EXHIBIT 1.6
FIFTH AMENDED AND RESTATED
CREDIT AGREEMENT
(REVOLVING FACILITY)
AMONG
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP,
AS BORROWER,
MANUFACTURED HOME COMMUNITIES, INC.,
A MARYLAND CORPORATION,
AS A GUARANTOR,
MHC TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR,
MHC T1000 TRUST,
A MARYLAND REAL ESTATE INVESTMENT TRUST,
AS A GUARANTOR,
AND
THE FINANCIAL INSTITUTIONS PARTY HERETO, AS LENDERS
TOGETHER WITH THOSE ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.13, AS LENDERS,
▇▇▇▇▇ FARGO BANK, N.A.
AS ADMINISTRATIVE AGENT, SOLE LEAD ARRANGER,
SWINGLINE LENDER AND ISSUING LENDER,
BANK OF AMERICA, N.A.,
AS SYNDICATION AGENT,
AND
LASALLE BANK NATIONAL ASSOCIATION,
AS DOCUMENTATION AGENT
DATED AS OF NOVEMBER 10, 2004
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TABLE OF CONTENTS
PAGE
ARTICLE I. DEFINITIONS................................................................................................ 2
1.01 Certain Defined Terms............................................................................................ 2
1.02 Computation of Time Periods...................................................................................... 25
1.03 Terms............................................................................................................ 25
1.04 Interrelationship With the Existing Credit Agreement............................................................. 26
ARTICLE II. LOANS..................................................................................................... 26
2.01 Loan Advances and Repayment...................................................................................... 26
2.02 Authorization to Obtain Loans and Letters of Credit.............................................................. 28
2.03 Interest on the Loans............................................................................................ 28
2.04 Fees............................................................................................................. 33
2.05 Payments......................................................................................................... 34
2.06 Increased Capital................................................................................................ 35
2.07 Notice of Increased Costs........................................................................................ 35
2.08 Option to Replace Lenders........................................................................................ 35
2.09 Letters of Credit................................................................................................ 36
2.10 Swingline Loans.................................................................................................. 40
2.11 Funds Transfer Disbursements..................................................................................... 42
ARTICLE III. EXTENSION OPTION......................................................................................... 43
3.01 Extension Option................................................................................................. 43
ARTICLE IV. CONDITIONS TO LOANS....................................................................................... 44
4.01 Intentionally Omitted............................................................................................ 44
4.02 Conditions Precedent to All Loans and Issuance of Letters of Credit.............................................. 44
ARTICLE V. REPRESENTATIONS AND WARRANTIES............................................................................. 45
5.01 Representations and Warranties as to Borrower.................................................................... 45
5.02 Representations and Warranties as to the REIT.................................................................... 50
5.03 Representations and Warranties as to MHC Trust................................................................... 53
5.04 Representations and Warranties as to T1000 Trust................................................................. 55
ARTICLE VI. REPORTING COVENANTS....................................................................................... 56
6.01 Financial Statements and Other Financial and Operating Information............................................... 56
6.02 Press Releases; SEC Filings and Financial Statements............................................................. 59
6.03 Environmental Notices............................................................................................ 59
6.04 Qualifying Unencumbered Properties............................................................................... 59
ARTICLE VII. AFFIRMATIVE COVENANTS.................................................................................... 60
7.01 With respect to Borrower:........................................................................................ 60
7.02 With respect to the REIT:........................................................................................ 62
7.03 With respect to MHC Trust:....................................................................................... 63
ARTICLE VIII. NEGATIVE COVENANTS...................................................................................... 63
8.01 With respect to Borrower:........................................................................................ 63
8.02 With respect to the REIT:........................................................................................ 68
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8.03 With respect to MHC Trust:....................................................................................... 70
8.04 With respect to T1000 Trust:..................................................................................... 71
ARTICLE IX. FINANCIAL COVENANTS....................................................................................... 72
9.01 Total Liabilities to Gross Asset Value........................................................................... 72
9.02 EBITDA to Fixed Charges Ratio.................................................................................... 72
9.03 Unencumbered Net Operating Income to Unsecured Interest Expense.................................................. 72
9.04 Unencumbered Pool................................................................................................ 73
9.05 Minimum Net Worth................................................................................................ 73
9.06 Permitted Holdings............................................................................................... 73
9.07 Calculation...................................................................................................... 74
ARTICLE X. EVENTS OF DEFAULT; RIGHTS AND REMEDIES..................................................................... 74
10.01 Events of Default............................................................................................... 74
10.02 Rights and Remedies............................................................................................. 78
10.03 Rescission...................................................................................................... 79
10.04 Suspension of Lending........................................................................................... 79
ARTICLE XI. AGENCY PROVISIONS......................................................................................... 80
11.01 Appointment..................................................................................................... 80
11.02 Nature of Duties................................................................................................ 80
11.03 Loan Disbursements.............................................................................................. 80
11.04 Distribution and Apportionment of Payments...................................................................... 81
11.05 Rights, Exculpation, Etc........................................................................................ 82
11.06 Reliance........................................................................................................ 83
11.07 Indemnification................................................................................................. 83
11.08 Agent Individually.............................................................................................. 84
11.09 Successor Agent; Resignation of Agent; Removal of Agent......................................................... 84
11.10 Consents and Approvals.......................................................................................... 85
11.11 [Intentionally Omitted]......................................................................................... 86
11.12 [Intentionally Omitted]......................................................................................... 86
11.13 Assignments and Participations.................................................................................. 86
11.14 Ratable Sharing................................................................................................. 89
11.15 Delivery of Documents........................................................................................... 89
11.16 Notice of Events of Default..................................................................................... 89
11.17 Administrative Agent's Reliance................................................................................. 90
11.18 Decisions....................................................................................................... 90
ARTICLE XII. MISCELLANEOUS............................................................................................ 91
12.01 Expenses........................................................................................................ 91
12.02 Indemnity....................................................................................................... 92
12.03 Change in Accounting Principles................................................................................. 93
12.04 Setoff.......................................................................................................... 94
12.05 Amendments and Waivers.......................................................................................... 94
12.06 Independence of Covenants....................................................................................... 95
12.07 Notices and Delivery............................................................................................ 96
12.08 Survival of Warranties, Indemnities and Agreements.............................................................. 96
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative........................................................... 96
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12.10 Marshalling; Recourse to Security; Payments Set Aside........................................................... 96
12.11 Severability.................................................................................................... 97
12.12 Headings........................................................................................................ 97
12.13 Governing Law................................................................................................... 97
12.14 Limitation of Liability......................................................................................... 97
12.15 Successors and Assigns.......................................................................................... 97
12.16 Usury Limitation................................................................................................ 97
12.17 Confidentiality................................................................................................. 98
12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial; Waiver Of Permissive Counterclaims........ 98
12.19 Counterparts; Effectiveness; Inconsistencies.................................................................... 99
12.20 Construction.................................................................................................... 100
12.21 Entire Agreement................................................................................................ 100
12.22 Agent's Action for Its Own Protection Only...................................................................... 100
12.23 Lenders' ERISA Covenant......................................................................................... 100
12.24 Sole Lead Arranger, Documentation Agent and Syndication Agent................................................... 101
12.25 USA Patriot Act Notice; Compliance.............................................................................. 101
12.26 Tax Shelter Regulations......................................................................................... 101
EXHIBITS
A - Assignment and Assumption
B - REIT Guaranty
C - Form of Transfer Authorizer Designation
D - Revolving Loan Notes
E - Swingline Note
F - Qualifying Unencumbered Properties
G - Letter of Credit Note
H - Letter of Credit Application
I - Notice of Borrowing
J - Notice of Continuation/Conversion
SCHEDULES
5.01(c) - Ownership of Borrower
5.01(r) - Environmental Matters
5.01(w) - Subsidiaries and Investment Affiliates
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FIFTH AMENDED AND RESTATED CREDIT AGREEMENT
THIS FIFTH AMENDED AND RESTATED CREDIT AGREEMENT is dated as of
November 10, 2004 (as amended, supplemented or modified from time to time, the
"Agreement") and is among MHC Operating Limited Partnership, an Illinois limited
partnership ("Borrower"), Manufactured Home Communities, Inc., a Maryland
corporation (the "REIT"), MHC Trust, a Maryland real estate investment trust
("MHC Trust"), MHC T1000 Trust, a Maryland real estate investment trust, each of
the Lenders, as hereinafter defined, ▇▇▇▇▇ Fargo Bank, N.A ("▇▇▇▇▇ Fargo") in
its capacity as Agent, as Sole Lead Arranger, as Swingline Lender, as Issuing
Lender and as a Lender, Bank of America, N.A., as Syndication Agent and as a
Lender, LaSalle Bank National Association, as Documentation Agent and as a
Lender, and SouthTrust, N.A., as a Lender.
RECITALS
A. Borrower, the REIT and ▇▇▇▇▇ Fargo Realty Advisors Funding
Incorporated ("WFRAF"), in its capacity as Agent and as the sole Lender, have
previously entered into that certain Credit Agreement dated as of August 16,
1994 (the "Original Credit Agreement").
B. The Original Credit Agreement was amended and restated in its
entirety by that certain First Amended and Restated Credit Agreement dated as of
September 26, 1994 (the "First Amended Credit Agreement") by and among Borrower,
the REIT, WFRAF, as Agent and as a Lender, and Bank of America Illinois, as
Co-Agent and as a Lender.
C. The First Amended Credit Agreement was amended and restated in
its entirety by that certain Second Amended and Restated Credit Agreement dated
as of April 28, 1998 (the "Second Amended Credit Agreement") by and among
Borrower, the REIT, ▇▇▇▇▇ Fargo (as successor in interest to WFRAF), as Agent,
Swingline Lender, Issuing Lender, and a Lender, Bank of America National Trust
and Savings Association, as Syndication Agent and as a Lender, ▇▇▇▇▇▇ Guaranty
Trust Company of New York, as Documentation Agent and as a Lender, and
Commerzbank Aktiengesellschaft, New York Branch, as a Lender.
D. The Second Amended Credit Agreement was amended and restated in
its entirety by that certain Third Amended and Restated Credit Agreement dated
as of February 11, 2002 (as amended as described below, the "Third Amended
Credit Agreement") by and among Borrower, the REIT, ▇▇▇▇▇ Fargo (as successor in
interest to WFRAF), as Agent, Swingline Lender, Issuing Lender, and a Lender,
Bank of America, N.A., as Syndication Agent and as a Lender, LaSalle Bank
National Association, as Documentation Agent and as a Lender, and Commerzbank
Aktiengesellschaft, New York Branch, as a Lender.
E. Pursuant to that certain Assignment and Assumption, dated as of
August 30, 2002, by and between Bank of America, N.A. and SouthTrust, N.A., Bank
of America, N.A. assigned to SouthTrust, N.A. a 10.000000000% interest in the
Loan and the Facility, as defined in the Existing Credit Agreement.
F. Pursuant to that certain First Amendment to Third Amended and
Restated Credit Agreement, dated as of the date hereof, the maximum amount of
the Facility (as defined in the Existing Credit Agreement) was reduced and the
Commitment of Commerzbank
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Aktiengesellschaft, New York Branch, was terminated.
G. The Third Amended Credit Agreement was amended and restated in
its entirety by that certain Fourth Amended and Restated Credit Agreement dated
as of December 11, 2003 (the "Existing Credit Agreement") by and among Borrower,
the REIT, ▇▇▇▇▇ Fargo, as Agent, Swingline Lender, Issuing Lender and a Lender,
Bank of America, N.A., as Syndication Agent and as a Lender, LaSalle Bank
National Association, as Documentation Agent and as a Lender, and Southtrust,
N.A., as a Lender.
H. Borrower, the REIT, MHC Trust, T1000 Trust, ▇▇▇▇▇ Fargo, as
Agent, Sole Lead Arranger, Swingline Lender, Issuing Lender and as a Lender,
Bank of America, N.A., as Syndication Agent and as a Lender, LaSalle Bank
National Association, as Documentation Agent and as a Lender and the other
Lenders desire to further amend and restate the Existing Credit Agreement in its
entirety to make certain modifications as hereinafter set forth.
NOW THEREFORE, for good and valuable consideration, the receipt and
adequacy of which are hereby acknowledged, the parties hereto agree as follows:
AGREEMENT
ARTICLE I.
DEFINITIONS
1.01 Certain Defined Terms
The following terms used in this Agreement shall have the following
meanings (such meanings to be applicable, except to the extent otherwise
indicated in a definition of a particular term, both to the singular and the
plural forms of the terms defined):
"Accommodation Obligations" as applied to any Person, means any
obligation, contingent or otherwise, of that Person in respect of which that
Person is liable for any Indebtedness or other obligation or liability of
another Person, including without limitation and without duplication (i) any
such Indebtedness, obligation or liability directly or indirectly guaranteed,
endorsed (otherwise than for collection or deposit in the ordinary course of
business), co-made or discounted or sold with recourse by that Person, or in
respect of which that Person is otherwise directly or indirectly liable,
including Contractual Obligations (contingent or otherwise) arising through any
agreement to purchase, repurchase or otherwise acquire such Indebtedness,
obligation or liability or any security therefor, or to provide funds for the
payment or discharge thereof (whether in the form of loans, advances, stock
purchases, capital contributions or otherwise), or to maintain solvency, assets,
level of income, or other financial condition, or to make payment other than for
value received and (ii) any obligation of such Person arising through such
Person's status as a general partner of a general or limited partnership with
respect to any Indebtedness, obligation or liability of such general or limited
partnership.
"Accountants" means any nationally recognized independent accounting
firm.
"Adjusted Asset Value" means, as of any date of determination, (i)
for any Property for which the number of Owned Fiscal Quarters is less than four
(4), the Net Price of
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the Property paid by Borrower or such Subsidiary for such Property and (ii) for
any Property for which the number of Owned Fiscal Quarters is at least four (4),
the quotient of EBITDA attributable to such Property in a manner reasonably
acceptable to Agent for the then most recently ended twelve (12) calendar month
period divided by seven hundred fifty ten-thousandths (0.0750). Notwithstanding
the immediately preceding sentence, for the Thousand Trails Properties, (A) at
the end of the Fiscal Quarter ended December 31, 2004, the Adjusted Asset Value
means EBITDA attributable to the Thousand Trails Properties in a manner
reasonably acceptable to Agent (determined as if the Thousand Trails Transaction
had been consummated on October 1, 2004) for such Fiscal Quarter multiplied by
four (4) and divided by seven hundred fifty ten-thousandths (0.0750), (B) at the
end of the Fiscal Quarter ended March 31, 2005, the Adjusted Asset Value means
EBITDA attributable to the Thousand Trails Properties in a manner reasonably
acceptable to Agent (determined as if the Thousand Trails Transaction had been
consummated on October 1, 2004) for the period from October 1, 2004 to March 31,
2005 multiplied by two (2) and divided by seven hundred fifty ten-thousandths
(0.0750), (C) at the end of the Fiscal Quarter ended June 30, 2005, the Adjusted
Asset Value means EBITDA attributable to the Thousand Trails Properties in a
manner reasonably acceptable to Agent (determined as if the Thousand Trails
Transaction had been consummated on October 1, 2004) for the period from October
1, 2004 to June 30, 2005 multiplied by one and one-third (1.33) and divided by
seven hundred fifty ten-thousandths (0.0750), (D) at the end of the Fiscal
Quarter ended September 30, 2005, the Adjusted Asset Value means EBITDA
attributable to the Thousand Trails Properties in a manner reasonably acceptable
to Agent (determined as if the Thousand Trails Transaction had been consummated
on October 1, 2004) for the period from October 1, 2004 to September 30, 2005
divided by seven hundred fifty ten-thousandths (0.0750).
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote twenty-five percent (25%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, (b) the ownership of a general partnership interest in such Person
or (c) the ownership of twenty-five percent (25%) or more of the limited
partnership interests (or other ownership interests with similarly limited
voting rights) in such Person; provided, however, that in no event shall the
Affiliates of Borrower or any Subsidiary or any Investment Affiliate include
Persons holding direct or indirect ownership interests in the REIT, MHC Trust or
any other real estate investment trust which holds a general partnership
interest in Borrower if such Person does not otherwise constitute an "Affiliate"
hereunder; provided, further, that the REIT, MHC Trust, T1000 Trust and Borrower
shall at all times be deemed Affiliates of each other.
"Agent" means ▇▇▇▇▇ Fargo in its capacity as administrative agent
for the Lenders under this Agreement, and shall include any successor Agent
appointed pursuant hereto and shall be deemed to refer to ▇▇▇▇▇ Fargo in its
individual capacity as a Lender where the context so requires.
"Agreement" has the meaning ascribed to such term in the preamble
hereto.
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"Agreement Party" means any Person, other than the REIT and
Borrower, which concurrently with the execution of this Agreement or hereafter
executes and delivers a guaranty, or a joinder to a guaranty, in connection with
this Agreement, which as of the date of determination, is in force and effect.
"Applicable Margin" means, for any day, the rate per annum set forth
below opposite the applicable
Level Period then in effect:
Level Period Applicable Margin
------------ -----------------
Level I Period 1.25%
Level II Period 1.45%
Level III Period 1.65%
The Applicable Margin shall be adjusted for all purposes quarterly as soon as
reasonably practicable, but not later than five (5) days, after the date of
receipt by Agent of the quarterly financial information in accordance with the
provisions of Section 6.01(a), together with a calculation by Borrower of the
ratio of Total Liabilities to the sum of Gross Asset Values for Borrower and
each of its Subsidiaries as of the end of the applicable Fiscal Quarter. No
adjustment in the Applicable Margin shall be made retroactively.
"Assignment and Assumption" means an Assignment and Assumption in
the form of Exhibit A hereto (with blanks appropriately filled in) delivered to
Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 11.13.
"Balloon Payment" means, with respect to any loan constituting
Indebtedness, any required principal payment of such loan which is either (i)
payable at the maturity of such loan or (ii) in an amount which exceeds
twenty-five percent (25%) of the original principal amount of such loan;
provided, however, that the final payment of a fully amortizing loan shall not
constitute a Balloon Payment.
"Base Rate" means, on any day, a fluctuating interest rate per annum
as shall be in effect from time to time, which rate shall at all times be equal
to the higher of (a) the base rate of interest per annum established from time
to time by ▇▇▇▇▇ Fargo, and designated as its prime rate and in effect on such
day, and (b) the Federal Funds Rate as announced by the Federal Reserve Bank of
New York, in effect on such day plus one half percent (0.5%) per annum. Each
change in the Base Rate shall become effective automatically as of the opening
of business on the date of such change in the Base Rate, without prior written
notice to Borrower or Lenders. The Base Rate may not be the lowest rate of
interest charged by any bank, Agent or Lender on similar loans.
"Base Rate Loans" means those Loans bearing interest at the Base
Rate.
"Base Rent" means the aggregate rent received, on a consolidated
basis, by Borrower or any Subsidiary from tenants which lease sites at
Designated Use Properties owned by Borrower or any Subsidiary minus any amounts
specifically identified as and representing payments for trash removal, cable
television, water, electricity, other utilities, taxes and other
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rent which reimburses expenses related to the tenant's occupancy; provided,
however, that Base Rent shall not include rent received by any Subsidiary as
lessor under the Thousand Trails Lease.
"Benefit Plan" means any employee pension benefit plan as defined in
Section 3(2) of ERISA (other than a Multiemployer Plan) which a Person or any
ERISA Affiliate maintains, administers, contributes to or is required to
contribute to, or, within the immediately preceding five (5) years, maintained,
administered, contributed to or was required to contribute to, or under which a
Person or any ERISA Affiliate may have any liability.
"Borrower" has the meaning ascribed to such term in the preamble
hereto.
"Borrower Plan" shall mean any Plan (A) which Borrower, any of its
Subsidiaries or any of its ERISA Affiliates maintains, administers, contributes
to or is required to contribute to, or, within the five years prior to the
Closing Date, maintained, administered, contributed to or was required to
contribute to, or under which Borrower, any of its Subsidiaries or any of its
ERISA Affiliates may incur any liability and (B) which covers any employee or
former employee of Borrower, any of its Subsidiaries or any of its ERISA
Affiliates (with respect to their relationship with such entities).
"Borrower's Adjusted Share" means Borrower's, MHC Trust's and/or the
REIT's collective direct or indirect share of the assets, liabilities, income,
expenses or expenditures, as applicable, of an Investment Affiliate based upon
the greater of (i) Borrower's, MHC Trust's and/or the REIT's percentage
ownership (whether direct or indirect) of such Investment Affiliate, as provided
in the charter and by-laws, partnership agreements or other organizational or
governing documents of such Investment Affiliate and (ii) Borrower's and/or the
REIT's percentage ownership (whether direct or indirect) of such Investment
Affiliate, based upon its effective economic ownership of such Investment
Affiliate. For purposes of determining Borrower's Adjusted Share, at any time
that MHC Trust owns any general partnership interest in Borrower in accordance
with the terms and conditions of this Agreement, the REIT shall be deemed to own
one hundred percent (100%) of all ownership interests in MHC Trust.
"Borrower's Share" means Borrower's, MHC Trust's and/or the REIT's
collective direct or indirect share of the assets, liabilities, income, expenses
or expenditures, as applicable, of an Investment Affiliate based upon
Borrower's, MHC Trust's and/or the REIT's percentage ownership (whether direct
or indirect) of such Investment Affiliate, as the case may be. For purposes of
determining Borrower's Share, at any time that MHC Trust owns any general
partnership interest in Borrower in accordance with the terms and conditions of
this Agreement, the REIT shall be deemed to own one hundred percent (100%) of
all ownership interests in MHC Trust.
"Borrowing" means a borrowing under the Facility.
"Business Day" means (a) with respect to any Borrowing, payment or
rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on
which Agent is open for business in Chicago and San Francisco and on which
dealings in Dollars are carried on in the London inter bank market, and (b) for
all other purposes any day excluding Saturday, Sunday and any day which is a
legal holiday under the laws of the States of California and Illinois, or is a
day on which banking institutions located in California and Illinois are
required or authorized by
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law or other governmental action to close.
"Capital Expenditures" means, as applied to any Person for any
period, the aggregate of all expenditures (whether paid in cash or accrued as
liabilities during that period and including that portion of Capital Leases
which is capitalized on the balance sheet of a Person) by such Person during
such period that, in conformity with GAAP, are required to be included in or
reflected by the property, plant or equipment or similar fixed asset accounts
reflected in the balance sheet of such Person, excluding any expenditures
reasonably determined by such Person as having been incurred for expansion of
the number of sites at a Designated Use Property owned by such Person.
"Capital Leases," as applied to any Person, means any lease of any
property (whether real, personal or mixed) by that Person as lessee which, in
conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) marketable direct obligations issued or
unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year after the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two nationally recognized rating services
reasonably acceptable to Agent; (c) domestic corporate bonds, other than
domestic corporate bonds issued by Borrower or any of its Affiliates, maturing
no more than 2 years after the date of acquisition thereof and, at the time of
acquisition, having a rating of at least A or the equivalent from two nationally
recognized rating services reasonably acceptable to Agent; (d) variable-rate
domestic corporate notes or medium term corporate notes, other than notes issued
by Borrower or any of its Affiliates, maturing or resetting no more than 1 year
after the date of acquisition thereof and having a rating of at least AA or the
equivalent from two nationally recognized rating services reasonably acceptable
to Agent; (e) commercial paper (foreign and domestic) or master notes, other
than commercial paper or master notes issued by Borrower or any of its
Affiliates, and, at the time of acquisition, having a long-term rating of at
least A or the equivalent from a nationally recognized rating service reasonably
acceptable to Agent and having a short-term rating of at least A-1 and P-1 from
S&P and ▇▇▇▇▇'▇, respectively (or, if at any time neither S&P nor ▇▇▇▇▇'▇ shall
be rating such obligations, then the highest rating from such other nationally
recognized rating services reasonably acceptable to Agent); (f) domestic and
Eurodollar certificates of deposit or domestic time deposits or Eurotime
deposits or bankers' acceptances (foreign or domestic) that are issued by a bank
(I) which has, at the time of acquisition, a long-term rating of at least A or
the equivalent from a nationally recognized rating service reasonably acceptable
to Agent and (II) if a domestic bank, which is a member of the FDIC; and (g)
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments,
provided that the collateral supporting such repurchase agreements shall have a
value not less than 101% of the principal amount of the repurchase agreement
plus accrued interest.
"Closing Date" means the date on which this Agreement shall become
effective in accordance with Section 12.19, which date shall be November 10,
2004 or such later date as to which Agent and Borrower agree in writing.
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"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, such Lender's Pro
Rata Share of the Facility which amount shall not exceed the principal amount
set out under such Lender's name under the heading "Loan Commitment" on the
counterpart signature pages attached to this Agreement or as set forth on an
Assignment and Assumption executed by such Lender, as assignee, as such amount
may be adjusted pursuant to the terms of this Agreement.
"Contaminant" means any pollutant (as that term is defined in 42
U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 C.F.R. Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), or any constituent of any such substance or waste, including, but not
limited to hydrocarbons (including naturally occurring or man-made petroleum and
hydrocarbons), flammable explosives, urea formaldehyde insulation, radioactive
materials, biological substances, PCBs, pesticides, herbicides, asbestos, sewage
sludge, industrial slag, acids, metals, or solvents.
"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including without limitation any
restrictive covenant affecting such Person or any of its properties).
"Controlled Ownership Interests" means ownership interests in a
Person where the REIT, MHC Trust or Borrower (independently or collectively) has
control over the management and operations of such Person.
"Convertible Securities" means evidences of indebtedness, shares of
stock, limited or general partnership interests or other ownership interests,
warrants, options, or other rights or securities which are convertible into or
exchangeable for, with or without payment of additional consideration, shares of
common stock of the REIT, MHC Trust or partnership interests of Borrower, as the
case may be, either immediately or upon the arrival of a specified date or the
happening of a specified event.
"Court Order" means any judgment, writ, injunction, decree, rule or
regulation of any court or Governmental Authority binding upon the Person in
question.
"Debt Service" means, for any period, Interest Expense for such
period plus scheduled principal amortization (exclusive of Balloon Payments) for
such period on all Indebtedness of the REIT, on a consolidated basis.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of two (2) Business Days after written
notice from Agent.
7
"Designated Use Property" means a property owned and operated
primarily (i) for the purpose of leasing sites to individuals on which such
individuals place manufactured homes or recreational vehicles for the purpose of
occupying such manufactured homes or recreational vehicles, (ii) as a daily stay
campground, membership interest campground or park model community, or (iii) for
the purpose of renting cabins on such property to individuals.
"Designated Use Property Mortgages" means Investment Mortgages
issued by any Person engaged primarily in the business of developing, owning,
and managing Designated Use Properties.
"Designated Use Property Ownership Interests" means partnership,
joint venture, membership or other equity interests issued by any Person engaged
primarily in the business of developing, owning, and managing Designated Use
Properties.
"Development Activity" means construction in process, that is being
performed by or at the direction of Borrower, any Subsidiary or any Investment
Affiliate, at any Designated Use Property that will be owned and operated by
Borrower, any Subsidiary or any Investment Affiliate upon completion of
construction, including construction in process at Designated Use Properties not
owned by Borrower, any Subsidiary or any Investment Affiliate but which
Borrower, any Subsidiary or any Investment Affiliate has the contractual
obligation to purchase. "Development Activity" shall include construction in
process for the purpose of expanding Designated Use Properties that are Thousand
Trails Properties but shall not include construction in process for the purpose
of expanding other Designated Use Properties owned by Borrower, any Subsidiary
or any Investment Affiliate.
"Documentation Agent" means LaSalle Bank National Association in its
capacity as documentation agent for the Lenders under this Agreement.
"DOL" means the United States Department of Labor and any successor
department or agency.
"Dollars" and "$" means the lawful money of the United States of
America.
"EBITDA" means, for any period and without duplication (i) Net
Income for such period, plus (ii) depreciation and amortization expense and
other non-cash items deducted in the calculation of Net Income for such period,
plus (iii) Interest Expense deducted in the calculation of Net Income for such
period, plus, (iv) Taxes deducted in the calculation of Net Income for such
period, minus (v) the gains (and plus the losses) from extraordinary or unusual
items or asset sales or write-ups or forgiveness of indebtedness included in the
calculation of Net Income, for such period, minus (vi) earnings of Subsidiaries
for such period distributed to third parties, plus (or minus in the case of a
loss) (vii) Borrower's Share of the net income (or loss) of each Investment
Affiliate for such period calculated in conformity with GAAP before
depreciation, minus (or plus in the case of a loss) (viii) Borrower's Share of
the gains (or losses) from extraordinary or unusual items or asset sales or
write-ups or forgiveness of indebtedness included in the calculation of the net
income of each Investment Affiliate for such period.
"Eligible Assignee" means any Person that is: (a) an existing
Lender; (b) a commercial bank, trust company, savings and loan association,
savings bank, insurance company, investment bank or pension fund organized under
the laws of the United States of
8
America, any state thereof or the District of Columbia, and having total assets
in excess of $5,000,000,000; or (c) a commercial bank organized under the laws
of any other country which is a member of the Organization for Economic
Co-operation and Development, or a political subdivision of any such country,
and having total assets in excess of $10,000,000,000, provided that such bank is
acting through a branch or agency located in the United States of America. If
such entity is not currently a Lender, such entity's (or in the case of a bank
which is a subsidiary, such bank's parent's) senior unsecured long term
indebtedness must be rated BBB or higher by S&P, Baa2 or higher by ▇▇▇▇▇'▇ or
the equivalent or higher of either such rating by another rating agency
acceptable to the Agent.
"Environmental Laws" means all federal, state, district, local and
foreign laws, and all orders, consent orders, judgments, notices, permits or
demand letters issued, promulgated or entered thereunder, relating to pollution
or protection of the environment, including laws relating to emissions,
discharges, releases or threatened releases of pollutants, contamination,
chemicals, or industrial substances or Contaminants into the environment
(including, without limitation, ambient air, surface water, ground water, land
surface or subsurface strata) or otherwise relating to the generation,
manufacture, processing, distribution, use, treatment, storage, disposal,
transport or handling of pollutants, contamination, chemicals, industrial
substances or Contaminants. The term Environmental Laws shall include, without
limitation, the Comprehensive Environmental Response, Compensation and Liability
Act of 1980, as amended ("CERCLA"); the Toxic Substances Control Act, as
amended; the Hazardous Materials Transportation Act, as amended; the Resource
Conservation and Recovery Act, as amended ("RCRA"); the Clean Water Act, as
amended; the Safe Drinking Water Act, as amended; the Clean Air Act, as amended;
all analogous state laws; the plans, rules, regulations or ordinances adopted,
or other criteria and guidelines promulgated pursuant to the preceding laws or
other similar laws, regulations, rules or ordinances now or hereafter in effect
regulating public health, welfare or the environment.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under federal or state Environmental Laws or
regulations, or (b) damages arising from, or costs incurred by such Governmental
Authority in response to, a Release or threatened Release of a Contaminant into
the environment
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, and any successor statute.
"ERISA Affiliate" means any (a) corporation which is, becomes, or is
deemed by any Governmental Authority to be a member of the same controlled group
of corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as a Person or is so deemed by such Person, (b) partnership, trade or
business (whether or not incorporated) which is, becomes or is deemed by any
Governmental Authority to be under common control (within the meaning of Section
414(c) of the Internal Revenue Code) with such Person or is so deemed by such
Person, (c) any Person which is, becomes or is deemed by any Governmental
Authority to be a member of the same "affiliated service group" (as defined in
Section 414(m) of the Internal Revenue Code) as such Person or is so deemed by
such Person, or (d) any other organization or arrangement described in Section
414(o) of the Internal Revenue Code which is, becomes or is deemed by such
Person or by any Governmental Authority to be required to be aggregated pursuant
to regulations issued under Section 414(o) of the Internal Revenue Code with
such
9
Person pursuant to Section 414(o) of the Internal Revenue Code or is so deemed
by such Person.
"Event of Default" means any of the occurrences set forth in Article
X after the expiration of any applicable grace period expressly provided
therein.
"Existing Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Existing Loans" means the "Loans" as defined in the Existing Credit
Agreement.
"Extended Maturity Date" has the meaning set forth in Section 3.01.
"Facility" means the loan facility of up to One Hundred Ten Million
Dollars ($110,000,000) described in Section 2.01(a).
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating interest
rate, rounded upwards to the nearest one hundredth of one percent (0.01%), per
annum equal for each day during such period to the weighted average of the rates
on overnight Federal Funds transactions with members of the Federal Reserve
System arranged by Federal Funds brokers, as published for such day (or, if such
day is not a Business Day, for the next preceding Business Day) by the Federal
Reserve Bank of New York, or, if such rate is not so published for any day which
is a Business Day, the average of the quotations for such day on such
transactions received by Agent from three Federal Funds brokers of recognized
standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the Federal
Reserve System or any governmental authority succeeding to its functions.
"Financial Statements" has the meaning ascribed to such term in
Section 6.01(a).
"FIRREA" means the Financial Institutions Recovery, Reform and
Enforcement Act of 1989, as amended from time to time.
"First Amended Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Fiscal Quarter" means a fiscal quarter of a Fiscal Year.
"Fiscal Year" means the fiscal year of Borrower, MHC Trust and the
REIT which shall be the twelve (12) month period ending on the last day of
December in each year.
"Fixed Charges" means, for any period, the sum of (i) Debt Service
for such period other than payments of principal of the Loan, as required by
Section 2.03(c) of the Term Loan Agreement, made during such period, (ii) 3% of
Base Rent for such period, and (iii) Borrower's Share of Capital Expenditures
from each Investment Affiliate for such period.
"Funding Date" means, with respect to any Loan made after the
Closing Date, the date of the funding of such Loan.
10
"Funds from Operations" means the definition of "Funds from
Operations" of the National Association of Real Estate Investment Trusts on the
date of determination (before allocation to minority interests).
"GAAP" means generally accepted accounting principles set forth in
the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination and which are consistent with the past practices of
the REIT, MHC Trust and Borrower.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Gross Asset Value" means with respect to any Person as of any date
of determination, (i) the sum of the Adjusted Asset Values for each Property
then owned by such Person plus (ii) the value of any cash or Cash Equivalent
then owned by such Person and not subject to any Lien plus (iii) Manufactured
Home Inventory Value with respect to such Person, at such time.
