FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
(Mark One)
[X] QUARTERLY REPORT PURSUANT TO SECTON 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended 3/31/98
SOVRAN SELF STORAGE, INC.
_____________________________________
(Exact name of Registrant as specified in its charter)
Maryland 16-1194043
______________________________ ____________________
(State or other jurisdiction of (IRS Employer
incorporation or organization) Identification No.)
5166 Main Street
Williamsville, NY 14221
(Address of principal executive offices) (Zip code)
(716) 633-1850
____________________________
(Registrant's telephone number including area code)
Indicate by check mark whether the registrant (1) has filed
all reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months
(or for such shorter period that the registrant was required to
file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
(APPLICABLE ONLY TO CORPORATE REGISTRANTS)
Indicate the number of shares outstanding of each of the
registrant's classes of common stock, as of the lastest
practicable date.
Title Outstanding
Common Stock, $.01 par value per share. 12,330,963
Part I. Financial Information
Item 1. Financial Statements
SOVRAN SELF STORAGE, INC.
CONSOLIDATED BALANCE SHEETS
March 31, December 31,
(dollars in thousands, except share data) 1998 1997
- ----------------------------------------- --------- ------------
Assets
Investment in storage facilities:
Land $ 81,841 $ 71,391
Building and equipment 308,508 261,645
-------- --------
390,349 333,036
Less: accumulated depreciation (13,557) (11,639)
-------- --------
Investments in storage facilities, net 376,792 321,397
Cash and cash equivalents 2,987 2,567
Accounts receivable 1,204 834
Prepaid expenses and other assets 3,484 2,275
-------- --------
Total Assets $384,467 $327,073
-------- --------
Liabilities
Line of credit $ 88,000 $ 36,000
Accounts payable and accrued liabilities 5,195 2,167
Deferred revenue 2,506 1,994
Accrued dividends 6,659 6,599
Mortgage payable 3,059 3,559
-------- -------
Total Liabilities 105,419 50,319
Minority interest 12,808 12,843
Shareholders' Equity
Common stock $.01 par value, 100,000,000
shares authorized, 12,330,963 shares
issued and outstanding
(12,221,121 at December 31, 1997) 123 122
Preferred stock, 10,000,000 shares
authorized, none issued and out-
standing, 250,000 shares designated
as Series A Junior Participating
Preferred Stock, $.01 par value - -
Additional paid-in capital 273,317 269,982
Unearned restricted stock (28) (32)
Dividends in excess of net income (7,172) (6,161)
------- --------
Total shareholders' equity 266,240 263,911
------- --------
Total Liabilities and Shareholders'
Equity $384,467 $327,073
======== ========
See notes to financial statements.
Sovran Self Storage, Inc.
Consolidated Statement of Operations
January 1, 1998 January 1,1997
to to
(dollars in thousands, except share data) March 31, 1998 March 31, 1997
- ----------------------------------------- -------------- --------------
Revenues:
Rental income $ 14,175 $ 10,578
Interest and other income 200 154
------------ -----------
Total revenues 14,375 10,732
Expenses:
Property operations & maintenance 2,818 2,154
Real estate taxes 1,188 857
General and administrative 854 744
Interest 1,215 512
Depreciation and amortization 2,097 1,530
----------- -----------
Total expenses 8,172 5,797
Income before minority
interest and extraordinary item 6,203 4,935
Minority interest (205) (64)
----------- ------------
Income before extraordinary item 5,998 4,871
Extraordinary item - extinguishment of debt 350 -
----------- ------------
Net Income $ 5,648 $ 4,871
=========== ============
Earnings per share before
extraordinary item - basic 0.49 0.46
Extraordinary item (0.03) -
----------- ------------
Earnings per share - basic $ 0.46 $ 0.46
=========== ============
Earnings per share - diluted $ 0.46 $ 0.46
=========== ============
Common shares used in basic
earnings per-share calculation 12,289,467 10,707,238
Dividends declared per share $ 0.54 $ 0.52
=========== ===========
See notes to financial statements.
Sovran Self Storage, Inc.
Statement of Cash Flow
January 1, 1998 January 1, 1997
to to
(dollars in thousands, March 31, 1998 March 31, 1997
except per share data) ______________ ______________
- --------------------------------
Operating Activities
Net income $ 5,648 $ 4,871
Adjustments to reconcile net income
to net cash provided by operating activities:
Extraordinary item 350 -
Depreciation and amortization 2,097 1,530
Minority interest 205 64
Restricted stock earned 4 4
Changes in assets and liabilities:
Accounts receivable (343) (287)
Prepaid expenses and other assets (836) 131
Accounts payable and other liabilities 3,130 1,065
Deferred revenue 221 487
------------ ----------
Net cash provided by operating activities 10,476 7,865
------------ ----------
Investing Activities
Additions to storage facilities (53,866) (48,537)
Additions to other assets (851) (10)
------------ ----------
Net cash used in investing activities (54,717) (48,547)
------------ ----------
Financing Activities
Net proceeds from sale of common stock - 32
Proceeds from line of credit draw down 52,000 32,000
Dividends paid (6,599) (5,568)
Minority interest distributions (240) (73)
Mortgage principal payments (500) -
------------ ----------
Net cash provided by financing activities 44,661 26,391
------------ ----------
Net increase (decrease) in cash 420 (14,291)
Cash at beginning of period 2,567 16,687
------------ ----------
Cash at end of period $ 2,987 $ 2,396
============ ==========
Supplemental cash flow information
Cash paid for interest $ 717 $ 512
See notes to financial statements.
SOVRAN SELF STORAGE, INC.
STATEMENT OF CASH FLOW
Supplemental cash-flow information for the quarter
ended March 31, 1998
(dollars in thousands)
- ---------------------------------------------------------------------------
Storage facilities acquired through the issuance of
common stock $ 3,336
Fair value of net liabilities assumed on the acquisition
of storage facilities $ 366
- ---------------------------------------------------------------------------
Dividends declared but unpaid were $6,659 at March 31, 1998
and $6,599 at December 31, 1997
See notes to financial statements.
Notes to Consolidated Financial Statements
(Unaudited)
1. Basis of Presentation
The accompanying unaudited financial statements of Sovran
Self Storage, Inc. (the Company) have been prepared in accordance
with generally accepted accounting principles for interim
financial information and with the instructions to Form 10-Q and
Article 10 of Regulation S-X. Accordingly, they do not include
all information and footnotes required by generally accepted
accounting principles for complete financial statements. In the
opinion of management, all adjustments (consisting of normal
recurring accruals) considered necessary for a fair presentation
have been included. Operating results for the three month
periods ended March 31, 1998 and March 31, 1997 are not
necessarily indicative of the results that may be expected for
the year ended December 31, 1998.
2. Organization
Sovran Self Storage, Inc. (the "Company"), a self-
administered and self-managed real estate investment trust (a
REIT), was formed on April 19, 1995 to own and operate self-
storage facilities throughout the United States. On June 26,
1995, the Company commenced operations effective with the
completion of its initial public offering of 5,890,000 shares
(the Offering). Contemporaneously with the closing of the
Offering, Sovran Self Storage, Inc. acquired, in a transaction
accounted for as a purchase, sixty-two self-storage facilities
(the Original Properties) which had been owned and managed by
Sovran Capital, Inc. and the Sovran Partnerships (Predecessors to
the Company). Purchase accounting was applied to the acquisition
of the Original Properties to the extent cash was paid to
purchase 100% of the limited-partnership interests in the Sovran
Partnerships, prepay outstanding mortgages at the time of
acquisition and for related transaction costs. Additionally, the
Company acquired on that date twelve self-storage properties from
unaffiliated third parties. The Company has since purchased a
total of ninety-nine (eighteen in 1998, forty-four in 1997,
twenty-nine in 1996 and eight in 1995) self storage properties
from unaffiliated third parties, increasing the total number of
self-storage properties owned at March 31, 1998 to 173
properties, most of which are in the eastern United States and
Texas.
All of the Company's assets are owned by, and all its
operations are conducted through, Sovran Acquisition Limited
Partnership (the Partnership). Sovran Holdings, Inc., a wholly-
owned subsidiary of the Company (the Subsidiary), is the sole
general partner; and the Company is a limited partner of the
Partnership, and thereby controls the operations of the Operating
Partnership holding a 96.5% ownership interest therein as of
March 31, 1998. The remaining ownership interests in the
Operating Partnership (the "Units") are held by certain former
owners of assets acquired by the Operating Partnership subsequent
to the Offerings. The consolidated financial statements of the
Company include the accounts of the Company, the Partnership, and
the wholly-owned Subsidiary. All intercompany transactions and
balances have been eliminated.
3. Investment in Storage Facilities
The following summarizes activity in storage facilities
during the period ended March 31, 1998.
(Dollars in Thousands)
________________________________________________________________
Cost:
Beginning balance $ 333,036
Property acquisitions 52,450
Improvements and equipment additions 4,953
Dispositions (90)
________________________________________________________________
Ending balance $ 390,349
________________________________________________________________
Accumulated Depreciation:
Beginning balance $ 11,639
Additions during the period 1,934
Dispositions (16)
________________________________________________________________
Ending balance $ 13,557
________________________________________________________________
4. Line of Credit
On February 20, 1998, the Company entered into a new $150
million unsecured credit facility which replaces in its entirety
the Company's $75 million revolving credit facility. The new
facility matures February 2001 and provides for funds at LIBOR
plus 1.25%, a savings of 65 basis points over the Company's old
facility. As a result of the new credit facility, in 1998 the
Company recorded an extraordinary loss on the extinguishment of
debt of $ 350,000 representing the unamortized financing costs of
the former revolving credit facility.
5. Commitments and Contingencies
The Company's current practice is to conduct environmental
investigations in connection with property acquisitions. At this
time, the Company is not aware of any environmental contamination
of any of its facilities which individually or in the aggregate
would be material to the Company's overall business, financial
condition, or results of operations.
As of March 31, 1998, the Company had entered into contracts
for the purchase of 8 self-storage facilities which were
purchased in April 1998 for a total cost of $28.8 million.
6. Pro Forma Financial Information
The following unaudited pro forma Condensed Statement of
Operations is presented as if the purchase of 18 additional
storage facilities had occurred at January 1, 1998. Such
unaudited pro forma information is based upon the historical
combined statements of operations of the Company. It should be
read in conjunction with the financial statements of the Company
and notes thereto included elsewhere herein. In management's
opinion, all adjustments necessary to reflect the effects of
these transactions have been made. This unaudited pro forma
statement does not purport to represent what the actual results
of operations of the Company would have been assuming such
transactions had been completed as set forth above nor does it
purport to represent the results of operations for future
periods.
_________________________________________________________________
(in thousands, except per share data)
Three Months
Ended March 31,
1998
_______________
Revenues:
Rental income $ 15,125
Other income 228
_______________
Total revenues 15,353
Expenses:
Property operations & maintenance 3,041
Real estate taxes 1,264
General and administrative 897
Interest 1,650
Depreciation and amortization 2,243
_______________
Total Expenses 9,095
_______________
Income before minority interest and
extraordinary item 6,258
Minority interest (207)
_______________
Income before extraordinary item 6,051
Extraordinary item - extinguishment of debt 350
_______________
Net income $ 5,701
===============
Earnings per share before extraordinary item - basic .49
Extraordinary item (.03)
_______________
Earnings per share - basic $ .46
===============
Earnings per share - diluted $ .46
===============
Common shares used in earnings
per share calculation 12,330,963
_________________________________________________________________
7. Legal Proceedings
A former business associate (Plaintiff) of certain officers
and directors of the Company, including Robert J. Attea, Kenneth
F. Myszka, David L. Rogers and Charles E. Lannon, filed a lawsuit
against the Company on June 13, 1995 in the United States
District Court for the Northern District of Ohio. The Plaintiff
has since amended the complaint in the lawsuit alleging breach of
fiduciary duty, breach of contract, breach of general
partnership/joint venture arrangement, breach of duty of good
faith, fraud and deceit, and other causes of action including
declaratory judgement as to the Plaintiff's continuing interest
in the Company. The Plaintiff is seeking money damages in excess
of $25 million, as well as punitive damages and declaratory and
injunctive relief (including the imposition of a constructive
trust on assets of the Company in which the Plaintiff claims to
have a continuing interest) and an accounting. The amended
complaint also added Messrs. Attea, Myszka, Rogers and Lannon as
additional defendants. The parties are currently involved in
discovery. The Company intends to vigorously defend the lawsuit.
Messrs. Attea, Myszka, Rogers and Lannon have agreed to indemnify
the Company for cost and any loss arising from the lawsuit. The
Company believes that the actual amount of the Plaintiff's
recovery in this matter if any, would be within the ability of
these individuals to provide indemnification. The Company does
not believe that the lawsuit will have a material, adverse effect
upon the Company.
8. Recent Accounting Pronouncements
On March 19, 1998 the Financial Accounting Standards Board
Emerging Issues Task Force reached a consensus as to the
accounting for internal acquisition costs incurred in connection
with real property. The Task Force consensus indicates that
internal costs related to the acquisition of operating properties
should be expensed as incurred. The Company has previously
capitalized such costs and will comply with the consensus
prospectively. The effect of expensing internal acquisition
costs for the period March 19 through March 31, 1998, was
immaterial.
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operation
The following discussion and analysis of the consolidated
financial condition and results of operations should be read in
conjunction with the financial statements and notes thereto
included elsewhere in this report.
The Company operates as a Real Estate Investment Trust
("REIT") and owns and operates a portfolio of 173 self-storage
facilities, providing storage space for business and personal use
to customers in 19 states. The Company's investment objective is
to increase cash flow and enhance shareholder value by
aggressively managing its portfolio, to expand and enhance the
facilities in that portfolio and to selectively acquire new
properties in geographic areas that will either complement or
efficiently grow the portfolio.
When used in this discussion and elsewhere in this document,
the words "intends," "believes," "anticipates," and similar
expressions are intended to identify "forward-looking statements"
within the meaning of that term in Section 27A of the Securities
Exchange Act of 1933, as amended, and in Section 21F of
Securities Exchange Act of 1934, as amended. Such forward-looking
statements involve known and unknown risks, uncertainties and
other factors, which may cause the actual results, performance or
achievements of the Company to be materially different from those
expressed or implied by such forward-looking statements. Such
factors include the effect of competition from new self-storage
facilities, which would cause rents and occupancy rates to
decline; the Company's ability to evaluate, finance and integrate
acquired businesses into the Company's existing business and
operations; the Company's ability to effectively compete in the
industries in which it does business; and tax law changes which
may change the taxability of future income.
Liquidity and Capital Resources
Revolving Credit Facility
On February 20, 1998, the Company entered into a new $150
million unsecured credit facility which replaces in its entirety
the Company's $75 million revolving credit facility. The new
facility matures February 2001 and provides for funds at LIBOR
plus 1.25%, a savings of 65 basis points over the Company's old
facility. The Company intends to use funds available from this
credit facility to finance future acquisition and development
plans described below. At March 31, 1998, the Company had
remaining borrowing capacity of $62 million on the line.
Umbrella Partnership REIT
The Company was formed as an Umbrella Partnership Real
Estate Trust ("UPREIT") and, as such, has the ability to issue
operating partnership ("OP") units in exchange for properties
sold by independent owners. By utilizing such OP units as
currency in facility acquisitions, the Company may partially
defer the seller's income-tax liability and obtain more favorable
pricing or terms. As of March 31, 1998, 443,609 units have been
issued in exchange for property at the request of the sellers.
Acquisition of Properties
The Company's external growth strategy is to increase the
number of facilities it owns by acquiring suitable facilities in
markets in which it already has an operating presence or to
expand into new markets by acquiring several facilities at once
in those new markets. In the three months ended March 31, 1998,
the Company acquired three properties in a new market, central
Tennessee. The Company also increased its existing presence in
Alabama, Florida, Georgia, New York, Virginia, Massachusetts,
North Carolina and Rhode Island. A total of eighteen
acquisitions in the three months ended March 31, 1998 added
1,116,000 square feet of space and 10,000 rental units to the
Company's portfolio.
Future Acquisition and Development Plans
In April, the Company continued its external growth strategy
by increasing the number of facilities it owns in North Carolina,
New Hampshire, Ohio, Michigan, and Tennessee, and has contracts
on properties in Florida, Texas, Missouri with planned closings
in the second quarter.
The Company also intends to improve certain of its existing
facilities by building additional storage buildings on presently
vacant land and by installing climate control and enhanced
security systems at selected sites.
Liquidity
At March 31, 1998, the Company's debt to equity ratio was
34%.
As most of the Company's operating cash flow is expected to
be used to pay dividends, (see REIT Qualification and
Distribution Requirements), the funds required to acquire
additional properties will be provided by borrowings pursuant to
the revolving line of credit and the issuance of UPREIT units.
In addition, the Company believes it has achieved a level of
market capitalization and critical mass to enable it to access
the senior debt markets to fund a portion of 1998 growth. The
Company has filed a registration statement and expects to access
the capital markets in June 1998.
REIT Qualification and Distribution Requirements
As a REIT, the Company is not required to pay federal income
tax on income that it distributes to its shareholders, provided
that the amount distributed is equal to at least 95% of taxable
income. These distributions must be made in the year to which
they relate or in the following year if declared before the
Company files its federal income-tax return and if it is paid
before the first regular dividend of the following year.
As a REIT, the Company must derive at least 95% of its total
gross income from income related to real property, interest and
dividends. In the three months ended March 31, 1998, the
Company's percentage of revenue from such sources exceeded 98%,
thereby passing the 95% test, and no special measures are
expected to be required to enable the Company to maintain its
REIT designation.
Results of Operations
The following discussion is based on the financial
statements of the Company as of March 31, 1998 and March 31,
1997.
For the period January 1, 1998 through March 31, 1998 (Dollars in
Thousands)
The Company reported revenues of $14,375 during the period
and incurred $4,006 in operating expenses, resulting in net
operating income of $10,369. The gross operating margin of 72%
is one of the highest in the industry and reflects a corporate-
wide effort to operate the business efficiently. General and
administrative expenses of $854, interest expense of $1,215 and
depreciation and amortization expenses of 2,097 resulted in
income of $6,203 before minority interest and extraordinary item.
An extraordinary loss of $350 resulted from the write-off of the
unamortized financing costs of the revolving credit facility that
was replaced in February 1998. Net income amounted to $5,648.
Three months ended March 31, 1998, compared to Three months ended
March 31, 1997 (Dollars in Thousands)
The following discussion compares the activities of the
Company for the three months ended March 31, 1998 with the
activities of the Company for the three months ended March 31,
1997.
Total revenues increased from $10,732 for the three months
ended March 31, 1997 to $14,375 for the three months ended
March 31, 1998, an increase of $3,643 or 34%. Of this, $3,397
resulted from the acquisition of 62 properties during the period
January 1, 1997 through March 31, 1998 and $282 was realized as a
result of increased rental rates at the 111 properties owned by
the Company at December 31, 1996. Interest income decreased by
$36. Overall, same-store revenues grew 3.7% for the three month
period ended March 31, 1998 as compared to the same period in
1997.
Property operating and real estate tax expense increased
$995 or 33% during the period. $939 was a result of absorbing
additional expenses from operating the newly acquired properties,
and $56 related to the operations of its sites operated more than
one year.
General and administrative expenses, which includes losses
of $51 realized as the result of replacement of equipment,
increased $110 principally as a result of the need for additional
personnel and increased administrative costs associated with
managing the 62 additional properties.
Interest expense increased $703 due to the $52,000 drawn on
the Company's line of credit during the first three months of
1998.
Income before minority interest and extraordinary item
increased from $4,935 to $6,203, an increase of $1,268 or 26%.
Funds from Operations
The Company believes that Funds From Operations ("FFO") is
helpful to investors as a measure of the performance of an equity
REIT because, when considered in conjunction with cash flows from
operating activities, financing activities, and investing
activities, it provides investors with an understanding of the
ability of the Company to incur and service debt and to make
capital expenditures. FFO is defined as net income, computed in
accordance with GAAP, plus depreciation of real estate assets and
amortization of intangible assets exclusive of deferred financing
fees, and excluding gains (losses) from debt restructurings and
sales of property. FFO should not be considered a substitute
for net income or cash flows, nor should it be considered an
alternative to operating performance or liquidity. The following
table sets forth the calculation of FFO:
Three months Three months
ended March 31, ended March 31,
1998 1997
_______________ _______________
(In Thousands)
Net income $ 5,648 $ 4,871
Actual minority interest 205 64
Depreciation of real estate
and amortization of
intangible assets exclusive
of deferred financing fees 2,039 1,429
Extraordinary loss -
extinguishment of debt 350 -
Minority interest share of FFO (287) (82)
_______________ _______________
FFO available to common
shareholders $ 7,955 $ 6,282
=============== ===============
Inflation
The Company does not believe that inflation has had or will
have a direct adverse effect on its operations. Substantially
all of the leases at the facilities allow for monthly rent
increases, which provide the Company with the opportunity to
achieve increases in rental income as each lease matures.
Seasonality
The Company's revenues typically have been higher in the
third and fourth quarters, primarily because the Company
increases its rental rates on most of its storage units at the
beginning of May and, to a lesser extent, because self-storage
facilities tend to experience greater occupancy during the late
spring, summer and early fall months due to the greater incidence
of residential moves during these periods. However, the Company
believes that its tenant mix, diverse geographical locations,
rental structure and expense structure provide adequate
protection against undue fluctuations in cash flows and net
revenues during off-peak seasons. Thus, the Company does not
expect seasonality to affect materially distributions to
shareholders.
Part II. Other Information
Item 1. Legal Proceedings
The Company is a party to proceedings arising in the
ordinary course of operation of self-storage facilities.
However, the Company does not believe that these matters,
individually or in the aggregate, will have a material adverse
effect on the Company.
A former business associate (Plaintiff) of certain officers
and directors of the Company, including Robert J. Attea,
Kenneth F. Myszka, David L. Rogers and Charles E. Lannon, filed a
lawsuit against the Company on June 13, 1995 in the United States
District Court for the Northern District of Ohio. The Plaintiff
has since amended the complaint in the lawsuit alleging breach of
fiduciary duty, breach of contract, breach of general
partnership/joint venture arrangement, breach of duty of good
faith, fraud and deceit, and other causes of action including
declaratory judgement as to the Plaintiff's continuing interest
in the Company. The Plaintiff is seeking money damages in excess
of $25 million, as well as punitive damages and declaratory and
injunctive relief (including the imposition of a constructive
trust on assets of the Company in which the Plaintiff claims to
have a continuing interest) and an accounting. The amended
complaint also added Messrs. Attea, Myszka, Rogers and Lannon as
additional defendants. The parties are currently involved in
discovery. The Company intends to vigorously defend the lawsuit.
Messrs. Attea, Myszka, Rogers and Lannon have agreed to indemnify
the Company for cost and any loss arising from the lawsuit. The
Company believes that the actual amount of the Plaintiff's
recovery in this matter if any, would be within the ability of
these individuals to provide indemnification. The Company does
not believe that the lawsuit will have a material, adverse effect
upon the Company.
Item 6. Exhibits and Reports on Form 8-K
(a.) Exhibits
1. 10.1 Revolving Credit Agreement between the Company, the
Operating Partnership, Fleet National Bank and other lenders
named therein.
2. 27 Financial data schedule.
(b.) Reports on Form 8-K
Acquisition of 24 facilities
Financial Statements:
Report of Independent Auditors
Acquisition Facilities Historical Summaries
Of Combined Gross Revenue and Direct Operating Expenses
For the year ended December 31, 1997
Acquisition Facilities Notes to Historical
Summaries of Combined Gross Revenue and Direct Operating
Expenses for the year ended December 31, 1997
Pro Forma Financial Information:
Sovran Self Storage, Inc., Pro Forma Combined Financial
Information
Sovran Self Storage, Inc., Pro Forma Combined Balance Sheet
as of December 31, 1997
Sovran Self Storage, Inc., Pro Forma Combined Statement of
Operations For the Year Ended December 31, 1997
Sovran Self Storage, Inc., Notes to Pro Forma Combined
Financial Statements
Exhibits:
Consent of Independent Auditors, Ernst & Young, LLP
Date of Filing:
February 20, 1998, amended April 17, 1998
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act
of 1934, the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.
Sovran Self Storage, Inc.
May 13, 1998 By:/s/David L. Rogers
Date David L. Rogers, Chief
Financial Officer and
Secretary
Exhibit 10.1
REVOLVING CREDIT AGREEMENT
among
SOVRAN SELF STORAGE, INC. AND
SOVRAN ACQUISITION LIMITED PARTNERSHIP
and
FLEET NATIONAL BANK
and
OTHER LENDERS WHICH MAY BECOME
PARTIES TO THIS AGREEMENT
and
FLEET NATIONAL BANK,
AS ADMINISTRATIVE AGENT
with
FLEET NATIONAL BANK,
AS LOAN ARRANGER
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT
CREDITANSTALT CORPORATE FINANCE, INC.,
AS DOCUMENTATION AGENT
Dated as of February 20, 1998
TABLE OF CONTENTS
Section Page
1. DEFINITIONS AND RULES OF INTERPRETATION
1.1. Definitions
1.2. Rules of Interpretation
2. THE REVOLVING CREDIT FACILITY
2.1. Commitment to Lend
2.2. [Intentionally Omitted]
2.3. The Revolving Credit Notes
2.4. Interest on Revolving Credit Loans; Fees
2.5. Requests for Revolving Credit Loans
2.6. Conversion Options
2.7. Funds for Revolving Credit Loans
2.8. Repayment of the Revolving Credit Loans at
Maturity
2.9. Optional Repayments of Revolving Credit
Loans
2.10. Mandatory Repayments of Revolving
Credit Loans
3. INTENTIONALLY OMITTED
4. CERTAIN GENERAL PROVISIONS
4.1. Funds for Payments
4.2. Computations
4.3. Inability to Determine LIBOR Rate
4.4. Illegality
4.5. Additional Costs, Etc.
4.6. Capital Adequacy
4.7. Certificate
4.8. Indemnity
4.9. Interest on Overdue Amounts
4.10. Concerning Joint and Several Liability of the
Borrowers
4.11. Interest Limitation
4.12. Reasonable Efforts to Mitigate
4.13. Replacement of Lenders
5. GUARANTIES
6. REPRESENTATIONS AND WARRANTIES
6.1. Authority; Etc
6.2. Governmental Approvals
6.3. Title to Properties; Leases
6.4. Financial Statements
6.5. Fiscal Year
6.6. Franchises, Patents, Copyrights, Etc.
6.7. Litigation
6.8. No Materially Adverse Contracts, Etc.
6.9. Compliance With Other Instruments, Laws, Etc.
6.10. Tax Status
6.11. No Event of Default
6.12. Investment Company Acts
6.13. Absence of UCC Financing Statements, Etc.
6.14. Absence of Liens
6.15. Certain Transactions
6.16. Employee Benefit Plans
6.17. Regulations U and X
6.18. Environmental Compliance
6.19. Subsidiaries
6.20. Loan Documents
6.21. REIT Status
6.22. Subsequent Guarantors
6.23. Trading Status
6.24. Title Policies
7. AFFIRMATIVE COVENANTS OF THE BORROWERS AND THE
GUARANTORS
7.1. Punctual Payment
7.2. Maintenance of Office
7.3. Records and Accounts
7.4. Financial Statements, Certificates and
Information
7.5. Notices
7.6. Existence of SALP, Holdings and Subsidiary
Guarantors; Maintenance of Properties
7.7. Existence of Sovran; Maintenance of REIT Status
of Sovran; Maintenance of Properties
7.8. Insurance
7.9. Taxes
7.10. Inspection of Properties and Book
7.11. Compliance with Laws, Contracts, Licenses,
and Permit
7.12. Use of Proceeds
7.13. Acquisition of Unencumbered Properties
7.14. Additional Guarantors; Solvency of Guarantors
7.15. Further Assurances
7.16. Form of Lease
7.17. Environmental Indemnification
7.18. Response Actions
7.19. Environmental Assessments
7.20. Employee Benefit Plans
7.21. No Amendments to Certain Documents
7.22. Exclusive Credit Facility
7.23. Management
8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS
AND THE GUARANTORS
8.1. Restrictions on Indebtedness
8.2. Restrictions on Liens, Etc
8.3. Restrictions on Investments
8.4. Merger, Consolidation and Disposition of Assets
8.5. Sale and Leaseback
8.6. Compliance with Environmental Laws
8.7. Distributions
8.8. Employee Benefit Plans
8.9. Fiscal Year
8.10. Amsdell Litigation
8.11. Negative Pledge
9. FINANCIAL COVENANTS OF THE BORROWERS
9.1. Leverage Ratio
9.2. Secured Indebtedness
9.3. Tangible Net Worth
9.4. Debt Service Coverage
9.5. Unimproved Land
9.6. Construction-in-Process
9.7. Mortgage Notes
9.8. Unimproved Land, Construction-in-Process
and Notes
9.9. Joint Venture Ownership Interest
9.10. Unhedged Variable Rate Debt
9.11. Unsecured Indebtedness
9.12. Unencumbered Property Debt Service Coverage
9.13. Covenant Calculations
10. CONDITIONS TO THE CLOSING DATE
10.1. Loan Documents
10.2. Certified Copies of Organization Documents
10.3. By-laws; Resolutions
10.4. Incumbency Certificate; Authorized Signers
10.5. Title Policies
10.6. Certificates of Insurance
10.7. Environmental Site Assessments
10.8. Opinion of Counsel Concerning Organization
and Loan Documents
10.9. Tax and Securities Law Compliance
10.10. Guaranties
10.11. Certifications from Government Officials;
UCC-11 Reports
10.12. Proceedings and Documents
10.13. Fees
10.14. Closing Certificate; Compliance Certificate
10.15. Existing Indebtedness
10.16. Subsequent Guarantors
11. CONDITIONS TO ALL BORROWINGS
11.1 Representations True; No Event of Default;
Compliance Certificate
11.2 No Legal Impediment
11.3 Governmental Regulation
12. EVENTS OF DEFAULT; ACCELERATION; ETC.
12.1. Events of Default and Acceleration
12.2. Termination of Commitments
12.3. Remedies
13. SETOFF
14. THE AGENT
14.1. Authorization
14.2. Employees and Agents
14.3. No Liability
14.4. No Representations
14.5. Payments
14.6. Holders of Revolving Credit Notes
14.7. Indemnity
14.8. Agent as Lender
14.9. Notification of Defaults and Events of Default
14.10. Duties in the Case of Enforcement
14.11. Successor Agent
14.12. Notices
15. EXPENSES
16. INDEMNIFICATION
17. SURVIVAL OF COVENANTS, ETC.
18. ASSIGNMENT; PARTICIPATIONS; ETC.
18.1. Conditions to Assignments by Lenders
18.2. Certain Representations and Warranties;
Limitations; Covenants
18.3. Register
18.4. New Revolving Credit Notes
18.5. Participations
18.6. Pledge by Lender
18.7. No Assignment by Borrowers
18.8 Disclosure
18.9. Syndication
19. NOTICES, ETC.
20. GOVERNING LAW; CONSENT TO JURISDICTION
AND SERVICE
21. HEADINGS
22. COUNTERPARTS
23. ENTIRE AGREEMENT, ETC.
24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE CLAIMS
25. CONSENTS, AMENDMENTS, WAIVERS, ETC.
26. SEVERABILITY
EXHIBITS
A Form of Revolving Credit Note
B Form of Subsidiary Guaranty
C Form of Revolving Credit Loan Request
D Form of Compliance Certificate
E [Intentionally Omitted]
F Form of Assignment and Assumption Agreement
G Form of Conversion Notice
Schedules to Revolving Credit Agreement
SCHEDULE 1.2 Lenders' Commitments
SCHEDULE 6.1(b) Capitalization; Outstanding Securities, Etc.
