1
CREDIT AGREEMENT
Dated
___________, 1999
among
EASTGROUP PROPERTIES, L.P.
EASTGROUP PROPERTIES, INC.
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION,
as Arranger, Book Manager and Administrative Agent
FIRST UNION NATIONAL BANK,
as Syndication Agent
PNC BANK, NATIONAL ASSOCIATION
as Documentation Agent
FIRST AMERICAN NATIONAL BANK,
operating as
DEPOSIT GUARANTY NATIONAL BANK
as Co-Agent
and
the Lenders
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TABLE OF CONTENTS
1. Definitions..............................................................................................1
2. The Loans...............................................................................................15
2.1 Advances.......................................................................................15
2.2 Payments.......................................................................................16
2.3 Pro Rata Treatment.............................................................................17
2.4 Non-Receipt of Funds by the Agent..............................................................17
2.5 Sharing of Payments, Etc.......................................................................18
2.6 Fees...........................................................................................18
3. Conditions..............................................................................................19
3.1 All Loans......................................................................................19
3.2 First Loan.....................................................................................19
3.3 Options Available..............................................................................19
3.4 Designation and Conversion.....................................................................20
3.5 Special Provisions Applicable to Eurodollar Rate Borrowings....................................20
3.6 Funding Offices; Adjustments Automatic.........................................................23
3.7 Funding Sources, Payment Obligations...........................................................23
3.8 Mitigation, Non-Discrimination.................................................................23
4. Representations and Warranties..........................................................................24
4.1. Organization...................................................................................24
4.2 Financial Statements...........................................................................24
4.3 Enforceable Obligations; Authorization.........................................................25
4.4 Other Debt.....................................................................................25
4.5 Litigation.....................................................................................25
4.6 Taxes..........................................................................................25
4.7 Regulation U...................................................................................25
4.8 Subsidiaries...................................................................................25
4.9 Securities Act of 1933.........................................................................26
4.10 No Contractual or Corporate Restrictions.......................................................26
4.11 Investment Company Act Not Applicable..........................................................26
4.12 Public Utility Holding Company Act Not Applicable..............................................26
4.13 ERISA Not Applicable...........................................................................26
4.14 Year 2000......................................................................................26
5. Affirmative Covenants...................................................................................27
5.1 Taxes, Existence, Regulations, Property, etc...................................................27
5.2 Financial Statements and Information...........................................................27
(i)
3
5.3 Financial Tests................................................................................28
5.4 Inspection.....................................................................................28
5.5 Further Assurances.............................................................................28
5.6 Books and Records..............................................................................28
5.7 Insurance......................................................................................28
5.8 Notice of Certain Matters......................................................................29
5.9 Use of Proceeds................................................................................29
5.10 Expenses of and Claims Against the Agent and the Lenders.......................................29
5.11 Legal Compliance; Indemnification..............................................................29
5.12 Obligors' Performance..........................................................................30
5.13 Professional Services..........................................................................30
5.14 Capital Adequacy...............................................................................30
5.15 Property Pool..................................................................................31
5.16 Co-Borrowers...................................................................................32
6. Negative Covenants......................................................................................33
6.1 Indebtedness...................................................................................33
6.2 Mergers, Consolidations and Acquisitions of Assets.............................................33
6.3 Redemption.....................................................................................33
6.4 Nature of Business; Management.................................................................33
6.5 Transactions with Related Parties..............................................................34
6.6 Loans and Investments..........................................................................34
6.7 Limiting Agreements............................................................................35
6.8 Restricted Payments............................................................................35
7. Events of Default and Remedies..........................................................................36
7.1. Events of Default..............................................................................36
7.2 Remedies Cumulative............................................................................37
8. The Agent...............................................................................................37
8.1 Appointment, Powers and Immunities.............................................................37
8.2 Reliance.......................................................................................39
8.3 Defaults.......................................................................................39
8.4 Rights as a Lender.............................................................................40
8.5 Indemnification................................................................................40
8.6 Non-Reliance on Agent and Other Lenders........................................................41
8.7 Failure to Act.................................................................................41
8.8 Resignation of Agent...........................................................................41
8.9 No Partnership.................................................................................42
9. Miscellaneous...........................................................................................42
9.1 No Waiver, Amendments..........................................................................42
9.2 Notices........................................................................................42
(ii)
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9.3 Venue..........................................................................................42
9.4 Choice of Law..................................................................................43
9.5 Survival; Parties Bound; Successors and Assigns................................................43
9.6 Counterparts...................................................................................45
9.7 Usury Not Intended; Refund of Any Excess Payments..............................................45
9.8 Captions.......................................................................................45
9.9 Severability...................................................................................45
9.10 Disclosures....................................................................................45
9.11 Entire Agreement...............................................................................45
EXHIBITS
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Schedule I - Rating Tables
Schedule II - Approved Markets
A - Officer's Certificate
B - Request for Loan
C - Note
D - Legal Opinion
(iii)
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT (the "AGREEMENT") is made and entered into as of
__________, 1999, by and among EASTGROUP PROPERTIES, L.P., a Delaware limited
partnership and EASTGROUP PROPERTIES, INC., a Maryland corporation, jointly and
severally (collectively, the "BORROWER"), the financial institutions (including
Chase, the "LENDERS") which are now or may hereafter become signatories hereto,
CHASE BANK OF TEXAS, NATIONAL ASSOCIATION, a national banking association
("CHASE"), as Arranger, Book Manager, and Administrative Agent for Lenders (in
such capacity, "AGENT"), FIRST UNION NATIONAL BANK, a national banking
association, as Syndication Agent, PNC BANK, NATIONAL ASSOCIATION, a national
banking association, as Documentation Agent, and FIRST AMERICAN NATIONAL BANK,
operating as DEPOSIT GUARANTY NATIONAL BANK, a national banking association, as
Co-Agent.
1. DEFINITIONS.
Unless a particular word or phrase is otherwise defined or the context
otherwise requires, capitalized words and phrases used in Credit Documents have
the meanings provided below.
ADJUSTED EURODOLLAR INTERBANK RATE shall mean, with respect to each
Interest Period applicable to a Eurodollar Rate Borrowing, a rate per annum
equal to the quotient, expressed as a percentage, of (a) the Eurodollar
Interbank Rate with respect to such Interest Period divided by (b) 1.0000 minus
the Eurodollar Reserve Requirement in effect on each day during such Interest
Period.
AFFILIATE shall mean any Person controlling, controlled by or under
common control with any other Person. For purposes of this definition, "control"
(including "controlled by" and "under common control with") means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of such Person, whether through the
ownership of voting securities or otherwise.
ANNUAL AUDITED FINANCIAL STATEMENTS shall mean the annual financial
statements of a Person, including all notes thereto, which statements shall
include a balance sheet as of the end of such fiscal year and an income
statement and a statement of cash flows, all setting forth in comparative form
the corresponding figures from the previous fiscal year, all prepared in
conformity with Generally Accepted Accounting Principles and accompanied by a
report and opinion of independent certified public accountants satisfactory to
the Agent, which shall state that such financial statements, in the opinion of
such accountants, present fairly the financial position of such Person as of the
date thereof and the results of its operations for the period covered thereby in
conformity with Generally Accepted Accounting Principles. Such statements shall
be accompanied by a certificate of such accountants that in making the
appropriate audit and/or investigation in connection with such report and
opinion, such accountants did not become aware of any Default or, if in the
opinion of such accountant any such Default exists, a description of the nature
and status thereof. The Annual Audited Financial
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Statements shall be prepared on a consolidated basis in accordance with
Generally Accepted Accounting Principles.
APPLICABLE MARGIN shall mean (a) whenever and for so long as the
Operating Partnership has not received an S&P Rating and a ▇▇▇▇▇'▇ Rating, the
percentage which will be in effect whenever and for so long as the corresponding
Total Liabilities to Total Asset Value Ratio reflected in Table 1 on SCHEDULE I
attached hereto and hereby made a part hereof, is in effect; and (b) whenever
and for so long as the Operating Partnership has received an S&P Rating and a
▇▇▇▇▇'▇ Rating, the percentage which will be in effect whenever and for so long
as the Operating Partnership has received the corresponding S&P Rating or
▇▇▇▇▇'▇ Rating, whichever is lower, reflected in Table 2 on SCHEDULE I attached
hereto.
APPROVED MARKET shall mean each of the cities described on SCHEDULE II
attached hereto and hereby made a part hereof.
BASE RATE shall mean for any day a rate per annum equal to the
Applicable Margin on that day plus the greater on a daily basis of (a) the Prime
Rate for that day, or (b) the Federal Funds Effective Rate for that day plus
one-half of one percent (1/2%).
BASE RATE BORROWING shall mean that portion of the principal balance of
the Loans at any time bearing interest at the Base Rate.
BUSINESS DAY shall mean a day other than (a) a day when the main office
of the Agent is not open for business, or (b) a day that is a federal banking
holiday in the United States of America.
CAPITAL EXPENDITURES shall mean, as to any Person, for any period, the
aggregate of all expenditures (whether payable in cash or other Property or
accrued as a liability (but without duplication)) during such period that, in
conformity with Generally Accepted Accounting Principles, are required to be
included in or reflected by the Borrower's or any of its Subsidiaries' fixed
asset accounts as reflected in any of their respective balance sheets; PROVIDED,
HOWEVER, Capital Expenditures shall include the sum of all expenditures by the
Borrower for tenant improvements, leasing commissions, property level capital
expenditures (e.g., roof replacement, parking lot repairs, etc., but not capital
expenditures in connection with expansions) but shall exclude upgrade capital
expenditures budgeted at the time of, and made within the first twelve (12)
months after, the acquisition of a Property. Capital Expenditures shall be
calculated on a consolidated basis in accordance with Generally Accepted
Accounting Principles and shall include (without duplication) the Equity
Percentage of Capital Expenditures for the Borrower's Unconsolidated Affiliates.
CEILING RATE shall mean, on any day, the maximum nonusurious rate of
interest permitted for that day by whichever of applicable federal or Texas laws
permits the higher interest rate, stated as a rate per annum. On each day, if
any, that Texas law establishes the Ceiling Rate, the Ceiling Rate
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shall be the "weekly ceiling" (as defined in Chapter 303 of the Texas Finance
Code (the "Texas Finance Code") and Chapter 1D of Title 79, Tex.Rev.Civ. Stats.
1925 ("Chapter 1D"), as amended, respectively) for that day. The Agent may from
time to time, as to current and future balances, implement any other ceiling
under the Texas Finance Code or Chapter 1D by notice to the Borrower, if and to
the extent permitted by the Texas Finance Code or Chapter 1D. Without notice to
the Borrower or any other person or entity, the Ceiling Rate shall automatically
fluctuate upward and downward as and in the amount by which such maximum
nonusurious rate of interest permitted by applicable law fluctuates.
CHANGE OF CONTROL means a change resulting when (a) any Person or
Persons acting together which would constitute a Group together with any
Affiliates thereof shall at any time either (i) Beneficially Own more than 50%
of the aggregate voting power of all classes of Voting Stock of EastGroup
Properties, Inc. or (ii) succeed in having sufficient of its or their nominees
elected to the Board of Directors of EastGroup Properties, Inc. such that such
nominees, when added to any existing directors remaining on the Board of
Directors of EastGroup Properties, Inc. after such election who is an Affiliate
of such Person or Group, shall constitute a majority of the Board of Directors
of EastGroup Properties, Inc. or (b) EastGroup Properties, Inc. ceases to own,
directly or indirectly, at least fifty-one percent (51%) of the evidence of
ownership of the Operating Partnership. As used herein (1) "BENEFICIALLY OWN"
means "beneficially own" as defined in Rule 13d-3 of the Securities Exchange Act
of 1934, as amended, or any successor provision thereto; PROVIDED, HOWEVER,
that, for purposes of this definition, a Person shall not be deemed to
Beneficially Own securities tendered pursuant to a tender or exchange offer made
by or on behalf of such Person or any of such Person's Affiliates until such
tendered securities are accepted for purchase or exchange; (2) "GROUP" means a
"group" for purposes of Section 13(d) of the Securities Exchange Act of 1934, as
amended; and (3)"VOTING STOCK" of any Person shall mean capital stock of such
Person which ordinarily has voting power for the election of directors (or
persons performing similar functions) of such Person, whether at all times or
only so long as no senior class of securities has such voting power by reason of
any contingency.
CODE shall mean the Internal Revenue Code of 1986, as amended, as now
or hereafter in effect, together with all regulations, rulings and
interpretations thereof or thereunder by the Internal Revenue Service.
COMMITMENT shall mean the commitment of the Lenders to lend funds under
SECTION 2.1 of this Agreement.
CREDIT DOCUMENTS shall mean this Agreement, the Notes, the Guaranties,
all instruments, certificates and agreements now or hereafter executed or
delivered to the Agent or the Lenders pursuant to any of the foregoing, and all
amendments, modifications, renewals, extensions, increases and rearrangements
of, and substitutions for, any of the foregoing.
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EBITDA shall mean an amount derived from (a) net earnings, plus (b)
depreciation, amortization, interest expense and income taxes, plus or minus (c)
any losses or gains resulting from sales, write-downs, write-ups, write-offs or
other valuation adjustments of assets or liabilities, in each case, as
determined on a consolidated basis in accordance with Generally Accepted
Accounting Principles, and including (without duplication) the Equity Percentage
of EBITDA for the Borrower's Unconsolidated Affiliates.
ELIGIBLE GROUND LEASE shall mean a lease either expressly approved by
Agent in writing or a lease meeting at least the following requirements: (a) a
remaining term (including renewal options exercisable at lessee's sole option)
of at least thirty (30) years, (b) the leasehold interest is transferable and
assignable without the landlord's prior consent, (c) the ground lease is
financeable in that, among other things, it provides or allows for, without
further consent from the landlord, (i) notice and right to cure to lessee's
lender, (ii) a pledge and mortgage of the leasehold interest, (iii) recognition
of a foreclosure of the leasehold interest including entering into a new lease
with the lender, and (iv) no right of landlord to terminate without consent of
lessee's lender.
ELIGIBLE INSTITUTION shall mean a commercial bank or a finance company,
insurance company or other financial institution which is regularly engaged in
making, purchasing or investing in loans and which has base capital of at least
$500,000,000.00, but shall not include any Person which is an Affiliate of any
Obligor.
EQUITY PERCENTAGE shall mean the aggregate ownership percentage of
Borrower in each Unconsolidated Affiliate.
EURODOLLAR BUSINESS DAY shall mean a Business Day on which transactions
in United States dollar deposits between banks may be carried on in the London
interbank dollar market.
EURODOLLAR INTERBANK RATE shall mean, for each Interest Period, the
rate of interest per annum, rounded, if necessary, to the next highest whole
multiple of one-sixteenth percent (1/16%), quoted by Agent at or before 11:00
a.m., London time (or as soon thereafter as practicable), on the date two (2)
Eurodollar Business Days before the first day of such Interest Period, to be the
arithmetic average of the prevailing rates per annum at the time of
determination and in accordance with the then existing practice in the London
interbank dollar market, for the offering to Agent by one or more prime banks
selected by Agent in its sole discretion, in the London interbank dollar market,
of deposits in United States dollars for delivery on the first day of such
Interest Period and having a maturity equal to the length of such Interest
Period and in an amount equal (or as nearly equal as may be) to the Eurodollar
Rate Borrowing to which such Interest Period relates. Each determination by
Agent of the Eurodollar Interbank Rate shall be prima facie evidence thereof.
EURODOLLAR RATE shall mean for any day a rate per annum equal to the
sum of the Applicable Margin for that day plus the Adjusted Eurodollar Interbank
Rate in effect on the first day of the
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Interest Period for the applicable Eurodollar Rate Borrowing. Each Eurodollar
Rate is subject to adjustments for reserves, insurance assessments and other
matters as provided for in SECTION 3.5 hereof.
EURODOLLAR RATE BORROWING shall mean that portion of the principal
balance of the Loans at any time bearing interest at a Eurodollar Rate.