"Indebtedness," as applied to any Person (and without duplication),
means (a) all indebtedness, obligations or other liabilities (whether secured,
unsecured, recourse, non-recourse, direct, senior or subordinate) of such Person
for borrowed money, (b) all indebtedness, obligations or other liabilities of
such Person evidenced by Securities or other similar instruments, (c) all
reimbursement obligations and other liabilities of such Person with respect to
letters of credit or banker's acceptances issued for such Person's account or
other similar instruments for which a contingent liability exists, (d) all
obligations of such Person to pay the deferred purchase price of Property or
services, (e) all obligations in respect of Capital Leases of such Person, (f)
all Accommodation Obligations of such Person, (g) all indebtedness, obligations
or other liabilities of such Person or others secured by a Lien on any asset of
such Person, whether or not such indebtedness, obligations or liabilities are
assumed by, or are a personal liability of, such Person, (h) all indebtedness,
obligations or other liabilities (other than interest expense liability) in
respect of Interest Rate Contracts and foreign currency exchange agreements
excluding all indebtedness, obligations or other liabilities in respect of such
Interest Rate Contracts to the extent that the aggregate notional amount thereof
does not exceed the aggregate principal amount of any outstanding fixed or
floating rate Indebtedness, obligations or other liabilities permitted under
this Agreement that exist as of the date that such Interest Rate Contracts are
entered into or that are incurred no more than thirty (30) days after such
Interest Rate Contracts are entered into and (i) ERISA obligations currently due
and payable.
"Initial Maturity Date" means August 9, 2006.
"Interest Expense" means, for any period and without duplication,
total interest expense, whether paid, accrued or capitalized (including letter
of credit fees and the interest component of Capital Leases but excluding
interest expense covered by an interest reserve established under a loan
facility) of the REIT, on a consolidated basis and determined in
11
accordance with GAAP.
"Interest Period" means, relative to any LIBOR Loans comprising part
of the same Borrowing, the period beginning on (and including) the date on which
such LIBOR Loans are made as, or converted into, LIBOR Loans, and shall end on
(but exclude) the day which numerically corresponds to such date one (1), two
(2), three (3), six (6) or twelve (12) months thereafter (or, if such month has
no numerically corresponding day, on the last Business Day of such month), in
either case as Borrower may select in its relevant Notice of Borrowing pursuant
to Section 2.01(b); provided, however, that:
(a) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day (unless such next following Business Day is the first
Business Day of a calendar month, in which case such Interest Period shall
end on the Business Day next preceding such numerically corresponding
day);
(b) no Interest Period may end later than the Termination Date; and
(c) with the reasonable approval of Agent (unless any Lender has
previously advised Agent and Borrower that it is unable to enter into
LIBOR contracts for an Interest Period of such duration), an Interest
Period may have a duration of less than one (1) month.
"Interest Rate Contracts" means, collectively, interest rate swap,
collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of 1986, as
amended from time to time, and any successor statute.
"Investment" means, as applied to any Person, any direct or indirect
purchase or other acquisition by that Person of Securities, or of a beneficial
interest in Securities, of any other Person, and any direct or indirect loan,
advance (other than deposits with financial institutions available for
withdrawal on demand, prepaid expenses, advances to employees and similar items
made or incurred in the ordinary course of business), or capital contribution by
such Person to any other Person, including all Indebtedness and accounts owed by
that other Person which are not current assets or did not arise from sales of
goods or services to that Person in the ordinary course of business. The amount
of any Investment shall be determined in conformity with GAAP except as
otherwise specifically provided herein.
"Investment Affiliate" means any Person in whom the REIT, MHC Trust,
Borrower or any Subsidiary holds an equity interest, directly or indirectly,
whose financial results are not consolidated under GAAP with the financial
results of the REIT, MHC Trust or Borrower on the consolidated financial
statements of the REIT, MHC Trust and Borrower.
"Investment Mortgages" means mortgages securing indebtedness
directly or indirectly owed to Borrower or any of its Subsidiaries, including
certificates of interest in real estate mortgage investment conduits.
"Issuing Lender" means ▇▇▇▇▇ Fargo in its capacity as issuer of
Letters of Credit
12
under this Agreement, and shall include any successor Issuing Lender appointed
pursuant hereto.
"IRS" means the Internal Revenue Service and any Person succeeding
to the functions thereof.
"Joinder Agreement" means that certain Joinder to Amended and
Restated REIT Guaranty, dated as of the Closing Date made by MHC Trust and T1000
Trust for the benefit of the Lenders and Agent.
"Lender Affiliate" as applied to any Lender, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Lender. For purposes of this definition, "control" (including with
correlative meanings, the terms "controlling," "controlled by" and "under common
control with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote more than fifty percent (50%) of the Securities
having voting power for the election of directors of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by contract or otherwise,
or (b) the ownership of a general partnership interest or a limited partnership
interest representing more than fifty (50%) of the outstanding limited
partnership interests of a Person.
"Lender Reply Period" has the meaning ascribed to such term in
Section 11.10(a).
"Lenders" means ▇▇▇▇▇ Fargo and any other bank, finance company,
insurance or other financial institution which is or becomes a party to this
Agreement by execution of a counterpart signature page hereto or an Assignment
and Assumption, as assignee, provided that with respect to matters requiring the
consent to or approval of Requisite Lenders, the Supermajority Lenders, or all
Lenders at any given time, all then existing Defaulting Lenders will be
disregarded and excluded, and, for voting purposes only, "all Lenders" shall be
deemed to mean "all Lenders other than Defaulting Lenders."
"Letter of Credit Application" shall have the meaning ascribed to
such term in Section 2.09(b).
"Letter of Credit Documents" has the meaning set forth in Section
2.09(j) hereof.
"Letter of Credit Mandatory Borrowing" has the meaning set forth in
Section 2.09(f) hereof.
"Letter of Credit Note" means the promissory note evidencing the
Letter of Credit Obligations in the original principal amount of Thirty Million
Dollars ($30,000,000) executed by Borrower in favor of Issuing Lender, as it may
be amended, supplemented, replaced or modified from time to time. A copy of the
Letter of Credit Note is attached hereto as Exhibit G.
"Letter of Credit Obligations" means, collectively and without
duplication, (a) all reimbursement and other obligations of Borrower in respect
of Letters of Credit, and (b) all amounts paid by Lenders to Issuing Lender in
respect of Letters of Credit.
"Letters of Credit" means the letters of credit issued by Issuing
Lender pursuant to Section 2.09 hereof for the account of Borrower in an
aggregate face amount not to exceed
13
$30,000,000.00 outstanding at any one time, as they may be drawn on, replaced or
modified from time to time.
"Level I Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall be less than 0.55:1.
"Level II Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.55:1 but shall be less than 0.60:1.
"Level III Period" means a period during which the ratio of Total
Liabilities to the sum of Gross Asset Values for Borrower and each of its
Subsidiaries shall equal or exceed 0.60:1.
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including punitive and treble
damages), costs, disbursements and expenses (including without limitation
reasonable attorneys', experts' and consulting fees and costs of investigation
and feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBOR" means, relative to any Interest Period for any LIBOR Loan
included in any Borrowing, the rate of interest obtained by dividing (i) the
rate of interest determined by Agent (whose determination shall be conclusive
absent manifest error, which shall not include any lower determination by any
other banks) equal to the rate (rounded upwards, if necessary, to the nearest
one one-hundredth of one percent (.01%)) per annum reported by ▇▇▇▇▇ Fargo at
which Dollar deposits in immediately available funds are offered by ▇▇▇▇▇ Fargo
to leading banks in the Eurodollar inter bank market at or about 11:00 A.M.
London time two (2) Business Days prior to the beginning of such Interest Period
for delivery on the first day of such Interest Period for a period approximately
equal to such Interest Period and in an amount equal or comparable to the LIBOR
Loan to which such Interest Period relates, by (ii) a percentage expressed as a
decimal equal to one (1) minus the LIBOR Reserve Percentage.
"LIBOR Loan" means a Loan bearing interest, at all times during an
Interest Period applicable to such Loan, at a fixed rate of interest determined
by reference to LIBOR.
"LIBOR Reserve Percentage" means, relative to any Interest Period,
the average daily maximum reserve requirement (including, without limitation,
all basic, emergency, supplemental, marginal and other reserves) which is
imposed under Regulation D, as Regulation D may be amended, modified or
supplemented, on "Eurocurrency liabilities" having a term equal to the
applicable Interest Period (or in respect of any other category of liabilities
which includes deposits by reference to which the interest rate on LIBOR Loans
is determined or any category of extensions of credit or other assets which
includes loans by a non-United States office of any bank to United States
residents), which requirement shall be expressed as a decimal. LIBOR shall be
adjusted automatically on, and as of the effective date of, any change in the
LIBOR Reserve Percentage.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights-of-way, zoning restrictions and the like),
lien (statutory or other), preference, priority or
14
other security agreement or preferential arrangement of any kind or nature
whatsoever, including without limitation any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement (other than a financing
statement filed by a "true" lessor pursuant to Section 9-408 of the Uniform
Commercial Code) naming the owner of the asset to which such Lien relates as
debtor, under the Uniform Commercial Code or other comparable law of any
jurisdiction.
"Loans" means the loans made pursuant to the Facility, including,
without limitation, loans made pursuant to Section 2.01 hereof, Swingline Loans,
and Loans made pursuant to Mandatory Borrowings.
"Loan Availability" means the amount of the Facility from time to
time.
"Loan Documents" means, this Agreement, the Loan Notes, the REIT
Guaranty, the Joinder and all other agreements, instruments and documents
(together with amendments and supplements thereto and replacements thereof) now
or hereafter executed by the REIT, Borrower or any Agreement Party, which
evidence, guaranty or secure the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans (other
than Swingline Loans) in the aggregate original principal amount of One Hundred
Ten Million Dollars ($110,000,000) executed by Borrower in favor of Lenders, as
they may be amended, supplemented, replaced or modified from time to time.
Copies of the Loan Notes are attached hereto as Exhibit D.
"Mandatory Borrowing" means any Letter of Credit Mandatory Borrowing
or Swingline Mandatory Borrowing.
"Manufactured Home Inventory Value" means with respect to Borrower
and its Subsidiaries, as of any date of determination, the lesser of (i) the
total cost to Borrower or its Subsidiaries, as applicable, of all manufactured
home units, which have never been occupied (other than for short periods in the
ordinary course of Borrower's and its Subsidiaries' customary sales practices),
then owned by Borrower or any Subsidiary that were acquired new from the
manufacturers of such units, or from Persons who acquired such units new from
such manufacturers, within the one (1) year period immediately preceding the
date of determination and (ii) Thirty-Five Million Dollars ($35,000,000).
"Material Adverse Effect" means a material adverse effect upon (i)
the ability of Borrower or the REIT, MHC Trust or T1000 Trust to perform its
covenants and obligations under this Agreement and the other Loan Documents or
(ii) the ability of Agent or Lenders to enforce the Loan Documents. The phrase
"has a Material Adverse Effect" or "will result in a Material Adverse Effect" or
words substantially similar thereto shall in all cases be intended to mean "has
or will result in a Material Adverse Effect," and the phrase "has no (or does
not have a) Material Adverse Effect" or "will not result in a Material Adverse
Effect" or words substantially similar thereto shall in all cases be intended to
mean "does not or will not result in a Material Adverse Effect."
"Maturity Date" means the Initial Maturity Date, as such date may be
extended pursuant to Article III.
15
"Minimum Net Worth" means Seven Hundred Million Dollars
($700,000,000).
"Moody's" means ▇▇▇▇▇'▇ Investors Service, a Delaware corporation,
and its successors and assigns, and, if such corporation shall be dissolved or
liquidated or shall no longer perform the functions of a securities rating
agency, "Moody's" shall be deemed to refer to any other nationally recognized
securities rating agency designated by Agent.
"Multiemployer Plan" means an employee benefit plan defined in
Section 4001(a)(3) or Section 3(37) of ERISA which is, or within the immediately
preceding six (6) years was, maintained, administered, contributed to by or was
required to be contributed to by a Person or any ERISA Affiliate, or under which
a Person or any ERISA Affiliate may incur any liability.
"Net Income" means, for any period, the net income (or loss) after
Taxes of the REIT, on a consolidated basis, for such period calculated in
conformity with GAAP; provided, however, that Net Income shall not include the
net income (or loss) of Investment Affiliates.
"Net Operating Income" means, for any period, and with respect to
any Qualifying Unencumbered Property, the net operating income of such
Qualifying Unencumbered Property (attributed to such Property in a manner
reasonably acceptable to Agent) for such period (i) determined in accordance
with GAAP, (ii) determined in a manner which is consistent with the past
practices of the REIT, MHC Trust and Borrower, and (iii) inclusive of an
allocation of reasonable management fees and administrative costs to such
Qualifying Unencumbered Property consistent with the past practices of the REIT,
MHC Trust and Borrower, except that, for purposes of determining Net Operating
Income, income shall not (a) include security or other deposits, lease
termination or other similar charges, delinquent rent recoveries, unless
previously reflected in reserves, or any other items reasonably deemed by Agent
to be of a non-recurring nature or (b) be reduced by depreciation or
amortization or any other non-cash item.
"Net Price" means, with respect to the purchase of any Property by
Borrower or any Subsidiary, without duplication, (i) cash and Cash Equivalents
paid as consideration for such purchase, plus (ii) the principal amount of any
note or other deferred payment obligation delivered in connection with such
purchase (except as described in clause (iv) below), plus (iii) the value of any
other consideration delivered in connection with such purchase or sale
(including, without limitation, shares in the REIT and operating partnership
units or preferred operating partnership units in Borrower) (as reasonably
determined by Agent), minus (iv) the value of any consideration deposited into
escrow or subject to disbursement or claim upon the occurrence of any event,
minus (v) reasonable costs of sale and taxes paid or payable in connection with
such purchase.
"Net Worth" means, at any time, the sum of Gross Asset Values for
Borrower and each of its Subsidiaries at such time minus Total Liabilities at
such time.
"New Lender" shall have the meaning set forth in Section 11.13(k).
"Non-Designated Use Property" means Property which is not (i) used
for lease or operation of Designated Use Properties, (ii) Securities consisting
of stock issued by real estate investment trusts engaged primarily in the
development, ownership and management of Designated Use Properties, (iii)
Designated Use Property Mortgages or (iv) Designated Use
16
Property Ownership Interests.
"Non Pro Rata Loan" means a Loan (other than a Swingline Loan but
including a Mandatory Borrowing) or Letter of Credit draw with respect to which
less than all Lenders have funded their respective Pro Rata Shares of such Loans
or Letter of Credit draws (whether by making Loans or purchasing participation
interests in accordance with the terms hereof) and the failure of the
non-funding Lender or Lenders to fund its or their respective Pro Rata Shares of
such Loan or Letter of Credit draw constitutes a breach of this Agreement.
"Non-Recourse Indebtedness" means any single loan with respect to
which recourse for payment is limited to specific assets related to a particular
Property or group of Properties encumbered by a Lien securing such Indebtedness,
so long as the Adjusted Asset Value for such Property, or the total of the
Adjusted Asset Values for such group of Properties, does not exceed One Hundred
Million Dollars ($100,000,000); provided, however, that personal recourse to the
REIT, MHC Trust, Borrower or any Subsidiary by a holder of any such loan for
fraud, misrepresentation, misapplication of cash, waste, environmental claims
and liabilities and other circumstances customarily excluded by institutional
lenders from exculpation provisions and/or included in separate indemnification
agreements in non-recourse financing of real estate shall not, by itself,
prevent such loan from being characterized as Non-Recourse Indebtedness.
"Notice of Borrowing" means, with respect to a proposed Borrowing
pursuant to Section 2.01(b) or Section 2.10, a notice of borrowing duly executed
by an authorized officer of the sole general partner of Borrower substantially
in the form of Exhibit I.
"Notice of Continuation/Conversion" means a notice of continuation
or conversion of or to a LIBOR Loan duly executed by an authorized officer of
the sole general partner of Borrower substantially in the form of Exhibit J.
"Obligations" means, from time to time, all Indebtedness of Borrower
owing to Agent, Swingline Lender, Issuing Lender, any Lender, or any Person
entitled to indemnification pursuant to Section 12.02, or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement or any other Loan Document, whether
or not for the payment of money, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements and any other sum now or hereafter chargeable to Borrower
under or in connection with this Agreement or any other Loan Document.
Notwithstanding anything to the contrary contained in this definition,
Obligations shall not be deemed to include any obligations or liabilities of
Borrower to Agent or any Lender under an Interest Rate Contract, foreign
currency exchange agreement or other Contractual Obligation unless the same is
among Borrower and all Lenders.
"Officer's Certificate" means a certificate signed by a specified
officer of a Person certifying as to the matters set forth therein.
"Original Credit Agreement" has the meaning set forth in the
Recitals hereto.
"Original Obligations" means the "Obligations" as defined in the
Existing Credit
17
Agreement.
"Other Indebtedness" means all Indebtedness other than the
Obligations.
"Owned Fiscal Quarters" means, with respect to any Property, the
full Fiscal Quarters during which Borrower or any Subsidiary actually owned such
Property.
"PBGC" means the Pension Benefit Guaranty Corporation or any Person
succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Holdings" means any of the holdings and activities
described in Section 9.06, but only to the extent permitted in Section 9.06.
"Permitted Liens" means:
(a) Liens for Taxes, assessments or other governmental charges not
yet due and payable or which are being contested in good faith by
appropriate proceedings promptly instituted and diligently conducted in
accordance with Sections 7.01(d) or 7.02(g);
(b) statutory liens of carriers, warehousemen, mechanics,
materialmen and other similar liens imposed by law, which are incurred in
the ordinary course of business for sums not more than sixty (60) days
delinquent or which are being contested in good faith in accordance with
Sections 7.01(d) or 7.02(g);
(c) deposits made in the ordinary course of business to secure
liabilities to insurance carriers;
(d) Liens for purchase money obligations for equipment; provided
that (i) the Indebtedness secured by any such Lien does not exceed the
purchase price of such equipment, (ii) any such Lien encumbers only the
asset so purchased and the proceeds upon sale, disposition, loss or
destruction thereof, and (iii) such Lien, after giving effect to the
Indebtedness secured thereby, does not give rise to an Event of Default or
Unmatured Event of Default pursuant to Section 8.01(a);
(e) easements, rights-of-way, zoning restrictions, other similar
charges or encumbrances and all other items listed on Schedule B to
Borrower's or any Subsidiary's, as applicable, owner's title insurance
policies for any of Borrower's or any Subsidiary's real Properties, so
long as the foregoing do not interfere in any material respect with the
use or ordinary conduct of the business of Borrower or such Subsidiary, as
applicable, and do not diminish in any material respect the value of the
Property to which it is attached or for which it is listed; or
(f) Liens and judgments which have been or will be bonded or
released of record within thirty (30) days after the date such Lien or
judgment is entered or filed against the REIT, Borrower, any Subsidiary or
any Agreement Party.
18
"Person" means any natural person, employee, corporation, limited
partnership, limited liability partnership, general partnership, joint stock
company, limited liability company, joint venture, association, company, trust,
bank, trust company, land trust, business trust, real estate investment trust or
other organization, whether or not a legal entity, or any other nongovernmental
entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) in respect of which a Person or an ERISA
Affiliate, as applicable, is an "employer" as defined in Section 3(5) of ERISA.
"Pre-Closing Financials" has the meaning ascribed to such term in
Section 5.01(g).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments, as adjusted from time to time in accordance
with the provisions of this Agreement.
"Property" means, with respect to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
by such Person.
"Qualifying Unencumbered Property" means (a) the Properties listed
on Exhibit F hereto and (b) any Property designated by Borrower from time to
time pursuant to Section 6.04 which (i) is an operating Designated Use Property
wholly-owned (directly or beneficially) by Borrower or any Subsidiary
wholly-owned, directly or indirectly by Borrower and/or the REIT, (ii) is not
subject (nor are any direct or indirect equity interests in such Property
subject) to a Lien which secures Indebtedness of any Person other than a
Permitted Lien, (iii) is not subject (nor are any direct or indirect equity
interests in such Property subject) to any covenant, condition, or other
restriction which prohibits or limits the creation or assumption of any Lien
upon such Property, and (iv) has not been designated by Agent in a notice to
Borrower as not acceptable to the Requisite Lenders pursuant to Section 6.04;
provided, however, that the weighted average occupancy rate of the Properties
listed on Exhibit F together with those Properties designated by Borrower to be
Qualifying Unencumbered Properties pursuant to Section 6.04 (excluding (x)
expansion areas of such Properties which are purchased and/or developed on or
after the Closing Date, and (y) Designated Use Properties consisting of
recreational vehicle resorts, daily stay campgrounds, membership interest
campgrounds, cabin rentals or park model communities) shall be at least
seventy-five percent (75%); and provided, further, that Borrower may, upon at
least fifteen (15) Business Days prior notice to Agent, designate that any
Property listed on Exhibit F or otherwise designated as a Qualifying
Unencumbered Property is no longer a Qualifying Unencumbered Property (and upon
such designation, such Property shall no longer be a Qualifying Unencumbered
Property). Any Property shall cease to be a "Qualifying Unencumbered Property"
at such time as it fails to satisfy all the conditions set forth in clauses (i),
(ii) and (iii) of this definition.
"Recourse Indebtedness" means, with respect to any Person,
Indebtedness which is not Non-Recourse Indebtedness.
"Regulation D" means Regulation D of the Federal Reserve Board as in
effect
19
from time to time.
"Regulation T" means Regulation T of the Federal Reserve Board as in
effect from time to time.
"Regulation U" means Regulation U of the Federal Reserve Board as in
effect from time to time.
"Regulation X" means Regulation X of the Federal Reserve Board as in
effect from time to time.
"REIT" has the meaning ascribed to such term in the preamble hereto.
"REIT Guaranty" means the Amended and Restated REIT Guaranty dated
as of April 28, 1998 executed by the REIT, in favor of Agent and the Lenders, as
joined by MHC Trust and T1000 Trust pursuant to the Joinder Agreement. Copies of
the REIT Guaranty and the Joinder Agreement is attached hereto as Exhibit B.
"Release" may be either a noun or a verb and means the release,
spill, emission, leaking, pumping, pouring, emitting, emptying, escaping,
dumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any property,
including the movement of Contaminants through or in the air, soil, surface
water, groundwater or property.
"Remedial Action" means any action undertaken pursuant to
Environmental Laws to (a) clean up, remove, remedy, respond to, treat or in any
other way address Contaminants in the indoor or outdoor environment; (b) prevent
the Release or threat of Release or minimize the further Release of Contaminants
so they do not migrate or endanger or threaten to endanger public health or
welfare or the indoor or outdoor environment; or (c) perform pre-remedial
studies and investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in Section
4043(b) of ERISA, other than an event for which the thirty (30) day notice
requirement is waived by regulations, or any of the events described in Section
4062(f) or 4063(a) of ERISA.
"Requirements of Law" means, as to any Person, the charter and
by-laws, partnership agreements or other organizational or governing documents
of such Person, and any law, rule or regulation, permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building or land use requirement or
Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, Lenders whose Pro Rata
Shares, in the aggregate, are at least sixty-six and two-thirds percent (66
2/3%); provided, however, that, in determining such percentage at any given
time, all then existing Defaulting Lenders will be disregarded and excluded and
the Pro Rata Shares of Lenders shall be redetermined, for voting purposes only,
to exclude the Pro Rata Shares of such Defaulting Lenders; and provided,
further,
20
that so long as there are at least two (2) Lenders who are not Defaulting
Lenders, the Requisite Lenders must be comprised of a minimum of two (2)
Lenders; and provided, further, that for purposes of any amendment, modification
or waiver of the requirements of Article IX, the Requisite Lenders must include
Agent in its capacity as a Lender (provided Agent is not a defaulting Lender).
"S&P" means Standard & Poor's Rating Group, a division of McGraw
Hill, its successors and assigns, and, if Standard & Poor's Rating Group shall
be dissolved or liquidated or shall no longer perform the functions of a
securities rating agency, "S&P" shall be deemed to refer to any other nationally
recognized securities rating agency designated by Agent.
"Secretary's Certificate" has the meaning ascribed to such term in
Section 4.01(c)(i).
"Secured Debt" means Indebtedness, the payment of which is secured
by a Lien on any real Property owned or leased by the REIT, Borrower, or any
Subsidiary.
"Securities" means any stock, partnership interests, shares, shares
of beneficial interest, voting trust certificates, bonds, debentures, notes or
other evidences of indebtedness, secured or unsecured, convertible, subordinated
or otherwise, or in general any instruments commonly known as "securities," or
any certificates of interest, shares, or participations in temporary or interim
certificates for the purchase or acquisition of, or any right to subscribe to,
purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations.
"Securities Act" means the Securities Act of 1933, as amended to the
date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of 1934,
as amended to the date hereof and from time to time hereafter, and any successor
statute.
"Senior Loans" has the meaning ascribed to such term in Section
11.04(b).
"Sole Lead Arranger" means ▇▇▇▇▇ Fargo Bank, N.A. in its capacity as
sole lead arranger for the Lenders under this Agreement.
"Solvent" means as to any Person at the time of determination, such
Person (a) owns property the value of which (both at fair valuation and at
present fair saleable value) is greater than the amount required to pay all of
such Person's liabilities (including contingent liabilities and debts); (b) is
able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Subsidiary" means any Person, whose financial results are
consolidated under GAAP with the financial results of the REIT or Borrower on
the consolidated financial statements of the REIT or Borrower.
"Supermajority Lenders" means, collectively, Lenders whose Pro Rata
Shares, in the aggregate, are at least eighty-five percent (85%), provided,
however, that, in determining such percentage at any given time, all then
existing Defaulting Lenders will be disregarded and
21
excluded and the Pro Rata Shares of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of such Defaulting Lenders; and
provided, further, that, so long as there are at least two (2) Lenders who are
not Defaulting Lenders, the Supermajority Lenders must be comprised of a minimum
of two (2) Lenders; and provided, further, that for purposes of any amendment,
modification or waiver of the requirements of Article IX, the Supermajority
Lenders must include Agent in its capacity as a Lender (provided Agent is not a
Defaulting Lender).
"Swingline Mandatory Borrowing" has the meaning set forth in Section
2.10(b)(iv) hereof.
"Swingline Lender" means ▇▇▇▇▇ Fargo in its capacity as Swingline
Lender hereunder, and shall include any successor Swingline Lender appointed
pursuant hereto.
"Swingline Loan" means a Loan made by the Swingline Lender pursuant
to Section 2.10 hereof.
"Swingline Note" means the promissory note evidencing the Swingline
Loans in the original principal amount of Thirty Million Dollars ($30,000,000)
executed by Borrower in favor of Swingline Lender, as it may be amended,
supplemented, replaced or modified from time to time. A copy of the Swingline
Note is attached hereto as Exhibit E.
"Syndication Agent" means Bank of America, N.A. in its capacity as
syndication agent for the Lenders under this Agreement.
"T1000 Trust" means MHC T1000 Trust, a Maryland real estate
investment trust, following the consummation of the Thousand Trails Transaction.
T1000 Trust is a guarantor under the REIT Guaranty.
"Taxes" means all federal, state, local and foreign income and gross
receipts taxes.
"Termination Date" has the meaning ascribed to such term in Section
2.01(d).
"Termination Event" means (a) any Reportable Event, (b) the
withdrawal of a Person, or an ERISA Affiliate from a Benefit Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the occurrence of an obligation arising under Section 4041 of
ERISA of a Person or an ERISA Affiliate to provide affected parties with a
written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (d) the institution by the
PBGC of proceedings to terminate any Benefit Plan under Section 4042 of ERISA or
to appoint a trustee to administer any Benefit Plan, (e) any event or condition
which constitutes grounds under Section 4042 of ERISA for the appointment of a
trustee to administer a Benefit Plan, (f) the partial or complete withdrawal of
such Person or any ERISA Affiliate from a Multiemployer Plan which would have a
Material Adverse Effect, or (g) the adoption of an amendment by any Person or
any ERISA Affiliate to terminate any Benefit Plan which is subject to Title IV
of ERISA or Section 412 of the Internal Revenue Code or the treatment of an
amendment to a Benefit Plan as a termination under ERISA.
22
"Term Loan Agreement" means that certain Term Loan Agreement, dated
as of the date hereof, by and among Borrower, the REIT, MHC Trust, T1000 Trust,
▇▇▇▇▇ Fargo, as administrative agent, and the other Lenders thereunder, as the
same may be amended, supplemented or modified from time to time.
"Thousand Trails" means KTTI Holding Company, Inc., a Delaware
corporation, that, among other things, (i) owns and operates fifty-seven (57)
membership-based recreational vehicle and campground properties comprising
recreational vehicle and campground sites for which the members purchase an
initial membership and thereafter pay annual dues and (ii) owns the Thousand
Trails Land.
"Thousand Trails Land" means "Excess Land" as defined in the
Thousand Trails Lease, as in effect on the Closing Date.
"Thousand Trails Lease" means that certain Lease Agreement, dated as
of November 10, by and between MHC TT Leasing Company, Inc., a Delaware
corporation, as lessor, and Thousand Trails Operations Holding Company, L.P., a
Delaware limited partnership, as tenant, with respect to the Thousand Trails
Properties, other than the Thousand Trails Land.
"Thousand Trails Properties" shall mean the Properties owned,
directly or indirectly, by T1000 Trust as a result of the consummation of the
Thousand Trails Transaction.
"Thousand Trails Transaction" means the acquisition by T1000 Trust
of Thousand Trails through the creation of a directly- or indirectly-owned
acquisition Subsidiary and the merger of such Subsidiary into Thousand Trails,
with Thousand Trails being the surviving corporation, being renamed MHC TT
Holding Company, Inc. immediately after such merger and being, directly or
indirectly, a wholly-owned Subsidiary of Borrower. The total merger
consideration to be paid by Borrower or its Subsidiaries in connection with such
transaction is One Hundred Sixty Million Dollars ($160,000,000).
"Total Liabilities" means, without duplication, all Indebtedness of
the REIT on a consolidated basis, plus (i) all other items which, in accordance
with GAAP, would be included as liabilities on the liability side of the balance
sheet of the REIT, on a consolidated basis, and in any event shall include
recourse and non-recourse mortgage debt, letters of credit, purchase
obligations, forward equity sales, repurchase obligations, unsecured debt,
accounts payable, lease obligations (including ground leases) to the extent
required, in accordance with GAAP, to be classified as capital leases on the
balance sheet of the REIT, guarantees of indebtedness, subordinated debt and
unfunded obligations plus (ii) Borrower's Adjusted Share of Investment
Affiliates' Indebtedness; provided, however, that "Total Liabilities" shall not
include dividends declared by the REIT, MHC Trust or Borrower which are
permitted under Section 8.01(d) but not yet paid.
"Transient RV NOI" means, with respect to any Qualifying
Unencumbered Property that is a recreational vehicle resort property other than
a Thousand Trails Property, all of such Qualifying Unencumbered Property's Net
Operating Income that is not attributable to residents/guests at such property
who are either permanent residents of such property or who reside at such
property for the entire "season" applicable to such property.
"Unencumbered Asset Value" means, as of any date of determination,
(i) the
23
quotient of the Net Operating Income for the most recently ended twelve (12)
calendar month period which is attributable (in a manner reasonably acceptable
to Agent) to Qualifying Unencumbered Properties for which the number of Owned
Fiscal Quarters is at least four (4) divided by seven hundred seventy-five
ten-thousandths (0.0775) plus (ii) the aggregate of the Net Prices paid by
Borrower or such Subsidiary for all Qualifying Unencumbered Properties for which
the number of Owned Fiscal Quarters is less than four (4); provided, however,
that for purposes of determining the numerator of the quotient described in
clause (i) of this definition, Transient RV NOI shall be included only to the
extent it does not exceed fifteen percent (15%) of the aggregate Net Operating
Income for the applicable Qualifying Unencumbered Properties. Notwithstanding
the immediately preceding sentence, for any Qualifying Unencumbered Properties
that are Thousand Trails Properties, (A) at the end of the Fiscal Quarter ended
December 31, 2004, the Unencumbered Asset Value means EBITDA attributable to
such Qualifying Unencumbered Properties in a manner reasonably acceptable to
Agent (determined as if the Thousand Trails Transaction had been consummated on
October 1, 2004) for such Fiscal Quarter multiplied by four (4) and divided by
seven hundred seventy-five ten-thousandths (0.0775), (B) at the end of the
Fiscal Quarter ended March 31, 2005, the Unencumbered Asset Value means EBITDA
attributable to such Qualified Unencumbered Properties in a manner reasonably
acceptable to Agent (determined as if the Thousand Trails Transaction had been
consummated on October 1, 2004) for the period from October 1, 2004 to March 31,
2005 multiplied by two (2) and divided by seven hundred seventy-five
ten-thousandths (0.0775), (C) at the end of the Fiscal Quarter ended June 30,
2005, the Unencumbered Asset Value means EBITDA attributable to such Qualified
Unencumbered Properties in a manner reasonably acceptable to Agent (determined
as if the Thousand Trails Transaction had been consummated on October 1, 2004)
for the period from October 1, 2004 to June 30, 2005 multiplied by one and
one-third (1.33) and divided by seven hundred seventy-five ten-thousandths
(0.0775), (D) at the end of the Fiscal Quarter ended September 30, 2005, the
Unencumbered Asset Value means EBITDA attributable to such Qualified
Unencumbered Properties in a manner reasonably acceptable to Agent (determined
as if the Thousand Trails Transaction had been consummated on October 1, 2004)
for the period from October 1, 2004 to September 30, 2005 divided by seven
hundred seventy-five ten-thousandths (0.0775).
"Unencumbered Net Operating Income" means for any Fiscal Quarter,
Net Operating Income for such period from each Qualifying Unencumbered Property;
provided, however, that for purposes of determining Unencumbered Net Operating
Income, Transient RV NOI shall be included only to the extent it does not exceed
fifteen percent (15%) of the aggregate Net Operating Income for the applicable
Qualifying Unencumbered Properties.
"Unfunded Pension Liabilities" means the excess of a Benefit Plan's
accrued benefits, as defined in Section 3(23) of ERISA, over the current value
of that Plan's assets, as defined in Section 3(26) of ERISA.
"Uniform Commercial Code" means the Uniform Commercial Code as in
effect on the date hereof in the State of Illinois.
"Unmatured Event of Default" means an event which, with the giving
of notice or the lapse of time, or both, would constitute (a) an Event of
Default or (b) an "Event of Default" as defined in the Term Loan Agreement or
(c) an "Event of Default" as defined in the WFB Revolving Credit Agreement.
24
"Unsecured Debt" means, as of any date of determination and without
duplication, all Indebtedness of the REIT, Borrower or any Subsidiary, which is
not Secured Debt but excluding (i) all accounts payable of the REIT, Borrower or
any Subsidiary incurred in the ordinary course of business, (ii) all advance
rents received and (iii) all accrued interest payable.
"Unsecured Interest Expense" means Interest Expense other than
Interest Expense payable in respect of Secured Debt.
"Unused Amount" has the meaning ascribed to such term in Section
2.04(a).
"Unused Facility Fee" has the meaning ascribed to such term in
Section 2.04(b).
"Welfare Plan" means any "employee welfare benefit plan" as defined
in Section 3(1) of ERISA, which a Person or any ERISA Affiliate maintains,
administers, contributes to or is required to contribute to, or within the
immediately preceding five years maintained, administered, contributed to or was
required to contribute to, or under which a Person or any ERISA Affiliate may
incur any liability.
