EXHIBIT 10.40
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CREDIT AGREEMENT
by and among
FOREST CITY RENTAL PROPERTIES CORPORATION
as Borrower
and
VARIOUS LENDING INSTITUTIONS
as Banks
and
KEYBANK NATIONAL ASSOCIATION
as Administrative Agent for the Banks
and
NATIONAL CITY BANK
as Syndication Agent for the Banks
Dated as of March 22, 2004
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TABLE OF CONTENTS
Article Page
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ARTICLE I DEFINITIONS ........................................................................................ 1
ARTICLE II REVOLVING LOANS ................................................................................... 12
SECTION 2.01. AMOUNT OF THE REVOLVING LOAN FACILITY ..................................................... 12
SECTION 2.02. REVOLVING LOAN COMMITMENTS ................................................................ 13
SECTION 2.03. REVOLVING LOANS ........................................................................... 13
SECTION 2.04. PURPOSE OF THE REVOLVING LOANS ............................................................ 13
SECTION 2.05. REVOLVING LOAN NOTES ...................................................................... 13
SECTION 2.06. REPAYMENT OF THE NOTES .................................................................... 14
ARTICLE III LETTERS OF CREDIT ................................................................................ 14
SECTION 3.01. LETTERS OF CREDIT .............................................................................. 14
ARTICLE IV INTEREST ON THE REVOLVING LOANS ................................................................... 15
SECTION 4.01(a). INTEREST OPTIONS ....................................................................... 15
SECTION 4.01(b). LIBOR RATE OPTION ...................................................................... 16
SECTION 4.01(c). BASE RATE OPTION ....................................................................... 16
SECTION 4.01(d). INDICATED SPREAD ....................................................................... 16
SECTION 4.02. INTEREST PERIODS .......................................................................... 17
SECTION 4.03. INTEREST PAYMENT DATES .................................................................... 17
SECTION 4.04. INTEREST CALCULATIONS ..................................................................... 17
SECTION 4.05. POST-DEFAULT RATE ......................................................................... 17
SECTION 4.06. RESERVES OR DEPOSIT REQUIREMENTS, ETC ..................................................... 18
SECTION 4.07. TAX LAW, ETC .............................................................................. 18
SECTION 4.08. INDEMNITY ................................................................................. 19
SECTION 4.09. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE UNASCERTAINABLE .......................... 19
SECTION 4.10. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL ............................................. 19
SECTION 4.11. FUNDING ................................................................................... 20
ARTICLE V AGREEMENTS AND CONDITIONS APPLICABLE TO ALL REVOLVING LOANS ........................................ 20
SECTION 5.01. NOTICE OF BORROWING ....................................................................... 20
SECTION 5.02. DISBURSEMENT OF FUNDS ..................................................................... 21
SECTION 5.03. CONDITIONS TO LOANS ....................................................................... 21
SECTION 5.04. PAYMENT ON NOTES, ETC ..................................................................... 22
SECTION 5.05. PREPAYMENT ................................................................................ 22
SECTION 5.06. UNUSED COMMITMENT FEES .................................................................... 23
SECTION 5.07. MODIFICATION OF THE TOTAL REVOLVING LOAN COMMITMENTS ...................................... 23
SECTION 5.08. EXTENSIONS OF THE LOANS ................................................................... 24
(i)
ARTICLE VI CONDITIONS PRECEDENT .............................................................................. 24
SECTION 6.01. CORPORATE AND LOAN DOCUMENTS .............................................................. 25
SECTION 6.02. OPINION OF COUNSEL FOR PARENT ............................................................. 26
SECTION 6.03. JUDGMENT, ORDERS .......................................................................... 26
SECTION 6.04. LITIGATION ................................................................................ 26
SECTION 6.05. NOTICE OF BORROWING ....................................................................... 26
SECTION 6.06. OPINION OF COUNSEL FOR BORROWER ........................................................... 26
SECTION 6.07. PAYMENT OF FEES ........................................................................... 26
SECTION 6.08. ADVERSE CHANGE, ETC ....................................................................... 26
SECTION 6.09. TERMINATION OF ORIGINAL CREDIT AGREEMENT .................................................. 26
SECTION 6.10. EVIDENCE OF INSURANCE ..................................................................... 27
ARTICLE VII AFFIRMATIVE COVENANTS ............................................................................ 27
SECTION 7.01. PAYMENT OF AMOUNTS DUE .................................................................... 27
SECTION 7.02. EXISTENCE, BUSINESS, ETC .................................................................. 27
SECTION 7.03. MAINTENANCE OF PROPERTIES ................................................................. 27
SECTION 7.04. PAYMENT OF TAXES, ETC ..................................................................... 27
SECTION 7.05. FINANCIAL STATEMENTS ...................................................................... 27
SECTION 7.06. INSPECTION ................................................................................ 29
SECTION 7.07. ENVIRONMENTAL COMPLIANCE .................................................................. 29
SECTION 7.08. ERISA ..................................................................................... 29
SECTION 7.09. INSURANCE ................................................................................. 30
SECTION 7.10. MONEY OBLIGATIONS ......................................................................... 31
SECTION 7.11. RECORDS ................................................................................... 31
SECTION 7.12. FRANCHISES ................................................................................ 31
SECTION 7.13. NOTICE .................................................................................... 31
SECTION 7.14. POST CLOSING ITEMS ........................................................................ 32
SECTION 7.15. FURTHER ASSURANCES; REPLACEMENT NOTES ..................................................... 32
SECTION 7.16. NOTICE OF DEFAULT OR LITIGATION ........................................................... 32
SECTION 7.17. USE OF PROCEEDS ........................................................................... 32
ARTICLE VIII NEGATIVE COVENANTS .............................................................................. 32
SECTION 8.01. PLAN ...................................................................................... 32
SECTION 8.02. COMBINATIONS .............................................................................. 32
SECTION 8.03. BULK TRANSFERS ............................................................................ 33
SECTION 8.04. BORROWINGS ................................................................................ 33
SECTION 8.05. LIENS ..................................................................................... 34
SECTION 8.06. LOANS RECEIVABLE .......................................................................... 35
SECTION 8.07. GUARANTEES ................................................................................ 35
SECTION 8.08. AMENDMENT OF ARTICLES OF INCORPORATION AND/OR REGULATIONS ................................. 36
SECTION 8.09. FISCAL YEAR ............................................................................... 36
SECTION 8.10. REGULATION U .............................................................................. 36
SECTION 8.11. NO PLEDGE ................................................................................. 36
SECTION 8.12. TRANSACTIONS WITH AFFILIATES .............................................................. 37
SECTION 8.13. DEBT SERVICE COVERAGE RATIO ............................................................... 37
(ii)
SECTION 8.14(a). RESTRICTIONS ON DISTRIBUTIONS DURING AN EVENT OF DEFAULT OTHER THAN A PAYMENT DEFAULT .. 37
SECTION 8.14(b). RESTRICTIONS ON DISTRIBUTIONS DURING A PAYMENT DEFAULT ................................. 37
SECTION 8.15. CROSS COLLATERALIZATION AND CROSS DEFAULTS ................................................ 38
SECTION 8.16. SENIOR NOTES .............................................................................. 38
SECTION 8.17 CHANGES IN BUSINESS ........................................................................ 39
ARTICLE IX REPRESENTATIONS AND WARRANTIES .................................................................... 39
SECTION 9.01. EXISTENCE ................................................................................. 39
SECTION 9.02. RIGHT TO ACT .............................................................................. 39
SECTION 9.03. BINDING EFFECT ............................................................................ 39
SECTION 9.04. LITIGATION ................................................................................ 39
SECTION 9.05. EMPLOYEE RETIREMENT INCOME SECURITY ACT ................................................... 40
SECTION 9.06. ENVIRONMENTAL COMPLIANCE .................................................................. 40
SECTION 9.07. SOLVENCY .................................................................................. 40
SECTION 9.08. FINANCIAL STATEMENTS ...................................................................... 40
SECTION 9.09. DEFAULTS .................................................................................. 41
SECTION 9.10. OPERATIONS ................................................................................ 41
SECTION 9.11. TITLE TO PROPERTIES; PATENTS, TRADE MARKS, ETC ............................................ 41
SECTION 9.12. COMPLIANCE WITH OTHER INSTRUMENTS ......................................................... 41
SECTION 9.13. MATERIAL RESTRICTIONS ..................................................................... 41
SECTION 9.14. CORRECTNESS OF DATA FURNISHED ............................................................. 42
SECTION 9.15. TAXES ..................................................................................... 42
SECTION 9.16. COMPLIANCE WITH LAWS ...................................................................... 42
SECTION 9.17. REGULATION U, ETC ......................................................................... 42
SECTION 9.18. HOLDING COMPANY ACT ....................................................................... 43
SECTION 9.19. SECURITIES ACT, ETC ....................................................................... 43
SECTION 9.20. INVESTMENT COMPANY ACT .................................................................... 43
SECTION 9.21. INDEBTEDNESS OF SUBSIDIARIES .............................................................. 43
SECTION 9.22. GUARANTIES ................................................................................ 43
SECTION 9.23. INDEBTEDNESS .............................................................................. 43
ARTICLE X EVENTS OF DEFAULT .................................................................................. 44
SECTION 10.01. PAYMENTS ................................................................................. 44
SECTION 10.02. COVENANTS ................................................................................ 44
SECTION 10.03. REPRESENTATIONS AND WARRANTIES ........................................................... 44
SECTION 10.04. CROSS DEFAULT ............................................................................ 44
SECTION 10.05. TERMINATION OF PLAN ...................................................................... 44
SECTION 10.06. DOMESTIC SUBSIDIARY SOLVENCY ............................................................. 45
SECTION 10.07. BORROWER'S SOLVENCY ...................................................................... 45
SECTION 10.08. CHANGE OF OWNERSHIP; CHANGE OF MANAGEMENT EVENT .......................................... 45
(iii)
SECTION 10.09. JUDGMENTS ................................................................................ 46
SECTION 10.10. DEFAULT UNDER GUARANTY OR SENIOR NOTES ................................................... 46
SECTION 10.11. DEFAULT UNDER SUBORDINATION AGREEMENT ................................................... 46
ARTICLE XI REMEDIES UPON DEFAULT ............................................................................. 46
SECTION 11.01. OPTIONAL DEFAULTS ........................................................................ 46
SECTION 11.02. AUTOMATIC DEFAULTS ....................................................................... 46
SECTION 11.03. REMEDIES RELATING TO LETTERS OF CREDIT ................................................... 47
SECTION 11.04. OFFSETS .................................................................................. 47
SECTION 11.05. APPLICATION OF PAYMENTS .................................................................. 47
ARTICLE XII THE AGENT ........................................................................................ 47
SECTION 12.01. APPOINTMENT AND AUTHORIZATION ............................................................ 47
SECTION 12.02. DELEGATION OF DUTIES ..................................................................... 48
SECTION 12.03. LIABILITY OF AGENT ....................................................................... 48
SECTION 12.04. RELIANCE BY AGENT ........................................................................ 49
SECTION 12.05. RESIGNATION OR REMOVAL OF THE AGENT; SUCCESSOR AGENT ..................................... 49
SECTION 12.06. NOTE HOLDERS ............................................................................. 50
SECTION 12.07. CONSULTATION WITH COUNSEL ................................................................ 50
SECTION 12.08. DOCUMENTS ................................................................................ 50
SECTION 12.09. KNOWLEDGE OF DEFAULT ..................................................................... 50
SECTION 12.10. INDEMNIFICATION .......................................................................... 51
SECTION 12.11. AGENTS IN THEIR INDIVIDUAL CAPACITIES .................................................... 51
SECTION 12.13. EQUALIZATION PROVISION ................................................................... 52
ARTICLE XIII MISCELLANEOUS ................................................................................... 52
SECTION 13.01. NO WAIVER; CUMULATIVE REMEDIES ........................................................... 52
SECTION 13.02. AMENDMENTS, CONSENTS ..................................................................... 52
SECTION 13.03. NOTICES .................................................................................. 53
SECTION 13.04. COSTS, EXPENSES AND TAXES ................................................................ 53
SECTION 13.05. SURVIVAL OF REPRESENTATIONS AND WARRANTIES ............................................... 54
SECTION 13.06. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS ............................................ 54
SECTION 13.07. EXECUTION IN COUNTERPARTS ................................................................ 54
SECTION 13.08. BINDING EFFECT; ASSIGNMENT ............................................................... 54
SECTION 13.09. INDEMNIFICATION BY THE BORROWER .......................................................... 56
SECTION 13.10. GOVERNING LAW ............................................................................ 56
SECTION 13.11. SEVERABILITY OF PROVISIONS; CAPTIONS ..................................................... 56
SECTION 13.12. PURPOSE .................................................................................. 56
SECTION 13.13. CONSENT TO JURISDICTION .................................................................. 56
SECTION 13.14. ENTIRE AGREEMENT ......................................................................... 56
SECTION 13.15. JURY TRIAL WAIVER ........................................................................ 57
SECTION 13.16. SURVIVAL ................................................................................. 57
(iv)
SECTION 13.17. INDEPENDENCE OF COVENANTS ................................................................ 57
SECTION 13.18. INTERPRETATION ........................................................................... 57
EXHIBITS
A COMMITMENTS
B FORM OF GUARANTY
C [RESERVED]
D FORM OF REVOLVING LOAN NOTE
E FORM OF LETTER OF CREDIT REQUEST
F FORM OF NOTICE OF BORROWING
G FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
SCHEDULES
2.03 AUTHORIZED FISCAL OFFICERS
3.01 OUTSTANDING LETTERS OF CREDIT
7.05 FORM COVENANT COMPLIANCE WORKSHEET
7.14 POST-CLOSING ITEM
8.15 PERMITTED INDEBTEDNESS
9.00 EXCEPTIONS TO REPRESENTATIONS AND WARRANTIES
9.16 COMPLIANCE WITH LAWS
9.22 OUTSTANDING GUARANTEES
9.23 OUTSTANDING INDEBTEDNESS
(v)
CREDIT AGREEMENT
Credit Agreement, effective as of March 22, 2004, between FOREST CITY
RENTAL PROPERTIES CORPORATION, an Ohio corporation (hereinafter sometimes called
the "Borrower"), the banking institutions from time to time party hereto
(hereinafter sometimes collectively called the "Banks" and individually a
"Bank"), KEYBANK NATIONAL ASSOCIATION, Cleveland, Ohio, as Administrative Agent
for the Banks under this Agreement (the "Agent") and NATIONAL CITY BANK,
Cleveland, Ohio, as Syndication Agent for the Banks under this Agreement (the
"Syndication Agent").
