Exhibit 10.6
CONFORMED COPY
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
dated as of November 29, 1994
and amended and restated
as of December 30, 1997
among
REALTY INCOME CORPORATION
THE BANKS NAMED HEREIN
AND
THE BANK OF NEW YORK
as Agent and Swing Line Bank
AND
BNY CAPITAL MARKETS, INC.
as Arranger
TABLE OF CONTENTS
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Page
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RECITALS.............................................. 1
ARTICLE I
DEFINITIONS
Section 1.01. Definitions............................ 1
ARTICLE II
THE LOANS
Section 2.01. The Loans............................. 18
Section 2.02. Procedure for Pro Rata Loans.......... 18
Section 2.03. Pro Rata Notes........................ 19
Section 2.04. Certain Fees.......................... 20
Section 2.05. Cancellation or Reduction of the
Commitment............................ 20
Section 2.06. Optional Prepayment................... 21
Section 2.07. Mandatory Prepayment.................. 21
Section 2.08. Procedure for Competitive Loans....... 22
Section 2.09. Competitive Notes..................... 25
Section 2.10. Swing Line Advances................... 25
Section 2.11. Increase in Commitments............... 28
ARTICLE III
INTEREST, METHOD OF PAYMENT, CONVERSION, ETC.
Section 3.01. Procedure for Interest Rate
Determination......................... 29
Section 3.02. Interest on ABR Loans................. 29
Section 3.03. Interest on Eurodollar Loans.......... 30
Section 3.04. Interest on Absolute Rate
Competitive Loans..................... 31
Section 3.05. Conversion/Continuance................ 31
Section 3.06. Post Default Interest................. 31
Section 3.07. Maximum Interest Rate................. 32
ARTICLE IV
DISBURSEMENT AND PAYMENT
Section 4.01. Pro Rata Treatment.................... 32
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Section 4.02. Method of Payment..................... 32
Section 4.03. Compensation for Losses............... 32
Section 4.04. Withholding, Reserves and Additional
Costs................................. 34
Section 4.05. Unavailability........................ 38
ARTICLE V
REPRESENTATIONS AND WARRANTIES
Section 5.01. Representations and Warranties........ 39
ARTICLE VI
CONDITIONS OF LENDING
Section 6.01. Conditions to the Availability of the
Commitment............................ 46
Section 6.02. Conditions to All Loans............... 47
ARTICLE VII
COVENANTS
Section 7.01. Affirmative Covenants................. 48
Section 7.02. Negative Covenants.................... 52
Section 7.03. Financial Covenants................... 55
ARTICLE VIII
EVENTS OF DEFAULT
Section 8.01. Events of Default..................... 56
ARTICLE IX
THE AGENT AND THE BANKS
Section 9.01. The Agency............................ 59
Section 9.02. The Agent's Duties.................... 59
Section 9.03. Sharing of Payment and Expenses....... 59
Section 9.04. The Agent's Liabilities............... 60
Section 9.05. The Agent as a Bank................... 60
Section 9.06. Bank Credit Decision.................. 60
Section 9.07. Indemnification....................... 61
Section 9.08. Successor Agent....................... 61
ARTICLE X
CONSENT TO JURISDICTION
Section 10.01. Consent to Jurisdiction.............. 62
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ARTICLE XI
MISCELLANEOUS
Section 11.01. APPLICABLE LAW....................... 62
Section 11.02. Set-off.............................. 62
Section 11.03. Expenses............................. 63
Section 11.04. Amendments........................... 63
Section 11.05. Cumulative Rights and No Waiver...... 63
Section 11.06. Notices.............................. 64
Section 11.07. Separability......................... 64
Section 11.08. Assignments and Participations....... 64
Section 11.09. WAIVER OF JURY TRIAL................. 66
Section 11.10. Confidentiality...................... 66
Section 11.11. Indemnity............................ 66
Section 11.12. Extension of Termination Dates;
Removal of Banks; Substitutions of
Banks................................ 67
Section 11.13. Knowledge of the Company............. 69
Section 11.14. Execution in Counterparts............ 69
TESTIMONIUM.............................................. 69
SIGNATURES............................................... 69
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
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT
-----------------------------------------------
AMENDED AND RESTATED REVOLVING CREDIT AGREEMENT, dated as of
November 29, 1994 as amended and restated as of December 30, 1997
(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 Agent for the Banks (the "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
$150,000,000, subject to increase as provided herein, 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.
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(b) Accounting Terms. Except as otherwise expressly
provided herein, all terms of an accounting or financial nature shall
be construed in 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.
"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.
"Agent" shall have the meaning given to such term in the
preamble of this Agreement and shall also include any successor agent
hereunder.
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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 0.575%
II 0.650%
III 0.750%
IV 0.850%
V 1.150%
"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+/Baa1; "Pricing Level III" shall
be applicable for so long as the Company's Debt Rating is lower than
BBB+/Baa1 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 the receipt by the Agent of a letter
or letters from the applicable Rating Agencies evidencing 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 Interest Period
for a Eurodollar Loan, the rate reported to the Agent at which U.S.
dollar deposits are offered to The Bank of New York by leading banks
in the London Interbank deposits market at approximately 11:00 A.M.,
London time, on the second full Business Day preceding the first day
of such Interest Period in an amount substantially equal to the
respective Reference Amounts for a term equal to such Interest Period.
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"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
Agent from time to time as its prime commercial loan rate
in effect on such day; and
(b) the sum (adjusted to the nearest 1/4 of 1% or, if
there is no nearest single 1/4 of 1%, to the next higher 1/4 of
1%) 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, 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.
"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
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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 offers thereby 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 fraction 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.
"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 Agent pursuant to Section 7.01(a).
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"Consolidated Funds from Operations" shall mean, for any
period, Consolidated Net Income 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 flows for the Company and its Subsidiaries which has been
delivered to the 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 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 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, 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 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 Agent pursuant to Section 7.01(a).
