EXHIBIT 1.5
TERM LOAN AGREEMENT
AMONG
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP,
AS BORROWER,
MANUFACTURED HOME COMMUNITIES, INC.,
A MARYLAND CORPORATION,
AS A GUARANTOR,
MHC TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR,
MHC T1000 TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR,
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO, AS LENDERS
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.13, AS LENDERS,
WELLS FARGO BANK, N.A.
AS ADMINISTRATIVE AGENT AND A JOINT LEAD ARRANGER,
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT,
BANC OF AMERICA SECURITIES LLC,
AS A JOINT LEAD ARRANGER,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
DATED AS OF NOVEMBER 10, 2004
TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS........................................................................................... 1
1.01 Certain Defined Terms................................................................................... 1
1.02 Computation of Time Periods............................................................................. 24
1.03 Terms................................................................................................... 24
ARTICLE II. LOAN................................................................................................. 24
2.01 Loan and Repayment...................................................................................... 24
2.02 Borrowing and Interest Rate Election Authorization...................................................... 26
2.03 Interest on the Loan.................................................................................... 26
2.04 Fees.................................................................................................... 31
2.05 Payments................................................................................................ 31
2.06 Increased Capital....................................................................................... 32
2.07 Notice of Increased Costs............................................................................... 32
2.08 Option to Replace Lenders............................................................................... 33
2.09 Funds Transfer Disbursements............................................................................ 33
2.10 Intentionally Deleted................................................................................... 34
ARTICLE III. EXTENSION OPTIONS................................................................................... 34
3.01 First Extension Option.................................................................................. 34
3.02 Second Extension Option................................................................................. 35
ARTICLE IV. CONDITIONS TO LOAN................................................................................... 36
4.01 Intentionally Omitted................................................................................... 36
4.02 Conditions to Disbursement of the Loan.................................................................. 36
ARTICLE V. REPRESENTATIONS AND WARRANTIES........................................................................ 38
5.01 Representations and Warranties as to Borrower........................................................... 38
5.02 Representations and Warranties as to the REIT........................................................... 43
5.03 Representations and Warranties as to MHC Trust.......................................................... 47
5.04 Representations and Warranties as to MHC TT............................................................. 48
ARTICLE VI. REPORTING COVENANTS.................................................................................. 50
6.01 Financial Statements and Other Financial and Operating Information...................................... 50
6.02 Press Releases; SEC Filings and Financial Statements.................................................... 52
6.03 Environmental Notices................................................................................... 52
6.04 Qualifying Unencumbered Properties...................................................................... 53
ARTICLE VII. AFFIRMATIVE COVENANTS............................................................................... 53
7.01 With respect to Borrower:............................................................................... 53
7.02 With respect to the REIT:............................................................................... 56
7.03 With respect to MHC Trust:.............................................................................. 57
ARTICLE VIII. NEGATIVE COVENANTS................................................................................. 57
8.01 With respect to Borrower:............................................................................... 57
8.02 With respect to the REIT:............................................................................... 62
8.03 With respect to MHC Trust:.............................................................................. 65
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8.04 With respect to T1000 Trust:............................................................................ 66
ARTICLE IX. FINANCIAL COVENANTS.................................................................................. 66
9.01 Total Liabilities to Gross Asset Value.................................................................. 66
9.02 EBITDA to Fixed Charges Ratio........................................................................... 66
9.03 Unencumbered Net Operating Income to Unsecured Interest Expense......................................... 67
9.04 Unencumbered Pool....................................................................................... 67
9.05 Minimum Net Worth....................................................................................... 67
9.06 Permitted Holdings...................................................................................... 67
9.07 Calculation............................................................................................. 68
ARTICLE X. EVENTS OF DEFAULT; RIGHTS AND REMEDIES................................................................ 68
10.01 Events of Default....................................................................................... 68
10.02 Rights and Remedies..................................................................................... 72
10.03 Rescission.............................................................................................. 73
ARTICLE XI. AGENCY PROVISIONS.................................................................................... 73
11.01 Appointment............................................................................................. 73
11.02 Nature of Duties........................................................................................ 74
11.03 Loan Continuation/Conversion............................................................................ 74
11.04 Distribution and Apportionment of Payments.............................................................. 75
11.05 Rights, Exculpation, Etc................................................................................ 75
11.06 Reliance................................................................................................ 76
11.07 Indemnification......................................................................................... 76
11.08 Agent Individually...................................................................................... 77
11.09 Successor Agent; Resignation of Agent; Removal of Agent................................................. 77
11.10 Consents and Approvals.................................................................................. 78
11.11 [Intentionally Omitted]................................................................................. 79
11.12 [Intentionally Omitted]................................................................................. 79
11.13 Assignments and Participations.......................................................................... 79
11.14 Ratable Sharing......................................................................................... 82
11.15 Delivery of Documents................................................................................... 82
11.16 Notice of Events of Default............................................................................. 82
11.17 Administrative Agent's Reliance......................................................................... 83
11.18 Decisions............................................................................................... 83
ARTICLE XII. MISCELLANEOUS....................................................................................... 84
12.01 Expenses................................................................................................ 84
12.02 Indemnity............................................................................................... 85
12.03 Change in Accounting Principles......................................................................... 86
12.04 Setoff.................................................................................................. 87
12.05 Amendments and Waivers.................................................................................. 87
12.06 Independence of Covenants............................................................................... 88
12.07 Notices and Delivery.................................................................................... 88
12.08 Survival of Warranties, Indemnities and Agreements...................................................... 89
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative................................................... 89
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12.10 Marshalling; Recourse to Security; Payments Set Aside................................................... 89
12.11 Severability............................................................................................ 89
12.12 Headings................................................................................................ 89
12.13 Governing Law........................................................................................... 89
12.14 Limitation of Liability................................................................................. 89
12.15 Successors and Assigns.................................................................................. 90
12.16 Usury Limitation........................................................................................ 90
12.17 Confidentiality......................................................................................... 90
12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial; Waiver Of Permissive
Counterclaims. ......................................................................................... 91
12.19 Counterparts; Effectiveness; Inconsistencies............................................................ 92
12.20 Construction............................................................................................ 92
12.21 Entire Agreement........................................................................................ 92
12.22 Agent's Action for Its Own Protection Only.............................................................. 92
12.23 Lenders' ERISA Covenant................................................................................. 93
12.24 Joint Lead Arrangers, Documentation Agent and Syndication Agent......................................... 93
12.25 USA Patriot Act Notice; Compliance...................................................................... 93
12.26 Tax Shelter Regulations................................................................................. 93
EXHIBITS
A - Assignment and Assumption
B - REIT Guaranty
C - Form of Transferer Authorizer Designation
D - Loan Notes
E - [Intentionally Deleted]
F - Qualifying Unencumbered Properties
G - [Intentionally Deleted]
H - [Intentionally Deleted]
I - Notice of Borrowing
J - Notice of Continuation/Conversion
SCHEDULES
5.01(c) - Ownership of Borrower
5.01(r) - Environmental Matters
5.01(w) - Subsidiaries and Investment Affiliates
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TERM LOAN AGREEMENT
THIS TERM LOAN AGREEMENT is dated as of November 10, 2004 (as
amended, supplemented or modified from time to time, the "Agreement") and is
among MHC Operating Limited Partnership, an Illinois limited partnership
("Borrower"), Manufactured Home Communities, Inc., a Maryland corporation (the
"REIT"), MHC Trust, a Maryland real estate investment trust ("MHC Trust"), MHC
T1000 Trust, a Maryland real estate investment trust, each of the Lenders, as
hereinafter defined, Wells Fargo Bank, N.A ("Wells Fargo") in its capacity as
Agent, as a Joint Lead Arranger and as a Lender, Bank of America, N.A., as
Syndication Agent and as a Lender, and LaSalle Bank National Association, as
Documentation Agent and as a Lender.
RECITALS
A Borrower desires to borrow, and Lenders desire to lend, One
Hundred Twenty Million Dollars ($120,000,000) in accordance with the terms and
conditions hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the
receipt and adequacy of which are hereby acknowledged, the parties hereto agree
as follows:
AGREEMENT
ARTICLE I.
DEFINITIONS
1.01 Certain Defined Terms.
The following terms used in this Agreement shall have the
following meanings (such meanings to be applicable, except to the extent
otherwise indicated in a definition of a particular term, both to the singular
and the plural forms of the terms defined):
"Accommodation Obligations" as applied to any Person, means
any obligation, contingent or otherwise, of that Person in respect of which that
Person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received and (ii) any obligation of such Person arising through such
Person's status as a general partner of a general or limited partnership with
respect to any Indebtedness, obligation or liability of such general or limited
partnership.
"Accountants" means any nationally recognized independent
accounting firm.
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"Adjusted Asset Value" means, as of any date of determination,
(i) for any Property for which the number of Owned Fiscal Quarters is less than
four (4), the Net Price of the Property paid by Borrower or such Subsidiary for
such Property and (ii) for any Property for which the number of Owned Fiscal
Quarters is at least four (4), the quotient of EBITDA attributable to such
Property in a manner reasonably acceptable to Agent for the then most recently
ended twelve (12) calendar month period divided by seven hundred fifty
ten-thousandths (0.0750). Notwithstanding the immediately preceding sentence,
for the Thousand Trails Properties, (A) at the end of the Fiscal Quarter ended
December 31, 2004, the Adjusted Asset Value means EBITDA attributable to the
Thousand Trails Properties in a manner reasonably acceptable to Agent
(determined as if the Thousand Trails Transaction had been consummated on
October 1, 2004) for such Fiscal Quarter multiplied by four (4) and divided by
seven hundred fifty ten-thousandths (0.0750), (B) at the end of the Fiscal
Quarter ended March 31, 2005, the Adjusted Asset Value means EBITDA attributable
to the Thousand Trails Properties in a manner reasonably acceptable to Agent
(determined as if the Thousand Trails Transaction had been consummated on
October 1, 2004) for the period from October 1, 2004 to March 31, 2005
multiplied by two (2) and divided by seven hundred fifty ten-thousandths
(0.0750), (C) at the end of the Fiscal Quarter ended June 30, 2005, the Adjusted
Asset Value means EBITDA attributable to the Thousand Trails Properties in a
manner reasonably acceptable to Agent (determined as if the Thousand Trails
Transaction had been consummated on October 1, 2004) for the period from October
1, 2004 to June 30, 2005 multiplied by one and one-third (1.33) and divided by
seven hundred fifty ten-thousandths (0.0750), (D) at the end of the Fiscal
Quarter ended September 30, 2005, the Adjusted Asset Value means EBITDA
attributable to the Thousand Trails Properties in a manner reasonably acceptable
to Agent (determined as if the Thousand Trails Transaction had been consummated
on October 1, 2004) for the period from October 1, 2004 to September 30, 2005
divided by seven hundred fifty ten-thousandths (0.0750).
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty-five percent (25%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, (b) the ownership of a general partnership interest in such Person
or (c) the ownership of twenty-five percent (25%) or more of the limited
partnership interests (or other ownership interests with similarly limited
voting rights) in such Person; provided, however, that in no event shall the
Affiliates of Borrower or any Subsidiary or any Investment Affiliate include
Persons holding direct or indirect ownership interests in the REIT, MHC Trust or
any other real estate investment trust which holds a general partnership
interest in Borrower if such Person does not otherwise constitute an "Affiliate"
hereunder; provided, further, that the REIT, MHC Trust, T1000 Trust and Borrower
shall at all times be deemed Affiliates of each other.
"Agent" means Wells Fargo in its capacity as administrative
agent for the Lenders under this Agreement, and shall
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include any successor Agent appointed pursuant hereto and shall be deemed to
refer to Wells Fargo in its individual capacity as a Lender where the context so
requires.
"Agreement" has the meaning ascribed to such term in the
preamble hereto.
"Agreement Party" means any Person, other than the REIT and
Borrower, which concurrently with the execution of this Agreement or hereafter
executes and delivers a guaranty, or a joinder to a guaranty, in connection with
this Agreement, which as of the date of determination, is in force and effect.
"Applicable Margin" means, for any day, the rate per annum set
forth below, opposite the applicable Level Period then in effect, for either
LIBOR Loans or Base Rate Loans, as applicable:
Applicable Margin Applicable Margin
Level Period for LIBOR Loans for Base Rate Loans
- ------------ --------------- -------------------
Level I Period 1.10% 0.10%
Level II Period 1.20% 0.20%
Level III Period 1.35% 0.35%
Level IV Period 1.55% 0.55%
Level V Period 1.75% 0.75%
The Applicable Margin shall be adjusted for all purposes quarterly as soon as
reasonably practicable, but not later than five (5) days, after the date of
receipt by Agent of the quarterly financial information in accordance with the
provisions of Section 6.01(a), together with a calculation by Borrower of the
ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries as of the end of the applicable Fiscal Quarter. No
adjustment in the Applicable Margin shall be made retroactively.
"Assignment and Assumption" means an Assignment and Assumption
in the form of Exhibit A hereto (with blanks appropriately filled in) delivered
to Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 11.13.
"Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such loan or (ii) in an amount which exceeds
twenty-five percent (25%) of the original principal amount of such loan;
provided, however, that the final payment of a fully amortizing loan shall not
constitute a Balloon Payment.
"Base Rate" means, on any day, a fluctuating interest rate per
annum as shall be in effect from time to time, which rate shall at all times be
equal to the higher of (a) the base rate of interest per annum established from
time to time by Wells Fargo, and designated as its prime rate and in effect on
such day, and (b) the Federal Funds Rate as announced by the Federal
3
Reserve Bank of New York, in effect on such day plus one half percent (0.5%) per
annum. Each change in the Base Rate shall become effective automatically as of
the opening of business on the date of such change in the Base Rate, without
prior written notice to Borrower or Lenders. The Base Rate may not be the lowest
rate of interest charged by any bank, Agent or Lender on similar loans.
"Base Rate Loans" means that portion of the Loan bearing
interest at a rate of interest determined by reference to the Base Rate.
"Base Rent" means the aggregate rent received, on a
consolidated basis, by Borrower or any Subsidiary from tenants which lease sites
at Designated Use Properties owned by Borrower or any Subsidiary minus any
amounts specifically identified as and representing payments for trash removal,
cable television, water, electricity, other utilities, taxes and other rent
which reimburses expenses related to the tenant's occupancy; provided, however,
that Base Rent shall not include rent received by any Subsidiary as lessor under
the Thousand Trails Lease.
"Benefit Plan" means any employee pension benefit plan as
defined in Section 3(2) of ERISA (other than a Multiemployer Plan) which a
Person or any ERISA Affiliate maintains, administers, contributes to or is
required to contribute to, or, within the immediately preceding five (5) years,
maintained, administered, contributed to or was required to contribute to, or
under which a Person or any ERISA Affiliate may have any liability.
"Borrower" has the meaning ascribed to such term in the
preamble hereto.
"Borrower Plan" shall mean any Plan (A) which Borrower, any of
its Subsidiaries or any of its ERISA Affiliates maintains, administers,
contributes to or is required to contribute to, or, within the five years prior
to the Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).
"Borrower's Adjusted Share" means Borrower's, MHC Trust's
and/or the REIT's collective direct or indirect share of the assets,
liabilities, income, expenses or expenditures, as applicable, of an Investment
Affiliate based upon the greater of (i) Borrower's, MHC Trust's and/or the
REIT's percentage ownership (whether direct or indirect) of such Investment
Affiliate, as provided in the charter and by-laws, partnership agreements or
other organizational or governing documents of such Investment Affiliate and
(ii) Borrower's and/or the REIT's percentage ownership (whether direct or
indirect) of such Investment Affiliate, based upon its effective economic
ownership of such Investment Affiliate. For purposes of determining Borrower's
Adjusted Share, at any time that MHC Trust owns any general partnership interest
in Borrower in accordance with the terms and conditions of this Agreement, the
REIT shall be deemed to own one hundred percent (100%) of all ownership
interests in MHC Trust.
"Borrower's Share" means Borrower's, MHC Trust's and/or the
REIT's collective direct or indirect share of the assets, liabilities, income,
expenses or expenditures, as applicable, of an Investment Affiliate based upon
Borrower's, MHC Trust's and/or the REIT's
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percentage ownership (whether direct or indirect) of such Investment Affiliate,
as the case may be. For purposes of determining Borrower's Share, at any time
that MHC Trust owns any general partnership interest in Borrower in accordance
with the terms and conditions of this Agreement, the REIT shall be deemed to own
one hundred percent (100%) of all ownership interests in MHC Trust.
"Business Day" means (a) with respect to any payment or rate
determination of LIBOR Loans, a day, other than a Saturday or Sunday, on which
Agent is open for business in Chicago and San Francisco and on which dealings in
Dollars are carried on in the London inter bank market, and (b) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the States of California and Illinois, or is a day on which
banking institutions located in California and Illinois are required or
authorized by law or other governmental action to close.
"Capital Expenditures" means, as applied to any Person for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a Person) by such Person during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed asset accounts
reflected in the balance sheet of such Person, excluding any expenditures
reasonably determined by such Person as having been incurred for expansion of
the number of sites at a Designated Use Property owned by such Person.
"Capital Leases," as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (b) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Agent; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Agent; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than 1 year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from two nationally recognized rating services reasonably acceptable
to Agent; (e) commercial paper (foreign and domestic) or master notes, other
than commercial paper or master notes issued by Borrower or any of its
Affiliates, and, at the time of acquisition, having a long-term rating of at
least A or the equivalent from a nationally recognized rating service reasonably
acceptable to Agent and having a short-term rating of at least A-1 and P-1 from
S&P and Moody's,
5
respectively (or, if at any time neither S&P nor Moody's shall be rating such
obligations, then the highest rating from such other nationally recognized
rating services reasonably acceptable to Agent); (f) domestic and Eurodollar
certificates of deposit or domestic time deposits or Eurotime deposits or
bankers' acceptances (foreign or domestic) that are issued by a bank (I) which
has, at the time of acquisition, a long-term rating of at least A or the
equivalent from a nationally recognized rating service reasonably acceptable to
Agent and (II) if a domestic bank, which is a member of the FDIC; and (g)
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments,
provided that the collateral supporting such repurchase agreements shall have a
value not less than 101% of the principal amount of the repurchase agreement
plus accrued interest.
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.19, which date shall be November
10, 2004 or such later date as to which Agent and Borrower agree in writing.
"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, the principal
amount set out under such Lender's name under the heading "Commitment" on the
counterpart signature pages attached to this Agreement or as set forth on an
Assignment and Assumption executed by such Lender, as assignee, as such amount
may be adjusted pursuant to the terms of this Agreement.
"Contaminant" means any pollutant (as that term is defined in
42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.
"Continuation/Conversion Date" means, with respect to the
continuation of a LIBOR Loan or the conversion of a Base Rate Loan into a LIBOR
Loan, and vice versa, the date of such continuation or conversion.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including without limitation any
restrictive covenant affecting such Person or any of its properties).
"Controlled Ownership Interests" means ownership interests in
a Person where the REIT, MHC Trust or Borrower (independently or collectively)
has control over the management and operations of such Person.
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"Convertible Securities" means evidences of indebtedness,
shares of stock, limited or general partnership interests or other ownership
interests, warrants, options, or other rights or securities which are
convertible into or exchangeable for, with or without payment of additional
consideration, shares of common stock of the REIT, MHC Trust or partnership
interests of Borrower, as the case may be, either immediately or upon the
arrival of a specified date or the happening of a specified event.
"Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon the
Person in question.
"Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (exclusive of Balloon
Payments) for such period on all Indebtedness of the REIT, on a consolidated
basis.
"Designated Use Property" means a property owned and operated
primarily (i) for the purpose of leasing sites to individuals on which such
individuals place manufactured homes or recreational vehicles for the purpose of
occupying such manufactured homes or recreational vehicles, (ii) as a daily stay
campground, membership interest campground or park model community, or (iii) for
the purpose of renting cabins on such property to individuals.
"Designated Use Property Mortgages" means Investment Mortgages
issued by any Person engaged primarily in the business of developing, owning,
and managing Designated Use Properties.
"Designated Use Property Ownership Interests" means
partnership, joint venture, membership or other equity interests issued by any
Person engaged primarily in the business of developing, owning, and managing
Designated Use Properties.
"Development Activity" means construction in process, that is
being performed by or at the direction of Borrower, any Subsidiary or any
Investment Affiliate, at any Designated Use Property that will be owned and
operated by Borrower, any Subsidiary or any Investment Affiliate upon completion
of construction, including construction in process at Designated Use Properties
not owned by Borrower, any Subsidiary or any Investment Affiliate but which
Borrower, any Subsidiary or any Investment Affiliate has the contractual
obligation to purchase. "Development Activity" shall include construction in
process for the purpose of expanding Designated Use Properties that are Thousand
Trails Properties but shall not include construction in process for the purpose
of expanding other Designated Use Properties owned by Borrower, any Subsidiary
or any Investment Affiliate.
"Documentation Agent" means LaSalle Bank National Association
in its capacity as documentation agent for the Lenders under this Agreement.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States
of America.
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"EBITDA" means, for any period and without duplication (i) Net
Income for such period, plus (ii) depreciation and amortization expense and
other non-cash items deducted in the calculation of Net Income for such period,
plus (iii) Interest Expense deducted in the calculation of Net Income for such
period, plus, (iv) Taxes deducted in the calculation of Net Income for such
period, minus (v) the gains (and plus the losses) from extraordinary or unusual
items or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vi) earnings of Subsidiaries
for such period distributed to third parties, plus (or minus in the case of a
loss) (vii) Borrower's Share of the net income (or loss) of each Investment
Affiliate for such period calculated in conformity with GAAP before
depreciation, minus (or plus in the case of a loss) (viii) Borrower's Share of
the gains (or losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of the net
income of each Investment Affiliate for such period.
"Eligible Assignee" means any Person that is: (a) an existing
Lender; (b) a commercial bank, trust company, savings and loan association,
savings bank, insurance company, investment bank or pension fund organized under
the laws of the United States of America, any state thereof or the District of
Columbia, and having total assets in excess of $5,000,000,000; or (c) a
commercial bank organized under the laws of any other country which is a member
of the Organization for Economic Co-operation and Development, or a political
subdivision of any such country, and having total assets in excess of
$10,000,000,000, provided that such bank is acting through a branch or agency
located in the United States of America. If such entity is not currently a
Lender, such entity's (or in the case of a bank which is a subsidiary, such
bank's parent's) senior unsecured long term indebtedness must be rated BBB or
higher by S&P, Baa2 or higher by Moody's or the equivalent or higher of either
such rating by another rating agency acceptable to the Agent.
"Environmental Laws" means all federal, state, district, local
and foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state Environmental Laws or
regulations, or (b) damages arising
8
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is, becomes,
or is deemed by any Governmental Authority to be a member of the same controlled
group of corporations (within the meaning of Section 414(b) of the Internal
Revenue Code) as a Person or is so deemed by such Person, (b) partnership, trade
or business (whether or not incorporated) which is, becomes or is deemed by any
Governmental Authority to be under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with such Person or is so deemed by such
Person, (c) any Person which is, becomes or is deemed by any Governmental
Authority to be a member of the same "affiliated service group" (as defined in
Section 414(m) of the Internal Revenue Code) as such Person or is so deemed by
such Person, or (d) any other organization or arrangement described in Section
414(o) of the Internal Revenue Code which is, becomes or is deemed by such
Person or by any Governmental Authority to be required to be aggregated pursuant
to regulations issued under Section 414(o) of the Internal Revenue Code with
such Person pursuant to Section 414(o) of the Internal Revenue Code or is so
deemed by such Person.
"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly provided
therein.
"Facility" means the loan facility of One Hundred Twenty
Million Dollars ($120,000,000) described in Section 2.01(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate, rounded upwards to the nearest one hundredth of one percent
(0.01%), per annum equal for each day during such period to the weighted average
of the rates on overnight Federal Funds transactions with members of the Federal
Reserve System arranged by Federal Funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of New York, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal Funds brokers of recognized
standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
"Financial Statements" has the meaning ascribed to such term
in Section 6.01(a).
"FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
"First Extended Maturity Date" has the meaning set forth in
Section 3.01.
9
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower, MHC Trust and
the REIT which shall be the twelve (12) month period ending on the last day of
December in each year.
"Fixed Charges" means, for any period, the sum of (i) Debt
Service for such period other than payments of principal of the Loan, as
required by Section 2.03(c), made during such period, (ii) 3% of Base Rent for
such period, and (iii) Borrower's Share of Capital Expenditures from each
Investment Affiliate for such period.
"Funds from Operations" means the definition of "Funds from
Operations" of the National Association of Real Estate Investment Trusts on the
date of determination (before allocation to minority interests).
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination and which are consistent with the past practices of
the REIT, MHC Trust and Borrower.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Gross Asset Value" means with respect to any Person as of any
date of determination, (i) the sum of the Adjusted Asset Values for each
Property then owned by such Person plus (ii) the value of any cash or Cash
Equivalent then owned by such Person and not subject to any Lien plus (iii)
Manufactured Home Inventory Value with respect to such Person, at such time.
"Indebtedness," as applied to any Person (and without
duplication), means (a) all indebtedness, obligations or other liabilities
(whether secured, unsecured, recourse, non-recourse, direct, senior or
subordinate) of such Person for borrowed money, (b) all indebtedness,
obligations or other liabilities of such Person evidenced by Securities or other
similar instruments, (c) all reimbursement obligations and other liabilities of
such Person with respect to letters of credit or banker's acceptances issued for
such Person's account or other similar instruments for which a contingent
liability exists, (d) all obligations of such Person to pay the deferred
purchase price of Property or services, (e) all obligations in respect of
Capital Leases of such Person, (f) all Accommodation Obligations of such Person,
(g) all indebtedness, obligations or other liabilities of such Person or others
secured by a Lien on any asset of such Person, whether or not such indebtedness,
obligations or liabilities are assumed by, or are a personal liability of, such
Person, (h) all indebtedness, obligations or other liabilities (other than
interest expense liability) in respect of Interest Rate Contracts and foreign
currency exchange agreements excluding all indebtedness, obligations or other
liabilities in respect of such Interest Rate Contracts to the extent that the
aggregate notional amount thereof does not exceed the aggregate
10
principal amount of any outstanding fixed or floating rate Indebtedness,
obligations or other liabilities permitted under this Agreement that exist as of
the date that such Interest Rate Contracts are entered into or that are incurred
no more than thirty (30) days after such Interest Rate Contracts are entered
into and (i) ERISA obligations currently due and payable.
"Initial Maturity Date" means November 10, 2007.
"Interest Expense" means, for any period and without
duplication, total interest expense, whether paid, accrued or capitalized
(including letter of credit fees and the interest component of Capital Leases
but excluding interest expense covered by an interest reserve established under
a loan facility) of the REIT, on a consolidated basis and determined in
accordance with GAAP.
