closing Date may be used for such purpose);
(j) receipt by the Agent of all fees payable to the Agent on the
Closing Date pursuant to the Agent's Letter Agreement;
(k) receipt by the Agent, for the account of each Bank, of an
extension fee in an amount equal to 0.10% of the amount of the such Bank's
Commitment in effect under the Existing Credit Agreement on the day before
the Closing Date; and
(l) receipt by the Agent, for the account of each Bank, of an
origination fee in an aggregate amount equal to 0.15% of the amount by
which the amount of such Bank's Commitment in effect under this Agreement
on the Closing Date, after giving effect to this Agreement, exceeds the
amount of such Bank's Commitment in effect under the Existing Credit
Agreement on the day before the Closing
<PAGE>
Date.
In addition, if the Borrower desires funding of a Fixed Rate 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 Fixed Rate 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 Fixed Rate 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 or notification
pursuant to Section 2.03(e) of acceptance of one or more Money Market
Quotes, as applicable.
(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.
<PAGE>
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Each of the Borrower and (by incorporation by reference in the
Guaranty) the Guarantors, as expressly stated, represents and warrants that:
SECTION 4.01. Corporate Existence and Power. Each of the Borrower and
-----------------------------
the Guarantors 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 Guarantors party 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.
SECTION 4.04. Financial Information. (a) The consolidated balance
---------------------
sheet of the Borrower and JDN DCI as of December 31, 1997 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 and JDN DCI as of such
<PAGE>
date and their consolidated results of operations and cash flows for such
periods stated.
(b) Since December 31, 1997 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, any Guarantor or any Subsidiary 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 or any Guarantor to perform its obligations
under, this Agreement, the Notes, the Guaranty 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 each Guarantor and each Subsidiary is
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 each Guarantor and each Subsidiary 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 behalf of the Borrower and each Guarantor and each
Subsidiary have been paid. The charges, accruals and reserves on the books of
the Borrower and each Guarantor and each Subsidiary in respect of taxes or other
governmental charges are, in the opinion of the Borrower, adequate.
SECTION 4.08. Guarantors and Subsidiaries. Each of the Guarantors and
---------------------------
the 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
<PAGE>
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
----------------------
Guarantor or Subsidiary 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 Guarantor or Subsidiary is a "holding company", or a "subsidiary
company" of a "holding company", or an "affiliate" of a "holding company" or of
a "subsidiary company" of a "holding company", as such terms are defined in the
Public Utility Holding Company Act of 1935, as amended.
SECTION 4.11. Ownership of Property. Each of the Borrower, the
---------------------
Guarantors and the Subsidiaries has title to its properties sufficient for the
conduct of its business.
SECTION 4.12. No Default. To the best of Borrower's knowledge, neither
----------
the Borrower nor any Guarantor or Subsidiary 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 Guarantors or the Borrower to the Agent or any Bank for purposes of or in
connection with this Agreement or any transaction contemplated hereby is, and
all such information hereafter furnished by the Guarantors or 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 and the Guarantors have
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 Guarantor or Subsidiary is subject to any Environmental Liability which
could have or cause a Material Adverse Effect and none of the Guarantors, the
Borrower or any Subsidiary has been designated as a potentially responsible
party under CERCLA or under any state statute similar
<PAGE>
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, each of the Borrower and 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
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.
SECTION 4.16. Margin Stock. Neither the Borrower nor any Guarantor or
------------
Subsidiary 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
<PAGE>
with, the provisions of Regulation 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.
SECTION 4.18. Insurance. Each of the Borrower, the Guarantors and the
---------
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.
SECTION 4.20. Y2K Plan. The Borrower has developed and has delivered
--------
to the Agent and the Banks a comprehensive plan (the "Y2K Plan") for insuring
that the Borrower's and its Subsidiaries' software and hardware systems which
impact or affect in any way the business operations of the Borrower and its
Subsidiaries' will be Year 2000 Compliant and Ready. The Borrower and its
Subsidiaries' have met the Y2K Plan milestones such that all hardware and
software systems will be Year 2000 Compliant and Ready in accordance with the
Y2K Plan.
<PAGE>
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 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
<PAGE>
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;
(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;
<PAGE>
(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 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
<PAGE>
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
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
<PAGE>
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 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. 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.
<PAGE>
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 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.
<PAGE>
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:
(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;
(iv) tender bonds the payment of the principal of and
<PAGE>
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. [Intentionally Deleted].
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 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 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
<PAGE>
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 May 23, 1997 in the aggregate amount as of
August 31, 1998 of $21,770,661 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.
SECTION 5.27. Ownership. The Borrower shall at all times own 99% of
---------
the capital stock of JDN DCI.
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. Guaranty by the Initial Guarantor; New Subsidiaries to
------------------------------------------------------
Become Guarantors. The Initial Guarantor shall become a Guarantor on the Closing
- -----------------
Date, as contemplated in Section 3.01. Any Subsidiary acquired or created after
May 23, 1997, must become a Guarantor promptly upon becoming a Significant
Subsidiary, 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.
<PAGE>
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), 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 or any Guarantor
(including, without limitation, any required mandatory prepayment or "put"
of such Debt to the Borrower or any Guarantor) or enables (or, with the
<PAGE>
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 May 23, 1997, 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
(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 May 23, 1997, 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 Guarantor 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
<PAGE>
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
(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 Guarantor 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
Guarantor 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
<PAGE>
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
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, (ii) any Bank may terminate its obligation to fund a Money
Market Loan in connection with any relevant Money Market Quote, and (iii) 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
<PAGE>
thereupon notify all the Banks thereof.
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.
SECTION 7.02. Reliance by Agent. The Agent shall be
-----------------
<PAGE>
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) 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
<PAGE>
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 (i) no Bank
--------
shall be liable for any of the foregoing to the extent they arise from the
negligence or wilful misconduct of the Agent and (ii) no Designated Bank shall
be liable for any payment under this Section 7.05 so long as, and to the extent
that, its Designating Bank makes such payments.