"▇▇▇▇▇ Fargo" has the meaning ascribed to such term in the preamble
hereto.
"WFB Revolving Credit Agreement" means that certain First Amended
and Restated Credit Agreement, dated as of the date hereof, by and among
Borrower, the REIT, MHC Trust, T1000 Trust and ▇▇▇▇▇ Fargo, as may be amended,
supplemented or modified from time to time.
"Wholly-Owned Subsidiary" means any Subsidiary which is wholly-owned
directly or indirectly by Borrower, MHC Trust or the REIT.
"WFRAF" has the meaning set forth in the Recitals hereto. 1.02
Computation of Time Periods. In this Agreement, unless otherwise specified, in
the computation of periods of time from a specified date to a later specified
date, the word "from" means "from and including" and the words "to" and "until"
each mean "to and including." Periods of days referred to in this Agreement
shall be counted in calendar days unless Business Days are expressly prescribed.
1.02 Computation of Time Periods. In this Agreement, unless
otherwise specified, in the computation of periods of time from a specified
date to a later specified date, the word "from" means "from and including" and
the words "to" and "until" each mean "to and including." Periods of days
referred to in this Agreement shall be counted in calendar days unless Business
Days are expressly prescribed.
1.03 Terms.
(a) Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP, provided that for purposes of references to the financial
results of the "REIT, on a consolidated basis," the REIT shall be deemed to own
one hundred percent (100%) of the partnership interests in Borrower.
(b) Any time the phrase "to the best of Borrower's knowledge" or a
phrase similar thereto is used herein, it means: "to the actual knowledge of the
executive officers of Borrower, MHC Trust, T1000 Trust and the REIT, after
reasonable inquiry of those agents, employees or contractors of the REIT,
Borrower, any Agreement Party or any Subsidiary who
25
could reasonably be anticipated to have knowledge with respect to the subject
matter or circumstances in question and review of those documents or instruments
which could reasonably be anticipated to be relevant to the subject matter or
circumstances in question."
(c) In each case where the consent or approval of Agent, Requisite
Lenders, Supermajority Lenders or all Lenders is required or their
non-obligatory action is requested by Borrower, such consent, approval or action
shall be in the sole and absolute discretion of Agent and, as applicable, each
Lender, unless otherwise specifically indicated.
1.04 Interrelationship With the Existing Credit Agreement. Effective
on the Closing Date, this Agreement shall amend and restate the provisions of
the Existing Credit Agreement in their entirety, and all Existing Loans and all
Loans made on or after the Closing Date shall be governed exclusively by the
terms of this Agreement. All Original Obligations outstanding on the Closing
Date (including without limitation all accrued and unpaid interest and fees)
shall, to the extent not paid on the Closing Date, be deemed to be Obligations
outstanding hereunder. The REIT Guaranty shall remain in full force and effect
with respect to the Obligations and is hereby reaffirmed. The parties
acknowledge and agree that the execution and delivery of this Agreement shall
not constitute a novation, payment and reborrowing or termination of the
Original Obligations and that all such Original Obligations outstanding on the
Closing Date are in all respects continued and outstanding as Obligations under
this Agreement.
ARTICLE II.
LOANS
2.01 Loan Advances and Repayment.
(a) Loan Availability.
(i) Subject to the terms and conditions set forth in this Agreement,
Lenders hereby agree to make Loans (other than Swingline Loans) to
Borrower from time to time during the period from the Closing Date to the
first Business Day preceding the Maturity Date; provided, that the sum of
the aggregate principal amount of all outstanding Loans (including
Swingline Loans) plus the aggregate face amount of all outstanding Letters
of Credit shall not exceed Loan Availability; and provided, further, that
if a Base Rate Loan is being made pursuant to Section 2.09(e) hereof to
reimburse Issuing Lender for a drawn Letter of Credit, to avoid a
duplicative reduction in the amount of Loan Availability, the drawn Letter
of Credit shall not be considered outstanding. All Loans (other than
Swingline Loans) under this Agreement shall be made by Lenders
simultaneously and proportionately to their respective Pro Rata Shares, it
being understood that no Lender shall be responsible for any failure by
any other Lender to perform its obligation to make a Loan hereunder and
that the Commitment of any Lender shall not be increased or decreased as a
result of the failure by any other Lender to perform its obligation to
make a Loan. The Loans (other than Swingline Loans) will be evidenced by
the Loan Notes. The Swingline Loans will be evidenced by the Swingline
Note.
(ii) Loans (including, without limitation, Swingline Loans) may be
voluntarily prepaid pursuant to Section 2.05(a) and, subject to the
provisions of this Agreement (including, without limitation, the
provisions of Section 2.11 hereof), any amounts so
26
prepaid may be reborrowed, up to the amount available under Section
2.01(a)(i) at the time of such Borrowing, until the Business Day next
preceding the Termination Date. The principal balance of the Loans shall
be payable in full on the Termination Date. During the term of this
Agreement and prior to the termination of the Commitments, Borrower shall
pay to Agent, within one (1) Business Day after Borrower's receipt of a
demand in writing from Agent for the benefit of Lenders, such principal
amounts as are necessary so that the sum of the aggregate principal
amounts of all outstanding Loans (including Swingline Loans) plus the
aggregate face amount of all outstanding Letters of Credit at any time
does not exceed Loan Availability at such time.
(b) Notice of Borrowing. Whenever Borrower desires to borrow under
this Section 2.01, Borrower shall give Agent, at ▇▇▇▇▇ Fargo Real Estate Group
Disbursement Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇, with a copy to: ▇▇▇▇▇ Fargo Bank, N.A., ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Account Officer, or such other address as
Agent shall designate, an original or facsimile Notice of Borrowing no later
than 10:00 A.M. (California time), not less than three (3) nor more than five
(5) Business Days prior to the proposed Funding Date of each Loan. Each Notice
of Borrowing shall specify (i) the Funding Date (which shall be a Business Day)
in respect of the Loan, (ii) the amount of the proposed Loan, provided that the
aggregate amount of such proposed Loan shall equal (A) in the case of Base Rate
Loans, One Million Dollars ($1,000,000) or integral multiples of One Hundred
Thousand Dollars ($100,000) in excess thereof, or (B) in the case of LIBOR
Loans, One Million Dollars ($1,000,000) or integral multiples of One Hundred
Thousand Dollars ($100,000) in excess thereof, and (iii) whether the Loan to be
made thereunder will be a Base Rate Loan or a LIBOR Loan and, if a LIBOR Loan,
the Interest Period. Any Notice of Borrowing pursuant to this Section 2.01(b)
shall be irrevocable. Each such Notice of Borrowing shall be accompanied by all
reports or documents required to be delivered by Borrower to Agent or any Lender
under this Agreement. Borrower may elect (A) so long as no Event of Default has
occurred and is continuing, to convert Base Rate Loans or any portion thereof
into LIBOR Loans, (B) to convert LIBOR Loans or any portion thereof into Base
Rate Loans, or (C) so long as no Event of Default has occurred and is
continuing, to continue any LIBOR Loans or any portion thereof for an additional
Interest Period, provided, however, that the aggregate amount of Loans being
continued as or converted into LIBOR Loans shall, in the aggregate, equal One
Million Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. The applicable Interest Period for the
continuation of any LIBOR Loan shall commence on the day on which the next
preceding Interest Period expires. Each such election shall be made by giving
Agent, at ▇▇▇▇ ▇. ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇
▇▇▇▇▇▇▇, a Notice of Continuation/Conversion by 10:00 A.M. (California time) on
the date of a conversion to a Base Rate Loan, or by 10:00 A.M. (California time)
not less than three (3) nor more than five (5) Business Days prior to the date
of a conversion to or continuation of a LIBOR Loan, specifying, in each case (1)
whether a conversion or continuation is to occur, (2) the amount of the
conversion or continuation, (3) the Interest Period therefor, in the case of a
conversion to or continuation of a LIBOR Loan, and (4) the date of the
conversion or continuation (which date shall be a Business Day). Agent shall
promptly notify each Lender, but in any event within one (1) Business Day after
receipt of such notice, of its receipt of each such notice and the contents
thereof. Notwithstanding anything to the contrary contained herein and subject
to the default interest provisions contained in Section 2.03, if an Event of
Default occurs and as a result thereof the Commitments are terminated, all LIBOR
Loans will convert to Base Rate Loans upon the
27
expiration of the applicable Interest Periods therefor or the date all Loans
become due, whichever occurs first. Except as provided above, the conversion of
a LIBOR Loan to a Base Rate Loan shall only occur on the last Business Day of
the Interest Period relating to such LIBOR Loan. In the absence of an effective
election by Borrower of a LIBOR Loan and Interest Period in accordance with the
above procedures prior to the third (3rd) Business Day prior to the expiration
of the then current Interest Period with respect to any LIBOR Loan, interest on
such LIBOR Loan shall accrue at the interest rate then applicable to a LIBOR
Loan for an Interest Period of thirty (30) days, effective immediately upon the
expiration of the then-current Interest Period, without prejudice, however, to
the right of Borrower to elect a Base Rate Loan or a different Interest Period
in accordance with the terms and provisions of this Agreement; provided,
however, that if such continuation shall cause the number of LIBOR Loan tranches
to exceed six (6), such LIBOR Loan shall be converted to a Base Rate Loan.
(c) Making of Loans. Subject to Section 11.03, Agent shall make the
proceeds of Loans (other than Swingline Loans) available to Borrower in El
Segundo, California on such Funding Date and shall disburse such funds in
Dollars and in immediately available funds not later than 1:00 P.M. Chicago time
to Borrower's account, at Bank of America, Account Number 73-▇▇▇▇▇▇▇▇ in
Chicago, Illinois, or such other account specified in the Notice of Borrowing
acceptable to Agent, with a confirming telephone call to Quantaze ▇▇▇▇▇ at (312)
279-1408 or ▇▇▇▇▇▇▇ ▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇.
(d) Term; Principal Payment. The outstanding balance of the Loans
(other than Swingline Loans, which by their terms shall mature earlier) shall be
payable in full on the earlier to occur of (A) the Maturity Date, and (B) the
acceleration of the Loans pursuant to Section 10.02(a) (the "Termination Date").
2.02 Authorization to Obtain Loans and Letters of Credit. Borrower
shall provide Agent with documentation reasonably satisfactory to Agent
indicating the names of those employees or agents of Borrower authorized by
Borrower to sign Notices of Borrowing, to request Letters of Credit and to
receive callback confirmations, and Agent and Lenders shall be entitled to rely
on such documentation until notified in writing by Borrower of any change(s) of
the persons so authorized. Agent, Swingline Lender and Issuing Lender shall be
entitled to act in good faith on the instructions of anyone identifying himself
as one of the Persons authorized to request Loans or Letters of Credit, and
Borrower shall be bound thereby in the same manner as if such Person were
actually so authorized. Borrower agrees to indemnify, defend and hold Lenders,
Agent, Swingline Lender and Issuing Lender harmless from and against any and all
Liabilities and Costs which may arise or be created by the acceptance of
instructions for making Loans, and issuing Letters of Credit.
2.03 Interest on the Loans
(a) Base Rate Loans. Subject to Section 2.03(d), all Base Rate Loans
shall bear interest on the average daily unpaid principal amount thereof from
the date made until paid in full at a fluctuating rate per annum equal to the
Base Rate. Base Rate Loans shall be made in minimum amounts of One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand Dollars
($100,000) in excess thereof.
(b) LIBOR Loans. Subject to Section 2.03(d), all LIBOR Loans shall
bear
28
interest on the unpaid principal amount thereof during the Interest Period
applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the Applicable Margin. Upon receipt of a Notice of
Borrowing requesting LIBOR Loans, Agent shall determine LIBOR applicable to the
Interest Period for such LIBOR Loans, and shall give notice thereof to Borrower
and Lenders; provided, however, that failure to give such notice shall not
affect the validity of such rate. Each determination by Agent of LIBOR shall be
conclusive and binding upon the parties hereto in the absence of demonstrable
error. LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or
One Hundred Thousand Dollar ($100,000) increments in excess thereof. No more
than six (6) LIBOR Loan tranches shall be outstanding at any one time.
(c) Interest Payments. Subject to Section 2.03(d), interest accrued
on all Loans shall be payable by Borrower in arrears on the first Business Day
of the first calendar month following the Closing Date, and the first Business
Day of each succeeding calendar month thereafter, and on the Termination Date.
(d) Default Interest. Notwithstanding the rates of interest
specified in Sections 2.03(a) and 2.03(b) and the payment dates specified in
Section 2.03(c), effective immediately upon demand by Agent after the occurrence
of an Event of Default and during the continuance of any Event of Default, the
principal balance of all Loans then outstanding and, to the extent permitted by
applicable law, any interest payments on the Loans not paid when due shall bear
interest payable upon demand at a rate which is five percent (5%) per annum in
excess of the rate or rates of interest otherwise payable under this Agreement.
All other amounts due Agent, Swingline Lender, Issuing Lender or Lenders
(whether directly or for reimbursement) under this Agreement or any of the other
Loan Documents if not paid when due, or if no time period is expressed, if not
paid within fifteen (15) days after written demand to Borrower, shall bear
interest from and after demand at the rate which is five percent (5%) per annum
in excess of the lowest rate or rates of interest otherwise payable under this
Agreement, or, if no Loans are then outstanding, at the rate which is five
percent (5%) per annum in excess of the rate of interest applicable to Base Rate
Loans.
(e) Late Fee. Borrower acknowledges that late payment hereunder will
cause Agent, Swingline Lender, Issuing Lender and Lenders to incur costs not
contemplated by this Agreement. Such costs include without limitation processing
and accounting charges. Therefore, if Borrower fails timely to pay any sum due
and payable hereunder through the Termination Date (other than payments of
principal), unless waived by Agent pursuant to Section 12.05(e), a late charge
of four cents ($.04) for each dollar of any interest payment due hereon and
which is not paid within ten (10) days after such payment is due or of any other
amount due hereon (other than payments of principal) and which is not paid
within thirty (30) days after such payment is due, shall be charged by Agent
(for the benefit of Swingline Lender, Issuing Lender and Lenders, as applicable)
and paid by Borrower for the purpose of defraying the expense incident to
handling such delinquent payment; provided, however, that no late charges shall
be assessed with respect to any amount for which Borrower is obligated to pay
interest at the rate specified in Section 2.03(d), provided, further, that in no
event shall Agent, Swingline Lender, Issuing Lender or Lenders be required to
refund any late fees paid by Borrower, notwithstanding the preceding proviso.
Borrower, Agent, Swingline Lender, Issuing Lender, and Lenders agree that this
late charge represents a reasonable sum considering all of the circumstances
existing on the date hereof and represents a fair and reasonable estimate of the
costs that Agent, Swingline Lender, Issuing Lender and Lenders will incur by
reason of late
29
payment. Borrower, Agent, Swingline Lender, Issuing Lender and Lenders further
agree that proof of actual damages would be costly and inconvenient. Acceptance
of any late charge shall not constitute a waiver of the default with respect to
the overdue installment, and shall not prevent Agent from exercising any of the
other rights available hereunder or under any other Loan Document. Such late
charge shall be paid without prejudice to any other rights of Agent.
(f) Computation of Interest. Interest and fees shall be computed on
the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if a
Loan is repaid on the same day on which it is made, one (1) day's interest shall
be paid on that Loan. Notwithstanding subsections (a), (b), (d) and (e) above,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law.
(g) Changes; Legal Restrictions. In the event that after the Closing
Date (A) the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a court or Governmental Authority or any change in
the interpretation or application thereof by a court or Governmental Authority,
or (B) compliance by Agent, Swingline Lender, Issuing Lender or any Lender with
any request or directive made or issued after the Closing Date (whether or not
having the force of law and whether or not the failure to comply therewith would
be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
(i) subjects Agent, Swingline Lender, Issuing Lender or any Lender
to any tax, duty or other charge of any kind with respect to the Facility,
this Agreement or any of the other Loan Documents or the Loans or the
Letters of Credit or changes the basis of taxation of payments to Agent,
Swingline Lender, Issuing Lender or such Lender of principal, fees,
interest or any other amount payable hereunder, except for net income,
gross receipts, gross profits or franchise taxes imposed by any
jurisdiction and not specifically based upon loan transactions;
(ii) imposes, modifies or holds applicable, in the determination of
Agent, Swingline Lender, Issuing Lender or any Lender, any reserve,
special deposit, compulsory loan, FDIC insurance, capital allocation or
similar requirement against assets held by, or deposits or other
liabilities in or for the account of, advances or loans by, or other
credit extended by, or any other acquisition of funds by, Agent, Swingline
Lender, Issuing Lender or such Lender or any applicable lending office
(except to the extent that the reserve and FDIC insurance requirements are
reflected in the "Base Rate" or "LIBOR Rate"); or
(iii) imposes on Agent, Swingline Lender, Issuing Lender or any
Lender any other condition materially more burdensome in nature, extent or
consequence than those in existence as of the Closing Date;
and the result of any of the foregoing is to (X) increase the cost to Agent,
Swingline Lender, Issuing Lender or any Lender of making, renewing, maintaining
or participating in the Loans or issuing or participating in the Letters of
Credit or to reduce any amount receivable hereunder or thereunder or (Y) to
require Agent, Swingline Lender, Issuing Lender or any Lender or any
30
applicable lending office to make any payment calculated by reference to the
amount of the Loan held or interest received by it; then, in any such case,
Borrower shall promptly pay to Agent, Swingline Lender, Issuing Lender or such
Lender, as applicable, upon demand, such amount or amounts (based upon a
reasonable allocation thereof by Agent, Swingline Lender, Issuing Lender or such
Lender to the financing transactions contemplated by this Agreement and affected
by this Section 2.03(g)) as may be necessary to compensate Agent, Swingline
Lender, Issuing Lender or such Lender for any such additional cost incurred,
reduced amounts received or additional payments made to the extent Agent,
Swingline Lender, Issuing Lender or such Lender generally imposes such
additional costs, losses and payments on other borrowers in similar
circumstances. Agent, Swingline Lender, Issuing Lender or such Lender shall
deliver to Borrower and in the case of a delivery by a Lender, such Lender shall
also deliver to Agent, a written statement in reasonable detail of the claimed
additional costs incurred, reduced amounts received or additional payments made
and the basis therefor as soon as reasonably practicable after Agent or such
Lender, as applicable, obtains knowledge thereof.
(h) Certain Provisions Regarding LIBOR Loans
(i) LIBOR Lending Unlawful. If any Lender shall determine in good
faith that the introduction of or any change in or in the interpretation
of any law makes it unlawful, or any central bank or other governmental
authority asserts that it is unlawful, for such Lender to make or maintain
any Loan as a LIBOR Loan, (A) the obligations of the Lenders to make or
maintain any Loans as LIBOR Loans shall, upon such determination,
forthwith be suspended until such Lender shall notify Agent that the
circumstances causing such suspension no longer exist, and (B) if required
by law or such assertion, all LIBOR Loans shall automatically convert into
Base Rate Loans.
(ii) Deposits Unavailable. If Agent shall have determined in good
faith that adequate means do not exist for ascertaining the interest rate
applicable hereunder to LIBOR Loans, then, upon notice from Agent to
Borrower the obligations of all Lenders to make or maintain Loans as LIBOR
Loans shall forthwith be suspended until Agent shall notify Borrower that
the circumstances causing such suspension no longer exist. Agent will give
such notice when it determines, in good faith, that such circumstances no
longer exist; provided, however, that Agent shall not have any liability
to any Person with respect to any delay in giving such notice.
(iii) Funding Losses. In the event any Lender shall incur any loss
or expense (including any loss or expense incurred by reason of the
liquidation or reemployment of deposits or other funds acquired by such
Lender to make or maintain any portion of any Loan as a LIBOR Loan) as a
result of:
(A) any continuance, conversion, repayment or prepayment of
the principal amount of any LIBOR Loans for any reason whatsoever on
a date other than the scheduled last day of the Interest Period
applicable thereto; or
(B) any Loans not being made as LIBOR Loans in accordance with
the Notice of Borrowing therefor, other than as a result of such
Lender's breach of its obligation to fund such Loans in accordance
with the terms hereof;
31
then, within fifteen (15) Business Days after Borrower's receipt of the
written notice of such Lender to Borrower with a copy to Agent, Borrower
shall reimburse such Lender for such loss or expense; provided, however,
that each Lender will use reasonable efforts to minimize such loss or
expense. Such written notice (which shall include calculations in
reasonable detail) shall, in the absence of demonstrable error, be
conclusive and binding on the parties hereto.
(i) Withholding Tax Exemption. Each Lender that is not created or
organized under the laws of the United States of America or a political
subdivision thereof shall deliver to Borrower and Agent no later than the
Closing Date (or, in the case of a Lender which becomes a Lender pursuant to
Section 11.13, the date upon which such Lender becomes a party hereto) a true
and accurate certificate executed in duplicate by a duly authorized officer of
such Lender, in a form satisfactory to Borrower and Agent, to the effect that
such Lender is capable, under the provisions of an applicable treaty concluded
by the United States of America (in which case the certificate shall be
accompanied by three (3) accurate and complete duly executed originals of Form
W-8BEN of the Internal Revenue Service) or under Section 1442 of the Internal
Revenue Code (in which case the certificate shall be accompanied by three (3)
accurate and complete duly executed originals of Form W-8ECI of the Internal
Revenue Service), of receiving payments of principal, interest and fees
hereunder without deduction or withholding of United States federal income tax.
Further, if at any time a Lender changes its applicable lending office or
selects an additional applicable lending office, it shall, at the same time or
promptly thereafter, but only to the extent the certificate and forms previously
delivered by it hereunder are no longer applicable or effective, deliver to
Borrower and Agent in replacement for, or in addition to, the certificate and
forms previously delivered by it hereunder, a true and accurate certificate
executed in duplicate by a duly authorized officer of such Lender accompanied by
three (3) accurate and complete duly executed originals of either Form W-8BEN of
the Internal Revenue Service or Form W-8ECI of the Internal Revenue Service,
whichever is applicable, indicating that such Lender is entitled to receive
payments of principal, interest and fees for the account of such changed or
additional applicable lending office under this Agreement without deduction or
withholding of United States federal tax. Each Lender further agrees to deliver
to Borrower and Agent a true and accurate certificate executed in duplicate by a
duly authorized officer of such Lender accompanied by three (3) accurate and
complete duly executed originals of either Form W-8BEN of the Internal Revenue
Service or Form W-8ECI of the Internal Revenue Service, whichever is
appropriate, substantially in a form satisfactory to Borrower and Agent, before
or promptly upon the occurrence of any event requiring a change in the most
recent certificate or Internal Revenue Service form previously delivered by it
to Borrower and Agent pursuant to this Section 2.03(j). Further, each Lender
which delivers a certificate accompanied by Form W-8BEN of the Internal Revenue
Service covenants and agrees to deliver to Borrower and Agent within fifteen
(15) days prior to January 1, 2005, and every third (3rd) anniversary of such
date thereafter, on which this Agreement is still in effect, another such
certificate and three (3) accurate and complete original signed copies of Form
W-8BEN (or any successor form or forms required under the Internal Revenue Code
or the applicable regulations promulgated thereunder), and each Lender that
delivers a certificate accompanied by Form W-8ECI of the Internal Revenue
Service covenants and agrees to deliver to Borrower and Agent within fifteen
(15) days prior to the beginning of each subsequent taxable year of such Lender
during which this Agreement is still in effect, another such certificate and
three (3) accurate and complete original signed copies of Internal Revenue
Service Form W-8ECI (or any successor form or forms required under the Internal
Revenue Code or the applicable regulations promulgated hereunder).
32
If (i) any Lender is required under this Section 2.03(j) to provide a
certificate or other evidence described above and fails to deliver to Borrower
and Agent such certificate or other evidence or (ii) any Lender delivers a
certificate to the effect that, as a result of the adoption of or any change in
any law, treaty, rule, regulation, guideline or determination of a Governmental
Authority after the date such Lender became a party hereto, such Lender is not
capable of receiving payments of interest hereunder without deduction or
withholding of United States federal income tax as specified therein and that it
is not capable of recovering the full amount of the same from a source other
than Borrower, then, to the extent required by law, as the sole consequence of
such Lender's failure to deliver the certificate described in (i) above or such
Lender's delivery of the certificate described in (ii) above, Borrower shall be
entitled to deduct or withhold taxes from the payments owed to such Lender.
2.04 Fees.
(a) Intentionally Deleted.
(b) Unused Facility Fee. Until the Obligations are paid in full and
this Agreement is terminated or, if sooner, the date the Commitments terminate,
and subject to Section 11.04(b), Borrower shall pay to Agent, for the account of
each Lender, an Unused Facility Fee accruing from and after the Closing Date at
the rate described below upon the amount during each calendar quarter of (i) the
Facility, minus (ii) the sum of (A) the average daily aggregate principal
balance of all Loans then outstanding other than Swingline Loans and (B) the
average daily aggregate face amount of all outstanding Letters of Credit (the
"Unused Amount"). The Unused Facility Fee will be calculated and will accrue at
the rate per annum of fifteen one-hundredths of one percent (.15%). Subject to
Section 11.04(b), each Lender shall be entitled to receive its Pro Rata Share of
such Unused Facility Fee. All such Unused Facility Fees payable under this
paragraph shall be payable in arrears on the fifth Business Day in each calendar
quarter beginning with the first calendar quarter after the Closing Date.
(c) Arrangement and Administrative Agency Fees. Borrower shall pay
Agent such fees as are provided for in the separate fee agreement between Agent
and Borrower, as in existence from time to time.
(d) Letter of Credit Fee. With respect to each Letter of Credit,
Borrower agrees to pay to Agent (i) a letter of credit fee equal to the
Applicable Margin on the face amount of such Letter of Credit for the term of
such Letter of Credit to be distributed by Agent to each Lender according to its
Pro Rata Share payable in arrears on the fifth Business Day in each calendar
quarter beginning with the first calendar quarter after the Closing Date and
ending on the date of the expiration, return or termination of such Letter of
Credit if such date is a date other than the first Business Day of a calendar
month and (ii) a non-refundable issuing fee of $500.00 solely for the account of
Issuing Lender, payable in full on the date of issuance thereof.
(e) Payment of Fees. The fees described in this Section 2.04
represent compensation for services rendered and to be rendered separate and
apart from the lending of money or the provision of credit and do not constitute
compensation for the use, detention or forbearance of money, and the obligation
of Borrower to pay the fees described herein shall be in addition to, and not in
lieu of, the obligation of Borrower to pay interest, other fees and expenses
otherwise described in this Agreement. All fees shall be payable when due in
California in
33
immediately available funds and shall be non-refundable when paid. If Borrower
fails to make any payment of fees or expenses specified or referred to in this
Agreement due to Agent or Lenders, including without limitation those referred
to in this Section 2.04 or otherwise under this Agreement or any separate fee
agreement between Borrower and Agent relating to this Agreement, when due, the
amount due shall bear interest until paid at the Base Rate and, after five (5)
days at the rate specified in Section 2.03(d) (but not to exceed the maximum
rate permitted by applicable law) and shall constitute part of the Obligations.
All fees described in this Section 2.04 which are expressed as a per annum
charge shall be calculated on the basis of the actual number of days elapsed in
a three hundred sixty (360) day year.
2.05 Payments.
(a) Voluntary Prepayments. Borrower may, upon not less than three
(3) Business Days prior written notice (or with written notice not later than
1:00 P.M. (California time) on the same Business Day in the case of a Swingline
Loan), at any time and from time to time, prepay any Loans, without premium or
penalty (other than as set forth in Section 2.03(h)(iii)), in whole or in part
in amounts not less than One Hundred Thousand Dollars ($100,000) or integral
multiples of Twenty-Five Thousand Dollars ($25,000) in excess of One Hundred
Thousand Dollars ($100,000). Any notice of prepayment given to Agent under this
Section 2.05(a) shall specify the date of prepayment and the aggregate principal
amount of the prepayment. All prepayments of principal shall be accompanied by a
payment of all accrued and unpaid interest thereon.
(b) Manner and Time of Payment. All payments of principal, interest
and fees hereunder payable to Agent, Swingline Lender, Issuing Lender or the
Lenders shall be made without condition or reservation of right and free of
set-off or counterclaim, in Dollars and by (i) wire transfer (pursuant to
Agent's written wire transfer instructions) of immediately available funds,
delivered to Agent not later than 11:00 A.M. (California time) (or 2:00 P.M.
(California time) in the case of a Swingline Loan) on the date due; and funds
received by Agent after that time and date shall be deemed to have been paid on
the next succeeding Business Day or (ii) by check (pursuant to Agent's written
check payment instructions) delivered to Agent, such check and the payment
intended to be covered thereby to be deemed to have been paid on the date Agent
receives immediately available funds therefor. All payments of principal,
interest and fees hereunder shall be made by (i) wire transfer of immediately
available funds to ▇▇▇▇▇ Fargo Bank, N.A. (ABA number ▇▇▇▇▇▇▇▇▇) for credit to
account number AC2963507207, reference MHC Operating Limited Partnership, loan
number 6023AMC with telephonic notice to ▇▇▇ ▇▇▇▇▇▇▇ at (▇▇▇) ▇▇▇-▇▇▇▇ or (ii)
check payable to ▇▇▇▇▇ Fargo Bank, N.A., and delivered to Agent at ▇▇▇▇ ▇. ▇▇▇▇
▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: ▇▇▇ ▇▇▇▇▇▇▇, or to such
other bank, account or address as Agent may specify in a written notice to
Borrower.
(c) Payments on Non-Business Days. Whenever any payment to be made
by Borrower hereunder shall be stated to be due on a day which is not a Business
Day, payment shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.04, as the case
may be.
2.06 Increased Capital.(a) If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Agent, Swingline Lender,
34
Issuing Lender or any Lender with any guideline or request from any central bank
or other Governmental Authority (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) made or issued
after the Closing Date affects or would affect the amount of capital required or
expected to be maintained by Agent, Swingline Lender, Issuing Lender or such
Lender or any corporation controlling Agent, Swingline Lender, Issuing Lender or
such Lender, and Agent, Swingline Lender, Issuing Lender or such Lender
determines that the amount of such capital is increased by or based upon the
existence of the obligations of Agent, Swingline Lender, Issuing Lender or such
Lender, then, upon demand by Agent, Swingline Lender, Issuing Lender or such
Lender, Borrower shall immediately pay to Agent, Swingline Lender, Issuing
Lender or such Lender, from time to time as specified by Agent, Swingline
Lender, Issuing Lender or such Lender, additional amounts sufficient to
compensate Agent, Swingline Lender, Issuing Lender or such Lender in light of
such circumstances, to the extent that Agent, Swingline Lender, Issuing Lender
or such Lender reasonably determines such increase in capital to be allocable to
the existence of the obligations of Agent, Swingline Lender, Issuing Lender or
such Lender hereunder and to the extent Agent, Swingline Lender, Issuing Lender
or such Lender generally imposes such amounts on other borrowers in similar
circumstances. A certificate as to such amounts submitted to Borrower by Agent,
Swingline Lender, Issuing Lender or such Lender shall, in the absence of
manifest error, be conclusive and binding for all purposes.
2.07 Notice of Increased Costs. Each of Agent, Swingline Lender,
Issuing Lender and the Lenders agrees that, as promptly as reasonably
practicable after it becomes aware of the occurrence of an event or the
existence of a condition which would cause it to be affected by any of the
events or conditions described in Section 2.03(g) or (h), or Section 2.06, it
will notify Borrower and provide in such notice a reasonably detailed
calculation of the amount due from Borrower, and provide a copy of such notice
to Agent, of such event and the possible effects thereof. If Agent, Swingline
Lender, Issuing Lender or the affected Lender shall fail to notify Borrower of
the occurrence of any such event or the existence of any such condition within
ninety (90) days following the end of the month during which such event occurred
or such condition arose, then Borrower's liability for any amounts described in
said Sections 2.03(g) and (h) and 2.06 incurred by Agent, Swingline Lender,
Issuing Lender or such affected Lender as a result of such event or condition
shall be limited to those attributable to the period occurring subsequent to the
ninetieth (90th) day prior to the date upon which Agent, Swingline Lender,
Issuing Lender or such affected Lender actually notified Borrower of such event
or condition.
2.08 Option to Replace Lenders.
(a) Lenders. If any Lender shall make any demand for payment or
reimbursement pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06,
then, provided that (a) there does not then exist any Unmatured Event of Default
or Event of Default and (b) the circumstances resulting in such demand for
payment or reimbursement are not applicable to all Lenders, Borrower may
terminate the Commitment of such Lender, in whole but not in part, by (i) giving
such Lender and Agent not less than three (3) Business Days prior written notice
thereof, which notice shall be irrevocable and effective only upon receipt
thereof by such Lender and Agent and shall specify the effective date of such
termination, (ii) paying to such Lender (and there shall become due and payable)
on such date the outstanding principal amount of all Loans made by such Lender,
all interest thereon, and all other Obligations owed to such Lender, including,
without limitation, amounts owing under Sections 2.03(g), 2.03(h)(iii), 2.04 and
2.06,
35
if any, and (iii) pursuant to the provisions of Section 11.13, proposing the
introduction of a replacement Lender reasonably satisfactory to Agent, or
obtaining the agreement of one or more existing Lenders, to assume the entire
amount of the Commitment of the Lender whose Commitment is being terminated, on
the effective date of such termination. Upon the satisfaction of all of the
foregoing conditions, such Lender which is being terminated pursuant to this
Section 2.08 shall cease to be a "Lender" for purposes of this Agreement
provided that Borrower shall continue to be obligated to such Lender under
Sections 12.01 and 12.02 (and any other indemnifications contained herein or in
any other Loan Document) with respect to or on account of unpaid, unliquidated,
unknown or similar claims or liabilities accruing prior to such Lender ceasing
to be a "Lender" for purposes of this Agreement.
(b) Agent, Swingline Lender and Issuing Lender. If Agent, Swingline
Lender or Issuing Lender shall make any demand for payment or reimbursement
pursuant to Section 2.03(g), Section 2.03(h) or Section 2.06, then, provided
that (a) there does not then exist any Unmatured Event of Default or Event of
Default and (b) the circumstances resulting in such demand for payment or
reimbursement are not applicable to all Lenders, Borrower may remove Agent,
Swingline Lender and Issuing Lender by (i) giving the Lenders and Agent not less
than thirty (30) Business Days prior written notice thereof, and (ii) paying to
Agent, Swingline Lender and Issuing Lender (and there shall become due and
payable) on such date all other Obligations owed to Agent, Swingline Lender and
Issuing Lender, including, without limitation, amounts owing under Sections
2.03(g), 2.03(h), 2.04 and 2.06, if any. Agent, Swingline Lender and Issuing
Lender shall be replaced in accordance with the provisions of Section 11.09
hereof.
