Exhibit 10.16
[Execution Copy]
SECOND AMENDED AND RESTATED
FACILITY AGREEMENT
DATED AS OF DECEMBER 30, 1999
$ 350,000,000
REVOLVING CREDIT AND SWINGLINE FACILITY
for
SECURITY CAPITAL HOLDINGS S.A.
and
COMMERZBANK AKTIENGESELLSCHAFT
as Arranger
and
COMMERZBANK AKTIENGESELLSCHAFT
as Administrative Agent
and
BANK OF AMERICA, N.A.
as Syndication Agent
SECOND AMENDED AND RESTATED FACILITY AGREEMENT, dated as of December 30, 1999,
among SECURITY CAPITAL HOLDINGS S.A., a company incorporated in Luxembourg with
a registered office located at ▇▇, ▇▇▇▇▇ ▇' ▇▇▇▇, ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (▇▇▇
"Borrower"), SECURITY CAPITAL U.S. REALTY, a company incorporated in Luxembourg
with a registered office located at ▇▇, ▇▇▇▇▇ ▇' ▇▇▇▇, ▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ (the
"Company"), THE COMPANIES listed in Part I of Schedule 1 as guarantors
(collectively, the "Guarantor Parties"), COMMERZBANK AKTIENGESELLSCHAFT, New
York Branch, as arranger (in this capacity, the "Arranger"), THE FINANCIAL
INSTITUTIONS listed in Parts II and III of Schedule 1 as revolving credit
lenders and swingline lenders, respectively, COMMERZBANK AKTIENGESELLSCHAFT New
York Branch, as administrative agent (in this capacity and together with its
successors appointed pursuant to Clause 18.5, the "Administrative Agent") and
BANK OF AMERICA, N.A., as syndication agent (in this capacity, the "Syndication
Agent").
W I T N E S S E T H :
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WHEREAS, the Borrower, the Company, the Arranger, the Administrative
Agent, the Syndication Agent and the Lenders (as defined below) have previously
entered into an Amended and Restated Facility Agreement, dated as of December 8,
1998, as amended, supplemented and modified through the date hereof and in
effect immediately prior to the effectiveness hereof, the "Existing Facility
Agreement");
WHEREAS, the Borrower, the Company, the Lenders and the Guarantor
Parties have previously entered into a Guarantor Joinder Agreement dated as of
February 3, 1999 (the "Existing Joinder Agreement"); and
WHEREAS, the Borrower, the Company, the Guarantor Parties, the
Arranger, the Administrative Agent, the Syndication Agent and the Lenders wish
to amend and restate the Existing Facility Agreement upon the terms and
conditions set forth herein;
NOW, THEREFORE, IT IS AGREED THAT the Existing Facility Agreement
shall be amended and restated in its entirety to read as follows:
1. DEFINED TERMS; INTERPRETATION
1.1 Defined Terms.
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As used in this Agreement, the following terms shall have the
following meanings (such meanings to be equally applicable to both the singular
and plural
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forms of the terms defined):
"Additional Conditions Precedent" means, in relation to any Additional
Guarantor, the documents set forth in Schedule 6 Part II.
"Additional Guarantor" means any entity which becomes party hereto
after the Effective Date as a guarantor pursuant to a Guarantor Joinder
Agreement.
"Adjusted EBITDA" means, as to any Person and for any period, the
Consolidated net income of such Person and its Subsidiaries for such period,
before interest expense and provision for taxes and without giving effect to any
extraordinary gains and gains from sales of assets ("EBIT"), adjusted by (i)
adding thereto the amount of all amortization of intangibles and depreciation
that were deducted in arriving at such EBIT for such period and (ii) subtracting
therefrom the amount of all non-cash gains that were added in arriving at such
EBIT for such period.
"Adjusted Unsecured Liabilities" means, as of any date of
determination, an amount equal to (i) the sum of (a) Total Outstandings and (b)
all Unsecured Liabilities (excluding Total Outstandings) minus (ii) any Excluded
Unfunded Obligations.
"Administrative Agent" has the meaning set forth in the introductory
paragraph.
"Advance" means a Revolving Advance, a Term Advance or a Swingline
Advance.
"Advance Agreement" means the Amended and Restated Advance Agreement,
dated as of December 8, 1998, by and between the Borrower and the Company.
"Affected Lender" has the meaning set forth in Clause 2.3(c).
"Affiliate" in relation to a Person, means any other Person directly
or indirectly controlling , controlled by, or under direct or indirect common
control with, such Person. A Person shall be deemed to control another Person
if such Person possesses, directly or indirectly, the power to direct or cause
the direction of the management and policies of such other Person, whether
through the ownership of voting securities, by contract or otherwise.
"Affiliated Lender" in relation to a Lender, means any other bank or
financial institution which is an Affiliate of such Lender.
"Anniversary" means, in any year, the anniversary of October 1, 1999.
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"Applicable Base Rate Margin" means, for any day, the rate per annum
set forth below opposite the Applicable Rating Level then in effect for such
day:
Applicable Rating Applicable Base
Level Rate Margin
----- -----------
Level I 0.000%
Level II 0.175%
Level III 0.350%
Level IV 0.475%
Level V 0.600%
Level VI 0.850%.
"Applicable LIBOR Margin" means, for any day, the rate per annum set
forth below opposite the Applicable Rating Level then in effect for such day:
Applicable Rating Applicable
Level LIBOR Margin
----- ------------
Level I 1.000%
Level II 1.175%
Level III 1.350%
Level IV 1.475%
Level V 1.600%
Level VI 1.850%.
"Applicable Outstandings" has the meaning set forth in Clause 2.3(b).
"Applicable Rating Level" means, for any day, the level set forth
below opposite the lowest of the two highest ratings (in effect for such day)
issued by the Rating Agencies, respectively, in respect of the senior unsecured
long-term debt of the Company (or the level set forth opposite the highest
ratings if the two highest ratings fall within the same level or the lowest
rating if only two of the three Rating Agencies
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are then rating such debt), provided that, for determining whether the
Applicable Rating Level falls within any of Levels I through VI, the ratings set
forth opposite Level I shall be considered the highest and those set forth
opposite Level VI shall be considered the lowest:
Rating Level ▇▇▇▇▇'▇ S&P D&P
------------ ------- --- ---
Level I A2 A A
Level II A3 A- A-
Level III Baa1 BBB+ BBB+
Level IV Baa2 BBB BBB
Level V Baa3 BBB- BBB-
Level VI (Baa3 (BBB- (BBB-
For purposes of the foregoing, (i) "" means a rating equal to or more favorable
than; (ii) "(" means a rating less favorable than; (iii) if ratings for the
senior unsecured long-term debt of the Company shall not be available from at
least two of the three Rating Agencies, Level VI shall be deemed applicable;
(iv) if determinative ratings shall change (other than as a result of a change
in the rating system used by any applicable Rating Agency) such that a change in
Applicable Rating Level would result, such change shall effect a change in
Applicable Rating Level as of the day on which it is first announced by the
applicable Rating Agency, and any change in the Applicable Base Rate Margin or
the Applicable LIBOR Margin hereunder shall apply commencing on the effective
date of such change and ending on the date immediately preceding the effective
date of the next such change; and (v) if the rating system of any of the Rating
Agencies shall change prior to the date all obligations hereunder have been paid
and the Revolving Credit Commitments and Swingline Commitments are canceled, the
Borrower, the Administrative Agent and the Lenders shall negotiate in good faith
to amend the references to specific ratings in this definition to reflect such
changed rating system, and pending such amendment, if no Applicable Rating Level
is otherwise determinable based upon the foregoing, the last-determined
Applicable Rating Level shall apply until such agreement is reached.
"Approved Issuer" means a Qualifying Issuer which the Super Majority
Lenders (which shall include, for the purposes of this definition of "Approved
Issuer", all Lenders whose respective Commitments equal or exceed $50,000,000)
have
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approved in writing as being eligible for inclusion in determinations of the
Borrower's compliance with the limitation of clause (b) of the definition of
Borrowing Base. As of the date hereof, the Principal Companies are the only
Approved Issuers.
"Approved Jurisdiction" means any State of the United States and such
other jurisdictions as the Borrower and the Administrative Agent with the
consent of the Majority Lenders may agree in writing.
"Arranger" has the meaning set forth in the introductory paragraph.
"Assets" has the meaning set forth in Clause 1.2(a).
"Assignment and Acceptance" has the meaning set forth in Clause
24.3(b).
"Authorized Representative" means, with respect to any Person, the
President, any Managing Director, any Senior Vice President, any Vice President,
the Treasurer, any controller or any other officer, employee or representative
of such Person duly authorized by such Person to act on behalf of such Person in
connection with this Agreement and the transactions contemplated hereby;
provided that evidence of such authority shall have been provided to the
Administrative Agent promptly following the Administrative Agent's request
therefor and such evidence shall be reasonably satisfactory in form and
substance to the Administrative Agent.
"Base Rate" means, as of any date, the rate determined by the
Administrative Agent to be the higher of (a) the Prime Rate and (b) the
aggregate of the Federal Funds Rate on that date plus 0.50 percent per annum.
"Base Rate Advance" means an Advance in respect of which the Borrower
has elected interest to be calculated by reference to the Base Rate.
"Borrower" has the meaning set forth in the introductory paragraph.
"Borrowing Base" means, at any time, the amount determined by the
Administrative Agent on the basis of the most recent Compliance Certificate
and/or the most recent Borrowing Base Certificate to be 40 percent of the sum of
(x) the Market Value of all Qualifying Collateral and (y) the aggregate amount
of all Unfunded Obligations (other than Excluded Unfunded Obligations), provided
that, (a) Qualifying Securities that are Traded Securities must comprise at
least 40 percent of the aggregate value of the Borrowing Base, (b) Qualifying
Securities that are issued by Approved Issuers and Special Opportunity
Investments must collectively comprise at least 60 percent of the aggregate
value of the Borrowing Base, (c) if the aggregate of the
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Market Value of Qualifying Collateral comprising SCG Securities and any other
Qualifying Security issued by any company in which SCG is directly or indirectly
(other than through the Borrower or its Subsidiaries) the principal shareholder
(collectively, the "SCG Qualifying Collateral") exceeds 10 percent of the Market
Value of all Qualifying Collateral, for purposes of calculating the Borrowing
Base the Market Value of the SCG Qualifying Collateral shall be limited to 10
percent of the Market Value of all Qualifying Collateral and (d) if the
aggregate of the Market Value of Qualifying Collateral comprising Qualifying
Securities that are not common stock exceeds 10 percent of the Market Value of
all Qualifying Collateral, for purposes of calculating the Borrowing Base the
Market Value of such Qualifying Collateral shall be limited to 10 percent of the
Market Value of all Qualifying Collateral.
"Borrowing Base Certificate" means a certificate substantially in the
form set forth in Schedule 2 duly executed by a Managing Director, Senior Vice
President or Vice President of each of the Company and the Borrower.
"Borrowing Base Shortfall" has the meaning set forth in Clause 8.3.
"Business Day" means a day (other than a Saturday or a Sunday) on
which banks are open for business in each of London, New York City and
Luxembourg.
"CarrAmerica" means CarrAmerica Realty Corporation.
"Cash Equivalent Investment" means at any time cash and any evidence
of indebtedness issued or guaranteed by the Government of the United States.
"Cash Flow" means, with respect to the Company for the four fiscal
quarter period ending as of the date of determination, the Company's net income
for such period (excluding gains and losses for such period realized on any
disposition of Liquid Securities and excluding accrued interest income, in each
case to the extent included in net income), except that cash dividends and other
cash received from Investments in Consolidated Subsidiaries, other Subsidiaries
or any other Persons shall be substituted for net income of Consolidated
Subsidiaries and for equity in earnings of any such Subsidiaries or other
Persons, plus the sum of the following amounts (but only to the extent that any
of the following amounts were taken into account when determining such net
income): (a) income taxes accrued for such period, plus (b) interest expense
paid or accrued for such period (excluding interest accrued in respect of any
"zero-coupon" Indebtedness and other similar Indebtedness for which interest is
not due and payable in cash), plus (c) depreciation and amortization expenses
for such period, plus (d) the return of the capital component of dividends
received for such period (to the extent that such component is not reflected
already in net income).
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"Commitment" means a Revolving Credit Commitment or a Swingline
Commitment.
"Commitment Fee Rate" means, for any day, the percentage set forth
below opposite the Undrawn Commitments for such day:
Commitment
Undrawn Commitments Fee Rate
------------------- ---------
$175,000,000 or less 0.15%
Greater than $175,000,000 0.20%.
"Commitment Period" means, subject to Clause 2.5 (Extension of Final
Maturity Dates), the period commencing on the Effective Date and expiring on the
Final Maturity Date.
"Company" has the meaning set forth in the introductory paragraph.
"Company Fixed Charge Coverage Ratio" means, with respect to the
Company and for any period, the ratio of Cash Flow to Fixed Charges of the
Company for such period on a Consolidated basis.
"Compliance Certificate" means a compliance certificate, including all
attachments annexed thereto, substantially in the form of Schedule 3 duly
executed by a Managing Director or Senior Vice President or Vice President of
each of the Company and the Borrower, together with such changes therein as the
Administrative Agent may from time to time reasonably request.
"Consolidated" has the meaning set forth in Clause 1.2 (Construction).
"Consolidated Subsidiary" means, with respect to a Person at any date,
any Subsidiary or other entity the accounts of which would be Consolidated with
those of such Person in its Consolidated financial statements, if such
statements were prepared as of such date (other than any Strategic Investee).
"Contingent Obligation" means, for the Borrower, any commitment,
undertaking, Guarantee or other obligation of the Borrower or any of its
Consolidated Subsidiaries constituting a contingent liability that must be
accrued under GAAP.
"Contracting Party" means any of the Financial Institutions, the
Borrower and any of the Guarantors.
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"Debt" of any Person means, without duplication, all indebtedness of
such Person, or any partnership of which such Person or any of its Subsidiaries
is a general partner, for or in respect of (i) borrowed money; (ii) acceptances
under any acceptance credit facility; (iii) amounts raised under any note
purchase facility or the issue of bonds, notes, debentures or similar
instruments; (iv) amounts raised pursuant to any issue of shares which are
expressed to be redeemable at the option of the holder; (v) the amount of any
liability in respect of leases which would be treated in the audited financial
statements of such Person as finance or capital leases; (vi) the amount of any
liability in respect of any purchase price for Assets or service the payment of
which is deferred for a period in excess of one hundred and eighty days; (vii)
obligations for the purchase price of stock under stock purchase or similar
agreements in the ordinary course of business, (viii) the amount of any
liability in respect of swap, cap or collar arrangements for currency, interest
rate or dividends on preferred stock or any similar derivative instrument,
provided that if such swap, cap or collar arrangement or any similar derivative
instrument has been entered into in order to hedge the currency, interest rate
or dividend exposure of such Person in respect of indebtedness of the types
described in clauses (i) through (vii), (ix) and (x) of this definition or
preferred stock, the amount of any liability, in respect of such arrangement or
instrument shall not be taken into account, (ix) amounts raised under any other
transaction (including, without limitation, any forward sale or purchase
agreement) having the commercial effect of a borrowing; and (x) any guarantee or
other assumption of liability for the obligations of any third party in respect
of any of the foregoing.
"Debt to Net Worth Ratio" means, with respect to any Person and for
any period, the ratio of Debt to Net Worth for such Person for such period.
"Default" means any Event of Default and any event or condition which,
with the giving of notice, lapse of time or fulfillment of any other applicable
condition (or any combination of the foregoing) would constitute an Event of
Default.
"Dollars" or "$" means the lawful currency for the time being of the
U.S.
"Effective Date" has the meaning provided in the Supplemental
Agreement.
"ERISA" means the Employee Retirement Income Security Act of 1974 of
the United States, as amended, and any successor statute of similar import,
together with the regulations thereunder, in each case as in effect from time to
time.
"ERISA Affiliate" means any corporation, trade or business that is a
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member of a controlled group of corporations or a controlled group of trades or
businesses, as described in sections 414(b) and 414(c), respectively, of the
Internal Revenue Code or section 4001 of ERISA.
"Event of Default" means any of the events specified in Clause 16.1
(Events of Default).
"Excluded Unfunded Obligations" means, as of any date falling within
the period commencing on the Effective Date and ending on the earlier of (a) the
date on which the Borrower shall have consummated a sale of all of its equity
interest in City Center Retail Trust to any Person other than the Company or any
of its other Consolidated Subsidiaries and (b) the date that is the numerically
corresponding day in the twelfth month following the Effective Date, all
Unfunded Obligations.
"Facility" means, collectively, the facilities referred to in Clause
2.1 (Facilities).
"Facility Office" in relation to a Lender, means:
(a) the office(s) of such Lender designated as such by such Lender in
writing to the Administrative Agent prior to the Effective Date; or
(b) in the case of a Lender which becomes a Contracting Party after
the Effective Date, the office(s) of such Lender designated as such by such
Lender in writing to the Administrative Agent before or upon becoming a
Lender; or
(c) any other office(s) designated as such by such Lender in writing
to the Administrative Agent in accordance with Clause 24.6 (Change of
Facility Office),
in each case as the office(s) through which such Lender will perform all or
any of its obligations under the Finance Documents.
"Federal Funds Rate" means, on any day, the rate per annum (rounded
upward if necessary to the nearest one/one-hundredth of one percent) equal to
the weighted average of the rate on overnight Federal funds transactions with
members of the Federal Reserve System arranged by Federal funds brokers on such
day, as published by the Federal Reserve Bank of New York on the Business Day
next succeeding such day, provided that (a) if such day is not a Business Day,
the Federal Funds Rate for such day shall be such rate on such transactions on
the next preceding Business Day as so published on the next succeeding Business
Day, and (b) if no such
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rate is published on such next succeeding Business Day, the Federal Funds Rate
for such day shall be the average rate quoted to the Administrative Agent on
such day on such transactions as reasonably determined by the Administrative
Agent. Each change in the interest rate on a Base Rate Advance, Swingline
Advance or Term Advance which results from a change in the Federal Funds Rate
shall become effective on the day on which the change in the Federal Funds Rate
becomes effective.
"Fee Letter" means the letter dated December 30, 1999 from the
Arranger and the Administrative Agent to the Borrower detailing certain fees to
be paid by the Borrower in connection with the Facility.
"Final Maturity Date" means, subject to Clause 2.5 (Extension of Final
Maturity Dates), December 1, 2001.
"Final Repayment Date" means, subject to Clause 2.6 (Term-Out Option),
the date falling two years after the Final Maturity Date.
"Finance Document" means any of this Agreement, each of the Notes, the
Fee Letter, the Guarantor Joinder Agreements, the Assignment and Acceptances and
any other document designated as such by the Administrative Agent and the
Borrower.
"Financial Institution" means the Arranger, the Administrative Agent
or a Lender.
"Fiscal Year" means a fiscal year of the Company and the Borrower.
"Fixed Charges" means, with respect to any Person and for any period,
the sum of the Principal and Interest Expense, cash payments made in respect of
taxes or tax liabilities (net of cash tax refunds actually received) and
dividend payments made on preferred stock in each case by such Person for such
period on a Consolidated basis.
"GAAP" has the meaning given to it in Clause 1.2 (Construction).
"Group" means the Company and its Consolidated Subsidiaries for the
time being and from time to time.
"Guarantee" or "guarantee" of any Person means any agreement or
undertaking (other than a direct or primary obligation of such Person to
purchase stock under stock purchase or similar agreements) pursuant to which
such Person guarantees, assumes or otherwise becomes secondarily, contingently
or otherwise liable for any
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obligation of any other Person (other than by virtue of endorsement of
instruments in the ordinary course of deposit or collection). For the avoidance
of doubt, a "Guarantee" or "guarantee" includes, without limitation, an
agreement or undertaking of any Person pursuant to which such Person guarantees,
assumes or otherwise becomes secondarily, contingently or otherwise liable for
the obligation of any other Person to purchase stock under stock purchase or
similar agreements.
"Guarantor" means the Company, the Guarantor Parties and each
Additional Guarantor (collectively, the "Guarantors").
"Guarantor Joinder Agreement" means the Existing Joinder Agreement and
any other agreement substantially in the form of Part I of Schedule 6 made
pursuant to Clause 28.1 (Additional Guarantors) (collectively, the "Guarantor
Joinder Agreements").
"Guarantor Parties" has the meaning set forth in the introductory
paragraph.
"Intangible Assets" means, with respect to the Company, the amount (to
the extent reflected in determining stockholders' equity of the Company) of all
items which in accordance with GAAP would be properly classified as intangible
Assets of the Company and its Consolidated Subsidiaries.
"Interest Coverage Ratio" means, with respect to any Person and for
any period, the ratio of Adjusted EBITDA to Interest Expense for such Person for
such period.
"Interest Expense" means, in respect of any Person and for any period,
the aggregate of its paid or accrued cash interest expense for such period on
such Person's Debt calculated on a Consolidated basis but excluding interest
properly capitalized under GAAP being interest attributable to construction
projects.
"Interest Period" means, in respect of a Term Advance which is a LIBOR
Advance, each period of interest selected by the Borrower in accordance with
Clause 7.5 (Interest Periods for Term Advances).
"Internal Revenue Code" means the Internal Revenue Code of 1986 of the
United States, as amended, and any successor statute of similar import, together
with the regulations thereunder, in each case as in effect from time to time.
Reference to sections of the Internal Revenue Code shall be construed to also
refer to any successor sections.
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"Investment" means, with respect to a Person, the legal or beneficial
ownership by such Person of any capital stock or other equity interest in
another Person, whether or not such ownership constitutes a controlling interest
in such other Person, and shall include all Subsidiaries of such Person.
"Investment Adviser" means Security Capital U.S. Realty Management
S.A. or such other entity providing investment advice to the Group as may be
approved by the Administrative Agent (such approval not to be unreasonably
withheld and such decision not to be unreasonably delayed).
"Lender" means a Revolving Credit Lender or a Swingline Lender.
"Lien" means any mortgage, pledge, hypothecation, assignment, deposit
arrangement, encumbrance, lien (statutory or other) or preference, priority or
other security agreement or preferential arrangement of any kind or nature
whatsoever (including, without limitation, any conditional sale or other title
retention agreement, any financing lease having substantially the same economic
effect as any of the foregoing, and the filing of any financing statement under
the Uniform Commercial Code or comparable law of any jurisdiction) having the
effect of security.
"LIBOR" means with respect to a LIBOR Advance:
(a) the rate per annum appearing on the Telerate page 3750 (or any
successor to that page) (the "Telerate Screen") at or about 11.00 a.m. on
the applicable Rate Fixing Day for the offering of deposits in Dollars for
a period comparable to its Term; or
(b) if: (i) no relevant rate appears on the Telerate Screen for the
purposes of paragraph (a) above; or (ii) the Administrative Agent
determines that no rate for a period of comparable duration to that Term
appears on the Telerate Screen at the relevant time, the arithmetic mean
(rounded upwards, if necessary, to two decimal places) of the respective
rates, as supplied to the Administrative Agent at its request, quoted by
the Reference Lenders to leading banks in the London Interbank Market at or
about 11.00 a.m. on the Rate Fixing Day for the offering of deposits in
Dollars in an amount comparable to its Term. If any of the Reference
Lenders is unable or otherwise fails to supply an offered rate by 11.30
a.m. on the Rate Fixing Day, LIBOR shall, subject to Clause 9(a)(i) (Market
Disruption), be determined on the basis of the quotations of the remaining
Reference Lenders.