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 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
<PAGE>
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. 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
<PAGE>
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 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
<PAGE>
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 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 Fixed Rate Loans, its Notes or its
obligation to make Fixed Rate 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
<PAGE>
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. 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
<PAGE>
(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 2.10, 2.11, 6.01,
8.02 or otherwise) of a Fixed Rate Loan on a date other than the last day of an
Interest Period for such Loan; or
(b) any failure by the Borrower to prepay a Fixed Rate 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 Fixed Rate Loan on the
date for the Fixed Rate Borrowing of which such Fixed Rate Loan is a part
specified in the applicable Notice of Borrowing delivered pursuant to Section
2.02 or notification of acceptance of Money Market Quotes pursuant to Section
2.03(e);
such compensation to include, without limitation, if such Fixed Rate Loan is a
Euro-Dollar Loan, 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 Fixed Rate Loan (or, in the case of a failure to prepay or borrow, the
Interest Period for such Fixed Rate Loan which would have commenced on the date
of such failure to prepay or borrow) at the applicable rate of interest for such
Fixed Rate 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
<PAGE>
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.
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
<PAGE>
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
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
<PAGE>
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 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
<PAGE>
and shall be afforded an opportunity of considering the same and 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.
(c) Each Designated Bank hereby appoints its Designating Bank as such
Designated Bank's agent and attorney in fact and grants to its Designating Bank
an irrevocable power of attorney, coupled with an interest, to receive payments
made for the benefit of such Designated Bank under the Credit Agreement, to
deliver and receive all communications and notices under this Agreement and
other Loan Documents and to exercise on such Designated Bank's behalf all rights
to vote and to grant and make approvals, waivers, consents, releases and
amendments to or under this Agreement or the other Loan Documents. Any document
executed by such agent on such Designated Bank's behalf in connection with this
Agreement or the other Loan Documents shall be binding on such Designated Bank.
The Borrower, the Agent and each of the Banks may rely on and are beneficiaries
of the preceding provisions.
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
<PAGE>
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 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, other than a Money Market Loan or Money
Market Note or participating interest therein, 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
<PAGE>
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
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
<PAGE>
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
the extent of such payment. No such assignment shall release the assigning
and/or pledging Bank from its obligations hereunder.
(g) Any Bank may at any time designate not more than one Designated
Bank to fund Money Market Loans on behalf of such Designating Bank subject to
the terms of this Section 9.08(g), and the provisions of Section 9.08(c) shall
not apply to such designation. No Bank may have more than one Designated Bank
at any time. Such designation may occur either by the execution of the
signature pages of this Agreement by such Bank and Designated Bank next to the
appropriate "Designating Bank" and "Designated Bank" captions, or by execution
by such parties of a Designation Agreement subsequent to the date of this
Agreement; provided, that any Bank and its Designated Bank executing the
signatures pages of this Agreement as "Designating Bank" and "Designated Bank",
respectively, on the date hereof shall be deemed to have executed a Designation
Agreement, and shall be bound by the respective representations, warranties and
covenants contained therein, and such designation shall be conclusively deemed
to be acknowledged by the Borrower and the Agent. The parties to each such
designation occurring subsequent to the execution date hereof shall execute and
deliver to the Agent and the Borrower for their acknowledgment a Designation
Agreement. Upon such receipt of an appropriately completed Designation
Agreement executed by a Designating Bank and a designee representing that it is
a Designated Bank and acknowledged by the Borrower, the Agent will acknowledge
such Designation Agreement and will give prompt notice thereof to the Borrower
and the other Banks, whereupon, (i) the Borrower shall execute and deliver to
the Designating Bank a Designated Bank Note payable to the order of the
Designated Bank, (ii) from and after the effective date specified in the
Designation Agreement, the Designated Bank shall become a party to this
Agreement with a right to make Money Market Loans on behalf of its Designating
Bank pursuant to Section 2.03(h), and (iii) the Designated Bank shall not be
required to make payments with respect to any obligations in this Agreement
except to the extent of excess cash flow of such Designated Bank which is not
otherwise required to repay obligations of such Designated Bank which are then
due and payable; provided, however, that regardless of such designation and
assumption by the Designated Bank, the Designating Bank shall be and remain
obligated to the Borrower, the Agent and the Banks for each and every obligation
of the Designating Bank and its related Designated Bank with respect to this
Agreement, including, without limitation, any indemnification obligations
<PAGE>
under Section 7.05 and any sums otherwise payable to the Borrower by the
Designated Bank. Each Designating Bank shall serve as the administrative agent
of its Designated Bank and shall on behalf of its Designated Bank: (i) receive
any and all payments made for the benefit of such Designated Bank and (ii) give
and receive all communications and notices and take all actions hereunder,
including, without limitation, votes, approvals, waivers, releases, consents and
amendments under or relating to this Agreement and the other Loan Documents. Any
such notice, communication, vote, approval, waiver, consent or amendment shall
be signed by a Designating Bank as administrative agent for its Designated Bank
and need not be signed by such Designated Bank on its own behalf. The Borrower,
the Agent and the Banks may rely thereon without any requirement that the
Designated Bank sign or acknowledge the same. No Designated Bank may assign or
transfer all or any portion of its interest hereunder or under any other Loan
Document, other than via an assignment to its Designating Bank or Liquidity Bank
(but any assignment to a Liquidity Bank shall not curtail or affect the
appointment or rights of the Designating Bank pursuant to Section 9.06(c) or
Section 4 of the Designation Agreement, which appointment and rights are
irrevocable), if any, or otherwise in accordance with the provisions of Section
2.03(h).
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, (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
- -------- ------- ----
<PAGE>
compliance with any directive to disclose any such information so as to allow
the Borrower to effect any such action, and (ix) by any Designated Bank to any
rating agency, commercial paper dealer, or provider of a surety, guaranty or
credit or liquidity enhancement to such Designated Bank which has agreed in
writing to be bound by the provisions of this Section 9.09 and to use such
information solely for purposes of evaluating the creditworthiness of the
Borrower and the Guarantor and their abilities to perform their obligations
under this Agreement and the other Loan Documents.
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 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
<PAGE>
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 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
<PAGE>
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 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.
SECTION 9.19. No Bankruptcy Proceedings. Each of the Borrower, the
-------------------------
Banks, the Administrative Agent and the Co-Agent agrees that it will not
institute against any Designated Bank or join any other Person in instituting
against any Designated Bank any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceeding under any federal or state bankruptcy or
similar law, for one year and one day after the payment in full of the latest
maturing commercial paper note issued by such Designated Bank.
