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Exhibit 4.16
REVOLVING CREDIT FACILITY
BY AND BETWEEN
DEVELOPERS DIVERSIFIED REALTY CORPORATION,
AND
NATIONAL CITY BANK
Dated as of November 13, 1996
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TABLE OF CONTENTS
Page
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Article 1 Interpretation....................................................................... 1
Section 1.1 General............................................................. 1
Section 1.2 Definitions......................................................... 1
ABR Applicable Margin................................................................ 1
Accountants.......................................................................... 1
Acquisition.......................................................................... 1
Adjusted Prime Rate.................................................................. 2
Affiliate............................................................................ 2
Applicable Margin.................................................................... 2
Assets Under Development............................................................. 2
Business Day......................................................................... 2
Capital Stock........................................................................ 2
Cash Equivalents..................................................................... 2
Closing Date......................................................................... 3
Code................................................................................. 4
Consolidated Capitalization Value.................................................... 4
Consolidated Cash Flow............................................................... 4
Consolidated Debt Service............................................................ 4
Consolidated Interest Expense........................................................ 4
Consolidated Market Value............................................................ 4
Consolidated Net Income.............................................................. 4
Consolidated Net Worth............................................................... 4
Consolidated Outstanding Indebtedness................................................ 5
Consolidated Secured Indebtedness.................................................... 5
Consolidated Senior Unsecured Indebtedness........................................... 5
Consolidated Subsidiaries............................................................ 5
Contingent Obligation................................................................ 5
Default.............................................................................. 6
Default Interest Rate................................................................ 6
Distribution......................................................................... 6
Draw Date............................................................................ 6
Environmental Laws................................................................... 6
ERISA................................................................................ 6
Event of Default..................................................................... 7
Financial Undertaking................................................................ 7
Funds From Operations................................................................ 7
Generally Accepted Accounting Principles or GAAP..................................... 7
Governmental Authority............................................................... 7
Hazardous Substances................................................................. 7
Head Office.......................................................................... 8
Indebtedness......................................................................... 8
Indebtedness for Borrowed Money...................................................... 9
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Interest Period...................................................................... 10
Late Charge.......................................................................... 10
Legal Requirements................................................................... 10
LIBOR................................................................................ 10
LIBOR Applicable Margin.............................................................. 11
LIBOR Break Funding Costs............................................................ 11
LIBOR Break Funding Event............................................................ 11
LIBOR Rate........................................................................... 11
LIBOR Rate Loan...................................................................... 11
Licenses and Permits................................................................. 11
Lien................................................................................. 11
Loan Documents....................................................................... 11
Loans................................................................................ 11
Material Adverse Effect.............................................................. 12
Maturity Date........................................................................ 12
Net Operating Income................................................................. 12
Notes................................................................................ 12
Obligations.......................................................................... 12
Payment Authorization................................................................ 13
Permitted Acquisitions............................................................... 13
Permitted Liens...................................................................... 13
Person............................................................................... 13
Prime Rate........................................................................... 13
Prim................................................................................. 13
Project.............................................................................. 13
Property............................................................................. 13
Rate Option.......................................................................... 13
REIT................................................................................. 13
Request For Advance.................................................................. 13
Securities........................................................................... 13
Subordinated Indebtedness............................................................ 14
Subsidiary........................................................................... 14
Substantial Portion.................................................................. 14
Type................................................................................. 14
Unencumbered Asset................................................................... 14
Unfunded Liabilities................................................................. 15
Unmatured Default.................................................................... 15
Unrestricted Cash and Cash Equivalents............................................... 15
Value of Unencumbered Assets......................................................... 15
Article 2 The Loans............................................................................ 16
Section 2.1 The Loans........................................................... 16
Section 2.2 The Notes........................................................... 16
Section 2.3 Interest Payable on the Loans....................................... 16
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Section 2.4 Repayments and Prepayments of Principal............................. 19
Section 2.5 Payments and Computations....................................................... 20
Section 2.6 Payments to be Free of Deductions................................... 22
Section 2.7 Use of Proceeds..................................................... 22
Section 2.8 LIBOR Break Funding Cost........................................................ 22
Section 2.9 Additional Costs.................................................... 23
Section 2.10 Indemnification for Losses.......................................... 25
Section 2.11 Statements by National City......................................... 25
Section 2.12 Requests for Advances............................................... 26
Article 3 Conditions Precedent To Disbursements................................................ 26
Section 3.1 Conditions Precedent to Disbursements........................................... 26
Article 4 Affirmative Covenants of Borrower.................................................... 28
Section 4.1 Reports and Other Information....................................... 28
Section 4.2 Maintenance of Property; Insurance.................................. 30
Section 4.3 Consolidated Net Worth.............................................. 30
Section 4.4 Indebtedness and Cash Flow Covenants................................ 30
Section 4.5 Corporate Existence................................................. 31
Section 4.6 Compliance with Laws................................................ 31
Section 4.7 Notice of Litigation: Judgments..................................... 31
Section 4.8 Notice of Other Events.............................................. 32
Section 4.9 Inspections......................................................... 32
Section 4.10 Payment of Taxes and Other Claims................................... 32
Section 4.11 Payment of Indebtedness............................................. 33
Section 4.12 Performance of Obligations Under the Loan........................... 33
Section 4.13 Governmental Consents and Approvals................................. 33
Section 4.14 Notice as to Certain Documents...................................... 34
Section 4.15 Notice of Termination of Certain Documents.......................... 34
Section 4.16 Environmental Matters............................................... 35
Section 4.17 Further Assurances.................................................. 36
Section 4.18 Borrower's Depository Accounts...................................... 36
Section 4.19 Use of Proceeds..................................................... 36
Article 5 Negative Covenants Of Borrower....................................................... 36
Section 5.1 Limitation on Nature of Business.................................... 36
Section 5.2 Limitation on Consolidation and Merger.............................. 36
Section 5.3 Limitation on Distributions, Dividends, Acquisitions and
Investments......................................................... 37
Section 5.4 Acquisition of Margin Securities.................................... 38
Section 5.5 Sale and Leaseback.................................................. 38
Section 5.6 Liens............................................................... 38
Section 5.7 Affiliates.......................................................... 39
Section 5.8 Financial Undertakings.............................................. 39
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Section 5.9 Variable Interest Indebtedness...................................... 39
Article 6 Events Of Default; Remedies.......................................................... 39
Section 6.1 Events of Default................................................... 39
Section 6.2 Acceleration of Obligations......................................... 41
Section 6.3 No Implied Waiver; Rights Cumulative................................ 42
Article 7 Provisions Of General Application.................................................... 42
Section 7.1 Duration............................................................ 42
Section 7.2 Notices............................................................. 42
Section 7.3 Survival of Representations......................................... 44
Section 7.4 Amendments.......................................................... 44
Section 7.5 Costs, Expenses, Taxes and Indemnification.......................... 44
Section 7.6 Set-Off............................................................. 45
Section 7.7 Binding Effect...................................................... 45
Section 7.8 Governing Law; Jurisdiction and Venue............................... 46
Section 7.9 Waiver Jury......................................................... 46
Section 7.10 Waivers............................................................. 46
Section 7.11 Integration of Schedules and Exhibits............................... 46
Section 7.12 Headings............................................................ 46
Section 7.13 Counterparts........................................................ 47
Section 7.14 Severability........................................................ 47
Section 7.15 One General Obligation.............................................. 47
Section 7.16 Confidentiality..................................................... 47
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Exhibit 99
REVOLVING CREDIT FACILITY
THIS REVOLVING CREDIT FACILITY (this "AGREEMENT") dated as of November 13, 1996,
is by and between DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation
("BORROWER") and NATIONAL CITY BANK, a national banking association ("NATIONAL
CITY"). For good and valuable consideration, the receipt and sufficiency of
which is acknowledged, the parties agree as follows:
ARTICLE 1
INTERPRETATION
SECTION 1.1 GENERAL. For the purposes of this Agreement the following general
rules of interpretation shall apply to the extent they are not clearly
inconsistent with the context or the subject matter of specific provisions
hereof.
(a) The expression "THIS AGREEMENT" shall mean this Credit
Facility (including all of the Schedules and Exhibits annexed
hereto) as originally executed, or, if supplemented, amended
or restated from time to time, as so supplemented, amended or
restated.
(b) Singular nouns shall include the plural and vice versa, and
all references to dollars shall mean United States Dollars.
(c) Accounting terms not otherwise defined herein shall have the
meanings assigned to them in accordance with Generally
Accepted Accounting Principles (as hereinafter defined).
(d) All Schedules and Exhibits to this Agreement shall be deemed
to be incorporated herein by reference.
SECTION 1.2 DEFINITIONS. In addition to terms defined elsewhere in this
Agreement, the terms set forth below shall have the following meanings for the
purpose of this Agreement:
"ABR APPLICABLE MARGIN" means, as of any date, the Applicable Margin in
effect on such date with respect to Prime Rate Loans.
"ACCOUNTANTS" means Price, Waterhouse & Co., or such other nationally
recognized firm of certified public accountants as may from time to
time be selected by Borrower and acceptable to National City.
"ACQUISITION" means any transaction, or any series of related
transactions, consummated on or after the date of this Agreement, by
which Borrower or any of its Subsidiaries (i) acquires any going
business or all or substantially all of the assets of any firm,
corporation
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or division thereof, whether through purchase of assets, merger or
otherwise or (ii) directly or indirectly acquires (in one transaction
or as the most recent transaction in a series of transactions) at least
a majority (in number of votes) of the securities of a corporation
which have ordinary voting power for the election of directors (other
than securities having such power only by reason of the happening of a
contingency) or a majority (by percentage or voting power) of the
outstanding partnership interests of a partnership.
"ADJUSTED PRIME RATE" means, at any time, the sum of the Prime Rate
plus the ABR Applicable Margin in effect at such time.
"AFFILIATE" means, in relation to any Person (in this definition called
"AFFILIATED PERSON"), any Person (other than a Subsidiary) which
(directly or indirectly) controls or is controlled by or is under
common control with such Affiliated Person. For the purposes of this
definition, the term "control" shall mean the possession (directly or
indirectly) of the power to direct or to cause the direction of the
management or the policies of a Person, whether through the ownership
of shares of any class in the capital or any other voting securities of
such Person, by contract or otherwise.
"APPLICABLE MARGIN" means the applicable margin set forth in the table
in Section 2.3 used in calculating the interest rate applicable to the
various Types of Loans, which shall vary from time to time in
accordance with Borrower's long term unsecured debt ratings.
"ASSETS UNDER DEVELOPMENT" means, as of any date of determination, any
Project, or expansion area of an existing Project, owned by Borrower or
any of its Subsidiaries which is then treated as an asset under
development under GAAP and which has been designated by Borrower as an
"Asset Under Development" for purposes of this Agreement, both such
land and improvements under construction to be valued for purposes of
this Agreement at then-current book value, as determined in accordance
with GAAP; provided, however, in no event shall Assets Under
Development include any Project or any expansion area of an existing
Project for more than 270 days.
"BUSINESS DAY" means any day other than a Saturday or Sunday on which
commercial banking institutions are open for business in Cleveland,
Ohio.
"CAPITAL STOCK" means any and all shares, interests, participations or
other equivalents (however designated) of capital stock of a
corporation, any and all equivalent ownership interests in a Person
which is not a corporation and any and all warrants or options to
purchase any of the foregoing.
"CASH EQUIVALENTS" means, as of any date:
(a) securities issued or directly and fully guaranteed or insured
by the United States Government or any agency or
instrumentality thereof having maturities of not more than one
year from such date;
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(b) mutual funds organized under the United States Investment
Company Act rated AAm or AAm-G by S&P, P-1 by Moody's and A by
Fitch;
(c) certificates of deposit or other interest-bearing obligations
of a bank or trust company which is a member in good standing
of the Federal Reserve System having a short term unsecured
debt rating of not less than A-1 by S&P, not less than P-1 by
Moody's and F-1 by Fitch (or in each case. if no bank or trust
company is so rated, the highest comparable rating then given
to any bank or trust company, but in such case only for funds
invested overnight or over a weekend) provided that such
investments shall mature or be redeemable upon the option of
the holders thereof on or prior to a date one month from the
date of their purchase;
(d) certificates of deposit or other interest-bearing obligations
of a bank or trust company which is a member in good standing
of the Federal Reserve System having a short term unsecured
debt rating of not less than A-1+ by S&P, and not less than
P-1 by Moody's and which has a long term unsecured debt rating
of not less than A1 by Moody's (or in each case, if no bank or
trust company is so rated, the highest comparable rating then
given to any bank or trust company, but in such case only for
funds invested overnight or over a weekend) provided that such
investments shall mature or be redeemable upon the option of
the holders thereof on or prior to a date three months from
the date of their purchase;
(e) bonds or other obligations having a short term unsecured debt
rating of not less than A-1+ by S&P and P-1+ by Moody's and
having a long term debt rating of not less than A-1 by Moody's
issued by or by authority of any state of the United States,
any territory or possession of the United States, including
the Commonwealth of Puerto Rico and agencies thereof, or any
political subdivision of any of the foregoing;
(f) repurchase agreements issued by an entity rated not less than
A-1+ by S&P, and not less than P-1 by Moody's which are
secured by U.S. Government securities of the type described in
clause (i) of this definition maturing on or prior to a date
one month from the date the repurchase agreement is entered
into;
(g) short term promissory notes rated not less than A-1+ by S&P,
and not less than P-1 by Moody's maturing or to be redeemable
upon the option of the holders thereof on or prior to a date
one month from the date of their purchase; and
(h) commercial paper (having original maturities of not more than
365 days) rated as least A-1+ by S&P and P-1 by Moody's and
issued by a foreign or domestic issuer who, at the time of the
investment, has outstanding long-term unsecured debt
obligations rated at least A-1 by Moody's.
"CLOSING DATE" means the date of this Agreement.
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"CODE" means the United States Internal Revenue Code of 1986, as
amended from time to time, or any successor federal tax code; any
reference to any statutory provision shall be deemed to be a reference
to any successor provision or provisions.
"CONSOLIDATED CAPITALIZATION VALUE" means, as of any date, an amount
equal to the sum of (i) Consolidated Cash Flow for the most recent
period of two consecutive fiscal quarters for which the Borrower has
reported results to National City (excluding any portion of
Consolidated Cash Flow attributable to Assets Under Development and
Projects acquired by Borrower or its Subsidiaries during such period)
MULTIPLIED BY 2, and DIVIDED BY 0.10 PLUS (ii) with respect to each
Project so acquired by Borrower or its Subsidiaries during such period,
Borrower's estimated annual Net Operating Income for such Project based
on leases in existence at the date of such acquisition DIVIDED BY 0.10.
"CONSOLIDATED CASH FLOW" means, for any period, an amount equal to (a)
Funds From Operations for such Period PLUS (b) Consolidated Interest
Expense for such period.
"CONSOLIDATED DEBT SERVICE" means, for any period, (a) Consolidated
Interest Expense for such period PLUS (b) the aggregate amount of
scheduled principal payments of Indebtedness (excluding optional
prepayments and scheduled principal payments in respect of any
Indebtedness which is not amortized through equal periodic installments
of principal and interest over the term of such Indebtedness) required
to be made during the period by Borrower or any of its Consolidated
Subsidiaries.