"LIBOR Advance" means an Advance (other than a Swingline Advance) in
respect of which the Borrower has requested interest be calculated by reference
to
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LIBOR.
"Liquid Security" means a Traded Security of which the Borrower owns
in the aggregate less than five percent (5%).
"Majority Lenders" means, at any time, Lenders whose Commitments:
(a) then aggregate 51 percent or more of the Total Revolving Credit
Commitments; or
(b) if the Total Revolving Credit Commitments have been reduced to
zero and Advances are outstanding, then aggregate 51 percent or more of the
aggregate amount of the Advances outstanding at that time; or
(c) if the Total Revolving Credit Commitments have been reduced to
zero and no Advance is outstanding, aggregated 51 percent or more of the
Total Revolving Credit Commitments immediately before the reduction.
"Mandatory Borrowing" has the meaning set forth in Clause 2.3(d).
"Margin Stock" has the meaning ascribed to such term in Regulation U
of the Board of Governors of the Federal Reserve System or any regulation
substituted therefor, as from time to time in effect.
"Market Net Worth" means, on a given date,
(a) the sum of:
(i) the Market Value on and as of such date of all Traded
Securities owned by the Company and its Consolidated Subsidiaries;
(ii) the amount of obligations for the purchase price of
stock under stock purchase agreements or similar agreements in the
ordinary course of business;
(iii) with respect to any Person (x) Securities of which
are owned by the Company or any of its Consolidated Subsidiaries and
(y) whose Securities are not listed on the New York Stock Exchange,
the American Stock Exchange or some other principal national
securities exchange in the United States of America, the product of:
(1) the difference obtained by subtracting:
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(A) the Total Liabilities of such Person;
from
----
(B) the sum of:
(I) the book value of all Assets of such
Person (excluding all Intangible Assets and operating
properties) on and as of such date; and
(II) an amount equal to the quotient obtained
by dividing (x) the annualized Adjusted EBITDA of such
Person (annualized on the basis of the three month
period ended immediately prior to the date on which
Market Net Worth is being determined) by (y) 9.25
percent per annum (based on the balance sheet of such
Person on the last day of the three month period ended
immediately prior to the date on which Market Net Worth
is being determined);
multipled by
------------
(2) the percentage of the Securities of such Person
owned by the Company and/or any of its Consolidated Subsidiaries;
and
(iv) all cash and Cash Equivalent Investments of the Company
and its Consolidated Subsidiaries on and as of such date,
minus
-----
(b) the Total Liabilities (excluding deferred taxes on unrealized
gains) of the Company and its Consolidated Subsidiaries as of such date.
"Market Value" means, on the date of determination thereof:
(a) with respect to cash, the book value of such cash; and
(b) with respect to a Security (i) if such Security is listed on the
New York Stock Exchange, the American Stock Exchange, or some other
principal national securities exchange in the United States of America, the
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product of (A) the reported last sale price of a unit of such security
regular way on a given day, or, in case no such sale takes place on such
day, the average of the reported closing bid and asked prices regular way,
in each case on the New York Stock Exchange Composite Tape, the American
Stock Exchange Composite Tape or the principal national securities exchange
in the United States of America on which the security is listed or admitted
to trading, as applicable, or, if such Security is not listed or admitted
to trading on any national securities exchange in the United States of
America, the closing sales price, or if there is no closing sales price,
the average of the closing bid and asked prices, in the over-the-counter
market as reported by the National Association of Securities Dealers
Automated Quotation System and (B) the number of shares held by the
Borrower or a Guarantor, or (ii) if such Security is not listed on any such
national securities exchange or not so quoted or reported, an amount equal
to the product of (A) the difference obtained by subtracting (x) the Total
Liabilities of the issuer of such Security from (y) the quotient obtained
by dividing (1) the annualized Adjusted EBITDA of the issuer of such
Security (annualized on the basis of the three month period ended
immediately prior to the date on which Market Value is being determined) by
(2) 9.25 percent per annum (based on the balance sheet of such issuer on
the last day of the three month period ended immediately prior to the date
on which Market Value is being determined) and (B) the percentage equity
interest held by the Company and/or any of its Consolidated Subsidiaries in
the issuer of such Security.
"Material Adverse Effect" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, or results of operations of
the Company and its Consolidated Subsidiaries taken as a whole, (b) the ability
of the Borrower or any Guarantor to perform its obligations under any Finance
Document to which it is a party, (c) the validity or enforceability of any of
such Finance Documents and (d) the rights and remedies of the Lenders and the
Administrative Agent under any of such Finance Documents.
"Maturity Date" means:
(a) in relation to a LIBOR Advance under the Revolving Credit Facility
or a Swingline Advance, the last day of its Term; and
(b) in relation to a Base Rate Advance under the Revolving Credit
Facility, the Final Maturity Date.
"Net Worth" means, with respect to any Person at any time, the amount
obtained by subtracting (i) the Total Liabilities of such Person and its
Subsidiaries
-16-
determined on a Consolidated basis from (ii) the Assets of such Person and its
Subsidiaries determined on a Consolidated basis after appropriate deduction for
any minority interests in Subsidiaries.
"Non-Extending Lender" has the meaning set forth in Clause 2.5(b).
"Non-Recourse Debt" means Debt of any Person which is not a general
obligation and which is secured by a Lien, the liability for which is
effectively limited to the asset or property subject to such Lien with no
recourse, directly or indirectly to any other asset or property of such Person
(except to the extent that the documentation governing such Debt contains
provisions relating to customary indemnities from such Person for fraud, use of
proceeds and environmental matters or as are otherwise reasonably acceptable to
the Administrative Agent).
"Note" means either a Revolving Note, a Swingline Note or a Term Note.
"Overall Commitment" has the meaning set forth in Clause 2.3(b).
"Permitted Liens" means (a) Liens for taxes not yet due and payable
and (b) Liens for taxes, assessments and governmental charges or assessments
that are being contested in good faith by appropriate proceedings diligently
conducted, and for which reserves, if any, required under GAAP have been set
aside.
"Person" or "person" has the meaning set forth in Clause 1.2
(Construction).
"Pricing Service" means Bloomberg Financial Markets LLP.
"Prime Rate" means, on any day, the rate of interest from time to time
publicly announced by the Administrative Agent as its "base" or "prime" rate for
loans denominated in Dollars made in New York, which rate may not be the lowest
rate charged to its borrowers. Each change in the interest rate on an Advance
which results from a change in the Prime Rate shall become effective on the day
on which the change in the Prime Rate becomes effective.
"Principal and Interest Expense" means, in respect of any Person and
for any period, the aggregate (determined on a Consolidated basis) of (a) all
amounts of regularly scheduled principal paid during such period in respect of
Debt of such Person (including, without limitation convertible debt) but
excluding bullet repayments on maturity of a loan, principal paid in respect of
revolving credits and principal paid in respect of revolving credits that
convert into term loans and (b) Interest Expense for
-17-
such period, provided that for the purposes of the calculation of the Borrower
Fixed Charge Coverage Ratio in Clause 15.10(b)(iii)(B) (Financial Condition),
Principal and Interest Expense shall exclude all repayments of principal under
the Finance Documents (including payments of principal on any Repayment
Installment).
"Principal Companies" means SCG, Regency, PRT, Storage and
CarrAmerica.
"PRT" means Pacific Retail Trust.
"Qualifying Collateral" means cash and Qualifying Securities that are
free and clear of Security Interests other than Permitted Liens, provided that,
at any time, no more than 35 percent of such Qualifying Securities shall have
been issued by any one Qualifying Issuer.
"Qualifying Issuer" means, except as provided below,
(a) any Real Estate Operating Company and any REIT which has, on
a Consolidated basis, (i) at all times, a Debt to Net Worth Ratio of
no greater than 1.0:1.0; and (ii) a Qualifying Issuer Fixed Charge
Coverage Ratio of not less than 1.5:1.0, calculated on a rolling basis
for the four most recent quarters ended or, if less, since the date of
active operations; or
(b) an issuer of a Liquid Security which has, on a Consolidated
basis, (i) at all times, a Debt to Net Worth Ratio of no greater than
1.0:1.0; and (ii) an Interest Coverage Ratio of not less than 1.5:1.0,
calculated on a rolling basis for the four most recent quarters ended
or, if less, since the date of active operations;
provided, however, there shall be excluded from the term "Qualifying Issuer" (1)
any REIT whose distributions made are less than the minimum amounts required to
be made by the Internal Revenue Code in order for such REIT not to be taxed at
the corporate or entity level or for it otherwise to maintain its status as a
REIT; or (2) any Real Estate Operating Company or any REIT for which (I) an
event of default (howsoever described) exists under any agreement constituting
or evidencing Debt of such Real Estate Operating Company or REIT, (II) an event,
which with the sending of notice, the passage of time (other than any applicable
grace period granted for curable defaults), any combination of the foregoing or
the fulfillment of any other condition could become an event of default
(howsoever described) under any agreement constituting or evidencing Debt of
such Real Estate Operating Company or REIT, (III) an event or condition exists
under any agreement constituting or
-18-
evidencing Debt of such Real Estate Operating Company or REIT which permits any
holder or holders of such Debt, any trustee or agent acting on behalf of such
holder or holders or any other Person, to accelerate the maturity of any such
Debt or require that such Debt be prepaid other than by regularly scheduled
prepayments prior to the maturity or (IV) any Debt of such Real Estate Operating
Company or REIT shall have been declared (or shall become) due and payable; or
(3) any Real Estate Operating Company or any REIT which if it were included as a
Qualifying Issuer would result in the weighted average of the Qualifying Issuer
Fixed Charge Coverage Ratio of all Qualifying Issuers (including such Real
Estate Operating Company or REIT) being less than 1.75:1.0 (weighted according
to the proportion which the Market Value of the Qualifying Securities of a
particular Qualifying Issuer bears to the aggregate of the Market Value of all
Qualifying Securities of all Qualifying Issuers), calculated on a rolling basis
for the four most recent quarters ended or, if less, since the date of active
operations.
"Qualifying Issuer Fixed Charge Coverage Ratio" means, with respect to
any Real Estate Operating Company or REIT and for any period, the ratio of
Adjusted EBITDA to Fixed Charges of such Real Estate Operating Company or REIT
for such period.
"Qualifying Security" means each Security issued by a Qualifying
Issuer and owned solely by, and registered solely in the name of, the Borrower
or a Guarantor, other than a Security of a Qualifying Issuer which:
(a) contains transfer restrictions (other than transfer
restrictions (i) imposed to comply with applicable securities laws,
(ii) with respect to Traded Securities, imposed by any agreement
between the Borrower or a Guarantor and an underwriter entered into in
connection with an offering by such underwriter of Securities of the
issuer of such Security, in which agreement the Borrower or such
Guarantor agrees not to sell such Security for a period ending no
later than 180 days after such offering or (iii) which have been
approved by the Majority Lenders (such approval not to be unreasonably
withheld)) or preemption rights; or
(b) restricts the payment of dividends or distributions thereon
(other than (i) in the case of a Qualifying Issuer that is a REIT,
customary restrictions contained in documents evidencing indebtedness
of a REIT or (ii) restrictions which have been approved by the
Majority Lenders (such approval not to be unreasonably withheld)).
"Rate Fixing Day" means in relation to any LIBOR Advance, the
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second Business Day before its Utilization Date.
"Rating Agencies" means any of ▇▇▇▇▇'▇ Investors Service, Inc.,
Standard & Poor's Ratings Group, and Duff & ▇▇▇▇▇▇ Credit Rating Co.
"Real Estate Operating Company" means a company the primary object and
purpose of which is the acquisition, development, promotion, sale and lease of
real estate or interests in real estate and which is incorporated and doing
business in an Approved Jurisdiction.
"Regency" means Regency Realty Corporation.
"REIT" means a real estate investment trust in either corporate or
trust form and established under the laws of any State of the U.S. and
qualifying for treatment as a "real estate investment trust" under the Internal
Revenue Code.
"Reference Lenders" means, subject to Clause 24.4 (Reference Lenders),
the principal London offices of Commerzbank Aktiengesellschaft, and of two other
Lenders (or Affiliates of Lenders) to be appointed by the Administrative Agent
after the Effective Date after consultation with the Company and the Borrower.
"Repayment Date" means each date for the payment of principal on the
Term Advance in accordance with Clause 8.1 (Repayment of Advances).
"Repayment Installment" means each installment for repayment of the
Term Advances referred to in Clause 8 (Repayment and Prepayment of Advances).
"Request" means a request, substantially in the form of Schedule 4,
made by the Borrower in accordance with Clause 5.1(b) (Utilization of Revolving
Credit Facility) or 5.2(b) (Utilization of Swingline Facility), as the case may
be.
"Requested Amount" in relation to a Request, means the amount of the
Advance requested in the Request.
"Requirement(s) of Law" means as to any Person, the certificate of
incorporation and bylaws or other organizational or governing documents of such
Person, and any law, treaty, rule or regulation, 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.
"Revolving Advance" means an advance made by a Lender under the
Revolving Credit Facility or the principal amount outstanding of that advance as
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the context may require or allow.
"Revolving Credit Commitment" in relation to a Revolving Credit
Lender, means:
(a) in the case of a Revolving Credit Lender which is a Revolving
Credit Lender on the date hereof, the amount in Dollars set opposite its
name in Part II of Schedule 1, to the extent not canceled or reduced under
this Agreement; and
(b) in the case of a Revolving Credit Lender which becomes a Revolving
Credit Lender after the date hereof, the amount of any other Lender's
Revolving Credit Commitment acquired by it under Clause 24 (Alterations to
the Contracting Parties) to the extent not canceled or reduced under this
Agreement.
"Revolving Credit Facility" means the facility referred to in Clause
2.1(a) (Facilities).
"Revolving Credit Lender" means a bank or financial institution whose
name appears in Part II of Schedule 1 in its capacity as a participant in the
Facility (other than the Swingline Facility).
"Revolving Note" means a promissory note executed by the Borrower,
payable to the order of a Revolving Credit Lender, in a maximum principal amount
equal to such Revolving Credit Lender's Revolving Credit Commitment and
substantially in the form of Schedule 7.
"Same Day Funds" means Dollar funds settled through the New York
Clearing House Interbank Payments System or such other same day funds for
payment in Dollars as the Administrative Agent may specify to the Borrower as
being customary at the time for the settlement of international transactions in
New York City of the type contemplated by this Agreement.
"SCG" means Security Capital Group Incorporated.
"SCG Security" means any Security issued by SCG.
"Security" means, with respect to any Person, the common stock,
preferred stock or readily convertible debentures of such Person or, if such
Person is a trust, the beneficial interests in such Person.
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"Security Instrument" means any mortgage, deed of trust, security
agreement, amendment or supplement thereto, chattel mortgage, chattel mortgage
note assignment, pledge agreement, or other agreement providing for, evidencing
or perfecting any Security Interest in real or personal property.
"Security Interest" means any Lien, encumbrance or security interest
of any kind whatsoever, whether arising under a Security Instrument or as a
matter of law, judicial process or otherwise.
"Shareholders' Equity" means, at any date with respect to a Person,
the Tangible Net Worth of such Person less, to the extent not otherwise deducted
in the determination thereof, the aggregate amount of Contingent Obligations of
such Person, all determined as of such date.
"Special Opportunity Investment" means the Qualifying Securities of
any Real Estate Operating Company or REIT which the Borrower or any Guarantor
owns and which, in the aggregate, comprise no more than 10 percent of the
Qualifying Securities issued by such Real Estate Operating Company or REIT.
"Storage" means Storage USA, Inc.
"Strategic Investee" means, with respect to the Company, any Person
(other than the Borrower or a Guarantor (other than the Company)) of which the
Company owns, directly or indirectly, more than 25% of the outstanding
Securities or other ownership interests having ordinary voting power to elect
directors or other individuals performing similar functions.
"Subordinated Debt" means any unsecured indebtedness for borrowed
money of any member of the Group which is subordinate to its obligations under
the Finance Documents.
"Subsidiary" means, as to any Person, (i) any corporation more than 50
percent of whose stock of any class or classes having by the terms thereof
ordinary voting power to elect a majority of the directors of such corporation
(irrespective of whether or not at the time stock of any class or classes of
such corporation shall have or might have voting power by reason of the
happening of any contingency) is at the time owned by such Person and/or one or
more Subsidiaries of such Person and (ii) any partnership, limited liability
company, association, joint venture or other entity in which such Person and/or
one or more Subsidiaries of such Person has more than a 50 percent equity
interest at the time.
"Super Majority Lenders" means, at any time, Lenders whose
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Commitments:
(a) then aggregate 66-2/3 percent or more of the Total Revolving
Credit Commitments; or
(b) if the Total Revolving Credit Commitments have been reduced to
zero and Advances are outstanding, then aggregate 66-2/3 percent or more of
the aggregate amount of the Advances outstanding at that time; or
(c) if the Total Revolving Credit Commitments have been reduced to
zero and no Advance is outstanding, aggregated 66-2/3 percent or more of
the Total Revolving Credit Commitments immediately before the reduction.
"Supplemental Agreement" means the Eighth Supplemental Agreement dated
December 30, 1999 among the Company, the Borrower, the Guarantor Parties, the
Arranger, the Administrative Agent, the Lenders and the Retiring Lenders (as
defined therein).
"Swingline Advance" means an advance by a Swingline Lender under the
Swingline Facility or the principal amount outstanding of that advance.
"Swingline Commitment" in relation to a Swingline Lender, means:
(a) in the case of a Swingline Lender which is a Swingline Lender on
the date of this Agreement, the amount in Dollars set opposite its name in
Part III of Schedule 1, to the extent not canceled or reduced under this
Agreement; and
(b) in the case of a Swingline Lender which becomes a Swingline Lender
after the date of this Agreement, the amount of any other Lender's
Swingline Commitment acquired by it under Clause 24 (Alterations to the
Contracting Parties) to the extent not canceled or reduced under this
Agreement.
"Swingline Facility" means the facility referred to in Clause 2.1(c)
(Facilities).
"Swingline Lender" means a bank or financial institution whose name
appears in Part III of Schedule 1 in its capacity as a participant in the
Swingline Facility.
"Swingline Note" means a promissory note executed by the Borrower
-23-
payable to the order of a Swingline Lender in a principal amount equal to such
Swingline Lender's Swingline Commitment substantially in the form of Schedule 8.
"Syndication" means the primary syndication by the Arranger of the
Facility.
"Tangible Net Worth" means, with respect to a Person at any date, the
Net Worth of such Person less its Intangible Assets, all determined as of such
date in accordance with GAAP.
"Taxes" includes all present and future income and other taxes,
levies, imposts, deductions, charges, duties and withholdings and any charges of
a similar nature, together with interest thereon and penalties with respect
thereto, if any, and any payments made on or in respect thereof; "Taxation" and
"Tax" shall be construed accordingly.
"Term" in relation to an Advance (other than a Term Advance), means
the period for which it is to be borrowed, as selected by the Borrower in the
relevant Request and in the case of a Term Advance, means the duration of each
Interest Period.
"Term Advance" means, in the case of each Lender, the term advance
made or deemed made by such Lender to the Borrower in accordance with Clause 2.6
(Term-Out Option).
"Term Note" means a promissory note executed by the Borrower payable
to the order of a Revolving Credit Lender in a maximum principal amount equal to
such Revolving Credit Lender's Revolving Credit Commitment and substantially in
the form of Schedule 9.
"Term-Out Date" means the date determined in accordance with Clause
2.6 (Term-Out Option).
"Term-Out Option" means the option granted to the Borrower in Clause
2.6 (Term-Out Option).
"Term-Out Period" means the period commencing on the Term-Out Date and
ending on the Final Repayment Date.
"Total Liabilities" means, as to any Person as of a given date, all
liabilities which would, in conformity with GAAP, be properly classified as a
liability on the Consolidated balance sheet of such Person, and shall in any
event include
-24-
(without duplication) the following: (a) all Debt of such Person and its
Consolidated Subsidiaries, (b) all Unfunded Obligations of such Person and its
Consolidated Subsidiaries, (c) all Securities of such Person and its
Consolidated Subsidiaries that are convertible into Debt of such Person and/or
its Consolidated Subsidiaries, (d) all accounts payable of such Person and its
Consolidated Subsidiaries and (e) all Guarantees by such Person and its
Consolidated Subsidiaries of Total Liabilities of other Persons.
"Total Revolving Credit Commitments" means the aggregate for the time
being of the Revolving Credit Commitments, being $350,000,000 at the date of
this Agreement.
"Total Swingline Commitments" means the aggregate for the time being
of the Swingline Commitments, being $50,000,000 at the date of this Agreement.
"Total Outstandings" means, on any day, the aggregate of all Advances
outstanding on that day, together with all other amounts outstanding under or in
connection with the Finance Documents, including, without limitation, accrued
interest and fees.
"Traded Security" means a Security meeting all of the following
criteria: (a) such Security (i) is listed on the New York Stock Exchange,
American Stock Exchange or some other principal national securities exchange in
the United States of America or (ii) has price quotations in the over-the-
counter market reported by the National Association of Securities Dealers
Automated Quotation System; (b) such Security is not subject to any instrument,
document or agreement which in any way prohibits the sale of such Security for
any specified period of time or otherwise (other than (x) prohibitions imposed
to comply with applicable securities laws or (y) any agreement between the
Borrower or a Guarantor and an underwriter entered into in connection with an
offering by such underwriter of Securities of the issuer of such Security, in
which agreement the Borrower agrees not to sell such Security for a period
ending no later than 180 days after such offering); and (c) the offer and sale
of such Security by the Borrower would not be subject to any registration
requirements or other restrictions under the Securities Act or other Applicable
Law other than (i) volume limitations imposed under Rule 144(e) of the
Securities Act, (ii) restrictions on the manner of resale imposed under Rule
144(f) and (g) of the Securities Act, (iii) restrictions under Regulation 144A
or S of the Securities and Exchange Commission and (iv) other restrictions
related to the timing of offers and sales consented to by the Majority Lenders
in writing.
"Undrawn Commitments" means, for any day, the Total Revolving Credit
Commitments less the Total Outstandings plus the aggregate principal amount
-25-
of all outstanding Swingline Advances for such day after giving effect to all
reductions, advances, repayments and prepayments made on such day.
"Unfunded Obligation" means, as to any Person as of a given date, any
purchase obligation, repurchase obligation, forward commitment, unfunded
obligation or guarantee of such Person and its Consolidated Subsidiaries,
including without limitation any obligation of such Person and its Consolidated
Subsidiaries under an agreement to acquire a quantity of a Security.
"United States" or "U.S." means the United States of America.
