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CREDIT AGREEMENT
among
ELDERTRUST,
ELDERTRUST OPERATING LIMITED PARTNERSHIP,
VARIOUS BANKS,
DEUTSCHE BANK AG, NEW YORK BRANCH,
as ISSUING BANK
and
GERMAN AMERICAN CAPITAL CORPORATION,
as ADMINISTRATIVE AGENT
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Dated as of January 30, 1998
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$140,000,000
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TABLE OF CONTENTS
SECTION 1.1. Amount and Terms of Credit; Letters of Credit.......................................................1
1.01 The Commitments....................................................................................1
1.02 Minimum Amount of Each Borrowing...................................................................1
1.03 Notice of Borrowing................................................................................1
1.04 Disbursement of Funds..............................................................................2
1.05 Notes..............................................................................................3
1.06 Conversions........................................................................................3
1.07 Pro Rata Borrowings................................................................................4
1.08 Interest...........................................................................................4
1.09 Interest Periods...................................................................................5
1.10 Increased Costs, Illegality, etc. in Respect of Loans..............................................5
1.11 Compensation.......................................................................................7
1.12 Change of Lending Office...........................................................................8
1.13 Letters of Credit..................................................................................8
1.14 Maximum Letter of Credit Outstandings; Final Maturities............................................9
1.15 Letter of Credit Requests; Minimum Stated Amount...................................................9
1.16 Letter of Credit Participations...................................................................10
1.17 Agreement to Repay Letter of Credit Drawings......................................................12
1.18 Increased Costs in Respect of Letters of Credit...................................................12
SECTION 2. Fees; Reductions of Commitment.....................................................................13
2.01 Fees..............................................................................................13
2.02 Voluntary Termination of Unutilized Commitments...................................................14
2.03 Mandatory Termination of Commitments; Extension of Maturity Date..................................14
SECTION 3. Prepayments; Payments; Taxes......................................................................15
3.01 Voluntary Prepayments.............................................................................15
3.02 Mandatory Repayments..............................................................................16
3.03 Method and Place of Payment.......................................................................17
3.04 Net Payments; Taxes...............................................................................17
SECTION 4. Conditions Precedent to Effective Date............................................................20
4.01 Execution of Agreement, Notes ....................................................................20
4.02 Fees, etc.........................................................................................20
4.03 Opinions of Counsel...............................................................................20
4.04 Corporate and Partnership Documents; Proceedings; etc.............................................20
4.05 Debt Agreements...................................................................................21
4.06 Pledge Agreement..................................................................................21
4.07 Pledge and Security Agreement and Security Agreement..............................................21
4.08 Subsidiaries Guaranty.............................................................................22
4.09 Collateral Assignments; Mortgages; Title Insurance; Surveys; etc..................................22
4.10 IPO...............................................................................................24
4.11 Adverse Change, etc...............................................................................24
4.12 Litigation........................................................................................24
4.13 Initial Borrowing Base Properties, etc............................................................24
4.14 Solvency Certificate..............................................................................25
4.15 Pro Forma Balance Sheets..........................................................................25
4.16 Initial Borrowing Base Certificate................................................................26
4.17 No Default; Representations and Warranties........................................................26
4.18 REIT Equity Interests Widely Held.................................................................26
SECTION 5. Conditions Precedent to All Loans and Letters of Credit...........................................26
5.01 No Default; Representations and Warranties........................................................26
5.02 Notice of Borrowing...............................................................................27
5.03 Property Information; etc.........................................................................27
5.04 Certain Requirements with Respect to Loans and Letters of Credit..................................27
5.05 Subsequent Legal Opinions.........................................................................28
SECTION 6. Representations and Warranties....................................................................28
6.01 Status............................................................................................29
6.02 Power and Authority...............................................................................29
6.03 No Violation......................................................................................29
6.04 Governmental Approvals............................................................................30
6.05 Financial Statements; Financial Condition; Undisclosed Liabilities; Projections; etc..............30
6.06 Litigation........................................................................................32
6.07 True and Complete Disclosure......................................................................32
6.08 Use of Proceeds; Margin Regulations...............................................................32
6.09 Tax Returns and Payments..........................................................................32
6.10 Compliance with ERISA.............................................................................33
6.11 The Security Documents............................................................................34
6.12 Status as REIT....................................................................................36
6.13 Properties........................................................................................36
6.14 Healthcare Matters................................................................................36
6.15 Subsidiaries......................................................................................38
6.16 Compliance with Statutes, etc.....................................................................38
6.17 Investment Company Act............................................................................38
6.18 Public Utility Holding Company Act................................................................38
6.19 Environmental Matters.............................................................................38
6.20 Labor Relations...................................................................................39
6.21 Intellectual Property.............................................................................39
6.22 Indebtedness......................................................................................39
(ii)
6.23 Operating Leases; Management Agreements; Ground Leases............................................40
SECTION 7. Affirmative Covenants.............................................................................40
7.01 Information Covenants.............................................................................40
7.02 Books, Records and Inspections....................................................................44
7.03 Maintenance of Property; Insurance................................................................45
7.04 Corporate Franchises..............................................................................47
7.05 Compliance with Statutes, etc.....................................................................47
7.06 Compliance with Environmental Laws................................................................48
7.07 ERISA.............................................................................................48
7.08 End of Fiscal Years; Fiscal Quarters..............................................................50
7.09 Performance of Obligations........................................................................50
7.10 Payment of Taxes..................................................................................50
7.11 Certain Requirements with Respect to Acquisitions of Borrowing Base Properties
and Provision or Purchase of Borrowing Base Pledged Mortgage Loans................................50
7.12 Certain Partnerships..............................................................................55
7.13 Operating Leases; Management Agreements and Pledged Mortgage Loan Documents.......................56
7.14 Lien Waivers; etc.................................................................................56
7.15 Appraisals........................................................................................56
7.16 Casualty and Condemnation; Restoration............................................................56
7.17 REIT Requirements.................................................................................64
7.18 Syndication Cooperation...........................................................................64
SECTION 8. Negative Covenants................................................................................64
8.01 Liens.............................................................................................65
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc............................................67
8.03 Dividends.........................................................................................71
8.04 Indebtedness......................................................................................72
8.05 Advances, Investments and Loans...................................................................73
8.06 Transactions with Affiliates......................................................................74
8.07 Capital Expenditures..............................................................................74
8.08 Minimum Equity Value; Minimum Tangible Net Worth..................................................75
8.09 Total Leverage Ratio..............................................................................75
8.10 Minimum Interest Coverage Ratio...................................................................75
8.11 Public REIT Status................................................................................75
8.12 Limitation on Creation of Subsidiaries............................................................75
8.13 Limitation on Payments of Certain Indebtedness; Modifications of Certain
Indebtedness; Modifications of Certificate of Incorporation, By-Laws and Certain
Agreements; etc...................................................................................76
8.14 Limitation on Certain Restrictions on Subsidiaries................................................76
8.15 Limitation on Issuance of Capital Stock...........................................................77
8.16 Business..........................................................................................77
(iii)
8.17 Borrowing Base....................................................................................77
SECTION 9. Events of Default................................................................................77
9.01 Payments.........................................................................................77
9.02 Representations, etc.............................................................................78
9.03 Covenants........................................................................................78
9.04 Default Under Other Agreements...................................................................78
9.05 Bankruptcy, etc..................................................................................78
9.06 ERISA............................................................................................79
9.07 Security Documents...............................................................................79
9.08 Guaranty.........................................................................................80
9.09 Judgments........................................................................................80
9.10 Change of Control................................................................................80
9.11 Initial Borrowing Base Collateral................................................................80
SECTION 10. Definitions and Accounting Terms.................................................................81
10.01 Defined Terms.............................. .....................................................81
SECTION 11. The Administrative Agent........................................................................105
11.01 Appointment.....................................................................................105
11.02 Nature of Duties................................................................................105
11.03 Lack of Reliance on the Administrative Agent....................................................106
11.04 Certain Rights of the Administrative Agent......................................................106
11.05 Reliance........................................................................................106
11.06 Indemnification.................................................................................107
11.07 The Administrative Agent in its Individual Capacity.............................................107
11.08 Holders.........................................................................................107
11.09 Resignation by the Administrative Agent; Removal of the Administrative Agent....................107
SECTION 12. Miscellaneous...................................................................................108
12.01 Payment of Expenses, etc........................................................................108
12.02 Right of Setoff.................................................................................109
12.03 Notices.........................................................................................110
12.04 Benefit of Agreement............................................................................110
12.05 No Waiver; Remedies Cumulative..................................................................112
12.06 Payments Pro Rata...............................................................................112
12.07 Calculations; Computations......................................................................113
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE; WAIVER OF JURY TRIAL..........................113
12.09 Counterparts....................................................................................114
12.10 Effectiveness...................................................................................114
12.11 Headings Descriptive............................................................................115
12.12 Amendments or Waiver, etc.......................................................................116
12.13 Survival........................................................................................116
12.14 Domicile of Loans...............................................................................116
12.15 Confidentiality.................................................................................116
12.16 Register........................................................................................117
12.17 Commercial Loan Transactions....................................................................117
12.18 Servicing of Loans..............................................................................117
(iv)
Section 13. Parent Guaranty.................................................................................118
13.01 The Guaranty....................................................................................118
13.02 Bankruptcy......................................................................................118
13.03 Nature of Liability.............................................................................118
13.04 Independent Obligation..........................................................................118
13.05 Authorization...................................................................................119
13.06 Reliance........................................................................................120
13.07 Subordination...................................................................................120
13.08 Waiver..........................................................................................120
13.09 Nature of Liability.............................................................................121
13.10 Interest Rate Protection Agreements and
Other Agreements................................................................................121
(v)
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SCHEDULE I Commitments
SCHEDULE II Bank Addresses
SCHEDULE III Real Property; Initial Borrowing Base Properties
SCHEDULE IV Subsidiaries
SCHEDULE V Existing Indebtedness
SCHEDULE VI Insurance
SCHEDULE VII Existing Liens
SCHEDULE VIII Existing Mortgage Loans; Initial Borrowing Base Pledged Mortgage Loans
EXHIBIT A Notice of Borrowing
EXHIBIT B-1 Note
EXHIBIT B-2 Form of Letter of Credit Request
EXHIBIT C Section 3.04(b)(ii) Certificate
EXHIBIT D Opinion of Hogan & Hartson L.L.P.
EXHIBIT E Officers' Certificate
EXHIBIT F-1 Pledge Agreement
EXHIBIT F-2 Pledge and Security Agreement
EXHIBIT G Security Agreement
EXHIBIT H Subsidiaries Guaranty
EXHIBIT I Mortgage
EXHIBIT J Officer's Solvency Certificate
EXHIBIT K Collateral Assignment
EXHIBIT L Borrowing Base Certificate
EXHIBIT M-1 Quarterly Borrowing Base Property Financial Report
EXHIBIT M-2 Quarterly Borrowing Base Pledged Mortgage Loan Financial Report
EXHIBIT N Quarterly Cash Flow Report
EXHIBIT O Subordination Provisions
EXHIBIT P Assignment and Assumption Agreement
EXHIBIT Q Intercompany Note
EXHIBIT R Completion Certificate
EXHIBIT S Notice of Renovation/Restoration
(vi)
CREDIT AGREEMENT, dated as of January 30, 1998, among
ELDERTRUST, a Maryland real estate investment trust (the "REIT"), ELDERTRUST
OPERATING LIMITED PARTNERSHIP, a Delaware limited partnership (the
"Borrower"), the Banks party hereto from time to time, DEUTSCHE BANK AG, NEW
YORK BRANCH, as Issuing Bank (the "Issuing Bank") and GERMAN AMERICAN CAPITAL
CORPORATION, as Administrative Agent (all capitalized terms used herein and
defined in Section 10 are used herein as therein defined).
W I T N E S S E T H :
WHEREAS, subject to and upon the terms and conditions set
forth herein, the Banks and the Issuing Bank are willing to make available to
the Borrower the respective credit facilities provided for herein;
NOW, THEREFORE, IT IS AGREED:
SECTION 1.1. Amount and Terms of Credit; Letters of Credit.
1.0 The Commitments. Subject to and upon the terms and
conditions set forth herein, each Bank severally agrees, at any time and from
time to time on and after the Effective Date and prior to the Maturity Date,
to make a revolving loan or revolving loans (each, a "Loan" and, collectively,
the "Loans") to the Borrower, which Loans (i) shall, at the option of the
Borrower, be Base Rate Loans or Eurodollar Loans, provided that, except as
otherwise specifically provided in Section 1.10(b), all Loans comprising the
same Borrowing shall at all times be of the same Type, (ii) may be repaid and
reborrowed at any time in accordance with the provisions hereof, (iii) shall
not exceed for any Bank at any time outstanding that aggregate principal
amount which, when added to the product of (x) such Bank's Loan Percentage and
(y) the aggregate amount of all Letter of Credit Outstandings (exclusive of
Unpaid Drawings which are repaid with the proceeds of, and simultaneously with
the incurrence of, the respective incurrence of Loans) then outstanding,
equals the Commitment of such Bank at such time and (iv) shall not exceed for
all Banks at any time outstanding that aggregate principal amount which, when
added to the sum of all Letter of Credit Outstandings (exclusive of Unpaid
Drawings which are repaid with the proceeds of, and simultaneously with the
incurrence of, the respective incurrence of Loans) at such time, equals the
lesser of (x) the Total Commitment at such time and (y) the Borrowing Base at
such time.
1.02 Minimum Amount of Each Borrowing. The aggregate
principal amount of each Borrowing of Loans shall not be less than the Minimum
Borrowing Amount. Not more than one Borrowing may occur on the same date and
at no time shall there be outstanding more than ten Borrowings of Eurodollar
Loans.
1.03 Notice of Borrowing. a) (a) Whenever
the Borrower desires to incur a Borrowing of Loans, the Borrower shall give
the Administrative Agent at the Notice Office at least three Business Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Eurodollar Loan and at least one Business Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Base Rate Loan to be
made hereunder, provided that any such notice shall be deemed to have been
given on a certain day only if given before 11:00 A.M. (New York time) on such
day. Each such written notice or written confirmation of telephonic notice
(each a "Notice of Borrowing"), except as otherwise expressly provided in
Section 1.10, shall be irrevocable and shall be given by the Borrower in the
form of Exhibit A, appropriately completed to specify (i) the aggregate
principal amount of the Loans to be incurred pursuant to such Borrowing, (ii)
the date of such Borrowing (which shall be a Business Day), (iii) the specific
uses to be made of the proceeds of such Loans and (iv) whether the Loans being
incurred pursuant to such Borrowing are to be initially maintained as Base
Rate Loans or Eurodollar Loans. The Administrative Agent shall promptly give
each Bank facsimile or other written notice of such proposed Borrowing, of
such Bank's proportionate share thereof and of the other matters required by
the immediately preceding sentence to be specified in the Notice of Borrowing.
Notwithstanding anything to the contrary contained in this Agreement, unless
the Administrative Agent otherwise agrees, no more than four Notices of
Borrowing may be given in any 30 consecutive day period.
(b) Without in any way limiting the obligation of the
Borrower to confirm in writing any telephonic notice of any Borrowing of
Loans, the Administrative Agent may act without liability upon the basis of
telephonic notice of such Borrowing believed by the Administrative Agent in
good faith to be from an Authorized Officer of the Borrower prior to receipt
of written confirmation. In each such case, the Borrower hereby waives the
right to dispute the Administrative Agent's record of the terms of such
telephonic notice of such Borrowing.
1.04 Disbursement of Funds. No later than 2:00 P.M. (New
York time) on the date specified in each Notice of Borrowing, each Bank which
has received the notice referred to in the next to last sentence of Section
1.03(a) will disburse its pro rata portion of each Borrowing requested to be
made on such date. All such amounts shall be disbursed in Dollars and in
immediately available funds at the Payment Office, and the Administrative
Agent will promptly disburse to the Borrower at the Payment Office, in Dollars
and in immediately available funds, the aggregate of the amounts so made
available by the Banks. Unless the Administrative Agent shall have been
notified by any Bank prior to the date of Borrowing that such Bank does not
intend to disburse to the Administrative Agent such Bank's portion of any
Borrowing to be made on such date, the Administrative Agent may assume that
such Bank has disbursed such amount to the Administrative Agent on such date
of Borrowing and the Administrative Agent may, in reliance upon such
assumption, disburse to the Borrower a corresponding amount. If such
corresponding amount is not in fact disbursed to the Administrative Agent by
such Bank, the Administrative Agent shall be entitled to recover such
corresponding amount on demand from such Bank. If such Bank does not pay such
corresponding amount forthwith upon the Administrative Agent's demand
therefor, the Administrative Agent shall promptly notify the Borrower and the
Borrower shall within one Business Day thereafter pay such corresponding
amount to the Administrative Agent. The Administrative Agent shall also be
entitled to recover on demand from such Bank or the Borrower, as the case may
be, interest on such corresponding amount in respect of each day from the date
such corresponding amount was disbursed by the Administrative Agent to the
Borrower until the date such corresponding amount is recovered by the
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Administrative Agent, at a rate per annum equal to (i) if recovered from such
Bank, the overnight Federal Funds Rate and (ii) if recovered from the
Borrower, the rate of interest applicable to the respective Borrowing, as
determined pursuant to Section 1.08. Nothing in this Section 1.04 shall be
deemed to relieve any Bank from its obligation to make Loans hereunder or to
prejudice any rights which the Borrower may have against any Bank as a result
of any failure by such Bank to make Loans hereunder.
1.05 Notes. (a) The Borrower's obligation to pay the
principal of, and interest on, the Loans made by each Bank to the Borrower
shall be evidenced by a promissory note duly executed and delivered by the
Borrower substantially in the form of Exhibit B-1 with blanks appropriately
completed in conformity herewith (each, a "Note" and, collectively, the
"Notes"). The Note issued by the Borrower to each Bank shall (i) be executed
by the Borrower, (ii) be payable to such Bank or its registered assigns and be
dated the Effective Date (or, if issued after the Effective Date, be dated the
date of the issuance thereof), (iii) be in a stated principal amount equal to
the Commitment of such Bank (or, if issued after the termination of such
Commitment, be in a stated principal amount equal to the outstanding Loans of
such Bank at such time) and be payable in the principal amount of the
outstanding Loans evidenced thereby, (iv) mature on the Maturity Date, (v)
bear interest as provided in the appropriate clause of Section 1.08 in respect
of the Base Rate Loans and Eurodollar Loans, as the case may be, evidenced
thereby, (vi) be subject to voluntary prepayment as provided in Section 3.01,
or mandatory repayment as provided in Section 3.02 and (vii) be entitled to
the benefits of this Agreement and the other Credit Documents.
(b) Each Bank will note on its internal records the amount
of each Loan made by it and each payment in respect thereof and will prior to
any transfer of its Note properly endorse on the reverse side thereof the
outstanding principal amount of Loans evidenced thereby. Failure to make any
such notation (or any error in such notation) shall not affect the Borrower's
obligations to the holder from time to time of such Note in respect of such
Loans.
1.06 Conversions. The Borrower shall have the option to
convert, on any Business Day occurring after the Effective Date, all or a
portion equal to at least the Minimum Borrowing Amount of the outstanding
principal amount of Loans made to the Borrower into a Borrowing or Borrowings
of another Type of Loan, provided that (i) except as otherwise provided in
Section 1.10(b), Eurodollar Loans may be converted into Base Rate Loans only
on the last day of an Interest Period applicable to the Loans being converted
and no partial conversion of a Borrowing of Eurodollar Loans shall reduce the
outstanding principal amount of such Eurodollar Loans made pursuant to a
single Borrowing to less than the Minimum Borrowing Amount, (ii) Base Rate
Loans may only be converted into Eurodollar Loans if no Default or Event of
Default is in existence on the date of the conversion, and (iii) no conversion
pursuant to this Section 1.06 shall result in a greater number of Borrowings
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of Eurodollar Loans than is permitted under Section 1.02. Each such conversion
shall be effected by the Borrower by giving the Administrative Agent at the
Notice Office prior to 11:00 A.M. (New York time) at least three Business
Days' prior written notice (or two Business Day's prior written notice in the
case of a conversion of Eurodollar Loans into Base Rate Loans) (each a "Notice
of Conversion") specifying the Loans to be so converted and the Borrowing(s)
pursuant to which such Loans were made. The Administrative Agent shall give
each Bank prompt notice of any such proposed conversion affecting any of its
Loans.
1.07 Pro Rata Borrowings. All Borrowings of Loans shall be
incurred from the Banks pro rata on the basis of their respective Commitments.
It is understood that no Bank shall be responsible for any default by any
other Bank of its obligation to make Loans hereunder and that each Bank shall
be obligated to make the Loans provided to be made by it hereunder, regardless
of the failure of any other Bank to make its Loans hereunder.
1.08 Interest. (a) The Borrower agrees to pay interest in
respect of the unpaid principal amount of each Base Rate Loan from the date
the proceeds thereof are made available to the Borrower until the earlier of
(i) the maturity (whether by acceleration or otherwise) of such Base Rate Loan
and (ii) the conversion of such Base Rate Loan to a Eurodollar Loan pursuant
to Section 1.06, at a rate per annum which shall be equal to the sum of the
Applicable Margin plus the Base Rate in effect from time to time.
(b) The Borrower agrees to pay interest in respect of the
unpaid principal amount of each Eurodollar Loan from the date the proceeds
thereof are made available to the Borrower until the earlier of (i) the
maturity (whether by acceleration or otherwise) of such Eurodollar Loan and
(ii) the conversion of such Eurodollar Loan to a Base Rate Loan pursuant to
Section 1.06, 1.09 or 1.10, as applicable, at a rate per annum which shall,
during each Interest Period applicable thereto, be equal to the sum of the
Applicable Margin plus the Eurodollar Rate for such Interest Period.
(c) Overdue principal and, to the extent permitted by law,
overdue interest in respect of each Loan and any other overdue amount payable
hereunder or under any of the other Credit Documents shall, in each case, bear
interest at a rate per annum equal to the greater of (x) 5% per annum in
excess of the rate otherwise applicable to Base Rate Loans from time to time
and (y) the rate which is 5% in excess of the rate then borne by such Loans
(without giving effect to any increase in the rate borne by such Loans as a
result of the operation of this clause (c)), in each case with such interest
to be payable on demand. Borrower shall pay an amount equal to 5% of any
amount due hereunder or under any other Credit Document that is not paid prior
to the fifth day after the date on which it is due, to defray the expenses
incurred by the Administrative Agent and the Banks in handling and processing
the delinquent payment and to compensate the Banks for the loss of the use of
the delinquent payment, and the payment of such amount shall be secured by the
Security Documents.
(d) Accrued (and theretofore unpaid) interest shall be
payable in respect of each Loan, (i) monthly in arrears through the last day
of the calendar month on the first Business Day of each subsequent calendar
month and (ii) on any repayment or prepayment thereof (on the amount repaid or
prepaid), at maturity (whether by acceleration or otherwise) and, after such
maturity, on demand.
(e) Upon each Interest Determination Date, the
Administrative Agent shall determine the Eurodollar Rate for each Interest
4
Period applicable to Eurodollar Loans and shall promptly notify the Borrower
and the Banks thereof. Each such determination shall, absent manifest error,
be final and conclusive and binding on all parties hereto.
1.09 Interest Periods. The interest period (each an
"Interest Period") applicable to each Eurodollar Loan shall be a one-month
period, provided that:
(i) all Eurodollar Loans comprising a Borrowing shall at all
times have the same Interest Period;
(ii) the initial Interest Period for any Eurodollar Loan shall
commence on the date of Borrowing of such Eurodollar Loan (including
the date of any conversion thereto from a Loan of a different Type) and
each Interest Period occurring thereafter in respect of such
Eurodollar Loan shall commence on the day on which the next preceding
Interest Period applicable thereto expires;
(iii)if any Interest Period relating to a Eurodollar Loan
begins on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period, such Interest
Period shall end on the last day of such calendar month;
(iv) if any Interest Period would otherwise expire on a day
which is not a Business Day, such Interest Period shall expire on the
next succeeding Business Day; provided, however, that if any Interest
Period for a Eurodollar Loan would otherwise expire on a day which is
not a Business Day but is a day of the month after which no further
Business Day occurs in such month, such Interest Period shall expire
on the next preceding Business Day; and
(v) no Interest Period in respect of any Borrowing of
Eurodollar Loans shall extend beyond the Maturity Date.
1.10 Increased Costs, Illegality, etc. in Respect of Loans.
(a) In the event that any Bank shall have determined (which determination shall,
absent manifest error, be final and conclusive and binding upon all parties
hereto but, with respect to clause (i) below, may be made only by the
Administrative Agent):
(i) on any Interest Determination Date that, by reason of
any changes arising after the date of this Agreement affecting the
interbank Eurodollar market, adequate and fair means do not exist for
ascertaining the applicable interest rate on the basis provided for in
the definition of Eurodollar Rate; or
(ii) at any time, that such Bank shall incur increased costs
or reductions in the amounts received or receivable hereunder with
respect to any Eurodollar Loan because of (x) any change since the
date of this Agreement in any applicable law or governmental rule,
regulation, order, guideline or request (whether or not having the
force of law) or in the interpretation or administration thereof and
including the introduction of any new law or governmental rule,
regulation, order, guideline or request, such as, for example, but not
limited to: (A) a change in the basis of taxation of payment to any
5
Bank of the principal of or interest on such Eurodollar Loan or any
other amounts payable hereunder (except for changes in the rate of tax
on, or determined by reference to, the net income or net profits of
such Bank, or any franchise tax based on the net income or net profits
of a Bank, in either case pursuant to the laws of the jurisdiction in
which such Bank is organized or in which such Bank's principal office
or applicable lending office is located or any subdivision thereof or
therein), or (B) a change in official reserve requirements, but, in
all events, excluding reserves required under Regulation D to the
extent included in the computation of the Eurodollar Rate and/or (y)
other circumstances since the date of this Agreement affecting such
Bank or the interbank Eurodollar market or the position of such Bank
in such market; or
(iii)at any time, that the making or continuance of any
Eurodollar Loan has been made (x) unlawful by any law or governmental
rule, regulation or order, (y) impossible by compliance by any Bank in
good faith with any governmental request (whether or not having force
of law) or (z) impracticable as a result of a contingency occurring
after the date of this Agreement which materially and adversely
affects the interbank Eurodollar market;
then, and in any such event, such Bank (or the Administrative Agent, in the
case of clause (i) above) shall promptly give notice (by telephone confirmed
in writing) to the Borrower and, except in the case of clause (i) above, to
the Administrative Agent of such determination (which notice the
Administrative Agent shall promptly transmit to each of the other Banks).
Thereafter (x) in the case of clause (i) above, Eurodollar Loans shall no
longer be available until such time as the Administrative Agent notifies the
Borrower and the Banks that the circumstances giving rise to such notice by
the Administrative Agent no longer exist, and any Notice of Borrowing or
Notice of Conversion given by the Borrower with respect to Eurodollar Loans
which have not yet been incurred (including by way of conversion) shall be
deemed rescinded by the Borrower, (y) in the case of clause (ii) above, the
Borrower shall pay to such Bank, upon written demand therefor, such additional
amounts (in the form of an increased rate of, or a different method of
calculating, interest or otherwise as such Bank in its sole discretion shall
determine) as shall be required to compensate such Bank for such increased
costs or reductions in amounts received or receivable hereunder (a written
notice as to the additional amounts owed to such Bank, showing the basis for
the calculation thereof, submitted to the Borrower by such Bank in good faith
shall, absent manifest error, be final and conclusive and binding on all the
parties hereto) and (z) in the case of clause (iii) above, the Borrower shall
take one of the actions specified in Section 1.10(b) as promptly as possible
and, in any event, within the time period required by law. Each of the
Administrative Agent and each Bank agrees that if it gives notice to the
Borrower of any of the events described in clause (i) or (iii) above, it shall
promptly notify the Borrower and, in the case of any such Bank, the
Administrative Agent, if such event ceases to exist. If any such event
described in clause (iii) above ceases to exist as to a Bank, the obligations
of such Bank to make Eurodollar Loans and to convert Base Rate Loans into
Eurodollar Loans on the terms and conditions contained herein shall be
reinstated. In addition, if the Administrative Agent gives notice to the
Borrower that the events described in clause (i) above cease to exist, then
6
the obligations of the Banks to make Eurodollar Loans and to convert Base Rate
Loans into Eurodollar Loans on the terms and conditions contained herein (but
subject to clause (iii) above) shall also be reinstated.
(b) At any time that any Eurodollar Loan is affected by the
circumstances described in Section 1.10(a)(ii) or (iii), the Borrower may (and
in the case of a Eurodollar Loan affected by the circumstances described in
Section 1.10(a)(iii) the Borrower shall) either (x) if the affected Eurodollar
Loan is then being made initially or pursuant to a conversion, cancel the
respective Borrowing by giving the Administrative Agent telephonic notice
(confirmed in writing) on the same date that the Borrower was notified by the
affected Bank or the Administrative Agent pursuant to Section 1.10(a)(ii) or
(iii) or (y) if the affected Eurodollar Loan is then outstanding, upon at
least three Business Days' written notice to the Administrative Agent, require
the affected Bank to convert such Eurodollar Loan into a Base Rate Loan,
provided that, if more than one Bank is affected at any time, then all
affected Banks must be treated the same pursuant to this Section 1.10(b).
(c) If at any time any Bank determines that, after the date
of this Agreement, the introduction of or any change in any applicable law or
governmental rule, regulation, order, guideline, directive or request (whether
or not having the force of law and including, without limitation, those
announced or published prior to the Effective Date) concerning capital
adequacy, or any change in interpretation or administration thereof by any
governmental authority, central bank or comparable agency, will have the
effect of increasing the amount of capital required or expected to be
maintained by such Bank or any corporation controlling such Bank based on the
existence of such Bank's Commitment hereunder or its obligations hereunder,
then the Borrower shall pay to such Bank, upon its written demand therefor,
such additional amounts as shall be required to compensate such Bank or such
other corporation for the increased cost to such Bank or such other
corporation or the reduction in the rate of return to such Bank or such other
corporation as a result of such increase of capital. In determining such
additional amounts, each Bank will act reasonably and in good faith and will
use averaging and attribution methods which are reasonable, provided that such
Bank's reasonable good faith determination of compensation owing under this
Section 1.10(c) shall, absent manifest error, be final and conclusive and
binding on all the parties hereto. Each Bank, upon determining that any
additional amounts will be payable pursuant to this Section 1.10(c), will give
prompt written notice thereof to the Borrower and the Administrative Agent,
which notice shall show the basis for calculation of such additional amounts.
In addition, each such Bank, upon determining that the circumstances giving
rise to the payment of additional amounts pursuant to this Section 1.10(c)
cease to exist, will give prompt written notice thereof to the Borrower.
1.11 Compensation. The Borrower shall compensate each Bank,
upon its written request (which request shall set forth the basis for
requesting such compensation), for all reasonable losses, expenses and
liabilities (including, without limitation, any loss, expense or liability
incurred by reason of the liquidation or reemployment of deposits or other
funds required by such Bank to fund its Eurodollar Loans but excluding any
loss of anticipated profit) which such Bank may sustain: (i) if for any reason
(other than a default by such Bank) a Borrowing or continuation of, or
7
conversion from or into, Eurodollar Loans does not occur on a date specified
therefor in a Notice of Borrowing or Notice of Conversion (whether or not
withdrawn by the Borrower or deemed withdrawn pursuant to Section 1.10(a));
(ii) if any repayment (including any repayment made pursuant to Section 3.01
or 3.02 or as a result of an acceleration of the Loans pursuant to Section 9)
or conversion of any Eurodollar Loans occurs on a date which is not the last
day of an Interest Period with respect thereto; (iii) if any prepayment of any
Eurodollar Loans is not made on any date specified in a notice of prepayment
given by the Borrower; or (iv) as a consequence of (x) any other default by
the Borrower to repay the Loans when required by the terms of this Agreement
or the Note held by such Bank or (y) any election made pursuant to Section
1.10(b).
1.12 Change of Lending Office. Each Bank agrees that on the
occurrence of any event giving rise to the operation of Section 1.10(a)(ii) or
(iii), Section 1.10(c), Section 1.18 or Section 3.04 with respect to such
Bank, it will, if requested by the Borrower, use reasonable efforts (subject
to overall policy considerations of such Bank) to designate another lending
office for any Loans or Letters of Credit affected by such event, provided
that such designation is made on such terms that such Bank and its lending
office suffer no economic, legal or regulatory disadvantage, with the object
of avoiding the consequence of the event giving rise to the operation of such
Section. Nothing in this Section 1.12 shall affect or postpone any of the
obligations of the Borrower or the right of any Bank provided in Sections 1.10
and 3.04.
1.13 Letters of Credit (a) Subject to and upon the terms and
conditions set forth herein, the Borrower may request that the Issuing Bank
issue, at any time and from time to time on and after the Effective Date and
prior to the 30th day prior to the Maturity Date, for the account of the
Borrower and for the benefit of any holder (or any trustee, agent or other
similar representative for any such holders) of L/C Supportable Obligations of
the Borrower or any of its Subsidiaries, an irrevocable standby letter of
credit, in a form customarily used by the Issuing Bank or in such other form
as has been approved by the Issuing Bank (each such standby letter of credit,
a "Letter of Credit"), in support of such L/C Supportable Obligations. All
Letters of Credit shall be denominated in Dollars and shall be issued on a
sight basis only.
(b) Subject to and upon the terms and conditions set forth
herein, the Issuing Bank agrees that it will, at any time and from time to
time on and after the Effective Date and prior to the 30th day prior to the
Maturity Date, following its receipt of the respective Letter of Credit
Request, issue for the account of the Borrower, one or more Letters of Credit
in support of such L/C Supportable Obligations of the Borrower or any of its
Subsidiaries as are permitted to remain outstanding without giving rise to a
Default or an Event of Default hereunder, provided that the Issuing Bank shall
be under no obligation to issue any Letter of Credit of the types described
above if at the time of such issuance:
(i) any order, judgment or decree of any governmental
authority or arbitrator shall purport by its terms to enjoin or
restrain the Issuing Bank from issuing such Letter of Credit or any
8
requirement of law applicable to the Issuing Bank or any request or
directive (whether or not having the force of law) from any
governmental authority with jurisdiction over the Issuing Bank shall
prohibit, or request that the Issuing Bank refrain from, the issuance
of letters of credit generally or such Letter of Credit in particular
or shall impose upon the Issuing Bank with respect to such Letter of
Credit any restriction or reserve or capital requirement (for which
the Issuing Bank is not otherwise compensated under Section 1.18 or
otherwise) not in effect on the date hereof, or any unreimbursed
loss, cost or expense which was not applicable or in effect with
respect to the Issuing Bank as of the date hereof and which the
Issuing Bank reasonably and in good faith deems material to it; or
(ii) the Issuing Bank shall have received notice from the
Borrower, any other Credit Party or the Required Banks prior to the
issuance of such Letter of Credit of the type described in the second
sentence of Section 1.15(b).
1.14 Maximum Letter of Credit Outstandings; Final
Maturities. Notwithstanding anything to the contrary contained in this
Agreement, (i) no Letter of Credit shall be issued the Stated Amount of which,
when added to the Letter of Credit Outstandings (exclusive of Unpaid Drawings
which are repaid on the date of, and prior to the issuance of, the respective
Letter of Credit) at such time would exceed either (x) $4,500,000 or (y) when
added to the aggregate principal amount of all Loans then outstanding, an
amount equal to the lesser of (A) the Borrowing Base at such time (based on
the Borrowing Base Certificate last delivered) and (B) the Total Commitment at
such time and (ii) each Letter of Credit shall by its terms terminate on or
before the earlier of (x) the date which occurs 12 months after the date of
the issuance thereof (although any such Letter of Credit may be extendible for
successive periods of up to 12 months, but not beyond the third Business Day
prior to the Maturity Date, on terms acceptable to the Issuing Bank) and (y)
three Business Days prior to the Maturity Date.
1.15 Letter of Credit Requests; Minimum Stated Amount. (a)
Whenever the Borrower desires that a Letter of Credit be issued for its
account, the Borrower shall give the Administrative Agent and the Issuing Bank
at least five Business Days' (or such shorter period as is acceptable to the
Issuing Bank) written notice thereof. Each notice shall be in the form of
Exhibit B-2 appropriately completed (each a "Letter of Credit Request").
(b) The making of each Letter of Credit Request shall be
deemed to be a representation and warranty by the Borrower that such Letter of
Credit may be issued in accordance with, and will not violate the requirements
of, Section 1.14. Unless the Issuing Bank has received notice from the
Borrower, any other Credit Party or the Required Banks before it issues a
Letter of Credit that one or more of the conditions specified in Section 4 or
5 are not then satisfied, or that the issuance of such Letter of Credit would
violate Section 1.14, then the Issuing Bank shall, subject to the terms and
conditions of this Agreement, issue the requested Letter of Credit for the
account of the Borrower in accordance with the Issuing Bank's usual and
customary practices. Upon its issuance of or amendment or modification to any
Letter of Credit, the Issuing Bank shall promptly notify the Borrower and the
Administrative Agent of such issuance, amendment or modification and such
notification shall be accompanied by a copy of the issued Letter of Credit or
amendment or modification. Notwithstanding anything to the contrary contained
in this Agreement, in the event that a Bank Default exists, the Issuing Bank
9
shall not be required to issue any Letter of Credit unless the Issuing Bank
has entered into an arrangement satisfactory to it and the Borrower to
eliminate the Issuing Bank's risk with respect to the participation in Letters
of Credit by the Defaulting Bank or Banks, including by cash collateralizing
such Defaulting Bank's or Banks' Loan Percentage of the Letter of Credit
Outstandings.
(c) The initial Stated Amount of each Letter of Credit shall
not be less than $250,000 or such lesser amount as is reasonably acceptable to
the Issuing Bank.
1.16 Letter of Credit Participations. (a) Immediately upon
the issuance by the Issuing Bank of any Letter of Credit, the Issuing Bank
shall be deemed to have sold and transferred to each Bank, other than the
Issuing Bank (each such Bank, in its capacity under this Section 1.16, a
"Participant"), and each such Participant shall be deemed irrevocably and
unconditionally to have purchased and received from the Issuing Bank, without
recourse or warranty, an undivided interest and participation, to the extent
of such Participant's Loan Percentage, in such Letter of Credit, each drawing
or payment made thereunder and the obligations of the Borrower under this
Agreement with respect thereto, and any security therefor or guaranty
pertaining thereto. Upon any change in the Commitments or Loan Percentages of
the Banks pursuant to Section 12.04, it is hereby agreed that, with respect to
all outstanding Letters of Credit and Unpaid Drawings, there shall be an
automatic adjustment to the participations pursuant to this Section 1.16 to
reflect the new Loan Percentages of the assignor and assignee Bank, as the
case may be.
(b) In determining whether to pay under any Letter of
Credit, the Issuing Bank shall not have an obligation relative to the other
Banks other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
substantially comply on their face with the requirements of such Letter of
Credit. Any action taken or omitted to be taken by the Issuing Bank under or
in connection with any Letter of Credit if taken or omitted in the absence of
gross negligence or willful misconduct (as finally determined by a court of
competent jurisdiction), shall not create for the Issuing Bank any resulting
liability to the Borrower, any other Credit Party, any Bank or any other
Person.
(c) In the event that the Issuing Bank makes any payment
under any Letter of Credit and the Borrower shall not have reimbursed such
amount in full to the Issuing Bank pursuant to Section 1.17(a), the Issuing
Bank shall promptly notify the Administrative Agent, which shall promptly
notify each Participant of such failure, and each Participant shall promptly
and unconditionally pay to the Issuing Bank the amount of such Participant's
Loan Percentage of such unreimbursed payment in Dollars and in same day funds.
If the Administrative Agent so notifies, prior to 11:00 A.M. (New York time)
on any Business Day, any Participant required to fund a payment under a Letter
of Credit, such Participant shall make available to the Issuing Bank in
Dollars such Participant's Loan Percentage of the amount of such payment on
such Business Day in same day funds. If and to the extent such Participant
shall not have so made its Loan Percentage of the amount of such payment
available to the Issuing Bank, such Participant agrees to pay to the Issuing
Bank, forthwith on demand such amount, together with interest thereon, for
each day from such date until the date such amount is paid to the Issuing Bank
at the overnight Federal Funds Rate for the first three days and at the
interest rate applicable to Loans maintained as Base Rate Loans for each day
10
thereafter. The failure of any Participant to make available to the Issuing
Bank its Loan Percentage of any payment under any Letter of Credit shall not
relieve any other Participant of its obligation hereunder to make available to
the Issuing Bank its Loan Percentage of any Letter of Credit on the date
required, as specified above, but no Participant shall be responsible for the
failure of any other Participant to make available to the Issuing Bank such
other Participant's Loan Percentage of any such payment.
(d) Whenever the Issuing Bank receives a payment of a
reimbursement obligation as to which it has received any payments from the
Participants pursuant to clause (c) above, the Issuing Bank shall pay to each
Participant which has paid its Loan Percentage thereof, in Dollars and in same
day funds, an amount equal to such Participant's share (based upon the
proportionate aggregate amount originally funded by such Participant to the
aggregate amount funded by all Participants) of the principal amount of such
reimbursement obligation and interest thereon accruing after the purchase of
the respective participations.
(e) Upon the request of any Participant, the Issuing Bank
shall furnish to such Participant copies of any Letter of Credit issued by it
and such other documentation as may reasonably be requested by such
Participant.
(f) The obligations of the Participants to make payments to
the Issuing Bank with respect to Letters of Credit issued by it shall be
irrevocable and not subject to any qualification or exception whatsoever and
shall be made in accordance with the terms and conditions of this Agreement
under all circumstances, including, without limitation, any of the following
circumstances:
(i) any lack of validity or enforceability of this Agreement
or any of the other Credit Documents;
(ii) the existence of any claim, setoff, defense or other
right which the Borrower or any of its Subsidiaries may have at any
time against a beneficiary named in a Letter of Credit, any
transferee of any Letter of Credit (or any Person for whom any such
transferee may be acting), the Administrative Agent, any Participant,
or any other Person, whether in connection with this Agreement, any
Letter of Credit, the transactions contemplated herein or any
unrelated transactions (including any underlying transaction between
the Borrower or any Subsidiary of the Borrower and the beneficiary
named in any such Letter of Credit);
(iii) any draft, certificate or any other document presented
under any Letter of Credit proving to be forged, fraudulent, invalid
or insufficient in any respect or any statement therein being untrue
or inaccurate in any respect;
(iv) the surrender or impairment of any security for the
performance or observance of any of the terms of any of the Credit
Documents; or
(v) the occurrence of any Default or Event of Default.
11
1.17 Agreement to Repay Letter of Credit Drawings. (a) The
Borrower agrees to reimburse the Issuing Bank, by making payment to the
Administrative Agent in immediately available funds at the Payment Office, for
any payment or disbursement made by the Issuing Bank under any Letter of
Credit (each such amount, so paid until reimbursed, an "Unpaid Drawing"), not
later than one Business Day following receipt by the Borrower of notice of
such payment or disbursement (provided that no such notice shall be required
to be given if a Default or an Event of Default under Section 9.05 shall have
occurred and be continuing, in which case the Unpaid Drawing shall be due and
payable immediately without presentment, demand, protest or notice of any kind
(all of which are hereby waived by the Borrower)), with interest on the amount
so paid or disbursed by the Issuing Bank, to the extent not reimbursed prior
to 1:00 P.M. (New York time) on the date of such payment or disbursement, from
and including the date paid or disbursed to but excluding the date the Issuing
Bank was reimbursed by the Borrower therefor at a rate per annum which shall
be the Base Rate in effect from time to time plus the Applicable Margin;
provided, however, to the extent such amounts are not reimbursed prior to 1:00
P.M. (New York time) on the third Business Day following the receipt by the
Borrower of notice of such payment or disbursement or following the occurrence
of a Default or an Event of Default under Section 9.05, interest shall
thereafter accrue on the amounts so paid or disbursed by the Issuing Bank (and
until reimbursed by the Borrower) at a rate per annum which shall be the Base
Rate in effect from time to time plus the Applicable Margin plus 5%, in each
such case, with interest to be payable on demand. The Issuing Bank shall give
the Borrower prompt written notice of each Drawing under any Letter of Credit,
provided that the failure to give any such notice shall in no way affect,
impair or diminish the Borrower's obligations hereunder.
(b) The obligations of the Borrower under this Section 1.17
to reimburse the Issuing Bank with respect to Unpaid Drawings (including, in
each case, interest thereon) shall be absolute and unconditional under any and
all circumstances and irrespective of any setoff, counterclaim or defense to
payment which the Borrower may have or have had against any Bank (including in
its capacity as Participant), including, without limitation, any defense based
upon the failure of any drawing under a Letter of Credit (each a "Drawing") to
conform to the terms of the Letter of Credit or any nonapplication or
misapplication by the beneficiary of the proceeds of such Drawing; provided,
however, that the Borrower shall not be obligated to reimburse the Issuing
Bank for any wrongful payment made by the Issuing Bank under a Letter of
Credit as a result of acts or omissions constituting willful misconduct or
gross negligence on the part of the Issuing Bank (as finally determined by a
court of competent jurisdiction).
1.18 Increased Costs in Respect of Letters of Credit. (a) If
at any time after the date of this Agreement, the introduction of or any
change in any applicable law, rule, regulation, order, guideline or request or
in the interpretation or administration thereof by any governmental authority
charged with the interpretation or administration thereof, or compliance by
the Issuing Bank or any Participant with any request or directive by any such
authority (whether or not having the force of law), shall either (i) impose,
modify or make applicable any reserve, deposit, capital adequacy or similar
requirement against letters of credit issued by the Issuing Bank or
participated in by any Participant, or (ii) impose on the Issuing Bank or any
12
Participant any other conditions relating, directly or indirectly, to this
Agreement; and the result of any of the foregoing is to increase the cost to
the Issuing Bank or any Participant of issuing, maintaining or participating
in any Letter of Credit, or reduce the amount of any sum received or
receivable by the Issuing Bank or any Participant hereunder or reduce the rate
of return on its capital with respect to Letters of Credit (except for changes
in the rate of tax on, or determined by reference to, the net income or
profits of the Issuing Bank or such Participant pursuant to the laws of the
jurisdiction in which it is organized or in which its principal office or
applicable lending office is located or any subdivision thereof or therein),
then, within 30 days after the delivery of the certificate referred to below
to the Borrower by the Issuing Bank or any Participant (a copy of which
certificate shall be sent by the Issuing Bank or such Participant to the
Administrative Agent), the Borrower shall pay to the Issuing Bank or such
Participant such additional amount or amounts as will compensate such Bank for
such increased cost or reduction in the amount receivable or reduction on the
rate of return on its capital. The Issuing Bank or any Participant, upon
determining that any additional amounts will be payable pursuant to this
Section 1.18, will give prompt written notice thereof to the Borrower, which
notice shall include a certificate submitted to the Borrower by the Issuing
Bank or such Participant (a copy of which certificate shall be sent by the
Issuing Bank or such Participant to the Administrative Agent), setting forth
in reasonable detail the basis for the calculation of such additional amount
or amounts necessary to compensate the Issuing Bank or such Participant. The
certificate required to be delivered pursuant to this Section 1.18 shall,
absent manifest error, be final and conclusive and binding on the Borrower.
(b) Notwithstanding anything to the contrary contained in
this Section 1.18, unless the Issuing Bank or a Participant gives notice to
the Borrower that the Borrower is obligated to pay any amount under this
Section 1.18 within 180 days after the later of (x) the date the Issuing Bank
or such Participant incurs the respective increased costs or reduction in
return the rate of return or (y) the date the Issuing Bank or such Participant
has actual knowledge of its incurrence of the respective increased costs or
reduction in the rate of return, then the Issuing Bank or such Participant
shall only be entitled to be compensated for such amount by the Borrower
pursuant to this Section 1.18 to the extent the respective increased costs or
reduction in the rate of return are incurred or suffered on or after the date
which occurs 180 days prior to the Issuing Bank or such Participant giving
notice to the Borrower that the Borrower is obligated to pay the respective
amounts pursuant to this Section 1.18.
SECTION 2. Fees; Reductions of Commitment.
2.01 Fees. a) MERGEFORMAT (a) The Borrower agrees to pay to
the Administrative Agent the "Draw Fee" under and as defined in a side
agreement of even date herewith between the Borrower and the Administrative
Agent in connection with each Borrowing, such Draw Fee to be payable on the
date of each such Borrowing.
(b) The Borrower agrees to pay to the Administrative Agent,
for its own account, such other fees as have been agreed to in writing by the
Borrower with the Administrative Agent.
13
2.02 Voluntary Termination of Unutilized Commitments. Upon
at least two Business Days' prior written notice to the Administrative Agent
at the Notice Office (which notice the Administrative Agent shall promptly
transmit to each of the Banks), the Borrower shall have the right, at any time
or from time to time, without premium or penalty, to terminate or partially
reduce the Total Unutilized Commitment, in integral multiples of $1,000,000;
provided that each such reduction shall apply proportionately to permanently
reduce the Commitment of each Bank.
2.03 Mandatory Termination of Commitments; Extension of
Maturity Date. (a) The Total Commitment (and the Commitment of each
Bank) shall terminate in its entirety on February 15, 1998, unless the
Effective Date shall have occurred on or prior to such date.
(b) At 9:00 A.M. (New York time) on January 29, 1999
(subject to extension as provided in this Section 2.03(b), the "Maturity
Date"), the Total Commitment (and the Commitment of each Bank) shall terminate
in its entirety. All Loans shall be due and payable in full on the Maturity
Date, together with all accrued and unpaid interest, fees and other amounts
due and payable hereunder.
(i) Not less than 60 days and not more than 90 days prior to
the Maturity Date then in effect, the Borrower may make a written request
(each an "Extension Request") to the Administrative Agent, who shall forward a
copy of each such request to each of the Banks, that the Maturity Date then in
effect be extended to the date which occurs 364 days after the Requested
Extension Effective Date specified by the Borrower in its Extension Request.
Each Extension Request shall specify a date (the "Requested Extension
Effective Date"), which shall be not earlier than 15 days after the giving of
the respective notice and not later than 5 days prior to the Maturity Date
then in effect, which would be the date of the effectiveness of the changes to
the Maturity Date. Each Extension Request shall also be accompanied by a
certificate of an Authorized Officer of the Borrower stating that no Default
or Event of Default has occurred and is continuing. Each Bank, acting in its
sole discretion and with no obligation to grant any extension pursuant to this
Section 2.03(b)(i), shall, by written notice to the Borrower and the
Administrative Agent, such notice to be given on or prior to the earlier of
(x) the Requested Extension Effective Date and (y) the 30th day following
receipt by such Bank of such Extension Request by the Borrower, advise the
Borrower and the Administrative Agent whether or not such Bank agrees to such
extension, provided that any Bank which fails to so notify the Borrower and
the Administrative Agent as provided above shall be deemed to have elected not
to grant such extension. In giving any extensions pursuant to the immediately
preceding sentence, any Bank, at its option, may specify that its extension is
conditioned upon each other Bank agreeing to the extension of the Maturity
Date or, in lieu thereof, may specify that Banks with a certain minimum
aggregate amount of Commitments (to be specified by such Bank) shall have
agreed to such extension. The Administrative Agent shall notify the Borrower
and each of the Banks as to which Banks have agreed to such extension and as
to the new Maturity Date as a result thereof.
(ii) If one or more Banks do not consent to the extension of
the Maturity Date pursuant to subpart (i) of this Section 2.03(b), and the
Borrower has been so informed by the Administrative Agent (it being understood
14
that any Bank that has not responded to an Extension Request shall be deemed
to have elected not to extend its Commitment), then, on or prior to the tenth
(10th) day prior to the then Maturity Date, the Borrower may, upon such
failure to extend, (1)(A) request each Bank that is willing to extend the
Maturity Date to assume all or a portion of each non-extending Bank's
Commitment and (B) after first making the request pursuant to clause (A), as
to any portion of any non-extending Bank's Commitment not assumed pursuant to
such clause within ten (10) days after the date of such request (but in any
event on or prior to the tenth (10th) day prior to the then Maturity Date),
obtain a successor bank or banks, in each case approved in advance in writing
by the Administrative Agent to assume such Bank's Commitment (it being
understood that in such case the successor bank or banks shall be responsible
for paying the Administrative Agent's assignment fee referred to in Section
12.04) or (2) so long as the aggregate pro rata share of all such
non-extending Banks does not exceed fifty percent (50%) of the Total
Commitment, terminate the Commitments of the non-extending Banks, and the
Total Commitment, as so reduced by the pro rata share of such non-extending
Banks, shall be extended pursuant to Section 2.03(b)(i). All Loans made by any
non-extending Bank shall be due and payable in full on the Maturity Date then
in effect, together with all accrued and unpaid interest, fees and other
amounts due and payable hereunder.
The Borrower, the extending Banks, the Administrative Agent
and such successor bank or banks, if any, shall sign such documents and
instruments as shall be appropriate to evidence the extension of the Maturity
Date and such successor bank's or banks' assumption (without recourse to, or
warranty by, such non-extending Bank, except as to the amount due thereon, its
title to such Notes and its right to sell the same) of each non-extending
Bank's Commitment (including, without limitation, any adjustment to all such
pro rata shares). Upon the execution and delivery of such documents and
instruments, the Maturity Date shall as of the date of such execution and
delivery be extended as provided in Section 2.03(b)(i).
Each such successor bank shall be deemed to be a "Bank" for
all purposes hereunder, and the non-extending Banks shall have no further
obligations hereunder but shall continue to be entitled to the benefit of
Sections 1.10 and 12.01. If such successor bank or banks is or are not
obtained, or the Borrower elects not to extend the Total Commitment as reduced
in accordance with this Section 2.03(b)(ii) by the tenth (10th) day prior to
the Maturity Date then in effect, or such documents and instruments are not
signed by such date, the Maturity Date shall not be extended and all Loans
made by the Banks shall be due and payable in full on the Maturity Date then
in effect, together with all accrued and unpaid interest, fees and other
amounts due and payable hereunder and under the other Credit Documents.
SECTION 3. Prepayments; Payments; Taxes.
3.01 Voluntary Prepayments. The Borrower shall have the
right to prepay the Loans, without premium or penalty, in whole or in part at
any time and from time to time on the following terms and conditions: (i) the
Borrower shall give the Administrative Agent prior to 12:00 Noon (New York
time) at the Notice Office (x) at least three Business Days' prior written
notice (or telephonic notice promptly confirmed in writing) of the Borrower's
intent to prepay Base Rate Loans and (y) at least five Business Days' prior
written notice (or telephonic notice promptly confirmed in writing) of the
Borrower's intent to prepay Eurodollar Loans, which notice shall specify the
15
amount of such prepayment and the Types of Loans to be prepaid and, in the
case of Eurodollar Loans, the specific Borrowing or Borrowings pursuant to
which made, and which notice the Administrative Agent shall promptly transmit
to each of the Banks; (ii) each prepayment of Loans shall be in an aggregate
principal amount of at least $1,000,000, provided that if any partial
prepayment of Eurodollar Loans made pursuant to any Borrowing shall reduce the
outstanding Eurodollar Loans made pursuant to such Borrowing to an amount less
than the Minimum Borrowing Amount applicable thereto, then such Borrowing may
not be continued as a Borrowing of Eurodollar Loans; and (iii) each prepayment
in respect of any Loans made pursuant to a Borrowing shall be applied pro rata
among such Loans, provided that at the Borrower's election in connection with
any prepayment of Loans pursuant to this Section 3.01, such prepayment shall
not be applied to any Loans of a Defaulting Bank.
3.02 Mandatory Repayments. a) (i) On any day on which the
aggregate outstanding principal amount of Loans and the Letter of Credit
Outstandings exceeds the Total Commitment then in effect, the Borrower shall
prepay on such day principal of Loans in an amount equal to such excess. If,
after giving effect to the prepayment of all Loans, the aggregate amount of the
Letter of Credit Outstandings exceeds the Total Commitment as then in effect,
the Borrower shall pay to the Administrative Agent at the Payment Office on such
day an amount of cash and/or Cash Equivalents equal to the amount of such excess
(up to a maximum amount equal to the Letter of Credit Outstandings at such
time), such cash and/or Cash Equivalents to be held as security for all
obligations of the Borrower to the Issuing Bank and the Banks hereunder in a
cash collateral account to be established by the Administrative Agent.
(ii) On any day on which the aggregate outstanding principal
amount of Loans and the Letter of Credit Outstandings exceeds the Borrowing
Base then in effect, the Borrower shall prepay or repay on such day principal
of Loans and thereafter cash collateralize Letters of Credit in the manner
described above, in each case in an amount equal to such excess.
(b) On any day on which any refinancing or any sale or
other disposition of a Borrowing Base Property or a Borrowing Base Pledged
Mortgage Loan occurs, an amount equal to the Release Price with respect thereto
shall be applied as a mandatory repayment of principal of outstanding Loans.
(c) If there shall occur a Casualty Event
or a Taking with respect to any Borrowing Base Property (or any portion
thereof), the Borrower shall be required to repay principal of outstanding
Loans as and to the extent required by Section 7.16(e) or 7.16(g).
(d) On any day on which any voluntary or
mandatory prepayment or repayment (inclusive of scheduled amortization
payments, if any) is made in respect of a Borrowing Base Pledged Mortgaged
Loan, the Borrower shall prepay or repay on such day principal of Loans in an
amount equal to such prepayment or repayment.
(e) If an event of default under and as
defined or described in the Pledged Mortgage Loan Documents for any Borrowing
Base Pledged Mortgaged Loan occurs, an amount equal to the amount necessary to
ensure that the sum of (i) the aggregate principal amount of Loans outstanding
and (ii) the Letter of Credit Outstandings shall not exceed the Borrowing Base
then in effect, after giving effect to the reduction in the Borrowing Base as
a result of the release from the Borrowing Base of such Borrowing Base Pledged
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Mortgage Loan, shall be applied as a mandatory repayment of principal of
outstanding Loans.
(f) If a Special Mandatory Repayment Event occurs, an amount
equal to the amount necessary to ensure that the sum of (i) the aggregate
principal amount of Loans outstanding and (ii) the Letter of Credit
Outstandings shall not exceed the Borrowing Base then in effect, after giving
effect to the reduction in the Borrowing Base as a result of the release from
the Borrowing Base of such Borrowing Base Pledged Mortgage Loan, shall be
applied as a mandatory repayment of principal of outstanding Loans.
(g) If a Casualty Event or a Taking occurs with respect to
any Mortgage Loan Property securing a Borrowing Base Pledged Mortgage Loan, an
amount equal to the amount necessary to ensure that the sum of (i) the
aggregate principal amount of Loans outstanding and (ii) the Letter of Credit
Outstandings shall not exceed the Borrowing Base then in effect, after giving
effect to the reduction in the Borrowing Base as a result of the release from
the Borrowing Base of such Borrowing Base Pledged Mortgage Loan, shall be
applied as a mandatory repayment of principal of outstanding Loans.
(h) With respect to each repayment of Loans required by this
Section 3.02, the Borrower may designate the Types of Loans which are to be
repaid and, in the case of Eurodollar Loans, the specific Borrowing or
Borrowings pursuant to which made, provided that: (i) repayments of Eurodollar
Loans pursuant to this Section 3.02 may only be made on the last day of an
Interest Period applicable thereto unless all Eurodollar Loans with Interest
Periods ending on such date of required repayment and all Base Rate Loans have
been paid in full; (ii) if any repayment of Eurodollar Loans made pursuant to
a single Borrowing shall reduce the outstanding Eurodollar Loans made pursuant
to such Borrowing to an amount less than the Minimum Borrowing Amount
applicable thereto, such Borrowing shall be converted at the end of the then
current Interest Period into a Borrowing of Base Rate Loans; and (iii) each
repayment of Loans made pursuant to the same Borrowing shall be applied pro
rata among such Loans. In the absence of a designation by the Borrower as
described in the preceding sentence, the Administrative Agent shall, subject
to the above, make such designation in its sole discretion.
3.03 Method and Place of Payment. Except as otherwise
specifically provided herein, all payments under this Agreement or any Note
shall be made to the Administrative Agent for the account of the Bank or Banks
entitled thereto or for the account of the Issuing Bank, as the case may be,
not later than 12:00 Noon (New York time) on the date when due and shall be
made in Dollars in immediately available funds at the Payment Office. Whenever
any payment to be made hereunder or under any Note shall be stated to be due
on a day which is not a Business Day, the due date thereof shall be extended
to the next succeeding Business Day and, with respect to payments of
principal, interest shall be payable at the applicable rate during such
extension.
3.04 Net Payments; Taxes. (a) All payments made by
the Borrower hereunder or under any Note will be made without setoff,
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counterclaim or other defense. Except as provided in Section 3.04(b), all such
payments will be made free and clear of, and without deduction or withholding
for, any present or future taxes, levies, imposts, duties, fees, assessments
or other charges of whatever nature now or hereafter imposed by any
jurisdiction or by any political subdivision or taxing authority thereof or
therein with respect to such payments (but excluding, except as provided in
the second succeeding sentence, any tax imposed on or measured by the net
income or net profits of a Bank or the Issuing Bank, or any franchise tax
based on the net income or net profits of a Bank or the Issuing Bank, in
either case pursuant to the laws of the jurisdiction in which such Bank or the
Issuing Bank, as the case may be, is organized or the jurisdiction in which
the principal office or applicable lending office of such Bank or the Issuing
Bank, as the case may be, is located or any subdivision thereof or therein)
and all interest, penalties or similar liabilities with respect to such
non-excluded taxes, levies, imposts, duties, fees or other charges (all such
non-excluded taxes, levies, imposts, duties, fees, assessments or other
charges being referred to collectively as "Taxes"). If any Taxes are so levied
or imposed, the Borrower agrees to pay the full amount of such Taxes, and such
additional amounts as may be necessary so that every payment of all amounts
due under this Agreement or under any Note, after withholding or deduction for
or on account of any Taxes, will not be less than the amount provided for
herein or in such Note. If any amounts are payable in respect of Taxes
pursuant to the preceding sentence, the Borrower agrees to reimburse each Bank
or the Issuing Bank, as the case may be, upon the written request of such Bank
or the Issuing Bank, as the case may be, for taxes imposed on or measured by
the net income or net profits of such Bank or the Issuing Bank, as the case
may be, or any franchise tax based on the net income or net profits of such
Bank or the Issuing Bank, as the case may be, in either case pursuant to the
laws of the jurisdiction in which such Bank or the Issuing Bank, as the case
may be, is organized or in which the principal office or applicable lending
office of such Bank or the Issuing Bank, as the case may be, is located or
under the laws of any political subdivision or taxing authority of any such
jurisdiction in which such Bank or the Issuing Bank, as the case may be, is
organized or in which the principal office or applicable lending office of
such Bank or the Issuing Bank, as the case may be, is located and for any
withholding of income or similar taxes imposed by the United States of America
as such Bank or the Issuing Bank, as the case may be, shall reasonably
determine are payable by, or withheld from, such Bank or the Issuing Bank in
respect of such amounts so paid to or on behalf of such Bank or the Issuing
Bank pursuant to the preceding sentence and in respect of any amounts paid to
or on behalf of such Bank or the Issuing Bank pursuant to this sentence. The
Borrower will furnish to the Administrative Agent within 45 days after the
date the payment of any Taxes is due pursuant to applicable law certified
copies of tax receipts or other documentation reasonably acceptable to the
Administrative Agent, evidencing such payment by the Borrower. The Borrower
agrees to indemnify and hold harmless each Bank and the Issuing Bank, and
reimburse such Bank or the Issuing Bank, as the case may be, upon its written
request, for the amount of any Taxes so levied or imposed and paid by such
Bank or the Issuing Bank.
(b) Each Bank that is not a United States person (as such
term is defined in Section 7701(a)(30) of the Code), and the Issuing Bank, if
the Issuing Bank is not a United States person (as such term is defined in
Section 7701(a)(30) of the Code), agrees to deliver to the Borrower and the
Administrative Agent on or prior to the Effective Date, or in the case of a
Bank that is an assignee or transferee of an interest under this Agreement
pursuant to Section 12.04 (unless the respective Bank was already a Bank
hereunder immediately prior to such assignment or transfer), on the date of
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such assignment or transfer to such Bank, (i) two accurate and complete
original signed copies of Internal Revenue Service Form 4224 or 1001 (or
successor forms) certifying to such Bank's or, as the case may be, the Issuing
Bank's entitlement as of such date to a complete exemption from United States
withholding tax with respect to payments to be made under this Agreement
and/or under any Note, or (ii) if such Bank or the Issuing Bank is not a
"bank" within the meaning of Section 881(c)(3)(A) of the Code and cannot
deliver either Internal Revenue Service Form 1001 or 4224 pursuant to clause
(i) above, (x) a certificate substantially in the form of Exhibit C (any such
certificate, a "Section 3.04(b)(ii) Certificate") and (y) two accurate and
complete original signed copies of Internal Revenue Service Form W-8 (or
successor form) certifying to such Bank's or, as the case may be, the Issuing
Bank's entitlement to a complete exemption from United States withholding tax
with respect to payments of interest to be made under this Agreement and/or
under any Note. In addition, each Bank and the Issuing Bank agrees that from
time to time after the Effective Date, when a lapse in time or change in
circumstances renders the previous certification invalid or inaccurate in any
material respect, such Bank or the Issuing Bank, as the case may be, will
promptly deliver to the Borrower and the Administrative Agent two new accurate
and complete original signed copies of Internal Revenue Service Form 4224 or
1001 (or successor forms), or Form W-8 (or successor form) and a Section
3.04(b)(ii) Certificate, as the case may be, and such other forms as may be
required in order to confirm or establish the entitlement of such Bank or the
Issuing Bank, as the case may be, to a continued exemption from or reduction
in United States withholding tax with respect to payments under this Agreement
and/or any Note, or it shall immediately notify the Borrower and the
Administrative Agent of its inability to deliver any such Form or Certificate,
in which case such Bank or the Issuing Bank, as the case may be, shall not be
required to deliver any such Form or Certificate pursuant to this Section
3.04(b). Notwithstanding anything to the contrary contained in Section
3.04(a), but subject to Section 12.04(b) and the immediately succeeding
sentence, (x) the Borrower shall be entitled, to the extent it is required to
do so by law, to deduct or withhold income or similar taxes imposed by the
United States (or any political subdivision or taxing authority thereof or
therein) from interest, Fees or other amounts payable hereunder for the
account of any Bank which is not a United States person (as such term is
defined in Section 7701(a)(30) of the Code) or for the account of the Issuing
Bank, if the Issuing Bank is not a United States person (as such term is
defined in Section 7701 (a)(30) of the Code), for U.S. Federal income tax
purposes to the extent that such Bank or the Issuing Bank, as the case may be,
has not provided to the Borrower U.S. Internal Revenue Service Forms that
establish a complete exemption from such deduction or withholding and (y) the
Borrower shall not be obligated pursuant to any provision of Section 3.04(a)
to gross-up payments to be made to a Bank or the Issuing Bank, as the case may
be, in respect of income or similar taxes imposed by the United States if (I)
such Bank or the Issuing Bank, as the case may be, has not provided to the
Borrower the Internal Revenue Service Forms required to be provided to the
Borrower pursuant to this Section 3.04(b) or (II) in the case of a payment,
other than interest, to a Bank or the Issuing Bank, as the case may be,
described in clause (ii) above, to the extent that such Forms do not establish
a complete exemption from withholding of such taxes. Notwithstanding anything
to the contrary contained in the preceding sentence or elsewhere in this
Section 3.04 and except as set forth in Section 12.04(b), the Borrower agrees
to pay additional amounts and to indemnify each Bank and the Issuing Bank in
19
the manner set forth in Section 3.04(a) (without regard to the identity of the
jurisdiction requiring the deduction or withholding) in respect of any Taxes
deducted or withheld by it as described in the immediately preceding sentence
as a result of any changes that are effective after the Effective Date in any
applicable law, treaty, governmental rule, regulation, guideline or order, or
in the interpretation thereof, relating to the deducting or withholding of
such Taxes.
SECTION 4. Conditions Precedent to Effective Date. The
occurrence of the Effective Date pursuant to Section 12.10 is subject to the
satisfaction of the following conditions:
4.01 Execution of Agreement; Notes. (i) This Agreement shall
have been executed and delivered as provided in Section 12.10 and (ii) there
shall have been delivered to the Administrative Agent for the account of each
of the Banks the appropriate Note executed by the Borrower, in each case in
the amount and maturity and with other terms as otherwise provided herein.
4.02 Fees, etc. The Borrower shall have paid to the
Administrative Agent, the Banks and the Issuing Bank all costs, fees and
expenses (including, without limitation, reasonable legal fees and expenses)
payable to the Administrative Agent, the Banks and the Issuing Bank to the
extent due on the Effective Date.
4.03 Opinions of Counsel. The Administrative Agent shall
have received: (i) from Hogan & Hartson L.L.P., counsel to the REIT, the
Borrower and the Subsidiary Guarantors, an opinion addressed to the
Administrative Agent and each of the Banks and dated the Effective Date
covering the matters set forth in Exhibit D and such other matters incident to
the transactions contemplated herein as the Administrative Agent may
reasonably request; (ii) from local counsel in all relevant jurisdictions
reasonably satisfactory to the Administrative Agent, opinions addressed to the
Administrative Agent and the Banks, dated the Effective Date, which shall be
in form and substance reasonably satisfactory to the Administrative Agent and
shall cover the security interests granted pursuant to the Security Agreement,
the Collateral Assignments and the Mortgages and such other matters incident
to the transactions contemplated herein as the Administrative Agent may
reasonably request; and (iii) from Hogan & Hartson L.L.P., counsel to the
REIT, the Borrower and the Subsidiary Guarantors, an opinion addressed to the
REIT and dated the Effective Date stating that equity interests (as defined in
DOL Regulation Section 2510.3-101(b)(1)) in the REIT are freely transferable
within the meaning of DOL Regulation Section 2510.3-101(b)(4) and that the
Administrative Agent and the Banks may rely upon such opinion.
4.04 Corporate and Partnership Documents; Proceedings; etc.
(a) On the Effective Date, the Administrative Agent shall have received a
certificate, dated the Effective Date, signed by the Secretary or an Assistant
Secretary of the REIT on behalf of each Credit Party, in the form of Exhibit E
with appropriate insertions, together with copies of the declaration of trust,
the certificate of incorporation and by-laws or other organizational documents
(including limited partnership agreements and certificates of limited
partnership) of each Credit Party and the resolutions of each Credit Party
referred to in such certificate, and the foregoing shall be reasonably
acceptable to the Administrative Agent.
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(b) All trust, corporate, partnership and legal proceedings
and all instruments and agreements in connection with the transactions
contemplated by this Agreement and the other Credit Documents shall be
reasonably satisfactory in form and substance to the Administrative Agent and
the Required Banks, and the Administrative Agent shall have received all
information and copies of all documents and papers, including records of
corporate and partnership proceedings, governmental approvals, good standing
certificates and bring-down telegrams, if any, which the Administrative Agent
may have reasonably requested in connection therewith, such documents and
papers where appropriate to be certified by proper trust, corporate,
partnership or governmental authorities.
4.05 Debt Agreements. On the Effective Date, there shall
have been delivered to the Administrative Agent true and correct copies,
certified as true and complete by an Authorized Officer of the Borrower, of
all agreements evidencing or relating to all Existing Indebtedness of the REIT
or of any of its Subsidiaries (collectively, "Debt Agreements"), all of which
Debt Agreements shall be in full force and effect and shall be reasonably
satisfactory to the Administrative Agent.
4.06 Pledge Agreement. On the Effective Date, each Credit
Party shall have duly authorized, executed and delivered a Pledge Agreement in
the form of Exhibit F-1 (as modified, supplemented or amended from time to
time, the "Pledge Agreement") and shall have delivered to the Collateral
Agent, as pledgee, all the certificated Pledged Securities, if any, referred
to therein then owned by such Credit Party, (x) endorsed in blank in the case
of promissory notes constituting Pledged Securities and (y) together with
executed and undated stock powers in blank, in the case of capital stock
constituting Pledged Securities.
4.07 Pledge and Security Agreement and Security Agreement.
On the Effective Date, each Credit Party shall have duly authorized, executed
and delivered (i) a Pledge and Security Agreement in the form of Exhibit F-2
(as modified, supplemented or amended from time to time, the "Pledge and
Security Agreement") covering all of such Credit Party's present and future
Pledge and Security Agreement Collateral and (ii) a Security Agreement in the
form of Exhibit G (as modified, supplemented or amended from time to time, the
"Security Agreement") covering all of the such Credit Party's present and
future Security Agreement Collateral, in each case together with:
(a) proper financing statements (Form UCC-1) fully executed
for filing under the UCC or other appropriate filing offices of each
jurisdiction as may be necessary or, in the reasonable opinion of the
Collateral Agent, desirable to perfect the security interests purported
to be created by the Pledge and Security Agreement and the Security
Agreement, as the case may be;
(b) certified copies of requests for information or copies
(Form UCC-11), or equivalent reports, listing all effective financing
statements that name any such Credit Party existing prior to the
Effective Date as debtor and that are filed in the jurisdictions
referred to in clause (a) above, together with copies of such other
financing statements that name any such Credit Party as debtor (none of
which shall cover the Collateral except to
21
the extent evidencing Permitted Liens or in respect of which the
Collateral Agent shall have received termination statements (Form
UCC-3 or such other termination statements as shall be required by
local law) fully executed for filing);
(c) evidence of the completion of all other recordings and
filings of, or with respect to, the Pledge and Security Agreement and
the Security Agreement as may be necessary or, in the reasonable
opinion of the Collateral Agent, desirable to perfect the security
interests intended to be created by the Pledge and Security Agreement
and the Security Agreement;
(d) executed copies of Pledged Entity Notices delivered to
each Pledged Partnership Entity and Pledged Limited Liability Company
and executed copies of Control Agreements executed by each Pledged
Partnership Entity and Pledged Limited Liability Company, together
with evidence that such other actions have been taken as may be
necessary or, in the reasonable opinion of the Collateral Agent,
desirable to perfect the security interests purported to be created by
the Pledge and Security Agreement; and
(e) evidence that all other actions necessary or, in the
reasonable opinion of the Collateral Agent, desirable to perfect and
protect the security interests purported to be created by the Pledge
and Security Agreement and the Security Agreement have been taken.
Notwithstanding the foregoing provisions of this Section 4.07, the Pledge and
Security Agreement shall not cover the partnership interests and limited
liability company interests owned by the Borrower in the Excluded
Subsidiaries.
4.08 Subsidiaries Guaranty. On the Effective Date, each
Subsidiary Guarantor shall have duly authorized, executed and delivered a
Subsidiaries Guaranty in the form of Exhibit H (as modified, amended or
supplemented from time to time, the "Subsidiaries Guaranty").
4.09 Collateral Assignments; Mortgages; Title Insurance;
Surveys; etc. On the Effective Date, the Collateral Agent shall have received
the following items, all of which shall be satisfactory to the Administrative
Agent:
(a) in respect of each Initial Borrowing Base Pledged
Mortgage Loan, (i) the original Pledged Mortgage Loan Documents,
including, without limitation, the mortgage note evidencing such
Initial Borrowing Base Pledged Mortgage Loan duly endorsed in blank,
and (ii) fully executed counterparts of a Collateral Assignment,
together with evidence that a fully executed counterpart of such
Collateral Assignment has been delivered to the title insurance
company insuring the lien of such Initial Borrowing Base Pledged
Mortgage Loan for recording in all places to the extent necessary, or
in the reasonable judgment of the Administrative Agent, desirable, to
create a valid and enforceable first priority lien on such Initial
Borrowing Base Pledged Mortgage Loan in favor of the Collateral Agent
(or such other trustee as may be required or desired under local law)
for the benefit of the Secured Creditors;
22
(b) in respect of each Initial Borrowing Base Property,
fully executed counterparts of a Mortgage, together with evidence that
a fully executed counterpart of such Mortgage has been delivered to
the title insurance company insuring the lien of such Mortgage for
recording in all places to the extent necessary, or in the reasonable
judgment of the Administrative Agent, desirable, to create a valid and
enforceable first priority mortgage lien on such Initial Borrowing
Base Property in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the
Secured Creditors;
(c) Mortgage Policies for each of the Initial Borrowing Base
Properties issued by Commonwealth Land Title Insurance Company or
other title insurers reasonably satisfactory to the Collateral Agent
in amounts reasonably satisfactory to the Administrative Agent
insuring the Collateral Agent that the Mortgage on each Initial
Borrowing Base Property is a valid and enforceable first priority lien
thereon, free and clear of all defects and encumbrances except
Permitted Liens applicable thereto, and such Mortgage Policies shall
otherwise be in form and substance reasonably satisfactory to the
Administrative Agent and shall include, as appropriate, an endorsement
for future advances under this Agreement and the Notes and covering
any other matter that the Collateral Agent in its reasonable
discretion may request, shall not include an exception for mechanics'
liens or creditors' rights, and shall provide for affirmative
insurance and such reinsurance as the Collateral Agent in its
reasonable discretion may request;
(d) an endorsement to each mortgagee title insurance policy
insuring each Initial Borrowing Base Pledged Mortgage Loan, listing
the Collateral Agent as collateral assignee of the related Initial
Borrowing Base Pledged Mortgage Loan and an additional insured (as its
interests may appear);
(e) surveys, in form and substance reasonably satisfactory
to the Administrative Agent, of the Initial Borrowing Base Properties
and the Mortgage Loan Properties securing the Initial Borrowing Base
Pledged Mortgage Loans, in each case, certified by a licensed
professional surveyor reasonably satisfactory to the Administrative
Agent and in form and substance reasonably satisfactory to the
Administrative Agent;
(f) properly executed financing statements under the UCC, in
form and substance satisfactory to the Administrative Agent, for
filing in each jurisdiction as the Administrative Agent has determined
to be necessary or desirable to perfect the security interests created
by the Collateral Assignments and the Mortgages in the Initial
Borrowing Base Properties and the Initial Borrowing Base Pledged
Mortgage Loans; and
(g) evidence reasonably satisfactory to the Administrative
Agent that all other filings, recordings and other actions the
Administrative Agent deems necessary or desirable to establish,
preserve and perfect the liens and security interests granted to the
Collateral Agent on behalf of the Banks in the Initial Borrowing Base
Properties and the Initial Borrowing Base Pledged Mortgage Loans have
been made or taken, as applicable.
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4.10 IPO. On or prior to the Effective Date, the IPO shall
have been consummated in a manner reasonably satisfactory to the
Administrative Agent and the net proceeds to the REIT and its Subsidiaries in
connection with the IPO shall be an amount equal to or greater than
$90,000,000.
4.11 Adverse Change, etc. (a) On the Effective Date,
nothing shall have occurred (and none of the Banks shall have become aware of
any facts, conditions or other information not previously known) which the
Administrative Agent or the Required Banks believe could reasonably be
expected to have a material adverse effect (i) on the rights or remedies of
the Administrative Agent, the Banks or the Issuing Bank, or on the ability of
any Credit Party to perform its respective obligations to the Administrative
Agent, the Banks or the Issuing Bank or (ii) on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the REIT, the Borrower, the REIT and its Subsidiaries taken as a whole or
the Borrower and its Subsidiaries taken as a whole.
(b) On or prior to the Effective Date, all necessary
governmental (domestic and foreign) and third party approvals in connection
with the making of the Loans, the issuance of the Letters of Credit and the
transactions contemplated by the Credit Documents and otherwise referred to
herein or therein shall have been obtained and remain in effect, and all
applicable waiting periods shall have expired without any action being taken
by any competent authority which restrains, prevents or imposes materially
adverse conditions upon the making of the Loans, the issuance of the Letters
of Credit and the transactions contemplated by the Credit Documents.
Additionally, there shall not exist any judgment, order, injunction or other
restraint issued or filed or a hearing seeking injunctive relief or other
restraint pending or notified prohibiting or imposing materially adverse
conditions upon the making of the Loans or the transactions contemplated by
the Credit Documents.
4.12 Litigation. On the Effective Date, no litigation by any
entity (private or governmental) shall be pending or, to the best knowledge of
the REIT and the Borrower, threatened (i) with respect to the making of the
Loans, the issuance of the Letters of Credit or the Credit Documents or any
documentation executed in connection therewith or the transactions
contemplated thereby or (ii) which the Administrative Agent or the Required
Banks believe could reasonably be expected to have a materially adverse effect
on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the REIT, the Borrower, the REIT and
its Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken
as a whole.
4.13 Initial Borrowing Base Properties, etc. (a) To
the extent not required by the other provisions of this Section 4 and except
as provided in Section 4.13(c), the Borrower shall have delivered to the
Administrative Agent all information and documentation (which shall be
satisfactory to the Administrative Agent in its sole discretion) with respect
to each Initial Borrowing Base Property which would be required pursuant to
Section 7.11 if such Initial Borrowing Base Property was a subsequently
acquired Borrowing Base Property.
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(b) To the extent not required by the other provisions of
this Section 4 and except as provided in Section 4.13(c), the Borrower shall
have delivered to the Administrative Agent all information and documentation
(which shall be satisfactory to the Administrative Agent in its sole
discretion) with respect to each Initial Borrowing Base Pledged Mortgage Loan
which would be required pursuant to Section 7.11 if such Initial Borrowing
Base Pledged Mortgage Loan was a subsequently acquired Borrowing Base Pledged
Mortgage Loan.
(c) Notwithstanding the foregoing provisions of this Section
4.13, the Borrower acknowledges and agrees that it has not, as of the
Effective Date, delivered satisfactory Environmental Reports and Engineering
Reports for the Initial Borrowing Base Properties and the Mortgage Loan
Properties securing the Initial Borrowing Base Pledged Mortgage Loans. The
Administrative Agent will, at the expense of the Borrower, commission such
Environmental Reports and Engineering Reports, and the REIT, the Borrower and
the Subsidiary Guarantors will, promptly upon demand by the Administrative
Agent, either (x) take all actions the Administrative Agent reasonably deems
to be necessary or desirable to correct, cure or otherwise remediate any
adverse matters disclosed in any of such Environmental Reports or Engineering
Reports, including, without limitation, any deferred maintenance items
identified in any of such Engineering Reports or the presence of any Hazardous
Materials identified in any of such Environmental Reports or (y) remove from
the Borrowing Base any affected Initial Borrowing Base Property or Initial
Borrowing Base Pledged Mortgage Loan. In addition, the Administrative Agent
shall have the right to remove from the Borrowing Base any Initial Borrowing
Base Property or Initial Borrowing Base Pledged Mortgage Loan the
Environmental Report or Engineering Report in respect of which discloses items
which the Administrative Agent determines could reasonably be expected to
materially and adversely affect the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the REIT, the
REIT and its Subsidiaries taken as a whole, the Borrower or the Borrower and
its Subsidiaries taken as a whole, or which the Administrative Agent
determines to be materially adverse to the interests of the Banks or the
Issuing Bank under any Credit Document or otherwise in respect of the Loans or
the Letters of Credit. In the event of any removal from the Borrowing Base of
an Initial Borrowing Base Property or an Initial Borrowing Base Pledged
Mortgage Loan, the Administrative Agent shall adjust the Borrowing Base
accordingly and shall notify the Borrower of such adjustment. Any failure by
the REIT, the Borrower or any Subsidiary Guarantor to comply in any material
respect with this Section 4.13(c) shall constitute an Event of Default. This
Section 4.13(c) shall survive the Effective Date and the making of Loans and
the issuance of Letters of Credit hereunder.
4.14 Solvency Certificate. On or prior to the Effective
Date, there shall have been delivered to the Administrative Agent a solvency
certificate in the form of Exhibit J, addressed to the Administrative Agent
and each of the Banks and dated the Effective Date from an Authorized
Financial Officer of the REIT providing the opinion of such Authorized
Financial Officer as to the solvency of the REIT and its Subsidiaries taken as
a whole and the Borrower on a stand-alone basis.
4.15 Pro Forma Balance Sheets. On or prior to the Effective
Date, the Administrative Agent shall have received unaudited pro forma
25
consolidated balance sheets and projections of the REIT and of the Borrower
and its Subsidiaries, in each case prepared on a basis consistent with the
financial statements referred to in Section 6.05(a) and in accordance with
GAAP except as specifically set forth in the notes to such balance sheets,
after giving effect to the transactions contemplated hereby, which
consolidated balance sheets and projections shall be in form and substance
reasonably satisfactory to the Administrative Agent.
4.16 Initial Borrowing Base Certificate. On the Effective
Date, the Borrower shall have delivered to the Administrative Agent the
initial Borrowing Base Certificate in the form of Exhibit L.
4.17 No Default; Representations and Warranties. On the
Effective Date, (i) there shall exist no Default or Event of Default and (ii)
all representations and warranties contained herein and in the other Credit
Documents shall be true and correct in all material respects with the same
effect as though such representations and warranties had been made on the
Effective Date (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified
date).
4.18 REIT Equity Interests Widely Held. On the Effective
Date, the equity interests (as defined in DOL Regulation Section
2510.3-101(b)(1)) in the REIT shall be widely held within the meaning of DOL
Regulation Section 2510.3-101(b)(3).
The occurrence of the Effective Date shall constitute a
representation and warranty by the REIT and the Borrower to the Administrative
Agent, each of the Banks and the Issuing Bank that all the conditions
specified in this Section 4 exist as of the Effective Date (except to the
extent that any of the conditions specified in this Section 4 are required to
be satisfactory to or determined by any Bank, the Required Banks, the
Collateral Agent and/or the Administrative Agent or otherwise expressly calls
for a subjective determination to be made by any Bank, the Required Banks, the
Collateral Agent and/or the Administrative Agent). All of the Notes,
certificates, legal opinions and other documents and papers referred to in
this Section 4, unless otherwise specified, shall be delivered to the
Administrative Agent at the Notice Office for the benefit of each of the Banks
and shall be in form and substance reasonably satisfactory to the Banks.
SECTION 5. Conditions Precedent to All Loans and Letters of
Credit. The obligation of each Bank to make Loans (including any Loans made on
the Effective Date), and the obligation of the Issuing Bank to issue Letters
of Credit, is subject, at the time of the making of each such Loan or the
issuance of each such Letter of Credit (except as hereinafter indicated), to
the satisfaction of the following conditions:
5.01 No Default; Representations and Warranties. At the time
of the making of each such Loan or the issuance of each such Letter of Credit
and also after giving effect thereto (i) there shall exist no Default or Event
of Default and (ii) all representations and warranties contained herein and in
the other Credit Documents shall be true and correct in all material respects
with the same effect as though such representations and warranties had been
made on the date of the making of such Loan or the issuance of such Letter of
Credit (it being understood and agreed that any representation or warranty
26
which by its terms is made as of a specified date shall be required to be true
and correct in all material respects only as of such specified date).
5.02 Notice of Borrowing. (a) Prior to the making of
each Loan, the Administrative Agent shall have received a Notice of Borrowing
meeting the requirements of Section 1.03(a).
(b) Prior to the issuance of each Letter of Credit, the
Administrative Agent and the Issuing Bank shall have received a Letter of
Credit Request meeting the requirements of Section 1.15.
5.03 Property Information; etc. Prior to the making of any
Loan or the issuance of any Letter of Credit, neither the Administrative Agent
nor the Required Banks shall have become aware of any negative facts,
conditions or other information which would reasonably lead the Administrative
Agent or the Required Banks to believe that the information provided in any
Information Package or otherwise pursuant to Sections 7.11 and 8.02(viii) with
respect to any Borrowing Base Property or any Borrowing Base Pledged Mortgage
Loan is not true and accurate in all material respects (or was not true and
accurate in all material respects at the time such Information Package was
furnished pursuant to this Agreement) or is incomplete by omitting to state
any fact necessary to make such information not misleading in any material
respect (or was incomplete by omitting to state any fact necessary to make
such information not misleading in any material respect at the time such
Information Package was furnished pursuant to this Agreement).
5.04 Certain Requirements with Respect to Loans and Letters
of Credit. (a) Prior to the making of any Loan or the issuance of any
Letter of Credit, the Administrative Agent shall have received a certificate
from an Authorized Financial Officer of the Borrower certifying as to the
specific uses to be made of the proceeds of such Loan or Letter of Credit,
which certificate shall be in form and detail reasonably satisfactory to the
Administrative Agent.
(b) Prior to or contemporaneously with (as applicable) the
incurrence of any Loan or the issuance of any Letter of Credit the proceeds of
which are to be used either (x) to acquire a Borrowing Base Property
(including by purchasing the capital stock or other equity interests of the
Person(s) owning such Borrowing Base Property) or (y) to purchase or provide a
Borrowing Base Pledged Mortgage Loan, the Borrower shall have satisfied the
relevant requirements of Sections 7.11 and 8.02(viii).
