EXHIBIT 10.1
EXECUTION COPY
REVOLVING CREDIT AGREEMENT
dated as of December 14, 1999
among
REALTY INCOME CORPORATION
THE BANKS NAMED HEREIN,
THE BANK OF NEW YORK,
as Administrative Agent and as Swing Line Bank,
FIRST UNION NATIONAL BANK,
as Syndication Agent,
WELLS FARGO BANK, NATIONAL ASSOCIATION
as Documentation Agent,
BANK OF MONTREAL,
as Co-Agent
AND
BNY CAPITAL MARKETS, INC.,
as Lead Arranger and as Book Manager
TABLE OF CONTENTS
Page
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ARTICLE I
DEFINITIONS
Section 1.01 Definitions........................................ 6
ARTICLE II
THE LOANS
Section 2.01 The Loans.......................................... 24
Section 2.02 Procedure for Pro Rata Loans....................... 24
Section 2.03 Pro Rata Notes..................................... 26
Section 2.04 Certain Fees....................................... 26
Section 2.05 Cancellation or Reduction of the Commitment........ 27
Section 2.06 Optional Prepayment................................ 27
Section 2.07 Mandatory Prepayment............................... 27
Section 2.08 Procedure for Competitive Loans.................... 28
Section 2.09 Competitive Notes.................................. 32
Section 2.10 Swing Line Advances................................ 32
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01 Procedure for Interest Rate Determination.......... 35
Section 3.02 Interest on ABR Loans.............................. 35
Section 3.03 Interest on Eurodollar Loans....................... 36
Section 3.04 Interest on Absolute Rate Competitive Loans........ 37
Section 3.05 Conversion/Continuance............................. 37
Section 3.06 Post Default Interest.............................. 37
Section 3.07 Maximum Interest Rate.............................. 38
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01 Pro Rata Treatment................................. 38
Section 4.02 Method of Payment.................................. 38
Section 4.03 Compensation for Losses............................ 39
Section 4.04 Withholding, Reserves and Additional Costs......... 40
Section 4.05 Unavailability..................................... 45
(table continued next page)
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(table continued)
TABLE OF CONTENTS (continued)
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ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 Representations and Warranties..................... 46
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01 Conditions to the Availability of the Commitment... 53
Section 6.02 Conditions to All Loans............................ 55
ARTICLE VII
COVENANTS
Section 7.01 Affirmative Covenants.............................. 56
Section 7.02 Negative Covenants................................. 61
Section 7.03 Financial Covenants................................ 65
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 Events of Default.................................. 66
ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE BANKS
Section 9.01 The Agency......................................... 69
Section 9.02 The Administrative Agent's Duties.................. 69
Section 9.03 Sharing of Payment and Expenses.................... 70
Section 9.04 The Administrative Agent's Liabilities............. 70
Section 9.05 The Administrative Agent as a Bank................. 71
Section 9.06 Bank Credit Decision............................... 71
Section 9.07 Indemnification.................................... 72
Section 9.08 Successor Administrative Agent..................... 72
ARTICLE X
CONSENT TO JURISDICTION
Section 10.01 Consent to Jurisdiction............................ 73
(table continued next page)
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(table continued
TABLE OF CONTENTS (continued)
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ARTICLE XI
MISCELLANEOUS
Section 11.01 APPLICABLE LAW..................................... 73
Section 11.02 Set-off............................................ 74
Section 11.03 Expenses........................................... 74
Section 11.04 Amendments......................................... 74
Section 11.05 Cumulative Rights and No Waiver.................... 75
Section 11.06 Notices............................................ 75
Section 11.07 Separability....................................... 76
Section 11.08 Assignments and Participations..................... 76
Section 11.09 WAIVER OF JURY TRIAL............................... 78
Section 11.10 Confidentiality.................................... 78
Section 11.11 Indemnity.......................................... 78
Section 11.12 Extension of Termination Dates; Removal of Banks;
Substitutions of Banks............................. 79
Section 11.13 Knowledge of the Company........................... 81
Section 11.14 Execution in Counterparts.......................... 81
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EXHIBITS AND SCHEDULES
----------------------
EXHIBIT A Form of Conversion/Continuance Request
EXHIBIT B Form of Pro Rata Loan Request
EXHIBIT C-1 Form of Competitive Loan Request
EXHIBIT C-2 Form of Notice to Banks
EXHIBIT C-3 Form of Competitive Bid
EXHIBIT C-4 Form of Competitive Bid Accept/Reject
Notice
EXHIBIT D-1 Form of Pro Rata Note
EXHIBIT D-2 Form of Competitive Note
EXHIBIT D-3 Form of Swing Line Note
EXHIBIT E Form of Swing Line Advance Request
EXHIBIT F-1 Form of Opinion of Latham & Watkins
EXHIBIT F-2 Form of Opinion of Michael R. Pfeiffer,
General Counsel of the Company
EXHIBIT G Form of Property Management Exception
Report
EXHIBIT H Form of Real Estate Investment Criteria
EXHIBIT I Subsidiary Guarantee
SCHEDULE 1 Commitments
SCHEDULE 5.01(a) Subsidiaries and Joint Ventures of the
Company
SCHEDULE 5.01(q) ERISA Liabilities
SCHEDULE 5.01(r) Intellectual Property
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REVOLVING CREDIT AGREEMENT
--------------------------
REVOLVING CREDIT AGREEMENT, dated as of December 14, 1999 (this
"Agreement"), among Realty Income Corporation, a Maryland corporation
(the "Company"), each of the banks identified on the signature pages
hereof (each, a "Bank" and, collectively, the "Banks") and The Bank of
New York, as Administrative Agent for the Banks (the "Administrative
Agent") and as the Swing Line Bank with respect to Swing Line Advances
(as defined below).
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, the Company has requested the Banks to lend up to
$200,000,000 to the Company on a revolving basis for the acquisition
of property in the ordinary course of the Company's business,
including related costs and expenses and for the payment of fees and
expenses incurred in connection with this Agreement and up to
$15,000,000 in Swing Line Advances (as defined herein) for the
purposes stated above and for working capital.
NOW, THEREFORE, the parties hereby agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions
-----------
(a) TERMS GENERALLY. The definitions ascribed to terms in this
Section 1.01 and elsewhere in this Agreement shall apply equally to
both the singular and plural forms of the terms defined. Whenever the
context may require, any pronoun shall include the corresponding
masculine, feminine and neuter forms. The words "include", "includes"
and "including" shall be deemed to be followed by the phrase "without
limitation". The words "hereby", "herein", "hereof", "hereunder" and
words of similar import refer to this Agreement as a whole (including
any exhibits and schedules hereto) and not merely to the specific
section, paragraph or clause in which such word appears. All
references herein to Articles, Sections, Exhibits and Schedules shall
be deemed references to Articles and Sections of, and Exhibits and
Schedules to, this Agreement unless the context shall otherwise
require. Except as otherwise expressly provided herein, all
references to "dollars" or "$" shall be deemed references to the
lawful money of the United States of America.
(b) ACCOUNTING TERMS. Except as otherwise expressly provided herein,
all terms of an accounting or financial nature shall be construed in
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accordance with GAAP, as in effect from time to time; provided,
however, that, for purposes of determining compliance with any
covenant set forth in Article VII which requires financial
computations, such terms shall be construed in accordance with GAAP as
in effect on the Effective Date applied on a basis consistent with the
construction thereof applied in preparing the Company's audited
financial statements referred to in Section 5.01(h). In the event
there shall occur a change in GAAP which but for the foregoing proviso
would affect the computation used to determine compliance with any
covenant set forth in Article VII which requires financial
computations, the Company and the Banks agree to negotiate in good
faith in an effort to agree upon an amendment to this Agreement that
will permit compliance with such covenant to be determined by
reference to GAAP as so changed while affording the Banks the
protection afforded by such covenant prior to such change (it being
understood, however, that such covenant shall remain in full force and
effect in accordance with its existing terms pending the execution by
the Company and the Banks of any such amendment).
(c) OTHER TERMS. The following terms shall have the meanings
ascribed to them below or in the Sections of this Agreement indicated
below:
"ABR Loans" shall mean Loans which bear interest at a rate based upon
the Base Rate and in the manner set forth in Section 3.02.
"Absolute Rate Competitive Loan" shall mean a Competitive Loan bearing
interest at the Competitive Rate in the manner set forth in Section
3.04.
"Administrative Agent" shall have the meaning given to such term in
the preamble of this Agreement and shall also include any successor
agent hereunder.
"Adverse Environmental Condition" shall mean any of the matters
referred to in clauses (i) or (ii) of the definition of Environmental
Claim.
"Affiliate" shall mean, with respect to any Person, any other Person
directly or indirectly controlling, controlled by, or under direct or
indirect common control with such Person. A Person shall be deemed to
control another Person if such first Person possesses, directly or
indirectly, the power to direct or cause the direction of the
management and policies of such other Person, whether through
ownership of stock, by contract or otherwise.
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"Applicable Margin" shall mean the margin set forth in the following
chart applicable to the Pricing Level then in effect:
Pricing Level Applicable LIBOR Margin
------------- -----------------------
I 0.875%
II 1.000%
III 1.125%
IV 1.225%
V 1.450%
"Pricing Level I" shall be applicable for so long as the Company's
Debt Rating is better than or equal to A-/A3; "Pricing Level II" shall
be applicable for so long as the Company's Debt Rating is lower than
A-/A3 but better than or equal to BBB+/Baal; "Pricing Level III" shall
be applicable for so long as the Company's Debt Rating is lower than
BBB+/Baal but better than or equal to BBB/Baa2; "Pricing Level IV"
shall be applicable for so long as the Company's Debt Rating is lower
than BBB/Baa2 but better than or equal to BBB-/Baa3; "Pricing Level V"
shall be applicable for so long as the Company's Debt Rating is lower
than BBB-/Baa3, or if the Company does not have a Debt Rating.
Changes in the applicable Pricing Level shall be effective as of the
first day of the calendar quarter following a change in the Company's
Debt Rating.
"Assignee" has the meaning ascribed to such term in Section 11.08(c).
"Available Commitment" shall mean (a) on any date prior to the
Termination Date, an amount equal to the remainder of (i) the Total
Commitment on such date minus (ii) the aggregate outstanding principal
amount of Loans and Swing Line Advances on such date and (b) on and
after the Termination Date, $0.
"Bank" shall have the meaning given to such term in the preamble of
this Agreement and shall also include any other financial institution
which pursuant to the provisions hereof becomes a party to this
Agreement.
"Base LIBOR" shall mean, with respect to any Eurodollar Loan for any
Interest Period, the rate appearing on Page 3750 of the Telerate
Service (or any successor or substitute page of such Service, or any
successor to or substitute for such Service, providing rate quotations
comparable to those currently provided on such page of such Service,
as determined by the Administrative Agent from time to time for
purposes of providing quotations of interest rates applicable to
dollar deposits in the London interbank market) at approximately 11:00
a.m., London time, two Business Days prior to the commencement of such
Interest Period, as the rate for dollar deposits with a maturity
comparable to such Interest Period. In the event that such rate does
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not appear on such Page 3750 (or any successor or substitute page, or
any successor to or substitute for such Service) at such time for any
reason, then "Base LIBOR" with respect to such Eurodollar Loan for
such Interest Period shall be the rate at which dollar deposits of
$5,000,000 and for a maturity comparable to such Interest Period are
offered by the principal London office of the Administrative Agent in
immediately available funds in the London interbank market at
approximately 11:00 a.m., London time, two Business Days prior to the
commencement of such Interest Period.
"Base Rate" shall mean a fluctuating interest rate per annum as shall
be in effect from time to time, which rate per annum shall on any day
be equal to the higher of:
(a) the rate of interest publicly announced by the Administrative
Agent from time to time as its prime commercial loan rate in
effect on such day; and
(b) the sum of (i) 1/2 of 1% per annum and (ii) the Federal Funds
Rate.
"Borrowing Date" shall mean the date set forth in each Loan Request as
the date upon which the Company desires to borrow Loans pursuant to
the terms of this Agreement.
"Business Day" shall mean (i) with respect to any ABR Loan or any
payment of the Facility Fee, any day except a Saturday, Sunday or
other day on which commercial banks in New York City or Los Angeles
are authorized by law to close and (ii) with respect to any Eurodollar
Loan, any day on which commercial banks are open for domestic and
international business (including dealings in U.S. dollar deposits) in
London, New York City and Los Angeles.
"Capital Lease" shall mean, with respect to any Person, any obligation
of such Person to pay rent or other amounts under a lease with respect
to any property (whether real, personal or mixed) acquired or leased
by such Person that is required to be accounted for as a liability on
a balance sheet of such Person in accordance with GAAP.
"Capital Lease Obligations" shall mean the obligation of any Person to
pay rent or other amounts under a Capital Lease.
"Change of Control" shall mean any person or group of Persons (within
the meaning of Section 13(d) or 14(d)(2) of the Securities Exchange
Act of 1934, as amended) who shall become the beneficial owner(s),
directly or indirectly, of capital stock of the Company representing
50% or more of the voting power of the Company or otherwise enabling
such Person or group of Persons to exercise effective control over the
management of the Company.
"Code" shall mean the Internal Revenue Code of 1986, as amended.
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"Commitment" of any Bank shall mean, in the case of each Bank (i)
prior to any such Bank's Termination Date, the amount set forth
opposite such Bank's name under the heading "Commitment" on Schedule 1
hereto, or set forth in the assignment agreement executed by such Bank
if it is not a Bank on the date hereof, as such amount may be adjusted
from time to time pursuant to assignments of such Bank and as such
amount may be reduced from time to time pursuant to Section 2.05 and
(ii) after such Bank's Termination Date, zero.
"Competitive Accept/Reject Notice" has the meaning ascribed to such
term in Section 2.08(d).
"Competitive Bid" means an offer by a Bank to make a Competitive Loan
pursuant to Section 2.08(c).
"Competitive Bid Rate" means, with respect to any Competitive Bid, (i)
in the case of a Eurodollar Competitive Loan, the sum of the
Competitive Margin plus LIBOR, and (ii) in the case of a Absolute Rate
Competitive Loan, the fixed rate of interest at which the Bank making
the Competitive Bid thereby offers to make a Competitive Loan.
"Competitive Loan" has the meaning ascribed to such term in Section
2.01.
"Competitive Loan Request" means a request for Competitive Bids made
pursuant to Section 2.08(b).
"Competitive Margin" means, with respect to any Eurodollar Competitive
Loan for any Interest Period, the margin (expressed as a percentage
rate per annum in the form of a decimal to no more than four decimal
places) to be added to or subtracted from LIBOR, in order to determine
the interest rate applicable to such Loan during such Interest Period,
as specified in the related Competitive Bid and the Competitive
Accept/Reject Notice.
"Competitive Notes" means, collectively, promissory notes of the
Borrower evidencing Competitive Loans, each substantially in the form
of Exhibit D-2.
"Competitive Rate" means, with respect to any Absolute Rate
Competitive Loan, the fixed rate of interest (expressed as a
percentage rate per annum in the form of a decimal to no more than
four decimal places) for such Loan, as specified in the related
Competitive Bid and Competitive Accept/Reject Notice.
"Compliance Date" shall mean each of the date of this Agreement, each
Borrowing Date, each Conversion Date and the date of each delivery by
the Company of a certificate requiring the Company to certify as to
the accuracy of the representations and warranties contained in
Article V.
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"Consolidated Annualized Base Rent" shall mean, in respect of any
fiscal quarter, (A) the product of (i) the monthly contractual base
rents at the end of such fiscal quarter multiplied by (ii) twelve plus
(B) the previous twelve month's historical percentage rents at such
time, determined on a consolidated basis for the Company and its
Subsidiaries.
"Consolidated Depreciation and Amortization" shall mean, at any date
of determination, "Depreciation and Amortization" or the similar item,
determined on a consolidated basis for the Company and its
Subsidiaries, as shown on the most recent consolidated statement of
income for the Company and its Subsidiaries which has been delivered
to the Administrative Agent pursuant to Section 7.01(a).
"Consolidated Funds from Operations" shall mean, for any period,
Consolidated Net Income, after dividends on preferred stock, excluding
gain or loss from debt restructurings or sales of properties, plus
provision for impairment losses, plus Consolidated Depreciation and
Amortization, and after adjustments for unconsolidated partnerships
and joint ventures, determined on a consolidated basis for the Company
and its Subsidiaries, as shown on the most recent consolidated
statement of cash flow for the Company and its Subsidiaries which has
been delivered to the Administrative Agent pursuant to Section
7.01(a).
"Consolidated Interest Expense" shall mean, for any period, total
interest expense (including that attributable to Capital Leases in
accordance with GAAP) of the Company and its Subsidiaries, determined
on a consolidated basis, in accordance with GAAP with respect to all
outstanding Indebtedness of the Company and its Subsidiaries,
including, without limitation, paid-in-kind (PIK) interest and all net
costs under Interest Rate Protection Agreements.
"Consolidated Net Income" shall mean, for any period, "Net Income" or
the similar item, determined on a consolidated basis for the Company
and its Subsidiaries, as shown on the most recent consolidated
statement of income for the Company and its Subsidiaries which has
been delivered to the Administrative Agent pursuant to Section
7.01(a).
"Consolidated Stockholders' Equity" shall mean, for any period, "Total
Stockholders' Equity" or the similar item, determined on a
consolidated basis for the Company and its subsidiaries, as shown on
the most recent consolidated balance sheet for the Company and its
Subsidiaries which has been delivered to the Administrative Agent
pursuant to Section 7.01(a).
"Consolidated Tangible Stockholders' Equity" shall mean Consolidated
Stockholders' Equity less all intangible assets of the Company and its
Subsidiaries. For purposes of the foregoing, "intangible assets"
means goodwill, patents, trade names, trademarks, copyrights,
Page 11
franchises, organization expenses and any other assets that are
properly classified as intangible assets in accordance with GAAP.
"Consolidated Total Assets" shall mean, at any date of determination,
"Total Assets" or the similar item, determined on a consolidated basis
for the Company and its Subsidiaries, as shown on the most recent
consolidated balance sheet for the Company and its Subsidiaries which
has been delivered to the Administrative Agent pursuant to Section
7.01(a).
"Consolidated Total Indebtedness" shall mean total Indebtedness,
determined on a consolidated basis for the Company and its
Subsidiaries, as shown on the most recent consolidated balance sheet
for the Company and its Subsidiaries which has been delivered to the
Administrative Agent pursuant to Section 7.01(a).
"Consolidated Total Liabilities" shall mean, at any date of
determination, "Total Liabilities" or the similar item, determined on
a consolidated basis for the Company and its Subsidiaries, as shown on
the most recent consolidated balance sheet for the Company and its
Subsidiaries which has been delivered to the Administrative Agent
pursuant to Section 7.01(a).
"Conversion/Continuance Date" shall mean the date on which a
conversion of interest rates on outstanding Loans, pursuant to a
Conversion/Continuance Request, shall take effect.
"Conversion/Continuance Request" shall mean a request by the Company
to convert or continue the interest rate on all or portions of
outstanding Loans pursuant to the terms hereof, which shall be
substantially in the form of Exhibit A and shall specify, with respect
to such outstanding Loans, (i) the requested Conversion/Continuance
Date, which shall be not less than three Business Days after the date
of such Conversion/Continuance Request, (ii) the aggregate amount of
the Loans, from and after the Conversion/Continuance Date, which are
to bear interest as ABR Loans or Eurodollar Loans and (iii) if any
Loans are Eurodollar Loans, the term of the Interest Periods therefor,
if any.
"Covered Tax" means any Tax that is not an Excluded Tax.
"Credit Documents" shall mean this Agreement and the Notes.
"Debt Rating" shall mean the highest rating published by at least two
of the three Rating Agencies with respect to the senior unsecured
long-term debt of the Company, provided, that if no two Rating
Agencies have published the same rating with respect to the Company's
senior unsecured debt, the Debt Rating shall be the rating that is at
the middle of the three published ratings.
"Default" shall mean any event or circumstance which, with the giving
of notice or the passage of time, or both, would become an Event of
Default.
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"Effective Date" shall have the meaning ascribed to such term in
Section 6.01.
"Environmental Claim" shall mean any notice, request for information,
action, claim, order, proceeding, demand or direction (conditional or
otherwise) based on, relating to or arising out of (i) any violation
of any Environmental Law by the Company, any person acting on behalf
of the Company or any subsidiary of the Company, or (ii) any
liabilities under any Environmental Law arising out of or otherwise in
respect of any act, omission, event, condition or circumstance
existing or occurring in connection with the Company and its
Subsidiaries, including without limitation liabilities relating to the
release of hazardous substances (whether on-site or off-site), any
claim by any third party (including, without limitation, tort suits
for personal or bodily injury, tangible or intangible property damage,
damage to the environment, nuisance and injunctive relief), fines,
penalties or restrictions, or the transportation, storage, treatment
or disposal of any Hazardous Substances.
"Environmental Law" means (i) any applicable federal, state, foreign
and local law, statute, ordinance, rule, regulation, code, license,
permit, authorization, approval, consent, legal doctrine, order,
judgment, decree, injunction, requirement or agreement with any
governmental entity, relating to (x) the protection, preservation or
restoration of the environment, (including, without limitation, air,
water vapor, surface water, groundwater, drinking water supply,
surface land, subsurface land, plant and animal life or any other
natural resource), or to human health or safety, or (y) the exposure
to, or the use, storage, recycling, treatment, generation,
transportation, processing, handling, labeling, production, release or
disposal of Hazardous Substances, in each case as amended and as now
or hereafter in effect. The term Environmental Law includes, without
limitation, the federal Comprehensive Environmental Response
Compensation and Liability Act of 1980, the Superfund Amendments and
Reauthorization Act, the federal Water Pollution Control Act of 1972,
the federal Clean Air Act, the federal Clean Water Act, the federal
Resource Conservation and Recovery Act of 1976 (including the
Hazardous and Solid Waste Amendments thereto), the federal Solid Waste
Disposal Act and the federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act and the Federal
Occupational Safety and Health Act of 1970, each as amended and as now
or hereafter in effect (collectively, "Environmental Ordinances"), and
(ii) any common law or equitable doctrine (including, without
limitation, injunctive relief and tort doctrines such as negligence,
nuisance, trespass and strict liability) that may impose liability or
obligations for injuries or damages due to, or threatened as a result
of, the presence of or exposure to any Hazardous Substance.
"ERISA" shall mean the Employee Retirement Income Security Act of
1974, as amended from time to time.
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"ERISA Affiliate" shall mean a corporation, partnership or other
entity which is considered one employer with the Company under Section
4001 of ERISA or Section 414 (b), (c), (m) or (o) of the Code.
"Eurodollar Competitive Loan" means a Competitive Loan that bears
interest by reference to LIBOR and in the manner set forth in Section
3.03.
"Eurodollar Loans" means, collectively, Eurodollar Pro Rata Loans and
Eurodollar Competitive Loans.
"Eurodollar Pro Rata Loans" shall mean Pro Rata Loans which bear
interest at a rate based upon Base LIBOR and in the manner set forth
in Section 3.03.
"Eurodollar Reserve Percentage" shall mean 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
(including any marginal, supplemental or emergency reserve
requirements) for a member bank of the Federal Reserve System in New
York City with deposits exceeding one billion dollars in respect of
eurocurrency funding liabilities. LIBOR shall be adjusted
automatically on and as of the effective date of any change in the
Eurodollar Reserve Percentage.
"Event of Default" shall mean any of the events described in Section
8.01.
"Excluded Asset Sales" shall mean, in respect of each fiscal year, the
sale, lease (not entered into in the ordinary course of business),
transfer or disposal during such year of assets, the aggregate
proceeds of which, in one or more transactions, are less than
$50,000,000.
"Excluded Tax" means, in respect of any Bank, Participant, Assignee or
the Administrative Agent, as the case may be, any of the following
taxes, levies, imposts, duties, deductions, withholdings or charges,
and all liabilities with respect thereto: (i) Taxes imposed on the net
income of a Bank, the Administrative Agent, Participant or Assignee
(including without limitation branch profits taxes, minimum taxes and
taxes computed under alternative methods, at least one of which is
based on net income (collectively referred to as "net income taxes")
by (A) the jurisdiction under the laws of which such Bank, the
Administrative Agent, Participant or Assignee is organized or any
political subdivision thereof, (B) the jurisdiction of such Bank's,
Participant's, Assignee's or the Administrative Agent's applicable
lending office or any political subdivision thereof or (C) any
jurisdiction in which the Bank, the Administrative Agent, Participant
or Assignee is doing business (other than solely as a result of
actions contemplated or required by this Agreement); (ii) any Taxes to
the extent that they are in effect and would apply to a payment to
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such Bank or the Administrative Agent, as applicable, as of the
Closing Date, or as of the date such Person becomes a Bank, in the
case of any Participant or Assignee pursuant to Section 11.08; (iii)
any Taxes resulting from a failure to take the actions, if any,
required by subsection 4.04(a)(iv); (iv) any Taxes to the extent of
any credit or other Tax benefit which, in the reasonable good faith
judgment of such Bank, Participant, Assignee or the Administrative
Agent, as the case may be, is available to such Bank, Participant,
Assignee or the Administrative Agent, as applicable, as a result
thereof and is allocable to the transactions contemplated by this
Agreement; (v) any Taxes imposed on or measured by the overall net
income of any Bank by the United States of America or any political
subdivision or taxing authority thereof or therein; or (vi) any Taxes
that would not have been imposed but for the failure by the
Administrative Agent or such Bank, Participant or Assignee as
applicable to provide and keep current any certification or other
documentation required to qualify for an exemption from or reduced
rate of any Tax.
"Facility Fee" shall have the meaning ascribed to such term in Section
2.04(a).
"Facility Fee Rate" with respect to any Facility Fee payment shall
mean the facility fee rate set forth in the following chart applicable
to the Pricing Level (determined as set forth under "Applicable
Margin" above) in effect on the date on which such Facility Fee
payment is due:
Pricing Level Facility Fee
------------- ------------
I 0.125%
II 0.150%
III 0.175%
IV 0.225%
V 0.300%
"Federal Funds Rate" for any day shall mean the rate on such day for
Federal Funds as published by the Board of Governors of the Federal
Reserve System in "Statistical Release H. 15 (519), Selected Interest
Rates", or any successor publication, under the heading "Federal Funds
(Effective)". In the event that such rate or such publication is not
published with respect to such day, the Federal Funds Rate on such day
shall be the "Federal Funds/Effective Rate" as posted by the Federal
Reserve Bank of New York for that day in its publication "Composite
Closing Quotations for U.S. Government Securities". The Federal Funds
Rate for Saturdays, Sundays and any other day on which the Federal
Reserve Bank of New York is closed shall be the Federal Funds Rate as
in effect for the next preceding day for which such rates are
published or posted, as the case may be.
Page 15
"GAAP" shall mean generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board
of the American Institute of Certified Public Accountants and
statements and pronouncements of the Financial Accounting Standards
Board or in such other statements by such other entities as may be
approved by a significant segment of the accounting profession, which
are applicable to the circumstances as of the date of determination.
"Guarantee" by any person shall mean any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect
of guaranteeing any Indebtedness of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, and including
any obligation of such Person, (i) to purchase or pay (or advance or
supply funds for the purchase or payment of) such Indebtedness or to
purchase (or to advance or supply funds for the purchase of) any
security for the payment of such Indebtedness, (ii) to purchase
property, securities or services for the purpose of assuring the
holder of such Indebtedness of the payment of such Indebtedness, or
(iii) to maintain working capital, equity capital or other financial
statement condition or liquidity of the primary obligor so as to
enable the primary obligor to pay such Indebtedness (and "Guaranteed",
"Guaranteeing" and "Guarantor" shall have meanings correlative to the
foregoing); provided that the term "Guarantee" shall not include
endorsements for collection or deposit in the ordinary course of
business.
"Governmental Authority" shall mean any nation or government, any
state or other political subdivision thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Hazardous Substance" means any substance presently or hereafter
listed, defined, designated or classified as hazardous, toxic,
radioactive or dangerous, or otherwise regulated, under any
Environmental Ordinance, whether by type or by quantity, including any
substance containing any such substance as a component. Hazardous
Substance includes, without limitation, any toxic waste, pollutant,
contaminant, hazardous substance, toxic substance, hazardous waste,
special waste or petroleum or any derivative or by-product thereof,
radon, radioactive material, asbestos, asbestos containing material,
urea formaldehyde foam insulation, lead and polychlorinated biphenyl.
"Indebtedness" of any Person shall mean, without duplication, (a) all
indebtedness of such Person for borrowed money or for the deferred
purchase price of property or services (including all obligations,
contingent or otherwise, of such Person in connection with letter of
credit facilities, bankers' acceptance facilities, Interest Rate
Protection Agreements or other similar facilities including currency
swaps) other than indebtedness to trade creditors and service
providers incurred in the ordinary course of business; (b) all
obligations of such Person evidenced by bonds, notes, debentures or
other similar instruments; (c) all indebtedness created or arising
Page 16
under any conditional sale or other title retention agreement with
respect to property acquired by such Person (even though the rights
and remedies of the seller or lender under such agreement in the event
of default are limited to repossession or sale of such property); (d)
all Capital Lease obligations of such Person; (e) that portion of the
Indebtedness of any joint venture of which such Person is a joint
venturer that bears the same proportion to the total Indebtedness of
such joint venture as such Person's equity interest in such joint
venture (however denominated) bears to the total equity of such joint
venture, expressed as a percentage in the form of a decimal to no more
than four decimal places; (f) without duplication of clause (e) above,
all Indebtedness of unconsolidated joint venturers in which such
Person is a joint venturer to the extent recourse may be had to such
Person or its assets; (g) all obligations of such Person in respect of
any "forward equity purchase", or other arrangement, however
characterized, pursuant to which such Person makes a forward purchase
of its own capital stock from a counterparty and which is settled in
such capital stock, and having such other terms as may be agreed, and
having a value, for purposes hereof, equal to its mark-to-market
valuation on any date of determination; (h) all Indebtedness referred
to in clauses (a), (b), (c), (d), (e), (f) or (g) above secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien upon or in
property (including accounts and contract rights) owned by such
Person, even though such Person has not assumed or become liable for
the payment of such Indebtedness; (i) all preferred stock issued by
such Person which is redeemable, prior to the full satisfaction of the
Company's obligations under the Credit Documents (including repayment
in full of the Loans and all interest accrued thereon), other than at
the option of such Person, valued at the greater of its voluntary or
involuntary liquidation preference plus accumulated and unpaid
dividends and (j) all Indebtedness of others Guaranteed by such
Person. For purposes of this Agreement, the amount of any
Indebtedness under clauses (c) and (h) shall be the lesser of (x) the
principal amount of such Indebtedness and (y) the value of the
property subject to the Lien referred to therein. For purposes of
this Agreement tenant security deposits shall not be deemed to be
Indebtedness.