Page 6
"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 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.
"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.
"Debt Rating" shall mean the highest rating published by at
least two of the three Rating Agencies with respect to the senior
unsecured 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.
"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),
Page 7
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, (x) relating to 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 and the federal Toxic Substances Control Act, the Federal
Insecticide, Fungicide and Rodenticide Act, 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.
"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) or (m) 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.
Page 8
"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, during each fiscal year,
the sale, lease (not entered into in the ordinary course of business),
transfer or disposal of assets, the aggregate proceeds of which, in
one or more transactions, are less than $20,000,000.
"Excluded Tax" means 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 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 Agent, Participant
or Assignee is organized or any political subdivision thereof, (B) the
jurisdiction of such Bank's, Participant's, Assignee's or the Agent's
applicable lending office or any political subdivision thereof or (C)
any jurisdiction in which the Bank, the 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 such
Bank or the 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 Agent, as the case may be, is available
to such Bank, Participant, Assignee or the 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
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.
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"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 including the receipt by the Agent of a
letter or letters evidencing the Company's Debt Rating) in effect on
the date on which such Facility Fee payment is due:
Pricing Level Facility Fee
------------- ------------
I 0.125%
II 0.150%
III 0.150%
IV 0.150%
V 1.250%
"Federal Funds Rate" for any day shall mean the rate
(rounded to the nearest 1/16 of 1% or, if there is no single
nearest 1/16 of 1%, to the next higher 1/16 of 1%) 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.
"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
Page 10
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.
"Increase Notice" shall have the meaning ascribed to such
term in Section 2.11.
"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
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) all Indebtedness
referred to in clauses (a), (b), (c) or (d) 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, (f) all preferred stock issued by
such Person which is redeemable, prior to the full
Page 11
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 (g) all Indebtedness of others
Guaranteed by such Person. For purposes of this Agreement, the amount
of any Indebtedness under clauses (c) and (e) 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, in the case of Eurodollar Loans; such period being the
one selected by the Company in a Pro Rata Loan Request or Competitive
Loan Request and 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 agreement, interest rate 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.
"Key Management" shall mean Thomas A. Lewis, Richard J.
VanDerhoff, Gary M. Malino, Michael R. Pfeiffer and Richard G.
Collins.
"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 (rounded to the nearest 1/16 of 1% or, if there is no
nearest single 1/16 of 1%, to the next higher 1/16 of 1%) 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.
Page 12
"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 (including the
partnerships which were merged into the Company), taken as a whole
since December 31, 1996.
"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, 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 federal, state, local and foreign taxes paid or payable
in connection therewith and (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, (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 and 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
Page 13
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 the lost, damaged,
stolen, destroyed or condemned property within twelve months from the
date of such award or compensation 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,
tenders, contracts (other than contracts for the payment of money),
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, (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 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
Page 14
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.
"Person" shall mean any individual, sole proprietorship,
partnership, joint venture, trust, unincorporated organization,
association, corporation, 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.
"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(a).
"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.
"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.
Page 15
"Rating Agency" shall mean Moody's Investors Service, Inc.,
Standard & Poor's, a division of the McGraw Hill Companies, Inc., or
Duff & Phelps Credit Rating Co.
"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 51% of the Total Commitment or, if the Total Commitment has been
canceled or terminated, holding Notes evidencing at least 51% of the
aggregate unpaid principal amount of the Loans.
"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 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 and (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.
"Subsidiary" shall mean any Person of which or in which the
Company and its other Subsidiaries own directly or indirectly 50% or
more of:
Page 16
(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
(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 purposes of this
paragraph, 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.
"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,
charge, governmental fee, deduction or withholding 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, 2000 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
Page 17
Business Day, the next succeeding Business Day; in all cases, subject
to the provisions of Section 11.12(d).
"Texas Subsidiary" means Realty Income Texas Properties,
L.P., a Delaware limited partnership of which only the Company and one
or more of its Subsidiaries are partners.
"Total Commitment" shall mean the aggregate Commitment 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.
"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.
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 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
Page 18
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.
(b) Upon receipt of any Pro Rata Loan Request from the
Company, the 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 Agent in immediately available funds at
the office of the 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 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 Agent shall disburse to the
Company on the requested Borrowing Date the Pro Rata Loans requested
in such Pro Rata Loan Request. The 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 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 Agent regarding
such an advance shall affect the rights of the Company with respect to
any non-performing Bank). If the Agent makes such advance, the 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
Agent the amount of such advance on demand, the Company shall promptly
repay such amount to the Agent. Until such amount is repaid to the
Agent by such Bank or the Company, such advance shall be deemed for
all purposes to be a Pro Rata Loan made by the Agent. The 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 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 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 Agent promptly but in no event later than 4:00
P.M., New York City time, on the date of such telephonic notice.
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
Page 19
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 Agent for the account of
the Banks a fee (the "Facility Fee") equal to the Facility Fee Rate
per annum (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 Agent for its own account
such fees as have been or may hereinafter be agreed to between the
Agent and the Company, in the amounts and at the times agreed upon.
(c) On the Effective Date the Company shall pay to the 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 Agent and the Company, in the amounts and at the times
agreed upon.
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 Agent and upon payment of the Facility
Fees relating to the amount of the Total Commitment canceled or
reduced which have been 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
Page 20
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
Agent in the case of Eurodollar Pro Rata Loans, and upon written
notice delivered by 11:00 A.M. New York City time the day of the
proposed prepayment to the 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 therefrom
received are reinvested in similar assets within 90 days of such
disposition of such assets, (ii) the Company or a Subsidiary issues,
assumes or incurs Specified Additional Indebtedness or (iii) the
Company sells or issues equity securities, 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.