<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
359 East Paces Ferry Road
Suite 400
Atlanta, Georgia 30305
Attention: William J. Kerley
Chief Financial Officer
Telecopier number: 404-364-6444
Confirmation number: 404-262-3252
COMMITMENTS WACHOVIA BANK, N.A. (as successor
- ----------- in interest to Wachovia Bank
of Georgia, N.A.) as Agent and
as a Bank (SEAL)
$66,000,000 By:
--------------------------------------
Title:
Lending Office
--------------
Wachovia Bank, N.A.
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Telecopier number: 404-332-4005
Confirmation number: 404-332-6971
<PAGE>
PNC BANK, NATIONAL
ASSOCIATION (SEAL)
$46,750,000 By:
--------------------------------------
Title:
Lending Office
--------------
PNC Bank, National Association
One PNC Plaza
249 Fifth Avenue
Mail Stop P1-POPP-19-2
Pittsburgh, Pennsylvania 15222
Attention: Robert L. Chiles
Real Estate Banking
Telecopier number: 412-768-5754
Confirmation number: 412-762-8519
BANKERS TRUST COMPANY (SEAL)
$26,750,000 By:
--------------------------------------
Title:
Lending Office
--------------
Bankers Trust Company
130 Liberty Street, 25th Floor
New York, New York 10017
Attention: Mr. Jeffrey Baevsky
Telecopier number: 212-669-0764
Confirmation number: 212-250-4466
<PAGE>
COMMERZBANK, A.G., ATLANTA
AGENCY (SEAL)
$20,250,000 By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
Lending Office
--------------
Commerzbank, A.G., Atlanta Agency
1230 Peachtree Street
Promenade 2, 35th Floor
Atlanta, Georgia 30309
Attention: Mr. Carmen Aquilea
Telecopier number: 404-888-6539
Confirmation number: 404-888-6500
Designating Bank with respect to
Four Winds Funding Corporation
FOUR WINDS FUNDING CORPORATION (SEAL)
$0 By: Commerzbank AG, New York Branch,
as Administrator and Attorney-in-Fact
By:
--------------------------------------
Title:
By:
--------------------------------------
Title:
Lending Office
--------------
Four Winds Funding Corporation
c/o Commerzbank AG, New York Branch
2 World Financial Center
New York, New York 10281-1050
Attention: Mr. Howard Thompson
Telecopier number: 212-266-7661
Confirmation number: 212-266-7474
Designated Bank of Commerzbank AG,
Atlanta Agency
<PAGE>
THE BANK OF NOVA SCOTIA (SEAL)
$15,000,000 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:
$174,750,000
<PAGE>
EXHIBIT A-1
-----------
SYNDICATED LOAN NOTE
Atlanta, Georgia
September 2, 1998
For value received, JDN REALTY CORPORATION, a Maryland corporation
(the "Borrower"), promises to pay to the order of __________________________
________________________, a ____________________ (the
"Bank"), for the account of its Lending Office, the principal sum of
___________________________________ AND NO/100 DOLLARS ($____________), or such
lesser amount as shall equal the unpaid principal amount of each Syndicated 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
Syndicated Loan 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, 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 Syndicated 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 Syndicated Loan Note is one of the Syndicated Loan Notes referred
to in the Amended and Restated Credit Agreement dated as of September 2, 1998
among the Borrower, the Banks listed on the signature pages thereof and Wachovia
Bank, N.A., as Agent (as the same may be amended and modified from time to time,
the "Credit Agreement") and amends and restates the Note dated May 23, 1997.
Terms defined in the Credit Agreement are used herein with the same meanings.
Reference is made to the Credit Agreement for provisions for the optional and
<PAGE>
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 Syndicated
Loan 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 Syndicated Loan 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:
<PAGE>
Note (cont'd)
SYNDICATED LOANS AND PAYMENTS OF PRINCIPAL
- --------------------------------------------------------------------------------
Base Rate Amount Amount of
or Euro- of Principal Maturity Notation
Date Dollar Loan Loan Repaid Date Made By
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
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- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE>
EXHIBIT A-2
-----------
MONEY MARKET LOAN NOTE
----------------------
As of September 2, 1998
For value received, JDN REALTY CORPORATION, a Delaware Limited
Partnership (the "Borrower"), promises to pay to the order of ________________,
a ______________________ (the "Bank"), for the account of its Lending Office,
the principal sum of ONE HUNDRED MILLION AND NO/100 DOLLARS ($100,000,000), or
such lesser amount as shall equal the unpaid principal amount of each Money
Market 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 Money Market Loan Note on the dates and at the rate or rates provided
for in the Credit Agreement referred to below. 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, N.A., 191 Peachtree Street,
N.E., Atlanta, Georgia 30303-1757, or at such other address as may be specified
from time to time pursuant to the Credit Agreement.
All Money Market 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 Money Market Loan Note is one of the Money Market Loan Notes
referred to in the Amended and Restated Credit Agreement dated as of September
2, 1998 among the Borrower, the Banks listed on the signature pages thereof,
Wachovia Bank, N.A., as Agent (as the same may be amended and modified from time
to time, the "Credit Agreement"). Terms defined in the 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
<PAGE>
the Borrower to pay all costs of collection, including reasonable attorneys
fees, in the event this Money Market Loan 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 Money Market Loan 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:
<PAGE>
Money Market Loan Note (cont'd)
MONEY MARKET LOANS AND PAYMENTS OF PRINCIPAL
- -------------------------------------------------------------------------------
Amount Amount of Stated
Interest of Principal Maturity Notation
Date Rate Loan Repaid Date Made By
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
- -------------------------------------------------------------------------------
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<PAGE>
EXHIBIT B
---------
OPINION OF
COUNSEL FOR THE BORROWER AND THE INITIAL GUARANTOR
--------------------------------------------------
[Dated as provided in Section 3.01 of
the Credit Agreement]
To the Banks and the Agent
Referred to Below
c/o Wachovia Bank, 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"), and JDN Development Company, Inc., a Delaware
corporation (the "Initial Guarantor"), in connection with the Amended and
Restated Credit Agreement (the "Credit Agreement") dated as of September 2,
1998, among the Borrower, the banks listed on the signature pages thereof and
Wachovia Bank, 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 and has all corporate powers
required to carry on its business as now conducted. The Initial Guarantor is a
corporation duly incorporated, validly existing and in good standing under the
laws of ________ and has all corporate powers required to carry on its business
as now conducted.[INCLUDE SIMILAR OPINION AS TO EACH SUBSIDIARY]
<PAGE>
2. The execution, delivery and performance by the Borrower of the
Credit Agreement and the Notes, and of the Guaranty by the Initial Guarantor,
respectively (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
the Initial Guarantor or of any agreement, judgment, injunction, order, decree
or other instrument which to our knowledge is binding upon the Borrower or the
Initial Guarantor 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 the Initial Guarantor any of the Subsidiaries.