EURODOLLAR RESERVE REQUIREMENT shall mean, on any day, that percentage
(expressed as a decimal fraction and rounded, if necessary, to the next highest
one ten thousandth) which is in effect on such day for determining all reserve
requirements (including, without limitation, basic, supplemental, marginal and
emergency reserves) applicable to "Eurocurrency liabilities," as currently
defined in Regulation D, all as specified by any Governmental Authority,
including but not limited to those imposed under Regulation D. Each
determination of the Eurodollar Reserve Requirement by Agent shall be prima
facie evidence thereof.
EVENT OF DEFAULT shall mean any of the events specified as an event of
default in SECTION 7 of this Agreement, and DEFAULT shall mean any of such
events, whether or not any requirement for notice, grace or cure has been
satisfied.
FEDERAL FUNDS EFFECTIVE RATE shall to the extent necessary be
determined by the Agent separately for each day and shall for each such day be a
rate per annum equal to the weighted average of the rates on overnight Federal
funds transactions with members of the Federal Reserve System arranged by
Federal funds brokers, as published for each such day (or if any such day is not
a Business Day, for the next immediately preceding Business Day) by the Federal
Reserve Bank of New York, or if the weighted average of such rates is not so
published for any such day which is a Business Day, the average of the
quotations for any such day on such transactions received by the Agent from
three Federal funds brokers of recognized standing selected by the Agent.
FIXED CHARGE COVERAGE RATIO shall mean the ratio of (a) the Borrower's
EBITDA for the immediately preceding four (4) calendar quarters less the Unit
Capital Expenditures for such period, to (b) all amounts payable and paid on the
Borrower's Indebtedness (not including irregular final "balloon" payments of
principal due at the stated maturity) plus all of the Borrower's Interest
Expense plus all amounts payable and paid on Borrower's preferred stock, in each
case for the period used to calculate EBITDA.
FUNDING LOSS shall mean, with respect to (a) Borrower's payment or
prepayment of principal of a Eurodollar Rate Borrowing on a day other than the
last day of the applicable Interest Period; (b) Borrower's failure to borrow a
Eurodollar Rate Borrowing on the date specified by Borrower; (c) Borrower's
failure to make any prepayment of the Loans (other than Base Rate Borrowings) on
the date specified by Borrower, or (d) any cessation of a Eurodollar Rate to
apply to the Loans or any part thereof pursuant to SECTION 3.5, in each case
whether voluntary or involuntary, any direct
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loss, expense, penalty, premium or liability incurred by any Lender (including
but not limited to any loss or expense incurred by reason of the liquidation or
reemployment of deposits or other funds acquired by a Lender to fund or maintain
a Loan).
FUNDS AVAILABLE FOR DISTRIBUTION shall mean Funds From Operations, less
adjustments for straight line rents and Capital Expenditures.
FUNDS FROM OPERATIONS shall mean net income of the Borrower determined
in accordance with Generally Accepted Accounting Principles, plus depreciation
and amortization; PROVIDED, that there shall not be included in such calculation
any gain or loss from debt restructuring and sales of Property. Funds From
Operations will be calculated, on an annualized basis, on the four (4) calendar
quarters immediately preceding the date of the calculation. Funds From
Operations shall be calculated on a consolidated basis in accordance with
Generally Accepted Accounting Principles, and including (without duplication)
the Equity Percentage of Funds From Operations for the Borrower's Unconsolidated
Affiliates.
GENERALLY ACCEPTED ACCOUNTING PRINCIPLES shall mean, as to a particular
Person, such accounting practice as, in the opinion of the independent
accountants of recognized national standing regularly retained by such Person
and acceptable to the Agent, conforms at the time to generally accepted
accounting principles, consistently applied. Generally Accepted Accounting
Principles means those principles and practices (a) which are recognized as such
by the Financial Accounting Standards Board, (b) which are applied for all
periods after the date hereof in a manner consistent with the manner in which
such principles and practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Lenders or where a change
therein has been concurred in by such Person's independent auditors, and (c)
which are consistently applied for all periods after the date hereof so as to
reflect properly the financial condition, and results of operations and changes
in financial position, of such Person.
GOVERNMENTAL AUTHORITY shall mean any foreign governmental authority,
the United States of America, any State of the United States and any political
subdivision of any of the foregoing, and any agency, department, commission,
board, bureau, court or other tribunal having jurisdiction over the Agent, any
Lender or any Obligor or their respective Property.
GUARANTORS (whether one or more) shall mean EastGroup Properties
Holdings, Inc., EastGroup Properties General Partners, Inc., EastGroup Sunbelt,
Inc., EastGroup Tampa, Inc., EastGroup Jacksonville, Inc., LNH Florida, Inc.,
▇▇▇▇ IND Corporation, CPI Holdings, Sample I-95 Associates, Interchange
Distribution Partnership, EGP San Antonio Partners Ltd. and EastGroup San
Antonio, Inc.
GUARANTIES (whether one or more) shall mean the Guaranties executed by
the Guarantors and delivered to the Agent in accordance with this Agreement.
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HISTORICAL VALUE shall mean the purchase price of Property (including
improvements) and ordinary related purchase transaction costs, plus the cost of
subsequent capital improvements made by the Borrower, less any provision for
losses, all determined in accordance with Generally Accepted Accounting
Principles. If the Property is purchased as a part of a group of properties, the
Historical Value shall be calculated based upon a reasonable allocation of the
aggregate purchase price by the Borrower for all purposes, and consistent with
Generally Accepted Accounting Principles.
INDEBTEDNESS shall mean and include, without duplication (1) all
obligations for borrowed money, letter of credit reimbursement obligations,
preferred stock redeemable at the option of the stockholder, (2) all obligations
evidenced by bonds, debentures, notes or other similar agreements, (3) all
obligations to pay the deferred purchase price of Property or services, except
trade accounts payable arising in the ordinary course of business (unless
included in (6) below), (4) all guaranties, endorsements, and other contingent
obligations in respect of, or any obligations to purchase or otherwise acquire,
Total Liabilities of others (but not including contracts to purchase real
property and assume related liabilities which are not yet consummated if the
buyer has the ability to terminate the contract at its option), (5) all Total
Liabilities secured by any Lien existing on any interest of the Person with
respect to which Indebtedness is being determined in Property owned subject to
such Lien whether or not the Total Liabilities secured thereby shall have been
assumed, (6) accounts payable, dividends of any kind or character or other
proceeds payable with respect to any stock and accrued expenses, (7) payments
received in consideration for sale of ownership interests in a Person when the
amount of ownership interest so sold is determined, and the date of delivery is,
more than one (1) month after receipt of such payment, and (8) all obligations
at any time incurred or arising pursuant to any interest rate cap, swap, or
floor agreements, exchange transaction, forward rate agreement, or other
exchange, rate protection or hedging agreements or arrangements (calculated on a
basis satisfactory to the Agent and in accordance with accepted practices.
Indebtedness shall be calculated on a consolidated basis in accordance with
Generally Accepted Accounting Principles, and including (without duplication)
the Equity Percentage of Indebtedness for the Borrower's Unconsolidated
Affiliates.
INDUSTRIAL BUILDINGS shall mean the Property used as industrial,
service center and/or warehouse purposes of no more than one story, with no more
than fifteen percent (15%) of the net rentable area used for mezzanine office
space.
INTEREST COVERAGE RATIO shall mean the ratio of (a) the Borrower's
EBITDA for the immediately preceding four (4) calendar quarters, to (b) all of
the Borrower's Interest Expense for the period used to calculate EBITDA.
INTEREST EXPENSE shall mean all of a Person's paid, accrued or
capitalized interest expense on such Person's Indebtedness (whether direct,
indirect or contingent, and including, without limitation, interest on all
convertible debt), and including (without duplication) the Equity Percentage of
Interest Expense for the Borrower's Unconsolidated Affiliates.
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INTEREST OPTIONS shall mean the Base Rate and the Eurodollar Rate, and
"INTEREST OPTION" means either of them.
INTEREST PAYMENT DATES shall mean (a) the first (1st) day of each
calendar month and the Maturity Date, for Base Rate Borrowings and (b) the last
day of each Interest Period and, if the Interest Period is longer than three (3)
months, at the end of each three (3) months, and the Maturity Date, for
Eurodollar Rate Borrowings.
INTEREST PERIOD shall mean, for each Eurodollar Rate Borrowing, a
period commencing on the date such Eurodollar Rate Borrowing was made and ending
on the numerically corresponding day which is, subject to availability, one (1),
two (2), three (3) or six (6) months thereafter; PROVIDED, (v) any Interest
Period which would otherwise end on a day which is not a Eurodollar Business Day
shall be extended to the next succeeding Eurodollar Business Day, unless such
Eurodollar Business Day falls in another calendar month, in which case such
Interest Period shall end on the next preceding Eurodollar Business Day; (w) any
Interest Period which begins on the last Eurodollar 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
Eurodollar Business Day of the appropriate calendar month; (x) no Interest
Period shall ever extend beyond the Maturity Date; and (y) Interest Periods
shall be selected by Borrower in such a manner that the Interest Period with
respect to any portion of the Loans which shall become due shall not extend
beyond such due date.
LEGAL REQUIREMENT shall mean any law, statute, ordinance, decree,
requirement, order, judgment, rule, regulation (or interpretation of any of the
foregoing) of, and the terms of any license or permit issued by, any
Governmental Authority.
LENDER COMMITMENT means, for any Lender, the amount set forth opposite
such Lender's name on its signature page of this Agreement, or as may hereafter
become a signatory hereto.
LIEN shall mean any mortgage, pledge, charge, encumbrance, security
interest, collateral assignment or other lien or restriction of any kind,
whether based on common law, constitutional provision, statute or contract, and
shall include reservations, exceptions, encroachments, easements, rights of way,
covenants, conditions, restrictions, leases and other title exceptions.
LIMITING AGREEMENTS shall mean (a) any agreement, instrument or
transaction, including, without limitation, an Obligor's Organizational
Documents, which has or may have the effect of prohibiting or limiting any
Obligor's ability to pledge assets in the Pool to Agent as security for the
Loans, or (b) any provision of an Obligor's Organizational Documents which have
or may have the effect of prohibiting or limiting any Obligor's ability to sell,
transfer or convey the assets in the Pool.
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LOANS shall mean the Loans described in SECTIONS 2.1 and 2.2 hereof.
LOAN shall mean any such Loan.
MAJORITY LENDERS shall mean the Lenders with an aggregate amount of at
least sixty-six and 67/100 percent (66.67%) of the amount of the Commitment then
outstanding.
MATERIAL ADVERSE CHANGE shall mean a change which could reasonably be
expected to have a Material Adverse Effect.
MATERIAL ADVERSE EFFECT means a material adverse effect on (a) the
financial condition, or results of operations of Borrower and its Subsidiaries
taken as a whole, (b) the ability of an Obligor to perform its material
obligations under the Credit Documents to which it is a party taken as a whole,
(c) the validity or enforceability of such Credit Documents taken as a whole, or
(d) the material rights and remedies of Lenders and Agent under the Credit
Documents taken as a whole.
MATURITY DATE shall mean three (3) years after the date of this
Agreement, as the same may hereafter be accelerated pursuant to the provisions
of any of the Credit Documents.
▇▇▇▇▇'▇ RATING shall mean the senior unsecured debt rating from time to
time received by the Operating Partnership from ▇▇▇▇▇'▇ Investors Service, Inc.
NET OPERATING INCOME shall mean, for any income producing operating
Property, the difference between (a) any cash rentals, proceeds and other income
received from such Property (but excluding security or other deposits, late
fees, early lease termination or other penalties, or other income of a
non-recurring nature) during the determination period, LESS (b) an amount equal
to all costs and expenses (excluding interest expense and any expenditures that
are capitalized in accordance with Generally Accepted Accounting Principles)
incurred as a result of, or in connection with, or properly allocated to, the
operation or leasing of such Property during the determination period; provided,
however, that the amount for the expenses for the management of a Property
included in CLAUSE (b) above shall be the greater of the general and
administrative expenses that would be covered by a management fee, or three
percent (3%) of the amount provided in CLAUSE (a) above. Net Operating Income
shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles, and including (without duplication) the Equity
Percentage of Net Operating Income for the Borrower's Unconsolidated Affiliates.
NET WORTH shall mean Tangible Net Worth, plus intangibles deducted in
determining Tangible Net Worth. Net Worth shall be calculated on a consolidated
basis in accordance with Generally Accepted Accounting Principles.
NON-RECOURSE DEBT shall mean any Indebtedness the payment of which the
Borrower or any of its Subsidiaries is not obligated to make other than to the
extent of any security therefor.
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NOTES shall mean the promissory notes of the Borrower described in
SECTION 2.1 hereof, any and all renewals, extensions, modifications,
rearrangements and replacements thereof and any and all substitutions therefor,
and NOTE shall mean any one of them.
OBLIGATIONS shall mean, as at any date of determination thereof, the
sum of (a) the aggregate amount of Loans outstanding hereunder plus (b) all
other liabilities, obligations and Indebtedness of any Parties under any Credit
Document.
OBLIGORS shall mean any Person now or hereafter primarily or
secondarily obligated to pay all or any part of the Obligations, including
Borrower and Guarantors.
OCCUPANCY LEVEL shall mean the occupancy level of a Property that is
leased to bona fide tenants not Affiliates of any Obligor or the subject
property manager (or any of their respective Affiliates) paying the stated rent
under written leases, based on the occupancy level at the time of determination.
OFFICER'S CERTIFICATE shall mean a certificate in the form attached
hereto as EXHIBIT A.
OPERATING PARTNERSHIP shall mean EastGroup Properties, L.P., a Delaware
limited partnership.
OPINION LETTERS shall mean the opinion letters of independent counsel
for the Obligors, each in Proper Form.
ORGANIZATIONAL DOCUMENTS shall mean, with respect to a corporation, the
certificate of incorporation, articles of incorporation and bylaws of such
corporation; with respect to a partnership, the partnership agreement
establishing such partnership; with respect to a joint venture, the joint
venture agreement establishing such joint venture, and with respect to a trust,
the instrument establishing such trust; in each case including any and all
modifications thereof as of the date of the Credit Document referring to such
Organizational Document and any and all future modifications thereof which are
consented to by the Lenders.
PARTIES shall mean all Persons other than the Agent, or any Lender
executing any Credit Document.
PAST DUE RATE shall mean, on any day, a rate per annum equal to the
Ceiling Rate for that day, or only if applicable law imposes no maximum
nonusurious rate of interest for that day, then the Past Due Rate for that day
shall be a rate per annum equal to the Base Rate plus an additional five percent
(5%) per annum, but in any event not to exceed the Ceiling Rate.
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PERCENTAGE shall mean the amount, expressed as a percentage, of each
Lender Commitment as compared to the Commitment, set forth opposite the Lender's
name on its signature page of this Agreement, or as may hereafter become
signatory hereto.
PERMITTED ENCUMBRANCES shall mean (a) encumbrances consisting of zoning
restrictions, easements, or other restrictions on the use of real property,
provided that such items do not materially impair the use of such property for
the purposes intended and none of which is violated in any material respect by
existing or proposed structures or land use; (b) the following: (i) Liens for
taxes not yet due and payable, or being diligently contested in good faith; or
(ii) materialmen's, mechanic's, warehousemen's and other like Liens arising in
the ordinary course of business, securing payment of Total Liabilities whose
payment is not yet due, or that are being contested in good faith by appropriate
proceedings diligently conducted, and for or against which the Property owner
has established adequate reserves in accordance with Generally Accepted
Accounting Principles; (c) Liens for taxes, assessments and governmental charges
or assessments that are being contested in good faith by appropriate proceedings
diligently conducted, and for or against which the Property owner has
established adequate reserves in accordance with Generally Accepted Accounting
Principles; (d) Liens on real property which are insured around or against by
title insurance; (e) Liens securing assessments or charges payable to a property
owner association or similar entity which assessments are not yet due and
payable or are being diligently contested in good faith; and (f) Liens securing
this Agreement and Indebtedness hereunder, if any.