(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
Page 21
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 Agent a certificate signed by the
chief financial officer of the Company, which shall be in form and
substance satisfactory to the 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
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 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
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
Page 22
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
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 Agent, at such time (if any) as it is a Bank,
shall elect to submit a Competitive Bid, the 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 Agent,
after conferring with the Company, and the Agent shall notify the Bank
that submitted such Competitive Bid of such rejection as promptly as
practicable. The 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 Agent
notice to that effect or
(ii) accept one or more Competitive Bids, in its sole
discretion, by giving notice to the 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
Agent notice to that effect; provided that the aggregate
Page 23
principal amount of such offers accepted by the Company
shall be in a principal amount equal to $1,000,000 or in
integral multiples 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 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 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 the portion 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 integral multiples 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 (E) 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 Agent that a Borrowing
Notice for Competitive Loans is canceled, the Agent shall give prompt
notice thereof to the Banks.
Page 24
(f) If the Company accepts one or more Competitive Bids,
the 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 Agent pursuant to Section 2.06(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 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 Agent shall promptly disburse such funds to
the Company in funds immediately available at the Company's office
specified in Section 11.06.
(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 last 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
Page 25
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 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 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 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 thereto),
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
Page 26
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 Agent in immediately available funds, at the
office of the Agent at its address set forth on the signature pages
hereof. After the Agent's receipt of such funds and upon satisfaction
by the Company, or waiver by the Agent of each of the conditions
precedent contained in Article VI applicable thereto, the Agent will
disburse such funds to the Company.
(e) Repayment. The Company shall repay to the 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 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 $5,000,000) 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 1:00 P.M., New York time, with a copy of such demand to the
Agent, 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
Page 27
the date of such demand, by making available to the 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 to purchase its Pro Rata Share of an outstanding
Swing Line Advance 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 have so made the amount of such Swing Line Advance
available to the Agent, such Bank agrees to pay to the 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 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.
Section 2.11. Increase in Commitments. (a)(i) The Company
may, by submitting a notice (an "Increase Notice") to the Agent,
request that the Banks increase the Total Commitment up to the amount
specified therein, provided that the amount of such increase shall be
an integral multiple of $5,000,000 and the Total Commitment after such
increase shall not be greater than $200,000,000. Promptly upon
receipt of such Increase Notice from the Company, the Agent shall
notify the Banks and any new lenders of the contents thereof. Each
Bank and new lender shall provide written notice to the Agent, no
later than 21 days after the date on which the Increase Notice shall
have been given to the Agent, of the amount, if any, by which such
Bank agrees to increase its Commitment or such new lender agrees to
establish as its Commitment. Promptly upon receipt of such notice
from any Bank, the Agent shall notify the Company of the contents
thereof. To the extent that the aggregate amount of the proposed
Commitments of such new lenders and the proposed increase of the
Commitments of such existing Banks is less than the aggregate amount
of the increase of the Commitments requested by the Company, the
Company may either (A) request the Agent to solicit the Banks for
further increases in their Commitments or (B) amend the Increase
Notice by reducing the requested amount by which the aggregate amount
of the Commitments is to be increased to an amount equal to the
aggregate amount of proposed Commitments of such new lenders and the
proposed increase of the Commitments of such existing Banks.
(ii) Upon the effectiveness of the increase in Commitments
pursuant to Section 2.11(b) below, each of the new lenders shall
execute and deliver a counterpart of this Agreement, Schedule 1 shall
be amended by the Company and the Agent to reflect the increase in the
Commitment of any existing Bank and the Commitments of such new
Page 28
lenders, and such new lenders shall be and become Banks hereunder for
all purposes hereof and of the Credit Documents. In connection with
any such increase, the Borrower shall execute and deliver new Pro Rata
Notes to reflect appropriately such new Commitments and the Banks
(including such new lenders) shall effect such purchases and sales
among themselves of portions of the outstanding Loans (other than
outstanding Competitive Loans) as shall be necessary to reflect such
Commitments, as specified by the Agent, and, in connection with such
purchases and sales, the Borrower shall pay to each affected Bank, in
the case of Banks that are sellers of Loans, an amount equal to the
amount that the Borrower would have had to pay pursuant to Section
4.04 if such Loans, or portions thereof, were prepaid on such Increase
Date or, in the case of Banks that are purchasers of Loans, such
amount, determined as if Section 4.04 were applicable thereto,
specified by such Bank as necessary to compensate it for the funding
of the Loans, or portions thereof, purchased by it.
(b) An increase in Commitments pursuant to this Section
2.11 shall become effective on the Increase Date so long as each of
the following conditions shall have been fulfilled on and as of such
date: (i) the Agent shall have consented to any such new lenders;
(ii) the Agent shall have received opinions of counsel to the Borrower
in form and substance reasonably satisfactory to the Agent; (iii) the
conditions to the making of Loans set forth in Section 6.02 shall be
fulfilled on and as of such Increase Date as if Loans were made
thereon; and (iv) the Agent shall have received such other instruments
and documents, in form and substance satisfactory to it, as it shall
have reasonably requested.
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 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
Page 29
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 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.
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 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
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 Agent as its
Page 30
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.
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 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 Date as either ABR Loans
or Eurodollar Pro Rata Loans.
(b) Upon receipt of any such Conversion/ Continuance
Request from the Company, the 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 Agent telephonic notice hereunder by the required
time under this Section 3.04; provided that such telephonic notice
shall be confirmed by delivery of a written notice to the 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 Absolute
Page 31
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 (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. All payments by the
Company hereunder and under the Notes shall be made without set-off or
counterclaim to the 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 Agent on the date when due.
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
Page 32
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 cost, loss, premium or penalty incurred (other
than any cost, 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(c) 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
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
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 Agent, a
certificate, signed by an officer of such Bank or Swing Line Bank,
Page 33
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 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 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
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,
Page 34
Participant, Assignee or the 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 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 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 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 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
Agent (each in the reasonable exercise of its discretion), such
certificates, 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.
Page 35
(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.