3. The Credit Agreement constitutes a valid and binding agreement of
the Borrower, and the Guaranty constitutes a valid and binding agreement of the
Initial Guarantor, in each case 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 the Initial Guarantor or which in any manner questions the
validity or enforceability of the Credit Agreement, any Note or the Guaranty.
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.
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
<PAGE>
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 [ADD ADDITIONAL
EXCEPTION, IF REQUIRED, REGARDING THE STATE OF INCORPORATION OF THE INITIAL
GUARANTOR]. 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 September 2,
1998, 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 [ADD
ADDITIONAL LIMITATION, IF REQUIRED, REGARDING THE STATE OF INCORPORATION OF THE
INITIAL GUARANTOR].
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,
<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, 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 September 2, 1998, among JDN Realty Corporation,
a Maryland corporation (the "Borrower"), the banks listed on the signature pages
thereof (the "Banks") and Wachovia Bank, 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 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
<PAGE>
behalf of the Borrower, and of the Guaranty by the Initial Guarantor, 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, and the Guaranty constitutes a valid and binding agreement of the
Initial Guarantor, 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, the Notes and the Guaranty 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, the
Notes and the Guaranty, 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,
<PAGE>
EXHIBIT D
---------
ASSIGNMENT AND ACCEPTANCE
-------------------------
Dated __________ __, ____
Reference is made to the Credit Agreement dated as of September 2,
1998(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,
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 Syndicated Loans
[and Money Market Loans] owing to the Assignor and a ___% interest in the
Note[s] [and Money Market Loan Note] 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 Syndicated Loans [and Money Market 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 responsibility with respect to the financial condition of the
Borrower or the performance or observance by the Borrower of any of its
<PAGE>
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
Syndicated Loan Note dated _____________,____ in the principal amount of
$__________ payable to the order of the Assignee and a new Money Market Loan
Note dated ________________,____ in the principal amount of $_____________
payable to the order of the Assignee] [new Notes as follows: a (i) Syndicated
Loan Note dated ________________, ____ in the principal amount of $_____________
payable to the order of the Assignor (ii) Syndicated Loan Note dated
_____________, ____ in the principal amount of $______________ payable to the
order of the Assignee, and (iii) and a new Money Market Loan 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 as are necessary to indicate that all such
payments are subject to such taxes at a rate reduced by an applicable tax
treaty].
<PAGE>
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:
Lending Office:
[Address]
<PAGE>
WACHOVIA BANK, N.A.,
As Agent
By:
--------------------------------------
Title:
JDN REALTY CORPORATION
IF REQUIRED BY THE CREDIT AGREEMENT
By:
---------------------------------------
Title:
<PAGE>
EXHIBIT E
---------
NOTICE OF BORROWING
-------------------
_____________________, ____
Wachovia Bank, 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 September 2, 1998 by and among JDN
Realty Corporation, the Banks from time to time parties thereto, and
Wachovia Bank, 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 $______________
(c) Principal amount outstanding under
Loans $______________
(d) Principal amount outstanding under
Money Market Loans $______________
<PAGE>
(e) Amount available to be borrowed
(lesser of (a) and (b), less sum
of (c) and (d)) $______________
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:
<PAGE>
EXHIBIT F
---------
COMPLIANCE CERTIFICATE
----------------------
Reference is made to the Amended and Restated Credit Agreement dated as
of September 2, 1998 (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, 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 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 0.40 to 1.0
3. Ratio of EBITDA to Consolidated Interest Expense (Section 5.22)
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 $________
<PAGE>
(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
and owned for at least one Fiscal
Quarter Schedule 5 $_________
(b) 10 times (a) $_________
(c) 4 times (b) $_________
(d) book value of each Property not subject
to a Mortgage and owned for less than
one Fiscal Quarter $_________
(e) book value of all Construction in Progress $_________
(f) sum of (c),(d) and (f) $_________
(g) Unsecured Funded Debt Schedule 6 $_________
(h) Actual ratio of (f) to (g) ____ 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 $_________
(b) Unsecured Interest Expense1 $_________
- ------------
/1/ Include only Consolidated Interest Expense for Fiscal Quarter attributable
to Unsecured Funded Debt.
<PAGE>
(c) Actual ratio of (a) to (b) ____ to 1.0
Minimum ratio 1.75 to 1.0
6. Restricted Payments (Section 5.15)2
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 May 23, 1997 in the aggregate as of August 31, 1998 of
21,770,661, (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) $_________
(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
- --------------
/2/ Include this paragraph 6 and Schedule 7 only with the first Compliance
Certificate furnished after the end of each Fiscal Year. Amounts included
herein are for the year ended December 31, ____
<PAGE>
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 $_________
(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 $_________
<PAGE>
(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 $__________
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:
<PAGE>
[(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
Guarantors do not have control $_________
(g) 5% of (d) $_________
Limitation: (f) may not exceed (g)
<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) $__________
<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 Property owned
by the Borrower or any Guarantor for
at least one Fiscal Quarter $__________
(b) 40 times (a) $__________
(c) book value of each Property owned by
the Borrower or any Guarantor
for less than one Fiscal Quarter $__________
(d) book value of Construction in
Progress of each Property owned
by the Borrower or any Guarantor $__________
GROSS ASSET VALUE (sum of (b) through (d)) $__________
<PAGE>
Schedule 3
----------
Total Secured Debt/3/
---------------------
INTEREST FINAL
RATE/4/ MATURITY TOTAL
-------- -------- -----
Money Borrowed
- --------------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
Total Money Borrowed $
--------
Deferred Purchase Price/5/
- --------------------------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
$
- ----------------------------------- -------- -------- --------
Total Deferred Purchase Price $
--------
Capital Leases in which Borrower is the Tenant
- ----------------------------------------------
$
- ------------------------------------------------------------- --------
$
- ------------------------------------------------------------- --------
- -----------
/3/ Include only Debt secured by a Mortgage
/4/ If rate is fixed, insert contract rate. If rate is floating, state that.