PERSON shall mean any individual, corporation, trust, unincorporated
organization, Governmental Authority or any other form of entity.
PRIME RATE shall mean, as of a particular date, the prime rate of
interest per annum most recently determined by the Agent, automatically
fluctuating upward or downward with and at the time specified in each such
determination without notice to Borrower or any other Person; each change in the
Prime Rate shall be effective on the date such change is determined; which Prime
Rate may not necessarily represent the Agent's lowest or best rate actually
charged to a customer.
PROPER FORM shall mean in form and substance reasonably satisfactory to
the Agent and the Majority Lenders.
PROPERTY shall mean any interest in any kind of property or asset,
whether real, leasehold, personal or mixed, tangible or intangible.
QUARTERLY UNAUDITED FINANCIAL STATEMENTS shall mean the quarterly
financial statements of a Person, including all notes thereto, which statements
shall include a balance sheet as of the end of such quarter and an income
statement for such fiscal quarter, and for the fiscal year to date, a statement
of cash flows for such quarter and for the fiscal year to date, subject to
normal year-end adjustments, all setting forth in comparative form the
corresponding figures for the corresponding
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fiscal period of the preceding year (or, in the case of the balance sheet, the
end of the preceding fiscal year), prepared in accordance with Generally
Accepted Accounting Principles except that the Quarterly Unaudited Financial
Statements may contain condensed footnotes as permitted by regulations of the
United States Securities and Exchange Commission, and containing a detailed
listing of the Borrower's Property and the Historical Value thereof, and
certified as true and correct by a managing director, senior vice president, or
vice president of Borrower. The Quarterly Unaudited Financial Statements shall
be prepared on a consolidated basis in accordance with Generally Accepted
Accounting Principles.
RATE DESIGNATION DATE shall mean 12:00 noon, Houston, Texas time, on
the date three (3) Eurodollar Business Days preceding the first day of any
proposed Interest Period.
REGULATION D shall mean Regulation D of the Board of Governors of the
Federal Reserve System from time to time in effect and shall include any
successor or other regulation relating to reserve requirements applicable to
member lenders of the Federal Reserve System.
REQUEST FOR LOAN shall mean a written request substantially in the form
of EXHIBIT B.
S&P RATING shall mean the senior unsecured debt rating from time to
time received by the Operating Partnership from Standard & Poor's Rating
Services.
SECURED DEBT shall mean the Indebtedness of the Borrower secured by a
Lien, and any Indebtedness of any of the Borrower's Subsidiaries owed to a
Person not an Affiliate of the Borrower or such Subsidiary.
SECURED DEBT TO TOTAL ASSET VALUE RATIO shall mean the ratio (expressed
as a percentage) of Secured Debt to Total Asset Value.
STABILIZATION DATE shall mean the earlier to occur of (a) the date the
Occupancy Level reaches eighty (80%) for the first time, or (b) one (1) year
after the construction of the building improvements, other than tenant
improvements, are substantially complete.
STATED RATE shall, on any day, mean whichever of the Base Rate or the
Eurodollar Rate has been designated and provided pursuant to this Agreement;
PROVIDED that, if on any day such rate shall exceed the Ceiling Rate for that
day, the Stated Rate shall be fixed at the Ceiling Rate on that day and on each
day thereafter until the total amount of interest accrued at the Stated Rate on
the unpaid principal balance of the Notes equals the total amount of interest
which would have accrued if there had been no Ceiling Rate. If the Notes mature
(or are prepaid) before such equality is achieved, then, in addition to the
unpaid principal and accrued interest then owing pursuant to the other
provisions of the Credit Documents, Borrower promises to pay on demand to the
order of the holders of the Notes interest in an amount equal to the excess (if
any) of (a) the lesser of (i) the total interest which
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would have accrued on the Notes if the Stated Rate had been defined as equal to
the Ceiling Rate from time to time in effect and (ii) the total interest which
would have accrued on the Notes if the Stated Rate were not so prohibited from
exceeding the Ceiling Rate, over (b) the total interest actually accrued on the
Notes to such maturity (or prepayment) date.
SUBSIDIARY shall mean, as to a particular parent entity, any entity of
which more than fifty percent (50%) of the indicia of voting equity or ownership
rights (whether outstanding capital stock or otherwise) is at the time directly
or indirectly owned by, such parent entity, or by one or more of its other
Subsidiaries.
TANGIBLE NET WORTH shall mean total assets based on book value, and
including the book value of equity investments in each Unconsolidated Affiliate
multiplied by the Equity Percentage for that Unconsolidated Affiliate), less (1)
all intangibles and (2) all liabilities (including contingent and indirect
liabilities), all determined in accordance with Generally Accepted Accounting
Principles. The term "intangibles" shall include, without limitation, (i)
deferred charges, (ii) the amount of any write-up in the book value of any
assets contained in any balance sheet resulting from revaluation thereof or any
write-up in excess of the cost of such assets acquired, and (iii) the aggregate
of all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like intangibles. The term "liabilities" shall
include, without limitation, (i) Total Liabilities secured by Liens on Property
of the Person with respect to which Tangible Net Worth is being computed whether
or not such Person is liable for the payment thereof, (ii) deferred liabilities,
and (iii) obligations under leases which have been capitalized. Tangible Net
Worth shall be calculated on a consolidated basis in accordance with Generally
Accepted Accounting Principles.
TAXES shall mean any tax, levy, impost, duty, charge or fee.
TOTAL ASSET VALUE shall mean the sum of (without duplication) (a) the
aggregate Value of all of Borrower's operating real estate assets, plus (b) the
amount of any cash and cash equivalents, excluding tenant security and other
restricted deposits of the Borrower, plus (c) investments in Unconsolidated
Affiliates that are engaged primarily in the business of investment in and
operation of Industrial Buildings, valued at an amount equal to the Value of
each Unconsolidated Affiliate's operating real estate assets multiplied by the
Equity Percentage for that Unconsolidated Affiliate (subject to the maximum
investment limitation contained in SECTION 6.6(f)), plus (d) investments in
readily marketable securities of another Person, not an Affiliate of any
Obligor, traded on a national trading exchange, that is a real estate investment
trust under Section 856(c)(1) of the Code, or that is a real estate operating
company (subject to the maximum investment limitation contained in SECTION
6.6(i)), plus (e) investments in real estate assets that are being constructed
or developed to be Industrial Buildings, but are not yet in operation (so long
as the total actual and budgeted cost of construction or development in the
aggregate, used in this Value calculation does not exceed ten
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percent (10%) of the Total Asset Value after giving effect to such investments),
plus (f) investments in loans, advances, and extensions of credit to Persons
(who are not Affiliates of any Obligor) secured by valid and enforceable first
priority liens on real estate (subject to the maximum investment limitations
continued in SECTION 6.6(g)) that are paid current and under which no default
has occurred. Total Asset Value shall be calculated on a consolidated basis in
accordance with Generally Accepted Accounting Principles.
TOTAL LIABILITIES shall mean and include, without duplication, the sum
of (a) Indebtedness and (b) all other items which in accordance with Generally
Accepted Accounting Principles would be included on the liability side of a
balance sheet on the date as of which Total Liabilities is to be determined
(excluding capital stock, surplus, surplus reserves and deferred credits), and
including (without duplication) the Equity Percentage of Total Liabilities of
the Borrower's Unconsolidated Affiliates.
TOTAL LIABILITIES TO TOTAL ASSET VALUE RATIO shall mean the ratio
(expressed as a percentage) of Total Liabilities to Total Asset Value, with
Total Asset Value based on the immediately preceding calendar quarter.
UNCONSOLIDATED AFFILIATE shall mean, in respect of any Person, any
other Person (other than a Person whose stock is traded on a national trading
exchange) in whom such Person holds a voting equity or ownership interest and
whose financial results would not be consolidated under Generally Accepted
Accounting Principles with the financial results of such Person on the
consolidated financial statements of such Person.
UNENCUMBERED INTEREST COVERAGE RATIO shall mean the ratio of (a) the
Net Operating Income for Property that is not subject to any Lien for the
immediately preceding four (4) calendar quarters, to (b) the Borrower's Interest
Expense on all of the Borrower's Indebtedness other than Secured Debt for the
period used to calculate Net Operating Income.
UNHEDGED VARIABLE RATE DEBT TO TOTAL ASSET VALUE RATIO shall mean the
ratio (expressed as a percentage) of (a) Indebtedness of the Borrower with the
non-default interest rate at other than a fixed rate of interest for the term of
the Indebtedness, that is not subject to an interest rate protection agreement
in form and substance satisfactory to the Agent, to (b) Total Asset Value.
UNIT CAPITAL EXPENDITURE shall mean, on an annual basis, an amount
equal to (a) for use in the Fixed Charged Coverage Ratio, the sum of (i) the
daily average aggregate number of gross square feet contained in each completed,
operating office building owned by Borrower or its Subsidiary during the
immediately preceding four (4) calendar quarters, multiplied by $1.00, plus (ii)
the daily average aggregate number of gross square feet contained in each
completed, operating Industrial Building owned by Borrower or its Subsidiary
during the immediately preceding four (4) calendar quarters, multiplied by
$0.25, plus (iii) the daily average aggregate number of apartment units
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contained in each completed, operating apartment building owned by Borrower or
its Subsidiary during the immediately preceding four (4) calendar quarters,
multiplied by $300.00; and (b) for use in defining Value, the sum of (i) the
aggregate number of gross square feet contained in each completed, operating
office building owned by Borrower or its Subsidiary as of the last day of the
immediately preceding calendar quarter, multiplied by $1.00, plus (ii) the
aggregate number of gross square feet contained in each completed, operating
Industrial Building owned by Borrower or its Subsidiary as the last day of the
immediately preceding calendar quarter, multiplied $0.25, plus (iii) the
aggregate number of apartment units contained in each completed, operating
apartment building owned by Borrower or its Subsidiary as the last day of the
immediately preceding calendar quarter, multiplied by $300.00.
VALUE shall mean the sum of (a) for Property that has reached the
Stabilization Date and that Borrower or its Subsidiary has owned for the full
preceding six (6) calendar months, the result of dividing (i) the aggregate Net
Operating Income of the subject Property based on the immediately preceding six
(6) calendar months and multiplied by two (2), less the aggregate Unit Capital
Expenditure for such Property, by (ii) nine and one-fourth percent (9.25%); plus
(b) for Property has been constructed but that has not reached the Stabilization
Date or that has not been owned by Borrower or its Subsidiary for the full
preceding six (6) calendar months, the aggregate Historical Value of the subject
Property.
The following terms shall have the respective meanings ascribed to them
in the Uniform Commercial Code as enacted and in force in the State of Texas on
the date hereof:
accessions, continuation statement, fixtures, general intangibles,
proceeds, security interest and security agreement.
2. THE LOANS.
2.1 ADVANCES. (a) Subject to the terms and conditions of this
Agreement, each Lender severally agrees to make Loans prior to the Maturity Date
to the Borrower not to exceed an amount (in the aggregate, the "COMMITMENT") at
any one time outstanding equal to the Lender's Lender Commitment. Each such
request for a Loan by Borrower shall be deemed a request for a Loan from each
Lender equal to such Lender's Percentage of the aggregate amount so requested,
and such aggregate amount shall be in an amount at least equal to $1,000,000.00
and equal to a multiple of $250,000.00, or the difference between the Commitment
and the aggregate principal balance of the Notes, whichever is less. Each
repayment of the Loans shall be deemed a repayment of each Lender's Loan equal
to such Lender's Percentage of the amount so repaid. The obligations of the
Lenders hereunder are several and not joint, and the preceding two sentences
will give rise to certain inappropriate results if special provisions are not
made to accommodate the failure of a Lender to fund a Loan as and when required
by this Agreement; therefore, notwithstanding anything herein to the contrary,
(A) no Lender shall be required to make Loans at any one time outstanding in
excess
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of such Lender's Percentage of the Commitment and (B) if a Lender fails to make
a Loan as and when required hereunder and Borrower subsequently makes a
repayment on the Loans, such repayment shall be divided among the non-defaulting
Lenders ratably in accordance with their respective Percentages until each
Lender has its Percentage of all of the outstanding Loans, and the balance of
such repayment shall be divided among all of the Lenders in accordance with
their respective Percentages. The Loans shall be evidenced by the Notes
substantially in the form of EXHIBIT C attached hereto. The Borrower, the Agent
and the Lenders agree that Chapter 346 of the Texas Finance Code shall not apply
to this Agreement, the Notes or any Loan.
(b) The Borrower shall give the Agent notice of each borrowing to be
made hereunder as provided in SECTION 3.1 hereof, and the Agent shall deliver
same to each Lender promptly thereafter. Not later than 11:00 a.m., Houston,
Texas time, on the date specified for each such borrowing hereunder, each Lender
shall make available the amount of the Loan, if any, to be made by it on such
date to the Agent at the Agent's principal office in Houston, Texas, in
immediately available funds, for the account of the Borrower. Such amounts
received by the Agent will be held in Agent's general ledger account. The
amounts so received by the Agent shall, subject to the terms and conditions of
this Agreement, be made available to the Borrower by wiring or otherwise
transferring, in immediately available funds not later than 12:00 noon, Houston,
Texas time, such amount to an account designated by the Borrower and maintained
with Chase in Houston, Texas or any other account or accounts which the Borrower
may from time to time designate to the Agent by a written notice as the account
or accounts to which borrowings hereunder are to be wired or otherwise
transferred.
2.2 PAYMENTS. (a) Except to the extent otherwise provided herein, all
payments of principal, interest and other amounts to be made by the Borrower
hereunder, under the Notes and under the other Credit Documents shall be made in
immediately available funds to the Agent, for the account of the Lenders, at its
principal office in Houston, Texas (or in the case of a successor Agent, at the
principal office of such successor Agent in the United States), not later than
12:00 noon Houston, Texas time on the date on which such payment shall become
due (each such payment made after such time on such due date to be deemed to
have been made on the next succeeding Business Day).
(b) The Borrower may, at the time of making each payment hereunder,
under any Note or under any other Credit Document, specify to the Agent the
Loans or other amounts payable by the Borrower hereunder or thereunder to which
such payment is to be applied, which must be pro rata on the basis of each
Lender's Percentage (and in the event that it fails so to specify, such payment
shall be applied to the Loans or, if no Loans are outstanding, to other amounts
then due and payable, PROVIDED that if no Loans or other amounts are then due
and payable or an Event of Default has occurred and is continuing, the Agent may
apply such payment to the Obligations in such order as it may elect in its sole
discretion, but subject to the other terms and conditions of this Agreement,
including without limitation SECTION 2.3 hereof). Each payment received by the
Agent hereunder,
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under any Note or under any other Credit Document for the account of a Lender
shall be paid promptly to such Lender, in immediately available funds. If the
Agent receives a payment for the account of a Lender prior to 12:00 noon
Houston, Texas time, such payment must be delivered to the Lender on that same
day and if it is not so delivered due to the fault of the Agent, the Agent shall
pay to the Lender entitled to the payment the interest accrued on the amount of
the payment pursuant to said Lender's Note and this Agreement from the date the
Agent receives the payment to the date the Lender received the payment.
(c) If the due date of any payment hereunder or under any Note falls on
a day which is not a Business Day or a Eurodollar Business Day, as the case may
be, the due date for such payments shall be extended to the next succeeding
Business Day or Eurodollar Business Day, respectively, and interest shall be
payable for any principal so extended for the period of such extension;
provided, however, that with respect to Eurodollar Rate Borrowings if such
extension would cause the Eurodollar Business Day of payment to fall in another
calendar month, the payment shall be due on the Eurodollar Business Day next
preceding the due date of the payment.
(d) The Borrower shall give the Agent at least one (1) Business Day's
prior written notice of the Borrower's intent to make any payment of principal
or interest under the Credit Documents not scheduled to be paid under the Credit
Documents. Any such notification of payment shall be irrevocable after it is
made by the Borrower. Upon receipt by the Agent of such notification of payment,
it shall deliver same to the other Lenders.