SCHEDULE 6.3 Partially Owned Real Estate Holding Entities
SCHEDULE 6.7 Litigation
SCHEDULE 6.15 Certain Transactions
SCHEDULE 6.18 Environmental Matters
SCHEDULE 6.19 Subsidiaries
SCHEDULE 6.24 Changes to Title Policies
SCHEDULE 7.16 Form of Lease
SCHEDULE 8.3(d) Existing Investments
REVOLVING CREDIT AGREEMENT
This REVOLVING CREDIT AGREEMENT is made as of the 20th day
of February, 1998, by and among SOVRAN SELF STORAGE, INC., a
Maryland corporation ("Sovran") and SOVRAN ACQUISITION LIMITED
PARTNERSHIP, a Delaware limited partnership ("SALP", and together
with Sovran, collectively referred to herein as the "Borrowers"
and individually as a "Borrower"), each with a principal place of
business at 5166 Main Street, Williamsville, New York 14221,
FLEET NATIONAL BANK ("Fleet"), a national banking association
having its principal place of business at 111 Westminster Street,
Providence, Rhode Island 02903, and the other lending
institutions listed on Schedule 1.2 hereto or which may become
parties hereto pursuant to Section 18 (individually, a "Lender"
and collectively, the "Lenders") and FLEET NATIONAL BANK, as
agent for itself and each other Lender.
RECITALS
A. The Borrowers are primarily engaged in the business of
owning, purchasing, developing, constructing, renovating and
operating self storage facilities in the United States primarily
known as "Uncle BoB's Self Storage".
B. Sovran is a limited partner of SALP, holds in excess of
96% of the partnership interests in SALP, conducts all or
substantially all of its business through SALP, and is qualified
to elect REIT status for income tax purposes. Sovran Holdings
Inc., a Delaware corporation ("Holdings"), is a wholly-owned
Subsidiary of Sovran and the sole general partner of SALP and has
agreed to guaranty the obligations of the Borrowers hereunder.
NOW, THEREFORE, in consideration of the mutual covenants and
agreements herein contained, the parties hereto agree as follows:
Section 1. DEFINITIONS AND RULES OF INTERPRETATION.
Section 1.1. Definitions. The following terms shall have
the meanings set forth in this Section 1 or elsewhere in the
provisions of this Agreement referred to below:
Accountants. In each case, nationally-recognized,
independent certified public accountants reasonably acceptable to
the Agent. The Agent hereby acknowledges that the Accountants
may include Ernst & Young, LLP.
Adjusted Unencumbered Property NOI. With respect to any
fiscal period for any Unencumbered Property, the net income of
such Unencumbered Property during such period, as determined in
accordance with GAAP, before deduction of (a) gains (or losses)
from debt restructurings or other extraordinary items relating to
such Unencumbered Property, and (b) income taxes; plus (x)
interest expense relating to such Unencumbered Property and (y)
depreciation and amortization relating to such Unencumbered
Property; minus a recurring capital expense reserve equal to ten
cents ($0.10) per net rentable square foot multiplied by the
total net rentable square feet of such Unencumbered Property.
Administration Fee. See Section 2.4(f).
Affiliate. With reference to any Person, (i) any director
or executive officer of that Person, (ii) any other Person
controlling, controlled by or under direct or indirect common
control of that Person, (iii) any other Person directly or
indirectly holding 10% or more of any class of the capital stock
or other equity interests (including options, warrants,
convertible securities and similar rights) of that Person and
(iv) any other Person 10% or more of any class of whose capital
stock or other equity interests (including options, warrants,
convertible securities and similar rights) is held directly or
indirectly by that Person.
Agent. Fleet National Bank acting as agent for the Lenders,
or any successor agent, as permitted by Section 14.
Agent's Head Office. The Agent's head office located at 111
Westminster Street, Providence, Rhode Island 02903, or at such
other location as the Agent may designate from time to time
pursuant to Section 19 hereof, or the office of any successor
Agent permitted under Section 14 hereof.
Agreement. This Revolving Credit Agreement, including the
Schedules and Exhibits hereto, as the same may be from time to
time amended and in effect.
Applicable Margin. The applicable margin (if any) over the
then Prime Rate or LIBOR Rate, as applicable to the Revolving
Credit Loan(s) in question, as set forth below, which is used in
calculating the interest rate applicable to Revolving Credit
Loans and which shall vary from time to time in accordance with
SALP's long-term unsecured, non-credit enhanced debt ratings, if
any. The Applicable Margin to be used in calculating the
interest rate applicable to Prime Rate Loans or LIBOR Rate Loans
shall vary from time to time in accordance with SALP's then
applicable (if any) (x) Moody's debt rating, (y) S&P's debt
rating and (z) any Third Debt Rating, as set forth below in this
definition, and the Applicable Margin shall be adjusted effective
on the next Business Day following any change in SALP's Moody's
debt rating or S&P's debt rating or Third Debt Rating, as the
case may be. SALP shall notify the Agent in writing promptly
after becoming aware of any change in any of its debt ratings.
In order to qualify for an Applicable Margin based upon a debt
rating, SALP shall obtain and maintain debt ratings from at least
two (2) nationally recognized rating agencies reasonably
acceptable to the Agent, one of which must be Moody's or S&P so
long as such Persons are in the business of providing debt
ratings for the REIT industry; provided that until such time as
SALP obtains two debt ratings or if SALP fails to maintain at
least two debt ratings, the Applicable Margin shall be based upon
an S&P rating of less than BBB- in the table below. In addition,
SALP may, at its option, obtain and maintain three debt ratings
(of which one must be from Moody's or S&P except as set forth in
the previous sentence). If at any time of determination of the
Applicable Margin, (a) SALP has then current debt ratings from
two (2) rating agencies, then the Applicable Margin shall be
based on the lower of such ratings, or (b) SALP has then current
debt ratings from three (3) rating agencies, then the Applicable
Margin shall be based on the lower of the two highest ratings (of
which one must be from Moody's or S&P so long as such Persons are
in the business of providing debt ratings for the REIT industry).
The applicable debt ratings and the Applicable Margins are set
forth in the following table:
Applicable Applicable
Margin Margin
for LIBOR Rate for Prime Rate
S&P Rating Moody's Rating Third Rating Loans Loans
___________________________________________________________________________
No rating No rating or No rating or
or less than less than less than BBB-/
BBB- Baa3 Baa3 equivalent 1.375% 0%
BBB- Baa3 BBB-/Baa3
equivalent 1.25 % 0%
BBB Baa2 BBB/Baa2
equivalent 1.125% 0%
BBB+ Baa1 BBB+/Baa1
equivalent 1.00% 0%
A- or higher A3 or higher A-/A3 equiva-
lent or higher 0.90% 0%
Assignment and Assumption. See Section 18.1.
Borrower Representative. Sovran, acting on behalf of all of
the Borrowers. The Agent and the Lenders shall be entitled to
rely, and all of the Borrowers hereby agree that the Agent and
the Lenders may so rely, on any notice given or received or
action taken or not taken by Sovran as being authorized by each
of the Borrowers.
Borrowers. As defined in the preamble hereto.
Budgeted Project Costs. With respect to Construction-In-
Process, the total budgeted project cost of such Construction-In-
Process shown on schedules submitted to the Agent from time to
time; provided that for Construction-In-Process owned by any
Partially-Owned Entity, the Budgeted Project Cost of such
Construction-In-Process shall be the applicable Borrower's
pro-rata share of the total budgeted project cost of such
Construction-In-Process (based on the greater of (x) such
Borrower's percentage equity interest in such Partially-Owned
Entity or (y) the Borrower's obligation to provide or liability
for providing funds to such Partially-Owned Entity).
Building. Individually and collectively, the buildings,
structures and improvements now or hereafter located on the Real
Estate and intended for income production.
Business Day. Any day on which banking institutions in
Boston, Massachusetts are open for the transaction of banking
business and, in the case of LIBOR Rate Loans, also a day which
is a LIBOR Business Day.
Capitalized Leases. Leases under which any Borrower or any
of its Subsidiaries or any Partially-Owned Entity is the lessee
or obligor, the discounted future rental payment obligations
under which are required to be capitalized on the balance sheet
of the lessee or obligor in accordance with GAAP.
Capitalized Unencumbered Property Value. As of any date of
determination with respect to an Unencumbered Property, an amount
equal to Adjusted Unencumbered Property NOI for such Unencumbered
Property for the most recent two (2) complete fiscal quarters
multiplied by two (2), with the product being divided by ten and
one-half percent (10.5%). The calculation of Capitalized
Unencumbered Property Value shall be adjusted as set forth in
Section 9.13 hereof.
CERCLA. See Section 6.18.
Closing Date. February 20, 1998, which is the date on which
all of the conditions set forth in Section 10 have been
satisfied.
Closing Fee. See Section 2.4(d).
Code. The Internal Revenue Code of 1986, as amended and in
effect from time to time.
Completed Revolving Credit Loan Request. A loan request
accompanied by all information required to be supplied under the
applicable provisions of Section 2.5.
Commitment. With respect to each Lender, the amount set
forth from time to time on Schedule 1.2 hereto as the amount of
such Lender's Commitment to make Revolving Credit Loans to the
Borrowers.
Commitment Fee. See Section 2.4(e).
Commitment Percentage. With respect to each Lender, the
percentage set forth on Schedule 1.2 hereto as such Lender's
percentage of the Total Commitment and any changes thereto from
time to time.
Consolidated or consolidated. With reference to any term
defined herein, shall mean that term as applied to the accounts
of Sovran and its subsidiaries (including the Guarantors) or SALP
and its subsidiaries, as the case may be, consolidated in
accordance with GAAP.
Consolidated Adjusted EBITDA. For any period, an amount
equal to the consolidated net income of the Borrowers and their
respective Subsidiaries for such period, as determined in
accordance with GAAP, before deduction of (a) gains (or losses)
from the sale of real property or interests therein, debt
restructurings and other extraordinary items, (b) minority
interest attributable to a Borrower or a Guarantor and (c) income
taxes; plus (x) interest expense and (y) depreciation and
amortization, minus a recurring capital expense reserve in an
amount equal to ten cents ($0.10) per net rentable square foot
multiplied by the total net rentable square feet of all Real
Estate; all after adjustments for unconsolidated partnerships,
joint ventures and other entities. The calculation of
Consolidated Adjusted EBITDA shall be adjusted as set forth in
Section 9.13 hereof.
Consolidated Assumed Amortizing Debt Service Charges. As of
any date of determination, an amount equal to the assumed
interest and principal payments for an imputed six month period
on all Indebtedness of the Borrowers and their respective
Subsidiaries for borrowed money or in respect of reimbursement
obligations for letters of credit, guaranty obligations or
Capitalized Leases, whether direct or contingent, which is
outstanding on such date based upon a two hundred and forty (240)
month mortgage style amortization schedule and an annual interest
rate equal to the sum of two percent (2%) plus the imputed ten
(10) year United States Treasury bill yield as of such date based
upon published quotes for Treasury bills having ten (10) years to
maturity. For example, if the imputed ten (10) year United
States Treasury bill yield as of such date were 6% and the total
amount of Indebtedness of the Borrowers and their respective
Subsidiaries on such date were $100,000, Consolidated Assumed
Amortizing Debt Service Charges would be equal to $5,019.
Consolidated Assumed Amortizing Unsecured Debt Service
Charges. As of any date of determination, an amount equal to the
assumed interest and principal payments for an imputed six month
period on all Unsecured Indebtedness of the Borrowers and their
respective Subsidiaries for borrowed money or in respect of
reimbursement obligations for letters of credit, guaranty
obligations or Capitalized Leases, whether direct or contingent,
which is outstanding on such date based upon a two hundred and
forty (240) month mortgage style amortization schedule and an
annual interest rate equal to the sum of two percent (2%) plus
the imputed ten (10) year United States Treasury bill yield as of
such date based upon published quotes for Treasury bills having
ten (10) years to maturity. For example, if the imputed ten (10)
year United States Treasury bill yield as of such date were 6%
and the total amount of Unsecured Indebtedness of the Borrowers
and their respective Subsidiaries on such date were $100,000,
Consolidated Assumed Amortizing Unsecured Debt Service Charges
would be equal to $5,019.
Consolidated Capitalized Value. As of any date of
determination, an amount equal to Consolidated Adjusted EBITDA
for the most recent two (2) completed fiscal quarters multiplied
by two (2), with the product being divided by ten and one-half
percent (10.5%). The calculation of Consolidated Capitalized
Value shall be adjusted as set forth in Section 9.13 hereof.
Consolidated Secured Indebtedness. As of any date of
determination, the aggregate principal amount of all Indebtedness
of the Borrowers and their respective Subsidiaries for borrowed
money or in respect of reimbursement obligations for letters of
credit, guaranty obligations or Capitalized Leases, whether
direct or contingent, which is outstanding at such date and which
is secured by a Lien on properties or other assets of such
Persons, without regard to Recourse.
Consolidated Tangible Net Worth. As of any date of
determination, the Consolidated Capitalized Value minus
Consolidated Total Liabilities.
Consolidated Total Liabilities. As of any date of
determination, all liabilities of the Borrowers and their
respective Subsidiaries determined on a consolidated basis in
accordance with GAAP and classified as such on the consolidated
balance sheet of the Borrowers and their respective Subsidiaries,
and all Indebtedness of the Borrowers and their respective
Subsidiaries, whether or not so classified. The calculation of
Consolidated Total Liabilities shall be adjusted as set forth in
Section 9.13 hereof.
Consolidated Unsecured Indebtedness. As of any date of
determination, the aggregate principal amount of all Unsecured
Indebtedness of the Borrowers and their respective Subsidiaries
for borrowed money or in respect of reimbursement obligations for
letters of credit, guaranty obligations or Capitalized Leases,
whether direct or contingent, which is outstanding at such date,
including without limitation the aggregate principal amount of
all the Obligations under this Agreement as of such date,
determined on a consolidated basis in accordance with GAAP,
without regard to Recourse.
Construction-In-Process. Any Real Estate for which any
Borrower, any Guarantor, any of the Borrowers' Subsidiaries or
any Partially-Owned Entity is actively pursuing construction,
renovation, or expansion of Buildings, all pursuant to such
Person's ordinary course of business.
Conversion Request. A notice given by the Borrower
Representative to the Agent of its election to convert or
continue a Revolving Credit Loan in accordance with Section 2.6.
Daily Unused Commitment. The daily difference between (a)
$150,000,000 and (b) the principal amount of Revolving Credit
Loans outstanding for each such day hereunder.
default. When used with reference to this Agreement or any
other Loan Document, any of the events or conditions specified in
Section 12.1, whether or not any requirement for the giving of
notice, the lapse of time or both, has been satisfied.
Default. As of the relevant time of determination, an event
or occurrence which:
(i) requires notice and time to cure to become an Event of
Default and as to which notice has been given to the
Borrowers by the Agent; or
(ii) has occurred and will become an Event of Default
(without notice) if such event remains uncured after
any grace period specified in Section 12.1 or, in the
case of matters referred to in Section 12.1(k), in the
other applicable Loan Document(s).
Disqualifying Building Event. Any structural or repair and
maintenance matter (other than a Release) as to any Building or
any Real Estate that in the Agent's reasonable opinion will
require the expenditure of $250,000 or more to remedy or complete
such matter and the remediation or completion of which is
required by prudent real estate ownership or operation.
Disqualifying Environmental Event. Any Release or
threatened Release of Hazardous Substances, any violation of
Environmental Laws or any other similar environmental event with
respect to a Real Estate that causes (y) the occupancy or rent of
such Real Estate to be adversely affected, as compared to what
otherwise would have been the occupancy or rent of such Real
Estate in the absence of such environmental event or (z) such
Real Estate to no longer be financeable on a secured, long-term
debt basis under the then generally accepted underwriting
standards of national institutional lenders.
Disqualifying Legal Event. Any violation or non-compliance
with any applicable law, statute, rule or regulation (other than
an Environmental Law) with respect to any Real Estate, which
requires cure or compliance for prudent real estate ownership or
operation.
Distribution. With respect to:
(i) SALP, any distribution of cash or other cash
equivalent, directly or indirectly, to the partners or
other equity interest holders of SALP; or any other
distribution on or in respect of any partnership
interests of SALP; and
(ii) Sovran, the declaration or payment of any dividend on
or in respect of any shares of any class of capital
stock of Sovran, other than dividends payable solely in
shares of common stock by Sovran; the purchase,
redemption, or other retirement of any shares of any
class of capital stock of Sovran, directly or
indirectly through a Subsidiary of Sovran or otherwise;
the return of capital by Sovran to its shareholders as
such; or any other distribution on or in respect of any
shares of any class of capital stock of Sovran.
Dollars or $. Dollars in lawful currency of the United
States of America.
Drawdown Date. The date on which any Revolving Credit Loan
is made or is to be made, and the date on which any Revolving
Credit Loan is converted or continued in accordance with
Section 2.6.
Duff & Phelps. Duff & Phelps, and its successors.
Eligible Assignee. Any of (a) a commercial bank organized
under the laws of the United States, or any State thereof or the
District of Columbia, and having total assets in excess of
$1,000,000,000; (b) a commercial bank organized under the laws of
any other country (including the central bank of such country)
which is a member of the Organization for Economic Cooperation
and Development (the "OECD"), or a political subdivision of any
such country, and having total assets in excess of
$1,000,000,000, provided that such bank is acting with respect to
this Agreement through a branch or agency located in the United
States of America and complies with the requirements set forth in
Section 4.1(c) hereof, and (c) a financial institution acceptable
to the Agent which is regularly engaged in making, purchasing or
investing in loans and having total assets in excess of
$1,000,000,000 and complies with the requirements set forth in
Section 4.1(c) hereof, to the extent applicable.
Employee Benefit Plan. Any employee benefit plan within the
meaning of Section 3(3) of ERISA maintained or contributed to by
any Borrower or any ERISA Affiliate, other than a Multiemployer
Plan.
Environmental Laws. See Section 6.18(a).
ERISA. The Employee Retirement Income Security Act of 1974,
as amended and in effect from time to time.
ERISA Affiliate. Any Person which is treated as a single
employer with any Borrower under Section 414 of the Code.
ERISA Reportable Event. A reportable event with respect to
a Guaranteed Pension Plan within the meaning of Section 4043 of
ERISA and the regulations promulgated thereunder as to which the
requirement of notice has not been waived.
Eurocurrency Reserve Rate. For any day with respect to a
LIBOR Rate Loan, the weighted average of the rates (expressed as
a decimal) at which all of the Lenders subject thereto would be
required to maintain reserves under Regulation D of the Board of
Governors of the Federal Reserve System (or any successor or
similar regulations relating to such reserve requirements)
against "Eurocurrency Liabilities" (as that term is used in
Regulation D), if such liabilities were outstanding. The
Eurocurrency Reserve Rate shall be adjusted automatically on and
as of the effective date of any change in the Eurocurrency
Reserve Rate.
Event of Default. See Section 12.1.
Fitch. Fitch IBCA Inc., and its successors.
Fleet. As defined in the preamble hereto.
Funds from Operations. With respect to any fiscal period of
the Borrowers, an amount, without double-counting, equal to the
consolidated net income of the Borrowers and their respective
Subsidiaries, as determined in accordance with GAAP, before
deduction of real estate related depreciation and amortization,
and excluding gains (or losses) from the sale of real property or
interests therein, debt restructurings or other extraordinary
items, and after adjustments for unconsolidated partnerships,
joint ventures or other entities (such adjustments to be
calculated to reflect Funds from Operations on the same basis, to
the extent that such Funds from Operations attributable to
unconsolidated partnerships, joint ventures and other entities
are not subject to the claims of any other Person).
GAAP. Generally accepted accounting principles,
consistently applied.
Guaranteed Pension Plan. Any employee pension benefit plan
within the meaning of Section 3(2) of ERISA maintained or
contributed to by any Borrower or any Guarantor, as the case may
be, or any ERISA Affiliate of any of them the benefits of which
are guaranteed on termination in full or in part by the PBGC
pursuant to Title IV of ERISA, other than a Multiemployer Plan.
Guaranties. Collectively, the Holdings Guaranty and any
other guaranty of the Obligations made by an Affiliate of a
Borrower in favor of the Agent and the Lenders.
Guarantors. Collectively, Holdings and any other Affiliate
of a Borrower executing a Guaranty, provided, however, when the
context so requires, Guarantor shall refer to Holdings or such
Affiliate, as appropriate. Any Guarantor that is the owner of an
Unencumbered Property shall be a wholly-owned Subsidiary.
Provided further, however, from and after the release of the
Guaranty of any Subsidiary Guarantor pursuant to Section 5 below,
such Subsidiary Guarantor shall no longer be considered a
"Guarantor" for purposes of this Agreement.
Hazardous Substances. See Section 6.18(b).
Holdings. As defined in the preamble hereto.
Holdings Guaranty. The Guaranty dated as of the date hereof
made by Holdings in favor of the Agent and the Lenders pursuant
to which Holdings guarantees to the Agent and the Lenders the
unconditional payment and performance of the Obligations.
Indebtedness. With respect to any Person, all obligations,
contingent and otherwise, that in accordance with GAAP should be
classified upon such Person's balance sheet as liabilities,
including, without limitation, (a) all obligations for borrowed
money and similar monetary obligations, whether direct or
indirect; (b) all liabilities secured by any mortgage, pledge,
negative pledge, security interest, lien, charge, or other
encumbrance existing on property owned or acquired subject
thereto, whether or not the liability secured thereby shall have
been assumed; (c) all obligations (i) under any Capitalized Lease
or (ii) under any lease (a "synthetic lease") which is treated as
an operating lease under GAAP and as a loan or financing for U.S.
income tax purposes or (iii) which are "off balance sheet"
transactions having the same practical effect as to such Person's
financial position as a transaction that would be a liability of
such Person on the balance sheet; (d) all obligations to
purchase, redeem, retire, or otherwise acquire for value any
shares of capital stock of any class issued by such Person or any
rights to acquire such shares; (e) all obligations under any
forward contract, futures contract, swap, option or other
financing arrangement, the value of which is dependent upon
interest rates, currency exchange rates, commodities or other
indices; and (f) all guarantees for borrowed money, endorsements
and other contingent obligations, whether direct or indirect, in
respect of indebtedness or obligations of others, including any
obligation to supply funds (including partnership obligations and
capital requirements) to or in any manner to invest in, directly
or indirectly, the debtor, to purchase indebtedness, or to
assure the owner of indebtedness against loss, through an
agreement to purchase goods, supplies, or services for the
purpose of enabling the debtor to make payment of the
indebtedness held by such owner or otherwise, and the
reimbursement obligations in respect of any letters of credit,
bankers' acceptances or similar facilities issued for the account
of such Person. The calculation of Indebtedness of any Person
shall be adjusted as set forth in Section 9.13.
Indemnified Lender's(s') Group. See Section 16.
Interest Payment Date. (i) As to any Prime Rate Loan, the
last day of the calendar month which includes the Drawdown Date
thereof; and (ii) as to any LIBOR Rate Loan in respect of which
the Interest Period is (A) 3 months or less, the last day of such
Interest Period and (B) more than 3 months, the date that is 3
months from the first day of such Interest Period, each date that
is 3 months thereafter, and, in addition, the last day of such
Interest Period.
Interest Period. With respect to each Loan, (a) initially,
the period commencing on the Drawdown Date of such Loan and
ending on the last day of one of the following periods (as
selected by the Borrowers in a Completed Revolving Credit Loan
Request or as otherwise in accordance with the terms of this
Agreement): (i) for any Prime Rate Loan, the last day of the
calendar month, and (ii) for any LIBOR Rate Loan, 1, 2, 3, or 6
months (provided that (x) the Interest Period for LIBOR Rate
Loans may be shorter than 1 month in order to consolidate 2 or
more LIBOR Rate Loans and (y) the Interest Period for all LIBOR
Rate Loans shall be 1 month until the earlier of 90 days after
the Closing Date or the date on which Fleet completes the
syndication of the Total Commitment); and (b) thereafter, each
period commencing at the end of the last day of the immediately
preceding Interest Period applicable to such Loan and ending on
the last day of the applicable period set forth in (a) above as
selected by the Borrowers in a Conversion Request or as otherwise
in accordance with this Agreement; provided that all of the
foregoing provisions relating to Interest Periods are subject to
the following:
(A) if any Interest Period with respect to a Prime
Rate Loan would end on a day that is not a Business Day,
that Interest Period shall end on the next succeeding
Business Day;
(B) if any Interest Period with respect to a LIBOR
Rate Loan would otherwise end on a day that is not a
Business Day, that 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;
(C) if the Borrowers shall fail to give notice of
conversion or continuation as provided in Section 2.6, the
Borrowers shall be deemed to have requested a conversion of
the affected LIBOR Rate Loan into a Prime Rate Loan on the
last day of the then current Interest Period with respect
thereto;
(D) any Interest Period relating to any LIBOR Rate
Loan 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, subject to subparagraph (E) below,
end on the last Business Day of a calendar month; and
(E) any Interest Period that would otherwise extend
beyond the Maturity Date shall end on the Maturity Date.
Investment Grade Credit Rating. A long-term unsecured,
non-credit enhanced debt rating (a) from Moody's of Baa3 or
higher, (b) from S&P of BBB- or higher, or (c) from a Third
Rating Agency of the Baa3/BBB- equivalent or higher.
Investments. All expenditures made and all liabilities
incurred (contingently or otherwise, but without
double-counting): (i) for the acquisition of stock, partnership
or other equity interests or Indebtedness of, or for loans,
advances, capital contributions or transfers of property to, any
Person; and (ii) for the acquisition of any other obligations of
any Person. In determining the aggregate amount of Investments
outstanding at any particular time: (a) there shall be included
as an Investment all interest accrued with respect to
Indebtedness constituting an Investment unless and until such
interest is paid; (b) there shall be deducted in respect of each
such Investment any amount received as a return of capital (but
only by repurchase, redemption, retirement, repayment,
liquidating dividend or liquidating distribution); (c) there
shall not be deducted in respect of any Investment any amounts
received as earnings on such Investment, whether as dividends,
interest or otherwise, except that accrued interest included as
provided in the foregoing clause (a) may be deducted when paid;
and (d) there shall not be deducted from the aggregate amount of
Investments any decrease in the value thereof.
Joint Venture Ownership Interest Value. As of any date of
determination, an amount equal to the pro rata share of
Consolidated EBITDA attributable to the Borrowers from
Partially-Owned Entities for the most recent two (2) completed
fiscal quarters multiplied by two (2), with the product being
divided by ten and one-half percent (10.5%).
Leases. Leases, licenses and agreements, whether written or
oral, relating to the use or occupation of space in or on the
Buildings or on the Real Estate by persons other than the
Borrower, its Subsidiaries or any Partially-Owned Entity.
Lenders. Collectively, Fleet, any other lenders which may
provide additional commitments and become parties to this
Agreement, and any other Person who becomes an assignee of any
rights of a Lender pursuant to Section 18 or a Person who
acquires all or substantially all of the stock or assets of a
Lender.
LIBOR Breakage Costs. With respect to any LIBOR Rate Loan
to be prepaid or not drawn after elected, a prepayment "breakage"
fee in an amount determined by the Agent in the following manner:
(i) First, the Agent shall determine the amount by which
(a) the total amount of interest which would have
otherwise accrued hereunder on each installment of
principal prepaid or not so drawn, during the period
beginning on the date of such prepayment or failure to
draw and ending on the last day of the applicable LIBOR
Rate Loan Interest Period (the "Reemployment Period"),
exceeds (b) the total amount of interest which would
accrue, during the Reemployment Period, on any readily
marketable bond or other obligation of the United
States of America designated by the Agent in its sole
discretion at or about the time of such payment, such
bond or other obligation of the United States of
America to be in an amount equal (as nearly as may be)
to the amount of principal so paid or not drawn after
elected and to have maturity at the end of the
Reemployment Period, and the interest to accrue thereon
to take account of amortization of any discount from
par or accretion of premium above par at which the same
is selling at the time of designation. Each such
amount is hereinafter referred to as an "Installment
Amount".
(ii) Second, each Installment Amount shall be treated as
payable on the last day of the LIBOR Rate Loan Interest
Period which would have been applicable had such
principal installment not been prepaid or not borrowed.
(iii) Third, the amount to be paid on each such breakage date
shall be the present value of the Installment Amount
determined by discounting the amount thereof from the
date on which such Installment Amount is to be treated
as payable, at the same yield to maturity as that
payable upon the bond or other obligation of the United
States of America designated as aforesaid by the Agent.
If by reason of an Event of Default the Agent elects to
declare a LIBOR Rate Loan to be immediately due and payable,
then any breakage fee with respect to such LIBOR Rate Loan
shall become due and payable in the same manner as though
the Borrowers had exercised such right of prepayment.
LIBOR Business Day. Any day on which commercial banks are
open for international business (including dealings in Dollar
deposits) in London or such other eurodollar interbank market as
may be selected by the Agent in its sole discretion acting in
good faith.
LIBOR Rate. For any Interest Period with respect to a LIBOR
Rate Loan, the rate of interest per annum (rounded upward, if
necessary, to the nearest 1/32 of one percent) as determined on
the basis of the offered rates for deposits in Dollars for a
period of time comparable to such Interest Period which appears
on the Telerate page 3750 (or such other page as may replace that
page on the Telerate service) as of 11:00 a.m. London time on the
date that is two (2) LIBOR Business Days prior to the beginning
of such Interest Period; provided, however, if the rate described
above does not appear on the Telerate System on any applicable
interest determination date, the LIBOR Rate shall be the rate
(rounded upwards as described above, if necessary) for deposits
in Dollars for a period of time substantially equal to the
Interest Period which appears on the Reuters Page "LIBO" (or such
other page as may replace the LIBO Page on that service for the
purpose of displaying such rates), as of 11:00 a.m. London time
on the date that is two (2) LIBOR Business Days prior to the
beginning of such Interest Period.
If both the Telerate and Reuters systems are unavailable,
then the rate for that date will be determined on the basis of
the offered rates for deposits in Dollars for a period of time
comparable to the Interest Period which are offered by four major
banks in the London interbank market at approximately 11:00 a.m.
London time on the date that is two (2) LIBOR Business Days prior
to the beginning of such Interest Period as selected by the
Agent. The principal London office of each of the four major
London banks will be requested to provide a quotation of its
Dollar deposit offered rate. If at least two such quotations are
provided, the rate for that date will be the arithmetic mean of
the quotations. If fewer than two quotations are provided as
requested, the rate for that date will be determined on the basis
of the rates quoted for loans in Dollars to leading European
banks for a period of time comparable to the Interest Period by
major banks in New York City at approximately 11:00 a.m. New York
City time on the date that is two (2) LIBOR Business Days prior
to the beginning of such Interest Period. In the event that the
Agent is unable to obtain any quotation as provided above, it
will be deemed that the LIBOR Rate cannot be determined.