(c) Prior to the incurrence of any Loan or the issuance of
any Letter of Credit, the Borrower shall have delivered to the Administrative
Agent a Borrowing Base Certificate from an Authorized Financial Officer of the
Borrower, showing that, after giving effect to the incurrence of such Loan or
the issuance of such Letter of Credit, the total outstanding principal amount
of all Loans and Letter of Credit Outstandings will not exceed the Borrowing
Base as then in effect.
(d) Prior to or contemporaneously with the incurrence of any
Loan or, to the extent applicable, the issuance of any Letter of Credit, the
Borrower shall have delivered to the Administrative Agent (x) evidence, in
27
form and substance reasonably satisfactory to the Administrative Agent,
demonstrating that all mortgage recording taxes and similar taxes and charges
have been paid (or funds sufficient therefor have been deposited with the
title insurance company insuring the lien of the respective Mortgages and
Collateral Assignments for payment to the applicable taxing authorities) in
all jurisdictions as may be necessary with respect to such Loan or Letter of
Credit or that, in the reasonable opinion of the Administrative Agent, are
desirable to maintain the priority and/or enforceability of the Mortgages and
Collateral Assignments with respect to the Loans to be made or Letters of
Credit to be issued and all Loans theretofore made and all Letters of Credit
theretofore issued and (y) to the extent requested by the Administrative
Agent, a title update and endorsement as necessary to increase, or confirm,
the coverage (as applicable) of those Mortgage Policies for the respective
Borrowing Base Properties as may be necessary under applicable law to maintain
the priority of the mortgage lien as to the Loan to be made or the Letter of
Credit to be issued.
5.05 Subsequent Legal Opinions. If, at the time of the
making of any Loan or the issuance of any Letter of Credit subsequent to the
Effective Date, the Administrative Agent or the Required Banks shall have
reasonably determined that any facts, circumstances or conditions exist which
could reasonably be expected to adversely affect either (x) the ability of
counsel to issue at such time the legal opinions originally delivered pursuant
to Section 4.03 or (y) the perfection of any of the security interests created
pursuant to any Security Document, and the Administrative Agent or the
Required Banks shall have requested the Borrower to deliver one or more
opinions of counsel covering such of the matters set forth in the opinions of
counsel theretofore delivered pursuant to Section 4.03 as the Administrative
Agent or the Required Banks shall specify, then prior to the incurrence of
such Loan or the issuance of such Letter of Credit the Administrative Agent
shall have received from counsel (who shall be reasonably satisfactory to the
Administrative Agent) an opinion in form and substance reasonably satisfactory
to the Administrative Agent, addressed to the Administrative Agent and each of
the Banks and dated the date of such Loan or Letter of Credit, covering the
matters so specified.
The acceptance of the proceeds of each Loan and the issuance
of each Letter of Credit shall constitute a representation and warranty by the
REIT and the Borrower to the Administrative Agent, each of the Banks and the
Issuing Bank that all the conditions specified in this Section 5 and
applicable to such Loan exist as of that time (except to the extent that any
of the conditions specified in this Section 5 are required to be satisfactory
to or determined by any Bank, the Required Banks, the Collateral Agent and/or
the Administrative Agent or otherwise expressly calls for a subjective
determination to be made by any Bank, the Required Banks, the Collateral Agent
and/or the Administrative Agent). All of the certificates and other documents
and papers referred to in this Section 5, unless otherwise specified, shall be
delivered to the Administrative Agent at the Notice Office for the benefit of
each of the Banks.
SECTION 6. Representations and Warranties. In order to
induce the Banks and the Issuing Bank to enter into this Agreement and in
order to induce the Banks to make the Loans and participate in the Letters of
Credit and the Issuing Bank to issue the Letters of Credit as provided herein,
each of the REIT and the Borrower makes (as to itself and each of its
Subsidiaries), the following representations, warranties and agreements, all
of which shall survive the execution and delivery of this Agreement and the
Notes and the making of the Loans and the issuance of the Letters of Credit,
28
with the occurrence of the Effective Date and the incurrence of each Loan and
the issuance of each Letter of Credit on or after the Effective Date being
deemed to constitute a representation and warranty that the matters specified
in this Section 6 are true and correct in all material respects on and as of
the Effective Date and on the date of the making of each such Loan and the
issuance of each such Letter of Credit (it being understood and agreed that
any representation or warranty which by its terms is made as of a specified
date shall be required to be true and correct in all material respects only as
of such specified date).
6.01 Status. Each of the REIT and each of its Subsidiaries
(i) is a duly organized and validly existing real estate investment trust,
corporation, partnership or limited liability company, as the case may be, in
good standing (if applicable) under the laws of the jurisdiction of its
formation, (ii) has the trust, corporate, partnership or limited liability
company power and authority, as the case may be, to own or lease its property
and assets and to transact the business in which it is engaged and presently
proposes to engage and (iii) is duly qualified and is authorized to do
business and is in good standing in each jurisdiction where the conduct of its
business requires such qualifications except for failures to be so qualified
which, individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the REIT and
its Subsidiaries taken as a whole or the Borrower and its Subsidiaries taken
as a whole.
6.02 Power and Authority. Each Credit Party has the trust,
corporate, partnership or limited liability company power and authority, as
the case may be, to execute, deliver and perform the terms and provisions of
each of the Credit Documents to which it is a party and has taken all
necessary trust, corporate, partnership or limited liability company action,
as the case may be, to authorize the execution, delivery and performance by it
of each of such Credit Documents. Each Credit Party has duly executed and
delivered each of the Credit Documents to which it is a party, and each of
such Credit Documents constitutes the legal, valid and binding obligation of
such Credit Party enforceable in accordance with its terms, except to the
extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency, fraudulent conveyance, reorganization or other similar
laws generally affecting creditors' rights and by equitable principles
(regardless of whether enforcement is sought in equity or at law).
6.03 No Violation. Neither the execution, delivery or
performance by any Credit Party of the Credit Documents to which it is a
party, nor compliance by it with the terms and provisions thereof, (i) will
contravene any provision of any applicable law, statute, rule or regulation or
any applicable order, writ, injunction or decree of any court or governmental
instrumentality, (ii) will conflict with or result in any breach of any of the
terms, covenants, conditions or provisions of, or constitute a default under,
or result in the creation or imposition of (or the obligation to create or
impose) any Lien (except pursuant to the Security Documents) upon any of the
properties or assets of the REIT or any of its Subsidiaries pursuant to the
terms of any indenture, mortgage, deed of trust, credit agreement or loan
agreement, or any other material agreement, contract or instrument, to which
the REIT or any of its Subsidiaries is a party or by which it or any of its
property or assets is bound or to which it may be subject or (iii) will
29
violate any provision of the declaration of trust, certificate of
incorporation, partnership agreement, certificate of partnership, limited
liability company agreement or by-laws, as the case may be, of the REIT or any
of its Subsidiaries.
6.04 Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or registration
with (except as have been obtained or made and which remain in full force and
effect), or exemption by, any governmental or public body or authority, or any
subdivision thereof, is required to authorize, or is required in connection
with, (i) the execution, delivery and performance of any Credit Document or
(ii) the legality, validity, binding effect or enforceability of any Credit
Document.
6.05 Financial Statements; Financial Condition; Undisclosed
Liabilities; Projections; etc. (a) (i) To the best knowledge of the
REIT and the Borrower, the unaudited operating statements for each Initial
Borrowing Base Property and each Mortgage Loan Property securing an Initial
Borrowing Base Pledged Mortgage Loan for the year ended June 30, 1997 or
September 30, 1997, as applicable, and (ii) the unaudited pro forma
consolidated balance sheet of the REIT and its Subsidiaries as of September
30, 1997 and the unaudited pro forma consolidated statement of operations of
the REIT for the year ended December 31, 1996 and the nine month period ended
September 30, 1997 (which statements have been prepared based on the
assumption that (x) in the case of the balance sheet, the Initial Borrowing
Base Properties and Initial Borrowing Base Pledged Mortgage Loans were
acquired by the Borrower or its Subsidiaries on September 30, 1997 and (y) in
the case of the statements of operations for each of the year ended December
31, 1997 and the nine months ended September 30, 1997, the Initial Borrowing
Base Properties and Initial Borrowing Base Pledged Mortgage Loans were
acquired by the Borrower or its Subsidiaries on January 1, 1996 and January 1,
1997, respectively and each present fairly the pro forma historical financial
results of the Initial Borrowing Base Properties and each Mortgage Loan
Property securing an Initial Borrowing Base Pledged Mortgage Loan (and the
combined results which would have applied on the basis of the assumptions
provided above). All information contained in each Information Package
furnished to the Banks pursuant to Section 4.13 (with respect to the Initial
Borrowing Base Properties and Initial Borrowing Base Pledged Mortgage Loans)
or Section 7.11 (with respect to subsequently acquired Borrowing Base
Properties and Borrowing Base Pledged Mortgage Loans) is, to the best
knowledge of the Borrower, true and accurate in all material respects and not
incomplete by omitting to state any fact necessary to make such information
not misleading in any material respect. Since September 30, 1997 (but assuming
that the Initial Borrowing Base Properties and Initial Borrowing Base Pledged
Mortgage Loans had been acquired by the Borrower or its Subsidiaries on such
date), there has been no material adverse change in the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the REIT, the REIT and its Subsidiaries taken as a whole, the Borrower or
the Borrower and its Subsidiaries taken as a whole. The pro forma financial
statements described in this Section 6.05(a) are consistent with the financial
information set forth in the Form S-11 Registration Statement filed with the
SEC in connection with the IPO.
(b) On and as of the Effective Date and on the date on which
each Loan is made and each Letter of Credit is issued, on a Pro Forma Basis
30
after giving effect to all Indebtedness (including the Loans) being incurred
or assumed and Liens created by each Credit Party in connection therewith, (x)
the sum of the assets, at a fair valuation, of the REIT and its Subsidiaries
(taken as a whole) and the Borrower (on a stand-alone basis) will exceed their
respective debts (with contingent liabilities being valued with respect to
each such entity at the estimated amount for which such entity is reasonably
likely to be liable), (y) the REIT and its Subsidiaries (taken as a whole) and
the Borrower (on a stand-alone basis) have not incurred and do not intend to
incur, and do not believe that they will incur, debts beyond their ability to
pay such debts as such debts mature and (z) the REIT and its Subsidiaries
(taken as a whole) and the Borrower (on a stand-alone basis) have sufficient
capital with which to conduct its business. For purposes of this Section
6.05(b) "debt" means any liability on a claim, and "claim" means (i) right to
payment whether or not such a right is reduced to judgment, liquidated,
unliquidated, fixed, contingent, matured, unmatured, disputed, undisputed,
legal, equitable, secured or unsecured or (ii) right to an equitable remedy
for breach of performance if such breach gives rise to a payment, whether or
not such right to an equitable remedy is reduced to judgment, fixed,
contingent, matured, unmatured, disputed, undisputed, secured or unsecured.
(c) Except as fully disclosed in the financial statements
delivered pursuant to Section 6.05(a), there were as of the Effective Date no
liabilities or obligations with respect to the REIT or any of its Subsidiaries
of any nature whatsoever (whether absolute, accrued, contingent or otherwise
and whether or not due) which, either individually or in aggregate, would be
material to the REIT, the Borrower or the Borrower and its Subsidiaries taken
as a whole. As of the Effective Date, neither the REIT nor the Borrower knows
of any basis for the assertion against it or any of its Subsidiaries of any
liability or obligation of any nature that is not fully disclosed in the
financial statements delivered pursuant to Section 6.05(a) which, either
individually or in the aggregate, could reasonably be expected to have a
material adverse effect on the REIT, the REIT and its Subsidiaries taken as a
whole, the Borrower or the Borrower and its Subsidiaries taken as a whole.
(d) On and as of the Effective Date, the financial
projections for the 12 month period commencing on the Effective Date,
including those prepared on a combined basis and those prepared for the
individual Initial Borrowing Base Properties and Initial Borrowing Base
Pledged Mortgage Loans (the "Projections") previously delivered to the
Administrative Agent and the Banks have been prepared on a basis consistent in
all material respects with the financial statements referred to in Section
6.05(a) (other than as set forth or presented in such Projections), and there
are no statements or conclusions in any of the Projections which are based
upon or include information known to the REIT or the Borrower to be misleading
in any material respect or which fail to take into account known material
information regarding the matters reported therein. On the Effective Date,
each of the REIT and the Borrower believed that the Projections were
reasonable and attainable. On the date of the delivery of any projections
contained in the Information Package with respect to each subsequently
acquired Borrowing Base Property or Borrowing Base Pledged Mortgage Loan,
there shall be no statements or conclusions in any of such projections which
are based upon or include information known by the REIT or the Borrower to be
misleading in any material respect or which fail to take into account known
material information regarding the matters reported therein. On the date any
31
such projections are furnished pursuant to Section 7.11, each of the REIT and
the Borrower shall believe that such projections are reasonable and
attainable.
6.06 Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of the REIT or the Borrower, threatened (i)
with respect to any Credit Document, (ii) with respect to any material
Indebtedness of the REIT or any of its Subsidiaries or (iii) that could
reasonably be expected to materially and adversely affect the business,
operations, property, assets, liabilities, condition (financial or otherwise)
or prospects of the REIT and its Subsidiaries taken as a whole, or the
Borrower and its Subsidiaries taken as a whole.
6.07 True and Complete Disclosure. All factual information
(taken as a whole) furnished by or on behalf of the REIT or any of its
Subsidiaries in writing to the Administrative Agent or any Bank, including,
without limitation, all information contained in the Credit Documents and all
information contained in each Information Package furnished to the Banks
pursuant to Section 4.13 (with respect to the Initial Borrowing Base
Properties and Initial Borrowing Base Pledged Mortgage Loans) or 7.11 (with
respect to subsequently acquired Borrowing Base Properties and Borrowing Base
Pledged Mortgage Loans), for purposes of or in connection with this Agreement,
the other Credit Documents or any transaction contemplated herein or therein
is, and all other such factual information (taken as a whole) hereafter
furnished by or on behalf of the REIT, or any of the its Subsidiaries in
writing to the Administrative Agent or any Bank, for purposes of or in
connection with this Agreement, will be, true and accurate in all material
respects on the date as of which such information is dated or certified and,
to the best of the REIT's and the Borrower's knowledge, not incomplete by
omitting to state any fact necessary to make such information (taken as a
whole) not misleading in any material respect at such time in light of the
circumstances under which such information is or was provided.
6.08 Use of Proceeds; Margin Regulations. (a) The
proceeds of all Loans shall be used by the Borrower and its Subsidiaries,
subject to the other restrictions set forth in this Agreement, (i) to acquire
Borrowing Base Properties and to provide or purchase Borrowing Base Pledged
Mortgage Loans, (ii) for working capital in connection with the acquisition of
Borrowing Base Properties, (iii) to pay fees and expenses incurred in
connection with the acquisition of Borrowing Base Properties and the provision
or purchase of Borrowing Base Pledged Mortgage Loans, (iv) to repay
Indebtedness, (v) to make acquisitions pursuant to Section 8.02(ix) and/or
Investments pursuant to Sections 8.05(vi) and (vi) for working capital and
other general corporate purposes.
(b) No part of the proceeds of any Loan or Letter of Credit
will be used to purchase or carry any Margin Stock or to extend credit for the
purpose of purchasing or carrying any Margin Stock. Neither the making of any
Loan nor the issuance of any Letter of Credit nor the use of the proceeds
thereof will violate or be inconsistent with the provisions of Regulation G,
T, U or X of the Board of Governors of the Federal Reserve System.
6.09 Tax Returns and Payments. Each of the REIT and each of
its Subsidiaries has timely filed or caused to be timely filed, on the due
32
dates thereof or within applicable grace periods, with the appropriate taxing
authority, all Federal, state and other material returns, statements, forms
and reports for taxes (the "Returns") required to be filed by or with respect
to the income, properties or operations of the REIT and/or its Subsidiaries.
The Returns accurately reflect in all material respects all liability for
taxes of the REIT and its Subsidiaries for the periods covered thereby. Each
of the REIT and each of its Subsidiaries has paid all material taxes payable
by them other than taxes which are not delinquent, and other than those
contested in good faith and for which adequate reserves have been established
in accordance with generally accepted accounting principles. There is no
material action, suit, proceeding, investigation, audit, or claim now pending
or, to the best knowledge of the REIT or the Borrower, threatened by any
authority regarding any material taxes relating to the REIT or any of its
Subsidiaries. As of the Effective Date, neither the REIT nor any of its
Subsidiaries has entered into an agreement or waiver or been requested to
enter into an agreement or waiver extending any statute of limitations
relating to the payment or collection of taxes of the REIT or any of its
Subsidiaries.
6.10 Compliance with ERISA. Each Plan that is a single
employer plan as defined in Section 4001(a)(15) of ERISA (a "Single Employer
Plan") is in substantial compliance with ERISA and the Code; no Reportable
Event has occurred with respect to a Single Employer Plan; to the best
knowledge of the REIT or the Borrower, no Multiemployer Plan is insolvent or
in reorganization; no Single Employer Plan has an Unfunded Current Liability;
no Single Employer Plan which is subject to Section 412 of the Code or Section
302 of ERISA has an accumulated funding deficiency, within the meaning of such
Sections of the Code or ERISA, or has applied for or received an extension of
any amortization period within the meaning of Section 412 of the Code or
Section 303 or 304 of ERISA; all contributions required to be made by the REIT
or any of its Subsidiaries or any ERISA Affiliate with respect to a Plan have
been timely made; neither the REIT nor any of its Subsidiaries nor any ERISA
Affiliate has incurred any material liability to or on account of a Plan
pursuant to ERISA or the Code or reasonably expects to incur any material
liability (including any indirect, contingent, or secondary liability) under
ERISA or the Code with respect to any Plan except for contributions to such
Plans and benefit payments from such Plans in the ordinary course of business;
no proceedings have been instituted to terminate or appoint a trustee to
administer any Single Employer Plan; to the best knowledge of the REIT or the
Borrower, no proceedings have been instituted to terminate or appoint a
trustee to administer any Multiemployer Plan; no action, suit, proceeding,
hearing or regulatory agency investigation with respect to the administration,
operation or the investment of assets of any Single Employer Plan (other than
claims for benefits) is pending, expected or threatened; to the best knowledge
of the REIT or the Borrower, no action, suit, proceeding, hearing or
regulatory agency investigation with respect to the administration, operation
or the investment of assets of any Multiemployer Plan (other than claims for
benefits) is pending, expected or threatened; no condition exists which
presents a substantial risk to the REIT or any of its Subsidiaries or any
ERISA Affiliate of incurring a material liability to or on account of a Single
Employer Plan pursuant to ERISA and the Code except for contributions to such
Plans and benefit payments from such Plans in the ordinary course of business;
to the best knowledge of the REIT or the Borrower, no condition exists which
presents a substantial risk to the REIT or any of its Subsidiaries or any
33
ERISA Affiliate of incurring any material liability to or on account of a
Multiemployer Plan pursuant to ERISA and the Code except for contributions to
such Plans and benefit payments from such Plans in the ordinary course of
business; the REIT and the Borrower believe that the aggregate liabilities of
the REIT and its Subsidiaries and its ERISA Affiliates to all Multiemployer
Plans in the event of a withdrawal therefrom, as of the close of the most
recent fiscal year of each such plan ended prior to the date of the incurrence
of any Loan or the issuance of any Letter of Credit, could not reasonably be
expected to have a material adverse effect on the ability of the REIT or any
of its Subsidiaries to perform its obligations under this Agreement or the
other Credit Documents to which it is a party; each group health plan (as
defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code) which
covers or has covered employees or former employees of the REIT or any of its
Subsidiaries or any ERISA Affiliate has at all times been operated in
substantial compliance with the provisions of Part 6 of subtitle B of Title I
of ERISA and Section 4980B of the Code; no lien imposed under the Code or
ERISA on the assets of the REIT or any of its Subsidiaries or any ERISA
Affiliate exists or, to the best knowledge of the REIT or the Borrower is
likely to arise on account of any Plan; and the REIT and its Subsidiaries do
not maintain or contribute to (A) any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) which provides benefits to retired employees
or other former employees (other than as required by Section 601 of ERISA) or
(B) any Plan, the obligations with respect to which could reasonably be
expected to have a material adverse effect on the ability of the REIT or any
of its Subsidiaries to perform its obligations under this Agreement or the
other Credit Documents to which it is a party.
6.11 The Security Documents. (a) With respect to the
Security Agreement Collateral that consists of cash, Cash Equivalents and
property in which a security interest may be perfected by the filing of a
financing statement under the UCC, upon (i) possession by the Collateral Agent
or its designee in the case of cash, (ii) the taking of all action required
under Article 8 or Article 9, as applicable, of the UCC in the case of Cash
Equivalents and instruments and (iii) the filing of appropriate financing
statements under the UCC in the case of such other Security Agreement
Collateral (all of the foregoing actions described in preceding clauses (i),
(ii) and (iii) having been done and being in full force and effect with
respect to such Security Agreement Collateral owned by such Credit Party on
any date on which this representation and warranty is made or deemed made or,
(x) in the case of the Effective Date, will have been done within 10 days
following the Effective Date or (y) in the case of any Security Agreement
Collateral acquired on any Addition Date, within 10 days following such
Addition Date), the Collateral Agent has been granted, for the benefit of the
Secured Creditors and pursuant to the Security Agreement, a legal, valid and
enforceable security interest in all right, title and interest of such Credit
Party in such Security Agreement Collateral, which security interest is a
fully perfected first lien on, and security interest in, all right, title and
interest of such Credit Party in all of such Security Agreement Collateral,
subject to no other Liens other than Permitted Liens. Each Credit Party has
good and marketable title to all Security Agreement Collateral, free and clear
of all Liens except those described above in this clause (a).
(b) Upon delivery to the Collateral Agent of any
certificated Pledged Securities referred to in the Pledge Agreement and upon
the taking of all actions required by Article 8 or Article 9, as applicable,
of the UCC (which delivery and/or such other actions have been done and remain
in full force and effect as to all such Pledge Agreement Collateral owned by
any Credit Party on any date on which this representation and warranty is made
or deemed made), the security interests created in favor of the Collateral
Agent, as Pledgee, for the benefit of the Secured Creditors under the Pledge
Agreement constitute first priority perfected security interests in the
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Pledged Securities described in the Pledge Agreement and owned by the Credit
Parties party thereto on any date on which this representation and warranty is
made or deemed made, subject to no security interests of any other Person. No
filings or recordings (except as have been done in connection with any
uncertificated Pledged Stock) are required in order to perfect (or maintain
the perfection or priority of) the security interests created in the Pledged
Securities and the proceeds thereof under the Pledge Agreement.
(c) The Mortgages create (upon recordation in all relevant
jurisdictions, which recordations have been made and remain in full force and
effect as to all Borrowing Base Properties owned or leased by any Credit Party
on any date on which this representation is made or deemed made (or, in the
case of any Borrowing Base Property included in the Borrowing Base subsequent
to the Effective Date, such recordation will have been made within 10 days
following the related Addition Date)), as security for the obligations
purported to be secured thereby, a valid and enforceable perfected first
priority security interest in and mortgage lien on all of the Borrowing Base
Properties owned by any Credit Party on any date on which this representation
and warranty is made or deemed made and in favor of the Collateral Agent (or
such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors, superior to and prior to the rights of all
third Persons (except that the security interest and mortgage lien created in
each Borrowing Base Property may be subject to the Permitted Encumbrances
related thereto) and subject to no other Liens (other than Permitted Liens).
Schedule III contains a true and complete list of each parcel of Real Property
owned or leased by the REIT and its Subsidiaries on the Effective Date, the
type of interest therein held by the REIT or any such Subsidiary and indicates
which of such Real Properties constitute Initial Borrowing Base Properties.
Each of the Borrower or the respective Subsidiary Guarantor, as the case may
be, has good and marketable title in fee, or a valid ground leasehold
interest, in and to all Borrowing Base Properties owned or ground leased by it
on any date on which this representation and warranty is made or deemed made,
free and clear of all Liens except those described in the first sentence of
this subsection (c). On and as of any date on which this representation and
warranty is made or deemed made, each Borrowing Base Property is a Qualified
Property.
(d) The Pledge and Security Agreement creates (after all
steps required under Article 8 or Article 9, as applicable, of the UCC have
been taken) in favor of the Collateral Agent for the benefit of the Secured
Creditors a legal, valid and enforceable security interest in all right, title
and interest of each Credit Party in the Pledge and Security Agreement
Collateral described therein and owned by such Credit Party on any date on
which this representation and warranty is made or deemed made, which security
interest shall, (i) upon delivery to the Collateral Agent of any certificates
evidencing equity interests in a Pledged Partnership Entity or Pledged Limited
Liability Company, (ii) upon the filing of appropriate financing statements
under the UCC in respect of any Partnership Interest or Limited Liability
Company Interest that is not represented by a certificate and (iii) upon the
taking of all steps required under Article 8 or Article 9, as applicable, of
the UCC (which delivery, filings and/or steps have been done and remain in
full force and effect as to the Pledge and Security Agreement Collateral owned
by any Credit Party on any date on which this representation and warranty is
made or deemed made), constitute a fully perfected first lien on, and security
interest in, all right, title and interest of such Credit Party in all of the
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Pledge and Security Agreement Collateral described therein, subject to no
security interests of any other Person.
(e) The Collateral Assignments create (upon recordation in
all relevant jurisdictions, which recordations have been made and remain in
full force and effect as to all Borrowing Base Pledged Mortgage Loans owned by
any Credit Party on any date on which this representation is made or deemed
made (or, in the case of any Borrowing Base Pledged Mortgage Loan included in
the Borrowing Base subsequent to the Effective Date, such recordation will
have been made within 10 days following the related Addition Date)), as
security for the obligations purported to be secured thereby, a valid and
enforceable perfected first priority security interest in all of the Borrowing
Base Pledged Mortgage Loans owned by the Borrower on any date on which this
representation and warranty is made or deemed made and in favor of the
Collateral Agent (or such other trustee as may be required or desired under
local law) for the benefit of the Secured Creditors, superior to and prior to
the rights of all third Persons and subject to no other Liens (other than
Permitted Liens). Schedule VIII contains a true and complete list of each
Mortgage Loan owned by the Borrower and its Subsidiaries on the Effective Date
and indicates which of such Mortgage Loans constitute Initial Borrowing Base
Pledged Mortgage Loans. The Borrower has good title to all Borrowing Base
Pledged Mortgage Loans owned by it on any date on which this representation
and warranty is made or deemed made, free and clear of all Liens except those
described in the first sentence of this subsection (e). On and as of any date
on which this representation and warranty is made or deemed made, each
Borrowing Base Pledged Mortgage Loan is a Qualified Mortgage Loan.
6.12 Status as REIT. The REIT is organized in conformity
with the requirements for qualification as a real estate investment trust
under the Code. The REIT is in a position to qualify for its current Fiscal
Year as a real estate investment trust under the Code and its proposed methods
of operation will enable it to so qualify.
6.13 Properties. Each of the REIT and each of its
Subsidiaries has good and marketable title to all material properties owned by
them, including, in the case of the Borrower and its Subsidiaries, all
material property reflected in the consolidated balance sheet of the Borrower
and its Subsidiaries referred to in Section 6.05(a) and in the pro forma
balance sheet referred to in Section 4.15 (except as sold or otherwise
disposed of since the date of such balance sheet in the ordinary course of
business, free and clear of all Liens, other than (i) as referred to in such
balance sheet or in the notes thereto or in such pro forma balance sheet or
(ii) Permitted Liens). Except as may be disclosed in the Engineering Reports,
each Borrowing Base Property and each Mortgage Loan Property securing a
Borrowing Base Pledged Mortgage Loan is free of material structural defects
and is in good repair (ordinary wear and tear excepted) and all building
systems contained therein are in good working order in all material respects
subject to ordinary wear and tear, and is free and clear of any damage that
could reasonably be expected to materially and adversely affect the value of
such Borrowing Base Property or such Mortgage Loan Property as to the use
thereof for its intended purposes.
6.14 Healthcare Matters. (a) To the best knowledge of
the REIT and the Borrower after reasonable investigation, each Operating
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Lessee (i) has, with respect to each of the Properties it leases, all licenses
required under applicable law to operate each of such Properties and to
conduct the business in which it is currently engaged, (ii) has, with respect
to each Property it leases, received any certificate of need, determination of
need or similar approval required under applicable law, and any amendments or
supplements with respect thereto, and such approvals are in full force and
effect, and (iii) with respect to Properties that are operated as nursing
facilities (except where participation in Medicare or Medicaid is deemed
undesirable in the reasonable business judgment of the Operating Lessee) is a
party to provider agreements with respect to the participation of such
Properties in Medicare and Medicaid, which provider agreements are in full
force and effect, and are not, and for the past five calendar years have not
been, the subject of any proceedings that have been initiated or notices
issued by any Person to suspend, revoke, limit or otherwise modify any such
provider agreement, except, with respect to foregoing clauses (i), (ii) and
(iii), such licenses, approvals, certifications and provider agreements as to
which any lack thereof could not reasonably be expected to materially and
adversely affect the value of any Borrowing Base Property or Mortgage Loan
Property or the aggregate value of any other Properties, and except such
proceedings which could not, individually or in the aggregate, reasonably be
expected to have a material adverse effect upon the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the REIT and its Subsidiaries, taken as a whole, or the Borrower and its
Subsidiaries, taken as a whole.
(b) To the best knowledge of the REIT and the Borrower after
reasonable investigation, each Property (i) complies with all applicable
federal, state and local laws, regulations, quality and safety standards,
building and fire codes, accreditation standards and health care, nursing
facility or other requirements of any state department of health or other
federal, state or local governmental authorities, (ii) complies with all
requirements for participation in, and is in conformity with, all insurance,
reimbursement and cost reporting requirements imposed by law or regulation and
has a current provider agreement which is in full force and effect under,
Medicare and Medicaid, and (iii) is not, and for the past five calendar years
has not been, the subject of any proceedings that have been initiated or
notices issued by any Person to suspend, revoke, limit or otherwise modify any
such provider agreement, except, with respect to foregoing clauses (i), (ii)
and (iii), such failures to comply and failures to conform which could not
reasonably be expected to materially and adversely affect the value of any
Borrowing Base Property or Mortgage Loan Property or the aggregate value of
any other Properties, and except such proceedings which could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect upon the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the REIT and its
Subsidiaries taken as a whole, or the Borrower and its Subsidiaries taken as a
whole. To the best knowledge of the REIT and the Borrower, in the event that
the Collateral Agent or any purchaser at foreclosure or similar proceeding
acquires any Property through foreclosure or similar proceeding or otherwise,
or in the event that the Operating Lease relating to a Property is terminated,
neither the Collateral Agent, such purchaser, any subsequent lessee, manager
or operator, nor the Borrower or any of its Subsidiaries, would be required to
obtain any certificate of need, determination of need, or other similar
approval relating solely to operation of the Property as a health care
facility (a "CON"), from any applicable health care regulator or authority or
any other governmental authority prior to applying for, or receiving,
applicable licenses and certifications to continue to operate such Property as
37
a health care facility except to the extent that (i) the facility has made any
capital improvements or instituted any new institutional health services since
the date of the Closing and has applied for, but not yet received, any
applicable CON, or (ii) such health care regulator or authority or
governmental authority requires the issuance or transfer of a CON in the event
of a change of ownership or control of a health care facility.
6.15 Subsidiaries. The REIT has no Subsidiaries other than
the Borrower and the Borrower's Subsidiaries. The Borrower has no Subsidiaries
other than (i) those Subsidiaries listed on Schedule IV and (ii) new
Subsidiaries created in compliance with Section 8.12.
6.16 Compliance with Statutes, etc. (a) Each of the
REIT and each of its Subsidiaries is in compliance with all applicable
statutes, regulations and orders of, and all applicable restrictions imposed
by, all governmental bodies, domestic or foreign, in respect of the conduct of
its business and the ownership of its property (including applicable statutes,
regulations, orders and restrictions relating to environmental standards and
controls), except such noncompliances as could not, individually or in the
aggregate, reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the REIT and its Subsidiaries taken as a whole, or
the Borrower and its Subsidiaries taken as a whole.
(b)(i) Each Borrowing Base Property and each Mortgage Loan
Property securing a Borrowing Base Pledged Mortgage Loan complies in all
material respects with all Legal Requirements, (ii) all material consents,
licenses, certificates and permits required by all Legal Requirements for the
construction or the operation, as applicable, of each Borrowing Base Property
and each Mortgage Loan Property securing a Borrowing Base Pledged Mortgage
Loan have been obtained and are in full force and effect and (iii) all utility
services and facilities necessary for the operation of each Borrowing Base
Property and each Mortgage Loan Property securing a Borrowing Base Pledged
Mortgage Loan are available at such Borrowing Base Property or Mortgage Loan
Property, as applicable.
6.17 Investment Company Act. Neither the REIT nor any of its
Subsidiaries is an "investment company" or a company "controlled" by an
"investment company," within the meaning of the Investment Company Act of
1940, as amended.
6.18 Public Utility Holding Company Act. Neither the REIT
nor any of its Subsidiaries is a "holding company," or a "subsidiary company"
of a "holding company," or an "affiliate" of a "holding company" or of a
"subsidiary company" of a "holding company" within the meaning of the Public
Utility Holding Company Act of 1935, as amended.
6.19 Environmental Matters. (a) Each of the REIT and each of
its Subsidiaries has complied with all applicable Environmental Laws and the
requirements of any permits issued under such Environmental Laws. There are no
pending or, to the best knowledge of the REIT and the Borrower, threatened
Environmental Claims against the REIT or any of its Subsidiaries or any Real
Property owned or operated by the REIT or any of its Subsidiaries. To the best
knowledge of the REIT and the Borrower, there are no pending or
38
threatened Environmental Claims against any borrower under a Mortgage Loan or
any Mortgage Loan Property. To the best knowledge of the REIT and the
Borrower, there are no facts, circumstances, conditions or occurrences on any
Real Property owned or operated by the REIT or any of its Subsidiaries or on
any Mortgage Loan Property or on any property adjoining any such Real Property
or Mortgage Loan Property that could reasonably be expected (i) to form the
basis of an Environmental Claim against the REIT or any of its Subsidiaries or
any such Real Property or any such Mortgage Loan Property or the borrower
under any such Mortgage Loan or (ii) to cause any such Real Property or
Mortgage Loan Property to be subject to any restrictions on the ownership,
occupancy, use or transferability of such Real Property or Mortgage Loan
Property under any applicable Environmental Law.
(b) To the best knowledge of the REIT and the Borrower,
except as otherwise set forth in the environmental reports delivered to the
Administrative Agent prior to the Effective Date, Hazardous Materials have not
at any time been generated, used, treated or stored on, or transported to or
from, or Released on or from, any Real Property owned or operated by the REIT
or any of its Subsidiaries or any Mortgage Loan Property except in compliance
with all applicable Environmental Laws and reasonably required in connection
with the operation, use and maintenance of any such Real Property or Mortgage
Loan Property.
6.20 Labor Relations. To the best knowledge of the REIT and
the Borrower, no Operating Lessee or Manager is engaged in any unfair labor
practice with respect to any Property that could reasonably be expected to
have a material adverse effect on the business, operations, property, assets,
liabilities, condition (financial or otherwise) or prospects of the REIT and
its Subsidiaries taken as a whole, or the Borrower and its Subsidiaries taken
as a whole. To the best knowledge of the REIT and the Borrower, there is (i)
no unfair labor practice complaint pending or reasonably expected to arise
against any Operating Lessee or Manager before the National Labor Relations
Board and no significant grievance or significant arbitration proceeding
arising out of or under any collective bargaining agreement is so pending or
reasonably expected to arise against any Operating Lessee or Manager, (ii) no
strike, labor dispute, slowdown or stoppage is pending or reasonably expected
to arise against any Operating Lessee or Manager and (iii) no union
representation question exists with respect to the employees of any Operating
Lessee or Manager, in each case with respect to the Properties operated by the
Operating Lessees or Managers, except (with respect to any matter specified in
clause (i), (ii) or (iii) above, either individually or in the aggregate) such
as could not reasonably be expected to have a material adverse effect on the
business, operations, property, assets, liabilities, condition (financial or
otherwise) or prospects of the REIT and its Subsidiaries taken as a whole, or
the Borrower and its Subsidiaries taken as a whole.
6.21 Intellectual Property. Each of the REIT and each of its
Subsidiaries, and, to the best knowledge of the REIT and the Borrower, each
Operating Lessee, owns or has the right to use all material trademarks,
permits, service marks, trade names, licenses and franchises necessary for the
conduct of its respective businesses.
6.22 Indebtedness. Schedule V sets forth a true and complete
list of all Indebtedness (excluding Indebtedness of the type described in
39
Section 8.04(iii)) of the REIT and its Subsidiaries as of the Effective Date
(excluding the Loans and the Letters of Credit, the "Existing Indebtedness"),
in each case showing the aggregate principal amount thereof and the name of
the respective borrower and any other entity which directly or indirectly
guaranteed such debt.
6.23 Operating Leases; Management Agreements; Ground Leases.
(a) Each Operating Lease with respect to any Borrowing Base Property
and each Management Agreement with respect to any Borrowing Base Property that
is not leased to an Operating Lessee is in full force and effect and no party
thereto has denied or disaffirmed any of its material obligations thereunder
or has defaulted in the due performance or observance of any material term,
covenant or agreement on its part to be performed or observed pursuant
thereto.
(b) Each ground lease with respect to any Borrowing Base
Property which is a Leasehold and each ground lease with respect to any
Mortgage Loan Property securing a Borrowing Base Pledged Mortgage Loan which
is a Leasehold is in full force and effect and no party thereto has denied or
disaffirmed any of its material obligations thereunder or has defaulted in the
due performance or observance of any material term, covenant or agreement on
its part to be performed or observed pursuant thereto.
SECTION 7. Affirmative Covenants. Each of the REIT and the
Borrower hereby covenants and agrees (as to itself and each of its
Subsidiaries) that on and after the Effective Date and until the Total
Commitment has terminated and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
7.01 Information Covenants. The REIT and/or the Borrower
will furnish to the Administrative Agent (with sufficient copies for each of
the Banks, and the Administrative Agent will promptly forward to each of the
Banks):
(a) Quarterly Financial Statements and Reports. (A) Within
45 days after the close of each of the first three quarterly
accounting periods in each fiscal year of the Borrower (i) the
consolidated balance sheet of each of the REIT and its Subsidiaries
and the Borrower and its Subsidiaries as at the end of such quarterly
accounting period, (ii) the related consolidated statements of income
for such quarterly accounting period and for the elapsed portion of
the fiscal year ended with the last day of such quarterly accounting
period and (iii) the related consolidated statements of cash flows for
the elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, in each case setting forth comparative
figures for the corresponding fiscal periods in the prior fiscal year,
as applicable, all of which shall be in reasonable detail and
certified by an Authorized Financial Officer of the Borrower that, to
the best of such officer's knowledge, they fairly present the
financial condition of each of the REIT and its Subsidiaries and the
Borrower and its Subsidiaries as of the dates indicated and the
results of their operations and changes in their cash flows for the
periods indicated, subject to normal year-end audit adjustments.
40
(B)(i)i) Within 45 days after the end of each of the first
three quarterly accounting periods, and within 90 days after the end
of the fourth quarterly accounting period, in each fiscal year of the
Borrower, certificates in the forms of (x) Exhibit M-1 (with such
changes thereto as are reasonably acceptable to the Administrative
Agent) for each Borrowing Base Property on an individual basis, and,
at any time that the Borrower or any of its Subsidiaries owns or
leases any non-Borrowing Base Properties, for all such Properties on a
combined basis, and (y) Exhibit M-2 (with such changes thereto as are
reasonably acceptable to the Administrative Agent) for each Borrowing
Base Pledged Mortgage Loan on an individual basis, and, at any time
that the Borrower or any of its Subsidiaries owns any non-Borrowing
Base Mortgage Loans, for all such Mortgage Loans on a combined basis,
in each case signed by an Authorized Financial Officer of the Borrower
setting forth the required financial and other information for such
quarterly accounting period as set forth in such Exhibits and for the
elapsed portion of the fiscal year ended with the last day of such
quarterly accounting period, and setting forth comparative figures for
the corresponding quarterly accounting period in the prior fiscal year
and the budgeted figures for such quarterly accounting period.
(ii) Within 45 days after the end of each of the first three
quarterly accounting periods, and within 90 days after the end of the
fourth quarterly accounting period, in each fiscal year of the
Borrower, a certificate in the form of Exhibit N (with such changes
thereto as are reasonably acceptable to the Administrative Agent) for
the Borrower and its Subsidiaries on a consolidated basis, in each
case signed by an Authorized Financial Officer of the Borrower setting
forth the required financial and other information for the elapsed
portion of the fiscal year ended with the last day of such quarterly
accounting period.
(b) Annual Financial Statements. Within 90 days after the
close of each fiscal year of the Borrower, the consolidated balance
sheet of each of the REIT and its Subsidiaries and the Borrower and
its Subsidiaries, as of the end of such fiscal year and the related
consolidated statements of income and shareholders' equity and of cash
flows for such fiscal year setting forth comparative figures for the
preceding fiscal year and certified by independent certified public
accountants of recognized national standing reasonably acceptable to
the Administrative Agent, together with a report of such accounting
firm stating that in the course of its regular audit of the financial
statements of each of the REIT and its Subsidiaries and the Borrower
and its Subsidiaries, which audit was conducted in accordance with
generally accepted auditing standards, such accounting firm obtained
no knowledge of any Default or Event of Default which has occurred and
is continuing under any of Sections 8.08 through 8.10, inclusive, or,
if in the opinion of such accounting firm such a Default or Event of
Default has occurred and is continuing, a statement as to the nature
thereof.
(c) Borrowing Base Certificate. (i) Within 45 days after the
close of each quarterly accounting period in each fiscal year of the
Borrower, a Borrowing Base Certificate, signed by an Authorized
Financial Officer of the Borrower, calculating (in reasonable detail)
the Borrowing Base as of the last day of such quarterly accounting
period, (ii) at the time of the delivery of any Notice of Borrowing or
41
Letter of Credit Request or any notice pursuant to Section 7.01(j), a
revised Borrowing Base Certificate signed by an Authorized Financial
Officer of the Borrower calculating (in reasonable detail) the
Borrowing Base as of the date of such Notice of Borrowing or Letter of
Credit Request (and after giving effect thereto) or such other notice
and (iii) on any Addition Date or Release Date, a revised Borrowing
Base Certificate signed by an Authorized Financial Officer of the
Borrower calculating (in reasonable detail) the Borrowing Base as of
such Addition Date or Release Date, as the case may be (in each case
after giving effect thereto).
(d) Budgets. No later than 30 days prior to the first day of
each fiscal year of the Borrower, budgets in form reasonably
satisfactory to the Administrative Agent (including, in any event,
budgeted statements of cash flow and Capital Expenditures and budgeted
debt and cash balances) for such fiscal year prepared in detail, with
respect to (x) the Borrower and its Subsidiaries, (y) each Borrowing
Base Property and (z) all the Borrowing Base Properties, in each case
accompanied by a statement of an Authorized Financial Officer of the
Borrower to the effect that, to the best of such officer's knowledge,
the budget is a reasonable estimate of the period covered thereby.
(e) Officer's Certificates. At the time of the delivery of
the financial statements provided for in Sections 7.01(a) and (b), a
certificate of an Authorized Financial Officer of the Borrower to the
effect that, to the best of such officer's knowledge, no Default or
Event of Default has occurred and is continuing or, if any Default or
Event of Default has occurred and is continuing, specifying the nature
and extent thereof, which certificate shall set forth the calculations
required to establish whether the REIT and its Subsidiaries were in
compliance with the provisions of Sections 8.03, 8.04, 8.05 and 8.07
through 8.10, inclusive, at the end of such fiscal quarter or year, as
the case may be.
(f) Notice of Default or Litigation. Promptly, and in any
event within three Business Days after the President, the Chief
Executive Officer, any Vice President or any Authorized Financial
Officer of the REIT or any of its Subsidiaries obtains knowledge
thereof, notice of (i) the occurrence of any event which constitutes a
Default or an Event of Default and (ii) any litigation or governmental
investigation or proceeding pending or threatened (x) against the REIT
or any of its Subsidiaries which could reasonably be expected to
materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects
of the REIT and its Subsidiaries taken as a whole, or the Borrower and
its Subsidiaries taken as a whole, (y) with respect to any material
Indebtedness of the REIT or any of its Subsidiaries or (z) with
respect to any Credit Document.
(g) Management Letters. Promptly after the receipt thereof
by any Credit Party, a copy of any "management letter" received by
such Credit Party from its certified public accountants and
management's responses thereto.
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(h) Other Reports and Filings. Promptly, and without
duplication of any documents or information delivered pursuant to
another clause of this Section 7.01, copies of all financial
information, proxy materials and other information and reports, if
any, which the REIT or any of its Subsidiaries shall file with the
Securities and Exchange Commission or any successor thereto (the
"SEC") (it being understood, however, that with respect to any
preliminary filings made with the SEC, the REIT need only deliver a
certificate describing such filing) and copies of all notices and
reports which the REIT or any of its Subsidiaries shall deliver to
holders of its material Indebtedness pursuant to the terms of the
documentation governing such Indebtedness (or any trustee, agent or
other representative therefor).
(i) Environmental Matters. Promptly upon, and in any event
within ten Business Days after the President, the Chief Executive
Officer, any Vice President or any Authorized Financial Officer of the
REIT or any of its Subsidiaries obtains knowledge thereof, notice of
one or more of the following environmental matters:
(i) any pending or threatened Environmental Claim
against the REIT or any of its Subsidiaries or any borrower
under a Mortgage Loan or any Real Property owned or operated
by the REIT or any of its Subsidiaries or any Mortgage Loan
Property;
(ii) any condition or occurrence on or arising from
any Real Property owned or operated by the REIT or any of
its Subsidiaries or any Mortgage Loan Property that (a)
results in non-compliance by the REIT or any of its
Subsidiaries or any borrower under a Mortgage Loan with any
applicable Environmental Law or (b) could reasonably be
expected to form the basis of an Environmental Claim against
the REIT or any of its Subsidiaries or any borrower under a
Mortgage Loan or any Real Property owned or operated by the
REIT or any of its Subsidiaries or any Mortgage Loan
Property;
(iii) any condition or occurrence on any Real
Property owned or operated by the REIT or any of its
Subsidiaries or any Mortgage Loan Property that could
reasonably be expected to cause such Real Property to be
subject to any restrictions on the ownership, occupancy, use
or transferability thereof under any Environmental Law; and
(iv) the taking of any removal or remedial action in
response to the actual or alleged presence of any Hazardous
Material on any Real Property owned or operated by the REIT
or any of its Subsidiaries or any Mortgage Loan Property as
required by any Environmental Law or any governmental or
other administrative agency.
All such notices shall describe in reasonable detail the nature of
the claim, investigation, condition, occurrence or removal or
remedial action and the response or proposed response thereto.
43
(j) Reduction of Borrowing Base Amounts. Promptly and in any
event within five Business Days after the President, the Chief
Executive Officer, any Vice President or any Authorized Financial
Officer of the REIT or any of its Subsidiaries obtains knowledge
thereof, notice of the occurrence or effectiveness of any event or
condition that has caused, or could reasonably be expected to cause,
the Borrowing Base Amount of any Borrowing Base Property or Borrowing
Base Pledged Mortgage Loan to be reduced by more than the lesser of
(x) $1,000,000 and (y) 5% of such Borrowing Base Amount, in each case
together with a certificate of an Authorized Financial Officer of the
Borrower setting forth (in reasonable detail) the nature of the
respective event and/or condition.
(k) Annual Meetings with Banks. At the request of the
Administrative Agent or the Required Banks, the Borrower shall, at
least once during each fiscal year of the Borrower, hold a meeting (at
a mutually agreeable location and time) with all of the Banks at which
meeting the financial results of the previous fiscal year and the
financial condition of the REIT and its Subsidiaries and the budgets
presented for the current fiscal year of the REIT and its Subsidiaries
shall be reviewed, with each Bank bearing its own travel, lodging,
food and other costs associated with attending any such meeting.
(l) Mortgage Loan Defaults. Promptly and in any event within
three Business Days after the President, the Chief Executive Officer,
any Vice President or any Authorized Financial Officer of the REIT or
any of its Subsidiaries obtains knowledge thereof, notice of the
occurrence of any default or event of default under and as defined or
described in any of the Pledged Mortgage Loan Documents.
(m) Borrowing Base Pledged Mortgage Loans. Promptly, and in
any event within five Business Days of receipt of any financial
information, including budgets, relating to any Mortgage Loan securing
a Borrowing Base Pledged Mortgage Loan, copies of such financial
information.
(n) Other Information. From time to time, such other
information or documents (financial or otherwise) with respect to the
REIT and/or any of its Subsidiaries as the Administrative Agent or any
Bank (through the Administrative Agent) may reasonably request.
7.02 Books, Records and Inspections. The REIT will, and will
cause each of its Subsidiaries to, keep proper books of record and account in
which full, true and correct entries in conformity with generally accepted
accounting principles and all requirements of law shall be made of all
dealings and transactions in relation to its business and activities. The REIT
will, and will cause each of its Subsidiaries to, permit officers and
designated representatives of the Administrative Agent or any Bank to visit
and inspect, upon reasonable advance notice, during regular business hours and
under guidance of officers of the REIT or such Subsidiary, any of the
properties of the REIT or any of its Subsidiaries, and to examine the books of
account of the REIT and any of its Subsidiaries and discuss the affairs,
finances and accounts of the REIT and any of its Subsidiaries with, and be
advised as to the same by, its and their respective Presidents, Chief
Executive Officers, Vice Presidents, Authorized Financial Officers and
44
independent accountants, all at such reasonable times and intervals and to
such reasonable extent as the Administrative Agent or any Bank may reasonably
request, provided that any Bank's rights under this Section 7.02 may not be
exercised more than once in any fiscal quarter of the Borrower.
7.03 Maintenance of Property; Insurance. (a) Schedule
VI sets forth a true and complete listing of all insurance maintained by, or
on behalf of, the REIT and its Subsidiaries as of the Effective Date. The REIT
will, and will cause each of its Subsidiaries and the Operating Lessees and
Managers to, (i) keep all property necessary in its business (including, in
any event, each Borrowing Base Property) in good working order and condition
and (ii) furnish to the Administrative Agent, upon written request,
information evidencing the insurance carried. In addition to the requirements
of the immediately preceding sentence, the REIT will, and will cause each of
its Subsidiaries and the Operating Lessees and Managers to, at all times cause
(I) insurance coverage to be issued by an insurer (x) authorized to issue such
insurance in all applicable jurisdictions and (y) having an "A-" or better
rating as established by A.M. Best Company and with a financial size rating of
VII or larger as established by A.M. Best Company (or another financial size
rating reasonably acceptable to the Administrative Agent considering market
conditions) and (II) insurance with at least the coverages set forth below to
be continuously maintained:
(i) Property insurance including coverage for business
interruption and/or rental income covering all Borrowing Base
Properties including, but not limited to, any alterations,
Improvements or additions thereto. All such insurance coverage shall
be written on the so-called "All Risk of Physical Loss" basis and
include the perils of fire, lightning, windstorm, sprinkler leakage,
hail, explosion, riot, riot attending a strike, civil commotion,
vandalism, malicious mischief, terrorist acts, aircraft, vehicle,
smoke, sinkhole (which in the case of a Borrowing Base Property
located in the State of California, is covered by earthquake
insurance) and collapse in an amount equal to at least 100% of the
full replacement cost of the respective property (other than in
respect of the foundation and excavation);
(ii) Boiler and machinery insurance covering all boilers,
boiler tanks, pressure vessels, auxiliary piping, heating and air
conditioning equipment and similar apparatus located in or about the
Borrowing Base Properties in such amounts as are generally carried by
risks of the nature of the respective property;
(iii) Flood insurance to the extent available under the
National Flood Insurance Program, against damage or loss by flood if
any Borrowing Base Property is located in an area now or in the future
designated "A" or "V" FIRM Zones as defined in the National Flood
Insurance Act of 1968, or the Flood Disaster Protection Act of 1973,
or the National Flood Insurance Reform Act of 1994 and any
modifications of such acts to the full amount available under such
acts or programs;
(iv) Earthquake insurance against the peril of earthquake
and earth movement if any Borrowing Base Property is located in
45
California or any other area at high risk of earthquake on such basis
and amounts as shall be reasonably determined by the Administrative
Agent;
(v) Liability insurance on a Comprehensive General Liability
Occurrence format in an amount of at least $1,000,000 combined bodily
injury and property damage per occurrence and $3,000,000 in the annual
aggregate amount per Borrowing Base Property. Such insurance coverage
shall protect both the REIT and its Subsidiaries and the Collateral
Agent against claims for bodily injury including death, property
damage, personal injury, advertising injury, contractual liability,
products and completed operations liability arising out of or
connected with the possession, use, operation, leasing, maintenance,
construction, alteration or renovation of each Borrowing Base
Property. If any of the coverages referred to in this clause (v) are
obtained under a so-called "blanket" policy with more than one
property covered, the policy shall contain a so-called "individual
aggregate per location or project" endorsement;
(vi) Umbrella or excess liability insurance on an occurrence
basis in the amount of at least $100,000,000 per occurrence covering
both the REIT and its Subsidiaries and the Collateral Agent against
claims for damages in excess of all primary liability policies;
(vii) Statutory workers' compensation insurance or a
qualified self insurer (to the extent the risks to be covered thereby
are not already covered by other policies of insurance maintained by,
or on behalf of, the REIT and its Subsidiaries), in statutory amounts
as required by law (including employer's liability insurance); and
(viii) Such other insurance against loss or damage of the
kinds from time to time customarily insured against and in such
amounts as are generally available and required by institutional
lenders for properties comparable to the respective Borrowing Base
Property.
With respect to insurance of the types described above in this Section 7.03(a)
for non-Borrowing Base Properties and Mortgage Loan Properties (including
Mortgage Loan Properties securing Borrowing Base Pledged Mortgage Loans), such
insurance shall be in at least such amounts and insure against at least such
risks as are consistent with industry practice for similarly situated
properties.
(b) The REIT and the Borrower will, and will cause each of
the Subsidiary Guarantors and/or each Operating Lessee or Manager to, at all
times keep the respective Borrowing Base Properties (and all equipment,
fixtures, improvements and other personalty relating thereto) insured in favor
of the Collateral Agent, and all policies or certificates with respect to such
insurance (and any other insurance maintained by, or on behalf of, the REIT,
the Borrower or any Subsidiary Guarantor) (i) shall name the Collateral Agent
as loss payee or as an additional insured, as its respective interest may
appear, (ii) shall state that such insurance policies shall not be canceled or
materially changed without at least 30 days' prior written notice thereof (or
at least 10 days' prior written notice thereof in the case of non-payment of
premium) by the respective insurer to the Collateral Agent, (iii) shall
46
provide that the respective insurers irrevocably waive any and all rights of
subrogation with respect to the Collateral Agent and the Secured Creditors,
(iv) shall contain the standard non-contributory mortgagee clause endorsement
in favor of the Collateral Agent with respect to hazard insurance coverage,
(v) shall, with respect to first party property insurance and business
interruption insurance, provide that any losses shall be payable to the
Collateral Agent notwithstanding (A) any act or neglect of the REIT, the
Borrower, any Subsidiary Guarantor or any Operating Lessee or Manager, (B) the
occupation or use of the properties for purposes more hazardous than those
permitted by the terms of the respective policy if such coverage is obtainable
at commercially reasonable rates and is of the kind from time to time
customarily insured against by Persons owning or using similar property and in
such amounts as are customary, (C) any foreclosure or other proceeding
relating to the insured properties or (D) any change in the title to or
ownership or possession of the insured properties and (vi) shall be deposited
with the Collateral Agent.
(c) If the REIT, the Borrower, any of the Subsidiary
Guarantors or any Operating Lessee or Manager shall fail to maintain all
insurance in accordance with this Section 7.03, or if the REIT, the Borrower,
any of the Subsidiary Guarantors or any Operating Lessee or Manager shall fail
to so name the Collateral Agent as an additional insured or as a loss payee or
so deposit all certificates with respect thereto, the Administrative Agent
and/or the Collateral Agent shall have the right (but shall be under no
obligation), upon at least 10 days' notice to the Borrower, to procure such
insurance, and the REIT and the Borrower agree to reimburse the Administrative
Agent or the Collateral Agent, as the case may be, for all costs and expenses
of procuring such insurance.
7.04 Corporate Franchises. The REIT will, and will cause
each of its Subsidiaries to, do or cause to be done, all things necessary to
preserve and keep in full force and effect its existence and its material
rights, franchises, licenses and patents; provided, however, that nothing in
this Section 7.04 shall prevent (i) any of the transactions permitted in
accordance with Section 8.02 or (ii) the withdrawal by the REIT or any of its
Subsidiaries of its qualification as a foreign corporation, partnership or
limited liability company, as the case may be, in any jurisdiction where such
withdrawal could not reasonably be expected to have a material adverse effect
on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the REIT, the REIT and its
Subsidiaries taken as a whole, the Borrower or the Borrower and its
Subsidiaries taken as a whole.
7.05 Compliance with Statutes, etc. The REIT will, and will
cause each of its Subsidiaries and each Operating Lessee and each Manager to,
comply with all applicable statutes, regulations and orders of, and all
applicable restrictions imposed by, all governmental bodies, domestic or
foreign, in respect of the conduct of its business and the ownership of its
property, including, without limitation, any requirements of any federal,
state or local department of health, except such noncompliances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the REIT, the REIT and its
Subsidiaries taken as a whole, the Borrower or the Borrower and its
Subsidiaries taken as a whole. The REIT will, and will cause each of its
Subsidiaries and each Operating Lessee and each Manager to, (x) maintain in
good standing all licenses, certifications, accreditations and other approvals
applicable to it or to any Property which it owns, leases, manages or operates
47
and (y) maintain a standard of care for the patients or residents of each such
Property at all times at the level necessary to ensure quality care for such
patients or residents.
7.06 Compliance with Environmental Laws. (a) The REIT
will comply, and will cause each of its Subsidiaries and each Operating Lessee
and each Manager to comply, with all Environmental Laws applicable to the
ownership or use of its Real Property now or hereafter owned or operated by
the REIT or any of its Subsidiaries, except such noncompliances as could not,
individually or in the aggregate, reasonably be expected to have a material
adverse effect on the business, operations, property, assets, liabilities,
condition (financial or otherwise) or prospects of the REIT, the REIT and its
Subsidiaries taken as a whole, the Borrower or the Borrower and its
Subsidiaries taken as a whole, and will promptly pay or cause to be paid all
costs and expenses incurred in connection with such compliance, and will keep
or cause to be kept all such Real Property free and clear of any Liens imposed
pursuant to such Environmental Laws.
(b) At the written request of the Administrative Agent or
the Required Banks, which request shall specify in reasonable detail the basis
therefor, at any time and from time to time after (i) the Obligations have
been declared due and payable pursuant to Section 9, (ii) the Administrative
Agent receives notice under Section 7.01(i) of any event for which notice is
required to be delivered for any Real Property or (iii) the REIT or any of its
Subsidiaries are not in compliance with Section 7.06(a) with respect to any
Real Property, the REIT and the Borrower will provide, at their sole cost and
expense, an environmental site assessment report concerning any such Real
Property now or hereafter owned or operated by the REIT or any of its
Subsidiaries, prepared by an environmental consulting firm reasonably approved
by the Administrative Agent, indicating the presence or absence of Hazardous
Materials and the potential cost of any removal or remedial action in
connection with any Hazardous Materials on such Real Property. If the REIT or
the Borrower fails to provide the same within 90 days after such request was
made, the Administrative Agent may order the same, and the REIT and the
Borrower shall grant and hereby grant to the Administrative Agent and the
Banks and their agents access to such Real Property and specifically grant the
Administrative Agent and the Banks an irrevocable non-exclusive license,
subject to the rights of tenants, to undertake such an assessment, all at the
Borrower's expense.
7.07 ERISA. Except to the extent that a different reporting
obligation is set forth elsewhere in this Agreement in connection with the
events described in this Section 7.07, within 15 Business Days after the REIT,
any Subsidiary of the REIT or any ERISA Affiliate knows or has reason to know
of the occurrence of any of the following events, the REIT will deliver to the
Administrative Agent a certificate of an Authorized Financial Officer of the
REIT setting forth the material details as to such occurrence and the action,
if any, that the REIT, such Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given
to or filed with or by the REIT, the Borrower, such Subsidiary, such ERISA
Affiliate, the PBGC, a Plan participant or the Plan administrator with respect
thereto: (i) except as would not be material, that a Reportable Event has
occurred (except to the extent that the REIT has previously delivered to the
Administrative Agent a certificate and notices (if any) concerning such event
pursuant to the next clause hereof); (ii) that a contributing sponsor (as
48
defined in Section 4001(a)(13) of ERISA) of a Plan subject to Title IV of
ERISA is subject to the advance reporting requirement of PBGC Regulation
Section 4043.61 (without regard to subparagraph (b)(1) thereof), and a
material event described in subsection .62,.63,.64,.65,.66,.67 or .68 of PBGC
Regulation Section 4043 is reasonably expected to occur with respect to such
Plan within the following 30 days, provided, however, that with respect to the
obligation to report under this clause 7.07(ii), the REIT is not required to
report to the Administrative Agent earlier than the REIT, Subsidiary or ERISA
Affiliate is required to report to the PBGC; (iii) that an accumulated funding
deficiency, within the meaning of Section 412 of the Code or Section 302 of
ERISA, has been incurred or an application may reasonably be expected to be or
has been made to the Secretary of the Treasury for a waiver or modification of
the minimum funding standard (including any required installment payments) or
an extension of any amortization period under Section 412 of the Code or
Section 303 or 304 of ERISA with respect to a Single Employer Plan; (iv)
except as would not be material, that any contribution required to be made by
the REIT, any Subsidiary of the REIT or any ERISA Affiliate to a Plan has not
been timely made; (v) that a Plan or, to the best knowledge of the REIT or the
Borrower, Multiemployer Plan has been or may reasonably be expected to be
terminated, reorganized, partitioned or declared insolvent under Title IV of
ERISA; (vi) except as would not be material, that a Plan has an Unfunded
Current Liability; (vii) that proceedings may reasonably be expected to be or
have been instituted by the PBGC to terminate or appoint a trustee to
administer a Plan or to the best knowledge of the REIT or the Borrower, a
Multiemployer Plan; (viii) except as would not be material, that a proceeding
has been instituted against the REIT, the Borrower, any Subsidiary of the REIT
or the Borrower or any ERISA Affiliate pursuant to Section 515 of ERISA to
collect a delinquent contribution to a Plan; (ix) that the REIT, any
Subsidiary of the REIT or any ERISA Affiliate will or will reasonably be
expected to incur or has incurred any material liability (including any
indirect, contingent, or secondary liability) to or on account of the
termination of or withdrawal from a Plan or Multiemployer Plan under Section
4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA, or with respect to a Plan
or Multiemployer Plan under Section 401(a)(29), 4971, 4975 or 4980 of the Code
or Section 409 or 502(i) or 502(l) of ERISA, or with respect to a group health
plan (as defined in Section 607(1) of ERISA or Section 4980B(g)(2) of the Code
under Section 4980B of the Code; or (x) that the REIT, the Borrower, or any
Subsidiary of the REIT or the Borrower may incur any material liability
pursuant to any employee welfare benefit plan (as defined in Section 3(1) of
ERISA) that provides benefits to retired employees or other former employees
(other than as required by Section 601 of ERISA) or any employee pension
benefit plan (as defined in Section 3(2) of ERISA) of the REIT or any of its
Subsidiaries that is not tax-qualified under Section 401(a) of the Code. The
REIT will deliver to the Administrative Agent (with sufficient copies for each
Bank) (i) a complete copy of the annual report (Form 5500) of each Single
Employer Plan (including, to the extent required, the related financial and
actuarial statements and opinions and other supporting statements,
certifications, schedules and information) required to be filed by the REIT or
any of its Subsidiaries with the Internal Revenue Service and (ii) copies of
any records, documents or other information that must be furnished to the PBGC
with respect to any Plan pursuant to Section 4010 of ERISA. In addition to any
certificates or notices delivered to the Administrative Agent pursuant to the
first sentence hereof, copies of annual reports and any material notices
received by the REIT, the Borrower, any Subsidiary of the REIT or the Borrower
49
or any ERISA Affiliate with respect to any Plan or Multiemployer Plan shall be
delivered to the Administrative Agent (with sufficient copies for each Bank)
no later than 15 Business Days after the date such report has been filed with
the Internal Revenue Service or such notice has been received by the REIT, the
Borrower, such Subsidiary or such ERISA Affiliate, as applicable.
7.08 End of Fiscal Years; Fiscal Quarters. The REIT and the
Borrower will cause (i) the fiscal year of each Credit Party to end on
December 31 and (ii) the fiscal quarter of each Credit Party to end on March
31, June 30, September 30 and December 31.
7.09 Performance of Obligations. The REIT will, and will
cause each of its Subsidiaries to, perform all of its obligations under the
terms of each Operating Lease, Management Agreement, Pledged Mortgage Loan
Document, ground lease, mortgage, deed of trust, indenture, loan agreement or
credit agreement and each other material agreement, contract or instrument by
which it or any Real Property owned or leased by the REIT or any of its
Subsidiaries is bound, except such non-performances as could not, individually
or in the aggregate, reasonably be expected to have a material adverse effect
on the business, operations, property, assets, liabilities, condition
(financial or otherwise) or prospects of the REIT, the REIT and its
Subsidiaries taken as a whole, the Borrower or the Borrower and its
Subsidiaries taken as a whole.
7.10 Payment of Taxes. The REIT will, and will cause each of
its Subsidiaries to, pay and discharge all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits, or upon any
properties belonging to it, prior to the date on which any penalties attach
thereto, and all lawful claims for sums that have become due and payable
which, if unpaid, might become a lien or charge upon any properties of the
REIT or any such Subsidiary; provided that neither the REIT nor any such
Subsidiary shall be required to pay any such tax, assessment, charge, levy or
claim which is being contested in good faith and by proper proceedings as long
as it maintains adequate reserves with respect thereto in accordance with
generally accepted accounting principles.
7.11 Certain Requirements with Respect to Acquisitions of
Borrowing Base Properties and Provision or Purchase of Borrowing Base Pledged
Mortgage Loans. Unless the Required Banks otherwise agree in writing with
respect to any Borrowing Base Property acquired after the Effective Date or
any Borrowing Base Pledged Mortgage Loan provided or purchased after the
Effective Date, prior to or, if specified below, concurrently with the
Addition Date for any (x) Property which shall constitute a Borrowing Base
Property or (y) Mortgage Loan which shall constitute a Borrowing Base Pledged
Mortgage Loan, and in any event within the time periods specified below, the
Borrower shall furnish to the Administrative Agent (with sufficient copies for
each of the Banks, which the Administrative Agent will promptly forward to
each of the Banks):
(i) at least 15 days prior to the Addition Date for such
Borrowing Base Property or such Borrowing Base Pledged Mortgage Loan,
an Information Package relating to such Borrowing Base Property or
such Borrowing Base Pledged Mortgage Loan, together with an Appraisal
dated not more than 90 days prior to the Addition Date of such
50
Borrowing Base Property or the Mortgage Loan Property securing such
Borrowing Base Pledged Mortgage Loan, as applicable;
(ii) on the Addition Date for such Borrowing Base Property
or Borrowing Base Pledged Mortgage Loan, (x) with respect to a Borrowing Base
Property, fully executed counterparts of a Mortgage, in form and substance
satisfactory to the Administrative Agent, encumbering such Borrowing Base
Property and securing the full amount of the Total Commitment (or, after the
termination thereof, all outstanding Loans and Letter of Credit Outstandings
at such time) (provided, that in any jurisdiction in which there is a mortgage
recording tax, such Mortgage shall secure the Loans and Letter of Credit
Outstandings in an amount equal to 125% of the Appraised Value of such
Borrowing Base Property), together with evidence that counterparts of such
Mortgage have been delivered to the title insurance company insuring the Lien
thereof on such Borrowing Base Property for recording in all places to the
extent necessary to effectively create a valid and enforceable first priority
mortgage lien on such Borrowing Base Property in favor of the Collateral Agent
(or such other trustee as may be required or desired under local law) for the
benefit of the Secured Creditors, or (y) with respect to a Borrowing Base
Pledged Mortgage Loan, fully executed counterparts of a Collateral Assignment,
in form and substance satisfactory to the Administrative Agent, encumbering
such Borrowing Base Pledged Mortgage Loan and securing the full amount of the
Total Commitment (or, after termination thereof, all outstanding Loans and
Letter of Credit Outstandings at such time) (provided, that in any
jurisdiction in which there is a recording tax imposed on the Collateral
Assignment, such Collateral Assignment shall secure the Loans and Letter of
Credit Outstandings in an amount equal to at least the original principal
amount of such Borrowing Base Pledged Mortgage Loan), together with evidence
that counterparts of such Collateral Assignment have been delivered to the
title insurance company insuring the Lien of the related Pledged Mortgage Loan
Documents for recording in all places to the extent necessary to effectively
create a valid and enforceable first priority lien on such Borrowing Base
Pledged Mortgage Loan in favor of the Collateral Agent (or such other trustee
as may be required or desired under local law) for the benefit of the Secured
Creditors;
(iii) on the Addition Date for (x) such Borrowing Base
Property, a Mortgage Policy on such Borrowing Base Property issued by title
insurers (and with such endorsements, reinsurance and co-insurance as is)
satisfactory to the Administrative Agent, in amounts satisfactory to the
Administrative Agent, insuring to the Collateral Agent that the Mortgage on
such Borrowing Base Property is a valid and enforceable first priority
mortgage lien on such Borrowing Base Property, free and clear of all defects
and encumbrances except Permitted Encumbrances and such Mortgage Policy shall
otherwise be in form and substance satisfactory to the Administrative Agent,
or (y) any such Borrowing Base Pledged Mortgage Loan, an endorsement to the
mortgagee title insurance policy covering such Borrowing Base Pledged Mortgage
Loan, in form and substance satisfactory to the Administrative Agent, showing
the Collateral Agent as first priority collateral assignee of such Borrowing
Base Pledged Mortgage Loan and an additional insured under such policy (as its
interests may appear);
51
(iv) on the Addition Date for such Borrowing Base Property
or Borrowing Base Pledged Mortgage Loan, a recent survey of such Borrowing
Base Property or the Mortgage Loan Property securing such Borrowing Base
Pledged Mortgage Loan, as applicable, certified by a licensed professional
surveyor, which survey, certification and surveyor shall be satisfactory to
the Administrative Agent;
(v) in the case of any Borrowing Base Property that is a
Leasehold or any Mortgage Loan Property securing a Borrowing Base Pledged
Mortgage Loan that is a Leasehold, at least 15 days prior to the Addition Date
for such Borrowing Base Property or Borrowing Base Pledged Mortgage Loan, as
the case may be, a true and correct copy of such ground lease, which shall be
satisfactory to the Administrative Agent, and on the Addition Date for such
Borrowing Base Property or Borrowing Pledged Mortgage Loan, an estoppel
certificate and, to the extent required by the Administrative Agent, a
landlord waiver, in each case from the fee owner/ground lessor, which ground
lease, estoppel certificate and landlord waiver shall be in form and substance
satisfactory to the Administrative Agent;
(vi) at least 15 days prior to the Addition Date for such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan (other than a
construction loan), a certificate of occupancy (together with such other proof
of compliance with Legal Requirements as the Administrative Agent shall
reasonably require) in form and substance satisfactory to the Administrative
Agent with respect to such Borrowing Base Property or the Mortgage Loan
Property securing such Borrowing Base Pledged Mortgage Loan, as applicable;
(vii) at least 15 days prior to the Addition Date for such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan, Phase I (and
to the extent reasonably determined to be necessary by the Administrative
Agent, Phase II) environmental assessments dated no more than ninety days
prior to the Addition Date on such Borrowing Base Property or the Mortgage
Loan Property securing such Borrowing Base Pledged Mortgage Loan, as
applicable, from an independent environmental firm, certified to and in form,
scope and substance satisfactory to the Administrative Agent (each, an
"Environmental Report");
(viii) at least 15 days prior to the Addition Date for such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan (other than a
construction loan), engineering reports dated no more than ninety days prior
to the Addition Date on such Borrowing Base Property or the Mortgage Loan
Property securing such Borrowing Base Pledged Mortgage Loan, as applicable,
prepared by an independent engineering firm, certified to and in form, scope
and substance satisfactory to the Administrative Agent (each, an "Engineering
Report");
(ix) at least 15 days prior to the Addition Date for such
Borrowing Base Property, (A) if such Borrowing Base Property is not a medical
52
office building, a true and correct copy of the Operating Lease for such
Borrowing Base Property and (B) the Management Agreement, if any, for such
Borrowing Base Property, which Operating Lease and/or Management Agreement
shall be in form and substance satisfactory to the Administrative Agent (it
being understood and agreed by the parties hereto that each Borrowing Base
Property that is not a medical office building shall be leased to an Operating
Lessee pursuant to an Operating Lease);
(x) in the case of a Borrowing Base Pledged Mortgage Loan,
(A) at least 15 days prior to the Addition Date for such Borrowing Base
Pledged Mortgage Loan, copies of the Pledged Mortgage Loan Documents relating
thereto, which shall be satisfactory to the Administrative Agent, and (B) on
the Addition Date for such Borrowing Base Pledged Mortgage Loan, the original
Pledged Mortgage Loan Documents, including, without limitation, the mortgage
note evidencing such Borrowing Base Pledged Mortgage Loan duly endorsed in
blank;
(xi) on the Addition Date for such Borrowing Base Property
or Borrowing Base Pledged Mortgage Loan, an opinion of local counsel
reasonably satisfactory to the Administrative Agent, which shall cover the
enforceability and perfection of the security interests granted pursuant to
the related Mortgage or Collateral Assignment, as applicable, and such other
matters incident to the transactions contemplated thereby as the
Administrative Agent may reasonably request;
(xii) on the Addition Date for such Borrowing Base Property
or Borrowing Base Pledged Mortgage Loan, true and correct copies of all
material contracts, licenses and permits for such Borrowing Base Property or
for the Mortgage Loan Property securing such Borrowing Base Pledged Mortgage
Loan, as applicable;
(xiii) on the Addition Date (A) with respect to a Borrowing
Base Property, a certificate of an Authorized Officer of the Borrower
certifying (x) the cost to acquire the respective Borrowing Base Property, (y)
the purchase of related working capital in connection with the acquisition of
such Borrowing Base Property, and (z) the amount expected to be used to pay
fees and expenses in connection with the acquisition of such Borrowing Base
Property, and (B) with respect to a Borrowing Base Pledged Mortgage Loan, a
certificate of an Authorized Officer of the Borrower certifying (w) the
identity of the borrower under and the guarantor of such Borrowing Base
Pledged Mortgage Loan, (x) the original principal balance and, if different,
the maximum principal balance of such Borrowing Base Pledged Mortgage Loan,
(y) the maturity date, the interest rate and amortization schedule, if any,
applicable to such Borrowing Base Pledged Mortgage Loan and (z) the amount
expected to be used to pay fees and expenses in connection with the provision
or purchase of such Borrowing Base Pledged Mortgage Loan;
(xiv) with respect to a Borrowing Base Property or a
Mortgage Loan Property securing a Borrowing Base Pledged Mortgage Loan that,
in either case, is a medical office building or otherwise contains space
tenants, not less than 15 days prior to the Addition Date for such Borrowing
Base Property or Borrowing Base Pledged Mortgage Loan, a rent roll for such
Borrowing Base Property or the Mortgage Loan Property securing such Borrowing
Base Pledged Mortgage Loan, as applicable, certified by an Authorized Officer
of the Borrower to be true, complete and correct, together with true and
correct copies of all leases or other occupancy agreements listed thereon,
which rent roll and leases shall be satisfactory to the Administrative Agent;
53
(xv) either (1) evidence reasonably satisfactory to the
Administrative Agent (which may be included as part of the survey delivered
pursuant to clause (iv) of this Section 7.11) indicating that such Borrowing
Base Property or the Mortgage Loan Property securing such Borrowing Base
Pledged Mortgage Loan is not located in an area identified as a special flood
hazard area by the Federal Emergency Management Agency or other applicable
agency, or (2) if any such Borrowing Base Property or the Mortgage Loan
Property securing such Borrowing Base Pledged Mortgage Loan is located in an
area identified as a special flood hazard area by the Federal Emergency
Management Agency or other applicable agency, then a copy of the certificate
of insurance evidencing the underlying flood insurance policy, which
underlying policy shall be in accordance with Section 7.03 and in accordance
with the National Flood Insurance Act of 1968, as amended;
(xvi) a certificate of insurance evidencing that there has
been obtained insurance coverage for such Borrowing Base Property or the
Mortgage Loan Property securing such Borrowing Base Pledged Mortgage Loan
which satisfies the requirements of Section 7.03 and all of such coverage is
in full force and effect;
(xvii) in the case of any Borrowing Base Property that is
not wholly-owned by the Borrower or by any wholly-owned Subsidiary of the
Borrower, a consent, in form and substance satisfactory to the Administrative
Agent, from each of the minority owners of such Borrowing Base Property (or in
the Subsidiary of the Borrower that owns such Borrowing Base Property)
consenting to the granting of a Mortgage on such Borrowing Base Property and
in the related personal property and, to the extent that such Borrowing Base
Property is owned by a Subsidiary of the Borrower, to the entering into by
such Subsidiary of the Security Agreement, the Pledge Agreement, the Pledge
and Security Agreement, the Subsidiaries Guaranty and any documents related to
the foregoing;
(xviii) not less than 15 days prior to the Addition Date for
any Borrowing Base Pledged Mortgage Loan that is a construction loan, (i) all
construction budgets, plans and specifications, construction contracts,
As-Built Appraisals, Pro forma cash flows, architects agreements, construction
management agreements and other material construction-related documents and
materials relating thereto as the Administrative Agent or any Bank (through
the Administrative Agent) may reasonably request, all of which materials shall
be satisfactory to the Administrative Agent and (ii) evidence satisfactory to
the Administrative Agent that a construction consultant satisfactory to the
Administrative Agent has been engaged by the Borrower to manage the
construction of the related Mortgage Loan Property through completion thereof;
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(xix) not less than 15 days prior to the Addition Date for
such Borrowing Base Pledged Mortgage Loan, an estoppel certificate
from the borrower under such Borrowing Base Pledged Mortgage Loan (i)
identifying each of the related Pledged Mortgage Loan Documents and
any amendments thereto, and stating that such Pledged Mortgage Loan
Documents have not been modified or amended, (ii) stating that the
Pledged Mortgage Loan Documents are in full force and effect in
accordance with their terms, and that no default exists thereunder,
(iii) setting forth the outstanding principal balance of such
Borrowing Base Pledged Mortgage Loan and the date through which
interest has been paid thereon, and (iv) addressing such other matters
with respect to such Borrowing Base Pledged Mortgage Loan as the
Administrative Agent may reasonably request;
(xx) not less than 15 days prior to the Addition Date for
such Borrowing Base Property or Borrowing Base Pledged Mortgage Loan,
all of such other documents, instruments and information relating
thereto as the Administrative Agent or any Bank (acting through the
Administrative Agent) may reasonably request in order to complete its
credit underwriting and due diligence review of such Borrowing Base
Property or Borrowing Base Pledged Mortgage Loan to its satisfaction
in its sole discretion, all of which documents, instruments and
information shall be satisfactory to the Administrative Agent and the
Banks;
(xxi) on the Addition Date for such Borrowing Base Property
or Borrowing Base Pledged Mortgage Loan, (A) a certificate of an
Authorized Officer of the Borrower certifying that, as of the Addition
Date and after giving effect to (x) the acquisition of such Borrowing
Base Property or the provision or purchase of such Borrowing Base
Pledged Mortgage Loan, as applicable, (y) the inclusion of such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan in the
Borrowing Base and (z) the incurrence of Loans or the issuance of
Letters of Credit, if any, on the Addition Date, the representations
and warranties of the REIT and its Subsidiaries set forth in Section 6
and elsewhere in the Credit Documents are true, complete and correct
in all material respects, and (B) a Borrowing Base Certificate from an
Authorized Financial Officer of the Borrower certifying that, as of
the Addition Date and after giving effect to (x) the acquisition of
such Borrowing Base Property or the provision or purchase of such
Borrowing Base Pledged Mortgage Loan, as applicable, (y) the inclusion
of such Borrowing Base Property or Borrowing Base Pledged Mortgage
Loan in the Borrowing Base and (z) the incurrence of Loans or the
issuance of Letters of Credit, if any, on the Addition Date, the total
outstanding principal amount of all Loans and Letter of Credit
Outstandings will not exceed the Borrowing Base then in effect; and
(xxii) the Required Banks and the Administrative Agent shall
have approved the inclusion of such Borrowing Base Property or
Borrowing Base Pledged Mortgage Loan in the Borrowing Base.
7.12 Certain Partnerships. The REIT and the Borrower will
ensure that at all times either the Borrower or a wholly-owned Subsidiary of
the Borrower that is a Subsidiary Guarantor is the sole general partner of any
Subsidiary Guarantor that is a partnership.
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7.13 Operating Leases; Management Agreements and Pledged
Mortgage Loan Documents. The REIT will take, and will cause each of its
Subsidiaries to take, all action necessary to ensure that all Operating
Leases, Management Agreements and Pledged Mortgage Loan Documents remain in
full force and effect in accordance with their terms. The REIT will not, and
will cause each of its Subsidiaries not to, suffer or permit any modification,
amendment or termination of any Operating Lease, Management Agreement or
Pledged Mortgage Loan Document without obtaining the prior consent of the
Administrative Agent (which consent will not be unreasonably withheld or
delayed), except in the case of a termination of an Operating Lease or a
Management Agreement in accordance with its terms following a default by the
Operating Lessee or Manager thereunder. In the event of a termination of an
Operating Lease or a Management Agreement in accordance with the preceding
sentence, the REIT will take, and will cause each of its Subsidiaries to take,
all action necessary to obtain, prior to the effective date of such
termination, a replacement Operating Lessee or Manager, as the case may be,
satisfactory to the Administrative Agent, who shall be engaged pursuant to an
Operating Lease or Management Agreement, as the case may be, satisfactory to
the Administrative Agent. The REIT will, and will cause each of its
Subsidiaries to, enforce all material terms and provisions of the Operating
Leases, the Management Agreements and the Pledged Mortgage Loan Documents. Any
breach by the REIT or any of its Subsidiaries of the provisions of this
Section 7.13 constitutes a Special Mandatory Repayment Event.
7.14 Lien Waivers; etc. Within 60 days after the making of
any Loan or the issuance of any Letter of Credit the proceeds of which were
used to pay contractors for renovations or improvements theretofore made on
any Borrowing Base Property, the Borrower shall deliver to the Administrative
Agent (x) lien waivers in form and substance reasonably satisfactory to the
Administrative Agent from the contractor or contractors that have made such
renovations or improvements and (y) at the reasonable request of the
Administrative Agent, an endorsement to such Mortgage Policy insuring that the
priority of the Mortgage on such Borrowing Base Property is not affected by
such renovations or improvements.
7.15 Appraisals. If the Administrative Agent or the Required
Banks shall advise the Borrower by written notice that the Administrative
Agent or the Required Banks reasonably believe that the value of one or more
Borrowing Base Properties or Mortgage Loan Properties securing Borrowing Base
Pledged Mortgage Loans has been materially and adversely affected, for any
reason, since the date of the most recent Appraisal thereof, promptly
thereafter the Borrower will cause the preparation and delivery to the
Administrative Agent of a new Appraisal of each such Borrowing Base Property
or Mortgage Loan Property dated not more than 30 days prior to the date of
such delivery.
7.16 Casualty and Condemnation; Restoration. (a) Upon
the occurrence of any Casualty Event affecting all or any portion of any
Borrowing Base Property, whether or not covered by insurance, which will cost
(or may reasonably be expected to cost) 25% or more of the Borrowing Base
Amount for such Borrowing Base Property to Restore, as reasonably determined
by the Borrower and so certified by an Authorized Officer of the Borrower in a
certificate delivered to the Administrative Agent, (i) the Borrower shall
promptly deliver to the Administrative Agent written notice of the same which
shall, among other things, describe such Casualty Event, and (ii) to the
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extent that the respective Credit Party elects to Restore such Borrowing Base
Property, as soon as practicable but in any event prior to the commencement of
Restoration of such Borrowing Base Property, the Borrower shall deliver to the
Administrative Agent a Notice of Renovation/Restoration in the form of Exhibit
S.
(b) The Administrative Agent, on behalf of the Secured
Creditors, is hereby authorized, at its option, to collect and receive all
Insurance Proceeds in respect of a Borrowing Base Property (other than
Insurance Proceeds attributable to workers' compensation and liability
insurance) and to give proper receipts and acquittances therefor; provided,
however, that (x) if no Event of Default shall have occurred and be
continuing, the Borrower shall have the right to direct the Administrative
Agent to apply Insurance Proceeds in accordance with Sections 7.16(e) and (f)
and (y) if no Event of Default shall have occurred and be continuing, to the
extent not inconsistent with the requirements of Sections 7.16 (e) and (f),
the Borrower shall have the right to direct the Administrative Agent (1) to
pay to the Borrower or the other applicable Credit Party all Insurance
Proceeds with respect to any Casualty Event affecting a Borrowing Base
Property which will cost (or may reasonably be expected to cost) less than 25%
of the Borrowing Base Amount for such Borrowing Base Property to Restore and
(2) to pay to the Borrower or the other applicable Credit Party all proceeds
of any related business interruption insurance as, and to the extent,
requested by the Borrower. If, prior to the receipt by the Administrative
Agent of such Insurance Proceeds, any Borrowing Base Property shall have been
transferred upon foreclosure of the applicable Mortgage (or by deed in lieu
thereof) or other Security Document, the Administrative Agent shall have the
right to receive such Insurance Proceeds to the extent (x) such Insurance
Proceeds are attributable to a Casualty Event occurring prior to foreclosure
or delivery of any deed in lieu thereof and (y) of any deficiency attributable
to such Borrowing Base Property found to be due upon such sale, with legal
interest thereon, and reasonable counsel fees, costs and disbursements
incurred by the Administrative Agent in connection with the collection of such
Insurance Proceeds. The Administrative Agent may, but shall not be obligated
to, make proof of loss if not made promptly by the applicable Credit Party.
During the continuance of any Event of Default, the Administrative Agent is
hereby authorized and empowered by the Borrower and each other Credit Party to
settle, adjust or compromise any claims for damage, destruction or loss
thereunder in good faith, with or without the consent of any Credit Party (and
each of the Borrower and each other Credit Party hereby irrevocably appoints
and constitutes the Administrative Agent as its lawful attorney-in-fact,
coupled with an interest and with full power of substitution, for the purpose
of settling, adjusting or compromising any such claims with respect to any
Borrowing Base Property). In no event shall any Credit Party settle, adjust or
compromise any claim for Insurance Proceeds in respect of any Borrowing Base
Property of 25% or more of the Borrowing Base Amount for such Borrowing Base
Property without the prior written consent of the Administrative Agent, which
shall not be unreasonably withheld, conditioned or delayed; provided, that
this provision shall not restrict the right of the lessor under any ground
lease applicable to such Borrowing Base Property (1) to settle, adjust or
compromise any claim for Insurance Proceeds to the extent such lessor is
granted the power to do so under such ground lease or (2) to approve any
settlement, adjustment or compromise of any claim for Insurance Proceeds to
the extent the approval of such lessor is required under such ground lease.
Subject to the requirements of any ground lease affecting any Borrowing Base
57
Property, each insurance company concerned is hereby authorized and directed
to make payment of all Insurance Proceeds in respect of each of the Borrowing
Base Properties payable by it directly to the Administrative Agent. If any
Credit Party receives any Insurance Proceeds resulting from such Casualty
Event in respect of any Borrowing Base Property, such Credit Party shall
(subject to the requirements of any ground lease affecting such Borrowing Base
Property) promptly endorse and transfer such Insurance Proceeds to the
Administrative Agent and each Credit Party covenants that until so paid over
to the Administrative Agent, such Credit Party shall hold such Insurance
Proceeds in trust for the benefit of the Administrative Agent and shall not
commingle such Insurance Proceeds with any other funds or assets of such
Credit Party or any other Person.