"Interest Period" means, relative to any LIBOR Loans, the
period beginning on (and including) the date on which such LIBOR Loan is made
as, or converted into, a LIBOR Loan, and shall end on (but exclude) the day
which numerically corresponds to such date one (1), two (2), three (3), six (6)
or twelve (12) months thereafter (or, if such month has no numerically
corresponding day, on the last Business Day of such month), in either case as
Borrower may select in its relevant Notice of Borrowing or Notice of
Continuation/Conversion pursuant to Section 2.01(b); provided, however, that:
(a) if such Interest Period would otherwise end on a day which
is not a Business Day, such Interest Period shall end on the next
following Business Day (unless such next following Business Day is the
first Business Day of a calendar month, in which case such Interest
Period shall end on the Business Day next preceding such numerically
corresponding day);
(b) no Interest Period may end later than the Termination
Date; and
(c) with the reasonable approval of Agent (unless any Lender
has previously advised Agent and Borrower that it is unable to enter
into LIBOR contracts for an Interest Period of such duration), an
Interest Period may have a duration of less than one (1) month.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time, and any successor statute.
"Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not arise
from sales of goods or services to that Person in the ordinary
11
course of business. The amount of any Investment shall be determined in
conformity with GAAP except as otherwise specifically provided herein.
"Investment Affiliate" means any Person in whom the REIT, MHC
Trust, Borrower or any Subsidiary holds an equity interest, directly or
indirectly, whose financial results are not consolidated under GAAP with the
financial results of the REIT, MHC Trust or Borrower on the consolidated
financial statements of the REIT, MHC Trust and Borrower.
"Investment Mortgages" means mortgages securing indebtedness
directly or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Joint Lead Arrangers" means Wells Fargo Bank, N.A. and Banc
of America Securities LLC in their respective capacities as joint lead arrangers
for the Lenders under this Agreement.
"Lender Affiliate" as applied to any Lender, means any other
Person directly or indirectly controlling, controlled by, or under common
control with, that Lender. For purposes of this definition, "control" (including
with correlative meanings, the terms "controlling," "controlled by" and "under
common control with"), as applied to any Person, means (a) the possession,
directly or indirectly, of the power to vote more than fifty percent (50%) of
the Securities having voting power for the election of directors of such Person
or otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (b) the ownership of a general partnership interest or a
limited partnership interest representing more than fifty (50%) of the
outstanding limited partnership interests of a Person.
"Lender Reply Period" has the meaning ascribed to such term in
Section 11.10(a).
"Lenders" means Wells Fargo and any other bank, finance
company, insurance or other financial institution which is or becomes a party to
this Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption, as assignee.
"Level I Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall be less than 0.40:1.
"Level II Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.40:1 but shall be less than 0.50:1.
"Level III Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.50:1 but shall be less than 0.55:1.
12
"Level IV Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.55:1 but shall be less than 0.60:1.
"Level V Period" means a period during which the ratio of
Total Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.60:1.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including punitive
and treble damages), costs, disbursements and expenses (including without
limitation reasonable attorneys', experts' and consulting fees and costs of
investigation and feasibility studies), fines, penalties and monetary sanctions,
interest, direct or indirect, known or unknown, absolute or contingent, past,
present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR
Loan, the rate of interest obtained by dividing (i) the rate of interest
determined by Agent (whose determination shall be conclusive absent manifest
error, which shall not include any lower determination by any other banks) equal
to the rate (rounded upwards, if necessary, to the nearest one one-hundredth of
one percent (.01%)) per annum reported by Wells Fargo at which Dollar deposits
in immediately available funds are offered by Wells Fargo to leading banks in
the Eurodollar inter bank market at or about 11:00 A.M. London time two (2)
Business Days prior to the beginning of such Interest Period for delivery on the
first day of such Interest Period for a period approximately equal to such
Interest Period and in an amount equal or comparable to the LIBOR Loan to which
such Interest Period relates, by (ii) a percentage expressed as a decimal equal
to one (1) minus the LIBOR Reserve Percentage.
"LIBOR Loans" means those portions of the Loan bearing
interest, at all times during an Interest Period applicable to such portions, at
a fixed rate of interest determined by reference to LIBOR.
"LIBOR Reserve Percentage" means, relative to any Interest
Period, the average daily maximum reserve requirement (including, without
limitation, all basic, emergency, supplemental, marginal and other reserves)
which is imposed under Regulation D, as Regulation D may be amended, modified or
supplemented, on "Eurocurrency liabilities" having a term equal to the
applicable Interest Period (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBOR Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents), which requirement shall be expressed as a decimal. LIBOR shall be
adjusted automatically on, and as of the effective date of, any change in the
LIBOR Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights-of-way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other security
agreement or preferential arrangement of any kind or nature whatsoever,
including without limitation any conditional sale or other title retention
agreement, the interest of a lessor under a Capital Lease, any financing lease
having substantially the same economic effect as any
13
of the foregoing, and the filing of any financing statement (other than a
financing statement filed by a "true" lessor pursuant to Section 9-408 of the
Uniform Commercial Code) naming the owner of the asset to which such Lien
relates as debtor, under the Uniform Commercial Code or other comparable law of
any jurisdiction.
"Loan" means the One Hundred Twenty Million Dollar
($120,000,000) loan made pursuant this Agreement.
"Loan Documents" means, this Agreement, the Loan Notes, the
REIT Guaranty, and all other agreements, instruments and documents (together
with amendments and supplements thereto and replacements thereof) now or
hereafter executed by the REIT, Borrower or any Agreement Party, which evidence,
guaranty or secure the Obligations.
"Loan Notes" means the promissory notes evidencing the Loan in
the aggregate original principal amount of One Hundred Twenty Million Dollars
($120,000,000) executed by Borrower in favor of Lenders, as they may be amended,
supplemented, replaced or modified from time to time. Copies of the Loan Notes
are attached hereto as Exhibit D.
"Manufactured Home Inventory Value" means with respect to
Borrower and its Subsidiaries, as of any date of determination, the lesser of
(i) the total cost to Borrower or its Subsidiaries, as applicable, of all
manufactured home units, which have never been occupied (other than for short
periods in the ordinary course of Borrower's and its Subsidiaries' customary
sales practices), then owned by Borrower or any Subsidiary that were acquired
new from the manufacturers of such units, or from Persons who acquired such
units new from such manufacturers, within the one (1) year period immediately
preceding the date of determination and (ii) Thirty-Five Million Dollars
($35,000,000).
"Material Adverse Effect" means a material adverse effect upon
(i) the ability of Borrower or the REIT, MHC Trust or T1000 Trust to perform its
covenants and obligations under this Agreement and the other Loan Documents or
(ii) the ability of Agent or Lenders to enforce the Loan Documents. The phrase
"has a Material Adverse Effect" or "will result in a Material Adverse Effect" or
words substantially similar thereto shall in all cases be intended to mean "has
or will result in a Material Adverse Effect," and the phrase "has no (or does
not have a) Material Adverse Effect" or "will not result in a Material Adverse
Effect" or words substantially similar thereto shall in all cases be intended to
mean "does not or will not result in a Material Adverse Effect."
"Maturity Date" means the Initial Maturity Date, as such date
may be extended pursuant to Article III.
"Minimum Net Worth" means Seven Hundred Million Dollars
($700,000,000).
"Moody's" means Moody's Investors Service, a Delaware
corporation, and its successors and assigns, and, if such corporation shall be
dissolved or liquidated or shall no longer perform the functions of a securities
rating agency, "Moody's" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.
14
"Multiemployer Plan" means an employee benefit plan defined in
Section 4001(a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.
"Net Income" means, for any period, the net income (or loss)
after Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP; provided, however, that Net Income shall not include the
net income (or loss) of Investment Affiliates.
"Net Operating Income" means, for any period, and with respect
to any Qualifying Unencumbered Property, the net operating income of such
Qualifying Unencumbered Property (attributed to such Property in a manner
reasonably acceptable to Agent) for such period (i) determined in accordance
with GAAP, (ii) determined in a manner which is consistent with the past
practices of the REIT, MHC Trust and Borrower, and (iii) inclusive of an
allocation of reasonable management fees and administrative costs to such
Qualifying Unencumbered Property consistent with the past practices of the REIT,
MHC Trust and Borrower, except that, for purposes of determining Net Operating
Income, income shall not (a) include security or other deposits, lease
termination or other similar charges, delinquent rent recoveries, unless
previously reflected in reserves, or any other items reasonably deemed by Agent
to be of a non-recurring nature or (b) be reduced by depreciation or
amortization or any other non-cash item.
"Net Price" means, with respect to the purchase of any
Property by Borrower or any Subsidiary, without duplication, (i) cash and Cash
Equivalents paid as consideration for such purchase, plus (ii) the principal
amount of any note or other deferred payment obligation delivered in connection
with such purchase (except as described in clause (iv) below), plus (iii) the
value of any other consideration delivered in connection with such purchase or
sale (including, without limitation, shares in the REIT and operating
partnership units or preferred operating partnership units in Borrower) (as
reasonably determined by Agent), minus (iv) the value of any consideration
deposited into escrow or subject to disbursement or claim upon the occurrence of
any event, minus (v) reasonable costs of sale and taxes paid or payable in
connection with such purchase.
"Net Worth" means, at any time, the sum of Gross Asset Values
for Borrower and each of its Subsidiaries at such time minus Total Liabilities
at such time.
"New Lender" shall have the meaning set forth in Section
11.13(k).
"Non-Designated Use Property" means Property which is not (i)
used for lease or operation of Designated Use Properties, (ii) Securities
consisting of stock issued by real estate investment trusts engaged primarily in
the development, ownership and management of Designated Use Properties, (iii)
Designated Use Property Mortgages or (iv) Designated Use Property Ownership
Interests.
"Non-Recourse Indebtedness" means any single loan with respect
to which recourse for payment is limited to specific assets related to a
particular Property or group of Properties encumbered by a Lien securing such
Indebtedness, so long as the Adjusted Asset
15
Value for such Property, or the total of the Adjusted Asset Values for such
group of Properties, does not exceed One Hundred Million Dollars ($100,000,000);
provided, however, that personal recourse to the REIT, MHC Trust, Borrower or
any Subsidiary by a holder of any such loan for fraud, misrepresentation,
misapplication of cash, waste, environmental claims and liabilities and other
circumstances customarily excluded by institutional lenders from exculpation
provisions and/or included in separate indemnification agreements in
non-recourse financing of real estate shall not, by itself, prevent such loan
from being characterized as Non-Recourse Indebtedness.
"Notice of Borrowing" means a notice of borrowing duly
executed by an authorized officer of the sole general partner of Borrower
substantially in the form of Exhibit I.
"Notice of Continuation/Conversion" means a notice of
continuation or conversion of or to a LIBOR Loan duly executed by an authorized
officer of the sole general partner of Borrower substantially in the form of
Exhibit J.
"Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, any Lender, or any Person entitled to indemnification
pursuant to Section 12.02, or any of their respective successors, transferees or
assigns, of every type and description, whether or not evidenced by any note,
guaranty or other instrument, arising under or in connection with this Agreement
or any other Loan Document, whether or not for the payment of money, whether
direct or indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising and however
acquired. The term includes, without limitation, all interest, charges,
expenses, fees, reasonable attorneys' fees and disbursements and any other sum
now or hereafter chargeable to Borrower under or in connection with this
Agreement or any other Loan Document. Notwithstanding anything to the contrary
contained in this definition, Obligations shall not be deemed to include any
obligations or liabilities of Borrower to Agent or any Lender under an Interest
Rate Contract, foreign currency exchange agreement or other Contractual
Obligation unless the same is among Borrower and all Lenders.
"Officer's Certificate" means a certificate signed by a
specified officer of a Person certifying as to the matters set forth therein.
"Other Indebtedness" means all Indebtedness other than the
Obligations.
"Original Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Owned Fiscal Quarters" means, with respect to any Property,
the full Fiscal Quarters during which Borrower or any Subsidiary actually owned
such Property.
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Holdings" means any of the holdings and activities
described in Section 9.06, but only to the extent permitted in Section 9.06.
16
"Permitted Liens" means:
(a) Liens for Taxes, assessments or other governmental charges
not yet due and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with Sections 7.01(d) or 7.02(g);
(b) statutory liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred
in the ordinary course of business for sums not more than sixty (60)
days delinquent or which are being contested in good faith in
accordance with Sections 7.01(d) or 7.02(g);
(c) deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
(d) Liens for purchase money obligations for equipment;
provided that (i) the Indebtedness secured by any such Lien does not
exceed the purchase price of such equipment, (ii) any such Lien
encumbers only the asset so purchased and the proceeds upon sale,
disposition, loss or destruction thereof, and (iii) such Lien, after
giving effect to the Indebtedness secured thereby, does not give rise
to an Event of Default or Unmatured Event of Default pursuant to
Section 8.01(a);
(e) easements, rights-of-way, zoning restrictions, other
similar charges or encumbrances and all other items listed on Schedule
B to Borrower's or any Subsidiary's, as applicable, owner's title
insurance policies for any of Borrower's or any Subsidiary's real
Properties, so long as the foregoing do not interfere in any material
respect with the use or ordinary conduct of the business of Borrower or
such Subsidiary, as applicable, and do not diminish in any material
respect the value of the Property to which it is attached or for which
it is listed; or
(f) Liens and judgments which have been or will be bonded or
released of record within thirty (30) days after the date such Lien or
judgment is entered or filed against the REIT, Borrower, any Subsidiary
or any Agreement Party.
"Person" means any natural person, employee, corporation,
limited partnership, limited liability partnership, general partnership, joint
stock company, limited liability company, joint venture, association, company,
trust, bank, trust company, land trust, business trust, real estate investment
trust or other organization, whether or not a legal entity, or any other
nongovernmental entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) in respect of which a Person or an
ERISA Affiliate, as applicable, is an "employer" as defined in Section 3(5) of
ERISA.
"Pre-Closing Financials" has the meaning ascribed to such term
in Section 5.01(g).
17
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments, as adjusted from time to time in accordance
with the provisions of this Agreement.
"Property" means, with respect to any Person, any real or
personal property, building, facility, structure, equipment or unit, or other
asset owned by such Person.
"Qualifying Unencumbered Property" means (a) the Properties
listed on Exhibit F hereto and (b) any Property designated by Borrower from time
to time pursuant to Section 6.04 which (i) is an operating Designated Use
Property wholly-owned (directly or beneficially) by Borrower or any Subsidiary
wholly-owned, directly or indirectly by Borrower and/or the REIT, (ii) is not
subject (nor are any direct or indirect equity interests in such Property
subject) to a Lien which secures Indebtedness of any Person other than a
Permitted Lien, (iii) is not subject (nor are any direct or indirect equity
interests in such Property subject) to any covenant, condition, or other
restriction which prohibits or limits the creation or assumption of any Lien
upon such Property, and (iv) has not been designated by Agent in a notice to
Borrower as not acceptable to the Requisite Lenders pursuant to Section 6.04;
provided, however, that the weighted average occupancy rate of the Properties
listed on Exhibit F together with those Properties designated by Borrower to be
Qualifying Unencumbered Properties pursuant to Section 6.04 (excluding (x)
expansion areas of such Properties which are purchased and/or developed on or
after the Closing Date, and (y) Designated Use Properties consisting of
recreational vehicle resorts, daily stay campgrounds, membership interest
campgrounds, cabin rentals or park model communities) shall be at least
seventy-five percent (75%); and provided, further, that Borrower may, upon at
least fifteen (15) Business Days prior notice to Agent, designate that any
Property listed on Exhibit F or otherwise designated as a Qualifying
Unencumbered Property is no longer a Qualifying Unencumbered Property (and upon
such designation, such Property shall no longer be a Qualifying Unencumbered
Property). Any Property shall cease to be a "Qualifying Unencumbered Property"
at such time as it fails to satisfy all the conditions set forth in clauses (i),
(ii) and (iii) of this definition.
"Recourse Indebtedness" means, with respect to any Person,
Indebtedness which is not Non-Recourse Indebtedness.
"Regulation D" means Regulation D of the Federal Reserve Board
as in effect from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board
as in effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board
as in effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board
as in effect from time to time.
"REIT" has the meaning ascribed to such term in the preamble
hereto.
18
"REIT Guaranty" means the REIT Guaranty dated as of the date
hereof executed by the REIT, MHC Trust and T1000 Trust, jointly and severally,
in favor of Agent and the Lenders. A copy of the REIT Guaranty is attached
hereto as Exhibit B.
"Release" may be either a noun or a verb and means the
release, spill, emission, leaking, pumping, pouring, emitting, emptying,
escaping, dumping, injection, deposit, disposal, discharge, dispersal, leaching
or migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" means any action undertaken pursuant to
Environmental Laws to (a) clean up, remove, remedy, respond to, treat or in any
other way address Contaminants in the indoor or outdoor environment; (b) prevent
the Release or threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations, or any of the events described in
Section 4062(f) or 4063(a) of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building or land use requirement or
Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least sixty-six and two-thirds percent (66
2/3%); provided, however, that so long as there are at least two (2) Lenders,
the Requisite Lenders must be comprised of a minimum of two (2) Lenders; and
provided, further, that for purposes of any amendment, modification or waiver of
the requirements of Article IX, the Requisite Lenders must include Agent in its
capacity as a Lender.
"S&P" means Standard & Poor's Rating Group, a division of
McGraw Hill, its successors and assigns, and, if Standard & Poor's Rating Group
shall be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.
"Second Extended Maturity Date" has the meaning set forth in
Section 3.02.
"Secretary's Certificate" has the meaning ascribed to such
term in Section 4.01(c)(i).
19
"Secured Debt" means Indebtedness, the payment of which is
secured by a Lien on any real Property owned or leased by the REIT, Borrower, or
any Subsidiary.
"Securities" means any stock, partnership interests, shares,
shares of beneficial interest, voting trust certificates, bonds, debentures,
notes or other evidences of indebtedness, secured or unsecured, convertible,
subordinated or otherwise, or in general any instruments commonly known as
"securities," or any certificates of interest, shares, or participations in
temporary or interim certificates for the purchase or acquisition of, or any
right to subscribe to, purchase or acquire any of the foregoing, but shall not
include any evidence of the Obligations.
"Securities Act" means the Securities Act of 1933, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Solvent" means as to any Person at the time of determination,
such Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" means any Person, whose financial results are
consolidated under GAAP with the financial results of the REIT or Borrower on
the consolidated financial statements of the REIT or Borrower.
"Supermajority Lenders" means, collectively, Lenders whose Pro
Rata Shares, in the aggregate, are at least eighty-five percent (85%), provided,
however, that, so long as there are at least two (2) Lenders, the Supermajority
Lenders must be comprised of a minimum of two (2) Lenders; and provided,
further, that for purposes of any amendment, modification or waiver of the
requirements of Article IX, the Supermajority Lenders must include Agent in its
capacity as a Lender.
"Syndicated Revolving Credit Agreement" means that certain
Fifth Amended and Restated Credit Agreement (Revolving Facility), dated as of
the date hereof, by and among Borrower, the REIT, MHC Trust, Wells Fargo, as
administrative agent, and the other Lenders thereunder, as the same may be
amended, supplemented or modified from time to time.
"Syndication Agent" means Bank of America, N.A. in its
capacity as syndication agent for the Lenders under this Agreement.
"T1000 Trust" means MHC T1000 Trust, a Maryland real estate
investment trust, following the consummation of the Thousand Trails Transaction.
T1000 Trust is a guarantor under the REIT Guaranty.
20
"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
"Termination Date" has the meaning ascribed to such term in
Section 2.01(d).
"Termination Event" means (a) any Reportable Event, (b) the
withdrawal of a Person, or an ERISA Affiliate from a Benefit Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the occurrence of an obligation arising under Section 4041 of
ERISA of a Person or an ERISA Affiliate to provide affected parties with a
written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (d) the institution by the
PBGC of proceedings to terminate any Benefit Plan under Section 4042 of ERISA or
to appoint a trustee to administer any Benefit Plan, (e) any event or condition
which constitutes grounds under Section 4042 of ERISA for the appointment of a
trustee to administer a Benefit Plan, (f) the partial or complete withdrawal of
such Person or any ERISA Affiliate from a Multiemployer Plan which would have a
Material Adverse Effect, or (g) the adoption of an amendment by any Person or
any ERISA Affiliate to terminate any Benefit Plan which is subject to Title IV
of ERISA or Section 412 of the Internal Revenue Code or the treatment of an
amendment to a Benefit Plan as a termination under ERISA.
"Thousand Trails" means KTTI Holding Company, Inc., a Delaware
corporation, that, among other things, (i) owns and operates fifty-seven (57)
membership-based recreational vehicle and campground properties comprising
recreational vehicle and campground sites for which the members purchase an
initial membership and thereafter pay annual dues and (ii) owns the Thousand
Trails Land.
"Thousand Trails Land" means "Excess Land" as defined in the
Thousand Trails Lease, as in effect on the Closing Date.
"Thousand Trails Lease" means that certain Lease Agreement,
dated as of November 10, 2004, by and between MHC TT Leasing Company, Inc., a
Delaware corporation, as lessor, and Thousand Trails Operations Holding Company,
L.P., a Delaware limited partnership, as tenant, with respect to the Thousand
Trails Properties, other than the Thousand Trails Land.
"Thousand Trails Properties" shall mean the Properties owned,
directly or indirectly, by T1000 Trust as a result of the consummation of the
Thousand Trails Transaction.
"Thousand Trails Transaction" means the acquisition by T1000
Trust of Thousand Trails through the creation of a directly- or indirectly-owned
acquisition Subsidiary and the merger of such Subsidiary into Thousand Trails,
with Thousand Trails being the surviving corporation, being renamed MHC TT
Holding Company, Inc. immediately after such merger and being, directly or
indirectly, a wholly-owned Subsidiary of Borrower. The total merger
consideration to be paid by Borrower or its Subsidiaries in connection with such
transaction is One Hundred Sixty Million Dollars ($160,000,000).
21
"Total Liabilities" means, without duplication, all
Indebtedness of the REIT on a consolidated basis, plus (i) all other items
which, in accordance with GAAP, would be included as liabilities on the
liability side of the balance sheet of the REIT, on a consolidated basis, and in
any event shall include recourse and non-recourse mortgage debt, letters of
credit, purchase obligations, forward equity sales, repurchase obligations,
unsecured debt, accounts payable, lease obligations (including ground leases) to
the extent required, in accordance with GAAP, to be classified as capital leases
on the balance sheet of the REIT, guarantees of indebtedness, subordinated debt
and unfunded obligations plus (ii) Borrower's Adjusted Share of Investment
Affiliates' Indebtedness; provided, however, that "Total Liabilities" shall not
include dividends declared by the REIT, MHC Trust or Borrower which are
permitted under Section 8.01(d) but not yet paid.
"Transient RV NOI" means, with respect to any Qualifying
Unencumbered Property that is a recreational vehicle resort property other than
a Thousand Trails Property, all of such Qualifying Unencumbered Property's Net
Operating Income that is not attributable to residents/guests at such property
who are either permanent residents of such property or who reside at such
property for the entire "season" applicable to such property.
"Unencumbered Asset Value" means, as of any date of
determination, (i) the quotient of the Net Operating Income for the most
recently ended twelve (12) calendar month period which is attributable (in a
manner reasonably acceptable to Agent) to Qualifying Unencumbered Properties for
which the number of Owned Fiscal Quarters is at least four (4) divided by seven
hundred seventy-five ten-thousandths (0.0775) plus (ii) the aggregate of the Net
Prices paid by Borrower or such Subsidiary for all Qualifying Unencumbered
Properties for which the number of Owned Fiscal Quarters is less than four (4);
provided, however, that for purposes of determining the numerator of the
quotient described in clause (i) of this definition, Transient RV NOI shall be
included only to the extent it does not exceed fifteen percent (15%) of the
aggregate Net Operating Income for the applicable Qualifying Unencumbered
Properties. Notwithstanding the immediately preceding sentence, for any
Qualifying Unencumbered Properties that are Thousand Trails Properties, (A) at
the end of the Fiscal Quarter ended December 31, 2004, the Unencumbered Asset
Value means EBITDA attributable to such Qualifying Unencumbered Properties in a
manner reasonably acceptable to Agent (determined as if the Thousand Trails
Transaction had been consummated on October 1, 2004) for such Fiscal Quarter
multiplied by four (4) and divided by seven hundred seventy-five ten-thousandths
(0.0775), (B) at the end of the Fiscal Quarter ended March 31, 2005, the
Unencumbered Asset Value means EBITDA attributable to such Qualified
Unencumbered Properties in a manner reasonably acceptable to Agent (determined
as if the Thousand Trails Transaction had been consummated on October 1, 2004)
for the period from October 1, 2004 to March 31, 2005 multiplied by two (2) and
divided by seven hundred seventy-five ten-thousandths (0.0775), (C) at the end
of the Fiscal Quarter ended June 30, 2005, the Unencumbered Asset Value means
EBITDA attributable to such Qualified Unencumbered Properties in a manner
reasonably acceptable to Agent (determined as if the Thousand Trails Transaction
had been consummated on October 1, 2004) for the period from October 1, 2004 to
June 30, 2005 multiplied by one and one-third (1.33) and divided by seven
hundred seventy-five ten-thousandths (0.0775), (D) at the end of the Fiscal
Quarter ended September 30, 2005, the Unencumbered Asset Value means EBITDA
attributable to such Qualified Unencumbered Properties in a manner reasonably
22
acceptable to Agent (determined as if the Thousand Trails Transaction had been
consummated on October 1, 2004) for the period from October 1, 2004 to September
30, 2005 divided by seven hundred seventy-five ten-thousandths (0.0775).
"Unencumbered Net Operating Income" means for any Fiscal
Quarter, Net Operating Income for such period from each Qualifying Unencumbered
Property; provided, however, that for purposes of determining Unencumbered Net
Operating Income, Transient RV NOI shall be included only to the extent it does
not exceed fifteen percent (15%) of the aggregate Net Operating Income for the
applicable Qualifying Unencumbered Properties.
"Unfunded Pension Liabilities" means the excess of a Benefit
Plan's accrued benefits, as defined in Section 3(23) of ERISA, over the current
value of that Plan's assets, as defined in Section 3(26) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as
in effect on the date hereof in the State of Illinois.
"Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute (a) an Event of
Default or (b) an "Event of Default" as defined in the Syndicated Revolving
Credit Agreement or (c) an "Event of Default" as defined in the WFB Revolving
Credit Agreement.
"Unsecured Debt" means, as of any date of determination and
without duplication, all Indebtedness of the REIT, Borrower or any Subsidiary,
which is not Secured Debt but excluding (i) all accounts payable of the REIT,
Borrower or any Subsidiary incurred in the ordinary course of business, (ii) all
advance rents received and (iii) all accrued interest payable.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
"Welfare Plan" means any "employee welfare benefit plan" as
defined in Section 3(1) of ERISA, which a Person or any ERISA Affiliate
maintains, administers, contributes to or is required to contribute to, or
within the immediately preceding five years maintained, administered,
contributed to or was required to contribute to, or under which a Person or any
ERISA Affiliate may incur any liability.
"Wells Fargo" has the meaning ascribed to such term in the
preamble hereto.
"WFB Revolving Credit Agreement" means that certain First
Amended and Restated Credit Agreement, dated as of the date hereof, by and among
Borrower, the REIT, MHC Trust, T1000 Trust and Wells Fargo, as may be amended,
supplemented or modified from time to time.
"Wholly-Owned Subsidiary" means any Subsidiary which is
wholly-owned directly or indirectly by Borrower, MHC Trust or the REIT.
23
1.02 Computation of Time Periods. In this Agreement, unless
otherwise specified, in the computation of periods of time from a specified date
to a later specified date, the word "from" means "from and including" and the
words "to" and "until" each mean "to and including." Periods of days referred to
in this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.