2.3 PRO RATA TREATMENT. Except to the extent otherwise provided herein:
(a) each borrowing from the Lenders under SECTION 2.1(a) hereof shall be made
ratably from the Lenders on the basis of their respective Percentages, each
payment of the Fee (hereinafter defined) shall be made for the account of the
Lenders, and shall be applied, PRO RATA, according to the Lenders' respective
Lender Commitment; and (b) each payment by the Borrower of principal or interest
on the Loans or any other sums advanced by the Lenders pursuant to the Credit
Documents, and of any other amount owed to the Lenders other than the Fee, or
any other sums designated by this Agreement as being owed to a particular
Lender, shall be made to the Agent for the account of the Lenders pro rata in
accordance with the respective unpaid principal amounts of the Loans held by the
Lenders.
2.4 NON-RECEIPT OF FUNDS BY THE AGENT. Unless the Agent shall have been
notified by a Lender or the Borrower (the "Payor") prior to the date on which
such Lender is to make payment to the Agent of the proceeds of a Loan to be made
by it hereunder or the Borrower is to make a payment to the Agent for the
account of one or more of the Lenders, as the case may be (such payment being
herein called the "Required Payment"), which notice shall be effective upon
receipt, that the Payor does not intend to make the Required Payment to the
Agent, the Agent may assume that the Required Payment has been made and may, in
reliance upon such assumption (but shall not be required to), make the amount
thereof available to the intended recipient on such date and, if the Payor has
not in fact made the Required Payment to the Agent, the recipient of such
payment shall,
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on demand, pay to the Agent the amount made available by the Agent together with
interest thereon in respect of the period commencing on the date such amount was
so made available by the Agent until the date the Agent recovers such amount at
a rate per annum equal to (a) the Past Due Rate for such period if the recipient
returning a Required Payment is the Borrower, or (b) the Federal Funds Effective
Rate for such period if the recipient returning a Required Payment is the Agent
or a Lender.
2.5 SHARING OF PAYMENTS, ETC. The Borrower agrees that, in addition to
(and without limitation of) any right of set-off, bankers' lien or counterclaim
a Lender may otherwise have, each Lender shall be entitled, at its option, to
offset balances held by it for the account of the Borrower at any of its
offices, against any principal of or interest on any of such Lender's Loans to
the Borrower hereunder, or other Obligations of the Borrower hereunder, which is
not paid (regardless of whether such balances are then due to the Borrower), in
which case it shall promptly notify the Borrower and the Agent thereof, PROVIDED
that such Lender's failure to give such notice shall not affect the validity
thereof. If a Lender shall obtain payment of any principal of or interest on any
Loan made by it under this Agreement or other Obligation then due to such Lender
hereunder, through the exercise of any right of set-off, banker's lien,
counterclaim or similar right, or otherwise, it shall promptly purchase from the
other Lenders portions of the Loans made or other Obligations held by the other
Lenders in such amounts, and make such other adjustments from time to time as
shall be equitable to the end that all the Lenders shall share the benefit of
such payment (net of any expenses which may be incurred by such Lender in
obtaining or preserving such benefit) pro rata in accordance with the unpaid
principal and interest on the Obligations then due to each of them. To such end
all the Lenders shall make appropriate adjustments among themselves (by the
resale of participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise, and
retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrower.
2.6 FEES. The Borrower shall pay to the Agent for the account of each
Lender fees (collectively, the "FEE") equal to an amount payable as a commitment
fee by the Borrower to the Agent for the account of each Lender equal to the
portion of the daily unused amount of the Commitment multiplied by the rate per
annum corresponding to (a) the Total Liabilities to Total Asset Value Ratio
reflected in Table 1 on SCHEDULE I attached hereto (as determined as of the last
day of each of the Borrower's fiscal quarters) whenever and for so long as the
Operating Partnership has not received an S&P Rating and a ▇▇▇▇▇'▇ Rating; and
(b) the S&P Rating or ▇▇▇▇▇'▇ Rating, whichever is lower, reflected in Table 2
on SCHEDULE I attached hereto, as same is in effect from time to time, whenever
and for so long as the Operating Partnership has received an S&P Rating and a
▇▇▇▇▇'▇ Rating; such commitment fee to be payable in arrears on or before the
tenth (10th) day of each April, July, October and January. The Fee shall not be
refundable. Any portion of the Fee which is not paid by the Borrower when due
shall bear interest at the Past Due Rate from the date due until the date paid
by the Borrower. The Fee shall be calculated on the actual number of days
elapsed in a year deemed to consist of 360 days.
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3. CONDITIONS.
3.1 ALL LOANS. The obligation of any Lender to make any Loan is subject
to the accuracy of all representations and warranties of the Borrower on the
date of such Loan, to the performance by the Borrower of its obligations under
the Credit Documents and to the satisfaction of the following further
conditions: (a) the Agent shall have received the following, all of which shall
be duly executed and in Proper Form: (1) a Request for Loan (i) by 11:00 a.m.,
Houston, Texas time, one (1) Business Day before the date (which shall also be a
Business Day) of the proposed Loan which is to be a Base Rate Borrowing, or (ii)
by the Rate Designation Date of the proposed Loan which is to be a Eurodollar
Rate Borrowing; and (2) such other documents as the Agent may reasonably require
to satisfy itself or the request of any Lender; (b) no Default or Event of
Default shall have occurred and be continuing; (c) the making of the Loan shall
not be prohibited by any Legal Requirement; and (d) the Borrower shall have paid
all legal fees and expenses of the type described in SECTION 5.10 hereof through
the date of such Loan.
3.2 FIRST LOAN. In addition to the matters described in SECTION 3.1
hereof, the obligation of the Lenders to make the first Loan under this
Agreement is subject to the receipt by the Lenders of each of the following, in
Proper Form: (a) the Notes, executed by the Borrower; (b) a certificate executed
by the Secretary or Assistant Secretary of each Obligor dated as of the date
hereof as to the resolutions of such Person authorizing the execution of the
Credit Documents and as to the incumbency of the officers of such Person; (c) a
certificate from the Secretary of State or other appropriate public official of
the state of organization of each Obligor as to the continued existence and good
standing of such Obligor; (d) a certificate from the appropriate public official
of every state where the location of the Obligor's Property requires it to be
qualified to do business as to the due qualification and good standing of such
Obligor; (e) a legal opinion from independent counsel for the Obligors as to the
matters set forth on EXHIBIT D acceptable to the Lenders; and (f) an Officer's
Certificate in the form of EXHIBIT A; and to the further condition that, at the
time of the initial Loan, all legal matters incident to the transactions herein
contemplated shall be satisfactory to ▇▇▇▇▇ Liddell & ▇▇▇▇ LLP, counsel for the
Agent.
3.3 OPTIONS AVAILABLE. The outstanding principal balance of the Notes
shall bear interest at the Base Rate; PROVIDED, that (1) all past due amounts,
both principal and accrued interest, shall bear interest at the Past Due Rate,
and (2) subject to the provisions hereof, Borrower shall have the option of
having all or any portion of the principal balance of the Notes from time to
time outstanding bear interest at a Eurodollar Rate. The records of the Lenders
with respect to Interest Options, Interest Periods and the amounts of Loans to
which they are applicable shall be prima facie evidence thereof. Interest on the
Loans shall be calculated at the Base Rate except where it is expressly provided
pursuant to this Agreement that a Eurodollar Rate is to apply.
3.4 DESIGNATION AND CONVERSION. Borrower shall have the right to
designate or convert its Interest Options in accordance with the provisions
hereof. PROVIDED no Event of Default has
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occurred and is continuing and subject to the provisions of SECTION 3.5,
Borrower may elect to have a Eurodollar Rate apply or continue to apply to all
or any portion of the principal balance of the Notes. Each change in Interest
Options shall be a conversion of the rate of interest applicable to the
specified portion of the Loans, but such conversion shall not change the
respective outstanding principal balance of the Notes. The Interest Options
shall be designated or converted in the manner provided below:
(a) Borrower shall give Agent a Request for Loan. Each such written
notice shall specify the amount of Loan which is the subject of the designation,
if any; the amount of borrowings into which such borrowings are to be converted
or for which an Interest Option is designated; the proposed date for the
designation or conversion and the Interest Period, if any, selected by Borrower.
The Request for Loan shall be irrevocable and shall be given to Agent no later
than the applicable Rate Designation Date. The Agent shall promptly deliver the
Request for Loan to the Lenders.
(b) No more than five (5) Eurodollar Rate Borrowings with five (5)
Interest Periods shall be in effect at any time.
(c) Each designation or conversion of a Eurodollar Rate Borrowing shall
occur on a Eurodollar Business Day.
(d) Except as provided in SECTION 3.5 hereof, no Eurodollar Rate
Borrowing shall be converted on any day other than the last day of the
applicable Interest Period.
(e) Unless a Request for Loan to the contrary is received as provided
in this Agreement, each Eurodollar Rate Borrowing will convert to a Base Rate
Borrowing after the expiration of the Interest Period.
3.5 SPECIAL PROVISIONS APPLICABLE TO EURODOLLAR RATE BORROWINGS.
(a) OPTIONS UNLAWFUL. If the adoption of any applicable Legal
Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by the Lenders with any request or directive (whether or not having
the force of law) of any central bank or other Governmental Authority shall at
any time make it unlawful or impossible for any Lender to permit the
establishment of or to maintain any Eurodollar Rate Borrowing, the commitment of
the Lenders to establish or maintain such Eurodollar Rate Borrowing shall
forthwith be suspended until such condition shall cease to exist and Borrower
shall forthwith, upon demand by Agent to Borrower, (1) convert the Eurodollar
Rate Borrowing with respect to which such demand was made to a Base Rate
Borrowing; (2) pay all accrued and unpaid interest to date on the amount so
converted; and (3) pay any amounts required to compensate the Lenders for any
additional cost or expense which the Lenders may incur as a result of such
adoption of or change in such Legal Requirement or in the interpretation or
administration thereof and any
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Funding Loss which the Lenders may incur as a result of such conversion. If,
when Agent so notifies Borrower, Borrower has given a Request for Loan
specifying a Eurodollar Rate Borrowing but the selected Interest Period has not
yet begun, such Request for Loan shall be deemed to be of no force and effect,
as if never made, and the balance of the Loans specified in such Request for
Loan shall bear interest at the Base Rate until a different available Interest
Option shall be designated in accordance herewith.
(b) INCREASED COST OF BORROWINGS. If the adoption of any applicable
Legal Requirement or any change in any applicable Legal Requirement or in the
interpretation or administration thereof by any Governmental Authority or
compliance by any Lender with any request or directive of general applicability
(whether or not having the force of law) of any central bank or Governmental
Authority shall at any time as a result of any portion of the principal balance
of the Notes being maintained on the basis of a Eurodollar Rate:
(1) subject any Lender (or make it apparent that any Lender is
subject) to any Taxes, or any deduction or withholding for any
Taxes, on or from any payment due under any Eurodollar Rate
Borrowing or other amount due hereunder, other than income and
franchise taxes of the United States and its political
subdivisions; or
(2) change the basis of taxation of payments due from Borrower to
any Lender under any Eurodollar Rate Borrowing (otherwise than
by a change in the rate of taxation of the overall net income
of a Lender); or
(3) impose, modify, increase or deem applicable any reserve
requirement (excluding that portion of any reserve requirement
included in the calculation of the applicable Eurodollar
Rate), special deposit requirement or similar requirement
(including, but not limited to, state law requirements and
Regulation D) imposed, modified, increased or deemed
applicable by any Governmental Authority against assets held
by any Lender, or against deposits or accounts in or for the
account of any Lender, or against loans made by any Lender, or
against any other funds, obligations or other property owned
or held by any Lender; or
(4) impose on any Lender any other condition regarding any
Eurodollar Rate Borrowing;
and the result of any of the foregoing is to increase the cost to any
Lender of agreeing to make or of making, renewing or maintaining such
Eurodollar Rate Borrowing, or reduce the amount of principal or
interest received by any Lender, then, upon demand by Agent, Borrower
shall pay to such Lender, from time to time as specified by such
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Lender, additional amounts which shall compensate such Lender for such
increased cost or reduced amount. Agent will promptly notify Borrower
in writing of any event which will entitle any Lender to additional
amounts pursuant to this paragraph. A Lender's determination of the
amount of any such increased cost, increased reserve requirement or
reduced amount shall be prima facie evidence thereof. Borrower shall
have the right, if it receives from Agent any notice referred to in
this paragraph, upon three Business Days' notice to Agent, either (i)
to repay in full (but not in part) any borrowing with respect to which
such notice was given, together with any accrued interest thereon, or
(ii) to convert the Eurodollar Rate Borrowing which is the subject of
the notice to a Base Rate Borrowing; PROVIDED, that any such repayment
or conversion shall be accompanied by payment of (x) the amount
required to compensate a Lender for the increased cost or reduced
amount referred to in the preceding paragraph; (y) all accrued and
unpaid interest to date on the amount so repaid or converted, and (z)
any Funding Loss which any Lender may incur as a result of such
repayment or conversion.
(c) INADEQUACY OF PRICING AND RATE DETERMINATION. If for any reason
with respect to any Interest Period Agent shall have determined (which
determination shall be prima facie evidence thereof) that:
(1) Agent is unable through its customary general practices to
determine any applicable Eurodollar Rate, or
(2) by reason of circumstances affecting the applicable market
generally, Agent is not being offered deposits in United
States dollars in such market, for the applicable Interest
Period and in an amount equal to the amount of any applicable
Eurodollar Rate Borrowing requested by Borrower, or
(3) any applicable Eurodollar Rate will not adequately and fairly
reflect the cost to the Lenders of making and maintaining such
Eurodollar Rate Borrowing hereunder for any proposed Interest
Period,
then Agent shall give Borrower notice thereof and thereupon, (A) any
Request for Loan previously given by Borrower designating the
applicable Eurodollar Rate Borrowing which has not commenced as of the
date of such notice from Agent shall be deemed for all purposes hereof
to be of no force and effect, as if never given, and (B) until Agent
shall notify Borrower that the circumstances giving rise to such notice
from Agent no longer exist, each Request for Loan requesting the
applicable Eurodollar Rate shall be deemed a request for a Base Rate
Borrowing, and any applicable Eurodollar Rate Borrowing then
outstanding shall be converted, without
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any notice to or from Borrower, upon the termination of the Interest
Period then in effect with respect to it, to a Base Rate Borrowing.
(d) FUNDING LOSSES. Borrower shall indemnify the Agent and each Lender
against and hold the Agent and each Lender harmless from any Funding Loss. This
agreement shall survive the payment of the Notes. A certificate as to any
additional amounts payable pursuant to this subsection and setting forth the
reasons for the Funding Loss submitted by Agent to Borrower shall be prima facie
evidence thereof.
3.6 FUNDING OFFICES; ADJUSTMENTS AUTOMATIC. Any Lender may, if it so
elects, fulfill its obligation as to any Eurodollar Rate Borrowing by causing a
branch or affiliate of such Lender to make such Loan and may transfer and carry
such Loan at, to, or for the account of, any branch office or affiliate of such
Lender; PROVIDED, that in such event for the purposes of this Agreement such
Loan shall be deemed to have been made by such Lender and the obligation of
Borrower to repay such Loan shall nevertheless be to such Lender and shall be
deemed held by it for the account of such branch or affiliate. Without notice to
Borrower or any other person or entity, each rate required to be calculated or
determined under this Agreement shall automatically fluctuate upward and
downward in accordance with the provisions of this Agreement.
3.7 FUNDING SOURCES, PAYMENT OBLIGATIONS. Notwithstanding any provision
of this Agreement to the contrary, each Lender shall be entitled to fund and
maintain its funding of all or any part of the Loans in any manner it sees fit,
it being understood, however, that for the purposes of this Agreement all
determinations hereunder shall be made as if each Lender had actually funded and
maintained each Eurodollar Rate Borrowing during each Interest Period through
the purchase of deposits having a maturity corresponding to such Interest Period
and bearing an interest rate equal to the Eurodollar Rate for such Interest
Period. Notwithstanding the foregoing, Funding Losses, increased costs and other
obligations relating to Eurodollar Rate Borrowings described in SECTION 3.5 of
this Agreement will only be paid by the Borrower as and when actually incurred
by the Lenders.