(c) The Borrower will promptly deliver written notice to the
Administrative Agent upon obtaining knowledge of the institution, or the
proposed institution, of any bona fide action or proceeding for the Taking of
all or any portion of any Borrowing Base Property. The Administrative Agent
shall have the right to participate in any negotiation, action or proceeding
relating to any such action or proceeding affecting any Borrowing Base
Property, and no settlement or compromise of any claim of 25% or more of the
Borrowing Base Amount for such Borrowing Base Property in connection with any
such action or proceeding shall be made without the consent of the
Administrative Agent, which consent shall not be unreasonably withheld,
conditioned or delayed; provided, that this provision shall not restrict the
right of the lessor under any ground lease applicable to such Borrowing Base
Property (1) to settle or compromise any such claim to the extent such lessor
is granted the power to do so under such ground lease or (2) to approve any
settlement or compromise of any such claim to the extent the approval of such
lessor is required under such ground lease. Upon the occurrence of any partial
Taking with respect to a Borrowing Base Property which will cost (or may
reasonably be expected to cost) 25% or more of the Borrowing Base Amount for
such Borrowing Base Property to Restore, as reasonably determined by the
Borrower and so certified by an Authorized Officer of the Borrower in a
certificate delivered to the Administrative Agent, as soon as practicable
thereafter but in any event prior to the commencement of any Restoration of
such Borrowing Base Property, the Borrower shall deliver to the Administrative
Agent a Notice of Renovation/Restoration in the form attached hereto as
Exhibit S.
(d) The Administrative Agent, on behalf of the Secured
Creditors, is hereby authorized, at its option, to collect and receive all
Condemnation Proceeds in respect of each of the Borrowing Base Properties and
to give proper receipts and acquittances therefor; provided that, (x) if no
Event of Default shall have occurred and be continuing, the Borrower shall
have the right to direct the Administrative Agent to apply Condemnation
Proceeds in accordance with Sections 7.16(e) and (f), and (y) if no Event of
Default shall have occurred and be continuing, to the extent not inconsistent
with the requirements of Sections 7.16(e) and (f), the Borrower shall have the
right to direct the Administrative Agent to pay to the Borrower or the other
applicable Credit Party all Condemnation Proceeds with respect to a Taking
affecting a Borrowing Base Property which will cost (or may reasonably be
expected to cost) less than 25% of the Borrowing Base Amount for such
Borrowing Base Property to Restore. If, prior to the receipt by the
Administrative Agent of such Condemnation Proceeds, the portion of the
Borrowing Base Property subject to such action or proceeding shall have been
sold upon foreclosure of the applicable Mortgage (or by deed in lieu thereof)
or other Security Document, the Administrative Agent shall have the right to
receive such Condemnation Proceeds to the extent (x) such Condemnation
58
Proceeds are attributable to a Taking occurring prior to foreclosure or
delivery of any deed in lieu thereof and (y) of any deficiency attributable to
such Borrowing Base Property found to be due upon such sale, with legal
interest thereon, and reasonable counsel fees, costs and disbursements
incurred by the Administrative Agent in connection with the collection of such
Condemnation Proceeds. The Administrative Agent may, but shall not be
obligated to, make proof of loss if not made promptly by the applicable Credit
Party. During the continuance of any Event of Default, the Administrative
Agent is hereby authorized and empowered by the Borrower and each other Credit
Party to settle, adjust or compromise any claims for Condemnation Proceeds
with or without the consent of any Credit Party (and each of the Borrower and
each other Credit Party hereby irrevocably appoints and constitutes the
Administrative Agent as its lawful attorney-in-fact, coupled with an interest
and with full power of substitution, for the purpose of settling, adjusting or
compromising any such claims with respect to any Borrowing Base Property). In
no event shall any Credit Party settle, adjust or compromise any claim for
Condemnation Proceeds in respect of any Borrowing Base Property of 25% or more
of the Borrowing Base Amount for such Borrowing Base Property or more without
the prior written consent of the Administrative Agent, which shall not be
unreasonably withheld, conditioned or delayed; provided, that this provision
shall not restrict the right of the lessor under any ground lease applicable
to such Borrowing Base Property (1) to settle or compromise any claim for
Condemnation Proceeds to the extent such lessor is granted the power to do so
under such ground lease or (2) to approve any settlement or compromise of any
claim for Condemnation Proceeds to the extent the approval of such lessor is
required under such ground lease. Subject to the requirements of any ground
lease affecting any Borrowing Base Property, each condemnor concerned is
hereby authorized and directed to make payment of all Condemnation Proceeds in
respect of each of the Borrowing Base Properties payable by it directly to the
Administrative Agent. If any Credit Party receives any Condemnation Proceeds
resulting from such condemnation in respect of any Borrowing Base Property,
such Credit Party shall (subject to the requirements of any ground lease
affecting such Borrowing Base Property) promptly endorse and transfer such
Condemnation Proceeds to the Administrative Agent and each Credit Party
covenants that until so paid over to the Administrative Agent, such Credit
Party shall hold such Condemnation Proceeds in trust for the benefit of the
Administrative Agent and shall not commingle such Condemnation Proceeds with
any other funds or assets of such Credit Party or any other Person.
(e) In the event of any Casualty Event or Taking with
respect to a Borrowing Base Property which will cost (or may reasonably be
expected to cost) 25% or more of the Borrowing Base Amount for such Borrowing
Base Property to Restore, as reasonably determined by the Borrower and so
certified by an Authorized Officer of the Borrower in a certificate delivered
to the Administrative Agent, the Borrower shall elect by written notice
delivered to the Administrative Agent as soon as practicable thereafter, but
in any event before the earlier of (x) 30 days after the occurrence of such
Casualty Event or Taking and (y) the commencement of the Restoration of such
Borrowing Base Property, either:
(i) to remove such Borrowing Base Property from the
calculation of the Borrowing Base, prepay the Loans in an amount equal
to the Release Price with respect to such Borrowing Base Property
pursuant to Section 3.02(d) in the manner set forth in Sections
59
3.02(e) and (f) (which prepayment may be made with the respective Net
Insurance/Condemnation Proceeds to the extent same are available to
the Borrower or any of its Subsidiaries or the Collateral Agent) and
not Restore such Borrowing Base Property (or Restore such Borrowing
Base Property to the extent then permitted by Section 8.07 in respect
of non-Borrowing Base Properties); or
(ii) if all the following conditions shall be satisfied, to
Restore such Borrowing Base Property pursuant to subsection 7.16(f):
(A) the Maturity Date shall not have occurred;
(B) no Default or Event of Default shall have
occurred and be continuing or would be caused by such
Restoration;
(C) the Borrower is in compliance in all respects
with the provisions of Section 7.16(f);
(D) the Administrative Agent shall have determined,
in its reasonable discretion and after considering such
written opinions of architects and engineers and other
written information as the Borrower shall timely deliver to
the Administrative Agent, that Restoration of such Borrowing
Base Property is, under the circumstances then existing,
physically and economically feasible and can be completed in
accordance with Section 7.16(f) on or before a date not
later than six months prior to the Maturity Date;
(E) the Credit Parties shall have business
interruption insurance complying with Section 7.03 in an
amount at least equal to the reduction in revenues of such
Borrowing Base Property, if any, which the Borrower
reasonably expects to suffer during the period of
Restoration;
(F) the Credit Parties shall have complied with all
notices and other requirements under any Operating Lease or
ground lease affecting such Borrowing Base Property that
must be satisfied in respect of such Restoration, such
Restoration is permitted under the terms of such Operating
Lease or ground lease and such Operating Lease or ground
lease remains in full force and effect; and
(G) either (1) the Net Insurance/Condemnation
Proceeds shall be sufficient to complete the costs of such
Restoration, as determined by the Administrative Agent in
its reasonable discretion, or (2) in the event that the
Administrative Agent determines that such Net
Insurance/Condemnation Proceeds are insufficient to complete
the costs of such Restoration, the Credit Parties shall have
provided a cash deposit for the amount of any shortfall in
the amount of Net Insurance/Condemnation Proceeds necessary
to cover the costs to complete such Restoration.
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If the Credit Parties shall fail to satisfy the conditions set forth in clause
(ii) of the preceding sentence or in Section 7.16(f) with respect to the
related Borrowing Base Property, or shall fail to diligently and continuously
prosecute the Work to completion (other than as a result of Excusable Delay),
as determined by the Administrative Agent, in its reasonable discretion, then
such Borrowing Base Property shall be removed from the calculation of the
Borrowing Base, the Borrower shall prepay the Loans in an amount equal to the
Release Price with respect to such Borrowing Base Property and, subject to the
terms of any ground lease, the Administrative Agent shall apply any or all
remaining Insurance Proceeds or Condemnation Proceeds, as applicable, towards
such prepayment.
(f) In the event of any Casualty Event or Taking with
respect to a Borrowing Base Property which will cost (or may reasonably be
expected to cost) 25% or more of the Borrowing Base Amount for such Borrowing
Base Property to Restore, as reasonably determined by the Borrower and so
certified by an Authorized Officer of the Borrower in a certificate delivered
to the Administrative Agent, if any of the Credit Parties elects to Restore a
Borrowing Base Property pursuant to this Section 7.16(f) and the conditions
set forth in clause (ii) of the first sentence of Section 7.16(e) are
satisfied, all Net Insurance/Condemnation Proceeds shall be held by the
Administrative Agent (subject to the requirements of any ground lease
affecting such Borrowing Base Property) in an interest-bearing account with
the Administrative Agent, with all interest to be held therein until
completion and final inspection of the Work, and shall be applied by the
Administrative Agent to the payment of the cost of Restoring such Borrowing
Base Property so damaged or destroyed or of the portion or portions of such
Borrowing Base Property not so Taken (the "Work") and shall be paid out from
time to time to the Borrower as the Work progresses, subject to retainage as
reasonably determined by the Administrative Agent in accordance with customary
construction lending practices and otherwise in accordance with any conditions
reasonably imposed by the Administrative Agent but subject to each of the
following conditions:
(i) Subject to Excusable Delays, the Borrower shall promptly
(and in any event within 60 days after the applicable Casualty Event
or Taking) commence, or cause the commencement of, Restoration of such
Borrowing Base Property.
(ii) If the Work is structural or if the cost of the Work,
as estimated by the Borrower, shall exceed 10% of the Borrowing Base
Amount with respect to such Borrowing Base Property, the Work shall be
in the charge of an architect or engineer reasonably acceptable to the
Administrative Agent, and before any Credit Party commences any Work,
other than temporary work to protect property or prevent interference
with business, the Administrative Agent shall have approved the plans
and specifications and the general contract for the Work to be
submitted by such Credit Party, which approval shall not be
unreasonably withheld. Such plans and specifications shall provide for
such Work that, upon completion thereof, the Improvements shall (x) be
in compliance in all material respects with all Legal Requirements
61
such that all representations or warranties of the Credit Parties
relating to the compliance of such Borrowing Base Property with
applicable laws as set forth in this Agreement and in the other Credit
Documents would then be true and correct in all material respects, and
(y) be reasonably equivalent in value and general utility to the
Improvements which were on such Borrowing Base Property prior to the
Casualty Event or Taking. Such plans and specifications shall be
accompanied by (1) a signed estimate of the Borrower, or, if an
architect or engineer is required to supervise the Work, such
architect or engineer, stating the estimated cost of completing the
Work, which estimate shall bear the architect's or engineer's seal if
not made by the Borrower and (2) to the extent necessary at such stage
of the Work, certified copies of all authorizations required in
connection with the commencement and performance of the Work.
(iii) Each request for payment shall be made on five days'
prior notice to the Administrative Agent and shall be accompanied by
invoices and by (a) a certificate to be made by such architect or
engineer, if one be required under clause (ii) above, otherwise by a
certificate of an Authorized Officer of the Borrower, stating that (1)
all of the Work completed has been done in substantial compliance with
the approved plans and specifications, if any be required under said
clause (ii) above, and (2) the sum requested is required to reimburse
any of the Credit Parties for payments made by the applicable Credit
Party to, or is due to, the contractor, subcontractors, materialmen,
laborers, engineers, architects or other Persons rendering services or
materials for the Work (giving a brief description of such services
and materials), and that when added to all sums previously paid out by
the Administrative Agent does not exceed the cost of the Work done to
the date of such certificate, and (b) a certificate of an Authorized
Officer of the Borrower stating either that (x) the amount of such
proceeds remaining in the hands of the Administrative Agent, or (y)
the amount of such funds, in the hands of the applicable Credit Party
from other sources irrevocably committed to the completion of the Work
in a manner reasonably satisfactory to the Administrative Agent
(including delivery of such funds to the Administrative Agent for
application to pay the costs of the Restoration), will be sufficient
on completion of the Work to pay for the same in full (giving in such
reasonable detail as the Administrative Agent may require an estimate
of the cost of such completion). The Administrative Agent may require
that any such statements be independently verified by an inspector
approved by the Administrative Agent to the extent that any such costs
for the Work equal or exceed 10% of the Borrowing Base Amount for such
Borrowing Base Property.
(iv) Each request shall be accompanied by lien waivers
satisfactory to the Administrative Agent covering that part of the
Work for which payment or reimbursement has been made (or other
evidence as shall be satisfactory to the Administrative Agent in its
sole discretion confirming that no rights of mechanics, contractors,
subcontractors, materialmen or suppliers are outstanding in respect of
such Work) and by a search prepared by a title company reasonably
satisfactory to the Administrative Agent establishing that there has
not been filed with respect to such Borrowing Base Property any
mechanics' or other lien or instrument for the retention of title in
respect of any part of the Work not discharged of record or bonded to
the reasonable satisfaction of the Administrative Agent and evidencing
the continued priority of the Mortgage on such Borrowing Base
Property.
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(v) The available property Insurance Proceeds or
Condemnation Proceeds which are paid or will be payable by the
insurance company, together with other cash proceeds available to the
Borrower and held in a reserve by the Administrative Agent are, in the
reasonable judgment of the Administrative Agent, sufficient to pay in
full costs of the Restoration.
(vi) There shall be no Default or Event of Default.
(vii) The request for any payment after the Work has been
completed shall be accompanied by (a) a copy of any certificate or
certificates required by law to render occupancy of the improvements
being rebuilt, repaired or restored legal and (b) final lien waivers
for all labor, materials and supplies from all contractors,
subcontractors and materialmen, except with respect to claims or
rights being contested or bonded in accordance with the provisions of
Section 8.01(ii).
(viii) After commencing the Work, the Borrower or its
applicable Subsidiary shall, subject to Excusable Delays, cause such
Work to be performed diligently and in good faith in a good and
workmanlike manner to completion in accordance with the approved plans
and specifications, if any.
(ix) The Administrative Agent shall have received
"agreements to complete" of the general contractor and any independent
architects or engineers, which agreements to complete shall be in form
and substance reasonably satisfactory to the Administrative Agent.
(x) The Borrower shall have obtained and maintained, or
shall have caused the applicable Credit Party to obtain and maintain,
"all risks" insurance in accordance with Section 7.03.
All costs and expenses of any Restoration, including,
without limitation, any Work, engineer's fees, architect's fees or
contractor's fees and the cost and expense of complying with this Section
7.16(f), shall be for the account of the Borrower and/or its applicable
Subsidiary. Upon completion of the Work and payment in full therefor, the
Borrower shall promptly deliver to the Administrative Agent a Completion
Certificate with respect thereto, and the Administrative Agent shall return to
the Borrower the amount of any unspent Insurance Proceeds or Condemnation
Proceeds then or thereafter in the hands of the Administrative Agent on
account of the Casualty Event or Taking that created the need for such Work,
together with all undisbursed accrued interest thereon. Subject to the terms
of any ground lease, nothing in this Section 7.16 shall prevent the
Administrative Agent from applying at any time all or any part of the
Insurance Proceeds or Condemnation Proceeds to the curing of any Event of
Default.
(g) In the event of any Casualty Event or Taking with respect
to a Borrowing Base Property which will cost (or may reasonably be expected to
cost) 25% or more of the Borrowing Base Amount for such Borrowing Base Property
to Restore (as reasonably determined by the Borrower and so certified in a
certificate delivered to the Administrative Agent) which a Credit Party has
elected to Restore, upon completion of the
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Restoration and delivery to the Administrative Agent of a Completion
Certificate, (i) the Administrative Agent may hire an independent engineer to
inspect the applicable Borrowing Base Property and the Administrative Agent
may deem any related Restoration not complete unless the engineer determines
that the Restoration was completed in accordance with this Agreement and (ii)
to the extent that the remaining Net Insurance/Condemnation Proceeds from such
Casualty Event or Taking equals or exceeds 25% of the Borrowing Base Amount
for such Borrowing Base Property, such remaining Net Insurance/Condemnation
Proceeds shall be applied at such time to prepay the Loans pursuant to Section
3.02(d) in the manner set forth in Section 3.02(e) and (f). The cost of such
inspection shall be for the account of the Borrower or the applicable
Subsidiary.
7.17 REIT Requirements. The REIT shall operate its business
at all times so as to satisfy all requirements necessary to qualify as a real
estate investment trust under Section 856 through 860 of the Code. The REIT
will maintain adequate records so as to comply with all record-keeping
requirements relating to the qualification of the REIT as a real estate
investment trust as required by the Code and applicable regulations of the
Department of the Treasury promulgated thereunder and will properly prepare
and timely file with the IRS all returns and reports required thereby. The
REIT will request from its shareholders all shareholder information required
by the Code and applicable regulations of the Department of Treasury
promulgated thereunder.
7.18 Syndication Cooperation. GACC and its Affiliates
(collectively, the "Original Lender") reserve the right, after the Effective
Date, to syndicate all or part of the Total Commitment, from time to time, to
one or more Banks, as more particularly provided in Section 12.04. Such
syndication will be accomplished by a variety of means, including direct
contact during the syndication between senior management and advisors of the
REIT and its Subsidiaries and the proposed syndicate members. To assist the
Original Lender in its syndication efforts, the REIT and its Subsidiaries
hereby agree (a) to provide to the Original Lender and the other syndicate
members upon request with all reasonable information reasonably deemed
necessary by the Original Lender to complete syndication, including, but not
limited to, information and evaluations prepared by the REIT and its
Subsidiaries or on their behalf relating to the transactions contemplated
hereby and (b) to assist the Original Lender upon request in the preparation
of an Information Memorandum to be used in connection with the syndication of
the credit facilities contemplated herein, including making available, upon
reasonable advance notice, the officers of the REIT and its Subsidiaries from
time to time and to attend and make presentations regarding the business and
prospects of the REIT and its Subsidiaries, as appropriate, at a meeting or
meetings of Banks or prospective Banks. The Original Lender will provide the
REIT with a copy of the Information Memorandum for review prior to the
distribution thereof to prospective Banks.
SECTION 8. Negative Covenants. Each of the REIT and the
Borrower hereby covenants and agrees (as to itself and each of its
Subsidiaries) that on and after the Effective Date and until the Total
Commitment has terminated and all Letters of Credit have terminated and the
Loans, Notes and Unpaid Drawings, together with interest, Fees and all other
Obligations incurred hereunder and thereunder, are paid in full:
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8.01 Liens. The REIT will not, and will not permit any of
its Subsidiaries to, create, incur, assume or suffer to exist any Lien upon or
with respect to any property or assets (real or personal, tangible or
intangible) of the REIT or any of its Subsidiaries, whether now owned or
hereafter acquired, or sell any such property or assets subject to an
understanding or agreement, contingent or otherwise, to repurchase such
property or assets (including sales of accounts receivable with recourse to
the REIT or any of its Subsidiaries), or assign any right to receive income or
permit the filing of any financing statement under the UCC or any other
similar notice of Lien under any similar recording or notice statute, provided
that the provisions of this Section 8.01 shall not prevent the creation,
incurrence, assumption or existence of the following Liens (collectively,
"Permitted Liens"):
(i) inchoate Liens (other than Liens created or imposed
under ERISA) for taxes, assessments or governmental charges or levies
not yet due and payable or Liens for taxes, assessments or
governmental charges or levies being contested in good faith and by
appropriate proceedings for which adequate reserves have been
established in accordance with generally accepted accounting
principles;
(ii) Liens in respect of property or assets of the Borrower
or any of its Subsidiaries imposed by law, which were incurred in the
ordinary course of business and do not secure Indebtedness for
borrowed money, such as carriers', warehousemen's, materialmen's and
mechanics' liens and other similar Liens arising in the ordinary
course of business, and (x) which do not in the aggregate materially
detract from the value of the Borrower's or such Subsidiary's property
or assets or materially impair the use thereof in the operation of the
business of the Borrower or such Subsidiary or (y) which are being
contested in good faith by appropriate proceedings and for which
adequate reserves have been established, which proceedings have the
effect of preventing the forfeiture or sale of the property or assets
subject to any such Lien;
(iii) Liens in existence on the Effective Date which are
listed, and the property subject thereto described, in Schedule VII
(which Schedule VII need not set forth Permitted Encumbrances and the
Liens created pursuant to the Security Documents), but only to the
respective date, if any, set forth in such Schedule VII for the
removal and termination of any such Liens, but no renewals or
extensions of such Liens shall be permitted;
(iv) Permitted Encumbrances;
(v) Liens created pursuant to the Security Documents;
(vi) Operating Leases and leases or subleases to tenants
(including merchants, vendors or other providers of services) to be
located in the respective Property or granted by the Borrower or any
of its Subsidiaries to other Persons in the ordinary course of
business not materially interfering with the conduct of business at
the respective Property;
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(vii) (A) Liens upon equipment or machinery subject to
Capitalized Lease Obligations, provided that (x) such Liens only serve
to secure the payment of Indebtedness arising under such Capitalized
Lease Obligations and (y) the Lien encumbering the asset giving rise
to such Capitalized Lease Obligation does not encumber any other asset
of the REIT or any of its Subsidiaries and (B) Liens placed upon
equipment or machinery used in the ordinary course of business of the
Borrower or any of its Subsidiaries at the time of acquisition thereof
by the Borrower or any such Subsidiary or within 60 days thereafter to
secure Indebtedness incurred to pay all or a portion of the purchase
price thereof, provided further that the Lien encumbering the asset
giving rise to the purchase money Indebtedness does not encumber any
other asset of the REIT or any of its Subsidiaries, provided further
that the aggregate outstanding principal amount of all Indebtedness
secured by Liens permitted by this clause (vii) shall not at any time
exceed $5,000,000;
(viii) Liens securing Permitted Non-Recourse Indebtedness of
Specified Subsidiaries permitted under Section 8.04(viii) so long as
such Liens only encumber the Property (including the furniture,
fixtures and equipment related thereto) of the Specified Subsidiary
that has assumed or incurred such Permitted Non-Recourse Indebtedness;
(ix) easements, rights-of-way, restrictions, encroachments
and other similar charges or encumbrances, and minor title
deficiencies, in each case not securing Indebtedness and not
materially interfering with the conduct of the business of the
Borrower or any of its Subsidiaries;
(x) Liens arising from precautionary UCC financing statement
filings in respect of Operating Leases;
(xi) statutory and common law landlords' liens under leases
to which the Borrower or any of its Subsidiaries is a party;
(xii) Liens (other than Liens created or imposed under
ERISA) incurred or deposits made in the ordinary course of business in
connection with workers' compensation, unemployment insurance and
other types of social security, or to secure the performance of
tenders, statutory obligations, surety bonds, bids, government
contracts, performance and return-of-money bonds and other similar
obligations incurred in the ordinary course of business (exclusive of
obligations in respect of the payment for borrowed money);
(xiii) Liens arising out of judgments or awards in respect
of which the REIT or any of its Subsidiaries shall in good faith be
prosecuting an appeal or proceedings for review in respect of which
there shall have been secured a subsisting stay of execution pending
such appeal or proceedings, provided that the aggregate amount of all
such judgments or awards (and the aggregate amount of any cash and the
fair market value of any property pledged by the REIT or any of its
Subsidiaries in connection therewith) does not exceed $2,000,000 at
any time outstanding; and
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(xiv) Liens evidenced by the documentation for the Existing
Indebtedness.
8.02 Consolidation, Merger, Purchase or Sale of Assets, etc.
The REIT will not, and will not permit any of its Subsidiaries to, wind up,
liquidate or dissolve its affairs or enter into any transaction of merger or
consolidation, or convey, sell, lease or otherwise dispose of all or any part
of its property or assets, or enter into any sale-leaseback transactions, or
purchase or otherwise acquire (in one or a series of related transactions) any
part of the property or assets (other than purchases or other acquisitions of
inventory, materials and equipment in the ordinary course of business) of any
Person (or agree to do any of the foregoing at any future time), except that:
(i) Capital Expenditures (including payments in respect of
Capitalized Lease Obligations) by the Borrower and its Subsidiaries
shall be permitted to the extent not in violation of Sections
8.01(vii)(B) and 8.07;
(ii) the Borrower and each of its Subsidiaries may in the
ordinary course of business, (x) sell or otherwise dispose of
equipment and materials which, in the reasonable opinion of such
Person, are obsolete, uneconomic or no longer useful in the conduct of
such Person's business and (y) sell or exchange other items of
equipment and materials so long as the purpose of each such sale or
exchange is to acquire (and results within 30 days of such sale or
exchange in the acquisition of) replacement items of equipment or
materials which are the functional equivalent of the item of equipment
or material so sold or exchanged and is at least of equivalent value
and quality;
(iii) Investments may be made to the extent permitted by
Section 8.05;
(iv) the Borrower and each of its Subsidiaries may lease (as
lessee) real or personal property in the ordinary course of business
(so long as any such lease does not create a Capitalized Lease
Obligation unless permitted by Section 8.01(vii)); provided that
Leaseholds of Borrowing Base Properties which do not constitute
Capitalized Lease Obligations shall be permitted (x) with respect to
the Initial Borrowing Base Properties and Mortgage Loan Properties
securing the Initial Borrowing Base Pledged Mortgage Loans that are
Leaseholds and (y) with respect to subsequently acquired Borrowing
Base Properties and the Mortgage Loan Properties securing subsequently
acquired Borrowing Base Pledged Mortgage Loans, to the extent provided
in Section 8.02(viii);
(v) the Borrower and each of its Subsidiaries may make sales
of inventory in the ordinary course of business;
(vi) the Borrower and each of its Subsidiaries may sell
Borrowing Base Pledged Mortgage Loans and Borrowing Base Properties
(or in the case of a Borrowing Base Property owned or leased by a
Subsidiary of the Borrower, all of the capital stock or other equity
interests of the respective Subsidiary which owns such Borrowing Base
Property) so long as (i) no Default or Event of Default then exists or
would result therefrom, (ii) each such sale is at fair market value
(as determined in good faith by the general partner of the Borrower or
such Subsidiary), (iii) the total cash consideration received by the
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Borrower or such Subsidiary for any such sale (x) equals at least the
Release Price for such Borrowing Base Property or Borrowing Base
Pledged Mortgage Loan and (y) is received at the time of the
consummation of any such sale, and with the balance of such
consideration to be in the form of promissory notes which shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement
(although in no event shall more than 20% of the total consideration
be in the form of promissory notes), (iv) the Borrowing Base shall be
reduced in accordance with the definition thereof at the time of the
consummation of such sale, (v) the Borrower shall have delivered to
the Administrative Agent a new Borrowing Base Certificate signed by an
Authorized Financial Officer of the Borrower, calculating (in
reasonable detail) the Borrowing Base after giving effect to such
sale, and the aggregate outstanding principal amount of Loans and
Letter of Credit Outstandings after giving effect to such sale (and
any repayment required under Section 3.02) shall not exceed the
revised Borrowing Base, (vi) the Borrower or such Subsidiary
concurrently makes any payments required under Section 3.02 as a
result of such sale, (vii) at least 10 Business Days prior written
notice of such sale is given by the Borrower to the Administrative
Agent (or such shorter notice as may be acceptable to the
Administrative Agent), and (viii) the aggregate amount of all sales
made pursuant to this Section 8.02(vi) shall not, when added to the
aggregate amount of all sales made pursuant to Section 8.02(vii),
exceed 25% of the Book Value in any fiscal year of the REIT;
(vii) the Borrower and each of its Subsidiaries may sell
other assets (other than the capital stock or other equity interests
of any Subsidiary Guarantor) so long as (i) no Default or Event of
Default then exists or would result therefrom, (ii) each such sale is
at fair market value (as determined in good faith by the Borrower),
(iii) the consideration received by the Borrower or such Subsidiary is
at least 80% cash and is received at the time of the consummation of
such sale, and with the balance of such consideration to be in the
form of promissory notes which shall be pledged to the Collateral
Agent pursuant to the Pledge Agreement to the extent such promissory
notes are held by a Credit Party and (iv) the aggregate amount of all
sales made pursuant to this Section 8.02(vii) shall not, when added to
the aggregate amount of all sales made pursuant to Section 8.02(vi),
exceed 25% of the Book Value in any fiscal year of the REIT;
(viii) the Borrower and each of its Subsidiaries may acquire
Borrowing Base Properties (including by purchasing the capital stock
or other equity interests of the Person or Persons that own such
Borrowing Base Properties), and may provide or purchase Borrowing Base
Pledged Mortgage Loans, so long as (i) such Borrowing Base Property or
Borrowing Base Pledged Mortgage Loan constitutes a Qualified Property
or Qualified Mortgage Loan, as applicable (it being understood that to
the extent the Property or Mortgage Loan in question is not a
Qualified Property or a Qualified Mortgage Loan, as applicable, and
the Borrower desires to have such Property or Mortgage Loan constitute
Borrowing Base Collateral, the Required Banks shall use their
reasonable efforts to vote on whether such Property or Mortgage Loan
shall constitute Borrowing Base Collateral within 15 Business Days
after receiving the Information Package and other materials to be
delivered pursuant to Section 7.11 in respect of such Property or
Mortgage Loan (although the Required Banks' decision as to whether or
not to treat such Property or Mortgage Loan as a Borrowing Base
Property or a Borrowing Base Pledged Mortgage Loan, as applicable,
shall be made in their sole discretion)), (ii) (A) each Borrowing Base
Pledged Mortgage Loan is 100% owned by the Borrower, and (B) each
Borrowing Base Property (or the capital stock or other equity
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interests of the Person owning such Borrowing Base Property) is at
least 51% owned by the Borrower or a wholly-owned Subsidiary thereof,
provided that not more than 30% of the Borrowing Base may be comprised
of Borrowing Base Properties owned by non-wholly-owned Subsidiaries of
the Borrower, (iii) such Borrowing Base Properties and the Mortgage
Loan Properties securing such Borrowing Base Pledged Mortgage Loans
are located in the United States, (iv) the Collateral Agent is able to
obtain a first priority mortgage lien on such Borrowing Base Property
or a first priority collateral assignment of such Borrowing Base
Pledged Mortgage Loan, as the case may be, subject only to Permitted
Liens, and all of the actions specified in Section 7.11, in Section
8.12 and in the respective Security Documents with respect to such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan shall
have been taken by the Borrower and/or its respective Subsidiary, (v)
with respect to the acquisition of any Borrowing Base Property subject
to a Leasehold or the provision or purchase of any Borrowing Base
Pledged Mortgage Loan to be secured by a Mortgage Loan Property that
is subject to a Leasehold, (A) the respective Leasehold shall be
mortgageable with appropriate mortgagee protections (as reasonably
determined by the Administrative Agent, including but not limited to,
notice of defaults, cure rights, successor rights and transfer rights
upon foreclosure), (B) the respective Leasehold shall have a remaining
term of at least 25 years, and (C) the respective Leasehold shall
otherwise be reasonably satisfactory to the Administrative Agent, (vi)
in the case of a Borrowing Base Pledged Mortgage Loan, (A) if such
Borrowing Base Pledged Mortgage Loan is a construction loan, all of
the payment and performance obligations of the borrower thereunder
shall be guaranteed by an Eligible Guarantor pursuant to a Borrowing
Base Guaranty (except with respect to the Specified Mortgage Loan),
(B) such Borrowing Base Pledged Mortgage Loan shall be provided
pursuant to Pledged Mortgage Loan Documents which expressly permit the
collateral assignment thereof to the Collateral Agent as security for
the Obligations and obligate the borrower thereunder to recognize the
Collateral Agent or its successor as the "lender" thereunder following
realization on the security interest granted pursuant to the related
Collateral Assignment, and which Pledged Mortgage Loan Documents shall
otherwise be satisfactory to the Administrative Agent, (C) such
Borrowing Base Pledged Mortgage Loan shall be on market rates and
terms, as determined by the Administrative Agent or the Required
Banks, and shall have a maturity that exceeds the Maturity Date by at
least two years, (D) such Borrowing Base Pledged Mortgage Loan shall
be a term loan secured by a Mortgage Loan Property that (x) is not
under construction or material renovation, (y) has a valid, permanent
certificate of occupancy (or, if approved by the Administrative Agent,
a valid, temporary certificate of occupancy), and (z) is an operating
senior living care facility or medical office building generating
stabilized revenues; provided, that not more than 30% of the Borrowing
Base may be comprised of Borrowing Base Pledged Mortgage Loans which
are construction loans provided to borrowers approved by the
Administrative Agent for the purpose of constructing senior living
care facilities and medical office buildings (so long as such
construction loans satisfy all of the other requirements contained in
this Section 8.02(viii) and Section 7.11 for Borrowing Base Pledged
Mortgage Loans), (vii) based on calculations made by the Borrower on a
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Pro Forma Basis after giving effect to the respective acquisition of a
Borrowing Base Property or provision or purchase of a Borrowing Base
Pledged Mortgage Loan, no Default or Event of Default will exist
under, or would have existed during the Test Period last reported (or
required to be reported pursuant to Section 7.01(a) or (b), as the
case may be) prior to the date of the respective acquisition of such
Borrowing Base Property or provision or purchase of such Borrowing
Base Pledged Mortgage Loan under, the financial covenants contained in
Sections 8.08 through 8.10, inclusive, (viii) based on good faith
projections prepared by the Borrower for the period from the date of
the consummation of the respective acquisition of such Borrowing Base
Property or provision or purchase of such Borrowing Base Pledged
Mortgage Loan to the date which is one year thereafter (calculated
after giving effect to the respective acquisition, provision or
purchase), the level of financial performance measured by the
covenants set forth in Sections 8.08 through 8.10, inclusive, shall be
better than or equal to such level as would be required to provide
that no Default or Event of Default will exist under the financial
covenants contained in Sections 8.08 through 8.10, inclusive, as
compliance with such covenants will be required through the date which
is one year from the date of the consummation of the respective
acquisition of such Borrowing Base Property or provision or purchase
of such Borrowing Base Pledged Mortgage Loan, (ix) the proposed
acquisition could not reasonably be expected to result in materially
increased tax and ERISA liabilities with respect to the REIT and its
Subsidiaries taken as a whole, and (x) the Borrower shall have
delivered to the Administrative Agent an officer's certificate
executed by an Authorized Financial Officer of the Borrower,
certifying, to the best of such officer's knowledge, compliance with
the requirements of the preceding clauses (i) through (xi) (and
containing all calculations required to demonstrate such compliance);
(ix) the Borrower and its Subsidiaries may acquire
Properties and may provide or purchase Mortgage Loans which do not
constitute Borrowing Base Collateral (or may acquire the capital stock
or other equity interests of the Person or Persons owning such
Properties and/or Mortgage Loans) so long as (i) no Default or Event
of Default then exists or would result therefrom, (ii) based on
calculations made by the Borrower on a Pro Forma Basis after giving
effect to such acquisition, no Default or Event of Default will exist
under, or would have existed during the Test Period last reported (or
required to be reported pursuant to Section 7.01(a) or (b), as the
case may be) prior to the date of the respective acquisition of a
Property or purchase or provision of a Mortgage Loan under, the
financial covenants contained in Sections 8.08 through 8.10,
inclusive, (iii) based on good faith projections prepared by the
Borrower for the period from the date of the consummation of such
acquisition of a Property or purchase or provision of a Mortgage Loan
to the date which is one year thereafter calculated after giving
effect to the respective acquisition of a Property or purchase or
provision of a Mortgage Loan, the level of financial performance
measured by the covenants set forth in Sections 8.08 through 8.10,
inclusive, shall be better than or equal to such level as would be
required to provide that no Default or Event of Default will exist
under the financial covenants contained in Sections 8.08 through 8.10,
inclusive, as compliance with such covenants will be required through
the date which is one year from the date of the consummation of the
respective acquisition of a Property or purchase or provision of a
Mortgage Loan, and (iv) the Borrower shall have delivered to the
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Administrative Agent an officer's certificate executed by an
Authorized Financial Officer of the Borrower, certifying to the best
of such officer's knowledge, compliance with the requirements of
preceding clauses (i) through (iii) (and containing all calculations
required to demonstrate such compliance);
(x) any Subsidiary Guarantor may be merged with and into the
Borrower or any other Subsidiary Guarantor so long as (i) in the case
of any merger involving the Borrower, the Borrower is the surviving
corporation, (ii) in the case of any merger between two Subsidiary
Guarantors one of which is a wholly-owned Subsidiary, such
wholly-owned Subsidiary is the surviving corporation, (iii) in the
case of any merger involving a non-wholly-owned Subsidiary, the only
consideration paid to third parties in connection therewith is cash,
provided that any such cash payment shall be treated as an Investment
made (and shall reduce the aggregate amount of Investments permitted
to be made) under Section 8.05(vi) and such payment may only be made
to the extent that an Investment may be made at such time under such
Section 8.05(vi), (iv) all Liens granted pursuant to the Security
Documents on any property or assets of any Subsidiary Guarantor shall
remain in full force and effect and with at least the same priority as
such Lien would have had if such merger had not occurred and (v) at
least 10 Business Days prior written notice of any such merger is
given by the Borrower to the Administrative Agent; and
(xi) any Subsidiary of the Borrower (other than a Specified
Subsidiary) that is not a Subsidiary Guarantor may be merged with and
into any other Subsidiary of the Borrower (other than a Specified
Subsidiary) that is not a Subsidiary Guarantor so long as in the case
of any merger involving a non-wholly-owned Subsidiary of the Borrower,
the only consideration paid to third parties in connection therewith
is cash, provided that any such cash payment shall be treated as an
Investment made (and shall reduce the aggregate amount of Investments
permitted to be made) under Section 8.05(vi) and such cash payment may
only be made to the extent that an Investment may be made at such time
under such Section 8.05(vi).
8.03 Dividends. Except to the extent required in order for
the REIT to maintain its status as an entity taxed as a real estate investment
trust in accordance with the written advice of counsel, the REIT will not, and
will not permit any of its Subsidiaries to, authorize, declare or pay any
Dividends with respect to the REIT or any of its Subsidiaries, except that (i)
any Subsidiary of the Borrower may pay cash Dividends to the Borrower or to a
wholly-owned Subsidiary of the Borrower, (ii) any non-wholly-owned Subsidiary
of the Borrower may pay cash Dividends to its shareholders, partners or other
equity holders generally so long as (x) the Borrower or its respective
Subsidiary which owns the equity interest or interests in the Subsidiary
paying such Dividends receives at least its proportionate share thereof (based
upon its relative holdings of equity interests in the Subsidiary paying such
Dividends and taking into account the relative preferences, if any, of the
various classes of equity interests in such Subsidiary) and (y) no Dividends
may be paid by any non wholly-owned Subsidiary of the Borrower (other than ET
Capital Corp.) at any time that any intercompany loans are outstanding to such
Subsidiary, and (iii) so long as no Default or Event of Default then exists or
would result therefrom, the Borrower may pay cash Dividends to the REIT, which
in turn may pay cash Dividends to its shareholders to the extent of any
Dividends received by the REIT from the Borrower, provided that the aggregate
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amount of cash Dividends paid by the REIT pursuant to this clause (iii) in any
fiscal quarter of the REIT shall not exceed 89% of the REIT's estimated funds
from operations for such fiscal quarter, and provided further that no
Dividends shall be paid by the REIT pursuant to this clause (iii) in any
fiscal quarter of the REIT prior to the release by the REIT of its quarterly
earnings report.
8.04 Indebtedness. The REIT will not, and will not permit
any of its Subsidiaries to, contract, create, incur, assume or suffer to exist
any Indebtedness, except:
(i) Indebtedness incurred pursuant to this Agreement and the
other Credit Documents;
(ii) Existing Indebtedness to the extent the same is listed
on Schedule V (although any Existing Indebtedness of the type
described in clause (iii) of this Section 8.04 does not have to be
listed on such Schedule V), but no refinancings or renewals thereof;
(iii) accrued expenses and trade accounts payable incurred
in the ordinary course of business;
(iv) Indebtedness of the Borrower and its Subsidiaries
evidenced by Capitalized Lease Obligations and/or purchase money
Indebtedness to the extent permitted under Section 8.01(vii);
(v) intercompany Indebtedness among the Borrower and the
Subsidiary Guarantors to the extent permitted by Section 8.05(iv);
(vi) intercompany Indebtedness owed by Subsidiaries of the
Borrower which are not Subsidiary Guarantors to the Borrower or any
Subsidiary Guarantor to the extent permitted by Section 8.05(vi);
(vii) unsecured short-term trade Indebtedness of the
Borrower or any of its Subsidiaries incurred in the ordinary course of
business; and
(viii) Permitted Non-Recourse Indebtedness of a Specified
Subsidiary incurred to finance the provision or purchase of a Mortgage
Loan or the purchase of (or assumed at the time of the purchase of),
or to finance the renovation of, a Property, so long as (i) no Default
or Event of Default then exists or would result therefrom, (ii) based
on calculations made by the Borrower on a Pro Forma Basis as if the
incurrence of such Indebtedness had occurred on the first day of the
respective Calculation Period relating to such incurrence, no Default
or Event of Default will exist under, or would have existed during the
period beginning on the first day of the respective Calculation Period
and ended on the Determination Date under, the financial covenants
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contained in Sections 8.08 through 8.10, inclusive, (iii) based on
good faith projections prepared by the Borrower for the period from
the date that such Indebtedness is incurred to the date which is one
year thereafter, the level of financial performance measured by the
covenants set forth in Sections 8.08 through 8.10, inclusive, shall be
better than or equal to such level as would be required to provide
that no Default or Event of Default will exist under the financial
covenants contained in Sections 8.08 through 8.10, inclusive, as
compliance with such covenants will be required through the date which
is one year from the date of the incurrence of such Indebtedness, (iv)
the amount of any such Permitted Non-Recourse Indebtedness does not
exceed 75% of the Market Value of the Property or Mortgage Loan, as
the case may be, at such time, (v) the aggregate principal amount of
all Permitted Non-Recourse Indebtedness outstanding at any one time
shall not exceed $25,000,000, (vi) the Borrower shall have delivered
to the Administrative Agent an officer's certificate executed by an
Authorized Financial Officer of the Borrower, certifying to the best
of such officer's knowledge, compliance with the requirements of this
Section 8.04(viii) and containing the calculations required by the
preceding clauses (ii), (iii), (iv) and (v), and (vii) if the asset to
be financed with such Permitted Non-Recourse Indebtedness is a
Borrowing Base Property or a Borrowing Base Pledged Mortgage Loan, (A)
the net refinancing proceeds received by the Borrower or such
Subsidiary from any such financing (x) equal at least the Release
Price for such Borrowing Base Property or Borrowing Base Pledged
Mortgage Loan and (y) are received at the time of the consummation of
any such financing, (B) the Borrowing Base shall be reduced in
accordance with the definition thereof at the time of the consummation
of such financing, (C) the Borrower shall have delivered to the
Administrative Agent a new Borrowing Base Certificate signed by an
Authorized Financial Officer of the Borrower, calculating (in
reasonable detail) the Borrowing Base after giving effect to such
financing, and the aggregate outstanding principal amount of Loans and
Letter of Credit Outstandings after giving effect to such financing
(and any repayment required under Section 3.02) shall not exceed the
revised Borrowing Base, (D) the Borrower or such Subsidiary
concurrently makes any payments required under Sections 2.01 and 3.02
as a result of such financing, and (E) at least 10 Business Days prior
written notice of such financing is given by the Borrower to the
Administrative Agent (or such shorter notice as may be acceptable to
the Administrative Agent).
8.05 Advances, Investments and Loans. The REIT will not, and
will not permit any of its Subsidiaries to, directly or indirectly, lend money
or credit or make advances to any Person, or purchase or acquire any stock,
obligations or securities of, or any other interest in, or make any capital
contribution to, any other Person, or purchase or own a futures contract or
otherwise become liable for the purchase or sale of currency or other
commodities at a future date in the nature of a futures contract, or hold any
cash or Cash Equivalents (each of the foregoing an "Investment" and,
collectively, "Investments"), except that the following shall be permitted:
(i) the Borrower and its Subsidiaries may acquire and hold
accounts receivables owing to any of them, if created or acquired in
the ordinary course of business and payable or dischargeable in
accordance with customary terms;
(ii) the Borrower and its Subsidiaries may acquire and hold
cash and Cash Equivalents;
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(iii) the Borrower and the Subsidiary Guarantors may
purchase or provide Borrowing Base Pledged Mortgage Loans in
accordance with Section 8.02(viii) and Subsidiaries of the Borrower
that are not Subsidiary Guarantors may purchase or provide Mortgage
Loans that are not Borrowing Base Pledged Mortgage Loans in accordance
with Section 8.02(ix);
(iv) the Borrower and the Subsidiary Guarantors may make
intercompany loans to one another so long as (i) each such
intercompany loan is evidenced by an Intercompany Note which shall be
pledged to the Collateral Agent pursuant to the Pledge Agreement, and
(ii) any intercompany loan made by any Subsidiary Guarantor that is
not a wholly-owned Subsidiary of the Borrower shall contain the
subordination provisions set forth in Exhibit O;
(v) The REIT may make cash equity contributions to the
Borrower;
(vi) subject to the restrictions set forth in Section 8.16,
the Borrower and its Subsidiaries may make additional Investments so
long as (i) no Default or Event of Default then exists or would result
therefrom, (ii) after giving effect to any such Investment, the
aggregate principal amount of Loans then outstanding and Letter of
Credit Outstandings shall not exceed the Borrowing Base then in effect
and (iii) any Investments that are made by the Borrower or a
Subsidiary Guarantor pursuant to this Section 8.05(vi) in the form of
a loan shall be evidenced by a promissory note and shall be pledged to
the Collateral Agent pursuant to the Pledge Agreement;
(vii) the REIT and its Subsidiaries may hold the stock or
other interests in their respective Subsidiaries; and
(viii) the REIT may make the Specified Loans.
8.06 Transactions with Affiliates. The REIT will not, and
will not permit any of its Subsidiaries to, enter into any transaction or
series of related transactions with any Affiliate of the REIT or any of its
Subsidiaries, other than in the ordinary course of business and on terms and
conditions substantially as favorable to the REIT or such Subsidiary as would
reasonably be obtained by the REIT or such Subsidiary at that time in a
comparable arm's-length transaction with a Person other than an Affiliate,
except that:
(i) Dividends may be paid to the extent provided in Section
8.03; and
(ii) loans may be made and other transactions may be entered
into by the REIT and its Subsidiaries to the extent permitted by
Section 8.04 or 8.05.
8.07 Capital Expenditures. The REIT will not, and will not
permit any of its Subsidiaries to, make any Capital Expenditures if after
giving effect thereto a Default or an Event of Default would exist.
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8.08 Minimum Equity Value; Minimum Tangible Net Worth. The
REIT will not permit its Equity Value to be less than $70,000,000 at any time
and the REIT will not permit the Tangible Net Worth of the REIT and its
Subsidiaries to be less than $100,000,000 at any time.
8.09 Total Leverage Ratio. The REIT will not permit the
ratio of Consolidated Indebtedness to Book Value to exceed 70.0% at any time.
8.10 Minimum Interest Coverage Ratio. The REIT will not
permit the ratio of Consolidated EBITDA to Consolidated Interest Expense for
the Test Period then ended to be less than 2.0:1.0 at any time.
8.11 Public REIT Status. The REIT will not cease, for any
reason, to maintain (i) its qualification as a real estate investment trust
under Sections 856 through 860 of the Code or (ii) its status as a publicly
traded, stock exchange listed company.
8.12 Limitation on Creation of Subsidiaries. The REIT will
not, and will not permit any of its Subsidiaries to, establish, create or
acquire any additional Subsidiaries, except that the Borrower and its
wholly-owned Subsidiaries shall be permitted to establish, create or acquire
wholly-owned Subsidiaries and, to the extent permitted by Section 8.02(viii),
Section 8.02(ix) and Section 8.05(vi), non-wholly-owned Subsidiaries, in each
case in connection with the acquisition of new Properties and the provision or
purchase of Mortgage Loans that are not Borrowing Base Pledged Mortgage Loans
permitted by Section 8.02(viii) and Section 8.02 (ix) and Investments
permitted by Section 8.05(vi), as the case may be, so long as (i) the capital
stock of such new Subsidiary (to the extent that same is a corporation and is
owned by a Credit Party) is pledged pursuant to the Pledge Agreement and any
certificates representing such stock, together with undated stock powers duly
executed in blank, are delivered to the Collateral Agent, (ii) the partnership
or limited liability company interests of such new Subsidiary (to the extent
that same is a partnership or limited liability company and is owned by a
Credit Party) are pledged and assigned pursuant to the Pledge and Security
Agreement and (iii) any such new Subsidiary which owns a Borrowing Base
Property or a Borrowing Base Pledged Mortgage Loan and/or an equity interest
(both directly and indirectly) in any other Subsidiary which owns a Borrowing
Base Property or a Borrowing Base Pledged Mortgage Loan executes a counterpart
of the Subsidiaries Guaranty, the Pledge Agreement, the Pledge and Security
Agreement and the Security Agreement, and (iv) any such new Subsidiary which
owns a Borrowing Base Property or a Borrowing Base Pledged Mortgage Loan
and/or an equity interest in any other Subsidiary which owns a Borrowing Base
Property or a Borrowing Base Pledged Mortgage Loan shall take all actions
required pursuant to Section 7.11. In addition, each such new Subsidiary which
owns a Borrowing Base Property or a Borrowing Base Pledged Mortgage Loan
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and/or an equity interest in any other Subsidiary which owns a Borrowing Base
Property or a Borrowing Base Pledged Mortgage Loan shall execute and deliver,
or cause to be executed and delivered, all other relevant documentation of the
type described in Section 4 as such new Subsidiary would have had to deliver
if such new Subsidiary were a Credit Party on the Effective Date.
Notwithstanding the foregoing provisions of this Section 8.12, the Credit
Parties shall not be required to pledge their shareholder, partnership or
limited liability company interests in a new Subsidiary which does not own a
Borrowing Base Property or a Borrowing Base Pledged Mortgage Loan and/or an
equity interest in any other Subsidiary which owns a Borrowing Base Property
or a Borrowing Base Pledged Mortgage Loan if each of the following conditions
are satisfied: (i) such Subsidiary is formed for the purpose of acquiring a
Property or providing or purchasing a Mortgage Loan, which transaction is to
be financed with Permitted Non-Recourse Indebtedness, (ii) the lender
providing such Permitted Non-Recourse Indebtedness has not agreed (after
commercially reasonable request made by the relevant Credit Party) to permit
the pledge of equity in such Subsidiary, and (iii) each Credit Party owning a
shareholder, partnership or limited liability company interest in such
Subsidiary agrees that it will not cause, suffer or permit the encumbrance of
such shareholder, partnership or limited liability company interest by any
Lien (other than Permitted Liens), whether voluntarily, by operation of law or
otherwise.
8.13 Limitation on Payments of Certain Indebtedness;
Modifications of Certain Indebtedness; Modifications of Certificate of
Incorporation, By-Laws and Certain Agreements; etc. The REIT will not, and
will not permit any of its Subsidiaries to, (i) make (or give any notice in
respect of) any voluntary or optional payment or prepayment on or redemption
or acquisition for value of, or any prepayment or redemption as a result of
any change of control or similar event of, including, in each case without
limitation, by way of depositing with the trustee with respect thereto money
or securities before due for the purpose of paying when due, any Permitted
Non-Recourse Indebtedness, (ii) make (or give any notice in respect of) any
payment or prepayment on or redemption or acquisition for value of, including,
in each case without limitation, by way of depositing with any trustee with
respect thereto money or securities before due for the purpose of paying when
due, any principal, premium, interest or other amounts on the Existing
Indebtedness, provided that, so long as no Default or Event of Default then
exists, the Borrower may make the scheduled principal and interest payments on
the Existing Indebtedness, (iii) amend or modify, or permit the amendment or
modification of, any provision of any Permitted Non-Recourse Indebtedness or
any agreement (including, without limitation, any purchase agreement,
indenture or loan agreement) related thereto (other than any amendment or
modification thereto which would not violate or be inconsistent with any of
the terms or provisions of this Agreement and could not reasonably be expected
to be adverse to the interests of the Banks in any material respect), (iv)
amend or modify, or permit the amendment or modification of, any provision of
the Debt Agreements, or (v) amend, modify or change its declaration of trust,
certificate of incorporation (including, without limitation, by the filing or
modification of any certificate of designation), by-laws, certificate of
partnership, partnership agreement or any equivalent organizational document,
or any agreement entered into by it, with respect to its capital stock or
other equity interests, or enter into any new agreement with respect to its
capital stock or other equity interests, other than any amendments,
modifications or changes pursuant to this clause (v) or any such new
agreements which are not adverse in any material respect to the interests of
the Banks, provided that in no event shall any amendments, modifications or
changes to the terms of the capital stock of the REIT, or any Subsidiary of
the REIT be permitted, other than any amendments which change the number of
authorized shares of capital stock.
8.14 Limitation on Certain Restrictions on Subsidiaries. The
REIT will not, and will not permit any of its Subsidiaries to, directly or
indirectly, create or otherwise cause or suffer to exist or become effective
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any encumbrance or restriction on the ability of any Subsidiary of the
Borrower to (a) pay dividends or make any other distributions on its capital
stock or any other interest or participation in its profits owned by the
Borrower or any of its Subsidiaries, or pay any Indebtedness owed to the
Borrower or any Subsidiary of the Borrower, (b) make loans or advances to the
Borrower or any Subsidiary of the Borrower or (c) transfer any of its
properties or assets to the Borrower or any Subsidiary of the Borrower, except
in each case for such encumbrances or restrictions existing under or by reason
of (i) applicable law, (ii) this Agreement and the other Credit Documents,
(iii) customary provisions restricting subletting or assignment of any lease
governing a leasehold interest of the Borrower or any Subsidiary of the
Borrower, (iv) customary provisions restricting assignment of any licensing
agreement entered into by the Borrower or any Subsidiary of the Borrower in
the ordinary course of business, (v) customary provisions restricting the
transfer of assets subject to Liens permitted under Section 8.01(vii) and (vi)
restrictions existing in any document executed in connection with any
Permitted Non-Recourse Indebtedness so long as such restrictions only apply to
the Specified Subsidiary that has incurred such Permitted Non-Recourse
Indebtedness.
8.15 Limitation on Issuance of Capital Stock. The REIT will
not permit any of its Subsidiaries other than the Borrower to issue any
capital stock (including by way of sales of treasury stock) or other equity
interests or any options or warrants to purchase, or securities convertible
into, capital stock or other equity interests, except (i) for transfers and
replacements of then outstanding shares of capital stock or other equity
interests, (ii) for stock splits, stock dividends and similar or additional
issuances which do not decrease the percentage ownership of the REIT or any of
its Subsidiaries in any class of the capital stock or other equity interests
of such Subsidiary and (iii) to qualify directors to the extent required by
applicable law.
8.16 Business. The REIT will not, and will not permit any of
its Subsidiaries to, engage (directly or indirectly) in any business other
than the business of the REIT and its Subsidiaries described in the
Registration Statement.
8.17 Borrowing Base. The Borrower will not permit the
outstanding balance of Loans and Letter of Credit Outstandings at any time to
exceed the Borrowing Base. The Administrative Agent may, at any time and from
time to time in its sole discretion, recalculate the Borrowing Base (by
recalculating the Borrowing Base amounts attributable to any or all of the
Borrowing Base Collateral), and shall notify the Borrower in writing if,
following any such recalculation, the outstanding principal balance of Loans
and Letter of Credit Outstandings exceeds the Borrowing Base. The Borrower
shall repay Loans and Letter of Credit Outstandings in accordance with Section
3.02 upon receipt of any such notice from the Administrative Agent.
SECTION 9. Events of Default. Upon the occurrence of any of
the following specified events (each an "Event of Default"):
9.01 Payments. The Borrower shall (i) default in the payment
when due of any principal of any Loan or any Note or (ii) default, and such
default shall continue unremedied for five or more Business Days, in the
payment when due of any interest on any Loan or Note, any Unpaid Drawing or
any Fees or any other amounts owing hereunder or under any other Credit
Document; or
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9.02 Representations, etc. Any representation, warranty or
statement made or deemed made by any Credit Party herein or in any other
Credit Document or in any certificate delivered pursuant hereto or thereto
shall prove to be untrue in any material respect on the date as of which made
or deemed made; or
9.03 Covenants. Any Credit Party shall (i) default in the
due performance or observance by it of any term, covenant or agreement
contained in Section 7.01(f)(i), 7.03 or 7.08 or Section 8 or (ii) default in
the due performance or observance by it of any other term, covenant or
agreement contained in this Agreement (other than as provided in Section 9.01)
and such default shall continue unremedied for a period of 30 days after
written notice to the Borrower by the Administrative Agent or the Required
Banks, except that any default under Section 7.13 shall constitute a Special
Mandatory Repayment Event and shall not constitute an Event of Default unless
there is also a default under Section 3.02(f); or
9.04 Default Under Other Agreements. (i) The REIT or any of
its Subsidiaries shall (x) default in any payment of any Indebtedness (other
than the Obligations) beyond the period of grace, if any, provided in the
instrument or agreement under which such Indebtedness was created or (y)
default in the observance or performance of any agreement or condition
relating to any Indebtedness (other than the Obligations) or contained in any
instrument or agreement evidencing, securing or relating thereto, or any other
event shall occur or condition exist, the effect of which default or other
event or condition is to cause, or to permit the holder or holders of such
Indebtedness (or a trustee or agent on behalf of such holder or holders) to
cause (determined without regard to whether any notice is required), any such
Indebtedness to become due prior to its stated maturity, or (ii) any
Indebtedness (other than the Obligations) of the REIT or any of its
Subsidiaries shall be declared to be due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment, prior to the
stated maturity thereof, provided that it shall not be a Default or an Event
of Default under clauses (i) or (ii) of this Section 9.04 unless the aggregate
outstanding principal amount of all Indebtedness as described in such clauses
(i) and (ii) is at least $10,000,000; or
9.05 Bankruptcy, etc. The REIT or any of its Subsidiaries
shall commence a voluntary case concerning itself under Title 11 of the United
States Code entitled "Bankruptcy," as now or hereafter in effect, or any
successor thereto (the "Bankruptcy Code"); or an involuntary case is commenced
against the REIT or any of its Subsidiaries and the petition is not
controverted within 30 days, or is not dismissed within 60 days, after
commencement of the case; or a custodian (as defined in the Bankruptcy Code)
is appointed for, or takes charge of, all or substantially all of the property
of the REIT or any of its Subsidiaries or the REIT or any of its Subsidiaries
commences any other proceeding under any reorganization, arrangement,
adjustment of debt, relief of debtors, dissolution, insolvency or liquidation
or similar law of any jurisdiction whether now or hereafter in effect relating
to the REIT or any of its Subsidiaries, or there is commenced against the REIT
or any of its Subsidiaries any such proceeding which remains undismissed for a
period of 60 days, or the REIT or any of its Subsidiaries is adjudicated
insolvent or bankrupt; or any order of relief or other order approving any
such case or proceeding is entered and is not vacated or stayed within 60
days; or the REIT or any of its Subsidiaries suffers any appointment of any
custodian or the like for it or any substantial part of its property to
78
continue undischarged or unstayed for a period of 60 days; or the REIT or any
of its Subsidiaries makes a general assignment for the benefit of creditors;
or any partnership and/or corporate action is taken by the REIT or any of its
Subsidiaries for the purpose of effecting any of the foregoing; provided,
however, that the occurrence of any of the events described in this Section
9.05 with respect to a Subsidiary of the REIT that is not the Borrower or a
Subsidiary Guarantor and is not a Subsidiary of the REIT to which more than
$25,000,000 of Book Value is attributable shall not be a Default or an Event
of Default; or
9.06 ERISA. (a) Any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof under Section 412
of the Code or Section 302 of ERISA or a waiver of such standard or extension
of any amortization period is sought or granted under Section 412 of the Code
or Section 303 or 304 of ERISA, a Reportable Event shall have occurred, a
contributing sponsor (as defined in Section 4001(a)(13) of ERISA) of a Plan
subject to Title IV of ERISA shall be subject to the advance reporting
requirement of PBGC Regulation 4043.61 (without regard to subparagraph (b)(1)
thereof) and an event described in subsection .62, .63, .64., .65, .66, .67 or
.68 or PBGC Regulation Section 4043 shall be reasonably expected to occur with
respect to such Plan within the following 30 days, any Plan or Multiemployer
Plan shall have had or is likely to have the PBGC seek to appoint a trustee to
administer such Plan, any Plan or Multiemployer Plan is, shall have been or is
likely to be terminated or to be the subject of termination proceedings under
ERISA, any Plan shall have an Unfunded Current Liability, a contribution
required to be made by the REIT, any Subsidiary of the REIT or any ERISA
Affiliate to a Plan has not been timely made, the REIT or any of its
Subsidiaries or ERISA Affiliates has incurred or is likely to incur a
liability to or on account of a Plan or Multiemployer Plan under ERISA or the
Code, or on account of a group health plan (as defined in Section 607(1) of
ERISA or Section 4980B(g)(2) of the Code) under Section 4980B of the Code, or
the REIT or any of its Subsidiaries or ERISA Affiliates has incurred or is
likely to incur liabilities pursuant to one or more employee welfare benefit
plans (as defined in Section 3(1) of ERISA) that provide benefits to retired
employees or other former employees (other than as required by Section 601 of
ERISA) or employee pension benefit plans (as defined in Section 3(2) of ERISA)
of the REIT or any of its Subsidiaries that is not tax-qualified under Section
401(a) of the Code or Plans; and (b) there shall result from any such event or
events the imposition of a lien, the granting of a security interest, or a
liability or a material risk of incurring a liability; and (c) such lien,
security interest or liability, individually and/or in the aggregate, in the
reasonable opinion of the Required Banks, has had, or could reasonably be
expected to have, a material adverse effect on the business, operations,
property, assets, liabilities, condition (financial or otherwise) or prospects
of the REIT, the REIT and its Subsidiaries taken as a whole, the Borrower or
the Borrower and its Subsidiaries taken as a whole; or
9.07 Security Documents. At any time after the execution and
delivery thereof, any of the Security Documents shall cease to be in full
force and effect, or shall cease to give the Collateral Agent for the benefit
of the Secured Creditors the Liens, rights, powers and privileges purported to
be created thereby (including, without limitation, a perfected security
interest in, and Lien on, all of the Collateral), in favor of the Collateral
Agent, superior to and prior to the rights of all third Persons (except as
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permitted by Section 8.01), and subject to no other Liens (except as permitted
by Section 8.01), or any Credit Party shall default in the due performance or
observance of any term, covenant or agreement on its part to be performed or
observed pursuant to any of the Security Documents and such default shall
continue beyond any grace period specifically applicable thereto pursuant to
the terms of such Security Document; or
9.08 Guaranty. Any Guaranty shall cease to be in full force
or effect as to the relevant Guarantor, or any Guarantor or Person acting by
or on behalf of such Guarantor shall deny or disaffirm such Guarantor's
obligations under the relevant Guaranty, or any Guarantor shall default in the
due performance or observance of any term, covenant or agreement on its part
to be performed or observed pursuant to the relevant Guaranty and such default
shall continue beyond any grace period specifically applicable thereto
pursuant to the terms of such Guaranty; or
9.09 Judgments. One or more judgments or decrees shall be
entered against the REIT or any of its Subsidiaries involving in the aggregate
for the REIT and its Subsidiaries a liability (not paid or not fully covered
by a reputable and solvent insurance company) and such judgments and decrees
either shall be final and non-appealable or shall not be vacated, discharged
or stayed or bonded pending appeal for any period of 30 consecutive days, and
the aggregate amount of all such judgments equals or exceeds $10,000,000; or
9.10 Change of Control. A Change of Control shall occur; or
9.11 Initial Borrowing Base Collateral. An Event of Default
shall occur under Section 4.13(c); then, and in any such event, and at any time
thereafter, if any Event of Default shall then be continuing, the Administrative
Agent, upon the written request of the Required Banks, shall by written notice
to the Borrower, take any or all of the following actions, without prejudice to
the rights of the Administrative Agent, any Bank, the Issuing Bank or the holder
of any Note to enforce its claims against any Credit Party (provided, that, if
an Event of Default specified in Section 9.05 shall occur with respect to the
Borrower, the result which would occur upon the giving of written notice by the
Administrative Agent to the Borrower as specified in clauses (i) and (ii) below
shall occur automatically without the giving of any such notice): (i) declare
the Total Commitment terminated, whereupon the Commitment of each Bank shall
forthwith terminate immediately; (ii) declare the principal of and any accrued
interest in respect of all Loans and the Notes and all other Obligations owing
hereunder and thereunder to be, whereupon the same shall become, forthwith due
and payable without presentment, demand, protest or other notice of any kind,
all of which are hereby waived by each Credit Party; (iii) terminate any Letter
of Credit which may be terminated in accordance with its terms; (iv) enforce, as
Collateral Agent, all of the Liens and security interests created pursuant to
the Security Documents; and (v) direct the Borrower to pay (and the Borrower
hereby agrees upon receipt of such notice, or upon the occurrence of any Event
of Default specified in Section 9.05, to pay) to the Collateral Agent at the
Payment Office such additional amounts of cash, to be held as security for the
Borrower's reimbursement obligations in respect of Letters of Credit then
outstanding, equal to the aggregate Stated Amount of all Letters of Credit then
outstanding.
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SECTION 10. Definitions and Accounting Terms.
10.01 Defined Terms. As used in this Agreement, the
following terms shall have the following meanings (such meanings to be equally
applicable to both the singular and plural forms of the terms defined):
"Addition Date" shall mean the date upon which a Qualified
Property or a Qualified Mortgage Loan is added to the Borrowing Base, which
date shall be the later to occur of (i) the date on which such Qualified
Property is acquired or such Qualified Mortgage Loan is provided or purchased,
as applicable, and (ii) the date on which all the conditions set forth in
Sections 7.11 and 8.02(viii) shall have been satisfied with respect to such
Qualified Property or Qualified Mortgage Loan.
"Administrative Agent" shall mean German American Capital
Corporation, in its capacity as Administrative Agent for the Banks hereunder,
and shall include any successor to the Administrative Agent appointed pursuant
to Section 11.01 or 11.09.
"Affiliate" shall mean, with respect to any Person, any
other Person (i) directly or indirectly controlling (including, but not
limited to, all directors, officers and general partners of such Person)
controlled by, or under direct or indirect common control with, such Person or
(ii) that directly or indirectly owns more than 10% of any class of the voting
securities or capital stock of or equity interests in such Person. A Person
shall be deemed to control another Person if such Person possesses, directly
or indirectly, the power to direct or cause the direction of the management
and policies of such other Person, whether through the ownership of voting
securities, by contract or otherwise.
"Agreement" shall mean this Credit Agreement, as modified,
supplemented, amended, restated, extended, renewed, refinanced or replaced
from time to time.
"Applicable Margin" shall mean: (a) with respect to a
Eurodollar Loan, (i) 1.80%, if the Borrowing Base LTV is greater than 60.0% at
the commencement of the applicable Interest Period; (ii) 1.65%, if the
Borrowing Base LTV is equal to or less than 60.0% and greater than 50.0% at
the commencement of the applicable Interest Period; and (iii) 1.50%, if the
Borrowing Base LTV is equal to or less than 50.0% at the commencement of the
applicable Interest Period; and (b) with respect to a Base Rate Loan, 1.0%.
"Appraisal" shall mean a written appraisal prepared by an
independent MAI appraiser engaged by and acceptable to the Administrative
Agent, prepared in accordance with the Administrative Agent's customary
independent appraisal requirements and in compliance with all applicable
regulatory requirements, including 12 C.F.R. Part 34-Subpart C, and otherwise
in form, scope and substance satisfactory to the Administrative Agent.
"Appraised Value" shall mean, as to any Borrowing Base
Property, the as-is fair market value of such Borrowing Base Property as
reflected in the then most recent Appraisal of such Borrowing Base Property
delivered pursuant to Section 7.11(i) or Section 7.15, as the case may be.
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"Approved Bank" shall have the meaning provided in the
definition of "Cash Equivalents."
"Assignment and Assumption Agreement" shall mean the
Assignment and Assumption Agreement substantially in the form of Exhibit P
(appropriately completed).
"Authorized Financial Officer" of any Credit Party shall
mean any of the President, the Chief Financial Officer, the Treasurer or the
Chief Accounting Officer of such Credit Party or any other officer of such
Credit Party designated in writing to the Administrative Agent by any of the
foregoing officers of such Credit Party as being authorized to act in such
capacity so long as the other officer is a financial person who works in such
Credit Party's controller's or accounting office.
"Authorized Officer" of any Credit Party shall mean any of
the President, any Authorized Financial Officer or any Vice-President of such
Credit Party or any other officer of such Credit Party which is designated in
writing to the Administrative Agent by any of the foregoing officers of such
Credit Party as being authorized to give such notices under this Agreement.
"Bank" shall mean each financial institution listed on
Schedule I, as well as any Person which becomes a "Bank" hereunder pursuant to
12.04(b).
"Bank Debt" shall mean, at any time, the aggregate
outstanding principal amount of all Loans at such time.
"Bank Default" shall mean (i) the refusal (which has not
been retracted) of a Bank to make available its portion of any Borrowing or to
fund its portion of any unreimbursed payment under Section 1.16(c) in
violation of this Agreement or (ii) a Bank having notified in writing the
Borrower and/or the Administrative Agent that it does not intend to comply
with its obligations under Section 1.01(a), 1.16 or 1.18, including, without
limitation, as a result of any takeover of such Bank by any regulatory
authority or agency.
"Bankruptcy Code" shall have the meaning provided in Section
9.05.
"Base Rate" shall mean, as determined by DB on a daily
basis, the higher of (a) the Prime Lending Rate or (b) the sum of the Federal
Funds Rate plus 1/2 of 1% per annum. With reference to clause (a) above, the
Borrower acknowledges that the rate thereunder is a reference rate only and
does not necessarily represent DB's lowest or best rate actually charged to
any customer, and DB may make commercial loans or other loans at rates of
interest at, above or below such rate.
"Base Rate Loan" shall mean each Loan designated or deemed
designated as such by the Borrower at the time of the incurrence thereof or
conversion thereto.
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"Book Value" shall mean, at any time, the aggregate value of
all assets of the REIT and its Subsidiaries, as reflected on the consolidated
balance sheet of the REIT and its Subsidiaries in accordance with GAAP.
"Borrower" shall have the meaning provided in the first
paragraph of this Agreement.
"Borrowing" shall mean the borrowing of one Type of Loan
from all the Banks on a given date (or resulting from a conversion or
conversions on such date) having in the case of Eurodollar Loans the same
Interest Period, provided that Base Rate Loans incurred pursuant to Section
1.10(b) shall be considered part of the related Borrowing of Eurodollar Loans.
"Borrowing Base" shall mean, as of any date of
determination, the amount determined by the Administrative Agent to be equal
to the sum of the Borrowing Base Amounts in respect of all Borrowing Base
Properties and all Borrowing Base Pledged Mortgage Loans as of such date of
determination.
"Borrowing Base Amount" shall mean, as of any date of
determination, (i) with respect to any Borrowing Base Property, (x) 60% of the
Market Value of such Borrowing Base Property if the lessee's obligations under
the Operating Lease encumbering such Borrowing Base Property have not been
fully guaranteed by an Eligible Guarantor or (y) 80% of the Market Value of
such Borrowing Base Property if the lessee's obligations under the Operating
Lease encumbering such Borrowing Base Property have been fully guaranteed by
an Eligible Guarantor, (ii) with respect to any Borrowing Base Pledged
Mortgage Loan that is not a construction loan, (x) 60% of the Market Value of
such Borrowing Base Pledged Mortgaged Loan if the obligations of the borrower
under such Mortgage Loan have not been fully guaranteed by an Eligible
Guarantor or (y) 80% of the Market Value of such Borrowing Base Pledged
Mortgage Loan if the obligations of the borrower under such Mortgage Loan have
been fully guaranteed by an Eligible Guarantor, and (iii) with respect to any
Borrowing Base Pledged Mortgaged Loan that is a construction loan, 60% of the
maximum principal balance of such Borrowing Base Pledged Mortgaged Loan,
provided that, except for the Specified Mortgage Loan, no Mortgage Loan that
is a construction loan shall be a Qualified Mortgage Loan unless all of the
obligations of the borrower under such Mortgage Loan have been guaranteed by
an Eligible Guarantor.
"Borrowing Base Certificate" shall mean a certificate signed
by an Authorized Financial Officer of the Borrower in the form of Exhibit L.
"Borrowing Base Collateral" shall mean and include, as of
any date, all Borrowing Base Properties and all Borrowing Base Pledged
Mortgage Loans.
"Borrowing Base Guaranty" shall mean either (x) a guaranty
in form and substance satisfactory to the Administrative Agent of the
obligations of an Operating Lessee under an Operating Lease or (y) a guaranty
in form and substance satisfactory to the Administrative Agent of the
obligations of a borrower under a Borrowing Base Pledged Mortgage Loan, in
either case, provided by an Eligible Guarantor.
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"Borrowing Base LTV" shall mean, as of any date, the ratio
of the outstanding principal balance of Loans and Letter of Credit
Outstandings to the aggregate Market Value of all Borrowing Base Collateral.
"Borrowing Base Pledged Mortgage Loan" shall mean each
Qualified Mortgage Loan that is included in the Borrowing Base.
"Borrowing Base Property" shall mean each Qualified Property
that is included in the Borrowing Base.
"Business Day" shall mean (i) for all purposes other than
as covered by clause (ii) below, any day except Saturday, Sunday and any day
which shall be in New York City a legal holiday or a day on which banking
institutions are authorized or required by law or other government action to
close and (ii) with respect to all notices and determinations in connection
with, and payments of principal and interest on, Eurodollar Loans, any day
which is a Business Day described in clause (i) above and which is also a day
for trading by and between banks in the New York interbank Eurodollar market.
"Calculation Period" shall mean the period of four
consecutive fiscal quarters last ended before the date of the respective event
or incurrence which requires calculations to be made on a Pro Forma Basis.
"Capital Expenditures" shall mean, with respect to any
Person, all expenditures by such Person which should be capitalized in
accordance with generally accepted accounting principles and, without
duplication, the amount of Capitalized Lease Obligations incurred by such
Person.
"Capitalized Lease Obligations" shall mean, with respect to
any Person, all rental obligations of such Person which, under generally
accepted accounting principles, are or will be required to be capitalized on
the books of such Person, in each case taken at the amount thereof accounted
for as indebtedness in accordance with such principles.
"Cash Equivalents" shall mean (i) securities issued or
directly and fully guaranteed or insured by the United States of America or
any agency or instrumentality thereof (provided that the full faith and credit
of the United States of America is pledged in support thereof) having
maturities of not more than six months from the date of acquisition, (ii) U.S.
dollar denominated time deposits, certificates of deposit and bankers
acceptances of (x) any Bank or (y) any bank whose short-term commercial paper
rating from S&P is at least A-1 or the equivalent thereof or from Moody's is
at least P-1 or the equivalent thereof (any such bank or Bank, an "Approved
Bank"), in each case with maturities of not more than six months from the date
of acquisition, (iii) commercial paper issued by any Approved Bank or by the
parent company of any Approved Bank and commercial paper issued by, or
guaranteed by, any industrial or financial company with a short-term
commercial paper rating of at least A-1 or the equivalent thereof by S&P or at
least P-1 or the equivalent thereof by Moody's, or guaranteed by any
industrial company with a long term unsecured debt rating of at least A or A2,
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or the equivalent of each thereof, from S&P or Moody's, as the case may be,
and in each case maturing within six months after the date of acquisition,
(iv) marketable direct obligations issued by the District of Columbia or any
state of the United States of America or any political subdivision of any such
state or any public instrumentality thereof maturing within six months from
the date of acquisition thereof and, at the time of acquisition, having one of
the two highest ratings obtainable from either S&P or Moody's and (v)
investments in money market funds substantially all the assets of which are
comprised of securities of the types described in clauses (i) through (iv)
above.
"Casualty Event" shall mean any loss, physical destruction,
damage or similar event with respect to any Borrowing Base Property or any
Mortgage Loan Property securing a Borrowing Base Pledged Mortgage Loan (or, in
either case, any portion thereof).
"CERCLA" shall mean the Comprehensive Environmental
Response, Compensation, and Liability Act of 1980, as the same may be amended
from time to time, 42 U.S.CA. ss. 9601 et seq.
"Change of Control" shall mean (i) any Person or "group"
(within the meaning of rules 13d-3 or 13d-5 under the Exchange Act (as in
effect on the Effective Date)) shall (A) have acquired beneficial ownership of
25% or more on a fully diluted basis of the voting and/or economic interest in
the capital stock of the REIT or (B) have obtained power (whether or not
exercised) to elect a majority of the trustees of the REIT, (ii) the Board of
Trustees of the REIT shall cease to consist of a majority of Continuing
Trustees or (iii) the failure of the REIT or a wholly-owned Subsidiary of the
REIT to be the sole general partner of the Borrower.
"Claims" shall have the meaning provided in the definition
of "Environmental Claims."
"Code" shall mean the Internal Revenue Code of 1986, as
amended from time to time, and the regulations promulgated thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement, and to any subsequent provision of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
"Collateral" shall mean all property (whether real or
personal) with respect to which any security interests have been granted (or
purported to be granted) pursuant to any Security Document, including, without
limitation, all Pledge Agreement Collateral, all Pledge and Security Agreement
Collateral, all Security Agreement Collateral and all Borrowing Base
Collateral.
"Collateral Agent" shall mean the Administrative Agent
acting as collateral agent for the Secured Creditors pursuant to the Security
Documents.
"Collateral Assignment" shall mean each Assignment of
Mortgage and Pledge Agreement required to be delivered pursuant to the terms
of this Agreement, substantially in the form of Exhibit K annexed hereto.
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"Commitment" shall mean, for each Bank, the amount set forth
opposite such Bank's name in Schedule I directly below the column entitled
"Commitment," as same may be (x) reduced from time to time pursuant to
Sections 2.02, 2.03 and/or 9 or (y) adjusted from time to time as a result of
assignments to or from such Bank pursuant to Section 12.04(b).
"Completion Certificate" shall mean a certificate of an
architect or engineer substantially in the form of Exhibit R, delivered to the
Administrative Agent pursuant to Section 7.16(f).
"CON" shall have the meaning set forth in Section 6.14(b).
"Condemnation Proceeds" shall mean all compensation, awards,
damages, rights of action and proceeds awarded to any Credit Party or any of
its Subsidiaries by reason of any Taking at a Borrowing Base Property.
"Consolidated EBIT" shall mean, for any period, Consolidated
Net Income for such period before Consolidated Interest Expense and provision
for taxes for such period and without giving effect (x) to any extraordinary
gains or losses and (y) to any gains or losses from sales of assets other than
from sales of inventory sold in the ordinary course of business.
"Consolidated EBITDA" shall mean, for any period,
Consolidated EBIT for such period, adjusted by adding thereto the amount of
all amortization of intangibles and depreciation that were deducted in
arriving at Consolidated EBIT for such period.
"Consolidated Indebtedness" shall mean, at any time, the
principal amount of all Indebtedness of the REIT and its Subsidiaries at such
time as determined on a consolidated basis.
"Consolidated Interest Expense" shall mean, for any period,
the total consolidated interest expense of the REIT and its Subsidiaries for
such period (calculated without regard to any limitations on the payment
thereof) plus, without duplication, that portion of Capitalized Lease
Obligations of the REIT and its Subsidiaries representing the interest factor
for such period, provided that the amortization of deferred financing, legal
and accounting costs with respect to the IPO shall be excluded from
Consolidated Interest Expense to the extent same would otherwise have been
included therein.
"Consolidated Net Income" shall mean, for any period, the
net income (or loss) of the REIT and its Subsidiaries for such period,
determined on a consolidated basis (after any deduction for minority
interests), provided that in determining Consolidated Net Income, (i) the net
income of any other Person which is not a Subsidiary of the REIT or is
accounted for by the REIT by the equity method of accounting shall be included
only to the extent of the payment of cash dividends or distributions by such
other Person to the REIT or a Subsidiary thereof during such period, (ii) the
net income (or loss) of any other Person acquired by such specified Person or
a Subsidiary of such Person in a pooling of interests transaction for any
period prior to the date of such acquisition shall be excluded and (iii) the
net income of any Subsidiary of the Borrower shall be excluded to the extent
that the declaration or payment of dividends or similar distributions by that
86
Subsidiary of its income is not at the time permitted by operation of the
terms of its charter or any agreement, instrument or law applicable to such
Subsidiary.
"Contingent Obligation" shall mean, as to any Person, any
obligation of such Person as a result of such Person being a general partner
of the other Person, unless the underlying obligation is expressly made
non-recourse as to such general partner, and any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (i) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (ii) to advance or supply funds (x) for the
purchase or payment of any such primary obligation or (y) to maintain working
capital or equity capital of the primary obligor or otherwise to maintain the
net worth or solvency of the primary obligor, (iii) to purchase property,
securities or services primarily for the purpose of assuring the owner of any
such primary obligation of the ability of the primary obligor to make payment
of such primary obligation or (iv) otherwise to assure or hold harmless the
holder of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to
the stated or determinable amount of the primary obligation in respect of
which such Contingent Obligation is made or, if not stated or determinable,
the maximum reasonably anticipated liability in respect thereof (assuming such
Person is required to perform thereunder) as determined by such Person in good
faith.
"Continuing Trustees" shall mean the Trustees of the REIT on
the Effective Date and each other Trustee, if such other Trustee's nomination
for election to the Board of Trustees of the REIT is recommended by a majority
of the then Continuing Trustees or is recommended by a committee of the Board
of Trustees a majority of which is composed of the then Continuing Trustees.
"Control Agreements" shall mean Control Agreements in the
form of Annex D to the Pledge and Security Agreement.
"Credit Documents" shall mean this Agreement and, after the
execution and delivery thereof pursuant to the terms of this Agreement, each
Note, each Security Document and each Guaranty.
"Credit Parties" shall mean the REIT, the Borrower and each
Subsidiary Guarantor.
"Creditors" shall mean and include the Administrative Agent,
the Collateral Agent, the Issuing Bank, each Bank and each Person (other than
any Credit Party) party to an Interest Rate Protection Agreement or Other
Hedging Agreement to the extent such Person constitutes a Secured Creditor
under the Security Documents.
"DB" shall mean Deutsche Bank AG, New York Branch.
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"Debt Agreements" shall have the meaning provided in Section
4.05.
"Default" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"Defaulting Bank" shall mean any Bank with respect to which
a Bank Default is in effect.
"Determination Date" shall have the meaning provided in the
definition of "Pro Forma Basis."
"Dividends" with respect to any Person shall mean that such
Person has declared or paid a dividend or returned any equity capital to its
shareholders, partners or members or authorized or made any other
distribution, payment or delivery of property (other than common stock, common
shares of beneficial interest or other common equity interests of such Person)
or cash to its shareholders, partners or members as such, or redeemed,
retired, purchased or otherwise acquired, directly or indirectly, for a
consideration any shares of any class of its capital stock, shares of
beneficial interest or any other equity interests outstanding on or after the
Effective Date (or any options or warrants issued by such Person with respect
to its capital stock, shares of beneficial interest or other equity interest),
or set aside any funds for any of the foregoing purposes, or shall have
permitted any of its Subsidiaries to purchase or otherwise acquire for
consideration any shares of any class of the capital stock, shares of
beneficial interest or any partnership or member interests of such Person
outstanding on or after the Effective Date (or any options or warrants issued
by such Person with respect to its capital stock, shares of beneficial
interest or other equity interest). Without limiting the foregoing,
"Dividends" with respect to any Person shall also include all payments made or
required to be made by such Person with respect to any share appreciation
rights, plans, equity incentive or achievement plans or any similar plans or
setting aside of any funds for the foregoing purposes.
"DOL" shall mean the U.S. Department of Labor.
"Dollars" and the sign "$" shall each mean freely
transferable lawful money of the United States.
"Draw Fee" shall have the meaning provided in Section 2.01.
"Drawing" shall have the meaning provided under Section
1.17(b).
"Effective Date" shall have the meaning provided in Section
12.10.
"Eligible Guarantor" shall mean Genesis, Multicare, Senior
LifeChoice or another Person approved as such by the Required Banks.
"Eligible Transferee" shall mean and include a commercial
bank, financial institution, any fund that invests in bank loans or any other
"accredited investor" (as defined in Regulation D under the Securities Act).
88
"Engineering Report" shall have the meaning provided in
Section 7.11(viii).
"Environmental Claims" shall mean any and all
administrative, regulatory or judicial actions, suits, demands, demand
letters, claims, liens, notices of non-compliance or violation, investigations
or proceedings relating in any way to any Environmental Law (hereafter
"Claims") or any permit issued under any such law, including, without
limitation, (a) any and all Claims by governmental or regulatory authorities
for enforcement, cleanup, removal, response, remedial or other actions or
damages pursuant to any applicable Environmental Law, and (b) any and all
Claims by any third party seeking damages, contribution, indemnification, cost
recovery, compensation or injunctive relief resulting from Hazardous Materials
or arising from alleged injury to health, safety or the environment.
"Environmental Law" shall mean any applicable Federal,
state, foreign or local statute, law, rule, regulation, ordinance, code,
binding and enforceable guideline, binding and enforceable written policy and
rule of common law now or hereafter in effect and in each case as amended, and
any judicial or administrative interpretation thereof, including any judicial
or administrative order, consent decree or judgment relating to the
environment, Hazardous Materials or employee health or safety relating to
Hazardous Materials, including, without limitation, CERCLA; RCRA; the Federal
Water Pollution Control Act, 33 U.S.CA. ss. 2601 et seq.; the Clean Air Act,
42 U.S.CA. ss. 7401 et seq.; the Safe Drinking Water Act, 42 U.S.CA. ss. 3803
et seq.; the Oil Pollution Act of 1990, 33 U.S.CA. ss. 2701 et seq.; the
Emergency Planning and the Community Right-to-Know Act of 1986, 42 U.S.CA. ss.
11001 et seq.; the Hazardous Material Transportation Act, 49 U.S.CA. ss. 1801
et seq.; the Occupational Safety and Health Act, 29 U.S.CA. ss. 651 et seq.
(to the extent it regulates occupational exposure to Hazardous Materials); and
any state and local or foreign counterparts or equivalents, in each case as
amended from time to time.
"Environmental Report" shall have the meaning provided in
Section 7.11(vii).
"Equity Value" shall mean, as of any calculation date, (x)
the current share price of common stock in the REIT, multiplied by (y) the
number of shares of common stock in the REIT then outstanding.
"ERISA" shall mean the Employee Retirement Income Security
Act of 1974, as amended from time to time, and the regulations promulgated and
rulings issued thereunder. Section references to ERISA are to ERISA, as in
effect at the date of this Agreement and any subsequent provisions of ERISA,
amendatory thereof, supplemental thereto or substituted therefor.
"ERISA Affiliate" shall mean each person (as defined in
Section 3(9) of ERISA) which together with the REIT or any Subsidiary of the
REIT would be deemed to be a "single employer" within the meaning of Section
414(b),(c), (m) or (o) of the Code.
"Eurodollar Loan" shall mean each Loan designated as such by
the Borrower at the time of the incurrence thereof or conversion thereto.
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"Eurodollar Rate" shall mean (i) the rate determined by the
Administrative Agent to be the arithmetic mean (rounded to the nearest 1/100
of 1%) of the offered rates for deposits in Dollars for the applicable
Interest Period (or the period closest to such applicable Interest Period)
which appear on Telerate Screen 3740 or 3750 with maturities comparable to
such Interest Period, determined as of 10:00 A.M. (London time) on the date
which is two Business Days prior to the commencement of such Interest Period
divided (and rounded upward to the next whole multiple of 1/16 of 1%) by (ii)
a percentage equal to 100% minus the then stated maximum rate of all reserve
requirements (including, without limitation, any marginal, emergency,
supplemental, special or other reserves) applicable to any member bank of the
Federal Reserve System in respect of Eurocurrency liabilities as defined in
Regulation D (or any successor category of liabilities under Regulation D).
"Event of Default" shall have the meaning provided in
Section 9.
"Exchange Act" shall mean the Securities Exchange Act of
1934, as amended, and the rules and regulations promulgated thereunder.