"Initial Loan" shall mean the first Loan which is made pursuant to the
terms hereof.
"Interest Period" shall mean each one, two, three or six-month period
selected by the Company in a Pro Rata Loan Request or Competitive Loan
Request, or, if no Eurodollar Loans are then outstanding, at the time
of a Conversion/Continuance Request, or pursuant to Section 3.03
hereof and commencing on the date the relevant loan is made or the
last day of the current Interest Period, as the case may be.
"Interest Rate Protection Agreements" shall mean any interest rate
swap, collar or cap agreement or similar arrangement used by a Person
to fix or cap a floating rate of interest on Indebtedness to a
negotiated maximum rate or amount.
Page 17
"Leverage Ratio" shall mean the ratio of Consolidated Total
Indebtedness to Consolidated Tangible Stockholders' Equity.
"Lien" shall mean, with respect to any asset, any mortgage, deed of
trust, lien, pledge, encumbrance, charge or security interest in or on
such asset.
"LIBOR" shall mean with respect to any Interest Period the rate per
annum determined pursuant to the following formula:
Base LIBOR
---------------------------------
LIBOR = (1-Eurodollar Reserve Percentage)
"Loan Request" shall mean either a Pro Rata Loan Request or a
Competitive Loan Request.
"Loans" shall mean, collectively, Pro Rata Loans and Competitive Loans
outstanding hereunder from time to time but shall not include Swing
Line Advances.
"Material Adverse Change" shall mean a material adverse change in the
business, properties, condition (financial or otherwise) or operations
of the Company and its Subsidiaries, taken as a whole since
December 31, 1998.
"Material Adverse Effect" shall mean (i) any material adverse effect
on the business, properties, condition (financial or otherwise) or
operations of the Company and its Subsidiaries taken as a whole, from
and after the date of any determination, (ii) any material adverse
effect on the ability of the Company to perform its obligations
hereunder and under the Credit Documents, or (iii) any adverse effect
on the legality, validity, binding effect or enforceability of this
Agreement or the Notes.
"Maturity Date" means, with respect to a Competitive Loan, the date
for repayment of such Competitive Loan, which date shall be not less
than seven days after the Borrowing Date and not more than (i) 180
days after the Borrowing Date, in the case of an Absolute Rate
Competitive Loan, or (ii) six months after the Borrowing Date, in the
case of a Eurodollar Competitive Loan, and in any event shall not be
later than the Termination Date to be in effect on the Borrowing Date.
"Net Cash Proceeds" shall mean (i) when used in respect of any sale or
disposition of assets of the Company or any Subsidiary, the gross cash
proceeds received by the Company or the relevant Subsidiary from such
sale or disposition, less: (x) the costs of sale, including payment
of the outstanding principal amount of, and premium or penalty, if
any, and interest on, any Indebtedness which is paid or required to be
paid as a result of such sale, all legal, accounting, title and
recording tax expenses, commissions and other fees and expenses paid
or to be paid in cash solely as a result of such sale, and all other
Page 18
federal, state, local and foreign taxes paid or payable in connection
therewith; (y) the portion of gross cash proceeds from such sale or
disposal which the Company must distribute to its stockholders in
order to avoid the imposition of any income or excise tax with respect
to a taxable gain (if any) associated with such sale or disposition;
and (z) the portion of gross cash proceeds from such sale or disposal
by any Subsidiary which are distributed pro rata to stockholders or
other equity holders of such Subsidiary other than the Company; (ii)
when used with respect to any loss, casualty, fire damage, theft,
destruction or condemnation of any capital asset of the Company or any
Subsidiary, the gross cash proceeds received by the Company or the
relevant Subsidiary under any insurance policy or any award or
compensation received, as the case may be, in each case as a result of
any such loss, casualty, fire damage, theft, destruction or
condemnation, net of all legal, accounting and other fees and expenses
paid or to be paid in cash as a result of such loss, casualty, fire
damage, theft, destruction or condemnation, and all other federal,
state, local and foreign taxes paid or payable in connection
therewith, less the portion of gross cash proceeds from such award or
compensation which the Company must distribute to its stockholders in
order to avoid the imposition of any income or excise tax with respect
to a taxable gain (if any) associated with such award or compensation,
provided that such award or compensation shall not be deemed to be Net
Cash Proceeds if such proceeds have been reinvested in or have been
committed to be reinvested in, or in replacement of, the lost,
damaged, stolen, destroyed or condemned property within twelve months
from the date of such award or compensation, and less the portion of
gross cash proceeds from such award or compensation which are
distributed pro rata to stockholders or other equity holders of such
Subsidiary other than the Company; and (iii) when used in respect of
the issuance, assumption or incurrence of Specified Additional
Indebtedness by the Company or any of its Subsidiaries, the gross cash
proceeds received by the Company or the relevant Subsidiary from such
issuance, assumption or incurrence, less the costs of issuance,
assumption or incurrence. Net Cash Proceeds shall equal $0 if it
would otherwise be a negative number hereunder.
"Notes" means the Pro Rata Notes, the Competitive Notes and the Swing
Line Note.
"Participant" shall have the meaning ascribed to such term in Section
11.08(b).
"PBGC" shall mean the Pension Benefit Guaranty Corporation or any
successor thereto.
"Permitted Encumbrances" shall mean (i) Liens for taxes not delinquent
or being contested in good faith and by appropriate proceedings and
for which adequate reserves (in accordance with GAAP) are being
maintained, (ii) deposits or pledges to secure obligations under
workers' compensation, social security or similar laws, or under
unemployment insurance, (iii) deposits or pledges to secure bids,
Page 19
tenders, contracts (other than contracts for the payment of money),
leases (other than Capital Leases), statutory obligations, surety and
appeal bonds and other obligations of like nature arising in the
ordinary course of business, (iv) mechanics', workers', materialmen's
or other like Liens arising in the ordinary course of business with
respect to obligations which are not due or which are being contested
in good faith, (v) minor imperfections of title on real estate,
provided such imperfections do not render title unmarketable, (vi) all
other Liens existing on the date of this Agreement and disclosed to
the Banks in writing prior to the date hereof (including in the notes
of the Company's financial statements), (vii) leases or subleases
granted to others in the ordinary course of business of the Company
and its Subsidiaries, (viii) any interest or title of a lessor in the
property subject to any Capital Lease or operating lease, (ix) Liens
arising from filing Uniform Commercial Code financing statements
regarding leases or sub-leases, (x) any attachment or judgment Lien
arising from a judgment or order against the Company or any Subsidiary
that does not give rise to a Default or an Event of Default, provided
that such Lien is not in place for more than sixty days or has been
stayed, (xi) Liens encumbering customary initial deposits and margin
deposits, and other Liens securing Indebtedness under Interest Rate
Protection Agreements that are within the general parameters customary
in the industry and incurred in the ordinary course of business, (xii)
any option, contract or other agreement to sell an asset provided such
sale is otherwise permitted by this Agreement, (xiii) any statutory
right of a lender to which the Company or a Subsidiary may be indebted
to offset against, or appropriate and apply to the payment of, such
Indebtedness any and all balances, credits, deposits, accounts or
monies of the Company or a Subsidiary with or held by such lender,
(xiv) any pledge or deposit of cash or property in conjunction with
obtaining bonds or letters of credit required to engage in
constructing on-site and off-site improvements required by
municipalities or other governmental authorities in the ordinary
course of business of the Company and its Subsidiaries, (xv) Liens in
favor of all of the Banks collectively, and (xvi) purchase money
security interests in personal property, with such encumbrances, in
the aggregate, not to exceed $3,500,000.
"Permitted Subsidiary Indebtedness" shall have the meaning ascribed to
such term in Section 7.02(a).
"Person" shall mean any individual, sole proprietorship, partnership,
joint venture, trust, unincorporated organization, association,
corporation, limited liability company, institution, public benefit
corporation, entity or government (whether Federal, state, county,
city, municipal or otherwise, including any instrumentality, division,
agency, body or department thereof).
"Plan" shall mean an employee benefit plan as defined in Section 3(3)
of ERISA which is maintained or contributed to by the Company or an
ERISA Affiliate while such entity is an ERISA Affiliate.
Page 20
"Pro Rata Loan Request" shall mean a request by the Company to borrow
Pro Rata Loans pursuant to the terms hereof, which shall be
substantially in the form of Exhibit B and shall specify, with respect
to such requested Loans, (i) the requested Borrowing Date, (ii) the
aggregate amount of Pro Rata Loans which the Company desires to borrow
on such date, (iii) whether such requested Loans are to bear interest
as ABR Loans or Eurodollar Loans, and (iv) if the requested Loans are
to bear interest as Eurodollar Loans the requested term of the
Interest Period therefor.
"Pro Rata Loans" shall have the meaning ascribed to such term in
Section 2.01.
"Pro Rata Notes" shall mean, collectively, the promissory notes of the
Company evidencing Pro Rata Loans, each substantially in the form of
Exhibit D-1.
"Pro Rata Share" shall mean, with respect to any Bank, the proportion
of such Bank's Commitment to the Total Commitment of all the Banks or,
if the Total Commitment shall have been canceled or reduced to $0 or
expired, the proportion of such Bank's then outstanding Loans to the
aggregate amount of Loans then outstanding.
"Rating Agency" shall mean Moody's Investors Service, Inc., Standard &
Poor's Rating Services, a division of the McGraw Hill Companies, Inc.,
or Duff & Phelps Credit Rating Co.
"Real Estate Development Project" shall mean any real estate
development activity not related to current income-producing
properties, including, without limitation, the development of
undeveloped land.
"Real Estate Investment Criteria" shall mean the Real Estate
Investment Criteria established by the Company's Board of Directors as
amended, restated, supplemented or revised from time to time, the
current version (as of the date hereof) of which are attached hereto
as Exhibit H.
"Reference Amount", with respect to any Bank and Interest Period,
shall mean the amount of that Bank's Eurodollar Loan scheduled to be
outstanding during that Interest Period (i) without taking into
account any reduction in the amount of any Bank's Loan through any
assignment or transfer and (ii) rounded up to the nearest integral
multiple of $1,000,000.
"REIT" shall have the meaning ascribed to such term in Section
5.01(w).
"Required Banks" shall mean at any date Banks having at least 60% of
the Total Commitment, or if the Total Commitment has been canceled or
terminated, holding Notes evidencing at least 60% of the aggregate
unpaid principal amount of the Loans, provided that for purposes of
Page 21
this definition, the Commitment of any Bank shall be deemed reduced by
the principal amount of any Pro Rata Loan which such Bank is obligated
to advance pursuant to Section 2.02 hereof but which fails to do so.
"SIC Code" shall mean the Standard Industrial Classification Code,
published by the United States Office of Management and Budget.
"Single-Employer Plan" shall mean any Plan that is a single-employer
plan as defined in Section 4001(a)(15) of ERISA which is subject to
the provisions of Title IV of ERISA.
"Solvent" shall mean, when used with respect to any Person, that:
(a) at the date of determination, the present fair salable value of
such Person's assets is in excess of the total amount of such
Person's liabilities;
(b) at the date of determination, such Person is able to pay its
debts as they become due; and
(c) such Person does not have unreasonably small capital to carry
on such Person's business as theretofore operated and all
businesses in which such Person then is about to engage.
"Specified Additional Indebtedness" of any Person shall mean
Indebtedness which is not outstanding as of the date hereof, excluding
(i) Indebtedness to the Administrative Agent, the Swing Line Bank, or
the Banks hereunder and under the Notes, (ii) Indebtedness incurred in
connection with the payment of any dividend necessary for the Company
to maintain its qualification as a REIT, (iii) up to $10,000,000
principal amount of additional unsecured Indebtedness that matures and
becomes due and payable on a date not more than one year from the date
such Indebtedness was incurred by the Company and (iv) Permitted
Subsidiary Indebtedness.
"Subsidiary" shall mean any Person of which or in which the Company
and its other Subsidiaries own directly or indirectly 50% or more of:
(a) the combined voting power of all classes of stock having
general voting power under ordinary circumstances to elect a
majority of the board of directors of such Person, if it is a
corporation,
(b) the capital interest or profits interest of such Person, if it
is a partnership, joint venture or similar entity, or a
corporation whose capital stock so owned are non-voting, or
(c) the beneficial interest of such Person, if it is a trust,
association or other unincorporated organization;
provided, however, that "Subsidiary" shall not include any such entity
that the Company does not control. For the purpose of this
Page 22
definition, the term "control" shall mean the possession, directly or
indirectly, of the power to direct or cause the direction of the
management and policies of a person, whether through the ownership of
voting equity interests, by contract or otherwise.
"Subsidiary Guaranty" shall mean a guaranty of a Subsidiary furnished
pursuant to Section 7.02(e)(vii), in the form of Exhibit I hereto.
"Swing Line Advance" means an advance made by the Swing Line Bank
pursuant to Section 2.10.
"Swing Line Advance Request" shall have the meaning ascribed to such
term in Section 2.10(d) hereof.
"Swing Line Bank" means The Bank of New York, or any successor to the
duties, obligations and rights of The Bank of New York, in its
capacity as the bank making Swing Line Advances hereunder.
"Swing Line Borrowing" means a borrowing consisting of a Swing Line
Advance made by the Swing Line Bank.
"Swing Line Facility" shall have the meaning ascribed to such term in
Section 2.10(a) hereof.
"Swing Line Note" shall mean the promissory note of the Company in the
form of Exhibit D-3.
"Tax" means any present or future tax, levy, impost, duty,
governmental fee, deduction, withholding or charge, and all
liabilities with respect thereto of any nature and whatever called, by
whomsoever, on whomsoever and wherever imposed, levied, collected,
withheld or assessed.
"Termination Date" shall mean, with respect to any Bank, the earliest
to occur of (i) December 30, 2002 or such later date as may be agreed
to by such Bank pursuant to Section 11.12, (ii) the date on which the
obligations of the Banks to make loans hereunder shall terminate
pursuant to Section 8.01 or the Commitments shall be reduced to zero
pursuant to Section 2.05, and (iii) the date specified as such Bank's
Termination Date pursuant to Section 11.12, or, if in any case (other
than clause (ii) above) such day is not a Business Day, the next
succeeding Business Day; in all cases, subject to the provisions of
Section 11.12(d).
"Total Commitment" shall mean the aggregate Commitments of all the
Banks.
"Unmatured Surviving Obligations" shall mean, as of any date, any
obligations under this Agreement which are contingent and unliquidated
and not then due and payable on such date and which pursuant to the
provisions of this Agreement survive termination of this Agreement.
Page 23
"Wholly owned Subsidiary" shall mean any Subsidiary all the equity
interests of which (other than directors' qualifying shares, if a
corporation) at the time are owned directly or indirectly by the
Company and/or one or more Wholly owned Subsidiaries of the Company.
"Year 2000 Issue" means failure of computer software, hardware and
firmware systems and equipment containing or relying on embedded
computer chips to properly receive, transmit, process, manipulate,
store, retrieve, retransmit, or in any other way utilize data or
information due to the occurrence of the year 2000 or the inclusion of
dates on or after January 1, 2000.
ARTICLE II
THE LOANS
Section 2.01 The Loans.
----------
Prior to the Termination Date, and subject to the terms and conditions
of this Agreement, upon the request of the Company, and upon the
satisfaction by the Company or the waiver by each of the Banks of each
of the conditions precedent contained in Section 6.02, each of the
Banks, severally and not jointly with the other Banks, agrees to make
revolving credit loans (collectively, "Pro Rata Loans") and, to the
extent offered by such Bank and accepted by the Company, competitive
rate loans (collectively, "Competitive Loans" and, together with the
Pro Rata Loans, the "Loans") to the Company from time to time in an
aggregate principal amount at any one time outstanding not to exceed
its Commitment; provided, however, that the sum of (i) aggregate
outstanding Loans and (ii) aggregate outstanding Swing Line Advances
may not exceed the Total Commitment.
Section 2.02 Procedure for Pro Rata Loans.
---------------------------
(a) The Company may borrow Pro Rata Loans by delivering a written Pro
Rata Loan Request to the Administrative Agent on or before 5:00 P.M.,
New York time, one Business Day prior to the requested Borrowing Date
therefor, in the case of ABR Loans, or on the date not less than three
Business Days prior to the requested Borrowing Date therefor, in the
case of Eurodollar Pro Rata Loans. ABR Loans shall be in the minimum
aggregate amount of $1,000,000 or in integral multiples of $100,000 in
excess thereof. Eurodollar Pro Rata Loans shall be in the minimum
aggregate amount of $5,000,000 or in integral multiples of $100,000 in
excess thereof; provided, however, that Eurodollar Pro Rata Loans used
to pay Swing Line Advances may be in a minimum aggregate amount of
$2,500,000 or in integral multiples of $100,000 in excess thereof.
Page 24
(b) Upon receipt of any Pro Rata Loan Request from the Company, the
Administrative Agent shall forthwith give notice to each Bank of the
substance thereof. Not later than 2:00 P.M., New York time, on the
Borrowing Date specified in such Pro Rata Loan Request, each Bank
shall make available to the Administrative Agent in immediately
available funds at the office of the Administrative Agent at its
address set forth on the signature pages hereof, such Bank's Pro Rata
Share of the requested Pro Rata Loans.
(c) Upon receipt by the Administrative Agent of funds and
satisfaction by the Company or waiver by each of the Banks of each of
the conditions precedent contained in Section 6.02, the Administrative
Agent shall disburse to the Company on the requested Borrowing Date
the Pro Rata Loans requested in such Pro Rata Loan Request. The
Administrative Agent may, but shall not be required to, advance on
behalf of any Bank such Bank's Pro Rata Share of the Pro Rata Loans on
a Borrowing Date unless such Bank shall have notified the
Administrative Agent prior to such Borrowing Date that it does not
intend to make available its Pro Rata Share of such Loans on such date
(it being understood that no action or inaction by the Administrative
Agent regarding such an advance shall affect the rights of the Company
with respect to any non-performing Bank). If the Administrative Agent
makes such advance, the Administrative Agent shall be entitled to
recover such amount on demand from the Bank on whose behalf such
advance was made, and if such Bank does not pay the Administrative
Agent the amount of such advance on demand, the Company shall promptly
repay such amount to the Administrative Agent. Until such amount is
repaid to the Administrative Agent by such Bank or the Company, such
advance shall be deemed for all purposes to be a Pro Rata Loan made by
the Administrative Agent. The Administrative Agent shall be entitled
to recover from the Bank or the Company, as the case may be, interest
on the amount advanced by it for each day from the Borrowing Date
therefor until repaid to the Administrative Agent, at a rate per annum
equal to (i) in the case of the Bank, the Federal Funds Rate, for the
three-day period beginning on the Borrowing Date, and the applicable
rate on the Pro Rata Loans made on the Borrowing Date for the period
beginning on the fourth day after the Borrowing Date, and (ii) in the
case of the Company, the applicable rate on the Pro Rata Loans made on
the Borrowing Date.
(d) In lieu of delivering the written notice described above, the
Company may give the Administrative Agent telephonic notice of any
request for borrowing by the time required under this Section 2.02;
provided that such telephonic notice shall be confirmed by delivery of
a written notice to the Administrative Agent promptly but in no event
later than 4:00 P.M., New York City time, on the date of such
telephonic notice.
Page 25
Section 2.03 Pro Rata Notes.
---------------
The Company's obligation to repay the Pro Rata Loans shall be
evidenced by Pro Rata Notes, one such Pro Rata Note payable to the
order of each Bank. The Pro Rata Note of each Bank shall (i) be in
the principal amount of such Bank's Commitment, (ii) be dated the date
of the initial Loan and (iii) be stated to mature on the Termination
Date as such date may be extended hereunder and bear interest from its
date until maturity on the principal balance (from time to time
outstanding thereunder) payable at the rates and in the manner
provided herein. Each Bank is authorized to indicate upon the grid
attached to its Pro Rata Note all Pro Rata Loans made by it pursuant
to this Agreement, interest elections and payments of principal and
interest thereon. Such notations shall be presumptive as to the
aggregate unpaid principal amount of all Pro Rata Loans made by such
Bank, and interest due thereon, but the failure by any Bank to make
such notations or the inaccuracy or incompleteness of any such
notations shall not affect the obligations of the Company hereunder or
under the Pro Rata Notes.
Section 2.04 Certain Fees.
-------------
(a) The Company shall pay to the Administrative Agent for the
accounts of the Banks a fee (the "Facility Fee") equal to the Facility
Fee Rate per annum (calculated on the basis of a 360-day year for the
actual number of days involved) on the daily average amount of the
Total Commitment, regardless of usage (excluding the amount of any
canceled or reduced portion of the Commitment for which the Facility
Fee was paid in connection with such cancellation or reduction
pursuant to Section 2.05 hereof) during the quarter with respect to
which such Facility Fee is being paid. Such Facility Fee shall be
payable in arrears on the last Business Day of each calendar quarter,
commencing on the first such date after the date hereof, on any date
that the Total Commitment is canceled or reduced pursuant to Section
2.05 (but only with respect to the amount of such cancellation or
reduction) and on the Termination Date.
(b) The Company shall pay to the Administrative Agent for its own
account such fees as have been or may hereinafter be agreed to between
the Administrative Agent and the Company, in the amounts and at the
times agreed upon.
(c) On the Effective Date the Company shall pay to the Administrative
Agent for the account of each of the Banks (other than The Bank of New
York) such fees as have been or may hereinafter be agreed to between
the Administrative Agent and the Company, in the amounts and at the
times agreed upon.
Page 26
Section 2.05 Cancellation or Reduction of the Commitment.
--------------------------------------------
The Company shall have the right, upon not less than three Business
Days' written notice to the Administrative Agent and upon payment of
the Facility Fees relating to the amount of the Total Commitment
canceled or reduced which have accrued through the date of such
cancellation or reduction, with respect to the amount of the
cancellation or reduction, to cancel the Total Commitment in full or
to reduce the amount thereof; provided, however, that the Total
Commitment may not be canceled so long as any Loan or Swing Line
Advance remains outstanding; and provided, further, that the amount of
any partial reduction in the Total Commitment shall not exceed the
remainder of (i) the Total Commitment on such date minus (ii) the
aggregate outstanding principal amount of Loans and Swing Line
Advances on such date. Partial reductions of the Total Commitment
shall be in the amount of $5,000,000 or in integral multiples of
$1,000,000 in excess thereof (or, if the aggregate outstanding amount
of Loans is less than $5,000,000, then all of such lesser amount).
All such cancellations or reductions shall be permanent.
Section 2.06 Optional Prepayment.
--------------------
The Company shall have the right, on not less than three Business
Days' written notice to the Administrative Agent in the case of
Eurodollar Pro Rata Loans, and upon such written notice delivered by
11:00 A.M. New York City time the day of the proposed prepayment to
the Administrative Agent in the case of ABR Loans or Swing Line
Advances, to prepay Pro Rata Loans or Swing Line Advances bearing
interest on the same basis and having the same Interest Periods, if
any, in whole or in part, without premium or penalty, in the aggregate
principal amount of $1,000,000 ($100,000 in the case of Swing Line
Advances) or in integral multiples of $100,000 in excess thereof (or,
if the outstanding aggregate amount of such Loan or Swing Line Advance
is less than $1,000,000 or $100,000, respectively, then all of such
lesser amount), together with accrued interest on the principal being
prepaid to the date of prepayment and, in the case of Eurodollar
Loans, the amounts required by Section 4.03. Subject to the terms and
conditions hereof, prepaid Loans may be reborrowed.
Section 2.07 Mandatory Prepayment.
---------------------
(a) If (i) the Company or any Subsidiary shall sell, lease (other
than in the ordinary course of business), assign, transfer or
otherwise dispose of any of its assets other than pursuant to Excluded
Asset Sales, in an exchange that qualifies under Section 1031 of the
Code, or to the extent that the Net Cash Proceeds received therefrom
are reinvested in similar assets within 180 days of such disposition
of such assets, (ii) the Company or a Subsidiary issues, assumes or
Page 27
incurs Specified Additional Indebtedness or (iii) the Company sells or
issues equity securities for cash, other than pursuant to the
Company's Stock Incentive Plan, the Company shall prepay outstanding
Pro Rata Loans and Swing Line Advances with the Net Cash Proceeds
therefrom. Notwithstanding the foregoing, if at the time a mandatory
prepayment shall be required to be made hereunder, a mandatory
prepayment shall also be required to be made under any similar
provision of any agreement evidencing Indebtedness permitted by
Section 7.02(a), in an aggregate principal amount not exceeding
$25,000,000, then the Company may apportion such mandatory prepayment
pro rata according to the relative principal amounts outstanding under
such Credit Agreement and under this Agreement, and the amount of such
mandatory prepayment hereunder shall be reduced accordingly. Any such
reduction shall be described in reasonable detail in the officer's
certificate required under this Section 2.07(c).
(b) Application of Prepayments. All prepayments required to be made
pursuant to this Section 2.07 shall be applied in the following order:
first, to compensate the Banks for any amounts required by Section
4.03, in the case that such prepayment shall apply to any Eurodollar
Pro Rata Loans, second, to accrued interest on the principal amount of
Pro Rata Loans being prepaid, third, to the principal of the Pro Rata
Loans then outstanding, if any, fourth, to accrued interest on the
principal amount of Swing Line Advances being prepaid, and fifth, to
the principal of the Swing Line Advances then outstanding, if any;
provided that any prepayments shall be applied in a manner to minimize
the payments, if any, required by the Company pursuant to Section 4.03
with respect to such prepayment; and provided, further, that the
accrued interest on, and the outstanding principal of, Pro Rata Loans
to be prepaid shall be applied to prepayment of ABR Loans and
Eurodollar Pro Rata Loans in proportion to the outstanding aggregate
principal amount of such ABR Loans or Eurodollar Pro Rata Loans,
respectively, relative to that of all Pro Rata Loans.
(c) Officer's Certificate. Promptly upon receipt of any Net Cash
Proceeds, other than pursuant to any Excluded Asset Sales, the Company
shall deliver to the Administrative Agent a certificate signed by the
chief financial officer of the Company, which shall be in form and
substance satisfactory to the Administrative Agent, setting forth the
amount of the gross cash proceeds received and the items deducted
therefrom in reasonable detail in order to confirm the amount of such
Net Cash Proceeds and also setting forth the Company's year-to-date
asset sales.
Section 2.08 Procedure for Competitive Loans.
--------------------------------
(a) Prior to the Termination Date, the Company may request that the
Banks make offers to make Competitive Loans in dollars on the terms
and conditions hereinafter set forth; provided, however, that (i) the
aggregate principal amount of Competitive Loans that may be borrowed
Page 28
on any Borrowing Date may not exceed the Available Commitment (after
giving effect to any Loans to be repaid or prepaid on such Borrowing
Date and any other Loans to be made on such Borrowing Date), (ii) the
aggregate amount of Competitive Loans outstanding on any day may not
exceed 50% of the Total Commitment (after giving effect, with respect
to any day, to any Loans being repaid or prepaid on such day and any
other Loans to be made on such day) and (iii) the Company may not
request Competitive Loans before the fifth Business Day after the
Effective Date. Each Bank may, but shall have no obligation to, make
such offers and the Company may, but shall have no obligation to,
accept any such offers, in the manner set forth in this Section 2.08.
(b) The Company may request Competitive Loans under this Section 2.08
by giving a Competitive Loan Request to the Administrative Agent, by
telephone, telex, telecopy or in writing not later than 12:00 Noon,
New York time (if not in writing, to be confirmed in writing in
substantially the form of Exhibit C-1 not later than 2:00 P.M., New
York time, on the same day), on (i) the fourth Business Day prior to
the proposed Borrowing Date, in the case of Eurodollar Competitive
Loans, and (ii) on the Business Day immediately prior to the proposed
Borrowing Date, in the case of Absolute Rate Competitive Loans. The
Administrative Agent shall promptly notify each Bank, by a letter in
substantially the form of Exhibit C-2, of each such Competitive Loan
Request received by it from the Company and of the terms contained
therein.
(c) Each Bank may, if it elects so to do, irrevocably offer to make a
Competitive Loan of the requested type to the Company at a Competitive
Bid Rate or Rates, as specified by such Bank in accordance with the
related Competitive Loan Request, by submitting a Competitive Bid, in
substantially the form of Exhibit C-3 and indicating the maximum and
minimum principal amounts of the Competitive Loan which such Bank
would be willing to make (which amount may, subject to the proviso to
the first sentence of Section 2.08(a), exceed such Bank's Commitment,
but shall be in a principal amount equal to $1,000,000 or in integral
multiples of $100,000 in excess thereof), the Competitive Rate, or
Competitive Margin for the relevant Interest Period, as the case may
be, and any other terms and conditions required by such Bank, not
later than 9:30 A.M., New York time, on (i) the third Business Day
prior to the proposed Borrowing Date, in the case of Eurodollar
Competitive Loans or (ii) the proposed Borrowing Date, in the case of
Absolute Rate Competitive Loans, to the Administrative Agent (which
shall give notice thereof to the Borrower as promptly as practicable
and in no event later than 10:00 A.M., New York time); provided that,
if the Administrative Agent, at such time (if any) as it is a Bank,
shall elect to submit a Competitive Bid, the Administrative Agent
shall communicate the substance of its Competitive Bid to the Company
not later than 15 minutes prior to the applicable deadline specified
above. Banks may submit multiple Competitive Bids. Any Competitive
Bid that does not conform substantially with Exhibit C-3 may be
rejected by the Administrative Agent, after conferring with the
Company, and the Administrative Agent shall notify the Bank that
Page 29
submitted such Competitive Bid of such rejection as promptly as
practicable. The Administrative Agent shall (i) disclose the
Competitive Bids received to the Company as promptly as reasonably
practicable after the deadline stated above for the submission of
Competitive Bids, (ii) maintain in confidence all Competitive Bids
until each of them has been disclosed to the Company and (iii) provide
copies of all Competitive Bids (or other written notice containing all
of the terms thereof) to the Company as soon as practicable after
completion of the bidding process described in this Section 2.08.
