EXHIBIT 10.1
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CREDIT AGREEMENT
DATED AS OF SEPTEMBER 30, 2004
AMONG
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP
AS THE COMPANY,
SUN COMMUNITIES, INC.,
AS THE REIT,
THE VARIOUS FINANCIAL INSTITUTIONS PARTY HERETO,
AS LENDERS,
AND
STANDARD FEDERAL BANK NATIONAL ASSOCIATION,
AS ADMINISTRATIVE AGENT
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LASALLE BANK NATIONAL ASSOCIATION,
AS SOLE LEAD ARRANGER
TABLE OF CONTENTS
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SECTION 1. DEFINITIONS..................................................................................... 2
1.1 Definitions..................................................................................... 2
1.2 Other Interpretive Provisions................................................................... 2
SECTION 2. COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF CREDIT PROCEDURES............... 2
2.1 Commitments..................................................................................... 2
2.1.1 Revolving Loan Commitment........................................................... 2
2.1.2 L/C Commitment...................................................................... 2
2.2 Loan Procedures................................................................................. 2
2.2.1 Various Types of Loans.............................................................. 2
2.2.2 Borrowing Procedures................................................................ 2
2.2.3 Conversion and Continuation Procedures.............................................. 2
2.2.4 Swing Line Facility................................................................. 2
2.3 Letter of Credit Procedures..................................................................... 2
2.3.1 L/C Applications.................................................................... 2
2.3.2 Participations in Letters of Credit................................................. 2
2.3.3 Reimbursement Obligations........................................................... 2
2.3.4 Funding by Lenders to Issuing Lender................................................ 2
2.4 Commitments Several............................................................................. 2
2.5 Certain Conditions.............................................................................. 2
2.6 Release of Guarantors........................................................................... 2
SECTION 3. EVIDENCING OF LOANS; SECURITY................................................................... 2
3.1 Notes........................................................................................... 2
3.2 Recordkeeping................................................................................... 2
3.3 Security for Obligations........................................................................ 2
SECTION 4. INTEREST........................................................................................ 2
4.1 Interest Rates.................................................................................. 2
4.2 Interest Payment Dates.......................................................................... 2
4.3 Setting and Notice of LIBOR Rates............................................................... 2
4.4 Computation of Interest......................................................................... 2
SECTION 5. FEES............................................................................................ 2
5.1 Non-Use Fee..................................................................................... 2
5.2 Letter of Credit Fees........................................................................... 2
5.3 Administrative Agent's Fees..................................................................... 2
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SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT; PREPAYMENTS; INCREASES IN
REVOLVING COMMITMENT; EXTENSION OF TERMINATION DATE............................................. 2
6.1 Reduction or Termination of the Revolving Commitment............................................ 2
6.1.1 Voluntary Reduction or Termination of the Revolving Commitment...................... 2
6.1.2 All Reductions of the Revolving Commitment.......................................... 2
6.2 Prepayments..................................................................................... 2
6.2.1 Voluntary Prepayments............................................................... 2
6.2.2 Mandatory Prepayments............................................................... 2
6.3 Manner of Prepayments........................................................................... 2
6.3.1 All Prepayments..................................................................... 2
6.4 Repayments...................................................................................... 2
6.4.1 Revolving Loans..................................................................... 2
6.5 Increase in Commitments......................................................................... 2
6.5.1 Request for Increase................................................................ 2
6.5.2 Lender Elections to Increase........................................................ 2
6.5.3 Notification by Administrative Agent; Additional Lenders............................ 2
6.5.4 Effective Date and Allocations...................................................... 2
6.5.5 Conditions to Effectiveness of Increase............................................. 2
6.6 Extension of Termination Date................................................................... 2
6.6.1 The Company's Option to Extend...................................................... 2
SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES................................................. 2
7.1 Making of Payments.............................................................................. 2
7.2 Application of Certain Payments................................................................. 2
7.3 Due Date Extension.............................................................................. 2
7.4 Setoff.......................................................................................... 2
7.5 Proration of Payments........................................................................... 2
7.6 Taxes........................................................................................... 2
SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS............................................. 2
8.1 Increased Costs................................................................................. 2
8.2 Basis for Determining Interest Rate Inadequate or Unfair........................................ 2
8.3 Changes in Law Rendering LIBOR Loans Unlawful................................................... 2
8.4 Funding Losses.................................................................................. 2
8.5 Right of Lenders to Fund through Other Offices.................................................. 2
8.6 Discretion of Lenders as to Manner of Funding................................................... 2
8.7 Mitigation of Circumstances; Replacement of Lenders............................................. 2
8.8 Conclusiveness of Statements; Survival of Provisions............................................ 2
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SECTION 9. REPRESENTATIONS AND WARRANTIES.................................................................. 2
9.1 Organization.................................................................................... 2
9.2 Authorization; No Conflict...................................................................... 2
9.3 Validity and Binding Nature..................................................................... 2
9.4 Financial Condition............................................................................. 2
9.5 No Material Adverse Change...................................................................... 2
9.6 Litigation and Contingent Liabilities........................................................... 2
9.7 Ownership of Properties; Liens.................................................................. 2
9.8 Equity Ownership; Subsidiaries.................................................................. 2
9.9 Pension Plans................................................................................... 2
9.10 Investment Company Act.......................................................................... 2
9.11 Public Utility Holding Company Act.............................................................. 2
9.12 Regulation U.................................................................................... 2
9.13 Taxes........................................................................................... 2
9.14 Solvency, etc................................................................................... 2
9.15 Environmental Matters........................................................................... 2
9.16 Insurance....................................................................................... 2
9.17 Real Property................................................................................... 2
9.18 Information..................................................................................... 2
9.19 Intellectual Property........................................................................... 2
9.20 Burdensome Obligations.......................................................................... 2
9.21 Labor Matters................................................................................... 2
9.22 No Default...................................................................................... 2
9.23 Status of Property.............................................................................. 2
9.24 The Collateral.................................................................................. 2
9.25 REIT Status..................................................................................... 2
9.26 Stock........................................................................................... 2
SECTION 10. AFFIRMATIVE COVENANTS........................................................................... 2
10.1 Reports, Certificates and Other Information..................................................... 2
10.1.1 Annual Report....................................................................... 2
10.1.2 Interim Reports..................................................................... 2
10.1.3 Compliance Certificates............................................................. 2
10.1.4 Reports to the SEC and to Shareholders.............................................. 2
10.1.5 Notice of Default, Litigation and ERISA Matters..................................... 2
10.1.6 Borrowing Base Certificates......................................................... 2
10.1.7 Management Reports.................................................................. 2
10.1.8 Subordinated Debt Notices........................................................... 2
10.1.9 Notices Regarding Certain Debt...................................................... 2
10.1.10 Projections......................................................................... 2
10.1.11 Notices Regarding Major Agreements.................................................. 2
10.1.12 Other Information................................................................... 2
10.2 Books, Records and Inspections.................................................................. 2
10.3 Maintenance of Property; Insurance.............................................................. 2
10.4 Compliance with Laws; Payment of Taxes and Liabilities.......................................... 2
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10.5 Maintenance of Existence, etc................................................................... 2
10.6 Use of Proceeds................................................................................. 2
10.7 Employee Benefit Plans.......................................................................... 2
10.8 Environmental Matters........................................................................... 2
10.9 Further Assurances.............................................................................. 2
SECTION 11. NEGATIVE COVENANTS.............................................................................. 2
11.1 Debt............................................................................................ 2
11.2 Liens........................................................................................... 2
11.3 Restricted Payments............................................................................. 2
11.4 Mergers, Consolidations, Sales.................................................................. 2
11.5 Modification of Organizational Documents........................................................ 2
11.6 Transactions with Affiliates.................................................................... 2
11.7 Unconditional Purchase Obligations.............................................................. 2
11.8 Inconsistent Agreements......................................................................... 2
11.9 Business Activities; Issuance of Equity......................................................... 2
11.10 Investments..................................................................................... 2
11.11 Restriction of Amendments to Certain Documents.................................................. 2
11.12 Fiscal Year..................................................................................... 2
11.13 Financial Covenants............................................................................. 2
11.13.1 Adjusted EBITDA to Debt Service Ratio............................................... 2
11.13.2 Adjusted EBITDA to Fixed Charge Ratio............................................... 2
11.13.3 Total Leverage Ratio................................................................ 2
11.13.4 Unencumbered Adjusted NOI to Total Unsecured Debt Service Ratio..................... 2
11.13.5 Tangible Net Worth.................................................................. 2
11.14 Interest Rate Protection........................................................................ 2
SECTION 12. EFFECTIVENESS; CONDITIONS OF LENDING, ETC....................................................... 2
12.1 Initial Credit Extension........................................................................ 2
12.1.1 Notes............................................................................... 2
12.1.2 Authorization Documents............................................................. 2
12.1.3 Consents, etc....................................................................... 2
12.1.4 Letter of Direction................................................................. 2
12.1.5 Guaranty............................................................................ 2
12.1.6 Collateral Documents................................................................ 2
12.1.7 Title Reports....................................................................... 2
12.1.8 Subordination Agreements............................................................ 2
12.1.9 Opinions of Counsel................................................................. 2
12.1.10 Insurance........................................................................... 2
12.1.11 Payment of Fees..................................................................... 2
12.1.12 Solvency Certificate................................................................ 2
12.1.13 Environmental Reports............................................................... 2
12.1.14 Search Results; Lien Terminations................................................... 2
12.1.15 Borrowing Base Certificate.......................................................... 2
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12.1.16 Closing Certificate, Consents and Permits........................................... 2
12.1.17 Other............................................................................... 2
12.2 Conditions...................................................................................... 2
12.2.1 Compliance with Warranties, No Default, etc......................................... 2
12.2.2 Confirmatory Certificate............................................................ 2
SECTION 13. EVENTS OF DEFAULT AND THEIR EFFECT.............................................................. 2
13.1 Events of Default............................................................................... 2
13.1.1 Non-Payment of the Loans, etc....................................................... 2
13.1.2 Non-Payment of Other Debt........................................................... 2
13.1.3 Other Material Obligations.......................................................... 2
13.1.4 Bankruptcy, Insolvency, etc......................................................... 2
13.1.5 Non-Compliance with Loan Documents.................................................. 2
13.1.6 Representations; Warranties......................................................... 2
13.1.7 Pension Plans....................................................................... 2
13.1.8 Judgments........................................................................... 2
13.1.9 Invalidity of Guaranty.............................................................. 2
13.1.10 Invalidity of Subordination Provisions, etc......................................... 2
13.1.11 Change of Control................................................................... 2
13.1.12 Material Adverse Effect............................................................. 2
13.2 Effect of Event of Default...................................................................... 2
SECTION 14. THE AGENT....................................................................................... 2
14.1 Appointment and Authorization................................................................... 2
14.2 Issuing Lender.................................................................................. 2
14.3 Delegation of Duties............................................................................ 2
14.4 Exculpation of Administrative Agent............................................................. 2
14.5 Reliance by Administrative Agent................................................................ 2
14.6 Notice of Default............................................................................... 2
14.7 Credit Decision................................................................................. 2
14.8 Indemnification................................................................................. 2
14.9 Administrative Agent in Individual Capacity..................................................... 2
14.10 Successor Administrative Agent.................................................................. 2
14.11 Subordinated Debt............................................................................... 2
14.12 Administrative Agent May File Proofs of Claim................................................... 2
14.13 Other Agents; Arrangers and Managers............................................................ 2
SECTION 15. GENERAL......................................................................................... 2
15.1 Waiver; Amendments.............................................................................. 2
15.2 Confirmations................................................................................... 2
15.3 Notices......................................................................................... 2
15.4 Computations.................................................................................... 2
15.5 Costs, Expenses and Taxes....................................................................... 2
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15.6 Assignments; Participations............................................................. 2
15.6.1 Assignments................................................................. 2
15.6.2 Participations.............................................................. 2
15.7 Register................................................................................ 2
15.8 GOVERNING LAW........................................................................... 2
15.9 Confidentiality......................................................................... 2
15.10 Severability............................................................................ 2
15.11 Nature of Remedies...................................................................... 2
15.12 Entire Agreement........................................................................ 2
15.13 Counterparts............................................................................ 2
15.14 Successors and Assigns.................................................................. 2
15.15 Captions................................................................................ 2
15.16 Customer Identification - USA Patriot Act Notice........................................ 2
15.17 INDEMNIFICATION BY THE COMPANY.......................................................... 2
15.18 Nonliability of Lenders................................................................. 2
15.19 FORUM SELECTION AND CONSENT TO JURISDICTION............................................. 2
15.20 WAIVER OF JURY TRIAL.................................................................... 2
ANNEX A - LENDERS AND PRO RATA SHARES..................................................................... ANNEX A- 2
ANNEX B - ADDRESSES FOR NOTICES........................................................................... ANNEX B-2
EXHIBIT A - FORM OF NOTE.................................................................................. EX A-2
EXHIBIT B - FORM OF COMPLIANCE CERTIFICATE................................................................ EX B-2
EXHIBIT C - FORM OF BORROWING BASE CERTIFICATE............................................................ EX C-2
EXHIBIT E - FORM OF NOTICE OF BORROWING................................................................... EX E-2
EXHIBIT F - FORM OF NOTICE OF CONVERSION/CONTINUATION..................................................... EX F-2
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT dated as of September 30, 2004 (this "Agreement") is
entered into among SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP, a Michigan
limited partnership (the "Company"), SUN COMMUNITIES, INC., a Maryland
corporation (the "REIT"), the financial institutions that are or may from time
to time become parties hereto (together with their respective successors and
assigns, the "Lenders") and STANDARD FEDERAL BANK NATIONAL ASSOCIATION (in its
individual capacity, "Standard Federal"), as administrative agent for the
Lenders.
The Lenders have agreed to make available to the Company a revolving
credit facility (which includes letters of credit) upon the terms and conditions
set forth herein.
In consideration of the mutual agreements herein contained, the parties
hereto agree as follows:
SECTION 1. DEFINITIONS.
1.1 Definitions. When used herein the following terms shall have the
following meanings:
Acquired Debt means mortgage Debt or Debt with respect to Capital Leases
of a Person existing at the time such Person became a Subsidiary or assumed by
the Company or a Subsidiary of the Company pursuant to an Acquisition permitted
hereunder (and not created or incurred in connection with or in anticipation of
such Acquisition).
Acquisition means any transaction or series of related transactions for
the purpose of or resulting, directly or indirectly, in (a) the acquisition of
all or substantially all of the assets of a Person, or of all or substantially
all of any business or division of a Person, (b) the acquisition of in excess of
50% of the Capital Securities of any Person, or otherwise causing any Person to
become a Subsidiary, or (c) a merger or consolidation or any other combination
with another Person (other than a Person that is already a Subsidiary).
Adjusted EBITDA means EBITDA less, solely in respect of each Developed
Property, a capital expenditure reserve equal to $50 per pad and the greater of
actual management fees or an imputed management fee equal to 4% of Base Rent
Revenues.
Adjusted NOI means the Net Operating Income from the properties within the
Borrowing Base Pool for the respective Computation Period less: (a) a capital
expenditure reserve equal to $50 per pad for each fully developed pad; and (b)
the greater of actual management fees or an imputed management fee equal to 4%
of Base Rent Revenues.
Administrative Agent means Standard Federal in its capacity as
administrative agent for the Lenders hereunder and any successor thereto in such
capacity.
Affected Loan - see Section 8.3.
Affiliate of any Person means (a) any other Person which, directly or
indirectly, controls or is controlled by or is under common control with such
Person and (b) with respect to any Lender, any entity administered or managed by
such Lender or an Affiliate or investment advisor thereof and which is engaged
in making, purchasing, holding or otherwise investing in commercial loans. A
Person shall be deemed to be "controlled by" any other Person if such Person
possesses, directly or indirectly, power to vote 10% or more of the securities
(on a fully diluted basis) having ordinary voting power for the election of
directors or managers or power to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise. Unless
expressly stated otherwise herein, neither the Administrative Agent nor any
Lender shall be deemed an Affiliate of any Loan Party.
Agent Fee Letter means the Fee letter dated as of August 5, 2004 between
the Company and the Administrative Agent.
Agreement - see the Preamble.
Applicable Margin means, for any day, the rate per annum set forth below
opposite the level (the "Level") then in effect, it being understood that the
Applicable Margin for (i) LIBOR Loans shall be the percentage set forth under
the column "LIBOR Margin", (ii) Base Rate Loans shall be the percentage set
forth under the column "Base Rate Margin" and (iii) the L/C Fee shall be the
percentage set forth under the column "L/C Fee Rate":
LIBOR BASE RATE L/C FEE
LEVEL TOTAL LEVERAGE RATIO MARGIN MARGIN RATE
I Less than 0.40:1 1.125% 0% 1.125%
II Greater than or equal to 0.40:1 but less 1.25% 0% 1.25%
than 0.50:1
III Greater than or equal to 0.50:1 but less 1.50% 0.25% 1.50%
than 0.60:1
IV Greater than or equal to 0.60:1 1.75% 0.50% 1.75%
The LIBOR Margin, the Base Rate Margin and the L/C Fee Rate shall be
adjusted, to the extent applicable, on the fifth (5th) Business Day after the
Company provides or is required to provide the annual and quarterly financial
statements and other information pursuant to Section 10.1.1 or 10.1.2, as
applicable, and the related Compliance Certificate, pursuant to Section 10.1.3.
Notwithstanding anything contained in this paragraph to the contrary, (a) if the
Company fails to deliver such financial statements and Compliance Certificate in
accordance with the provisions of Section 10.1.1, 10.1.2 and 10.1.3, the LIBOR
Margin, the Base Rate Margin and the L/C Fee Rate shall be based upon Level IV
above beginning on the date such financial statements and Compliance Certificate
were required to be delivered until the fifth (5th) Business Day after such
financial statements and Compliance Certificate are actually delivered,
whereupon the Applicable Margin shall be determined by the then current Level;
(b) no reduction to any Applicable Margin shall become effective at any time
when an Event of Default
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or Unmatured Event of Default has occurred and is continuing; and (c) the
initial Applicable Margin on the Closing Date shall be based on Level IV until
the date on which the financial statements and Compliance Certificate are
required to be delivered for the Fiscal Quarter ending September 30, 2004.
Assignee - see Section 15.6.1.
Assignment Agreement - see Section 15.6.1.
Attorney Costs means, with respect to any Person, all reasonable fees and
charges of any counsel to such Person, the reasonable allocable cost of internal
legal services of such Person, all reasonable disbursements of such internal
counsel and all court costs and similar legal expenses.
Bank Product Agreements means those certain cash management service
agreements entered into from time to time between any Loan Party and a Lender or
its Affiliates in connection with any of the Bank Products.
Bank Product Obligations means all obligations, liabilities, contingent
reimbursement obligations, fees, and expenses owing by the Loan Parties to any
Lender or its Affiliates pursuant to or evidenced by the Bank Product Agreements
and irrespective of whether for the payment of money, whether direct or
indirect, absolute or contingent, due or to become due, now existing or
hereafter arising, and including all such amounts that a Loan Party is obligated
to reimburse to the Administrative Agent or any Lender as a result of the
Administrative Agent or such Lender purchasing participations or executing
indemnities or reimbursement obligations with respect to the Bank Products
provided to the Loan Parties pursuant to the Bank Product Agreements.
Bank Products means any service or facility extended to any Loan Party by
any Lender or its Affiliates including: (a) credit cards, (b) credit card
processing services, (c) debit cards, (d) purchase cards, (e) ACH Transactions,
(f) cash management, including controlled disbursement, accounts or services, or
(g) Hedging Agreements.
Base Rate means at any time the greater of (a) the Federal Funds Rate plus
0.5% and (b) the Prime Rate.
Base Rate Loan means any Loan which bears interest at or by reference to
the Base Rate.
Base Rate Margin - see the definition of Applicable Margin.
Base Rent Revenues means actual rent received for Manufactured Home sites
and Recreational Vehicle sites.
Borrowing Base means the amount, on a property-by-property basis, equal,
in aggregate, to the lower of:
1. The sum of:
(i) 65% of the Borrowing Base Pool Value;
(ii) LESS GMAC Pool Debt;
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(iii) LESS the Sea Air Property Debt.
2. The Permanent Loan Estimate.
3. An amount equal to 200% of the Borrowing Base attributable to the
Unencumbered Pool.
The Borrowing Base will be calculated on a quarterly basis, or more
frequently, if there are changes to the Borrowing Base Pool.
Notwithstanding anything contained herein to the contrary, not more than
15% of the Borrowing Base may be attributeable to Recreational Vehicle
Communities.
Borrowing Base Certificate means a certificate substantially in the form
of Exhibit C.
Borrowing Base Pool means (a) initially, the properties listed on Schedule
1.1(a) attached hereto and (b) any future properties designated by the Company,
acceptable to the Administrative Agent and the Required Lenders and meeting the
following criteria:
(i) Either (z) properties must be wholly-owned by the REIT, the Company
or their Subsidiaries in fee simple, with the exception of ground
leases approved by the Administrative Agent, in its sole discretion,
or (y) properties not 100% owned which the REIT and the Company
consolidates on its financial statements and in which the REIT, the
Company or their Subsidiaries holds a majority interest, acts as the
General Partner and controls all management and financial decisions
acceptable to the Administrative Agent, in its reasonable
discretion;
(ii) Properties must not have any restrictions on sale or ability to be
encumbered by the Company;
(iii) Properties must be Manufactured Home Communities or Recreational
Vehicle Communities;
(iv) No single property in the Borrowing Base Pool shall account for more
than 20% of the total Borrowing Base;
(v) There shall be no less than fifteen (15) properties in the Borrowing
Base Pool at any time;
(vi) No more than 50% of the Borrowing Base may be comprised of
properties located in any single market (as reasonable determined by
the Administrative Agent), city, or county;
(vii) The Administrative Agent shall have received a current environmental
report and a title review satisfactory to the Administrative Agent
in all respects with regard to each property in the Borrowing Base
Pool.
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Properties included in the Borrowing Base Pool as of the date hereof are
identified in Schedule 1.1(a). The Company may add, delete or substitute
properties included in the Borrowing Base Pool at its discretion upon notice
thereof to the Administrative Agent; provided, however, that properties added to
the Borrowing Base Pool after the date of this Agreement must meet the
conditions set forth in this definition of Borrowing Base Pool and must be
acceptable to the Required Lenders in their reasonable discretion. No property
shall be deleted from the Borrowing Base Pool at the request of the Company, if
immediately after giving effect to such deletion, (a) an Event of Default or
Unmatured Event of Default would exist or (b) the Revolving Outstandings plus
the outstanding amount of the Swing Line Loan would exceed the Borrowing Base.
In addition to any other rights that they may have under this Agreement,
The Administrative Agent and/or the Required Lenders may from time to time
remove one or more properties from the Borrowing Base Pool if any of the
following events occur:
(A) if a default occurs and remains uncured with respect to the GMAC Debt,
then one or more of the GMAC Pool properties may be removed;
(B) if a default occurs and remains uncured with respect to any of the
Major Agreements relating to the High Point Property, then the High Point
Property may be removed;
(C) if a default occurs and remains uncured with respect to any of the
Major Agreements relating to the Sea Air Property, then the Sea Air Property may
be removed;
(D) if a default occurs and remains uncured with respect any of the Major
Agreements relating to the SunChamp Portfolio, then one or more of the SunChamp
Portfolio properties may be removed; or
(E) if any of the Unencumbered Properties becomes encumbered or the
ownership and/or management of any such property changes so that the REIT, the
Company or their Subsidiaries no longer controls all management and financial
decisions with respect thereto, then such property may be removed.
Borrowing Base Pool Value means the sum of the Capitalized Value of the
properties included in the Borrowing Base Pool.
BSA - see Section 10.4.
Business Day means any day on which Standard Federal is open for
commercial banking business in Troy, Michigan and, in the case of a Business Day
which relates to a LIBOR Loan, on which dealings are carried on in the London
interbank eurodollar market.
Capital Expenditures means all expenditures which, in accordance with
GAAP, would be required to be capitalized and shown on the consolidated balance
sheet of the REIT and the Company, including expenditures in respect of Capital
Leases, but excluding expenditures made in connection with the replacement,
substitution or restoration of assets to the extent financed (a) from insurance
proceeds (or other similar recoveries) paid on account of the loss of or damage
to
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the assets being replaced or restored or (b) with awards of compensation arising
from the taking by eminent domain or condemnation of the assets being replaced.
Capital Lease means, with respect to any Person, any lease of (or other
agreement conveying the right to use) any real or personal property by such
Person that, in conformity with GAAP, is accounted for as a capital lease on the
balance sheet of such Person.
Capital Securities means, with respect to any Person, all shares,
interests, participations or other equivalents (however designated, whether
voting or non-voting) of such Person's capital, whether now outstanding or
issued or acquired after the Effective Date, including common shares, preferred
shares, membership interests in a limited liability company, limited or general
partnership interests in a partnership, interests in a Trust, interests in other
unincorporated organizations or any other equivalent of such ownership interest.
Capitalized Value means (a) for each Manufactured Home Community, the
quotient of the Net Operating Income for such property for the most recently
ended two Fiscal Quarters multiplied by 2, then divided by 7.75%, and (b) for
each Recreational Vehicle Community, the quotient of the Net Operating Income
for such property for the most recently ended four Fiscal Quarters divided by
7.75%.
Cash Collateralize means to deliver cash collateral to the Administrative
Agent, to be held as cash collateral for outstanding Letters of Credit, pursuant
to documentation satisfactory to the Administrative Agent. Derivatives of such
term have corresponding meanings.
Cash Equivalent Investment means, at any time, (a) any evidence of Debt,
maturing not more than one year after such time, issued or guaranteed by the
United States Government or any agency thereof, (b) commercial paper, maturing
not more than one year from the date of issue, or corporate demand notes, in
each case (unless issued by a Lender or its holding company) rated at least A-l
by Standard & Poor's Ratings Services, a division of The McGraw-Hill Companies,
Inc. or P-l by Moody's Investors Service, Inc., (c) any certificate of deposit,
time deposit or banker's acceptance, maturing not more than one year after such
time, or any overnight Federal Funds transaction that is issued or sold by any
Lender or its holding company (or by a commercial banking institution that is a
member of the Federal Reserve System and has a combined capital and surplus and
undivided profits of not less than $500,000,000), (d) any repurchase agreement
entered into with any Lender (or commercial banking institution of the nature
referred to in clause (c)) which (i) is secured by a fully perfected security
interest in any obligation of the type described in any of clauses (a) through
(c) above and (ii) has a market value at the time such repurchase agreement is
entered into of not less than 100% of the repurchase obligation of such Lender
(or other commercial banking institution) thereunder and (e) money market
accounts or mutual funds which invest exclusively in assets satisfying the
foregoing requirements, and (f) other short term liquid investments approved in
writing by the Administrative Agent.
Change of Control means the occurrence of any of the following events: (a)
the REIT shall cease to own and control at least 70% of the outstanding Capital
Securities of the Company or ceases to be the general partner of the Company or
ceases to control all management and financial decisions of the Company; (b) the
REIT, the Company or their Subsidiaries shall cease to control all management
and financial decisions of any Loan Party (other than SunChamp
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LLC); or (c) the Company ceases to directly or indirectly own at least 60% of
the Capital Securities of SunChamp LLC.
Closing Date - see Section 12.1.
Code means the Internal Revenue Code of 1986, as amended.
Collateral means any and all of the assets in which the Administrative
Agent and the Lenders have been granted a mortgage, security interest, pledge
and or other lien pursuant to the Collateral Documents.
Collateral Documents means each of the mortgages, security agreements,
pledge agreements and other documents required pursuant to Section 3.3.