"Excluded Subsidiaries" shall mean (i) ET Sub-Riverview
Ridge Limited Partnership, L.L.P., (ii) ET Sub-Highgate, L.P., (iii) ET
Sub-Woodbridge, L.P., (iv) ET Sub-Belvedere Limited Partnership, L.L.P., (v)
ET Sub-Lacey I, L.L.C., (vi) ET Sub-Willowbrook Limited Partnership, L.L.P.,
and (vii) ET Sub-Phillipsburg I Limited Partnership, L.L.P.
"Excusable Delay" shall mean a delay due to acts of God,
governmental restrictions, enemy actions, war, civil commotion, fire,
casualty, strikes, shortages of supplies or labor, work stoppages or other
causes beyond the reasonable control of the REIT, any of its Subsidiaries or
any Operating Lessee or Manager, but lack of funds shall not be deemed a cause
beyond such reasonable control.
"Existing Indebtedness" shall have the meaning provided in
Section 6.22.
"Extension Request" shall have the meaning provided in
Section 2.03(b).
"Federal Funds Rate" shall mean, for any day, the rate per
annum (rounded upward, if necessary, to the nearest 1/100th of 1%) equal to
the weighted average of the rates on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on
such day, as published by the Federal Reserve Bank of New York on the Business
Day next succeeding such day, provided that (i) if such day is not a Business
Day, the Federal Funds Rate for such day shall be such rate on such
transactions on the next preceding Business Day as so published on the next
succeeding Business Day, and (ii) if no such rate is so published on such next
succeeding Business Day, the Federal Funds Rate for such day shall be the
average rate quoted to the Administrative Agent on such day on such
transactions as determined by the Administrative Agent.
"Fees" shall mean all amounts payable pursuant to or
referred to in Section 2.01.
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"FF&E" shall mean, with respect to any Property, any
furniture, fixtures and equipment, including any beds, lamps, bedding, tables,
chairs, sofas, curtains, carpeting, smoke detectors, mini bars, paintings,
decorations, televisions, telephones, radios, desks, dressers, towels,
bathroom equipment, heating, cooling, lighting, laundry, incinerating,
loading, swimming pool, landscaping, garage and power equipment, machinery,
engines, vehicles, fire prevention, refrigerating, ventilating and
communications apparatus, carts, dollies, elevators, escalators, kitchen
appliances, restaurant equipment, computers, reservation systems, software,
cash registers, switchboards, cleaning equipment or other items of furniture,
fixtures and equipment typically used in senior living care facilities
(including furniture, fixtures and equipment used in patient rooms, lobbies
and common areas (other than those items of furniture, fixtures and equipment
owned by the occupant or tenant in any such room)).
"GAAP" shall have the meaning provided in Section 12.07(a).
"GACC" shall mean German American Capital Corporation in its
individual capacity.
"Genesis" shall mean Genesis Health Ventures, Inc.
"Governmental Authority" shall mean any court, board,
agency, commission, office or authority of any nature whatsoever for any
governmental unit (federal, state, county, district, municipal, city or
otherwise) whether now or hereafter in existence.
"Guaranteed Obligations" shall mean the full and prompt
payment when due (whether at the stated maturity, by acceleration or
otherwise) of the principal of, and interest on each Note issued by, and all
Loans made to, the Borrower under this Agreement and all reimbursement
obligations and Unpaid Drawings with respect to Letters of Credit, together
with all the other obligations and liabilities (including, without limitation,
indemnities, expenses, fees and interest thereon) of the Borrower to the
Creditors now existing or hereafter incurred under, arising out of or in
connection with this Agreement or any other Credit Document and the due
performance and compliance with all the terms, conditions and agreements
contained in the Credit Documents by the Borrower.
"Guarantor" shall mean the REIT and each Subsidiary
Guarantor.
"Guaranty" shall mean the Parent Guaranty and the
Subsidiaries Guaranty.
"Hazardous Materials" shall mean (a) any petrochemical or
petroleum products, radioactive materials, asbestos in any form that is or
could become friable, urea formaldehyde foam insulation, transformers or other
equipment that contain dielectric fluid containing levels of polychlorinated
biphenyls, and radon gas; and (b) any chemicals, materials or substances
defined as or included in the definition of "hazardous substances," "hazardous
wastes," "hazardous materials," "restricted hazardous materials," "extremely
hazardous wastes," "restrictive hazardous wastes," "toxic substances," "toxic
pollutants," "contaminants" or "pollutants," or words of similar meaning and
regulatory effect under any applicable Environmental Law.
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"Improvements" shall mean all buildings, structures,
fixtures, tenant improvements and other improvements of every kind and
description now or hereafter located in or on or attached to any Real
Property, including all building materials, water, sanitary and storm sewers,
drainage, electricity, steam, gas, telephone and other utility facilities,
parking areas, roads, driveways, walks and other site improvements; and all
additions and betterments thereto and all renewals, substitutions and
replacements thereof.
"Indebtedness" shall mean, as to any Person, without
duplication, (i) all indebtedness (including principal, interest, fees and
charges) of such Person for borrowed money or for the deferred purchase price
of property or services, (ii) the maximum amount available to be drawn under
all letters of credit issued for the account of such Person and all unpaid
drawings in respect of such letters of credit, (iii) all Indebtedness of the
types described in clause (i), (ii), (iv), (v), (vi) or (vii) of this
definition secured by any Lien on any property owned by such Person, whether
or not such Indebtedness has been assumed by such Person (but if not assumed,
then the amount of such Indebtedness shall be deemed to be the lesser of (x)
the fair market value of the property of such Person subject to such Lien and
(y) the amount of such Indebtedness (including principal, interest, fees and
charges)) (iv) the aggregate amount required to be capitalized under leases
under which such Person is the lessee, (v) all obligations of such Person to
pay a specified purchase price for goods or services, whether or not delivered
or accepted, i.e., take-or-pay and similar obligations, (vi) all Contingent
Obligations of such Person, and (vii) all obligations under any Interest Rate
Protection Agreement or Other Hedging Agreement or under any similar type of
agreement or arrangement.
"Information Package" shall mean, with respect to each
Borrowing Base Property and each Borrowing Base Pledged Mortgage Loan (and the
related Mortgage Loan Property), an information package consisting of (i) a
description of such Borrowing Base Property or Borrowing Base Pledged Mortgage
Loan (and the related Mortgage Loan Property), (ii) if available, management's
discussion and analysis of such Borrowing Base Property or Borrowing Base
Pledged Mortgage Loan (and the related Mortgage Loan Property), and discussing
any improvements or changes to be made with respect thereto, (iii) if and to
the extent the relevant Borrowing Base Property or Mortgage Loan Property
securing a Borrowing Base Pledged Mortgage Loan has been operational,
historical financial information (which may be unaudited) for such Borrowing
Base Property or Borrowing Base Pledged Mortgage Loan (and the related
Mortgage Loan Property) for at least the two full fiscal years most recently
ended and the latest 12-month period ended with the last day of the fiscal
quarter last ended (or such shorter period during which the related Property
or Mortgage Loan Property has been operational), (iv) projections for such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan (and the
related Mortgage Loan Property) for the succeeding four years, (v) any
investment memorandum prepared or used in connection with the acquisition of
such Borrowing Base Property or the provision or purchase of such Borrowing
Base Pledged Mortgage Loan and (vi) any other information which the Borrower
determines should be furnished so that the Information Package for such
Borrowing Base Property or Borrowing Base Pledged Mortgage Loan is true and
correct in all material respects and is not incomplete by omitting to state
any fact necessary to make the information (taken as a whole) contained
therein not misleading in any material respect.
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"Initial Borrowing Base Pledged Mortgage Loan" shall mean
each Borrowing Base Pledged Mortgage Loan added to the Borrowing Base on the
Effective Date and identified as such on Schedule VIII.
"Initial Borrowing Base Property" shall mean each Borrowing
Base Property added to the Borrowing Base on the Effective Date and identified
as such on Schedule III.
"Insurance Proceeds" shall mean all insurance proceeds,
damages, claims and rights of action and the right thereto under any insurance
policies relating to any portion of any Borrowing Base Property.
"Intercompany Note" shall mean a promissory note in the form
of Exhibit Q (appropriately completed).
"Interest Determination Date" shall mean, with respect to
any Eurodollar Loan, the second Business Day prior to the commencement of any
Interest Period relating to such Eurodollar Loan.
"Interest Period" shall have the meaning provided in Section
1.09.
"Interest Rate Protection Agreement" shall mean any interest
rate swap agreement, interest rate cap agreement, interest rate collar
agreement, interest rate hedging agreement, interest rate floor agreement or
other similar agreement or arrangement provided by a Bank.
"Investment" shall have the meaning provided in Section 8.05.
"IPO" shall mean the initial public offering of ElderTrust,
to be consummated substantially on the terms described in the Registration
Statement, and otherwise in a manner reasonably satisfactory to the
Administrative Agent.
"Issuing Bank" shall have the meaning provided in the first
paragraph of this Agreement.
"L/C Supportable Obligations" shall mean (i) obligations of
the REIT, the Borrower or any Subsidiary incurred in the ordinary course of
business with respect to insurance obligations and workers' compensation,
surety bonds and other similar statutory obligations, (ii) earnest money or
performance obligations in respect of acquisitions permitted pursuant to the
terms of this Agreement and (iii) such other obligations of the REIT, the
Borrower or any Subsidiary as are permitted to exist pursuant to the terms of
this Agreement.
"Leasehold" of any Person shall mean all of the right, title
and interest of such Person as lessee or licensee in, to and under any lease
or license of land, improvements and/or fixtures.
"Legal Requirements" shall mean, with respect to each
Property and each Mortgage Loan Property, all federal, state, county,
municipal and other governmental statutes, laws, rules, orders, regulations,
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ordinances, judgments, decrees and injunctions of Governmental Authorities
(including, without limitation, Environmental Laws) affecting such Property or
Mortgage Loan Property (or any part thereof) or the construction, use,
alteration or operation thereof, whether now or hereafter enacted and in
force, and all permits, licenses, authorizations and regulations relating
thereto, and all covenants, agreements, restrictions and encumbrances
contained in any instruments, either of record or known to the REIT or the
Borrower, affecting such Property or Mortgage Loan Property (or any part
thereof), including, without limitation, any such covenants, agreements,
restrictions and encumbrances which may (i) require repairs, modifications or
alterations in or to such Property or Mortgage Loan Property (or any part
thereof), or (ii) in any material way limit the existing use and enjoyment
thereof.
"Letter of Credit" shall have the meaning provided in
Section 1.13.
"Letter of Credit Outstandings" shall mean, at any time, the
sum of the Stated Amount of all Outstanding Letters of Credit and the amount
of all Unpaid Drawings.
"Letter of Credit Request" shall have the meaning provided
in Section 1.15.
"Lien" shall mean any mortgage, pledge, hypothecation,
assignment, deposit arrangement, encumbrance, lien (statutory or other) or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing or similar statement or notice filed under
the UCC or any other similar recording or notice statute, and any lease having
substantially the same effect as any of the foregoing).
"Limited Liability Company Interest" shall have the meaning
provided in the Pledge and Security Agreement.
"Loan" shall have the meaning provided in Section 1.01.
"Loan Percentage" of any Bank at any time shall mean a
fraction (expressed as a percentage) the numerator of which is the Commitment
of such Bank or such time and the denominator of which is the Total Commitment
at such time, provided that if the Loan Percentage of any Bank is to be
determined after the Total Commitment has been terminated, then the Loan
Percentages of the Banks shall be determined immediately prior (and without
giving effect to) such termination.
"Management Agreement" shall mean (i) in the case of a
Borrowing Base Property that is subject to an Operating Lease, the management
agreement (if any) between the Operating Lessee and a property manager, which
management agreement and manager shall be satisfactory to the Administrative
Agent, or (ii) in the case of a Borrowing Base Property that is not subject to
an Operating Lease, the management agreement between the Borrower or the
Subsidiary Guarantor owning such Borrowing Base Property and a property
manager, which management agreement and manager shall be satisfactory to the
Administrative Agent. Except for the Specified Management Agreements, each
Management Agreement in the nature of that described in clause (i) of the
preceding sentence shall by its terms terminate upon any termination or
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expiration of the related Operating Lease, and each Management Agreement in
the nature of that described in clause (ii) of the preceding sentence shall be
expressly subordinate to the Mortgage encumbering the related Borrowing Base
Property.
"Manager" shall mean a property manager under a Management
Agreement.
"Margin Stock" shall have the meaning provided in Regulation
U.
"Market Value" shall mean, with respect to any Borrowing
Base Collateral at any time, the Administrative Agent's estimate of the
current market value of such Borrowing Base Collateral based upon such method
of analysis as the Administrative Agent shall determine to be reasonable in
its sole discretion; provided, however, that (i) with respect to a Borrowing
Base Property, the Market Value thereof shall not be deemed at any time to
exceed the lesser of (x) the Appraised Value of such Borrowing Base Property
and (y) the purchase price (valued in Dollars) paid by the applicable Credit
Party to acquire such Borrowing Base Property, (ii) with respect to a
Borrowing Base Pledged Mortgage Loan that is not a construction loan, the
Market Value thereof shall not at any time be deemed to exceed the lesser of
(x) the Appraised Value of the Mortgage Loan Property securing such Borrowing
Base Pledged Mortgage Loan and (y) the outstanding principal balance of such
Borrowing Base Pledged Mortgage Loan, and (iii) with respect to a Borrowing
Base Pledged Mortgage Loan that is a construction loan, the Market Value
thereof shall not at any time be deemed to exceed the maximum principal
balance of such Borrowing Base Pledged Mortgage Loan. Whenever a Market Value
determination is required hereunder, the Borrower and its Subsidiaries shall
cooperate with the Administrative Agent in connection with its determination
of such Market Value, including providing all information and documentation
relating thereto reasonably requested by the Administrative Agent.
"Maturity Date" shall have the meaning provided in Section
2.03(b).
"Minimum Borrowing Amount" shall mean $2,000,000.
"Moody's" shall mean Moody's Investors Service, Inc.
"Mortgage" shall mean each mortgage, deed of trust or deed
to secure debt required to be delivered pursuant to the terms of this
Agreement, together with any assignment of leases and rents to be executed in
connection therewith, substantially in the form of Exhibit I annexed hereto.
"Mortgage Loan" shall mean each loan provided or purchased
by the Borrower or one of its Subsidiaries that is secured by a senior living
care property or medical office building (including the furniture, fixtures
and equipment thereon, except for any furniture, fixtures and equipment which
are owned by individual tenants).
"Mortgage Loan Property" shall mean the senior living care
property or medical office building (including the furniture, fixtures and
equipment thereon, except for any furniture, fixtures and equipment which are
owned by individual tenants) securing a Mortgage Loan.
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"Mortgage Policy" shall mean each mortgage title insurance
policy (and all endorsements thereto) required to be delivered pursuant to
this Agreement.
"Multicare" shall mean The Multicare Companies, Inc.
"Multiemployer Plan" shall mean a Plan which is a
multiemployer plan as defined in Section 4001(a)(3) of ERISA subject to Title
IV of ERISA.
"Net Insurance/Condemnation Proceeds" shall mean all
Insurance proceeds on account of any Casualty Event at any Borrowing Base
Property or all Condemnation Proceeds in respect of any Taking of any
Borrowing Base Property, minus the reasonable cost, if any, of recovering such
proceeds and of paying out such proceeds, including reasonable attorneys' fees
and costs allocable to inspecting the Work and the plans and specifications
therefor.
"Non-Defaulting Bank" shall mean and include each Bank other
than a Defaulting Bank.
"Note" shall have the meaning provided in Section 1.05(a).
"Notice of Borrowing" shall have the meaning provided in
Section 1.03(a).
"Notice of Conversion" shall have the meaning provided in
Section 1.06.
"Notice of Renovation/Restoration" shall mean a notice,
substantially in the form of Exhibit S, delivered to the Administrative Agent
pursuant to Sections 7.16(a) and (c).
"Notice Office" shall mean the office of the Administrative
Agent located at 31 West 52nd Street, New York, New York 10019, Attention:
Allison Michaels, or such other office as the Administrative Agent may
hereafter designate in writing as such to the other parties hereto.
"Obligations" shall mean all amounts owing to the
Administrative Agent, the Collateral Agent, the Issuing Bank or any Bank
pursuant to the terms of this Agreement or any other Credit Document.
"Operating Lease" shall mean a lease or sublease relating to
all or substantially all of any Borrowing Base Property between the Borrower
or any Subsidiary Guarantor, as lessor, and an Operating Lessee, as lessee,
which Operating Lease shall be substantially in the form approved by, or
otherwise satisfactory to, the Administrative Agent.
"Operating Lessee" shall mean a lessee under an Operating
Lease satisfactory to the Administrative Agent.
"Original Lender" shall have the meaning provided in Section
7.18.
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"Other Hedging Agreements" shall mean any foreign exchange
contracts, currency swap agreements, commodity agreements or other similar
agreements or arrangements designed to protect against the fluctuations in
currency values and that are provided by a Bank.
"Parent Guarantor" shall mean the REIT.
"Parent Guaranty" shall mean the guaranty of the Parent
Guarantor pursuant to Section 13.
"Participant" shall have the meaning provided in Section
1.16(a).
"Partnership Interest" shall have the meaning provided in
the Pledge and Security Agreement.
"Payment Office" shall mean the office of the Administrative
Agent located at 31 West 52nd Street, New York, New York 10019, or such other
office as the Administrative Agent may hereafter designate in writing as such
to the other parties hereto.
"PBGC" shall mean the Pension Benefit Guaranty Corporation
established pursuant to Section 4002 of ERISA, or any successor thereto.
"Permitted Encumbrances" shall mean, with respect to any
Borrowing Base Property, such exceptions to title as are set forth in the
Mortgage Policy or title commitment delivered with respect thereto, all of
which exceptions must be acceptable to the Administrative Agent in its
reasonable discretion.
"Permitted Liens" shall have the meaning provided in Section
8.01.
"Permitted Non-Recourse Indebtedness" shall mean, with
respect to any Specified Subsidiary, Indebtedness incurred by such Specified
Subsidiary pursuant to Section 8.04(viii) to (x) finance the purchase of (or
assumed at the time of the purchase of) or to finance the renovation of a
Property acquired pursuant to Section 8.02(ix) or (y) to finance the provision
or purchase of a Mortgage Loan pursuant to Section 8.02(ix), which
Indebtedness (i) shall be secured only by such Property or Mortgage Loan, as
the case may be, (ii) shall be made expressly non-recourse to the REIT, the
Borrower and its other Subsidiaries and (iii) shall have (A) a maturity date
of at least two years beyond the Maturity Date, (B) an amortization schedule,
if any, based upon a schedule of no less than 20 years and (C) a market rate
of interest.
"Person" shall mean any individual, partnership, limited
liability company, joint venture, firm, corporation, association, trust or
other enterprise or any government or political subdivision or any agency,
department or instrumentality thereof.
"Plan" shall mean any pension plan as defined in Section
3(2) of ERISA, which is maintained or contributed to by (or to which there is
an obligation to contribute of) the REIT or any of its Subsidiaries or ERISA
Affiliates, and each such plan for the five-year period immediately following
the latest date on which the REIT or any of its Subsidiaries or ERISA
Affiliates maintained, contributed to or had an obligation to contribute to
such plan.
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"Pledge Agreement" shall have the meaning provided in
Section 4.06.
"Pledge Agreement Collateral" shall mean all "Collateral" as
defined in the Pledge Agreement.
"Pledge and Security Agreement" shall have the meaning
provided in Section 4.07.
"Pledge and Security Agreement Collateral" shall mean all
"Collateral" as defined in the Pledge and Security Agreement.
"Pledged Entity Notices" shall mean Partnership/Limited
Liability Company Notices in the form of Annex C to the Pledge and Security
Agreement.
"Pledged Limited Liability Company" shall have the meaning
provided in the Pledge and Security Agreement.
"Pledged Mortgage Loan Documents" shall mean and include all
documents evidencing and securing a Borrowing Base Pledged Mortgage Loan,
including, without limitation, (i) the mortgage note, (ii) the mortgage, deed
of trust, deed to secure debt or other similar instrument, (iii) the
assignment of leases, if any, (iv) the loan agreement, if any, (v) the
mortgagee title insurance policy relating thereto, and (v) the related
Borrowing Base Guaranty.
"Pledged Partnership Entity" shall have the meaning provided
in the Pledge and Security Agreement.
"Pledged Securities" shall have the meaning provided in the
Pledge Agreement.
"Pledged Stock" shall have the meaning provided in the
Pledge Agreement.
"Prime Lending Rate" shall mean the rate which DB announces
from time to time as its prime lending rate, the Prime Lending Rate to change
when and as such prime lending rate changes. The Prime Lending Rate is a
reference rate and does not necessarily represent the lowest or best rate
actually charged to any customer. DB may make commercial loans or other loans
at rates of interest at, above or below the Prime Lending Rate.
"Pro Forma Basis" shall mean, with respect to any incurrence
of Indebtedness or acquisition of a Property or a Mortgage Loan (or the equity
interest of the Person or Persons owning such Property or Mortgage Loan), the
calculation of the consolidated results of the Borrower and its Subsidiaries
otherwise determined in accordance with this Agreement as if the respective
Indebtedness or acquisition (and all other Indebtedness incurred or other such
acquisition effected during the respective Calculation Period or thereafter
and on or prior to the date of determination) (each such date, a
"Determination Date") had been effected on the first day of the respective
Calculation Period; provided that all such calculations shall take into
account the following assumptions:
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(i) pro forma effect shall be given to (1) any Indebtedness
incurred subsequent to the end of the Calculation Period and prior to the date
of determination, (2) any Indebtedness incurred during such period to the
extent such Indebtedness is outstanding at the date of determination and (3)
any Indebtedness to be incurred on the date of determination, in each case as
if such Indebtedness had been incurred on the first day of such Calculation
Period and after giving effect to the application of the proceeds thereof;
(ii) with respect to each Property or Mortgage Loan acquired
within one year before the respective Determination Date, and in addition to
any Indebtedness actually incurred and required to be included pursuant to the
other clauses of this definition, it shall be assumed (unless the respective
Property or Mortgage Loan has been sold) either (A) that Loans in an amount
equal to the remainder of (x) the aggregate amount of costs specified with
respect to such Property or Mortgage Loan in the respective officer's
certificate delivered pursuant to Section 7.11(xiii) (including as said
Section is incorporated by reference in Section 4.13) less (y) the amount of
Loans theretofore actually incurred for such purposes on and after the date of
the respective acquisition of such Property or Mortgage Loan, had also been
incurred and were outstanding from the first day of the respective Calculation
Period or (ii) that Capital Expenditures had been made under Section 8.07 in
the amount of Loans referred to in the preceding clause (i) during such period
(and that such Capital Expenditures were not funded with Indebtedness), with
the Borrower to indicate which assumption it has used in making such
calculations;
(iii) interest expense attributable to interest on any
Indebtedness (whether existing or being incurred) bearing a floating interest
rate shall be computed as if the rate in effect on the date of computation
(taking into account any Interest Rate Protection Agreement applicable to such
Indebtedness if such Interest Rate Protection Agreement has a remaining term
in excess of 12 months) had been the applicable rate for the entire period;
(iv) except as provided in the preceding clause (ii), there
shall be excluded from interest expense any interest expense related to any
amount of Indebtedness that was outstanding during such Calculation Period or
thereafter but that is not outstanding or is to be permanently repaid on the
date of determination; and
(v) pro forma effect shall be given to all sales and
acquisitions of Properties and Mortgage Loans, including the capitalization of
the Borrower with the initial Properties and Mortgage Loans (by excluding or
including, as the case may be, the historical financial results for the
respective Properties and Mortgage Loans) that occur during such Calculation
Period or thereafter and on or prior to the Determination Date (including any
Indebtedness assumed or acquired in connection therewith) as if they had
occurred on the first day of such Calculation Period.
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"Projections" shall have the meaning provided in Section
6.05(d).
"Property" shall mean each senior living care property or
medical office building owned or ground leased by the Borrower or any of its
Subsidiaries (including the furniture, fixtures and equipment thereon, except
for any furniture, fixtures and equipment which are owned by individual
tenants).
"Qualified Mortgage Loan" shall mean any Mortgage Loan with
respect to which all of the requirements set forth in Sections 7.11 and
8.02(viii) have been satisfied (or waived by the Required Banks) in accordance
with the provisions of such Sections.
"Qualified Property" shall mean any Property with respect to
which all of the requirements set forth in Sections 7.11 and 8.02(viii) have
been satisfied (or waived by the Required Banks) in accordance with the
provisions of such Sections.
"RCRA" shall mean the Resource Conservation and Recovery
Act, as the same may be amended from time to time, 42 U.S.C.ss. 6901 et seq.
"Real Property" of any Person shall mean all the right,
title and interest of such Person in and to land, improvements and fixtures,
including Leaseholds.
"Register" shall have the meaning provided in Section 12.16.
"Registration Statement" shall mean the Form S-11
Registration Statement for the IPO filed with the SEC on October 8, 1997, as
amended.
"Regulation D" shall mean Regulation D of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof establishing reserve requirements.
"Regulation G" shall mean Regulation G of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation T" shall mean Regulation T of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation U" shall mean Regulation U of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"Regulation X" shall mean Regulation X of the Board of
Governors of the Federal Reserve System as from time to time in effect and any
successor to all or a portion thereof.
"REIT" shall have the meaning provided in the first
paragraph of this Agreement.
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"Release" shall mean any spilling, leaking, pumping,
pouring, emitting, emptying, discharging, injecting, escaping, leaching,
dumping, disposing or migration into the environment.
"Release Date" shall mean (i) with respect to a Borrowing
Base Property, (w) the date of any Special Mandatory Repayment Event with
respect thereto, (x) the date of any refinancing thereof or the date of any
sale or other disposition thereof, or (y) the date of any Casualty Event or
Taking with respect thereto if Restoration thereof is not permitted pursuant
to the Credit Documents, and (ii) with respect to a Borrowing Base Pledged
Mortgage Loan, (w) the date of any Special Mandatory Repayment Event with
respect thereto, (x) the date of any refinancing thereof or the date of any
sale or other disposition thereof, (y) the date of the occurrence of any event
of default under and as defined or described in the Pledged Mortgage Loan
Documents relating thereto, or (z) the date of any Casualty Event or Taking
with respect to the related Mortgage Loan Property.
"Release Price" shall mean, with respect to any Borrowing
Base Property or any Borrowing Base Pledged Mortgage Loan, as of the related
Release Date, the amount that is the greater of:
(i) an amount equal to the Borrowing Base Amount with
respect to such Borrowing Base Property or Borrowing Base Pledged
Mortgage Loan; and
(ii) the amount necessary to ensure that the aggregate
principal amount of Loans outstanding shall not exceed the Borrowing
Base then in effect, after giving effect to the reduction in the
Borrowing Base as a result of the release from the Borrowing Base of
such Borrowing Base Property or Borrowing Base Pledged Mortgage Loan.
"Reportable Event" shall mean an event described in Section
4043(c) of ERISA with respect to a Single Employer Plan other than those
events as to which the 30-day notice period is waived under subsection .22,
.23, .25, .27 or .28 of PBGC Regulation Section 4043.
"Requested Extension Effective Date" shall have the meaning
provided in Section 2.03(b)(i).
"Required Banks" shall mean Non-Defaulting Banks the sum of
whose Commitments (or after the termination thereof, outstanding Loans and
Letter of Credit Outstandings) represent an amount greater than 50% of the
Total Commitment (less the Commitments of Defaulting Banks) (or after the
termination thereof, the then total outstanding Loans of Non-Defaulting Banks
and the aggregate Loan Percentages of all Non-Defaulting Banks of the total
Letter of Credit Outstandings at such time).
"Restoration" shall mean the repair, restoration (including
demolition), replacement and rebuilding of all or any portion of a Property
(or the Improvement thereof) following the destruction, damage, loss or Taking
thereof. The term "Restore" used as a verb has a corresponding meaning.
"Returns" shall have the meaning provided in Section 6.09.
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"S&P" shall mean Standard & Poor's Ratings Services.
"SEC" shall have the meaning provided in Section 7.01(h).
"Section 3.04(b)(ii) Certificate" shall have the meaning
provided in Section 3.04(b).
"Secured Creditors" shall have the meaning provided in the
respective Security Documents.
"Securities Act" shall mean the Securities Act of 1933, as
amended, and the rules and regulations promulgated thereunder.
"Security Agreement" shall have the meaning provided in
Section 4.07.
"Security Agreement Collateral" shall mean all "Collateral"
as defined in the Security Agreement.
"Security Documents" shall mean the Pledge Agreement, the
Pledge and Security Agreement, the Security Agreement, each of the Collateral
Assignments and each of the Mortgages.
"Senior LifeChoice" shall mean Senior LifeChoice, L.L.C.
"Single Employer Plan" shall have the meaning set forth in
Section 6.10.
"Special Mandatory Repayment Event" shall mean the
occurrence of any of the following in respect of a Borrowing Base Property or
a Borrowing Base Pledged Mortgage Loan (or the Mortgaged Property securing a
Borrowing Base Pledged Mortgage Loan): (i) except as otherwise permitted
pursuant to Section 7.13, any Management Agreement or any material provision
thereof shall cease to be in full force and effect or any party thereto shall
deny or disaffirm its material obligations thereunder or shall default in the
due performance or observance of any material term, covenant or agreement on
its part to be performed or observed pursuant thereto after the expiration of
any applicable cure period; (ii) except as otherwise permitted pursuant to
Section 7.13, any Operating Lease or any material provision thereof shall
cease to be in full force and effect or any party thereto shall deny or
disaffirm its material obligations thereunder or shall default in the due
performance or observance of any material term, covenant or agreement on its
part to be performed or observed pursuant thereto after the expiration of any
applicable cure period; (iii) any ground lease with respect to (x) any
Borrowing Base Property which is a Leasehold or (y) any Mortgage Loan Property
which is a Leasehold and which secures a Borrowing Base Pledged Mortgage Loan,
shall cease to be in full force and effect or any party thereto shall deny or
disaffirm any of its material obligations thereunder or shall default in the
due performance or observance of any material term, covenant or agreement on
its part to be performed or observed pursuant thereto after the expiration of
any applicable cure period; (iv) any Borrowing Base Guaranty that existed on
the Addition Date of, and related to, a Borrowing Base Property or a Borrowing
Base Pledged Mortgage Loan shall cease to be in full force or effect as to the
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Eligible Guarantor thereunder, or any Eligible Guarantor or Person acting by
or on behalf of such Eligible Guarantor shall deny or disaffirm such Eligible
Guarantor's obligations under the relevant Borrowing Base Guaranty, or any
Eligible Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed pursuant
to the relevant Borrowing Base Guaranty and such default shall continue beyond
any grace period specifically applicable thereto pursuant to the terms of such
Borrowing Base Guaranty; or (v) any breach by the REIT or any of its
Subsidiaries of the provisions of Section .7.13.
"Specified Loans" shall mean (i) an unsecured loan made by
the REIT to Edward B. Romanov, Jr. in the amount of the full purchase price of
200,000 shares of beneficial interest in the REIT at a purchase price per
share equal to the IPO purchase price for the purpose of purchasing such
shares; and (ii) a personal unsecured loan made by the REIT to D. Lee
McCreary, Jr. in the amount of not more than $25,000.
"Specified Management Agreements" shall mean the Management
Agreements relating to the Properties known as (i) Professional Office
Building I, (ii) the DCMH Building, (iii) Pennsburg Manor, and (iv) Harston
Hall.
"Specified Mortgage Loan" shall mean the Initial Borrowing
Base Pledged Mortgage Loan encumbering the Mortgaged Property known as
Sanatoga.
"Specified Subsidiary" shall mean any Subsidiary of the
Borrower (other than any Subsidiary Guarantor) so long as such Subsidiary has
no material assets other than the Property or Mortgage Loan to be financed
with Permitted Non-Recourse Indebtedness incurred (or assumed) pursuant to
Section 8.04(viii).
"Stated Amount" of each Letter of Credit shall mean, at any
time, the maximum amount available to be drawn thereunder (in each case
determined without regard to whether any conditions to drawing can then be
met).
"Subsidiary" shall mean, as to any Person, (i) any
corporation more than 50% of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of
such corporation (irrespective of whether or not at the time stock of any
class or classes of such corporation shall have or might have voting power by
reason of the happening of any contingency) is at the time owned by such
Person and/or one or more Subsidiaries of such Person and (ii) any
partnership, limited liability company, association, joint venture or other
entity in which such Person and/or one or more Subsidiaries of such Person has
more than a 50% equity interest at the time.
"Subsidiary Guarantor" shall mean each Subsidiary of the
Borrower that owns or leases a Borrowing Base Property and/or owns directly or
indirectly an equity interest in a Subsidiary that owns or leases a Borrowing
Base Property.
"Subsidiaries Guaranty" shall have the meaning provided in
Section 4.08.
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"Supermajority Banks" shall mean those Non-Defaulting Banks
which would constitute the Required Banks under, and as defined in, this
Agreement if the percentage "50%" contained therein were changed to "66-2/3%."
"Taking" shall mean the taking or appropriation (including
by deed in lieu of condemnation or by voluntary sale or transfer under threat
of condemnation or while legal proceedings for condemnation are pending) of
any Borrowing Base Property or any Mortgage Loan Property securing a Borrowing
Base Pledged Mortgage Loan, or, in either case, any part thereof or interest
therein, for public or quasi-public use under the power of eminent domain, by
reason of any public improvement or condemnation proceeding, or in any other
manner or any damage or injury or diminution in value through condemnation,
inverse condemnation or other exercise of the power of eminent domain. The
term "Taken" used as a verb has a correlative meaning.
"Tangible Net Worth" shall mean, as of any date of
determination, the consolidated net worth of the REIT and its Subsidiaries at
such time, determined in accordance with GAAP, less the amount of all
intangible items, including, without limitation, goodwill, franchises,
licenses, patents, trade marks, trade names, copyrights, service marks, brand
names, write-ups of assets and any unallocated excess costs of investments in
subsidiaries over equity in underlying net assets at dates of acquisition.
"Taxes" shall have the meaning provided in Section 3.04(a).
"Test Period" shall mean the four consecutive fiscal
quarters of the REIT then last ended, in each case taken as one accounting
period, provided that for purposes of making any financial covenant
calculation which includes periods prior to the Effective Date, such
calculation shall be done on a Pro Forma Basis, even though such period (or
portion thereof) had occurred prior to the Effective Date.
"Total Commitment" shall mean, at any time, the sum of the
Commitments of each of the Banks.
"Total Unutilized Commitment" shall mean, at any time, an
amount equal to the remainder of (x) the Total Commitment then in effect less
(y) the aggregate principal amount of Loans outstanding plus the then
aggregate amount of all Letter of Credit Outstandings.
"Treasury Regulation" shall mean regulations promulgated
under the Code.
"Type" shall mean the type of Loan determined with regard to
the interest option applicable thereto, i.e., whether a Base Rate Loan or a
Eurodollar Loan.
"UCC" shall mean the Uniform Commercial Code as from time to
time in effect in the relevant jurisdiction.
"Unfunded Current Liability" of any Plan shall mean the
amount, if any, by which the actuarial present value of the accumulated plan
benefits under such Plan as of the close of its most recent plan year exceeds
the fair market value of the assets allocable thereto, each determined in
accordance with Statement of Financial Accounting Standards No. 87, based upon
the actuarial assumptions used by such Plan's actuary in the most recent
annual valuation of such Plan.
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"United States" and "U.S." shall each mean the United States
of America.
"Unpaid Drawing" shall have the meaning provided in Section
1.17.
"Unutilized Commitment" with respect to any Bank at any time
shall mean such Bank's Commitment at such time, if any, less the sum of (i)
the aggregate outstanding principal amount of all Loans made by such Bank at
such time and (ii) such Bank's Loan Percentage of the Letter of Credit
Outstandings at such time.
"Work" shall have the meaning provided in Section 7.16(f).
SECTION 11. The Administrative Agent.
11.01 Appointment. The Banks hereby designate GACC as
Administrative Agent (for purposes of this Section 11, the term
"Administrative Agent" shall include GACC in its capacity as Collateral Agent
pursuant to the Security Documents) to act as specified herein and in the
other Credit Documents, and the Issuing Bank hereby designates GACC as
Administrative Agent to act as specified herein with respect to the issuance
of Letters of Credit and such other matters in connection with such Letters of
Credit as are provided for herein. Each Bank and the Issuing Bank hereby
irrevocably authorizes, and each holder of any Note by the acceptance of such
Note shall be deemed irrevocably to authorize, the Administrative Agent to
take such action on its behalf under the provisions of this Agreement, the
other Credit Documents and any other instruments and agreements referred to
herein or therein and to exercise such powers and to perform such duties
hereunder and thereunder as are specifically delegated to or required of the
Administrative Agent by the terms hereof and thereof and such other powers as
are reasonably incidental thereto. The Administrative Agent may perform any of
its duties hereunder by or through its respective officers, directors, agents,
employees or affiliates. Without limiting the generality of the preceding
sentence and notwithstanding the provisions of Section 11.09, GACC, in its
capacity as Administrative Agent and Collateral Agent, shall have the right
upon notice to the Borrower, the Banks and the Issuing Bank, to transfer and
assign all of its rights, duties and obligations as Administrative Agent and
Collateral Agent hereunder and under the other Credit Documents to any of its
Affiliates.
11.02 Nature of Duties. The Administrative Agent shall have
no duties or responsibilities except those expressly set forth in this
Agreement and in the other Credit Documents. Neither the Administrative Agent
nor any of its respective officers, directors, agents, employees or affiliates
shall be liable for any action taken or omitted by it or them hereunder or
under any other Credit Document or in connection herewith or therewith, unless
caused by its or their gross negligence or willful misconduct. The duties of
the Administrative Agent shall be mechanical and administrative in nature; the
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Administrative Agent shall not have by reason of this Agreement or any other
Credit Document a fiduciary relationship in respect of any Bank, the Issuing
Bank or the holder of any Note; and nothing in this Agreement or any other
Credit Document, expressed or implied, is intended to or shall be so construed
as to impose upon the Administrative Agent any obligations in respect of this
Agreement or any other Credit Document except as expressly set forth herein or
therein.
11.03 Lack of Reliance on the Administrative Agent.
Independently and without reliance upon the Administrative Agent, each Bank,
the Issuing Bank and the holder of each Note, to the extent it deems
appropriate, has made and shall continue to make (i) its own independent
investigation of the financial condition and affairs of each Credit Party and
each of their Subsidiaries in connection with the making and the continuance
of the Loans, the issuance of or participation in the Letters of Credit and
the taking or not taking of any action in connection herewith and (ii) its own
appraisal of the creditworthiness of each Credit Party and each of its
Subsidiaries and, except as expressly provided in this Agreement, the
Administrative Agent shall not have any duty or responsibility, either
initially or on a continuing basis, to provide any Bank, the Issuing Bank or
the holder of any Note with any credit or other information with respect
thereto, whether coming into its possession before the making of the Loans or
the issuance of the Letters of Credit at any time or times thereafter. The
Administrative Agent shall not be responsible to any Bank, the Issuing Bank or
the holder of any Note for any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or any other Credit Document or the financial
condition of any Credit Party or any of its Subsidiaries or be required to
make any inquiry concerning either the performance or observance of any of the
terms, provisions or conditions of this Agreement or any other Credit
Document, or the financial condition of any Credit Party or any of its
Subsidiaries or the existence or possible existence of any Default or Event of
Default.
11.04 Certain Rights of the Administrative Agent. If the
Administrative Agent shall request instructions from the Required Banks with
respect to any act or action (including failure to act) in connection with
this Agreement or any other Credit Document, the Administrative Agent shall be
entitled to refrain from such act or taking such action unless and until the
Administrative Agent shall have received instructions from the Required Banks
or, if required by Section 12.12, the Supermajority Banks or all of the Banks,
as the case may be; and the Administrative Agent shall not incur liability to
any Person by reason of so refraining. Without limiting the foregoing, no Bank
or the holder of any Note shall have any right of action whatsoever against
the Administrative Agent as a result of the Administrative Agent acting or
refraining from acting hereunder or under any other Credit Document in
accordance with the instructions of the Required Banks or, if required by
Section 12.12, the Supermajority Banks or all of the Banks, as the case may
be.
11.05 Reliance. The Administrative Agent shall be entitled
to rely, and shall be fully protected in relying, upon any note, writing,
resolution, notice, statement, certificate, telex, teletype or telecopier
message, cablegram, radiogram, order or other document or telephone message
signed, sent or made by any Person that the Administrative Agent believed to
be the proper Person, and, with respect to all legal matters pertaining to
this Agreement and any other Credit Document and its duties hereunder and
thereunder, upon advice of counsel selected by the Administrative Agent.
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11.06 Indemnification. To the extent the Administrative
Agent is not reimbursed and indemnified by the Borrower, the Banks will
reimburse and indemnify the Administrative Agent, in proportion to their
respective "percentages" as used in determining the Required Banks, for and
against any and all liabilities, obligations, losses, damages, penalties,
claims, actions, judgments, costs, expenses or disbursements of whatsoever
kind or nature which may be imposed on, asserted against or incurred by the
Administrative Agent in performing its respective duties hereunder or under
any other Credit Document, in any way relating to or arising out of this
Agreement or any other Credit Document; provided that no Bank shall be liable
for any portion of such liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements resulting from the
Administrative Agent's gross negligence or willful misconduct.
11.07 The Administrative Agent in its Individual Capacity.
With respect to its obligation to make Loans under this Agreement or
participate in Letters of Credit, the Administrative Agent shall have the
rights and powers specified herein for a "Bank" and may exercise the same
rights and powers as though it were not performing the duties specified
herein; and the term "Banks," "Required Banks," "holders of Notes" or any
similar terms shall, unless the context clearly otherwise indicates, include
the Administrative Agent in its individual capacity. The Administrative Agent
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with any Credit Party or any Affiliate of any
Credit Party as if it were not performing the duties specified herein, and may
accept fees and other consideration from the Borrower or any other Credit
Party for services in connection with this Agreement and otherwise without
having to account for the same to the Banks or the Issuing Bank.
11.08 Holders. The Administrative Agent may deem and treat
the payee of any Note as the owner thereof for all purposes hereof unless and
until a written notice of the assignment, transfer or endorsement thereof, as
the case may be, shall have been filed with the Administrative Agent. Any
request, authority or consent of any Person who, at the time of making such
request or giving such authority or consent, is the holder of any Note shall
be conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
11.09 Resignation by the Administrative Agent; Removal of
the Administrative Agent. (a) The Administrative Agent may resign from the
performance of all its functions and duties hereunder and/or under the other
Credit Documents at any time by giving 30 Business Days' prior written notice
to the Borrower, the Banks and the Issuing Bank. Such resignation shall take
effect upon the appointment of a successor Administrative Agent pursuant to
clauses (b) and (c) below or as otherwise provided below.
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(b) Upon any such notice of resignation by the
Administrative Agent, the Required Banks shall appoint a successor
Administrative Agent hereunder or thereunder who shall be a commercial bank or
trust company reasonably acceptable to the Borrower.
(c) If a successor Administrative Agent shall not have been
so appointed within such 30 Business Day period, the Administrative Agent,
with the consent of the Borrower, shall then appoint a successor
Administrative Agent who shall serve as Administrative Agent hereunder or
thereunder until such time, if any, as the Required Banks appoint a successor
Administrative Agent as provided above.
(d) If no successor Administrative Agent has been appointed
pursuant to clause (b) or (c) above by the 35th Business Day after the date
such notice of resignation was given by the Administrative Agent, the
Administrative Agent's resignation shall become effective and the Banks shall
thereafter perform all the duties of the Administrative Agent hereunder and/or
under any other Credit Document until such time, if any, as the Required Banks
appoint a successor Administrative Agent as provided above.
(e) In addition, the Required Banks shall have the right to
remove the Administrative Agent and appoint a successor Administrative Agent
who shall be a commercial bank or trust company reasonably acceptable to the
Borrower in the event that the Administrative Agent has been grossly negligent
or has willfully misconducted itself in performing its functions and duties
under this Agreement or any other Credit Document.
SECTION 12. Miscellaneous.
12.01 Payment of Expenses, etc. The Borrower agrees that it
shall: (i) whether or not the transactions contemplated herein are
consummated, pay all reasonable out-of-pocket costs and expenses of the
Administrative Agent (including, without limitation, the reasonable fees and
disbursements of White & Case, LLP, local counsel and due diligence,
environmental, engineering, real estate and insurance independent consultants
retained by the Administrative Agent) in connection with the preparation,
execution, delivery and performance of this Agreement and the other Credit
Documents and the documents and instruments referred to herein and therein,
any amendment, waiver or consent relating hereto or thereto, of the
Administrative Agent in connection with its syndication efforts with respect
to this Agreement and, upon the occurrence and during the continuance of an
Event of Default, the reasonable costs and expenses of each of the Banks and
the Issuing Bank in connection with the enforcement of this Agreement and the
other Credit Documents and the documents and instruments referred to herein
and therein (including, without limitation, the reasonable fees and
disbursements of counsel for the Administrative Agent and, following an Event
of Default, for each of the Banks and the Issuing Bank); (ii) pay and hold
each of the Banks and the Issuing Bank harmless from and against any and all
present and future stamp, excise and other similar taxes with respect to the
foregoing matters and save each of the Banks and the Issuing Bank harmless
from and against any and all liabilities with respect to or resulting from any
delay or omission (other than to the extent attributable to such Bank or the
Issuing Bank) to pay such taxes; and (iii) indemnify the Administrative Agent,
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each Bank and the Issuing Bank, and each of their respective officers,
directors, employees, representatives and agents from and hold each of them
harmless against any and all liabilities, obligations (including removal or
remedial actions), losses, damages, penalties, claims, actions, judgments,
suits, costs, expenses and disbursements (including reasonable attorneys' and
consultants' fees and disbursements) incurred by, imposed on or assessed
against any of them as a result of, or arising out of, or in any way related
to, or by reason of, (a) any investigation, litigation or other proceeding
(whether or not such Agent, any Bank or the Issuing Bank is a party thereto)
related to the entering into and/or performance of this Agreement or any other
Credit Document or the use of any Letter of Credit or the proceeds of any
Loans hereunder or the consummation of any transactions contemplated herein or
in any other Credit Document or the exercise of any of their rights or
remedies provided herein or in the other Credit Documents, or (b) the actual
or alleged presence of Hazardous Materials in the air, surface water or
groundwater or on the surface or subsurface of any Real Property owned or at
any time operated by the REIT or any of its Subsidiaries, the Release,
generation, storage, transportation, handling or disposal of Hazardous
Materials at any location, whether or not owned or operated by the REIT or any
of its Subsidiaries, the non-compliance of any Real Property with foreign,
federal, state and local laws, regulations, and ordinances (including
applicable permits thereunder) applicable to any Real Property, or any
Environmental Claim asserted against the REIT, any of its Subsidiaries or any
Real Property owned or at any time operated by the REIT or any of its
Subsidiaries, including, in each case, without limitation, the reasonable fees
and disbursements of counsel and other consultants incurred in connection with
any such investigation, litigation or other proceeding (but excluding any
losses, liabilities, claims, damages or expenses to the extent incurred by
reason of the gross negligence or willful misconduct of the Person to be
indemnified). To the extent that the undertaking to indemnify, pay or hold
harmless the Administrative Agent, any Bank or the Issuing Bank set forth in
the preceding sentence may be unenforceable because it is violative of any law
or public policy, the Borrower shall make the maximum contribution to the
payment and satisfaction of each of the indemnified liabilities which is
permissible under applicable law.
12.02 Right of Setoff. In addition to any rights now or
hereafter granted under applicable law or otherwise, and not by way of
limitation of any such rights, upon the occurrence and during the continuance
of an Event of Default, each Bank and the Issuing Bank is hereby authorized at
any time or from time to time, without presentment, demand, protest or other
notice of any kind to any Credit Party or to any other Person, any such notice
being hereby expressly waived, to set off and to appropriate and apply any and
all deposits (general or special) and any other Indebtedness at any time held
or owing by such Bank or the Issuing Bank, as the case may be (including,
without limitation, by branches and agencies of such Bank or the Issuing Bank,
as the case may be, wherever located) to or for the credit or the account of
any Credit Party against and on account of the Obligations and liabilities of
such Credit Party to such Bank or the Issuing Bank, as the case may be, under
this Agreement or under any of the other Credit Documents, including, without
limitation, all interests in Obligations purchased by such Bank pursuant to
Section 12.06(b), and all other claims of any nature or description arising
out of or connected with this Agreement or any other Credit Document,
irrespective of whether or not such Bank or the Issuing Bank, as the case may
be, shall have made any demand hereunder and although said Obligations,
liabilities or claims, or any of them, shall be contingent or unmatured.
Notwithstanding anything to the contrary contained in this Section 12.02,
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neither any Bank nor the Issuing Bank shall exercise any such right of set-off
without the prior consent of the Administrative Agent or the Required Banks so
long as the Obligations shall be secured by any Real Property located in the
State of California, it being understood and agreed, however, that this
sentence is for the sole benefit of the Banks and the Issuing Bank and may be
amended, modified or waived in any respect by the Required Banks without the
requirement of prior notice to or consent by any Credit Party and does not
constitute a waiver of any rights against any Credit Party or against any
Collateral.
12.03 Notices. Except as otherwise expressly provided
herein, all notices and other communications provided for hereunder shall be
in writing (including telegraphic, telex, telecopier or cable communication)
and mailed, telegraphed, telexed, telecopied, cabled or delivered: if to the
Borrower, at the Borrower's address specified opposite its signature below; if
to the REIT, at the REIT's address specified opposite its signature below; if
to any Bank, at its address specified opposite its name on Schedule II; if to
the Issuing Bank, at its address specified opposite its signature below; and
if to the Administrative Agent, at the Notice Office; or, as to the Borrower
or the Administrative Agent, at such other address as shall be designated by
such party in a written notice to the other parties hereto and, as to each
Bank or the Issuing Bank, at such other address as shall be designated by such
Bank or the Issuing Bank in a written notice to the Borrower and the
Administrative Agent. All such notices and communications shall, when mailed,
telegraphed, telexed, telecopied, or cabled or sent by overnight courier, be
effective when deposited in the mails, delivered to the telegraph company,
cable company or overnight courier, as the case may be, or sent by telex or
telecopier, except that notices and communications to the Administrative Agent
and the Borrower shall not be effective until received by the Administrative
Agent or the Borrower, as the case may be.
12.04 Benefit of Agreement. (a) This Agreement shall be
binding upon and inure to the benefit of and be enforceable by the respective
successors and assigns of the parties hereto; provided, however, the Borrower
may not assign or transfer any of its rights, obligations or interest
hereunder or under any other Credit Document without the prior written consent
of the Banks and, provided further, that, although any Bank may transfer,
assign or grant participations in its rights hereunder, such Bank shall remain
a "Bank" for all purposes hereunder (and may not transfer or assign all or any
portion of its Commitment hereunder except as provided in Section 12.04(b))
and the transferee, assignee or participant, as the case may be, shall not
constitute a "Bank" hereunder and, provided further, that no Bank shall
transfer or grant any participation under which the participant shall have
rights to approve any amendment to or waiver of this Agreement or any other
Credit Document except to the extent such amendment or waiver would (i) extend
the final scheduled maturity of any Loan, Note or Letter of Credit (unless
such Letter of Credit is not extended beyond the Maturity Date) in which such
participant is participating, or reduce the rate or extend the time of payment
of interest or Fees thereon (except in connection with a waiver of
applicability of any post-default increase in interest rates) or reduce the
principal amount thereof, or increase the amount of the participant's
participation over the amount thereof then in effect (it being understood that
a waiver of any Default or Event of Default or of a mandatory reduction in the
Total Commitment shall not constitute a change in the terms of such
participation, and that an increase in any Commitment or Loan shall be
permitted without the consent of any participant if the participant's
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participation is not increased as a result thereof), (ii) consent to the
assignment or transfer by the Borrower of any of its rights and obligations
under this Agreement or (iii) release all or substantially all of the
Collateral under all of the Security Documents (except as expressly provided
in the Credit Documents) supporting the Loans hereunder in which such
participant is participating. In the case of any such participation, the
participant shall not have any rights under this Agreement or any of the other
Credit Documents (the participant's rights against such Bank in respect of
such participation to be those set forth in the agreement executed by such
Bank in favor of the participant relating thereto) and all amounts payable by
the Borrower hereunder shall be determined as if such Bank had not sold such
participation.
(b) Notwithstanding the foregoing, any Bank (or any Bank
together with one or more other Banks) may (x) assign all or a portion of its
Commitment (and related outstanding Obligations hereunder) to (i) its parent
company and/or any affiliate of such Bank which is at least 50% owned by such
Bank or its parent company or to one or more Banks or (ii) in the case of any
Bank that is a fund that invests in bank loans, any other fund that invests in
bank loans and is managed by the same investment advisor of such Bank or by an
Affiliate of such investment advisor or (y) assign all, or if less than all, a
portion equal to at least $5,000,000 in the aggregate for the assigning Bank
or assigning Banks, of such Commitment (and related outstanding Obligations
hereunder) to one or more Eligible Transferees (treating any fund that invests
in bank loans and any other fund that invests in bank loans and is managed by
the same investment advisor of such fund or by an Affiliate of such investment
advisor as a single Eligible Transferee), each of which assignees shall become
a party to this Agreement as a Bank by execution of an Assignment and
Assumption Agreement, provided that (i) at such time Schedule I shall be
deemed modified to reflect the Commitments (and/or outstanding Loans, as the
case may be) of such new Bank and of the existing Banks, (ii) upon surrender
of the old Notes, new Notes will be issued to such new Bank and to the
assigning Bank, such new Notes to be in conformity with the requirements of
Section 1.05 (with appropriate modifications) to the extent needed to reflect
the revised Commitments (and/or outstanding Loans, as the case may be), (iii)
the consent of the Administrative Agent shall be required in connection with
any such assignment pursuant to clause (y) above (which consent shall not be
unreasonably withheld) and (iv) the Administrative Agent shall receive at the
time of each such assignment, from the assigning or assignee Bank, the payment
of a non-refundable assignment fee of $3,500 and, provided further, that such
transfer or assignment will not be effective until recorded by the
Administrative Agent on the Register pursuant to Section 12.16. The
Administrative Agent will promptly give the Borrower notice of any assignment
to an Eligible Transferee pursuant to clause (y) of the first sentence of this
Section 12.04(b), although the failure to give any such notice shall not
affect such assignment or result in any liability by the Administrative Agent.
To the extent of any assignment pursuant to this Section 12.04(b), the
assigning Bank shall be relieved of its obligations hereunder with respect to
its assigned Commitments. At the time of each assignment pursuant to this
Section 12.04(b) to a Person which is not already a Bank hereunder and which
is not a United States person (as such term is defined in Section 7701(a)(30)
of the Code) for Federal income tax purposes, the respective assignee Bank
shall provide to the Borrower and the Administrative Agent the appropriate
Internal Revenue Service Forms (and, if applicable a Section 3.04(b)(ii)
Certificate) described in Section 3.04(b). To the extent that an assignment of
all or any portion of a Bank's Commitment and related
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outstanding Obligations pursuant to this Section 12.04(b) would, at the time
of such assignment, result in increased costs under Section 1.10, 1.11 or 3.04
from those being charged by the respective assigning Bank prior to such
assignment, then the Borrower shall not be obligated to pay or reimburse such
increased costs (although the Borrower shall be obligated to pay any other
increased costs of the type described above resulting from changes after the
date of the respective assignment).
(c) Nothing in this Agreement shall prevent or prohibit any
Bank from pledging its Loans and Notes hereunder to a Federal Reserve Bank in
support of borrowings made by such Bank from such Federal Reserve Bank and,
with the consent of the Administrative Agent, any Bank which is a fund may
pledge all or any portion of its Loans and Notes to its trustee in support of
its obligations to its trustee. No pledge pursuant to this clause (c) shall
release the transferor Bank from any of its obligations hereunder.
12.05 No Waiver; Remedies Cumulative. No failure or delay on
the part of the Administrative Agent, the Issuing Bank or any Bank or any
holder of any Note in exercising any right, power or privilege hereunder or
under any other Credit Document and no course of dealing between the Borrower
or any other Credit Party and the Administrative Agent, the Issuing Bank or
any Bank or the holder of any Note shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege
hereunder or under any other Credit Document preclude any other or further
exercise thereof or the exercise of any other right, power or privilege
hereunder or thereunder. The rights, powers and remedies herein or in any
other Credit Document expressly provided are cumulative and not exclusive of
any rights, powers or remedies which the Administrative Agent, the Issuing
Bank or any Bank or the holder of any Note would otherwise have. No notice to
or demand on any Credit Party in any case shall entitle any Credit Party to
any other or further notice or demand in similar or other circumstances or
constitute a waiver of the rights of the Administrative Agent, the Issuing
Bank or any Bank or the holder of any Note to any other or further action in
any circumstances without notice or demand.
12.06 Payments Pro Rata. (a) Except as otherwise
provided in this Agreement, the Administrative Agent agrees that promptly
after its receipt of each payment from or on behalf of the Borrower in respect
of any Obligations hereunder, it shall distribute such payment to the Banks
(other than any Bank that has consented in writing to waive its pro rata share
of any such payment) pro rata based upon their respective shares, if any, of
the Obligations with respect to which such payment was received.
(b) Each of the Banks agrees that, if it should receive any
amount hereunder (whether by voluntary payment, by realization upon security,
by the exercise of the right of setoff or banker's lien, by counterclaim or
cross action, by the enforcement of any right under the Credit Documents, or
otherwise), which is applicable to the payment of the principal of, or
interest on, the Loans, Unpaid Drawings, Commitment Commission or Letter of
Credit Fees, of a sum which with respect to the related sum or sums received
by other Banks is in a greater proportion than the total of such Obligation
then owed and due to such Bank bears to the total of such Obligation then owed
and due to all of the Banks immediately prior to such receipt, then such Bank
receiving such excess payment shall purchase for cash without recourse or
warranty from the other Banks an interest in the Obligations of the respective
Credit Party to such Banks in such amount as shall result in a proportional
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participation by all the Banks in such amount; provided that if all or any
portion of such excess amount is thereafter recovered from such Bank, such
purchase shall be rescinded and the purchase price restored to the extent of
such recovery, but without interest.
(c) Notwithstanding anything to the contrary contained
herein, the provisions of the preceding Sections 12.06(a) and (b) shall be
subject to the express provisions of this Agreement which require, or permit,
differing payments to be made to Non-Defaulting Banks as opposed to Defaulting
Banks.
12.07 Calculations; Computations. (a) The financial
statements to be furnished to the Banks pursuant hereto shall be made and
prepared in accordance with generally accepted accounting principles in the
United States consistently applied throughout the periods involved (except as
set forth in the notes thereto or as otherwise disclosed in writing by the
Borrower to the Banks) ("GAAP").
(b) All computations of interest and other fees hereunder
shall be made on the basis of a year of 360 days for the actual number of days
(including the first day but excluding the last day) occurring in the period
for which such interest or other fees are payable.
12.08 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE;
WAIVER OF JURY TRIAL. (a) THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS AND
THE RIGHTS AND OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL,
EXCEPT AS OTHERWISE PROVIDED IN CERTAIN OF THE MORTGAGES, BE CONSTRUED IN
ACCORDANCE WITH AND BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK. ANY LEGAL
ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER CREDIT
DOCUMENT MAY BE BROUGHT IN THE COURTS OF THE STATE OF NEW YORK OR OF THE
UNITED STATES FOR THE SOUTHERN DISTRICT OF NEW YORK, AND, BY EXECUTION AND
DELIVERY OF THIS AGREEMENT, EACH OF THE REIT AND THE BORROWER HEREBY
IRREVOCABLY ACCEPTS FOR ITSELF AND IN RESPECT OF ITS PROPERTY, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS. EACH OF THE REIT
AND THE BORROWER HEREBY FURTHER IRREVOCABLY WAIVES ANY CLAIM THAT ANY SUCH
COURTS LACK JURISDICTION OVER SUCH CREDIT PARTY, AND AGREES NOT TO PLEAD OR
CLAIM, IN ANY LEGAL ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY
OTHER CREDIT DOCUMENT BROUGHT IN ANY OF THE AFORESAID COURTS, THAT ANY SUCH
COURT LACKS JURISDICTION OVER SUCH CREDIT PARTY. EACH OF THE REIT AND THE
BORROWER FURTHER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OUT OF ANY OF
THE AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF
COPIES THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO SUCH
CREDIT PARTY AT ITS ADDRESS SET FORTH OPPOSITE ITS SIGNATURE BELOW, SUCH
SERVICE TO BECOME EFFECTIVE 30 DAYS AFTER SUCH MAILING. EACH OF THE REIT AND
THE BORROWER HEREBY IRREVOCABLY WAIVES ANY OBJECTION TO SUCH SERVICE OF
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PROCESS AND FURTHER IRREVOCABLY WAIVES AND AGREES NOT TO PLEAD OR CLAIM IN ANY
ACTION OR PROCEEDING COMMENCED HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT
THAT SERVICE OF PROCESS WAS IN ANY WAY INVALID OR INEFFECTIVE. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE ADMINISTRATIVE AGENT, ANY BANK OR THE HOLDER OF
ANY NOTE TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR TO COMMENCE
LEGAL PROCEEDINGS OR OTHERWISE PROCEED AGAINST ANY CREDIT PARTY IN ANY OTHER
JURISDICTION.
(b) EACH OF THE REIT AND THE BORROWER HEREBY IRREVOCABLY
WAIVES ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE
OF ANY OF THE AFORESAID ACTIONS OR PROCEEDINGS ARISING OUT OF OR IN CONNECTION
WITH THIS AGREEMENT OR ANY OTHER CREDIT DOCUMENT BROUGHT IN THE COURTS
REFERRED TO IN CLAUSE (a) ABOVE AND HEREBY FURTHER IRREVOCABLY WAIVES AND
AGREES NOT TO PLEAD OR CLAIM IN ANY SUCH COURT THAT ANY SUCH ACTION OR
PROCEEDING BROUGHT IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT
FORUM.
(c) EACH OF THE PARTIES TO THIS AGREEMENT HEREBY IRREVOCABLY
WAIVES ALL RIGHT TO A TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM
ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE OTHER CREDIT DOCUMENTS OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
12.09 Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an
original, but all of which shall together constitute one and the same
instrument. A set of counterparts executed by all the parties hereto shall be
lodged with the Borrower and the Administrative Agent.
12.10 Effectiveness. This Agreement shall become effective
on the date (the "Effective Date") on which (i) the REIT, the Borrower, the
Administrative Agent, the Issuing Bank and each of the Banks set forth on
Schedule I shall have signed a counterpart hereof (whether the same or
different counterparts) and shall have delivered the same to the
Administrative Agent at the Notice Office or, in the case of the Banks, shall
have given to the Administrative Agent telephonic (confirmed in writing) or
written notice at such office that the same has been signed and mailed to it
and (ii) the conditions contained in Section 4 are met to the satisfaction of
the Administrative Agent, the Issuing Bank and the Required Banks. Unless the
Administrative Agent has received actual notice from the Issuing Bank or any
Bank that the conditions described in clause (ii) of the preceding sentence
have not been met to its satisfaction, upon the satisfaction of the condition
described in clause (i) of the immediately preceding sentence and upon the
Administrative Agent's good faith determination that the conditions described
in clause (ii) of the immediately preceding sentence have been met, then the
Effective Date shall be deemed to have occurred, regardless of any subsequent
114
determination that one or more of the conditions thereto had not been met
(although the occurrence of the Effective Date shall not release the Borrower
from any liability for failure to satisfy one or more of the applicable
conditions contained in Section 4). The Administrative Agent will give the
REIT, the Borrower, the Issuing Bank and each Bank prompt written notice of
the occurrence of the Effective Date.
12.11 Headings Descriptive. The headings of the several
sections and subsections of this Agreement are inserted for convenience only
and shall not in any way affect the meaning or construction of any provision
of this Agreement.
12.12 Amendment or Waiver; etc. (a) Neither this Agreement
nor any other Credit Document nor any terms hereof or thereof may be changed,
waived, discharged or terminated unless such change, waiver, discharge or
termination is in writing signed by the respective Credit Parties party
thereto and the Required Banks, provided that no such change, waiver,
discharge or termination shall, without the consent of each Bank (other than a
Defaulting Bank) (with the term "Bank" meaning each Bank having Obligations
being directly affected thereby in the case of following clause (i)), (i)
extend the final scheduled maturity of any Loan or Note or extend the stated
expiration date of any Letter of Credit beyond the Maturity Date, or reduce
the rate or extend the time of payment of interest or Fees thereon, or reduce
the principal amount thereof (except to the extent repaid in cash), (ii)
release all or substantially all of the Collateral (except as expressly
provided in the Credit Documents), (iii) release the REIT from its obligations
under the Parent Guaranty, (iv) amend, modify or waive any provision of this
Section 12.12, (v) reduce the percentage specified in the definition of
Required Banks (it being understood that, with the consent of the Required
Banks, additional extensions of credit pursuant to this Agreement may be
included in the determination of the Required Banks on substantially the same
basis as the extensions of Loans are included on the Effective Date) or (vi)
consent to the assignment or transfer by the Borrower of any of its rights and
obligations under this Agreement; provided further, that no such change,
waiver, discharge or termination shall (A) increase the Commitment of any Bank
over the amount thereof then in effect without the consent of such Bank (it
being understood that waivers or modifications of conditions precedent,
covenants, Defaults or Events of Default or of a mandatory reduction in the
Total Commitment shall not constitute an increase of the Commitment of any
Bank, and that an increase in the available portion of the Commitment of any
Bank shall not constitute an increase in the Commitment of such Bank), (B)
without the consent of the Issuing Bank, modify or waive any provision of
Section 1.13 through Section 1.18 or alter its rights or obligations with
respect to the Letters of Credit, (C) without the consent of the
Administrative Agent, amend, modify or waive any provision of Section 11 or
any other provision as same relates to the rights or obligations of the
Administrative Agent, (D) without the consent of the Collateral Agent, amend,
modify or waive any provision relating to the rights or obligations of the
Collateral Agent or (E) without the consent of the Supermajority Banks, (i)
amend or modify the definition of Supermajority Banks, (ii) amend or modify
any provision of the Agreement which would permit the REIT or any of its
Subsidiaries to pay additional Dividends to, or make additional Investments in
or to, any of its other Subsidiaries, (iii) release any Subsidiary Guarantor
from its obligations under the Subsidiaries Guaranty (in each case, except as
expressly provided in the Credit Documents) or (iv) release any Borrowing Base
115
Property or Borrowing Base Pledged Mortgage Loan from the Liens created by the
respective Mortgage or Collateral Assignment (except as expressly provided in
the Credit Documents).
12.13 Survival. All indemnities set forth herein including,
without limitation, in Sections 1.10, 1.11, 3.04, 12.01 and 12.06 shall
survive the execution, delivery and termination of this Agreement and the
Notes and the making and repayment of the Loans.
12.14 Domicile of Loans. Each Bank may transfer and carry
its Loans at, to or for the account of any office, Subsidiary or Affiliate of
such Bank. Notwithstanding anything to the contrary contained herein, to the
extent that a transfer of Loans pursuant to this Section 12.14 would, at the
time of such transfer, result in increased costs under Section 1.10, 1.11, or
3.04 from those being charged by the respective Bank prior to such transfer,
then the Borrower shall not be obligated to pay such increased costs (although
the Borrower shall be obligated to pay any other increased costs of the type
described above resulting from changes after the date of the respective
transfer).
12.15 Confidentiality. (a) Subject to the provisions
of clause (b) of this Section 12.15, each Bank agrees that it will use its
reasonable efforts not to disclose without the prior consent of the Borrower
(other than to its employees, auditors, advisors or counsel or to another Bank
if such Bank or such Bank's holding or parent company in its reasonable good
faith discretion determines that any such party should have access to such
information, provided such Persons shall be subject to the provisions of this
Section 12.15 to the same extent as such Bank) any information with respect to
any Credit Party or any of its Subsidiaries which has been, is now or in the
future furnished pursuant to this Agreement or any other Credit Document and
which is designated by any Credit Party to the Banks in writing as
confidential, provided that any Bank may disclose any such information (a) as
has become generally available to the public, (b) as may be required or
appropriate in any report, statement or testimony submitted to any municipal,
state or Federal regulatory body having or claiming to have jurisdiction over
such Bank or to the Federal Reserve Board or the Federal Deposit Insurance
Corporation or similar organizations (whether in the United States or
elsewhere) or their successors, (c) as may be required or appropriate in
respect to any summons or subpoena or in connection with any litigation, (d)
in order to comply with any law, order, regulation or ruling applicable to
such Bank, (e) to the Administrative Agent or the Collateral Agent and (f) to
any prospective or actual transferee or participant in connection with any
contemplated transfer or participation of any of the Notes or Commitments or
any interest therein by such Bank, provided, that such prospective transferee
agrees with such Bank to be subject to the provisions of this Section
12.15(a).
(b) The REIT and the Borrower hereby acknowledge and agree
that each Bank may share with any of its affiliates any information related to
Credit Parties or any of their respective Subsidiaries (including, without
limitation, any nonpublic customer information regarding the creditworthiness
of the Credit Parties and their respective Subsidiaries, provided such Persons
shall be subject to the provisions of this Section 12.15 to the same extent as
such Bank), it being understood that for purposes of this Section 12.15(b) the
term "affiliate" shall mean any direct or indirect holding company of a Bank
as well as any direct or indirect Subsidiary of such holding company.
116
12.16 Register. The Borrower hereby designates the
Administrative Agent to serve as the Borrower's agent, solely for purposes of
this Section 12.16, to maintain a register (the "Register") on which it will
record the Commitments from time to time of each of the Banks, the Loans made
by each of the Banks and each repayment in respect of the principal amount of
the Loans of each Bank. Failure to make any such recordation, or any error in
such recordation, shall not affect the Borrower's obligations in respect of
such Loans. With respect to any Bank, the transfer of the Commitment of such
Bank and the rights to the principal of, and interest on, any Loan made
pursuant to such Commitment shall not be effective until such transfer is
recorded on the Register maintained by the Administrative Agent with respect
to ownership of such Commitment and Loans and prior to such recordation all
amounts owing to the transferor with respect to such Commitment and Loans
shall remain owing to the transferor. The registration of assignment or
transfer of all or part of any Commitments and Loans shall be recorded by the
Administrative Agent on the Register only upon the acceptance by the
Administrative Agent of a properly executed and delivered Assignment and
Assumption Agreement pursuant to Section 12.04(b). Coincident with the
delivery of such an Assignment and Assumption Agreement to the Administrative
Agent for acceptance and registration of assignment or transfer of all or part
of a Loan, or as soon thereafter as practicable, the assigning or transferor
Bank shall surrender the Note evidencing such Loan, and thereupon one or more
new Notes in the same aggregate principal amount shall be issued to the
assigning or transferor Bank and/or the new Bank. The Borrower agrees to
indemnify the Agent from and against any and all losses, claims, damages and
liabilities of whatsoever nature which may be imposed on, asserted against or
incurred by the Administrative Agent in performing its duties under this
Section 12.16, provided that the Borrower shall have no obligation to
indemnify the Administrative Agent for any loss, claim, damage, liability or
expense which resulted solely from the gross negligence or willful misconduct
of the Administrative Agent.
12.17 Commercial Loan Transactions. Each of the Banks
acknowledges that the making of its Loans and the issuance by the Borrower of
a Note to such Bank are in the nature of a commercial loan transaction, and
that no such Bank shall assert that such actions are a securities transaction
regulated under the Exchange Act, the Securities Act or any other Federal or
state securities laws, it being understood that nothing in this Section 12.17
shall limit the rights of the Banks pursuant to Section 12.04.
12.18 Servicing of Loans. The Administrative Agent may, in
its sole discretion, determine to designate and appoint a servicer to service
the Loans pursuant to a loan servicing agreement in form and substance
satisfactory to Administrative Agent. In connection with such designation and
appointment, the Administrative Agent may, in its sole discretion, delegate
some or all of its rights and obligations under the Credit Documents to such
servicer pursuant to the loan servicing agreement. The Borrower hereby
irrevocably consents to such designation and appointment of a servicer and any
such delegation to such servicer of some or all of the Administrative Agent's
rights and obligations under the Credit Documents.
117
SECTION 13. Parent Guaranty.
13.01 The Guaranty. In order to induce the Administrative
Agent, the Issuing Bank and the Banks to enter into this Agreement and to
extend credit hereunder and in recognition of the direct benefits to be
received by the Parent Guarantor from the proceeds of the Loans, the issuance
of the Letters of Credit and the entering into by the Borrower of Interest
Rate Protection Agreements or Other Hedging Agreements, the Parent Guarantor
hereby agrees with the Administrative Agent and the Banks as follows: the
Parent Guarantor hereby absolutely, unconditionally and irrevocably,
guarantees as primary obligor and not merely as surety all of the Guaranteed
Obligations of the Borrower to each Creditor. If any or all of the Guaranteed
Obligations becomes due and payable hereunder, the Parent Guarantor
absolutely, unconditionally and irrevocably promises to pay such indebtedness
to the Creditors or order, on demand, together with any and all reasonable
expenses which may be incurred by the Creditors in collecting any of the
Guaranteed Obligations. This Parent Guaranty shall constitute a guaranty of
payment, and not of collection.
13.02 Bankruptcy. Additionally, the Parent Guarantor,
absolutely, unconditionally and irrevocably guarantees the payment of any and
all of the Guaranteed Obligations of the Borrower to the Creditors whether or
not then due or payable by the Borrower upon the occurrence in respect of the
Borrower of any of the events specified in Section 9.05, and unconditionally
and irrevocably promises to pay such Guaranteed Obligations to the Creditors,
or order, on demand, in lawful money of the United States.
13.03 Nature of Liability. The liability of the Parent
Guarantor hereunder is exclusive and independent of any security for or other
guaranty of the Guaranteed Obligations of the Borrower whether executed by the
Parent Guarantor, any other guarantor or by any other party, and the liability
of the Parent Guarantor hereunder shall not be affected or impaired by (a) any
direction as to application of payment by the Borrower or by any other party,
or (b) any other continuing or other guaranty, undertaking or maximum
liability of a guarantor or of any other party as to the Guaranteed
Obligations of the Borrower, or (c) any payment on or in reduction of any such
other guaranty or undertaking except to the extent that such payment actually
results in a permanent reduction of the Guaranteed Obligations, or (d) any
dissolution, termination or increase, decrease or change in personnel by the
Borrower, or (e) any payment made to any Creditor on the indebtedness which
such Creditor repays the Borrower pursuant to court order in any bankruptcy,
reorganization, arrangement, moratorium or other debtor relief proceeding, and
each Parent Guarantor waives any right to the deferral or modification of its
obligations hereunder by reason of any such proceeding.
13.04 Independent Obligation. The obligations of the Parent
Guarantor hereunder are independent of the obligations of any other guarantor
or the Borrower, and a separate action or actions may be brought and
prosecuted against the Parent Guarantor whether or not action is brought
against any other guarantor or the Borrower and whether or not any other
guarantor or the Borrower be joined in any such action or actions. The Parent
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
118
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to the Parent Guarantor.
13.05 Authorization. The Parent Guarantor authorizes the
Administrative Agent and the other Creditors without notice or demand or
consent (except as shall be required by applicable statute and cannot be
waived), and without affecting or impairing its liability hereunder, from time
to time to:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew, increase, accelerate
or alter, any of the Guaranteed Obligations (including any increase or
decrease in the rate of interest thereon), any security therefor, or
any liability incurred directly or indirectly in respect thereof, and
the Guaranty herein made shall apply to the Guaranteed Obligations as
so changed, extended, renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize
upon or otherwise deal with in any manner and in any order any
property by whomsoever at any time pledged or mortgaged to secure, or
howsoever securing, the Guaranteed Obligations or any liabilities
(including any of those hereunder) incurred directly or indirectly in
respect thereof or hereof, and/or any offset there against;
(c) exercise or refrain from exercising any rights against
the Borrower, any other Credit Party or any other Person or otherwise
act or refrain from acting;
(d) release or substitute any one or more endorsers,
guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and subordinate the payment of all or any part thereof to the
payment of any liability (whether due or not) of the Borrower to its
creditors other than the Creditors, provided that the Creditors will
not, without the prior written consent of the Parent Guarantor,
contractually subordinate the payment of all or any part of the
Guaranteed Obligations to any other creditor or creditors of the
Borrower, provided further that if any consent required by the
immediately preceding proviso is not obtained and contractual
subordination as described therein is agreed to, then (x) any part of
the Guaranteed Obligations not so subordinated will continue to be
entitled to the full benefits of this Parent Guaranty and (y) with
respect to any part of the Guaranteed Obligations so contractually
subordinated, the Parent Guarantor will be relieved of its obligations
hereunder only to the extent each establishes that it has been
actually damaged by such contractual subordination;
(f) apply any sums by whomsoever paid or howsoever realized
to any liability or liabilities of the Borrower to the Creditors
regardless of what liability or liabilities of the Borrower remain
unpaid;
119
(g) consent to or waive any breach of, or any act, omission
or default under, this Agreement or any of the instruments or
agreements referred to herein, or otherwise amend, modify or
supplement this Agreement or any of such other instruments or
agreements; and/or
(h) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of the Parent Guarantor from its liabilities under this
Section 13.
13.06 Reliance. It is not necessary for the Administrative
Agent or the other Creditors to inquire into the capacity or powers of the
Borrower or any other Credit Party or the officers, directors, partners or
agents acting or purporting to act on its behalf, and any Guaranteed
Obligations made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
13.07 Subordination. Any of the indebtedness of the Borrower
now or hereafter owing to the Parent Guarantor is hereby subordinated to the
Guaranteed Obligations of the Borrower owing to the Administrative Agent and
the other Creditors; and if the Administrative Agent so requests at a time
when an Event of Default exists, all such indebtedness of the Borrower to the
Parent Guarantor shall be collected, enforced and received by the Parent
Guarantor for the benefit of the Creditors and be paid over to the
Administrative Agent on behalf of the Creditors on account of the Guaranteed
Obligations of the Borrower to the Creditors, but without affecting or
impairing in any manner the liability of the Parent Guarantor under the other
provisions of this Parent Guaranty. Prior to the transfer by the Parent
Guarantor of any note or negotiable instrument evidencing any of the
indebtedness relating to the Guaranteed Obligations of the Borrower to the
Parent Guarantor, the Parent Guarantor shall mark such note or negotiable
instrument with a legend that the same is subject to this subordination.
Without limiting the generality of the foregoing, the Parent Guarantor hereby
agrees with the Creditors that it will not exercise any right of subrogation
which it may at any time otherwise have as a result of this Parent Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code, or otherwise)
until all Guaranteed Obligations have been paid in full in cash (it being
understood that the Parent Guarantor is not waiving any right of subrogation
that it may otherwise have but is only waiving the exercise thereof as
provided above).
13.08 Waiver. (a) The Parent Guarantor waives any right
(except as shall be required by applicable statute and cannot be waived) to
require the Administrative Agent or the other Creditors to (i) proceed against
the Borrower, any other guarantor or any other party, (ii) proceed against or
exhaust any security held from the Borrower, any other guarantor or any other
party or (iii) pursue any other remedy in the Administrative Agent's or the
other Creditors' power whatsoever. The Parent Guarantor waives any defense
based on or arising out of any defense of the Borrower, the Parent Guarantor,
any other guarantor or any other party, other than payment in full of the
Guaranteed Obligations, based on or arising out of the disability of the
Borrower, any other guarantor or any other party, or the unenforceability of
the Guaranteed Obligations or any part thereof from any cause, or the
cessation from any cause of the liability of the Borrower other than payment
in full of the Guaranteed Obligations. The Administrative Agent and the other
120
Creditors may, at their election, foreclose on any security held by the
Administrative Agent, the Collateral Agent or the other Creditors by one or
more judicial or nonjudicial sales, whether or not every aspect of any such
sale is commercially reasonable (to the extent such sale is permitted by
applicable law), or exercise any other right or remedy the Administrative
Agent and the other Creditors may have against the Borrower or any other
party, or any security, without affecting or impairing in any way the
liability of the Parent Guarantor hereunder except to the extent the
Guaranteed Obligations have been paid. The Parent Guarantor waives any defense
arising out of any such election by the Administrative Agent and the other
Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of the Parent
Guarantor against the Borrower or any other party or any security.
(b) The Parent Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Parent Guaranty, and notices of the existence, creation or incurring of
new or additional Guaranteed Obligations. The Parent Guarantor assumes all
responsibility for being and keeping itself informed of the Borrower's financial
condition and assets, and of all other circumstances bearing upon the risk of
nonpayment of the Guaranteed Obligations and the nature, scope and extent of the
risks which the Parent Guarantor assumes and incurs hereunder, and agrees that
the Administrative Agent and the other Creditors shall have no duty to advise
the Parent Guarantor of information known to them regarding such circumstances
or risks.
The Parent Guarantor warrants and agrees that each of the
waivers set forth above is made with full knowledge of its significance and
consequences and that if any of such waivers is determined to be contrary to
any applicable law or public policy, such waivers shall be effective only to
the maximum extent permitted by law.
13.09 Nature of Liability. It is the desire and intent of
the Parent Guarantor and the Creditors that this Parent Guaranty shall be
enforced against the Parent Guarantor to the fullest extent permissible under
the laws and public policies applied in each jurisdiction in which enforcement
is sought. If, however, and to the extent that, the obligations of the Parent
Guarantor under this Parent Guaranty shall be adjudicated to be invalid or
unenforceable for any reason (including, without limitation, because of any
applicable state or federal law relating to fraudulent conveyances or
transfers), then the amount of the Guaranteed Obligations shall be deemed to
be reduced and the Parent Guarantor shall pay the maximum amount of the
Guaranteed Obligations which would be permissible under applicable law.
13.10 Interest Rate Protection Agreements and Other Hedging
Agreements. Notwithstanding anything to the contrary contained in this Parent
Guaranty, no Interest Rate Protection Agreement or Other Hedging Agreement
shall be entitled to the benefits of this Parent Guaranty unless such Interest
Rate Protection Agreement or Other Hedging Agreement is reasonably related to
the Loans (including, in any event, any Interest Rate Protection Agreement
entered into to satisfy the requirements of Section 7.16) or such Interest
121
Rate Protection Agreement or Other Hedging Agreement provides that it is to be
entitled to the benefits of this Parent Guaranty or the Security Documents
generally.
122
IN WITNESS WHEREOF, the parties hereto have caused their
duly authorized officers to execute and deliver this Agreement as of the date
first above written.
Address: ELDERTRUST
415 McFarlan Road By:/s/ Edward B. Romanov, Jr.
Suite 202 -------------------------------------
Kennett Square Name: Edward B. Romanov, Jr.
Pennsylvania 19348 Title: President and CEO
Address: ELDERTRUST OPERATING LIMITED PARTNERSHIP
415 McFarlan Road By:/s/ Edward B. Romanov, Jr.
Suite 202 -------------------------------------
Kennett Square Name: Edward B. Romanov, Jr.
Pennsylvania 19348 Title: President and CEO
:
Address: GERMAN AMERICAN CAPITAL CORPORATION, as
a Bank and as Administrative Agent
31 West 52nd Street
New York, New York 10019 By:/s/ Allisson Michaels
-------------------------------------
Name: Allisson Michaels
Title: Attorney-in-fact
By:/s/ Janet Whang
-------------------------------------
Name: Janet Whang
Titl: Attorney-in-fact
Address: DEUTSCHE BANK AG, NEW YORK BRANCH, as
Issuing Bank
31 West 52nd Street By:/s/ Allisson Michaels
New York, New York 10019 -------------------------------------
Name: Allisson Michaels
Title: Attorney-in-fact
By:/s/ Janet Whang
-------------------------------------
Name: Janet Whang
Title: Attorney-in-fact
123
SCHEDULE I
----------
COMMITMENTS
-----------
Bank Commitment
- ---- ------------
German American Capital Corporation $140,000,000
------------
TOTAL: $140,000,000
------------
SCHEDULE II
------------
BANK ADDRESSES
--------------
Bank Address
- ---- -------
German American Capital Corporation 31 West 52nd Street
New York, New York 10019
SCHEDULE III
------------
Real Property
Name/Owner Location
Assisted Living Facilities:
Heritage Woods Agawam, MA
(ET Sub-Heritage Woods, L.L.C.)
Willowbrook Clarks Summit, PA
(ET Sub-Willowbrook Limited Partnership, L.L.P.)
Riverview Ridge Wilkes-Barre, PA
(ET Sub-Riverview Ridge Limited Partnership, L.L.P.)
Highgate at Paoli Point Paoli, PA
(ET Sub-Highgate, L.P.)
The Woodbridge Kimberton, PA
(ET Sub-Woodbridge, L.P.)
Independent Living Facility:
Pleasant View Concord, NH
(ET Sub-Pleasant View, L.L.C.)
Skilled Nursing Facilities (9):
Rittenhouse CC Philadelphia, PA
(ET Sub-Rittenhouse Limited Partnership, L.L.P.)
Lopatcong CC Lopatcong, NJ
(ET Sub-Lopatcong, L.L.C.)
Phillipsburg CC Phillipsburg, NJ
(ET Sub-Phillipsburg I, L.L.C.)
Wayne NRC Wayne, PA
(ET Sub-Wayne I Limited Partnership, L.L.P.)
Belvedere NRC Chester, PA
(ET Sub-Belvedere Limited Partnership, L.L.P.)
Chapel Manor NRC Philadelphia, PA
(ET Sub-Chapel Manor Limited Partnership, L.L.P.)
Harston Hall NCH Flourtown, PA
(ET Sub-Harston Hall Limited Partnership, L.L.P.)
Pennsburg Manor NRC Pennsburg, PA
(ET Sub-Pennsburg Manor Limited Partnership, L.L.P.)
Silverlake NRC Bristol, PA
(ET Sub-Silverlake Limited Partnership, L.L.P.)
Medical Office and Other Buildings:
Professional Office Building I Upland, PA
(ET Sub-POB I Limited Partnership, L.L.P.)
Salisbury Medical Office Building Salisbury, MD
ET Sub-SMOB, L.L.C.
Windsor Office Building Windsor, CT
ET Sub-Windsor I, L.L.C.
Windsor Clinic/Training Facility Windsor, CT
(ET Sub-Windsor II, L.L.C.)
Lacey Branch Office Building Forked River, NJ
ET Sub-Lacey I, L.L.C.
To Be Acquired
Riverview Ridge Wilkes-Barre, PA
(ET Sub-Riverview Ridge Limited Partnership, L.L.P.)
Silverlake NRC Bristol, PA
(ET Sub-Silverlake Limited Partnership, L.L.P.)
DCMH Medical Office Building (23) Drexel Hill, PA
(ET Sub-DCMH Limited Partnership, L.L.P.)
SCHEDULE IV
-----------
SUBSIDIARIES
Subsidiary Owner Percentage Owned
- ---------- ----- ----------------
ET GENPAR, L.L.C. Borrower 100%
ET Sub-Heritage Woods, L.L.C. Borrower 100%
ET Sub-Pleasant View, L.L.C. Borrower 100%
ET Sub-Lopatcong, L.L.C. Borrower 100%
ET Sub-Phillipsburg I, L.L.C. Borrower 100%
ET Sub-SMOB, L.L.C. Borrower 100%
ET Sub-Windsor I, L.L.C. Borrower 100%
ET Sub-Windsor II, L.L.C. Borrower 100%
ET Sub-Lacey I, L.L.C. Borrower 100%
ET Sub-Willowbrook Limited Partnership, Borrower 99.9% (LP)
L.L.P. ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Riverview Ridge Limited Partnership, Borrower 99.9% (LP)
L.L.P. ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Highgate, L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Woodbridge, L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Rittenhouse Limited Partnership, Borrower 99.9% (LP)
L.L.P. ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Wayne I Limited Partnership, L.L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Belvedere Limited Partnership, L.L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Pennsburg Manor Limited Partnership, Borrower 99.9% (LP)
L.L.P. ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-POB I Limited Partnership, L.L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Riverview Ridge Limited Partnership, Borrower 99.9% (LP)
L.L.P. ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Silverlake Limited Partnership, L.L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-DCMH Limited Partnership, L.L.P. Borrower 99.9% (LP)
ET GENPAR, L.L.C. 0.1% (GP)
Subsidiary Owner Percentage Owned
- ---------- ----- ----------------
ET Sub-Chapel Manor Limited Partnership, Borrower 99.9% (LP)
L.L.P.(1) ET GENPAR, L.L.C. 0.1% (GP)
ET Sub-Harston Hall Limited Partnership, Borrower 99.9% (LP)
L.L.P.(2) ET GENPAR, L.L.C. 0.1% (GP)
ET Capital Corp. Borrower 95% Equity
0% Voting
Edward B. Romanov, Jr. 5% Equity
100% Voting
- --------
(1) This entity will not become operational and will be dissolved promptly
following the Effective Time.