"Unsecured Liabilities" means, as to any Person as of a given date,
all liabilities of such Person and its Consolidated Subsidiaries which would, in
conformity with GAAP, be properly classified as a liability on the Consolidated
balance sheet of such Person that are not secured in any manner by a Lien on any
property of such Person or its Consolidated Subsidiaries, and shall in any event
include (without duplication) the following as each relates to such Person and
its Consolidated Subsidiaries: (a) all unsecured Debt, (b) all Unfunded
Obligations, (c) all Securities that are convertible into Debt, (d) all accounts
payable, (e) all Guarantees of Unsecured Liabilities of other Persons and (f)
unsecured subordinated Debt.
"Utilization Date" means, in relation to any Advance, the date for the
making of the Advance as specified by the Borrower in the relevant Request.
"Wholly-Owned Consolidated Subsidiary" means, with respect to any
Person, any Consolidated Subsidiary of such Person all of the shares of capital
stock (and all rights and options to purchase such shares) of which (other than
directors' qualifying shares or minimum interests issued to other Persons solely
to satisfy legal requirements) are owned, beneficially and of record, by such
Person and/or one or more Wholly-Owned Consolidated Subsidiaries of such Person.
"Winding Up" has the meaning set forth in Clause 1.2 (Construction).
1.2 Construction.
------------
In this Agreement, unless the context otherwise requires:
(a) a reference to "Assets" includes property and rights of every kind,
present, future and contingent (including uncalled share capital), and
every kind of interest in an asset;
(b) a reference to a "person" or "Person" means an individual, a company,
a
-26-
a corporation, a partnership, a limited liability company, a joint
venture, a trust or unincorporated organization, joint stock company
or other similar organization, a government or any political
subdivision thereof, a court, or any other legal entity, whether
acting in an individual, fiduciary or other capacity;
(c) a reference to the "Winding Up" of a Person shall be construed so as
to include any equivalent or analogous proceedings under the law of
any jurisdiction in which such Person is incorporated or any
jurisdiction in which such Person carries on business;
(d) a reference to a Contracting Party or a Reference Lender is, where
relevant and subject to Clauses 18 (The Administrative Agent and the
Arranger) and 24 (Alterations to the Contracting Parties), a reference
to or to include, as appropriate, their respective successors and
permitted assigns;
(e) references to Clauses, Schedules, Exhibits and Attachments are
references to, respectively, clauses of and schedules, exhibits and
attachments to this Agreement;
(f) a reference to another agreement shall be construed as a reference to
that other agreement as it may have been, from time to time, amended,
varied, supplemented or assigned;
(g) references to "GAAP" shall mean:
(1) as to a particular Person other than the Borrower and each
Guarantor, such accounting practice as, in the opinion of the
independent accountants of recognized national standing regularly
retained by such Person and acceptable to the Administrative
Agent, those principles and practices (i) which are recognized as
such by the Financial Accounting Standards Board of the U.S.,
(ii) which are applied for all periods after the date hereof in a
manner consistent with the manner in which such principles and
practices were applied to the most recent audited financial
statements of the relevant Person furnished to the Lenders or
where a change therein has been concurred in by such Person's
independent auditors, and (iii) which are consistently applied
for all periods after the date hereof so as to reflect properly
the financial condition, and results of operations and changes in
financial position, of such Person; and
(2) with respect to the Borrower and each Guarantor, the generally
-27-
accepted accounting principles adopted by the Borrower and the
Company as set forth in the financial statements delivered by
such Person to the Financial Institutions in respect of the
fiscal year of the Borrower ending December 31, 1998. For the
avoidance of doubt, the Contracting Parties agree that, although
generally accepted accounting principles may require the
inclusion of Strategic Investees, for accounting purposes, in the
consolidated financial statements of the Borrower and the
Guarantors, in this Agreement references to GAAP (other than in
Clauses 14.1(d) and 15.1(c)) shall be made as if the Strategic
Investees do not exist. If there is a change in such accounting
practice as to the Borrower and the Company that could affect the
Borrower's or any Guarantor's ability to comply with the terms of
any Finance Document, the parties hereto agree to review and
discuss such changes in accounting practice and the terms of this
Agreement for a period of no more than thirty (30) days with a
view to amending this Agreement so that the financial measures of
the Borrower's or such Guarantor's (as the case may be) operating
performance and financial condition are substantially the same
after such change as they were immediately before such change.
Nothing contained in the preceding sentence shall be construed to
require a Contracting Party to consent to the terms of an
amendment to this Agreement. If the parties hereto are unable to
agree on such amendments to this Agreement after good faith
negotiations for such 30-day period, the financial measures of
the Borrower's or such Guarantor's (as the case may be) operating
performance and financial condition shall remain the same after
such change as they were immediately before such change.
(h) a reference to "Consolidated" means the consolidation of accounts in
accordance with GAAP, provided that in the case of the Borrower or any
Guarantor, a reference to "Consolidated" means the consolidation, in
accordance with GAAP, of the accounts of the Borrower or such
Guarantor, as the case may be, and its Subsidiaries other than
Strategic Investees;
(i) a reference to a time of day is, unless otherwise stated, a reference
to New York City time;
(j) a period of a month or months is the period commencing on the first
day thereof and ending on the numerically corresponding day in the
relevant
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subsequent month or, if there is no such day, the last day of the
relevant subsequent month;
(k) the index to and the headings in this Agreement are for convenience
only and shall be ignored in construing this Agreement;
(l) in the computation of periods of time from a specified date to a later
specified date, the word "from" means "from and including", the words
"to" and "until" each mean "to but excluding", and the word "through"
means "to and including";
(m) a reference to a "law" shall be construed to mean any law, including
common or customary law and any constitution, decree judgment,
legislation, order, ordinance, regulation, rule, statute, treaty or
other legislative or regulatory measure, in each case of any
applicable jurisdiction whatever;
(n) a reference to a statute shall be construed as a reference to such
statute as amended or reenacted from time to time; and
(o) interpretation of the terms and conditions of the Facility prior to
the Effective Date shall be governed by the Existing Facility
Agreement and from and after the Effective Date shall be governed by
this Agreement.
This Agreement and the other Finance Documents are the result of
negotiations among and have been reviewed by counsel to the Contracting
Parties hereto. Accordingly, they shall not be construed against the
Administrative Agent or any Lender merely because of the Administrative
Agent's or such Lenders' involvement in their preparation.
2. FACILITIES
2.1 Facilities.
----------
Subject to the terms of this Agreement, the Lenders severally grant to the
Borrower the following facilities:
(a) a committed revolving advance facility whereby the Lenders shall, when
requested by the Borrower, make Revolving Advances to the Borrower;
(b) a term advance facility whereby the Borrower may elect to convert
Revolving Advances outstanding into one borrowing of Term Advances in
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accordance with Clause 2.6 (Term-Out Option); and
(c) a committed swingline advance facility under which the Swingline
Lenders shall, when requested by the Borrower, make Swingline Advances
to the Borrower.
2.2 Facility Limits.
---------------
(a) The Swingline Facility is not independent of the Revolving Credit
Facility. The aggregate principal amount of all outstanding Advances
(including Swingline Advances) at any time shall not exceed the Total
Revolving Credit Commitments at that time; and
(b) The aggregate amount of all outstanding Swingline Advances at any one
time shall not exceed the Total Swingline Commitments at that time.
2.3 A Lender's Individual Limit.
---------------------------
(a) Notwithstanding any other provisions of this Agreement, a Lender is
not obliged to make an Advance if it would cause its Applicable
Outstandings to exceed its Overall Commitment or its outstanding
Swingline Advances to exceed its Swingline Commitment.
(b) For the purpose of this Clause 2.3:
(i) the "Applicable Outstandings" of a Lender on any Utilization Date
is the aggregate principal amount of all Advances made by that
Lender and its Affiliated Lender(s) which would be outstanding on
that Utilization Date, if:
(A) all outstanding Advances having Maturity Dates which fall on
or before that Utilization Date are repaid; and
(B) all Advances to be made on or before that Utilization Date
and in respect of which a Request has been received by the
Administrative Agent are made.
(ii) the "Overall Commitment" of a Lender means, in the case of a
Lender which is a Revolving Credit Lender, its Revolving Credit
Commitment or, in the case of a Swingline Lender which is not a
Revolving Credit Lender, the Revolving Credit Commitment of its
Affiliated Lender which is a Revolving Credit Lender.
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(c) If the operation of Clause 5.1(c) (Utilization of Revolving Credit
Facility) or Clause 5.2(c) (Utilization of Swingline Facility) would
cause the Applicable Outstandings of a Lender (the "Affected Lender")
to exceed its Overall Commitment, then:
(i) the affected Lender will participate in the relevant Utilization
to the extent that its Applicable Outstandings do not exceed its
Overall Commitment;
(ii) the amount of the Advance to be made by each other Lender under
the relevant Clause will be recalculated in accordance with that
Clause, but for the purpose of the recalculation the affected
Lender Commitment will be deducted from the Total Revolving
Credit Commitments or the Total Swingline Commitments (as
appropriate) and the amount of the affected Lender Advance in
that Utilization (if any) will be deducted from the Requested
Amount; and
(iii) the calculation in sub-paragraph (ii) above will be applied to
each Lender in turn until the amount of its Advance by it under
that Clause is determined.
(d) If an Event of Default is outstanding, then the Swingline Lenders may
require the Swingline Facility to be canceled in accordance with its
terms. In this event, the Borrower shall borrow (a "Mandatory
Borrowing"), and each of the Lenders unconditionally and irrevocably
agrees to fund in accordance with paragraph (e) below, a LIBOR Advance
with an Interest Period of one month's duration to refinance the
amount outstanding under the Swingline Facility irrespective of
whether any condition precedent to that Advance or any other term of
this Agreement has not been satisfied or complied with.
(e) (i) The amount of each Lender's participation in a Mandatory
Borrowing shall be the proportion which the Lender's then
Revolving Credit Commitment bears to the aggregate Revolving
Credit Commitments of all the Revolving Credit Lenders on that
date.
(ii) Each Lender shall make its participation in a Mandatory
Borrowing available to the Administrative Agent, on the date
falling 5 days after receipt of notice thereof from the
Administrative Agent, to be applied in repayment of the amount
outstanding under the Swingline Facility.
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2.4 Nature of the Lenders', Borrower's and Guarantors' Rights And Obligations
-------------------------------------------------------------------------
Under This Agreement.
--------------------
(a) (i) The obligations of each Financial Institution owed under the
Finance Documents are several, and failure of a Financial
Institution to carry out those obligations shall not relieve any
other party of its obligations under the Finance Documents. No
Financial Institution shall be responsible for the obligations
of any other Financial Institution under the Finance Documents.
(ii) The obligations of the Borrower and each Guarantor towards each
of the Financial Institutions under the Finance Documents are
given to each of them as separate and independent rights, and
each Financial Institution may, except as otherwise stated in
this Agreement, separately enforce those rights.
(b) (i) Any and each Guarantor by and upon its execution of this
Agreement or a Guarantor Joinder Agreement irrevocably appoints
the Borrower to act on its behalf as its agent in relation to
the Finance Documents and irrevocably authorizes the Borrower on
its behalf to give all notices and instructions to execute on
its behalf any Guarantor Joinder Agreement and to make such
agreements capable of being given or made by such Guarantor
notwithstanding that they may affect such Guarantor, without
further reference to or the consent of such Guarantor and such
Guarantor shall be bound thereby as though such Guarantor itself
had given such notices and instructions or executed or made such
agreements.
(ii) Every act, omission, agreement, undertaking, settlement, waiver,
notice or other communication given or made by the Borrower
under this Agreement, or in connection with this Agreement
(whether or not known to any Guarantor and whether occurring
before or after such other Guarantor became a party under this
Agreement) shall be binding for all purposes on all the
Guarantors as if the Guarantors had expressly concurred with the
same. In the event of any conflict between any notices or other
communications of the Borrower and any Guarantor, those of the
Borrower shall prevail.
2.5 Extension of Final Maturity Dates.
---------------------------------
(a) Not later than the first Anniversary and each Anniversary thereafter
(which
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is one year prior to the applicable Final Maturity Date), the Borrower
may, by notice to the Administrative Agent (which shall promptly
notify the Lenders) request each Lender to extend the Final Maturity
Date for a further year.
(b) Each Lender so requested will notify the Administrative Agent in
writing no later than 30 days after the applicable Anniversary whether
or not it wishes the Final Maturity Date applicable to that Lender's
Commitment to be extended by a further year. If a Lender notifies the
Administrative Agent that it does not wish to extend the Final
Maturity Date for a further year (a "Non-Extending Lender") it shall
also in the same notice state either:
(i) that it wishes its Advances together with all other amounts
payable to such Lender under the Finance Documents to be prepaid
or assumed by another Lender or financial institution; or
(ii) that it wishes its Advances and all other amounts payable to such
Lender to be repaid on the then applicable Final Maturity Date.
If a Non-Extending Lender specifies the option in paragraph (i) of
this sub-clause, then provided its Advances and all other amounts
payable to it have been prepaid or assumed by another Lender or
financial institution in full it shall, on the Business Day following
such prepayment or assumption, notify the Administrative Agent to such
effect.
(c) If a Lender notifies the Administrative Agent that it agrees to extend
as requested, and Lenders with Commitments totaling not less than 80
percent of the Total Revolving Credit Commitments (including that of
the first mentioned Lender) also so agree, the Final Maturity Date
applicable to that Lender's Commitment shall be extended for a further
year from the then current Final Maturity Date and the Agent shall so
notify that Lender and the Borrower thereof. For the avoidance of
doubt the Final Maturity Date applicable to the Commitment of a Non-
Extending Lender shall be the Final Maturity Date prior to the request
for an extension.
(d) Upon receipt of notification by the Administrative Agent that Lenders
with Commitments totaling at least 80 percent (but less than 100
percent of Total Revolving Credit Commitments) have agreed to extend
as requested the Borrower may, by notice to the Administrative Agent:
(i) request the other Lenders or any of them to indicate whether or
not
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they are prepared to increase their Commitments (in place of the
Lenders which have not agreed to extend as requested);
(ii) introduce another financial institution reasonably acceptable to
the Administrative Agent to cover all or part of the shortfall;
or
(iii) allow the Total Revolving Credit Commitments to reduce by an
amount equal to the Commitments of the Non-Extending Lenders.
Each Non-Extending Lender shall enter into such documentation as the
Borrower and the Administrative Agent may reasonably require to transfer
its Commitment to the existing Lenders or new financial institutions.
(e) No request to extend the Final Maturity Date may be made by the
Borrower nor shall any agreement to extend become effective if there
is a Default under the Facility on the date of such request.
(f) No extension of the Final Maturity Date shall be effective until (i)
the Administrative Agent (on behalf of those Lenders which have
agreed, to extend) has received any applicable extension fees payable
to the extending Lenders and (ii) the Administrative Agent has
received confirmation from each of the Non-Extending Lenders who has
specified the option in paragraph (i) of sub-clause (b) above that its
Advances and all other amounts payable to it under the Finance
Documents have been prepaid or assumed in full.
(g) No Lender is under any obligation to extend the Final Maturity Date
applicable to its Commitment or to increase its Commitment under
paragraph (d) above but upon having so agreed, it shall be obliged to
extend the Final Maturity Date in accordance with Clause 2.5(c) or,
subject to appropriate documentation being entered into by the
relevant parties, to increase its Commitment in accordance with
paragraph (d) above.
(h) If any Lender does not give any notice in accordance with this Clause
2.5 following a request to extend from the Borrower that Lender shall
be deemed to have refused to extend the Final Maturity Date and to
have selected option (ii) in sub-clause (b) above (namely, for its
Advances and all other amounts to be repaid on the then applicable
Final Maturity Date).
(i) On each extension of the Final Maturity Date the Administrative Agent
shall as soon as practicable notify the Borrower and each Lender which
Lenders have agreed to extend the Final Maturity Date and their
individual
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Commitments.
(j) Where the Final Maturity Date is extended under this Clause 2.5 in
respect of less than all the Lenders, the Lenders in respect of which
such extension takes effect shall, on and from the Final Maturity Date
for the Non-Extending Lenders, be deemed to be all the Lenders for the
purposes of the definitions of "Commitment", and "Total Revolving
Credit Commitments", and the provisions of this Agreement shall be
construed accordingly provided that where a "Non-Extending Lender"
does not receive all amounts due and payable to it on the Final
Maturity Date applicable to that Non-Extending Lender's Commitment,
such Non-Extending Lender's Commitment shall be included within the
definitions of "Commitment" and "Total Revolving Credit Commitments"
for voting purposes under this Agreement.
2.6 Term-Out Option.
---------------
(a) Not later than one year prior to the applicable Final Maturity Date,
the Borrower may, by notice in the form set forth in Part II of
Schedule 4 to the Administrative Agent (which shall promptly notify
the Lenders) request that all Revolving Advances of a Lender
outstanding to the Borrower on the date which is one year prior to the
applicable Final Maturity Date (the "Term-Out Date") be converted
automatically into one Term Advance in accordance with this clause.
(b) In any request given under paragraph (a) above, the Borrower shall
also specify:
(i) whether the Term Advance of each Lender is to be initially a
LIBOR Advance or a Base Rate Advance or a mixture of the two; and
(ii) if the Term Advance of a Lender is to be a LIBOR Advance, the
duration of its first Interest Period selected in accordance with
Clause 7.5 (Interest Periods for Term Advances).
(c) No such request may be made by the Borrower if there is a Default.
(d) The Borrower shall execute and deliver to each Lender a Term Note upon
the exercise of the Term-Out Option.
(e) The Borrower agrees to pay to the Lenders a conversion fee upon the
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exercise of the Term-Out Option. Such fee will be calculated and
payable in accordance with Clause 19.6 (Conversion Fee).
(f) If the Borrower notifies the Administrative Agent in accordance with
paragraph (a) above, all Advances of a Lender which are outstanding on
the Term-Out Date shall be automatically converted on the Term-Out
Date to a Term Advance repayable on the Final Repayment Date in
accordance with Clause 8 (Repayment and Prepayment of Advances),
provided that if any Swingline Advances are outstanding on the Term-
Out Date such Swingline Advances shall be deemed to have been
converted to Revolving Advances immediately prior to the incurrence of
the Term Advances.
(g) If the Term-Out Option is exercised, from and after the Term-Out Date
the Borrower may not borrow any further Revolving Advances or
Swingline Advances.
(h) A notice given by the Borrower under this Clause shall be irrevocable.
2.7 Notes.
-----
(a) The obligation of the Borrower to repay the Revolving Advances of each
Revolving Credit Lender shall, in addition to this Agreement, be
evidenced by the Revolving Notes.
(b) The obligation of the Borrower to repay the Swingline Advances of each
Swingline Lender shall, in addition to this Agreement, be evidenced by
the Swingline Notes.
(c) The obligation of the Borrower to repay the Term Advance of each
Lender shall, in addition to this Agreement, be evidenced by a Term
Note.
3. PURPOSE OF THE FACILITY
(a) The proceeds of each Advance shall be applied by the Borrower towards
its general corporate purposes.
(b) The proceeds of a Swingline Advance may not be applied towards the
repayment of an outstanding Swingline Advance.
(c) Without prejudice to paragraph (a) above and the remaining provisions
of this Agreement, none of the Financial Institutions shall be bound
to inquire
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as to, nor shall any of them be responsible for, the application by
the Borrower of the proceeds of any Advance.
4. CONDITIONS PRECEDENT
4.1 Conditions Precedent to each Request and each Advance.
-----------------------------------------------------
The obligation of each Lender to make an Advance is subject to the
conditions precedent that:
(a) both on the date of the relevant Request and on the relevant
Utilization Date:
(i) the matters represented by the Borrower and the Guarantors and
set forth in Clause 14 (Representations and Warranties) are
correct in all material respects on and as at each of those
dates as if made on each date;
(ii) no Default has occurred and is continuing or would result from
the making of such Advance;
(iii) the Advance would not cause Adjusted Unsecured Liabilities to
exceed the Borrowing Base or otherwise cause Clause 2.2
(Facility Limits) to be contravened;
(iv) a Borrowing Base Shortfall shall not have occurred and be
continuing; and
(v) no Event of Default specified in Clauses 16.6 (Insolvency), 16.7
(Insolvency Proceedings) or 16.8 (Appointment of Receivers and
Managers) shall have occurred in relation to the Investment
Adviser, such Clauses to be construed as if references therein
to the Borrower and the Guarantors were references to the
Investment Adviser;
provided that paragraphs (i) to (v) above shall not apply in respect of an
Advance to be applied solely in or towards repayment of an outstanding
Advance on the relevant Utilization Date or in connection with a Mandatory
Borrowing.
(b) No more than two Revolving Advances and no more than one Swingline
Advance may be made on the same day, no more than 12 Advances may be
outstanding at any one time and no more than one LIBOR Advance
-37-
with a Term of seven days may be outstanding at any one time.
(c) the Administrative Agent shall have received Revolving Notes and/or
Swingline Notes, as the case may be, executed by the Borrower, payable
to each Lender and complying with the terms of Clause 2.7 (Notes).
The acceptance of the benefits of each Advance shall constitute a
representation and warranty by the Borrower and each Guarantor to each
Lender that all of the applicable conditions specified above exist as of
the relevant Utilization Date. All of the certificates and other documents
and papers referred to in this Clause 4.1, unless otherwise specified,
shall be delivered to the Administrative Agent at its address specified in
Clause 23.1 (Address) for the account of each Lender and in sufficient
counterparts or copies for each Lender and shall be in form and substance
as specified herein or otherwise satisfactory to the Administrative Agent.
4.2 Confirmation of Collateral.
--------------------------
No Advance (other than an Advance to be applied solely in or towards
repayment of an outstanding Advance or in connection with a Mandatory
Borrowing) may be disbursed to the Borrower unless on the proposed
Utilization Date the Administrative Agent is satisfied that the Borrowing
Base will equal or exceed Adjusted Unsecured Liabilities after the
disbursement to the Borrower of such Advance and all other Advances to be
made on such Utilization Date, taking into account any prepayments or
repayments of Advances which are to be made by the Borrower on such
Utilization Date.
5. UTILIZATION OF THE FACILITY
5.1 Utilization of Revolving Credit Facility.
----------------------------------------
(a) Subject to the terms of this Agreement, the Borrower may utilize the
Revolving Credit Facility by delivering a duly completed Request to
the Administrative Agent, not later than 9:00 a.m. three Business Days
prior to the relevant Utilization Date in relation to a LIBOR Advance
and two Business Days prior to the relevant Utilization Date in
relation to a Base Rate Advance.
(b) Each Request for a Revolving Advance shall specify:
(i) that it is utilization of the Revolving Credit Facility;
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(ii) the proposed Utilization Date, which shall be a Business Day
falling two days or more before the then latest Final Maturity
Date;
(iii) the Requested Amount, which shall be a minimum of $10,000,000
and integral multiples in excess thereof of $500,000;
(iv) whether the Advances are to be LIBOR Advances or Base Rate
Advances;
(v) the Term of any requested LIBOR Advance, which shall be a period
of seven days or one, two, three or six months, or such other
period as may be agreed between the Borrower and the Lenders,
provided that (A) no such Term may end later than the then
current Final Maturity Date, (B) if any such monthly Term begins
on a day for which there is no numerically corresponding day in
the last calendar month of such Term, such monthly Term shall
end on the last Business Day of such last calendar month, and
(C) if any such Term would otherwise expire on a day which is
not a Business Day, such Term shall expire on the next
succeeding Business Day, provided that if any such Term would
otherwise expire on a day which is not a Business Day but is a
day of the month after which no further Business Day occurs in
such month, such Term shall expire on the next preceding
Business Day; and
(vi) the details of the bank and account to which the proceeds of the
Advances are to be made available to the Borrower in accordance
with Clause 10.1 (Funds and Place).