2.09 Letters of Credit.
(a) Letter of Credit Availability. Subject to the terms and
conditions set forth in this Agreement, at any time and from time to time
through the date that is thirty (30) days prior to the Maturity Date, Issuing
Lender shall issue such Letters of Credit for the account of Borrower as
Borrower may request in accordance with this Section 2.09; provided that (i)
upon issuance of such Letters of Credit, the sum of the aggregate principal
amount of all outstanding Loans (including Swingline Loans) plus the aggregate
face amount of all outstanding Letters of Credit shall not exceed Loan
Availability, provided, that if a Base Rate Loan is being made pursuant to
Section 2.09(e) hereof to reimburse Issuing Lender for a drawn Letter of Credit,
to avoid a duplicative reduction in the amount of Loan Availability, the drawn
Letter of Credit shall not be considered outstanding; (ii) the aggregate face
amount of all outstanding Letters of Credit shall not exceed Thirty Million
Dollars ($30,000,000); and (iii) unless all Lenders otherwise consent in
writing, the term of any Letter of Credit shall not extend or be extended beyond
the date which is ten (10) days prior to the Maturity Date and no Letter of
Credit shall contain an automatic extension or renewal clause. Use of funds
drawn under Letters of Credit shall be subject to the same conditions as those
for use of Loan proceeds set forth in Section 7.01(i) hereof.
(b) Request for Letter of Credit. Borrower shall deliver to Agent
and Issuing Lender a duly executed letter of credit application substantially in
the form attached as Exhibit H hereto (a "Letter of Credit Application") not
later than 10:00 A.M., (California time), at least five (5) Business Days prior
to the date upon which a requested Letter of Credit is to be issued. Borrower
shall further deliver to Agent and Issuing Lender such additional instruments
and documents as Issuing Lender may reasonably require, in conformity with
customary and
36
commercially reasonable practices or law, in connection with the issuance of
such Letter of Credit.
(c) Issuance of Letters of Credit. Subject to the conditions set
forth in this Agreement, Issuing Lender shall issue the Letter of Credit on or
before 5:00 P.M. (California time), on or before the day which is five (5)
Business Days following receipt of the documents last due pursuant to Section
2.09(b) hereof in respect thereof. Upon issuance of a Letter of Credit, Issuing
Lender shall promptly notify Lenders of the amount and terms thereof. Issuing
Lender shall provide copies of each Letter of Credit to Lenders promptly
following issuance thereof and shall notify Lenders promptly of all payments,
reimbursements, expirations, negotiations, transfers and other activity with
respect to outstanding Letters of Credit.
(d) Participations. Each Lender, upon issuance by Issuing Lender of
a Letter of Credit in accordance with the provisions of this Agreement, shall be
deemed to have purchased without recourse a risk participation from Issuing
Lender in such Letter of Credit and the obligations arising thereunder, in each
case in an amount equal to its Pro Rata Share of the obligations under such
Letter of Credit, and shall absolutely, unconditionally and irrevocably assume,
as primary obligor and not as surety, and be obligated to pay to Issuing Lender
therefor and discharge when due, its Pro Rata Share of the obligations arising
under such Letter of Credit.
(e) Reimbursement. In the event of any drawing or request for
drawing under any Letter of Credit, Issuing Lender will promptly notify Borrower
and Agent thereof. Unless Borrower shall notify Issuing Lender of its intent to
otherwise reimburse Issuing Lender immediately upon receipt of notice from
Issuing Lender of a drawing under a Letter of Credit, Borrower shall be deemed
to have requested Base Rate Loans in the amount of the drawing as provided in
subsection (f) hereof, the proceeds of which will be used to satisfy the
reimbursement obligations. Borrower shall reimburse Issuing Lender on the day of
drawing under any Letter of Credit (either with the proceeds of a Loan obtained
hereunder or otherwise) in same day funds as provided herein. If Borrower shall
fail to reimburse Issuing Lender as provided hereinabove, the unreimbursed
amount of such drawing shall bear interest at a per annum rate equal to the Base
Rate plus two percent (2%). Borrower's reimbursement obligations hereunder shall
be absolute and unconditional under all circumstances irrespective of any rights
of set-off, counterclaim or defense to payment Borrower may claim or have
against Issuing Lender, Agent, the Lenders, the beneficiary of the Letter of
Credit drawn upon or any other Person, including, without limitation, any
defense based on any failure of Borrower to receive consideration or the
legality, validity, regularity or unenforceability of the Letter of Credit;
provided, however, that (i) the Borrower shall not be obligated to reimburse
Issuing Lender and (ii) Lenders shall not be obligated to fund Loans or purchase
participations hereunder in reimbursement of Issuing Lender, for any wrongful
payment made by Issuing Lender under a Letter of Credit as a result of acts or
omissions constituting bad faith, willful misconduct or gross negligence on the
part of Issuing Lender. The Letter of Credit Obligations will be evidenced by
the Letter of Credit Note.
(f) Repayment with Loans. On any day on which Borrower shall have
requested, or been deemed to have requested, Base Rate Loans to reimburse a
drawing under a Letter of Credit, Agent shall give notice to the Lenders that
such Loans have been requested or deemed requested in connection with a drawing
under a Letter of Credit, in which case such Loans (collectively, a "Letter of
Credit Mandatory Borrowing") shall be immediately made by
37
all Lenders (without giving effect to any termination of the Commitments
pursuant to Section 10.02 hereof) pro rata based on each Lender's Pro Rata Share
and the proceeds thereof shall be paid directly to Issuing Lender for
application to the respective Letter of Credit Obligations. Each Lender hereby
irrevocably agrees to make such Loans promptly upon any such request or deemed
request in the amount and in the manner specified in the preceding sentence and
on the same such date (or the next Business Day if such notice is received after
10:00 A.M. (California time)) notwithstanding (i) the amount of the Letter of
Credit Mandatory Borrowing may not comply with the minimum amount for Borrowings
otherwise required hereunder, (ii) whether any conditions specified in Section
4.02 are then satisfied, (iii) whether an Event of Default or Unmatured Event of
Default then exists, (iv) failure of any such request or deemed request for a
Borrowing to be made by the time otherwise required in Section 2.01 hereof, (v)
the date of such Letter of Credit Mandatory Borrowing (provided that such date
must be a Business Day), or (vi) any termination of the Commitments immediately
prior to such Letter of Credit Mandatory Borrowing or contemporaneously
therewith. In the event that any Letter of Credit Mandatory Borrowing cannot for
any reason occur in respect of a Letter of Credit on the date otherwise required
above (including, without limitation, as a result of the commencement of a
proceeding under the Bankruptcy Code with respect to Borrower), then each Lender
hereby agrees that it shall forthwith fund (as of the date the Letter of Credit
Mandatory Borrowing would otherwise have occurred, but adjusted for any payments
received from Borrower on or after such date and prior to such funding) its
participation interest in the outstanding obligations arising in connection with
such Letter of Credit, provided that (A) all interest payable on Borrower's
reimbursement obligation with respect to such Letter of Credit shall be for the
account of Issuing Lender until but excluding the day upon which the Letter of
Credit Mandatory Borrowing would otherwise have occurred, and (B) in the event
of a delay between the day upon which the Letter of Credit Mandatory Borrowing
would otherwise have occurred and the time any funding of a participation
pursuant to this sentence is actually made, the funding Lender shall be required
to pay to the Issuing Lender interest on the principal amount of such
participation for each day from and including the day upon which the Letter of
Credit Mandatory Borrowing would otherwise have occurred to but excluding the
date of funding of such participation, at the rate equal to the Federal Funds
Rate, for the two (2) Business Days after the date the Letter of Credit
Mandatory Borrowing would otherwise have occurred, and thereafter at a rate
equal to the Base Rate.
(g) Modification, Extension. The issuance of any supplement,
modification, amendment, renewal, or extension to any Letter of Credit shall,
for purposes hereof, be treated in all respects the same as if it were the
issuance of a new Letter of Credit hereunder.
(h) Uniform Customs and Practices. Issuing Lender may have the
Letters of Credit be subject to The Uniform Customs and Practice for Documentary
Credits, as published as of the date of issue by the International Chamber of
Commerce (the "UCP"), in which case the UCP may be incorporated therein and
deemed in all respects to be a part thereof.
(i) Collateralization at Termination Date. Upon the occurrence of
the Termination Date prior to the expiration of all Letters of Credit, Borrower
shall provide to Issuing Lender a standby letter of credit issued by a bank with
a rating of its senior unsecured debt obligations of not less than A by ▇▇▇▇▇'▇,
in form and substance satisfactory to Issuing Lender, in favor of Issuing Lender
in a face amount equal to the outstanding Letters of Credit on that date, or
shall make other provisions satisfactory to Issuing Lender and Agent for the
full collateralization, by cash or cash equivalent, of such outstanding Letters
of Credit. In the event
38
of failure of Borrower to comply with the requirement of this Section 2.09(i),
such portion of the face amount of all outstanding Letters of Credit as to which
Borrower has failed to comply shall be deemed to be immediately due and payable.
(j) Limitation of Liability. Borrower assumes all risks of the acts
or omissions of any beneficiary or transferee of any Letter of Credit with
respect to its use of such Letter of Credit absent the bad faith, gross
negligence or willful misconduct of Issuing Lender. Neither Issuing Lender,
Agent, any Lender nor any of their respective officers, directors, employees or
agents shall be liable or responsible for, nor shall Borrower's obligations
hereunder in respect of such Letters of Credit be impaired as a result of any of
the following absent the bad faith, gross negligence or willful misconduct of
Issuing Lender:
(i) any lack of validity or enforceability of any Letter of Credit
or any other agreement or instrument relating thereto (such Letter of
Credit and any other agreement or instrument relating thereto being,
collectively, the "Letter of Credit Documents");
(ii) the use that may be made of any Letter of Credit or any acts or
omissions of any beneficiary or transferee in connection therewith;
(iii) any statement or any other document presented under a Letter
of Credit proving to be forged, fraudulent, invalid or insufficient in any
respect or any statement therein being untrue or inaccurate in any
respect;
(iv) the existence of any claim, setoff, defense or other right that
Borrower may have at any time against any beneficiary or any transferee of
a Letter of Credit (or any Persons for whom any such beneficiary or any
such transferee may be acting), Issuing Lender or any other Person,
whether in connection with the transactions contemplated by the Letter of
Credit Documents or any unrelated transaction;
(v) failure of any documents to bear any reference or adequate
reference to the Letter of Credit; or
(vi) any other circumstances whatsoever in making or failing to make
payment under any Letter of Credit.
In furtherance and not in limitation of the foregoing, Issuing Lender may accept
documents that appear on their face to be in order, without responsibility for
further investigation, regardless of any notice or information to the contrary,
absent the bad faith, gross negligence or willful misconduct of Issuing Lender.
(k) Lenders. Any action taken or omitted to be taken by Issuing
Lender under or in connection with any Letter of Credit, if taken or omitted in
the absence of bad faith, gross negligence or willful misconduct, shall not put
Issuing Lender under any resulting liability to any Lender or relieve that
Lender of its obligations hereunder to Issuing Lender. In determining whether to
pay under any Letter of Credit, Issuing Lender shall have no obligations to
Lenders other than to confirm that any documents required to be delivered under
such Letter of Credit appear to have been delivered and that they appear to
comply on their face with the requirements of such Letter of Credit.
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(l) Indemnification. Borrower shall indemnify and hold harmless
Issuing Lender, Agent and Lenders from and against any and all claims, damages,
losses, liabilities, reasonable costs and expenses of any kind whatsoever,
including reasonable fees and expenses of attorneys that such indemnified Person
may incur, together with all reasonable costs and expenses resulting from the
compromise or defense of any claims or liabilities hereinafter described, by
reason of or in connection with (i) the execution and delivery or transfer of,
or payment or failure to pay under, any Letter of Credit, (ii) any suit, action
or proceeding brought by any Person to require or present payment under any
Letter of Credit, or (iii) any breach by Borrower of any warranty, covenant,
term or condition in, or the occurrence of any default under, any Letter of
Credit or any related contract; provided, however, that Borrower shall not be
required to indemnify Issuing Lender, Agent or any Lender for any claims,
damages, losses, liabilities, costs or expenses to the extent, but only to the
extent, caused by the willful misconduct, gross negligence, bad faith or fraud
of such indemnified Person; and provided, further, that Issuing Lender will be
liable to Borrower for any damages suffered by Borrower as a result of Issuing
Lender's grossly negligent or willful failure to pay under any Letter of Credit
after the presentment to it of documentation in strict compliance with the terms
and conditions of the Letter of Credit and absent any challenge by any Person
(other than Issuing Lender or any of its affiliates) to the making of such
payment.
2.10 Swingline Loans
(a) Swingline Availability. Subject to the terms and conditions set
forth in this Agreement, Swingline Lender agrees to make certain revolving loans
to Borrower (each a "Swingline Loan" and, collectively, the "Swingline Loans")
from time to time during the period from the Closing Date to the fifth day
preceding the Maturity Date; provided, however, that the aggregate amount of
Swingline Loans outstanding at any time shall not exceed the lesser of (i)
THIRTY MILLION DOLLARS ($30,000,000), and (ii) the excess of Loan Availability
over the sum of the aggregate principal amount of all outstanding Loans
(excluding Swingline Loans) plus the aggregate face amount of all outstanding
Letters of Credit, provided, that if a Base Rate Loan is being made pursuant to
Section 2.09(e) hereof to reimburse Issuing Lender for a drawn Letter of Credit,
to avoid a duplicative reduction in the amount of Loan availability, the drawn
Letter of Credit shall not be considered outstanding. Subject to the limitations
set forth herein, any amounts repaid in respect of Swingline Loans may be
reborrowed.
(b) Swingline Borrowings.
(i) Notice of Borrowing. Whenever Borrower desires to borrow under
this Section 2.10, Borrower shall give Swingline Lender and Agent at ▇▇▇▇▇
Fargo Real Estate Group Disbursement Center, ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇
▇▇▇, ▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, with a copy to ▇▇▇▇▇ Fargo Bank, N.A.,
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, Attn: Account
Officer, or such other address as Agent shall designate, an original or
facsimile Notice of Borrowing no later than 11:00 A.M. (California time)
on the proposed date of such borrowing (and confirmed by telephone by such
time), specifying (A) that a Swingline Loan is being requested, (B) the
amount of such Swingline Loan, (C) the proposed date of such Swingline
Loan, which shall be a Business Day, and (D) stating that no Event of
Default or Unmatured Event of Default has occurred and is continuing both
before and after giving effect to such Swingline Loan. Such notice shall
be irrevocable.
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(ii) Minimum Amounts; Frequency of Swingline Loans. Each Swingline
Loan shall be in a minimum principal amount of $1,000,000, or an integral
multiple of $100,000 in excess thereof. Swingline Loans shall be available
no more frequently than six (6) times in any month.
(iii) Making of Swingline Loans. Swingline Lender shall make the
proceeds of each Swingline Loan available to Borrower in El Segundo,
California on the applicable Funding Date in Dollars and in immediately
available funds not later than 1:00 P.M. (California time) on such Funding
Date to Borrower's account, at Bank of America, Account Number 75-01943 in
Chicago, Illinois or such other account specified in the Notice of
Borrowing and acceptable to Agent.
(iv) Repayment of Swingline Loans. Each Swingline Loan shall be due
and payable on the earliest of (A) five (5) days from the date of the
applicable Funding Date for such Swingline Loan, (B) the date of the next
Borrowing under Section 2.01 hereof (other than a Letter of Credit
Mandatory Borrowing) or (C) the Termination Date. If, and to the extent,
any Swingline Loans shall be outstanding on the date of any Borrowing
under Section 2.01 hereof (other than a Letter of Credit Mandatory
Borrowing), such Swingline Loans shall first be repaid from the proceeds
of such Borrowing prior to the disbursement of the same to Borrower. If,
and to the extent, a Borrowing under Section 2.01 hereof (other than a
Letter of Credit Mandatory Borrowing) is not requested prior to the
Termination Date or the end of the five (5) day period after a Swingline
Loan is made, Borrower shall be deemed to have requested Base Rate Loans
in the amount of the applicable Swingline Loan then outstanding, the
proceeds of which shall be used to repay such Swingline Loan to the
Swingline Lender. In addition, the Swingline Lender may, at any time, in
its sole discretion, by written notice to Borrower and Agent, demand
repayment of its Swingline Loans by way of Base Rate Loans, in which case
Borrower shall be deemed to have requested Base Rate Loans in the amount
of such Swingline Loans then outstanding, the proceeds of which shall be
used to repay such Swingline Loans to the Swingline Lender. Any Borrowing
which is deemed requested by Borrower in accordance with this Section
2.10(b)(iv) is hereinafter referred to as a "Swingline Mandatory
Borrowing". Each Lender hereby irrevocably agrees to make Base Rate Loans
in accordance with its Pro Rata Share promptly upon receipt of notice from
the Swingline Lender of any such deemed request for a Swingline Mandatory
Borrowing in the amount and in the manner specified in the preceding
sentences and on the date such notice is received by such Lender (or the
next Business Day if such notice is received after 10:00 A.M. (California
time)) notwithstanding (I) the amount of the Swingline Mandatory Borrowing
may not comply with the minimum amount for Borrowings otherwise required
hereunder, (II) whether any conditions specified in Section 4.02 hereof
are then satisfied, (III) whether an Event of Default or Unmatured Event
of Default then exists, (IV) failure of any such deemed request for a
Borrowing to be made by the time otherwise required in Section 2.01
hereof, (V) the date of such Swingline Mandatory Borrowing (provided that
such date must be a Business Day), or (VI) any termination of the
Commitments immediately prior to such Swingline Mandatory Borrowing or
contemporaneously therewith; provided, however, that no Lender shall be
obligated to make any Loans under this Section 2.10(b)(iv) if an Event of
Default or Unmatured Event of Default then exists and the applicable
Swingline Loan was made by the Swingline Lender without receipt of a
written Notice of Borrowing in the form
41
specified in subclause (i) above or after Agent had delivered a notice of
an Event of Default or Unmatured Event of Default which had not been
rescinded.
(v) Purchase of Participations. In the event that any Swingline
Mandatory Borrowing cannot for any reason occur on the date otherwise
required above (including, without limitation, as a result of the
commencement of a proceeding under the Bankruptcy Code with respect to
Borrower), then each Lender hereby agrees that it shall forthwith purchase
(as of the date the Swingline Mandatory Borrowing would otherwise have
occurred, but adjusted for any payment received from Borrower on or after
such date and prior to such purchase) from the Swingline Lender such
participations in the outstanding Swingline Loans as shall be necessary to
cause each such Lender to share in such Swingline Loans ratably based upon
its Pro Rata Share, provided that (A) all interest payable on the
Swingline Loans with respect to any participation shall be for the account
of the Swingline Lender until but excluding the day upon which the
Swingline Mandatory Borrowing would otherwise have occurred, and (B) in
the event of a delay between the day upon which the Swingline Mandatory
Borrowing would otherwise have occurred and the time any purchase of a
participation pursuant to this sentence is actually made, the purchasing
Lender shall be required to pay to the Swingline Lender interest on the
principal amount of such participation for each day from and including the
day upon which the Swingline Mandatory Borrowing would otherwise have
occurred to but excluding the date of payment for such participation, at
the rate equal to the Federal Funds Rate, for the two (2) Business Days
after the date the Swingline Mandatory Borrowing would otherwise have
occurred, and thereafter at a rate equal to the Base Rate. Notwithstanding
the foregoing, no Bank shall be obligated to purchase a participation in
any Swingline Loan if an Event of Default or Unmatured Event of Default
then exists and such Swingline Loan was made by the Swingline Lender
without receipt of a written Notice of Borrowing in the form specified in
subclause (i) above or after Agent had delivered a notice of an Event of
Default or Unmatured Event of Default which had not been rescinded.
(c) Interest Rate. Each Swingline Loan shall bear interest at a rate
per annum equal to the Base Rate minus 1.5% per annum.
2.11 Funds Transfer Disbursements.
(a) Borrower hereby authorizes Agent and Lenders to disburse the
proceeds of the Loan pursuant to the Loan Documents as requested by an
authorized representative of the Borrower to any of the accounts designated in
Exhibit C. Borrower agrees to be bound by any transfer request: (i) authorized
or transmitted by Borrower; or, (ii) made in Borrower's name and accepted by
Agent in good faith and in compliance with these transfer instructions, even if
not properly authorized by Borrower. Borrower further agrees and acknowledges
that Agent and Lenders may rely solely on any bank routing number or identifying
bank account number or name provided by Borrower to effect a wire or funds
transfer even if the information provided by Borrower identifies a different
bank or account holder than named by the Borrower. Neither Agent nor Lenders are
obligated or required in any way to take any actions to detect errors in
information provided by Borrower. If Agent or any Lender takes any actions in an
attempt to detect errors in the transmission or content of transfer or requests
or takes any actions in an attempt to detect unauthorized funds transfer
requests, Borrower agrees that no matter how many
42
times Agent and any Lender takes these actions neither Agent nor Lenders will in
any situation be liable for failing to take or correctly perform these actions
in the future and such actions shall not become any part of the transfer
disbursement procedures authorized under this provision, the Loan Documents, or
any agreement between Lenders and Borrower. Borrower agrees to notify Agent of
any errors in the transfer of any funds or of any unauthorized or improperly
authorized transfer requests within 14 days after Agent's or any Lender's
confirmation to Borrower of such transfer.
(b) Agent will, in its sole discretion, determine the funds transfer
system and the means by which each transfer will be made. Agent may delay or
refuse to accept a funds transfer request if the transfer would: (i) violate the
terms of this authorization (ii) require use of a bank unacceptable to Agent or
prohibited by government authority; (iii) cause Agent or any Lender to violate
any Federal Reserve or other regulatory risk control program or guideline, or
(iii) otherwise cause Agent or any Lender to violate any applicable law or
regulation.
(c) Neither Agent nor any Lender shall be liable to Borrower or any
other parties for (i) errors, acts or failures to act of others, including other
entities, banks, communications carriers or clearinghouses, through which
Borrower's transfers may be made or information received or transmitted, and no
such entity shall be deemed an agent of Agent or any Lender, (ii) any loss,
liability or delay caused by fires, earthquakes, wars, civil disturbances, power
surges or failures, acts of government, labor disputes, failures in
communications networks, legal constraints or other events beyond Agent's or any
Lender's control, or (iii) any special, consequential, indirect or punitive
damages, whether or not (a) any claim for these damages is based on tort or
contract or (b) Agent, Lender or Borrower knew or should have known the
likelihood of these damages in any situation. Agent and Lenders make no
representations or warranties other than those expressly made in this Agreement.
ARTICLE III.
EXTENSION OPTION
3.01 Extension Option. At the written request of Borrower made to
Agent at least thirty (30) days prior to the Initial Maturity Date, the Maturity
Date shall be extended to the one-year anniversary of the Initial Maturity Date
(the "Extended Maturity Date") provided that the following conditions are
satisfied:
(a) no Event of Default or Unmatured Event of Default shall have
occurred and be continuing as of the Initial Maturity Date;
(b) all representations and warranties made by Borrower, the REIT,
MHC Trust and T1000 Trust contained in this Agreement and the other Loan
Documents shall be true and correct in all material respects as of the Initial
Maturity Date except to the extent they related to a specific date;
(c) Agent shall have received Officer's Certificates of the REIT
dated as of the Initial Maturity Date stating that the executive officer who is
the signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
43
reasonable detail of the transactions and condition of Borrower, the REIT, MHC
Trust, the Subsidiaries, and the Agreement Parties, and that (A) such review has
not disclosed the existence as of the date of such Officer's Certificate, and
that the signer does not have knowledge of the existence as of the date of such
Officer's Certificate, of any condition or event which constitutes an Event of
Default or Unmatured Event of Default and (B) all representations and warranties
made by such entities contained in this Agreement and the other Loan Documents
are true and correct in all material respects as of the date of such Officer's
Certificate except to the extent they relate to a specific date; and
(d) on or before the Initial Maturity Date, Agent shall have
received, on behalf of Agent and Lenders, an extension fee in the amount of
one-fourth of one percent (0.25%) of the amount of the Facility.
ARTICLE IV.
CONDITIONS TO LOANS
4.01 Intentionally Omitted.
4.02 Conditions Precedent to All Loans and Issuance of Letters of
Credit. The obligation of each Swingline Lender to make any Swingline Loan
requested to be made by it, the obligation of Lender to make any Loan requested
to be made by it, and the obligation of Issuing Lender to issue any Letter of
Credit requested to be issued by it, on any date, is subject to satisfaction of
the following conditions precedent as of such date:
(a) Documents. With respect to a request for a Loan, Agent shall
have received in accordance with the provisions of Section 2.01(b) hereof or
Section 2.10 hereof (as applicable), an original and duly executed Notice of
Borrowing. With respect to a request for a Letter of Credit, Agent and Issuing
Bank shall have received in accordance with the provisions of Section 2.09(b)
hereof, an original and duly executed Letter of Credit Application together with
such other documents as shall be required under Section 2.09(b) hereof.
(b) Additional Matters. As of the Funding Date for any Loan or the
issuance date of any Letter of Credit and after giving effect to the Loans
and/or Letters of Credit being requested:
(i) Representations and Warranties. All of the representations and
warranties of Borrower, the REIT, MHC Trust and T1000 Trust in this
Agreement and in any other Loan Document (other than representations and
warranties which expressly speak only as of a different date) shall be
true and correct in all material respects on and as of such Funding Date
or issuance date, as though made on and as of such date;
(ii) No Default. No Event of Default or Unmatured Event of Default
shall have occurred and be continuing or would result from the making of
the requested Loan or issuance for the requested Letter of Credit and all
of the financial covenants contained in Articles VIII and IX shall be
satisfied; and
(iii) No Material Adverse Change. No change shall have occurred
which shall have a Material Adverse Effect.
44
Each submission by Borrower to Agent of a Notice of Borrowing with respect to a
Loan or a request for a Letter of Credit and the acceptance by Borrower of the
proceeds of each such Loan made hereunder or the issuance of such Letter of
Credit hereunder shall constitute a representation and warranty by Borrower as
of the Funding Date in respect of such Loan or the date such Letter of Credit is
issued that all the conditions contained in this Section 4.02 have been
satisfied.
ARTICLE V.
REPRESENTATIONS AND WARRANTIES
5.01 Representations and Warranties as to Borrower. Borrower hereby
represents and warrants to Agent, Swingline Lender, Issuing Lender and Lenders
as follows:
(a) Organization; Partnership Powers. Borrower (i) is a limited
partnership duly organized, validly existing and in good standing under the laws
of the jurisdiction of its formation, (ii) is duly qualified to do business as a
foreign limited partnership and in good standing under the laws of each
jurisdiction in which the nature of its business requires it to be so qualified,
except for those jurisdictions where failure to so qualify and be in good
standing would not have a Material Adverse Effect and (iii) has all requisite
partnership power and authority to own, operate and encumber its property and
assets and to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the transactions
contemplated by the Loan Documents.
(b) Authority. Borrower has the requisite partnership power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the general partner of Borrower, and no other partnership proceedings or
authorizations on the part of Borrower or its general or limited partners are
necessary to consummate such transactions. Each of the Loan Documents to which
Borrower is a party has been duly executed and delivered by Borrower and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency and other laws
affecting creditors' rights generally and general equitable principles.
(c) Ownership of Borrower. Schedule 5.01(c) sets forth the general
partners of Borrower and their respective ownership percentages as of the date
hereof. Except as set forth in the partnership agreement of Borrower, no
partnership interests (or any securities, instruments, warrants, option or
purchase rights, conversion or exchange rights, calls, commitments or claims of
any character convertible into or exercisable for partnership interests) of
Borrower are subject to issuance under any security, instrument, warrant, option
or purchase rights, conversion or exchange rights, call, commitment or claim of
any right, title or interest therein or thereto. To Borrower's knowledge, all of
the partnership interests in Borrower have been issued in compliance with all
applicable Requirements of Law.
(d) No Conflict. The execution, delivery and performance by Borrower
of the Loan Documents to which it is or will be a party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate Borrower's limited partnership agreement or Certificate of Limited
Partnership or other organizational documents, as the case may be, or
45
the organizational documents of any Subsidiary of Borrower or (ii) conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law, Contractual Obligation or
Court Order of or binding upon Borrower or any of its Subsidiaries, or require
termination of any such Contractual Obligation, the consequences of which
conflict or breach or default or termination would have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any Property (except as contemplated herein).
(e) Consents and Authorizations. Borrower has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow
Borrower to lawfully execute, deliver and perform its obligations under the Loan
Documents to which Borrower is a party.
(f) Governmental Regulation. Borrower is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(g) Prior Financials. The Consolidated and Combined Balance Sheet as
of June 30, 2004, the Consolidated and Combined Statement of Operations for the
Quarter Ended June 30, 2004, and the Consolidated and Combined Statement of Cash
Flows for the Quarter Ended June 30, 2004 of the REIT contained in the Form 10-Q
Quarterly Report of the REIT as of June 30, 2004 (the "Pre-Closing Financials")
delivered to Agent prior to the date hereof were prepared in accordance with
GAAP in effect on the date such Pre-Closing Financials were prepared and fairly
present the assets, liabilities and financial condition of the REIT, on a
consolidated basis, at such date and the results of its operations and its cash
flows, on a consolidated basis, for the period then ended.
(h) Financial Statements; Projections and Forecasts. Each of the
Financial Statements to be delivered to Agent pursuant to Sections 6.01(a) and
(b), (i) has been, or will be, as applicable, prepared in accordance with the
books and records of the REIT, on a consolidated basis, and (ii) either fairly
present, or will fairly present, as applicable, the financial condition of the
REIT, on a consolidated basis, at the dates thereof (and, if applicable, subject
to normal year-end adjustments) and the results of its operations and cash
flows, on a consolidated basis, for the period then ended. Each of the
projections delivered to Agent (A) has been, or will be, as applicable, prepared
by the REIT and the REIT's financial personnel in light of the past business and
performance of the REIT, on a consolidated basis and (B) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of such
personnel.
(i) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental investigation
or arbitration, at law or in equity, or before or by any Governmental
Authority, pending, or to the best of Borrower's knowledge, threatened
against Borrower or any of its Subsidiaries or any of their respective
Properties, in which there is a reasonable
46
possibility of an adverse decision that could have a Material Adverse
Effect; and
(ii) Neither Borrower nor any of its Subsidiaries is (A) in
violation of any Requirement of Law, which violation has a Material
Adverse Effect, or (B) subject to or in default with respect to any Court
Order which has a Material Adverse Effect.
(j) No Material Adverse Change. Since June 30, 2004, there has
occurred no event which has a Material Adverse Effect.
(k) Payment of Taxes. All material tax returns and material reports
to be filed by Borrower or any of its Subsidiaries have been timely filed, and
all taxes, assessments, fees and other governmental charges shown on such
returns have been paid when due and payable, except such taxes, if any, as are
reserved against in accordance with GAAP, such taxes as are being contested in
good faith by appropriate proceedings or such taxes, the failure to make payment
of which when due and payable will not have, in the aggregate, a Material
Adverse Effect. Borrower has no knowledge of any proposed tax assessment against
Borrower or any of its Subsidiaries that will have a Material Adverse Effect,
which is not being actively contested in good faith by such Person.
(l) Material Adverse Agreements. Neither Borrower nor any of its
Subsidiaries is a party to or subject to any Contractual Obligation or other
restriction contained in its partnership agreement, certificate of partnership,
by-laws, or similar governing documents which has a Material Adverse Effect.
(m) Performance. Neither Borrower nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute a default under such Contractual Obligation in
each case, except where the consequences, direct or indirect, of such default or
defaults, if any, will not have a Material Adverse Effect.
(n) Federal Reserve Regulations. No part of the proceeds of the Loan
hereunder will be used to purchase or carry any "margin security" as defined in
Regulation U or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of said Regulation U. Borrower is not engaged primarily in the
business of extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U. Borrower is not engaged primarily in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" as defined in Regulation U. No part of the proceeds of the Loans
will be used for any purpose that violates, or which is inconsistent with, the
provisions of Regulation X or any other regulation of the Federal Reserve Board.
(o) Disclosure. Borrower has not intentionally or knowingly withheld
any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of
Borrower's future performance such representations and warranties are made in
good faith and to the best judgment of Borrower at the time such projections
were made.
47
(p) Requirements of Law. To Borrower's knowledge, Borrower and each
of its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective businesses, in each case, where
the failure to so comply will have a Material Adverse Effect.
(q) Patents, Trademarks, Permits, Etc. Borrower and each of its
Subsidiaries owns, is licensed or otherwise has the lawful right to use, or has
all permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of Borrower's or such Subsidiary's business as currently conducted, the
absence of which would have a Material Adverse Effect. To Borrower's knowledge,
the use of such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes by Borrower or such
Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.
(r) Environmental Matters. To the knowledge of Borrower, except as
would not have a Material Adverse Effect and except as set forth on Schedule
5.01(r), (i) the Property and operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of Borrower or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to Borrower's knowledge has
there ever been, on or in the Property of Borrower or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither Borrower nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(s) ERISA. None of the REIT, Borrower or any Agreement Party is an
"employee pension benefit plan" as defined in Section 3(2) of ERISA, an
"employee welfare benefit plan" as defined in Section 3(1) of ERISA, a
"multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of ERISA or a
"plan" as defined in Section 4975(e)(1) of the Internal Revenue Code. Except for
a prohibited transaction arising solely because of a Lender's breach of the
covenant set forth in Section 11.23, none of the Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith constitutes a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and the taxes and penalties imposed by Section 4975 of the Internal Revenue Code
and Section 502(i) of ERISA) or otherwise results in a Lender, the Agent or the
Lenders being deemed in violation of Sections 404 or 406 of ERISA or Section
4975 of the Internal Revenue Code or will by itself result in a Lender, Agent or
the Lenders being a fiduciary or party in interest under ERISA or a
"disqualified person" as defined in Section
48
4975(e)(2) of the Internal Revenue Code with respect to an "employee benefit
plan" within the meaning of Section 3(3) of ERISA or a "plan" within the meaning
of Section 4975(e)(1) of the Internal Revenue Code. No assets of the REIT,
Borrower or any Agreement Party constitute "assets" (within the meaning of 29
C.F.R. Section 2510.3-101 or any successor regulation thereto) of an "employee
benefit plan" within the meaning of Section 3(3) of ERISA or a "plan" within the
meaning of Section 4975(e)(1) of the Internal Revenue Code.