W I T N E S S E T H:
WHEREAS, the Borrower has requested the Banks to make available to it a
revolving loan facility in the original principal amount of $400,000,000, with a
possible increase of $50,000,000, subject to the terms and conditions set forth
herein, for a total principal amount of $450,000,000; and
WHEREAS, the Banks are willing to make such revolving loan facility
available to the Borrower upon the terms and subject to the conditions set forth
herein.
NOW, THEREFORE, it is mutually agreed as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the following
meanings:
"ADDITIONAL BANK" shall mean a financial institution that shall become a
Bank hereunder during the Commitment Increase Period pursuant to Section 5.07(a)
hereof.
"ADDITIONAL BANK ASSUMPTION AGREEMENT" shall mean an assumption agreement
in substantially the form of Exhibit C hereto entered into by any Additional
Bank pursuant to Section 5.07(a) hereof, wherein an Additional Bank shall become
a Bank hereunder.
"ADDITIONAL BANK ASSUMPTION EFFECTIVE DATE" shall have the meaning set
forth in Section 5.07(a) hereof.
"ADDITIONAL COMMITMENTS" shall have the meaning set forth in Section
5.07(a) hereof.
"ADVANTAGE" shall mean any payment (whether made voluntarily or
involuntarily, by offset of any deposit or other Indebtedness or otherwise)
received by any Bank in respect of Borrower's Debt to the Banks if such payment
results in that Bank having a lesser share of Borrower's Debt to the Banks, than
was the case immediately before such payment.
"AFFILIATE" of any Person means any other Person directly or indirectly
controlling or controlled by or under direct or indirect common control with
such Person. For purposes of this
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definition, "control" when used with respect to any Person means the power to
direct the management and policies of such Person, directly or indirectly,
whether through the ownership of voting securities, by contract or otherwise;
and the terms "controlling" and "controlled" have meanings correlative to the
foregoing.
"AGENT" means KeyBank National Association, in its capacity as
administrative agent for the Banks hereunder, and its successors in such
capacity.
"AGENTS" means collectively, the Agent and the Syndication Agent.
"AGREEMENT" means this Credit Agreement as the same may be from time to
time amended, supplemented, modified, extended and/or restated.
"AUTHORIZED FISCAL OFFICER" shall have the meaning set forth in Section
2.03(b) hereof.
"BASE RATE" shall mean a rate per annum equal to the greater of (a) that
interest rate established from time to time by the Agent at its principal office
as the Agent's prime rate, whether or not such rate is publicly announced or (b)
the Federal Funds Effective Rate plus 1/2 of 1% (.50%) per annum. The prime rate
may be other than the lowest interest rate charged by the Agent for commercial
or other extensions of credit.
"BASE RATE OPTION" means interest determined pursuant to Section 4.01(c)
and related provisions hereof.
"BOARD OF DIRECTORS" shall mean either the board of directors of the
Parent or any duly constituted committee thereof.
"BORROWER" means Forest City Rental Properties Corporation, an Ohio
corporation.
"CAPITAL STOCK" of any Person shall mean any and all shares, interests,
participations, or other equivalents (however designated) of corporate stock or
other equity participations or interests including, without limitation,
partnership interests, whether general or limited, and membership interests,
whether of managing or non-managing members, of such Person.
"CHANGE OF MANAGEMENT EVENT" shall be deemed to have occurred at such time
as any two (2) of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ and
▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ become unable or cease to hold the respective positions held by
such persons on the date of this Agreement, with all the responsibilities
normally associated with such positions, provided, that, no Change of Management
Event shall be deemed to have occurred if within one hundred twenty (120) days
the Borrower shall have obtained the reasonable approval of the Required Banks,
in their sole discretion, of one or more additional executives, such that the
remaining and new management executives as a group, have substantial and
sufficient knowledge, experience and capabilities in the management of a company
engaged in the operation of a multi-asset real estate business of the type
engaged in by the Borrower.
"CHANGE OF OWNERSHIP EVENT" shall be deemed to have occurred at such time
as either (a) any Person (other than a Permitted Holder) or any Persons acting
together that would constitute a "group" (a "Group") for purposes of Section
13(d) of the Exchange Act or any
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successor provision thereto (other than Permitted Holders), together with any
Affiliates or Related Persons thereof, shall beneficially own (within the
meaning of Rule 13d-3 under the Exchange Act, or any successor provision
thereto) at least 30% of the aggregate voting power of all classes of Voting
Stock of the Parent; or (b) any Person or Group (other than Permitted Holders),
together with any Affiliates or Related Persons thereof, shall succeed in having
a sufficient number of its nominees elected to the Board of Directors of the
Parent such that such nominees, when added to any existing director remaining on
the Board of Directors of the Parent after such election who was a nominee of or
is an Affiliate or Related Person of such Person or Group, will constitute a
majority of the Board of Directors of the Parent; or (c) the Permitted Holders
referenced in clause (i) of the definition of "Permitted Holder" shall cease to
own at least 51% of the aggregate issued and outstanding shares of the Voting
Stock of the Parent; or (d) the Parent shall cease to own at least one hundred
percent (100%) on a fully diluted basis, of the economic and voting interests of
the Borrower.
"CLEVELAND BANKING DAY" shall mean a day on which the main office of the
Agent is open for the transaction of business.
"CLOSING DATE" shall have the meaning set forth in Section 13.08 hereof.
"CLOSING DATE COMMITMENT AMOUNT" shall mean $400,000,000, or such other
amount as may be set forth on Exhibit A attached hereto as of the Closing Date,
up to a maximum amount of $450,000,000.
"CODE" means the Internal Revenue Code of 1986, as amended, or any
successor statute.
"COMMITMENT" shall mean the obligation of each Bank, during the applicable
Commitment Period, to make Revolving Loans in an aggregate amount not to exceed
the amount set forth opposite such Bank's name under the column headed "Maximum
Amount" on Exhibit A hereof (as such Exhibit A may be amended or otherwise
modified from time to time pursuant to Section 5.07(a) hereof), or such lesser
amount as shall be determined pursuant to Section 5.07(b) hereof.
"COMMITMENT INCREASE PERIOD" shall mean the period from the Closing Date
to the first anniversary date of the Closing Date, or such later date as shall
be agreed to in writing by the Agent.
"COMMITMENT PERIOD" shall mean (a) with respect to the Banks other than
the Additional Banks, the period from the Closing Date until the Termination
Date and (b) with respect to each Additional Bank, if any, the period from the
Additional Bank Assumption Effective Date applicable to such Additional Bank
until the Termination Date.
"COMMON STOCK" of any Person shall mean Capital Stock of such Person that
does not rank prior, as to the payment of dividends or as to other amounts upon
any voluntary or involuntary liquidation, dissolution, or winding up of such
Person, to shares of Capital Stock or any other class of stock of such Person.
"COMPLETION GUARANTY" shall mean any guarantee of performance by the
Borrower or the Parent, as applicable, that construction of a real estate
project will be completed in
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accordance with applicable plans and specifications and that all costs
associated with such completion will be paid, provided, that such costs may
include an interest reserve only through completion of the project and not
through stabilization of such project.
"CONTINGENT OBLIGATION" shall mean, with respect to any Person at the time
of any determination, without duplication, any obligation, contingent or
otherwise, of such Person guaranteeing or having the economic effect of
guaranteeing any Indebtedness of any other Person in any manner, whether
directly or otherwise; provided, that the term "Contingent Obligation" shall not
include endorsements for collection or deposit, in each case 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 Indebtedness in
respect of which such Contingent Obligation is made or, if not stated or
determinable, the maximum reasonable anticipated liability in respect thereof
(assuming such Person is required to perform thereunder).
"CONTROLLED GROUP" shall mean a controlled group of corporations as
defined in Section 1563 of the Code, of which the Borrower or any Subsidiary is
a part.
"DEBT" shall mean, collectively, all Indebtedness incurred by the Borrower
to the Banks pursuant to this Agreement, including, but not limited to, the
principal of and interest on all Notes and each extension, renewal or
refinancing thereof in whole or in part, the stated amounts of all letters of
credit issued by the Agent or the Banks hereunder, and the fees and any
prepayment premium payable hereunder.
"DEBT SERVICE COVERAGE RATIO" shall mean, for any Test Period, the ratio
of (i) Net Operating Income to (ii) the sum of (W) all scheduled principal
payments (excluding balloon payments) on non-recourse mortgage Indebtedness of
the Borrower and its Subsidiaries, plus (X) all interest payments on such
non-recourse mortgage Indebtedness, minus (Y) non-cash interest expense accrued
but not currently payable, up to a maximum of Five Million Dollars ($5,000,000),
excluding non-cash interest expense accrued with respect to Indebtedness owing
by the Borrower and its Subsidiaries to the government of the United States or
any state or municipality thereof or any agencies of any of the foregoing, minus
(Z) non-cash interest expense accrued but not currently payable solely with
respect to Indebtedness owing by the Borrower and its Subsidiaries to the
government of the United States or any state or municipality thereof or any
agencies of any of the foregoing.
"DISTRIBUTIONS" shall have the meaning set forth in Section 8.14 hereof.
"DIVIDENDS" shall mean all dividends (in cash or otherwise) declared
and/or paid, capital returned, and other distributions of any kind made on any
share of Capital Stock outstanding at any time.
"DOMESTIC SUBSIDIARY" shall mean any Subsidiary organized under the laws
of any state of the United States of America which conducts the major portion of
its business within the United States.
"DRAW" shall have the meaning set forth in Section 3.01(b) hereof.
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"ENVIRONMENTAL LAWS" shall mean all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or by any state or municipality thereof or by
any court, agency, instrumentality, regulatory authority or commission of any of
the foregoing, now or hereafter in effect, and in each case as amended,
concerning or relating to health, safety and protection of, or regulation of the
discharge of substances into, the environment.
"ERISA" shall mean the Employee Retirement Income Security Act of 1974, as
amended from time to time, and the regulations and rulings issued thereunder.
"ERISA AFFILIATE" shall mean each person (as defined in Section 3(9) of
ERISA) which together with the Borrower, the Parent or any Subsidiary of the
Borrower or any Subsidiary of the Parent would be deemed a "single employer"
within the meaning of Sections 414(b), (c), (m) or (o) of the Code.
"EVENT OF DEFAULT" shall have the meaning set forth in Article X hereof.
"EXCHANGE ACT" shall mean the Securities Exchange Act of 1934, as amended,
or any successor provision thereto.
"FEDERAL FUNDS EFFECTIVE RATE" shall mean, for any period, a fluctuating
interest rate equal for each day during such period to the weighted average of
the rates on overnight federal funds transactions with members of the Federal
Reserve System arranged by federal funds brokers, as published for such day (or,
if such day is not a Business Day, for the next preceding Business Day) by the
Federal Reserve Bank of Cleveland, or, if such rate is not so published for any
day which is a Business Day, the average of the quotations for such day on such
transactions received by the Agent from three federal funds brokers of
recognized standing selected by the Agent.
"FISCAL QUARTERLY DATE" shall mean each of January 31, April 30, July 31
and October 31.
"GAAP" shall mean generally accepted accounting principles in the United
States of America, in effect from time to time.
"GUARANTY" means the Guaranty of Payment of Debt issued by the Parent to
the Agent and the Banks, in substantially the form and substance of Exhibit B
attached hereto, as such Guaranty may be from time to time, amended, restated or
otherwise modified.
"GUARANTY DEFAULT" shall mean any one or more of the events constituting
defaults under Section 10 of the Guaranty.
"HEDGE AGREEMENT" shall mean any non-fully paid derivative, such as
interest rate swaps or collar agreements or other similar agreements or
arrangements designed to hedge the position of a Person with respect to interest
rates, excluding any such agreements as to which all of the obligations of such
Person are paid or payable within twelve (12) months of the date such agreement
is entered into by such Person.
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"INDEBTEDNESS" shall mean, with respect to any Person at the time of any
determination, without duplication, all obligations of such Person which in
accordance with GAAP should be classified upon the balance sheet of such Person
as liabilities, but in any event including: (a) all obligations of such Person
for borrowed money, (b) all obligations of such Person evidenced by bonds,
debentures, notes or other similar instruments, (c) all obligations of such
Person upon which interest charges are customarily paid or accrued, (d) all
written obligations of such Person to maintain working capital, equity capital
or other financial statement condition of another Person so as to enable such
other Person to pay its Indebtedness or otherwise to protect the holder of such
Indebtedness against loss in respect thereof, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services, (f)
all obligations of others secured by any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(g) all capitalized lease obligations of such Person, (h) all obligations of
such Person in respect of a Hedge Agreement, (i) all obligations of such Person,
actual or contingent, as an account party in respect of letters of credit or
bankers' acceptances, and, without duplication, all drafts drawn thereunder, and
(j) all obligations of any partnership or joint venture as to which such Person
is or may become personally liable, provided, that, Indebtedness shall not
include (i) any obligations incurred as a result of fraud, misappropriation,
misapplication and environmental indemnities, as are usual and customary in
commercial mortgage loan transactions, and (ii) trade payables, deferred
revenue, taxes and accrued expenses, in each case arising in the ordinary course
of business and that is due and payable less than twelve (12) months after the
date such debt was incurred.
"INDENTURE" shall mean the indenture dated as of May 19, 2003, between the
Parent and The Bank of New York, as indenture trustee and relating to the Senior
Notes.
"INDEMNITY AGREEMENT" shall mean any indemnity agreement, in form and
substance satisfactory to the Agents and the Banks, by and between the Parent
and a Surety, and as each such Indemnity Agreement may be amended, restated or
otherwise modified.
"INDICATED SPREAD" shall have the meaning set forth in Section 4.01(d)
hereof.
"INTEREST ADJUSTMENT DATE" shall mean the last day of each Interest
Period.