(c) The Administrative Agent shall, not later than 1:00 p.m. on the date
of receipt of the Request notify each Revolving Lender of the details
of the requested Revolving Advance and the amount of its participation
in the Revolving Advance.
(d) The amount of each Revolving Lender's Revolving Advance will be the
proportion of the Requested Amount which its Revolving Commitment
bears to the Total Revolving Credit Commitments on the date of receipt
of the relevant Request, adjusted, if necessary, to reflect the
operation of Clause 2.3 (A Lender's Individual Limit).
(e) Subject to the terms of this Agreement, each Revolving Lender shall
make its participation in the Revolving Advance available to the
Administrative Agent for the Borrower on the proposed Utilization
Date.
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(f) If the Borrower fails to select a Term for a Revolving Advance in
accordance with paragraph (b) above, such Advance will be a LIBOR
Advance with a Term of one month.
5.2 Utilization of Swingline Facility.
---------------------------------
(a) Subject to the terms of this Agreement, the Borrower may utilize the
Swingline Facility by delivering a duly completed Request to the
Administrative Agent not later than 11:00 a.m. on the relevant
Utilization Date in relation to a Swingline Advance.
(b) Each Request for a Swingline Advance shall specify:
(i) that it is utilization of the Swingline Facility;
(ii) the proposed Utilization Date, which shall be a Business Day
falling two or more days before the then latest Final Maturity
Date;
(iii) the Requested Amount, which shall be:
(A) a minimum of $1,000,000 and integral multiples in excess
thereof of $500,000; or
(B) the balance of the undrawn Total Swingline Commitments; or
(C) such other amount as the Administrative Agent, the Swingline
Lenders and the Borrower may agree;
(iv) the Term, which shall:
(A) end on or before the then latest Final Maturity Date, and
(B) be a period not exceeding ten Business Days; and
(v) the details of the bank and account to which the proceeds of the
Swingline Advance are to be made available to the Borrower in
accordance with Clause 10.1 (Funds and Place).
(c) The Administrative Agent, shall not later than 1:00 p.m. on the date
of receipt of the Request, notify each Swingline Lender of the details
of the requested Swingline Advance and the amount of its participation
in the Swingline Advance.
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(d) The amount of each Swingline Lender's Swingline Advance will be the
proportion of the Requested Amount which its Swingline Commitment
bears to the Total Swingline Commitments on the date of receipt of the
relevant Request, adjusted, if necessary, to reflect the operation of
Clause 2.3 (A Lender's Individual Limit).
(e) Subject to the terms of this Agreement, each Swingline Lender shall
make the Swingline Advance available to the Administrative Agent for
the Borrower on the relevant Utilization Date.
6. REDUCTION AND CANCELLATION OF THE TOTAL COMMITMENTS
6.1 Automatic Reduction of each Lender's Commitment.
-----------------------------------------------
The amount of each Lender's Commitment shall (if not already so reduced or
canceled) be automatically reduced to zero at 5:00 p.m. on the Final
Maturity Date applicable to that Lender.
6.2 Voluntary Cancellation.
----------------------
(a) (i) Subject to sub-paragraph (ii) below, the Borrower may, on giving
not less than five days' prior written notice to the
Administrative Agent (which shall promptly give notice thereof
to the Revolving Lenders), cancel the Total Revolving Credit
Commitments in whole or in part (but, if in part, in a minimum
amount, and integral multiples, of $10,000,000).
(ii) Any cancellation may only take effect in respect of the
unutilized portion of the Facility.
(b) (i) Subject to sub-paragraph (ii) below, the Borrower may, on giving
not less than five days' prior written notice to the
Administrative Agent (which shall promptly give notice thereof
to the Swingline Lenders), cancel the Total Swingline
Commitments in whole or in part (but, if in part, in a minimum
amount, and integral multiples, of $5,000,000).
(ii) Any cancellation may only take effect in respect of the
unutilized portion of the Swingline Facility.
(c) Any cancellation in part under this Clause 6.2 shall be applied
against the Commitment of each Lender pro rata based upon the
proportion which
-41-
such Lender's Revolving Credit Commitment or
Swingline Commitment, as the case may be, bears to the Total Revolving
Credit Commitment or Total Swingline Commitment, as the case may be,
on the date of cancellation.
6.3 Irrevocable.
-----------
(a) Any notice by the Borrower under this Clause 6 of cancellation shall
be irrevocable and shall specify the date upon which the cancellation
is to become effective and the amount of the Total Revolving Credit
Commitments or the Total Swingline Commitments to be canceled.
(b) No amount of the Total Revolving Credit Commitments or the Total
Swingline Commitments canceled under this Agreement may subsequently
be reinstated unless agreed by all the Lenders and the Administrative
Agent.
7. INTEREST
7.1 Rate.
----
The rate of interest applicable to each Advance for its Term shall be the
rate per annum determined by the Administrative Agent to be the aggregate
of:
(a) in the case of a LIBOR Advance, the Applicable LIBOR Margin plus LIBOR
relative to that Advance;
(b) in the case of a Base Rate Advance, the Applicable Base Rate Margin
plus the Base Rate relative to that Advance; or
(c) in the case of a Swingline Advance, the Applicable Base Rate Margin
plus the Base Rate relative to that Advance.
-42-
7.2 Due Dates.
---------
Save as otherwise provided in this Agreement, interest shall accrue on the
unpaid principal amount of each Advance from and including the Utilization
Date to and including repayment and:
(a) accrued interest on each LIBOR Advance is payable by the Borrower on
its Maturity Date or the last day of its Interest Period and, if the
Term of any LIBOR Advance is longer than three months, at three month
intervals from the Utilization Date of that Advance or the first day
of the relevant Interest Period, as the case may be;
(b) accrued interest on each Base Rate Advance is payable by the Borrower
in arrears in respect of the period in which such Base Rate Advance
was outstanding in the previous three month period on each March 31,
June 30, September 30 and December 31 and the Final Maturity Date and
the Final Repayment Date; and
(c) accrued interest on each Swingline Advance is payable by the Borrower
in arrears in respect of the period in which such Swingline Advance
was outstanding in the previous three month period on each March 31,
June 30, September 30 and December 31 and the Final Maturity Date.
7.3 Default Interest.
----------------
(a) If the Borrower or any Guarantor fails to pay any amount payable by it
under this Agreement on the due date, it shall, on demand by the
Administrative Agent from time to time, pay interest on the overdue
amount from the due date up to the date of actual payment, as well
after as before judgment, at a rate, subject to paragraph (c) below,
determined by the Administrative Agent to be two percent (2%) per
annum above:
(i) if the overdue amount relates to a Swingline Advance, the
Applicable Base Rate Margin plus the Base Rate; or
(ii) the higher of:
(A) (in the case of an Advance which has become due and payable
prior to its Maturity Date or, if it is a Term Advance,
prior to the last day of the relevant Interest Period) the
rate applicable to the overdue amount under Clause 7.1(a)
(Rate) immediately before the due date (if of
-43-
principal); and
(B) (in all other cases) the rate which would have been payable
if the overdue amount had, during the period of non-payment,
constituted a LIBOR Advance in the currency of the overdue
amount made under this Agreement for successive Terms of up
to three months, as the Administrative Agent may determine
from time to time (each a "Designated Term").
(b) The rate of interest shall be determined:
(i) if calculated by reference to the Base Rate, on each day; or
(ii) if calculated by reference to LIBOR, two Business Days before the
first day of the relevant Designated Term.
(c) If the Administrative Agent (after consultation with the Reference
Lenders) determines that deposits in the currency of the overdue
amount are not or were not, as the case may be, being made available
by the Reference Lenders to leading banks in the London Interbank
Market in the ordinary course of business, the rate shall be
determined by reference to the cost of funds to the Reference Lenders
from such other sources as the Administrative Agent (after
consultation with the Reference Lenders) may from time to time
reasonably determine.
(d) Interest shall be compounded monthly (if calculated by reference to
the Base Rate) or at the end of each Designated Term (if calculated by
reference to LIBOR).
7.4 Calculation of Interest.
-----------------------
Interest shall accrue from day to day, and be computed on the basis of:
(a) in the case of each LIBOR Advance, each Base Rate Advance and each
Swingline Advance in respect of which interest thereon is determined
by reference to the Federal Funds Rate, 360 days and for the actual
number of days elapsed; and
(b) in the case of a Base Rate Advance or a Swingline Advance in respect
of which interest thereon is determined by reference to the Prime
Rate, 365/366 days and for the actual number of days elapsed.
-44-
7.5 Interest Periods for Term Advances.
----------------------------------
(a) During the Term-Out Period the Borrower may designate that each
Lender's Term Advance (or portions thereof) be maintained as a LIBOR
Advance or a Base Rate Advance, provided that (i) no portion of the
Term Advance of a Lender shall be maintained as a LIBOR Advance if the
amount thereof is less than $10,000,000, (ii) there shall be no more
than six LIBOR Advances outstanding at any time and (iii) there shall
be no more than one LIBOR Advance with a seven day Interest Period
outstanding at any time. If the Borrower requests that the Term
Advance (or any portion thereof) of a Lender be maintained as a LIBOR
Advance, the Borrower shall select the Interest Periods therefor.
Such selection will be made by the Borrower in the Request given by it
upon exercise of the Term-Out Option and during the Term-Out Period,
by a notice received by the Administrative Agent not later than 9:00
a.m. three Business Days before the commencement of each Interest
Period.
(b) During the Term-Out Period, each Interest Period for the Term Advance
(or any portion thereof) of each Lender will commence on the Term-Out
Date or the expiry of the immediately preceding applicable Interest
Period.
(c) Each Interest Period will be of either seven days or one, two, three
or six months as so selected under paragraph (a) above subject as
provided below, provided that (i) a monthly Interest Period which
commences on the last Business Day of a month shall end on the last
Business Day of the corresponding month, (ii) if any monthly Interest
Period begins on a day for which there is no numerically corresponding
day in the last calendar month of such Interest Period, such Interest
Period shall end on the last Business Day of such last calendar month,
(iii) if any Interest Period would otherwise expire on a day which is
not a Business Day, such Interest Period shall expire on the next
succeeding Business Day, provided that if any Interest Period would
otherwise expire on a day which is not a Business Day but is a day of
the month after which no further Business Day occurs in such month,
such Interest Period shall expire on the next preceding Business Day
and (iv) no Interest Period shall extend beyond the Final Payment
Date.
(d) The Borrower shall have the option, upon delivery of irrevocable
written notice of not less than three Business Days before the last
day of an Interest Period of any LIBOR Advance in respect of a
Lender's Term Advance (or any portion thereof), (i) to convert such
LIBOR Advance to
-45-
a Base Rate Advance or (ii) to continue such LIBOR Advance as a
LIBOR Advance. If the Borrower elects to continue such Advance as
a LIBOR Advance pursuant to clause (ii), the Borrower shall
select an Interest Period in accordance with paragraph (a) above.
(e) If the Borrower fails to select an Interest Period for an
outstanding Term Advance (or any portion thereof) that is a LIBOR
Advance during the Term-Out Period in accordance with paragraph
(a) above, that Interest Period will be one month.
(f) The Borrower will ensure that Interest Periods in respect of an
Advance or Advances equal to a Repayment Installment shall be
selected (and if necessary shortened) so as to expire on a
Repayment Date.
(g) Subject to the foregoing, the Borrower may subdivide the Term
Advance of a Lender into no more than six portions and may
consolidate and further subdivide any such portions during the
Term-Out Period, provided that no more than six portions are
outstanding on any date.
7.6 Notification.
------------
Each determination of a rate of interest by the Administrative Agent under
this Agreement shall promptly be notified to any Contracting Party upon the
request of such party.
8. REPAYMENT AND PREPAYMENT OF ADVANCES
8.1 Repayment of Advances.
---------------------
(a) The Borrower shall repay each Advance (other than a Term Advance)
made to it in full on its Maturity Date to the Administrative
Agent for the account of the Lenders.
(b) The Borrower shall repay the Term Advance of each Lender
outstanding to it (if made) in full in twelve quarterly
installments on the last day of each March, June, September and
December (each a "Term Payment Date"). Each of the first four
installments shall have a principal amount equal as nearly as
possible to 5 percent of the aggregate principal amount of the
Term Advance of each Lender outstanding at the
46
beginning of the Term-Out Period and each of the remaining
installments shall have a principal amount equal as nearly as
possible to 10 percent of the aggregate principal amount of the
Term Advance of each Lender outstanding at the beginning of the
Term-Out Period. The Borrower's first such repayment installment
shall be paid on the Term Payment Date immediately following the
Term-Out Date. The Borrower's final repayment installment shall
be repaid on the Final Repayment Date and shall be in an amount
sufficient to repay in full all outstanding Term Advance of each
Lender.
8.2 Prepayment of Advances.
----------------------
(a) The Borrower may, by giving not later than 9:00 a.m. on the
relevant day not less than three Business Days' irrevocable
written notice to the Administrative Agent (which shall be
irrevocable) and subject to Clause 26(a)(iii) (Indemnities),
prepay any Revolving Advance or Term Advance made to it in a
minimum amount of US $1,000,000 and integral multiples of
$500,000 in excess thereof.
(b) The Borrower may prepay at any time a Swingline Advance made to
it in a minimum amount of $1,000,000 and integral multiples of
$500,000 in excess thereof.
(c) The Borrower may not pre-pay any Advance except as expressly
provided in this Agreement. Any Advance prepaid prior to the
Final Maturity Date (or the Term-Out Date if the Term-Out Option
has been exercised) may be reborrowed in accordance with the
provisions of this Agreement.
(d) Prepayments shall be made together with accrued interest and all
other amounts then due under this Agreement through the date of
prepayment.
(e) Any partial prepayment of the Term Advance of a Lender shall be
applied against the Repayment Installments in chronological
order.
8.3 Mandatory Prepayment/Borrowing Base Shortfall.
---------------------------------------------
If a Compliance Certificate or a Borrowing Base Certificate indicates that
Adjusted Unsecured Liabilities exceed the Borrowing Base as of the date
referenced in such certificate (a "Borrowing Base Shortfall"), then the
Borrower shall, before the close of business on the date that is ten days
after such certificate is delivered to the Administrative Agent, (a)
eliminate the Borrowing Base Shortfall by prepaying Advances and/or
increasing the Borrowing Base and (b) deliver a new Borrowing Base
Certificate to the Administrative Agent demonstrating that the Borrowing
Base is equal to or greater than Adjusted Unsecured Liabilities as of the
date of such certificate.
47
9. MARKET DISRUPTION
(a) If, in relation to any proposed LIBOR Advance:
(i) where LIBOR is to be determined by reference to the Reference
Lenders and no, or only one, Reference Lender is able to supply
a rate for the purposes of determining LIBOR or the
Administrative Agent otherwise determines (which determination
shall be conclusive and binding on all the Contracting Parties)
that adequate and fair means do not exist for ascertaining
LIBOR relative to the LIBOR Advance; or
(ii) the Administrative Agent receives notification:
(A) from Lenders participating in more than 50 percent by value
of the proposed LIBOR Advance that, in their opinion,
Dollar deposits of equal duration to the Term requested
will not be available to them in the London Interbank
Market in the ordinary course of business in sufficient
amounts to fund their LIBOR Advance for that Term; or
(B) from Lenders participating in more than 50 percent by value
of the proposed LIBOR Advance that, by reason of
circumstances affecting the London Interbank Market, the
cost to them of deposits obtained in the London Interbank
Market to fund their LIBOR Advances would be in excess of
the relevant LIBOR,
the Administrative Agent shall, promptly serve a notice (a "Suspension
Notice") on the Borrower and the Lenders stating that a suspension
event has occurred and that this Clause 9 is in operation.
(b) After a Suspension Notice has been served:
(i) notwithstanding any other provision of this Agreement, the
LIBOR Advance to which such Suspension Notice relates shall not
be made;
(ii) no further Requests for a LIBOR Advance or for interest to be
calculated on a LIBOR basis may be delivered by the Borrower
until the Administrative Agent notifies the Borrower that the
event specified in the Suspension Notice no longer prevails,
which the
48
Administrative Agent shall do as soon as practicable after so
ascertaining;
(iii) if the Borrower so requires, within five Business Days of
service of a Suspension Notice, the Borrower, the Lenders and
the Administrative Agent shall enter into negotiations (which
the Administrative Agent on behalf of the Lenders shall not be
obliged to continue for a period of more than 30 days) in good
faith with view to agreeing a substitute basis for determining
the rate of interest and/or funding applicable to any future
LIBOR Advances; and
(iv) any substitute basis agreed under sub-paragraph above shall,
with the prior consent of all the Lenders, take effect in
accordance with its terms and be binding on all the Contracting
Parties.
49
10. PAYMENTS
10.1 Funds and place.
---------------
(a) Except as otherwise provided in this Agreement, all payments to be
made by the Borrower, any Guarantor or any Revolving Lender in
relation to a Revolving Advance or a Term Advance under this Agreement
or any Note shall be made to the Administrative Agent to the account
of the Administrative Agent at Commerzbank Aktiengesellschaft New York
Branch, 2 World Financial Center, New York, NY 10281-1050, U.S. for
value on the due date in Dollars and in either immediately available
Federal funds (payment to be made no later than 1:00 p.m.) for credit
to Account No. 123/▇▇▇▇▇▇▇, Account name, Commerzbank
Aktiengesellschaft New York Branch or Same Day Funds for credit to
Account No. 123/▇▇▇▇▇▇▇, Account name, Commerzbank Aktiengesellschaft
New York Branch or at such other office or bank in New York City as
the Administrative Agent by not less than five Business Days notice
shall have previously notified to the Borrower, the Guarantor or the
Lender, as the case may be.
(b) Except as otherwise provided in this Agreement, all payments to be
made by the Borrower, any Guarantor and any Swingline Lender in
relation to a Swingline Advance under this Agreement or any Note shall
be made to the account of the Administrative Agent at Commerzbank
Aktiengesellschaft New York Branch, 2 World Financial Center, New
York, NY 10281-1050, U.S. for value on the due date in Dollars and in
either immediately available Federal Funds (payment to be made no
later than 1.00 p.m.) for credit to Account No. 123/▇▇▇▇▇▇▇ Account
name Commerzbank Aktiengesellschaft New York Branch or at such other
bank or office in New York as the Administrative Agent, by not less
than five Business Days' notice, shall have previously notified to the
Borrower, the Guarantor or the Swingline Lender, as the case may be.
(c) Subject to Clause 10.3 (Taxes), each payment received by the
Administrative Agent for the account of another Person under paragraph
(a) or (b) above shall:
(i) in the case of a payment received for the account of the
Borrower, be made available by the Administrative Agent to the
Borrower by application, first, in or towards payment (on the
date of receipt) of any amount due from the Borrower under this
Agreement or any Note and, second, in payment (on the date and
in the funds of
50
receipt) to the account of the Borrower with such office or
bank as it shall have previously notified to the Administrative
Agent; and
(ii) in the case of any other payment, be made available by the
Administrative Agent to the Person for whose account the
payment was received (in the case of a Lender for the account
of its Facility Office) on the date of receipt for the account
of such Person to such account of the Person with such office
or bank as it shall have previously notified to the
Administrative Agent.
(d) The Administrative Agent shall distribute, on the date of receipt,
payments received for the account of the Lenders among the Lenders pro
rata to their respective entitlements. If the Administrative Agent,
due to technical or administrative failure on its part, fails to
distribute payments to any Lender on the date of receipt by the
Administrative Agent, it shall pay each relevant Lender interest on
the amount at a rate determined by the Administrative Agent to reflect
its cost of funds.
10.2 Recovery of Payments.
--------------------
Unless the Administrative Agent has received notice from a Lender, the
Borrower or a Guarantor not less than two Business Days before the date
upon which the Lender, the Borrower or the Guarantor (the "party liable")
is to pay an amount to the Administrative Agent for transfer to the
Borrower or Lender respectively (the "payee") that the party liable does
not intend to make that amount available to the Administrative Agent, the
Administrative Agent may assume that the party liable has paid the amount
to it on the due date in accordance with this Agreement. In reliance upon
that assumption, the Administrative Agent may (but shall not be obliged to)
make available to the payee(s) a corresponding sum. If the amount is not
in fact made available to the Administrative Agent and the party liable
does not forthwith on demand pay the amount to the Administrative Agent
together with interest on the amount until its payment at a rate determined
by the Administrative Agent to reflect its cost of funds, the payee(s)
shall forthwith on demand repay the amount to the Administrative Agent
together with interest on the amount calculated as above. The provisions
of this Clause 10.2 are without prejudice to any rights which the
Administrative Agent and the payee may have against the party liable.
10.3 Taxes.
-----
(a) All payments to be made by the Borrower or any Guarantor under the
Finance Documents shall be made:
51
(i) without set-off or counterclaim or reductions or defense; and
(ii) free and clear of all Taxes, withholdings or other deductions
whatsoever (other than income taxes imposed by the jurisdiction
of the relevant Lender's lending office) except to the extent
that the Borrower or such Guarantor is compelled by law to make
payment subject to any Taxes.
For the purposes of this Clause 10, "Relevant Tax" means any Tax
imposed by or in the U.S. or the jurisdiction of incorporation of the
Borrower or the relevant Guarantor or any other jurisdiction from or
through which a payment is made by the Borrower or the relevant
Guarantor under any Finance Document (or any federation or
organization of which any of those jurisdictions is at the relevant
time a member) or any political sub-division or taxing authority of
any of the foregoing.
(b) All Taxes required to be deducted or withheld from any amounts paid or
payable under the Finance Documents shall be paid by the Borrower or
the relevant Guarantor (as the case may be) promptly and in any event
before penalties attach thereto. If any Relevant Taxes or amounts in
respect of Relevant Taxes must be deducted from any amounts payable or
paid by the Borrower or any Guarantor under the Finance Documents (or
payable or paid by, the Administrative Agent to a Financial
Institution under the Finance Documents), the Borrower or such
Guarantor (as the case may be) shall pay such additional amounts as
may be necessary to ensure that the relevant Financial Institution
receives a net amount equal to the full amount which it would have
received had payment not been made subject to Relevant Tax.
(c) Within thirty days of each payment by the Borrower or any Guarantor
under sub-paragraph (b) above of Tax or in respect of Taxes, it shall
deliver to the Administrative Agent for the relevant Financial
Institution a certified copy of the original receipt, if one is
available, or other appropriate evidence issued by the authority to
whom the payment was made that the Tax has been duly remitted to the
appropriate authority.