(d) The Company shall, not later than (i) 12:00 Noon, New York time,
on the third Business Day prior to the proposed Borrowing Date, in the
case of Eurodollar Competitive Loans or (ii) 12:00 Noon, New York
time, on the proposed Borrowing Date, in the case of Absolute Rate
Competitive Loans, either
(i) cancel the Borrowing Request by giving the Administrative
Agent notice to that effect or
(ii) accept one or more Competitive Bids, in its sole discretion,
by giving notice to the Administrative Agent of the
principal amount of each Competitive Loan (which principal
amount shall be equal to or greater than the minimum amount
offered by the relevant Bank and equal to or less than the
maximum amount offered by such Bank for such Competitive
Loan pursuant to Section 2.08(c)), to be made by each Bank,
and reject any remaining Competitive Bids, by giving the
Administrative Agent notice to that effect; provided that
the aggregate principal amount of such offers accepted by
the Company shall be in a principal amount equal to
$1,000,000 or in an integral multiple of $100,000 in excess
thereof, each such notice to be in substantially the form of
Exhibit C-4 (a "Competitive Accept/Reject Notice"); provided
further that
(A) the failure by the Company to give such notice in a
timely fashion shall be deemed to be a rejection of all
the Competitive Bids,
(B) the Company shall not accept a Competitive Bid made at
a Competitive Bid Rate if such Company has rejected a
Competitive Bid made at a lower Competitive Bid Rate,
(C) the aggregate principal amount of the Competitive Bids
accepted by the Company shall not exceed the principal
amount specified in the Competitive Loan Request,
(D) if the Company shall accept Competitive Bids made at a
particular Competitive Bid Rate but shall be restricted
by other conditions hereof from borrowing the principal
amount of Competitive Loans specified in such
Competitive Loan Request in respect of which
Page 30
Competitive Bids at such Competitive Bid Rate have been
made or if the Company shall accept Competitive Bids
made at a particular Competitive Bid Rate but the
aggregate amount of Competitive Bids made at such
Competitive Bid Rate shall exceed the amount specified
in the Competitive Loan Request, then the Company shall
accept a pro rata portion of each Competitive Bid made
at such Competitive Bid Rate, aggregating such pro rata
portions of Competitive Loans with respect to which
Competitive Bids at such Competitive Bid Rate have been
received (provided further that if the principal amount
of Competitive Loans to be so allocated is not
sufficient to enable Competitive Loans to be so
allocated to each such Bank in a principal amount equal
to $1,000,000 or in an integral multiple of $100,000 in
excess thereof, the Company shall select the Banks to
be allocated such Competitive Loans in a principal
amount equal to not less than $1,000,000 but may round
up allocations to the next higher integral multiple of
$100,000 if necessary), and
(E) except as provided in clause (D) above, no Competitive
Bid shall be accepted for a Competitive Loan unless
such Competitive Loan is in a principal amount equal to
$5,000,000 or an integral multiple of $1,000,000 in
excess thereof.
(e) If the Company notifies the Administrative Agent that a Borrowing
Notice for Competitive Loans is canceled, the Administrative Agent
shall give prompt notice thereof to the Banks.
(f) If the Company accepts one or more Competitive Bids, the
Administrative Agent shall promptly give notice (i) to each Bank of
the date and aggregate amount of such Competitive Loan(s), the
Competitive Bid Rate therefor and whether or not any Competitive Bid
made by such Bank has been accepted by the Company, and (ii) to each
Bank whose Competitive Bid, or any portion thereof, has been accepted
by the Company, of the principal amount of the Competitive Loan to be
made by such Bank and the date for repayment thereof, together with
the Competitive Rate or Competitive Margin, as applicable, and any
other terms applicable to such Competitive Loan.
(g) Following any acceptance by the Company and notification by the
Administrative Agent pursuant to Section 2.08(f), and upon
satisfaction, or waiver by the Banks, of each of the applicable
conditions precedent contained in Article VI, each such Bank shall
disburse to the Administrative Agent, by 2:00 P.M. on the specified
Borrowing Date, the aggregate principal amount of the Competitive
Loans accepted by the Company, whereupon the Administrative Agent
shall promptly disburse such funds to the Company in funds immediately
available at the Company's office specified in Section 11.06.
Page 31
(h) Nothing in this Section 2.08 shall be construed as a right of
first offer in favor of the Banks or to otherwise limit the ability of
the Company to request and accept credit facilities from any Person
(including any Bank).
Section 2.09 Competitive Notes.
------------------
The Company's obligation to repay the Competitive Loans shall be
evidenced by Competitive Notes, one such Competitive Note payable to
the order of each Bank making a Competitive Loan pursuant to Section
2.08. The Competitive Note of each Bank shall (i) be in the principal
amount of 50% of the Total Commitment or, if less, the aggregate
principal amount outstanding under Competitive Loans made by such
Bank, (ii) be dated the date of the initial Competitive Loan made by
such Bank and (iii) be stated to mature on the Maturity Date of any
Competitive Loan made by such Bank (as such date may be extended
hereunder) and bear interest from its date until maturity on the
principal balance (from time to time outstanding thereunder) payable
at the rates and in the manner provided herein. Each Bank is
authorized to indicate upon the grid attached to its Competitive Note
all Competitive Loans made by it pursuant to this Agreement, interest
elections and payments of principal and interest thereon. Such
notations shall be presumptive as to the aggregate unpaid principal
amount of all Competitive Loans made by such Bank, and interest due
thereon, but the failure by any Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect
the obligations of the Company hereunder or under the Competitive
Notes.
Section 2.10 Swing Line Advances.
--------------------
(a) Prior to the Termination Date, and subject to the terms and
conditions of this Agreement, the Swing Line Bank shall make, on the
terms and conditions hereinafter set forth, Swing Line Advances to the
Company from time to time on any Business Day in an aggregate amount
not to exceed at any time outstanding $15,000,000 (the "Swing Line
Facility"); provided, however, that the sum of (i) the aggregate
outstanding Loans plus (ii) the aggregate outstanding Swing Line
Advances, may not exceed the Total Commitment. Each Swing Line
Borrowing shall be in an amount of not less than $100,000 or an
integral multiple of $100,000 in excess thereof. Each Bank other than
the Swing Line Bank shall be deemed to, and hereby agrees to, have
irrevocably and unconditionally purchased from the Swing Line Bank,
simultaneously with such Swing Line Advance, a participation in such
Swing Line Advance in an amount equal to such Bank's Pro Rata Share of
the principal amount thereof.
(b) Interest. Each Swing Line Advance shall bear interest at a rate
agreed upon by the Company and the Swing Line Bank but in no event
Page 32
higher than a rate based upon the Base Rate and in the manner set
forth in Section 3.02, as if such Swing Line Advance were an ABR Loan.
Such interest shall be payable in arrears at the end of the applicable
interest period or as otherwise agreed by the Company and the Swing
Line Bank. The interest period for any Swing Line Advance shall not
exceed 30 days.
(c) Swing Line Note. The Company's obligation to repay its Swing
Line Advances shall be evidenced by a Swing Line Note which shall be
(i) payable to the Swing Line Bank, (ii) in the principal amount of
$15,000,000 or, if less, the principal amount of the Company's Swing
Line Advances from time to time outstanding, (iii) dated not later
than the date of the Company's first Swing Line Advance and (iv)
stated to mature with respect to each Swing Line Advance from time to
time outstanding thereunder on the date determined pursuant to this
Section 2.10 but in any event not later than the Termination Date.
The Swing Line Bank is authorized to indicate upon the grid attached
to the Swing Line Note all borrowings thereunder and payments of
principal and interest thereon. Such notations shall be presumptively
correct as to the aggregate unpaid principal amount of the Swing Line
Advance made by the Swing Line Bank, and interest due thereon, but the
failure by the Swing Line Bank to make such notations or the
inaccuracy or incompleteness of any such notations shall not affect
the obligations of the Company hereunder or under the Swing Line Note.
(d) Procedure. Each Swing Line Borrowing shall be made on notice,
given not later than 12:00 P.M., New York time on the date of the
proposed Swing Line Borrowing, by the Company to the Swing Line Bank
and the Administrative Agent. Each such notice of a proposed Swing
Line Borrowing (a "Swing Line Advance Request") shall be by telephone
or telecopier (and if by telecopier, in the form of Exhibit E hereto),
and, if by telephone, confirmed immediately in writing, specifying
therein the requested (i) date of such borrowing, (ii) amount of such
borrowing and (iii) maturity of such borrowing (which maturity shall
be no later than the thirtieth day after the requested date of such
borrowing subject to successive thirty day extensions thereof, at the
Company's option, so long as the total outstanding amount of Swing
Line Advances remains less than or equal to $15,000,000). To the
extent it is required to do so pursuant to Section 2.10(a) above, the
Swing Line Bank will make the amount of the requested Swing Line
Advance available to the Administrative Agent in immediately available
funds, at the office of the Administrative Agent at its address set
forth on the signature pages hereof. After the Administrative Agent's
receipt of such funds and upon satisfaction by the Company, or waiver
by the Administrative Agent of each of the conditions precedent
contained in Article VI applicable thereto, the Administrative Agent
will disburse such funds to the Company.
(e) Repayment. The Company shall repay to the Administrative Agent
for the account of the Swing Line Bank the outstanding principal
amount of each Swing Line Advance made to the Company on the earlier
Page 33
of the maturity date specified in the applicable Swing Line Advance
Request (which maturity shall be no later than the thirtieth day after
the requested date of such borrowing subject to successive thirty day
extensions thereof, at the Company's option, so long as the total
outstanding amount of Swing Line Advances remains less than or equal
to $15,000,000) and the Termination Date.
(f) Conversion of Swing Line Advances. Subject to Section 4.03, (i)
if the aggregate outstanding Swing Line Advances shall at any time
exceed $1,000,000 the Company may, at its option, convert such Swing
Line Advances to an ABR Loan and if the aggregate outstanding Swing
Line Advances shall at any time exceed $2,500,000 the Company may, at
its option, convert such Swing Line Advances to a Eurodollar Pro Rata
Loan; (ii) if the aggregate outstanding Swing Line Advances shall at
any time exceed $7,500,000, Swing Line Advances in excess of such
amount shall, on the next date on which interest is payable on any
Swing Line Advance, unless converted at the Company's option pursuant
to clause (i) above, automatically be converted to an ABR Loan; and
(iii) if a Default shall occur and be continuing, the Swing Line Bank
may, at its option, convert such Swing Line Advances to an ABR Loan.
Upon election of any conversion under clause (i), the Company shall
notify the Swing Line Bank in writing of such conversion, whether such
Swing Line Advances shall be ABR Loans or Eurodollar Pro Rata Loans
and the Business Day on which such conversion is to be effective
(which notice in the case of the Eurodollar Pro Rata Loans shall not
be less than three days prior to the requested date for conversion)
and upon any automatic conversion under clause (ii) or election of
conversion under clause (iii), the Swing Line Bank shall immediately
notify the Company in writing of such conversion. On the Business Day
of any conversion described above, such Swing Line Advances shall
constitute an ABR Loan or a Eurodollar Pro Rata Loan and shall bear
interest at the rate of interest then applicable to ABR Loans or
Eurodollar Pro Rata Loans, as the case may be. Upon written demand by
the Swing Line Bank on or before 11:00 A.M., New York time, with a
copy of such demand to the Administrative Agent, whether or not an
Event of Default shall have occurred, each other Bank shall purchase
from the Swing Line Bank, and the Swing Line Bank shall sell to each
such other Bank, such other Bank's Pro Rata Share of such outstanding
Swing Line Advance as of the date of such demand, by making available
to the Administrative Agent for the account of the Swing Line Bank not
later than 2:00 P.M., New York time, in immediately available funds,
an amount equal to the portion of the outstanding principal amount of
such Swing Line Advance to be purchased by such Bank. The Company
hereby agrees to each such sale. Each Bank agrees unconditionally and
absolutely to purchase its Pro Rata Share of an outstanding Swing Line
Advance, whether or not an Event of Default shall have occurred, on
(i) the Business Day on which demand therefor is made by the Swing
Line Bank, provided that notice of such demand is given not later than
1:00 P.M., New York time, on such Business Day or (ii) the first
Business Day next succeeding such demand if notice of such demand is
given after such time. If and to the extent that any Bank shall not
Page 34
have so made the amount of such Swing Line Advance available to the
Administrative Agent, such Bank agrees to pay to the Administrative
Agent forthwith on demand such amount together with interest thereon,
for each day from the date of demand by the Swing Line Bank until the
date such amount is paid to the Administrative Agent, at a rate per
annum equal to (i) the Federal Funds Rate, for the three-day period
beginning on the date of such demand, and (ii) the rate of interest
then applicable to ABR Loans or Eurodollar Pro Rata Loans, as the case
may be, for the period beginning on the fourth day after the date of
such demand, changing as and when said rate changes.
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01 Procedure for Interest Rate Determination.
------------------------------------------
(a) Unless the Company shall request in a Loan Request or in a
Conversion/Continuance Request that Pro Rata Loans (or portions
thereof) bear interest as Eurodollar Pro Rata Loans, the Pro Rata
Loans shall bear interest as ABR Loans.
(b) Competitive Rate Loans shall bear interest as Absolute Rate
Competitive Loans or Eurodollar Competitive Loans as determined in
accordance with Section 2.08.
Section 3.02 Interest on ABR Loans.
----------------------
Each ABR Loan shall bear interest from the date of such ABR Loan until
maturity thereof or until such Loan is repaid or converted, or the
beginning of any relevant Interest Period, as the case may be, payable
in arrears on the last day of each calendar quarter of each year,
commencing with the first such date after the date hereof, and on the
date such ABR Loan is repaid, at a rate per annum (on the basis of a
365- or 366-day year for the actual number of days involved in the
case of ABR Loans which accrue interest based upon the Prime Rate and
on the basis of a 360-day year for the actual number of days involved
in the case of ABR Loans which accrue interest based upon the Federal
Funds Rate) equal to the Base Rate in effect from time to time, which
rate shall change as and when said Base Rate shall change. If an ABR
Loan is outstanding, the Administrative Agent shall notify the Company
of the Base Rate when said Base Rate shall change; provided that the
failure to give notice shall not affect the Company's obligations with
respect to such ABR Loan.
Page 35
Section 3.03 Interest on Eurodollar Loans.
-----------------------------
(a) Each Eurodollar Loan shall bear interest from the date of such
Loan until maturity thereof or until such Loan is repaid, payable in
arrears, with respect to Interest Periods of three months or less, on
the last day of such Interest Period, and with respect to Interest
Periods longer than three months, on the day which is three months
after the commencement of such Interest Period and on the last day of
such Interest Period, at a rate per annum (on the basis of a 360-day
year for the actual number of days involved), determined by the
Administrative Agent with respect to each Interest Period with respect
to Eurodollar Loans, equal to the sum of (i) the Applicable Margin, in
the case of Eurodollar Pro Rata Loans or the Competitive Margin, in
the case of Eurodollar Competitive Loans and (ii) LIBOR.
(b) The Interest Period for each Eurodollar Loan shall be selected by
the Company at least three Business Days prior to the beginning of
such Interest Period. If the Company fails to notify the
Administrative Agent of the subsequent Interest Period for an
outstanding Eurodollar Pro Rata Loan at least three Business Days
prior to the last day of the then current Interest Period of such
Eurodollar Pro Rata Loan, then such outstanding Eurodollar Pro Rata
Loan shall become an ABR Loan at the end of such current Interest
Period.
(c) Notwithstanding the foregoing: (i) if any Interest Period for a
Eurodollar Loan would otherwise end on a day which is not a Business
Day, such Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to carry
such Interest Period into another calendar month, in which event such
Interest Period shall end on the immediately preceding Business Day;
(ii) any Interest Period that begins on the last Business Day of a
calendar month (or on a day for which there is no numerically
corresponding day in the calendar month at the end of such Interest
Period) shall end on the last Business Day of a calendar month; and
(iii) no Interest Period for a Eurodollar Loan may extend beyond the
Termination Date.
(d) Eurodollar Loans shall be made by each Bank from its branch or
affiliate identified as its Eurodollar Lending Office on the signature
page hereto, or such other branch or affiliate as it may hereafter
designate to the Company and the Administrative Agent as its
Eurodollar Lending Office. A Bank shall not change its Eurodollar
Lending Office designation if it, at the time of the making of such
change, increases the amounts that would have been payable by the
Company to such Bank under this Agreement in the absence of such a
change.
Page 36
Section 3.04 Interest on Absolute Rate Competitive Loans.
--------------------------------------------
Each Absolute Rate Competitive Loan shall bear interest from the date
of such Loan to (but excluding) its Maturity Date, payable in arrears,
with respect to maturities of three months or less, on its Maturity
Date, and with respect to maturities longer than three months, on the
day which is three months after the making of such loan (and each
three month anniversary thereafter, if any) and on its Maturity Date,
at a rate per annum equal to the applicable Competitive Rate.
Section 3.05 Conversion/Continuance.
-----------------------
(a) The Company may request, by delivery to the Administrative Agent
of a written Conversion/Continuance Request not less than three
Business Days prior to a requested Conversion/Continuance Date, that
all or portions of the outstanding ABR Loans and Eurodollar Pro Rata
Loans, in the aggregate amount of $1,000,000 or in integral multiples
of $100,000 in excess thereof (or, if the aggregate amount of
outstanding Loans is less than $1,000,000, then all such lesser
amount), shall bear interest from and after the Conversion/Continuance
Date as either ABR Loans or Eurodollar Pro Rata Loans.
(b) Upon receipt of any such Conversion/Continuance Request from the
Company, the Administrative Agent shall forthwith give notice to each
Bank of the substance thereof. Effective on such Conversion/
Continuance Date and upon payment by the Company of the amounts, if
any, required by Section 4.03, the Loans or portions thereof as to
which the Conversion/Continuance Request was made shall commence to
accrue interest as set forth in this Article III for the interest rate
selected by the Company.
(c) In lieu of delivering the above-described notice, the Company may
give the Administrative Agent telephonic notice hereunder by the
required time under this Section 3.05; provided that such telephonic
notice shall be confirmed by delivery of a written notice to the
Administrative Agent by no later than 4:00 P.M., New York City time,
the date of such telephonic notice.
Section 3.06 Post Default Interest.
----------------------
Upon the occurrence and during the continuation of an Event of
Default, all Loans, Swing Line Advances and any unpaid installment of
interest shall bear interest at a rate per annum equal to the sum of
(i) 2% and (ii) with respect to ABR Loans and Swing Line Advances, the
rate of interest then applicable to ABR Loans, changing as and when
said rate shall change, with respect to Eurodollar Loans, the rate of
interest applicable to each such Eurodollar Loan, and with respect to
Page 37
Absolute Rate Competitive Loans, the Competitive Rate applicable to
such Absolute Rate Competitive Loan. Interest payable pursuant to
this Section 3.06 shall be payable on demand.
Section 3.07 Maximum Interest Rate.
----------------------
(a) Nothing in this Agreement or the Notes shall require the Company
to pay interest at a rate exceeding the maximum rate permitted by
applicable law. Neither this Section nor Section 11.01 is intended to
limit the rate of interest payable for the account of any Bank to the
maximum rate permitted by the laws of the State of New York (or any
other applicable law) if a higher rate is permitted with respect to
such Bank by supervening provisions of U.S. Federal law.
(b) If the amount of interest payable for the account of any Bank on
any interest payment date in respect of the immediately preceding
interest computation period, computed pursuant to this Article III,
would exceed the maximum amount permitted by applicable law to be
charged by such Bank, the amount of interest payable for its account
on such interest payment date shall automatically be reduced to such
maximum permissible amount.
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01 Pro Rata Treatment.
-------------------
Each payment of the Facility Fee and each reduction of the Total
Commitment shall be apportioned among the Banks in proportion to each
Bank's Pro Rata Share. Except as provided in Section 4.04 or 4.05,
the ABR Loans and Eurodollar Pro Rata Loans or portions thereof as to
which a Conversion/Continuance Request has been made pursuant to
Section 3.05 hereof shall at all times bear interest on the same basis
respectively (i.e., as ABR Loans and Eurodollar Pro Rata Loans) and
the Interest Periods applicable thereto, if any, shall be of the same
duration.
Section 4.02 Method of Payment.
------------------
(a) All payments by the Company hereunder and under the Notes shall
be made without set-off or counterclaim to the Administrative Agent,
for its account or for the account of the Bank or Banks entitled
thereto, as the case may be, in lawful money of the United States and
in immediately available funds at the office of the Administrative
Agent on the date when due.
Page 38
(b) Any payment hereunder which falls due on a non-Business Day will
be carried over to the next Business Day (subject to Section 3.03(c)),
and interest at the rate applicable hereunder will continue to run
during such extension of time.
Section 4.03 Compensation for Losses.
------------------------
(a) Compensation. In the event that (i) the Company makes a
prepayment under Section 2.06 on a day other than the last day of the
Interest Period for the amount so prepaid, (ii) a Conversion/
Continuance Date selected pursuant to Section 3.05 falls on a day
other than the last day of the Interest Period for the amount as to
which a conversion is made, (iii) the Company revokes any notice given
under Section 2.02 requesting Eurodollar Loans, (iv) the Loans or
portions thereof are converted into ABR Loans pursuant to Section 4.05
on a day other than the last day of the Interest Period for the
Eurodollar Loans so converted, (v) the Eurodollar Loans shall be
declared to be due and payable prior to the scheduled maturity thereof
pursuant to Section 8.01 or (vi) Swing Line Advances shall be
converted into an ABR Loan on any day other than the maturity date for
such Swing Line Advances, the Company shall pay to each Bank or the
Swing Line Bank, as the case may be, promptly after its demand an
amount which will compensate such Bank or the Swing Line Bank, as the
case may be, for any loss, premium or penalty incurred (other than any
loss, premium or penalty incurred as a consequence of any Tax, which
shall be governed by the provisions of Section 4.04(a)) by such Bank
or the Swing Line Bank, as the case may be, as a result of such
prepayment, conversion, declaration or revocation of notice in respect
of funds deemed (pursuant to the last sentence of this Section
4.03(a)) obtained for the purpose of making or maintaining such Bank's
Eurodollar Loans or the Swing Line Bank's Swing Line Advances, or any
part thereof (it being understood, however, that the foregoing shall
not be construed as covering any amounts paid pursuant to Section
2.10(f) by a Bank to the Swing Line Bank in connection with the
conversion of a Swing Line Loan). Such compensation shall include an
amount equal to the excess, if any, of (i) the amount of interest
which would have accrued on the amount so paid or prepaid, or not
borrowed or converted, for the period from the date of such payment or
prepayment or conversion or failure to borrow to the last day of such
Interest Period or the maturity date of Swing Line Advances (or, in
the case of a failure to borrow, the Interest Period that would have
commenced on the date of such failure to borrow) in each case at the
applicable rate of interest for such Loan provided for herein
(excluding, however, the Applicable Margin included therein) over (ii)
the amount of interest (as reasonably determined by such Bank) which
would have accrued to such Bank on such amount by placing such amount
on deposit for a comparable period with leading banks in the London
interbank market. For purposes of calculating amounts payable by the
Company to the Banks under this Section, each Eurodollar Loan made by
a Bank (and each related reserve, special deposit or similar
Page 39
requirement) shall be conclusively deemed to have been funded at Base
LIBOR used in determining LIBOR for such Eurodollar Loan by a matching
deposit or other borrowing in the London interbank deposits market for
a comparable amount and for a comparable period, whether or not such
Eurodollar Loan is in fact so funded.
(b) Certificate, Etc. Each Bank and the Swing Line Bank, if
applicable, shall promptly notify the Company, with a copy to the
Administrative Agent, upon becoming aware that the Company may be
required to make any payment pursuant to this Section 4.03. When
requesting payment pursuant to this Section 4.03, each Bank and the
Swing Line Bank, if applicable, shall provide to the Company, with a
copy to the Administrative Agent, a certificate, signed by an officer
of such Bank or Swing Line Bank, setting forth the amount required to
be paid by the Company to such Bank or Swing Line Bank and the
computations made by such Bank or Swing Line Bank to determine such
amount. In the absence of manifest error, such certificate shall be
conclusive and binding on the Company as to the amount so required to
be paid by the Company to such Bank.
(c) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.03.
Section 4.04 Withholding, Reserves and Additional Costs.
--------------------------------------------
(a) Taxes.
(i) Withholding. To the extent permitted by law, all payments
under this Agreement and under the Notes (including
payments of principal and interest) shall be payable to
each Bank free and clear of any and all present and future
Covered Taxes. If any Taxes are required to be withheld
or deducted from any amount payable under this Agreement
or any Note, then (1) the Company shall pay any such Tax
before the date on which penalties attach thereto, and (2)
in the event such Tax is a Covered Tax, the amount payable
under this Agreement or such Note shall be increased to
the amount which, after deduction from such increased
amount of all Covered Taxes required to be withheld or
deducted therefrom, will yield to such Bank the amount
stated to be payable under this Agreement or such Note.
The Company shall execute and deliver to any Bank upon its
request such further instruments as may be necessary or
desirable to give full force and effect to any such
increase, including a new Note of the Company to be issued
in exchange for any Note theretofore issued. The Company
shall also hold each Bank harmless and indemnify it for
any stamp or other taxes with respect to the preparation,
execution, delivery, recording, performance or enforcement
of the Credit Documents (all of which shall be included
Page 40
with "Taxes"). If any Covered Taxes are paid by any Bank,
the Company shall, not later than 10 days after demand of
such Bank, reimburse such Bank for such payments, together
with any interest, penalties and expenses incurred in
connection therewith, plus interest thereon at a rate per
annum (based on a 360-day year for the actual number of
days involved) equal to the interest rate then applicable
to ABR Loans, changing as and when such rate shall change,
from the date such payment or payments are made by such
Bank to the date of reimbursement by the Company. The
Company shall deliver to the Administrative Agent
certificates or other valid vouchers for all Taxes or
other charges deducted from or paid with respect to
payments made by the Company hereunder.
(ii) Tax Refund. If the Company determines in good faith that,
(a) acting in the name of a Bank, Participant, Assignee or
the Administrative Agent it is more likely than not to win
a contest involving a Covered Tax, or (b) acting in the
name of the Company, a reasonable basis exists for
contesting a Covered Tax, then the relevant Bank,
Participant, Assignee or the Administrative Agent, as
applicable, shall cooperate with the Company in
challenging such Tax at the Company's expense if requested
by the Company (it being understood and agreed that
neither the Administrative Agent nor any Bank, Participant
or Assignee shall have any obligation to contest, or any
responsibility for contesting any Tax). If any Bank,
Participant, Assignee or the Administrative Agent, as
applicable, receives a refund (whether by way of direct
payment or by offset) of any Covered Tax for which a
payment has been made pursuant to subsection
4.04(a)(i) which, in the reasonable good faith judgment of
such Bank, Participant, Assignee or Administrative Agent,
as the case may be, is allocable to such payment made
under subsection 4.04(a)(i), the amount of such refund
(together with any interest received thereon) shall be
paid to the Company to the extent payment has been made in
full pursuant to subsection 4.04(a)(i).
(iii) U.S. Tax Certificates. Each Bank that is organized under
the laws of any jurisdiction other than the United States
or any state thereof shall deliver to the Administrative
Agent for transmission to the Company, on or prior to the
Closing Date (in the case of each Bank listed on the
signature pages hereof) or on the date (and as a condition
to effectiveness) of an assignment pursuant to which it
becomes a Bank (in the case of each other Bank), and at
such other times as may be necessary in the determination
of the Company or the Administrative Agent (each in the
reasonable exercise of its discretion), such certificates,
Page 41
documents or other evidence, properly completed and duly
executed by such Bank (including, without limitation,
Internal Revenue Service Form 1001 or Form 4224 or any
other certificate or statement of exemption required by
Treasury Regulations Section 1.1441-4(a) or Section
1.1441-6(c) or any successor thereto) to establish that
such Bank is not subject to deduction or withholding of
United States federal income tax under Section 1441 or
1442 of the Code or otherwise (or under any comparable
provisions of any successor statute) or is subject to
deduction or withholding at a reduced rate under any
applicable treaty or otherwise with respect to any
Payments to such Bank of principal, interest, fees or
other amounts payable under this Agreement or any of the
Notes. The Company shall not be required to pay any
additional amount to any such Bank under subsection
4.04(a)(i) if such Bank shall have failed to satisfy the
requirements of the immediately preceding sentence;
provided that if such Bank shall have satisfied such
requirements on the Closing Date (in the case of each Bank
listed on the signature pages hereof) or on the date of
the agreement pursuant to which it became a Bank (in the
case of each other Bank), nothing in this subsection
4.04(a)(iii) shall relieve the Company of its obligation
to pay any additional amounts pursuant to subsection
4.04(a)(i) in the event that, as a result of any change in
applicable law, such Bank is no longer properly entitled
to deliver certificates, documents or other evidence at a
subsequent date establishing the fact that such Bank is
not subject to withholding as described in the immediately
preceding sentence.
(iv) Mitigation. Each Bank agrees that, as promptly as
practicable after the officer of such Bank responsible for
administering the Loans under this Agreement becomes aware
of the occurrence of an event or the existence of a
condition that would require the Company to make payments
with respect to such Bank under subsection 4.04(a)(i), it
will, to the extent not inconsistent with such Bank's
internal policies, use reasonable efforts (1) to make,
fund or maintain the Commitments or Loans of such Bank
through another lending office of such Bank, or (2) take
such other reasonable measures, if as a result the
additional amounts that would otherwise be required to be
paid by the Company with respect to such Bank pursuant to
subsection 4.04(a)(i) would be materially reduced and if,
as determined by such Bank in its sole discretion, the
making, funding or maintaining of such Commitments or
Loans through such other lending office or in accordance
with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or
Loans or the interests of such Bank.
Page 42
(v) Replacement of Bank. If the Company becomes obligated to
pay additional amounts described in Section 4.04(a) as a
result of any condition described in such section and
payment of such amount is demanded by any Bank, then the
Company may, on ten business days' prior written notice to
the Administrative Agent and such Bank, cause such Bank to
(and such Bank shall) assign all of its rights and
obligations under this Agreement to a Bank or other entity
selected by the Company for a purchase price equal to the
outstanding principal amount of such Bank's Loans and all
accrued interest, fees, and other amounts owing to such
Bank, provided that in no event shall the assigning Bank
be required to pay or surrender to such purchasing Bank or
other entity any of the fees received by such assigning
Bank pursuant to this Agreement. The Company shall remain
obligated to pay to such assigning Bank all additional
amounts described in Section 4.04(a) arising on or prior
to the date of such assignment as a result of any
condition described in such section and demanded by any
Bank.