(2) This entity will not become operational and will be dissolved promptly
following the Effective Time.
SCHEDULE V
----------
INDEBTEDNESS
Aggregate Principal
Borrower Guarantor(s) Amount as of the Effective Date
- -------- ------------ -------------------------------
ET Sub-Woodbridge, L.P. REIT $9,945,000
ET Sub-Highgate, L.P. REIT $9,680,000
ET Sub-Belvedere Limited Partnership, N/A $9,954,174
L.L.P.
ET Sub-Lacey I, L.L.C. Borrower $494,488
ET Sub-Phillipsburg I, L.L.C. N/A $2,025,000 in the form of bonds
secured by the property owned by the
Subsidiary but not assumed by the
Subsidiary and included herein
pursuant to clause (iii) of the
definition of "Indebtedness" in
Article X of the Agreement
ET Sub-Willowbrook Limited N/A $4,115,000 in the form of bonds
Partnership, L.L.P. secured by the property owned by the
Subsidiary but not assumed by the
Subsidiary and included herein
pursuant to clause (iii) of the
definition of "Indebtedness" in
Article X of the Agreement
ET Sub-Riverview Ridge Borrower $2,739,000
Limited Partnership L.L.P.
SCHEDULE VI
-----------
INSURANCE
---------
The Borrower will maintain, at a minimum, the following insurance:
Type of Insurance Limits
------
A. Property
"All-Risk" property insurance for physical Replacement Cost
damage to real and personal property,
including
a) coverage for the peril of As provided in Section 7.03 of the Credit
flood to the extent available under the Agreement
National Flood Insurance
b) coverage for the peril of As provided in Section 7.03(iv) of the Credit
earthquake Agreement
c) business interruption Actual Loss Sustained basis
insurance for a period of not less than
eighteen months
B. General Liability including Automobile $100,000,000
C. Workers Compensation Statutory
SCHEDULE VII
------------
EXISTING LIENS
--------------
NONE
SCHEDULE VIII
-------------
EXISTING MORTGAGES AND NOTES
Note, dated as of the date hereof, from Philadelphia Avenue Associates to
ElderTrust Operating Limited Partnership, in an amount not to exceed $5,164,000.
Open-End Mortgage and Security Agreement, dated as of the date hereof, between
Philadelphia Avenue Associates and ElderTrust Operating Limited Partnership
(title commitment no. H185775EP).
Note, dated as of the date hereof, from Delm Nursing, Inc. to ElderTrust
Operating Limited Partnership, in an amount not to exceed $6,511,000.
Open-End Mortgage and Security Agreement, dated as of the date hereof, between
Delm Nursing, Inc. and ElderTrust Operating Limited Partnership (title
commitment no. D170198MA).
Note, dated as of the date hereof, from Volusia Meridian Limited Partnership to
Genesis Health Ventures, Inc., in an amount not to exceed $4,577,000.
Mortgage and Security Agreement dated as of the date hereof, between Volusia
Meridian Limited Partnership and ElderTrust Operating Limited Partnership (title
commitment no. OD97864).
Note, dated as of the date hereof, from Wyncote Healthcare Corp. to ElderTrust
Operating Limited Partnership, in an amount not to exceed $5,380,000.
Open-End Mortgage and Security Agreement, dated as of the date hereof, between
Wyncote Healthcare Corp. and ElderTrust Operating Limited Partnership (title
commitment no. D176372JP).
Note, dated as of the date hereof, from Lehigh Nursing Homes, Inc. to ElderTrust
Operating Limited Partnership, in an amount not to exceed $6,665,000.
Open-End Mortgage and Security Agreement, dated as of the date hereof, between
Lehigh Nursing Homes, Inc. and ElderTrust Operating Limited Partnership (title
commitment no. H185814EP).
Note, dated as of the date hereof, from Berks Nursing Homes, Inc. to ElderTrust
Operating Limited Partnership, in an amount not to exceed $6,269,000.
Open-End Mortgage and Security Agreement, dated as of the date hereof, between
Berks Nursing Homes, Inc. and ElderTrust Operating Limited Partnership (title
commitment no. H185801EP).
Construction Mortgage Note, dated as of September 30, 1997, by Senior
LifeChoice, LLC payable to the order of Genesis Health Ventures, Inc., in an
amount not to exceed $9,500,000, as assigned to ElderTrust Operating Limited
Partnership pursuant to an Assignment and Assumption Agreement, dated as of the
date hereof.
Open-End Mortgage and Security Agreement, dated as of September 30, 1997,
between Senior LifeChoice, LLC and Genesis Health Ventures, Inc. , as assigned
to ElderTrust Operating Limited Partnership pursuant to an Assignment and
Assumption Agreement, dated as of the date hereof.
Note, dated as of November 11, 1997, from Geri-Med. Corp. to Philadelphia
Suburban Development Corporation in the principal amount of $800,000, as
assigned to ElderTrust Operating Limited Partnership pursuant to an Assignment
and Assumption Agreement dated as of the date hereof.
Open-End Mortgage and Security Agreement, dated as of November 11, 1997 between
Philadelphia Suburban Development Corporation and Geri-Med Corp., as assigned to
ElderTrust Operating Limited Partnership pursuant to an Assignment Agreement
dated as of the date hereof.
EXHIBIT A
---------
NOTICE OF BORROWING
[Date]
German American Capital Corporation,
as Administrative Agent
for the Banks party
to the Credit Agreement referred
to below
31 West 52nd Street
New York, New York 10019
Attention:
Ladies and Gentlemen:
The undersigned, ElderTrust Operating Limited Partnership, a
Delaware limited partnership (the "Borrower"), refers to the Credit Agreement,
dated as of January 30, 1998 (as amended from time to time, the "Credit
Agreement," the terms defined therein being used herein as therein defined),
among ElderTrust, the Borrower, various Banks (the "Banks"), Deutsche Bank AG,
New York Branch, as Issuing Bank, and you, as Administrative Agent for the Banks
and the Issuing Bank, and hereby gives you irrevocable notice pursuant to
Section 1.03(a) of the Credit Agreement, that the undersigned hereby requests a
Borrowing of Revolving Loans under the Credit Agreement, and in that connection
sets forth below the information relating to such Borrowing (the "Proposed
Borrowing") as required by Section 1.03(a) of the Credit Agreement:
(i) The Business Day of the Proposed Borrowing is
, .(1)
---------- ---
(ii) The aggregate principal amount of the
Proposed Borrowing is $ .
----------
(iii) The Revolving Loans to be made pursuant to the
Proposed Borrowing shall be initially maintained as [Base Rate Loans]
[Eurodollar Loans].
[(iv) The initial Interest Period for the Proposed
Borrowing is _____ month(s).](2)
- ------------------------
1 Shall be a Business Day at least one Business Day in the case of Base Rate
Loans and three Business Days in the case of Eurodollar Loans, in each case
after the date hereof.
2 To be included for a Proposed Borrowing of Eurodollar Loans.
The undersigned hereby certifies that the following statements
are true on the date hereof, and will be true on the date of the Proposed
Borrowing:
(A) the representations and warranties contained in the Credit
Agreement and in the other Credit Documents are and will be true and
correct in all material respects, both before and after giving effect
to the Proposed Borrowing and to the application of the proceeds
thereof, as though made on such date (it being understood and agreed
that any representation or warranty which by its terms is made as of a
specified date shall be required to be true and correct in all material
respects only as of such specified date);
(B) no Default or Event of Default has occurred and is
continuing, or would result from such Proposed Borrowing or from the
application of the proceeds thereof; and
(C) set forth on Annex A attached hereto is the information
required by Section 5.04(a) of the Credit Agreement, and each of the
applicable conditions referred to in Sections 5.04(b), (c) and (d) of
the Credit Agreement has been satisfied or will be satisfied on or
before the date of the Proposed Borrowing.
Very truly yours,
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By: ElderTrust, its general partner
By:_______________________________
Name:
Title:
ANNEX A
[Set forth in reasonable detail the specific uses for the
proceeds of such Revolving Loans and show the categories of
such uses]
EXHIBIT B-1
-----------
NOTE
$_____________ New York, New York
------ ---, ----
FOR VALUE RECEIVED, ELDERTRUST OPERATING LIMITED PARTNERSHIP,
a Delaware limited partnership (the "Borrower"), hereby promises to pay to
GERMAN AMERICAN CAPITAL CORPORATION or its registered assigns (the "Bank"), in
lawful money of the United States of America in immediately available funds, at
the office of German American Capital Corporation (the "Administrative Agent")
located at 31 West 52nd Street, New York, New York 10019 on the Maturity Date
(as defined in the Agreement referred to below) the principal sum of
_______________________ DOLLARS ($____________) or, if less, the unpaid
principal amount of all Loans (as defined in the Agreement) made by the Bank
pursuant to the Agreement.
The Borrower promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at the rates and at the times provided in Section 1.08 of the Agreement.
This Note is one of the Notes referred to in the Credit
Agreement, dated as of January 30, 1998, among ElderTrust, the Borrower, the
lenders from time to time party thereto (including the Bank), Deutsche Bank AG,
New York Branch, as Issuing Bank, and the Administrative Agent (as amended,
modified or supplemented from time to time, the "Agreement") and is entitled to
the benefits thereof and of the other Credit Documents (as defined in the
Agreement). This Note is secured by the Security Documents (as defined in the
Agreement) and is entitled to the benefits of the Guaranties (as defined in the
Agreement). This Note is subject to voluntary prepayment and mandatory repayment
prior to the Maturity Date, in whole or in part, as provided in the Agreement,
and Loans may be converted from one Type (as defined in the Agreement) into
another Type to the extent provided in the Agreement.
In case an Event of Default (as defined in the Agreement)
shall occur and be continuing, the principal of and accrued interest on this
Note may be declared to be or may become due and payable in the manner and with
the effect provided in the Agreement.
The Borrower hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND BE
GOVERNED BY THE LAWS OF THE STATE OF NEW YORK.
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By: ElderTrust, its general partner
By: _____________________________
Name:
Title:
EXHIBIT B-2
-----------
LETTER OF CREDIT REQUEST
No. 1 Dated 2
----- -----
German American Capital Corporation, as Administrative Agent under the Credit
Agreement (as amended, modified or supplemented from time to time, the
"Credit Agreement"), dated as of January 30, 1998, among ElderTrust, a
Maryland real estate investment trust (the "REIT"), ElderTrust
Operating Limited Partnership, a Delaware limited partnership (the
"Borrower"), various lenders (the "Banks") from time to time party
thereto, Deutsche Bank AG, New York Branch, as Issuing Bank (the
"Issuing Bank") and the Administrative Agent
31 West 52nd Street
New York, New York 10019.
Attention: ______________________]
Dear Sirs:
We hereby request that Deutsche Bank AG, New York Branch, in
its capacity as Issuing Bank under the captioned Credit Agreement, issue a
standby Letter of Credit for the account of the undersigned on 3 (the "Date of
Issuance") in the aggregate stated amount of 4 . The requested Letter of Credit
shall be denominated in Dollars.
For purposes of this Letter of Credit Request, unless
otherwise defined herein, all capitalized terms used herein which are defined in
the Credit Agreement shall have the respective meanings provided therein.
The beneficiary of the requested Letter of Credit will be 5 ,
and such Letter of Credit will be in support of 6 and will have a stated
expiration date of 7 .
- ------------------------
1 Letter of Credit Request Number.
2 Date of Letter of Credit Request.
3 Date of Issuance which shall be at least five Business Days after the
date of this Letter of Credit Request (or such shorter period as is
acceptable to the Issuing Bank).
4 Aggregate initial stated amount of Letter of Credit.
5 Insert name and address of beneficiary.
6 Insert description of L/C Supportable Obligations.
7 Insert last date upon which drafts may be presented which may not be
later than the earlier of (x) the date which occurs 12 months after the
Date of Issuance, or, if any such standby Letter of Credit is
automatically extendable for successive periods of up to 12 months, a
date not beyond the third Business Day prior to the Maturity Date or
(y) the third Business Day prior to the Maturity Date.
We hereby certify that:
(1) the representations and warranties contained in the Credit
Documents will be true and correct in all material respects on the Date of
Issuance, both before and after giving effect to the issuance of the Letter of
Credit requested hereby (it being understood and agreed that any representation
or warranty which by its terms is made as of a specified date shall be required
to be true and correct in all material respects only as of such specified date);
and
(2) no Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of Credit
requested hereby, would such a Default or an Event of Default occur.
ELDERTRUST OPERATING LIMITED PARTNERSHIP
By: ElderTrust, its General Partner
By
---------------------------------------
Name:
Title:
EXHIBIT C
---------
FORM OF SECTION 3.04(b)(ii) CERTIFICATE
Reference is hereby made to the Credit Agreement, dated as of
January 30, 1998, among ElderTrust, ElderTrust Operating Limited Partnership,
the lenders from time to time party thereto, Deutsche Bank AG, New York Branch,
as Issuing Bank, and German American Capital Corporation, as Administrative
Agent (as amended from time to time, the "Credit Agreement"). Pursuant to the
provisions of Section 3.04(b)(ii) of the Credit Agreement, the undersigned
hereby certifies that it is not a "bank" as such term is used in Section
881(c)(3)(A) of the Internal Revenue Code of 1986, as amended.
[NAME OF BANK]
By______________________________
Name:
Title:
Date: _________________, _____
EXHIBIT D
---------
January 30, 1998
German American Capital Corporation,
as Administrative Agent
31 W. 52nd Street
New York, New York 10019
Re: Credit Agreement dated as of January 30, 1998 among ElderTrust,
ElderTrust Operating Limited Partnership, the Banks listed
therein, Deutsche Bank AG, New York Branch, as Issuing Bank, and
German American Capital Corporation, as Administrative Agent and
Collateral Agent
Ladies and Gentlemen:
This firm has acted as counsel to ElderTrust, a Maryland real
estate investment trust (the "REIT"), ElderTrust Operating Limited Partnership,
a Delaware limited partnership (the "Borrower"), and the subsidiaries of the
Borrower identified on Schedule I attached hereto (individually, a "Subsidiary"
and collectively, the "Subsidiaries"), in connection with the Credit Agreement,
dated as of January 30, 1998 (the "Credit Agreement"), among the REIT, the
Borrower, the banks listed on the signature pages thereof (the "Banks"),
Deutsche Bank AG, New York Branch, as Issuing Bank, and German American Capital
Corporation, as Administrative Agent and Collateral Agent (the "Agent"). This
opinion letter is furnished to you pursuant to the requirements set forth in
Section 4.03 of the Credit Agreement in connection with the Closing thereunder
on the date hereof. Capitalized terms used herein which are defined in the
Credit Agreement shall have the meanings set forth in the Credit Agreement,
unless otherwise defined herein.
For purposes of this opinion letter, we have examined copies
of the following documents:
1. Executed copy of the Credit Agreement.
2. Executed copy of the Note.
3. Executed copy of the Pledge Agreement.
4. Executed copy of the Pledge and Security Agreement.
5. Executed copy of the Security Agreement.
6. Executed copy of the Subsidiaries Guaranty.
7. Executed copies of the Mortgages identified on Schedule II
attached hereto (the "Mortgages"), including the
Mortgage upon property owned by ET Sub-SMOB, L.L.C.
("SMOB") to be recorded in Wicomico County, Maryland
(the "Maryland Mortgage").
8. Executed copies of the Collateral Assignments identified
on Schedule III attached hereto (the "Collateral
Assignments").
9. Completed UCC-1 forms naming the Borrower, the REIT
(doing business as "ElderTrust REIT Co.") and each of
the Subsidiaries as debtors and the Agent as secured
party and executed by the Borrower, the REIT and each of
the Subsidiaries, which UCC-1 forms (collectively, the
"Credit Party Financing Statements") have been prepared
for filing in the office of the Pennsylvania Department
of State and in the chattel records of the Prothonotary
of Chester County, Pennsylvania (collectively, the
"Pennsylvania Filing Offices").
10. Completed UCC-1 forms naming SMOB as debtor and the
Agent as secured party and executed by SMOB, which
UCC-1 forms (the "SMOB Financing Statements") have
been prepared for filing in the Pennsylvania Filing
Offices and in the office of the Maryland State
Department of Assessments and Taxation ("MSDAT") (the
"Maryland Filing Office"); and a completed UCC-1 form
naming SMOB as debtor and the Agent as secured party
and executed by SMOB, which UCC-1 form (the "Fixture
Filing") has been prepared for filing in the land
records of Wicomico County, Maryland.
11. The Amended and Restated Certificate of Limited Partnership
of the Borrower, as certified by the Secretary of State of
the State of Delaware on January 30, 1998, and as certified
by the Secretary of the REIT, as general partner of the
Borrower, on the date hereof as being complete, accurate
and in effect.
12. The Second Amended and Restated Agreement of Limited
Partnership of the Borrower, as certified by the Secretary
of the REIT on the date hereof as being complete, accurate
and in effect.
13. A certificate of good standing of the Borrower issued by
the Secretary of State of the State of Delaware dated
January 30, 1998.
14. A letter from CT Corporation System ("CT") dated January
29, 1998 stating that the Borrower's application for
qualification to do business in the Commonwealth of
Pennsylvania was filed on January 27, 1998.
15. The Amended and Restated Declaration of Trust of the REIT
filed with the MSDAT on January 28, 1998, as certified by
the Secretary of the REIT on the date hereof as being
complete, accurate and in effect; and a certificate from
the MSDAT dated January 29, 1998 stating that the REIT's
Amended and Restated Declaration of Trust was accepted and
approved for filing with the MSDAT on January 28, 1998.
16. The Amended and Restated Bylaws of the REIT, as certified
by the Secretary of the REIT on the date hereof as being
complete, accurate and in effect.
17. A certificate of good standing of the REIT issued by the
MSDAT dated January 28, 1998 and a letter from CT dated
January 30, 1998 stating that CT has confirmed by telephone
with the MSDAT that the REIT is active as of such date.
18. A letter from CT dated January 29, 1998 stating that the
REIT's application for qualification to do business in the
Commonwealth of Pennsylvania (under the name "ElderTrust
REIT Co.") was filed on January 27, 1998.
19. With respect to each of the Subsidiaries that is a limited
liability company, as shown on Schedule I attached hereto
(the "LLC Subsidiaries"), (i) the certificate of formation
of such Subsidiary, as certified by the Secretary of State
of the State of Delaware on January 27, 1998, and as
certified by the Secretary of the REIT, on behalf of the
Borrower, as the sole member of each of such Subsidiaries,
on the date hereof as being complete, accurate and in
effect, and (ii) the limited liability company agreement of
such Subsidiary, as certified by the Secretary of the REIT
on the date hereof as being complete, accurate and in
effect.
20. With respect to each of the Subsidiaries that is a
registered limited liability partnership, as shown on
Schedule I attached hereto (the "Partnership
Subsidiaries"), (i) the certificate of limited partnership
of such Subsidiary, as certified by the Virginia State
Corporation Commission ("VSCC") on January 28, 1998, and as
certified by the Secretary of the REIT, on behalf of the
Borrower, as the sole member of ET GENPAR, L.L.C
("GENPAR"), which is the general partner of each of such
Subsidiaries, on the date hereof as being complete,
accurate and in effect and (ii) the agreement of limited
partnership of such Subsidiary, as certified by the
Secretary of the REIT on the date hereof as being complete,
accurate and in effect.
21. Certificates of good standing of each of the Subsidiaries
issued by the Secretary of State of the State of Delaware
or the VSCC, as applicable, as further described on
Schedule I attached hereto.
22. A letter from CT, dated January 29, 1998 stating that each
Subsidiary's application for qualification to do business
in the Commonwealth of Pennsylvania was filed on January
27, 1998 and, if the Property owned by such Subsidiary is
located in Massachusetts or New Hampshire, that such
Subsidiary's application for qualification to do business
in such jurisdiction was filed on the date set forth in
such letter.
23. A foreign qualification certificate of ET-Sub Lopatcong,
L.L.C. ("Lopatcong") issued by the Secretary of State of
the State of New Jersey dated January 21, 1998; a foreign
qualification certificate of SMOB issued by the MSDAT dated
January 20, 1998; and foreign qualification certificates of
ET Sub-Windsor I, L.L.C. ("Windsor I") and ET Sub-Windsor
II, L.L.C. ("Windsor II") issued by the Secretary of State
of the State of Connecticut dated January 27, 1998.
24. Certain resolutions of the Board of Trustees of the REIT,
adopted by unanimous written consent dated as of January
30, 1998, as certified by the Secretary of the REIT on the
date hereof as being complete, accurate and in effect,
relating to, among other things, authorization of the
Credit Agreement, the Pledge Agreement, the Pledge and
Security Agreement and the Security Agreement and
arrangements in connection therewith.
25. Action by the REIT, as the sole general partner of the
Borrower, adopting certain resolutions by written consent
dated as of January 30, 1998, as certified by the Secretary
of the REIT on the date hereof as being complete, accurate
and in effect, relating to, among other things,
authorization on behalf of the Borrower of the Credit
Agreement, the Notes, the Pledge Agreement, the Pledge and
Security Agreement, the Security Agreement and the
Collateral Assignments and arrangements in connection
therewith.
26. Action by the Borrower, as the sole member of each of the
LLC Subsidiaries, adopting certain resolutions by written
consent dated as of January 30, 1998, as certified by the
Secretary of the REIT on the date hereof as being complete,
accurate and in effect, relating to, among other things,
authorization on behalf of the LLC Subsidiaries of the
Subsidiaries Guaranty, the Pledge Agreement, the Pledge and
Security Agreement, the Security Agreement and arrangements
in connection therewith.
27. Action by GENPAR, as the sole general partner of each of
the Partnership Subsidiaries, adopting certain resolutions
by written consent dated as of January 30, 1998, as
certified by the Secretary of the REIT on the date hereof
as being complete, accurate and in effect, relating to,
among other things, authorization on behalf of the
Partnership Subsidiaries of the Subsidiaries Guaranty, the
Pledge Agreement, the Pledge and Security Agreement, the
Security Agreement and arrangements in connection
therewith.
28. A certificate of the Secretary of the REIT, dated as of the
date hereof, as to the incumbency and signatures of certain
officers of the REIT.
29. Certain agreements and contracts to which either the
Borrower or the REIT is a party which were filed as
Exhibits to the REIT's Registration Statement on Form S-11
(No. 333-37451), filed with the Securities and Exchange
Commission on October 8, 1997, as amended (the
"Registration Statement").
30. A certificate of certain officers of the REIT, dated as of
the date hereof, as to certain facts relating to the REIT,
the Borrower and the Subsidiaries.
31. Hogan & Hartson L.L.P. litigation docket.
The Pledge Agreement, the Pledge and Security Agreement, the
Security Agreement and the Collateral Assignments are sometimes hereinafter
referred to collectively as the "Security Documents." The Credit Agreement, the
Note, the Security Documents and the Subsidiaries Guaranty are sometimes
hereinafter referred to collectively as the "Financing Documents." The New York
UCC, the Pennsylvania UCC, the Maryland UCC and the District of Columbia UCC (as
each such term is hereinafter defined), as applicable, are hereinafter referred
to as the "UCC."
We have not, except as specifically identified above, made any
independent review or investigation of factual or other matters, including the
organization, existence, good standing, assets, business or affairs of the
Borrower, the REIT or any of the Subsidiaries (collectively, the "Credit
Parties"). In our examination of the Financing Documents and the aforesaid
certificates, records, documents and agreements, we have assumed the genuineness
of all signatures (other than those on behalf of the Credit Parties on the
Financing Documents and the Mortgages), the legal capacity of all natural
persons, the accuracy and completeness of all documents submitted to us, the
authenticity of all original documents and the conformity to authentic original
documents of all documents submitted to us as copies (including telecopies). We
also have assumed the accuracy, completeness and authenticity of the foregoing
certifications (of public officials, governmental agencies and departments and
corporate officers) and statements of fact, on which we are relying, and have
made no independent investigations thereof. In rendering the following opinions
we have relied as to factual matters, without independent investigation, upon
the representations, warranties and certifications made by the Borrower, the
REIT and the Subsidiaries in or pursuant to the Financing Documents and the
Mortgages and upon the officers' certificates identified in Paragraphs 28 and 30
above. This opinion letter is given, and all statements herein are made, in the
context of the foregoing.
As used in this opinion letter, the phrase "to our knowledge"
means the actual knowledge (that is, the conscious awareness of facts or other
information) of lawyers in the firm who have given substantive legal attention
to representation of the Credit Parties in connection with the Credit Agreement
and the Registration Statement.
For purposes of this opinion letter, we have assumed that (i)
each of the parties to the Financing Documents and the Mortgages (other than the
Credit Parties) has all requisite power and authority under all applicable laws,
regulations and governing documents to execute and deliver the Financing
Documents and the Mortgages and to perform its obligations thereunder, (ii) each
of such parties has duly authorized, executed and delivered the Financing
Documents and the Mortgages to which it is a party, (iii) each of such parties
is validly existing and in good standing in all necessary jurisdictions, (iv)
the Financing Documents and the Mortgages constitute valid and binding
obligations of each such party, as applicable, enforceable against it in
accordance with their respective terms and (v) there has been no material mutual
mistake of fact or misunderstanding or fraud, duress or undue influence, in
connection with the negotiation, execution or delivery of the Financing
Documents and the Mortgages.
For purposes of the opinions expressed in Paragraphs (m)
through (q) below, we have made the following additional assumptions, without
any independent verification or investigation: (i) that each of the Credit
Parties owns the collateral or property described in the Security Documents
purported to be owned by it and the Maryland Mortgage, as applicable, (ii) that
the Credit Party Financing Statements and the SMOB Financing Statements will be
timely filed (and in any event within ten (10) days after the date hereof) in
the Pennsylvania Filing Office and the Maryland Filing Office, (iii) that
pending the completion of the filings of the Credit Party Financing Statements,
the SMOB Financing Statements and the Fixture Filing, operative facts (and
applicable law) will remain unchanged, and (iv) that the Pledged Notes and the
certificates representing the Pledged Stock (as such terms are defined in the
Pledge Agreement) and the Underlying Notes (as defined in the Collateral
Assignments) in existence on the date hereof (collectively, the "Possessory
Collateral") are being delivered to the Agent in the District of Columbia, who
will take such Possessory Collateral to New York, New York and maintain
possession thereof in the State of New York at all times thereafter.
This opinion letter is based as to matters of law solely on
applicable provisions of (i) the Delaware Revised Uniform Limited Partnership
Act, as amended (the "Delaware Limited Partnership Act"), (ii) the Delaware
Limited Liability Company Act, as amended (the "Delaware LLC Act"), (iii) the
Virginia Revised Uniform Limited Partnership Act, as amended (the "Virginia
Limited Partnership Act"), (iv) the Virginia Revised Uniform Partnership Act, as
amended (the "Virginia Partnership Act"), (v) New York law, including the
Uniform Commercial Code as in effect in the State of New York (the "New York
UCC") (but not including any statutes, ordinances, administrative decisions,
rules or regulations of any political subdivision of the State of New York),
(vi) Maryland law, including Title 8 of the Maryland Corporations and
Associations Code Annotated, as amended (the "Maryland REIT Law"), and the
Uniform Commercial Code as in effect in the State of Maryland (the "Maryland
UCC") (but not including any statutes, ordinances, administrative decisions,
rules or regulations of any political subdivision of the State of Maryland),
(vii) the Uniform Commercial Code as in effect in the Commonwealth of
Pennsylvania (the "Pennsylvania UCC"), (viii) the Uniform Commercial Code as in
effect in the District of Columbia (the "District of Columbia UCC") and (ix)
except as set forth below, federal statutes and regulations, including the
Investment Company Act of 1940, as amended (the "Investment Company Act"), and
Regulations G, T, U and X of the Board of Governors of the Federal Reserve
System; it being understood that, with respect to clauses (v), (vi) and (ix)
above, the opinions expressed below are based upon our review of those laws,
statutes and regulations that, in our experience, are normally applicable to
transactions of the type contemplated by the Financing Documents and the
Mortgages. Without limiting the generality of the foregoing, we express no
opinion as to federal or state antitrust or unfair competition laws or
regulations, tax laws or regulations or federal or state securities laws or
regulations, or any other laws, statutes, ordinances, rules or regulations not
expressly identified above.
Based upon, subject to and limited by the foregoing, we are of
the opinion that:
(a) The Borrower is a limited partnership formed, validly
existing and in good standing under the laws of the State of Delaware. The
Borrower has filed an application to qualify as a foreign limited partnership in
the Commonwealth of Pennsylvania on the date specified in the letter referred to
in Paragraph 14 above. The Borrower has the partnership power and partnership
authority under its limited partnership agreement and the Delaware Limited
Partnership Act to transact the business in which it is currently engaged, as
described in the REIT's final Prospectus dated January 26, 1998 (the
"Prospectus").
(b) The Borrower has the partnership power and partnership
authority under its limited partnership agreement and the Delaware Limited
Partnership Act to execute and deliver the Financing Documents to which it is a
party and to perform its obligations thereunder. The execution, delivery and
performance as of the date hereof by the Borrower of the Financing Documents to
which it is a party have been duly authorized by all necessary partnership
action of the Borrower.
(c) The REIT was formed, and is validly existing and in good
standing under the Maryland REIT Law. The REIT has filed an application to
qualify as a foreign real estate investment trust in the Commonwealth of
Pennsylvania under the name "ElderTrust REIT Co." on the date specified in the
letter referred to in Paragraph 18 above. The REIT has the trust power and trust
authority under its declaration of trust and the Maryland REIT Law to transact
the business in which it is currently engaged, as described in the Prospectus.
(d) The REIT has the trust power and trust authority under its
declaration of trust and bylaws and under the Maryland REIT Law to execute and
deliver the Financing Documents to which it is a party and to perform its
obligations thereunder. The execution, delivery and performance as of the date
hereof by the REIT of the Financing Documents to which it is a party have been
duly authorized by all necessary trust action of the REIT.
(e) Each of the LLC Subsidiaries is a limited liability
company formed, validly existing and in good standing under the laws of the
State of Delaware as of the dates of the certificates referred to in Paragraph
21 above. Each of the LLC Subsidiaries has filed an application to qualify as a
foreign limited liability company in the Commonwealth of Pennsylvania and, if
the Property owned by such Subsidiary is located in Massachusetts or New
Hampshire, such Subsidiary's application to qualify as a foreign limited
liability company in such jurisdiction was filed on the dates specified in the
letter referred to in Paragraph 22 above. Each of Lopatcong and SMOB is
registered as a foreign limited liability company in the States of New Jersey
and Maryland, respectively, as of the dates of the certificates referred to in
Paragraph 23 above. Windsor I and Windsor II are registered as foreign limited
liability companies as of the date of the certificates referred to in Paragraph
23 above. Each of the LLC Subsidiaries has the power and authority as a limited
liability company under its limited liability company agreement and the Delaware
LLC Act to transact the business in which it is currently engaged, as described
in the Prospectus.
(f) Each of the LLC Subsidiaries has the power and authority
as a limited liability company under its limited liability company agreement and
the Delaware LLC Act to execute and deliver, as applicable, the Subsidiaries
Guaranty, the Security Documents and the Mortgage to which it is a party and to
perform its obligations thereunder. The execution, delivery and performance as
of the date hereof by each of the LLC Subsidiaries, as applicable, of the
Subsidiaries Guaranty, the Security Documents and the Mortgage to which it is a
party have been duly authorized by all necessary limited liability company
action of such Subsidiary.
(g) Each of the Partnership Subsidiaries is a limited
partnership formed, validly existing and in good standing under the laws of the
Commonwealth of Virginia as of the dates of the certificates referred to in
Paragraph 21 above. Each of the Partnership Subsidiaries has filed an
application to qualify as a foreign limited partnership in the Commonwealth of
Pennsylvania on the dates specified in the letter referred to in Paragraph 22
above. Each of the Partnership Subsidiaries has the partnership power and
partnership authority under its limited partnership agreement, the Virginia
Limited Partnership Act and the Virginia Partnership Act to transact the
business in which it is currently engaged, as described in the Prospectus.
(h) Each of the Partnership Subsidiaries has the partnership
power and authority under its limited partnership agreement, the Virginia
Limited Partnership Act and the Virginia Partnership Act to execute and deliver,
as applicable, the Subsidiaries Guaranty, the Security Documents and the
Mortgage to which it is a party and to perform its obligations thereunder. The
execution, delivery and performance as of the date hereof by each of the
Partnership Subsidiaries, as applicable, of the Subsidiaries Guaranty, the
Security Documents and the Mortgage to which it is a party have been duly
authorized by all necessary partnership action of such Subsidiary.
(i) Each of the Financing Documents has been duly executed and
delivered on behalf of each of the Credit Parties, as applicable, and
constitutes a valid and binding obligation of such Credit Party, enforceable in
accordance with its terms, except as may be limited by (i) bankruptcy,
insolvency, reorganization, moratorium or other laws affecting creditors' rights
generally (including, without limitation, the effect of statutory and other law
regarding fraudulent conveyances, fraudulent transfers and preferential
transfers), (ii) as may be limited by the exercise of judicial discretion and
the application of principles of equity, including, without limitation,
requirements of good faith, fair dealing, conscionability and materiality
(regardless of whether such agreements are considered in a proceeding in equity
or at law) and (iii) that certain rights, remedies, waivers and other provisions
of the Financing Documents may not be enforceable in accordance with their
terms, but, subject to the exceptions, qualifications and limitations set forth
above and elsewhere in this opinion letter, such unenforceability would not
render the Financing Documents invalid as a whole or (A) preclude the
enforcement of the obligations of the Borrower to pay the principal of the Note
and interest thereon at the rate or rates set forth therein (except that no
opinion is expressed herein with respect to any increase in rate after default
other than as expressly set forth in Paragraph (t) below with respect to usury),
(B) preclude the enforcement of the obligations of the REIT and the Subsidiaries
under the Credit Agreement and the Subsidiaries Guaranty, respectively, to pay
the Guaranteed Obligations (as such term is defined in the Credit Agreement and
the Subsidiaries Guaranty, as applicable), (C) impair the Agent's right to
accelerate and demand payment of the Note upon the occurrence of an Event of
Default in accordance with the Credit Agreement and (D) assuming that the Agent
will comply with all requirements of applicable procedural and substantive law,
preclude the foreclosure of the liens and security interests created under the
Security Documents in accordance with Part 5 of Article 9 of the UCC (except
that no opinion is expressed herein with respect to the creation or perfection
of any liens or security interests under any of the Collateral Assignments other
than as expressly set forth in Paragraph (o) below with respect to the
Underlying Notes).
(j) The Maryland Mortgage has been duly executed and delivered
on behalf of SMOB and constitutes a valid and binding obligation of SMOB
enforceable in accordance with its terms, except as may be limited by (i)
bankruptcy, insolvency, reorganization, moratorium or other laws affecting
creditors' rights generally (including, without limitation, the effect of
statutory and other law regarding fraudulent conveyances, fraudulent transfers
and preferential transfers), (ii) as may be limited by the exercise of judicial
discretion and the application of principles of equity, including, without
limitation, requirements of good faith, fair dealing, conscionability and
materiality (regardless of whether such agreements are considered in a
proceeding in equity or at law) and (iii) that certain rights, remedies, waivers
and other provisions of the Maryland Mortgage may not be enforceable in
accordance with their terms, but, subject to the exceptions, qualifications and
limitations set forth above and elsewhere in this opinion letter, such
unenforceability would not render the Maryland Mortgage invalid as a whole or,
assuming that the Agent will comply with all requirements of applicable
procedural and substantive law, preclude the foreclosure of the liens and
security interests created under the Maryland Mortgage.
(k) The execution, delivery and performance as of the date
hereof by each of the Credit Parties of the Financing Documents and the
Mortgages do not, as to each such Credit Party, (i) violate the Maryland REIT
Law, the Delaware Limited Partnership Act, the Delaware LLC Act, the Virginia
Limited Partnership Act or the Virginia Partnership Act, as applicable, or its
declaration of trust, bylaws, limited partnership agreement, limited liability
company agreement, certificate of incorporation or bylaws, as applicable, (ii)
violate any applicable federal or New York or Maryland state statute or
regulation, or, to our knowledge, any order of any court or governmental
authority that is binding upon it, (iii) breach or constitute a default under
any agreement or contract filed as an exhibit to the Registration Statement to
which any Credit Party is a party or (iv) result in or cause the creation of any
lien upon any of its properties pursuant to any agreement or contract referred
to in clause (iii) above.
(l) No approval or consent of, or registration or filing with,
any federal or New York or Maryland state governmental authority is required to
be obtained or made by any of the Credit Parties in connection with the
execution, delivery and performance as of the date hereof by it, as applicable,
of the Financing Documents and the Mortgage to which it is a party.
The Pledge and Security Agreement and the Security Agreement
create in favor of the Agent security interests in each Credit Party's right,
title and interest in, to and under the collateral specified therein purported
to be owned by such Credit Party, to the extent that (i) such collateral
consists of general intangibles, accounts, documents, chattel paper, equipment,
inventory, instruments and proceeds of the foregoing (as such terms are defined
in the UCC), (ii) the UCC applies to security interests in such collateral and
(iii) creation of security interests in any collateral consisting of
governmental authorizations, licenses or permits, contracts with governmental
organizations or rights (including rights to payment) under such contracts is
permissible under applicable federal law and applicable state law other than the
UCC (to the extent encompassed by the foregoing clauses (i), (ii), and (iii),
the "Collateral"). To the extent that UCC security interests in the Collateral
owned by any of the Credit Parties, other than any such Collateral constituting
fixtures, or constituting equipment or inventory located outside the
Commonwealth of Pennsylvania, can be perfected currently by the filing of
financing statements under the UCC, the filing of the Credit Party Financing
Statements in the Pennsylvania Filing Offices, with the appropriate fees and
recording taxes (if any) paid, will be sufficient to perfect such security
interests. To the extent, if any, that the certificates representing the
partnership interests in the Borrower (the "Units") constitute "instruments"
under the UCC, the taking and retention of possession by the Agent of such
certificates representing the Units held by the REIT in accordance with the
terms of the Pledge and Security Agreement are sufficient to perfect such
security interests in such Units.
(m) The Pledge Agreement creates in favor of the Agent
security interests in each Credit Party's right, title and interest in, to and
under the Pledged Securities (as defined in the Pledge Agreement) pledged by
such Credit Party. The taking and retention of possession by the Agent of the
Notes and the certificate(s) representing the Pledged Stock in accordance with
the terms of the Pledge Agreement are sufficient to perfect such security
interests in the Pledged Securities.
(n) Insofar as New York law is the governing law, the
Collateral Assignments create in favor of the Agent security interests in the
Borrower's right, title, and interest in, to and under the Underlying Notes. The
taking and retention of possession by the Agent of the Underlying Notes in
accordance with the terms of the Collateral Assignments are sufficient to
perfect such security interests in the Underlying Notes.
(o) The Maryland Mortgage creates in favor of the Agent
security interests in SMOB's right, title and interest in, to and under the
property specified in the granting clauses thereof, to the extent that (i) such
property consists of general intangibles, accounts, equipment, inventory and
proceeds of the foregoing (as such terms are defined in the UCC), (ii) the UCC
applies to security interests in such property and (iii) creation of security
interests in any property consisting of governmental authorizations, licenses or
permits, contracts with governmental organizations or rights (including rights
to payment) under such contracts is permissible under applicable federal law and
applicable state law other than the UCC (to the extent encompassed by the
foregoing clauses (i), (ii) and (iii), the "Maryland Collateral"). To the extent
that UCC security interests in the Maryland Collateral owned by SMOB can be
perfected currently by the filing of financing statements under the UCC, the
filing of the SMOB Financing Statements in the Pennsylvania Filing Offices and
the Maryland Filing Office and the filing of the Fixture Filing in the land
records of Wicomico County, Maryland, in each case with the appropriate fees and
recording taxes, if any, paid, are sufficient to perfect such security
interests. Each of the SMOB Financing Statement which has been prepared for
filing in the Maryland Filing Office and the Fixture Filing satisfies the formal
requisites of financing statements set forth in Section 9-402 of the Maryland
UCC.
(p) The Maryland Mortgage satisfies the requirements relating
to the form of deeds of trust set forth in Section 4-202, Real Property Article,
of the Annotated Code of Maryland, sufficiently so that, upon proper recordation
and indexing of the Maryland Mortgage among the land records of Wicomico County,
Maryland, the Maryland Mortgage will create a valid lien on the Property
described therein in favor of the Agent.
(q) Neither the REIT nor the Borrower is an "investment
company" within the meaning of the Investment Company Act.
(r) The use by the Borrower of the Letters of Credit and of
the proceeds of the Loans as contemplated in the Credit Agreement does not
violate Regulations G, T, U or X of the Board of Governors of the Federal
Reserve System.
(s) Under applicable New York usury laws, the Banks and the
Issuing Bank are permitted to charge interest with respect to the Loans and any
Unpaid Drawings at the rate or rates set forth in the Credit Agreement and the
Notes. You have also asked us to assume for purposes of the subject matter
addressed in the next sentence that Maryland law is applicable. Based on that
assumption, under Section 12-103(e), Commercial Law Article, of the Annotated
Code of Maryland, the Banks and the Issuing Bank may charge interest with
respect to the Loans and any Unpaid Drawings at the rate or rates set forth in
the Credit Agreement and the Notes.
* * * * *
In addition, you have requested our opinion as to whether the
partnership interests in the Borrower (the "Units") constitute "securities"
within the meaning of Section 8-102 of the Delaware Uniform Commercial Code (the
"Delaware UCC"). Under Section 8-103(c) of the Delaware UCC, an interest in a
partnership is not a security unless it is dealt in or traded on securities
exchanges or in securities markets, its terms expressly provide that it is a
security governed by Article 8 of the Delaware UCC or it is an investment
company security. Because the Units do not satisfy any of these criteria, it is
our opinion that the Units are not "securities" for purposes of Article 8 of the
Delaware UCC.
* * * * *
Based solely upon the officers' certificate identified in
Paragraph 30 above and a review of this firm's litigation docket, we hereby
confirm to you that, to our knowledge, there are no actions, suits or
proceedings pending or threatened against any of the Credit Parties, or in which
any of the Credit Parties is a party, before any court or governmental
department, commission, board, bureau, agency or instrumentality that question
the validity of the Financing Documents or any action taken or to be taken
pursuant thereto, or that seek to enjoin or otherwise prevent the consummation
of the transactions contemplated by the Financing Documents or to recover in
damages or obtain other relief as a result thereof, or that, if determined
adversely to any such Credit Party, would result in any adverse change in the
financial condition of the REIT and its subsidiaries, taken as a whole, or the
Borrower and its subsidiaries, taken as a whole, which the REIT or the Borrower
has advised us is material.
We assume no obligation to advise you of any changes in the
foregoing subsequent to the delivery of this opinion letter. This opinion letter
has been prepared solely for your use and the use of the Banks and the Issuing
Bank in connection with the Closing under the Credit Agreement on the date
hereof, and should not be quoted in whole or in part or otherwise be referred
to, nor be filed with or furnished to any governmental agency or other person or
entity, without the prior written consent of this firm, except that your
successors and the Issuing Bank's successors and any transferees of the Notes
may rely upon this opinion letter (it being understood that this opinion letter
speaks only as of the date hereof, and that no such reliance will have any
effect on the scope, phrasing or originally intended use of this opinion
letter).
Very truly yours,
HOGAN & HARTSON L.L.P.
SCHEDULE I
----------
Borrower Subsidiaries
Type of Entity Date of
and Formation Good Standing
Name Jurisdiction Certificate
- ---- ---------------- -------------
ET GENPAR, L.L.C. Delaware LLC January 27, 1998
ET Sub-Heritage Woods, L.L.C. Delaware LLC January 27, 1998
ET Sub-Pleasant View, L.L.C. Delaware LLC January 27, 1998
ET Sub-Rittenhouse Limited Partnership, L.L.P. Virginia limited January 28, 1998
liability partnership
ET Sub-Lopatcong, L.L.C. Delaware LLC January 27, 1998
ET Sub-Wayne I Limited Partnership, L.L.P. Virginia limited January 28, 1998
liability partnership
ET Sub-Pennsburg Manor Limited Partnership, Virginia limited January 28, 1998
L.L.P. liability partnership
ET Sub-POB I Limited Partnership, L.L.P. Virginia limited January 28, 1998
liability partnership
ET Sub-SMOB, L.L.C. Delaware LLC January 27, 1998
ET Sub-Windsor I, L.L.C. Delaware LLC January 27, 1998
ET Sub-Windsor II, L.L.C. Delaware LLC January 27, 1998
SCHEDULE II
-----------
Mortgages
1. Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing Statement, made by ET Sub-Pennsburg Manor Limited
Partnership, L.L.P., as Mortgagor to German American Capital
Corporation, as Collateral Agent, as Mortgagee, dated as of January 30,
1998 (Harston Hall NRC).
2. Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing Statement, made by ET-Sub Heritage Woods, L.L.C., as
Mortgagor to German American Capital Corporation, as Collateral Agent,
as Mortgagee, dated as of January 30, 1998 (Heritage Woods).
3. Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing Statement, made by ET Sub-Lopatcong, L.L.C., as
Mortgagor to German American Capital Corporation, as Collateral Agent,
as Mortgagee, dated as of January 30, 1998 (Lopatcong Care Center).
4. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET Sub-Pennsburg Manor Limited
Partnership, L.L.P., as Mortgagor to German American Capital
Corporation, as Collateral Agent, as Mortgagee, dated as of January 30,
1998 (Pennsburg Manor NRC).
5. Mortgage, Assignment of Leases and Rents, Security Agreement and
Fixture Filing Statement, made by ET Sub-Pleasant View, L.L.C., as
Mortgagor to German American Capital Corporation, as Collateral Agent,
as Mortgagee, dated as of January 30, 1998 (Pleasant View Retirement
Center).
6. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET Sub-POB I Limited Partnership,
L.L.P., as Mortgagor to German American Capital Corporation, as
Collateral Agent, as Mortgagee, dated as of January 30, 1998
(Professional Office Building I).
7. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET Sub-Rittenhouse Limited
Partnership, L.L.P., as Mortgagor to German American Capital
Corporation, as Collateral Agent, as Mortgagee, dated as of January 30,
1998 (Rittenhouse Care Center).
8. Deed of Trust, Assignment of Leases and Rents, Security Agreement and
Fixture Filing Statement, made by ET Sub-SMOB. L.L.C., as Mortgagor to
the Trustee named therein for the benefit of German American Capital
Corporation, as Collateral Agent, as Mortgagee, dated as of January 30,
1998 (Salisbury MOB).
9. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET-Sub Wayne I Limited
Partnership, L.L.P., as Mortgagor to German American Capital
Corporation, as Collateral Agent, as Mortgagee, dated as of January 30,
1998 (Wayne NRC).
10. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET Sub-Windsor II, L.L.C., as
Mortgagor to German American Capital Corporation, as Collateral Agent,
as Mortgagee, dated as of January 30, 1998 (Windsor Clinic Training
Facility).
11. Open-End Mortgage, Assignment of Leases and Rents, Security Agreement
and Fixture Filing Statement, made by ET Sub-Windsor I, L.L.C., as
Mortgagor to German American Capital Corporation, as Collateral Agent,
as Mortgagee, dated as of January 30, 1998 (Windsor Office Building).
SCHEDULE III
------------
Collateral Assignments
1. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Coquina Place).
2. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Harbor Place).
3. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Mifflin).
4. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Lehigh Manor).
5. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Berkshire Manor).
6. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Oaks).
7. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Montchanin).
8. Assignment of Mortgage and Pledge Agreement between ElderTrust
Operating Limited Partnership, as Assignor and Pledgor, and German
American Capital Corporation, as Collateral Agent, dated as of January
30, 1998 (Sanatoga).
EXHIBIT E
---------
[NAME OF CREDIT PARTY]
Officers' Certificate
I, the undersigned, the [Secretary/Assistant Secretary] of
[NAME OF CREDIT PARTY] [NAME OF GENERAL PARTNER OF THE APPLICABLE PARTNERSHIP
CREDIT PARTY, the General Partner of _____________], a [corporation]
[partnership] [limited liability company] organized and existing under the laws
of the State of ________ (the "Company"), DO HEREBY CERTIFY that:
1. This Certificate is furnished pursuant to the Credit
Agreement, dated as of January 30, 1998 among ElderTrust, ElderTrust Operating
Limited Partnership, the lenders from time to time party thereto, Deutsche Bank
AG, New York Branch, as Issuing Bank, and German American Capital Corporation,
as Administrative Agent (such Credit Agreement, as in effect on the date of this
Certificate, being herein called the "Credit Agreement"). Unless otherwise
defined herein, capitalized terms used in this Certificate shall have the
meanings set forth in the Credit Agreement.
2. The following named individuals are presently the elected
officers of the Company, each holds the office of the Company set forth opposite
his or her name below and has held such office as of the date of signing of any
Credit Document. The signature written opposite the name and title of each such
officer below is his or her correct signature.
Name(1) Office Signature
- -------------------- -------------------- -------------------------
- -------------------- -------------------- -------------------------
- -------------------- -------------------- -------------------------
- -------------------- -------------------- -------------------------
3. Attached hereto as Exhibit A is a true and correct copy of
the [Certificate of Incorporation of the Company] [Certificate of Limited
Partnership of the Company] [Certificate of Limited Liability Company] as filed
in the Office of the Secretary of State of the State of its formation, together
with all amendments thereto adopted through the date hereof.
4. Attached hereto as Exhibit B is a true and correct copy of
the [By-Laws of the Company] [Partnership Agreement of the Company] [Limited
Liability Company Agreement], together with all amendments thereto, which were
duly adopted and are in full force and effect on the date hereof.
5. Attached hereto as Exhibit C is a true and correct copy of
resolutions which were duly adopted on __________, 1998 by [unanimous written
consent of the Board of [Directors] [Managers] of the Company] [the written
consent of the General Partner of the Company], and said resolutions have not
been rescinded, amended or modified. Except as attached hereto as Exhibit C, no
resolutions have been adopted by the Company which deal with the execution,
delivery or performance of any of the Credit Documents to which the Company is
party.
6. Attached hereto as Exhibit E are true and correct copies of
all Debt Agreements referred to in Section 4.05 of the Credit Agreement. 2
7. I know of no proceeding for the dissolution or liquidation
of the Company or threatening its existence.
IN WITNESS WHEREOF, I have hereunto set my hand this ___ day
of _______, 1998.
[NAME OF CREDIT PARTY]
------------------------------
Name:
Title:
- --------
1 Include name, office and signature of each officer who will sign any Credit
Document.
2 Insert for Officers' Certificates of the Borrower only.
EXHIBIT F-1
-----------
PLEDGE AGREEMENT
PLEDGE AGREEMENT, dated as of January 30, 1998 (as amended,
modified or supplemented from time to time, this "Agreement"), made by each of
the undersigned pledgors (each, a "Pledgor" and, together with any other entity
that becomes a party hereto pursuant to Section 22 hereof, the "Pledgors"), in
favor of GERMAN AMERICAN CAPITAL CORPORATION, as Collateral Agent (the
"Pledgee"), for the benefit of the Secured Creditors (as defined below). Except
as otherwise defined herein, capitalized terms used herein and defined in the
Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H :
WHEREAS, ElderTrust, a Maryland real estate investment trust
(the "REIT"), ElderTrust Operating Limited Partnership (the "Borrower"), various
lenders from time to time party thereto (the "Banks"), Deutsche Bank AG, New
York Branch, as Issuing Bank (the "Issuing Bank"), and German American Capital
Corporation, as Administrative Agent (together with any successor administrative
agent, the "Administrative Agent"), have entered into a Credit Agreement, dated
as of January 30, 1998, providing for the making of Loans to the Borrower and
the issuance of and participation in Letters of Credit for the account of the
Borrower, all as contemplated therein (as amended, modified or supplemented from
time to time, the "Credit Agreement") (the Banks, the Issuing Bank, the
Administrative Agent and the Pledgee are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or affiliates thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, are herein called the "Secured Creditors");
WHEREAS, pursuant to the Parent Guaranty, the Parent Guarantor
has guaranteed to the Secured Creditors the payment when due of all obligations
and liabilities of the Borrower under or with respect to the Credit Documents
and the Interest Rate Protection Agreements and Other Hedging Agreements;
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Protection Agreements and Other Hedging Agreements;
WHEREAS, it is a condition precedent to the extensions of
credit under the Credit Agreement that each Pledgor shall have executed and
delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities (including, without limitation, the principal of and interest on the
Notes (as defined in the Credit Agreement) issued by, and Loans made to, the
Borrower under the Credit Agreement, all reimbursement obligations and Unpaid
Drawings with respect to Letters of Credit, and all indemnities, fees, expenses
and interest thereon or owed thereunder) of such Pledgor to the Bank Creditors,
whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement and the other Credit Documents (including,
without limitation, in the case of the Guarantor, all of its obligations and
liabilities under its Guaranty) to which such Pledgor is a party and the due
performance and compliance by such Pledgor with all of the terms, conditions and
agreements contained in the Credit Agreement and in such other Credit Documents
(all such principal, interest, obligations and liabilities described in this
clause (i) being herein collectively called the "Credit Agreement Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of such Pledgor to the Other Creditors, whether now existing or
hereafter incurred under, arising out of or in connection with any Interest Rate
Protection Agreement or Other Hedging Agreement (including, without limitation,
in the case of the Guarantor, all of its obligations and liabilities under its
Guaranty) and the due performance and compliance by such Pledgor with all the
terms, conditions and agreements contained in the Interest Rate Protection
Agreements or Other Hedging Agreements (all such obligations and liabilities
described in this clause (ii) being herein collectively called the "Other
Obligations");
(iii) any and all reasonable sums advanced by the Pledgee in
order to preserve the Collateral (as hereinafter defined) or preserve its
security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any obligations or liabilities referred to in clauses (i) and
(ii) above, upon the occurrence and during the continuance of an Event of
Default (such term, as used in this Agreement, shall mean any Event of Default
under, and as defined in, the Credit Agreement, or any payment default (after
the expiration of any applicable grace period) under any Interest Rate
Protection Agreement or Other Hedging Agreement and shall in any event include,
without limitation, any payment default (after the expiration of any applicable
grace period) on any of the Obligations (as hereinafter defined)) shall have
occurred and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or realizing on
the Collateral, or of any exercise by the Pledgee of its rights hereunder,
together with reasonable attorneys' fees and court costs; and
(v) all amounts paid by any Indemnitee (as defined in Section
11 hereof) as to which such Indemnitee has the right to reimbursement under
Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF STOCK, NOTES, SECURITIES, ETC. As used
herein, (i) the term "Stock" shall mean all of the issued and outstanding shares
of capital stock at any time owned by any Pledgor of any corporation (other than
Excluded Stock) , (ii) the term "Notes" shall, except as otherwise defined
herein, mean all promissory notes from time to time issued to, or held by, any
Pledgor, (iii) the term "Securities" shall mean all of the Stock and Notes, and
(iv) the term "Excluded Stock" shall mean any shares of capital stock owned by
any Pledgor in any Subsidiary established after the date hereof which does not
own a Borrowing Base Property or a Borrowing Base Pledged Mortgage Loan and/or
an equity interest in any other Subsidiary which owns any Borrowing Base
Property or Borrowing Base Pledged Mortgage Loan, provided that the conditions
set forth in the last sentence of Section 8.12 of the Credit Agreement with
respect to such Subsidiary are satisfied. Each Pledgor represents and warrants
that on the date hereof (i) the Stock held by such Pledgor consists of the
number and type of shares of the stock of the corporations as described in Annex
A hereto, (ii) such Stock constitutes that percentage of the issued and
outstanding capital stock of the issuing corporation as is set forth in Annex A
hereto, (iii) the Notes held by such Pledgor consist of the promissory notes
described in Annex B hereto where such Pledgor is listed as the lender, and (iv)
such Pledgor owns no other Securities.
3. PLEDGE OF SECURITIES, ETC.
3.1. Pledge. To secure the Obligations of such Pledgor and for
the purposes set forth in Section 1 hereof, each Pledgor hereby: (i) grants to
the Pledgee a first priority security interest in all of the Collateral owned by
such Pledgor; (ii) pledges and deposits as security with the Pledgee the
Securities owned by such Pledgor, and delivers to the Pledgee certificates or
instruments therefor, duly endorsed in blank in the case of Notes and
accompanied by undated stock or other powers duly executed in blank by such
Pledgor in the case of certificated Stock, or such other instruments of transfer
as may be reasonably acceptable to the Pledgee; (iii) assigns, transfers,
hypothecates, mortgages, charges and sets over to the Pledgee all of such
Pledgor's right, title and interest in and to such Securities (and in and to all
certificates or instruments evidencing such Securities), to be held by the
Pledgee upon the terms and conditions set forth in this Agreement.
3.2. Subsequently Acquired Securities. If any Pledgor shall
acquire (by purchase, stock dividend or otherwise) any additional Securities at
any time or from time to time after the date hereof, such Pledgor will forthwith
(and in any event within five Business Days after receipt by such Pledgor
thereof) pledge and deposit such Securities (or certificates or instruments
evidencing such Securities) as security with the Pledgee and deliver to the
Pledgee certificates therefor or instruments thereof, duly endorsed in blank in
the case of Notes and accompanied by undated stock or other powers duly executed
in blank in the case of certificated Stock, or such other instruments of
transfer as may be reasonably acceptable to the Pledgee, and will promptly
thereafter deliver to the Pledgee a certificate executed by any Authorized
Officer of such Pledgor describing such Securities and certifying that the same
have been duly pledged with the Pledgee hereunder.
3.3. Uncertificated Securities. Notwithstanding anything to
the contrary contained in Sections 3.1 and 3.2 hereof, if any Securities
(whether now owned or hereafter acquired) are uncertificated securities, the
respective Pledgor shall promptly notify the Pledgee thereof, and shall promptly
take all actions required to perfect the security interest of the Pledgee under
applicable law (including, in any event, under Article 8 and Article 9 of the
New York UCC). Each Pledgor further agrees to take such actions as the Pledgee
deems necessary or desirable to effect the foregoing and to permit the Pledgee
to exercise any of its rights and remedies hereunder, and agrees to provide an
opinion of counsel reasonably satisfactory to the Pledgee with respect to any
such pledge of uncertificated Securities promptly upon the reasonable request of
the Pledgee.
3.4 Definition of Pledged Stock, Pledged Notes, Pledged
Securities and Collateral. All Stock at any time pledged or required to be
pledged hereunder is hereinafter called the "Pledged Stock", all Notes at any
time pledged or required to be pledged hereunder are hereinafter called the
"Pledged Notes", all of the Pledged Stock and Pledged Notes together are
hereinafter called the "Pledged Securities," which together with all proceeds
thereof, including any securities and moneys received with respect thereto and
at the time held by the Pledgee hereunder, are hereinafter called the
"Collateral."
4. APPOINTMENT OF SUB-AGENTS; ENDORSEMENTS, ETC. The Pledgee
shall have the right to appoint one or more sub-agents for the purpose of
retaining physical possession of the Pledged Securities, which may be held (in
the discretion of the Pledgee) in the name of the Pledgee, as pledgee, or
endorsed or assigned in blank or in favor of the Pledgee, as pledgee, or any
nominee or nominees of the Pledgee or a sub-agent appointed by the Pledgee. The
Pledgee agrees to promptly notify the relevant Pledgor after the appointment of
any sub-agent; provided, however, that the failure to give such notice shall not
affect the validity of such appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
an Event of Default shall have occurred and be continuing, each Pledgor shall be
entitled to exercise any and all voting and other consensual rights pertaining
to the Pledged Securities and to give consents, waivers or ratifications in
respect thereof; provided, that no vote shall be cast or any consent, waiver or
ratification given or any action taken which would violate or be inconsistent
with any of the terms of this Agreement, any other Credit Document or any
Interest Rate Protection Agreement or Other Hedging Agreement (collectively, the
"Secured Debt Agreements"), or which would have the effect of impairing the
position or interests of the Pledgee or any other Secured Creditor. All such
rights of such Pledgor to vote and to give consents, waivers and ratifications
shall cease in case an Event of Default shall occur and be continuing, and
Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends or
distributions payable in respect of the Pledged Stock and all payments in
respect of the Pledged Notes shall be paid to the respective Pledgor; provided,
that all cash dividends or distributions payable in respect of the Pledged Stock
which are determined by the Pledgee to represent in whole or in part an
extraordinary, liquidating or other distribution in return of capital shall be
paid, to the extent so determined to represent an extraordinary, liquidating or
other distribution in return of capital, to the Pledgee and retained by it as
part of the Collateral. The Pledgee shall also be entitled to receive directly,
and to retain as part of the Collateral:
(i) all other or additional stock or other securities or
property (other than cash) paid or distributed by way of dividend or otherwise
in respect of the Pledged Stock;
(ii) all other or additional stock or other securities or
property (including cash) paid or distributed in respect of the Pledged Stock by
way of stock-split, spin-off, split-up, reclassification, combination of shares
or similar rearrangement; and
(iii) all other or additional stock or other securities or
property (including cash) which may be paid in respect of the Collateral by
reason of any consolidation, merger, exchange of stock, conveyance of assets,
liquidation or similar corporate reorganization.
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, by any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall be
entitled, without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable remedies:
(i) to receive as Collateral all amounts payable in respect of
the Collateral payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Pledged Securities
into the Pledgee's name or the name of its nominee or nominees;
(iii) to accelerate any Pledged Note which may be accelerated
in accordance with its terms, and take any other action to collect upon any
Pledged Note (including, without limitation, to make any demand for payment
thereon);
(iv) to vote all or any part of the Pledged Stock (whether or
not transferred into the name of the Pledgee) and give all consents, waivers and
ratifications in respect of the Collateral and otherwise act with respect
thereto as though it were the outright owner thereof; and
(v) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the Collateral, or any
interest therein, at any public or private sale, without demand of performance,
advertisement or notice of intention to sell or of the time or place of sale or
adjournment thereof (except as provided below) or to redeem or otherwise (all of
which are hereby waived by each Pledgor), for cash, on credit or for other
property, for immediate or future delivery without any assumption of credit
risk, and for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; provided, that at least 10 days' prior
written notice of the time and place of any such sale shall be given to such
Pledgor. Each Pledgor hereby waives and releases to the fullest extent permitted
by law any right or equity of redemption with respect to the Collateral, whether
before or after sale hereunder, and all rights, if any, of marshalling the
Collateral and any other security for the Obligations or otherwise. The Pledgee
may, without notice or publication, adjourn any public or private sale or cause
the same to be adjourned from time to time by announcement at the time and place
fixed for the sale, and such sale may be made at any time or place to which the
sale may be so adjourned. At any such sale, unless prohibited by applicable law,
the Pledgee on behalf of the Secured Creditors may bid for and purchase all or
any part of the Collateral so sold free from any such right or equity of
redemption. Neither the Pledgee nor any other Secured Creditor shall be liable
for failure to collect or realize upon any or all of the Collateral or for any
delay in so doing nor shall any of them be under any obligation to take any
action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other Secured Debt Agreement
or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. By accepting the
benefits of this Agreement, the Secured Creditors agree that this Agreement may
be enforced only by the action of the Pledgee, acting upon the instructions of
the Required Secured Creditors (as defined in the Security Agreement) and that
no other Secured Creditor shall have any right individually to seek to enforce
or to enforce this Agreement or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may be
exercised by the Pledgee for the benefit of the Secured Creditors in accordance
with the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided by Section 5.4 of the
Security Agreement.
(b) It is understood and agreed that the Borrower shall remain
liable, the Parent Guarantor shall remain liable, and the Subsidiary Guarantors
shall remain jointly and severally liable, in each case to the extent of any
deficiency between the amount of the proceeds of the Collateral hereunder and
the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. (a) Each Pledgor agrees jointly and severally
to indemnify, reimburse and hold harmless the Pledgee, each other Secured
Creditor and their respective successors, assigns, employees, agents and
servants (hereinafter in this Section 11 referred to individually as an
"Indemnitee," and collectively as the "Indemnitees") from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and costs, expenses or disbursements (including
reasonable attorneys' fees and expenses) (for the purposes of this Section 11
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith and therewith or the
enforcement of any of the terms of, or the preservation of any rights under any
such document, or in any way relating to or arising out of the ownership,
control, acceptance, possession, condition, sale or other disposition, or use of
the Collateral; provided that no Indemnitee shall be indemnified pursuant to
this Section 11(a) for expenses to the extent caused by the gross negligence or
willful misconduct of such Indemnitee. Each Pledgor agrees that upon written
notice by any Indemnitee of the assertion of such a liability, obligation,
damage, injury, penalty, claim, demand, action, suit or judgment, the relevant
Pledgor shall to the extent requested to do so assume full responsibility for
the defense thereof. Each Indemnitee agrees to promptly notify the relevant
Pledgor of any such assertion of which such Indemnitee has knowledge; provided
that the failure to give such notice shall not affect such Indemnitee's right to
indemnification hereunder except to the extent (but only to the extent) that
such Indemnitee's damages are increased as a result of such failure.
(b) Without limiting the application of Section 11(a) hereof,
each Pledgor agrees jointly and severally to pay or reimburse the Pledgee for
any and all reasonable fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Pledgee's Liens on, and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Pledgee's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, such Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. FURTHER ASSURANCES. Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the UCC of any jurisdiction such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement and the Security Agreement all items of the Collateral at
any time received under this Agreement. It is expressly understood and agreed
that the obligations of the Pledgee as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in the
Security Agreement. By accepting the benefits hereof, each Secured Creditor
shall be deemed to have agreed to the terms and conditions set forth in Article
VIII of the Security Agreement, as the same may be amended, supplemented or
otherwise modified from time to time, which is incorporated herein by reference
in its entirety; provided that all references therein to "this Agreement" shall
be a reference to this Agreement, provided further that all references therein
to any "Assignor" shall be a reference to any "Pledgor," and provided further
that all references therein to the "Collateral Agent" shall be a reference to
the "Pledgee." The Pledgee shall act hereunder on the terms and conditions set
forth herein and in the Security Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except pursuant to this
Agreement and as permitted by the Secured Debt Agreements).
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
Each Pledgor represents, warrants and covenants that (i) it is the legal, record
and beneficial owner of, and has good and marketable title to, all Securities
pledged by it hereunder, subject to no pledge, lien, mortgage, hypothecation,
security interest, charge, option or other encumbrance whatsoever, except the
liens and security interests created by this Agreement; (ii) it has full power,
authority and legal right to pledge all the Securities pledged by it pursuant to
this Agreement; (iii) this Agreement has been duly authorized, executed and
delivered by such Pledgor and constitutes the legal, valid and binding
obligation of such Pledgor enforceable in accordance with its terms, except to
the extent that the enforceability hereof may be limited by applicable
bankruptcy, insolvency, reorganization, moratorium or other similar laws
affecting creditors' rights generally and by equitable principles (regardless of
whether enforcement is sought in equity or at law); (iv) except as have been
obtained or made, no consent of any other party (including, without limitation,
any stockholder, partner or creditor of such Pledgor or any of its Subsidiaries)
and no consent, license, permit, approval or authorization of, exemption by,
notice or report to, or registration, filing or declaration with, any
governmental authority is required to be obtained by such Pledgor in connection
with the execution, delivery or performance of this Agreement; (v) the
execution, delivery and performance of this Agreement by such Pledgor does not
violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of the certificate of incorporation,
certificate of partnership, partnership agreement or by-laws of such Pledgor or
of any securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, deed of trust, agreement, instrument or undertaking
to which such Pledgor or any of its Subsidiaries is a party or which purports to
be binding upon such Pledgor or any of its Subsidiaries or upon any of their
respective assets and will not result in the creation or imposition of (or the
obligation to create or impose) any lien or encumbrance on any of the assets of
such Pledgor or any of its Subsidiaries except as contemplated by this
Agreement; (vi) all the shares of Stock have been duly and validly issued and
are fully paid and nonassessable (it being understood that to the extent any
such Stock is issued by a Person other than a Subsidiary of the REIT, such
representation and warranty is made to the best of such Pledgor's knowledge);
(vii) to the knowledge of such Pledgor, each of the Pledged Notes held by such
Pledgor, when executed by the obligor thereof, will be the legal, valid and
binding obligation of such obligor, enforceable in accordance with its terms,
except to the extent that the enforceability thereof may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or other similar
laws affecting creditors' rights generally and by equitable principles
(regardless of whether enforcement is sought in equity or at law); and (viii)
the pledge and assignment of the Securities pursuant to this Agreement, together
with the delivery of the Securities to the Pledgee for the benefit of the
Secured Creditors pursuant to this Agreement and the taking of all other steps
required under Article 8 and Article 9 of the UCC (which delivery has been made
and which steps have been taken as to the Securities owned by the Pledgor on any
date on which the representation and warranty is made), creates a valid and
perfected first priority security interest in such Securities and the proceeds
thereof, subject to no prior or other lien or encumbrance. Each Pledgor
covenants and agrees that it will defend the Pledgee's right, title and security
interest in and to the Securities and the proceeds thereof against the claims
and demands of all persons whomsoever; and such Pledgor covenants and agrees
that it will have like title to and right to pledge any other property at any
time hereafter pledged to the Pledgee as Collateral hereunder and will likewise
defend the right thereto and security interest therein of the Pledgee on behalf
of the Secured Creditors. Each of the representations, warranties and covenants
made by each Pledgor hereunder with respect to Securities shall be deemed to be
made with respect to Securities pledged after the date hereof on each date on
which such Pledgor pledges such Securities hereunder.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such Secured Debt Agreement or other agreement or instrument or this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to such Pledgor or any Subsidiary
of such Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
17. REGISTRATION, ETC. (a) If an Event of Default shall have
occurred and be continuing and the REIT shall have received from the Pledgee a
written request or requests that the REIT cause any registration, qualification
or compliance under any Federal or state securities law or laws to be effected
with respect to all or any part of the Pledged Stock of the Borrower and the
REIT as soon as practicable and at their expense will use their best efforts to
cause such registration to be effected (and be kept effective) and will use
their best efforts to cause such qualification and compliance to be effected
(and be kept effective) as may be so requested and as would permit or facilitate
the sale and distribution of such Pledged Stock, including, without limitation,
registration under the Securities Act as then in effect (or any similar statute
then in effect), appropriate qualifications under applicable blue sky or other
state securities laws and appropriate compliance with any other government
requirements; provided, that the Pledgee shall furnish to the REIT such
information regarding the Pledgee as the REIT may request in writing and as
shall be required in connection with any such registration, qualification or
compliance. The REIT will cause the Pledgee to be kept reasonably advised in
writing as to the progress of each such registration, qualification or
compliance and as to the completion thereof, will furnish to the Pledgee such
number of prospectuses, offering circulars or other documents incident thereto
as the Pledgee from time to time may reasonably request, and will indemnify the
Pledgee, each other Secured Creditor and all others participating in the
distribution of such Pledged Stock against all claims, losses, damages and
liabilities caused by any untrue statement (or alleged untrue statement) of a
material fact contained therein (or in any related registration statement,
notification or the like) or by any omission (or alleged omission) to state
therein (or in any related registration statement, notification or the like) a
material fact required to be stated therein or necessary to make the statements
therein not misleading, except insofar as the same may have been caused by an
untrue statement or omission based upon information furnished in writing to the
REIT by the Pledgee or such other Secured Creditor expressly for use therein.
(b) If at any time when the Pledgee shall determine to
exercise its right to sell all or any part of the Pledged Securities pursuant to
Section 7 hereof, the Pledged Securities or the part thereof to be sold shall
not, for any reason whatsoever, be effectively registered under the Securities
Act, as then in effect, the Pledgee may, in its sole and absolute discretion,
sell such Pledged Securities or part thereof by private sale in such manner and
under such circumstances as the Pledgee may deem necessary or advisable in order
that such sale may legally be effected without such registration; provided, that
at least 10 days' prior notice of the time and place of any such sale shall be
given to such Pledgor. Without limiting the generality of the foregoing, in any
such event the Pledgee, in its sole and absolute discretion and subject to
compliance with any applicable securities laws: (i) may proceed to make such
private sale notwithstanding that a registration statement for the purpose of
registering such Pledged Securities or part thereof shall have been filed under
such Securities Act; (ii) may approach and negotiate with a single possible
purchaser to effect such sale; and (iii) may restrict such sale to a purchaser
who will represent and agree that such purchaser is purchasing for its own
account, for investment, and not with a view to the distribution or sale of such
Pledged Securities or part thereof. In the event of any such sale, the Pledgee
and the other Secured Creditors shall incur no responsibility or liability for
selling all or any part of the Pledged Securities at a price which the Pledgee,
in its sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
18. TERMINATION, RELEASE. (a) After the Termination Date (as
defined below), this Agreement shall terminate (provided that all indemnities
set forth herein including, without limitation, in Section 11 hereof shall
survive any such termination) and the Pledgee, at the request and expense of the
respective Pledgor, will promptly execute and deliver to such Pledgor a proper
instrument or instruments acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Pledgor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Pledgee and as has not theretofore been sold or
otherwise applied or released pursuant to this Agreement. As used in this
Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note or Letter of Credit under and as
defined in the Credit Agreement is outstanding (and all Loans have been repaid
in full), and all Obligations then owing have been paid in full.
(b) Notwithstanding anything to the contrary contained above,
upon the presentment of satisfactory evidence to the Pledgee in its sole
discretion that all obligations evidenced by any Pledged Note have been repaid
in full, and that any payments received by the Pledgor were permitted to be
received by the Pledgor pursuant to Section 6 hereof, the Pledgee shall, upon
the request and at the expense of the respective Pledgor, duly assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such Pledged Note if the same is then in the possession of the Pledgee
and has not theretofore been sold or otherwise applied or released pursuant to
this Agreement.
(c) In the event that any part of the Collateral is sold in
connection with a sale permitted by the Credit Agreement or otherwise released
at the direction of the Required Secured Creditors and the proceeds of such sale
or sales or from such release are applied in accordance with the provisions of
the Credit Agreement, to the extent required to be so applied, the Pledgee, at
the request and expense of the respective Pledgor, will duly assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in the possession of the Pledgee and has not theretofore
been released pursuant to this Agreement.
(d) At any time that any Pledgor desires that Collateral be
released as provided in the foregoing sub-section (a), (b) or (c), such Pledgor
shall deliver to the Pledgee a certificate signed by an Authorized Officer of
such Pledgor stating that the release of the respective Collateral is permitted
pursuant to such subsection (a), (b) or (c).
(e) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 18.
19. NOTICES, ETC. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered in
accordance with Section 12.03 of the Credit Agreement, addressed as follows:
(a) if to any Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
German American Capital Corporation
31 West 52nd Street
New York, New York 10019
Attention: Allisson Michaels
Telephone: (212) 469-6949
Facsimile: (212) 469-7210
(c) if to any Bank Creditor, at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of the Required Secured
Creditors); provided, however, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class (as defined below) of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such affected Class. For the purpose of this Agreement, the term "Class"
shall mean each class of Secured Creditors, i.e., whether (x) the Bank Creditors
as holders of the Credit Agreement Obligations or (y) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Agreement Obligations, the Required Banks and (y) with respect to the
Other Obligations, the holders of at least a majority of all obligations
outstanding from time to time under the respective Interest Rate Protection
Agreements or Other Hedging Agreements.
21. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor (although no Pledgor may assign its
rights and obligations hereunder except in accordance with the provisions of the
Secured Debt Agreements) and shall inure to the benefit of and be enforceable by
the Pledgee and the other Secured Creditors and their respective successors and
assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
EXCEPT FOR THE CHOICE OF LAW PROVISIONS OF THE NEW YORK UCC. The headings in
this Agreement are for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
22. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement pursuant to the Credit Agreement shall automatically become a Pledgor
hereunder by executing a counterpart hereof and delivering the same to the
Pledgee.
23. RECOURSE. This Agreement is made with full recourse to
each Pledgor (including, without limitation, with full recourse to all assets of
such Pledgor) and pursuant to and upon the representations, warranties,
covenants and the agreements on the part of such Pledgor contained herein, in
the other Secured Debt Agreements and otherwise in writing in connection
herewith or therewith.
24. INTEREST RATE PROTECTION AGREEMENTS AND OTHER HEDGING
AGREEMENTS. Notwithstanding anything to the contrary contained in this
Agreement, no Interest Rate Protection Agreement or Other Hedging Agreement
shall be entitled to the benefits of this Agreement unless such Interest Rate
Protection Agreement or Other Hedging Agreement is reasonably related to the
Loans or the Letters of Credit or such Interest Rate Protection Agreement or
Other Hedging Agreement provides that it is to be entitled to the benefits of
this Agreement or the Security Documents generally.
25. PLEDGEE NOT BOUND. (a) The Pledgee and the other Secured
Creditors shall not be obligated to perform or discharge any obligation of any
Pledgor solely as a result of the pledge hereby effected.
(b) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is not
a party, or to take any action hereunder or thereunder, or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral except with respect to duties of care in connection with
the Collateral to the extent required by applicable law.
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
Address: ELDERTRUST, as a Pledgor
415 McFarlan Road By:______________________________
Suite 202 Name:
Kennett Square Title:
Pennsylvania 19348
Address: ELDERTRUST OPERATING LIMITED
PARTNERSHIP, as a Pledgor
415 McFarlan Road By: ElderTrust, general partner
Suite 202
Kennett Square By: ______________________________
Pennsylvania 19348 Name:
Title:
Address: ET GENPAR, L.L.C.
415 McFarlan Road By: ElderTrust Operating Limited Partnership,
Suite 202 sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-HERITAGE WOODS, L.L.C., as a
Pledgor
415 McFarlan Road By: ElderTrust Operating Limited Partnership,
Suite 202 sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-PLEASANT VIEW, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-RITTENHOUSE LIMITED PARTNERSHIP,
L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-LOPATCONG, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-WAYNE I LIMITED PARTNERSHIP, L.L.P.,
as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-PENNSBURG MANOR LIMITED PARTNERSHIP,
L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited Partnership,
Pennsylvania 19348 sole member
By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-POB I LIMITED PARTNERSHIP, L.L.P.,
as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited Partnership,
Pennsylvania 19348 sole member
By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-SMOB, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-WINDSOR I, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: ET SUB-WINDSOR II, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:_______________________________
Name:
Title:
Address: GERMAN AMERICAN CAPITAL CORPORATION,
as Collateral Agent, as Pledgee
31 West 52nd Street By: _____________________________
New York, New York 10019 Name:
Title:
By: _____________________________
Name:
Title:
ANNEX A
to
PLEDGE AGREEMENT
----------------
LIST OF STOCK
-------------
ANNEX B
to
PLEDGE AGREEMENT
----------------
LIST OF NOTES
-------------
EXHIBIT F-2
PLEDGE AND SECURITY AGREEMENT
PLEDGE AND SECURITY AGREEMENT, dated as of January 30, 1998
(as amended, modified or supplemented from time to time, this "Agreement"), made
by each of the undersigned pledgors (each, a "Pledgor" and, together with any
other entity that becomes a party hereto pursuant to Section 23 hereof, the
"Pledgors"), in favor of GERMAN AMERICAN CAPITAL CORPORATION, as Collateral
Agent (the "Pledgee"), for the benefit of the Secured Creditors (as defined
below). Except as otherwise defined herein, capitalized terms used herein and
defined in the Credit Agreement (as defined below) shall be used herein as
therein defined.
W I T N E S S E T H:
WHEREAS, ElderTrust, a Maryland real estate investment trust
(the "REIT"), ElderTrust Operating Limited Partnership, a Delaware limited
partnership (the "Borrower"), various lenders from time to time party thereto
(the "Banks"), Deutsch Bank AG, New York Branch, as Issuing Bank (the "Issuing
Bank"), and German American Capital Corporation, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
have entered into a Credit Agreement, dated as of January 30, 1998, providing
for the making of Loans and the issuance of and participation in Letters of
Credit for the account of the Borrower, all to the Borrower as contemplated
therein (as amended, modified or supplemented from time to time, the "Credit
Agreement") (the Banks, the Issuing Bank, the Administrative Agent and the
Pledgee are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or any affiliates thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, are herein called the "Secured Creditors");
WHEREAS, pursuant to the Parent Guaranty, the Parent Guarantor
has guaranteed to the Secured Creditors the payment when due of all obligations
and liabilities of the Borrower under or with respect to the Credit Documents
and the Interest Rate Protection Agreements and Other Hedging Agreements;
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Protection Agreements and Other Hedging Agreements;
Exhibit F-2
Page 2
WHEREAS, it is a condition precedent to the extensions of
credit under the Credit Agreement that each Pledgor shall have executed and
delivered to the Pledgee this Agreement; and
WHEREAS, each Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Pledgor, the receipt and sufficiency of which are hereby acknowledged, each
Pledgor hereby makes the following representations and warranties to the Pledgee
for the benefit of the Secured Creditors and hereby covenants and agrees with
the Pledgee for the benefit of the Secured Creditors as follows:
1. SECURITY FOR OBLIGATIONS. This Agreement is made by each
Pledgor for the benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities (including, without limitation, the principal of and
interest on the Notes issued by, and Loans made to, the Borrower under
the Credit Agreement, all reimbursement obligations and unpaid drawings
with respect to Letters of Credit, and all indemnities, fees, expenses
and interest thereon or owed thereunder) of such Pledgor to the Bank
Creditors, whether now existing or hereafter incurred under, arising
out of or in connection with the Credit Agreement and the other Credit
Documents (including, without limitation, in the case of the Guarantor,
all of its obligations and liabilities under its Guaranty) to which
such Pledgor is a party and the due performance and compliance by such
Pledgor with all of the terms, conditions and agreements contained in
the Credit Agreement and such other Credit Documents (all such
principal, interest, obligations and liabilities described in this
clause (i) being herein collectively called the "Credit Agreement
Obligations");
(ii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of such Pledgor to the Other Creditors, whether now
existing or hereafter incurred under, arising out of or in connection
with any Interest Rate Protection Agreement or Other Hedging Agreement
(including, without limitation, in the case of the Guarantor, all of
its obligations and liabilities under its Guaranty) and the due
performance and compliance by such Pledgor with all the terms,
conditions and agreements contained in the Interest Rate Protection
Agreements or Other Hedging Agreements (all such obligations and
liabilities described in this clause (ii) being herein collectively
called the "Other Obligations");
(iii)any and all reasonable sums advanced by the Pledgee in
order to preserve the Collateral (as hereinafter defined) or preserve
its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or
enforcement of any obligations or liabilities referred to in clauses
(i) and (ii) above, upon the occurrence and during the continuance of
an Event of Default (such term, as used in this Agreement, shall mean
Exhibit F-2
Page 3
any Event of Default under, and as defined in, the Credit Agreement, or
any payment default (after the expiration of any applicable grace
period) under any Interest Rate Protection Agreement or Other Hedging
Agreement and shall in any event include, without limitation, any
payment default (after the expiration of any applicable grace period)
on any of the Obligations (as hereinafter defined)) shall have occurred
and be continuing, the reasonable expenses of retaking, holding,
preparing for sale or lease, selling or otherwise disposing of or
realizing on the Collateral, or of any exercise by the Pledgee of its
rights hereunder, together with reasonable attorneys' fees and court
costs; and
(v) all amounts paid by any Indemnitee (as defined in Section
11 hereof) as to which such Indemnitee has the right to reimbursement
under Section 11 of this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (v) of this Section 1 being herein collectively called the
"Obligations".
2. DEFINITION OF PARTNERSHIP INTERESTS, LIMITED LIABILITY
COMPANY INTERESTS, ETC. As used herein, (i) the term "Partnership Interest"
shall mean the entire partnership interest (other than any Excluded Interest) at
any time owned by any Pledgor of any partnership (each, a "Pledged Partnership
Entity"); (ii) the term "Limited Liability Company Interest" shall mean the
entire limited liability company and/or membership interest (other than any
Excluded Interest) at any time owned by any Pledgor in any limited liability
company (each, a "Pledged Limited Liability Company"); (iii) the term "Interest"
shall mean all of the Partnership Interests and Limited Liability Company
Interests; and (iv) the term "Excluded Interests" shall mean (A) the
partnership, limited liability company and/or membership interests owned by the
Borrower and/or ET GENPAR, L.L.C., as the case may be, in the Excluded
Subsidiaries and (B) any partnership, limited liability company and/or
membership interests owned by any Pledgor in any Subsidiary established after
the date hereof which does not own a Borrowing Base Property or a Borrowing Base
Pledged Mortgage Loan and/or an equity interest in any other Subsidiary which
owns any Borrowing Base Property or Borrowing Base Pledged Mortgage Loan,
provided that the conditions set forth in the last sentence of Section 8.12 of
the Credit Agreement with respect to such Subsidiary are satisfied. Each Pledgor
represents and warrants that on the date hereof (i) the Partnership Interests
held by such Pledgor consist of those partnership interests as described in
Annex A hereto; (ii) such Partnership Interests constitute that percentage of
the entire partnership interest of each Pledged Partnership Entity as is set
forth in Annex A hereto; (iii) the Limited Liability Company Interests held by
such Pledgor consist of the number and type of limited liability company
interests as described in Annex B hereto; (iv) such Limited Liability Company
Interests constitute that percentage of the issued and outstanding equity
interest of each Pledged Limited Liability Company as is set forth in Annex B
hereto; and (v) such Pledgor owns no other Interests (other than, in the case of
the Borrower and ET GENPAR, L.L.C., the partnership, limited liability company
and/or membership interests owned by the Borrower and/or ET GENPAR, L.L.C., as
the case may be, in the Excluded Subsidiaries).
3. GRANT OF SECURITY INTEREST
Exhibit F-2
Page 4
3.1. Pledge. (a) To secure the Obligations of such Pledgor and
for the purposes set forth in Section 1 hereof, each Pledgor hereby pledges and
grants to the Pledgee a first priority continuing security interest in, and as
part of such grant and pledge, hereby transfers and assigns to the Pledgee all
of the following, whether now existing or hereafter acquired (the "Collateral"):
(i) such Pledgor's Partnership Interest in each Pledged Partnership Entity and
all of such Pledgor's right, title and interest in each Pledged Partnership
Entity and (ii) such Pledgor's Limited Liability Company Interest in each
Pledged Limited Liability Company and all of such Pledgor's right, title and
interest in each Pledged Limited Liability Company, in each case whether now or
hereafter acquired and including, without limitation:
(A) all the capital thereof and its interest in all
profits, losses, Partnership Assets (as defined below),
Limited Liability Company Assets (as defined below) and other
distributions to which such Pledgor shall at any time be
entitled in respect of such Partnership Interest or Limited
Liability Company Interest, as the case may be;
(B) all other payments due or to become due to such
Pledgor in respect of such Partnership Interest or Limited
Liability Company Interest, as the case may be, whether under
any partnership agreement, limited liability company
agreement, operating agreement or otherwise, whether as
contractual obligations, damages, insurance proceeds or
otherwise;
(C) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if
any, under any partnership agreement, limited liability
company agreement or operating agreement or at law or
otherwise in respect of such Partnership Interest or Limited
Liability Company Interest, as the case may be;
(D) all present and future claims, if any, of such
Pledgor against any Pledged Partnership Entity or Pledged
Limited Liability Company for moneys loaned or advanced, for
services rendered or otherwise;
(E) all of such Pledgor's rights under any partner-
ship agreement, limited liability company agreement or
operating agreement or at law to exercise and enforce every
right, power, remedy, authority, option and privilege of such
Pledgor relating to such Partnership Interest or Limited
Liability Company Interest, as the case may be, including any
power to terminate, cancel or modify any partnership
agreement, limited liability company agreement or operating
agreement, to execute any instruments and to take any and all
other action on behalf of and in the name of such Pledgor in
respect of such Partnership Interest or Limited Liability
Company Interest and any Pledged Partnership Entity or Pledged
Limited Liability Company, to make determinations, to exercise
any election (including, but not limited to, election of
remedies) or option or to give or receive any notice, consent,
amendment, waiver or approval, together with full power and
authority to demand, receive, enforce, collect, or receipt for
any of the foregoing or for any Partnership Asset or Limited
Liability Company Asset, to enforce or execute any checks,
or other
Exhibit F-2
Page 5
instruments or orders, to file any claims and to take any
action in connection with any of the foregoing (with all of
the foregoing rights only to be exercisable upon the
occurrence and during the continuance of an Event of Default);
(F) all other property hereafter delivered in
substitution for or in addition to any of the foregoing, all
certificates and instruments representing or evidencing such
other property and all cash, securities, interest, dividends,
rights and other property at any time and from time to time
received, receivable or otherwise distributed in respect of or
in exchange for any or all thereof; and
(G) to the extent not otherwise included, all
proceeds of any or all of the foregoing.