(d) (i) Subject to sub-paragraph (ii) below, if Relevant Taxes must be
withheld or deducted from any amounts payable or paid by the Borrower
or any Guarantor to a Lender under the Finance Documents, the Borrower
or such Guarantor (as the case may be) may by giving not less than ten
Business Days' notice to the Lender (through the Administrative
Agent):
52
(A) prepay in full all Advances made to it by the Lender
together with all other amounts payable to the Lender
under the Finance Documents, and
(B) cancel that Lender's Commitment;
(ii) any notice by the Borrower or any Guarantor shall be
irrevocable and may only be given under sub-paragraph (i) above
while the duty to withhold or deduct continues and for so long
as no Default has occurred and is continuing; such Lender's
Commitment shall be canceled on the giving of the notice; and
(iii) the Borrower shall be entitled to introduce a new Lender
acceptable to the Administrative Agent or arrange for an
existing Lender to assume the Commitment and Advance(s) of the
Lender whose Commitment has been canceled and Advance(s)
prepaid in accordance with sub-paragraphs (i) and (ii) above.
10.4 Non-Business Days.
-----------------
Whenever any payment under the Finance Documents becomes due on a day which
is not a Business Day, then the due date shall instead be the next Business
Day in that calendar month (if there is one) or the preceding Business Day
(if there is not). During any extension of the due date for payment of any
principal under this Agreement interest shall be payable on the principal
at the rate payable on the original due date.
10.5 Certifications.
--------------
Any certification or determination of a rate or amount made by a Financial
Institution shall be prima facie evidence of the matters certified or
determined.
10.6 Appropriations.
--------------
(a) In the case of a partial payment by the Borrower or any Guarantor
received by the Administrative Agent, the Administrative Agent may
appropriate the payment towards the obligations of the Borrower or
such Guarantor under the Finance Documents in the following order:
(i) first, in or towards payment pro rata of any costs and expenses
of the Financial Institutions due and payable by the Borrower
or such Guarantor but unpaid under the Finance Documents;
53
(ii) secondly, in or towards payment pro rata of any accrued
interest due and payable by the Borrower or such Guarantor but
unpaid under the Finance Documents;
(iii) thirdly, in or towards payment pro rata of any principal due
and payable by the Borrower or such Guarantor but unpaid under
the Finance Documents; and
(iv) fourthly, in or towards payment pro rata of any other sum due
and payable by the Borrower or such Guarantor but unpaid under
the Finance Documents.
(b) Any appropriation as above shall override any appropriation made by
the Borrower or any Guarantor.
10.7 Mitigation.
----------
If, in respect of any Lender, circumstances arise which would, or would on
the giving of notice, result in:
(a) any additional amounts becoming payable under Clause 10.3(b) (Taxes);
or
(b) any amount becoming payable under Clause 11 (Increased Costs); or
(c) any prepayment or cancellation under Clause 12 (Illegality),
then, without limiting the obligations of the Borrower and any Guarantor
under this Agreement and without prejudice to the terms of Clauses 10
(Payments), 11 (Increased Costs) and 12 (Illegality), such Lender shall in
consultation with the Administrative Agent, the Borrower and the Company,
take such reasonable steps as may be open to it (including, without
limitation, changing the location of a Facility Office) to mitigate or
remove such circumstance, including (without limitation) the transfer of
its rights and obligations under this Agreement to another bank or
financial institution acceptable to the Borrower and the Company, unless to
do so might (in the opinion of such Lender) in any way be materially
prejudicial to it or would otherwise be contrary to its banking policy.
11. INCREASED COSTS
11.1 Increased Costs.
---------------
Subject to Clause 11.2 (Exceptions), if the result of the introduction of
or any
54
change in any law, regulation, treaty or official directive or request from
any governmental or regulatory authority (whether or not having the force
of law but if not having the force of law, being of a type with which a
Lender is accustomed to comply) or any change in the interpretation or
application thereof including, without limitation, those relating to
Taxation, any reserve, special deposit, cash ratio, liquidity or capital
adequacy requirement or any other form of banking or monetary controls, is
that:
(i) a Financial Institution incurs an additional cost as a result of
having entered into, or performing, maintaining or funding its
obligations under, any Finance Document; or
(ii) a Lender incurs an additional cost in making, funding or maintaining
all or any advances comprised in a class of advances formed by or
including the Advances made or to be made by it under this
Agreement; or
(iii) any amount payable to a Financial Institution or the effective
return to a Financial Institution under this Agreement or on its
capital is reduced; or
(iv) a Financial Institution makes any payment or foregoes any interest
or other return on or calculated by reference to any amount received
or receivable by it from the Borrower, any Guarantor or the
Administrative Agent,
then and in each such case:
(A) the Financial Institution shall notify the Borrower through the
Administrative Agent of the relevant event promptly upon
becoming aware of the event and of the amount of any claim
under this Clause 11.1 promptly upon ascertaining that amount;
(B) within 14 days of any demand from time to time by the Financial
Institution through the Administrative Agent, the Borrower
shall pay to the Administrative Agent for the account of the
Financial Institution such amount as the Financial Institution
shall certify will compensate the Financial Institution for the
additional cost (or, in the case of paragraph (ii) above, the
proportion of the additional cost as is attributable to its
making, funding or maintaining Advance(s)), reduction, payment
or forgone interest or other return;
(C) (a) subject to sub-paragraph (b) below, the Borrower may by
giving not less than ten Business Days' notice to the
Lender (through the Administrative Agent):
55
(i) prepay in full all Advances made to it by the Lender
together with all other amounts payable to the Lender
under the Finance Documents; and
(ii) cancel that Lender's Commitment;
(b) any notice by the Borrower shall be irrevocable and may
only be given under sub-paragraph (a) above while the
circumstances giving rise to the notification under
paragraph (A) above continue and for so long as no Event of
Default has occurred and is continuing; such Lender's
Commitment shall be canceled on the giving of the notice;
and
(c) the Borrower shall be entitled to introduce a new Lender
acceptable to the Administrative Agent or arrange for an
existing Lender to assume the Commitment and Advance(s) of
the Lender whose Commitment has been canceled and Advance(s)
prepaid in accordance with sub-paragraphs (C)(a)(i) and (ii)
above.
11.2 Exceptions.
----------
Clause 11.1 (Increased Costs) shall not apply to or in respect of:
(a) any change in the rate of Taxation on the overall net income of a
Lender (or the overall net income of a division or branch of a Lender)
imposed in the jurisdiction in which its principal office or Facility
Office for the time being is situate;
(b) any circumstances referred to in Clause 10.3 (Taxes) or to the extent
otherwise provided in Clause 24.8 (Increased Costs/Withholding Taxes);
(c) any increased cost which is incurred in consequence of the
implementation of matters set forth in the report of the Basle
Committee on Banking Regulations and Supervisory Practices dated July,
1988 and entitled "International Convergence and Capital Measurement
and Capital Standards", unless it results from a change in the
interpretation, administration or application of such matters by any
relevant agency after the date of this Agreement; and
(d) any increased cost attributable to the negligence or willful
misconduct of a Finance Party.
56
12. ILLEGALITY
If the introduction of or any change in any law, regulation, treaty or
official directive (whether or not having the force of law but, if not
having the force of law, being of a type with which a Lender is accustomed
to comply) shall make it unlawful or contrary to an official directive
("Supervening Illegality") in any jurisdiction for any Lender to make
available or fund or maintain any Advance or to give effect to its
obligations as contemplated by this Agreement, a Lender may give notice
thereof to the Borrower through the Administrative Agent, whereupon:
(a) the Borrower shall, within the time allowed by the relevant law,
regulation, treaty or official directive, prepay such Lender's Advances
to it together with all other amounts payable to such Lender under the
Finance Documents; and
(b) such Lender's Commitment shall forthwith be canceled,
to the extent required to remove the Supervening Illegality.
13. GUARANTEE
13.1 Guarantee.
---------
In order to induce the Lenders to make Advances to the Borrower hereunder
and in recognition of the direct benefits to be received by each Guarantor
from the making of such Advances, each Guarantor irrevocably and
unconditionally:
(a) guarantees to the Financial Institutions, as principal obligor and not
merely as surety, prompt and full performance by the Borrower and each
Guarantor of all its obligations under this Agreement and the other
Finance Documents and the payment in full of all sums payable now or
in the future to the Financial Institutions by the Borrower and each
Guarantor under this Agreement when and as they become due; and
(b) undertakes with the Financial Institutions that if and whenever the
Borrower or any Guarantor is in default in the payment of any amount
under this Agreement the Guarantor shall forthwith pay the amount as
if the Guarantor instead of the Borrower or such Guarantor were
expressed to be the principal obligor, together with interest on the
amount at the rate per annum from time to time payable by the Borrower
or such Guarantor on the amount from the date when it becomes payable
by the Borrower or such Guarantor until payment of it in full.
57
13.2 Continuing Guarantee.
--------------------
This guarantee is a continuing guarantee and shall extend to the ultimate
balance of all sums payable by the Borrower and the Guarantors or any of
them under the Finance Documents.
13.3 Reinstatement.
-------------
Where any discharge (whether in respect of the obligations of the Borrower
or any Guarantor or any security for those obligations or otherwise) is
made in whole or in part or any arrangement is made on the faith of any
payment, security or other disposition which is avoided or must be repaid
on bankruptcy, liquidation or otherwise without limitation, the liability
of the Guarantor under this guarantee shall continue as if the discharge or
arrangement, as the case may be, had not occurred. Each of the Financial
Institutions is entitled to concede or compromise any claim that any
payment, security or other disposition is liable to avoidance or repayment.
13.4 Waiver of Defenses.
------------------
The obligations of each Guarantor under this Clause 13 shall not be
affected by, and each Guarantor waives to the fullest extent permitted by
law any right it may have as a result of, any, act, omission, matter or
thing which, but for this provision, might operate to release or otherwise
exonerate it from its obligations under this Clause 13 in whole or in part,
including without limitation and whether or not known to it or any
Financial Institution:
(a) any time or waiver granted to or composition with the Borrower, any
Guarantor or any other person;
(b) the taking, variation, compromise, renewal or release of, or refusal
or neglect to perfect or enforce, any rights, remedies or securities
against the Borrower, any Guarantor or any other person;
(c) any legal limitation, disability, incapacity or other circumstances
relating to the Borrower, any Guarantor or any other person;
(d) any variation of a Finance Document or any other document or security
so that references to the Finance Document in this Clause 13 shall
include each variation (including without limitation any substitute
basis agreed under Clause 9 (Market Disruption)); or
58
(e) any unenforceability, invalidity or frustration of any obligations of
the Borrower, any Guarantor or any other person under any Finance
Document or any other document or security, to the intent that each
Guarantor's obligations under this Clause 13 shall remain in full
force and its guarantee be construed accordingly, as if there were no
unenforceability, invalidity or frustration .
Each Guarantor waives all presentments, demands for performance, protests
and notices, including, without limitation, notices of non-performance,
notices of protest, notices of dishonor, notices of the acceptance of this
guarantee and notices of the existence, creation or incurring of Advances.
Each Guarantor assumes all responsibility for being and keeping itself
informed of the Borrower's and each other Guarantor's financial condition
and Assets, and all other circumstances bearing upon the risk of non-
payment and non-performance by the Borrower or any Guarantor. Each
Guarantor agrees that neither the Administrative Agent nor any other
Financial Institution has any duty to advise the Guarantor of information
known to them (or any one of them) regarding such circumstances or risks.
13.5 Immediate Recourse.
------------------
Each Guarantor waives any right it may have of first requiring any of the
Financial Institutions to proceed against or enforce any other rights or
security or claim payment from any other person before claiming from such
Guarantor under this Clause 13.
13.6 Preservation of Rights.
----------------------
Until all amounts which may be or become payable by the Borrower or any
Guarantor under or in connection with this Agreement and the other Finance
Documents have been irrevocably paid and discharged in full, each Financial
Institution may:
(a) refrain from applying or enforcing, as appropriate, any other
moneys, security or rights held or received by that Financial
Institution in respect of those amounts, or apply and enforce the
same in such manner and order as it sees fit (whether against
those amounts or otherwise) and no Guarantor shall be entitled to
the benefit of the same; and
(b) hold in an interest bearing suspense account any moneys received
from any Guarantor or on account of any Guarantor's liability
under this Clause 13.
59
13.7 Non-competition.
---------------
(a) Until all amounts which may be or become payable by the Borrower under
this Agreement have been irrevocably paid in full, no Guarantor shall:
(i) be subrogated to any rights, security or moneys held, received
or receivable by any Financial Institution or be entitled to
any right of contribution in respect of any payment made or
moneys received on account of any Guarantor's liability under
this Clause 13;
(ii) be entitled and claim to rank as a creditor against the estate
or in the bankruptcy or liquidation of the Borrower or any
Guarantor in competition with any Financial Institution; or
(iii) receive, claim or have the benefit of any payment, distribution
or security from or on account of the Borrower or any
Guarantor, or exercise any right of set-off as against the
Borrower or any Guarantor.
(b) Each Guarantor shall forthwith pay to the Administrative Agent for the
account of the Financial Institutions an amount equal to any set-off
(as referred to in (iii) above) in fact exercised by it and shall hold
in trust for and forthwith pay or transfer, as the case may be, to the
Administrative Agent for the Financial Institutions any payment or
distribution or benefit of security in fact received by it. Each
Guarantor shall, upon the written request of the Administrative Agent
during the continuance of an Event of Default, collect, enforce and
receive as trustee for the Financial Institutions and forthwith pay to
the Administrative Agent for the account of the Financial Institutions
all indebtedness of the Borrower or any other Guarantor to such
Guarantor.
13.8 Other Documents.
---------------
This guarantee shall be in addition to and shall not in any way be
prejudiced by any other guarantee or any security now or hereafter held by
any Financial Institution in respect of the obligations of the Borrower or
any Guarantor under this Agreement.
-60-
13.9 Certificate.
-----------
A certificate of the Administrative Agent as to any amount owing from the
Borrower or any Guarantor under this Agreement or any other Finance
Document shall be prima facie evidence of that amount.
14. REPRESENTATIONS AND WARRANTIES
14.1 Representations and Warranties.
------------------------------
The Borrower and each Guarantor (in each case in respect of itself and its
Consolidated Subsidiaries) represents and warrants to each of the Financial
Institutions that:
(a) Organization, etc.
-----------------
(i) Each member of the Group is a corporation validly organized and
existing and, if applicable, in good standing under the laws of
the State or jurisdiction of its incorporation, is duly
qualified to do business and, if applicable, in good standing as
a foreign corporation in each jurisdiction where the nature of
its business makes such qualification necessary and has full
power and authority to own its property and conduct its business
substantially as presently conducted and as presently proposed
to be conducted by it except where the failure to be so
qualified or authorized would not be reasonably expected to have
a Material Adverse Effect;
(ii) it has full power and authority to enter into and to perform its
obligations under the Finance Documents to which it is a party;
and
(iii) it is in compliance with all Requirements of Law, except to the
extent that the failure to comply therewith would not be
reasonably expected to have a Material Adverse Effect.
-61-
(b) Due Authorization.
-----------------
The execution and delivery, by the Borrower and each Guarantor of the
Finance Documents executed or to be executed by it, the performance by
the Borrower and each Guarantor of its respective obligations under
the Finance Documents and the transactions contemplated by the Finance
Documents:
(i) have been duly authorized by all necessary corporate action;
(ii) do not and will not require any approval or consent of any
governmental agency or authority the failure to possess which
would be reasonably expected to have a Material Adverse Effect;
(iii) do not and will not conflict with, result in any violation of,
or constitute a default under any provision of the charter
documents of the Borrower, any Guarantor or any of their
Consolidated Subsidiaries or any agreement, instrument or
document binding upon or applicable to the Borrower, any
Guarantor or any of their Consolidated Subsidiaries or any
present law or governmental regulation or court or
administrative decree or order applicable to the Borrower, any
Guarantor or any of their Consolidated Subsidiaries the
violation of which would be reasonably expected to have a
Material Adverse Effect;
(iv) will not result in or require the creation or imposition of any
Security Interest on any property of any member of the Group
pursuant to the provisions of any agreement, indenture or other
instrument or document binding upon or applicable to any member
of the Group.
(c) Validity of the Finance Documents.
---------------------------------
Each Finance Document will on the due execution and delivery thereof
be the legal, valid and binding obligation of the Borrower and each of
the Guarantors expressed to be a party to it, enforceable against the
Borrower and each such Guarantor in accordance with its terms, subject
only to such qualifications as may be contained in the legal opinions
delivered under Clause 7 (Conditions Precedent) of the Supplemental
Agreement.
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(d) Financial Information.
---------------------
(i) All balance sheets, statements of income and shareholders'
equity, changes in financial position and other financial
information (other than projections and similar forward looking
information) which have been or will be furnished by the Borrower
or the Guarantors or any of them to the Administrative Agent for
any Financial Institution for the purposes of or in connection
with this Agreement or any transaction contemplated hereby have
been or will be prepared in accordance with GAAP consistently
applied throughout the periods involved (except as disclosed
therein) and, as far as each of the Borrower and each Guarantor
is aware, do or will fairly present the Consolidated or
consolidating, as appropriate, financial condition of the Group
or financial condition of the Borrower or each Guarantor, as the
case may be, as at the dates thereof and the results of their
operations for the periods then ended, including, without
limitation, the Consolidated balance sheet at December 31, 1998,
the statement of net Assets, the statement of operations, the
statement of changes in net Assets and the schedule of
investments for the Fiscal Year then ended, of the Group,
certified by Price ▇▇▇▇▇▇▇▇▇▇ ▇.▇.; and
(ii) Except as disclosed to the Administrative Agent in writing, since
June 30, 1999 there has been no material adverse change in the
Consolidated financial condition of the Group taken as a whole
from that reflected in the unaudited Consolidated financial
statements of the Borrower for the quarter ended June 30, 1999, a
copy of which has previously been provided to the Administrative
Agent and each Lender.
(e) Absence of Default.
------------------
No member of the Group is in default in the payment of any Debt in an
aggregate amount of more than $10,000,000 (or its equivalent in any
other currency) or any other material obligation or under any law or
governmental regulation or court or administrative decree or order
materially affecting its property or business, or aware of facts or
circumstances which would give rise to any such default.
(f) Litigation, etc.
---------------
No litigation or arbitration or governmental investigation or
proceeding
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against any member of the Group or to which any of the properties of
any member thereof is subject is pending or, to the knowledge of the
Borrower and each Guarantor threatened which is reasonably likely to
be adversely determined and in such case might be reasonably expected
to have a Material Adverse Effect.
(g) No Burdensome Agreement.
-----------------------
No member of the Group is a party to any agreement or other instrument
or document, or is subject to any charter or other corporate
restriction, materially adversely affecting its business, properties,
Assets, operations or condition (financial or otherwise).
(h) Taxes.
-----
Each member of the Group has filed all tax returns and reports
required by law to have been filed by them and have paid all taxes and
governmental charges thereby shown to be owing, except for taxes being
contested in good faith by appropriate proceedings and for which
appropriate reserves have been established in accordance with GAAP.
(i) ERISA.
-----
No member of the Group has a pension benefit plan subject to Title IV
of ERISA. No unpaid or contingent liability to the Pension Benefit
Guaranty Corporation ("PBGC") has been or is expected to be incurred,
directly or indirectly, by any member of the Group (other than for
payment of PBGC premiums in the ordinary course). No event has
occurred and there exists no condition or set of circumstances which
presents a material risk of the termination or partial termination of
any plan which could result, directly or indirectly, in a liability on
the part of any member of the Group to the PBGC. The Group
constitutes a venture capital operating company for the purposes of
ERISA or is otherwise exempt from ERISA requirements.
(j) Pari Passu.
----------
The obligations of the Borrower and each Guarantor under the Finance
Documents are direct and unconditional obligations and rank in all
respects at least pari passu with all other present and future
unsecured and unsubordinated obligations of the Borrower and each
Guarantor.
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(k) Not an Investment Company.
-------------------------
It is not an "investment company" within the meaning of the Investment
Company Act of 1940 of the U.S.
(l) Restrictions on Transfer.
------------------------
The Borrower and each Guarantor is in compliance with all restrictions
on transfer applicable to any Qualifying Securities.
(m) Millennium Compliance.
---------------------
Each of the Borrower and Guarantors has reviewed its business and
operations and has developed a plan to address on a timely basis the
risk that computer applications used by it in performing date
sensitive functions and involving dates prior to December 31, 1999 and
thereafter might fail to perform such functions properly which failure
would reasonably be expected to have a Material Adverse Effect.
14.2 Repetition.
----------
The representations and warranties set forth in Clause 14.1 shall:
(a) be made on the Effective Date; and
(b) (unless expressed to be given as at or in respect of a particular
date) be deemed to be repeated on the Effective Date and (other than
Clause 14.1(k)) on the date of delivery of each Request, on each
Utilization Date and on the first day of each Interest Period, with
reference to the facts and circumstances then subsisting, as if made
at such time.
15. COVENANTS
The covenants in this Clause 15 shall remain in force from the Effective
Date for so long as any of the Commitments is in force or any amount is
outstanding under the Finance Documents.
15.1 Financial Information, etc.
--------------------------
The Borrower and the Company shall (and in the case of paragraph (c) below
the Borrower and/or the relevant Guarantor shall) furnish, or cause to be
furnished to
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the Administrative Agent for each Lender copies of the following financial
statements, reports and information (all of which shall be computed in
Dollars):
(a) together with the financial statements delivered pursuant to Clauses
15.1(c) and (d) hereof, a Compliance Certificate;
(b) within 10 days after the last day of each calendar month, a Borrowing
Base Certificate;
(c) within 65 days after the close of each of the first three quarters of
each Fiscal Year, Consolidated balance sheets of the Borrower, each
Guarantor and of the Group at the close of such quarter, and the
related Consolidated and consolidating statements of income and
retained earnings, stockholders' equity and statements of changes in
financial position of the Borrower and each Guarantor for the period
commencing at the end of the previous Fiscal Year and ending with the
close of such quarter, certified by a Managing Director or a Senior
Vice President or Vice President of the Borrower and each Guarantor
prepared in accordance with GAAP;
(d) within 135 days after the close of each Fiscal Year, Consolidated
balance sheets at the close of such Fiscal Year and the related
Consolidated statements of income and retained earnings, stockholders'
equity and changes in financial position for such Fiscal Year, of the
Borrower, each Guarantor and of the Group, certified without
qualification by Price Waterhouse SARL or other independent public
accountants of recognized standing selected by the Borrower and
acceptable to the Majority Lenders;
(e) promptly upon the mailing thereof to stockholders generally, any
annual report, proxy statement or other communication;
(f) promptly upon any filing thereof by the Borrower or any Guarantor with
the Banque Centrale du Luxembourg or the Securities and Exchange
Commission, any annual, periodic or special report or registration
statement (exclusive of exhibits thereto) or any prospectus generally
available to the public;
(g) promptly from time to time at the reasonable request of the
Administrative Agent, valuations (appraisals) from the Borrower's
independent valuers approved by the Administrative Agent (acting
reasonably) of land, properties under development and operating
properties held by the Borrower and the Guarantors (or any of them)
and the Qualifying Issuers which are Subsidiaries and in the case of
other Qualifying Issuers if the
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Borrower or any Guarantor or the Investment Adviser has such
valuations;
(h) if in the Administrative Agent's reasonable opinion the aggregate
Market Value of Qualifying Collateral has been adversely affected in a
material way for whatever reason, a Borrowing Base Certificate dated
and delivered within ten days of a request by the Administrative Agent
which Borrowing Base Certificate shall demonstrate compliance with the
Borrowing Base based upon the Market Value as defined in Clause 1.1
(Defined Terms) subject to the following modifications:
(i) the closing sale or bid price, as the case may be, of a
Qualifying Security quoted by the Pricing Service as of the
Business Day immediately preceding the date of the Borrowing Base
Certificate shall apply;
(ii) in all other cases the values or amounts used for the purposes of
the most recent Compliance Certificate delivered under Clause
15.1(a) shall apply for those items forming part of the
Qualifying Collateral at the date of the Borrowing Base
Certificate or if the relevant Qualifying Security has been
acquired since the date of the most recent Compliance Certificate
the value basis set forth in the definition of Market Value shall
be used for such items;
(i) if at any time the Borrower has reason to believe that the aggregate
Market Value of Qualifying Collateral quoted by the Pricing Service
has been adversely affected in a material way for whatever reason, the
Borrower shall immediately (and in any event within one Business Day
of such time) notify the Administrative Agent and deliver a Borrowing
Base Certificate within ten days of such notification which Borrowing
Base Certificate shall demonstrate compliance with the Borrowing Base
based upon the Market Value as defined in Clause 1.1 (Terms defined)
subject to the modification set forth in paragraph (i) of sub-
paragraph (h) above;
(j) promptly from time to time such other information with respect to the
Qualifying Collateral or the financial condition and operations of the
Group or any member thereof as any Lender may, through the
Administrative Agent, from time to time reasonably request;
(k) on or before December 1 of each year, an annual plan of the Company
and its Consolidated Subsidiaries which plan shall include projected
statements of earnings before depreciation, amortization and deferred
taxes, balance sheets, sources and uses of cash and compliance with
the financial
-67-
covenants set forth in the Compliance Certificates for each quarter in
the next succeeding Fiscal Year; and
(l) together with the financial statements delivered pursuant to Clause
15.1(c) hereof, statements of sources and uses of cash for the Company
and its Consolidated Subsidiaries for the period commencing at the end
of the previous Fiscal Year and ending with the close of such quarter
and a revised projection for the statements of changes in financial
position for the Company and its Consolidated Subsidiaries for the
remaining quarters of such Fiscal Year.