(b) Additional Costs.
(i) If after the date hereof, any change in any law or
regulation or in the interpretation thereof by any court
or administrative or governmental authority charged with
the administration thereof or the enactment of any law or
regulation shall either (1) impose, modify or deem
applicable any reserve, special deposit or similar
requirement against the Banks' Commitments or the Loans or
Swing Line Advances or (2) impose on any Bank any other
condition regarding this Agreement, its Commitment or the
Loans or Swing Line Advances and the result of any event
referred to in clause (1) or (2) of this clause (b) shall
be to increase the cost (other than an increase in cost as
a consequence of any Tax, which shall be governed by the
provisions of Section 4.04(a)) to any Bank of maintaining
its Commitment or any Loans or Swing Line Advances (which
increase in cost shall be calculated in accordance with
each Bank's reasonable averaging and attribution methods)
by an amount which any such Bank deems to be material,
then, upon receipt by the Company of written notice by
such Bank, the Company shall be obligated to pay to such
Bank within 10 days of any written demand therefor an
amount equal to such increase in cost incurred by such
Bank after the date the Company receives such notice;
provided that in respect of any Loan or Swing Line
Advances such amount shall bear interest, after receipt by
the Company of any such demand until payment in full
thereof, at a rate per annum (based on a 360-day year, for
Page 43
the actual number of days involved) equal to the sum of 2%
and the interest rate then applicable to ABR Loans,
changing as and when such rate shall change.
(ii) If any Bank shall have determined that the adoption of any
applicable law, rule, regulation or guideline regarding
capital adequacy, or any change therein, 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
(including any such adoption or change made prior to the
date hereof but not effective until after the date
hereof), or compliance by any Bank with any request or
directive regarding capital adequacy (whether or not
having the force of law) of any such authority, central
bank or comparable agency, has or would have the effect of
reducing the rate of return on capital for any such Bank
or any corporation controlling such Bank as a consequence
of its obligations under this Agreement to a level below
that which such Bank or such corporation could have
achieved but for such adoption, change or compliance
(taking into consideration such Bank's or such
corporation's policies with respect to capital adequacy),
then upon receipt by the Company of written notice by such
Bank, the Company shall be obligated to pay to such Bank
upon receipt of written demand from such Bank such
additional amount or amounts as will compensate such Bank
for such reduction suffered by such Bank after the date
the Company receives such notice, plus interest thereon at
a rate per annum (based on a 360-day year, for the actual
number of days involved) equal to the interest rate then
applicable to ABR Loans, changing as and when such rate
shall change, from the date of such demand by such Bank to
the date of payment by the Company.
(iii) Mitigation. Each Bank agrees that, as promptly as
practicable after the officer of such Bank responsible for
administering the Loans under this Agreement becomes aware
of the occurrence of an event or the existence of a
condition that would require the Company to make payments
with respect to such Bank under subsection 4.04(b)(i) or
(ii), it will, to the extent not inconsistent with such
Bank's internal policies, use reasonable efforts (1) to
make, fund or maintain the Commitments or Loans of such
Bank through another lending office of such Bank, or (2)
take such other reasonable measures, if as a result the
additional amounts that would otherwise be required to be
paid by the Company with respect to such Bank pursuant to
subsection 4.04(b)(i) or (ii) would be materially reduced
and if, as determined by such Bank in its sole discretion,
the making, funding or maintaining of such Commitments or
Page 44
Loans through such other lending office or in accordance
with such other measures, as the case may be, would not
otherwise materially adversely affect such Commitments or
Loans or the interests of such Bank.
(iv) Replacement of Bank. If the Company becomes obligated to
pay additional amounts described in Section 4.04(b)(i) or
(ii) as a result of any condition described in such
section and payment of such amount is demanded by any
Bank, then the Company may, on ten business days' prior
written notice to the Administrative Agent and such Bank,
cause such Bank to (and such Bank shall) assign all of its
rights and obligations under this Agreement to a Bank or
other entity selected by the Company for a purchase price
equal to the outstanding principal amount of such Bank's
Loans and all interest and facility fees accrued to the
date of purchase. The Company shall remain obligated to
pay to such assigning Bank all additional amounts
described in Section 4.04(b) arising on or prior to the
date of such assignment as a result of any condition
described in such section and demanded by any Bank.
(c) Lending Office Designations. Before giving any notice to the
Company pursuant to this Section 4.04, each Bank shall, if possible,
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.
(d) Certificate, Etc. Each Bank shall promptly notify the Company,
with a copy to the Administrative Agent, upon becoming aware that the
Company may be required to make any payment pursuant to this Section
4.04. When requesting payment pursuant to this Section 4.04, each
Bank shall provide to the Company, with a copy to the Administrative
Agent, a certificate, signed by an officer of such Bank, setting forth
the amount required to be paid by the Company to such Bank and the
computations made by such Bank to determine such amount.
Determinations and allocations by such Bank for purposes of this
Section 4.04 shall be conclusive and binding upon the Company,
provided that such determinations and allocations are made on a
reasonable basis and are mathematically accurate.
(e) Participants. Subject to Section 11.08(e), each Participant
shall be deemed a "Bank" for the purposes of this Section 4.04.
Section 4.05 Unavailability.
---------------
If at any time any Bank shall have determined in good faith (which
determination shall be conclusive) that (x) the making or maintenance
of all or any part of such Bank's Eurodollar Loans has been made
impracticable or unlawful because of compliance by such Bank in good
Page 45
faith with any law or guideline or any interpretation or
administration thereof by any official body charged with the
interpretation or administration thereof or with any request or
directive of such body (whether or not having the effect of law), or
(y) that LIBOR would not accurately reflect the cost to such Bank of
making, continuing or converting any Eurodollar Loan by reason of such
compliance, or by reason of the unavailability of appropriate
quotations, or by reason of the unavailability of U.S. dollar deposits
in the appropriate amount and maturity in the London Eurodollar
interbank market, then the Administrative Agent, upon notification to
it of such determination by such Bank, shall forthwith advise the
other Banks and the Company thereof. Upon such date as shall be
specified in such notice and until such time as the Administrative
Agent, upon notification to it by such Bank, shall notify the Company
and the other Banks that the circumstances specified by it in such
notice no longer apply, (i) notwithstanding any other provision of
this Agreement, such Eurodollar Loans of such Bank shall automatically
and without requirement of notice by the Company be converted to ABR
Loans and (ii) the obligation of only such Bank to allow borrowing,
elections and renewals of Eurodollar Loans shall be suspended, and, if
the Company shall request in a Loan Request or Conversion/Continuance
Request that such Bank make a Eurodollar Loan, the loan requested to
be made by such Bank shall instead be made as an ABR Loan.
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01 Representations and Warranties.
-------------------------------
As of each Compliance Date, the Company represents and warrants to the
Banks that:
(a) Subsidiaries. At the date hereof, the Company has no
Subsidiaries and is a participant in no joint ventures other than as
listed on Schedule 5.01(a).
(b) Good Standing and Power. The Company is duly organized and
validly existing and in good standing under the laws of the State of
Maryland; and the Company has the power to own its property and to
carry on its business as now being conducted and is duly qualified to
do business and is in good standing in each jurisdiction in which the
character of the properties owned or leased by it therein or in which
the transaction of its business makes such qualification necessary,
except where the failure to be so qualified or to be in good standing,
individually or in the aggregate, could not reasonably be expected to
have a Material Adverse Effect. Each of the corporate Subsidiaries of
the Company are corporations, each duly organized and validly
existing, under the laws of the jurisdiction of its incorporation;
Page 46
each other Subsidiary is an entity duly organized and validly existing
under the laws of the jurisdiction of its organization; and each
Subsidiary has the power to own its property and to carry on its
business as now being conducted and is duly qualified to do business
and is in good standing in each jurisdiction in which the character of
the properties owned or leased by it therein or in which the
transaction of its business makes such qualification necessary, except
where the failure to be so organized, existing, qualified, or to be in
good standing, individually or in the aggregate, could not reasonably
be expected to have a Material Adverse Effect.
(c) Corporate Authority. The Company has full corporate power and
authority to execute, deliver and perform its obligations under this
Agreement, to make the borrowings contemplated hereby, and to execute
and deliver the Notes and to incur the obligations provided for herein
and therein, all of which have been duly authorized by all proper and
necessary corporate action. No consent or approval of stockholders is
required as a condition to the validity or performance by the Company
of its obligations under this Agreement or the Notes.
(d) Authorizations. All authorizations, consents, approvals,
registrations, notices, exemptions and licenses with or from
Governmental Authorities and other Persons which are necessary for the
borrowing hereunder, the execution and delivery of the Credit
Documents, the performance by the Company of its obligations hereunder
and thereunder have been effected or obtained and are in full force
and effect.
(e) Binding Agreements. This Agreement constitutes, and the Notes,
when executed and delivered pursuant hereto for value received will
constitute, the valid and legally binding obligations of the Company
enforceable in accordance with their terms, subject to the effect of
bankruptcy, insolvency, reorganization, moratorium or other similar
laws now or hereafter in effect relating to or affecting the rights
and remedies of creditors; and the effect of general principles of
equity, regardless of whether enforcement is sought in a proceeding at
law or in equity, and the discretion of the court before which any
proceeding therefor may be brought.
(f) Litigation. There are no proceedings or investigations, so far
as the executive officers of the Company know, pending or threatened
before any court or arbitrator or before or by any Governmental
Authority which (i) in any one case or in the aggregate, if determined
adversely to the interests of the Company or any of its Subsidiaries,
could reasonably be expected to have a Material Adverse Effect, (ii)
relates to any Credit Document or the lending transactions
contemplated hereby and thereby or (iii) seeks to (or is expected to)
rescind, terminate, revoke, cancel, withdraw, suspend, modify or
withhold any material license or permit of the Company or any of the
Subsidiaries.
Page 47
(g) No Conflicts. There is no statute, regulation, rule, order or
judgment, and no provision of any material agreement or instrument
binding on the Company or any of its Subsidiaries, or affecting their
respective properties and no provision of the certificate of
incorporation, by-laws, governing partnership agreement or other
organizational document of the Company or any of its Subsidiaries,
which would prohibit, conflict with or in any way prevent the
execution, delivery, or performance of the terms of the Credit
Documents or the incurrence of the obligations provided for herein and
therein, or result in or require the creation or imposition of any
Lien on any of the Company's or its Subsidiaries' properties as a
consequence of the execution, delivery and performance of any Credit
Document or the lending transactions contemplated hereby and thereby.
(h) Financial Condition. (i) (A) The consolidated balance sheet as
of December 31, 1998, together with consolidated statements of income,
stockholders' equity and cash flows for the fiscal year then ended,
audited by KPMG, LLP, included in the Realty Income Corporation 1998
Year End Report and (B) the consolidated balance sheet as of June 30,
1999, together with the consolidated statements of income and cash
flows for the 6 months then ended certified by the chief financial
officer of the Company, heretofore delivered to the Administrative
Agent, fairly present the financial condition of the Company and its
consolidated Subsidiaries and the results of their operations as of
the dates and for the periods referred to and have been prepared in
accordance with GAAP consistently applied throughout the periods
involved. As of the date hereof, there are no material liabilities,
direct or indirect, fixed or contingent, of the Company and its
Subsidiaries as of the dates of such balance sheet which are not
reflected therein or in the notes thereto. (ii) Since December 31,
1998 there has been no Material Adverse Change.
(i) Taxes. The Company and each of its Subsidiaries has filed or
caused to be filed all tax returns which are required to be filed and
has paid all taxes required to be shown to be due and payable on said
returns or on any assessment made against it or any of its property
and all other taxes, assessments, fees, liabilities, penalties or
other charges imposed on it or any of its property by any Governmental
Authority, except for any taxes not yet delinquent and any taxes,
assessments, fees, liabilities, penalties or other charges which are
being contested in good faith and for which adequate reserves (in
accordance with GAAP) have been established.
(j) Use of Proceeds. The proceeds of the Loans and Swing Line
Advances will be used by the Company for the purposes described in the
Whereas clause hereto.
(k) Margin Regulations. No part of the proceeds of any Loan will be
used to purchase or carry, or to reduce, retire or refinance any
credit incurred to purchase or carry or to extend credit to others for
Page 48
the purpose of purchasing or carrying, any "margin stock" as defined
in Regulation U of the Board of Governors of the Federal Reserve
System.
(l) No Material Misstatements. All written information relating to
the Company and its Subsidiaries heretofore delivered by the Company
and its Subsidiaries to the Administrative Agent or any Bank in
connection with the Credit Documents is complete and correct in all
material respects.
(m) Title to Properties; Possession Under Leases. The Company and
its Subsidiaries each have good and marketable title to, or valid
leasehold interests in, all properties and assets reflected on the
consolidated balance sheet of the Company as of June 30, 1999,
referred to in Section 5.01(h), except for such properties and assets
as have been disposed of in the ordinary course of business and except
for minor defects in title that do not, individually or in the
aggregate, materially interfere with the ability of the Company or any
of such Subsidiaries to conduct its business as now conducted. All
such assets and properties are free and clear of all Liens, except
Liens permitted pursuant to this Agreement.
(n) Leases. (i) To the Company's knowledge, no condition exists
which, with the giving of notice or the passage of time, or both,
would permit any lessee to cancel its obligations under any lease to
which the Company or any Subsidiary is a party that would create,
individually or in the aggregate, a Material Adverse Effect; (ii) the
Company has received no notice that any lessee or lessees intend to
cease operations at any leased property or properties prior to the
expiration of the term of the applicable lease (other than temporarily
due to casualty, remodeling, renovation or any similar cause) that
would create, individually or in the aggregate, a Material Adverse
Effect; and (iii) to the Company's knowledge, none of the lessees or
their sublessees, if any, under any of the leases to which the Company
or any Subsidiary is a party to or is the subject of any bankruptcy,
reorganizations, insolvency or similar proceeding that would create,
individually or in the aggregate, a Material Adverse Effect.
(o) Conduct of Business. At the date hereof, the Company and its
Subsidiaries hold all authorizations, consents, approvals,
registrations, franchises, licenses and permits, with or from
Governmental Authorities and other Persons as are required or
necessary for them to own their properties and conduct their business
as now conducted unless and to the extent that any failure to hold
such authorizations, consents, approvals, registrations, franchises,
licenses and permits, individually or in the aggregate, could not have
a Material Adverse Effect.
(p) Compliance with Laws and Charter Documents. Neither the Company
nor any Subsidiary thereof is, or as a result of performing any of its
obligations under the Credit Documents will be, in violation of (a)
Page 49
any law, statute, rule, regulation or order of any Governmental
Authority (including Environmental Laws) applicable to it or its
properties or assets, (b) its certificate of incorporation, by-laws,
governing partnership agreement or other organizational document or
(c) judgments or agreements to which it is a party or by which its
assets may be bound unless and to the extent that such violations,
individually or in the aggregate, would not have a Material Adverse
Effect.
(q) ERISA.
(i) Neither the Company nor any ERISA Affiliate has engaged in
a transaction with respect to any Plan which, assuming the
taxable period of such transaction expired as of the
Compliance Date, could subject the Company or any ERISA
Affiliate to a tax or penalty imposed by either Section
4975 of the Code or Section 502(i) of ERISA in an amount
that would have a Material Adverse Effect.
(ii) Except as set forth on Schedule 5.01(q), neither the
Company nor any ERISA Affiliate has incurred any liability
since December 31, 1998, under Title IV of ERISA with
respect to any Single Employer Plan. No Single-Employer
Plan had an accumulated funding deficiency, whether or not
waived, as of the last day of the most recent fiscal year
of such Plan ended prior to the Compliance Date, and each
Plan has complied in all material respects with the
applicable provisions of ERISA and the Code. Neither the
Company nor any ERISA Affiliate is (A) required to give
security to any Single-Employer Plan pursuant to Section
401(a)(29) of the Code or Section 307 of ERISA, or (B)
subject to a lien in favor of such a Plan under Section
414(n) of the Code or Section 302(f) of ERISA.
(iii) No liability under Section 4062, 4063, 4064 or 4069 of
ERISA has been or is expected by the Company to be
incurred by the Company or any ERISA Affiliate with
respect to any Single-Employer Plan in an amount that
could have a Material Adverse Effect. Neither the Company
nor any ERISA Affiliate has incurred or expects to incur
any withdrawal liability with respect to any Plan which is
a multiemployer plan in an amount which would have a
Material Adverse Effect.
(iv) Under each Single-Employer Plan, as of the last day of the
most recent plan year ended prior to the Compliance Date,
the actuarially determined present value of all benefit
liabilities (as determined on the basis of the actuarial
assumptions contained in the Plan's most recent actuarial
valuation) did not exceed the fair market value of the
asset of such Plan by an amount that would have a Material
Adverse Effect.
Page 50
(v) Insofar as the representations and warranties of the
Company contained in clause (i) above relates to any Plan
which is a multiemployer plan, such representations and
warranties are made to the best knowledge of the Company
and its ERISA Affiliates. As used in this Section, (A)
"accumulated funding deficiency" shall have the meaning
assigned to such term in Section 412 of the Code and
Section 302 of ERISA; (B) "multiemployer plan" and "plan
year" shall have the respective meanings assigned to such
terms in Section 3 of ERISA; (C) "benefit liabilities"
shall have the meaning assigned to such term in Section
4001 of ERISA; (D) "taxable period" shall have the meaning
assigned to such term in Section 4975 of the Code; and (E)
"withdrawal liability" shall have the meaning assigned to
such term in Part 1 of Subtitle E of Title IV of ERISA.
(r) Intellectual Property. The Company and each of its Subsidiaries
owns, or is licensed to use, all trademarks, trade names, patents and
copyrights (the "Intellectual Property") necessary for the conduct of
its business as currently conducted, including, without limitation,
the Intellectual Property listed on Schedule 5.01(r) hereto. To the
knowledge of the Company, no claim has been asserted or is pending by
any Person challenging or questioning the use by the Company or any
Subsidiary of any such Intellectual Property or the validity or
effectiveness of any such Intellectual Property, nor does the Company
know of any valid basis for any such claim. To the knowledge of the
Company, the use of such Intellectual Property by the Company and its
Subsidiaries does not infringe on the rights of any Person, nor, to
the knowledge of the Company, are there any uses by other Persons of
such Intellectual Property which infringe on the rights of the Company
and its Subsidiaries.
(s) Not an Investment Company or Public Utility Holding Company.
Neither the Company nor any of its Subsidiaries is or, after giving
effect to the transactions contemplated hereby will be (i) an
"investment company" or a company "controlled" by an "investment
company" within the meaning of the Investment Company Act of 1940, as
amended or (ii) subject to regulation under the Public Utility Holding
Company Act of 1935, the Federal Power Act or any foreign, federal,
state or local statute or regulation limiting its ability to incur
indebtedness for money borrowed as contemplated hereby.
(t) Environmental Matters. Except as they would not individually or
in the aggregate have a Material Adverse Effect (i) the businesses as
presently or formerly engaged in by the Company and its Subsidiaries
are and have been conducted in compliance with all applicable
Environmental Laws, including, without limitation, having all permits,
licenses and other approvals and authorizations, during the time the
Company and its Subsidiaries engaged in such businesses, (ii) the
properties presently or formerly owned or operated by the Company and
its Subsidiaries (including, without limitation, soil, groundwater or
Page 51
surface water on, under or adjacent to the properties, and buildings
thereon) (the "Properties") do not contain any Hazardous Substance
other than in compliance with applicable Environmental Law (provided,
however, that with respect to Properties formerly owned or operated by
the Company and its Subsidiaries, such representation is limited to
the period the Company owned or operated such Properties), (iii)
neither the Company or any of its Subsidiaries has received any
notices, demand letters or request for information from any Federal,
state, local or foreign governmental entity or any third party
indicating that the Company or any of its Subsidiaries may be in
violation of, or liable under, in any respect, any Environmental Law
in connection with the ownership or operation of the Company's
businesses, (iv) there are no civil, criminal or administrative
actions, suits, demands, claims, hearings, investigations or
proceedings pending or threatened against the Company or any of its
Subsidiaries with respect to the Company or any of its Subsidiaries or
the Properties relating to any violation, or alleged violation, of any
Environmental Law, (v) no reports have been filed, or are required to
be filed, by the Company or any of its Subsidiaries concerning the
release of any Hazardous Substance or the threatened or actual
violation of any Environmental Law on or at the Properties, (vi) no
Hazardous Substance has been disposed of, transferred, released or
transported from any of the Properties during the time such Property
was owned or operated by the Company or any of its Subsidiaries, other
than in compliance with applicable Environmental Law, (vii) there have
been no environmental investigations, studies, audits, tests, reviews
or other analyses conducted by or which are in the possession of the
Company or any of its Subsidiaries relating to the Company or such
Subsidiary or the Properties which have not been delivered to the
Banks prior to the date hereof, (viii) none of the Properties has been
used at any time by the Company or any of its Subsidiaries as a
sanitary landfill or hazardous waste disposal site and (ix) neither
the Company nor any of its Subsidiaries has incurred, and none of the
Properties are presently subject to, any material liabilities (fixed
or contingent) relating to any suit, settlement, court order,
administrative order, judgment or claim asserted or arising under any
Environmental Law.
(u) Solvency. On the date of each Loan and Swing Line Advance
hereunder, and after the payment of all estimated legal, investment
banking, accounting and other fees related hereto, the Company and
each of its Subsidiaries will be Solvent.
(v) Insurance. The properties (other than properties leased to other
Persons) and operations of the Company and its Subsidiaries of a
character usually insured by companies of established reputation
engaged in the same or a similar business similarly situated are
adequately insured, by financially sound and reputable insurers,
against loss or damage of the kinds and in amounts customarily insured
against by such Persons, and the Company and its Subsidiaries carry,
Page 52
with such insurers in customary amounts, such other insurance as is
usually carried by companies of established reputation engaged in the
same or a similar business similarly situated.
(w) REIT Status. The Company qualifies, and will elect or has
elected to be treated, as a real estate investment trust under
Sections 856 through 860 of the Code and the rules and regulations
thereunder (a "REIT") beginning with its taxable year ending
December 31, 1993. No fact, event or condition has occurred which
could jeopardize the Company's tax status as a REIT.
(x) Year 2000 Issue. The Company and its Subsidiaries have reviewed
the effect of the Year 2000 Issue on the computer software, hardware
and firmware systems and equipment containing embedded microchips
owned or operated by or for the Company and its Subsidiaries or used
or relied upon in the conduct of their business (including systems and
equipment supplied by others or with which such computer systems of
the Company and its Subsidiaries interface). The costs to the Company
and its Subsidiaries of any reprogramming required as a result of the
Year 2000 Issue to permit the proper functioning of such systems and
equipment and the proper processing of data, and the testing of such
reprogramming, and of the reasonably foreseeable consequences of the
Year 2000 Issue to the Company or any of its Subsidiaries (including
reprogramming errors and the failure of systems or equipment supplied
by others) are not reasonably expected to result in a Default or Event
of Default or to have a Material Adverse Effect.
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01 Conditions to the Availability of the Commitment.
-------------------------------------------------
The obligations of each Bank hereunder are subject to, and the Banks'
Commitment shall not become available until the date (the "Effective
Date") on which, each of the following conditions precedent shall have
been satisfied or waived in writing by each of the Banks, and upon
such satisfaction or waiver each Bank will give a written confirmation
of the same to the Company on request:
(a) Credit Agreement. The Administrative Agent shall have received
this Agreement duly executed and delivered by each of the Banks and
the Company.
(b) Notes. The Administrative Agent on behalf of each Bank shall
have received Pro Rata Notes and Swing Line Notes in the principal
amounts set forth in Sections 2.03 and 2.10(c), duly executed and
delivered by the Company.
Page 53
(c) Good Standing Certificates. The Administrative Agent on behalf
of the Banks shall have received from the Company copies of good
standing certificates, dated within five (5) days prior to the date
hereof, confirming the Company's representation as to good standing in
Section 5.01(b).
(d) Secretary's Certificate. The Administrative Agent on behalf of
the Banks shall have received from the Company a certificate from the
Secretary or Assistant Secretary of the Company, dated as of the date
hereof, (i) certifying the incumbency of the officers executing the
Credit Documents and all related documentation, (ii) attaching and
certifying the resolutions of the Board of Directors of the Company
relating to the execution, delivery and performance of this Agreement,
and (iii) attaching and certifying the Certificate of Incorporation
and By-laws of the Company.
(e) Authorizations. The Administrative Agent shall have received
copies of all authorizations, consents, approvals, registrations,
notices, exemptions and licenses with or from Governmental Authorities
and other Persons which are necessary for the borrowing hereunder, the
execution and delivery of the Credit Documents, the performance by the
Company of its obligations hereunder and thereunder.
(f) Opinions of Company Counsel. The Administrative Agent shall have
received the favorable written opinions, dated the date hereof, of
Latham & Watkins, special New York counsel for the Company, in
substantially the form of Exhibit F-1 and of Michael R. Pfeiffer,
General Counsel of the Company, in substantially the form of Exhibit
F-2.
(g) Litigation. There shall not be pending or threatened any action
or proceeding before any court or administrative agency relating to
the lending transactions contemplated by this Agreement or any Note
which, in the judgment of the Administrative Agent or any Bank, could
materially impair the ability of the Company to perform its
obligations hereunder or thereunder.
(h) Other Agreements. The Administrative Agent shall have received
copies of all tax sharing, management and other similar agreements
between the Company and any of its Subsidiaries or Affiliates, which
shall be in form and substance satisfactory to the Administrative
Agent.
(i) Termination of Existing Credit Agreement. The Company shall have
paid (whether with the proceeds of the Initial Loans hereunder or
otherwise) all amounts due by it under the Credit Agreement among the
Company, as Borrower, the Banks named on the signature pages thereof,
the Administrative Agent, as Agent and Swing Line Bank, and BNY
Capital Markets, as Arranger, dated as of November 29, 1994, as
amended and restated as of December 30, 1997, and such Credit
Agreement shall have terminated in accordance with its terms.
Page 54
(j) Subsidiary Guaranty. The Administrative Agent shall have
received one or more duly executed Subsidiary Guaranties, to the
extent required by Section 7.02(e).
(k) Fees. The Administrative Agent shall have received from the
Company the fees set forth in Section 2.04 (for the accounts of the
Banks, except as provided in Section 2.04(b)) and fees of
Administrative Agent's counsel which are due and payable on the
Effective Date.
(l) Other Documents. The Administrative Agent shall have received
such other certificates and documents as the Administrative Agent and
the Banks reasonably may require.
Section 6.02 Conditions to All Loans.
------------------------
The obligations of each Bank in connection with each Loan (including
the Initial Loan) and the obligations of the Swing Line Bank in
connection with each Swing Line Advance (including the first Swing
Line Advance) are subject to the conditions precedent that, on the
date of each such Loan and after giving effect thereto, each of the
following conditions precedent shall have been satisfied or waived in
writing by each Bank, and upon such satisfaction or waiver each Bank
will give a written confirmation of the same to the Company on
request:
(a) Requests. For each Loan, the Administrative Agent shall have
received either a Pro Rata Loan Request in substantially the form of
Exhibit B or a Competitive Loan Request in substantially the form of
Exhibit C-1; for each Swing Line Advance, the Administrative Agent and
the Swing Line Bank shall have received a Swing Line Advance Request
in substantially the form of Exhibit E.
(b) No Default. No Default or Event of Default shall have occurred
and be continuing, and the Administrative Agent shall have received
from the Company a certificate to that effect signed by an authorized
officer of the Company.
(c) Representations and Warranties; Covenants. The representations
and warranties contained in Article V (other than representations and
warranties that speak as of a specific date) shall be true and correct
with the same effect as though such representations and warranties had
been made at the time of such Loan or Swing Line Advance, and the
Administrative Agent shall have received from the Company a
certificate to that effect signed by an authorized officer of the
Company.
Page 55
ARTICLE VII
COVENANTS
Section 7.01 Affirmative Covenants.
----------------------
Until the Termination Date, and thereafter until payment in full of
the Notes and performance of all other obligations of the Company
hereunder (other than Unmatured Surviving Obligations), the Company
will:
(a) Financial Statements; Compliance Certificates. Furnish to the
Administrative Agent and to each Bank:
(i) as soon as available, but in no event more than 60 days
following the end of each fiscal quarter, copies of all
consolidated quarterly balance sheets, income statements
and other financial statements and reports of the Company
and its Subsidiaries, prepared in a format and in scope
consistent with the financial statements and reports of
the Company referenced in Section 5.01(h);
(ii) as soon as available, but in no event more than 105 days
following the end of each fiscal year, a copy of the
annual consolidated audit report and financial statements
relating to the Company and its Subsidiaries, certified by
KPMG LLP, one of the other major nationally recognized
accounting firms or another independent certified public
accountant reasonably satisfactory to the Administrative
Agent, prepared in a format and in scope consistent with
the December 31, 1998 financial statements and reports of
the Company referenced in Section 5.01(h);
(iii) as soon as available, but in no event later than 105 days
following the end of each fiscal year, an annual forecast
for the then-current fiscal year, prepared in a manner and
in the form of the forecast provided on the date of this
Agreement or in such other form as is reasonably
acceptable to the Administrative Agent and the Required
Banks together with an annual rent roll dated the most-
recent December 31;
(iv) together with each of the financial statements delivered
pursuant to clauses (i) and (ii) of this Section 7.01(a),
a certificate of the Chief Financial Officer of the
Company stating whether as of the dates of such financial
statements any event or circumstance exists which
constitutes a Default or Event of Default and, if so,
stating the facts with respect thereto, together with
calculations, where applicable, which establish in
Page 56
reasonable detail the Company's (and where applicable,
each of the Company's Subsidiaries') compliance with the
provisions of this Agreement;
(v) promptly upon receipt thereof, copies of any reports and
management letters submitted to the Company or any of its
Subsidiaries or their accountants in connection with any
annual or interim audit of the books of the Company or its
Subsidiaries, together with the responses thereto, if any;
and
(vi) such additional information, reports or statements as the
Administrative Agent and the Banks from time to time may
reasonably request including but not limited to the
quarterly furnishing to the Administrative Agent of the
most recent Property Management Exception Report in a form
substantially similar to Exhibit G hereto, a list of the
Company's current property portfolio and a list of the
Company's past quarter's acquisitions on an acquisition
cost basis, an appraised value basis (to the extent
available) and a projected annual rent basis.
