Item 6. Exhibit (4)(l)
CREDIT AGREEMENT
DATED AS OF JULY 23, 2002
AMONG
WASHINGTON REAL ESTATE INVESTMENT TRUST,
AS BORROWER
AND
BANK ONE, NA,
AS LENDER
AND
BANK ONE, NA,
AS AGENT
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CREDIT AGREEMENT
This Credit Agreement ("Agreement"), dated as of July 23, 2002, is among
Washington Real Estate Investment Trust, a real estate investment trust
organized under the laws of the State of Maryland (the "Borrower"), Bank One,
NA, a national banking association having its principal office in Chicago,
Illinois, as "Agent", and the Lenders (as hereinafter defined).
RECITALS
A. The Borrower is primarily engaged in the business of purchasing,
developing, owning, operating and renovating apartment buildings, shopping
centers, office buildings, business centers and warehouses.
B. The Borrower is listed on the New York Stock Exchange and is qualified
as a real estate investment trust.
C. Borrower has requested that the Lenders make loans available to Borrower
of up to $25,000,000, subject to future increases to up to $75,000,000, pursuant
to the terms of this Agreement. The Agent and the Lenders have agreed to do so.
NOW, THEREFORE, in consideration of the mutual covenants and agreements
herein contained, the parties hereto agree as follows:
ARTICLE I.
DEFINITIONS
As used in this Agreement:
"ABR Applicable Margin" means, as of any date, the Applicable Margin in
effect on such date with respect to Floating Rate Advances and Floating Rate
Loans.
"Acquisition" means any transaction, or any series of related transactions,
consummated on or after the date of this Agreement, by which the Borrower or any
of its Subsidiaries (i) acquires any going business or all or substantially all
of the assets of any firm, corporation or division thereof, whether through
purchase of assets, merger or otherwise or (ii) directly or indirectly acquires
(in one transaction or as the most recent transaction in a series of
transactions) at least a majority (in number of votes) of the securities of a
corporation which have ordinary voting power for the election of directors
(other than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the outstanding
partnership interests of a partnership.
"Advance" means a borrowing hereunder consisting of the aggregate amount of
the several Loans made by the Lenders to the Borrower of the same Type and, in
the case of LIBOR Advances, for the same Interest Period.
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"Affiliate" of any Person means any other Person directly or indirectly
controlling, controlled by or under common control with such Person. A Person
shall be deemed to control another Person if the controlling Person owns 10% or
more of any class of voting securities (or other ownership interests) of the
controlled Person or possesses, directly or indirectly, the power to direct or
cause the direction of the management or policies of the controlled Person,
whether through ownership of stock, by contract or otherwise.
"Agent" means Bank One, NA in its capacity as agent for the Lenders
pursuant to Article X, and not in its individual capacity as a Lender, and any
successor Agent appointed pursuant to Article X.
"Aggregate Commitment" means the aggregate of the Commitments of all the
Lenders (not to exceed the Maximum Aggregate Commitment), as modified from time
to time pursuant to the terms hereof.
"Agreement" means this Credit Agreement, as it may be amended or modified
and in effect from time to time.
"Alternate Base Rate" means, for any day, a rate of interest per annum
equal to the higher of (i) the Prime Rate for such day and (ii) the sum of
Federal Funds Effective Rate for such day plus 1/2% per annum.
"Applicable Margin" means the ABR Applicable Margin or the LIBOR Applicable
Margin as applicable.
"Article" means an article of this Agreement unless another document is
specifically referenced.
"Authorized Officer" means any of the Chief Executive Officer, President,
Chief Financial Officer or Chief Accounting Officer of the Borrower, acting
singly.
"Borrower" means Washington Real Estate Investment Trust, a real estate
investment trust organized under the laws of the District of Columbia, and its
successors and assigns.
"Borrowing Date" means a date on which an Advance is made hereunder.
"Borrowing Notice" is defined in Section 2.9.
"Business Day" means (i) with respect to any borrowing, payment or rate
selection of LIBOR Advances, a day (other than a Saturday or Sunday) on which
banks generally are open in Chicago, Illinois and New York, New York for the
conduct of substantially all of their commercial lending activities and on which
dealings in United States dollars are carried on in the London interbank market
and (ii) for all other purposes, a day (other than a Saturday or Sunday) on
which banks generally are open in Chicago, Illinois for the conduct of
substantially all of their commercial lending activities.
"Calculation Date" is defined in Section 2.4.
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"Capitalized Lease" of a Person means any lease of Property imposing
obligations on such Person, as lessee thereunder, which are required in
accordance with GAAP to be capitalized on a balance sheet of such Person.
"Capitalized Lease Obligations" of a Person means the amount of the
obligations of such Person under Capitalized Leases which would be shown as a
liability on a balance sheet of such Person prepared in accordance with GAAP.
"Capital Stock" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a corporation, any
and all equivalent ownership interests in a Person (other than a corporation)
and any and all warrants or options to purchase any of the foregoing.
"Cash Flow to Debt Service Ratio" means, as for any date for any period,
the ratio calculated by dividing (x) actual EBITDA for such period, by (y)
Consolidated Debt Service for such period.
"Closing Date" means the date that all the conditions precedent to the
initial Advance, as specified in Section 4.1, have been satisfied; provided,
however, that the obligations of the Lenders to make Loans hereunder shall
automatically terminate if such date does not occur on or before August 31,
2002.
"Code" means the Internal Revenue Code of 1986, as amended, reformed or
otherwise modified from time to time.
"Commitment" means, for each Lender, the obligation of such Lender to make
Loans not exceeding the amount set forth opposite its signature below or as set
forth in any Notice of Assignment relating to any assignment that has become
effective pursuant to Section 12.3.2, as such amount may be modified from time
to time pursuant to the terms hereof.
"Condemnation" is defined in Section 7.9.
"Consolidated Debt Service" for any period means (a) Consolidated Interest
Expense for such period plus (b) the aggregate amount of scheduled principal
payments of Indebtedness (excluding optional prepayments and scheduled principal
payments in respect of any Indebtedness which is payable in a single installment
at final maturity) required to be made during such period by the Borrower or any
of its consolidated Subsidiaries.
"Consolidated Group" means the Borrower and all Subsidiaries which are
consolidated with it for financial reporting purposes under GAAP.
"Consolidated Interest Expense," for any period, means the amount of
interest expense of the Borrower and its Subsidiaries for such period on the
aggregate principal amount of their Indebtedness, determined on a consolidated
basis in accordance with GAAP plus any capitalized interest which accrued during
such period.
"Consolidated Net Income," for any period, means consolidated net income
(or loss) of the Borrower and its Subsidiaries for such period determined on a
consolidated basis in accordance with GAAP; provided that there shall be
excluded (a) the income (or deficit) of any
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other Person accrued prior to the date it becomes a Subsidiary of the Borrower
or is merged into or consolidated with the Borrower or any of its Subsidiaries
and (b) the undistributed earnings of any Subsidiary to the extent that the
declaration or payment of dividends or similar distributions by such Subsidiary
is not at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary.
"Consolidated Secured Indebtedness," as of any date of determination, means
the sum of (a) the aggregate principal amount of all Indebtedness of the
Borrower and its Subsidiaries outstanding at such date which does not constitute
Unsecured Indebtedness and (b) the excess, if any, of (i) the aggregate
principal amount of all Unsecured Indebtedness of the Subsidiaries of the
Borrower over (ii) $10,000,000, determined on a consolidated basis in accordance
with GAAP.
"Consolidated Senior Unsecured Indebtedness," as of any date of
determination, means the sum of (a) the aggregate principal amount of all
Indebtedness of the Borrower and its Subsidiaries outstanding at such date which
constitutes Unsecured Indebtedness (excluding (i) Indebtedness which is
contractually subordinated to the Indebtedness of the Borrower and its
Subsidiaries under the Loan Documents on customary terms acceptable to the
Agent, (ii) Indebtedness of the Borrower and its Subsidiaries under the Loan
Documents and (iii) Indebtedness incurred pursuant to any commitment referred to
in clause (c) below), (b) the aggregate Commitments then in effect under the
Facility, and (c) the aggregate commitments then in effect with respect to any
other unsecured committed line of credit extended to the Borrower or any of its
Subsidiaries, determined on a consolidated basis in accordance with GAAP.
"Consolidated Tangible Net Worth," at any date of determination, means an
amount equal to (a) Total Capitalization Value as of such date minus (b)
Consolidated Total Indebtedness as of such date.
"Consolidated Total Indebtedness," as of any date of determination, means
all Indebtedness of the Borrower and its Subsidiaries outstanding at such date,
determined on a consolidated basis in accordance with GAAP.
"Controlled Group" means all members of a controlled group of corporations
and all trades or businesses (whether or not incorporated) under common control
which, together with the Borrower or any of its Subsidiaries, are treated as a
single employer under Section 414 of the Code.
"Conversion/Continuation Notice" is defined in Section 2.10.
"Crestar Agreement" means the Credit Agreement dated as of July 25, 1997
among the Borrower, Crestar Bank, Signet Bank/Virginia, and any other bank as
party to the Credit Agreement from time to time, and Crestar Bank, as agent, as
the same may be amended from time to time.
"Current DSC Ratio" means, as of any date, the ratio calculated by dividing
(x) the actual EBITDA for the most recently completed fiscal quarter, by (y) the
actual Consolidated Debt Service for such fiscal quarter.
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"Default" means an event described in Article VII.
"EBITDA" means earnings of Borrower and its Subsidiaries on a consolidated
basis before interest, taxes (other than real estate taxes), depreciation and
amortization, all as calculated in accordance with GAAP.
"Environmental Laws" means any and all foreign, Federal, state, local or
municipal laws, rules, orders, regulations, statutes, ordinances, codes,
decrees, requirements of any Governmental Authority or other Requirements of Law
(including common law) regulating, relating to or imposing liability or
standards of conduct concerning protection of human health or the environment,
as now or may at any time hereafter be in effect, in each case to the extent the
foregoing are applicable to the Borrower or any Subsidiary or any of their
respective assets or Property.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
amended from time to time, and any rule or regulation issued thereunder.
"Extension Fee" is defined in Section 2.20.
"Extension Request" is defined in Section 2.20.
"Facility Termination Date" means July 23, 2004, subject to extension in
accordance with the terms of Section 2.20.
"Federal Funds Effective Rate" means, for any day, an interest rate per
annum equal to the weighted average of the rates on overnight Federal funds
transactions with members of the Federal Reserve System arranged by Federal
funds brokers on such day, as published for such day (or, if such day is not a
Business Day, for the immediately 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 at approximately 10 a.m. (Chicago
time) on such day on such transactions received by the Agent from three Federal
funds brokers of recognized standing selected by the Agent in its sole
discretion.
"Financial Contract" of a Person means (i) any exchange-traded or
over-the-counter futures, forward, swap or option contract or other financial
instrument with similar characteristics, or (ii) any Rate Management
Transaction.
"Financing Lease" means any lease of property, real or personal, the
obligations of the lessee in respect of which are, in accordance with GAAP,
capitalized on a balance sheet of the lessee.
"Fixed Charges" shall mean, for any period, the sum of (i) Consolidated
Interest Expense, (ii) all scheduled principal payments due on account of
Consolidated Total Indebtedness (excluding balloon payments), (iii) all
dividends payable on account of preferred stock or preferred operating
partnership units of the Borrower or any other Person in the Consolidated Group
and (iv) all ground lease payments to the extent not deducted as an expense in
calculating EBITDA.
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"Floating Rate" means, for any date, a rate per annum equal to (i) the
Alternate Base Rate for such day plus (ii) ABR Applicable Margin for such day,
in each case changing when and as the Alternate Base Rate changes.
"Floating Rate Advance" means an Advance which bears interest at the
Floating Rate.
"Floating Rate Loan" means a Loan which bears interest at the Floating
Rate.
"Funded Percentage" means, with respect to any Lender at any time, a
percentage equal to a fraction the numerator of which is the amount of the
outstanding Advances from such Lender at such time, and the denominator of which
is the outstanding Advances from all of the Lenders at such time.
"Funds From Operations," for any period, means Consolidated Net Income for
such period as adjusted by (i) excluding gains and losses from property sales,
debt restructurings and property write-downs and adjusted for the non-cash
effect of straight-lining of rents, (ii) to the extent not already accomplished
under GAAP, straight-lining various ordinary operating expenses which are
payable less frequently than monthly (e.g. real estate taxes), and (iii) adding
back depreciation, amortization and all non-cash items.
"GAAP" means generally accepted accounting principles in the United States
of America as in effect from time to time, applied in a manner consistent with
that used in preparing the financial statements referred to in Section 6.1.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof and any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government.
"Guarantee Obligation" means, as to any Person (the "guaranteeing person"),
any obligation (determined without duplication) of (a) the guaranteeing person
or (b) another Person (including, without limitation, any bank under any letter
of credit) to induce the creation of which the guaranteeing person has issued a
reimbursement, counterindemnity or similar obligation, in either case
guaranteeing or in effect guaranteeing any Indebtedness, leases, dividends or
other obligations (the "primary obligations") of any other third Person (the
"primary obligor") in any manner, whether directly or indirectly, including,
without limitation, any obligation of the guaranteeing person, whether or not
contingent, (i) to purchase any such primary obligation or any property
constituting direct or indirect security therefor, (ii) to advance or supply
funds (1) for the purchase or payment of any such primary obligation or (2) to
maintain working capital or equity capital of the primary obligor or otherwise
to maintain the net worth or solvency of the primary obligor, (iii) to purchase
property, securities or services primarily for the purpose of assuring the owner
of any such primary obligation of the ability of the primary obligor to make
payment of such primary obligation or (iv) otherwise to assure or hold harmless
the owner of any such primary obligation against loss in respect thereof;
provided, however, that the term Guarantee Obligation shall not include
endorsements of instruments for deposit or collection in the ordinary course of
business. The amount of any Guarantee Obligation of any guaranteeing person
shall be deemed to be the maximum stated amount of the primary obligation
relating to such Guarantee Obligation (or, if less, the maximum stated liability
set forth in the instrument embodying such Guarantee Obligation), provided, that
in the absence of any such
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stated amount or stated liability, the amount of such Guarantee Obligation shall
be such guaranteeing person's maximum reasonably anticipated liability in
respect thereof as determined by the Borrower in good faith.
"Indebtedness" of any Person at any date means without duplication, (a) all
indebtedness of such Person for borrowed money including without limitation any
repurchase obligation or liability of such Person with respect to securities,
accounts or notes receivable sold by such Person, (b) all obligations of such
Person for the deferred purchase price of property or services (other than
current trade liabilities incurred in the ordinary course of business and
payable in accordance with customary practices), to the extent such obligations
constitute indebtedness for the purposes of GAAP, (c) any other indebtedness of
such Person which is evidenced by a note, bond, debenture or similar instrument,
(d) all Capitalized Lease Obligations, (e) all obligations of such Person in
respect of acceptances issued or created for the account of such Person, (f) all
Guarantee Obligations of such Person, (g) all reimbursement obligations of such
Person for letters of credit and other contingent liabilities, (h) Net
Mark-to-Market Exposure under Rate Management Transactions and other Financial
Contracts; and (i) all liabilities secured by any lien (other than liens for
taxes not yet due and payable) on any property owned by such Person even though
such Person has not assumed or otherwise become liable for the payment thereof.
"Interest Period" means, with respect to a LIBOR Advance, a period of one,
two, three, or six months or such period shorter than one month as may be
available from time to time from the Lenders at their sole discretion commencing
on a Business Day selected by the Borrower pursuant to this Agreement. Such
Interest Period shall end on (but exclude) the day which corresponds numerically
to such date one, two, three, or six, months thereafter or on such day as
decided upon by the Lenders for such period shorter than one month if available,
provided, however, that if there is no such numerically corresponding day in
such next, second, third, or sixth, succeeding month, such Interest Period shall
end on the last Business Day of such next, second, third, or sixth, succeeding
month. If an Interest Period would otherwise end on a day which is not a
Business Day, such Interest Period shall end on the next succeeding Business
Day, provided, however, that if said next succeeding Business Day falls in a new
calendar month, such Interest Period shall end on the immediately preceding
Business Day.
"Lenders" means the lending institutions listed on the signature pages of
this Agreement, their respective successors and assigns and any other lending
institutions that subsequently become parties to this Agreement.
"Lending Installation" means, with respect to a Lender, any office, branch,
subsidiary or affiliate of such Lender.
"Letter of Credit" of a Person means a letter of credit or similar
instrument which is issued upon the application of such Person or upon which
such Person is an account party or for which such Person is in any way liable.
"LIBOR Advance" means an Advance which bears interest at a LIBOR Rate.