Each Borrower Plan is in compliance with ERISA and the applicable
provisions of the Internal Revenue Code in all respects except where the failure
to comply would not have a Material Adverse Effect. There are no claims (other
than claims for benefits in the normal course), actions or lawsuits asserted or
instituted against, and none of Borrower, the REIT, any of the Subsidiaries or
any of their ERISA Affiliates has knowledge of any threatened litigation or
claims against the assets of any Borrower Plan or against any fiduciary of such
Borrower Plan with respect to the operation of such Borrower Plan which could
have a Material Adverse Effect. No liability to the PBGC has been, or is likely
to be, incurred by Borrower, the REIT, any of the Subsidiaries or their ERISA
Affiliates other than such liabilities which, in the aggregate, would not have a
Material Adverse Effect. None of Borrower, the REIT, any of the Subsidiaries or
any of their ERISA Affiliates is now contributing to or has ever contributed to
or been obligated to contribute to any Multiemployer Plan, no employees or
former employees of Borrower, the REIT, any of the Subsidiaries or any of their
ERISA Affiliates have been covered by any Multiemployer Plan in respect of their
employment by Borrower or such Subsidiary or such ERISA Affiliate. None of
Borrower, the REIT, any of the Subsidiaries or any of their ERISA Affiliates has
engaged in a "prohibited transaction," as such term is defined in Section 4975
of the Internal Revenue Code or in a transaction subject to the prohibitions of
Section 406 of ERISA, in connection with any Benefit Plan or Welfare Plan which
would subject Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates (after giving effect to any exemption) to the tax or penalty on
prohibited transactions imposed by Section 4975 of the Internal Revenue Code,
Section 502 of ERISA or any other liability under ERISA which tax, penalty or
other liability would have a Material Adverse Effect. None of the Benefit Plans
subject to Title IV of ERISA has any material Unfunded Pension Liability as to
which Borrower, the REIT, any of the Subsidiaries or any of their ERISA
Affiliates is or may be liable, which liability would have a Material Adverse
Effect.
(t) Solvency. Borrower is and will be Solvent after giving effect to
the disbursements of the Loans and the payment and accrual of all fees then
payable hereunder.
(u) Title to Assets; No Liens. Borrower has good, indefeasible and
merchantable title to the Property owned or leased by it, and all such Property
is free and clear of all Liens, except Permitted Liens and Liens permitted by
Section 8.01(b).
(v) Use of Proceeds. Borrower's use of the proceeds of the Loans
are, and will continue to be, legal and proper uses (and to the extent
necessary, duly authorized by Borrower's partners) and such uses are consistent
with all applicable laws and statutes and Section 7.01(i).
(w) Subsidiaries and Investment Affiliates. Each Subsidiary and
Investment Affiliate as of the date hereof is set forth on Schedule 5.01(w).
Schedule 5.01(w) sets forth the ownership of each such Subsidiary and Investment
Affiliate.
49
(x) Tax Shelter Representation. Neither Borrower, MHC Trust, the
REIT nor any Affiliate of any of the foregoing intends to treat the Loans or the
transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If Borrower, or any other party to the Loans determines to
take any action inconsistent with such intention, Borrower will promptly notify
Lenders thereof. If Borrower so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lenders will maintain the lists and other
records, including the identity of the applicable party to the Loans as required
by such Treasury Regulation.
5.02 Representations and Warranties as to the REIT. The REIT hereby
represents and warrants to Agent, Swingline Lender, Issuing Lender and Lenders
as follows:
(a) Organization; Corporate Powers. The REIT (i) is a corporation
duly organized, validly existing and in good standing under the laws of the
State of Maryland, (ii) is duly qualified to do business as a foreign
corporation and in good standing under the laws of each jurisdiction in which
the nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite corporate power and
authority to own, operate and encumber its property and assets and to conduct
its business as presently conducted and as proposed to be conducted in
connection with and following the consummation of the transactions contemplated
by the Loan Documents.
(b) Authority. The REIT has the requisite corporate power and
authority to execute, deliver and perform each of the Loan Documents to which it
is or will be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by the Board of Directors of the REIT, and no other corporate proceedings on the
part of the REIT are necessary to consummate such transactions. Each of the Loan
Documents to which the REIT is a party has been duly executed and delivered by
the REIT and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally and general equitable
principles.
(c) No Conflict. The execution, delivery and performance by the REIT
of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Articles or Certificate of Incorporation or by-laws, or other organizational
documents, as the case may be, or the organizational documents of Borrower or
any Subsidiary, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of Law,
Contractual Obligation or Court Order of the REIT, Borrower or any Subsidiary,
or require termination of any such Contractual Obligation, the consequences of
which conflict or breach or default or termination will have a Material Adverse
Effect, or result in or require the creation or imposition of any Lien
whatsoever upon any of its Property, or (iii) require any approval of the
stockholders of the REIT.
(d) Consents and Authorizations. The REIT has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and
50
authorizations of, and effected all notices to and filings with, any
Governmental Authority necessary to allow the REIT to lawfully execute, deliver
and perform its obligations under the Loan Documents to which the REIT is a
party.
(e) Governmental Regulation. The REIT is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Capitalization. To the REIT's knowledge, all of the capital
stock of the REIT has been issued in compliance with all applicable Requirements
of Law.
(g) Litigation; Adverse Effects.
(i) There is no action, suit, proceeding, governmental investigation
or arbitration, at law or in equity, or before or by any Governmental
Authority, pending, or to best of the REIT's knowledge, threatened against
the REIT, any of its Subsidiaries or any of their respective Properties in
which there is a reasonable possibility of an adverse decision that could
have a Material Adverse Effect; and
(ii) Neither the REIT nor any of its Subsidiaries is (A) in
violation of any applicable Requirement of Law, which violation has a
Material Adverse Effect, or (B) subject to or in default with respect to
any Court Order which has a Material Adverse Effect.
(h) Payment of Taxes. All tax returns and reports to be filed by the
REIT or any of its Subsidiaries have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns have been
paid when due and payable, except such taxes, if any, as are reserved against in
accordance with GAAP, such taxes as are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect. The
REIT has no knowledge of any proposed tax assessment against the REIT or any of
its Subsidiaries that would have a Material Adverse Effect, which is not being
actively contested in good faith by the REIT or such Subsidiary.
(i) Material Adverse Agreements. The REIT is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(j) Performance. Neither the REIT nor any of its Subsidiaries is in
default in the performance, observance or fulfillment of any of the obligations,
covenants or conditions contained in any Contractual Obligation applicable to
it, and no condition exists which, with the giving of notice or the lapse of
time or both, would constitute a default under such Contractual Obligation in
each case, except where the consequences, direct or indirect, of such default or
defaults, if any, would not have a Material Adverse Effect.
(k) Securities Activities. The REIT is not engaged principally in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in
51
Regulation U).
(l) Disclosure. The REIT has not intentionally or knowingly withheld
any material fact from Agent in regard to any matter raised in the Loan
Documents. Notwithstanding the foregoing, with respect to any projections of the
REIT's future performance such representations and warranties are made in good
faith and to the best judgment of the management of the REIT at the time such
projections were made.
(m) Requirements of Law. To the REIT's knowledge, the REIT and each
of its Subsidiaries are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue Sky"
laws) applicable to them and their respective businesses, in each case, where
the failure to so comply would have a Material Adverse Effect. After giving
effect to all filings made simultaneously with the Closing Date, the REIT has
made all filings with and obtained all consents of the Commission required under
the Securities Act and the Securities Exchange Act in connection with the
execution, delivery and performance by the REIT of the Loan Documents to which
it is a party.
(n) Patents, Trademarks, Permits, Etc. The REIT and each of its
Subsidiaries owns, is licensed or otherwise has the lawful right to use, or has
all permits and other governmental approvals, patents, trademarks, trade names,
copyrights, technology, know-how and processes used in or necessary for the
conduct of the REIT's or such Subsidiary's business as currently conducted, the
absence of which would have a Material Adverse Effect. To the REIT's knowledge,
the use of such permits and other governmental approvals, patents, trademarks,
trade names, copyrights, technology, know-how and processes by the REIT or such
Subsidiary does not infringe on the rights of any Person, subject to such claims
and infringements as do not, in the aggregate, have a Material Adverse Effect.
(o) Environmental Matters. To the knowledge of the REIT, except as
would not have a Material Adverse Effect and except as set forth on Schedule
5.01(r), (i) the Property and operations of the REIT and each of its
Subsidiaries comply in all material respects with all applicable Environmental
Laws; (ii) none of the Property or operations of the REIT or any of its
Subsidiaries are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment or from the violation of any Environmental Laws, which Remedial
Action or other Liabilities and Costs would have a Material Adverse Effect;
(iii) neither the REIT nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now, nor to the REIT's knowledge has
there ever been, on or in the Property of the REIT or any of its Subsidiaries
(except in compliance in all material respects with all applicable Environmental
Laws): (A) any underground storage tanks, (B) any asbestos-containing material,
(C) any polychlorinated biphenyls (PCB's) used in hydraulic oils, electrical
transformers or other equipment, (D) any petroleum hydrocarbons or (E) any
chlorinated or halogenated solvents; and (v) neither the REIT nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person as a result of the Release or threatened Release of a
Contaminant into the environment.
(p) Solvency. The REIT is and will be Solvent after giving effect to
the
52
disbursement of the Loans and the payment of all fees then payable hereunder.
(q) Status as a REIT. The REIT (i) is a real estate investment trust
as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(r) Ownership. The REIT does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).
(s) Listing. The common stock of the REIT is and will continue to be
listed for trading and traded on either the New York Stock Exchange or American
Stock Exchange.
(t) Tax Shelter Representation. Neither Borrower, MHC Trust, the
REIT nor any Affiliate of any of the foregoing intends to treat the Loans or the
transactions contemplated by this Agreement and the other Loan Documents as
being a "reportable transaction" (within the meaning of Treasury Regulation
Section 1.6011-4). If the REIT, or any other party to the Loans determines to
take any action inconsistent with such intention, the REIT will promptly notify
Lenders thereof. If the REIT so notifies Lenders, Borrower acknowledges that
Lenders may treat the Loans as part of a transaction that is subject to Treasury
Regulation Section 301.6112-1, and Lenders will maintain the lists and other
records, including the identity of the applicable party to the Loans as required
by such Treasury Regulation.
5.03 Representations and Warranties as to MHC Trust. MHC Trust
hereby represents and warrants to Agent and Lenders as follows:
(a) Organization; Trust or Corporate Powers. MHC Trust (i) is a real
estate investment trust duly organized, validly existing and in good standing
under the laws of the State of Maryland, (ii) is duly qualified to do business
and in good standing under the laws of each jurisdiction in which the nature of
its business requires it to be so qualified, except for those jurisdictions
where failure to so qualify and be in good standing would not have a Material
Adverse Effect, and (iii) has all requisite trust or corporate power and
authority to conduct its business as presently conducted and as proposed to be
conducted in connection with and following the consummation of the transactions
contemplated by the Loan Documents.
(b) Authority. MHC Trust has the requisite trust or corporate power
and authority to execute, deliver and perform each of the Loan Documents to
which it is or will be a party. The execution, delivery and performance thereof,
and the consummation of the transactions contemplated thereby, have been duly
approved by the trustees of MHC Trust, and no other trust or corporate
proceedings on the part of MHC Trust are necessary to consummate such
transactions. Each of the Loan Documents to which MHC Trust is a party has been
duly executed and delivered by MHC Trust and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms, subject
to bankruptcy, insolvency and other laws affecting creditors' rights generally
and general equitable principles.
53
(c) No Conflict. The execution, delivery and performance by MHC
Trust of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Declaration of Trust or by-laws, or other organizational documents, as the case
may be, or (ii) require any approval of the beneficiaries or shareholders of MHC
Trust.
(d) Consents and Authorizations. MHC Trust has obtained all consents
and authorizations required pursuant to its Contractual Obligations with any
other Person, the failure of which to obtain would have a Material Adverse
Effect, and has obtained all consents and authorizations of, and effected all
notices to and filings with, any Governmental Authority necessary to allow MHC
Trust to lawfully execute, deliver and perform its obligations under the Loan
Documents to which MHC Trust is a party.
(e) Governmental Regulation. MHC Trust is not subject to regulation
under the Public Utility Holding Company Act of 1935, the Federal Power Act, the
Interstate Commerce Act, the Investment Company Act of 1940 or any other federal
or state statute or regulation such that its ability to incur indebtedness is
limited or its ability to consummate the transactions contemplated by the Loan
Documents is materially impaired.
(f) Material Adverse Agreements. MHC Trust is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. MHC Trust is not engaged principally in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U).
(h) Disclosure. MHC Trust has not intentionally or knowingly
withheld any material fact from Lender in regard to any matter raised in the
Loan Documents. Notwithstanding the foregoing, with respect to any projections
of MHC Trust's future performance such representations and warranties are made
in good faith and to the best judgment of the officers of MHC Trust at the time
such projections were made.
(i) Solvency. MHC Trust is and will be Solvent after giving effect
to the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. MHC Trust (i) is a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 856(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(k) Ownership. MHC Trust does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).
5.04 Representations and Warranties as to T1000 Trust. T1000 Trust
hereby
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represents and warrants to Agent and Lenders as follows:
(a) Organization; Trust or Corporate Powers. T1000 Trust (i) is a
real estate investment trust duly organized, validly existing and in good
standing under the laws of the State of Maryland, (ii) is duly qualified to do
business and in good standing under the laws of each jurisdiction in which the
nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not have
a Material Adverse Effect, and (iii) has all requisite trust or corporate power
and authority to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
(b) Authority. T1000 Trust has the requisite trust or corporate
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the trustees of T1000 Trust, and no other trust or
corporate proceedings on the part of T1000 Trust are necessary to consummate
such transactions. Each of the Loan Documents to which T1000 Trust is a party
has been duly executed and delivered by T1000 Trust and constitutes its legal,
valid and binding obligation, enforceable against it in accordance with its
terms, subject to bankruptcy, insolvency and other laws affecting creditors'
rights generally and general equitable principles.
(c) No Conflict. The execution, delivery and performance by T1000
Trust of the Loan Documents to which it is a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate its
Declaration of Trust or by-laws, or other organizational documents, as the case
may be, or (ii) require any approval of the beneficiaries or shareholders of
T1000 Trust.
(d) Consents and Authorizations. T1000 Trust has obtained all
consents and authorizations required pursuant to its Contractual Obligations
with any other Person, the failure of which to obtain would have a Material
Adverse Effect, and has obtained all consents and authorizations of, and
effected all notices to and filings with, any Governmental Authority necessary
to allow T1000 Trust to lawfully execute, deliver and perform its obligations
under the Loan Documents to which T1000 Trust is a party.
(e) Governmental Regulation. T1000 Trust is not subject to
regulation under the Public Utility Holding Company Act of 1935, the Federal
Power Act, the Interstate Commerce Act, the Investment Company Act of 1940 or
any other federal or state statute or regulation such that its ability to incur
indebtedness is limited or its ability to consummate the transactions
contemplated by the Loan Documents is materially impaired.
(f) Material Adverse Agreements. T1000 Trust is not a party to or
subject to any Contractual Obligation or other restriction contained in its
charter, by-laws, or similar governing documents which has a Material Adverse
Effect.
(g) Securities Activities. T1000 Trust is not engaged principally in
the business of extending credit for the purpose of purchasing or carrying any
"margin stock" (as defined in Regulation U).
(h) Disclosure. T1000 Trust has not intentionally or knowingly
withheld any
55
material fact from Lender in regard to any matter raised in the Loan Documents.
Notwithstanding the foregoing, with respect to any projections of T1000 Trust's
future performance such representations and warranties are made in good faith
and to the best judgment of the officers of T1000 Trust at the time such
projections were made.
(i) Solvency. T1000 Trust is and will be Solvent after giving effect
to the disbursement of the Loans and the payment of all fees then payable
hereunder.
(j) Status as a REIT. T1000 Trust (i) is a real estate investment
trust as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) has not revoked its election to be a real estate
investment trust, (iii) has not recognized any material "net income from
prohibited transactions" as defined in Section 856(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) for its current "tax
year" (as defined in the Internal Revenue Code) is and for all prior tax years
subsequent to its election to be a real estate investment trust has been
entitled to a dividends paid deduction which meets the requirements of Section
857 of the Internal Revenue Code.
(k) Ownership. T1000 Trust does not own any Property or have any
interest in any Person, other than as set forth on Schedule 5.01(w).
ARTICLE VI.
REPORTING COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and agree
that, on and after the date hereof, until payment in full of all of the
Obligations, the expiration of the Commitments and termination of this
Agreement:
6.01 Financial Statements and Other Financial and Operating
Information. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP. Borrower shall deliver
or cause to be delivered to Agent with copies for each Lender:
(a) Quarterly Financial Statements Certified by CFO. As soon as
practicable, and in any event within fifty (50) days after the end of each
Fiscal Quarter, except the last Fiscal Quarter of a Fiscal Year, consolidated
balance sheets, statements of income and expenses and statements of cash flow
(collectively, "Financial Statements") for the REIT, on a consolidated basis, in
the form provided to the Commission on the REIT's Form 10-Q and certified by the
REIT's chief financial officer.
(b) Annual Financial Statements. Within one hundred and twenty (120)
days after the close of each Fiscal Year, annual Financial Statements of the
REIT, on a consolidated basis (in the form provided to the Commission on the
REIT's Form 10K), audited and certified without qualification by the
Accountants.
(c) Officer's Certificate of REIT. (i) Together with each delivery
of any Financial Statement pursuant to clauses (a) and (b) above, an Officer's
Certificate of the REIT, stating that (A) the executive officer who is the
signatory thereto, which officer shall be the chief executive officer or the
chief financial officer of the REIT, has reviewed, or caused under his
56
supervision to be reviewed, the terms of this Agreement and the other Loan
Documents, and has made, or caused to be made under his supervision, a review in
reasonable detail of the transactions and condition of Borrower, the REIT, the
Subsidiaries, and the Agreement Parties, during the accounting period covered by
such Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signer does not
have knowledge of the existence as of the date of the Officer's Certificate, of
any condition or event which constitutes an Event of Default or Unmatured Event
of Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto and (B) such Financial
Statements have been prepared in accordance with the books and records of the
REIT, on a consolidated basis, and fairly present the financial condition of the
REIT, on a consolidated basis, at the date thereof (and, if applicable, subject
to normal year-end adjustments) and the results of operations and cash flows, on
a consolidated basis, for the period then ended; and (ii) together with each
delivery pursuant to clauses (a) and (b) above, a compliance certificate
demonstrating, in reasonable detail (which detail shall include actual
calculations), compliance during and at the end of such accounting periods with
the financial covenants contained in Sections 8.01(a), 8.01(d) and 8.02(a) and
Article IX.
(d) Knowledge of Event of Default. Promptly upon Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Unmatured Event of Default, or (ii) of any condition or event which has a
Material Adverse Effect, an Officer's Certificate of the REIT specifying the
nature and period of existence of any such condition or event and the nature of
such claimed Event of Default, Unmatured Event of Default, event or condition,
and what action Borrower, the REIT or the Agreement Party, as the case may be,
has taken, is taking and proposes to take with respect thereto.
(e) Litigation, Arbitration or Government Investigation. Promptly
upon Borrower obtaining knowledge of (i) the institution of, or threat of, any
material action, suit, proceeding, governmental investigation or arbitration
against or affecting Borrower, any Agreement Party, the REIT, any Subsidiary or
any of their Property not previously disclosed in writing by Borrower to Agent
pursuant to this Section 6.01(e), or (ii) any material development in any
action, suit, proceeding, governmental investigation or arbitration already
disclosed, in which, in either case, there is a reasonable possibility of an
adverse decision that could have a Material Adverse Effect, a notice thereof to
Agent and such other information as may be reasonably available to it to enable
Agent and its counsel to evaluate such matters.
(f) Failure of the REIT or MHC Trust to Qualify as Real Estate
Investment Trust. Promptly upon, and in any event within forty- eight (48) hours
after Borrower first has knowledge of (i) the REIT or MHC Trust failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by the REIT or MHC Trust causing its election to be taxed as a real estate
investment trust to be terminated, (iii) any act causing the REIT or MHC Trust
to be subject to the taxes (other than a de minimus amount) imposed by Section
857(b)(6) of the Internal Revenue Code (or any successor provision thereto),
(iv) the REIT or MHC Trust failing to be entitled to a dividends paid deduction
which meets the requirements of Section 857 of the Internal Revenue Code, or (v)
any challenge by the IRS to the REIT's or MHC Trust's status as a real estate
investment trust, a notice of any such occurrence or circumstance.
57
(g) Management Reports. Upon and after the occurrence of an Event of
Default, copies of any management reports prepared by the Accountants as soon as
available.
(h) Property Changes. Notice of any material acquisition,
disposition, merger, or purchase by the REIT, MHC Trust, Borrower, any
Subsidiary or any Agreement Party no later than ten (10) days after the
consummation thereof, specifying the nature of the transaction in reasonable
detail.
(i) Other Information. Such other information, reports, contracts,
schedules, lists, documents, agreements and instruments in the possession of the
REIT, Borrower, any Subsidiary, or any Agreement Party with respect to the
business, financial condition, operations, performance, or properties of
Borrower, the REIT, any Subsidiary, or any Agreement Party, as Agent may, from
time to time, reasonably request, including without limitation, annual
information with respect to cash flow projections, budgets, operating statements
(current year and immediately preceding year), rent rolls, lease expiration
reports, leasing status reports, note payable summaries, bullet note summaries,
equity funding requirements, contingent liability summaries, line of credit
summaries, line of credit collateral summaries, wrap note or note receivable
summaries, schedules of outstanding letters of credit, summaries of cash and
Cash Equivalents, projections of management and leasing fees and overhead
budgets, each in the form customarily prepared by the REIT, MHC Trust or
Borrower. If Borrower fails to provide Agent with information requested from
Borrower within the time periods provided for herein, or if no time periods are
provided for, within ten (10) Business Days after Agent requests such
information, and provided that Agent gives Borrower reasonable prior notice and
an opportunity to participate, Borrower hereby authorizes Agent to communicate
with the Accountants and authorizes the Accountants to disclose to Agent any and
all financial statements and other information of any kind, including copies of
any management letter or the substance of any oral information, that such
Accountants may have with respect to the financial condition, operations,
properties, performance and prospects of Borrower, the REIT, any Subsidiary, or
any Agreement Party. Concurrently therewith, Agent will notify Borrower of any
such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.01;
provided that, to the extent that items required by this Section 6.01 are also
required to be delivered to Agent as Agent under the Term Loan Agreement or as
Lender under the WFB Revolving Credit Agreement, a single copy of such items
delivered to Agent shall be deemed to satisfy both the requirements hereunder
and thereunder.
6.02 Press Releases; SEC Filings and Financial Statements. The REIT,
MHC Trust, T1000 Trust and Borrower will deliver to the Agent as soon as
practicable after public release all press releases concerning the REIT, MHC
Trust, T1000 Trust or Borrower. The REIT, MHC Trust and Borrower will deliver to
Agent as soon as practicable after filing with the Commission, all reports and
notices, proxy statements, registration statements and prospectuses. All
materials sent or made available generally by the REIT to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, including all periodic reports required to be filed with the
Commission, will be delivered to Agent as soon as available.
6.03 Environmental Notices. Except for events or occurrences that
will not result in a Material Adverse Effect, Borrower shall notify Agent, in
writing, as soon as
58
practicable, and in any event within ten (10) days after Borrower's learning
thereof, of any: (a) written notice or claim to the effect that Borrower, any
Agreement Party, the REIT, or any Subsidiary is or may be liable to any Person
as a result of the Release or threatened Release of any Contaminant into the
environment; (b) written notice that Borrower, any Agreement Party, the REIT, or
any Subsidiary is subject to investigation by any Governmental Authority
evaluating whether any Remedial Action is needed to respond to the Release or
threatened Release of any Contaminant into the environment; (c) written notice
that any Property of Borrower, any Agreement Party, the REIT, or any Subsidiary
is subject to an Environmental Lien; (d) written notice of violation to
Borrower, any Agreement Party, the REIT, or any REIT Subsidiary or awareness of
a condition which might reasonably result in a notice of violation of any
Environmental Laws by Borrower, the REIT, any REIT Subsidiary or any Agreement
Party; (e) commencement or written threat of any judicial or administrative
proceeding alleging a violation by Borrower, the REIT, any Subsidiary or any
Agreement Party of any Environmental Laws; or (f) written notice received
directly from a Governmental Authority of any changes to any existing
Environmental Laws.
6.04 Qualifying Unencumbered Properties. Borrower may from time to
time but no more frequently than quarterly deliver notice to the Agent stating
that Borrower intends to designate a Property to become a Qualifying
Unencumbered Property. Such notice shall (i) set forth the name of such Property
(or, if such Property has no name, such notice shall otherwise identify such
Property), and (ii) be accompanied by a statement of income, certified by the
chief financial officer of the REIT, for each such Property for the then most
recently completed Fiscal Quarter (or, if such statement of income is
unavailable, a pro forma financial statement setting forth the Net Operating
Income with respect to such Property for the then current Fiscal Quarter). If
any such Property meets the requirements set forth in the definition of
"Qualifying Unencumbered Properties" and the Agent fails to deliver written
notice to Borrower stating that the Requisite Lenders have disapproved the
designation of such Property as a Qualifying Unencumbered Property (it being
understood that such notice shall provide Borrower with information regarding
why such designation was disapproved by the Requisite Lenders and that the
Requisite Lenders will not unreasonably disapprove such designation) within
twenty (20) days after receipt of such information by Agent, such Property shall
become a Qualifying Unencumbered Property.
ARTICLE VII.
AFFIRMATIVE COVENANTS
Borrower, MHC Trust, the REIT and T1000 Trust covenant and agree
that, on and after the date hereof, until payment in full of all of the
Obligations, the expiration of the Commitments and termination of this
Agreement:
7.01 With respect to Borrower:
(a) Existence. Borrower shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
limited liability company, trust or corporate existence, as applicable, and
preserve and keep in full force and effect its and their respective rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect. Borrower shall maintain its status as a limited
partnership.
59
(b) Qualification. Borrower shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses require them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect.
(c) Compliance with Laws, Etc. Borrower shall, and shall cause each
of its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting Borrower and its
Subsidiaries or their respective properties, performance, assets or operations,
and (ii) obtain as needed all Permits necessary for its and their respective
operations and maintain such in good standing, except in each of the foregoing
cases where the failure to do so will not have a Material Adverse Effect or
expose Agent or Lenders to any material liability therefor.
(d) Payment of Taxes and Claims. (a) Borrower shall, and shall cause
each of its Subsidiaries to, pay (i) all taxes, assessments and other
governmental charges imposed upon it or them or on any of its or their
respective properties or assets or in respect of any of its or their respective
franchises, business, income or property before any penalty or interest accrues
thereon, the failure to make payment of which in such time periods would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services, materials and supplies) which have become due and
payable and which by law have or may become a Lien (other than a Permitted Lien)
upon any of its or their respective properties or assets, prior to the time when
any penalty or fine shall be incurred with respect thereto, the failure to make
payment of which would have a Material Adverse Effect; provided, however, that
no such taxes, assessments, and governmental charges referred to in clause (i)
above or claims referred to in clause (ii) above need be paid if being contested
in good faith by appropriate proceedings promptly instituted and diligently
conducted and if adequate reserves shall have been set aside therefor in
accordance with GAAP.
(e) Maintenance of Properties; Insurance. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in good repair, working order and
condition, excepting ordinary wear and tear, all of its and their respective
Property (personal and real) and will make or cause to be made all appropriate
repairs, renewals and replacements thereof, in each case where the failure to so
maintain, repair, renew or replace would have a Material Adverse Effect.
Borrower shall, and shall cause each of its Subsidiaries to, maintain with
insurance companies that have a Best Rating of "A- VII" or higher or other
insurance companies reasonably acceptable to Agent that have similar financial
resources and stability, which companies shall be qualified to do business in
the states where such Property is located, the insurance policies and programs
reasonably acceptable to Agent insuring all property and assets material to the
operations of Borrower and each of its Subsidiaries against loss or damage by
fire, theft, burglary, pilferage and loss in transit and business interruption,
together with such other hazards as is reasonably consistent with prudent
industry practice, and maintain liability insurance consistent with prudent
industry practice with financially sound insurance companies qualified to do
business in the states where such Property is located. The insurance policies
shall provide that they cannot be terminated or materially modified unless Agent
receives thirty (30) days prior written notice of said termination or
modification. At Agent's reasonable request, Borrower shall furnish evidence of
replacement costs, without cost to Agent, such as are regularly and ordinarily
made by insurance companies to determine the then replacement cost of the
improvements on any Property of Borrower or any of its Subsidiaries. In the
event Borrower
60
fails to cause insurance to be carried as aforesaid, Agent shall have the right
(but not the obligation), with the consent of Requisite Lenders, to place and
maintain insurance required to be maintained hereunder and treat the amounts
expended therefor as additional Obligations, payable on demand; provided
however, that Agent shall give Borrower five (5) days' prior notice of Agent's
intent to place or maintain such insurance during which time Borrower shall have
the opportunity to obtain such insurance. All of the insurance policies required
hereunder shall be in form and substance reasonably satisfactory to Agent. Agent
hereby agrees that Borrower may use blanket policies to satisfy the requirements
of this Section 7.01(e), approves the issuer, form and content of all insurance
policies currently carried by Borrower and agrees that such insurance satisfies
the requirements of this Section 7.01(e). Furthermore, Agent agrees that it will
not be unreasonable in exercising any right hereunder to require Borrower to
modify, alter or supplement its insurance policies or coverage or in exercising
any right it may have hereunder to approve any changes Borrower may hereafter
make with respect to its insurance.
(f) Inspection of Property; Books and Records. Borrower shall permit
and shall cause each of the REIT, each Subsidiary, and each Agreement Party to,
upon reasonable prior notice by Agent to Borrower, permit any authorized
representative(s) designated by Agent to visit and inspect any of its properties
including inspection of financial and accounting records and leases, and to make
copies and take extracts therefrom, all at such times during normal business
hours and as often as Agent may reasonably request. In connection therewith,
Borrower shall pay all reasonable expenses of the types described in Section
12.01. Borrower shall keep, and shall cause each of, the REIT, each Subsidiary
and each Agreement Party to keep proper books of record and account in
conformity with GAAP, as modified and as otherwise required by this Agreement
and applicable Requirements of Law.
(g) Maintenance of Licenses, Permits, Etc. Borrower shall, and shall
cause each of its Subsidiaries to, maintain in full force and effect all
licenses, permits, governmental approvals, franchises, patents, trademarks,
trade names, copyrights, authorizations or other rights necessary for the
operation of their respective businesses, except where the failure to obtain any
of the foregoing would not have a Material Adverse Effect; and notify Agent in
writing, promptly after learning thereof, of the suspension, cancellation,
revocation or discontinuance of or of any pending or threatened action or
proceeding seeking to suspend, cancel, revoke or discontinue any such material
license, permit, patent, trademark, trade name, copyright, governmental
approval, franchise authorization or right, except where the suspension,
cancellation, revocation or discontinuance would not have a Material Adverse
Effect.
(h) Conduct of Business. Except for Permitted Holdings and other
investments permitted under Section 8.01(c), Borrower shall engage only in the
business of owning, operating, managing and developing Designated Use Properties
and other business activities incidental thereto, whether directly or through
its Subsidiaries.
(i) Use of Proceeds. Borrower shall use the proceeds of each Loan
only for general partnership purposes in accordance with the provisions of this
Agreement. Notwithstanding anything contained in this Agreement to the contrary,
no Swingline Loan shall be used more than once for the purpose of refinancing
another Swingline Loan, in whole or part.
(j) Further Assurance. Borrower shall take and shall cause its
Subsidiaries and each Agreement Party to take all such further actions and
execute all such further documents
61
and instruments as Agent may at any time reasonably determine to be necessary or
advisable to (i) correct any technical defect or technical error that may be
discovered in any Loan Document or in the execution, acknowledgment or
recordation thereof, and (ii) cause the execution, delivery and performance of
the Loan Documents to be duly authorized.
(k) [Intentionally Deleted]
7.02 With respect to the REIT:
(a) Existence. The REIT shall, and shall cause each of its
Subsidiaries to, at all times maintain its and their respective partnership,
trust or corporate existence, as applicable, and preserve and keep in full force
and effect its and their respective rights and franchises unless the failure to
maintain such rights and franchises will not have a Material Adverse Effect.
(b) Qualification, Name. The REIT shall, and shall cause each of its
Subsidiaries to, qualify and remain qualified to do business in each
jurisdiction in which the nature of its and their businesses requires them to be
so qualified except for those jurisdictions where failure to so qualify does not
have a Material Adverse Effect. The REIT will transact business solely in its or
its Subsidiaries' own name.
(c) Securities Law Compliance. The REIT shall comply in all material
respects with all rules and regulations of the Commission and file all reports
required by the Commission relating to the REIT's publicly-held Securities.
(d) Continued Status as a REIT; Prohibited Transactions. The REIT
(i) will continue to be a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereto), (ii) will not
revoke its election to be a real estate investment trust, (iii) will not
recognize any material "net income from prohibited transactions" as defined in
Section 857(b)(6)(B)(i) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will do all acts necessary to continue to be entitled to a
dividend paid deduction meeting the requirements of Section 857 of the Internal
Revenue Code.
(e) NYSE or ASE Listed Company. The REIT shall cause its common
stock at all times to be listed for trading and be traded on the New York Stock
Exchange or American Stock Exchange.
(f) Compliance with Laws, Etc. The REIT shall, and shall cause each
of its Subsidiaries to, (i) comply with all Requirements of Law and Contractual
Obligations, and all restrictive covenants affecting the REIT and its
Subsidiaries or their respective properties, performance, prospects, assets or
operations, and (ii) obtain as needed all Permits necessary for its and their
respective operations and maintain such in good standing, except in each of the
foregoing cases where the failure to do so will not have a Material Adverse
Effect.
(g) Payment of Taxes and Claims. Subject to Section 7.02(d), the
REIT shall, and shall cause each of its Subsidiaries to, pay (i) all taxes,
assessments and other governmental charges imposed upon it or them or on any of
its or their respective properties or assets or in respect of any of its or
their respective franchises, business, income or property before any penalty or
interest accrues thereon, the failure to make payment of which would have a
Material Adverse Effect, and (ii) all claims (including, without limitation,
claims for labor, services,
62
materials and supplies) which have become due and payable and which by law have
or may become a Lien (other than a Permitted Lien) upon any of its or their
respective properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto, the failure to make payment of which
would have a Material Adverse Effect; provided, however, that no such taxes,
assessments, and governmental charges referred to in clause (i) above or claims
referred to in clause (ii) above need be paid if being contested in good faith
by appropriate proceedings promptly instituted and diligently conducted and if
adequate reserves shall have been set aside therefor in accordance with GAAP.
(h) MHC Trust. The REIT shall cause MHC Trust to at all times (i)
remain a Subsidiary of the REIT, (ii) remain controlled by the REIT and (iii) be
the sole general partner of Borrower.