"INTEREST PERIOD" shall mean a period of one, two, three, six or nine
months or one year (as selected by the Borrower) commencing on the applicable
borrowing or conversion date of each Loan subject to the LIBOR Rate Option and
on the date that is one London Banking Day after each Interest Adjustment Date
occurring thereafter with respect thereto; provided, that if any such Interest
Period would be affected by a reduction in the Total Revolving Loan Commitments
as provided in Section 5.07(b) hereof, prepayment rights as provided in Section
5.05 hereof or the maturity of the Loans as provided in Section 2.06 hereof,
such Interest Period shall, without affecting the Borrower's obligations, if
any, to pay to the Banks, the prepayment premium set forth in Section 5.05
hereof, be shortened to end on the date of such reduction, prepayment or
maturity. Notwithstanding anything to the contrary contained above:
(i) if any Interest Period begins on a day for which there is no
numerically corresponding day in the calendar month at the end of such
Interest Period, such Interest Period shall end on the last London Banking
Day of such calendar month;
-6-
(ii) if any Interest Period would otherwise expire on a day which is
not a London Banking Day, such Interest Period shall expire on the next
succeeding London Banking Day, provided, that if any Interest Period would
otherwise expire on a day which is not a London Banking Day but is a day
of the month after which no further London Banking Day occurs in such
month, such Interest Period shall expire on the next preceding London
Banking Day;
(iii) no Interest Period may be selected at any time that an Event
of Default has occurred and is continuing;
(iv) no Interest Period may be selected if it would extend beyond
the scheduled maturity date or principal repayment date(s) of the Loans to
which it would apply; and
(v) no Interest Period may be selected if it would extend beyond the
Termination Date.
"LAST LIBOR" shall have the meaning set forth in Section 5.05(b) hereof.
"LC OBLIGATIONS" shall mean the aggregate amount of all possible drawings
under all letters of credit issued pursuant to Section 3.01 hereof and all
letters of credit identified on Schedule 3.01 hereof (which are letters of
credit issued under the Original Credit Agreement that remain outstanding on the
date hereof), plus all amounts drawn under any of such letters of credit and not
reimbursed.
"LIBOR" shall mean the average (rounded upward to the nearest 1/16th of
1%) of the per annum rates at which deposits in immediately available funds in
United States dollars for the relevant Interest Period and in the amount of the
principal of the Loans to be disbursed or to remain outstanding during such
Interest Period, as the case may be, are offered to the Reference Banks by prime
banks in any Eurodollar market reasonably selected by the Reference Banks,
determined as of 11:00 a.m. London time (or as soon thereafter as practicable),
two (2) London Banking Days prior to the beginning of the relevant Interest
Period. In the event one or more of the Reference Banks fail to furnish its
quote of any rate required herein, such rate shall be determined on the basis of
the quote or quotes of the remaining Reference Bank or Banks.
"LIBOR RATE OPTION" means interest determined pursuant to Section 4.01(b)
and related provisions hereof.
"LIEN" shall mean any mortgage, pledge, security interest, encumbrance,
lien or charge of any kind (including any agreement to give any of the
foregoing, any conditional sale or other title retention agreement, any
financing or similar statement or notice filed under the Uniform Commercial Code
or any similar notice or recording statute, and any lease having substantially
the same effect as any of the foregoing).
"LOAN" means a Revolving Loan.
"LONDON BANKING DAY" shall mean a day on which banks are open for business
in London, England, and quoting deposit rates for dollar deposits.
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"MATERIAL ADVERSE EFFECT" shall mean (a) a material adverse effect on the
business, property, assets, liabilities, or condition (financial or otherwise)
of the Borrower or the Parent or (b) a material adverse effect on the rights or
remedies of the Banks or the Agents, or on the ability of the Borrower or the
Parent to perform its respective obligations to the Banks or the Agents under
this Agreement, the Notes, the Guaranty or the Related Writings.
"NET OPERATING INCOME" shall mean for any relevant period, the excess of
the Borrower's revenues over the Borrower's operating expenses, in each case, as
determined in accordance with the Pro Rata Consolidation Method. For purposes of
this definition, Net Operating Income (a) shall not include any gains or losses
from the sale of income producing real property, other than gains or losses
obtained from the sale of net outlot parcels to a total maximum aggregate amount
of $20,000,000 for the immediately preceding four consecutive quarters and (b)
shall include adjustments for cash flow of properties pursuant to which the
Borrower is receiving a preferred return over and above its ownership percentage
in such properties.
"NON-AFFILIATE CONSTRUCTION PROJECT" shall mean any real property and all
improvements to be constructed thereon (collectively, the "Non-Affiliate
Property") (a) with respect to which the Borrower or a Subsidiary of the
Borrower, as the case may be, (i) may make a Permitted Non-Affiliate Loan, and
(ii) is the developer pursuant to an agreement with a Non-Affiliated Entity as
owner of the Non-Affiliate Property; and (b) with respect to which the Borrower
or an Affiliate of the Borrower, as the case may be, holds an irrevocable option
from either the Non-Affiliated Entity or the parent of the Non-Affiliated Entity
to acquire, respectively, either (i) the Non-Affiliate Property, or (ii) all of
the equity interests owned by the parent of the Non-Affiliated Entity in and to
such Non-Affiliated Entity.
"NON-AFFILIATED ENTITY" shall mean any Person that is not an Affiliate of
the Borrower and that is wholly-owned by another Person.
"NOTE" or "NOTES" shall mean a note or notes substantially in the form of
Exhibit D attached hereto, executed and delivered by the Borrower pursuant to
Section 2.05 or 5.07 hereof, as applicable, and as each such Note may be, from
time to time, amended, restated or otherwise modified and all replacements
therefor.
"NOTICE OF BORROWING" shall have the meaning set forth in Section 5.01(a)
hereof.
"ORIGINAL CREDIT AGREEMENT" shall mean that certain Credit Agreement dated
as of March 5, 2002, as amended by that certain First Amendment to Credit
Agreement dated as of May 9, 2003, that certain Second Amendment to Credit
Agreement dated as of December 10, 2003 and that certain Third Amendment to
Credit Agreement dated as of January 30, 2004, by and among the Borrower,
KeyBank National Association, National City Bank, The Huntington National Bank,
Comerica Bank, First Merit Bank, Credit Lyonnais, Manufacturers and Traders
Trust Company, U.S. Bank National Association, Fifth Third Bank, Fleet National
Bank, LaSalle Bank, N.A. and The Provident Bank.
"PARENT" means Forest City Enterprises, Inc., an Ohio corporation.
-8-
"PAYMENT DEFAULT" shall mean any failure by the Borrower or the Parent to
make payment of principal, interest, or any other fees or expenses due, whether
at maturity or by acceleration, under this Agreement or the Guaranty.
"PBGC" means the Pension Benefit Guaranty Corporation established pursuant
to Section 4002 of ERISA, or any successor thereto.
"PERMITTED DEBT" shall have the meaning set forth in Section 8.04 hereof.
"PERMITTED DISTRIBUTIONS" shall have the meaning set forth in Section 8.14
hereof.
"PERMITTED HOLDER" shall mean (i) any of ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇.
▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or any spouse of
any of the foregoing, and any trusts for the benefit of any of the foregoing,
(ii) RMS Limited Partnership and any general partner or limited partner thereof
and any Person (other than a creditor) that upon the dissolution or winding up
of RMS Limited Partnership receives a distribution of Capital Stock of the
Parent, (iii) any group (as defined in Section 13(d) of the Exchange Act) of two
or more Persons or entities that are specified in the immediately preceding
clauses (i) and (ii), and (iv) any successive recombination of the Persons or
groups that are specified in the immediately preceding clauses (i), (ii) and
(iii).
"PERMITTED NON-AFFILIATE LOAN" shall mean a loan by the Borrower or any
Subsidiary of the Borrower to a Non-Affiliated Entity for the purposes of (a)
purchasing or otherwise acquiring a Non-Affiliate Property or (b) paying
construction costs, in each case, in connection with a Non-Affiliate
Construction Project.
"PERMITTED NON-AFFILIATE LOAN RESERVE" shall mean, as of any date of
determination, an amount equal to (a) twenty percent (20%) multiplied by (b) the
amount, if any, by which the aggregate amount of gain deferred for federal
income tax purposes on the consolidated return of the Parent and its
Subsidiaries in connection with all Non-Affiliate Construction Projects, for the
three year period ending on such determination date, exceeds Seventy-Five
Million Dollars ($75,000,000).
"PERSON" means an individual, a corporation, a limited liability company,
a partnership, an association, a trust or any other entity or organization,
including, without limitation, governmental or political subdivision or an
agency or instrumentality thereof.
"PLAN" shall mean any employee pension benefit plan subject to Title IV of
ERISA, established or maintained by the Borrower, any Subsidiary, or any member
of the Controlled Group, or any such Plan to which the Borrower, any Subsidiary,
or any member of the Controlled Group is required to contribute on behalf of any
of its employees.
"PLEDGED SUBSIDIARY" shall have the meaning set forth in Section 8.11(a)
hereof.
"POSSIBLE DEFAULT" shall mean any event, act or condition which with
notice or lapse of time, or both, would constitute an Event of Default.
"POST CLOSING ITEMS" shall have the meaning set forth in Section 7.14
hereof.
-9-
"PREPAYMENT LIBOR" shall have the meaning set forth in Section 5.05(b)
hereof.
"PREPAYMENT PREMIUM RATE" shall have the meaning set forth in Section
5.05(b) hereof.
"PRO RATA" when used with reference to the Banks means (unless the context
otherwise clearly indicates) pro rata according to the unpaid principal amounts
owing to the respective Banks under the Notes, or, if no principal is then owing
to any Bank, according to the Commitment of the respective Bank.
"PRO RATA CONSOLIDATION METHOD" shall mean the pro rata method of
consolidation as opposed to the full consolidation method of accounting.
"REFERENCE BANKS" shall mean KeyBank National Association and National
City Bank.
"REGULATORY CHANGE" shall mean, as to any Bank, any change in federal,
state or foreign laws or regulations or the adoption or making of any
interpretations, directives or requests of or under any federal, state or
foreign laws or regulations (whether or not having the force of law) by any
court or governmental authority charged with the interpretation or
administration thereof.
"RELATED PERSON" of any Person shall mean any other Person directly or
indirectly owning (a) 5% or more of the outstanding Common Stock of any class of
such Person (or, in the case of a Person that is not a corporation, 5% or more
of the equity interest in such Person), or (b) 5% or more of the combined voting
power of the Voting Stock of such Person.
"RELATED WRITING" shall mean any Note, assignment, mortgage, security
agreement, Subordination Agreement, guaranty agreement, financial statement,
audit report, officer's certificate or other writing furnished by the Borrower,
the Parent or any of their respective officers to the Agents or the Banks
pursuant to or otherwise in connection with this Agreement, including, but not
limited to, the Guaranty.
"REPORTABLE EVENT" shall mean a reportable event as that term is defined
in Title IV of ERISA with respect to a Plan as to which the 30-day notice
requirement has not been waived by the PBGC.
"REQUIRED BANKS" means at any time Banks having at least 66 2/3% of the
Total Revolving Loan Commitments or, if the Total Revolving Loan Commitments
shall have been terminated, Banks holding Notes evidencing at least 66 2/3% of
the aggregate unpaid principal amount of the Loans.
"REVOLVING LOANS" shall have the meaning set forth in Section 2.03(a).
"SATISFACTION DATE" shall have the meaning set forth in Section 7.14
hereof.
"SENIOR NOTES" shall mean the 2003 Senior Notes and the 2004 Senior Notes.
"SENIOR OFFICER" shall mean the chief executive officer, president or
chief financial officer of either the Parent or the Borrower, as applicable.
-10-
"SUBORDINATION AGREEMENT" means any subordination agreement in form and
substance satisfactory to the Agents and the Banks entered into by a Surety in
favor of the Agent for the benefit of the Banks, and as each such Subordination
Agreement may, from time to time, be amended, restated or otherwise modified.
"SUBSIDIARY" of any Person shall mean and include (i) any corporation more
than fifty percent (50%) of whose stock of any class or classes having by the
terms thereof ordinary voting power to elect a majority of the directors of such
corporation is at the time owned by such Person directly or indirectly through
Subsidiaries, (ii) any partnership, limited liability company, association
(including business trusts) or other entity in which such Person directly or
indirectly through Subsidiaries, has more than a fifty percent (50%) voting or
equity interest at the time and (iii) any corporation, limited liability
company, partnership, association or other entity the accounts of which are
consolidated with those of its parent in the parent's consolidated financial
statements.
"SUPER MAJORITY BANKS" shall have the meaning set forth in Section 13.02
hereof.
"SURETY" means any surety or insurance company reasonably acceptable to
the Agents.
"SURETY BONDS" means the bonds, undertakings and other like obligations
executed by a Surety for the Parent subject to an Indemnity Agreement and a
Subordination Agreement, in a maximum aggregate principal amount of $30,000,000
for all Sureties.
"SYNDICATION AGENT" means National City Bank, in its capacity as
syndication agent for the Banks hereunder, and its successors in such capacity.
"TERMINATION DATE" means March 22, 2007, unless extended by the Banks
pursuant to Section 5.08 of this Agreement, in which case the Termination Date
shall be the date of the expiration of any such extension, or, if terminated
earlier pursuant to Article XI of this Agreement, the Termination Date shall be
the date of such earlier termination.
"TEST PERIOD" shall mean each period of four consecutive fiscal quarters
of the Parent or the Borrower, as applicable, in each case taken as one
accounting period, ended after the Closing Date and commencing April 30, 2004.
"TOTAL REVOLVING LOAN COMMITMENTS" shall mean, as of any date of
determination, the sum of the Commitments of each of the Banks.
"2003 SENIOR NOTES" shall mean the senior notes of the Parent issued on
May 19, 2003, pursuant to the Indenture, in an original aggregate principal
amount of $300,000,000.
"2004 SENIOR NOTES" shall mean the senior notes of the Parent issued on
February 10, 2004, pursuant to the Indenture, in an aggregate principal amount
of up to $100,000,000.
"UNFUNDED CURRENT LIABILITIES" of any Plan shall mean the amount, if any,
by which the actuarial present value of the accumulated plan benefits under the
Plan as of the close of its most recent plan year, determined in accordance with
Statement of Financial Accounting Standards No. 35, based upon the actuarial
assumptions used by the Plan's actuary in the most
-11-
recent annual valuation of the Plan, exceeds the fair market value of the assets
allocable thereto, determined in accordance with Section 412 of the Code.
"VOTING STOCK" of any Person shall mean Capital Stock of such Person which
ordinarily has voting power for the election of directors (or persons performing
similar functions) of such Person, whether at all times or only so long as no
senior class of securities has such voting power by reason of any contingency.