15.2 Maintenance of Corporate Existence.
----------------------------------
Except as permitted by Clause 15.12 (Consolidation, Merger, etc.), the
Borrower and each Guarantor will cause to be done at all times all things
necessary to maintain and preserve its corporate existence.
15.3 Payment of Taxes, etc.
---------------------
The Borrower and each Guarantor will, and shall cause each of its
Consolidated Subsidiaries to, pay and discharge, as the same may become due
and payable, all taxes, governmental assessments and other governmental
charges or levies on it or on any of its property, as well as claims of any
kind which, if unpaid, might become a lien upon any of its properties;
provided, however, that the foregoing shall not require any member of the
Group to pay any such tax, assessment, charge, levy or lien so long as it
shall contest the validity thereof in good faith by appropriate proceedings
and shall set aside and maintain, in accordance with GAAP, adequate
reserves with respect thereto.
15.4 Insurance.
---------
The Borrower and each Guarantor will, and will cause each other member of
the Group to, maintain insurance coverage by financially, sound and
reputable insurers in such forms and amounts, with such deductibles and
against such risks as are customary for corporations engaged in the same or
a similar business and owning and operating similar properties.
15.5 Notice of Default or Litigation.
-------------------------------
The Borrower and each Guarantor will as soon as practicable after becoming
aware of the same (and in any event within one Business Day of becoming
aware of such occurrence) give notice to the Administrative Agent of:
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(a) the occurrence of any Default;
(b) any litigation or arbitration or any governmental investigation or
proceeding previously not disclosed by it to the Lenders which has
been instituted or is threatened against any member of the Group or to
which any of the properties of any thereof is or may become subject
which, if adversely determined, might materially adversely affect the
Consolidated financial condition or operations of the Group or impair
the ability of the Borrower or any Guarantor to perform its
obligations under any Finance Document; and
(c) any material adverse development which shall occur in any litigation,
arbitration or governmental investigation or proceeding previously
disclosed by the Borrower or any Guarantor to the Lenders.
15.6 Conduct of Business.
-------------------
The Borrower and each Guarantor will, and will cause each Consolidated
Subsidiary to do or cause to be done all things reasonably necessary, to
preserve and keep in full force and effect its existence and all
franchises, rights and privileges necessary for the proper conduct of its
business, except as otherwise permitted by Clause 15.12.
15.7 Books and Records.
-----------------
The Borrower and each Guarantor will, and will cause each other member of
the Group to, keep all material books and records reflecting all of its
business affairs and transactions in accordance with GAAP and permit any
Lender or any of its representatives (provided that such person is
accompanied by a representative of the Borrower or such Guarantor), at
reasonable times and intervals, to visit all of its offices, discuss its
financial matters with its officers and independent accountants (and hereby
authorizes such independent accountants to discuss its financial matters
with the Administrative Agent or any Lender or its representatives) and
examine any of its books and other corporate records.
15.8 Value of Assets.
---------------
The Company will ensure that the value of Consolidated gross Assets of the
Borrower and the Guarantors (other than the Company) comprise no less than
90 percent of the value of Consolidated gross Assets of the Company
computed in accordance with GAAP.
-69-
15.9 Security Interests.
------------------
The Borrower and each Guarantor will not, and will not permit any
Consolidated Subsidiary to, create, incur, assume or suffer to exist any
Security Interest upon any of its property or Assets or revenues, whether
now owned or hereafter acquired except:
(a) liens for taxes, assessments or other governmental charges or levies,
and liens securing claims or demands incurred in the ordinary course
of business, provided in each case that:
(i) payment thereof is not at the time required by Clause 15.3
(Payment of Taxes, etc.); and
(ii) if required by GAAP, the applicable member of the Group shall
have set aside and maintained adequate reserves with respect
thereto;
(b) liens incurred in the ordinary course of business in connection with
workmen's compensation, unemployment insurance or other forms of
governmental insurance or benefits, or to secure performance of
tenders, statutory obligations, leases and contracts (other than for
borrowed money) entered into in the ordinary course of business or to
secure obligations on surety or appeal bonds;
(c) Security Interests over real property or interests therein in
existence at the date of acquisition of such property or interest by a
Consolidated Subsidiary which is a US person (and not created in
contemplation of such acquisition) and which secures a principal
amount no greater than that outstanding at the date of acquisition
together with any items capitalized in accordance with GAAP;
(d) any other Security Interest to which the Majority Lenders have granted
their prior written consent; and
(e) liens, other than liens on the stock of any Guarantor or any
Subsidiary thereof other than Strategic Investees, incurred to secure
any indebtedness permitted under Clause 15.10(b)(iv);
provided that in no event shall the aggregate principal amount of all Debt
of the Company and its Consolidated Subsidiaries that is secured by such
Security Interests exceed the level set forth in Clause 15.10(b)(iv)
(Financial Condition).
-70-
15.10 Financial Condition.
-------------------
(a) Neither the Borrower nor any Guarantor will incur any indebtedness
other than:
(i) indebtedness under the Finance Documents;
(ii) indebtedness owed to the Borrower or any Guarantor, provided
that, any indebtedness owed to the Borrower or the Company by
any Guarantor or the Borrower may only be incurred pursuant
to the Advance Agreement; or
(iii) subject to the limitation set forth in Clause 15.10(b)(iv),
indebtedness secured by a Security Interest encumbering any
Asset of the Borrower or such Guarantor, as the case may be;
(b) The Company will:
(i) not permit its Adjusted Unsecured Liabilities to exceed the
Borrowing Base at any time;
(ii) ensure that its Shareholders' Equity at all times exceeds the
sum of (A) the greater of (x) 75 percent of its Shareholders'
Equity calculated as of the Effective Date and (y)
$1,500,000,000 and (B) 75 percent of the net proceeds, if
any, received by the Company from the public sale of any of
its equity securities;
(iii) procure that at all relevant times:
(A) the ratio of its Total Liabilities to Market Net Worth
is not greater than 1.0:1.0; provided that, solely for
the purposes of calculating such ratio, in circumstances
where any Strategic Investee or unconsolidated
Subsidiary is not or ceases to be a Qualifying Issuer
because of its failure to comply with clause (a)(i) of
the definition of "Qualifying Issuer", (x) "Total
Liabilities" shall be deemed to include such portion of
the Total Liabilities of such Strategic Investee or
unconsolidated Subsidiary as corresponds to the
percentage equity interest held in such Strategic
Investee or unconsolidated Subsidiary by the Company or
any of its Consolidated Subsidiaries, and (y) "Market
Net Worth" shall be deemed to include (i) the Market
Value of all
-71-
Securities of such Strategic Investee or unconsolidated
Subsidiary which are owned by the Company or any of its
Consolidated Subsidiaries and (ii) such portion of the
Assets (valued in accordance with clause (a)(iii)(1)(A)
of the definition of "Market Net Worth") of such
Strategic Investee or unconsolidated Subsidiary as
corresponds to the percentage equity interest held in
such Strategic Investee or unconsolidated Subsidiary by
the Company or any of its Consolidated Subsidiaries.
(B) the Company Fixed Charge Coverage Ratio is not less than
1.5:1.0;
(C) its Interest Coverage Ratio is not less than 2.1:1.0 and
(iv) ensure at all times that the aggregate principal amount of
all Debt of the Company and its Consolidated Subsidiaries
that is secured by a Security Interest encumbering any Asset
of the Company or any such Consolidated Subsidiary is equal
to or less than 10 percent of the Market Net Worth of the
Company and its Consolidated Subsidiaries.
(c) Neither the Company nor any of its Consolidated Subsidiaries will
incur any Unfunded Obligations (other than such Unfunded Obligations
which shall have been existing as of the Effective Date and
disclosed in writing to the Administrative Agent pursuant to Clause
5(a)(x) of the Supplemental Agreement).
15.11 Dividends, Stock Purchases.
--------------------------
(a) The Company will not declare or pay any dividends, or return any
capital, to its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, buy back, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its capital stock now or hereafter
outstanding (or any options or warrants issued by the Company with
respect to its capital stock), or set aside any funds for any of the
foregoing purposes, or permit any of its Subsidiaries to purchase or
otherwise acquire for a consideration any shares of any class of the
capital stock of the Company now or hereafter outstanding (or any
options or warrants issued by the Company with respect to its
capital stock) which, in the aggregate for any Fiscal Year, exceeds
50 percent of the
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Company's Consolidated net income plus depreciation but after
deduction of taxes for such Fiscal Year all as computed in
accordance with GAAP. Notwithstanding the preceding sentence, the
Company may pay any dividends if (i) such dividends are declared no
more than 60 days prior to the date of such payment and (ii) at the
time such dividends were declared, such dividends would not have
caused the Company to exceed the limitation set forth in the
preceding sentence.
(b) The Borrower will not declare or pay any dividends, or return any
capital, to its stockholders or authorize or make any other
distribution, payment or delivery of property or cash to its
stockholders as such, or redeem, retire, purchase or otherwise
acquire, directly or indirectly, for a consideration, any shares of
any class of its capital stock now or hereafter outstanding (or any
options or warrants issued by the Borrower with respect to its
capital stock), or set aside any funds for any of the foregoing
purposes, or permit any of its Subsidiaries to purchase or otherwise
acquire for a consideration any shares of any class of the capital
stock of the Borrower now or hereafter outstanding (or any options
or warrants issued by the Borrower with respect to its capital
stock), except that the Borrower may (i) pay dividends to the
Company, (ii) declare or pay dividends on shares of its preferred
stock, (iii) redeem any shares of its preferred stock, (iv) purchase
or otherwise acquire for consideration any shares of its preferred
stock or (v) purchase or otherwise acquire for consideration any
shares of its capital stock held by the Company.
(c) No Guarantor (other than the Company) may declare or pay any
dividends, or return any capital, to its stockholders or authorize
or make any other distribution, payment or delivery of property or
cash to its stockholders as such, or redeem, retire, purchase or
otherwise acquire, directly or indirectly, for a consideration, any
shares of any class of its capital stock now or hereafter
outstanding (or any options or warrants issued by such Guarantor
with respect to its capital stock), or set aside any funds for any
of the foregoing purposes, or permit any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any
class of the capital stock of such Guarantor now or hereafter
outstanding (or any options or warrants issued by such Guarantor
with respect to its capital stock), except that any Guarantor (other
than the Company) may (i) pay dividends to the Borrower, any wholly-
owned Subsidiary of the Borrower or any other Guarantor (other than
the Company), (ii) declare or pay dividends on shares of its
preferred stock, (iii) redeem any shares of its preferred stock,
(iv) purchase or otherwise
-73-
acquire for consideration any shares of its preferred stock or (v)
purchase or otherwise acquire for consideration any shares of its
capital stock held by the Borrower.
(d) The Borrower will not permit any Guarantor to, and no Guarantor
will, directly or indirectly, create or otherwise cause or suffer to
exist or become effective any encumbrance or restriction on the
ability of such Guarantor to (i) pay dividends or make other
distributions on its equity securities or any other interest or
participation in its profits owned by the Borrower or any other
Guarantor, (ii) make loans or advances to the Borrower or any other
Guarantor, or (iii) transfer any of its properties or Assets to the
Borrower or any other Guarantor, except in connection with a
Security Interest permitted by Clause 15.9.
15.12 Consolidation, Merger, etc.
--------------------------
None of the Borrower, any Guarantor or any of their respective
Consolidated Subsidiaries may (a) consolidate or merge with or into any
other Person, (b) subject to Clause 15.17 (Sales of Qualifying Securities
of Principal Companies), sell, lease or otherwise transfer, directly or
indirectly, and whether by one or a series of related transactions, a
substantial portion of its Assets to any other Person, or (c) purchase or
otherwise acquire, directly or indirectly, by one or a series of related
transactions, all or substantially all of the assets of, or outstanding
capital stock of or other equity interest in, another Person, except that
(i) any Guarantor may consolidate or merge with or into the Borrower or
another Guarantor, (ii) any Guarantor may sell, lease or otherwise
transfer, directly or indirectly, and whether by one or a series of
related transactions, all or a substantial portion of its Assets to the
Borrower or another Guarantor and (iii) the Borrower or any Guarantor may
purchase or otherwise acquire, all or substantially all of the assets of,
or outstanding capital stock of or other equity interests in, or
consolidate or merge with or into, another Person, so long as (A) after
giving effect thereto, no Default or Event of Default shall have occurred
and be continuing and (B) in the case of a consolidation or merger, the
Person surviving such consolidation or merger will be the Borrower or
such Guarantor, as the case may be, after giving effect thereto.
15.13 Plans.
-----
Neither the Borrower nor any Guarantor will, or will permit any ERISA
Affiliate to, establish, or incur or suffer to exist any obligations with
respect to, any employee pension benefit plan maintained for the
employees of the Borrower or any Guarantor or any ERISA Affiliate and
covered by Title IV of ERISA.
-74-
15.14 Inconsistent Agreements.
-----------------------
Neither the Borrower nor any Guarantor will, or will permit any other
member of the Group to, enter into any agreement containing any provision
which would be violated or breached by any borrowing by the Borrower made
under this Agreement or by the performance by the Borrower or any
Guarantor of its obligations under the Finance Documents.
15.15 ERISA and Compliance with Requirements of Law.
---------------------------------------------
The Borrower and each Guarantor will, and will cause each of their
Subsidiaries to, comply in all respects with all Requirements of Law, the
non-compliance with which would be reasonably expected to have a Material
Adverse Effect. Neither the Borrower nor any Guarantor will permit any of
their respective Assets to become or be deemed to be "plan assets" within
the meaning of ERISA, the Internal Revenue Code and the respective
regulations promulgated thereunder, of any ERISA plan or any non-ERISA
plan.
15.16 Advance Agreement.
-----------------
Neither the Borrower nor the Company shall amend or modify the Advance
Agreement without the express written consent of the Administrative
Agent; provided that no such consent shall be required in connection with
the execution by any Guarantor of counterparts of the Advance Agreement.
15.17 Sales of Qualifying Securities of Principal Companies
-----------------------------------------------------
The Company shall not, and shall not permit the Borrower or any other
Guarantor to, sell, transfer, convey or otherwise dispose of more than
20% of the number of Qualifying Securities of a Principal Company (other
than SCG) held by the Company, the Borrower or such Guarantor as of the
date hereof (provided that this Clause 15.17 shall not apply to changes
in the number of Qualifying Securities held by such Person caused by
stock splits, share dividends and other similar events if such changes do
not affect such Person's relative ownership position), unless the
Borrower or such Guarantor has obtained the prior written consent of the
Super Majority Lenders (which shall include, for the purposes of this
Clause 15.17, all Lenders whose respective Commitments equal or exceed
$50,000,000) to such sale, transfer, conveyance or disposal; provided
that no such consent shall be required (a) if such sale, transfer,
conveyance or disposal would not create a Borrowing Base Shortfall or (b)
for the sale, transfer, conveyance or disposal of Qualifying Securities
of PRT in connection with the merger of PRT with and into Regency.
Notwithstanding any of the foregoing, the Borrower and Guarantors
-75-
may transfer Qualifying Securities of a Principal Company and other
Qualifying Securities to one another (including such transfers by one
Guarantor to another).
16. DEFAULT
16.1 Events of Default.
-----------------
Each of the events set forth in Clauses 16.2 (Non-Payment) to 16.14
(Investment Adviser) (inclusive) is an Event of Default (whether or not
caused by any reason whatsoever outside the control of the Borrower, any or
all of the Guarantors or any other Person).
16.2 Non-Payment.
-----------
The Borrower or any Guarantor fails to pay:
(a) any principal amount payable by it under the Finance Documents; or
(b) interest or any fee or any other amount payable by it under the
Finance Documents within five days of the due date therefor,
at the place at which, and in the currency in which, it is expressed to be
payable.
16.3 Breach of Other Obligations.
---------------------------
The Borrower or any Guarantor, as the case may be, does not comply with:
(a) any provision of Clause 8.3 (Mandatory Prepayment/Borrowing Base
Shortfall), Clause 15.5(a) (Notification of a Default), Clause 15.9
(Security Interests), Clause 15.10 (Financial Condition) or Clause
15.12 (Consolidation, Merger, etc.);
(b) any provision of Clause 15.1(a) (Compliance Certificates), Clause
15.(h) (Borrowing Base Certificate), Clause 15.1(i) (Borrowing Base
Certificate) or Clause 15.1(j) (Other Financial Information) within 10
days of the Administrative Agent providing written notice to the
Borrower and/or such Guarantor (as appropriate) of the failure;
(c) any provision of Clause 15.1(c) to (h) (Financial Statements and
Appraisals) or Clause 15.3 (Payment of Taxes etc.) within 60 days of
the Administrative Agent providing written notice to the Borrower
and/or such Guarantor (as appropriate) of the failure;
76
(d) any other provision of the Finance Documents and the failure to comply
(if it is capable of remedy) is not remedied within 30 days of the
Administrative Agent providing written notice to the Borrower and/or
such Guarantor (as appropriate) of the failure.
16.4 Misrepresentation.
----------------------
A representation, warranty or statement made or repeated in or in
connection with any Finance Document or in any document delivered by or on
behalf of the Borrower or any Guarantor under or in connection with any
Finance Document is incorrect in any material respect when made or deemed
to be made or repeated.
16.5 Cross-default.
-------------
(a) Any unsecured Debt of the Borrower or any Guarantor in an aggregate
amount of at least $10,000,000 or its equivalent in any other
currencies is not paid when due or within any applicable grace period;
or any Non-Recourse Debt of the Borrower, any Guarantor or any of
their respective Consolidated Subsidiaries in an aggregate amount of
at least $25,000,000 or its equivalent in any other currencies is not
paid when due or within any applicable grace period or
(b) Any unsecured Debt of the Borrower or any Guarantor in an aggregate
amount of at least $10,000,000 or its equivalent in any other
currencies becomes, or becomes capable of being declared, prematurely
due and payable, in each case as a result of an event of default
(howsoever described) under the document relating to that
indebtedness; or any Non-Recourse Debt of the Borrower, any Guarantor
or any of their respective Consolidated Subsidiaries in an aggregate
amount of at least $25,000,000 or its equivalent in any other
currencies becomes, or becomes capable of being declared, prematurely
due and payable, in each case as a result of an event of default
(howsoever described) under the document relating to that
indebtedness.
16.6 Insolvency.
----------
(a) The Borrower or any Guarantor or any of their respective Consolidated
Subsidiaries is, or is deemed for the purposes of any law to be,
unable to pay its debts as they fall due or is, or is deemed to be,
insolvent, or admits inability to pay its debts as they, fall due; or
(b) The Borrower or any Guarantor or any of their respective Consolidated
77
Subsidiaries suspends making payments on all or any class of its debts
or announces an intention to do so, or a moratorium is declared in
respect of any of its indebtedness.
16.7 Insolvency Proceedings.
----------------------
Otherwise than in connection with a voluntary reorganization permitted
under Clause 15.12 (Consolidation, Merger, etc.):
(a) any step (including petition, proposal or convening a meeting) is
taken by the Borrower or any Guarantor or any of their respective
Consolidated Subsidiaries in any relevant jurisdiction with a view to
a composition, assignment or arrangement with its creditors generally
(or any class of them); or
(b) a members' or board meeting of the Borrower or any Guarantor or any of
their respective Consolidated Subsidiaries is convened for the purpose
of considering any resolution for (or to petition for) its winding-up
or its administration or any such resolution, is passed; or
(c) any person presents a petition for the Winding Up or for the
administration of the Borrower or any Guarantor or of their respective
Consolidated Subsidiaries in any relevant jurisdiction and the
relevant petition or action is not dismissed, withdrawn or otherwise
discontinued within 30 days; or
(d) any order for the winding-up or administration of the Borrower or any
Guarantor or any of their respective Consolidated Subsidiaries is made
in any relevant jurisdiction and such order is not contested in good
faith within 10 days and remains undismissed and unstayed for a period
of 60 days;
(e) any other step (including petition, proposal or convening a meeting)
is taken in any relevant jurisdiction with a view to the
rehabilitation, administration, custodianship, liquidation, winding-up
or dissolution of the Borrower or any Guarantor or any of their
respective Consolidated Subsidiaries or any other proceedings
involving the Borrower or any Guarantor or any of their respective
Consolidated Subsidiaries and the relevant petition, action or
procedure is not dismissed, withdrawn or otherwise discontinued within
60 days; or
(f) the Borrower or any Guarantor or any of their respective Consolidated
Subsidiaries shall commence a voluntary case concerning itself under
Title
78
11 of the U.S. Code entitled "Bankruptcy", as now or hereafter in
effect, or any successor thereto (the "Bankruptcy Code") or, in the
case of a Consolidated Subsidiary, under any equivalent bankruptcy
law;
(g) an involuntary case is commenced against the Borrower or any Guarantor
or any of their respective Consolidated Subsidiaries or any of its
respective Consolidated Subsidiaries, and the petition is not
controverted within 20 days, or is not dismissed within 30 days, after
commencement of the case:
(h) a custodian (as defined in the Bankruptcy Code) is appointed for, or
takes charge of, all or substantially all of the Assets of the
Borrower, any Guarantor or any of their respective Consolidated
Subsidiaries, or the Borrower, any Guarantor or any of their
respective Consolidated Subsidiaries commences any other proceeding
under any reorganization, arrangement, adjustment of debt, relief of
debtors, dissolution, insolvency or liquidation or similar law of any
jurisdiction whether now or hereafter in effect relating to the
Borrower, any Guarantor or any of their respective Consolidated
Subsidiaries, or there is commenced against the Borrower, any
Guarantor or any of their respective Consolidated Subsidiaries any
such proceeding which remains unstayed or undismissed for a period of
30 days, or the Borrower, any Guarantor or any of their respective
Consolidated Subsidiaries is adjudicated insolvent or bankrupt;
(i) any order of relief or other order approving any such case or
proceeding is entered;
(j) the Borrower, any Guarantor or any of their respective Consolidated
Subsidiaries suffers any appointment of any custodian or the like for
it or any substantial part of its property to continue undischarged or
unstayed for a period of 30 days;
(k) the Borrower, any Guarantor or any of their respective Consolidated
Subsidiaries makes a general assignment for the benefit of creditors;
or
(l) any corporate action is taken by the Borrower, any Guarantor or any of
their respective Consolidated Subsidiaries for the purpose of
effecting any of the foregoing.