3.8 MITIGATION, NON-DISCRIMINATION. (a) Each Lender will notify the
Borrower through the Agent of any event occurring after the date of this
Agreement which will require or enable such Lender to take the actions described
in SECTIONS 3.5(a) or (b) of this Agreement as promptly as practicable after it
obtains knowledge thereof and determines to request such action, and (if so
requested by the Borrower through the Agent) will designate a different lending
office of such Lender for the applicable Eurodollar Rate Borrowing or will take
such other action as the Borrower reasonably requests if such designation or
action is consistent with the internal policy of such Lender and legal and
regulatory restrictions, can be undertaken at no additional cost, will avoid the
need for, or reduce the amount of, such action and will not, in the sole opinion
of such Lender, be disadvantageous to such Lender (PROVIDED that such Lender
will have no obligation to designate a different lending office which is located
in the United States of America).
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(b) None of the Lenders shall be able to pass through to the
Borrower charges and costs under SECTIONS 3.5 or 5.14 of this Agreement on a
discriminating basis, such that such charges and costs are not also passed
through by each Lender to other customers of such Lender similarly situated
where such customer is subject to documents providing for such pass through.
(c) If any Lender elects under SECTION 3.5 of this Agreement
to suspend or terminate the availability of Eurodollar Rate Borrowings for any
material period of time, and the event giving rise to such election is not
generally applicable to all of the Lenders, the Borrower may within sixty (60)
days after notification of such Lender's election, and so long as no Event of
Default is then in existence, either (i) demand that such Lender, and upon such
demand, such Lender shall promptly, assign its Lender Commitment to another
financial institution subject to and in accordance with the provisions of
SECTION 9.5 of this Agreement for a purchase price equal to the unpaid balance
of principal, accrued interest, the unpaid balance of the Fee and expenses owing
to such Lender pursuant to this Agreement, or (ii) pay such Lender the unpaid
balance of principal, accrued interest, the unpaid balance of the Fee and
expenses owing to such Lender pursuant to this Agreement, whereupon, such Lender
shall no longer be a party to this Agreement or have any rights or obligations
hereunder or under any other Credit Documents, and the Commitment shall
immediately and permanently be reduced by an amount equal to the Lender
Commitment of such Lender.
4. REPRESENTATIONS AND WARRANTIES.
To induce the Lenders to enter into this Agreement and to make the
Loans, the Borrower jointly and severally represents and warrants to the Agent
and the Lenders as follows:
4.1. ORGANIZATION. Each Obligor is duly organized, validly existing and
in good standing under the laws of the state of its organization; has all power
and authority to conduct its business as presently conducted; and is duly
qualified to do business and in good standing in every state where the location
of its Property requires it to be qualified to do business, unless the failure
to be so qualified would not reasonably be expected to have a Material Adverse
Effect.
4.2 FINANCIAL STATEMENTS. The financial statements delivered to the
Agent fairly present, in accordance with Generally Accepted Accounting
Principles (provided, however, that the Quarterly Unaudited Financial Statements
are subject to normal year-end adjustments and may contain condensed footnotes
as permitted by regulations of the United States Securities and Exchange
Commission), the financial condition and the results of operations of the
Borrower as at the dates and for the periods indicated. No Material Adverse
Change has occurred since the dates of such financial statements. No Obligor is
subject to any instrument or agreement which would materially prevent it from
conducting its business as it is now conducted or as it is contemplated to be
conducted.
4.3 ENFORCEABLE OBLIGATIONS; AUTHORIZATION. The Credit Documents are
legal, valid and binding obligations of the Parties, enforceable in accordance
with their respective terms, except as
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may be limited by bankruptcy, insolvency and other laws affecting creditors'
rights generally and by general equitable principles. The execution, delivery
and performance of the Credit Documents have all been duly authorized by all
necessary action; are within the power and authority of the Parties; do not and
will not contravene or violate any Legal Requirement or the Organizational
Documents of the Parties; do not and will not result in the breach of, or
constitute a default under, any agreement or instrument by which the Parties or
any of their respective Property may be bound or affected; and do not and will
not result in the creation of any Lien upon any Property of any of the Parties
except as expressly contemplated therein. All necessary permits, registrations
and consents for such making and performance have been obtained.
4.4 OTHER DEBT. No Obligor is in default in the payment of any other
Total Liabilities or under any agreement, mortgage, deed of trust, security
agreement or lease to which it is a party.
4.5 LITIGATION. There is no litigation or administrative proceeding
pending or, to the knowledge of the Borrower, threatened against, or any
outstanding judgment, order or decree affecting, the Obligors before or by any
Governmental Authority which is not adequately covered by insurance. No Obligor
is in default with respect to any judgment, order or decree of any Governmental
Authority.
4.6 TAXES. Each Obligor has filed all tax returns required to have been
filed and paid all taxes shown thereon to be due, except those for which
extensions have been obtained, those which are being contested in good faith.
4.7 REGULATION U. None of the proceeds of any Loan will be used for the
purpose of purchasing or carrying directly or indirectly any margin stock or for
any other purpose that would constitute this transaction a "purpose credit"
within the meaning of Regulation U of the Board of Governors of the Federal
Reserve System.
4.8 SUBSIDIARIES. The Borrower has no Subsidiaries (excluding
wholly-owned Subsidiaries which have executed a Guaranty) which individually or
in the aggregate own more than ten percent (10%) in value of the Borrower's and
the Subsidiaries' consolidated assets determined in accordance with Generally
Accepted Accounting Principles. Each of the Borrower's Subsidiaries is a
"qualified REIT subsidiary" under Section 856 of the Code.
4.9 SECURITIES ACT OF 1933. Other than the Agent's efforts in
syndicating the Loans (for which the Agent is responsible) neither the Borrower
nor any agent acting for it has offered the Notes or any similar obligation of
the Borrower for sale to or solicited any offers to buy the Notes or any similar
obligation of the Borrower from any Person other than the Agent or any Lender,
and neither the Borrower nor any agent acting for it will take any action which
would subject the sale of the Note to the provisions of Section 5 of the
Securities Act of 1933, as amended.
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4.10 NO CONTRACTUAL OR CORPORATE RESTRICTIONS. No Obligor is a party
to, or bound by, any contract, agreement or charter or other corporate
restriction materially and adversely affecting its business, Property, assets,
operations or condition, financial or otherwise.
4.11 INVESTMENT COMPANY ACT NOT APPLICABLE. The Borrower is not an
"investment company", or a company "controlled" by an "investment company",
within the meaning of the Investment Company Act of 1940, as amended.
4.12 PUBLIC UTILITY HOLDING COMPANY ACT NOT APPLICABLE. The Borrower is
not a "holding company", or a "subsidiary company" of a "holding company", or an
"affiliate" of a "holding company", or an affiliate of a "subsidiary company" of
a "holding company", as such terms are defined in the Public Utility Holding
Company Act of 1935, as amended.
4.13 ERISA NOT APPLICABLE. No Obligor is subject to any requirements of
the Employee Retirement Income Security Act of 1974 as amended from time to
time, or any rules, regulations, rulings or interpretations adopted by the
Internal Revenue Service or the Department of Labor thereunder.
4.14 YEAR 2000. Any reprogramming required to permit the proper
functioning, in and following the year 2000 as it relates to the two digit
issues associated therewith, of (a) the Borrower's computer systems and (b)
equipment containing embedded microchips (including systems and equipment
supplied by others or with which Borrower's systems interface) and the testing
of all such systems and equipment, as so reprogrammed, will be completed by
January 1, 1999. The cost to the Borrower of such reprogramming and testing and
of the reasonably foreseeable consequences of year 2000 to the Borrower
(including, without limitation, reprogramming errors and the failure of others'
systems or equipment) will not result in a Default or a Material Adverse Effect.
Except for such of the reprogramming referred to in the preceding sentence as
may be necessary, the computer and management information systems of the
Borrower and its Subsidiaries are and, with ordinary course upgrading and
maintenance, will continue for the term of this Agreement to be, sufficient to
permit the Borrower to conduct its business without Material Adverse Effect.
5. AFFIRMATIVE COVENANTS.
The Borrower jointly and severally covenants and agrees with the Agent
and the Lenders that prior to the termination of this Agreement it and each of
the other Obligors will do, and if necessary cause to be done, each and all of
the following:
5.1 TAXES, EXISTENCE, REGULATIONS, PROPERTY, ETC. At all times (a) pay
when due all taxes and governmental charges of every kind upon it or against its
income, profits or Property, unless and only to the extent that the same shall
be contested in good faith and reserves which are adequate under Generally
Accepted Accounting Principles have been established therefor; (b) do all things
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necessary to preserve its existence, qualifications, rights and franchises in
all States where such qualification is necessary or desirable, except where
failure to obtain the same could not reasonably be expected to have a Material
Adverse Effect; (c) comply with all applicable Legal Requirements in respect of
the conduct of its business and the ownership of its Property; and (d) cause its
Property to be protected, maintained and kept in good repair (reasonable wear
and tear excepted) and make all replacements and additions to its Property as
may be reasonably necessary to conduct its business.
5.2 FINANCIAL STATEMENTS AND INFORMATION. Furnish to the Agent and the
Lenders each of the following: (a) as soon as available and in any event within
100 days after the end of each respective fiscal year of the Borrower Annual
Audited Financial Statements of EastGroup Properties, Inc. and annual unaudited
financial statements of the Operating Partnership (which shall include an
unaudited statement of Funds From Operations); (b) as soon as available and in
any event within 50 days after the end of each quarter (except the last quarter)
of each respective fiscal year of the Borrower, Quarterly Unaudited Financial
Statements of the Borrower (which shall include a statement of Funds From
Operations); (c) within fifty (50) days after the end of the calendar quarter
and concurrently with the financial statements provided for in SUBSECTIONS
5.2(a) and (b) hereof, (i) an Officer's Certificate, together with such
schedules, computations and other information (including, without limitation,
information as to Unconsolidated Affiliates of the Borrower), in reasonable
detail, as may be required by the Agent to demonstrate compliance with the
covenants set forth herein or reflecting any non-compliance therewith as of the
applicable date, all certified as true, correct and complete by a managing
director, vice president or senior vice president, of Borrower, and (ii) a
current capital plan for the next four (4) calendar quarters including projected
sources and uses of funds (including dividend and debt payments); (d) promptly
after the filing thereof, all reports to or filings made by the Borrower or any
of their respective Subsidiaries with the Securities and Exchange Commission,
including, without limitation, registration statements and reports on Forms
10-K, 10-Q and 8-K (or their equivalents); (e) within two (2) Business Days
after the receipt thereof, a copy of the notification to the Operating
Partnership of the Borrower's S&P Rating or ▇▇▇▇▇'▇ Rating, or change therein,
and (f) such other information relating to the financial condition and affairs
of the Borrower as from time to time may be reasonably requested by any Lender.
The Agent will send to each Lender the information received by the Agent
pursuant to this SECTION 5.2 promptly after the receipt thereof by Agent.
5.3 FINANCIAL TESTS. The Borrower shall have and maintain, on a
consolidated basis in accordance with Generally Accepted Accounting Principles:
(a) a Secured Debt to Total Asset Value Ratio no greater than
thirty-five percent (35%) at all times;
(b) an Interest Coverage Ratio of not less than 2.25:1.0 at all times;
(c) a Fixed Charge Coverage Ratio of not less than 1.50:1.00 at all
times;
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(d) a Tangible Net Worth of at least Two Hundred Seventy Million
Dollars ($270,000,000.00), plus eight-five percent (85%) of the net proceeds
(gross proceeds less reasonable and customary costs of sale and issuance paid to
Persons not Affiliates of any Obligor) received by the Borrower at any time from
the issuance of an ownership interest in the Borrower, at all times;
(e) an Unencumbered Interest Coverage Ratio of not less than 2.00:1.00
at all times;
(f) a Total Liabilities to Total Asset Value Ratio no greater than
fifty-five percent (55%) at all times; and
(g) an Unhedged Variable Rate Debt to Total Asset Value Ratio no
greater than thirty percent (30%) at all times.
5.4 INSPECTION. In order to permit the Agent to ascertain compliance
with the Credit Documents, during normal business hours permit the Agent to
inspect its Property, to examine its files, books and records and make and take
away copies thereof, and to discuss its affairs with its officers and
accountants, all at such times and intervals and to such extent as a Lender may
reasonably desire.
5.5 FURTHER ASSURANCES. Promptly execute and deliver any and all other
and further instruments which may be reasonably requested by the Agent to cure
any defect in the execution and delivery of any Credit Document or more fully to
describe particular aspects of the Borrower's agreements set forth in the Credit
Documents or so intended to be.
5.6 BOOKS AND RECORDS. Maintain books of record and account in
accordance with Generally Accepted Accounting Principles.
5.7 INSURANCE. Maintain insurance with such insurers, on such of its
properties, in such amounts and against such risks as is consistent with
insurance maintained by businesses of comparable type and size in the industry,
and furnish the Agent satisfactory evidence thereof promptly upon request.
5.8 NOTICE OF CERTAIN MATTERS. Notify the Agent promptly upon acquiring
knowledge of the occurrence of any of the following: the institution or
threatened institution of any lawsuit or administrative proceeding affecting any
Obligor in which the claim exceeds $1,000,000.00; when the Borrower believes
that there has been a Material Adverse Change; or the occurrence of any Event of
Default or any Default. The Borrower will notify the Agent in writing at least
thirty (30) Business Days prior to the date that any Obligor changes its name or
the location of its chief executive office or principal place of business or the
place where it keeps its books and records.
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5.9 USE OF PROCEEDS. The proceeds of the Loans will be used for general
business purposes. Notwithstanding the foregoing, none of the proceeds of the
Loans will be used to finance, fund or complete any hostile acquisition of any
Person.
5.10 EXPENSES OF AND CLAIMS AGAINST THE AGENT AND THE LENDERS. To the
extent not prohibited by applicable law, the Borrower will pay all reasonable
costs and expenses incurred to third parties and reimburse the Agent and each
Lender, as the case may be, for any and all reasonable expenditures of every
character incurred or expended from time to time, in connection with (a)
regardless of whether a Default or Event of Default shall have occurred, the
Agent's preparation, negotiation and completion of the Credit Documents, and (b)
during the continuance of an Event of Default, all costs and expenses relating
to the Agent's and such Lender's exercising any of its rights and remedies under
this or any other Credit Document, including, without limitation, attorneys'
fees, legal expenses, and court costs; PROVIDED, that no rights or option
granted by the Borrower to the Agent or any Lender or otherwise arising pursuant
to any provision of this or any other instrument shall be deemed to impose or
admit a duty on the Agent or any Lender to supervise, monitor or control any
aspect of the character or condition of any property or any operations conducted
in connection with it for the benefit of the Borrower or any other person or
entity other than the Agent or such Lender.
5.11 LEGAL COMPLIANCE; INDEMNIFICATION. (a) The Obligors shall operate
their respective Property and businesses in full compliance with all Legal
Requirements. EastGroup Properties, Inc. will comply with all Legal Requirements
to maintain, and will at all times qualify as and maintain, its status as a real
estate investment trust under Section 856(c)(1) of the Code.
(b) The Borrower shall indemnify the Agent and each Lender,
their directors, officers, employees and shareholders (the "INDEMNIFIED
PARTIES") for and defend and hold the Indemnified Parties harmless against any
and all claims, demands, liabilities, causes of action, penalties, obligations,
damages, judgments, deficiencies, losses, costs or expenses (including, without
limitation, interest, penalties, attorneys' fees, and amounts paid in
settlement) threatened or incurred by reason of, arising out of or in any way
related to any failure of any Obligor to so comply with the provisions of any
Legal Requirement, this Agreement or the other Credit Documents, and any and all
matters arising out of any act, omission, event or circumstance, regardless of
whether the act, omission, event or circumstance constituted a violation of any
such Legal Requirement, this Agreement or the other Credit Documents at the time
of its existence or occurrence. THE BORROWER SHALL INDEMNIFY THE AGENT AND EACH
LENDER PURSUANT TO THIS SECTION REGARDLESS OF WHETHER THE ACT, OMISSION, FACTS,
CIRCUMSTANCES OR CONDITIONS GIVING RISE TO SUCH INDEMNIFICATION WERE CAUSED IN
WHOLE OR IN PART BY THE AGENT'S OR SUCH LENDER'S NEGLIGENCE (SIMPLE, BUT NOT
GROSS NEGLIGENCE OR WILLFUL MISCONDUCT).