"CONSOLIDATED INTEREST EXPENSE" means, for any period, the amount of
interest expense of Borrower and its Subsidiaries for such period on
the aggregate principal amount of their Indebtedness, determined on a
consolidated basis in accordance with GAAP.
"CONSOLIDATED MARKET VALUE" means, as of any date, an amount equal to
the sum of (a) the Consolidated Capitalization Value as of such date,
PLUS (b) 100% of the value of Unrestricted Cash and Cash Equivalents,
PLUS (c) the lesser of (i) the value of Assets Under Development, or
(ii) ten percent (10%) of the Consolidated Capitalization Value.
"CONSOLIDATED NET INCOME" means, for any period, consolidated net
income (or loss) of Borrower and its Subsidiaries for such period
determined on a consolidated basis in accordance with GAAP; PROVIDED
that there shall be excluded (a) the income (or deficit) of any other
Person accrued prior to the date it becomes a Subsidiary of Borrower or
is merged into or consolidated with Borrower or any of its Subsidiaries
and (b) the undistributed earnings of any Subsidiary which has not
furnished a Subsidiary Guaranty to the extent that the declaration or
payment of dividends or similar distributions by such Subsidiary is not
at the time permitted by the terms of any contractual obligation or
requirement of law applicable to such Subsidiary.
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"CONSOLIDATED NET WORTH" means, as of any date of determination, an
amount equal to (a) Consolidated Market Value MINUS (b) Consolidated
Outstanding Indebtedness as of such date.
"CONSOLIDATED OUTSTANDING INDEBTEDNESS" means, as of any date of
determination, all Indebtedness for Borrowed Money of Subsidiaries
outstanding at such date, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED SECURED INDEBTEDNESS" means, as of any date of
determination, the sum of (a) the aggregate principal amount of all
Indebtedness of Borrower and its Subsidiaries outstanding at such date
secured by any Lien on the Property of Borrower or its Subsidiaries,
without regard to recourse, plus (b) the excess, if any, of the
aggregate principal amount of all Senior Unsecured Indebtedness of the
Subsidiaries of Borrower which have not furnished Subsidiary Guaranties
over $5,000,000, determined on a consolidated basis in accordance with
GAAP.
"CONSOLIDATED SENIOR UNSECURED INDEBTEDNESS" means, as of any date of
determination, the aggregate principal amount of all Senior Unsecured
Indebtedness of Borrower and its Subsidiaries outstanding at such date,
including without limitation all the outstanding Indebtedness under
this Agreement as of such date, determined on a consolidated basis in
accordance with GAAP.
"CONSOLIDATED SUBSIDIARIES" means all of Borrower's direct,
wholly-owned subsidiaries with which Borrower reports financial results
on a consolidated basis in accordance with GAAP.
"CONTINGENT OBLIGATION" means any direct or indirect liability,
contingent or otherwise, with respect to any Indebtedness, lease,
dividend, letter of credit, banker's acceptance or other obligation of
another Person incurred to provide assurance to the obligee of such
obligation that such obligation will be paid or discharged, that any
agreements relating thereto will be complied with, or that the holders
of such obligation will be protected (in whole or in part) against loss
in respect thereof. Contingent Obligations shall include, without
limitation,
(a) the direct or indirect guaranty, endorsement (otherwise than
for collection or deposit in the ordinary course of business),
co-making, discounting with recourse or sale with recourse by
any Person of the obligation of another Person; and
(b) any liability for the obligations of another Person through
any agreement (contingent or otherwise)
(i) to purchase, repurchase or otherwise acquire such
obligation or any security therefor, or to provide
funds for the payment or discharge of such obligation
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(whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or
(ii) to maintain the solvency of any balance sheet item,
level of income or financial condition of another,
if in the case of any agreement described under subclauses
(i), (ii) or (iii) of this sentence the purpose or intent
thereof is to provide the assurance described above. The
amount of any Contingent Obligation shall be equal to the
amount of the obligation so guaranteed or otherwise supported.
"DEFAULT" means any event or occurrence which, with the giving of
notice or the passage of time, or both, would constitute an Event of
Default.
"DEFAULT INTEREST RATE" means an annual rate of interest equal to the
lesser of
(a) one percent (1.0%) above the Prime Rate; or
(b) the maximum rate of interest which may lawfully be charged in
respect of the Obligations.
"DISTRIBUTION" means:
(a) The declaration or payment of any dividends or other
distributions on or in respect of capital stock (except
distributions in such common stock); or
(b) The redemption, acquisition or other retirement of Securities,
except such redemptions, acquisitions or other retirements
made as a part of the same transaction from the net proceeds
of the sale of such Securities.
"DRAW DATE" means, in relation to any Loan, the day on which such Loan
is made or to be made to Borrower pursuant to this Agreement.
"ENVIRONMENTAL LAWS" means all present and future laws, statutes,
ordinances, rules, regulations, orders, and determinations of any
Federal, state or local governmental authority pertaining to health,
protection of the environment, natural resources, conservation,
wildlife, waste management, regulation of activities involving
Hazardous Substances, and pollution, including, without limitation, the
Comprehensive Environmental Response, Compensation, and Liability Act
("SUPERFUND" or "CERCLA"), 42 U.S.C. Section 9601 et seq., the
Superfund Amendments and Reauthorization Act of 1986 ("SARA"), 42
U.S.C. Section 9601(20)(D), the Resource Conservation and Recovery Act
("RCRA"), 42 U.S.C. Section 6901 et seq., the Federal Water Pollution
Control Act, as amended by the Clean Water Act (the "CLEAN WATER ACT"),
33 U.S.C. Section 1251 et seq., the Clean Air Act ("CAA"), 42 U.S.C.
Section 7401 et seq., and the Toxic Substances Control Act ("TCSA"), 15
U.S.C. Section 2601 et seq., together with any and
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all applicable licenses, permits or governmental approvals
pertaining to, or establishing standards with respect to, any of the
foregoing matters, as any of the foregoing may be amended or
supplemented.
"ERISA" means the Employee Retirement Income Security Act of 1974 and
the rules and regulations issued thereunder, as the same may be amended
from time to time.
"EVENT OF DEFAULT" means any event or condition described in Section
6.1 of this Agreement.
"FINANCIAL UNDERTAKING" of a Person means
(a) any transaction which is the functional equivalent of or takes
the place of borrowing but which does not constitute a
liability on the consolidated balance sheet of such Person, or
(b) any agreements, devices or arrangements designed to protect at
least one of the parties thereto from the fluctuations of
interest rates, exchange rates or forward rates applicable to
such party's assets, liabilities or exchange transactions,
including, but not limited to, interest rate exchange agreements,
forward currency exchange agreements, interest rate cap or collar
protection agreements, forward rate currency or interest rate options.
"FUNDS FROM OPERATIONS" means, for any period, Consolidated Net Income
for such period, excluding gains (losses) on sales of property,
non-recurring charges and extraordinary items, adjusted for non-cash
charges (including, without limitation, depreciation and amortization,
and equity gains (losses) from each unconsolidated joint venture
included therein, but excluding any amortization of deferred finance
costs), plus the proportionate share of funds from operations of each
unconsolidated joint venture that is due to Borrower or any Subsidiary
for such period, all determined on a consistent basis.
"GENERALLY ACCEPTED ACCOUNTING PRINCIPLES" or "GAAP" means generally
accepted accounting principles in effect from time to time in the
United States, consistently applied.
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political jurisdiction thereof and any entity exercising
executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"HAZARDOUS SUBSTANCES" means
(a) any hazardous wastes and/or toxic chemicals, materials,
substances or wastes as defined by or for the purposes of any
of the Environmental Laws;
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(b) any "OIL", as defined by the Clean Water Act, as amended from
time to time, and regulations promulgated thereunder
(including crude oil or any fraction thereof and any petroleum
products or derivatives thereof);
(c) any substance, the presence of which is prohibited, regulated
or controlled by any other applicable federal or state or
local laws, regulations, statutes or ordinances now in force
or hereafter enacted relating to waste disposal or
environmental protection with respect to the exposure to, or
manufacture, possession, presence, use, generation, storage,
transportation, treatment, release, emission, discharge,
disposal, abatement, cleanup, removal, remediation or handling
of any such substances;
(d) any asbestos or asbestos-containing materials, polychlorinated
biphenyls ("PCBS") in the form of electrical equipment,
fluorescent light fixtures with ballasts, cooling oils or any
other form, urea formaldehyde or atmospheric radon at levels
which violate the applicable standards therefor set by
applicable Environmental Laws;
(e) any solid, liquid, gaseous or thermal irritant or contaminant,
such as smoke, vapor, soot, fumes, alkalis, acids, chemicals,
pesticides, herbicides, sewage, industrial sludge or other
similar wastes;
(f) industrial, nuclear or medical by-products; and
(g) any underground storage tanks.
"HEAD OFFICE" means the head office of National City, located at 1900
East Ninth Street, Cleveland, Ohio 44101-0756, or such other office as
may be designated as such by written notice to Borrower by National
City.
"INDEBTEDNESS" means, in relation to any Person, at any time, all of
the obligations of such Person which, in accordance with GAAP, would be
classified as indebtedness upon a balance sheet (including any footnote
thereto) of such Person prepared at such time, and in any event shall
include, without limitation:
(a) all indebtedness of such Person arising or incurred under or
in respect of
(i) any guaranties (whether direct or indirect) by such
Person of the indebtedness, obligations or
liabilities of any other Person, or
(ii) any endorsement by such Person of any of the
indebtedness, obligations or liabilities of any other
Person (otherwise than as an endorser of negotiable
instruments received in the ordinary course of
business and presented to commercial banks for
collection of deposit), or
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(iii) the discount by such Person, with recourse to such
Person, of any of the indebtedness, obligations or
liabilities of any other Person;
(b) all indebtedness of such Person arising or incurred under or
in respect of any agreement, contingent or otherwise made by
such Person
(i) to purchase any indebtedness of any other Person or
to advance or supply funds for the payment or
purchase of any indebtedness of any other Person or
(ii) to purchase, sell or lease (as lessee or lessor) any
property, products, materials or supplies or to
purchase or sell transportation or services,
primarily for the purpose of enabling any other
Person to make payment of any indebtedness of such
other Person or to assure the owner or holder of such
other Person's indebtedness against loss, regardless
of the delivery or non-delivery of the property,
products, materials or supplies or the furnishing or
non-furnishing of the transportation or services, or
(iii) to make any loan, advance, capital contribution or
other investment in any other Person for the purpose
of assuring a minimum equity, asset base, working
capital or other balance sheet condition for or as at
any date, or to provide funds for the payment of any
liability, dividend or stock liquidation payment, or
otherwise to supply funds to or in any manner invest
in any other Person;
(c) all indebtedness, obligations and liabilities secured by or
arising under or in respect of any Lien, upon or in Property
owned by such Person, even though such Person has not assumed
or become liable for the payment of such indebtedness,
obligations and liabilities;
(d) all indebtedness created or arising under any conditional sale
or other title retention agreement with respect to Property
acquired by such Person, even though the rights and remedies
of the seller or lender (or lessor) under such agreement in
the event of default are limited to repossession or sale of
such Property; and
(e) all indebtedness arising or incurred under or in respect of
any Contingent Obligation.
"INDEBTEDNESS FOR BORROWED MONEY" means at any time, all Indebtedness
required by GAAP to be reflected as such on Borrower's balance sheet,
including, as appropriate, all Indebtedness
(a) in respect of any money borrowed (including pursuant to this
Agreement);
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(b) under or in respect of any Contingent Obligation (whether
direct or indirect) of any money borrowed;
(c) evidenced by any loan or credit agreement, promissory note,
debenture, bond, guaranty or other similar written obligation
to pay money; or
(d) arising under leases which, in accordance with GAAP, should be
reflected as indebtedness on a balance sheet.
"INTEREST PERIOD" means:
(a) For each LIBOR Rate Loan, the period commencing on the Draw
Date and ending one, two, three, four, five or six months
thereafter, provided that:
(i) any Interest Period which would otherwise end on a
day which is not a Business Day shall be extended to
the next Business Day unless such Business Day falls
in another calendar month, in which case such
Interest Period shall end on the Business Day
immediately preceding such day;
(ii) any Interest Period which begins on the last Business
Day of a calendar month (or on a day for which there
is no numerically corresponding day in the calendar
month at the end of such Interest Period) shall end
on the last Business Day of a calendar month; and
(iii) any Interest Period shall end on or before the
Maturity Date.
(b) For each Prime Rate Loan, the period commencing on the Draw
Date for such Loan and ending on the earliest of
(i) the date on which such Prime Rate Loan is repaid by
Borrower;
(ii) the date on which such Prime Rate Loan is converted
to a LIBOR Rate Loan pursuant to Section 2.3 hereof,
or
(iii) the Maturity Date.
"LATE CHARGE" means with respect to any delinquent payment of principal
or interest hereunder, a fee that is equal to the greater of One
Hundred Dollars ($100.00) or one percent (1.0%) of the delinquent
payment, charged to Borrower or added to the unpaid balance of the
Notes whenever any payment of principal or interest is not paid when
due.
"LEGAL REQUIREMENTS" means all applicable laws, rules, regulations,
ordinances, judgments, orders, decrees, injunctions, arbitral awards,
permits, licenses, authorizations, directions and requirements of all
governments, departments, commissions, boards, courts, authorities,
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agencies, and officials and officers thereof, that are in effect now or
at any time in the future.
"LIBOR" means the rate (rounded upward to the next highest 1/100 of 1%)
obtained by dividing (a) the rate of interest per annum determined by
National City equal to the offered rates for deposits in U.S. Dollars
of one, two, three, four, five or six-month periods (as the case may
be) commencing of the first date of the applicable Interest Period for
which such rate is determined, as such rate appears on the Telerate
system as of 11:00 a.m. (London, England time) on the date which is two
(2) Business Days preceding the first day of such Interest Period, for
a period comparable to the duration of such Interest Period and in an
amount comparable to the amount of the LIBOR Rate Loan to be
outstanding during such Interest Period, by (b) a percentage equal to
100% minus the stated maximum rate of all reserves required to be
maintained against "LIBOR Rate liabilities" as specified in Regulation
D (or against any other category of liabilities which includes deposits
by reference to which the LIBOR Rate is determined or any category of
extensions of credit or other assets which includes loans by a
non-United States office of a bank to United States residents) on such
date to any member bank of the Federal Reserve System.
"LIBOR APPLICABLE MARGIN" means, as of any date, the Applicable Margin
in effect on such date with respect to LIBOR Rate Loans.
"LIBOR BREAK FUNDING COSTS" means an amount sufficient to reimburse
National City for any and all loss, cost or expense actually incurred
by National City as the result of the occurrence of any LIBOR Break
Funding Event, determined by multiplying the amount of the principal
prepayment hereunder by the difference, if any, between (a) LIBOR for a
term then available closest to the remaining duration of the Interest
Period for the principal sum being prepaid, and for an amount
comparable to such principal sum, and (b) the LIBOR Rate in effect for
the principal sum being so prepaid, immediately prior to the prepayment
of such sum, all as determined as of the date of the occurrence of the
LIBOR Break Funding Event.