Accounting Principles
Any accounting term not specifically defined in this Article I or
elsewhere in the Agreement, shall have the meaning ascribed thereto by GAAP not
inconsistent with the Borrower's present accounting procedures, provided, that,
if the Borrower notifies the Agent that the Borrower requests an amendment to
any provision hereof to eliminate the effect of any change occurring after the
Closing Date in GAAP or in the application thereof on the operation of such
provision (or if the Agent notifies the Borrower that the Required Lenders
request an amendment to any provision hereof for such purpose), regardless of
whether any such notice is given before or after such change in GAAP or in the
application thereof, then such provision shall be interpreted on the basis of
GAAP as in effect and applied immediately before such change shall have become
effective until such notice shall have been withdrawn or such provision amended
in accordance herewith. Notwithstanding the foregoing, the financial statements
to be furnished to the Banks pursuant hereto shall be made and prepared in
accordance with GAAP consistently applied throughout the periods involved
(except as set forth in the notes thereto or otherwise disclosed in writing by
the Borrower to the Banks), provided, that (a) all computations determining
compliance with Section 8.13, including definitions used therein, shall utilize
accounting principles based on the Pro Rata Consolidation Method as opposed to
the full consolidation method of accounting, (b) all computations determining
compliance with Article VIII, including definitions used therein, shall exclude
interest income received by the Borrower or any of its Subsidiaries with respect
to loans made by the Borrower or such Subsidiary pursuant to Section 8.06(d) of
this Agreement, unless such loans are funded with the proceeds from Revolving
Loans or the Senior Notes and (c) such financial statements must also include a
report (in the footnotes thereto or otherwise) of the financial results of the
Borrower using accounting principles based on the Pro Rata Consolidation Method.
The foregoing definitions shall be applicable to the singular and plurals
of the foregoing defined terms.
ARTICLE II
REVOLVING LOANS
The Banks hereby establish a revolving loan facility pursuant to which
Revolving Loans will be made to the Borrower, on and subject to the terms and
conditions set forth in this Agreement.
SECTION 2.01. AMOUNT OF THE REVOLVING LOAN FACILITY. The aggregate
principal amount of the Revolving Loans plus the LC Obligations outstanding from
time to time shall not exceed the Total Revolving Loan Commitments in effect at
the time. Notwithstanding anything to the contrary in this Agreement, no Bank
shall be obligated to make any Revolving
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Loans or issue any letter of credit if, after giving effect to such Revolving
Loans or LC Obligations, (a) such Bank's Pro rata share of all Revolving Loans
and LC Obligations then outstanding would exceed such Bank's Commitment or (b)
the aggregate amount of all Revolving Loans and LC Obligations then outstanding
plus the Permitted Non-Affiliate Loan Reserve would exceed the Total Revolving
Loan Commitments in effect at the time.
SECTION 2.02. REVOLVING LOAN COMMITMENTS. All Revolving Loans under this
Agreement shall be made by the Banks Pro rata on the basis of their Pro rata
share of the Total Revolving Loan Commitments. It is understood that no Bank
shall be responsible for any default by any other Bank of its obligation to make
Revolving Loans hereunder and that each Bank shall be obligated to make the
Revolving Loans to be made by it hereunder, regardless of the failure of any
other Bank to fulfill its commitments hereunder.
SECTION 2.03. REVOLVING LOANS. (a) Each Bank severally agrees, subject to
the fulfillment of the terms and conditions of this Agreement, to make revolving
loans (the "Revolving Loans") to the Borrower from time to time during the
applicable Commitment Period. Subject to the provisions of this Agreement, Loans
may be repaid in whole or in part, and amounts so repaid may be reborrowed, but
in no event shall the aggregate principal amount of each Bank's Revolving Loans
plus such Bank's Pro rata share of the LC Obligations exceed at any time the
then Commitment of such Bank.
(b) The requesting of a Loan in and of itself pursuant to a Notice of
Borrowing constitutes a representation and warranty by the Borrower to the Banks
and the Agents that the conditions specified in Section 5.01 hereof have been
satisfied. Each oral request for a Revolving Loan (which request shall be
promptly confirmed in writing as specified in Section 5.01 hereof) shall be made
by a person authorized by the Borrower to do so and designated on Schedule 2.03,
or as that Schedule may be amended from time to time in writing by the Borrower
(an "Authorized Fiscal Officer"), and the making of a Revolving Loan as provided
herein shall conclusively establish the Borrower's obligation to repay such
Revolving Loan.
SECTION 2.04. PURPOSE OF THE REVOLVING LOANS. The proceeds of Revolving
Loans shall be used by the Borrower to refinance existing Indebtedness, support
ongoing projects, purchase real estate and for working capital purposes of the
Borrower.
SECTION 2.05. REVOLVING LOAN NOTES. (a) On the Closing Date, the Borrower
shall execute and deliver to each of the Banks (other than the Additional Banks)
a Note with all blanks appropriately completed in conformity herewith.
(b) On each applicable Additional Bank Assumption Effective Date, the
Borrower shall execute and deliver to such Additional Bank a Note with all
blanks appropriately completed in conformity herewith.
(c) The Note issued to each Bank shall (i) be executed by the Borrower,
(ii) be payable to the order of such Bank and dated as of the Closing Date or
the Additional Bank Assumption Effective Date applicable to such Additional
Bank, as applicable (iii) be in a stated principal amount equal to the
Commitment of such Bank and payable in the principal amount of the Revolving
Loans evidenced thereby, (iv) mature on the Termination Date and (v) be entitled
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to the benefits of this Agreement and the other Related Writings. The Notes
shall be subject to the terms of this Agreement.
SECTION 2.06. REPAYMENT OF THE NOTES. The principal of the Notes shall be
due and payable in full on the Termination Date, unless such principal sums
shall become due earlier in whole or in part by reason of the principal amount
exceeding the Total Revolving Loan Commitments at any time in effect or pursuant
to the provisions of Article XI hereof.
ARTICLE III
LETTERS OF CREDIT
SECTION 3.01. LETTERS OF CREDIT. (a) The Banks agree to make available to
the Borrower letters of credit, issued by the Agent, pursuant to their
respective Commitments up to an aggregate amount at any one time outstanding of
$50,000,000 minus the aggregate principal amount of all then outstanding Surety
Bonds issued by a Surety on behalf of the Parent pursuant to an Indemnity
Agreement. The availability of letters of credit will be subject to (i) the
Agent being satisfied with the terms of the letter of credit, (ii) the
Borrower's executing and delivering such letter of credit and reimbursement
agreements and related documents as required by the Agent, and (iii) the
satisfaction of all conditions to the Borrower obtaining a Loan in the amount of
the requested letter of credit. The Borrower shall pay a fee for each letter of
credit to the Agent for the Pro rata benefit of the Banks, upon issuance of each
letter of credit and, thereafter, upon the annual anniversary of the issuance of
each such letter of credit remaining outstanding, in the amount of the Indicated
Spread for Revolving Loans under the LIBOR Rate Option on the stated amount of
the letter of credit; provided that, the Agent shall be entitled to .125% of
such fee prior to the distribution of the balance of such fee Pro rata to the
Banks. In addition, the Borrower shall pay to the Agent upon issuance of each
letter of credit provided for under this Section 3.01 an issuance fee of $500
for the Agent's services in issuing the letter of credit. No letter of credit
shall be issued having an expiration date after the Termination Date. All
letters of credit shall be in such form and substance as the Agent, the Banks
and the Borrower agree. The Borrower shall not be entitled to obtain letters of
credit from the Agent unless the Borrower is then entitled to obtain Loans from
the Banks in an amount not less than the stated amount of the letter of credit
requested, the other conditions of Section 5.01 of this Agreement have been
satisfied as if the Borrower was obtaining a Revolving Loan and the Borrower has
executed and delivered such letter of credit, reimbursement agreements and other
related documents as may be required by the Agent.
(b) In the event the Agent pays any amount under or on account of a letter
of credit (the payment by the Agent under or on account of a letter of credit
being herein called a "Draw"), a Revolving Loan shall be deemed to be made to
the Borrower by each Bank to the extent of its Pro rata share of the Total
Revolving Loan Commitments to reimburse immediately the Agent for the amount of
the Draw. The Agent shall notify each Bank of the occurrence and payment of a
Draw no later than 12:00 p.m. (Cleveland time) on the date of such notice and,
not later than 1:00 p.m. (Cleveland time) on the date of such notice, each Bank
will make available to the Agent its Pro rata portion of the Draw deemed to be a
Revolving Loan. All amounts shall be made available to the Agent in U.S. Dollars
and immediately available funds at its office listed on the signature pages
hereto. If such corresponding Pro rata amount is not in fact made available to
the Agent by such Bank the Agent shall be entitled to recover such corresponding
amount from such Bank. If such Bank does not pay such corresponding amount
forthwith upon
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the Agent's demand therefor, the Agent shall promptly notify the Borrower, and
the Borrower shall immediately pay such corresponding amount to the Agent. The
Agent shall also be entitled to recover from the Bank or the Borrower, as the
case may be, interest on such corresponding amount in respect of each day from
the date such corresponding amount was made available by the Agent to the
Borrower to the date such corresponding amount is recovered by the Agent at a
rate per annum equal to (i) if paid by such Bank, the overnight Federal Funds
Effective Rate or (ii) if paid by the Borrower, the then applicable rate of
interest, calculated in accordance with Article IV, for the Revolving Loans. In
the event no Revolving Loan or only a partial Revolving Loan is deemed to be
made, the Agent is hereby authorized to charge (without prior notice to the
Borrower) the amount of each Draw, together with interest thereon, against any
account of the Borrower maintained with the Agent.
(c) So long as letters of credit are outstanding, the amount of Revolving
Loans that the Borrower is entitled to obtain under Article II shall be reduced
by the LC Obligations then outstanding and, in addition to otherwise
constituting part of the Revolving Loans, except as otherwise expressly stated
herein, the stated amount of the letters of credit shall be treated as principal
of the Revolving Loans.
(d) Whenever the Borrower desires that a letter of credit be issued, the
Borrower shall give the Agent written notice (including by way of facsimile
transmission) thereof prior to 1:00 p.m. (Cleveland time) at least five
Cleveland Banking Days (or such shorter period as may be acceptable to the
Agent) prior to the proposed date of issuance (which shall be a Cleveland
Banking Day), which written notice shall be in the form of Exhibit E hereto
(each, a "Letter of Credit Request"). Each Letter of Credit Request shall
include an application for such letter of credit and any other documents that
the Agent customarily requires in connection therewith. The Agent shall promptly
notify each Bank of each Letter of Credit Request.
(e) The delivery of each Letter of Credit Request shall be deemed a
representation and warranty by the Borrower that such letter of credit as
requested in such Letter of Credit Request may be issued in accordance with and
will not violate the requirements of this Section 3.01 and shall include a
representation and warranty as to the aggregate principal amount of all then
outstanding Surety Bonds. The Agent shall, on the date of each issuance of or
amendment or modification to a letter of credit by it, give each Bank and the
Borrower written notice of the issuance of or amendment or modification to such
letter of credit.
(f) In determining whether to pay under any letter of credit, the Agent
shall not have any obligation relative to the Banks other than to determine that
any documents required to be delivered under such letter of credit have been
delivered and that they appear to comply on their face with the requirements of
the letter of credit. Any action taken or omitted to be taken by the Agent with
respect to a letter of credit issued by it if taken or omitted in the absence of
gross negligence or willful misconduct, shall not create any resulting liability
for the Agent.
ARTICLE IV
INTEREST ON THE REVOLVING LOANS
SECTION 4.01(a). INTEREST OPTIONS. The Borrower shall pay interest on the
Revolving Loans at the rates in effect from time to time pursuant to the
Interest Options provided for in Sections 4.01(b) and 4.01(c) as selected by the
Borrower or otherwise in effect from time
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to time in accordance with the terms and conditions of this Agreement. Interest
on the Revolving Loans shall accrue from and including the date of borrowing
thereof to but excluding the date of repayment thereof.
SECTION 4.01(b). LIBOR RATE OPTION. Interest on the principal amount of
each Revolving Loan at any time subject to the interest rate option provided for
pursuant to this Section 4.01(b) (the "LIBOR Rate Option") shall be at a rate
determined by adding the applicable LIBOR rate at the time in effect for each
Interest Period for such Revolving Loan and the applicable Indicated Spread for
the LIBOR Rate Option set forth in Section 4.01(d) below. The LIBOR Rate Option
shall be in effect for all portions of the principal of the Revolving Loans for
which the Borrower has selected an Interest Period in accordance with Section
4.02 hereof, unless and until any event or circumstance provided for in Sections
4.09 or 4.10 hereof shall have occurred and continue to be in effect or an Event
of Default has occurred and is continuing.
SECTION 4.01(c). BASE RATE OPTION. Interest on the principal amount of all
Revolving Loans at any time subject to the interest rate option provided for
pursuant to this Section 4.01(c) (the "Base Rate Option") shall be at rates
determined by adding the Base Rate in effect from time to time and the
applicable Indicated Spread for the Base Rate Option set forth in Section
4.01(d) below. The interest rate in effect under the Base Rate Option shall
change automatically and immediately with each change in the Base Rate. The Base
Rate Option shall be in effect for all portions of the principal of the
Revolving Loans for which the LIBOR Rate Option is not in effect at any time.
SECTION 4.01(d). INDICATED SPREAD. The Indicated Spread is measured in
basis points and shall be determined as follows:
Revolving Loans
Period Indicated Spread
------ ----------------
(Basis Points)
Base Rate Option LIBOR Rate Option
---------------- -----------------
From and including the Closing Date to 50 212.5
the Termination Date, on the aggregate
outstanding principal amount of the
Revolving Loans that is less than or equal
to the difference of (A) the Total
Revolving Loan Commitments minus
(B) the outstanding LC Obligations minus
(C) $50,000,000
From and including the Closing Date to 75 275
the Termination Date, on the aggregate
outstanding principal amount of the
Revolving Loans that is greater than the
difference of (A) the Total Revolving
Loan Commitments minus (B) the
outstanding LC Obligations minus
(C) $50,000,000
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By the way of example only, and not in limitation (and assuming the Total
Revolving Loan Commitments are $450,000,000 (i.e. no reduction has occurred)),
if the aggregate outstanding principal amount of Revolving Loans is $400,000,000
and the outstanding LC Obligations are $25,000,000, then $375,000,000 of the
outstanding principal amount of the Revolving Loans will bear interest at the
rate of the Base Rate plus 50 basis points or LIBOR plus 212.5 basis points, as
applicable, and $25,000,000 of the outstanding principal amount of the Revolving
Loans will bear interest at the rate of the Base Rate plus 75 basis points or
LIBOR plus 275 basis points, as applicable.