1.03 Terms.
(a) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the REIT shall be deemed to own
one hundred percent (100%) of the partnership interests in Borrower.
(b) Any time the phrase "to the best of Borrower's knowledge"
or a phrase similar thereto is used herein, it means: "to the actual knowledge
of the executive officers of Borrower, MHC Trust, T1000 Trust and the REIT,
after reasonable inquiry of those agents, employees or contractors of the REIT,
Borrower, any Agreement Party or any Subsidiary who could reasonably be
anticipated to have knowledge with respect to the subject matter or
circumstances in question and review of those documents or instruments which
could reasonably be anticipated to be relevant to the subject matter or
circumstances in question."
(c) In each case where the consent or approval of Agent,
Requisite Lenders, Supermajority Lenders or all Lenders is required or their
non-obligatory action is requested by Borrower, such consent, approval or action
shall be in the sole and absolute discretion of Agent and, as applicable, each
Lender, unless otherwise specifically indicated.
ARTICLE II.
LOAN
2.01 Loan and Repayment.
(a) Loan.
(i) Subject to the terms and conditions set forth in this
Agreement and in reliance on the representations and warranties of
Borrower, the REIT, MHC Trust and T1000 Trust set forth in this
Agreement, each Lender hereby agrees to make its Pro Rata Share of the
Loan to Borrower on the Closing Date in an amount equal to such
Lender's Commitment. The Loan will be evidenced by the Loan Notes.
(ii) The Loan may be voluntarily prepaid pursuant to Section
2.05(a), but Borrower may not reborrow any amounts so prepaid. The
outstanding principal balance of the Loan shall be payable in full on
the Termination Date.
(b) Notice of Borrowing; Continuation/Conversion. Borrower
shall give Agent, at Wells Fargo Real Estate Group Disbursement Center, 2120
East Park Place, Suite 100, El Segundo, California 90245, with a copy to: Wells
Fargo Bank, N.A., 123 North Wacker
24
Drive, Suite 1900, Chicago, Illinois 60606, Attn: Account Officer, or such other
address as Agent shall designate, an original or facsimile Notice of Borrowing
no later than 10:00 A.M. (California time), not less than three (3) nor more
than five (5) Business Days prior to the Closing Date. The Notice of Borrowing
shall specify whether the Loan will be a Base Rate Loan or a LIBOR Loan and, if
a LIBOR Loan, the Interest Period. Any Notice of Borrowing pursuant to this
Section 2.01(b) shall be irrevocable. Borrower may elect (A) so long as no Event
of Default has occurred and is continuing, to convert Base Rate Loans or any
portion thereof into LIBOR Loans, (B) to convert LIBOR Loans or any portion
thereof into Base Rate Loans, or (C) so long as no Event of Default has occurred
and is continuing, to continue any LIBOR Loans or any portion thereof for an
additional Interest Period, provided, however, that the portion of the Loan
being continued as or converted into LIBOR Loans shall, in the aggregate, equal
One Million Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. The applicable Interest Period for the
continuation of any LIBOR Loan shall commence on the day on which the next
preceding Interest Period expires. Each such election shall be made by giving
Agent, at 2120 E. Park Place, Suite 100, El Segundo, California 90245, Attn: Ann
Blocker, a Notice of Continuation/Conversion by 10:00 A.M. (California time) on
the date of a conversion to a Base Rate Loan, or by 10:00 A.M. (California time)
not less than three (3) nor more than five (5) Business Days prior to the date
of a conversion to or continuation of a LIBOR Loan, specifying, in each case (1)
whether a conversion or continuation is to occur, (2) the amount of the
conversion or continuation, (3) the Interest Period therefor, in the case of a
conversion to or continuation of a LIBOR Loan, and (4) the date of the
conversion or continuation (which date shall be a Business Day). Agent shall
promptly notify each Lender, but in any event within one (1) Business Day after
receipt of such notice, of its receipt of each such notice and the contents
thereof. Notwithstanding anything to the contrary contained herein and subject
to the default interest provisions contained in Section 2.03, if an Event of
Default occurs, all LIBOR Loans will convert to Base Rate Loans upon the
expiration of the applicable Interest Periods therefor or the date the Loan
becomes due, whichever occurs first. Except as provided above, the conversion of
a LIBOR Loan to a Base Rate Loan shall only occur on the last Business Day of
the Interest Period relating to such LIBOR Loan. In the absence of an effective
election by Borrower of a LIBOR Loan and Interest Period in accordance with the
above procedures prior to the third (3rd) Business Day prior to the expiration
of the then current Interest Period with respect to any LIBOR Loan, interest on
such LIBOR Loan shall accrue at the interest rate then applicable to a LIBOR
Loan for an Interest Period of thirty (30) days, effective immediately upon the
expiration of the then-current Interest Period, without prejudice, however, to
the right of Borrower to elect a Base Rate Loan or a different Interest Period
in accordance with the terms and provisions of this Agreement; provided,
however, that if such continuation shall cause the number of LIBOR Loan tranches
to exceed six (6), such LIBOR Loan shall be converted to a Base Rate Loan.
(c) Making of the Loan. Subject to Section 11.03, Agent shall
make the proceeds of the Loan available to Borrower in El Segundo, California on
the Closing Date and shall disburse such funds in Dollars and in immediately
available funds not later than 1:00 P.M. Chicago time to Borrower's account, at
Bank of America, Account Number 73-66901095 in Chicago, Illinois, or such other
account specified in the Notice of Borrowing acceptable to Agent, with a
confirming telephone call to Quantaze Watts at (312) 279-1408 or Michael Berman
at (312) 279-1496.
25
(d) Term; Principal Payment. The outstanding balance of the
Loan shall be payable in full on the earlier to occur of (A) the Maturity Date,
and (B) the acceleration of the Loan pursuant to Section 10.02(a) (the
"Termination Date").
2.02 Borrowing and Interest Rate Election Authorization.
Borrower shall provide Agent with documentation reasonably satisfactory to Agent
indicating the names of those employees or agents of Borrower authorized by
Borrower to sign Notices of Borrowing and Notices of Continuation/Conversion and
to receive callback confirmations, and Agent and Lenders shall be entitled to
rely on such documentation until notified in writing by Borrower of any
change(s) of the persons so authorized. Agent shall be entitled to act in good
faith on the instructions of anyone identifying himself as one of the Persons so
authorized and Borrower shall be bound thereby in the same manner as if such
Person were actually so authorized. Borrower agrees to indemnify, defend and
hold Lenders and Agent harmless from and against any and all Liabilities and
Costs which may arise or be created by the acceptance of instructions for making
the Loan and continuing/converting interest rate elections.
2.03 Interest on the Loan.
(a) Base Rate Loans. Subject to Section 2.03(d), all Base Rate
Loans shall bear interest on the average daily unpaid principal amount thereof
from the date made until paid in full at a fluctuating rate per annum equal to
the Base Rate plus the Applicable Margin for Base Rate Loans. Base Rate Loans
shall be made in minimum amounts of One Million Dollars ($1,000,000) or an
integral multiple of One Hundred Thousand Dollars ($100,000) in excess thereof.
(b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR Loans
shall bear interest on the unpaid principal amount thereof during the Interest
Period applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the Applicable Margin for LIBOR Loans. Upon receipt of a
Notice of Borrowing or a Notice of Continuation/Conversion requesting the making
of, continuation of and/or conversion to LIBOR Loans, Agent shall determine
LIBOR applicable to the Interest Period for such LIBOR Loans, and shall give
notice thereof to Borrower and Lenders; provided, however, that failure to give
such notice shall not affect the validity of such rate. Each determination by
Agent of LIBOR shall be conclusive and binding upon the parties hereto in the
absence of demonstrable error. LIBOR Loans shall be in tranches of One Million
Dollars ($1,000,000) or One Hundred Thousand Dollar ($100,000) increments in
excess thereof. No more than six (6) LIBOR Loan tranches shall be outstanding at
any one time.
(c) Interest and Principal Payments. Subject to Section
2.03(d), interest accrued on the Loan shall be payable by Borrower in arrears on
the first Business Day of the first calendar month following the Closing Date,
and the first Business Day of each succeeding calendar month thereafter, and on
the Termination Date. On each March 15, June 15, September 15, and December 15
occurring after the date hereof and prior to the Initial Maturity Date, Borrower
shall make a payment of the outstanding principal amount of the Loan equal to
One Million Eight Hundred Thousand Dollars ($1,800,000), for a total principal
payment pursuant to this sentence of Nineteen Million Eight Hundred Thousand
Dollars ($19,800,000). The payments of principal required under the immediately
preceding sentence may be prepaid in
26
accordance with Section 2.05, and all such prepayments shall be applied to such
repayment obligations in the inverse order of when they are due.
(d) Default Interest. Notwithstanding the rates of interest
specified in Sections 2.03(a) and 2.03(b) and the payment dates specified in
Section 2.03(c), effective immediately upon demand by Agent after the occurrence
of an Event of Default and during the continuance of any Event of Default, the
principal balance of the Loan then outstanding and, to the extent permitted by
applicable law, any interest payments on the Loan not paid when due shall bear
interest payable upon demand at a rate which is five percent (5%) per annum in
excess of the rate or rates of interest otherwise payable under this Agreement.
All other amounts due Agent or Lenders (whether directly or for reimbursement)
under this Agreement or any of the other Loan Documents if not paid when due, or
if no time period is expressed, if not paid within fifteen (15) days after
written demand to Borrower, shall bear interest from and after demand at the
rate which is five percent (5%) per annum in excess of the lowest rate or rates
of interest otherwise payable under this Agreement, or, if no portion of the
Loan is then outstanding, at the rate which is five percent (5%) per annum in
excess of the rate of interest applicable to Base Rate Loans.
(e) Late Fee. Borrower acknowledges that late payment
hereunder will cause Agent and Lenders to incur costs not contemplated by this
Agreement. Such costs include without limitation processing and accounting
charges. Therefore, if Borrower fails timely to pay any sum due and payable
hereunder through the Termination Date (other than payments of principal),
unless waived by Agent pursuant to Section 12.05(e), a late charge of four cents
($.04) for each dollar of any interest payment due hereon and which is not paid
within ten (10) days after such payment is due or of any other amount due hereon
(other than payments of principal) and which is not paid within thirty (30) days
after such payment is due, shall be charged by Agent (for the benefit of
Lenders) and paid by Borrower for the purpose of defraying the expense incident
to handling such delinquent payment; provided, however, that no late charges
shall be assessed with respect to any amount for which Borrower is obligated to
pay interest at the rate specified in Section 2.03(d), provided, further, that
in no event shall Agent or Lenders be required to refund any late fees paid by
Borrower, notwithstanding the preceding proviso. Borrower, Agent and Lenders
agree that this late charge represents a reasonable sum considering all of the
circumstances existing on the date hereof and represents a fair and reasonable
estimate of the costs that Agent and Lenders will incur by reason of late
payment. Borrower, Agent and Lenders further agree that proof of actual damages
would be costly and inconvenient. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue installment, and
shall not prevent Agent from exercising any of the other rights available
hereunder or under any other Loan Document. Such late charge shall be paid
without prejudice to any other rights of Agent.
(f) Computation of Interest. Interest and fees shall be
computed on the basis of the actual number of days elapsed in the period during
which interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on the Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded. Notwithstanding subsections
(a), (b), (d) and (e) above, interest in respect of the Loan or any portion
thereof shall not exceed the maximum rate permitted by applicable law.
27
(g) Changes; Legal Restrictions. In the event that after the
Closing Date (A) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (B) compliance by Agent or any Lender with any
request or directive made or issued after the Closing Date (whether or not
having the force of law and whether or not the failure to comply therewith would
be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
(i) subjects Agent or any Lender to any tax, duty or other
charge of any kind with respect to the Facility, this Agreement or any
of the other Loan Documents or the Loan or changes the basis of
taxation of payments to Agent or such Lender of principal, fees,
interest or any other amount payable hereunder, except for net income,
gross receipts, gross profits or franchise taxes imposed by any
jurisdiction and not specifically based upon loan transactions;
(ii) imposes, modifies or holds applicable, in the
determination of Agent or any Lender, any reserve, special deposit,
compulsory loan, FDIC insurance, capital allocation or similar
requirement against assets held by, or deposits or other liabilities in
or for the account of, advances or loans by, or other credit extended
by, or any other acquisition of funds by, Agent or such Lender or any
applicable lending office (except to the extent that the reserve and
FDIC insurance requirements are reflected in the "Base Rate" or "LIBOR
Rate"); or
(iii) imposes on Agent or any Lender any other condition
materially more burdensome in nature, extent or consequence than those
in existence as of the Closing Date;
and the result of any of the foregoing is to (X) increase the cost to Agent or
any Lender of making, renewing, maintaining or participating in any portion of
the Loan or to reduce any amount receivable hereunder or thereunder or (Y) to
require Agent or any Lender or any applicable lending office to make any payment
calculated by reference to the amount of the portion of the Loan held or
interest received by it under such portion of the Loan; then, in any such case,
Borrower shall promptly pay to Agent or such Lender, as applicable, upon demand,
such amount or amounts (based upon a reasonable allocation thereof by Agent or
such Lender to the financing transactions contemplated by this Agreement and
affected by this Section 2.03(g)) as may be necessary to compensate Agent or
such Lender for any such additional cost incurred, reduced amounts received or
additional payments made to the extent Agent or such Lender generally imposes
such additional costs, losses and payments on other borrowers in similar
circumstances. Agent or such Lender shall deliver to Borrower and in the case of
a delivery by a Lender, such Lender shall also deliver to Agent, a written
statement in reasonable detail of the claimed additional costs incurred, reduced
amounts received or additional payments made and the basis therefor as soon as
reasonably practicable after Agent or such Lender, as applicable, obtains
knowledge thereof.
(h) Certain Provisions Regarding LIBOR Loans
28
(i) LIBOR Lending Unlawful. If any Lender shall determine in
good faith that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank or
other governmental authority asserts that it is unlawful, for such
Lender to convert any Base Rate Loan into a LIBOR Loan or maintain any
portion of the Loan as a LIBOR Loan, (A) the obligations of the Lenders
to convert any Base Rate Loan into a LIBOR Loan or maintain any Loan as
a LIBOR Loan shall, upon such determination, forthwith be suspended
until such Lender shall notify Agent that the circumstances causing
such suspension no longer exist, and (B) if required by law or such
assertion, all LIBOR Loans shall automatically convert into Base Rate
Loans.
(ii) Deposits Unavailable. If Agent shall have determined in
good faith that adequate means do not exist for ascertaining the
interest rate applicable hereunder to LIBOR Loans, then, upon notice
from Agent to Borrower the obligations of all Lenders to convert any
Base Rate Loan into a LIBOR Loan or maintain any portion of the Loan as
a LIBOR Loan shall forthwith be suspended until Agent shall notify
Borrower that the circumstances causing such suspension no longer
exist. Agent will give such notice when it determines, in good faith,
that such circumstances no longer exist; provided, however, that Agent
shall not have any liability to any Person with respect to any delay in
giving such notice.
(iii) Funding Losses. In the event any Lender shall incur any
loss or expense (including any loss or expense incurred by reason of
the liquidation or reemployment of deposits or other funds acquired by
such Lender to make or maintain any portion of the Loan as a LIBOR
Loan) as a result of:
(A) any continuance, conversion, repayment or
prepayment of the principal amount of any LIBOR Loans for any
reason whatsoever on a date other than the scheduled last day
of the Interest Period applicable thereto;
(B) any portion of the Loan not being made as a LIBOR
Loan in accordance with the Notice of Borrowing, other than as
a result of such Lender's breach of their obligation to fund
such Loans in accordance with the terms hereof; or
(C) any Base Rate Loans not being converted into
LIBOR Loans or any LIBOR Loans not being continued as LIBOR
Loans in accordance with the Notice of Continuation/Conversion
therefor, other than as a result of such Lender's breach of
its obligation to convert such Loan in accordance with the
terms hereof;
then, within fifteen (15) Business Days after Borrower's receipt of the
written notice of such Lender to Borrower with a copy to Agent,
Borrower shall reimburse such Lender for such loss or expense;
provided, however, that each Lender will use reasonable efforts to
minimize such loss or expense. Such written notice (which shall include
calculations in reasonable detail) shall, in the absence of
demonstrable error, be conclusive and binding on the parties hereto.
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(i) Withholding Tax Exemption. Each Lender that is not created
or organized under the laws of the United States of America or a
political subdivision thereof shall deliver to Borrower and Agent no
later than the Closing Date (or, in the case of a Lender which becomes
a Lender pursuant to Section 11.13, the date upon which such Lender
becomes a party hereto) a true and accurate certificate executed in
duplicate by a duly authorized officer of such Lender, in a form
satisfactory to Borrower and Agent, to the effect that such Lender is
capable, under the provisions of an applicable treaty concluded by the
United States of America (in which case the certificate shall be
accompanied by three (3) accurate and complete duly executed originals
of Form W-8BEN of the Internal Revenue Service) or under Section 1442
of the Internal Revenue Code (in which case the certificate shall be
accompanied by three (3) accurate and complete duly executed originals
of Form W-8ECI of the Internal Revenue Service), of receiving payments
of principal, interest and fees hereunder without deduction or
withholding of United States federal income tax. Further, if at any
time a Lender changes its applicable lending office or selects an
additional applicable lending office, it shall, at the same time or
promptly thereafter, but only to the extent the certificate and forms
previously delivered by it hereunder are no longer applicable or
effective, deliver to Borrower and Agent in replacement for, or in
addition to, the certificate and forms previously delivered by it
hereunder, a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender accompanied by three (3)
accurate and complete duly executed originals of either Form W-8BEN of
the Internal Revenue Service or Form W-8ECI of the Internal Revenue
Service, whichever is applicable, indicating that such Lender is
entitled to receive payments of principal, interest and fees for the
account of such changed or additional applicable lending office under
this Agreement without deduction or withholding of United States
federal tax. Each Lender further agrees to deliver to Borrower and
Agent a true and accurate certificate executed in duplicate by a duly
authorized officer of such Lender accompanied by three (3) accurate and
complete duly executed originals of either Form W-8BEN of the Internal
Revenue Service or Form W-8ECI of the Internal Revenue Service,
whichever is appropriate, substantially in a form satisfactory to
Borrower and Agent, before or promptly upon the occurrence of any event
requiring a change in the most recent certificate or Internal Revenue
Service form previously delivered by it to Borrower and Agent pursuant
to this Section 2.03(j). Further, each Lender which delivers a
certificate accompanied by Form W-8BEN of the Internal Revenue Service
covenants and agrees to deliver to Borrower and Agent within fifteen
(15) days prior to January 1, 2005, and every third (3rd) anniversary
of such date thereafter, on which this Agreement is still in effect,
another such certificate and three (3) accurate and complete original
signed copies of Form W-8BEN (or any successor form or forms required
under the Internal Revenue Code or the applicable regulations
promulgated thereunder), and each Lender that delivers a certificate
accompanied by Form W-8ECI of the Internal Revenue Service covenants
and agrees to deliver to Borrower and Agent within fifteen (15) days
prior to the beginning of each subsequent taxable year of such Lender
during which this Agreement is still in effect, another such
certificate and three (3) accurate and complete original signed copies
of Internal Revenue Service Form W-8ECI (or any successor form or forms
required under the Internal Revenue Code or the applicable regulations
promulgated hereunder). If (i) any Lender is required under this
Section 2.03(j) to provide a certificate or other evidence described
above and fails to deliver to Borrower and Agent such certificate or
other evidence or (ii) any Lender delivers a certificate to the effect
that, as a result of the adoption of or any change in any law, treaty,
rule, regulation, guideline or determination of a Governmental
Authority after the date such Lender became a party hereto, such Lender
is not capable of receiving payments of
30
interest hereunder without deduction or withholding of United States
federal income tax as specified therein and that it is not capable of
recovering the full amount of the same from a source other than
Borrower, then, to the extent required by law, as the sole consequence
of such Lender's failure to deliver the certificate described in (i)
above or such Lender's delivery of the certificate described in (ii)
above, Borrower shall be entitled to deduct or withhold taxes from the
payments owed to such Lender.
2.04 Fees.
(a) Intentionally Deleted.
(b) Loan Fee. On the Closing Date, Borrower shall pay Agent,
for the benefit of Lenders, the loan fee which is provided for in the separate
agreement between Agent and Borrower.
(c) Arrangement and Administrative Agency Fees. Borrower shall
pay Agent such fees as are provided for in the separate fee agreement between
Agent and Borrower, as in existence from time to time.
(d) Intentionally Deleted.
(e) Payment of Fees. The fees described in this Section 2.04
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of Borrower to pay the fees described herein shall be in addition to, and not in
lieu of, the obligation of Borrower to pay interest, other fees and expenses
otherwise described in this Agreement. All fees shall be payable when due in
California in immediately available funds and shall be non-refundable when paid.
If Borrower fails to make any payment of fees or expenses specified or referred
to in this Agreement due to Agent or Lenders, including without limitation those
referred to in this Section 2.04 or otherwise under this Agreement or any
separate fee agreement between Borrower and Agent relating to this Agreement,
when due, the amount due shall bear interest until paid at a fluctuating rate
per annum equal to the Base Rate plus the Applicable Margin for Base Rate Loans
and, after five (5) days at the rate specified in Section 2.03(d) (but not to
exceed the maximum rate permitted by applicable law) and shall constitute part
of the Obligations. All fees described in this Section 2.04 which are expressed
as a per annum charge shall be calculated on the basis of the actual number of
days elapsed in a three hundred sixty (360) day year.
2.05 Payments.
(a) Voluntary Prepayments. Borrower may, upon not less than
three (3) Business Days prior written notice, at any time and from time to time,
prepay the Loan, without premium or penalty (other than as set forth in Section
2.03(h)(iii)), in whole or in part in amounts not less than One Hundred Thousand
Dollars ($100,000) or integral multiples of Twenty-Five Thousand Dollars
($25,000) in excess of One Hundred Thousand Dollars ($100,000). Any notice of
prepayment given to Agent under this Section 2.05(a) shall specify the date of
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prepayment and the aggregate principal amount of the prepayment. All prepayments
of principal shall be accompanied by a payment of all accrued and unpaid
interest thereon.
(b) Manner and Time of Payment. All payments of principal,
interest and fees hereunder payable to Agent or the Lenders shall be made
without condition or reservation of right and free of set-off or counterclaim,
in Dollars and by (i) wire transfer (pursuant to Agent's written wire transfer
instructions) of immediately available funds, delivered to Agent not later than
11:00 A.M. (California time) on the date due; and funds received by Agent after
that time and date shall be deemed to have been paid on the next succeeding
Business Day or (ii) by check (pursuant to Agent's written check payment
instructions) delivered to Agent, such check and the payment intended to be
covered thereby to be deemed to have been paid on the date Agent receives
immediately available funds therefor. All payments of principal, interest and
fees hereunder shall be made by (i) wire transfer of immediately available funds
to Wells Fargo Bank, N.A. (ABA number 121000248) for credit to account number
AC2963507207, reference MHC Operating Limited Partnership, loan number 101305
with telephonic notice to Ann Blocker at (310) 335-9452 or (ii) check payable to
Wells Fargo Bank, N.A., and delivered to Agent at 2120 E. Park Place, Suite 100,
El Segundo, California 90245, Attn: Ann Blocker, or to such other bank, account
or address as Agent may specify in a written notice to Borrower.
(c) Payments on Non-Business Days. Whenever any payment to be
made by Borrower hereunder shall be stated to be due on a day which is not a
Business Day, payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.
2.06 Increased Capital. If either (i) the introduction of or
any change in or in the interpretation of any law or regulation or (ii)
compliance by Agent or any Lender with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) made or issued
after the Closing Date affects or would affect the amount of capital required or
expected to be maintained by Agent or such Lender or any corporation controlling
Agent or such Lender, and Agent or such Lender determines that the amount of
such capital is increased by or based upon the existence of the obligations of
Agent or such Lender, then, upon demand by Agent or such Lender, Borrower shall
immediately pay to Agent or such Lender, from time to time as specified by Agent
or such Lender, additional amounts sufficient to compensate Agent or such Lender
in light of such circumstances, to the extent that Agent or such Lender
reasonably determines such increase in capital to be allocable to the existence
of the obligations of Agent or such Lender hereunder and to the extent Agent or
such Lender generally imposes such amounts on other borrowers in similar
circumstances. A certificate as to such amounts submitted to Borrower by Agent
or such Lender shall, in the absence of manifest error, be conclusive and
binding for all purposes.
2.07 Notice of Increased Costs.Each of Agent and the Lenders
agrees that, as promptly as reasonably practicable after it becomes aware of the
occurrence of an event or the existence of a condition which would cause it to
be affected by any of the events or conditions described in Section 2.03(g) or
(h), or Section 2.06, it will notify Borrower and provide in such
32
notice a reasonably detailed calculation of the amount due from Borrower, and
provide a copy of such notice to Agent, of such event and the possible effects
thereof. If Agent or the affected Lender shall fail to notify Borrower of the
occurrence of any such event or the existence of any such condition within
ninety (90) days following the end of the month during which such event occurred
or such condition arose, then Borrower's liability for any amounts described in
said Sections 2.03(g) and (h) and 2.06 incurred by Agent or such affected Lender
as a result of such event or condition shall be limited to those attributable to
the period occurring subsequent to the ninetieth (90th) day prior to the date
upon which Agent or such affected Lender actually notified Borrower of such
event or condition.
2.08 Option to Replace Lenders.
(a) Lenders. If any Lender shall make any demand for payment
or reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may
terminate the Commitment of such Lender, in whole but not in part, by (i) giving
such Lender and Agent not less than three (3) Business Days prior written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof by such Lender and Agent and shall specify the effective date of such
termination, (ii) paying to such Lender (and there shall become due and payable)
on such date the outstanding principal amount of the portion of the Loan made by
such Lender, all interest thereon, and all other Obligations owed to such
Lender, including, without limitation, amounts owing under Sections 2.03(g),
2.03(h)(iii), 2.04 and 2.06, if any, and (iii) pursuant to the provisions of
Section 11.13, proposing the introduction of a replacement Lender reasonably
satisfactory to Agent, or obtaining the agreement of one or more existing
Lenders, to assume the entire amount of the Commitment of the Lender whose
Commitment is being terminated, on the effective date of such termination. Upon
the satisfaction of all of the foregoing conditions, such Lender which is being
terminated pursuant to this Section 2.08 shall cease to be a "Lender" for
purposes of this Agreement provided that Borrower shall continue to be obligated
to such Lender under Sections 12.01 and 12.02 (and any other indemnifications
contained herein or in any other Loan Document) with respect to or on account of
unpaid, unliquidated, unknown or similar claims or liabilities accruing prior to
such Lender ceasing to be a "Lender" for purposes of this Agreement.
(b) Agent. If Agent shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may remove
Agent by (i) giving the Lenders and Agent not less than thirty (30) Business
Days prior written notice thereof, and (ii) paying to Agent (and there shall
become due and payable) on such date all other Obligations owed to Agent,
including, without limitation, amounts owing under Sections 2.03(g), 2.03(h),
2.04 and 2.06, if any. Agent shall be replaced in accordance with the provisions
of Section 11.09.