(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 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 and fees, 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
Page 36
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 any 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 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 sum of 2% and 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 37
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 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 and fees, 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(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 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 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 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 faith with any law or
guideline or interpretation or administration thereof by any official
body charged with the interpretation or administration thereof or
Page 38
with any request or directive of such body (whether or not having the
effect of law), because U.S. dollar deposits in the amount and
requested maturity of such Eurodollar Loans are not available to the
Bank in the London Eurodollar Interbank market, or because of any
other reason, then the 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 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:
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).
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;
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,
Page 39
existing, qualified, or to be in good standing, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse
Effect.
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.
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.
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.
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.
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
Page 40
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.
Financial Condition. (i) (A) The consolidated balance
sheet as of December 31, 1996, together with consolidated statements
of income, stockholders' equity and cash flows for the fiscal year
then ended, audited by KPMG Peat Marwick, included in the Realty
Income Corporation 1996 Year End Report and (B) the consolidated
balance sheet as of
September 30, 1997, together with the consolidated statements of
income and cash flows for the 9 months then ended certified by the
chief financial officer of the Company, heretofore delivered to the
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,
1996 there has been no Material Adverse Change.
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.
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.
Margin Regulations. No part of the proceeds of any Loan
will be used to purchase or carry, or to reduce or retire or refinance
any credit incurred to purchase or carry or extend credit to others
for the purpose of purchasing or carrying, any "margin stock" as
defined in Regulation G or Regulation U of the Board of Governors of
the Federal Reserve System.
Page 41
No Material Misstatements. All written information
relating to the Company and its Subsidiaries heretofore delivered by
the Company and its Subsidiaries to the Agent or any Bank in
connection with the Credit Documents is complete and correct in all
material respects.
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 September 30, 1997,
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.
Leases. 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 sub-lessees, 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.
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.
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) 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
Page 42
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.
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 30, 1993, under Title IV of ERISA with respect to any "single
employer plan" within the meaning of Section 4001(a)(15) of ERISA. 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 302(f) of ERISA.
(iii) No liability under Sections 4062, 4063, 4064 or
4069 of ERISA has been or is expected by the Company to be incurred by
the Company or 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.
(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
Page 43
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.
Intellectual Property. The Company and each of its
Subsidiary 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.
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.
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 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 engaged in such businesses, (ii) the properties presently or
formerly owned or operated by the Company (including, without
limitation, soil, groundwater or 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, such
representation is limited to the period the Company owned or operated
such Properties), (iii) the Company has not 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 may be in violation of, or liable under, in any
respect, any Environmental Law in connection with the ownership or
Page 44
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 with respect to the Company 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
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, 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
relating to the Company 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 as a sanitary
landfill or hazardous waste disposal site and (ix) the Company has not
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.
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.
Insurance. All of 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, 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.
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, 1994. No fact, event or condition has occurred which could
jeopardize the Company's tax status as a REIT.
Page 45
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:
Credit Agreement. The Agent shall have received this
Agreement duly executed and delivered by each of the Banks and the
Company.
Notes. The 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.
Good Standing Certificates. The 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).
Secretary's Certificate. The 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.
Authorizations. The 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.
Opinion of Company Counsel. The Agent shall have received
a favorable written opinion, 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.
Page 46
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 Agent or any Bank, could
materially impair the ability of the Company to perform its
obligations hereunder or thereunder.
Other Agreements. The Agent shall have received copies of
other 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 Agent.
Capital Structure. The Company's capital structure shall
be acceptable to the Agent.
Fees. The Agent shall have received from the Company the
fees set forth in Section 2.04 and fees of Agent's counsel which are
due and payable on the Effective Date.
Other Documents. The Agent shall have received such other
certificates and documents as the 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 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 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 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
Page 47
or Swing Line Advance, and the Agent shall have received from the
Company a certificate to that effect signed by an authorized officer
of the Company.
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 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 Peat Marwick, one of the other "Big Six"
accounting firms or another independent certified public
accountant reasonably satisfactory to the Agent, prepared
in a format and in scope consistent with the
December 31, 1996 financial statements and reports of the
Company referenced in Section 5.01(h);
(iii) as soon as available, but in no event later
than 60 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 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 last date
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
Page 48
with calculations, where applicable, which establish the
Company's (and where applicable, each of the Company's
Subsidiaries') compliance therewith;
(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 Agent and the Banks from time to time may
reasonably request including but not limited to the
quarterly furnishing to the 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 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 the 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. Upon receipt of any
such notice of default or adverse development, the Agent shall
forthwith give notice to each Bank of the details thereof.
Page 49
(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 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 payment to the
Plan which would give rise to a lien in favor of the Plan under
Section 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 multiemployer plan.
(d) Other Reports, Notices and Materials. Furnish to the
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 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 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
Page 50
the date on which penalties are attached 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 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 Agent and the Banks to have one or more of their
officers and employees, or any other Person designated by the 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 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 Agent or the Banks
reasonably may desire.
Page 51
(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 materially all laws, rules and
regulations of all Governmental Authorities.
(m) Maintenance of Property, Etc. (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, 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
judgment of the Agent, may be necessary or advisable to carry out the
intent and purpose of this Agreement.
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 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) the agreements and covenants entered into in connection therewith
would be, in the written determination of the
Page 52
Agent, no more restrictive on the Company than the agreements and
covenants hereunder, (B) such Indebtedness is unsecured, (C) the
maturity of such Indebtedness (including all scheduled payments of
principal) is later than the Termination Date, (D) such Indebtedness
ranks pari passu or subordinate to the Notes and (E) after giving
effect to the incurrence of such Indebtedness, the Company's interest
coverage ratio 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 2.50:1.00. The
Company shall not permit any Subsidiary to create, incur, assume or
suffer to exist any Indebtedness except to the Company or another
Subsidiary, and such Indebtedness may not exceed $3,500,000."
(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
Permitted Encumbrances.
(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 $50,000,000; (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 $50,000,000, 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;
provided, that the Company shall be permitted to spend up to
$10,000,000 to acquire shares of its common stock.