/5/ Exclude trade accounts payable in the ordinary course of business.
<PAGE>
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 $
========
<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 $
========
<PAGE>
Schedule 5
----------
Net Operating Income/6/
-----------------------
(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 $________
- ----------
/6/ Include only Properties not subject to a Mortgage and owned for at least one
Fiscal Quarter
<PAGE>
Schedule 6
----------
Unsecured Funded Debt/7/
-----------------------
, INTEREST FINAL
RATE8 MATURITY TOTAL
-------- -------- -----
Money Borrowed
- --------------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
Total Money Borrowed $
------
Deferred Purchase Price/9/
- -------------------------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
Total Deferred Purchase Price $
------
Capital Leases in which the Borrower is the tenant
- --------------------------------------------------
$
- --------------------------------------------------------------- -------
- --------------------------------------------------------------- $
-------
Total Capital Leases $
-------
Letter of Credit Reimbursement
Obligations
- -----------
$
- -------------------------------------------------------------- -------
- --------
/7/ Include only Debt not secured by a Mortgage
/8/ If rate is fixed, insert contract rate. If rate is floating, state that.
/9/ Exclude trade accounts payable in the ordinary course of business.
<PAGE>
Total Letter of Credit
Reimbursement Obligations $
-------
Guarantees of Debt of Persons other than Borrower and Guarantors
- ----------------------------------------------------------------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
$
- ----------------------------------- -------- -------- ------
TOTAL UNSECURED FUNDED DEBT $
======
<PAGE>
Schedule 7/10/
--------------
Funds from Operations/1/
-----------------------
(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 $________
- --------
/10/ Include only with the first Compliance Certificate furnished after the end
of each Fiscal year.
<PAGE>
EXHIBIT G
---------
JDN REALTY CORPORATION
CLOSING CERTIFICATE
-------------------
Reference is made to the Amended and Restated Credit Agreement (the "Credit
Agreement") dated as of September 2, 1998, among JDN Realty Corporation, the
Banks listed therein, and Wachovia Bank, 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 September 2, 1998.
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 Amended and Restated Credit
Agreement dated as of September 2, 1998 among the Borrower, Wachovia Bank, N.A.
as Agent and as a Bank, and certain other Banks listed on the signature pages
thereof, that:
1. There has been no amendment, modification or alteration of the
Certificate of Incorporation of the Borrower since May 23, 1997, [EXCEPT
__________, A COPY OF WHICH IS ATTACHED HERETO].
2. There has been no amendment, modification or alteration of the Bylaws of
the Borrower since May 23, 1997, [EXCEPT __________, A COPY OF WHICH IS ATTACHED
HERETO].
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.
IN WITNESS WHEREOF, the undersigned has hereunto set [his/her] hand as of
September 2, 1998.
------------------------------
<PAGE>
EXHIBIT I
---------
BORROWING BASE CERTIFICATE
Reference is made to the Amended and Restated Credit Agreement dated
as of September 2, 1998 (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, 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 $_________
(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 Reserve11 $_________
BORROWING BASE: sum of (d), plus (g), less
---- ----
(if applicable) (h) $________
- ----------
/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>
JDN REALTY CORPORATION
By:
--------------------------------
Its:
<PAGE>
EXHIBIT J
---------
LIST OF ELIGIBLE PROPERTIES
---------------------------
JDN REALTY CORPORATION
<TABLE>
<CAPTION>
Year Built/ New to
Property Square Renovated or Borrowing
Number Shopping Center Name Location Footage Expanded Base?
- --------- -------------------- -------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C>
125 Southland Plaza Decatur, AL 122,956 1965/1996
130 East Side Plaza Gadsden, AL 85,341 1979
175 Pepperell Corners (Phase I) Opelika, AL 279,825 1993 New
176 Pepperell Corners (Phase II) Opelika, AL 31,800 1995
260 Ocala West Ocala, FL 151,338 1984/1991 New
280 Capital West Tallahassee, FL 100,052 1990\1994 New
301 Riverplace Canton, GA 65,251 1983
302 Riverpointe Canton, GA 238,026 1996
310 Dodge County Marketplace Eastman, GA 41,603 1990
313 Banks Station Fayetteville, GA 156,063 1990
315 Foodmax Plaza Fort Oglethorpe, GA 176,903 1973/1992
318 Five Forks Village Lawrenceville, GA 89,064 1990 New
340 N. Main Street Shopping Lafayette, GA 70,849 1990
Center
342 LaGrange Shopping Center LaGrange, GA 62,990 1984
344 Lawrenceville Town Center Lawrenceville, GA 277,079 1989/1995 New
346 Five Forks Crossing Lilburn, GA 73,951 1990 New
347 Midway Shopping Center Loganville, GA 91,197 1995
348 Beacon Heights Madison, GA 106,100 1989
360 Newnan Crossing Newnan, GA 360,669 1995
365 Peachtree City-Pike's Peachtree City, GA 10,800 1997
375 Freeway Junction Stockbridge, GA 162,779 1988
380 Shannon Square Union City, GA 100,005 1986 New
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Built/ New to
Property Square Renovated or Borrowing
Number Shopping Center Name Location Footage Expanded Base?
- --------- -------------------- -------- ------- ----------- ---------
<S> <C> <C> <C> <C> <C>
390 Woodstock Place Woodstock, GA 164,453 1995
391 Woodstock-Pike Woodstock, GA 11,020 1997
405 River Hills Shopping Center Asheville, NC 186,970 1996
410 Cross Pointe Center Fayetteville, NC 204,291 1985 New
413 Wendover Place Greensboro, NC 334,523 1997 New
415 University Commons Greenville, NC 226,822 1996
470 Pineridge Crossing Rockingham, NC 168,776 1988 New
480 Wallace Crossing Wallace, NC 118,991 1989 New
483 Myrtle Grove Wilmington, NC 169,432 1991 New
503 Chesterfield Commons Cheraw, SC 45,099 1990
506 Ashley Crossing-outparcels Charleston, SC - 1991
545 Kelley Corners Lake City, SC 135,962 1991
570 Merchant's Walk Sumter, SC 19,143 1987
600 Overlook @ Hamilton Chattanooga, TN 214,579 1992 New
605 Foodmax Plaza Columbia, TN 68,948 1993
620 Alexander Plaza Franklin, TN 18,000 1983
625 Northcreek Commons Goodlettsville, TN 84,945 1987
650 Memorial Village Murfreesboro, TN 117,750 1972/1993
670 Cherokee Square Tullahoma, TN 70,766 1989
720 Bermuda Square Chester, VA 116,311 1977/1978 New
775 Tri-Rivers Shopping Center South Boston, VA 90,330 1989/1997
781 Shopper's World at Milwaukee, WI 190,143 1967 New
Brookfield
783 Brown Deer Center Milwaukee, WI 217,093 1967 New
785 Point Loomis Milwaukee, WI 160,533 1962 New
807 Tri-State Plaza Burlington, OH 159,359 1991/1995
-----------
6,346,766
===========
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Year Built/ New to
Property Square Renovated or Borrowing
Number Shopping Center Name Location Footage Expanded Base?