2.09 Funds Transfer Disbursements.
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(a) Borrower hereby authorizes Agent and Lenders to disburse
the proceeds of the Loan pursuant to the Loan Documents as requested by an
authorized representative of the Borrower to any of the accounts designated in
Exhibit C. Borrower agrees to be bound by any transfer request: (i) authorized
or transmitted by Borrower; or, (ii) made in Borrower's name and accepted by
Agent in good faith and in compliance with these transfer instructions, even if
not properly authorized by Borrower. Borrower further agrees and acknowledges
that Agent and Lenders may rely solely on any bank routing number or identifying
bank account number or name provided by Borrower to effect a wire or funds
transfer even if the information provided by Borrower identifies a different
bank or account holder than named by the Borrower. Neither Agent nor Lenders are
obligated or required in any way to take any actions to detect errors in
information provided by Borrower. If Agent or any Lender takes any actions in an
attempt to detect errors in the transmission or content of transfer or requests
or takes any actions in an attempt to detect unauthorized funds transfer
requests, Borrower agrees that no matter how many times Agent and any Lender
takes these actions neither Agent nor Lenders will in any situation be liable
for failing to take or correctly perform these actions in the future and such
actions shall not become any part of the transfer disbursement procedures
authorized under this provision, the Loan Documents, or any agreement between
Lenders and Borrower. Borrower agrees to notify Agent of any errors in the
transfer of any funds or of any unauthorized or improperly authorized transfer
requests within 14 days after Agent's or any Lender's confirmation to Borrower
of such transfer.
(b) Agent will, in its sole discretion, determine the funds
transfer system and the means by which each transfer will be made. Agent may
delay or refuse to accept a funds transfer request if the transfer would: (i)
violate the terms of this authorization (ii) require use of a bank unacceptable
to Agent or prohibited by government authority; (iii) cause Agent or any Lender
to violate any Federal Reserve or other regulatory risk control program or
guideline, or (iii) otherwise cause Agent or any Lender to violate any
applicable law or regulation.
(c) Neither Agent nor any Lender shall be liable to Borrower
or any other parties for (i) errors, acts or failures to act of others,
including other entities, banks, communications carriers or clearinghouses,
through which Borrower's transfers may be made or information received or
transmitted, and no such entity shall be deemed an agent of Agent or any Lender,
(ii) any loss, liability or delay caused by fires, earthquakes, wars, civil
disturbances, power surges or failures, acts of government, labor disputes,
failures in communications networks, legal constraints or other events beyond
Agent's or any Lender's control, or (iii) any special, consequential, indirect
or punitive damages, whether or not (a) any claim for these damages is based on
tort or contract or (b) Agent, Lender or Borrower knew or should have known the
likelihood of these damages in any situation. Agent and Lenders make no
representations or warranties other than those expressly made in this Agreement.
2.10 Intentionally Deleted.
ARTICLE III.
EXTENSION OPTIONS
3.01 First Extension Option. At the written request of
Borrower made to Agent at least thirty (30) days prior to the Initial Maturity
Date, the Maturity Date shall be extended to
34
the one-year anniversary of the Initial Maturity Date (the "First Extended
Maturity Date") provided that the following conditions are satisfied:
(a) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing as of the Initial Maturity Date;
(b) all representations and warranties made by Borrower, the
REIT, MHC Trust and T1000 Trust contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects as of the Initial
Maturity Date except to the extent they related to a specific date;
(c) Agent shall have received Officer's Certificates of the
REIT dated as of the Initial Maturity Date stating that the executive officer
who is the signatory thereto, which officer shall be the chief executive officer
or the chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, MHC
Trust, the Subsidiaries, and the Agreement Parties, and that (A) such review has
not disclosed the existence as of the date of such Officer's Certificate, and
that the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and
(d) on or before the Initial Maturity Date, Agent shall have
received, on behalf of Agent and Lenders, an extension fee in the amount of
one-fifth of one percent (0.20%) of the then-outstanding principal balance of
the Loan.
3.02 Second Extension Option. At the written request of
Borrower made to Agent at least thirty (30) days prior to the First Extended
Maturity Date, the Maturity Date shall be extended to the one-year anniversary
of the First Extended Maturity Date (the "Second Extended Maturity Date")
provided that the following conditions are satisfied:
(a) The Initial Maturity Date was previously extended to the
First Extended Maturity Date in accordance with Section 3.01;
(b) no Event of Default or Unmatured Event of Default shall
have occurred and be continuing as of the First Extended Maturity Date;
(c) all representations and warranties made by Borrower, the
REIT, MHC Trust and T1000 Trust contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects as of the First
Extended Maturity Date except to the extent they related to a specific date;
(d) Agent shall have received Officer's Certificates of the
REIT dated as of the First Extended Maturity Date stating that the executive
officer who is the signatory thereto,
35
which officer shall be the chief executive officer or the chief financial
officer of the REIT, has reviewed, or caused under his supervision to be
reviewed, the terms of this Agreement and the other Loan Documents, and has
made, or caused to be made under his supervision, a review in reasonable detail
of the transactions and condition of Borrower, the REIT, MHC Trust, the
Subsidiaries, and the Agreement Parties, and that (A) such review has not
disclosed the existence as of the date of such Officer's Certificate, and that
the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and
(e) on or before the First Extended Maturity Date, Agent shall
have received, on behalf of Agent and Lenders, an extension fee in the amount of
one-fifth of one percent (0.20%) of the then-outstanding principal balance of
the Loan.
ARTICLE IV.
CONDITIONS TO LOAN
4.01 Intentionally Omitted.
4.02 Conditions to Disbursement of the Loan. The obligation of
Lenders to make the disbursement of the Loan shall be subject to satisfaction of
each of the following conditions precedent on or before the Closing Date:
(a) Borrower Loan Documents. Borrower shall have executed and
delivered to Agent each of the following, in form and substance reasonably
acceptable to Agent and Agent's counsel:
(i) This Agreement;
(ii) The Loan Notes;
(iii) A solvency certificate; and
(iv) Lender's form of Funds Transfer Agreement and signature
authorization form.
(b) REIT Documents. The REIT shall have executed and delivered
to Agent each of the following, in form and substance reasonably acceptable to
Agent and Agent's counsel:
(i) This Agreement;
(ii) The REIT Guaranty;
(iii) A solvency certificate; and
36
(iv) A compliance certificate confirming the matters described
in Section 4.02(h).
(c) MHC Trust Documents. MHC Trust shall have executed and
delivered to Agent each of the following, in form and substance reasonably
acceptable to Agent and Agent's counsel:
(i) This Agreement;
(ii) The REIT Guaranty; and
(iii) A solvency certificate.
(d) T1000 Trust Documents. T1000 Trust shall have executed and
delivered to Agent each of the following, in form and substance reasonably
acceptable to Agent and Agent's counsel:
(i) This Agreement;
(ii) The REIT Guaranty; and
(iii) A solvency certificate.
(e) Corporate, Partnership and Trust Documents. Agent shall
have received the following corporate, partnership and trust documents:
(i) With respect to Borrower: a certified copy of Borrower's
limited partnership agreement; a certified copy of Borrower's
Certificate of Limited Partnership; a certificate of existence for
Borrower from the State of Illinois; and a certificate of Borrower's
general partner's secretary, assistant secretary or an officer
comparable thereto with respect to Borrower pertaining to
authorization, incumbency and by-laws, if any;
(ii) With respect to the REIT: certified copies of the REIT's
certificate/articles of incorporation and by-laws; a good standing
certificate of the REIT from the State of Maryland; and certificates of
the REIT's secretary, assistant secretary or officers comparable
thereto with respect to the REIT pertaining to authorization,
incumbency and by-laws; and
(iii) With respect to MHC Trust and T1000 Trust: certified
copies of MHC Trust's and T1000 Trust's respective declarations of
trust and by-laws; good standing certificates of MHC Trust and T1000
Trust from the State of Maryland; and a certificate of MHC Trust's and
T1000 Trust's respective secretary, assistant secretary or an officer
comparable thereto with respect to MHC Trust and T1000 Trust pertaining
to authorization, incumbency and by-laws.
(f) Opinion of Counsel. Agent shall have received a favorable
opinion of counsel (which may be in-house counsel) for Borrower, the REIT, MHC
Trust and T1000 Trust
37
dated as of the Closing Date, in form and substance reasonably satisfactory to
Agent and its counsel.
(g) Notice of Borrowing. Borrower shall have delivered to
Agent a Notice of Borrowing in compliance with Section 2.01(b).
(h) No Event of Default. No Event of Default or Unmatured
Event of Default shall have occurred and be continuing or would result from the
making of the requested Loan and all of the financial covenants contained in
Articles VIII and IX shall be satisfied.
(i) Representations and Warranties. All of the representations
and warranties of Borrower, the REIT, MHC Trust and T1000 Trust in this
Agreement shall be true and correct in all material respects as of the
Closing Date.
(j) Thousand Trails Transaction. Borrower and T1000 Trust
shall have delivered to Agent evidence reasonably acceptable to Agent that the
Thousand Trails Transaction shall close simultaneously with the disbursement of
the Loan.
(i) Thousand Trails Lease. Borrower and T1000 Trust shall have
delivered to Agent a copy of the Thousand Trails Lease, certified to Agent by an
officer of T1000 Trust as true, correct and complete.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties as to Borrower. Borrower
hereby represents and warrants to Agent and Lenders as follows:
(a) Organization; Partnership Powers. Borrower (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) is duly qualified to do
business as a foreign limited partnership and in good standing under the laws of
each jurisdiction in which the nature of its business requires it to be so
qualified, except for those jurisdictions where failure to so qualify and be in
good standing would not have a Material Adverse Effect and (iii) has all
requisite partnership power and authority to own, operate and encumber its
property and assets and to conduct its business as presently conducted and as
proposed to be conducted in connection with and following the consummation of
the transactions contemplated by the Loan Documents.
(b) Authority. Borrower has the requisite partnership power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the general partner of Borrower, and no other partnership
proceedings or authorizations on the part of Borrower or its general or limited
partners are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower is a party has been duly executed and delivered by
Borrower and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to
38
bankruptcy, insolvency and other laws affecting creditors' rights generally and
general equitable principles.
(c) Ownership of Borrower. Schedule 5.01(c) sets forth the
general partners of Borrower and their respective ownership percentages as of
the date hereof. Except as set forth in the partnership agreement of Borrower,
no partnership interests (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for partnership interests) of
Borrower are subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. To Borrower's knowledge, all of
the partnership interests in Borrower have been issued in compliance with all
applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance by
Borrower of the Loan Documents to which it is or will be a party, and each of
the transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or the
organizational documents of any Subsidiary of Borrower or (ii) conflict with,
result in a breach of or constitute (with or without notice or lapse of time or
both) a default under any Requirement of Law, Contractual Obligation or Court
Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
(e) Consents and Authorizations. Borrower has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow Borrower to lawfully execute, deliver and perform its obligations under
the Loan Documents to which Borrower is a party.
(f) Governmental Regulation. Borrower is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(g) Prior Financials. The Consolidated and Combined Balance
Sheet as of June 30, 2004, the Consolidated and Combined Statement of Operations
for the Quarter Ended June 30, 2004, and the Consolidated and Combined Statement
of Cash Flows for the Quarter Ended June 30, 2004 of the REIT contained in the
Form 10-Q Quarterly Report of the REIT as of June 30, 2004 (the "Pre-Closing
Financials") delivered to Agent prior to the date hereof were prepared in
accordance with GAAP in effect on the date such Pre-Closing Financials were
prepared and fairly present the assets, liabilities and financial condition of
the REIT, on a consolidated basis, at such date and the results of its
operations and its cash flows, on a consolidated basis, for the period then
ended.
39
(h) Financial Statements; Projections and Forecasts. Each of
the Financial Statements to be delivered to Agent pursuant to Sections 6.01(a)
and (b), (i) has been, or will be, as applicable, prepared in accordance with
the books and records of the REIT, on a consolidated basis, and (ii) either
fairly present, or will fairly present, as applicable, the financial condition
of the REIT, on a consolidated basis, at the dates thereof (and, if applicable,
subject to normal year-end adjustments) and the results of its operations and
cash flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Agent (A) has been, or will be, as applicable, prepared
by the REIT and the REIT's financial personnel in light of the past business and
performance of the REIT, on a consolidated basis and (B) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of such
personnel.
(i) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to the best of Borrower's
knowledge, threatened against Borrower or any of its Subsidiaries or
any of their respective Properties, in which there is a reasonable
possibility of an adverse decision that could have a Material Adverse
Effect; and
(ii) Neither Borrower nor any of its Subsidiaries is (A) in
violation of any Requirement of Law, which violation has a Material
Adverse Effect, or (B) subject to or in default with respect to any
Court Order which has a Material Adverse Effect.
(j) No Material Adverse Change. Since June 30, 2004, there has
occurred no event which has a Material Adverse Effect.
(k) Payment of Taxes. All material tax returns and material
reports to be filed by Borrower or any of its Subsidiaries have been timely
filed, and all taxes, assessments, fees and other governmental charges shown on
such returns have been paid when due and payable, except such taxes, if any, as
are reserved against in accordance with GAAP, such taxes as are being contested
in good faith by appropriate proceedings or such taxes, the failure to make
payment of which when due and payable will not have, in the aggregate, a
Material Adverse Effect. Borrower has no knowledge of any proposed tax
assessment against Borrower or any of its Subsidiaries that will have a Material
Adverse Effect, which is not being actively contested in good faith by such
Person.
(l) Material Adverse Agreements. Neither Borrower nor any of
its Subsidiaries is a party to or subject to any Contractual Obligation or other
restriction contained in its partnership agreement, certificate of partnership,
by-laws, or similar governing documents which has a Material Adverse Effect.
(m) Performance. Neither Borrower nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute a default under such Contractual
Obligation in each case, except where the consequences, direct or indirect, of
such default or defaults, if any, will not have a Material Adverse Effect.
40
(n) Federal Reserve Regulations. No part of the proceeds of
the Loan hereunder will be used to purchase or carry any "margin security" as
defined in Regulation U or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation U. Borrower is not
engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. Borrower
is not engaged primarily in the business of extending credit for the purpose of
purchasing or carrying any "margin stock" as defined in Regulation U. No part of
the proceeds of the Loan will be used for any purpose that violates, or which is
inconsistent with, the provisions of Regulation X or any other regulation of the
Federal Reserve Board.
(o) Disclosure. Borrower has not intentionally or knowingly
withheld any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of
Borrower's future performance such representations and warranties are made in
good faith and to the best judgment of Borrower at the time such projections
were made.
(p) Requirements of Law. To Borrower's knowledge, Borrower and
each of its Subsidiaries are in compliance with all Requirements of Law
(including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply will have a Material Adverse Effect.
(q) Patents, Trademarks, Permits, Etc. Borrower and each of
its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or
has all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of Borrower's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To Borrower's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by
Borrower or such Subsidiary does not infringe on the rights of any Person,
subject to such claims and infringements as do not, in the aggregate, have a
Material Adverse Effect.
(r) Environmental Matters. To the knowledge of Borrower,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to Borrower's knowledge has
there ever been, on or in the Property of Borrower or any of its Subsidiaries
(except in compliance in all material respects with all
41
applicable Environmental Laws): (A) any underground storage tanks, (B) any
asbestos-containing material, (C) any polychlorinated biphenyls (PCB's) used in
hydraulic oils, electrical transformers or other equipment, (D) any petroleum
hydrocarbons or (E) any chlorinated or halogenated solvents; and (v) neither
Borrower nor any of its Subsidiaries has received any notice or claim to the
effect that it is or may be liable to any Person as a result of the Release or
threatened Release of a Contaminant into the environment.
(s) ERISA. None of the REIT, Borrower or any Agreement Party
is an "employee pension benefit plan" as defined in Section 3(2) of ERISA, an
"employee welfare benefit plan" as defined in Section 3(1) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of a Lender's breach of the
covenant set forth in Section 11.23, none of the Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith constitutes a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and the taxes and penalties imposed by Section 4975 of the Internal Revenue Code
and Section 502(i) of ERISA) or otherwise results in a Lender, the Agent or the
Lenders being deemed in violation of Sections 404 or 406 of ERISA or Section
4975 of the Internal Revenue Code or will by itself result in a Lender, Agent or
the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section 4975(e)(2) of the Internal Revenue
Code with respect to an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code. No assets of the REIT, Borrower or any Agreement Party
constitute "assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code.
Each Borrower Plan is in compliance with ERISA and the
applicable provisions of the Internal Revenue Code in all respects except where
the failure to comply would not have a Material Adverse Effect. There are no
claims (other than claims for benefits in the normal course), actions or
lawsuits asserted or instituted against, and none of Borrower, the REIT, any of
the Subsidiaries or any of their ERISA Affiliates has knowledge of any
threatened litigation or claims against the assets of any Borrower Plan or
against any fiduciary of such Borrower Plan with respect to the operation of
such Borrower Plan which could have a Material Adverse Effect. No liability to
the PBGC has been, or is likely to be, incurred by Borrower, the REIT, any of
the Subsidiaries or their ERISA Affiliates other than such liabilities which, in
the aggregate, would not have a Material Adverse Effect. None of Borrower, the
REIT, any of the Subsidiaries or any of their ERISA Affiliates is now
contributing to or has ever contributed to or been obligated to contribute to
any Multiemployer Plan, no employees or former employees of Borrower, the REIT,
any of the Subsidiaries or any of their ERISA Affiliates have been covered by
any Multiemployer Plan in respect of their employment by Borrower or such
Subsidiary or such ERISA Affiliate. None of Borrower, the REIT, any of the
Subsidiaries or any of their ERISA Affiliates has engaged in a "prohibited
transaction," as such term is defined in Section 4975 of the Internal Revenue
Code or in a transaction subject to the prohibitions of Section 406 of ERISA, in
connection with any Benefit Plan or Welfare Plan which would subject Borrower,
the REIT, any of the Subsidiaries or any of their ERISA Affiliates (after giving
effect to any
42
exemption) to the tax or penalty on prohibited transactions imposed by Section
4975 of the Internal Revenue Code, Section 502 of ERISA or any other liability
under ERISA which tax, penalty or other liability would have a Material Adverse
Effect. None of the Benefit Plans subject to Title IV of ERISA has any material
Unfunded Pension Liability as to which Borrower, the REIT, any of the
Subsidiaries or any of their ERISA Affiliates is or may be liable, which
liability would have a Material Adverse Effect.
(t) Solvency. Borrower is and will be Solvent after giving
effect to the disbursement of the Loan and the payment and accrual of all fees
then payable hereunder.
(u) Title to Assets; No Liens. Borrower has good, indefeasible
and merchantable title to the Property owned or leased by it, and all such
Property is free and clear of all Liens, except Permitted Liens and Liens
permitted by Section 8.01(b).
(v) Use of Proceeds. Borrower's uses of the proceeds of the
Loan are, and will continue to be, legal and proper uses (and to the extent
necessary, duly authorized by Borrower's partners) and such uses are consistent
with all applicable laws and statutes and Section 7.01(i).
(w) Subsidiaries and Investment Affiliates. Each Subsidiary
and Investment Affiliate as of the date hereof is set forth on Schedule 5.01(w).
Schedule 5.01(w) sets forth the ownership of each such Subsidiary and Investment
Affiliate.
(x) Tax Shelter Representation. Neither Borrower, MHC Trust,
the REIT nor any Affiliate of any of the foregoing intends to treat the Loan or
the transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If Borrower, or any other party to the Loan determines to
take any action inconsistent with such intention, Borrower will promptly notify
Lenders thereof. If Borrower so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loan as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lenders will maintain the lists and other
records, including the identity of the applicable party to the Loan as required
by such Treasury Regulation.
5.02 Representations and Warranties as to the REIT.The REIT
hereby represents and warrants to Agent and Lenders as follows:
(a) Organization; Corporate Powers. The REIT (i) is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Maryland, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own, operate and encumber its property and assets and to conduct
its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions contemplated
by the Loan Documents.
43
(b) Authority. The REIT has the requisite corporate power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the Board of Directors of the REIT, and no other corporate proceedings on the
part of the REIT are necessary to consummate such transactions. Each of the Loan
Documents to which the REIT is a party has been duly executed and delivered by
the REIT and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.
(c) No Conflict. The execution, delivery and performance by
the REIT of the Loan Documents to which it is a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its Articles or Certificate of Incorporation or by-laws, or other
organizational documents, as the case may be, or the organizational documents of
Borrower or any Subsidiary, (ii) conflict with, result in a breach of or
constitute (with or without notice or lapse of time or both) a default under any
Requirement of Law, Contractual Obligation or Court Order of the REIT, Borrower
or any Subsidiary, or require termination of any such Contractual Obligation,
the consequences of which conflict or breach or default or termination will have
a Material Adverse Effect, or result in or require the creation or imposition of
any Lien whatsoever upon any of its Property, or (iii) require any approval of
the stockholders of the REIT.
(d) Consents and Authorizations. The REIT has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow the REIT to lawfully execute, deliver and perform its obligations under
the Loan Documents to which the REIT is a party.
(e) Governmental Regulation. The REIT is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(f) Capitalization. To the REIT's knowledge, all of the
capital stock of the REIT has been issued in compliance with all applicable
Requirements of Law.
(g) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity, or before or by any
Governmental Authority, pending, or to best of the REIT's knowledge,
threatened against the REIT, any of its Subsidiaries or any of their
respective Properties in which there is a reasonable possibility of an
adverse decision that could have a Material Adverse Effect; and
44
(ii) Neither the REIT nor any of its Subsidiaries is (A) in
violation of any applicable Requirement of Law, which violation has a
Material Adverse Effect, or (B) subject to or in default with respect
to any Court Order which has a Material Adverse Effect.
(h) Payment of Taxes. All tax returns and reports to be filed
by the REIT or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. The
REIT has no knowledge of any proposed tax assessment against the REIT or any of
its Subsidiaries that would have a Material Adverse Effect, which is not being
actively contested in good faith by the REIT or such Subsidiary.
(i) Material Adverse Agreements. The REIT is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(j) Performance. Neither the REIT nor any of its Subsidiaries
is in default in the performance, observance or fulfillment of any of the
obligations, covenants or conditions contained in any Contractual Obligation
applicable to it, and no condition exists which, with the giving of notice or
the lapse of time or both, would constitute a default under such Contractual
Obligation in each case, except where the consequences, direct or indirect, of
such default or defaults, if any, would not have a Material Adverse Effect.
(k) Securities Activities. The REIT is not engaged principally
in the business of extending credit for the purpose of purchasing or carrying
any "margin stock" (as defined in Regulation U).
(l) Disclosure. The REIT has not intentionally or knowingly
withheld any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of the
REIT's future performance such representations and warranties are made in good
faith and to the best judgment of the management of the REIT at the time such
projections were made.
(m) Requirements of Law. To the REIT's knowledge, the REIT and
each of its Subsidiaries are in compliance with all Requirements of Law
(including without limitation the Securities Act and the Securities Exchange
Act, and the applicable rules and regulations thereunder, state securities law
and "Blue Sky" laws) applicable to them and their respective businesses, in each
case, where the failure to so comply would have a Material Adverse Effect. After
giving effect to all filings made simultaneously with the Closing Date, the REIT
has made all filings with and obtained all consents of the Commission required
under the Securities Act and the Securities Exchange Act in connection with the
execution, delivery and performance by the REIT of the Loan Documents to which
it is a party.
45
(n) Patents, Trademarks, Permits, Etc. The REIT and each of
its Subsidiaries owns, is licensed or otherwise has the lawful right to use, or
has all permits and other governmental approvals, patents, trademarks, trade
names, copyrights, technology, know-how and processes used in or necessary for
the conduct of the REIT's or such Subsidiary's business as currently conducted,
the absence of which would have a Material Adverse Effect. To the REIT's
knowledge, the use of such permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes by the
REIT or such Subsidiary does not infringe on the rights of any Person, subject
to such claims and infringements as do not, in the aggregate, have a Material
Adverse Effect.
(o) Environmental Matters. To the knowledge of the REIT,
except as would not have a Material Adverse Effect and except as set forth on
Schedule 5.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(p) Solvency. The REIT is and will be Solvent after giving
effect to the disbursement of the Loan and the payment of all fees then payable
hereunder.
(q) Status as a REIT. The REIT (i) is a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(r) Ownership. The REIT does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).
(s) Listing. The common stock of the REIT is and will continue
to be listed for trading and traded on either the New York Stock Exchange or
American Stock Exchange.
46
(t) Tax Shelter Representation. Neither Borrower, MHC Trust,
the REIT nor any Affiliate of any of the foregoing intends to treat the Loan or
the transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If the REIT, or any other party to the Loan determines to
take any action inconsistent with such intention, the REIT will promptly notify
Lenders thereof. If the REIT so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loan as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lenders will maintain the lists and other
records, including the identity of the applicable party to the Loan as required
by such Treasury Regulation.
5.03 Representations and Warranties as to MHC Trust. MHC Trust
hereby represents and warrants to Agent and Lenders as follows:
(a) Organization; Trust or Corporate Powers. MHC Trust (i) is
a real estate investment trust duly organized, validly existing and in good
standing under the laws of the State of Maryland, (ii) is duly qualified to do
business and in good standing under the laws of each jurisdiction in which the
nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite trust or corporate power
and authority to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
(b) Authority. MHC Trust has the requisite trust or corporate
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the trustees of MHC Trust, and no other trust or corporate
proceedings on the part of MHC Trust are necessary to consummate such
transactions. Each of the Loan Documents to which MHC Trust is a party has been
duly executed and delivered by MHC Trust and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to bankruptcy, insolvency and other laws affecting creditors' rights generally
and general equitable principles.
(c) No Conflict. The execution, delivery and performance by
MHC Trust of the Loan Documents to which it is a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its Declaration of Trust or by-laws, or other organizational documents,
as the case may be, or (ii) require any approval of the beneficiaries or
shareholders of MHC Trust.
(d) Consents and Authorizations. MHC Trust has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow MHC Trust to lawfully execute, deliver and perform its obligations
under the Loan Documents to which MHC Trust is a party.
(e) Governmental Regulation. MHC Trust is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate
47
Commerce Act, the Investment Company Act of 1940 or any other federal or state
statute or regulation such that its ability to incur indebtedness is limited or
its ability to consummate the transactions contemplated by the Loan Documents is
materially impaired.
(f) Material Adverse Agreements. MHC Trust is not a party to
or subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. MHC Trust is not engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation U).
(h) Disclosure. MHC Trust has not intentionally or knowingly
withheld any material fact from Lender in regard to any matter raised in the
Loan Documents. Notwithstanding the foregoing, with respect to any projections
of MHC Trust's future performance such representations and warranties are made
in good faith and to the best judgment of the officers of MHC Trust at the time
such projections were made.
(i) Solvency. MHC Trust is and will be Solvent after giving
effect to the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. MHC Trust (i) is a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 856(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(k) Ownership. MHC Trust does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).