(b) Notification of Defaults and Adverse Developments. Notify the
Administrative Agent (i) promptly, and in any event not later than
five Business Days after the discovery by any officer of the Company
of the occurrence of any Default or Event of Default; (ii) promptly,
and in any event not later than five Business Days after the discovery
by any officer of the Company of the occurrence of a Material Adverse
Change; (iii) promptly, and in any event not later than ten Business
Days after the discovery by any officer of the Company of any
litigation or proceedings that are (to the knowledge of any executive
officer of the Company) instituted or threatened against the Company
or its Subsidiaries or any of their respective assets that (a) could
reasonably be expected to have a Material Adverse Effect or (b) seeks
to (or is expected to) rescind, terminate, revoke, cancel, withdraw,
suspend, modify or withhold any material license or permit of the
Company or any of the Subsidiaries; (iv) promptly, and in any event
not later than five Business Days after the discovery by any officer
of the Company of the occurrence of each and every event which would
be an Event of Default (or an event which with the giving of notice or
lapse of time or both would be an Event of Default) under any
Indebtedness of the Company or any of its Subsidiaries in a principal
amount in excess of $5,000,000, such notice to include the names and
addresses of the holders of such Indebtedness and the amount thereof
and (v) promptly, and in any event not later than five days after the
end of each calendar quarter in which the Company receives notice of a
change in the rating published by any of the Rating Agencies with
respect to the Company's senior unsecured debt, notice of such change
in rating. Upon receipt of any such notice of Default or adverse
development, the Administrative Agent shall forthwith give notice to
each Bank of the details thereof.
Page 57
(c) Notice of ERISA Events. Within 10 days after the Company or any
ERISA Affiliate knows that any of the events described in the
succeeding two sentences have occurred, the Company shall furnish to
the Administrative Agent a statement signed by a senior officer of the
Company describing such event in reasonable detail and the action, if
any, proposed to be taken with respect thereto. The events referred
to in the preceding sentence are, with respect to any Single Employer
Plan: (i) any reportable event described in Section 4043 of ERISA,
other than a reportable event for which the 30-day notice requirement
has been waived by the PBGC; (ii) the provision to any affected party
as such term is defined in Section 4001 of ERISA of a notice of intent
to terminate the Plan; (iii) the adoption of or amendment to the Plan
if, after giving effect to such amendment, the Plan is a plan
described in Section 4021(b) of ERISA; (iv) receipt of notice of an
application by the PBGC to institute proceedings to terminate the Plan
pursuant to Section 4042 of ERISA; (v) withdrawal from or termination
of the Plan during a plan year for which the Company or any ERISA
Affiliate is or would be subject to liability under Sections 4063 or
4064 of ERISA; (vi) cessation of operations by the Company or any
ERISA Affiliate at a facility under the circumstances described in
Section 4062(e) of ERISA; (vii) adoption of an amendment to the Plan
which would require security to be given to the Plan pursuant to
Section 401(a)(29) of the Code or Section 307 of ERISA; and (viii)
failure by the Company or any ERISA Affiliate to make any payment to
the Plan which would give rise to a lien in favor of the Plan under
Section 414(n) of the Code or 302(f) of ERISA. Such events shall also
include receipt of notice of withdrawal liability pursuant to Section
4202 of ERISA with respect to a Plan that is a multi-employer plan.
(d) Other Reports, Notices and Materials. Furnish to the
Administrative Agent (i) as soon as available copies of reports,
notices and other materials sent to the Company or any of its
Subsidiaries from any Governmental Authority, including the Securities
and Exchange Commission, the Internal Revenue Service and PBGC and
(ii) within 90 days of adoption by the Company's board of directors,
copies of any revisions, supplements, amendments or restatements to
the Real Estate Investment Criteria.
(e) Environmental Matters. (i) Comply, and cause its Subsidiaries to
comply, in all material respects, with all applicable Environmental
Laws, (ii) notify the Administrative Agent promptly after receiving
notice or becoming aware of any order, notice, claim or proceeding
under any Environmental Laws, other than those that are clearly not
material, and (iii) promptly forward to Administrative Agent a copy of
any Environmental Claim, order, notice, permit, application, or any
other communication or report received by Company or any of its
Subsidiaries in connection with any such matters as they may affect
such premises, if material.
(f) Taxes. Pay and discharge, and cause each of its Subsidiaries to
pay and discharge, all taxes, assessments and governmental charges
upon it, its income and its properties prior to the date on which
Page 58
penalties attach thereto, unless and to the extent that (i) such
taxes, assessments and governmental charges shall be contested in good
faith and by appropriate proceedings by the Company or such
Subsidiary, as the case may be, (ii) adequate reserves (in accordance
with GAAP) are maintained by the Company or such Subsidiary, as the
case may be, with respect thereto, and (iii) any failure to pay and
discharge such taxes, assessments and governmental charges could not
have a Material Adverse Effect.
(g) Insurance. Maintain, and cause each of its Subsidiaries to
maintain, insurance with responsible insurance companies against such
risks, on such properties and in such amounts as is customarily
maintained by similar businesses; and file and cause each of its
Subsidiaries to file with the Administrative Agent upon its request or
the request of any Bank a detailed list of the insurance companies,
the amounts and rates of the insurance, the dates of the expiration
thereof and the properties and risks covered thereby.
(h) Corporate Existence. Except as permitted by Section 7.02(c),
maintain, and cause each of its Subsidiaries to maintain, its
existence in good standing and qualify and remain qualified to do
business in each jurisdiction in which the character of the properties
owned or leased by it therein or in which the transaction of its
business is such that the failure to maintain such existence or to
qualify could reasonably be expected to have a Material Adverse
Effect.
(i) Authorizations. Obtain, make and keep in full force and effect
all material authorizations from and registrations with Governmental
Authorities.
(j) Maintenance of Records. Maintain, and cause each of its
Subsidiaries to maintain, complete and accurate books and records in
which full and correct entries in conformity with GAAP shall be made
of all dealings and transactions in its respective business and
activities.
(k) Inspection. Permit, and cause each of its Subsidiaries to
permit, the Administrative Agent and the Banks to have one or more of
their officers and employees, or any other Person designated by the
Administrative Agent or the Banks, visit and inspect any of the
properties of the Company and its Subsidiaries (upon reasonable
request and notice and in accordance with the agreement, if any,
relating to any such property) and to examine the minute books, books
of account and other records of the Company and its Subsidiaries and
make copies thereof or extracts therefrom, and discuss its affairs,
finances and accounts with its officers and, at the request of the
Administrative Agent or the Banks, with the Company's independent
accountants, during normal business hours and at such other reasonable
times and as often as the Administrative Agent or the Banks reasonably
may desire.
Page 59
(l) Conduct of Business. (i) Engage in as its principal business
investing in real estate in the United States, (ii) preserve, renew
and keep in full force and effect all its material contracts, (iii)
preserve, renew and maintain in full force and effect all its
franchises and licenses material to the normal conduct of its business
as now conducted, and (iv) comply with all of the terms of all
instruments which evidence, secure or govern the Indebtedness of the
Company and its Subsidiaries and all material laws, rules and
regulations of all Governmental Authorities.
(m) Maintenance of Property, Etc. With only such exceptions that
individually or in the aggregate would not have a Material Adverse
Effect, (i) Maintain, keep and preserve and cause each of its
Subsidiaries to maintain, keep and preserve all of its properties in
good repair, working order and condition and from time to time make
all necessary and proper repairs, renewals, replacements, and
improvements thereto (provided that in the properties subject to sale
agreements, to the extent permitted by Section 7.02(c)(iii),
compliance with the terms of such agreement shall be deemed to
constitute compliance with this Section 7.01(m)(i)), and (ii)
maintain, preserve and protect and cause each of its Subsidiaries to
maintain, preserve and protect all franchises, licenses, copyrights,
patents and trademarks material to its business, so that the business
carried on in connection therewith may be properly and advantageously
conducted at all times.
(n) Insurance on Leased Properties. Use its, and cause its
Subsidiaries to use their, commercially reasonable best efforts to
ensure that each lessee of a property owned in whole or in part,
directly or indirectly, by the Company or any Subsidiary, and each
mortgagor of a property on which the Company or any Subsidiary holds a
mortgage, has, and until the Termination Date will keep, in place
adequate insurance which names the Company or such Subsidiary as a
loss payee. For the purposes of the preceding sentence "adequate
insurance" shall mean insurance, with financially sound and reputable
insurers in such amounts and insuring against such risks as are
customarily maintained by similar businesses.
(o) Further Assurances. The Company agrees to do all acts and
things, as may be required by law or as, in the reasonable judgement
of the Administrative Agent, may be necessary or advisable to carry
out the intent and purpose of this Agreement.
(p) Year 2000. Take all necessary action to complete in all material
respects by December 31, 1999, the reprogramming of computer software,
hardware and firmware systems and equipment containing embedded
microchips owned or operated by or for the Company and its
Subsidiaries or used or relied upon in the conduct of their business
(including systems and equipment supplied by others or with which such
systems of the Company or any of its Subsidiaries interface) required
as a result of the Year 2000 Issue to permit the proper functioning of
such computer systems and other equipment and the testing of such
Page 60
systems and equipment, as so reprogrammed. At the request of the
Administrative Agent, the Company shall provide, and shall cause each
of its Subsidiaries to provide, to the Administrative Agent, such
information as may reasonably be requested relating to its compliance
with the preceding sentence.
Section 7.02 Negative Covenants.
-------------------
Until the Termination Date, and thereafter until payment in full of
the Notes and performance of all other obligations of the Company
hereunder (other than Unmatured Surviving Obligations), the Company
will not:
(a) Indebtedness. Create, incur or assume any Indebtedness, except
(i) Indebtedness to the Administrative Agent and the Banks hereunder
and under the Notes, (ii) Indebtedness incurred to pay dividends
enabling the Company to maintain its status as a REIT, (iii)
Indebtedness incurred to purchase Interest Rate Protection Agreements
and (iv) Indebtedness that would otherwise be permitted under the
Credit Documents, provided that, in each of the aforementioned cases,
(A) such Indebtedness is unsecured, (B) the maturity of such
Indebtedness (including all scheduled payments of principal) is later
than the Termination Date (C) such Indebtedness ranks pari passu or
subordinate to the Notes and (D) after giving effect to the incurrence
of such Indebtedness, the Company's and its Subsidiaries interest
coverage ratio on a consolidated basis referred to in Section 7.03(c)
herein for the most recent four-quarter period ending on the ending
date of the Company's last fiscal quarter would have been greater than
2.00:1.00; provided, that the limitations contained in the foregoing
clauses (A) and (B) shall not apply to Indebtedness having an
aggregate principal amount at any time less than 5% of Consolidated
Total Assets. The Company shall not permit any Subsidiary to create,
incur, assume or suffer to exist any Indebtedness except Indebtedness
which does not exceed, at any time, 5.0% of Consolidated Total Assets
("Permitted Subsidiary Indebtedness"), provided that if such Permitted
Subsidiary Indebtedness is secured, (x) the principal amount thereof
shall be applied towards (and shall accordingly limit) the amount of
secured Indebtedness which the Company is permitted to incur pursuant
to the first sentence of this Section 7.02(a), and (y) such secured
Indebtedness shall in addition be permitted by Section 7.02(b).
(b) Mortgages and Pledges. Create, incur, assume or suffer to exist,
or permit any of its Subsidiaries to create, incur, assume or suffer
to exist, any Lien of any kind upon or in any of its property or
assets, whether now owned or hereafter acquired, except that this
Section 7.02(b) shall not apply (i) to Permitted Encumbrances and (ii)
to other Liens securing Indebtedness permitted by Section 7.02(a), if
immediately after giving effect to the incurrence of such Indebtedness
and the application of the proceeds therefrom on a pro forma basis,
Page 61
the aggregate principal amount of all such Indebtedness of the Company
and its Subsidiaries on a consolidated basis determined in accordance
with GAAP is not greater than 5% of Consolidated Total Assets.
(c) Merger, Acquisition or Sales of Assets. (i) Acquire, or permit
any of its Subsidiaries to acquire, all or any substantial portion of
the assets of any Person other than (a) the acquisition of property in
the ordinary course of the Company's business; or (b) the acquisition
of the equity interests of an entity for the purpose of controlling
the property of that entity in the ordinary course of the Company's
business, provided that the aggregate purchase price paid by the
Company in all transactions under this clause (b) and clause (ii)(b)
below shall not exceed 10% of Consolidated Total Assets as of June 30,
1999; (ii) enter into any merger or consolidation, or permit any
Subsidiary to do so, other than (a) a merger or consolidation of a
Wholly Owned Subsidiary with one or more other Wholly Owned
Subsidiaries or into the Company, (b) a merger or consolidation of a
Subsidiary or the Company with an entity for the purpose of
controlling the property of that entity in the ordinary course of the
Company's business, provided that the aggregate purchase price paid by
the Company in all transactions under this clause (b) and clause
(i)(b) above shall not exceed 10% of Consolidated Total Assets as of
June 30, 1999, or (c) a merger of the Company into another corporation
primarily for the purpose of changing the jurisdiction of
incorporation of the Company, provided that the surviving entity shall
assume all obligations of the Company hereunder; or (iii) sell, lease
or otherwise dispose of any assets of the Company or any of the
Subsidiaries other than in the ordinary course of the Company's
business for the fair market value thereof.
(d) Negative Pledge. Grant any Person a negative pledge on any
assets of the Company or of the Subsidiaries, except as may be
provided in (i) any Permitted Subsidiary Indebtedness and (ii)
Indebtedness permitted by Section 7.02(a) having an aggregate
principal amount not exceeding $25,000,000.
(e) Loans and Investments. Purchase or acquire the obligations or
stock of, or any other interest in, or make loans, advances or capital
contributions to, or form any joint ventures or partnerships with, any
Person, or permit any Subsidiary so to do, except (i) investments in
real estate which satisfy each of the Real Estate Investment Criteria,
as determined by the Board of Directors from time to time, (ii)
securities issued or directly and fully guaranteed or insured by the
United States of America or any agency or instrumentality thereof
(provided that the full faith and credit of the United States of
America is pledged in support thereof) having maturites of not more
than twelve months from the date of acquisition, (iii) U.S. dollar
denominated time deposits, certificates of deposit and bankers'
acceptances of (x) any Bank, (y) any domestic commercial bank of
recognized standing having capital and surplus in excess of
$500,000,000 or (z) any bank (or the parent company of such bank)
whose short-term commercial paper rating from Standard & Poor's
Page 62
Corporation, a division of the McGraw Hill Companies, Inc., ("S&P") is
at least A-1 or the equivalent thereof or from Moody's Investors
Service, Inc. ("Moody's") is at least P-1 or the equivalent thereof
(any such bank, an "Approved Bank"), in each case with maturities of
not more than twelve months from the date of acquisition, (iv)
repurchase obligations with a term of not more than seven days for
underlying securities of the types described in clause (ii) above
entered into with any bank meeting the qualifications specified in
clause (iii) above, (v) commercial paper issued by any Bank or
Approved Bank or by the parent company of any Bank or Approved Bank
and commercial paper issued by, or guaranteed by, any industrial or
financial company or by any agency of the Federal Government with a
short-term commercial paper rating of at least A-1 or the equivalent
thereof by S&P or at least P-1 or the equivalent thereof by Moody's
(any such company, an "Approved Company"), or guaranteed by any
industrial company with a long-term unsecured debt rating of at least
A or A2, or the equivalent of each thereof, from S&P or Moody's, as
the case may be, and in each case maturing within twelve months after
the date of acquisition, (vi) investments in money market funds
substantially all of whose assets are comprised of securities of the
type described in clauses (ii) through (v) above, (vii) capital
contributions to a Subsidiary by the Company or a Subsidiary of the
purchase price for acquisitions by such Subsidiary of properties that
the Company would be allowed to acquire directly under this Agreement,
provided that a Subsidiary Guaranty of the Company's payment
obligations under this Agreement, in the form attached hereto as
Exhibit I, shall remain in full force and effect; (viii) capital
contributions after taking account of any distributions to the
Company, including intercompany loans and advances, to any Subsidiary
that has not provided a Subsidiary Guaranty, provided that such
capital contributions shall not exceed $50,000,000 at any time and
(ix) shares of the Company's common stock; provided, that the Company
shall not spend more than $25,000,000 in the aggregate during the term
of this Agreement in acquiring such shares.
(f) Real Estate Development. Purchase or acquire, or agree (pursuant
to a binding agreement) to purchase or acquire, the obligations or
stock of, or any other interest in, or make loans, advances or capital
contributions to, or form any joint ventures or partnerships with, or
make any other expenditures with respect to, any Real Estate
Development Project, if, in the aggregate, the total project costs
required to be made in connection with all such purchases,
acquisitions, loans, advances, capital contributions or expenditures
would be greater than $100,000,000, at any one time, or permit any
Subsidiary so to do.
(g) Dividends and Purchase of Stock. Declare any dividends (other
than dividends payable in capital stock of the Company) on any shares
of any class of its capital stock, or apply any of its property or
assets to the purchase, redemption or other retirement of, or set
apart any sum for the payment of any dividends on, or for the
purchase, redemption or other retirement of, or make any other
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distribution by reduction of capital or otherwise in respect of, any
shares of any class of capital stock of the Company, or permit any
Subsidiary which is not a Wholly Owned Subsidiary so to do, or permit
any Subsidiary to purchase or acquire any shares of any class of
capital stock of the Company; provided, however, that so long as an
Event of Default pursuant to Section 8.01(a) has not occurred and is
not continuing, the Company may, and may permit its Subsidiaries to,
pay dividends and other distributions with respect to capital stock,
except that this Section 7.02(g) shall not apply to the Company's
expenditure of up to $25,000,000 in the aggregate during the term of
this Agreement for the purchases of its own common stock.
(h) Stock of Subsidiaries. Issue, sell or otherwise dispose of any
shares of capital stock of any Subsidiary (except in connection with
(A) a merger or consolidation of a Wholly Owned Subsidiary permitted
by Section 7.02(c) or with the dissolution of any Subsidiary
(provided, that such dissolution shall not be for the purpose of
avoiding the provisions of this Section 7.02(h)), (B) investments in
Subsidiaries permitted by Section 7.02(e), or (C) the issuance and
sale to Persons other than the Company of an amount not greater than
10% of the outstanding shares of such capital stock in connection with
the formation and capitalization of the Subsidiary described in
Section 7.02(e)(viii), or permit any Subsidiary to issue any
additional shares of its capital stock except to its existing
stockholders.
(i) Terms of Indebtedness. Unless otherwise expressly permitted by
this Agreement, amend or modify, or permit to be amended or modified
the terms of any Company or Subsidiary Indebtedness for borrowed money
or any documents relating thereto in a manner which would (i) increase
the principal amount of such Indebtedness, (ii) increase the interest
borne by such Indebtedness, (iii) shorten the maturity of such
Indebtedness or (iv) elevate, in relation to the Loans and Swing Line
Advances, the ranking in terms of payment of such Indebtedness,
without prior written consent of the Administrative Agent.
(j) Certain Amendments. Amend or modify (i) the Company's
certificate of incorporation, (ii) the Real Estate Investment Criteria
to a material degree or (iii) without the approval of the independent
members of the Company's board of directors, any tax sharing,
management or other similar agreement between or among the Company and
any of its Subsidiaries.
(k) Transactions with Affiliates. Enter into any transactions,
including without limitation, the purchase, sale or exchange of
property or the rendering of any service, with any Affiliate, or
permit any Subsidiary so to do, except in the ordinary course of and
pursuant to the reasonable requirements of its business and upon the
approval of a majority of the disinterested members of the board of
directors or a committee of such disinterested members.
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(l) Mortgage Financings. Enter into any mortgage financings, as a
borrower thereunder, except that this Section 7.02(l) shall not apply
to mortgage financings involving a Lien on any real estate assets of
the Company or a Subsidiary to the extent permitted by Section
7.02(b).
(m) Significant Properties. Without the prior written consent of the
Required Banks (which consent shall not be unreasonably withheld, and
which consent the Banks and the Administrative Agent shall use their
best efforts to grant or deny within 10 Business Days of receipt by
the Administrative Agent of the Company's written request therefor,
provided that the failure to grant, deny or explain the inability to
make a determination about such consent for 20 Business Days after the
Administrative Agent's receipt of the Company's request shall be
deemed to constitute a grant of such consent), purchase or acquire an
interest in (i) multi-tenant office buildings, (ii) hotels, motels,
bowling alleys or mobile home parks or (iii) any individual lot of
property the price of which exceeds $25,000,000 or two contiguous lots
occupied by more than one tenant, the price of which exceeds
$50,000,000.
(n) Industry and Tenant Concentration. (i) Permit, at any time, its
tenants conducting business in any one industry (determined by the SIC
Code) to comprise more than 25% of total Consolidated Annualized Base
Rent (measured on a quarterly basis and detailed on the compliance
certificate issued in accordance with Section 6.02(c)), provided that
in the case of the child care industry, the Company shall not permit,
at any time, its tenants conducting business in the child care
industry to comprise more than 30% of total Consolidated Annualized
Base Rent (measured at the end of each fiscal quarter and detailed on
the compliance certificate issued in accordance with Section 6.02(c))
or (ii) permit, at any time, any one of its tenants to comprise more
than 15% of total Consolidated Annualized Base Rent (measured at the
end of each fiscal quarter and detailed on the compliance certificate
issued in accordance with Section 6.02(c)), provided that in the case
of Children's World Learning Centers, the Company shall not permit, at
any time, Children's World Learning Centers to comprise more than 20%
of total Consolidated Annualized Base Rent (measured at the end of
each fiscal quarter and detailed on the compliance certificate issued
in accordance with Section 6.02(c)).
Section 7.03 Financial Covenants.
--------------------
Until the Termination Date, and thereafter until payment in full of
the Notes and performance of all other obligations of the Company
hereunder (other than Unmatured Surviving Obligations),
(a) Tangible Stockholders' Equity. The Company will maintain
Consolidated Tangible Stockholders' Equity of not less than the sum of
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(i) $400,000,000 plus (ii) 75% of the sum of the net proceeds received
by the Company after December 31, 1999 from any offering of its equity
securities.
(b) Leverage Ratio. The Company will maintain, as measured at the
end of each fiscal quarter, a Leverage Ratio of not more than
1.00:1.00.
(c) Interest Coverage Ratio. The Company will not permit the ratio
of (i) the sum of Consolidated Funds from Operations and Consolidated
Interest Expense to (ii) Consolidated Interest Expense for the four
quarter period ending on the last day of each fiscal quarter to be
less than 2.00:1.00.
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01 Events of Default.
------------------
If one or more of the following events (each, an "Event of Default")
shall occur:
(a) Default shall be made in the payment of any installment of
principal of any Loan or Swing Line Advance when due and payable,
whether at maturity, by notice of intention to prepay or otherwise; or
default shall be made in the payment of any installment of interest
upon any Loan or Swing Line Advance when due and payable, and such
default shall have continued for five days; or
(b) Default shall be made in the payment of the Facility Fee or any
other fee or amount payable hereunder when due and payable and such
default shall have continued for five days; or
(c) Default shall be made in the due observance or performance of any
term, covenant, or agreement contained in Section 7.01(j) or in
Section 7.03; or
(d) Default shall be made in the due observance or performance of any
other term, covenant or agreement contained in this Agreement, and
such default shall have continued unremedied for a period of 30 days
after any officer of the Company becomes aware, or should have become
aware, of such default; or
(e) Any representation or warranty made or deemed made by the Company
herein or any statement or representation made in any certificate or
report delivered by or on behalf of the Company in connection herewith
or in connection with any Note shall prove to have been false or
misleading in any material respect when made; or
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(f) Any obligation (other than its obligation hereunder) of the
Company or any of its Subsidiaries for the payment of Indebtedness in
excess of $1,000,000 is not paid when due or within any grace period
for the payment therefor or becomes or is declared to be due and
payable prior to the expressed maturity thereof, or there shall have
occurred an event which, with the giving of notice or lapse of time,
or both, would cause any such obligation to become, or allow any such
obligation to be declared to be, due and payable; or
(g) An involuntary case or other proceeding shall be commenced
against the Company or any Subsidiary seeking liquidation,
reorganization or other relief with respect to it or its debts under
any applicable Federal or State bankruptcy, insolvency, reorganization
or similar law now or hereafter in effect or seeking the appointment
of a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and
unstayed, or an order or decree approving or ordering any of the
foregoing shall be entered and continued unstayed and in effect, in
any such event, for a period of 60 days; or
(h) The commencement by the Company or any of its Subsidiaries of a
voluntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or of any
other case or proceeding to be adjudicated a bankrupt or insolvent, or
the consent by any of them to the entry of a decree or order for
relief in respect of the Company or any of its Subsidiaries in an
involuntary case or proceeding under any applicable Federal or State
bankruptcy, insolvency, reorganization or other similar law or to the
commencement of any bankruptcy or insolvency case or proceeding
against any of them, or the filing by any of them of a petition or
answer or consent seeking reorganization or relief under any
applicable Federal or State law, or the consent by any of them to the
filing of such petition or to the appointment of or taking possession
by a custodian, receiver, liquidator, assignee, trustee, sequestrator
or similar official of the Company or any of its Subsidiaries or any
substantial part of their respective property, or the making by any of
them of an assignment for the benefit of creditors, or the admission
by any of them in writing of inability to pay their debts generally as
they become due, or the taking of corporate action by the Company or
any of its Subsidiaries in furtherance of any such action; or
(i) One or more judgments against the Company or any of its
Subsidiaries or attachments against its property, which in the
aggregate exceed $1,000,000, or the operation or result of which could
be to interfere materially and adversely with the conduct of the
business of the Company or any of its Subsidiaries, remain unpaid,
unstayed on appeal, undischarged, unbonded, or undismissed for a
period of 30 days; or
(j) With respect to any Single-Employer Plan, any of the following
shall occur: (A) the provision to any affected party as such term is
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defined in Section 4001 of ERISA of a notice of intent to terminate
the Plan, the adoption of an amendment to the Plan if, after giving
effect thereto, the Plan is a plan described in Section 4021(b) of
ERISA, receipt of notice of an application by the PBGC to institute
proceedings to terminate the Plan pursuant to Section 4042 of ERISA,
or any reportable event described in Section 4043 of ERISA (other than
a reportable event for which the 30-day notice requirement has been
waived by the PBGC); in each case, if the amount of unfunded benefit
liabilities, as such term is defined in Section 4001(a)(18) of ERISA,
of the Plan as of the date such event occurs is more than $5,000,000,
(B) the Company or any ERISA Affiliate incurs liability under Sections
4062(e), 4063 or 4064 of ERISA in an amount in excess of $5,000,000,
(C) an amendment is adopted to the Plan which would require security
to be given to the Plan pursuant to Section 401(a)(29) of the Code or
Section 307 of ERISA in an amount in excess of $5,000,000, (D) the
Company or any ERISA Affiliate fails to make a payment to the Plan
which would give rise to a lien in favor of the Plan under Section
412(n) of the Code or Section 302(f) of ERISA in an amount in excess
of $5,000,000, or (E) any Person shall engage in any non-exempt
"prohibited transaction" (as defined in Section 406 or 407 of ERISA or
Section 4975 of the Code) involving any Plan, in an amount in excess
of $5,000,000; or
(k) With respect to any Plan that is a multi-employer plan within the
meaning of Section 4001(a)(3) of ERISA, any of the following shall
occur: (A) the Company or any ERISA Affiliate shall be in "default"
as defined in Section 4219(c)(5) of ERISA with respect to payments in
excess of $5,000,000 owing to such Plan as a result of the Company's
or such ERISA Affiliate's complete or partial withdrawal from such
Plan within the meaning of Sections 4203 and 4205 of ERISA,
respectively, or (B) the Company or any ERISA Affiliate shall be
delinquent in making contributions to such Plan in accordance with
Section 515 of ERISA in an amount in excess of $5,000,000.
(l) Any court or governmental or regulatory authority shall have
enacted, issued, promulgated, enforced or entered any statute, rule,
regulation, judgment, decree, injunction or other order (whether
temporary, preliminary or permanent) which is in effect and which
prohibits, enjoins or otherwise restricts in a manner that would have
a Material Adverse Effect on any of the lending transactions
contemplated under the Credit Documents; or
(m) The Company shall fail to maintain its status as a "real estate
investment trust", as such term is defined in the Code;
(n) There shall occur a Change of Control; or
(o) Thomas A. Lewis is terminated or resigns and is not replaced,
within the twelve-month period following such termination or
resignation, with a person having qualifications reasonably acceptable
to Required Lenders;
Page 68
then (i) upon the happening of any of the foregoing Events of Default,
the obligation of the Banks to make any further Loans or the
obligation of the Swing Line Bank to make any further Swing Line
Advances under this Agreement shall terminate upon declaration to that
effect delivered by the Administrative Agent or the Required Banks to
the Company and (ii) upon the happening of any of the foregoing Events
of Default which shall be continuing, the Notes and the Swing Line
Advances shall become and be immediately due and payable upon
declaration to that effect delivered by the Administrative Agent or
the Required Banks to the Company; provided that upon the happening of
any event specified in Section 8.01(g) or (h), the Notes and Swing
Line Advances shall become immediately due and payable and the
obligation of the Banks to make any further Loans and the obligation
of the Swing Line Bank and the other Banks to make any further Swing
Line Advances hereunder shall terminate without declaration or other
notice to the Company. The Company expressly waives any presentment,
demand, protest or other notice of any kind.
ARTICLE IX
THE ADMINISTRATIVE AGENT AND THE BANKS
Section 9.01 The Agency.
-----------
Each Bank appoints The Bank of New York as its Administrative Agent
hereunder and irrevocably authorizes the Administrative Agent to take
such action on its behalf and to exercise such powers hereunder as are
specifically delegated to the Administrative Agent by the terms
hereof, together with such powers as are reasonably incidental hereto,
and the Administrative Agent hereby accepts such appointment subject
to the terms hereof. The relationship between the Administrative
Agent and the Banks shall be that of agent and principal only and
nothing herein shall be construed to constitute the Administrative
Agent a trustee for any Bank nor to impose on the Administrative Agent
duties or obligations other than those expressly provided for herein.
Section 9.02 The Administrative Agent's Duties.
----------------------------------
The Administrative Agent shall promptly forward to each Bank copies,
or notify each Bank as to the contents, of all notices and other
communications received from the Company pursuant to the terms of this
Agreement and the Notes and, in the event that the Company fails to
pay when due the principal of or interest on any Loan, the
Administrative Agent shall promptly give notice thereof to the Banks.