(d) Negative Pledge. Grant any Person a negative pledge on
any assets of the Company or of the Subsidiaries, except as provided
in the Stockholder Notes and in any Permitted Note Refinancing.
Page 53
(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, (ii) direct obligations of, or obligations
the principal of and interest on which are unconditionally guaranteed
by, the United States of America with a maturity not exceeding one
year and debt of federal government agencies and treasury and United
States government money market accounts, (iii) short-term domestic or
Eurodollar time deposits of any Bank or any bank having a combined
capital and surplus of not less than $500,000,000 and a long-term debt
rating of A or better from Standards & Poor's Corporation or A2 or
better from Moody's Investors Services, Inc. with a maturity not
exceeding one year, (iv) normal business banking accounts and short-
term certificates of deposit in federally insured financial
institutions, (v) capital contributions to the Texas Subsidiary by the
Company or a Subsidiary of the purchase price for acquisitions by the
Texas Subsidiary of properties that the Company would be allowed to
acquire directly under this Agreement, provided that, the Subsidiary
Guarantee of the Company's payment obligations under this Agreement,
attached hereto as Exhibit I, shall remain in full force and effect,
and (vi) shares of the Company's common stock; provided that the
Company shall not spend more than $10,000,000 in acquiring such
shares.
(f) 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
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, 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; and
provided further that the Company may spend up to $10,000,000 to
acquire shares of its common stock.
(g) Stock of Subsidiaries. Issue, sell or otherwise
dispose of any shares of capital stock of any Subsidiary (except in
connection with a merger or consolidation of a Wholly owned Subsidiary
permitted by Section 7.02(c) or with the dissolution of any
Subsidiary) or permit any Subsidiary to issue any additional shares of
its capital stock except pro rata to its stockholders.
(h) Terms of Indebtedness. Amend or modify, or permit to
be amended or modified the terms of any Company or Subsidiary
Page 54
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 from the
Agent.
(i) Contracts. Amend or modify (i) the Company's
certificate of incorporation, (ii) the Real Estate Investment Criteria
to a material degree or (iii) any tax sharing, management or other
similar agreement between or among the Company and any of its
Subsidiaries without the approval of the independent board of
directors.
(j) 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 fair and reasonable terms no less favorable to the Company or
such Subsidiary, as the case may be, than could be obtained in an
arm's length transaction with a person not an Affiliate.
(k) Mortgage Financings. Enter into any mortgage
financings.
(l) 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 Agent shall use their
best efforts to grant or deny within 10 Business Days of receipt by
the 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
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 $15,000,000 or two contiguous lots occupied by more than
one tenant, the price of which exceeds $30,000,000.
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 (i) $350,000,000 plus (ii) 75% of the sum of the net
proceeds received by the Company after December 31, 1997 from any
offering of its equity securities.
Page 55
(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 2.50:1.00.
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 Note 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 Note 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
(f) Any obligation (other than its obligation hereunder) of
the Company or any of its Subsidiaries for the payment of Indebtedness
in excess of $500,000 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
Page 56
(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 $500,000, 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 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 or receipt of notice of an application by the PBGC to
institute proceedings to terminate the Plan pursuant to Section 4042
of ERISA; in each case, if the amount of unfunded benefit
Page 57
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
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) 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
(l) The Company shall fail to maintain its status as a
"real estate investment trust", as such term is defined in the Code;
or
(m) There shall occur a Change of Control; or
(n) During any twelve month period two or more members of
Key Management are terminated or resign;
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 and the other Banks to make any
further Swing Line Advances under this Agreement shall terminate upon
declaration to that effect delivered by the 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 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.
Page 58
ARTICLE IX
THE AGENT AND THE BANKS
Section 9.01. The Agency. (a) Each Bank appoints The Bank
of New York as its Agent hereunder and irrevocably authorizes the
Agent to take such action on its behalf and to exercise such powers
hereunder as are specifically delegated to the Agent by the terms
hereof, together with such powers as are reasonably incidental hereto,
and the Agent hereby accepts such appointment subject to the terms
hereof. The relationship between the Agent and the Banks shall be
that of agent and principal only and nothing herein shall be construed
to constitute the Agent a trustee for any Bank nor to impose on the
Agent duties or obligations other than those expressly provided for
herein.
Section 9.02. The Agent's Duties. The 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 Agent shall promptly give notice thereof to
the Banks. As to any other matter not expressly provided for herein
or therein, the 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 Agent shall not be bound by 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 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 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 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
Page 59
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 Agent's Liabilities. Each of the Banks
and the Company agrees that (i) neither the 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
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 Agent, and (iii) the
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 Agent as a Bank. The Agent shall have
the same rights and powers hereunder as any other Bank and may
exercise the same as though it were not the Agent, and the terms
"Bank" or "Banks", unless the context otherwise indicated, include the
Agent in its individual capacity. The 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 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 Agent is a
party, the 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
Page 60
Company or any of its Subsidiaries, whether such information comes
into the 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 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 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.
Section 9.07. Indemnification. Each Bank agrees (which
agreement shall survive payment of the Loans and the Notes) to
indemnify the Agent, to the extent not reimbursed by the Company,
ratably in accordance with their respective Commitments, 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 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 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 Agent or any of its officers or
employees. Without limiting the foregoing, each Bank agrees to
reimburse the Agent promptly upon demand for its ratable share of any
out-of-pocket expenses (including counsel fees) incurred by the 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 Agent is not
reimbursed for such expenses by the Company.