Commitment means, as to any Lender, such Lender's commitment to make
Loans, and to issue or participate in Letters of Credit, under this Agreement.
The initial amount of each Lender's commitment to make Loans is set forth on
Annex A.
Company - see the Preamble.
Compliance Certificate means a Compliance Certificate in substantially the
form of Exhibit B.
Computation Period means each period of four consecutive Fiscal Quarters
ending on the last day of a Fiscal Quarter, provided, however, that for purposes
of computing EBITDA and Net Operating Income, the computations for Manufactured
Home Communities shall be based upon the most recent 2 Fiscal Quarters,
annualized.
Contingent Liability means, with respect to any Person, each obligation
and liability of such Person and all such obligations and liabilities of such
Person incurred pursuant to any agreement, undertaking or arrangement by which
such Person: (a) guarantees, endorses or otherwise becomes or is contingently
liable upon (by direct or indirect agreement, contingent or otherwise, to
provide funds for payment, to supply funds to, or otherwise to invest in, a
debtor, or otherwise to assure a creditor against loss) the indebtedness,
dividend, obligation or other liability of any other Person in any manner (other
than by endorsement of instruments in the course of collection), including any
indebtedness, dividend or other obligation which may be issued or incurred at
some future time; (b) guarantees the payment of dividends or other distributions
upon the Capital Securities of any other Person; (c) undertakes or agrees
(whether contingently or otherwise): (i) to purchase, repurchase, or otherwise
acquire any indebtedness, obligation or liability of any other Person or any
property or assets constituting security therefor, (ii) to advance or provide
funds for the payment or discharge of any indebtedness, obligation or liability
of any other Person (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, working capital or other financial condition of any other Person, or
(iii) to make payment to any other Person other than for value received; (d)
agrees to lease property or to purchase securities, property or services from
such other Person with the purpose or intent of assuring the owner of such
indebtedness or obligation of the ability of such other Person to make payment
of the indebtedness or obligation; (e) to induce the issuance of, or in
connection with the issuance of, any letter of credit for the
7
benefit of such other Person; or (f) undertakes or agrees otherwise to assure a
creditor against loss. The amount of any Contingent Liability shall (subject to
any limitation set forth herein) be deemed to be the outstanding principal
amount (or maximum permitted principal amount, if larger) of the indebtedness,
obligation or other liability guaranteed or supported thereby.
Controlled Group means all members of a controlled group of corporations,
all members of a controlled group of trades or businesses (whether or not
incorporated) under common control and all members of an affiliated service
group which, together with the Company, are treated as a single employer under
Section 414 of the Code or Section 4001 of ERISA.
Debt of any Person means, without duplication, (a) all indebtedness of
such Person, (b) all borrowed money of such Person, whether or not evidenced by
bonds, debentures, notes or similar instruments, (c) all obligations of such
Person as lessee under Capital Leases which have been or should be recorded as
liabilities on a balance sheet of such Person in accordance with GAAP, (d) all
obligations of such Person to pay the deferred purchase price of property or
services (excluding trade accounts payable in the ordinary course of business),
(e) all indebtedness secured by a Lien on the property of such Person, whether
or not such indebtedness shall have been assumed by such Person; provided that
if such Person has not assumed or otherwise become liable for such indebtedness,
such indebtedness shall be measured at the fair market value of such property
securing such indebtedness at the time of determination, (f) all obligations,
contingent or otherwise, with respect to the face amount of all letters of
credit (whether or not drawn), bankers' acceptances and similar obligations
issued for the account of such Person (including the Letters of Credit), (h) all
Contingent Liabilities of such Person, (i) all recourse debt of any partnership
of which such Person is a general partner, (j) all Hedging Obligations of such
Person (excluding the Company's three existing interest rate swap agreements and
any future hedging agreements treated by such Person as permanent fixed rate
debt), and (k) such Person's pro-rata share of all joint venture recourse debt).
Debt Service means, for any period, the sum (without duplication) of
Interest Expense (including capitalized interest) for such period plus (ii)
scheduled principal amortization of any Debt of the REIT, the Company and their
consolidated Subsidiaries and any unscheduled principal amortization payments
actually made or required to be made during such period pursuant to a settlement
of such Debt (giving effect to any principal payments actually made or required
to be made other than scheduled balloon payments due on the applicable maturity
date that are not then due or past due) for such period, all determined on a
consolidated basis for the REIT, the Company and their consolidated
Subsidiaries.
Debt to be Repaid means Debt listed on Schedule 12.1.
Developed Property means a property or portion of a property which is not
under construction and is operational and open for business.
Dollar and the sign "$" mean lawful money of the United States of America.
EBITDA means, for the trailing Computation Period, as reported by the
Company, the sum of: (i) net income plus income allocated to OP unit holders
(excluding any non-recurring gains and losses); plus (ii) an amount which, in
the determination of net income for such trailing
8
Computation Period, has been deducted for or in connection with (A) consolidated
Interest Expense (plus amortization of deferred financing costs included in the
determination of consolidated Interest Expense per GAAP), (B) income taxes, and
(C) depreciation and amortization (including amortization of the portion, if
any, of any purchase price allocated to in-place leases), all determined on a
consolidated basis in accordance with GAAP. In each case, EBITDA will be
adjusted to give pro forma effect to assets acquired during the calendar year.
Effective Date - see last paragraph of this Agreement.
Environmental Claims means all claims, however asserted, by any
governmental, regulatory or judicial authority or other Person alleging
potential liability or responsibility for violation of any Environmental Law, or
for release or injury to the environment.
Environmental Laws means all present or future federal, state or local
laws, statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative or judicial orders, consent agreements,
directed duties, requests, licenses, authorizations and permits of, and
agreements with, any governmental authority, in each case relating to any matter
arising out of or relating to public health and safety, or pollution or
protection of the environment or workplace, including any of the foregoing
relating to the presence, use, production, generation, handling, transport,
treatment, storage, disposal, distribution, discharge, emission, release,
threatened release, control or cleanup of any Hazardous Substance.
ERISA means the Employee Retirement Income Security Act of 1974, as
amended.
Event of Default means any of the events described in Section 13.1.
Excluded Taxes means taxes based upon, or measured by, the Lender's or
Administrative Agent's (or a branch of the Lender's or Administrative Agent's)
overall net income, overall net receipts, or overall net profits (including
franchise taxes imposed in lieu of such taxes), but only to the extent such
taxes are imposed by a taxing authority (a) in a jurisdiction in which such
Lender or Administrative Agent is organized, (b) in a jurisdiction which the
Lender's or Administrative Agent's principal office is located, or (c) in a
jurisdiction in which such Lender's or Administrative Agent's lending office (or
branch) in respect of which payments under this Agreement are made is located.
Federal Funds Rate means, for any day, a fluctuating interest rate equal
for each day during such period to the weighted average of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published for such day (or, if such day is
not a Business Day, for the next preceding Business Day) by the Federal Reserve
Bank of New York, or, if such rate is not so published for any day which is a
Business Day, the average of the quotations for such day on such transactions
received by the Administrative Agent from three Federal funds brokers of
recognized standing selected by the Administrative Agent. The Administrative
Agent's determination of such rate shall be binding and conclusive absent
manifest error.
Fiscal Quarter means a fiscal quarter of a Fiscal Year.
9
Fiscal Year means the fiscal year of the Company, the REIT and its
Subsidiaries, which period shall be the 12-month period ending on December 31 of
each year. References to a Fiscal Year with a number corresponding to any
calendar year (e.g., "Fiscal Year 2004") refer to the Fiscal Year ending on
December 31 of such calendar year.
Fixed Charge Coverage Ratio means, for any Computation Period, the ratio
of (a) the total for such period of Adjusted EBITDA of the Company, the REIT and
their consolidated Subsidiaries to (b) the sum for such period of Fixed Charges
of the Company, the REIT and their consolidated Subsidiaries.
Fixed Charges means cash Interest Expense, capitalized interest, scheduled
amortization payments, preferred dividends (if any), including distributions to
preferred OP Unit holders, and reserve fundings required by any other debt
agreements. Notwithstanding the above, prepayment penalty fees will not be
included in Fixed Charges.
FRB means the Board of Governors of the Federal Reserve System or any
successor thereto.
Funded Debt means, as to any Person, all outstanding Debt of such Person
that matures more than one year from the date of its creation (or is renewable
or extendible, at the option of such Person, to a date more than one year from
such date).
Funds From Operations means consolidated net income (loss) before
extraordinary items, computed in accordance with GAAP, plus, to the extent
deducted in determining net income (loss) and without duplication, (i) gains (or
losses) from debt restructuring and sales of property, (ii) non-recurring
charges, (iii) provisions for losses, (iv) real estate related depreciation and
amortization (excluding amortization of financing costs, but including
amortization of the portion, if any, of any purchase price allocated to in-place
leases), and (v) amortization of organizational expenses, less, to the extent
included in net income (loss), non-recurring income.
GAAP means generally accepted accounting principles set forth from time to
time in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board (or agencies with
similar functions of comparable stature and authority within the U.S. accounting
profession) and the Securities and Exchange Commission, which are applicable to
the circumstances as of the date of determination.
GMAC Pool means the seven properties identified on Schedule 1.1(a) as the
GMAC Pool.
GMAC Pool Debt means the indebtedness encumbering the GMAC Pool as
identified on Schedule 1.1(c).
Gross Asset Value means the sum of cash, Cash Equivalents and refundable
cash deposits of the Company, the REIT and their consolidated Subsidiaries, plus
the capitalized market asset value of all the real estate owned by the Company,
the REIT and their consolidated Subsidiaries, as calculated by the EBITDA of the
Company, the REIT and their consolidated Subsidiaries for such Computation
Period divided by 7.75%, plus the GAAP book value of the unencumbered
10
Owned Manufactured Homes held in inventory, plus the Transitional Pads Value,
plus the lesser of (i) the GAAP book value of land owned and held by the REIT,
the Company and their Subsidiaries for future development or (ii)
$40,000,000.00.
Group - see Section 2.2.1.
Guarantors means the REIT and the Persons set forth in Schedule 1.1(b) and
any other Person that hereafter executes and delivers the Guaranty or a separate
guaranty in substantially the form of the Guaranty.
Guaranty means the Guaranty dated as of the date hereof executed and
delivered by the Guarantors, together with any joinders thereto and any other
guaranty executed by a Loan Party, in each case in form and substance
satisfactory to the Administrative Agent.
Hazardous Substances means (a) any petroleum or petroleum products,
radioactive materials, asbestos in any form that is or could become friable,
urea formaldehyde foam insulation, dielectric fluid containing levels of
polychlorinated biphenyls, radon gas and mold; (b) any chemicals, materials,
pollutant or substances defined as or included in the definition of "hazardous
substances", "hazardous waste", "hazardous materials", "extremely hazardous
substances", "restricted hazardous waste", "toxic substances", "toxic
pollutants", "contaminants", "pollutants" or words of similar import, under any
applicable Environmental Law; and (c) any other chemical, material or substance,
the exposure to, or release of which is prohibited, limited or regulated by any
governmental authority or for which any duty or standard of care is imposed
pursuant to, any Environmental Law.
Hedging Agreement means any interest rate, currency or commodity swap
agreement, cap agreement or collar agreement, and any other agreement or
arrangement designed to protect a Person against fluctuations in interest rates,
currency exchange rates or commodity prices.
Hedging Obligation means, with respect to any Person, any liability of
such Person under any Hedging Agreement. The amount of any Person's obligation
in respect of any Hedging Obligation shall be deemed to be the incremental
obligation that would be reflected in the financial statements of such Person in
accordance with GAAP.
High Point Property means the property identified on Schedule 1.1 as the
High Point Property.
Indemnified Liabilities - see Section 15.16.
Interest Expense means for any period the consolidated interest expense of
the REIT, the Company and its Subsidiaries for such period (including all
imputed interest on Capital Leases).
Interest Period means, as to any LIBOR Loan, the period commencing on the
date such Loan is borrowed or continued as, or converted into, a LIBOR Loan and
ending on the date one, two, three, six or nine months thereafter as selected by
the Company pursuant to Section 2.2.2 or 2.2.3, as the case may be; provided
that:
11
(a) if any Interest Period would otherwise end on a day that is not
a Business Day, such Interest Period shall be extended to the following
Business Day unless the result of such extension would be to carry such
Interest Period into another calendar month, in which event such Interest
Period shall end on the preceding Business Day;
(b) any Interest Period that begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period shall end on the last Business Day of the calendar month
at the end of such Interest Period; and
(c) the Company may not select any Interest Period for a Revolving
Loan which would extend beyond the scheduled Termination Date.
Investment means, with respect to any Person, any investment in another
Person, whether by acquisition of any debt or Capital Security, by making any
loan or advance, by becoming obligated with respect to a Contingent Liability in
respect of obligations of such other Person (other than travel and similar
advances to employees in the ordinary course of business) or by making an
Acquisition.
Issuing Lender means Standard Federal, in its capacity as the issuer of
Letters of Credit hereunder, or any Affiliate of Standard Federal that may from
time to time issue Letters of Credit, and their successors and assigns in such
capacity.
L/C Application means, with respect to any request for the issuance of a
Letter of Credit, a letter of credit application in the form being used by the
Issuing Lender at the time of such request for the type of letter of credit
requested.
L/C Fee Rate - see the definition of Applicable Margin.
Lender - see the Preamble. References to the "Lenders" shall include the
Issuing Lender; for purposes of clarification only, to the extent that Standard
Federal (or any successor Issuing Lender) may have any rights or obligations in
addition to those of the other Lenders due to its status as Issuing Lender, its
status as such will be specifically referenced. In addition to the foregoing,
for the purpose of identifying the Persons entitled to share in the Collateral
and the proceeds thereof under, and in accordance with the provisions of, this
Agreement and the Collateral Documents, the term "Lender" shall include
Affiliates of a Lender providing a Bank Product.
Lender Party - see Section 15.16.
Letter of Credit - see Section 2.1.2.
LIBOR Loan means any Loan which bears interest at a rate determined by
reference to the LIBOR Rate.
LIBOR Margin - see the definition of Applicable Margin.
12
LIBOR Office means with respect to any Lender the office or offices of
such Lender which shall be making or maintaining the LIBOR Loans of such Lender
hereunder. A LIBOR Office of any Lender may be, at the option of such Lender,
either a domestic or foreign office.
LIBOR Rate means a rate of interest equal to (a) the per annum rate of
interest at which United States dollar deposits in an amount comparable to the
amount of the relevant LIBOR Loan and for a period equal to the relevant
Interest Period are offered in the London Interbank Eurodollar market at 11:00
A.M. (London time) two (2) Business Days prior to the commencement of such
Interest Period (or three (3) Business Days prior to the commencement of such
Interest Period if banks in London, England were not open and dealing in
offshore United States dollars on such second preceding Business Day), as
displayed in the Bloomberg Financial Markets system (or other authoritative
source selected by the Administrative Agent in its sole discretion) or, if the
Bloomberg Financial Markets system or another authoritative source is not
available, as the LIBOR Rate is otherwise determined by the Administrative Agent
in its sole and absolute discretion, divided by (b) a number determined by
subtracting from 1.00 the then stated maximum reserve percentage for determining
reserves to be maintained by member banks of the Federal Reserve System for
Eurocurrency funding or liabilities as defined in Regulation D (or any successor
category of liabilities under Regulation D), such rate to remain fixed for such
Interest Period. The Administrative Agent's determination of the LIBOR Rate
shall be conclusive, absent manifest error.
Lien means, with respect to any Person, any interest granted by such
Person in any real or personal property, asset or other right owned or being
purchased or acquired by such Person (including an interest in respect of a
Capital Lease) which secures payment or performance of any obligation and shall
include any mortgage, lien, encumbrance, title retention lien, charge or other
security interest of any kind, whether arising by contract, as a matter of law,
by judicial process or otherwise.
Loan or Loans means, as the context may require, Revolving Loans and/or
Swing Line Loans.
Loan Documents means this Agreement, the Notes, the Letters of Credit, the
Master Letter of Credit Agreement, the L/C Applications, the Agent Fee Letter,
the Guaranty, the Collateral Documents and all documents, instruments and
agreements delivered in connection with the foregoing.
Loan Party means the REIT, the Company, the Guarantors, and each
Subsidiary or Affiliate of the Company that either owns any of the properties in
the Borrowing Base Pool from time to time and/or controls the management and
financial decisions with regard to any such property.
Major Agreement means each of the agreements and other documents listed on
Schedule 1.1(d).
Mandatory Prepayment Event - see Section 6.2.2(a).
13
Manufactured Home means a manufactured home as defined in section 603(6)
of the national manufactured housing construction and safety standards act of
1974, 42 U.S.C. 5402(6), which is used as a residence, but shall not include any
recreational vehicle.
Manufactured Home Community means a property meeting the requirements of
the definition of Borrowing Base Pool and the pads on which property consist of
at least 50% Manufactured Home pads.
Margin Stock means any "margin stock" as defined in Regulation U.
Master Letter of Credit Agreement means, at any time, with respect to the
issuance of Letters of Credit, a master letter of credit agreement or
reimbursement agreement in the form, if any, being used by the Issuing Lender at
such time.
Material Adverse Effect means (a) a material adverse change in, or a
material adverse effect upon, the financial condition, operations, assets,
business or properties of the Loan Parties taken as a whole, (b) a material
impairment of the ability of any Loan Party to perform any of the Obligations
under any Loan Document or (c) a material adverse effect upon the legality,
validity, binding effect or enforceability against any Loan Party of any Loan
Document.
Multiemployer Pension Plan means a multiemployer plan, as defined in
Section 4001(a)(3) of ERISA, to which the Company or any other member of the
Controlled Group has liability or has a reasonable expectation of liability.
Net Operating Income means, with respect to any property, the gross income
derived from the operation of such property, including any rent loss or business
interruption insurance proceeds, water and sewer charges, recreational vehicle
storage charges, laundry, parking or other vending or concession income, and
other miscellaneous ancillary income of the property, less operating expenses of
the property, all in accordance with accounting principles now in effect, as set
forth in the operating statements for the property. Net Operating Income will be
adjusted to give pro forma effect to assets acquired during the calendar year.
Non-U.S. Participant - see Section 7.6(d).
Non-Use Fee - see Section 5.1.
Note means a promissory note substantially in the form of Exhibit A.
Notice of Borrowing - see Section 2.2.2.
Notice of Conversion/Continuation - see Section 2.2.3.
Obligations means all monetary obligations (including post-petition
interest, allowed or not) or otherwise) of any Loan Party under this Agreement
and any other Loan Document including Attorney Costs and any reimbursement
obligations of each Loan Party in respect of Letters of Credit and surety bonds,
all Hedging Obligations permitted hereunder which are owed to any Lender or its
Affiliate, and all Bank Products Obligations, all in each case howsoever
14
created, arising or evidenced, whether direct or indirect, absolute or
contingent, now or hereafter existing, or due or to become due.
OFAC - see Section 10.4.
Operating Lease means any lease of (or other agreement conveying the right
to use) any real or personal property by any Loan Party, as lessee, other than
any Capital Lease.
Owned Manufactured Homes means Manufactured Homes owned by the REIT, the
Company or its Subsidiaries, or Sun Home Services, Inc. free and clear of any
indebtedness and located within Manufactured Home Communities owned by the REIT,
the Company or their Subsidiaries.
Participant - see Section 15.6.2.
PBGC means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
Pension Plan means a "pension plan", as such term is defined in Section
3(2) of ERISA, which is subject to Title IV of ERISA or the minimum funding
standards of ERISA (other than a Multiemployer Pension Plan), and as to which
the Company or any member of the Controlled Group has liability or a reasonable
expectation of liability, including any liability by reason of having been a
substantial employer within the meaning of Section 4063 of ERISA at any time
during the preceding five years, or by reason of being deemed to be a
contributing sponsor under Section 4069 of ERISA.
Permanent Loan Estimate means an amount equal to the pro forma loan amount
achieved by:
(i) Dividing Adjusted NOI by a Debt Service Coverage Factor of 1.25x
("Available NOI");
(ii) Then dividing the Available NOI by the Mortgage Constant derived by
assuming a 30-year amortization factor and an interest rate equal to
the greater of (a) the on the run 10-year Treasury Bond Rate as
displayed in the Bloomberg Financial Markets system plus 1.50%, or
(b) 7.00%;
(iii) Then subtracting the then outstanding amount of the total GMAC Pool
Debt and the Sea Air Property Debt.
Permitted Lien means a Lien expressly permitted hereunder pursuant to
Section 11.2.
Person means any natural person, corporation, partnership, trust, limited
liability company, association, governmental authority or unit, or any other
entity, whether acting in an individual, fiduciary or other capacity.
Prime Rate means, for any day, the rate of interest in effect for such day
as publicly announced from time to time by the Administrative Agent as its prime
rate (whether or not such
15
rate is actually charged by the Administrative Agent), which is not intended to
be the Administrative Agent's lowest or most favorable rate of interest at any
one time. Any change in the Prime Rate announced by the Administrative Agent
shall take effect at the opening of business on the day specified in the public
announcement of such change; provided that the Administrative Agent shall not be
obligated to give notice of any change in the Prime Rate.
Pro Rata Share means with respect to a Lender's obligation to make
Revolving Loans, participate in Letters of Credit, reimburse the Issuing Lender,
receive payments of principal, interest, fees, costs, and expenses with respect
thereto and as to all other matters as to a particular Lender, (x) prior to the
Revolving Commitment being terminated or reduced to zero, the percentage
obtained by dividing (i) such Lender's Revolving Commitment, by (ii) the
aggregate Revolving Commitment of all Lenders and (y) from and after the time
the Revolving Commitment has been terminated or reduced to zero, the percentage
obtained by dividing (i) the aggregate unpaid principal amount of such Lender's
Revolving Outstandings (after settlement and repayment of all Swing Line Loans
by the Lenders) by (ii) the aggregate unpaid principal amount of all Revolving
Outstandings.
Recreational Vehicle Community means a property meeting the requirements
of the definition of Borrowing Base Pool and the pads on which property consist
of less than 50% Manufactured Home pads.
Refunded Swing Line Loan - see Section 2.2.4(c).
Regulation D means Regulation D of the FRB.
Regulation U means Regulation U of the FRB.
REIT - see the Preamble.
Replacement Lender - see Section 8.7(b).
Reportable Event means a reportable event as defined in Section 4043 of
ERISA and the regulations issued thereunder as to which the PBGC has not waived
the notification requirement of Section 4043(a), or the failure of a Pension
Plan to meet the minimum funding standards of Section 412 of the Code (without
regard to whether the Pension Plan is a plan described in Section 4021(a)(2) of
ERISA) or under Section 302 of ERISA.
Required Lenders means, at any time, Lenders whose Pro Rata Shares exceed
66?% as determined pursuant to the definition of "Pro Rata Share".
Revolving Commitment means $90,000,000.00, as reduced from time to time
pursuant to Section 6.1 or as increased from time to time pursuant to Section
6.5.
Revolving Loan - see Section 2.1.1.
Revolving Loan Availability means the lesser of (i) the Revolving
Commitment and (ii) the Borrowing Base.
16
Revolving Outstandings means, at any time, the sum of (a) the aggregate
principal amount of all outstanding Revolving Loans, plus (b) the Stated Amount
of all Letters of Credit.
Sea Air Property means the property identified on Schedule 1.1(a) as the
Sea Air Property.
Sea Air Property Debt means the indebtedness encumbering the Sea Air
Property as identified on Schedule 1.1(c).
SEC means the Securities and Exchange Commission or any other governmental
authority succeeding to any of the principal functions thereof.
Senior Debt means all Debt of the REIT, the Company and its Subsidiaries
other than Subordinated Debt.
Senior Officer means, with respect to any Loan Party, any of the chief
executive officer, the chief financial officer, the chief operating officer, the
treasurer or the controller of such Loan Party.
Standard Federal - see the Preamble.
Stated Amount means, with respect to any Letter of Credit at any date of
determination, (a) the maximum aggregate amount available for drawing thereunder
under any and all circumstances plus (b) the aggregate amount of all
unreimbursed payments and disbursements under such Letter of Credit.
Subordinated Debt means any unsecured Debt of the Company which has
subordination terms, covenants, pricing and other terms which have been approved
in writing by the Required Lenders.
Subordinated Debt Documents means all documents and instruments relating
to the Subordinated Debt and all amendments and modifications thereof approved
by the Administrative Agent.
Subordination Agreements means all subordination agreements executed by a
holder of Subordinated Debt in favor of the Administrative Agent and the Lenders
from time to time after the Effective Date.
Subsidiary means, with respect to any Person, a corporation, partnership,
limited liability company or other entity of which such Person owns, directly or
indirectly, such number of outstanding Capital Securities as have more than 50%
of the ordinary voting power for the election of directors or other managers of
such corporation, partnership, limited liability company or other entity. Unless
the context otherwise requires, each reference to Subsidiaries herein shall be a
reference to Subsidiaries of the Company.
SunChamp Portfolio means the properties identified on Schedule 1.1(a) as
the SunChamp Portfolio.
17
Swing Line Availability means the lesser of (a) the Swing Line Commitment
Amount and (b) Revolving Loan Availability (less Revolving Outstandings at such
time).
Swing Line Commitment Amount means $5,000,000.00, as reduced from time to
time pursuant to Section 6.1, which commitment constitutes a subfacility of the
Revolving Commitment of the Swing Line Lender.
Swing Line Lender means Standard Federal.
Swing Line Loan - see Section 2.2.4.
Tangible Net Worth means consolidated shareholder equity of the REIT plus
add-back of minority interest in the Company (and not minority interests in any
other entity) and accumulated depreciation minus all intangible assets (other
than any purchase price allocation assigned to in place leases), all determined
in accordance with GAAP.
Taxes means any and all present and future taxes, duties, levies, imposts,
deductions, assessments, charges or withholdings, and any and all liabilities
(including interest and penalties and other additions to taxes) with respect to
the foregoing, but excluding Excluded Taxes.
Termination Date means (a) that date which is three (3) years after the
Effective Date or (b) if Company has timely exercised its option to extend the
Termination Date pursuant to Section 6.6, to that date that is four (4) years
after the Effective Date or (c) such earlier date on which the Commitments
terminate pursuant to Section 6 or 13.
Termination Event means, with respect to a Pension Plan that is subject to
Title IV of ERISA, (a) a Reportable Event, (b) the withdrawal of Company or any
other member of the Controlled Group from such Pension Plan during a plan year
in which Company or any other member of the Controlled Group was a "substantial
employer" as defined in Section 4001(a)(2) of ERISA, (c) the termination of such
Pension Plan, the filing of a notice of intent to terminate the Pension Plan or
the treatment of an amendment of such Pension Plan as a termination under
Section 4041 of ERISA, (d) the institution by the PBGC of proceedings to
terminate such Pension Plan or (e) any event or condition that constitutes
grounds under Section 4042 of ERISA for the termination of, or appointment of a
trustee to administer, such Pension Plan.
Total Leverage Ratio means Total Liabilities divided by the Gross Asset
Value.
Total Liabilities means all GAAP indebtedness of the Company, the REIT and
their consolidated Subsidiaries on a consolidated basis, including recourse and
non-recourse mortgage debt, letters of credit, purchase obligations, forward
equity sales, repurchase obligations, unsecured debt accounts payable, lease
obligations (including ground leases, to be classified as capital leases on the
balance sheet of the Company, the REIT and their consolidated Subsidiaries),
guarantees of indebtedness, the ownership share (the greater of (a) economic or
(b) nominal share) of the Company, the REIT and their consolidated Subsidiaries
of non-recourse debt in unconsolidated affiliates or debt that is no recourse to
the Company, the REIT and their consolidated Subsidiaries, and subordinated debt
and unfunded obligations of the Company, the REIT and their consolidated
Subsidiaries, provided, however, that "Total Liabilities" shall not
18
include dividends declared by the Company which are permitted, but not yet paid,
or Preferred Operating Partnership Units and Preferred Stock that mature after
the Termination Date.