In the event that the Board of Governors of the Federal
Reserve System shall impose a reserve requirement with respect to
LIBOR deposits of the Lenders, then for any period during which
such reserve requirement shall apply, the LIBOR Rate shall be
equal to the amount determined above divided by an amount equal
to one (1.00) minus the Eurocurrency Reserve Rate.
LIBOR Rate Loan(s). Those Revolving Credit Loans bearing
interest calculated by reference to the LIBOR Rate.
Lien. See Section 8.2.
Loan Documents. Collectively, this Agreement, the Notes,
the Guaranties, the Fee Letter of even date and any and all other
agreements, instruments or documents now or hereafter evidencing
or otherwise relating to the Loans and executed or delivered by
or on behalf of any Borrower or its Subsidiaries or any Guarantor
or its Subsidiaries in connection with the Loans, or referred to
herein or therein and delivered to the Agent or the Lenders by or
on behalf of any Borrower, any Guarantor or any of their
respective Subsidiaries, and all schedules, exhibits and annexes
hereto or thereto, as the same may from time to time be amended
and in effect, and any other document identified thereon as a
"Loan Document" under this Agreement.
Loans. The Revolving Credit Loans.
Maturity Date. February 20, 2001, or such earlier date on
which the Loans shall become due and payable pursuant to the
terms thereof.
Moody's. Moody's Investors Service, Inc., and its
successors.
Multiemployer Plan. Any multiemployer plan within the
meaning of Section 3(37) of ERISA maintained or contributed to by
any Borrower or any Guarantor as the case may be or any ERISA
Affiliate.
Notes. The Revolving Credit Notes.
Obligations. All indebtedness, obligations and liabilities
of the Borrowers and their Subsidiaries to any of the Lenders and
the Agent, individually or collectively, under this Agreement or
any of the other Loan Documents or in respect of any of the Loans
or the Notes or other instruments at any time evidencing any
thereof, whether existing on the date of this Agreement or
arising or incurred hereafter, direct or indirect, joint or
several, absolute or contingent, matured or unmatured, liquidated
or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise.
Operating Subsidiaries. Any Subsidiaries of a Borrower
that, at any time of reference, provide management, construction,
design or other services (excluding any such Subsidiary which may
provide any such services which are only incidental to that
Subsidiary's ownership of one or more Real Estate).
Partially-Owned Entity(ies). Any of the partnerships, joint
ventures and other entities owning real estate assets in which
SALP and/or Sovran collectively, directly or indirectly through
its full or partial ownership of another entity, own less than
100% of the equity interests, whether or not such entity is
required in accordance with GAAP to be consolidated with Sovran
for financial reporting purposes.
PBGC. The Pension Benefit Guaranty Corporation created by
Section 4002 of ERISA and any successor entity or entities having
similar responsibilities.
Permits. All governmental permits, licenses, and approvals
necessary or useful for the lawful operation and maintenance of
the Real Estate.
Permitted Liens. Liens, security interests and other
encumbrances permitted by Section 8.2.
Person. Any individual, corporation, partnership, trust,
unincorporated association, business, or other legal entity, and
any government (or any governmental agency or political
subdivision thereof).
Prime Rate. The higher of (a) the variable annual rate of
interest designated from time to time by Fleet at its head office
in Boston, Massachusetts as its "prime rate" (which is a
reference rate and does not necessarily represent the lowest or
best rate being charged to any customer) or (b) one half of one
percent (1/2%) above the overnight federal funds effective rate
as published by the Board of Governors of the Federal Reserve
System, as in effect from time to time. Any change in the Prime
Rate during an Interest Period shall result in a corresponding
change on the same day in the rate of interest accruing from and
after such day on the unpaid balance of principal of the Prime
Rate Loans, if any, applicable to such Interest Period, effective
on the day of such change in the Prime Rate.
Prime Rate Loans. Those Revolving Credit Loans bearing
interest calculated by reference to the Prime Rate.
RCRA. See Section 6.18.
Real Estate. The fixed and tangible properties consisting
of land, buildings and/or other improvements owned by any
Borrower, by any Guarantor or by any other entity in which a
Borrower is the holder of an equity interest at the relevant time
of reference thereto, including, without limitation, (i) the
Unencumbered Properties at such time of reference, and (ii) the
real estate assets owned by each of the Partially-Owned Entities
at such time of reference.
Record. The grid attached to any Note, or the continuation
of such grid, or any other similar record, including computer
records, maintained by any Lender with respect to any Loan.
Recourse. With reference to any obligation or liability,
any liability or obligation that is not Without Recourse to the
obligor thereunder, directly or indirectly. For purposes hereof,
a Person shall not be deemed to be "indirectly" liable for the
liabilities or obligations of an obligor solely by reason of the
fact that such Person has an ownership interest in such obligor,
provided that such Person is not otherwise legally liable,
directly or indirectly, for such obligor's liabilities or
obligations (e.g., by reason of a guaranty or contribution
obligation, by operation of law or by reason of such Person's
being a general partner of such obligor).
REIT. A "real estate investment trust", as such term is
defined in Section 856 of the Code.
Release. See Section 6.18(c)(iii).
Required Lenders. As of any date, the Lenders whose
aggregate Commitments constitute at least sixty-six and
two-thirds percent (66 2/3%) of the Total Commitment.
Revolving Credit Loan(s). Each and every revolving credit
loan made or to be made by the Lenders to the Borrowers pursuant
to Section 2.
Revolving Credit Notes. Collectively, the separate
promissory notes of the Borrowers in favor of each Lender in
substantially the form of Exhibit A hereto, in the aggregate
principal amount of $150,000,000, dated as of the date hereof or
as of such later date as any Person becomes a Lender under this
Agreement, and completed with appropriate insertions, as each of
such notes may be amended and/or restated from time to time.
Revolving Credit Note Record. A Record with respect to the
Revolving Credit Notes.
S&P. Standard & Poor's Ratings Group, a division of
McGraw-Hill, Inc., and its successors.
SALP. As defined in the preamble hereto.
SARA. See Section 6.18.
SEC. The United States Security and Exchange Commission.
SEC Filings. Collectively, (a) Sovran's Annual Report on
Form 10-K for the year ended December 31, 1996, filed with the
SEC pursuant to the Securities and Exchange Act of 1934, as
amended (the "Exchange Act"), (b) Sovran's Quarterly Report on
Form 10-Q for the quarter ended September 30, 1997 filed with the
SEC pursuant to the Exchange Act and (c) Sovran's Current Report
on Form 8-K, dated November 11, 1997, filed with the SEC pursuant
to the Exchange Act, including all amendments thereto.
Sovran. As defined in the preamble hereto.
subsidiary. Any entity required to be consolidated with its
direct or indirect parent in accordance with GAAP.
Subsidiary. Any corporation, association, partnership,
trust, or other business entity of which the designated parent
shall at any time own directly or indirectly through a Subsidiary
or Subsidiaries at least a majority (by number of votes or
controlling interests) of the outstanding voting interests or at
least a majority of the economic interests (including, in any
case, the Operating Subsidiaries and any entity required to be
consolidated with its designated parent in accordance with GAAP).
Subsidiary Guarantor. Any Guarantor other than Holdings.
Subsidiary Guaranty. The form of Guaranty to be entered
into by any Subsidiary Guarantor substantially in the form of
Exhibit B hereto.
Third Debt Rating. SALP's long term unsecured debt rating
from a Third Rating Agency.
Third Rating Agency. Duff & Phelps, Fitch or another
nationally-recognized rating agency (other than S&P or Moody's)
reasonably satisfactory to the Agent.
Title Policies. For each Unencumbered Property, an ALTA
standard form title policy (or, if such form is not available, an
equivalent form of title insurance policy) issued by a
nationally-recognized title insurance company, insuring that a
Borrower or a Subsidiary Guarantor holds good and clear
marketable fee simple title to such Unencumbered Property,
subject only to Permitted Liens.
Total Commitment. As of any date, the sum of the
then-current Commitments of the Lenders, provided that the Total
Commitment shall not at any time exceed the lesser of: (i)
$150,000,000 or (ii) the amount that is the maximum amount that
permits compliance with the terms of Section 9.
Type. As to any Revolving Credit Loan, its nature as a
Prime Rate Loan or a LIBOR Rate Loan.
Unanimous Lender Approval. The written consent of each
Lender that is a party to this Agreement at the time of
reference.
Unencumbered Property. Any Real Estate located in the
contiguous United States that on any date of determination: (a)
is not subject to any Liens (including any such Lien imposed by
the organizational documents of the owner of such asset, but
excluding Permitted Liens), (b) is not the subject of any matter
that materially adversely affects the value of such Real Estate,
(c) is not the subject of a Disqualifying Environmental Event, a
Disqualifying Building Event or a Disqualifying Legal Event, (d)
has been improved with a Building or Buildings which (1) have
been issued a certificate of occupancy (where available) or is
otherwise lawfully occupied for its intended use, (2) are fully
operational and (3) have an average rent-paying occupancy rate
(by net rentable square feet) of at least 75% for the two most
recently ended consecutive fiscal quarters, (e) is wholly owned
by a Borrower or a Guarantor that is a wholly-owned Subsidiary
and (f) has not been designated by the Borrowers in writing to
the Agent as Real Estate that is not an Unencumbered Property
because of a Disqualifying Environmental Event, a Disqualifying
Building Event or a Disqualifying Legal Event or the Borrower's
intention to subject such Unencumbered Property to an
Indebtedness Lien or Sell such Unencumbered Property pursuant to
Section 8.4(b) hereof, which designation shall not be permitted
during the continuance of a Default (other than if such
designation during a Default is made in conjunction with such
Real Estate's being the subject of a Sale or Indebtedness Lien
under Section 8.4(b)(ii) and in compliance therewith) or an Event
of Default and shall be accompanied by a compliance certificate
in the form of Exhibit D attached hereto.
Unhedged Variable Rate Debt. All Indebtedness of the
Borrowers and their respective Subsidiaries for borrowed money or
in respect of reimbursement obligations for letters of credit,
guaranty obligations or Capitalized Leases, whether direct or
contingent, including, to the extent applicable, the Obligations,
which bears interest at one or more variable rates and is not
subject to an interest rate hedging arrangement having a minimum
term of one (1) year and having other terms reasonably acceptable
to the Agent.
Unimproved Land. Any Real Estate consisting of raw land
which is unimproved by Buildings.
Unsecured Indebtedness. All Indebtedness of any Person that
is not secured by a Lien on any asset of such Person.
Wholly-owned Subsidiary. Any Subsidiary of which Sovran
and/or SALP shall at any time own directly or indirectly through
a Subsidiary or Subsidiaries at least a majority (by number of
votes or controlling interests) of the outstanding voting
interests and one hundred percent (100%) of the economic
interests, of which at least ninety-nine percent (99%) of the
economic interests shall be owned by SALP.
"Without Recourse" or "without recourse". With reference to
any obligation or liability, any obligation or liability for
which the obligor thereunder is not liable or obligated other
than as to its interest in a designated Real Estate or other
specifically identified asset only (which asset is not interests
in another Person), subject to such limited exceptions to the
non-recourse nature of such obligation or liability, such as
fraud, misappropriation, misapplication and environmental
indemnities, as are usual and customary in like transactions
involving institutional lenders at the time of the incurrence of
such obligation or liability.
Section 1.2. Rules of Interpretation.
(i) A reference to any document or agreement shall include
such document or agreement as amended, modified or
supplemented from time to time in accordance with its
terms or the terms of this Agreement.
(ii) The singular includes the plural and the plural
includes the singular.
(iii) A reference to any law includes any amendment or
modification to such law.
(iv) A reference to any Person includes its permitted
successors and permitted assigns.
(v) Accounting terms not otherwise defined herein have the
meanings assigned to them by GAAP applied on a
consistent basis by the accounting entity to which they
refer.
(vi) The words "include", "includes" and "including" are not
limiting.
(vii) All terms not specifically defined herein or by GAAP,
which terms are defined in the Uniform Commercial Code
as in effect in New York, have the meanings assigned to
them therein.
(viii) Reference to a particular "Section" refers to that
section of this Agreement unless otherwise indicated.
(ix) The words "herein", "hereof", "hereunder" and words of
like import shall refer to this Agreement as a whole
and not to any particular section or subdivision of
this Agreement.
(x) Any provision granting any right to any Borrower or
Guarantor during the continuance of (a) an Event of
Default shall not modify, limit, waive or estop the
rights of the Lenders during the continuance of such
Event of Default, including the rights of the Lenders
to accelerate the Loans under Section 12.1 and the
rights of the Lenders under Section 12.2 or 12.3, or
(b) a Default, shall not extend the time for curing
same or modify any otherwise applicable notice
regarding same.
Section 2. THE REVOLVING CREDIT FACILITY.
Section 2.1. Commitment to Lend. Subject to the
provisions of Section 2.5 and the other terms and conditions set
forth in this Agreement, each of the Lenders severally agrees to
lend to the Borrowers and the Borrowers may borrow, repay, and
reborrow from each Lender from time to time from the Closing Date
up to but not including the Maturity Date upon notice by the
Borrower Representative to the Agent given in accordance with
Section 2.5 hereof, such sums as are requested by the Borrower
Representative up to a maximum aggregate principal amount
outstanding (after giving effect to all amounts requested) at any
one time equal to such Lender's Commitment; provided that the sum
of the outstanding amount of the Revolving Credit Loans (after
giving effect to all amounts requested) shall not at any time
exceed the Total Commitment in effect at such time.
The Revolving Credit Loans shall be made pro rata in
accordance with each Lender's Commitment Percentage. Each
request for a Revolving Credit Loan made pursuant to Section 2.5
hereof shall constitute a representation and warranty by the
Borrowers that the conditions set forth in Section 10 have been
satisfied as of the Closing Date and that the conditions set
forth in Section 11 have been satisfied on the date of such
request and will be satisfied on the proposed Drawdown Date of
the requested Revolving Credit Loan, provided that the making of
such representation and warranty by the Borrowers shall not limit
the right of any Lender not to lend if such conditions have not
been met. No Revolving Credit Loan shall be required to be made
by any Lender unless all of the conditions contained in
Section 10 have been satisfied as of the Closing Date and all of
the conditions set forth in Section 11 have been met at the time
of any request for a Revolving Credit Loan.
Section 2.2. [Intentionally Omitted]
Section 2.3. The Revolving Credit Notes. The Revolving
Credit Loans shall be evidenced by the Revolving Credit Notes. A
Revolving Credit Note shall be payable to the order of each
Lender in an aggregate principal amount equal to such Lender's
Commitment. The Borrowers irrevocably authorize each Lender to
make or cause to be made, at or about the time of the Drawdown
Date of any Revolving Credit Loan or at the time of receipt of
any payment of principal on such Lender's Revolving Credit Notes,
an appropriate notation on such Lender's Revolving Credit Note
Record reflecting the making of such Revolving Credit Loan or (as
the case may be) the receipt of such payment. The outstanding
amount of the Revolving Credit Loans set forth on such Lender's
Revolving Credit Note Record shall be prima facie evidence of the
principal amount thereof owing and unpaid to such Lender, but the
failure to record, or any error in so recording, any such amount
on such Lender's Revolving Credit Note Record shall not limit or
otherwise affect the obligations of the Borrowers hereunder or
under any Revolving Credit Note to make payments of principal of
or interest on any Revolving Credit Note when due. Upon receipt
of an affidavit of an officer of any Lender as to the loss,
theft, destruction or mutilation of any Revolving Credit Note or
any other security document which is not of public record, and,
in the case of any such loss, theft, destruction or mutilation,
upon surrender and cancellation of such Revolving Credit Note or
other security document, the Borrowers will issue, in lieu
thereof, a replacement Revolving Credit Note or other security
document in the same principal amount thereof and otherwise of
like tenor.
Section 2.4. Interest on Revolving Credit Loans; Fees.
(a) Interest on Prime Rate Loans. Each Prime Rate Loan
shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period
with respect thereto (unless earlier paid in accordance with
Section 2.9) at a rate equal to the Prime Rate plus the
Applicable Margin for Prime Rate Loans.
(b) Interest on LIBOR Rate Loans. Each LIBOR Rate Loan
shall bear interest for the period commencing with the Drawdown
Date thereof and ending on the last day of the Interest Period
with respect thereto (unless earlier paid in accordance with
Section 2.9) at a rate equal to the LIBOR Rate determined for
such Interest Period plus the Applicable Margin for LIBOR Rate
Loans.
(c) Interest Payments. The Borrowers jointly and severally
unconditionally promise to pay interest on each Revolving Credit
Loan in arrears on each Interest Payment Date with respect
thereto.
(d) Closing Fee. The Borrowers jointly and severally agree
to pay to the Agent a closing fee (the "Closing Fee") as set
forth in that certain letter agreement of even date herewith
between the Borrower Representative and the Agent.
(e) Commitment Fee. The Borrowers jointly and severally
agree to pay to the Agent, for the accounts of the Lenders in
accordance with their respective Commitment Percentages, a
commitment fee in an amount equal to either: (i) one-fifth of
one percent (0.20%) per annum on the Daily Unused Commitment, if
the Daily Unused Commitment exceeds 66 2/3% of the Total
Commitment (without regard to clause (ii) of the proviso in the
definition thereof), (ii) fifteen hundredths of one percent
(0.15%) per annum on the Daily Unused Commitment, if the Daily
Unused Commitment exceeds 33 1/3% of the Total Commitment
(without regard to clause (ii) of the proviso in the definition
thereof) but is less than or equal to 66 2/3% of the Total
Commitment (without regard to clause (ii) of the proviso in the
definition thereof), or (iii) one-eighth of one percent (0.125%)
per annum on the Daily Unused Commitment, if the Daily Unused
Commitment is less than or equal to 33 1/3% of the Total
Commitment (without regard to clause (ii) of the proviso in the
definition thereof), in each case calculated during each calendar
quarter or portion thereof for the first calendar quarter of the
term of this Agreement and the last calendar quarter of the term
of this Agreement, if either of same is not a full calendar
quarter from the date hereof to the Maturity Date (the
"Commitment Fee"). The Commitment Fee shall be payable quarterly
in arrears on the fifteenth (15th) day of each January, April,
July and October quarter for the immediately preceding calendar
quarter commencing on the first such date following the Closing
Date, with a final payment on the Maturity Date or any earlier
date on which the Commitments shall terminate.
(f) Administration Fee. The Borrowers shall pay to the
Agent an administration fee as set forth in that certain letter
agreement of even date herewith between the Borrower
Representative and the Agent.
Section 2.5. Requests for Revolving Credit Loans.
The following provisions shall apply to each request by the
Borrowers for a Revolving Credit Loan:
(i) The Borrower Representative shall submit a
Completed Revolving Credit Loan Request to the Agent as
provided in this Section 2.5. Except as otherwise provided
herein, each Completed Revolving Credit Loan Request shall
be in a minimum amount of $2,000,000 or an integral multiple
of $500,000 in excess thereof. Each Completed Revolving
Credit Loan Request shall be irrevocable and binding on the
Borrowers and shall obligate the Borrowers to accept the
Revolving Credit Loans requested from the Lenders on the
proposed Drawdown Date, unless such Completed Revolving
Credit Loan Request is withdrawn (x) in the case of a
request for a LIBOR Rate Loan, at least four (4) Business
Days prior to the proposed Drawdown Date for such Revolving
Credit Loan, and (y) in the case of a request for a Prime
Rate Loan, at least two (2) Business Days prior to the
proposed Drawdown Date for such Revolving Credit Loan.
(ii) Each Completed Revolving Credit Loan Request may
be delivered by the Borrower Representative to the Agent by
10:00 a.m. (New York City time) on any Business Day, and at
least two (2) Business Days prior to the proposed Drawdown
Date of any Prime Rate Loan, and at least four (4) Business
Days prior to the proposed Drawdown Date of any LIBOR Rate
Loan.
(iii) Each Completed Revolving Credit Loan Request shall
include a completed writing in the form of Exhibit C hereto
specifying: (1) the principal amount of the Revolving Credit
Loan requested, (2) the proposed Drawdown Date of such
Revolving Credit Loan, (3) the Interest Period applicable to
such Revolving Credit Loan, and (4) the Type of such
Revolving Credit Loan being requested.
(iv) No Lender shall be obligated to fund any Revolving
Credit Loan unless:
(a) a Completed Revolving Credit Loan Request has
been timely received by the Agent as provided in
subsection (i) above; and
(b) both before and after giving effect to the
Revolving Credit Loan to be made pursuant to the
Completed Revolving Credit Loan Request, all of the
conditions contained in Section 10 shall have been
satisfied as of the Closing Date and all of the
conditions set forth in Section 11 shall have been met,
including, without limitation, the condition under
Section 11.1 that there be no Default or Event of
Default under this Agreement; and
(c) the Agent shall have received a certificate
in the form of Exhibit D hereto signed by the chief
financial officer or treasurer of the Borrower
Representative setting forth computations evidencing
compliance with the covenants contained in Section 9.1,
Section 9.2, Section 9.3 and Section 9.11 on a pro
forma basis after giving effect to such requested
Revolving Credit Loan, and, certifying that, both
before and after giving effect to such requested
Revolving Credit Loan, no Default or Event of Default
exists or will exist under this Agreement or any other
Loan Document, and that after taking into account such
requested Revolving Credit Loan, no default will exist
as of the Drawdown Date or thereafter.
(v) The Agent will use good faith efforts to cause the
Completed Revolving Credit Loan Request to be delivered to
each Lender in accordance with Section 14.12 and in any
event on the same day or the Business Day following the day
a Completed Revolving Credit Loan Request is received by the
Agent.
Section 2.6. Conversion Options.
(a) The Borrowers may elect from time to time by written
notice in the form of Exhibit G to convert any outstanding
Revolving Credit Loan to a Revolving Credit Loan of another Type,
provided that (i) with respect to any such conversion of a LIBOR
Rate Loan to a Prime Rate Loan, the Borrower Representative shall
give the Agent at least three (3) Business Days prior written
notice of such election; (ii) with respect to any such conversion
of a Prime Rate Loan to a LIBOR Rate Loan, the Borrower
Representative shall give the Agent at least four (4) LIBOR
Business Days prior written notice of such election; (iii) with
respect to any such conversion of a LIBOR Rate Loan into a Prime
Rate Loan, such conversion shall only be made on the last day of
the Interest Period with respect thereto unless the Borrowers pay
the related LIBOR Breakage Costs at the time of such conversion
and (iv) no Revolving Credit Loan may be converted into a LIBOR
Rate Loan when any Default or Event of Default has occurred and
is continuing. All or any part of outstanding Revolving Credit
Loans of any Type may be converted into a Revolving Credit Loan
of another Type as provided herein, provided that any partial
conversion shall be in an aggregate principal amount of
$2,000,000 or a integral multiple of $500,000 in excess thereof.
Each Conversion Request relating to the conversion of a Prime
Rate Loan to a LIBOR Rate Loan shall be irrevocable by the
Borrowers.
(b) Any Revolving Credit Loan of any Type may be continued
as such upon the expiration of the Interest Period with respect
thereto (i) in the case of Prime Rate Loans, automatically and
(ii) in the case of LIBOR Rate Loans by compliance by the
Borrower Representative with the notice provisions contained in
Section 2.6(a); provided that no LIBOR Rate Loan may be continued
as such when any Default or Event of Default has occurred and is
continuing but shall be automatically converted to a Prime Rate
Loan on the last day of the first Interest Period relating
thereto ending during the continuance of any Default or Event of
Default. The Agent shall notify the Lenders promptly when any
such automatic conversion contemplated by this Section 2.6(b) is
scheduled to occur.
(c) In the event that the Borrower Representative does not
notify the Agent of its election hereunder with respect to the
continuation of any LIBOR Rate Loan as such, the affected LIBOR
Rate Loan shall automatically be converted to a Prime Rate Loan
at the end of the applicable Interest Period.
(d) The Borrowers may not request or elect a LIBOR Rate
Loan pursuant to Section 2.5, elect to convert a Prime Rate Loan
to a LIBOR Rate Loan pursuant to Section 2.6(a), or elect to
continue a LIBOR Rate Loan pursuant to Section 2.6(b) if, after
giving effect thereto, there would be greater than seven (7)
LIBOR Rate Loans then outstanding. Any Loan Request for a LIBOR
Rate Loan that would create greater than seven (7) LIBOR Rate
Loans outstanding shall be deemed to be a Loan Request for a
Prime Rate Loan.
Section 2.7. Funds for Revolving Credit Loans.
(a) Subject to the other provisions of this Section 2, not
later than 12:00 p.m. (New York City time) on the proposed
Drawdown Date of any Revolving Credit Loan, each of the Lenders
will make available to the Agent, at the Agent's Head Office, in
immediately available funds, the amount of such Lender's
Commitment Percentage of the amount of the requested Revolving
Credit Loan; provided that each Lender shall provide notice to
the Agent of its intent not to make available its Commitment
Percentage of any requested Revolving Credit Loan as soon as
possible after receipt of any Completed Revolving Credit Loan
Request, and in any event not later than 4:00 p.m. (New York City
time) on (x) the Business Day prior to the Drawdown Date of any
requested Prime Rate Loan and (y) the third Business Day prior to
the Drawdown Date of any requested LIBOR Rate Loan. Upon receipt
from each Lender of such amount, the Agent will make available to
the Borrowers in the Borrower Representative's account with the
Agent the aggregate amount of such Revolving Credit Loan made
available to the Agent by the Lenders; all such funds received by
the Agent by 12:00 p.m. (New York City time) on any Business Day
will be made available to the Borrowers not later than 2:00 p.m.
on the same Business Day. Funds received after such time will be
made available by not later than 12:00 p.m. on the next Business
Day. The failure or refusal of any Lender to make available to
the Agent at the aforesaid time and place on any Drawdown Date
the amount of its Commitment Percentage of the requested
Revolving Credit Loan shall not relieve any other Lender from its
several obligation hereunder to make available to the Agent the
amount of its Commitment Percentage of any requested Revolving
Credit Loan but in no event shall the Agent (in its capacity as
Agent) have any obligation to make any funding or shall any
Lender be obligated to fund more than its Commitment Percentage
of the requested Revolving Credit Loan or to increase its
Commitment Percentage on account of such failure or otherwise.
(b) The Agent may, unless notified to the contrary by any
Lender prior to a Drawdown Date, assume that such Lender has made
available to the Agent on such Drawdown Date the amount of such
Lender's Commitment Percentage of the Revolving Credit Loan to be
made on such Drawdown Date, and the Agent may (but it shall not
be required to), in reliance upon such assumption, make available
to the Borrowers a corresponding amount. If any Lender makes
available to the Agent such amount on a date after such Drawdown
Date, such Lender shall pay to the Agent on demand an amount
equal to the product of (i) the average, computed for the period
referred to in clause (iii) below, of the weighted average
interest rate paid by the Agent for federal funds acquired by the
Agent during each day included in such period, multiplied by (ii)
the amount of such Lender's Commitment Percentage of such
Revolving Credit Loan, multiplied by (iii) a fraction, the
numerator of which is the number of days that elapsed from and
including such Drawdown Date to the date on which the amount of
such Lender's Commitment Percentage of such Revolving Credit Loan
shall become immediately available to the Agent, and the
denominator of which is 360. A statement of the Agent submitted
to such Lender with respect to any amounts owing under this
paragraph shall be prima facie evidence of the amount due and
owing to the Agent by such Lender. If the amount of such
Lender's Commitment Percentage of such Revolving Credit Loans is
not made available to the Agent by such Lender within three (3)
Business Days following such Drawdown Date, the Agent shall be
entitled to recover such amount from the Borrowers on demand,
with interest thereon at the rate per annum applicable to the
Revolving Credit Loans made on such Drawdown Date.
Section 2.8. Repayment of the Revolving Credit Loans at
Maturity. The Borrowers jointly and severally promise to pay on
the Maturity Date, and there shall become absolutely due and
payable on the Maturity Date, all unpaid principal of the
Revolving Credit Loans outstanding on such date, together with
any and all accrued and unpaid interest thereon, the unpaid
balance of the Commitment Fee accrued through such date, and any
and all other unpaid amounts due under this Agreement, the
Revolving Credit Notes or any other of the Loan Documents.
Section 2.9. Optional Repayments of Revolving Credit
Loans. The Borrowers shall have the right, at their election, to
prepay the outstanding amount of the Revolving Credit Loans, in
whole or in part, at any time without penalty or premium;
provided that the outstanding amount of any LIBOR Rate Loans may
not be prepaid unless the Borrowers pay any LIBOR Breakage Costs
for each LIBOR Rate Loan so prepaid at the time of such
prepayment. The Borrower Representative shall give the Agent, no
later than 10:00 a.m., New York City time, at least two (2)
Business Days' prior written notice of any prepayment pursuant to
this Section 2.9 of any Prime Rate Loans, and at least four (4)
LIBOR Business Days' notice of any proposed prepayment pursuant
to this Section 2.9 of LIBOR Rate Loans, specifying the proposed
date of prepayment of Revolving Credit Loans and the principal
amount to be prepaid. Each such partial prepayment of the
Revolving Credit Loans shall be in an amount of $2,000,000 or
integral multiple of $500,000 in excess thereof, or, if less, the
outstanding balance of the Revolving Credit Loans then being
repaid, shall be accompanied by the payment of all charges
outstanding on all Revolving Credit Loans so prepaid and of all
accrued interest on the principal prepaid to the date of payment,
and shall be applied, in the absence of instruction by the
Borrower Representative, first to the principal of Prime Rate
Loans and then to the principal of LIBOR Rate Loans, at the
Agent's option.
Section 2.10. Mandatory Repayments of Revolving Credit
Loans. If at any time the outstanding amount of the Revolving
Credit Loans exceeds the Total Commitment, the Borrowers shall
immediately pay the amount of such excess to the Agent for the
respective accounts of the Lenders for application to the
Revolving Credit Loans.
Section 3. INTENTIONALLY OMITTED.
Section 4. CERTAIN GENERAL PROVISIONS.
Section 4.1. Funds for Payments.
(a) All payments of principal, interest, fees, and any
other amounts due hereunder or under any of the other Loan
Documents shall be made to the Agent, for the respective accounts
of the Lenders or (as the case may be) the Agent, at the Agent's
Head Office, in each case in Dollars and in immediately available
funds.
(b) All payments by the Borrowers hereunder and under any
of the other Loan Documents shall be made without setoff or
counterclaim and free and clear of and without deduction for any
taxes, levies, imposts, duties, charges, fees, deductions,
withholdings, compulsory liens, restrictions or conditions of any
nature now or hereafter imposed or levied by any jurisdiction or
any political subdivision thereof or taxing or other authority
therein unless the Borrowers are compelled by law to make such
deduction or withholding. If any such obligation is imposed upon
the Borrowers with respect to any amount payable by them
hereunder or under any of the other Loan Documents, the Borrowers
shall pay to the Agent, for the account of the Lenders or (as the
case may be) the Agent, on the date on which such amount is due
and payable hereunder or under such other Loan Document, such
additional amount in Dollars as shall be necessary to enable the
Lenders to receive the same net amount which the Lenders would
have received on such due date had no such obligation been
imposed upon the Borrowers. The Borrower Representative will
deliver promptly 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 Borrowers hereunder or under
such other Loan Document.