Section 9.08. Successor Agent. The Agent may resign at any
time by giving written notice thereof to the Banks and the Company,
and the Agent may be removed at any time by the Required Banks by
giving written notice thereof to the 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 Agent. If no successor
Agent shall have been so appointed by the Required Banks and shall
have accepted such appointment within 30 days after the resigning
Agent's giving of notice of resignation, or the Required Banks' giving
notice of removal, as the case may be, the resigning Agent may, on
behalf of the Banks, appoint a successor 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. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor
Agent shall thereupon succeed to and become vested with all
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the rights, powers, privileges and duties of the resigned or removed
Agent, and the resigned or removed Agent shall be discharged from its
duties and obligations under this Agreement. After any Agent's
resignation hereunder as 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 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 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 appoints CT Corporation System, with offices on the
date hereof at 1633 Broadway, New York, New York 10019, as its
authorized agent on whom process may be served in any action which may
be instituted against it by the 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
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 LAWS OF THE
STATE OF NEW YORK, UNITED STATES OF AMERICA.
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.
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Section 11.03. Expenses. The Company agrees to pay (i) all
reasonable out-of-pocket expenses of the Agent (including, without
limitation, all reasonable fees and expenses of Sullivan & Cromwell,
as counsel to the 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 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 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 the Company and the Required
Banks (and, if the rights or duties of the Agent or the Swing Line
Bank are affected thereby, by the 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) 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 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 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 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.
Page 63
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
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 92025-1725
Telecopy: (619) 741-8674
Attention: Legal Department
If to the Agent or the Swing Line Bank, at its address as
indicated on the signature pages hereof, with a copy, only in the case
of default notices, to:
Sullivan & Cromwell
444 South Flower Street, 12th Floor
Los Angeles, California 90071
Telecopy: (213) 683-0457
Attention: Alison S. Ressler
If to any Bank, at its address as indicated on the signature
pages hereof.
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.
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(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 Agent, such Bank shall
remain responsible for the performance of its obligations hereunder,
and the Company and the Agent shall continue to deal solely and
directly with such Bank in connection with such Bank's rights and
obligations under this Agreement. 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 (vi), 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 instrument executed by such Assignee and such transferor Bank,
with (and subject to) the signed consents of the Company and the 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 Agent of an administrative fee in the
amount of $3,500, such Assignee shall be a Bank party to this
Agreement and shall have all the rights and
Page 65
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
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 with the Company's prior written consent or 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.
Section 11.09. WAIVER OF JURY TRIAL. THE COMPANY, THE
AGENT AND EACH OF THE BANKS HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL
PROCEEDING INVOLVING, DIRECTLY OR INDIRECTLY, ANY MATTER (WHETHER
SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY WAY ARISING OUT OF,
RELATED TO, OR CONNECTED WITH THIS AGREEMENT, THE NOTES OR THE
RELATIONSHIPS ESTABLISHED HEREUNDER.
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 Agent, 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
Page 66
Agreement or any Note or any agreement or instrument contemplated
hereby or thereby, the performance by the parties 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 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 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.
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(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 Agent, whereupon (unless Banks with an aggregate
percentage of the Total Commitment in excess of 25% decline to extend
their respective scheduled Termination Dates, in which event the 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-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 not in excess of 25% 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 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 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 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,
Page 68
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 4.3 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.
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: /s/ Michael R. Pfeiffer
---------------------------
Name: Michael R. Pfeiffer
Title: Senior Vice
President, General
Counsel and
Secretary
THE BANK OF NEW YORK,
as Agent for the Banks
By: /s/ Lisa Y. Brown
---------------------------
Name: Lisa Y. Brown
Title: Vice President
Page 69
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 1700
Los Angeles, CA 90024
Attn: Lisa Y. Brown
Vice President
Fax: (310) 996-8667
THE BANK OF NEW YORK
as a Bank and as the
Swing Line Bank
By: /s/ Lisa Y. Brown
---------------------------
Name: Lisa Y. Brown
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
Page 70
With a copy to:
The Bank of New York
10990 Wilshire Boulevard
Suite 1700
Los Angeles, CA 90024
Attn: Lisa Y. Brown
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
SANWA BANK CALIFORNIA
By: /s/ Dirk Price
Name: Dirk A. Price
Title: Vice President
Address for Notices:
Sanwa Bank California
601 S. Figueroa St., 8th Floor
Los Angeles, CA 90017
Attn: Dirk A. Price
Vice President
Fax: (213) 896-7282
Eurodollar Lending Office:
Sanwa Bank California
601 S. Figueroa St., 8th Floor
Los Angeles, CA 90017
Attn: Dirk A. Price
Vice President
Fax: (213) 896-7282
Page 71
FIRST UNION NATIONAL BANK
By: /s/ John Schissel
---------------------------
Name: John Schissel
Title: Vice President
Address for Notices:
One First Union Center, DC-6
Charlotte, NC 28288
Attn: John Schissel
Fax: (704) 383-6205
Eurodollar Lending Office:
One First Union Center, DC-6
Charlotte, NC 28288
Attn: John Schissel
Fax: (704) 383-6205
BANK HAPOALIM, B.M.
SAN FRANCISCO BRANCH
By: /s/ Paul Watson
---------------------------
Name: Paul Watson
Title: Vice President
By: /s/ John Rice
---------------------------
Name: John Rice
Title: Vice President/
Senior Loan Officer
Address for Notices:
250 Montgomery Street, Ste 700
San Francisco, CA 94104
Attn: Paul Watson
Fax: (415)989-9948
Eurodollar Lending Office:
250 Montgomery Street, Ste 700
San Francisco, CA 94104
Attn: Paul Watson
Fax: (415)989-9948
Page 72
DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN
BRANCH
By: /s/ Christopher E. Sarisky
---------------------------
Name: Christopher E.