"LIBOR BREAK FUNDING EVENT" means any of the events or occurrences set
forth in Sections 2.8(a) or 2.8(b).
"LIBOR RATE" means for each Interest Period applicable to each LIBOR
Rate Loan, the sum of LIBOR PLUS the LIBOR Applicable Margin in effect
as of the Draw Date for such Loan.
"LIBOR RATE LOAN" means a Loan which bears interest at the LIBOR Rate.
"LICENSES AND PERMITS" means all licenses, permits, registrations and
recordings thereof now owned or hereafter acquired by Borrower and
necessary for the business operations of Borrower, together with all
applications for the foregoing.
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"LIEN" means any lien, mortgage, pledge, security interest, charge or
other encumbrance of any kind, including any conditional sale or other
title retention agreement, any lease in the nature thereof, and any
agreement to give any security interest.
"LOAN DOCUMENTS" means this Agreement, the Notes and any other
agreement, instrument, certificate or document now or hereafter
executed in connection with or pursuant to this Agreement, together
with any and all modifications, amendments and supplements thereof
(each, singly, a "LOAN DOCUMENT").
"LOANS" means the loans (each, singly, a "LOAN") made or to be made to
Borrower pursuant to this Agreement.
"MATERIAL ADVERSE EFFECT" means a material adverse effect on
(a) the business, Property or condition (financial or otherwise)
of Borrower and its Subsidiaries taken as a whole,
(b) the ability of Borrower to perform its obligations under the
Loan Documents, or
(c) the validity or enforceability of any of the Loan Documents.
"MATURITY DATE" means the earlier of (a) September 1, 1999, subject to
extension in accordance with Section 2.1 of this Agreement, or (b) the
date on which the entire outstanding balance of the Notes shall become
due and payable (whether as a result of acceleration or otherwise).
"NET OPERATING INCOME" means, with respect to any Project for any
period, "property rental and other income" (as determined by GAAP)
attributable to such Project accruing for such period MINUS the amount
of all expenses (as determined in accordance with GAAP) incurred in
connection with and directly attributable to the ownership and
operation of such Project for such period, including, without
limitation, Management Fees and amounts accrued for the payment of real
estate taxes and insurance premiums, but excluding interest expense or
other debt service charges and any non-cash charges such as
depreciation or amortization of financing costs. As used herein
"MANAGEMENT FEES", means, with respect to each Project for any period,
an amount equal to (i) three percent (3%) of the aggregate base rent
and percentage rent due and payable under leases with anchor tenants at
such Project, PLUS (ii) five percent (5%) of the aggregate base rent
and percentage rent due and payable under leases with tenants other
than anchor tenants at such Project.
"NOTES" means, collectively, the promissory notes of Borrower in the
form of EXHIBIT A. "Note" shall mean any one of the Notes.
"OBLIGATIONS" means, collectively, all of the indebtedness, obligations
and liabilities existing on the date hereof or arising from time to
time hereafter, whether direct, indirect,
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absolute, contingent, joint or several, matured or unmatured,
liquidated or unliquidated, secured or unsecured, arising by contract,
operation of law or otherwise, of Borrower to National City
(a) in respect of the Loans made; or
(b) under or in respect of any one or more of the Loan Documents.
Obligations shall also include, without limitation, all interest,
charges and other fees payable hereunder (or under any of the Loan
Documents) by Borrower, or due hereunder (or under any of the Loan
Documents) from Borrower to National City from time to time, together
with all costs and expenses referred to in Section 7.5 herein.
"PAYMENT AUTHORIZATION" means the form substantially in the form of
attached EXHIBIT B, to be executed by Borrower and delivered to
National City notifying National City of any payment hereunder or under
the Notes, and if appropriate, authorizing National City to debit a
designated Borrower's accounts or account for such payment amount.
"PERMITTED ACQUISITIONS" are defined in Section 5.3.
"PERMITTED LIENS" are defined in Section 5.6.
"PERSON" means any individual, company, corporation, association,
partnership, joint venture, unincorporated trade or business
enterprise, trust, estate, or any other legal entity, or a government
(Federal, state or local), court, arbitrator or any agency,
instrumentality or official of the foregoing.
"PRIME RATE" means the fluctuating rate of interest which is publicly
announced from time to time by National City at its Head Office as
being its "prime rate" or "base rate" thereafter in effect, with each
change in the Prime Rate automatically, immediately and without notice
being reflected in the fluctuating interest rate thereafter applicable
hereunder, it being specifically acknowledged that the Prime Rate is
not necessarily the lowest rate of interest then available from
National City on fluctuating-rate loans.
"PRIME RATE LOAN" means a Loan which bears interest at the Adjusted
Prime Rate.
"PROJECT" means any real estate owned by Borrower or any of its
Subsidiaries and operated or intended to be operated as a shopping
center or business center.
"PROPERTY" means any type of real, personal, tangible, intangible or
mixed property.
"RATE OPTION" means the Prime Rate or the LIBOR Rate.
"REIT" means a qualified real estate investment trust, as defined in
the Code.
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"REQUEST FOR ADVANCE" means the form, substantially in the form of
attached EXHIBIT C, executed by Borrower and delivered to National
City, requesting an advance of Loan proceeds hereunder, and among other
items, notifying National City of the intended use of such Loan
proceeds.
"SECURITIES" means any stock, shares, 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 participation in temporary or interim certificates
for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire, any of the foregoing.
"SUBORDINATED INDEBTEDNESS" means Indebtedness which is contractually
subordinated to the Obligations on terms reasonably acceptable to
National City.
"SUBSIDIARY" means any corporation in which Borrower (or a Subsidiary
of Borrower) owns at least a majority of the securities having voting
power for the election of directors.
"SUBSTANTIAL PORTION" means, with respect to the Property of Borrower
and its Subsidiaries, Property which
(a) represents more than 10% of the consolidated assets of
Borrower and its Subsidiaries as would be shown in the
consolidated financial statements of Borrower and its
Subsidiaries as at the beginning of the twelve-month period
ending with the month in which such determination is made, or
(b) is responsible for more than 10% of the consolidated net sales
or of the consolidated net income of Borrower and its
Subsidiaries as reflected in the financial statements referred
to in clause (i) above.
"TYPE" means, with respect to any Loan, its nature as a Prime Rate Loan
or a LIBOR Rate Loan.
"UNENCUMBERED ASSET" means, with respect to any Project, at any date of
determination, the circumstance that such asset on such date
(a) is not subject to any Liens or claims (including restrictions
on transferability or assignability) of any kind (including
any such Lien, claim or restriction imposed by the
organizational documents of any Subsidiary, but excluding
Permitted Liens,
(b) is not subject to any agreement (including
(i) any agreement governing Indebtedness incurred in
order to finance or refinance the acquisition of such
asset, and
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(ii) of applicable, the organizational documents of any
Subsidiary)
which prohibits or limits the ability of Borrower or any of
its Subsidiaries to create, incur, assume or suffer to exist
any Lien upon any assets or Capital Stock of Borrower or any
of its Subsidiaries, including, without limitation, any
negative pledge or similar covenant or restriction,
(c) is not subject to any agreement (including any agreement
governing Indebtedness incurred in order to finance or
refinance the acquisition of such asset) which entitles any
Person to the benefit of any Lien (other than Permitted Liens)
on any assets or Capital Stock of Borrower or any of its
Subsidiaries, or would entitle any Person to the benefit of
any Lien (other than Permitted Liens) on such assets or
Capital Stock upon the occurrence of any contingency
(including, without limitation, pursuant to an "equal and
ratable" clause), and
(d) has been improved with an income-producing building or
buildings which are substantially completed and occupied.
For the purposes of this Agreement, any Project of a Subsidiary shall
not be deemed to be unencumbered unless both
(a) such Project and
(b) all Capital Stock of such Subsidiary held by Borrowers is
unencumbered.
"UNFUNDED LIABILITIES" means the amount (if any) by which the present
value of all vested nonforfeitable benefits under all Single Employer
Plans exceeds the fair market value of all such Plan assets allocable
to such benefits, all determined as of the then most recent valuation
date for such Plans.
"UNMATURED DEFAULT" means an event which but for the lapse of time or
the giving of notice, or both, would constitute a Default.
"UNRESTRICTED CASH AND CASH EQUIVALENTS" means, as of any date of
determination, the sum of
(a) the aggregate amount of Unrestricted cash then held by
Borrower or any of their Consolidated Subsidiaries and
(b) the aggregate amount of Unrestricted Cash Equivalents (valued
at the lower of cost and fair market value) then held by
Borrower or any of their Consolidated Subsidiaries.
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As used in this definition, "UNRESTRICTED" means the specified asset is
not subject to any Liens in favor of any Person.
"VALUE OF UNENCUMBERED ASSETS" means, for any period of two consecutive
fiscal quarters, an amount equal to the sum of
(a) Net Operating Income attributable to Unencumbered Assets for
the most recent period of two consecutive fiscal quarters for
which Borrower has reported results to National City
(excluding any portion of Net Operating Income attributable to
Unencumbered Assets acquired by Borrower or its Subsidiaries
during or after such period) MULTIPLIED BY 2, and DIVIDED BY
0.10, PLUS
(b) with respect to those Unencumbered Assets so acquired by
Borrower or its Subsidiaries during such period of two
consecutive fiscal quarters, Borrower's estimated annual Net
Operating Income for such Unencumbered Assets based on leases
in existence at the date of such acquisition DIVIDED BY 0.10.
ARTICLE 2
THE LOANS
SECTION 2.1 THE LOANS. National City will, subject to the terms and conditions
of this Agreement, make Loans to Borrower in an aggregate amount not to exceed
$10,000,000.00. Subject to the terms of this Agreement, Borrower may borrow,
repay and reborrow hereunder at any time prior to the Maturity Date. Borrower
may extend the Maturity Date for successive and consecutive periods of one (1)
year each, provided, as to each instance (a) that Borrower shall provide
National City with written notice of its election to so extend not later than
ninety days prior to the anniversary of the Closing Date for any year in which
this Agreement is in effect; (b) that there is not then a default hereunder or
under any other Loan Document, nor any circumstance which would, with the
passing of time or the delivery of notice (or both) constitute such a default;
and (c) that National City elects in its sole and absolute discretion to consent
to such an extension.
SECTION 2.2 THE NOTES. The absolute and unconditional obligation of Borrower to
repay to National City the principal of each Loan and the interest thereon, as
and when required as hereinafter provided, shall be evidenced by a separate Note
in the amount of the principal of such Loan, and substantially in the form of
EXHIBIT A hereto. All payments under the Notes shall be made to National City at
its Head Office.
SECTION 2.3 INTEREST PAYABLE ON THE LOANS.
(a) APPLICABLE MARGINS. Each of the ABR Applicable Margin, and the
LIBOR Applicable Margin to be used in calculating the interest
rate applicable to different
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Types of Loans shall vary from time to time in accordance with
the lower of Borrower's then applicable
(x) Moody's debt rating, and
(y) S&P's debt rating,
as the case may be (e.g., if Borrower's Moody's debt rating is
Baal and its S&P debt rating is BBB then the Applicable
Margins shall be computed based on the S&P rating), and the
Applicable Margins shall be adjusted effective on the next
Business Day following any change in Borrower's Moody's debt
rating and/or S&P's debt rating, as the case may be. The
applicable debt ratings and the Applicable Margins are set
forth in the following table:
LIBOR ABR
Applicable Applicable
S&P Rating Moody's Rating Margin Margin
- ---------- -------------- ------------- ----------
A- or higher A3 or higher 0.95% 0.00%
BBB+ Baal 1.10% 0.00%
BBB- to BBB Baa3 to Baa2 1.25% 0.00%
Less than BBB- Less than Baa3 1.85% 0.60%
In the event that either S&P or Moody's shall discontinue
their ratings of the REIT industry or Borrower, Borrower shall
seek a debt rating from Fitch or Duff & Phelps or, if Borrower
so desires, another substitute rating agency reasonably
satisfactory to National City and Borrower. For the period
from the date of such discontinuance until the first to occur
of
(i) the date Borrower receives a debt rating from such
new rating agency or
(ii) a date 180 days after such discontinuance,
the single rating from S&P or Moody's, as the case may be,
shall be used to determine the Applicable Margin. If the debt
rating of Borrower from such new rating agency is not received
within such 180 day period, or if both S&P and Moody's shall
discontinue their ratings of the REIT industry or Borrower,
the Applicable Margin to be used for the calculation of
interest on Loans hereunder shall be the highest Applicable
Margin for each Type.
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(b) METHOD OF SELECTING RATE OPTIONS PERIODS. Borrower shall
select the Rate Option for each Loan and shall select the
Interest Period applicable to each LIBOR Rate Loan from time
to time. Borrower shall give National City an irrevocable
Request For Advance not later than 11:00 a.m. Cleveland time
not more than ten (10) Business Days nor less than one (1)
Business Day before the Draw Date of each Prime Rate Loan and
not more than ten (10) Business Days nor less than two (2)
Business Days before the Draw Date for each LIBOR Rate Loan,
specifying:
(i) the Draw Date (which shall be a Business Day) for
such Loan;
(ii) the amount of such Loan;
(iii) the Rate Option selected for such Loan; and
(iv) in the case of each LIBOR Rate Loan, the Interest
Period therefor.
Each LIBOR Rate Loan shall bear interest from and including
the first day of the Interest Period applicable thereto until
(but not including) the last day of such Interest Period at
the interest rate determined as applicable to such LIBOR Rate
Loan. Borrower shall select Interest Periods with respect to
LIBOR Rate Loans so that it is not necessary to pay a LIBOR
Rate Loan prior to the last day of the applicable Interest
Period in order to repay the Loans on the Maturity Date.
Provided that no Default or Event of Default shall have
occurred and be continuing, Borrower may elect to continue a
Loan as a LIBOR Rate Loan by giving irrevocable written,
telephonic or telegraphic notice thereof to National City not
more than ten (10) nor less than two (2) Business Days prior
to the last day of the then-current Interest Period for such
LIBOR Rate Loan, specifying the duration of the succeeding
Interest Period therefor. If National City does not receive
timely notice of such election, Borrower shall be deemed to
have elected to convert such LIBOR Rate Loan to a Prime Rate
Loan at the end of the then-current Interest Period. Provided
that no Default or Event of Default shall have occurred and be
continuing, Borrower may, on any Business Day, convert any
outstanding Prime Rate Loan, or portion thereof, into a LIBOR
Rate Loan in the same aggregate principal amount. If Borrower
desires so to convert a Prime Rate Loan, it shall give
National City prior written or telephonic notice not more than
ten (10) nor less than two (2) Business Days prior to the
requested conversion date, which notice shall specify the
duration of the Interest Period applicable thereto.
(c) MONTHLY INSTALLMENTS.
(i) Borrower shall pay to National City, monthly in
arrears on the last Business Day of each month,
interest on the outstanding principal amount of the
Adjusted Prime Rate Loans at the annual rate equal to
the Adjusted Prime Rate; PROVIDED, HOWEVER, that if
Borrower elects, pursuant to the final
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paragraph of Section 2.3(b), to convert a Prime Rate
Loan, or any portion thereof, to a LIBOR Rate Loan,
Borrower shall pay to National City, all accrued but
unpaid interest on such Prime Rate Loan, or that
portion thereof which is being so converted, for the
period commencing on the date of the last payment
date under this paragraph 2.3(c)(i) and concluding on
the day immediately preceding the first day of the
Interest Period for the LIBOR Rate Loan into which
such Prime Rate Loan is converted.