Total Plan Liability means, at any time, the present value of all vested
and unvested accrued benefits under all Pension Plans, determined as of the then
most recent valuation date for each Pension Plan, using the actuarial
assumptions and methods used in the then most recent actuarial valuation reports
for the Pension Plan.
Transitional Pads means unleased pads at Developed Properties included in
the Borrowing Base Pool.
Transitional Pads Value means an amount equal to 90% of the lesser of (a)
the Company's cost basis in the Transitional Pads as reported quarterly by the
Company, or (b) $20,000 per pad.
type - see Section 2.2.1.
Unencumbered Adjusted NOI means the Net Operating Income from the
Unencumbered Pool for the most recently ended Computation Period less, in
respect of each Developed Property: (a) a capital expenditure reserve equal to
$50 per pad; and (b) the greater of actual management fees or an imputed
management fee equal to 4% of Base Rent Revenues.
Unencumbered Pool means (A) Manufactured Home Communities and Recreational
Vehicle Communities that are not securing any Debt and are owned in fee simple
or ground leased under ground leases approved by the Administrative Agent in its
reasonable discretion, and which either (i) are wholly-owned by the Company, the
REIT and/or their Subsidiaries, or (ii) are not wholly-owned by the Company, the
REIT and/or their Subsidiaries, but are directly or indirectly majority-owned by
the Company or the REIT, the Company or the REIT directly or indirectly acts as
the general partner or manager of such entity and controls all management and
financial decisions; and such Communities are consolidated on the Company's
Financial Statements, (B) the Sunchamp Portfolio, and (C) the High Point
Property.
Unfunded Liability means the amount (if any) by which the present value of
all vested and unvested accrued benefits under all Pension Plans exceeds the
fair market value of all assets allocable to those benefits, all determined as
of the then most recent valuation date for each Pension Plan, using the
actuarial assumptions and methods used in the then most recent actuarial
valuation reports for the Pension Plan.
Unmatured Event of Default means any event that, if it continues uncured,
will, with lapse of time or notice or both, constitute an Event of Default.
Unsecured Debt Service means, for any Computation Period, Debt Service in
respect of unsecured Debt.
Wholly-Owned Subsidiary means, a Subsidiary all of the Capital Securities
of which (except directors' qualifying Capital Securities) are at the time
directly or indirectly owned by the Company, the REIT and/or another
Wholly-Owned Subsidiary of such Person.
19
Withholding Certificate - see Section 7.6(d).
1.2 Other Interpretive Provisions. (a) The meanings of defined terms are
equally applicable to the singular and plural forms of the defined terms.
(b) Section, Annex, Schedule and Exhibit references are to this
Agreement unless otherwise specified.
(c) The term "including" is not limiting and means "including
without limitation."
(d) In the computation of periods of time from a specified date to a
later specified date, the word "from" means "from and including"; the
words "to" and "until" each mean "to but excluding", and the word
"through" means "to and including."
(e) Unless otherwise expressly provided herein, (i) references to
agreements (including this Agreement and the other Loan Documents) and
other contractual instruments shall be deemed to include all subsequent
amendments, restatements, supplements and other modifications thereto, but
only to the extent such amendments, restatements, supplements and other
modifications are not prohibited by the terms of any Loan Document, and
(ii) references to any statute or regulation shall be construed as
including all statutory and regulatory provisions amending, replacing,
supplementing or interpreting such statute or regulation.
(f) This Agreement and the other Loan Documents may use several
different limitations, tests or measurements to regulate the same or
similar matters. All such limitations, tests and measurements are
cumulative and each shall be performed in accordance with its terms.
(g) This Agreement and the other Loan Documents are the result of
negotiations among and have been reviewed by counsel to the Administrative
Agent, the Company, the Lenders and the other parties thereto and are the
products of all parties. Accordingly, they shall not be construed against
the Administrative Agent or the Lenders merely because of the
Administrative Agent's or Lenders' involvement in their preparation.
SECTION 2. COMMITMENTS OF THE LENDERS; BORROWING, CONVERSION AND LETTER OF
CREDIT PROCEDURES.
2.1 Commitments. On and subject to the terms and conditions of this
Agreement, each of the Lenders, severally and for itself alone, agrees to make
loans to, and to issue or participate in letters of credit for the account of,
the Company as follows:
2.1.1 Revolving Loan Commitment. Each Lender agrees to make loans on
a revolving basis ("Revolving Loans") from time to time until the Termination
Date in such Lender's Pro Rata Share of such aggregate amounts as the Company
may request from all Lenders; provided that the Revolving Outstandings will not
at any time exceed Revolving Loan Availability (less the amount of any Swing
Line Loans outstanding at such time).
20
2.1.2 L/C Commitment. Subject to Section 2.3.1, the Issuing Lender
agrees to issue letters of credit, in each case containing such terms and
conditions as are permitted by this Agreement and are reasonably satisfactory to
the Issuing Lender (each, a "Letter of Credit"), at the request of and for the
account of the Company from time to time before the scheduled Termination Date
and, as more fully set forth in Section 2.3.2, each Lender agrees to purchase a
participation in each such Letter of Credit; provided that (a) the aggregate
Stated Amount of all Letters of Credit shall not at any time exceed
$15,000,000.00 and (b) the Revolving Outstandings shall not at any time exceed
Revolving Loan Availability (less the amount of any Swing Line Loans outstanding
at such time).
2.2 Loan Procedures.
2.2.1 Various Types of Loans. Each Revolving Loan shall be divided
into tranches which are, either a Base Rate Loan or a LIBOR Loan (each a "type"
of Loan), as the Company shall specify in the related notice of borrowing or
conversion pursuant to Section 2.2.2 or 2.2.3. LIBOR Loans having the same
Interest Period are sometimes called a "Group" or collectively "Groups". Base
Rate Loans and LIBOR Loans may be outstanding at the same time, provided that
not more than six (6) different Groups of LIBOR Loans shall be outstanding at
any one time. All borrowings, conversions and repayments of Revolving Loans
shall be effected so that each Lender will have a ratable share (according to
its Pro Rata Share) of all types and Groups of Loans.
2.2.2 Borrowing Procedures. The Company shall give written notice
(each such written notice, a "Notice of Borrowing") substantially in the form of
Exhibit E or telephonic notice (followed immediately by a Notice of Borrowing)
to the Administrative Agent of each proposed borrowing not later than (a) in the
case of a Base Rate borrowing, 1:00 P.M., Detroit time, on the proposed date of
such borrowing, and (b) in the case of a LIBOR borrowing, 11:00 A.M., Detroit
time, at least three Business Days prior to the proposed date of such borrowing.
Each such notice shall be effective upon receipt by the Administrative Agent,
shall be irrevocable, and shall specify the date, amount and type of borrowing
and, in the case of a LIBOR borrowing, the initial Interest Period therefor.
Promptly upon receipt of such notice, the Administrative Agent shall advise each
Lender thereof. Not later than 3:00 P.M., Detroit time, on the date of a
proposed borrowing, each Lender shall provide the Administrative Agent at the
office specified by the Administrative Agent with immediately available funds
covering such Lender's Pro Rata Share of such borrowing and, so long as the
Administrative Agent has not received written notice that the conditions
precedent set forth in Section 11 with respect to such borrowing have not been
satisfied, the Administrative Agent shall pay over the funds received by the
Administrative Agent to the Company on the requested borrowing date. Each
borrowing shall be on a Business Day. Each Base Rate borrowing shall be in an
aggregate amount of at least $1,000,000.00 and an integral multiple of
$100,000.00, and each LIBOR borrowing shall be in an aggregate amount of at
least $1,000,000.00 and an integral multiple of at least $100,000.00.
2.2.3 Conversion and Continuation Procedures. (a) Subject to Section
2.2.1, the Company may, upon irrevocable written notice to the Administrative
Agent in accordance with clause (b) below:
21
(A) elect, as of any Business Day, to convert any Loans (or
any part thereof in an aggregate amount not less than $1,000,000.00 or a
higher integral multiple of $100,000.00) into Loans of the other type; or
(B) elect, as of the last day of the applicable Interest
Period, to continue any LIBOR Loans having Interest Periods expiring on
such day (or any part thereof in an aggregate amount not less than
$1,000,000.00 or a higher integral multiple of $100,000.00) for a new
Interest Period;
provided that after giving effect to any prepayment, conversion or continuation,
the aggregate principal amount of each Group of LIBOR Loans shall be at least
$1,000,000.00 or a higher integral multiple of $100,000.00.
(b) The Company shall give written notice (each such written notice,
a "Notice of Conversion/Continuation") substantially in the form of
Exhibit F or telephonic notice (followed immediately by a Notice of
Conversion/Continuation) to the Administrative Agent of each proposed
conversion or continuation not later than (i) in the case of conversion
into Base Rate Loans, 1:00 P.M., Detroit time, on the proposed date of
such conversion and (ii) in the case of conversion into or continuation of
LIBOR Loans, 11:00 A.M., Detroit time, at least three Business Days prior
to the proposed date of such conversion or continuation, specifying in
each case:
(A) the proposed date of conversion or continuation;
(B) the aggregate amount of Loans to be converted or
continued;
(C) the type of Loans resulting from the proposed conversion
or continuation; and
(D) in the case of conversion into, or continuation of, LIBOR
Loans, the duration of the requested Interest Period therefor.
(c) If upon the expiration of any Interest Period applicable to
LIBOR Loans, the Company has failed to select timely a new Interest Period
to be applicable to such LIBOR Loans, the Company shall be deemed to have
elected to convert such LIBOR Loans into Base Rate Loans effective on the
last day of such Interest Period.
(d) The Administrative Agent will promptly notify each Lender of its
receipt of a notice of conversion or continuation pursuant to this Section
2.2.3 or, if no timely notice is provided by the Company, of the details
of any automatic conversion.
(e) Any conversion of a LIBOR Loan on a day other than the last day
of an Interest Period therefor shall be subject to Section 8.4.
2.2.4 Swing Line Facility.
(a) The Administrative Agent shall notify the Swing Line Lender upon
the Administrative Agent's receipt of any Notice of Borrowing. Subject to
the terms and
22
conditions hereof, the Swing Line Lender may, in its sole discretion, make
available from time to time until the Termination Date advances (each, a
"Swing Line Loan") in accordance with any such notice, notwithstanding
that after making a requested Swing Line Loan, the sum of the Swing Line
Lender's Pro Rata Share of the Revolving Outstanding and all outstanding
Swing Line Loans, may exceed the Swing Line Lender's Pro Rata Share of the
Revolving Commitment. The provisions of this Section 2.2.4 shall not
relieve Lenders of their obligations to make Revolving Loans under Section
2.1.1; provided that if the Swing Line Lender makes a Swing Line Loan
pursuant to any such notice, such Swing Line Loan shall be in lieu of any
Revolving Loan that otherwise may be made by the Lenders pursuant to such
notice. The aggregate amount of Swing Line Loans outstanding shall not
exceed at any time Swing Line Availability. Until the Termination Date,
the Company may from time to time borrow, repay and reborrow under this
Section 2.2.4. Each Swing Line Loan shall be made pursuant to a Notice of
Borrowing delivered by the Company to the Administrative Agent in
accordance with Section 2.2.2. Any such notice must be given no later than
2:00 P.M., Detroit time, on the Business Day of the proposed Swing Line
Loan. Unless the Swing Line Lender has received at least one Business
Day's prior written notice from the Required Lenders instructing it not to
make a Swing Line Loan, the Swing Line Lender shall, notwithstanding the
failure of any condition precedent set forth in Section 12.2, be entitled
to fund that Swing Line Loan, and to have such Lender make Revolving Loans
in accordance with Section 2.2.4(c) or purchase participating interests in
accordance with Section 2.2.4(d). Notwithstanding any other provision of
this Agreement or the other Loan Documents, each Swing Line Loan shall
constitute a Base Rate Loan. The Company shall repay the aggregate
outstanding principal amount of each Swing Line Loan upon demand therefor
by the Administrative Agent.
(b) The entire unpaid balance of each Swing Line Loan and all other
noncontingent Obligations shall be immediately due and payable in full in
immediately available funds on the Termination Date if not sooner paid in
full.
(c) The Swing Line Lender, at any time and from time to time no less
frequently than once weekly, shall on behalf of the Company (and the
Company hereby irrevocably authorizes the Swing Line Lender to so act on
its behalf) request each Lender (including the Swing Line Lender) to make
a Revolving Loan to the Company (which shall be a Base Rate Loan) in an
amount equal to that Lender's Pro Rata Share of the principal amount of
all Swing Line Loans (the "Refunded Swing Line Loan") outstanding on the
date such notice is given. Unless any of the events described in Section
13.1.4 has occurred (in which event the procedures of Section 2.2.4(d)
shall apply) and regardless of whether the conditions precedent set forth
in this Agreement to the making of a Revolving Loan are then satisfied,
each Lender shall disburse directly to the Administrative Agent, its Pro
Rata Share on behalf of the Swing Line Lender, prior to 2:00 P.M., Detroit
time, in immediately available funds on the date that notice is given
(provided that such notice is given by 12:00 p.m., Detroit time, on such
date). The proceeds of those Revolving Loans shall be immediately paid to
the Swing Line Lender and applied to repay the Refunded Swing Line Loan.
23
(d) If, prior to refunding a Swing Line Loan with a Revolving Loan
pursuant to Section 2.2.4(c), one of the events described in Section
13.1.4 has occurred, then, subject to the provisions of Section 2.2.4(e)
below, each Lender shall, on the date such Revolving Loan was to have been
made for the benefit of the Company, purchase from the Swing Line Lender
an undivided participation interest in the Swing Line Loan in an amount
equal to its Pro Rata Share of such Swing Line Loan. Upon request, each
Lender shall promptly transfer to the Swing Line Lender, in immediately
available funds, the amount of its participation interest.
(e) Each Lender's obligation to make Revolving Loans in accordance
with Section 2.2.4(c) and to purchase participation interests in
accordance with Section 2.2.4(d) shall be absolute and unconditional and
shall not be affected by any circumstance, including (i) any setoff,
counterclaim, recoupment, defense or other right that such Lender may have
against the Swing Line Lender, the Company or any other Person for any
reason whatsoever; (ii) the occurrence or continuance of any Unmatured
Event of Default or Event of Default; (iii) any inability of the Company
to satisfy the conditions precedent to borrowing set forth in this
Agreement at any time or (iv) any other circumstance, happening or event
whatsoever, whether or not similar to any of the foregoing. If and to the
extent any Lender shall not have made such amount available to the
Administrative Agent or the Swing Line Lender, as applicable, by 2:00
P.M., Detroit time, the amount required pursuant to Sections 2.2.4(c) or
2.2.4(d), as the case may be, on the Business Day on which such Lender
receives notice from the Administrative Agent of such payment or
disbursement (it being understood that any such notice received after
noon, Detroit time, on any Business Day shall be deemed to have been
received on the next following Business Day), such Lender agrees to pay
interest on such amount to the Administrative Agent for the Swing Line
Lender's account forthwith on demand, for each day from the date such
amount was to have been delivered to the Administrative Agent to the date
such amount is paid, at a rate per annum equal to (a) for the first three
days after demand, the Federal Funds Rate from time to time in effect and
(b) thereafter, the Base Rate from time to time in effect.
2.3 Letter of Credit Procedures.
2.3.1 L/C Applications. The Company shall execute and deliver to the
Issuing Lender the Master Letter of Credit Agreement from time to time in
effect. The Company shall give notice to the Administrative Agent and the
Issuing Lender of the proposed issuance of each Letter of Credit on a Business
Day which is at least three Business Days (or such lesser number of days as the
Administrative Agent and the Issuing Lender shall agree in any particular
instance in their sole discretion) prior to the proposed date of issuance of
such Letter of Credit. Each such notice shall be accompanied by an L/C
Application, duly executed by the Company and in all respects satisfactory to
the Administrative Agent and the Issuing Lender, together with such other
documentation as the Administrative Agent or the Issuing Lender may request in
support thereof, it being understood that each L/C Application shall specify,
among other things, the date on which the proposed Letter of Credit is to be
issued, the expiration date of such Letter of Credit (which shall not be later
than the scheduled Termination Date (unless such Letter of Credit is Cash
Collateralized)) and whether such Letter of Credit is to be transferable in
whole or in part. Any Letter of Credit outstanding after the scheduled
Termination Date which is Cash
24
Collateralized for the benefit of the Issuing Lender shall be the sole
responsibility of the Issuing Lender. So long as the Issuing Lender has not
received written notice that the conditions precedent set forth in Section 12
with respect to the issuance of such Letter of Credit have not been satisfied,
the Issuing Lender shall issue such Letter of Credit on the requested issuance
date. The Issuing Lender shall promptly advise the Administrative Agent of the
issuance of each Letter of Credit and of any amendment thereto, extension
thereof or event or circumstance changing the amount available for drawing
thereunder. In the event of any inconsistency between the terms of the Master
Letter of Credit Agreement, any L/C Application and the terms of this Agreement,
the terms of this Agreement shall control.
2.3.2 Participations in Letters of Credit. Concurrently with the
issuance of each Letter of Credit, the Issuing Lender shall be deemed to have
sold and transferred to each Lender with a Revolving Loan Commitment, and each
such Lender shall be deemed irrevocably and unconditionally to have purchased
and received from the Issuing Lender, without recourse or warranty, an undivided
interest and participation, to the extent of such Lender's Pro Rata Share, in
such Letter of Credit and the Company's reimbursement obligations with respect
thereto. If the Company does not pay any reimbursement obligation when due, the
Company shall be deemed to have immediately requested that the Lenders make a
Revolving Loan which is a Base Rate Loan in a principal amount equal to such
reimbursement obligations. The Administrative Agent shall promptly notify such
Lenders of such deemed request and, without the necessity of compliance with the
requirements of Section 2.2.2, 12.2 or otherwise such Lender shall make
available to the Administrative Agent its Pro Rata Share of such Loan. The
proceeds of such Loan shall be paid over by the Administrative Agent to the
Issuing Lender for the account of the Company in satisfaction of such
reimbursement obligations. For the purposes of this Agreement, the
unparticipated portion of each Letter of Credit shall be deemed to be the
Issuing Lender's "participation" therein. The Issuing Lender hereby agrees, upon
request of the Administrative Agent or any Lender, to deliver to the
Administrative Agent or such Lender a list of all outstanding Letters of Credit
issued by the Issuing Lender, together with such information related thereto as
the Administrative Agent or such Lender may reasonably request.
2.3.3 Reimbursement Obligations. (a) The Company hereby
unconditionally and irrevocably agrees to reimburse the Issuing Lender for each
payment or disbursement made by the Issuing Lender under any Letter of Credit
honoring any demand for payment made by the beneficiary thereunder, in each case
on the date that such payment or disbursement is made; provided that the Company
shall not be precluded from asserting any claim for direct damages suffered by
the Company to the extent caused by the willful misconduct or gross negligence
of the Issuing Lender in determining whether a request presented under any
Letter of Credit issued by it complied with the terms of such Letter of Credit,
or the Issuing Lender's failure to pay under any Letter of Credit issued by it
after the presentation to it of a request strictly complying with the terms of
such Letter of Credit.. Any amount not reimbursed on the date of such payment or
disbursement shall bear interest from the date of such payment or disbursement
to the date that the Issuing Lender is reimbursed by the Company therefor,
payable on demand, at a rate per annum equal to the Base Rate from time to time
in effect plus the Base Rate Margin from time to time in effect plus, beginning
on the third Business Day after receipt of notice from the Issuing Lender of
such payment or disbursement, 3%. The Issuing Lender shall notify the Company
and the Administrative Agent whenever any demand for payment is made under any
Letter of Credit by the beneficiary thereunder; provided that the failure of the
Issuing Lender to
25
so notify the Company or the Administrative Agent shall not affect the rights of
the Issuing Lender or the Lenders in any manner whatsoever.
(b) The Company's reimbursement obligations hereunder shall be
irrevocable and unconditional under all circumstances, including (a) any
lack of validity or enforceability of any Letter of Credit, this Agreement
or any other Loan Document, (b) the existence of any claim, set-off,
defense or other right which any Loan Party 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, the Issuing Lender, any Lender or any other Person,
whether in connection with any Letter of Credit, this Agreement, any other
Loan Document, the transactions contemplated herein or any unrelated
transactions (including any underlying transaction between any Loan Party
and the beneficiary named in any Letter of Credit), (c) the validity,
sufficiency or genuineness of any document which the Issuing Lender has
determined complies on its face with the terms of the applicable Letter of
Credit, even if such document should later prove to have been forged,
fraudulent, invalid or insufficient in any respect or any statement
therein shall have been untrue or inaccurate in any respect, or (d) the
surrender or impairment of any security for the performance or observance
of any of the terms hereof. Without limiting the foregoing, no action or
omission whatsoever by the Administrative Agent or any Lender (excluding
any Lender in its capacity as the Issuing Lender) under or in connection
with any Letter of Credit or any related matters shall result in any
liability of the Administrative Agent or any Lender to the Company, or
relieve the Company of any of its obligations hereunder to any such
Person.
2.3.4 Funding by Lenders to Issuing Lender. If the Issuing Lender
makes any payment or disbursement under any Letter of Credit and (a) the Company
has not reimbursed the Issuing Lender in full for such payment or disbursement
by 11:00 A.M., Detroit time, on the date of such payment or disbursement, (b) a
Revolving Loan may not be made in accordance with Section 2.3.2 or (c) any
reimbursement received by the Issuing Lender from the Company is or must be
returned or rescinded upon or during any bankruptcy or reorganization of the
Company or otherwise, each other Lender with a Revolving Loan Commitment shall
be obligated to pay to the Administrative Agent for the account of the Issuing
Lender, in full or partial payment of the purchase price of its participation in
such Letter of Credit, its Pro Rata Share of such payment or disbursement (but
no such payment shall diminish the obligations of the Company under Section
2.3.3), and, upon notice from the Issuing Lender, the Administrative Agent shall
promptly notify each other Lender thereof. Each other Lender irrevocably and
unconditionally agrees to so pay to the Administrative Agent in immediately
available funds for the Issuing Lender's account the amount of such other
Lender's Pro Rata Share of such payment or disbursement. If and to the extent
any Lender shall not have made such amount available to the Administrative Agent
by 2:00 P.M., Detroit time, on the Business Day on which such Lender receives
notice from the Administrative Agent of such payment or disbursement (it being
understood that any such notice received after noon, Chicago time, on any
Business Day shall be deemed to have been received on the next following
Business Day), such Lender agrees to pay interest on such amount to the
Administrative Agent for the Issuing Lender's account forthwith on demand, for
each day from the date such amount was to have been delivered to the
Administrative Agent to the date such amount is paid, at a rate per annum equal
to (a) for the
26
first three days after demand, the Federal Funds Rate from time to time in
effect and (b) thereafter, the Base Rate from time to time in effect. Any
Lender's failure to make available to the Administrative Agent its Pro Rata
Share of any such payment or disbursement shall not relieve any other Lender of
its obligation hereunder to make available to the Administrative Agent such
other Lender's Pro Rata Share of such payment, but no Lender shall be
responsible for the failure of any other Lender to make available to the
Administrative Agent such other Lender's Pro Rata Share of any such payment or
disbursement.
2.4 Commitments Several. The failure of any Lender to make a requested
Loan on any date shall not relieve any other Lender of its obligation (if any)
to make a Loan on such date, but no Lender shall be responsible for the failure
of any other Lender to make any Loan to be made by such other Lender.
2.5 Certain Conditions. Except as otherwise provided in Section 2.2.4 and
2.3.4 of this Agreement, the Required Lenders may, at their option, by notice to
the Company, during the continuance of an Event of Default or Unmatured Event of
Default, declare that no Loans may be made or LIBOR Loans continued, or Loans
converted into LIBOR Loans; provided that such action may thereafter be
rescinded by the Required Lenders, notwithstanding Section 15.1. The Issuing
Lender may, at its sole option, by notice to the Company, during the continuance
of an Event of Default or Unmatured Event of Default, declare that no Letters of
Credit will be issued, renewed or extended.
2.6 Release of Guarantors. If the Company elects by written notice to the
Administrative Agent to delete a property from the Borrowing Base Pool and the
owner of such property is not the Company or the REIT and such owner does not
own any other properties included in the Borrowing Base, such owner shall be
immediately and without any further action on the part of the Administrative
Agent or the Lenders be deemed released from the Guaranty on the date of such
notice, and upon request by the Company to the Administrative Agent, the
Administrative Agent shall provide evidence of such release to the Company;
provided that no property shall be deleted from the Borrowing Base Pool at the
request of the Company and no Guarantor shall be released or deemed to be
released from its Guaranty, if immediately after giving effect to such deletion
and/or release, (a) an Event of Default or Unmatured Event of Default would
exist or (b) the Revolving Outstandings plus the outstanding amount of the Swing
Line Loan would exceed the Borrowing Base.
SECTION 3. EVIDENCING OF LOANS; SECURITY.
3.1 Notes. The Loans of each Lender shall be evidenced by a Note, with
appropriate insertions, payable to the order of such Lender in a face principal
amount equal to the sum of such Lender's Revolving Loan Commitment.
3.2 Recordkeeping. The Administrative Agent, on behalf of each Lender,
shall record in its records, the date and amount of each Loan made by each
Lender, each repayment or conversion thereof and, in the case of each LIBOR
Loan, the dates on which each Interest Period for such Loan shall begin and end.
The aggregate unpaid principal amount so recorded shall be rebuttably
presumptive evidence of the principal amount of the Loans owing and unpaid. The
failure to so record any such amount or any error in so recording any such
amount shall not,
27
however, limit or otherwise affect the Obligations of the Company hereunder or
under any Note to repay the principal amount of the Loans hereunder, together
with all interest accruing thereon.
3.3 Security for Obligations. As partial security for the Obligations, the
Company shall grant, or cause the Loan Parties to grant, to the Administrative
Agent for the pro-rata benefit of the Lenders, pursuant to documents in form and
substance satisfactory to the Administrative Agent:
(a) a first priority, perfected assignment of all of the promissory
notes, mortgages, assignments and security interests held by any Loan
Party in connection with the existing indebtedness of SunChamp in the
approximate principal amount of $77,518,000.00;
(b) a first priority, perfected assignment of all of the promissory
notes, mortgages, assignments, security interests, options, negative
pledge agreements, collateral assignments of partnership interests and
management agreements held by any Loan Party in connection with the High
Point Property;
(c) a first priority, perfected assignment of all of the promissory
notes, mortgages, assignments, security interests, options, negative
pledge agreements, collateral assignments of partnership interests and
management agreements held by any Loan Party in connection with the Sea
Air Property; and
(d) a negative pledge agreement from each Loan Party which directly
or indirectly owns an interest in any Person that owns title to and/or
ground leases any of the properties in the GMAC Pool.
SECTION 4. INTEREST.
4.1 Interest Rates. The Company promises to pay interest on the unpaid
principal amount of each Loan for the period commencing on the date of such Loan
until such Loan is paid in full as follows:
(a) at all times while such Loan is a Base Rate Loan, at a rate per
annum equal to the sum of the Base Rate from time to time in effect plus
the Base Rate Margin from time to time in effect; and
(b) at all times while such Loan is a LIBOR Loan, at a rate per
annum equal to the sum of the LIBOR Rate applicable to each Interest
Period for such Loan plus the LIBOR Margin from time to time in effect;
provided that at any time an Event of Default exists, the Required Lenders may
at their option, declare that the interest rate applicable to each Loan shall be
increased by 3% (and, in the case of Obligations not bearing interest, such
Obligations shall bear interest at the Base Rate applicable to Revolving Loans
plus 3%), provided further that such increase may thereafter be rescinded by the
Required Lenders, notwithstanding Section 15.1. Notwithstanding the foregoing,
upon the occurrence of an Event of Default under Section 13.1.1 or 13.1.4, such
increase shall occur automatically.