(c) Each Lender that is not incorporated or organized under
the laws of the United States of America or a state thereof or
the District of Columbia (a "Non-U.S. Lender") agrees that, prior
to the first date on which any payment is due to it hereunder, it
will deliver to the Borrower Representative and the Agent two
duly completed copies of United States Internal Revenue Service
Form 1001 or 4224 or successor applicable form, as the case may
be, certifying in each case that such Non-U.S. Lender is entitled
to receive payments under this Agreement and the Notes payable to
it, without deduction or withholding of any United States federal
income taxes. Each Non-U.S. Lender that so delivers a Form 1001
or 4224 pursuant to the preceding sentence further undertakes to
deliver to each of the Borrower Representative and the Agent two
further copies of Form 1001 or 4224 or successor applicable form,
or other manner of certification, as the case may be, on or
before the date that any such letter or form expires or becomes
obsolete or after the occurrence of any event requiring a change
in the most recent form previously delivered by it to the
Borrower Representative, and such extensions or renewals thereof
as may reasonably be requested by the Borrower Representative,
certifying in the case of a Form 1001 or 4224 that such Non-U.S.
Lender is entitled to receive payments under this Agreement and
the Notes without deduction or withholding of any United States
federal income taxes, unless in any such case an event
(including, without limitation, any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Non-U.S. Lender from
duly completing and delivering any such form with respect to it
and such Non-U.S. Lender advises the Borrower Representative that
it is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(d) The Borrowers shall not be required to pay any
additional amounts to any Non-U.S. Lender in respect of United
States Federal withholding tax pursuant to Section 4.1(b) to the
extent that (i) the obligation to withhold amounts with respect
to United States Federal withholding tax existed on the date such
Non-U.S. Lender became a party to this Agreement or, with respect
to payments to a different lending office designated by the
Non-U.S. Lender as its applicable lending office (a "New Lending
Office"), the date such Non-U.S. Lender designated such New
Lending Office with respect to the Loans; provided, however, that
this clause (i) shall not apply to any transferee or New Lending
Office as a result of an assignment, transfer or designation made
at the request of the Borrowers; and provided further, however,
that this clause (i) shall not apply to the extent the indemnity
payment or additional amounts any transferee, or Lender through a
New Lending Office, would be entitled to receive without regard
to this clause (i) do not exceed the indemnity payment or
additional amounts that the Person making the assignment or
transfer to such transferee, or Lender making the designation of
such New Lending Office, would have been entitled to receive in
the absence of such assignment, transfer or designation; or (ii)
the obligation to pay such additional amounts would not have
arisen but for a failure by such Non-U.S. Lender to comply with
the provisions of paragraph (c) above.
Section 4.2. Computations. All computations of interest on
the Loans and of other fees to the extent applicable shall be
made on the basis of a 360-day year and the actual number of days
elapsed. Except as otherwise provided in the definition of the
term "Interest Period" with respect to LIBOR Rate Loans, whenever
a payment hereunder or under any of the other Loan Documents
becomes due on a day that is not a Business Day, the due date for
such payment shall be extended to the next succeeding Business
Day, and interest shall accrue during such extension. The
outstanding amount of the Loans as reflected on the Note Records
from time to time shall constitute prima facie evidence of the
principal amount thereof.
Section 4.3. Inability to Determine LIBOR Rate. In the
event, prior to the commencement of any Interest Period relating
to any LIBOR Rate Loan, the Agent shall reasonably determine that
adequate and reasonable methods do not exist for ascertaining the
LIBOR Rate that would otherwise determine the rate of interest to
be applicable to any LIBOR Rate Loan during any Interest Period,
the Agent shall forthwith give notice of such determination
(which shall be conclusive and binding on the Borrowers) to the
Borrower Representative and the Lenders. In such event (a) any
Loan Request with respect to LIBOR Rate Loans shall be
automatically withdrawn and shall be deemed a request for Prime
Rate Loans, (b) each LIBOR Rate Loan will automatically, on the
last day of the then current Interest Period thereof, become a
Prime Rate Loan, and (c) the obligations of the Lenders to make
LIBOR Rate Loans shall be suspended until the Agent reasonably
determines that the circumstances giving rise to such suspension
no longer exist, whereupon the Agent shall so notify the Borrower
Representative and the Lenders.
Section 4.4. Illegality. Notwithstanding any other
provisions herein, if any present or future law, regulation,
treaty or directive or in the interpretation or application
thereof shall make it unlawful for any Lender to make or maintain
LIBOR Rate Loans, such Lender shall forthwith give notice of such
circumstances to the Borrower Representative and the other
Lenders and thereupon (a) the commitment of such Lender to make
LIBOR Rate Loans or convert Prime Rate Loans to LIBOR Rate Loans
shall forthwith be suspended and (b) such Lender's Commitment
Percentage of LIBOR Rate Loans then outstanding shall be
converted automatically to Prime Rate Loans on the last day of
each Interest Period applicable to such LIBOR Rate Loans or
within such earlier period as may be required by law, all until
such time as it is no longer unlawful for such Lender to make or
maintain LIBOR Rate Loans. The Borrowers hereby jointly and
severally agree to promptly pay the Agent for the account of such
Lender, upon demand, any additional amounts necessary to
compensate such Lender for any costs incurred by such Lender in
making any conversion required by this Section 4.4 prior to the
last day of an Interest Period with respect to a LIBOR Rate Loan,
including any interest or fees payable by such Lender to lenders
of funds obtained by it in order to make or maintain its LIBOR
Rate Loans hereunder.
Section 4.5. Additional Costs, Etc. If any present or
future applicable law, which expression, as used herein, includes
statutes, rules and regulations thereunder and interpretations
thereof by any competent court or by any governmental or other
regulatory body or official charged with the administration or
the interpretation thereof and requests, directives, instructions
and notices at any time or from time to time hereafter made upon
or otherwise issued to any Lender or the Agent by any central
bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(a) subject any Lender or the Agent to any tax, levy,
impost, duty, charge, fee, deduction or withholding of any nature
with respect to this Agreement, the other Loan Documents, such
Lender's Commitment or the Loans (other than taxes based upon or
measured by the income or profits of such Lender or the Agent),
or
(b) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to any Lender
of the principal of or the interest on any Loans or any other
amounts payable to the Agent or any Lender under this Agreement
or the other Loan Documents, or
(c) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement)
any special deposit, reserve, assessment, liquidity, capital
adequacy or other similar requirements (whether or not having the
force of law) against assets held by, or deposits in or for the
account of, or loans by, or commitments of an office of any
Lender, or
(d) impose on any Lender or the Agent any other conditions
or requirements with respect to this Agreement, the other Loan
Documents, the Loans, such Lender's Commitment, or any class of
loans, or commitments of which any of the Loans or such Lender's
Commitment forms a part;
and the result of any of the foregoing is
(i) to increase the cost to any Lender of making,
funding, issuing, renewing, extending or maintaining any of
the Loans or such Lender's Commitment, or
(ii) to reduce the amount of principal, interest or
other amount payable to such Lender or the Agent hereunder
on account of such Lender's Commitment or any of the Loans,
or
(iii) to require such Lender or the Agent to make any
payment or to forego any interest or other sum payable
hereunder, the amount of which payment or foregone interest
or other sum is calculated by reference to the gross amount
of any sum receivable or deemed received by such Lender or
the Agent from the Borrowers hereunder,
then, and in each such case, the Borrowers will, within thirty
(30) days of demand made by such Lender or (as the case may be)
the Agent at any time and from time to time and as often as the
occasion therefor may arise, pay to such Lender such additional
amounts as such Lender shall determine in good faith to be
sufficient to compensate such Lender for such additional cost,
reduction, payment or foregone interest or other sum, provided
that such Lender is generally imposing similar charges on its
other similarly situated borrowers.
Section 4.6. Capital Adequacy. If after the date hereof
any Lender or the Agent determines that (i) the adoption of or
change in any law, governmental rule, regulation, policy,
guideline or directive (whether or not having the force of law)
regarding capital requirements for banks or bank holding
companies or any change in the interpretation or application
thereof by a court or governmental authority with appropriate
jurisdiction, or (ii) compliance by such Lender or the Agent or
any Person controlling such Lender or the Agent with any law,
governmental rule, regulation, policy, guideline or directive
(whether or not having the force of law) of any such Person
regarding capital adequacy, has the effect of reducing the return
on such Lender's or the Agent's Commitment with respect to any
Loans to a level below that which such Lender or the Agent could
have achieved but for such adoption, change or compliance (taking
into consideration such Lender's or the Agent's then existing
policies with respect to capital adequacy and assuming full
utilization of such entity's capital) by any amount deemed by
such Lender or (as the case may be) the Agent to be material,
then such Lender or the Agent may notify the Borrower
Representative of such fact. To the extent that the amount of
such reduction in the return on capital is not reflected in the
Prime Rate or the LIBOR Rate, the Borrowers jointly and severally
agree to pay such Lender or (as the case may be) the Agent for
the amount of such reduction in the return on capital as and when
such reduction is determined within thirty (30) days of
presentation by such Lender or (as the case may be) the Agent of
a certificate in accordance with Section 4.7 hereof. Each Lender
shall allocate such cost increases among its customers in good
faith and on an equitable basis.
Section 4.7. Certificate. A certificate setting forth any
additional amounts payable pursuant to Section 4.5 or 4.6 and a
brief explanation of such amounts (including the calculation
thereof) which are due, submitted by any Lender or the Agent to
the Borrower Representative, shall be prima facie evidence that
such amounts are due and owing.
Section 4.8. Indemnity. In addition to the other
provisions of this Agreement regarding such matters, but without
duplication to the extent a Lender has been compensated pursuant
thereto, the Borrowers jointly and severally agree to indemnify
the Agent and each Lender and to hold the Agent and each Lender
harmless from and against any loss, cost or expense (including
loss of anticipated profits) that the Agent or such Lender may
sustain or incur as a consequence of (a) the failure by the
Borrowers to pay any principal amount of or any interest on any
LIBOR Rate Loans as and when due and payable, including any such
loss or expense arising from interest or fees payable by the
Agent or such Lender to lenders of funds obtained by it in order
to maintain its LIBOR Rate Loans, (b) the failure by the
Borrowers to make a borrowing or conversion after the Borrowers
have given a Completed Revolving Credit Loan Request for a LIBOR
Rate Loan or a Conversion Request for a LIBOR Rate Loan, and (c)
the making of any payment of a LIBOR Rate Loan or the making of
any conversion of any such Loan to a Prime Rate Loan on a day
that is not the last day of the applicable Interest Period with
respect thereto, including interest or fees payable by the Agent
or a Lender to lenders of funds obtained by it in order to
maintain any such LIBOR Rate Loans.
Section 4.9. Interest During Event of Default; Late
Charges. During the continuance of an Event of Default,
outstanding principal and (to the extent permitted by applicable
law) interest on the Loans and all other amounts payable
hereunder or under any of the other Loan Documents shall bear
interest at a rate per annum equal to four percent (4%) above the
interest rate that would otherwise be applicable until such
amount shall be paid in full (after as well as before judgment).
In addition, the Borrowers shall pay on demand a late charge
equal to five percent (5%) of any amount of principal and/or
interest charges on the Loans which is not paid within ten (10)
days of the date when due.
Section 4.10. Concerning Joint and Several Liability of the
Borrowers.
(a) Each of the Borrowers is accepting joint and several
liability hereunder and under the other Loan Documents in
consideration of the financial accommodations to be provided by
the Lenders under this Agreement, for the mutual benefit,
directly and indirectly, of each of the Borrowers and in
consideration of the undertakings of each other Borrower to
accept joint and several liability for the Obligations.
(b) Each of the Borrowers, jointly and severally, hereby
irrevocably and unconditionally accepts, not merely as a surety
but also as a co-debtor, joint and several liability with the
other Borrowers, with respect to the payment and performance of
all of the Obligations (including, without limitation, any
Obligations arising under this Section 4.10), it being the
intention of the parties hereto that all the Obligations shall be
the joint and several Obligations of each of the Borrowers
without preferences or distinction among them.
(c) If and to the extent that any of the Borrowers shall
fail to make any payment with respect to any of the Obligations
as and when due or to perform any of the Obligations in
accordance with the terms thereof, then in each such event the
other Borrowers will make such payment with respect to, or
perform, such Obligation.
(d) The Obligations of each of the Borrowers under the
provisions of this Section 4.10 constitute full recourse
Obligations of each of the Borrowers enforceable against each
such Person to the full extent of its properties and assets,
irrespective of the validity, regularity or enforceability of
this Agreement or any other circumstance whatsoever.
(e) Except as otherwise expressly provided in this
Agreement, each of the Borrowers hereby waives notice of
acceptance of its joint and several liability, notice of any
Loans made under this Agreement, notice of any action at any time
taken or omitted by the Lenders under or in respect of any of the
Obligations, and, generally, to the extent permitted by
applicable law, all demands, notices and other formalities of
every kind in connection with this Agreement. Each of the
Borrowers hereby assents to, and waives notice of, any extension
or postponement of the time for the payment of any of the
Obligations, the acceptance of any payment of any of the
Obligations, the acceptance of any partial payment thereon, any
waiver, consent or other action or acquiescence by the Lenders at
any time or times in respect of any default by any of the
Borrowers in the performance or satisfaction of any term,
covenant, condition or provision of this Agreement, any and all
other indulgences whatsoever by the Lenders in respect of any of
the Obligations, and the taking, addition, substitution or
release, in whole or in part, at any time or times, of any
security for any of the Obligations or the addition, substitution
or release, in whole or in part, of any of the Borrowers.
Without limiting the generality of the foregoing, each of the
Borrowers assents to any other action or delay in acting or
failure to act on the part of the Lenders with respect to the
failure by any of the Borrowers to comply with any of its
respective Obligations, including, without limitation, any
failure strictly or diligently to assert any right or to pursue
any remedy or to comply fully with applicable laws or regulations
thereunder, which might, but for the provisions of this
Section 4.10, afford grounds for terminating, discharging or
relieving any of the Borrowers, in whole or in part, from any of
its Obligations under this Section 4.10, it being the intention
of each of the Borrowers that, so long as any of the Obligations
hereunder remain unsatisfied, the Obligations of such Borrowers
under this Section 4.10 shall not be discharged except by
performance and then only to the extent of such performance. The
Obligations of each of the Borrowers under this Section 4.10
shall not be diminished or rendered unenforceable by any winding
up, reorganization, arrangement, liquidation, re- construction or
similar proceeding with respect to any of the Borrowers or the
Lenders. The joint and several liability of the Borrowers
hereunder shall continue in full force and effect notwithstanding
any absorption, merger, amalgamation or any other change
whatsoever in the name, membership, constitution or place of
formation of any of the Borrowers or the Lenders.
(f) The provisions of this Section 4.10 are made for the
benefit of the Lenders and their successors and assigns, and may
be enforced against any or all of the Borrowers as often as
occasion therefor may arise and without requirement on the part
of the Lenders first to marshal any of their claims or to
exercise any of their rights against any other Borrower or to
exhaust any remedies available to them against any other Borrower
or to resort to any other source or means of obtaining payment of
any of the Obligations hereunder or to elect any other remedy.
The provisions of this Section 4.10 shall remain in effect until
all of the Obligations shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part
thereof, made in respect of any of the Obligations, is rescinded
or must otherwise be restored or returned by the Lenders upon the
insolvency, bankruptcy or reorganization of any of the Borrowers,
or otherwise, the provisions of this Section 4.10 will forthwith
be reinstated in effect, as though such payment had not been
made.
Section 4.11 Interest Limitation. All agreements between
the Borrowers and the Guarantors, on the one hand, and the
Lenders and the Agent, on the other hand, are hereby expressly
limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the Loans or otherwise,
shall the amount paid or agreed to be paid to the Lenders for the
use or the forbearance of the Loans exceed the maximum
permissible under applicable law. As used herein, the term
"applicable law" shall mean the law in effect as of the date
hereof; provided, however that in the event there is a change in
the law which results in a higher permissible rate of interest,
then this Agreement and other Loan Document shall be governed by
such new law as of its effective date. In this regard, it is
expressly agreed that it is the intent of the Borrowers and the
Guarantors and the Lenders and the Agent in the execution,
delivery and acceptance of this Agreement and the other Loan
Documents to contract in strict compliance with the laws of the
State of New York from time to time in effect. If, under or from
any circumstances whatsoever, fulfillment of any provision hereof
or of any of the other Loan Documents at the time of performance
of such provision shall involve transcending the limit of such
validity prescribed by applicable law, then the obligation to be
fulfilled shall automatically be reduced to the limits of such
validity, and if under or from any circumstances whatsoever any
Lender should ever receive as interest any amount which would
exceed the highest lawful rate, such amount which would be
excessive interest shall be applied to the reduction of the
principal balance of the Loans and not to the payment of
interest. This provision shall control every other provision of
all agreements between the Borrowers and the Guarantors and the
Lenders and the Agent.
Section 4.12. Reasonable Efforts to Mitigate.
Each Lender agrees that as promptly as practicable after it
becomes aware of the occurrence of an event or the existence of a
condition that would cause it to be affected under Section 4.4,
4.5 or 4.6, such Lender will give notice thereof to the Borrower
Representative, with a copy to the Agent and, to the extent so
requested by the Borrower Representative and not inconsistent
with regulatory policies applicable to such Lender, such Lender
shall use reasonable efforts and take such actions as are
reasonably appropriate (including the changing of its lending
office or branch) if as a result thereof the additional moneys
which would otherwise be required to be paid to such Lender
pursuant to such sections would be reduced other than for de
minimus amounts, or the illegality or other adverse circumstances
which would otherwise require a conversion of such Loans or
result in the inability to make such Loans pursuant to such
sections would cease to exist, and in each case if, as determined
by such Lender in its sole discretion, the taking such actions
would not adversely affect such Loans.
Section 4.13. Replacement of Lenders. If any Lender (an
"Affected Lender") (i) makes demand upon the Borrowers for (or if
the Borrowers are otherwise required to pay) amounts pursuant to
Section 4.4, 4.5 or 4.6, or (ii) is unable to make or maintain
LIBOR Rate Loans as a result of a condition described in
Section 4.4, the Borrower Representative may, within 90 days of
receipt of such demand, notice (or the occurrence of such other
event causing the Borrowers to be required to pay such
compensation or causing Section 4.4 to be applicable) as the case
may be, by notice (a "Replacement Notice") in writing to the
Agent and such Affected Lender (A) request the Affected Lender to
cooperate with the Borrowers in obtaining a replacement lender
satisfactory to the Agent and the Borrowers (the "Replacement
Lender"); (B) request the non-Affected Lenders to acquire and
assume all of the Affected Lender's Loans and Commitment as
provided herein, but none of such Lenders shall be under an
obligation to do so; or (C) designate a Replacement Lender which
is an Eligible Assignee and is reasonably satisfactory to the
Agent other than when an Event of Default has occurred and is
continuing and absolutely satisfactory to the Agent when an Event
of Default has occurred and is continuing. If any satisfactory
Replacement Lender shall be obtained, and/or any of the
non-Affected Lenders shall agree to acquire and assume all of the
Affected Lender's Loans and Commitment, then such Affected Lender
shall assign, in accordance with Section 18, all of its
Commitment, Loans, Notes and other rights and obligations under
this Agreement and all other Loan Documents to such Replacement
Lender or non-Affected Lenders, as the case may be, in exchange
for payment of the principal amount so assigned and all interest
and fees accrued on the amount so assigned, plus all other
Obligations then due and payable to the Affected Lender;
provided, however, that (x) such assignment shall be in
accordance with the provisions of Section 18, shall be without
recourse, representation or warranty and shall be on terms and
conditions reasonably satisfactory to such Affected Lender and
such Replacement Lender and/or non-Affected Lenders, as the case
may be, and (y) prior to any such assignment, the Borrowers shall
have paid to such Affected Lender all amounts properly demanded
and unreimbursed under Section 4.4, 4.5 and 4.8.
Section 5. GUARANTIES. Each of the Guarantors will
jointly and severally guaranty all of the Obligations pursuant to
its Guaranty. The Obligations are full recourse obligations of
each Borrower and each Guarantor, and all of the respective
assets and properties of each Borrower and each Guarantor shall
be available for the payment in full in cash and performance of
the Obligations. Other than during the continuance of a Default
or an Event of Default, at the request of the Borrower
Representative, the Guaranty of any Subsidiary Guarantor shall be
released by the Agent if and when all of the Real Estate owned by
such Subsidiary Guarantor shall cease to be Unencumbered
Properties pursuant to the terms of this Agreement.
Section 6. REPRESENTATIONS AND WARRANTIES. Each of the
Borrowers for itself and for each of the other Borrowers and for
each Guarantor insofar as any such statements relate to such
Guarantor represents and warrants to the Agent and the Lenders
all of the statements contained in this Section 6.
Section 6.1. Authority; Etc.
(a) Organization; Good Standing.
(i) SALP is a limited partnership duly organized,
validly existing and in good standing under the laws of
the State of Delaware; Holdings is a corporation duly
organized, validly existing and in good standing under
the laws of the State of Delaware; each of SALP and
Holdings has all requisite partnership or corporate, as
the case may be, power to own its respective properties
and conduct its respective business as now conducted
and as presently contemplated; and each of SALP and
Holdings is in good standing as a foreign entity and is
duly authorized to do business in the jurisdictions
where the Real Estate owned by it is located
and in each other jurisdiction where such qualification
is necessary except where a failure to be so qualified
in such other jurisdiction would not have a materially
adverse effect on any of their respective businesses,
assets or financial conditions.
(ii) Sovran is a corporation duly organized,
validly existing and in good standing under the laws of
the State of Maryland; each Subsidiary of Sovran is
duly organized, validly existing and in good standing
as a corporation or partnership or other entity, as the
case may be, under the laws of the state of its
organization; Sovran and each of its Subsidiaries has
all requisite corporate or partnership or other entity,
as the case may be, power to own its respective
properties and conduct its respective business as now
conducted and as presently contemplated; and Sovran and
each of its Subsidiaries is in good standing as a
foreign entity and is duly authorized to do business in
the jurisdictions where such qualification is necessary
(including, as to Sovran, in the State of New York)
except where a failure to be so qualified in such other
jurisdiction would not have a materially adverse effect
on the business, assets or financial condition of
Sovran or such Subsidiary.
(iii) As to each subsequent Guarantor, a provision
similar, as applicable, to (a) (i) or (ii) above shall
be included in each such subsequent Guarantor's
Subsidiary Guaranty, and the Borrowers shall be deemed
to make for itself and on behalf of each such
subsequent Guarantor a representation and warranty as
to such provision regarding such subsequent Guarantor.
(b) Capitalization.
(i) The outstanding equity of SALP is comprised
of a general partner interest and limited partner
interests, all of which have been duly issued and are
outstanding and fully paid and non-assessable as set
forth in Schedule 6.1(b) hereto. All of the issued and
outstanding general partner interests of SALP are owned
and held of record by Holdings; all of the limited
partner interests of SALP are owned and held of record
as set forth in Schedule 6.1(b) hereto. Except as set
forth in the Agreement of Limited Partnership of SALP
or as disclosed in Schedule 6.1(b) hereto, as of the
Closing Date there are no outstanding securities or
agreements exchangeable for or convertible into or
carrying any rights to acquire any equity interests in
SALP. Except as disclosed in Schedule 6.1(b), there
are no outstanding commitments, options, warrants,
calls or other agreements (whether written or oral)
binding on SALP or Sovran which require or could
require SALP or Sovran to sell, grant, transfer,
assign, mortgage, pledge or otherwise dispose of any
equity interests of SALP. No general partnership
interests of SALP are subject to any restrictions on
transfer or any partner agreements, voting agreements,
trust deeds, irrevocable proxies, or any other similar
agreements or interests (whether written or oral).
(ii) As of the Closing Date, the authorized
capital stock of, or any other equity interests in
Holdings are as set forth in Schedule 6.1(b), and the
issued and outstanding voting and non-voting shares of
the common stock of Holdings, and all of the other
equity interests in Holdings, all of which have been
duly issued and are outstanding and fully paid and
non-assessable, are owned and held of record by Sovran.
Except as disclosed in Schedule 6.1(b), as of the
Closing Date there are no outstanding securities or
agreements exchangeable for or convertible into or
carrying any rights to acquire any equity interests in
Holdings, and there are no outstanding options,
warrants, or other similar rights to acquire any shares
of any class in the capital of or any other equity
interests in Holdings. As of the Closing Date there
are no outstanding commitments, options, warrants,
calls or other agreements or obligations (whether
written or oral) binding on Holdings to issue, sell,
grant, transfer, assign, mortgage, pledge or otherwise
dispose of any shares of any class in the capital of or
other equity interests in Holdings. No shares of, or
equity interests in Holdings held by Sovran are subject
to any restrictions on transfer pursuant to any of
Holding's applicable charter, by-laws or any
shareholder agreements, voting agreements, voting
trusts, trust agreements, trust deeds, irrevocable
proxies or any other similar agreements or instruments
(whether written or oral).
(c) Due Authorization. The execution, delivery and
performance of this Agreement and the other Loan Documents to
which any of the Borrowers or any of the Guarantors is or is to
become a party and the transactions contemplated hereby and
thereby (i) are within the authority of such Borrower and such
Guarantor, (ii) have been duly authorized by all necessary
proceedings on the part of such Borrower or such Guarantor and
any general partner or other controlling Person thereof, (iii) do
not conflict with or result in any breach or contravention of any
provision of law, statute, rule or regulation to which such
Borrower or such Guarantor is subject or any judgment, order,
writ, injunction, license or permit applicable to such Borrower
or such Guarantor, (iv) do not conflict with any provision of the
agreement of limited partnership, any certificate of limited
partnership, the charter documents or by-laws of such Borrower or
such Guarantor or any general partner or other controlling Person
thereof, and (v) do not contravene any provisions of, or
constitute a default, Default or Event of Default hereunder or a
failure to comply with any term, condition or provision of, any
other agreement, instrument, judgment, order, decree, permit,
license or undertaking binding upon or applicable to such
Borrower or such Guarantor or any of such Borrower's or such
Guarantor's properties (except for any such failure to comply
under any such other agreement, instrument, judgment, order,
decree, permit, license, or undertaking as would not materially
and adversely affect the condition (financial or otherwise),
properties, business or results of operations of any Borrower,
the Operating Subsidiaries or any Guarantor) or result in the
creation of any mortgage, pledge, security interest, lien,
encumbrance or charge upon any of the properties or assets of any
Borrower, the Operating Subsidiaries or any Guarantor.
(d) Enforceability. Each of the Loan Documents to which
any of the Borrowers or any of the Guarantors is a party has been
duly executed and delivered and constitutes the legal, valid and
binding obligations of each such Borrower and each such
Guarantor, as the case may be, subject only to applicable
bankruptcy, insolvency, reorganization, moratorium or other laws
relating to or affecting generally the enforcement of creditors'
rights and to the fact that the availability of the remedy of
specific performance or injunctive relief is subject to the
discretion of the court before which any proceeding therefor may
be brought.
Section 6.2. Governmental Approvals. The execution,
delivery and performance by each Borrower of this Agreement and
by each Borrower and each Guarantor of the other Loan Documents
to which such Borrower or such Guarantor is or is to become a
party and the transactions contemplated hereby and thereby do not
require (i) the approval or consent of any governmental agency or
authority other than those already obtained, or (ii) filing with
any governmental agency or authority, other than filings which
will be made with the SEC when and as required by law.
Section 6.3. Title to Properties; Leases.
The Borrowers, the Guarantors and their respective
Subsidiaries each has good title to all of its respective
properties, assets and rights of every name and nature purported
to be owned by it, including, without limitation, that:
(a) As of the Closing Date (with respect to Unencumbered
Properties designated as such on the Closing Date) or the date of
designation as an Unencumbered Property (with respect to
Unencumbered Properties acquired and/or designated as such after
the Closing Date), and in each case to the best of its knowledge
thereafter, a Borrower or (if after the Closing Date) a Guarantor
holds good and clear record and marketable fee simple title to
the Unencumbered Properties, subject to no rights of others,
including any mortgages, conditional sales agreements, title
retention agreements, liens or encumbrances, except for Permitted
Liens.
(b) Each of the Borrowers and each of the then Guarantors
will, as of the Closing Date, own all of the assets as reflected
in the financial statements of the Borrowers described in
Section 6.4 or acquired since the date of such financial
statements (except property and assets sold or otherwise disposed
of in the ordinary course of business since that date).
(c) Each of the direct or indirect interests of the
Borrowers or Holdings in any Partially-Owned Entity is set forth
on Schedule 6.3 hereto, including the type of entity in which the
interest is held, the percentage interest owned by such Borrower
or Holdings in such entity, the capacity in which such Borrower
or Holdings holds the interest, and such Borrower's or Holdings'
ownership interest therein.
Section 6.4. Financial Statements. The following
financial statements have been furnished to each of the Lenders:
(a) The audited consolidated balance sheet of Sovran and
its Subsidiaries (including, without limitation, SALP) as of
December 31, 1996 and their related consolidated income
statements for the fiscal year ended December 31, 1996 and the
unaudited consolidated balance sheet of Sovran and its
Subsidiaries as of September 30, 1997 and their related
consolidated income statements for the fiscal quarter then ended,
certified by the chief financial officer of Sovran. Such balance
sheet and income statements have been prepared in accordance with
GAAP and fairly present the financial condition of Sovran and its
Subsidiaries as of the close of business on the dates thereof and
the results of operations for the fiscal periods then ended.
There are no contingent liabilities of Sovran as of such dates
involving material amounts, known to the officers of the
Borrowers, not disclosed in said financial statements and the
related notes thereto.
(b) The SEC Filings.
Section 6.5 Fiscal Year. The Borrowers and their
respective Subsidiaries each has a fiscal year which is the
twelve months ending on December 31 of each calendar year.
Section 6.6. Franchises, Patents, Copyrights, Etc. Each
Borrower, each Guarantor and each of their respective
Subsidiaries possesses all franchises, patents, copyrights,
trademarks, trade names, licenses and permits, and rights in
respect of the foregoing, adequate for the conduct of their
respective businesses substantially as now conducted without
known conflict with any rights of others, including all Permits.
Section 6.7. Litigation. Except as stated on Schedule 6.7
there are no actions, suits, proceedings or investigations of any
kind pending or threatened against any Borrower, any Guarantor or
any of their respective Subsidiaries before any court, tribunal
or administrative agency or board that, if adversely determined,
might, either individually or in the aggregate, materially
adversely affect the properties, assets, financial condition or
business of such Borrower, such Guarantor or their respective
Subsidiaries or materially impair the right of such Borrower,
such Guarantor or their respective Subsidiaries to carry on
their respective businesses substantially as now conducted by
them, or result in any substantial liability not adequately
covered by insurance, or for which adequate reserves are not
maintained, as reflected in the applicable financial statements
of the Borrowers, or which question the validity of this
Agreement or any of the other Loan Documents, or any action taken
or to be taken pursuant hereto or thereto.
Section 6.8. No Materially Adverse Contracts, Etc. None
of any Borrower, any Guarantor or any of their respective
Subsidiaries is subject to any charter, corporate, partnership or
other legal restriction, or any judgment, decree, order, rule or
regulation that has or is expected in the future to have a
materially adverse effect on their respective businesses, assets
or financial conditions. None of any Borrower, any Guarantor or
any of their respective Subsidiaries is a party to any contract
or agreement that has or is expected, in the judgment of their
respective officers, to have any materially adverse effect on the
respective businesses of such Borrower, such Guarantor or any of
their respective Subsidiaries.