(ii) Borrower shall pay to National City, in arrears,
interest on the outstanding principal amount of the
LIBOR Rate Loans at the annual rate equal to the
LIBOR Rate. Such interest shall be due and payable on
the last Business Day of the applicable Interest
Period for each LIBOR Rate Loan having an Interest
Period of ninety (90) days or less; for all other
LIBOR Rate Loans, interest shall be payable, in
arrears as aforesaid, on (A) that Business Day which
is ninety (90) days after the beginning of the
Interest Period for such LIBOR Rate Loans; and (B) on
the final day of the Interest Period therefor.
(d) INTEREST ON OVERDUE PAYMENTS; DEFAULT INTEREST RATE. If any
payment of principal or interest is not paid when due, or
prior to the expiration of the applicable period of grace (if
any) therefor, National City may charge and collect from
Borrower, or may add to the unpaid balance of the Notes, a
Late Charge. National City may charge interest on the Late
Charge at the Default Interest Rate until such time as the
required payment of principal and interest (together with the
Late Charge) is paid hereunder. No failure by National City to
charge or collect any Late Charge in respect of any delinquent
payment shall be considered to be a waiver by National City of
any rights they may have hereunder, including without
limitation the right subsequently to impose a Late Charge for
such delinquent payment or to take such other actions as may
then be available to them hereunder or at law or in equity,
including but not limited to the right to accelerate the
Obligations pursuant to the terms of Section 6.2 hereof. If
the Notes have been accelerated pursuant to Section 6.2 or if
an Event of Default hereunder or under any other Loan Document
shall have occurred and be continuing, the outstanding
principal balance of the indebtedness advanced under this
Agreement, together with all accrued interest thereon and any
and all other Obligations, shall bear interest from the date
on which such amount shall have first become due and payable
to the date on which such amount shall be paid (whether before
or after judgment) at the Default Interest Rate. Interest at
the Default Interest Rate will continue to accrue and will (to
the extent permitted by applicable law) be compounded daily
until the Obligations in respect of such payment are
discharged (whether before or after judgment).
SECTION 2.4 REPAYMENTS AND PREPAYMENTS OF PRINCIPAL.
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(a) OPTIONAL PREPAYMENTS. Borrower may prepay the principal of the
Loans in full or in part at any time and from time to time
upon payment to National City of all accrued interest to the
date of payment; provided, however, that
(i) all partial payments of principal shall be in an
amount equal to or greater than $100,000.00; and
(ii) all Loans may be prepaid without penalty or premium,
subject to the following provision.
If Borrower shall prepay any Loan which is a LIBOR Rate Loan
on a day other than the final day of the applicable Interest
Period therefor, such prepayment must include an amount equal
to all of National City's LIBOR Break Funding Costs applicable
to or resulting from such prepayment.
(b) APPLICATION OF PREPAYMENTS. Any prepayment of the Obligations
shall be applied by National City as set forth in Section 2.5
hereof. To the extent that such payment, repayment or
prepayment shall be applied to a LIBOR Rate Loan, National
City shall retain such amount until the expiration of the
Interest Period applicable to such LIBOR Rate Loan, and shall
apply such payment at such time so as to minimize the LIBOR
Break Funding Costs applicable to such payment, repayment or
prepayment, unless otherwise instructed by Borrower to pay,
repay or prepay such LIBOR Rate Loan and nonetheless incur the
applicable LIBOR Break Funding Cost.
(c) MATURITY. All of the indebtedness evidenced by each Note
shall, if not sooner paid, be in any event absolutely and
unconditionally due and payable in full by Borrower, on the
Maturity Date.
(d) NOTICE OF PREPAYMENTS OF PRINCIPAL. Borrower will provide
National City written notice of its intention to make any
voluntary prepayment of principal not later than 11:00 a.m.
Cleveland time on such prepayment day. Such notice shall be
irrevocable and shall specify the date of prepayment and the
aggregate amount to be paid.
SECTION 2.5 PAYMENTS AND COMPUTATIONS.
(a) TIME AND PLACE OF PAYMENTS. Each payment to be made by
Borrower under this Agreement or any other Loan Document shall
be made directly to National City at its Head Office, not
later than 2:00 p.m. Cleveland Time, on the due date of each
such payment, in immediately available and freely transferable
funds. Any payment received after such time will be deemed to
have been received on the next Business Day. All payments of
interest, principal and all other amounts owing hereunder or
under the Notes or any other Loan Document shall be documented
by Borrower's
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transmitting to National City, via telecopy, a Payment
Authorization; the funds representing such payment shall be
transferred to National City in accordance with such Payment
Authorization.
(b) APPLICATION OF FUNDS. Notwithstanding anything herein to the
contrary, and notwithstanding anything set forth in the
Payment Authorization, the funds received by National City
with respect to the Obligations shall be applied as follows:
(i) NO DEFAULT. Provided that the Notes have not been
accelerated pursuant to Section 6.2, below, and
provided further that no Event of Default hereunder
or under any Loan Document shall have occurred and be
continuing at the time that National City receives
such funds, in the following manner:
(A) FIRST, to the payment of all fees, charges,
and other sums (other than principal and
interest) then due and payable to National
City under the Notes, this Agreement or the
other Loan Documents (including, without
limitation, any LIBOR Break Funding Costs
which may then be payable);
(B) SECOND, to the payment of all accrued but
unpaid interest at the time of such payment;
and
(C) THIRD, to the payment of principal of the
Notes.
(ii) DEFAULT. If the Notes have been accelerated pursuant
to Section 6.2, or if an Event of Default hereunder
shall have occurred and be continuing hereunder or
under the Notes or any of the other Loan Documents at
the time National City receives such funds, in the
following manner:
(A) FIRST to the payment or reimbursement of
National City for all costs, expenses,
disbursements and losses which shall have
been incurred or sustained by the National
City in or incidental to the collection of
the Obligations owed by Borrower hereunder
or the exercise, protection, or enforcement
by National City of all or any of the
rights, remedies, powers and privileges
National City under this Agreement, the
Notes, or any of the other Loan Documents
and in and towards the provision of adequate
indemnity National City against all taxes or
Liens which by law shall or may have
priority over the rights of National City in
and to such funds; and
(B) SECOND to the payment of all of the
Obligations in accordance with Section
2.5(b)(i) above.
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(c) PAYMENTS ON BUSINESS DAYS. If any sum would (but for the
provisions of this Section 2.5(c)) become due and payable on
any day which is not a Business Day, then such sum shall
become due and payable on the next succeeding Business Day,
and interest payable on such sum shall continue to accrue and
shall be adjusted by National City accordingly.
(d) COMPUTATION OF INTEREST. All computations of interest payable
under this Agreement, the Notes, or any of the other Loan
Documents shall be computed by National City on the basis of
the actual principal amount outstanding on each day during the
payment period, and shall be calculated with reference to the
actual number of days elapsed during such period on the basis
of a year consisting of 360 days. The daily interest charge
shall be 1/360th of the annual interest amount. Each
determination of any interest rate by National City shall be
conclusive and binding on Borrower in the absence of manifest
error. Absent manifest error, a certificate or statement
signed by an authorized officer of National City shall be
conclusive evidence of the amount of the Obligations due and
unpaid as of the date of such certificate or statement.
SECTION 2.6 PAYMENTS TO BE FREE OF DEDUCTIONS. Each payment to be made by
Borrower under this Agreement, any Note, or any of the other Loan Documents
shall be made in accordance with Section 2.5 hereof, without set-off, deduction
or counterclaim whatsoever, and free and clear of taxes, levies, imposts,
duties, charges, fees, deductions, withholdings, compulsory loans, restrictions
or conditions of any nature now or hereafter imposed or levied by any
governmental or taxing authority, unless Borrower is compelled by law to make
any such deduction or withholding. In the event that any such obligation to
deduct or withhold is imposed upon Borrower with respect to any such payment:
(a) Borrower shall be permitted to make the deduction or
withholding required by law in respect of such payment, and
(b) there shall become and be absolutely due and payable by
Borrower to National City on the date on which such payment
shall become due and payable,
and Borrower hereby promises to pay to National City on such date, such
additional amount as shall be necessary to enable National City to receive the
same net amount which National City would have received on such due date had no
such obligation been imposed by law. Notwithstanding any provision of this
Section 2.6 to the contrary, the foregoing provisions of this Section 2.6 shall
not apply in the case of any deductions or withholdings made in respect of taxes
charged upon or by reference to the overall net income, profits or gains of
National City.
SECTION 2.7 USE OF PROCEEDS.
(a) PERMITTED USES OF LOAN PROCEEDS. Borrower represents, warrants
and covenants to National City that all proceeds of the Loans
shall be for general corporate
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purposes, working capital, property acquisitions and
construction and expansion of retail facilities
(b) PROHIBITED USES. Borrower represents, warrants and covenants
to the National City that the proceeds of all Loans shall be
used only for the permitted uses described in the foregoing
paragraph, and that no part of the proceeds of any Loan will
be used (directly or indirectly) so as to result in a
violation of Regulations G, T, U or X of the Board of
Governors of the Federal Reserve System or for any other
purpose violative of any rule or regulation of such Board.
SECTION 2.8 LIBOR BREAK FUNDING COST. Borrower shall pay to National City, the
LIBOR Break Funding Costs that National City determines are attributable to:
(a) any payment (including, without limitation, any payment
resulting from the acceleration of the Loans pursuant to this
Agreement or any Loan Document), repayment, mandatory or
optional prepayment, or conversion of a LIBOR Rate Loan for
any reason on a date other than the last day of the Interest
Period for such LIBOR Rate Loan; or
(b) any failure by Borrower for any reason to borrow a LIBOR Rate
Loan on the date for such borrowing specified in the relevant
notice of borrowing or Request for Advance given pursuant to
this Agreement.
SECTION 2.9 ADDITIONAL COSTS.
(a) Notwithstanding any conflicting provision of this Agreement to
the contrary, if any applicable law or regulation not in
effect as of the date hereof shall
(i) subject National City to any tax, levy, impost, duty,
charge, fee, deduction or withholding of any nature
with respect to any Loan, this Agreement, any Note,
or any of the other Loan Documents or the payment by
Borrower of any amounts payable to National City
hereunder or thereunder; or
(ii) materially change, in the reasonable opinion of the
party so affected, the basis of taxation of payments
to National City of the principal of or the interest
on any Note or any other amounts payable to National
City under this Agreement, or any of the other Loan
Documents; or
(iii) impose or increase or render applicable any special
or supplementary special deposit or reserve or
similar requirements (whether or not having the force
of law) against assets held by, or deposits in or for
the account of, or any eligible liabilities of, or
loans by any office or branch of, National City; or
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(iv) impose National City any other condition or
requirement with respect to this Agreement, any Note,
or any of the other Loan Documents, and if the result
of any of the foregoing is
(A) to increase the cost to National City of
making, funding or maintaining all or any
part of the principal of the Loans, or
(B) to reduce the amount of principal, interest
or any other sum payable by Borrower to
National City under this Agreement, any
Note, or any of the other Loan Documents, or
(C) to require National City to make any payment
or to forego any interest or other sum
payable by Borrower to National City under
this Agreement, any Note, or any of the
other Loan Documents, the amount of which
payment or foregone interest or other sum is
measured by or calculated by reference to
the gross amount of any sum receivable or
deemed received by National City from
Borrower under this Agreement, any Note, or
any of the other Loan Documents,
then, and in each such case, Borrower will pay to
National City, within sixty (60) days of written
notice by National City, such additional amounts as
will (in the reasonable opinion of National City) be
sufficient to compensate National City for such
additional cost, reduction, payment or foregone
interest or other sum.
Anything in this paragraph to the contrary notwithstanding,
the foregoing provisions of this paragraph shall not apply in
the case of any additional cost, reduction, payment or
foregone interest or other sum resulting solely from or
arising solely as a consequence of any taxes charged upon or
by reference to the overall net income, profits or gains of
National City.
(b) If any present or future applicable law shall make it unlawful
for Borrower to perform any one or more of their agreements or
Obligations under this Agreement, any Note, or any of the
other Loan Documents, then the obligations of National City
hereunder shall terminate immediately. If any present or
future applicable law shall make it unlawful for Borrower to
perform any one or more of its agreements or obligations under
this Agreement, any Note, or any of the other Loan Documents,
National City shall at any time determine (which reasonable
determination shall be conclusive and binding on Borrower)
(i) that, as a consequence of the effect or operation
(whether direct or indirect) of any such applicable
law, any one or more of the rights, remedies, powers
or privileges of National City under or in respect of
this Agreement, any
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Note, or any of the other Loan Documents shall be or
become invalid, unenforceable, or materially
restricted; and
(ii) that all or any one or more of the rights, remedies,
powers and privileges so affected are of material
importance to National City,
then National City shall, by giving notice to Borrower,
declare all of the Obligations, including, without limitation,
the entire unpaid principal of the Notes, all of the unpaid
interest accrued thereon and any and all other sums due and
payable by Borrower to National City under this Agreement, any
Note, and any of the other Loan Documents, to be immediately
due and payable, and, thereupon, such Obligations shall (if
not already due and payable) forthwith become and be due and
payable without further notice or other formalities of any
kind, all of which are hereby expressly waived.
(c) If National City shall reasonably determine that any law, rule
or regulation not in effect as of the date hereof regarding
capital adequacy, or in the event of any change in any
existing such law, rule or regulation or in the interpretation
or administration thereof by any governmental authority,
central bank or comparable agency charged with the
interpretation or administration thereof, or compliance by
National City with any request or directive regarding capital
adequacy (whether or not having the force of law) from any
such authority, central bank or comparable agency, has or
would have the effect of reducing the rate of return on
National City's capital, as a consequence of its obligations
hereunder, to a level below that which National City could
have achieved but for such adoption, change or compliance
(taking into consideration National City's policies with
respect to capital adequacy) by any amount deemed by National
City to be material, then Borrower shall pay to National City
upon demand such amount or amounts, in addition to the amounts
payable under the other provisions of this Agreement or any
other Loan Document, as will compensate National City for such
reduction. Determinations by National City of the additional
amount or amounts required to compensate National City in
respect of the foregoing shall be conclusive in the absence of
manifest error. In determining such amount or amounts,
National City may use any reasonable averaging and attribution
methods of general application.
SECTION 2.10 INDEMNIFICATION FOR LOSSES. Without derogating from any of the
other provisions of this Agreement or any of the other Loan Documents, Borrower
hereby absolutely and unconditionally agrees to indemnify National City, upon
demand at any time and as often as the occasion therefor may require, against
any and all claims, demands, suits, actions, damages, losses, costs, expenses
and all other liabilities whatsoever which National City or any of its directors
or officers may sustain or incur as a consequence of, on account of, in relation
to or in any way in connection with
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(a) any failure by Borrower to pay, punctually on the due date
thereof, any amount payable under this Agreement, any Note, or
any of the other Loan Documents beyond the expiration of the
period of grace (if any) applicable thereto, or
(b) the acceleration, in accordance with SECTION 6.2 hereof, of
the maturity of any of the Obligations, or
(c) any failure by Borrower to perform or comply with any of the
terms and provisions of this Agreement, any Note or any of the
other Loan Documents.