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4.2 Interest Payment Dates. Accrued interest on each Base Rate Loan shall
be payable in arrears on the first day of each calendar month and at maturity.
Accrued interest on each LIBOR Loan shall be payable on the last day of each
Interest Period relating to such Loan (and, in the case of a LIBOR Loan with an
Interest Period in excess of three months, on the three-month anniversary of the
first day of such Interest Period), upon a prepayment of such Loan, and at
maturity. After maturity, and at any time an Event of Default exists, accrued
interest on all Loans shall be payable on demand.
4.3 Setting and Notice of LIBOR Rates. The applicable LIBOR Rate for each
Interest Period shall be determined by the Administrative Agent, and notice
thereof shall be given by the Administrative Agent promptly to the Company and
each Lender. Each determination of the applicable LIBOR Rate by the
Administrative Agent shall be conclusive and binding upon the parties hereto, in
the absence of demonstrable error. The Administrative Agent shall, upon written
request of the Company or any Lender, deliver to the Company or such Lender a
statement showing the computations used by the Administrative Agent in
determining any applicable LIBOR Rate hereunder.
4.4 Computation of Interest. Interest shall be computed for the actual
number of days elapsed on the basis of a year of 360 days. The applicable
interest rate for each Base Rate Loan shall change simultaneously with each
change in the Base Rate.
SECTION 5. FEES.
5.1 Non-Use Fee. The Company agrees to pay to the Administrative Agent for
the account of each Lender, in accordance with such Lender's Pro Rata Share, a
non-use fee (the "Non-Use Fee"), for the period from the Effective Date to the
Termination Date, at the per annum rate of 0.20% of the daily unused amount of
the Revolving Commitment. For purposes of calculating usage under this Section,
the Revolving Commitment shall be deemed used to the extent of Revolving
Outstandings, excluding the outstanding amount of any Swing Line Loans. Such
Non-Use Fee shall be payable in arrears on the last day of each calendar quarter
and on the Termination Date for any period then ending for which such Non-Use
Fee shall not have previously been paid, provided, however that the Non-Use Fee
shall not be payable for the period prior to the date which is six (6) months
after the Effective Date. The Non-Use Fee shall be computed for the actual
number of days elapsed on the basis of a year of 360 days.
5.2 Letter of Credit Fees. (a) The Company agrees to pay to the
Administrative Agent for the account of each Lender a letter of credit fee for
each Letter of Credit equal to the L/C Fee Rate in effect from time to time of
such Lender's Pro Rata Share (as adjusted from time to time) of the undrawn
amount of such Letter of Credit (computed for the actual number of days elapsed
on the basis of a year of 360 days); provided that, unless the Required Lenders
otherwise consent, the rate applicable to each Letter of Credit shall be
increased by 3% at any time that an Event of Default exists. Such letter of
credit fee shall be payable in arrears on the last day of each calendar month
and on the Termination Date (or such later date on which such Letter of Credit
expires or is terminated) for the period from the date of the issuance of each
Letter of Credit (or the last day on which the letter of credit fee was paid
with respect thereto) to the date such payment is due or, if earlier, the date
on which such Letter of Credit expired or was terminated.
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(b) In addition, with respect to each Letter of Credit, the Company
agrees to pay to the Issuing Lender, for its own account, (i) such fees
and expenses as the Issuing Lender customarily requires in connection with
the issuance, negotiation, processing and/or administration of letters of
credit in similar situations and (ii) a letter of credit fronting fee in
the amount and at the times agreed to by the Company and the Issuing
Lender.
5.3 Administrative Agent's Fees. The Company agrees to pay to the
Administrative Agent such agent's fees as are mutually agreed to from time to
time by the Company and the Administrative Agent including the fees set forth in
the Agent Fee Letter.
SECTION 6. REDUCTION OR TERMINATION OF THE REVOLVING COMMITMENT;
PREPAYMENTS; INCREASES IN REVOLVING COMMITMENT; EXTENSION OF
TERMINATION DATE.
6.1 Reduction or Termination of the Revolving Commitment.
6.1.1 Voluntary Reduction or Termination of the Revolving
Commitment. The Company may from time to time on at least five Business Days'
prior written notice received by the Administrative Agent (which shall promptly
advise each Lender thereof) permanently reduce the Revolving Commitment to an
amount not less than the Revolving Outstandings plus the outstanding amount of
all Swing Line Loans. Any such reduction shall be in an amount not less than
$1,000,000.00 or a higher integral multiple of $100,000.00. Concurrently with
any reduction of the Revolving Commitment to zero, the Company shall pay all
interest on the Revolving Loans, all Non-Use Fees and all letter of credit fees
and shall Cash Collateralize in full all obligations arising with respect to the
Letters of Credit.
6.1.2 All Reductions of the Revolving Commitment. All reductions of
the Revolving Commitment shall reduce the Commitments ratably among the Lenders
according to their respective Pro Rata Shares.
6.2 Prepayments.
6.2.1 Voluntary Prepayments. The Company may from time to time
prepay the Loans in whole or in part; provided that the Company shall give the
Administrative Agent (which shall promptly advise each Lender) notice thereof
not later than 11:00 A.M., Detroit time, on the day of such prepayment (which
shall be a Business Day), specifying the Loans to be prepaid and the date and
amount of prepayment. Any such partial prepayment shall be in an amount equal to
$500,000.00 or a higher integral multiple of $100,000.00.
6.2.2 Mandatory Prepayments.
(a) If on any day the Revolving Outstandings plus the outstanding
amount of the Swing Line Loan exceeds the Borrowing Base, the Company
shall within 15 days either (i) prepay Revolving Loans and/or Cash
Collateralize the outstanding Letters of Credit, or do a combination of
the foregoing, in an amount sufficient to eliminate such excess, or (ii)
take such other action to correct such non-compliance as the Required
Lenders may require.
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(b) If on any day on which the Revolving Commitment is reduced
pursuant to Section 6.1.2 the Revolving Outstandings plus the outstanding
amount of the Swing Line Loan exceeds the Revolving Commitment, the
Company shall immediately prepay Revolving Loans or Cash Collateralize the
outstanding Letters of Credit, or do a combination of the foregoing, in an
amount sufficient to eliminate such excess.
6.3 Manner of Prepayments.
6.3.1 All Prepayments. Each voluntary partial prepayment shall be in
a principal amount of $500,000.00 or a higher integral multiple of $100,000.00.
Any partial prepayment of a Group of LIBOR Loans shall be subject to the proviso
to Section 2.2.3(a). Any prepayment of a LIBOR Loan on a day other than the last
day of an Interest Period therefor shall include interest on the principal
amount being repaid and shall be subject to Section 8.4. Except as otherwise
provided by this Agreement, all principal payments in respect of the Loans
(other than the Swing Line Loans) shall be applied first, to repay outstanding
Base Rate Loans and then to repay outstanding LIBOR Rate Loans in direct order
of Interest Period maturities.
6.4 Repayments.
6.4.1 Revolving Loans. The Revolving Loans of each Lender shall be
paid in full and the Revolving Commitment shall terminate on the Termination
Date.
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6.5 Increase in Commitments.
6.5.1 Request for Increase. Provided that no Unmatured Event of
Default or Event of Default has occurred and is continuing, upon notice to the
Administrative Agent (which shall promptly notify the Lenders), the Company may,
from time to time, at any time prior to the date that is two (2) years after the
Effective Date, request an increase in the Revolving Commitment by an amount
(for all such requests) not exceeding $125,000,000, less the amount of the
Revolving Commitment in effect on the Effective Date; provided that (i) any such
request for an increase shall be in a minimum amount of $10,000,000, and (ii)
the Company may, on a combined basis, make a maximum of two such requests in any
period of twelve (12) consecutive months. At the time of sending such notice,
the Company (in consultation with the Administrative Agent) shall specify the
time period within which each Lender is requested to respond (which shall in no
event be less than ten Business Days from the date of delivery of such notice to
the Lenders).
6.5.2 Lender Elections to Increase. Each Lender shall notify the
Administrative Agent within such time period whether or not it agrees to
increase its Commitment and, if so, whether by an amount equal to, greater than,
or less than its Pro Rata Share of such requested increase. Any Lender not
responding within such time period shall be deemed to have declined to increase
its Commitment. No Lender shall be required to increase its Commitment under any
circumstances.
6.5.3 Notification by Administrative Agent; Additional Lenders. The
Administrative Agent shall notify the Company and each Lender of the Lenders'
responses to each request made hereunder. To achieve the full amount of a
requested increase and subject to the approval of the Administrative Agent
(which approval shall not be unreasonably withheld), the Company may also invite
additional financial institutions to become Lenders pursuant to a joinder
agreement in form and substance reasonably satisfactory to the Administrative
Agent.
6.5.4 Effective Date and Allocations. If the Aggregate Commitments
are increased in accordance with this Section, the Administrative Agent and the
Company shall determine the effective date (the "Increase Effective Date") and
the final allocation of such increase. The Administrative Agent shall promptly
notify the Company and the Lenders of the final allocation of such increase and
the Increase Effective Date.
6.5.5 Conditions to Effectiveness of Increase. As a condition
precedent to such increase, the Company shall deliver to the Administrative
Agent a certificate of the Company and each Guarantor dated as of the Increase
Effective Date (in sufficient copies for each Lender) signed by an authorized
officer of the Company and each Guarantor (i) certifying and attaching the
resolutions adopted by the Company and each Guarantor approving or consenting to
such increase, and (ii) in the case of the Company, certifying that, before and
after giving effect to such increase, (A) the representations and warranties
contained in Section 9 and the other Loan Documents that are qualified by
materiality are true and correct on and as of the Increase Effective Date, and
the representations and warranties contained in Section 9 and the other Loan
Documents that are not qualified by materiality are true and correct in all
material respects on and as of the Increase Effective Date, except to the extent
that such representations and warranties specifically refer to an earlier date,
in which case they are true and correct, or true
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and correct in all material respects, as the case may be, as of such earlier
date, and except that for purposes of this Section 6.5.5 , the representations
and warranties contained in Section 9.4 shall be deemed to refer to the most
recent statements furnished pursuant to the provisions of this Agreement, and
(B) no Unmatured Event of Default or Event of Default has occurred and is
continuing. The Company shall prepay any Loans outstanding on the Increase
Effective Date to the extent necessary to keep the outstanding Loans ratable
with any revised Pro Rata Shares of the Lenders arising from any nonratable
increase in the Commitments under this Section; provided that the Company shall
not be obligated to prepay any LIBOR Loans until the end of the applicable
Interest Period.
6.6 Extension of Termination Date.
6.6.1 The Company's Option to Extend. Provided that no Unmatured
Event of Default or Event of Default has occurred and is continuing, upon
written notice to the Administrative Agent (which shall promptly notify the
Lenders), the Company may, extend the Termination Date, one time, for one (1)
year, provided, however, (a) that such written notice shall be received by the
Administrative Agent not more than 120 days and not less than 90 days prior to
the original Termination Date and (b) such written notice shall be accompanied
by a nonrefundable extension fee in an amount equal to 0.25% of the Revolving
Commitment from which the Administrative Agent shall promptly pay over to each
Lender its Pro Rata Share of such extension fee.
SECTION 7. MAKING AND PRORATION OF PAYMENTS; SETOFF; TAXES.
7.1 Making of Payments. All payments of principal or interest on the
Notes, and of all fees, shall be made by the Company to the Administrative Agent
in immediately available funds at the office specified by the Administrative
Agent not later than noon, Detroit time, on the date due; and funds received
after that hour shall be deemed to have been received by the Administrative
Agent on the following Business Day. The Administrative Agent shall promptly
remit to each Lender its share of all such payments received in collected funds
by the Administrative Agent for the account of such Lender. All payments under
Section 8.1 shall be made by the Company directly to the Lender entitled thereto
without setoff, counterclaim or other defense.
7.2 Application of Certain Payments. So long as no Unmatured Event of
Default or Event of Default has occurred and is continuing, (a) payments
matching specific scheduled payments then due shall be applied to those
scheduled payments and (b) voluntary and mandatory prepayments shall be applied
as set forth in Sections 6.2 and 6.3. After the occurrence and during the
continuance of an Unmatured Event of Default or Event of Default, all amounts
collected or received by the Administrative Agent or any Lender as proceeds from
the sale of, or other realization upon, all or any part of the collateral shall
be applied as the Administrative Agent shall determine in its discretion.
Concurrently with each remittance to any Lender of its share of any such
payment, the Administrative Agent shall advise such Lender as to the application
of such payment.
7.3 Due Date Extension. If any payment of principal or interest with
respect to any of the Loans, or of any fees, falls due on a day which is not a
Business Day, then such due date
33
shall be extended to the immediately following Business Day (unless, in the case
of a LIBOR Loan, such immediately following Business Day is the first Business
Day of a calendar month, in which case such due date shall be the immediately
preceding Business Day) and, in the case of principal, additional interest shall
accrue and be payable for the period of any such extension.
7.4 Setoff. The Company agrees that the Administrative Agent and each
Lender have all rights of set-off and bankers' lien provided by applicable law,
and in addition thereto, the Company agrees that at any time any Event of
Default exists, the Administrative Agent and each Lender may apply to the
payment of any Obligations of the Company hereunder, whether or not then due,
any and all balances, credits, deposits, accounts or moneys of the Company then
or thereafter with the Administrative Agent or such Lender.
7.5 Proration of Payments. If any Lender shall obtain any payment or other
recovery (whether voluntary, involuntary, by application of offset or otherwise,
on account of (a) principal of or interest on any Loan, but excluding (i) any
payment pursuant to Section 8.7 or 15.6 and (ii) payments of interest on any
Affected Loan) or (b) its participation in any Letter of Credit) in excess of
its applicable Pro Rata Share of payments and other recoveries obtained by all
Lenders on account of principal of and interest on the Loans (or such
participation) then held by them, then such Lender shall purchase from the other
Lenders such participations in the Loans (or sub-participations in Letters of
Credit) held by them as shall be necessary to cause such purchasing Lender to
share the excess payment or other recovery ratably with each of them; provided
that if all or any portion of the excess payment or other recovery is thereafter
recovered from such purchasing Lender, the purchase shall be rescinded and the
purchase price restored to the extent of such recovery.
7.6 Taxes.
(a) All payments made by the Company or any other Loan Party
hereunder or under any Loan Documents shall be made without setoff,
counterclaim, or other defense. To the extent permitted by applicable law,
all payments hereunder or under the Loan Documents (including any payment
of principal, interest, or fees) to, or for the benefit, of any person
shall be made by the Company or such other Loan Party free and clear of
and without deduction or withholding for, or account of, any Taxes now or
hereinafter imposed by any taxing authority.
(b) If the Company or any other Loan Party makes any payment
hereunder or under any Loan Document in respect of which it is required by
applicable law to deduct or withhold any Taxes, the Company or such other
Loan Party shall increase the payment hereunder or under any such Loan
Document such that after the reduction for the amount of Taxes withheld
(and any taxes withheld or imposed with respect to the additional payments
required under this Section 7.6(b)), the net amount received by the
Lenders or the Administrative Agent after the payment of such Taxes
(including Taxes on such additional amount) shall equal the amount such
Person would have received had not such Taxes been asserted. To the extent
the Company or such other Loan Party withholds any Taxes on payments
hereunder or under any Loan Document, the Company or such other Loan Party
shall pay the full amount deducted to the relevant taxing authority within
the time allowed for payment under applicable law and shall deliver to the
Administrative
34
Agent within 30 days after it has made payment to such authority a receipt
issued by such authority (or other evidence satisfactory to the
Administrative Agent) evidencing the payment of all amounts so required to
be deducted or withheld from such payment.
(c) If any Lender or the Administrative Agent is required by law to
make any payments of any Taxes on or in relation to any amounts received
or receivable hereunder or under any other Loan Document, or any Tax is
assessed against a Lender or the Administrative Agent with respect to
amounts received or receivable hereunder or under any other Loan Document,
the Company will indemnify such person against (i) such Tax (and any
reasonable counsel fees and expenses associated with such Tax) and (ii)
any taxes imposed as a result of the receipt of the payment under this
Section 7.6(c). A certificate prepared in good faith as to the amount of
such payment by such Lender or the Administrative Agent shall, absent
manifest error, be final, conclusive, and binding on all parties.
(d) (i) To the extent permitted by applicable law, each Lender
that is not a United States person within the meaning of Code section
7701(a)(30) (a "Non-U.S. Participant") shall deliver to the Company and
the Administrative Agent on or prior to the Closing Date (or in the case
of a Lender that is an Assignee, on the date of such assignment to such
Lender, or in the case of a new Lender pursuant to Section 6.5.3, on the
date such Lender becomes a Lender) two accurate and complete original
signed copies of IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or
other applicable form prescribed by the IRS) certifying to such Lender's
entitlement to a complete exemption from, or a reduced rate in, United
States withholding tax on interest payments to be made hereunder or any
Loan. If a Lender that is a Non-U.S. Participant is claiming a complete
exemption from withholding on interest pursuant to Sections 871(h) or
881(c) of the Code, the Lender shall deliver (along with two accurate and
complete original signed copies of IRS Form W-8BEN) a certificate in form
and substance reasonably acceptable to Administrative Agent (any such
certificate, a "Withholding Certificate"). In addition, each Lender that
is a Non-U.S. Participant agrees that from time to time after the
Effective Date, (or in the case of a Lender that is an Assignee, after the
date of the assignment to such Lender), when a lapse in time (or change in
circumstances occurs) renders the prior certificates hereunder obsolete or
inaccurate in any material respect, such Lender shall, to the extent
permitted under applicable law, deliver to the Company and the
Administrative Agent two new and accurate and complete original signed
copies of an IRS Form W-8BEN, W-8ECI, or W-8IMY (or any successor or other
applicable forms prescribed by the IRS), and if applicable, a new
Withholding Certificate, to confirm or establish the entitlement of such
Lender or the Administrative Agent to an exemption from, or reduction in,
United States withholding tax on interest payments to be made hereunder or
any Loan.
(ii) Each Lender that is not a Non-U.S. Participant (other
than any such Lender which is taxed as a corporation for U.S.
federal income tax purposes) shall provide two properly completed
and duly executed copies of IRS Form W-9 (or any successor or other
applicable form) to the Company and the Administrative Agent
certifying that such Lender is exempt from United States backup
withholding tax. To the extent that a form provided pursuant to this
35
Section 7.6(d)(ii) is rendered obsolete or inaccurate in any
material respects as result of change in circumstances with respect
to the status of a Lender, such Lender shall, to the extent
permitted by applicable law, deliver to the Company and the
Administrative Agent revised forms necessary to confirm or establish
the entitlement to such Lender's or Agent's exemption from United
States backup withholding tax.
(iii) The Company shall not be required to pay additional
amounts to a Lender, or indemnify any Lender, under this Section 7.6
to the extent that such obligations would not have arisen but for
the failure of such Lender to comply with Section 7.6(d).
(iv) Each Lender agrees to indemnify the Administrative Agent
and hold the Administrative Agent harmless for the full amount of
any and all present or future Taxes and related liabilities
(including penalties, interest, additions to tax and expenses, and
any Taxes imposed by any jurisdiction on amounts payable to the
Administrative Agent under this Section 7.6) which are imposed on or
with respect to principal, interest or fees payable to such Lender
hereunder and which are not paid by the Company pursuant to this
Section 7.6, whether or not such Taxes or related liabilities were
correctly or legally asserted. This indemnification shall be made
within 30 days from the date the Administrative Agent makes written
demand therefor.
SECTION 8. INCREASED COSTS; SPECIAL PROVISIONS FOR LIBOR LOANS.
8.1 Increased Costs. (a) If, after the date hereof, the adoption of, or
any change in, any applicable law, rule or regulation, or any change in the
interpretation or administration of any applicable law, rule or regulation by
any governmental authority, central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by any Lender with any
request or directive (whether or not having the force of law) of any such
authority, central bank or comparable agency: (i) shall impose, modify or deem
applicable any reserve (including any reserve imposed by the FRB, but excluding
any reserve included in the determination of the LIBOR Rate pursuant to Section
4), special deposit or similar requirement against assets of, deposits with or
for the account of, or credit extended by any Lender; or (ii) shall impose on
any Lender any other condition affecting its LIBOR Loans, its Note or its
obligation to make LIBOR Loans; and the result of anything described in clauses
(i) and (ii) above is to increase the cost to (or to impose a cost on) such
Lender (or any LIBOR Office of such Lender) of making or maintaining any LIBOR
Loan, or to reduce the amount of any sum received or receivable by such Lender
(or its LIBOR Office) under this Agreement or under its Note with respect
thereto, then upon demand by such Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to the
Administrative Agent), the Company shall pay directly to such Lender such
additional amount as will compensate such Lender for such increased cost or such
reduction, so long as such amounts have accrued on or after the day which is 180
days prior to the date on which such Lender first made demand therefor.
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(b) If any Lender shall reasonably determine that any change in, or
the adoption or phase-in of, any applicable law, rule or regulation
regarding capital adequacy, or any change in the interpretation or
administration thereof by any governmental authority, central bank or
comparable agency charged with the interpretation or administration
thereof, or the compliance by any Lender or any Person controlling such
Lender with any request or directive regarding capital adequacy (whether
or not having the force of law) of any such authority, central bank or
comparable agency, has or would have the effect of reducing the rate of
return on such Lender's or such controlling Person's capital as a
consequence of such Lender's obligations hereunder or under any Letter of
Credit to a level below that which such Lender or such controlling Person
could have achieved but for such change, adoption, phase-in or compliance
(taking into consideration such Lender's or such controlling Person's
policies with respect to capital adequacy) by an amount deemed by such
Lender or such controlling Person to be material, then from time to time,
upon demand by such Lender (which demand shall be accompanied by a
statement setting forth the basis for such demand and a calculation of the
amount thereof in reasonable detail, a copy of which shall be furnished to
the Administrative Agent), the Company shall pay to such Lender such
additional amount as will compensate such Lender or such controlling
Person for such reduction so long as such amounts have accrued on or after
the day which is 180 days prior to the date on which such Lender first
made demand therefor.
8.2 Basis for Determining Interest Rate Inadequate or Unfair. If
(a) the Administrative Agent reasonably determines (which
determination shall be binding and conclusive on the Company) that by
reason of circumstances affecting the interbank LIBOR market adequate and
reasonable means do not exist for ascertaining the applicable LIBOR Rate;
or
(b) the Required Lenders advise the Administrative Agent that the
LIBOR Rate as determined by the Administrative Agent will not adequately
and fairly reflect the cost to such Lenders of maintaining or funding
LIBOR Loans for such Interest Period (taking into account any amount to
which such Lenders may be entitled under Section 8.1) or that the making
or funding of LIBOR Loans has become impracticable as a result of an event
occurring after the date of this Agreement which in the opinion of such
Lenders materially affects such Loans;
then the Administrative Agent shall promptly notify the other parties thereof
and, so long as such circumstances shall continue, (i) no Lender shall be under
any obligation to make or convert any Base Rate Loans into LIBOR Loans and (ii)
on the last day of the current Interest Period for each LIBOR Loan, such Loan
shall, unless then repaid in full, automatically convert to a Base Rate Loan.
8.3 Changes in Law Rendering LIBOR Loans Unlawful. If any change in, or
the adoption of any new, law or regulation, or any change in the interpretation
of any applicable law or regulation by any governmental or other regulatory body
charged with the administration thereof, should make it (or in the good faith
judgment of any Lender cause a substantial question as to whether it is)
unlawful for any Lender to make, maintain or fund LIBOR Loans, then such
37
Lender shall promptly notify each of the other parties hereto and, so long as
such circumstances shall continue, (a) such Lender shall have no obligation to
make or convert any Base Rate Loan into a LIBOR Loan (but shall make Base Rate
Loans concurrently with the making of or conversion of Base Rate Loans into
LIBOR Loans by the Lenders which are not so affected, in each case in an amount
equal to the amount of LIBOR Loans which would be made or converted into by such
Lender at such time in the absence of such circumstances) and (b) on the last
day of the current Interest Period for each LIBOR Loan of such Lender (or, in
any event, on such earlier date as may be required by the relevant law,
regulation or interpretation), such LIBOR Loan shall, unless then repaid in
full, automatically convert to a Base Rate Loan. Each Base Rate Loan made by a
Lender which, but for the circumstances described in the foregoing sentence,
would be a LIBOR Loan (an "Affected Loan") shall remain outstanding for the
period corresponding to the Group of LIBOR Loans of which such Affected Loan
would be a part absent such circumstances.
8.4 Funding Losses. The Company hereby agrees that upon demand by any
Lender (which demand shall be accompanied by a statement setting forth the basis
for the amount being claimed, a copy of which shall be furnished to the
Administrative Agent), the Company will indemnify such Lender against any net
loss or expense which such Lender may sustain or incur (including any net loss
or expense incurred by reason of the liquidation or reemployment of deposits or
other funds acquired by such Lender to fund or maintain any LIBOR Loan), as
reasonably determined by such Lender, as a result of (a) any payment, prepayment
or conversion of any LIBOR Loan of such Lender on a date other than the last day
of an Interest Period for such Loan (including any conversion pursuant to
Section 8.3) or (b) any failure of the Company to borrow, convert or continue
any Loan on a date specified therefor in a notice of borrowing, conversion or
continuation pursuant to this Agreement. For this purpose, all notices to the
Administrative Agent pursuant to this Agreement shall be deemed to be
irrevocable.
8.5 Right of Lenders to Fund through Other Offices. Each Lender may, if it
so elects, fulfill its commitment as to any LIBOR Loan by causing a foreign
branch or Affiliate of such Lender to make such Loan; provided that in such
event for the purposes of this Agreement such Loan shall be deemed to have been
made by such Lender and the obligation of the Company to repay such Loan shall
nevertheless be to such Lender and shall be deemed held by it, to the extent of
such Loan, for the account of such branch or Affiliate.
8.6 Discretion of Lenders as to Manner of Funding. Notwithstanding any
provision of this Agreement to the contrary, each Lender shall be entitled to
fund and maintain its funding of all or any part of its Loans in any manner it
sees fit, it being understood, however, that for the purposes of this Agreement
all determinations hereunder shall be made as if such Lender had actually funded
and maintained each LIBOR Loan during each Interest Period for such Loan through
the purchase of deposits having a maturity corresponding to such Interest Period
and bearing an interest rate equal to the LIBOR Rate for such Interest Period.
8.7 Mitigation of Circumstances; Replacement of Lenders. (a) Each Lender
shall promptly notify the Company and the Administrative Agent of any event of
which it has knowledge which will result in, and will use reasonable commercial
efforts available to it (and not, in such Lender's sole judgment, otherwise
disadvantageous to such Lender) to mitigate or avoid, (i) any obligation by the
Company to pay any amount pursuant to Section 7.6 or 8.1 or (ii)
38
the occurrence of any circumstances described in Section 8.2 or 8.3 (and, if any
Lender has given notice of any such event described in clause (i) or (ii) above
and thereafter such event ceases to exist, such Lender shall promptly so notify
the Company and the Administrative Agent). Without limiting the foregoing, each
Lender will designate a different funding office if such designation will avoid
(or reduce the cost to the Company of) any event described in clause (i) or (ii)
above and such designation will not, in such Lender's sole judgment, be
otherwise disadvantageous to such Lender.