79
16.8 Appointment of Receivers and Managers.
-------------------------------------
(a) Any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like
is appointed in any place in respect of the Borrower or any Guarantor
or any of their respective Consolidated Subsidiaries or any material
part of the respective Assets of any of the foregoing; or
(b) the directors of the Borrower or any Guarantor or any of their
respective Consolidated Subsidiaries request the appointment of a
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or the like
in respect of the Borrower, such Guarantor or any of their respective
Consolidated Subsidiaries or any substantial part of its or their
Assets; or
(c) any person enforces any Security Interest over any material part of
the Assets of the Borrower or any Guarantor or any of their respective
Consolidated Subsidiaries and the relevant proceedings are not
dismissed, withdrawn or otherwise discontinued within 60 days.
16.9 Legal Process.
-------------
(a) Any judgment or order is made against any member of the Group (not
paid or fully covered by insurance) of $10,000,000 or more which is
not stayed or discharged or bonded pending appeal within 30 days or
(where payment may be lawfully withheld pending the outcome of such
proceedings) is not being contested in good faith by the relevant
party by appropriate proceedings within 30 days; or
(b) any attachment, sequestration, distress or execution or lien in favor
of any governmental or regulatory authority affects any material asset
of any Guarantor, the Borrower or any of their respective Consolidated
Subsidiaries and is not discharged within 30 days.
16.10 Unlawfulness.
------------
It is or it becomes unlawful for any Guarantor or the Borrower to perform
any of its obligations under the Finance Documents.
16.11 Guarantee.
---------
The guarantee by any Guarantor hereunder is not effective or enforceable or
is
80
alleged by such Guarantor to be ineffective or unenforceable for any
reason.
16.12 Change of Control.
-----------------
(a) The Investment Adviser ceases to be directly or indirectly a
Subsidiary of SCG;
(b) SCG fails to own beneficially directly or indirectly at least 20
percent of the voting share capital of the Borrower;
(c) The Borrower fails to own beneficially directly or indirectly at
least 95 percent of the voting share capital of each Guarantor.
(d) any Person or Persons acting in concert (other than SCG and its
wholly-owned Subsidiaries) owns more than 10 percent of shares of
the Borrower, and continues to do so for more than 30 days after
notice thereof has been given by the Administrative Agent to the
Borrower or such longer period as may be reasonably necessary for
the Borrower to exercise promptly and in good faith its rights with
respect to any excess shares under the Borrower's Articles of
Incorporation.
16.13 Pari Passu.
----------
The obligations of the Borrower and each Guarantor under the Finance
Documents shall not constitute direct and unconditional obligations or
shall not rank in all respects at least pari passu with all other
present and future unsecured and unsubordinated obligations of the
Borrower or such Guarantor as the case may be.
16.14 Investment Adviser.
------------------
Any Event of Default specified in Clause 16.6 (Insolvency), 16.7
(Insolvency Proceedings) or 16.8 (Appointment of Receivers and Managers)
shall occur in relation to the Investment Adviser and there shall not be
appointed within 15 days following such Event of Default a substitute
Investment Adviser reasonably acceptable to the Majority Lenders.
16.15 Acceleration.
------------
On and at any time after the occurrence of an Event of Default and while
such Event of Default is continuing the Administrative Agent may, and
shall if so directed by the Majority Lenders, by notice to the Borrower:
(a) cancel all of the Commitments; and/or
81
(b) demand that all the Advances, together with accrued interest and all
other amounts accrued under this Agreement be immediately due and
payable, whereupon they shall become immediately due and payable;
and/or
(c) demand that all the Advances, together with accrued interest and all
other amounts accrued under this Agreement, be payable on demand,
whereupon they shall immediately become payable on demand by the
Administrative Agent;
provided that if an Event of Default specified in Clause 16.6 (Insolvency),
16.7 (Insolvency Proceedings) or 16.8 (Appointment of Receivers and
Managers) shall occur, each of the results under clauses (a), (b) and (c)
above shall occur automatically without the giving of notice by the
Administrative Agent to the Borrower as specified in this Clause 16.15.
17. ACCOUNTS AS EVIDENCE
Accounts maintained by a Lender in connection with this Agreement shall
constitute prima facie evidence of sums owing to the Lender.
18. THE ADMINISTRATIVE AGENT, THE ARRANGER AND THE SYNDICATION AGENT
18.1 Appointment and Duties of the Administrative Agent.
--------------------------------------------------
(a) Each Financial Institution (other than the Administrative Agent)
irrevocably appoints the Administrative Agent to act as its agent
under and in connection with the Finance Documents.
(b) Each Contracting Party appointing the Administrative Agent irrevocably
authorizes the Administrative Agent on its behalf to enter into any
Guarantor Joinder Agreement (whereupon and by which act such
Contracting Party shall become bound thereby), perform the duties and
to exercise the rights, powers and discretion that are specifically
delegated to it under or in connection with the Finance Documents,
together with any other incidental rights, powers and discretion.
Each Financial Institution irrevocably appoints the Administrative
Agent to enter into the Finance Documents on its behalf.
(c) The Administrative Agent shall have only those duties which are
expressly specified in the relevant Finance Documents. Those duties
are solely of a mechanical and administrative nature.
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18.2 Role of the Arranger and the Syndication Agent.
----------------------------------------------
Except as otherwise provided in this Agreement, the Arranger and the
Syndication Agent have no obligations of any kind to any other
Contracting Party under or in connection with any Finance Document.
18.3 Relationship.
------------
The relationship between the Administrative Agent and the Contracting
Parties which have appointed it as Administrative Agent is that of agent
and principal only. Nothing in this Agreement constitutes the
Administrative Agent as trustee or fiduciary for any other Contracting
Party or any other person and as between the Administrative Agent and the
other Financial Institutions, the Administrative Agent need not hold in
trust any moneys paid to it for a Contracting Party or be liable to
account for interest on those moneys.
18.4 Majority Lenders' Directions.
----------------------------
As against the Financial Institutions, the Administrative Agent will be
fully protected if it acts in accordance with the instructions of the
Majority Lenders in connection with the exercise of any right, power or
discretion or any matter not expressly provided for in the Finance
Documents. Any such instructions given by the Majority Lenders will be
binding on all the Lenders. In the absence of such instructions, the
Administrative Agent may, as between itself and the other Financial
Institutions, act as it reasonably considers to be in the best interests
of all the Lenders.
18.5 Delegation.
----------
The Administrative Agent may act under the Finance Documents through its
personnel and agents and except as specifically provided in the Finance
Documents, it is not responsible for the acts and omissions of such
agents (other than employees) who are selected by it with reasonable
care.
18.6 Responsibility for Documentation.
--------------------------------
The Administrative Agent, the Arranger and the Syndication Agent are not
responsible to any other Contracting Party for:
(a) the execution, genuineness, validity, enforceability or sufficiency
of any Finance Document or any other document;
83
(b) any error or omission in any legal opinion;
(c) the collectability of amounts payable under any Finance Document; or
(d) the accuracy of any statements (whether written or oral) made in or
in connection with any Finance Document.
18.7 Default.
-------
(a) The Administrative Agent is not obliged to monitor or inquire as to
whether or not a Default has occurred. The Administrative Agent will
not be deemed to have knowledge of the occurrence of a Default.
However, if the Administrative Agent receives notice from a
Contracting Party referring to this Agreement, describing the Default
and stating that the event is a Default, or otherwise has actual
knowledge of an Event of Default, it shall promptly notify the
Lenders and the Borrower.
(b) The Administrative Agent may require the receipt of security
satisfactory to it whether by way of payment in advance or otherwise,
against any liability or loss which it will or may incur in taking
any proceedings or action arising out of or in connection with any
Finance Document on behalf of the Financial Institutions before it
commences those proceedings or takes that action.
18.8 Exoneration.
-----------
(a) Without limiting paragraph (b) below, the Administrative Agent will
not be liable to any other Contracting Party for any action taken or
not taken by it under or in connection with any Finance Document,
unless directly caused by the Administrative Agent's gross negligence
or willful misconduct.
(b) No Contracting Party may take any proceedings against any officer,
employee or agent of the Administrative Agent in respect of any claim
it might have against the Administrative Agent or in respect of any
act or omission of any kind (including gross negligence or willful
misconduct) by that officer, employee or agent in relation to any
Finance Document.
18.9 Reliance.
--------
The Administrative Agent may:
84
(a) rely on any notice or document reasonably believed by it to be
genuine and correct and to have been signed by, or with the
authority of, the proper person:
(b) rely on any statement made by, a director or employee of any
person regarding any matters which may reasonably be assumed to
be within his knowledge or within his power to verify; and
(c) engage and rely on legal or other professional advisers selected
by it (including those in the Administrative Agent's employment
and those representing a Contracting Party other than the
Administrative Agent).
18.10 Credit Approval and Appraisal.
-----------------------------
Without affecting the responsibility of the Borrower and each
Guarantor for information supplied by it or on its behalf in
connection with any Finance Document, each Lender confirms that it:
(a) has made its own independent investigation and assessment of the
financial condition and affairs of the Borrower, each Guarantor
and their related entities in connection with its participation
in this Agreement and has not relied on any information provided
to it by the Administrative Agent, the Arranger or the
Syndication Agent in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of the Borrower, each Guarantor and their
related entities while any amount is or may be outstanding under
the Finance Documents or any Commitment is in force.
18.11 Information.
-----------
(a) The Administrative Agent shall promptly forward to the person
concerned the original or a copy of any document which is
delivered to the Administrative Agent by a Contracting Party for
that person.
(b) The Administrative Agent shall promptly supply each Lender with a
copy of each document received by the Administrative Agent under
Clauses 4 (Conditions Precedent) or 28.1(d) (Additional
Guarantors) upon the request of that Lender provided that the
Borrower shall only be liable for reasonable costs incurred in
connection with the provision of such copies to any Lender.
85
(c) Except where this Agreement specifically provides otherwise, the
Administrative Agent is not obliged to review or check the accuracy or
completeness of any document it forwards to another Contracting Party.
(d) The Administrative Agent shall promptly notify each Lender of the
occurrence of any of the following:
(i) the receipt by it of a Request from the Borrower under Clause
5.1 (a) (Utilization of Revolving Credit Facility) or 5.2(b)
(Utilization of Swingline Facility);
(ii) the receipt by it of a notice from the Borrower under Clause
8.2(a) (Prepayment of Advances);
(iii) the receipt by it of a Compliance Certificate or a Borrowing
Base Certificate showing the occurrence of a Borrowing Base
Shortfall; and
(iv) subject to Clause 18.7 (Default), any Default.
(e) Except as provided above, the Administrative Agent has no duty:
(i) either initially or on a continuing basis to provide any Lender
with any credit or other information concerning the financial
condition or affairs of the Borrower, any Guarantor or any
related entity of the Borrower or any Guarantor whether coming
into the possession of the Administrative Agent or that of any
of its related entities before, on or after the date of this
Agreement, or
(ii) unless specifically requested to do so by a Lender in
accordance with this Agreement, to request any certificates or
other documents from the Borrower or any Guarantor.
18.12 The Administrative Agent and the Arranger Individually.
------------------------------------------------------
(a) If it is also a Lender, each of the Administrative Agent, the
Arranger and the Syndication Agent has the same rights and powers
under this Agreement as any other Lender and may exercise those
rights and powers as though it were not the Administrative Agent or
an Arranger.
(b) Each of the Administrative Agent, the Arranger and the Syndication
Agent may:
86
(i) carry on any business with the Borrower, any Guarantor or their
related entities;
(ii) act as agent or trustee for, or in relation to any financing
involving, the Borrower, any Guarantor or their related
entities, and
(iii) retain any profits or remuneration in connection with its
activities under the Finance Documents or in relation to any of
the foregoing.
(c) In acting as the Administrative Agent, the agency division of the
Administrative Agent will be treated as a separate entity from its
other divisions and departments. Any information acquired by the
Administrative Agent otherwise than in its capacity as Administrative
Agent may be treated as confidential by the Administrative Agent and
will not be deemed to be information possessed by the Administrative
Agent in its capacity as such.
18.13 Indemnities.
-----------
(a) Without limiting the liability of the Borrower or any Guarantor under
the Finance Documents, each Lender shall forthwith on demand
indemnify the Administrative Agent (to the extent not reimbursed by
the Borrower or the Guarantors or any of them), for that Lender's pro
rata share of any liability or loss incurred by the Administrative
Agent in any way relating to or arising out of its acting as the
Administrative Agent, except to the extent that the liability or loss
arises directly from the Administrative Agent's negligence or willful
misconduct.
(b) The Borrower shall forthwith on demand reimburse each Lender for any
payment made by it under paragraph (a) above.
18.14 Compliance.
----------
(a) The Administrative Agent may refrain from doing anything which might,
in its opinion, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person, and may do anything
which, in its opinion, is necessary or desirable to comply with any
law or regulation of any jurisdiction.
(b) Without limiting paragraph (a) above, the Administrative Agent need
not disclose any information relating to the Borrower, any Guarantor
or any of their related entities if the disclosure would constitute a
breach of any
87
law or regulation or any duty of secrecy or confidentiality.
18.15 Resignation of Agent.
--------------------
(a) Notwithstanding its irrevocable appointment, the Administrative Agent
may resign by giving not less than 60 days' notice to the Lenders and
the Borrower, in which case the Administrative Agent may forthwith
appoint one of its Affiliates as successor Administrative Agent or,
failing that, the Majority Lenders may identify a proposed successor
Administrative Agent and notify the Borrower of the identity of such
person. Notwithstanding its irrevocable appointment, the
Administrative Agent may be removed for good cause upon 60 days'
notice to the Administrative Agent by the Majority Lenders, in which
case the Majority Lenders may identify proposed successor
Administrative Agent and notify the Borrower of the identity of such
person. In addition, if Commerzbank A.G., shall at any time hold a
Commitment which is not the largest single individual Commitment of
all the Lenders' individual Commitments or which is not equal to the
largest individual Commitment held by any other Lender or Lenders, it
shall promptly notify the Borrower and the Lenders thereof and the
Administrative Agent shall offer to resign. If such offer is accepted
by the Majority Lenders (for this purpose only, Commerzbank A.G. shall
be deemed to have accepted its own offer to resign), the Majority
Lenders may identify a proposed successor Administrative Agent and
notify the Borrower of the identity of such person. Such person shall,
with the consent of the Borrower be appointed as the successor
Administrative Agent provided that such consent shall not be required
where the Administrative Agent has resigned and such Administrative
Agent has appointed one of its Affiliates to be its successor. If the
Borrower withholds its consent to the appointment of any successor
Administrative Agent it shall, within 30 days of receiving notice of
the identity of the proposed appointee of the Majority Lenders,
identify one or more other persons who are willing to act as the
Administrative Agent and whom the Majority Lenders shall (subject to
paragraph (ii) below) thereafter appoint as the relevant Agent,
provided that:
(i) if the Borrower does not during such 30 day period identify any
such persons, the person identified by the Majority Lenders
shall at the end of such period be appointed as the successor
Administrative Agent; and
(ii) if the Majority Lenders do not consent to the person (or any of
the
88
persons) identified by the Borrower (such consent not to be
unreasonably withheld) the person initially identified by the
Majority Lenders shall be appointed as the Administrative
Agent.
(b) In relation to the resignation of an Administrative Agent, if the
appointment of a successor Administrative Agent is to be made by the
Majority Lenders but they have not within 45 days after notice of
resignation, appointed a successor Administrative Agent which accepts
the appointment, the retiring Administrative Agent may appoint a
successor Administrative Agent.
(c) The resignation of the retiring Administrative Agent or the removal of
an Administrative Agent, as the case may be, and the appointment of
any successor Administrative Agent will both become effective only
upon the successor Administrative Agent notifying all the Parties that
it accepts the appointment. On giving the notification, the successor
Administrative Agent will succeed to the position of the retiring
Administrative Agent or the removed Administrative Agent, as the case
may be, and the term "Administrative Agent" will mean the successor
Administrative Agent.
(d) A retiring Administrative Agent or the removed Administrative Agent,
as the case may be, shall, at its own cost, make available to the
successor Administrative Agent such documents and records and provide
such assistance as the successor Administrative Agent may reasonably
request for the purposes of performing its functions as the
Administrative Agent under this Agreement.
(e) Upon its resignation or removal, as the case may be, becoming
effective, this Clause 18 (The Administrative Agent and the Arranger)
shall continue to benefit the retiring Administrative Agent in respect
of any action taken or not taken by it under or in connection with the
Finance Documents while it was an Administrative Agent, and, subject
to paragraph (d) above, it shall have no further obligation in its
capacity as such Administrative Agent under any Finance Document.
18.16 Lenders.
-------
The Administrative Agent may treat each Lender as a Lender, entitled to
payments under this Agreement and as acting through its Facility
Office(s), until it has received not less than 5 Business Days prior
notice from the Lender to the effect that it is no longer entitled to
payments and/or is no longer acting through its specified Facility
Office.
89
19. FEES
19.1 Commitment Fee.
--------------
(a) The Borrower shall pay to the Administrative Agent for the account of
each Lender a commitment fee in Dollars on the Undrawn Commitment
during the period from Effective Date through the Final Maturity Date
for that Lender (or, if the Term-Out Option is exercised, the Term-Out
Date), which fee shall be calculated on a daily basis by multiplying
the following: (i) the Undrawn Commitment at the end of a day, by (ii)
the Commitment Fee Rate for such day, by (iii) 1/360, by (iv) a
fraction, the numerator of which is such Lender's Revolving Credit
Commitment at the end of such day and the denominator of which is the
Total Revolving Credit Commitment at the end of such day.
(b) Accrued commitment fee shall be payable quarterly in arrears from the
Effective Date and on the Final Maturity Date (or, if the Term-Out
Option is exercised, the Term-Out Date) and shall be calculated to and
including the last day of the immediately preceding month. Accrued
commitment fee shall also be payable to the Administrative Agent for
the account of the relevant Lender(s) on the canceled amount of any
Commitment at the time the cancellation comes into effect.
19.2 Arrangement Fee.
---------------
The Borrower shall pay to the Administrative Agent for the account of the
Arranger on the Effective Date an arrangement fee in Dollars in the amount
set forth in the Fee Letter.
19.3 Administrative Agent's Fee.
--------------------------
The Borrower shall pay to the Administrative Agent for its own account an
annual agency fee in Dollars in the amounts and at the times set forth in
the Fee Letter.
19.4 Reserved.
--------
19.5 Reserved.
--------
19.6 Conversion Fee.
--------------
If the Borrower exercises the Term-Out Option in accordance with Clause 2.6
(Term-Out Option), the Borrower shall pay to the Administrative Agent for
the
90
account of the Lenders a conversion fee in Dollars computed at the rate of
(a) 0.20 percent of Total Outstandings on the Term-Out Date payable on such
day and (b) 0.10 percent of Total Outstandings on each anniversary of the
Term-Out Date payable on such day.
20. EXPENSES
20.1 Facility Expenses.
-----------------
The Borrower shall reimburse the Administrative Agent and/or the Arranger,
as appropriate, on demand for the reasonable charges and expenses (together
with value added tax or any similar tax thereon and including, without
limitation, the reasonable fees and expenses of legal advisers) incurred by
the Administrative Agent or the Arranger, as the case may be, in connection
with:
(a) the Syndication;
(b) the negotiation, preparation, printing and execution of this Agreement
and any other documents referred to in this Facility Agreement;
(c) any other Finance Document; and
(d) all supplements, waivers and variations in relation to the Finance
Documents and any other documents referred to therein.
20.2 Enforcement Expenses.
--------------------
The Borrower shall reimburse the Administrative Agents on demand for the
charges and expenses (together with value added tax or any similar tax
thereon and including, without limitation, the fees and expenses of legal
advisers) properly incurred by them in connection with the enforcement of,
or the preservation of any rights under, any of the Finance Documents. In
addition, the Borrower will upon demand pay to the Lenders the amount of
their respective expenses, including the reasonable fees and expenses of
their counsel and of any experts and agents which expenses are incurred in
the exercise or enforcement of any of the rights of the Lenders hereunder
but only such expenses which are incurred after an Event of Default has
occurred and is continuing.
21. STAMP DUTIES
The Borrower shall pay, and on demand indemnify, each of the Agents against
any and all stamp, registration and similar Taxes which may be payable in
connection
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with the entry into or performance of any of the Finance Documents (other
than any Assignment and Acceptance or any other document transferring an
interest pursuant to Clause 24.3) or the enforcement of any of the Finance
Documents.
22. AMENDMENTS, WAIVERS, REMEDIES CUMULATIVE
22.1 Amendments.
----------
(a) Subject to paragraphs (b) and (c) below, if authorized by the Majority
Lenders, the Administrative Agent shall, on behalf of the Lenders,
grant waivers or consents or (with the prior consent of the Borrower)
vary the terms of the provisions of any Finance Document, unless the
express provisions of the relevant Finance Document provide that the
same can only be granted or effected by another authority, provided
that the Administrative Agent may without the consent of the Lenders
modify Schedule 1 in connection with an assignment or transfer under
Clause 24.3.
(b) Nothing in paragraph (a) above shall authorize except with the prior
consent of the Super Majority Lenders:
(i) any variation of definition of "Event of Default" in Clause 16;
or
(ii) any variation of Clause 15.10(b) (Financial Condition) except
Clause 15.10(b)(iii)(A).