"LIBOR Applicable Margin" means, as of any date with respect to any
Interest Period, the Applicable Margin in effect for such Interest Period as
determined in accordance with Section 2.4 hereof.
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"LIBOR Base Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars appearing on Reuters Screen FRBD as of 11:00
a.m. (London time) two Business Days prior to the first day of such LIBOR
Interest Period, and having a maturity equal to such LIBOR Interest Period,
provided that, (i) if Reuters Screen FRBD is not available to the Agent for any
reason, the applicable LIBOR Base Rate for the relevant LIBOR Interest Period
shall instead be the applicable British Bankers' Association Interest Settlement
Rate for deposits in U.S. dollars as reported by any other generally recognized
financial information service as of 11:00 a.m. (London time) two Business Days
prior to the first day of such LIBOR Interest Period, and having a maturity
equal to such LIBOR Interest Period, and (ii) if no such British Bankers'
Association Interest Settlement Rate is available to the Agent, the applicable
LIBOR Base Rate for the relevant LIBOR Interest Period shall instead be the rate
determined by the Agent to be the rate at which Bank One or one of its Affiliate
banks offers to place deposits in U.S. dollars with first-class banks in the
London interbank market at approximately 11:00 a.m. (London time) two Business
Days prior to the first day of such LIBOR Interest Period, in the approximate
amount of Bank One's relevant LIBOR Loan and having a maturity approximately
equal to such LIBOR Interest Period.
"LIBOR Loan" means a Loan which bears interest at a LIBOR Rate.
"LIBOR Rate" means, with respect to a LIBOR Advance for the relevant
Interest Period, the sum of (i) the quotient of (a) the LIBOR Base Rate
applicable to such Interest Period, divided by (b) one minus the Reserve
Requirement (expressed as a decimal) applicable to such Interest Period, plus
(ii) the LIBOR Applicable Margin in effect on the day that such LIBOR Base Rate
was determined. The LIBOR Rate shall be rounded to the next higher multiple of
1/16 of 1% if the rate is not such a multiple.
"Lien" means any lien (statutory or other), mortgage, pledge,
hypothecation, assignment, deposit arrangement, encumbrance or preference,
priority or other security agreement or preferential arrangement of any kind or
nature whatsoever (including, without limitation, the interest of a vendor or
lessor under any conditional sale, capitalized lease or other title retention
agreement).
"Loan" means, with respect to a Lender, such Lender's portion of any
Advance.
"Loan Documents" means this Agreement, the Note(s), the Subsidiary
Guaranty, and any other document from time to time evidencing or securing
indebtedness incurred by the Borrower under this Agreement, as any of the
foregoing may be amended or modified from time to time.
"Loan Year" means the period of 12 months ending on the first anniversary
of the date of this Agreement, and thereafter, each succeeding 12 month period
ending on an anniversary of the date of this Agreement.
"Material Adverse Effect" means a material adverse effect on (i) the
business, Property, condition (financial or otherwise), results of operations,
or prospects of the Borrower and its Subsidiaries taken as a whole, (ii) the
ability of the Borrower to perform its obligations under the Loan Documents, or
(iii) the validity or enforceability of any of the Loan Documents or the rights
or remedies of the Agent or the Lenders thereunder.
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"Materials of Environmental Concern" means any gasoline or petroleum
(including crude oil or any fraction thereof) or petroleum products or any
hazardous or toxic substances, materials or wastes, defined or regulated as such
in or under any Environmental Law, including, without limitation, asbestos,
polychlorinated biphenyls and urea-formaldehyde insulation.
"Maximum Aggregate Commitment" means $25,000,000, or at any time such
other amount to which the Maximum Aggregate Loan has been increased in
accordance with the terms of this Agreement.
"Moody's" means Moody's Investors Service, Inc. and its successors.
"Multiemployer Plan" means a Plan maintained pursuant to a collective
bargaining agreement or any other arrangement to which the Borrower or any
member of the Controlled Group is a party to which more than one employer is
obligated to make contributions.
"Net Mark-to-Market Exposure" of a Person means, as of any date of
determination, the excess (if any) of all unrealized losses over all unrealized
profits of such Person arising from Rate Management Transactions or any other
Financial Contract. "Unrealized losses" means the fair market value of the cost
to such Person of replacing such Rate Management Transaction or other Financial
Contract as of the date of determination (assuming the Rate Management
Transaction or other Financial Contract were to be terminated as of that date),
and "unrealized profits" means the fair market value of the gain to such Person
of replacing such Rate Management Transaction or other Financial Contract as of
the date of determination (assuming such Rate Management Transaction or other
Financial Contract were to be terminated as of that date).
"Note" means a promissory note, in substantially the form of Exhibit B
hereto, duly executed by the Borrower and payable to the order of a Lender in
the amount of its Commitment, including any amendment, modification, renewal or
replacement of such promissory note.
"Notice of Assignment" is defined in Section 12.3.2.
"Obligations" means all unpaid principal of and accrued and unpaid
interest on the Notes, all accrued and unpaid fees and all expenses,
reimbursements, indemnities and other obligations of the Borrower to the Lenders
or to any Lender, the Agent or any indemnified party hereunder arising under the
Loan Documents.
"Office Building Assets" means all office buildings owned by Borrower
from time to time.
"Other Taxes" is defined in Section 3.5.
"Participants" is defined in Section 12.2.1.
"Payment Date" means, with respect to the payment of interest accrued
on any Advance, the first day of each calendar month.
"PBGC" means the Pension Benefit Guaranty Corporation, or any successor
thereto.
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"Percentage" means, with respect to each Lender, the applicable
percentage of the then-current Aggregate Commitment represented by such Lender's
then-current Commitment.
"Permitted Acquisitions" are defined in Section 6.16.
"Permitted Liens" are defined in Section 6.17.
"Person" means any natural person, corporation, firm, joint venture,
partnership, association, enterprise, trust or other entity or organization, or
any government or political subdivision or any agency, department or
instrumentality thereof.
"Plan" means an employee pension benefit plan which is covered by Title
IV of ERISA or subject to the minimum funding standards under Section 412 of the
Code as to which the Borrower or any member of the Controlled Group may have any
liability.
"Prime Rate" means a rate per annum equal to the prime rate of interest
announced from time to time by Bank One, NA or its parent (which is not
necessarily the lowest rate charged to any customer), changing when and as said
prime rate changes.
"Pro Forma EBITDA" means, for any Person for any period, EBITDA
calculated as if the Property then owned by such Person had been owned by such
Person for the entire period.
"Property" of a Person means any and all property, whether real,
personal, tangible, intangible, or mixed, of such Person, or other assets owned,
leased or operated by such Person.
"Purchasers" is defined in Section 12.3.1.
"Rate Management Transaction" means any transaction (including an
agreement with respect thereto) now existing or hereafter entered into by the
Borrower which is a rate swap, basis swap, forward rate transaction, commodity
swap, commodity option, equity or equity index swap, equity or equity index
option, bond option, interest rate option, foreign exchange transaction, cap
transaction, floor transaction, collar transaction, forward transaction,
currency swap transaction, cross-currency rate swap transaction, currency option
or any other similar transaction (including any option with respect to any of
these transactions) or any combination thereof, whether linked to one or more
interest rates, foreign currencies, commodity prices, equity prices or other
financial measures.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor thereto
or other regulation or official interpretation of said Board of Governors
relating to reserve requirements applicable to member banks of the Federal
Reserve System.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System as from time to time in effect and any successor or other
regulation or official interpretation of said Board of Governors relating to the
extension of credit by banks for the purpose of purchasing or carrying margin
stocks applicable to member banks of the Federal Reserve System.
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"Reportable Event" means a reportable event as defined in Section 4043
of ERISA and the regulations issued under such section, with respect to a Plan,
excluding, however, such events as to which the PBGC by regulation waived the
requirement of Section 4043(a) of ERISA that it be notified within 30 days of
the occurrence of such event, provided, however, that a failure to meet the
minimum funding standard of Section 412 of the Code and of Section 302 of ERISA
shall be a Reportable Event regardless of the issuance of any such waiver of the
notice requirement in accordance with either Section 4043(a) of ERISA or Section
412(d) of the Code.
"Required Lenders" means Lenders in the aggregate having at least
66-2/3% of the Aggregate Commitment or, if the Aggregate Commitment has been
terminated, Lenders in the aggregate holding at least 66-2/3% of the aggregate
unpaid principal amount of the outstanding Advances.
"Reserve Requirement" means, with respect to a LIBOR Interest Period,
the maximum aggregate reserve requirement (including all basic, supplemental,
marginal and other reserves) which is imposed under Regulation D on Eurocurrency
liabilities. On the date of this Agreement Bank One NA's Reserve Requirement is
0.
"Section" means a numbered section of this Agreement, unless another
document is specifically referenced.
"Single Employer Plan" means a Plan maintained by the Borrower or any
member of the Controlled Group for employees of the Borrower or any member of
the Controlled Group.
"Subsidiary," as to any Person, means a corporation, partnership or
other entity of which shares of stock or other ownership interests having
ordinary voting power (other than stock or such other ownership interests having
such power only by reason of the happening of a contingency) to elect a majority
of the board of directors or other managers of such corporation, partnership or
other entity are at the time owned, or the management of which is otherwise
controlled, directly or indirectly through one or more intermediaries, or both,
by such Person. Unless otherwise qualified, all references to a "Subsidiary" or
to "Subsidiaries" in this Agreement shall refer to a Subsidiary or Subsidiaries
of the Borrower.
"Subsidiary Guaranty" means the guaranty to be executed and delivered
by each Subsidiary of Borrower, including without limitation WRIT Limited
Partnership, a Delaware limited partnership substantially in the form of Exhibit
I as the same may be amended, supplemented, or otherwise modified from time to
time.
"Substantial Portion" means, with respect to the Property of the
Borrower and its Subsidiaries, Property which (i) represents more than 15% of
the consolidated assets of the Borrower and its Subsidiaries as would be shown
in the consolidated financial statements of the Borrower as at the beginning of
the twelve-month period ending with the month in which such determination is
made, or (ii) is responsible for more than 10% of the consolidated net sales or
of the consolidated net income of the Borrower and its Subsidiaries as reflected
in the financial statements referred to in clause (i) above.
"S&P" means Standard & Poor's Ratings Group and its successors.
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"Total Capitalization Value" means for any Person for any quarter, the
product of (x) annualized EBITDA for such Person during such quarter (for
purposes of calculating such annualized EBITDA for any Property not owned for
the entire quarter, EBITDA shall be adjusted to include the Pro Forma EBITDA for
such Property for the most recently ended fiscal quarter), and (y) ten (10).
"Total Tangible Assets," of any Person at any date, means the current
book value of the total assets of such Person other than that portion of such
Person's assets that constitute intangible assets as determined in accordance
with GAAP plus accumulated depreciation on the depreciable assets (excluding
intangible assets) from such Person's original book value of such assets which
is reflected in the current book value of such assets.
"Transferee" is defined in Section 12.4.
"Type" means, with respect to any Advance, its nature as a Floating
Rate Advance or a LIBOR Advance.
"Unencumbered Asset," with respect to any asset, at any date of
determination, means the circumstance that such asset on such date (a) is not
subject to any Liens of any kind, other than Permitted Liens (excluding however
Permitted Liens of the type contemplated by the penultimate paragraph of Section
6.17 hereof), (b) is not subject to any agreement (including (i) any agreement
governing Indebtedness incurred in order to finance or refinance the acquisition
of such asset), and (ii) if applicable, the organizational documents of any
Subsidiary) (other than the Crestar Agreement, the terms of which restrict
Borrower's ability to encumber certain of Borrower's assets provided that no
such restrictions may exist after September 30, 2002, except for a restriction
which prohibits an encumbrance if it would result in a breach of the covenants
in such agreement, provided any covenants limiting secured debt are not in the
sole judgement of Administrative Agent materially more restrictive for the
Borrower than the covenants contained in this Agreement) which prohibits or
limits the ability of the Borrower or any of its Subsidiaries to create, incur,
assume or suffer to exist any Lien upon any assets or Capital Stock of the
Borrower or any of its Subsidiaries (excluding any agreement which limits
generally the amount of secured Indebtedness which may be incurred by the
Borrower and its Subsidiaries, and (c) is not subject to any agreement
(including any agreement governing Indebtedness incurred in order to finance or
refinance the acquisition of such asset, but excluding (for the period through
September 30, 2002 only) the terms of the Crestar Agreement) which entitles any
Person to the benefit of any Lien (other than Permitted Liens) on any assets or
Capital Stock of the Borrower or any of its Subsidiaries, or would entitle any
Person to the benefit of any Lien (other than Permitted Liens) on such assets or
Capital Stock upon the occurrence of any contingency (including, without
limitation, pursuant to an "equal and ratable" clause). For the purposes of this
Agreement, any Property of a Subsidiary which is not a Wholly-Owned Subsidiary
shall not be deemed to be unencumbered unless both (i) such Property and (ii)
all Capital Stock of such Subsidiary held by the Borrower is unencumbered.
"Unfunded Liabilities" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer Plans
exceeds the fair market value of all such Plan assets allocable to such
benefits, all determined as of the then most recent valuation date for such
Plans.
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"Unmatured Default" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"Unsecured Indebtedness" means all Indebtedness of any Person that is
not secured by a Lien on any income, Capital Stock, Property or any other asset
of such Person.
"Unused Fee" is defined in Section 2.6.
"Value of Unencumbered Assets," as of any date for all Unencumbered
Assets owned by Borrower and its Subsidiaries on a consolidated basis shall mean
the product of (x) the annualized EBITDA from all such Unencumbered Assets for
the most recent calendar quarter for which results have been reported to Lender
(which annualized net operating income shall be determined by multiplying the
EBITDA from all such Unencumbered Assets for such calendar quarter by four (4)),
and (y) ten (10).
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary all of
the outstanding voting securities of which shall at the time be owned or
controlled, directly or indirectly, by such Person or one or more Wholly-Owned
Subsidiaries of such Person, or by such Person and one or more Wholly-Owned
Subsidiaries of such Person, or (ii) any partnership, association, joint venture
or similar business organization 100% of the ownership interests having ordinary
voting power of which shall at the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both the
singular and plural forms of the defined terms.
ARTICLE II.
THE CREDIT
2.1 Commitment; Increase in Aggregate Commitment. From and including
the date of this Agreement and prior to the Facility Termination Date, each
Lender severally agrees, on the terms and conditions set forth in this
Agreement, to make Loans to the Borrower from time to time in amounts not to
exceed in the aggregate at any one time outstanding the amount of its
Commitment. Subject to the terms of this Agreement, the Borrower may borrow,
repay and reborrow at any time prior to the Facility Termination Date. The
Commitments to lend hereunder shall expire on the Facility Termination Date.
The Borrower shall also have the right during the first twelve (12)
months of the Agreement to increase the Aggregate Commitment up to a maximum of
$75,000,000 by obtaining the agreement of one or more of the then-current
Lenders to increase its or their Commitments, or by finding one or more new
Lenders. Such increases shall be evidenced by the execution and delivery of an
Amendment Regarding Increase in the form of Exhibit G attached hereto by the
Borrower, the Agent and the new bank or existing Lender providing such
additional Commitment, a copy of which shall be forwarded to each Lender by the
Agent promptly after execution thereof. On the effective date of each such
increase in the Aggregate Commitment, the Borrower and the Agent shall cause the
new or existing Lenders providing such increase to hold its or their Percentage
of all ratable Advances outstanding at the close of
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business on such day, by either funding more than its or their Percentage of new
ratable Advances made on such date or purchasing shares of outstanding ratable
Loans held by the other Lenders or a combination thereof. The Lenders agree to
cooperate in any required sale and purchase of outstanding ratable Advances to
achieve such result. In no event shall the Aggregate Commitment exceed
$75,000,000 without the approval of all of the Lenders.
2.2 Final Principal Payment. Any outstanding Advances and all other
unpaid Obligations shall be paid in full by the Borrower on the Facility
Termination Date.