(b) If the Company becomes obligated to pay additional amounts to
any Lender pursuant to Section 7.6 or 8.1, or any Lender gives notice of
the occurrence of any circumstances described in Section 8.2 or 8.3, the
Company may designate another bank which is acceptable to the
Administrative Agent and the Issuing Lender in their reasonable discretion
(such other bank being called a "Replacement Lender") to purchase the
Loans of such Lender and such Lender's rights hereunder, without recourse
to or warranty by, or expense to, such Lender, for a purchase price equal
to the outstanding principal amount of the Loans payable to such Lender
plus any accrued but unpaid interest on such Loans and all accrued but
unpaid fees owed to such Lender and any other amounts payable to such
Lender under this Agreement, and to assume all the obligations of such
Lender hereunder, and, upon such purchase and assumption (pursuant to an
Assignment Agreement), such Lender shall no longer be a party hereto or
have any rights hereunder (other than rights with respect to indemnities
and similar rights applicable to such Lender prior to the date of such
purchase and assumption) and shall be relieved from all obligations to the
Company hereunder, and the Replacement Lender shall succeed to the rights
and obligations of such Lender hereunder.
8.8 Conclusiveness of Statements; Survival of Provisions. Determinations
and statements of any Lender pursuant to Section 8.1, 8.2, 8.3 or 8.4 shall be
conclusive absent demonstrable error. Lenders may use reasonable averaging and
attribution methods in determining compensation under Sections 8.1 and 8.4, and
the provisions of such Sections shall survive repayment of the Obligations,
cancellation of any Notes, expiration or termination of the Letters of Credit
and termination of this Agreement.
SECTION 9. REPRESENTATIONS AND WARRANTIES.
To induce the Administrative Agent and the Lenders to enter into this
Agreement and to induce the Lenders to make Loans and issue and participate in
Letters of Credit hereunder, the Company and the REIT represent and warrant to
the Administrative Agent and the Lenders that:
9.1 Organization. Each Loan Party is validly existing and in good standing
under the laws of its jurisdiction of organization; and each Loan Party is duly
qualified to do business in each jurisdiction where, because of the nature of
its activities or properties, such qualification is required, except for such
jurisdictions where the failure to so qualify would not have a Material Adverse
Effect.
9.2 Authorization; No Conflict. Each Loan Party is duly authorized to
execute and deliver each Loan Document to which it is a party, the Company is
duly authorized to borrow monies hereunder and each Loan Party is duly
authorized to perform its Obligations under each
39
Loan Document to which it is a party. The execution, delivery and performance by
each Loan Party of each Loan Document to which it is a party, and the borrowings
by the Company hereunder, do not and will not (a) require any consent or
approval of any governmental agency or authority (other than any consent or
approval which has been obtained and is in full force and effect), (b) conflict
with (i) any provision of law, (ii) the charter, by-laws or other organizational
documents of such Loan Party or (iii) any agreement, indenture, instrument or
other document, or any judgment, order or decree, which is binding upon such
Loan Party or any of its properties or (c) require, or result in, the creation
or imposition of any Lien on any asset of any such Loan Party.
9.3 Validity and Binding Nature. Each of this Agreement and each other
Loan Document to which any Loan Party is a party is the legal, valid and binding
obligation of such Person, enforceable against such Person in accordance with
its terms, subject to bankruptcy, insolvency and similar laws affecting the
enforceability of creditors' rights generally and to general principles of
equity.
9.4 Financial Condition. The audited consolidated financial statements of
the Company, the REIT and their Subsidiaries as at Company's Fiscal Year End,
2003 and the unaudited consolidated financial statements of the Company, the
REIT and their Subsidiaries as at June 30, 2004, copies of each of which have
been delivered to each Lender, were prepared in accordance with GAAP (subject,
in the case of such unaudited statements, to the absence of footnotes and to
normal year-end adjustments) and present fairly the consolidated financial
condition of the Company, the REIT and their Subsidiaries as at such dates and
the results of their operations for the periods then ended.
9.5 No Material Adverse Change. Since Company's Fiscal Year End, 2003
there has been no material adverse change in the financial condition,
operations, assets, business, properties or prospects of the Loan Parties taken
as a whole.
9.6 Litigation and Contingent Liabilities. No litigation (including
derivative actions), arbitration proceeding or governmental investigation or
proceeding is pending or, to the knowledge of the Company and the REIT,
threatened against any Loan Party which would reasonably be expected to have a
Material Adverse Effect, except as set forth in Schedule 9.6. Other than any
liability incident to such litigation or proceedings, no Loan Party has any
material contingent liabilities not listed on Schedule 9.6 or permitted by
Section 11.1.
9.7 Ownership of Properties; Liens. Except as set forth in Schedule 9.7,
each Loan Party owns good and, in the case of real property, marketable title to
all of its properties and assets, real and personal, tangible and intangible, of
any nature whatsoever (including patents, trademarks, trade names, service marks
and copyrights), free and clear of all Liens, charges and claims (including
infringement claims with respect to patents, trademarks, service marks,
copyrights and the like) except as permitted by Section 11.2.
9.8 Equity Ownership; Subsidiaries. All issued and outstanding Capital
Securities of each Loan Party are duly authorized and validly issued, fully
paid, non-assessable and such securities were issued in compliance with all
applicable state and federal laws concerning the issuance of securities.
Schedule 9.8 sets forth the authorized Capital Securities of each Loan
40
Party held by the REIT, the Company and their Subsidiaries and the respective
percentage ownerships such Capital Securities represent, as of the Effective
Date. As of the Effective Date, except as set forth on Schedule 9.8, all of the
Capital Securities of each Loan Party held by the REIT, the Company and their
Subsidiaries are free and clear of all Liens.
9.9 Pension Plans. (a) The Unfunded Liability of all Pension Plans does
not in the aggregate exceed twenty percent of the Total Plan Liability for all
such Pension Plans. Each Pension Plan complies in all material respects with all
applicable requirements of law and regulations. No contribution failure under
Section 412 of the Code, Section 302 of ERISA or the terms of any Pension Plan
has occurred with respect to any Pension Plan, sufficient to give rise to a Lien
under Section 302(f) of ERISA, or otherwise to have a Material Adverse Effect.
There are no pending or, to the knowledge of Company, threatened, claims,
actions, investigations or lawsuits against any Pension Plan, any fiduciary of
any Pension Plan, or Company or other any member of the Controlled Group with
respect to a Pension Plan which would reasonably be expected to have a Material
Adverse Effect. Neither the Company nor, to the knowledge of the Company, any
other member of the Controlled Group has engaged in any prohibited transaction
(as defined in Section 4975 of the Code or Section 406 of ERISA) in connection
with any Pension Plan or Multiemployer Pension Plan which would subject that
Person to any material liability. Within the past five years, neither the
Company nor any other member of the Controlled Group has engaged in a
transaction which resulted in a Pension Plan with an Unfunded Liability being
transferred out of the Controlled Group, which could reasonably be expected to
have a Material Adverse Effect. No Termination Event has occurred or is
reasonably expected to occur with respect to any Pension Plan, which could
reasonably be expected to have a Material Adverse Effect.
(b) All contributions (if any) that are required to be made by the
Company or any other member of the Controlled Group to any Multiemployer
Pension Plan that are due under the terms of the plan or of any collective
bargaining agreement or by applicable law have been made; neither the
Company nor any other member of the Controlled Group has withdrawn or
partially withdrawn from any Multiemployer Pension Plan, incurred any
withdrawal liability with respect to any such plan or received notice of
any claim or demand for withdrawal liability or partial withdrawal
liability from any such plan, and no condition has occurred which, if
continued, would reasonably be expected to result in a withdrawal or
partial withdrawal from any such plan; and neither the Company nor any
other member of the Controlled Group has received any notice that any
Multiemployer Pension Plan is in reorganization, that increased
contributions may be required to avoid a reduction in plan benefits or the
imposition of any excise tax, that any such plan is or has been funded at
a rate less than that required under Section 412 of the Code, that any
such plan is or may be terminated, or that any such plan is or may become
insolvent.
9.10 Investment Company Act. No Loan Party is an "investment company" or a
company "controlled" by an "investment company" or a "subsidiary" of an
"investment company," within the meaning of the Investment Company Act of 1940.
9.11 Public Utility Holding Company Act. No Loan Party is a "holding
company", or a "subsidiary company" of a "holding company," or an "affiliate" of
a "holding company" or of a
41
"subsidiary company" of a "holding company," within the meaning of the Public
Utility Holding Company Act of 1935.
9.12 Regulation U. The Company is not engaged principally, or as one of
its important activities, in the business of extending credit for the purpose of
purchasing or carrying Margin Stock.
9.13 Taxes. Each Loan Party has timely filed all tax returns and reports
required by law to have been filed by it and has paid all taxes and governmental
charges due and payable with respect to such return, except any such taxes or
charges which are being diligently contested in good faith by appropriate
proceedings and for which adequate reserves in accordance with GAAP shall have
been set aside on its books. The Loan Parties have made adequate reserves on
their books and records in accordance with GAAP for all taxes that have accrued
but which are not yet due and payable. No Loan Party has participated in any
transaction that relates to a year of the taxpayer (which is still open under
the applicable statute of limitations) which is a "reportable transaction"
within the meaning of Treasury Regulation Section 1.6011-4(b)(2) (irrespective
of the date when the transaction was entered into).
9.14 Solvency, etc. On the Effective Date, and immediately prior to and
after giving effect to the issuance of each Letter of Credit and each borrowing
hereunder and the use of the proceeds thereof, with respect to each Loan Party,
(a) the fair value of its assets is greater than the amount of its liabilities
(including disputed, contingent and unliquidated liabilities) as such value is
established and liabilities evaluated, (b) the present fair saleable value of
its assets is not less than the amount that will be required to pay the probable
liability on its debts as they become absolute and matured, (c) it is able to
realize upon its assets and pay its debts and other liabilities (including
disputed, contingent and unliquidated liabilities) as they mature in the normal
course of business, (d) it does not intend to, and does not believe that it
will, incur debts or liabilities beyond its ability to pay as such debts and
liabilities mature and (e) it is not engaged in business or a transaction, and
is not about to engage in business or a transaction, for which its property
would constitute unreasonably small capital.
9.15 Environmental Matters. In the ordinary course of its business, the
officers of the REIT consider the effect of Environmental Laws on the business
of the Company, the REIT and their Subsidiaries, in the course of which they
identify and evaluate potential risks and liabilities accruing due to
Environmental Laws. On the basis of this consideration, the Borrower and the
REIT have concluded that Environmental Laws would not reasonably be expected to
have a Material Adverse Effect.
9.16 Insurance. Set forth on Schedule 9.16 is a complete and accurate
summary of the property and casualty insurance program of the Loan Parties as of
the Effective Date. Each Loan Party and its properties are insured with
companies which are not Affiliates of the Loan Parties, in such amounts, with
such deductibles and covering such risks as are set forth in Schedule 9.16.
9.17 Real Property. Set forth on Schedule 9.17 is a complete and accurate
list, as of the Effective Date, of the address of all real property included in
the Borrowing Base Pool.
42
9.18 Information. All information heretofore or contemporaneously herewith
furnished in writing by any Loan Party to the Administrative Agent or any Lender
for purposes of or in connection with this Agreement and the transactions
contemplated hereby is, and all written information hereafter furnished by or on
behalf of any Loan Party to the Administrative Agent or any Lender pursuant
hereto or in connection herewith will be, true and accurate in every material
respect on the date as of which such information is dated or certified, and none
of such information is or will be incomplete by omitting to state any material
fact necessary to make such information not misleading in light of the
circumstances under which made (it being recognized by the Administrative Agent
and the Lenders that any projections and forecasts provided by the Company are
based on good faith estimates and assumptions believed by the Company to be
reasonable as of the date of the applicable projections or assumptions and that
actual results during the period or periods covered by any such projections and
forecasts may differ from projected or forecasted results).
9.19 Intellectual Property. Each Loan Party owns and possesses or has a
license or other right to use all patents, patent rights, trademarks, trademark
rights, trade names, trade name rights, service marks, service mark rights and
copyrights as are necessary for the conduct of the businesses of such Loan
Parties, without any infringement upon rights of others which could reasonably
be expected to have a Material Adverse Effect.
9.20 Burdensome Obligations. No Loan Party is a party to any agreement or
contract or subject to any restriction contained in its organizational documents
which could reasonably be expected to have a Material Adverse Effect.
9.21 Labor Matters. Except as set forth on Schedule 9.21, no Loan Party is
subject to any labor or collective bargaining agreement. There are no existing
or threatened strikes, lockouts or other labor disputes involving any Loan Party
that singly or in the aggregate would reasonably be expected to have a Material
Adverse Effect. Hours worked by and payment made to employees of the Loan
Parties are not in violation of the Fair Labor Standards Act or any other
applicable law, rule or regulation dealing with such matters.
9.22 No Default. No Event of Default or Unmatured Event of Default exists
or would result from the incurrence by any Loan Party of any Debt hereunder or
under any other Loan Document.
9.23 Status of Property. With respect to each property that is included in
the Borrowing Base Pool, except as set forth on Schedule 9.23:
(a) No portion of any improvement on such property is located in an
area identified by the Secretary of Housing and Urban Development or any
successor thereto as an area having special flood hazards pursuant to the
National Flood Insurance Act of 1968 or the Flood Disaster Protection Act
of 1973, as amended, or any successor law, or, if located within any such
area, the Company or the respective consolidated Subsidiary has obtained
and will maintain appropriate flood insurance.
(b) To the best knowledge of the Company and the REIT, the Company
or the respective consolidated Subsidiary has obtained all necessary
certificates, licenses and
43
other approvals, governmental and otherwise, necessary for the operation
of such property and the conduct of its business and all required zoning,
building code, land use, environmental and other similar permits or
approvals, all of which are in full force and effect as of the date hereof
and not subject to revocation, suspension, forfeiture or modification.
(c) To the best knowledge of the Company and the REIT, such property
and the present and contemplated use and occupancy thereof are in material
compliance with all applicable zoning ordinances (without reliance upon
grandfather provisions or adjoining or other properties), building codes,
land use and Environmental Laws, laws relating to the disabled (including,
but not limited to, the ADA) and other similar laws.
(d) Such property is served by all utilities required for the
current or contemplated use thereof. All utility service is provided by
public utilities and such property has accepted or is equipped to accept
such utility service.
(e) All public roads and streets necessary for service of and access
to such property for the current or contemplated use thereof have been
completed, are serviceable and all-weather and are physically and legally
open for use by the public.
(f) Such property is served by public water and sewer systems; or,
if such property is not serviced by a public water and sewer system, such
alternate systems are adequate and meet, in all material respects, all
requirements and regulations of, and otherwise comply in all material
respects with all applicable laws.
(g) Neither the Company nor any consolidated Subsidiary is aware of
any latent or patent structural or other significant deficiency of such
property. Such property is free of damage and waste that would materially
and adversely affect the value of such property, is in good repair and
there is no deferred maintenance, other than ordinary wear and tear. Such
property is free from damage caused by fire or other casualty. There is no
pending or, to the actual knowledge of the Company, the REIT or the
respective consolidated Subsidiary, threatened condemnation proceedings
affecting such property, or any part thereof.
(h) To the best knowledge of the Company and the REIT, all costs and
expenses of any and all labor, materials, supplies and equipment used in
the construction of the improvements on such property have either (a) been
paid in full, (b) not yet due and payable, or (c) are being contested in
good faith by the Company, the REIT or the applicable consolidated
Subsidiary. Subject to the Company's or the respective consolidated
Subsidiary's right to contest as set forth in any permitted mortgage debt
related to such property, there are no mechanics' or similar liens or
claims that have been filed and recorded for work, labor or materials that
affects such property.
(i) To the best knowledge of the Company and the REIT, the Company
or the respective consolidated Subsidiary has paid in full for, and is the
owner of, all furnishings, fixtures and equipment (other than tenants'
property) used in connection with
44
the operation of such property, free and clear of any and all security
interests, liens or encumbrances, except for Permitted Liens.
(j) To the best knowledge of the Company and the REIT, all liquid
and solid waste disposal, septic and sewer systems located on such
property are in a good and safe condition and repair and are in material
compliance with all applicable laws.
(k) All improvements on such property lie within the boundaries and
building restrictions of the legal description of record of such property,
no such improvements encroach upon easements benefitting such property
other than encroachments that do not materially adversely affect the use
or occupancy of such property and no improvements on adjoining properties
encroach upon such property or easements benefitting such property other
than encroachments that do not materially adversely affect the use or
occupancy of such property. All amenities, access routes or other items
that materially benefit such property are under direct control of the
Company or the respective consolidated Subsidiary, constitute permanent
easements that benefit all or part of such property or are public
property, and such property, by virtue of such easements or otherwise, is
contiguous to a physically open, dedicated all weather public street, and
has the necessary permits for ingress and egress.
(l) If such property constitutes a legal non-conforming use, the
non-conforming Improvements may be rebuilt to current density and used and
occupied for such non-conforming purposes if damaged or destroyed.
(m) To the best knowledge of the Company and the REIT, there are no
delinquent taxes, ground rents, water charges, sewer rents, assessments
(including assessments payable in future installments), insurance
premiums, leasehold payments, or other outstanding charges affecting such
property.
(n) To the best knowledge of the Company and the REIT, such property
is assessed for real estate tax purposes as one or more wholly independent
tax lot or lots, separate from any adjoining land or improvements not
constituting a part of such lot or lots, and no other land or improvements
are assessed and taxed together with such property or any portion thereof.
(o) No portion of such property has been or will be purchased with
proceeds of any illegal activity.
(p) To the best knowledge of the Company and the REIT, all
contracts, agreements, consents, waivers, documents and writings of every
kind or character at any time to which the Company or any consolidated
Subsidiary is a party to be delivered to the Agent pursuant to any of the
provisions hereof are valid and enforceable against the Company and such
consolidated Subsidiary and, to the best knowledge of Company, are
enforceable against all other parties thereto, and in all respects are
what they purport to be and, to the best knowledge of the Company, to the
extent that any such writing shall impose any obligation or duty on the
party thereto or constitute a waiver of any rights which any such party
might otherwise have, said writing shall be valid and enforceable
45
against said party in accordance with the terms, except as such
enforcement may be limited by applicable bankruptcy, insolvency,
reorganization or similar laws affecting the rights of creditors
generally.
9.24 The Collateral. Each item of Collateral is owned by the respective
Loan Party executing the Collateral Documents relating thereto, free and clear
of any and all security interests, liens or encumbrances, except Liens listed on
Schedule 11.2.
9.25 REIT Status. The "REIT" is a "qualified real estate investment trust"
as defined in Section 856 of the Code.
9.26 Stock. The REIT lists all of its outstanding shares of stock on the
New York Stock Exchange.
SECTION 10. AFFIRMATIVE COVENANTS.
Until the expiration or termination of the Commitments and thereafter
until all Obligations hereunder and under the other Loan Documents are paid in
full and all Letters of Credit have been terminated, the Company and the REIT
agree that, unless at any time the Required Lenders shall otherwise expressly
consent in writing, they will:
10.1 Reports, Certificates and Other Information. Furnish to the
Administrative Agent and each Lender:
10.1.1 Annual Report. Promptly when available and in any event
within 90 days after the close of each Fiscal Year: (a) a copy of the annual
audited consolidated financial statements of the REIT and its consolidated
Subsidiaries for such Fiscal Year, including therein consolidated balance sheets
and statements of earnings and cash flows of the REIT and its Subsidiaries as at
the end of such Fiscal Year, certified without adverse reference to going
concern value and without qualification by independent auditors of recognized
material standing selected by the Company and reasonably acceptable to the
Administrative Agent.
10.1.2 Interim Reports. Promptly when available and in any event
within 50 days after the end of each Fiscal Quarter, consolidated balance sheets
of the REIT and its consolidated Subsidiaries as of the end of such Fiscal
Quarter, together with consolidated statements of earnings and cash flows for
such Fiscal Quarter and for the period beginning with the first day of such
Fiscal Year and ending on the last day of such Fiscal Quarter, together with a
comparison with the corresponding period of the previous Fiscal Year, certified
by a Senior Officer of the Company.
10.1.3 Compliance Certificates. Contemporaneously with the
furnishing of a copy of each annual audited financial statements pursuant to
Section 10.1.1 and each set of quarterly statements pursuant to Section 10.1.2,
a duly completed compliance certificate in the form of Exhibit B, with
appropriate insertions, as of the date of such annual report or such quarterly
statements and signed by a Senior Officer of the Company, containing a
computation of each of the financial ratios and restrictions set forth in
Section 11.13 and to the effect that such officer has not become aware of any
Event of Default or Unmatured Event of Default that has
46
occurred and is continuing or, if there is any such event, describing it and the
steps, if any, being taken to cure it.
10.1.4 Reports to the SEC and to Shareholders. Promptly upon the
filing or sending thereof, copies of all periodic or special reports of the REIT
filed with the SEC; copies of all registration statements of the Company or the
REIT filed with the SEC (other than on Form S-8) and copies of all proxy
statements or other communications made to security holders of the Company or
the REIT which are not obtainable by the Administrative Agent through the
internet.
10.1.5 Notice of Default, Litigation and ERISA Matters. Promptly
after a Senior Officer of the Company or the REIT obtains actual knowledge of
any of the following, written notice describing the same and the steps being
taken by the Company and the REIT with respect thereto:
(a) the occurrence of an Event of Default or an Unmatured
Event of Default;
(b) any litigation, arbitration or governmental investigation
or proceeding not previously disclosed by the Company or the REIT to
the Lenders which has been instituted or, to the knowledge of the
Company or the REIT, is threatened against any Loan Party or to
which any of the properties of any thereof is subject which
reasonably would be expected to have a Material Adverse Effect;
(c) the institution of any steps by any member of the
Controlled Group or any other Person to terminate any Pension Plan,
or the failure of any member of the Controlled Group to make a
required contribution to any Pension Plan (if such failure is
sufficient to give rise to a Lien under Section 302(f) of ERISA) or
to any Multiemployer Pension Plan, or the taking of any action with
respect to a Pension Plan which would be reasonably expected to
result in the requirement that the Company furnish a bond or other
security to the PBGC or such Pension Plan, or the occurrence of any
event with respect to any Pension Plan or Multiemployer Pension Plan
which would be reasonably expected to result in the incurrence by
any member of the Controlled Group of any material liability, fine
or penalty (including any claim or demand for withdrawal liability
or partial withdrawal from any Multiemployer Pension Plan), or any
material increase in the contingent liability of the Company with
respect to any post-retirement welfare benefit plan of the Company,
or any notice that any Multiemployer Pension Plan is in
reorganization, that increased contributions may be required to
avoid a reduction in plan benefits or the imposition of an excise
tax, that any such plan is or has been funded at a rate less than
that required under Section 412 of the Code, that any such plan is
or may be terminated, or that any such plan is or may become
insolvent;
(d) any cancellation or material adverse change in any
insurance maintained by any Loan Party; or
47
(e) any other event (including (i) any violation of any
Environmental Law or the assertion of any Environmental Claim or
(ii) the enactment or effectiveness of any law, rule or regulation
known to the Company or the REIT) which might reasonably be expected
to have a Material Adverse Effect.
10.1.6 Borrowing Base Certificates. Within 50 days of the end of
each Fiscal Quarter, a Borrowing Base Certificate dated as of the end of such
Fiscal Quarter and executed by a Senior Officer of the Company on behalf of the
Company (provided that (a) the Company may deliver a Borrowing Base Certificate
more frequently if it chooses and (b) at any time an Event of Default exists,
the Administrative Agent may require the Company to deliver Borrowing Base
Certificates more frequently).
10.1.7 Management Reports. Promptly upon receipt thereof, copies of
all detailed financial and management reports submitted to the REIT by its
independent auditors in connection with each annual audit made by such auditors.
10.1.8 Subordinated Debt Notices. Promptly following receipt, copies
of any notices (including notices of default or acceleration) received from any
holder or trustee of, under or with respect to any Subordinated Debt.
10.1.9 Notices Regarding Certain Debt. Promptly following receipt,
copies of any notices of default or acceleration received from any holder or
trustee of, lender or with respect of any Debt relating to any property in the
Borrowing Base Pool, including the GMAC Pool Debt or the Sea Air Property Debt.
10.1.10 Projections. As soon as practicable, and in any event not
later than 30 days after the commencement of each Fiscal Year, financial
projections for the Company for such Fiscal Year (including annual operating
budgets for the Company and each of the properties in the Borrowing Base Pool)
prepared in a manner consistent with the projections delivered by the Company to
the Lenders prior to the Effective Date or otherwise in a manner reasonably
satisfactory to the Administrative Agent, accompanied by a certificate of a
Senior Officer of the Company on behalf of the Company to the effect that (a)
such projections were prepared by the Company in good faith, (b) the Company has
a reasonable basis for the assumptions contained in such projections and (c)
such projections have been prepared in accordance with such assumptions.
10.1.11 Notices Regarding Major Agreements. Promptly following
receipt, copies of any material notices (including notices of default or
acceleration) received from any Person with respect of any Major Agreement.
10.1.12 Other Information. Promptly from time to time, such other
information concerning the Loan Parties as any Lender or the Administrative
Agent may reasonably request.
10.2 Books, Records and Inspections. Keep, and cause each other Loan Party
to keep, its books and records in accordance with sound business practices
sufficient to allow the preparation of financial statements in accordance with
GAAP; permit, and cause each other Loan Party to permit, any Lender or the
Administrative Agent or any representative thereof to inspect the properties and
operations of the Loan Parties; and permit, and cause each other Loan Party to
48
permit, at any reasonable time and with reasonable notice (or at any time
without notice if an Event of Default exists), any Lender or the Administrative
Agent or any representative thereof to visit any or all of its offices, to
discuss its financial matters with its officers and its independent auditors
(and the Company hereby authorizes such independent auditors to discuss such
financial matters with any Lender or the Administrative Agent or any
representative thereof), and to examine (and, at the expense of the Company
photocopy extracts from) any of its books or other records; and permit, and
cause each other Loan Party to permit, the Administrative Agent and its
representatives to inspect the properties included in the Borrowing Base Pool,
and to inspect, audit, check and make copies of and extracts from the books,
records, computer data, computer programs, journals, orders, receipts,
correspondence and other data relating to the properties included in the
Borrowing Base Pool. All such inspections or audits by the Administrative Agent
shall be at the Company's EXPENSE, provided that so long as no Event of Default
or Unmatured Event of Default exists, the Company shall not be required to
reimburse the Administrative Agent for inspections or audits more frequently
than once each Fiscal Year.
10.3 Maintenance of Property; Insurance. (a) Keep, and cause each other
Loan Party to keep, all property useful and necessary in the business of the
Loan Parties in good working order and condition, ordinary wear and tear
excepted.
(b) Maintain, and cause each other Loan Party to maintain, with
insurance companies licensed to conduct business in the states where the
business of the Loan Parties is located, such insurance coverage as may be
required by any law or governmental regulation or court decree or order
applicable to it and such other insurance, to such extent and against such
hazards and liabilities, as the Loan Parties currently maintain which
insure against risks and liabilities of the types identified in the
insurance policies listed on Schedule 9.16, unless the Loan Parties and
the Required Lenders shall have agreed it is not commercially reasonable
to maintain; and, upon request of the Administrative Agent or any Lender,
furnish to the Administrative Agent or such Lender a certificate setting
forth in reasonable detail the nature and extent of all insurance
maintained by the Loan Parties. With respect to any Collateral that
consists of tangible property, the Company shall cause each issuer of an
insurance policy to provide the Administrative Agent with an endorsement
(i) showing the Administrative Agent as loss payee with respect to each
policy of property insurance applicable to properties in the Borrowing
Base Pool, (ii) providing that 30 days' notice will be given to the
Administrative Agent prior to any cancellation of, material reduction or
change in coverage provided by or other material modification to such
policy and (iii) be reasonably acceptable in all other respects to the
Administrative Agent.