Sarisky
Title: Assistant Treasurer
By: /s/ Colleen Madden
---------------------------
Name: Colleen Madden
Title: Vice President
Address for Notices:
Dresdner Bank AG
333 So. Grand Ave., Ste. 1700
Los Angeles, CA 90071
Attn: Vitol Wiacek
Fax: (213) 473-5450
Eurodollar Lending Office:
Dresdner Bank AG, New York Branch
75 Wall Street
New York, NY 10005
Attn: Robert Reddington
Fax: (212) 429-2130
BANK OF MONTREAL
By: /s/ John Mead
---------------------------
Name: John Mead
Title: Director
Address for Notices:
115 S. LaSalle St., 12th Fl.
Chicago, IL 60603
Attn: Jeff Forsythe
Director
Fax: (312) 750-4352
Page 73
Eurodollar Lending Office:
115 S. LaSalle St., 12th Fl.
Chicago, IL 60603
Attn: Debra Fahey
Fax: (312) 750-4345
AMSOUTH BANK
By: /s/ John Meriwether
---------------------------
Name: John Meriwether
Title: Senior Vice
President
Address for Notices:
P.O. Box 11007
Birmingham, AL 35288
Attn: John Meriwether
Fax: (205) 326-4075
Eurodollar Lending Office:
P.O. Box 11007
Birmingham, AL 35288
Attn: Sue Ailshie
Fax: (205) 326-4075
Page 74
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 Amended and Restated Revolving Credit Agreement, dated
as of November 29, 1994 and amended and restated as of December __,
1997, among the Company, the Banks and The Bank of New York, as Agent
and 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 75
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 Amended and Restated Revolving Credit Agreement,
dated as of November 29, 1994 and amended and restated as of December
__, 1997, among the Company, the Banks and The Bank of New York, as
Agent and 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 ___________, 19__ 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 $150,000,000
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 76
EXHIBIT C-1
Form of Competitive Loan Request
[Date]
The Bank of New York, as 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 Amended and Restated Revolving
Credit Agreement, dated as of November 29, 1994 and amended and
restated as of December __,1997 (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 Agent. 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 77
(1) Must be a Business Day.
(2) Must be an amount not less than $1,000,000, or an integral
multiple 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.
Page 78
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 Amended and Restated Revolving
Credit Agreement, dated as of November 29, 1994 and amended and
restated as of December __, 1997 (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 Agent. 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 79
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 Amended and Restated Revolving
Credit Agreement, dated as of November 29, 1994, and amended and
restated as of December __, 1997 (as amended, modified or supplemented
from time to time, the "Credit Agreement"), among Realty Income
Corporation (the "Company"), the other lenders from time to time
parties thereto and The Bank of New York, as Agent. 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:
(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.
Page 80
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
Amended and Restated Revolving Credit Agreement, dated as of November
29, 1994, and amended and restated as of December __, 1997 (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 Agent.
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 81
EXHIBIT D-1
FORM OF PRO RATA NOTE
$__________________ December __, 1997
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 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 Amended and Restated Revolving Credit
Agreement dated as of November 29, 1994 and amended and restated as of
December __, 1997 (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 Agent and 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, 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.
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.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Page 82
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:
Loan and Payments of Principal and Interest
Interest Interest
Method period if
Amount (ABR or Eurodollar
Date of Loan Eurodollar) Loan)
- -------- --------- ------------ -------
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
Page 83
Name of
Amount of Unpaid Amount of Person
Principal Principal Interest Making
Paid Balance Paid Notation
- --------- --------- ---------- ----------
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
Page 84
EXHIBIT D-2
FORM OF COMPETITIVE NOTE
$[75,000,000] __________________
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 Agent, at One Wall Street, New
York, New York 10286, in lawful money of the United States, the
principal sum of $[75,000,000] or if less, the aggregate unpaid
principal amount of all Competitive Loans made by the Bank to the
Company pursuant to that certain Amended and Restated Revolving Credit
Agreement dated as of November 29, 1994 and amended and restated as of
December __, 1997 (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 Agent and 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.
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.
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED AND
INTERPRETED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
Page 85
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:
Loan and Payments of Principal and Interest
Interest Interest
Method period if
Amount (ABR or Eurodollar
Date of Loan Eurodollar) Loan)
- -------- --------- ------------ -------
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
Page 86
Name of
Amount of Unpaid Amount of Person
Principal Principal Interest Making
Paid Balance Paid Notation
- --------- --------- ---------- ----------
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
__________________________________________________________
Page 87
EXHIBIT D-3
FORM OF SWING LINE NOTE
$15,000,000 December __, 1997
Realty Income Corporation, a Delaware 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 November 29,
1994, and amended and restated as of December __, 1997 (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 Agent and 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 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
Agreement.
This Note is the Swing Line Note referred to in the
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
Agreement, all upon the terms and conditions therein specified.
Unless otherwise defined herein, capitalized terms used herein have
the respective meanings specified in the Agreement.
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 88
SWING LINE ADVANCES AND PRINCIPAL PAYMENTS
Amount of Swing
Line Advances Made
Swing Line
Date Advance Maturity Interest Rate
- ----- -------------- ---------- --------------
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
________________________________________________________________
Page 89
Amount of
Amount of Unpaid
Principal Principal
Repaid Balance
Swing Line Swing Line Notation
Advance Advance Total Made by
- ---------- ---------- -------- ----------
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
___________________________________________________________
Page 90
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 Amended and Restated
Revolving Credit Agreement, dated as of November 29, 1994 and amended
and restated as of December __, 1997, among the Company, the Banks and
The Bank of New York, as Agent and Swing Line Bank (as amended,
supplemented or otherwise modified from time to time, the
"Agreement").
The Company hereby confirms that the amounts of Loans and
Swing Line Advances outstanding on the date hereof are as follows:
Total Commitment $150,000,000
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 91
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 1
December __, 1997
EXHIBIT F-1
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: Amended and Restated Revolving Credit Agreement dated as
of November 29, 1994 and amended and restated as of
December __, 1997, among Realty Income Corporation, the
Banks Named Therein and The Bank of New York, as Agent
and Swing Line Bank
Ladies/Gentlemen:
We have acted as special counsel for Realty Income
Corporation, a Maryland corporation (the "Company"), in connection
with the Amended and Restated Revolving Credit Agreement (the "Credit
Agreement") dated as of November 29, 1994 and amended and restated as
of December __, 1997, among the Company, each of the banks identified
on the signature pages thereof (the "Banks") and The Bank of New York,
as Agent for the Banks and Swing Line Bank (the "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;
Page 92
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 2
(b) The following promissory notes of the Company dated
_________________, 1997 (collectively, the "Notes",
and together with the Credit Agreement, the "Loan
Documents"): (i) note in the original principal
amount of $__________ payable to The Bank of New
York; (ii) note in the original principal amount of
$_________________ payable to ______________; [and
(____) note in the original principal amount of
$_____________ payable to _____________________;]
(c) The Amended and Restated Certificate of
Incorporation and Amended and Restated Bylaws of
the Company; and
(d) 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:
Page 93
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 3
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 G, 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.