- --------- -------------------- -------- ------- ------------ ---------
<S> <C> <C> <C> <C> <C>
304 Bartow Marketplace* Cartersville, GA 375,828 1995
31 Cross Pointe Centre Fayetteville, NC 204,291 1985
Property**
</TABLE>
* Was previously included in borrowing base.
** Was previously included for the mortgage note receivable which was
cancelled in February.
[To follow]
<PAGE>
EXHIBIT K
---------
GUARANTY
--------
THIS GUARANTY (this "Guaranty") is made as of September 2, 1998 by JDN
DEVELOPMENT COMPANY, INC., a Delaware 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, 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 of September 2, 1998 (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;
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:
<PAGE>
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, 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
<PAGE>
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;
(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
<PAGE>
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.
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
<PAGE>
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.
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
<PAGE>
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 Significant Subsidiaries 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
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, until payment in full of the
Guaranteed Obligations. 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.
<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.
JDN DEVELOPMENT COMPANY, INC.
By:
----------------------------------
Title:
<PAGE>
EXHIBIT L
---------
CONTRIBUTION AGREEMENT
THIS CONTRIBUTION AGREEMENT (this "Agreement") is entered into as of
September 2, 1998, by and between JDN REALTY CORPORATION, a Maryland corporation
(the "Principal") and JDN DEVELOPMENT COMPANY, INC. a Delaware 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 the last paragraph hereof and Section 5.29 of the Credit Agreement
referred to below). The Principal and each of the 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
September 2, 1998 among the Principal, the Banks party thereto and Wachovia
Bank, 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 Guarantor and each Significant Subsidiary 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 Initial Guarantor and, together with Significant Subsidiaries which
become Guarantors as contemplated in the last paragraph hereof, have jointly and
severally agreed to guarantee the "Guaranteed Obligations" (as defined in the
Guaranty); and
WHEREAS, the Principal owns most of the beneficial interests in the
Initial Guarantor, and each Guarantor other than the Initial Guarantor is a
direct or indirect subsidiary of the Principal and is engaged in businesses
related to those of the Principal and each other Guarantor, and each of the
Guarantors will derive direct or indirect economic benefit from the
effectiveness and existence of the Credit Agreement;
NOW, THEREFORE, in consideration of the premises and the covenants
hereinafter contained, and to induce each Guarantor to enter into the Guaranty,
it is agreed as follows:
<PAGE>
To the extent that any Guarantor shall, under the Guaranty, make a
payment (a "Guarantor Payment") of a portion of the Guaranteed Obligations,
then, without limiting its rights of subrogation against the principal, such
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 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 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 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 Guarantor to
which such contribution and indemnification is owing.
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
<PAGE>
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 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 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 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
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.
<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:
JDN DEVELOPMENT COMPANY, INC. (SEAL)
By:
-----------------------------------
Title:
<PAGE>
EXHIBIT M
---------
MONEY MARKET QUOTE REQUEST
--------------------------
Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote Request
--------------------------
This Money Market Quote Request is given in accordance with Section
2.03 of the Amended and Restated Credit Agreement (as amended or modified from
time to time, the "Credit Agreement") dated as of September 2, 1998, among JDN
Realty Corporation, the Banks from time to time parties thereto, and WACHOVIA
BANK, N.A., as Agent. Terms defined in the Credit Agreement are used herein as
defined therein.
The Borrower hereby requests that the Agent obtain quotes for a Money Market
Borrowing based upon the following:
1. The proposed date of the Money Market Borrowing shall be
______________, 19_____ (the "Money Market Borrowing Date")./1/*
2. The aggregate amount of the Money Market Borrowing shall be
$____________./2/
- ------------------------
* All numbered footnotes appear on the last page of this Exhibit M.
---------
<PAGE>
3. The Stated Maturity Date(s) applicable to the Money Market Borrowing
shall be ______ days./3/
Very truly yours,
JDN Realty Corporation
By:
------------------------------
Title:
- ------------------------
/1/ The date must be a Euro-Dollar Business Day.
/2/ The amount of the Money Market Borrowing is subject to Section 2.03(a) and
(b).
/3/ The Stated Maturity Dates are subject to Section 2.03(b)(iii). The Borrower
may request that up to 2 different Stated Maturity Dates be applicable to
any Money Market Borrowing, provided that (i) each such Stated Maturity Date
--------
shall be deemed to be a separate Money Market Quote Request and (ii) the
Borrower shall specify the amounts of such Money Market Borrowing to be
subject to each such different Stated Maturity Date.
<PAGE>
EXHIBIT N
---------
MONEY MARKET QUOTE
------------------
Wachovia Bank, N.A.,
as Agent
191 Peachtree Street, N.E.
Atlanta, Georgia 30303-1757
Attention: Syndications Group
Re: Money Market Quote to
---------------------------------------------
This Money Market Quote is given in accordance with Section 2.03(c)(ii)
of the Amended and Restated Credit Agreement (as amended or modified from time
to time, the "Credit Agreement") dated as of September 2, 1998, among JDN Realty
Corporation (the "Borrower"), the Banks from time to time parties thereto, and
WACHOVIA BANK, N.A., as Agent. Terms defined in the Credit Agreement are used
herein as defined therein.