Such claims, demands, suits, actions, damages, losses, costs or expenses shall
include, without limitation
(i) any costs incurred by National City in carrying funds to cover
any overdue principal, overdue interest or any other overdue
sums payable by Borrower under this Agreement, any Note, or
any of the other Loan Documents;
(ii) any losses (but excluding losses of anticipated profit)
incurred or sustained by National City in liquidating or
re-employing funds acquired from third parties to make, fund
or maintain all or any part of the Loans.
SECTION 2.11 STATEMENTS BY NATIONAL CITY. A statement signed by an officer of
National City setting forth any additional amount required to be paid by
Borrower to National City, under Sections 2.9 and 2. 1 0 hereof shall be
submitted by National City to Borrower in connection with each demand made at
any time by National City under either of such Sections. A claim by National
City for all or any part of any additional amounts required to be paid by
Borrower under Sections 2.9 and 2.10 hereof may be made before or after any
payment to which such claim relates. Each such statement shall, in the absence
of manifest error, constitute conclusive evidence of the additional amount
required to be paid to National City.
SECTION 2.12 REQUESTS FOR ADVANCES. From and after the date of this Agreement,
Borrower may make additional requests for advances of Loan proceeds, which
advances shall not exceed the difference between
(x) the outstanding principal balance of the Loans on the date of
this Agreement, and
(y) $10,000,000.00.
(a) All requests for draws, advances, or disbursements of Loan
proceeds shall be made by and on behalf of Borrower in writing
on a Request for Advance in the form of Exhibit C hereto. Such
Requests for Advance may be transmitted to National City at
its Head Office via fax or telecopy, provided that Borrower
immediately notify National City by telephone of such
transmission. Each Request for Advance for LIBOR Rate Loans
shall be transmitted to and received by National City not
later
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than 11:00 a.m., Cleveland Time, on a Business Day which is
not less than two (2) Business Days prior to the Draw Date
specified on such Request for Advance. Each Request for
Advance for Prime Rate Loans shall be transmitted to and
received by National City not later than 11:00 a.m., Cleveland
Time, on a Business Day which is not less than one (1)
Business day prior to the Draw Date specified in such Request
for Advance. All Requests for Advance shall be accompanied by
such documents, reports and other materials as may be
necessary to enable National City) to confirm that the
conditions precedent to the disbursement of such requested
Loan have been satisfied.
(b) National City shall disburse the proceeds of each Loan to
Borrower, in immediately available funds not later than Noon,
Cleveland time, on the Draw Date described therefor, provided
that:
(i) Borrower shall have provided National City with a
Request for Advance for such Loan as and when
provided above; and
(ii) all of the conditions precedent applicable to such
Loan under Article 3, below, shall be satisfied as at
the Draw Date as may be applicable to such Loan.
ARTICLE 3
CONDITIONS PRECEDENT TO DISBURSEMENTS
SECTION 3.1 CONDITIONS PRECEDENT TO DISBURSEMENTS. The obligation of National
City to make or disburse the proceeds of any Loan hereunder shall be subject in
each case to the satisfaction, prior thereto or concurrently therewith, of each
of the following conditions precedent:
(a) LEGALITY OF TRANSACTIONS. It shall not be unlawful
(i) for National City to perform any of its agreements or
obligations under any of the Loan Documents to which
such Person is a party on the Draw Date of such Loan,
or
(ii) for Borrower to perform any of its agreements or
obligations under any of the Loan Documents.
(b) REPRESENTATIONS AND WARRANTIES. Each of the representations
and warranties made by or on behalf of Borrower to National
City in this Agreement (including any form of this Agreement
prior to amendment on the date hereof) or any other Loan
Document
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(i) shall be true and correct when made and
(ii) shall, for all purposes of this Agreement, be deemed
to be repeated on and as of the date of the
Borrower's Request for Advance for such Loan and
shall be true and correct in all material respects as
of such date.
(c) PERFORMANCE, ETC. Borrower shall have duly and properly
performed, complied with and observed, in all material
respects, its covenants, agreements and obligations contained
in this Agreement (including any form of this Agreement prior
to amendment on the date hereof) or in all of the other Loan
Documents to which it is a party.
(d) NO DEFAULT. No event shall have occurred on or prior to the
Draw Date for each such Loan and be continuing on such date,
and no condition shall exist on such date which constitutes a
Default or Event of Default, and the making of such Loan shall
not result in a Default or an Event of Default.
(e) PROCEEDINGS AND DOCUMENTS. All corporate, governmental and
other proceedings in connection with the transactions
contemplated hereby and by the other Loan Documents, and all
instruments and documents incidental thereto, shall be
completed and in place (and, to the extent required by
National City, duly recorded) in form and substance
satisfactory to National City, and National City shall have
received all such counterpart originals or certified or other
copies of all such instruments and documents as National City
shall have reasonably requested.
(f) CERTIFICATES. Prior to or on the date hereof, a Certificate,
dated as of the date hereof, of the secretary of Borrower
certifying
(i) that Borrower's Articles of Incorporation and By-laws
or Code of Regulations have not been amended since
April 29, 1996 (or certifying that true, correct and
complete copies of any amendments are attached),
(ii) that copies of resolutions of the Board of Directors
of Borrower are attached with respect to the approval
of this Agreement and of the matters contemplated
hereby and authorizing the execution, delivery and
performance by Borrower of this Agreement and each
other document to be delivered pursuant hereto and
(iii) as to the incumbency and signatures of the officers
of Borrower signing this Agreement and each other
document to be delivered pursuant hereto, shall have
been delivered to National City (in form and
substance acceptable to National City).
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(g) OTHER APPROVALS. National City shall have received such other
approvals, opinions, certificates, instruments and documents
as it may reasonably request.
ARTICLE 4
AFFIRMATIVE COVENANTS OF BORROWER
Borrower covenants with and warrants to National City that, from and after the
date hereof and until all of the Obligations are paid and satisfied in full, it
shall comply with, observe, perform or fulfill all of the covenants set forth in
this Article 4 applicable to it.
SECTION 4.1 REPORTS AND OTHER INFORMATION.
(a) Borrower shall provide to National City as soon as available,
and in any event within 45 days after the end of each of the
first three quarters of each fiscal year of Borrower, balance
sheets of Borrower and its Consolidated Subsidiaries as of the
end of such quarter, and statements of income and cash flow of
Borrower and its Consolidated Subsidiaries for the period
commencing at the end of the previous fiscal year and ending
with the end of such quarter, certified by the chief financial
officer, principal accounting officer or chief executive
officer of Borrower, together with a certificate of such
officer stating that of the date of such certificate and to
the best of his knowledge after reasonable inquiry no event
has occurred which constitutes a Default or Event or, if a
Default or Event of Default has occurred and is continuing, a
statement as to the nature thereof and the action which
Borrower has taken or proposes to take with respect thereto,
and further setting out in such detail as may reasonably be
required by National City
(i) Borrower's compliance with the requirements of
Article 5 hereof, and
(ii) such other information as may reasonably be requested
the by National City with respect to Borrower or
Borrower's business or Property.
(b) Borrower shall provide to National City as soon as available
and in any event within 90) days after the end of each fiscal
year of Borrower a copy of the annual financial statements of
Borrower and its Consolidated Subsidiaries for such year,
including therein a copy of the balance sheets of Borrower and
its Consolidated Subsidiaries as of the end of such fiscal
year and statements of income and statements of cash flow and
statements of Shareholders' Equity of Borrower and its
Consolidated Subsidiaries, certified by Borrower's
Accountants, together with a certificate of the chief
financial officer, principal accounting officer or chief
executive officer of Borrower stating that, as of the date of
such certificate, to the best of his knowledge and after
reasonable inquiry, no event has occurred which constitutes a
Default or Event of Default, or, if any Default or Event of
Default and is continuing, a
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statement as to the nature thereof and the action which
Borrower has taken or proposes to take with respect thereto
and further setting out in such detail as may reasonably be
required by National City
(i) Borrower's compliance with the requirements of
Article 5 hereof, and
(ii) such other information as may be reasonably requested
by National City with respect to Borrower's business
or Property.
(c) Borrower shall provide to National City, promptly after the
sending or filing thereof, copies of all reports which
Borrower sends to its shareholders, and copies of all reports
and registration statements which Borrower files with the
Securities and Exchange Commission.
(d) Borrower shall provide to National City as soon as possible,
and in any event within five (5) days after the occurrence
thereof, any information as to the occurrence of a Default or
an Event of Default continuing on the date of such statement,
together with a statement of the chief financial officer or
treasurer of Borrower setting forth the details of such
Default or Event of Default and the action which Borrower
proposes to take with respect thereto.
(e) Borrower shall provide on an annual basis to National City, as
soon as possible, the certificate of Borrower's chief
executive officer, chief financial officer or principal
accounting officer stating that Borrower qualified as a REIT
under Sections 856-860 of the Code (or any successor
provisions thereto) for such fiscal year and that it is in a
position to qualify as such REIT for its current fiscal year,
and covering such other matters relative to Borrower's
performance of its obligations hereunder as National City may
reasonably request.
(f) Borrower shall also provide National City with such other
information relating to Borrower (including, without
limitation, any business plan of Borrower) as National City
may from time to time reasonably request.
SECTION 4.2 MAINTENANCE OF PROPERTY; INSURANCE.
(a) Borrower covenants and agrees to keep and maintain all of its
Property in good repair, working order and condition,
reasonable wear and tear excepted, and from time to time to
make, all proper repairs, renewals or replacements,
betterments and improvements thereto so that the business
carried on in connection therewith may be properly and
advantageously conducted at all times;
(b) Borrower covenants and agrees to keep all of its Properties
insured against loss or damage by theft, fire, smoke,
sprinklers, riot and explosion, such insurance (the
"INSURANCE") to be in such form, in such amounts and against
such other risks and
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hazards as are customarily maintained by other Persons
operating similar businesses and having similar properties in
the same general areas, including but not limited to liability
coverage, with an insurer which is financially sound and
reputable and which has been accorded a rating by A.M. Best
Company, Inc. (or any successor rating agency) of A-/X (or any
replacement rating of equivalent stature) or better (a
"QUALIFIED INSURER"). In the event that an insurer ceases to
be a Qualified Insurer during the term of any Insurance
policy, Borrower shall replace such coverage, at the end of
the then-current policy term, by a policy issued by a
Qualified Insurer. Borrower shall, in addition, require that
the insurer with respect to each such Insurance policy provide
for at least thirty (30) days' advance written notice of any
cancellation or termination of, or other change of any nature
whatsoever in, the coverage provided under any such policy.
SECTION 4.3 CONSOLIDATED NET WORTH. Borrower shall maintain a Consolidated Net
Worth of not less than the sum of
(a) $300,000,000.00, plus
(b) 90% of the aggregate proceeds received by Borrower (net of
customary related fees and expenses) in connection with any
offering of stock in Borrower after the Closing Date and on or
prior to the date such determination of Consolidated Net Worth
is made.
SECTION 4.4 INDEBTEDNESS AND CASH FLOW COVENANTS. Borrower on a consolidated
basis with its Subsidiaries shall not, as of the last day of any fiscal quarter,
permit:
(a) Consolidated Outstanding Indebtedness to exceed 55% of
Consolidated Market Value;
(b) Consolidated Secured Indebtedness to exceed 35% of
Consolidated Market Value;
(c) the Value of Unencumbered Assets to be less than 2.0 times the
Consolidated Senior Unsecured Indebtedness; and
(d) Consolidated Cash Flow to be less than 2.0 times the
Consolidated Debt Service, based on the most recent two (2)
fiscal quarter results, for which Borrower has reported
results to National City annualized.
SECTION 4.5 CORPORATE EXISTENCE.
(a) Borrower shall make all filings under the Code necessary to
preserve and maintain
(i) its qualifications as a REIT under the Code, and
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(ii) the applicability to Borrower and its shareholders of
the method of taxation provided for in Section 857(b)
of the Code (and any successor provision thereto).
(b) Borrower shall each preserve and maintain its existence and
all of its rights, franchises and privileges as an Ohio
corporation and maintain all requisite authority to conduct
their businesses in substantially the same manner as they are
presently conducted where the failure to do so could
reasonably be expected to have a Material Adverse Effect and,
specifically, Borrower may not undertake any business other
than the acquisition, development, ownership, management,
operation and leasing of shopping centers and business centers
and ancillary businesses specifically related to such type of
properties.
(c) Borrower shall at all times
(i) remain a corporation listed and in good standing on
the New York Stock Exchange, and
(ii) preserve and maintain its status as a
self-administered REIT.
SECTION 4.6 COMPLIANCE WITH LAWS. Borrower will promptly notify National City in
the event that Borrower receives any notice, claim or demand from any
governmental agency which alleges that Borrower is in violation of any of the
terms of, or has failed to comply with any applicable order issued pursuant to,
any Federal, state or local statute regulating its operation and business.
SECTION 4.7 NOTICE OF LITIGATION: JUDGMENTS. Borrower shall furnish or cause to
be furnished to National City, promptly (and, in any event, within five (5)
Business Days) after Borrower shall have first become aware of the same, a
written notice setting forth full particulars of and what action Borrower is
taking or proposes to take with respect to
(a) any final judgment in an amount exceeding $10,000,000.00
rendered against Borrower or any Affiliate of Borrower;
(b) the commencement or institution of any legal or administrative
action, suit, proceeding or investigation by or against
Borrower in or before any court, governmental or regulatory
body, agency, commission or official, board of arbitration or
arbitrator, the outcome of which could materially and
adversely affect Borrower's current or future financial
position, assets, business, operations or prospects, or could
prevent or impede the implementation or completion, observance
or performance of any of the arrangements or transactions
contemplated by any of the Loan Documents; or
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(c) the occurrence of any adverse development not previously
disclosed by Borrower to National City in writing, in any such
action, suit, proceeding or investigation.
SECTION 4.8 NOTICE OF OTHER EVENTS.
(a) If (and on each occasion that) any event shall occur or any
condition shall develop which constitutes a Default or an
Event of Default, then, promptly (and, in any event, within
five (5) Business Days) after Borrower shall have first become
aware of the same, Borrower will furnish or cause to be
furnished to National City a written notice specifying the
nature and the date of the occurrence of such event or (as the
case may be), the nature and the period of existence of such
condition and what action Borrower is taking or propose to
take with respect thereto.
(b) Immediately upon Borrower's first becoming aware of any of the
following occurrences, Borrower will furnish or cause to be
furnished to National City written notice with full
particulars of
(i) the business failure, insolvency or bankruptcy of
Borrower;
(ii) any material labor dispute, any attempt by any labor
union or organization representatives to organize or
represent employees of Borrower, or any unfair labor
practices or proceedings of the National Labor
Relations Board with respect to Borrower; or any
defaults or events of default under any material
agreement of Borrower or any material violations of
any laws, regulations, rules or ordinances of any
governmental or regulatory body by Borrower or with
respect to any of Borrower's Property.