As to any other matter not expressly provided for herein or therein,
the Administrative Agent shall have no duty to act or refrain from
acting with respect to the Company, except upon the instructions of
the Required Banks. The Administrative Agent shall not be bound by
Page 69
any waiver, amendment, supplement, or modification of this Agreement
or any Note which affects its duties hereunder and thereunder, unless
it shall have given its prior written consent thereto. The
Administrative Agent shall have no duty to ascertain or inquire as to
the performance or observance of any of the terms, conditions,
covenants or agreements binding on the Company pursuant to this
Agreement or any Note nor shall it be deemed to have knowledge of the
occurrence of any Default or Event of Default (other than a failure of
the Company to pay when due the principal or interest on any Loan),
unless it shall have received written notice from the Company or a
Bank specifying such Default or Event of Default and stating that such
notice is a "Notice of Default".
Section 9.03 Sharing of Payment and Expenses.
--------------------------------
All funds for the account of the Banks received by the Administrative
Agent in respect of payments made by the Company pursuant to, or from
any Person on account of, this Agreement or any Note shall be
distributed forthwith by the Administrative Agent among the Banks, in
like currency and funds as received, ratably in proportion to their
respective interests therein. In the event that any Bank shall
receive from the Company or any other source any payment of, on
account of, or for or under this Agreement or any Note (whether
received pursuant to the exercise of any right of set-off, banker's
lien, realization upon any security held for or appropriated to such
obligation or otherwise as permitted by law) other than in proportion
to its Pro Rata Share, then such Bank shall purchase from each other
Bank so much of its interest in obligations of the Company as shall be
necessary in order that each Bank shall share such payment with each
of the other Banks in proportion to each Bank's Pro Rata Share;
provided that no Bank shall purchase any interest of any Bank that
does not, to the extent that it may lawfully do so, set-off against
the balance of any deposit accounts maintained with it the obligations
due to it under this Agreement. In the event that any purchasing Bank
shall be required to return any excess payment received by it, the
purchase shall be rescinded and the purchase price restored to the
extent of such return, but without interest.
Section 9.04 The Administrative Agent's Liabilities.
---------------------------------------
Each of the Banks and the Company agrees that (i) neither the
Administrative Agent in such capacity nor any of its officers or
employees shall be liable for any action taken or omitted to be taken
by any of them hereunder except for its or their own gross negligence
or willful misconduct, (ii) neither the Administrative Agent in such
capacity nor any of its officers or employees shall be liable for any
action taken or omitted to be taken by any of them in good faith in
reliance upon the advice of counsel, independent public accountants or
other experts selected by the Administrative Agent, and (iii) the
Page 70
Administrative Agent in such capacity shall be entitled to rely upon
any notice, consent, certificate, statement or other document
(including any telegram, cable, telex, facsimile or telephone
transmission) believed by it to be genuine and correct and to have
been signed and/or sent by the proper Persons.
Section 9.05 The Administrative Agent as a Bank.
-----------------------------------
The Administrative Agent shall have the same rights and powers
hereunder as any other Bank and may exercise the same as though it
were not the Administrative Agent, and the terms "Bank" or "Banks",
unless the context otherwise indicated, include the Administrative
Agent in its individual capacity. The Administrative Agent may,
without any liability to account, maintain deposits or credit balances
for, invest in, lend money to and generally engage in any kind of
banking business with the Company or any Subsidiary or affiliate of
the Company as if it were any other Bank and without any duty to
account therefor to the other Banks.
Section 9.06 Bank Credit Decision.
---------------------
Neither the Administrative Agent nor any of its officers or employees
has any responsibility for, gives any guaranty in respect of, nor
makes any representation to the Banks as to, (i) the condition,
financial or otherwise, of the Company or any Subsidiary thereof or
the truth of any representation or warranty given or made herein or in
any other Credit Document, or in connection herewith or therewith or
(ii) the validity, execution, sufficiency, effectiveness,
construction, adequacy, enforceability or value of this Agreement or
any other Credit Document or any other document or instrument related
hereto or thereto. Except as specifically provided herein and in the
other Credit Documents to which the Administrative Agent is a party,
the Administrative Agent shall have no duty or responsibility, either
initially or on a continuing basis, to provide any Bank with any
credit or other information with respect to the operations, business,
property, condition or creditworthiness of the Company or any of its
Subsidiaries, whether such information comes into the Administrative
Agent's possession on or before the date hereof or at any time
thereafter. Each Bank acknowledges that it has, independently and
without reliance upon the Administrative Agent or any other Bank,
based on such documents and information as it has deemed appropriate,
made its own credit analysis and decision to enter into this
Agreement. Each Bank also acknowledges that it will independently and
without reliance upon the Administrative Agent or any other Bank,
based on such documents and information as it shall deem appropriate
at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement or any Note.
Page 71
Section 9.07 Indemnification.
----------------
Each Bank agrees (which agreement shall survive payment of the Loans
and the Notes) to indemnify the Administrative Agent, to the extent
not reimbursed by the Company, ratably in accordance with its
respective Commitment, from and against any and all liabilities,
obligations, losses, claims, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature
whatsoever which may be imposed on, incurred by, or asserted against
the Administrative Agent in any way relating to or arising out of this
Agreement or any other Credit Document, or any action taken or omitted
to be taken by the Administrative Agent hereunder or thereunder;
provided that no Bank shall be liable for any portion of such
liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements resulting from the
gross negligence or willful misconduct of the Administrative Agent or
any of its officers or employees. Without limiting the foregoing,
each Bank agrees to reimburse the Administrative Agent promptly upon
demand for its ratable share of any out-of-pocket expenses (including
counsel fees) incurred by the Administrative Agent in such capacity in
connection with the preparation, execution or enforcement of, or legal
advice in respect of rights or responsibilities under, this Agreement
or any Note or any amendments or supplements hereto or thereto, to the
extent that the Administrative Agent is not reimbursed for such
expenses by the Company.
Section 9.08 Successor Administrative Agent.
-------------------------------
The Administrative Agent may resign at any time by giving written
notice thereof to the Banks and the Company, and the Administrative
Agent may be removed at any time by the Required Banks by giving
written notice thereof to the Administrative Agent, the other Banks
and the Company at least ten Business Days prior to the effective date
of such removal. Upon any such resignation or removal, the Required
Banks shall have the right to appoint a successor Administrative
Agent. If no successor Administrative Agent shall have been so
appointed by the Required Banks and shall have accepted such
appointment within 30 days after the resigning Administrative Agent's
giving of notice of resignation, or the Required Banks' giving notice
of removal, as the case may be, the resigning Administrative Agent
may, on behalf of the Banks, appoint a successor Administrative Agent,
which shall be a commercial bank organized under the laws of the
United States of America or of any State thereof and having a combined
capital and surplus of at least $250,000,000. Any successor
Administrative Agent appointed pursuant to this Section 9.08 shall be
a Bank hereunder. Upon the acceptance of any appointment as
Administrative Agent hereunder by a successor Administrative Agent,
such successor Administrative Agent shall thereupon succeed to and
become vested with all the rights, powers, privileges and duties of
Page 72
the resigned or removed Administrative Agent, and the resigned or
removed Administrative Agent shall be discharged from its duties and
obligations under this Agreement. After any Administrative Agent's
resignation hereunder as Administrative Agent, the provisions of this
Article IX shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement.
ARTICLE X
CONSENT TO JURISDICTION
Section 10.01 Consent to Jurisdiction.
------------------------
The Company hereby irrevocably submits to the non-exclusive
jurisdiction of the State and Federal courts located in The City of
New York for the purpose of any suit, action, proceeding or judgment
relating to or arising out of this Agreement and each Note. The
Company hereby irrevocably appoints CT Corporation System, with
offices on the date hereof at 111 Eighth Avenue, New York, New York
10011, as its authorized agent on whom process may be served in any
action which may be instituted against it by the Administrative Agent
or the Banks in any state or federal court in the Borough of
Manhattan, The City of New York, arising out of or relating to any
Loan or this Agreement and each Note. Service of process upon such
authorized agent and written notice of such service to the Company
shall be deemed in every respect effective service of process upon the
Company, and the Company hereby irrevocably consents to the
jurisdiction of any such court in any such action and to the laying of
venue in the Borough of Manhattan, The City of New York. The Company
hereby irrevocably waives any objection to the laying of the venue of
any such suit, action or proceeding brought in the aforesaid courts
and hereby irrevocably waives any claim that any such suit, action or
proceeding brought in any such court has been brought in an
inconvenient forum. Notwithstanding the foregoing, nothing herein
shall in any way affect the right of the Administrative Agent or any
Bank to bring any action arising out of or relating to the Loans or
this Agreement and each Note in any competent court elsewhere having
jurisdiction over the Company or its property.
ARTICLE XI
MISCELLANEOUS
Section 11.01 APPLICABLE LAW.
---------------
THIS AGREEMENT SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAW OF THE STATE OF NEW YORK, UNITED STATES OF AMERICA.
Page 73
Section 11.02 Set-off.
--------
Each Bank is authorized to set off and apply any and all deposits at
any time held by such Bank against obligations of the Company under
the Credit Documents.
Section 11.03 Expenses.
---------
The Company agrees to pay (i) all reasonable out-of-pocket expenses of
the Administrative Agent (including, without limitation, all
reasonable fees and expenses of Winthrop, Stimson, Putnam & Roberts,
as counsel to the Administrative Agent) in connection with the
preparation of this Agreement and the other Credit Documents and any
amendments, supplements or modifications hereto or thereto, (ii) all
reasonable out-of-pocket expenses incurred by the Administrative
Agent, the Swing Line Bank and any Bank, including fees and expenses
of counsel, in connection with the enforcement of, and the protection
of their rights under, any provisions of this Agreement, the Notes or
any amendment or supplement hereto or thereto, whether or not any loan
is made hereunder, and (iii) all reasonable out-of-pocket expenses of
the Administrative Agent, including reasonable fees and disbursements
of counsel, in connection with the syndication of the Loans. The
Company shall pay any transfer taxes, documentary taxes, assessments
or charges made by any Governmental Authority by reason of the
execution and delivery of this Agreement or the Notes incurred up to
and including the date of this Agreement.
Section 11.04 Amendments.
-----------
Any provision of this Agreement or the Notes may be amended or waived
if, but only if, such amendment or waiver is in writing and is signed
by (A) in the case of amendments or waivers relating to Section
7.03(a), (b) or (c), Banks having at least 66 2/3% of the Total
Commitment or, if the Total Commitment has been cancelled or
terminated, holding Notes evidencing at least 66 2/3% of the aggregate
unpaid principal amount of the Loans and (B) in all other cases, the
Company and the Required Banks (and, if the rights or duties of the
Administrative Agent or the Swing Line Bank are affected thereby, by
the Administrative Agent and the Swing Line Bank, respectively);
provided that no such amendment, waiver or modification shall, unless
signed by all the Banks, (i) increase or decrease the Commitment of
any Bank, subject any Bank to any additional obligation or change the
several nature of the obligations of each Bank, (ii) reduce the
principal of or rate of interest on any Loan (other than interest
payable pursuant to Section 3.06) or any fees hereunder, (iii) except
as otherwise provided in Section 11.12, postpone the date fixed for
any payment of principal of or interest on any Loan or any fees
hereunder or for any reduction or termination of any Commitment, (iv)
Page 74
except as otherwise may result from actions taken in accordance with
Section 11.12, change the percentage of any of the Commitments or of
the aggregate unpaid principal amount of the Notes or Swing Line
Advances, or the number 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, or (v) amend or waive the
provisions of Article IV or of this Section 11.04.
Section 11.05 Cumulative Rights and No Waiver.
--------------------------------
Each and every right granted to the Administrative Agent, the Swing
Line Bank and the Banks hereunder or under any other document
delivered hereunder or in connection herewith, or allowed them by law
or equity, shall be cumulative and may be exercised from time to time.
No failure on the part of the Administrative Agent, the Swing Line
Bank or any Bank to exercise, and no delay in exercising, any right
will operate as a waiver thereof, nor will any single or partial
exercise by the Administrative Agent, the Swing Line Bank or any Bank
of any right preclude any other or future exercise thereof or the
exercise of any other right.
Section 11.06 Notices.
--------
Any communication, demand or notice to be given hereunder or with
respect to the Notes will be duly given when delivered in writing or
by telecopy to a party at its address as indicated below, except that
notices from the Company pursuant to Section 2.02 will not be
effective until received by the Administrative Agent.
A communication, demand or notice given pursuant to this Section 11.06
shall be addressed:
If to the Company, at
220 West Crest Street
Escondido, California 92025-1707
Telecopy: (760) 741-8674
Attention: Legal Department
If to the Administrative Agent or the Swing Line Bank, at its address
as indicated on the signature pages hereof, with a copy to:
BNY Capital Markets, Inc.
One Wall Street
New York, New York 10286
Telecopy: (212) 635-6365
Attention: Agency Function Administration
Kalyani Bose
If to any Bank, at its address as indicated on the signature pages
hereof.
Page 75
Unless otherwise provided to the contrary herein, any notice which is
required to be given in writing pursuant to the terms of this
Agreement may be given by telex, telecopy or facsimile transmission.
Section 11.07 Separability.
-------------
In case any one or more of the provisions contained in this Agreement
shall be invalid, illegal or unenforceable in any respect under any
law, the validity, legality and enforceability of the remaining
provisions contained herein shall not in any way be affected or
impaired thereby.
Section 11.08 Assignments and Participations.
-------------------------------
(a) This Agreement shall be binding upon and inure to the benefit of
the Company, the Swing Line Bank and the Banks and their respective
successors and assigns, except that the Company may not assign any of
its rights hereunder without the prior written consent of the Banks.
(b) Any Bank may at any time grant to one or more banks or other
institutions (each a "Participant") participating interests in its
Commitment or any or all of its Loans. In the event of any such grant
by a Bank of a participating interest to a Participant, whether or not
upon notice to the Company and the Administrative Agent, such Bank
shall remain responsible for the performance of its obligations
hereunder, and the Company and the Administrative Agent shall continue
to deal solely and directly with such Bank in connection with such
Bank's rights and obligations under this Agreement. Any agreement
pursuant to which any Bank may grant such a participating interest
shall provide that such Bank shall retain the sole right and
responsibility to enforce the obligations of the Company hereunder
including the right to approve any amendment, modification or waiver
of any provision of this Agreement; provided that such participation
agreement may provide that such Bank will not agree to any
modification, amendment or waiver of this Agreement described in
clauses (i) through (v), inclusive, of Section 11.04 without the
consent of the Participant. Subject to Section 11.08(e), the Company
agrees that each Participant shall be entitled to the benefits of
Sections 4.03, 4.04 and 11.04 with respect to its participating
interest. An assignment or other transfer which is not permitted by
clause (c) below shall be given effect for purposes of this Agreement
only to the extent of a participating interest granted in accordance
with this clause (b).
(c) Any Bank may at any time assign to one or more banks or other
institutions (each an "Assignee") all, or (except insofar as such
assignment relates to Competitive Loans) a proportionate part of all,
of its rights and obligations under this Agreement and the Notes, and
such Assignee shall assume such rights and obligations, pursuant to an
Page 76
instrument executed by such Assignee and such transferor Bank, with
(and subject to) the signed consents of the Company and the
Administrative Agent and the Swing Line Bank (which consents shall not
be unreasonably withheld or delayed); provided, however, any such
assignment shall be in the minimum aggregate amount of $10,000,000;
provided, further, that the foregoing consent requirement shall not be
applicable in the case of, and this subsection (c) shall not restrict,
an assignment of all, or (except insofar as such assignment relates to
Competitive Loans) a proportionate part of all, of its rights and
obligations under this Agreement and the Notes by any Bank to an
Affiliate of such Bank or a pledge and assignment of all, or (except
insofar as such assignment relates to Competitive Loans) a
proportionate part of all, of its rights and obligations under this
Agreement and the Notes to a Federal Reserve Bank as collateral; and
provided, further, that no consent of the Company shall be required if
an Event of Default has occurred and is continuing. Upon (i)
execution and delivery of such an instrument, (ii) 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 (iii)
payment by the transferee Bank or transferor Bank to the
Administrative Agent of an administrative fee in the amount of $3,500
(except that no such fee shall be payable in connection with a
transfer or pledge to an Affiliate of a Bank or to a Federal Reserve
Bank referred to in the proviso above), such Assignee shall be a Bank
party to this Agreement and shall have all the rights and obligations
of a Bank with a Commitment as set forth in such instrument of
assumption, and the transferor Bank (and the Company as to the
transferor Bank) shall be released from its obligations hereunder to a
corresponding extent, and no further consent or action by any party
shall be required. Upon the consummation of any assignment pursuant
to this subsection (c), the transferor Bank, the Administrative Agent
and the Company shall make appropriate arrangements so that, if
required, new Notes are issued to the Assignee.
(d) No Assignee, Participant or other transferee of any Bank's rights
shall be entitled to receive any greater payment under Section 4.03 or
4.04 than such Bank would have been entitled to receive with respect
to the rights transferred, unless such transfer is made (i) with the
Company's prior written consent, (ii) in the circumstances referred to
in the third proviso to the first sentence of the preceding paragraph
(c) or (iii) by reason of the provisions of Section 4.04 requiring
such Bank to designate a different lending office under certain
circumstances or at a time when the circumstances giving rise to such
payment did not exist.
(e) No Participant of any Bank shall be entitled to receive any
greater payment under Section 4.03, Section 4.04 or Section 11.04 than
such Bank would have been entitled to receive if it had not granted a
participation to such Participant.
Page 77
Section 11.09 WAIVER OF JURY TRIAL.
---------------------
THE COMPANY, THE ADMINISTRATIVE AGENT AND EACH OF THE BANKS HEREBY
WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING ANY CLAIM
(WHETHER SOUNDING IN CONTRACT, TORT, APPLICABLE LAW OR OTHERWISE)
ARISING OUT OF OR IN ANY WAY RELATING TO (AND WHENEVER ARISING) THIS
AGREEMENT, THE NOTES OR THE TRANSACTIONS CONTEMPLATED HEREBY.
Section 11.10 Confidentiality.
----------------
Except as may be required to enforce the rights and duties established
hereunder, the parties hereto shall preserve in a confidential manner
all information received from the other pursuant to this Agreement,
the Notes and the transactions contemplated hereunder and thereunder,
and shall not disclose such information except to those persons with
which a confidential relationship is maintained (including regulators,
legal counsel, accountants, or designated agents), or where required
by law. Nothing in this paragraph shall prevent the filing of this
Agreement with the Securities and Exchange Commission.
Section 11.11 Indemnity.
----------
The Company agrees to indemnify the Administrative Agent, the
Arranger, the Swing Line Bank and each of the Banks and their
respective directors, officers, employees and agents (each such person
being called an "Indemnitee") against, and to hold each Indemnitee
harmless from, any and all losses, claims, damages and liabilities of
any party other than the Company and related expenses, including
reasonable counsel fees and expenses incurred by or asserted against
any Indemnitee arising out of, in any way connected with, or as a
result of (i) the execution or delivery of this Agreement or any Note
or any agreement or instrument contemplated hereby or thereby, the
performance by the parties hereto or thereto of their respective
obligations hereunder or thereunder or the consummation of the
transactions and the other transactions contemplated hereby or
thereby, (ii) the use of the proceeds of the Loans or (iii) any claim,
litigation, investigation or proceeding relating to any of the
foregoing, whether or not any Indemnitee is a party thereto and
notwithstanding that any claim, proceeding, investigation or
litigation relating to any such losses, claims, damages, liabilities
or expenses is or was brought by a stockholder, creditor, employee or
officer of the Company; provided that such indemnity shall not, as to
any Indemnitee, be available to the extent that such losses, claims,
damages, liabilities or related expenses are determined by a court of
competent jurisdiction by final and nonappealable judgment to have
resulted from the gross negligence or willful misconduct of any
Indemnitee or from the breach by any Indemnitee of its obligations
hereunder or with respect to claims or actions solely between or among
Page 78
the Banks relating to this Agreement or the transactions contemplated
hereby and provided further, that such Indemnity shall not apply to
any loss, claim, damage, or liability or related expense incurred as a
consequence of any additional costs (as contemplated by Section
4.04(b)) or any Tax, which shall be governed by the provisions of
Section 4.04(b) and (a), respectively.
The provisions of this Section 11.11 shall remain operative and in
full force and effect regardless of the expiration of the term of this
Agreement, the consummation of the transactions contemplated hereby,
the repayment of any of the Loans, the reduction or cancellation of
the Commitment, the invalidity or unenforceability of any term or
provision of this Agreement or any Note, or any investigation made by
or on behalf of the Banks. All amounts due under this Section 11.11
shall be payable in immediately available funds upon written demand
therefor.
Section 11.12 Extension of Termination Dates; Removal of Banks;
Substitutions of Banks.
-------------------------------------------------
(a) (i) No earlier than the first anniversary of the Effective
Date and no later than 120 days prior to the scheduled
Termination Date, the Company may, at its option, request
all the Banks then party to this Agreement to extend their
scheduled Termination Dates by one calendar year by means
of a letter, addressed to each such Bank and the
Administrative Agent. If such a request is accepted and
the Termination Date is extended pursuant to subsection
11.12(a)(ii), the Company may, at its option, no earlier
than the date one year after the first request for
extension and no later than 120 days prior to the
rescheduled Termination Date, make one further request
that all the Banks then party to this Agreement to extend
their scheduled Termination Dates by one additional year
in the same manner, subject to the provisions of
subsection 11.12(a)(ii); provided that in no event shall
the Termination Date be extended to a date which is later
than the fifth anniversary of the Effective Date.
(ii) Each Bank electing (in its sole discretion) so to extend
its scheduled Termination Date shall execute and deliver
within forty-five (45) days following such request
counterparts of such letter to the Company and the
Administrative Agent, whereupon (unless Banks with an
aggregate percentage of the Total Commitment in excess of
33 1/3% decline to extend their respective scheduled
Termination Dates, in which event the Administrative Agent
shall notify all the Banks thereof), such Bank's scheduled
Termination Date shall be extended to the anniversary date
of the year immediately succeeding such Bank's then-
Page 79
current scheduled Termination Date. If no such election
is received within such forty-five day period from any
Bank, such Bank shall be deemed to have elected not to
extend its scheduled Termination Date.
(b) With respect to any Bank which has declined to extend such Bank's
scheduled Termination Date and if Banks with an aggregate percentage
of the Total Commitment in excess of 33 1/3% have not declined to
extend their respective Termination Dates, the Company may in its
discretion, upon not less than 30 days' prior written notice to the
Administrative Agent and each Bank, remove such Bank as a party
hereto. Each such notice shall specify the date of such removal
(which shall be a Business Day), which shall thereupon become the
scheduled Termination Date for such Bank.
(c) In the event that any Bank does not extend its scheduled
Termination Date pursuant to subsection (a) above or is the subject of
a notice of removal pursuant to subsection (b) above, then, at any
time prior to the Termination Date for such Bank (a "Terminating
Bank"), the Company may, at its option, arrange to have one or more
other financial institutions acceptable to the Administrative Agent
(which may be a Bank or Banks and each of which shall herein be called
a "Successor Bank") succeed to all or a percentage of the Terminating
Bank's outstanding Loans, if any, and rights under this Agreement and
assume all or a like percentage (as the case may be) of such
Terminating Bank's Commitment and other obligations hereunder, as if
(i) in the case of any Bank electing not to extend its scheduled
Termination Date pursuant to subsection (a) above, such Successor Bank
had extended its scheduled Termination Date pursuant to such
subsection (a) and (ii) in the case of any Bank that is the subject of
a notice of removal pursuant to subsection (b) above, no such notice
of removal had been given by the Company. Such succession and
assumption shall be effected by means of one or more agreements
supplemental to this Agreement among the Terminating Bank, the
Successor Bank, the Company and the Administrative Agent. On and as
of the effective date of each such supplemental agreement, each
Successor Bank party thereto shall be and become a Bank for all
purposes of this Agreement and to the same extent as any other Bank
hereunder and shall be bound by and entitled to the benefits of this
Agreement in the same manner as any other Bank.
(d) On the originally scheduled Termination Date for any Terminating
Bank, such Terminating Bank's Commitment shall terminate and, except
to the extent assigned pursuant to subsection (c) above, the Company
shall pay in full all of such Terminating Bank's Loans and all other
amounts payable to such Bank hereunder, including any amounts payable
pursuant to Section 4.03 on account of such payment.
(e) To the extent that all or a portion of any Terminating Bank's
obligations are not assumed pursuant to subsection (c) above, the
Total Commitment shall be reduced on the applicable Termination Date
and each Bank's percentage of the reduced Total Commitment shall be
revised pro rata to reflect such Terminating Bank's absence.
Page 80
Section 11.13 Knowledge of the Company.
-------------------------
As used in this Agreement, knowledge of the Company shall mean to the
best of any executive officer's knowledge, after a reasonable
investigation.
Section 11.14 Execution in Counterparts.
--------------------------
This Agreement may be executed in any number of counterparts and by
the different parties hereto on separate counterparts, each of which
when so executed and delivered shall be an original, but all the
counterparts shall together constitute one and the same instrument.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to
be duly executed as of the date first above written.
REALTY INCOME CORPORATION
By:
--------------------------------
Name: Michael R. Pfeiffer
Title: Senior Vice President,
General Counsel
THE BANK OF NEW YORK,
as Administrative Agent for the Banks
By:
--------------------------------
Name: Elizabeth Ying
Title: Vice President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn: Kalyani Bose
Agency Function Administration
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1125
Los Angeles, CA 90024
Attn: Elizabeth Ying
Vice President
Fax: (310) 996-8667
Page 81
THE BANK OF NEW YORK,
as a Bank and as the Swing Line Bank
By:
--------------------------------
Name: Elizabeth Ying
Title: Vice President
Address for Notices:
One Wall Street
18th Floor
New York, NY 10286
Attn: Kalyani Bose
Agency Function Administration
Fax: (212) 635-6365
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1125
Los Angeles, CA 90024
Attn: Elizabeth Ying
Vice President
Fax: (310) 996-8667
Eurodollar Lending Office:
One Wall Street
18th Floor
New York, NY 10286
Attn: Kalyani Bose
Agency Function Administration
Fax: (212) 635-6365
Page 82
FIRST UNION NATIONAL BANK
By:
--------------------------------
Name:
Title:
Address for Notices:
First Union Capital Markets
One First Union Center
Charlotte, NC 28288
Attn: Joy Auten
Fax: (704) 383-7989
Eurodollar Lending Office:
First Union Capital Markets
One First Union Center
Charlotte, NC 28288
Attn: Joy Auten
Fax: (704) 383-7989
Page 83
WELLS FARGO BANK, NATIONAL
ASSOCIATION
By:
--------------------------------
Name:
Title:
Address for Notices:
Disbursement Administrator
Disbursement & Operations Center
2120 East Park Place #100
El Secundo, CA 90245
Attn: Carla Tittle
Fax: (310) 615-1014
Eurodollar Lending Office:
Disbursement Administrator
Disbursement & Operations Center
2120 East Park Place #100
El Secundo, CA 90245
Attn: Carla Tittle
Fax: (310) 615-1014
Page 84
BANK OF MONTREAL
By:
--------------------------------
Name:
Title:
Address for Notices:
Client Services
115 South LaSalle St., 12 West
Chicago, IL 60603
Attn: Josie Nichols
Fax: (312) 750-6061
Eurodollar Lending Office:
115 South LaSalle St., 12 West
Chicago, IL 60603
Attn: Josie Nichols
Fax: (312) 750-6061
Page 85
AMSOUTH BANK
By:
--------------------------------
Name:
Title:
Address for Notices:
Commercial Real Estate
1900 5th Avenue North
Birmingham, AL 35203
Attn: Crystal Cassels
Fax: (205) 326-4075
Eurodollar Lending Office:
1900 5th Avenue North
Birmingham, AL 35203
Attn: Crystal Cassels
Fax: (205) 326-4075
Page 86
SANWA BANK CALIFORNIA, as a Bank
By:
--------------------------------
Name:
Title:
Address for Notices:
Sanwa Bank California
601 South Figueroa St.,
8th Floor
Los Angeles, CA 90017
Attn: Yolanda Banuelos
Fax : (213) 896-7090
Eurodollar Lending Office:
Sanwa Bank California
601 South Figueroa St.,
8th Floor
Los Angeles, CA 90017
Attn: Yolanda Banuelos
Fax: (213) 896-7090
Page 87
CITIZENS BANK OF RHODE ISLAND
By:
--------------------------------
Name:
Title:
Address for Notices:
One Citizens Plaza, CC-4
Providence, RI 02903-1339
Attn: Benita Petres
Syndication
Administration Manger
Fax: (401) 282-4485
Eurodollar Lending Office:
One Citizens Plaza, CC-4
Providence, RI 02903-1339
Attn: Craig Schermerhorn
Vice President
Fax: (401) 282-4485
Page 88
Schedule 1
COMMITMENTS
BANK COMMITMENT
- ---- ----------
The Bank of New York (Administrative Agent) $40,000,000
First Union National Bank (Syndication Agent) $35,000,000
Wells Fargo Bank, N.A. (Documentation Agent) $35,000,000
Bank of Montreal (Co-Agent) $25,000,000
AmSouth Bank $22,500,000
Sanwa Bank California $22,500,000
Citizens Bank of Rhode Island $20,000,000
-----------
Total - All Banks $200,000,000
Page 89
EXHIBIT A
FORM OF CONVERSION/CONTINUANCE REQUEST
--------------------------------------
[Dated as provided
in Section 3.05]
The Bank of New York
One Wall Street, 18th Floor
New York, New York 10286
Attn: Kalyani Bose
Realty Income Corporation (the "Company") hereby gives notice of its
intention to [convert/continue] [$ Principal Amount] [the
entire outstanding amount] of its [ABR Loans] [Eurodollar Pro Rata
Loans] with an Interest Period of days and ending on
, ] [to/as] [ABR Loans] [Eurodollar Pro Rata Loans],
pursuant to the Revolving Credit Agreement, dated as of December ,
1999, among the Company, the Banks and The Bank of New York, as
Administrative Agent and as Swing Line Bank (as amended, supplemented
or otherwise modified from time to time, the "Agreement"), such
[conversion/continuance to be effective as of , ].
[The Interest Period for the Eurodollar Pro Rata Loans shall be
days, with a Scheduled Maturity on .]