5.04 Representations and Warranties as to T1000 Trust. T1000
Trust hereby represents and warrants to Agent and Lenders as follows:
(a) Organization; Trust or Corporate Powers. T1000 Trust (i)
is a real estate investment trust duly organized, validly existing and in good
standing under the laws of the State of Maryland, (ii) is duly qualified to do
business and in good standing under the laws of each jurisdiction in which the
nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite trust or corporate power
and authority to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
(b) Authority. T1000 Trust has the requisite trust or
corporate power and authority to execute, deliver and perform each of the Loan
Documents to which it is or will be a
48
party. The execution, delivery and performance thereof, and the consummation of
the transactions contemplated thereby, have been duly approved by the trustees
of T1000 Trust, and no other trust or corporate proceedings on the part of T1000
Trust are necessary to consummate such transactions. Each of the Loan Documents
to which T1000 Trust is a party has been duly executed and delivered by T1000
Trust and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.
(c) No Conflict. The execution, delivery and performance by
T1000 Trust of the Loan Documents to which it is a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its Declaration of Trust or by-laws, or other organizational documents,
as the case may be, or (ii) require any approval of the beneficiaries or
shareholders of T1000 Trust.
(d) Consents and Authorizations. T1000 Trust has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow T1000 Trust to lawfully execute, deliver and perform its obligations
under the Loan Documents to which T1000 Trust is a party.
(e) Governmental Regulation. T1000 Trust is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(f) Material Adverse Agreements. T1000 Trust is not a party to
or subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. T1000 Trust is not engaged
principally in the business of extending credit for the purpose of purchasing or
carrying any "margin stock" (as defined in Regulation U).
(h) Disclosure. T1000 Trust has not intentionally or knowingly
withheld any material fact from Lender in regard to any matter raised in the
Loan Documents. Notwithstanding the foregoing, with respect to any projections
of T1000 Trust's future performance such representations and warranties are made
in good faith and to the best judgment of the officers of T1000 Trust at the
time such projections were made.
(i) Solvency. T1000 Trust is and will be Solvent after giving
effect to the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. T1000 Trust (i) is a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not recognized any material
49
"net income from prohibited transactions" as defined in Section 856(b)(6)(B)(i)
of the Internal Revenue Code (or any successor provision thereto), and (iv) for
its current "tax year" (as defined in the Internal Revenue Code) is and for all
prior tax years subsequent to its election to be a real estate investment trust
has been entitled to a dividends paid deduction which meets the requirements of
Section 857 of the Internal Revenue Code.
(k) Ownership. T1000 Trust does not own any Property or have
any interest in any Person, other than as set forth on Schedule 5.01(w).
ARTICLE VI.
REPORTING COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and
agree that, on and after the date hereof, until payment in full of all of the
Obligations and termination of this Agreement:
6.01 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP. Borrower shall deliver
or cause to be delivered to Agent with copies for each Lender:
(a) Quarterly Financial Statements Certified by CFO. As soon
as practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, except the last Fiscal Quarter of a Fiscal Year, consolidated
balance sheets, statements of income and expenses and statements of cash flow
(collectively, "Financial Statements") for the REIT, on a consolidated basis, in
the form provided to the Commission on the REIT's Form 10-Q and certified by the
REIT's chief financial officer.
(b) Annual Financial Statements. Within one hundred and twenty
(120) days after the close of each Fiscal Year, annual Financial Statements of
the REIT, on a consolidated basis (in the form provided to the Commission on the
REIT's Form 10K), audited and certified without qualification by the
Accountants.
(c) Officer's Certificate of REIT. (i) Together with each
delivery of any Financial Statement pursuant to clauses (a) and (b) above, an
Officer's Certificate of the REIT, stating that (A) the executive officer who is
the signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, during the accounting period covered by
such Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does not
have knowledge of the existence as of the date of the Officer's Certificate, of
any condition or event which constitutes an Event of Default or Unmatured Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto and
50
(B) such Financial Statements have been prepared in accordance with the books
and records of the REIT, on a consolidated basis, and fairly present the
financial condition of the REIT, on a consolidated basis, at the date thereof
(and, if applicable, subject to normal year-end adjustments) and the results of
operations and cash flows, on a consolidated basis, for the period then ended;
and (ii) together with each delivery pursuant to clauses (a) and (b) above, a
compliance certificate demonstrating, in reasonable detail (which detail shall
include actual calculations), compliance during and at the end of such
accounting periods with the financial covenants contained in Sections 8.01(a),
8.01(d) and 8.02(a) and Article IX.
(d) Knowledge of Event of Default. Promptly upon Borrower
obtaining knowledge (i) of any condition or event which constitutes an Event of
Default or Unmatured Event of Default, or (ii) of any condition or event which
has a Material Adverse Effect, an Officer's Certificate of the REIT specifying
the nature and period of existence of any such condition or event and the nature
of such claimed Event of Default, Unmatured Event of Default, event or
condition, and what action Borrower, the REIT or the Agreement Party, as the
case may be, has taken, is taking and proposes to take with respect thereto.
(e) Litigation, Arbitration or Government Investigation.
Promptly upon Borrower obtaining knowledge of (i) the institution of, or threat
of, any material action, suit, proceeding, governmental investigation or
arbitration against or affecting Borrower, any Agreement Party, the REIT, any
Subsidiary or any of their Property not previously disclosed in writing by
Borrower to Agent pursuant to this Section 6.01(e), or (ii) any material
development in any action, suit, proceeding, governmental investigation or
arbitration already disclosed, in which, in either case, there is a reasonable
possibility of an adverse decision that could have a Material Adverse Effect, a
notice thereof to Agent and such other information as may be reasonably
available to it to enable Agent and its counsel to evaluate such matters.
(f) Failure of the REIT or MHC Trust to Qualify as Real Estate
Investment Trust. Promptly upon, and in any event within forty- eight (48) hours
after Borrower first has knowledge of (i) the REIT or MHC Trust failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by the REIT or MHC Trust causing its election to be taxed as a real estate
investment trust to be terminated, (iii) any act causing the REIT or MHC Trust
to be subject to the taxes (other than a de minimus amount) imposed by Section
857(b)(6) of the Internal Revenue Code (or any successor provision thereto),
(iv) the REIT or MHC Trust failing to be entitled to a dividends paid deduction
which meets the requirements of Section 857 of the Internal Revenue Code, or (v)
any challenge by the IRS to the REIT's or MHC Trust's status as a real estate
investment trust, a notice of any such occurrence or circumstance.
(g) Management Reports. Upon and after the occurrence of an
Event of Default, copies of any management reports prepared by the Accountants
as soon as available.
(h) Property Changes. Notice of any material acquisition,
disposition, merger, or purchase by the REIT, MHC Trust, Borrower, any
Subsidiary or any Agreement Party no later than ten (10) days after the
consummation thereof, specifying the nature of the transaction in reasonable
detail.
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(i) Other Information. Such other information, reports,
contracts, schedules, lists, documents, agreements and instruments in the
possession of the REIT, Borrower, any Subsidiary, or any Agreement Party with
respect to the business, financial condition, operations, performance, or
properties of Borrower, the REIT, any Subsidiary, or any Agreement Party, as
Agent may, from time to time, reasonably request, including without limitation,
annual information with respect to cash flow projections, budgets, operating
statements (current year and immediately preceding year), rent rolls, lease
expiration reports, leasing status reports, note payable summaries, bullet note
summaries, equity funding requirements, contingent liability summaries, line of
credit summaries, line of credit collateral summaries, wrap note or note
receivable summaries, schedules of outstanding letters of credit, summaries of
cash and Cash Equivalents, projections of management and leasing fees and
overhead budgets, each in the form customarily prepared by the REIT, MHC Trust
or Borrower. If Borrower fails to provide Agent with information requested from
Borrower within the time periods provided for herein, or if no time periods are
provided for, within ten (10) Business Days after Agent requests such
information, and provided that Agent gives Borrower reasonable prior notice and
an opportunity to participate, Borrower hereby authorizes Agent to communicate
with the Accountants and authorizes the Accountants to disclose to Agent any and
all financial statements and other information of any kind, including copies of
any management letter or the substance of any oral information, that such
Accountants may have with respect to the financial condition, operations,
properties, performance and prospects of Borrower, the REIT, any Subsidiary, or
any Agreement Party. Concurrently therewith, Agent will notify Borrower of any
such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.01;
provided that, to the extent that items required by this Section 6.01 are also
required to be delivered to Agent as Agent under the Syndicated Revolving Credit
Agreement or as Lender under the WFB Revolving Credit Agreement, a single copy
of such items delivered to Agent shall be deemed to satisfy both the
requirements hereunder and thereunder.
6.02 Press Releases; SEC Filings and Financial Statements. The
REIT, MHC Trust, T1000 Trust and Borrower will deliver to the Agent as soon as
practicable after public release all press releases concerning the REIT, MHC
Trust, T1000 Trust or Borrower. The REIT, MHC Trust and Borrower will deliver to
Agent as soon as practicable after filing with the Commission, all reports and
notices, proxy statements, registration statements and prospectuses. All
materials sent or made available generally by the REIT to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, including all periodic reports required to be filed with the
Commission, will be delivered to Agent as soon as available.
6.03 Environmental Notices. Except for events or occurrences
that will not result in a Material Adverse Effect, Borrower shall notify Agent,
in writing, as soon as practicable, and in any event within ten (10) days after
Borrower's learning thereof, of any: (a) written notice or claim to the effect
that Borrower, any Agreement Party, the REIT, or any Subsidiary is or may be
liable to any Person as a result of the Release or threatened Release of any
Contaminant into the environment; (b) written notice that Borrower, any
Agreement Party, the REIT, or any Subsidiary is subject to investigation by any
Governmental Authority evaluating whether any Remedial Action is needed to
respond to the Release or threatened
52
Release of any Contaminant into the environment; (c) written notice that any
Property of Borrower, any Agreement Party, the REIT, or any Subsidiary is
subject to an Environmental Lien; (d) written notice of violation to Borrower,
any Agreement Party, the REIT, or any REIT Subsidiary or awareness of a
condition which might reasonably result in a notice of violation of any
Environmental Laws by Borrower, the REIT, any REIT Subsidiary or any Agreement
Party; (e) commencement or written threat of any judicial or administrative
proceeding alleging a violation by Borrower, the REIT, any Subsidiary or any
Agreement Party of any Environmental Laws; or (f) written notice received
directly from a Governmental Authority of any changes to any existing
Environmental Laws.
6.04 Qualifying Unencumbered Properties. Borrower may from
time to time but no more frequently than quarterly deliver notice to the Agent
stating that Borrower intends to designate a Property to become a Qualifying
Unencumbered Property. Such notice shall (i) set forth the name of such Property
(or, if such Property has no name, such notice shall otherwise identify such
Property), and (ii) be accompanied by a statement of income, certified by the
chief financial officer of the REIT, for each such Property for the then most
recently completed Fiscal Quarter (or, if such statement of income is
unavailable, a pro forma financial statement setting forth the Net Operating
Income with respect to such Property for the then current Fiscal Quarter). If
any such Property meets the requirements set forth in the definition of
"Qualifying Unencumbered Properties" and the Agent fails to deliver written
notice to Borrower stating that the Requisite Lenders have disapproved the
designation of such Property as a Qualifying Unencumbered Property (it being
understood that such notice shall provide Borrower with information regarding
why such designation was disapproved by the Requisite Lenders and that the
Requisite Lenders will not unreasonably disapprove such designation) within
twenty (20) days after receipt of such information by Agent, such Property shall
become a Qualifying Unencumbered Property.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and
agree that, on and after the date hereof, until payment in full of all of the
Obligations, the expiration of the Commitments and termination of this
Agreement:
7.01 With respect to Borrower:
(a) Existence. Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
limited liability company, trust or corporate existence, as applicable, and
preserve and keep in full force and effect its and their respective rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect. Borrower shall maintain its status as a limited
partnership.
(b) Qualification. Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.
53
(c) Compliance with Laws, Etc. Borrower shall, and shall cause
each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting Borrower and
its Subsidiaries or their respective properties, performance, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect or expose Agent or Lenders to any material liability therefor.
(d) Payment of Taxes and Claims. (a) Borrower shall, and shall
cause each of its Subsidiaries to, pay (i) all taxes, assessments and other
governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which would have a Material Adverse Effect; provided, however, that
no such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in clause (ii) above need be paid if being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if adequate reserves shall have been set aside therefor in
accordance with GAAP.
(e) Maintenance of Properties; Insurance. Borrower shall, and
shall cause each of its Subsidiaries to, maintain in good repair, working order
and condition, excepting ordinary wear and tear, all of its and their respective
Property (personal and real) and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, in each case where the failure to so
maintain, repair, renew or replace would have a Material Adverse Effect.
Borrower shall, and shall cause each of its Subsidiaries to, maintain with
insurance companies that have a Best Rating of "A- VII" or higher or other
insurance companies reasonably acceptable to Agent that have similar financial
resources and stability, which companies shall be qualified to do business in
the states where such Property is located, the insurance policies and programs
reasonably acceptable to Agent insuring all property and assets material to the
operations of Borrower and each of its Subsidiaries against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business interruption,
together with such other hazards as is reasonably consistent with prudent
industry practice, and maintain liability insurance consistent with prudent
industry practice with financially sound insurance companies qualified to do
business in the states where such Property is located. The insurance policies
shall provide that they cannot be terminated or materially modified unless Agent
receives thirty (30) days prior written notice of said termination or
modification. At Agent's reasonable request, Borrower shall furnish evidence of
replacement costs, without cost to Agent, such as are regularly and ordinarily
made by insurance companies to determine the then replacement cost of the
improvements on any Property of Borrower or any of its Subsidiaries. In the
event Borrower fails to cause insurance to be carried as aforesaid, Agent shall
have the right (but not the obligation), with the consent of Requisite Lenders,
to place and maintain insurance required to be maintained hereunder and treat
the amounts expended therefor as additional Obligations, payable
54
on demand; provided however, that Agent shall give Borrower five (5) days' prior
notice of Agent's intent to place or maintain such insurance during which time
Borrower shall have the opportunity to obtain such insurance. All of the
insurance policies required hereunder shall be in form and substance reasonably
satisfactory to Agent. Agent hereby agrees that Borrower may use blanket
policies to satisfy the requirements of this Section 7.01(e), approves the
issuer, form and content of all insurance policies currently carried by Borrower
and agrees that such insurance satisfies the requirements of this Section
7.01(e). Furthermore, Agent agrees that it will not be unreasonable in
exercising any right hereunder to require Borrower to modify, alter or
supplement its insurance policies or coverage or in exercising any right it may
have hereunder to approve any changes Borrower may hereafter make with respect
to its insurance.
(f) Inspection of Property; Books and Records. Borrower shall
permit and shall cause each of the REIT, each Subsidiary, and each Agreement
Party to, upon reasonable prior notice by Agent to Borrower, permit any
authorized representative(s) designated by Agent to visit and inspect any of its
properties including inspection of financial and accounting records and leases,
and to make copies and take extracts therefrom, all at such times during normal
business hours and as often as Agent may reasonably request. In connection
therewith, Borrower shall pay all reasonable expenses of the types described in
Section 12.01. Borrower shall keep, and shall cause each of, the REIT, each
Subsidiary and each Agreement Party to keep proper books of record and account
in conformity with GAAP, as modified and as otherwise required by this Agreement
and applicable Requirements of Law.
(g) Maintenance of Licenses, Permits, Etc. Borrower shall, and
shall cause each of its Subsidiaries to, maintain in full force and effect all
licenses, permits, governmental approvals, franchises, patents, trademarks,
trade names, copyrights, authorizations or other rights necessary for the
operation of their respective businesses, except where the failure to obtain any
of the foregoing would not have a Material Adverse Effect; and notify Agent in
writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such material
license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.
(h) Conduct of Business. Except for Permitted Holdings and
other investments permitted under Section 8.01(c), Borrower shall engage only in
the business of owning, operating, managing and developing Designated Use
Properties and other business activities incidental thereto, whether directly or
through its Subsidiaries.
(i) Use of Proceeds. Borrower shall use the proceeds of each
Loan only for the consummation of the Thousand Trails Transaction and the
payment of costs and expenses in connection therewith.
(j) Further Assurance. Borrower shall take and shall cause its
Subsidiaries and each Agreement Party to take all such further actions and
execute all such further documents and instruments as Agent may at any time
reasonably determine to be necessary or advisable to (i) correct any technical
defect or technical error that may be discovered in any Loan Document
55
or in the execution, acknowledgment or recordation thereof, and (ii) cause the
execution, delivery and performance of the Loan Documents to be duly authorized.
(k) [Intentionally Deleted]
7.02 With respect to the REIT:
(a) Existence. The REIT shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
trust or corporate existence, as applicable, and preserve and keep in full force
and effect its and their respective rights and franchises unless the failure to
maintain such rights and franchises will not have a Material Adverse Effect.
(b) Qualification, Name. The REIT shall, and shall cause each
of its Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its or
its Subsidiaries' own name.
(c) Securities Law Compliance. The REIT shall comply in all
material respects with all rules and regulations of the Commission and file all
reports required by the Commission relating to the REIT's publicly-held
Securities.
(d) Continued Status as a REIT; Prohibited Transactions. The
REIT (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue Code (or any successor provision thereto),
(ii) will not revoke its election to be a real estate investment trust, (iii)
will not recognize any material "net income from prohibited transactions" as
defined in Section 857(b)(6)(B)(i) of the Internal Revenue Code (or any
successor provision thereto), and (iv) will do all acts necessary to continue to
be entitled to a dividend paid deduction meeting the requirements of Section 857
of the Internal Revenue Code.
(e) NYSE or ASE Listed Company. The REIT shall cause its
common stock at all times to be listed for trading and be traded on the New York
Stock Exchange or American Stock Exchange.
(f) Compliance with Laws, Etc. The REIT shall, and shall cause
each of its Subsidiaries to, (i) comply with all Requirements of Law and
Contractual Obligations, and all restrictive covenants affecting the REIT and
its Subsidiaries or their respective properties, performance, prospects, assets
or operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.
(g) Payment of Taxes and Claims. Subject to Section 7.02(d),
the REIT shall, and shall cause each of its Subsidiaries to, pay (i) all taxes,
assessments and other governmental charges imposed upon it or them or on any of
its or their respective properties or assets or in respect of any of its or
their respective franchises, business, income or property before any penalty or
interest accrues thereon, the failure to make payment of which would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services,
56
materials and supplies) which have become due and payable and which by law have
or may become a Lien (other than a Permitted Lien) upon any of its or their
respective properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto, the failure to make payment of which
would have a Material Adverse Effect; provided, however, that no such taxes,
assessments, and governmental charges referred to in clause (i) above or claims
referred to in clause (ii) above need be paid if being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted and if
adequate reserves shall have been set aside therefor in accordance with GAAP.
(h) MHC Trust. The REIT shall cause MHC Trust to at all times
(i) remain a Subsidiary of the REIT, (ii) remain controlled by the REIT and
(iii) be the sole general partner of Borrower.
7.03 With respect to MHC Trust:
(a) Continued Status as a Real Estate Investment Trust;
Prohibited Transactions. MHC Trust (i) will continue to be a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) will not revoke its election to be a real
estate investment trust, (iii) will not recognize any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) will do all acts
necessary to continue to be entitled to a dividends paid deduction meeting the
requirements of Section 857 of the Internal Revenue Code.
ARTICLE VIII.
NEGATIVE COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and
agree that, on and after the date hereof, until payment in full of all of the
Obligations and termination of this Agreement:
8.01 With respect to Borrower:
(a) Indebtedness. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; the "Obligations" under the Syndicated
Revolving Credit Agreement; and the "Obligations" under the WFB
Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section
8.01(a)(i);
(iii) trade debt incurred in the normal course of business;
(iv) intercompany Indebtedness (including, without limitation,
amounts owing under intercompany leases) owing between Subsidiaries;
and
57
(v) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Unmatured Event of Default under any provision of Articles
VIII and IX; provided, however, that (A) the Borrower shall not, and
shall not permit any of its Subsidiaries to, guarantee or otherwise
become or remain directly or indirectly liable with respect to the
Indebtedness of any Investment Affiliate, and (B) Borrower shall not
permit any Subsidiary to create, incur, assume or otherwise become or
remain directly or indirectly liable with respect to, any Recourse
Indebtedness in excess of Ten Million Dollars ($10,000,000) per
Subsidiary at any time or Thirty Million Dollars ($30,000,000) in the
aggregate for all Subsidiaries at any time.
(b) Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and
remain outstanding pursuant to Section 8.01(a)(iv) and (v).
(c) Investments. Borrower shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly make or own any Investment
except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Holdings;
(iii) Investments in Subsidiaries and Investment Affiliates
owned as of the Closing Date;
(iv) Investments permitted pursuant to Section 8.01(e)(v).
(v) Controlled Ownership Interests which do not constitute
Non-Designated Use Property; and
(vi) mortgage loans which do not constitute Non-Designated Use
Property and which are either eliminated in the consolidation of the
REIT, Borrower and the Subsidiaries or are accounted for as investments
in real estate under GAAP.
(d) Distributions and Dividends. None of Borrower, the REIT or
MHC Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of ninety-five percent (95%) of Funds From
Operations in any Fiscal Year; provided, however, that if an Event of Default
under Section 10.01(a) shall have occurred, none of Borrower, the REIT or MHC
Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of what is required for the REIT to maintain its
status as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code.
58
(e) Restrictions on Fundamental Changes. Except as provided in
Section 8.01(e)(vi) below:
(i) Other than the merger described in the definition of
Thousand Trails Transaction, Borrower shall not, and shall not permit
any of its Subsidiaries to, enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution), or discontinue its
business.
(ii) Borrower shall remain a limited partnership with MHC
Trust as its sole general partner.
(iii) Borrower shall not change its Fiscal Year.
(iv) Except for Permitted Holdings and other Investments
permitted under Section 8.01(c), Borrower shall not engage in any line
of business other than ownership, operation, management and development
of Designated Use Properties and the provision of services incidental
thereto and the brokerage, purchase, and sale of manufactured home
units, whether directly or through its Subsidiaries and Investment
Affiliates.
(v) Borrower shall not acquire by purchase or otherwise all or
substantially all of the business, property or assets of, or stock or
other evidence of beneficial ownership of, any Person, unless after
giving effect thereto, Borrower is in pro forma compliance with this
Agreement.
(vi) Notwithstanding the foregoing, or anything to the
contrary set forth herein, so long as Borrower, MHC Trust, T1000 Trust
and the REIT at all times remain in compliance with all of the terms
and conditions of this Agreement, including, without limitation, those
contained in Articles VI, VII, VIII and IX, and no Event of Default or
Unmatured Event of Default exists at the time of or would arise as a
result thereof, the following transfers are permitted: (1) transfers of
securities issued by the REIT that are effected on the New York Stock
Exchange or American Stock Exchange, (2) direct or indirect transfers
of interests in any Subsidiary (the "Transferred Subsidiary") among
Borrower, the REIT or any other Subsidiary, so long as the Transferred
Subsidiary remains a Subsidiary after such transfer or transfers, (3)
transfers or issuance of limited partnership interests in Borrower,
provided that MHC Trust remains the sole general partner of Borrower,
(4) the sale of less than $500,000 of preferred interests in MHC Trust
and/or T1000 Trust to unrelated individuals to allow each of MHC Trust
and T1000 Trust to have at least 100 shareholders and qualify as a real
estate investment trust under the Internal Revenue Code, (5) the merger
(or similar transaction) of the REIT, MHC Trust, T1000 Trust or
Borrower, so long as the REIT, MHC Trust, T1000 Trust or Borrower, as
applicable, is the surviving entity and (6) the dissolution of
Subsidiaries in the ordinary course of business. At least fifteen (15)
days prior to any transaction permitted under clause (5) above,
Borrower shall provide Agent and the Lenders with written notice of
such merger (or similar transaction) accompanied by a compliance
certificate demonstrating in reasonable detail (which detail shall
include actual calculations) compliance with the financial covenants
contained in Sections 8.01(a),
59
8.01(d) and 8.02(a) and Article IX both before and, on a pro forma
basis, after giving effect to such merger (or similar transaction).
(f) ERISA. Neither Borrower nor the REIT shall, and neither
shall permit any Subsidiary or any of their ERISA Affiliates to, do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in a
Material Adverse Effect:
(i) Engage, or knowingly permit a Subsidiary or an ERISA
Affiliate to engage, in any prohibited transaction described in Section
406 of ERISA or Section 4975 of the Internal Revenue Code which is not
exempt under Section 407 or 408 of ERISA or Section 4975(d) of the
Internal Revenue Code for which a class exemption is not available or a
private exemption has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not waived;
(iii) Fail, or permit a Subsidiary or an ERISA Affiliate of
the REIT, Borrower or any Subsidiary to fail, to pay timely required
contributions or annual installments due with respect to any waived
funding deficiency to any Plan if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(iv) Terminate, or permit an ERISA Affiliate of the REIT,
Borrower or any Subsidiary to terminate, any Benefit Plan which would
result in any liability of Borrower or a Subsidiary or an ERISA
Affiliate of the REIT, Borrower or any Subsidiary under Title IV of
ERISA;
(v) Fail, or permit any Subsidiary or ERISA Affiliate to fail
to pay any required installment under section (m) of Section 412 of the
Internal Revenue Code or any other payment required under Section 412
of the Internal Revenue Code on or before the due date for such
installment or other payment, if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(vi) Permit to exist any Termination Event;
(vii) Make, or permit a Subsidiary or an ERISA Affiliate of
the REIT, Borrower or any Subsidiary to make, a complete or partial
withdrawal (within the meaning of ERISA Section 4201) from any
Multiemployer Plan so as to result in liability to Borrower, a
Subsidiary or any ERISA Affiliate of the REIT, Borrower or any
Subsidiary which would have a Material Adverse Effect; or
(viii) Permit the total Unfunded Pension Liabilities (using
the actuarial assumptions utilized by the PBGC) for all Benefit Plans
(other than Benefit Plans which have no Unfunded Pension Liabilities)
to have a Material Adverse Effect.
None of the REIT, Borrower nor any Agreement Party shall use any "assets"
(within the meaning of ERISA or Section 4975 of the Internal Revenue Code,
including but not limited to 29
60
C.F.R. Section 2510.3-101 or any successor regulation thereto) of an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code to repay or secure
the Obligations if the use of such assets may result in a prohibited transaction
under ERISA or the Internal Revenue Code (which is not exempt from the
restrictions of Section 406 of ERISA and Section 4975 of the Internal Revenue
Code and the taxes and penalties imposed by Section 4975 of the Internal Revenue
Code and Section 502(i) of ERISA) or in a Lender, Agent or the Lenders being
deemed in violation of Section 404 or 406 of ERISA or Section 4975 of the
Internal Revenue Code or otherwise by itself results in or will result in a
Lender, Agent or the Lenders being a fiduciary or party in interest under ERISA
or a "disqualified person" as defined in Section 4975 (e) (2) of the Internal
Revenue Code with respect to an "employee benefit plan" within the meaning of
Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code. Without limitation of any other provision of this
Agreement, none of the REIT, Borrower or any Agreement Party shall assign, sell,
pledge, encumber, transfer, hypothecate or otherwise dispose of their respective
interests or rights (direct or indirect) in any Loan Document, or attempt to do
any of the foregoing or suffer any of the foregoing, or permit any party with a
direct or indirect interest or right in any Loan Document to do any of the
foregoing, nor shall the REIT, MHC Trust or Borrower assign, sell, pledge,
encumber, transfer, hypothecate or otherwise dispose of any of their respective
rights or interests (direct or indirect) in any Agreement Party, Borrower or the
REIT, as applicable, or attempt to do any of the foregoing or suffer any of the
foregoing, if such action would cause the Obligations, or the exercise of any of
the Agent's or Lenders' rights in connection therewith, to constitute a
prohibited transaction under ERISA or the Internal Revenue Code (unless Borrower
furnishes to Agent a legal opinion reasonably satisfactory to Agent that the
transaction is exempt from the prohibited transaction provisions of ERISA and
the Internal Revenue Code (for this purpose, Agent and the Lenders agree to
supply Borrower all relevant non-confidential factual information reasonably
necessary to such legal opinion and reasonably requested by Borrower)) or
otherwise results in a Lender, Agent or the Lenders being deemed in violation of
Sections 404 or 406 of ERISA or Section 4975 of the Internal Revenue Code or
otherwise by itself would result in a Lender, Agent or the Lenders being a
fiduciary or party in interest under ERISA or a "disqualified person" as defined
in Section 4975(e)(2) of the Internal Revenue Code with respect to an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code.