(b) As used herein, (i) the term "Partnership Assets" shall
mean all assets, whether tangible or intangible and whether real, personal or
mixed (including, without limitation, all partnership capital and interests in
other partnerships), at any time owned or represented by any Partnership
Interest; and (ii) the term "Limited Liability Company Assets" shall mean all
assets, whether tangible or intangible and whether real, personal or mixed
(including, without limitation, all limited liability company capital and
interests in other limited liability companies), at any time owned or
represented by any Limited Liability Company Interest.
3.2. Subsequently Acquired Interests. If any Pledgor shall
acquire (by purchase, distribution or otherwise) any additional Interest at any
time or from time to time after the date hereof, such Pledgor (and in any event
within five Business Days after receipt by such Pledgor thereof) shall forthwith
pledge such Interest as security with the Pledgee hereunder and, to the extent
such Interest is certificated, deliver to the Pledgee certificates therefor,
accompanied by such instruments of transfer as are acceptable to the Pledgee,
and shall promptly thereafter deliver to the Pledgee a certificate executed by
any Authorized Officer of such Pledgor describing such Interest and certifying
that the same has been duly pledged with the Pledgee hereunder.
3.3. Uncertificated Interests. Notwithstanding anything to the
contrary contained in Section 3.2 hereof, to the extent any Interest (whether
now owned or hereafter acquired) is uncertificated, the respective Pledgor shall
promptly notify the Pledgee thereof, and shall promptly take all actions
required to perfect the security interest of the Pledgee under applicable law
(including, in any event, under the provisions of Articles 8 and 9 of the New
York UCC). Each Pledgor further agrees to take such actions as the Pledgee deems
necessary or desirable to effect the foregoing and to permit the Pledgee to
exercise any of its rights and remedies hereunder, and agrees to provide an
opinion of counsel reasonably satisfactory to the Pledgee with respect to any
such pledge of uncertificated Interests promptly upon the reasonable request of
the Pledgee.
4. APPOINTMENT OF SUB-AGENTS. The Pledgee shall have the right
to appoint one or more sub-agents for the purpose of retaining physical
possession of the Collateral, which may be held (in the discretion of the
Pledgee) in the name of the Pledgee, as pledgee, or endorsed or assigned in
Exhibit F-2
Page 6
blank or in favor of the Pledgee, as pledgee, or any nominee or nominees of the
Pledgee or a sub-agent appointed by the Pledgee. The Pledgee agrees to promptly
notify the relevant Pledgor after the appointment of any sub-agent; provided,
however, that the failure to give such notice shall not affect the validity of
such appointment.
5. VOTING, ETC., WHILE NO EVENT OF DEFAULT. Unless and until
an Event of Default shall have occurred and be continuing, each Pledgor shall be
entitled to exercise any and all voting, consent, administration, management and
other rights and remedies under any partnership agreement, limited liability
company agreement or operating agreement or otherwise with respect to the
Interests of such Pledgor; provided, that no vote shall be cast or any consent,
waiver or ratification given or any action taken which would violate or be
inconsistent with any of the terms of this Agreement, any other Credit Document
or any Interest Rate Protection Agreement or Other Hedging Agreement
(collectively, the "Secured Debt Agreements"), or which would have the effect of
impairing the position or interests of the Pledgee or any other Secured
Creditor. All such rights of such Pledgor to vote and to give consents, waivers
and ratifications shall cease in case an Event of Default shall occur and be
continuing, and Section 7 hereof shall become applicable.
6. DIVIDENDS AND OTHER DISTRIBUTIONS. Unless an Event of
Default shall have occurred and be continuing, all cash dividends and
distributions payable in respect of the Interests shall be paid to the
respective Pledgor; provided, that all cash dividends payable in respect of the
Interests which are determined by the Pledgee to represent in whole or in part
an extraordinary, liquidating or other distribution in return of capital shall
be paid, to the extent so determined to represent an extraordinary, liquidating
or other distribution in return of capital, to the Pledgee and retained by it as
part of the Collateral. The Pledgee shall also be entitled to receive directly,
and to retain as part of the Collateral:
(i) all other property (other than cash) paid or distributed
by way of dividend, distribution or otherwise in respect of the
Interests;
(ii) all other property (including cash) paid or distributed
in respect of the Limited Liability Company Interests by way of
stock-split, spin-off, split-up, reclassification, combination of
shares or similar arrangement; and
(ii) all other property (including cash) which may be paid in
respect of the Collateral by reason of any consolidation, merger,
exchange of stock, conveyance of assets, liquidation or similar
partnership or corporate reorganization.
7. REMEDIES IN CASE OF EVENT OF DEFAULT. In case an Event of
Default shall have occurred and be continuing, the Pledgee shall be entitled to
exercise all of the rights, powers and remedies (whether vested in it by this
Agreement, by any other Secured Debt Agreement or by law) for the protection and
enforcement of its rights in respect of the Collateral, and the Pledgee shall be
entitled, without limitation, to exercise the following rights, which each
Pledgor hereby agrees to be commercially reasonable remedies:
Exhibit F-2
Page 7
(i) to receive as Collateral all amounts payable in respect of
the Collateral payable to such Pledgor under Section 6 hereof;
(ii) to transfer all or any part of the Interests into the
Pledgee's name or the name of its nominee or nominees;
(iii)to vote all or any part of the Interests (whether or not
transferred into the name of the Pledgee) and give all consents,
waivers and ratifications in respect of the Collateral and otherwise
act with respect thereto as though it were the outright owner thereof;
and
(iv) at any time or from time to time to sell, assign and
deliver, or grant options to purchase, all or any part of the
Collateral, or any interest therein, at any public or private sale,
without demand of performance, advertisement or notice of intention to
sell or of the time or place of sale or adjournment thereof (except as
provided below) or to redeem or otherwise (all of which are hereby
waived by each Pledgor), for cash, on credit or for other property, for
immediate or future delivery without any assumption of credit risk, and
for such price or prices and on such terms as the Pledgee in its
absolute discretion may determine; provided, that at least 10 days'
prior written notice of the time and place of any such sale shall be
given to such Pledgor. Each Pledgor hereby waives and releases to the
fullest extent permitted by law any right or equity of redemption with
respect to the Collateral, whether before or after sale hereunder, and
all rights, if any, of marshalling the Collateral and any other
security for the Obligations or otherwise. The Pledgee may, without
notice or publication, adjourn any public or private sale or cause the
same to be adjourned from time to time by announcement at the time and
place fixed for the sale, and such sale may be made at any time or
place to which the sale may be so adjourned. At any such sale, unless
prohibited by applicable law, the Pledgee on behalf of the Secured
Creditors may bid for and purchase all or any part of the Collateral so
sold free from any such right or equity of redemption. Neither the
Pledgee nor any other Secured Creditor shall be liable for failure to
collect or realize upon any or all of the Collateral or for any delay
in so doing nor shall any of them be under any obligation to take any
action whatsoever with regard thereto.
8. REMEDIES, ETC., CUMULATIVE. Each right, power and remedy of
the Pledgee provided for in this Agreement or any other Secured Debt Agreement
or now or hereafter existing at law or in equity or by statute shall be
cumulative and concurrent and shall be in addition to every other such right,
power or remedy. The exercise or beginning of the exercise by the Pledgee or any
other Secured Creditor of any one or more of the rights, powers or remedies
provided for in this Agreement or any other Secured Debt Agreement or now or
hereafter existing at law or in equity or by statute or otherwise shall not
preclude the simultaneous or later exercise by the Pledgee or any other Secured
Creditor of all such other rights, powers or remedies, and no failure or delay
on the part of the Pledgee or any other Secured Creditor to exercise any such
right, power or remedy shall operate as a waiver thereof. By accepting the
benefits of this Agreement, the Secured Creditors agree that this Agreement may
be enforced only by the action of the Pledgee, acting upon the instructions of
the Required Secured Creditors (as defined in the Security Agreement) and that
Exhibit F-2
Page 8
no other Secured Creditor shall have any right individually to seek to enforce
or to enforce this Agreement or to realize upon the security to be granted
hereby, it being understood and agreed that such rights and remedies may be
exercised by the Pledgee for the benefit of the Secured Creditors in accordance
with the terms of this Agreement.
9. APPLICATION OF PROCEEDS. (a) All moneys collected by the
Pledgee upon any sale or other disposition of the Collateral pursuant to the
terms of this Agreement, together with all other moneys received by the Pledgee
hereunder, shall be applied in the manner provided by Section 5.4 of the
Security Agreement.
(b) It is understood and agreed that the Borrower shall remain
liable, the Parent Guarantor shall remain liable, and the Subsidiary Guarantors
shall remain jointly and severally liable, in each case to the extent of any
deficiency between the amount of the proceeds of the Collateral hereunder and
the aggregate amount of the Obligations.
10. PURCHASERS OF COLLATERAL. Upon any sale of the Collateral
by the Pledgee hereunder (whether by virtue of the power of sale herein granted,
pursuant to judicial process or otherwise), the receipt of the Pledgee or the
officer making the sale shall be a sufficient discharge to the purchaser or
purchasers of the Collateral so sold, and such purchaser or purchasers shall not
be obligated to see to the application of any part of the purchase money paid
over to the Pledgee or such officer or be answerable in any way for the
misapplication or nonapplication thereof.
11. INDEMNITY. (a) Each Pledgor agrees jointly and severally to
indemnify, reimburse and hold harmless the Pledgee, each other Secured Creditor
and their respective successors, assigns, employees, agents and servants
(hereinafter in this Section 11 referred to individually as an "Indemnitee," and
collectively as the "Indemnitees") from any and all liabilities, obligations,
damages, injuries, penalties, claims, demands, actions, suits, judgments and
costs, expenses or disbursements (including reasonable attorneys' fees and
expenses) (for the purposes of this Section 11 the foregoing are collectively
called "expenses") of whatsoever kind and nature imposed on, asserted against or
incurred by any of the Indemnitees in any way relating to or arising out of this
Agreement, any other Secured Debt Agreement (as defined in the Security
Agreement) or any other document executed in connection herewith and therewith
or the enforcement of any of the terms of, or the preservation of any rights
under any such document, or in any way relating to or arising out of the
ownership, control, acceptance, possession, condition, sale or other
disposition, or use of the Collateral; provided that no Indemnitee shall be
indemnified pursuant to this Section 11(a) for expenses to the extent caused by
the gross negligence or willful misconduct of such Indemnitee. Each Pledgor
agrees that upon written notice by any Indemnitee of the assertion of such a
liability, obligation, damage, injury, penalty, claim, demand, action, suit or
judgment, the relevant Pledgor shall to the extent requested to do so assume
full responsibility for the defense thereof. Each Indemnitee agrees to promptly
notify the relevant Pledgor of any such assertion of which such Indemnitee has
knowledge; provided that the failure to give such notice shall not affect such
Indemnitee's right to indemnification hereunder except to the extent (but only
to the extent) that such Indemnitee's damages are increased as a result of such
failure.
Exhibit F-2
Page 9
(b) Without limiting the application of Section 11(a) hereof,
each Pledgor agrees jointly and severally to pay or reimburse the Pledgee for
any and all reasonable fees, costs and expenses of whatever kind or nature
incurred in connection with the creation, preservation or protection of the
Pledgee's Liens on, and security interest in, the Collateral, including, without
limitation, all fees and taxes in connection with the recording or filing of
instruments and documents in public offices, payment or discharge of any taxes
or Liens upon or in respect of the Collateral, and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Pledgee's interest therein, whether through judicial proceedings or
otherwise, or in defending or prosecuting any actions, suits or proceedings
arising out of or relating to the Collateral.
(c) If and to the extent that the obligations of any Pledgor
under this Section 11 are unenforceable for any reason, such Pledgor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
12. FURTHER ASSURANCES. Each Pledgor agrees that it will join
with the Pledgee in executing and, at such Pledgor's own expense, file and
refile under the UCC of any jurisdiction such financing statements, continuation
statements and other documents in such offices as the Pledgee may deem necessary
or appropriate and wherever required or permitted by law in order to perfect and
preserve the Pledgee's security interest in the Collateral and hereby authorizes
the Pledgee to file financing statements and amendments thereto relative to all
or any part of the Collateral without the signature of such Pledgor where
permitted by law, and agrees to do such further acts and things and to execute
and deliver to the Pledgee such additional conveyances, assignments, agreements
and instruments as the Pledgee may reasonably require or deem advisable to carry
into effect the purposes of this Agreement or to further assure and confirm unto
the Pledgee its rights, powers and remedies hereunder.
13. THE PLEDGEE AS AGENT. The Pledgee will hold in accordance
with this Agreement and the Security Agreement all items of the Collateral at
any time received under this Agreement. It is expressly understood and agreed
that the obligations of the Pledgee as holder of the Collateral and interests
therein and with respect to the disposition thereof, and otherwise under this
Agreement, are only those expressly set forth in this Agreement and in the
Security Agreement. By accepting the benefits hereof, each Secured Creditor
shall be deemed to have agreed to the terms and conditions set forth in Article
VIII of the Security Agreement, as the same may be amended, supplemented or
otherwise modified from time to time, which is incorporated herein by reference
in its entirety; provided that all references therein to "this Agreement" shall
be a reference to this Agreement, provided further that all references therein
to any "Assignor" shall be a reference to any "Pledgor," and provided further
that all references therein to the "Collateral Agent" shall be a reference to
the "Pledgee." The Pledgee shall act hereunder on the terms and conditions set
forth herein and in the Security Agreement.
14. TRANSFER BY PLEDGORS. No Pledgor will sell or otherwise
dispose of, grant any option with respect to, or mortgage, pledge or otherwise
encumber any of the Collateral or any interest therein (except pursuant to this
Agreement and as permitted by the Secured Debt Agreements).
Exhibit F-2
Page 10
15. REPRESENTATIONS, WARRANTIES AND COVENANTS OF THE PLEDGORS.
(a) Each Pledgor represents, warrants and covenants that (i) it is the legal,
record and beneficial owner of, and has good and marketable title to, all
Interests and other Collateral pledged by it hereunder, or in which it has
granted a security interest pursuant hereto, subject to no pledge, lien,
mortgage, hypothecation, security interest, charge, option or other encumbrance
whatsoever, except the liens and security interests created by this Agreement;
(ii) it has full power, authority and legal right to pledge and grant a security
interest in all the Collateral pledged and assigned by it pursuant to this
Agreement; (iii) this Agreement has been duly authorized, executed and delivered
by such Pledgor and constitutes the legal, valid and binding obligation of such
Pledgor enforceable in accordance with its terms, except to the extent that the
enforceability hereof may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium or other similar laws affecting creditors' rights
generally and by equitable principles (regardless of whether enforcement is
sought in equity or at law); (iv) except as have been obtained or made, no
consent of any other party (including, without limitation, any stockholder,
partners or creditor of such Pledgor or any of its Subsidiaries or of any
partner of any Pledged Partnership Entity or any member of any Pledged Limited
Liability Company) and no consent, license, permit, approval or authorization
of, exemption by, notice or report to, or registration, filing or declaration
with, any governmental authority is required to be obtained by such Pledgor in
connection with the execution, delivery or performance of this Agreement; (v)
the execution, delivery and performance of this Agreement by such Pledgor does
not violate any provision of any applicable law or regulation or of any order,
judgment, writ, award or decree of any court, arbitrator or governmental
authority, domestic or foreign, or of the certificate of incorporation,
certificate of partnership, partnership agreement or by-laws of such Pledgor or
of any securities issued by such Pledgor or any of its Subsidiaries, or of any
mortgage, indenture, lease, deed of trust, agreement (including any partnership
agreement of any Pledged Partnership Entity or any limited liability company
agreement or operating agreement of any Pledged Limited Liability Company),
instrument or undertaking to which such Pledgor or any of its Subsidiaries is a
party or which purports to be binding upon such Pledgor or any of its
Subsidiaries or upon any of their respective assets and will not result in the
creation or imposition of (or the obligation to create or impose) any lien or
encumbrance on any of the assets of such Pledgor or any of its Subsidiaries
except as contemplated by this Agreement; (vi) all Interests have been validly
acquired and are fully paid for and validly pledged hereunder (it being
understood that to the extent any such Partnership Interest is issued by a
Person other than a Subsidiary of the REIT, such representation and warranty is
made to the best of such Pledgor's knowledge); (vii) the Interests pledged by it
hereunder are not dealt in or traded on securities exchanges or on securities
markets; (viii) the terms of the Interests pledged by it hereunder do not
provide that such Interests are securities governed by Article 8 of the UCC;
(ix) this Agreement creates (after all steps required under Article 8 of the UCC
have been taken) in favor of the Pledgee for the benefit of the Secured
Creditors a legal, valid and enforceable security interest in all right, title
and interest of each Pledgor in the Collateral owned by such Pledgor on any date
on which this representation and warranty is made or deemed made, which security
interest shall, (A) upon delivery to the Pledgee of any certificates evidencing
equity interests in a Pledged Partnership Entity or in a Pledged Limited
Liability Company, (B) upon the filing of appropriate financing statements under
the UCC in respect of any Pledged Partnership Entity's partnership interest or
Pledged Limited Liability Company's limited liability company or membership
Exhibit F-2
Page 11
interest that is not represented by a certificate and (C) upon the taking of all
steps required under Article 8 and Article 9 of the UCC (which delivery, filings
and/or steps have been done and remain in full force and effect as to the
Collateral owned by such Pledgor on any date on which this representation and
warranty is made or deemed made), constitute a fully perfected first lien on,
and security interest in, all right, title and interest of such Pledgor in all
of such Collateral, subject to no security interests of any other Person; (x)
there are no currently effective financing statements under the UCC covering any
property which is now or hereafter may be included in the Collateral except
financing statements filed or to be filed in favor of the Pledgee as secured
party; and (xi) the chief executive office and principal place of business of
such Pledgor and the sole location where the records of such Pledgor with
respect to the Collateral are kept are located at the address set forth for such
Pledgor in the Security Agreement and such Pledgor shall not move its chief
executive office, principal place of business or such location of records except
in accordance with the terms of the Security Agreement. Each Pledgor covenants
and agrees that it will defend the Pledgee's right, title and security interest
in and to the Collateral and the proceeds thereof against the claims and demands
of all persons whomsoever; and such Pledgor covenants and agrees that it will
have like title to and right to pledge any other property at any time hereafter
pledged to the Pledgee as Collateral hereunder and will likewise defend the
right thereto and security interest therein of the Pledgee on behalf of the
Secured Creditors. Each of the representations, warranties and covenants made by
each Pledgor hereunder shall be deemed to be repeated on each date on which such
Pledgor pledges any Collateral hereunder.
(b) Each Pledgor shall (i) execute and deliver to each Pledged
Partnership Entity and Pledged Limited Liability Company with respect to which
it has pledged any Interest hereunder a notice substantially in the form of
Annex C to this Agreement at the time such Interest is pledged and (ii) cause
each Pledged Partnership Entity and each Pledged Limited Liability Company with
respect to which it has pledged any Interest hereunder to execute and deliver to
the Pledgee a control agreement substantially in the form of Annex D to this
Agreement with respect to such Interest at the time such Interest is pledged.
16. PLEDGORS' OBLIGATIONS ABSOLUTE, ETC. The obligations of
each Pledgor under this Agreement shall be absolute and unconditional and shall
remain in full force and effect without regard to, and shall not be released,
suspended, discharged, terminated or otherwise affected by, any circumstance or
occurrence whatsoever, including, without limitation: (i) any renewal,
extension, amendment or modification of or addition or supplement to or deletion
from any Secured Debt Agreement or any other instrument or agreement referred to
therein, or any assignment or transfer of any thereof; (ii) any waiver, consent,
extension, indulgence or other action or inaction under or in respect of any
such Secured Debt Agreement or other agreement or instrument or this Agreement;
(iii) any furnishing of any additional security to the Pledgee or its assignee
or any acceptance thereof or any release of any security by the Pledgee or its
assignee; (iv) any limitation on any party's liability or obligations under any
such instrument or agreement or any invalidity or unenforceability, in whole or
in part, of any such instrument or agreement or any term thereof; or (v) any
bankruptcy, insolvency, reorganization, composition, adjustment, dissolution,
liquidation or other like proceeding relating to such Pledgor or any Subsidiary
of such Pledgor, or any action taken with respect to this Agreement by any
trustee or receiver, or by any court, in any such proceeding, whether or not
such Pledgor shall have notice or knowledge of any of the foregoing.
Exhibit F-2
Page 12
17. REGISTRATION, ETC. If at any time when the Pledgee shall
determine to exercise its right to sell all or any part of the Interests
pursuant to Section 7 hereof, such Interests or the part thereof to be sold
shall not, for any reason whatsoever, be effectively registered under the
Securities Act, as then in effect, the Pledgee may, in its sole and absolute
discretion, sell such Interests or part thereof by private sale in such manner
and under such circumstances as the Pledgee may deem necessary or advisable in
order that such sale may legally be effected without such registration;
provided, that at least 10 days' prior notice of the time and place of any such
sale shall be given to such Pledgor. Without limiting the generality of the
foregoing, in any such event the Pledgee, in its sole and absolute discretion
and subject to compliance with any applicable securities laws: (i) may proceed
to make such private sale notwithstanding that a registration statement for the
purpose of registering such Interests or part thereof shall have been filed
under such Securities Act; (ii) may approach and negotiate with a single
possible purchaser to effect such sale; and (iii) may restrict such sale to a
purchaser who will represent and agree that such purchaser is purchasing for its
own account, for investment, and not with a view to the distribution or sale of
such Interests or part thereof. In the event of any such sale, the Pledgee and
the other Secured Creditors shall incur no responsibility or liability for
selling all or any part of the Interests at a price which the Pledgee, in its
sole and absolute discretion, may in good faith deem reasonable under the
circumstances, notwithstanding the possibility that a substantially higher price
might be realized if the sale were deferred until after registration as
aforesaid.
18. TERMINATION, RELEASE. (a) After the Termination Date (as defined
below), this Agreement shall terminate (provided that all indemnities set forth
herein including, without limitation, in Section 11 hereof shall survive any
such termination) and the Pledgee, at the request and expense of the respective
Pledgor, will promptly execute and deliver to such Pledgor a proper instrument
or instruments acknowledging the satisfaction and termination of this Agreement,
and will duly assign, transfer and deliver to such Pledgor (without recourse and
without any representation or warranty) such of the Collateral as may be in the
possession of the Pledgee and as has not theretofore been sold or otherwise
applied or released pursuant to this Agreement. As used in this Agreement,
"Termination Date" shall mean the date upon which the Total Commitment and all
Interest Rate Protection Agreements or Other Hedging Agreements have been
terminated, no Note or Letter of Credit is outstanding (and all Loans have been
repaid in full), and all Obligations then owing have been paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by the Credit Agreement or otherwise released
at the direction of the Required Secured Creditors and the proceeds of such sale
or sales or from such release are applied in accordance with the provisions of
the Credit Agreement, to the extent required to be so applied, the Pledgee, at
the request and expense of the respective Pledgor, will duly assign, transfer
and deliver to such Pledgor (without recourse and without any representation or
warranty) such of the Collateral as is then being (or has been) so sold or
released and as may be in the possession of the Pledgee and has not theretofore
been released pursuant to this Agreement.
(c) At any time that any Pledgor desires that Collateral be
released as provided in the foregoing sub-section (a) or (b), it shall deliver
to the Pledgee a certificate signed by an Authorized Officer of such Pledgor
stating that the release of the respective Collateral is permitted pursuant to
such subsection (a) or (b).
Exhibit F-2
Page 13
(d) The Pledgee shall have no liability whatsoever to any
Secured Creditor as the result of any release of Collateral by it in accordance
with this Section 18.
19. NOTICES, ETC. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered in
accordance with the provisions of Section 12.03 of the Credit Agreement,
addressed as follows:
(a) if to any Pledgor, at its address set forth opposite its
signature below;
(b) if to the Pledgee, at:
German American Capital Corporation
31 West 52nd Street
New York, New York 10019
Attention: Allisson Michaels
Telephone: (212) 469-6949
Facsimile: (212) 469-7210
(c) if to any Bank Creditor, at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Pledgor and the Pledgee;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
20. WAIVER; AMENDMENT. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Pledgor directly affected
thereby and the Pledgee (with the written consent of the Required Secured
Creditors); provided, however, that any change, waiver, modification or variance
affecting the rights and benefits of a single Class (as defined below) of
Secured Creditors (and not all Secured Creditors in a like or similar manner)
shall require the written consent of the Requisite Creditors (as defined below)
of such affected Class. For the purpose of this Agreement, the term "Class"
shall mean each class of Secured Creditors, i.e., whether (x) the Bank Creditors
as holders of the Credit Agreement Obligations or (y) the Other Creditors as the
holders of the Other Obligations. For the purpose of this Agreement, the term
"Requisite Creditors" of any Class shall mean each of (x) with respect to the
Credit Agreement Obligations, the Required Banks and (y) with respect to the
Other Obligations that are secured by this Agreement, the holders of at least a
majority of all obligations outstanding from time to time under the respective
Interest Rate Protection Agreements or Other Hedging Agreements.
21. PLEDGEE NOT BOUND. (a) Nothing herein shall be construed
to make the Pledgee or any other Secured Creditor liable as a general partner or
limited partner of any Pledged Partnership Entity or as a member of any Pledged
Limited Liability Company and neither the Pledgee nor any
Exhibit F-2
Page 14
other Secured Creditor by virtue of this Agreement or otherwise (except as
referred to in the following sentence) shall have any of the duties, obligations
or liabilities of a general partner or limited partner of any Pledged
Partnership Entity or of a member of any Pledged Limited Liability Company. The
parties hereto expressly agree that, unless the Pledgee shall become the
absolute owner of an Interest pursuant hereto, this Agreement shall not be
construed as creating a partnership or joint venture among the Pledgee, any
other Secured Creditor and/or any Pledgor.
(b) Except as provided in the last sentence of paragraph (a)
of this Section 21, the Pledgee, by accepting this Agreement, did not intend to
become (and shall not be construed to be) a general partner or limited partner
of any Pledged Partnership Entity or a member of any Pledged Limited Liability
Company or otherwise be deemed to be a co-venturer with respect to any Pledgor,
any Pledged Partnership Entity or any Pledged Limited Liability Company either
before or after an Event of Default shall have occurred. The Pledgee shall have
only those powers set forth herein and, except as provided in the last sentence
of paragraph (a) of this Section 21, the Secured Creditors shall assume none of
the duties, obligations or liabilities of a general partner or limited partner
of any Pledged Partnership Entity or of a member of any Pledged Limited
Liability Company or of any Pledgor.
(c) The Pledgee and the other Secured Creditors shall not be
obligated to perform or discharge any obligation of any Pledgor as a result of
the pledge hereby effected.
(d) The acceptance by the Pledgee of this Agreement, with all
the rights, powers, privileges and authority so created, shall not at any time
or in any event obligate the Pledgee or any other Secured Creditor to appear in
or defend any action or proceeding relating to the Collateral to which it is not
a party, or to take any action hereunder or thereunder, or to expend any money
or incur any expenses or perform or discharge any obligation, duty or liability
under the Collateral except with respect to duties of care in connection with
the Collateral to the extent required by applicable law.
22. MISCELLANEOUS. This Agreement shall be binding upon the
successors and assigns of each Pledgor (although no Pledgor may assign its
rights and obligations hereunder except in accordance with the provisions of the
Secured Debt Agreements) and shall inure to the benefit of and be enforceable by
the Pledgee and the other Secured Creditors and their respective successors and
assigns. THIS AGREEMENT SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH AND
GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF LAWS
EXCEPT FOR THE CHOICE OF LAW PROVISIONS OF THE NEW YORK UCC. The headings in
this Agreement are for purposes of reference only and shall not limit or define
the meaning hereof. This Agreement may be executed in any number of
counterparts, each of which shall be an original, but all of which shall
constitute one instrument.
23. ADDITIONAL PLEDGORS. It is understood and agreed that any
Subsidiary of the Borrower that is required to execute a counterpart of this
Agreement pursuant to the Credit Agreement shall automatically become a Pledgor
hereunder by executing a counterpart hereof and delivering the same to the
Pledgee.
Exhibit F-2
Page 15
24. RECOURSE. This Agreement is made with full recourse to
each Pledgor (including, without limitation, with full recourse to all assets of
such Pledgor) and pursuant to and upon the representations, warranties,
covenants and the agreements on the part of such Pledgor contained herein, in
the other Secured Debt Agreements and otherwise in writing in connection
herewith or therewith.
25. INTEREST RATE PROTECTION AGREEMENTS AND OTHER HEDGING
AGREEMENTS. Notwithstanding anything to the contrary contained in this
Agreement, no Interest Rate Protection Agreement or Other Hedging Agreement
shall be entitled to the benefits of this Agreement unless such Interest Rate
Protection Agreement or Other Hedging Agreement is reasonably related to the
Loans or the Letters of Credit or such Interest Rate Protection Agreement or
Other Hedging Agreement provides that it is to be entitled to the benefits of
this Agreement or the Security Documents generally.
Exhibit F-2
Page 16
IN WITNESS WHEREOF, each Pledgor and the Pledgee have caused
this Agreement to be executed by their duly elected officers duly authorized as
of the date first above written.
Address: ELDERTRUST, as a Pledgor
415 McFarlan Road
Suite 202 By:______________________
Kennett Square Name:
Pennsylvania 19348 Title:
Address: ELDERTRUST OPERATING LIMITED PARTNERSHIP, as a Pledgor
415 McFarlan Road By: Elder Trust, general partner
Suite 202
Kennett Square By:______________________
Pennsylvania 19348 Name:
Title:
Address: ET GENPAR, L.L.C.
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-HERITAGE WOODS, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit F-2
Page 17
Address: ET SUB-PLEASANT VIEW, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-RITTENHOUSE LIMITED PARTNERSHIP, L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-LOPATCONG, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit F-2
Page 18
Address: ET SUB-WAYNE I LIMITED PARTNERSHIP, L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-PENNSBURG MANOR LIMITED PARTNERSHIP, L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-POB I LIMITED PARTNERSHIP, L.L.P., as a Pledgor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit F-2
Page 19
Address: ET SUB-SMOB, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-WINDSOR I, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-WINDSOR II, L.L.C., as a Pledgor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: GERMAN AMERICAN CAPITAL CORPORATION
51 West 52nd Street By:______________________
New York, New York 10019 Name:
Title:
By:______________________
Name:
Title:
EXHIBIT F-2
ANNEX A
to
PLEDGE AND
SECURITY AGREEMENT
LIST OF PARTNERSHIP INTERESTS
ANNEX B
to
PLEDGE AND
SECURITY AGREEMENT
LIST OF LIMITED LIABILITY COMPANY INTERESTS
EXHIBIT F-2
ANNEX C
to
PLEDGE AND
SECURITY AGREEMENT
FORM OF PARTNERSHIP/LIMITED LIABILITY COMPANY NOTICE
[Letterhead of Pledgor]
[Date]
TO: [Name of Pledged Entity]
Notice is hereby given that, pursuant to a Pledge and Security
Agreement (a true and correct copy of which is attached hereto), dated as of
January 30, 1998 (as amended, modified or supplemented from time to time in
accordance with the terms thereof, the "Pledge Agreement"), among [NAME OF
PLEDGOR] (the "Pledgor"), the other pledgors from time to time party thereto and
German American Capital Corporation, as Pledgee (the "Pledgee") for the benefit
of the Secured Creditors described therein, the Pledgor has pledged and assigned
to the Pledgee for the benefit of the Secured Creditors, and granted to the
Pledgee for the benefit of the Secured Creditors a continuing security interest
in, all right, title and interest of the Pledgor, whether now existing or
hereafter arising or acquired, as a [[limited] [general] partner][member] in
[NAME OF PLEDGED PARTNERSHIP ENTITY/LIMITED LIABILITY COMPANY] (the "Pledged
Entity"), and in, to and under the [TITLE OF APPLICABLE PARTNERSHIP/LIMITED
LIABILITY COMPANY/OPERATING AGREEMENT] (the "Agreement"), including, without
limitation:
(i) all the capital of the Pledged Entity and the Pledgor's
interest in all profits, losses, [Partnership Assets/Limited Liability
Company Assets] (as defined in the Pledge Agreement) and other
distributions to which the Pledgor shall at any time be entitled in
respect of such partnership interest;
(ii) all other payments due or to become due to the Pledgor in
respect of such interest, whether under the Agreement or otherwise,
whether as contractual obligations, damages, insurance proceeds or
otherwise;
(iii) all of its claims, rights, powers, privileges,
authority, options, security interest, liens and remedies, if any,
under the Agreement or at law or otherwise in respect of such interest;
(iv) all present and future claims, if any, of the Pledgor
against the Pledged Entity for moneys loaned or advanced, for services
rendered or otherwise;
ANNEX C
Page 2
(v) all of the Pledgor's rights under the Agreement or at law
to exercise and enforce every right, power, remedy, authority, option
and privilege of the Pledgor relating to the interest, including any
power to terminate, cancel or modify the Agreement, to execute any
instruments and to take any and all other action on behalf of and in
the name of the Pledgor in respect of the interest and the Pledged
Entity, to make determinations, to exercise any election (including,
but not limited, election of remedies) or option or to give or receive
any notice, consent, amendment, waiver or approval, together with full
power and authority to demand, receive, enforce, collect or receipt for
any of the foregoing or for any [Partnership Asset/Limited Liability
Company Asset], to enforce or execute any checks, or other instruments
or orders, to file any claims and to take any action in connection with
any of the foregoing (with all of the foregoing rights only to be
exercisable upon the occurrence and during the continuance of an Event
of Default);
(vi) all other property hereafter delivered in substitution
for or in addition to any of the foregoing, all certificates and
instruments representing or evidencing such other property and all
cash, securities, interest, dividends, rights and other property at any
time and from time to time received, receivable or otherwise
distributed in respect of or in exchange for any or all thereof; and
(vii) to the extent not otherwise included, all proceeds of
any or all of the foregoing.
The Pledgor hereby requests the Pledged Entity to indicate the Pledged Entity's
acceptance of this Notice and consent to and confirmation of its terms and
provisions by signing a copy hereof where indicated on the attached page and
returning the same to the Pledgee on behalf of the Secured Creditors.
[NAME OF PLEDGOR]
By:_______________________________
Title:
EXHIBIT F-2
ANNEX D
to
PLEDGE AND
SECURITY AGREEMENT
FORM OF CONTROL AGREEMENT
[NAME OF PLEDGED PARTNERSHIP ENTITY/LIMITED LIABILITY COMPANY]
(the "Pledged Entity") hereby acknowledges receipt of a copy of the notice of
the assignment by [NAME OF PLEDGOR] (the "Pledgor") of its interest (the
"Interest") under the [TITLE OF APPLICABLE PARTNERSHIP/LIMITED LIABILITY
COMPANY/OPERATING AGREEMENT] (the "Agreement") pursuant to the terms of the
Pledge and Security Agreement, dated as of January 30, 1998 (as amended,
modified or supplemented from time to time in accordance with the terms thereof,
the "Pledge Agreement"), among the Pledgor, the other pledgors from time to time
party thereto, and German American Capital Corporation, as Pledgee (the
"Pledgee") for the benefit of the Secured Creditors described therein. The
undersigned hereby confirms that it is the issuer of the Interest and that the
Pledgor is the registered owner of such Interest, and hereby irrevocably agrees
that the undersigned will comply with any and all instructions originated by the
Pledgee on behalf of the Secured Creditors in respect of such interest without
further consent from the Pledgor and, in the event of any conflict between any
instructions originated by the Pledgee and any instructions originated by the
Pledgor or any other person (other than a court of competent jurisdiction), the
undersigned shall comply with the instructions originated by the Pledgee. The
undersigned also irrevocably agrees that it shall not register the Interest in
the name of any person other than the Pledgor or the Pledgee (unless otherwise
instructed by the Pledgee) and that it shall not agree to comply with any
instructions originated by any person other than the Pledgor or the Pledgee
without the further consent of the registered owner of the Interest.
Dated: ______________, ____
[NAME OF PLEDGED ENTITY]
By:______________________________________
Title:
ACKNOWLEDGED BY:
[NAME OF PLEDGOR]
By:________________________________________
Title:
EXHIBIT G
SECURITY AGREEMENT
among
ELDERTRUST,
ELDERTRUST OPERATING LIMITED PARTNERSHIP,
VARIOUS SUBSIDIARIES
of
ELDERTRUST,
and
GERMAN AMERICAN CAPITAL CORPORATION,
as Collateral Agent
Dated as of January 30, 1998
EXHIBIT G
SECURITY AGREEMENT
SECURITY AGREEMENT, dated as of January 30, 1998 made by each
of the undersigned assignors (each, an "Assignor" and, together with any other
entity that becomes a party hereto pursuant to Section 9.10 hereof, the
"Assignors") in favor of German American Capital Corporation, as Collateral
Agent (the "Collateral Agent"), for the benefit of the Secured Creditors (as
defined below). Except as otherwise defined herein, capitalized terms used
herein and defined in the Credit Agreement (as defined below) shall be used
herein as so defined.
W I T N E S S E T H:
WHEREAS, ElderTrust, a Maryland real estate investment trust
(the "REIT"), ElderTrust Operating Limited Partnership, a Delaware limited
partnership (the "Borrower"), various lenders (the "Banks") from time to time
party thereto, Deutsche Bank AG, New York Branch, as Issuing Bank (the "Issuing
Bank") and German American Capital Corporation, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
have entered into a Credit Agreement, dated as of January 30, 1998, providing
for the making of Loans to the Borrower and the issuance of and participation in
Letters of Credit for the account of the Borrower, all as contemplated therein
(as amended, modified or supplemented from time to time, the "Credit Agreement")
(the Banks, the Issuing Bank, the Administrative Agent and the Collateral Agent
are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or any affiliate thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, are herein called the "Secured Creditors");
WHEREAS, pursuant to the Parent Guaranty, the Parent Guarantor
has guaranteed to the Secured Creditors the payment when due of all obligations
and liabilities of the Borrower under or with respect to the Credit Documents
and the Interest Rate Protection Agreements and other Hedging Agreements;
WHEREAS, pursuant to the Subsidiaries Guaranty, each
Subsidiary Guarantor has jointly and severally guaranteed to the Secured
Creditors, the payment when due of all obligations and liabilities of the
Borrower under or with respect to the Credit Documents and the Interest Rate
Protection Agreements and Other Hedging Agreements;
WHEREAS, it is a condition precedent to the extensions of
credit under the Credit Agreement that each Assignor shall have executed and
delivered to the Collateral Agent this Agreement;
Exhibit G
Page 2
WHEREAS, each Assignor desires to execute this Agreement to
satisfy the condition described in the preceding paragraph;
NOW, THEREFORE, in consideration of the benefits accruing to
each Assignor, the receipt and sufficiency of which are hereby acknowledged,
each Assignor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY INTERESTS
1.1. Grant of Security Interests. (a) As security for all of
the Obligations of such Assignor, each Assignor does hereby pledge, assign and
transfer unto the Collateral Agent, and does hereby grant to the Collateral
Agent, for the benefit of the Secured Creditors, a continuing security interest
of first priority in, all of the right, title and interest of such Assignor in,
to and under all of the following, whether now existing or hereafter from time
to time acquired: (i) each and every Receivable, (ii) all Contracts, together
with all Contract Rights arising thereunder, (iii) all Inventory, (iv) all
Equipment, (v) all computer programs of such Assignor and all intellectual
property rights therein and all other proprietary information of such Assignor,
including, but not limited to, trade secrets (to the extent such computer
programs, intellectual property rights and proprietary information are
assignable without violating any agreements governing same), (vi) all other
Goods, General Intangibles, Permits, Chattel Paper, Documents and Instruments,
(vii) the Cash Collateral Account and all monies, securities, instruments and
other Cash Equivalents deposited or required to be deposited in such Cash
Collateral Account, (viii) all present and future bank accounts of such Assignor
including, without limitation, any demand, time savings, passbook, certificates
of deposit, or like accounts maintained by such Assignor with any bank, savings
and loan association, credit union or other organization, all money, cash and
checks, drafts, notes, bills, bills of exchange, securities, investments, bonds
or other instruments, writings or property of such Assignor from time to time
received, receivable or otherwise distributed in respect thereof, in renewal or
extension thereof, or in exchange therefor, whether or not deposited in any such
deposit account (collectively, the "Pledged Accounts"), (ix) all revenues,
receipts, income, accounts, and other Receivables derived or to be derived from
the ownership or operation of any Borrowing Base Properties and Borrowing Base
Pledged Mortgage Loans and related facilities located thereon, including,
without limitation of the generality of the foregoing, all rent, advance
deposits, charges for services and other revenues and income derived or to be
derived from the sale or rental of rooms, apartments, units or other facilities,
the provision of services, the sale of food, beverages and merchandise, the
rental of shops, the leasing of commercial or residential spaces, the granting
of concessions (including concessions for the installation of coin-operated
machines to the extent of such Assignor's interest therein) within or about any
Borrowing Base Properties and related facilities, the rental or operation of
parking facilities and the provision of services to guests of any Borrowing Base
Properties and related facilities located thereon and any other items of
revenue, receipts or other income, (x) all books and records of each Assignor
with respect to any and all of the foregoing and (xi) all Proceeds and products
of any and all of the foregoing (all of each Assignor's right, title and
interest in the above, collectively, the "Collateral").
Exhibit G
Page 3
(b) The security interest of the Collateral Agent under this
Agreement extends to all Collateral of the kind which is the subject of this
Agreement which any Assignor may acquire at any time during the term of this
Agreement.
ARTICLE II
GENERAL REPRESENTATIONS, WARRANTIES AND COVENANTS
Each Assignor represents, warrants and covenants, which
representations, warranties and covenants shall survive execution and delivery
of this Agreement, as follows:
2.1. Necessary Filings. With respect to the Collateral that
consists of cash, Cash Equivalents and property in which a security interest may
be perfected by the filing of a financing statement under the UCC, upon (i)
possession by the Collateral Agent or its designee in the case of cash, (ii) the
taking of all action required under Articles 8 and 9 of the UCC in the case of
Cash Equivalents and Instruments and (iii) the filing of appropriate financing
statements under the UCC in the case of such other Collateral (all of which
actions described in preceding clauses (i), (ii) and (iii) shall have been taken
and be in full force and effect with respect to such Collateral owned by such
Assignor within 10 days following the Effective Date (or 30 days in the case of
cash and Cash Equivalents) or, in the case of any Collateral acquired on an
Addition Date, within 10 days following such Addition Date), the Collateral
Agent has been granted, for the benefit of the Secured Creditors and pursuant to
this Agreement, a legal, valid and enforceable security interest in all right,
title and interest of such Assignor in such Collateral, which security interest
is (with the exception of cash which is not in the possession of the Collateral
Agent) a fully perfected first lien on, and security interest in, all right,
title and interest of such Assignor in all of such Collateral, subject to no
other Liens other than Permitted Liens, provided that it will not be a breach of
the representation and warranty made in this Section 2.1 if the Collateral Agent
does not have a perfected security interest in Cash Equivalents which, in the
aggregate, total less than $100,000.
2.2. No Liens. Such Assignor is, and as to Collateral acquired
by it from time to time after the date hereof such Assignor will be, the owner
of all Collateral free from any Lien, security interest, encumbrance or other
right, title or interest of any Person (other than Permitted Liens), and such
Assignor shall defend the Collateral against all claims and demands of all
Persons at any time claiming the same or any interest therein adverse to the
Collateral Agent and the other Secured Creditors.
2.3. Other Financing Statements. As of the date hereof, there
is no financing statement (or similar statement or instrument of registration
under the law of any jurisdiction) covering or purporting to cover any interest
of any kind in the Collateral (other than financing statements filed in respect
of Permitted Liens), and so long as the Termination Date has not occurred, such
Assignor will not execute or authorize to be filed in any public office any
financing statement (or similar statement or instrument of registration under
Exhibit G
Page 4
the law of any jurisdiction) or statements relating to the Collateral, except
financing statements filed or to be filed in respect of and covering the
security interests granted hereby by such Assignor or in connection with
Permitted Liens.
2.4. Chief Executive Office; Records. The chief executive
office of such Assignor is located at the address indicated on Annex A hereto
for such Assignor. Such Assignor will not move its chief executive office except
to such new location as such Assignor may establish in accordance with the last
sentence of this Section 2.4. No Assignor shall establish new locations for such
offices until (i) it shall have given to the Collateral Agent not less than 30
days' prior written notice of its intention to do so, clearly describing such
new location and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new location,
it shall have taken all action, reasonably satisfactory to the Collateral Agent,
to maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect and (iii) at the request of the Collateral Agent, it shall have furnished
an opinion of counsel reasonably acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and all other actions have been taken, in order to perfect (and maintain the
perfection of) the security interest granted hereby in respect of the types of
Collateral referred to in Section 2.1 hereof.
2.5. Location of Inventory and Equipment. All Inventory and
Equipment held on the date hereof by each Assignor is located at one of the
locations shown on Annex B hereto for such Assignor. Each Assignor agrees that
all Inventory and Equipment now held or subsequently acquired by it shall be
kept at (or shall be in transport to) any one of the locations shown on Annex B
hereto, or such new location as such Assignor may establish in accordance with
the last sentence of this Section 2.5. Any Assignor may establish a new location
for Inventory and Equipment only if (i) it shall have given to the Collateral
Agent not less than 30 days' prior written notice of its intention so to do,
clearly describing such new location and providing such other information in
connection therewith as the Collateral Agent may request, (ii) with respect to
such new location, it shall have taken all action reasonably satisfactory to the
Collateral Agent to maintain the security interest of the Collateral Agent in
the Collateral intended to be granted hereby at all times fully perfected and in
full force and effect and (iii) at the request of the Collateral Agent, it shall
have furnished an opinion of counsel reasonably acceptable to the Collateral
Agent to the effect that all financing or continuation statements and amendments
or supplements thereto have been filed in the appropriate filing office or
offices, and all other actions have been taken, in order to perfect (and
maintain the perfection of) the security interest granted hereby in respect of
the types of Collateral referred to in Section 2.1 hereof.
2.6. Pledged Accounts. (a) The Pledged Accounts existing on
the date hereof are, and will continue to be, maintained at, and controlled and
directed from, the respective offices of those institutions set forth on Annex C
hereto (such institutions, the "Pledged Account Banks"). No Assignor shall
establish any additional Pledged Accounts until (i) such Assignor shall have
given to the Collateral Agent prior written notice of its intention so to do,
clearly describing such new account and providing such other information in
connection therewith as the Collateral Agent may reasonably request; (ii) with
respect to such new account, it shall have taken all action to maintain the
Exhibit G
Page 5
security interest of the Collateral Agent in such Collateral intended to be
granted hereby at all times fully perfected and in full force and effect and
(iii) at the request of the Collateral Agent, it shall have furnished an opinion
of counsel reasonably acceptable to the Collateral Agent to the effect that all
actions have been taken in order to perfect (and maintain the perfection of) the
security interest granted hereby.
(b) Upon the occurrence and during the continuance of any
Event of Default, and upon notice by the Collateral Agent to the Borrower
(although no such notice shall be required to be so given in the case of an
Event of Default of the type described in Section 9.05 of the Credit Agreement),
the Assignors shall no longer have the right to withdraw funds from any Pledged
Account, and the Collateral Agent shall have the sole right to make withdrawals
from the Pledged Accounts. All Collateral held in the Pledged Accounts shall be
held therein in accordance with the terms of this Agreement.
2.7. Recourse. This Agreement is made with full recourse to
each Assignor (including, without limitation, with full recourse to all assets
of such Assignor) and pursuant to and upon all the warranties, representations,
covenants and agreements on the part of such Assignor contained herein, in the
other Secured Debt Agreements and otherwise in writing in connection herewith or
therewith.
2.8. Trade Names; Change of Name. No Assignor has or operates
in any jurisdiction under, or in the preceding 12 months has had or has operated
in any jurisdiction under, any trade names, fictitious names or other names
except its legal name and such other trade or fictitious names as are listed on
Annex D hereto for such Assignor. No Assignor shall change its legal name or
assume or operate in any jurisdiction under any trade, fictitious or other name
except those names listed on Annex D hereto for such Assignor and new names
established in accordance with the last sentence of this Section 2.8. No
Assignor shall assume or operate in any jurisdiction under any new trade,
fictitious or other name until (i) it shall have given to the Collateral Agent
not less than 30 days' prior written notice of its intention so to do, clearly
describing such new name and the jurisdictions in which such new name shall be
used and providing such other information in connection therewith as the
Collateral Agent may reasonably request, (ii) with respect to such new name, it
shall have taken all action reasonably requested by the Collateral Agent to
maintain the security interest of the Collateral Agent in the Collateral
intended to be granted hereby at all times fully perfected and in full force and
effect and (iii) at the request of the Collateral Agent, it shall have furnished
an opinion of counsel reasonably acceptable to the Collateral Agent to the
effect that all financing or continuation statements and amendments or
supplements thereto have been filed in the appropriate filing office or offices,
and all other actions have been taken, in order to perfect (and maintain the
perfection of) the security interest granted hereby in respect of the types of
Collateral referred to in Section 2.1 hereof.
Exhibit G
Page 6
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER
3.1. Additional Representations and Warranties. As of the time
when each of its Receivables arises, each Assignor shall be deemed to have
represented and warranted that, to the best of such Assignor's knowledge, such
Receivable, and all records, papers and documents relating thereto (if any) are
what they purport to be, and to the best of such Assignor's knowledge, such
Receivable will evidence true and valid obligations of the account debtor named
therein.
3.2. Maintenance of Records. Each Assignor will keep and
maintain at its own cost and expense accurate records of its Receivables and
Contracts, including, but not limited to, originals of all documentation
(including each Contract) with respect thereto, records of all payments
received, all credits granted thereon, all merchandise returned and all other
dealings therewith, and such Assignor will make the same available on such
Assignor's premises to the Collateral Agent for inspection, at such Assignor's
own cost and expense, at any and all reasonable times upon prior notice to such
Assignor. Upon the occurrence and during the continuance of an Event of Default
and at the request of the Collateral Agent, such Assignor shall, at its own cost
and expense, deliver all tangible evidence of its Receivables and Contract
Rights (including, without limitation, all documents evidencing the Receivables
and all Contracts) and such books and records to the Collateral Agent or to its
representatives (copies of which evidence and books and records may be retained
by such Assignor).
3.3. Direction to Account Debtors; Contracting Parties; etc.
Upon the occurrence and during the continuance of an Event of Default, and if
the Collateral Agent so directs any Assignor, such Assignor agrees (x) to cause
all payments on account of the Receivables and Contracts to be made directly to
the Cash Collateral Account, (y) that the Collateral Agent may, at its option,
directly notify the obligors with respect to any Receivables and/or under any
Contracts to make payments with respect thereto as provided in the preceding
clause (x) and (y) that the Collateral Agent may enforce collection of any such
Receivables and Contracts and may adjust, settle or compromise the amount of
payment thereof, in the same manner and to the same extent as such Assignor.
Without notice to or assent by any Assignor, the Collateral Agent may apply any
or all amounts then in, or thereafter deposited in, the Cash Collateral Account
which application shall be effected in the manner provided in Section 5.4 of
this Agreement. The costs and expenses (including reasonable attorneys' fees) of
collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor. The Collateral Agent shall deliver a copy of
each notice referred to in the preceding clause (y) to the relevant Assignor;
provided, that the failure by the Collateral Agent to so notify such Assignor
shall not affect the effectiveness of such notice or the other rights of the
Collateral Agent created by this Section 3.3; provided further, that the
Collateral Agent will promptly rescind any notice theretofore given under this
Section 3.3 after all Events of Defaults have been cured or waived.
3.4. Modification of Terms; etc. Except in accordance with
such Assignor's ordinary course of business and consistent with sound business
judgment, no Assignor shall rescind or cancel any indebtedness evidenced by any
Receivable or under any Contract, or materially modify any term thereof or make
Exhibit G
Page 7
any material adjustment with respect thereto, or extend or renew the same, or
compromise or settle any material dispute, claim, suit or legal proceeding
relating thereto, or sell any Receivable or Contract, or interest therein,
without the prior written consent of the Collateral Agent. To the extent
consistent with sound business judgment, each Assignor will duly fulfill all
obligations on its part to be fulfilled under or in connection with the
Receivables and Contracts and will do nothing to impair the rights of the
Collateral Agent in the Receivables or Contracts.
3.5. Collection. Each Assignor shall endeavor in accordance
with reasonable business practices to cause to be collected from the account
debtor named in each of its Receivables or obligor under any Contract, as and
when due (including, without limitation, amounts which are delinquent, such
amounts to be collected in accordance with generally accepted lawful collection
procedures) any and all amounts owing under or on account of such Receivable or
Contract, and apply forthwith upon receipt thereof all such amounts as are so
collected to the outstanding balance of such Receivable or under such Contract,
except that, prior to the occurrence of an Event of Default, any Assignor may
allow in the ordinary course of business as adjustments to amounts owing under
its Receivables and Contracts (i) an extension or renewal of the time or times
of payment, or settlement for less than the total unpaid balance, which such
Assignor finds appropriate in accordance with reasonable business judgment and
(ii) a refund or credit due as a result of returned or damaged merchandise or
improperly performed services or for other reasons which such Assignor finds
appropriate in accordance with reasonable business judgment. The reasonable
costs and expenses (including, without limitation, reasonable attorneys' fees)
of collection, whether incurred by an Assignor or the Collateral Agent, shall be
borne by the relevant Assignor.
3.6. Delivery of Instruments. If any amount payable under or
in connection with any of the Collateral shall be or become evidenced by any
Instrument, such Instrument shall be promptly delivered to the Collateral Agent,
duly endorsed in a manner satisfactory to the Collateral Agent, to be held as
Collateral pursuant to this Agreement, provided that, so long as no Event of
Default shall have occurred and be continuing, each Assignor may retain for
collection in the ordinary course of business any Instruments received by such
Assignor in the ordinary course of business, and the Collateral Agent shall,
promptly upon request of such Assignor, make appropriate arrangements for making
any other Instrument pledged by such Assignor available to such Assignor for
purposes of presentation, collection or renewal (any such arrangement to be
effected, to the extent deemed appropriate by the Collateral Agent, against
trust receipt or like document). Until such Collateral is delivered to the
Collateral Agent, such Assignor shall hold such property in trust for the
Secured Creditors, segregated from other property of such Assignor, as
additional collateral security for the Obligations.
3.7. Assignors Remain Liable Under Receivables. Anything
herein to the contrary notwithstanding, the Assignors shall remain liable under
each of the Receivables to observe and perform all of the conditions and
obligations to be observed and performed by them thereunder, all in accordance
with the terms of any agreement giving rise to such Receivables. Neither the
Collateral Agent nor any other Secured Creditor shall have any obligation or
liability under any Receivable (or any agreement giving rise thereto) by reason
of or arising out of this Agreement or the receipt by the Collateral Agent or
Exhibit G
Page 8
any other Secured Creditor of any payment relating to such Receivable pursuant
hereto, nor shall the Collateral Agent or any other Secured Creditor be
obligated in any manner to perform any of the obligations of any Assignor under
or pursuant to any Receivable (or any agreement giving rise thereto), to make
any payment, to make any inquiry as to the nature or the sufficiency of any
payment received by them or as to the sufficiency of any performance by any
party under any Receivable (or any agreement giving rise thereto), to present or
file any claim, to take any action to enforce any performance or to collect the
payment of any amounts which may have been assigned to them or to which they may
be entitled at any time or times.
3.8. Assignors Remain Liable Under Contracts. Anything herein
to the contrary notwithstanding, the Assignors shall remain liable under each of
the Contracts to observe and perform all of the conditions and obligations to be
observed and performed by them thereunder, all in accordance with and pursuant
to the terms and provisions of each Contract. Neither the Collateral Agent nor
any other Secured Creditor shall have any obligation or liability under any
Contract by reason of or arising out of this Agreement or the receipt by the
Collateral Agent or any other Secured Creditor of any payment relating to such
contract pursuant hereto, nor shall the Collateral Agent or any other Secured
Creditor be obligated in any manner to perform any of the obligations of any
Assignor under or pursuant to any Contract, to make any payment, to make any
inquiry as to the nature or the sufficiency of any performance by any party
under any Contract, to present or file any claim, to take any action to enforce
any performance or to collect the payment of any amounts which may have been
assigned to them or to which they may be entitled at any time or times.
3.9. Further Actions. Each Assignor will, at its own expense,
make, execute, endorse, acknowledge, file and/or deliver to the Collateral Agent
from time to time such vouchers, invoices, schedules, confirmatory assignments,
conveyances, financing statements, transfer endorsements, certificates, reports
and other assurances or instruments and take such further steps relating to its
Receivables, Contracts, Instruments and other property or rights covered by the
security interest hereby granted, as the Collateral Agent may reasonably
require.
ARTICLE IV
PROVISIONS CONCERNING ALL COLLATERAL
4.1. Protection of Collateral Agent's Security. Each Assignor
will at all times keep its Inventory and Equipment insured in favor of the
Collateral Agent, at such Assignor's own expense to the extent and in the manner
provided in the Secured Debt Agreements; all policies or certificates with
respect to such insurance (and any other insurance maintained by such Assignor)
(i) shall name the Collateral Agent as additional insured and loss payee as its
respective interest may appear and (ii) shall state that such insurance policies
shall not be cancelled or materially changed without at least 30 days' prior
written notice thereof (or 10 days' prior written notice thereof in the case of
non-payment of premium) by the insurer to the Collateral Agent; and certified
copies of such policies or certificates with respect thereto shall be deposited
with the Collateral Agent. If any Assignor shall fail to insure its Inventory
and Equipment in accordance with the preceding sentence, or if any Assignor
shall fail to so name the Collateral Agent as additional insured and loss payee
or deposit all policies or certificates with respect thereto, the Collateral
Exhibit G
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Agent shall have the right (but shall be under no obligation) to procure such
insurance and such Assignor agrees to promptly reimburse the Collateral Agent
for all costs and expenses of procuring such insurance. Except to the extent
otherwise permitted to be retained by such Assignor or applied by such Assignor
pursuant to the terms of the Secured Debt Agreements, the Collateral Agent
shall, at the time any proceeds of such insurance are distributed to the Secured
Creditors, apply such proceeds in accordance with Section 5.4 hereof. Each
Assignor assumes all liability and responsibility in connection with the
Collateral acquired by it and the liability of such Assignor to pay the
Obligations shall in no way be affected or diminished by reason of the fact that
such Collateral may be lost, destroyed, stolen, damaged or for any reason
whatsoever unavailable to such Assignor.
4.2. Further Actions. Each Assignor will, at its own expense
and upon the request of the Collateral Agent, make, execute, endorse,
acknowledge, file and/or deliver to the Collateral Agent from time to time such
lists, descriptions and designations of its Collateral, warehouse receipts,
receipts in the nature of warehouse receipts, bills of lading, documents of
title, vouchers, invoices, schedules, confirmatory assignments, conveyances,
financing statements, transfer endorsements, certificates, reports and other
assurances or instruments and take such further steps relating to the Collateral
and other property or rights covered by the security interest hereby granted,
which the Collateral Agent deems reasonably appropriate or advisable to perfect,
preserve or protect its security interest in the Collateral.
4.3. Financing Statements. Each Assignor agrees to execute and
deliver to the Collateral Agent such financing statements, in form reasonably
acceptable to the Collateral Agent, as the Collateral Agent may from time to
time reasonably request or as are necessary or desirable in the opinion of the
Collateral Agent to establish and maintain a valid, enforceable, first priority
perfected security interest in the Collateral as provided herein and the other
rights and security contemplated hereby all in accordance with the UCC as
enacted in any and all relevant jurisdictions or any other relevant law. Each
Assignor will pay any applicable filing fees, recordation taxes and related
expenses relating to its Collateral. Each Assignor hereby authorizes the
Collateral Agent to file any such financing statements without the signature of
such Assignor where permitted by law, provided that the Collateral Agent shall
deliver a copy of any said financing statement to the relevant Assignor.
ARTICLE V
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT
5.1. Remedies; Obtaining the Collateral Upon Default. Each
Assignor agrees that, if any Event of Default shall have occurred and be
continuing, then and in every such case, the Collateral Agent, in addition to
any rights now or hereafter existing under applicable law, shall have all rights
as a secured creditor under any UCC, and such additional rights and remedies to
which a secured creditor is entitled under the laws in effect, in all relevant
jurisdictions and may:
(i) personally, or by agents or attorneys, immediately take
possession of the Collateral or any part thereof, from such Assignor or
any other Person who then has possession of any part thereof with or
Exhibit G
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without notice or process of law, and for that purpose may enter upon
such Assignor's premises where any of the Collateral is located and
remove the same and use in connection with such removal any and all
services, supplies, aids and other facilities of such Assignor;
(ii) instruct the obligor or obligors on any agreement,
instrument or other obligation (including, without limitation, the
Receivables and the Contracts) constituting the Collateral to make any
payment required by the terms of such agreement, instrument or other
obligation directly to the Collateral Agent;
(iii) withdraw all monies, securities and instruments in the
Cash Collateral Account for application to the Obligations in
accordance with Section 5.4 hereof;
(iv) withdraw all monies, securities and investments in any
Pledged Account for application to the Obligations in accordance with
Section 5.4 hereof, and in connection therewith, deliver to any Pledged
Account Bank written notice directing the Pledged Account Bank to send
each day's deposit to the relevant Pledged Account by wire and in tact
to the account or accounts designated by the Collateral Agent in such
written notice;
(v) sell, assign or otherwise liquidate any or all of the
Collateral or any part thereof in accordance with Section 5.2 hereof,
or direct the relevant Assignor to sell, assign or otherwise liquidate
any or all of the Collateral or any part thereof, and, in each case,
take possession of the proceeds of any such sale or liquidation; and
(vi) take possession of the Collateral or any part thereof, by
directing the relevant Assignor in writing to deliver the same to the
Collateral Agent at any place or places designated by the Collateral
Agent, in which event such Assignor shall at its own expense:
(x) forthwith cause the same to be moved to the place
or places so designated by the Collateral Agent and there
delivered to the Collateral Agent;
(y) store and keep any Collateral so delivered to the
Collateral Agent at such place or places pending further
action by the Collateral Agent as provided in Section 5.2
hereof;
(z) while the Collateral shall be so stored and kept,
provide such guards and maintenance services as shall be
necessary to protect the same and to preserve and maintain
them in good condition;
it being understood that each Assignor's obligation so to deliver the Collateral
is of the essence of this Agreement and that, accordingly, upon application to a
court of equity having jurisdiction, the Collateral Agent shall be entitled to a
decree requiring specific performance by such Assignor of said obligation. By
accepting the benefits of this Agreement, the Secured Creditors agree that this
Agreement may be enforced only by the action of the Collateral Agent acting upon
the instructions of the Required Secured Creditors and that no other Secured
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Creditor shall have any right individually to seek to enforce this Agreement or
to realize upon the security to be granted hereby, it being understood and
agreed that such rights and remedies may be exercised only by the Collateral
Agent for the benefit of the Secured Creditors in accordance with the terms of
this Agreement and the Credit Agreement.
5.2. Remedies; Disposition of the Collateral. Any Collateral
repossessed by the Collateral Agent under or pursuant to Section 5.1 hereof and
any other Collateral whether or not so repossessed by the Collateral Agent, may
be sold, assigned, leased or otherwise disposed of under one or more contracts
or as an entirety, and without the necessity of gathering at the place of sale
the property to be sold, and in general in such manner, at such time or times,
at such place or places and on such terms as the Collateral Agent may, in
compliance with any mandatory requirements of applicable law, determine to be
commercially reasonable. Any of the Collateral may be sold, leased or otherwise
disposed of, in the condition in which the same existed when taken by the
Collateral Agent. Any such disposition which shall be a private sale or other
private proceedings permitted by such requirements shall be made upon not less
than 10 days' prior written notice (which notice shall be deemed reasonable) to
the relevant Assignor specifying the time at which such disposition is to be
made and the intended sale price or other consideration therefor, and shall be
subject, for the 10 days after the giving of such notice, to the right of the
relevant Assignor or any nominee of such Assignor to acquire the Collateral
involved at a price or for such other consideration at least equal to the
intended sale price or other consideration so specified. Any such disposition
which shall be a public sale permitted by such requirements shall be made upon
not less than 10 days' prior written notice (which notice shall be deemed
reasonable) to the relevant Assignor specifying the time and place of such sale
and, in the absence of applicable requirements of law, shall be by public
auction (which may, at the Collateral Agent's option, be subject to reserve),
after publication of notice of such auction (where required by applicable law)
not less than 10 days prior thereto. The Collateral Agent may, without notice or
publication, adjourn any public or private sale or cause the same to be
adjourned from time to time by announcement at the time and place fixed for the
sale, and such sale may be made at any time or place to which the sale may be so
adjourned. To the extent permitted by any such requirement of law, the
Collateral Agent may bid for and become the purchaser of the Collateral or any
item thereof, offered for sale in accordance with this Section without
accountability to the relevant Assignor. If, under mandatory requirements of
applicable law, the Collateral Agent shall be required to make disposition of
the Collateral within a period of time which does not permit the giving of
notice to the relevant Assignor as hereinabove specified, the Collateral Agent
need give such Assignor only such notice of disposition as shall be reasonably
practicable in view of such mandatory requirements of applicable law.
5.3. Waiver of Claims. Except as otherwise provided in this
Agreement, EACH ASSIGNOR HEREBY WAIVES, TO THE EXTENT PERMITTED BY APPLICABLE
LAW, NOTICE AND JUDICIAL HEARING IN CONNECTION WITH THE COLLATERAL AGENT'S
TAKING POSSESSION OR THE COLLATERAL AGENT'S DISPOSITION OF ANY OF THE
COLLATERAL, INCLUDING, WITHOUT LIMITATION, ANY AND ALL PRIOR NOTICE AND HEARING
FOR ANY PREJUDGMENT REMEDY OR REMEDIES, and each Assignor hereby further waives,
to the extent permitted by law:
Exhibit G
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(i) all damages occasioned by such taking of possession except
any damages which are the direct result of the Collateral Agent's gross
negligence or willful misconduct;
(ii) all other requirements as to the time, place and terms of
sale or other requirements with respect to the enforcement of the
Collateral Agent's rights hereunder; and
(iii)all rights of redemption, appraisement, valuation, stay,
extension or moratorium now or hereafter in force under any applicable
law in order to prevent or delay the enforcement of this Agreement or
the absolute sale of the Collateral or any portion thereof, and each
Assignor, for itself and all who may claim under it, insofar as it or
they now or hereafter lawfully may, hereby waives the benefit of all
such laws.
Subject to applicable law, any sale of, or the grant of options to purchase, or
any other realization upon, any Collateral shall operate to divest all right,
title, interest, claim and demand, either at law or in equity, of the relevant
Assignor therein and thereto, and shall be a perpetual bar both at law and in
equity against such Assignor and against any and all Persons claiming or
attempting to claim the Collateral so sold, optioned or realized upon, or any
part thereof, from, through and under such Assignor.
5.4. Application of Proceeds. (a) All moneys collected by the
Collateral Agent (or, to the extent the Pledge Agreement, the Partnership Pledge
and Security Agreement, any Collateral Assignment or any Mortgage require
proceeds of collateral under such Security Document to be applied in accordance
with the provisions of this Agreement, the Pledgee, Assignee or Mortgagee under
such other Security Document) upon any sale or other disposition of the
Collateral, together with all other moneys received by the Collateral Agent
hereunder, shall be applied as follows:
(i) first, to the payment of all amounts owing the Collateral
Agent of the type described in clauses (iii) and (iv) of the definition
of "Obligations";
(ii) second, to the extent proceeds remain after the
application pursuant to the preceding clause (i), an amount equal to
the outstanding Primary Obligations shall be paid to the Secured
Creditors as provided in Section 5.4(d) hereof, with each Secured
Creditor receiving an amount equal to such outstanding Primary
Obligations or, if the proceeds are insufficient to pay in full all
such Primary Obligations, its Pro Rata Share of the amount remaining to
be distributed;
(iii) third, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) and (ii), an amount
equal to the outstanding Secondary Obligations shall be paid to the
Secured Creditors as provided in Section 5.4(d) hereof, with each
Secured Creditor receiving an amount equal to its outstanding Secondary
Obligations or, if the proceeds are insufficient to pay in full all
such Secondary Obligations, its Pro Rata Share of the amount remaining
to be distributed; and
Exhibit G
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(iv) fourth, to the extent proceeds remain after the
application pursuant to the preceding clauses (i) through (iii),
inclusive, and following the termination of this Agreement pursuant to
Section 9.8(a) hereof, to the relevant Assignor or to whomever may be
lawfully entitled to receive such surplus.
(b) For purposes of this Agreement (x) "Pro Rata Share" shall
mean, when calculating a Secured Creditor's portion of any distribution or
amount, that amount (expressed as a percentage) equal to a fraction the
numerator of which is the then unpaid amount of such Secured Creditor's Primary
Obligations or Secondary Obligations, as the case may be, and the denominator of
which is the then outstanding amount of all Primary Obligations or Secondary
Obligations, as the case may be, (y) "Primary Obligations" shall mean (i) in the
case of the Credit Agreement Obligations, all principal of, and interest on, all
Loans, all reimbursement obligations and Unpaid Drawings with respect to Letters
of Credit, and all Fees and (ii) in the case of the Other Obligations, all
amounts due under the Interest Rate Protection Agreements or Other Hedging
Agreements (other than indemnities, fees (including, without limitation,
reasonable attorneys' fees) and similar obligations and liabilities) and (z)
"Secondary Obligations" shall mean all Obligations other than Primary
Obligations.
(c) When payments to Secured Creditors are based upon their
respective Pro Rata Shares, the amounts received by such Secured Creditors
hereunder shall be applied (for purposes of making determinations under this
Section 5.4 only) (i) first, to their Primary Obligations and (ii) second, to
their Secondary Obligations. If any payment to any Secured Creditor of its Pro
Rata Share of any distribution would result in overpayment to such Secured
Creditor, such excess amount shall instead be distributed in respect of the
unpaid Primary Obligations or Secondary Obligations, as the case may be, of the
other Secured Creditors, with each Secured Creditor whose Primary Obligations or
Secondary Obligations, as the case may be, have not been paid in full to receive
an amount equal to such excess amount multiplied by a fraction the numerator of
which is the unpaid Primary Obligations or Secondary Obligations, as the case
may be, of such Secured Creditor and the denominator of which is the unpaid
Primary Obligations or Secondary Obligations, as the case may be, of all Secured
Creditors entitled to such distribution.
(d) All payments required to be made hereunder shall be made
(x) if to the Bank Creditors, to the Administrative Agent under the Credit
Agreement for the account of the Bank Creditors, and (y) if to the Other
Creditors, to the trustee, paying agent or other similar representative (each a
"Representative") for the Other Creditors or, in the absence of such a
Representative, directly to the Other Creditors.
(e) For purposes of applying payments received in accordance
with this Section 5.4, the Collateral Agent shall be entitled to rely upon (i)
the Administrative Agent under the Credit Agreement and (ii) the Representative
for the Other Creditors or, in the absence of such a Representative, upon the
Other Creditors for a determination (which the Administrative Agent, each
Representative for any Other Creditors and the Secured Creditors agree (or shall
agree) to provide upon request of the Collateral Agent) of the outstanding
Primary Obligations and Secondary Obligations owed to the Bank Creditors or the
Other Creditors, as the case may be. Unless it has actual knowledge (including
by way of written notice from a Bank Creditor or an Other Creditor) to the
contrary, the Administrative Agent and each Representative, in furnishing
information pursuant to the preceding sentence, and the Collateral Agent, in
acting hereunder, shall be entitled to assume that no Secondary Obligations are
outstanding. Unless it has actual knowledge (including by way of written notice
Exhibit G
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from an Other Creditor) to the contrary, the Collateral Agent, in acting
hereunder, shall be entitled to assume that no Interest Rate Protection
Agreements or Other Hedging Agreements are in existence.
(f) It is understood that the Borrower shall remain liable,
the Parent Guarantor shall remain liable, and the Subsidiary Guarantors shall
remain jointly and severally liable, in each case to the extent of any
deficiency between the amount of the proceeds of the Collateral and the
aggregate amount of the Obligations.
5.5. Remedies Cumulative. Each and every right, power and
remedy hereby specifically given to the Collateral Agent shall be in addition to
every other right, power and remedy specifically given under this Agreement, the
other Secured Debt Agreements or now or hereafter existing at law, in equity or
by statute and each and every right, power and remedy whether specifically
herein given or otherwise existing may be exercised from time to time or
simultaneously and as often and in such order as may be deemed expedient by the
Collateral Agent. All such rights, powers and remedies shall be cumulative and
the exercise or the beginning of the exercise of one shall not be deemed a
waiver of the right to exercise any other or others. No delay or omission of the
Collateral Agent in the exercise of any such right, power or remedy and no
renewal or extension of any of the Obligations shall impair any such right,
power or remedy or shall be construed to be a waiver of any Default or Event of
Default or an acquiescence therein. No notice to or demand on any Assignor in
any case shall entitle it to any other or further notice or demand in similar or
other circumstances or constitute a waiver of any of the rights of the
Collateral Agent to any other or further action in any circumstances without
notice or demand. In the event that the Collateral Agent shall bring any suit to
enforce any of its rights hereunder and shall be entitled to judgment, then in
such suit the Collateral Agent may recover reasonable expenses, including
reasonable attorneys' fees, and the amounts thereof shall be included in such
judgment.
5.6. Discontinuance of Proceedings. In case the Collateral
Agent shall have instituted any proceeding to enforce any right, power or remedy
under this Agreement by foreclosure, sale, entry or otherwise, and such
proceeding shall have been discontinued or abandoned for any reason or shall
have been determined adversely to the Collateral Agent, then and in every such
case the relevant Assignor, the Collateral Agent and each holder of any of the
Obligations shall be restored to their former positions and rights hereunder
with respect to the Collateral subject to the security interest created under
this Agreement, and all rights, remedies and powers of the Collateral Agent
shall continue as if no such proceeding had been instituted.
ARTICLE VI
INDEMNITY
6.1. Indemnity. (a) Each Assignor jointly and severally agrees
to indemnify, reimburse and hold the Collateral Agent, each other Secured
Creditor and their respective successors, permitted assigns, employees and
Exhibit G
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agents (hereinafter in this Section 6.1 referred to individually as
"Indemnitee," and collectively as "Indemnitees") harmless from any and all
liabilities, obligations, damages, injuries, penalties, claims, demands,
actions, suits, judgments and costs, expenses or disbursements (including
reasonable attorneys' fees and expenses) (for the purposes of this Section 6.1
the foregoing are collectively called "expenses") of whatsoever kind and nature
imposed on, asserted against or incurred by any of the Indemnitees in any way
relating to or arising out of this Agreement, any other Secured Debt Agreement
or any other document executed in connection herewith or therewith or in any
other way connected with the administration of the transactions contemplated
hereby or thereby or the enforcement of any of the terms of, or the preservation
of any rights under any thereof, or in any way relating to or arising out of the
manufacture, ownership or use of the Collateral; provided that no Indemnitee
shall be indemnified pursuant to this Section 6.1(a) for losses, damages or
liabilities to the extent caused by the gross negligence or willful misconduct
of such Indemnitee. Each Assignor agrees that upon written notice by any
Indemnitee of the assertion of such a liability, obligation, damage, injury,
penalty, claim, demand, action, suit or judgment, the relevant Assignor shall
assume full responsibility for the defense thereof. Each Indemnitee agrees to
promptly notify the relevant Assignor of any such assertion of which such
Indemnitee has knowledge; provided that the failure to give such notice shall
not affect such Indemnitee's right to indemnification hereunder except to the
extent (but only to the extent) that such Indemnitee's damages are increased as
a result of such failure.
(b) Without limiting the application of Section 6.1(a) hereof,
each Assignor agrees, jointly and severally, to pay, or reimburse the Collateral
Agent for any and all reasonable fees, costs and expenses of whatever kind or
nature incurred in connection with the creation, preservation or protection of
the Collateral Agent's Liens on, and security interest in, the Collateral,
including, without limitation, all fees and taxes in connection with the
recording or filing of instruments and documents in public offices, payment or
discharge of any taxes or Liens upon or in respect of the Collateral, premiums
for insurance with respect to the Collateral and all other fees, costs and
expenses in connection with protecting, maintaining or preserving the Collateral
and the Collateral Agent's interest therein, whether through judicial
proceedings or otherwise, or in defending or prosecuting any actions, suits or
proceedings arising out of or relating to the Collateral.
(c) If and to the extent that the obligations of any Assignor
under this Section 6.1 are unenforceable for any reason, such Assignor hereby
agrees to make the maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
6.2. Indemnity Obligations Secured by Collateral; Survival.
Any amounts paid by any Indemnitee as to which such Indemnitee has the right to
reimbursement shall constitute Obligations secured by the Collateral. The
indemnity obligations of each Assignor contained in this Article VI shall
continue in full force and effect notwithstanding the full payment of all of the
other Obligations and notwithstanding the discharge thereof.
Exhibit G
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ARTICLE VII
DEFINITIONS
The following terms shall have the meanings herein specified.
Such definitions shall be equally applicable to the singular and plural forms of
the terms defined.
"Administrative Agent" shall have the meaning provided in the
recitals of this Agreement.
"Agreement" shall mean this Security Agreement as the same may
be modified, supplemented or amended from time to time in accordance with its
terms.
"Assignor" shall have the meaning provided in the first
paragraph of this Agreement.
"Bank Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Banks" shall have the meaning provided in the recitals of
this Agreement.
"Borrower" shall have the meaning provided in the recitals of
this Agreement.
"Cash Collateral Account" shall mean a non-interest bearing
cash collateral account maintained with, and in the sole dominion and control
of, the Collateral Agent for the benefit of the Secured Creditors.
"Chattel Paper" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Class" shall have the meaning provided in Section 9.2 of this
Agreement.
"Collateral" shall have the meaning provided in Section 1.1(a)
of this Agreement.
"Collateral Agent" shall have the meaning provided in the
first paragraph of this Agreement.
"Contract Rights" shall mean all rights of any Assignor under
each Contract to which such Assignor is a party or beneficiary, including,
without limitation, (i) any and all rights to receive and demand payments under
any or all Contracts, (ii) any and all rights to receive and compel performance
under any or all Contracts and (iii) any and all other rights, interests and
claims now existing or in the future arising in connection with any or all
Contracts.
"Contracts" shall mean all contracts between any Assignor and
one or more additional parties (including, without limitation, each Management
Agreement, each franchise agreement, each partnership agreement, each limited
liability company agreement or operating agreement and any Interest Rate
Protection Agreements or Other Hedging Agreements).
Exhibit G
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"Credit Agreement" shall have the meaning provided in the
recitals of this Agreement.
"Credit Agreement Obligations" shall have the meaning provided
in the definition of "Obligations" in this Article VII.
"Default" shall mean any event which, with notice or lapse of
time, or both, would constitute an Event of Default.
"Documents" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Equipment" shall mean any "equipment," as such term is
defined in the Uniform Commercial Code as in effect on the date hereof in the
State of New York, now or hereafter owned by any Assignor and, in any event,
shall include, but shall not be limited to, all machinery, equipment,
furnishings, fixtures, appliances, signs, artwork, office furnishings and
equipment, guest room furnishings, linens, dishware, partitions, screens,
awnings, shades, blinds, floor coverings and vehicles now or hereafter owned by
any Assignor and any and all additions, substitutions and replacements of any of
the foregoing, wherever located, together with all attachments, components,
parts, equipment and accessories installed thereon or affixed thereto.
"Event of Default" shall mean any Event of Default under, and
as defined in, the Credit Agreement and shall in any event, without limitation,
include any payment default on any of the Other Obligations after the expiration
of any applicable grace period.
"General Intangibles" shall have the meaning provided in the
Uniform Commercial Code as in effect on the date hereof in the State of New York
and shall in any event include all of any Assignor's claims, rights, powers,
privileges, authority, options, security interests, liens and remedies under any
partnership agreement, limited liability company agreement or operating
agreement to which such Assignor is a party or with respect to any partnership
or limited liability company of which such Assignor is a partner or a member, as
the case may be.
"Goods" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Indemnitee" shall have the meaning provided in Section 6.1 of
this Agreement.
"Instrument" shall have the meaning provided in the Uniform
Commercial Code as in effect on the date hereof in the State of New York.
"Inventory" shall mean merchandise, inventory and goods, and
all additions, substitutions and replacements thereof, wherever located,
together with all goods, supplies, incidentals, packaging materials, labels,
materials and any other items used or usable in manufacturing, processing,
packaging or shipping same, in all stages of production -- from raw materials
through work-in-process to finished goods -- and all products and proceeds of
whatever sort and wherever located and any portion thereof which may be
Exhibit G
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returned, rejected, reclaimed or repossessed by the Collateral Agent from any
Assignor's customers, and shall specifically include all "inventory" as such
term is defined in the Uniform Commercial Code as in effect on the date hereof
in the State of New York, now or hereafter owned by any Assignor, provided that
the term inventory shall not include any liquor located in any jurisdiction to
the extent that the laws of such jurisdiction prohibit the creation of a
security interest in liquor.
"Lien" shall mean any security interest, mortgage, pledge,
lien, claim, charge, encumbrance, title retention agreement, lessor's interest
in a financing lease or analogous instrument, in, of, or on any Assignor's
property.
"Obligations" shall mean (i) the full and prompt payment when
due (whether at the stated maturity, by acceleration or otherwise) of all
obligations and liabilities (including, without limitation, the principal of and
interest on the Notes issued by, and Loans made to, the Borrower under the
Credit Agreement, all reimbursement obligations and Unpaid Drawings with respect
to Letters of Credit, and all indemnities, fees and interest thereon or owed
thereunder) of each Assignor to the Bank Creditors, whether now existing or
hereafter incurred under, arising out of or in connection with any Credit
Document (including, without limitation, in the case of the Guarantor, all of
its obligations and liabilities under its Guaranty) to which such Assignor is a
party and the due performance and compliance by each Assignor with all of the
terms, conditions and agreements contained in the Credit Agreement and such
other Credit Documents (all such principal, interest, obligations and
liabilities being herein collectively called the "Credit Agreement
Obligations"); (ii) the full and prompt payment when due (whether at the stated
maturity, by acceleration or otherwise) of all obligations and liabilities of
each Assignor to the Other Creditors, whether now existing or hereafter incurred
under, arising out of or in connection with any Interest Rate Protection
Agreement or Other Hedging Agreement (including, without limitation, in the case
of the Guarantor, all of its obligations and liabilities under its Guaranty) and
the due performance and compliance by such Assignor with all the terms,
conditions and agreements contained in such Interest Rate Protection Agreements
or Other Hedging Agreements (all such obligations and liabilities described in
this clause (ii) being herein collectively called the "Other Obligations");
(iii) any and all reasonable sums advanced by the Collateral Agent in order to
preserve the Collateral or preserve its security interest in the Collateral;
(iv) in the event of any proceeding for the collection or enforcement of any
obligations or liabilities referred to in clauses (i) and (ii) above, after an
Event of Default shall have occurred and be continuing, the reasonable expenses
of re-taking, holding, preparing for sale or lease, selling or otherwise
disposing of or realizing on the Collateral, or of any exercise by the
Collateral Agent of its rights hereunder, together with reasonable attorneys'
fees and court costs; and (v) all amounts paid by any Indemnitee as to which
such Indemnitee has the right to reimbursement under Section 6.1 of this
Agreement.
"Other Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Other Obligations" shall have the meaning provided in the
definition of "Obligations" in this Article VII.
Exhibit G
Page 19
"Permits" shall mean, to the extent permitted to be assigned
by the terms thereof or by applicable law, all licenses, permits, rights,
orders, variances, franchises or authorizations of or from any governmental
authority or agency in connection with the maintenance or operation of any
Borrowing Base Property owned or leased by any Assignor.
"Pledged Account Banks" shall have the meaning provided in
Section 2.6(a) of this Agreement.
"Pledged Accounts" shall have the meaning provided in Section
1.1(a) of this Agreement.
"Primary Obligations" shall have the meaning provided in
Section 5.4(b) of this Agreement.
"Pro Rata Share" shall have the meaning provided in Section
5.4(b) of this Agreement.
"Proceeds" shall have the meaning provided in the Uniform
Commercial Code as in effect in the State of New York on the date hereof or
under other relevant law and, in any event, shall include, but not be limited
to, (i) any and all proceeds of any insurance, indemnity, warranty or guaranty
payable to the Collateral Agent or any Assignor from time to time with respect
to any of the Collateral, (ii) any and all payments (in any form whatsoever)
made or due and payable to any Assignor from time to time in connection with any
requisition, confiscation, condemnation, seizure or forfeiture of all or any
part of the Collateral by any governmental authority (or any person acting under
color of governmental authority) and (iii) any and all other amounts from time
to time paid or payable under or in connection with any of the Collateral.
"Receivables" shall mean any "account" as such term is defined
in the Uniform Commercial Code as in effect on the date hereof in the State of
New York, now or hereafter owned by any Assignor and, in any event, shall
include, but shall not be limited to, all of such Assignor's rights to payment
for goods sold or leased or services performed by such Assignor, whether now in
existence or arising from time to time hereafter, including, without limitation,
rights evidenced by an account, note, contract, security agreement, chattel
paper, or other evidence of indebtedness or security, together with (a) all
security pledged, assigned, hypothecated or granted to or held by such Assignor
to secure the foregoing, (b) all of any Assignor's right, title and interest in
and to any goods, the sale of which gave rise thereto, (c) all guarantees,
endorsements and indemnifications on, or of, any of the foregoing, (d) all
powers of attorney for the execution of any evidence of indebtedness or security
or other writing in connection therewith, (e) all books, records, ledger cards,
and invoices relating thereto, (f) all evidences of the filing of financing
statements and other statements and the registration of other instruments in
connection therewith and amendments thereto, notices to other creditors or
secured parties, and certificates from filing or other registration officers,
(g) all credit information, reports and memoranda relating thereto and (h) all
other writings related in any way to the foregoing.
"REIT" shall have the meaning provided in the recitals of this
Agreement.
Exhibit G
Page 20
"Representative" shall have the meaning provided in Section
5.4(d) of this Agreement.
"Required Secured Creditors" shall mean (i) the Required
Banks, or, to the extent required by Section 12.12 of the Credit Agreement, the
Supermajority Banks or each of the Banks under the Credit Agreement, as the case
may be, so long as any Credit Agreement Obligations remain outstanding and (ii)
in any situation not covered by preceding clause (i), the holders of a majority
of the outstanding principal amount of the Other Obligations.
"Requisite Creditors" shall have the meaning provided in
Section 9.2 of this Agreement.
"Secondary Obligations" shall have the meaning provided in
Section 5.4(b) of this Agreement.
"Secured Creditors" shall have the meaning provided in the
recitals of this Agreement.
"Secured Debt Agreements" shall mean and include this
Agreement, the other Credit Documents and the Interest Rate Protection
Agreements and Other Hedging Agreements.
"Termination Date" shall have the meaning provided in Section
9.8 of this Agreement.
ARTICLE VIII
THE COLLATERAL AGENT
8.1. Appointment. The Secured Creditors, by their acceptance
of the benefits of this Agreement, hereby irrevocably designate German American
Capital Corporation, as Collateral Agent, to act as specified herein. Each
Secured Creditor hereby irrevocably authorizes, and each holder of any Note by
the acceptance of such Note and by the acceptance of the benefits of this
Agreement shall be deemed irrevocably to authorize, the Collateral Agent to take
such action on its behalf under the provisions of this Agreement and any other
instruments and agreements referred to herein and to exercise such powers and to
perform such duties hereunder as are specifically delegated to or required of
the Collateral Agent by the terms hereof and such other powers as are reasonably
incidental thereto. The Collateral Agent may perform any of its duties hereunder
by or through its authorized agents or employees. Without limiting the
generality of the preceding sentence and notwithstanding the provisions of
Section 8.9, GACC, in its capacity as Collateral Agent, shall have the right
upon notice to the Borrower, the Banks and the Issuing Bank, to transfer and
assign all of its rights, duties and obligations as Collateral Agent hereunder
and under the other Credit Documents to any of its Affiliates.
8.2. Nature of Duties. (a) The Collateral Agent shall have
no duties or responsibilities except those expressly set forth in this
Agreement. The duties of the Collateral Agent shall be mechanical and
administrative in nature; the Collateral Agent shall not have by reason of this
Agreement or any other Secured Debt Agreement a fiduciary relationship in
Exhibit G
Page 21
respect of any Secured Creditor; and nothing in this Agreement or any other
Secured Debt Agreement, expressed or implied, is intended to or shall be so
construed as to impose upon the Collateral Agent any obligations in respect of
this Agreement except as expressly set forth herein.
(b) The Collateral Agent shall not be responsible for
insuring the Collateral or for the payment of taxes, charges or assessments or
discharging of Liens upon the Collateral or otherwise as to the maintenance of
the Collateral.