In response to the Borrower's Money Market Quote Request dated
____________, 19__, we hereby make the following Money Market Quote on the
following terms:
1. Quoting Bank:
2. Person to contact
at Quoting Bank:
3. Date of Money Market Borrowing:/1/*
4. We hereby offer to make Money Market Loan(s) in the following maximum
principal amounts for the following Interest Periods and at the following rates:
Maximum Stated
Principal Maturity
Amount/2/ Date/3/ Rate Per Annum/4/
- --------- -------- -----------------
- ------------------------
* All numbered footnotes appear on the last page of this Exhibit N.
---------
We understand and agree that the offer(s) set forth above, subject to
the satisfaction of the applicable conditions set forth in the Credit Agreement,
irrevocably obligate(s) us to make the Money Market Loan(s) for which any
<PAGE>
offer(s) [is] [are] accepted, in whole or in part (subject to the last sentence
of Section 2.03(c)(i) of the Credit Agreement).
Very truly yours,
[Name of Bank]
Dated: By:
---------------------------
Authorized Officer
- ------------------------
/1/ As specified in the related Money Market Quote Request.
/2/ The principal amount bid for each Stated Maturity Date may not exceed the
principal amount requested. Money Market Quotes must be made for at least
$5,000,000 or a larger integral multiple of $1,000,000.
/3/ The Stated Maturity Dates are subject to Section 2.03(b).
/4/ Subject to Section 2.03(c)(ii)(C).
<PAGE>
EXHIBIT O
---------
Form of Designation Agreement
-----------------------------
Dated __________________, _____
Reference is made to that certain Amended and Restated Credit Agreement
dated as of September 2, 1998 (as amended prior to the date hereof and as it may
hereafter be amended, supplemented or otherwise modified from time to time, the
"Credit Agreement") by and among JDN Realty Corporation, as the Borrower, the
Banks parties thereto, and Wachovia Bank, N.A. (formerly Wachovia Bank of
Georgia, N.A.), as Agent. Terms defined in the Credit Agreement are used
herein with the same meaning.
[NAME OF DESIGNATING BANK] (the "Designating Bank") and [NAME OF DESIGNEE]
(the "Designee") agree as follows:
1. Pursuant to Section 9.08(g) of the Credit Agreement, the Designating
Bank hereby designates the Designee, and the Designee hereby accepts such
designation, to have a right to make Money Market Loans pursuant to Section
2.03(h) of the Credit Agreement. Any assignment by Designating Bank to Designee
of its rights to make a Money Market Loan pursuant to such Section 2.03(h) shall
be effective at the time of the funding of such Money Market Loan and not before
such time.
2. Except as set forth in Section 7 below, the Designating Bank makes no
representation or warranty and assumes no responsibility pursuant to this
Designation Agreement with respect to (a) any statements, warranties or
representations made in or in connection with any Loan Document or the
execution, legality, validity, enforceability, genuineness, sufficiency or value
of any Loan Document or any other instrument and document furnished pursuant
thereto and (b) the financial condition of the Borrower or the performance or
observance by the Borrower of any of its obligations under any Loan Document or
any other instrument or document furnished pursuant thereto.
3. The Designee (a) confirms that it has received a copy of each Loan
Document, together with copies of the financial statements referred to in
Sections 4.04 and 5.01(a) and (b) (for periods for which such financial
statements are available) of the Credit Agreement and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Designation Agreement; (b) agrees that it will
independently and without reliance upon the Agent, the Designating Bank 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
<PAGE>
not taking action under any Loan Document; (c) confirms that it is a Designated
Bank; (d) appoints and authorizes the Agent to take such action as the Agent on
its behalf and to exercise such powers and discretion under any Loan Document as
are delegated to the Agent by the terms thereof, together with such powers and
discretion as are reasonably incidental thereto; and (e) agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of any Loan Document are required to be performed by it as a Bank.
4. The Designee hereby appoints the Designating Bank as Designee's agent
and attorney in fact and grants to the Designating Bank an irrevocable power of
attorney, coupled with an interest, to receive payments made for the benefit of
Designee under the Credit Agreement, to deliver and receive all communications
and notices under the Credit Agreement and other Loan Documents and to exercise
on Designee's behalf all rights to vote and to grant and make approvals,
waivers, consents, releases and amendments to or under the Credit Agreement or
other Loan Documents. Any document executed by such agent on the Designee's
behalf in connection with the Credit Agreement or other Loan Documents shall be
binding on the Designee. The Borrower, the Agent and each of the Banks may
rely on and are beneficiaries of the preceding provisions.
5. Following the execution of this Designation Agreement by the
Designating Bank and its Designee, it will be delivered to the Borrower for
acknowledgment and to the Agent for acknowledgment and recording by the Agent.
The effective date for this Designation Agreement (the "Effective Date") shall
be the date of acknowledgment hereof by the Agent, unless otherwise specified on
the signature page thereto.
6. The Designating Bank and, by execution of their respective
acknowledgments below, the Borrower and the Agent, each hereby (i) acknowledges
that the Designee is relying on the non-petition provisions of Section 9.19 of
the Credit Agreement as agreed to by all signatories thereto and (ii) reaffirms
that it will not institute against the Designee or join any other Person in
instituting against the Designee any bankruptcy, reorganization, arrangement,
insolvency or liquidation proceedings under any federal or state bankruptcy or
similar law for one year and done day after the payment in full of the latest
maturing commercial paper note issued by the Designee.
7. The Designating Bank unconditionally agrees to pay or reimburse the
Designee and save the Designee harmless against all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind or mature whatsoever which may be imposed or asserted
by any of the parties to the Loan Documents against the Designee, in its
<PAGE>
capacity as such, in any way relating to or arising out of this Agreement or any
other Loan Documents or any action taken or omitted by the Designee hereunder or
thereunder, provided that the Designating Bank shall not be liable for any
portion of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements if the same results from the
Designee's gross negligence or willful misconduct.
8. Upon such acceptance and recording by the Agent, as of the Effective
Date, the Designee shall be a party to the Credit Agreement with a right to make
Money Market Loans as a Designated Bank pursuant to Section 2.03(h) of the
Credit Agreement and the rights and obligations of a Designated Bank related
thereto; provided, however, that the Designee shall not be required to make
payments with respect to such obligations except to the extent of excess cash
flow of the Designee which is not otherwise required to repay obligations of the
Designee Bank which are then due and payable. Notwithstanding the foregoing,
the Designating Bank shall be and remain obligated to the Borrower, the Agent
and the Banks for each and every of the obligations of the Designee and the
Designating Bank with respect to the Credit Agreement, including, without
limitation, any indemnification obligations under Section 7.05 of the Credit
Agreement and any sums otherwise payable to the Borrower by the Designee.