Section 6.9. Compliance With Other Instruments, Laws, Etc.
None of any Borrower, any Guarantor or any of their respective
Subsidiaries is in violation of any provision of its partnership
agreement, charter documents, bylaws or other organizational
documents, as the case may be, or any respective agreement or
instrument to which it may be subject or by which it or any of
its properties may be bound or any decree, order, judgment,
statute, license, rule or regulation, in any of the foregoing
cases in a manner that could result, individually or in the
aggregate, in the imposition of substantial penalties or
materially and adversely affect the financial condition,
properties or businesses of such Borrower, such Guarantor or any
of their respective Subsidiaries.
Section 6.10. Tax Status.
(a) (i) Each of the Borrowers, the Guarantors and their
respective Subsidiaries (A) has timely made or filed all federal,
state and local income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject,
(B) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and
by appropriate proceedings, and (C) has set aside on its books
provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports
or declarations apply, and (ii) there are no unpaid taxes in any
material amount claimed to be due by the taxing authority of any
jurisdiction, and the respective officers of the Borrowers and
the Guarantors and their respective Subsidiaries know of no basis
for any such claim.
(b) To the best of the Borrowers' knowledge, each
Partially-Owned Entity (i) has timely made or filed all federal,
state and local income and all other tax returns, reports and
declarations required by any jurisdiction to which it is subject,
(ii) has paid all taxes and other governmental assessments and
charges shown or determined to be due on such returns, reports
and declarations, except those being contested in good faith and
by appropriate proceedings, and (iii) has set aside on its books
provisions reasonably adequate for the payment of all taxes for
periods subsequent to the periods to which such returns, reports
or declarations apply. To the best of the Borrowers' knowledge,
except as otherwise disclosed in writing to the Agent, there are
no unpaid taxes in any material amount claimed to be due by the
taxing authority of any jurisdiction from any Partially-Owned
Entity, and the officers of the Borrowers know of no basis for
any such claim.
Section 6.11. No Event of Default; No Materially Adverse
Changes. No default, Default or Event of Default has occurred
and is continuing. Since September 30, 1997 there has occurred
no materially adverse change in the financial condition or
business of Sovran and its Subsidiaries or SALP and its
Subsidiaries as shown on or reflected in the consolidated balance
sheet of Sovran and its Subsidiaries as at September 30, 1997, or
the consolidated statement of income for the fiscal quarter then
ended, other than changes in the ordinary course of business that
have not had any materially adverse effect either individually or
in the aggregate on the business or financial condition or
properties of Sovran, SALP or any of their respective
Subsidiaries.
Section 6.12. Investment Company Acts. None of any
Borrower, any Guarantor or any of their respective Subsidiaries
is an "investment company", or an "affiliated company" or a
"principal underwriter" of an "investment company", as such terms
are defined in the Investment Company Act of 1940.
Section 6.13. Absence of UCC Financing Statements, Etc.
Except for Permitted Liens, as of the Closing Date there will be
no financing statement, security agreement, chattel mortgage,
real estate mortgage, equipment lease, financing lease, option,
encumbrance or other document filed or recorded with any filing
records, registry, or other public office, that purports to
cover, affect or give notice of any present or possible future
lien or encumbrance on, or security interest in, any Unencumbered
Property. Neither any Borrower nor any Guarantor has pledged or
granted any lien on or security interest in or otherwise
encumbered or transferred any of their respective interests in
any Subsidiary (including in the case of Sovran, its interests in
SALP, and in the case of any Borrower, its interests in the
Operating Subsidiaries) or in any Partially-Owned Entity.
Section 6.14. Absence of Liens. A Borrower or a Guarantor
is the owner of the Unencumbered Properties free from any lien,
security interest, encumbrance and any other claim or demand,
except for Permitted Liens.
Section 6.15. Certain Transactions. Except as set forth on
Schedule 6.15, none of the officers, partners, directors, or
employees of any Borrower or any Guarantor or any of their
respective Subsidiaries is presently a party to any transaction
with any Borrower, any Guarantor or any of their respective
Subsidiaries (other than for services as employees, officers and
directors), including any contract, agreement or other
arrangement providing for the furnishing of services to or by,
providing for rental of real or personal property to or from, or
otherwise requiring payments to or from any officer, partner,
director or such employee or, to the knowledge of the Borrowers,
any corporation, partnership, trust or other entity in which any
officer, partner, director, or any such employee or natural
Person related to such officer, partner, director or employee or
other Person in which such officer, partner, director or employee
has a direct or indirect beneficial interest has a substantial
interest or is an officer, director, trustee or partner.
Section 6.16. Employee Benefit Plans.
Section 6.16.1. In General.
Each Employee Benefit Plan and each Guaranteed Pension
Plan has been maintained and operated in compliance in all
material respects with the provisions of ERISA and, to the
extent applicable, the Code, including but not limited to
the provisions thereunder respecting prohibited transactions
and the bonding of fiduciaries and other persons handling
plan funds as required by Section 412 of ERISA. The
Borrowers have heretofore delivered to the Agent the most
recently completed annual report, Form 5500, with all
required attachments, and actuarial statement required to be
submitted under Section 103(d) of ERISA, with respect to
each Guaranteed Pension Plan.
Section 6.16.2. Terminability of Welfare Plans.
No Employee Benefit Plan, which is an employee welfare
benefit plan within the meaning of Section 3(1) or
Section 3(2)(B) of ERISA, provides benefit coverage
subsequent to termination of employment, except as required
by Title I, Part 6 of ERISA or the applicable state
insurance laws. The Borrowers may terminate each such Plan
at any time (or at any time subsequent to the expiration of
any applicable bargaining agreement) in the discretion of
the Borrowers without liability to any Person other than for
claims arising prior to termination.
Section 6.16.3. Guaranteed Pension Plans.
Each contribution required to be made to a Guaranteed
Pension Plan, whether required to be made to avoid the
incurrence of an accumulated funding deficiency, the notice
or lien provisions of Section 302(f) of ERISA, or otherwise,
has been timely made. No waiver of an accumulated funding
deficiency or extension of amortization periods has been
received with respect to any Guaranteed Pension Plan, and
neither any Borrower or any Guarantor nor any ERISA
Affiliate is obligated to or has posted security in
connection with an amendment to a Guaranteed Pension Plan
pursuant to Section 307 of ERISA or Section 401(a)(29) of
the Code. No liability to the PBGC (other than required
insurance premiums, all of which have been paid) has been
incurred by any Borrower or any Guarantor or any ERISA
Affiliate with respect to any Guaranteed Pension Plan and
there has not been any ERISA Reportable Event (other than an
ERISA Reportable Event as to which the requirement of 30
days notice has been waived), or any other event or
condition which presents a material risk of termination of
any Guaranteed Pension Plan by the PBGC. Based on the latest
valuation of each Guaranteed Pension Plan (which in each
case occurred within twelve months of the date of this
representation), and on the actuarial methods and
assumptions employed for that valuation, the aggregate
benefit liabilities of all such Guaranteed Pension Plans
within the meaning of Section 4001 of ERISA did not exceed
the aggregate value of the assets of all such Guaranteed
Pension Plans, disregarding for this purpose the benefit
liabilities and assets of any Guaranteed Pension Plan with
assets in excess of benefit liabilities, by more than
$500,000.
Section 6.16.4. Multiemployer Plans.
Neither any Borrower or any Guarantor nor any ERISA
Affiliate has incurred any material liability (including
secondary liability) to any Multiemployer Plan as a result
of a complete or partial withdrawal from such Multiemployer
Plan under Section 4201 of ERISA or as a result of a sale of
assets described in Section 4204 of ERISA. Neither any
Borrower nor any ERISA Affiliate has been notified that any
Multiemployer Plan is in reorganization or insolvent under
and within the meaning of Section 4241 or Section 4245 of
ERISA or is at risk of entering reorganization or becoming
insolvent, or that any Multiemployer Plan intends to
terminate or has been terminated under Section 4041A of
ERISA.
Section 6.17. Regulations U and X. The proceeds of the
Loans shall be used for the purposes described in Section 7.12.
No portion of any Loan is to be used for the purpose of
purchasing or carrying any "margin security" or "margin stock" as
such terms are used in Regulations U and X of the Board of
Governors of the Federal Reserve System, 12 C.F.R. Parts 221 and
224.
Section 6.18. Environmental Compliance. The Borrowers have
caused environmental assessments to be conducted and/or taken
other steps to investigate the past and present environmental
condition and usage of the Real Estate and the operations
conducted thereon. Based upon such assessments and/or
investigation, the Borrowers have determined that:
(a) None of any Borrower, any Guarantor, any of their
respective Subsidiaries or any operator of the Real Estate or any
portion thereof, or any operations thereon is in violation, or
alleged violation, of any judgment, decree, order, law, license,
rule or regulation pertaining to environmental matters, including
without limitation, those arising under the Resource Conservation
and Recovery Act ("RCRA"), the Comprehensive Environmental
Response, Compensation and Liability Act of 1980 as amended
("CERCLA"), the Superfund Amendments and Reauthorization Act of
1986 ("SARA"), the Federal Clean Water Act, the Federal Clean Air
Act, the Toxic Substances Control Act, or any state or local
statute, regulation, ordinance, order or decree relating to
health, safety or the environment (hereinafter "Environmental
Laws"), which violation or alleged violation has, or its
remediation would have, by itself or when aggregated with all
such other violations or alleged violations, a material adverse
effect on the environment or the business, assets or financial
condition of any Borrower, any Guarantor or any of their
respective Subsidiaries, or constitutes a Disqualifying
Environmental Event with respect to any Unencumbered Property.
(b) None of any Borrower, any Guarantor or any of their
respective Subsidiaries has received notice from any third party,
including, without limitation, any federal, state or local
governmental authority, (i) that it has been identified by the
United States Environmental Protection Agency ("EPA) as a
potentially responsible party under CERCLA with respect to a site
listed on the National Priorities List, 40 C.F.R. Part 300
Appendix B (1986), (ii) that any hazardous waste, as defined by
42 U.S.C. Section 6903(5), any hazardous substances as defined by
42 U.S.C. Section 9601(14), any pollutant or contaminant as
defined by 42 U.S.C. Section 9601(33) or any toxic substances,
oil or hazardous materials or other chemicals or substances
regulated by any Environmental Laws ("Hazardous Substances")
which it has generated, transported or disposed of has been found
at any site at which a federal, state or local agency or other
third party has conducted or has ordered that any Borrower, any
Guarantor or any of their respective Subsidiaries conduct a
remedial investigation, removal or other response action pursuant
to any Environmental Law, or (iii) that it is or shall be a named
party to any claim, action, cause of action, complaint, or legal
or administrative proceeding (in each case, contingent or
otherwise) arising out of any third party's incurrence of costs,
expenses, losses or damages of any kind whatsoever in connection
with the release of Hazardous Substances; which event described
in any such notice would have a material adverse effect on the
business, assets or financial condition of any Borrower, any
Guarantor or any of their respective Subsidiaries, or constitutes
a Disqualifying Environmental Event with respect to any
Unencumbered Property.
(c) Except as set forth on Schedule 6.18, (i) no portion of
the Real Estate has been used for the handling, processing,
storage or disposal of Hazardous Substances except in accordance
with applicable Environmental Laws; and no underground tank or
other underground storage receptacle for Hazardous Substances is
located on any portion of any Real Estate except in accordance
with applicable Environmental Laws, (ii) in the course of any
activities conducted by the Borrowers, the Guarantors, their
respective Subsidiaries or the operators of their respective
properties, or any ground or space tenants on any Real Estate, no
Hazardous Substances have been generated or are being used on
such Real Estate except in accordance with applicable
Environmental Laws, (iii) there has been no present or past
releasing, spilling, leaking, pumping, pouring, emitting,
emptying, discharging, injecting, escaping, disposing or dumping
(a "Release") or threatened Release of Hazardous Substances on,
upon, into or from the Real Estate, (iv) there have been no
Releases on, upon, from or into any real property in the vicinity
of any of the Real Estate which, through soil or groundwater
contamination, may have come to be located on such Real Estate,
and (v) any Hazardous Substances that have been generated on any
of the Real Estate during ownership thereof by a Borrower or a
Guarantor or any of their respective Subsidiaries have been
transported off-site only by carriers having an identification
number issued by the EPA, treated or disposed of only by
treatment or disposal facilities maintaining valid permits as
required under applicable Environmental Laws, which transporters
and facilities have been and are, to the best of the Borrowers'
knowledge, operating in compliance with such permits and
applicable Environmental Laws; any of which events described in
clauses (i) through (v) above would have a material adverse
effect on the business, assets or financial condition of any
Borrower, any Guarantor or any of their respective Subsidiaries,
or constitutes a Disqualifying Environmental Event with respect
to any Unencumbered Property. Notwithstanding that the
representations contained herein are limited to the knowledge of
the Borrowers, any such limitation shall not affect the covenants
specified in Section 7.11 or elsewhere in this Agreement.
(d) None of any Borrower, any Guarantor or any of the Real
Estate is subject to any applicable Environmental Law requiring
the performance of Hazardous Substances site assessments, or the
removal or remediation of Hazardous Substances, or the giving of
notice to any governmental agency or the recording or delivery to
other Persons of an environmental disclosure document or
statement, by virtue of the transactions set forth herein and
contemplated hereby, or as a condition to the effectiveness of
any other transactions contemplated hereby.
Section 6.19. Subsidiaries. Schedule 6.19 sets forth all
of the respective Subsidiaries of Sovran or SALP, and Schedule
6.19 will be updated to reflect any subsequent Guarantor and its
Subsidiaries, if any.
Section 6.20. Loan Documents. All of the representations
and warranties of the Borrowers and the Guarantors made in this
Agreement and in the other Loan Documents or any document or
instrument delivered to the Agent or the Lenders pursuant to or
in connection with any of such Loan Documents are true and
correct in all material respects and do not include any untrue
statement of a material fact or omit to state a material fact
required to be stated or necessary to make such representations
and warranties not materially misleading.
Section 6.21. REIT Status. Sovran has not taken any action
that would prevent it from maintaining its qualification as a
REIT for its tax year ended December 31, 1997 or from maintaining
such qualification at all times during the term of the Loans.
Sovran is not a "pension held REIT" within the meaning of
Section 856(h)(3)(D) of the Code.
Section 6.22. Subsequent Guarantors. The foregoing
representations and warranties in Section 6.3 through
Section 6.20, as the same are true, correct and applicable to
Guarantors existing on the Closing Date, shall be true, correct
and applicable to each subsequent Guarantor.
Section 6.23. Trading Status. No security of Sovran traded
on the New York Stock Exchange has been suspended from trading.
Section 6.24. Title Policies. To the best of the
Borrowers' knowledge, except as set forth on Schedule 6.24
hereto, each of the Title Policies delivered to the Agent
pursuant to Section 10.5 with respect to an Unencumbered Property
remains true and correct in all material respects as of the
Closing Date.
Section 7. AFFIRMATIVE COVENANTS OF THE BORROWERS AND
THE GUARANTORS. Each of the Borrowers for itself and on behalf
of each of the Guarantors (if and to the extent expressly
included in Subsections contained in this Section) covenants and
agrees that, so long as any Loan or Note is outstanding or the
Lenders have any obligation to make any Loans:
Section 7.1. Punctual Payment. The Borrowers will duly
and punctually pay or cause to be paid the principal and interest
on the Loans and all interest, fees, charges and other amounts
provided for in this Agreement and the other Loan Documents, all
in accordance with the terms of this Agreement and the Notes, and
the other Loan Documents.
Section 7.2. Maintenance of Office. Each of the Borrowers
and the Guarantors will maintain its chief executive office in
Williamsville, New York, or at such other place in the contiguous
United States of America as each of them shall designate upon
written notice to the Agent to be delivered within five (5) days
of such change, where notices, presentations and demands to or
upon the Borrowers and the Guarantors, as the case may be, in
respect of the Loan Documents may be given or made.
Section 7.3. Records and Accounts. Each of the Borrowers
and the Guarantors will (a) keep, and cause each of its
Subsidiaries to keep, true and accurate records and books of
account in which full, true and correct entries will be made in
accordance with GAAP, (b) maintain adequate accounts and reserves
for all taxes (including income taxes), contingencies,
depreciation and amortization of its properties and the
properties of its Subsidiaries and (c) at all times engage Ernst
& Young LLP or other Accountants as the independent certified
public accountants of Sovran, SALP and their respective
Subsidiaries and will not permit more than thirty (30) days to
elapse between the cessation of such firm's (or any successor
firm's) engagement as the independent certified public
accountants of Sovran, SALP and their respective Subsidiaries and
the appointment in such capacity of a successor firm as
Accountants.
Section 7.4. Financial Statements, Certificates and
Information. The Borrowers will deliver to the Agent:
(a) as soon as practicable, but in any event not later than
ninety (90) days after the end of each of its fiscal years:
(i) in the case of SALP, if prepared, the audited
consolidated balance sheet of SALP and its subsidiaries
at the end of such year, and the related audited
consolidated statements of income, funds available for
distribution and cash flows for the year then ended, in
each case (except for cash flow statements) with
supplemental consolidating schedules provided by SALP;
and
(ii) in the case of Sovran, the audited consolidated
and consolidating (for Subsidiaries which own Real
Estate, if any Subsidiary becomes the owner of Real
Estate pursuant to Section 7.6 or Section 7.7 hereof)
balance sheet of Sovran and its subsidiaries
(including, without limitation, SALP and its
subsidiaries) at the end of such year, and the related
audited consolidated and consolidating (for
Subsidiaries which own Real Estate, if any Subsidiary
becomes the owner of Real Estate pursuant to
Section 7.6 or Section 7.7 hereof) statements of
income, funds available for distribution, and cash
flows for the year then ended;
each setting forth in comparative form the figures for the
previous fiscal year and all such statements to be in reasonable
detail, prepared in accordance with GAAP, and, in each case,
accompanied by an auditor's report prepared without qualification
by the Accountants, together with a written statement from such
Accountants to the effect that they have read a copy of this
Agreement, and that, in making the examination necessary to said
certification, they have obtained no knowledge of any default,
Default, Event of Default or of any facts or circumstances that
would cause Sovran not to continue to qualify as a REIT for
federal income tax purposes, or, if such accountants shall have
obtained knowledge of any then existing default, Default, Event
of Default or such facts or circumstances, they shall make
disclosure thereof in such statement;
(b) as soon as practicable, but in any event not later than
forty-five (45) days after the end of each of its fiscal
quarters:
(i) in the case of SALP, if prepared, copies of the
unaudited consolidated balance sheet of SALP and its
subsidiaries as at the end of such quarter, and the
related unaudited consolidated statements of income,
funds available for distribution and cash flows for the
portion of SALP's fiscal year then elapsed, with
supplemental consolidating schedules (except with
respect to cash flow statements) provided by SALP; and
(ii) in the case of Sovran, copies of the unaudited
consolidated and consolidating (for Subsidiaries which
own Real Estate, if any Subsidiary becomes the owner of
Real Estate pursuant to Section 7.6 or Section 7.7
hereof) balance sheet of Sovran and its subsidiaries
(including, without limitation, SALP and its
subsidiaries) as at the end of such quarter, and the
related unaudited consolidated and consolidating (for
Subsidiaries which own Real Estate, if any Subsidiary
becomes the owner of Real Estate pursuant to
Section 7.6 or Section 7.7 hereof) statements of
income, funds available for distribution and cash flows
for the portion of Sovran's fiscal year then elapsed;
all in reasonable detail and prepared in accordance with GAAP,
together with a certification by the principal financial officer
of SALP or Sovran, as applicable, that the information contained
in such financial statements fairly presents the financial
position of SALP or Sovran (as the case may be) and its
subsidiaries on the date thereof (subject to year-end
adjustments);
(c) simultaneously with the delivery of the financial
statements referred to in subsections (a) and (b) above, a
statement in the form of Exhibit D hereto signed by the chief
financial officer of SALP or Sovran, as applicable, and (if
applicable) reconciliations to reflect changes in GAAP since
September 30, 1997; and, in the case of Sovran, setting forth in
reasonable detail computations evidencing compliance with the
covenants contained in Section 9 hereof;
(d) promptly as they become available, a copy of each
report (including any so-called management letters) submitted to
any Borrower or any Guarantor or any of their respective
subsidiaries by the Accountants in connection with each annual
audit of the books of any Borrower or any Guarantor or such
subsidiary by such Accountants or in connection with any interim
audit thereof pertaining to any phase of the business of any
Borrower or any Guarantor or any such subsidiary;
(e) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature sent to the holders
of any Indebtedness of any Borrower or any Guarantor (other than
the Loans) for borrowed money, to the extent that the information
or disclosure contained in such material refers to or could
reasonably be expected to have a material adverse effect on the
business, assets, financial condition or prospects, or operations
of any Borrower or any Guarantor;
(f) contemporaneously with the filing or mailing thereof,
copies of all material of a financial nature filed with the SEC
or sent to the stockholders of Sovran;
(g) as soon as practicable, but in any event not later than
ninety (90) days after the end of each fiscal year of Sovran,
copies of the Form 10-K statement filed by Sovran with the SEC
for such fiscal year, and as soon as practicable, but in any
event not later than forty-five (45) days after the end of each
fiscal quarter of Sovran, copies of the Form 10-Q statement filed
by Sovran with the SEC for such fiscal quarter; and
(h) from time to time such other financial data and
information about the Borrowers, the Guarantors, their respective
Subsidiaries, the Real Estate and the Partially-Owned Entities
which is prepared by such Person in the normal course of its
business or is required for securities and tax law compliance as
the Agent or any Lender may reasonably request, including without
limitation occupancy information, existing environmental reports,
and insurance certificates with respect to the Real Estate
(including the Unencumbered Properties) and tax returns.
Section 7.5. Notices.
(a) Defaults. Each Borrower will, and will cause each
Guarantor, as applicable, to, promptly notify the Agent in
writing of the occurrence of any default, Default or Event of
Default. If any Person shall give any notice or take any other
action in respect of (x) a claimed default (whether or not
constituting a Default or an Event of Default) under this
Agreement or (y) a claimed default by any Borrower, any Guarantor
or any of their respective Subsidiaries, as applicable, under any
note, evidence of Indebtedness, indenture or other obligation to
which or with respect to which any of them is a party or obligor,
whether as principal, guarantor or surety, and such default would
permit the holder of such note or obligation or other evidence of
Indebtedness to accelerate the maturity thereof or otherwise
cause the entire Indebtedness to become due, such Borrower or
such Guarantor, as the case may be, shall forthwith give written
notice thereof to the Agent, describing the notice or action and
the nature of the claimed failure to comply.
(b) Environmental Events. Each Borrower will, and will
cause each Guarantor to, promptly give notice in writing to the
Agent (i) upon such Borrower's or such Guarantor's obtaining
knowledge of any material violation of any Environmental Law
regarding any Real Estate or such Borrower's or such Guarantor's
operations or the operations of any of their Subsidiaries, (ii)
upon such Borrower's or such Guarantor's obtaining knowledge of
any known Release of any Hazardous Substance at, from, or into
any Real Estate which it reports in writing or is reportable by
it in writing to any governmental authority and which is material
in amount or nature or which could materially affect the value of
such Real Estate, (iii) upon such Borrower's or such Guarantor's
receipt of any notice of material violation of any Environmental
Laws or of any material Release of Hazardous Substances in
violation of any Environmental Laws or any matter that may be a
Disqualifying Environmental Event, including a notice or claim of
liability or potential responsibility from any third party
(including without limitation any federal, state or local
governmental officials) and including notice of any formal
inquiry, proceeding, demand, investigation or other action with
regard to (A) such Borrower's or such Guarantor's or any other
Person's operation of any Real Estate, (B) contamination on, from
or into any Real Estate, or (C) investigation or remediation of
off-site locations at which such Borrower or such Guarantor or
any of its predecessors are alleged to have directly or
indirectly disposed of Hazardous Substances, or (iv) upon such
Borrower's or such Guarantor's obtaining knowledge that any
expense or loss has been incurred by such governmental authority
in connection with the assessment, containment, removal or
remediation of any Hazardous Substances with respect to which
such Borrower or such Guarantor or any Partially-Owned Entity may
be liable or for which a lien may be imposed on any Real Estate;
any of which events described in clauses (i) through (iv) above
would have a material adverse effect on the business, assets or
financial condition of any Borrower, any Guarantor or any of
their respective Subsidiaries, or constitutes a Disqualifying
Environmental Event with respect to any Unencumbered Property.
(c) Notification of Claims against Unencumbered Properties.
Each Borrower will, and will cause each Guarantor to, promptly
upon becoming aware thereof, notify the Agent in writing of any
setoff, claims, withholdings or other defenses to which any of
the Unencumbered Properties are subject, which (i) would have a
material adverse effect on (x) the business, assets or financial
condition of any Borrower, any Guarantor or any of their
respective Subsidiaries, or (y) the value of such Unencumbered
Property, or (ii) with respect to such Unencumbered Property,
constitute a Disqualifying Environmental Event, a Disqualifying
Legal Event, a Disqualifying Building Event or a Lien which is
not a Permitted Lien.
(d) Notice of Litigation and Judgments. Each Borrower
will, and will cause each Guarantor to, and the Borrowers will
cause each of their respective Subsidiaries to, give notice to
the Agent in writing within ten (10) days of becoming aware of
any litigation or proceedings threatened in writing or any
pending litigation and proceedings an adverse determination in
which could materially affect any Borrower, any Guarantor or any
of their respective Subsidiaries or any Unencumbered Property or
to which any Borrower, any Guarantor or any of their respective
Subsidiaries is or is to become a party involving an uninsured
claim against any Borrower, any Guarantor or any of their
respective Subsidiaries that could reasonably be expected to have
a materially adverse effect on such Borrower or such Guarantor or
their respective properties, business, assets, financial
condition or prospects or on the value or operation of the
Unencumbered Properties and stating the nature and status of such
litigation or proceedings. Each Borrower will, and will cause
each of the Guarantors and the Subsidiaries to, give notice to
the Agent, in writing, in form and detail reasonably satisfactory
to the Agent, within ten (10) days of any judgment not covered by
insurance, final or otherwise, against any Borrower, any
Guarantor or any of their Subsidiaries in an amount in excess of
$100,000.
(e) Acquisition of Real Estate. The Borrower
Representative shall notify the Agent in writing within seven (7)
days of the acquisition of any Real Estate by any Borrower, any
Guarantor, any of their respective Subsidiaries or any
Partially-Owned Entity (whether or not such acquisition was made
with proceeds of the Loans), which notice shall include, with
respect to such Real Estate, its owner (if other than SALP), its
address, a brief description, a summary of occupancy levels, a
proforma and historic (if available) income statement and a
summary of the key business terms of such acquisition (including
sources and uses of funds for such acquisition), a summary of the
principal terms of any financing for such Real Estate, and a
statement as to whether such Real Estate qualifies as an
Unencumbered Property.
Section 7.6. Existence of SALP, Holdings and Subsidiary
Guarantors; Maintenance of Properties. SALP for itself and for
Holdings and each Subsidiary Guarantor (insofar as any such
statements relate to Holdings or such Subsidiary Guarantor) will
do or cause to be done all things necessary to, and shall,
preserve and keep in full force and effect its existence as a
limited partnership, corporation or another legally constituted
entity, and will do or cause to be done all things necessary to
preserve and keep in full force all of its rights and franchises
and those of its Subsidiaries, and will not, and will not cause
or permit any of its Subsidiaries to, convert to a limited
liability company or a limited liability partnership. SALP shall
be the owner of substantially all of the Real Estate owned by the
Borrowers and their respective Subsidiaries and shall not permit
any Subsidiary of any Borrower to own any Real Estate without the
prior written consent of the Required Lenders, and then only in
specific circumstances outside of the ordinary course of
business. In any such case, such Subsidiary shall be
wholly-owned by Sovran or SALP and shall become a Subsidiary
Guarantor. SALP (a) will cause all necessary repairs, renewals,
replacements, betterments and improvements to be made to all Real
Estate owned or controlled by it or by any of its Subsidiaries or
any Subsidiary Guarantor, all as in the judgment of SALP or such
Subsidiary or such Subsidiary Guarantor may be necessary so that
the business carried on in connection therewith may be properly
conducted at all times, subject to the terms of the applicable
Leases and partnership agreements or other entity charter
documents, (b) will cause all of its other properties and those
of its Subsidiaries and the Subsidiary Guarantors used or useful
in the conduct of its business or the business of its
Subsidiaries or such Subsidiary Guarantor to be maintained and
kept in good condition, repair and working order and supplied
with all necessary equipment, and (c) will, and will cause each
of its Subsidiaries and each Subsidiary Guarantor to, continue to
engage exclusively in the business of owning and operating self
storage facilities, which self storage facilities shall be known
primarily as "Uncle BoB's Self Storage"; provided that nothing in
this Section 7.6 shall prevent any Borrower from discontinuing
the operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the
judgment of SALP, desirable in the conduct of its or their
business and such discontinuance does not cause a Default or an
Event of Default hereunder and does not in the aggregate
materially adversely affect the business of the Borrowers and
their respective Subsidiaries on a consolidated basis. Holdings
shall at all times be a wholly-owned Subsidiary of Sovran and the
sole general partner of SALP.
Section 7.7. Existence of Sovran; Maintenance of REIT
Status of Sovran; Maintenance of Properties. Sovran will do or
cause to be done all things necessary to preserve and keep in
full force and effect its existence as a Maryland corporation.
Sovran will at all times maintain its status as a REIT and not to
take any action which could lead to its disqualification as a
REIT. Sovran shall at all times maintain its listing on the New
York Stock Exchange. Sovran will continue to operate as a fully-
integrated, self-administered and self-managed real estate
investment trust which, together with its Subsidiaries
(including, without limitation SALP) owns and operates an
improved property portfolio comprised exclusively of self-storage
facilities. Sovran will not engage in any business other than
the business of acting as a REIT and serving as a limited partner
of SALP and as a member, partner or stockholder of other Persons
as permitted by this Agreement. Sovran shall conduct all or
substantially all of its business operations through SALP, and
shall not own real estate assets outside of its interests in
SALP. Sovran shall cause SALP to own substantially all of the
Real Estate owned by the Borrowers and their respective
Subsidiaries and shall not permit any Subsidiary of any Borrower
to become the owner of any Real Estate without the prior written
consent of the Required Lenders, and then only in specific
circumstances outside of the ordinary course of business. In any
such case, such Subsidiary shall be wholly-owned by Sovran or
SALP and shall become a Subsidiary Guarantor. Sovran shall do or
cause to be done all things necessary to preserve and keep in
full force all of its rights and franchises and those of its
Subsidiaries. Sovran shall (a) cause all of its properties and
those of its Subsidiaries used or useful in the conduct of its
business or the business of its Subsidiaries to be maintained and
kept in good condition, repair and working order and supplied
with all necessary equipment, (b) cause to be made all necessary
repairs, renewals, replacements, betterments and improvements
thereof, all as in the judgment of Sovran may be necessary so
that the business carried on in connection therewith may be
properly and advantageously conducted at all times, and (c) cause
SALP and each of its Subsidiaries to continue to engage
exclusively in the business of owning and operating self storage
facilities, which self-storage facilities shall be known
primarily as "Uncle BoB's Self Storage"; provided that nothing in
this Section 7.7 shall prevent Sovran from discontinuing the
operation and maintenance of any of its properties or any of
those of its Subsidiaries if such discontinuance is, in the
judgment of Sovran, desirable in the conduct of its or their
business and such discontinuance does not cause a Default or an
Event of Default hereunder and does not in the aggregate
materially adversely affect the business of Sovran and its
Subsidiaries on a consolidated basis.