7.03 With respect to MHC Trust:
(a) Continued Status as a Real Estate Investment Trust; Prohibited
Transactions. MHC Trust (i) will continue to be a real estate investment trust
as defined in Section 856 of the Internal Revenue Code (or any successor
provision thereto), (ii) will not revoke its election to be a real estate
investment trust, (iii) will not recognize any material "net income from
prohibited transactions" as defined in Section 857(b)(6)(B)(i) of the Internal
Revenue Code (or any successor provision thereto), and (iv) will do all acts
necessary to continue to be entitled to a dividends paid deduction meeting the
requirements of Section 857 of the Internal Revenue Code.
ARTICLE VIII.
NEGATIVE COVENANTS
Borrower, MHC Trust, T1000 Trust and the REIT covenant and agree
that, on and after the date hereof, until payment in full of all of the
Obligations, the expiration of the Commitments and termination of this
Agreement:
8.01 With respect to Borrower:
(a) Indebtedness. Borrower shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; the "Obligations" under the Term Loan
Agreement; and the "Obligations" under the WFB Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section 8.01(a)(i);
(iii) trade debt incurred in the normal course of business;
(iv) intercompany Indebtedness (including, without limitation,
amounts owing under intercompany leases) owing between Subsidiaries; and
(v) Indebtedness which, after giving effect thereto, may be incurred
or may remain outstanding without giving rise to an Event of Default or
Unmatured Event of
63
Default under any provision of Articles VIII and IX; provided, however,
that (A) the Borrower shall not, and shall not permit any of its
Subsidiaries to, guarantee or otherwise become or remain directly or
indirectly liable with respect to the Indebtedness of any Investment
Affiliate, and (B) Borrower shall not permit any Subsidiary to create,
incur, assume or otherwise become or remain directly or indirectly liable
with respect to, any Recourse Indebtedness in excess of Ten Million
Dollars ($10,000,000) per Subsidiary at any time or Thirty Million Dollars
($30,000,000) in the aggregate for all Subsidiaries at any time.
(b) Liens. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and remain
outstanding pursuant to Section 8.01(a)(iv) and (v).
(c) Investments. Borrower shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly make or own any Investment except:
(i) Investments in cash and Cash Equivalents;
(ii) Permitted Holdings;
(iii) Investments in Subsidiaries and Investment Affiliates owned as
of the Closing Date;
(iv) Investments permitted pursuant to Section 8.01(e)(v).
(v) Controlled Ownership Interests which do not constitute
Non-Designated Use Property; and
(vi) mortgage loans which do not constitute Non-Designated Use
Property and which are either eliminated in the consolidation of the REIT,
Borrower and the Subsidiaries or are accounted for as investments in real
estate under GAAP.
(d) Distributions and Dividends. None of Borrower, the REIT or MHC
Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of ninety-five percent (95%) of Funds From
Operations in any Fiscal Year; provided, however, that if an Event of Default
under Section 10.01(a) shall have occurred, none of Borrower, the REIT or MHC
Trust shall declare or make any dividend or other distribution on account of
partnership interests in excess of what is required for the REIT to maintain its
status as a real estate investment trust as defined in Section 856 of the
Internal Revenue Code.
(e) Restrictions on Fundamental Changes. Except as provided in
Section 8.01(e)(vi) below:
(i) Other than the merger described in the definition of Thousand
Trails
64
Transaction, Borrower shall not, and shall not permit any of its
Subsidiaries to, enter into any merger, consolidation, reorganization or
recapitalization or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution), or discontinue its business.
(ii) Borrower shall remain a limited partnership with MHC Trust as
its sole general partner.
(iii) Borrower shall not change its Fiscal Year.
(iv) Except for Permitted Holdings and other Investments permitted
under Section 8.01(c), Borrower shall not engage in any line of business
other than ownership, operation, management and development of Designated
Use Properties and the provision of services incidental thereto and the
brokerage, purchase, and sale of manufactured home units, whether directly
or through its Subsidiaries and Investment Affiliates.
(v) Borrower shall not acquire by purchase or otherwise all or
substantially all of the business, property or assets of, or stock or
other evidence of beneficial ownership of, any Person, unless after giving
effect thereto, Borrower is in pro forma compliance with this Agreement.
(vi) Notwithstanding the foregoing, or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of
this Agreement, including, without limitation, those contained in Articles
VI, VII, VIII and IX, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the
following transfers are permitted: (1) transfers of securities issued by
the REIT that are effected on the New York Stock Exchange or American
Stock Exchange, (2) direct or indirect transfers of interests in any
Subsidiary (the "Transferred Subsidiary") among Borrower, the REIT or any
other Subsidiary, so long as the Transferred Subsidiary remains a
Subsidiary after such transfer or transfers, (3) transfers or issuance of
limited partnership interests in Borrower, provided that MHC Trust remains
the sole general partner of Borrower, (4) the sale of less than $500,000
of preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least
100 shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the
REIT, MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust,
T1000 Trust or Borrower, as applicable, is the surviving entity and (6)
the dissolution of Subsidiaries in the ordinary course of business. At
least fifteen (15) days prior to any transaction permitted under clause
(5) above, Borrower shall provide Agent and the Lenders with written
notice of such merger (or similar transaction) accompanied by a compliance
certificate demonstrating in reasonable detail (which detail shall include
actual calculations) compliance with the financial covenants contained in
Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a
pro forma basis, after giving effect to such merger (or similar
transaction).
(f) ERISA. Neither Borrower nor the REIT shall, and neither shall
permit any Subsidiary or any of their ERISA Affiliates to, do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such
65
acts or failure to act, in a Material Adverse Effect:
(i) Engage, or knowingly permit a Subsidiary or an ERISA Affiliate
to engage, in any prohibited transaction described in Section 406 of ERISA
or Section 4975 of the Internal Revenue Code which is not exempt under
Section 407 or 408 of ERISA or Section 4975(d) of the Internal Revenue
Code for which a class exemption is not available or a private exemption
has not been previously obtained from the DOL;
(ii) Permit to exist any accumulated funding deficiency (as defined
in Section 302 of ERISA and Section 412 of the Internal Revenue Code),
whether or not waived;
(iii) Fail, or permit a Subsidiary or an ERISA Affiliate of the
REIT, Borrower or any Subsidiary to fail, to pay timely required
contributions or annual installments due with respect to any waived
funding deficiency to any Plan if such failure could result in the
imposition of a Lien or otherwise would have a Material Adverse Effect;
(iv) Terminate, or permit an ERISA Affiliate of the REIT, Borrower
or any Subsidiary to terminate, any Benefit Plan which would result in any
liability of Borrower or a Subsidiary or an ERISA Affiliate of the REIT,
Borrower or any Subsidiary under Title IV of ERISA;
(v) Fail, or permit any Subsidiary or ERISA Affiliate to fail to pay
any required installment under section (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment or
other payment, if such failure could result in the imposition of a Lien or
otherwise would have a Material Adverse Effect;
(vi) Permit to exist any Termination Event;
(vii) Make, or permit a Subsidiary or an ERISA Affiliate of the
REIT, Borrower or any Subsidiary to make, a complete or partial withdrawal
(within the meaning of ERISA Section 4201) from any Multiemployer Plan so
as to result in liability to Borrower, a Subsidiary or any ERISA Affiliate
of the REIT, Borrower or any Subsidiary which would have a Material
Adverse Effect; or
(viii) Permit the total Unfunded Pension Liabilities (using the
actuarial assumptions utilized by the PBGC) for all Benefit Plans (other
than Benefit Plans which have no Unfunded Pension Liabilities) to have a
Material Adverse Effect.
None of the REIT, Borrower nor any Agreement Party shall use any "assets"
(within the meaning of ERISA or Section 4975 of the Internal Revenue Code,
including but not limited to 29 C.F.R. Section 2510.3-101 or any successor
regulation thereto) of an "employee benefit plan" within the meaning of Section
3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of the
Internal Revenue Code to repay or secure the Obligations if the use of such
assets may result in a prohibited transaction under ERISA or the Internal
Revenue Code (which is not exempt from the restrictions of Section 406 of ERISA
and Section 4975 of the Internal Revenue Code and the taxes and penalties
imposed by Section 4975 of the Internal Revenue Code and Section 502(i) of
ERISA) or in a Lender, Agent or the Lenders being deemed in violation of Section
404 or 406 of ERISA or Section 4975 of the Internal Revenue Code or otherwise by
itself results in
66
or will result in a Lender, Agent or the Lenders being a fiduciary or party in
interest under ERISA or a "disqualified person" as defined in Section 4975 (e)
(2) of the Internal Revenue Code with respect to an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code. Without limitation of any other
provision of this Agreement, none of the REIT, Borrower or any Agreement Party
shall assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose
of their respective interests or rights (direct or indirect) in any Loan
Document, or attempt to do any of the foregoing or suffer any of the foregoing,
or permit any party with a direct or indirect interest or right in any Loan
Document to do any of the foregoing, nor shall the REIT, MHC Trust or Borrower
assign, sell, pledge, encumber, transfer, hypothecate or otherwise dispose of
any of their respective rights or interests (direct or indirect) in any
Agreement Party, Borrower or the REIT, as applicable, or attempt to do any of
the foregoing or suffer any of the foregoing, if such action would cause the
Obligations, or the exercise of any of the Agent's or Lenders' rights in
connection therewith, to constitute a prohibited transaction under ERISA or the
Internal Revenue Code (unless Borrower furnishes to Agent a legal opinion
reasonably satisfactory to Agent that the transaction is exempt from the
prohibited transaction provisions of ERISA and the Internal Revenue Code (for
this purpose, Agent and the Lenders agree to supply Borrower all relevant
non-confidential factual information reasonably necessary to such legal opinion
and reasonably requested by Borrower)) or otherwise results in a Lender, Agent
or the Lenders being deemed in violation of Sections 404 or 406 of ERISA or
Section 4975 of the Internal Revenue Code or otherwise by itself would result in
a Lender, Agent or the Lenders being a fiduciary or party in interest under
ERISA or a "disqualified person" as defined in Section 4975(e)(2) of the
Internal Revenue Code with respect to an "employee benefit plan" within the
meaning of Section 3(3) of ERISA or a "plan" within the meaning of Section
4975(e)(1) of the Internal Revenue Code.
(g) Environmental Liabilities. Borrower shall not, and shall not
permit any of its Subsidiaries to, become subject to any Liabilities and Costs
which would have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, Borrower and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) Borrower shall have given
Agent prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject Borrower or such
Subsidiary to any criminal penalty or subject Agent to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(h) Amendment of Constituent Documents. Borrower shall not permit
any amendment of its limited partnership agreement, certificate of limited
partnership or by-laws, if any, which would materially and adversely affect
Agent or Lenders or their respective rights and remedies under the Loan
Documents.
(i) Disposal of Interests. Except as permitted under Section
8.01(e)(vi)(4), Borrower will not directly or indirectly convey, sell, transfer,
assign, pledge or otherwise
67
encumber or dispose of any material portion of its partnership interests, stock
or other ownership interests in any Subsidiary or other Person in which it has
an interest unless Borrower has delivered to Agent a Compliance Certificate
showing on a pro forma basis (calculated in a manner reasonably acceptable to
Agent) that there would be no breach of any of the financial covenants contained
in Articles VIII and XI after giving effect to such conveyance, sale, transfer,
assignment, pledge, or other encumbrance or disposition.
(j) Margin Regulations. No portion of the proceeds of any credit
extended under this Agreement shall be used in any manner which might cause the
extension of credit or the application of such proceeds to violate Regulation U
or Regulation X or any other regulation of the Federal Reserve Board or to
violate the Securities Exchange Act or the Securities Act, in each case as in
effect on the date or dates of Borrowings and such use of proceeds.
(k) Transactions with Affiliates. Borrower shall not and shall not
permit any of its Subsidiaries to enter into, any transaction or series of
related transactions with any Affiliate of Borrower, other than transactions in
the ordinary course of business which are on terms and conditions substantially
as favorable to Borrower or such Subsidiary as would be obtainable by Borrower
or such Subsidiary in an arms-length transaction with a Person other than an
Affiliate.
8.02 With respect to the REIT:
(a) Indebtedness. The REIT shall not, and shall not permit any of
its Subsidiaries to, directly or indirectly, create, incur, assume or otherwise
become or remain directly or indirectly liable with respect to, any
Indebtedness, except:
(i) the Obligations; the "Obligations" under the Term Loan
Agreement; and the "Obligations" under the WFB Revolving Credit Agreement;
(ii) guaranties of the obligations described in Section 8.02(a)(i);
and
(iii) Indebtedness which, after giving effect thereto, may be
incurred or may remain outstanding without giving rise to an Event of
Default or Unmatured Event of Default under any provision of Articles VIII
and IX; provided, however, that (A) the REIT shall not, and shall not
permit any of its Subsidiaries to, guarantee or otherwise become or remain
directly or indirectly liable with respect to the Indebtedness of any
Investment Affiliate, and (B) the REIT shall not permit any Subsidiary to
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Recourse Indebtedness in excess of Ten Million
Dollars ($10,000,000) per Subsidiary at any time or Thirty Million Dollars
($30,000,000) in the aggregate for all Subsidiaries at any time.
(b) Liens. The REIT shall not, and shall not permit any of its
Subsidiaries to, directly or indirectly create, incur, assume or permit to exist
any Lien on or with respect to any of its Property, except:
(i) Permitted Liens; and
(ii) Liens securing Indebtedness permitted to be incurred and remain
outstanding pursuant to Section 8.02(a)(ii) and (iii).
68
(c) Restriction on Fundamental Changes. Except as provided in
Section 8.02(c)(vi) below:
(i) The REIT shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution) or discontinue its business.
(ii) The REIT shall not change its Fiscal Year.
(iii) The REIT shall not engage in any line of business other than
owning interests in MHC Trust and the interests identified on Schedule
5.01(w) as being owned by the REIT and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the terms
of Borrower's partnership agreement.
(iv) The REIT shall not have an Investment in any Person other than
MHC Trust and the interests identified on Schedule 5.01(w) as being owned
by the REIT and any other ownership interests in Subsidiaries and
Investment Affiliates which are permitted under the terms of Borrower's
partnership agreement.
(v) The REIT shall not acquire an interest in any Property other
than Securities issued by MHC Trust or Borrower and the interests
identified on Schedule 5.01(w) and any other ownership interests in
Subsidiaries and Investment Affiliates which are permitted under the terms
of Borrower's partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of
this Agreement, including, without limitation, those contained in Articles
VI, VII, VIII and IX, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the
following transfers are permitted: (1) transfers of securities issued by
the REIT that are effected on the New York Stock Exchange or American
Stock Exchange, (2) direct or indirect transfers of interests in any
Subsidiary (the "Transferred Subsidiary") among Borrower, the REIT or any
other Subsidiary, so long as the Transferred Subsidiary remains a
Subsidiary after such transfer or transfers, (3) transfers or issuance of
limited partnership interests in Borrower, provided that MHC Trust remains
the sole general partner of Borrower, (4) the sale of less than $500,000
of preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least
100 shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the
REIT, MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust,
T1000 Trust or Borrower, as applicable, is the surviving entity and (6)
the dissolution of Subsidiaries in the ordinary course of business. At
least fifteen (15) days prior to any transaction permitted under clause
(5) above, the REIT shall provide Agent and the Lenders with written
notice of such merger (or similar transaction) accompanied by a compliance
certificate demonstrating in reasonable detail (which detail shall include
actual calculations) compliance with the financial covenants contained in
Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a
pro forma basis, after giving effect to such merger (or similar
transaction).
69
(d) Environmental Liabilities. The REIT shall not, and shall not
permit any of its Subsidiaries to become subject to any Liabilities and Costs
which would have a Material Adverse Effect arising out of or related to (i) the
Release or threatened Release of any Contaminant into the environment, or any
Remedial Action in response thereto, or (ii) any violation of any Environmental
Laws. Notwithstanding the foregoing provision, the REIT and its Subsidiaries
shall have the right to contest in good faith any claim of violation of an
Environmental Law by appropriate legal proceedings and shall be entitled to
postpone compliance with the obligation being contested as long as (i) no Event
of Default shall have occurred and be continuing, (ii) the REIT shall have given
Agent prior written notice of the commencement of such contest, (iii)
noncompliance with such Environmental Law shall not subject the REIT or such
Subsidiary to any criminal penalty or subject Agent to pay any civil penalty or
to prosecution for a crime, and (iv) no portion of any Property material to
Borrower or its condition or prospects shall be in imminent danger of being
sold, forfeited or lost, by reason of such contest or the continued existence of
the matter being contested.
(e) Amendment of Charter or By-Laws. The REIT shall not permit any
amendment of its charter documents or by-laws, which would materially and
adversely affect Agent or Lenders or their respective rights and remedies under
the Loan Documents.
(f) Disposal of Partnership Interests. Except as permitted under
Section 8.02(c)(vi)(4) or as contemplated by Section 3.8 of Borrower's
partnership agreement, the REIT will not directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
interests in MHC Trust or Borrower.
(g) Maximum Ownership Interests. No Person or group of Persons
(within the meaning of Section 13 or 14 of the Securities Exchange Act) (other
than ▇▇▇▇▇▇ ▇▇▇▇) shall beneficially acquire ownership (within the meaning of
Rule 13d-3 promulgated by the Commission under such Act), directly or
indirectly, of more than fifteen percent (15%) of the Securities which have the
right to elect the board of directors of the REIT under ordinary circumstances
on a combined basis, after giving effect to the conversion of any Convertible
Securities in the REIT, MHC Trust and Borrower.
8.03 With respect to MHC Trust:
(a) Restriction on Fundamental Changes. Except as provided in
Section 8.03(a)(vi) below:
(i) MHC Trust shall not enter into any merger, consolidation,
reorganization or recapitalization or liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution) or discontinue its business.
(ii) MHC Trust shall not change its Fiscal Year.
(iii) MHC Trust shall not engage in any line of business other than
owning partnership interests in Borrower and the interests identified on
Schedule 5.01(w) as being owned by MHC Trust and any other ownership
interests in Subsidiaries and Investment Affiliates which are permitted
under the terms of Borrower's partnership agreement.
70
(iv) MHC Trust shall not have an Investment in any Person other than
Borrower and the interests identified on Schedule 5.01(w) as being owned
by MHC Trust and any other ownership interests in Subsidiaries and
Investment Affiliates which are permitted under the terms of Borrower's
partnership agreement.
(v) MHC Trust shall not acquire an interest in any Property other
than Securities issued by Borrower and the interests identified on
Schedule 5.01(w) as being owned by MHC Trust and any other ownership
interests in Subsidiaries and Investment Affiliates which are permitted
under the terms of Borrower's partnership agreement.
(vi) Notwithstanding the foregoing or anything to the contrary set
forth herein, so long as Borrower, MHC Trust, T1000 Trust and the REIT at
all times remain in compliance with all of the terms and conditions of
this Agreement, including, without limitation, those contained in Articles
VI, VII, VIII and IX, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the
following transfers are permitted: (1) transfers of securities issued by
the REIT that are effected on the New York Stock Exchange or American
Stock Exchange, (2) direct or indirect transfers of interests in any
Subsidiary (the "Transferred Subsidiary") among Borrower, the REIT or any
other Subsidiary, so long as the Transferred Subsidiary remains a
Subsidiary after such transfer or transfers, (3) transfers or issuance of
limited partnership interests in Borrower, provided that MHC Trust remains
the sole general partner of Borrower, (4) the sale of less than $500,000
of preferred interests in MHC Trust and/or T1000 Trust to unrelated
individuals to allow each of MHC Trust and T1000 Trust to have at least
100 shareholders and qualify as a real estate investment trust under the
Internal Revenue Code, (5) the merger (or similar transaction) of the
REIT, MHC Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust,
T1000 Trust or Borrower, as applicable, is the surviving entity and (6)
the dissolution of Subsidiaries in the ordinary course of business. At
least fifteen (15) days prior to any transaction permitted under clause
(5) above, MHC Trust shall provide Agent and the Lenders with written
notice of such merger (or similar transaction) accompanied by a compliance
certificate demonstrating in reasonable detail (which detail shall include
actual calculations) compliance with the financial covenants contained in
Sections 8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a
pro forma basis, after giving effect to such merger (or similar
transaction).
(b) Amendment of Charter or By-Laws. MHC Trust shall not permit any
amendment of its charter documents or by-laws, which would materially and
adversely affect Lenders or their rights and remedies under the Loan Documents.
(c) Disposal of Partnership Interests. Except as permitted under
Section 8.03(a)(vi)(4) or as contemplated by Section 3.8 of Borrower's
partnership agreement, MHC Trust will not directly or indirectly convey, sell,
transfer, assign, pledge or otherwise encumber or dispose of any of its
partnership interests in Borrower.
8.04 With respect to T1000 Trust: Other than the merger described in
the definition of Thousand Trails Transaction, T1000 Trust shall not enter into
any merger, consolidation, reorganization or recapitalization or liquidate,
wind-up or dissolve (or suffer any liquidation or dissolution) or discontinue
its business. Notwithstanding the foregoing or
71
anything to the contrary set forth herein, so long as Borrower, MHC Trust, T1000
Trust and the REIT at all times remain in compliance with all of the terms and
conditions of this Agreement, including, without limitation, those contained in
Articles VI, VII, VIII and IX, and no Event of Default or Unmatured Event of
Default exists at the time of or would arise as a result thereof, the following
transfers are permitted: the merger (or similar transaction) of the REIT, MHC
Trust, T1000 Trust or Borrower, so long as the REIT, MHC Trust, T1000 Trust or
Borrower, as applicable, is the surviving entity. At least fifteen (15) days
prior to any transaction permitted under the immediately preceding sentence,
T1000 Trust shall provide Agent and the Lenders with written notice of such
merger (or similar transaction) accompanied by a compliance certificate
demonstrating in reasonable detail (which detail shall include actual
calculations) compliance with the financial covenants contained in Sections
8.01(a), 8.01(d) and 8.02(a) and Article IX both before and, on a pro forma
basis, after giving effect to such merger (or similar transaction).
ARTICLE IX.
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of this
Agreement and until payment in full of all the Obligations, the expiration of
all Commitments and the termination of this Agreement:
9.01 Total Liabilities to Gross Asset Value. Borrower shall not
permit the ratio of Total Liabilities to the sum of Gross Asset Values for
Borrower and each of its Subsidiaries to exceed 0.7:1.
9.02 EBITDA to Fixed Charges Ratio. Borrower shall not permit the
ratio of EBITDA for any twelve (12) calendar month period to Fixed Charges for
such twelve (12) calendar month period to be less than 1.40:1.
9.03 Unencumbered Net Operating Income to Unsecured Interest
Expense. Borrower shall not permit the ratio of Unencumbered Net Operating
Income for any Fiscal Quarter to Unsecured Interest Expense for such Fiscal
Quarter to be less than 1.80:1.
9.04 Unencumbered Pool. Borrower shall not permit the ratio of (a)
the Unencumbered Asset Value to (b) outstanding Unsecured Debt to be less than
1.35:1.
9.05 Minimum Net Worth. Borrower will maintain a Net Worth of not
less than the Minimum Net Worth.
9.06 Permitted Holdings. Borrower's primary business will be the
ownership, operation, management and development of Designated Use Properties
and any other business activities of Borrower and its Subsidiaries will remain
incidental thereto. Notwithstanding the foregoing, Borrower and its Subsidiaries
may acquire, or maintain or engage in the following Permitted Holdings if and so
long as (i) the aggregate value of such Permitted Holdings, whether held
directly or indirectly by Borrower and its Subsidiaries, does not exceed, at any
time, twenty percent (20%) of Gross Asset Value for Borrower as a whole and (ii)
the value of each such Permitted Holding, whether held directly or indirectly by
Borrower and its Subsidiaries, does not exceed, at any time, the following
percentages of Borrower's Gross Asset Value:
72
Maximum Percentage
Permitted Holdings of Gross Asset Value
------------------ --------------------
Non-Designated Use Property (other than cash or Cash Equivalents) 10%
Securities issued by real estate investment trusts primarily engaged in the development, 5%
ownership, operation and management of Designated Use Properties
Designated Use Property Mortgages other than mortgage indebtedness which is either 10%
eliminated in the consolidation of the REIT, Borrower and the Subsidiaries or accounted
for as investments in real estate under GAAP
Designated Use Property Ownership Interests other than Controlled Ownership Interests 10%
Development Activity 20%
The value of the foregoing categories of Permitted Holdings shall be calculated
as follows: (i) the value of any Non-Designated Use Property (other than cash or
Cash Equivalents) or any Designated Use Property Ownership Interest (other than
a Controlled Ownership Interest) shall be calculated based upon its Adjusted
Asset Value; (ii) the value of any Security issued by a real estate investment
trust primarily engaged in the development, ownership, operation and management
of Designated Use Properties shall be equal to the lesser of (A) the acquisition
cost thereof or (B) the current market value thereof (such market value to be
determined in a manner reasonably acceptable to Agent); (iii) [intentionally
deleted]; (iv) the value of any Designated Use Property Mortgage (other than
mortgage indebtedness which is either eliminated in the consolidation of the
REIT, Borrower and the Subsidiaries or accounted for as an investment in real
estate under GAAP) shall be equal to the book value thereof; (v) the value of
Development Activity by Borrower or any Subsidiary shall be equal to the full
budgeted cost thereof; and (vi) the value of any Development Activity by an
Investment Affiliate shall be equal to the greater of (A) Borrower's pro rata
share of the full budgeted cost thereof based upon its percentage of equity
ownership, or (B) Borrower's pro rata share of the full budgeted cost thereof
based upon Borrower's economic interest in the project (as determined by
Borrower in a manner reasonably satisfactory to Agent).
9.07 Calculation. Each of the foregoing ratios and financial
requirements shall be calculated as of the last day of each Fiscal Quarter, but
shall be satisfied at all times. Calculations of such ratios for a "twelve (12)
calendar month period" shall be made for the twelve (12) calendar month period
ending on the last day of the applicable Fiscal Quarter.
ARTICLE X.
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.01 Events of Default. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
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(a) Failure to Make Payments When Due. (i) The failure to pay in
full any amount due on the Termination Date; (ii) the failure to pay in full any
principal when due; (iii) the failure to pay in full any interest owing
hereunder or under any of the other Loan Documents within ten (10) days after
the due date thereof and, unless Agent has previously delivered two (2) or more
notices of payment default to Borrower during the term of this Agreement (in
which event the following notice shall not be required), Agent shall have given
Borrower written notice that Agent has not received such payment on or before
the date such payment was required to be made and Borrower shall have failed to
make such payment within five (5) days after receipt of such notice; or (iv) the
failure to pay in full any other payment required hereunder or under any of the
other Loan Documents, whether such payment is required to be made to Agent or to
some other Person, within ten (10) days after Agent gives Borrower written
notice that such payment is due and unpaid.
(b) Dividends. Borrower, MHC Trust or the REIT shall breach the
covenant set forth in Section 8.01(d).
(c) Breach of Financial Covenants. Borrower shall fail to satisfy
any covenant set forth in Article IX and such failure shall continue for forty
(40) days after Borrower's knowledge thereof.
(d) Other Defaults. Borrower, the REIT or any Agreement Party shall
fail duly and punctually to perform or observe any agreement, covenant or
obligation binding on Borrower, the REIT or any Agreement Party under this
Agreement or under any of the other Loan Documents (other than as described in
Section 7.01(e) or Sections 10.01(a), (b), (c), (e), (g) or (p)), and such
failure shall continue for thirty (30) days after written notice from Agent to
Borrower, the REIT or any Agreement Party (or (i) such lesser period of time as
is mandated by applicable Requirements of Law or (ii) such longer period of time
(but in no case more than ninety (90) days) as is reasonably required to cure
such failure if Borrower, the REIT, or such Agreement Party commences such cure
within such ninety (90) days and diligently pursues the completion thereof).
(e) Breach of Representation or Warranty. Any representation or
warranty made or deemed made by Borrower, the REIT or any Agreement Party to
Agent or any Lender herein or in any of the other Loan Documents or in any
statement, certificate or financial statements at any time given by Borrower
pursuant to any of the Loan Documents shall be false or misleading in any
material respect on the date as of which made and, with respect to any such
representation or warranty not known by Borrower at the time made or deemed made
to be false or misleading, the defect causing such representation or warranty to
be false or misleading is not removed within thirty (30) days after written
notice thereof from Agent to Borrower.
(f) Default as to Other Indebtedness. Borrower, the REIT, any
Subsidiary or any Investment Affiliate shall have defaulted under any Other
Indebtedness of such party (other than Non-Recourse Indebtedness) and as a
result thereof the holders of such Other Indebtedness shall have accelerated
such Other Indebtedness (other than Non-Recourse Indebtedness), if the aggregate
amount of such accelerated Other Indebtedness (to the extent of any recourse to
Borrower, the REIT or any Subsidiary), together with the aggregate amount of any
Other Indebtedness (other than Non-Recourse Indebtedness) of Borrower, the REIT,
any Subsidiary or any Investment Affiliate which has theretofore been
accelerated (to the extent of any recourse to
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Borrower, the REIT or any Subsidiary) is $10,000,000 or more.
(g) Involuntary Bankruptcy; Appointment of Receiver, etc.
(i) An involuntary case or other proceeding shall be commenced
against the REIT, Borrower, any Subsidiary, or any Agreement Party and the
petition shall not be dismissed within sixty (60) days after commencement
of the case, or a court having jurisdiction shall enter a decree or order
for relief in respect of the REIT, Borrower, any Subsidiary, or any
Agreement Party, as the case may be, in an involuntary case or other
proceeding, under any applicable bankruptcy, insolvency or other similar
law now or hereafter in effect; or any other similar relief shall be
granted under any applicable federal, state or foreign law; or
(ii) A decree or order of a court having jurisdiction in the
premises for the appointment of a receiver, liquidator, sequestrator,
trustee, custodian or other officer having similar powers over Borrower,
the REIT, any Subsidiary, or any Agreement Party, or over all or a
substantial part of the property of the REIT, Borrower, any Subsidiary, or
any Agreement Party shall be entered, or an interim receiver, trustee or
other custodian of the REIT, Borrower, any Subsidiary, or any Agreement
Party, or of all or a substantial part of the property of the REIT,
Borrower, any Subsidiary, or any Agreement Party shall be appointed or a
warrant of attachment, execution or similar process against any
substantial part of the property of the REIT, Borrower, any Subsidiary, or
any Agreement Party shall be issued and any such event shall not be
stayed, vacated, dismissed, bonded or discharged within sixty (60) days of
entry, appointment or issuance.
(h) Voluntary Bankruptcy; Appointment of Receiver, etc. The REIT,
Borrower, any Subsidiary, or any Agreement Party shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or shall
consent to the entry of an order for relief in an involuntary case, or to the
conversion of an involuntary case to a voluntary case, under any such law, or
shall consent to the appointment of or taking of possession by a receiver,
trustee or other custodian for all or a substantial part of its property; the
REIT, Borrower, any Subsidiary, or any Agreement Party shall make any assignment
for the benefit of creditors or shall be unable or fail, or admit in writing its
inability, to pay its debts as such debts become due; or the general partner(s)
or Board of Directors (or any committee thereof), as applicable, of the REIT,
Borrower, any Subsidiary, or any Agreement Party adopts any resolution or
otherwise authorizes any action to approve any of the foregoing.
(i) Judgments and Attachments. (i) Any money judgments (other than a
money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writs or warrants of attachment,
or similar processes involving an aggregate amount in excess of $5,000,000 shall
be entered or filed against the REIT, Borrower, any Subsidiary, or any Agreement
Party or their respective assets and shall remain undischarged, unvacated,
unbonded or unstayed for a period of thirty (30) days, or (ii) any judgment or
order of any court or administrative agency awarding material damages shall be
entered against the REIT, Borrower, any Subsidiary, or any Agreement Party in
any action under the Federal securities laws seeking rescission of the purchase
or sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all
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available appellate remedies and such judgment or order would have a Material
Adverse Effect.
(j) Dissolution. Any order, judgment or decree shall be entered
against the REIT, Borrower, or any Agreement Party decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or the REIT, Borrower, or any
Agreement Party shall otherwise dissolve or cease to exist.
(k) Loan Documents; Failure of Security or Subordination. Any Loan
Document shall cease to be in full force and effect or any Obligation shall be
subordinated or shall not have the priority contemplated by this Agreement or
the Loan Documents for any reason or any guarantor under any guaranty of all or
any portion of the Obligations shall at any time disavow or deny liability under
such guaranty in writing.
(l) ERISA Plan Assets. Any assets of Borrower, the REIT or any
Agreement Party shall constitute "assets" (within the meaning of 29 C.F.R. ss.
2510.3-101 or any successor regulation thereto) of an "employee benefit plan"
within the meaning of Section 3(3) of ERISA or a "plan" within the meaning of
Section 4975(e)(1) of the Internal Revenue Code or Borrower, the REIT or any
Agreement Party shall be an "employee benefit plan" as defined in Section 3(3)
of ERISA, a "multiemployer plan" as defined in Sections 4001(a)(3) or 3(37) of
ERISA, or a "plan" as defined in Section 4975(e)(1) of the Internal Revenue
Code.
(m) ERISA Prohibited Transaction. The Obligations, any of the Loan
Documents or the exercise of any of the Agent's or Lenders' rights in connection
therewith shall constitute a prohibited transaction under ERISA and/or the
Internal Revenue Code (which is not exempt from the restrictions of Section 406
of ERISA or Section 4975 of the Internal Revenue Code and the taxes and
penalties imposed by Section 4975 of the Internal Revenue Code and Section
502(i) of ERISA).