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
REALTY INCOME CORPORATION
By:
-------------------------------
Name:
Title:
Page 90
EXHIBIT B
FORM OF PRO RATA LOAN REQUEST
-----------------------------
[Dated as provided
in Section 2.02]
The Bank of New York
One Wall Street, 18th Floor
New York, New York 10286
Attn: Kalyani Bose
Realty Income Corporation (the "Company") hereby gives notice of its
intention to borrow $ of Loans on , pursuant
to the Revolving Credit Agreement, dated as of December , 1999,
among the Company, the Banks and The Bank of New York, as
Administrative Agent and as Swing Line Bank (as amended, supplemented
or otherwise modified from time to time, the "Agreement"). [The
Company hereby requests that such Loan constitute a Eurodollar Pro
Rata Loans with a scheduled maturity of 20 and an Interest
Period of days.]
The Company hereby confirms that the amounts of Loans outstanding on
the date hereof is as follows:
Total Commitment............................ $200,000
Outstanding Pro Rata Loans.................. $
Outstanding Competitive Loans............... $
Availability................................ $
The Company also hereby confirms that each of the representations and
warranties (other than the representations and warranties that speak
as of a specific date) contained in Article V of the Agreement is true
and correct on the date hereof and, after giving effect to this
borrowing, will be true and correct on the proposed borrowing date as
though such representation or warranty had originally been made on
such dates. No Default or Event of Default has occurred and is
continuing, nor will any such event occur as a result of this
borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
REALTY INCOME CORPORATION
By:
-------------------------------
Name:
Title:
Page 91
EXHIBIT C-1
Form of Competitive Loan Request
--------------------------------
[Date]
The Bank of New York, as Administrative Agent
One Wall Street
New York, New York 10286
Attention: Kalyani Bose
Agency Function Administration
Re: Request for Competitive Bids
----------------------------
Reference is made to the Revolving Credit Agreement, dated as of
December , 1999, (as amended, modified or supplemented from time
to time, the "Credit Agreement"), among Realty Income Corporation (the
"Company"), the banks from time to time parties thereto and The Bank
of New York, as Administrative Agent and as Swing Line Bank.
Capitalized terms used herein and not otherwise defined herein shall
have the meanings ascribed to such terms in the Credit Agreement.
The Company hereby gives you notice, pursuant to Section 2.08 of the
Credit Agreement, that it requests the Lenders to make offers to make
Competitive Loans under the Credit Agreement, and in that connection
sets forth below the terms on which such Competitive Loans are
requested to be made:
(A) Borrowing Date (1)
---------------------------
(B) Principal Amount
of Competitive Loan (2)
---------------------------
(C) Maturity Date (3)
---------------------------
(D) Interest rate basis [Absolute Rate][Eurodollar]
---------------------------
(E) Interest Period, if any (4)
---------------------------
Very truly yours,
REALTY INCOME CORPORATION
By:
---------------------------
Title:
Page 92
[FN]
(1) Must be a Business Day.
(2) Must be a principal amount equal to $1,000,000 or in integral
multiples of $100,000 in excess thereof.
(3) At least seven days after the Borrowing Date and not more than
(i) 180 days after the Borrowing Date, in the case of Absolute
Rate Competitive Loans, or (ii) six months after the Borrowing
Date, in the case of Eurodollar Competitive Loans.
(4) One, two, three or six months with respect to Eurodollar
Competitive Loans. Not applicable to Absolute Rate Competitive
Loans.
</FN>
Page 93
EXHIBIT C-2
Form of Notice to Banks
-----------------------
[Date]
[Name of Bank]
[Address]
Attention:
Re: Notice of a Request for Competitive Bids
----------------------------------------
Reference is made to the Revolving Credit Agreement, dated as of
December , 1999 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), among Realty Income Corporation (the
"Company"), the banks from time to time parties thereto and The Bank
of New York, as Administrative Agent and as Swing Line Bank.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
The Company delivered to the Agent a Competitive Loan Request on ,
, pursuant to Section 2.08 of the Credit Agreement, and in that
connection you are invited to submit a Bid to make a Competitive Loan
to the Company by [TIME], on , . Your Bid must comply with
Section 2.08 of the Credit Agreement and the terms set forth below on
which the Competitive Loan Request was made:
(A) Proposed Borrowing Date
--------------------------
(B) Principal amount of Competitive Loan
--------------------------
(C) Interest rate basis [Absolute Rate][Eurodollar]
---------------------------
(E) Interest Period and the last day thereof
---------------------
Very truly yours,
THE BANK OF NEW YORK,
as Agent
By:
------------------------------
Title:
Page 94
EXHIBIT C-3
Form of Competitive Bid
-----------------------
[Date]
The Bank of New York, as Agent
One Wall Street
New York, New York 10286
Attention: Kalyani Bose
Agency Function Administration
Re: Competitive Bid
---------------
Reference is made to the Revolving Credit Agreement, dated as of
December , 1999 (as amended, modified or supplemented from time to
time, the "Credit Agreement"), among Realty Income Corporation (the
"Company"), the lenders from time to time parties thereto and The Bank
of New York, as Administrative Agent and as Swing Line Bank.
Capitalized terms used but not defined herein shall have the meanings
assigned to such terms in the Credit Agreement.
[NAME OF BANK] hereby submits a Competitive Bid to make an [Absolute
Rate] [Eurodollar] Competitive Loan pursuant to Section 2.08 of the
Credit Agreement, in response to the Borrowing Request made by the
Company on , , and in that connection sets forth below
the terms on which such Competitive Bid is made:
(A) Principal Amount (1)
--------------------------
(B) Competitive Bid
--------------------------
(C) Competitive Bid
[Rate][Margin] (2)
--------------------------
The undersigned hereby confirms that it will, subject only to the
conditions set forth in the Credit Agreement, extend credit to the
Borrower upon acceptance by the Borrower of this Competitive Bid in
accordance with Section 2.08 of the Credit Agreement.
Very truly yours,
[NAME OF BANK]
By:
--------------------------
Title:
Page 95
[FN]
(1) Principal amount must be at least $1,000,000, or an integral
multiple of $100,000 in excess thereof, and not greater than the
requested Competitive Loan. Multiple bids may be accepted by the
Agent.
(2) In the case of Absolute Rate Competitive Loans, %; in the
case of Eurodollar Competitive Loans, a margin (+/- % over
LIBOR.
</FN>
Page 96
EXHIBIT C-4
Form of Competitive Bid Accept/Reject Notice
--------------------------------------------
[Date]
The Bank of New York, as Agent
One Wall Street
New York, New York 10286
Attention: Kalyani Bose
Agency Function Administration
Re: Competitive Bid Acceptance/Reject Letter
----------------------------------------
Realty Income Corporation (the "Company") refers to the Revolving
Credit Agreement, dated as of December , 1999 (as amended,
modified or supplemented or extended from time to time, the "Credit
Agreement"), among the Company, the banks from time to time parties
thereto (the "Banks") and The Bank of New York, as Administrative
Agent and as Swing Line Bank.
In accordance with Section 2.08 of the Credit Agreement, we have
received a summary of bids in connection with our Competitive Loan
Request, dated , , and in accordance with Section 2.08
of the Credit Agreement, we hereby accept the following Competitive
Bids for Competitive Loans to be made on , , with a Maturity
Date of , :
Competitive
Principal Amount Rate Margin Bank
- ---------------- ----------- ----
%/+/-. %
We hereby reject the following Competitive Bids:
Competitive
Principal Amount Rate Margin Bank
- ---------------- ----------- ----
%/+/-. %
Very truly yours,
REALTY INCOME CORPORATION
By:
----------------------------
Title:
Page 97
EXHIBIT D-1
FORM OF PRO RATA NOTE
---------------------
$ December , 1999
Realty Income Corporation, a Maryland corporation (the
"Company"), for value received, hereby promises to pay on the
Termination Date to the order of (the "Bank"), at the
office of The Bank of New York, as Administrative Agent, at One Wall
Street, New York, New York 10286, in lawful money of the United
States, the principal sum of $ or if less, the aggregate
unpaid principal amount of all Pro Rata Loans made by the Bank to the
Company pursuant to that certain Revolving Credit Agreement, dated as
of December , 1999 (as amended, supplemented or otherwise modified
from time to time, the "Agreement") among the Company, each of the
banks party thereto, and The Bank of New York, as Administrative Agent
and as Swing Line Bank.
This Note shall bear interest, and such interest shall be
payable, as set forth in the Agreement for ABR Loans and Eurodollar
Pro Rata Loans. Upon the occurrence and during the continuation of an
Event of Default, this Note shall bear interest at the default rate
pursuant to Section 3.06 of the Agreement.
Except as otherwise provided in the Agreement, with respect to
Eurodollar Pro Rata Loans, if interest or principal on the Loan
evidenced by this Note becomes due and payable on a day which is not a
Business Day, then the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable thereon at the
rate herein specified during such extension.
Page 98
This Note is one of the Pro Rata Notes referred to in the Agreement,
and is subject to prepayment in whole or in part and its maturity is
subject to acceleration upon the terms provided in the Agreement.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
Presentment, demand, protest, notice of dishonor, notice of
intent to accelerate and other notice of any kind are hereby waived by
the undersigned.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All Pro Rata Loans made by the Bank to the Company pursuant to
the Agreement and all payments of principal hereof and interest
thereon may be indicated by the Bank upon the grid attached hereto
which is a part of this Note. Such notations shall be presumptive as
to the aggregate unpaid principal amount of and interest on all Pro
Rata Loans made by the Bank pursuant to the Agreement.
REALTY INCOME CORPORATION
By:
-------------------------------
Name:
Title:
Page 99
Loan and Payments of Principal and Interest
-------------------------------------------
Name
Interest Interest of
Method Period Amount Amount Person
Amount (ABR or if Euro- of Unpaid of Making
of Euro- dollar Principal Principal Interest Nota-
Date Loan dollar Loan Paid Balance Paid tion
- ---- ------ ------ -------- --------- --------- -------- ------
Page 100
EXHIBIT D-2
FORM OF COMPETITIVE NOTE
------------------------
$[ ] [ DATE ]
Realty Income Corporation, a Maryland corporation (the "Company"),
for value received, hereby promises to pay on to the
order of (the "Bank"), at the office of The Bank of New
York, as Agent, at One Wall Street, New York, New York 10286, in
lawful money of the United States, the principal sum of $[ ] or
if less, the aggregate unpaid principal amount of all Competitive
Loans made by the Bank to the Company pursuant to that certain
Revolving Credit Agreement, dated as of December , 1999 (as
amended, supplemented or otherwise modified from time to time, the
"Agreement") among the Company, each of the banks party thereto, and
The Bank of New York, as Administrative Agent and as Swing Line Bank.
This Note shall bear interest, and such interest shall be payable,
as set forth in the Agreement for Absolute Rate Competitive Loans and
Eurodollar Competitive Loans. Upon the occurrence and during the
continuation of an Event of Default, this Note shall bear interest at
the default rate pursuant to Section 3.06 of the Agreement.
Except as otherwise provided in the Agreement, with respect to
Eurodollar Competitive Loans, if interest or principal on the Loan
evidenced by this Note becomes due and payable on a day which is not a
Business Day, the maturity thereof shall be extended to the next
succeeding Business Day, and interest shall be payable thereon at the
rate herein specified during such extension.
Page 101
This Note is one of the Competitive Notes referred to in the
Agreement, and is subject to prepayment in whole or in part and its
maturity is subject to acceleration upon the terms provided in the
Agreement. Unless otherwise defined herein, capitalized terms used
herein shall have the respective meanings specified in the Agreement.
Presentment, demand, protest, notice of dishonor, notice of intent
to accelerate and other notice of any kind are hereby waived by the
undersigned.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
All Competitive Loans made by the Bank to the Company pursuant to
the Agreement and all payments of principal hereof and interest
thereon may be indicated by the Bank upon the grid attached hereto
which is a part of this Note. Such notations shall be presumptive as
to the aggregate unpaid principal amount of and interest on all
Competitive Loans made by the Bank pursuant to the Agreement.
REALTY INCOME CORPORATION
By:
------------------------------
Name:
Title:
Page 102
Loan and Payments of Principal and Interest
-------------------------------------------
Name
Interest Interest of
Method Period Amount Amount Person
Amount (ABR or if Euro- of Unpaid of Making
of Euro- dollar Principal Principal Interest Nota-
Date Loan dollar Loan Paid Balance Paid tion
- ---- ------ ------ -------- --------- --------- -------- ------
Page 103
EXHIBIT D-3
FORM OF SWING LINE NOTE
-----------------------
$15,000,000 [Date]
Realty Income Corporation, a Maryland corporation (the "Company"),
for value received, hereby promises to pay to the order of The Bank of
New York (the "Bank"), on the maturity date thereof, the principal
amount of each Swing Line Advance made by the Bank pursuant to that
certain Revolving Credit Agreement, dated as of December , 1999 (as
amended, supplemented or otherwise modified from time to time, the
"Credit Agreement"), among the Company, each of the banks party
thereto, and The Bank of New York, as Administrative Agent and as
Swing Line Bank.
The Company also promises to pay interest on the unpaid principal
amount hereof from time to time outstanding from the date hereof until
maturity (whether by acceleration or otherwise) and, after maturity,
until paid, at the rate or rates per annum, on the date or dates and
in the manner specified in the Credit Agreement.
Payments of both principal and interest are to be made in lawful
money of the United States of America in immediately available funds
to the Swing Line Bank, in the manner specified in the Credit
Agreement.
This Note is the Swing Line Note referred to in the Credit
Agreement, which among other things, contains provisions for the
acceleration of the maturity hereof upon the happening of certain
events and for the amendment or waiver of certain provisions of the
Credit Agreement, all upon the terms and conditions therein specified.
Page 104
Unless otherwise defined herein, capitalized terms used herein have
the respective meanings specified in the Credit Agreement.
Presentment, demand, protest, notice of dishonor, notice of intent
to accelerate and other notice of any kind are hereby waived by the
undersigned.
This Note shall be governed by, and construed and interpreted in
accordance with, the laws of the State of New York.
The Bank is authorized to indicate upon the grid attached to this
Note all borrowings hereunder and payments of principal and interest
hereon. Such notations shall be presumptive as to the aggregate
unpaid principal amount of and interest on all Swing Line Advances
made by the Bank pursuant to the Agreement.
REALTY INCOME CORPORATION
By:
------------------------------
Name:
Title:
Page 105
- ----------------------------------------------------------------------
SWING LINE ADVANCES AND PRINCIPAL PAYMENTS
- ----------------------------------------------------------------------
Amount of Amount of
Line Advances Principal
Made Repaid
Swing Line Interest Swing Line
Date Advance Maturity Rate Advance
- ---- ------------- -------- -------- ----------
(table continued next page)
Page 106
(table continued)
Amount of Unpaid
Principal Balance
Swing Line
Advance Total Notation Made by
- ----------------- ----- ----------------
Page 107
EXHIBIT E
FORM OF SWING LINE ADVANCE REQUEST
----------------------------------
[Dated as provided
in Section 2.10]
The Bank of New York
One Wall Street, 18th Floor
New York, New York 10286
Attn: Kalyani Bose
Realty Income Corporation (the "Company") hereby gives notice of its
intention to borrow $ in a Swing Line Advance on ,
pursuant to the Revolving Credit Agreement, dated as of
December , 1999, among the Company, the Banks listed on the
signature pages thereto and The Bank of New York, as Administrative
Agent and as Swing Line Bank (as amended, supplemented or otherwise
modified from time to time, the "Credit Agreement").
The Company hereby confirms that the amounts of Loans and Swing Line
Advances outstanding on the date hereof are as follows:
Total Commitment....................... $200,000,000
Outstanding Loans...................... $
Commitment Availability................ $
Swing Line Facility.................... $15,000,000
Outstanding Swing Line Advances........ $
Swing Line Availability................ $
The Company also hereby confirms that each of the representations and
warranties (other than the representations and warranties that speak
as of a specific date) contained in Article V of the Agreement is true
and correct on the date hereof and, after giving effect to this
borrowing, will be true and correct on the proposed borrowing date as
though such representation or warranty had originally been made on
such dates. No Default or Event of Default has occurred and is
continuing, nor will any such event occur as a result of this
borrowing.
Unless otherwise defined herein, capitalized terms used herein shall
have the respective meanings specified in the Agreement.
REALTY INCOME CORPORATION
By:
------------------------------
Name:
Title:
Page 108
December , 1999
EXHIBIT F-I
FORM OF OPINION OF LATHAM & WATKINS
-----------------------------------
The Bank of New York,
as Agent for the Banks
One Wall Street, Twenty-Second Floor
New York, New York 10286
The Banks Signatory to the Credit
Agreement Referred to Below
Re: Revolving Credit Agreement, dated as of December ,
1999, among Realty Income Corporation, the Banks named
therein and The Bank of New York, as Administrative
Agent and as Swing Line Bank
------------------------------------------------------
Ladies/Gentlemen:
We have acted as special counsel for Realty Income Corporation, a
Maryland corporation (the "Company"), in connection with the Revolving
Credit Agreement (the "Credit Agreement") dated as of December ,
1999, among the Company, each of the banks identified on the signature
pages thereof (the "Banks") and The Bank of New York, as
Administrative Agent for the Banks and as Swing Line Bank (the
"Administrative Agent"). This opinion is rendered to you pursuant to
Section 6.01(f) of the Credit Agreement. Capitalized terms defined in
the Credit Agreement are used herein as therein defined.
In our capacity as such counsel, we have examined such matters of fact
and questions of law as we have considered appropriate for purposes of
rendering the opinions expressed below. We have examined among other
things, the following:
(a) The Credit Agreement;
(b) The Subsidiary Guaranty (the "Subsidiary Guaranty"), dated as
of December , 1999 by and (the "Guarantors");
(c) The following promissory notes of the Company dated
December , 1999 (collectively, the "Notes", and together
with the Credit Agreement, and the Subsidiary Guaranty, the
"Loan Documents"): (i) note in the original principal amount
of $40,000,000 payable to The Bank of New York; (ii) note in
the original principal amount of $35,000,000 payable to
First Union National Bank; (iii) note in the original
principal amount of $35,000,000 payable to Wells Fargo Bank,
Page 109
National Association; (iv) note in the original principal
amount of $25,000,000 payable to Bank of Montreal; (v) note
in the original principal amount of $22,500,000 payable to
AmSouth Bank; (vi) note in the original principal amount of
$22,500,000 payable to Sanwa Bank California; and (vii) note
in the original principal amount of $20,000,000 payable to
Citizens Bank of Rhode Island;
(d) The Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of the Company; and
(e) Such other documents and agreements as we deem necessary for
purposes of rendering the opinions expressed below.
In our examination, we have assumed the genuineness of all signatures
(other than those of officers of the Company on the Loan Documents as
to which we have relied on a certificate of incumbency), the
authenticity of all documents submitted to us as originals, and the
conformity to authentic original documents of all documents submitted
to us as copies.
We have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain
factual matters. In addition, we have obtained and relied upon such
certificates and assurances from public officials as we have deemed
necessary.
We are opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the
State of New York, as applicable, and we express no opinion with
respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or as to any matters of municipal law
or the laws of any other local agencies within any state.
Our opinions set forth in paragraph 1 below are based upon our
consideration of only those statutes, rules and regulations which, in
our experience, are normally applicable to bank credit transactions.
Subject to the foregoing and the other matters set forth herein, it is
our opinion that, as of the date hereof:
1. None of the execution and delivery of the Loan Documents by
the Company, the borrowing of the funds pursuant to the Loan
Documents by the Company and the payment of the indebtedness
of the Company evidenced by the Notes: (a) violate any federal
or New York statute, rule, or regulation applicable to the
Company (including, without limitation, Regulations T, U, or X
of the Board of Governors of the Federal Reserve System), or
(b) require any consents, approvals, authorizations,
registrations, declarations, or filings by the Company under
any applicable federal or New York statute, rule or
regulation.
Page 110
2. Each of the Loan Documents has been duly executed and
delivered by the Company or the Guarantors, as the case may
be, and constitutes a legally valid and binding obligation of
the Company or the Guarantors, as the case may be, enforceable
against the Company or the Guarantors, as the case may be, in
accordance with its terms.
3. The Company is not an "investment company" as such term is
defined in the Investment Company Act of 1940, as amended from
time to time.
The opinions set forth in paragraph 2 above are subject to the
following limitations, qualifications and exceptions:
(a) the effect of bankruptcy, insolvency, reorganization,
moratorium or other similar laws now or hereafter in effect
relating to or affecting the rights or remedies of creditors;
(b) the effect of general principles of equity, whether
enforcement is considered in a proceeding in equity or at
law, and the discretion of the court before which any
proceeding therefor may be brought;
(c) the unenforceability under certain circumstances under law or
court decisions of provisions providing for the
indemnification of or contribution to a party with respect to
a liability where such indemnification or contribution is
contrary to public policy;
(d) the unenforceability of any provision requiring the payment
of attorney's fees, except to the extent that a court
determines such fees to be reasonable; and
(e) we express no opinion with respect to the enforceability of
Section 10.01 of the Credit Agreement by a federal court.
To the extent that the obligations of the Company may be dependent
upon such matters, we assume for purposes of this opinion that: all
parties to the Loan Documents other than the Company are duly
incorporated, validly existing and in good standing under the laws of
their respective jurisdictions of incorporation; all parties to the
Loan Documents other than the Company have the requisite corporate
power and authority to execute and deliver the Loan Documents and to
perform their respective obligations under the Loan Documents to which
they are a party; and the Loan Documents to which such parties other
than the Company are a party have been duly authorized, executed and
delivered by such parties and constitute their legally valid and
binding obligations, enforceable against them in accordance with their
terms. We express no opinion as to compliance by any parties to the
Loan Documents with any state or federal laws or regulations
applicable to the subject transactions because of the nature of their
business.
Page 111
This opinion is rendered only to you and is solely for your benefit in
connection with the transactions covered hereby. This opinion may not
be relied upon by you for any other purpose, or furnished to, quoted
to or relied upon by any other person, firm or corporation for any
purpose, without our prior written consent.
Very truly yours,
Page 112
December , 1999
EXHIBIT F-2
FORM OF OPINION OF MICHAEL R. PFEIFFER, ESQ.
--------------------------------------------
The Bank of New York,
as Agent for the Banks
One Wall Street
22nd Floor
New York, New York 10286
The Banks Signatory to the Credit
Agreement Referred to Below
Re: Revolving Credit Agreement, dated as of December ,
1999, among Realty Income Corporation, the Banks listed
on the signature pages thereto and The Bank of New York,
as Administrative Agent and as Swing Line Bank
--------------------------------------------------------
Ladies/Gentlemen:
I am general counsel of Realty Income Corporation, a Maryland
corporation (the "Company"). This opinion is rendered to you pursuant
to Section 6.01(f) of the Revolving Credit Agreement (the "Credit
Agreement"), dated as of December , 1999, among the Company, each
of the banks identified on the signature pages thereof (the "Banks")
and The Bank of New York, as Administrative Agent for the Banks and as
Swing Line Bank (the "Administrative Agent"). Capitalized terms
defined in the Credit Agreement are used herein as therein defined.
In my capacity as general counsel, I have examined such matters of
fact and questions of law as I have considered appropriate for
purposes of rendering the opinions expressed below, except where a
statement is qualified as to knowledge or awareness, in which case I
have made no or limited inquiry as specified below. I have examined,
among other things, the following:
(a) The Credit Agreement;
(b) The following promissory notes of the Company dated ,
1999 (collectively, the "Notes", and together with the Credit
Agreement and the Subsidiary Guaranty, the "Loan Documents"):
(i) note in the original principal amount of $40,000,000
payable to The Bank of New York; (ii) note in the original
principal amount of $35,000,000 payable to First Union
National Bank; (iii) note in the original principal amount of
$35,000,000 payable to Wells Fargo Bank, National
Association; (iv) note in the original principal amount of
$25,000,000 payable to Bank of Montreal; (v) note in the
Page 113
original principal amount of $ 22,500,000 payable to AmSouth
Bank; (vi) note in the original principal amount of
$22,500,000 payable to Sanwa Bank California; and (vii) note
in the original principal amount of $ 20,000,000 payable to
Citizens Bank of Rhode Island;
(c) The Amended and Restated Certificate of Incorporation and
Amended and Restated Bylaws of the Company; and
(d) Such other documents and agreements as I deem necessary for
purposes of rendering the opinions expressed below.
In my examination, I have assumed the genuineness of all signatures
(other than those of officers of the Company on the Loan Documents),
the authenticity of all documents submitted to me as originals, and
the conformity to authentic original documents of all documents
submitted to me as copies.
I have been furnished with, and with your consent have relied upon,
certificates of officers of the Company with respect to certain
factual matters. In addition, I have obtained and relied upon such
certificates and assurances from public officials as I have deemed
necessary.
I am opining herein as to the effect on the subject transaction only
of the federal laws of the United States and the internal laws of the
State of California, as applicable, and I express no opinion with
respect to the applicability thereto, or the effect thereon, of the
laws of any other jurisdiction or as to any matters of municipal law
or the laws of any other local agencies within any state.
Whenever a statement herein is qualified by "to the best of my
knowledge" or a similar phrase, it is intended to indicate that I do
not have current actual knowledge of the inaccuracy of such statement.
Except as otherwise expressly indicated, I have not undertaken any
independent investigation to determine the accuracy of any such
statement, and no inference that I have any knowledge of any matters
pertaining to such statement should be drawn from my representation of
the Company.
Subject to the foregoing and the other matters set forth herein, it is
my opinion that, as of the date hereof:
1. Based solely on certificates from public officials, I confirm
that the Company is qualified to do business in the states in
which the Company owns properties.
2. To the best of my knowledge, there are no proceedings or
investigations pending or threatened before any court or
arbitrator or before or by any governmental authority which
would have a material adverse effect on the legality,
validity, binding effect or enforceability of any Loan
Document.
Page 114
3. The Company has the corporate power and authority to execute,
deliver and perform the terms and provisions of each Loan
Document to which it is party and has taken all necessary
corporate action to authorize the execution, delivery and
performance by it of each such Loan Document.
This opinion is delivered by me as general counsel for the Company to
you and is solely for your benefit in connection with the transactions
covered hereby. This opinion may not be relied upon by you for any
other purpose, or furnished to, quoted to or relied upon by any other
person, firm or corporation for any purpose, without my prior written
consent,
Very truly yours,
Page 115
EXHIBIT H
REAL ESTATE INVESTMENT CRITERIA
The Investment Committee is authorized, without prior Board of
Director approval, to approve real estate investments which meet all
of the following criteria:
1. The Purchase Price for each property shall not exceed $10,000,000.
2. The investment must consist of a fee interest in real property.
3. If the real property is unimproved at the time of acquisition,
there must be an agreement to complete specified improvements an
the property by a date certain.
4. Prior to, or concurrent with the acquisition, the property must be
net-leased to a tenant approved by the Company's Investment
Committee.
5. The real estate investment may not cause (i) the total investment
with that tenant to exceed $25 million, or (ii) the amount of
annualized rental revenue to be derived by the Company from a
tenant to exceed 5% of the Company's previous 12 months' rental
revenues.
6. The real estate investment may not cause the mount of annualized
rental revenue to be derived by the Company from any one industry
to exceed 25% of the Company's previous 12 months' rental
revenues.
Page 116
EXHIBIT I
FORM OF SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY, dated as of December , 1999, is made by
each entity that is identified on Schedule A hereto or that hereafter
executes and delivers a Subsidiary Joinder in the form of Exhibit A
attached hereto pursuant to the Credit Agreement described herein
(each such entity, a "Guarantor") in favor of the lenders (the
"Lenders") from time to time party to the Credit Agreement (as defined
below), and The Bank of New York ("BNY"), as administrative agent (BNY
and any successor thereto in such capacity, "Administrative Agent")
for the Lenders and in favor of all other present and future Holders
of any of the Guaranteed Obligations described herein.
RECITALS
A. The Lenders and Administrative Agent have entered into that
certain Revolving Credit Agreement, dated as of December , 1999
(as amended, supplemented or otherwise modified from time to time,
the "Credit Agreement"), among Realty Income Corporation, a
Maryland corporation ("Borrower"), the Administrative Agent and
the Lenders.
B. Each Guarantor is a Subsidiary of Borrower and expects to derive
substantial direct and indirect benefit from the transactions
contemplated by the Credit Agreement.
C. It is a condition precedent to the making of Loans by the Lenders
under the Credit Agreement that each Guarantor shall have
guaranteed payment of each and all debts, liabilities and
obligations of Borrower under the Credit Agreement and the Notes
(collectively, the "Obligations"), on the terms set forth herein.
D. Borrower has agreed, in the Credit Agreement, to cause certain
Subsidiaries of Borrower to become party to this Guaranty, as a
Guarantor hereunder, by executing and delivering a Subsidiary
Joinder in the form of Exhibit A hereto.
NOW, THEREFORE, in consideration of the foregoing and in order to
induce the Lenders to make Loans under the Credit Agreement, each
Guarantor hereby agrees as follows:
Page 117
ARTICLE I
DEFINITIONS AND ACCOUNTING TERMS
SECTION 1.1 General Definitions. Except as otherwise specifically
provided herein, the terms which are defined in Article I of the
Credit Agreement shall have the same meanings when used in this
Guaranty and the provisions of Section 1.01 of the Credit Agreement
shall apply to this Guaranty.
SECTION 1.2 Certain Defined Terms. As used in this Guaranty, the
following terms shall have the following meanings:
"Bankruptcy Code" means Title 11 of the United States Code, as from
time to time amended.
"Disallowed Post-Commencement Interest and Expenses" means interest
computed at the rate provided in the Credit Agreement and claims for
reimbursements, costs, expenses or indemnities under the terms of the
Credit Agreement accruing or claimed at any time after commencement of
any Insolvency or Liquidation Proceeding, if the claim for such
interest, reimbursement, cost, expense or indemnity is not allowable,
allowed or enforceable against Borrower in such Insolvency or
Liquidation Proceeding.
"Guaranty" means this Subsidiary Guaranty, dated as of December ,
1999, made by the Guarantors for the benefit of the Lenders,
Administrative Agent and other Holders of Guaranteed Obligations.
"Guaranty Taxes" is defined in Section 3.8(a).
"Holder" means, in respect of any Guaranteed Obligation, the Person
entitled to enforce payment thereof and specifically includes the
Administrative Agent and the Lenders.