SECTION 4.02. INTEREST PERIODS. The Borrower shall have the option to
select and advise the Agent of the Interest Periods the Borrower has selected
for Revolving Loans not less than two (2) Cleveland Banking Days prior to (a)
the Closing Date, for the Revolving Loans to be made on the Closing Date, (b)
each Interest Adjustment Date, (c) the date any Revolving Loans are to be made
subsequent to the Closing Date, and (d) any date on which the Borrower desires
to have any portion of the principal of the Revolving Loans not subject to the
LIBOR Rate Option become subject to the LIBOR Rate Option, provided, that
Revolving Loans subject to the Base Rate Option may not be converted into
Revolving Loans subject to the LIBOR Rate Option and Revolving Loans subject to
the LIBOR Rate Option may not be continued as Revolving Loans subject to the
LIBOR Rate Option if an Event of Default is in existence on the date of such
conversion or continuation. Each Interest Period selected shall apply to not
less than $500,000 in principal amount of the Revolving Loans; provided, that at
no time shall there be more than ten (10) Interest Periods in effect including
any Revolving Loans subject to the Base Rate Option. The principal amount
subject to each Interest Period shall be deemed distributed Pro rata among the
Banks with respect to the respective Revolving Loans to which the Interest
Period applies. If the Borrower fails to timely select any Interest Period, the
Borrower shall be deemed to have elected to convert such Loan to a Loan subject
to the Base Rate Option, effective as of the expiration date of such current
Interest Period.
SECTION 4.03. INTEREST PAYMENT DATES. (a) Interest on all Revolving Loans
subject to the LIBOR Rate Option shall be payable on the earliest of (i) the
first Cleveland Banking Day of each month, (ii) any prepayment or conversion (on
the amount prepaid or converted), (iii) maturity (whether by acceleration or
otherwise) and/or, (iv) after such maturity, on demand.
(b) Interest on all Revolving Loans subject to the Base Rate Option shall
be payable on the earliest of (i) in arrears on the first Cleveland Banking Day
of each month, (ii) any prepayment or conversion (on the amount prepaid or
converted), (iii) maturity (whether by acceleration or otherwise) and/or (iv)
after such maturity, on demand.
SECTION 4.04. INTEREST CALCULATIONS. All interest shall be computed on the
basis of a three hundred sixty (360) day year for the actual number of days
elapsed. Interest shall in all events continue to accrue in accordance with the
provisions of this Agreement until the time payment in full is received.
SECTION 4.05. POST-DEFAULT RATE. After the occurrence and during the
continuation of any Event of Default, the Revolving Loans and any interest on
the Revolving
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Loans not paid when due shall bear interest at a rate equal to the rate
applicable to Revolving Loans, subject to the Base Rate Option plus two percent
(2%) per annum, and all such interest shall be due on demand. No interest shall
accrue on any interest that is being charged with respect to any interest not
paid when due.
SECTION 4.06. RESERVES OR DEPOSIT REQUIREMENTS, ETC. If at any time any
law, treaty, regulation (including, without limitation, Regulation D of the
Board of Governors of the Federal Reserve System), governmental rule, guideline,
order or request (whether or not having force of law) or the interpretation or
administration thereof by any governmental authority charged with the
administration thereof or any central bank or other fiscal, monetary or other
authority shall impose, modify or deem applicable any reserve and/or special
deposit requirement against assets held by, or deposits in or for the amount of
any Loans by, any Bank, and the result of the foregoing is to increase the cost
(whether by incurring a cost or adding to a cost) to such Bank of making or
maintaining Loans hereunder or to reduce the amount of principal or interest
received by such Bank with respect to such Loans, then upon demand by such Bank
the Borrower shall pay to such Bank from time to time on each interest payment
date with respect to such Loans, as additional consideration hereunder,
additional amounts sufficient to fully compensate and indemnify such Bank for
such increased cost or reduced amount, assuming (which assumption such Bank need
not corroborate) such additional cost or reduced amount were allocable to such
Loans. A statement as to the increased cost or reduced amount as a result of any
event mentioned in this Section 4.06, setting forth the calculations therefor,
shall be submitted by such Bank to the Borrower not later than one hundred fifty
(150) days after the events giving rise to the same occurred and shall, in the
absence of manifest error, be conclusive and binding as to the amount thereof.
Notwithstanding any other provision of this Agreement, after any such demand for
compensation by any Bank, the Borrower, upon at least one (1) Cleveland Banking
Day's prior written notice to such Bank through the Agent, may prepay all Loans
in full regardless of the Interest Period of any thereof. Any such prepayment
shall be subject to the prepayment premium set forth in Section 5.05 hereof.
SECTION 4.07. TAX LAW, ETC. In the event that by reason of any law,
regulation or requirement or in the interpretation thereof by an official
authority, or the imposition of any requirement of any central bank whether or
not having the force of law, any Bank shall, with respect to this Agreement or
any transaction under this Agreement, be subjected to any tax, levy, impost,
charge, fee, duty, deduction or withholding of any kind whatsoever (other than
any tax imposed upon the total net income of such Bank) and if any such measures
or any other similar measure shall result in an increase in the cost to such
Bank of making or maintaining any Loan or in a reduction in the amount of
principal, interest or commitment fee receivable by such Bank in respect
thereof, then such Bank shall promptly notify the Borrower stating the reasons
therefor. The Borrower shall thereafter pay to such Bank upon demand from time
to time on each interest payment date with respect to such Loans, as additional
consideration hereunder, such additional amounts as will fully compensate such
Bank for such increased cost or reduced amount. A statement as to any such
increased cost or reduced amount, setting forth the calculations therefor, shall
be submitted by such Bank to the Borrower not later than one hundred fifty (150)
days after the events giving rise to the same occurred and shall, in the absence
of manifest error, be conclusive and binding as to the amount thereof.
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If any Bank receives such additional consideration from the Borrower
pursuant to this Section 4.07, such Bank shall use its best efforts to obtain
the benefits of any refund, deduction or credit for any taxes or other amounts
on account of which such additional consideration has been paid and shall
reimburse the Borrower to the extent, but only to the extent, that such Bank
shall receive a refund of such taxes or other amounts together with any interest
thereon or an effective net reduction in taxes or other governmental charges
(including any taxes imposed on or measured by the total net income of such
Bank) of the United States or any state or subdivision thereof by virtue of any
such deduction or credit, after first giving effect to all other deductions and
credits otherwise available to such Bank. If, at the time any audit of such
Bank's income tax return is completed, such Bank determines, based on such
audit, that it was not entitled to the full amount of any refund reimbursed to
the Borrower as aforesaid or that its net income taxes are not reduced by a
credit or deduction for the full amount of taxes reimbursed to the Borrower as
aforesaid, the Borrower, upon demand of such Bank, will promptly pay to such
Bank the amount so refunded to which such Bank was not so entitled, or the
amount by which the net income taxes of such Bank were not so reduced, as the
case may be.
Notwithstanding any other provision of this Agreement, after any such
demand for compensation by any Bank, the Borrower, upon at least one (1)
Cleveland Banking Day's prior written notice to such Bank through the Agent, may
prepay all Loans in full regardless of the Interest Period of any thereof. Any
such prepayment shall be subject to the prepayment premium set forth in Section
5.05 hereof.
SECTION 4.08. INDEMNITY. Without prejudice to any other provisions of this
Article IV, the Borrower hereby agrees to indemnify each Bank against any
reasonable loss or expense which such Bank may sustain or incur as a consequence
of any Event of Default hereunder, including, but not limited to, any loss of
profit, premium or penalty incurred by such Bank in respect of funds borrowed by
it for the purpose of making or maintaining any Loan subject to the Libor Rate
Option, as determined by such Bank in the exercise of its sole but reasonable
discretion. A statement as to any such loss or expense shall be promptly
submitted by such Bank to the Borrower not later than one hundred fifty (150)
days after the events giving rise to the same occurred and shall, in the absence
of manifest error, be conclusive and binding as to the amount thereof.
SECTION 4.09. EURODOLLAR DEPOSITS UNAVAILABLE OR INTEREST RATE
UNASCERTAINABLE. In the event that the Agent shall have determined that dollar
deposits of the relevant amount for the relevant Interest Period are not
available to the Reference Banks in the applicable Eurodollar market or that, by
reason of circumstances affecting such market, adequate and reasonable means do
not exist for ascertaining the LIBOR rate applicable to such Interest Period, as
the case may be, the Agent shall promptly give notice of such determination to
the Borrower. In any such event, all principal of the Loans then subject to the
LIBOR Rate Option shall become subject to the Base Rate Option on expiration of
any Interest Periods then in effect. In the event that the circumstances causing
any such unavailability of deposits or inability to determine the LIBOR rate
shall change or terminate so that the LIBOR rate may again be determined, the
Agent shall promptly so notify the Borrower.
SECTION 4.10. CHANGES IN LAW RENDERING LIBOR LOANS UNLAWFUL. If at any
time any new law, treaty, regulation, governmental rule, guideline, order or
request or any change in any existing law, treaty, regulation, governmental
rule, guideline, order or request or
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any interpretation thereof by any governmental or other regulatory authority
charged with the administration thereof, shall make it unlawful for any Bank to
fund any Loans which it is committed to make hereunder subject to the LIBOR Rate
Option with moneys obtained in the Eurodollar market, the Commitment of such
Bank to fund such Loans shall, upon the happening of such event forthwith be
suspended for the duration of such illegality, and such Bank shall by written
notice to the Borrower and the Agent declare that its Commitment with respect to
such Loans has been so suspended and, if and when such illegality ceases to
exist, such suspension shall cease and such Bank shall similarly notify the
Borrower and the Agent. If any such change shall make it unlawful for any Bank
to continue in effect the funding in the applicable Eurodollar market of any
Loan previously made by it hereunder subject to the LIBOR Rate Option, such Bank
shall, upon the happening of such event, notify the Borrower, the Agent and the
other Banks thereof in writing stating the reasons therefor, and the Borrower
shall, on the earlier of (i) the last day of the then current Interest Period or
(ii) if required by such law, regulation or interpretation, on such date as
shall be specified in such notice, prepay all such Loans to the Banks in full.
Any such prepayment or conversion may be made without payment of the prepayment
premium provided for in Section 5.05 hereof, but the Borrower shall compensate
such Bank(s) for any costs or expenses relating to such Loan incurred in
connection with the events provided for in this Section on written request to
the Borrower describing such costs or expenses.
SECTION 4.11. FUNDING. Each Bank may, but shall not be required to, make
Loans hereunder with funds obtained outside the United States.
ARTICLE V
AGREEMENTS AND CONDITIONS APPLICABLE TO ALL REVOLVING LOANS
SECTION 5.01. NOTICE OF BORROWING. (a) Whenever the Borrower desires to
incur a Revolving Loan, it shall give the Agent, prior to 12:00 noon (Cleveland
time), at least two (2) Cleveland Banking Day's prior written notice (or
telephonic notice promptly confirmed in writing) of each Revolving Loan to be
subject to the LIBOR Rate Option and at least one (1) Cleveland Banking Days'
prior written notice (or telephonic notice promptly confirmed in writing) of
each Revolving Loan to be subject to the Base Rate Option. Each such notice
(each, a "Notice of Borrowing" a form of which is attached hereto as Exhibit F)
shall be appropriately completed to specify (i) the aggregate principal amount
of each Revolving Loan to be made, which shall be an amount equal to an integral
multiple of $500,000, (ii) the date such Revolving Loan(s) is to be made (which
shall be a Cleveland Banking Day and, in the case of a Revolving Loan based on
the LIBOR Rate Option, a London Banking Day), and (iii) whether the Revolving
Loan(s) shall be subject to the Base Rate Option or the Libor Rate Option and,
in the latter case, the Interest Period to be initially applicable thereto. The
Agent shall promptly give each Bank written notice (or telephonic notice
promptly confirmed in writing) of each proposed Revolving Loan, of such Bank's
Pro rata share thereof and of the other matters covered by the Notice of
Borrowing.
(b) Without in any way limiting the obligation of the Borrower to confirm
in writing any telephonic notice permitted to be given hereunder, the Agent may,
prior to receipt of written confirmation, act without liability upon the basis
of such telephonic notice, believed by the Agent in good faith to be from an
Authorized Fiscal Officer of the Borrower. In such case, the
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Borrower hereby waives the right to dispute the Agent's record of the terms of
such telephonic notice.
SECTION 5.02. DISBURSEMENT OF FUNDS. (a) No later than 1:00 p.m.
(Cleveland time) on the date specified in each Notice of Borrowing, each Bank
will make available its Pro rata portion of each Revolving Loan requested to be
made on such date in the manner provided below in this Section 5.02(a). All
amounts shall be made available to the Agent in U.S. dollars and immediately
available funds at its office listed on the signature pages hereto and the Agent
promptly will make available to the Borrower by depositing to its account at the
Agent's office the aggregate of the amounts so made available in the type of
funds received. Unless the Agent shall have been notified by any Bank prior to
the date specified in the Notice of Borrowing that such Bank does not intend to
make available to the Agent its portion of the Revolving Loan or Revolving Loans
to be made on such date, the Agent may assume that such Bank has made such
amount available to the Agent on such date of borrowing, and the Agent, in
reliance upon such assumption, may (in its sole discretion and without any
obligation to do so) make available to the Borrower a corresponding amount. If
such corresponding amount is not in fact made available to the Agent by such
Bank and the Agent has made available same to the Borrower, the Agent shall be
entitled to recover such corresponding amount from such Bank. If such Bank does
not pay such corresponding amount forthwith upon the Agent's demand therefor,
the Agent shall promptly notify the Borrower, and the Borrower shall immediately
pay such corresponding amount to the Agent. The Agent shall also be entitled to
recover from the Bank or the Borrower, as the case may be, interest on such
corresponding amount in respect of each day from the date such corresponding
amount was made available by the Agent to the Borrower to the date such
corresponding amount is recovered by the Agent at a rate per annum equal to (i)
if paid by such Bank, the overnight Federal Funds Effective Rate or (ii) if paid
by the Borrower, the then applicable rate of interest, calculated in accordance
with Article IV, for the Revolving Loans.
(b) Nothing herein shall be deemed to relieve any Bank from its obligation
to fulfill its commitments hereunder or to prejudice any rights which the
Borrower may have against any Bank as a result of any default by such Bank
hereunder.
SECTION 5.03. CONDITIONS TO LOANS. The obligation of each Bank to make
Loans hereunder is conditioned, in the case of each Loan hereunder, upon the
following:
(a) receipt by the Agent of a Notice of Borrowing or Letter of Credit
Request, as applicable;
(b) no Event of Default or Possible Default existing then or immediately
after giving effect to the Loan;
(c) the conditions set forth in Article VI hereof having been satisfied;
and
(d) the representations and warranties contained in Article IX hereof
being true and correct in all material respects with the same force and effect
as if made on and as of the date of such Loan except to the extent that any
thereof expressly relate to an earlier date.
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Each request for a Loan by the Borrower hereunder shall be deemed to be a
representation and warranty by the Borrower as of the date of such borrowing as
to the truth of the matters specified in subsections (b), (c) and (d) above.
SECTION 5.04. PAYMENT ON NOTES, ETC. All payments of principal, interest,
and any other amounts under this Agreement shall be made to the Agent in
immediately available funds and in lawful money of the United States of America
for the account of the Banks, not later than 12:00 noon (Cleveland time) on the
date when due. Any such payment received by the Agent after 12:00 noon on a
Cleveland Banking Day shall be deemed received on the next succeeding Cleveland
Banking Day and interest shall accrue to such next Cleveland Banking Day in
respect of any principal of the Loans to be paid by such payment. All payments
made by the Borrower hereunder, under any Note or any other Related Writing,
will be made without setoff, counterclaim or defense. The Agent shall distribute
to each Bank its Pro rata share of the amount of principal, interest and other
amounts received by it for the account of such Bank on the same day the Agent
receives payment thereof from the Borrower in immediately available funds,
unless the Agent does not receive such payment from the Borrower until after
12:00 noon, in which case the Agent shall make payment thereof to the Banks on
the next Cleveland Banking Day. Each Bank shall endorse each Note held by it
with appropriate notations evidencing each payment of principal made thereon or
shall record such principal payment by such other method as such Bank may
generally employ; provided, that failure to make any such entry shall in no way
detract from the Borrower's obligations under each such Note. Whenever any
payment to be made hereunder, including without limitation any payment to be
made on any Note, shall be stated to be due on a day which is not a Cleveland
Banking Day, such payment shall be made on the next succeeding Cleveland Banking
Day and such extension of time shall in each case be included in the computation
of the interest payable on such Note; provided, that if the next succeeding
Cleveland Banking Day falls in the succeeding calendar month, such payment shall
be made on the preceding Cleveland Banking Day and the relevant Interest Period
shall be adjusted accordingly. To the extent a Bank does not receive its Pro
rata share of the amount of principal, interest and other amounts made available
by the Borrower to the Agent for the account of such Bank at the applicable time
set forth above in this Section 5.04, such Bank shall be entitled to recover
from the Agent, interest on all such amounts in respect of each day from the
date such amounts were made available to the Agent by the Borrower to the date
such amounts are distributed to such Bank at a rate per annum equal to the
overnight Federal Funds Effective Rate.
SECTION 5.05. PREPAYMENT. (a) The Borrower shall have the right (subject
to the payment of a prepayment premium as hereinafter described in this Section
5.05), at any time or from time to time, upon two (2) Cleveland Banking Days'
prior written notice (or telephonic notice promptly confirmed in writing) to
prepay all or any part of the principal amount of the Loans then outstanding as
designated by the Borrower, subject to the provisions of Section 5.05(b) hereof,
plus interest accrued on the amount so prepaid to the date of such prepayment,
which notice shall promptly be transmitted by the Agent to each of the Banks.
(b) The Borrower agrees that if LIBOR as determined as of 11:00 a.m.
London time, two (2) London Banking Days' prior to the date of prepayment or
acceleration of any Loans (hereinafter, "Prepayment LIBOR") shall be lower than
the last LIBOR previously determined for those Loans accruing interest at LIBOR
with respect to which prepayment is intended to be
-22-
made or that are accelerated (hereinafter, "Last LIBOR") prior to the end of the
applicable Interest Period, then the Borrower shall, upon written notice by the
Agent, promptly pay to the Agent, for the account of each of the Banks, in
immediately available funds, a prepayment premium measured by a rate (the
"Prepayment Premium Rate") which shall be equal to the difference between the
Last LIBOR and the Prepayment LIBOR. In determining the Prepayment LIBOR payable
to each Bank, the Agent shall apply a rate for each Bank equal to LIBOR for a
deposit approximately equal to each Bank's portion of such prepayment or
accelerated balance which would be applicable to an Interest Period commencing
on the date of such prepayment or acceleration and having a duration as nearly
equal as practicable to the remaining duration of the actual Interest Period
during which such acceleration occurs or prepayment is to be made. In addition,
the Borrower shall immediately pay directly to each Bank the amount claimed as
additional costs or expenses (including, without limitation, cost of telex,
wires, or cables) incurred by such Bank in connection with the prepayment or
acceleration upon the Borrower's receipt of a written statement from such Bank.
The Prepayment Premium Rate shall be applied to all or such part of the
principal amounts of the Notes as related to the Loans to be prepaid, or that
are accelerated and the prepayment premium shall be computed for the period
commencing with the date on which such prepayment is to be made or acceleration
occurs to that date which coincides with the last day of the Interest Period
previously established when the Loans, which are to be prepaid or are
accelerated, were made. Each voluntary prepayment of a Loan shall be in the
aggregate principal sum of not less than One Million Dollars ($1,000,000)
(except in the case of a Loan initially made in an aggregate amount less than
One Million Dollars ($1,000,000)) and, if greater, in an integral multiple of
Two Hundred Fifty Thousand Dollars ($250,000). In the event the Borrower cancels
a proposed Loan subsequent to the delivery to the Agent of a Notice of Borrowing
with respect to such Loan, but prior to the draw down of funds thereunder, such
cancellation shall be treated as a prepayment subject to the aforementioned
prepayment premium.
SECTION 5.06. UNUSED COMMITMENT FEES. The Borrower agrees to pay to the
Agent, for the Pro rata benefit of each Bank, as consideration for its
Commitment hereunder, an unused commitment fee calculated at the rate of thirty
seven and one half (37.5) basis points per annum (based on a year having 360
days and calculated for the actual number of days elapsed) (a) from the Closing
Date to the Termination Date, with respect to the Banks party to this Agreement
as of the Closing Date and (b) from the date an Additional Bank becomes a party
to this Agreement by executing an Additional Bank Assumption Agreement to the
Termination Date, with respect to the Additional Banks that become parties to
this Agreement after the Closing Date, on the sum of the average daily
unborrowed amount of such Bank's Commitment hereunder minus the aggregate amount
of all possible drawings under all letters of credit issued pursuant to Section
3.01 hereof, payable on the first Cleveland Banking Day after each Fiscal
Quarterly Date. After any permanent reduction of the Total Revolving Loan
Commitments pursuant to Section 5.07, the unused commitment fees payable
hereunder shall be calculated upon the Total Revolving Loan Commitments of the
Banks as so reduced.
SECTION 5.07. MODIFICATION OF THE TOTAL REVOLVING LOAN COMMITMENTS. (a) At
any time during the Commitment Increase Period, the Borrower may request the
Agent to increase the Total Revolving Loan Commitments from the Closing Date
Commitment Amount up to an amount that shall not exceed $450,000,000. Each such
increase shall be in increments of at least Twenty Three Million Seven Hundred
Fifty Thousand Dollars
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($23,750,000), by including one or more Additional Banks, each with a new
Commitment (collectively the "Additional Commitments"). During the Commitment
Increase Period, the Banks agree that the Agent, in its sole discretion,
exercised in good faith, may permit one or more Additional Commitments upon
satisfaction of the following requirements: (i) each Additional Bank, if any,
shall execute an Additional Bank Assumption Agreement, (ii) the Agent shall
provide to each Bank a revised Exhibit A to this Agreement at least three
Cleveland Banking Days prior to the effectiveness of such Additional Commitments
(each, an "Additional Bank Assumption Effective Date"), and (iii) the Borrower
shall execute and deliver to the Agent and the Additional Banks a Note as shall
be required by such Additional Banks. The Banks hereby authorize the Agent to
execute each Additional Bank Assumption Agreement on behalf of the Banks. On
each Additional Bank Assumption Effective Date, the Banks shall make adjustments
among themselves with respect to the Revolving Loans and LC Obligations then
outstanding and amounts of principal, interest, fees and other amounts paid or
payable with respect thereto as shall be necessary, in the opinion of the Agent,
in order to reallocate among such Banks such outstanding amounts, based on their
respective Pro rata shares of the then effective Total Revolving Loan
Commitments and to otherwise carry out fully the intent and terms of this
Section 5.07(a). The Borrower shall not request any increase in the Total
Revolving Loan Commitments pursuant to this Section 5.07(a) if a Possible
Default or an Event of Default shall then exist, or immediately after giving
effect to any such increase would exist. No Bank party to the Original Credit
Agreement may be an Additional Bank or make an Additional Commitment.
(b) The Borrower shall have the right at all times to permanently reduce
the Total Revolving Loan Commitments in whole or in part by giving written
notice of the reduction to the Agent at least one Cleveland Banking Day prior to
the reduction, each such reduction to be equal to at least $10,000,000, or the
then Total Revolving Loan Commitments if the then Total Revolving Loan
Commitments are less than $10,000,000. Each such reduction shall reduce each
Bank's Commitment Pro rata. Concurrently with each reduction, the Borrower shall
prepay the amount, if any, together with interest thereon by which the aggregate
unpaid principal amount of the Loans plus the LC Obligation exceeds the Total
Revolving Loan Commitments as so reduced in accordance with Section 5.05 of this
Agreement.
SECTION 5.08. EXTENSIONS OF THE LOANS. Commencing on May 1, 2005 and on
each May 1st thereafter, the Borrower may request the Banks to extend the
Termination Date for one additional year in a writing delivered to the Agent not
later than 180 days prior to the then applicable Termination Date, in accordance
with the terms of this Agreement. The unanimous consent of the Banks shall be
required for any such extension and the Banks shall have the right, but not the
obligation, to approve such request for an extension. Any approval of the
Borrower's request shall be subject to such terms and conditions as the Banks
may deem appropriate.
ARTICLE VI
CONDITIONS PRECEDENT
Prior to or concurrently with the execution and delivery of this
Agreement, and as conditions precedent to the making of any Loans hereunder, the
following actions shall be taken, all in form and substance satisfactory to the
Agents and the Banks and their respective counsel:
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SECTION 6.01. CORPORATE AND LOAN DOCUMENTS. The Borrower shall deliver or
cause to be delivered to the Agents and the Banks the following documents, in
all cases duly executed, delivered and/or certified, as the case may be:
(a) Certified copies of the resolutions of the board of directors of the
Borrower evidencing approval of the execution, delivery and performance of this
Agreement and the Notes provided for herein;
(b) Certified copies of resolutions of the board of directors of the
Parent evidencing approval of the execution, delivery and performance of the
Guaranty;
(c) Copies of the Articles of Incorporation of the Borrower, certified by
the Ohio Secretary of State as of a recent date;
(d) Copies of the Articles of Incorporation of the Parent, certified by
the Ohio Secretary of State as of a recent date;
(e) Copies of the Code of Regulations of the Borrower, certified as true
and complete as of the Closing Date by the secretary of the Borrower;
(f) Copies of the Code of Regulations of the Parent, certified as true and
complete as of the Closing Date by the secretary of the Parent;
(g) Borrower good standing certificate from the State of Ohio as of a
recent date;
(h) Parent good standing certificate from the State of Ohio as of a recent
date.
(i) A certificate of the secretary or assistant secretary of the Borrower
certifying the names of the officers of the Borrower authorized to sign this
Agreement and the Notes, together with the true signatures of such officers.
(j) A certificate of the secretary or assistant secretary of the Parent
certifying the names of the officers of the Parent authorized to sign the
Guaranty, together with the true signatures of such officers.
(k) The Borrower, the Agents, and the Banks shall have executed and
delivered counterparts of the Agreement.
(l) The Parent shall have executed and delivered the Guaranty to the
Agents and the Banks.
(m) The Borrower shall have executed and delivered to each Bank (other
than the Additional Banks), a Note payable to the account of each respective
Bank in the amount of their respective Commitments.
(n) A certificate of the secretary or assistant secretary of the Borrower
certifying that as of the Closing Date and after giving effect thereto and to
the Loans made hereunder (i) there exists no Possible Default or Event of
Default and (ii) all representations and warranties contained herein shall be
true and correct in all material respects.
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(o) A certificate of the secretary or assistant secretary of the Parent
certifying that as of the Closing Date and after giving effect thereto and to
the Loans made hereunder (i) there exists no Possible Default or Event of
Default and (ii) all representations and warranties contained herein shall be
true and correct in all material respects.
SECTION 6.02. OPINION OF COUNSEL FOR PARENT. The Borrower shall deliver or
cause to be delivered to the Agents and the Banks a favorable opinion of counsel
for the Parent as to the due authorization, execution and delivery, and
legality, validity, and enforceability of the Guaranty and such other matters as
the Agents and the Banks may request.
SECTION 6.03. JUDGMENT, ORDERS. On the Closing Date, there shall not exist
any judgment, order, injunction or other restraint issued or filed with respect
to the consummation of the transactions contemplated by this Agreement.
SECTION 6.04. LITIGATION. On the Closing Date, there shall be no actions,
suits or proceedings pending or threatened (a) with respect to this Agreement or
the transactions contemplated hereby or (b) which the Agents or the Banks shall
determine could (i) have a Material Adverse Effect or (ii) have a material
adverse effect on the rights or remedies of the Banks hereunder or under the
Notes or the Guaranty or on the ability of either the Borrower or the Parent to
perform its respective obligations to the Banks hereunder or under the Notes or
the Guaranty.
SECTION 6.05. NOTICE OF BORROWING. Prior to the making of each Loan, the
Agent shall have received a Notice of Borrowing satisfying the requirements of
Section 5.01.
SECTION 6.06. OPINION OF COUNSEL FOR BORROWER. The Borrower shall deliver
or cause to be delivered to the Agents and the Banks a favorable opinion of
counsel for the Borrower as to the due authorization, execution and delivery,
and legality, validity and enforceability of this Agreement and the Notes and
such other matters as the Agents and the Banks may request.
SECTION 6.07. PAYMENT OF FEES. On the Closing Date, the Borrower shall
have paid to the Agents and the Banks all costs, fees and expenses, and all
other compensation contemplated by this Agreement (including, without
limitation, legal fees and expenses) to the extent then due.
SECTION 6.08. ADVERSE CHANGE, ETC. From January 31, 2003 to the Closing
Date, nothing shall have occurred (and neither the Banks nor the Agents shall
have become aware of any facts or conditions not previously known) which the
Banks or the Agents shall determine has, or could reasonably be expected to
have, a Material Adverse Effect.
SECTION 6.09. TERMINATION OF ORIGINAL CREDIT AGREEMENT. The Original
Credit Agreement shall have been cancelled and terminated and the Indebtedness
and obligations of the Borrower thereunder shall (except in respect of the
letters of credit issued thereunder and identified on Schedule 3.01 hereto) have
been satisfied and performed in full.
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SECTION 6.10. EVIDENCE OF INSURANCE. The Borrower shall have delivered to
the Agents and the Banks evidence of insurance complying with the provisions of
Section 7.09 hereof.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that on the Closing Date and thereafter, for
so long as this Agreement remains in effect and until the Commitments and all
letters of credit are terminated, no Notes are outstanding and the Loans,
together with interest, fees and all other obligations incurred hereunder, are
paid in full, the Borrower will perform and observe all of the following
provisions, namely:
SECTION 7.01. PAYMENT OF AMOUNTS DUE. The Borrower will make all payments
of the principal of and interest on the Loans and the Notes promptly as the same
become due.
SECTION 7.02. EXISTENCE, BUSINESS, ETC. The Borrower will cause to be done
all things necessary to preserve and to keep in full force and effect its
existence and rights and those of its Subsidiaries. The Borrower will, and will
cause its Subsidiaries to, comply in all material respects with all federal,
state and local laws and regulations now in effect or hereafter promulgated by
any governmental authority having jurisdiction over it or them, as applicable.
SECTION 7.03. MAINTENANCE OF PROPERTIES. The Borrower will, and will cause
its Subsidiaries to, at all times maintain, preserve, protect and keep its
properties used in the conduct of its business in good repair, working order and
condition, ordinary wear and tear excepted, and, from time to time, make all
needful and proper repairs, renewals, replacements, betterments, and
improvements thereto, so that the business carried on in connection therewith
may be properly conducted at all times.
SECTION 7.04. PAYMENT OF TAXES, ETC. The Borrower will pay and discharge
all lawful taxes, assessments and governmental charges or levies imposed upon
it, upon its income or profits or upon its properties, before the same shall
become in default or penalties attach thereto, as well as all lawful claims for
same which have become due and payable which, if unpaid, might become a Lien or
charge upon such properties or any part thereof; provided, that the Borrower
shall not be required to pay and discharge any such tax, assessment, charge,
levy or claim so long as the validity thereof shall be contested in good faith
by appropriate proceedings and there shall be set aside on its books such
reserves with respect thereto as are required by generally accepted accounting
principles. Except where the liability for the tax, assessment, charge, levy or
claim is limited solely to the property on which assessed and is not subject to
enforcement against the Borrower, the Borrower will in all events pay such tax,
assessment, charge, levy or claim before the property subject thereto shall be
sold to satisfy any Lien which has attached as security therefor.
SECTION 7.05. FINANCIAL STATEMENTS. The Borrower will furnish or cause to
be furnished to each Bank:
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(a) within forty-five (45) days (or fifty (50) days so long as the Parent
shall not have reported an Event of Default under the Guaranty to the Securities
and Exchange Commission during such fiscal period nor on its most recent filing
with the Securities and Exchange Commission) after the end of each of the first
three (3) quarter-annual fiscal periods of each of the Borrower's fiscal years,
a Form 10-Q as filed with the Securities and Exchange Commission, an unaudited
consolidated and consolidating balance sheet of the Parent as at the end of that
period and an unaudited consolidated and consolidating statement of income of
the Parent for the Parent's current fiscal year to date, all prepared in form
and detail in accordance with GAAP, consistently applied, or the Pro Rata
Consolidation Method, as applicable, and certified by a Senior Officer of the
Parent, together with a certificate of a Senior Officer of the Borrower (i)
specifying the nature and period of existence of each Event of Default and/or
Possible Default, if any, and the action taken, being taken or proposed to be
taken by the Borrower in respect thereof, or if none, so stating, (ii)
certifying that the representations and warranties of the Borrower set forth in
Article IX hereof are true and correct as of the date of such certificate, or,
if not, all respects in which they are not and (iii) certifying compliance by
the Borrower with the covenants contained in Section 8.13;
(b) within ninety (90) days (or ninety-five (95) days so long as the
Parent shall not have reported an Event of Default under the Guaranty to the
Securities and Exchange Commission during such fiscal period nor on its most
recent filing with the Securities and Exchange Commission) after the end of each
fiscal year of the Borrower, an annual report on Form 10-K as filed by the
Parent with the Securities and Exchange Commission, including the complete
audited consolidated balance sheets and statements of income of the Parent for
that year, certified by an independent public accountant satisfactory to the
Banks, and an unaudited consolidating balance sheet and statement of income of
the Parent for the current fiscal year, each in form and detail satisfactory to
the Banks, and prepared in accordance with GAAP, consistently applied, or the
Pro Rata Consolidation Method, as applicable, together with (i) a report of the
independent certified public accountant, with an opinion that is not qualified
as to the scope of the audit or as to the status of the Parent or the Borrower
as a going concern, (ii) a certificate of a Senior Officer of the Borrower (X)
specifying the nature and period of existence of each Event of Default and/or
Possible Default, if any, and the action taken, being taken or proposed to be
taken by the Borrower in respect thereof or, if none, so stating, and (Y)
certifying that the representations and warranties of the Borrower set forth in
Article IX hereof are true and correct as of the date of such certificate, or,
if not, all respects in which they are not, and (iii) a fully completed covenant
compliance worksheet in the form and substance of Schedule 7.05 hereof relating
to such fiscal year duly certified by the Borrower's accountants;
(c) no more than ninety (90) days after the commencement of each fiscal
year of the Borrower, a budget of the Borrower in form and substance
substantially the same as the budgets delivered by the Borrower to the Agent on
or before the Closing Date; and
(d) forthwith upon the Agent's or any Bank's written request, such other
information about the financial condition, properties and operations of the
Borrower and its Subsidiaries, including, but not limited to, financial
statements, management letters of accountants addressed to the Parent or the
Borrower, rent rolls and other similar information for each Subsidiary of the
Borrower, in each case as the Agent or that Bank may from time to time
reasonably request.
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SECTION 7.06. INSPECTION. The Borrower will and will cause each Subsidiary
to permit its properties and records to be examined at all reasonable times by
the Agent and each of the Banks.
SECTION 7.07. ENVIRONMENTAL COMPLIANCE. The Borrower will comply in all
material respects with any and all Environmental Laws including, without
limitation, all Environmental Laws in jurisdictions in which the Borrower or any
Subsidiary owns property, operates, arranges for disposal or treatment of
hazardous substances, solid waste or other wastes, accepts for transport any
hazardous substances, solid waste or other wastes or holds any interest in real
property or otherwise. The Borrower will furnish to the Banks promptly after
receipt thereof a copy of any notice the Borrower or any Subsidiary may receive
from any governmental authority, private person or entity or otherwise that any
litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against the Borrower or such Subsidiary,
any real property in which the Borrower or such Subsidiary holds any interest or
any past or present operation of the Borrower or such Subsidiary. The Borrower
will not allow the storage, release or disposal of hazardous waste, solid waste
or other wastes on, under or to any real property in which the Borrower holds
any interest or performs any of its operations, in violation of any
Environmental Law. As used in this subsection "litigation or proceeding" means
any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise. The Borrower shall defend, indemnify and hold the
Banks harmless against all costs, expenses, claims, damages, penalties and
liabilities of every kind or nature whatsoever (including attorneys' fees)
arising out of or resulting from the noncompliance of the Borrower or any
Subsidiary with any Environmental Law provided that, so long as and to the
extent that the Banks are not required to make any payment or suffer to exist
any unsatisfied judgment, order or assessment against them, the Borrower may
pursue rights of appeal to comply with such Environmental Laws. In any case of
noncompliance with any Environmental Law by a Subsidiary, the Banks' recourse
for indemnity in respect of the matters provided for in this Section 7.07 shall
be limited solely to the property of the Subsidiary holding title to the
property involved in such noncompliance and such recovery shall not be a Lien,
or a basis of a claim of Lien or levy of execution, against either the
Borrower's general assets or the general assets of any of its Subsidiaries.
SECTION 7.08. ERISA. (a) At the request of any Bank, the Borrower will
deliver to such Bank a complete copy of the annual report (Form 5500) of each
Plan required to be filed with the Internal Revenue Service. In addition to any
certificates or notes delivered to the Banks pursuant to this Section 7.08,
copies of any notices received by the Borrower or any Subsidiary of the Borrower
or any ERISA Affiliate with respect to any Plan shall be delivered to the Banks
no later than ten (10) days after the date such notice has been filed with the
Internal Revenue Service or the PBGC or such notice has been received by the
Borrower or such Subsidiary or such ERISA Affiliate, as applicable.
(b) As soon as possible and, in any event, within ten (10) days after the
Borrower, any of its Subsidiaries or any ERISA Affiliate knows or has reason to
know of the occurrence of any of the following, the Borrower will deliver to
each of the Banks a certificate of an authorized officer of the Borrower setting
forth details as to the occurrence and such action, if any, which the Borrower,
such Subsidiary or such ERISA Affiliate is required or proposed to take,
together
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with any notices required or proposed to be given to or filed with or by the
Borrower, such Subsidiary, such ERISA Affiliate, the PBGC, a Plan participant or
the Plan administrator with respect thereto:
(i) that a Reportable Event has occurred;
(ii) that an accumulated funding deficiency has been incurred or any
application may be or has been made to the Secretary of the Treasury for a
waiver or modification of the minimum funding standard (including any
required installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to a Plan;
(iii) that a contribution required to be made to a Plan has not been
timely made;
(iv) that a Plan has been or may be terminated, reorganized,
partitioned or declared insolvent under Title IV of ERISA;
(v) that a Plan has an Unfunded Current Liability giving rise to a
Lien under ERISA or the Code;
(vi) that proceedings may be or have been instituted to terminate or
appoint a trustee to administer a Plan;
(vii) that a proceeding has been instituted pursuant to Section 515
of ERISA to collect a delinquent contribution to a Plan;
(viii) that the Borrower, any of its Subsidiaries or any ERISA
Affiliate will or may incur any liability (including any indirect,
contingent or secondary liability) to or on account of the termination of
or withdrawal from a Plan under Section 4062, 4069, 4201, 4204 or 4212 of
ERISA or with respect to a Plan under Section 401(a)(29), 4971, 4975, or
4980 of the Code or Sections 409 or 502(i) or 501(1) of ERISA; or
(ix) that the Borrower or any of its Subsidiaries may incur any
material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(1) of ERISA) that provides benefits to retired
employees or other former employees (other than as required by Section 601
of ERISA) or any employee pension benefit plan (as defined in Section 3(2)
of ERISA).
SECTION 7.09. INSURANCE. The Borrower will and will cause each of its
Subsidiaries to (a) keep itself and all of its insurable properties insured at
all times to such extent, by such insurers, and against such hazards and
liabilities as is generally and prudently done by like businesses, it being
understood that the Parent, the Borrower and each Subsidiary has obtained a
fidelity bond for each of its employees that handle funds, (b) give each Bank
prompt written notice of each material change in the Borrower's or any
Subsidiary's insurance coverage and the details of the change and (c) forthwith
upon any Bank's written request, furnish to each Bank such information about the
Borrower's or any Subsidiary's insurance as any Bank may from time to time
reasonably request, which information shall be prepared in form and detail
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satisfactory to each Bank and certified by an officer of the Borrower or such
Subsidiary, as applicable.
SECTION 7.10. MONEY OBLIGATIONS. The Borrower will and will cause each
Subsidiary to pay in full (a) prior in each case to the date when penalties
would attach, all taxes, assessments and governmental charges and levies (except
only those so long as and to the extent that the same shall be contested in good
faith by appropriate and timely proceedings diligently pursued) for which it may
be or become liable or to which any or all of its properties may be or become
subject, (b) all of its wage obligations to its employees in compliance with the
Fair Labor Standards Act (29 U.S.C. Sections 206-207) or any comparable
provisions, and (c) all of its other obligations calling for the payment of
money (except only those so long as and to the extent that the same shall be
contested in good faith by appropriate and timely proceedings diligently
pursued) before such payment becomes overdue except where the failure to make
such payments, either singly or in the aggregate, would not have a Material
Adverse Effect on the Borrower and provided that the Borrower shall promptly
give written notice to the Agent of any such non-payments, which written notice
the Agent will promptly deliver to each Bank.
SECTION 7.11. RECORDS. The Borrower will and will cause each Subsidiary to
(a) at all times maintain true and complete records and books of account, and
without limiting the generality of the foregoing, maintain appropriate reserves
for possible losses and liabilities, all in accordance with GAAP applied on a
basis not inconsistent with its present accounting procedures, and (b) at all
reasonable times permit any Bank to examine the Borrower's or any Subsidiary's
books and records and to make excerpts therefrom and transcripts thereof.
SECTION 7.12. FRANCHISES. The Borrower will and will cause each Subsidiary
to preserve and maintain at all times its corporate existence, rights and
franchises; provided, that this Section 7.12 shall not prohibit any merger,
consolidation, dissolution or transfer permitted by Section 8.02.
SECTION 7.13. NOTICE. The Borrower will cause its Chief Financial Officer,
or in his or her absence another officer designated by the Chief Financial
Officer, to promptly notify the Banks whenever:
(a) any Event of Default or Possible Default may occur hereunder or any
representation or warranty made in Article IX hereof or elsewhere in this
Agreement or in any Related Writing may for any reason cease in any material
respect to be true and complete; and/or
(b) (i) any Subsidiary shall be in default of any material (either with
respect to the Subsidiary or the Borrower) Indebtedness or Contingent Obligation
or, to the knowledge of the Borrower, any material obligations in respect of
taxes and/or Indebtedness for goods or services purchased by, or other
contractual obligations of, such Subsidiary and/or (ii) any Subsidiary shall
not, to the knowledge of Borrower, be in compliance with any law, order, rule,
judgments, ordinance, regulation, license, franchise, lease or other agreement
that has or could reasonably be expected to have a material adverse effect on
the business, operations, property or financial condition of the Subsidiary,
and/or (iii) the Borrower and/or the Subsidiary shall have received or have
knowledge of any actual, pending or threatened claim, notice, litigation,
citation, proceeding, or demand relating to any matter(s) described in
subsections (i) and (ii) of this Section 7.13(b); and/or
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(c) the Borrower shall be in default of any guarantee permitted by Section
8.07(b).