(n) ERISA Liabilities. (i) Any Termination Event occurs which will
or is reasonably likely to subject Borrower, the REIT, any Subsidiary, any
Agreement Party, any ERISA Affiliate thereof or any of them to a liability which
Agent reasonably determines will have a Material Adverse Effect; (ii) the plan
administrator of any Benefit Plan applies for approval under Section 412(d) of
the Internal Revenue Code for a waiver of the minimum funding standards of
Section 412(a) of the Internal Revenue Code and Agent reasonably determines that
the business hardship upon which the Section 412(d) waiver request was based
will or would reasonably be anticipated to subject Borrower, the REIT, any
Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of them
to a liability which Agent reasonably determines will have a Material Adverse
Effect; (iii) any Benefit Plan shall incur an "accumulated funding deficiency"
(as defined in Section 412 of the Internal Revenue Code or Section 302 of ERISA)
for which a waiver shall not have been obtained in accordance with the
applicable provisions of the Internal Revenue Code or ERISA which "accumulated
funding deficiency" will or would reasonably be anticipated to subject Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to a liability which the Agent reasonably determines will have a
Material Adverse Effect; (iv) Borrower, the REIT, any Subsidiary, any Agreement
Party, or any ERISA Affiliate thereof or any of them shall have engaged in a
transaction which is prohibited under Section 4975 of the Internal Revenue Code
or Section 406 of ERISA which will or would reasonably be anticipated to result
in the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any
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ERISA Affiliate thereof or any of them which the Agent reasonably determines
will have a Material Adverse Effect; (v) Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them shall fail to pay
when due an amount which it shall have become liable to pay to the PBGC, a Plan
or a trust established under Title IV of ERISA which failure will or would
reasonably be anticipated to result in the imposition of a liability on
Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate
thereof or any of them which the Agent reasonably determines will have a
Material Adverse Effect; (vi) a condition shall exist by reason of which the
PBGC would be entitled to obtain a decree adjudicating that a Benefit Plan must
be terminated or have a trustee appointed to administer such Plan which
condition will or would reasonably be anticipated to result in the imposition of
a liability on Borrower, the REIT, any Subsidiary, any Agreement Party, or any
ERISA Affiliate thereof or any of them which the Agent reasonably determines
will have a Material Adverse Effect; (vii) a Lien shall be imposed on any assets
of Borrower, the REIT, any Subsidiary, any Agreement Party, or any ERISA
Affiliate thereof or any of them in favor of the PBGC or a Plan which the Agent
reasonably determines will have a Material Adverse Effect; (viii) Borrower, the
REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any
of them shall suffer a partial or complete withdrawal from a Multiemployer Plan
or shall be in "default" (as defined in Section 4219(c)(5) of ERISA) with
respect to payments to a Multiemployer Plan resulting from a complete or partial
withdrawal (as described in Section 4203 or 4205 of ERISA) from such
Multiemployer Plan which will or would reasonably be anticipated to result in
the imposition of a liability on Borrower, the REIT, any Subsidiary, any
Agreement Party, or any ERISA Affiliate thereof or any of them which the Agent
reasonably determines will have a Material Adverse Effect; or (ix) a proceeding
shall be instituted by a fiduciary of any Multiemployer Plan against Borrower,
the REIT, any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or
any of them to enforce Section 515 of ERISA which will or would reasonably be
anticipated to result in the imposition of a liability on Borrower, the REIT,
any Subsidiary, any Agreement Party, or any ERISA Affiliate thereof or any of
them which the Agent reasonably determines will have a Material Adverse Effect.
(o) Solvency. Borrower, any Agreement Party or the REIT shall cease
to be Solvent.
(p) Board of Directors. During any 12-month period, individuals who
were directors of the REIT on the first day of such period shall not constitute
a majority of the board of directors of the REIT.
(q) Term Loan Agreement. An "Event of Default" as defined in the
Term Loan Agreement shall have occurred.
(r) WFB Revolving Credit Agreement. An "Event of Default" as defined
in the WFB Revolving Credit Agreement shall have occurred.
An Event of Default shall be deemed "continuing" until cured or
waived in writing in accordance with Section 12.05.
10.02 Rights and Remedies.
(a) Acceleration. Upon the occurrence of any Event of Default with
respect
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to Borrower described in the foregoing Section 10.01(g) or 10.01(h), the
Commitments (including the obligations of Swingline Lender and Issuing Lender)
shall automatically and immediately terminate and the unpaid principal amount of
and any and all accrued interest on the Loans and all of the other Obligations
shall automatically become immediately due and payable, with all additional
interest from time to time accrued thereon and without presentment, demand or
protest or other requirements of any kind (including without limitation
valuation and appraisement, diligence, presentment, notice of intent to demand
or accelerate or notice of acceleration), all of which are hereby expressly
waived by Borrower, and the obligations of Lenders to make any Loans hereunder
shall thereupon terminate; and upon the occurrence and during the continuance of
any other Event of Default, Agent shall, at the request of, or may, with the
consent of, Requisite Lenders, by written notice to Borrower, (i) declare that
the Commitments (including the obligations of Swingline Lender and Issuing
Lender) are terminated, whereupon the Commitments and the obligation of Lenders
to make any Loans hereunder shall immediately terminate, and/or (ii) declare the
unpaid principal amount of and any and all accrued and unpaid interest on the
Loans and all of the other Obligations to be, and the same shall thereupon be,
immediately due and payable with all additional interest from time to time
accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower. Upon
the occurrence of and during the continuance of an Event of Default, no
Agreement Party shall be permitted to make any distributions or dividends
without the prior written consent of Agent. Upon the occurrence of an Event of
Default or an acceleration of the Obligations, Agent and Lenders may exercise
all or any portion of the rights and remedies set forth in the Loan Documents.
(b) Access to Information. Notwithstanding anything to the contrary
contained in the Loan Documents, upon the occurrence of and during the
continuance of an Event of Default, Agent shall be entitled to request and
receive, by or through Borrower or appropriate legal process, any and all
information concerning the REIT, Borrower, any Subsidiary of Borrower, any
Investment Affiliate, any Agreement Party, or any property of any of them, which
is reasonably available to or obtainable by Borrower.
(c) Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower.
(d) Waivers, Amendments and Remedies. No delay or omission of Agent
or Lenders to exercise any right under any Loan Document shall impair such right
or be construed to be a waiver of any Event of Default or an acquiescence
therein, and any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in a writing signed by Agent
after obtaining written approval thereof or the signature thereon of those
Lenders required to approve such waiver, amendment or other variation, and then
only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to Agent and Lenders until the Obligations have been paid in
full, the Commitments have expired or terminated and this Agreement has been
terminated.
10.03 Rescission. If at any time after acceleration of the maturity
of the Loans,
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Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Unmatured Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.05, then by
written notice to Borrower, Requisite Lenders may elect, in the sole discretion
of Requisite Lenders to rescind and annul the acceleration and its consequences;
but such action shall not affect any subsequent Event of Default or Unmatured
Event of Default or impair any right or remedy in connection therewith. The
provisions of the preceding sentence are intended merely to bind Lenders to a
decision which may be made at the election of Requisite Lenders; they are not
intended to benefit Borrower and do not give Borrower the right to require
Lenders to rescind or annul any acceleration hereunder, even if the conditions
set forth herein are met.
10.04 Suspension of Lending. At any time during which an Unmatured
Event of Default exists pursuant to Section 10.01(c) or Section 10.01(d) and is
not cured (by improvement in the applicable financial measure by compliance with
the applicable financial covenant in such 40 day period or as provided in
Section 10.01(d)), Borrower shall have no right to receive any additional Loans.
ARTICLE XI.
AGENCY PROVISIONS
11.01 Appointment.
(a) Each Lender hereby designates and appoints ▇▇▇▇▇ Fargo as Agent
of such Lender under this Agreement and the Loan Documents, and each Lender
hereby irrevocably authorizes Agent to take such action, as contractual
representative, on its behalf under the provisions of this Agreement and the
Loan Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto. Agent
agrees to act as such on the express conditions contained in this Article XI.
(b) The provisions of this Article XI are solely for the benefit of
Agent and Lenders, and Borrower shall not have any rights to rely on or enforce
any of the provisions hereof. In performing its functions and duties under this
Agreement, Agent shall act solely as Agent of Lenders and does not assume and
shall not be deemed to have assumed any obligation toward or relationship of
agency or trust with or for Borrower.
11.02 Nature of Duties. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature. Subject
to the provisions of Sections 11.05 and 11.07, Agent shall administer the Loans
in the same manner as it administers its own loans. Agent shall not have by
reason of this Agreement a fiduciary relationship in respect of any Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied, is
intended or shall be construed to impose upon Agent any obligation in respect of
this Agreement or any of the Loan Documents except as expressly set forth herein
or therein. Each Lender shall make its own independent investigation of the
financial condition and affairs of the REIT, Borrower, the Subsidiaries, the
Investment Affiliates, and each Agreement Party in connection with the making
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and the continuance of the Loans hereunder and shall make its own assessment of
the creditworthiness of the REIT, Borrower, the Subsidiaries, the Investment
Affiliates, and each Agreement Party, and, except as specifically provided
herein, Agent shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter.
11.03 Loan Disbursements
(a) Promptly after receipt of a Notice of Borrowing for a Loan to be
made pursuant to Section 2.01, but in no event later than one (1) Business Day
prior to the proposed Funding Date for a Base Rate Loan or two (2) Business Days
prior to the proposed Funding Date for a LIBOR Loan, Agent shall notify each
Lender of the proposed Borrowing and the Funding Date set forth therein. Each
Lender shall make available to Agent (or the funding bank or entity designated
by Agent), the amount of such Lender's Pro Rata Share of such Borrowing in
immediately available funds not later than the times designated in Section
11.03(b). Unless Agent shall have been notified by any Lender prior to such time
for funding in respect of any Borrowing that such Lender does not intend to make
available to Agent such Lender's Pro Rata Share of such Borrowing, Agent may
assume that such Lender has made such amount available to Agent and Agent, in
its sole discretion, may, but shall not be obligated to, make available to
Borrower a corresponding amount. If such corresponding amount is not in fact
made available to Agent by such Lender on or prior to a Funding Date, such
Lender agrees to pay to Agent forthwith on demand such corresponding amount
together with interest thereon, for each day from the date such amount is made
available to Borrower until the date such amount is paid or repaid to Agent, at
the Federal Funds Rate. If such Lender shall pay to Agent such corresponding
amount, such amount so paid shall constitute such Lender's Pro Rata Share of
such Borrowing. If such Lender shall not pay to Agent such corresponding amount
after reasonable attempts are made by Agent to collect such amounts from such
Lender, Borrower agrees to repay to Agent forthwith on demand such corresponding
amount together with interest thereon, for each day from the date such amount is
made available to Borrower until the date such amount is repaid to Agent, at the
interest rate applicable thereto.
(b) Requests by Agent for funding by Lenders of Loans will be made
by telecopy. Each Lender shall make the amount of its Loan available to Agent in
Dollars and in immediately available funds, to such bank and account, in El
Segundo, California as Agent may designate, not later than 10:00 A.M.
(California time) on the Funding Date designated in the Notice of Borrowing with
respect to such Loan. Nothing in this Section 11.03(b) shall be deemed to
relieve any Lender of its obligation hereunder to make its Pro Rata Share of
Loans on any Funding Date, nor shall any Lender be responsible for the failure
of any other Lender to perform its obligations to make any Loan hereunder, and
the Commitment of any Lender shall not be increased or decreased as a result of
the failure by any other Lender to perform its obligation to make a Loan.
11.04 Distribution and Apportionment of Payments
(a) Subject to Section 11.04(b), payments actually received by Agent
for the account of Lenders shall be paid to them promptly after receipt thereof
by Agent, but in any event prior to 3:00 P.M. (California time) on the day of
receipt (if received by 11:00 A.M.
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(California time) on such day), or within one (1) Business Day thereafter (if
received after 11:00 A.M. (California time) on the day of receipt), provided
that Agent shall pay to such Lenders interest thereon at the Federal Funds Rate
from the Business Day on which such funds are required to be paid to Lenders by
Agent until such funds are actually paid in immediately available funds to such
Lenders. All payments of principal and interest in respect of outstanding Loans
(other than Swingline Loans), all payments of the fees described in this
Agreement (other than agency and arrangement fees described in Section 2.04(c)),
and all payments in respect of any other Obligations shall be allocated among
such of Lenders as are entitled thereto, in proportion to their respective Pro
Rata Shares or otherwise as provided herein. Agent shall promptly, but in any
event within two (2) Business Days (with interest thereon, if required pursuant
to this Section 11.04(a)), distribute to each Lender at its primary address set
forth on the appropriate counterpart signature page hereof or on the Assignment
and Assumption, or at such other address as a Lender may request in writing,
such funds as it may be entitled to receive, provided that Agent shall in any
event not be bound to inquire into or determine the validity, scope or priority
of any interest or entitlement of any Lender and may suspend all payments and
seek appropriate relief (including without limitation instructions from
Requisite Lenders, or all Lenders, as applicable, or an action in the nature of
interpleader) in the event of any doubt or dispute as to any apportionment or
distribution contemplated hereby. The order of priority herein is set forth
solely to determine the rights and priorities of Lenders as among themselves and
may at any time or from time to time be changed by Lenders as they may elect, in
writing in accordance with Section 12.05, without necessity of notice to or
consent of or approval by Borrower or any other Person.
(b) Notwithstanding any provision hereof to the contrary, until such
time as a Defaulting Lender has funded its Pro Rata Share of a Loan (other than
a Swingline Loan but including a Mandatory Borrowing) or draw on a Letter of
Credit which was previously a Non Pro Rata Loan, or all other Lenders have
received payment in full (whether by repayment or prepayment) of the principal
and interest due in respect of such Non Pro Rata Loan, all of the Obligations
owing to such Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior payment in full of
all principal, interest and fees in respect of all Non Pro Rata Loans in which
the Defaulting Lender has not funded its Pro Rata Share (such principal,
interest and fees being referred to as "Senior Loans"). All amounts paid by
Borrower and otherwise due to be applied to the Obligations owing to the
Defaulting Lender pursuant to the terms hereof shall be distributed by Agent to
the other Lenders in accordance with their respective Pro Rata Shares
(recalculated for purposes hereof to exclude the Defaulting Lender's
Commitment), until all Senior Loans have been paid in full. This provision
governs only the relationship among Agent, each Defaulting Lender, and the other
Lenders; nothing hereunder shall limit the obligation of Borrower to repay all
Loans in accordance with the terms of this Agreement. The provisions of this
section shall apply and be effective regardless of whether an Event of Default
occurs and is then continuing, and notwithstanding (i) any other provision of
this Agreement to the contrary, (ii) any instruction of Borrower as to its
desired application of payments or (iii) the suspension of such Defaulting
Lender's right to vote on matters which are subject to the consent or approval
of Requisite Lenders, Supermajority Lenders, or all Lenders. No Unused Facility
Fee shall accrue in favor of, or be payable to, such Defaulting Lender from the
date of any failure to fund Loans (other than Swingline Loans but including
Loans made pursuant to Mandatory Borrowings) or draws on Letters of Credit or
reimburse Agent for any Liabilities and Costs as herein provided until such
failure has been cured and, without limitation of other provisions set forth in
this Agreement,
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Agent shall be entitled to (i) collect interest from such Lender for the period
from the date on which the payment was due until the date on which the payment
is made at the Federal Funds Rate for each day during such period, (ii) withhold
or set off, and to apply to the payment of the defaulted amount and any related
interest, any amounts to be paid to such Defaulting Lender under this Agreement,
and (iii) bring an action or suit against such Defaulting Lender in a court of
competent jurisdiction to recover the defaulted amount and any related interest.
In addition, the Defaulting Lender shall indemnify, defend and hold Agent and
each of the other Lenders harmless from and against any and all Liabilities and
Costs plus interest thereon at the default rate set forth in the Loan Documents
for funds advanced by Agent or any other Lender on account of the Defaulting
Lender which they may sustain or incur by reason of or as a direct consequence
of the Defaulting Lender's failure or refusal to abide by its obligations under
this Agreement.
11.05 Rights, Exculpation, Etc. Neither Agent, any Affiliate of
Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender for any action taken or
omitted by them hereunder or under any of the Loan Documents, or in connection
herewith or therewith, except that Agent shall be liable for its gross
negligence or willful misconduct in the performance of its express obligations
hereunder. In the absence of gross negligence or willful misconduct, Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith pursuant to Section 11.04. Agent shall not be responsible to any
Lender for any recitals, statements, representations or warranties herein or for
the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement, or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party. Agent shall not be required to make any
inquiry concerning either the performance or observance of any of the terms,
provisions or conditions of this Agreement or any of the Loan Documents or the
financial condition of the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party, or the existence or possible existence of any
Unmatured Event of Default or Event of Default. Agent may at any time request
instructions from Lenders with respect to any actions or approvals which, by the
terms of this Agreement or of any of the Loan Documents, Agent is permitted or
required to take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of the Loan Documents until it
shall have received such instructions from Requisite Lenders or Supermajority
Lenders, as the case may be. Without limiting the foregoing, no Lender shall
have any right of action whatsoever against Agent as a result of Agent acting or
refraining from acting under this Agreement or any of the other Loan Documents
in accordance with the instructions of Requisite Lenders, Supermajority Lenders
or, where applicable, all Lenders. Agent shall promptly notify each Lender at
any time that the Requisite Lenders or Supermajority Lenders, as the case may
be, have instructed Agent to act or refrain from acting pursuant hereto.
11.06 Reliance. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents, telecopies or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including
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counsel for Borrower), independent public accountant and other experts selected
by it.
11.07 Indemnification. To the extent that Agent or Issuing Lender is
not reimbursed and indemnified by Borrower, Lenders will reimburse, within ten
(10) days after notice from Agent, and indemnify Agent and Issuing Lender for
and against any and all Liabilities and Costs which may be imposed on, incurred
by, or asserted against it (in its capacity as Agent or Issuing Lender) in any
way relating to or arising out of this Agreement or any of the other Loan
Documents or any action taken or omitted by Agent or Issuing Lender (in its
capacity as Agent or Issuing Lender) under this Agreement or any of the other
Loan Documents, in proportion to each Lender's Pro Rata Share, provided that no
Lender shall be liable for any portion of such Liabilities and Costs resulting
from Agent's or Issuing Lender's gross negligence or willful misconduct, bad
faith or fraud. The obligations of Lenders under this Section 11.07 shall
survive the payment in full of all Obligations and the termination of this
Agreement. In the event that after payment and distribution of any amount by
Agent to Lenders, any Lender or third party, including Borrower, any creditor of
Borrower or a trustee in bankruptcy, recovers from Agent any amount found to
have been wrongfully paid to Agent or disbursed by Agent to Lenders, then
Lenders, in proportion to their respective Pro Rata Shares, shall reimburse
Agent for all such amounts. Notwithstanding the foregoing, Agent shall not be
obligated to advance Liabilities and Costs and may require the deposit by each
Lender of its Pro Rata Share of any material Liabilities and Costs anticipated
by Agent before they are incurred or made payable.
11.08 Agent Individually. With respect to its Pro Rata Share of the
Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders", "Supermajority Lenders", or
any similar terms may include Agent in its individual capacity as a Lender, one
of the Requisite Lenders or one of the Supermajority Lenders, but Requisite
Lenders and Supermajority Lenders shall not include Agent solely in its capacity
as Agent. Agent and its Affiliates may accept deposits from, lend money to and
generally engage in any kind of banking, trust or other business with Borrower
or any of its Subsidiaries or Affiliates as if it were not acting as Agent
pursuant hereto.
11.09 Successor Agent; Resignation of Agent; Removal of Agent.
(a) Agent may resign from the performance of all its functions and
duties hereunder at any time by giving at least thirty (30) Business Days prior
written notice to Lenders and Borrower. In the event of a material breach of its
duties hereunder, the Agent may be removed at any time by all of the Lenders
(other than Agent) giving at least thirty (30) Business Days prior written
notice to Agent and Borrower. Such resignation or removal shall take effect upon
the acceptance by a successor Agent of appointment pursuant to clauses (b) and
(c) below or as otherwise provided below.
(b) Upon any such notice of resignation by or removal of Agent,
Requisite Lenders shall appoint a successor Agent with the consent of Borrower,
which shall not be unreasonably withheld or delayed (and approval from Borrower
shall not be required upon the occurrence and during the continuance of an Event
of Default). Any successor Agent must be a bank (i) the senior debt obligations
of which (or such Bank's parent's senior debt obligations) are rated not less
than Baa-1 by ▇▇▇▇▇'▇ Inc. or a comparable rating by a rating agency acceptable
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to Requisite Lenders, (ii) which has total assets in excess of Ten Billion
Dollars ($10,000,000,000) and (iii) which is a Lender as of the date of such
succession holding a Commitment without participants equal to at least ten
percent (10%) of the Facility. Agent hereby agrees to remit to any successor
Agent, a pro rata portion of any annual agent's fee received by Agent, in
advance, for the one-year period covered by such agent's fee based upon the
portion of such year then remaining.
(c) If a successor Agent shall not have been so appointed within
said thirty (30) Business Day period, the retiring or removed Agent, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), shall then appoint a successor
Agent who shall meet the requirements described in subsection (b) above and who
shall serve as Agent until such time, if any, as Requisite Lenders, with the
consent of Borrower, which may not be unreasonably withheld or delayed (and
which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), appoint a successor Agent as
provided above.
(d) Any Person succeeding ▇▇▇▇▇ Fargo (or any successor to ▇▇▇▇▇
Fargo) as Agent hereunder shall also serve as Issuing Lender and Swingline
Lender; provided, however, that the issuer of any Letter of Credit outstanding
at the time of such succession shall retain all of the rights and protections of
Issuing Lender hereunder with respect to such Letter of Credit.
11.10 Consents and Approvals.
(a) Each Lender authorizes and directs Agent to enter into the Loan
Documents other than this Agreement for the benefit of Lenders. Each Lender
agrees that any action taken by Agent at the direction or with the consent of
Requisite Lenders or the Supermajority Lenders and any action taken by Agent not
requiring consent by Requisite Lenders, Supermajority Lenders, or all Lenders in
accordance with the provisions of this Agreement or any Loan Document, and the
exercise by Agent at the direction or with the consent of Requisite Lenders or
the Supermajority Lenders of the powers set forth herein or therein, together
with such other powers as are reasonably incidental thereto, shall be authorized
and binding upon all Lenders, except for actions specifically requiring the
approval of all Lenders. All communications from Agent to Lenders requesting
Lenders' determination, consent, approval or disapproval (i) shall be given in
the form of a written notice to each Lender, (ii) shall be accompanied by a
description of the matter or item as to which such determination, approval,
consent or disapproval is requested, or shall advise each Lender where such
matter or item may be inspected, or shall otherwise describe the matter or issue
to be resolved, (iii) shall include, if reasonably requested by a Lender and to
the extent not previously provided to such Lender, written materials and a
summary of all oral information provided to Agent by Borrower in respect of the
matter or issue to be resolved, and (iv) shall include Agent's recommended
course of action or determination in respect thereof. Each Lender shall reply
promptly, but in any event within fifteen (15) Business Days after receipt of
the request therefor from Agent (the "Lender Reply Period"). Unless a Lender
shall give written notice to Agent that it objects to the recommendation or
determination of Agent (together with a written explanation of the reasons
behind such objection) within the Lender Reply Period, such Lender shall be
deemed to have approved of or consented to such recommendation or determination.
With respect to decisions requiring the approval of Requisite Lenders,
Supermajority Lenders or all Lenders, Agent shall
84
submit its recommendation or determination for approval of or consent to such
recommendation or determination to all Lenders and upon receiving the required
approval or consent shall follow the course of action or determination
recommended to Lenders by Agent or such other course of action recommended by
Requisite Lenders or Supermajority Lenders, as the case may be, and each
non-responding Lender shall be deemed to have concurred with such recommended
course of action. The following amendments, modifications or waivers shall
require the consent of the Requisite Lenders:
(i) Waiver of Sections 8.01(h) or 8.02(f);
(ii) Acceleration following an Event of Default pursuant to Section
10.02(a) (except for any Event of Default pursuant to Sections 10.01(g) or
10.01(h)) or rescission of such acceleration pursuant to Section 10.03;
(iii) Approval of the exercise of remedies requiring the consent of
the Requisite Lenders under Section 10.02(a);
(iv) Appointment of a successor Agent in accordance with Sections
11.09(b) and (c);
(v) Disapproval of any Property as a Qualifying Unencumbered
Property.
(b) Except for amendments, modifications and waivers requiring the
consent of all Lenders pursuant to Section 12.05(b), the consent of the
Supermajority Lenders shall be required to amend or modify Sections 9.01, 9.02,
9.03, 9.04, 9.05 or 10.01(a) or to waive any requirement thereof or to amend or
modify this Section 11.10(b).
(c) In addition to the required consents or approvals referred to in
Section 12.05, Agent may at any time request instructions from Requisite Lenders
with respect to any actions or approvals which, by the terms of this Agreement
or of any of the Loan Documents, Agent is permitted or required to take or to
grant without instructions from any Lenders, and if such instructions are
promptly requested, Agent shall be absolutely entitled to refrain from taking
any action or to withhold any approval and shall not be under any liability
whatsoever to any Person for refraining from taking any action or withholding
any approval under any of the Loan Documents until it shall have received such
instructions from Requisite Lenders. Without limiting the foregoing, no Lender
shall have any right of action whatsoever against Agent as a result of Agent
acting or refraining from acting under this Agreement, any of the other Loan
Documents in accordance with the instructions of Requisite Lenders or, where
applicable, Supermajority Lenders or all Lenders. Agent shall promptly notify
each Lender at any time that the Requisite Lenders or Supermajority Lenders have
instructed Agent to act or refrain from acting pursuant hereto.
11.11 [Intentionally Omitted]
11.12 [Intentionally Omitted]
11.13 Assignments and Participations.
(a) Subject to the provisions of Section 11.13(j), after first
obtaining the
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approval of Agent and Borrower, which approval will not be unreasonably withheld
(and which approval from Borrower shall not be required upon the occurrence and
during the continuance of an Event of Default), each Lender may assign to one or
more Eligible Assignees all or a portion of its rights and obligations under
this Agreement in accordance with the provisions of this Section (including
without limitation all or a portion of its Commitment and the Loans owing to
it); provided, however, that (i) each such assignment shall be of a constant,
and not a varying, percentage of the assigning Lender's rights and obligations
under this Agreement and the assignment shall cover the same percentage of such
Lender's Commitment and Loans, (ii) unless Agent and Borrower otherwise consent
(which consent of Borrower shall not be required upon the occurrence and during
the continuance of an Event of Default), the aggregate amount of the Commitment
of the assigning Lender being assigned to an Eligible Assignee that is not
already a Lender hereunder (provided such Lender was also a Lender on the
Closing Date) pursuant to each such assignment shall in no event be less than
Five Million Dollars ($5,000,000) and shall be an integral multiple of One
Million Dollars ($1,000,000), (iii) the parties to each such assignment shall
execute and deliver to Agent, for its approval and acceptance, an Assignment and
Assumption and (iv) Agent shall receive from the assignor or assignors for its
sole account a processing fee of Three Thousand Dollars ($3,000). Upon such
execution, delivery, approval and acceptance, and upon the effective date
specified in the applicable Assignment and Assumption, (A) the assignee
thereunder shall be a party hereto and, to the extent that rights and
obligations hereunder have been validly and effectively assigned to it pursuant
to such Assignment and Assumption, have the rights and obligations of a Lender
hereunder and (B) the Lender-assignor thereunder shall, to the extent that
rights and obligations hereunder have been validly and effectively assigned by
it pursuant to such Assignment and Assumption, relinquish its rights and be
released from its obligations under this Agreement.
(b) By executing and delivering an Assignment and Assumption, the
Lender-assignor thereunder and the assignee thereunder confirm to and agree with
each other and the other parties hereto as follows: (i) other than as provided
in such Assignment and Assumption, such assigning Lender makes no representation
or warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
or any other instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of the REIT, Borrower,
any Subsidiary, any Investment Affiliate, or any Agreement Party or the
performance or observance by the REIT, Borrower, any Subsidiary, any Investment
Affiliate, or any Agreement Party of any of their respective obligations under
any Loan Document or any other instrument or document furnished pursuant hereto;
(iii) such assignee confirms that it has received a copy of this Agreement,
together with copies of the financial statements referred to in Article VI or
delivered pursuant to Article VI to the date of such assignment and such other
Loan Documents and other documents and information as it has deemed appropriate
to make its own credit analysis and decision to enter into such Assignment and
Assumption; (iv) such assignee will, independently and without reliance upon
Agent, such assigning Lender or any other Lender and based on such documents and
information as it shall deem appropriate at the time, continue to make its own
credit decisions in taking or not taking action under this Agreement; (v) such
assignee appoints and authorizes Agent to take such action as Agent on its
behalf and to exercise such powers under this Agreement and the other Loan
Documents as are delegated to Agent by the terms hereof and thereof, together
with such powers
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as are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
(c) Agent shall maintain at its address referred to on the
counterpart signature pages hereof a copy of each Assignment and Assumption
delivered to and accepted by it and shall record the names and addresses of each
Lender and the Commitment of, and principal amount of the Loans owing to, such
Lender from time to time. Borrower, Agent and Lenders may treat each Person
whose name is so recorded as a Lender hereunder for all purposes of this
Agreement.
(d) Upon its receipt of an Assignment and Assumption executed by an
assigning Lender and an assignee, Agent shall, if such Assignment and Assumption
has been properly completed and is in substantially the form of Exhibit A, (i)
accept such Assignment and Assumption, (ii) record the information contained
therein and (iii) give prompt notice thereof to Borrower. Upon request, Borrower
will execute and deliver to Agent an appropriate replacement promissory note or
replacement promissory notes in favor of each assignee (and assignor, if such
assignor is retaining a portion of its Commitment and Loans) reflecting such
assignee's (and assignor's) Pro Rata Share(s) of the Facility. Upon execution
and delivery of such replacement promissory notes, the original promissory note
or notes evidencing all or a portion of the Commitments and Loans being assigned
shall be canceled and returned to Borrower.
(e) Each Lender may sell participations to one or more banks,
finance companies, insurance or other entities in or to all or a portion of its
rights and obligations under this Agreement (including without limitation all or
a portion of its Commitment and the Loans owing to it); provided, however, that
(i) such Lender's obligations under this Agreement (including without limitation
its Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender
shall remain solely responsible to the other parties hereto for the performance
of such obligations, (iii) Borrower, Agent and the other Lenders shall continue
to deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
that such Participant may have the contractual right in the applicable
participation agreement to prevent (A) increases in the Facility, (B) extensions
of the Maturity Date (except pursuant to Article III), (C) decreases in the
interest rates described in this Agreement, and (D) a release of the REIT
Guaranty.
(f) Borrower will use reasonable efforts to cooperate with Agent and
Lenders in connection with the assignment of interests under this Agreement or
the sale of participations herein.
(g) Anything in this Agreement to the contrary notwithstanding, and
without the need to comply with any of the formal or procedural requirements of
this Agreement, including Section 11.13, any Lender may at any time and from
time to time pledge and assign all or any portion of its rights under all or any
of the Loan Documents to a Federal Reserve Bank; provided that no such pledge or
assignment shall release such Lender from its obligations thereunder.
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(h) Anything in this Agreement to the contrary notwithstanding, any
Lender may assign all or any portion of its rights and obligations under this
Agreement to a Lender Affiliate of such Lender without first obtaining the
approval of Agent and Borrower, provided that (i) at the time of such assignment
such Lender is not a Defaulting Lender, (ii) such Lender gives Agent and
Borrower at least fifteen (15) days prior written notice of any such assignment;
(iii) the parties to each such assignment execute and deliver to Agent an
Assignment and Assumption, and (iv) Agent receives from assignor for its sole
account a processing fee of Three Thousand Dollars ($3,000).
(i) No Lender shall be permitted to assign, or sell a participation
interest in, all or any portion of its rights and obligations under this
Agreement to Borrower or any Affiliate of Borrower.
(j) Anything in this Agreement to the contrary notwithstanding, so
long as no Event of Default shall have occurred and be continuing, no Lender
shall be permitted to enter into an assignment of its rights and obligations
hereunder which would result in such Lender holding a Commitment of less than
Ten Million Dollars ($10,000,000).
11.14 Ratable Sharing. Subject to Sections 11.03 and 11.04, Lenders
agree among themselves that (i) with respect to all amounts received by them
which are applicable to the payment of the Obligations, equitable adjustment
will be made so that, in effect, all such amounts will be shared among them
ratably in accordance with their Pro Rata Shares, whether received by voluntary
payment, by the exercise of the right of set-off or banker's lien, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim, set-off, banker's lien or otherwise, receive
payment of a proportion of the aggregate amount of the Obligations held by it
which is greater than its Pro Rata Share of the payments on account of the
Obligations, the one receiving such excess payment shall purchase, without
recourse or warranty, an undivided interest and participation (which it shall be
deemed to have done simultaneously upon the receipt of such payment) in such
Obligations owed to the others so that all such recoveries with respect to such
Obligations shall be applied ratably in accordance with their Pro Rata Shares;
provided, that if all or part of such excess payment received by the purchasing
party is thereafter recovered from it, those purchases shall be rescinded and
the purchase prices paid for such participations shall be returned to that party
to the extent necessary to adjust for such recovery, but without interest except
to the extent the purchasing party is required to pay interest in connection
with such recovery. Borrower agrees that any Lender so purchasing a
participation from another Lender pursuant to this Section 11.14 may, to the
fullest extent permitted by law, exercise all its rights of payment (including,
subject to Section 12.04, the right of set-off) with respect to such
participation as fully as if such Lender were the direct creditor of Borrower in
the amount of such participation.
11.15 Delivery of Documents. Agent shall as soon as reasonably
practicable distribute to each Lender at its primary address set forth on the
appropriate counterpart signature page hereof or at such other address as a
Lender may request in writing, (i) all documents to which such Lender is a party
or of which such Lender is a beneficiary and (ii) all documents of which Agent
receives copies from Borrower for distribution to Lenders pursuant to Sections
6.01 and 12.07. In addition, within ten (10) Business Days after receipt of a
request in writing from a Lender for written information or documents provided
by or prepared by Borrower, the REIT or
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any Agreement Party, Agent shall deliver such written information or documents
to such requesting Lender if Agent has possession of such written information or
documents in its capacity as Agent or as a Lender.
11.16 Notice of Events of Default. Except as expressly provided in
this Section 11.16, Agent shall not be deemed to have knowledge or notice of the
occurrence of any Unmatured Event of Default or Event of Default (other than
nonpayment of principal of or interest on the Loans) unless Agent has received
notice in writing from a Lender or Borrower referring to this Agreement or the
other Loan Documents, describing such event or condition and expressly stating
that such notice is a notice of an Unmatured Event of Default or Event of
Default. Should Agent receive such notice of the occurrence of an Unmatured
Event of Default or Event of Default, or should Agent send Borrower a notice of
Unmatured Event of Default or Event of Default, Agent shall promptly give notice
thereof to each Lender.
11.17 Administrative Agent's Reliance. Notwithstanding any other
provisions of this Agreement or any other Loan Documents, neither the Agent nor
any of its directors, officers, agents, employees or counsel shall be liable for
any action taken or not taken by it under or in connection with this Agreement
or any other Loan Document, except for its or their own gross negligence or
willful misconduct in connection with its duties expressly set forth herein or
therein. Without limiting the generality of the foregoing, the Agent may consult
with legal counsel (including its own counsel or counsel for the Borrower, the
REIT, MHC Trust or T1000 Trust), independent public accountants and other
experts selected by it and shall not be liable for any action taken or omitted
to be taken in good faith by it in accordance with the advice of such counsel,
accountants or experts. Neither the Agent nor any of its directors, officers,
agents, employees or counsel: (a) makes any warranty or representation to any
Lender or any other Person nor shall be responsible to any Lender or any other
Person for any statement, warranty or representation made or deemed made by the
Borrower, the REIT, MHC Trust or T1000 Trust or any other Person in or in
connection with this Agreement or any other Loan Document; (b) shall have any
duty to ascertain or to inquire as to the performance or observance of any of
the terms, covenants or conditions of this Agreement or any other Loan Document
or the satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrower or other Persons or inspect the property,
books or records of the Borrower or any other Person; (c) shall be responsible
to any Lender for the due execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document,
any other instrument or document furnished pursuant thereto or any collateral
covered thereby or the perfection or priority of any lien in favor of the Agent
on behalf of the Lenders in any such collateral; (d) shall have any liability in
respect of any recitals, statements, certifications, representations or
warranties contained in any of the Loan Documents or any other document,
instrument, agreement, certificate or statement delivered in connection
therewith; and (e) shall incur any liability under or in respect of this
Agreement or any other Loan Document by acting upon any notice, consent,
certificate or other instrument or writing (which may be by telephone, telecopy
or electronic mail) believed by it to be genuine and signed, sent or given by
the proper party or parties. The Agent may execute any of its duties under the
Loan Documents by or through agents, employees or attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any agent or
attorney-in-fact that it selects in the absence of gross negligence or willful
misconduct.