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5.12 OBLIGORS' PERFORMANCE. If any Obligor should fail to comply with
any of the agreements, covenants or obligations required of it under this
Agreement or any other Credit Document, then the Agent (in the Obligor's name or
in Agent's name) may perform them or cause them to be performed for the account
of the said Obligor and at the sole expense, but shall not be obligated to do
so. Any and all expenses thus incurred or paid by the Agent and by any Lender
shall be the Borrower's demand obligations to the Agent or such Lender and shall
bear interest from the date of demand therefor until the date that the Obligor
repays it to the Agent or the applicable Lender at the Past Due Rate. Upon
making any such payment or incurring any such expense, the Agent or the
applicable Lender shall be fully subrogated to all of the rights of the Person
receiving such payment. Any amounts owing by any Obligor to the Agent or any
Lender pursuant to this provision or any other provision of this Agreement shall
automatically and without notice be secured by any collateral provided by the
Credit Documents. The amount and nature of any such expense and the time when
paid shall, absent manifest error, be fully established by the affidavit of the
Agent or the applicable Lender or any of the Agent's or the applicable Lender's
officers or agents.
5.13 PROFESSIONAL SERVICES. Promptly upon the Agent's request to
satisfy itself or the request of any Lender, the Borrower, at the Borrower's
sole cost and expense, shall: (a) allow an inspection and/or appraisal of the
Obligors' Property to be made by a Person approved by the Agent in its sole
discretion; and (b) whenever the Agent or such other Lender has reasonable cause
to believe that a potential Default may exist, cause to be conducted or prepared
any other written report, summary, opinion, inspection, review, survey, audit or
other professional service relating to the Obligors' Property or any operations
in connection with it (all as designated in the Agent's request), including,
without limitation, any accounting, architectural, consulting, engineering,
design, legal, management, pest control, surveying, title abstracting or other
technical, managerial or professional service relating to such property or its
operations.
5.14 CAPITAL ADEQUACY. (a) If after the date of this Agreement, the
Agent or any Lender shall have determined that the adoption or effectiveness of
any applicable law, rule or regulation regarding capital adequacy of general
applicability, or any change therein, or any change in the interpretation or
administration thereof by any Governmental Authority, central bank or comparable
agency charged with the interpretation or administration thereof, or compliance
by the Agent or any Lender with any request or directive regarding capital
adequacy of general applicability (whether or not having the force of law) of
any such Governmental Authority, central bank or comparable agency, has or would
have the effect of reducing the rate of return on the Agent's or any Lender's
capital as a consequence of its obligations hereunder to a level below that
which the Agent or such Lender could have achieved but for such adoption, change
or compliance (taking into consideration the Agent's or such Lender's policies
with respect to capital adequacy) by an amount deemed by the Agent or such
Lender to be material, then from time to time, the Borrower shall pay to the
Agent or such Lender such additional amount or amounts as will compensate the
Agent or such Lender for such reduction.
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(b) A certificate of the Agent or such Lender setting forth
such amount or amounts as shall be necessary to compensate the Agent or such
Lender as specified in SECTION 5.14(a) hereof and making reference to the
applicable law, rule or regulation shall be delivered as soon as practicable to
the Borrower and shall be prima facie evidence thereof. The Borrower shall pay
the Agent or such Lender the amount shown as due on any such certificate within
fourteen (14) Business Days after the Agent or such Lender delivers such
certificate. In preparing such certificate, the Agent or such Lender may employ
such assumptions and allocations of costs and expenses as it shall in good ▇▇▇▇▇
▇▇▇▇ reasonable and may use any reasonable averaging and attribution method.
SECTION 3.8(b) hereof shall apply to the costs assessed under this Section.
5.15 PROPERTY POOL. A. The Borrower will and, subject to SECTION
5.15.C., the Borrower's Subsidiaries will, at all times own (in fee simple title
or through an Eligible Ground Lease) a pool (the "POOL") of assets that are not
mortgaged, pledged, hypothecated, or encumbered in any manner, other than
Permitted Encumbrances, with an aggregate Value (calculated based on the
immediately preceding six (6) calendar months and annualized) equal to at least
two hundred percent (200%) of the Borrower's Indebtedness other than Secured
Debt outstanding from time to time, with the following characteristics: (a)
assets in the Pool shall be completed income producing Industrial Buildings with
net rentable area of not less than 30,000 square feet (based on the number of
square feet of the Industrial Buildings owned by the Borrower or its Subsidiary
within one (1) mile of each other and treated as one property by such Person),
with parking sufficient to meet all Legal Requirements and consistent with
market conditions that will accommodate full occupancy of the building,
PROVIDED, HOWEVER, that ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ in Tysons Corner, Virginia, Los
Angeles Corporate Center Office Building in Los Angeles, California, Columbia
Place in Columbia, Maryland, LaVista Crossing Apartments in Atlanta, Georgia and
Grand Pointe Apartments in Mobile, Alabama will not be excluded from the Pool
because they are not Industrial Buildings; (b) each individual Property must
have an Occupancy Level of more than seventy percent (70%) at all times, except
for a ninety (90) day period beginning on the date the Occupancy Level is
seventy percent (70%) or less not more than once every twelve (12) months; (c)
assets in the Pool (other than the assets listed in the proviso of CLAUSE (a)
above) must be located in Approved Markets, except that no more than twenty
percent (20%) of the Value of the Pool can be located in any one Approved Market
other than Los Angeles, California, where no more than twenty-five percent (25%)
of the Value of the Pool (not including the Value of the Los Angeles Corporate
Center Office Building) can be located, (d) the Borrower must have received from
third party independent consultants, written assessments (including, without
limitation, Phase I environmental reports) for each Property in, or to be added
to, the Pool that do not disclose any material environmental conditions,
structural defects or title defects, or other material risks related to such
Property, (e) the Property is not subject to or affected by any Limiting
Agreement, and (f) the Occupancy Level of the Pool in the aggregate must be at
least eighty percent (80%). If requested by the Agent, the Borrower will provide
to the Agent written assessments from third party independent environmental
consultants for all Pool properties acquired after the date of this Agreement.
If the Agent determines that there are material environmental conditions
existing on or risks to such properties, the properties will be excluded from
the Pool.
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B. NOTWITHSTANDING THE FOREGOING, (a) the maximum value of the Pool
that consists of Eligible Ground Leases is fifteen percent (15%) of the value of
the Pool, before adding the effect of said Property; and (b) the maximum value
of the Pool attributable to a single Property is fifteen percent (15%) of the
value of the Pool before adding the effect of said Property.
C. If any Property to be included in the Pool is owned by a Subsidiary
of Borrower, it may be included in the Pool only if:
(a) the owner of the Property is either (i) a wholly owned
Subsidiary of the Borrower or (ii) if not a wholly owned Subsidiary,
then (x) the value of the Property owned by such Subsidiary ("PARTIAL
SUBSIDIARY REAL ESTATE") to be used in the calculation in CLAUSE (A)
above shall be as provided in CLAUSE (A) multiplied by the cumulative
percentage interest of the Subsidiary owned by the Borrower, (y) the
maximum value of the Pool that can be attributable to Partial
Subsidiary Real Estate is ten percent (10%) of the value of the Pool
before adding the effect of the Partial Subsidiary Real Estate, and (z)
the Borrower owns at least seventy-five percent (75%) of the indicia of
ownership of the Subsidiary, and controls all major decisions regarding
the Partial Subsidiary Real Estate, including the right to sell or
refinance the Partial Subsidiary Real Estate; and
(b) the owner of the Property (i) executes a Guaranty in
Proper Form and delivers it to the Agent, together with such
Subsidiary's Organizational Documents and current certificates of
existence and good standing for the state in which it is organized, and
such Guaranty must remain in full force and effect, and (ii) would not
at any time be in default of SECTIONS 7.1 (f), (g), (h), (i), or (j) if
said subsections were applicable to said owner.
D. If the Borrower requests inclusion of assets in the Pool that do not
meet the requirements of this SECTION 5.15, then such assets may only be
included in the Pool upon the prior written approval of the Majority Lenders.
5.16 CO-BORROWERS. (a) Each Borrower shall be bound jointly and
severally with one another to keep, observe and perform the covenants,
agreements, obligations and liabilities imposed by this Agreement upon the
"Borrower", (b) a release of one or more Persons comprising "Borrower" shall not
in any way be deemed a release of any other Person comprising "Borrower", and
(c) a separate action hereunder may be brought and prosecuted against one or
more of the Persons comprising "Borrower" without limiting any liability or
impairing the Agent's or any Lender's right to proceed against any other Person
comprising "Borrower".
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6. NEGATIVE COVENANTS.
The Borrower jointly and severally covenants and agrees with the Agent
and the Lenders that prior to the termination of this Agreement it will not
(without consent given in accordance with SECTION 9.1) do any of the following:
6.1 INDEBTEDNESS. Create, incur, suffer or permit to exist, or assume
or guarantee, directly or indirectly, contingently or otherwise, or become or
remain liable with respect to any Secured Debt, other than (a) Secured Debt of
no more than $20,000,000.00 in the aggregate assumed by the Borrower in
connection with the acquisition of Industrial Buildings, and (b) Non-recourse
Debt and liabilities customarily excepted from nonrecourse mortgage financing,
such as fraud, criminal activity and misapplication of funds.
6.2 MERGERS, CONSOLIDATIONS AND ACQUISITIONS OF ASSETS. In any single
transaction or series of related transactions, directly or indirectly: (a)
liquidate or dissolve; (b) other than a merger or consolidation in which the
Borrower is the surviving entity and the value of the assets of the other party
to such merger or consolidation is less than fifteen percent (15%) of the value
of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such merger or consolidation, be
a party to any merger or consolidation; (c) other than an acquisition in which
the Borrower acquires all or substantially all of the assets of another Person
and the value of the assets acquired is less than fifteen percent (15%) of the
value of the assets of the Borrower on a consolidated basis (in accordance with
Generally Accepted Accounting Principles) after such acquisition, acquire all or
substantially all of the assets of any Person; or (d) except for sales or leases
executed in the ordinary course of business, sell, convey or lease all or any
substantial part of its assets.
6.3 REDEMPTION. Neither Borrower shall at any time buy back, redeem,
retire or otherwise acquire, directly or indirectly, any shares of its capital
stock if such action would cause the Borrower to not be in compliance with this
Agreement, and so long as the aggregate market value of such stock when acquired
shall not exceed, during any calendar year, fifteen percent (15%) of Borrower's
Net Worth.
6.4 NATURE OF BUSINESS; MANAGEMENT. Change the nature of its business
or enter into any business which is substantially different from the business in
which it is presently engaged.
6.5 TRANSACTIONS WITH RELATED PARTIES. Enter into any transaction or
agreement with any officer, director, or holder of more than five percent (5%)
(based on voting rights) of the issued and outstanding capital stock of the
Borrower (or any Affiliate of the Borrower), unless the same is upon terms
substantially similar to those obtainable from qualified wholly unrelated
sources.
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6.6 LOANS AND INVESTMENTS. Make any loan, advance, extension of credit
or capital contribution to, or make or have any investment in, any Person, or
make any commitment to make any such extension of credit or investment, except:
(a) travel advances in the ordinary course of business to officers,
employees and agents;
(b) readily marketable securities issued or fully guaranteed by the
United States of America (or investments or money market accounts consisting of
the same);
(c) commercial paper rated "Prime 1" by ▇▇▇▇▇'▇ Investors Service, Inc.
or A-1 by Standard and Poor's Corporation (or investments or money market
accounts consisting of the same);
(d) certificates of deposit or repurchase certificates issued by
financial institutions acceptable to the Agent (or investments or money market
accounts consisting of the same), all of the foregoing b, c and d not having a
maturity of more than one (1) year from the date of issuance thereof;
(e) investments in Subsidiaries through which the Borrower invests in
real estate assets permitted by this Agreement;
(f) investments in Unconsolidated Affiliates that are engaged primarily
in the business of investment in and operation of Industrial Buildings (valued
at an amount equal to the Value of each Unconsolidated Affiliate's operating
real estate assets multiplied by the Equity Percentage for that Unconsolidated
Affiliate), so long as the aggregate amount of such investments described in
this CLAUSE (F) does not exceed five percent (5%) of the Total Asset Value after
giving effect to such investments;
(g) loans, advances, and extensions of credit to Persons (who are not
Affiliates of any Obligor) secured by valid and enforceable first priority liens
on real estate so long as the aggregate amount does not exceed ten percent (10%)
of Total Asset Value, after giving effect to such investments;
(h) undeveloped land, so long as the aggregate Historical Value of such
land does not exceed five percent (5%) of Total Asset Value, after giving effect
to such investments;
(i) investments in readily marketable securities (valued at the lower
of cost or then market price) of another Person, not an Affiliate of any
Obligor, traded on a national trading exchange, that is a real estate investment
trust under Section 856(c)(1) of the Code, or that is a real estate operating
company, so long as the aggregate amount of such investments does not exceed ten
percent (10%) of Total Asset Value, after giving effect to such investments;
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(j) investments in Industrial Buildings;
(k) investments in real estate assets that are being constructed or
developed (including such assets that the Person has contracted to purchase and
has no option to terminate without penalty) to be Industrial Buildings, but are
not yet in operation, so long as the total actual and budgeted cost of
construction or development, in the aggregate, at that time does not exceed
fifteen percent (15%) of the Total Asset Value after giving effect to such
investments; and
(l) investments in income producing operating Property other than
Industrial Buildings, so long as the aggregate Value of such investments does
not exceed fifteen percent (15%) of the Total Asset Value after giving effect to
such investments.
The Borrower will not mortgage, pledge, hypothecate or encumber in any manner
the loans, advances or extensions of credit made pursuant to SECTION 6.6(g) or
the securities held pursuant to SECTION 6.6(i). The calculations in this Section
will be made without duplication if a loan or investment is within more than one
category described in this Section.
6.7 LIMITING AGREEMENTS. Neither Borrower nor any of its Subsidiaries
has entered into, and after the date hereof, neither Borrower nor any of its
Subsidiaries shall enter into, any Limiting Agreements for assets in the Pool.
6.8 RESTRICTED PAYMENTS. EastGroup Properties, Inc. will not make any
Restricted Payment during any calendar quarter which, when added to all
Restricted Payments made during the three (3) immediately preceding calendar
quarters, (a) exceeds ninety percent (90%) of the Funds From Operations during
the immediately preceding four (4) calendar quarters, or (b) exceeds one hundred
percent (100%) of the Funds Available for Distribution during the immediately
preceding four (4) calendar quarters; PROVIDED that the foregoing shall not
prohibit EastGroup Properties, Inc. from (x) making the minimum amount of
Restricted Payments required to be made in order for EastGroup Properties, Inc.
to comply with the provisions of SECTION 5.11, or (y) issuing stock in EastGroup
Properties, Inc. to a transferor (not an Affiliate of any Obligor) of Property
to the Borrower as a result of said transferor's election to convert partnership
interests in EastGroup Properties, L.P. to stock in EastGroup Properties, Inc.
pursuant to agreements with said transferor allowing said conversion as a
portion of the consideration for the transfer. Notwithstanding the foregoing,
after the occurrence of an Event of Default, EastGroup Properties, Inc. will not
make any Restricted Payment except as required by CLAUSE (x) above. For purposes
of this provision "RESTRICTED PAYMENT" means (i) any dividend or other
distribution on any shares of a Person's capital stock (except dividends payable
solely in shares of its capital stock or in rights to subscribe for or purchase
shares of its capital stock) or (ii) any payment on account of the purchase,
redemption, retirement or acquisition of (x) any shares of a Person's capital
stock or (y) any option, warrant or other right to acquire shares of a Person's
capital stock.