(g) Environmental Liabilities. Borrower shall not, and shall
not permit any of its Subsidiaries to, become subject to any Liabilities and
Costs which would have a Material Adverse Effect arising out of or related to
(i) the Release or threatened Release of any Contaminant into the environment,
or any Remedial Action in response thereto, or (ii) any violation of any
Environmental Laws. Notwithstanding the foregoing provision, Borrower and its
Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) Borrower
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject Borrower or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or
61
its condition or prospects shall be in imminent danger of being sold, forfeited
or lost, by reason of such contest or the continued existence of the matter
being contested.
(h) Amendment of Constituent Documents. Borrower shall not
permit any amendment of its limited partnership agreement, certificate of
limited partnership or by-laws, if any, which would materially and adversely
affect Agent or Lenders or their respective rights and remedies under the Loan
Documents.
(i) Disposal of Interests. Except as permitted under Section
8.01(e)(vi)(4), Borrower will not directly or indirectly convey, sell, transfer,
assign, pledge or otherwise encumber or dispose of any material portion of its
partnership interests, stock or other ownership interests in any Subsidiary or
other Person in which it has an interest unless Borrower has delivered to Agent
a Compliance Certificate showing on a pro forma basis (calculated in a manner
reasonably acceptable to Agent) that there would be no breach of any of the
financial covenants contained in Articles VIII and XI after giving effect to
such conveyance, sale, transfer, assignment, pledge, or other encumbrance or
disposition.
(j) Margin Regulations. No portion of the proceeds of any
credit extended under this Agreement shall be used in any manner which might
cause the extension of credit or the application of such proceeds to violate
Regulation U or Regulation X or any other regulation of the Federal Reserve
Board or to violate the Securities Exchange Act or the Securities Act, in each
case as in effect on the Closing Date and of such use of proceeds.
(k) Transactions with Affiliates. Borrower shall not and shall
not permit any of its Subsidiaries to enter into, any transaction or series of
related transactions with any Affiliate of Borrower, other than transactions in
the ordinary course of business which are on terms and conditions substantially
as favorable to Borrower or such Subsidiary as would be obtainable by Borrower
or such Subsidiary in an arms-length transaction with a Person other than an
Affiliate.
8.02 With respect to the REIT:
(a) Indebtedness. The REIT shall not, and shall not permit any
of its Subsidiaries to, directly or indirectly, create, incur, assume or
otherwise become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; the "Obligations" under the Syndicated
Revolving Credit Agreement; and the "Obligations" under the WFB
Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section
8.02(a)(i); and
(iii) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Unmatured Event of Default under any provision of Articles
VIII and IX; provided, however, that (A) the REIT shall not, and shall
not permit any of its Subsidiaries to, guarantee or otherwise become or
remain directly or indirectly liable with respect to the Indebtedness
of any Investment Affiliate, and (B) the REIT shall not permit any
Subsidiary to create, incur, assume or otherwise become or remain
directly or indirectly liable with respect to, any
62
Recourse Indebtedness in excess of Ten Million Dollars ($10,000,000)
per Subsidiary at any time or Thirty Million Dollars ($30,000,000) in
the aggregate for all Subsidiaries at any time.
(b) Liens. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and
remain outstanding pursuant to Section 8.02(a)(ii) and (iii).
(c) Restriction on Fundamental Changes. Except as provided in
Section 8.02(c)(vi) below:
(i) The REIT shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution) or discontinue its business.
(ii) The REIT shall not change its Fiscal Year.
(iii) The REIT shall not engage in any line of business other
than owning interests in MHC Trust and the interests identified on
Schedule 5.01(w) as being owned by the REIT and any other ownership
interests in Subsidiaries and Investment Affiliates which are permitted
under the terms of Borrower's partnership agreement.
(iv) The REIT shall not have an Investment in any Person other
than MHC Trust and the interests identified on Schedule 5.01(w) as
being owned by the REIT and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the
terms of Borrower's partnership agreement.
(v) The REIT shall not acquire an interest in any Property
other than Securities issued by MHC Trust or Borrower and the interests
identified on Schedule 5.01(w) and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the
terms of Borrower's partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary
set forth herein, so long as Borrower, MHC Trust, T1000 Trust and the
REIT at all times remain in compliance with all of the terms and
conditions of this Agreement, including, without limitation, those
contained in Articles VI, VII, VIII and IX, and no Event of Default or
Unmatured Event of Default exists at the time of or would arise as a
result thereof, the following transfers are permitted: (1) transfers of
securities issued by the REIT that are effected on the New York Stock
Exchange or American Stock Exchange, (2) direct or indirect transfers
of interests in any Subsidiary (the "Transferred Subsidiary") among
Borrower, the REIT or any other Subsidiary, so long as the Transferred
Subsidiary remains a Subsidiary after such transfer or transfers, (3)
transfers or issuance of limited
63
partnership interests in Borrower, provided that MHC Trust remains the
sole general partner of Borrower, (4) the sale of less than $500,000 of
preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least
100 shareholders and qualify as a real estate investment trust under
the Internal Revenue Code, (5) the merger (or similar transaction) of
the REIT, MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC
Trust, T1000 Trust or Borrower, as applicable, is the surviving entity,
and (6) the dissolution of Subsidiaries in the ordinary course of
business. At least fifteen (15) days prior to any transaction permitted
under clause (5) above, the REIT shall provide Agent and the Lenders
with written notice of such merger (or similar transaction) accompanied
by a compliance certificate demonstrating in reasonable detail (which
detail shall include actual calculations) compliance with the financial
covenants contained in Sections 8.01(a), 8.01(d) and 8.02(a) and
Article IX both before and, on a pro forma basis, after giving effect
to such merger (or similar transaction).
(d) Environmental Liabilities. The REIT shall not, and shall
not permit any of its Subsidiaries to become subject to any Liabilities and
Costs which would have a Material Adverse Effect arising out of or related to
(i) the Release or threatened Release of any Contaminant into the environment,
or any Remedial Action in response thereto, or (ii) any violation of any
Environmental Laws. Notwithstanding the foregoing provision, the REIT and its
Subsidiaries shall have the right to contest in good faith any claim of
violation of an Environmental Law by appropriate legal proceedings and shall be
entitled to postpone compliance with the obligation being contested as long as
(i) no Event of Default shall have occurred and be continuing, (ii) the REIT
shall have given Agent prior written notice of the commencement of such contest,
(iii) noncompliance with such Environmental Law shall not subject the REIT or
such Subsidiary to any criminal penalty or subject Agent to pay any civil
penalty or to prosecution for a crime, and (iv) no portion of any Property
material to Borrower or its condition or prospects shall be in imminent danger
of being sold, forfeited or lost, by reason of such contest or the continued
existence of the matter being contested.
(e) Amendment of Charter or By-Laws. The REIT shall not permit
any amendment of its charter documents or by-laws, which would materially and
adversely affect Agent or Lenders or their respective rights and remedies under
the Loan Documents.
(f) Disposal of Partnership Interests. Except as permitted
under Section 8.02(c)(vi)(4) or as contemplated by Section 3.8 of Borrower's
partnership agreement, the REIT will not directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
interests in MHC Trust or Borrower.
(g) Maximum Ownership Interests. No Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act) (other
than Samuel Zell) shall beneficially acquire ownership (within the meaning of
Rule 13d-3 promulgated by the Commission under such Act), directly or
indirectly, of more than fifteen percent (15%) of the Securities which have the
right to elect the board of directors of the REIT under ordinary circumstances
on a combined basis, after giving effect to the conversion of any Convertible
Securities in the REIT, MHC Trust and Borrower.
64
8.03 With respect to MHC Trust:
(a) Restriction on Fundamental Changes. Except as provided in
Section 8.03(a)(vi) below:
(i) MHC Trust shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve
(or suffer any liquidation or dissolution) or discontinue its business.
(ii) MHC Trust shall not change its Fiscal Year.
(iii) MHC Trust shall not engage in any line of business other
than owning partnership interests in Borrower and the interests
identified on Schedule 5.01(w) as being owned by MHC Trust and any
other ownership interests in Subsidiaries and Investment Affiliates
which are permitted under the terms of Borrower's partnership
agreement.
(iv) MHC Trust shall not have an Investment in any Person
other than Borrower and the interests identified on Schedule 5.01(w) as
being owned by MHC Trust and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the
terms of Borrower's partnership agreement.
(v) MHC Trust shall not acquire an interest in any Property
other than Securities issued by Borrower and the interests identified
on Schedule 5.01(w) as being owned by MHC Trust and any other ownership
interests in Subsidiaries and Investment Affiliates which are permitted
under the terms of Borrower's partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary
set forth herein, so long as Borrower, MHC Trust, T1000 Trust and the
REIT at all times remain in compliance with all of the terms and
conditions of this Agreement, including, without limitation, those
contained in Articles VI, VII, VIII and IX, and no Event of Default or
Unmatured Event of Default exists at the time of or would arise as a
result thereof, the following transfers are permitted: (1) transfers of
securities issued by the REIT that are effected on the New York Stock
Exchange or American Stock Exchange, (2) direct or indirect transfers
of interests in any Subsidiary (the "Transferred Subsidiary") among
Borrower, the REIT or any other Subsidiary, so long as the Transferred
Subsidiary remains a Subsidiary after such transfer or transfers, (3)
transfers or issuance of limited partnership interests in Borrower,
provided that MHC Trust remains the sole general partner of Borrower,
(4) the sale of less than $500,000 of preferred interests in MHC Trust
and/or T1000 Trust to unrelated individuals to allow each of MHC Trust
and T1000 Trust to have at least 100 shareholders and qualify as a real
estate investment trust under the Internal Revenue Code, (5) the merger
(or similar transaction) of the REIT, MHC Trust, T1000 Trust or
Borrower, so long as the REIT, MHC Trust, T1000 Trust or Borrower, as
applicable, is the surviving entity and (6) the dissolution of
Subsidiaries in the ordinary course of business. At least fifteen (15)
days prior to any transaction permitted under clause (5) above, MHC
Trust shall provide Agent and the Lenders with written notice of such
merger (or similar transaction) accompanied by a compliance
65
certificate demonstrating in reasonable detail (which detail shall
include actual calculations) compliance with the financial covenants
contained in Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX both
before and, on a pro forma basis, after giving effect to such merger
(or similar transaction).
(b) Amendment of Charter or By-Laws. MHC Trust shall not
permit any amendment of its charter documents or by-laws, which would materially
and adversely affect Lenders or their rights and remedies under the Loan
Documents.
(c) Disposal of Partnership Interests. Except as permitted
under Section 8.03(a)(vi)(4) or as contemplated by Section 3.8 of Borrower's
partnership agreement, MHC Trust will not directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
partnership interests in Borrower.
8.04 With respect to T1000 Trust: Other than the merger
described in the definition of Thousand Trails Transaction, T1000 Trust shall
not enter into any merger, consolidation, reorganization or recapitalization or
liquidate, wind-up or dissolve (or suffer any liquidation or dissolution) or
discontinue its business. Notwithstanding the foregoing or anything to the
contrary set forth herein, so long as Borrower, MHC Trust, T1000 Trust and the
REIT at all times remain in compliance with all of the terms and conditions of
this Agreement, including, without limitation, those contained in Articles VI,
VII, VIII and IX, and no Event of Default or Unmatured Event of Default exists
at the time of or would arise as a result thereof, the following transfers are
permitted: the merger (or similar transaction) of the REIT, MHC Trust, T1000
Trust or Borrower, so long as the REIT, MHC Trust, T1000 Trust or Borrower, as
applicable, is the surviving entity. At least fifteen (15) days prior to any
transaction permitted under the immediately preceding sentence, T1000 Trust
shall provide Agent and the Lenders with written notice of such merger (or
similar transaction) accompanied by a compliance certificate demonstrating in
reasonable detail (which detail shall include actual calculations) compliance
with the financial covenants contained in Sections 8.01(a), 8.01(d) and 8.02(a)
and Article IX both before and, on a pro forma basis, after giving effect to
such merger (or similar transaction).
ARTICLE IX.
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of
this Agreement and until payment in full of all the Obligations, the expiration
of all Commitments and the termination of this Agreement:
9.01 Total Liabilities to Gross Asset Value. Borrower shall
not permit the ratio of Total Liabilities to the sum of Gross Asset Values for
Borrower and each of its Subsidiaries to exceed 0.7:1.
9.02 EBITDA to Fixed Charges Ratio. Borrower shall not permit
the ratio of EBITDA for any twelve (12) calendar month period to Fixed Charges
for such twelve (12) calendar month period to be less than 1.40:1.
66
9.03 Unencumbered Net Operating Income to Unsecured Interest
Expense. Borrower shall not permit the ratio of Unencumbered Net Operating
Income for any Fiscal Quarter to Unsecured Interest Expense for such Fiscal
Quarter to be less than 1.80:1.
9.04 Unencumbered Pool. Borrower shall not permit the ratio of
(a) the Unencumbered Asset Value to (b) outstanding Unsecured Debt to be less
than 1.35:1.
9.05 Minimum Net Worth. Borrower will maintain a Net Worth of
not less than the Minimum Net Worth.
9.06 Permitted Holdings. Borrower's primary business will be
the ownership, operation, management and development of Designated Use
Properties and any other business activities of Borrower and its Subsidiaries
will remain incidental thereto. Notwithstanding the foregoing, Borrower and its
Subsidiaries may acquire, or maintain or engage in the following Permitted
Holdings if and so long as (i) the aggregate value of such Permitted Holdings,
whether held directly or indirectly by Borrower and its Subsidiaries, does not
exceed, at any time, twenty percent (20%) of Gross Asset Value for Borrower as a
whole and (ii) the value of each such Permitted Holding, whether held directly
or indirectly by Borrower and its Subsidiaries, does not exceed, at any time,
the following percentages of Borrower's Gross Asset Value:
Maximum Percentage
Permitted Holdings of Gross Asset Value
- ------------------ --------------------
Non-Designated Use Property (other than cash or Cash Equivalents) 10%
Securities issued by real estate investment trusts primarily engaged in the 5%
development, ownership, operation and management of Designated Use Properties
Designated Use Property Mortgages other than mortgage indebtedness which is 10%
either eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or accounted for as investments in real estate under GAAP
Designated Use Property Ownership Interests other than Controlled Ownership 10%
Interests
Development Activity 20%
The value of the foregoing categories of Permitted Holdings shall be calculated
as follows: (i) the value of any Non-Designated Use Property (other than cash or
Cash Equivalents) or any Designated Use Property Ownership Interest (other than
a Controlled Ownership Interest) shall be calculated based upon its Adjusted
Asset Value; (ii) the value of any Security issued by a real estate investment
trust primarily engaged in the development, ownership, operation and management
of Designated Use Properties shall be equal to the lesser of (A) the acquisition
cost thereof or (B) the current market value thereof (such market value to be
determined in a manner
67
reasonably acceptable to Agent); (iii) [intentionally deleted]; (iv) the value
of any Designated Use Property Mortgage (other than mortgage indebtedness which
is either eliminated in the consolidation of the REIT, Borrower and the
Subsidiaries or accounted for as an investment in real estate under GAAP) shall
be equal to the book value thereof; (v) the value of Development Activity by
Borrower or any Subsidiary shall be equal to the full budgeted cost thereof; and
(vi) the value of any Development Activity by an Investment Affiliate shall be
equal to the greater of (A) Borrower's pro rata share of the full budgeted cost
thereof based upon its percentage of equity ownership, or (B) Borrower's pro
rata share of the full budgeted cost thereof based upon Borrower's economic
interest in the project (as determined by Borrower in a manner reasonably
satisfactory to Agent).
9.07 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times. Calculations of such ratios for a "twelve (12)
calendar month period" shall be made for the twelve (12) calendar month period
ending on the last day of the applicable Fiscal Quarter.
ARTICLE X.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01 Events of Default.Each of the following occurrences
shall constitute an Event of Default under this Agreement:
(a) Failure to Make Payments When Due. (i) The failure to pay
in full any amount due on the Termination Date; (ii) the failure to pay in full
any principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Agent has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Agent shall have given
Borrower written notice that Agent has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Agent or to
some other Person, within ten (10) days after Agent gives Borrower written
notice that such payment is due and unpaid.
(b) Dividends. Borrower, MHC Trust or the REIT shall breach
the covenant set forth in Section 8.01(d).
(c) Breach of Financial Covenants. Borrower shall fail to
satisfy any covenant set forth in Article IX and such failure shall continue for
forty (40) days after Borrower's knowledge thereof.
(d) Other Defaults. Borrower, the REIT or any Agreement Party
shall fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower, the REIT or any Agreement Party under this
Agreement or under any of the other Loan Documents (other than as described in
Section 7.01(e) or Sections 10.01(a), (b), (c), (e), (g) or (p)), and such
failure shall continue for thirty (30) days after written notice from Agent to
68
Borrower, the REIT or any Agreement Party (or (i) such lesser period of time as
is mandated by applicable Requirements of Law or (ii) such longer period of time
(but in no case more than ninety (90) days) as is reasonably required to cure
such failure if Borrower, the REIT, or such Agreement Party commences such cure
within such ninety (90) days and diligently pursues the completion thereof).
(e) Breach of Representation or Warranty. Any representation
or warranty made or deemed made by Borrower, the REIT or any Agreement Party to
Agent or any Lender herein or in any of the other Loan Documents or in any
statement, certificate or financial statements at any time given by Borrower
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made and, with respect to any such
representation or warranty not known by Borrower at the time made or deemed made
to be false or misleading, the defect causing such representation or warranty to
be false or misleading is not removed within thirty (30) days after written
notice thereof from Agent to Borrower.
(f) Default as to Other Indebtedness. Borrower, the REIT, any
Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Subsidiary), together with the aggregate amount of any
Other Indebtedness (other than Non-Recourse Indebtedness) of Borrower, the REIT,
any Subsidiary or any Investment Affiliate which has theretofore been
accelerated (to the extent of any recourse to Borrower, the REIT or any
Subsidiary) is $10,000,000 or more.
(g) Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) An involuntary case or other proceeding shall be commenced
against the REIT, Borrower, any Subsidiary, or any Agreement Party and
the petition shall not be dismissed within sixty (60) days after
commencement of the case, or a court having jurisdiction shall enter a
decree or order for relief in respect of the REIT, Borrower, any
Subsidiary, or any Agreement Party, as the case may be, in an
involuntary case or other proceeding, under any applicable bankruptcy,
insolvency or other similar law now or hereafter in effect; or any
other similar relief shall be granted under any applicable federal,
state or foreign law; or
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over
Borrower, the REIT, any Subsidiary, or any Agreement Party, or over all
or a substantial part of the property of the REIT, Borrower, any
Subsidiary, or any Agreement Party shall be entered, or an interim
receiver, trustee or other custodian of the REIT, Borrower, any
Subsidiary, or any Agreement Party, or of all or a substantial part of
the property of the REIT, Borrower, any Subsidiary, or any Agreement
Party shall be appointed or a warrant of attachment, execution or
similar process against any substantial part of the property of the
REIT, Borrower, any Subsidiary, or any Agreement Party shall be issued
and any such event shall not be stayed, vacated, dismissed, bonded or
discharged within sixty (60) days of entry, appointment or issuance.
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(h) Voluntary Bankruptcy; Appointment of Receiver, etc. The
REIT, Borrower, any Subsidiary, or any Agreement Party shall have an order for
relief entered with respect to it or commence a voluntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter in
effect, or shall consent to the entry of an order for relief in an involuntary
case, or to the conversion of an involuntary case to a voluntary case, under any
such law, or shall consent to the appointment of or taking of possession by a
receiver, trustee or other custodian for all or a substantial part of its
property; the REIT, Borrower, any Subsidiary, or any Agreement Party shall make
any assignment for the benefit of creditors or shall be unable or fail, or admit
in writing its inability, to pay its debts as such debts become due; or the
general partner(s) or Board of Directors (or any committee thereof), as
applicable, of the REIT, Borrower, any Subsidiary, or any Agreement Party adopts
any resolution or otherwise authorizes any action to approve any of the
foregoing.
(i) Judgments and Attachments. (i) Any money judgments (other
than a money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writs or warrants of attachment,
or similar processes involving an aggregate amount in excess of $5,000,000 shall
be entered or filed against the REIT, Borrower, any Subsidiary, or any Agreement
Party or their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days, or (ii) any judgment or
order of any court or administrative agency awarding material damages shall be
entered against the REIT, Borrower, any Subsidiary, or any Agreement Party in
any action under the Federal securities laws seeking rescission of the purchase
or sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all available
appellate remedies and such judgment or order would have a Material Adverse
Effect.
(j) Dissolution. Any order, judgment or decree shall be
entered against the REIT, Borrower, or any Agreement Party decreeing its
involuntary dissolution or split up and such order shall remain undischarged and
unstayed for a period in excess of thirty (30) days; or the REIT, Borrower, or
any Agreement Party shall otherwise dissolve or cease to exist.
(k) Loan Documents; Failure of Security or Subordination. Any
Loan Document shall cease to be in full force and effect or any Obligation shall
be subordinated or shall not have the priority contemplated by this Agreement or
the Loan Documents for any reason or any guarantor under any guaranty of all or
any portion of the Obligations shall at any time disavow or deny liability under
such guaranty in writing.
(l) ERISA Plan Assets. Any assets of Borrower, the REIT or any
Agreement Party shall constitute "assets" (within the meaning of 29 C.F.R.
Section 2510.3-101 or any successor regulation thereto) of an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT or any
Agreement Party shall be an "employee benefit plan" as defined in Section 3(3)
of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of
ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.
(m) ERISA Prohibited Transaction. The Obligations, any of the
Loan Documents or the exercise of any of the Agent's or Lenders' rights in
connection therewith shall constitute a prohibited transaction under ERISA
and/or the Internal Revenue Code (which is not
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exempt from the restrictions of Section 406 of ERISA or Section 4975 of the
Internal Revenue Code and the taxes and penalties imposed by Section 4975 of the
Internal Revenue Code and Section 502(i) of ERISA).
(n) ERISA Liabilities. (i) Any Termination Event occurs which
will or is reasonably likely to subject Borrower, the REIT, any Subsidiary, any
Agreement Party, any ERISA Affiliate thereof or any of them to a liability which
Agent reasonably determines will have a Material Adverse Effect; (ii) the plan
administrator of any Benefit Plan applies for approval under Section 412(d) of
the Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and Agent reasonably determines that
the business hardship upon which the Section 412(d) waiver request was based
will or would reasonably be anticipated to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to a liability which Agent reasonably determines will have a Material Adverse
Effect; (iii) any Benefit Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver shall not have been obtained in accordance with the
applicable provisions of the Internal Revenue Code or ERISA which "accumulated
funding deficiency" will or would reasonably be anticipated to subject Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to a liability which the Agent reasonably determines will have a
Material Adverse Effect; (iv) Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them shall have engaged in a
transaction which is prohibited under Section 4975 of the Internal Revenue Code
or Section 406 of ERISA which will or would reasonably be anticipated to result
in the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Agent
reasonably determines will have a Material Adverse Effect; (v) Borrower, the
REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them shall fail to pay when due an amount which it shall have become liable
to pay to the PBGC, a Plan or a trust established under Title IV of ERISA which
failure will or would reasonably be anticipated to result in the imposition of a
liability on Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them which the Agent reasonably determines
will have a Material Adverse Effect; (vi) a condition shall exist by reason of
which the PBGC would be entitled to obtain a decree adjudicating that a Benefit
Plan must be terminated or have a trustee appointed to administer such Plan
which condition will or would reasonably be anticipated to result in the
imposition of a liability on Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them which the Agent reasonably
determines will have a Material Adverse Effect; (vii) a Lien shall be imposed on
any assets of Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them in favor of the PBGC or a Plan which the
Agent reasonably determines will have a Material Adverse Effect; (viii)
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them shall suffer a partial or complete withdrawal from a
Multiemployer Plan or shall be in "default" (as defined in Section 4219(c)(5) of
ERISA) with respect to payments to a Multiemployer Plan resulting from a
complete or partial withdrawal (as described in Section 4203 or 4205 of ERISA)
from such Multiemployer Plan which will or would reasonably be anticipated to
result in the imposition of a liability on Borrower, the REIT, any Subsidiary,
any Agreement Party, or any ERISA Affiliate thereof or any of them which the
Agent reasonably determines will have a
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Material Adverse Effect; or (ix) a proceeding shall be instituted by a fiduciary
of any Multiemployer Plan against Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them to enforce
Section 515 of ERISA which will or would reasonably be anticipated to result in
the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Agent
reasonably determines will have a Material Adverse Effect.
(o) Solvency. Borrower, any Agreement Party or the REIT shall
cease to be Solvent.
(p) Board of Directors. During any 12-month period,
individuals who were directors of the REIT on the first day of such period shall
not constitute a majority of the board of directors of the REIT.
(q) Syndicated Revolving Credit Agreement. An "Event of
Default" as defined in the Syndicated Revolving Credit Agreement shall have
occurred.
(r) WFB Revolving Credit Agreement. An "Event of Default" as
defined in the WFB Revolving Credit Agreement shall have occurred.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 12.05.
10.02 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of Default
with respect to Borrower described in the foregoing Section 10.01(g) or
10.01(h), the unpaid principal amount of and any and all accrued interest on the
Loan and all of the other Obligations shall automatically become immediately due
and payable, with all additional interest from time to time accrued thereon and
without presentment, demand or protest or other requirements of any kind
(including without limitation valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate or notice of
acceleration), all of which are hereby expressly waived by Borrower, and the
obligations of Lenders to make, continue or convert any portion of the Loan
hereunder shall thereupon terminate; and upon the occurrence and during the
continuance of any other Event of Default, Agent shall, at the request of, or
may, with the consent of, Requisite Lenders, by written notice to Borrower,
declare the unpaid principal amount of and any and all accrued and unpaid
interest on the Loan and all of the other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower. Upon
the occurrence of and during the continuance of an Event of Default, no
Agreement Party shall be permitted to make any distributions or dividends
without the prior written consent of Agent. Upon the occurrence of an Event of
Default or an acceleration of the Obligations, Agent and Lenders may exercise
all or any portion of the rights and remedies set forth in the Loan Documents.
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(b) Access to Information. Notwithstanding anything to the
contrary contained in the Loan Documents, upon the occurrence of and during the
continuance of an Event of Default, Agent shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.