(c) UNLESS THE COMPANY PROVIDES THE ADMINISTRATIVE AGENT WITH
EVIDENCE OF THE INSURANCE COVERAGE REQUIRED BY THIS AGREEMENT, THE
ADMINISTRATIVE AGENT MAY AFTER TEN (10) DAYS NOTICE TO THE COMPANY,
PURCHASE INSURANCE AT THE COMPANY'S EXPENSE TO PROTECT THE ADMINISTRATIVE
AGENT'S AND THE LENDERS' INTERESTS IN THE COLLATERAL AND/OR TO PRESERVE
THE VALUE OF THE BORROWING BASE POOL, AS THE CASE MAY BE. THIS INSURANCE
MAY, BUT NEED NOT, PROTECT ANY LOAN PARTY'S INTERESTS. THE COVERAGE THAT
THE ADMINISTRATIVE AGENT
49
PURCHASES MAY NOT PAY ANY CLAIM THAT IS MADE AGAINST ANY LOAN PARTY IN
CONNECTION WITH THE COLLATERAL. THE COMPANY MAY LATER CANCEL ANY INSURANCE
PURCHASED BY THE ADMINISTRATIVE AGENT, BUT ONLY AFTER PROVIDING THE
ADMINISTRATIVE AGENT WITH EVIDENCE THAT THE COMPANY HAS OBTAINED INSURANCE
AS REQUIRED BY THIS AGREEMENT. IF THE ADMINISTRATIVE AGENT PURCHASES
INSURANCE UNDER THIS PROVISION, THE COMPANY WILL BE RESPONSIBLE FOR THE
COSTS OF THAT INSURANCE, INCLUDING INTEREST AND ANY OTHER CHARGES THAT MAY
BE IMPOSED WITH THE PLACEMENT OF THE INSURANCE, UNTIL THE EFFECTIVE DATE
OF THE CANCELLATION OR EXPIRATION OF THE INSURANCE. THE COSTS OF THE
INSURANCE MAY BE ADDED TO THE PRINCIPAL AMOUNT OF THE LOANS OWING
HEREUNDER. THE COSTS OF THE INSURANCE MAY BE MORE THAN THE COST OF THE
INSURANCE THE LOAN PARTIES MAY BE ABLE TO OBTAIN ON THEIR OWN.
10.4 Compliance with Laws; Payment of Taxes and Liabilities. (a) Comply,
and cause each other Loan Party to comply, in all material respects with all
applicable laws, rules, regulations, decrees, orders, judgments, licenses and
permits, except where failure to comply would not reasonably be expected to have
a Material Adverse Effect; (b) without limiting clause (a) above, ensure, and
cause each other Loan Party to ensure, that no person who owns a controlling
interest in or otherwise controls a Loan Party is or shall be (i) listed on the
Specially Designated Nationals and Blocked Person List maintained by the Office
of Foreign Assets Control ("OFAC"), Department of the Treasury, and/or any other
similar lists maintained by OFAC pursuant to any authorizing statute, Executive
Order or regulation or (ii) a person designated under Section 1(b), (c) or (d)
of Executive Order No. 13224 (September 23, 2001), any related enabling
legislation or any other similar Executive Orders, (c) without limiting clause
(a) above, comply, and cause each other Loan Party to comply, with all
applicable Bank Secrecy Act ("BSA") and anti-money laundering laws and
regulations and (d) pay, and cause each other Loan Party to pay, prior to
delinquency, all taxes and other governmental charges against it or any
collateral, as well as claims of any kind which, if unpaid, could become a Lien
on any of its property; provided that the foregoing shall not require any Loan
Party to pay any such tax or charge so long as it shall contest the validity
thereof in good faith by appropriate proceedings and shall set aside on its
books adequate reserves with respect thereto in accordance with GAAP and, in the
case of a claim which could become a Lien on any collateral, such contest
proceedings shall stay the foreclosure of such Lien or the sale of any portion
of the collateral to satisfy such claim.
10.5 Maintenance of Existence, etc. Maintain and preserve, and (subject to
Section 11.5) cause each other Loan Party to maintain and preserve, (a) its
existence and good standing in the jurisdiction of its organization and (b) its
qualification to do business and good standing in each jurisdiction where the
nature of its business makes such qualification necessary (other than such
jurisdictions in which the failure to be qualified or in good standing would not
reasonably be expected to have a Material Adverse Effect).
10.6 Use of Proceeds. Use the proceeds of the Loans, and the Letters of
Credit, solely to repay in full the Debt to be Repaid, for working capital
purposes and for other general
50
business purposes; and not use or permit any proceeds of any Loan to be used,
either directly or indirectly, for the purpose, whether immediate, incidental or
ultimate, of "purchasing or carrying" any Margin Stock.
10.7 Employee Benefit Plans.
(a) Maintain, and cause each other member of the Controlled Group to
maintain, each Pension Plan in substantial compliance with all applicable
requirements of law and regulations.
(b) Make, and cause each other member of the Controlled Group to
make, on a timely basis, all required contributions to any Multiemployer
Pension Plan.
(c) Not, and not permit any other member of the Controlled Group to
(i) seek a waiver of the minimum funding standards of ERISA, (ii)
terminate or withdraw from any Pension Plan or Multiemployer Pension Plan
or (iii) take any other action with respect to any Pension Plan that would
reasonably be expected to entitle the PBGC to terminate, impose liability
in respect of, or cause a trustee to be appointed to administer, any
Pension Plan, unless the actions or events described in clauses (i), (ii)
and (iii) individually or in the aggregate would not have a Material
Adverse Effect.
10.8 Environmental Matters. If any release or threatened release or other
disposal of Hazardous Substances in violation of Environmental Laws shall occur
or shall have occurred on any real property or any other assets of any Loan
Party, the Company and the REIT shall, or shall cause the applicable Loan Party
to, cause the prompt containment, removal, remediation or other action
acceptable to the proper governmental authority with respect to such Hazardous
Substances as necessary to comply with applicable Environmental Laws and to
prevent a material decline in the value of such real property or other asset.
Without limiting the generality of the foregoing, the Company and the REIT
shall, and shall cause each other Loan Party to, comply with any Federal or
state judicial or administrative order requiring the performance at any real
property of any Loan Party of activities in response to the release or
threatened release of a Hazardous Substance. To the extent that the
transportation of Hazardous Substances is permitted by this Agreement, the
Company and the REIT shall, and shall cause its Subsidiaries to, dispose of such
Hazardous Substances, or of any other wastes, only at licensed disposal
facilities operating in compliance with Environmental Laws.
10.9 Further Assurances. The Company and the REIT shall take, and cause
each Loan Party to take, such actions as are necessary or as the Administrative
Agent may reasonably request from time to time to ensure that the Obligations
under the Loan Documents are secured as contemplated by this Agreement, in each
case as the Administrative Agent may determine, including (a) the execution and
delivery of security agreements, pledge agreements, mortgages, deeds of trust,
financing statements and other documents, and the filing or recording of any of
the foregoing, and (b) the delivery of certificated securities and other
collateral with respect to which perfection is obtained by possession.
SECTION 11. NEGATIVE COVENANTS.
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Until the expiration or termination of the Commitments and thereafter
until all Obligations hereunder and under the other Loan Documents are paid in
full and all Letters of Credit have been terminated, the Company and the REIT
agree that, unless at any time the Required Lenders shall otherwise expressly
consent in writing, they will:
11.1 Debt. Not, and not permit any other Loan Party to, create, incur,
assume or suffer to exist any Debt, except:
(a) Obligations under this Agreement and the other Loan Documents;
(b) Debt secured by Liens on assets not included in the Borrowing
Base Pool or the Collateral;
(c) Debt between the Company, the REIT or any Subsidiary;
(d) Subordinated Debt;
(e) Hedging Obligations for bona fide hedging purposes and not for
speculation;
(f) Debt described on Schedule 11.1(f) and any extension, renewal or
refinancing thereof so long as the principal amount thereof is not
increased;
(g) the Debt to be Repaid (so long as such Debt is repaid on the
Closing Date with the proceeds of the initial Loans hereunder);
(h) Contingent Liabilities arising with respect to customary
indemnification obligations in favor of sellers in connection with
acquisitions of assets or purchasers in connection with dispositions of
assets;
(i) The existing unsecured Debt described on Schedule 11.1(i) and
any extension, renewal or refinancing thereof so long as the principal
amount thereof is not increased;
(j) The GMAC Pool Debt, provided that the principal amount of such
debt is not increased;
(k) The Debt encumbering the Sea Air Property, provided that the
principal amount of such debt is not increased; and
(l) Other Debt of the REIT, the Company and their consolidated
Subsidiaries incurred in the ordinary course of their business of
developing, constructing, owning, leasing to consumers, operating and
selling or otherwise disposing of Manufactured Home Communities and
Recreational Vehicle Communities and activities related thereto where
(A) immediately before and after giving effect to such
incurrence of Debt, no Event of Default or Unmatured Event of Default shall
exist;
52
(B) immediately after giving effect to such incurrence of Debt,
the Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 11.14.
11.2 Liens. Not, and not permit any other Loan Party to, create or permit
to exist any Lien on any of its real or personal properties, assets or rights of
whatsoever nature (whether now owned or hereafter acquired), except (the
"Permitted Liens"):
(a) Liens for taxes or other governmental charges not at the time
delinquent or thereafter payable without penalty or being contested in
good faith by appropriate proceedings and, in each case, for which it
maintains adequate reserves;
(b) Liens arising in the ordinary course of business (such as (i)
Liens of carriers, warehousemen, mechanics and materialmen and other
similar Liens imposed by law and (ii) Liens in the form of deposits or
pledges incurred in connection with worker's compensation, unemployment
compensation and other types of social security (excluding Liens arising
under ERISA) or in connection with surety bonds, bids, performance bonds
and similar obligations) for sums not overdue or being contested in good
faith by appropriate proceedings and not involving any advances or
borrowed money or the deferred purchase price of property or services and,
in each case, for which it maintains adequate reserves;
(c) Liens described on Schedule 11.2 as of the Effective Date;
(d) subject to the limitation set forth in Section 11.1(b), (i)
Liens arising in connection with Capital Leases (and attaching only to the
property being leased), (ii) Liens existing on property at the time of the
acquisition thereof by any Loan Party (and not created in contemplation of
such acquisition) and (iii) Liens that constitute purchase money security
interests on any property securing debt incurred for the purpose of
financing all or any part of the cost of acquiring such property, provided
that any such Lien attaches to such property within 60 days of the
acquisition thereof and attaches solely to the property so acquired;
(e) attachments, appeal bonds, judgments and other similar Liens,
for sums not exceeding $5,000,000.00, in aggregate, arising in connection
with court proceedings, provided the execution or other enforcement of
such Liens is effectively stayed and the claims secured thereby are being
actively contested in good faith and by appropriate proceedings;
(f) easements, rights of way, restrictions, minor defects or
irregularities in title and other similar Liens not interfering in any
material respect with the ordinary conduct of the business of any Loan
Party;
(g) Liens arising under the Loan Documents; and
(h) the replacement, extension or renewal of any Lien permitted by
clause (c) and (d) above upon or in the same property subject thereto
arising out of the extension,
53
renewal or replacement of the Debt secured thereby (without increase in
the amount thereof).
11.3 Restricted Payments. Commencing on the earlier of (Y) the second
Fiscal Quarter of 2005 or (Z) the Fiscal Quarter next following the date that
the Company's cash position is less than $10,000,000.00, not pay or declare
Distributions that in the aggregate exceed (a) ninety percent (90%) of the Funds
From Operations of the Company individually and combined with the REIT (without
duplication), respectively, in any four consecutive calendar quarters, (b) the
amount necessary to maintain the REIT's status as a real estate investment trust
under Section 856 of the Code, or (c) the amount necessary for the REIT to avoid
the payment of any federal income or excise tax, whichever of (a), (b) or (c) is
greatest.
11.4 Mergers, Consolidations, Sales. Not, and not permit any other Loan
Party to, (a) be a party to any merger or consolidation, or purchase or
otherwise acquire all or substantially all of the assets or any Capital
Securities of any class of, or any partnership or joint venture interest in, any
other Person, (b) sell, transfer, convey or lease all or any substantial part of
its assets or Capital Securities (including the sale of Capital Securities of
any Subsidiary) except for sales of inventory in the ordinary course of
business, or (c) sell or assign with or without recourse any receivables, except
for (i) any such merger, consolidation, sale, transfer, conveyance, lease or
assignment of or by any Wholly-Owned Subsidiary into the Company or into any
other domestic Wholly-Owned Subsidiary; (ii) any such purchase or other
acquisition by the Company or any domestic Wholly-Owned Subsidiary of the assets
or Capital Securities of any Wholly-Owned Subsidiary; (iii) sales and
dispositions of assets (including the Capital Securities of Subsidiaries) for at
least fair market value (as determined by the Board of Directors of the Company)
and (iv) any Acquisition by the Company or any Wholly-Owned Subsidiary where:
(A) the property, business or division acquired are for use,
or the Person acquired is engaged, in the businesses engaged in by the
Loan Parties on the Effective Date;
(B) immediately before and after giving effect to such
Acquisition, no Event of Default or Unmatured Event of Default shall
exist;
(C) immediately after giving effect to such Acquisition, the
Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 11.13;
(D) in the case of the Acquisition of any Person, the Board of
Directors of such Person has approved such Acquisition;
(E) not less than ten Business Days prior to such Acquisition,
the Administrative Agent shall have received an acquisition summary with
respect to the Person and/or business or division to be acquired, and the
Company's calculation of pro forma EBITDA relating thereto; and
(F) the Administrative Agent and Required Lenders shall have
approved the Company's computation of pro forma EBITDA, provided that if
the Administrative Agent and Required Lenders shall not have notified the
Company that
54
they disapprove such computation of pro forma EBITDA within 5 Business
Days after they have received such computation, then they shall be deemed
to have approved such computation.
11.5 Modification of Organizational Documents. Not permit the charter,
by-laws or other organizational documents of any Loan Party to be amended or
modified in any way which could reasonably be expected to materially adversely
affect the interests of the Lenders.
11.6 Transactions with Affiliates. Not, and not permit any other Loan
Party to, enter into, or cause, suffer or permit to exist any transaction,
arrangement or contract with any of its other Affiliates (other than the Loan
Parties) which is on terms which are less favorable than are obtainable from any
Person which is not one of its Affiliates.
11.7 Unconditional Purchase Obligations. Not, and not permit any other
Loan Party to, enter into or be a party to any contract for the purchase of
materials, supplies or other property or services if such contract requires that
payment be made by it regardless of whether delivery is ever made of such
materials, supplies or other property or services.
11.8 Inconsistent Agreements. Not, and not permit any other Loan Party to,
enter into any agreement containing any provision which would (a) be violated or
breached by any borrowing by the Company hereunder or by the performance by any
Loan Party of any of its Obligations hereunder or under any other Loan Document,
(b) prohibit any Loan Party from granting to the Administrative Agent and the
Lenders, a Lien on any of the properties in the Borrowing Base Pool, or (c)
create or permit to exist or become effective any encumbrance or restriction on
the ability of any Subsidiary to (i) pay dividends or make other distributions
to the Company or any other Subsidiary, or pay any Debt owed to the Company or
any other Subsidiary, (ii) make loans or advances to any Loan Party or (iii)
transfer any of its assets or properties to any Loan Party, other than (A)
customary restrictions and conditions contained in agreements relating to the
sale of all or a substantial part of the assets of any Subsidiary pending such
sale, provided that such restrictions and conditions apply only to the
Subsidiary to be sold and such sale is permitted hereunder (B) restrictions or
conditions imposed by any agreement relating to purchase money Debt, Capital
Leases and other secured Debt permitted by this Agreement if such restrictions
or conditions apply only to the property or assets securing such Debt and (C)
customary provisions in leases and other contracts restricting the assignment
thereof.
11.9 Business Activities; Issuance of Equity. Not, and not permit any
other Loan Party to, engage in any line of business other than the businesses
engaged in on the date hereof and businesses reasonably related thereto.
11.10 Investments. Not, and not permit any other Loan Party to, make or
permit to exist any Investment in any other Person, except the following:
(a) contributions by the Company to the capital of any Wholly-Owned
Subsidiary, or by any Subsidiary to the capital of any other Wholly-Owned
Subsidiary;
(b) Investments constituting Debt permitted by Section 11.1;
55
(c) Contingent Liabilities constituting Debt permitted by Section
11.1 or Liens permitted by Section 11.2;
(d) Cash Equivalent Investments;
(e) bank deposits in the ordinary course of business;
(f) Investments in securities of Account Debtors received pursuant
to any plan of reorganization or similar arrangement upon the bankruptcy
or insolvency of such account debtors;
(g) Investments to consummate Acquisitions permitted by Section
11.5;
(h) Investments listed on Schedule 11.11 as of the Effective Date,
provided, however, that no additional investment may be made in Origin;
(i) Loans by the Company or any of its Subsidiaries to purchasers of
Manufactured Homes;
(j) Investments in Sun Home Services and SunChamp LLC; and
(k) Other investments relating to the Company's business of
developing, constructing; owning, leasing to consumers, operating and
selling or otherwise disposing of Manufacture Home Communities and
Recreational Vehicle Communities and activities related thereto where
(A) immediately before and after giving effect to such
Investment, no Event of Default or Unmatured Event of Default shall exist;
(B) immediately after giving effect to such Investment, the
Company is in pro forma compliance with all the financial ratios and
restrictions set forth in Section 11.13.
provided that (x) any Investment which when made complies with the requirements
of the definition of the term "Cash Equivalent Investment" may continue to be
held notwithstanding that such Investment if made thereafter would not comply
with such requirements; (y) no Investment otherwise permitted by clause (b),
(c), or (g) shall be permitted to be made if, immediately before or after giving
effect thereto, any Event of Default or Unmatured Event of Default exists.
11.11 Restriction of Amendments to Certain Documents. Not amend or
otherwise modify, or waive any rights under, any document evidencing or related
to the GMAC Pool Debt or the Sea Air Property Debt in any manner which would
materially increase the obligations of the borrower thereunder or otherwise
materially adversely affect the Lenders.
11.12 Fiscal Year. Not change its Fiscal Year.
11.13 Financial Covenants.
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11.13.1 Adjusted EBITDA to Debt Service Ratio. Not permit the
ratio of Adjusted EBITDA to Debt Service for any Computation Period to be
less than 1.75:1.
11.13.2 Adjusted EBITDA to Fixed Charge Ratio. Not permit the
ratio of Adjusted EBITDA to Fixed Charge for any Computation Period to be
less than 1.40 to 1.
11.13.3 Total Leverage Ratio. Not permit Total Leverage Ratio
as of the last day of any Computation Period to be greater than 0.70 to 1.
11.13.4 Unencumbered Adjusted NOI to Total Unsecured Debt
Service Ratio. Not permit the ratio of Unencumbered Adjusted NOI to
Unsecured Debt Service ratio as of the last day of any Computation Period
to be less than 1.75 to 1.
11.13.5 Tangible Net Worth. Not permit the Tangible Net Worth
as of the last day of any Computation Period to be less than
$400,000,000.00.
11.14 Interest Rate Protection. Not permit floating rate Debt in an amount
that exceeds 20% of the Gross Asset Value of the Company from time to time that
is not subject to an interest rate Hedging Agreement.
SECTION 12. EFFECTIVENESS; CONDITIONS OF LENDING, ETC.
The obligation of each Lender to make its Loans and of the Issuing Lender
to issue Letters of Credit is subject to the following conditions precedent:
12.1 Initial Credit Extension. The obligation of the Lenders to make the
initial Loans and the obligation of the Issuing Lender to issue its initial
Letter of Credit (whichever first occurs) is, in addition to the conditions
precedent specified in Section 12.2, subject to the conditions precedent that
(a) all Debt to be Repaid has been (or concurrently with the initial borrowing
will be) paid in full, and that all agreements and instruments governing the
Debt to be Repaid and that all Liens securing such Debt to be Repaid have been
(or concurrently with the initial borrowing will be) terminated and (b) the
Administrative Agent shall have received all of the following, each duly
executed and dated the Effective Date (or such earlier date as shall be
satisfactory to the Administrative Agent), in form and substance satisfactory to
the Administrative Agent (and the date on which all such conditions precedent
have been satisfied or waived in writing by the Administrative Agent and the
Lenders is called the "Closing Date"):
12.1.1 Notes. A Note for each Lender.
12.1.2 Authorization Documents. For the Company, the REIT,
each Guarantor and each other Loan Party with a property included in the
Borrowing Base Pool, such Person's (a) charter (or similar formation document),
certified by the appropriate governmental authority; (b) good standing
certificates in its state of incorporation (or formation) and in each other
state requested by the Administrative Agent; (c) bylaws (or similar governing
document); (d) resolutions of its board of directors (or similar governing body)
approving and authorizing such Person's execution, delivery and performance of
the Loan Documents to which it is party and the transactions contemplated
thereby; and (e) signature and incumbency certificates of its officers executing
any of the Loan Documents (it being understood that the Administrative
57
Agent and each Lender may conclusively rely on each such certificate until
formally advised by a like certificate of any changes therein), all certified by
its secretary or an assistant secretary (or similar officer) as being in full
force and effect without modification.
12.1.3 Consents, etc. Certified copies of all documents evidencing
any necessary corporate or partnership action, consents and governmental
approvals (if any) required for the execution, delivery and performance by the
Loan Parties of the documents referred to in this Section 12.
12.1.4 Letter of Direction. A letter of direction containing funds
flow information with respect to the proceeds of the Loans on the Closing Date.
12.1.5 Guaranty. A counterpart of the Guaranty executed by each
Guarantor.
12.1.6 Collateral Documents. Each of the Collateral Documents
required pursuant to Section 3.3.
12.1.7 Title Reports. A title report, in form and substance
satisfactory to the Administrative Agent, for each property in the Borrowing
Base Pool, together with a copy of each document that evidences an encumbrance
against each such property.
12.1.8 Subordination Agreements. Subordination Agreements with
respect to all Subordinated Debt.
12.1.9 Opinions of Counsel. Opinions of counsel for the Company and
each Guarantor in form and substance acceptable to the Administrative Agent.
12.1.10 Insurance. Evidence of the existence of insurance required
to be maintained pursuant to Section 10.3(b).
12.1.11 Payment of Fees. Evidence of payment by the Company of all
accrued and unpaid fees, costs and expenses to the extent then due and payable
on the Effective Date, together with all Attorney Costs of the Administrative
Agent to the extent invoiced prior to the Effective Date, plus such additional
amounts of Attorney Costs as shall constitute the Administrative Agent's
reasonable estimate of Attorney Costs incurred or to be incurred by the
Administrative Agent through the closing proceedings (provided that such
estimate shall not thereafter preclude final settling of accounts between the
Company and the Administrative Agent).
12.1.12 Solvency Certificate. A Solvency Certificate executed by a
Senior Officer of the Company.
12.1.13 Environmental Reports. Environmental site assessment reports
in respect of the Borrowing Base Pool, as requested by the Administrative Agent.
12.1.14 Search Results; Lien Terminations. Certified copies of
Uniform Commercial Code search reports dated a date reasonably near to the
Effective Date, listing all effective financing statements which name the REIT,
the Company and any Loan Party owning a
58
Property included in the Borrowing Base Pool (under their present names and any
previous names) as debtors, together with (a) copies of such financing
statements, (b) payoff letters evidencing repayment in full of all Debt to be
Repaid, the termination of all agreements relating thereto and the release of
all Liens granted in connection therewith, with Uniform Commercial Code or other
appropriate termination statements and documents effective to evidence the
foregoing (other than Liens permitted by Section 11.2) and (c) such other
Uniform Commercial Code termination statements as the Administrative Agent may
reasonably request.
12.1.15 Borrowing Base Certificate. A Borrowing Base Certificate
dated as of June 30, 2004.
12.1.16 Closing Certificate, Consents and Permits. A certificate
executed by an officer of the Company on behalf of the Company certifying the
matters set forth in Section 12.2.1 as of the Closing Date.
12.1.17 Other. Such other documents as the Administrative Agent or
any Lender may reasonably request.
12.2 Conditions. The obligation (a) of each Lender to make each Loan
and (b) of the Issuing Lender to issue each Letter of Credit is subject to the
following further conditions precedent that:
12.2.1 Compliance with Warranties, No Default, etc. Both before and
after giving effect to any borrowing and the issuance of any Letter of Credit,
the following statements shall be true and correct:
(a) the representations and warranties of each Loan Party set forth
in this Agreement and the other Loan Documents shall be true and correct
in all material respects with the same effect as if then made (except to
the extent stated to relate to a specific earlier date, in which case such
representations and warranties shall be true and correct as of such
earlier date); and
(b) no Event of Default or Unmatured Event of Default shall have
then occurred and be continuing.
12.2.2 Confirmatory Certificate. If requested by the Administrative
Agent or the Required Lenders, the Administrative Agent shall have received (in
sufficient counterparts to provide one to each Lender) a certificate dated the
date of such requested Loan or Letter of Credit and signed by a duly authorized
representative of the Company as to the matters set out in Section 12.2.1 (it
being understood that each request by the Company for the making of a Loan or
the issuance of a Letter of Credit shall be deemed to constitute a
representation and warranty by the Company that the conditions precedent set
forth in Section 12.2.1 will be satisfied at the time of the making of such Loan
or the issuance of such Letter of Credit), together with such other documents as
the Administrative Agent or any Lender may reasonably request in support
thereof.
SECTION 13. EVENTS OF DEFAULT AND THEIR EFFECT.
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13.1 Events of Default. Each of the following shall constitute an Event of
Default under this Agreement:
13.1.1 Non-Payment of the Loans, etc. Default in the payment when
due of the principal of any Loan; or default, and continuance thereof for five
days, in the payment when due of any interest, fee, reimbursement obligation
with respect to any Letter of Credit or other amount payable by the Company
hereunder or under any other Loan Document.
13.1.2 Non-Payment of Other Debt. Any default shall occur under the
terms applicable to any Debt of any Loan Party (excluding intercompany Debt) in
an aggregate amount (for all such Debt so affected and including undrawn
committed or available amounts and amounts owing to all creditors under any
combined or syndicated credit arrangement) exceeding $10,000,000.00 and such
default shall (a) consist of the failure to pay such Debt when due, whether by
acceleration or otherwise, or (b) accelerate the maturity of such Debt or permit
the holder or holders thereof, or any trustee or agent for such holder or
holders, to cause such Debt to become due and payable (or require any Loan Party
to purchase or redeem such Debt or post cash collateral in respect thereof)
prior to its expressed maturity.
13.1.3 Other Material Obligations. Default in the payment when due,
or in the performance or observance of, any material obligation of, or condition
agreed to by, any Loan Party with respect to any material purchase or lease of
goods or services where such default, singly or in the aggregate with all other
such defaults, might reasonably be expected to have a Material Adverse Effect.
13.1.4 Bankruptcy, Insolvency, etc. The Company, the REIT, or any
Guarantor becomes insolvent or generally fails to pay, or admits in writing its
inability or refusal to pay, debts as they become due; or any such Person
applies for, consents to, or acquiesces in the appointment of a trustee,
receiver or other custodian for such Person or any property thereof, or makes a
general assignment for the benefit of creditors; or, in the absence of such
application, consent or acquiescence, a trustee, receiver or other custodian is
appointed for any such Person or for a substantial part of the property of any
such Person and is not discharged within 90 days; or any bankruptcy,
reorganization, debt arrangement, or other case or proceeding under any
bankruptcy or insolvency law, or any dissolution or liquidation proceeding, is
commenced in respect of any such Person, and if such case or proceeding is not
commenced by such Person, it is consented to or acquiesced in by such Person, or
remains for 90 days undismissed; or any such Person takes any action to
authorize, or in furtherance of, any of the foregoing.