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7. EVENTS OF DEFAULT AND REMEDIES.
7.1. EVENTS OF DEFAULT. If any of the following events shall occur,
then, as to the events described in SECTIONS 7.1(b), (c), and (d), if the event
has not been waived, cured or remedied within twenty (20) days after the Agent
gives the Borrower written notice of such event, at any time thereafter, and as
to all of the other events described herein, at any time, the Agent may do any
or all of the following: (1) without notice to the Borrower, declare the Notes
to be, and thereupon the Notes shall forthwith become, immediately due and
payable, together with all accrued interest thereon, without notice of any kind,
notice of acceleration or of intention to accelerate, presentment and demand or
protest, all of which are hereby expressly waived; (2) without notice to the
Borrower, terminate the Commitment; (3) exercise, as may any other Lender, its
rights of offset against each account and all other Property of the Borrower in
the possession of the Agent or any such Lender, which right is hereby granted by
the Borrower to the Agent and each Lender; and (4) exercise any and all other
rights pursuant to the Credit Documents:
(a) The Borrower shall fail to pay or prepay any principal of
or interest on the Notes or any fee or any other obligation hereunder
when due; or
(b) Any Obligor shall fail to pay when due, or within any
applicable period of grace, any principal of or interest on any other
Indebtedness in excess of $5,000,000.00, or
(c) Any written representation or warranty made in any Credit
Document by or on behalf of any Obligor, when taken as a whole shall
prove to have been incorrect, false or misleading in any material
respect; or
(d) Default shall occur in the punctual and complete
performance of any covenant of the Borrower or any other Person other
than the Agent or the Lenders contained in any Credit Document not
specifically set forth in this Section; or
(e) A final judgment or judgments in the aggregate for the
payment of money in excess of $5,000,000.00 shall be rendered against
any Obligor and the same shall remain undischarged for a period of
thirty (30) days during which execution shall not be effectively
stayed; or
(f) Any order shall be entered in any proceeding against any
Obligor decreeing the dissolution, liquidation or split-up thereof, and
such order shall remain in effect for more than thirty (30) days; or
(g) Any Obligor shall make a general assignment for the
benefit of creditors or shall petition or apply to any tribunal for the
appointment of a trustee, custodian, receiver or liquidator of all or
any substantial part of its business, estate or assets or shall
commence any
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proceeding under any bankruptcy, reorganization, arrangement,
insolvency, readjustment of debt, dissolution or liquidation law of any
jurisdiction, whether now or hereafter in effect; or
(h) Any such petition or application shall be filed or any
such proceeding shall be commenced against any Obligor and such Person
by any act or omission shall indicate approval thereof, consent thereto
or acquiescence therein, or an order shall be entered appointing a
trustee, custodian, receiver or liquidator of all or any substantial
part of the assets of any Obligor or granting relief to any Obligor or
approving the petition in any such proceeding, and such order shall
remain in effect for more than ninety (90) days; or
(i) Any Obligor shall fail generally to pay its debts as they
become due or suffer any writ of attachment or execution or any similar
process to be issued or levied against it or any substantial part of
its Property which is not released, stayed, bonded or vacated within
thirty (30) days after its issue or levy; or
(j) Any Obligor shall have concealed, removed, or permitted to
be concealed or removed, any part of its Property, with intent to
hinder, delay or defraud its creditors or any of them, or made or
suffered a transfer of any of its Property which may be fraudulent
under any bankruptcy, fraudulent conveyance or similar law; or shall
have made any transfer of its Property to or for the benefit of a
creditor at a time when other creditors similarly situated have not
been paid; or
(k) Any Change of Control shall occur.
7.2 REMEDIES CUMULATIVE. No remedy, right or power conferred upon the
Agent or the Lenders is intended to be exclusive of any other remedy, right or
power given hereunder or now or hereafter existing at law, in equity, or
otherwise, and all such remedies, rights and powers shall be cumulative.
8. THE AGENT.
8.1 APPOINTMENT, POWERS AND IMMUNITIES. (a) Each Lender hereby
irrevocably appoints and authorizes the Agent to act as its agent hereunder and
under the other Credit Documents with such powers as are specifically delegated
to the Agent by the terms hereof and thereof, together with such other powers as
are reasonably incidental thereto. The Agent (i) shall not have any duties or
responsibilities except those expressly set forth in this Agreement and the
other Credit Documents, and shall not by reason of this Agreement or any other
Credit Document be a trustee for any Lender; (ii) shall not be responsible to
any Lender for any recitals, statements, representations or warranties contained
in this Agreement or any other Credit Document, or in any certificate or other
document referred to or provided for in, or received by any of them under, this
Agreement or any other Credit Document, or for the value, validity,
effectiveness, genuineness, enforceability, execution, filing,
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registration, collectibility, recording, perfection, existence or sufficiency of
this Agreement or any other Credit Document or any other document referred to or
provided for herein or therein or any property covered thereby or for any
failure by any Party or any other Person to perform any of its obligations
hereunder or thereunder, and shall not have any duty to inquire into or pass
upon any of the foregoing matters; (iii) shall not be required to initiate or
conduct any litigation or collection proceedings hereunder or any other Credit
Document except to the extent requested by the Majority Lenders; (iv) SHALL NOT
BE RESPONSIBLE FOR ANY MISTAKE OF LAW OR FACT OR ANY ACTION TAKEN OR OMITTED TO
BE TAKEN BY IT HEREUNDER OR UNDER ANY OTHER CREDIT DOCUMENT OR ANY OTHER
DOCUMENT OR INSTRUMENT REFERRED TO OR PROVIDED FOR HEREIN OR THEREIN OR IN
CONNECTION HEREWITH OR THEREWITH, INCLUDING, WITHOUT LIMITATION, PURSUANT TO ITS
OWN NEGLIGENCE, BUT NOT INCLUDING AND EXCEPT FOR THE GROSS NEGLIGENCE OR WILLFUL
MISCONDUCT OF THE AGENT; (v) shall not be bound by or obliged to recognize any
agreement among or between the Borrower, the Agent, and any Lender other than
this Agreement and the other Credit Documents, regardless of whether the Agent
has knowledge of the existence of any such agreement or the terms and provisions
thereof; (vi) shall not be charged with notice or knowledge of any fact or
information not herein set out or provided to the Agent in accordance with the
terms of this Agreement or any other Credit Document; (vii) shall not be
responsible for any delay, error, omission or default of any mail, telegraph,
cable or wireless agency or operator, and (viii) shall not be responsible for
the acts or edicts of any Governmental Authority. The Agent may employ agents
and attorneys-in-fact and shall not be responsible for the negligence or
misconduct of any such agents or attorneys-in-fact selected by it with
reasonable care.
(b) Without the prior written consent of Agent and all of the Lenders,
Agent shall not (i) modify or amend in any respect whatsoever the interest rate
provisions of the Credit Documents, (ii) increase the Commitment above
$150,000,000.00, (iii) extend the Maturity Date other than in accordance with
the express provisions of the Credit Documents, (iv) extend or reduce the due
date for or the amount of the scheduled payments of principal or interest on the
Loans or the Fee, (v) amend the definition of Majority Lenders or any
requirement that certain actions be taken only with the consent of a certain
number of the Lenders, (vi) release any Guarantor or any collateral for the
Loans, (vii) modify or amend any provision of any Credit Document which by its
terms requires the consent of all of the Lenders for amendment, (viii) subject
to SECTION 5.15.D, amend the terms of SECTION 5.15, or (ix) amend the definition
of Value. From time to time upon Agent's request, each Lender shall execute and
deliver such documents and instruments as may be reasonably necessary to enable
Agent to effectively administer and service the Loan in its capacity as Agent
and in the manner contemplated by the provisions of this Agreement. No amendment
or agreement shall increase the Lender Commitment of any Lender without the
written consent of such Lender.
(c) All information provided to the Agent under or pursuant to the
Credit Documents, and all rights of the Agent to receive or request information,
or to inspect information or Property, shall
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be by the Agent on behalf of the Lenders. If any Lender requests that it be able
to receive or request such information, or make such inspections, in its own
right rather than through the Agent, the Borrower will cooperate with the Agent
and such Lender in order to obtain such information or make such inspection as
such Lender may reasonably require.
(d) The Borrower shall be entitled to rely upon a written notice or a
written response from the Agent as being pursuant to concurrence or consent of
the Majority Lenders unless otherwise expressly stated in the Agent's notice or
response.
8.2 RELIANCE. The Agent shall be entitled to rely upon any
certification, notice or other communication (including any thereof by
telephone, telex, telecopy, telegram or cable) reasonably believed by it to be
genuine and correct and to have been signed or sent by or on behalf of the
proper Person or Persons, and upon advice and statements of legal counsel (which
may be counsel for the Borrower), independent accountants and other experts
selected by the Agent. The Agent shall not be required in any way to determine
the identity or authority of any Person delivering or executing the same. As to
any matters not expressly provided for by this Agreement or any other Credit
Document, the Agent shall in all cases be fully protected in acting, or in
refraining from acting, hereunder and thereunder in accordance with instructions
of the Majority Lenders, and any action taken or failure to act pursuant thereto
shall be binding on all of the Lenders. If any order, writ, judgment or decree
shall be made or entered by any court affecting the rights, duties and
obligations of the Agent under this Agreement or any other Credit Document, then
and in any of such events the Agent is authorized, in its sole discretion, to
rely upon and comply with such order, writ, judgment or decree which it is
advised by legal counsel of its own choosing is binding upon it under the terms
of this Agreement, the relevant Credit Document or otherwise; and if the Agent
complies with any such order, writ, judgment or decree, then it shall not be
liable to any Lender or to any other Person by reason of such compliance even
though such order, writ, judgment or decree may be subsequently reversed,
modified, annulled, set aside or vacated.
8.3 DEFAULTS. The Agent shall not be deemed to have constructive
knowledge of the occurrence of a Default (other than the non-payment of
principal of or interest on Loans) unless it has received notice from a Lender
or the Borrower specifying such Default and stating that such notice is a
"Notice of Default". In the event that the Agent receives such a notice of the
occurrence of a Default, or whenever the Agent has actual knowledge of the
occurrence of a Default, the Agent shall give prompt written notice thereof to
the Lenders (and shall give each Lender prompt notice of each such non-payment).
The Agent shall (subject to SECTION 8.7 hereof) take such action with respect to
such Default as shall be directed by the Majority Lenders and within its rights
under the Credit Documents and at law or in equity, PROVIDED that, unless and
until the Agent shall have received such directions, the Agent may (but shall
not be obligated to) take such action, or refrain from taking such action,
permitted hereby with respect to such Default as it shall deem advisable in the
best interests of the Lenders and within its rights under the Credit Documents
in order to preserve, protect or enhance the collectibility of the Loans, at law
or in equity. PROVIDED, however,
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that if there is an occurrence of an Event of Default, then in no event or under
any circumstances shall any of the actions described in SECTIONS 8.1(b)(i)
through (ix) of this Agreement be taken, without in each instance the written
consent of Agent and all of the Lenders.
8.4 RIGHTS AS A LENDER. With respect to the Commitment and the Loans
made, Agent, in its capacity as a Lender hereunder shall have the same rights
and powers hereunder as any other Lender and may exercise the same as though it
were not acting in its agency capacity, and the term "Lender" or "Lenders"
shall, unless the context otherwise indicates, include the Agent in its
individual capacity. The Agent may (without having to account therefor to any
other Lender) as a Lender, and to the same extent as any other Lender, accept
deposits from, lend money to and generally engage in any kind of banking, trust,
letter of credit, agency or other business with the Borrower (and any of its
Affiliates) as if it were not acting as the Agent but solely as a Lender. The
Agent may accept fees and other consideration from the Borrower (in addition to
the fees heretofore agreed to between the Borrower and the Agent) for services
in connection with this Agreement or otherwise without having to account for the
same to the Lenders.
8.5 INDEMNIFICATION. The Lenders agree to indemnify the Agent, its
officers, directors, agents and Affiliates, ratably in accordance with each
Lender's respective Percentage, for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever (INCLUDING BUT NOT LIMITED TO,
THE CONSEQUENCES OF THE NEGLIGENCE OF THE AGENT) which may be imposed on,
incurred by or asserted against the Agent in any way relating to or arising out
of this Agreement or any other Credit Document or any other documents
contemplated by or referred to herein or therein, or the transactions
contemplated hereby or thereby (including, without limitation, interest,
penalties, reasonable attorneys' fees and amounts paid in settlement in
accordance with the terms of this SECTION 8, but excluding, unless a Default has
occurred and is continuing, normal administrative costs and expenses incident to
the performance of its agency duties hereunder) or the enforcement of any of the
terms hereof or thereof or of any such other documents, INCLUDING BUT NOT
LIMITED TO THE NEGLIGENCE OF THE AGENT, PROVIDED that no Lender shall be liable
for any of the foregoing to the extent they arise from the gross negligence or
willful misconduct of the party to be indemnified, or from the Agent's default
in the express obligations of the Agent to the Lenders provided for in this
Agreement. The obligations of the Lenders under this SECTION 8.5 shall survive
the termination of this Agreement and the repayment of the Obligations.
8.6 NON-RELIANCE ON AGENT AND OTHER LENDERS. Each Lender agrees that it
has received current financial information with respect to the Obligors and that
it has, independently and without reliance on the Agent or any other Lender and
based on such documents and information as it has deemed appropriate, made its
own credit analysis of the Obligors and decision to enter into this Agreement
and that it will, independently and without reliance upon the Agent or any other
Lender, and based on such documents and information as it shall deem appropriate
at the time, continue to make its own analysis and decisions in taking or not
taking action under this Agreement or any of the
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other Credit Documents. The Agent shall not be required to keep itself informed
as to the performance or observance by any Party of this Agreement or any of the
other Credit Documents or any other document referred to or provided for herein
or therein or to inspect the properties or books of the Borrower or any Party
except as specifically required by the Credit Documents. Except for notices,
reports and other documents and information expressly required to be furnished
to the Lenders by the Agent hereunder or the other Credit Documents, the Agent
shall not have any duty or responsibility to provide any Lender with any credit
or other information concerning the affairs, financial condition or business of
the Borrower or any other Party (or any of their affiliates) which may come into
the possession of the Agent. Each Lender assumes all risk of loss in connection
with its Percentage in the Loans to the full extent of its Percentage therein.
The Agent assumes all risk of loss in connection with its Percentage in the
Loans to the full extent of its Percentage therein.
8.7 FAILURE TO ACT. Except for action expressly required of the Agent,
as the case may be, hereunder, or under the other Credit Documents, the Agent
shall in all cases be fully justified in failing or refusing to act hereunder
and thereunder unless it shall receive further assurances to its satisfaction by
the Lenders of their indemnification obligations under SECTION 8.5 hereof
against any and all liability and expense which may be incurred by it by reason
of taking or continuing to take any such action.
8.8 RESIGNATION OF AGENT. Subject to the appointment and acceptance of
a successor Agent as provided below, the Agent may resign at any time by giving
notice thereof to the Lenders and the Borrower. Upon any such resignation, (i)
the Majority Lenders without the consent of the Borrower shall have the right to
appoint a successor Agent so long as such successor Agent is also a Lender at
the time of such appointment and (ii) the Majority Lenders shall have the right
to appoint a successor Agent that is not a Lender at the time of such
appointment so long as the Borrower (if no Event of Default is then in
existence) consents to such appointment (which consent shall not be unreasonably
withheld). If no successor Agent shall have been so appointed by the Majority
Lenders and accepted such appointment within 30 days after the retiring Agent's
giving of notice of resignation, then the retiring Agent may, on behalf of the
Lenders, and with the consent of the Borrower which shall not be unreasonably
withheld, appoint a successor Agent. Any successor Agent shall be an Eligible
Institution. Upon the acceptance of any appointment as Agent hereunder by a
successor Agent, such successor Agent shall thereupon succeed to and become
vested with all the rights, powers, privileges and duties of the retiring Agent,
and the retiring Agent shall be discharged from its duties and obligations as
Agent thereafter arising hereunder and under any other Credit Documents, but
shall not be discharged from any liabilities for its actions as Agent prior to
the date of discharge. Such successor Agent shall promptly specify by notice to
the Borrower its principal office referred to in SECTION 2.1 and SECTION 2.2
hereof. After any retiring Agent's resignation hereunder as Agent, the
provisions of this SECTION 8 shall continue in effect for its benefit in respect
of any actions taken or omitted to be taken by it while it was acting as the
Agent.