2.3 Ratable Loans. Each Advance hereunder shall consist of Loans made
from the several Lenders ratably in proportion to the ratio that their
respective Commitments bear to the Aggregate Commitment. The Advances may be
Floating Rate Advances or LIBOR Advances, or a combination thereof, selected by
the Borrower in accordance with Sections 2.9 and 2.10. If any Lender shall
default in its obligation to fund all or a portion of its Percentage of any
Advance (a "Defaulting Lender"), then simultaneously with any funding by any of
the remaining Lenders (each, a "Funding Lender") of their respective Percentages
of such Advance (such an Advance is sometimes referred to herein as a "Partial
Advance"), the respective Funded Percentages of each Defaulting Lender and of
each Funding Lender shall automatically be adjusted so that following such
adjustment each Lender's Funded Percentage shall correspond to the aggregate
percentage of all then outstanding Advances (including all Partial Advances)
made by such Lender. Following any adjustment of each Lender's Funded Percentage
pursuant to the preceding sentence, such Lender's Funded Percentage shall be
readjusted only upon the first to occur of (a) a Defaulting Lender subsequently
funding its Percentage of any such Partial Advance, or (b) the repayment in full
(including all interest thereon) to each Funding Lender of its Percentage of any
such Partial Advance. Notwithstanding anything contained herein to the contrary,
in no event shall any Defaulting Lender be entitled to receive any repayment of
its Percentage of any Advances (or any interest earned thereon) until such time
as the Funding Lenders have received repayment in full of the amount of any
Partial Advance, together with all interest thereon. Borrower shall have the
right to replace a Defaulting Lender in the manner set forth in Section 3.6
below, and upon the replacement of any Defaulting Lender, such Defaulting Lender
shall refund to Borrower the pro rata share of all commitment fees paid to such
Defaulting Lender which have not been earned by such Defaulting Lender as of the
date of such replacement, determined by multiplying the amount of all commitment
fees paid by Borrower to or for the benefit of such Defaulting Lender by a
fraction, the numerator of which is the number of months (it being understood
and agreed that for purposes of this provision a portion of any month shall
constitute a complete "month") which have elapsed in the 24-month Facility term,
and the denominator of which is 24. Solely by way of example, if Borrower has
paid aggregate commitment fees of $75,000 to a Defaulting Lender, and Borrower
replaces such Defaulting Lender on the first anniversary of the Closing Date,
then concurrently with such replacement such Defaulting Lender shall return to
Borrower $37,500 of the $75,000 in commitment fees.
2.4 Applicable Margins. The ABR Applicable Margin and the LIBOR
Applicable Margin to be used in calculating the interest rate applicable to
different Types of Advances shall vary from time to time as set forth in Exhibit
A-1 in accordance with the ratings from Moody's and/or S&P for Borrower's
long-term unsecured debt. If a rating has been issued by only one of S&P or
Moody's, that rating shall determine the Applicable Margin. In the event both
rating agencies have issued a rating and the rating agencies are split on the
rating for the Borrower's long-term unsecured debt or this Facility, the lower
rating shall be deemed to be the applicable
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rating (e.g., if the Borrower's Moody's long-term unsecured debt rating is Baal
and its S&P long-term unsecured debt rating is BBB then the Applicable Margins
shall be computed based on the S&P rating). The Applicable Margins shall be
adjusted effective on the next Business Day following any change in the
Borrower's Moody's long-term unsecured debt rating and/or S&P's long-term
unsecured debt rating, as the case may be (provided that if Agent does not
receive notice of a change in rating within twenty days after it occurs then any
reduction in Applicable Margin shall be effective only when such notice is
received).
In the event that either S&P or Moody's shall discontinue their ratings
of the REIT industry or the Borrower's long-term unsecured debt, a mutually
agreeable substitute rating agency shall be selected by the Required Lenders and
the Borrower. If the Required Lenders and the Borrower cannot agree on a
substitute rating agency within forty-five (45) days of such discontinuance, the
Applicable Margin to be used for the calculation of interest on Advances
hereunder shall be the highest Applicable Margin set forth in Exhibit B. Lenders
acknowledge that the rating for Borrower's unsecured long term debt may be
issued even though Borrower has no outstanding unsecured long term debt.
2.5 Other Fees. The Borrower agrees to pay all other fees payable to
the Agent pursuant to the Borrower's prior letter agreement with the Agent dated
May 28, 2002.
2.6 Unused Fee. The Borrower agrees to pay to the Agent for the account
of each Lender an unused fee (the "Unused Fee") equal to an amount computed by
multiplying the applicable percentage in Exhibit A-2 (determined by reference to
average usage of the Facility during the applicable quarter) by the average
daily amount during such quarter of the difference between the Aggregate
Commitment and the outstanding principal balance of the Loans for the quarter.
The Unused Fee shall be payable quarterly in arrears on the last day of each
calendar quarter.
2.7 Minimum Amount of Each Advance. Each LIBOR Advance shall be in the
minimum amount of $1,000,000 (and in multiples of $250,000 if in excess
thereof), and each Floating Rate Advance shall be in the minimum amount of
$1,000,000 (and in multiples of $250,000 if in excess thereof), provided,
however, that any Floating Rate Advance may be in the amount of the unused
Aggregate Commitment.
2.8 Optional Principal Payments. The Borrower may from time to time
pay, without penalty or premium, all outstanding Advances, or, in a minimum
aggregate amount of $500,000 or any integral multiple of $250,000 in excess
thereof, any portion of the outstanding Advances upon two Business Days' prior
notice to the Agent; provided however, that the provisions of Section 3.4 hereof
shall be applicable to any prepayment of any LIBOR Advance.
2.9 Method of Selecting Types and Interest Periods for New Advances.
The Borrower shall select the Type of Advance and, in the case of each LIBOR
Advance, the Interest Period applicable to each Advance from time to time. The
Borrower shall give the Agent irrevocable notice (a "Borrowing Notice") not
later than 10:00 a.m. (Chicago time) at least one Business Day before the
Borrowing Date of each Floating Rate Advance and three Business Days before the
Borrowing Date for each LIBOR Advance, specifying:
(i) the Borrowing Date, which shall be a Business Day, of such
Advance,
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(ii) the aggregate amount of such Advance,
(iii) the Type of Advance selected, and
(iv) in the case of each LIBOR Advance, the Interest Period applicable
thereto.
Not later than noon (Chicago time) on each Borrowing Date, each Lender
shall make available its Loan or Loans, in funds immediately available in
Chicago to the Agent at its address specified pursuant to Article VIII. The
Agent will make the funds so received from the Lenders available to the Borrower
at the Agent's aforesaid address.
No Interest Period may end after the Facility Termination Date and,
unless the Lenders otherwise agree in writing, in no event may there be more
than five (5) different Interest Periods for LIBOR Advances outstanding at any
one time.
2.10 Conversion and Continuation of Outstanding Advances. Floating
Rate Advances shall continue as Floating Rate Advances unless and until such
Floating Rate Advances are converted into LIBOR Advances. Each LIBOR Advance
shall continue as a LIBOR Advance until the end of the then applicable Interest
Period therefor, at which time such LIBOR Advance shall be automatically
converted into a Floating Rate Advance unless the Borrower shall have given the
Agent a Conversion/Continuation Notice requesting that, at the end of such
Interest Period, such LIBOR Advance continue as an LIBOR Advance for the same or
another Interest Period. Subject to the terms of Section 2.7, the Borrower may
elect from time to time to convert all or any part of an Advance of any Type
into any other Type or Types of Advances; provided that any conversion of any
LIBOR Advance shall be made on, and only on, the last day of the Interest Period
applicable thereto. The Borrower shall give the Agent irrevocable notice (a
"Conversion/Continuation Notice") of each conversion of an Advance or
continuation of a LIBOR Advance not later than 10:00 a.m. (Chicago time) at
least one Business Day, in the case of a conversion into a Floating Rate
Advance, or three Business Days, in the case of a conversion into or
continuation of a LIBOR Advance, prior to the date of the requested conversion
or continuation, specifying:
(i) the requested date, which shall be a Business Day, of such
conversion or continuation;
(ii) the aggregate amount and Type of the Advance which is to be
converted or continued; and
(iii) the amount and Type(s) of Advance(s) into which such Advance is
to be converted or continued and, in the case of a conversion
into or continuation of a LIBOR Advance, the duration of the
Interest Period applicable thereto.
2.11 Changes in Interest Rate, Etc. Each Floating Rate Advance shall
bear interest on the outstanding principal amount thereof, for each day from and
including the date such Advance is made or is converted from a LIBOR Advance
into a Floating Rate Advance pursuant to Section 2.10 to but excluding the date
it becomes due or is converted into a LIBOR Advance pursuant to Section 2.10
hereof, at a rate per annum equal to the Floating Rate for such day. Changes in
the rate of interest on that portion of any Advance maintained as a Floating
Rate
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Advance will take effect simultaneously with each change in the Alternate Base
Rate. Each LIBOR Advance shall bear interest from and including the first day of
the Interest Period applicable thereto to (but not including) the last day of
such Interest Period at the interest rate determined as applicable to such LIBOR
Advance.
2.12 Rates Applicable After Default. Notwithstanding anything to the
contrary contained in Section 2.9 or 2.10, during the continuance of a Default
or Unmatured Default the Required Lenders may, at their option, by notice to the
Borrower (which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that no Advance may be made as,
converted into or continued as a LIBOR Advance. During the continuance of a
Default the Required Lenders may, at their option, by notice to the Borrower
(which notice may be revoked at the option of the Required Lenders
notwithstanding any provision of Section 8.2 requiring unanimous consent of the
Lenders to changes in interest rates), declare that for the duration of such
Default (i) each LIBOR Advance shall bear interest at the rate otherwise
applicable to such Interest Period plus 2% per annum and (ii) each Floating Rate
Advance shall bear interest at a rate per annum equal to the Floating Rate
otherwise applicable to the Floating Rate Advance plus 2% per annum.
2.13 Method of Payment. All payments of the Obligations hereunder
shall be made, without setoff, deduction, or counterclaim, in immediately
available funds to the Agent at the Agent's address specified pursuant to
Article VIII, or at any other Lending Installation of the Agent specified in
writing by the Agent to the Borrower, by noon (local time) on the date when due
and shall be applied ratably by the Agent among the Lenders. Each payment
delivered to the Agent for the account of any Lender shall be delivered promptly
by the Agent to such Lender in the same type of funds that the Agent received at
its address specified pursuant to Article VIII or at any Lending Installation
specified in a notice received by the Agent from such Lender. The Agent is
hereby authorized to charge the account of the Borrower maintained with First
Chicago for each payment of principal, interest and fees as it becomes due
hereunder.-
2.14 Notes; Telephonic Notices. Each Lender is hereby authorized to
record the principal amount of each of its Loans and each repayment on the
schedule attached to its Note, provided, however, that the failure to so record
shall not affect the Borrower's obligations under such Note. The Borrower hereby
authorizes the Lenders and the Agent to extend, convert or continue Advances,
effect selections of Types of Advances and to transfer funds based on telephonic
notices made by any person or persons the Agent or any Lender in good faith
believes to be acting on behalf of the Borrower. The Borrower agrees to deliver
promptly to the Agent a written confirmation, if such confirmation is requested
by the Agent or any Lender, of each telephonic notice signed by an Authorized
Officer. If the written confirmation differs from the action taken by the Agent
and the Lenders, the records of the Agent and the Lenders shall be presumed
(rebuttably) accurate.
2.15 Interest Payment Dates; Interest and Fee Basis. Interest accrued
on each Floating Rate Advance shall be payable on each Payment Date, commencing
with the first such date to occur after the date hereof, and at maturity.
Interest accrued on each LIBOR Advance shall be payable on each Payment Date,
commencing with the first such date to occur after the date hereof, on any date
on which the LIBOR Advance is prepaid, whether by acceleration or otherwise, and
at maturity. Interest and commitment fees shall be calculated for actual days
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elapsed on the basis of a 360-day year. Interest shall be payable for the day an
Advance is made but not for the day of any payment on the amount paid if payment
is received prior to noon (local time) at the place of payment. If any payment
of principal of or interest on an Advance shall become due on a day which is not
a Business Day, such payment shall be made on the next succeeding Business Day
and, in the case of a principal payment, such extension of time shall be
included in computing interest in connection with such payment.
2.16 Notification of Advances, Interest Rates and Prepayments. Promptly
after receipt thereof, the Agent will notify each Lender of the contents of each
Borrowing Notice, Conversion/Continuation Notice, and repayment notice received
by it hereunder. The Agent will notify each Lender of the interest rate
applicable to each LIBOR Advance promptly upon determination of such interest
rate and will give each Lender prompt notice of each change in the Corporate
Base Rate.
2.17 Lending Installations. Each Lender may book its Loans at any
Lending Installation selected by such Lender and may change its Lending
Installation from time to time. All terms of this Agreement shall apply to any
such Lending Installation and the Notes shall be deemed held by each Lender for
the benefit of such Lending Installation. Each Lender may, by written or telex
notice to the Agent and the Borrower, designate a Lending Installation through
which Loans will be made by it and for whose account Loan payments are to be
made.
2.18 Non-Receipt of Funds by the Agent. Unless the Borrower or a
Lender, as the case may be, notifies the Agent prior to the date on which it is
scheduled to make payment to the Agent of (i) in the case of a Lender, the
proceeds of a Loan or (ii) in the case of the Borrower, a payment of principal,
interest or fees to the Agent for the account of the Lenders, that it does not
intend to make such payment, the Agent may assume that such payment has been
made. The Agent may, but shall not be obligated to, make the amount of such
payment available to the intended recipient in reliance upon such assumption. If
such Lender or the Borrower, as the case may be, has not in fact made such
payment to the Agent, the recipient of such payment shall, on demand by the
Agent, repay to the Agent the amount so made available together with interest
thereon in respect of each day during the period commencing on the date such
amount was so made available by the Agent until the date the Agent recovers such
amount at a rate per annum equal to (i) in the case of payment by a Lender, the
Federal Funds Effective Rate for such day or (ii) in the case of payment by the
Borrower, the interest rate applicable to the relevant Loan.
2.19 Reduction in Aggregate Commitment. Borrower may from time to time
during the term of this Facility upon prior written notice to Agent, elect to
permanently reduce the amount of the Aggregate Commitment to an amount to be
determined by Borrower; provided, however, that in no event shall Borrower be
entitled to reduce the Aggregate Commitment below $15,000,000 pursuant to this
Section. Each reduction notice from Borrower as described in the preceding
sentence shall be accompanied by payment of any amounts (including any amounts
payable by Borrower pursuant to Article III hereof) necessary to reduce the
outstanding balance of the Advances to the amount specified in such notice. Each
reduction of the Aggregate Commitment shall reduce each Lender's Commitment on a
pro rata basis.
2.20 Extension of Facility Termination Date. The Borrower may request a
one-year extension of the Facility Termination Date by submitting a request for
a one-year extension of the Facility Termination Date to the Agent (an
"Extension Request") no more than 90 and no less
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than 60 days prior to the original Facility Termination Date. Promptly upon
receipt of an Extension Request, the Agent shall notify each Lender thereof and
shall request each Lender to approve the Extension Request. Such approval shall
be at the Required Lenders' sole election and not binding upon Lender who do not
approve of such extension. Each Lender approving the Extension Request shall
deliver its written consent no later than 15 days prior to such original
Facility Termination Date. If the consent of the Required Lenders is received by
the Agent, the Facility Termination Date shall be extended by one year and the
Agent shall promptly notify the Borrower and each Lender of the new Facility
Termination Date. Such extension of the Agreement shall be subject to the terms
of the original Agreement. Borrower shall be charged a fee equal to 3/16% of the
amount of the Aggregate Commitment based on the Commitments of the Lenders who
have agreed to such extension (the "Extension Fee"). No Lender shall be
obligated to extend if they did not approve the extension and the Aggregate
Commitment shall be reduced by the amounts of the Commitments of such Lenders
not extending. Borrower shall have the right to replace any Lender that does not
agree to the extension provided that: (a) Borrower notifies such Lender that it
has elected to replace such Lender and notifies such Lender and the
Administrative Agent of the identity of the proposed replacement Lender at least
15 days prior to the original Facility Termination Date and (b) the proposed
replacement Lender is approved by the Agent. The Lender being replaced shall
assign its Percentage of the Aggregate Commitment and its rights and obligations
under this Facility to the replacement Lender pursuant to an Assignment
substantially in the form of Exhibit E and the replacement Lender shall assume
such Percentage of the Aggregate Commitment and the related obligations under
this Facility as of the original Facility Termination Date. The purchase by the
replacement Lender shall be at par (plus all accrued and unpaid interest and any
other sums owed to such Lender being replaced hereunder) which shall be paid to
the Lender being replaced upon the execution and delivery of the Assignment.
ARTICLE III.