11.18 Decisions. Each Lender expressly acknowledges and agrees that
neither
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the Agent nor any of its officers, directors, employees, agents, counsel,
attorneys in fact or other affiliates has made any representations or warranties
to such Lender and that no act by the Agent hereafter taken, including any
review of the affairs of the Borrower, the REIT, MHC Trust or T1000 Trust or any
other Subsidiary or Affiliate, shall be deemed to constitute any such
representation or warranty by the Agent to any Lender. Each Lender acknowledges
that it has, independently and without reliance upon the Agent, any other Lender
or counsel to the Agent, or any of their respective officers, directors,
employees, agents or counsel, and based on the financial statements of the
Borrower, the REIT, MHC Trust or T1000 Trust, the other Subsidiaries and other
Affiliates, and inquiries of such Persons, its independent due diligence of the
business and affairs of the Borrower, the REIT, MHC Trust or T1000 Trust, the
other Subsidiaries and other Persons, its review of the Loan Documents, the
legal opinions required to be delivered to it hereunder, the advice of its own
counsel and such other documents and information as it has deemed appropriate,
made its own credit and legal analysis and decision to enter into this Agreement
and the transactions contemplated hereby. Each Lender also acknowledges that it
will, independently and without reliance upon the Agent, any other Lender or
counsel to the Agent or any of their respective officers, directors, employees
and agents, and based on such review, advice, documents and information as it
shall deem appropriate at the time, continue to make its own decisions in taking
or not taking action under the Loan Documents. The Agent shall not be required
to keep itself informed as to the performance or observance by the Borrower, the
REIT, MHC Trust, T1000 Trust or any Subsidiary or Investment Affiliate of the
Loan Documents or any other document referred to or provided for therein or to
inspect the properties or books of, or make any other investigation of, the
Borrower, the REIT, MHC Trust, T1000 Trust or any other Subsidiary. Except for
notices, reports and other documents and information expressly required to be
furnished to the Lenders by the Agent under this Agreement or any of the other
Loan Documents, the Agent shall have no duty or responsibility to provide any
Lender with any credit or other information concerning the business, operations,
property, financial and other condition or creditworthiness of the Agent or any
of its officers, directors, employees, agents, attorneys in fact or other
Affiliates. Each Lender acknowledges that the Agent's legal counsel in
connection with the transactions contemplated by this Agreement is only acting
as counsel to the Agent and is not acting as counsel to such Lender.
ARTICLE XII.
MISCELLANEOUS
12.01 Expenses
(a) Generally. Borrower agrees, within thirty (30) days after
receipt of a written notice from the Agent, to pay or reimburse Agent for all of
Agent's reasonable costs and expenses incurred by Agent at any time (whether
prior to, on or after the date of this Agreement) in connection with: (A) the
negotiation, preparation and execution of this Agreement and the other Loan
Documents and any amendments or waivers with respect hereto requested by
Borrower, including, without limitation, the reasonable fees, expenses and
disbursements of Agent's outside counsel incurred in connection therewith; (B)
the making of the Loans and (C) the collection or enforcement by Agent of any of
the Obligations, including, without limitation, reasonable attorneys' fees and
costs incurred in connection therewith.
(b) After Event of Default. Borrower further agrees to pay, or
reimburse
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Agent and Lenders, for all reasonable costs and expenses, including without
limitation reasonable attorneys' fees and disbursements incurred by Agent or
Lenders after the occurrence of an Event of Default (i) in enforcing any
Obligation or exercising or enforcing any other right or remedy available by
reason of such Event of Default; (ii) in connection with any refinancing or
restructuring of the credit arrangements provided under this Agreement in the
nature of a "work-out" or in any insolvency or bankruptcy proceeding; (iii) in
commencing, defending or intervening in any litigation or in filing a petition,
complaint, answer, motion or other pleadings in any legal proceeding relating to
Borrower, the REIT or any Agreement Party and related to or arising out of the
transactions contemplated hereby; (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise); (v) in
protecting, preserving, collecting, leasing, selling, taking possession of, or
liquidating any such collateral; or (vi) attempting to enforce or enforcing any
rights under the Loan Documents; provided, however, that the attorneys' fees and
disbursements for which Borrower is obligated under this subsection (b) shall be
limited to the reasonable non-duplicative fees and disbursements of counsel for
Agent and counsel for all Lenders as a group. For purposes of this Section
12.01(b), (i) counsel for Agent shall mean a single outside law firm
representing Agent plus any additional law firms providing special local law
representation in connection with the enforcement of the Loan Documents, and
(ii) counsel for all Lenders as a group shall mean a single outside law firm
representing such Lenders as a group.
12.02 Indemnity
(a) Generally. Borrower shall indemnify and defend Agent, Swingline
Lender, Issuing Lender and each Lender and their respective affiliates,
participants, officers, directors, employees and agents (each an "Indemnitee")
against, and shall hold each such Indemnitee harmless from, any and all losses,
damages (whether general, punitive or otherwise), liabilities, claims, causes of
action (whether legal, equitable or administrative), judgments, court costs and
legal or other expenses (including reasonable attorneys' fees) which such
Indemnitee may suffer or incur: (i) in connection with claims made by third
parties against such Indemnitee for losses or damages suffered by such third
party as a result of (A) such Indemnitee's performance of this Agreement or any
of the other Loan Documents, including without limitation such Indemnitee's
exercise or failure to exercise any rights, remedies or powers in connection
with this Agreement or any of the other Loan Documents or (B) the failure by
Borrower, the REIT or any Agreement Party to perform any of their respective
obligations under this Agreement or any of the other Loan Documents as and when
required hereby or thereby, including without limitation any failure of any
representation or warranty of Borrower, the REIT or any Agreement Party to be
true and correct; (ii) in connection with any claim or cause of action of any
kind by any Person to the effect that such Indemnitee is in any way responsible
or liable for any act or omission by Borrower, the REIT or any Agreement Party,
whether on account of any theory of derivative liability or otherwise, (iii) in
connection with the past, present or future environmental condition of any
Property owned by Borrower, the REIT, Subsidiary or any Agreement Party, the
presence of asbestos-containing materials at any such Property, the presence of
Contaminants in groundwater at any such Property, or the Release or threatened
Release of any Contaminant into the environment from any such Property; or (iv)
in connection with any claim or cause of action of any kind by any Person which
would have the effect of denying such Indemnitee the full benefit or protection
of any provision of this Agreement or any of the other Loan Documents.
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(b) ERISA. Without limitation of the provisions of subsection (a)
above, Borrower shall indemnify and hold each Indemnitee free and harmless from
and against all loss, costs (including reasonable attorneys' fees and expenses),
expenses, taxes, and damages (including consequential damages) such Indemnitee
may suffer or incur by reason of the investigation, defense and settlement of
claims and in obtaining any prohibited transaction exemption under ERISA or the
Internal Revenue Code necessary in such Indemnitee's reasonable judgment by
reason of the inaccuracy of the representations and warranties set forth in the
first paragraph of Section 5.01(s) or a breach of the provisions set forth in
the last paragraph of Section 8.01(f).
(c) Exceptions; Limitations. Notwithstanding anything to the
contrary set forth in this Section 12.02, Borrower shall have no obligation to
any Indemnitee hereunder with respect to (i) any intentional tort, fraud or act
of gross negligence or bad faith which any Indemnitee is personally determined
by the judgment of a court of competent jurisdiction (sustained on appeal, if
any) to have committed, (ii) any liability of such Indemnitee to any third party
based upon contractual obligations of such Indemnitee owing to such third party
which are not expressly set forth in the Loan Documents or (iii) violations of
Environmental Laws relating to a Property which are caused by the act or
omission of such Indemnitee after such Indemnitee takes possession of such
Property and which would not have occurred if such Indemnitee had exercised
reasonable care under the circumstances. In addition, the indemnification set
forth in this Section 12.02 in favor of any officer, director, partner, employee
or agent of Agent, Swingline Lender, Issuing or any Lender shall be solely in
their respective capacities as such officer, director, partner, employee or
agent. Such indemnification in favor of any affiliate of Agent, Swingline
Lender, Issuing Lender or any Lender shall be solely in its capacity as the
provider of services to Agent, Swingline Lender, Issuing Lender or such Lender
in connection with this Agreement, and such indemnification in favor of any
participant of Agent or any Lender shall be solely in its capacity as a
participant in the Commitments and the Loans.
(d) Payment; Survival. Borrower shall pay any amount owing under
this Section 12.02 within thirty (30) days after written demand therefor by the
applicable Indemnitee together with reasonable supporting documentation
therefor. The indemnity set forth in this Section 12.02 shall survive the
payment of all amounts payable pursuant to, and secured by, this Agreement and
the other Loan Documents. Payment by any Indemnitee shall not be a condition
precedent to the obligations of Borrower under this Section 12.02. To the extent
that any indemnification obligation set forth in this Section 12.02 may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of the applicable
indemnified matter.
12.03 Change in Accounting Principles. Except as otherwise provided
herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower, any Subsidiary, any Investment Affiliate, or any Agreement Party with
the agreement of its independent certified public accountants and such changes
result in a change in the method of calculation of any of the financial
covenants, standards or terms found herein, the parties hereto agree to enter
into
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negotiations in order to amend such provisions so as to equitably reflect such
changes with the desired result that the criteria for evaluating the financial
condition of the REIT, on a consolidated basis, shall be the same after such
changes as if such changes had not been made; provided, however, that no change
in GAAP that would affect the method of calculation of any of the financial
covenants, standards or terms shall be given effect in such calculations until
such provisions are amended, in a manner satisfactory to Agent and all Lenders,
to so reflect such change in accounting principles.
12.04 Setoff. In addition to any Liens granted to Agent and any
rights now or hereafter granted under applicable law and not by way of
limitation of any such Lien or rights, upon the occurrence and during the
continuance of any Event of Default, Agent and each Lender are hereby authorized
by Borrower at any time or from time to time, with concurrent notice to
Borrower, or to any other Person (any such notice being hereby expressly waived)
to set off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured but not including trust accounts) and
any other indebtedness at any time held or owing by Agent or such Lender solely
to or for the credit or the account of Borrower against and on account of the
Obligations of Borrower to Agent or such Lender including but not limited to all
Loans and all claims of any nature or description arising out of or connected
with this Agreement or any of the other Loan Documents, irrespective of whether
or not (a) Agent or such Lender shall have made any demand hereunder or (b)
Agent shall have declared the principal of and interest on the Loans and other
amounts due hereunder to be due and payable as permitted by Article X and
although said obligations and liabilities, or any of them, may be contingent or
unmatured.
12.05 Amendments and Waivers. No amendment or modification of any
provision of this Agreement shall be effective without the written agreement of
Requisite Lenders (after notice to all Lenders) as provided in Section 11.10(a)
and Borrower provided that the agreement of Requisite Lenders shall not be
required for amendments or modifications that are purely of a clerical nature or
that correct a manifest error and no termination or waiver of any such provision
of this Agreement (including without limitation any waiver of an Event of
Default which does not specifically require the consent of all Lenders), or
consent to any departure by Borrower therefrom, shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders) as provided in Section 11.10(a), which Requisite Lenders shall have the
right to grant or withhold at their sole discretion, except that the amendments,
modifications or waivers specified in Section 11.10(b) shall require the consent
of the Supermajority Lenders and the following amendments, modifications or
waivers shall require the consent of all Lenders (other than Section 12.05(j)
which shall require the consent of all Lenders other than Agent):
(a) Increasing the Commitments or any Lender's Commitment (excluding
any increase as a result of an assignment of commitments under Section 11.13);
(b) Changing the principal amount or final maturity of the Loans;
(c) Reducing or increasing the interest rates applicable to the
Loans (other than Swingline Loans);
(d) Reducing the rates on which fees payable pursuant hereto are
determined;
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(e) Forgiving or delaying any amount payable under Article II (other
than late fees);
(f) Changing the definition of "Requisite Lenders," "Loan
Availability," "Supermajority Lenders," or "Pro Rata Shares";
(g) Changing any provision contained in Section 12.05;
(h) Releasing any obligor under any Loan Document, unless such
release is otherwise required by the terms of this Agreement or any other Loan
Document;
(i) Issuing a Letter of Credit for a term extending beyond the
Maturity Date;
(j) Removal of Agent for material breach of its duties under this
Agreement in accordance with Section 11.09(a); and
(k) Modifying or waiving any other provision herein which
specifically requires the consent of all Lenders.
Notwithstanding anything to the contrary contained in this Agreement, Borrower
shall have no right to consent to any amendment, modification, termination or
waiver of any provision of Article XI hereof; provided, however, that no
amendment, modification, termination or waiver of Section 11.09(b), 11.09(c),
11.10(a), or 11.13 (except subsection (i) thereof) which has an adverse effect
on Borrower or Borrower's rights hereunder shall be effective without the
written concurrence of Borrower. Agent and Lenders further acknowledge and agree
that the remaining provisions of Article XI are intended to and shall continue
to address only the rights and obligations of Agent and Lenders amongst each
other and do not and shall not impose obligations or restrictions upon Borrower
or result in any way in the loss of any rights, claims or defenses of Borrower.
No amendment, modification, termination or waiver of any provision of Article XI
hereof or any other provision referring to any Agent, Swingline Lender or
Issuing Lender shall be effective without the written concurrence of the Agent,
Swingline Lender or Issuing Lender, as applicable. Any waiver or consent shall
be effective only in the specific instance and for the specific purpose for
which it was given. No notice to or demand on Borrower in any case shall entitle
Borrower to any other further notice or demand in similar or other
circumstances. Any amendment, modification, termination, waiver or consent
effected in accordance with this Section shall be binding on each assignee,
transferee or recipient of Agent's powers, functions or duties or any Lender's
Commitment under this Agreement or the Loans at the time outstanding.
12.06 Independence of Covenants. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or Unmatured Event of Default if
such action is taken or condition exists.
12.07 Notices and Delivery. Unless otherwise specifically provided
herein, any consent, notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied or sent
by courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon
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receipt of a telecopy or if deposited in the United States mail (registered or
certified, with postage prepaid and properly addressed) upon receipt or refusal
to accept delivery. Notices to Agent, Swingline Lender or Issuing Lender
pursuant to Article II shall not be effective until received by Agent, Swingline
Lender or Issuing Lender, as applicable. For the purposes hereof, the addresses
of the parties hereto (until notice of a change thereof is delivered as provided
in this Section 12.07) shall be as set forth below each party's name on the
signature pages hereof, or, as to each party, at such other address as may be
designated by such party in a written notice to all of the other parties. All
deliveries to be made to Agent for distribution to the Lenders shall be made to
Agent at the addresses specified for notice on the signature page hereto and, in
addition, a sufficient number of copies of each such delivery shall be delivered
to Agent for delivery to each Lender at the address specified for deliveries on
the signature page hereto or such other address as may be designated by Agent or
Lenders in a written notice.
12.08 Survival of Warranties, Indemnities and Agreements. All
agreements, representations, warranties and indemnities made or given herein or
pursuant hereto shall survive the execution and delivery of this Agreement and
the other Loan Documents and the making and repayment of the Loans hereunder and
such indemnities shall survive termination hereof.
12.09 Failure or Indulgence Not Waiver; Remedies Cumulative. Except
as otherwise expressly provided in this Agreement or any other Loan Document, no
failure or delay on the part of Agent, Swingline Lender, Issuing Lender or any
Lender in the exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
12.10 Marshalling; Recourse to Security; Payments Set Aside. Neither
any Lender, Swingline Lender, Issuing Lender nor Agent shall be under any
obligation to marshal any assets in favor of Borrower or any other party or
against or in payment of any or all of the Obligations. Recourse to security
shall not be required at any time. To the extent that Borrower makes a payment
or payments to Agent, Swingline Lender, Issuing Lender or the Lenders or Agent,
Swingline Lender, Issuing Lender or the Lenders enforce their Liens or exercise
their rights of set off, and such payment or payments or the proceeds of such
enforcement or set off or any part thereof are subsequently invalidated,
declared to be fraudulent or preferential, set aside and/or required to be
repaid to a trustee, receiver or any other party under any bankruptcy law, state
or federal law, common law or equitable cause, then to the extent of such
recovery, the Obligations or part thereof originally intended to be satisfied,
and all Liens, rights and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or set off had not occurred.
12.11 Severability. In case any provision in or obligation under
this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby.
12.12 Headings. Section headings in this Agreement are included
herein for
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convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
12.13 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF ILLINOIS.
12.14 Limitation of Liability. To the extent permitted by applicable
law, no claim may be made by Borrower, MHC Trust, T1000 Trust, the REIT, any
Lender or any other Person against Agent, Swingline Lender, Issuing Lender or
any Lender, or the affiliates, directors, officers, employees, attorneys or
agents of any of them, for any punitive damages in respect of any claim for
breach of contract or any other theory of liability arising out of or related to
the transactions contemplated by this Agreement, or any act, omission or event
occurring in connection therewith; and Borrower, MHC Trust, T1000 Trust, the
REIT, and each Lender hereby waive, release and agree not to ▇▇▇ upon any claim
for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor.
12.15 Successors and Assigns. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and permitted assigns and shall inure to the benefit of the parties
hereto and the successors and permitted assigns of Agent and Lenders. The terms
and provisions of this Agreement shall inure to the benefit of any permitted
assignee or transferee of the Loans and the Commitments of Lenders under this
Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend to
and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and obligations hereunder, shall not be assigned (whether
directly, indirectly, by operation of law or otherwise) without the consent of
all Lenders.
12.16 Usury Limitation. Each Loan Document is expressly limited so
that in no contingency or event whatsoever, whether by reason of error of fact
or law, payment, prepayment or advancement of the proceeds of the Loans,
acceleration of maturity of the unpaid principal balance of the Loans, or
otherwise, shall the amount paid or agreed to be paid to Lenders for the use,
forbearance, or retention of money, including any fees or charges collected or
made in connection with the Loans which may be treated as interest under
applicable law, if any, exceed the maximum legal limit (if any such limit is
applicable) under United States federal laws or state laws (to the extent not
preempted by federal law, if any), now or hereafter governing the interest
payable under such Loan Documents. If, from any circumstances whatsoever,
fulfillment of any provision hereof or any of the other Loan Documents at the
time performance of such provision shall be due, shall involve transcending the
limit of validity (if any) prescribed by law which a court of competent
jurisdiction may deem applicable hereto, then ipso facto, the obligation to be
fulfilled shall be reduced to the limit of such validity, and if from any
circumstances Lenders shall ever receive as interest an amount which would
exceed the maximum legal limit (if any such limit is applicable), such amount
which would be excessive interest shall be applied to the reduction of the
unpaid principal balance due under the Loan Documents and not to the payment of
interest or, if necessary, to Borrower. Notwithstanding any other provision of
this Agreement or any of the other Loan Documents, this provision shall control
every other provision of all Loan Documents.
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12.17 Confidentiality. Agent, Swingline Lender, Issuing Lender and
Lenders shall use reasonable efforts to assure that any information about
Borrower, the REIT, MHC Trust, T1000 Trust, Subsidiaries and Investment
Affiliates (and their respective Properties) not generally disclosed to the
public which is furnished to Agent, Swingline Lender, Issuing Lender or Lenders
pursuant to the provisions of this Agreement or any of the other Loan Documents
is used only for the purposes of this Agreement and the other Loan Documents and
shall not be divulged to any other Person other than Agent, Swingline Lender,
Issuing Lender and Lenders and their respective affiliates, officers, directors,
employees and agents who are actively and directly participating in the
evaluation, administration or enforcement of the Obligations; provided, however,
that nothing herein shall affect the disclosure of any such information (i) to
the extent required by statute, rule, regulation or judicial process, (ii) to
counsel for Agent, Swingline Lender, Issuing Lender or Lenders or to their
accountants, (iii) to bank examiners and auditors, (iv) to any transferee or
participant or prospective transferee or participant hereunder who agrees to be
bound by this provision, (v) in connection with the enforcement of the rights of
Agent, Swingline Lender, Issuing Lender and Lenders under this Agreement and the
other Loan Documents, or (vi) in connection with any litigation to which Agent,
Swingline Lender, Issuing Lender or any Lender is a party so long as Agent,
Swingline Lender, Issuing Lender or such Lender provides Borrower with prior
written notice of the need for such disclosure and exercises reasonable efforts
to obtain a protective order with respect to such information from the court or
other tribunal before which such litigation is pending.
12.18 Consent to Jurisdiction and Service of Process; Waiver of Jury
Trial; Waiver Of Permissive Counterclaims. ALL JUDICIAL PROCEEDINGS BROUGHT
AGAINST BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE AND ALL JUDICIAL PROCEEDINGS BROUGHT
BY BORROWER, THE REIT, MHC TRUST OR T1000 TRUST WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT SHALL BE BROUGHT IN ANY STATE OR FEDERAL COURT OF
COMPETENT JURISDICTION HAVING SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT
DISTRICT OF THE NORTHERN DISTRICT OF ILLINOIS, AND BY EXECUTION AND DELIVERY OF
THIS AGREEMENT, BORROWER, THE REIT, MHC TRUST AND T1000 TRUST ACCEPT, FOR ITSELF
AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY, THE
JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREE TO BE BOUND BY ANY
FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST HEREBY DESIGNATE AND
APPOINT ▇▇▇▇▇ ▇▇▇▇▇▇▇▇, ESQ., MANUFACTURED HOME COMMUNITIES, INC., ▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇, ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇, TO RECEIVE ON THEIR BEHALF
SERVICE OF ALL PROCESS IN ANY SUCH PROCEEDINGS IN ANY SUCH COURT, SUCH SERVICE
BEING HEREBY ACKNOWLEDGED BY SUCH PERSON TO BE EFFECTIVE AND BINDING SERVICE IN
EVERY RESPECT. SUCH APPOINTMENT SHALL BE REVOCABLE ONLY WITH AGENT'S PRIOR
WRITTEN APPROVAL. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST IRREVOCABLY
CONSENT TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY
SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS RESPECTIVE NOTICE ADDRESS SPECIFIED ON
THE SIGNATURE PAGES HEREOF, SUCH SERVICE TO BECOME EFFECTIVE UPON RECEIPT.
BORROWER, THE REIT,
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MHC TRUST, T1000 TRUST AGENT AND LENDERS IRREVOCABLY WAIVE (A) TRIAL BY JURY IN
ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT, AND (B) ANY OBJECTION (INCLUDING WITHOUT LIMITATION ANY OBJECTION TO
THE LAYING OF VENUE OR BASED ON THE GROUNDS OF FORUM NON CONVENIENS) WHICH IT
MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY SUCH ACTION OR PROCEEDING WITH
RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY JURISDICTION SET
FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE PROCESS IN ANY OTHER
MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT OR ANY LENDER TO BRING
PROCEEDINGS AGAINST BORROWER, THE REIT, MHC TRUST OR T1000 TRUST IN THE COURTS
OF ANY OTHER JURISDICTION. BORROWER, THE REIT, MHC TRUST AND T1000 TRUST AGREE
THAT THEY WILL NOT ASSERT ANY PERMISSIVE COUNTERCLAIM IN ANY PROCEEDING BROUGHT
BY LENDER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT.
12.19 Counterparts; Effectiveness; Inconsistencies. This Agreement
and any amendments, waivers, consents or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective when Borrower, the REIT,
MHC Trust, T1000 Trust, the initial Lenders, Swingline Lender, Issuing Lender
and Agent have duly executed and delivered counterpart execution pages of this
Agreement to each other (delivery by Borrower, the REIT, MHC Trust and T1000
Trust to Lenders and by any Lender to Borrower, the REIT, MHC Trust, T1000 Trust
and any other Lender being deemed to have been made by delivery to Agent). This
Agreement and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the terms
and conditions of this Agreement are actually and directly inconsistent with the
terms and conditions of any other Loan Document, this Agreement shall govern.
12.20 Construction. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.21 Entire Agreement. This Agreement, taken together with all of
the other Loan Documents and all certificates and other documents delivered by
Borrower to Agent in connection herewith, embodies the entire agreement and
supersede all prior agreements, written and oral, relating to the subject matter
hereof.
12.22 Agent's Action for Its Own Protection Only. The authority
herein conferred upon Agent, and any action taken by Agent, to inspect any
Property will be exercised and taken by Agent for its own protection only and
may not be relied upon by Borrower for any purposes whatsoever, and Agent shall
not be deemed to have assumed any responsibility to Borrower with respect to any
such action herein authorized or taken by Agent. Any review, investigation or
inspection conducted by Agent, any consultants retained by Agent or any agent or
representative of Agent in order to verify independently Borrower's satisfaction
of any conditions precedent to the Loans, Borrower's performance of any of the
covenants, agreements
98
and obligations of Borrower under this Agreement, or the validity of any
representations and warranties made by Borrower hereunder (regardless of whether
or not the party conducting such review, investigation or inspection should have
discovered that any of such conditions precedent were not satisfied or that any
such covenants, agreements or obligations were not performed or that any such
representations or warranties were not true), shall not affect (or constitute a
waiver by Agent or Lenders of) (i) any of Borrower's representations and
warranties under this Agreement or Agent's or Lenders' reliance thereon or (ii)
Agent's or Lenders' reliance upon any certifications of Borrower required under
this Agreement or any other facts, information or reports furnished to Agent and
Lenders by Borrower hereunder.
12.23 Lenders' ERISA Covenant. Each Lender, by its signature hereto
or on the applicable Assignment and Assumption, hereby agrees (a) that on the
date any Loan is disbursed hereunder no portion of such Lender's Pro Rata Share
of such Loan will constitute "assets" within the meaning of 29 C.F.R. Section
2510.3-101 of an "employee benefit plan" within the meaning of Section 3(3) of
ERISA or a "plan" within the meaning of Section 4975(e)(1) of the Internal
Revenue Code, and (b) that following such date such Lender shall not allocate
such Lender's Pro Rata Share of any Loan to an account of such Lender if such
allocation (i) by itself would cause such Pro Rata Share of such Loan to then
constitute "assets" (within the meaning of 29 C.F.R. Section 2510.3-101 or any
successor regulation thereto) of an "employee benefit plan" within the meaning
of Section 3(3) of ERISA or a "plan" within the meaning of Section 4975(e)(1) of
the Internal Revenue Code and (ii) by itself would cause such Loan to constitute
a prohibited transaction under ERISA or the Internal Revenue Code (which is not
exempt from the restrictions of Section 406 of ERISA and Section 4975 of the
Internal Revenue Code and the taxes and penalties imposed by Section 4975 of the
Internal Revenue Code and Section 502(i) of ERISA) or any Agent or Lender being
deemed in violation of Section 404 of ERISA.
12.24 Sole Lead Arranger, Documentation Agent and Syndication Agent.
Each of the parties to this Agreement acknowledges and agrees that the
obligations of Sole Lead Arranger, Documentation Agent and Syndication Agent
hereunder shall be limited to those obligations that are expressly set forth
herein, if any, and Sole Lead Arranger, Documentation Agent and Syndication
Agent shall not be required to take any action or assume any liability except as
may be required in their respective capacities as a Lender hereunder. Each of
the parties to this Agreement agrees that, for purposes of the indemnifications
set forth herein, the term "Agent" shall be deemed to include Sole Lead
Arranger, Documentation Agent and Syndication Agent.
12.25 USA Patriot Act Notice; Compliance. The USA Patriot Act of
2001 (Public Law 107-56) and federal regulations issued with respect thereto
require all financial institutions to obtain, verify and record certain
information that identifies individuals or business entities which open an
"account" with such financial institution. Consequently, Agent (for itself
and/or as Agent for all Lenders hereunder) may from time-to-time request, and
Borrower shall provide to Lender, Borrower's name, address, tax identification
number and/or such other identification information as shall be necessary for
Agent and Lenders to comply with federal law. An "account" for this purpose may
include, without limitation, a deposit account, cash management service, a
transaction or asset account, a credit account, a loan or other extension of
credit, and/or other financial services product.
12.26 Tax Shelter Regulations. None of Borrower, the REIT, MHC
Trust,
99
T1000 Trust nor any subsidiary of any of the foregoing intends to treat the Loan
or the transactions contemplated by this Agreement and the other Loan Documents
as being a "reportable transaction" (within the meaning of Treasury Regulation
section 1.6011-4). If Borrower, the REIT, MHC Trust, T1000 Trust or any
subsidiary of any of the foregoing or any other party to the Loan determines to
take any action inconsistent with such intention, Borrower will promptly notify
Agent thereof. If Borrower so notifies Agent, Borrower acknowledges that Agent
and Lenders may treat the Loan as part of a transaction that is subject to
Treasury Regulation Section 301.6112-1, and Agent and Lenders will maintain the
lists and other records, including the identity of the applicable party to the
Loan as required by such Treasury Regulation.
[SIGNATURE PAGES FOLLOW]
100
IN WITNESS WHEREOF, the parties hereto have executed this Agreement
as of the date first written above.
"Borrower"
MHC OPERATING LIMITED PARTNERSHIP, an
Illinois limited partnership
By: MHC Trust, a Maryland real estate
investment trust, its General Partner
By:__________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Chief
Financial Officer
Address:
Two ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/279-1710
S-1
"REIT"
MANUFACTURED HOME COMMUNITIES,
INC., a Maryland corporation
By:________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Chief
Financial Officer
Address:
Two ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/279-1710
AGREED AND ACKNOWLEDGED
FOR PURPOSES OF SECTION 1.04:
"REIT GUARANTOR"
MANUFACTURED HOME
COMMUNITIES, INC., a Maryland corporation
By:________________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Chief Financial Officer
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/279-1710
S-2
"MHC Trust"
MHC TRUST, a Maryland real estate investment
trust
By:_____________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Chief Financial Officer
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/279-1710
"T1000 ▇▇▇▇▇"
▇▇▇ ▇▇▇▇▇ Trust, a Maryland real estate
investment trust
By:_______________________________
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Vice President/Chief Financial Officer
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/279-1710
S-3
▇▇▇▇▇ FARGO BANK, N.A,
as Agent, Sole Lead Arranger, Swingline
Lender, Issuing Lender and a Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Senior Loan Officer
Telecopy: 312/782-0969
WITH A COPY TO:
▇▇▇▇▇ Fargo & Co.
Real Estate Group
▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇ ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn.: Chief Credit Officer
Telecopy: 415/391-2971
WITH A COPY TO (FOR FINANCIAL STATEMENTS
AND REPORTING INFORMATION ONLY):
▇▇▇▇▇ Fargo Bank
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇ ▇▇▇▇▇▇▇▇
Telecopy 949/251-4343
Commitment: $50,000,000
45.454545%
S-4
BANK OF AMERICA, N.A.,
as Syndication Agent and as a Lender
By:___________________________________
Name:_________________________________
Title:________________________________
Address:
IL1-231-10-35
▇▇▇ ▇. ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attn: ▇▇▇▇▇▇ ▇▇▇▇▇
Telecopy: 312/974-4970
Commitment: $25,000,000
22.727273%
S-5
LASALLE BANK NATIONAL ASSOCIATION,
as Documentation Agent and as a Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
Address:
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telecopy: 312/904-6691
Commitment: $25,000,000
22.727273%
S-6
SOUTHTRUST, N.A., as a Lender
By:____________________________________
Name:__________________________________
Title:_________________________________
By:____________________________________
Name:__________________________________
Title:_________________________________
Address:
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇ ▇▇▇▇▇▇
Telecopy: 404/214-5904
Commitment: $10,000,000
9.090909%
S-7
EXHIBIT C
TRANSFER AUTHORIZER DESIGNATION
(For Disbursement of Loan Proceeds by Funds Transfer)
[ ] NEW [ ] REPLACE PREVIOUS DESIGNATION [ ] ADD [ ] CHANGE [ ] DELETE LINE NUMBER
The following representatives of MHC Operating Limited Partnership, an Illinois
limited partnership ("Borrower") are authorized to request the disbursement of
Loan Proceeds and initiate funds transfers for Loan Number 6023AMC dated {DATE
OF DOCUMENTS} among ▇▇▇▇▇ Fargo Bank, National Association ("Bank"), certain
other lenders, Borrower and certain affiliates of borrower. Bank is authorized
to rely on this Transfer Authorizer Designation until it has received a new
Transfer Authorizer Designation signed by Borrower, even in the event that any
or all of the foregoing information may have changed.
MAXIMUM WIRE
NAME TITLE AMOUNT1
---- ----- -------
1._____________________________ _________________ _____________________
2._____________________________ _________________ _____________________
3._____________________________ _________________ _____________________
4._____________________________ _________________ _____________________
5._____________________________ _________________ _____________________
BENEFICIARY BANK AND ACCOUNT HOLDER INFORMATION
1.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
_____________________________________________________________________________________________________
RECEIVING PARTY ACCOUNT NUMBER:
_____________________________________________________________________________________________________
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
_________________________________________________________ ___________________________________
MAXIMUM TRANSFER AMOUNT:
_____________________________________________________________________________________________________
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
_____________________________________________________________________________________________________
2.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
_____________________________________________________________________________________________________
RECEIVING PARTY ACCOUNT NUMBER:
_____________________________________________________________________________________________________
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
_________________________________________________________ ___________________________________
C-1
MAXIMUM TRANSFER AMOUNT:
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
3.
TRANSFER FUNDS TO (RECEIVING PARTY ACCOUNT NAME):
RECEIVING PARTY ACCOUNT NUMBER:
RECEIVING BANK NAME, CITY AND STATE: RECEIVING BANK ROUTING (ABA) NUMBER
MAXIMUM TRANSFER AMOUNT:
FURTHER CREDIT INFORMATION/INSTRUCTIONS:
1 Maximum Wire Amount may not exceed the Loan Amount.
Date: {DATE OF DOCUMENTS}
"BORROWER"
MHC OPERATING LIMITED PARTNERSHIP,
AN ILLINOIS LIMITED PARTNERSHIP
By: MHC Trust, a Maryland real estate
investment trust, its general partner
By:________________________________________
Its:_______________________________________
C-2