(c) Waiver of Demand. Demand, presentment, protest and notice
of nonpayment are hereby waived by Borrower.
(d) Waivers, Amendments and Remedies. No delay or omission of
Agent or Lenders to exercise any right under any Loan Document shall impair such
right or be construed to be a waiver of any Event of Default or an acquiescence
therein, and 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 a writing signed by Agent
after obtaining written approval thereof or the signature thereon of those
Lenders required to approve such waiver, amendment or other variation, 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 Agent and Lenders until the Obligations have been paid in
full, the Commitments have expired or terminated and this Agreement has been
terminated.
10.03 Rescission.If at any time after acceleration of the
maturity of the Loan, Borrower shall pay all arrears of interest and all
payments on account of principal of the Loan which shall have become due
otherwise than by acceleration (with interest on principal and, to the extent
permitted by law, on overdue interest, at the rates specified in this Agreement)
and all Events of Default and Unmatured Events of Default (other than nonpayment
of principal of and accrued interest on the Loan due and payable solely by
virtue of acceleration) shall be remedied or waived pursuant to Section 12.05,
then by written notice to Borrower, Requisite Lenders may elect, in the sole
discretion of Requisite Lenders to rescind and annul the acceleration and its
consequences; but such action shall not affect any subsequent Event of Default
or Unmatured Event of Default or impair any right or remedy in connection
therewith. The provisions of the preceding sentence are intended merely to bind
Lenders to a decision which may be made at the election of Requisite Lenders;
they are not intended to benefit Borrower and do not give Borrower the right to
require Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE XI.
AGENCY PROVISIONS
11.01 Appointment.
(a) Each Lender hereby designates and appoints Wells Fargo as
Agent of such Lender under this Agreement and the Loan Documents, and each
Lender hereby irrevocably authorizes Agent to take such action, as contractual
representative, on its behalf under the provisions of this Agreement and the
Loan Documents and to exercise such powers as are set
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forth herein or therein, together with such other powers as are reasonably
incidental thereto. Agent agrees to act as such on the express conditions
contained in this Article XI.
(b) The provisions of this Article XI are solely for the
benefit of Agent and Lenders, and Borrower shall not have any rights to rely on
or enforce any of the provisions hereof. In performing its functions and duties
under this Agreement, Agent shall act solely as Agent of Lenders and does not
assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower.
11.02 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature. Subject
to the provisions of Sections 11.05 and 11.07, Agent shall administer the Loan
in the same manner as it administers its own loans. Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied, is
intended or shall be construed to impose upon Agent any obligation in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the REIT, Borrower, the Subsidiaries, the
Investment Affiliates, and each Agreement Party in connection with the making
and the continuance of the Loan hereunder and shall make its own assessment of
the creditworthiness of the REIT, Borrower, the Subsidiaries, the Investment
Affiliates, and each Agreement Party, and, except as specifically provided
herein, Agent shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter.
11.03 Loan Continuation/Conversion.
(a) Promptly after receipt of a Notice of
Continuation/Conversion for a portion of the Loan to be made pursuant to Section
2.01, but in no event later than two (2) Business Days prior to the proposed
Continuation/Conversion Date for the continuation of a LIBOR Loan or the
conversion of a Base Rate Loan into a LIBOR Loan, Agent shall notify, by
telecopy, each Lender of the proposed continuation/conversion and the
Continuation/Conversion Date set forth therein. Each Lender shall make available
to Agent (or the funding bank or entity designated by Agent), the amount of such
Lender's Pro Rata Share of the Loan in immediately available funds not later
than the times designated in Section 11.03(b). Unless Agent shall have been
notified by any Lender prior to such time for funding in respect of the Loan
that such Lender does not intend to make available to Agent such Lender's Pro
Rata Share of the Loan, Agent may assume that such Lender has made such amount
available to Agent and Agent, in its sole discretion, may, but shall not be
obligated to, make available to Borrower a corresponding amount. If such
corresponding amount is not in fact made available to Agent by such Lender on or
prior to the Closing Date, such Lender agrees to pay to Agent forthwith on
demand such corresponding amount together with interest thereon, for each day
from the date such amount is made available to Borrower until the date such
amount is paid or repaid to Agent, at the Federal Funds Rate. If such Lender
shall pay to Agent
74
such corresponding amount, such amount so paid shall constitute such Lender's
Pro Rata Share of the Loan. If such Lender shall not pay to Agent such
corresponding amount after reasonable attempts are made by Agent to collect such
amounts from such Lender, Borrower agrees to repay to Agent forthwith on demand
such corresponding amount together with interest thereon, for each day from the
date such amount is made available to Borrower until the date such amount is
repaid to Agent, at the interest rate applicable thereto.
(b) Each Lender shall make the amount of its Pro Rata Share of
the Loan available to Agent in Dollars and in immediately available funds, to
such bank and account, in El Segundo, California as Agent may designate, not
later than 10:00 A.M. (California time) on the Closing Date. Nothing in this
Section 11.03(b) shall be deemed to relieve any Lender of its obligation
hereunder to deliver its Pro Rata Share of the Loan on the Closing Date, nor
shall any Lender be responsible for the failure of any other Lender to perform
its obligations to deliver its Pro Rata Share of the Loan hereunder, and the
Commitment of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to deliver its Pro Rata Share of the Loan as
required by this Section 11.03.
11.04 Distribution and Apportionment of Payments. Payments
actually received by Agent for the account of Lenders shall be paid to them
promptly after receipt thereof by Agent, but in any event prior to 3:00 P.M.
(California time) on the day of receipt (if received by 11:00 A.M. (California
time) on such day), or within one (1) Business Day thereafter (if received after
11:00 A.M. (California time) on the day of receipt), provided that Agent shall
pay to such Lenders interest thereon at the Federal Funds Rate from the Business
Day on which such funds are required to be paid to Lenders by Agent until such
funds are actually paid in immediately available funds to such Lenders. All
payments of principal and interest in respect of the outstanding Loan, all
payments of the fees described in this Agreement (other than agency and
arrangement fees described in Section 2.04(c)), and all payments in respect of
any other Obligations shall be allocated among such of Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein. Agent shall promptly, but in any event within two (2) Business
Days (with interest thereon, if required pursuant to this Section 11.04(a)),
distribute to each Lender at its primary address set forth on the appropriate
counterpart signature page hereof or on the Assignment and Assumption, or at
such other address as a Lender may request in writing, such funds as it may be
entitled to receive, provided that Agent shall in any event not be bound to
inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender and may suspend all payments and seek appropriate
relief (including without limitation instructions from Requisite Lenders, or all
Lenders, as applicable, or an action in the nature of interpleader) in the event
of any doubt or dispute as to any apportionment or distribution contemplated
hereby. The order of priority herein is set forth solely to determine the rights
and priorities of Lenders as among themselves and may at any time or from time
to time be changed by Lenders as they may elect, in writing in accordance with
Section 12.05, without necessity of notice to or consent of or approval by
Borrower or any other Person.
11.05 Rights, Exculpation, Etc. Neither Agent, any Affiliate
of Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Agent shall be liable for its gross
negligence or willful misconduct in the performance of its express obligations
hereunder. In the
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absence of gross negligence or willful misconduct, Agent shall not be liable for
any apportionment or distribution of payments made by it in good faith pursuant
to Section 11.04. Agent shall not be responsible to any Lender for any recitals,
statements, representations or warranties herein or for the execution,
effectiveness, genuineness, validity, enforceability, collectibility or
sufficiency of this Agreement, or any of the other Loan Documents, or any of the
transactions contemplated hereby and thereby; or for the financial condition of
the REIT, Borrower, any Subsidiary, any Investment Affiliate, or any Agreement
Party. Agent shall not be required to make any inquiry concerning either the
performance or observance of any of the terms, provisions or conditions of this
Agreement or any of the Loan Documents or the financial condition of the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party, or
the existence or possible existence of any Unmatured Event of Default or Event
of Default. Agent may at any time request instructions from Lenders with respect
to any actions or approvals which, by the terms of this Agreement or of any of
the Loan Documents, Agent is permitted or required to take or to grant without
instructions from any Lenders, and if such instructions are promptly requested,
Agent shall be absolutely entitled to refrain from taking any action or to
withhold any approval and shall not be under any liability whatsoever to any
Person for refraining from taking any action or withholding any approval under
any of the Loan Documents until it shall have received such instructions from
Requisite Lenders or Supermajority Lenders, as the case may be. Without limiting
the foregoing, no Lender shall have any right of action whatsoever against Agent
as a result of Agent acting or refraining from acting under this Agreement or
any of the other Loan Documents in accordance with the instructions of Requisite
Lenders, Supermajority Lenders or, where applicable, all Lenders. Agent shall
promptly notify each Lender at any time that the Requisite Lenders or
Supermajority Lenders, as the case may be, have instructed Agent to act or
refrain from acting pursuant hereto.
11.06 Reliance. Agent shall be entitled to rely upon any
written notices, statements, certificates, orders or other documents, telecopies
or any telephone message believed by it in good faith to be genuine and correct
and to have been signed, sent or made by the proper Person, and with respect to
all matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel (including counsel
for Borrower), independent public accountant and other experts selected by it.
11.07 Indemnification. To the extent that Agent is not
reimbursed and indemnified by Borrower, Lenders will reimburse, within ten (10)
days after notice from Agent, and indemnify Agent for and against any and all
Liabilities and Costs which may be imposed on, incurred by, or asserted against
it (in its capacity as Agent) in any way relating to or arising out of this
Agreement or any of the other Loan Documents or any action taken or omitted by
Agent (in its capacity as Agent) under this Agreement or any of the other Loan
Documents, in proportion to each Lender's Pro Rata Share, provided that no
Lender shall be liable for any portion of such Liabilities and Costs resulting
from Agent's gross negligence or willful misconduct, bad faith or fraud. The
obligations of Lenders under this Section 11.07 shall survive the payment in
full of all Obligations and the termination of this Agreement. In the event that
after payment and distribution of any amount by Agent to Lenders, any Lender or
third party, including Borrower, any creditor of Borrower or a trustee in
bankruptcy, recovers from Agent any amount found to have been wrongfully paid to
Agent or disbursed by Agent to Lenders, then Lenders, in proportion to their
respective Pro Rata Shares, shall reimburse Agent for all such
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amounts. Notwithstanding the foregoing, Agent shall not be obligated to advance
Liabilities and Costs and may require the deposit by each Lender of its Pro Rata
Share of any material Liabilities and Costs anticipated by Agent before they are
incurred or made payable.
11.08 Agent Individually. With respect to its Pro Rata Share
of the Commitments hereunder and its Pro Rata Share of the Loan, Agent shall
have and may exercise the same rights and powers hereunder and is subject to the
same obligations and liabilities as and to the extent set forth herein for any
other Lender. The terms "Lenders", "Requisite Lenders", "Supermajority Lenders",
or any similar terms may include Agent in its individual capacity as a Lender,
one of the Requisite Lenders or one of the Supermajority Lenders, but Requisite
Lenders and Supermajority Lenders shall not include Agent solely in its capacity
as Agent. Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with Borrower
or any of its Subsidiaries or Affiliates as if it were not acting as Agent
pursuant hereto.
11.09 Successor Agent; Resignation of Agent; Removal of Agent.
(a) Agent may resign from the performance of all its functions
and duties hereunder at any time by giving at least thirty (30) Business Days
prior written notice to Lenders and Borrower. In the event of a material breach
of its duties hereunder, the Agent may be removed at any time by all of the
Lenders (other than Agent) giving at least thirty (30) Business Days prior
written notice to Agent and Borrower. Such resignation or removal shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
clauses (b) and (c) below or as otherwise provided below.
(b) Upon any such notice of resignation by or removal of
Agent, Requisite Lenders shall appoint a successor Agent with the consent of
Borrower, which shall not be unreasonably withheld or delayed (and approval from
Borrower shall not be required upon the occurrence and during the continuance of
an Event of Default). Any successor Agent must be a bank (i) the senior debt
obligations of which (or such Bank's parent's senior debt obligations) are rated
not less than Baa-1 by Moody's Inc. or a comparable rating by a rating agency
acceptable to Requisite Lenders, (ii) which has total assets in excess of Ten
Billion Dollars ($10,000,000,000) and (iii) which is a Lender as of the date of
such succession holding a Commitment without participants equal to at least ten
percent (10%) of the Facility. Agent hereby agrees to remit to any successor
Agent, a pro rata portion of any annual agent's fee received by Agent, in
advance, for the one-year period covered by such agent's fee based upon the
portion of such year then remaining.
(c) If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring or removed Agent, with
the consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall meet the requirements described in subsection (b) above and who
shall serve as Agent until such time, if any, as Requisite Lenders, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), appoint a successor Agent as
provided above.
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11.10 Consents and Approvals.
(a) Each Lender authorizes and directs Agent to enter into the
Loan Documents other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent at the direction or with the consent of
Requisite Lenders or the Supermajority Lenders and any action taken by Agent not
requiring consent by Requisite Lenders, Supermajority Lenders, or all Lenders in
accordance with the provisions of this Agreement or any Loan Document, and the
exercise by Agent at the direction or with the consent of Requisite Lenders or
the Supermajority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all Lenders, except for actions specifically requiring the
approval of all Lenders. All communications from Agent to Lenders requesting
Lenders' determination, consent, approval or disapproval (i) shall be given in
the form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or item may be inspected, or shall otherwise describe the matter or issue
to be resolved, (iii) shall include, if reasonably requested by a Lender and to
the extent not previously provided to such Lender, written materials and a
summary of all oral information provided to Agent by Borrower in respect of the
matter or issue to be resolved, and (iv) shall include Agent's recommended
course of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event within fifteen (15) Business Days after receipt of
the request therefor from Agent (the "Lender Reply Period"). Unless a Lender
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination.
With respect to decisions requiring the approval of Requisite Lenders,
Supermajority Lenders or all Lenders, Agent shall submit its recommendation or
determination for approval of or consent to such recommendation or determination
to all Lenders and upon receiving the required approval or consent shall follow
the course of action or determination recommended to Lenders by Agent or such
other course of action recommended by Requisite Lenders or Supermajority
Lenders, as the case may be, and each non-responding Lender shall be deemed to
have concurred with such recommended course of action. The following amendments,
modifications or waivers shall require the consent of the Requisite Lenders:
(i) Waiver of Sections 8.01(h) or 8.02(f);
(ii) Acceleration following an Event of Default pursuant to
Section 10.02(a) (except for any Event of Default pursuant to Sections
10.01(g) or 10.01(h)) or rescission of such acceleration pursuant to
Section 10.03;
(iii) Approval of the exercise of remedies requiring the
consent of the Requisite Lenders under Section 10.02(a);
(iv) Appointment of a successor Agent in accordance with
Sections 11.09(b) and (c);
(v) Disapproval of any Property as a Qualifying Unencumbered
Property.
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(b) Except for amendments, modifications and waivers requiring
the consent of all Lenders pursuant to Section 12.05(b), the consent of the
Supermajority Lenders shall be required to amend or modify Sections 9.01, 9.02,
9.03, 9.04, 9.05 or 10.01(a) or to waive any requirement thereof or to amend or
modify this Section 11.10(b).
(c) In addition to the required consents or approvals referred
to in Section 12.05, Agent may at any time request instructions from Requisite
Lenders with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such instructions
are promptly requested, Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from taking any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from Requisite Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement, any of
the other Loan Documents in accordance with the instructions of Requisite
Lenders or, where applicable, Supermajority Lenders or all Lenders. Agent shall
promptly notify each Lender at any time that the Requisite Lenders or
Supermajority Lenders have instructed Agent to act or refrain from acting
pursuant hereto.
11.11 [Intentionally Omitted]
11.12 [Intentionally Omitted]
11.13 Assignments and Participations.
(a) Subject to the provisions of Section 11.13(j), after first
obtaining the approval of Agent and Borrower, which approval will not be
unreasonably withheld (and which approval from Borrower shall not be required
upon the occurrence and during the continuance of an Event of Default), each
Lender may assign to one or more Eligible Assignees all or a portion of its
rights and obligations under this Agreement in accordance with the provisions of
this Section (including without limitation all or a portion of its Commitment
and the portion of the Loan owing to it); provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's rights and obligations under this Agreement and the
assignment shall cover the same percentage of such Lender's Commitment and the
portion of the Loan owing to it, (ii) unless Agent and Borrower otherwise
consent (which consent of Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), the aggregate amount of the
Commitment of the assigning Lender being assigned to an Eligible Assignee that
is not already a Lender hereunder (provided such Lender was also a Lender on the
Closing Date) pursuant to each such assignment shall in no event be less than
Five Million Dollars ($5,000,000) and shall be an integral multiple of One
Million Dollars ($1,000,000), (iii) the parties to each such assignment shall
execute and deliver to Agent, for its approval and acceptance, an Assignment and
Assumption and (iv) Agent shall receive from the assignor or assignors for its
sole account a processing fee of Three Thousand Dollars ($3,000). Upon such
execution, delivery, approval and acceptance, and upon the effective date
specified in the applicable Assignment and Assumption, (A) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been validly and
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effectively assigned to it pursuant to such Assignment and Assumption, have the
rights and obligations of a Lender hereunder and (B) the Lender-assignor
thereunder shall, to the extent that rights and obligations hereunder have been
validly and effectively assigned by it pursuant to such Assignment and
Assumption, relinquish its rights and be released from its obligations under
this Agreement.
(b) By executing and delivering an Assignment and Assumption,
the Lender-assignor thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such Assignment and Assumption, such assigning Lender makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with this
Agreement or any other Loan Document or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document or any other instrument or document furnished pursuant hereto;
(ii) such assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the REIT, Borrower,
any Subsidiary, any Investment Affiliate, or any Agreement Party or the
performance or observance by the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party of any of their respective obligations under
any Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Article VI or
delivered pursuant to Article VI to the date of such assignment and such other
Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such assigning Lender 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; (v) such
assignee appoints and authorizes Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers as are reasonably incidental thereto; and (vi) such assignee
agrees that it will perform in accordance with their terms all of the
obligations which by the terms of this Agreement are required to be performed by
it as a Lender.
(c) Agent shall maintain at its address referred to on the
counterpart signature pages hereof a copy of each Assignment and Assumption
delivered to and accepted by it and shall record the names and addresses of each
Lender and the Commitment of, and principal amount of the Loan owing to, such
Lender from time to time. Borrower, Agent and Lenders may treat each Person
whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.
(d) Upon its receipt of an Assignment and Assumption executed
by an assigning Lender and an assignee, Agent shall, if such Assignment and
Assumption has been properly completed and is in substantially the form of
Exhibit A, (i) accept such Assignment and Assumption, (ii) record the
information contained therein and (iii) give prompt notice thereof to Borrower.
Upon request, Borrower will execute and deliver to Agent an appropriate
replacement promissory note or replacement promissory notes in favor of each
assignee (and assignor, if such
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assignor is retaining a portion of its Commitment and the Loan) reflecting such
assignee's (and assignor's) Pro Rata Share(s) of the Facility. Upon execution
and delivery of such replacement promissory notes, the original promissory note
or notes evidencing all or a portion of the Commitment and the portion of the
Loan being assigned shall be canceled and returned to Borrower.
(e) Each Lender may sell participations to one or more banks,
finance companies, insurance or other entities in or to all or a portion of its
rights and obligations under this Agreement (including without limitation all or
a portion of its Commitment and the portion of the Loan owing to it); provided,
however, that (i) such Lender's obligations under this Agreement (including
without limitation its Commitment to Borrower hereunder) shall remain unchanged,
(ii) such Lender shall remain solely responsible to the other parties hereto for
the performance of such obligations, (iii) Borrower, Agent and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement and with regard to any
and all payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
that such Participant may have the contractual right in the applicable
participation agreement to prevent (A) increases in the Facility, (B) extensions
of the Maturity Date (except pursuant to Article III), (C) decreases in the
interest rates described in this Agreement, and (D) a release of the REIT
Guaranty.
(f) Borrower will use reasonable efforts to cooperate with
Agent and Lenders in connection with the assignment of interests under this
Agreement or the sale of participations herein.
(g) Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including Section 11.13, any Lender
may at any time and from time to time pledge and assign all or any portion of
its rights under all or any of the Loan Documents to a Federal Reserve Bank;
provided that no such pledge or assignment shall release such Lender from its
obligations thereunder.
(h) Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement to a Lender Affiliate of such Lender without
first obtaining the approval of Agent and Borrower, provided that (i) such
Lender gives Agent and Borrower at least fifteen (15) days prior written notice
of any such assignment; (ii) the parties to each such assignment execute and
deliver to Agent an Assignment and Assumption, and (iii) Agent receives from
assignor for its sole account a processing fee of Three Thousand Dollars
($3,000).
(i) No Lender shall be permitted to assign, or sell a
participation interest in, all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.
(j) Anything in this Agreement to the contrary
notwithstanding, so long as no Event of Default shall have occurred and be
continuing, no Lender shall be permitted to enter
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into an assignment of its rights and obligations hereunder which would result in
such Lender holding a Commitment of less than Ten Million Dollars ($10,000,000).
11.14 Ratable Sharing. Subject to Sections 11.03 and 11.04,
Lenders agree among themselves that (i) with respect to all amounts received by
them which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their Pro Rata Shares, whether received by
voluntary payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 11.14 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 12.04, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
11.15 Delivery of Documents. Agent shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof or at such other address as a
Lender may request in writing, (i) all documents to which such Lender is a party
or of which such Lender is a beneficiary and (ii) all documents of which Agent
receives copies from Borrower for distribution to Lenders pursuant to Sections
6.01 and 12.07. In addition, within ten (10) Business Days after receipt of a
request in writing from a Lender for written information or documents provided
by or prepared by Borrower, the REIT or any Agreement Party, Agent shall deliver
such written information or documents to such requesting Lender if Agent has
possession of such written information or documents in its capacity as Agent or
as a Lender.
11.16 Notice of Events of Default. Except as expressly
provided in this Section 11.16, Agent shall not be deemed to have knowledge or
notice of the occurrence of any Unmatured Event of Default or Event of Default
(other than nonpayment of principal of or interest on the Loan) unless Agent has
received notice in writing from a Lender or Borrower referring to this Agreement
or the other Loan Documents, describing such event or condition and expressly
stating that such notice is a notice of an Unmatured Event of Default or Event
of Default. Should Agent receive such notice of the occurrence of an Unmatured
Event of Default or Event of Default, or should Agent send Borrower a notice of
Unmatured Event of Default or Event of Default, Agent shall promptly give notice
thereof to each Lender.
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11.17 Administrative Agent's Reliance. Notwithstanding any
other provisions of this Agreement or any other Loan Documents, neither the
Agent nor any of its directors, officers, agents, employees or counsel shall be
liable for any action taken or not taken by it under or in connection with this
Agreement or any other Loan Document, except for its or their own gross
negligence or willful misconduct in connection with its duties expressly set
forth herein or therein. Without limiting the generality of the foregoing, the
Agent may consult with legal counsel (including its own counsel or counsel for
the Borrower, the REIT, MHC Trust or T1000 Trust), independent public
accountants and other experts selected by it and shall not be liable for any
action taken or omitted to be taken in good faith by it in accordance with the
advice of such counsel, accountants or experts. Neither the Agent nor any of its
directors, officers, agents, employees or counsel: (a) makes any warranty or
representation to any Lender or any other Person nor shall be responsible to any
Lender or any other Person for any statement, warranty or representation made or
deemed made by the Borrower, the REIT, MHC Trust or T1000 Trust or any other
Person in or in connection with this Agreement or any other Loan Document; (b)
shall have any duty to ascertain or to inquire as to the performance or
observance of any of the terms, covenants or conditions of this Agreement or any
other Loan Document or the satisfaction of any conditions precedent under this
Agreement or any Loan Document on the part of the Borrower or other Persons or
inspect the property, books or records of the Borrower or any other Person; (c)
shall be responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any other
Loan Document, any other instrument or document furnished pursuant thereto or
any collateral covered thereby or the perfection or priority of any lien in
favor of the Agent on behalf of the Lenders in any such collateral; (d) shall
have any liability in respect of any recitals, statements, certifications,
representations or warranties contained in any of the Loan Documents or any
other document, instrument, agreement, certificate or statement delivered in
connection therewith; and (e) shall incur any liability under or in respect of
this Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Agent may execute any of its duties under the
Loan Documents by or through agents, employees or attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
11.18 Decisions. Each Lender expressly acknowledges and agrees
that neither the Agent nor any of its officers, directors, employees, agents,
counsel, attorneys in fact or other affiliates has made any representations or
warranties to such Lender and that no act by the Agent hereafter taken,
including any review of the affairs of the Borrower, the REIT, MHC Trust or
T1000 Trust or any other Subsidiary or Affiliate, shall be deemed to constitute
any such representation or warranty by the Agent to any Lender. Each Lender
acknowledges that it has, independently and without reliance upon the Agent, any
other Lender or counsel to the Agent, or any of their respective officers,
directors, employees, agents or counsel, and based on the financial statements
of the Borrower, the REIT, MHC Trust or T1000 Trust, the other Subsidiaries and
other Affiliates, and inquiries of such Persons, its independent due diligence
of the business and affairs of the Borrower, the REIT, MHC Trust or T1000 Trust,
the other Subsidiaries and other Persons, its review of the Loan Documents, the
legal opinions required to be delivered to it hereunder, the advice of its own
counsel and such other documents and
83
information as it has deemed appropriate, made its own credit and legal analysis
and decision to enter into this Agreement and the transactions contemplated
hereby. Each Lender also acknowledges that it will, independently and without
reliance upon the Agent, any other Lender or counsel to the Agent or any of
their respective officers, directors, employees and agents, and based on such
review, advice, documents and information as it shall deem appropriate at the
time, continue to make its own decisions in taking or not taking action under
the Loan Documents. The Agent shall not be required to keep itself informed as
to the performance or observance by the Borrower, the REIT, MHC Trust, T1000
Trust or any Subsidiary or Investment Affiliate of the Loan Documents or any
other document referred to or provided for therein or to inspect the properties
or books of, or make any other investigation of, the Borrower, the REIT, MHC
Trust, T1000 Trust or any other Subsidiary. Except for notices, reports and
other documents and information expressly required to be furnished to the
Lenders by the Agent under this Agreement or any of the other Loan Documents,
the Agent shall have no duty or responsibility to provide any Lender with any
credit or other information concerning the business, operations, property,
financial and other condition or creditworthiness of the Agent or any of its
officers, directors, employees, agents, attorneys in fact or other Affiliates.
Each Lender acknowledges that the Agent's legal counsel in connection with the
transactions contemplated by this Agreement is only acting as counsel to the
Agent and is not acting as counsel to such Lender.
ARTICLE XII.
MISCELLANEOUS
12.01 Expenses.
(a) Generally. Borrower agrees, within thirty (30) days after
receipt of a written notice from the Agent, to pay or reimburse Agent for all of
Agent's reasonable costs and expenses incurred by Agent at any time (whether
prior to, on or after the date of this Agreement) in connection with: (A) the
negotiation, preparation and execution of this Agreement and the other Loan
Documents and any amendments or waivers with respect hereto requested by
Borrower, including, without limitation, the reasonable fees, expenses and
disbursements of Agent's outside counsel incurred in connection therewith; (B)
the making of the Loan and (C) the collection or enforcement by Agent of any of
the Obligations, including, without limitation, reasonable attorneys' fees and
costs incurred in connection therewith.