SECTION 4.9 INSPECTIONS. Borrower shall permit any officer, employee, consultant
or other representative or agent of National City to visit and inspect, from
time to time and at any reasonable time, after prior notice to Borrower, any of
the assets or Property owned or held under lease by Borrower and, to examine the
books of account, records, reports and the papers (and to make copies thereof
and to take extracts therefrom) of Borrower and to discuss the affairs, finances
and accounts of Borrower with the directors and executive officers, as the case
may be, of Borrower.
SECTION 4.10 PAYMENT OF TAXES AND OTHER CLAIMS. Borrower shall pay and discharge
promptly all taxes, assessments and other governmental charges or levies at any
time imposed upon it or upon its income, revenues or Property, as well as all
claims of any kind (including claims for labor, material or supplies) which, if
unpaid, might by law become a Lien or charge upon all or any part of its income,
revenues or Property. Notwithstanding the foregoing to the contrary, Borrower
may, provided that there is not then an Event of Default hereunder, contest the
propriety or amount of any such taxes, assessments or governmental charges, or
of any such claims, if
(a) such contest is instituted in good faith and prosecuted with
reasonable diligence;
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(b) such contest shall preclude the sale or forfeiture of the
affected Property (or Borrower shall provide National City
with such reasonable security or other assurances as may be
requested by National City in connection with such contest);
and
(c) Borrower shall indemnify National City of and from any and all
liability, loss, cost or expense incurred by or asserted
against any such party in connection with, or in consequence
of, any such contest.
SECTION 4.11 PAYMENT OF INDEBTEDNESS. Borrower will duly and punctually pay or
cause to be paid the principal and interest on the Loans and all fees and other
amounts payable hereunder or under the Loan Documents as and when required by
this Agreement and/or the other Loan Documents. Borrower shall pay all other
Indebtedness (whether existing on the date hereof or arising at any time
thereafter) as and when the same is due and payable and prior to the expiration
of any period of notice or grace applicable thereto.
SECTION 4.12 PERFORMANCE OF OBLIGATIONS UNDER THE LOAN. Borrower will duly and
properly perform, observe and comply with all of its agreements, covenants and
obligations under this Agreement and each of the other Loan Documents to which
it is a party.
SECTION 4.13 GOVERNMENTAL CONSENTS AND APPROVALS.
(a) Borrower will obtain or cause to be obtained all such
approvals, consents, orders, authorizations and licenses from,
give all such notices promptly to, register, enroll or file
all such agreements, instruments or documents promptly with,
and promptly take all such other action with respect to, any
governmental or regulatory authority, agency or official, or
any central bank or other fiscal or monetary authority, agency
or official, as may be required from time to time under any
provision of any applicable law:
(i) for the performance by Borrower of any of its
agreements or obligations under the Notes, this
Agreement or any of the other Loan Documents to which
it is a party or for the payment by Borrower to
National City at its Head Office of any sums which
shall become due and payable by Borrower to National
City thereunder;
(ii) to ensure the continuing legality, validity, binding
effect or enforceability of the Notes or any of the
other Loan Documents or of any of the agreements or
obligations thereunder of Borrower, or either of
them; or
(iii) to continue the proper operation of the business and
operations of Borrower.
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(b) Borrower shall duly perform and comply with the terms and
conditions of all such approvals, consents, orders,
authorizations and Licenses and Permits from time to time
granted to or made upon Borrower.
SECTION 4.14 NOTICE AS TO CERTAIN DOCUMENTS. If (and on each occasion that) any
of the following events shall occur:
(a) the charter or other organizational documents of Borrower
shall at any time be modified or amended in any respect
whatever; or
(b) the by-laws or code of regulations of Borrower shall at any
time be modified or amended in any respect whatever;
then promptly (and, in any event, within one (1) Business Day) after the
occurrence of any such event, Borrower shall furnish National City with a true
and complete copy of each such modification, amendment or supplement.
SECTION 4.15 NOTICE OF TERMINATION OF CERTAIN DOCUMENTS.
(a) If (and on each occasion that) any of the following events
shall occur:
(i) any Loan Document shall at any time be terminated,
canceled or rescinded for any reason whatever; or
(ii) any action at law, suit in equity or other legal
proceeding shall at any time be commenced or
threatened in writing by any person
(A) to terminate, cancel or rescind any Loan
Document, or
(B) to enforce any other Person's performance or
observance of or compliance with any
covenants, agreements or obligations under
any Loan Document; or
(iii) any Person which is a party to or otherwise bound by
any Loan Document shall fail or refuse to perform,
comply with or observe or shall otherwise breach any
one or more of its covenants, agreements or
obligations under such Loan Document;
then Borrower will promptly (and, in any event, within one (1)
Business Day) after Borrower shall have first become aware of
the occurrence of any such event, furnish to National City
written notice setting forth the particulars thereof.
(b) Borrower will take or cause to be taken, promptly and without
any expense to National City, all such action as may be
required to prevent, and will refrain from
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taking any action that might cause, the termination,
cancellation, amendment or rescission of this Agreement or any
of the other Loan Documents.
SECTION 4.16 ENVIRONMENTAL MATTERS. Borrower and its Subsidiaries shall
(a) Comply with, and use all reasonable efforts to ensure
compliance by all tenants and subtenants, if any, with, all
applicable Environmental Laws and obtain and comply with and
maintain, and use all reasonable efforts to ensure that all
tenants and subtenants obtain and comply with and maintain,
any and all licenses, approvals, notifications, registrations
and permits required by applicable Environmental Laws, except
to the extent that failure to do so could not be reasonably
expected to have a Material Adverse Effect; provided that in
no event shall Borrower or its Subsidiaries be required to
modify the terms of leases, or renewals thereof, with existing
tenants
(i) at Projects owned by Borrower or its Subsidiaries as
of the date hereof, or
(ii) at Projects hereafter acquired by Borrower or its
Subsidiaries as of the date of such acquisition,
to add provisions to such effect.
(b) Conduct and complete all investigations, studies, sampling and
testing and all remedial, removal and other actions required
under Environmental Laws and promptly comply in all material
respects with all lawful orders and directives of all
Governmental Authorizes regarding Environmental Laws, except
to the extent that
(i) the same are being contested in good faith by
appropriate proceedings and the pendency of such
proceedings could not be reasonably expected to have
a Material Adverse Effect or
(ii) Borrower have determined in good faith that
contesting the same is not in the best interests of
Borrower and its Subsidiaries and the failure to
contest the same could not be reasonably expected to
have a Material Adverse Effect.
(c) Defend, indemnify and hold harmless National City and its
officers, and directors, from and against any claims, demands,
penalties, fines, liabilities, settlements, damages, costs and
expenses of whatever kind or nature known or unknown,
contingent or otherwise, arising out of, or in any way
relating to the violation of, noncompliance with or liability
under any Environmental Laws applicable to the operations of
Borrower, its Subsidiaries or the Projects, or any orders,
requirements or demands of Governmental Authorities related
thereto, including, without limitation, attorney's and
consultant's fees, investigation and laboratory fees, response
costs, court costs and litigation expense, except to the
extent that any of the
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foregoing arise our of the gross negligence or willful
misconduct of the party seeking indemnification thereof. This
indemnity shall continue in full force and effect regardless
of the termination of this Agreement
(d) Prior to the acquisition of a new Project after the Closing
Date, perform or cause to be performed an environmental
investigation which investigation shall at a minimum comply
with ACSM standards. In connection with any such
investigation, Borrower shall cause to be prepared a report of
such investigation, to be made available to National City upon
reasonable request, for informational purposes and to assure
compliance with the specifications and procedures.
SECTION 4.17 FURTHER ASSURANCES. Borrower will execute, acknowledge and deliver,
or cause to be executed, acknowledged and delivered, any and all such further
assurances and other agreements or instruments, and take or cause to be taken
all such other action, as shall be reasonably requested by National City from
time to time in order to give full effect to any of the Loan Documents.
SECTION 4.18 BORROWER'S DEPOSITORY ACCOUNTS. Borrower shall maintain a
depository relationship with National City, including without limitation demand
deposit, time deposit, concentration, cash management and zero balance accounts
to the extent consistent with Borrower's lending relationships with other
commercial banks.
SECTION 4.19 USE OF PROCEEDS. Borrower shall use all Loan proceeds only for
purposes permitted by Section 2.7 of this Agreement.
ARTICLE 5
---------
NEGATIVE COVENANTS OF BORROWER
------------------------------
Borrower covenants with and represents and warrants to National City that from
and after the date hereof and until all of the Obligations are paid and
satisfied in full:
SECTION 5.1 LIMITATION ON NATURE OF BUSINESS. Borrower will not materially alter
the nature or character of its business as a self-administered and self-managed
Real Estate Investment Trust operating as a fully integrated real estate company
which acquires, develops, owns, leases and manages shopping centers and business
centers, generally as carried on at the date hereof
SECTION 5.2 LIMITATION ON CONSOLIDATION AND MERGER. Borrower shall not at any
time consolidate with or merge into or with any Person or Persons or enter into
or undertake any plan or agreement of consolidation or merger with any Person,
provided, however, that this Section 5.2 shall not prohibit Borrower from
(a) merging any one or more of Borrower's Consolidated
Subsidiaries with or into Borrower; or
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(b) from entering into or consummating any merger or consolidation
transaction in which Borrower is the surviving entity,
provided that upon the completion of any transaction described
in this Section 5.2(b) Borrower shall remain in compliance
with all of its obligations and agreements under this
Agreement.
SECTION 5.3 LIMITATION ON DISTRIBUTIONS, DIVIDENDS, ACQUISITIONS AND
INVESTMENTS.
(a) Except with respect to Distributions made by Borrower in the
ordinary course of its business, including but not limited to
such Distributions as may be necessary to preserve Borrower's
status as a REIT, Borrower shall not declare or pay any
Distribution or cash dividends of any kind on any shares of
any class in its capital
(i) if dividends paid on account of any fiscal quarter,
in the aggregate, would exceed 95% of Funds From
Operations for such fiscal quarter;
(ii) if dividends paid on account of any fiscal year, in
the aggregate, would exceed 90% of Funds From
Operations for such fiscal year; or
(iii) if, at the time of such payment or Distribution,
there shall have occurred and be continuing any Event
of Default hereunder or under any Loan Document.
(b) Borrower shall not at any time make or suffer to exist any
Investments (including, without limitation, loans and advances
to, and other Investments in, Subsidiaries), or commitments
therefor, or become or remain a partner in any partnership or
joint venture, or to make any Acquisition of any Person,
except:
(i) Cash Equivalents;
(ii) Investments in existing Subsidiaries, Investments in
Subsidiaries formed for the purpose of acquiring
Properties, Investments in joint ventures and
partnerships engaged solely in the business of
purchasing, developing, owning, operating, leasing
and managing shopping centers and business centers
and Investments in existence on the date hereof and
described in SCHEDULE 5.3 hereto;
(iii) transactions permitted pursuant to Section 5.2; and
(iv) Acquisitions of Persons whose primary operations
consist of the ownership, development, operation and
management of shopping centers and business centers
provided that, after giving effect to such
Acquisitions and Investments, Borrower continues to
comply with all of its covenants herein. Acquisitions
permitted pursuant to this Section 5.3(b) shall be
deemed to be "PERMITTED ACQUISITIONS".
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SECTION 5.4 ACQUISITION OF MARGIN SECURITIES. Borrower shall not own, purchase
or acquire (or enter into any Contract to purchase or acquire) any "margin
security" as defined by any regulation of the Federal Reserve Board as now in
effect or as the same may hereafter be in effect unless, prior to any such
purchase or acquisition or entering into any such contract, National City shall
have received an opinion of counsel satisfactory to National City to the effect
that such purchase or acquisition will not cause this Agreement or the Notes to
be in violation of Regulation G, T, U, X or any other regulation of the Federal
Reserve Board then in effect.
SECTION 5.5 SALE AND LEASEBACK. Borrower shall not sell or transfer a
Substantial Portion of its Property in order to concurrently or subsequently
lease such Property as lessee.
SECTION 5.6 LIENS. Borrower shall not create, incur or suffer to exist any Lien
in, of or on the Property of Borrower, except:
(a) Liens for taxes, assessments or governmental charges or levies
on its Property if the same shall not at the time be
delinquent or thereafter can be paid without penalty, or are
being contested in good faith and by appropriate proceedings
and for which adequate reserves shall have been set aside on
its books;
(b) Liens imposed by law, such as carriers, warehousemen's and
mechanic's liens and other similar liens arising in the
ordinary course of business which secure payment of
obligations not more than 60-days past due or which are being
contested in good faith by appropriate proceedings and for
which adequate reserves shall have been set aside on its
books;
(c) Liens arising out of pledges or deposits under worker's
compensation laws, unemployment insurance, old age pensions,
or other social security or retirement benefits, or similar
legislation;
(d) easements, restrictions and such other encumbrances or charges
against real property as are of a nature generally existing
with respect to properties of a similar character and which do
not in any material way affect the marketability of the same
or interfere with the use thereof in the business of Borrower;
(e) Liens on Projects existing on the date hereof which secure
Indebtedness as described in SCHEDULE 5.6 hereto: and
(f) Liens other than Liens described in subsections (a) through
(e) above arising in connection with any Indebtedness
permitted hereunder to the extent such Liens will not result
in a Default in any of Borrower's covenants herein.
Liens permitted pursuant to this Section 5.6 shall be deemed to be "PERMITTED
LIENS".
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SECTION 5.7 AFFILIATES. Borrower shall not enter into any transactions
(including, without limitation, the purchase or sale of any Property or service)
with, or make any payment or transfer to, any Affiliate except in the ordinary
course of business and pursuant to the reasonable requirements of Borrower's
business and upon fair and reasonable terms no less favorable to Borrower than
Borrower would obtain in a comparable arms-length transaction.
SECTION 5.8 FINANCIAL UNDERTAKINGS. Borrower shall not enter into or remain
liable upon any Financial Undertaking, except to the extent required to protect
Borrower against increases in interest payable to it under variable interest
Indebtedness.
SECTION 5.9 VARIABLE INTEREST INDEBTEDNESS. Borrower shall not at any time
permit the outstanding principal balance of Indebtedness which bears interest at
an interest rate that is not fixed through the maturity date of such
Indebtedness to exceed $175,000,000.00, unless all of such Indebtedness in
excess of $175,000,000.00 is subject to a swap, rate cap or other interest rate
management program approved by National City that effectively converts the
interest rate on such excess to a fixed rate.