CHANGE IN CIRCUMSTANCES
3.1 Yield Protection. If any law or any governmental or
quasi-governmental rule, regulation, policy, guideline or directive (whether or
not having the force of law), or any interpretation thereof, or the compliance
of any Lender therewith,
(i) subjects any Lender or any applicable Lending Installation to any
tax, duty, charge or withholding on or from payments due from the
Borrower (excluding (i) federal taxation of the net income of any
Lender or applicable Lending Installation, (ii) state and local
taxation in the jurisdiction where a Lender's home office is
situated, (iii) state and local taxation in a jurisdiction other
than described in (ii) above to the extent such Lender receives
credit on its tax payments in its home jurisdiction for such
taxes, and (iv) federal withholding tax imposed on payments due
hereunder or under the Notes), or changes the basis of taxation
of payments to any Lender in respect of its Loans or other
amounts due it hereunder, or
(ii) imposes or increases or deems applicable any reserve, assessment,
insurance charge, special deposit or similar requirement against
assets of, deposits with or
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for the account of, or credit extended by, any Lender or any
applicable Lending Installation (other than reserves and
assessments taken into account in determining the interest rate
applicable to LIBOR Advances), or
(iii) imposes any other condition the result of which is to increase
the cost to any Lender or any applicable Lending Installation of
making, funding or maintaining loans or reduces any amount
receivable by any Lender or any applicable Lending Installation
in connection with loans, or requires any Lender or any
applicable Lending Installation to make any payment calculated by
reference to the amount of loans held or interest received by it,
by an amount deemed material by such Lender,
then, within 30 days of demand by such Lender, the Borrower shall pay such
Lender that portion of such increased expense incurred or reduction in an amount
received which such Lender determines is attributable to making, funding and
maintaining its Loans and its Commitment.
3.2 Changes in Capital Adequacy Regulations. If a Lender reasonably
determines the amount of capital required or expected to be maintained by such
Lender, any Lending Installation of such Lender or any corporation controlling
such Lender is increased as a result of a Change (as hereinafter defined), then,
within 30 days of demand by such Lender, the Borrower shall pay such Lender the
amount necessary to compensate for any shortfall in the rate of return on the
portion of such increased capital which such Lender determines is attributable
to this Agreement, its Loans or its obligation to make Loans hereunder (after
taking into account such Lender's policies as to capital adequacy). "Change"
means (i) any change after the date of this Agreement in the Risk-Based Capital
Guidelines or (ii) any adoption of or change in any other law, governmental or
quasi-governmental rule, regulation, policy, guideline, interpretation, or
directive (whether or not having the force of law) after the date of this
Agreement which affects the amount of capital required or expected to be
maintained by any Lender or any Lending Installation or any corporation
controlling any Lender. "Risk-Based Capital Guidelines" means (i) the risk-based
capital guidelines in effect in the United States on the date of this Agreement,
including transition rules, and (ii) the corresponding capital regulations
promulgated by regulatory authorities outside the United States implementing the
July 1988 report of the Basle Committee on Banking Regulation and Supervisory
Practices Entitled "International Convergence of Capital Measurements and
Capital Standards," including transition rules, and any amendments to such
regulations adopted prior to the date of this Agreement.
3.3 Availability of LIBOR Advances. If any Lender reasonably
determines that maintenance of any of its LIBOR Loans at a suitable Lending
Installation would violate any applicable law, rule, regulation or directive,
whether or not having the force of law, the Agent shall suspend the availability
of LIBOR Advances and require any LIBOR Advances to be converted into Floating
Rate Advances; or if the Required Lenders reasonably determine that (i) deposits
of a type or maturity appropriate to match fund LIBOR Advances are not
available, the Agent shall suspend the availability of LIBOR Advances with
respect to any Advances made after the date of any such determination, or (ii)
an interest rate applicable to a LIBOR Advance does not accurately reflect the
cost of making a LIBOR Advance, then, if for any reason whatsoever the
provisions of Section 3.1 are inapplicable, the Agent shall suspend the
availability of LIBOR Advances with respect to any Advances made after the date
of any such determination.
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3.4 Funding Indemnification. If any payment of a LIBOR Advance occurs
on a date which is not the last day of the applicable Interest Period, whether
because of acceleration, prepayment or otherwise, or a LIBOR Advance is not made
on the date specified by the Borrower for any reason other than default by the
Lenders, the Borrower will indemnify each Lender for any loss or cost incurred
by it resulting therefrom, including, without limitation, any loss or cost in
liquidating or employing deposits acquired to fund or maintain the LIBOR
Advance.
3.5 Taxes.
(i) All payments by the Borrower to or for the account of any Lender
or the Agent hereunder or under any Note shall be made free and
clear of and without deduction for any and all Taxes. If the
Borrower shall be required by law to deduct any Taxes from or in
respect of any sum payable hereunder to any Lender or the Agent,
(a) the sum payable shall be increased as necessary so that after
making all required deductions (including deductions applicable
to additional sums payable under this Section 3.5) such Lender or
the Agent (as the case may be) receives an amount equal to the
sum it would have received had no such deductions been made, (b)
the Borrower shall make such deductions, (c) the Borrower shall
pay the full amount deducted to the relevant authority in
accordance with applicable law and (d) the Borrower shall furnish
to the Agent the original copy of a receipt evidencing payment
thereof within 30 days after such payment is made.
(ii) In addition, the Borrower hereby agrees to pay any present or
future stamp or documentary taxes and any other excise or
property taxes, charges or similar levies which arise from any
payment made hereunder or under any Note or from the execution or
delivery of, or otherwise with respect to, this Agreement or any
Note ("Other Taxes").
(iii) The Borrower hereby agrees to indemnify the Agent and each Lender
for the full amount of Taxes or Other Taxes (including, without
limitation, any Taxes or Other Taxes imposed on amounts payable
under this Section 3.5) paid by the Agent or such Lender as a
result of its Commitment, any Loans made by it hereunder, or
otherwise in connection with its participation in this Agreement
and any liability (including penalties, interest and expenses)
arising therefrom or with respect thereto. Payments due under
this indemnification shall be made within 30 days of the date the
Agent or such Lender makes demand therefor pursuant to Section
3.6.
(iv) Each Lender that is not incorporated under the laws of the United
States of America or a state thereof (each a "Non-U.S. Lender")
agrees that it will, not more than ten Business Days after the
date of this Agreement, (i) deliver to the Agent two duly
completed copies of United States Internal Revenue Service Form
W-8BEN or W-8ECI, certifying in either case that such Lender is
entitled to receive payments under this Agreement without
deduction or withholding of any United States federal income
taxes, and (ii) deliver to the Agent a United States Internal
Revenue Form W-8 or W-9, as the case may be, and certify that it
is
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entitled to an exemption from United States backup withholding
tax. Each Non-U.S. Lender further undertakes to deliver to each
of the Borrower and the Agent (x) renewals or additional copies
of such form (or any successor form) on or before the date that
such form expires or becomes obsolete, and (y) after the
occurrence of any event requiring a change in the most recent
forms so delivered by it, such additional forms or amendments
thereto as may be reasonably requested by the Borrower or the
Agent. All forms or amendments described in the preceding
sentence shall certify that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of
any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or
regulation) has occurred prior to the date on which any such
delivery would otherwise be required which renders all such forms
inapplicable or which would prevent such Lender from duly
completing and delivering any such form or amendment with respect
to it and such Lender advises the Borrower and the Agent that it
is not capable of receiving payments without any deduction or
withholding of United States federal income tax.
(v) For any period during which a Non-U.S. Lender has failed to
provide the Borrower with an appropriate form pursuant to clause
(iv), above (unless such failure is due to a change in treaty,
law or regulation, or any change in the interpretation or
administration thereof by any governmental authority, occurring
subsequent to the date on which a form originally was required to
be provided), such Non-U.S. Lender shall not be entitled to
indemnification under this Section 3.5 with respect to Taxes
imposed by the United States; provided that, should a Non-U.S.
Lender which is otherwise exempt from or subject to a reduced
rate of withholding tax become subject to Taxes because of its
failure to deliver a form required under clause (iv), above, the
Borrower shall take such steps as such Non-U.S. Lender shall
reasonably request to assist such Non-U.S. Lender to recover such
Taxes.
(vi) Any Lender that is entitled to an exemption from or reduction of
withholding tax with respect to payments under this Agreement or
any Note pursuant to the law of any relevant jurisdiction or any
treaty shall deliver to the Borrower (with a copy to the Agent),
at the time or times prescribed by applicable law, such properly
completed and executed documentation prescribed by applicable law
as will permit such payments to be made without withholding or at
a reduced rate.
(vii) If the U.S. Internal Revenue Service or any other governmental
authority of the United States or any other country or any
political subdivision thereof asserts a claim that the Agent did
not properly withhold tax from amounts paid to or for the account
of any Lender (because the appropriate form was not delivered or
properly completed, because such Lender failed to notify the
Agent of a change in circumstances which rendered its exemption
from withholding ineffective, or for any other reason), such
Lender shall indemnify the Agent fully for all amounts paid,
directly or indirectly, by the Agent as tax, withholding
therefor, or otherwise, including penalties and interest, and
including taxes imposed by any jurisdiction on amounts payable to
the Agent under this subsection, together with all costs and
expenses related thereto (including attorneys fees and time
charges
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of attorneys for the Agent, which attorneys may be employees of
the Agent). The obligations of the Lenders under this Section
3.5(vii) shall survive the payment of the Obligations and
termination of this Agreement.
3.6 Lender Statements; Survival of Indemnity. To the extent
reasonably possible, each Lender shall designate an alternate Lending
Installation with respect to its LIBOR Loans to reduce any liability of the
Borrower to such Lender under Sections 3.1, 3.2 and 3.5 or to avoid the
unavailability of a LIBOR Advance under Section 3.3, so long as such designation
is not disadvantageous to such Lender. Each Lender shall deliver a written
statement of such Lender as to the amount due, if any, under Sections 3.1, 3.2,
3.4 and 3.5. Such written statement shall set forth in reasonable detail the
calculations upon which such Lender determined such amount and shall be presumed
(rebuttably) correct. Determination of amounts payable under such Sections in
connection with a LIBOR Loan shall be calculated as though each Lender funded
its LIBOR Loan through the purchase of a deposit of the type and maturity
corresponding to the deposit used as a reference in determining the LIBOR Rate
applicable to such Loan, whether in fact that is the case or not. Unless
otherwise provided herein, the amount specified in the written statement shall
be payable on demand after receipt by the Borrower of the written statement. The
obligations of the Borrower under Sections 3.1, 3.2, 3.4 and 3.5 shall survive
payment of the Obligations and termination of this Agreement.
3.7 Replacement of Lender by Reason of Change in Circumstances. In
the event that any Lender (a "Recovery Lender") requires Borrower to make any
payment to such Recovery Lender in accordance with the provisions of Sections
3.1, and/or 3.2 and/or 3.5 hereof, then upon written notice from Borrower to
Agent, Borrower and Agent shall mutually use their respective best efforts to
find another lender to replace the Recovery Lender. If a replacement lender is
found then Borrower shall pay to the Recovery Lender all amounts owed to such
Recovery Lender under the Facility, such Recovery Lender shall no longer be a
"Lender" hereunder, and concurrently therewith the remaining parties hereto
shall execute such instruments as shall be necessary to have the replacement
lender become a "Lender" hereunder having a Commitment equal to that of the
Recovery Lender.
Nothing contained in this Section 3.7 shall be deemed to relieve
Borrower of its obligations to make all payments to any Recovery Lender in the
amounts and at the times required pursuant to the terms of this Agreement during
the period of time prior to the replacement of such Recovery Lender.
ARTICLE IV.
CONDITIONS PRECEDENT
4.1 Initial Advance. The Lenders shall not be required to make the
initial Advance hereunder unless the Borrower shall have furnished to the Agent,
with sufficient copies for the Lenders, the following:
(i) The duly executed originals of the Loan Documents, including the
Notes, payable to the order of each of the Lenders, the
Subsidiary Guaranty, and this Agreement;
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(ii) A certificate of good standing for the Borrower, certified by
the appropriate governmental officer of the State of Maryland,
and foreign qualification certificates, certified by the
appropriate governmental officer, for each jurisdiction where
the failure to so qualify or be licensed (if required) would
have a Material Adverse Effect;
(iii) A certificate of good standing for each Subsidiary from its
state of formation;
(iv) Copies, certified by an officer of the Borrower, of the
formation documents (including by-laws), of Borrower and each
Subsidiary, together with all amendments thereto;
(v) An incumbency certificate, executed by an officer of the
Borrower, which shall identify by name and title and bear the
signature of the Persons authorized to sign the Loan Documents
and to make borrowings hereunder on behalf of the Borrower, upon
which certificate the Agent and the Lenders shall be entitled to
rely until informed of any change in writing by the Borrower;
(vi) Copies, certified by the Secretary or Assistant Secretary, of
the Borrower's Board of Directors' resolutions (and resolutions
of other bodies, if any are deemed necessary by counsel for any
Lender) authorizing the Advances provided for herein and the
execution, delivery and performance of the Loan Documents to be
executed and delivered by the Borrower hereunder;
(vii) A written opinion of the Borrower's and Subsidiaries' counsel,
addressed to the Lenders in substantially the form of Exhibit C
hereto;
(viii) A certificate, signed by an officer of the Borrower, stating
that on the initial Borrowing Date no Default or Unmatured
Default has occurred and is continuing and that all
representations and warranties of the Borrower are true and
correct as of the initial Borrowing Date;
(ix) The most recent financial statements of the Borrower and a
certificate from an officer of the Borrower that no material
adverse change in the Borrower's financial condition has
occurred since the date of such statements;
(x) UCC financing statement, judgment, and tax lien searches with
respect to the Borrower from the State of Maryland;
(xi) Written money transfer instructions, in substantially the form
of Exhibit F hereto, addressed to the Agent and signed by an
Authorized Officer, together with such other related money
transfer authorizations as the Agent may have reasonably
requested; and
(xii) Such other documents as any Lender or its counsel may have
reasonably requested, the form and substance of which documents
shall be acceptable to the parties and their respective counsel.
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4.2 Each Advance. The Lenders shall not be required to make any
Advance (other than an Advance that, after giving effect thereto and to the
application of the proceeds thereof, does not increase the aggregate amount of
outstanding Advances), unless on the applicable Borrowing Date:
(i) There exists no Default or Unmatured Default;
(ii) The representations and warranties contained in Article V are
true and correct in all material respects as of such Borrowing
Date with respect to Borrower and to any Subsidiary in existence
on such Borrowing Date, except to the extent any such
representation or warranty is stated to relate solely to an
earlier date, in which case such representation or warranty shall
be true and correct on and as of such earlier date; and
(iii) All legal matters incident to the making of such Advance shall be
reasonably satisfactory to the Lenders and their counsel and
shall impose no burden on the Borrower greater than as set forth
in Section 4.1 hereof.
Each Borrowing Notice with respect to each such Advance shall
constitute a representation and warranty by the Borrower that the conditions
contained in Sections 4.2(i) and (ii) have been satisfied. Any Lender may
require a duly completed compliance certificate in substantially the form of
Exhibit D hereto as a condition to making an Advance.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
The Borrower represents and warrants to the Lenders that:
5.1 Existence. Borrower is a real estate investment trust duly
organized and validly existing under the laws of the State of Maryland, with its
principal place of business in Rockville, Maryland, and is duly qualified as a
foreign real estate investment trust, properly licensed (if required), in good
standing and has all requisite authority to conduct its business in each
jurisdiction in which its business is conducted and in which the failure to be
qualified would have a Material Adverse Effect. Each of Borrower's Subsidiaries
is duly organized, validly existing and in good standing under the laws of its
jurisdiction of organization and has all requisite authority to conduct its
business in each jurisdiction in which its business is conducted.
5.2 Authorization and Validity. The Borrower and its Subsidiaries
have the power and authority and legal right to execute and deliver the Loan
Documents and to perform their obligations thereunder. The execution and
delivery by the Borrower and its Subsidiaries of the Loan Documents to which
they are a party and the performance of their obligations thereunder have been
duly authorized by proper proceedings, and the Loan Documents constitute legal,
valid and binding obligations of the Borrower and its Subsidiaries enforceable
against the Borrower and its Subsidiaries in accordance with their terms, except
as enforceability may be limited by bankruptcy, insolvency or similar laws
affecting the enforcement of creditors' rights generally.
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5.3 No Conflict; Government Consent. Neither the execution and
delivery by the Borrower or any Subsidiary of the Loan Documents, nor the
consummation of the transactions therein contemplated, nor compliance with the
provisions thereof will violate any law, rule, regulation, order, writ,
judgment, injunction, decree or award binding on the Borrower or any such
Subsidiary, or the provisions of any indenture, instrument or agreement to which
the Borrower or any such Subsidiary is a party or is subject, or by which it, or
its Property, is bound, or conflict with or constitute a default thereunder, or
result in the creation or imposition of any Lien in, of or on the Property of
the Borrower or any such Subsidiary pursuant to the terms of any such indenture,
instrument or agreement. No order, consent, approval, license, authorization, or
validation of, or filing, recording or registration with, or exemption by, any
governmental or public body or authority, or any subdivision thereof, is
required to authorize, or is required in connection with the execution, delivery
and performance of, or the legality, validity, binding effect or enforceability
of, any of the Loan Documents.