(b) After Event of Default. Borrower further agrees to pay, or
reimburse Agent and Lenders, for all reasonable costs and expenses, including
without limitation reasonable attorneys' fees and disbursements incurred by
Agent or Lenders after the occurrence of an Event of Default (i) in enforcing
any Obligation or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
Borrower, the REIT or any Agreement Party and related to or arising out of the
transactions contemplated hereby; (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise); (v) in
protecting,
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preserving, collecting, leasing, selling, taking possession of, or liquidating
any such collateral; or (vi) attempting to enforce or enforcing any rights under
the Loan Documents; provided, however, that the attorneys' fees and
disbursements for which Borrower is obligated under this subsection (b) shall be
limited to the reasonable non-duplicative fees and disbursements of counsel for
Agent and counsel for all Lenders as a group. For purposes of this Section
12.01(b), (i) counsel for Agent shall mean a single outside law firm
representing Agent plus any additional law firms providing special local law
representation in connection with the enforcement of the Loan Documents, and
(ii) counsel for all Lenders as a group shall mean a single outside law firm
representing such Lenders as a group.
12.02 Indemnity.
(a) Generally. Borrower shall indemnify and defend Agent and
each Lender and their respective affiliates, participants, officers, directors,
employees and agents (each an "Indemnitee") against, and shall hold each such
Indemnitee harmless from, any and all losses, damages (whether general, punitive
or otherwise), liabilities, claims, causes of action (whether legal, equitable
or administrative), judgments, court costs and legal or other expenses
(including reasonable attorneys' fees) which such Indemnitee may suffer or
incur: (i) in connection with claims made by third parties against such
Indemnitee for losses or damages suffered by such third party as a result of (A)
such Indemnitee's performance of this Agreement or any of the other Loan
Documents, including without limitation such Indemnitee's exercise or failure to
exercise any rights, remedies or powers in connection with this Agreement or any
of the other Loan Documents or (B) the failure by Borrower, the REIT or any
Agreement Party to perform any of their respective obligations under this
Agreement or any of the other Loan Documents as and when required hereby or
thereby, including without limitation any failure of any representation or
warranty of Borrower, the REIT or any Agreement Party to be true and correct;
(ii) in connection with any claim or cause of action of any kind by any Person
to the effect that such Indemnitee is in any way responsible or liable for any
act or omission by Borrower, the REIT or any Agreement Party, whether on account
of any theory of derivative liability or otherwise, (iii) in connection with the
past, present or future environmental condition of any Property owned by
Borrower, the REIT, Subsidiary or any Agreement Party, the presence of
asbestos-containing materials at any such Property, the presence of Contaminants
in groundwater at any such Property, or the Release or threatened Release of any
Contaminant into the environment from any such Property; or (iv) in connection
with any claim or cause of action of any kind by any Person which would have the
effect of denying such Indemnitee the full benefit or protection of any
provision of this Agreement or any of the other Loan Documents.
(b) ERISA. Without limitation of the provisions of subsection
(a) above, Borrower shall indemnify and hold each Indemnitee free and harmless
from and against all loss, costs (including reasonable attorneys' fees and
expenses), expenses, taxes, and damages (including consequential damages) such
Indemnitee may suffer or incur by reason of the investigation, defense and
settlement of claims and in obtaining any prohibited transaction exemption under
ERISA or the Internal Revenue Code necessary in such Indemnitee's reasonable
judgment by reason of the inaccuracy of the representations and warranties set
forth in the first paragraph of Section 5.01(s) or a breach of the provisions
set forth in the last paragraph of Section 8.01(f).
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(c) Exceptions; Limitations. Notwithstanding anything to the
contrary set forth in this Section 12.02, Borrower shall have no obligation to
any Indemnitee hereunder with respect to (i) any intentional tort, fraud or act
of gross negligence or bad faith which any Indemnitee is personally determined
by the judgment of a court of competent jurisdiction (sustained on appeal, if
any) to have committed, (ii) any liability of such Indemnitee to any third party
based upon contractual obligations of such Indemnitee owing to such third party
which are not expressly set forth in the Loan Documents or (iii) violations of
Environmental Laws relating to a Property which are caused by the act or
omission of such Indemnitee after such Indemnitee takes possession of such
Property and which would not have occurred if such Indemnitee had exercised
reasonable care under the circumstances. In addition, the indemnification set
forth in this Section 12.02 in favor of any officer, director, partner, employee
or agent of Agent, or any Lender shall be solely in their respective capacities
as such officer, director, partner, employee or agent. Such indemnification in
favor of any affiliate of Agent or any Lender shall be solely in its capacity as
the provider of services to Agent or such Lender in connection with this
Agreement, and such indemnification in favor of any participant of Agent or any
Lender shall be solely in its capacity as a participant in the Commitments and
the Loan.
(d) Payment; Survival. Borrower shall pay any amount owing
under this Section 12.02 within thirty (30) days after written demand therefor
by the applicable Indemnitee together with reasonable supporting documentation
therefor. The indemnity set forth in this Section 12.02 shall survive the
payment of all amounts payable pursuant to, and secured by, this Agreement and
the other Loan Documents. Payment by any Indemnitee shall not be a condition
precedent to the obligations of Borrower under this Section 12.02. To the extent
that any indemnification obligation set forth in this Section 12.02 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of the applicable
indemnified matter.
12.03 Change in Accounting Principles. Except as otherwise
provided herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into negotiations in order to amend such provisions so as to equitably reflect
such changes with the desired result that the criteria for evaluating the
financial condition of the REIT, on a consolidated basis, shall be the same
after such changes as if such changes had not been made; provided, however, that
no change in GAAP that would affect the method of calculation of any of the
financial covenants, standards or terms shall be given effect in such
calculations until such provisions are amended, in a manner satisfactory to
Agent and all Lenders, to so reflect such change in accounting principles.
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12.04 Setoff. In addition to any Liens granted to Agent and
any rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and during the
continuance of any Event of Default, Agent and each Lender are hereby authorized
by Borrower at any time or from time to time, with concurrent notice to
Borrower, or to any other Person (any such notice being hereby expressly waived)
to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured but not including trust accounts) and
any other indebtedness at any time held or owing by Agent or such Lender solely
to or for the credit or the account of Borrower against and on account of the
Obligations of Borrower to Agent or such Lender including but not limited to the
Loan and all claims of any nature or description arising out of or connected
with this Agreement or any of the other Loan Documents, irrespective of whether
or not (a) Agent or such Lender shall have made any demand hereunder or (b)
Agent shall have declared the principal of and interest on the Loan and other
amounts due hereunder to be due and payable as permitted by Article X and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
12.05 Amendments and Waivers. No amendment or modification of
any provision of this Agreement shall be effective without the written agreement
of Requisite Lenders (after notice to all Lenders) as provided in Section
11.10(a) and Borrower provided that the agreement of Requisite Lenders shall not
be required for amendments or modifications that are purely of a clerical nature
or that correct a manifest error and no termination or waiver of any such
provision of this Agreement (including without limitation any waiver of an Event
of Default which does not specifically require the consent of all Lenders), or
consent to any departure by Borrower therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders) as provided in Section 11.10(a), which Requisite Lenders shall have the
right to grant or withhold at their sole discretion, except that the amendments,
modifications or waivers specified in Section 11.10(b) shall require the consent
of the Supermajority Lenders and the following amendments, modifications or
waivers shall require the consent of all Lenders (other than Section 12.05(i)
which shall require the consent of all Lenders other than Agent):
(a) Increasing the Facility or any Lender's Commitment
(excluding any increase as a result of an assignment of commitments under
Section 11.13);
(b) Changing the principal amount or final maturity of the
Loan;
(c) Reducing or increasing the interest rates applicable to
the Loan;
(d) Reducing the rates on which fees payable pursuant hereto
are determined;
(e) Forgiving or delaying any amount payable under Article II
(other than late fees);
(f) Changing the definition of "Requisite Lenders,"
"Supermajority Lenders," or "Pro Rata Shares";
(g) Changing any provision contained in Section 12.05;
87
(h) Releasing any obligor under any Loan Document, unless such
release is otherwise required by the terms of this Agreement or any other Loan
Document;
(i) Removal of Agent for material breach of its duties
hereunder in accordance with Section 11.09(a); and
(j) Modifying or waiving any other provision herein which
specifically requires the consent of all Lenders.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
shall have no right to consent to any amendment, modification, termination or
waiver of any provision of Article XI; provided, however, that no amendment,
modification, termination or waiver of Section 11.09(b), 11.09(c), 11.10(a), or
11.13 (except subsection (i) thereof) which has an adverse effect on Borrower or
Borrower's rights hereunder shall be effective without the written concurrence
of Borrower. Agent and Lenders further acknowledge and agree that the remaining
provisions of Article XI are intended to and shall continue to address only the
rights and obligations of Agent and Lenders amongst each other and do not and
shall not impose obligations or restrictions upon Borrower or result in any way
in the loss of any rights, claims or defenses of Borrower. No amendment,
modification, termination or waiver of any provision of Article XI or any other
provision referring to the Agent shall be effective without the written
concurrence of the Agent. Any waiver or consent shall be effective only in the
specific instance and for the specific purpose for which it was given. No notice
to or demand on Borrower in any case shall entitle Borrower to any other further
notice or demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section shall be
binding on each assignee, transferee or recipient of Agent's powers, functions
or duties or any Lender's Commitment under this Agreement or the Loan at the
time outstanding.
12.06 Independence of Covenants. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Unmatured Event of Default if
such action is taken or condition exists.
12.07 Notices and Delivery. Unless otherwise specifically
provided herein, any consent, notice or other communication herein required or
permitted to be given shall be in writing and may be personally served,
telecopied or sent by courier service or United States mail and shall be deemed
to have been given when delivered in person or by courier service, upon receipt
of a telecopy or if deposited in the United States mail (registered or
certified, with postage prepaid and properly addressed) upon receipt or refusal
to accept delivery. Notices to Agent pursuant to Article II shall not be
effective until received by Agent. For the purposes hereof, the addresses of the
parties hereto (until notice of a change thereof is delivered as provided in
this Section 12.07) shall be as set forth below each party's name on the
signature pages hereof, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties. All
deliveries to be made to Agent for distribution to the Lenders shall be made to
Agent at the addresses specified for notice on the signature page hereto and, in
addition, a sufficient number of copies of each such delivery shall be delivered
to Agent
88
for delivery to each Lender at the address specified for deliveries on the
signature page hereto or such other address as may be designated by Agent or
Lenders in a written notice.
12.08 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein or
pursuant hereto shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Loan hereunder and
such indemnities shall survive termination hereof.
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative.
Except as otherwise expressly provided in this Agreement or any other Loan
Document, no failure or delay on the part of Agent or any Lender in the exercise
of any power, right or privilege under any of the Loan Documents shall impair
such power, right or privilege or be construed to be a waiver of any default or
acquiescence therein nor shall any single or partial exercise of any such power,
right or privilege preclude other or further exercise thereof or of any other
right, power or privilege. All rights and remedies existing under the Loan
Documents are cumulative to and not exclusive of any rights or remedies
otherwise available.
12.10 Marshalling; Recourse to Security; Payments Set Aside.
Neither any Lender nor Agent shall be under any obligation to marshal any assets
in favor of Borrower or any other party or against or in payment of any or all
of the Obligations. Recourse to security shall not be required at any time. To
the extent that Borrower makes a payment or payments to Agent or the Lenders or
Agent or the Lenders enforce their Liens or exercise their rights of set off,
and such payment or payments or the proceeds of such enforcement or set off or
any part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligations or part
thereof originally intended to be satisfied, and all Liens, rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such enforcement or set off had not occurred.
12.11 Severability. In case any provision in or obligation
under this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
12.12 Headings. Section headings in this Agreement are
included herein for convenience of reference only and shall not constitute a
part of this Agreement for any other purpose or be given any substantive effect.
12.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND
SHALL BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
ILLINOIS.
12.14 Limitation of Liability. To the extent permitted by
applicable law, no claim may be made by Borrower, MHC Trust, T1000 Trust, the
REIT, any Lender or any other Person against Agent or any Lender, or the
affiliates, directors, officers, employees, attorneys or
89
agents of any of them, for any punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Borrower, MHC Trust, T1000 Trust the
REIT, and each Lender hereby waive, release and agree not to sue upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
12.15 Successors and Assigns. This Agreement and the other
Loan Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Agent and Lenders. The terms
and provisions of this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loan and the Commitments of Lenders under this
Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and obligations hereunder, shall not be assigned (whether
directly, indirectly, by operation of law or otherwise) without the consent of
all Lenders.
12.16 Usury Limitation. Each Loan Document is expressly
limited so that in no contingency or event whatsoever, whether by reason of
error of fact or law, payment, prepayment or advancement of the proceeds of the
Loan, acceleration of maturity of the unpaid principal balance of the Loan, or
otherwise, shall the amount paid or agreed to be paid to Lenders for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loan which may be treated as interest under
applicable law, if any, exceed the maximum legal limit (if any such limit is
applicable) under United States federal laws or state laws (to the extent not
preempted by federal law, if any), now or hereafter governing the interest
payable under such Loan Documents. If, from any circumstances whatsoever,
fulfillment of any provision hereof or any of the other Loan Documents at the
time performance of such provision shall be due, shall involve transcending the
limit of validity (if any) prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstances Lenders shall ever receive as interest an amount which would
exceed the maximum legal limit (if any such limit is applicable), such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance due under the Loan Documents and not to the payment of
interest or, if necessary, to Borrower. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, this provision shall control
every other provision of all Loan Documents.
12.17 Confidentiality. Agent and Lenders shall use reasonable
efforts to assure that any information about Borrower, the REIT, MHC Trust,
T1000 Trust, Subsidiaries and Investment Affiliates (and their respective
Properties) not generally disclosed to the public which is furnished to Agent or
Lenders pursuant to the provisions of this Agreement or any of the other Loan
Documents is used only for the purposes of this Agreement and the other Loan
Documents and shall not be divulged to any other Person other than Agent and
Lenders and their respective affiliates, officers, directors, employees and
agents who are actively and directly participating in
90
the evaluation, administration or enforcement of the Obligations; provided,
however, that nothing herein shall affect the disclosure of any such information
(i) to the extent required by statute, rule, regulation or judicial process,
(ii) to counsel for Agent or Lenders or to their accountants, (iii) to bank
examiners and auditors, (iv) to any transferee or participant or prospective
transferee or participant hereunder who agrees to be bound by this provision,
(v) in connection with the enforcement of the rights of Agent and Lenders under
this Agreement and the other Loan Documents, or (vi) in connection with any
litigation to which Agent or any Lender is a party so long as Agent or such
Lender provides Borrower with prior written notice of the need for such
disclosure and exercises reasonable efforts to obtain a protective order with
respect to such information from the court or other tribunal before which such
litigation is pending.
12.18 Consent to Jurisdiction and Service of Process; Waiver
of Jury Trial; Waiver Of Permissive Counterclaims. ALL JUDICIAL PROCEEDINGS
BROUGHT AGAINST BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS
BROUGHT BY BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN ANY STATE OR FEDERAL
COURT OF COMPETENT JURISDICTION HAVING SITUS WITHIN THE BOUNDARIES OF THE
FEDERAL COURT DISTRICT OF THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION
AND DELIVERY OF THIS AGREEMENT, BORROWER, THE REIT, MHC TRUST AND T1000 TRUST
ACCEPT, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND
UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE
TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN
TAKEN OR IS AVAILABLE. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST HEREBY
DESIGNATE AND APPOINT ELLEN KELLEHER, ESQ., MANUFACTURED HOME COMMUNITIES, INC.,
TWO NORTH RIVERSIDE PLAZA, SUITE 800, CHICAGO, ILLINOIS 60606, TO RECEIVE ON
THEIR BEHALF SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT,
SUCH SERVICE BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND
BINDING SERVICE IN EVERY RESPECT. SUCH APPOINTMENT SHALL BE REVOCABLE ONLY WITH
AGENT'S PRIOR WRITTEN APPROVAL. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST
IRREVOCABLY CONSENT TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED
COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESS
SPECIFIED ON THE SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE UPON
RECEIPT. BORROWER, THE REIT, MHC TRUST, T1000 TRUST AGENT AND LENDERS
IRREVOCABLY WAIVE (A) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (B) ANY OBJECTION (INCLUDING
WITHOUT LIMITATION ANY OBJECTION TO THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY
91
JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT
OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER, THE REIT, MHC TRUST OR
T1000 TRUST IN THE COURTS OF ANY OTHER JURISDICTION. BORROWER, THE REIT, MHC
TRUST AND T1000 TRUST AGREE THAT THEY WILL NOT ASSERT ANY PERMISSIVE
COUNTERCLAIM IN ANY PROCEEDING BROUGHT BY LENDER WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT.
12.19 Counterparts; Effectiveness; Inconsistencies. This
Agreement and any amendments, waivers, consents or supplements may be executed
in counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective when Borrower, the REIT,
MHC Trust, T1000 Trust the initial Lenders and Agent have duly executed and
delivered counterpart execution pages of this Agreement to each other (delivery
by Borrower, the REIT, MHC Trust and T1000 Trust to Lenders and by any Lender to
Borrower, the REIT, MHC Trust, T1000 Trust and any other Lender being deemed to
have been made by delivery to Agent). This Agreement and each of the other Loan
Documents shall be construed to the extent reasonable to be consistent one with
the other, but to the extent that the terms and conditions of this Agreement are
actually and directly inconsistent with the terms and conditions of any other
Loan Document, this Agreement shall govern.
12.20 Construction. The parties acknowledge that each party
and its counsel have reviewed and revised this Agreement and that the normal
rule of construction to the effect that any ambiguities are to be resolved
against the drafting party shall not be employed in the interpretation of this
Agreement or any amendments or exhibits hereto.
12.21 Entire Agreement. This Agreement, taken together with
all of the other Loan Documents and all certificates and other documents
delivered by Borrower to Agent in connection herewith, embodies the entire
agreement and supersede all prior agreements, written and oral, relating to the
subject matter hereof.
12.22 Agent's Action for Its Own Protection Only. The
authority herein conferred upon Agent, and any action taken by Agent, to inspect
any Property will be exercised and taken by Agent for its own protection only
and may not be relied upon by Borrower for any purposes whatsoever, and Agent
shall not be deemed to have assumed any responsibility to Borrower with respect
to any such action herein authorized or taken by Agent. Any review,
investigation or inspection conducted by Agent, any consultants retained by
Agent or any agent or representative of Agent in order to verify independently
Borrower's satisfaction of any conditions precedent to the Loan, Borrower's
performance of any of the covenants, agreements and obligations of Borrower
under this Agreement, or the validity of any representations and warranties made
by Borrower hereunder (regardless of whether or not the party conducting such
review, investigation or inspection should have discovered that any of such
conditions precedent were not satisfied or that any such covenants, agreements
or obligations were not performed or that any such representations or warranties
were not true), shall not affect (or constitute a waiver by Agent or Lenders of)
(i) any of Borrower's representations and warranties under this
92
Agreement or Agent's or Lenders' reliance thereon or (ii) Agent's or Lenders'
reliance upon any certifications of Borrower required under this Agreement or
any other facts, information or reports furnished to Agent and Lenders by
Borrower hereunder.
12.23 Lenders' ERISA Covenant. Each Lender, by its signature
hereto or on the applicable Assignment and Assumption, hereby agrees (a) that on
the date the Loan is disbursed hereunder no portion of such Lender's Pro Rata
Share of such Loan will constitute "assets" within the meaning of 29 C.F.R.
Section 2510.3-101 of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code, and (b) that following such date such Lender shall not
allocate such Lender's Pro Rata Share of the Loan to an account of the Lender if
such allocation (i) by itself would cause such Pro Rata Share of the Loan to
then constitute "assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or
any successor regulation thereto) of an "employee benefit plan" within the
meaning of Section 3(3) of ERISA or a "plan" within the meaning of Section
4975(e)(1) of the Internal Revenue Code and (ii) by itself would cause such Loan
to constitute a prohibited transaction under ERISA or the Internal Revenue Code
(which is not exempt from the restrictions of Section 406 of ERISA and Section
4975 of the Internal Revenue Code and the taxes and penalties imposed by Section
4975 of the Internal Revenue Code and Section 502(i) of ERISA) or any Agent or
Lender being deemed in violation of Section 404 of ERISA.
12.24 Joint Lead Arrangers, Documentation Agent and
Syndication Agent. Each of the parties to this Agreement acknowledges and agrees
that the obligations of each Joint Lead Arranger, Documentation Agent and
Syndication Agent hereunder shall be limited to those obligations that are
expressly set forth herein, if any, and each Joint Lead Arranger, Documentation
Agent and Syndication Agent shall not be required to take any action or assume
any liability except as may be required in their respective capacities as a
Lender hereunder. Each of the parties to this Agreement agrees that, for
purposes of the indemnifications set forth herein, the term "Agent" shall be
deemed to include each Joint Lead Arranger, Documentation Agent and Syndication
Agent.
12.25 USA Patriot Act Notice; Compliance. The USA Patriot Act
of 2001 (Public Law 107-56) and federal regulations issued with respect thereto
require all financial institutions to obtain, verify and record certain
information that identifies individuals or business entities which open an
"account" with such financial institution. Consequently, Agent (for itself
and/or as Agent for all Lenders hereunder) may from time-to-time request, and
Borrower shall provide to Lender, Borrower's name, address, tax identification
number and/or such other identification information as shall be necessary for
Agent and Lenders to comply with federal law. An "account" for this purpose may
include, without limitation, a deposit account, cash management service, a
transaction or asset account, a credit account, a loan or other extension of
credit, and/or other financial services product.
12.26 Tax Shelter Regulations. None of Borrower, the REIT, MHC
Trust, T1000 Trust nor any subsidiary of any of the foregoing intends to treat
the Loan or the transactions contemplated by this Agreement and the other Loan
Documents as being a "reportable transaction" (within the meaning of Treasury
Regulation section 1.6011-4). If Borrower, the REIT, MHC Trust, T1000 Trust or
any subsidiary of any of the foregoing or any
93
other party to the Loan determines to take any action inconsistent with such
intention, Borrower will promptly notify Agent thereof. If Borrower so notifies
Agent, Borrower acknowledges that Agent and Lenders may treat the Loan as part
of a transaction that is subject to Treasury Regulation Section 301.6112-1, and
Agent and Lenders will maintain the lists and other records, including the
identity of the applicable party to the Loan as required by such Treasury
Regulation.
[SIGNATURE PAGES FOLLOW]
94
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement as of the date first written above.
"Borrower"
MHC OPERATING LIMITED PARTNERSHIP,
an Illinois limited partnership
By: MHC TRUST, a Maryland real estate
investment trust, its General Partner
By:__________________________________
Name: Michael B. Berman
Title: Vice President/Chief Financial
Officer
Address:
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
Telecopy: 312/279-1710
"REIT"
MANUFACTURED HOME COMMUNITIES, INC., a
Maryland corporation
By: _____________________________________
Name: Michael B. Berman
Title: Vice President/Chief Financial
Officer
Address:
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
Telecopy: 312/279-1710
S-1
"MHC Trust"
MHC TRUST, a Maryland real estate
investment trust
By: _____________________________________
Name: Michael B. Berman
Title: Vice President/Chief Financial
Officer
Address:
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
Telecopy: 312/279-1710
"T1000 Trust"
MHC T1000 TRUST, a Maryland real estate
investment trust
By: _____________________________________
Name: Michael B. Berman
Title: Vice President/Chief Financial
Officer
Address:
Two North Riverside Plaza, Suite 800
Chicago, Illinois 60606
Telecopy: 312/279-1710
S-2
WELLS FARGO BANK, N.A,
as Agent, a Joint Lead Arranger and
a Lender
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address:
123 North Wacker Drive
Suite 1900
Chicago, Illinois 60606
Attn.: Senior Loan Officer
Telecopy: 312/782-0969
WITH A COPY TO:
Wells Fargo & Co.
Real Estate Group
420 Montgomery Street, Floor 6
San Francisco, California 94163
Attn.: Chief Credit Officer
Telecopy: 415/391-2971
WITH A COPY TO (FOR
FINANCIAL STATEMENTS AND REPORTING
INFORMATION ONLY):
Wells Fargo Bank
2030 Main Street
Suite 800
Irvine, California 92714
Attn: Jim Furuyama
Telecopy 949/251-4343
Commitment: $70,000,000
58.333334%
S-3
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address:
IL1-231-10-35
231 S. LaSalle Street, 15th Floor
Chicago, Illinois 60697
Attn: Cheryl Sneor
Telecopy: 312/974-4970
Commitment: $25,000,000
20.833333%
S-4
LASALLE BANK NATIONAL ASSOCIATION, as
Documentation Agent and as a Lender
By: _____________________________________
Name: ___________________________________
Title: __________________________________
Address:
135 South LaSalle Street
Suite 1225
Chicago, Illinois 60603
Attention: Robert Goeckel
Telecopy: 312/904-6691
Commitment: $25,000,000
20.833333%
S-5
EXHIBIT C
TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds by Funds Transfer)
[ ] NEW [ ] REPLACE PREVIOUS DESIGNATION [ ] ADD [ ] CHANGE [ ] DELETE LINE
NUMBER _____
The following representatives of MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower") are authorized to request the disbursement of
Loan Proceeds and initiate funds transfers for Loan Number 101305 dated {DATE OF
DOCUMENTS} among Wells Fargo Bank, National Association ("Bank"), certain other
lenders, Borrower and certain affiliates of borrower. Bank is authorized to rely
on this Transfer Authorizer Designation until it has received a new Transfer
Authorizer Designation signed by Borrower, even in the event that any or all of
the foregoing information may have changed.
MAXIMUM WIRE
NAME TITLE AMOUNT1
- -------------------------------------------------------------------------------------------------------------------------------
1.
- -------------------------------------------------------------------------------------------------------------------------------
2.
- -------------------------------------------------------------------------------------------------------------------------------
3.
- -------------------------------------------------------------------------------------------------------------------------------
4.
- -------------------------------------------------------------------------------------------------------------------------------
5.
- -------------------------------------------------------------------------------------------------------------------------------
BENEFICIARV BANK AND ACCOUNT HOLDER INFORMATION
1.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
RECEIVING PARTY ACCOUNT NUMBER:
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
MAXIMUM TRANSFER AMOUNT:
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
2.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
RECEIVING PARTY ACCOUNT NUMBER:
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
MAXIMUM TRANSFER AMOUNT:
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
- -------------------
C-1
3.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
RECEIVING PARTY ACCOUNT NUMBER:
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
MAXIMUM TRANSFER AMOUNT:
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
1 Maximum Wire Amount may not exceed the Loan Amount.
Date: {DATE OF DOCUMENTS}
"BORROWER"
MHC OPERATING LIMITED PARTNERSHIP, AN
ILLINOIS LIMITED PARTNERSHIP
BY: MHC TRUST, A MARYLAND REAL ESTATE
INVESTMENT TRUST, ITS GENERAL
PARTNER
By:_________________________________________
Its:________________________________________
C-2