"Insolvency or Liquidation Proceeding" means any (i) any case under
the Bankruptcy Code, any other insolvency or bankruptcy case or
proceeding, or any receivership, liquidation, reorganization or other
similar case or proceeding, relative to Borrower or to any of its
creditors, as such, or to a substantial part of any of its assets, or
(ii) any proceeding for the liquidation, dissolution or other winding
up of Borrower, whether voluntary or involuntary and whether or not
involving insolvency or bankruptcy, or (iii) any assignment for the
benefit of creditors or any other marshaling of assets and liabilities
of Borrower.
"Subordinated Liabilities" is defined in Section 2.8(a).
Page 118
ARTICLE II
GUARANTY AND RELATED PROVISIONS
SECTION 2.1 Guaranty. Each Guarantor hereby unconditionally:
(a) guarantees the punctual payment when due, whether at stated
maturity, by acceleration or otherwise, of (i) all Obligations
now outstanding or hereafter arising under or in connection with
the Credit Agreement or the Notes, whether for principal,
interest, fees, taxes, additional compensation, expense
reimbursements, indemnification or otherwise, and (ii) each other
debt, liability or obligation of Borrower now outstanding or
hereafter arising under any of the Credit Agreement and the Notes
(such Obligations, liabilities and other debts, liabilities and
obligations, collectively, the "Guaranteed Obligations"), and
(b) agrees to pay on demand (i) all Disallowed Post-Commencement
Interest and Expenses, to the Person entitled to payment thereof
if the claim therefor had been allowed in any Insolvency or
Liquidation Proceeding and (ii) all costs and expenses
(including, without limitation, reasonable attorneys' fees and
legal expenses) incurred by any Holder of Guaranteed Obligations
in enforcing this Guaranty; provided, however, that the amount of
each Guarantor's payment obligations hereunder shall not exceed
an aggregate amount equal to such Guarantor's stockholders' or
partners' equity, as the case may be.
SECTION 2.2 Acceleration of Payment. If the Notes become immediately
due and payable pursuant to Section 8.01 of the Credit Agreement, then
all liability of each Guarantor under this Guaranty in respect of any
Guaranteed Obligation that is not then due and payable shall thereupon
become and be immediately due and payable, without notice or demand.
SECTION 2.3 Guaranty Absolute and Unconditional. Each Guarantor
guarantees that the Guaranteed Obligations will be paid in accordance
with the terms of the Credit Agreement and the Notes, regardless of
any law, regulation or order now or hereafter in effect in any
jurisdiction affecting any of such terms or the rights and claims of
any Holder of Guaranteed Obligations against Borrower with respect
thereto and even if any such rights or claims are modified, reduced or
discharged in an Insolvency or Liquidation Proceeding or otherwise.
The obligations of each Guarantor under this Guaranty are independent
of the Guaranteed Obligations, and a separate action or actions may be
brought and prosecuted against each Guarantor to enforce this
Guaranty, irrespective of whether any action is brought against
Borrower or whether Borrower is joined in any such action or actions.
The liability of each Guarantor under this Guaranty shall be absolute
and unconditional irrespective of (i) any lack of validity or
enforceability of the Credit Agreement or any Note or any other
agreement or instrument relating thereto; (ii) any change in the time,
manner or place of payment of, or in any other term of, all or any of
Page 119
the Guaranteed Obligations, or any other amendment or waiver of or any
consent to departure from the Credit Agreement or any Note, including,
without limitation, any increase in the Guaranteed Obligations
resulting from the extension of additional credit to Borrower or
otherwise; (iii) any taking, exchange, release or non-perfection of
any collateral, or any taking, release or amendment or waiver of or
consent to departure from any other guaranty, for all or any of the
Guaranteed Obligations; (iv) any manner of application of collateral,
or proceeds thereof, to all or any of the Guaranteed Obligations, or
any manner of sale or other disposition of any collateral for all or
any of the Guaranteed Obligations or any other assets of Borrower; (v)
any change, restructuring or termination of the corporate structure or
existence of Borrower; or (vi) any other circumstance which might
otherwise constitute a defense available to, or a discharge of, a
surety or guarantor.
SECTION 2.4 Guaranty Irrevocable and Continuing. This Guaranty is an
irrevocable and continuing offer and agreement guaranteeing payment of
any and all Guaranteed Obligations and shall extend to all Guaranteed
Obligations now outstanding or created or incurred at any future time,
whether or not created or incurred pursuant to any agreement presently
in effect or hereafter made, until all obligations of the Lenders to
extend credit to Borrower have expired or been terminated, and all
Guaranteed Obligations have been fully, finally and indefeasibly paid.
To the extent any contingent Obligation survives the expiration or
termination of the Credit Agreement and the repayment of the Loans,
each Guarantor's liability under this Guaranty shall likewise survive.
This Guaranty may be released only in writing.
SECTION 2.5 Reinstatement. If at any time any payment on any
Guaranteed Obligation is set aside, avoided or rescinded or must
otherwise be restored or returned, this Guaranty and the liability of
each Guarantor under this Guaranty shall remain in full force and
effect and, if previously released or terminated, shall be
automatically and fully reinstated, without any necessity for any act,
consent or agreement of any Guarantor, as fully as if such payment had
never been made and as fully as if any such release or termination had
never become effective.
SECTION 2.6 Waiver. Each Guarantor hereby waives and agrees not to
assert or take advantage of:
(a) Marshaling. Any right to require any Holder of Guaranteed
Obligations to proceed against or, exhaust its recourse against
Borrower or any other Subsidiary Guarantor or any other Person
liable for any of the Guaranteed Obligations or against any
collateral for any of the Guaranteed Obligations or against any
other Person or property, before demanding and enforcing payment
of the Guaranteed Obligations from any Guarantor under this
Guaranty;
Page 120
(b) Other Defenses. Any defense that may arise by reason of (i) the
incapacity, lack of authority, death or disability of Borrower or
any other Person; (ii) the revocation or repudiation of any of
the Credit Agreement or the Notes by Borrower or any other
Person; (iii) the unenforceability in whole or in part of the
Credit Agreement or the Notes or any other instrument, document
or agreement; (iv) the failure of any Holder of Guaranteed
Obligations to file or enforce a claim against any Person liable
for any of the Guaranteed Obligations or in any Liquidation or
Insolvency Proceeding; or (v) any borrowing or grant of a
security interest under Section 364 of the Bankruptcy Code;
(c) Notices. Presentment, demand for payment, protest, notice of
discharge, notice of acceptance of this Guaranty, notice of the
incurrence of, or any default in respect of, any debt, liability
or obligation guaranteed hereunder, and all other indulgences and
notices of every type or nature, including, without limitation
and to the maximum extent permitted by law, notice of the
disposition of any collateral for any of the Guaranteed
Obligations;
(d) Election of Remedies. Any defense based upon an election of
remedies (including, if available, an election to proceed by non-
judicial foreclosure) or any other act or omission of any Holder
of Guaranteed Obligations or any other Person which destroys or
otherwise impairs any right that any Guarantor might otherwise
have for subrogation, recourse, reimbursement, indemnity,
exoneration, contribution or otherwise. against Borrower or any
other Person;
(e) Collateral. Any defense based upon any taking, modification or
release of any collateral or guaranties for the Guaranteed
Obligations, or any failure to create or perfect or ensure the
priority or enforceability of any security interest in any
collateral for any of the Guaranteed Obligations or any act or
omission related thereto;
(f) Offsets. Any right to recoup from or offset against any of the
Guaranteed Obligations any claim that may be held or asserted by
or available to (i) Borrower or any other Guarantor or any other
Person liable for any of the Guaranteed Obligations against any
Holder of Guaranteed Obligations or (ii) any Guarantor against
Borrower, any other Guarantor, any other Holder of Guaranteed
Obligations or any other Person; or
(g) Defenses of Others. Any other claim, right or defense
(including, by way of illustration and without limitation, such
matters as failure or insufficiency of consideration, statute of
limitations, breach of contract, tortious conduct, accord and
satisfaction, and discharge by agreement, conduct or in a
Liquidation or Insolvency Proceeding), except the defense of
payment, that may be held or asserted by or available to (i)
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Borrower or any other Guarantor or any other Person liable for
any of the Guaranteed Obligations against any Holder of
Guaranteed Obligations or (ii) any Guarantor against Borrower,
any other Guarantor, any other Holder of Guaranteed Obligations
or any other Person.
SECTION 2.7 Subrogation. Each Guarantor hereby represents, warrants
and agrees, in respect of any and all present and future rights of
subrogation, recourse, reimbursement, indemnity, exoneration,
contribution and other claims that such Guarantor at any time may have
against Borrower, any other Guarantor or any other Person liable for
the payment of any of the Guaranteed Obligations (including, without
limitation, the owner of any interest in collateral for any of the
Guaranteed Obligations) as a result of or in connection with this
Guaranty or any payment hereunder, that:
(a) No Agreement. Such Guarantor has not entered into, and agrees
that it will not enter into, any agreement providing, directly or
indirectly, for any such right or claim against Borrower or,
except as set forth in Section 2.10, against any other Subsidiary
of Borrower, and each such agreement now existing or hereafter
entered into (except Section 2.10) is and shall be void;
(b) Release. Such Guarantor forever waives and releases, and agrees
never to sue upon, any such right or claim against Borrower and,
except as set forth in Section 2. 10, against any other
Subsidiary of Borrower, whether or not the Guaranteed Obligations
have been paid in full;
(c) Capital Contribution. Each payment made by such Guarantor under
this Guaranty shall be a contribution to the capital of Borrower,
and no such payment shall give rise to any claim (as that term is
defined in the Bankruptcy Code) in favor of such Guarantor
against Borrower;
(d) Subordination of Contribution Rights. Each Guarantor reserves,
as against each other Guarantor, its right of contribution under
Section 2.10 but agrees that all such contribution rights shall
be included among the Subordinated Liabilities; and
(e) Deferral of Other Rights and Claims. Until all obligations of
the Lenders to extend credit to Borrower have expired or been
terminated and all the Guaranteed Obligations have been paid in
full, such Guarantor will not demand, sue for, accept or receive
any payment or transfer on account of any such right or claim
from any Person (other than Borrower and its Subsidiaries) liable
for the payment of any of the Guaranteed Obligations.
SECTION 2.8 Subordination Provisions.
(a) Subordination. Any and all present and future debts, liabilities
and obligations of every type and description (whether for money
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borrowed, on intercompany accounts, for provision of goods or
services, under tax sharing or contribution agreements or on
account of any other transaction, agreement, occurrence or event
and whether absolute or contingent, direct or indirect, matured
or uninatured, liquidated or unliquidated, created directly or
acquired from another, or sole, joint, several or joint and
several) of Borrower now outstanding or hereafter incurred or
owed to any Guarantor (the "Subordinated Liabilities") shall be,
and hereby are, subordinated to full and final payment of the
Guaranteed Obligations.
(b) Prohibited Payments. No Guarantor will demand, sue for, accept
or receive, or cause or permit any other Person to make, any
payment on or transfer of property on account of any Subordinated
Liabilities except to the extent payment is permitted at the time
under Section 7.02 of the Credit Agreement.
(c) No Liens or Transfers. No Guarantor. will demand, accept or hold
any Lien upon any real or personal property of Borrower as
security for any of the Subordinated Liabilities and agrees that
any such Lien shall be void.
(d) Insolvency Proceedings. In any Insolvency or Liquidation
Proceeding, the Holders of Guaranteed Obligations shall be
entitled to receive payment in full of all amounts due or to
become due on or in respect of the Guaranteed Obligations, or
provision shall be made for such payment in money or money's
worth, before any Guarantor is entitled to receive any payment or
distribution of any kind or character, whether in cash, property
or securities, on account of any of the Subordinated Liabilities,
and to that end the Holders of Guaranteed Obligations shall be
entitled to receive, for application to the payment thereof, all
payments and distributions of any kind or character, whether in
cash, property or securities (including any such payment or
distribution which may be payable or deliverable by reason of the
payment of any other debt or liability of Borrower being
subordinated to the payment of the Subordinated Liabilities),
which may be payable or deliverable in respect of the
Subordinated Liabilities in any such Insolvency or Liquidation
Proceeding.
(e) Disallowed Post-Commencement Interest and Expenses. If in any
Insolvency or Liquidation Proceeding (i) any payment or
distribution of any kind or character, whether in cash, property
or securities (including any such payment or distribution which
may be payable or deliverable by reason of the payment of any
other debt or liability of Borrower being subordinated to the
payment of the Subordinated Liabilities) is payable or
deliverable in respect of the Subordinated Liabilities, and (ii)
the Holders of Guaranteed Obligations are not otherwise entitled
to receive such payment or distribution pursuant to Section
2.8(d), and (iii) any amount remains unpaid to any Holder of
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Guaranteed Obligations on account of any Disallowed Post-
Commencement Interest and Expenses, then the Holders of
Guaranteed Obligations shall be entitled to receive payment of
all such unpaid Disallowed Post-Commencement Interest and
Expenses from and out of any and all such payments and
distributions in respect of the Subordinated Liabilities.
(f) Held in Trust. If any payment, transfer or distribution is made
to any Guarantor upon any Subordinated Liabilities that is not
permitted to be made under this Section 2.8 or that the Holders
of Guaranteed Obligations are not entitled to receive under this
Section 2.8, such Guarantor shall receive and hold the same in
trust, as trustee for the benefit of the Holders of Guaranteed
Obligations, and shall forthwith transfer and deliver the same to
Agent, in precisely the form received (except for any required
endorsement), for application to the payment of Guaranteed
Obligations or any unpaid Disallowed Post-Commencement Interest
and Expenses.
(g) Claims in Bankruptcy. Each Guarantor will file all claims
against Borrower in any Liquidation or Insolvency Proceeding in
which the filing of claims is required or permitted by law upon
any of the Subordinated Liabilities and will assign to Agent, for
the benefit of the Holders of Guaranteed Obligations, all rights
of such Guarantor thereunder. If any Guarantor does not file any
such claim at least 30 days prior to any applicable claims bar
date, Agent is hereby authorized (but shall not be obligated), as
attorney-in-fact for such Guarantor with full power of
substitution, either to file such claim or proof thereof in the
name of such Guarantor or, at Agent's option, to assign the claim
and cause the claim or proof thereof to be filed by an agent or
nominee. Agent and its agents and nominees shall have the sole
right, but no obligation, to accept or reject any plan proposed
in such Insolvency or Liquidation Proceeding and to cast any
votes and to take any other action with respect to all claims
upon any of the Subordinated Liabilities.
(h) Subordination Effective and not Impaired. This Section 2.8 shall
remain effective for so long as this Guaranty is continuing and
thereafter for so long as any Guaranteed Obligation is
outstanding. Each Guarantor's obligations under this Section 2.8
(i) shall be absolute and unconditional as set forth in Section
2.3, irrevocable and continuing as set forth in Section 2.4,
subject to reinstatement as set forth in Section 2.5, and not be
affected or impaired by any of the matters waived in Section 2.6,
(ii) shall be subject to the provisions of Article V of the
Credit Agreement, and (iii) shall otherwise be as equally
enduring and free from defenses as such Guarantor's liability
under this Guaranty.
SECTION 2.9 Fraudulent Transfer Limitation. If, in any action to
enforce this Guaranty or any proceeding to allow or adjudicate a claim
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under this Guaranty, a court of competent jurisdiction determines that
enforcement of this Guaranty against any Guarantor for the full amount
of the Guaranteed Obligations is not lawful under, or would be subject
to avoidance under, Section 548 of the Bankruptcy Code or any
applicable provision of comparable state law, the liability of such
Guarantor under this Guaranty shall be limited to the maximum amount
lawful and not subject to avoidance under such law.
SECTION 2.10 Contribution among Guarantors. The Guarantors desire to
allocate among themselves, in a fair and equitable manner, their
rights of contribution from each other when any payment is made by one
of the Guarantors under this Guaranty. Accordingly, if any payment is
made by a Guarantor under this Guaranty (a "Funding Guarantor") that
exceeds its Fair Share, the Funding Guarantor shall be entitled to a
contribution from each other Guarantor in the amount of such other
Guarantor's Fair Share Shortfall, so that all such contributions shall
cause each Guarantor's Aggregate Payments to equal its Fair Share.
For these purposes:
(a) "Fair Share" means, with respect to a Guarantor as of any date of
determination, an amount equal to (i) the ratio of (x) the
Adjusted Maximum Amount of such Guarantor to (y) the aggregate
Adjusted Maximum Amounts of all Guarantors, multiplied by (ii)
the aggregate amount paid on or before such date by all Funding
Guarantors under this Guaranty.
(b) "Fair Share Shortfall" means, with respect to a Guarantor as of
any date of determination, the excess, if any, of the Fair Share
of such Guarantor over the Aggregate Payments of such Guarantor.
(c) "Adjusted Maximum Amount" means, with respect to a Guarantor as
of any date of determination, the maximum aggregate amount of the
liability of such Guarantor under this Guaranty, limited to the
extent required under Section 2.9 (except that, for purposes
solely of this calculation, any assets or liabilities arising by
virtue of any rights to or obligations of contribution under this
Section 2.10 shall not be counted as assets or liabilities of
such Guarantor).
(d) "Aggregate Payments" means, with respect to a Guarantor as of any
date of determination, the aggregate net amount of all payments
made on or before such date by such Guarantor under this Guaranty
(including, without limitation, under this Section 2. 10).
The amounts payable as contributions hereunder shall be determined as
of the date on which the related payment or distribution is made by
the Funding Guarantor. The allocation and right of contribution among
the Guarantors set forth in this Section 2.10 shall not be construed
to limit in any way the liability of any Guarantor under this Guaranty
to the Holders of the Guaranteed Obligations.
Page 125
SECTION 2.11 Joint and Several Obligation. This Guaranty and all
liabilities of each Guarantor hereunder shall be the joint and several
obligation of each Guarantor and may be freely enforced against each
Guarantor, for the full amount of the Guaranteed Obligations (subject
to Section 2.9), without regard to whether enforcement is sought or
available against any other Guarantor.
ARTICLE III
MISCELLANEOUS PROVISIONS
SECTION 3.1 Condition of Borrower. Each Guarantor is fully aware of
the financial condition of Borrower and is executing and delivering
this Guaranty based solely upon such Guarantor's own independent
investigation of all matters pertinent hereto and is not relying in
any manner upon any representation or statement by any Holder of
Guaranteed Obligations. Each Guarantor represents and warrants that
it is in a position to obtain, and each Guarantor hereby assumes full
responsibility for obtaining, any additional information concerning
the financial condition of Borrower and any other matter pertinent
hereto as such Guarantor may desire, and such Guarantor is not relying
upon or expecting any Holder of Guaranteed Obligations to furnish to
such Guarantor any information now or hereafter in the possession of
any Holder of Guaranteed Obligations concerning the same or any other
matter. By executing this Guaranty, each Guarantor knowingly accepts
the full range of risks encompassed within a contract of this type,
which risks each Guarantor acknowledges. No Guarantor shall have the
right to require any Holder of Guaranteed Obligations to obtain or
disclose any information with respect to the Guaranteed Obligations,
the financial condition or prospects of Borrower, the ability of
Borrower to pay or perform the Guaranteed Obligations, the existence,
perfection, priority or enforceability of any collateral security for
any or all of the Guaranteed Obligations, the existence or
enforceability of any other guaranties of all or any part of the
Guaranteed Obligations, any action or non-action on the part of any
Holder of Guaranteed Obligations, Borrower, or any other Person, or
any other event, occurrence, condition or circumstance whatsoever.
SECTION 3.2 Amendments.
(a) Amendment to Guaranty. No amendment or waiver of any provision
of this Guaranty, and no consent to any departure by any
Guarantor herefrom, shall in any event be effective unless the
same shall be in writing and signed by the Required Banks, and
then such waiver or consent shall be effective only in the
specific instance and for the specific purpose for which given,
except that no amendment, waiver or consent shall, unless in
writing and signed by all the Lenders, (i) limit the liability of
any Guarantor hereunder, (ii) postpone any date fixed for payment
hereunder, or (iii) change the number of Lenders required to take
any action hereunder.
Page 126
(b) Amendment or Modification of the Notes. The Notes may be
amended, modified or supplemented in accordance with their terms
without notice to or consent or agreement by any Guarantor,
including, without limitation, so as to (i) alter, compromise,
modify, accelerate, extend, renew, refinance or change the time
or manner for making of advances, provision of other financial
accommodations, or the payment or performance of all or any
portion of the Guaranteed Obligations, (ii) increase or reduce
the rate of interest or amount of principal payable on the Notes,
(iii) release or discharge Borrower or any other Person as to all
or any portion of the Guaranteed Obligations, or (iv) release,
substitute or add any one or more guarantors or endorsers, accept
additional or substituted security for payment or performance of
the Guaranteed Obligations, or release or subordinate any
security therefor.
SECTION 3.3 Notices. All notices and other communications provided
for hereunder shall be in writing (including telecopier communication)
and mailed, telecopied or delivered; if to any Guarantor, at c/o
Realty Income Corporation, 220 West Crest Street, Escondido, CA 92025-
1707, Attention: Michael Pfeiffer, Esq., with a copy to: Michael J.
Brody Esq., Latham & Watkins, 633 West Fifth Street, Suite 4000, Los
Angeles, CA 90071-2007, if to Administrative Agent, at The Bank of New
York, One Wall Street, 18th Floor, New York, NY 10286, Attention:
Kalyani Bose -- Agency Function Administration; and if to any Lender,
at its address specified in the Credit Agreement, or, as to any party,
at such other address as shall be designated by such party in a
written notice to each other party. All such notices and other
communications shall, when mailed or telecopied be effective when
deposited in the mails or telecopied respectively.
SECTION 3.4 Right of Set-off. If any request is made or consent is
given by the Required Banks pursuant to Section 8.01 of the Credit
Agreement for a declaration by the Administrative Agent that the Notes
are immediately due and payable, or if the Notes become immediately
due and payable pursuant to Section 8.01 of the Credit Agreement, each
Lender shall have the right at any time and from time to time
thereafter, to the fullest extent permitted by law, to set off and
apply any and all deposits (general or special, time or demand,
provisional or final) at any time held and other liability at any time
owing by such Lender to or for the credit or the account of any
Guarantor against any and all liability of such Guarantor under this
Guaranty, whether or not such Lender shall have made any demand under
this Guaranty and even though such liability may then be contingent
and unmatured. Each Lender agrees promptly to notify the affected
Guarantor after any such set-off and application made by such Lender,
but the failure to give such notice shall not affect the validity of
such set-off and application. The rights of each Lender under this
Section 3.4 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) which such Lender may
have.
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SECTION 3.5 Successors and Assigns. This Guaranty is binding upon
and enforceable against each Guarantor, its successors and assigns,
and shall inure to the benefit of, and be enforceable by, each Holder
of any of the Guaranteed Obligations and such Holder's heirs,
representatives, successors and assigns.
SECTION 3.6 No Inquiry. Each Holder of Guaranteed Obligations may
rely, without further inquiry, on the power and authority of each
Guarantor, Borrower and each of its Subsidiaries and on the authority
of all officers, directors and agents acting or purporting to act on
their behalf.
SECTION 3.7 Bankruptcy. So long as any Commitments or Guaranteed
Obligation are outstanding, no Guarantor will, without the prior
written consent of Agent and the Required Banks, commence or join with
any other Person in commencing any Insolvency or Liquidation
Proceeding against Borrower or any of its Subsidiaries.
SECTION 3.8 No Waiver; Remedies. No failure on the part of any
Holder of Guaranteed Obligations to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, and
any single or partial exercise of any right hereunder shall not
preclude any other or further exercise of any other right or of the
same right as to any other matter or on a subsequent occasion.
SECTION 3.9 Remedies Cumulative. All rights, powers and remedies of
each Holder of Guaranteed Obligations under this Guaranty, under any
other agreement now or at any time hereafter in effect between any
such Holder and each and all of the Guarantors (whether relating to
the Guaranteed Obligations or otherwise) or now or hereafter existing
at law or in equity or by statute or otherwise, shall be cumulative
and concurrent and not alternative and each such right, power and
remedy may be exercised independently of, and in addition to, each
other such right, power or remedy.
SECTION 3.10 Severally Enforceable. This Guaranty may be enforced
severally and successively by any one or more of the Holders of
Guaranteed Obligations in one or more actions, whether independent,
concurrent, joint, successive or otherwise. The claims, rights and
remedies of any Holder of Guaranteed Obligations (i) may not be
modified or waived by any other Holder, except as set forth in Section
3.2(a), and (ii) shall not be reduced, discharged, affected or
impaired by any deed, act or omission, whether or not wrongful, of any
other Holder.
SECTION 3.11 Counterparts. This Guaranty may be executed in
counterparts, and each such counterpart for all purposes shall be
deemed an original and all such counterparts together shall constitute
but one and the same agreement.
SECTION 3.12 Severability. If any provision hereof or the
application thereof in any particular circumstance is held to be
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unlawful or unenforceable in any respect, all other provisions hereof
and such provision in all other applications shall nevertheless remain
effective and enforceable to the maximum extent lawful.
SECTION 3.13 Integration. This Guaranty is intended as an integrated
and final expression of the entire agreement of such Guarantor with
respect to the subject matter hereof. No representation,
understanding, promise or condition concerning the subject matter
hereof shall be binding upon any Holder of Guaranteed Obligations
unless expressed herein or therein, and no course of prior dealing or
usage of trade, and no parol or extrinsic evidence of any nature,
shall be admissible to supplement, modify or vary any of the terms
hereof. Acceptance of or acquiescence in a course of performance
rendered under this Guaranty or any other dealings between any
Guarantor and any Holder of Guaranteed Obligations shall not be
relevant to determine the meaning of this Guaranty even though the
accepting or acquiescing party had knowledge of the nature of the
performance and opportunity for objection.
SECTION 3.14 GOVERNING LAW; SUBMISSION TO JURISDICTION; WAIVER OF
JURY TRIAL.
(a) GOVERNING LAW. THIS GUARANTY SHALL BE GOVERNED BY, AND CONSTRUED
IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK.
(b) SUBMISSION TO JURISDICTION. ANY LEGAL ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT MAY BE BROUGHT IN THE COURTS OF THE
STATE OF NEW YORK OR OF THE UNITED STATES FOR THE SOUTHERN
DISTRICT OF NEW YORK, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, EACH PARTY HERETO CONSENTS, FOR ITSELF AND IN RESPECT
OF ITS PROPERTY, TO THE JURISDICTION OF THOSE COURTS. EACH PARTY
IRREVOCABLY WAIVES ANY OBJECTION, INCLUDING ANY OBJECTION TO THE
LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS,
WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY ACTION
OR PROCEEDING IN SUCH JURISDICTION IN RESPECT OF THIS AGREEMENT
OR ANY DOCUMENT RELATED HERETO. SERVICE OF ANY SUMMONS,
COMPLAINT OR OTHER PROCESS MAY BE MADE BY ANY MEANS PERMITTED BY
NEW YORK LAW.
(c) WAIVER OF JURY TRIAL. EACH PARTY HERETO WAIVES ALL RIGHTS TO A
TRIAL BY JURY OF ANY CLAIM OR CAUSE OF ACTION BASED UPON OR
ARISING OUT OF OR RELATED TO THIS GUARANTY, THE NOTES OR THE
TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY IN ANY ACTION,
PROCEEDING OR OTHER LITIGATION OF ANY TYPE BROUGHT BY ANY OF THE
PARTIES AGAINST ANY OTHER PARTY OR PARTIES, WHETHER WITH RESPECT
TO CONTRACT CLAIMS, TORT CLAIMS, OR OTHERWISE, AND AGREES THAT
ANY SUCH CLAIM OR CAUSE OF ACTION SHALL BE TRIED BY A COURT TRIAL
WITHOUT A JURY.
SECTION 3.15 Acceptance and Notice. Each Guarantor acknowledges
acceptance hereof and reliance hereon by each Holder of any of the
Guaranteed Obligations and waives, irrevocably and forever, all notice
thereof.
Page 129
IN WITNESS WHEREOF, the Guarantors have caused this Subsidiary
Guaranty to be duly executed and delivered by an officer of each
Guarantor thereunto duly authorized as of the date first above
written.
THE GUARANTORS:
----------------------------------
By: Realty Income Corporation
Its: General Partner
By:
-----------------------------
Michael R. Pfeiffer
Vice President, General Counsel
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Schedule A to Subsidiary Guaranty
Guarantors
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Page 131
Exhibit A to Subsidiary Guaranty
FORM OF SUBSIDIARY JOINDER
This Subsidiary Joinder is entered into by , a
corporation (the "Company"), as of .
WHEREAS, the sole stockholder of the Company (the "Sole
Stockholder") has entered into the Revolving Credit Agreement, dated
as of December , 1999, among Realty Income Corporation, as Borrower,
each of the banks identified on the signature pages thereof and The
Bank of New York, as Administrative Agent for the Banks and as Swing
Line Bank (the "Credit Agreement") which requires that each of the
Subsidiaries of the Sole Stockholder enter into a subsidiary guaranty
(the "Subsidiary Guaranty", attached hereto as Exhibit A) to and for
the benefit of the lenders party to the Credit Agreement;
WHEREAS, as a precondition to any transfer of certain properties
owned by the Sole Stockholder, any of its Subsidiaries (as defined in
the Credit Agreement), or any combination thereof (the "Properties"),
to any other Subsidiary, that such transferee Subsidiary execute and
deliver a subsidiary joinder (the "Subsidiary Joinder") with respect
to the Subsidiary Guaranty to and for the benefit of the lenders party
to the Credit Agreement;
WHEREAS, the Company owns a % limited partnership interest in
the limited partnership that owns such Properties; and
WHEREAS, the Company is a Subsidiary of the [Sole Stockholder] of
the Company, as defined in the Credit Agreement;
NOW, THEREFORE, the Company hereby agrees to join with the
Subsidiaries party to the Subsidiary Guaranty and agrees further to be
bound by the terms and conditions of the Subsidiary Guaranty as though
the Company had originally been a party to it.
IN WITNESS WHEREOF, the undersigned has executed this Subsidiary
Joinder as of the date first written above.
[SUBSIDIARY NAME]
-----------------------------------
By:
------------------------------
Its:
------------------------------
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Exhibit A to Subsidiary Joinder
Subsidiary Guaranty
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Schedule 5.01 (a)
-----------------
Subsidiaries and Joint Ventures of the Company
----------------------------------------------
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Schedule 5.01(q)
ERISA Liabilities
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Schedule 5.01(r)
Intellectual Property
---------------------
Page 136