(c) The Collateral Agent shall not be required to ascertain or
inquire as to the performance by any Assignor of any of the covenants or
agreements contained in this Agreement or any other Secured Debt Agreement.
(d) The Collateral Agent shall be under no obligation or duty
to take any action under this Agreement or any other Credit Document if taking
such action (i) would subject the Collateral Agent to a tax in any jurisdiction
where it is not then subject to a tax or (ii) would require the Collateral Agent
to qualify to do business in any jurisdiction where it is not then so qualified,
unless the Collateral Agent receives security or indemnity satisfactory to it
against such tax (or equivalent liability), or any liability resulting from such
qualification, in each case as results from the taking of such action under this
Agreement or any other Credit Document or (iii) would subject the Collateral
Agent to in personam jurisdiction in any locations where it is not then so
subject.
(e) Notwithstanding any other provision of this Agreement,
neither the Collateral Agent nor any of its officers, directors, employees,
affiliates or agents shall, in its individual capacity, be personally liable for
any action taken or omitted to be taken by it in accordance with this Agreement
except for its own gross negligence or willful misconduct.
8.3. Lack of Reliance on the Collateral Agent. Independently
and without reliance upon the Collateral Agent, each Secured Creditor, to the
extent it deems appropriate, has made and shall continue to make (i) its own
independent investigation of the financial condition and affairs of each
Assignor in connection with the making and the continuance of the Obligations
and the taking or not taking of any action in connection therewith, and (ii) its
own appraisal of the creditworthiness of each Assignor, and the Collateral Agent
shall have no duty or responsibility, either initially or on a continuing basis,
to provide any Secured Creditor with any credit or other information with
respect thereto, whether coming into its possession before the extension of any
Obligations or the purchase of any Notes or at any time or times thereafter. The
Collateral Agent shall not be responsible in any manner whatsoever to any
Secured Creditor for the correctness of any recitals, statements, information,
representations or warranties herein or in any document, certificate or other
writing delivered in connection herewith or for the execution, effectiveness,
genuineness, validity, enforceability, perfection, collectibility, priority or
sufficiency of this Agreement or the security interests granted hereunder or the
financial condition of any Assignor or be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement, or the financial condition of any Assignor, or
the existence or possible existence of any Default or Event of Default. The
Collateral Agent makes no representations as to the value or condition of the
Exhibit G
Page 22
Collateral or any part thereof, or as to the title of any Assignor thereto or as
to the security afforded by this Agreement.
8.4. Certain Rights of the Collateral Agent. (a) No Secured
Creditor shall have the right to cause the Collateral Agent to take any action
with respect to the Collateral, with only the Required Secured Creditors having
the right to direct the Collateral Agent to take any such action. If the
Collateral Agent shall request instructions from the Required Secured Creditors
with respect to any act or action (including failure to act) in connection with
this Agreement, the Collateral Agent shall be entitled to refrain from such act
or taking such action unless and until it shall have received instructions from
the Required Secured Creditors and to the extent requested, appropriate
indemnification in respect of actions to be taken, and the Collateral Agent
shall not incur liability to any Person by reason of so refraining. Without
limiting the foregoing, no Secured Creditor shall have any right of action
whatsoever against the Collateral Agent as a result of the Collateral Agent
acting or refraining from acting hereunder in accordance with the instructions
of the Required Secured Creditors.
(b) The Collateral Agent shall be under no obligation to
exercise any of the rights or powers vested in it by this Agreement at the
request or direction of any of the Secured Creditors, unless such Secured
Creditors shall have offered to the Collateral Agent reasonable security or
indemnity against the costs, expenses and liabilities that might be incurred by
it in compliance with such request or direction.
8.5. Reliance. The Collateral Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
notice, statement, certificate, telex or telecopier message, cablegram, order or
other document or telephone message signed, sent or made by the proper Person or
entity, and, with respect to all legal matters pertaining to this Agreement and
its duties thereunder, upon advice of counsel selected by it.
8.6. Indemnification. To the extent the Collateral Agent is
not reimbursed and indemnified by any Assignor under this Agreement, the Secured
Creditors will reimburse and indemnify the Collateral Agent, in proportion to
their respective outstanding principal amounts (including, for this purpose, any
unpaid Primary Obligations in respect of Interest Rate Protection Agreements or
Other Hedging Agreements, as outstanding principal) of Obligations, for and
against any and all liabilities, obligations, losses, damages, penalties,
actions, judgments, suits, costs, expenses or disbursements of any kind or
nature whatsoever which may be imposed on, incurred by or asserted against the
Collateral Agent in performing its duties hereunder, or in any way relating to
or arising out of its actions as Collateral Agent in respect of this Agreement
(including any amounts required to be returned by the Collateral Agent in
respect of Collateral) except for those resulting solely from the Collateral
Agent's own gross negligence or willful misconduct. The indemnities set forth in
this Article VIII shall survive the repayment of all Obligations, with the
respective indemnification at such time to be based upon the outstanding
principal amounts (determined as described above) of Obligations at the time of
the respective occurrence upon which the claim against the Collateral Agent is
based or, if same is not reasonably determinable, based upon the outstanding
principal amounts (determined as described above) of Obligations as in effect
immediately prior to the termination of this Agreement. The indemnities set
forth in this Article VIII are in addition to any indemnities provided by the
Exhibit G
Page 23
Banks to the Collateral Agent pursuant to the Credit Agreement, with the effect
being that the Banks shall be responsible for indemnifying the Collateral Agent
to the extent the Collateral Agent does not receive payments pursuant to this
Section 8.6 from the Secured Creditors (although in such event, and upon the
payment in full of all such amounts owing to the Collateral Agent, the
respective Banks who paid same shall be subrogated to the rights of the
Collateral Agent to receive payment from the Secured Creditors).
8.7. The Collateral Agent in its Individual Capacity. With
respect to its obligations as a lender under the Credit Agreement and any other
Credit Documents to which the Collateral Agent is a party, and to act as agent
under one or more of such Credit Documents, the institution acting as Collateral
Agent shall have the rights and powers specified therein and herein for a
"Bank", or an "Agent", as the case may be, and may exercise the same rights and
powers as though it were not performing the duties specified herein; and the
terms "Banks," "Required Banks," "holders of Notes," or any similar terms shall,
unless the context clearly otherwise indicates, include the institution acting
as Collateral Agent in its individual capacity. The institution acting as
Collateral Agent may accept deposits from, lend money to, and generally engage
in any kind of banking, trust or other business with any Assignor or any
Affiliate or Subsidiary of any Assignor as if it were not performing the duties
specified herein or in the other Credit Documents, and may accept fees and other
consideration from any Assignor for services in connection with the Credit
Agreement, the other Credit Documents and otherwise without having to account
for the same to the Secured Creditors.
8.8. Holders. The Collateral Agent may deem and treat the
payee of any Note as the owner thereof for all purposes hereof unless and until
written notice of the assignment, transfer or endorsement thereof, as the case
may be, shall have been filed with the Collateral Agent. Any request, authority
or consent of any person or entity who, at the time of making such request or
giving such authority or consent, is the holder of any Note, shall be final and
conclusive and binding on any subsequent holder, transferee, assignee or
endorsee, as the case may be, of such Note or of any Note or Notes issued in
exchange therefor.
8.9. Resignation by the Collateral Agent. a)" \* MERGEFORMAT
(a) The Collateral Agent may resign from the performance of all of its functions
and duties under this Agreement at any time by giving 20 Business Days' prior
written notice to each Assignor and the Secured Creditors. Such resignation
shall take effect upon the appointment of a successor Collateral Agent pursuant
to clause (b) or (c) below.
(b) If a successor Collateral Agent shall not have been
appointed within said 20 Business Day period by the Required Secured Creditors,
the Collateral Agent, with the consent of each Assignor, which consent shall not
be unreasonably withheld, shall then appoint a successor Collateral Agent who
shall serve as Collateral Agent hereunder or thereunder until such time, if any,
as the Required Secured Creditors appoint a successor Collateral Agent as
provided above.
(c) If no successor Collateral Agent has been appointed
pursuant to clause (b) above by the 20th Business Day after the date such notice
of resignation was given by the Collateral Agent, the Required Secured Creditors
shall then appoint a successor Collateral Agent who shall serve as Collateral
Exhibit G
Page 24
Agent hereunder or thereunder until such time, if any, as the Required Secured
Creditors appoint a successor Collateral Agent as provided above.
8.10. Fees and Expenses of Collateral Agent. (a) The Borrower
(by its execution and delivery hereof) hereby agrees that it shall pay to German
American Capital Corporation, as the initial Collateral Agent, such fees as have
been separately agreed to in writing with German American Capital Corporation
for acting as Administrative Agent and as Collateral Agent hereunder. In the
event a successor Collateral Agent is at any time appointed pursuant to the
preceding Section 8.9, the Borrower hereby agrees to pay such successor
Collateral Agent such reasonable fees for acting as such as would customarily be
charged by such Collateral Agent for acting in such capacity in similar
situations.
(b) In addition, each Assignor agrees jointly and severally to
pay all reasonable out-of-pocket costs and expenses of the Collateral Agent in
connection with this Agreement and any actions taken by the Collateral Agent
hereunder, and agrees to pay all costs and expenses of the Collateral Agent in
connection with the enforcement of this Agreement and the documents and
instruments referred to herein (including, without limitation, reasonable fees
and disbursements of counsel for the Collateral Agent).
ARTICLE IX
MISCELLANEOUS
9.1. Notices. Except as otherwise specified herein, all
notices, requests, demands or other communications to or upon the respective
parties hereto shall be deemed to have been duly given or made when delivered in
accordance with the provisions of Section 12.03 of the Credit Agreement,
addressed as follows:
(a) if to any Assignor, at it address set forth opposite its
signature below;
(b) if to the Collateral Agent, at:
German American Capital Corporation
31 West 52nd Street
New York, New York 10019
Attention: Allisson Michaels
Telephone No.: (212) 469-6949
Facsimile No.: (212) 469-7210
(c) if to any Bank Creditor, at such address as such Bank
Creditor shall have specified in the Credit Agreement;
(d) if to any Other Creditor, at such address as such Other
Creditor shall have specified in writing to each Assignor and the
Collateral Agent;
or at such other address as shall have been furnished in writing by any Person
described above to the party required to give notice hereunder.
Exhibit G
Page 25
9.2. Waiver; Amendment. None of the terms and conditions of
this Agreement may be changed, waived, modified or varied in any manner
whatsoever unless in writing duly signed by each Assignor directly affected
thereby and the Collateral Agent (with the written consent of the Required
Secured Creditors); provided, however, that any change, waiver, modification or
variance affecting the rights and benefits of a single Class of Secured
Creditors (and not all Secured Creditors in a like or similar manner) shall
require the written consent of the Requisite Creditors of such affected Class.
For the purpose of this Agreement, the term "Class" shall mean each class of
Secured Creditors, i.e., whether (x) the Bank Creditors as holders of the Credit
Agreement Obligations or (y) the Other Creditors as the holders of the Other
Obligations. For the purpose of this Agreement, the term "Requisite Creditors"
of any Class shall mean each of (x) with respect to the Credit Agreement
Obligations, the Required Banks and (y) with respect to the Other Obligations,
the holders of at least a majority of all obligations outstanding from time to
time under the Interest Rate Protection Agreements or Other Hedging Agreements.
9.3. Obligations Absolute. The obligations of each Assignor
hereunder shall remain in full force and effect without regard to, and shall not
be impaired by, (a) any bankruptcy, insolvency, reorganization, arrangement,
readjustment, composition, liquidation or the like of such Assignor; (b) any
exercise or non-exercise, or any waiver of, any right, remedy, power or
privilege under or in respect of this Agreement or any other Secured Debt
Agreement; or (c) any amendment to or modification of any Secured Debt Agreement
(other than this Agreement) or any security for any of the Obligations; whether
or not any Assignor shall have notice or knowledge of any of the foregoing.
9.4. Successors and Assigns. This Agreement shall be binding
upon each Assignor and its successors and assigns (although no Assignor may
assign its rights and obligations hereunder except in accordance with the
provisions of the Secured Debt Agreements) and shall inure to the benefit of the
Collateral Agent and the other Secured Creditors and their respective successors
and assigns. All agreements, statements, representations and warranties made by
each Assignor herein or in any certificate or other instrument delivered by such
Assignor or on its behalf under this Agreement shall be considered to have been
relied upon by the Secured Creditors and shall survive the execution and
delivery of this Agreement and the other Secured Debt Agreements regardless of
any investigation made by the Secured Creditors or on their behalf.
9.5. Headings Descriptive. The headings of the several
sections of this Agreement are inserted for convenience only and shall not in
any way affect the meaning or construction of any provision of this Agreement.
9.6. Governing Law. THIS AGREEMENT AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH AND
BE GOVERNED BY THE LAW OF THE STATE OF NEW YORK WITHOUT REGARD TO CONFLICT OF
LAWS EXCEPT FOR THE CHOICE OF LAW PROVISIONS OF THE NEW YORK UCC.
9.7. Assignor's Duties. It is expressly agreed, anything
herein contained to the contrary notwithstanding, that each Assignor shall
remain liable to perform all of the obligations, if any, assumed by it with
Exhibit G
Page 26
respect to the Collateral and unless the Collateral Agent or any Secured
Creditor shall become the absolute owner of any Collateral pursuant hereto, the
Collateral Agent and the other Secured Creditors shall not have any obligations
or liabilities by reason of or arising out of this Agreement with respect to any
such Collateral, nor shall the Collateral Agent or the other Secured Creditors
be required or obligated in any manner to perform or fulfill any of the
obligations of each Assignor under or with respect to any Collateral.
9.8. Termination; Release. (a) After the Termination Date,
this Agreement shall terminate (provided that all indemnities set forth herein
including, without limitation, in Section 6.1 hereof shall survive such
termination) and the Collateral Agent, at the request and expense of the
respective Assignor, will promptly execute and deliver to such Assignor a proper
instrument or instruments (including Uniform Commercial Code termination
statements on form UCC-3) acknowledging the satisfaction and termination of this
Agreement, and will duly assign, transfer and deliver to such Assignor (without
recourse and without any representation or warranty) such of the Collateral as
may be in the possession of the Collateral Agent and as has not theretofore been
sold or otherwise applied or released pursuant to this Agreement. As used in
this Agreement, "Termination Date" shall mean the date upon which the Total
Commitment and all Interest Rate Protection Agreements or Other Hedging
Agreements have been terminated, no Note or Letter of Credit is outstanding (and
all Loans have been repaid in full), and all Obligations then owing have been
paid in full.
(b) In the event that any part of the Collateral is sold in
connection with a sale permitted by Section 8.02 of the Credit Agreement or
otherwise released at the direction of the Required Secured Creditors and the
proceeds of such sale or sales or from such release are applied in accordance
with the provisions of the Credit Agreement, to the extent required to be so
applied, such Collateral will be sold free and clear of the Liens created by
this Agreement and the Collateral Agent, at the request and expense of the
relevant Assignor, will duly assign, transfer and deliver to such Assignor
(without recourse and without any representation or warranty) such of the
Collateral as is then being (or has been) so sold or released and as may be in
the possession of the Collateral Agent and has not theretofore been released
pursuant to this Agreement.
(c) At any time that an Assignor desires that the Collateral
Agent take any action to acknowledge or give effect to any release of Collateral
pursuant to the foregoing Section 9.8(a) or (b), it shall deliver to the
Collateral Agent a certificate signed by an Authorized Officer of such Assignor
stating that the release of the respective Collateral is permitted pursuant to
said Section 9.8(a) or (b). The Collateral Agent shall have no liability
whatsoever to any Secured Creditor as the result of any release of Collateral by
it as permitted by this Section 9.8.
9.9. Counterparts. This Agreement may be executed in any
number of counterparts and by the different parties hereto on separate
counterparts, each of which when so executed and delivered shall be an original,
but all of which shall together constitute one and the same instrument. A set of
counterparts executed by all the parties hereto shall be lodged with each
Assignor and the Collateral Agent.
9.10. Additional Assignors. It is understood and agreed that
any Subsidiary of the Borrower that is required to execute a counterpart of this
Exhibit G
Page 27
Agreement pursuant to the Secured Debt Agreements shall automatically become an
Assignor hereunder by executing a counterpart hereof and delivering the same to
the Collateral Agent.
9.11. Interest Rate Protection Agreements and Other Hedging
Agreements. Notwithstanding anything to the contrary contained in this
Agreement, no Interest Rate Protection Agreement or Other Hedging Agreement
shall be entitled to the benefits of this Agreement unless such Interest Rate
Protection Agreement or Other Hedging Agreement is reasonably related to the
Loans or the Letters of Credit or such Interest Rate Protection Agreement or
Other Hedging Agreement provides that it is to be entitled to the benefits of
this Agreement or the Security Documents generally.
Exhibit G
Page 28
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be executed and delivered by their duly authorized officers as of
the date first above written.
Address: ELDERTRUST, as an Assignor
415 McFarlan Road By:______________________________
Suite 202 Name:
Kennett Square Title:
Pennsylvania 19348
Address: ELDERTRUST OPERATING LIMITED
PARTNERSHIP, as an Assignor
415 McFarlan Road By: ElderTrust, general partner
Suite 202
Kennett Square By:______________________________
Pennsylvania 19348 Name:
Title:
Address: ET GENPAR, L.L.C.
415 McFarlan Road By: ElderTrust Operating Limited Partnership,
Suite 202 sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit G
Page 29
Address: ET SUB-HERITAGE WOODS, L.L.C., as an
Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-PLEASANT VIEW, L.L.C., as an
Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-RITTENHOUSE LIMITED
PARTNERSHIP, L.L.P., as an Assignor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit G
Page 30
Address: ET SUB-LOPATCONG, L.L.C., as an Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-WAYNE I LIMITED PARTNERSHIP,
L.L.P., as an Assignor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-PENNSBURG MANOR LIMITED
PARTNERSHIP, L.L.P., as an Assignor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit G
Page 31
Address: ET SUB-POB I LIMITED PARTNERSHIP,
L.L.P., as an Assignor
415 McFarlan Road By: ET GENPAR, L.L.C., general partner
Suite 202
Kennett Square By: ElderTrust Operating Limited
Pennsylvania 19348 Partnership, sole member
By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-SMOB, L.L.C., as an Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Address: ET SUB-WINDSOR I, L.L.C., as an
Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title:
Exhibit G
Page 32
Address: ET SUB-WINDSOR II, L.L.C., as an
Assignor
415 McFarlan Road By: ElderTrust Operating Limited
Suite 202 Partnership, sole member
Kennett Square
Pennsylvania 19348 By: ElderTrust, general partner
By:______________________
Name:
Title
Address: GERMAN AMERICAN CAPITAL CORPORATION,
as Collateral Agent
31 West 52nd Street By:______________________
New York, New York 10019 Name:
Title
By:______________________
Name:
Title
Annex A
TO SECURITY AGREEMENT
SCHEDULE OF CHIEF EXECUTIVE OFFICES
AND OTHER RECORD LOCATIONS
All Assignors
1. Chief Executive Office - 415 McFarlan Road
Suite 2002
Kennett Square, Pennsylvania 19348
2. Other Record Locations - See locations for such Assignor set forth on
Annex B
Annex B
TO SECURITY AGREEMENT
SCHEDULE OF INVENTORY AND EQUIPMENT LOCATIONS
Assignor Location
-------- --------
ANNEX C
TO SECURITY AGREEMENT
PLEDGED ACCOUNTS
Assignor Location
-------- --------
ANNEX D
TO SECURITY AGREEMENT
TRADE AND FICTITIOUS NAMES
Assignor Trade/Fictitious Name
-------- ---------------------
1. ElderTrust ElderTrust REIT Co.
TABLE OF CONTENTS
Page
ARTICLE I
SECURITY INTERESTS.............................................................2
2.1. Necessary Filings................................................3
2.2. No Liens.........................................................3
2.3. Other Financing Statements.......................................3
2.4. Chief Executive Office; Records..................................4
2.5. Location of Inventory and Equipment..............................4
2.6. Pledged Accounts.................................................4
2.7. Recourse.........................................................5
2.8. Trade Names; Change of Name......................................5
ARTICLE III
SPECIAL PROVISIONS CONCERNING RECEIVABLES;
CONTRACT RIGHTS; INSTRUMENTS; CHATTEL PAPER...........................6
3.1. Additional Representations and Warranties........................6
3.2. Maintenance of Records...........................................6
3.3. Direction to Account Debtors; Contracting Parties; etc...........6
3.4. Modification of Terms; etc.......................................7
3.5. Collection.......................................................7
3.7. Assignors Remain Liable Under Receivables........................7
3.8. Assignors Remain Liable Under Contracts..........................8
3.9. Further Actions..................................................8
ARTICLE IV
PROVISIONS CONCERNING ALL COLLATERAL...........................................8
4.1. Protection of Collateral Agent's Security........................8
4.2. Further Actions..................................................9
4.3. Financing Statements.............................................9
ARTICLE V
REMEDIES UPON OCCURRENCE OF EVENT OF DEFAULT...................................9
5.1. Remedies; Obtaining the Collateral Upon Default..................9
5.2. Remedies; Disposition of the Collateral............................11
5.3. Waiver of Claims...................................................11
5.5. Remedies Cumulative................................................14
5.6. Discontinuance of Proceedings......................................14
ARTICLE VI
INDEMNITY.....................................................................15
6.1. Indemnity..........................................................15
6.2. Indemnity Obligations Secured by Collateral; Survival..............16
ARTICLE VII
DEFINITIONS...................................................................16
ARTICLE VIII
THE COLLATERAL AGENT..........................................................20
8.1. Appointment........................................................20
8.2. Nature of Duties...................................................21
8.3. Lack of Reliance on the Collateral Agent...........................21
8.4. Certain Rights of the Collateral Agent.............................22
8.5. Reliance...........................................................22
8.6. Indemnification....................................................22
8.7. The Collateral Agent in its Individual Capacity....................23
8.8. Holders............................................................23
8.9. Resignation by the Collateral Agent................................23
8.10. Fees and Expenses of Collateral Agent.............................24
ARTICLE IX
MISCELLANEOUS.................................................................24
9.1. Notices............................................................24
9.2. Waiver; Amendment..................................................25
9.3. Obligations Absolute...............................................25
9.4. Successors and Assigns.............................................25
9.5. Headings Descriptive...............................................26
9.6. Governing Law......................................................26
9.7. Assignor's Duties..................................................26
9.8. Termination; Release...............................................26
9.9. Counterparts.......................................................27
9.10. Additional Assignors..............................................27
9.11. Interest Rate Protection Agreements and Other Hedging Agreements..27
ANNEX A Schedule of Chief Executive Offices/Record Locations
ANNEX B Schedule of Inventory and Equipment Locations
ANNEX C Pledged Account Banks
ANNEX D Schedule of Trade and Fictitious Names
EXHIBIT H
SUBSIDIARIES GUARANTY
GUARANTY, dated as of _______, 1998 (as amended, modified or
supplemented from time to time, this "Guaranty"), made by each of the
undersigned guarantors (each, a "Guarantor" and, together with any other entity
that becomes a party hereto pursuant to Section 23 hereof, the "Guarantors").
Except as otherwise defined herein, capitalized terms used herein and defined in
the Credit Agreement (as defined below) shall be used herein as therein defined.
W I T N E S S E T H:
WHEREAS, ElderTrust, a Maryland real estate investment trust,
ElderTrust Operating Limited Partnership, a Delaware limited partnership (the
"Borrower"), various lenders from time to time party thereto (the "Banks"), and
German American Capital Corporation, as Administrative Agent (together with any
successor administrative agent, the "Administrative Agent"), have entered into a
Credit Agreement, dated as of _______, 1998, providing for the making of Loans
to the Borrower as contemplated therein (as amended, modified or supplemented
from time to time, the "Credit Agreement") (the Banks, the Administrative Agent
and the Collateral Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or any affiliate thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, are herein called the "Creditors");
WHEREAS, each Guarantor is a direct or an indirect Subsidiary
of the Borrower;
WHEREAS, it is a condition to the making of Loans under the
Credit Agreement that each Guarantor shall have executed and delivered this
Guaranty; and
WHEREAS, each Guarantor will obtain benefits from the
incurrence of Loans by the Borrower under the Credit Agreement and the entering
into by the Borrower of the Interest Rate Protection Agreements or Other Hedging
Agreements referred to above and, accordingly, desires to execute this Guaranty
in order to satisfy the conditions described in the preceding paragraph;
NOW, THEREFORE, in consideration of the foregoing and other
benefits accruing to each Guarantor, the receipt and sufficiency of which are
hereby acknowledged, each Guarantor hereby makes the following representations
and warranties to the Creditors and hereby covenants and agrees with each
Creditor as follows:
1. Each Guarantor, jointly and severally, absolutely,
irrevocably and unconditionally guarantees: (i) to the Bank Creditors the full
and prompt payment when due (whether at the stated maturity, by acceleration or
Exhibit H
Page 2
otherwise) of (x) the principal of and interest on the Notes issued by, and the
Loans made to, the Borrower under the Credit Agreement and (y) all other
obligations (including obligations which, but for the automatic stay under
Section 362(a) of the Bankruptcy Code, would become due) and liabilities owing
by the Borrower to the Bank Creditors under the Credit Agreement and each other
Credit Document (including, without limitation, indemnities, Fees and interest
thereon), whether now existing or hereafter incurred under, arising out of or in
connection with the Credit Agreement and each such other Credit Document and the
due performance and compliance by the Borrower with all of the terms, conditions
and agreements contained in the Credit Documents (all such principal, interest,
liabilities and obligations being herein collectively called the "Credit
Agreement Obligations"); and (ii) to each Other Creditor, the full and prompt
payment when due (whether at the stated maturity, by acceleration or otherwise)
of all obligations (including obligations which, but for the automatic stay
under Section 362(a) of the Bankruptcy Code, would become due) and liabilities
owing by the Borrower under any Interest Rate Protection Agreement or Other
Hedging Agreement, whether now in existence or hereafter arising, and the due
performance and compliance by the Borrower with all of the terms, conditions and
agreements contained in the Interest Rate Protection Agreements or Other Hedging
Agreements (all such obligations and liabilities being herein collectively
called the "Other Obligations," and together with the Credit Agreement
Obligations are herein collectively called the "Guaranteed Obligations"),
provided that the maximum amount payable by each Guarantor hereunder shall at no
time exceed the Maximum Amount (as hereinafter defined) of such Guarantor. As
used herein, "Maximum Amount" of any Guarantor means an amount equal to 95% of
the amount by which (A) the present fair saleable value of such Guarantor's
assets exceeds (B) the total liabilities of such Guarantor (including the
maximum amount reasonably expected to come due in respect of contingent
liabilities, other than contingent liabilities of such Guarantor hereunder), in
each case determined on the Effective Date (or such other date on which such
Guarantor first becomes a party hereto) or on the day any demand is made under
this Guaranty, whichever date results in a higher Maximum Amount. Subject to the
proviso in the second preceding sentence, each Guarantor understands, agrees and
confirms that the Creditors may enforce this Guaranty up to the full amount of
the Guaranteed Obligations against each Guarantor without proceeding against any
other Guarantor, against the Borrower, against any security for the Guaranteed
Obligations, or under any other guaranty covering all or a portion of the
Guaranteed Obligations. The Guaranteed Obligations may exceed any Guarantor's
Maximum Amount without affecting the liability of such Guarantor hereunder.
2. Additionally, each Guarantor, jointly and severally,
absolutely, unconditionally and irrevocably, guarantees the payment of any and
all Guaranteed Obligations to the Creditors whether or not due or payable by the
Borrower upon the occurrence in respect of the Borrower of any of the events
specified in Section 9.05 of the Credit Agreement, and absolutely,
unconditionally and irrevocably, jointly and severally, promises to pay such
Guaranteed Obligations to the Creditors, or order, on demand, in lawful money of
the United States. This Guaranty shall constitute a guaranty of payment, and not
of collection.
3. The liability of each Guarantor hereunder is exclusive
and independent of any security for or other guaranty of the indebtedness of the
Borrower, whether executed by such Guarantor, any other Guarantor, any other
guarantor or any other party, and the liability of each Guarantor hereunder
Exhibit H
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shall not be affected or impaired by any circumstance or occurrence whatsoever,
including, without limitation: (a) any direction as to application of payment by
the Borrower or by any other party, (b) any other continuing or other guaranty,
undertaking or maximum liability of a guarantor or of any other party as to the
indebtedness of the Borrower, (c) any payment on or in reduction of any such
other guaranty or undertaking except to the extent that any such payment or
reduction results in the actual permanent reduction of the Guaranteed
Obligations, (d) any dissolution, termination or increase, decrease or change in
personnel by the Borrower, (e) any payment made to any Creditor on the
indebtedness which any Creditor repays the Borrower pursuant to court order in
any bankruptcy, reorganization, arrangement, moratorium or other debtor relief
proceeding, and each Guarantor waives any right to the deferral or modification
of its obligations hereunder by reason of any such proceeding, (f) any action or
inaction by the Creditors as contemplated in Section 6 hereof, or (g) any
invalidity, irregularity or unenforceability of all or part of the Guaranteed
Obligations or of any security therefor.
4. The obligations of each Guarantor hereunder are independent
of the obligations of any other Guarantor, any other guarantor or the Borrower,
and a separate action or actions may be brought and prosecuted against each
Guarantor whether or not action is brought against any other Guarantor, any
other guarantor or the Borrower and whether or not any other Guarantor, any
other guarantor or the Borrower be joined in any such action or actions. Each
Guarantor waives, to the fullest extent permitted by law, the benefit of any
statute of limitations affecting its liability hereunder or the enforcement
thereof. Any payment by the Borrower or other circumstance which operates to
toll any statute of limitations as to the Borrower shall operate to toll the
statute of limitations as to each Guarantor.
5. Each Guarantor hereby waives notice of acceptance of this
Guaranty and notice of any liability to which it may apply, and waives
promptness, diligence, presentment, demand of payment, protest, notice of
dishonor or nonpayment of any such liabilities, suit or taking of other action
by the Administrative Agent or any other Creditor against, and any other notice
to, any party liable thereon (including such Guarantor, any other guarantor or
the Borrower).
6. Any Creditor may at any time and from time to time
without the consent of, or notice to, any Guarantor, without incurring
responsibility to such Guarantor, and without impairing or releasing the
obligations of such Guarantor hereunder, upon or without any terms or conditions
and in whole or in part:
(a) change the manner, place or terms of payment of, and/or
change or extend the time of payment of, renew or alter, any of the
Guaranteed Obligations (including any increase or decrease in the rate
of interest thereon), any security therefor, or any liability incurred
directly or indirectly in respect thereof, and the guaranty herein made
shall apply to the Guaranteed Obligations as so changed, extended,
renewed or altered;
(b) take and hold security for the payment of the Guaranteed
Obligations and sell, exchange, release, surrender, impair, realize
upon or otherwise deal with in any manner and in any order any property
by whomsoever at any time pledged or mortgaged to secure, or howsoever
securing, the Guaranteed Obligations or any liabilities (including any
Exhibit H
Page 4
of those hereunder) incurred directly or indirectly in respect thereof
or hereof, and/or any offset thereagainst;
(c) exercise or refrain from exercising any rights against the
Borrower, any other Credit Party or otherwise act or refrain from
acting;
(d) release or substitute any one or more endorsers,
Guarantors, other guarantors, the Borrower or other obligors;
(e) settle or compromise any of the Guaranteed Obligations,
any security therefor or any liability (including any of those
hereunder) incurred directly or indirectly in respect thereof or
hereof, and may subordinate the payment of all or any part thereof to
the payment of any liability (whether due or not) of the Borrower to
creditors of the Borrower other than the Creditors provided that the
Creditors will not, without the prior written consent of the respective
Guarantor, contractually subordinate the payment of all or any part of
the Guaranteed Obligations to any other creditor or creditors of the
Borrower, provided further that if any consent required by the
immediately preceding proviso is not obtained and contractual
subordination as described therein is agreed to, then (x) any part of
the Guaranteed Obligations not so subordinated will continue to be
entitled to the full benefits of this Guaranty and (y) with respect to
any part of the Guaranteed Obligations so contractually subordinated,
such Guarantor will be relieved of its obligations hereunder only to
the extent it establishes that it has been actually damaged by such
contractual subordination;
(f) apply any sums by whomsoever paid or howsoever realized to
any liability or liabilities of the Borrower to the Creditors
regardless of what liabilities of the Borrower remain unpaid;
(g) consent to or waive any breach of, or any act, omission or
default under, any of the Interest Rate Protection Agreements or Other
Hedging Agreements, the Credit Documents or any of the instruments or
agreements referred to therein, or otherwise amend, modify or
supplement any Interest Rate Protection Agreements or Other Hedging
Agreements, the Credit Documents or any of such other instruments or
agreements;
(h) act or fail to act in any manner referred to in this
Guaranty which may deprive such Guarantor of its right to subrogation
against the Borrower to recover full indemnity for any payments made
pursuant to this Guaranty; and/or
(i) take any other action which would, under otherwise
applicable principles of common law, give rise to a legal or equitable
discharge of such Guarantor from it liabilities under this Guaranty.
7. No invalidity, irregularity or unenforceability of all or
any part of the Guaranteed Obligations or of any security therefor shall affect,
impair or be a defense to this Guaranty, and this Guaranty shall be primary,
absolute, irrevocable and unconditional notwithstanding the occurrence of any
Exhibit H
Page 5
event or the existence of any other circumstances which might constitute a legal
or equitable discharge of a surety or guarantor except payment in full of the
Guaranteed Obligations.
8. This Guaranty is a continuing one and all liabilities to
which it applies or may apply under the terms hereof shall be conclusively
presumed to have been created in reliance hereon. No failure or delay on the
part of any Creditor in exercising any right, power or privilege hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
right, power or privilege hereunder preclude any other or further exercise
thereof or the exercise of any other right, power or privilege. The rights and
remedies herein expressly specified are cumulative and not exclusive of any
rights or remedies which any Creditor would otherwise have. No notice to or
demand on any Guarantor in any case shall entitle such Guarantor to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of any Creditor to any other or further action in any
circumstances without notice or demand. It is not necessary for any Creditor to
inquire into the capacity or powers of the Borrower or the officers, directors,
partners or agents acting or purporting to act on its behalf, and any
indebtedness made or created in reliance upon the professed exercise of such
powers shall be guaranteed hereunder.
9. Any indebtedness of the Borrower now or hereafter held by
any Guarantor is hereby subordinated to the indebtedness of the Borrower to the
Creditors; and such indebtedness of the Borrower to any Guarantor, if the
Administrative Agent, after an Event of Default has occurred, so requests at a
time when any Guaranteed Obligations are outstanding, shall be collected,
enforced and received by such Guarantor as trustee for the Creditors and be paid
over to the Creditors on account of the indebtedness of the Borrower to the
Creditors, but without affecting or impairing in any manner the liability of
such Guarantor under the other provisions of this Guaranty. Prior to the
transfer by any Guarantor of any note or negotiable instrument evidencing any
indebtedness of the Borrower to such Guarantor, such Guarantor shall mark such
note or negotiable instrument with a legend that the same is subject to this
subordination. Without limiting the generality of the foregoing, each Guarantor
hereby agrees with the Creditors that it will not exercise any right of
subrogation which it may at any time otherwise have as a result of this Guaranty
(whether contractual, under Section 509 of the Bankruptcy Code, or otherwise)
until all Guaranteed Obligations have been paid in full in cash (it being
understood that each Guarantor is not waiving any right of subrogation that it
may otherwise have but is only waiving the exercise thereof as provided above).
10. (a) Each Guarantor waives any right (except as shall be
required by applicable statute and cannot be waived) to require the Creditors
to: (i) proceed against the Borrower, any other Guarantor, any other guarantor
of the Guaranteed Obligations or any other party; (ii) proceed against or
exhaust any security held from the Borrower, any other Guarantor, any other
guarantor of the Guaranteed Obligations or any other party; or (iii) pursue any
other remedy in the Creditors' power whatsoever. Each Guarantor waives any
defense based on or arising out of any defense of the Borrower, such Guarantor,
any other Guarantor, any other guarantor of the Guaranteed Obligations or any
other party other than payment in full of the Guaranteed Obligations, including,
without limitation, any defense based on or arising out of the disability of the
Borrower, such Guarantor, any other Guarantor, any other guarantor of the
Guaranteed Obligations or any other party, or the unenforceability of the
Guaranteed Obligations or any part thereof from any cause, or the cessation from
Exhibit H
Page 6
any cause of the liability of the Borrower other than payment in full of the
Guaranteed Obligations. The Creditors may, at their election, foreclose on any
security held by the Administrative Agent, the Collateral Agent or the other
Creditors by one or more judicial or nonjudicial sales or exercise any other
right or remedy the Creditors may have against the Borrower or any other party,
or any security, without affecting or impairing in any way the liability of any
Guarantor hereunder except to the extent the Guaranteed Obligations have been
paid in full. Each Guarantor waives any defense arising out of any such election
by the Creditors, even though such election operates to impair or extinguish any
right of reimbursement or subrogation or other right or remedy of such Guarantor
against the Borrower or any other party or any security.
(b) Each Guarantor waives all presentments, demands for
performance, protests and notices, including, without limitation, notices of
nonperformance, notices of protest, notices of dishonor, notices of acceptance
of this Guaranty, and notices of the existence, creation or incurring of new or
additional indebtedness. Each Guarantor assumes all responsibility for being and
keeping itself informed of the Borrower's financial condition and assets, and of
all other circumstances bearing upon the risk of nonpayment of the Guaranteed
Obligations and the nature, scope and extent of the risks which such Guarantor
assumes and incurs hereunder, and agrees that the Creditors shall have no duty
to advise any Guarantor of information known to them regarding such
circumstances or risks.
Each Guarantor warrants and agrees that each of the waivers
set forth above is made with full knowledge of its significance and consequences
and that if any of such waivers are determined to be contrary to any applicable
law or public policy, such waivers shall be effective only to the maximum extent
permitted by law.
11. In order to induce the Bank Creditors to enter into the
Credit Agreement and to make the Loans pursuant to the Credit Agreement, and to
induce the Other Creditors to enter into the Interest Rate Protection Agreements
and Other Hedging Agreements, each Guarantor represents, warrants and covenants
that:
(a) Status. Such Guarantor (i) is a duly organized and validly
existing corporation, partnership or limited liability company, as the
case may be, in good standing (if applicable) under the laws of the
jurisdiction of its organization, (ii) has the corporate, partnership
or limited liability company power and authority, as the case may be,
to own or lease its property and assets and to transact the business in
which it is engaged and presently proposes to engage and (iii) is duly
qualified and is authorized to do business and is in good standing in
each jurisdiction where the conduct of its business requires such
qualification, except for failures to be so qualified which,
individually or in the aggregate, could not reasonably be expected to
have a material adverse effect on the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
such Guarantor.
(b) Power and Authority. Such Guarantor has the corporate,
partnership or limited liability company power and authority, as the
case may be, to execute, deliver and perform the terms and provisions
of this Guaranty and each other Credit Document to which it is a party
Exhibit H
Page 7
and has taken all necessary corporate or partnership action to
authorize the execution, delivery and performance by it of each such
Credit Document. Such Guarantor has duly executed and delivered this
Guaranty and each other Credit Document to which it is a party and each
such Credit Document constitutes the legal, valid and binding
obligation of such Guarantor enforceable in accordance with its terms,
except to the extent that the enforceability hereof and thereof may be
limited by applicable bankruptcy, insolvency, fraudulent conveyance,
reorganization, moratorium or other similar laws affecting creditors'
rights generally and by equitable principles (regardless of whether
enforcement is sought in equity or at law).
(c) No Violation. Neither the execution, delivery or
performance by such Guarantor of this Guaranty or any other Credit
Document to which it is a party, nor compliance by it with the terms
and provisions hereof and thereof (i) will contravene any applicable
provision of any law, statute, rule or regulation, or any order, writ,
injunction or decree of any court or governmental instrumentality, (ii)
will conflict or be inconsistent with or result in any breach of, any
of the terms, covenants, conditions or provisions of, or constitute a
default under, or result in the creation or imposition of (or the
obligation to create or impose) any Lien (except pursuant to the
Security Documents) upon any of the property or assets of such
Guarantor or any of its Subsidiaries pursuant to the terms of, any
indenture, mortgage, deed of trust, credit agreement or loan agreement
or any other material agreement, contract or instrument to which such
Guarantor or any of its Subsidiaries is a party or by which it or any
of its property or assets is bound or to which it may be subject or
(iii) will violate any provision of the certificate of incorporation,
certificate of partnership, partnership agreement, limited liability
company agreement or by-laws of such Guarantor or any of its
Subsidiaries.
(d) Governmental Approvals. No order, consent, approval,
license, authorization or validation of, or filing, recording or
registration with (except as have been obtained or made), or exemption
by, any governmental or public body or authority, or any subdivision
thereof, is required to authorize, or is required in connection with,
(i) the execution, delivery and performance of this Guaranty or any
other Credit Document to which such Guarantor is a party or (ii) the
legality, validity, binding effect or enforceability of this Guaranty
or any other Credit Document to which such Guarantor is a party.
(e) Litigation. There are no actions, suits or proceedings
pending or, to the best knowledge of such Guarantor, threatened (i)
with respect to this Guaranty or (ii) that could reasonably be expected
to materially and adversely affect the business, operations, property,
assets, liabilities, condition (financial or otherwise) or prospects of
such Guarantor.
12. Each Guarantor covenants and agrees that on and after
the Effective Date and until the Total Commitment and all Interest Rate
Protection Agreements and Other Hedging Agreements have terminated and when no
Note remains outstanding and all Guaranteed Obligations have been paid in full,
such Guarantor shall take, or will refrain from taking, as the case may be, all
actions that are necessary to be taken or not taken so that no violation of any
provision, covenant or agreement contained in Section 7 or 8 of the Credit
Exhibit H
Page 8
Agreement, and so that no Default or Event of Default, is caused by the actions
of such Guarantor or any of its Subsidiaries.
13. The Guarantors hereby jointly and severally agree to pay
all out-of-pocket costs and expenses of each Creditor in connection with the
enforcement of this Guaranty (including reasonable legal fees and expenses) and
the out-of-pocket costs and expenses of the Administrative Agent in connection
with any amendment, waiver or consent relating hereto (including reasonable
legal fees and expenses).
14. Neither this Guaranty nor any provision hereof may be
changed, waived, discharged or terminated except with the written consent of
each Guarantor directly affected thereby and with the written consent of the
Required Secured Creditors (as defined in the Security Agreement); provided,
that any change, waiver, modification or variance affecting the rights and
benefits of a single Class (as defined below) of Creditors (and not all
Creditors in a like or similar manner) shall require the written consent of the
Requisite Creditors (as defined below) of such Class of Creditors (it being
understood that the addition or release of any Guarantor hereunder shall not
constitute a change, waiver, discharge or termination affecting any Guarantor
other than the Guarantor so added or released). For the purpose of this Guaranty
the term "Class" shall mean each class of Creditors, i.e., whether (x) the Bank
Creditors as holders of the Credit Agreement Obligations or (y) the Other
Creditors as the holders of the Other Obligations. For the purpose of this
Guaranty, the term "Requisite Creditors" of any Class shall mean (x) with
respect to the Credit Agreement Obligations, the Required Banks and (y) with
respect to the Other Obligations, the holders of at least a majority of all
obligations outstanding from time to time under the respective Interest Rate
Protection Agreements or Other Hedging Agreements.
15. Each Guarantor acknowledges that an executed (or
conformed) copy of each of the Credit Documents has been made available to such
Guarantor and such Guarantor is familiar with the contents thereof.
16. In addition to any rights now or hereafter granted under
applicable law (including, without limitation, Section 151 of the New York
Debtor and Creditor Law) and not by way of limitation of any such rights, upon
the occurrence and during the continuance of an Event of Default (such term to
mean and include any "Event of Default" as defined in the Credit Agreement or
any payment default under any Interest Rate Protection Agreement or Other
Hedging Agreement continuing after any applicable grace period), each Creditor
is hereby authorized at any time or from time to time, without notice to any
Guarantor or to any other Person, any such notice being expressly waived, to set
off and to appropriate and apply any and all deposits (general or special) and
any other indebtedness at any time held or owing by such Creditor to or for the
credit or the account of such Guarantor, against and on account of the
obligations and liabilities of such Guarantor to such Creditor under this
Guaranty, irrespective of whether or not such Creditor shall have made any
demand hereunder and although said obligations, liabilities, deposits or claims,
or any of them, shall be contingent or unmatured.
17. All notices, requests, demands or other communications
pursuant hereto shall be deemed to have been duly given or made when delivered
to the Person to which such notice, request, demand or other communication is
Exhibit H
Page 9
required or permitted to be given or made under this Guaranty, addressed to such
party at (i) in the case of any Bank Creditor, as provided in the Credit
Agreement, (ii) in the case of any Guarantor, at its address set forth opposite
its signature below and (iii) in the case of any Other Creditor, at such address
as such Other Creditor shall have specified in writing to the Guarantors; or in
any case at such other address as any of the Persons listed above may hereafter
notify the others in writing.
18. If claim is ever made upon any Creditor for repayment or
recovery of any amount or amounts received in payment or on account of any of
the Guaranteed Obligations and any of the aforesaid payees repays all or part of
said amount by reason of (i) any judgment, decree or order of any court or
administrative body having jurisdiction over such payee or any of its property
or (ii) any settlement or compromise of any such claim effected by such payee
with any such claimant (including the Borrower), then and in such event each
Guarantor agrees that any such judgment, decree, order, settlement or compromise
shall be binding upon such Guarantor, notwithstanding any revocation hereof or
other instrument evidencing any liability of the Borrower, and such Guarantor
shall be and remain liable to the aforesaid payees hereunder for the amount so
repaid or recovered to the same extent as if such amount had never originally
been received by any such payee.
19. (A) This Agreement shall be binding upon the successors
and assigns of each Guarantor (although no Guarantor may assign its rights and
obligations hereunder except in accordance with the provisions of the Secured
Debt Agreements) and shall inure to the benefit of and be enforceable by the
Administrative Agent and the other Secured Creditors and their respective
successors and assigns. THIS GUARANTY AND THE RIGHTS AND OBLIGATIONS OF THE
CREDITORS AND OF THE UNDERSIGNED HEREUNDER SHALL BE GOVERNED BY AND CONSTRUED IN
ACCORDANCE WITH THE LAW OF THE STATE OF NEW YORK. Any legal action or proceeding
with respect to this Guaranty or any other Credit Document to which any
Guarantor is a party may be brought in the courts of the State of New York or of
the United States of America for the Southern District of New York, and, by
execution and delivery of this Guaranty, each Guarantor hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the jurisdiction of the aforesaid courts. Each Guarantor hereby
further irrevocably waives any claim that any such courts lack jurisdiction over
such Guarantor, and agrees not to plead or claim in any legal action or
proceeding with respect to this Guaranty or any other Credit Document to which
such Guarantor is a party brought in any of the aforesaid courts that any such
court lacks jurisdiction over such Guarantor. Each Guarantor further irrevocably
consents to the service of process out of any of the aforementioned courts in
any such action or proceeding by the mailing of copies thereof by registered or
certified mail, postage prepaid, to each Guarantor at its address set forth
opposite its signature below, such service to become effective 30 days after
such mailing. Each Guarantor hereby irrevocably waives any objection to such
service of process and further irrevocably waives and agrees not to plead or
claim in any action or proceeding commenced hereunder or under any other Credit
Document to which such Guarantor is a party that service of process was in any
way invalid or ineffective. Nothing herein shall affect the right of any of the
Creditors to serve process in any other manner permitted by law or to commence
legal proceedings or otherwise proceed against each Guarantor in any other
jurisdiction.
Exhibit H
Page 10
(B) Each Guarantor hereby irrevocably waives any objection
which it may now or hereafter have to the laying of venue of any of the
aforesaid actions or proceedings arising out of or in connection with this
Guaranty or any other Credit Document to which such Guarantor is a party brought
in the courts referred to in clause (a) above and hereby further irrevocably
waives and agrees not to plead or claim in any such court that such action or
proceeding brought in any such court has been brought in an inconvenient forum.
(C) EACH GUARANTOR AND EACH CREDITOR (BY ITS ACCEPTANCE OF THE
BENEFITS OF THIS GUARANTY) HEREBY IRREVOCABLY WAIVES ALL RIGHTS TO A TRIAL BY
JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT OF OR RELATING TO
THIS GUARANTY, THE OTHER CREDIT DOCUMENTS TO WHICH SUCH GUARANTOR IS A PARTY OR
THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY.
20. In the event that all of the capital stock of one or more
Guarantors is sold or otherwise disposed of or liquidated in compliance with the
requirements of the Credit Agreement (or such sale or other disposition has been
approved in writing by the Required Secured Creditors) and the proceeds of such
sale, disposition or liquidation are applied in accordance with the provisions
of the Credit Agreement, to the extent applicable, such Guarantor shall be
released from this Guaranty and this Guaranty shall, as to each such Guarantor
or Guarantors, terminate, and have no further force or effect (it being
understood and agreed that the sale of one or more Persons that own, directly or
indirectly, all of the capital stock or partnership interests of any Guarantor
shall be deemed to be a sale of such Guarantor for the purposes of this Section
20).
21. This Guaranty may be executed in any number of
counterparts and by the different parties hereto on separate counterparts, each
of which when so executed and delivered shall be an original, but all of which
shall together constitute one and the same instrument. A set of counterparts
executed by all the parties hereto shall be lodged with the Guarantors and the
Administrative Agent.
22. All payments made by any Guarantor hereunder will be made
without setoff, counterclaim or other defense.
23. It is understood and agreed that any Subsidiary of the
Borrower that is required to execute a counterpart of this Guaranty pursuant to
the Credit Agreement shall automatically become a Guarantor hereunder by
executing a counterpart hereof and delivering the same to the Administrative
Agent.
24. Notwithstanding anything to the contrary contained in this
Guaranty, no Interest Rate Protection Agreement or Other Hedging Agreement shall
be entitled to the benefits of this Guaranty unless such Interest Rate
Protection Agreement or Other Hedging Agreement is reasonably related to the
Loans or such Interest Rate Protection Agreement or Other Hedging Agreement
provides that it is to be entitled to the benefits of this Guaranty or the
Security Documents generally.
Exhibit H
Page 11
IN WITNESS WHEREOF, each Guarantor has caused this Guaranty to
be executed and delivered as of the date first above written.
Address: ________________,as a
Guarantor
By__________________
Name:
Title:
Accepted and Agreed to:
GERMAN AMERICAN CAPITAL
CORPORATION, as Administrative Agent
By___________________
Name:
Title:
EXHIBIT I
This document is intended
to be recorded in _______
County, _________________
MORTGAGE, ASSIGNMENT OF
LEASES AND RENTS, SECURITY
AGREEMENT AND
FIXTURE FILING STATEMENT,
made by
[_______________________________________],
as Mortgagor,
to
GERMAN AMERICAN CAPITAL CORPORATION, as Collateral Agent,
as Mortgagee.
LOCATION OF PREMISES:
[ADD PROPERTY ADDRESS]
- --------------------------------------------------------------------------------
THIS DOCUMENT PREPARED BY AND
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: Barbara J. Goodman, Esq.
-1-
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: Barbara J. Goodman, Esq.
MORTGAGE, ASSIGNMENT OF LEASES
AND RENTS, SECURITY AGREEMENT AND
FIXTURE FILING STATEMENT
THIS MORTGAGE, ASSIGNMENT OF LEASES AND RENTS, SECURITY
AGREEMENT AND FIXTURE FILING STATEMENT, made as of the [____] day of [____],
1998 (as the same may be amended, restated, replaced, supplemented or otherwise
modified from time to time, this "Mortgage"), by [_________________________], a
[limited partnership organized under the laws of Delaware] ("Mortgagor"), having
its principal place of business at 415 McFarlan Road, Suite 202, Kennett Square,
Pennsylvania 19348, Attention: Edward B. Romanov, Jr., to GERMAN AMERICAN
CAPITAL CORPORATION, a corporation organized under the laws of the State of
[_____], in its capacity as Collateral Agent for the benefit of the Secured
Creditors (defined below) (together with its successors and assigns,
"Mortgagee") having its principal place of business at 31 West 52nd Street, New
York, New York 10019.
All capitalized terms used herein shall have the respective
meanings set forth in Section 1 hereof.
W I T N E S S E T H:
WHEREAS, Mortgagor is the owner of the fee simple interest
and/or a valid leasehold interest in the real property described on Exhibit A
annexed hereto and made a part hereof;
WHEREAS, ElderTrust, a Maryland real estate investment trust,
ElderTrust Operating Limited Partnership (the "Borrower"), various lenders from
time to time party thereto (the "Banks"), DEUTSCHE BANK AG, New York Branch, as
Issuing Bank and German American Capital Corporation, as Administrative Agent
(together with any successor administrative agent, the "Administrative Agent"),
have entered into a Credit Agreement, dated as of January 30, 1998, providing
for the making of Loans to the Borrower and the issuance of Letters of Credit
for the account of the Borrower, all as contemplated therein (as amended,
modified or supplemented from time to time, the "Credit Agreement") (the Banks,
the Administrative Agent and the Mortgagee are herein called the "Bank
Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or affiliates thereof (each such Bank or
affiliate, even if the respective Bank subsequently
-2-
ceases to be a Bank under the Credit Agreement for any reason, together with
such Bank's or affiliate's successors and assigns, if any, collectively, the
"Other Creditors," and together with the Bank Creditors, are herein called the
"Secured Creditors");
[WHEREAS, pursuant to a Subsidiary Guaranty, dated as of
January 30, 1998, made jointly and severally by the Mortgagor and the other
Subsidiary Guarantors for the benefit of the Secured Creditors, the Mortgagor
has guaranteed to the Secured Creditors and the Mortgagee the payment when due
of all obligations and liabilities of the Borrower under or with respect to the
Credit Documents and the Interest Rate Agreements;]
WHEREAS, it is a condition precedent to the extensions of
credit under the Credit Agreement that the Mortgagor shall have executed and
delivered to the Mortgagee this Agreement; and
WHEREAS, Mortgagor desires to execute and deliver this
Mortgage to satisfy the condition described in the preceding paragraph and to
secure the following:
To secure (A) the full and prompt payment when due (whether at
the stated maturity, by acceleration or otherwise) of the Loans in the
maximum principal amount of One Hundred Forty Million Dollars
($140,000,000), lawful money of the United States of America, to be
paid with interest in accordance with the Credit Agreement and all
obligations and liabilities (including, without limitation, the
principal of and interest on the notes issued, and loans made, under
the Credit Agreement, all reimbursement obligations and Unpaid Drawings
with respect to letters of credit issued under the Credit Agreement,
and all indemnities, fees and interest thereon or owed thereunder), (B)
performance of all of Mortgagor's other obligations under the Credit
Documents, (C) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of the Mortgagor to the Other Creditors, whether now
existing or hereafter incurred under, arising out of or in connection
with any Interest Rate Agreement and the due performance and compliance
by the Mortgagor with all the terms, conditions and agreements
contained in the Interest Rate Agreements, (D) any and all sums
advanced by the Mortgagee in order to preserve or protect the Mortgaged
Property or preserve or protect its security title and interest in the
Mortgaged Property, (E) in the event of any proceeding for the
collection or enforcement of any indebtedness, obligations or
liabilities of the Mortgagor referred to in clauses (A), (B) and (C)
above after an Event of Default shall have occurred and be continuing,
the reasonable expenses of re-taking, holding, preparing for sale or
lease, selling or otherwise disposing of or realizing on the Mortgaged
Property, or of any exercise by the Mortgagee of its rights hereunder,
together with reasonable attorneys' fees and court costs, and (F) all
amounts as to which any indemnitee has the right to reimbursement under
paragraph 33 of this Mortgage (said indebtedness, interest and all
other sums due or obligations to be performed hereunder and under the
other Credit Documents, being hereinafter referred to collectively as
the "Obligations"), Mortgagor has mortgaged, given, granted, bargained,
sold, aliened, conveyed, confirmed, pledged, assigned and hypothecated
and by these presents does mortgage, give, grant, bargain, sell, alien,
convey, confirm, pledge, assign and hypothecate unto Mortgagee the real
property described in Exhibit A attached hereto
-3-
and made a part hereof (the "Premises") and the buildings, structures,
fixtures, additions, enlargements, extensions, modifications, repairs,
replacements and improvements now or hereafter located thereon (the
"Improvements");
TOGETHER WITH: all appurtenant right, title, interest and
estate of Mortgagor now owned, or hereafter acquired, in and to the following
property, rights, interests and estates (the Premises, the Improvements and the
following property, rights, interests and estates being hereinafter collectively
referred to as the "Mortgaged Property", which Mortgaged Property constitutes a
"Property" under and as defined in the Credit Agreement):
(a) all easements, rights-of-way, strips and gores of land,
streets, ways, alleys, passages, sewer rights, water, water courses,
water rights and powers, air rights and development rights, licenses,
permits and construction and equipment warranties and all estates,
rights, titles, interests, privileges, liberties, tenements,
hereditaments and appurtenances of any nature whatsoever, in any way
belonging, relating or pertaining to the Premises and the Improvements
and the reversion and reversions, remainder and remainders, and all
land lying in the bed of any street, road or avenue, opened or
proposed, in front of or adjoining the Premises, to the center line
thereof and all the estates, rights, titles, interests, dower and
rights of dower, curtesy and rights of curtesy, property, possession,
claim and demand whatsoever, both at law and in equity, of Mortgagor
of, in and to the Premises and the Improvements and every part and
parcel thereof, with the appurtenances thereto;
(b) all machinery, equipment, fixtures (including, but not
limited to any and all partitions, dynamos, window screens and shades,
drapes, rugs and other floor coverings, awnings, motors, engines,
boilers, furnaces, pipes, plumbing, cleaning, call and sprinkler
systems, fire extinguishing apparatus and equipment, water tanks,
swimming pools, heating, ventilating, plumbing, lighting,
communications and elevator fixtures, laundry, incinerating, air
conditioning and air cooling equipment and systems, gas and electric
machinery, and equipment, disposals, dishwashers, furniture,
refrigerators and ranges, recreational equipment and facilities of all
kinds, and water, gas, electrical, storm and sanitary sewer facilities
of all kinds, and other utilities whether or not situated in easements,
together with all accessions, replacements, betterments and
substitutions for any of the foregoing) and other property of every
kind and nature whatsoever owned by Mortgagor, or in which Mortgagor
has or shall have an interest, now or hereafter located upon the
Premises and the Improvements, or appurtenant thereto, and in
connection with the present or future operation and occupancy of the
Premises and the Improvements and all building equipment, materials and
supplies of any nature whatsoever owned by Mortgagor, or in which
Mortgagor has or shall have an interest, now or hereafter located upon
the Premises and the Improvements, or appurtenant thereto, or usable in
connection with the present or future operation and occupancy of the
Premises and the Improvements (hereinafter collectively called the
"Equipment"), and the right, title and interest of Mortgagor in and to
any of the Equipment which may be subject to any security interests, as
defined in the Uniform Commercial Code, as adopted and enacted by the
state or states where any of the Mortgaged Property is located (the
"Uniform Commercial Code"), superior in lien to the lien of this
Mortgage;
-4-
(c) all awards or payments, including interest thereon, which
may heretofore or hereafter be made with respect to the Mortgaged
Property, whether from the exercise of the right of eminent domain
(including, but not limited to, any transfer made in lieu of or in
anticipation of the exercise of said right), or for a change of grade,
or for any other injury to or decrease in the value of the Mortgaged
Property;
(d) all leasehold estates, leases, licenses, concession
agreements, franchises and other occupancy agreements and other
agreements, including, without limitation, any operating lease,
demising, leasing or granting rights of possession or use, or, to the
extent of the interest therein of the Mortgagor, any sublease,
subsublease, underletting or sublicense, which now or hereafter may
affect the Mortgaged Property or any part thereof or interest therein,
and all renewals, extensions, subleases or assignments thereof,
(individually, a "Lease" and collectively, the "Leases"), and all
rents, issues, profits, royalties, receipts, revenues, accounts
receivable, security deposits and other deposits (subject to the prior
right of tenants making such deposits) and income, including fixed,
additional and percentage rents, occupancy charges, operating expense
reimbursements, reimbursements for increases in taxes, sums paid by
tenants to the Mortgagor to reimburse the Mortgagor for amounts
originally paid or to be paid by the Mortgagor or its agents or
affiliates for which such tenants were liable, as, for example, tenant
improvement costs in excess of any work letter, lease takeover costs,
moving expenses and tax and operating expense pass-throughs for which a
tenant is solely liable, marketing association dues, late charges,
tenant association dues, administrative cost reimbursements, parking,
maintenance, common area, tax, insurance, utility and service charges
and contributions, proceeds of sale of electricity, gas, heating,
air-conditioning and other utilities and services, deficiency rents and
liquidated damages and other benefits, including all property income
(the "Rents") and all proceeds from the sale or other disposition of
the Leases;
(e) all proceeds of and any unearned premiums on any insurance
policies covering the Mortgaged Property, including, without
limitation, the right to receive and apply the proceeds of any
insurance, judgments, or settlements made in lieu thereof, for damage
to the Mortgaged Property;
(f) any and all real estate tax refunds payable to Mortgagor
with respect to the Mortgaged Property, and refunds or reimbursements
payable with respect to bonds, escrow accounts, or other sums payable
in connection with the use, development, or ownership of the Mortgaged
Property;
(g) the right, in the name and on behalf of Mortgagor, to
appear in and defend any action or proceeding brought with respect to
the Mortgaged Property and to commence any action or proceeding to
protect the interest of Mortgagee in the Mortgaged Property; and
(h) all (i) general intangibles, contract rights and accounts
receivable arising from any of the foregoing, (ii) any and all
replacements and renewals of or additions and substitutions to any of
the foregoing and (iii) all proceeds of any of the foregoing.
-5-
TO HAVE AND TO HOLD the above granted and described Mortgaged
Property unto and to the use and benefit of Mortgagee, and the successors and
assigns of Mortgagee, forever and Mortgagor hereby binds itself and its
successors and assigns to warrant and forever defend the Mortgaged Property unto
Mortgagee and its successors and assigns against the claim or claims of all
persons claiming or to claim the same, or any part thereof.
PROVIDED, HOWEVER, these presents are upon the express
condition that, if Mortgagor shall well and truly pay and perform the
Obligations at the time and in the manner provided in the Credit Documents,
these presents and the estate hereby granted shall cease, terminate and be void;
AND, to protect the security of this Mortgage, Mortgagor
represents and warrants to and covenants and agrees with Mortgagee as follows:
1. Definitions and Principles of Construction. Capitalized
terms used herein without definition shall have the respective meanings ascribed
to them in the Credit Agreement. Unless the context clearly indicates a contrary
intent or unless otherwise specifically provided herein, words used in this
Mortgage may be used interchangeably in singular or plural form and the word
"Mortgagor" shall mean "each Mortgagor and any subsequent owner or owners of the
Mortgaged Property or any part thereof or any interest therein," the word
"Mortgagee" shall mean "Mortgagee and any of its successors and/or assigns," the
word "person" shall include an individual, corporation, partnership, limited
liability company, trust, unincorporated association, government, governmental
authority, and any other entity, and the words "Mortgaged Property" shall
include any portion of the Mortgaged Property and any interest therein.
"Access Laws" has the meaning provided in paragraph 32 hereof.
"Assignment of Leases" has the meaning provided in the fifth
recital hereto.
"Credit Agreement" has the meaning provided in the second
recital hereto.
"Equipment" has the meaning provided in paragraph (b) of the
seventh recital hereto.
"Impositions" means all real estate and personal property
taxes, water, sewer and vault charges and all other taxes, levies, assessments
and other similar charges, general and special, ordinary and extraordinary,
foreseen and unforeseen, of any kind or nature whatsoever, which may at any time
prior to, at or after the execution hereof be assessed, levied or imposed by, in
each case a Governmental Authority upon the Mortgaged Property or the property
income or the ownership, use, occupancy or enjoyment thereof, and any interest,
costs and penalties with respect to any of the foregoing.
"Improvements" has the meaning provided in the seventh recital
hereto.
"Leases" has the meaning provided in paragraph (d) of the
seventh recital hereto.
"Mortgage" has the meaning provided in the first paragraph
hereof.
-6-
"Mortgagee" has the meaning provided in the first paragraph
hereof.
"Mortgaged Property" has the meaning provided in the seventh
recital hereto.
"Mortgagor" has the meaning provided in the first paragraph
hereof.
"Obligations" has the meaning provided in the seventh recital
hereto.
"Other Charges" has the meaning set forth in Section 5 hereof.
"Premises" has the meaning provided in the seventh recital
hereto.
"Rents" has the meaning provided in paragraph (d) of the
seventh recital hereto.
"UCC Collateral" has the meaning provided in paragraph 27
hereof.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect in the State of [________________].
2. Payment and Performance of Obligations. Mortgagor will pay
and perform the Obligations at the time and in the manner provided in the Credit
Documents without offset or counterclaim.
3. Warranty of Title. Mortgagor represents and warrants that
it has good fee simple title and/or a valid leasehold interest in and to the
Premises and the Improvements and has the full power, authority and right to
execute, deliver and perform its obligations under this Mortgage and to
mortgage, give, grant, bargain, sell, alien, convey, confirm, encumber, pledge,
assign and hypothecate the same and that Mortgagor possesses an unencumbered fee
and/or leasehold estate in the Premises and the Improvements free and clear of
all Liens, encumbrances, defenses, offsets and charges whatsoever except for the
Permitted Encumbrances. Mortgagor shall forever warrant, defend and preserve
such title and the validity and priority of the Lien of this Mortgage and shall
forever warrant and defend the same to Mortgagee against the claims of all
persons and parties whomsoever.
4. Insurance. Mortgagor, at its sole cost and expense, is
required to obtain the insurance coverages set forth in the Credit Agreement in
respect of the Mortgaged Property in accordance with the provisions thereof.
5. Payment of Impositions, etc. Mortgagor shall pay all
Impositions now or hereafter levied or assessed or imposed against the Mortgaged
Property or any part thereof and all ground rents, maintenance charges, other
governmental impositions, and other charges, including without limitation vault
charges and license fees for the use of vaults, chutes and similar areas
adjoining the Premises, now or hereafter levied or assessed or imposed against
the Mortgaged Property or any part thereof (the "Other Charges") as same become
due and payable. Mortgagor will deliver to Mortgagee, promptly upon Mortgagee's
request, evidence satisfactory to Mortgagee that the Impositions and Other
Charges have been so paid or are not then delinquent. Mortgagor shall not suffer
and shall promptly cause to be paid and discharged any
-7-
Lien or charge whatsoever which may be or become a Lien or charge against the
Mortgaged Property (except that, after prior written notice to Mortgagee,
Mortgagor, at its own expense, may contest the amount or validity or application
in whole or in part of any of the Impositions or Other Charges), and shall
promptly pay for all utility services (including gas, electricity, steam, water,
sewer and any other services or other charges of a similar nature, whether
public or private) provided to the Mortgaged Property. Mortgagor shall furnish
to Mortgagee or its designee receipts for the payment of real estate taxes prior
to the date the same shall become delinquent. Mortgagor will pay all taxes,
charges, filing, registration and recording fees, excises and levies imposed in
connection with the recording of this Mortgage or imposed upon Mortgagee by
reason of its ownership of this Mortgage, other than income, estate,
inheritance, excess profits, franchise and doing business taxes or similar
taxes, and shall pay any and all stamp taxes and other taxes required to be paid
on the Obligations. In the event Mortgagor fails to make any such payment within
thirty (30) days after written notice thereof from Mortgagee, then Mortgagee
shall have the right, but shall not be obligated to, pay the amount due and
Mortgagor shall, on demand, reimburse Mortgagee for said amount.
6. Recourse. Section 2.7 of the Security Agreement is hereby
incorporated herein by reference as if set forth in full.
7. Casualty, Taking and Application of Proceeds. If a Casualty
Event or a Taking occurs, Mortgagor's and Mortgagee's respective rights and
obligations with respect thereto, and the provisions governing the collection
and application of Insurance Proceeds and Condemnation Proceeds received in
connection therewith contained in the Credit Agreement shall be applicable and
are hereby incorporated herein by reference as if set forth in full.
8. Assignment of Leases and Rents. (a) Mortgagor hereby
absolutely unconditionally and irrevocably transfers, assigns, conveys and sets
over unto Mortgagee all of Mortgagor's right, title and interest in and to all
current and future Leases, Rents and other property income, it being intended by
Mortgagor that this assignment constitutes a present, absolute transfer and
assignment and not an assignment for additional security only. Such assignment
to Mortgagee shall not be construed to bind Mortgagee to the performance of any
of the covenants, conditions or provisions contained in any Lease or otherwise
impose any obligation upon Mortgagee. Mortgagor agrees to execute and deliver to
Mortgagee such additional instruments, in form and substance satisfactory to
Mortgagee, as may hereafter be reasonably requested by Mortgagee to further
evidence and confirm such assignment.
(b) Subject to the terms of this paragraph 8, Mortgagee grants
to Mortgagor a revocable license to operate and manage the Mortgaged Property
and to collect the Rents and the other property income; provided, that Mortgagor
shall hold the Rents, or a portion thereof sufficient to discharge all current
sums due on the Obligations, in trust for the benefit of Mortgagee for use in
the payment of such sums.
(c) Upon the occurrence of an Event of Default, the license
granted to Mortgagor in this paragraph 8 shall automatically be revoked, and
Mortgagee shall immediately be entitled to possession of all Rents and other
property income, whether or not Mortgagee enters upon or takes control of the
Mortgaged Property. Mortgagee is hereby granted and assigned by
-8-
Mortgagor the right, at its option, upon revocation of the license granted
herein, to enter upon the Mortgaged Property in person, by agent or by
court-appointed receiver to collect the Rents and the other property income. Any
Rents and other property income collected after the revocation of the license
may be applied toward payment of the Obligations in such priority and
proportions as Mortgagee in its discretion shall deem proper.
9. Maintenance of Mortgaged Property. Mortgagor shall cause
the Mortgaged Property to be maintained in a good and safe condition and repair
(subject to the provisions of the Credit Agreement relating to Casualty Events
and Takings). The Improvements and the Equipment shall not be removed,
demolished or materially altered (except for replacement of the Equipment in the
ordinary course of business) without the consent of Mortgagee. Mortgagor shall
comply in all material respects with all laws, orders and ordinances affecting
the Mortgaged Property, or the use thereof. Mortgagor shall not undertake to
construct any new building or material Improvement on the Mortgaged Property
without Mortgagee's prior written consent. Mortgagor shall not initiate, join
in, acquiesce in, or consent to any change in any private restrictive covenant,
zoning law or other public or private restriction, limiting or defining the uses
which may be made of the Mortgaged Property or any part thereof without
Mortgagee's prior written consent. If under applicable zoning provisions the use
of all or any portion of the Mortgaged Property is or shall become a
nonconforming use, Mortgagor will not cause or permit such nonconforming use to
be discontinued or abandoned without the express written consent of Mortgagee
except as required by applicable law.
10. Operation of the Mortgaged Property. Mortgagor will obtain
and maintain all material licenses, authorizations, permits and/or approvals
necessary for the ownership, operation and management of the Mortgaged Property,
including, without limitation, all required environmental permits.
11. Transfer or Encumbrance of the Mortgaged Property. (a)
Except for transfers permitted pursuant to the Credit Agreement, Mortgagor shall
not sell, convey, alien, mortgage, encumber, pledge or otherwise transfer the
Mortgaged Property or any part thereof. A sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer within the meaning of this paragraph
11 shall be deemed to include any installment sales agreement wherein Mortgagor
agrees to sell the Mortgaged Property or any part thereof for a price to be paid
in installments or any agreement by Mortgagor leasing all or a substantial part
of the Mortgaged Property for other than actual occupancy by a space tenant
thereunder or any sale, assignment or other transfer of, or the grant of a
security interest in, Mortgagor's right, title and interest in and to any Leases
or any Rents or other property income.
(b) Mortgagee shall not be required to demonstrate any actual
impairment of its security or any increased risk of default hereunder in order
to declare the Obligations immediately due and payable upon Mortgagor's sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property in violation of this Mortgage, or any other Mortgage Loan
Document. This provision shall apply to every sale, conveyance, alienation,
mortgage, encumbrance, pledge or transfer of the Mortgaged Property that is not
a transfer permitted pursuant to the terms of the Credit Agreement, regardless
of whether voluntary
-9-
or not, or whether or not Mortgagee has consented to any previous sale,
conveyance, alienation, mortgage, encumbrance, pledge or transfer of the
Mortgaged Property.
12. Changes in Laws Regarding Taxation. If any law is enacted
or adopted or amended after the date of this Mortgage which deducts the
Obligations from the value of the Mortgaged Property for the purpose of taxation
or which imposes a tax, either directly or indirectly, on the Obligations or
Mortgagee's interest in the Mortgaged Property, Mortgagor will pay such tax,
with interest and penalties thereon, if any. In the event Mortgagee is advised
by counsel chosen by it that the payment of such tax or interest and penalties
by Mortgagor would be unlawful or taxable to Mortgagee or unenforceable or
provide the basis for a defense of usury, then in any such event, Mortgagee
shall notify Mortgagor thereof and, if Mortgagor shall not have obtained a
release of the Mortgaged Property pursuant to Section 8.02 of the Credit
Agreement within 30 days of receipt of such notice, Mortgagee shall have the
option, upon the expiration of such 30-day period to declare the Obligations
immediately due and payable.
13. No Credits on Account of the Obligations. Mortgagor will
not claim or demand or be entitled to any credit or credits on account of the
Obligations for any part of the Impositions or Other Charges assessed against
the Mortgaged Property, or any part thereof, and no deduction shall otherwise be
made or claimed from the assessed value of the Mortgaged Property, or any part
thereof, for real estate tax purposes by reason of this Mortgage or the
Obligations. In the event such claim, credit or deduction shall be required by
law, Mortgagee shall have the option, by written notice of not less than thirty
(30) days, to require that Mortgagor obtain the release of the Mortgaged
Property pursuant to Section 8.02 of the Credit Agreement prior to the
expiration of such 30-day period, and if Mortgagor does not obtain such release,
Mortgagee shall have the option, upon expiration of such 30-day period, to
declare the Obligations immediately due and payable.
14. Documentary Stamps. Mortgagor shall pay, together with
interest, fines, and penalties, if any, any documentary stamp, recording,
transfer, mortgage, intangibles or other taxes or fees whatsoever due under
applicable laws in connection with the making, execution, delivery, filing of
record, recordation, release, or discharge of this Mortgage.
15. Usury Laws. It is the intent of the Mortgagor and the
Mortgagee in the execution of this Mortgage and all other instruments evidencing
or securing the Obligations to contract in strict compliance with the relevant
usury laws. In furtherance thereof, the Mortgagor and the Mortgagee stipulate
and agree that none of the terms and provisions contained in this Mortgage shall
ever be construed to create a contract for the use, forbearance or detention of
money requiring payment of interest at a rate in excess of the maximum interest
rate permitted to be charged by relevant law.
16. Books and Records. Mortgagor shall keep books and records
of account in accordance with the applicable provisions of the Credit Agreement.
17. Performance of Other Agreements. Mortgagor shall observe
and perform each and every term to be observed or performed by Mortgagor
pursuant to the terms of any material agreement or recorded instrument affecting
or pertaining to the Mortgaged Property.
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18. Further Acts. Mortgagor will, at the expense of Mortgagor,
and without expense to Mortgagee, do, execute, acknowledge and deliver all and
every such further acts, deeds, conveyances, mortgages, assignments, notices of
assignments, transfers and assurances as Mortgagee shall, from time to time,
require, for the better assuring, conveying, assigning, transferring, and
confirming unto Mortgagee the property and rights hereby mortgaged, given,
granted, bargained, sold, aliened, conveyed, confirmed, pledged, assigned and
hypothecated or intended now or hereafter so to be, or which Mortgagor may be or
may hereafter become bound to convey or assign to Mortgagee, or for carrying out
the intention or facilitating the performance of the terms of this Mortgage or
for filing, registering or recording this Mortgage. Mortgagor, on demand, will
execute and deliver and hereby authorizes Mortgagee to execute in the name of
Mortgagor or without the signature of Mortgagor to the extent Mortgagee may
lawfully do so, one or more financing statements, chattel mortgages or other
instruments, to evidence more effectively the security interest of Mortgagee in
the Mortgaged Property. In the event that the legal description attached hereto
is inaccurate or does not fully describe all of the real property in which the
Mortgagor has an interest, Mortgagor hereby agrees to the amendment of such
legal description and the legal description contained in the corresponding title
policy so that such error is corrected, and Mortgagor shall execute and cause to
be recorded, if applicable, such documentation as may be appropriate for such
purpose. Mortgagor grants to Mortgagee an irrevocable power of attorney coupled
with an interest for the purpose of exercising and perfecting any and all rights
and remedies available to Mortgagee at law and in equity, including, without
limitation, such rights and remedies available to Mortgagee pursuant to this
paragraph 18.
19. Recording of Mortgage. Mortgagor forthwith upon the
execution and delivery of this Mortgage and thereafter, from time to time, will
cause this Mortgage, and any security instrument creating a Lien or security
interest or evidencing the Lien hereof upon the Mortgaged Property and each
instrument of further assurance to be filed, registered or recorded in such
manner and in such places as may be required by any present or future law in
order to publish notice of and fully to protect the Lien or security interest
hereof upon, and the interest of Mortgagee in, the Mortgaged Property. Mortgagor
will pay all filing, registration or recording fees, and all expenses incident
to the preparation, execution and acknowledgment of this Mortgage and the Notes,
any mortgage supplemental hereto, any security instrument with respect to the
Mortgaged Property and any instrument of further assurance, and all federal,
state, county and municipal, taxes, duties, imposts, assessments and charges
arising out of or in connection with the execution and delivery of this
Mortgage, any mortgage supplemental hereto, any security instrument with respect
to the Mortgaged Property or any instrument of further assurance, except where
prohibited by law so to do. Mortgagor shall hold harmless and indemnify
Mortgagee, its successors and assigns, against any liability incurred by reason
of the imposition of any tax on the making and recording of this Mortgage.
20. Prepayment. The Loans may only be prepaid in accordance
with the terms of the Credit Agreement and the other Credit Documents.
21. Events of Default. The Obligations shall become
immediately due and payable at the option of Mortgagee upon the occurrence of an
Event of Default (as defined in the Credit Agreement).
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22. Overdue Principal and Interest. Section 1.08 of the Credit
Agreement requires interest to be paid at a higher rate ("Overdue Rate") in
certain circumstances. This charge shall be added to the Obligations, and shall
be deemed secured by this Mortgage. This clause, however, shall not be construed
as an agreement or privilege to extend the date of the payment of the
Obligations, nor as a waiver of any other right or remedy accruing to Mortgagee
by reason of the occurrence of any Event of Default. If the Overdue Rate is
above the maximum rate permitted by applicable law, the Overdue Rate shall be
the maximum rate permitted by applicable law.
23. Right to Cure Defaults. Upon the occurrence of any Event
of Default or if Mortgagor fails to make any payment or to do any act as herein
provided, Mortgagee may, but without any obligation to do so and without notice
to or demand on Mortgagor and without releasing Mortgagor from any obligation
hereunder, make or do the same in such manner and to such extent as Mortgagee
may deem necessary to protect the security hereof. Mortgagee is authorized to
enter upon the Mortgaged Property for such purposes, or appear in, defend, or
bring any action or proceeding to protect its interest in the Mortgaged Property
or to foreclose this Mortgage or collect the Obligations, and the cost and
expense thereof (including reasonable attorneys' fees to the extent permitted by
law), with interest as provided in this paragraph 23, shall constitute a portion
of the Obligations and shall be due and payable to Mortgagee upon demand. All
such costs and expenses incurred by Mortgagee in remedying such Event of Default
or in appearing in, defending, or bringing any such action or proceeding shall
bear interest at the Overdue Rate, for the period after notice from Mortgagee
that such cost or expense was incurred to the date of payment to Mortgagee. All
such costs and expenses incurred by Mortgagee together with interest thereon
calculated at the Overdue Rate shall be deemed to constitute a portion of the
Obligations and be secured by this Mortgage and the other Credit Documents and
shall be immediately due and payable upon demand by Mortgagee therefor.
24. Prepayment After Event of Default. If following the
occurrence of any Event of Default, Mortgagor shall tender payment of an amount
sufficient to satisfy the Obligations at any time prior to a sale of the
Mortgaged Property either through foreclosure or the exercise of other remedies
available under this Mortgage, such tender by Mortgagor shall be deemed to be a
voluntary prepayment under the Credit Agreement and the Notes in the amount
tendered and Mortgagor may be obligated under the Credit Agreement to pay
additional sums to Mortgagee as the result of such voluntary prepayment.
25. Right of Entry. Mortgagee and its agents shall have the
right to enter and inspect the Mortgaged Property at all reasonable times.
26. Remedies. (a) Upon the occurrence of any Event of Default,
Mortgagee may at its election, take such action permitted at law or in equity,
without notice or demand, as it deems advisable to protect and enforce its
rights against Mortgagor and in and to the Mortgaged Property, including, but
not limited to, any one or more of the following actions, each of which may be
pursued concurrently or otherwise, at such time and in such order as Mortgagee
may determine, in its sole discretion, without impairing or otherwise affecting
the other rights and remedies of Mortgagee:
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(i) declare the entire unpaid Obligations to be immediately
due and payable;
(ii) institute proceedings for the complete foreclosure of
this Mortgage in which case the Mortgaged Property or any interest therein may
be sold for cash or upon credit in one or more parcels or in several interests
or portions and in any order or manner;
(iii) with or without entry, to the extent permitted and
pursuant to the procedures provided by applicable law, institute proceedings for
the partial foreclosure of this Mortgage for the portion of the Obligations then
due and payable, subject to the continuing Lien of this Mortgage for the balance
of the Obligations not then due;
(iv) sell for cash or upon credit the Mortgaged Property or
any part thereof and all estate, claim, demand, right, title and interest of
Mortgagor therein and rights of redemption thereof, pursuant to power of sale or
otherwise, at one or more sales, as an entirety or in parcels, at such times and
places, upon such terms and after such notice thereof as may be required or
permitted by law;
(v) institute an action, suit or proceeding in equity for the
specific performance of any covenant, condition or agreement contained herein,
in the Credit Agreement, in the Notes or in any other Credit Documents;
(vi) recover judgment on the Notes either before, during or
after any proceedings for the enforcement of this Mortgage;
(vii) as a matter of right and without notice to Mortgagor or
anyone claiming under Mortgagor, and without regard to the then value of the
Mortgaged Property or the interest of Mortgagor therein, apply to any court
having jurisdiction to appoint a receiver or receivers of the Mortgaged
Property, and Mortgagor hereby irrevocably consents to such appointment and
waives notice of any application therefor. Any such receiver or receivers shall
have all the usual powers and duties of receivers in like or similar cases and
all the powers and duties of Mortgagee in case of entry as provided in paragraph
25 and shall continue as such and exercise all such powers until the date of
confirmation of sale of the Mortgaged Property unless such receivership is
sooner terminated;
(viii) enforce Mortgagee's interest in the Leases, Rents and
other property income and enter into or upon the Mortgaged Property, either
personally or by its agents, nominees or attorneys and dispossess Mortgagor and
its agents and servants therefrom, and thereupon Mortgagee may (A) use, operate,
manage, control, insure, maintain, repair, restore and otherwise deal with all
and every part of the Mortgaged Property and conduct the business thereat; (B)
complete any construction on the Mortgaged Property in such manner and form as
Mortgagee deems advisable; (C) make alterations, additions, renewals,
replacements and improvements to or on the Mortgaged Property; (D) exercise all
rights and powers of Mortgagor with respect to the Mortgaged Property, whether
in the name of Mortgagor or otherwise, including, without limitation, the right
to make, cancel, enforce or modify Leases, obtain and evict tenants, and demand,
sue for, collect and
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receive all earnings, revenues, Rents, issues, profits and other income of the
Mortgaged Property and every part thereof; and (E) apply the receipts from the
Mortgaged Property to the payment of the Obligations, after deducting therefrom
all expenses (including reasonable attorneys' fees) incurred in connection with
the aforesaid operations and all amounts necessary to pay the taxes,
assessments, insurance and other charges in connection with the Mortgaged
Property, as well as just and reasonable compensation for the services of
Mortgagee, its counsel, agents and employees; and
(ix) pursue such other rights or remedies as may be available
under the Credit Agreement, the Notes, any of the other Credit Documents or
otherwise at law or in equity.
In the event of a sale, by foreclosure or otherwise, of less than all of the
Mortgaged Property, this Mortgage shall continue as a Lien on the remaining
portion of the Mortgaged Property.
(b) The proceeds of any sale made under or by virtue of this
paragraph, together with any other sums which then may be held by Mortgagee
under this Mortgage, whether under the provisions of this paragraph or
otherwise, shall be applied by Mortgagee to the payment of the Obligations in
such priority and proportions as Mortgagee in its discretion shall deem proper.
(c) Mortgagee may adjourn from time to time any sale to be
made under or by virtue of this Mortgage by announcement at the time and place
appointed for such sale or for such adjourned sale or sales; and, except as
otherwise provided by any applicable provision of law, Mortgagee, without
further notice or publication, may cause such sale to be made at the time and
place to which the same shall be so adjourned.
(d) Upon the completion of any sale made by Mortgagee under or
by virtue of this paragraph, Mortgagee, or an officer of any court empowered to
do so, shall execute and deliver to the accepted purchaser a good and sufficient
instrument conveying, assigning and transferring all estate, right, title and
interest in and to the property and rights sold. Mortgagee is hereby irrevocably
appointed the true and lawful attorney of Mortgagor, in its name and stead, to
make all necessary conveyances, assignments, transfers and deliveries of the
Mortgaged Property and rights so sold and for that purpose Mortgagee may execute
all necessary instruments of conveyance, assignment and transfer, and may
substitute one or more persons with like power, Mortgagor hereby ratifying and
confirming all that its said attorney or such substitute shall lawfully do by
virtue hereof. Any sale made under or by virtue of this paragraph, whether made
under the power of sale herein granted or under or by virtue of judicial
proceedings or of a judgment or decree of foreclosure and sale, shall operate to
divest all the estate, right, title, interest, claim and demand whatsoever,
whether at law or in equity, of Mortgagor in and to the property and rights so
sold, and shall be a perpetual bar both at law and in equity against Mortgagor
and against any and all persons claiming or who may claim the same, or any part
thereof from, through or under Mortgagor.
(e) Upon any sale made under or by virtue of this paragraph,
whether made under the power of sale herein granted or under or by virtue of
judicial proceedings or of a judgment or decree of foreclosure and sale,
Mortgagee may bid for and acquire the Mortgaged
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Property or any part thereof and in lieu of paying cash therefor may make
settlement for the purchase price by crediting upon the Obligations the net
sales price after deducting therefrom the expenses of the sale and costs of the
action and any other sums which Mortgagee is authorized to deduct under this
Mortgage.
(f) No recovery of any judgment by Mortgagee and no levy of an
execution under any judgment upon the Mortgaged Property or upon any other
property of Mortgagor shall affect in any manner or to any extent the Lien of
this Mortgage upon the Mortgaged Property or any part thereof, or any Liens,
rights, powers or remedies of Mortgagee hereunder, but such Liens, rights,
powers and remedies of Mortgagee shall continue unimpaired as before.
27. Security Agreement and Fixture Filing. (a) This Mortgage
is both a real property mortgage and a "security agreement" within the meaning
of the Uniform Commercial Code. The Mortgaged Property includes both real and
personal property and all other rights and interests, whether tangible or
intangible in nature, of Mortgagor in the Mortgaged Property. Mortgagor by
executing and delivering this Mortgage has granted and hereby grants to
Mortgagee, as security for the Obligations, a security interest in the Mortgaged
Property to the full extent that the Mortgaged Property may be subject to the
Uniform Commercial Code (said portion of the Mortgaged Property so subject to
the Uniform Commercial Code being called in this paragraph 27 the "UCC
Collateral"). If an Event of Default shall occur, Mortgagee, in addition to any
other rights and remedies which it may have, shall have and may exercise
immediately and without demand, any and all rights and remedies granted to a
secured party upon default under the Uniform Commercial Code, including, without
limiting the generality of the foregoing, the right to take possession of the
UCC Collateral or any part thereof, and to take such other measures as Mortgagee
may deem necessary for the care, protection and preservation of the UCC
Collateral. Upon request or demand of Mortgagee, Mortgagor shall at its expense
assemble the UCC Collateral and make it available to Mortgagee at a convenient
place acceptable to Mortgagee. Mortgagor shall pay to Mortgagee on demand any
and all expenses, including legal expenses and attorneys' fees, incurred or paid
by Mortgagee in protecting the interest in the UCC Collateral and in enforcing
the rights hereunder with respect to the UCC Collateral. Any notice of sale,
disposition or other intended action by Mortgagee with respect to the UCC
Collateral sent to Mortgagor in accordance with the provisions hereof at least
ten (10) days prior to such action, shall constitute commercially reasonable
notice to Mortgagor. The proceeds of any disposition of the UCC Collateral, or
any part thereof, may be applied by Mortgagee to the payment of the Obligations
in such priority and proportions as Mortgagee in its discretion shall deem
proper.