9. This Designation Agreement shall be governed by and construed in
accordance with the laws of the State of [GEORGIA][NEW YORK][OTHER JURISDICTION
CHOSEN BY DESIGNATING BANK AND DESIGNATED BANK].
10. This Designation Agreement may be executed in any number of
counterparts and by different parties hereto in separate counterparts, each of
which when so executed shall be deemed to be an original and all of which taken
together shall constitute one and the same agreement. Delivery of an executed
counterpart of a signature page to this Designation Agreement by facsimile
transmission shall be effective as delivery of a manually executed counterpart
of this Designation Agreement.
IN WITNESS WHEREOF, the Designating Bank and the Designee intending to be
legally bound, have caused this Designation Agreement to be executed by their
officers thereunto duly authorized as of the date first above written.
[NAME OF DESIGNATING BANK]
as Designating Bank
By:
Title:
<PAGE>
[NAME OF DESIGNEE], as Designee
By:
Title:
Lending Office (and address for
notices):
Acknowledged this _____ day Acknowledged this _____ day
of ________________, ____ of ________________, ____
(the "Effective Date")
WACHOVIA BANK, N.A. JDN REALTY CORPORATION
as the Agent as the Borrower
By:_________________________ By:___________________________
Title: Title:
<PAGE>
Schedule 4.08
-------------
Subsidiaries
- ------------
Name Jurisdiction of Incorporation
- ---- -----------------------------
JDN Realty AL, Inc. Alabama
JDN Realty Corporation GP, Inc. Delaware
JDN of Pennsylvania Realty Corporation Delaware
JDN Realty LP, Inc. Delaware
JDN West Allis Associates, Limited Partnership Georgia
JDN Realty Investment, L.P. Georgia
<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.
<PAGE>
Schedule 5.17
-------------
Existing Investments/12/
------------------------
As of May 23, 1997
Investment Amount
---------- ------
50% Interest in River Hills, L.L.C. $ 2,525,364
50% Interest in Jebco/JDN Loganville Center LLC $ 1,343,462
1% of Voting Common Stock of JDN Development
Company, Inc. $ 100
100% of Non-Voting Common Stock of JDN
Development Company, Inc. $ 4,043,822
Mortgage Loans to JDN Development Company, Inc. $ 26,665,424
Advances to JDN Development Company, Inc. $ 14,546,334
- --------------
/12/ Exclude Subsidiaries, which are set forth on Schedule 4.08.
<PAGE>
Schedule 5.25
-------------
Existing Guarantees
-------------------
In Effect on May 23, 1997
<TABLE>
<CAPTION>
5/23/97 8/31/98
Entity/Instrument Amount Amount
----------------- ------ ------
<S> <C> <C>
JDN Development Company, Inc.
Construction loan Steubenville, OH $ 6,862,000 $ 0
Construction loan Canton, GA 9,548,000 9,548,000
Construction loan Warner Robins, GA 6,747,000 7,273,860
Construction loan Winston Salem, NC 10,075,000 0
----------- ----------
Sub-Total $33,232,000 $16,845,686
Dogwood Drive, LLC
50% of Construction loan $ 3,411,000 $ 4,948,793
------------ -----------
Total: $36,643,000 $21,770,661
=========== ===========
</TABLE>
<PAGE>
JDN REALTY CORPORATION
Computation of Ratio of Earnings to Fixed Charges
<TABLE>
<CAPTION>
Three months ended Nine months ended
September 30, September 30,
1998 1997 1998 1997
------------------------ -----------------------
<S> <C> <C> <C> <C>
Fixed Charges:
Interest Expense (including
amortization of deferred debt cost) $ 4,867 $ 2,528 $ 12,421 $ 6,338
Interest Capitalized 1,852 1,465 4,573 3,374
-------- ------- -------- --------
Total Fixed Charges $ 6,719 $ 3,993 $ 16,994 $ 9,712
======== ======= ======== ========
Earnings:
Net income before net gain on real
estate sales and extraordinary items $ 10,261 $ 7,430 $ 29,341 $ 19,659
Fixed Charges 6,719 3,993 16,994 9,712
Capitalized Interest (1,852) (1,465) (4,573) (3,374)
-------- ------- -------- --------
Total Earnings $ 15,128 $ 9,958 $ 41,762 $ 25,997
======== ======= ======== ========
Ratio of Earnings to Fixed Charges 2.25 2.49 2.46 2.68
</TABLE>
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C> <C>
<PERIOD-TYPE> 9-MOS 9-MOS
<FISCAL-YEAR-END> DEC-31-1998 DEC-31-1997
<PERIOD-START> JAN-01-1998 JAN-01-1997
<PERIOD-END> SEP-30-1998 SEP-30-1997
<CASH> 0 2,207
<SECURITIES> 0 0
<RECEIVABLES> 5,472 1,940
<ALLOWANCES> 0 0
<INVENTORY> 0 0
<CURRENT-ASSETS> 0 0
<PP&E> 768,634 480,014
<DEPRECIATION> 49,627 35,358
<TOTAL-ASSETS> 866,224 534,197
<CURRENT-LIABILITIES> 0 0
<BONDS> 234,557 159,495
0 0
20 0
<COMMON> 310 232
<OTHER-SE> 484,849 283,313
<TOTAL-LIABILITY-AND-EQUITY> 866,224 534,197
<SALES> 0 0
<TOTAL-REVENUES> 56,872 33,532
<CGS> 0 0
<TOTAL-COSTS> 0 0
<OTHER-EXPENSES> 24,572 14,006
<LOSS-PROVISION> 0 0
<INTEREST-EXPENSE> 6,428 3,297
<INCOME-PRETAX> 29,341 19,659
<INCOME-TAX> 0 0
<INCOME-CONTINUING> 29,341 19,659
<DISCONTINUED> 0 0
<EXTRAORDINARY> 0 5,940
<CHANGES> 0 0
<NET-INCOME> 29,551 13,367
<EPS-PRIMARY> 0.98 0.60
<EPS-DILUTED> 0.96 0.59
</TABLE>