5.4 Material Adverse Change. Since December 31, 2001, there has been
no change in the business, Property, prospects, condition (financial or
otherwise) or results of operations of the Borrower which could have a Material
Adverse Effect.
5.5 Taxes. The Borrower and its Subsidiaries have filed all United
States federal tax returns and all other tax returns which are required to be
filed and have paid all taxes due pursuant to said returns or pursuant to any
assessment received by the Borrower except such taxes, if any, as are being
contested in good faith and as to which adequate reserves have been provided. No
tax liens have been filed and no claims are being asserted with respect to any
such taxes. The charges, accruals and reserves on the books of the Borrower in
respect of any taxes or other governmental charges are adequate.
5.6 Litigation and Guarantee Obligations. There is no litigation,
arbitration, governmental investigation, proceeding or inquiry pending or, to
the knowledge of any of their officers, threatened against or affecting the
Borrower or any of its Subsidiaries which could have a Material Adverse Effect.
The Borrower has no material contingent obligations not provided for or
disclosed in the financial statements referred to in Section 6.4.
5.7 No Subsidiaries. Schedule 2 contains a complete list of each
presently existing Subsidiary of the Borrower. The information set forth in
Schedule 2 regarding each Subsidiary is true and correct.
5.8 ERISA. The Unfunded Liabilities of all Single Employer Plans do
not in the aggregate exceed $100,000. Neither the Borrower nor any other member
of the Controlled Group has incurred, or is reasonably expected to incur, any
withdrawal liability to Multiemployer Plans in excess of $100,000 in the
aggregate. Each Plan complies in all material respects with all applicable
requirements of law and regulations, no Reportable Event has occurred with
respect to any Plan, neither the Borrower nor any other members of the
Controlled Group has withdrawn from any Plan or initiated steps to do so, and no
steps have been taken to reorganize or terminate any Plan.
5.9 Accuracy of Information. No information, exhibit or report
furnished by the Borrower to the Agent or to any Lender in connection with the
negotiation of, or compliance
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with, the Loan Documents contained any material misstatement of fact or omitted
to state a material fact or any fact necessary to make the statements contained
therein not misleading.
5.10 Regulation U. Margin stock (as defined in Regulation U)
constitutes less than 25% of those assets of the Borrower which are subject to
any limitation on sale, pledge, or other restriction hereunder.
5.11 Material Agreements. The Borrower is not subject to any charter or
other corporate restriction which could have a Material Adverse Effect. The
Borrower is not in material default in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in (i)
any agreement to which it is a party, which default could have a Material
Adverse Effect or (ii) any agreement or instrument evidencing or governing
Indebtedness.
5.12 Compliance With Laws. The Borrower has complied in all material
respects with all applicable statutes, rules, regulations, orders and
restrictions of any domestic or foreign government or any instrumentality or
agency thereof, having jurisdiction over the conduct of their respective
businesses or the ownership of their respective Property. The Borrower has not
received any notice to the effect that its operations are not in material
compliance with any of the requirements of applicable federal, state and local
environmental, health and safety statutes and regulations or the subject of any
federal or state investigation evaluating whether any remedial action is needed
to respond to a release of any toxic or hazardous waste or substance into the
environment, which non-compliance or remedial action could have a Material
Adverse Effect.
5.13 Ownership of Properties. Except as set forth on Schedule 3 hereto,
on the date of this Agreement, the Borrower has good title, free of all Liens
other than those permitted by Section 6.17, to all of the Property and assets
reflected in the financial statements as owned by it.
5.14 Investment Company Act. The Borrower is not an "investment
company" or a company "controlled" by an "investment company", within the
meaning of the Investment Company Act of 1940, as amended.
5.15 Public Utility Holding Company Act. The Borrower is not a "holding
company" or a "subsidiary company" of a "holding company", or an "affiliate" of
a "holding company" or of a "subsidiary company" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as amended.
5.16 Solvency.
(i) Immediately after the Closing Date and immediately following the
making of each Loan and after giving effect to the application of
the proceeds of such Loans, (a) the fair value of the assets of
the Borrower and its Subsidiaries (if any) on a consolidated
basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower and its
Subsidiaries, if any, on a consolidated basis; (b) the present
fair saleable value of the property of the Borrower and its
Subsidiaries on a consolidated basis will be greater than the
amount that will be required to pay the probable liability of the
Borrower and its Subsidiaries, if any, on a consolidated basis on
their debts and other liabilities,
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subordinated, contingent or otherwise, as such debts and other
liabilities become absolute and matured; (c) the Borrower and its
Subsidiaries, if any, on a consolidated basis will be able to pay
their debts and liabilities, subordinated, contingent or
otherwise, as such debts and liabilities become absolute and
matured; and (d) the Borrower and its Subsidiaries, if any, on a
consolidated basis will not have unreasonably small capital with
which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted
after the date hereof.
(ii) The Borrower does not intend to incur debts beyond its ability to
pay such debts as they mature, taking into account the timing of
and amounts of cash to be received by it and the timing of the
amounts of cash to be payable on or in respect of its
Indebtedness or the Indebtedness.
5.17 Insurance. (i) The Borrower carries insurance on its Property
with financially sound and reputable insurance companies, in such
amounts, with such deductibles and covering such risks as are
consistent with its obligations under Section 6.6.
5.18 REIT Status. The Borrower is in good standing on the New York
Stock Exchange, is qualified as a real estate investment trust and currently is
in compliance with all applicable provisions of the Code.
5.19 Environmental Matters. Each of the following representations and
warranties is true and correct on and as of the Closing Date except to the
extent that the facts and circumstances giving rise to any such failure to be so
true and correct, in the aggregate, could not reasonably be expected to have a
Material Adverse Effect:
(i) To the knowledge of the Borrower, the Property of the Borrower
and its Subsidiaries do not contain any Materials of
Environmental Concern in amounts or concentrations which
constitute a violation of, or could reasonably give rise to
liability of the Borrower or any Subsidiary under, Environmental
Laws.
(ii) To the knowledge of the Borrower, (i) the Property of the
Borrower and its Subsidiaries and all operations at the Property
are in compliance with all applicable Environmental Laws, and
(ii) with respect to all Property owned by the Borrower and/or
its Subsidiaries (x) for at least two (2) years, have in the last
two years, or (y) for less than two (2) years, have for such
period of ownership, been in compliance in all material respects
with all applicable Environmental Laws.
(iii) Neither the Borrower nor any of its Subsidiaries has received any
notice of violation, alleged violation, non-compliance, liability
or potential liability regarding environmental matters or
compliance with Environmental Laws with regard to any of the
Property, nor does the Borrower have knowledge or reason to
believe that any such notice will be received or is being
threatened.
(iv) To the knowledge of the Borrower, Materials of Environmental
Concern have not been transported or disposed of from the
Property of the Borrower and its Subsidiaries in violation of, or
in a manner or to a location which could
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reasonably give rise to liability of the Borrower or any
Subsidiary under, Environmental Laws, nor have any Materials of
Environmental Concern been generated, treated, stored or disposed
of at, on or under any of the Property of the Borrower and its
Subsidiaries in violation of, or in a manner that could give rise
to liability of the Borrower or any Subsidiary under, any
applicable Environmental Laws.
(v) No judicial proceedings or governmental or administrative action
is pending, or, to the knowledge of the Borrower, threatened,
under any Environmental Law to which the Borrower or any of its
Subsidiaries is or, to the Borrower's knowledge, will be named as
a party with respect to the Property of the Borrower and its
Subsidiaries, nor are there any consent decrees or other decrees,
consent orders, administrative order or other orders, or other
administrative of judicial requirements outstanding under any
Environmental Law with respect to the Property of the Borrower
and its Subsidiaries.
(vi) To the knowledge of the Borrower, there has been no release or
threat of release of Materials of Environmental Concern at or
from the Property of the Borrower and its Subsidiaries, or
arising from or related to the operations of the Borrower and its
Subsidiaries in connection with the Property in violation of or
in amounts or in a manner that could give rise to liability under
Environmental Laws.
ARTICLE VI.
COVENANTS
During the term of this Agreement, unless the Required Lenders shall
otherwise consent in writing:
6.1 Financial Reporting. The Borrower will maintain, for itself and
each Subsidiary, a system of accounting established and administered in
accordance with GAAP, and furnish to the Lenders:
(i) Within 45 days after the close of each fiscal quarter, for the
Borrower and its Subsidiaries, an unaudited balance sheet as of
the close of each such period and profit and loss and
reconciliation of surplus statements and a statement of cash
flows for the period from the beginning of the fiscal year to the
end of such quarter, all certified by the Borrower's chief
financial officer or chief accounting officer;
(ii) Together with the financial statements required hereunder, a
compliance certificate in substantially the form of Exhibit D
hereto signed by the Borrower's chief financial officer or chief
accounting officer showing the calculations necessary to
determine compliance with this Agreement and stating that no
Default or Unmatured Default exists, or if any Default or
Unmatured Default exists, stating the nature and status thereof;
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(iii) Within 45 days after the close of each fiscal quarter, for
themselves and their Subsidiaries, related reports in form and
substance satisfactory to the Lenders, all certified by the
entity's chief financial officer or chief accounting officer,
including a statement of Funds From Operations, listing of
capital expenditures, a report listing and describing all newly
acquired Properties, including their net operating income, cost
and mortgage debt, if any, and summary Property information and
such other information as may be reasonably requested;
(iv) Within 90 days after the close of each fiscal year, for the
Borrower and its Subsidiaries, audited financial statements,
including a balance sheet as of the close of each such period
and profit and loss and reconciliation of surplus statements and
a statement of cash flows for the period, all audited and
certified by independent accountants (which accountants shall be
reasonably satisfactory to Agent) as fairly presenting the
financial position and results of operations and its cash flows
as of the end of such fiscal year for such entities in
accordance with GAAP;
(v) As soon as possible and in any event within 10 days after the
Borrower knows that any Reportable Event has occurred with
respect to any Plan, a statement, signed by the chief financial
officer of the Borrower, describing said Reportable Event and
the action which the Borrower proposes to take with respect
thereto;
(vi) As soon as possible and in any event within 10 days after
receipt by the Borrower, a copy of (a) any notice or claim to
the effect that the Borrower or any of its Subsidiaries is or
may be liable to any Person as a result of the release by the
Borrower, any of its Subsidiaries, or any other Person of any
toxic or hazardous waste or substance into the environment, and
(b) any notice alleging any violation of any federal, state or
local environmental, health or safety law or regulation by the
Borrower or any of its Subsidiaries, which, in either case,
could have a Material Adverse Effect;
(vii) Promptly upon the furnishing thereof to the shareholders of the
Borrower, copies of all financial statements, reports and proxy
statements so furnished;
(viii) Promptly upon the filing thereof, copies of all registration
statements and annual, quarterly, monthly or other reports and
any other public information which the Borrower or any of its
Subsidiaries files with the Securities Exchange Commission; and
(ix) Such other information (including, without limitation, financial
statements for the Borrower and non-financial information) as
the Agent or any Lender may from time to time reasonably
request.
6.2 Use of Proceeds. The Borrower will, and will cause each of its
Subsidiaries to, use the proceeds of the Advances for the general business
purposes of the Borrower, including working capital needs and interim financing
for property acquisitions, and to repay outstanding Advances. The Borrower will
not, nor will it permit any Subsidiary to, use any of the proceeds
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of the Advances to purchase or carry any "margin stock" (as defined in
Regulation U) or to make any Acquisition other than a Permitted Acquisition.
6.3 Notice of Default. The Borrower will, and will cause each of its
Subsidiaries to, give prompt notice in writing to the Lenders of the occurrence
of any Default or Unmatured Default and of any other development, financial or
otherwise, which could have a Material Adverse Effect.
6.4 Conduct of Business. The Borrower will, and will cause each of its
Subsidiaries to, (i) do all things necessary to remain duly incorporated or duly
qualified, validly existing and in good standing as a real estate investment
trust, domestic corporation or limited partnership, as the case may be, in its
jurisdiction of incorporation/formation and maintain all requisite authority to
conduct its business in each jurisdiction in which its business is conducted and
in which the failure to be qualified would have a Material Adverse Effect, (ii)
to carry on and conduct their businesses in substantially the same manner as
they are presently conducted, and (iii) not undertake any business other than
the development, ownership, management and operation of apartment buildings,
office buildings, shopping centers, business centers, and warehouses, and
ancillary businesses specifically related to such properties.
6.5 Taxes. The Borrower will, and will cause each of its Subsidiaries
to, pay when due all taxes, assessments and governmental charges and levies upon
them of their income, profits or Property, except those which are being
contested in good faith by appropriate proceedings and with respect to which
adequate reserves have been set aside.
6.6 Insurance. The Borrower will, and will cause each of its
Subsidiaries to, maintain with financially sound and reputable insurance
companies insurance on all their Property in such amounts and covering such
risks as is consistent with sound business practice, and the Borrower will
furnish to any Lender upon request full information as to the insurance carried.
6.7 Compliance with Laws. The Borrower will, and will cause each of its
Subsidiaries to, comply with all laws, rules, regulations, orders, writs,
judgments, injunctions, decrees or awards to which they may be subject.
6.8 Maintenance of Properties. The Borrower will, and will cause each
of its Subsidiaries to, do all things necessary to maintain, preserve, protect
and keep its Property in good repair, working order and condition, and make all
necessary and proper repairs, renewals and replacements so that their businesses
carried on in connection therewith may be properly conducted at all times.
6.9 Inspection. The Borrower will, and will cause each of its
Subsidiaries to, permit the Lenders, by their respective representatives and
agents, to inspect any of the Property, corporate books and financial records of
the Borrower and each of its Subsidiaries, to examine and make copies of the
books of accounts and other financial records of the Borrower and each of its
Subsidiaries, and to discuss the affairs, finances and accounts of the Borrower
and each of its Subsidiaries, and to be advised as to the same by, their
respective officers at such reasonable times and intervals as the Lenders may
designate.
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6.10 Maintenance of Status. The Borrower shall at all times (i) remain
a corporation listed and in good standing on the New York Stock Exchange, and
(ii) maintain its status as a real estate investment trust in compliance with
all applicable provisions of the Code.
6.11 Dividends. The Borrower and its Subsidiaries shall be permitted to
declare and pay any dividends on its Capital Stock from time to time, provided
that the aggregate amount of such dividends paid with respect to any period of
four (4) fiscal quarters shall not exceed 95% of the Borrower's Funds From
Operations for the most recent period of four (4) consecutive fiscal quarters
for which financial results have been reported, and; provided, further, that the
Borrower shall be permitted at all times to distribute whatever amount is
necessary to maintain its tax status as a real estate investment trust provided
that if a Default exists under Section 7.2 Borrower agrees not to use the
proceeds of any borrowings under any credit facility it may have to make such
distribution.
6.12 Merger. The Borrower will not, nor will it permit any of its
Subsidiaries to, enter into any merger, consolidation, reorganization or
liquidation or transfer or otherwise dispose of all or a Substantial Portion of
their Properties, except for such transactions that occur between Wholly-Owned
Subsidiaries or as otherwise approved in advance by the Lenders, provided,
however, that mergers shall be permitted as a means for the Borrower to acquire
additional Properties or ancillary businesses specifically related to Properties
so long as such merger is not accomplished through a hostile takeover and the
Borrower is the surviving entity.
6.13 Delivery of Subsidiary Guaranties. Borrower shall cause each of
its existing Subsidiaries to execute and deliver to the Agent the Subsidiary
Guaranty. Borrower shall promptly notify Agent of any planned formation or
acquisition of any Subsidiary. Within 10 days after Borrower forms or acquires
any Subsidiary, Borrower shall cause such Subsidiary to execute and deliver to
the Lenders a subsidiary guaranty agreement (together with such other documents
as the Lenders shall reasonably request), or a joinder to the existing
Subsidiary Guaranty, whereby such Subsidiary agrees that it shall be jointly and
severally liable for all Obligations of the Borrower under the Loan Documents.
The Subsidiary Guaranty agreement and such other documents each shall be in form
and substance satisfactory to the Lenders.
6.14 Sale of Accounts. The Borrower will not, nor will it permit any of
its Subsidiaries to, sell or otherwise dispose of any notes receivable or
accounts receivable, with or without recourse.
6.15 Sale and Leaseback. The Borrower will not, nor will it permit any
of its Subsidiaries to, sell or transfer any of its Property in order to
concurrently or subsequently lease as lessee such or similar Property.
6.16 Acquisitions and Investments. Without the prior written consent of
the Required Lenders, the Borrower will not, nor will it permit any of its
Subsidiaries to:
(i) make any Acquisition, except mergers permitted pursuant to Section
6.12;
(ii) make any investments in, or loans or advances to, any
unconsolidated Person to the extent such investments, loans and
advances in the aggregate would exceed ten percent (10%) of their
Total Tangible Assets on a consolidated basis.
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Acquisitions permitted pursuant to this Section 6.16 shall be deemed to be
"Permitted Acquisitions".
6.17 Liens. The Borrower will not, nor will it permit any of its
Subsidiaries to, create, incur, or suffer to exist any Lien in, of or on the
Property of the Borrower or any of its Subsidiaries, except:
(i) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be delinquent
or thereafter can be paid without penalty, or are being
contested in good faith and by appropriate proceedings and for
which adequate reserves shall have been set aside on its books;
(ii) Liens imposed by law, such as carriers', warehousemen's and
mechanics' liens and other similar liens arising in the ordinary
course of business which secure payment of obligations not more
than 60 days past due or which are being contested in good faith
by appropriate proceedings and for which adequate reserves shall
have been set aside on its books;
(iii) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions, or
other social security or retirement benefits, or similar
legislation;
(iv) Utility easements, building restrictions and such other
encumbrances or charges against real property as are of a nature
generally existing with respect to properties of a similar
character and which do not in any material way affect the
marketability of the same or interfere with the use thereof in
the business of the Borrower or its Subsidiaries;
(v) Liens existing on the date hereof and described in Schedule 3
hereto; and
(vi) Liens arising in connection with any Indebtedness permitted
hereunder.
Notwithstanding anything contained in this Agreement to the contrary, Borrower
may from time to time encumber its Properties with Liens in addition to those
set forth in clauses (i) through (vi) above, provided that the granting or
existence of such other Liens shall not cause Borrower to be in breach of the
provisions of Section 6.21 hereof.
Liens permitted pursuant to this Section 6.17 shall be deemed to be "Permitted
Liens".
6.18 Affiliates. The Borrower will not, nor will it permit any of
their Subsidiaries to, enter into any transaction (including, without
limitation, the purchase or sale of any Property or service) with, or make any
payment or transfer to, any Affiliate except in the ordinary course of business
and pursuant to the reasonable requirements of the Borrower's or such
Subsidiary's business and upon fair and reasonable terms no less favorable to
the Borrower or such Subsidiary than the Borrower or such Subsidiary would
obtain in a comparable arms-length transaction.
6.19 Cash Flow to Debt Service Ratio. The Borrower on a consolidated
basis with its Subsidiaries shall maintain a Cash Flow to Debt Service Ratio of
not less than 2.5. Such test
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must be satisfied as of the end of each fiscal quarter, based on annualized
results for the preceding two fiscal quarters.
6.20 Consolidated Tangible Net Worth. The Borrower on a consolidated
basis with its Subsidiaries shall maintain a Consolidated Tangible Net Worth of
not less than $250,000,000, plus 80% of any net cash proceeds from equity
offerings completed subsequent to the Closing Date.
6.21 Indebtedness and Cash Flow Covenants. The Borrower on a
consolidated basis with its Subsidiaries shall not, as of the last day of any
fiscal quarter, permit:
(i) Consolidated Total Indebtedness to exceed fifty percent (50%) of
Total Capitalization Value;
(ii) Consolidated Secured Indebtedness to exceed thirty percent (30%)
of Total Capitalization Value;
(iii) the Value of Unencumbered Assets to be less than 1.75 times the
Consolidated Senior Unsecured Indebtedness;
(iv) annualized EBITDA (determined by multiplying (x) the sum of
EBITDA for the two most recently ended fiscal quarters, by (y)
two) to be less than seventeen and one-half percent (17.5%) of
Consolidated Total Indebtedness; and
(v) annualized EBITDA (determined by multiplying (x) the sum of
EBITDA for the two most recently ended fiscal quarters, by (y)
two) to be less than 2.00 times the Fixed Charges.
6.22 Environmental Matters. Borrower and its Subsidiaries shall:
(i) Comply with, and use all reasonable efforts to ensure compliance
by all tenants and subtenants, if any, with, all applicable
Environmental Laws and obtain and comply with and maintain, and
use all reasonable efforts to ensure that all tenants and
subtenants obtain and comply with and maintain, any and all
licenses, approvals, notifications, registrations or permits
required by applicable Environmental Laws, except to the extent
that failure to do so could not be reasonably expected to have a
Material Adverse Effect; provided that in no event shall the
Borrower or its Subsidiaries be required to modify the terms of
leases, or renewals thereof, with existing tenants (i) at
Property owned by the Borrower or its Subsidiaries as of the
date hereof, or (ii) at Property hereafter acquired by the
Borrower or its Subsidiaries as of the date of such acquisition,
to add provisions to such effect.
(ii) Conduct and complete all investigations, studies, sampling and
testing, and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all
Governmental Authorities regarding Environmental Laws, except to
the extent that (i) the same are being contested in good faith
by appropriate proceedings and the pendency of such proceedings
could not be reasonably expected to have a
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Material Adverse Effect, or (ii) the Borrower has determined in
good faith that contesting the same is not in the best interests
of the Borrower and its Subsidiaries and the failure to contest
the same could not be reasonably expected to have a Material
Adverse Effect.
(iii) Defend, indemnify and hold harmless Agent and each Lender, and
their respective officers and directors, from and against any
claims, demands, penalties, fines, liabilities, settlements,
damages, costs and expenses of whatever kind or nature known or
unknown, contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of the
Borrower, its Subsidiaries or the Property, or any orders,
requirements or demands of Governmental Authorities related
thereto, including, without limitation, attorney's and
consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expenses, except to the extent
that any of the foregoing arise out of the gross negligence or
willful misconduct of the party seeking indemnification
therefor. This indemnity shall continue in full force and effect
regardless of the termination of this Agreement.
(iv) Prior to the acquisition of a new Property after the Closing
Date, perform or cause to be performed an environmental
investigation which investigation shall at a minimum comply with
the specifications and procedures attached hereto as Exhibit H.
In connection with any such investigation, Borrower shall cause
to be prepared a report of such investigation, to be made
available to any Lenders upon reasonable request, for
informational purposes and to assure compliance with the
specifications and procedures.
ARTICLE VII.
DEFAULTS
The occurrence of any one or more of the following events shall
constitute a Default:
7.1 Any representation or warranty made or deemed made by or on
behalf of the Borrower or any of its Subsidiaries to the Lenders or the Agent
under or in connection with this Agreement, any Loan, or any certificate or
information delivered in connection with this Agreement or any other Loan
Document shall be materially false on the date as of which made.
7.2 Nonpayment of principal of any Note when due, or nonpayment of
interest upon any Note or of any commitment fee or other obligations under any
of the Loan Documents within five Business Days after the same becomes due.
7.3 The breach of any of the terms or provisions of Sections 6.2,
6.11, 6.12, 6.14, 6.15, 6.16, 6.19, 6.20, and 6.21 hereof.
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7.4 The breach by the Borrower (other than a breach which constitutes
a Default under Section 7.1, 7.2, or 7.3) of any of the terms or provisions of
this Agreement which is not remedied within thirty days after written notice
from the Agent or any Lender.
7.5 Failure of the Borrower or any of its Subsidiaries to pay when due
any "recourse" Indebtedness (i.e., Indebtedness which is recoverable from the
general assets of the Borrower and/or its Subsidiaries) which is outstanding in
an individual or aggregate amount of at least $10,000,000; or failure of the
Borrower or any of its Subsidiaries to pay when due any Indebtedness which is
not "recourse", which is outstanding in an individual or aggregate amount of at
least $50,000,000; or the default by the Borrower or any of its Subsidiaries in
the performance of any term, provision or condition contained in any agreement
under which such "recourse" or non-recourse Indebtedness was created or is
governed, or any other event shall occur or condition exist, the effect of which
is to cause such "recourse" or non-recourse Indebtedness to become due prior to
its stated maturity; or any "recourse" or non-recourse Indebtedness of the
Borrower or any of its Subsidiaries (other than "recourse" or non-recourse
Indebtedness which is "due on demand") shall be declared to be due and payable
or required to be prepaid (other than by a regularly scheduled payment) prior to
the stated maturity thereof;
7.6 The Borrower or any of its Subsidiaries shall not pay, or admit in
writing its inability to pay, its debts generally as they become due.
7.7 The Borrower or any of its Subsidiaries that has more than
$10,000,000 of Total Tangible Assets shall (i) have an order for relief entered
with respect to it under the Federal bankruptcy laws as now or hereafter in
effect, (ii) make an assignment for the benefit of creditors, (iii) apply for,
seek, consent to, or acquiesce in, the appointment of a receiver, custodian,
trustee, examiner, liquidator or similar official for it or any Substantial
Portion of its Property, (iv) institute any proceeding seeking an order for
relief under the Federal bankruptcy laws as now or hereafter in effect or
seeking to adjudicate it a bankrupt or insolvent, or seeking dissolution,
winding up, liquidation, reorganization, arrangement, adjustment or composition
of it or its debts under any law relating to bankruptcy, insolvency or
reorganization or relief of debtors or fail to file an answer or other pleading
denying the material allegations of any such proceeding filed against it, (v)
take any corporate action to authorize or effect any of the foregoing actions
set forth in this Section 7.7 or (vi) fail to contest in good faith any
appointment or proceeding described in Section 7.8.
7.8 A receiver, trustee, examiner, liquidator or similar official
shall be appointed for the Borrower or any Subsidiary that has more than
$10,000,000 of Total Tangible Assets or any Substantial Portion of their
Property, or a proceeding described in Section 7.7(iv) shall be instituted
against the Borrower or any such Subsidiary and such appointment continues
undischarged or such proceeding continues undismissed or unstayed for a period
of 30 consecutive days.
7.9 Any court, government or governmental agency shall condemn, seize
or otherwise appropriate, or take custody or control of (each a "Condemnation"),
all or any portion of the Property of the Borrower and its Subsidiaries which,
when taken together with all other Property of the Borrower and its Subsidiaries
so condemned, seized, appropriated, or taken custody or control of, during the
twelve-month period ending with the month in which any such Condemnation occurs,
constitutes a Substantial Portion of their Property.
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7.10 The Borrower or any of its Subsidiaries shall fail within 30 days
to pay, bond or otherwise discharge any judgment or order for the payment of
money in excess of $5,000,000, which is not stayed on appeal or otherwise being
appropriately contested in good faith.
7.11 The Unfunded Liabilities of all Single Employer Plans shall exceed
in the aggregate $100,000 or any Reportable Event shall occur in connection with
any Plan.
7.12 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that it has incurred
withdrawal liability to such Multiemployer Plan in an amount which, when
aggregated with all other amounts required to be paid to Multiemployer Plans by
the Borrower or any other member of the Controlled Group as withdrawal liability
(determined as of the date of such notification), exceeds $100,000 or requires
payments exceeding $1,000,000 per annum.
7.13 The Borrower or any other member of the Controlled Group shall
have been notified by the sponsor of a Multiemployer Plan that such
Multiemployer Plan is in reorganization or is being terminated, within the
meaning of Title IV of ERISA, if as a result of such reorganization or
termination the aggregate annual contributions of the Borrower and the other
members of the Controlled Group (taken as a whole) to all Multiemployer Plans
which are then in reorganization or being terminated have been or will be
increased over the amounts contributed to such Multiemployer Plans for the
respective plan years of each such Multiemployer Plan immediately preceding the
plan year in which the reorganization or termination occurs by an amount
exceeding $100,000.
7.14 Failure to remediate within the time period permitted by law or
governmental order (or within a reasonable time give the nature of the problem
if no specific time period has been given) material environmental problems
related to Properties whose aggregate book values are in excess of $20,000,000
or where the estimated cost of remediation for one of such Properties is in
excess of $250,000 or for all of such Properties in the aggregate is in excess
of $1,000,000, in each case after all administrative hearings and appeals have
been concluded.
7.15 The occurrence of any default under any Loan Document or the
breach of any of the terms or provisions of any Loan Document, which default or
breach continues beyond any period of grace therein provided.
ARTICLE VIII.
ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES
8.1 Acceleration. If any Default described in Section 7.6, 7.7 or 7.8
occurs with respect to the Borrower, the obligations of the Lenders to make
Loans hereunder shall automatically terminate and the Obligations shall
immediately become due and payable without any election or action on the part of
the Agent or any Lender. If any other Default occurs, the Required Lenders may
terminate or suspend the obligations of the Lenders to make Loans hereunder, or
declare the Obligations to be due and payable, or both, whereupon the
Obligations shall become immediately due and payable, without presentment,
demand, protest or notice of any kind, all of which the Borrower hereby
expressly waives.
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If, within 10 days after acceleration of the maturity of the Obligations
or termination of the obligations of the Lenders to make Loans hereunder as a
result of any Default (other than any Default as described in Section 7.6, 7.7
or 7.8 with respect to the Borrower) and before any judgment or decree for the
payment of the Obligations due shall have been obtained or entered, the Required
Lenders (in their sole discretion) shall so direct, the Agent shall, by notice
to the Borrower, rescind and annul such acceleration and/or termination.
8.2 Amendments. Subject to the provisions of this Article VIII, the
Required Lenders (or the Agent with the consent in writing of the Required
Lenders) and the Borrower may enter into agreements supplemental hereto for the
purpose of adding or modifying any provisions to the Loan Documents or changing
in any manner the rights of the Lenders or the Borrower hereunder or waiving any
Default hereunder; provided, however, that no such supplemental agreement shall,
without the consent of each Lender affected thereby:
(i) Extend the maturity of any Loan or Note (except in accordance with
Section 2.20) or forgive all or any portion of the principal
amount thereof, or reduce the rate or extend the time of payment
of interest or fees thereon.
(ii) (Reduce the percentage specified in the definition of Required
Lenders.
(iii) Extend the Facility Termination Date (except in accordance with
the terms of Section 2.20) or reduce the amount or extend the
payment date for, the mandatory payments required under Section
2.2 (other than as provided for under Section 2.2), or increase
the amount of the Commitment of any Lender hereunder (except in
accordance with the terms of Section 2.1), or permit the Borrower
to assign its rights under this Agreement.
(iv) Amend this Section 8.2.
Notwithstanding any provision contained in this Section 8.2, the Aggregate
Commitment may be increased prior to the Facility Termination Date (up to the
Maximum Aggregate Commitment) solely by the consent of the Borrower and each
Lender whose Commitment is being increased. No amendment of any provision of
this Agreement relating to the Agent shall be effective without the written
consent of the Agent.
8.3 Preservation of Rights. No delay or omission of the Lenders or the
Agent to exercise any right under the Loan Documents shall impair such right or
be construed to be a waiver of any Default or an acquiescence therein, and the
making of a Loan notwithstanding the existence of a Default or the inability of
the Borrower to satisfy the conditions precedent to such Loan shall not
constitute any waiver or acquiescence. Any single or partial exercise of any
such right shall not preclude other or further exercise thereof or the exercise
of any other right, and no waiver, amendment or other variation of the terms,
conditions or provisions of the Loan Documents whatsoever shall be valid unless
in writing signed by the Lenders required pursuant to Section 8.2, and then only
to the extent in such writing specifically set forth. All remedies contained in
the Loan Documents or by law afforded shall be cumulative and all shall be
available to the Agent and the Lenders until the Obligations have been paid in
full.
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ARTICLE IX.
GENERAL PROVISIONS
9.1 Survival of Representations. All representations and warranties of
the Borrower contained in this Agreement shall survive delivery of the Notes and
the making of the Loans herein contemplated.
9.2 Governmental Regulation. Anything contained in this Agreement to
the contrary notwithstanding, no Lender shall be obligated to extend credit to
the Borrower in violation of any limitation or prohibition provided by any
applicable statute or regulation.
9.3 Taxes. Any taxes (excluding (i) federal taxation of the net income
of any Lender or applicable Lending Installation, (ii) state and local taxation
in the jurisdiction where a Lender's home office is situated, (iii) state and
local taxation in a jurisdiction other than described in (ii) above to the
extent such Lender receives credit on its tax payments in its home jurisdiction
for such taxes, and (iv) federal withholding tax imposed on payments due
hereunder or under the Notes) or other similar assessments or charges made by
any governmental or revenue authority in respect of the Loan Documents shall be
paid by the Borrower when due (and Agent shall forward to Borrower copies of any
notices of such taxes promptly following Agent's receipt of any such notices).
9.4 Headings. Section headings in the Loan Documents are for
convenience of reference only, and shall not govern the interpretation of any of
the provisions of the Loan Documents.
9.5 Entire Agreement. The Loan Documents embody the entire agreement
and understanding among the Borrower, the Agent and the Lenders and supersede
all prior commitments, agreements and understandings among the Borrower, the
Agent and the Lenders relating to the subject matter thereof.
9.6 Several Obligations; Benefits of this Agreement. The respective
obligations of the Lenders hereunder are several and not joint and no Lender
shall be the partner or agent of any other (except to the extent to which the
Agent is authorized to act as such). The failure of any Lender to perform any of
its obligations hereunder shall not relieve any other Lender from any of its
obligations hereunder. This Agreement shall not be construed so as to confer any
right or benefit upon any Person other than the parties to this Agreement and
their respective successors and assigns.
9.7 Expenses; Indemnification. The Borrower shall reimburse the Agent
for any costs, internal charges and out-of-pocket expenses (including, without
limitation, all reasonable fees for consultants and reasonable fees and
reasonable expenses for attorneys for the Agent, which attorneys may be
employees of the Agent) paid or incurred by the Agent in connection with the
preparation, negotiation, execution, delivery, review, amendment, modification,
and administration of the Loan Documents; provided that the provisions of
Section 12.2.1 and 12.3.1 shall govern with respect to payment of the fees and
expenses associated with the sale of participating interests in, and assignments
of, the Loans. The Borrower also agrees to reimburse
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the Agent and the Lenders for any costs, internal charges and out-of-pocket
expenses (including, without limitation, all reasonable fees and reasonable
expenses for attorneys for the Agent and the Lenders, which attorneys may be
employees of the Agent or the Lenders) paid or incurred by the Agent or any
Lender in connection with the collection and enforcement of the Loan Documents
(including, without limitation, any workout). The Borrower further agrees to
indemnify the Agent and each Lender, its directors, officers and employees
against all losses, claims, damages, penalties, judgments, liabilities and
expenses (including, without limitation, all expenses of litigation or
preparation therefor whether or not the Agent or any Lender is a party thereto)
which any of them may pay or incur arising out of or relating to this Agreement,
the other Loan Documents, the Properties, the transactions contemplated hereby
or the direct or indirect application or proposed application of the proceeds of
any Loan hereunder, except that the foregoing indemnity shall not apply to a
Lender to the extent that any losses, claims, damages, penalties, judgments,
liabilities and expenses are the result of such Lender's gross negligence or
willful misconduct. The obligations of the Borrower under this Section shall
survive the termination of this Agreement.
9.8 Numbers of Documents. All statements, notices, closing documents,
and requests hereunder shall be furnished to the Agent with sufficient
counterparts so that the Agent may furnish one to each of the Lenders.
9.9 Accounting. Except as provided to the contrary herein, all
accounting terms used herein shall be interpreted and all accounting
determinations hereunder shall be made in accordance with GAAP, except that any
calculation or determination which is to be made on a consolidated basis shall
be made for the Borrower and all its Subsidiaries, including those Subsidiaries,
if any, which are unconsolidated on the Borrower's official financial
statements.
9.10 Severability of Provisions. Any provision in any Loan Document
that is held to be inoperative, unenforceable, or invalid in any jurisdiction
shall, as to that jurisdiction, be inoperative, unenforceable, or invalid
without affecting the remaining provisions in that jurisdiction or the
operation, enforceability, or validity of that provision in any other
jurisdiction, and to this end the provisions of all Loan Documents are declared
to be severable.
9.11 Nonliability of Lenders. The relationship between the Borrower, on
the one hand, and the Lenders and the Agent, on the other, shall be solely that
of borrower and lender. Neither the Agent nor any Lender shall have any
fiduciary responsibilities to the Borrower. Neither the Agent nor any Lender
undertakes any responsibility to the Borrower to review or inform the Borrower
of any matter in connection with any phase of the Borrower's business or
operations.
9.12 CHOICE OF LAW. THE LOAN DOCUMENTS (OTHER THAN THOSE CONTAINING A
CONTRARY EXPRESS CHOICE OF LAW PROVISION) SHALL BE CONSTRUED IN ACCORDANCE WITH
THE INTERNAL LAWS (AND NOT THE LAW OF CONFLICTS) OF THE STATE OF ILLINOIS, BUT
GIVING EFFECT TO FEDERAL LAWS APPLICABLE TO NATIONAL BANKS.
9.13 CONSENT TO JURISDICTION. THE BORROWER HEREBY IRREVOCABLY SUBMITS
TO THE NON-EXCLUSIVE JURISDICTION OF ANY UNITED STATES FEDERAL OR ILLINOIS STATE
COURT SITTING IN CHICAGO IN ANY ACTION OR PROCEEDING ARISING OUT OF OR RELATING
TO ANY LOAN
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DOCUMENTS AND THE BORROWER HEREBY IRREVOCABLY AGREES THAT ALL CLAIMS IN RESPECT
OF SUCH ACTION OR PROCEEDING MAY BE HEARD AND DETERMINED IN ANY SUCH COURT AND
IRREVOCABLY WAIVES ANY OBJECTION IT MAY NOW OR HEREAFTER HAVE AS TO THE VENUE OF
ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT IN SUCH A COURT OR THAT SUCH COURT
IS AN INCONVENIENT FORUM. NOTHING HEREIN SHALL LIMIT THE RIGHT OF THE AGENT OR
ANY LENDER TO BRING PROCEEDINGS AGAINST THE BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION. ANY JUDICIAL PROCEEDING BY THE BORROWER AGAINST THE AGENT OR ANY
LENDER OR ANY AFFILIATE OF THE AGENT OR ANY LENDER INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER IN ANY WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH
ANY LOAN DOCUMENT SHALL BE BROUGHT ONLY IN A COURT IN CHICAGO, ILLINOIS.
9.14 WAIVER OF JURY TRIAL. THE BORROWER, THE AGENT AND EACH LENDER
HEREBY WAIVE TRIAL BY JURY IN ANY JUDICIAL PROCEEDING INVOLVING, DIRECTLY OR
INDIRECTLY, ANY MATTER (WHETHER SOUNDING IN TORT, CONTRACT OR OTHERWISE) IN ANY
WAY ARISING OUT OF, RELATED TO, OR CONNECTED WITH ANY LOAN DOCUMENT OR THE
RELATIONSHIP ESTABLISHED THEREUNDER.
ARTICLE X.
THE AGENT
10.1 Appointment. Bank One, NA is hereby appointed Agent hereunder and
under each other Loan Document, and each of the Lenders irrevocably authorizes
the Agent to act as the agent of such Lender. The Agent agrees to act as such
upon the express conditions contained in this Article X. The Agent shall not
have a fiduciary relationship in respect of the Borrower or any Lender by reason
of this Agreement.
10.2 Powers. The Agent shall have and may exercise such powers under
the Loan Documents as are specifically delegated to the Agent by the terms of
each thereof, together with such powers as are reasonably incidental thereto.
The Agent shall have no implied duties to the Lenders, or any obligation to the
Lenders to take any action thereunder except any action specifically provided by
the Loan Documents to be taken by the Agent.
10.3 General Immunity. Neither the Agent nor any of its directors,
officers, agents or employees shall be liable to the Borrower, the Lenders or
any Lender for (i) any action taken or omitted to be taken by it or them
hereunder or under any other Loan Document or in connection herewith or
therewith except for its or their own gross negligence or willful misconduct; or
(ii) any determination by the Agent that compliance with any law or any
governmental or quasi-governmental rule, regulation, order, policy, guideline or
directive (whether or not having the force of law) requires the Advances and
Commitments hereunder to be classified as being part of a "highly leveraged
transaction".
10.4 No Responsibility for Loans, Recitals, etc. Neither the Agent nor
any of its directors, officers, agents or employees shall be responsible for or
have any duty to ascertain,
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inquire into, or verify (i) any statement, warranty or representation made in
connection with any Loan Document or any borrowing hereunder; (ii) the
performance or observance of any of the covenants or agreements of any obligor
under any Loan Document, including, without limitation, any agreement by an
obligor to furnish information directly to each Lender; (iii) the satisfaction
of any condition specified in Article IV, except receipt of items required to be
delivered to the Agent; (iv) the validity, effectiveness or genuineness of any
Loan Document or any other instrument or writing furnished in connection
therewith; or (v) the value, sufficiency, creation, perfection or priority of
any interest in any collateral security. The Agent shall have no duty to
disclose to the Lenders information that is not required to be furnished by the
Borrower to the Agent at such time, but is voluntarily furnished by the Borrower
to the Agent (either in its capacity as Agent or in its individual capacity).
10.5 Action on Instructions of Lenders. The Agent shall in all cases be
fully protected in acting, or in refraining from acting, hereunder and under any
other Loan Document in accordance with written instructions signed by the
Required Lenders, and such instructions and any action taken or failure to act
pursuant thereto shall be binding on all of the Lenders and on all holders of
Notes. The Agent shall be fully justified in failing or refusing to take any
action hereunder and under any other Loan Document unless it shall first be
indemnified to its satisfaction by the Lenders pro rata against any and all
liability, cost and expense that it may incur by reason of taking or continuing
to take any such action.
10.6 Employment of Agents and Counsel. The Agent may execute any of its
duties as Agent hereunder and under any other Loan Document by or through
employees, agents, and attorneys-in-fact and shall not be answerable to the
Lenders, except as to money or securities received by it or its authorized
agents, for the default or misconduct of any such agents or attorneys-in-fact
selected by it with reasonable care. The Agent shall be entitled to advice of
counsel concerning all matters pertaining to the agency hereby created and its
duties hereunder and under any other Loan Document.
10.7 Reliance on Documents; Counsel. The Agent shall be entitled to
rely upon any Note, notice, consent, certificate, affidavit, letter, telegram,
statement, paper or document believed by it to be genuine and correct and to
have been signed or sent by the proper person or persons, and, in respect to
legal matters, upon the opinion of counsel selected by the Agent, which counsel
may be employees of the Agent.
10.8 Agent's Reimbursement and Indemnification. The Lenders agree to
reimburse and indemnify the Agent ratably in proportion to their respective
Commitments (i) for any amounts not reimbursed by the Borrower for which the
Agent is entitled to reimbursement by the Borrower under the Loan Documents,
(ii) for any other expenses incurred by the Agent on behalf of the Lenders, in
connection with the preparation, execution, delivery, administration and
enforcement of the Loan Documents and (iii) for any liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of the Loan Documents or any other document delivered in connection therewith or
the transactions contemplated thereby, or the enforcement of any of the terms
thereof or of any such other documents, provided that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the Agent.
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The obligations of the Lenders under this Section 10.8 shall survive payment of
the Obligations and termination of this Agreement.
10.9 Rights as a Lender. In the event the Agent is a Lender, the Agent
shall have the same rights and powers hereunder and under any other Loan
Document as any Lender and may exercise the same as though it were not the
Agent, and the term "Lender" or "Lenders" shall, at any time when the Agent is a
Lender, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may accept deposits from, lend money to, and
generally engage in any kind of trust, debt, equity or other transaction, in
addition to those contemplated by this Agreement or any other Loan Document,
with the Borrower or any of its Subsidiaries in which the Borrower or such
Subsidiary is not restricted hereby from engaging with any other Person. The
Agent, in its individual capacity, is not obligated to remain a Lender.
10.10 Lender Credit Decision. Each Lender acknowledges that it has,
independently and without reliance upon the Agent or any other Lender and based
on the financial statements prepared by the Borrower and such other documents
and information as it has deemed appropriate, made its own credit analysis and
decision to enter into this Agreement and the other Loan Documents. Each Lender
also acknowledges that it will, independently and without reliance upon the
Agent or any other Lender and based on such documents and information as it
shall deem appropriate at the time, continue to make its own credit decisions in
taking or not taking action under this Agreement and the other Loan Documents.
10.11 Successor Agent. The Agent may resign at any time by giving
written notice thereof to the Lenders and the Borrower, such resignation to be
effective upon the appointment of a successor Agent or, if no successor Agent
has been appointed, forty-five days after the retiring Agent gives notice of its
intention to resign. Upon any such resignation, the Required Lenders shall have
the right to appoint, on behalf of the Borrower and the Lenders, a successor
Agent. If no successor Agent shall have been so appointed by the Required
Lenders within thirty days after the resigning Agent's giving notice of its
intention to resign, then the resigning Agent may appoint, on behalf of the
Borrower and the Lenders, a successor Agent. If the Agent has resigned and no
successor Agent has been appointed, the Lenders may perform all the duties of
the Agent hereunder and the Borrower shall make all payments in respect of the
Obligations to the applicable Lender and for all other purposes shall deal
directly with the Lenders. No successor Agent shall be deemed to be appointed
hereunder until such successor Agent has accepted the appointment. Any such
successor Agent shall be a commercial bank having capital and retained earnings
of at least $50,000,000. Upon the acceptance of any appointment as Agent
hereunder by a successor Agent, such successor Agent shall thereupon succeed to
and become vested with all the rights, powers, privileges and duties of the
resigning Agent. Upon the effectiveness of the resignation of the Agent, the
resigning Agent shall be discharged from its duties and obligations hereunder
and under the Loan Documents. After the effectiveness of the resignation of an
Agent, the provisions of this Article XI shall continue in effect for the
benefit of such Agent in respect of any actions taken or omitted to be taken by
it while it was acting as the Agent hereunder and under the other Loan
Documents.
10.12 Commitment as a Lender. Bank One, NA agrees to provide a
Commitment of at least $10,000,000 so long as Bank One, NA remains as Agent;
provided, that the foregoing agreement of Bank One, NA shall not apply to
assignments of all or any portion of Bank One, NA's Commitment which are made at
any time following a Default by Borrower hereunder.
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ARTICLE XI.
SETOFF; RATABLE PAYMENTS
11.1 Setoff. In addition to, and without limitation of, any rights of
the Lenders under applicable law, if a Default occurs, any and all deposits
(including all account balances, whether provisional or final and whether or not
collected or available) and any other Indebtedness at any time held or owing by
any Lender to or for the credit or account of the Borrower may be offset and
applied toward the payment of the Obligations owing to such Lender, whether or
not the Obligations, or any part hereof, shall then be due.
11.2 Ratable Payments. If any Lender, whether by setoff or otherwise,
has payment made to it upon its Loans (other than payments received pursuant to
Sections 3.1, 3.2, 3.4 and 3.5) in a greater proportion than that received by
any other Lender, such Lender agrees, promptly upon demand, to purchase a
portion of the Loans held by the other Lenders so that after such purchase each
Lender will hold its ratable proportion of Loans. If any Lender, whether in
connection with setoff or amounts which might be subject to setoff or otherwise,
receives collateral or other protection for its Obligations or such amounts
which may be subject to setoff, such Lender agrees, promptly upon demand, to
take such action necessary such that all Lenders share in the benefits of such
collateral ratably in proportion to their Loans. In case any such payment is
disturbed by legal process, or otherwise, appropriate further adjustments shall
be made.
ARTICLE XII.
BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS
12.1 Successors and Assigns. The terms and provisions of the Loan
Documents shall be binding upon and inure to the benefit of the Borrower and the
Lenders and their respective successors and assigns, except that (i) the
Borrower shall not have the right to assign its rights or obligations under the
Loan Documents and (ii) any assignment by any Lender must be made in compliance
with Section 12.3. The parties to this Agreement acknowledge that clause (ii) of
this Section 12.1 relates only to absolute assignments and does not prohibit
assignments creating security interests, including, without limitation, (x) any
pledge or assignment by any Lender of all or any portion of its rights under
this Agreement and any Note to a Federal Reserve Bank or (y) in the case of a
Lender which is a fund, any pledge or assignment of all or any portion of its
rights under this Agreement and any Note to its trustee in support of its
obligations to its trustee; provided, however, that no such pledge or assignment
creating a security interest shall release the transferor Lender from its
obligations hereunder unless and until the parties thereto have complied with
the provisions of Section 12.3. The Agent may treat the Person which made any
Loan or which holds any Note as the owner thereof for all purposes hereof unless
and until such Person complies with Section 12.3; provided, however, that the
Agent may in its discretion (but shall not be required to) follow instructions
from the Person which made any Loan or which holds any Note to direct payments
relating to such Loan or Note to another Person. Any assignee of the rights to
any Loan or any Note agrees by acceptance of such assignment to be bound by all
the terms and provisions of the Loan Documents. Any request, authority or
consent
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of any Person, who at the time of making such request or giving such authority
or consent is the owner of the rights to any Loan (whether or not a Note has
been issued in evidence thereof), shall be conclusive and binding on any
subsequent holder or assignee of the rights to such Loan.
12.2 Participations.
12.2.1 Permitted Participants; Effect. Any Lender may, in the
ordinary course of its business and in accordance with applicable law, at
any time sell to one or more banks or other entities ("Participants")
participating interests in any Loan owing to such Lender, any Note held
by such Lender, any Commitment of such Lender or any other interest of
such Lender under the Loan Documents. In the event of any such sale by a
Lender of participating interests to a Participant, such Lender's
obligations under the Loan Documents shall remain unchanged, such Lender
shall remain solely responsible to the other parties hereto for the
performance of such obligations, such Lender shall remain the owner of
its Loans and the holder of any Note issued to it in evidence thereof for
all purposes under the Loan Documents, all amounts payable by the
Borrower under this Agreement shall be determined as if such Lender had
not sold such participating interests, and the Borrower and the Agent
shall continue to deal solely and directly with such Lender in connection
with such Lender's rights and obligations under the Loan Documents.
Notwithstanding anything contained in this Agreement to the contrary,
Borrower shall not be obligated to pay any fees and expenses incurred by
any Lender in connection with the sale of any participating interests in
any Loan pursuant to this Section.
12.2.2 Voting Rights. Each Lender shall retain the sole right to
approve, without the consent of any Participant, any amendment,
modification or waiver of any provision of the Loan Documents other than
any amendment, modification or waiver with respect to any Loan or
Commitment in which such Participant has an interest which would require
consent of all of the Lenders pursuant to the terms of Section 8.2 or of
any other Loan Document.
12.2.3 Benefit of Certain Provisions. The Borrower agrees that
each Participant shall be deemed to have the right of setoff provided in
Section 11.1 in respect of its participating interest in amounts owing
under the Loan Documents to the same extent as if the amount of its
participating interest were owing directly to it as a Lender under the
Loan Documents, provided that each Lender shall retain the right of
setoff provided in Section 11.1 with respect to the amount of
participating interests sold to each Participant. The Lenders agree to
share with each Participant, and each Participant, by exercising the
right of setoff provided in Section 11.1, agrees to share with each
Lender, any amount received pursuant to the exercise of its right of
setoff, such amounts to be shared in accordance with Section 11.2 as if
each Participant were a Lender. The Borrower further agrees that each
Participant shall be entitled to the benefits of Sections 3.1, 3.2, 3.4
and 3.5 to the same extent as if it were a Lender and had acquired its
interest by assignment pursuant to Section 12.3, provided that (i) a
Participant shall not be entitled to receive any greater payment under
Section 3.1, 3.2, 3.4 or 3.5 than the Lender who sold the participating
interest to such Participant would have received had it retained such
interest for its own account, unless the sale of such interest to such
Participant is made with the prior written consent of the Borrower, and
(ii) any Participant organized under the laws
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of any jurisdiction other than the United States of America or any state
thereof agrees to comply with the provisions of Section 3.5 to the same
extent as if it were a Lender.
12.3 Assignments.
12.3.1 Permitted Assignments. Any Lender may, in the ordinary
course of its business and in accordance with applicable law, at any time
assign to one or more banks or other entities ("Purchasers") all or any
part of its rights and obligations under the Loan Documents. Such
assignment shall be substantially in the form of Exhibit C or in such
other form as may be agreed to by the parties thereto. The consent of the
Borrower and the Agent shall be required prior to an assignment becoming
effective with respect to a Purchaser which is not a Lender or an
Affiliate thereof immediately prior to the assignment; provided, however,
that if a Default has occurred and is continuing, or if the assignment is
in connection with the physical settlement of credit derivative
transactions, the consent of the Borrower shall not be required. The
Borrower's consent shall not be unreasonably withheld or delayed. Each
such assignment with respect to a Purchaser which is not a Lender in
connection with any assignment of any portion of the initial $25,000,000
Maximum Aggregate Commitment or an Affiliate thereof shall (unless each
of the Borrower and the Agent otherwise consents) be in an amount not
less than the lesser of (i) $ 5,000,000 or (ii) the remaining amount of
the assigning Lender's Commitment (calculated as at the date of such
assignment) or outstanding Loans (if the applicable or Aggregate
Commitment above the initial $25,000,000 Maximum Aggregate Commitment has
been terminated). Notwithstanding anything contained in this Agreement,
Borrower shall not be obligated to pay any fees and expenses incurred in
connection with any assignment of any portion of the initial $25,000,000
Maximum Aggregate Commitment.
12.3.2 Effect; Effective Date. Upon (i) delivery to the Agent of
an assignment, together with any consents required by Section 12.3.1, and
(ii) payment of a $3,500 fee to the Agent for processing such assignment
(unless such fee is waived by the Agent), such assignment shall become
effective on the effective date specified in such assignment. The
assignment shall contain a representation by the Purchaser to the effect
that none of the consideration used to make the purchase of the
Commitment and Loans under the applicable assignment agreement
constitutes "plan assets" as defined under ERISA and that the rights and
interests of the Purchaser in and under the Loan Documents will not be
"plan assets" under ERISA. On and after the effective date of such
assignment, such Purchaser shall for all purposes be a Lender party to
this Agreement and any other Loan Document executed by or on behalf of
the Lenders and shall have all the rights and obligations of a Lender
under the Loan Documents, to the same extent as if it were an original
party hereto, and no further consent or action by the Borrower, the
Lenders or the Agent shall be required to release the transferor Lender
with respect to the percentage of the Aggregate Commitment and Loans
assigned to such Purchaser. Upon the consummation of any assignment to a
Purchaser pursuant to this Section 12.3.2, the transferor Lender, the
Agent and the Borrower shall, if the transferor Lender or the Purchaser
desires that its Loans be evidenced by Notes, make appropriate
arrangements so that new Notes or, as appropriate, replacement Notes are
issued to such transferor Lender and new Notes or, as appropriate,
replacement Notes, are issued to such
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Purchaser, in each case in principal amounts reflecting their respective
Commitments, as adjusted pursuant to such assignment.
12.4 Dissemination of Information. The Borrower authorizes each Lender
to disclose to any Participant or Purchaser or any other Person acquiring an
interest in the Loan Documents by operation of law (each a "Transferee") and any
prospective Transferee any and all information in such Lender's possession
concerning the creditworthiness of the Borrower and its Subsidiaries.
12.5 Tax Treatment. If any interest in any Loan Document is transferred
to any Transferee which is organized under the laws of any jurisdiction other
than the United States or any State thereof, the transferor Lender shall cause
such Transferee, concurrently with the effectiveness of such transfer, to comply
with the provisions of Section 3.5(iv).
ARTICLE XIII.
NOTICES
13.1 Giving Notice. Except as otherwise permitted by Section 2.14 with
respect to borrowing notices, all notices and other communications provided to
any party hereto under this Agreement or any other Loan Document shall be in
writing or by facsimile and addressed or delivered to such party at its address
set forth below its signature hereto or at such other address as may be
designated by such party in a notice to the other parties. Any notice
transmitted by facsimile, shall be deemed given when received according to the
recipient's automatically generated answerback. Any notice transmitted by
Federal Express or other recognized overnight courier shall be presumed
(rebuttably) given the business day after it is sent. Any other notice shall be
effective only when actually received.
13.2 Change of Address. The Borrower, the Agent and any Lender may each
change the address for service of notice upon it by a notice in writing to the
other parties hereto.
ARTICLE XIV.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, all of
which taken together shall constitute one agreement, and any of the parties
hereto may execute this Agreement by signing any such counterpart. This
Agreement shall be effective when it has been executed by the Borrower, the
Agent and the Lenders and each party has notified the Agent by telex or
telephone, that it has taken such action.
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ARTICLE XV.
NO OFFICER, ETC. LIABILITY
No trustee, officer or agent of the Borrower shall be held to any
personal liability whatsoever, in tort, contract or otherwise, in connection
with the transactions contemplated by this Agreement.
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IN WITNESS WHEREOF, the Borrower, the Lender and the Agent have executed
this Agreement as of the date first above written.
WASHINGTON REAL ESTATE
INVESTMENT TRUST
By: /s/ Edmund B. Cronin
--------------------
Print Name: Edmund B. Cronin, Jr.
Title: President and Chief Executive Officer
6110 Executive Blvd.
Suite 800
Rockville, MD 20858
Phone: 301-984-9400
Facsimile: 301-984-9610
Attention: Edmund B. Cronin, Jr.
Commitments
$25,000,000
BANK ONE, NA, Individually and as Agent
By: /s/ Kenneth Nelson
------------------
Print Name: Kenneth Nelson
Title:
One Bank One Plaza
Chicago, Illinois 60670
Attention: Corporate Real Estate Division
Phone: (312) 732-6403
Fax: (312) 732-5939
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EXHIBIT A-1
PRICING GRID
- -----------------------------------------------------------------------------
LIBOR ABR
Applicable Applicable
S&P Rating Moody's Rating Margin Margin
=============================================================================
A or higher A2 or higher 0.60% 0%
- -----------------------------------------------------------------------------
A- A3 0.70% 0%
- -----------------------------------------------------------------------------
BBB+ Baa1 0.70% 0%
- -----------------------------------------------------------------------------
BBB Baa2 1.00% 0%
- -----------------------------------------------------------------------------
BBB- Baa3 1.25% 0.25%
- -----------------------------------------------------------------------------
Less than BBB- Less than Baa3 2.25% 0.50%
- -----------------------------------------------------------------------------
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EXHIBIT A-2
UNUSED FEES
- --------------------------------------------------------------------------------
**=20% Usage
and
*40% Usage
S&P Rating Moody's Rating *20% Usage **=40% Usage
================================================================================
A or higher A2 or higher .30% .275% .225%
- --------------------------------------------------------------------------------
A- A3 .35% .30% .25%
- --------------------------------------------------------------------------------
BBB+ Baa1 .35% .30% .25%
- --------------------------------------------------------------------------------
BBB Baa2 .35% .30% .25%
- --------------------------------------------------------------------------------
BBB- Baa3 .40% .35% .30%
- --------------------------------------------------------------------------------
Less than BBB- Less than Baa3 .40% .35% .30%
- --------------------------------------------------------------------------------
_____________
* Equals to less than
** Equals to more than
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TABLE OF CONTENTS
Page
----
ARTICLE I. DEFINITIONS ................................................................... 2
ARTICLE II. THE CREDIT ................................................................... 14
2.1 Commitment; Increase in Aggregate Commitment .................................. 14
2.2 Final Principal Payment ....................................................... 15
2.3 Ratable Loans ................................................................. 15
2.4 Applicable Margins ............................................................ 15
2.5 Other Fees .................................................................... 16
2.6 Unused Fee .................................................................... 16
2.7 Minimum Amount of Each Advance ................................................ 16
2.8 Optional Principal Payments ................................................... 16
2.9 Method of Selecting Types and Interest Periods for New Advances ............... 16
2.10 Conversion and Continuation of Outstanding Advances ......................... 17
2.11 Changes in Interest Rate, Etc. .............................................. 17
2.12 Rates Applicable After Default .............................................. 18
2.13 Method of Payment ........................................................... 18
2.14 Notes; Telephonic Notices ................................................... 18
2.15 Interest Payment Dates; Interest and Fee Basis .............................. 18
2.16 Notification of Advances, Interest Rates and Prepayments .................... 19
2.17 Lending Installations ....................................................... 19
2.18 Non-Receipt of Funds by the Agent ........................................... 19
2.19 Reduction in Aggregate Commitment ........................................... 19
2.20 Extension of Facility Termination Date ...................................... 19
ARTICLE III. CHANGE IN CIRCUMSTANCES ..................................................... 20
3.1 Yield Protection .............................................................. 20
3.2 Changes in Capital Adequacy Regulations ....................................... 21
3.3 Availability of LIBOR Advances ................................................ 21
3.4 Funding Indemnification ....................................................... 22
3.5 Taxes ......................................................................... 22
3.6 Lender Statements; Survival of Indemnity ...................................... 24
3.7 Replacement of Lender by Reason of Change in Circumstances .................... 24
ARTICLE IV. CONDITIONS PRECEDENT ......................................................... 24
4.1 Initial Advance ............................................................... 24
4.2 Each Advance .................................................................. 26
ARTICLE V. REPRESENTATIONS AND WARRANTIES ................................................ 26
5.1 Existence ..................................................................... 26
5.2 Authorization and Validity .................................................... 26
5.3 No Conflict; Government Consent ............................................... 27
5.4 Material Adverse Change ....................................................... 27
5.5 Taxes ......................................................................... 27
5.6 Litigation and Guarantee Obligations .......................................... 27
5.7 No Subsidiaries ............................................................... 27
5.8 ERISA ......................................................................... 27
5.9 Accuracy of Information ....................................................... 27
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5.10 Regulation U .................................................. 28
5.11 Material Agreements ........................................... 28
5.12 Compliance With Laws .......................................... 28
5.13 Ownership of Properties ....................................... 28
5.14 Investment Company Act ........................................ 28
5.15 Public Utility Holding Company Act ............................ 28
5.16 Solvency ...................................................... 28
5.17 Insurance ..................................................... 29
5.18 REIT Status ................................................... 29
5.19 Environmental Matters ......................................... 29
ARTICLE VI. COVENANTS ....................................................... 30
6.1 Financial Reporting .............................................. 30
6.2 Use of Proceeds .................................................. 31
6.3 Notice of Default ................................................ 32
6.4 Conduct of Business .............................................. 32
6.5 Taxes ............................................................ 32
6.6 Insurance ........................................................ 32
6.7 Compliance with Laws ............................................. 32
6.8 Maintenance of Properties ........................................ 32
6.9 Inspection ....................................................... 32
6.10 Maintenance of Status. ........................................ 33
6.11 Dividends ..................................................... 33
6.12 Merger ........................................................ 33
6.13 Delivery of Subsidiary Guaranties ............................. 33
6.14 Sale of Accounts .............................................. 33
6.15 Sale and Leaseback ............................................ 33
6.16 Acquisitions and Investments .................................. 33
6.17 Liens ......................................................... 34
6.18 Affiliates .................................................... 34
6.19 Cash Flow to Debt Service Ratio ............................... 34
6.20 Consolidated Tangible Net Worth ............................... 35
6.21 Indebtedness and Cash Flow Covenants .......................... 35
6.22 Environmental Matters ......................................... 35
ARTICLE VII. DEFAULTS ....................................................... 36
ARTICLE VIII. ACCELERATION, WAIVERS, AMENDMENTS AND REMEDIES ................ 38
8.1 Acceleration ..................................................... 38
8.2 Amendments ....................................................... 39
8.3 Preservation of Rights ........................................... 39
ARTICLE IX. GENERAL PROVISIONS .............................................. 40
9.1 Survival of Representations ...................................... 40
9.2 Governmental Regulation .......................................... 40
9.3 Taxes ............................................................ 40
9.4 Headings ......................................................... 40
9.5 Entire Agreement ................................................. 40
9.6 Several Obligations; Benefits of this Agreement .................. 40
9.7 Expenses; Indemnification ........................................ 40
9.8 Numbers of Documents ............................................. 41
9.9 Accounting ....................................................... 41
9.10 Severability of Provisions .................................... 41
9.11 Nonliability of Lenders ....................................... 41
9.12 CHOICE OF LAW ................................................. 41
9.13 CONSENT TO JURISDICTION ....................................... 41
9.14 WAIVER OF JURY TRIAL .......................................... 42
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ARTICLE X. THE AGENT ....................................................... 42
10.1 Appointment ..................................................... 42
10.2 Powers .......................................................... 42
10.3 General Immunity ................................................ 42
10.4 No Responsibility for Loans, Recitals, etc. ..................... 42
10.5 Action on Instructions of Lenders ............................... 43
10.6 Employment of Agents and Counsel ................................ 43
10.7 Reliance on Documents; Counsel 43
10.8 Agent's Reimbursement and Indemnification ....................... 43
10.9 Rights as a Lender .............................................. 44
10.10 Lender Credit Decision .......................................... 44
10.11 Successor Agent ................................................. 44
10.12 Commitment as a Lender .......................................... 44
ARTICLE XI. SETOFF; RATABLE PAYMENTS ....................................... 45
11.1 Setoff .......................................................... 45
11.2 Ratable Payments ................................................ 45
ARTICLE XII. BENEFIT OF AGREEMENT; ASSIGNMENTS; PARTICIPATIONS ............. 45
12.1 Successors and Assigns .......................................... 45
12.2 Participations .................................................. 46
12.3 Assignments ..................................................... 47
12.4 Dissemination of Information .................................... 48
12.5 Tax Treatment ................................................... 48
ARTICLE XIII. NOTICES ...................................................... 48
13.1 Giving Notice ................................................... 48
13.2 Change of Address ............................................... 48
ARTICLE XIV. COUNTERPARTS .................................................. 48
ARTICLE XV. NO OFFICER, ETC. LIABILITY ..................................... 49
EXHIBITS
Exhibit A-1: Pricing Grid
Exhibit A-2: Unused Fees
Exhibit B: Form of Note
Exhibit C: Form of Opinion
Exhibit D: Compliance Certificate
Exhibit E: Assignment Agreement
Exhibit F: Loan/Credit Related Money Transfer Instruction
Exhibit G: Amendment Regarding Increase
Exhibit H: Environmental Investigation Specifications and Procedures
Exhibit I: Subsidiary Guaranty
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