(b) Certain of the Mortgaged Property is or will become
"fixtures" (as that term is defined in the Uniform Commercial Code) on the
Premises, described or referred to in this Mortgage, and this Mortgage, upon
being filed for record in the real estate records of the city or county wherein
such fixtures are situated, shall operate also as a financing statement filed as
a fixture filing in accordance with the applicable provisions of said Uniform
Commercial Code upon such of the Mortgaged Property that is or may become
fixtures.
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(c) The principal place of business of Mortgagor and the place
where Mortgagor's books and records in respect of the Mortgaged Property are
kept is the address of Mortgagor first set forth above.
28. Actions and Proceedings. Mortgagee has the right to appear
in and defend any action or proceeding brought with respect to the Mortgaged
Property and to bring any action or proceeding, in the name and on behalf of
Mortgagor, which Mortgagee, in its discretion, decides should be brought to
protect its interest in the Mortgaged Property. Mortgagee shall, at its option,
be subrogated to the Lien of any deed of trust, mortgage or other security
instrument discharged in whole or in part by the Obligations, and any such
subrogation rights shall constitute additional security for the payment of the
Obligations.
29. Waiver of Counterclaim. Mortgagor hereby waives the right
to assert a counterclaim, other than a mandatory or compulsory counterclaim, in
any action or proceeding brought against it by Mortgagee, and waives trial by
jury in any action or proceeding brought by either party hereto against the
other or in any counterclaim asserted by Mortgagee against Mortgagor, or in any
matters whatsoever arising out of or in any way connected with this Mortgage,
the Credit Agreement, the Notes, any of the other Credit Documents or the
Obligations.
30. Recovery of Sums Required To Be Paid. Mortgagee shall have
the right from time to time to take action to recover any sum or sums which
constitute a part of the Obligations as the same become due, without regard to
whether or not the balance of the Obligations shall be due and without prejudice
to the right of Mortgagee thereafter to bring an action of foreclosure, or any
other action, for a default or defaults by Mortgagor existing at the time such
earlier action was commenced.
31. Marshalling and Other Matters. Mortgagor hereby waives, to
the extent permitted by law, the benefit of all appraisement, valuation, stay,
extension, reinstatement and redemption laws now or hereafter in force and all
rights of marshalling in the event of any sale hereunder of the Mortgaged
Property or any part thereof or any interest therein. Further, Mortgagor hereby
expressly waives any and all rights of redemption from sale under any order or
decree of foreclosure of this Mortgage on behalf of Mortgagor, and on behalf of
each and every person acquiring any interest in or title to the Mortgaged
Property subsequent to the date of this Mortgage and on behalf of all persons to
the extent permitted by applicable law.
32. Handicapped Access. (a) Mortgagor agrees that the
Mortgaged Property shall comply to the extent applicable with the requirements
of the Americans with Disabilities Act of 1990, the Fair Housing Amendments Act
of 1988, all state and local laws and ordinances related to handicapped access,
and all rules, regulations, and orders issued pursuant thereto including,
without limitation, the Americans with Disabilities Act Accessibility Guidelines
for Buildings and Facilities (collectively "Access Laws").
(b) Notwithstanding any provisions set forth herein or in any
other document regarding Mortgagee's approval of alterations of the Mortgaged
Property, Mortgagor shall not alter the Mortgaged Property in any manner which
would increase Mortgagor's responsibilities
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for compliance with the applicable Access Laws after completion of the
alterations without the prior written approval of Mortgagee. The foregoing shall
apply to tenant improvements constructed by Mortgagor or by any of its tenants.
Mortgagee may condition any such approval upon receipt of a certificate of
Access Law compliance from an architect, engineer, or other person acceptable to
Mortgagee.
(c) Mortgagor agrees to give prompt notice to Mortgagee of the
receipt by Mortgagor of any complaints related to violation of any Access Laws
and of the commencement of any proceedings or investigations which relate to
compliance with applicable Access Laws.
33. Indemnification. Mortgagor shall protect, defend,
indemnify and save harmless Mortgagee from and against all liabilities,
obligations, claims, demands, damages, penalties, causes of action, losses,
fines, costs and expenses (including without limitation reasonable attorneys'
fees and expenses), imposed upon or incurred by or asserted against Mortgagee by
reason of (a) ownership of this Mortgage, the Mortgaged Property or any interest
therein or receipt of any Rents or other property income; (b) any accident,
injury to or death of persons or loss of or damage to property occurring in, on
or about the Mortgaged Property or any part thereof or on the adjoining
sidewalks, curbs, adjacent property or adjacent parking areas, streets or ways;
(c) any use, nonuse or condition in, on or about the Mortgaged Property or any
part thereof or on the adjoining sidewalks, curbs, adjacent property or adjacent
parking areas, streets or ways; (d) any failure on the part of Mortgagor to
perform or comply with any of the terms of this Mortgage; (e) performance of any
labor or services or the furnishing of any materials or other property in
respect of the Mortgaged Property or any part thereof; or (f) any failure of the
Mortgaged Property to comply with any Access Laws, except to the extent any of
the foregoing result from, or arise out of, Mortgagee's gross negligence or
willful misconduct. Any amounts payable to Mortgagee by reason of the
application of this paragraph 33 shall be secured by this Mortgage and shall
become immediately due and payable and shall bear interest at the Overdue Rate
from the date loss or damage is sustained by Mortgagee until paid. The
obligations and liabilities of Mortgagor under this paragraph 33 shall survive
any termination, satisfaction, assignment, entry of a judgment of foreclosure,
delivery of a deed in a non-judicial foreclosure or delivery of a deed in lieu
of foreclosure of this Mortgage.
34. Notices. Any notice, demand, statement, request or consent
made hereunder shall be in writing and shall be delivered in the manner
specified for notices in the Credit Agreement to the address, as set forth
above, of the party to whom such notice is to be given, or to such other address
as Mortgagor or Mortgagee, as the case may be, shall in like manner designate in
writing.
35. Authority. (a) Mortgagor represents and warrants that
Mortgagor (and the undersigned representative of Mortgagor, if any) has full
power, authority and right to execute, deliver and perform its obligations
pursuant to this Mortgage, and to mortgage, give, grant, bargain, sell, alien,
convey, confirm, pledge, hypothecate and assign the Mortgaged Property pursuant
to the terms hereof and to keep and observe all of the terms of this Mortgage on
Mortgagor's part to be performed.
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(b) Mortgagor represents and warrants that Mortgagor is not a
"foreign person" within the meaning of 1445(f)(3) of the Internal Revenue Code
of 1986, as amended and the related Treasury Department regulations, including
temporary regulations.
36. WAIVER OF NOTICE. MORTGAGOR SHALL NOT BE ENTITLED TO ANY
NOTICES OF ANY NATURE WHATSOEVER FROM MORTGAGEE EXCEPT WITH RESPECT TO MATTERS
FOR WHICH THIS MORTGAGE OR THE OTHER CREDIT DOCUMENTS SPECIFICALLY AND EXPRESSLY
PROVIDE FOR THE GIVING OF NOTICE BY MORTGAGEE TO MORTGAGOR AND EXCEPT WITH
RESPECT TO MATTERS FOR WHICH MORTGAGEE IS REQUIRED BY APPLICABLE LAW TO GIVE
NOTICE, AND MORTGAGOR HEREBY EXPRESSLY WAIVES THE RIGHT TO RECEIVE ANY NOTICE
FROM MORTGAGEE WITH RESPECT TO ANY MATTER FOR WHICH THIS MORTGAGE OR THE OTHER
CREDIT DOCUMENTS DOES NOT SPECIFICALLY AND EXPRESSLY PROVIDE FOR THE GIVING OF
NOTICE BY MORTGAGEE TO MORTGAGOR.
37. Sole Discretion of Mortgagee. Wherever pursuant to this
Mortgage, Mortgagee exercises any right given to it to approve or disapprove, or
any arrangement or term is to be satisfactory to Mortgagee, the decision of
Mortgagee to approve or disapprove or to decide that arrangements or terms are
satisfactory or not satisfactory shall be in the sole discretion of Mortgagee
and shall be final and conclusive, except as may be otherwise expressly and
specifically provided herein.
38. Non-Waiver. The failure of Mortgagee to insist upon strict
performance of any term hereof shall not be deemed to be a waiver of any term of
this Mortgage. Mortgagor shall not be relieved of Mortgagor's obligations
hereunder by reason of (a) the failure of Mortgagee to comply with any request
of Mortgagor to take any action to foreclose this Mortgage or otherwise enforce
any of the provisions hereof or of the Credit Agreement, the Notes or the other
Credit Documents, (b) the release, regardless of consideration, of the whole or
any part of the Mortgaged Property, or of any person liable for the Obligations
or any portion thereof, or (c) any agreement or stipulation by Mortgagee
extending the time of payment or otherwise modifying or supplementing the terms
of the Credit Agreement, the Notes, this Mortgage or the other Credit Documents.
Mortgagee may resort for the payment of the Obligations to any other security
held by Mortgagee in such order and manner as Mortgagee, in its discretion, may
elect. Mortgagee may take action to recover the Obligations, or any portion
thereof, or to enforce any covenant hereof without prejudice to the right of
Mortgagee thereafter to foreclose this Mortgage or to pursue other remedies
available in the other Credit Documents or at law or in equity. The rights and
remedies of Mortgagee under this Mortgage shall be separate, distinct and
cumulative and none shall be given effect to the exclusion of the others. No act
of Mortgagee shall be construed as an election to proceed under any one
provision herein to the exclusion of any other provision. Mortgagee shall not be
limited exclusively to the rights and remedies herein stated but shall be
entitled to every right and remedy now or hereafter afforded in the other Credit
Documents or at law or in equity.
39. No Oral Change. This Mortgage, and any provisions hereof,
may not be modified, amended, waived, extended, changed, discharged or
terminated orally or by any act or
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failure to act on the part of Mortgagor or Mortgagee, but only by an agreement
in writing signed by the party against whom enforcement of any modification,
amendment, waiver, extension, change, discharge or termination is sought.
40. Headings, etc. The headings and captions of various
paragraphs of this Mortgage and the Table of Contents contained herein are for
convenience of reference only and are not to be construed as defining or
limiting, in any way, the scope or intent of the provisions hereof.
41. Duplicate Originals. This Mortgage may be executed in any
number of duplicate originals and each such duplicate original shall be deemed
to be an original.
42. Successors and Assigns. This Mortgage applies to, inures
to the benefit of and binds the parties hereto and their respective successors
and assigns.
43. Assignments. Mortgagee shall have the right to assign or
transfer its rights under this Mortgage without limitation. Any assignee or
transferee shall be entitled to all the benefits afforded Mortgagee under this
Mortgage.
44. Governing Law; Severability. This Mortgage shall be
governed by and construed in accordance with the laws of the State of New York
including, without limitation, Section 5-1401 of the General Obligations Law,
but otherwise without regard to conflict of law principles; provided, however,
that with respect to the creation, attachment, perfection, priority and
enforcement of the Liens created by this Mortgage, this Mortgage shall be
governed by and construed in accordance with the laws of the State of
[________]. In the event that any provision or clause of this Mortgage conflicts
with Applicable Laws, such conflicts shall not affect other provisions of this
Mortgage which can be given effect without the conflicting provision, and to
this end the provisions of this Mortgage are declared to be severable.
45. Priority of this Mortgage. The parties hereto intend that
this Mortgage create a first priority, perfected Lien upon and security interest
in the Premises and all other portions of the Mortgaged Property for so long as
any of the Obligations remain outstanding, subject only to Permitted
Encumbrances. Therefore, notwithstanding the relative priority of recordation of
this Mortgage and any other instrument of record with respect to the Mortgaged
Property or any portion thereof, the Liens and security interests created hereby
in the Mortgaged Property are and shall be superior to the Liens and security
interests created by any such instrument, subject only to Permitted
Encumbrances.
46. Conflicts With Credit Agreement. If any term or provision
of this Mortgage shall contradict or otherwise conflict with any term or
provision of the Credit Agreement, the parties hereto agree that the term or
provision contained in the Credit Agreement shall control for so long as the
Credit Agreement remains in force in respect of Mortgagor.
47. Future Advances. In addition to all other indebtedness
secured by this Mortgage, this Mortgage shall also secure and shall constitute a
first Lien on the Mortgaged Property for all future advances made by Mortgagee
to Mortgagor for any purpose within twenty
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(20) years from the date of this Mortgage to the same extent as if such advances
were made on the date of the execution of this Mortgage. Any such advances may
be made at the option of Mortgagee. The total amount of the indebtedness,
including future advances, that is secured by this Mortgage, may increase or
decrease from time to time, but shall not exceed a maximum principal amount of
$140,000,000 at any one time, plus accrued and unpaid interest thereon and any
disbursements made by Mortgagee for the payment of taxes, levies or insurance on
all or any part of the Mortgaged Property encumbered by this Mortgage, with
accrued and unpaid interest on such disbursement. [SUBJECT TO REVISION BY LOCAL
COUNSEL]
48. Leasehold Mortgage Provisions. If Exhibit A includes a
leasehold estate, the terms and conditions set forth in Exhibit B attached
hereto are made a part hereof and are incorporated into this Mortgage by
reference.
[LOCAL LAW PROVISIONS TO BE ADDED]
-2-
IN WITNESS WHEREOF, this Mortgage has been duly executed by
Mortgagor as of the day and year first written above.
WITNESSES MORTGAGOR
[___________________________], [a Delaware
limited partnership]
As to Mortgagor, signed, By: __________________________, its
sealed and delivered in general partner
the presence of
- --------------------
Unofficial Witness By: _______________________
Name:
Title:
- --------------------
Unofficial Witness
-21-
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
This instrument was acknowledged before me this ____ day of
_______, 1998, by _________________, as _____________ of _____________________,
a ___________, as general partner of [_____________________], [a Delaware
limited partnership], on behalf of the partnership, who is personally known to
me or who has produced __________________________ as identification and who did
(did not) take an oath.
---------------------------
Name:
(Notarial Seal) Notary Public
State of New York at Large
My Commission Expires:
----------------------------
Notary Public
-22-
EXHIBIT A
Legal Description of Property
-----------------------------
Exhibit B
Leasehold Mortgage Provisions
Notwithstanding anything contained herein to the contrary, and
in addition to any rights, privileges and remedies granted to Mortgagee
elsewhere in this Mortgage, Mortgagee shall have, and Mortgagor hereby grants to
Mortgagee for the benefit of the Secured Creditors, any and all rights,
privileges and remedies of the leasehold provided for in the ground lease
described in Exhibit A (as the same may be amended, restated, replaced,
supplemented or otherwise modified from time to time, the "Ground Lease"),
including without limitation, any renewal rights and options to purchase
contained in the Ground Lease, without the necessity of particularly specifying
any or all of such rights, privileges and remedies that are or could be granted
to Ground Leasehold mortgagees pursuant to the Ground Lease.
Mortgagor hereby represents, covenants and agrees that:
(a) This Mortgage is lawfully executed and delivered in
conformity with the Ground Lease.
(b) Mortgagor will pay when due the rents, taxes and other
sums and charges mentioned in and made payable by Mortgagor under the
Ground Lease.
(c) Mortgagor will promptly, in all material respects, perform
and observe all of the terms, covenants and conditions required to be
performed and observed by it under the Ground Lease, within the periods
(including any grace or cure periods) provided therein, and will do all
things reasonably necessary to preserve and to keep unimpaired its
rights under the Ground Lease. In the event of the failure of Mortgagor
to make any payment required to be made by the lessee pursuant to the
provisions of the Ground Lease or to observe, abide by, discharge or
perform, or cause to be observed, kept, discharged or performed, any of
the terms, obligations, covenants, conditions, agreements, indemnities,
representations, warranties or liabilities of the Ground Lease on the
part of lessee thereunder to be observed, kept, discharged and
performed, Mortgagor does hereby irrevocably appoint and constitute
Mortgagee as its true and lawful attorney in fact, which appointment is
coupled with an interest, in its name, place and stead, to take any and
all actions deemed necessary or desirable by Mortgagee to perform and
comply with all of the obligations of Mortgagor under the Ground Lease,
to do and take, but without any obligation so to do, any action which
Mortgagee deems necessary or desirable to prevent or cure any default
by Mortgagor under the Ground Lease, to enter into and upon the
Mortgaged Property or any part thereof to such extent and as often as
Mortgagee, in its reasonable discretion, deems necessary or desirable
in order to prevent or cure any default of Mortgagor pursuant thereto,
to the end that the rights of Mortgagor in and to the Ground Leasehold
estate created by the Ground Lease shall be kept unimpaired and free
from default, and all sums so expended by Mortgagee, with interest
thereon at the rate set forth in the Credit Agreement from the date of
each such expenditure, shall be paid by Mortgagor to Mortgagee promptly
upon demand by Mortgagee and shall be added to the indebtedness secured
hereby and Mortgagee shall have, in addition to any other remedy of
Mortgagee, the same rights and remedies in the event of non-payment of
any such sum by Mortgagor as in the case of a default by Mortgagor in
the payment of any sums due under
Exhibit B
Page 2
the Credit Agreement. Mortgagor shall, within seven (7) days after
written request by Mortgagee, execute and deliver to Mortgagee, or to
any person designated by Mortgagee, such further instruments,
agreements, powers, assignments, conveyances or the like as may be
necessary to complete or perfect the interest, rights or powers of
Mortgagee pursuant hereto.
(d) Mortgagor will promptly (i) notify Mortgagee in writing of
the receipt by it of any notice of default from the lessor under the
Ground Lease; (ii) notify Mortgagee in writing of the receipt by it of
any notice under the Ground Lease of the termination of the Ground
Lease; (iii) cause a copy of each such notice received by Mortgagor
from the lessor under the Ground Lease to be delivered to Mortgagee;
and (iv) cause a copy of any notice of election or the exercise of any
rights of option, purchase or renewal under the Ground Lease sent by
Mortgagor to the lessor under Ground Lease, to be delivered to
Mortgagee.
(e) Subject to the terms of and as permitted under the Credit
Agreement, Mortgagor will not, without the prior written consent of
Mortgagee, terminate or surrender or suffer or permit any termination
or surrender of the Ground Lease, nor modify the Ground Lease, if the
modification shall materially impair the Mortgagee's security interest
in the Mortgaged Property or the rights and remedies of Mortgagee under
this Mortgage.
(f) Mortgagor will, within twenty (20) days after written
demand from Mortgagee, use reasonable efforts to obtain from the lessor
under the Ground Lease and deliver to Mortgagee an estoppel certificate
in the form provided for in the Ground Lease, if any.
(g) Mortgagor will furnish to Mortgagee upon demand, proof of
payment of all items which are required to be paid by Mortgagor
pursuant to the Ground Lease and a statement of any such payments which
Mortgagor is contesting or arbitrating pursuant to the terms of the
Ground Lease.
(h) Except as otherwise provided in the Ground Lease,
Mortgagor will not consent to the subordination of the Ground Lease to
any lien on the fee and/or Ground Leasehold estate of the lessor under
the Ground Lease.
(i) Subject to and as permitted under the Credit Agreement, so
long as any of the Obligations shall remain outstanding, and if an
Event of Default has occurred and is continuing, Mortgagor shall not
fail to exercise any option or right to renew or extend the term of the
Ground Lease without the prior written consent of Mortgagee. Mortgagor
shall give Mortgagee simultaneous written notice of the exercise of any
such option or right to renew or extend, together with a copy of the
instrument given to the lessor under the Ground Lease exercising such
option or right, and thereafter, shall promptly deliver to Mortgagee a
copy of any acknowledgment by such lessor with respect to the exercise
of such option or right. If any such option or right has not been
exercised as aforesaid, then, not more than three hundred sixty (360)
and not less than two hundred seventy (270) days
Exhibit B
Page 3
before the right of Mortgagor to exercise any such option or right,
Mortgagor shall give Mortgagee written notice specifying (i) the date
on which, (ii) the term for which and (iii) the manner in which such
option or renewal is to be exercised. If an Event of Default has
occurred and is continuing, within ten (10) business days of written
demand by Mortgagee, Mortgagor shall exercise any such option or
renewal (to the extent available) which is necessary to extend the term
of the Ground Lease beyond the outside maturity date set forth in the
Credit Agreement.
Exhibit B
TABLE OF CONTENTS
Page
----
1. Definitions and Principles of Construction..................................6
2. Payment and Performance of Obligations......................................7
3. Warranty of Title...........................................................7
4. Insurance...................................................................7
5. Payment of Impositions, etc.................................................7
6. Recourse....................................................................8
7. Casualty, Taking and Application of Proceeds................................8
8. Assignment of Leases and Rents..............................................8
9. Maintenance of Mortgaged Property...........................................9
10. Operation of the Mortgaged Property........................................9
11. Transfer or Encumbrance of the Mortgaged Property..........................9
12. Changes in Laws Regarding Taxation........................................10
13. No Credits on Account of the Obligations..................................10
14. Documentary Stamps........................................................10
15. Usury Laws................................................................10
16. Books and Records.........................................................10
17. Performance of Other Agreements...........................................10
18. Further Acts..............................................................11
Page
----
19. Recording of Mortgage.....................................................11
20. Prepayment................................................................11
21. Events of Default.........................................................11
22. Overdue Principal and Interest............................................12
23. Right to Cure Defaults....................................................12
24. Prepayment After Event of Default.........................................12
25. Right of Entry............................................................12
26. Remedies..................................................................12
27. Security Agreement and Fixture Filing.....................................15
28. Actions and Proceedings...................................................16
29. Waiver of Counterclaim....................................................16
30. Recovery of Sums Required To Be Paid......................................16
31. Marshalling and Other Matters.............................................16
32. Handicapped Access........................................................16
33. Indemnification...........................................................17
34. Notices...................................................................17
35. Authority.................................................................17
36. WAIVER OF NOTICE..........................................................18
37. Sole Discretion of Mortgagee..............................................18
38. NonWaiver.................................................................18
(ii)
Page
----
39. No Oral Change............................................................18
40. Headings, etc.............................................................19
41. Duplicate Originals.......................................................19
42 Successors and Assigns....................................................19
43. Assignments...............................................................19
44. Governing Law; Severability...............................................19
45. Priority of this Mortgage.................................................19
46. Conflicts With Credit Agreement...........................................19
47. Future Advances...........................................................19
48. Leasehold Mortgage Provisions.............................................20
(iii)
EXHIBIT J
OFFICER'S SOLVENCY CERTIFICATE
I, the undersigned, the Chief [Accounting]
Officer of ElderTrust, a real estate investment trust organized and existing
under the laws of the State of Maryland (the "REIT"), do hereby certify on
behalf of the REIT that:
1. This Certificate is furnished pursuant
to Section [4.14(a)] of the Credit Agreement, dated as of January 30, 1998,
among the REIT, ElderTrust Operating Limited Partnership, a Delaware limited
partnership (the "Borrower"), the lenders from time to time party thereto, and
German American Capital Corporation, as Administrative Agent (such Credit
Agreement, as in effect on the date of this Certificate, being herein called the
"Credit Agreement"). Unless otherwise defined herein, capitalized terms used in
this Certificate shall have the meanings set forth in the Credit Agreement.
2. For purposes of this Certificate, the
terms below shall have the following definitions:
(a) "Fair Value"
The amount at which the assets, in their entirety, of each of
(i) the REIT and its Subsidiaries (taken as a whole) and (ii)
the Borrower (on a stand-alone basis) would change hands
between a willing buyer and a willing seller, within a
commercially reasonable period of time, each having reasonable
knowledge of the relevant facts, with neither being under any
compulsion to act.
(b) "Present Fair Salable Value"
The amount that could be obtained by an independent willing
seller from an independent willing buyer if the assets of each
of (i) the REIT and its Subsidiaries (taken as a whole) and
(ii) the Borrower (on a stand-alone basis) are sold with
reasonable promptness under normal selling conditions in a
current market.
(c) "New Financing"
The indebtedness incurred or to be incurred by the REIT and
its Subsidiaries under the Credit Documents and all other
financing contemplated by the Credit Documents.
(d) "Stated Liabilities"
The recorded liabilities (including Contingent Liabilities
that would be recorded in accordance with GAAP consistently
applied) of the REIT, and its Subsidiaries at ___________,
1998, together with (i) the net change in long-term debt
(including current maturities) between ___________, 1998 and
the date hereof and (ii) without duplication, the amount of
all New Financing.
(e) "Contingent Liabilities"
The maximum estimated amount of liability reasonably likely to
result from pending litigation, asserted claims and
assessments, guaranties, uninsured risks and other contingent
liabilities of the REIT and its Subsidiaries (exclusive of
such Contingent Liabilities to the extent reflected in Stated
Liabilities).
(f) "Will be able to pay its Stated Liabilities, including
Contingent Liabilities, as they mature."
For the period from the date hereof through the stated
maturity of all New Financing, each of (i) the REIT and its
Subsidiaries (taken as a whole) and (ii) the Borrower (on a
stand-alone basis) will have sufficient assets and cash flow
to pay their respective Stated Liabilities and Contingent
Liabilities as those liabilities mature or otherwise become
due.
(g) "Does not have Unreasonably Small Capital"
For the period from the date hereof through the stated
maturity of all New Financing, each of (i) the REIT and its
Subsidiaries (taken as a whole) and (ii) the Borrower (on a
stand-alone basis), after consummation of all Indebtedness
(including the Loans) being incurred or assumed and Liens
created by the REIT and its Subsidiaries in connection
therewith, is a going concern and has sufficient capital to
ensure that it will continue to be a going concern for such
period and to remain a going concern despite moderately
negative deviations from the Projections discussed below.
3. For purposes of this Certificate, I, or officers of the
REIT and the Borrower under my direction and supervision, have performed the
following procedures as of and for the periods set forth below.
(a) I have reviewed the financial statements and Projections
referred to in [Sections 4.15 and 6.05] of the Credit
Agreement.
(b) I have read:
1. the Credit Documents and the respective Schedules and
Exhibits thereto.
(c) With respect to Contingent Liabilities, I:
1. inquired of certain officials of the REIT and its
Subsidiaries who have responsibility for legal, financial
and accounting matters as to the existence and estimated
liability with respect to all Contingent Liabilities known
to them;
2. confirmed with senior officers of the REIT and its
Subsidiaries that, to the best of such officers' knowledge,
(i) all appropriate items were included in Stated
Liabilities or Contingent Liabilities made known to me in
the course of my inquiry and that (ii) the amounts relating
thereto were the estimated amount of liability reasonably
likely to result therefrom as of the date hereof;
-2-
3. I hereby certify that, to the best of my knowledge, all
material Contingent Liabilities have been considered in
making the certification set forth in paragraph 4 below,
and with respect to each such Contingent Liability the
estimated amount of liability reasonably likely to result
therefrom was used in making such certification.
(a) I have made inquiries of certain officers of the REIT and its
Subsidiaries which have responsibility for financial reporting
and accounting matters regarding whether they were aware of
any events or conditions that, as of the date hereof, would
cause each of (i) the REIT and its Subsidiaries (taken as
whole) or (ii) the Borrower (on a stand-alone basis) after
giving effect to the financing transactions (including the
incurrence of the New Financing), to (x) have assets with a
Fair Value or Present Fair Salable Value that are less than
the sum of Stated Liabilities and Contingent Liabilities; (y)
have Unreasonably Small Capital; or (z) not be able to pay its
Stated Liabilities and Contingent Liabilities as they mature
or otherwise become due.
4. Based on and subject to the foregoing, I hereby certify on
behalf of the REIT that, after giving effect to the
financing transactions (including the New Financing), it is
my informed opinion that as of the date hereof (x) the Fair
Value and Present Fair Salable Value of the assets of each
of (i) the REIT and its Subsidiaries (taken as a whole) and
(ii) the Borrower (on a stand-alone basis) exceed their
respective Stated Liabilities and Contingent Liabilities;
(y) each of (i) the REIT and its Subsidiaries (taken as a
whole) and (ii) the Borrower (on a stand-alone basis) will
not have Unreasonably Small Capital; and (z) each of (i)
the REIT and its Subsidiaries (taken as a whole) and (ii)
the Borrower (on a stand-alone basis) will be able to pay
each of their respective Stated Liabilities and Contingent
Liabilities as they mature or otherwise become due.
-3-
IN WITNESS WHEREOF, the REIT has caused its duly authorized
chief accounting officer to execute and deliver this Certificate this _______
day of ___________, 1998.
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By______________________________
Name:
Title:
-4-
This document is intended EXHIBIT K
to be recorded in___________
County,_____________________
________________________________________________________________________________
ASSIGNMENT OF MORTGAGE AND PLEDGE AGREEMENT
between
[_______________________],
as Assignor and Pledgor,
and
GERMAN AMERICAN CAPITAL CORPORATION,
as Collateral Agent
Dated as of _______, 1998
________________________________________________________________________________
THIS DOCUMENT PREPARED BY AND
RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
WHITE & CASE LLP
1155 Avenue of the Americas
New York, New York 10036
Attention: Barbara J. Goodman, Esq.
TABLE OF CONTENTS
Page
----
ARTICLE I SECURITY FOR OBLIGATIONS.......................................... 2
ARTICLE II ASSIGNMENT OF COLLATERAL......................................... 4
Section 2.1. Assignment................................................... 4
Section 2.2. Power of Attorney............................................ 5
Section 2.3. Public or Private Sale....................................... 6
Section 2.4. Application of Proceeds...................................... 8
Section 2.5. Grant of Certain Rights...................................... 8
Section 2.6. Exercise of Remedies......................................... 8
ARTICLE III DELIVERY OF DOCUMENTS .......................................... 9
Section 3.1. Documents Pertaining to the Collateral....................... 9
ARTICLE IV REPRESENTATIONS AND WARRANTIES................................... 10
Section 4.1. Representations and Warranties............................... 10
ARTICLE V AFFIRMATIVE COVENANTS............................................. 11
Section 5.1. Management and Preservation of Collateral.................... 11
ARTICLE VI NEGATIVE COVENANTS............................................... 11
Section 6.1. No Amendment................................................. 12
Section 6.2. Other Liens.................................................. 12
Section 6.3. Place of Business............................................ 12
ARTICLE VII MISCELLANEOUS................................................... 14
Section 7.1. Expenses; Indemnity.......................................... 14
Section 7.2. Termination of Security Interests; Release of Collateral..... 15
Section 7.3. Amendments................................................... 15
Section 7.4. Notice....................................................... 15
Section 7.5. No Waivers................................................... 16
Section 7.6. Continuing Obligation and Assignments........................ 16
Section 7.7. Counterparts................................................. 16
Section 7.8. Governing Law................................................ 16
Section 7.9. Headings..................................................... 16
Section 7.10. Severability................................................ 16
EXHIBIT K
THIS DOCUMENT PREPARED BY
AND RECORDING REQUESTED BY
AND WHEN RECORDED MAIL TO:
WHITE & CASE LLP 1155 Avenue of the Americas
New York, New York 10036
Attention: Barbara J. Goodman, Esq.
ASSIGNMENT OF MORTAGE AND PLEDGE AGREEMENT
ASSIGNMENT OF MORTGAGE AND PLEDGE AGREEMENT, dated as of
_______, 1998 (as amended, modified or supplemented from time to time, this
"Agreement"), between [__________________], the undersigned assignor and
pledgor, a [Delaware limited partnership] (the "Pledgor") having offices at 415
McFarlan Road, Suite 202, Kennett Square, Pennsylvania 19348 and German American
Capital Corporation, as Collateral Agent (the "Collateral Agent") for the
Secured Creditors (as defined below), as assignee and pledgee, having offices at
31 West 52nd Street, New York, New York 10019. Except as otherwise defined
herein, capitalized terms used herein and not defined herein shall have the
definitions specified in the Credit Agreement.
W I T N E S S E T H :
WHEREAS, ElderTrust, a Maryland real estate investment trust
(the "REIT"), ElderTrust Operating Limited Partnership (the "Borrower"), various
lenders from time to time party thereto (the "Banks"), Deutsche Bank AG, New
York Branch, as Issuing Bank, and German American Capital Corporation, as
Administrative Agent (together with any successor administrative agent, the
"Administrative Agent"), have entered into a Credit Agreement, dated as of
January 30, 1998, providing for the making of Loans to the Borrower as
contemplated therein (as amended, modified or supplemented from time to time,
the "Credit Agreement") (the Banks, the Administrative Agent and the Collateral
Agent are herein called the "Bank Creditors");
WHEREAS, the Borrower may at any time and from time to time
enter into one or more Interest Rate Protection Agreements or Other Hedging
Agreements with one or more Banks or affiliates thereof (each such Bank or
affiliate, even if the respective Bank subsequently ceases to be a Bank under
the Credit Agreement for any reason, together with such Bank's or affiliate's
successors and assigns, if any, collectively, the "Other Creditors," and
together with the Bank Creditors, are herein called the "Secured Creditors");
WHEREAS, the Pledgor is the holder and owner of a mortgage
loan in the principal amount of $_________ (the "Mortgage Loan") encumbering the
real property more particularly described in Exhibit A annexed hereto and made a
part hereof together with the improvements thereon (the "Mortgaged Property");
EXHIBIT K
Page 4
[WHEREAS, pursuant to a Subsidiary Guaranty, dated as of
January 30, 1998, made jointly and severally by the Pledgor and the other
Subsidiary Guarantors for the benefit of the Secured Creditors, the Pledgor has
guaranteed to the Secured Creditors the payment when due of all obligations and
liabilities of the Pledgor under or with respect to the Credit Documents and the
Interest Rate Agreements;]
WHEREAS, it is a condition precedent to the extensions of
credit under the Credit Agreement that the Pledgor shall have executed and
delivered to the Collateral Agent this Agreement;
WHEREAS, the Pledgor desires to execute this Agreement to
satisfy the conditions described in the preceding paragraph; and
WHEREAS, as security for the Obligations (as defined below),
the Banks and the Collateral Agent have requested that the Pledgor grant, and
the Pledgor has agreed to grant, certain security interests in and assign and
pledge to the Collateral Agent for the benefit of the Secured Creditors (i) the
mortgage listed in Schedule A hereto (together with all amendments thereto, the
"Mortgage"), (ii) the note or notes secured by the Mortgage listed in Schedule A
hereto (together with all amendments thereto, the "Underlying Note") and (iii)
all other documents and instruments evidencing, securing or otherwise relating
to the Mortgage Loan and listed in Schedule A attached hereto, including,
without limitation, the mortgagee title insurance policy relating to the
Mortgage Loan (collectively, the "Pledged Contracts") (the Mortgage, the
Underlying Note and the Pledged Contracts, together with all proceeds and
products thereof, and of all of the rights, claims, powers, remedies and
privileges set forth in Article II hereof, are collectively referred to herein
as the "Collateral");
NOW, THEREFORE, in consideration of the benefits accruing to
the Pledgor, the receipt and sufficiency of which are hereby acknowledged, the
Pledgor hereby makes the following representations and warranties to the
Collateral Agent for the benefit of the Secured Creditors and hereby covenants
and agrees with the Collateral Agent for the benefit of the Secured Creditors as
follows:
ARTICLE I
SECURITY FOR OBLIGATIONS
This Agreement is made by the Pledgor to the Collateral Agent for the
benefit of the Secured Creditors to secure:
(i) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of the Loans in the
maximum principal amount of One Hundred Forty Million Dollars
($140,000,000), lawful money of the United States of America, to be
paid with interest in accordance with the Credit Agreement and all
obligations and liabilities (including, without limitation, the
principal of and interest on the notes issued, and loans made, under
the Credit Agreement, all reimbursement obligations and unpaid drawings
with respect to letters of credit issued under the Credit Agreement,
and all indemnities, fees and interest thereon or owed thereunder);
EXHIBIT K
Page 5
(ii) performance of all of Pledgor's other obligations under
the Credit Documents;
(iii) the full and prompt payment when due (whether at the
stated maturity, by acceleration or otherwise) of all obligations and
liabilities of the Pledgor to the Other Creditors, whether now existing
or hereafter incurred under, arising out of or in connection with any
Interest Rate Agreement and the due performance and compliance by the
Pledgor with all the terms, conditions and agreements contained in the
Interest Rate Agreements;
(iv) any and all sums advanced by the Collateral Agent in
order to preserve or protect the Collateral or preserve or protect its
security interest in the Collateral;
(v) in the event of any proceeding for the collection or
enforcement of any indebtedness, obligations or liabilities of the
Pledgor referred to in clauses (i), (ii) and (iii) above after an Event
of Default shall have occurred and be continuing, the reasonable
expenses of re-taking, holding, preparing for sale or lease, selling or
otherwise disposing of or realizing on the Collateral, or of any
exercise by the Collateral Agent of its rights hereunder, together with
reasonable attorneys' fees and court costs; and
(vi) all amounts as to which any indemnitee has the right to
reimbursement under this Agreement;
all such obligations, liabilities, sums and expenses set forth in clauses (i)
through (vi) of this Section 1 being herein collectively called the
"Obligations".
ARTICLE II
ASSIGNMENT OF COLLATERAL
Section 2.1. Assignment. (a) The Pledgor does hereby assign,
pledge, hypothecate, transfer, set over and deliver unto the Collateral Agent
for the benefit of the Secured Creditors, and does hereby grant to the
Collateral Agent for the benefit of the Secured Creditors a first priority
security interest in, to and under the Collateral, including without limitation,
the Mortgage and the Underlying Note, including the sole right (subject to
Section 2.5 hereof) to receive all moneys, additional documents or instruments
or other property at any time and from time to time payable, receivable or
otherwise distributable in respect of, in exchange for or in substitution for
the Mortgage and the Underlying Note, all rights, claims, powers, privileges and
remedies of the Pledgor whether arising by statute or at law or in equity or
otherwise consequent on the failure of the obligor under the Mortgage Loan to
perform or comply with any term of the Mortgage and the Underlying Note, as
amended, supplemented or modified, together with full and sole power and
authority, in the name of the Pledgor or otherwise, to enforce, collect, receive
and give receipt for all or any of the foregoing and all rights to exercise the
rights, powers and privileges of mortgagee under the Mortgage and payee under
the Underlying Note; and
EXHIBIT K
Page 6
(b) The Pledgor does hereby assign, pledge, hypothecate,
transfer, set over and deliver unto the Collateral Agent for the benefit of the
Secured Creditors, and does hereby grant to the Collateral Agent for the benefit
of the Secured Creditors a security interest in, all right, title and interest
of the Pledgor in, to and under the Pledged Contracts, including all moneys,
additional documents or instruments or other property at any time and from time
to time payable, receivable or otherwise distributable in respect of, in
exchange for or in substitution of its interest in, to and under the Pledged
Contracts and all rights, claims, powers, privileges and remedies of the Pledgor
whether arising by statute or at law or in equity or otherwise consequent on the
failure on the part of any party to perform or comply with any term of the
Pledged Contracts, together with full and sole power and authority, in the name
of the Pledgor or otherwise, to enforce, collect, receive and give receipt for
all or any of the foregoing.
Section 2.2. Power of Attorney. In addition to and not in
limitation of any rights, powers or remedies of the Collateral Agent pursuant to
the Mortgage or the Underlying Note, the Pledgor hereby irrevocably appoints the
Collateral Agent its true and lawful attorney, with full power of substitution,
in the name of the Pledgor, the Secured Creditors or otherwise, for the sole use
and benefit of the Secured Creditors but at the Pledgor's expense, to exercise,
upon the occurrence and during the continuance of an Event of Default, all or
any of the following powers, to the extent permitted by law, with respect to all
or any of the Collateral:
(a) to receive and retain and to sue for, collect and give
acquittance for all payments and all other distributions of any kind due or to
become due upon any and all of the Collateral;
(b) to enforce compliance with and performance of all the
terms and provisions of the Collateral, to grant waivers, extensions or
modifications thereto as the Collateral Agent may deem appropriate and to
endorse any checks or other instruments or orders in connection therewith;
(c) to settle, compromise, compound, prosecute or defend any
action or proceeding with respect to the Collateral;
(d) to sell, transfer, assign or otherwise deal in or with the
Collateral or any part thereof, or the proceeds or avails thereof, as
fully and effectively as if the Collateral Agent were the absolute
owner thereof;
EXHIBIT K
Page 7
(e) to take such action as it deems appropriate with respect
to the foreclosure, sale, assignment, delivery or other disposition of
the whole of, or from time to time any part of, the Pledgor's interest
in the Mortgaged Property which is subject to the lien of the Mortgage
or the Collateral Agent's interest in the Collateral or any part
thereof, including, without limitation, (i) sale, assignment, delivery
or other disposition, after not less than 10 Business Days prior
written notice to the Pledgor, of the whole of, or from time to time
any part of, the Pledgor's interest in the Mortgaged Property or the
Collateral Agent's interest in the Collateral at any private or public
sale, with or without demand on the Pledgor or advertisement of the
time or place of sale or adjournment thereof, or otherwise, for cash,
upon credit or for other property, for immediate or future delivery,
and for such price or prices and on such terms as the Collateral Agent
shall determine, and the Collateral Agent or any of the Secured
Creditors may bid for and purchase the whole or any part of the
Pledgor's interest in the Mortgaged Property or the Collateral Agent's
interest in the Collateral so sold free from any right or equity of
redemption of the Pledgor, and the Pledgor hereby specifically waives
all rights of redemption, stay or appraisal which it has or may have
under any rule of law or statute now existing or hereafter adopted;
(ii) adjourn any such sale or other disposition or cause the same to be
adjourned from time to time to a subsequent time and place announced at
the time and place fixed for the sale, or to cancel such transaction
notwithstanding any notice or advertisement thereof; (iii) carry out
any agreement to sell or otherwise dispose of any of the Pledgor's
interest in the Mortgaged Property or the Pledgor's or Collateral
Agent's interest in the Collateral or any part thereof in accordance
with the terms of such agreement, notwithstanding the fact that after
the Collateral Agent shall have entered into such an agreement the
Obligations may have been paid in full; provided, however, that after
the Obligations have been so paid in full, any proceeds received by the
Collateral Agent shall be paid over to the Pledgor as their interests
may appear (or as a court of competent jurisdiction may otherwise
direct); and (iv) proceed by a suit or suits at law or in equity to
foreclose and to sell or otherwise realize proceeds from the Collateral
Agent's interest in the Collateral or any part thereof, pursuant to a
judgment or decree of a court or courts of competent jurisdiction; and
(f) in addition to, and not by way of limitation of, any of
the rights specified above, to exercise any and all rights and remedies
afforded to it, as a secured party in possession of any or all of the
Collateral or otherwise, under any and all applicable provisions of law
or in equity.
Section 2.3. Public or Private Sale. (a) The Pledgor by its
execution of this Agreement, specifically agrees and consents that the
Collateral Agent shall on the happening and during the continuing of an
Event of Default immediately succeed to all interests, rights and
privileges of the mortgagee under the Underlying Note and the Mortgage
and is entitled and will be entitled on the happening and during the
continuance of any Event of Default to elect, among its other remedies
provided for herein or under applicable law, immediately (if the
Underlying Note is in default ("Underlying Default")) to accelerate the
indebtedness evidenced by the Underlying Note and to sue on the
Underlying Note or immediately to foreclose on the Mortgage in
accordance with this Agreement and the Mortgage, and that neither the
Pledgor nor any person or entity claiming through it will exercise any
rights as mortgagee under the Mortgage or payee under the Underlying
Note unless and until the Termination Date (as hereinafter defined) has
occurred, at which time all interests, rights and privileges of the
mortgagee under the Underlying Note and Mortgage will revert to and be
reassigned to the Pledgor as set forth in Section 7.2 hereof. Without
limiting the foregoing, the Pledgor expressly acknowledges its
understanding that, until such time as the Underlying Note and Mortgage
revert to the Pledgor as provided herein, the Collateral Agent shall
have the sole right to give notices of default, to accelerate the
indebtedness evidenced by the Underlying Note, to sue on the Underlying
Note and to foreclose under the Mortgage, among all of the other sole
rights and remedies of the holder of the Underlying Note and Mortgage.
EXHIBIT K
Page 8
(b) Without limiting any other provision of this Agreement,
the Collateral Agent may, upon the occurrence and during the
continuance of any Event of Default, exercise all remedies available to
the Pledgor in the case of an Underlying Default under the Collateral
including, without limitation, the right to foreclose the Mortgage.
Section 2.4. Application of Proceeds. (a) The proceeds of any
sale of, or other realization upon, all or any part of the Collateral Agent's
interest in the Collateral or the Pledgor's interest in the Mortgaged Property
shall be applied by the Collateral Agent as provided in Section 7.4 of the
Security Agreement.
(b) It is understood and agreed that the Pledgor shall remain
liable to the extent of any deficiency between the amount of the proceeds of the
Collateral and the aggregate amount of the Obligations.
Section 2.5. Grant of Certain Rights. Notwithstanding the
foregoing provisions of this Article II, so long as, but only so long as, no
Event of Default (including no Underlying Default) has occurred and is
continuing, (a) the Collateral Agent authorizes the Pledgor to, subject to the
terms of the Credit Agreement, exercise all rights in, to and under, or arising
out of any or all of the Collateral (including, but not limited to, to the right
to receive all moneys under the Mortgage and the Underlying Note) other than any
right to terminate, amend, modify, waive or supplement the Mortgage, the
Underlying Note or the Pledged Contracts or exercise any remedies under any of
the foregoing Collateral and (b) the Collateral Agent agrees that it will not
exercise the rights granted under Section 2.2 hereof and, subject to the above,
authorizes the Pledgor to exercise all such rights.
Section 2.6. Exercise of Remedies. Notwithstanding the
foregoing provisions of Sections 2.2 and 2.3 hereof, unless and until an Event
of Default has occurred and is continuing, the Collateral Agent shall not
exercise (in the case of an Underlying Default) its right to accelerate the
Underlying Note or foreclose on the Mortgaged Property or on the Collateral
under this Agreement in connection therewith or (in the case of an Underlying
Default) seek judicial appointment of a receiver for the income or revenues of
the Mortgaged Property or (in the case of an Underlying Default) sell, assign or
dispose of or, except temporarily for the sole purpose of curing a default under
the Mortgage requiring work to be performed on the Mortgaged Property, take
possession of the Mortgaged Property under the Mortgage or the Collateral under
this Agreement; provided, however, that the foregoing limitation on sale,
assignment, disposal and possession shall not limit or prevent the Collateral
Agent or the Secured Creditors from enforcing their other rights or remedies
under this Agreement or the other Credit Documents against the Mortgaged
Property (in the case of an Underlying Default) or the Collateral upon the
occurrence and during the continuance of an Event of Default in any action to
enforce or seek damages for breach of the terms and provisions of the Agreement
or the other Credit Documents, or from seeking and obtaining orders of
attachment or from levying or utilizing other remedies in connection therewith,
and, provided further, that except as specifically provided in this sentence,
the Collateral Agent may otherwise from time to time enforce all other rights
and remedies granted to the Collateral Agent pursuant to this Agreement and the
other Credit Documents and otherwise available to the Collateral Agent at law or
in equity. Upon the occurrence of any Event of Default, the Collateral Agent may
exercise all rights and remedies available to it pursuant to this Agreement and
the other Credit Documents and otherwise available to the Collateral Agent at
law or in equity.
EXHIBIT K
Page 9
ARTICLE III
DELIVERY OF DOCUMENTS
Section 3.1. Documents Pertaining to the Collateral. (a) On or
prior to the date hereof, the Pledgor shall deliver, or cause to be delivered,
to the Collateral Agent the following documents, to the extent applicable to
each item of the Collateral as determined by the Collateral Agent, each of which
shall be in form and substance satisfactory to the Collateral Agent:
(i) counterparts of this Agreement duly executed and delivered
by the Pledgor and the obligor under the Mortgage Loan, in proper form
for recording so as to effectively grant, convey and perfect the liens
and Security Interests (defined in Section 4.1 hereof), together with
such UCC financing statements as the Collateral Agent may require;
(ii) such additional assignments, instruments or other
documents of conveyance, executed in favor of the Collateral Agent, for
the benefit of the Secured Creditors, as the Collateral Agent deems
necessary or desirable to grant, convey and perfect the liens and
Security Interests, which documents shall be delivered duly executed
and in form for filing or recording, if filing or recording is
necessary or is requested by the Collateral Agent; and
(iii) the originals of the Mortgage, the Pledged Contracts and
the Underlying Note (duly endorsed in blank) (collectively, the
"Pledged Loan Documents").
(b) Promptly and from time to time following request from the
Collateral Agent, the Pledgor shall furnish or cause to be furnished to the
Collateral Agent such other documents related to the Collateral or evidencing an
interest in the Collateral pledged hereunder or intended to be so pledged as the
Collateral Agent may reasonably request (including, without limitation,
documentation of the nature referred to in subsection (a) hereof in respect of
any Collateral acquired after the date hereof) and shall do such acts and things
at its own expense as the Collateral Agent may reasonably request to perfect,
confirm or further assure the interests granted pursuant to this Agreement and
to further the purposes of this Agreement.
EXHIBIT K
Page 10
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
Section 4.1. Representations and Warranties. The Pledgor
represents and warrants as follows:
(a) The Collateral is free of any Liens other than the
Permitted Liens and the security interests (the "Security Interests")
granted hereunder in the Collateral.
(b) The Pledgor is not a party to or otherwise bound by any
agreement, other than this Agreement and the other Credit Documents,
which restricts in any manner the rights of any present or future
holder of any of the Collateral with respect thereto.
(c) Upon the execution of this Agreement and the making of the
filings and recordations contemplated by Article III hereof and the
taking possession by the Collateral Agent of the Underlying Note, the
Collateral Agent will have valid and perfected first priority security
interests in the Collateral, as to the creation of which no consent is
required from any third party other than those which have been obtained
and are in full force and effect.
(d) The Pledgor has not performed any acts which might prevent
the Collateral Agent from enforcing any of the terms and conditions of
this Agreement, the Mortgage or the Underlying Note or which would
limit the ability of the Collateral Agent to enforce any of the same.
(e) This Agreement has been duly executed and delivered by the
Pledgor and constitutes the legal, valid and binding obligation of the
Pledgor, enforceable against it in accordance with the terms hereof,
except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the
enforcement of creditors' rights generally and by general principles of
equity (regardless of whether enforcement is sought in a proceeding in
equity or at law).
(f) The Pledged Loan Documents are legal, valid and binding
obligations of the Pledgor.
(g) Schedule A contains a true, complete and correct list of
all documents evidencing and/or securing the Mortgage Loan; true,
complete and correct copies of all of such documents, together with any
amendments thereto and assignments thereof, have been delivered to the
Collateral Agent by the Pledgor; and all of such documents are in full
force and effect in accordance with their terms and no default by any
party thereto exists thereunder.
EXHIBIT K
Page 11
ARTICLE V
AFFIRMATIVE COVENANTS
Section 5.1. Management and Preservation of Collateral. The
Pledgor hereby covenants and agrees that, so long as the Security Interests
shall not have terminated in accordance with Section 7.2 hereof, the Pledgor
shall perform all agreements and obligations to be performed by it in connection
with the Collateral and defend the Collateral from the claims or demands of all
third persons (except the parties to the Pledged Contracts (in respect of such
parties rights under the Pledged Contracts) and the Collateral Agent and the
Secured Creditors) asserting any interest therein.
ARTICLE VI
NEGATIVE COVENANTS
The Pledgor hereby covenants and agrees that, so long as the
Security Interests shall not have terminated in accordance with Section 7.2
hereof:
Section 6.1. No Amendment. The Pledgor will not, without the
prior written consent of the Collateral Agent, which consent shall not be
unreasonably withheld, consent to any amendment, modification, waiver,
supplement or termination of any of the terms or provisions of the Underlying
Note, the Mortgage or the Pledged Contracts.
Section 6.2. Other Liens. The Pledgor will not create, assume
or suffer to exist any Lien on any of the Collateral except pursuant to this
Agreement and the other Credit Documents.
Section 6.3. Place of Business. The Pledgor will not change
its principal place of business without 30 days prior written notice to the
Collateral Agent.
ARTICLE VII
MISCELLANEOUS
Section 7.1. Expenses; Indemnity. (a) The Pledgor will,
promptly following written demand by the Collateral Agent, pay to the Collateral
Agent:
(a) the amount of any taxes which the Collateral Agent may
have been required to pay by reason of any assignment, recordation,
filing or perfection of the Security Interests or to free any of the
Collateral from any Lien thereon not permitted by this Agreement and
the other Credit Documents; and
EXHIBIT K
Page 12
(b) the amount of any and all out-of-pocket expenses,
including the disbursements and other charges and reasonable fees of
counsel and of any agents or other experts or professional advisors,
which the Collateral Agent may incur in connection with (i) the
administration and enforcement of this Agreement and the Collateral,
(ii) the collection, sale or other disposition of any of the
Collateral, or (iii) the exercise by the Collateral Agent of any of the
rights conferred upon it hereunder.
(c) the Pledgor agrees to indemnify, reimburse and hold the
Collateral Agent, each other Secured Creditor and their respective
successors, assigns, employees, agents and servants (hereinafter in
this 8.1(c) referred to individually as an "Indemnitee, " and
collectively as the "Indemnitees") harmless from and all liabilities,
obligations, damages, injuries, penalties, claims, demands, actions,
suits, judgments and any and all costs, expenses or disbursements
(including reasonably attorneys' fees and expenses) (for the purposes
of this Section 7.1(c) the foregoing are collectively called
"expenses") of whatsoever kind and nature imposed on, asserted against
or incurred by any of the Indemnitees in any way relating to or arising
out of this Agreement or any other document executed in connection
herewith or the enforcement of any of the terms of, or the preservation
of any rights under this Agreement or any such other documents, or in
any way relating to or arising out of the ownership, control,
acceptance, possession, condition, sale or other disposition, or use of
the Collateral; provided that no Indemnitee shall be indemnified
pursuant to this Section 7.1(c) for expenses to the extent caused by
the gross negligence or willful misconduct of such Indemnitee. The
Pledgor agrees that upon written notice by any Indemnitee of the
assertion of such a liability, obligation, damage, injury, penalty,
claim, demand, action, suit or judgment, the Pledgor shall to the
extent requested to do so assume full responsibility for the defense
thereof. Each Indemnitee agrees to promptly notify the Pledgor of any
such assertion of which such Indemnitee has knowledge. If and to the
extent that the obligations of the Pledgor under this Section 7.1(c)
are unenforceable for any reason, the Pledgor hereby agrees to make the
maximum contribution to the payment and satisfaction of such
obligations which is permissible under applicable law.
Section 7.2. Termination of Security Interests; Release of
Collateral. After the Termination Date, this Agreement shall terminate (provided
that all indemnities set forth herein including, without limitation, in Article
VII hereof shall survive any such termination) and the Collateral Agent, at the
request and expense of the Pledgor, will promptly execute and deliver to the
Pledgor such proper instrument or instruments acknowledging the satisfaction and
termination of this Agreement, and will duly assign, transfer and deliver to the
Pledgor (without recourse and without any representation or warranty) such of
the Collateral as may be in the possession of the Collateral Agent and as has
not theretofore been sold or otherwise applied or released pursuant to this
Agreement. As used in this Agreement, "Termination Date" shall mean the date
upon which the Total Commitment and all Interest Rate Protection Agreements or
Other Hedging Agreements have been terminated, no Note is outstanding (and all
Loans have been repaid in full), and all Obligations then owing have been paid
in full.
EXHIBIT K
Page 13
Section 7.3. Amendments. No amendment or waiver of any
provision of this Agreement nor consent to any departure by the Pledgor
therefrom shall in any event be effective unless the same shall be in writing
and signed by the Collateral Agent, and then such waiver or consent shall be
effective only in the specific instance and for the specific purpose for which
given.
Section 7.4. Notice. Any notice and other communication
required or permitted to be given to any Person under this Agreement shall be
given by such means and to the addresses for such Person as are specified in
Section 12.03 of the Credit Agreement.
Section 7.5. No Waivers. No failure on the part of the
Collateral Agent or the Secured Creditors to exercise, and no delay in
exercising, any right hereunder shall operate as a waiver thereof, nor shall any
single or partial exercise thereof preclude any other or further exercise
thereof or the exercise of any other right. The rights in this Agreement are
cumulative and are not exclusive of any other remedies provided by law.
Section 7.6. Continuing Obligation and Assignments. This
Agreement is a continuing obligation and shall (i) be binding upon the Pledgor
and its successors and (ii) inure to the benefit of and be enforceable by the
Secured Creditors, the Collateral Agent and their respective successors and
permitted transferees and assigns; provided, however, the Pledgor may not (by
operation of law or otherwise) sell, transfer or assign any of its rights or
delegate or transfer any of its obligations under this Agreement without the
prior written consent of the Collateral Agent.
Section 7.7. Counterparts. This Agreement may be executed by
the parties hereto in separate counterparts, each of which when so executed
shall constitute an original but all such counterparts, when taken together,
shall constitute one and the same instrument.
Section 7.8. Governing Law. This Agreement shall be governed
by and construed in accordance with the laws of the State of New York including,
without limitation, Section 5-1401 of the General Obligations Law, but otherwise
without regard to conflict of law principles; provided, however, that with
respect to the creation, attachment, perfection, priority and enforcement of the
liens created by this Agreement, this Agreement shall be governed by and
construed in accordance with the laws of the State of [________].
Section 7.9. Headings. Section headings in this Agreement are
included for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose.
Section 7.10. Severability. If any provision hereof is invalid
and unenforceable in any jurisdiction, then, to the fullest extent permitted by
law, (i) the other provisions hereof shall remain in full force and effect in
such jurisdiction and shall be construed in order to carry out the intentions of
the parties hereto, including, without limitation, Section 2.6 hereof to the
fullest extent permitted by law; and (ii) the invalidity or unenforceability of
any provision hereof in any jurisdiction shall not affect the validity or
enforceability of such provision in any other jurisdiction.
EXHIBIT K
Page 14
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their respective officers
thereunto duly authorized as of the date first written above.
[_____________________],
as Assignor and Pledgor
By ________________________, its
general partner
By________________________
Name:
Title:
ACKNOWLEDGED AND AGREED this ______ day of __________________, 199_
[Insert name of obligor under Mortgage and Underlying Note]
By__________________________
Name:
Title:
EXHIBIT K
Page 15
GERMAN AMERICAN CAPITAL
CORPORATION, as Collateral Agent
By________________________
Name:
Title:
By________________________
Name:
Title:
EXHIBIT K
Page 16
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
This instrument was acknowledged before me this ____ day of
_______, 1998, by _________________, as _____________ of _____________________,
a ___________, as general partner of [_______________], a [Delaware limited
partnership], on behalf of the partnership, who is personally known to me or who
has produced __________________________ as identification and who did (did not)
take an oath.
____________________________
Name:
(Notarial Seal) Notary Public
State of New York at Large
My Commission Expires:
____________________________
EXHIBIT K
Page 17
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
This instrument was acknowledged before me this ____ day of
_______, 1998, by _________________, as _____________ of German American Capital
Corporation, a Maryland corporation, on behalf of the corporation, who is
personally known to me or who has produced __________________________ as
identification and who did (did not) take an oath.
___________________________
Name:
(Notarial Seal) Notary Public
State of New York at Large
My Commission Expires:
___________________________
EXHIBIT K
Page 18
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
This instrument was acknowledged before me this ____ day of
_______, 1998, by _________________, as _____________ of German American Capital
Corporation, a Maryland corporation, on behalf of the corporation, who is
personally known to me or who has produced __________________________ as
identification and who did (did not) take an oath.
___________________________
Name:
(Notarial Seal) Notary Public
State of New York at Large
My Commission Expires:
___________________________
STATE OF NEW YORK )
) ss
COUNTY OF NEW YORK )
This instrument was acknowledged before me this ____ day of
_______, 1998, by _________________, as _____________ of _____________________,
a ___________, on behalf of the [________], who is personally known to me or who
has produced __________________________ as identification and who did (did not)
take an oath.
___________________________
Name:
(Notarial Seal) Notary Public
State of New York at Large
My Commission Expires:
___________________________
SCHEDULE A
Mortgage Loan Documents
EXHIBIT A
Legal Description
EXHIBIT L
BORROWING BASE CERTIFICATE
AS OF [DATE] ISSUED BY
ELDERTRUST OPERATING LIMITED PARTNERSHIP
The undersigned, the [Title] of ElderTrust Operating Limited
Partnership (the "Borrower"), hereby certifies that the figures attached on
Annex A hereto to calculate the Borrowing Base as of [Date] and for the period
ending [Date] are true and correct and have been calculated in accordance with
the Credit Agreement, dated as of January 30, 1998, among ElderTrust, the
Borrower, the lenders from time to time a party thereto, Deutsche Bank AG, New
York Branch, as Issuing Bank, and German American Capital Corporation, as
Administrative Agent (as amended from time to time, the "Credit Agreement").
Capitalized terms not otherwise defined herein shall have the meanings assigned
to such terms in the Credit Agreement.
ELDERTRUST OPERATING
LIMITED PARTNERSHIP
By: ElderTrust, its general partner
By_________________________
Name:
Title:
Date:_________, ____
Operating Statement Review
Schedule M-1
---------
PROPERTY NAME
CITY / STATE
---------
---------
# OF MONTHS
ANNUALIZED (Y/N)
---------
Month-ended YEAR-To-DATE 4 mos. ended, 7/31/97
(INSERT PERIOD ENDED) (INSERT PERIOD ENDED) (INSERT PERIOD ENDED)
--------------------- --------------------- ---------------------
--------- --------- ---------
Total Revenue --------- Total Revenue --------- Total Revenue ---------
Operating Expense --------- Operating Expense --------- Operating Expense ---------
NOI --------- NOI --------- NOI ---------
--------- --------- ---------
Management Fee --------- Management Fee --------- Management Fee ---------
CapEx --------- CapEx --------- CapEx ---------
NET CASH FLOW --------- NET CASH FLOW --------- NET CASH FLOW ---------
--------- --------- ---------
Debt Service --------- Debt Service --------- Debt Service ---------
DSCR --------- DSCR --------- DSCR ---------
LTV --------- LTV --------- LTV ---------
--------- --------- ---------
Occupancy --------- Occupancy --------- Occupancy ---------
As Of --------- As Of --------- As Of ---------
--------- --------- ---------
AVAILABLE BORROWING BASE --------- AVAILABLE BORROWING BASE --------- AVAILABLE BORROWING BASE ---------
LOAN AMOUNT OUTSTANDING --------- LOAN AMOUNT OUTSTANDING --------- LOAN AMOUNT OUTSTANDING ---------
Page 1
Schedule M-2
---------------------------------------------------------------------------------------
Current Period Year To Date Actuals Annualized
- --------------------------------------------------------------------------------------------------------
Property Name Occupancy NOI Net Cash Flow DSCR Occupancy NOI Net Cash Flow DSCR
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
TOTAL PORTFOLIO
- --------------------------------------------------------------------------------------------------------
[RESTUBED TABLE]
- --------------------------------------------------------------------------------------------------------
Prior Period Change From Prior Period
- --------------------------------------------------------------------------------------------------------
Property Name Occupancy NOI Net Cash Flow DSCR Occupancy NOI Net Cash Flow DSCR
- --------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------
TOTAL PORTFOLIO
- --------------------------------------------------------------------------------------------------------
Page 1
Exhibit N
ELDERTRUST OPERATING LIMITED PARTNERSHIP
QUARTERLY CASH FLOW REPORT
To the Administrative Agent and each of the Banks party to the Credit Agreement,
dated as of January 30, 1998, among ElderTrust, ElderTrust Operating Limited
Partnership, the lenders from time to time party thereto, Deutsche Bank AG, New
York Branch, as Issuing Bank, and German American Capital Corporation, as
Administrative Agent.
EBITDA
Operating profit $
Depreciation and amortization
Interest income
Corporate expenses
Other non-cash charges
EBITDA $
Cash interest payments
FF&E - existing properties
Capex - new units
Cash taxes
Debt maturities, net of new issuances
Debt prepayments
Dividends
Dispositions $
Acquisitions
Changes in other operating accounts
NET CASH FLOW
This Cash Flow Report is for ElderTrust, the Borrower and its
Subsidiaries on a consolidated basis for the period ending __________, is true
and correct in all material respects to the best of my knowledge.
Sincerely,
EXHIBIT O
ANNEX A
Subordination Provisions to be attached
to each Intercompany Note evidencing
a loan made by a Subsidiary Guarantor
that is not a Wholly-Owned Subsidiary
Section 1.01. Subordination of Liabilities. _________________
(the "Company"), for itself, its successors and assigns, covenants and agrees,
and each holder of the Intercompany Note to which this Annex A is attached (the
"Note") by its acceptance thereof likewise covenants and agrees, that the
payment of the principal of, interest on, and all other amounts owing in respect
of, the Note (the "Subordinated Indebtedness") is hereby expressly subordinated,
to the extent and in the manner hereinafter set forth, to the prior payment in
full in cash of all Senior Indebtedness (as defined in Section 1.07 hereof). The
provisions of this Annex A shall constitute a continuing offer to all persons
who, in reliance upon such provisions, become holders of, or continue to hold,
Senior Indebtedness, and such provisions are made for the benefit of the holders
of Senior Indebtedness, and such holders are hereby made obligees hereunder the
same as if their names were written herein as such, and they and/or each of them
may proceed to enforce such provisions.
Section 1.02. Company not to Make Payments with Respect to
Subordinated Indebtedness in Certain Circumstances. a)" \* MERGEFORMAT (a) Upon
the maturity of any Senior Indebtedness (including interest thereon or fees or
any other amounts owing in respect thereof), whether at stated maturity, by
acceleration or otherwise, all Obligations (as defined in Section 1.07 hereof)
owing in respect of such Senior Indebtedness, in each case to the extent due and
owing, shall first be paid in full in cash, before any payment of any kind or
character, whether in cash, property, securities or otherwise, is made on
account of the Subordinated Indebtedness.
(b) If any default or event of default under the Credit
Agreement (as defined in Section 1.07 hereof) is then in existence or would
result therefrom, the Company may not, directly or indirectly, make any payment
of any Subordinated Indebtedness and may not acquire any Subordinated
Indebtedness for cash or property until all Senior Indebtedness has been paid in
full in cash. Each holder of the Note hereby agrees that, so long as any such
default or event of default exists, it will not sue for, or otherwise take any
action to enforce the Company's obligations to pay, amounts owing in respect of
the Note.
(c) In the event that notwithstanding the provisions of the
preceding subsections (a) and (b) of this Section 1.02, the Company shall make
any payment on account of the Subordinated Indebtedness at a time when payment
is not permitted by said subsection (a) or (b), such payment shall be held by
the holder of the Note, in trust for the benefit of, and shall be paid forthwith
over and delivered to, the holders of Senior Indebtedness or their
representative or the trustee under the indenture or other agreement pursuant to
which any instruments evidencing
EXHIBIT O
Page 2
any Senior Indebtedness may have been issued, as their respective interests may
appear, for application pro rata to the payment of all Senior Indebtedness
remaining unpaid to the extent necessary to pay all Senior Indebtedness in full
in cash in accordance with the terms of such Senior Indebtedness, after giving
effect to any concurrent payment or distribution to or for the holders of Senior
Indebtedness. Without in any way modifying the provisions hereof or affecting
the subordination effected hereby if the hereafter referenced notice is not
given, the Company shall give the holder of the Note prompt written notice of
any event which would prevent payments under Section 1.02(a) or (b) hereof.
Section 1.03. Subordination to Prior Payment of all Senior
Indebtedness on Dissolution, Liquidation or Reorganization of Company. Upon any
distribution of assets of the Company upon dissolution, winding up, liquidation
or reorganization of the Company (whether in bankruptcy, insolvency or
receivership proceedings or upon an assignment for the benefit of creditors or
otherwise):
(a) the holders of all Senior Indebtedness shall first be
entitled to receive payment in full in cash of all Senior Indebtedness
(including, without limitation, post-petition interest at the rate
(including the default rate) provided in the documentation with respect
to the Senior Indebtedness, whether or not such post-petition interest
is an allowed claim against the debtor in any bankruptcy or similar
proceeding) before the holder of the Note is entitled to receive any
payment of any kind or character on account of the Subordinated
Indebtedness;
(b) any payment or distributions of assets of the Company of
any kind or character, whether in cash, property or securities to which
the holder of the Note would be entitled except for the provisions
hereof, shall be paid by the liquidating trustee or agent or other
person making such payment or distribution, whether a trustee in
bankruptcy, a receiver or liquidating trustee or other trustee or
agent, directly to the holders of Senior Indebtedness or their
representative or representatives, or to the trustee or trustees under
any indenture under which any instruments evidencing any such Senior
Indebtedness may have been issued, to the extent necessary to make
payment in full in cash of all Senior Indebtedness remaining unpaid,
after giving effect to any concurrent payment or distribution to the
holders of such Senior Indebtedness; and
(c) In the event that, notwithstanding the foregoing
provisions of this Section 1.03, any payment or distribution of assets
of the Company of any kind or character, whether in cash, property or
securities, shall be received by the holder of the Note on account of
Subordinated Indebtedness before all Senior Indebtedness is paid in
full in cash, such payment or distribution shall be received and held
in trust for and shall be paid over to the holders of the Senior
Indebtedness remaining unpaid or unprovided for or their representative
or representatives, or to the trustee or trustees under any indenture
under which any instruments evidencing any of such Senior Indebtedness
may have been issued, for application to the payment of such Senior
Indebtedness until all such Senior Indebtedness shall have been paid in
full in cash, after giving effect to any concurrent payment or
distribution to the holders of such Senior Indebtedness.
EXHIBIT O
Page 3
Without in any way modifying the provisions hereof or
affecting the subordination effected hereby if the hereafter referenced notice
is not given, the Company shall give prompt written notice to the holder of the
Note of any dissolution, winding up, liquidation or reorganization of the
Company (whether in bankruptcy, insolvency or receivership proceedings or upon
assignment for the benefit of creditors or otherwise).
Section 1.04. Subrogation. Subject to the prior payment in
full in cash of all Senior Indebtedness, the holder of the Note shall be
subrogated to the rights of the holders of Senior Indebtedness to receive
payments or distributions of assets of the Company applicable to the Senior
Indebtedness until all amounts owing on the Note shall be paid in full, and for
the purpose of such subrogation no payments or distributions to the holders of
the Senior Indebtedness by or on behalf of the Company or by or on behalf of the
holder of the Note by virtue hereof which otherwise would have been made to the
holder of the Note shall, as between the Company, its creditors other than the
holders of Senior Indebtedness, and the holder of the Note, be deemed to be
payment by the Company to or on account of the Senior Indebtedness, it being
understood that the provisions hereof are and are intended solely for the
purpose of defining the relative rights of the holder of the Note, on the one
hand, and the holders of the Senior Indebtedness, on the other hand.
Section 1.05. Obligation of the Company Unconditional. Nothing
contained herein or in the Note is intended to or shall impair, as between the
Company and the holder of the Note, the obligation of the Company, which is
absolute and unconditional, to pay to the holder of the Note the principal of
and interest on the Note as and when the same shall become due and payable in
accordance with their terms, or is intended to or shall affect the relative
rights of the holder of the Note and creditors of the Company other than the
holders of the Senior Indebtedness, nor, except as specifically provided herein,
shall anything herein or therein prevent the holder of the Note from exercising
all remedies otherwise permitted by applicable law upon an event of default
under the Note, subject to the rights, if any, herein of the holders of Senior
Indebtedness in respect of cash, property, or securities of the Company received
upon the exercise of any such remedy. Upon any distribution of assets of the
Company referred to herein, the holder of the Note shall be entitled to rely
upon any order or decree made by any court of competent jurisdiction in which
such dissolution, winding up, liquidation or reorganization proceedings are
pending, or a certificate of the liquidating trustee or agent or other person
making any distribution to the holder of the Note, for the purpose of
ascertaining the persons entitled to participate in such distribution, the
holders of the Senior Indebtedness and other indebtedness of the Company, the
amount thereof or payable thereon, the amount or amounts paid or distributed
thereon and all other facts pertinent thereto or hereof.
Section 1.06. Subordination Rights not Impaired by Acts or
Omissions of Company or Holders of Senior Indebtedness. No right of any present
or future holders of any Senior Indebtedness to enforce subordination as herein
provided shall at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Company or by any act or failure to act by any
such holder, or by any noncompliance by the Company with the terms and
provisions of the Note, regardless of any knowledge thereof which any such
holder may have or be otherwise charged with. The holders of the Senior
Indebtedness may, without in any way affecting the obligations of the holder of
the Note with respect hereto, at any time or from time to time and in their
absolute discretion, change the manner, place or terms of payment of, change or
EXHIBIT O
Page 4
extend the time of payment of, or renew or alter, any Senior Indebtedness or
amend, modify or supplement any agreement or instrument governing or evidencing
such Senior Indebtedness or any other document referred to therein, or exercise
or refrain from exercising any other of their rights under the Senior
Indebtedness including, without limitation, the waiver of default thereunder and
the release of any collateral securing such Senior Indebtedness, all without
notice to or assent from the holder of the Note.
Section 1.07. Senior Indebtedness. The term "Senior
Indebtedness" shall mean all Obligations (as defined below) of the Company under
the Subsidiaries Guaranty (as amended, modified, supplemented, extended,
restated, refinanced, replaced or refunded from time to time) dated as of
January 30, 1998, among the Company and the other Subsidiary Guarantors party
thereto as defined in the Credit Agreement (as amended, modified, supplemented,
extended, restated, refinanced, replaced or referenced from time, the "Credit
Agreement"), dated as of January 30, 1998, by and among ElderTrust, ElderTrust
Operating Limited Partnership, the lenders from time to time party thereto,
Deutsche Bank AG, New York Branch, as Issuing Bank, and German American Capital
Corporation, as Administrative Agent (the "Agent"). As used herein, the term
"Obligation" shall mean any principal, interest, premium, penalties, fees,
expenses, indemnities and other liabilities and obligations (including
guaranties in respect thereof) payable under the documentation governing any
Senior Indebtedness (including interest accruing after the commencement of any
bankruptcy, insolvency, receivership or similar proceeding at the rate provided
for in the respective documentation, whether or not such interest is an allowed
claim against the debtor in any such proceeding).
EXHIBIT P
ASSIGNMENT AND ASSUMPTION AGREEMENT
Date: __________, 19__
Reference is made to the Credit Agreement described in Item 2
of Annex I hereto (as such Credit Agreement may hereafter be amended,
supplemented or otherwise modified from time to time, the "Credit Agreement").
Unless defined in Annex I hereto, terms defined in the Credit Agreement are used
herein as therein defined. ___________ (the "Assignor") and __________ (the
"Assignee") hereby agree as follows:
1. The Assignor hereby sells and assigns to the Assignee
without recourse and without representation or warranty (other than as expressly
provided herein), and the Assignee hereby purchases and assumes from the
Assignor, that interest in and to all of the Assignor's rights and obligations
under the Credit Agreement as of the date hereof which represents the percentage
interest specified in Item 4 of Annex I hereto (the "Assigned Share") of all of
the outstanding rights and obligations under the Credit Agreement; including,
without limitation, all rights and obligations with respect to the Assigned
Share of the Total Commitment (if not theretofore terminated) and all
outstanding Loans.
2. The Assignor (i) represents and warrants that it is the
legal and beneficial owner of the interest being assigned by it hereunder and
that such interest is free and clear of any adverse claim; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the
Credit Agreement or the other Credit Documents or any other instrument or
document furnished pursuant thereto, or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of the Credit Agreement or the
other Credit Documents or any other instrument or document furnished pursuant
thereto; and (iii) makes no representation or warranty and assumes no
responsibility with respect to the financial condition of any Credit Party or
the performance or observance by any Credit Party of any of its obligations
under the Credit Agreement or the other Credit Documents to which it is a party
or any other instrument or document furnished pursuant thereto.
3. The Assignee (i) confirms that it has received a copy of
the Credit Agreement and the other Credit Documents, together with copies of the
financial statements referred to therein and such other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into this Assignment and Assumption Agreement; (ii) agrees
that it will, independently and without reliance upon the Administrative Agent,
the Assignor or any other Bank and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under the Credit Agreement; (iii) confirms that it
is an Eligible Transferee under Section 12.04(b) of the Credit Agreement; (iv)
appoints and authorizes each Agent to take such action as agent on its behalf
and to exercise such powers under the Credit Agreement and the other Credit
Documents as are delegated to such Agent, by the terms thereof, together with
such powers as are reasonably incidental thereto; [and] (v) agrees that it will
perform in accordance with their terms
Exhibit P
Page 2
all of the obligations which by the terms of the Credit Agreement are required
to be performed by it as a Bank[; and (vi) to the extent legally entitled to do
so, attaches the forms described in Section [12.04(b)] of the Credit
Agreement].(1)
4. Following the execution of this Assignment and Assumption
Agreement by the Assignor and the Assignee, an executed original hereof
(together with all attachments) will be delivered to the Administrative Agent.
The effective date of this Assignment and Assumption Agreement shall be the date
of execution hereof by the Assignor and the Assignee, the receipt of the consent
of the Administrative Agent to the extent required by Section 12.04(b) of the
Credit Agreement, the receipt by the Administrative Agent of the administrative
fee referred to in such Section 12.04(b) and the recordation of the assignment
effected hereby on the Register by the Administrative Agent as provided in
Section 12.16 of the Credit Agreement, or such later date, if any, which may be
specified in Item 5 of Annex I hereto (the "Settlement Date").
5. Upon the delivery of a fully executed original hereof to
the Administrative Agent, as of the Settlement Date, (i) the Assignee shall be a
party to the Credit Agreement and, to the extent provided in this Assignment and
Assumption Agreement, have the rights and obligations of a Bank thereunder and
under the other Credit Documents and (ii) the Assignor shall, to the extent
provided in this Assignment and Assumption Agreement, relinquish its rights
(except in respect of Sections 1.10, 3.04 and 12.01 of the Credit Agreement for
the period prior to the Settlement Date) and be released from its obligations
under the Credit Agreement and the other Credit Documents.
6. It is agreed that the Assignee shall be entitled to (x) all
interest on the Assigned Share of the Loans at the rates specified in Item 6 of
Annex I hereto and (y) all Commitment Commission on the Assigned Share of the
Total Commitment (if not theretofore terminated) at the rate specified in Item 7
of Annex I hereto, which, in each case, accrue on and after the Settlement Date,
such interest and, if applicable, Commitment Commission, to be paid by the
Administrative Agent directly to the Assignee. It is further agreed that all
payments of principal made on the Assigned Share of the Loans which occur on and
after the Settlement Date will be paid directly by the Administrative Agent to
the Assignee. Upon the Settlement Date, the Assignee shall pay to the Assignor
an amount specified by the Assignor in writing which represents the Assigned
Share of the principal amount of the respective Loans pursuant to the Credit
Agreement which are outstanding on the Settlement Date. The Assignor and the
Assignee shall make all appropriate adjustments in payments under the Credit
Agreement for periods prior to the Settlement Date directly between themselves.
7. THIS ASSIGNMENT AND ASSUMPTION AGREEMENT SHALL BE GOVERNED
BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK.
_________________________
(1) Include if the Assignee is organized under the laws of a jurisdiction
outside of the United States.
Exhibit P
Page 3
Exhibit P
Page 4
IN WITNESS WHEREOF, the parties hereto have caused their duly
authorized officers to execute and deliver this Assignment and Assumption
Agreement, as of the date first above written, such execution also being made on
Annex I hereto.
Accepted this _____ day [NAME OF ASSIGNOR]
of ____________, ____ as Assignor
By_____________________________
Title:
[NAME OF ASSIGNEE]
as Assignee
By_____________________________
Title:
Consented to as of _________ ___, ____.
GERMAN AMERICAN CAPITAL CORPORATION,
as Administrative Agent
By________________________________(2)
Name:
Title:
By________________________________
Name:
Title:
__________________________
(2) The consent of the Administrative Agent is required for assignments pursuant
to Section 12.04(b)(y) of the Credit Agreement.
ANNEX FOR ASSIGNMENT AND ASSUMPTION AGREEMENT
ANNEX I
1. Borrower: ElderTrust Operating Limited Partnership
2. Name and Date of Credit Agreement:
Credit Agreement, dated as of January 30, 1998, among ElderTrust, ElderTrust
Operating Limited Partnership, the Banks from time to time party thereto,
Deutsche Bank AG, New York Branch, as Issuing Bank, and German American
Capital Corporation, as Administrative Agent, as amended to the date hereof.
3. Date of Assignment Agreement:
4. Amounts (as of date of item #3 above):
[Assigned Commitment](3) Outstanding Principal of Loans
a. Aggregate Amount for all Banks $________ $________
b. Assigned Share(4) ________% ________%
c. Amount of Assigned Share $________ ________%
5. Settlement Date:
6. Rate of Interest
to the Assignee: As set forth in Section 1.08 of the Credit Agreement (unless
otherwise agreed to by the Assignor and the Assignee)(5)
- --------
(3) For assignments made prior to the of the Total Commitment.
(4) Percentage taken to 12 decimal places.
(5) The Borrower and the Administrative Agent shall direct the entire amount of
the interest to the Assignee at the rate set forth in Section 1.08 of the
Credit Agreement, with the Assignor and Assignee effecting the agreed upon
sharing of the interest through payments by the Assignee to the Assignor.
Annex I
Page 2
7. Commitment As set forth in Section 2.01(a) of the Credit Agreement
(unless otherwise agreed to by the Assignor and the
Assignee)(6)
8. Notice:
ASSIGNOR:
---------------------
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
ASSIGNEE:
---------------------
---------------------
---------------------
---------------------
Attention:
Telephone:
Telecopier:
Reference:
- ------------------
(6) Insert "Not Applicable" in lieu of text if the Total Commitment has been
terminated. Otherwise, the Borrower and the Administrative Agent shall direct
the entire amount of the Commitment Commission to the Assignee at the rate set
forth in [Section 2.01(a)] of the Credit Agreement, with the Assignor and the
Assignee effecting the agreed upon sharing of Commitment Commission through
payment by the Assignee to the Assignor.
Annex I
Page 3
Payment Instructions:
ASSIGNOR:
---------------------
---------------------
---------------------
---------------------
Attention:
Reference:
ASSIGNEE:
---------------------
---------------------
---------------------
---------------------
Attention:
Reference:
Accepted and Agreed:
[NAME OF ASSIGNEE] [NAME OF ASSIGNOR]
By___________ By___________
___________ ___________
(Print Name and Title) (Print Name and Title)
EXHIBIT Q
INTERCOMPANY NOTE
--------, --------
-------- ---, ----
FOR VALUE RECEIVED, ____________, a ____________________ (the
"Company"), hereby promises to pay on demand to the order of _________, or its
assigns (the "Payee"), in lawful money of the United States of America in
immediately available funds, at such location in the United States of America as
the Payee shall from time to time designate, the unpaid principal amount of all
loans and advances made by the Payee to the Company.
The Company promises also to pay interest on the unpaid
principal amount hereof in like money at said office from the date hereof until
paid at such rate per annum as shall be agreed upon from time to time by the
Company and the Payee.
Upon the commencement of any bankruptcy, reorganization,
arrangement, adjustment of debt, relief of debtors, dissolution, insolvency or
liquidation or similar proceeding of any jurisdiction relating to the Company,
the unpaid principal amount hereof shall become immediately due and payable
without presentment, demand, protest or notice of any kind in connection with
this Note.
This Note is one of the Intercompany Notes referred to in the
Credit Agreement, dated as of January 30, 1998, among ElderTrust, ElderTrust
Operating Limited Partnership, the financial institutions from time to time
party thereto, Deutsche Bank AG, New York Branch, as Issuing Bank, and German
American Capital Corporation, as Administrative Agent (as amended, modified or
supplemented from time to time, the "Credit Agreement") and is subject to the
terms thereof, and shall be pledged by the Payee pursuant to the Pledge
Agreement (as defined in the Credit Agreement). The Company hereby acknowledges
and agrees that the Pledgee pursuant to and as defined in the Pledge Agreement,
as in effect from time to time, may exercise all rights provided therein with
respect to this Note.
[This Note, and all of the Company's obligations hereunder,
shall be subordinate and junior to all Senior Indebtedness (as defined in
Section 1.07 of Annex A hereto) on the terms and conditions set forth in Annex A
hereto, which Annex A is incorporated herein by reference and made a part hereof
as if set forth herein in its entirety.](1)
The Payee is hereby authorized to record all loans and
advances made by it to the Company (all of which shall be evidenced by this
Note), and all repayments or prepayments
- -----------------
(1) Insert in all Intercompany Notes held by a Subsidiary Guarantor that is not
a Wholly-Owned Subsidiary.
Exhibit Q
Page 2
thereof, in its books and records, such books and records constituting prima
facie evidence of the accuracy of the information contained therein.
All payments under this Note shall be made without offset,
counterclaim or deduction of any kind.
The Company hereby waives presentment, demand, protest or
notice of any kind in connection with this Note.
THIS NOTE SHALL BE CONSTRUED IN ACCORDANCE WITH AND GOVERNED
BY THE LAW OF THE STATE OF NEW YORK.
[Company]
By________________________
Name:
Title:
Pay to the order of
____________________________
[Payee]
By__________________________
Title:
EXHIBIT R
FORM OF COMPLETION CERTIFICATE
This Certificate is delivered pursuant to Section 7.16(f) of
the Credit Agreement, dated as of January 30, 1998 among ElderTrust, ElderTrust
Operating Limited Partnership (the "Borrower"), the lending institutions party
thereto (the "Banks"), Deutsche Bank AG, New York Branch, as Issuing Bank, and
German American Capital Corporation, as Administrative Agent (as amended,
restated, supplemented or otherwise modified to the date hereof, the "Credit
Agreement"). All capitalized terms used herein and not otherwise defined herein
shall have the meanings ascribed to such terms in the Credit Agreement.
The undersigned, to the best of [his] or [her] knowledge, does
hereby certify that with respect to the [Renovation/Restoration] of [SPECIFY
PROPERTY] (the "Property"):
(i) all work required to be performed at or about the Property
to complete the [Renovation/Restoration], including all punch list items, has
been performed in substantial accordance with the approved plans and
specifications and otherwise in accordance with the provisions of the Credit
Agreement;
(ii) all necessary inspections by all applicable governmental
authorities for the use, occupancy and operation of the Improvements at the
Property have been satisfactorily completed; and
(iii) a permanent certificate of occupancy for the entire
Improvements and all other certificates, licenses, permits and approvals
necessary for the use, occupancy and operation of the Property as a [senior
living care facility] [medical office building] have been issued, and the
Improvements are undamaged and available for regular use, occupancy and
operation.
DATED:______
[NAME OF ARCHITECT/ENGINEER]
By:_______________________________
Name:
Title:
Exhibit S
FORM OF NOTICE OF RENOVATION/RESTORATION
This Notice is delivered pursuant to Section 7.16[(a)] [(c)]
of that certain Credit Agreement, dated as of January 30, 1998 as amended,
restated, supplemented or otherwise modified to the date hereof, the "Credit
Agreement", the terms defined therein and not otherwise defined herein being
used herein as therein defined), among ElderTrust, ElderTrust Operating Limited
Partnership, (the "Borrower"), the Banks party thereto from time to time,
Deutsche Bank AG, New York Branch, as Issuing Bank, and German American Capital
Corporation, as Administrative Agent.
Notice is hereby given that (check all that apply):
__ 1. A Casualty Event with respect to [specify Borrowing Base
Property] has occurred, whether or not covered by insurance,
that will (or may reasonably be expected to) cost $_________
or more to Restore (Section 7.16(a));
__ 2. A Taking with respect to [specify Borrowing Base Property] has
occurred that will (or may reasonably be expected to) cost
$_________ or more to Restore (Section 7.16(c));
Attached hereto is a description of the applicable [Casualty
Event/Taking] (the "Property Event") including, to the extent applicable, (i)
the Borrowing Base Property affected by the Property Event, and (ii) the
Borrower's Restoration plans required by Section 7.16(f) of the Credit
Agreement, including whether the Borrower intends to Restore the Property
pursuant to Sections 7.16(e) and 7.16(f) of the Credit Agreement.
Attached hereto is a Restoration budget, estimated time schedule and
Restoration plans delivered pursuant to Section 7.16(f) of the Credit Agreement.
DATED:_____________
ELDERTRUST OPERATING LIMITED
PARTNERSHIP
By: ElderTrust, its general partner
By:_____________________________
Name:
Title: