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Exhibit 99
$24,250,000
SECURED TERM LOAN AGREEMENT
by and among
NET 2 L.P., as Borrower
NET 2 PLYMOUTH LLC, as Co-Borrower
and
KEYBANK NATIONAL ASSOCIATION, as Lender
Dated as of May 19, 2000
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TABLE OF CONTENTS
SECTION 1. DEFINITIONS.................................................................................... 1
1.1. Defined Terms.................................................................................. 1
1.2. Computation of Time Periods.................................................................... 1
1.3. Accounting Terms............................................................................... 2
1.4. Other Terms.................................................................................... 2
SECTION 2. THE LOAN....................................................................................... 2
2.1. Loan Facility.................................................................................. 2
2.2. Authorized Agents of and Employees of Borrower................................................. 2
2.3. Promise to Repay; Evidence of Indebtedness; the Liabilities.................................... 3
2.4. Joint and Several Liability of Borrower and Co-Borrower........................................ 6
2.5. Base Rate Tranches/LIBOR Rate Tranches; Selection of Rate Trenches............................. 7
2.6. Interest on the Loan and other Liabilities..................................................... 8
2.7. Duration and Determination of Interest Period; Determination of Interest Rate;
Continuation/Conversion of Tranches............................................................ 9
2.8. Optional Prepayments; Mandatory Prepayments.................................................... 10
2.9. Computation of Interest and Fees............................................................... 11
2.10. Payments....................................................................................... 11
2.11. Use of Loan Proceeds........................................................................... 12
2.12. Increased Costs................................................................................ 13
2.13. Change in Law Rendering LIBOR Rate Tranches Unlawful........................................... 14
2.14. LIBOR Availability............................................................................. 15
2.15. Base Rate Price Adjustment..................................................................... 15
2.16. Indemnities.................................................................................... 16
2.17. Fees........................................................................................... 17
2.18. Usury.......................................................................................... 17
SECTION 3. [INTENTIONALLY OMITTED]........................................................................ 17
SECTION 4. REPRESENTATIONS AND WARRANTIES................................................................. 17
4.1. Financial Condition............................................................................ 17
4.2. No Material Adverse Effect..................................................................... 18
4.3. Existence; Borrower's, Co-Borrower's and General Partner's Compliance with Law................. 18
4.4. Power; Authorization; Enforceable Liabilities.................................................. 18
4.5. No Legal Bar................................................................................... 18
4.6. No Material Litigation......................................................................... 18
4.7. No Default..................................................................................... 19
4.8. Taxes.......................................................................................... 19
4.9. Federal Regulations............................................................................ 19
4.10. ERISA.......................................................................................... 19
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4.11. Investment Company Act......................................................................... 19
4.12. Subsidiaries; Ownership of Capital Stock and Partnership Interests............................. 20
4.14. Partnership Agreement, Operating Agreement, Etc................................................ 20
4.15. Disclosures.................................................................................... 20
4.16. Real Properties................................................................................ 20
4.17 Brokers' Fees.................................................................................. 25
4.18 Security Interests and Liens................................................................... 25
4.19 Disregarded Entity Status...................................................................... 26
SECTION 5. CONDITIONS PRECEDENT; REAL PROPERTIES; MORTGAGED PROPERTIES; RELEASES.......................... 26
5.1. Conditions to Loan............................................................................. 26
5.2 Due Diligence With Respect to Real Properties/Mortgaged Properties............................. 28
5.3 Conditions Precedent to Extension.............................................................. 29
5.4 Release of Mortgaged Properties................................................................ 30
SECTION 6. AFFIRMATIVE COVENANTS.......................................................................... 32
6.1. Financial Statements........................................................................... 32
6.2. Certificates; Other Information................................................................ 33
6.3 Punctual Payment............................................................................... 33
6.4. Payment of Other Liabilities................................................................... 33
6.5. Conduct of Business and Maintenance of Existence............................................... 33
6.6 Inspection of Property; Books and Records; Discussions......................................... 34
6.7. Notices........................................................................................ 34
6.8. Changes in GAAP................................................................................ 35
6.9. Maintenance; Insurance; Casualty and Condemnation. ........................................... 35
6.10. Leases. ...................................................................................... 37
6.11. Subordination of Payables to Affiliates........................................................ 37
6.12. Payment of Taxes and Claims.................................................................... 37
6.13. No Amendments to Certain Documents............................................................. 38
6.14. Year 2000...................................................................................... 38
6.15 Real Property Statements....................................................................... 38
6.16 Intentionally Omitted.......................................................................... 38
6.17 Environmental Compliance; Indemnification...................................................... 38
6.18 Consolidated Status............................................................................ 41
SECTION 7. NEGATIVE COVENANTS............................................................................. 41
7.1. Financial Covenants............................................................................ 41
7.2. Restricted Payments............................................................................ 41
7.3. Merger; Sale of Assets; Termination and Other Actions.......................................... 42
7.4. Transactions with Affiliates................................................................... 42
7.5. Accounting Changes............................................................................. 42
7.6. No Indebtedness or Liens; Negative Pledge as to Missouri Property.............................. 42
7.7. Fiscal Year.................................................................................... 42
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7.8. Chief Executive Office......................................................................... 42
7.9. Limitations on Certain Activities.............................................................. 43
7.10 Amendments and Modifications of Leases......................................................... 43
7.11 Prohibitions of Cross-Default.................................................................. 43
SECTION 8. EVENTS OF DEFAULT.............................................................................. 43
8.1. Events of Default.............................................................................. 43
8.2 Remedies....................................................................................... 44
8.3. Annulment of Acceleration...................................................................... 45
8.4. Cooperation by Borrower and Co-Borrower. ..................................................... 45
SECTION 9. [INTENTIONALLY OMITTED]........................................................................ 45
SECTION 10. GENERAL........................................................................................ 45
10.1. Assignments and Participations................................................................. 45
10.2. Marshaling; Payments Set Aside................................................................. 47
10.3 Counterparts; Effectiveness; Inconsistencies................................................... 48
10.4 Disclaimer by Lender........................................................................... 48
10.5 Choice of Law.................................................................................. 48
10.6 Submission to Jurisdiction; Waiver of Jury Trial; Etc.......................................... 48
10.7 Notices; Certain Payments...................................................................... 49
10.8 No Waivers; Cumulative Remedies; Entire Agreement; Headings.................................... 50
10.9 Survival....................................................................................... 51
10.10 Payment of Expenses and Taxes.................................................................. 51
10.11 Further Assurances............................................................................. 51
10.12 No Brokers..................................................................................... 52
10.13 Confidentiality................................................................................ 52
10.14 Set-Offs....................................................................................... 52
10.15 Syndication.................................................................................... 52
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EXHIBITS
EXHIBIT A - DEFINITIONS
EXHIBIT B - FORM OF NOTE
EXHIBIT C - NOTICE OF RATE TRANCHE SELECTION
EXHIBIT D - FORM OF NOTICE OF CONTINUATION/CONVERSION
EXHIBIT E - ORGANIZATIONAL STRUCTURE AND RELATED
MATTERS
EXHIBIT F - LEASES
EXHIBIT G - LIST OF ENVIRONMENTAL REPORTS
EXHIBIT H - FORM OF SOLVENCY CERTIFICATE
EXHIBIT I - FORM OF ESTOPPEL/SNDA
EXHIBIT J - FORM OF ASSIGNMENT AND ACCEPTANCE
EXHIBIT K - BORROWER REAL PROPERTIES
SCHEDULES
SCHEDULE 2.2 - RESPONSIBLE OFFICERS CERTIFICATE
SCHEDULE 5.4 - RELEASE PAYMENT AMOUNT
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SECURED TERM LOAN AGREEMENT
DATED AS OF MAY 19, 2000
THIS SECURED TERM LOAN AGREEMENT (the "Agreement") is made as of the 19th
day of May, 2000, by and among NET 2 L.P., a Delaware limited partnership
("Borrower"), NET 2 PLYMOUTH LLC, a Delaware limited liability company
("Co-Borrower") and KEYBANK NATIONAL ASSOCIATION, a national banking association
("Lender").
W I T N E S S E T H:
WHEREAS, Borrower and Co-Borrower desire to obtain a secured term loan
from Lender in the principal amount of Twenty-Four Million Two Hundred and Fifty
Thousand and 00/100 Dollars ($24,250,000.00) (the "Loan") for the purposes of
refinancing certain indebtedness of Borrower owed to Bank of America Commercial
Finance Corporation, f/k/a NationsCredit Commercial Corporation, successor to
Nations Financial Credit Corporation, and secured by, inter alia, the Borrower
Real Properties (defined herein), the acquisition by Co-Borrower of the
Co-Borrower Property (defined herein) and acting as a bridge loan for such
refinancing and acquisition until Borrower and Co-Borrower secure permanent
financing therefor; and
WHEREAS, Lender is willing, on the terms and conditions hereinafter set
forth, to extend the Loan to Borrowers.
NOW, THEREFORE, the parties hereto hereby agree as follows:
SECTION 1. DEFINITIONS
1.1. Defined Terms. As used in this Agreement all capitalized terms
not otherwise defined shall have the meanings set forth on EXHIBIT A attached
hereto and made a part hereof, applicable both to the singular and the plural
forms of the terms defined.
1.2. Computation of Time Periods. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
the word "from" means "from and including" and the words "to" and "until" each
mean "to but excluding". Periods of days referred to in this Agreement shall be
counted in calendar days unless Business Days are expressly prescribed. Any
period determined hereunder by reference to a month or months or year or years
shall end on the day in the relevant calendar month in the relevant year, if
applicable, immediately preceding the date numerically corresponding to the
first day of such subsequent period, provided that if such period commences on
the last day of a calendar month (or on a day for which there is no numerically
corresponding day in the calendar month during which such period is to end),
such
SECURED TERM
LOAN AGREEMENT 1
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period shall, unless otherwise expressly required by the other provisions of
this Agreement, end on the last day of the calendar month.
1.3. Accounting Terms. Subject to Section 6.8 of this Agreement, for
purposes of this Agreement, all accounting terms not otherwise defined herein
shall have the meanings assigned to them in conformity with GAAP.
1.4. Other Terms. All other terms contained in this Agreement shall,
unless the context indicates otherwise, have the meanings assigned to such terms
by the Uniform Commercial Code to the extent the same are defined therein.
SECTION 2. THE LOAN
2.1. Loan Facility.
(a) The Loan. Subject to the terms and conditions set forth in this
Agreement, Lender hereby agrees to make the Loan in Dollars to Borrowers.
Subject to the provisions of this Agreement, Borrowers may repay the Loan or any
portion thereof on any day that is a Business Day.
(b) Maturity Date. All outstanding Liabilities shall be paid in full
on the Maturity Date.
(c) Extension of Maturity Date. If no Default or Event of Default
then exists, Borrower may elect to obtain a one (1) year extension of the
then-existing Maturity Date one (1) time, by making such request in writing (an
"Extension Request") to Lender no later than sixty (60) days prior to the
Maturity Date. The Maturity Date shall be extended only if (i) Borrower pays to
Lender an extension fee equal to seventy-five one hundredths percent (0.75%) of
the then outstanding principal balance of the Loan at the time of delivery of
the Extension Request; and (ii) Borrower satisfies the conditions set forth in
Section 5.3 of this Agreement.
2.2. Authorized Agents of and Employees of Borrower. On the Closing Date
and from time to time thereafter, Borrower shall deliver to Lender a certificate
substantially in the form of the Responsible Officer's Certificate set forth on
Schedule 2.2 attached hereto and made a part hereof from a Responsible Officer
setting forth the names of the employees and agents authorized (a) to request a
Base Rate Tranche or LIBOR Rate Tranche pursuant to Section 2.5 of this
Agreement, (b) to request a Base Rate Tranche or LIBOR Rate Tranche conversion
or continuation pursuant to Section 2.7 of this Agreement or (c) to act for
Borrower and Co-Borrower in respect of all other matters relating to the Loan
Documents. Co-Borrower hereby expressly acknowledges and agrees that Borrower
shall have the absolute right to act on behalf of Co-Borrower, and bind
Co-Borrower for all purposes under this Agreement. Co-Borrower hereby waives any
right or defense based upon the scope of authority granted by Co-Borrower to
SECURED TERM
LOAN AGREEMENT 2
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Borrower hereunder. Lender shall be entitled to rely conclusively on such
Borrower's employees' or agents' authority until Lender receives written notice
to the contrary. Lender shall have no duty to verify the authenticity of the
signature appearing on any written document. Lender shall not incur any
liability to Borrower, Co-Borrower or any other Person in acting upon any
telephonic or facsimile notice referred to above which Lender believes to have
been given by a person duly authorized to act on behalf of Borrower or
Co-Borrower, and Borrower and Co-Borrower hereby indemnify and hold harmless
Lender from any loss or expense Lenders might incur in acting in good faith as
provided in this Section 2.2.
2.3. Promise to Repay; Evidence of Indebtedness; the Liabilities.
(a) Promise to Repay. Borrowers hereby, jointly and severally, agree
to pay when due the principal amount of the Loan, and further agree to pay all
unpaid interest accrued thereon, in accordance with the terms of this Agreement
and the Note. Borrowers shall execute and deliver to Lender on the Closing Date,
a promissory note, substantially in the form of EXHIBIT B attached hereto and
made a part hereof (such promissory note and all amendments thereto,
replacements thereof and substitutions therefor being collectively referred to
as the "Note").
(b) The Liabilities.
(i) Upon any Event of Default, Borrowers unconditionally, and
jointly and severally, promise to pay to Lender such amounts as are necessary to
cure the Event of Default or, at the option of Lender as provided in Section 8.2
of this Agreement, Borrowers agree, jointly and severally, to pay the
outstanding Liabilities in full.
(ii) The Liabilities are unconditional except as expressly set
forth herein, and Borrowers agree that Lender, upon the occurrence of an Event
of Default, shall not be required to assert any claim or cause of action against
either of Borrowers (or any other Person obligated to repay the Liabilities)
before asserting any claim or cause of action against either of the Borrowers
under this Agreement. Each of the Borrowers further agrees that Lender shall not
be required to pursue or foreclose on any Collateral that it may receive from
either of Borrowers as security for any of the Liabilities before making a claim
or asserting a cause of action against either of the Borrowers or any other
Collateral under this Agreement.
(iii) Lender's failure to perfect (by recording or otherwise),
protect, secure or insure any security interest or lien in any Collateral given
as security for the Liabilities or any other collateral now or hereafter
securing all or any part of the Liabilities shall not release Borrower or
Co-Borrower from its liabilities and obligations under this Agreement.
(iv) Except as otherwise expressly provided herein or in the
Loan Documents, presentment, protest, demand, and notice of protest and demand,
and notice of
SECURED TERM
LOAN AGREEMENT 3
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receipt of any and all Collateral, and of the exercise of possessory remedies or
foreclosure on any and all Collateral received by Lender from Borrower or
Co-Borrower are hereby waived.
(v) No Liabilities of Borrower or Co-Borrower under this
Agreement shall be affected, modified or impaired by the voluntary or
involuntary liquidation, dissolution, sale or other disposition of all or
substantially all of the assets, marshaling of assets and liabilities,
receivership, insolvency, bankruptcy, assignment for the benefit of creditors,
reorganization, arrangements, composition with creditors or readjustment of, or
other similar proceedings affecting either Borrower or Co-Borrower, or any of
the assets belonging to any of them, nor shall this Agreement be affected,
modified or impaired by the invalidity of the Note or any of the other Loan
Documents.
(vi) Without notice to Co-Borrower and without the consent of
Co-Borrower, Lender may:
(a) grant Borrower extensions of the time for payment of
the Liabilities or any part thereof;
(b) renew any of the Liabilities;
(c) grant Borrower extensions of time for performance of
agreements or other indulgences;
(d) at any time release any Collateral, or any mortgage,
deed of trust or security interest in any Collateral, that may
hereafter secure any of the Liabilities;
(e) compromise, settle, release or terminate any or all
of the obligations, covenants or agreements of Borrower under
the Note or other Loan Documents; and
(f) at any time partially or entirely release either
Borrower from the Liabilities.
(vii) Without notice to Borrower and without the consent of
Borrower, Lender may:
(a) grant Co-Borrower extensions of the time for payment
of the Liabilities or any part thereof;
(b) renew any of the Liabilities;
SECURED TERM
LOAN AGREEMENT 4
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(c) grant Co-Borrower extensions of time for performance
of agreements or other indulgences;
(d) at any time release any Collateral, or any mortgage,
deed of trust or security interest in any Collateral, that may
hereafter secure any of the Liabilities;
(e) compromise, settle, release or terminate any or all
of the obligations, covenants or agreements of Co-Borrower
under the Note or other Loan Documents; and
(f) at any time partially or entirely release
Co-Borrower from the Liabilities.
(viii) This Agreement shall continue to be effective, or be
reinstated, as the case may be, if at time any whole or partial payment or
performance of any Liabilities is or is sought to be rescinded or must otherwise
be restored or returned by Lender upon the insolvency, bankruptcy, dissolution,
liquidation or reorganization of Borrower or Co-Borrower upon or as a result of
the appointment of a receiver, intervenor or conservator of, or trustee or
similar officer for, Borrower or Co-Borrower or for any substantial part of its
property, or otherwise, all as though such payments and performance had not been
made, in any case to the extent of the performance rescinded or payments
restored or returned. This Agreement and the Liabilities hereunder shall not be
affected in any way by the transfer or other disposition of any Collateral
granted to Lender whether by deed, operation of law or otherwise.
(ix) Notwithstanding any provision contained in this Agreement
or any Loan Document to the contrary, in the event of any bankruptcy or
insolvency proceeding involving Borrower or Co-Borrower or in the event of any
challenge to the full enforceability of all or any of the Loan Documents by any
creditor of Borrower or Co-Borrower or a trustee, receiver or
debtor-in-possession of, for or in respect of Borrower or Co-Borrower the
liability of Borrower or Co-Borrower under the Loan Documents shall be limited
to the lesser of the following amounts minus, in either case, One Dollar
($1.00):
(a) the lowest amount which would render Borrower's or
Co-Borrower's undertakings under the Loan Documents a
fraudulent conveyance under the laws of the State of Ohio or
other similar or analogous law or statute of the state having
jurisdiction over the subject matter; or
(b) the lowest amount which would render Borrower's or
Co-Borrower's undertakings under the Loan Documents a
fraudulent transfer under Section 548 of the Bankruptcy Code
of 1978, as amended.
SECURED TERM
LOAN AGREEMENT 5
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Section 2.3(e) (ix) of this Agreement shall control every other provision
of the Loan Documents except, however, this provision shall not be construed to
prohibit a valuation of the assets of Borrower or Co-Borrower for an amount
exceeding (a) or (b) above, minus $1.00, at a date subsequent to the date
hereof, whereupon the individual liability of Borrower or Co-Borrower under the
Loan Documents shall increase with the value of such assets up to a maximum of
Twenty-Four Million Two Hundred and Fifty and 00/100 Dollars ($24,250,000.00).
2.4. Joint and Several Liability of Borrower and Co-Borrower.
(a) Borrower and Co-Borrower are accepting joint and several
liability hereunder and under the other Loan Documents, without preference or
distinction, irrevocably and unconditionally and not merely as a surety but also
as a co-debtor, in consideration of the financial accommodations to be provided
by Lender under this Agreement, for the mutual benefit, directly and indirectly,
of Borrower and Co-Borrower and in consideration of the undertakings of each of
Borrower and Co-Borrower to accept joint and several liability for the
Liabilities.
(b) If and to the extent that Borrower or Co-Borrower shall fail to
make any payment with respect to any of the Liabilities as and when due or to
perform any of the Liabilities in accordance with the terms of the Loan
Documents to which it is a party, then in each such event, subject to the grace
periods set forth therein, Borrower and Co-Borrower will make such payment with
respect to, or perform, such Liabilities.
(c) The Liabilities of Borrower and Co-Borrower under the provisions
of this Section 2.4 constitute full recourse Liabilities of each of them
enforceable against each such Person to the full extent of its properties and
assets, irrespective of the validity, regularity or enforceability of this
Agreement or any other circumstance whatsoever other than repayment or other
discharge of such Liabilities.
(d) Except as otherwise expressly provided in this Agreement or the
other Loan Documents, Borrower and Co-Borrower each hereby waives notice of
acceptance of its joint and several liability, notice of any action at any time
taken or omitted by Lender under or in respect of any of the Liabilities, and,
generally, to the extent permitted by applicable law, all demands, notices and
other formalities of every kind in connection with this Agreement. Except as
otherwise expressly provided in this Agreement or the other Loan Documents,
Borrower and Co-Borrower each hereby assents to, and waives notice of, any
extension or postponement of the time for the payment of any of the Liabilities,
the acceptance of any payment of any of the Liabilities, the acceptance of any
partial payment thereon, any waiver, consent or other action or acquiescence by
Lender at any time or times in respect of any default by Borrower or Co-Borrower
in the performance or satisfaction of any term, covenant, condition or provision
of this Agreement or any of the other Loan Documents, any and all other
indulgences whatsoever by
SECURED TERM
LOAN AGREEMENT 6
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Lender in respect of any of the Liabilities, and the taking, addition,
substitution or release, in whole or in part, at any time or times, of any
security for any of the Liabilities or the addition, substitution or release, in
whole or in part, of Borrower or Co-Borrower. Without limiting the generality of
the foregoing, Borrower and Co-Borrower assent to any other action or delay in
acting or failure to act on the part of Lender with respect to the failure by
Borrower or Co-Borrower to comply with any of its respective Liabilities,
including, without limitation, any failure strictly or diligently to assert any
right or to pursue any remedy or to comply fully with applicable laws or
regulations thereunder, which might, but for the provisions of this Section 2.4,
afford grounds for terminating, discharging or relieving Borrower and
Co-Borrower, in whole or in part, from any of its Liabilities under this Section
2.4, it being the intention of Borrower and Co-Borrower that, so long as any of
the Liabilities remain unsatisfied, the Liabilities under this Section 2.4 shall
not be discharged except by performance and then only to the extent of such
performance. The Liabilities under this Section 2.4 shall not be diminished or
rendered unenforceable by any winding up, reorganization, arrangement,
liquidation, re-construction or similar proceeding with respect to Borrower,
Co-Borrower or Lender. The joint and several liability of each of Borrower and
Co-Borrower hereunder shall continue in full force and effect notwithstanding
any absorption, merger, amalgamation or any other change whatsoever in the name,
membership, constitution or place of formation of Borrower, Co-Borrower or
Lender.
(e) The provisions of this Section 2.4 are made for the benefit of
Lender and its permitted successors and assigns, and may be enforced against
Borrower or Co-Borrower as often as occasion therefor may arise and without
requirement on the part of Lender first to marshal any claims or to exercise any
rights against either Borrower or Co-Borrower or to exhaust any remedies
available to it against either Borrower or Co-Borrower or to resort to any other
source or means of obtaining payment of any of the Liabilities hereunder or to
elect any other remedy. The provisions of this Section 2.4 shall remain in
effect until all of the Liabilities shall have been paid in full or otherwise
fully satisfied. If at any time, any payment, or any part thereof, made in
respect of any of the Liabilities, is rescinded or must otherwise be restored or
returned by Lender upon the insolvency, bankruptcy or reorganization of
Borrower, Co-Borrower or otherwise, the provisions of this Section 2.4 will
forthwith be reinstated in effect, as though such payment had not been made.
2.5. Base Rate Tranches/LIBOR Rate Tranches; Selection of Rate Trenches.
Borrower shall have the right, from time to time in accordance with this Section
2.5, to divide the principal amount of the Loan into Base Rate Tranches or LIBOR
Rate Tranches. Borrower shall exercise its rights under this Section 2.5(a) by
providing to Lender a Notice of Rate Tranche Selection substantially in the form
of EXHIBIT C attached hereto and made a part hereof not less than two (2)
Business Days prior to (i) the Closing Date, (ii) each Interest Rate
Determination Date for LIBOR Rate Tranches and (iii) any date on which Borrower
desires to have all or a portion of the principal of the Loan that is part of a
Base Rate Tranche to become a LIBOR Rate Tranche. Each Base Rate Tranche and
LIBOR Rate Tranche shall be in a minimum amount of One Million and 00/100
Dollars ($1,000,000.00) and in integral multiples of One Hundred Thousand and
00/100
SECURED TERM
LOAN AGREEMENT 7
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Dollars($100,000.00) in excess of that amount. Borrower and Co-Borrower agree
that at no time shall there be more than (a) three (3) Interest Periods
outstanding at any time for LIBOR Rate Tranches and (b) one (1) Interest Period
outstanding at any time for Base Rate Tranches. Borrower shall have the right to
continue and/or convert Base Rate Tranches and LIBOR Rate Tranches pursuant to
the procedures set forth in Section 2.7 of this Agreement.
2.6. Interest on the Loan and other Liabilities.
(a) Interest. The Loan and the outstanding principal balance of all
other Liabilities shall bear interest on the unpaid principal amount thereof
from the Closing Date and the date such other Liabilities are due and payable
until paid in full but excluding the date of repayment (whether by acceleration
or otherwise), at the interest rates specified as follows (the "Applicable
Rate"):
(i) in the case of a LIBOR Rate Tranche, at an interest rate
per annum equal to the LIBOR Rate for the Interest Period selected
by Borrower for such LIBOR Rate Tranche, plus the Applicable Margin;
and
(ii) in the case of a Base Rate Tranche or any other
Liabilities, at an interest rate per annum equal to the Base Rate in
effect from time to time, plus the Applicable Margin.
(b) Interest Payments. Interest accrued on the Loan shall be payable
in arrears (i) on each Interest Payment Date, (ii) upon the payment or
prepayment thereof in full or in part and (iii) if not previously paid in full
(whether by acceleration or otherwise), then on the Maturity Date.
(c) Late Charge; Default Interest. If any payment of principal or
interest on the Loan or any other Liabilities becoming due hereunder or under
any of the Loan Documents is not made within five (5) days of the date such
payment is due, Borrower and Co-Borrower shall be subject to a late charge of
five percent (5%) of the amount of such payment. Subsequent waivers during the
term of the Loan shall be at Lender's discretion. Upon the occurrence and during
the continuance of an Event of Default, Borrower and Co-Borrower shall pay
interest (to the extent permitted by law in the case of interest on overdue
interest) on such defaulted amount accruing from and including the date of such
Event of Default up to but excluding the date of actual payment (after as well
as before judgment) at a rate per annum which is the sum of (i) four percent
(4%) plus (ii) the highest Applicable Rate then applicable to any Base Rate
Tranche or LIBOR Rate Tranche. All payments due under this Section 2.6(c) shall
be payable upon demand.
SECURED TERM
LOAN AGREEMENT 8
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2.7. Duration and Determination of Interest Period; Determination of
Interest Rate; Continuation/Conversion of Tranches.
(a) Duration and Determination of Interest Period. Each Notice of
Rate Tranche Selection delivered pursuant to Section 2.5(a) of this Agreement
(with respect to a LIBOR Rate Tranche) and each Notice of
Continuation/Conversion delivered pursuant to Section 2.7(c)(ii) of this
Agreement (with respect to a conversion into or continuation of LIBOR Rate
Tranche) shall designate an Interest Period, provided, that no more than three
(3) Interest Periods shall be in effect at any one time for any LIBOR Rate
Tranches and one (1) Interest Period outstanding at any time for Base Rate
Tranches or any combination thereof.
(b) Determination of Interest Rate. As soon as practicable on the
second Business Day prior to the first day of each Interest Period in the case
of a LIBOR Rate Tranche (the "Interest Rate Determination Date"), Lender shall
determine (pursuant to the procedures set forth in the definition of LIBOR Base
in the case of a LIBOR Rate Tranche) the interest rate which shall apply to the
Base Rate Tranche or LIBOR Rate Tranche for which an interest rate is then being
determined for the applicable Interest Period and shall promptly give notice
thereof (in writing or by telephone confirmed in writing) to Borrower. Lender's
determination shall be presumed to be correct, absent manifest error, and shall
be binding upon Borrowers. Any failure by Lender to take into account any
reserve percentage when calculating interest due on LIBOR Rate Tranche shall not
constitute, whether by course of dealing or otherwise, waiver by Lender of its
right to collect such amount for any future period.
(c) Conversion/Continuation of Tranches.
(i) Subject to the provisions of Sections 2.14 and 2.15 of
this Agreement, Borrower shall have the option (A) to convert at any time all or
any part of outstanding Base Rate Tranches to LIBOR Rate Tranches, (B) to
convert all or any part of outstanding LIBOR Rate Tranches having Interest
Periods which expire on the same date to Base Rate Tranches on such expiration
date or (C) to continue all or any part of outstanding LIBOR Rate Tranches
having Interest Periods which expire on the same date as LIBOR Rate Tranches,
and the succeeding Interest Period of such continued LIBOR Rate Tranches shall
commence on such expiration date; provided, however, no such outstanding LIBOR
Rate Tranches may be continued as, or be converted into, a LIBOR Rate Tranche
(X) if the continuation of, or the conversion into, would violate any of the
provisions of Section 2.14 or 2.15 of this Agreement or (Y) if a Default or
Event of Default would occur as a result thereof or has occurred and is
continuing. Any conversion into or continuation of LIBOR Rate Tranches under
this Section 2.7(c) shall be in a minimum amount of One Million and 00/100
Dollars ($1,000,000.00) and in integral multiples of Fifty Thousand and 00/100
Dollars ($50,000.00) in excess of that amount.
SECURED TERM
LOAN AGREEMENT 9
15
(ii) To convert or continue a Base Rate Tranche or LIBOR Rate
Tranche, Borrower shall deliver a Notice of Continuation/Conversion
substantially in the form of EXHIBIT D attached hereto and made a part hereof to
Lender no later than 10:00 A.M. (Cleveland, Ohio time) at least three (3)
Business Days in advance of the proposed continuation/conversion date in the
case of a conversion to, or a continuation of, LIBOR Rate Tranches or at least
one (1) Business Day in advance of the proposed continuation/conversion date in
the case of a conversion to a Base Rate Tranche. A Notice of
Continuation/Conversion shall specify (A) the proposed continuation/conversion
date (which shall be a Business Day), (B) the principal amount of the Base Rate
Tranches and LIBOR Rate Tranches to be continued/converted, (C) whether such
Base Rate Tranche or LIBOR Rate Tranche shall be converted and/or continued (D)
in the case of a continuation of, or conversion to, a LIBOR Rate Tranche, the
requested Interest Period and (E) that no Default or Event of Default has
occurred and is continuing or would result from the proposed
continuation/conversion.
Except as otherwise provided in Sections 2.14 and 2.15, a Notice of Rate
Tranche Selection and a Notice of Continuation/Conversion shall be irrevocable
on and after the related Interest Rate Determination Date, and Borrower and
Co-Borrower shall be bound to effect a continuation and/or conversion (as
applicable) in accordance therewith.
If Borrower fails to give a valid Notice of Continuation/Conversion in
respect of any portion of a LIBOR Rate Tranche which is not repaid in accordance
with the terms hereof at the end of the relevant Interest Period, such portion
shall be converted automatically into a Base Rate Tranche; provided that if
Borrower subsequently gives a valid Notice of Continuation/Conversion in respect
of such Base Rate Tranche, it shall be converted into a LIBOR Rate Tranche in
accordance with the requirements for a continuation/conversion under this
Section 2.7.
2.8. Optional Prepayments; Mandatory Prepayments.
(a) Subject to Section 2.7(c) of this Agreement, Borrower may, at
its option, prepay any LIBOR Rate Tranche on (i) the last day of the applicable
Interest Period, in whole or in part, without premium or penalty or additional
cost or expense, or (ii) any other time subject to the indemnification
obligations contained in Section 2.16 of this Agreement; upon, in each case, at
least three (3) Business Days' prior written notice to Lender, specifying the
amount of prepayment. Base Rate Tranches may be prepaid without premium or
penalty or additional cost or expense at any time. Each notice of prepayment
pursuant to this clause (a) shall be irrevocable and the payment amount
specified in such notice shall be due and payable on the date specified,
together with accrued interest to such date on the Base Rate Tranches or LIBOR
Rate Tranches being prepaid and all amounts (if any) payable pursuant to Section
2.17 of this Agreement. Partial prepayments of the Base Rate Tranche or LIBOR
Rate Tranche being prepaid pursuant to this clause (a) shall be in an aggregate
principal amount of One Hundred Thousand and 00/100
SECURED TERM
LOAN AGREEMENT 10
16
Dollars ($100,000.00) or an integral multiple thereof (or such lesser amount as
fully repays the LIBOR Rate Tranche in question).
(b) The Loan shall be subject to certain mandatory repricing
pursuant to and upon the occurrence of the events described in the provisions of
Sections 2.14 and 2.15.
(c) Subject to the provisions of Section 2.10 of this Agreement,
Borrower may designate the application of any prepayments to be applied to
principal on the Loan to the LIBOR Rate Tranches or the Base Rate Tranche as it
may select, provided that if Borrower does not designate such application, such
prepayments shall be applied (i) first to the outstanding Base Rate Tranche, and
(ii) second to outstanding LIBOR Rate Tranches.
2.9. Computation of Interest and Fees. Interest, fees and other amounts
calculated on the basis of a rate per annum shall be computed on the basis of a
three hundred sixty (360)-day year for the actual number of days elapsed. In
computing interest on the outstanding principal balance of the Loan or any
Liabilities, the date of the making of the Loan or the first day of an Interest
Period or the date the Liabilities are incurred, as the case may be, shall be
included and the date of payment or the expiration date of an Interest Period,
as the case may be, shall be excluded.
2.10. Payments.
(a) Manner and Time of Payment. All payments of principal of and
interest on the Loan and other Liabilities (including, without limitation, fees
and expenses) which are payable to Lender shall be made without condition or
reservation of right, in immediately available funds, delivered to Lender not
later than 1:00 P.M. (Cleveland, Ohio time) on the date and at the place due, to
such account of Lender as it may designate, for the account of Lender, as the
case may be and funds received by Lender not later than 1:00 P.M. (Cleveland,
Ohio time) on any given Business Day shall be credited against payment to be
made that day, and, for purposes of calculation of interest, funds received by
Lender after that time shall be deemed to have been paid on the next succeeding
Business Day.
(b) Apportionment of Payments. (i) Subject to the provisions of
Section 2.10(b)(ii) of this Agreement, all payments and any other amounts
received by Lender from or for the benefit of Borrower or Co-Borrower shall be
applied in the following order:
(A) to pay all Liabilities then due and payable; and
(B) as Borrower so designates.
(ii) After the occurrence of an Event of Default and while the
same is continuing, Lender shall apply all payments in respect of any
Liabilities in the following order:
SECURED TERM
LOAN AGREEMENT 11
17
(A) first, to pay Liabilities in respect of any
reasonable fees, expense reimbursements or indemnities then
due to Lender;
(B) second, to pay interest due on the Loan;
(C) third, to the payment or prepayment of principal
outstanding on Loan; and
(D) fourth, to the ratable payment of all other
Liabilities.
(iii) Lender, in its sole discretion and subject only to the
terms of this Section 2.10(b)(iii), may pay from the proceeds of the Loan if
made pursuant to a deemed request as provided in this Section 2.10(b)(iii) all
amounts payable by Borrower or Co-Borrower hereunder, including, without
limitation, amounts payable with respect to payments of principal, interest and
fees and all reimbursements for expenses pursuant to Section 10.10 of this
Agreement, after the occurrence and during the continuance of an Event of
Default with respect to nonpayment of such amounts. Borrower and Co-Borrower
hereby irrevocably authorize Lender to disburse Loan proceeds upon notice from
Lender as described in the following sentence for the purpose of paying
principal, interest and fees due from Borrower or Co-Borrower, reimbursing
expenses pursuant to Section 10.10 of this Agreement and paying any and all
other amounts due and payable by Borrower or Co-Borrower hereunder, under the
Note or under any other Loan Document, from and after the occurrence and during
the continuance of an Event of Default with respect to nonpayment of such
amounts, and agrees that all such amounts so disbursed shall be deemed to be
part of the Loan as of the date of the aforementioned notice. Any disbursements
made under this Section 2.10(b)(iii) shall cure the Event of Default for which
such disbursements were advanced to the extent such Event of Default can be
cured by the payment of money and the making of such disbursements does not
create a Default or Event of Default.
(c) Payments on Non-Business Days. Whenever any payment to be made
by Borrower hereunder or under the Note is stated to be due on a day which is
not a Business Day, the payment shall instead be due on the next succeeding
Business Day (or, as set forth in Section 2.6(b) of this Agreement, the next
preceding Business Day), and any such extension of time shall be included in the
computation of the payment of interest and fees hereunder.
2.11. Use of Loan Proceeds. Except for any amounts advanced by Lender
under Section 2.10(b)(iii) of this Agreement, the proceeds of the Loan issued
for the account of Borrower hereunder shall be used to refinance certain
indebtedness of Borrower owed to Nations Financial Capital Corporation and
secured by, inter alia, the Borrower Real Properties, the acquisition by
Co-Borrower of the Co-Borrower Property and as a bridge loan for such
refinancing and acquisition.
SECURED TERM
LOAN AGREEMENT 12
18
2.12. Increased Costs.
(a) If any change in "existing law or future applicable law", which
expression, as used herein, includes statutes, rules and regulations thereunder
and interpretations thereof by any competent court or by any governmental or
other regulatory body or official charged with the administration or the
interpretation thereof and requests, directives, instructions and notices at any
time or from time to time hereafter made upon or otherwise issued to Lender by
any central bank or other fiscal, monetary or other authority (whether or not
having the force of law), shall:
(i) subject Lender to any tax, levy, impost, duty, charge,
fee, deduction or withholding of any nature with respect to this Agreement, the
Loan Documents or the Loan (other than Excluded Taxes); or
(ii) materially change the basis of taxation (except for
changes in taxes on income or profits) of payments to Lender of the principal of
or the interest on the Loan or any other amounts payable to Lender under this
Agreement or the other Loan Documents; or
(iii) impose or increase or render applicable (other than to
the extent specifically provided for elsewhere in this Agreement) any special
deposit, reserve, assessment, liquidity, capital adequacy or other similar
requirements (whether or not having the force of law) against assets held by, or
deposits in or for the account of, or loans by, or commitments of Lender; or
(iv) impose on any party any other conditions or requirements
with respect to this Agreement, the Loan Documents, the Loan or any class of
loans or commitments of which the Loan forms a part;
and the result of any of the events or occurrences described in (a)(i) through
(iv) above is:
(A) to increase the cost to Lender of making, funding,
issuing, renewing, extending or maintaining the Loan; or
(B) to reduce the amount of principal, interest or other
amount payable to Lender hereunder on account of the Loan; or
(C) to require Lender to make any payment or to forego
any interest or other sum payable hereunder, the amount of
which payment or foregone interest or other sum is calculated
by reference to the gross amount of any sum receivable or
deemed received by Lender from Borrower or Co-Borrower
hereunder;
SECURED TERM
LOAN AGREEMENT 13
19
then, and in each such case, Borrower or Co-Borrower will, within thirty (30)
days after written demand made by Lender at any time and from time to time and
as often as the occasion therefor may arise, pay to Lender, such additional
amounts as Lender shall determine in good faith will be sufficient to compensate
Lender for such additional cost, reduction, payment or foregone interest or
other sum. It is agreed that Lender shall make a reasonable allocation of such
additional costs, reductions, payments or foregone interest amounts or other
sums among the Loan made hereunder and loans to other customers affected
thereby; shall treat Borrower and Co-Borrower hereunder in a manner
substantially the same as its treatment of its other customers under other loan
facilities affected thereby and shall notify Borrower of any such event as soon
as reasonably possible after Lender's discovery thereof.
(b) If any change in existing law or future applicable law,
governmental rule, regulation, policy, guideline or directive (whether or not
having the force of law) or the interpretation thereof by a court or
governmental authority with appropriate jurisdiction affects the amount of
capital required or expected to be maintained by banks or bank holding companies
and as a result thereof Lender determines in good faith that the amount of
capital required to be maintained by it must be increased as a result of the
Loan, then Lender may notify Borrower of such fact as soon as reasonably
possible after the discovery thereof, and Borrower and Co-Borrower shall pay to
Lender from time to time within thirty (30) days after written demand, as an
additional fee payable hereunder, such amount as Lender shall determine in good
faith and certify in a notice to Borrower to be an amount that will adequately
compensate Lender in light of these circumstances for its increased costs of
maintaining such capital.
2.13. Change in Law Rendering LIBOR Rate Tranches Unlawful.
Notwithstanding anything to the contrary herein contained, in the event that any
Requirements of Law or any change in any existing Requirements of Law or in the
interpretation thereof by any Governmental Authority charged with the
administration thereof, in any case adopted, issued or effective after the date
hereof, shall make it unlawful for Lender to fund any portion of the LIBOR Rate
Tranches or to give effect to its obligations as contemplated hereby with
respect to its making LIBOR Rate Tranches, Lender shall, upon the happening of
such event, notify Borrower thereof in writing stating the reason therefor and
the effective date of such event, and upon the effectiveness of any such event
the obligation of Lender to make or maintain its LIBOR Rate Tranches to Borrower
and Co-Borrower shall forthwith be suspended for the duration of such illegality
and during such illegality Lender shall, upon payment of any amounts owing under
Section 2.16 of this Agreement with respect to such conversion, convert its
share of the LIBOR Rate Tranches to (upon effectiveness of any such event and
during the continuance of such event) Base Rate Tranches. If and when such
illegality with respect thereto ceases to exist, such suspension shall cease and
Lender shall notify Borrower that the Base Rate Tranche into which such share of
the LIBOR Rate Tranches was converted pursuant to this Section 2.13 was
converted to a LIBOR Rate Tranche, respectively, on the first day of the next
succeeding Interest Period.
SECURED TERM
LOAN AGREEMENT 14
20
2.14. LIBOR Availability. In the event, and on each occasion, that on the
Business Day two (2) Business Days prior to the commencement of any Interest
Period for the LIBOR Rate Tranches, Lender shall have determined in good faith
(which determination shall, in the absence of manifest error, be conclusive and
binding upon Borrower) that U.S. Dollar deposits in the amount of the principal
amount of the LIBOR Rate Tranches which is to have such Interest Period are not
generally available in the London interbank market, or that the rate at which
such U.S. Dollar deposits are being offered will not accurately reflect the cost
to Lender making or funding such principal amount of such LIBOR Rate Tranches
during such Interest Period, or that reasonable means do not exist for
ascertaining the LIBOR Rate, Lender shall, as soon as practicable thereafter,
give written or telephonic notice of such determination to Borrower and (i) such
principal amount of such LIBOR Rate Tranches shall automatically be converted,
as of the last day of the Interest Period during which such determination is
made, to Base Rate Tranches and (ii) any request by Borrower for such LIBOR Rate
Tranches pursuant to Section 2.5 of this Agreement shall thereupon, and until
the circumstances giving rise to such notice no longer exist (as notified by
Lender to Borrower) be deemed a request for the making of Base Rate Tranches. If
at any time Lender shall have determined in good faith (which determination
shall, in the absence of manifest error, be conclusive and binding upon
Borrower) that any contingency has occurred which adversely affects the London
interbank market or that any Requirement of Law or any change in any existing
Requirement of Law or in the interpretation thereof, in any case adopted, issued
or effective after the date hereof, or other circumstance affecting Lender or
the London interbank market makes the funding of the LIBOR Rate Tranches
impracticable, Lender shall, as soon as practicable thereafter, give written or
telephonic notice of such determination to Borrower and (i) the LIBOR Rate
Tranches shall automatically be converted, as of the last day of each Interest
Period during which such determination is made and in each case in respect of
the principal amount of the LIBOR Rate Tranches having an Interest Period ending
on such date, to Base Rate Tranche and (ii) any request by Borrower for the
LIBOR Rate Tranches pursuant to Section 2.5 of this Agreement shall thereupon,
and until the circumstances giving rise to such notice no longer exist (as
notified by Lender to Borrower), be deemed a request for the making of Base Rate
Tranches. Upon such circumstances no longer existing, Borrower may thereafter
request LIBOR Rate Tranches in accordance with the terms hereof.
2.15. Base Rate Price Adjustment. Borrower acknowledges that prepayment or
acceleration of an LIBOR Rate Tranche during an Interest Period will result in
Lender incurring additional costs, expenses and/or liabilities and that it is
extremely difficult and impractical to ascertain the extent of such costs,
expenses and/or liabilities. (For all purposes of this Section 2.15, any Loan
not being made as an LIBOR Rate Tranche in accordance with the Notice of
Borrowing therefor, as a result of Borrower's cancellation thereof or failure to
satisfy the conditions precedent thereto, shall be treated as if such LIBOR Rate
Tranche had been prepaid.) Therefore, on the date an LIBOR Rate Tranche is
prepaid or the date all sums payable hereunder become due and payable, by
acceleration or otherwise (a "Price Adjustment Date"), Borrower will pay to
Lender, (in addition to all other sums then owing), an amount (the "Base Rate
Price Adjustment") equal to the then present value of (i) the amount of interest
that would have
SECURED TERM
LOAN AGREEMENT 15
21
accrued on the LIBOR Rate Tranche for the remainder of the Interest Period at
the rate applicable to such LIBOR Rate Tranche, less (ii) the amount of interest
that would accrue on the same LIBOR Rate Tranche for the same period if the
LIBOR Rate were set on the Price Adjustment Date. The present value shall be
calculated by using as a discount rate the LIBOR Rate quoted on the Price
Adjustment Date. Upon the written notice to Borrower from Lender, Borrower shall
immediately pay to Lender, the Base Rate Price Adjustment as calculated by
Lender. Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of error, be conclusive and binding on Borrower.
(b) Borrower understands, agrees and acknowledges the following: (i)
Lender has no obligation to purchase, sell and/or match funds in connection with
the use of the LIBOR Rate as a basis for calculating the rate of interest on a
LIBOR Loan or a Base Rate Price Adjustment; (ii) the LIBOR Rate is used merely
as a reference in determining such rate and/or Base Rate Price Adjustment; and
(iii) Borrower has accepted the LIBOR Rate as a reasonable and fair basis for
calculating such rate and a Base Rate Price Adjustment. Borrower further agrees
to pay the Base Rate Price Adjustment and Lender's federal, state and local net
income and gross receipts taxes, if any, whether or not Lender elects to
purchase, sell and/or match funds.
2.16. Indemnities. Borrower and Co-Borrower hereby jointly and severally
agree to indemnify Lender on demand against any actual loss or expense
(including but not limited to any loss or expense sustained or incurred in
liquidating or employing or redeploying deposits from third parties acquired to
effect or maintain the Loan or any portion thereof other than loss of profit or
margin) and reasonable administrative costs which any Lender or its branch or
Affiliate may sustain or incur as a consequence of (a) any default in payment or
prepayment of the principal amount of the Loan or any portion thereof or
interest accrued thereon, as and when due and payable (at the due date thereof,
by irrevocable notice of payment or prepayment, or otherwise), (b) the effect of
the occurrence of any Event of Default upon the Loan, (c) the payment or
prepayment of any principal amount of the Loan or the conversion of any portion
of any LIBOR Rate Tranche to Base Rate Tranches on any day other than the last
day of an Interest Period or the payment of any interest on such Tranche, or
portion thereof, on a day other than an Interest Payment Date for the Loan or
(d) any failure of Borrower to accept or make a Borrowing of the Loan or
continue or convert a Loan after delivery of a Notice of Borrowing or, as the
case may be, a notice requesting a continuation or conversion under Section
2.7(c) of this Agreement or any failure by Borrower to satisfy any of the
conditions precedent to the making of the Loan hereunder after it has requested
the borrowing thereof (other than any such conditions that are waived in
accordance with the provisions hereof). The determination of Lender of any
amount payable under this Section 2.16 shall, in the absence of manifest error,
be conclusive and binding upon Borrower.
SECURE TERM
LOAN AGREEMENT 16
22
2.17. Fees.
(a) Commitment Fee. Borrowers agree to pay to Lender on the Closing
Date a commitment fee (the "Commitment Fee") equal to One Hundred Eighty-One
Thousand Eight Hundred Seventy-five and 00/100 Dollars ($181,875.00).
(b) Extension Fee. Upon delivery of the Extension Request, as
provided in Section 2.1(c) of this Agreement, Borrowers agree to pay Lender an
extension fee equal to .75% of the outstanding principal balance of the Loan at
the time of delivery of the Extension Request.
(c) Calculation and Payment of Fees. All fees shall be payable to
Lender in immediately available funds and shall be fully earned and
nonrefundable when paid. All fees specified or referred to in this Agreement due
to Lender, including, without limitation, those referred to in this Section
2.17, shall bear interest at the interest rate specified in Section 2.6(c) of
this Agreement upon the occurrence and during the continuance of an Event of
Default with respect to the nonpayment thereof and shall constitute Liabilities.
2.18. Usury. If the rate of interest payable by Borrowers under this
Agreement, the Note or the other Loan Documents shall be or become usurious or
otherwise unlawful under laws applicable thereto, the interest rate shall be
reduced to the maximum lawful rate and any amount paid by Borrowers in excess of
the maximum lawful rate shall be considered a payment in reduction of principal
or, at the sole election of Lender, shall be returned to the payor.
SECTION 3. [INTENTIONALLY OMITTED]
SECTION 4. REPRESENTATIONS AND WARRANTIES
In order to induce Lender to enter into this Agreement and to make the
Loan herein provided for, Borrower and Co-Borrower hereby covenant, represent
and warrant to Lender that:
4.1. Financial Condition. The consolidated balance sheet of Borrower as of
December 31, 1999 and the related statements of income, stockholders' equity and
cash flows for the fiscal year ended on such dates, certified by KPMG Peat
Marwick, copies of which have heretofore been furnished to Lender, are complete
and correct and present fairly the financial condition and performance of
Borrower as at such dates and fiscal periods. All such financial statements,
including the related schedules and notes thereto, have been prepared in
accordance with GAAP applied consistently throughout the periods involved
(except as approved by such accountants or Responsible Officer, as the case may
be, and as disclosed therein). Borrower does not have any material Contingent
Obligation, contingent liabilities or liability for taxes, long-term leases or
unusual forward or long-term commitments, which is not reflected in the
foregoing statements or in the notes thereto.
SECURE TERM
LOAN AGREEMENT 17
23
4.2. No Material Adverse Effect. Since the date of the most recent
financial statements delivered to Lender there has been no Material Adverse
Effect, and no event has occurred and no condition exists which could reasonably
be expected to have a Material Adverse Effect on Borrower or Co-Borrower
4.3. Existence; Borrower's, Co-Borrower's and General Partner's Compliance
with Law. Borrower is a limited partnership validly existing and in good
standing under the laws of the State of Delaware. Co-Borrower is a duly
organized limited liability company and validly existing under the laws of the
State of Delaware. General Partner is a limited partnership validly existing and
in good standing under the laws of the State of Delaware. Each of Borrower,
Co-Borrower and General Partner (a) has full power and authority and the legal
right to own and lease its property and to conduct the business in which it is
currently engaged, (b) is duly qualified or licensed and is in good standing
under the laws of each jurisdiction where its ownership or lease of property or
the conduct of its business require such qualification and (c) is in compliance
with all Requirements of Law, except to the extent that the failure to comply
therewith is not reasonably likely to have a Material Adverse Effect on it.
4.4. Power; Authorization; Enforceable Liabilities. Each of Borrower,
Co-Borrower and General Partner has the power and authority and the legal right
to execute, deliver and perform each of the Loan Documents to which it is a
party (or is executing) and to borrow hereunder and has taken all necessary
action to authorize the Loan hereunder on the terms and conditions of the Loan
Documents and to authorize the execution, delivery and performance of each of
the Loan Documents to which it is a party (or is executing). No consent or
authorization of, filing with, or other act by or in respect of any Governmental
Authority is required to be made or obtained by Borrower, Co-Borrower or General
Partner in connection with the Loan hereunder or with the execution, delivery,
performance, validity or enforceability of the Loan Documents. The Agreement has
been, and each Loan Document will be, duly executed and delivered on behalf of
Borrower and Co-Borrower, and this Agreement constitutes, and each other Loan
Document when executed and delivered will constitute, a legal, valid and binding
obligation of Borrower and Co-Borrower enforceable against it in accordance with
its terms subject to the effect of bankruptcy, reorganization, insolvency and
similar laws and general principles of equity.
4.5. No Legal Bar. The execution, delivery and performance of this
Agreement and the other Loan Documents will not violate any Requirement of Law
or any Contractual Obligation of Borrower, Co-Borrower or General Partner and
will not result in, or require, the creation or imposition of any Lien on any of
its properties or revenues pursuant to any Requirement of Law or Contractual
Obligation other than the Liens for the benefit of Lender expressly contemplated
by this Agreement and the other Loan Documents.
4.6. No Material Litigation. Neither the Borrower nor Co-Borrower is in
violation of any applicable law, which violation has a Material Adverse Effect
on the Borrower, Co-Borrower
SECURED TERM
LOAN AGREEMENT 18
24
or any of the Real Properties, or subject to or in default with respect to any
court order which has a Material Adverse Effect on the Borrower, Co-Borrower or
any of the Real Properties. No litigation, investigation or proceeding of or
before any arbitrator or Governmental Authority is pending or, to the best
knowledge and belief of Borrower, Co-Borrower or General Partner, threatened
against Borrower, Co-Borrower or General Partner or against any of their
properties or revenues (a) with respect to this Agreement or the other Loan
Documents, or any of the transactions contemplated hereby or (b) relating to the
ownership or the operation of any of Borrower's or Co-Borrower's properties or
the conduct of business thereon as presently conducted, which, in the case of
(a) or (b), is reasonably likely to have a Material Adverse Effect.
4.7. No Default. No Default or Event of Default has occurred and is
continuing.
4.8. Taxes. Each of Borrower, Co-Borrower and General Partner has filed or
caused to be filed all tax returns which to its best knowledge and belief are
required to be filed, and has paid or caused to be paid all taxes shown to be
due and payable on said returns or on any assessments made against it or any of
its property and all other taxes, fees or other charges imposed on it or any of
its property by any Governmental Authority (other than those the amount or
validity of which is currently being contested in good faith by appropriate
proceedings and with respect to which reserves in conformity with GAAP have been
provided on the books of each).
4.9. Federal Regulations. Neither Borrower, Co-Borrower nor General
Partner is engaged and will not engage, principally or as one of its important
activities, in the business of extending credit for the purpose of "purchasing"
or "carrying" any "margin stock"' within the respective meanings of each of the
quoted terms under Regulation U of the Board of Governors of the Federal Reserve
System as now and from time to time hereafter in effect. No part of the proceeds
of the Loan hereunder will be used for "purchasing" or "carrying" "margin stock"
as so defined or for any purpose which violates, or which would be inconsistent
with, the provisions of the Regulations of such Board of Governors. If requested
by Lender, Borrower, Co-Borrower and General Partner will furnish to Lender a
statement in conformity with the requirements of Federal Reserve Form U-1
referred to in said Regulation U to the foregoing effect.
4.10. ERISA. Neither Borrower, Co-Borrower, General Partner nor any ERISA
Affiliate of the Borrower maintains or contributes to any Plan or Multiemployer
Plan.
4.11. Investment Company Act. Neither Borrower, Co-Borrower nor General
Partner is an "investment company" or a company "controlled" by an "investment
company," within the meaning of the Investment Company Act of 1940, as amended.
SECURED TERM
LOAN AGREEMENT 19
25
4.12. Subsidiaries; Ownership of Capital Stock and Partnership Interests.
(a) EXHIBIT E attached hereto and made a part hereof (i) contains a
diagram indicating the corporate structure of Borrower, Co-Borrower, General
Partner, and any Person (other than each limited partner in Borrower holding
five percent (5%) or less of the partnership interests) holding a direct or
indirect membership or other interest in Borrower, Co-Borrower or General
Partner, indicating the percentage and nature of such interest with respect to
each Person included in such diagram and (ii) accurately sets forth the correct
legal name of such Person, the jurisdiction of its incorporation or organization
and the jurisdictions in which it is qualified to transact business as a foreign
corporation, or otherwise. Except as shown on EXHIBIT E, neither Borrower,
Co-Borrower or General Partner currently holds, and shall not purchase or
otherwise acquire or hold any direct or indirect partnership, joint venture or
other equity interest in any Person.
(b) Except for Permitted Indebtedness, neither Borrower nor
Co-Borrower has Indebtedness other than the Liabilities. Borrower shall keep and
maintain its books and records separate from those of any Affiliate.
4.14. Partnership Agreement, Operating Agreement, Etc. The organizational
documents of Borrower, Co-Borrower and General Partner which have been furnished
to Lender are true, correct and complete copies thereof as in effect on the date
of this Agreement and will be true, correct and complete in the case of
Borrower, Co-Borrower and General Partner when submitted to Lender under Section
5.2 of this Agreement.
4.15. Disclosures. The financial statements referred to in Section 4.1 of
this Agreement do not, nor does this Agreement, the other Loan Documents, or any
other written statement furnished by or on behalf of Borrower to Lender in
connection with the transactions contemplated hereby or thereby, contain any
untrue statement of a material fact or omit a material fact necessary to make
the statement contained therein or herein not misleading.
4.16. Real Properties.
(a) Each of Borrower and Co-Borrower has good, record, marketable
and indefeasible Fee Interest in each Real Property that it owns, and it
directly owns one hundred percent (100%) of each such Real Property, in each
case free and clear of all Liens and other matters affecting title except for
Permitted Exceptions and Customary Permitted Liens, and such other matters not
reasonably likely to have, in the aggregate, a Material Adverse Effect. Each
Real Property is a single tenant property under a Lease. No Real Property is
located in a Special Flood Hazard Area as defined by the National Flood
Insurance Program authorized by the National Flood Insurance Act, 42 U.S.C.
Section 4001, et seq., as amended.
SECURED TERM
LOAN AGREEMENT 20
26
(b) The Buildings located on each Real Property are in good
operating condition and repair, free of any material structural or engineering
defects known to Borrower or Co-Borrower on the date hereof and are suitable for
their present uses, subject to such exceptions which are not reasonably likely
to have, in the aggregate, a Material Adverse Effect.
(c) All water, sewer, gas, electricity, telephone and other
utilities serving each Real Property are supplied directly to such Real Property
by public utilities and enter such Real Property through adjoining public
streets or, if they pass through adjoining private land, do so in accordance
with valid public easements which inure to Borrower`s and Co-Borrower's benefit
subject to such exceptions which are not reasonably likely to have, in the
aggregate, a Material Adverse Effect. All of such utilities are presently
installed and operating and are in good and safe condition, subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect. All material assessments for public improvements that have been
made against the Real Properties have been paid or provided for, except that in
the case of any assessments that are payable in installments, all installments
due as of the date hereof have been paid or provided for, subject to such
exceptions which are not reasonably likely to have, in the aggregate, a Material
Adverse Effect.
(d) Neither Borrower nor Co-Borrower has received notice of any
pending, threatened or contemplated condemnation proceeding or similar taking
affecting any of the Real Properties, or any portion thereof, or any sale or
other disposition of any of the Real Properties or any portion thereof in lieu
of condemnation or similar taking, in each case, subject to such exceptions
which are not reasonably likely to have, in the aggregate, a Material Adverse
Effect.
(e) To Borrower's knowledge, all Permits from all Governmental
Authorities having jurisdiction over any Real Property or any portion thereof,
the absence of which could materially impair the use of any Real Property for
the purposes for which it is currently used have been issued and are in full
force and effect, subject to such exceptions which are not reasonably likely to
have, in the aggregate, a Material Adverse Effect. Neither Borrower nor
Co-Borrower has received or been informed by a third party, of the receipt by it
of any notice from any Governmental Authority having jurisdiction over any of
the Real Properties or any portion thereof or from any insurance company or fire
rating or similar board or organization threatening a suspension, revocation,
modification or cancellation of any Permit, subject to such exceptions which are
not reasonably likely to have, in the aggregate, a Material Adverse Effect.
(f) A true, correct and complete copy of each Lease is identified on
EXHIBIT F attached hereto and made a part hereof and has been delivered to
Lender. The Leases constitute the sole and complete agreements and
understandings relating to leasing or licensing of space in the Buildings or the
land at such Real Properties. There are no occupancies, rights, privileges or
licenses in or to the Buildings or any other part of the Real Properties between
Borrower or Co-Borrower and any third party other than pursuant to the Leases,
or pursuant to Permitted Exceptions. Except as set forth in EXHIBIT F, the
Leases are in full force and effect, in
SECURED TERM
LOAN AGREEMENT 21
27
accordance with their respective terms, without any payment default or any other
material default thereunder beyond applicable grace periods, nor to the best of
Borrower's and Co-Borrower's knowledge are there any defenses, counterclaims,
offsets, concessions or rebates available to any tenant thereunder except as may
be provided in the Leases, and the landlord has not given or made, or received,
any notice of default, or any claim, which remains uncured or unsatisfied, with
respect to any of the Leases and, to the best of Borrower's and Co-Borrower's
knowledge there is no basis for any such claim or notice of default by any
tenant which would have a Material Adverse Effect. No tenant has paid more than
one (1) month's rent in advance except for any security deposits. Except as set
forth on EXHIBIT F, all tenants under all Leases are in occupancy and operating
the premises covered by Leases within the permitted uses under such Leases.
Neither Borrower nor Co-Borrower has mortgaged, pledged or otherwise encumbered
any of the Leases except for Permitted Exceptions or Customary Permitted Liens.
To Borrower's knowledge, other than the tenant of the Missouri Property, no
tenant nor such tenant's parent under the Lease of any Real Property has
voluntarily or involuntarily petitioned for relief, or had an order of relief
entered against it, under any bankruptcy, insolvency or other similar law now or
hereafter in effect. As to the Missouri Property, the tenant in bankruptcy is in
possession of such Real Property, is current in the payment of all rent payable
under its Lease and has not rejected such Lease. At least two (2) of the
Mortgaged Properties has a Lease with a Credit Tenant.
(g) Surveys. There have not been any encumbrances, encroachments or
other survey matters materially and adversely affecting any Property after the
date of the most recent Survey of such Real Property furnished to Lender that
would result in a change to such Survey which have not been disclosed in writing
by Borrower to Lender.
(h) Access; Etc. The streets abutting each Real Property are public
roads, to which the Real Property has direct access by trucks and other motor
vehicles and by foot, or are private ways (with direct access by trucks and
other motor vehicles and by foot to public roads) to which the Real Property has
direct access without charge or liability for maintenance or repair except as
required in connection with the payment of association or owner's fees pursuant
to recorded instruments. No easements over land of others are required for such
means of access and egress except as disclosed in the Title Commitment or the
Survey for such Real Property furnished to Lender.
(i) Independent Buildings. The Buildings are fully independent in
all respects from any other buildings or improvements not located on the Real
Property, including, without limitation, in respect of structural integrity,
heating, ventilating and air conditioning, plumbing, mechanical and other
operating and mechanical systems, all of which are connected directly to
off-site utilities located in recorded easements or public streets or ways. The
Buildings are located on lots which are separately assessed for purposes of real
estate tax assessment and payment. The Buildings, all Building Service Equipment
and all paved or landscaped areas related to or used in connection with the
Buildings are located wholly within the perimeter lines
SECURED TERM
LOAN AGREEMENT 22
28
of the lot or lots on which the Real Properties are located except any real
property covered by any easement benefitting the Real Property or as disclosed
in the Surveys.
(j) Building Compliance with Law; Permits. To Borrower's knowledge,
the Buildings as presently constructed and used do not materially violate any
applicable federal or state law or governmental regulation, or any local
ordinance, order or regulation, including but not limited to laws, regulations,
or ordinances relating to zoning, building use and occupancy, subdivision
control, fire protection, health and sanitation; zoning laws permit use of the
Buildings for their current use; there is a sufficient number of parking spaces
on the lot or lots on which the Real Property is located or on any real property
covered by any easement benefitting such Real Property or to permit the
Buildings to be used under the zoning laws for their current use; and all
private ways providing access to such Real Property are zoned in a manner which
will permit access to the Buildings over such ways by trucks and other
commercial and industrial vehicles. To Borrower's knowledge, all permits
(collectively, the "Permits") required for the operation and maintenance of the
Real Property, including without limitation, building permits, curb-cut permits,
water connection permits, sewer extension or connection permits and other
permits (if any) required under the Federal Clean Air Act, as amended, the
Federal Clean Water Act, as amended (including, without limitation a so-called
"404 Permit"), and by state law or regulations consistent with the requirements
of said Acts, have been validly issued by the appropriate Governmental Authority
and are now in full force and effect.
(k) No Required Real Property Consents, Permits, Etc. To Borrower's
knowledge, no Permits, utility installations and connections (including, without
limitation, drainage facilities, curb cuts and street openings), or private
consents are required for the maintenance, operation, servicing and use of such
Real Property for its current use which have not been granted, effected, or
performed and completed (as the case may be) or any fees or charges therefor
which have not been fully paid.
(l) Suits; Judgments. To Borrower's knowledge, there are no
outstanding notices, suits, orders, decrees or judgments relating to zoning,
building use and occupancy, subdivision control, fire protection, health,
sanitation, or other violations affecting, against, or with respect to, such
Real Property or any part thereof.
(m) Insurance. Neither Borrower nor Co-Borrower has received any
notices from any insurer or its agent requiring performance of any work with
respect to such Real Property.
(n) Real Property Taxes; Special Assessments. There are no unpaid or
outstanding real estate or other taxes or assessments on or against such Real
Property or any part thereof (except only real estate taxes not yet due and
payable). There are no betterment assessments or other special assessments
presently pending with respect to any portion of such
SECURED TERM
LOAN AGREEMENT 23
29
Real Property and neither Borrower nor Co-Borrower has received any notice of
any such special assessment being contemplated.
(o) Historic Status. No Building is a historic structure or
landmark, and no Real Property is within any historic district pursuant to any
federal, state or local law or governmental regulations.
(p) Compliance with Environmental Laws.
(i) Except as specifically set forth in the environmental
reports delivered to Lender and listed on EXHIBIT G attached hereto
and made a part hereof (the "Existing Environmental Reports"), to
Borrower's knowledge, each tenant is in compliance with all
applicable statutes, laws, rules, regulations and orders of all
Governmental Authorities relating to environmental protection,
pollution control and Hazardous Materials and with respect to the
conduct of its business and the ownership of its properties, except
for such noncompliance which would not result in imposition of
Liens, fines, penalties, injunctive relief or other civil or
criminal liabilities or which, in the aggregate, could not have a
MAC.
(ii) Except as set forth in the Existing Environmental
Reports, to Borrower's knowledge, each Real Property and Borrower
and Co-Borrower are in compliance with all Environmental Laws. To
Borrower's knowledge, all required governmental permits and licenses
required by Environmental Laws are in effect, and Borrower,
Co-Borrower and each Real Property is in compliance therewith.
Neither Borrower nor Co-Borrower has received any notice of any
Environmental Action respecting any Real Property or any off-site
facility to which any notice has been sent regarding any Hazardous
Material for off-site treatment, recycling, reclamation, reuse,
handling, storage or disposal.
(iii) To Borrower's knowledge, no use, exposure, release,
generation, manufacture, storage, treatment, transportation or
disposal of Hazardous Material is occurring on or from any Real
Property. All Hazardous Material used, treated, stored, transported
to or from, generated or handled on each Real Property, has been
disposed of on or off such Real Property in a lawful manner. No
environmental, public health or safety hazards currently exist with
respect to any Real Property. No underground storage tanks
(including petroleum storage tanks) are present on or under any Real
Property except as set forth in the Existing Environmental Reports.
SECURED TERM
LOAN AGREEMENT 24
30
(iv) There are no pending or threatened, and there have been
no past, Environmental Actions to which Borrower and Co-Borrower is
a party or, to Borrower's knowledge, which relate to any Real
Property.
(v) No part of any Real Property is located or contained in
"waters of the United States", as defined in 33 CFR 328, and neither
Borrower nor Co-Borrower will discharge dredged or fill material
into waters of the United States as such activity is described and
regulated by Section 404 of the Clean Water Act, 33 U.S.C. 1344.
(q) Pollution; Hazardous Materials. In connection with the
acquisition and ownership of its interests in such Real Property, each of
Borrower and Co-Borrower has made and will continue to make such inquiries, and
has and will continue to cause such testing, surveying, inspection or other
action, with respect to such Real Property as is necessary or desirable in
connection with Hazardous Materials which might be present in the air, soil,
surface water or groundwater at such Real Property. Except as set forth in the
Existing Environmental Reports, to Borrower's knowledge, there are no Hazardous
Materials present in the air, soil, surface water or groundwater at any Real
Property and no Hazardous Materials (except (i) Hazardous Materials maintained
in accordance with all Requirements of Law and necessary for the business
operations of any such Real Property, including, without limitation, petroleum
used for heating oil and (ii) Hazardous Materials that are not reasonably likely
to result in a MAC in respect of such Real Property or to have a material
adverse effect on the value of such Real Property as security for the Loan) are
used in the operation of such Real Property.
4.17 Brokers' Fees. Neither Borrower nor Co-Borrower has dealt with any
broker or finder with respect to the transactions contemplated by the Loan
Documents or otherwise in connection with this Agreement, and neither Borrower
nor Co-Borrower has done any acts, had any negotiations or conversation, or made
any agreements or promises which will in any way create or give rise to any
obligation or liability for the payment by the Borrower or Co-Borrower of any
brokerage fee, charge, commission or other compensation to any party with
respect to the transactions contemplated by the Loan Documents, other than the
fees payable hereunder.
4.18 Security Interests and Liens. The Mortgages create, as security for
the Liabilities, valid and enforceable security interests in and Liens on all of
the Mortgaged Properties in favor of the Lender, and subject to no other Liens
(except Permitted Exceptions and Customary Permitted Liens), except as
enforceability may be limited by applicable insolvency, bankruptcy or other laws
affecting creditors' rights generally, or general principles of equity, whether
such enforceability is considered in a proceeding in equity or at law. Such
security interests in and Liens on the Mortgaged Properties shall be superior to
and prior to the rights of all third parties in the Mortgaged Properties, and,
other than in connection with any future change in Borrower's or Co-Borrower's
name or the location of Borrower's or Co-Borrower's chief executive office, no
SECURED TERM
LOAN AGREEMENT 25
31
further recordings or filings are or will be required in connection with the
creation, perfection or enforcement of such security interests and Liens, other
than the filing of continuation statements in accordance with applicable law.
4.19 Disregarded Entity Status. Co-Borrower has filed Form 8832 with the
Internal Revenue Service electing disregarded entity status for federal tax
purposes. For federal tax purposes, Co-Borrower is disregarded as an entity
separate and apart from Borrower. Borrower's federal taxpayer identification
number is also the federal taxpayer identification number used by Co-Borrower.
SECTION 5. CONDITIONS PRECEDENT; REAL PROPERTIES; MORTGAGED PROPERTIES;
RELEASES.
5.1. Conditions to Loan. The obligation of Lender to make the Loan
hereunder on the Closing Date is subject to the satisfaction of the following
conditions precedent. All submissions must be in form and substance satisfactory
to Lender and its counsel.
(a) Note; Loan Documents. On or before the Closing Date, Lender
shall have received a Note executed by a Responsible Officer of Borrower and
Co-Borrower and each of the other Loan Documents shall have been duly executed
and delivered by the respective parties thereto and all shall be in full force
and effect;
(b) Representations and Warranties. The representations and
warranties made by Borrower and Co-Borrower herein or in the other Loan
Documents or which are contained in any certificate, document or financial or
other statement furnished at any time under or in connection with any of the
Loan Documents, shall be true, correct and accurate on and as of the Closing
Date as if made on and as of such date unless stated to relate to a specific
earlier date, in which case such representations and warranties shall have been
true, correct and complete in all material respects as of such earlier dates;
(c) No Default or Event of Default. No Default or Event of Default
shall have occurred and be continuing on the Closing Date;
(d) Legal Opinion. Lender shall have received a favorable opinion of
counsel to Borrower, Co-Borrower and General Partner, addressed to Lender as of
the Closing Date and covering such other matters as are customarily required by
Lender in similar transactions other than the enforceability of the Loan
Documents, all in form and substance reasonably satisfactory to Lender.
SECURED TERM
LOAN AGREEMENT 26
32
(e) Organizational Documents; Resolutions; Incumbency Certificate;
Authorized Signers. Lender shall have received certified copies of (i) the
partnership agreement, operating agreement and other organizational documents of
each of Borrower, Co-Borrower and General Partner (as appropriate), and (ii) a
certificate of members or partnership action of each of Borrower, Co-Borrower
and General Partner authorizing the transactions described herein and evidencing
the due authorization, execution and delivery of and this Agreement and the
other Loan Documents and (iii) all required approvals, if any, of Governmental
Authorities with respect to this Agreement and the other Loan Documents. Lender
shall have received from Borrower, Co-Borrower and General Partner an
incumbency, member or partnership certificate, as the case may be, dated as of
the Closing Date, signed by a duly authorized offer of such Person and giving
the name of each individual who shall be authorized: (A) to sign, in the name
and on behalf of such Person, each of the Loan Documents to which such person is
or is to become a party; and (B) to give notices to take other action on behalf
of Borrower under the Loan Documents.
(f) Certifications from Government Officials; UCC Searches. Lender
shall have received (i) certifications from government officials evidencing the
legal existence and good standing of Borrower, Co-Borrower and General Partner
in its state of organization along with a certified copy of the certificate of
limited liability company or limited partnership of Borrower and Co-Borrower and
as of the most recent practicable date; and (ii) UCC Searches from the
appropriate jurisdictions for Borrower, Co-Borrower and General Partner;
provided, however, that if any of such items have not yet been delivered by the
government officials, Borrower shall provide on the Closing Date a certificate
certifying same has been requested and shall provide all such items to Lender
not later than thirty (30) days after the Closing Date.
(g) Financial Statements. Lender shall have received the financial
statements referred to in Sections 6.1(a) and (b) of this Agreement.
(h) Certificates of Insurance. Lender shall have received (i)
current certificates of insurance as to all of the insurance maintained by
Borrower and Co-Borrower on the Real Properties from the insurer or an
independent insurance broker, identifying insurers, types of insurance,
insurance limits, and policy terms; and (ii) such further information and
certificates from Borrower and Co-Borrower, their insurers and insurance brokers
as Lender may reasonably request;
(i) No Material Adverse Effect. No Material Adverse Effect shall
have occurred.
(j) Solvency of the Borrower, Co-Borrower and General Partner. Both
after and immediately before the making of the Loan, Borrower, Co-Borrower and
General Partner shall be Solvent, and in evidence thereof, each shall deliver a
Solvency Certificate in the form attached to this Agreement as EXHIBIT H and
incorporated herein;
SECURED TERM
LOAN AGREEMENT 27
33
(k) Fees. All obligations of Borrower and Co-Borrower to pay fees
and provide compensation and reimbursement of costs and expenses to Lender as of
the Closing Date hereunder or otherwise in connection with the financing
contemplated hereby shall have been satisfied; and
(l) Legality of Loans. The making of the Loan hereunder by Lender
shall be permitted as of the Closing Date by all applicable Requirements of Law
and shall not subject Lender to any penalty or other onerous condition in or
pursuant to any such Requirement of Law or result in a Material Adverse Effect.
(m) Performance. Each of the Borrower and Co-Borrower shall have
performed in all material respects all agreements and covenants required by
Lender to be performed by Borrower or Co-Borrower on or before the Closing Date.
5.2 Due Diligence With Respect to Real Properties/Mortgaged Properties. On
or before the Closing Date, Borrower and Co-Borrower shall submit the following
with respect to each Real Property or Mortgaged Property, all of which must be
in form and substance satisfactory to Lender and its counsel:
(a) two (2) years of historical cash flow operating statements, if
available, or the tax returns for the prior two (2) years for each Real
Property;
(b) a Survey for each Real Property;
(c) a copy of each Lease for each Real Property;
(d) a Phase I environmental report for each Real Property dated as
of a date not more than three (3) months prior to the Closing Date (or not more
than three (3) months prior to the Maturity Date if delivered pursuant to
Section 5.3 of this Agreement), addressed to Lender and issued by a licensed and
nationally recognized environmental engineering firm concluding that no Phase II
environmental report is recommended or, if a Phase II environmental report is
recommended, a completed Phase II report addressed to Lender with a conclusion
that no remediation is necessary or desirable (collectively, the " Updated
Environmental Report");
(e) if the Lease requires Borrower or Co-Borrower to maintain, at
its sole cost and expense, the structural elements or common areas of a Real
Property, then Borrower or Co-Borrower shall provide an engineer's inspection
report for such Real Property reasonably satisfactory and addressed to Lender
dated no more than ______ ( ) months prior to the Closing Date (or not more than
______ ( ) months prior to the Maturity Date if delivered pursuant to Section
5.3 of this Agreement);
SECURED TERM
LOAN AGREEMENT 28
34
(f) a Title Commitment for each Real Property reflecting a title
search conducted not more than thirty (30) days prior to the Closing Date (or
Maturity Date, if being delivered pursuant to Section 5.3 of this Agreement) and
updated in writing on the Closing Date (or Maturity Date if delivered pursuant
to Section 5.3 of this Agreement);
(g) evidence of property insurance for each Real Property with
coverages and in amounts reasonably acceptable to Lender;
(h) executed copies of each of the Security Documents for each
Mortgaged Property;
(i) except with respect to the Mortgaged Property in Alabama leased
to Wal-Mart Stores, Inc., a subordination, non-disturbance and attornment
agreement for each Mortgaged Property in the form required by the Lease for such
Mortgaged Property or, if the Lease does not require another form, substantially
in the form attached as EXHIBIT I and made a part hereof, or otherwise in form
and substance acceptable to Lender, in its sole discretion, from each tenant and
any guarantor of such tenant's obligations under the Lease for such Mortgaged
Property; provided, however, that if any such subordination, non-disturbance and
attornment agreements have not yet been fully executed and delivered, Borrower
shall provide on the Closing Date a certificate confirming that all such
undelivered subordination, non-disturbance and attornment agreements have been
requested and shall provide all undelivered subordination, non-disturbance and
attornment agreements to Lender not later than thirty (30) days after the
Closing Date; provided, further that, notwithstanding the foregoing, Borrower
shall deliver to Lender on or before the Closing Date a tenant estoppel
certificate from Wal-Mart Stores, Inc., as tenant of the Mortgaged Property
located in Alabama, substantially in the form of the tenant estoppel certificate
delivered by Wal-Mart Stores, Inc. to Lexington Corporate Properties dated May
2, 1996 pursuant to that certain letter from ▇▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Director of
Property Management, Wal-Mart Stores, Inc.
(j) the Existing Environmental Report for each Real Property; and
(k) on the Closing Date (or the Maturity Date, if delivered pursuant
to Section 5.3 of this Agreement), the Title Policy for each Mortgaged Property;
provided, however, that, notwithstanding the foregoing, Borrower and Co-Borrower
may, for the Closing, deliver to Lender only the most recently issued of items
(b), (d) and (e) above that are in Borrower's or Co-Borrower's possession or
control at the Closing Date and may elect not to provide item (k).
5.3 Conditions Precedent to Extension. In addition to Borrower's timely
delivery of the Extension Request and the fee required by Section 2.1(c) of this
Agreement, Borrower and Co-Borrower agree that the following shall be conditions
precedent to the one (1)-year extension
SECURED TERM
LOAN AGREEMENT 29
35
of the Maturity Date, all of which shall be satisfactory in form and substance
to Lender and its counsel:
(a) Borrower and Co-Borrower, on or before the original Maturity
Date, reduce the principal balance of the Loan by an amount equal to at least
Five Million and 00/100 Dollars ($5,000,000.00) through refinancing or
otherwise;
(b) Borrower and Co-Borrower provide to Lender an Appraisal for each
Mortgaged Property other than any Mortgaged Property released pursuant to
Section 5.4 of this Agreement (the "Remaining Mortgaged Properties") prior to or
contemporaneously with the original Maturity Date; and
(c) Borrower and Co-Borrower deliver to Lender for each of the
Remaining Mortgaged Properties (i) not later than ten (10) days prior to the
original Maturity Date, the items listed in Sections 5.2(b) (Survey), (d)
(Updated Environmental Report), (e) (Inspection Report), (f) (Title Commitment)
and (g) (Evidence of Insurance) of this Agreement (but downdated in relation to
the original Maturity Date rather than the Closing Date) and (ii) on the
Maturity Date, (A) the Title Policy required by Section 5.2(k) of this
Agreement, (B) evidence of compliance with zoning and other local laws,
consisting of a zoning endorsement to the Title Commitment or a legal opinion,
and (C) an opinion of counsel and/or local counsel to Borrower and/or
Co-Borrower licensed to practice in the jurisdiction in which the Mortgaged
Property is located, if required by Lender, as to such matters as the perfection
and enforceability of the Security Documents.
5.4 Release of Mortgaged Properties.
(a) Borrowers shall have the right to have one (1) or more of the
Mortgaged Properties released from the Lien created by the Mortgage encumbering
such Mortgaged Property; provided, that all of the conditions set forth below
have been satisfied and all submissions are satisfactory in form and substance
to Lender and its counsel:
(i) the Lender shall have received from the Borrower at least
thirty (30) days prior written notice of the date for such
release (the "Release Date");
(ii) no Default or Event of Default shall have occurred and be
continuing as of the date of such notice and on the Release
Date;
(iii) Borrower shall have delivered to Lender a Compliance
Certificate with calculations giving effect to the requested
release and demonstrating compliance with the covenants
contained in Section 7 of this Agreement;
SECURED TERM
LOAN AGREEMENT 30
36
(iv) after the release of all Mortgaged Properties covered by
such notice from Borrower, not less than five (5) Borrower
Real Properties shall continue to be Mortgaged Properties and
not less than two (2) of such continuing Mortgaged Properties
shall have as the tenant under a Lease a Credit Tenant and no
event shall have occurred that constitutes a monetary or other
material default under such Lease, nor any event that with the
giving of notice or the lapse of time shall constitute a
default under such Lease;
(v) The Borrower shall have delivered to the Lender an
officer's certificate, dated the Release Date, confirming the
matters referred to in subparagraphs (ii), (iii) and (iv)
above; and
(vi) Borrowers shall have paid to Lender on or before the
Release Date (A) the Repayment Amount for each Mortgaged
Property covered by Borrower's release notice and (B) a fee in
the amount of one percent (1%) of the Release Payment Amount
for each Mortgaged Property covered by Borrower's release
notice.
Notwithstanding the foregoing, Lender shall waive the requirement that Borrowers
pay to Lender the fee referred to in Section 5.4(a)(vi)(B) of this Agreement if
Borrowers elect to refinance the Mortgaged Property being released through
Lender or any of its Affiliates (including National Realty Funding L.P.) on
generally the same terms and conditions as the terms and conditions then offered
by Lender or such Affiliate to similar borrowers for loans secured by similar
properties.
(b) Upon or concurrently with the satisfaction of all the foregoing
conditions set forth in Section 5.4(a) above, the Lender shall effectuate the
following (hereinafter referred to as a "Mortgaged Property Release"): the
security interest of the Lender in the Mortgage and other Loan Documents
relating to such Mortgaged Property shall be released from the Lien of the
Mortgage and such other Loan Documents and the Lender will execute and deliver
any agreements reasonably requested by the Borrower to release and terminate or
reassign, at the Borrower's option, the Mortgage and such other Loan Documents
as to such Mortgaged Property; provided, that such release and termination or
reassignment shall be without recourse to the Lender (except as contemplated
hereby) and without any representation or warranty (except that the Lender shall
be deemed to have represented that such release and termination or reassignment
has been duly authorized and that it has not assigned or encumbered the Loan
Documents relating to the released Mortgaged Property (except as contemplated
hereby)); provided, further, that upon the release and termination or
reassignment of the Lender's security interest in the Mortgage relating to such
Mortgaged Property, all references herein to the Mortgage relating to such
Mortgaged Property, shall be deemed deleted, except as otherwise provided herein
with respect to indemnities.
SECURED TERM
LOAN AGREEMENT 31
37
(c) In addition, if and at such time as the requirements of Section
5.4(a) of this Agreement are satisfied as to the sole Mortgaged Property owned
by Co-Borrower, then Co-Borrower shall be released from the Liabilities, and all
references to Co-Borrower in the Loan Documents shall be deemed deleted, and the
Lender will execute and deliver any agreement reasonably requested by the
Co-Borrower to evidence such release; provided, that (i) without limiting any
other provisions of this Agreement or the other Loan Documents, any such release
of the Mortgaged Property and other collateral and/or of the Co-Borrower shall
have no effect on the continuing obligations of Borrower for the Liabilities;
and (ii) such release shall be without recourse to the Lender (except as
contemplated hereby) and without any representation or warranty (except that the
Lender shall be deemed to have represented that such release has been duly
authorized and that it has not assigned or encumbered the Loan Documents (except
as contemplated hereby)).
SECTION 6. AFFIRMATIVE COVENANTS
Borrower and Co-Borrower hereby agree that, so long as any of the
Liabilities remains outstanding and unpaid or any other amount is owing to
Lender under this Agreement or the other Loan Documents, Borrower and
Co-Borrower shall:
6.1. Financial Statements. Furnish to Lender:
(a) Annual. As soon as available, but in any event not later than
ninety (90) days after the end of each fiscal year of Borrower, audited
consolidated financial statements of Borrower consisting of (A) a balance sheet,
(B) an income statement, (C) a statement of cash flow, (D) a statement of
retained earnings, and (E) if applicable, changes in stockholders' equity, for
such year, setting forth in each case in comparative form the figures for the
previous year, certified without material qualification by its certified public
accountants of nationally recognized standing; and
(b) Quarterly Statements of Borrower. As soon as available, but in
any event not later than sixty (60) days after the end of each fiscal quarter of
Borrower, copies of each of the following: (i) an unaudited balance sheet
prepared on a consolidated and consolidating basis as at the end of each such
quarter and the related unaudited statements of income for the fiscal quarter,
(ii) stockholders' equity and cash flows for such quarterly period, and the
portion of the fiscal year through such date, setting forth in each case in
comparative form the figures for the previous year, certified by a Responsible
Officer of such Borrower (subject to normal year-end audit adjustments); all
such financial statements referred to in Section 6.1 (a) and (b) of this
Agreement to be complete and correct in all material respects and be prepared in
reasonable detail and in accordance with GAAP applied consistently throughout
the periods reflected therein (except as disclosed therein and for normal
year-end adjustments).
SECURED TERM
LOAN AGREEMENT 32
38
(c) Annual Budget of Borrower. Not later than fifteen (15) days
prior to the beginning of each fiscal year commencing with fiscal year 2001, the
annual budget of Borrower, on a consolidated basis, detailing expected sources
and uses of cash for the next fiscal year. Borrower shall also provide such
additional supporting detail as Lender may reasonably request.
6.2. Certificates; Other Information. Furnish to Lender:
(a) concurrently with the delivery of Borrower's financial
statements referred to in Section 6.1(a) and (b) above, (i) a certificate of a
Responsible Officer stating that he or she has no knowledge of any Default or
Event of Default except as specified in such certificate, (ii) a Certificate of
Covenant Compliance and (iii) that the representations and warranties contained
in the Loan Documents are true, correct and accurate in all material respects to
the same extent as though made on and as of the date of such delivery;
(b) promptly after the same are sent, copies of all financial
statements and reports which Borrower sends to limited partners, and promptly
after the same are filed by Borrower, copies of all financial statements and
reports which Borrower may make to, or file with, the Commission or any
successor or analogous Governmental Authority; and
(c) upon request by Lender, no later than thirty (30) days after the
same are filed with the Internal Revenue Service ("IRS") and other applicable
taxing authorities, copies of income tax returns by Borrower and/or the
Co-Borrower and all related correspondence.
6.3 Punctual Payment. Borrower and Co-Borrower will duly and punctually
pay or cause to be paid the principal and interest on the Loan and all interest,
fees, charges and other amounts provided for in this Agreement and the other
Loan Documents, all in accordance with the terms of this Agreement and the Note
and the other Loan Documents.
6.4. Payment of Other Liabilities. Discharge or otherwise satisfy at or
before maturity or before they become delinquent, as the case may be, all its
Indebtedness and other obligations of whatever nature except when the amount or
validity thereof is currently being contested in good faith by appropriate
proceedings and reserves in conformity with GAAP with respect thereto have been
provided on the books of Borrower or where the failure to do so does not violate
Section 8.1(f) of this Agreement.
6.5. Conduct of Business and Maintenance of Existence. Continue to engage
in the business only of buying, owning and operating single-tenant commercial
properties subject to triple-net leases and making and repaying the Liabilities
hereunder and engaging in incidental activities in connection with the foregoing
and preserve, renew and keep in full force and effect its existence and take all
reasonable action to maintain all rights, privileges and franchises necessary or
desirable in the normal conduct of its business; and comply with all Contractual
SECURED TERM
LOAN AGREEMENT 33
39
Liabilities and Requirements of Law except to the extent that the failure to
comply therewith could not, in the aggregate, have a Material Adverse Effect.
6.6 Inspection of Property; Books and Records; Discussions. Keep proper
books of record and account in which full, true and correct entries in
conformity with GAAP and all Requirements of Law shall be made of all dealings
and transactions in relation to its business and activities; and permit
representatives of Lender to visit and inspect any of its properties for any
purpose including performing environmental inspections and examine and make
abstracts from any of its books and records at any reasonable time and on
reasonable notice and as often as may reasonably be desired, and to discuss the
business, operations, properties, prospects and financial and other condition of
Borrower and Co-Borrower with officers and employees of such Borrower and
Co-Borrower and with its independent certified public accountants.
6.7. Notices. Promptly, and in any event within ten (10) Business Days
after an officer of Borrower or Co-Borrower obtains knowledge thereof (except as
set forth below) give notice to Lender:
(a) of the occurrence of any Default or Event of Default;
(b) of (i) any default or event of default or termination under any
Contractual Obligation of or in favor of Borrower and Co-Borrower which is
reasonably likely to have a Material Adverse Effect and (ii) any litigation,
investigation or proceeding which may exist at any time between Borrower,
Co-Borrower and any Governmental Authority or other Person, which if adversely
determined is reasonably likely to have a Material Adverse Effect;
(c) of any litigation or proceeding pending or any judgment against
Borrower or Co-Borrower in which the amount involved which is not covered by
insurance is One Hundred Thousand and 00/100 Dollars ($100,000.00) or more or in
which injunctive or similar relief is sought;
(d) of the occurrence or existence of any event or condition which
would cause any of the representations and warranties set forth in Section 4.16
of this Agreement to be untrue in any material respect or require a notice from
Borrower or Co-Borrower to Lender pursuant to Section 6.9 of this Agreement; or
(e) of any setoff, claims, withholdings or other defenses which
would have a Material Adverse Effect on the business, assets or financial
condition of Borrower or Co-Borrower or any of their respective Subsidiaries.
Each notice pursuant to this Section 6.7 shall be accompanied by a statement of
a Responsible Officer setting forth details of the occurrence referred to
therein and stating what action Borrower or Co-Borrower proposes to take with
respect thereto.
SECURED TERM
LOAN AGREEMENT 34
40
6.8. Changes in GAAP. In the event of a change in GAAP which would cause
the financial covenants set forth in Section 7.1 of this Agreement to provide
less protection to any Lender or be more restrictive for Borrower than presently
provided for hereunder, cause such financial covenants to be reset, in good
faith, by Lender and Borrower to maintain the protection to Lender equivalent to
that in place prior to such change and Lender, such Borrower shall execute one
or more amendments to this Agreement to effect such reset.
6.9. Maintenance; Insurance; Casualty and Condemnation. (a) Keep or cause
the tenant under each Lease of a Real Property to keep such Real Property in
good condition, working order and repair; maintain or cause the tenant under
each Lease of a Real Property to maintain with financially sound and reputable
insurance companies, such hazard, commercial general liability, builder's risk,
rent interruption and other insurance with respect to such Real Property and its
business against such casualties and contingencies in amounts and minimum scope
of coverage as shall be in accordance with the general practices of businesses
having similar operations in similar geographic areas; and furnish to Lender, on
the Closing Date (and the Maturity Date, if Borrower elects to deliver the
Extension Request) and, upon written request, full information as to the
insurance carried.
(b) Borrower and Co-Borrower shall give immediate notice of any loss
of which they have knowledge to Lender. In case of loss covered by any of
policies required by (a) above, Lender is authorized to adjust, collect and
compromise in its discretion, all claims thereunder and, in such case, Borrower
and Co-Borrower covenant to sign upon demand, or Lender may sign or endorse on
Borrower's or Co-Borrower's behalf, all necessary proofs of loss, receipts,
releases and other papers required by the insurance companies to be signed by
Borrower or Co-Borrower; if Borrower or Co-Borrower neglect or refuse to do so,
Borrower and Co-Borrower hereby irrevocably appoint Lender as its
attorney-in-fact, coupled with an interest, for the purposes set forth in the
preceding sentence. Lender may deduct from such insurance proceeds any expenses
incurred by Lender in the collection and settlement thereof, including, but not
limited to, attorneys' and adjusters' fees and charges.
(c) If all of a Real Property or any part of a Real Property shall
be damaged or destroyed by fire or other casualty or shall be damaged or taken
through the exercise of the power of eminent domain. Borrower and Co-Borrower
shall promptly and with all due diligence restore and repair the Real Property
to the extent of the net insurance proceeds, award or other compensation
(collectively, the "Proceeds") available for the cost of such restoration or
repair. With respect to a Mortgaged Property, however, if the Proceeds are not
sufficient to repair and restore such Mortgaged Property, Borrower or
Co-Borrower must pay Lender the Release Payment for such Mortgaged Property.
Lender may require, subject to the provisions of the applicable Lease, that all
plans and specifications for such restoration or repair be submitted to and
approved by Lender (which approval shall not be unreasonably withheld) in
writing prior to commencement of the work. Subject to Section 6.9(e) below, at
Lender's election, to be exercised by written notice to Borrower within thirty
(30) days following Lender's unrestricted
SECURED TERM
LOAN AGREEMENT 35
41
receipt in cash or the equivalent thereof of the Proceeds, the entire amount of
the Proceeds, shall either: (i) be applied to the Loan in such order and manner
as Lender may elect, or (ii) held in an interest bearing account and made
available to Borrower on the terms and conditions set forth in this Section 6.9
to finance the cost of restoration or repair with any excess to be applied to
the Loan in the reverse order of maturity. If the amount of the Proceeds to be
made available to Borrower pursuant to this Section 6.9 is less than the cost of
the restoration or repair as estimated by Lender at any time prior to completion
thereof, Borrower shall cause to be deposited with Lender the amount of such
deficiency within thirty (30) days of Lender's written request therefor (but in
no event later than the commencement of the work) and Borrower's deposited funds
shall be disbursed prior to the Proceeds. If Borrower is required to deposit
funds under this Section, the deposit of such funds shall be a condition
precedent to Lender's obligation to disburse the Proceeds held by Lender
hereunder. If Borrower makes such a deposit and excess insurance proceeds remain
after completion of the restoration or repair, such excess proceeds shall be
remitted to Borrower up to the amount of the deposit made by Borrower.
The amount of the Proceeds which is to be made available to
Borrower, together with any deposits made by Borrower hereunder, shall be held
by Lender in an interest bearing account to be disbursed from time to time to
pay the cost of repair or restoration either, at Lender's option, to Borrower or
directly to contractors, subcontractors, material suppliers and other persons
entitled to payment in accordance with and subject to such conditions to
disbursement as Lender may impose to assure that the work is fully completed in
a good and workmanlike manner and paid for and that no liens or claims arise by
reason thereof. Lender may require (i) evidence of the estimated cost of
completion of such restoration or repair satisfactory to Lender, (ii) such
architect's certificates, waivers of lien, contractor's sworn statements, title
insurance endorsements, plats of survey, and other evidence of cost, payment and
performance acceptable to Lender, and (iii) inspections by Lender's inspector,
the fees and expenses of which shall be paid by Borrower. No payment made prior
to final completion of the repair or restoration shall exceed ninety percent
(90%) of the value of the work performed from time to time. No trust or
fiduciary relationship shall be deemed to be created in connection with the
holding of the Proceeds of Lender. Lender agrees that if Borrower requests,
Lender will invest the funds on behalf of Borrower in investments satisfactory
to Lender, with all earnings and interests, less Lender's administration fee, to
be applied to restoration costs. Neither Borrower nor Co-Borrower shall be
entitled to a credit against the Loan except and to the extent the funds are
applied thereto pursuant to this Article. Without limitation of the foregoing,
Lender shall have the right at all times to apply such funds to the cure of any
Event of Default or the performance of any obligations of Borrower under this
Agreement or the Loan Documents.
(d) All insurance proceeds shall be paid directly and solely to
Lender, and all insurance policies required hereunder shall so stipulate. Each
insurance company providing coverage for the Real Property is authorized and
directed to make such payment directly and solely to Lender. All insurance
proceeds may, subject to Section 6.9(e) below, be applied either to the
reduction of the indebtedness from Borrowers to Lender under the Note or this
Agreement
SECURED TERM
LOAN AGREEMENT 36
42
or to the restoration, repair, replacement or rebuilding of the portion of the
Real Property so damaged in such manner as Lender may determine, and any
application thereof to the Note shall not release or relieve Borrowers from
making the payments or performing the other agreements and obligations herein
required until the Note is paid in full.
(e) Lender shall make the Proceeds available to Borrower in
accordance with Lender's customary construction lending procedures, if Borrower
and Co-Borrower have satisfied all of the following conditions: (i) no Default
or Event of Default has occurred which has not been cured, (ii) the Proceeds
when combined with Borrower's own funds deposited with Lender for the purpose of
rebuilding are sufficient, in Lender's reasonable judgment, to complete the
repair, rebuilding and restoration of the Real Property, (iii) the insurance
company providing coverage for such loss shall not claim that it does not have
liability to pay any or some portion of the Proceeds to Borrower or Co-Borrower,
(iv) Lender has determined, in its reasonable judgment, that the Real Property
can be repaired and restored not later than six (6) months prior to the then
scheduled maturity date of the Note, and (v) the Building can be repaired and
rebuilt to the same extent as exist on the date hereof, all in accordance with
Requirements of Laws, or Lender is satisfied, in its sole discretion, that the
Buildings as they can be restored will meet all of Lender's requirements as to
value, utility, income production and other underwriting criteria, and (vi)
Lender is satisfied that rent loss and business interruption insurance proceeds
and Borrower's own funds are available, in sufficient amounts and for a
sufficient duration, such that all covenants and conditions set forth in Section
7.1 of this Agreement shall be complied with.
6.10. Leases. Maintain the Leases in full force and effect and enforce the
obligations of the tenants under the Leases, and provide a copy of all renewals,
amendments, modifications and terminations of the Leases.
6.11. Subordination of Payables to Affiliates. After the occurrence and
continuance of a Default or Event of Default, make no payments on any loans owed
by or under any management or other contracts between Borrower or Co-Borrower to
or with any Affiliate or Subsidiary (including, without limitation, any property
management or similar contract with Lexington) and all such amounts shall be
fully subordinated to the Loan pursuant to the terms of an agreement in form and
substance satisfactory to Lender.
6.12. Payment of Taxes and Claims. Pay or cause to be paid (a) all taxes,
assessments and other governmental charges imposed upon it or on any of its
property or assets or in respect of any of its franchises, licenses, receipts,
sales, use, payroll, employment, business, income or property before any penalty
or interest accrues thereon and (b) all claims (including, without limitation,
claims for labor, services, materials and supplies) for sums which have become
due and payable and which by law have or may become a lien on a Real Property
(other than a Lien permitted by Section 7.6 of this Agreement); provided,
however, that no such taxes, assessments, fees and governmental charges referred
to in clause (a) above or claims referred to in clause (b)
SECURED TERM
LOAN AGREEMENT 37
43
above need be paid if being contested in good faith by appropriate proceedings
diligently instituted and conducted and if such reserve or other appropriate
provision, if any, as shall be required in conformity with GAAP shall have been
made therefor.
6.13. No Amendments to Certain Documents. Neither Borrower, Co-Borrower
nor General Partner, at any time cause or permit its certificate of limited
partnership, agreement of limited partnership, articles of incorporation,
by-laws or other charter documents, as the case may be, to be modified, amended
or supplemented in any respect whatever, without (in each case) the express
prior written consent or approval of Lender, if such changes would materially
adversely affect the rights of Lender hereunder or under any other Loan
Document.
6.14. Year 2000. Borrower, Co-Borrower or General Partner has conducted a
review and assessment of its computer systems and the computer systems of their
Subsidiaries with respect to the "year 2000 problem" (that is, the risk that
computer applications may not be able to properly perform date-sensitive
functions after December 31, 1999) and, based on that review and inquiry
Borrower, Co-Borrower or General Partner do not believe that upon implementation
of the new information systems currently being implemented, the year 2000
problem could reasonably be expected to have a Material Adverse Effect on
Borrower, Co-Borrower or General Partner.
6.15 Real Property Statements. As soon as practicable, and in any event
within ninety (90) days after the end of each fiscal quarter, quarterly
operating statements, in a form approved by the Lender, which operating
statements shall include actual quarterly and year-to-date net operating income
and net cash flow results, rent rolls in the form customarily generated by
Borrower or Co-Borrower, as applicable, for each Real Property dated as of the
last day of such fiscal quarter, in form and substance satisfactory to the
Lender, certified by Borrower's chief financial officer or chief accounting
officer. In addition, as soon as practicable, and in any event within ninety
(90) days after the end of the fourth fiscal quarter of each fiscal year, a
year-end operating statement, in a form approved by the Lender, which operating
statement shall include net operating income and net cash flow results for each
Real Property for such year end dated as of the last day of such fiscal quarter.
Lender agrees that Borrower's delivery of the information described in Section
6.2(b) shall satisfy the requirements of this Section 6.15.
6.16 Intentionally Omitted.
6.17 Environmental Compliance; Indemnification.
(a) Borrower, Co-Borrower and each Real Property shall comply with
all Environmental Laws. All governmental permits and licenses required under any
Environmental Laws shall remain in effect or shall be renewed in a timely
manner, and Borrower and Co-Borrower shall comply, or cause compliance,
therewith. All Hazardous Material nor or hereafter present, handled or generated
on any Real Property will be disposed of in a lawful manner and
SECURED TERM
LOAN AGREEMENT 38
44
handled in compliance with all applicable Environmental Laws. Borrower and
Co-Borrower will satisfy, or cause to be satisfied, all requirements under
Environmental Laws of maintenance and removal of all underground storage tanks
on any Real Property, if any.
(b) Except as permitted by Environmental Laws, no Hazardous Material
shall be introduced to or used, generated, presented, or handled on any Real
Property without thirty (30) days prior written notice to Lender.
(c) Each of Borrower and Co-Borrower shall immediately notify Lender
of all Environmental Actions of which it receives notice and provide copies
within five (5) business days of receipt of all written notices, complaints,
correspondence and other documents relating thereto. Each of Borrower and
Co-Borrower shall promptly and diligently pursue the cure and, if applicable,
dismissal with prejudice of all Environmental Actions to the reasonable
satisfaction of Lender, and Borrower and Co-Borrower shall keep each Real
Property free of an encumbrance arising from any judgment, liability or lien
imposed pursuant to any Environmental Actions.
(d) Borrower and Co-Borrower shall provide such information and
certifications which Lender may reasonably request from time to time to insure
Borrower's compliance with this Section 6.17, subject to the rights of the
tenants under the Leases, but taking into account any subordination,
non-disturbance and attornment agreement delivered by a tenant to Lender. To
investigate Borrower's and Co-Borrower's compliance with Environmental Laws and
with this Section 6.17, Lender shall have the right, but no obligation, at any
time to enter upon any Real Property, take samples, review Borrower's and
Co-Borrower's books and records, interview Borrower's and Co-Borrower's
employees and officers, and conduct such other activities as Lender, at its sole
discretion, deems appropriate to ensure Borrower's and Co-Borrower's compliance.
Borrower and Co-Borrower shall cooperate fully in the conduct of such an audit.
If Lender decides to conduct such an audit because of (i) an Environmental
Action; (ii) Lender is considering taking possession of or title to any Real
Property after default by Borrower; (iii) a material change in the use of any
Real Property, which in Lender's opinion, materially increases the risk of
non-compliance with Environmental Laws; or (iv) the introduction of Hazardous
Material other than as permitted by Environmental Laws to a Real Property; then
Borrower and Co-Borrower shall pay upon demand all cost and expenses connected
with such audit, which, until paid, shall become additional indebtedness secured
by the Loan Documents and shall bear interest at the default interest rate set
forth in Section 2.6(c) of this Agreement. Nothing in this Section 6.17 shall
give or be construed as giving Lender the right to direct or control Borrower's
or Co-Borrower's actions in complying with Environmental Laws.
(e) Lender is entitled to rely upon Borrower's and Co-Borrower's
representations, warranties and covenants contained in this Agreement despite
any independent investigations by Lender or its consultants. Borrower and
Co-Borrower shall take all necessary actions to determine for itself, and to
remain aware of, the environmental condition of each Real
SECURED TERM
LOAN AGREEMENT 39
45
Property. Borrower and Co-Borrower shall have no right to rely upon any
independent environmental investigations or findings made by Lender or its
consultants.
(f) The term "Lender's Environmental Liability" shall mean any and
all losses, liabilities, obligations, penalties, claims, fines, lost profits
(due to the failure to receive interest payments when due), clean-up costs,
litigation, demands, defenses, costs, judgments, suits, proceedings, damages
(including consequential damages such as a decline in the value of a Real
Property), disbursements or expenses of any kind or nature whatsoever (including
attorneys' fees prior to and at trial and appellate levels and experts' fees and
disbursements and expenses incurred in investigating, defending against,
settling or prosecuting any litigation, claim or proceeding) which may at any
time be imposed upon, incurred by or asserted or awarded against Lender or any
of Lender's Affiliates in connection with or arising from:
(i) any Hazardous Material on, in, under or affecting all or
any portion of a Real Property, or any surrounding areas other than
those which are owned by Lender or in which Lender has a security
interest to the extent that such Hazardous Material physically
affects a Real Property;
(ii) any misrepresentation, inaccuracy or breach of any
warranty, covenant or agreement contained or referred to in this
Agreement;
(iii) any violation or claim of violation by Borrower or
Co-Borrower of any Environmental Laws;
(iv) the imposition of any lien on any Real Property for
damages caused by, or the recovery of any costs incurred for the
cleanup of, any release or threatened release of Hazardous Material;
or
(v) any Environmental Actions.
Borrower and Co-Borrower shall indemnify, defend (at trial and
appellate levels and with counsel, experts and consultants
reasonably acceptable to Lender and at Borrower's and Co-Borrower's
sole cost) and hold Lender and its Affiliates\ free and harmless
from and against Lender's Environmental Liability other than
Lender's Environmental Liability which arises solely out of Lender's
willful misconduct or gross negligence (collectively, "Borrowers'
Indemnification Obligations"). Borrowers' Indemnification
Obligations are secured by the Mortgages.
Borrower and Co-Borrower and their successors and assigns,
hereby waive, release and agree not to make any claim or bring any
cost recovery action
SECURED TERM
LOAN AGREEMENT 40
46
against Lender relating to this Loan or any Real Property under or
with respect to any Environmental Laws. To the extent that Lender is
strictly liable under any Environmental Laws or Environmental
Actions, Borrowers' obligations to Lender under the foregoing
indemnity shall likewise be without regarding to fault on the part
of Borrower, Co-Borrower or Lender with respect to the violation or
condition which results in liability to Lender.
6.18 Consolidated Status. Co-Borrower is and shall remain a Consolidated
Subsidiary of Borrower.
SECTION 7. NEGATIVE COVENANTS
Borrower and Co-Borrower hereby agree that, so long as this Agreement
remains in effect or any Liabilities remain outstanding and unpaid or any other
amount is owing to Lender hereunder or under any other Loan Document, each shall
not directly or indirectly:
7.1. Financial Covenants. Borrower shall not fail to comply with the
covenants set forth in this Section 7.1 on a consolidated basis tested as of the
end of each fiscal quarter.
(a) Borrower Debt Service Coverage. Borrower shall not suffer or
permit the Debt Service Coverage Ratio to be less than one and five tenths
(1.5): one and zero one hundredths (1.0).
(b) Mortgaged Property Coverage Ratio. Borrower shall not suffer or
permit the Mortgaged Property Coverage Ratio to be less than one and five tenths
(1.5): one and zero one hundredths.
(c) Borrower Debt to Gross Asset Value Ratio. Borrower shall not
suffer or permit the Debt to Gross Asset Value Ratio to exceed seventy percent
(70%).
(d) Mortgaged Property Loan to Value Ratio. Borrower shall not
suffer or permit the Mortgaged Property Loan to Value Ratio to be greater than
fifty-five percent (55%).
(e) Minimum Tangible Net Worth. Borrower will maintain a minimum
Tangible Net Worth of Thirty-Three Million and 00/100 Dollars ($33,000,000.00).
7.2. Restricted Payments. Borrower shall not declare, make or pay any
Restricted Payment prior to repayment in full of the Liabilities; provided,
however, that, so long as no Default or Event of Default shall have occurred and
be continuing, Borrower may continue to make dividend payments to its partners
consistent with its customary dividend practices, but shall not declare or make
any extraordinary dividend or other Restricted Payments prior to repayment in
full of the Liabilities.
SECURED TERM
LOAN AGREEMENT 41
47
7.3. Merger; Sale of Assets; Termination and Other Actions. Neither
Borrower, Co-Borrower nor General Partner shall become a party to any merger,
consolidation or reorganization nor shall there be any change in Control of the
Borrower, Co-Borrower or General Partner without the prior approval of Lender.
7.4. Transactions with Affiliates. Neither Borrower nor Co-Borrower shall
enter into or be a party to any transaction directly or indirectly with or for
the benefit of any Affiliate of Borrower or Co-Borrower, other than (i) in the
ordinary course of business and (ii) for fair consideration and on terms no less
favorable to Borrower or Co-Borrower than are available in an arm's-length
transaction from unaffiliated third parties.
7.5. Accounting Changes. Neither Borrower nor Co-Borrower shall make any
significant change in accounting treatment and reporting practices, except as
required by GAAP or with which Borrower's or Co-Borrower's independent certified
public accountants have agreed. Borrower and Co-Borrower shall advise Lender
sufficiently in advance of any change to permit representatives of Lender to
discuss the proposed change with the officers of Borrower or Co-Borrower.
7.6. No Indebtedness or Lien; Negative Pledge as to Missouri Property.
(a) Neither Borrower nor Co-Borrower shall have any Indebtedness
other than Permitted Indebtedness, or grant or create, or suffer or permit to
exist, any Liens encumbering any Real Property other than any Permitted
Exceptions and Customary Permitted Liens.
(b) Without limiting the foregoing, Borrower shall not grant or
create, or suffer or permit to exist, any Liens encumbering the Missouri
Property other than any Permitted Exceptions and Customary Permitted Liens
expressly permitted by Lender. Lender hereby expressly permits as Permitted
Exceptions and Customary Permitted Liens on the Missouri Property only those
matters listed as exceptions to title in the Title Commitment as to the Missouri
Property provided to Lender prior to the Closing, those matters described in
items (a) and (b) of the definition of Permitted Liens set forth in this
Agreement, Customary Permitted Liens and the rights of Everest & ▇▇▇▇▇▇▇▇ in the
Missouri Property, as a tenant only, under the Everest & ▇▇▇▇▇▇▇▇ lease
described on EXHIBIT F, but, without limiting the foregoing, Lender does not
permit any Liens previously granted by Borrower to Nations Financial Capital
Corporation, all of which Liens are to be released of record on or prior to the
Closing Date.
7.7. Fiscal Year. Change the fiscal year end of Borrower or Co-Borrower
from December 31 to any other date without the prior written consent of Lender.
7.8. Chief Executive Office. Change the name of Borrower or Co-Borrower or
the chief executive office of Borrower or Co-Borrower or the address where
Borrower's or Co-
SECURED TERM
LOAN AGREEMENT 42
48
Borrower's books and records are maintained unless Borrower or Co-Borrower gives
Lender prompt written notice of any such change not less than thirty (30) days
in advance.
7.9. Limitations on Certain Activities. Suffer or permit (a) any sale,
transfer, pledge or assignment of more than forty-nine percent (49%) of the
ownership interests in Borrower or Co-Borrower; or (b) material changes in
Borrower or Co-Borrower's business, without, in the case of (a) or (b) above,
the prior approval of Lender.
7.10 Amendments and Modifications of Leases. Neither Borrower nor
Co-Borrower shall (a) amend, modify or waive the provisions of any Lease, (b)
terminate, reduce the rents under or shorten the term of any Lease or (c) agree
to any matter referred to in (a) or (b) above, without in each case the Lender's
prior written consent, in its sole discretion.
7.11 Prohibitions of Cross-Default. Neither Borrower nor Co-Borrower
shall, or permit any Consolidated Subsidiary to, cross-default, or agree to
cross-default, Permitted Indebtedness with this Agreement.
SECTION 8. EVENTS OF DEFAULT
8.1. Events of Default. Upon the occurrence of any of the following events
(each an "Event of Default"):
(a) Payments. Borrower or Co-Borrower shall fail to pay any
principal of or interest on the Note or Loan upon the due date thereof, or any
other amount payable hereunder shall not be paid within ten (10) days after
notice from Lender; or
(b) Representations and Warranties. Any representation or warranty
made or deemed made by Borrower or Co-Borrower herein or in any other Loan
Document or which is contained in any certificate, document or financial or
other statement furnished at any time under or in connection with this Agreement
or any other Loan Document shall prove to have been incorrect in any material
respect on or as of the date made or deemed made; or
(c) Certain Covenant Defaults. Borrower shall default in the
observance or performance of Sections 6.5, 6.6, 6.14, 7.1, 7.3, 7.6 and 7.9 of
this Agreement; or
(d) Certain Other Covenant Defaults. Borrower or Co-Borrower shall
default in the observance or performance of any other covenant or provision of
this Agreement or any of the other Loan Documents, and such default shall
continue unremedied for a period of thirty (30) days after notice from Lender or
such longer period as may be reasonably necessary to cure such default (but in
no event more than ninety (90) days) provided Borrower or the Co-Borrower
commences such cure within said thirty (30) day period and diligently prosecutes
same to
SECURED TERM
LOAN AGREEMENT 43
49
completion (or such other period of time as may be specifically set forth
elsewhere in this Agreement with respect to specific matters); or
(e) Insolvency, Etc. There shall be an Insolvency Event with respect
to Borrower, Co-Borrower or General Partner.
(f) Certain Judgments. One or more judgments or decrees shall be
entered against Borrower or Co-Borrower involving in the aggregate a liability
(not paid or fully covered by insurance) of Five Million and 00/100 Dollars
($5,000,000.00), and all such judgments or decrees shall not have been vacated,
discharged, or stayed or bonded pending appeal within sixty (60) days from the
entry thereof; or
(g) Management. Prior to the Maturity Date, (i) any change in
Control of the General Partner of the Borrower occurs without prior Lender
approval or (ii) Lexington shall cease to manage the Real Properties; or
(h) Loan Documents. From and after the Closing Date, any Loan
Document shall be terminated or otherwise shall cease to be in full force and
effect except in accordance with this Agreement or shall cease to give Lender
any Liens purported to be given thereby or any party thereto other than Lender
shall cease to be, or shall assert that it is not, bound thereby in accordance
with its terms and in the case of any party other than a Borrower or
Co-Borrower, Borrower shall not have taken such steps as may be reasonably
necessary to enforce such Loan Document promptly after notice thereof by Lender;
or
(i) Environmental Liabilities. Borrower or Co-Borrower or any of
their respective Consolidated Subsidiaries becomes subject to any Liabilities
and Costs (not previously disclosed to and approved by the Lender) which Lender
reasonably deems to have a Material Adverse Effect on the Borrower or
Co-Borrower arising out of or related to (i) the release or threatened release
at any Real Property Asset of any Hazardous Material into the environment, or
any remedial action in response thereto, or (ii) otherwise any violation of any
Environmental Laws.
8.2 Remedies. In the event that one or more Events of Default shall have
occurred and be continuing, then (a) if such event is an Event of Default
specified in paragraph 8.1(e) above, the Liabilities hereunder (with accrued
interest thereon) and all other amounts owing under this Agreement, the Note and
any other Loan Documents shall immediately become due and payable, and (b) if
such event is any other Event of Default, any of the following actions may be
taken: (i) Lender may, by notice to Borrower; declare the Loan hereunder (with
accrued interest thereon) and all other amounts owing under this Agreement, the
Note and any other Loan Document to be due and payable forthwith, whereupon the
same shall immediately become due and payable or (ii) Lender may exercise any
other right or remedy available at law or in equity or by statute.
SECURED TERM
LOAN AGREEMENT 44
50
Except as expressly provided in Section 8.1 of this Agreement, presentment,
demand, protest and all other notices of any kind are hereby expressly waived.
8.3. Annulment of Acceleration. If payment on the Loan and the Note is
accelerated in accordance with Section 8.2 of this Agreement, then and in every
such case, Lender may by an instrument delivered to Borrower annul such
acceleration and the consequences thereof, provide that at the time such
acceleration is annulled:
(a) all arrears of interest on the Loan and the Note and all other
sums payable in respect of the Loan and pursuant to this Agreement, the Note and
each other Loan Document (except any principal of or interest or premium on the
Loan and the Note and other sums which have become due and payable only by
reason of such acceleration) shall have been duly paid; and
(b) every other Default or Event of Default shall have been duly
waived or otherwise cured; provided further that no such annulment shall extend
to or affect any subsequent Default or Event of Default or impair any right
consequent thereon. The provisions of this Section 8.3 is for the sole benefit
of Lender and is not intended to benefit Borrower or Co-Borrower and does not
give Borrower Co-Borrower the right to require Lender to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
8.4. Cooperation by Borrower and Co-Borrower. To the extent that it
lawfully may, Borrower and Co-Borrower agree and shall cause to agree that it
will not at any time insist upon or plead, or in any manner whatever claim or
take any benefit or advantage of any applicable present or future stay,
extension or moratorium law, which may affect observance or performance of the
provisions of this Agreement or of the Note or any other Loan Document.
SECTION 9. [INTENTIONALLY OMITTED]
SECTION 10. GENERAL
10.1. Assignments and Participations. (a) Assignments. No assignments or
participations of Lender's rights or obligations under this Agreement shall be
made except in accordance with this Section 10.1. Lender may assign to one or
more Eligible Assignees, who, so long as no Default or Event of Default exists
and is continuing, is approved by Borrower (which approval shall not be
unreasonably withheld, conditioned or delayed) all or a portion of its rights
and obligations under this Agreement (including all of its rights and
obligations with respect to the Loan) in accordance with the provisions of this
Section 10.1.
(b) Limitations on Assignments. Each assignment shall be subject to
the following conditions: (i) each assignment shall be of a constant, and not a
varying, ratable percentage of all of the assigning Lender's right and
obligations under this Agreement and, in the case of a partial assignment, shall
be in a minimum principal amount of Fifteen Million and
SECURED TERM
LOAN AGREEMENT 45
51
00/100 Dollars ($15,000,000.00) (ii) each such assignment shall be to an
Eligible Assignee who, so long as no Default or Event of Default exists and is
continuing, is approved by Borrower (which approval shall not be unreasonably
withheld, conditioned or delayed), and (iii) the parties to each such assignment
shall execute and deliver an Assignment and Acceptance substantially in the form
of EXHIBIT J attached hereto and made a part hereof. Upon such execution,
delivery, and acceptance and the Register, from and after the effective date
specified in each Assignment and Acceptance and agreed to by Lender, (A) the
assignee thereunder shall, in addition to any rights and obligations hereunder
held by it immediately prior to such effective date, if any, have the right to
and obligations hereunder that have been assigned to it pursuant to such
Assignment and Acceptance and shall, to the fullest extent permitted by law,
have the same rights and benefits hereunder as if it were an original Lender
hereunder, (B) the assigning Lender shall, to the extent that rights and
obligations hereunder have been assigned by it and assumed by the Eligible
Assignee pursuant to such Assignment and Acceptance, relinquish its rights and
be released from its obligations under this Agreement (and, in the case of an
Assignment and Acceptance covering all or the remaining portion of such
assigning Lender's rights and obligations under this Agreement, the assigning
Lender shall cease to be a party hereto) and (C) Borrower and Co-Borrower shall
execute and deliver to the assignee thereunder a Note evidencing its obligations
to such assignee with respect to the Loan and, if applicable, a new Note to the
Assignor evidencing its remaining obligations to the Assignor.
(c) Participations. Lender may sell participations to one or more
other financial institutions in or to all or a portion of its rights and
obligations under and in respect of any and all facilities under this Agreement
(including, without limitation, all or a portion of the Loan owing to it);
provided, however, that (i) Lender's obligations under this Agreement shall
remain unchanged, (ii) Lender shall remain solely responsible to the other
parties hereto for the performance of such obligations, (iii) Borrower,
Co-Borrower and Lender shall continue to deal solely and directly with each
other in connection with Lender's rights and obligations under this Agreement
and (iv) such participant's rights to agree or to restrict the Lender's ability
to agree to the modification, waiver or release of any of the terms of the Loan
Documents, to consent to any action or failure to act by any party to any of the
Loan Documents or any of their respective Affiliates or to exercise or refrain
from exercising any powers or rights which the Lender may have under or in
respect of the Loan Documents, shall be limited to the right to consent to (A)
increase in the principal amount of the Loan of Lender from whom such
participant purchased a participation, (B) reduction of the principal of, or
rate or amount of interest on the Loan subject to such participation (other than
by the payment or prepayment thereof), and (C) postponement of the Maturity Date
(other than pursuant to Section 2.1(c) hereof).
(d) Information Regarding Borrower or Co-Borrower. Lender may, in
connection with any assignment or participation pursuant to this Section 10.1,
disclose to the assignee or participant or proposed assignee or participant, any
information relating to Borrower or Co-Borrower furnished to Lender or by or on
behalf of Borrower or Co-Borrower; provided that, prior to any such disclosure,
such assignee or participant, or proposed assignee or
SECURED TERM
LOAN AGREEMENT 46
52
participant, shall agree to preserve in accordance with Section 10.14 the
confidentiality of any confidential information described therein.
(e) Payment to Participants. Anything in this Agreement to the
contrary notwithstanding, in the case of any participation, all amounts payable
by Borrower or Co-Borrower under the Loan Documents shall be calculated and made
in the manner and to the parties required hereby as if no such participation had
been sold.
(f) Lender' Creation of Security Interests. Notwithstanding any
other provision set forth in this Agreement, Lender may at any time create a
security interest in all or any portion of its rights under this Agreement
(including, without limitation, Liabilities owing to it and the Note held by it)
in favor of any Federal Reserve bank in accordance with Regulation A of the
Federal Reserve Board.
(g) Foreign Banks. Any assignee or participant that is not created
or organized under the laws of the United States or a political subdivision
thereof shall be domiciled and organized in an OECD country and deliver to
Borrower a true and accurate certificate executed by a duly authorized officer
to the effect that such party is subject to tax review and eligible to receive
payments hereunder and under the Note without deduction or withholding of United
States federal income tax (i) under the provisions of an applicable tax treaty
concluded by the United States (in which case the certificate shall be
accompanied by two duly completed copies of IRS Form 1001 (or any successor or
substitute form or forms)) or (ii) under Sections 1442(c)(1) and 1442 (a) of the
Code (in which case the certificate shall be accompanied by two duly completed
copies of IRS Form 4224 (or any successor or substitute form or forms).
(h) Borrower's and Co-Borrower's Rights and Liabilities Unaffected.
Notwithstanding anything to the contrary contained herein, no assignment or
participation by Lender shall result in any material change in any of the Loan
Documents, any additional or increased cost or obligation to Borrower or
Co-Borrower or reduce the rights or benefits of Borrower or Co-Borrower
hereunder without the prior written consent of Borrower.
10.2. Marshaling; Payments Set Aside. Lender shall not be under any
obligation to ▇▇▇▇▇▇▇▇ any assets in favor of Borrower or Co-Borrower or any
other party or against or in payment of any or all of the Liabilities. To the
extent that Borrower or Co-Borrower makes a payment or payments to Lender or
Lender exercises its rights of setoff, and such payment or payments or the
proceeds of such enforcement or setoff or any part thereof are subsequently
invalidated, declared to be fraudulent or preferential, set aside or required to
be repaid to a trustee, receiver or any other party, then to the extent of such
recovery, the obligation or part thereof originally intended to be satisfied,
and all Liens, right and remedies therefor, shall be revived and continued in
full force and effect as if such payment had not been made or such enforcement
or setoff had not occurred.
SECURED TERM
LOAN AGREEMENT 47
53
10.3 Counterparts; Effectiveness; Inconsistencies. This Agreement and any
amendments, waivers, consents, or supplements hereto may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such counterparts together shall constitute but one and the
same instrument. This Agreement shall become effective against Borrower, the
Co-Borrower and Lender on the Closing Date. This Agreement and each of the other
Loan Documents shall be construed to the extent reasonable to be consistent one
with the other, but to the extent that the terms and conditions of this
Agreement are actually inconsistent with the terms and conditions of any other
Loan Document, this Agreement shall govern.
10.4 Disclaimer by Lender. Neither Borrower nor Co-Borrower is nor shall
be an agent of Lender for any purposes and Lender shall not be deemed partners
or joint venturer with Borrower or Co-Borrower or any of its Affiliates or
Subsidiaries.
10.5 Choice of Law. THIS AGREEMENT, THE NOTE AND EACH LOAN DOCUMENT SHALL
BE CONTRACTS UNDER AND SHALL BY GOVERNED BY AND CONSTRUED AND INTERPRETED IN
ACCORDANCE WITH THE LAWS OF THE STATE OF OHIO (EXCLUDING THE LAWS APPLICABLE TO
CONFLICTS OR CHOICE OF LAW).
10.6 Submission to Jurisdiction; Waiver of Jury Trial; Etc.
NOTWITHSTANDING ANY OTHER PROVISION IN THIS AGREEMENT, THE NOTE OR ANY OTHER
LOAN DOCUMENT, EACH OF THE BORROWER AND CO-BORROWER ON BEHALF OF ITSELF
IRREVOCABLY (a) SUBMITS TO THE NONEXCLUSIVE PERSONAL JURISDICTION OF ANY STATE
OR FEDERAL COURT IN THE STATE OF OHIO LOCATED IN THE NORTHERN DISTRICT OF OHIO
IN ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING RELATING TO THIS AGREEMENT OR THE
NOTE OR ANY OF THE OTHER LOAN DOCUMENTS; (b) AGREES THAT ALL CLAIMS IN RESPECT
OF ANY SUCH SUIT, ACTION OR OTHER LEGAL PROCEEDING MAY BE HEARD AND DETERMINED
IN, AND ENFORCED IN AND BY, ANY SUCH COURT; (c) WAIVES ANY OBJECTION THAT IT MAY
NOW OR HEREAFTER HAVE TO VENUE IN ANY SUCH COURT OR THAT SUCH COURT IS AN
INCONVENIENT FORUM; (d) AGREES TO SERVICE OF PROCESS IN ANY SUCH PROCEEDING BY
REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO BORROWER AT ITS ADDRESS SET
FORTH HEREIN OR TO SUCH OTHER ADDRESS OF WHICH LENDER SHALL HAVE BEEN NOTIFIED
IN WRITING (SUCH SERVICE TO BE EFFECTIVE ON THE EARLIER OF RECEIPT THEREOF OR,
IN THE CASE OF SERVICE BY MAIL, THE 5TH DAY AFTER DEPOSIT OF SUCH SERVICE IN THE
MAILS AS AFORESAID), (e) TO THE EXTENT THAT SUCH PARTY HAS ACQUIRED, OR
HEREAFTER MAY ACQUIRE, ANY IMMUNITY FROM JURISDICTION OF ANY SUCH COURT OR FROM
LEGAL PROCESS THEREIN, WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE
LAW, SUCH IMMUNITY; (f) KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVES, TO
SECURED TERM
LOAN AGREEMENT 48
54
THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, IN CONNECTION WITH, OR WITH
RESPECT TO, ANY SUIT, ACTION OR OTHER LEGAL PROCEEDING RELATING TO THIS
AGREEMENT OR THE NOTE OR ANY OF THE OTHER LOAN DOCUMENTS, (i) ANY CLAIM THAT IT
IS IMMUNE FROM ANY LEGAL PROCESS (WHETHER THROUGH SERVICE OR NOTICE, ATTACHMENT
PRIOR TO JUDGMENT, ATTACHMENT IN AID OF EXECUTION, EXECUTION OR OTHERWISE) WITH
RESPECT TO IT OR ANY OF ITS PROPERTY, (ii) ANY CLAIM THAT IT IS NOT PERSONALLY
SUBJECT TO THE JURISDICTION OF ANY SUCH COURT, AND (iii) ANY RIGHT TO A JURY
TRIAL; AND (g) AGREES THAT LENDER SHALL HAVE THE RIGHT TO BRING ANY LEGAL
PROCEEDINGS (INCLUDING A PROCEEDING FOR ENFORCEMENT OF A JUDGMENT ENTERED BY ANY
OF THE AFOREMENTIONED COURTS) AGAINST BORROWER OR CO-BORROWER IN ANY OTHER COURT
OR JURISDICTION IN ACCORDANCE WITH APPLICABLE LAW. NOTWITHSTANDING THE
FOREGOING, NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF LENDER TO BRING ANY
ACTION OR PROCEEDING RELATING TO THIS AGREEMENT OR THE NOTE OR ANY OF THE OTHER
LOAN DOCUMENTS IN THE COURTS OF ANY OTHER JURISDICTION OR THE RIGHT, IN
CONNECTION WITH ANY LEGAL ACTION OR PROCEEDING WHATSOEVER, TO SERVE LEGAL
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW. CO-BORROWER HEREBY IRREVOCABLY
DESIGNATES BORROWER AS ITS PROCESS AGENT TO RECEIVE SERVICE OF ANY AND ALL
PROCESS AND DOCUMENTS ON ITS BEHALF IN ANY LEGAL PROCEEDING IN THE STATE OF OHIO
AND BORROWER BY ITS ACKNOWLEDGMENT BELOW, IRREVOCABLY AGREES TO SO ACT AS AGENT
FOR SERVICE OF PROCESS. IF SUCH AGENT SHALL FOR ANY REASON FAIL TO ACT, OR BE
PREVENTED FROM ACTING, AS AGENT, NOTICE THEREOF SHALL IMMEDIATELY BE GIVEN TO
SUCH AGENT BY REGISTERED OR CERTIFIED MAIL AND BORROWER AND CO-BORROWER AGREE
PROMPTLY TO DESIGNATE ANOTHER AGENT FOR SERVICE OF PROCESS IN CLEVELAND, OHIO
SATISFACTORY TO LENDER UNDER THIS AGREEMENT, TO SERVE IN PLACE OF BORROWER AND
DELIVER TO LENDER WRITTEN EVIDENCE OF SUCH SUBSTITUTE AGENT'S ACCEPTANCE OF SUCH
DESIGNATION. BORROWER SHALL NEVERTHELESS CONTINUE TO SERVE AS AGENT FOR SERVICE
OF PROCESS UNTIL ITS SUCCESSOR IS DULY APPOINTED.
10.7 Notices; Certain Payments. (a) All notices, consents and other
communications to Borrower, Lender relating hereto to be effective shall be in
writing and shall be deemed made (i) if by certified mail, return receipt
requested, four (4) Business Days after deposit in the United States mail, or if
by facsimile, when received (in each case unless otherwise specified in this
Agreement), (ii) if delivered by hand or overnight courier, when receipted for,
in each case addressed to them as follows or at such other address as either of
them may designate by written notice to the other in the manner set forth in
this Section 10.7; (x) Borrower or Co-Borrower: c/o The LCP Group, L.P., ▇▇▇
▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ with a copy to ▇▇▇▇▇▇▇
SECURED TERM
LOAN AGREEMENT 49
55
▇. ▇▇▇▇▇▇, Esq. Paul, Hastings, ▇▇▇▇▇▇▇▇ & ▇▇▇▇▇▇ LLP, Thirty-First Floor, ▇▇▇
▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇, ▇▇ ▇▇▇▇▇; or to (v) Lender: KeyBank National Association,
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇▇▇, Telephone: (216)
▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇, with a copy to ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP, 127
Public Square, ▇▇▇▇ ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇, Attention: ▇▇▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇, Esq., Telephone: (▇▇▇) ▇▇▇-▇▇▇▇, Fax: (▇▇▇) ▇▇▇-▇▇▇▇.
(b) All payments on account of the Loan and the Note pursuant hereto
or pursuant to the other Loan Documents shall be made for the account of Lender
at: KeyBank National Association, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇
▇▇▇▇▇, Attention: ▇▇▇▇ ▇▇▇▇.
Any party may by written notice to the other specify or change its account and
address for payment instructions hereunder.
10.8 No Waivers; Cumulative Remedies; Entire Agreement; Headings. No
action, failure, delay or omission by, Lender in exercising any rights and
remedies under this Agreement, the Note or any other Loan Document, or
otherwise, shall constitute a waiver of, or impair, any of the rights or
privileges of Lender hereunder or thereunder. No single or partial exercise of
any such right or remedy shall preclude any other or further exercise thereof or
the exercises of any other right or remedy. Such rights and remedies are
cumulative and not exclusive of any rights and remedies provided by law or
otherwise available, including, but not limited to, rights to specific
performance (to the extent permitted by law) or any covenant or agreement
contained in this Agreement or any of the Loan Documents. No waiver of any such
right or remedy shall be effective unless given in writing or as otherwise
provided in Section 10.2 of this Agreement. No waiver of any such right or
remedy shall be deemed a waiver of any other right or remedy hereunder or
thereunder. Except as otherwise specifically provided in this Agreement, every
right and remedy given by this Agreement or by applicable law to Lender may be
exercised from time to time and as often as may be deemed expedient by Lender.
This Agreement, the Note and the other Loan Documents constitute the entire
agreement of the parties relating to the subject matter hereof and thereof and
there are no verbal agreements relating hereto or thereto. Section headings
herein shall have no legal effect. This Agreement, the Note and the other Loan
Documents (including all covenants, representations, warranties, privileges,
rights, and remedies made or granted herein or therein) shall inure to the
benefit of, and be enforceable by Lender and its respective successors and
assigns, except as otherwise expressly provided in this Agreement. Borrower may
not directly or indirectly assign or transfer (whether by agreement, by
operation of law or otherwise) any of their rights or obligations and
liabilities hereunder without the prior written consent of Lender affected
thereby. Subject to the provisions of Section 10.1 of this Agreement, Lender may
make, carry or transfer the Loan at, to or for the account of, any of its branch
offices or the office of one or more of its Affiliates.
SECURED TERM
LOAN AGREEMENT 50
56
10.9 Survival. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making and repayment of the Loans hereunder.
10.10 Payment of Expenses and Taxes. Borrower and Co-Borrower agree (a) to
pay or reimburse Lender within fifteen (15) Business Days after demand for all
its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the Note and any other Loan Documents or other
documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Lender, (b) to pay or reimburse
Lender, within fifteen (15) Business Days after demand for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Note and any Loan Documents, or the
satisfaction or review of conditions precedent to any borrowing other than that
occurring on the Closing Date, including, without limitation, reasonable fees
and disbursements of counsel to Lender and (c) to pay, indemnify, and to hold
Lender, and its officers, directors, employees (the "Indemnified Parties')
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Note, the Loan Documents
and any such other documents, and (d) to pay, indemnify, and hold Lender, and
its officers, directors, employees harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions judgments, suits,
reasonable costs, reasonable expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement or the other Loan Documents except to the
extent resulting from the gross negligence or willful misconduct of any of the
Indemnified Parties (all the foregoing, collectively, the "indemnified
liabilities").
10.11 Further Assurances. Borrower and Co-Borrower will, on request of
Lender, (a) promptly correct any defect, error or omission in any Loan Document;
(b) execute, acknowledge, deliver, procure, record or file such further
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Lender to carry out the purposes of the Loan Documents and to identify
and subject to the liens and security interests of the Loan Documents any
property intended to be covered thereby, including any renewals, additions,
substitutions, replacements, or appurtenances to any such collateral, and (c)
provide such certificates, documents, reports, information, affidavits and other
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Lender to comply with the requirements of any agency having
jurisdiction over Lender.
SECURED TERM
LOAN AGREEMENT 51
57
10.12 No Brokers. Borrower and Co-Borrower hereby agree to indemnify
Lender from any liability, claim or loss arising by reason of claims for any
brokerage commission made by any Person claiming to have dealt with and
Borrower, Co-Borrower or any Affiliate of Borrower or Co-Borrower in connection
with the Loan. Lender agrees to indemnify Borrower from any liability, claim or
loss arising by reason of claims for any brokerage commission made by any Person
claiming to have dealt with Lender in connection with the Loan. The provisions
of this Section 10.11 shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability (including
attorneys' fees), claim or loss exists.
10.13 Confidentiality. Lender shall hold all confidential information
obtained pursuant to the requirements of this Agreement in accordance with its
party's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a bona fide offeree, transferee or
participant in connection with the contemplated transfer or participation or as
required or requested by any Governmental Authority or representative therefor
pursuant to legal process and shall require any such offeree, transferee or
participant to agree (and require any of its offerees, transferees or
participants to agree) to comply with this Section 10.12. In no event shall
Lender be obligated or required to return any materials furnished by Borrower or
Co-Borrower.
10.14 Set-Offs. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any rights, upon
the occurrence and during the continuance of any Event of Default, Lender is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Borrower or Co-Borrower or to any other
Person except as may be required by law or otherwise expressly required hereby,
any such other notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), other than deposits held for the benefit of third
parties, and any other indebtedness at any time held or owing by Lender
(including, without limitation, by branches and agencies of Lender wherever
located) to or for the credit of the account of Borrower against and on account
of the Liabilities of Borrower then due and payable to Lender under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Liabilities purchased by Lender. Borrower and
Co-Borrower agree, to the fullest extent that it, may effectively do so under
applicable law, that any holder of a participation in a Note acquired pursuant
to the foregoing arrangements, may exercise rights of set-off counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of Borrower or Co-Borrower in the amount of
such participation.
10.15 Syndication. Borrower and Co-Borrower acknowledge that Lender
intends, and shall have the right subject to Section 10.1 of this Agreement, by
itself or through its Affiliates, to syndicate or enter into colending
arrangements with respect to the Loan pursuant to this Section 10.14, and
Borrower and Co-Borrower agree subject to Section 10.1 of this Agreement to
SECURED TERM
LOAN AGREEMENT 52
58
cooperate in all reasonable respects with Lender's and its Affiliate's
syndication and/or co-lending efforts, such cooperation to include, without
limitation, the provision of information reasonably requested by potential
syndicate members.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
BORROWER:
NET 2 L.P., a Delaware limited
partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its general
partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation, its
general partner
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
CO-BORROWER
NET 2 PLYMOUTH LLC,
a Delaware limited liability company
BY: NET PLYMOUTH INC., a Delaware
corporation, its managing member
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SECURED TERM
LOAN AGREEMENT 53
59
LENDER:
KEYBANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
SECURED TERM
LOAN AGREEMENT 54
60
EXHIBIT A
DEFINITIONS
"Adjusted NOI" means, as determined as of the end of the most recently ended
Fiscal Quarter, the aggregate of Net Operating Income for each Mortgaged
Property for such Fiscal Quarter, multiplied by four (4).
"Affiliate" means, with respect to a particular Person, any Person which,
directly or indirectly, is in Control of, is Controlled by or is under common
Control with such particular Person.
"Agreement" means this Secured Term Loan Agreement, as amended, supplemented or
modified from time to time in accordance herewith.
"Applicable Margin" means (a) one hundred and fifty (150) basis points, with
respect to Base Rate Tranches and (b) two hundred and fifty (250) basis points
with respect to LIBOR Rate Tranches.
"Base Rate" means a fluctuating interest rate per annum as shall be in effect
from time to time, which rate per annum shall at all times be equal to the prime
rate of interest announced by Lender from time to time, changing when and as the
prime rate changes. The Base Rate is a reference rate used by Lender in
determining interest rates on certain loans and is not intended to be the lowest
rate of interest charged by Lender on any extension of credit to any debtor.
"Base Rate Tranches" means those portions of the principal amount of the Loan on
which the interest is computed by reference to the Base Rate.
"Borrower" has the meaning set forth in the first paragraph of this Agreement.
"Borrower Real Properties" means, collectively, the nine (9) real property
assets described on EXHIBIT K attached hereto and made a part hereof owned by
Borrower as of the Closing Date.
"Borrowers" means, collectively, Borrower and Co-Borrower.
"Borrowers' Indemnification Obligations" has the meaning set forth in Section
6.7(f)(v) of this Agreement.
SECURED TERM
LOAN AGREEMENT 1
61
10.9 Survival. All indemnities set forth herein shall survive the
execution and delivery of this Agreement and the other Loan Documents and the
making and repayment of the Loans hereunder.
10.10 Payment of Expenses and Taxes. Borrower and Co-Borrower agree (a) to
pay or reimburse Lender within fifteen (15) Business Days after demand for all
its out-of-pocket costs and expenses incurred in connection with the
development, preparation and execution of, and any amendment, supplement or
modification to, this Agreement, the Note and any other Loan Documents or other
documents prepared in connection herewith, and the consummation of the
transactions contemplated hereby and thereby, including, without limitation, the
reasonable fees and disbursements of counsel to Lender, (b) to pay or reimburse
Lender, within fifteen (15) Business Days after demand for all its costs and
expenses incurred in connection with the enforcement or preservation of any
rights under this Agreement, the Note and any Loan Documents, or the
satisfaction or review of conditions precedent to any borrowing other than that
occurring on the Closing Date, including, without limitation, reasonable fees
and disbursements of counsel to Lender and (c) to pay, indemnify, and to hold
Lender, and its officers, directors, employees (the "Indemnified Parties')
harmless from, any and all recording and filing fees and any and all liabilities
with respect to, or resulting from any delay in paying, stamp, excise and other
taxes, if any, which may be payable or determined to be payable in connection
with the execution and delivery of, or consummation of any of the transactions
contemplated by, or any amendment, supplement or modification of, or any waiver
or consent under or in respect of, this Agreement, the Note, the Loan Documents
and any such other documents, and (d) to pay, indemnify, and hold Lender, and
its officers, directors, employees harmless from and against any and all other
liabilities, obligations, losses, damages, penalties, actions judgments, suits,
reasonable costs, reasonable expenses or disbursements of any kind or nature
whatsoever with respect to the execution, delivery, enforcement, performance and
administration of this Agreement or the other Loan Documents except to the
extent resulting from the gross negligence or willful misconduct of any of the
Indemnified Parties (all the foregoing, collectively, the "indemnified
liabilities").
10.11 Further Assurances. Borrower and Co-Borrower will, on request of
Lender, (a) promptly correct any defect, error or omission in any Loan Document;
(b) execute, acknowledge, deliver, procure, record or file such further
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Lender to carry out the purposes of the Loan Documents and to identify
and subject to the liens and security interests of the Loan Documents any
property intended to be covered thereby, including any renewals, additions,
substitutions, replacements, or appurtenances to any such collateral, and (c)
provide such certificates, documents, reports, information, affidavits and other
instruments and do such further acts deemed reasonably necessary, desirable or
proper by Lender to comply with the requirements of any agency having
jurisdiction over Lender.
SECURED TERM
LOAN AGREEMENT 51
62
10.12 No Brokers. Borrower and Co-Borrower hereby agree to indemnify
Lender from any liability, claim or loss arising by reason of claims for any
brokerage commission made by any Person claiming to have dealt with and
Borrower, Co-Borrower or any Affiliate of Borrower or Co-Borrower in connection
with the Loan. Lender agrees to indemnify Borrower from any liability, claim or
loss arising by reason of claims for any brokerage commission made by any Person
claiming to have dealt with Lender in connection with the Loan. The provisions
of this Section 10.11 shall survive the repayment of the Loan and shall continue
in full force and effect so long as the possibility of such liability (including
attorneys' fees), claim or loss exists.
10.13 Confidentiality. Lender shall hold all confidential information
obtained pursuant to the requirements of this Agreement in accordance with its
party's customary procedures for handling confidential information of this
nature and in accordance with safe and sound banking practices and in any event
may make disclosure reasonably required by a bona fide offeree, transferee or
participant in connection with the contemplated transfer or participation or as
required or requested by any Governmental Authority or representative therefor
pursuant to legal process and shall require any such offeree, transferee or
participant to agree (and require any of its offerees, transferees or
participants to agree) to comply with this Section 10.12. In no event shall
Lender be obligated or required to return any materials furnished by Borrower or
Co-Borrower.
10.14 Set-Offs. In addition to any rights now or hereafter granted under
applicable law or otherwise, and not by way of limitation of any rights, upon
the occurrence and during the continuance of any Event of Default, Lender is
hereby authorized at any time or from time to time, without presentment, demand,
protest or other notice of any kind to Borrower or Co-Borrower or to any other
Person except as may be required by law or otherwise expressly required hereby,
any such other notice being hereby expressly waived, to set off and to
appropriate and apply any and all deposits (general or special, time or demand,
provisional or final), other than deposits held for the benefit of third
parties, and any other indebtedness at any time held or owing by Lender
(including, without limitation, by branches and agencies of Lender wherever
located) to or for the credit of the account of Borrower against and on account
of the Liabilities of Borrower then due and payable to Lender under this
Agreement or under any of the other Loan Documents, including, without
limitation, all interests in Liabilities purchased by Lender. Borrower and
Co-Borrower agree, to the fullest extent that it, may effectively do so under
applicable law, that any holder of a participation in a Note acquired pursuant
to the foregoing arrangements, may exercise rights of set-off counterclaim and
other rights with respect to such participation as fully as if such holder of a
participation were a direct creditor of Borrower or Co-Borrower in the amount of
such participation.
10.15 Syndication. Borrower and Co-Borrower acknowledge that Lender
intends, and shall have the right subject to Section 10.1 of this Agreement, by
itself or through its Affiliates, to syndicate or enter into colending
arrangements with respect to the Loan pursuant to this Section 10.14, and
Borrower and Co-Borrower agree subject to Section 10.1 of this Agreement to
SECURED TERM
LOAN AGREEMENT 52
63
cooperate in all reasonable respects with Lender's and its Affiliate's
syndication and/or co-lending efforts, such cooperation to include, without
limitation, the provision of information reasonably requested by potential
syndicate members.
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed by their proper and duly authorized officers as of the day and
year first above written.
BORROWER:
NET 2 L.P., a Delaware limited
partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its general
partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation, its
general partner
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
CO-BORROWER
NET 2 PLYMOUTH LLC,
a Delaware limited liability company
BY: NET PLYMOUTH INC., a Delaware
corporation, its managing member
By: /s/ E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
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Name: E. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: President
SECURED TERM
LOAN AGREEMENT 53
64
LENDER:
KEYBANK NATIONAL ASSOCIATION,
a national banking association
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
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Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇, ▇▇.
Title: Vice President
SECURED TERM
LOAN AGREEMENT 54
65
"Buildings" means the buildings, structures and other improvements now or
hereafter located on the Real Properties.
"Building Service Equipment" means all apparatus, fixtures and articles of
personal property owned by Borrower or Co-Borrower now or hereafter attached to
or used or procured for use exclusively in connection with the operation or
maintenance of any Building located on or included in a Mortgaged Property,
including, but without limiting the generality of the foregoing, all engines,
furnaces, boilers, stokers, pumps, heaters, tank dynamos, motors, generators,
switchboards, electrical equipment, heating, plumbing, lifting and ventilating
apparatus, air-cooling and air-conditioning apparatus, gas and electric
fixtures, elevators, escalators, fittings, and machinery and all other equipment
of every kind and description, used or procured for use in the operation of the
Buildings (except apparatus, fixtures or articles of personal property belonging
to lessees or other occupants of such building or to persons other than the
Borrower or Co-Borrower unless the same be abandoned by any such lessee or other
occupant or person), together with any and all replacements thereof and
additions thereto.
"Business Day" means a day, in the applicable local time, which is not a
Saturday or Sunday or a legal holiday and on which banks are not required or
permitted by law or other governmental action to close (a) in Cleveland, Ohio
and (b) in the case of LIBOR Rate Tranches, in London, England.
"Cash Equivalents" means marketable direct obligations issued or unconditionally
guaranteed by the United States Government or issued by an agency thereof and
backed by the full faith and credit of the United States, in each case maturing
within one (1) year after the date of acquisition thereof.
"Closing Date" means the date of this Agreement.
"Co-Borrower" has the meaning set forth in the first paragraph of this
Agreement.
"Co-Borrower Property" means the real property asset located at ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ to be acquired by Co-Borrower with a portion of the
Loan on the Closing Date.
"Code" means the Internal Revenue Code of 1986, as amended from time to time.
"Commission" means the United States Securities and Exchange Commission or any
successor to the responsibilities of such commission.
"Consolidated" or "consolidated" means that term as applied to the accounts of
Borrowers and their respective Subsidiaries, as the case may be, in accordance
with GAAP.
SECURED TERM
LOAN AGREEMENT 2
66
"Consolidated Subsidiary" means at any date any wholly-owned Subsidiary or other
wholly-owned entity which is consolidated with Borrower in accordance with GAAP.
"Contingent Obligation" means, as to any Person, any obligation of such Person
guaranteeing or intended to guarantee any Indebtedness, leases, dividends or
other obligations ("primary obligations") of any other Person (the "primary
obligor") in any manner, whether directly or indirectly, including, without
limitation, any obligation of such Person, whether or not contingent, (a) to
purchase any such primary obligation or any property constituting direct or
indirect security therefor, (b) to advance or supply funds (i) for the purchase
or payment of any such primary obligation or (ii) to maintain working capital or
equity capital of the primary obligor or otherwise to maintain the net worth or
solvency of the primary obligor, (c) to purchase property, securities or
services primarily for the purpose of assuring the owner of any such primary
obligation of the payment of, or the ability of the primary obligor to make
payment of, such primary obligation or (d) otherwise to assure or hold harmless
the owner of such primary obligation against loss in respect thereof; provided,
however, that the term Contingent Obligation shall not include endorsements of
instruments for deposit or collection in the ordinary course of business. The
amount of any Contingent Obligation shall be deemed to be an amount equal to the
stated or determinable amount of the primary obligation in respect of which such
Contingent Obligation is made or, if not stated or determinable, the maximum
reasonably anticipated liability in respect thereof (assuming such Person is
required to perform thereunder) as determined by such Person in good faith.
"Contractual Obligation" means, as to any Person, the Articles of Incorporation
and By Laws or other organizational or governing documents of such Person, and
any provision of any security issued by such Person, or of any agreement,
instrument or undertaking to which such Person is a party or by which it or any
of its property is bound.
"Control" (including with correlative meanings the terms "Controlling",
"Controlled by" and "under common Control with"), as applied to any Person,
means the possession of the power, direct or indirect, (a) to vote fifty-one
percent (51%) or more of the securities or partnership interests having ordinary
voting power for the election of directors, trustees or the managing general
partner(s) of such Person or (b) to direct or cause the direction of the
management and policies of such Person whether by contract or otherwise.
"Credit Tenant" means tenants having and maintaining (or whose lease obligations
are guaranteed on an unconditional basis by a guarantor who has or maintains) a
rating of BBB - by Standard and Poor's Rating Group and its successors or Baa3
by ▇▇▇▇▇'▇ Investor Services, Inc. and its successors.
SECURED TERM
LOAN AGREEMENT 3
67
"Customary Permitted Liens" means:
(i) Liens (other than Liens pertaining to violations of
Environmental Laws) with respect to the payment of taxes, assessments
or governmental charges in all cases which are not yet due or which
are being contested in good faith by appropriate proceedings in
accordance with Section 6.12 of this Agreement and with respect to
which adequate reserves or other appropriate provisions are being
maintained in accordance with GAAP;
(ii) Statutory Liens in favor of suppliers, mechanics, carriers,
materialmen, warehousemen or workmen and other Liens against any Real
Property imposed by law created in the ordinary course of business for
amounts which, if not resolved in favor of Borrower or Co-Borrower
could not result in a Material Adverse Effect or which are being
contested in good faith by appropriate proceedings in accordance with
Section 6.12 of this Agreement and with respect to which adequate
reserves or other appropriate provisions are being maintained in
accordance with GAAP;
(iii) Liens which have been or will be bonded or released of
record within sixty (60) days after Borrower or Co-Borrower has
received notice thereof or which are being contested in good faith by
appropriate proceedings in accordance with Section 6.12 of this
Agreement;
(iv) Zoning restrictions which do not interfere in any material
respect with the ordinary conduct of the business of the Borrower or
Co-Borrower who owns such Real Property or any tenant thereof or
access by the public to such Real Property; and
(iv) Such other title exceptions as Lender may approve in writing
in its sole discretion.
"Debt" of any Person means, without duplication, (A) as shown on such Person's
consolidated balance sheet (i) all indebtedness of such Person for borrowed
money or for the deferred purchase price of property and, (ii) all indebtedness
of such Person evidenced by a note, bond, debenture or similar instrument
(whether or not disbursed in full in the case of a construction loan), (B) the
face amount of all letters of credit issued for the account of such Person and,
without duplication, all unreimbursed amounts drawn thereunder, (C) all
Contingent Liabilities of such Person, (D) indebtedness secured by any Lien on
the properties or assets of the Person, (E) all payment obligations of such
Person under any interest rate protection agreement (including, without
limitation, any interest rate swaps, caps, floors, collars and similar
agreements) and currency swaps and similar agreements which were not entered
into specifically in connection with Debt set forth in clauses (A), (B) or (C)
hereof, but excluding ordinary course
SECURED TERM
LOAN AGREEMENT 4
68
accounts payable, deferred taxes and accruals made in the ordinary course of the
Person's business. For purposes of this Agreement, Debt (other than Contingent
Liabilities) of Borrower shall be deemed to include only Borrower's pro rata
share (such share being based upon Borrower's percentage ownership interest as
shown on Borrower's annual audited financial statements) of the Debt of any
Person in which Borrower, directly or indirectly, owns an interest, provided
that such Debt is nonrecourse, both directly and indirectly, to Borrower.
"Debt Service" means, as of any date of determination, for the most recently
ended Fiscal Quarter, the sum of (a) Interest Expense paid or payable by
Borrower or Co-Borrower on its Debt, (b) scheduled principal amortization
payments of Borrower or any Consolidated Subsidiary on Debt secured by a
mortgage on any Real Property Asset, whether or not paid by Borrower or such
Consolidated Subsidiary (excluding balloon payments), and (c) amortization paid
or payable in connection with any interest rate protection agreement (including,
without limitation, any interest rate swaps, caps, floors, collars and similar
agreements).
"Debt Service Coverage Ratio" means, as of any date of determination, for the
most recently ended Fiscal Quarter, the ratio of (a) EBITDA to (b) Debt Service.
"Debt to Gross Asset Value Ratio" means, as of any date of determination, for
the most recently ended Fiscal Quarter, the ratio of (a) Debt to (b) Gross Asset
Value.
"Default" means any of the events specified in Section 8.1 of this Agreement
whether or not any requirement for the giving of notice, the lapse of time or
both, or any other condition, has been satisfied.
"DOL" means the United States Department of Labor and any Person succeeding to
the functions thereof.
"Dollars" or "$" shall mean lawful currency of the United States of America.
"EBITDA" means, for the most recently ended Fiscal Quarter, (a) the sum of the
following, as determined in accordance with GAAP, (i) Net Income of Borrower,
excluding Net Income derived from Borrower's pro rata share (based upon
ownership interest) of any Minority Holding, (ii) depreciation and amortization
expense, general and administrative expenses and other non-cash items deducted
in determining such Net Income, excluding depreciation and amortization expense,
general and administration expenses and other non-cash items derived from
Borrower's pro rata share (based upon ownership interest) of each Minority
Holding; (iii) Interest Expense, and (iv) Taxes accrued or paid by Borrower,
excluding Borrower's pro rata share (based upon ownership interest) of Taxes
relating to any Minority Holding; minus (b) interest income for Borrower; minus
(c) gains (and plus losses) from extraordinary items, asset sales or write-ups
or forgiveness of indebtedness.
SECURED TERM
LOAN AGREEMENT 5
69
"Eligible Assignee" means (a) any Affiliate of Lender, (b) a commercial bank
having total assets in excess of Two Billion Five Hundred Million and 00/100
Dollars ($2,500,000,000.00) organized in an OECD country, (c) the central bank
of any country which is a member of the OECD or (d) a finance company or other
financial institution acceptable to Lender, which is regularly engaged in
making, purchasing or investing in loans and having total assets in excess of
Two Billion and 00/100 Dollars ($2,000,000,000.00) and in the case of subclause
(b), (c) and (d) of this defined term is otherwise acceptable to Lender.
"Environmental Actions" means
(a) any notice of violation, complaint, claim, citation, demand,
report, action, assertion of potential responsibility, lien, encumbrance, or
proceeding regarding any Real Property, whether formal or informal, absolute or
contingent, matured or unmatured, brought or issued by any governmental unit,
agency, or body, or any person or entity respecting:
(i) Environmental Laws;
(ii) public health risks;
(iii) the environmental condition of the Real Property, or
any portion thereof, or any property near such Real Property,
including actual or alleged damage or injury to wildlife, biota,
air, surface or subsurface soil or water, or other natural
resources; or
(iv) the use, exposure, release, generation, manufacture,
transportation to or from, handling, storage, treatment,
recycling, reclamation, reuse, disposal or presence of Hazardous
Material either on such Real Property or transported off-site for
sale, treatment, storage, recycling, reclamation, reuse or
disposal.
(b) any violation or claim of violation by Borrower or Co-Borrower of
any Environmental Laws;
(c) any lien on such Real Property for damages caused by, or the
recovery of any costs incurred for the investigation, remediation or cleanup of
any release or threatened release of Hazardous Material; or
(d) the destruction or loss of use of property, or the injury, illness
or death of any officer, director, employee, agent, representative, tenant or
invitee of Borrower or Co-Borrower or any other person arising from or caused by
the environmental condition of any Real Property.
SECURED TERM
LOAN AGREEMENT 6
70
"Environmental Laws" means all statutes, ordinances, orders, rules and
regulations relating to environmental matters, including, without limitation,
those relating to fines, orders, injunctions, penalties, damages, contribution,
cost recovery compensation, losses or injuries resulting from the Release or
threatened Release of Hazardous Materials and to the generation, use, storage,
transportation, or disposal of Hazardous Materials, in any manner applicable to
Borrower, any tenant or any of their respective Subsidiaries or any of their
respective properties, including, without limitation, the Comprehensive
Environmental Response, Compensation, and Liability Act (42 U.S.C. Section 9601
et seq.), the Hazardous Material Transportation Act (49 U.S.C. Section 1801 et
seq.), the Resource Conservation and Recovery Act (42 U.S.C. Section 6901 et
seq.), the Federal Water Pollution Control Act (33 U.S.C. Section 1251 et seq.),
the Clean Air Act (42 U.S.C. Section 7401 et seq.), the Toxic Substances Control
Act (15 U.S.C. Section 2601 et seq.), the Occupational Safety and Health Act (29
U.S.C. Section 651 et seq.) and the Emergency Planning and Community
Right-to-Know Act (42 U.S.C. Section 11001 et seq.), each as amended or
supplemented, and any analogous future or present local, state and federal
statutes and regulations promulgated pursuant thereto, each as in effect as of
the date of determination.
"ERISA" means the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder.
"ERISA Affiliate" means (a) any corporation which is a member of a controlled
group of corporations within the meaning of Section 414(b) of the Code of which
Borrower is a member, (b) any trade or business (whether or not incorporated)
which is a member of a group of trades or businesses under common control within
the meaning of Section 414(c) of the Code of which Borrower is a member and (c)
any member of an affiliated service group within the meaning of Section 414(m)
or (o) of the Code of which Borrower, any corporation described in clause (a)
above or any trade or business described in clause (b) above is a member.
"Existing Environmental Reports" shall have the meaning set forth in Section
4.16(p)(ii) of this Agreement.
"Excluded Taxes" means income or franchise taxes of Lender or any branch office
of Lender imposed by the United States of America or any political subdivision
or taxing authority thereof or therein or by any jurisdiction in which the
lending office of Lender is located or in which Lender is organized or has its
principal or registered office.
"Extension Request" shall have the meaning set forth in Section 2.1(c) of this
Agreement.
"Event of Default" means any of the events specified in Section 8.1 of this
Agreement provided that any requirement for the giving of notice, the lapse of
time, or both, or any other condition, has been satisfied.
SECURED TERM
LOAN AGREEMENT 7
71
"Financing Statements" means those Uniform Commercial Code Financing Statements
executed by Borrower and Co-Borrower in favor of Lender with respect to each
Mortgaged Property.
"FIRREA" means the Financial Institutions Reform, Recovery, and Enforcement Act
of 1989, as amended from time to time, and the regulations promulgated and
rulings issued thereunder.
"FMV Cap Rate" means ten percent (10%).
"GAAP" means generally accepted accounting principles set forth in the opinions
and pronouncements of the Accounting Principles Board of the American Institute
of Certified Public Accountants and statements by the Financial Accounting
Standards Board or in such other statement by such other entity as may be in
general use by significant segments of the accounting profession, as in effect
on the Closing Date; and the requirement that such principles be applied on a
consistent basis shall mean that the accounting principles observed in a current
period are comparable in all material respects to those applied in a preceding
period.
"General Partner" means Lepercq Net 2 L.P., a Delaware limited partnership,
which is the general partner of Borrower.
"Governmental Authority" means any nation or government, any state or other
political subdivision thereof, any entity exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to government
and any corporation or other entity owned or controlled (through stock or
capital ownership or otherwise) by any of the foregoing.
"Gross Asset Value" means, as of the date of determination, the quotient of (a)
EBITDA multiplied by four (4); divided by (b) the FMV Cap Rate.
"Hazardous Material" means (i) any chemical, material or substance defined as or
included in the definition of "hazardous substances," "hazardous wastes,"
"hazardous materials," "extremely hazardous waste," "restricted hazardous
waste," or "toxic substances" or any other formulations intended to define, list
or classify substances by reason of deleterious properties under any applicable
Environmental Laws, (ii) any oil, petroleum or petroleum derived substance, any
drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, any flammable substances or
explosives, any radioactive materials, any toxic wastes or substances or any
other materials or pollutants which (a) pose a hazard to any property of any
Borrower, Co-Borrower, or any Subsidiaries or to Persons on or about such
property or (b) cause such property to be in violation of any Environmental
Laws, (ii) asbestos in any form which is or could become friable, urea
formaldehyde foam insulation, electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million, and (iv) any other chemical, material or substance,
SECURED TERM
LOAN AGREEMENT 8
72
exposure to which is prohibited, limited or regulated by any Governmental
Authority or may or could pose a hazard to the health and safety of the owners,
occupants or any Persons surrounding the Properties.
"Holder" means any Person entitled to enforce any of the Liabilities, whether or
not such Person holds any evidence of Indebtedness, including Lender.
"Implied Mortgage Amount" means, as of any date of determination, the quotient
equal to (a) the sum of Adjusted NOI divided by (b) the FMV Cap Rate.
"Indebtedness" means, with respect to any Person, and without duplication, all
indebtedness, obligations and other liabilities of such Person as determined in
accordance with GAAP.
"Insolvency Event" with respect to any Person, means that (a) such Person shall
have suspended or discontinued its business or commenced any case, proceeding or
other action (i) under any existing or future law of any jurisdiction, domestic
or foreign, relating to bankruptcy, insolvency, reorganization or relief of
debtors, seeking to have an order for relief entered with respect to it, or
seeking to adjudicate it a bankrupt or insolvent, or seeking reorganization,
arrangement, adjustment, winding-up, liquidation, dissolution, composition or
other relief with respect to it or its debts, or (ii) seeking appointment of a
receiver, trustee, custodian or other similar official for it or for all or any
substantial part of its assets, or such Person shall have made a general
assignment for the benefit of its creditors, (b) there shall have been commenced
against such Person any case, proceeding or other action of a nature referred to
in clause (a) above which (i) results in the entry of an order for relief or any
such adjudication or appointment or (ii) remains undismissed, undischarged or
unbonded for a period of ninety (90) days, (c) there shall have been commenced
against such Person any case, proceeding or other action seeking issuance of a
warrant of attachment, execution, distraint or similar process against all or
substantially all of its assets, which results in the entry of an order for any
such relief which shall not have been vacated, discharged, or stayed or bonded
pending appeal within ninety (90) days from the entry thereof, (d) such Person
shall have authorized any action in furtherance of, or indicating its consent
to, approval of, or acquiescence in, any of the acts set forth in clause (a),
(b) or (c) above, or (e) such Person shall generally not be paying, or shall
have been unable to pay, or shall have admitted in writing its inability to pay,
its debts as they become due.
"Interest Expense" means, for any period, the sum of (without duplication) (a)
total interest expense, whether paid, accrued or capitalized, including all
commissions, discounts and other fees and charges owed with respect to letters
of credit, net costs under interest rate protection agreements (including any
interest rate swaps, caps, floors, collars and similar agreements), and fees
payable to Lender pursuant to Section 2.17 of this Agreement, (b) any other
accrued, paid or capitalized interest incurred on any obligation for which
Borrower or any Consolidated Subsidiary is wholly or partially liable under
repayment, interest carry or performance
SECURED TERM
LOAN AGREEMENT 9
73
guarantees, or other relevant liabilities, but excluding (c) Borrower's pro rata
share of total interest expense, whether paid, accrued or capitalized, in
respect of Debt of any Minority Holding.
"Interest Payment Date" means with respect to Base Rate Tranches and LIBOR Rate
Tranches, the first day of each calendar month during the term of the Loan.
"Interest Period" means, with respect to each Loan, (a) initially, the period
commencing on the Funding Date of such Loan and ending on the last day of one of
the following periods (as selected by Borrower in a Notice of Borrowing or as
otherwise in accordance with the terms of this Agreement): (i) for any Base Rate
Tranche, the last day of the calendar month; (ii) for any LIBOR Rate Tranche,
one (1) or three (3) months (provided that the Interest Period for LIBOR Rate
Tranches may be shorter than one (1) month in order to consolidate two (2) or
more LIBOR Rate Tranches and (b) thereafter, each period commencing at the end
of the last day of the immediately preceding Interest Period applicable to such
Loan and ending on the last day of the applicable period set forth in (a) above
as selected by Borrower in a Notice of Continuation/Conversion or as otherwise
provided in accordance with this Agreement; provided that all of the foregoing
provisions relating to Interest Periods are subject to the following:
(A) if any Interest Period with respect to a Base Rate Tranche would
end on a day this is not a Business Day, that Interest Period shall end on
the next succeeding Business Day;
(B) if any Interest Period with respect to a LIBOR Loan would
otherwise end on a day that is not a Business Day, that Interest Period
shall be extended to the next succeeding Business Day unless the result of
such extension would be to carry such Interest Period into another calendar
month, in which event such Interest Period shall end on the immediately
preceding Business Day;
(C) if Borrower shall fail to give a Notice of Continuation/Conversion
as provided in Section 2.7(c) of this Agreement, Borrower shall be deemed
to have requested a continuation of the affected LIBOR Loan as a Base Rate
Tranche subject to the right of Borrower to submit a subsequent Notice of
Conversion/Continuation pursuant to Section 2.7(c) of this Agreement;
(D) any Interest Period relating to any LIBOR Loan that begins on the
last Business Day of a calendar month (or on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period) shall, subject to subparagraph (E) below, end on the last
Business Day of a calendar month; and
SECURED TERM
LOAN AGREEMENT 10
74
(E) any Interest Period that would otherwise extend beyond the
Maturity Date shall end on the Maturity Date.
"Interest Rate Determination Date" means each date for calculating the Base Rate
or the LIBOR Rate for a Loan or the continuation/conversion thereof. The
Interest Rate Determination Date shall be the second Business Day prior to the
first day of the related Interest Period for a LIBOR Loan and the date of
calculation in the case of a Base Rate Tranche.
"Lease" means, with respect to any Real Property, the executed, binding and
effective triple net lease of all of such Real Property between Borrower, as
lessor, and a single Person which is not an Affiliate of Borrower, as lessee,
together with all amendments and modifications thereof, as approved by Lender in
accordance with the terms of Section 7.10 of this Agreement.
"Lender" means KeyBank National Association, a national banking association, and
its successors and assigns.
"Lender's Environmental Liability" shall have the meaning set forth in Section
6.17 of this Agreement.
"Lexington" means Lexington Corporate Properties Trust, a statutory real estate
investment trust organized under the laws of the State of Maryland.
"Leverage Ratio" means, as of any date of determination, the ratio of (a) Total
Liabilities to (b) Total Asset Value.
"Liabilities" mean the outstanding principal amount of the Loan and all
advances, debts, liabilities, obligations, covenants and duties owing by
Borrower and Co-Borrower to Lender, or any Person entitled to indemnification
pursuant to Section 10.6 of this Agreement or any other provision of this
Agreement, of any kind or nature, arising under this Agreement, the Note or any
other Loan Document. The term includes, without limitation, all interest,
charges, expenses, fees, reasonable attorneys' fees and disbursements and any
other sum chargeable to Borrower and Co-Borrower under this Agreement or any
other Loan Document.
"Liabilities and Costs" means all claims, judgments, liabilities, obligations,
responsibilities, losses, damages (including lost profits), punitive or treble
damages, costs, disbursements and expenses (including, without limitation,
reasonable attorneys', experts' and consulting fees and costs of investigation
and feasibility studies), fines, penalties and monetary sanctions, interest,
direct or indirect, known or unknown, absolute or contingent, past, present or
future.
"LIBOR Base" means the rate per annum (rounded upwards, if necessary, to the
nearest 1/16 of 1%) shown on the display referred to as the "LIBO page" (or any
display substituted therefor) of
SECURED TERM
LOAN AGREEMENT 11
75
the Reuters U.S. Domestic Money Service transmitted through the Reuters monitor
system as being the respective rates at which U.S. dollar deposits would be
offered at approximately 9:00 A.M. Cleveland, Ohio time, two (2) Business Days
prior to the beginning of the relevant Interest Period by Lender to major banks
in the London interbank LIBOR market for delivery on the first day of such
Interest Period for the number of days comprised therein and in the amount of
the then outstanding LIBOR Loan.
"LIBOR Rate" means, with respect to each Interest Period, the rate per annum
equal to the sum of (a) the LIBOR Base for such Interest Period divided by a
percentage equal to one hundred percent (100%) minus the LIBOR Reserve
Percentage, with such quotient to be rounded upward to the nearest whole
multiple of one-hundredth of one percent (0.01%). All references in this
Agreement or other Loan Documents to LIBOR include the aforesaid reserve
adjustment.
"LIBOR Rate Tranches" means those portions of the principal amount of the Loan
on which the interest is computed by reference to the LIBOR Rate.
"LIBOR Reserve Percentage" means, relative to any Interest Period for LIBOR
Loans made by Lender, the reserve percentage (expressed as a decimal) equal to
the actual aggregate reserve requirements (including all basic, emergency,
supplemental, marginal and other reserves and taking into account any
transactional adjustments or other scheduled changes in reserve requirements)
announced by Lender as the reserve percentage applicable as specified under
regulations issued from time to time by the Federal Reserve Board. The LIBOR
Reserve Percentage shall be based on Regulation D of the Federal Reserve Board
or other regulations from time to time in effect concerning reserves for
"Eurocurrency Liabilities" from related institutions as though Lender were in a
net borrowing position.
"Lien" means any mortgage, lien, pledge, adverse claim, charge, security
interest or other encumbrance in or on, any real or personal property or any
interest therein including, without limitation, any conditional sale or other
title retention agreement or the signing or filing of a financing statement or
the signing of any security agreement authorizing any other party as the secured
party thereunder to file any financing statement.
"Loan Account" shall have the meaning set forth in Section 2.3(b) of this
Agreement.
"Loan Documents" means, collectively, this Agreement, the Note, the Security
Documents and all other agreements, documents or instruments delivered pursuant
to or in connection with any of the foregoing, as such agreements, documents or
instruments may be amended, modified or supplemented from time to time.
"MAC" means, with respect to Borrower and Co-Borrower, any material adverse
change in the business, operations, assets, prospects or financial condition or
other condition of Borrower or Co-Borrower.
SECURED TERM
LOAN AGREEMENT 12
76
"Material Adverse Effect" means a material adverse effect upon (a) the business,
operations, assets, prospects or financial condition or other condition of
Borrower or Co-Borrower (b) the ability of Lender to enforce any of the Loan
Documents or (c) the ability of Borrower or Co-Borrower to perform its
obligations under the Loan Documents.
"Maturity Date" means the earlier to occur of (a) January 10, 2001 and (b) the
date as of which the outstanding principal amount of the Loan shall become due
and payable by acceleration after the occurrence and during the continuance of
an Event of Default.
"Minority Holdings" means partnerships, limited liability companies,
corporations and joint ventures held or owned by Borrower that are not
wholly-owned by Borrower and are not consolidated on Borrower's financial
statements.
"Missouri Property" means the real property asset located in Earth City,
Missouri, currently under Lease dated June 19, 1990 from Borrower, as lessor, to
Everest & ▇▇▇▇▇▇▇▇, as lessee.
"Mortgage" means the mortgage, deed to secure debt, and/or deed of trust
executed by the Borrower or Co-Borrower in favor of the Lender securing the
Loan, each of which shall be a first mortgage lien with respect to each
Mortgaged Property which is the subject thereof.
"Mortgage Constant" means, as of any date of determination, a rate equal to the
sum of the Treasury Rate for such date, plus two hundred (200) basis points, as
amortized monthly pursuant to a twenty-five (25)-year amortization schedule. For
example purposes only, if the applicable Treasury Rate was six percent (6%),
after adding two hundred (200) basis points and applying the twenty-five
(25)-year amortization schedule, the Mortgage Constant would be ninety-two
thousand six hundred and eighteen one millionths (0.092618).
"Mortgaged Properties" means, collectively, the Real Properties, other than the
Missouri Property
"Mortgaged Property Coverage Ratio" means, as of any date of determination, the
ratio of (a) Adjusted NOI to (b) the product of the outstanding Loan times the
Mortgage Constant.
"Mortgaged Property Loan to Value Ratio" means, as of any date of determination,
the ratio of (a) the then outstanding Loan to (b) the Implied Mortgage Amount.
"Multiemployer Plan" means a "multiemployer plan" as defined in Section
4001(a)(3) of ERISA to which Borrower or any ERISA Affiliate is making or
accruing an obligation to make contributions, or has within any of the preceding
five plan years made or accrued an obligation to make contributions.
SECURED TERM
LOAN AGREEMENT 13
77
"Multiple Employer Plan" means an employee benefit plan, other than a
Multiemployer Plan, subject to Title IV of ERISA to which Borrower or any ERISA
Affiliate, and at least one (1) employer other than Borrower or an ERISA
Affiliate, is making or accruing an obligation to make contributions or, in the
event that any such plan has been terminated, to which Borrower or any ERISA
Affiliate made or accrued an obligation to make contributions during any of the
five (5) plan years preceding the date of termination of such plan.
"Net Income" means, for any Person and any period, the net earnings (or loss),
after Taxes and minority interests, calculated for such period on a consolidated
basis in conformity with GAAP.
"Net Operating Income" means, for any period, with respect to any of the
Mortgaged Property, Property Revenues minus Property Expenses attributable to
such Mortgaged Property for such period, in each case determined in accordance
with GAAP, except that, for purposes of determining Net Operating Income (a)
income shall be calculated on a stabilized basis and shall not include security
or other deposits, late fees, lease termination or other similar charges,
delinquent rent recoveries (unless previously reflected in reserves), proceeds
of business interruption insurance or any other items of a non-recurring nature,
and (b) to the extent (i) any such Mortgaged Property is not owned by Borrower
or Co-Borrower for the entire period for which such determination is being made
or (ii) any such Mortgage Property shall not have a Lease meeting the
requirements of Section 5.3 of this Agreement, then the Net Operating Income for
such Mortgaged Property shall not be included for purposes of this definition.
"Non-Recourse Debt" as to any Person, means Debt of such Person for which the
right of recovery of the obligee thereof is limited to recourse against the Real
Property Assets securing such Debt (subject to such limited exceptions to the
non-recourse nature of such Debt such as, but not limited to, fraud,
misappropriation, misapplication and environmental indemnities, as are usual and
customary in like transactions at the time of the incurrence of such Debt).
"Note" means a promissory note in the form attached hereto as EXHIBIT B
evidencing the Liabilities of Borrower to Lender and executed by Borrower as
required by Section 5.1 of this Agreement, as the same may be amended,
supplemented, modified or restated from time to time.
"Notice of Continuation/Conversion" means a notice substantially in the form of
EXHIBIT D hereto delivered by Borrower to Lender pursuant to Section 2.7 of this
Agreement with respect to a continuation or conversion of one or more Base Rate
Tranches or LIBOR Rate Tranches.
"Notice of Rate Tranche Selection" means a notice substantially in the form of
EXHIBIT C hereto delivered by Borrower to Lender pursuant to Section 2.5 of this
Agreement with respect to the creation of Base Rate Tranches or LIBOR Rate
Tranches.
"Permits" has the meaning set forth in Section 4.16(i) of this Agreement.
SECURED TERM
LOAN AGREEMENT 14
78
"Permitted Exceptions" means, with respect to each Real Property any easements,
rights of way, restrictions, reservations, conditions or covenants recorded or
filed in the real property records of each jurisdiction in which such Real
Property are located that do not (a) materially interfere with the occupation,
use and enjoyment of such Real Property by the Person owning such Real Property
or (b) materially impair the value of the Real Property subject thereto.
"Permitted Indebtedness" means (a) the Liabilities; and (b) Non-Recourse Debt
that is secured by a first (1st) mortgage lien on the Real Property Assets of
the Borrower or Co-Borrower other than the Real Properties.
"Person" means any natural person, corporation, limited liability company,
limited partnership, general partnership, joint stock company, joint venture,
association, company, trust, bank, trust company, land trust, business trust or
other organization, whether or not a legal entity, and any Governmental
Authority.
"Plan" means an employee benefit plan, other than a Multiemployer Plan,
maintained for or covering any employees of Borrower or any ERISA Affiliate and
subject to Title IV of ERISA.
"Property Expenses" means, when used with respect to any Mortgaged Property,
the costs of maintaining such Mortgaged Property which are the responsibility of
the owner thereof and that are not, pursuant to the terms of a binding lease,
the responsibility of the tenant thereof, taxes, insurance, repairs and
maintenance, but excluding depreciation, amortization, general corporate
administrative expenses and interest costs.
"Property Revenues" means, when used with respect to any Mortgaged Property,
cash rents and other cash revenues receivable in the ordinary course therefrom,
including, without limitation, lease termination fees amortized over the
remaining term of the lease for which such termination fee was received (other
than the paid rents and revenues and security deposits except to the extent
applied in satisfaction of tenants' obligations for rent), but excluding rent
that is more than sixty (60) days in arrears.
"Real Properties" means, collectively, the Borrower Real Properties and the
Co-Borrower Property.
"Real Property Assets" means, as of any time, the real property assets owned by
Borrower and Co-Borrower, including the Borrower Real Properties and the
Co-Borrower Property.
"Release Payment Amount" means, as of the date of determination, the portion of
the Loan allocated to each Mortgaged Property as set forth on SCHEDULE 5.4
attached hereto and made a part hereof.
SECURED TERM
LOAN AGREEMENT 15
79
"Repayment Amount" means, with respect to any Mortgaged Property to be released
pursuant to Section 5.4 of this Agreement, an amount equal to the greater of (a)
one hundred percent of the proceeds of any sale or refinancing of the Mortgaged
Property, less customary and reasonable costs and expenses incurred in
connection with such sale or refinance or (b) the Release Payment Amount for
such Mortgaged Property.
"Requirements of Law" means, as to any Person, any law, treaty, rule or
regulation, or judgment, order, directive or other determination of any
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its properties or to which such Person
or any of its property is subject.
"Responsible Officer" means the president, an executive vice president, vice
president or treasurer of Borrower or Co-Borrower, as the case may be.
"Restricted Payment" means, collectively, (a) every dividend or other
distribution of assets, properties, cash, rights, obligations or securities
paid, made, declared or authorized by Borrower in respect of any of its member
interests, or any class of member interests or equity securities, or for the
benefit of holders of any thereof in their capacity as such status, (b) every
payment by or for the account of any of its Affiliates or Subsidiaries in
connection with the redemption, purchase, retirement, defeasance or other
acquisition of any member interests or other equity securities of Borrower or
any options, warrants or other rights to acquire any of Borrower's interests or
other equity securities, (c) every payment (i) of principal, interest, fees or
other amounts in respect of any Indebtedness of Borrower to any Affiliate of
Borrower or (ii) in respect of the redemption, purchase, retirement, defeasance
or other acquisition from an Affiliate or Subsidiary of Borrower of any
Indebtedness of Borrower, (d) every direct or indirect investment by Borrower
(by means of capital contribution, advance, loan or otherwise) in an Affiliate
or Subsidiary or any Person which becomes an Affiliate or Subsidiary after or as
a result of such investment and (e) every payment by or for the account of
Borrower or of its Affiliates or Subsidiaries in connection with the redemption,
purchase, retirement, defeasance or other acquisition for value, directly or
indirectly, prior to any scheduled maturity, scheduled repayment or scheduled
sinking fund payment, of Indebtedness which is subordinate in right of payment
to the Loan or the Note.
"Security Documents" means, with respect to each Mortgaged Property,
collectively, the Mortgage and the Financing Statements delivered by Borrower or
Co-Borrower in favor of Lender with respect to such Mortgaged Property.
"Solvent" means, after giving effect to Section 2.3(d)(viii) of this Agreement,
with respect to any Person on a particular date, that on such date (a) the fair
value of the property of such Person is greater than the total amount of
liabilities, including, without limitation, contingent liabilities, of such
Person (whether or not required to be reflected on a balance sheet prepared in
accordance with GAAP), (b) the present fair salable value of the assets of such
Person is not less than the
SECURED TERM
LOAN AGREEMENT 16
80
amount that will be required to pay the probable liability of such Person on its
debts as they become absolute and matured, (c) such Person is able to realize
upon its assets and pay its debts and other liabilities, contingent obligations
and other commitments as they mature in the normal course of business, (d) such
Person does not intend to, and does not believe that it will, incur debts or
liabilities beyond such Person's ability to pay as such debts and liabilities
mature, and (e) such Person is not engaged in business or a transaction for
which such Person's property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the industry in which
such Person is engaged. In computing the amount of contingent liabilities at any
time, it is intended that such liabilities will be computed at the amount which,
in light of all the facts and circumstances existing at such time, represents
the amount that can reasonably be expected to become an actual or matured
liability.
"Subsidiary" means any corporation or other entity of which securities or other
ownership interests representing either (i) ordinary voting power to elect a
majority of the board of directors or other persons performing similar functions
or (ii) a majority of the economic interest therein, are at the time directly or
indirectly owned by Borrower.
"Survey" means a survey (prepared in accordance with the ALTA-ASCM standards
adopted in 1999, together with Table A items 1, 2, 3, 4, 6, 7, 8, 9, 10, 11, 13,
14 and 15 for each Mortgaged Property, prepared and certified to Lender, or
re-certified to Lender, on a date not earlier than twelve (12) months prior to
the Closing Date (or Maturity Date, if delivered pursuant to Section 5.3 of the
Agreement), by a land surveyor duly licensed in the state in which such
Mortgaged Property is located.
"Tangible Net Worth" means, at any time of determination, an amount equal to
Total Asset Value minus Total Liabilities.
"Title Company" means, with respect to each Mortgaged Property, a title
insurance company of recognized national standing.
"Title Commitment" means, for each Mortgaged Property, a commitment for a Title
Policy, naming Lender as the proposed insured and dated no more than one (1)
month prior to the Closing Date (or the Maturity Date, if delivered pursuant to
Section 5.3 of this Agreement).
"Title Policy" means, with respect to each Mortgaged Property, an ALTA
Mortgagee's Title Policy (Form B - 1970 Amended 10-17-70) issued by the Title
Company to Lender or, if such form is not available in the state in which the
Mortgaged Property is located, then such other form as is approved by Lender and
its counsel, and, in any case, issued by the Title Company to Lender.
"Total Asset Value" means, as of the date of determination, the sum (without
duplication of any item) of (a) the Gross Asset Value and (b) unrestricted cash
and Cash Equivalents owned by
SECURED TERM
LOAN AGREEMENT 17
81
Borrower or any Consolidated Subsidiary as of the most recently ended Fiscal
Quarter (but excluding any tenant deposits).
"Total Liabilities" means (without duplication) all Debt of Borrower and each
Consolidated Subsidiary.
"Treasury Rate" means, as of any date, a rate equal to the annual yield to
maturity on the U.S. Treasury Constant Maturity Series with a ten (10)-year
maturity, as such yield is reported in Federal Reserve Statistical Release H.15
-- Selected Interest Rates, published most recently prior to the date the
applicable Treasury Rate is being determined. Such yield shall be determined by
straight line linear interpolation between the yields reported in Release H.15,
if necessary. In the event Release H.15 is no longer published, Lender shall
select, in its reasonable discretion, an alternate basis for the determination
of Treasury yield for U.S. Treasury Constant Maturity Series with ten (10)-year
maturities.
"UCC Search" means a search no more than one (1) month old as at the date of
determination by a Person satisfactory to Lender, of the Uniform Commercial Code
filings which may have been filed in each location where any Common Shares owned
by Borrower are held or where Borrower or any Guarantor does business or is
domiciled.
SECURED TERM
LOAN AGREEMENT 18
82
EXHIBIT B
Form of Note
NOTE
$24,250,000.00 ______________, ________
May __, 2000
For value received, NET 2 L.P., a Delaware limited partnership
("Borrower") and NET 2 PLYMOUTH LLC, a Delaware limited liability company
("Co-Borrower") jointly and severally promise to pay to the order of KEYBANK
NATIONAL ASSOCIATION, a national banking association, its successors and assigns
("Bank"), the unpaid principal amount of the Loan made by Bank to Borrower and
Co-Borrower pursuant to the Loan Agreement (defined below) on the Maturity Date.
Borrower and Co-Borrower jointly and severally promise to pay interest on the
unpaid principal amount of the Loan on the dates and at the rate or rates
provided for in the Loan Agreement. All such payments of principal and interest
shall be made in lawful money of the United States in federal or other
immediately available funds at the office of Bank set forth in the Loan
Agreement.
All Base Rate Tranches (as defined in the Loan Agreement) and LIBOR
Rate Tranches (as defined in the Loan Agreement), the respective maturities
thereof and all repayments of the principal thereof shall be recorded by Bank
and, if Bank so elects in connection with any transfer or enforcement hereof,
appropriate notations to evidence the foregoing information with respect to each
such tranche then outstanding may be endorsed by Bank on the schedule attached
hereto, or on a continuation of such schedule attached to and made a part
hereof; provided that the failure of Bank to make any such recordation or
endorsement shall not affect the obligations of Borrower or Co-Borrower
hereunder or under the Loan Agreement.
This Note is the Note referred to in the Secured Term Loan Agreement
dated as of May __, 2000, by and among the Borrower, Co-Borrower and Bank (as
the same may be amended, modified, restated, extended or substituted from time
to time, the "Loan Agreement"). Terms defined in the Loan Agreement are used
herein with the same meanings. Reference is
FORM OF NOTE 1
83
made to the Loan Agreement for provisions for the payment and prepayment hereof
and the acceleration of the maturity hereof.
NET 2 L.P., a Delaware limited partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its general partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation, its general partner
By:
Print
Name:
Title:
NET 2 PLYMOUTH LLC, a Delaware
limited liability company
BY: NET PLYMOUTH, INC., a Delaware
corporation, its managing member
By:
Print
Name:
Title:
FORM OF NOTE 2
84
Note (cont'd)
BASE RATE/LIBOR RATE TRANCHES
Amount of
Amount of Type of Principal
Date Tranche Tranche Repaid Maturity Date Notation Made By
FORM OF NOTE 3
85
EXHIBIT C
FORM OF NOTICE OF RATE TRANCHE SELECTION
KeyBank National Association
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attn:_________________
NET 2 L.P. (the "Borrower") hereby requests the creation of a [BASE
RATE TRANCHE] [LIBOR RATE TRANCHE] pursuant to Section 2.5 of the Secured Term
Loan Agreement, dated as of May __, 2000 (as amended, modified, restated,
extended or substituted from time to time, the "Loan Agreement") by and among
Borrower, Net 2 Plymouth LLC, as Co-Borrower, and you as Lender.
A [BASE RATE TRANCHE] [LIBOR RATE TRANCHE] is requested to be made in
the amount of $_________________, to be made on __________ 2000. [IF A LIBOR
RATE TRANCHE IS SELECTED, THEN ADD: THE INITIAL INTEREST PERIOD FOR SUCH LIBOR
RATE TRANCHE SHOULD BE: (ONE (1) MONTH/THREE (3) MONTHS.)]
In support of this request, Borrower, on behalf of itself and
Co-Borrower, hereby represents and warrants to Lender that:
1. The representations and warranties contained in the Loan Agreement
and in the other Loan Documents are true and correct in all material respects on
and as of the date hereof, and will be true and correct in all material respects
on the date such [BASE RATE TRANCHE] [LIBOR RATE TRANCHE] is created (both
before and after such tranche is created) as if such representations and
warranties were made on and as of such dates unless stated to relate to a
specific earlier date.
2. No Event of Default or Default has occurred and is continuing or
will exist on the date such [BASE RATE TRANCHE] [LIBOR RATE TRANCHE] is created
and such [BASE RATE TRANCHE] [LIBOR RATE TRANCHE] shall not cause an Event of
Default or Default.
3. The Compliance Certificate attached hereto and the computations
contained therein are true and correct.
Capitalized terms used but not defined herein shall have the respective
meanings assigned to them in the Loan Agreement.
FORM OF NOTICE OF
RATE TRANCHE SELECTION 1
86
Very truly yours,
NET 2 L.P., a Delaware limited
partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its
general partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation,
its general partner
Dated: _______________, 2000 By: ________________________
Print
Name: __________________
Title: _________________
FORM OF NOTICE OF
RATE TRANCHE SELECTION 2
87
EXHIBIT D
FORM OF NOTICE OF CONTINUATION/CONVERSION
To: KeyBank National Association
Date: _______________, 2000
Subject: Secured Term Loan Agreement dated as of May __, 2000 (the "Loan
Agreement"), by and among Net 2 L.P., as Borrower ("Borrower"), Net 2
Plymouth LLC, as Co-Borrower ("Co-Borrower"), and KeyBank National
Association, as Lender ("Lender").
Ladies and Gentlemen:
Each term in this Notice of Continuation/Conversion shall be defined in
accordance with the Loan Agreement. Pursuant to the Loan Agreement, we request:
( ) Lender to convert the LIBOR Rate Tranches (or portion thereof)
[made] [converted] [continued] on __________________, 20___, in the
original aggregate principal sum of $_____________, on ______________,
20____, into [Base Rate Tranches] [LIBOR Rate Tranches to have an
Interest Period of [ONE (1) MONTH OR THREE (3) MONTHS] from the date
thereof].
( ) Lender to convert the LIBOR Rate Tranches (or portion thereof)
[made] [converted] on ___________________, 20___, in the original
aggregate principal sum of $______________, on ______________, 20___,
into LIBOR Rate Tranches to have an Interest Period of [ONE (1) MONTH
OR THREE (3) MONTHS] from the date thereof.
( ) Lender to continue the LIBOR Rate Tranches (or portion thereof)
[made] [converted] [continued] on __________________, 20___, with a one
(1) month or three (3) months Interest Period in the original aggregate
principal sum of $_____________, as LIBOR Rate Tranches having an
Interest Period of the same duration commencing on
_____________________, 20___.
The undersigned represents and warrants that this request is made in
compliance with Section 2.7 of the Loan Agreement.
The undersigned hereby certifies, on behalf of itself and Co-Borrower,
that:
FORM OF NOTICE OF
CONTINUATION/CONVERSION 1
88
(a) The representations and warranties contained in the Loan Agreement
and in the other Loan Documents are true and correct in all respects on and as
of the date of the rate conversion or rate continuation referred to herein with
the same effect as though made on and as of such date, except to the extent such
representations and warranties expressly relate to an earlier date;
(b) No Default or Event of Default has occurred and is continuing, and
at the time of, and immediately after, the rate conversion or rate continuation
referred to herein, no Default or Event of Default shall have occurred and be
continuing; and
(c) The Borrower and Co-Borrower are in compliance with all other terms
and provisions set forth in the Loan Agreement and in each of the other Loan
Documents on its part to be observed or performed.
Very truly yours,
NET 2 L.P., a Delaware limited partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its general partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation, its general
partner
By:
Print
Name:
Title:
FORM OF NOTICE OF
CONTINUATION/CONVERSION 2
89
EXHIBIT E
ORGANIZATIONAL STRUCTURE AND RELATED MATTERS
90
NET 2 L.P.
[NET 2 L.P. FLOWCHART]
91
EXHIBIT F
LEASE SCHEDULE
Lease Commencement
Property Address Lessor Date Date Term
-------- ------------------- ------- ---------- ------------ -----------------
1) A-Copy ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Net 2 L.P. 12/23/1994 12/23/1994 1/1/95-12/31/04
▇▇▇▇▇▇▇, ▇▇
▇) Ameritech ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ Net 2 L.P. 12/20/1990 06/01/1990 6/1/90-3/31/05
Columbus, OH
3) Everest & ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Net 2 L.P. 03/19/1992 05/18/1992 5/18/92-8/17/02
Earth City, MO
4) Hollywood Entertainment ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Net 2 L.P. 10/17/97 05/01/1998 5/1/98-9/30/08
Wilsonville, OR
5) ▇▇▇▇▇▇▇ Controls ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Net 2 12/23/1996 12/23/1996 12/23/96-12/22/06
Plymouth, MI Plymouth LLC
6) ▇▇▇▇▇ Cable Systems ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ Net 2 L.P. 09/28/1990 10/01/1990 10/1/90-9/30/10
Tucson, AZ
7) Stone Container ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ Net 2 L.P. 12/16/1982 12/16/1982 8/1/96-8/30/12
Columbia, SC
8) Tranzonic ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ Net 2 L.P. 02/27/1989 02/27/1989 2/27/89-2/28/09
Tempe, AZ
9) Tranzonic ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Net 2 L.P. 02/27/1989 02/27/1989 2/27/89-2/28/09
Highland Heights, OH
10) Wal-Mart ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ Net 2 L.P. 08/28/1983 08/31/1983 8/31/83-1/31/09
Jacksonville, AL
92
EXHIBIT G
LIST OF EXISTING ENVIRONMENTAL REPORTS
93
Environmental Schedule
Date of Phase I
Property Address last report or II
-------- ------- ----------- -------
1)A-Copy ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ 01/03/1996 I
Milford, CT
2)Ameritech ▇▇▇ ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ 05/14/1996 I
Columbus, OH
3)Everest & ▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ 04/02/1992 I
Earth City, MO
4)Hollywood Entertainment ▇▇▇▇ ▇▇ ▇▇▇▇▇▇ ▇▇▇▇ Oct-98 I
Wilsonville, OR
5)▇▇▇▇▇▇▇ Controls ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ 04/24/2000 I
Plymouth, MI
6)▇▇▇▇▇ Cable Systems ▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇ ▇
▇▇▇▇▇▇, ▇▇
7)Stone Container ▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇ ▇
▇▇▇▇▇▇▇▇, ▇▇
8)Tranzonic ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇ ▇
▇▇▇▇▇, ▇▇
9)Tranzonic ▇▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇/▇▇/▇▇▇▇ ▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇
10)Wal-Mart ▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ 04/24/1999 I
Jacksonville, AL
94
EXHIBIT H
ESTOPPEL CERTIFICATE AND AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT
THIS ESTOPPEL CERTIFICATE AND AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND ATTORNMENT ("Agreement") is made by and among
______________________, a(n) _______________________________ ("Lessee"), NET 2
L.P., a Delaware limited partnership ("Lessor") and KEYBANK NATIONAL
ASSOCIATION, a national banking association ("KeyBank"). All capitalized terms
used herein that are not defined herein shall have the meaning ascribed to such
terms in the Loan Agreement unless the context requires otherwise.
W I T N E S S E T H:
-------------------
WHEREAS, KeyBank, as Lender, Lessor, as Borrower, and Net 2 Plymouth
LLC, a Delaware limited liability company ("Co-Borrower"), as Co-Borrower, have
entered into that certain Secured Term Loan Agreement dated as of May ___, 2000
(as the same may from time to time be amended, modified, restated, extended or
substituted, the "Loan Agreement");
WHEREAS, the Loan Agreement obligates KeyBank to make a Loan in the
principal amount of Twenty-Four Million Two Hundred Fifty Thousand and 00/100
Dollars ($24,250,000.00), such Loan being evidenced by the Note from Lessor and
Co-Borrower to KeyBank dated as of May ___, 2000 (as the same may from time to
time be amended, modified, restated, extended or substituted, the "Note");
WHEREAS, the Note is secured by, among other things, a Mortgage [Deed
of Trust], Assignment of Leases and Rents, Security Agreement and Fixture Filing
dated _______________, recorded with the ______________ County, _____________
Recorder's Office (the "Recording Office") as Document No. ________________ (the
"Mortgage and Lease Assignment") granted by Lessor, in favor of KeyBank;
WHEREAS, Lessee has entered into that certain Lease with Lessor dated
as of ________________, ________, (as the same may hereafter be amended or
supplemented with KeyBank's consent, the "Lease"), pursuant to which Lessor did
lease, let, and demise the real property or portion of real property described
on EXHIBIT A attached hereto and made a part hereof all as more particularly
described in the Lease (the "Premises");
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 1
95
WHEREAS, Lessee acknowledges and agrees to the Mortgage and Lease
Assignment, and more particularly, the covenants and agreements of Lessor set
forth therein; and
WHEREAS, the parties hereto desire to establish additional rights of
quiet and peaceful possession for the benefit of Lessee, and further to define
the covenants, terms, and conditions precedent to such additional rights.
NOW, THEREFORE, in consideration of the covenants, terms, conditions,
agreements, and demises herein contained, and in consideration of other good and
valuable consideration, each to the other, the sufficiency and receipt of which
are hereby acknowledged, the parties hereto agree, covenant, and warrant as
follows:
1. Subordination of Lease. The Lease is and shall be subject and
subordinate to the Mortgage and Lease Assignment, and to all renewals,
modifications, consolidations, replacements, and extensions thereof.
2. Non-Disturbance of Lessee. Subject to the observance and performance
by Lessee of all of the covenants, terms and conditions of the Lease, KeyBank
hereby covenants that in the event KeyBank obtains title to the Premises, either
by foreclosure or by deed in lieu of foreclosure, and thereafter obtains the
right of possession of the Premises, that the Lease will continue in full force
and effect, and KeyBank shall recognize the Lease and the Lessee's rights
thereunder.
3. Attornment. Lessee shall attorn to (a) KeyBank when in possession of
the Premises; (b) a receiver appointed in an action or proceeding to foreclose
the Mortgage and Lease Assignment; or (c) to any party acquiring title to the
Premises, and shall execute and deliver upon request an appropriate agreement of
attornment thereunder. Lessee waives all joinder and/or service of any and all
foreclosure actions by KeyBank under the Note and Mortgage and Lease Assignment
and of any actions of law by KeyBank to gain possession of the Premises. It
shall not be necessary, except as required by law, for KeyBank to name Lessee as
a party to enforce its rights under the Note or Mortgage and Lease Assignment,
or any other Loan Document collateralizing the Loan, or to prosecute any action
at law to gain possession of the Premises, and, unless required by law, KeyBank
agrees not to name Lessee in any such proceeding.
4. No Merger of Estates. In the event Lessee acquires any title or
interest in the Premises subject to the Lease, there shall be no merger of the
estates of the Lessor and Lessee, and the Lease and Lessee's obligations
thereunder shall continue in full force and effect.
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 2
96
5. Notice of Defaults/Termination; Right of Lessee to Cure. Lessee
agrees to give KeyBank by registered or certified mail, return receipt requested
as provided in Section 8 hereof, (a) a copy of any notice of default served upon
Lessor, (b) notice of any acts or matters on which Lessee may claim or predicate
a default by Lessor under the Lease or (c) notice of any termination or proposed
termination of the Lease. In the case of any notice of default, such notice of
default shall specify the nature and extent of all defaults then existing. No
notice of the matters described in this Section 5 given by Lessee to the Lessor
shall be legally effective unless a copy of such notice shall have been given by
Lessee as required in the preceding sentence to KeyBank. Lessee further agrees
that if Lessor shall have failed to cure any default within the time period
provided for in the Lease, then KeyBank shall have the right, but not the
obligation, to perform any term, covenant, condition or agreement and to cure
such default as set forth in the Lease (and Lessee shall accept such performance
by KeyBank with the same force and effect as if performed by Lessor), within (x)
in the case of a monetary default, the five (5)-day period following the
expiration of ▇▇▇▇▇▇'▇ ▇▇▇▇▇ period applicable to the default as provided in the
Lease, or, if no cure period is specified in the Lease for such monetary
defaults, then within the five (5)-day period following KeyBank's notice of such
monetary default, or (y) in the case of a non-monetary default, the thirty
(30)-day period following the expiration of the ▇▇▇▇▇▇'▇ ▇▇▇▇▇ period applicable
to such default as provided in the Lease, or, if no cure period is specified in
the Lease for such non-monetary default, then within the thirty (30)-day period
following KeyBank's notice of such non-monetary default; provided, however, if
such non-monetary default cannot be cured within such thirty (30)-day period
then KeyBank shall have such additional time as may be necessary if, within such
thirty (30)-day period, KeyBank has commenced and is diligently pursuing the
remedies necessary to cure such default, in which event the Lease shall not be
terminated while such remedies are being so diligently pursued.
6. Modification of Lease. Lessee hereby covenants and agrees that
Lessee shall not, without the express written consent of KeyBank in its sole
discretion, (a) amend, modify or waive the provisions of the Lease, in any
material respect, or (b) reduce the rents under, or shorten the term of, the
Lease.
7. Certifications of Lessee. Lessee hereby certifies and represents to
KeyBank:
(a) that the Lease attached to this Agreement has not been modified,
changed, altered or amended in any respect and is the only and entire lease or
agreement between the Lessee and the Lessor affecting the Premises; and that the
Lease is valid and in full force and effect; provided, however, the parties
agree that the Lease shall not be attached to the copy of this Agreement
recorded at the Recording Office;
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 3
97
(b) that the Lessee is in possession of the Premises leased under the
Lease; that all improvements required to be constructed by Lessor under the
Lease are complete and have been accepted by Lessee;
(c) that the commencement date of the Lease was ______________________,
_____ and the expiration date is _____________________, ___;
(d) that neither Lessee nor Lessor is currently in default under the
Lease, nor has any event occurred that will constitute a default after notice
and/or the lapse of any applicable grace period, and that Lessee has no charge,
lien or claim of offset under the Lease or otherwise against rents or other
charges due or to become due thereunder;
(e) that the current rent due under the Lease is ______________ and
date of last payment ________________________ was _____________________; and
that no rent has been paid more than thirty (30) days in advance;
(f) that Lessee has made no agreements with Lessor its agents or
employees concerning free rent, partial, rent, rebate or rental payments or any
other type of rental concession other than as set forth in the Lease; that
Lessee's interest in the Lease has not been assigned and the Premises have not
been sublet; and
(g) that there is no action, suit or proceeding pending against Lessee
which questions the validity of the Lease or which would adversely affect
Lessee's ability to perform its obligations under the Lease; and that no
actions, whether voluntary or otherwise, are pending against Lessee under the
bankruptcy laws of the United States or any state thereof.
8. Notices. Any notices hereunder shall be effective upon mailing by
certified mail, return receipt requested, addressed as follows:
To KeyBank: With a copy to:
KeyBank National Association ▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
Attention: CRES Manager ▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Phone: (▇▇▇ ) ▇▇▇-▇▇▇▇ Phone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇ ) ▇▇▇-▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 4
98
To Lessee: With a copy to:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Attention: ___________________ Attention: ___________________
Phone: ( ) _____________ Phone: ( )______________
Facsimile: ( ) _____________ Facsimile: ( )______________
To Lessor: With a copy to:
______________________________ ______________________________
______________________________ ______________________________
______________________________ ______________________________
Attention: ___________________ Attention: ___________________
Phone: ( ) _____________ Phone: ( )______________
Facsimile: ( ) _____________ Facsimile: ( )______________
or as to each party, to such other address as the party may designate by a
notice given in accordance with the requirements contained in this Section 8.
9. Miscellaneous.
(a) This Agreement contains the entire agreement among the parties
hereto with respect to the subject matter hereof. No variations, modifications
or changes herein or hereof shall be binding upon any party hereto unless set
forth in a document duly executed by or on behalf of such party.
(b) This instrument may be executed in multiple counterparts, all of
which shall be deemed originals and with the same effect as if all parties
hereto had signed the same document. All of such counterparts shall be construed
together and shall constitute one instrument, but in making proof, it shall only
be necessary to produce one such counterpart.
(c) Whenever used herein, the singular number shall include the plural,
the plural the singular, and the use of any gender shall include all genders.
The words, "KeyBank", "Lessor" and "Lessee" shall include their successors and
assigns.
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 5
99
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
signed, sealed and delivered in their respective names and in their behalf; and,
if a corporation or other entity, by its officers or other parties duly
authorized, as of the date stated above.
Witnessed by (as to both signatures): LESSEE:
[INSERT LESSEE'S NAME]
By:
Print Print
Name: Name:
Title:
By:
By:
Print Print
Name: Name:
Title:
LESSOR:
NET 2 L.P., a Delaware limited
partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its
general partner
BY: LEPERCQ NET 2 INC.,
Print a Delaware corporation, its
Name: general partner
By:
Print Print
Name: Name:
Title:
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 6
100
KEYBANK:
KEYBANK NATIONAL ASSOCIATION,
a national banking association
By:
Print Print
Name: Name:
Title:
Print
Name:
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 7
101
STATE OF __________________)
) SS:
COUNTY OF _________________)
BEFORE ME, a Notary Public in and for said County and State, personally
appeared ___________________________, its ____________________________ and
____________________________, its ____________________________ of [INSERT
LESSEE'S NAME], a(n) _________________________________________________ , the
________________________________ which executed the foregoing instrument, who
acknowledged that they did sign said instrument as such officers of said
corporation for and on behalf of said corporation and that the same is their own
free act and deed individually, as such officers of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal at ____________________, ___________, this _____ day of
________________, 2000.
[SEAL]
_________________________________
NOTARY PUBLIC
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 8
102
STATE OF _____________________)
) SS:
COUNTY OF ____________________)
BEFORE ME, a Notary Public in and for said County and State, personally
appeared ___________________________, its ____________________________ and
____________________________, its ____________________________ of NET 2 L.P., a
Delaware limited partnership, who acknowledged that they did sign said
instrument as such officers of said corporation for and on behalf of said
corporation and that the same is their own free act and deed individually, as
such officers of said corporation.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed my
official seal at ____________________, ___________, this _____ day of
________________, 2000.
[SEAL] _______________________________
Notary Public
My Commission Expires:__________
ESTOPPEL CERTIFICATE AND
AGREEMENT OF SUBORDINATION,
NON-DISTURBANCE AND
ATTORNMENT 9
103
STATE OF OHIO )
) ss
COUNTY OF CUYAHOGA )
BEFORE ME, a Notary Public in and for said County and State, personally
appeared ______________, the _____________of KeyBank National Association, a
national banking association, the bank which executed the foregoing instrument,
who acknowledged that he/she did sign said instrument as such officer of said
bank for and on behalf of said bank and that the same is his/her own free act
and deed individually, as such officer of said bank, and the free act and deed
of said bank.
IN TESTIMONY WHEREOF, I have hereunto subscribed my name and affixed
my official seal at Cleveland, Ohio, this ___ day of ________ , 2000.
[SEAL]
________________________________
NOTARY PUBLIC
This instrument prepared by:
▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esq.
▇▇▇▇▇▇▇▇ ▇▇▇▇ & ▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
10
104
EXHIBIT I
SOLVENCY CERTIFICATE
This Certificate is made and delivered to KeyBank National Association,
in connection with (a) the Secured Term Loan Agreement dated as of May ___, 2000
(the "Loan Agreement") among Net 2 L.P., a Delaware limited partnership, as
Borrower ("Borrower"), Net 2 Plymouth LLC, a Delaware limited liability company,
as Co-Borrower ("Co-Borrower") and KeyBank National Association, as Lender
("Lender"), and (b) the Note and all other agreements, documents and instruments
executed and delivered pursuant to such Loan Agreement by the Borrower and
Co-Borrower (collectively, the "Loan Documents," and the Loan Documents, the
Loan thereunder and all other transactions contemplated pursuant thereto
collectively referred to as the "Transactions"). Except as otherwise expressly
provided herein, terms used but not defined herein shall have the meanings
ascribed thereto in the Loan Agreement.
Pursuant to the Loan Agreement, and acting solely in my capacity as an
officer of Borrower and not in my individual capacity, I hereby certify to the
Lender as follows:
1. I am the duly elected, qualified and acting chief financial officer
of Borrower, and I have been responsible for acting on behalf of the Borrower in
connection with the negotiation and consummation of the Loan Documents. In
connection with these negotiations, I have been responsible for, among other
things, reviewing the affairs of the Borrower.
2. I have further, for purposes hereof, reviewed the assets and
liabilities of the Borrower. In particular:
A. I have reviewed the financial statements referred to in
Section 6.1 of the Loan Agreement.
B. With respect to contingent and off-balance sheet
liabilities included in the liabilities of the Borrower, I have
consulted with the appropriate officers and employees of the Borrower
and outside counsel of the Borrower concerning pending and threatened
litigation and other contingent liabilities of the Borrower.
On the basis of the review and analysis described above, I have
concluded that, after giving effect to the Transactions:
I. (a) (i) the fair value of the assets of the Borrower, on a
consolidated basis, at a fair valuation, will exceed the debts and liabilities,
subordinated, contingent or otherwise, of the Borrower, on a consolidated basis;
(ii) the Borrower and its Subsidiaries on a consolidated basis will be able to
pay their debts and liabilities, subordinated, contingent or otherwise, as such
debts and liabilities become absolute and matured; and (iii) the Borrower and
its Subsidiaries on a consolidated basis will not have unreasonably small
capital with which to conduct the businesses in which they are engaged as such
businesses are now conducted and are proposed to be conducted after the date
hereof.
SOLVENCY CERTIFICATE 1
105
(b) Borrower does not intend to, or to permit any of its Subsidiaries
to, and does not believe that it or any of its Subsidiaries will, incur debts
beyond its ability to pay such debts as they mature, taking into account the
timing of and amounts of cash to be received by it or any such Subsidiary and
the timing of the amounts of cash to be payable on or in respect of its Debt or
the Debt of any such Subsidiary.
II. To the best of my knowledge, Borrower has not executed any Loan
Document or any documents mentioned therein or made any transfer or incurred any
obligation thereunder or in connection therewith with actual intent to hinder,
defraud or delay either present or future creditors.
EXECUTED AND DELIVERED ON _________________, 2000.
__________________________
Print
Name: ____________________
Title: ___________________
SOLVENCY CERTIFICATE 2
106
EXHIBIT J
FORM OF ASSIGNMENT AND ASSUMPTION
AGREEMENT dated as of May ___, 2000 among KEYBANK NATIONAL ASSOCIATION,
a national banking association ("Assignor"), [ASSIGNEE] (the "Assignee"), NET 2
L.P., a Delaware limited partnership ("Borrower") and NET 2 PLYMOUTH LLC, a
Delaware limited liability company ("Co-Borrower").
W I T N E S S E T H:
- - - - - - - - - -
WHEREAS, this Assignment and Assumption Agreement (the "Assignment")
relates to the Secured Term Loan Agreement dated as of May ___, 2000 (the "Loan
Agreement") among the Borrower, the Co-Borrower, and the Assignor, as Lender.
WHEREAS, as provided under the Loan Agreement, the Assignor has made
the Loan to the Borrower in the principal amount of Twenty-Four Million Two
Hundred Fifty Thousand and 00/100 ($24,250,000.00); and
WHEREAS, the Assignor proposes to assign to the Assignee all of the
rights of the Assignor under the Loan Agreement in respect of a portion of the
Loan thereunder in an amount equal to $______________ (the "Assigned Amount"),
together with a corresponding portion of the Loan, and the Assignee proposes to
accept assignment of such rights and assume the corresponding obligations from
the Assignor on such terms.
NOW, THEREFORE, in consideration of the foregoing and the mutual
agreements contained herein, the parties hereto agree as follows:
SECTION 1. Definitions. All capitalized terms not otherwise defined
herein shall have the respective meanings set forth in the Loan Agreement.
SECTION 2. Assignment. The Assignor hereby assigns and sells to the
Assignee all of the rights of the Assignor under the Loan Agreement to the
extent of the Assigned Amount, and the Assignee hereby accepts such assignment
from the Assignor and assumes all of the obligations of the Assignor under the
Loan Agreement to the extent of the Assigned Amount, including the purchase from
the Assignor of the corresponding portion of the principal amount of the Loan
made by the Assignor outstanding at the date hereof. Upon the execution and
delivery hereof by the Assignor, the Assignee, the Borrower and the Co-Borrower
and the payment of the amounts specified in Section 3 required to be paid on the
date hereof (i) the Assignee shall, as of the date hereof, succeed to the rights
and be obligated to perform the obligations of the Assignor under the Loan
Agreement with a portion of the Loan in an amount equal to the Assigned Amount,
and (ii) the principal amount of the Loan of the Assignor shall as of the date
hereof, be reduced by a like amount and the Assignor released from its
obligations under the Loan Agreement to the extent such obligations have been
assumed by the Assignee. The assignment provided for herein shall be without
recourse to the Assignor.
FORM OF ASSIGNMENT
AND ASSUMPTION 1
107
SECTION 3. Payments. As consideration for the assignment and sale
contemplated in Section 2 hereof, the Assignee shall pay to the Assignor on the
date hereof in federal funds the amount heretofore agreed between them.(1) It is
understood that Extension Fees accrued to the date hereof are for the account of
the Assignor and such fees accruing from and including the date hereof are for
the account of the Assignee. Each of the Assignor and the Assignee hereby agrees
that if it receives any amount under the Loan Agreement which is for the account
of the other party hereto, it shall receive the same for the account of such
other party to the extent of such other party's interest therein and shall
promptly pay the same to such other party.
SECTION 4. Approval of Borrower. This Agreement is conditioned upon the
written approval of Borrower pursuant to Section 10.1 of the Loan Agreement. The
execution of this Agreement by the Borrower and is evidence of the required
approval. Pursuant to the Loan Agreement, the Borrower and Co-Borrower agree to
execute and deliver, if required, a new Note payable to the order of the
Assignee to evidence the assignment and assumption provided for herein, and the
Assignor agrees to cause any replaced Note to be surrendered to the Borrower.
SECTION 5. Non-Reliance on Assignor. The Assignor makes no
representation or warranty in connection with, and shall have no responsibility
with respect to, the solvency, financial condition, or statements of the
Borrower or Co-Borrower, or the validity and enforceability of the obligations
of the Borrower or Co-Borrower in respect of the Loan Agreement or any Note. The
Assignee acknowledges that it has, independently and without reliance on the
Assignor, and based on such documents and information as it has deemed
appropriate, made its own credit analysis and decision to enter into this
Agreement and will continue to be responsible for making its own independent
appraisal of the business, affairs and financial condition of the Borrower.
SECTION 6. GOVERNING LAW. THIS AGREEMENT AND THE RIGHTS AND OBLIGATIONS
OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE CONSTRUED IN ACCORDANCE WITH
AND BE GOVERNED BY THE LAWS OF THE STATE OF OHIO (WITHOUT GIVING EFFECT TO THE
PRINCIPLES THEREOF RELATING TO CONFLICTS OF LAW).
----------
(1)The amount should combine principal together with accrued interest
and breakage compensation, if any, to be paid by the Assignee, net of any
portion of any upfront fee to be paid by the Assignor to the Assignee. It may be
preferable in an appropriate case to specify these amounts generically or by
formula rather than as a fixed sum.
FORM OF ASSIGNMENT
AND ASSUMPTION 2
108
SECTION 7. Counterparts. This Agreement may be signed in any number of
counterparts, each of which shall be an original, with the same effect as if the
signatures thereto and hereto were upon the same instrument.
IN WITNESS WHEREOF, the parties have caused this Agreement to be
executed and delivered by their duly authorized officers as of the date first
above written.
ASSIGNOR:
KEYBANK NATIONAL ASSOCIATION,
By:
Print
Name:
Title:
ASSIGNEE:
[INSERT NAME OF ASSIGNEE]
By:
Print
Name:
Title:
BORROWER:
NET 2 L.P., a Delaware limited partnership
BY: LEPERCQ NET 2 L.P., a Delaware
limited partnership, its general partner
BY: LEPERCQ NET 2 INC.,
a Delaware corporation, its general
partner
By:
Print
Name:
Title:
FORM OF ASSIGNMENT
AND ASSUMPTION 3
109
EXHIBIT K
BORROWER REAL PROPERTIES
110
SCHEDULE 5.4 - RELEASE PAYMENT AMOUNTS
NET 2 LIMITED PARTNERSHIP
BORROWING BASE PROPERTIES Release
Tenant Payments
------ --------
Tranzonic Corp $4,712,071
Tranzonic Corp $1,250,849
▇▇▇▇▇ Cable Systems (RCS) $2,372,073
Ikon Office Solutions $2,244,868
Ameritech $1,671,332
Wal-Mart $ 973,083
Stone Container $3,180,677
▇▇▇▇▇▇▇ Controls $4,944,041
Hollywood Entertainment $8,963,506
NON-COLLATERAL PROPERTY
Everest & ▇▇▇▇▇▇▇▇ $2,006,250