2. Each of the Loan Documents has been duly executed and
delivered by the Company and constitutes a legally valid and binding
obligation of the Company enforceable against the Company 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.
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.
Page 94
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 4
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.
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 95
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 1
December ___ , 1997
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: Amended and Restated Revolving Credit Agreement dated as
of November 29, 1994 and amended and restated as of
December __, 1997, among Realty Income Corporation, the
Banks Named Therein and The Bank of New York, as Agent
and 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 Amended and Restated Revolving
Credit Agreement (the "Credit Agreement") dated as of November 29,
1994 and amended and restated as of December __, 1997, among the
Company, each of the banks identified on the signature pages thereof
(the "Banks") and The Bank of New York, as Agent for the Banks and
Swing Line Bank (the "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;
Page 96
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 2
(b) The following promissory notes of the Company dated
_____________, 1997 (collectively, the "Notes", and
together with the Credit Agreement, the "Loan
Documents"): (i) note in the original principal amount
of $_____________ payable to The Bank of New York; (ii)
note in the original principal amount of $____________
payable to ________________ [[and] (_____) note in the
original principal amount of $__________ payable to
________________];
(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:
Page 97
The Bank of New York,
as Agent for the Banks
December __, 1997
Page 3
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.
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 98
Exhibit G
---------
Form of Property Management Exception Report
This document has been excluded.
Page 99
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 on
the property by a certain date.
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 amount of
annualized rental revenue to be derived by the Company from any
one industry to exceed 25% of the Company's previous 12 month's
rental revenues.
Page 100
EXHIBIT I
SUBSIDIARY GUARANTY
This SUBSIDIARY GUARANTY, dated as of December 13, 1994, is made by
each entity that is identified on Schedule A hereto or that hereafter
executes and delivers a Subsidiary Joinder 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 ("BONY"), as
agent (BONY and any successor thereto in such capacity, "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 Agent have entered into that certain
Credit Agreement, dated as of November 28, 1994 (as amended,
supplemented or otherwise modified from time to time, the "Credit
Agreement"), among Realty Income Corporation, a Delaware corporation
("Borrower"), 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 any future Subsidiaries of Borrower to which the Borrower or any
Subsidiary of Borrower transfers its properties located in the State
of Texas to become party to this Guaranty, as a Guarantor hereunder,
by executing and delivering a Subsidiary Joinder as set forth in the
Credit Agreement.
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 101
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 Sections 1.2 and 1.3 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
_______________, 1994, made by the Guarantors for the benefit of the
Lenders, 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
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 102
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 (i) 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
Page 103
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
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
Page 104
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;
(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
Page 105
(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) 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
Page 106
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 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 unmatured, 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.
Page 107
(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 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 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
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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, 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 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
Page 109
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 f 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.
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
Page 110
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.
(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 therefore.
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: Richard J. VanDerhoff,
Esq., with a copy to: Michael J. Brody Esq., Latham & Watkins, 633
West Fifth Street, Suite 4000, Los Angeles, CA 90071-2007, if to
Agent, at The Bank of New York, One Wall Street, 18th Floor, New York,
NY 10286, Attention: Kalyani Bose -- Agency Function Administration,
with a copy to: Sullivan & Cromwell, 444 South Flower Street, Los
Angeles, CA 90071, Attention: Alison S. Ressler; 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.
Page 111
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 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 effected
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.
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
Page 112
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
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
Page 113
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.
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:
Realty Income Texas Properties, L.P,
a Delaware limited partnership
By: Realty Income Corporation
Its: General Partner
By: _______________________________
Michael R. Pfeiffer
Senior Vice President,
General Counsel
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Schedule 1
----------
Commitments
-----------
BANK ALLOCATION
- ----------------------------------------------------
The Bank of New York $32,000,000
AmSouth Bank $22,000,000
Bank of Montreal $22,000,000
Dresdner Bank $22,000,000
First Union $22,000,000
Sanwa Bank $17,000,000
Bank Hapoalim $13,000,000
============
TOTAL $150,000,000
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Schedule 5.01(a)
----------------
Subsidiaries and Joint Ventures of the Company
----------------------------------------------
SUBSIDIARIES:
Realty Income Texas Properties, Inc., a Delaware corporation
Realty Income Texas Properties, L.P., a Delaware limited
partnership
CO-TENANCIES:
Sizzler #514
101 North Village Court
San Dimas, CA 91773
Sizzler #567
9588 Baseline Road
Rancho Cucamonga, CA 91730
Children's World #134
510 West Second Street
Corona, CA 91720
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Schedule 5.01(q)
----------------
ERISA Liabilities
-----------------
1. Termination of the Realty Income Corporation Defined Benefit
Pension Plan (the "Plan") on January 2, 1996. All Plan benefits were
distributed on or before February 24, 1997.
Page 117
Schedule 5.01(r)
----------------
Intellectual Property
---------------------
REGISTERED U.S. SERVICE MARKS:
#1,470,945 "R.I.C."
#1,470,946 "RIC"
#1,908,766 "Realty Income Corporation"
#1,928,373 Building & Sun Design
APPLIED FOR U.S. SERVICE MARKS:
#75/182,734 "Realty Income"
#75/182,736 "Realty Income" with Building & Sun Design
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