13.1.5 Non-Compliance with Loan Documents. (a) Failure by the
Company to comply with or to perform any covenant set forth in Section, 10.3(b)
or 10.5 or Section 11; (b) failure by any Loan Party to comply with or to
perform any other provision of this Agreement or any other Loan Document (and
not constituting an Event of Default under any other provision of this Section
13) and continuance of such failure described in this clause (b) for 30 days
after delivery of notice thereof to the Company, or such longer period of time
as is reasonably necessary to cure such failure, provided that the Company has
commenced and is diligently prosecuting the cure of such failure and cures it
within ninety (90) days; or (c) failure by the Company to comply with Section
6.2.2(a).
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13.1.6 Representations; Warranties. Any representation or warranty
made by any Loan Party herein or any other Loan Document is breached or is false
or misleading in any material respect, or any schedule, certificate, financial
statement, report, notice or other writing furnished by any Loan Party to the
Administrative Agent or any Lender in connection herewith is false or misleading
in any material respect on the date as of which the facts therein set forth are
stated or certified.
13.1.7 Pension Plans. (a) Any Person institutes steps to terminate a
Pension Plan if as a result of such termination the Company or any member of the
Controlled Group could be required to make a contribution to such Pension Plan,
or could incur a liability or obligation to such Pension Plan, in excess of
$2,000,000.00; (b) a contribution failure occurs with respect to any Pension
Plan sufficient to give rise to a Lien under Section 302(f) of ERISA; (c) the
Unfunded Liability exceeds the greater of $2,000,000.00 or twenty percent of the
Total Plan Liability, or (d) there shall occur any withdrawal or partial
withdrawal from a Multiemployer Pension Plan and the withdrawal liability
(without unaccrued interest) to Multiemployer Pension Plans as a result of such
withdrawal (including any outstanding withdrawal liability that the Company or
any member of the Controlled Group have incurred on the date of such withdrawal)
exceeds $2,000,000.00.
13.1.8 Judgments. Final judgments which exceed an aggregate of
$10,000,000.00 shall be rendered against any Loan Party and shall not have been
paid, discharged or vacated or had execution thereof stayed pending appeal
within 30 days after entry or filing of such judgments.
13.1.9 Invalidity of Guaranty. Any Guaranty shall cease to be in
full force and effect; or any Guarantor (or any Person by, through or on behalf
of any Guarantor) shall contest in any manner the validity, binding nature or
enforceability of any Guaranty.
13.1.10 Invalidity of Subordination Provisions, etc. Any
subordination provision in any document or instrument governing Subordinated
Debt, or any subordination provision in any guaranty by any Subsidiary of any
Subordinated Debt, shall cease to be in full force and effect, or any Loan Party
or any other Person (including the holder of any applicable Subordinated Debt)
shall contest in any manner the validity, binding nature or enforceability of
any such provision.
13.1.11 Change of Control. A Change of Control shall occur.
13.1.12 Material Adverse Effect. The occurrence of any event having
a Material Adverse Effect.
13.2 Effect of Event of Default. If any Event of Default described
in Section 13.1.4 shall occur in respect of the Company, the Commitments shall
immediately terminate and the Loans and all other Obligations hereunder shall
become immediately due and payable and the Company shall become immediately
obligated to Cash Collateralize all Letters of Credit, all without presentment,
demand, protest or notice of any kind; and, if any other Event of Default shall
occur and be continuing, the Administrative Agent may (and, upon the written
request of the Required Lenders shall) declare the Commitments to be terminated
in whole or in part and/or
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declare all or any part of the Loans and all other Obligations hereunder to be
due and payable and/or demand that the Company immediately Cash Collateralize
all or any Letters of Credit, whereupon the Commitments shall immediately
terminate (or be reduced, as applicable) and/or the Loans and other Obligations
hereunder shall become immediately due and payable (in whole or in part, as
applicable) and/or the Company shall immediately become obligated to Cash
Collateralize the Letters of Credit (all or any, as applicable), all without
presentment, demand, protest or notice of any kind. The Administrative Agent
shall promptly advise the Company of any such declaration, but failure to do so
shall not impair the effect of such declaration. Any cash collateral delivered
hereunder shall be held by the Administrative Agent (without liability for
interest thereon) and applied to the Obligations arising in connection with any
drawing under a Letter of Credit. After the expiration or termination of all
Letters of Credit, such cash collateral shall be applied by the Administrative
Agent to any remaining Obligations hereunder and any excess shall be delivered
to the Company or as a court of competent jurisdiction may elect.
SECTION 14. THE AGENT.
14.1 Appointment and Authorization. Each Lender hereby irrevocably
(subject to Section 14.10) appoints, designates and authorizes the
Administrative Agent to take such action on its behalf under the provisions of
this Agreement and each other Loan Document and to exercise such powers and
perform such duties as are expressly delegated to it by the terms of this
Agreement or any other Loan Document, together with such powers as are
reasonably incidental thereto. Notwithstanding any provision to the contrary
contained elsewhere in this Agreement or in any other Loan Document, the
Administrative Agent shall not have any duty or responsibility except those
expressly set forth herein, nor shall the Administrative Agent have or be deemed
to have any fiduciary relationship with any Lender or participant, and no
implied covenants, functions, responsibilities, duties, obligations or
liabilities shall be read into this Agreement or any other Loan Document or
otherwise exist against the Administrative Agent. Without limiting the
generality of the foregoing sentence, the use of the term "agent" herein and in
other Loan Documents with reference to the Agent is not intended to connote any
fiduciary or other implied (or express) obligations arising under agency
doctrine of any applicable law. Instead, such term is used merely as a matter of
market custom, and is intended to create or reflect only an administrative
relationship between independent contracting parties.
14.2 Issuing Lender. The Issuing Lender shall act on behalf of the Lenders
(according to their Pro Rata Shares) with respect to any Letters of Credit
issued by it and the documents associated therewith. The Issuing Lender shall
have all of the benefits and immunities (a) provided to the Administrative Agent
in this Section 14 with respect to any acts taken or omissions suffered by the
Issuing Lender in connection with Letters of Credit issued by it or proposed to
be issued by it and the applications and agreements for letters of credit
pertaining to such Letters of Credit as fully as if the term "Administrative
Agent", as used in this Section 14, included the Issuing Lender with respect to
such acts or omissions and (b) as additionally provided in this Agreement with
respect to the Issuing Lender.
14.3 Delegation of Duties. The Administrative Agent may execute any of its
duties under this Agreement or any other Loan Document by or through agents,
employees or attorneys-in-fact and shall be entitled to advice of counsel and
other consultants or experts
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concerning all matters pertaining to such duties. The Administrative Agent shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
14.4 Exculpation of Administrative Agent. None of the Administrative Agent
nor any of its directors, officers, employees or agents shall (a) be liable for
any action taken or omitted to be taken by any of them under or in connection
with this Agreement or any other Loan Document or the transactions contemplated
hereby (except to the extent resulting from its own gross negligence or willful
misconduct in connection with its duties expressly set forth herein as
determined by a final, nonappealable judgment by a court of competent
jurisdiction), or (b) be responsible in any manner to any Lender or participant
for any recital, statement, representation or warranty made by any Loan Party or
Affiliate of the Company, or any officer thereof, contained in this Agreement or
in any other Loan Document, or in any certificate, report, statement or other
document referred to or provided for in, or received by the Administrative Agent
under or in connection with, this Agreement or any other Loan Document, or the
validity, effectiveness, genuineness, enforceability or sufficiency of this
Agreement or any other Loan Document (or the creation, perfection or priority of
any Lien or security interest therein), or for any failure of the Company or any
other party to any Loan Document to perform its Obligations hereunder or
thereunder. The Administrative Agent shall not be under any obligation to any
Lender to ascertain or to inquire as to the observance or performance of any of
the agreements contained in, or conditions of, this Agreement or any other Loan
Document, or to inspect the properties, books or records of the Company or any
of the Company's Subsidiaries or Affiliates.
14.5 Reliance by Administrative Agent. The Administrative Agent shall be
entitled to rely, and shall be fully protected in relying, upon any writing,
communication, signature, resolution, representation, notice, consent,
certificate, electronic mail message, affidavit, letter, telegram, facsimile,
telex or telephone message, statement or other document or conversation believed
by it to be genuine and correct and to have been signed, sent or made by the
proper Person or Persons, and upon advice and statements of legal counsel
(including counsel to the Company), independent accountants and other experts
selected by the Administrative Agent. The Administrative Agent shall be fully
justified in failing or refusing to take any action under this Agreement or any
other Loan Document unless it shall first receive such advice or concurrence of
the Required Lenders as it deems appropriate and, if it so requests,
confirmation from the Lenders of their obligation to indemnify the
Administrative Agent against any and all liability and expense which may be
incurred by it by reason of taking or continuing to take any such action. The
Administrative Agent shall in all cases be fully protected in acting, or in
refraining from acting, under this Agreement or any other Loan Document in
accordance with a request or consent of the Required Lenders and such request
and any action taken or failure to act pursuant thereto shall be binding upon
each Lender. For purposes of determining compliance with the conditions
specified in Section 12, each Lender that has signed this Agreement shall be
deemed to have consented to, approved or accepted or to be satisfied with, each
document or other matter required thereunder to be consented to or approved by
or acceptable or satisfactory to a Lender unless the Administrative Agent shall
have received written notice from such Lender prior to the proposed Effective
Date specifying its objection thereto.
14.6 Notice of Default. The Administrative Agent shall not be deemed to
have knowledge or notice of the occurrence of any Event of Default
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except with respect to defaults in the payment of principal, interest and fees
required to be paid to the Administrative Agent for the account of the Lenders,
unless the Administrative Agent shall have received written notice from a Lender
or the Company referring to this Agreement, describing such Event of Default or
Unmatured Event of Default and stating that such notice is a "notice of
default". The Administrative Agent will notify the Lenders of its receipt of any
such notice. The Administrative Agent shall take such action with respect to
such Event of Default or Unmatured Event of Default as may be requested by the
Required Lenders in accordance with Section 13; provided that unless and until
the Administrative Agent has received any such request, the Administrative Agent
may (but shall not be obligated to) take such action, or refrain from taking
such action, with respect to such Event of Default or Unmatured Event of Default
as it shall deem advisable or in the best interest of the Lenders.
14.7 Credit Decision. Each Lender acknowledges that the Administrative
Agent has not made any representation or warranty to it, and that no act by the
Administrative Agent hereafter taken, including any consent and acceptance of
any assignment or review of the affairs of the Loan Parties, shall be deemed to
constitute any representation or warranty by the Administrative Agent to any
Lender as to any matter, including whether the Administrative Agent has
disclosed material information in its possession. Each Lender represents to the
Administrative Agent that it has, independently and without reliance upon the
Administrative Agent and based on such documents and information as it has
deemed appropriate, made its own appraisal of and investigation into the
business, prospects, operations, property, financial and other condition and
creditworthiness of the Loan Parties, and made its own decision to enter into
this Agreement and to extend credit to the Company hereunder. Each Lender also
represents that it will, independently and without reliance upon the
Administrative Agent and based on such documents and information as it shall
deem appropriate at the time, continue to make its own credit analysis,
appraisals and decisions in taking or not taking action under this Agreement and
the other Loan Documents, and to make such investigations as it deems necessary
to inform itself as to the business, prospects, operations, property, financial
and other condition and creditworthiness of the Company. Except for notices,
reports and other documents expressly herein required to be furnished to the
Lenders by the Administrative Agent, the Administrative Agent shall not have any
duty or responsibility to provide any Lender with any credit or other
information concerning the business, prospects, operations, property, financial
or other condition or creditworthiness of the Company which may come into the
possession of the Administrative Agent.
14.8 Indemnification. Whether or not the transactions contemplated hereby
are consummated, each Lender shall indemnify upon demand the Administrative
Agent and its directors, officers, employees and agents (to the extent not
reimbursed by or on behalf of the Company and without limiting the obligation of
the Company to do so), according to its applicable Pro Rata Share, from and
against any and all Indemnified Liabilities (as hereinafter defined); provided
that no Lender shall be liable for any payment to any such Person of any portion
of the Indemnified Liabilities to the extent determined by a final,
nonappealable judgment by a court of competent jurisdiction to have resulted
from the applicable Person's own gross negligence or willful misconduct. No
action taken in accordance with the directions of the Required Lenders shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section. Without limitation of the foregoing, each Lender shall reimburse the
Administrative Agent upon demand for its ratable share of any costs or
out-of-pocket expenses
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(including Attorney Costs and Taxes) incurred by the Administrative Agent in
connection with the preparation, execution, delivery, administration,
modification, amendment or enforcement (whether through negotiations, legal
proceedings or otherwise) of, or legal advice in respect of rights or
responsibilities under, this Agreement, any other Loan Document, or any document
contemplated by or referred to herein, to the extent that the Administrative
Agent is not reimbursed for such expenses by or on behalf of the Company. The
undertaking in this Section shall survive repayment of the Loans, cancellation
of the Notes, expiration or termination of the Letters of Credit, any
foreclosure under, or modification, release or discharge of, any or all of the
Collateral Documents, termination of this Agreement and the resignation or
replacement of the Administrative Agent.
14.9 Administrative Agent in Individual Capacity. Standard Federal and its
Affiliates may make loans to, issue letters of credit for the account of, accept
deposits from, acquire equity interests in and generally engage in any kind of
banking, trust, financial advisory, underwriting or other business with the Loan
Parties and Affiliates as though Standard Federal were not the Administrative
Agent hereunder and without notice to or consent of any Lender. Each Lender
acknowledges that, pursuant to such activities, Standard Federal or its
Affiliates may receive information regarding the Company or its Affiliates
(including information that may be subject to confidentiality obligations in
favor of the Company or such Affiliate) and acknowledge that the Administrative
Agent shall be under no obligation to provide such information to them. With
respect to their Loans (if any), Standard Federal and its Affiliates shall have
the same rights and powers under this Agreement as any other Lender and may
exercise the same as though Standard Federal were not the Administrative Agent,
and the terms "Lender" and "Lenders" include Standard Federal and its
Affiliates, to the extent applicable, in their individual capacities.
14.10 Successor Administrative Agent. The Administrative Agent may resign
as Administrative Agent upon 30 days' notice to the Lenders. If the
Administrative Agent resigns under this Agreement, the Required Lenders shall,
with (so long as no Event of Default exists) the consent of the Company (which
shall not be unreasonably withheld or delayed), appoint from among the Lenders a
successor agent for the Lenders. If no successor agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Lenders and the
Company, a successor agent from among the Lenders. Upon the acceptance of its
appointment as successor agent hereunder, such successor agent shall succeed to
all the rights, powers and duties of the retiring Administrative Agent and the
term "Administrative Agent" shall mean such successor agent, and the retiring
Administrative Agent's appointment, powers and duties as Administrative Agent
shall be terminated. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Section 14 and
Sections 15.5 and 15.16 shall inure to its benefit as to any actions taken or
omitted to be taken by it while it was Administrative Agent under this
Agreement. If no successor agent has accepted appointment as Administrative
Agent by the date which is 30 days following a retiring Administrative Agent's
notice of resignation, the retiring Administrative Agent's resignation shall
nevertheless thereupon become effective and the Lenders shall perform all of the
duties of the Administrative Agent hereunder until such time, if any, as the
Required Lenders appoint a successor agent as provided for above.
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14.11 Subordinated Debt. Each Lender hereby authorizes the Administrative
Agent to give blockage notices in connection with any Subordinated Debt at the
direction of Required Lenders and agrees that it will not act unilaterally to
deliver such notices.
14.12 Administrative Agent May File Proofs of Claim. In case of the
pendency of any receivership, insolvency, liquidation, bankruptcy,
reorganization, arrangement, adjustment, composition or other judicial
proceeding relative to any Loan Party, the Administrative Agent (irrespective of
whether the principal of any Loan shall then be due and payable as herein
expressed or by declaration or otherwise and irrespective of whether the
Administrative Agent shall have made any demand on the Company) shall be
entitled and empowered, by intervention in such proceeding or otherwise:
(a) to file and prove a claim for the whole amount of the principal
and interest owing and unpaid in respect of the Loans, and all other
Obligations that are owing and unpaid and to file such other documents as
may be necessary or advisable in order to have the claims of the Lenders
and the Administrative Agent (including any claim for the reasonable
compensation, expenses, disbursements and advances of the Lenders and the
Administrative Agent and their respective agents and counsel and all other
amounts due the Lenders and the Administrative Agent under Sections 5,
15.5 and 15.16) allowed in such judicial proceedings; and
(b) to collect and receive any monies or other property payable or
deliverable on any such claims and to distribute the same;
and any custodian, receiver, assignee, trustee, liquidator, sequestrator or
other similar official in any such judicial proceeding is hereby authorized by
each Lender to make such payments to the Administrative Agent and, in the event
that the Administrative Agent shall consent to the making of such payments
directly to the Lenders, to pay to the Administrative Agent any amount due for
the reasonable compensation, expenses, disbursements and advances of the
Administrative Agent and its agents and counsel, and any other amounts due the
Administrative Agent under Sections 5, 15.5 and 15.16.
Nothing contained herein shall be deemed to authorize the Administrative
Agent to authorize or consent to or accept or adopt on behalf of any Lender any
plan of reorganization, arrangement, adjustment or composition affecting the
Obligations or the rights of any Lender or to authorize the Administrative Agent
to vote in respect of the claim of any Lender in any such proceeding.
14.13 Other Agents; Arrangers and Managers. None of the Lenders or other
Persons identified on the facing page or signature pages of this Agreement as a
"syndication agent," "documentation agent," "co-agent," "book manager," "lead
manager," "arranger," "sole lead arranger" or "co-arranger", if any, shall have
any right, power, obligation, liability, responsibility or duty under this
Agreement other than, in the case of such Lenders, those applicable to all
Lenders as such. Without limiting the foregoing, none of the Lenders or other
Persons so identified shall have or be deemed to have any fiduciary relationship
with any Lender. Each Lender acknowledges that it has not relied, and will not
rely, on any of the Lenders or other
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Persons so identified in deciding to enter into this Agreement or in taking or
not taking action hereunder.
SECTION 15. GENERAL.
15.1 Waiver; Amendments. No delay on the part of the Administrative Agent
or any Lender in the exercise of any right, power or remedy shall operate as a
waiver thereof, nor shall any single or partial exercise by any of them of any
right, power or remedy preclude other or further exercise thereof, or the
exercise of any other right, power or remedy. No amendment, modification or
waiver of, or consent with respect to, any provision of this Agreement or the
other Loan Documents shall in any event be effective unless the same shall be in
writing and acknowledged by Lenders having an aggregate Pro Rata Shares of not
less than the aggregate Pro Rata Shares expressly designated herein with respect
thereto or, in the absence of such designation as to any provision of this
Agreement, by the Required Lenders, and then any such amendment, modification,
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given. No amendment, modification, waiver or consent
shall (a) extend or increase the Commitment of any Lender without the written
consent of such Lender, (b) extend the date scheduled for payment of any
principal (excluding mandatory prepayments) of or interest on the Loans or any
fees payable hereunder without the written consent of each Lender directly
affected thereby, (c) reduce the principal amount of any Loan, the rate of
interest thereon or any fees payable hereunder, without the consent of each
Lender directly affected thereby; or (d) release any party from its obligations
under the Guaranty (except as provided in Section 2.6), change the definition of
Required Lenders, any provision of this Section 15.1 or reduce the aggregate Pro
Rata Share required to effect an amendment, modification, waiver or consent,
without, in each case, the written consent of all Lenders. No provision of
Sections 6.2.2 or 6.3 with respect to the timing or application of mandatory
prepayments of the Loans shall be amended, modified or waived without the
consent of Lenders having a majority of the aggregate Pro Rata Shares of the
Loans affected thereby. No provision of Section 14 or other provision of this
Agreement affecting the Administrative Agent in its capacity as such shall be
amended, modified or waived without the consent of the Administrative Agent. No
provision of this Agreement relating to the rights or duties of the Issuing
Lender in its capacity as such shall be amended, modified or waived without the
consent of the Issuing Lender. No provision of this Agreement relating to the
rights or duties of the Swing Line Lender in its capacity as such shall be
amended, modified or waived without the consent of the Swing Line Lender.
15.2 Confirmations. The Company and each holder of a Note agree from time
to time, upon written request received by it from the other, to confirm to the
other in writing (with a copy of each such confirmation to the Administrative
Agent) the aggregate unpaid principal amount of the Loans then outstanding under
such Note.
15.3 Notices. Except as otherwise provided in Sections 2.2.2 and 2.2.3,
all notices hereunder shall be in writing (including facsimile transmission) and
shall be sent to the applicable party at its address shown on Annex B or at such
other address as such party may, by written notice received by the other
parties, have designated as its address for such purpose. Notices sent by
facsimile transmission shall be deemed to have been given when sent; notices
sent by mail shall be deemed to have been given three Business Days after the
date when sent by
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registered or certified mail, postage prepaid; and notices sent by hand delivery
or overnight courier service shall be deemed to have been given when received.
For purposes of Sections 2.2.2 and 2.2.3, the Administrative Agent shall be
entitled to rely on telephonic instructions from any person that the
Administrative Agent in good faith believes is an authorized officer or employee
of the Company or the REIT, and the Company and the REIT shall hold the
Administrative Agent and each other Lender harmless from any loss, cost or
expense resulting from any such reliance.
15.4 Computations. Where the character or amount of any asset or liability
or item of income or expense is required to be determined, or any consolidation
or other accounting computation is required to be made, for the purpose of this
Agreement, such determination or calculation shall, to the extent applicable and
except as otherwise specified in this Agreement, be made in accordance with
GAAP, consistently applied; provided that if the Company notifies the
Administrative Agent that the Company wishes to amend any covenant in Section 11
(or any related definition) to eliminate or to take into account the effect of
any change in GAAP on the operation of such covenant (or if the Administrative
Agent notifies the Company that the Required Lenders wish to amend Section 11
(or any related definition) for such purpose), then the Company's compliance
with such covenant shall be determined on the basis of GAAP in effect
immediately before the relevant change in GAAP became effective, until either
such notice is withdrawn or such covenant (or related definition) is amended in
a manner satisfactory to the Company and the Required Lenders.
15.5 Costs, Expenses and Taxes. The Company agrees to pay on demand all
reasonable out-of-pocket costs and expenses of the Administrative Agent
(including Attorney Costs and any Taxes) in connection with the preparation,
execution, syndication, delivery and administration (including perfection and
protection of any collateral and the costs of Intralinks (or other similar
service), if applicable) of this Agreement, the other Loan Documents and all
other documents provided for herein or delivered or to be delivered hereunder or
in connection herewith (including any amendment, supplement or waiver to any
Loan Document), whether or not the transactions contemplated hereby or thereby
shall be consummated, and all reasonable out-of-pocket costs and expenses
(including Attorney Costs and any Taxes) incurred by the Administrative Agent
and each Lender after an Event of Default in connection with the collection of
the Obligations or the enforcement of this Agreement the other Loan Documents or
any such other documents or during any workout, restructuring or negotiations in
respect thereof. In addition, the Company agrees to pay, and to save the
Administrative Agent and the Lenders harmless from all liability for, any fees
of the Company's auditors in connection with any reasonable exercise by the
Administrative Agent and the Lenders of their rights pursuant to Section 10.2.
All Obligations provided for in this Section 15.5 shall survive repayment of the
Loans, cancellation of the Notes, expiration or termination of the Letters of
Credit and termination of this Agreement.
15.6 Assignments; Participations.
15.6.1 Assignments. (a) Any Lender may at any time assign to one or
more Persons (any such Person, an "Assignee") all or any portion of such
Lender's Loans and Commitments, with the prior written consent of the
Administrative Agent, the Issuing Lender (for an assignment of the Revolving
Loans and the Revolving Commitment) and, so long as no
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Event of Default exists, the Company (which consents shall not be unreasonably
withheld or delayed and shall not be required for an assignment by a Lender to a
Lender or an Affiliate of a Lender). Each Assignee must represent that none of
consideration used to make the purchase of a Commitment are "plan assets" as
defined under ERISA and that the rights and interest of the Assignee in and
under the Loan Documents will not be "plan assets" under ERISA. Except as the
Administrative Agent may otherwise agree, any such assignment shall be in a
minimum aggregate amount equal to $5,000,000 or, if less, the remaining
Commitment and Loans held by the assigning Lender. The Company and the
Administrative Agent shall be entitled to continue to deal solely and directly
with such Lender in connection with the interests so assigned to an Assignee
until the Administrative Agent shall have received and accepted an effective
assignment agreement in substantially the form of Exhibit D hereto (an
"Assignment Agreement") executed, delivered and fully completed by the
applicable parties thereto and a processing fee of $3,500. No assignment may be
made to any Person if at the time of such assignment the Company would be
obligated to pay any greater amount under Section 7.6 or 8 to the Assignee than
the Company is then obligated to pay to the assigning Lender under such Sections
(and if any assignment is made in violation of the foregoing, the Company will
not be required to pay such greater amounts). Any attempted assignment not made
in accordance with this Section 15.6.1 shall be treated as the sale of a
participation under Section 15.6.2. The Company shall be deemed to have granted
its consent to any assignment requiring its consent hereunder unless the Company
has expressly objected to such assignment within three Business Days after
notice thereof.
(b) From and after the date on which the conditions described above
have been met, (i) such Assignee shall be deemed automatically to have
become a party hereto and, to the extent that rights and obligations
hereunder have been assigned to such Assignee pursuant to such Assignment
Agreement, shall have the rights and obligations of a Lender hereunder and
(ii) the assigning Lender, to the extent that rights and obligations
hereunder have been assigned by it pursuant to such Assignment Agreement,
shall be released from its rights (other than its indemnification rights)
and obligations hereunder. Upon the request of the Assignee (and, as
applicable, the assigning Lender) pursuant to an effective Assignment
Agreement, the Company shall execute and deliver to the Administrative
Agent for delivery to the Assignee (and, as applicable, the assigning
Lender) a Note in the principal amount of the Assignee's Pro Rata Share of
the Revolving Commitment plus the principal amount of the Assignee's Term
Loan[s] (and, as applicable, a Note in the principal amount of the Pro
Rata Share of the Revolving Commitment retained by the assigning Lender
plus the principal amount of the Term Loan[s] retained by the assigning
Lender). Each such Note shall be dated the effective date of such
assignment. Upon receipt by the assigning Lender of such Note, the
assigning Lender shall return to the Company any prior Note held by it.
(c) Any Lender may at any time pledge or assign a security interest
in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to
any such pledge or assignment of a security interest; provided that no
such pledge or assignment of a security interest shall release a Lender
from any of its obligations hereunder or substitute any such pledgee or
assignee for such Lender as a party hereto.
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15.6.2 Participations. Any Lender may at any time sell to one or
more Persons participating interests in its Loans, Commitments or other
interests hereunder (any such Person, a "Participant"). In the event of a sale
by a Lender of a participating interest to a Participant, (a) such Lender's
obligations hereunder shall remain unchanged for all purposes, (b) the Company
and the Administrative Agent shall continue to deal solely and directly with
such Lender in connection with such Lender's rights and obligations hereunder
and (c) all amounts payable by the Company shall be determined as if such Lender
had not sold such participation and shall be paid directly to such Lender. No
Participant shall have any direct or indirect voting rights hereunder except
with respect to any event described in Section 15.1 expressly requiring the
unanimous vote of all Lenders or, as applicable, all affected Lenders. Each
Lender agrees to incorporate the requirements of the preceding sentence into
each participation agreement which such Lender enters into with any Participant.