ARTICLE 6
---------
EVENTS OF DEFAULT; REMEDIES
---------------------------
SECTION 6.1 EVENTS OF DEFAULT. The occurrence of any one or more of the
following events shall constitute an "Event of Default":
(a) PRINCIPAL AND INTEREST. Any principal, interest or any other
sum payable under this Agreement or the Notes shall not be
paid within five (5) days of when due;
(b) REPRESENTATION AND WARRANTIES. Any representation or warranty
at any time made by or on behalf of Borrower in this
Agreement, any Loan Document or in any certificate, written
report or statement furnished to National City in connection
therewith shall prove to have been untrue, incorrect or
breached in any material respect on or as of the date on which
the same was made or was deemed to have been made or repeated;
(c) CERTAIN COVENANTS. Borrower shall fail to comply with the
covenants set forth in Sections 4.2(b), 4.5(a),or Article 5;
(d) OTHER COVENANTS. Borrower shall fail to perform, comply with
or observe any other covenant or agreement contained in this
Agreement and such failure or breach shall continue for more
than twenty (20) days after the earlier of the date on which
Borrower shall have first become aware of such failure or
breach or National City shall have first notified Borrower of
such failure or breach (provided, however, that solely with
respect to defaults of the nature described in this Section
6.1(d) which
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cannot be cured by the payment of money and cannot
using appropriate diligence be cured within such 20-day
period, Borrower shall not be deemed to have defaulted
hereunder provided that Borrower, shall commence reasonable
curative action with respect to such matter within such 20-day
period and shall thereafter diligently and continuously
prosecute the same to a timely completion);
(e) LOAN DOCUMENTS. Borrower shall fail to observe or perform in
any material fashion any of its obligations or undertakings
under any Loan Document other than this Agreement, and such
failure shall continue beyond the applicable period of grace
(if any) provided therein, or any Loan Document shall cease to
be legal, valid, binding or enforceable in accordance with its
terms;
(f) LITIGATION. Any action at law, suit in equity or other legal
or administrative proceeding to amend, cancel, revoke or
rescind any Loan Document shall be commenced by or on behalf
of Borrower, or by any court or any other governmental
authority or any court or any other governmental authority
shall make a determination, or issue a judgment, order, decree
or ruling to the effect that, any one or more of the
covenants, agreements or obligations of Borrower hereunder or
under any one or more of the other Loan Documents are illegal,
invalid or unenforceable in accordance with the terms thereof,
(g) INSOLVENCY-VOLUNTARY. If Borrower shall:
(i) take any action for the termination, winding up,
liquidation or dissolution of its operations;
(ii) make a general assignment for the benefit of
creditors, become insolvent or be unable to pay its
debts as they mature;
(iii) file a petition in voluntary liquidation or
bankruptcy;
(iv) file a petition or answer or consent seeking the
reorganization of its business, or the readjustment
of any Indebtedness;
(v) commence any case or proceeding under applicable
insolvency or bankruptcy laws now or hereafter
existing;
(vi) consent to the appointment of any receiver,
administrator, custodian, liquidator or trustee of
all or any part of its assets or property;
(vii) take any corporate action for the purpose of
effecting any of the foregoing; or
(viii) be adjudicated as bankrupt or insolvent;
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(h) INSOLVENCY-INVOLUNTARY. If any petition for any proceedings in
bankruptcy or liquidation or for the reorganization or
readjustment of Indebtedness of Borrower shall be filed, or
any case or proceeding shall be commenced, under any
applicable bankruptcy or insolvency laws now or hereafter
existing, against Borrower, or any receiver, administrator,
custodian, liquidator or trustee shall be appointed for
Borrower or for all or any part of Borrower's assets or
Property, or any order for relief shall be entered in a
proceeding with respect to Borrower under the provisions of
the United States Bankruptcy Code, as amended, and such
proceeding or such appointment shall not be dismissed or
discharged, as the case may be, within forty-five (45) days
after the filing or appointment thereof;
(i) JUDGMENT. Any final and non-appealable judgment, order or
decree for the payment of money in excess of Ten Million
Dollars ($10,000,000) shall be rendered against Borrower, and
shall not be discharged within thirty (30) days after the date
of the entry thereof;
(j) ERISA. Any Termination Event shall occur and, as of the date
thereof or any subsequent date, the sum of the various
liabilities of Borrower and its ERISA Affiliates including,
without limitation, any liability to the Pension Benefit
Guaranty Corporation or its successor or to any other party
under Sections 4062, 4063, or 4064 of ERISA or any other
provision of law resulting from or otherwise associated with
such event exceeds One Million Dollars ($1,000,000); or
Borrower or any of its ERISA Affiliates as an employer under
any Multiemployer Plan shall have made a complete or partial
withdrawal from such Multiemployer Plans and the plan sponsors
of such Multiemployer Plans shall have notified such
withdrawing employer that such employer has incurred a
withdrawal liability requiring a payment in an amount
exceeding One Million Dollars ($1,000,000); or
(k) LOSS OF LICENSE OR PERMITS. Any of the Licenses and Permits
now held or hereafter acquired by Borrower shall be revoked or
terminated and not renewed and the absence of any such
Licenses and Permits would have a material adverse impact on
the business, Property, prospects, profits or condition
(financial or otherwise) of Borrower.
SECTION 6.2 ACCELERATION OF OBLIGATIONS. If any one or more of the Events of
Default shall at any time occur and be continuing:
(a) National City shall, by giving notice to Borrower (a "NOTICE
OF ACCELERATION"), declare all of the Obligations, including
the entire unpaid principal of the Notes, all of the unpaid
interest accrued thereon, and any and all other sums payable
by Borrower under this Agreement, the Notes, or any of the
other Loan Documents, to be immediately due and payable;
except that if there shall be an Event of Default under
Section 6.1(h) or (g), all of the Obligations, including the
entire unpaid
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balance of all of the Notes, all of the unpaid interest
accrued thereon and all (if any) other sums payable by
Borrower under this Agreement, the Notes or any of the other
Loan Documents shall automatically and immediately be due and
payable without notice to Borrower; and except further that if
there shall be an Event of Default under Section 6.1(g) or
(h), and if National City, in accordance with the terms of
this Agreement, shall give a Notice of Acceleration to
Borrower, Borrower shall not be required to pay any prepayment
penalties in connection with the acceleration of any of the
Obligations of Borrower. Thereupon, all of such Obligations
which are not already due and payable shall forthwith become
absolutely and unconditionally due and payable, without
presentment, demand, protest or any further notice or any
other formalities of any kind, all of which are hereby
expressly and irrevocably waived.
(b) National City may proceed to protect and enforce all or any of
its rights, remedies, powers and privileges under this
Agreement, the Notes or any of the other Loan Documents by
action at law, suit in equity or other appropriate
proceedings, whether for specific performance of any covenant
contained in this Agreement, any Note or any of the other Loan
Documents, or in aid of the exercise of any power granted to
National City herein or therein.
SECTION 6.3 NO IMPLIED WAIVER; RIGHTS CUMULATIVE. No delay on the part National
City in exercising any right, remedy, power or privilege hereunder, under any of
the other Loan Documents or provided by statute, at law in equity or otherwise
shall impair, prejudice or constitute a waiver of any such right, remedy, power
or privilege or be construed as a waiver of any Default or Event of Default or
as an acquiescence therein. No right, remedy, power or privilege conferred on or
reserved to National City under any of the Loan Documents or otherwise is
intended to be exclusive of any other right, remedy, power or privilege. Each
and every right, remedy, power and privilege conferred on or reserved to
National City under any of the Loan Documents or otherwise shall be cumulative
and in addition to each and every other right, remedy, power or privilege so
conferred on or reserved to National City, and may be exercised at such time or
times and in such order and manner as National City shall (in its sole and
complete discretion) deem expedient.
ARTICLE 7
---------
PROVISIONS OF GENERAL APPLICATION
---------------------------------
SECTION 7.1 DURATION. This Agreement shall continue in full force and effect and
the duties, covenants, and liabilities of Borrower hereunder and all the terms,
conditions, and provisions hereof relating thereto shall continue to be fully
operative until all Obligations to National City have been satisfied in full,
PROVIDED, HOWEVER that notwithstanding the provisions of this Section 7.1 all
Obligations shall be due and payable on the Maturity Date.
SECTION 7.2 NOTICES.
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(a) All notices and other communications pursuant to this
Agreements shall be in writing, either delivered in hand or
sent by recognized overnight delivery service or by
first-class mail, postage prepaid, addressed as follows:
(i) If to Borrower, to:
Developers Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Attn: William H. Schafer, Vice President and Chief
Financial Officer
with a copy to:
Developers Diversified Realty Corporation
34555 Chagrin Boulevard
Moreland Hills, Ohio 44022
Attn: Joan U. Allgood, Esq.,
General Counsel
(ii) If to National City, to:
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44101
Attn: Real Estate Industries Division,
Gary L. Wimer, Vice President
with a copy to:
National City Bank
1900 East Ninth Street
Cleveland, Ohio 44114
Attn: Law Department
or to such other addresses or by way of such telex and other numbers as
any party hereto shall have designated in a written notice to the other
parties hereto.
(b) Except as otherwise expressly provided herein, any notice or
other communication given under this Agreement or any other
Loan Document shall be deemed to have been duly given or made
and to have become effective when delivered in hand to the
party to which it is directed, or, if sent by overnight
delivery service or by first-class mail, postage prepaid, and
properly addressed in accordance with Section 7.2(a),
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(i) when received by the addressee; or
(ii) if sent by first-class mail, postage prepaid, on the
third (3rd) Business Day following the day of the
dispatch thereof, whichever shall be the earlier.
SECTION 7.3 SURVIVAL OF REPRESENTATIONS. All representations and warranties made
by or on behalf of Borrower in this Agreement or any of the other Loan Documents
shall be deemed to have been relied upon by National City notwithstanding any
investigation made by National City. All such representations and warranties
shall survive the making of each of the Loans until all of the Obligations shall
have been paid in full.
SECTION 7.4 AMENDMENTS. Each of the Loan, amended Documents may be modified or
supplemented in any respect whatever, only by a written instrument signed by
Borrower and National City.
SECTION 7.5 COSTS, EXPENSES, TAXES AND INDEMNIFICATION.
(a) Borrower absolutely and unconditionally agrees to pay to
National City, and to reimburse National City for, all
reasonable out-of-pocket costs and expenses (including
reasonable legal fees and expenses) which shall at any time be
incurred or sustained by National City or any of its directors
or officers as a consequence of or any way in connection with:
(i) the preparation, negotiation, execution and delivery
of the Loan Documents;
(ii) the continuation of the rights of National City in
connection with respect to any Loan;
(iii) preparation, negotiation, execution, or delivery of
any amendment or modification of any of the Loan
Documents; or
(iv) in the granting by National City of any consents,
approvals or waivers under any of the Loan Documents.
(b) Borrower absolutely and unconditionally agrees to pay to
National City and upon demand by National City at any time and
as often as the occasion therefor may require, all reasonable
out-of-pocket costs and expenses which shall be incurred or
sustained National City or its directors or officers as a
consequence of, on account of, in relation to or any way in
connection with the exercise, protection or enforcement any of
its rights, remedies, powers or privileges hereunder or under
any of the Loan Documents or in connection with any
litigation, proceeding or dispute arising from or related to
any of the Loan Documents (including, but not limited to, all
of the reasonable fees and disbursements of consultants, legal
advisers,
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accountants, experts and agents for National City, the
reasonable travel and living expenses away from home of
employees, consultants, experts or agents of National City,
and the reasonable fees of agents, consultants and experts of
National City for services rendered on its behalf).
(c) Borrower shall absolutely and unconditionally indemnify and
hold harmless National City against any and all claims,
demands, suits, actions, causes of action, damages, losses,
settlement payments, obligations, costs, expenses and all
other liabilities whatsoever which shall at any time or times
be incurred or sustained by National City or by any of their
respective shareholders, directors, officers, subsidiaries or
Affiliates on account of, or in relation to, or in any way in
connection with, any of the arrangements or transactions
contemplated by, associated with or ancillary to this
Agreement or any of the other Loan Documents, without regard
to whether all or any of the transactions contemplated by,
associated with or ancillary to this Agreement, or any of such
Loan Documents shall ultimately be consummated.
(d) Borrower hereby covenants and agrees that any sums expended
National City for which National City is entitled to
reimbursement under this Section 7.5 shall be due and payable
within thirty (30) days after Borrower's receipt of written
notice thereof from National City, and shall bear interest at
the Default Interest Rate from the thirtieth (30th) day after
the date on which Borrower receive such notice until the date
such payment is made in full.
(e) Borrower's indemnity obligations under this Section 7.5 shall
not extend to any losses, costs, expenses or damages
proximately caused by the gross negligence or willful
misconduct of any party which, absent this Section 7.5(e),
would be entitled to indemnification hereunder.
SECTION 7.6 SET-OFF. Borrower hereby confirms to National City the continuing
and immediate rights of set-off of National City with respect to all deposits,
balances and other sums credited by or due from National City or any of its
offices or branches to Borrower, which rights are in addition to any other
rights which National City may have under applicable law. If any principal,
interest or other sum payable by Borrower to National City under the Notes or
any of the Loan Documents is not paid punctually as and when the same shall
first become due and payable, or if any Event of Default shall at any time occur
and be continuing, any deposits, balances or other sums credited by or due from
National City or any of their respective offices or branches to Borrower, may,
without any prior notice of any kind to Borrower, and without any other
conditions precedent now or hereafter imposed by statute, rule or law or
otherwise (all of which are hereby expressly and irrevocably waived by
Borrower), be immediately set off, appropriated and applied by National City
toward the payment and satisfaction of the Obligations in such order and manner
as National City (in its sole and complete discretion) may determine.
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SECTION 7.7 BINDING EFFECT. This Agreement shall be binding upon and inure to
the benefit of the parties hereto and their respective successors and permitted
assigns; provided, however, that
(a) Borrower may not assign or delegate any of its rights or
obligations hereunder without the express prior written
consent of National City; and
(b) National City may assign or delegate its rights or obligations
hereunder.
SECTION 7.8 GOVERNING LAW; JURISDICTION AND VENUE.
(a) This instrument and the rights and obligations of all parties
hereunder shall be governed by and construed under the
substantive laws of the State of Ohio, without reference to
the conflict of laws principles of such state.
(b) National City and Borrower hereby designate all state and
federal courts of record sitting in Cleveland, Ohio as forums
where any action, suit or proceeding in respect of or arising
out of this Agreement, the Notes, Loan Documents, or the
transactions contemplated by this Agreement may be prosecuted
as to all parties, their successors and assigns, and each
hereby consents to the jurisdiction and venue of such courts.
Borrower waives any and all personal rights under the laws of
any other state to object to jurisdiction within the State of
Ohio for the purposes of litigation to enforce the
Obligations. In the event any such litigation shall be
commenced, Borrower agrees that service of process may be
made, and personal jurisdiction over Borrower obtained, by
service of a copy of the summons, complaint and other
pleadings required to commence such litigation upon Borrower's
appointed Agent for Service of Process in the State of Ohio,
which the undersigned hereof designates to be: Joan U.
Allgood, Esquire, 34555 Chagrin Boulevard, Moreland Hills,
Ohio 44022. Borrower recognizes and agrees that such
designation of agency has been created for Borrower's
convenience and benefit, and shall not be revoked, withdrawn,
or modified without the prior written consent of National
City.
SECTION 7.9 WAIVER JURY. AS A MATERIAL INDUCEMENT FOR NATIONAL CITY TO EXTEND
CREDIT AS PROVIDED HEREIN, AND AFTER HAVING THE OPPORTUNITY TO CONSULT COUNSEL,
BORROWER HEREBY EXPRESSLY WAIVES THE RIGHT TO TRIAL BY JURY IN ANY LAWSUIT OR
PROCEEDING RELATING TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS OR
ARISING IN ANY WAY FROM THE OBLIGATIONS.