Section 7.8. Insurance. Each Borrower will, and will
cause each Guarantor to, maintain with respect to its properties,
and will cause each of its Subsidiaries to maintain with
financially sound and reputable insurers, insurance with respect
to such properties and its business against such casualties and
contingencies as shall be in accordance with the general
practices of businesses having similar operations and real estate
portfolios in similar geographic areas and in amounts, containing
such terms, in such forms and for such periods as may be
reasonable and prudent.
Section 7.9. Taxes. Each Borrower will, and will cause
each Guarantor to, pay or cause to be paid real estate taxes,
other taxes, assessments and other governmental charges against
the Real Estate before the same become delinquent and will duly
pay and discharge, or cause to be paid and discharged, before the
same shall become overdue, all taxes, assessments and other
governmental charges imposed upon its sales and activities, or
any part thereof, or upon the income or profits therefrom, as
well as all claims for labor, materials, or supplies that if
unpaid might by law become a lien or charge upon any of the Real
Estate; provided that any such tax, assessment, charge, levy or
claim need not be paid if the validity or amount thereof shall
currently be contested in good faith by appropriate proceedings
and if such Borrower or such Guarantor shall have set aside on
its books adequate reserves with respect thereto; and provided
further that such Borrower or such Guarantor will pay all such
taxes, assessments, charges, levies or claims forthwith upon the
commencement of proceedings to foreclose any lien that may have
attached as security therefor. If requested by the Agent, the
Borrowers will provide evidence of the payment of real estate
taxes, other taxes, assessments and other governmental charges
against the Real Estate in the form of receipted tax bills or
other form reasonably acceptable to the Agent.
Section 7.10. Inspection of Properties and Books. Each
Borrower will, and will cause each Guarantor to, permit the
Lenders, through the Agent or any of the Lenders' other
designated representatives, to visit and inspect any of the
properties of any Borrower, any Guarantor or any of their
respective Subsidiaries, to examine the books of account of the
Borrowers, the Guarantors and their respective Subsidiaries (and
to make copies thereof and extracts therefrom) and to discuss the
affairs, finances and accounts of the Borrowers, the Guarantors
and their respective Subsidiaries with, and to be advised as to
the same by, its officers, all at such reasonable times and
intervals as the Agent may reasonably request; provided that the
Borrowers shall only be responsible for the costs and expenses
incurred by the Agent in connection with such inspections after
the occurrence and during the continuance of an Event of Default.
The Agent and each Lender agrees to keep any non-public
information delivered or made available by the Borrowers to it
confidential from anyone other than persons employed or retained
by the Agent or such Lender (including, without limitation,
employees, officers, attorneys and other advisors) who, in the
reasonable determination of the Agent or such Lender, reasonably
need to know such information and who are or are expected to
become engaged in evaluating, approving, structuring or
administering the Loans or rendering legal advice in connection
with the Loans; provided such employees, officers, attorneys and
other advisors agree to keep such information confidential in
accordance with this Section 7.10; and provided further that
nothing herein shall prevent the Agent or any Lender or persons
employed or retained by the Agent or such Lender from disclosing
such information (i) to any other Lender, (ii) to any other
person if reasonably incidental to the administration of the
Loans, (iii) upon the order of any court or administrative
agency, (iv) upon the request or demand of any regulatory agency
or authority, (v) which has been publicly disclosed other than as
a result of a disclosure by the Agent or any Lender which is not
permitted by this Agreement, (vi) in connection with any
litigation to which the Agent, any Lender, or their respective
Affiliates may be a party, (vii) to the extent reasonably
required in connection with the exercise of any remedy hereunder,
(viii) to the Agent's or such Lender's Affiliates, legal counsel
and independent auditors, (ix) to any actual or proposed
participant or Eligible Assignee of all or part of its rights
hereunder, and (x) as otherwise required by law.
Section 7.11. Compliance with Laws, Contracts, Licenses,
and Permits. Each Borrower will, and will cause each Guarantor
to, comply with, and will cause each of their respective
Subsidiaries to comply with (a) all applicable laws and
regulations now or hereafter in effect wherever its business is
conducted, including, without limitation, all Environmental Laws
and all applicable federal and state securities laws, (b) the
provisions of its partnership agreement and certificate or
corporate charter and other charter documents and by-laws, as
applicable, (c) all material agreements and instruments to which
it is a party or by which it or any of its properties may be
bound (including the Real Estate and the Leases) and (d) all
applicable decrees, orders, and judgments. If at any time while
any Loan or Note is outstanding or the Lenders have any
obligation to make Loans hereunder, any Permit shall become
necessary or required in order that any Borrower may fulfill any
of its obligations hereunder, the Borrowers and the Guarantors
will immediately take or cause to be taken all reasonable steps
within the power of the Borrowers or the Guarantors, as
applicable, to obtain such Permit and furnish the Agent with
evidence thereof.
Section 7.12. Use of Proceeds. Subject at all times to the
other provisions of this Agreement, the Borrowers will use the
proceeds of the Loans solely to finance (a) the acquisition,
renovation and construction of self storage facilities, (b) the
repayment of Indebtedness, and (c) general working capital needs.
Section 7.13. Acquisition of Unencumbered Properties. In
addition to the requirements of Section 7.5(e), the Borrowers
shall, within seven (7) Business Days of the acquisition of an
Unencumbered Property or the qualification of any Real Estate as
an Unencumbered Property, deliver to the Agent a copy of the
Title Policy and the final environmental site assessment for such
Unencumbered Property. Such Title Policies and environmental
site assessments, as well as insurance certificates, shall not be
forwarded to the Lenders by the Agent, but shall be available for
inspection by the Lenders at the Agent's Head Office.
Section 7.14. Additional Guarantors; Solvency of
Guarantors.
(a) If, after the Closing Date, a Subsidiary of any
Borrower acquires any Real Estate in accordance with Section 7.6
and Section 7.7 that otherwise qualifies as an Unencumbered
Property but is owned by a Person other than a then Borrower or
Guarantor, the Borrowers shall cause such Person (which Person
must be or become a wholly-owned Subsidiary of SALP or Sovran) to
execute and deliver a Guaranty to the Agent and the Lenders in
substantially the form of Exhibit B hereto prior to such Real
Estate's becoming an Unencumbered Property hereunder. Such
Guaranty shall evidence consideration and equivalent value. The
Borrowers will not permit any Guarantor that owns any
Unencumbered Properties to have any Subsidiaries.
(b) The Borrowers shall cause each of the Subsidiary
Guarantors to remain solvent and shall provide each of the
Subsidiary Guarantors with such funds and assets as such
Subsidiary Guarantor shall require in the operation of its
business, all in consideration of such Guarantor's execution and
delivery of its Guaranty.
Section 7.15. Further Assurances. Each Borrower will, and
will cause each Guarantor to, cooperate with, and to cause each
of its Subsidiaries to cooperate with, the Agent and the Lenders
and execute such further instruments and documents as the Lenders
or the Agent shall reasonably request to carry out to their
satisfaction the transactions contemplated by this Agreement and
the other Loan Documents.
Section 7.16. Form of Lease. The Borrowers shall cause
every lease for self storage space at an Unencumbered Property to
be substantially in the form of Schedule 7.16 with such changes
as required by applicable law or competitive market conditions
generally applicable to self storage facilities in the market of
such Unencumbered Property.
Section 7.17. Environmental Indemnification. The Borrowers
jointly and severally covenant and agree that they will indemnify
and hold the Agent and each Lender, and each of their respective
Affiliates, harmless from and against any and all claims,
expense, damage, loss or liability incurred by the Agent or any
Lender (including all reasonable costs of legal representation
incurred by the Agent or any Lender, but excluding, as
applicable, for the Agent or a Lender any claim, expense, damage,
loss or liability as a result of the gross negligence or willful
misconduct of the Agent or such Lender or any of their respective
Affiliates) relating to (a) any Release or threatened Release of
Hazardous Substances on any Real Estate; (b) any violation of any
Environmental Laws with respect to conditions at any Real Estate
or the operations conducted thereon; (c) the investigation or
remediation of off-site locations at which any Borrower, any
Guarantor or any of their respective Subsidiaries or their
predecessors are alleged to have directly or indirectly disposed
of Hazardous Substances; or (d) any action, suit, proceeding or
investigation brought or threatened with respect to any Hazardous
Substances relating to Real Estate (including, but not limited
to, claims with respect to wrongful death, personal injury or
damage to property). It is expressly acknowledged by each
Borrower that this covenant of indemnification shall survive the
payment of the Loans and shall inure to the benefit of the Agent
and the Lenders and their respective Affiliates, their respective
successors, and their respective assigns under the Loan Documents
permitted under this Agreement.
Section 7.18. Response Actions. Each Borrower covenants
and agrees that if any Release or disposal of Hazardous
Substances shall occur or shall have occurred on any Real Estate
owned by it or any of its Subsidiaries, such Borrower will cause
the prompt containment and removal of such Hazardous Substances
and remediation of such Real Estate as necessary to comply with
all Environmental Laws or to preserve the value of such Real
Estate.
Section 7.19. Environmental Assessments. If the Required
Lenders have reasonable grounds to believe that a Disqualifying
Environmental Event has occurred with respect to any Unencumbered
Property, after reasonable notice by the Agent, whether or not a
Default or an Event of Default shall have occurred, the Required
Lenders may determine that the affected Real Estate no longer
qualifies as an Unencumbered Property; provided that prior to
making such determination, the Agent shall give the Borrower
Representative reasonable notice and the opportunity to obtain
one or more environmental assessments or audits of such
Unencumbered Property prepared by a hydrogeologist, an
independent engineer or other qualified consultant or expert
approved by the Agent, which approval will not be unreasonably
withheld, to evaluate or confirm (i) whether any Release of
Hazardous Substances has occurred in the soil or water at such
Unencumbered Property and (ii) whether the use and operation of
such Unencumbered Property materially complies with all
Environmental Laws (including not being subject to a matter that
is a Disqualifying Environmental Event). Such assessment will
then be used by the Agent to determine whether a Disqualifying
Environmental Event has in fact occurred with respect to such
Unencumbered Property. All such environmental assessments shall
be at the sole cost and expense of the Borrowers.
Section 7.20. Employee Benefit Plans.
(a) In General. Each Employee Benefit Plan maintained by
any Borrower, any Guarantor or any of their respective ERISA
Affiliates will be operated in compliance in all material
respects with the provisions of ERISA and, to the extent
applicable, the Code, including but not limited to the provisions
thereunder respecting prohibited transactions.
(b) Terminability of Welfare Plans. With respect to each
Employee Benefit Plan maintained by any Borrower, any Guarantor
or any of their respective ERISA Affiliates which is an employee
welfare benefit plan within the meaning of Section 3(1) or
Section 3(2)(B) of ERISA, such Borrower, such Guarantor, or any
of their respective ERISA Affiliates, as the case may be, has the
right to terminate each such plan at any time (or at any time
subsequent to the expiration of any applicable bargaining
agreement) without liability other than liability to pay claims
incurred prior to the date of termination.
(c) Unfunded or Underfunded Liabilities. The Borrowers
will not, and will not permit any Guarantor to, at any time, have
accruing or accrued unfunded or underfunded liabilities with
respect to any Employee Benefit Plan, Guaranteed Pension Plan or
Multiemployer Plan, or permit any condition to exist under any
Multiemployer Plan that would create a withdrawal liability.
Section 7.21. No Amendments to Certain Documents. The
Borrowers will not, and will not permit any Guarantor to, at any
time cause or permit its certificate of limited partnership,
agreement of limited partnership, articles of incorporation,
by-laws or other charter documents, as the case may be, to be
modified, amended or supplemented in any respect whatever,
without (in each case) the express prior written consent or
approval of the Required Lenders, if such changes would affect
Sovran's REIT status or otherwise materially adversely affect the
rights of the Agent and the Lenders hereunder or under any other
Loan Document.
Section 7.22. Exclusive Credit Facility. The Borrowers
will at all times use this Agreement as the Borrower's exclusive
revolving credit agreement and will not at any time during the
term of this Agreement permit any other revolving credit
agreement to be maintained by any Borrower or any Guarantor.
Section 7.23. Management. Except by reason of death or
incapacity, at least two (2) of the Key Management Individuals
(as hereinafter defined) shall remain active in the executive
and/or operational management, in their current positions and
with their current responsibilities (or more senior positions
with requisite greater responsibilities), of Sovran; provided,
however, if at least two (2) of the Key Management Individuals
are not so active in such positions and with such
responsibilities (except by reason of death or incapacity as
aforesaid), then within ninety (90) days of the occurrence of
such event, Sovran shall propose and appoint such individual(s)
of comparable experience, reputation and otherwise reasonably
acceptable to the Required Lenders to such position(s) such that,
after such appointment, such acceptable replacement individuals,
together with the Key Management Individuals remaining so active
with Sovran in such positions and with such responsibilities,
total at least two (2). For purposes hereof, "Key Management
Individuals" shall mean and include Robert J. Attea, Kenneth F.
Myszka and David L. Rogers.
Section 8. CERTAIN NEGATIVE COVENANTS OF THE BORROWERS
AND THE GUARANTORS. Each Borrower for itself and on behalf of
the Guarantors covenants and agrees that, so long as any Loan or
Note is outstanding or any of the Lenders has any obligation to
make any Loans:
Section 8.1. Restrictions on Indebtedness.
The Borrowers and the Guarantors may, and may permit their
respective Subsidiaries to, create, incur, assume, guarantee or
be or remain liable for, contingently or otherwise, any
Indebtedness other than the specific Indebtedness which is
prohibited under this Section 8.1 and with respect to which each
of the Borrowers and the Guarantors will not, and will not permit
any Subsidiary to, create, incur, assume, guarantee or be or
remain liable for, contingently or otherwise, singularly or in
the aggregate as follows:
(a) Indebtedness (excluding the Obligations) which is
incurred under a revolving credit facility or line of credit with
another financial institution;
(b) Indebtedness which would result in a Default or Event
of Default under Section 9 hereof or under any other provision of
this Agreement;
(c) An aggregate amount in excess of $1,000,000 at any one
time in respect of taxes, assessments, governmental charges or
levies and claims for labor, materials and supplies for which
payment therefor is required to be made in accordance with the
provisions of Section 7.9 and has not been timely made;
(d) An aggregate amount in excess of $1,000,000 at any one
time in respect of uninsured judgments or awards, with respect to
which the applicable periods for taking appeals have expired, or
with respect to which final and unappealable judgments or awards
have been rendered; and
(e) Current unsecured liabilities incurred in the ordinary
course of business, which (i) are overdue for more than sixty
(60) days, (ii) exceed $1,000,000 in the aggregate at any one
time, and (iii) are not being contested in good faith.
The terms and provisions of this Section 8.1 are in addition
to, and not in limitation of, the covenants set forth in
Section 9 of this Agreement.
Notwithstanding anything contained herein to the contrary,
the Borrowers and the Guarantors will not, and will not permit
any Subsidiary to, incur any Indebtedness for borrowed money
which, together with other Indebtedness for borrowed money
incurred by any Borrower, any Guarantor, and any Subsidiary since
the date of the most recent compliance certificate delivered to
the Agent in accordance with this Agreement, exceeds $5,000,000
in the aggregate unless the Borrowers shall have delivered a
compliance certificate in the form of Exhibit D hereto to the
Agent evidencing covenant compliance at the time of delivery of
the certificate and on a pro-forma basis after giving effect to
such proposed Indebtedness.
Section 8.2. Restrictions on Liens, Etc. None of any
Borrower, any Guarantor, any Operating Subsidiary and any
wholly-owned Subsidiary will: (a) create or incur or suffer to be
created or incurred or to exist any lien, encumbrance, mortgage,
pledge, charge, restriction or other security interest of any
kind upon any of its property or assets of any character whether
now owned or hereafter acquired, or upon the income or profits
therefrom; (b) transfer any of such property or assets or the
income or profits therefrom for the purpose of subjecting the
same to the payment of Indebtedness or performance of any other
obligation in priority to payment of its general creditors; (c)
acquire, or agree or have an option to acquire, any property or
assets upon conditional sale or other title retention or purchase
money security agreement, device or arrangement; (d) suffer to
exist for a period of more than thirty (30) days after the same
shall have been incurred any Indebtedness or claim or demand
against it that if unpaid might by law or upon bankruptcy or
insolvency, or otherwise, be given any priority whatsoever over
its general creditors; or (e) sell, assign, pledge or otherwise
transfer any accounts, contract rights, general intangibles,
chattel paper or instruments, with or without recourse (the
foregoing items (a) through (e) being sometimes referred to in
this Section 8.2 collectively as "Liens"), provided that the
Borrowers, the Guarantors and any Subsidiary may create or incur
or suffer to be created or incurred or to exist:
(i) Liens securing taxes, assessments, governmental
charges or levies or claims for labor, material and supplies, the
Indebtedness with respect to which is not prohibited by
Section 8.1(d);
(ii) deposits or pledges made in connection with, or to
secure payment of, worker's compensation, unemployment insurance,
old age pensions or other social security obligations; and
deposits with utility companies and other similar deposits made
in the ordinary course of business;
(iii) Liens (other than affecting the Unencumbered
Properties) in respect of judgments or awards, the Indebtedness
with respect to which is not prohibited by Section 8.1(e);
(iv) encumbrances on properties consisting of
easements, rights of way, covenants, restrictions on the use of
real property and defects and irregularities in the title
thereto; landlord's or lessor's Liens under Leases to which any
Borrower, any Guarantor, or any Subsidiary is a party or bound;
purchase options granted at a price not less than the market
value of such property; and other minor Liens or encumbrances on
properties, none of which interferes materially and adversely
with the use of the property affected in the ordinary conduct of
the business of the owner thereof, and which matters (x) do not
individually or in the aggregate have a material adverse effect
on the business of any Borrower, any Guarantor or any of their
respective Subsidiaries or (xx) do not make title to such
property unmarketable by the conveyancing standards in effect
where such property is located;
(v) any Leases (excluding "synthetic leases") entered
into good faith with Persons that are not Affiliates; provided
that Leases with Affiliates on market terms and with monthly
market rent payments required to be paid are Permitted Liens;
(vi) Liens and other encumbrances or rights of others
which exist on the date of this Agreement and which do not
otherwise constitute a breach of this Agreement; provided that
nothing in this clause (vi) shall be deemed or construed to
permit an Unencumbered Property to be subject to a Lien to secure
Indebtedness;
(vii) as to Real Estate which are acquired after the
date of this Agreement, Liens and other encumbrances or rights of
others which exist on the date of acquisition and which do not
otherwise constitute a breach of this Agreement; provided that
nothing in this clause (vii) shall be deemed or construed to
permit an Unencumbered Property to be subject to a Lien to secure
Indebtedness;
(viii) Liens affecting the Unencumbered Properties in
respect of judgments or awards that have been in force for less
than the applicable period for taking an appeal, so long as
execution is not levied thereunder or in respect of which, at the
time, a good faith appeal or proceeding for review is being
prosecuted, and in respect of which a stay of execution shall
have been obtained pending such appeal or review; provided that
the Borrowers shall have obtained a bond or insurance with
respect thereto to the Agent's reasonable satisfaction, and,
provided further, such Lien does not constitute a Disqualifying
Environmental Event, a Disqualifying Building Event or a
Disqualifying Legal Event;
(ix) Liens securing Indebtedness for the purchase price
of capital assets (other than Real Estate but including
Indebtedness in respect of Capitalized Leases for equipment and
other equipment leases) to the extent not otherwise prohibited by
Section 8.1; and
(x) other Liens (other than affecting the Unencumbered
Properties) in connection with any Indebtedness permitted under
Section 8.1 which do not otherwise result in a Default or Event
of Default under this Agreement.
Notwithstanding the foregoing provisions of this
Section 8.2, the failure of any Unencumbered Property to comply
with the covenants set forth in this Section 8.2 shall result in
such Unencumbered Property's disqualification as Unencumbered
Property under this Agreement, but such disqualification shall
not by itself constitute a Default or Event of Default, unless
such disqualification causes a Default or an Event of Default
under another provision of this Agreement.
Section 8.3. Restrictions on Investments. None of any
Borrower, any Guarantor, or any Subsidiary will make or permit to
exist or to remain outstanding any Investment except Investments
in:
(a) marketable direct or guaranteed obligations of the
United States of America that mature within one (1) year from the
date of purchase;
(b) demand deposits, certificates of deposit, bankers
acceptances and time deposits of United States banks having total
assets in excess of $1,000,000,000;
(c) securities commonly known as "commercial paper" issued
by a corporation organized and existing under the laws of the
United States of America or any state thereof that at the time of
purchase have been rated and the ratings for which are not less
than "P 1" if rated by Moody's, and not less than "A 1" if rated
by S&P;
(d) Investments existing on the Closing Date and listed on
Schedule 8.3(d) hereto;
(e) So long as no Default or Event of Default has occurred
and is continuing or would occur after giving effect thereto,
acquisitions of Real Estate consisting of self storage facilities
and the equity of Persons whose primary operations consist of the
ownership, development, operation and management of self storage
facilities; provided, however that (i) the Borrowers shall not,
and shall not permit any Guarantor or any of its Subsidiaries to,
acquire any such Real Estate without the prior written consent of
the Agent if the environmental investigation for such Real Estate
determines that the potential environmental remediation costs and
other environmental liabilities associated with such Real Estate
exceed $200,000; and (ii) the Borrowers shall not permit any of
their Subsidiaries which is not a Borrower or a Guarantor, or
which does not become a Borrower or a Guarantor, to acquire any
Unencumbered Property, and in all cases such Guarantor shall be a
wholly-owned Subsidiary of SALP or Sovran;
(f) any Investments now or hereafter made in any
Subsidiary;
(g) Investments in respect of (1) equipment, inventory and
other tangible personal property acquired in the ordinary course
of business, (2) current trade and customer accounts receivable
for services rendered in the ordinary course of business and
payable in accordance with customary trade terms, (3) advances to
employees for travel expenses, drawing accounts and similar
expenditures, and (4) prepaid expenses made in the ordinary
course of business;
(h) any other Investments made in the ordinary course of
business and consistent with past business practices;
(i) interest rate hedges in connection with Indebtedness;
and
(j) shares of so-called "money market funds" registered
with the SEC under the Investment Company Act of 1940 which
maintain a level per- share value, invest principally in
marketable direct or guaranteed obligations of the United States
of America and agencies and instrumentalities thereof, and have
total assets in excess of $50,000,000.
Section 8.4. Merger, Consolidation and Disposition of
Assets.
None of any Borrower, any Guarantor, any Operating
Subsidiary or any wholly-owned Subsidiary will:
(a) Become a party to any merger, consolidation or
reorganization without the prior written consent of the Lenders,
except that so long as no Default or Event of Default has
occurred and is continuing, or would occur after giving effect
thereto, the merger, consolidation or reorganization of one or
more Persons with and into any Borrower, any Guarantor, or any
wholly-owned Subsidiary, shall be permitted if such action is not
hostile, any Borrower, any Guarantor, or any wholly-owned
Subsidiary, as the case may be, is the surviving entity and such
merger, consolidation or reorganization does not cause a breach
of Section 7.23; provided that for any such merger, consolidation
or reorganization (other than (w) the merger or consolidation of
one or more Subsidiaries of SALP with and into SALP, (x) the
merger or consolidation of two or more Subsidiaries of SALP, (y)
the merger or consolidation of one or more Subsidiaries of Sovran
with and into Sovran, or (z) the merger or consolidation of two
or more Subsidiaries of Sovran), the Borrowers shall provide to
the Agent a statement in the form of Exhibit D hereto signed by
the chief financial officer or treasurer of the Borrower
Representative and setting forth in reasonable detail
computations evidencing compliance with the covenants contained
in Section 9 hereof and certifying that no Default or Event of
Default has occurred and is continuing, or would occur and be
continuing after giving effect to such merger, consolidation or
reorganization and all liabilities, fixed or contingent, pursuant
thereto;
(b) Sell, transfer or otherwise dispose of (collectively
and individually, "Sell" or a "Sale") or grant a Lien to secure
Indebtedness (an "Indebtedness Lien") on any of its now owned or
hereafter acquired assets without obtaining the prior written
consent of the Required Lenders except for:
(i) the Sale of or granting of an Indebtedness Lien on
any Unencumbered Property so long as no Default or Event of
Default has then occurred and is continuing, or would occur
and be continuing after giving effect to such Sale or
Indebtedness Lien; provided, that prior to any Sale of any
Unencumbered Property or the granting of an Indebtedness
Lien on any Unencumbered Property under this clause (i), the
Borrowers shall provide to the Agent a statement in the form
of Exhibit D hereto signed by the chief financial officer or
treasurer of the Borrower Representative and setting forth
in reasonable detail computations evidencing compliance with
the covenants contained in Section 9 hereof and certifying
that no Default or Event of Default has occurred and is
continuing, or would occur and be continuing after giving
effect to such proposed Sale or Indebtedness Lien and all
liabilities, fixed or contingent, pursuant thereto; and
(ii) the Sale of or the granting of an Indebtedness
Lien on any of its now owned or hereafter acquired assets
(other than any Unencumbered Property) so long as no Event
of Default has then occurred and is continuing and no
Default or Event of Default would occur and be continuing
after giving effect to such Sale or Indebtedness Lien and
all other Sales (to be) made and Indebtedness Liens (to be)
granted under this clause (ii); provided, that (x) if such
Sale or Indebtedness Lien is made or granted under this
clause (ii) while a Default is continuing, such Sale or
Indebtedness Lien (together with other Sales and
Indebtedness Liens under this clause (ii)) cures (or would
cure) such Default before it becomes an Event of Default,
(y) if multiple Sales or grantings of Indebtedness Liens are
undertaken pursuant to the foregoing subclause (x) to cure a
Default, the Borrowers shall apply the net proceeds of each
such Sale or Indebtedness Lien remaining after application
to such cure to the repayment of the Revolving Credit Loans
until such Default has been fully cured, and (z) prior to
the Sale of any asset or the granting of an Indebtedness
Lien on any asset under this clause (ii), the Borrowers
shall provide to the Agent a statement in the form of
Exhibit D hereto signed by the chief financial officer or
treasurer of the Borrower Representative and setting forth
in reasonable detail computations evidencing compliance with
the covenants contained in Section 9 hereof and certifying
that no Default or Event of Default would occur and be
continuing after giving effect to all such proposed Sales or
Indebtedness Liens and all liabilities, fixed or contingent,
pursuant thereto.
Section 8.5. Sale and Leaseback. The Borrowers will not,
and will not permit any Guarantor or any of their respective
Subsidiaries to, enter into any arrangement, directly or
indirectly, whereby any Borrower, any Guarantor or any of their
respective Subsidiaries shall sell or transfer any property owned
by it in order then or thereafter to lease such property.
Section 8.6. Compliance with Environmental Laws. None of
any Borrower, any Guarantor, or any Subsidiary will do any of the
following: (a) use any of the Real Estate or any portion thereof
as a facility for the handling, processing, storage or disposal
of Hazardous Substances except for quantities of Hazardous
Substances used in the ordinary course of business and in
compliance with all applicable Environmental Laws, (b) cause or
permit to be located on any of the Real Estate any underground
tank or other underground storage receptacle for Hazardous
Substances except in full compliance with Environmental Laws, (c)
generate any Hazardous Substances on any of the Real Estate
except in full compliance with Environmental Laws, or (d) conduct
any activity at any Real Estate or use any Real Estate in any
manner so as to cause a Release or a violation of any
Environmental Law; provided that a breach of this covenant shall
result in the exclusion of the affected Real Estate from the
calculation of the covenants set forth in Section 9, but shall
only constitute an Event of Default under Section 12.1(c) hereof
if such breach has a material adverse effect on the Borrowers and
their Subsidiaries, taken as a whole, or materially impairs the
ability of the Borrowers to fulfill their obligations to the
Lenders under this Agreement.
Section 8.7. Distributions. (a) The Borrowers will not in
any period of four (4) consecutive completed fiscal quarters make
(i) Distributions in such period in excess of 90% of Funds From
Operations for such period or (ii) any Distributions during any
period when any Event of Default has occurred and is continuing;
provided, however, that the Borrowers may at all times make
Distributions to the extent (after taking into account all
available funds of Sovran from all other sources) required in
order to enable Sovran to continue to qualify as a REIT. In the
event that Sovran or SALP raises equity during the term of this
Agreement, the permitted percentage of Distributions will be
adjusted based on the total declared distribution per share and
partnership units over the most recent four (4) quarters to Funds
From Operations per weighted average share and partnership unit
based on the most recent four (4) quarters.
(b) Sovran will not, during any period when any Event of
Default has occurred and is continuing, make any Distributions in
excess of the Distributions required to be made by Sovran in
order to maintain its status as a REIT.
Section 8.8. Employee Benefit Plans. None of any
Borrower, any Guarantor or any ERISA Affiliate will
(a) engage in any "prohibited transaction" within the
meaning of Section 406 of ERISA or Section 4975 of the Code which
could result in a material liability for any Borrower, any
Guarantor or any of their respective Subsidiaries; or
(b) permit any Guaranteed Pension Plan to incur an
"accumulated funding deficiency", as such term is defined in
Section 302 of ERISA, whether or not such deficiency is or may be
waived; or
(c) fail to contribute to any Guaranteed Pension Plan to an
extent which, or terminate any Guaranteed Pension Plan in a
manner which, could result in the imposition of a lien or
encumbrance on the assets of any Borrower, any Guarantor or any
of their respective Subsidiaries pursuant to Section 302(f) or
Section 4068 of ERISA; or
(d) amend any Guaranteed Pension Plan in circumstances
requiring the posting of security pursuant to Section 307 of
ERISA or Section 401(a)(29) of the Code; or
(e) permit or take any action which would result in the
aggregate benefit liabilities (with the meaning of Section 4001
of ERISA) of all Guaranteed Pension Plans exceeding the value of
the aggregate assets of such Plans, disregarding for this purpose
the benefit liabilities and assets of any such Plan with assets
in excess of benefit liabilities.
Section 8.9. Fiscal Year. The Borrowers will not, and
will not permit the Guarantors or any of their respective
Subsidiaries to, change the date of the end of its fiscal year
from that set forth in Section 6.5.
Section 8.10. Amsdell Litigation. The Borrower will not,
and will not permit, release of the indemnifications relating to
the litigation of Robert Amsdell described on Schedule 6.7 or the
collateral for such indemnification as described on Schedule 6.7.
Section 8.11. Negative Pledge. From and after the date
hereof, neither any Borrower nor any Guarantor will, and will not
permit any Subsidiary to, enter into any agreement containing any
provision prohibiting the creation or assumption of any Lien upon
its properties (other than prohibitions on liens for particular
assets (other than an Unencumbered Property) set forth in a
security instrument in connection with Indebtedness for such
assets and the granting or effect of such liens does not
otherwise constitute a Default or Event of Default), revenues or
assets, whether now owned or hereafter acquired, or restricting
the ability of the Borrowers or the Guarantors to amend or modify
this Agreement or any other Loan Document.