The Company agrees that if amounts outstanding under this Agreement are due and
payable (as a result of acceleration or otherwise), each Participant shall be
deemed to have the right of set-off in respect of its participating interest in
amounts owing under this Agreement and with respect to any Letter of Credit to
the same extent as if the amount of its participating interest were owing
directly to it as a Lender under this Agreement; provided that such right of
set-off shall be subject to the obligation of each Participant to share with the
Lenders, and the Lenders agree to share with each Participant, as provided in
Section 7.5. The Company also agrees that each Participant shall be entitled to
the benefits of Section 7.6 or 8 as if it were a Lender (provided that on the
date of the participation no Participant shall be entitled to any greater
compensation pursuant to Section 7.6 or 8 than would have been paid to the
participating Lender on such date if no participation had been sold and that
each Participant complies with Section 7.6(d) as if it were an Assignee).
15.7 Register. The Administrative Agent shall maintain a copy of each
Assignment Agreement delivered and accepted by it and register (the "Register")
for the recordation of names and addresses of the Lenders and the Commitment of
each Lender from time to time and whether such Lender is the original Lender or
the Assignee. No assignment shall be effective unless and until the Assignment
Agreement is accepted and registered in the Register. All records of transfer of
a Lender's interest in the Register shall be conclusive, absent manifest error,
as to the ownership of the interests in the Loans. The Administrative Agent
shall not incur any liability of any kind with respect to any Lender with
respect to the maintenance of the Register.
15.8 GOVERNING LAW. THIS AGREEMENT AND EACH NOTE SHALL BE A CONTRACT MADE
UNDER AND GOVERNED BY THE INTERNAL LAWS OF THE STATE OF MICHIGAN APPLICABLE TO
CONTRACTS MADE AND TO BE PERFORMED ENTIRELY WITHIN SUCH STATE, WITHOUT REGARD TO
CONFLICT OF LAWS PRINCIPLES.
15.9 Confidentiality. The Administrative Agent and each Lender agree to
use commercially reasonable efforts (equivalent to the efforts the
Administrative Agent or such Lender applies to maintain the confidentiality of
its own confidential information) to maintain as confidential all information
provided to them by any Loan Party and designated as confidential, except that
the Administrative Agent and each Lender may disclose such information (a) to
Persons employed or engaged by the Administrative Agent or such Lender in
evaluating, approving, structuring or administering the Loans and the
Commitments; (b) to any assignee or participant or potential assignee or
participant that has agreed to comply with the covenant
70
contained in this Section 15.9 (and any such assignee or participant or
potential assignee or participant may disclose such information to Persons
employed or engaged by them as described in clause (a) above); (c) as required
or requested by any federal or state regulatory authority or examiner, or any
insurance industry association, or as reasonably believed by the Administrative
Agent or such Lender to be compelled by any court decree, subpoena or legal or
administrative order or process; (d) as, on the advice of the Administrative
Agent's or such Lender's counsel, is required by law; (e) in connection with the
exercise of any right or remedy under the Loan Documents or in connection with
any litigation to which the Administrative Agent or such Lender is a party; (f)
to any nationally recognized rating agency that requires access to information
about a Lender's investment portfolio in connection with ratings issued with
respect to such Lender; (g) to any Affiliate of the Administrative Agent, the
Issuing Lender or any other Lender who may provide Bank Products to the Loan
Parties; or (h) that ceases to be confidential through no fault of the
Administrative Agent or any Lender. Notwithstanding the foregoing, the Company
consents to the publication by the Administrative Agent or any Lender of a
tombstone or similar advertising material relating to the financing transactions
contemplated by this Agreement, and the Administrative Agent reserves the right
to provide to industry trade organizations information necessary and customary
for inclusion in league table measurements.
15.10 Severability. Whenever possible each provision of this Agreement
shall be interpreted in such manner as to be effective and valid under
applicable law, but if any provision of this Agreement shall be prohibited by or
invalid under applicable law, such provision shall be ineffective to the extent
of such prohibition or invalidity, without invalidating the remainder of such
provision or the remaining provisions of this Agreement. All obligations of the
Company and the REIT and rights of the Administrative Agent and the Lenders
expressed herein or in any other Loan Document shall be in addition to and not
in limitation of those provided by applicable law.
15.11 Nature of Remedies. All Obligations of the Company and the REIT and
rights of the Administrative Agent and the Lenders expressed herein or in any
other Loan Document shall be in addition to and not in limitation of those
provided by applicable law. No failure to exercise and no delay in exercising,
on the part of the Administrative Agent or any Lender, any right, remedy, power
or privilege hereunder, shall operate as a waiver thereof; nor shall any single
or partial exercise of any right, remedy, power or privilege hereunder preclude
any other or further exercise thereof or the exercise of any other right,
remedy, power or privilege.
15.12 Entire Agreement. This Agreement, together with the other Loan
Documents, embodies the entire agreement and understanding among the parties
hereto and supersedes all prior or contemporaneous agreements and understandings
of such Persons, verbal or written, relating to the subject matter hereof and
thereof (except as relates to the fees described in Section 5.3) and any prior
arrangements made with respect to the payment by the Company of (or any
indemnification for) any fees, costs or expenses payable to or incurred (or to
be incurred) by or on behalf of the Administrative Agent or the Lenders.
15.13 Counterparts. This Agreement may be executed in any number of
counterparts and by the different parties hereto on separate counterparts and
each such counterpart shall be deemed to be an original, but all such
counterparts shall together constitute but one and the same Agreement. Receipt
of an executed signature page to this Agreement by facsimile or other
71
electronic transmission shall constitute effective delivery thereof. Electronic
records of executed Loan Documents maintained by the Lenders shall deemed to be
originals.
15.14 Successors and Assigns. This Agreement shall be binding upon the
Company, the REIT, the Lenders and the Administrative Agent and their respective
successors and assigns, and shall inure to the benefit of the Company, the
Lenders and the Administrative Agent and the successors and assigns of the
Lenders and the Administrative Agent. No other Person shall be a direct or
indirect legal beneficiary of, or have any direct or indirect cause of action or
claim in connection with, this Agreement or any of the other Loan Documents. The
Company may not assign or transfer any of its rights or Obligations under this
Agreement without the prior written consent of the Administrative Agent and each
Lender.
15.15 Captions. Section captions used in this Agreement are for
convenience only and shall not affect the construction of this Agreement.
15.16 Customer Identification - USA Patriot Act Notice. The Administrative
Agent hereby notifies the Company and each of the other Loan Parties that
pursuant to the requirements of the USA Patriot Act (Title III of Pub. L.
107-56, signed into law October 26, 2001) (the "Act"), and the policies and
practices of the Administrative Agent and the Lenders, the Administrative Agent
and the Lenders are required to obtain, verify and record certain information
and documentation that identifies the Loan Parties, which information includes
the names and addresses of the Loan Parties and such other information that will
allow the Administrative Agent and the Lenders to identify the Loan Parties in
accordance with the Act.
15.17 INDEMNIFICATION BY THE COMPANY. IN CONSIDERATION OF THE EXECUTION
AND DELIVERY OF THIS AGREEMENT BY THE ADMINISTRATIVE AGENT AND THE LENDERS AND
THE AGREEMENT TO EXTEND THE COMMITMENTS PROVIDED HEREUNDER, THE COMPANY HEREBY
AGREES TO INDEMNIFY, EXONERATE AND HOLD THE ADMINISTRATIVE AGENT, EACH LENDER
AND EACH OF THE OFFICERS, DIRECTORS, EMPLOYEES, AFFILIATES AND AGENTS OF THE
ADMINISTRATIVE AGENT AND EACH LENDER (EACH A "LENDER PARTY") FREE AND HARMLESS
FROM AND AGAINST ANY AND ALL ACTIONS, CAUSES OF ACTION, SUITS, LOSSES,
LIABILITIES, DAMAGES AND EXPENSES, INCLUDING ATTORNEY COSTS (COLLECTIVELY, THE
"INDEMNIFIED LIABILITIES"), INCURRED BY THE LENDER PARTIES OR ANY OF THEM AS A
RESULT OF, OR ARISING OUT OF, OR RELATING TO (A) ANY TENDER OFFER, MERGER,
PURCHASE OF CAPITAL SECURITIES, PURCHASE OF ASSETS OR OTHER SIMILAR TRANSACTION
FINANCED OR PROPOSED TO BE FINANCED IN WHOLE OR IN PART, DIRECTLY OR INDIRECTLY,
WITH THE PROCEEDS OF ANY OF THE LOANS, (B) THE USE, HANDLING, RELEASE, EMISSION,
DISCHARGE, TRANSPORTATION, STORAGE, TREATMENT OR DISPOSAL OF ANY HAZARDOUS
SUBSTANCE AT ANY PROPERTY OWNED OR LEASED BY ANY LOAN PARTY, (C) ANY VIOLATION
OF ANY ENVIRONMENTAL LAWS WITH RESPECT TO CONDITIONS AT ANY PROPERTY OWNED OR
LEASED BY ANY LOAN PARTY OR THE OPERATIONS CONDUCTED THEREON, (D) THE
INVESTIGATION, CLEANUP OR REMEDIATION OF OFFSITE LOCATIONS AT
72
WHICH ANY LOAN PARTY OR THEIR RESPECTIVE PREDECESSORS ARE ALLEGED TO HAVE
DIRECTLY OR INDIRECTLY DISPOSED OF HAZARDOUS SUBSTANCES OR (E) THE EXECUTION,
DELIVERY, PERFORMANCE OR ENFORCEMENT OF THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT BY ANY OF THE LENDER PARTIES, EXCEPT FOR ANY SUCH INDEMNIFIED
LIABILITIES ARISING ON ACCOUNT OF THE APPLICABLE LENDER PARTY'S GROSS NEGLIGENCE
OR WILLFUL MISCONDUCT AS DETERMINED BY A FINAL, NONAPPEALABLE JUDGMENT BY A
COURT OF COMPETENT JURISDICTION. IF AND TO THE EXTENT THAT THE FOREGOING
UNDERTAKING MAY BE UNENFORCEABLE FOR ANY REASON, THE COMPANY HEREBY AGREES TO
MAKE THE MAXIMUM CONTRIBUTION TO THE PAYMENT AND SATISFACTION OF EACH OF THE
INDEMNIFIED LIABILITIES WHICH IS PERMISSIBLE UNDER APPLICABLE LAW. ALL
OBLIGATIONS PROVIDED FOR IN THIS SECTION 15.17 SHALL SURVIVE REPAYMENT OF THE
LOANS, CANCELLATION OF THE NOTES, EXPIRATION OR TERMINATION OF THE LETTERS OF
CREDIT, AND TERMINATION OF THIS AGREEMENT.
15.18 Nonliability of Lenders. The relationship between the Company on the
one hand and the Lenders and the Administrative Agent on the other hand shall be
solely that of borrower and lender. Neither the Administrative Agent nor any
Lender has any fiduciary relationship with or duty to any Loan Party arising out
of or in connection with this Agreement or any of the other Loan Documents, and
the relationship between the Loan Parties, on the one hand, and the
Administrative Agent and the Lenders, on the other hand, in connection herewith
or therewith is solely that of debtor and creditor. Neither the Administrative
Agent nor any Lender undertakes any responsibility to any Loan Party to review
or inform any Loan Party of any matter in connection with any phase of any Loan
Party's business or operations. The Company agrees, on behalf of itself and each
other Loan Party, that neither the Administrative Agent nor any Lender shall
have liability to any Loan Party (whether sounding in tort, contract or
otherwise) for losses suffered by any Loan Party in connection with, arising out
of, or in any way related to the transactions contemplated and the relationship
established by the Loan Documents, or any act, omission or event occurring in
connection therewith, unless it is determined in a final non-appealable judgment
by a court of competent jurisdiction that such losses resulted from the gross
negligence or willful misconduct of the party from which recovery is sought. NO
LENDER PARTY SHALL BE LIABLE FOR ANY DAMAGES ARISING FROM THE USE BY OTHERS OF
ANY INFORMATION OR OTHER MATERIALS OBTAINED THROUGH INTRALINKS OR OTHER SIMILAR
INFORMATION TRANSMISSION SYSTEMS IN CONNECTION WITH THIS AGREEMENT, NOR SHALL
ANY LENDER PARTY HAVE ANY LIABILITY WITH RESPECT TO, AND THE COMPANY AND THE
REIT, ON BEHALF OF ITSELF AND EACH OTHER LOAN PARTY, HEREBY WAIVES, RELEASES AND
AGREES NOT TO SUE FOR ANY SPECIAL, INDIRECT OR CONSEQUENTIAL DAMAGES RELATING TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT OR ARISING OUT OF ITS ACTIVITIES IN
CONNECTION HEREWITH OR THEREWITH (WHETHER BEFORE OR AFTER THE EFFECTIVE DATE).
The Company and the REIT each acknowledges that it has been advised by counsel
in the negotiation, execution and delivery of this Agreement and the other Loan
Documents to which it is a party. No joint venture is created hereby or by the
other Loan Documents or
73
otherwise exists by virtue of the transactions contemplated hereby among the
Lenders or among the Grantors and the Lenders.
15.19 FORUM SELECTION AND CONSENT TO JURISDICTION. ANY LITIGATION BASED
HEREON, OR ARISING OUT OF, UNDER, OR IN CONNECTION WITH THIS AGREEMENT OR ANY
OTHER LOAN DOCUMENT, SHALL BE BROUGHT AND MAINTAINED EXCLUSIVELY IN THE COURTS
OF THE STATE OF MICHIGAN OR IN THE UNITED STATES DISTRICT COURT FOR THE EASTERN
DISTRICT OF MICHIGAN; PROVIDED THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR
OPERATE TO PRECLUDE THE ADMINISTRATIVE AGENT FROM BRINGING SUIT OR TAKING OTHER
LEGAL ACTION IN ANY OTHER JURISDICTION. THE COMPANY AND THE REIT HEREBY
EXPRESSLY AND IRREVOCABLY SUBMIT TO THE JURISDICTION OF THE COURTS OF THE STATE
OF MICHIGAN AND OF THE UNITED STATES DISTRICT COURT FOR THE EASTERN DISTRICT OF
MICHIGAN FOR THE PURPOSE OF ANY SUCH LITIGATION AS SET FORTH ABOVE. THE COMPANY
AND THE REIT FURTHER IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS BY REGISTERED
MAIL, POSTAGE PREPAID, OR BY PERSONAL SERVICE WITHIN OR WITHOUT THE STATE OF
MICHIGAN. THE COMPANY AND THE REIT HEREBY EXPRESSLY AND IRREVOCABLY WAIVE, TO
THE FULLEST EXTENT PERMITTED BY LAW, ANY OBJECTION WHICH IT MAY NOW OR HEREAFTER
HAVE TO THE LAYING OF VENUE OF ANY SUCH LITIGATION BROUGHT IN ANY SUCH COURT
REFERRED TO ABOVE AND ANY CLAIM THAT ANY SUCH LITIGATION HAS BEEN BROUGHT IN AN
INCONVENIENT FORUM.
15.20 WAIVER OF JURY TRIAL. EACH OF THE COMPANY, THE REIT, THE
ADMINISTRATIVE AGENT AND EACH LENDER HEREBY WAIVES ANY RIGHT TO A TRIAL BY JURY
IN ANY ACTION OR PROCEEDING TO ENFORCE OR DEFEND ANY RIGHTS UNDER THIS
AGREEMENT, ANY NOTE, ANY OTHER LOAN DOCUMENT AND ANY AMENDMENT, INSTRUMENT,
DOCUMENT OR AGREEMENT DELIVERED OR WHICH MAY IN THE FUTURE BE DELIVERED IN
CONNECTION HEREWITH OR THEREWITH OR ARISING FROM ANY LENDING RELATIONSHIP
EXISTING IN CONNECTION WITH ANY OF THE FOREGOING, AND AGREES THAT ANY SUCH
ACTION OR PROCEEDING SHALL BE TRIED BEFORE A COURT AND NOT BEFORE A JURY.
[SIGNATURES ON FOLLOWING PAGES]
74
The parties hereto have caused this Agreement to be duly executed and
delivered by their duly authorized officers as of September 30, 2004, which
shall be the effective date hereof (the "Effective Date") notwithstanding the
date first set forth above.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP, a Michigan limited partnership
By: Sun Communities, Inc., a
Maryland corporation, its general partner
By: /s/ Jeffrey P. Jorissen
--------------------------------
Jeffrey P. Jorissen
Title: Executive Vice President
and Chief Financial Officer
SUN COMMUNITIES, INC., a Maryland
corporation, its general partner
By: /s/ Jeffrey P. Jorissen
--------------------------------
Jeffrey P. Jorissen
Title: Executive Vice President and
Chief Financial Office
STANDARD FEDERAL BANK NATIONAL
ASSOCIATION, as Administrative Agent, as
Issuing Lender and as a Lender
By: /s/ Scott M. McLean
---------------------------------
Scott M. McLean
Title: Vice President
THE HUNTINGTON NATIONAL BANK
By: /s/ Daniel LeFevre
------------------------------
Daniel LeFevre
Title: Vice President
NATIONAL CITY BANK OF THE MIDWEST
By: /s/ Timothy H. Hampton
------------------------------
Timothy H. Hampton
Title: Vice President
SOVEREIGN BANK
By: /s/ Katherine M. Felpel
-------------------------------
Katherine M. Felpel
Title: Assistant Vice President
ANNEX A
LENDERS AND PRO RATA SHARES
Revolving Pro
Commitment Rata
Lender Amount Share*
------ ------ ------
Standard Federal $35,000,000.00** 38.888888889%
The Huntington National Bank $25,000,000.00 27.777777778%
National City Bank of the Midwest $15,000,000.00 16.666666667%
Sovereign Bank $15,000,000.00 16.666666667%
TOTALS $90,000,000.00 100%
** Includes Swing Line Commitment Amount of $5,000,000.00.
ANNEX A-1
ANNEX B
ADDRESSES FOR NOTICES
SUN COMMUNITIES OPERATING LIMITED PARTNERSHIP:
Sun Communities Operating Limited Partnership
27777 Franklin Road, Suite 200
Southfield, MI 48034
Attention: Jeffrey P. Jorissen
Telephone: (248) 208-2500
Facsimile: (248) 208-2640
With required copies to:
Jaffe, Raitt, Heuer & Weiss
27777 Franklin Road, Suite 2500
Southfield, MI 48034
Attention: Gail A. Morris and Arthur A. Weiss
Telephone: (248) 351-3000
Facsimile: (248) 351-3082
SUN COMMUNITIES, INC.:
Sun Communities, Inc.
27777 Franklin Road, Suite 200
Southfield, MI 48034
Attention: Jeffrey P. Jorissen
Telephone: (248) 208-2500
Facsimile: (248) 208-2640
With required copies to:
Jaffe, Raitt, Heuer & Weiss
27777 Franklin Road, Suite 2500
Southfield, MI 48034
Attention: Gail A. Morris and Arthur A. Weiss
Telephone: (248) 351-3000
Facsimile: (248) 351-3082
ANNEX B-1
STANDARD FEDERAL BANK NATIONAL ASSOCIATION, as Administrative Agent,
Issuing Lender and a Lender:
Standard Federal Bank N.A.
Commercial Real Estate Department
2600 West Big Beaver Road
Troy, MI 48084
Attention: Scott M. McLean
Telephone: (248) 822-5605
Facsimile: (248) 822-5749
With required copies to:
Dykema Gossett PLLC
39577 Woodward Avenue, Suite 300
Bloomfield Hills, MI 48304
Attention: B. Kingsley Buhl
Telephone: (248) 203-0702
Facsimile: (248) 203-0763
THE HUNTINGTON NATIONAL BANK:
The Huntington National Bank
803 West Big Beaver Road, Suite 202
Troy, Michigan 48084-4726
Attention: Daniel LeFevre
Telephone: 248-244-3574
Facsimile: 248-244-3504 fax
NATIONAL CITY BANK OF THE MIDWEST:
National City Bank
1001 South Worth
Birmingham, MI 48009
Attention: Timothy H. Hampton
Telephone: (248) 901-2061
Facsimile: (248) 901-2188
With required copies to:
Butzel Long, P.C.
100 Bloomfield Hills Parkway, Suite 200
Bloomfield Hills, Michigan 48304
Attention: Joseph J. DeVito, Esq.
Telephone: (248) 258-1312
Facsimile: (248) 258-1439
ANNEX B-2
SOVEREIGN BANK:
Sovereign Bank
75 State Street MA1 SST 04-11
Boston, MA 02109
Attention: T Gregory Donohue
Telephone: 617-757-5578
Facsimile: 617-757-5652
[OTHER LENDERS]
ANNEX B-3
EXHIBIT A
FORM OF NOTE
$______________ September ___, 2004
Troy, Michigan
The undersigned, for value received, promises to pay to the order of
______________ (the "Lender") at the principal office of Standard Federal Bank
National Association (the "Administrative Agent") in Troy, Michigan the
aggregate unpaid amount of all Loans made to the undersigned by the Lender
pursuant to the Credit Agreement referred to below (as shown on the schedule
attached hereto (and any continuation thereof) or in the records of the Lender),
such principal amount to be payable on the dates set forth in the Credit
Agreement.
The undersigned further promises to pay interest on the unpaid principal
amount of each Loan from the date of such Loan until such Loan is paid in full,
payable at the rate(s) and at the time(s) set forth in the Credit Agreement.
Payments of both principal and interest are to be made in lawful money of the
United States of America.
This Note evidences indebtedness incurred under, and is subject to the
terms and provisions of, the Credit Agreement, dated as of September 30, 2004
(as amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement"; terms not otherwise defined herein are used herein as
defined in the Credit Agreement), among the undersigned, Sun Communities, Inc.,
certain financial institutions (including the Lender) and the Administrative
Agent, to which Credit Agreement reference is hereby made for a statement of the
terms and provisions under which this Note may or must be paid prior to its due
date or its due date accelerated.
This Note is made under and governed by the laws of the State of Michigan
applicable to contracts made and to be performed entirely within such State.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: _________________________________
Title: _________________________________
EX A-1
EXHIBIT B
FORM OF COMPLIANCE CERTIFICATE
To: Standard Federal Bank National Association, as Administrative Agent
Please refer to the Credit Agreement dated as of September 30, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Sun Communities Operating Limited Partnership (the
"Company"), Sun Communities, Inc., various financial institutions and Standard
Federal Bank National Association, as Administrative Agent. Terms used but not
otherwise defined herein are used herein as defined in the Credit Agreement.
Reports. Enclosed herewith is a copy of the [ANNUAL AUDITED/QUARTERLY]
report of the Company as at _____________, ____ (the "Computation Date"), which
report fairly presents in all material respects the financial condition and
results of operations [(SUBJECT TO THE ABSENCE OF FOOTNOTES AND TO NORMAL
YEAR-END ADJUSTMENTS)] of the Company as of the Computation Date and has been
prepared in accordance with GAAP consistently applied.
Financial Tests. The Company hereby certifies and warrants to you that the
following is a true and correct computation as at the Computation Date of the
following ratios and/or financial restrictions contained in the Credit
Agreement:
[INSERT FINANCIAL TESTS]
The Company further certifies to you that no Event of Default or Unmatured
Event of Default has occurred and is continuing.
The Company has caused this Certificate to be executed and delivered by
its duly authorized officer on _________, ____.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: _________________________________
Title: _________________________________
EX B-1
EXHIBIT C
FORM OF BORROWING BASE CERTIFICATE
To: Standard Federal Bank National Association, as Administrative Agent
Please refer to the Credit Agreement dated as of September 30, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Sun Communities Operating Limited Partnership (the
"Company"), Sun Communities, Inc., various financial institutions and Standard
Federal Bank National Association, as Administrative Agent. This certificate
(this "Certificate"), together with supporting calculations attached hereto, is
delivered to you pursuant to the terms of the Credit Agreement. Capitalized
terms used but not otherwise defined herein shall have the same meanings herein
as in the Credit Agreement.
The Company hereby certifies and warrants to the Administrative Agent and
the Lenders that at the close of business on ______________, ____ (the
"Calculation Date"), the Borrowing Base was $_____________, computed as set
forth on the schedule attached hereto.
The Company has caused this Certificate to be executed and delivered by
its officer thereunto duly authorized on ___________, ______.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: _________________________________
Title: _________________________________
EX C-1
SCHEDULE TO BORROWING BASE CERTIFICATE
DATED as of [_________________]
[INSERT BORROWING BASE CALCULATIONS]
1. $_____________
2. $_____________
3. $_____________
4. $_____________
5. $_____________
6. $_____________
EXHIBIT E
FORM OF NOTICE OF BORROWING
To: Standard Federal Bank National Association, as Administrative Agent
Please refer to the Credit Agreement dated as of September 30, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Sun Communities Operating Limited Partnership (the
"Company"), Sun Communities, Inc., various financial institutions and LaSalle
Bank National Association, as Administrative Agent. Terms used but not otherwise
defined herein are used herein as defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.2
of the Credit Agreement, of a request hereby for a borrowing as follows:
(i) The requested borrowing date for the proposed borrowing (which is a
Business Day) is _______________,____.
(ii) The aggregate amount of the proposed borrowing is $______________.
(iii) The type of Revolving Loans comprising the proposed borrowing are
[Base Rate] [LIBOR] Loans.
(iv) The duration of the Interest Period for each LIBOR Loan made as part
of the proposed borrowing, if applicable, is ___________ months (which shall be
1, 2, 3, 6 or 9 months).
The undersigned hereby certifies that on the date hereof and on the date
of borrowing set forth above, and immediately after giving effect to the
borrowing requested hereby: (i) there exists and there shall exist no Unmatured
Event of Default or Event of Default under the Credit Agreement; and (ii) each
of the representations and warranties contained in the Credit Agreement and the
other Loan Documents is true and correct as of the date hereof, except to the
extent that such representation or warranty expressly relates to another date
and except for changes therein expressly permitted or expressly contemplated by
the Credit Agreement.
The Company has caused this Notice of Borrowing to be executed and
delivered by its officer thereunto duly authorized on ___________, ______.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: _________________________________
Title: _________________________________
EX E-1
EXHIBIT F
FORM OF NOTICE OF CONVERSION/CONTINUATION
To: Standard Federal Bank National Association, as Administrative Agent
Please refer to the Credit Agreement dated as of September 30, 2004 (as
amended, restated, supplemented or otherwise modified from time to time, the
"Credit Agreement") among Sun Communities Operating Limited Partnership (the
"Company"), Sun Communities, Inc., various financial institutions and LaSalle
Bank National Association, as Administrative Agent. Terms used but not otherwise
defined herein are used herein as defined in the Credit Agreement.
The undersigned hereby gives irrevocable notice, pursuant to Section 2.2.3
of the Credit Agreement, of its request to:
(a) on [date] convert $[________]of the aggregate outstanding principal
amount of the [_______] Loan, bearing interest at the [________] Rate, into a(n)
[________] Loan [and, in the case of a LIBOR Loan, having an Interest Period of
[_____] month(s)];
[(b) on [date] continue $[________]of the aggregate outstanding principal
amount of the [_______] Loan, bearing interest at the LIBOR Rate, as a LIBOR
Loan having an Interest Period of [_____] month(s)].
The undersigned hereby represents and warrants that all of the conditions
contained in Section 12.2 of the Credit Agreement have been satisfied on and as
of the date hereof, and will continue to be satisfied on and as of the date of
the conversion/continuation requested hereby, before and after giving effect
thereto.
The Company has caused this Notice of Conversion/Continuation to be
executed and delivered by its officer thereunto duly authorized on ___________,
______.
SUN COMMUNITIES OPERATING LIMITED
PARTNERSHIP
By: _________________________________
Title: _________________________________
EX F-1