SECTION 7.10 WAIVERS. Borrower waives notice of nonpayment, demand, notice of
demand, presentment, protest and notice of protest with respect to the
Obligations, or notice of acceptance hereof, notice of the Loans made, credit
extended, or any other action taken in reliance hereon, and all other demands
and notices of any description, except for those notices which are expressly
provided for herein. Borrower acknowledges and agrees that, as of the date
hereof, all of
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Borrower's outstanding loan obligations to National City are owed without any
offset, defense, claim or counterclaim of any nature whatsoever.
SECTION 7.11 INTEGRATION OF SCHEDULES AND EXHIBITS. The Exhibits and Schedules
annexed to this Agreement are part of this Agreement and are incorporated herein
by reference.
SECTION 7.12 HEADINGS. The table of contents, headings of the Articles, Sections
and paragraphs of this Agreement have been inserted for convenience of reference
only and shall not be deemed to alter, limit or affect the scope, meaning or
interpretation of any provision of this Agreement.
SECTION 7.13 COUNTERPARTS. This Agreement may be executed in any number of
counterparts, and signature pages from any counterpart may be appended to any
other counterpart. All such counterparts shall together constitute a single,
unified, agreement. In making proof of this Agreement, it shall not be necessary
to produce or account for more than one counterpart hereof signed by each of the
parties hereto.
SECTION 7.14 SEVERABILITY. If any provision of this Agreement or the application
thereof to any person or circumstance shall be invalid or unenforceable to any
extent, the balance of this Agreement and the application of all provisions of
this Agreement to all other persons and circumstances shall not be affected
thereby. Each provision of this Agreement shall remain valid and enforceable to
the fullest extent permitted by law.
SECTION 7.15 ONE GENERAL OBLIGATION. All Loans under this Agreement constitute
one loan, and all Obligations of Borrower under this Agreement and all of the
other Loan Documents constitute one general obligation. All of the rights of
National City contained in this Agreement shall likewise apply insofar as
applicable to any modification of or supplement to this Agreement. No officers,
directors, shareholders or employees of Borrower shall have any personal
liability for any obligations under this Agreement or as a result of any
documents or certificates delivered pursuant to this Agreement, except in cases
of actual fraud or willful misconduct; provided, however, that nothing in this
sentence shall be deemed in any way to limit the absolute and unconditional
liability of Borrower for the full and timely payment, observance and
performance of all of its obligations hereunder.
SECTION 7.16 CONFIDENTIALITY.
(a) Borrower acknowledges that from time to time financial
advisory, investment banking and other services may be offered
or provided to Borrower or one or more of its Affiliates by
National City, or by their Affiliates, and Borrower hereby
authorizes National City to share any information delivered to
it by Borrower or its Affiliates pursuant to this Agreement,
or in connection with their respective decisions to enter into
this Agreement, with any such Affiliate, it being understood
that any such Affiliate receiving such information shall be
bound by the provisions of clause (b) below as if it were a
bank hereunder.
-48-
54
(b) National City agrees to keep confidential, in accordance with
its customary procedures for handling confidential
information, any non-public information supplied to it by
Borrower pursuant to this Agreement which is identified by
Borrower as being confidential at the time the same is
delivered to National City. Notwithstanding the foregoing to
the contrary National City may disclose any such information:
(i) to the extent required by statute, rule, regulation
or judicial process,
(ii) to its counsel,
(iii) to regulatory personnel. auditors or accountants,
(iv) in connection with any litigation to National City is
a party,
(v) to an Affiliate of National City as provided in
clause (a) above, or
(vi) to any assignee or participant (or prospective
assignee or participant) so long as such assignee or
participant (or prospective assignee or participant)
agrees to be bound by the provisions hereof.
DEVELOPERS DIVERSIFIED REAL
CORPORATION
By: ________________________________
Name: William H. Schafer
Title: Vice President and Chief
Financial Officer
NATIONAL CITY BANK
By: ________________________________
Gary L. Wimer
Vice President
-49-
55
PROMISSORY NOTE
---------------
$10,000,000.00 Cleveland, Ohio
November 13, 1996
FOR VALUE RECEIVED, the undersigned, DEVELOPERS DIVERSIFIED REALTY CORPORATION,
an Ohio corporation ("BORROWER"), promises to pay to the order of NATIONAL CITY
BANK ("NATIONAL CITY"), at the main office of National City in Cleveland, Ohio,
the principal sum of
TEN MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side hereof or as may be entered in a loan account on National
City's books and records, or both), together with interest computed in the
manner provided in the Credit Agreement referred to below, which principal and
interest is payable in accordance with provisions in the Credit Agreement.
This Note is issued pursuant to a Revolving Credit Agreement dated as of
November 13, 1996, as amended from time to time (as amended, the "CREDIT
AGREEMENT") by and between Borrower and National City.
Reference is made to the Credit Agreement for the definitions of certain terms,
for provisions governing the making of subject loans, the acceleration of the
maturity thereof, rights of prepayment, and for other provisions to which this
note is subject. Any endorsement by the payee on the reverse side of this note
(or any allonge thereto) shall be presumptive evidence of the data so endorsed.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By: ________________________________
Name: William H. Schafer
Title: Vice President and Chief Officer
56
EXHIBIT A
---------
PAYMENT AUTHORIZATION
---------------------
DEVELOPERS DIVERSIFIED REALTY CORPORATION ("BORROWER") under the Revolving
Credit Facility dated as of November 13, 1996 ("CREDIT AGREEMENT") between
Borrower and NATIONAL CITY BANK ("NATIONAL CITY"), hereby notifies National City
that it is making a payment of $_________ in accordance with and pursuant to the
terms of the Credit Agreement.
The payment of $_______________ represents:
Principal $_____________________
Interest from _________ $_____________________
to __________
Fees $_____________________
Others (including LIBOR $_____________________
Breakage Costs)*
This payment of $____________ shall be transmitted to National City on
___________________ in the following manner:
Borrower hereby authorizes National City to transfer, withdraw, and/or deposit
the funds in accordance with the instructions above.
BORROWER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
Dated: ________________ By:_______________________________________
Name: ________________________________
Title:________________________________
* LIBOR Breakage Costs may not be payable at the time of such payment.
Borrower agrees to pay such breakage costs in accordance with the terms
of the Credit Agreement.
57
EXHIBIT B
---------
REQUEST FOR ADVANCE
-------------------
DEVELOPERS DIVERSIFIED REALTY CORPORATION ("BORROWER") hereby requests an
advance in the amount of $________________ pursuant to and in accordance with
the terms and conditions of the Revolving Credit Facility dated as of November
13, 1996 ("CREDIT AGREEMENT"), between NATIONAL CITY BANK ("NATIONAL CITY"), and
Borrower and Developers Diversified Finance Corporation.
Such advance in the amount of $ ___________________ shall be deposited to the
account of Borrower on the date hereof.
Please notify ___________________ at Borrower to confirm the transmittal of
funds.
To induce National City to make such advance, Borrower hereby represents to
National City as follows:
1. The Outstanding Amount (as such term is defined in the Credit
Agreement) shall not, giving effect to the advance hereby requested,
exceed the Maximum Commitment.
2. All of the representations and warranties made by the Borrower in the
Credit Agreement are true and correct on the date hereof, except for
any representation or warranty limited by its terms to a specific date.
3. No Default or Event of Default exists under the Credit Agreement.
4. The approval of this Request for Advance shall not be deemed to be a
waiver by National City of any Default or Event of Default by the
Borrower under the Credit Agreement.
BORROWER:
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
Dated: ______________ By:________________________________
Name:______________________________
Title:_____________________________
58
EXHIBIT C
---------
COMMERCIAL LOANS
LOAN DISBURSEMENT AUTHORIZATION
You are hereby authorized and directed to disburse the proceeds of the loan
which you are making to the undersigned in the following manner.
ISSUE CASHIER'S CHECK PAYABLE TO THE ORDER OF:
_____________________________________________________________ $____________
_____________________________________________________________ $____________
CREDIT ACCOUNT SHOWN BELOW:
NAME ACCT. #
DEVELOPERS DIVERSIFIED REALTY CORPORATION 2856056 $ PERIODIC ADVANCES
PAY EXISTING OBLIGATIONS(S) SHOWN BELOW:
_____________________________________________________________ $____________
_____________________________________________________________ $____________
OTHER (WIRE TRANSFER, INTER-DEPARTMENT TRANSFER):
_____________________________________________________________ $____________
_____________________________________________________________ $____________
_____________________________________________________________ $____________
ADDITIONAL ADVANCES, TO BE DISTRIBUTED UPON REQUEST, NOT TO EXCEED
TOTAL APPROVAL/NOTE.
DEVELOPERS DIVERSIFIED Total Disbursed $______________
REALTY CORPORATION
(an Ohio corporation) Total Approval/
Note $ 10,000,000.00
BY: _____________________________
TITLE: __________________________ DATE: 11/13/96
-------------------
59
Developers
Diversified
Realty Corporation
VIA MESSENGER
November 15, 1996
Mr. Gary Wimer
Real Estate Industries
National City Bank
1900 E. Ninth Street
Cleveland, Ohio 44114
RE: $10,000,000.00 Unsecured Revolving Credit Facility
Dear Gary:
Enclosed are the following original documents:
1 Revolving Credit Facility dated as of November 13, 1996, executed by
DDR;
2. Promissory Note in the principal amount of $10,000,000.00, executed by
DDR;
3. Secretary's Certificate, executed by Joan Allgood; and
4. Certificate of Incumbency.
The Secretary's Certificate has been revised. Per Joan Allgood's
discussion with Bill Smith, it was agreed that the resolutions adopted by the
Board of Directors regarding a borrowing of up to $50,000,000.00 were acceptable
for this transaction. I also enclose our standard incumbency certificate as all
officers of DDR have the authority to execute and deliver documents on behalf of
the corporation.
Thank you for your continued cooperation. Should you have any
questions, please call me of Bill Schafer.
Very truly yours,
Elizabeth A. Berry
Legal Assistant
Enclosures
cc: Joan Allgood, Esq.
William H. Schafer (w/enc.)
60
PROMISSORY NOTE
$10,000,000.00 Cleveland, Ohio
November 13, 1996
FOR VALUE RECEIVED, the undersigned, DEVELOPERS DIVERSIFIED REALTY CORPORATION,
an Ohio corporation ("BORROWER"), promises to pay to the order of NATIONAL CITY
BANK ("NATIONAL CITY"), at the main office of National City in Cleveland, Ohio,
the principal sum of
TEN MILLION DOLLARS
(or, if less, the aggregate unpaid principal balance from time to time shown on
the reverse side hereof or as may be entered in a loan account on National
City's books and records, or both), together with interest computed in the
manner provided in the Credit Agreement referred to below, which principal and
interest is payable in accordance with provisions in the Credit Agreement.
This Note is issued pursuant to a Revolving Credit Agreement dated as of
November 13, 1996, as amended from time to time (as amended, the "CREDIT
AGREEMENT") by and between Borrower and National City.
Reference is made to the Credit Agreement for the definitions of certain terms,
for provisions governing the making of subject loans, the acceleration of the
maturity thereof, rights of prepayment, and for other provisions to which this
note is subject. Any endorsement by the payee on the reverse side of this note
(or any allonge thereto) shall be presumptive evidence of the data so endorsed.
DEVELOPERS DIVERSIFIED REALTY
CORPORATION
By: ____________________________________
Name: William H. Schafer
Title: Vice President and Chief
Financial Officer
61
SECRETARY'S CERTIFICATE
The undersigned, being the duly elected, qualified and acting Secretary
of DEVELOPERS DIVERSIFIED REALTY CORPORATION, an Ohio corporation ("BORROWER"),
on this 15th day of November, 1996, certifies to NATIONAL CITY BANK ("NATIONAL
CITY"), as follows:
1. The Articles of Incorporation and Code of Regulations of Borrower
have not been amended or modified in any manner since April 25, 1995 and they
continue to remain in full force and effect.
2. On March 23, 1995, the Directors of the Borrower adopted the
resolutions set forth on Exhibit A attached hereto, and said resolutions have
not been amended, modified or rescinded and are in full force and effect on the
date hereof.
IN WITNESS WHEREOF, the undersigned has hereunto subscribed her name as
of the day and year first above written.
________________________________
Joan Allgood, Secretary
62
EXHIBIT A
RESOLVED, that the corporation borrow from time to time up to an
aggregate principal amount not to exceed Fifty Million Dollars ($50,000,000) at
any one time outstanding from a syndicate for which National City Bank will act
as agent (the "Lenders") to fund acquisitions of properties, the construction of
new facilities and for working capital and other corporate purposes for itself
and affiliated entities.
FURTHER RESOLVED, that any executive officer of the Corporation be, and
each of them acting alone hereby is, authorized for and on behalf of the
Corporation to execute and deliver a loan agreement, a security agreement, one
or more mortgages, one or more promissory notes and other related documents and
instruments (collectively, the "Loan Documents") , providing, among other
things, for an interest rate equal to (a) the prime rate announced from time to
time plus not in excess of 25 basis points or (b) LIBOR announced from time to
time plus not in excess of 200 basis points; an increased default interest rate
on overdue principal and interest payments; a maturity date of three years from
the date of the definitive agreement; representations, warranties and covenants
of the Corporation; events of default and the acceleration of indebtedness upon
the occurrence of an event of default; and reimbursement and indemnification of
the Lenders for expenses and losses incurred in connection with such borrowing,
including attorneys' fees; and such other and different terms and conditions as
the executive officer or officers executing the same may deem advisable and all
as negotiated and agreed upon by the officers or officer executing the same, the
execution of the Loan Documents to be conclusive evidence of such approval and
such authority.
63
CERTIFICATE OF INCUMBENCY
The undersigned, Joan Allgood, hereby certifies that:
1. She is the duly elected and acting Secretary of Developers
Diversified Realty Corporation, an Ohio corporation (the "Company"); and
2. Each of the officers of the Company whose name and signature appear
below is a duly elected, qualified and acting officer of the Company, holding
the office or offices of the Company set forth opposite his or her name, and the
signature set forth opposite his or her name is his or her own genuine
signature:
NAME TITLE SIGNATURE
Scott A. Wolstein President & Chief __________________________________________________
Executive Officer
James A. Schoff Executive Vice President __________________________________________________
& Chief Operating Officer
Joan Allgood Vice President, Secretary __________________________________________________
& General Counsel
Loren F. Henry Vice President & __________________________________________________
Director of Management
John R. McGill Vice President & __________________________________________________
Director of Development
William H. Schafer Vice President, Treasurer __________________________________________________
& Chief Financial Officer
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Company as of NOVEMBER 15, 1996.
______________________________
Joan Allgood, Secretary
64
The undersigned, Scott A. Wolstein, hereby certifies that he is the
duly elected and acting President of the Company and that Joan Allgood is the
duly elected and acting Secretary of the Company, that he is authorized on the
Company's behalf to deliver the foregoing certificate and that the matters set
forth in the foregoing certificate are true and correct.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
certificate in the name and on behalf of the Company as of NOVEMBER 15, 1996.
___________________________________
Scott A. Wolstein, President