Section 9. FINANCIAL COVENANTS OF THE BORROWERS. Each
of the Borrowers covenants and agrees that, so long as any Loan
or Note is outstanding or any Lender has any obligation to make
any Loan:
Section 9.1. Leverage Ratio. As at the end of any fiscal
quarter or other date of measurement, the Borrowers shall not
permit Consolidated Total Liabilities to exceed 50% of
Consolidated Capitalized Value.
Section 9.2. Secured Indebtedness. As at the end of any
fiscal quarter or other date of measurement, the Borrowers shall
not permit Consolidated Secured Indebtedness to exceed 25% of
Consolidated Capitalized Value.
Section 9.3. Tangible Net Worth. As at the end of any
fiscal quarter or any other date of measurement, the Borrowers
shall not permit Consolidated Tangible Net Worth to be less than
the sum of (a) $200,000,000 plus (b) 80% of the sum of (i) the
aggregate proceeds received by Sovran (net of fees and expenses
customarily incurred in transactions of such type) in connection
with any offering of stock in Sovran and (ii) the aggregate value
of operating units issued by SALP in connection with asset or
stock acquisitions (valued at the time of issuance by reference
to the terms of the agreement pursuant to which such units are
issued), in each case after the Closing Date and on or prior to
the date such determination of Consolidated Tangible Net Worth is
made.
Section 9.4. Debt Service Coverage. As at the end of any
fiscal quarter or other date of measurement, the Borrowers shall
not permit Consolidated Adjusted EBITDA for the two (2) most
recent, complete, consecutive fiscal quarters to be less than two
(2) times Consolidated Assumed Amortizing Debt Service Charges.
Section 9.5. Unimproved Land. As at the end of any fiscal
quarter or other date of measurement, the Borrowers shall not
permit the book value of Unimproved Land to exceed 10% of
Consolidated Capitalized Value.
Section 9.6. Construction-in-Process. As at the end of any
fiscal quarter or other date of measurement, the Borrowers shall
not permit the aggregate Budgeted Project Costs of all
Construction-in-Process to exceed 10% of Consolidated Capitalized
Value.
Section 9.7. Promissory Notes. As at the end of any fiscal
quarter or other date of measurement, the Borrowers shall not
permit the book value of Indebtedness of third parties to the
Borrowers or their Subsidiaries for borrowed money or other
liquid or liquifiable obligations, whether secured or unsecured,
to exceed 10% of Consolidated Capitalized Value.
Section 9.8. Unimproved Land, Construction-in-Process and
Notes. As at the end of any fiscal quarter or other date of
measurement, the Borrowers shall not permit (a) the sum of
(i) the book value of Unimproved Land plus (ii) the aggregate
Budgeted Project Costs of all Construction-in-Process plus
(iii) the book value of Indebtedness of third parties to the
Borrowers or their Subsidiaries for borrowed money or other
liquid or liquifiable obligations, whether secured or unsecured,
to exceed (b) 20% of Consolidated Capitalized Value.
Section 9.9. Joint Venture Ownership Interest. As at the
end of any fiscal quarter or other date of measurement, the
Borrowers shall not permit Joint Venture Ownership Interest Value
to exceed 10% of Consolidated Capitalized Value.
Section 9.10. Unhedged Variable Rate Debt. As at the end
of any fiscal quarter, the Borrowers shall not permit the value
of Unhedged Variable Rate Indebtedness to exceed 20% of
Consolidated Capitalized Value for any two (2) consecutive fiscal
quarters.
Section 9.11. Unsecured Indebtedness. As at the end of any
fiscal quarter or other date of measurement, the Borrowers shall
not permit Consolidated Unsecured Indebtedness to exceed 45% of
aggregate Capitalized Unencumbered Property Value for all
Unencumbered Properties .
Section 9.12. Unencumbered Property Debt Service Coverage.
As at the end of any fiscal quarter or other date of measurement,
the Borrowers shall not permit the aggregate Adjusted
Unencumbered Property NOI for all Unencumbered Properties for the
two (2) most recent, complete, consecutive fiscal quarters to be
less than two (2) times Consolidated Assumed Amortizing Unsecured
Debt Service Charges.
Section 9.13. Covenant Calculations.
(a) For purposes of the calculations to be made pursuant to
Section 9.1-9.12 (and the defined terms relevant thereto,
including, without limitation, those relating to "debt service"),
references to Indebtedness or liabilities of the Borrowers shall
mean Indebtedness or liabilities (including, without limitation,
Consolidated Total Liabilities) of the Borrowers, plus (but
without double-counting):
(i) all Indebtedness or liabilities of the Operating
Subsidiaries, the Guarantors and any other wholly-owned
Subsidiary (excluding any such Indebtedness or liabilities
owed to the Borrowers or any Guarantor),
(ii) all Indebtedness or liabilities of each
Partially-Owned Entity (including Capitalized Leases), but
only to the extent, if any, that said Indebtedness or
liability is Recourse to any of the Borrowers, the
Guarantors or their respective Subsidiaries or any of their
respective assets (other than their respective interests in
such Partially-Owned Entity), and
(iii) Indebtedness or liabilities of each
Partially-Owned Entity to the extent of the pro-rata share
of such Indebtedness or liability allocable to any of the
Borrowers, the Guarantors or their respective Subsidiaries,
if the Indebtedness or liability of such Partially-Owned
Entity is Without Recourse to such Person or its assets
(other than its interest in such Partially-Owned Entity).
(b) For purpose of Section 9.1, 9.2, 9.3, 9.5, 9.6, 9.7,
9.8, 9.9, 9.10 and 9.11 hereof, Consolidated Adjusted EBITDA and
Adjusted Unencumbered Property NOI (and all defined terms and
calculations using such terms) shall be adjusted to (i) deduct
the actual results of any Real Estate disposed of by a Borrower,
a Guarantor or any of their respective Subsidiaries during the
relevant fiscal period, and (ii) include the pro forma results of
any Real Estate acquired by a Borrower, a Guarantor or any of
their respective Subsidiaries during the relevant fiscal period,
with such pro forma results being calculated by (x) using the
Borrowers' pro forma projections for such acquired property,
subject to the Agent's reasonable approval, if such property has
been owned by a Borrower, a Guarantor or any of their respective
Subsidiaries for less than one complete fiscal quarter or (y)
using the actual results for such acquired property and adjusting
such results for the appropriate period of time required by the
applicable financial covenant, if such property has been owned by
a Borrower, a Guarantor or any of their respective Subsidiaries
for at least one complete fiscal quarter.
(c) For purposes of Section 9.1-9.12 hereof, Consolidated
Adjusted EBITDA and Adjusted Unencumbered Property NOI (and the
defined terms and calculations using such terms) shall be
adjusted, to the extent applicable, to include the pro rata share
of results attributable to the Borrowers from unconsolidated
Subsidiaries of the Borrowers and their respective Subsidiaries
and from unconsolidated Partially-Owned Entities.
Section 10. CONDITIONS TO THE CLOSING DATE. The
obligations of the Lenders to make the initial Revolving Credit
Loans shall be subject to the satisfaction of the following
conditions precedent on or prior to February 27, 1998:
Section 10.1. Loan Documents. Each of the Loan Documents
shall have been duly executed and delivered by the respective
parties thereto and shall be in full force and effect.
Section 10.2. Certified Copies of Organization Documents.
The Agent shall have received from each Borrower and Holdings a
copy, certified as of the Closing Date by a duly authorized
officer of such Person (or its general partner, in the case of
SALP), to be true and complete, of each of its certificate of
limited partnership, agreement of limited partnership,
incorporation documents, by-laws, and/or other organizational
documents as in effect on the Closing Date, along with any other
organization documents of any Borrower (and its general partner,
in the case of SALP) or Holdings, as the case may be, and each as
in effect on the date of such certification.
Section 10.3. By-laws; Resolutions. All action on the part
of the Borrowers and Holdings necessary for the valid execution,
delivery and performance by the Borrowers and Holdings of this
Agreement and the other Loan Documents to which either of them is
or is to become a party shall have been duly and effectively
taken, and evidence thereof satisfactory to the Lenders shall
have been provided to the Agent. Without limiting the foregoing,
the Agent shall have received from Holdings true copies of its
by-laws and the resolutions adopted by its board of directors
authorizing the transactions described herein and evidencing the
due authorization, execution and delivery of the Loan Documents
to which SALP and Holdings are a party, each certified by the
secretary as of a recent date to be true and complete.
Section 10.4. Incumbency Certificate; Authorized Signers.
The Agent shall have received from each of the Borrowers and
Holdings an incumbency certificate, dated as of the Closing Date,
signed by a duly authorized officer such Person and giving the
name of each individual who shall be authorized: (a) to sign, in
the name and on behalf of such Person, each of the Loan Documents
to which such Person is or is to become a party; (b) in the case
of the Borrower Representative, to make Loan Requests and
Conversion Requests on behalf of the Borrowers; and (c) in the
case of the Borrower Representative, to give notices and to take
other action on behalf of the Borrowers and the Guarantors under
the Loan Documents.
Section 10.5. Title Policies. The Agent (on behalf of the
Lenders) shall have received copies of the Title Policies for all
Real Estate which are Unencumbered Properties as of the Closing
Date.
Section 10.6. Certificates of Insurance. The Agent shall
have received (a) current certificates of insurance as to all of
the insurance maintained by each Borrower and their respective
Subsidiaries on the Real Estate (including flood insurance if
necessary) from the insurer or an independent insurance broker,
identifying insurers, types of insurance, insurance limits, and
policy terms; and (b) such further information and certificates
from the Borrowers, their insurers and insurance brokers as the
Agent may reasonably request.
Section 10.7. Environmental Site Assessments. The Agent
shall have received environmental site assessments from a
hydrogeologist, environmental engineer, qualified consultant or
other expert and in form and substance satisfactory to the Agent,
covering all Unencumbered Properties and all other real property
in respect of which any Borrower or any of its Subsidiaries may
have material liability, whether contingent or otherwise, for
dumping or disposal of Hazardous Substances or otherwise with
respect to Environmental Laws, such site assessments to be dated
as of a recent date.
Section 10.8. Opinion of Counsel Concerning Organization
and Loan Documents. Each of the Lenders and the Agent shall have
received favorable opinions addressed to the Lenders and the
Agent in form and substance satisfactory to the Lenders and the
Agent from Phillips, Lytle, Hitchcock, Blaine & Huber, as counsel
to the Borrowers and their respective Subsidiaries with respect
to New York law and certain matters of Delaware corporate law and
Hogan & Hartson, L.L.P., as counsel to Sovran, with respect to
Maryland law.
Section 10.9. Tax and Securities Law Compliance. Each of
the Lenders and the Agent shall also have received from Phillips,
Lytle, Hitchcock, Blaine & Huber, as counsel to the Borrowers, a
favorable opinion addressed to the Lenders and the Agent, in form
and substance satisfactory to each of the Lenders and the Agent,
with respect to the qualification of Sovran as a REIT and certain
other tax and securities laws matters.
Section 10.10. Guaranties. Each of the Guaranties to be
executed and delivered on the Closing Date shall have been duly
executed and delivered by the Guarantor thereunder.
Section 10.11. Certifications from Government Officials;
UCC-11 Reports. The Agent shall have received (i) certifications
from government officials evidencing the legal existence, good
standing and foreign qualification of each Borrower and each
Guarantor, along with a certified copy of the certificate of
limited partnership or certificate of incorporation of each
Borrower and each Guarantor, all as of the most recent
practicable date; and (ii) UCC-11 search results from the
appropriate jurisdictions for each Borrower and each Guarantor
with respect to the Unencumbered Properties.
Section 10.12. Proceedings and Documents. All proceedings
in connection with the transactions contemplated by this
Agreement, the other Loan Documents and all other documents
incident thereto shall be satisfactory in form and substance to
each of the Lenders and to the Agent's counsel, and the Agent,
each of the Lenders and such counsel shall have received all
information and such counterpart originals or certified or other
copies of such documents as the Agent may reasonably request.
Section 10.13. Fees. The Borrowers shall have paid to the
Agent, for the accounts of the Lenders or for its own account, as
applicable, all of the fees and expenses that are due and payable
as of the Closing Date in accordance with this Agreement and that
certain letter agreement of even date herewith between the
Borrower Representative and the Agent.
Section 10.14. Compliance Certificate. The Borrowers shall
have delivered a compliance certificate in the form of Exhibit D
hereto evidencing compliance with the covenants set forth in
Section 9 hereof.
Section 10.15. Existing Indebtedness. The existing of
record indebtedness of the Borrowers to Paine Webber Real Estate
Securities, Inc. ("Paine Webber") under the $75,000,000 Revolving
Credit Agreement dated as of June 26, 1995, as amended, among
Sovran, SALP, Holdings and Paine Webber, shall have been
satisfied in full or will be satisfied in full with the proceeds
of the initial Revolving Credit Loan, and all Liens securing such
indebtedness shall have been discharged and terminated or such
Liens will promptly after the Closing Date be discharged and
terminated of record pursuant to arrangements satisfactory to the
Agent, and satisfactory evidence of the foregoing shall have been
provided to the Agent.
Section 10.16. Subsequent Guarantors. As a condition to
the effectiveness of any subsequent Guaranty, each subsequent
Guarantor shall deliver such documents, agreements, instruments
and opinions as the Agent shall require as to such Guarantor and
the Unencumbered Property owned by such Guarantor that are
analogous to the deliveries made by the Guarantors as of the
Closing Date pursuant to Section 10.2 through Section 10.8,
Section 10.10 and Section 10.11.
Section 11. CONDITIONS TO ALL BORROWINGS. The
obligations of the Lenders to make any Loan whether on or after
the Closing Date, shall also be subject to the satisfaction of
the following conditions precedent:
Section 11.1. Representations True; No Event of Default;
Compliance Certificate. Each of the representations and
warranties of the Borrowers and the Guarantors contained in this
Agreement, the other Loan Documents or in any document or
instrument delivered pursuant to or in connection with this
Agreement shall be true as of the date as of which they were made
and shall also be true at and as of the time of the making of
each Loan, with the same effect as if made at and as of that time
except to the extent that such representations and warranties
relate expressly to an earlier date); and no Default or Event of
Default under this Agreement shall have occurred and be
continuing on the date of any Loan Request or on the Drawdown
Date of any Loan. Each of the Lenders shall have received a
certificate of the Borrowers signed by an authorized officer of
the Borrower Representative as provided in Section 2.5(iv)(c).
Section 11.2. No Legal Impediment. No change shall have
occurred in any law or regulations thereunder or interpretations
thereof that in the reasonable opinion of the Agent or any Lender
would make it illegal for any Lender to make such Loan.
Section 11.3. Governmental Regulation. Each Lender shall
have received such statements in substance and form reasonably
satisfactory to such Lender as such Lender shall require for the
purpose of compliance with any applicable regulations of the
Comptroller of the Currency or the Board of Governors of the
Federal Reserve System.
Section 12. EVENTS OF DEFAULT; ACCELERATION; ETC.
Section 12.1. Events of Default and Acceleration. If any
of the following events ("Events of Default") shall occur:
(a) the Borrowers shall fail to pay any principal of the
Loans when the same shall become due and payable, whether at the
stated date of maturity or any accelerated date of maturity or at
any other date fixed for payment;
(b) the Borrowers shall fail to pay any interest on the
Loans, the Commitment Fee or any other sums due hereunder or
under any of the other Loan Documents (including, without
limitation, amounts due under Section 7.17) when the same shall
become due and payable, whether at the stated date of maturity or
any accelerated date of maturity or at any other date fixed for
payment, and such failure continues for five (5) days;
(c) any Borrower or any Guarantor or any of their
respective Subsidiaries shall fail to comply with any of their
respective covenants contained in Section 7.1, Section 7.6,
Section 7.7, Section 7.8, Section 7.9, Section 7.12,
Section 7.21, Section 7.22, Section 7.23, Section 8 or Section 9;
(d) any Borrower or any Guarantor or any of their
respective Subsidiaries shall fail to perform any other term,
covenant or agreement contained herein or in any other Loan
Document (other than those specified elsewhere in this
Section 12) and such failure continues for thirty (30) days;
(e) any representation or warranty of any Borrower or any
Guarantor or any of their respective Subsidiaries in this
Agreement or any of the other Loan Documents or in any other
document or instrument delivered pursuant to or in connection
with this Agreement shall prove to have been false in any
material respect upon the date when made or deemed to have been
made or repeated;
(f) any Borrower or any Guarantor or any of their
respective Subsidiaries shall (i) fail to pay at maturity, or
within any applicable period of grace, any obligation for
borrowed money or credit received or in respect of any
Capitalized Leases (x) in respect of any Recourse obligations or
credit or (y) in respect of any Without Recourse obligations or
credit which total in an aggregate amount in excess of
$10,000,000, or (ii) fail to observe or perform any material
term, covenant or agreement contained in any agreement by which
it is bound, evidencing or securing borrowed money or credit
received or in respect of any Capitalized Leases (x) in respect
of any Recourse obligations or credit or (y) in respect of any
Without Recourse obligations or credit in an aggregate amount in
excess of $10,000,000, in either case for such period of time
(after the giving of appropriate notice if required) as would
permit the holder or holders thereof or of any obligations issued
thereunder to accelerate the maturity thereof;
(g) any Borrower, any Guarantor or any of their respective
Subsidiaries shall make an assignment for the benefit of
creditors, or admit in writing its inability to pay or generally
fail to pay its debts as they mature or become due, or shall
petition or apply for the appointment of a trustee or other
custodian, liquidator or receiver of any Borrower, any Guarantor
or any of their respective Subsidiaries or of any substantial
part of the properties or assets of any Borrower, any Guarantor
or any of their respective Subsidiaries or shall commence any
case or other proceeding relating to any Borrower, any Guarantor
or any of their respective Subsidiaries under any bankruptcy,
reorganization, arrangement, insolvency, readjustment of debt,
dissolution or liquidation or similar law of any jurisdiction,
now or hereafter in effect, or shall take any action to authorize
or in furtherance of any of the foregoing, or if any such
petition or application shall be filed or any such case or other
proceeding shall be commenced against any Borrower, any Guarantor
or any of their respective Subsidiaries and (i) any Borrower, any
Guarantor or any of their respective Subsidiaries shall indicate
its approval thereof, consent thereto or acquiescence therein or
(ii) any such petition, application, case or other proceeding
shall continue undismissed, or unstayed and in effect, for a
period of sixty (60) days;
(h) a decree or order is entered appointing any trustee,
custodian, liquidator or receiver or adjudicating any Borrower,
any Guarantor or any of their respective Subsidiaries bankrupt or
insolvent, or approving a petition in any such case or other
proceeding, or a decree or order for relief is entered in respect
of any Borrower, any Guarantor or any of their respective
Subsidiaries in an involuntary case under federal bankruptcy laws
as now or hereafter constituted;
(i) there shall remain in force, undischarged, unsatisfied
and unstayed, for more than thirty (30) days, whether or not
consecutive, any uninsured final judgment against any Borrower,
any Guarantor or any of their respective Subsidiaries that, with
other outstanding uninsured final judgments, undischarged,
unsatisfied and unstayed, against any Borrower, any Guarantor or
any of their respective Subsidiaries exceeds in the aggregate
$1,000,000;
(j) any of the Loan Documents or any material provision of
any Loan Documents shall be cancelled, terminated, revoked or
rescinded otherwise than in accordance with the terms thereof or
with the express prior written agreement, consent or approval of
the Agent, or any Guaranty shall be cancelled, terminated,
revoked or rescinded at any time or for any reason whatsoever, or
any action at law, suit or in equity or other legal proceeding to
make unenforceable, cancel, revoke or rescind any of the Loan
Documents shall be commenced by or on behalf of any Borrower or
any of its Subsidiaries or any Guarantor or any of its
Subsidiaries, or any court or any other governmental or
regulatory authority or agency of competent jurisdiction shall
make a determination that, or issue a judgment, order, decree or
ruling to the effect that, any one or more of the Loan Documents
is illegal, invalid or unenforceable as to any material terms
thereof;
(k) any "Event of Default" or default (after notice and
expiration of any period of grace, to the extent provided, and if
none is specifically provided, then for a period of thirty (30)
days after notice), as defined or provided in any of the other
Loan Documents, shall occur and be continuing;
(l) any Borrower or any ERISA Affiliate incurs any
liability to the PBGC or a Guaranteed Pension Plan pursuant to
Title IV of ERISA in an aggregate amount exceeding $500,000, or
any Borrower or any ERISA Affiliate is assessed withdrawal
liability pursuant to Title IV of ERISA by a Multiemployer Plan
requiring aggregate annual payments exceeding $500,000, or any of
the following occurs with respect to a Guaranteed Pension Plan:
(i) an ERISA Reportable Event, or a failure to make a required
installment or other payment (within the meaning of
Section 302(f)(1) of ERISA), provided that the Agent determines
in its reasonable discretion that such event (A) could be
expected to result in liability of any Borrower or any of their
respective Subsidiaries to the PBGC or such Guaranteed Pension
Plan in an aggregate amount exceeding $500,000 and (B) could
constitute grounds for the termination of such Guaranteed Pension
Plan by the PBGC, for the appointment by the appropriate United
States District Court of a trustee to administer such Guaranteed
Pension Plan or for the imposition of a lien in favor of such
Guaranteed Pension Plan; or (ii) the appointment by a United
States District Court of a trustee to administer such Guaranteed
Pension Plan; or (iii) the institution by the PBGC of proceedings
to terminate such Guaranteed Pension Plan; or
(m) any person or group of persons (within the meaning of
Section 13 or 14 of the Securities Exchange Act of 1934, as
amended) shall have acquired beneficial ownership (within the
meaning of Rule 13d-3 promulgated by the Securities and Exchange
Commission under said Act) of 20% or more of the outstanding
shares of common stock of Sovran; or, during any period of twelve
consecutive calendar months, individuals who were directors of
Sovran on the first day of such period (together with directors
whose election by the Board of Directors or whose nomination for
election by Sovran's stockholders was approved by a vote of at
least two-thirds of the members of the Board of Directors then in
office who either were members of the Board of Directors on the
Closing Date or whose election or nomination for election was
previously so approved) shall cease to constitute a majority of
the board of directors of Sovran;
then, and in any such event, so long as the same may be
continuing, the Agent may, and upon the request of the Required
Lenders shall, by notice in writing to the Borrowers, declare all
amounts owing with respect to this Agreement, the Notes and the
other Loan Documents to be, and they shall thereupon forthwith
become, immediately due and payable without presentment, demand,
protest or other notice of any kind, all of which are hereby
expressly waived by each Borrower and each Guarantor; provided
that in the event of any Event of Default specified in
Section 12.1(g) or Section 12.1(h), all such amounts shall become
immediately due and payable automatically and without any
requirement of notice from any of the Lenders or the any of Agent
or action by the Lenders or the Agent.
Section 12.2. Termination of Commitments. If any one or
more Events of Default specified in Section 12.1(g) or
Section 12.1(h) shall occur, any unused portion of the
Commitments hereunder shall forthwith terminate and the Lenders
shall be relieved of all obligations to make Loans to the
Borrowers. If any other Event of Default shall have occurred and
be continuing, whether or not the Lenders shall have accelerated
the maturity of the Loans pursuant to Section 12.1, the Agent
may, and upon the request of the Required Lenders shall, by
notice to the Borrowers, terminate the unused portion of the
credit hereunder, and upon such notice being given such unused
portion of the credit hereunder shall terminate immediately and
each of the Lenders shall be relieved of all further obligations
to make Loans. No such termination of the credit hereunder shall
relieve any Borrower or any Guarantor of any of the Obligations
or any of its existing obligations to the Lenders arising under
other agreements or instruments.
Section 12.3. Remedies. In the event that one or more
Events of Default shall have occurred and be continuing, whether
or not the Lenders shall have accelerated the maturity of the
Loans pursuant to Section 12.1, the Required Lenders may direct
the Agent to proceed to protect and enforce the rights and
remedies of the Agent and the Lenders under this Agreement, the
Notes, any or all of the other Loan Documents or under applicable
law by suit in equity, action at law or other appropriate
proceeding (including for the specific performance of any
covenant or agreement contained in this Agreement or the other
Loan Documents or any instrument pursuant to which the
Obligations are evidenced and the obtaining of the appointment of
a receiver) and, if any amount shall have become due, by
declaration or otherwise, proceed to enforce the payment thereof
or any other legal or equitable right or remedy of the Agent and
the Lenders under the Loan Documents or applicable law. No
remedy herein conferred upon the Lenders or the Agent or the
holder of any Note is intended to be exclusive of any other
remedy and each and every remedy shall be cumulative and shall be
in addition to every other remedy given hereunder or under any of
the other Loan Documents or now or hereafter existing at law or
in equity or by statute or any other provision of law.
Section 13. SETOFF. Without demand or notice to the
extent permitted by applicable law, during the continuance of any
Event of Default, any deposits (general or specific, time or
demand, provisional or final, regardless of currency, maturity,
or the branch at which such deposits are held, but specifically
excluding tenant security deposits, other fiduciary accounts and
other segregated escrow accounts required to be maintained by any
of the Borrowers for the benefit of any third party) or other
sums credited by or due from any of the Lenders to any of the
Borrowers or any other property of any of the Borrowers in the
possession of the Agent or a Lender may be applied to or set off
against the payment of the Obligations. Each of the Lenders
agrees with each other Lender that (a) if pursuant to any
agreement between such Lender and any Borrower (other than this
Agreement or any other Loan Document), an amount to be set off is
to be applied to Indebtedness of any Borrower to such Lender,
other than with respect to the Obligations, such amount shall be
applied ratably to such other Indebtedness and to the
Obligations, and (b) if such Lender shall receive from any
Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the
Obligations by proceedings against such Borrower at law or in
equity or by proof thereof in bankruptcy, reorganization,
liquidation, receivership or similar proceedings, or otherwise,
and shall retain and apply to the payment of the Note or Notes
held by such Lender any amount in excess of its ratable portion
of the payments received by all of the Lenders with respect to
the Notes held by all of the Lenders, such Lender will make such
disposition and arrangements with the other Lenders with respect
to such excess, either by way of distribution, pro tanto
assignment of claims, subrogation or otherwise, as shall result
in each Lender receiving in respect of the Notes held by it, its
proportionate payment as contemplated by this Agreement; provided
that if all or any part of such excess payment is thereafter
recovered from such Lender, such disposition and arrangements
shall be rescinded and the amount restored to the extent of such
recovery, but without interest. Notwithstanding the foregoing,
no Lender shall exercise a right of setoff if such exercise would
limit or prevent the exercise of any other remedy or other
recourse against any Borrower.
Section 14. THE AGENT.
Section 14.1. Authorization. (a) The Agent is authorized
to take such action on behalf of each of the Lenders and to
exercise all such powers as are hereunder and under any of the
other Loan Documents and any related documents delegated to the
Agent, together with such powers as are reasonably incident
thereto, provided that no duties or responsibilities not
expressly assumed herein or therein shall be implied to have been
assumed by the Agent. The relationship between the Agent and the
Lenders is and shall be that of agent and principal only, and
nothing contained in this Agreement or any of the other Loan
Documents shall be construed to constitute the Agent as a trustee
or fiduciary for any Lender.
(b) Each Borrower, without further inquiry or
investigation, shall, and is hereby authorized by the Lenders to,
assume that all actions taken by the Agent hereunder and in
connection with or under the Loan Documents are duly authorized
by the Lenders. The Lenders shall notify the Borrowers of any
successor to Agent by a writing signed by Required Lenders, which
successor shall be reasonably acceptable to the Borrowers so long
as no Default or Event of Default has occurred and is continuing.
Section 14.2. Employees and Agents. The Agent may exercise
its powers and execute its duties by or through employees or
agents and shall be entitled to take, and to rely on, advice of
counsel concerning all matters pertaining to its rights and
duties under this Agreement and the other Loan Documents. The
Agent may utilize the services of such Persons as the Agent in
its sole discretion may reasonably determine, and all reasonable
fees and expenses of any such Persons shall be paid by the
Borrowers if so provided in Section 15 hereof.
Section 14.3. No Liability. Neither the Agent, nor any of
its shareholders, directors, officers or employees nor any other
Person assisting them in their duties nor any agent or employee
thereof, shall be liable for any waiver, consent or approval
given or any action taken, or omitted to be taken, in good faith
by it or them hereunder or under any of the other Loan Documents,
or in connection herewith or therewith, or be responsible for the
consequences of any oversight or error of judgment whatsoever,
except that the Agent may be liable for losses due to its willful
misconduct or gross negligence.
Section 14.4. No Representations. The Agent shall not be
responsible for the execution or validity or enforceability of
this Agreement, the Notes, or any of the other Loan Documents or
for the validity, enforceability or collectibility of any such
amounts owing with respect to the Notes, or for any recitals or
statements, warranties or representations made herein or in any
of the other Loan Documents or in any certificate or instrument
hereafter furnished to it by or on behalf of any Guarantor or any
Borrower or any of their respective Subsidiaries, or be bound to
ascertain or inquire as to the performance or observance of any
of the terms, conditions, covenants or agreements in this
Agreement or the other Loan Documents. The Agent shall not be
bound to ascertain whether any notice, consent, waiver or request
delivered to it by any Borrower or any Guarantor or any holder of
any of the Notes shall have been duly authorized or is true,
accurate and complete. The Agent has not made nor does it now
make any representations or warranties, express or implied, nor
does it assume any liability to the Lenders, with respect to the
credit worthiness or financial condition of any Borrower or any
of its Subsidiaries or any Guarantor or any of the Subsidiaries
or any tenant under a Lease or any other entity. Each Lender
acknowledges that it has, independently and without reliance upon
the Agent or any other Lender, and based upon such information
and documents as it has deemed appropriate, made its own credit
analysis and decision to enter into this Agreement.
Section 14.5. Payments.
(a) A payment by the Borrowers to the Agent hereunder or
any of the other Loan Documents for the account of any Lender
shall constitute a payment to such Lender. The Agent agrees to
distribute to each Lender such Lender's pro rata share of
payments received by the Agent for the account of the Lenders, as
provided herein or in any of the other Loan Documents. All such
payments shall be made on the date received, if before 1:00 p.m.,
and if after 1:00 p.m., on the next Business Day. If payment is
not made on the day received, interest thereon at the overnight
federal funds effective rate shall be paid pro rata to the
Lenders.
(b) If in the reasonable opinion of the Agent the
distribution of any amount received by it in such capacity
hereunder, under the Notes or under any of the other Loan
Documents might involve it in material liability, it may refrain
from making distribution until its right to make distribution
shall have been adjudicated by a court of competent jurisdiction,
provided that interest thereon at the overnight federal funds
effective rate shall be paid pro rata to the Lenders. If a court
of competent jurisdiction shall adjudge that any amount received
and distributed by the Agent is to be repaid, each Person to whom
any such distribution shall have been made shall either repay to
the Agent its proportionate share of the amount so adjudged to be
repaid or shall pay over the same in such manner and to such
Persons as shall be determined by such court.