(c) Nothing in paragraph (a) or (b) above shall authorize except with the
prior consent of all the Lenders:
(i) subject to Clause 2.5 (Extension of the Final Maturity Dates),
the extension of any Commitment Period or Final Maturity Date
or Final Repayment Date; or
(ii) any variation of the definition of "Majority Lenders" in Clause
1.1 (Defined Terms); or
(iii) any change in any rate at which interest is payable under any
of the Finance Documents; or
(iv) any extension of the date for, or alteration in the amount or
currency of, any payment of principal, interest, fee,
commission or any other amount payable under any of the Finance
Documents; or
(v) any increase in any Lender's Commitment; or
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(vi) any variation of Clause 27 (Pro Rata Sharing) or this Clause
22.1; or
(vii) any variation or amendment to any provision of the Finance
Documents requiring the unanimous consent of the Lenders which
would result in the removal of such requirement; or
(viii) the release of any Guarantor of its obligations under Clause 13
(Guarantee); or
(ix) any variation of definition of "Borrowing Base", "Debt",
"Market Net Worth", "Market Value", "Qualifying Collateral",
"Qualifying Issuer", "Qualifying Security", "Super Majority
Lenders", "Total Liabilities" or "Unsecured Liabilities" in
Clause 1.1 (Defined Terms); or
(x) any variation of Clause 15.10(b)(iii)(A).
22.2 Waivers.
-------
No failure to exercise and no delay in exercising, on the part of any
Contracting Party, any right, power or privilege under any Finance Document
shall operate as a waiver thereof, nor shall any single or partial exercise
of any right, power or privilege preclude any other or further exercise
thereof, or the exercise of any other right, power or privilege. No waiver
by any Contract Party shall be effective unless it is in writing and signed
by the waiving party.
22.3 Remedies Cumulative.
-------------------
The rights and remedies of each Contracting Party provided in the Finance
Documents are cumulative and not exclusive of any rights or remedies
provided by law.
23. NOTICES
23.1 Address.
-------
(a) Except as otherwise stated in this Agreement, all notices or other
communications under this Agreement to any Contracting Party shall be
made by letter or facsimile and shall be deemed to be duly given or
made when delivered (in the case of a letter) or when received (in the
case of facsimile) to or by the Contracting Party addressed to it at
its address, telex
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number or facsimile number:
(i) notified to the Administrative Agent prior to the Effective
Date; or
(ii) in the case of a Contracting Party which becomes a Contracting
Party after the Effective Date, notified to the Administrative
Agent before or at the time it becomes a Contracting Party;
(iii) in the case of the Administrative Agent, at its address, telex
number or facsimile number set forth in paragraph (b) below; or
(iv) in the case of the Borrower, at its address, telex number or
facsimile number set forth in paragraph (c) below; or
(v) in the case of each Guarantor, at the Company's address, telex
number or facsimile number set forth in paragraph (d) below; or
(vi) as the Contracting Party may, after the Effective Date, specify
to the Administrative Agent for such purpose by not less than
five Business Days' notice; or
(vii) in the case of the Administrative Agent, as the Administrative
Agent may specify to the other Contracting Parties, for such
purpose by not less than five Business Days' notice.
(b) The Administrative Agent's address, telex number and facsimile number
for notices is:
Commerzbank Aktiengesellschaft
New York Branch
2 World Financial Center
▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
▇▇▇
For the attention of the Real Estate Department
Telex No: 177338
Fax No.: ▇▇▇ ▇▇▇-▇▇▇▇
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(c) The Borrower's address, telex number and facsimile number for notices
as at the Effective Date is:
Security Capital Holdings S.A.
▇▇, ▇▇▇▇▇ ▇'▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telex: 3636BIL
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of Managing Director
(d) The Company's address, telex number and facsimile number for notices
is:
Security Capital U.S. Realty
▇▇, ▇▇▇▇▇ ▇'▇▇▇▇
▇-▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇
Telex: 3636BIL
Fax: ▇▇▇ ▇▇▇▇ ▇▇▇▇
For the attention of Managing Director
with a copy to
Security Capital (UK) Management Limited
▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇ X 2US
Fax: ▇▇▇▇ ▇▇▇ ▇▇▇▇ or
0171 287 7637
23.2 Non-working Days.
----------------
A notice or other communication received on a non-working day or after
business hours in the place of receipt shall be deemed to be served on the
next following working day in that place.
24. ALTERATIONS TO THE CONTRACTING PARTIES
24.1 Successors.
----------
This Agreement shall be binding upon and inure to the benefit of each of
the Contracting Parties and their respective successors and permitted
assigns.
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24.2 Assignments and Transfers by the Borrower or any Guarantor.
----------------------------------------------------------
Neither the Borrower nor any Guarantor may assign or otherwise transfer all
or any part of its rights or obligations under the Finance Documents
without the prior consent of all the Lenders, except to the extent
permitted under Clause 15.12.
24.3 Assignments and Transfers by Lenders.
------------------------------------
(a) Subject to paragraphs (b) through (f) below, any Lender (the
"Assignor") may at any time assign or otherwise transfer all or any
part of its rights or obligations under this Agreement and any Note
(subject in the case of an assignment or transfer of part only of its
rights or obligations, to a minimum amount of $10,000,000 being
assigned or transferred and to the Assignor retaining a minimum
Commitment of $10,000,000) to another bank or financial institution
(the "Assignee") with, subject as provided below, the prior consent of
the Administrative Agent and the Borrower (in each case not to be
unreasonably withheld). The minimum Commitment of $10,000,000
applicable to partial assignments or transfers shall be reduced
proportionately in accordance with the cancellation or reduction of
the Total Revolving Credit Commitments.
(b) A transfer of obligations shall not be effective until (i) written
notice of such assignment, together with payment instructions,
addresses and related information with respect to the Assignee, shall
have been given to the Borrower and the Administrative Agent by the
Assignor and the Assignee and (ii) the Assignor and the Assignee shall
have delivered to the Borrower and the Administrative Agent an
Assignment and Acceptance in the form of Schedule 5 ("Assignment and
Acceptance").
(c) From and after the date that the Administrative Agent notifies the
Assignor that it has received (and provided its consent with respect
to) an executed Assignment and Acceptance, the consent of the Borrower
thereto and payment of the fee provided in paragraph (g) below, (i)
the Assignee thereunder shall be a party hereto and, to the extent
that rights and obligations hereunder have been assigned to it
pursuant to such Assignment and Acceptance, shall have the rights and
obligations of a Lender under this Agreement, (ii) the Assignor shall,
to the extent that rights and obligations hereunder have been assigned
by it pursuant to such Assignment and Acceptance, relinquish its
rights and be released from its obligations under this Agreement and
(iii) the Assignor, the Administrative Agent and the Borrower shall
make appropriate arrangements so that new Notes are issued to the
Assignee and the
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Assignor, as appropriate. Immediately upon each Assignee's making its
fee payment under the Assignment and Acceptance, this Agreement shall
be deemed to be amended to the extent, but only to the extent,
necessary to reflect the addition of the Assignee and the resulting
adjustment of the Commitments arising therefrom.
(d) Nothing in this Agreement shall restrict the ability of any Lender to
(i) assign or otherwise transfer its rights and obligations to any
Affiliate of such Lender or (ii) assign or otherwise transfer its
rights or obligations if an Event of Default has occurred and is
continuing.
(e) Any Lender may at any time sell to one or more commercial banks or
other Persons not Affiliates of the Borrower (a "Participant")
participating interests in any Advances made by such Lender, the
Revolving Credit Commitment of such Lender and the other interests of
such Lender (the "Originator") hereunder and under any Note (including
its rights, obligations or rights and obligations); provided, however,
that (i) the Originator's obligations under this Agreement shall
remain unchanged, (ii) the Originator shall remain solely responsible
for the performance of such obligations, (iii) the Borrower and the
Administrative Agent shall continue to deal solely and directly with
the Originator in connection with the Originator's rights and
obligations under this Agreement, and (iv) no Lender shall transfer or
grant any participating interest under which the Participant has
rights to approve any amendment to, or any consent or waiver with
respect to, this Agreement (except to the extent such amendment,
consent or waiver relates to any fees payable hereunder or the amount
of principal of or the rate at which interest is payable on the
Advances, or the dates fixed for payments of principal of or interest
on the Advances). In the case of any such participation, the
Participant shall be entitled to the benefit of Clauses 9, 11, 12 and
26 as though it were also a Lender hereunder, and if amounts
outstanding under this Agreement or any Note are due and unpaid, or
shall have been declared or shall have become due and payable upon the
occurrence of an Event of Default, each Participant shall be deemed to
have the right of set-off in respect of its participating interest in
amounts owing under this Agreement or such Note to the same extent as
if the amount of its participating interest were owing directly to it
as a Lender under this Agreement or such Note.
(f) Notwithstanding any other provision in this Agreement, any Lender may
at any time create a Security Interest in, or pledge, all or any
portion of its rights under and interest in this Agreement and any
Note in favor of
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any Federal Reserve Bank in accordance with Regulation A of the
Federal Reserve Board or U.S. Treasury Regulation 31 CFR (S)203.14,
and such Federal Reserve Bank may enforce such pledge or security
interest in any manner permitted under applicable law, provided that
payment made by the Borrower or any Guarantor to or for the account of
any Lender in respect of an Advance made by such Lender shall satisfy
the Borrower's or the Guarantor's, as the case may be, payment
obligation in respect of such Advance to the extent of such payment
regardless of any encumbrance created pursuant to this Clause 24.3(f).
(g) On each occasion an Assignor assigns or transfers its Commitment
rights and/or obligations under this Agreement or any Note, the
Assignee shall on the date of the assignment and/or transfer, pay to
the Administrative Agent for its own account a fee of $2,500.
(h) The Administrative Agent shall promptly (i) notify the other
Contracting Parties of the receipt and execution on their behalf by it
of any Assignment and Acceptance or any notice under paragraph (b)
above and (ii) modify Schedule 1 to reflect the relevant assignment or
transfer and distribute the revised Schedule 1 to the other
Contracting Parties.
24.4 Reference Lenders.
-----------------
If a Reference Lender (or, if a Reference Lender is not a Lender, the
Lender of which it is an Affiliate) ceases to be one of the Lenders, the
Administrative Agent will, in consultation with the Company and the
Borrower appoint another Lender or an Affiliate of a Lender as a Reference
Lender.
24.5 Disclosure.
----------
Each Lender may disclose to an Affiliate or a proposed assignee or
transferee or a New Lender or any sub-participant, risk participant or
other participant proposing to enter or having entered into a contract with
the Lender regarding any Finance Document any information in the possession
of the Lender received under this Agreement relating to the Borrower, any
Guarantor or any of its related entities as it sees fit provided always
that information which is confidential may only be disclosed to an
Affiliate or a person with whom such Lender is proposing to enter, or has
entered into, a transfer, participation or other agreement in relation to
this Agreement if the person has provided a written undertaking to keep the
information confidential and only to use it for the purposes of this
Agreement.
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24.6 Change of Facility Office.
-------------------------
Each Lender shall participate in this Agreement through its Facility
Office(s), but may change any Facility Office from time to time by five
Business Days' prior notice to the Administrative Agent.
24.7 Increased Costs Withholding Taxes.
---------------------------------
If:
(a) any assignment or transfer of all or any part of the rights or
obligations of a Lender pursuant to Clause 24.3 (Assignment and
Transfers by Lenders); or
(b) any change in a Lender's Facility Office,
results at the time of any assignment, transfer or change in amounts
becoming due under Clause 10.3(b) (Taxes) or 11.1 (Increased Costs), then
the assignee, transferee, New Lender or Lender, as the case may be, shall
be entitled to receive those amounts only to the extent that the assignor,
transferor, Existing Lender or Lender, as the case may be, would have been
so entitled had there been no assignment, transfer, substitution or change
in Facility Office.
25. SET-OFF
Each Financial Institution may (but shall not be obliged to) at any time
after a Default has occurred and is continuing set-off against any
obligation of the Borrower or any Guarantor due and payable but not paid
under any Finance Document any moneys held by the Lender for the account of
the Borrower or such Guarantor as the case may be at any office of the
Financial Institution anywhere and in any currency. The Financial
Institution may effect any appropriate currency exchanges to implement such
set-off and shall thereafter notify the Borrower.
26. INDEMNITIES
(a) The Borrower and each Guarantor shall indemnify each Financial
Institution against any loss or expense which that Financial
Institution may reasonably sustain or incur as a consequence of:
(i) the occurrence of any Default; or
(ii) the operation of Clause 16.2 (Non-Payment); or
(iii) any repayment or prepayment of a LIBOR Advance or payment of
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an overdue amount being made otherwise than on a Maturity Date
relative thereto and, for the purpose of this Clause 26
(a)(iii), a Maturity Date relative to an overdue amount shall
be the last day of any Designated Term (as defined in Clause
7.3(a)(ii)(Default Interest)); or
(iv) (other than by reason of gross negligence or default by any
Lender or any Agent) any Advance not being made after a Request
has been served in respect thereof; or
(v) any prepayment not being made following notice thereof by the
Borrower; or
(vi) any liability of any Lender or the Administrative Agent in
respect of Taxes resulting from any amounts paid or payable by
the Borrower or any Guarantor under the Finance Documents.
(b) The Borrower's and each Guarantor's liability under paragraph (a)
above shall include, without limitation, any loss (but not loss of
margin) or expense on account of funds borrowed, contracted for or
utilized to fund any amount payable under any Finance Document, any
amount repaid or prepaid or any Advance.
27. PRO RATA SHARING
27.1 Redistribution.
--------------
(a) Subject to Clause 27.2 (Notification), if at any time the proportion
which any Lender (the "receiving Lender") has received or recovered
(whether by set-off or otherwise) in respect of its portion of any sum
due and owing from the Borrower or any Guarantor under any Finance
Document is greater (the amount of excess being referred to in this
Clause 27.1 as the "excess amount") than the proportion received or
recovered by the Lender receiving or recovering the smallest
proportion (which shall include a zero receipt), then:
(i) the receiving Lender shall promptly notify the Administrative
Agent;
(ii) the receiving Lender shall promptly and in any event within ten
days of receipt or recovery of the excess amount pay to the
Administrative Agent an amount equal to the excess amount;
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(iii) the Administrative Agent shall treat the payment as if it were
a payment by the Borrower or relevant Guarantor (as the case
may be) on account of a sum owed to the Lenders and shall pay
the same to the Lenders (including the receiving Lender) pro
rata to their respective entitlements; and
(iv) as between the Borrower or the relevant Guarantor (as the case
may be) and the receiving Lender the excess amount shall be
treated as not having been paid, while as between the Borrower
or the relevant Guarantor (as the case may be) and each Lender
(including the receiving Lender), it shall be treated as having
been paid to the extent receivable by the Lender.
(b) If a receiving Lender is subsequently required to repay to the
Borrower or any Guarantor any amount received or recovered by it and
dealt with under paragraph (a) above, each Lender shall promptly repay
to the Administrative Agent for the account of the receiving Lender
the portion of the amount distributed to it, together with interest
thereon at a rate sufficient to reimburse the receiving Lender for any
interest which it has been required to pay to the Borrower or such
Guarantor in respect of the portion of such amount.
27.2 Notification.
------------
(a) Each Lender shall promptly give notice to the Administrative Agent of
the receipt or recovery by the Lender of any amount received or
recovered by it in respect of this Agreement otherwise than through
the Administrative Agent.
(b) Each Lender shall give notice to the Administrative Agent before
instituting any legal action or proceedings under or in connection
with this Agreement.
(c) Upon receipt of any notice under paragraph (a) or (b) above, the
Administrative Agent will as soon as practicable notify all the other
Lenders.
28. ADDITIONAL GUARANTORS
28.1 Additional Guarantors.
---------------------
(a) In the event that the Borrower, any Guarantor or any of their
respective
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Wholly-Owned Consolidated Subsidiaries at any time after the date
hereof owns, forms, acquires or otherwise establishes any Wholly-Owned
Consolidated Subsidiary, the Borrower shall notify the Administrative
Agent (which shall in turn notify the other Financial Institutions).
(b) The Borrower shall, within 30 days thereof, procure that such Wholly-
Owned Consolidated Subsidiary shall become, as soon as possible after
being required by the Administrative Agent to become, an Additional
Guarantor by entering into a Guarantor Joinder Agreement (in the
agreed form relevant to that jurisdiction).
(c) Upon receipt by the Administrative Agent of the Guarantor Joinder
Agreement signed on behalf of the Borrower for itself and the existing
Guarantors and by the proposed Additional Guarantor, the
Administrative Agent shall execute the same for itself and on behalf
of the Parties and shall as promptly as practicable give notice of
such execution to all of the parties to the Guarantor Joinder
Agreement.
(d) On each date that a Guarantor Joinder Agreement is entered into the
Borrower shall procure that certified copies of each of the Additional
Conditions Precedent are delivered in respect of the Additional
Guarantor and the Guarantor Joinder Agreement in form and substance
reasonably satisfactory to the Administrative Agent.
28.2 Additional Conditions Precedent.
-------------------------------
(a) Each of the Additional Conditions Precedent to be delivered pursuant
to Clause 28.1(d) (Additional Guarantors) above shall be certified by
a Managing Director, Senior Vice President or Vice President of the
Additional Guarantor as being correct, complete and in full force and
effect as at a date no earlier than the date on which the relevant
Guarantor Joinder Agreement was executed.
(b) The Administrative Agent shall promptly notify the Borrower and the
Lenders whether or not the Additional Conditions Precedent relating to
any Additional Guarantor have been met or waived.
29. GOVERNING LAW
This Agreement and the other Finance Documents shall be construed in
accordance with, and governed by, the internal laws of the State of New
York.
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30. JURISDICTION
(a) Each of the Contracting Parties irrevocably agrees for the benefit of
each of the other Contracting Parties that the State Courts or the
Federal District Courts sitting in New York City shall have
jurisdiction to hear and determine any suit, action or proceeding, and
to settle any disputes, which may arise out of or in connection with
the Finance Documents, and for such purposes irrevocably submits to
the Jurisdiction of such Courts.
(b) Each of the Contracting Parties irrevocably waives any objection which
it may have now or hereafter to such Courts as are referred to in
paragraph (a) above being nominated as the forum to hear and determine
any suit, action or proceeding, and to settle any disputes, which may
arise out of or in connection with the Finance Documents and any claim
that any such Court is not a convenient or appropriate forum.
(c) The Borrower and each Guarantor agrees that the process by which any
suit, action or proceeding in New York is begun may be served on it by
being delivered to CT Corporation System, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇,
▇▇▇ ▇▇▇▇ ▇▇▇▇▇.
(d) The submission to the said jurisdiction shall not (and shall not be
construed so as to) limit the right of any of the Contracting Parties
to take proceedings against any other Contracting Party in any other
court of competent jurisdiction, nor shall the taking of proceedings
in any one or more jurisdictions preclude the taking of proceedings in
any other jurisdiction, whether concurrently or not.
(e) The Borrower and each Guarantor further irrevocably consents to the
service of process out of the aforesaid Courts in any such action or
proceedings by the mailing of copies thereof by registered or
certified airmail, postage prepaid to the Borrower and/or the relevant
Guarantor at its address applying for the time being under Clause 23.1
(Notices).
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(f) Nothing herein shall affect the right to serve process in any other
manner permitted by law.
-----
SECURITY CAPITAL U.S. REALTY SECURITY CAPITAL HOLDINGS S.A.
_____
SECURITY CAPITAL OFFICE PORTFOLIO SARL, SECURITY CAPITAL STORAGE PORTFOLIO SARL,
▇▇▇▇▇▇ HOLDINGS SARL, BARCELONA HOLDINGS SARL, COVENTRY HOLDINGS SARL, DUBLIN
HOLDINGS SARL, EDINBURGH HOLDINGS SARL, FRANKFURT HOLDINGS SARL, GENEVA HOLDINGS
SARL, HELSINKI HOLDINGS SARL, ISTANBUL HOLDINGS SARL, ▇▇▇▇▇▇▇▇▇ HOLDINGS SARL,
KIRKWALL HOLDINGS SARL, LISBON HOLDINGS SARL, MADRID HOLDINGS SARL, SHEFFIELD
HOLDINGS SARL, ARDEN SQUARE HOLDING SARL, BLOSSOM VALLEY HOLDING SARL, ▇▇▇▇▇▇
STREET PLAZA HOLDING SARL, DALLAS HOLDING SARL, EL CAMINO HOLDING SARL, FRIARS
MISSION HOLDING SARL, REDONDO VILLAGE HOLDING SARL
31. WAIVER OF JURY TRIAL
THE BORROWER AND EACH GUARANTOR HEREBY IRREVOCABLY WAIVES, TO THE FULLEST
EXTENT PERMITTED BY APPLICABLE LAW, ANY AND ALL RIGHT TO TRIAL BY JURY IN
ANY LEGAL PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT OR THE
OTHER FINANCE DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
32. SEVERABILITY
If any provision of this Agreement is prohibited or unenforceable in any
jurisdiction, the prohibition or unenforceability, shall not invalidate the
remaining provisions of this Agreement or affect the validity or
enforceability of the provision in any other jurisdiction.
33. COUNTERPARTS
This Agreement may be executed in any number of counterparts and all of the
counterparts taken together shall be deemed to constitute one and the same
instrument.
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IN WITNESS whereof the parties hereto have caused this Agreement to be duly
executed on the date first written above.
SECURITY CAPITAL HOLDINGS S.A.,
as Borrower
By:
Name:
Title:
SECURITY CAPITAL U.S. REALTY,
as Guarantor
By:
Name:
Title:
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SECURITY CAPITAL OFFICE
PORTFOLIO SARL, SECURITY
CAPITAL STORAGE PORTFOLIO
SARL, ▇▇▇▇▇▇ HOLDINGS SARL,
BARCELONA HOLDINGS SARL,
COVENTRY HOLDINGS SARL,
DUBLIN HOLDINGS SARL,
EDINBURGH HOLDINGS SARL,
FRANKFURT HOLDINGS SARL,
GENEVA HOLDINGS SARL,
HELSINKI HOLDINGS SARL,
ISTANBUL HOLDINGS SARL,
▇▇▇▇▇▇▇▇▇ HOLDINGS SARL,
KIRKWALL HOLDINGS SARL,
LISBON HOLDINGS SARL,
MADRID HOLDINGS SARL,
SHEFFIELD HOLDINGS SARL,
ARDEN SQUARE HOLDING SARL,
BLOSSOM VALLEY HOLDING SARL,
▇▇▇▇▇▇ STREET PLAZA HOLDING SARL,
DALLAS HOLDING SARL,
EL CAMINO HOLDING SARL,
FRIARS MISSION HOLDING SARL,
REDONDO VILLAGE HOLDING SARL, as
Guarantors
By:
Name:
Title:
By:
Name:
Title:
-106-
COMMERZBANK AKTIENGESELLSCHAFT,
New York Branch,
as Arranger and as
Administrative Agent
By:
Name:
Title:
By:
Name:
Title:
-107-
BANK OF AMERICA, N.A.,
as Syndication Agent and as a
Lender
By:
Name:
Title:
COMMERZBANK AKTIENGESELLSCHAFT,
New York and Grand Cayman
Branches,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
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BANQUE INTERNATIONALE A
LUXEMBOURG,
as a Lender
By:
Name:
Title:
By:
Name:
Title:
BANKBOSTON, N.A.,
as a Lender
By:
Name:
Title:
CHASE BANK TEXAS, N.A.,
as a Lender
By:
Name:
Title:
-109-
▇▇▇▇▇ FARGO BANK,
NATIONAL ASSOCIATION,
as a Lender
By:
Name:
Title:
BANK OF MONTREAL,
as a Lender
By:
Name:
Title:
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