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46
8.9 NO PARTNERSHIP. Neither the execution and delivery of this
Agreement nor any of the other Credit Documents nor any interest the Lenders,
the Agent or any of them may now or hereafter have in all or any part of the
Obligations shall create or be construed as creating a partnership, joint
venture or other joint enterprise between the Lenders or among the Lenders and
the Agent. The relationship between the Lenders, on the one hand, and the Agent,
on the other, is and shall be that of principals and agent only, and nothing in
this Agreement or any of the other Credit Documents shall be construed to
constitute the Agent as trustee or other fiduciary for any Lender or to impose
on the Agent any duty, responsibility or obligation other than those expressly
provided for herein and therein.
9. MISCELLANEOUS.
9.1 NO WAIVER, AMENDMENTS. No waiver of any Default shall be deemed to
be a waiver of any other Default. No failure to exercise or delay in exercising
any right or power under any Credit Document shall operate as a waiver thereof,
nor shall any single or partial exercise of any such right or power preclude any
further or other exercise thereof or the exercise of any other right or power.
Except as may be prohibited by SECTION 8.1 hereof, no amendment, modification or
waiver of any provision of any Credit Document shall be effective unless the
same is in writing and signed by the Borrower and the Majority Lenders. No
notice to or demand on the Borrower or any other Person shall entitle the
Borrower or any other Person to any other or further notice or demand in similar
or other circumstances.
9.2 NOTICES. All notices under the Credit Documents shall be in writing
and either (i) delivered against receipt therefor, or (ii) mailed by registered
or certified mail, return receipt requested, in each case addressed as set forth
herein, or to such other address as a party may designate. Notices shall be
deemed to have been given (whether actually received or not) when delivered (or,
if mailed, on the next Business Day). PROVIDED, HOWEVER, that as between the
Agent and the Lenders and among the Lenders, notice may be given by telecopy or
facsimile effective upon the earlier of actual receipt or confirmation of
receipt by telephone.
9.3 VENUE. ▇▇▇▇▇▇ COUNTY, TEXAS SHALL BE A PROPER PLACE OF VENUE TO
ENFORCE PAYMENT OR PERFORMANCE OF THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS,
UNLESS THE AGENT SHALL GIVE ITS PRIOR WRITTEN CONSENT TO A DIFFERENT VENUE. THE
BORROWER HEREBY IRREVOCABLY SUBMITS TO THE NONEXCLUSIVE JURISDICTION OF THE
STATE AND FEDERAL COURTS IN THE STATE OF TEXAS AND AGREES AND CONSENTS THAT
SERVICE OF PROCESS MAY BE MADE UPON IT IN ANY PROCEEDING ARISING OUT OF ANY OF
THE CREDIT DOCUMENTS BY SERVICE OF PROCESS AS PROVIDED BY TEXAS LAW. THE
BORROWER HEREBY IRREVOCABLY WAIVES, TO THE FULLEST EXTENT PERMITTED BY LAW, ANY
OBJECTION WHICH IT MAY NOW OR HEREAFTER HAVE TO THE LAYING OF VENUE OF ANY SUIT,
ACTION OR
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PROCEEDING ARISING OUT OF OR RELATING TO ANY OF THE CREDIT DOCUMENTS IN THE
DISTRICT COURTS OF ▇▇▇▇▇▇ COUNTY, TEXAS, OR IN THE UNITED STATES DISTRICT COURT
FOR THE SOUTHERN DISTRICT OF TEXAS, HOUSTON DIVISION, AND HEREBY FURTHER
IRREVOCABLY WAIVES ANY CLAIMS THAT ANY SUCH SUIT, ACTION OR PROCEEDING BROUGHT
IN ANY SUCH COURT HAS BEEN BROUGHT IN AN INCONVENIENT FORUM. THE BORROWER (A)
AGREES TO DESIGNATE AND MAINTAIN AN AGENT FOR SERVICE OF PROCESS IN THE STATE OF
TEXAS IN CONNECTION WITH ANY SUCH SUIT, ACTION OR PROCEEDING AND TO DELIVER TO
THE AGENT EVIDENCE THEREOF AND (B) IRREVOCABLY CONSENTS TO THE SERVICE OF
PROCESS OUT OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH SUIT, ACTION OR
PROCEEDING BY NOTICE GIVEN AS PROVIDED FOR IN THIS AGREEMENT. NOTHING HEREIN
SHALL AFFECT THE RIGHT OF THE AGENT OR THE LENDERS TO COMMENCE LEGAL PROCEEDINGS
OR OTHERWISE PROCEED AGAINST THE BORROWER IN ANY JURISDICTION OR TO SERVE
PROCESS IN ANY MANNER PERMITTED BY APPLICABLE LAW. THE BORROWER HEREBY
IRREVOCABLY AGREES THAT ANY LEGAL ACTION OR PROCEEDING AGAINST THE AGENT OR ANY
LENDER ARISING OUT OF OR IN CONNECTION WITH THIS AGREEMENT OR THE OTHER CREDIT
DOCUMENTS SHALL BE BROUGHT AND MAINTAINED IN THE DISTRICT COURTS OF ▇▇▇▇▇▇
COUNTY, TEXAS, OR THE UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF
TEXAS, HOUSTON DIVISION.
9.4 CHOICE OF LAW. THIS AGREEMENT, THE NOTES AND THE OTHER CREDIT
DOCUMENTS HAVE BEEN NEGOTIATED, EXECUTED AND DELIVERED IN THE STATE OF TEXAS AND
SHALL BE GOVERNED BY, AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH, THE LAWS
OF THE STATE OF TEXAS, INCLUDING ALL APPLICABLE FEDERAL LAW, FROM TIME TO TIME
IN FORCE IN THE STATE OF TEXAS.
9.5 SURVIVAL; PARTIES BOUND; SUCCESSORS AND ASSIGNS. (a) All
representations, warranties, covenants and agreements made by or on behalf of
the Borrower in connection herewith shall survive the execution and delivery of
the Credit Documents, shall not be affected by any investigation made by any
Person, and shall bind the Borrower and its successors, trustees, receivers and
assigns and inure to the benefit of the successors and assigns of the Agent and
the Lenders; provided, however, that the Borrower may not assign or transfer any
of its rights or obligations hereunder without the prior written consent of the
Agent and all of the Lenders, and any such assignment or transfer without such
consent shall be null and void.
(b) Subject to SECTIONS 9.5(d) and (e) of this Agreement, a
Lender may assign part of its Lender Commitment to an Eligible Institution so
long as such assignment shall (1) include the voting rights and all other rights
and obligations attributable thereto, and include a written assumption by the
assignee of the assigning Lender's obligations under the Credit Documents, (2)
require the
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written consent of the Borrower (so long as no Event of Default is then in
existence) and the Agent, such consent not to be unreasonably withheld, (3) be
in a minimum amount of $5,000,000.00 if assigned to a Person not already a
Lender, (4) not reduce the Lender's Lender Commitment to an amount less than
$5,000,000.00, and (5) include payment to the Agent by the Lender of a service
fee for each assignment equal to $3,000.00.
(c) Subject to SECTION 9.5(d) and (e) of this Agreement, a
Lender may sell participating interests in any of its Loans to (A) an Eligible
Institution so long as such participation shall (1) limit the voting rights of
the participant, if any, to the ability to vote for changes in the amount of the
Commitment, the interest rate on the Loans, the amount of the Fee, the
requirements for Guaranties and for collateral, and the Maturity Date, and (2)
require written notice to the Agent and the Borrower but not any consent of the
Agent, the Borrower or any other Lender; and (B) any Person formed to hold
Eurodollar Rate Borrowings for specific Interest Periods, with liquidity and
credit support provided by the participating Lender, so long as such
participation shall convey no voting rights to the participant. In connection
with any sale of a participating interest made in compliance with this
Agreement, (i) the participating Lender shall continue to be liable for its
Lender Commitment and its other obligations under the Credit Documents, (ii) the
Agent, the Borrower and the other Lenders shall continue to deal solely and
directly with the participating Lender in connection with such Lender's rights
and obligations under the Credit Documents, and (iii) the participant may not
require the participating Lender to take or refrain from taking any action under
the Credit Documents that is in conflict with the terms and provisions of the
Credit Documents.
(d) A Lender may assign all or any part of its Loans or its
Lender Commitment to an Affiliate of the Lender without written consent of the
Agent and the Borrower.
(e) Notwithstanding any provision hereof to the contrary, any
Lender may assign and pledge all or any portion of its Lender Commitment and
Loans to a Federal Reserve Bank; provided, however, that any such assignment or
pledge shall not relieve such Lender from its obligations under the Credit
Documents.
(f) The term of this Agreement shall be until the final
maturity of the Notes and the payment of all amounts due under the Credit
Documents.
9.6 COUNTERPARTS. This Agreement may be executed in several identical
counterparts, and by the parties hereto on separate counterparts, and each
counterpart, when so executed and delivered, shall constitute an original
instrument, and all such separate counterparts shall constitute but one and the
same instrument.
9.7 USURY NOT INTENDED; REFUND OF ANY EXCESS PAYMENTS. It is the intent
of the parties in the execution and performance of this Agreement to contract in
strict compliance with the usury laws of the State of Texas and the United
States of America from time to time in effect. In
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furtherance thereof, the Agent, the Lenders and the Borrower stipulate and agree
that none of the terms and provisions contained in this Agreement or the other
Credit Documents shall ever be construed to create a contract to pay for the
use, forbearance or detention of money with interest at a rate in excess of the
Ceiling Rate and that for purposes hereof "interest" shall include the aggregate
of all charges which constitute interest under such laws that are contracted
for, reserved, taken, charged or received under this Agreement. In determining
whether or not the interest paid or payable, under any specific contingency,
exceeds the Ceiling Rate, the Borrower, the Agent and the Lenders shall, to the
maximum extent permitted under applicable law, (a) characterize any nonprincipal
payment as an expense, fee or premium rather than as interest, (b) exclude
voluntary prepayments and the effects thereof, and (c) "spread" the total amount
of interest throughout the entire contemplated term of the Loans. The provisions
of this paragraph shall control over all other provisions of the Credit
Documents which may be in apparent conflict herewith.
9.8 CAPTIONS. The headings and captions appearing in the Credit
Documents have been included solely for convenience and shall not be considered
in construing the Credit Documents.
9.9 SEVERABILITY. If any provision of any Credit Documents shall be
invalid, illegal or unenforceable in any respect under any applicable law, the
validity, legality and enforceability of the remaining provisions shall not be
affected or impaired thereby.
9.10 DISCLOSURES. Every reference in the Credit Documents to
disclosures of the Borrower to the Agent and the Lenders in writing, to the
extent that such references refer to disclosures at or prior to the execution of
this Agreement, shall be deemed strictly to refer only to written disclosures
delivered to the Agent and the Lenders in an orderly manner concurrently with
the execution hereof.
9.11 ENTIRE AGREEMENT. THIS AGREEMENT AND THE OTHER CREDIT DOCUMENTS
TOGETHER CONSTITUTE A WRITTEN AGREEMENT AND REPRESENT THE FINAL AGREEMENT
BETWEEN THE PARTIES AND MAY NOT BE CONTRADICTED BY EVIDENCE OF PRIOR,
CONTEMPORANEOUS OR SUBSEQUENT ORAL AGREEMENTS OF THE PARTIES. THERE ARE NO
UNWRITTEN ORAL AGREEMENTS BETWEEN THE PARTIES.
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50
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the date set forth above.
EASTGROUP PROPERTIES, L.P.,
a Delaware limited partnership
By: EastGroup Properties General
Partners, Inc., General Partner
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
By:
---------------------------------
Name:
-------------------------------
Title:
------------------------------
EASTGROUP PROPERTIES, INC.
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
By:
------------------------------------------
Name:
----------------------------------------
Title:
---------------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Chief Financial Officer
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51
Lender Commitment: $17,500,000.00 CHASE BANK OF TEXAS, NATIONAL
Percentage: 11.666666667% ASSOCIATION ,
as Agent and as a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: Manager, Real Estate Group
Telephone No.: ▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
With a copy to:
One Chase ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Agency Services
▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone No.: ▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $17,500,000.00 PNC BANK NATIONAL ASSOCIATION
Percentage: 11.666666667%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇: P1-▇▇▇▇-19-2
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telephone No.: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $17,500,000.00 AMSOUTH BANK
Percentage: 11.666666667%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ North
Commercial Real Estate, AST9
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
Telephone No.: ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $17,500,000.00 BANK ONE LOUISIANA, N.A.
Percentage: 11.666666667%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇
Telephone No.: ▇▇▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $17,500,000.00 FIRST UNION NATIONAL BANK
Percentage: 11.666666667%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $17,500,000.00 SOUTHTRUST BANK, NATIONAL
Percentage: 11.666666667% ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇▇
Corporate Banking, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No.: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $7,500,000.00 FIRST TENNESSEE BANK NATIONAL
Percentage: 5.000000000% ASSOCIATION
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
Commercial Real Estate
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
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Lender Commitment: $12,500,000.00 HIBERNIA NATIONAL BANK
Percentage: 8.333333333%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
313 Carondelet
▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇
Telephone No.: ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
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59
Lender Commitment: $17,500,000.00 FIRST AMERICAN NATIONAL BANK,
Percentage: 11.666666667% operating as DEPOSIT GUARANTY
NATIONAL BANK, as Co-Agent and
As a Lender
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇▇▇
Telephone No.: ▇▇▇▇ ▇▇▇▇▇▇▇▇
/Fountain ▇▇▇▇▇▇▇▇▇
▇▇▇-▇▇▇-▇▇▇▇/8222
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
-55-
60
Lender Commitment: $7,500,000.00 TRUSTMARK NATIONAL BANK
Percentage: 5.000000000%
By:
------------------------------------
Name:
----------------------------------
Title:
---------------------------------
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇
Telephone No.: ▇▇▇▇▇▇ ▇▇▇
▇▇▇-▇▇▇-▇▇▇▇
Telecopy No: ▇▇▇-▇▇▇-▇▇▇▇
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61
SCHEDULE I
TABLE 1
TOTAL LIABILITIES TO APPLICABLE MARGIN FEE RATE
TOTAL ASSET VALUE
RATIO
EURODOLLAR RATE BASE RATE
BORROWING BORROWING
Less than 35% 1.125% 0 .20%
Greater than or equal to
35% but less than 45% 1.250% 0 .25%
Greater than or equal to
45% 1.375% 0 .25%
TABLE 2
S&P RATING/ APPLICABLE MARGIN FEE RATE
▇▇▇▇▇'▇ RATING
EURODOLLAR RATE BASE RATE
BORROWING BORROWING
BBB+/Baal 0.875% 0 .15%
BBB/Baa2 1.000% 0 .15%
BBB-/Baa3 1.125% 0 .20%
Worse than BBB-/Baa3 1.375% 0 .25%
57
62
SCHEDULE II
APPROVED MARKETS
1. Florida: Jacksonville, Tampa, Orlando, South Florida (Ft. Lauderdale,
Pompano Beach, Palm Beach, Miami)
2. Texas: Dallas, Houston, El Paso, Austin
3. California: Los Angeles, San Diego, Sacramento, San Francisco Bay Area,
Fresno
4. Oklahoma: Oklahoma City, Tulsa
5. Tennessee: Memphis, Nashville
6. Arizona: Phoenix, Tucson
7. Colorado: Denver
8. Louisiana: New Orleans
9. Mississippi: Jackson
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