(c) Notwithstanding anything to the contrary contained in
this Agreement or any of the other Loan Documents, any Lender
that fails (i) to make available to the Agent its pro rata share
of any Loan or (ii) to comply with the provisions of Section 13
with respect to making dispositions and arrangements with the
other Lenders, where such Lender's share of any payment received,
whether by setoff or otherwise, is in excess of its pro rata
share of such payments due and payable to all of the Lenders, in
each case as, when and to the full extent required by the
provisions of this Agreement, or to adjust promptly such Lender's
outstanding principal and its pro rata Commitment Percentage as
provided in Section 2.1, shall be deemed delinquent (a
"Delinquent Lender") and shall be deemed a Delinquent Lender
until such time as such delinquency is satisfied. A Delinquent
Lender shall be deemed to have assigned any and all payments due
to it from the Borrowers, whether on account of outstanding
Loans, interest, fees or otherwise, to the remaining
nondelinquent Lenders for application to, and reduction of, their
respective pro rata shares of all outstanding Loans. The
Delinquent Lender hereby authorizes the Agent to distribute such
payments to the nondelinquent Lenders in proportion to their
respective pro rata shares of all outstanding Loans. If not
previously satisfied directly by the Delinquent Lender, a
Delinquent Lender shall be deemed to have satisfied in full a
delinquency when and if, as a result of application of the
assigned payments to all outstanding Loans of the nondelinquent
Lenders, the Lenders' respective pro rata shares of all
outstanding Loans have returned to those in effect immediately
prior to such delinquency and without giving effect to the
nonpayment causing such delinquency.
Section 14.6. Holders of Notes. The Agent may deem and
treat the payee of any Notes as the absolute owner thereof for
all purposes hereof until it shall have been furnished in writing
with a different name by such payee or by a subsequent holder,
assignee or transferee.
Section 14.7. Indemnity. The Lenders ratably and severally
agree hereby to indemnify and hold harmless the Agent and its
Affiliates from and against any and all claims, actions and suits
(whether groundless or otherwise), losses, damages, costs,
expenses (including any expenses for which the Agent has not been
reimbursed by the Borrowers as required by Section 15), and
liabilities of every nature and character arising out of or
related to this Agreement, the Notes, or any of the other Loan
Documents or the transactions contemplated or evidenced hereby or
thereby, or the Agent's actions taken hereunder or thereunder,
except to the extent that any of the same shall be directly
caused by the Agent's willful misconduct or gross negligence.
Section 14.8. Agent as Lender. In its individual capacity
as a Lender, Fleet shall have the same obligations and the same
rights, powers and privileges in respect to its Commitment and
the Loans made by it, and as the holder of any of the Notes, as
it would have were it not also the Agent.
Section 14.9. Notification of Defaults and Events of
Default. Each Lender hereby agrees that, upon learning of the
existence of a default, Default or an Event of Default, it shall
(to the extent notice has not previously been provided) promptly
notify the Agent thereof. The Agent hereby agrees that upon
receipt of any notice under this Section 14.9 it shall promptly
notify the other Lenders of the existence of such default,
Default or Event of Default.
Section 14.10. Duties in the Case of Enforcement. In case
one or more Events of Default have occurred and shall be
continuing, and whether or not acceleration of the Obligations
shall have occurred, the Agent shall, if (a) so requested by the
Required Lenders and (b) the Lenders have provided to the Agent
such additional indemnities and assurances against expenses and
liabilities as the Agent may reasonably request, proceed to
enforce the provisions of this Agreement and exercise all or any
such other legal and equitable and other rights or remedies as it
may have in respect of enforcement of the Lenders' rights against
the Borrowers and the Guarantors under this Agreement and the
other Loan Documents. The Required Lenders may direct the Agent
in writing as to the method and the extent (other than when such
direction requires Unanimous Lender Approval under Section 25) of
any such enforcement, the Lenders (including any Lender which is
not one of the Required Lenders) hereby agreeing to ratably and
severally indemnify and hold the Agent harmless from all
liabilities incurred in respect of all actions taken or omitted
in accordance with such directions, provided that the Agent need
not comply with any such direction to the extent that the Agent
reasonably believes the Agent's compliance with such direction to
be unlawful or commercially unreasonable in any applicable
jurisdiction.
Section 14.11. Successor Agent. Fleet, or any successor
Agent, may resign as Agent at any time by giving written notice
thereof to the Lenders and to the Borrowers. In addition, the
Required Lenders may remove the Agent in the event of the Agent's
gross negligence or willful misconduct or in the event that the
Agent ceases to hold a Commitment of at least $20,000,000 or a
Commitment Percentage of at least ten percent (10%) under this
Agreement. Any such resignation or removal shall be effective
upon appointment and acceptance of a successor Agent, as
hereinafter provided. Upon any such resignation or removal, the
Required Lenders shall have the right to appoint a successor
Agent, which is a Lender under this Agreement, provided that so
long as no Default or Event of Default has occurred and is
continuing the Borrowers shall have the right to approve any
successor Agent, which approval shall not be unreasonably
withheld. If, in the case of a resignation by the Agent, no
successor Agent shall have been so appointed by the Required
Lenders and approved by the Borrowers, and shall have accepted
such appointment, within thirty (30) days after the retiring
Agent's giving of notice of resignation, then the retiring Agent
may, on behalf of the Lenders, appoint any one of the other
Lenders as a successor Agent. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with
all the rights, powers, privileges and duties of the retiring or
removed Agent, and the retiring or removed Agent shall be
discharged from all further duties and obligations as Agent under
this Agreement. After any Agent's resignation or removal
hereunder as Agent, the provisions of this Section 14 shall inure
to its benefit as to any actions taken or omitted to be taken by
it while it was Agent under this Agreement.
Section 14.12. Notices. Any notices or other information
required hereunder to be provided to the Agent shall be forwarded
by the Agent to each of the Lenders on the same day (if
practicable) and, in any case, on the next Business Day
following the Agent's receipt thereof.
Section 15. EXPENSES. The Borrowers jointly and
severally agree to pay (a) the reasonable costs of producing and
reproducing this Agreement, the other Loan Documents and the
other agreements and instruments mentioned herein, (b) the
reasonable fees, expenses and disbursements of the Agent's
outside counsel or any local counsel to the Agent incurred in
connection with the preparation, administration or interpretation
of the Loan Documents and other instruments mentioned herein,
each closing hereunder, and amendments, modifications, approvals,
consents or waivers hereto or hereunder, (c) the fees, expenses
and disbursements of the Agent incurred by the Agent in
connection with the preparation, administration or interpretation
of the Loan Documents and other instruments mentioned herein, any
amendments, modifications, approvals, consents or waivers hereto
or hereunder, or the cancellation of any Loan Document upon
payment in full in cash of all of the Obligations or pursuant to
any terms of such Loan Document for providing for such
cancellation, including, without limitation, the fees and
disbursements of the Agent's counsel in preparing the
documentation, (d) the fees, costs, expenses and disbursements of
the Agent and its Affiliates incurred in connection with the
syndication and/or participations of the Loans, including,
without limitation, costs of preparing syndication materials and
photocopying costs, which syndication costs and expenses shall be
payable by the Borrowers regardless of whether the Loans are
ultimately syndicated, (e) all reasonable expenses (including
reasonable attorneys' fees and costs, which attorneys may be
employees of any Lender or the Agent, and the fees and costs of
appraisers, engineers, investment bankers, surveyors or other
experts retained by any Lender or the Agent in connection with
any such enforcement proceedings) incurred by any Lender or the
Agent in connection with (i) the enforcement of or preservation
of rights under any of the Loan Documents against any Borrower or
any of its Subsidiaries or any Guarantor or the administration
thereof after the occurrence and during the continuance of a
Default or Event of Default (including, without limitation,
expenses incurred in any restructuring and/or "workout" of the
Loans), and (ii) subject to the limitation set forth in
Section 16 hereof, any litigation, proceeding or dispute whether
arising hereunder or otherwise, in any way related to any
Lender's or the Agent's relationship with any Borrower or any of
its Subsidiaries or any Guarantor, (f) all reasonable fees,
expenses and disbursements of the Agent incurred in connection
with UCC searches and (g) all costs incurred by the Agent in the
future in connection with its inspection of the Unencumbered
Properties after the occurrence and during the continuance of an
Event of Default. The covenants of this Section 15 shall survive
payment or satisfaction of payment of amounts owing with respect
to the Notes.
Section 16. INDEMNIFICATION. The Borrowers jointly and
severally agree to indemnify and hold harmless the Agent and each
of the Lenders and the shareholders, directors, agents, officers,
subsidiaries and affiliates of the Agent and each of the Lenders
(each group consisting of the Agent or a Lender and its
respective shareholders, directors, agents, officers,
subsidiaries and affiliates being an "Indemnified Lender's
Group") from and against any and all claims, actions and suits,
whether groundless or otherwise, and from and against any and all
liabilities, losses, settlement payments, obligations, damages
and expenses of every nature and character, arising out of this
Agreement or any of the other Loan Documents or the transactions
contemplated hereby or thereby or which otherwise arise in
connection with the financing, including, without limitation, (a)
any actual or proposed use by any Borrower or any of its
Subsidiaries of the proceeds of any of the Loans, (b) any
Borrower or any of its Subsidiaries or any Guarantor entering
into or performing this Agreement or any of the other Loan
Documents or the transactions contemplated by this Agreement or
any of the other Loan Documents, or (c) pursuant to Section 7.17
hereof, in each case including, without limitation, the
reasonable fees and disbursements of counsel and allocated costs
of internal counsel incurred in connection with any such
investigation, litigation or other proceeding, provided, however,
that the Borrowers shall not be obligated under this Section 16
to indemnify any Person for liabilities arising from the gross
negligence or willful misconduct of such Person or of any other
Person in the Indemnified Lender's Group of which such Person is
a member (but such indemnification shall continue to apply to all
other Persons including all other Indemnified Lender's Groups).
Each Person to be indemnified under this Section 16 shall give
the Borrowers notice of any claim as to which it is seeking
indemnification under this Section 16 promptly after becoming
aware of the same (which shall constitute notice for all
Indemnified Lender's Groups), but such Person's failure to give
prompt notice shall not affect the obligations of the Borrowers
under this Section 16 unless such failure prejudices the legal
rights of the Borrowers regarding such indemnity. In litigation,
or the preparation therefor, the Borrowers shall be entitled to
select counsel reasonably acceptable to the Required Lenders, and
the Lenders (as approved by the Required Lenders) shall be
entitled to select their own supervisory counsel and, in addition
to the foregoing indemnity, the Borrowers agree to pay promptly
the reasonable fees and expenses of each such counsel if (i) in
the reasonable opinion of the Agent, use of counsel of the
Borrowers' choice could reasonably be expected to give rise to a
conflict of interest, (ii) the Borrowers shall not have employed
counsel reasonably satisfactory to the Agent and the Lenders
within a reasonable time after notice of the institution of any
such litigation or proceeding or (iii) the Borrower
Representative authorizes the Agent and the Lenders to employ
separate counsel at the Borrowers' expense. If and to the extent
that the obligations of the Borrowers under this Section 16 are
unenforceable for any reason, the Borrowers hereby agree to make
the maximum contribution to the payment in satisfaction of such
obligations which is permissible under applicable law. The
provisions of this Section 16 shall survive the repayment of the
Loans and the termination of the obligations of the Lenders
hereunder and shall continue in full force and effect as long as
the possibility of any such claim, action, cause of action or
suit exists.
Section 17. SURVIVAL OF COVENANTS, ETC. All covenants,
agreements, representations and warranties made herein, in the
Notes, in any of the other Loan Documents or in any documents or
other papers delivered by or on behalf of any Borrower or any of
its Subsidiaries or any Guarantor pursuant hereto shall be deemed
to have been relied upon by the Lenders and the Agent,
notwithstanding any investigation heretofore or hereafter made by
any of them, and shall survive the making by the Lenders of any
of the Loans, as herein contemplated, and shall continue in full
force and effect so long as any amount due under this Agreement
or the Notes or any of the other Loan Documents remains
outstanding or any Lender has any obligation to make any Loans.
The indemnification obligations of the Borrowers provided herein
and in the other Loan Documents shall survive the full repayment
of amounts due and the termination of the obligations of the
Lenders hereunder and thereunder to the extent provided herein
and therein. All statements contained in any certificate or
other paper delivered to any Lender or the Agent at any time by
or on behalf of any Borrower or any of its Subsidiaries or any
Guarantor pursuant hereto or in connection with the transactions
contemplated hereby shall constitute representations and
warranties by such Borrower or such Subsidiary or such Guarantor
hereunder.
Section 18. ASSIGNMENT; PARTICIPATIONS; ETC.
Section 18.1. Conditions to Assignment by Lenders. Except
as provided herein, each Lender may assign to one or more
Eligible Assignees all or a portion of its interests, rights and
obligations under this Agreement (including all or a portion of
its Commitment Percentage and Commitment and the same portion of
the Loans at the time owing to it, and the Notes held by it);
provided that (a) the Agent and, unless an Event of Default shall
have occurred and be continuing, the Borrower Representative each
shall have the right to approve any Eligible Assignee, which
approval by the Borrower Representative shall not be unreasonably
withheld or delayed, (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning
Lender's rights and obligations under this Agreement, (c) each
such assignment shall be in a minimum amount of $10,000,000 or an
integral multiple of $1,000,000 in excess thereof, (d) unless the
assigning Lender shall have assigned its entire Commitment, each
Lender shall have at all times an amount of its Commitment of not
less than $5,000,000 and (e) the parties to such assignment shall
execute and deliver to the Agent, for recording in the Register
(as hereinafter defined), an assignment and assumption,
substantially in the form of Exhibit F hereto (an "Assignment and
Assumption"), together with any Notes subject to such assignment.
Upon such execution, delivery, acceptance and recording, from and
after the effective date specified in each Assignment and
Assumption, which effective date shall be at least five (5)
Business Days after the execution thereof, (i) the assignee
thereunder shall be a party hereto and, to the extent provided in
such Assignment and Assumption, have the rights and obligations
of a Lender hereunder and thereunder, and (ii) the assigning
Lender shall, to the extent provided in such assignment and upon
payment to the Agent of the registration fee referred to in
Section 18.3, be released from its obligations under this
Agreement.
Section 18.2. Certain Representations and Warranties;
Limitations; Covenants. By executing and delivering an
Assignment and Assumption, the parties to the assignment
thereunder confirm to and agree with each other and the other
parties hereto as follows: (a) other than the representation and
warranty that it is the legal and beneficial owner of the
interest being assigned thereby free and clear of any adverse
claim, the assigning Lender makes no representation or warranty
and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this
Agreement or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement, the other
Loan Documents or any other instrument or document furnished
pursuant hereto; (b) the assigning Lender makes no representation
or warranty and assumes no responsibility with respect to the
financial condition of any Borrower or any of its Subsidiaries or
any Guarantor or any other Person primarily or secondarily liable
in respect of any of the Obligations, or the performance or
observance by any Borrower or any of its Subsidiaries or any
Guarantor or any other Person primarily or secondarily liable in
respect of any of the Obligations of any of their obligations
under this Agreement or any of the other Loan Documents or any
other instrument or document furnished pursuant hereto or
thereto; (c) such assignee confirms that it has received a copy
of this Agreement, together with copies of the most recent
financial statements referred to in Section 6.4 and Section 7.4
and such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter
into such Assignment and Assumption; (d) such assignee will,
independently and without reliance upon the assigning Lender, the
Agent or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action
under this Agreement; (e) such assignee represents and warrants
that it is an Eligible Assignee; (f) such assignee appoints and
authorizes the Agent to take such action as agent on its behalf
and to exercise such powers under this Agreement and the other
Loan Documents as are delegated to the Agent by the terms hereof
or thereof, together with such powers as are reasonably
incidental thereto; (g) such assignee agrees that it will perform
in accordance with their terms all of the obligations that by the
terms of this Agreement are required to be performed by it as a
Lender; and (h) such assignee represents and warrants that it is
legally authorized to enter into such Assignment and Assumption.
Section 18.3. Register. The Agent shall maintain a copy of
each Assignment and Assumption delivered to it and a register or
similar list (the "Register") for the recordation of the names
and addresses of the Lenders and the Commitment Percentages of,
and principal amount of the Loans owing to, the Lenders from time
to time. The entries in the Register shall be conclusive, in the
absence of manifest error, and the Borrowers, the Agent and the
Lenders may treat each Person whose name is recorded in the
Register as a Lender hereunder for all purposes of this
Agreement. The Register shall be available for inspection by the
Borrowers and the Lenders at any reasonable time and from time to
time upon reasonable prior notice. Upon each such recordation,
the assigning Lender agrees to pay to the Agent a registration
fee in the sum of $2,500.
Section 18.4. New Revolving Credit Notes. Upon its receipt
of an Assignment and Assumption executed by the parties to such
assignment, together with each Note subject to such assignment,
the Agent shall (a) record the information contained therein in
the Register, and (b) give prompt notice thereof to the Borrowers
and the Lenders (other than the assigning Lender). Within five
(5) Business Days after receipt of such notice, the Borrowers, at
its own expense, (i) shall execute and deliver to the Agent, in
exchange for each surrendered Note, a new Note to the order of
such Eligible Assignee in an amount equal to the amount assumed
by such Eligible Assignee pursuant to such Assignment and
Assumption and, if the assigning Lender has retained some portion
of its obligations hereunder, a new Note to the order of the
assigning Lender in an amount equal to the amount retained by it
hereunder and (ii) shall deliver an opinion from counsel to the
Borrowers in substantially the form delivered on the Closing Date
pursuant to Section 10.8 as to the enforceability of such new
Notes. Such new Notes shall provide that they are replacements
for the surrendered Notes, shall be in an aggregate principal
amount equal to the aggregate principal amount of the surrendered
Notes, shall be dated the effective date of such Assignment and
Assumption and shall otherwise be in substantially the form of
the assigned Notes. The surrendered Notes shall be cancelled and
returned to the Borrowers.
Section 18.5. Participations. Each Lender may sell
participations to one or more banks or other entities in all or a
portion of such Lender's rights and obligations under this
Agreement and the other Loan Documents; provided that (a) each
such participation shall be in an amount of not less than
$10,000,000, (b) any such sale or participation shall not affect
the rights and duties of the selling Lender hereunder to the
Borrowers and the Agent and the Lender shall continue to exercise
all approvals, disapprovals and other functions of a Lender, (c)
the only rights granted to the participant pursuant to such
participation arrangements with respect to waivers, amendments or
modifications of, or approvals under, the Loan Documents shall be
the rights to approve waivers, amendments or modifications that
would reduce the principal of or the interest rate on any Loans,
extend the term or increase the amount of the Commitment of such
Lender as it relates to such participant, reduce the amount of
any fees to which such participant is entitled or extend any
regularly scheduled payment date for principal or interest, and
(d) no participant shall have the right to grant further
participations or assign its rights, obligations or interests
under such participation to other Persons without the prior
written consent of the Agent.
Section 18.6. Pledge by Lender. Notwithstanding any other
provision of this Agreement, any Lender at no cost to the
Borrowers may at any time pledge all or any portion of its
interest and rights under this Agreement (including all or any
portion of its Notes) to any of the twelve Federal Reserve Banks
organized under Section 4 of the Federal Reserve Act, 12 U.S.C.
Section 341. No such pledge or the enforcement thereof shall
release the pledgor Lender from its obligations hereunder or
under any of the other Loan Documents.
Section 18.7. No Assignment by Borrowers. None of the
Borrowers shall assign or transfer any of its rights or
obligations under any of the Loan Documents without prior
Unanimous Lender Approval.
Section 18.8. Disclosure. The Borrowers agree that, in
addition to disclosures made in accordance with standard banking
practices, any Lender may disclose information obtained by such
Lender pursuant to this Agreement to assignees or participants
and potential assignees or participants hereunder; provided that
such assignees or potential assignees shall be Eligible
Assignees. Any such disclosed information shall be treated by
any assignee or participant with the same standard of
confidentiality set forth in Section 7.10 hereof.
Section 18.9. Syndication. The Borrowers acknowledge that
the Agent intends, and shall have the right, by itself or through
its Affiliates, to syndicate or enter into co-lending
arrangements with respect to the Loans and the Total Commitment
pursuant to this Section 18, and the Borrowers agree to cooperate
with the Agent's and its Affiliate's syndication and/or
co-lending efforts, such cooperation to include, without
limitation, the provision of information reasonably requested by
potential syndicate members.
Section 19. NOTICES, ETC. Except as otherwise expressly
provided in this Agreement, all notices and other communications
made or required to be given pursuant to this Agreement or the
Notes shall be in writing and shall be delivered in hand, mailed
by United States registered or certified first class mail,
postage prepaid, sent by overnight courier, or sent by facsimile
and confirmed by delivery via courier or postal service,
addressed as follows:
(a) if to any Borrower or any Guarantor, to the Borrower
Representative at Sovran Self Storage, Inc., 5166 Main Street,
Williamsville, New York 14221, Attention: Mr. David L. Rogers,
Chief Financial Officer, with a copy to Phillips, Lytle,
Hitchcock, Blaine & Huber LLP, One Marine Midland Center,
Buffalo, New York 14203, Attention: Mr. Frederick G. Attea, or
to such other address for notice as the Borrower Representative
or any Guarantor shall have last furnished in writing to the
Agent;
(b) if to the Agent, at 111 Westminster Street, Mail Code
RI-MO-215, Providence, Rhode Island 02903, Attention: Mark E.
Dalton, Vice President, or such other address for notice as the
Agent shall have last furnished in writing to the Borrowers, with
a copy to Paul M. Vaughn, Esq., Bingham Dana LLP, 150 Federal
Street, Boston, Massachusetts 02110, or at such other address
for notice as the Agent shall last have furnished in writing to
the Person giving the notice; and additionally, for any Completed
Revolving Credit Loan Request, to Agency Services, Fleet
Corporate Administration, Mail Stop MA OF D05P, One Federal
Street, Boston, Massachusetts 02110, Attention: Timothy J.
Callahan, Senior Loan Administrator; and
(c) if to any Lender, at such Lender's address set forth on
Schedule 1.2 hereto, or such other address for notice as such
Lender shall have last furnished in writing to the Person giving
the notice.
Any such notice or demand shall be deemed to have been duly
given or made and to have become effective (i) if delivered by
hand, overnight courier or facsimile to the party to which it is
directed, at the time of the receipt thereof by such party or the
sending of such facsimile with electronic confirmation of receipt
and (ii) if sent by registered or certified first-class mail,
postage prepaid, on the fifth Business Day following the mailing
thereof.
Section 20. GOVERNING LAW; CONSENT TO JURISDICTION AND
SERVICE. THIS AGREEMENT AND EACH OF THE OTHER LOAN DOCUMENTS,
EXCEPT AS OTHERWISE SPECIFICALLY PROVIDED THEREIN, ARE CONTRACTS
UNDER THE LAWS OF THE STATE OF NEW YORK AND SHALL FOR ALL
PURPOSES BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS
OF THE STATE OF NEW YORK (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW). EACH OF THE BORROWERS AND THE
GUARANTORS AGREES THAT ANY SUIT FOR THE ENFORCEMENT OF THIS
AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS MAY BE BROUGHT IN
THE COURTS OF THE STATE OF NEW YORK SITTING IN NEW YORK, NEW YORK
OR ANY FEDERAL COURT SITTING IN NEW YORK, NEW YORK AND CONSENTS
TO THE NON-EXCLUSIVE JURISDICTION OF SUCH COURTS AND THE SERVICE
OF PROCESS IN ANY SUCH SUIT BEING MADE UPON THE BORROWERS OR THE
GUARANTORS BY MAIL AT THE ADDRESS SPECIFIED IN SECTION 19. THE
BORROWERS AND EACH OF THE GUARANTORS HEREBY WAIVES ANY OBJECTION
THAT EITHER OF THEM MAY NOW OR HEREAFTER HAVE TO THE VENUE OF ANY
SUCH SUIT OR ANY SUCH COURT OR THAT SUCH SUIT IS BROUGHT IN AN
INCONVENIENT COURT.
Section 21. HEADINGS. The captions in this Agreement are
for convenience of reference only and shall not define or limit
the provisions hereof.
Section 22. COUNTERPARTS. This Agreement and any
amendment hereof may be executed in several counterparts and by
each party on a separate counterpart, each of which when so
executed and delivered shall be an original, and all of which
together shall constitute one instrument. In proving this
Agreement it shall not be necessary to produce or account for
more than one such counterpart signed by the party against whom
enforcement is sought.
Section 23. ENTIRE AGREEMENT, ETC. The Loan Documents
and any other documents executed in connection herewith or
therewith express the entire understanding of the parties with
respect to the transactions contemplated hereby. Neither this
Agreement nor any term hereof may be changed, waived, discharged
or terminated, except as provided in Section 25.
Section 24. WAIVER OF JURY TRIAL AND CERTAIN DAMAGE
CLAIMS. EXCEPT TO THE EXTENT EXPRESSLY PROHIBITED BY LAW, EACH
OF THE BORROWERS, EACH OF THE GUARANTORS, THE AGENT AND EACH OF
THE LENDERS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVES ITS RESPECTIVE RIGHTS TO A JURY TRIAL WITH RESPECT TO ANY
ACTION OR CLAIM ARISING OUT OF ANY DISPUTE IN CONNECTION WITH
THIS AGREEMENT, THE REVOLVING CREDIT NOTES OR ANY OF THE OTHER
LOAN DOCUMENTS, ANY RIGHTS OR OBLIGATIONS HEREUNDER OR THEREUNDER
OR THE PERFORMANCE OF SUCH RIGHTS AND OBLIGATIONS OR ANY COURSE
OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER VERBAL OR
WRITTEN) OR ACTIONS OF ANY PARTY. EXCEPT TO THE EXTENT EXPRESSLY
PROHIBITED BY LAW, EACH OF THE BORROWERS AND EACH OF THE
GUARANTORS HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES
ANY RIGHT ANY OF THEM MAY HAVE TO CLAIM OR RECOVER IN ANY
LITIGATION REFERRED TO IN THE PRECEDING SENTENCE ANY SPECIAL,
EXEMPLARY, PUNITIVE OR CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER
THAN, OR IN ADDITION TO, ACTUAL DAMAGES. EACH OF THE BORROWERS
AND THE GUARANTORS (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR
ATTORNEY OF ANY LENDER OR THE AGENT HAS REPRESENTED, EXPRESSLY OR
OTHERWISE, THAT SUCH LENDER OR THE AGENT WOULD NOT, IN THE EVENT
OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVERS AND (B)
ACKNOWLEDGE THAT THE AGENT AND THE LENDERS HAVE BEEN INDUCED TO
ENTER INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS TO WHICH
THEY ARE PARTIES BY, AMONG OTHER THINGS, THE WAIVERS AND
CERTIFICATIONS CONTAINED HEREIN.
Section 25. CONSENTS, AMENDMENTS, WAIVERS, ETC. Except
as otherwise expressly provided in this Agreement, any consent or
approval required or permitted by this Agreement may be given,
and any term of this Agreement or of any of the other Loan
Documents may be amended, and the performance or observance by
any Borrower or any Guarantor of any terms of this Agreement or
the other Loan Documents or the continuance of any default,
Default or Event of Default may be waived (either generally or in
a particular instance and either retroactively or prospectively)
with, but only with, the written consent of the Required Lenders.
Notwithstanding the foregoing, Unanimous Lender Approval
shall be required for any amendment, modification or waiver of
this Agreement that:
(i) reduces or forgives any principal of any
unpaid Loan or any interest thereon (including any
interest "breakage" costs) or any fees due any Lender
hereunder, or permits any prepayment not otherwise
permitted hereunder; or
(ii) changes the unpaid principal amount of, or
the rate of interest on, any Loan; or
(iii) changes the date fixed for any payment of
principal of or interest on any Loan (including,
without limitation, any extension of the Maturity Date)
or any fees payable hereunder; or
(iv) changes the amount of any Lender's Commitment
(other than pursuant to an assignment permitted under
Section 18.1 hereof) or increases the amount of the
Total Commitment; or
(v) releases or reduces the liability of any
Guarantor pursuant to its Guaranty other than as
provided in Section 5; or
(vi) modifies this Section 25 or any other
provision herein or in any other Loan Document which by
the terms thereof expressly requires Unanimous Lender
Approval; or
(vii) amends any of the provisions governing
funding contained in Section 2 hereof; or
(viii) changes the rights, duties or obligations of
the Agent specified in Section 14 hereof (provided that
no amendment or modification to such Section 14 or to
the fee payable to the Agent under this Agreement may
be made without the prior written consent of the
Agent); or
(ix) changes the definitions of Required Lenders
or Unanimous Lender Approval.
No waiver shall extend to or affect any obligation not expressly
waived or impair any right consequent thereon. No course of
dealing or delay or omission on the part of the Agent or the
Lenders or any Lender in exercising any right shall operate as a
waiver thereof or otherwise be prejudicial to such right or any
other rights of the Agent or the Lenders. No notice to or demand
upon any Borrower shall entitle any Borrower to other or further
notice or demand in similar or other circumstances.
Section 26. SEVERABILITY. The provisions of this
Agreement are severable, and if any one clause or provision
hereof shall be held invalid or unenforceable in whole or in part
in any jurisdiction, then such invalidity or unenforceability
shall affect only such clause or provision, or part thereof, in
such jurisdiction, and shall not in any manner affect such
clause or provision in any other jurisdiction, or any other
clause or provision of this Agreement in any jurisdiction.
IN WITNESS WHEREOF, the undersigned have duly executed this
Agreement as a sealed instrument as of the date first set forth
above.
SOVRAN SELF STORAGE, INC.
By:
Name:
Title:
SOVRAN ACQUISITION LIMITED
PARTNERSHIP
By: Sovran Holdings Inc.,
its general partner
By:
Name:
Title:
FLEET NATIONAL BANK,
individually and as Agent
By:
Name:
Title:
FIRST UNION NATIONAL BANK
By:
Name:
Title:
CREDITANSTALT CORPORATE FINANCE,
INC.
By:
Name:
Title:
By:
Name:
Title:
CRESTAR BANK
By:
Name:
Title:
PNC BANK, NATIONAL ASSOCIATION
By:
Name:
Title:
MARINE MIDLAND BANK
By:
Name:
Title:
DRESDNER BANK AG, NEW YORK
BRANCH AND GRAND CAYMAN
BRANCH
By:
Name:
Title:
By:
Name:
Title:
Schedule 1.2
Lender Commitment Amount Commitment Percentage
Fleet National Bank
One Federal Street
Boston, MA 02110 $ 26,250,000 17.5%
First Union National Bank
One First Union Center
Charlotte, NC 28288-0166 $ 26,250,000 17.5%
Creditanstalt Corporate Finance, Inc.
Two Greenwich Plaza
Greenwich, CT 06830-6353 $ 26,250,000 17.5%
Crestar Bank
8245 Boone Boulevard, Suite 820
Vienna, VA 22181-3872 $ 18,750,000 12.5%
PNC Bank, National Association
249 Fifth Avenue
Pittsburgh, PA 15222 $ 18,750,000 12.5%
Marine Midland Bank
One Marine Midland Center
Buffalo, NY 14203-2842 $ 18,750,000 12.5%
Dresdner Bank AG, New York Branch
and Grand Cayman Branch
75 Wall Street
New York, NY 10005-2886 $ 15,000,000 10.0%
TOTAL $150,000,000 100%