SECTION 7.14. POST CLOSING ITEMS. The Borrower will promptly perform and
complete to the satisfaction of the Agent each of the matters, if any, set forth
on Schedule 7.14 attached hereto (the "Post Closing Items") on or before the
date set forth on Schedule 7.14 for the performance and completion thereof (the
"Satisfaction Date").
SECTION 7.15. FURTHER ASSURANCES; REPLACEMENT NOTES. (a) The Borrower
agrees to execute and deliver to the Agent and/or the Banks any agreements,
documents and instruments, including, without limitation, additional Notes as
replacements or substitutions as may reasonably be required by the Agent and/or
the Banks, and to take such other actions as reasonably requested by the Agent
to effect the transactions contemplated hereby.
(b) Upon the receipt by the Borrower of an affidavit of an officer of a
Bank as to the loss, theft, destruction or mutilation of its Note or any other
security document that is not of public record, upon the cancellation of any
such Note or other security document, as applicable, the Borrower shall issue,
in lieu thereof, a replacement Note or other security document, as applicable,
in the same principal amount thereof and otherwise of like tenor.
SECTION 7.16. NOTICE OF DEFAULT OR LITIGATION. Promptly, and in any event
within three (3) Cleveland Banking Days after any officer of the Borrower or any
of its Subsidiaries obtains knowledge thereof, the Borrower will deliver notice
to the Banks of (a) the occurrence of any event which constitutes a Possible
Default or Event of Default, which notice shall specify the nature thereof, the
period of existence thereof and what action the Borrower proposes to take with
respect thereto, and (b) the commencement of, or written threat of, or any
significant development in, any litigation or governmental proceeding pending
against the Borrower or any of its Subsidiaries which is likely to have a
Material Adverse Effect.
SECTION 7.17. USE OF PROCEEDS. All proceeds of the Loans shall be used as
provided in Section 2.04.
ARTICLE VIII
NEGATIVE COVENANTS
The Borrower covenants and agrees that as of the Closing Date, and
thereafter for so long as this Agreement is in effect and until the Commitments
and all letters of credit are terminated, no Notes are outstanding and the
Loans, together with interest, fees and all other obligations incurred
hereunder, are paid in full, the Borrower will observe all of the following
provisions, namely:
SECTION 8.01. PLAN. Neither the Borrower nor any Subsidiary will suffer or
permit any Plan to be amended if, as a result of such amendment, the current
liability under the Plan is increased to such an extent that security is
required pursuant to Section 307 of the ERISA. As used herein, "current
liability" means current liability as defined in Section 307 of ERISA.
SECTION 8.02. COMBINATIONS. The Borrower will not dissolve or liquidate,
and will not permit any Subsidiary to dissolve or liquidate, except in the
ordinary course of business
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and to the extent that no Material Adverse Effect is thereby suffered by the
Borrower. The Borrower will not and will not permit any Subsidiary to be a party
to any consolidation or merger; provided, that this Section 8.02 shall not apply
to (i) any merger of a Subsidiary into the Borrower (with the Borrower being the
surviving corporation) or into another Subsidiary, or (ii) any consolidation of
a Subsidiary with another Subsidiary.
SECTION 8.03. BULK TRANSFERS. The Borrower will not and will not permit a
Subsidiary to be a party to any lease, sale or other transfer involving all or a
substantial part of the assets of the Borrower and its Subsidiaries as a whole;
provided, that this Section 8.03 shall not apply to (a) any transfer of assets
by a Subsidiary to the Borrower or another Subsidiary, (b) the transfer of
assets to a trustee (other than a trustee for the benefit of creditors) in
connection with a building project involving such assets, or (c) any transfer
effected in the normal course of business and on commercially reasonable terms.
SECTION 8.04. BORROWINGS. The Borrower will not and will not permit any
Subsidiary to create, assume or suffer to exist any unsecured or secured
Indebtedness of any kind or any reimbursement obligation or other similar
liabilities with respect to letters of credit issued for the Borrower's or any
Subsidiary's account (other than non-recourse letters of credit or surety bonds
issued as credit enhancement); provided, that this Section 8.04 shall not apply
to the following (collectively, "Permitted Debt"):
(a) any Loans obtained hereunder;
(b) any secured Indebtedness of the Borrower or of any Subsidiary created
in the course of purchasing or developing real estate or financing construction
or other improvements thereon or purchasing furniture, fixtures or other
equipment therefor or any other related Indebtedness of the Borrower or of any
Subsidiary or any refinancings thereof, provided, that neither the Borrower nor
any Subsidiary (other than a Subsidiary whose sole assets consist of contiguous
parcels of land which are being purchased or developed with such financing, the
improvements, if any, thereon, furniture, fixtures and other equipment used in
connection therewith, receivables arising from tenants in connection therewith
and the proceeds of such receivables and other property directly obtained from
the ownership of such assets) shall have any personal liability for such
Indebtedness (except for Indebtedness permitted in Section 8.07(e)), the
creditors' recourse being solely to the property being pledged as collateral for
such Indebtedness and the income therefrom;
(c) except as provided in Section 8.04(d) hereof, Indebtedness under any
Hedge Agreement relating to Indebtedness otherwise permitted under this Section
8.04, provided, that, any Hedge Agreement proposed to be entered into by the
Borrower or any Subsidiary (other than Forest City Capital Corporation) that
will not be provided by one or more of the Agents or the Banks shall require the
prior written consent of the Required Banks (such written consent to be
delivered by each consenting Bank to the Agent not more than three (3) Business
Days after the request for such consent has been delivered by the Borrower to
the Agent, provided, that, each Bank that does not deliver such written consent
within such three (3) Business Day period shall be deemed to have denied the
request for such Hedge Agreement);
(d) Indebtedness of any of the Borrower's Subsidiaries (whose sole assets
consist of contiguous parcels of lands, the improvements, if any, thereon,
fixtures and other equipment
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used in connection therewith, receivables arising from tenants in connection
therewith and the proceeds of such receivables and other property directly
obtained from the ownership of such assets) under Hedge Agreements that are
recourse solely to such Subsidiary; or
(e) Indebtedness owed by any Subsidiary to the Borrower as permitted by
Section 8.06(b) hereof.
SECTION 8.05. LIENS. The Borrower will not and will not permit any
Subsidiary to (a) acquire any property subject to any inventory consignment,
land contract or other title retention contract, (b) other than the periodic
sale by the Borrower or any Subsidiary of any mortgages held by the Borrower or
such Subsidiary, sell or otherwise transfer any receivables, or (c) suffer or
permit any property now owned or hereafter acquired by it to be or become
encumbered by any mortgage, security interest, financing statement or Lien of
any kind or nature other than:
(i) any Lien for a tax, assessment or governmental charge or levy so
long as the payment thereof is not at the time required by Section 7.10
hereof;
(ii) any Lien securing only its workers' compensation, unemployment
insurance and similar obligations;
(iii) any mechanic's, carrier's or similar common law or statutory
Lien incurred in the normal course of business;
(iv) any transfer of a check or other medium of payment for deposit
or collection through normal banking channels or any similar transaction
in the normal course of business;
(v) any mortgage, security interest or other Lien securing only
Indebtedness permitted by clause (b) of Section 8.04;
(vi) any Lien permitted by Section 8.15 hereunder;
(vii) any transfer of receivables without recourse;
(viii) any assignment of rents, profits and/or cash flows derived
from particular real estate given as additional security to a mortgage or
security interest on such real estate permitted by this Section 8.05,
provided, that the mortgage or security interest encumbers only the real
property in question;
(ix) any financing statement perfecting a security interest
permitted by this Section 8.05;
(x) easements, restrictions, minor title irregularities and similar
matters having no adverse effect as a practical matter on the ownership or
use of the Borrower's or any Subsidiary's real property; or
(xi) any mortgage, security interest and Lien securing any Debt
incurred to the Banks under this Agreement.
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SECTION 8.06. LOANS RECEIVABLE. The Borrower will not and will not permit
any Subsidiary to knowingly make or have outstanding at any time to any third
party, any advance or loan of any kind other than:
(a) any loan secured by mortgages on real estate and not exceeding eighty
per cent (80%) of the value of the real estate as appraised by a nationally
recognized appraiser;
(b) any loan from the Borrower to one of its Subsidiaries or from such a
Subsidiary to the Borrower, provided, that any such loan from a Subsidiary to
the Borrower shall be subordinated in all respects to the Borrower's Debt to the
Banks on such terms and conditions as may be satisfactory to the Banks;
(c) any advance or loan made in the normal course of business of acquiring
properties for, or developing properties of, the Borrower or any Subsidiary;
(d) any Permitted Non-Affiliate Loan, provided, that (i) such Permitted
Non-Affiliate Loan is secured either by (A) a pledge of all or substantially all
of the equity interests in the Non-Affiliated Entity that owns the Non-Affiliate
Construction Project or (B) a first or second priority mortgage lien on the
Non-Affiliate Construction Project, and (ii) the aggregate principal amount of
all such Permitted Non-Affiliate Loans shall not exceed the amount of
$200,000,000 outstanding at any time.
SECTION 8.07. GUARANTEES. The Borrower will not and will not permit any
Subsidiary to pledge its credit or property in any manner for the payment or
other performance of Indebtedness, contract or other obligation of another
(including, without limitation, the Indebtedness of the Parent under the Senior
Notes), whether as guarantor (whether of payment or of collection), surety,
co-maker, endorser or by agreeing conditionally or otherwise to make any
purchase, loan or investment in order thereby to enable another to prevent or
correct a default of any kind, or otherwise, except for:
(a) endorsements of negotiable instruments for deposit or collection or
similar transactions in the normal course of business;
(b) any guarantee set forth on Schedule 9.22 as of the Closing Date;
(c) any indemnity or guarantee of a surety bond for the performance by a
customer of the Borrower or any Subsidiary of such customer's obligations under
a land development contract;
(d) any unsecured guarantee by the Borrower or any of its Subsidiaries of
the equity investment or performance of a Subsidiary (other than any
Indebtedness of such Subsidiary incurred for borrowed money) in connection with
a real estate project solely in favor of a partner or a member, or a partnership
or limited liability company in which such Subsidiary is a general partner or a
member, as applicable, when the Borrower or such Subsidiary, as the case may be,
deems it to be in its best interest not to be a partner, a member or have a
direct interest in the partnership or the limited liability company, as
applicable;
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(e) any guarantee or indemnity by the Borrower or any of its Subsidiaries
for fraud, misappropriation, misapplication or environmental problems, as are
usual and customary in commercial mortgage loan transactions entered into by the
Borrower and/or its Subsidiaries, provided, that such a guarantee or indemnity
may be given by the Borrower or a Subsidiary, but not both (unless such
Subsidiary is also the borrower in the particular commercial mortgage loan
transaction), in connection with any particular commercial mortgage loan
transaction; and
(f) any guarantee by the Borrower of an unsecured Hedge Agreement
permitted by Section 8.04 hereof entered into by a Subsidiary and with a
maturity date of not more than twelve (12) months following the date of such
Hedge Agreement.
SECTION 8.08. AMENDMENT OF ARTICLES OF INCORPORATION AND/OR REGULATIONS.
The Borrower will not amend, modify or supplement its articles of incorporation
or its code of regulations in any material respect that would be detrimental to
the performance by the Borrower of its obligations under this Agreement or the
Notes or the rights of the Agents or the Banks under this Agreement or the
Notes.
SECTION 8.09. FISCAL YEAR. Except as required by law, or required in
connection with a transaction permitted under Section 8.02 hereof, the Borrower
will not change its fiscal year without the consent of the Banks, which consent
shall not be unreasonably withheld.
SECTION 8.10. REGULATION U. The Borrower will not, and will not permit its
Subsidiaries to, directly or indirectly, (a) apply any part of the proceeds of
any Loan to the purchasing or carrying of any "margin stock" within the meaning
of Regulations T, U or X of the Federal Reserve Board, or any regulations,
interpretations or rulings thereunder, (b) extend credit to others for the
purpose of purchasing or carrying any such margin stock, or (c) retire
Indebtedness which was incurred to purchase or carry any such margin stock.
SECTION 8.11. NO PLEDGE. (a) The Borrower will not, and will not permit
any of its Subsidiaries to, sell, assign, pledge or otherwise dispose of or
encumber any of its or their partnership interests or other equity interests in
any of its or their Subsidiaries, except as permitted under Section 8.02, and
except that the Borrower and each Subsidiary shall be permitted to pledge its
stock or other ownership interests in any of its or their Subsidiaries that is a
single asset or special purpose entity (each, a "Pledged Subsidiary") to secure
the following:
(i) additional or mezzanine Indebtedness incurred with respect to a
project encumbered by a first mortgage at the time the additional or
mezzanine Indebtedness is incurred, so long as such additional or
mezzanine Indebtedness is permitted under Section 8.04 of this Agreement;
provided, that the sum of the then existing Indebtedness with respect to
such project plus such additional or mezzanine Indebtedness does not
exceed eighty percent (80%) of the appraised value of the project at the
time such additional or mezzanine Indebtedness is incurred; or
(ii) primary Indebtedness (or the re-financing thereof) incurred
solely with respect to the acquisition of real property or for
construction or redevelopment purposes, provided, that such primary
Indebtedness (or the re-financing thereof) does not exceed one hundred
percent (100%) of the appraised value of the acquired property at the time
of such financing or re-financing, as applicable.
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(b) In addition to the foregoing, (i) such pledges of stock or other
ownership interests in a Pledged Subsidiary may only be made to secure
Indebtedness incurred with respect to a project owned or to be acquired by such
Pledged Subsidiary and not to secure Indebtedness incurred with respect to a
project owned or to be acquired by any other Subsidiary; (ii) such pledges of
stock or other ownership interests in a Pledged Subsidiary given to secure
Indebtedness described in Section 8.11(a)(i) or Section 8.11(b)(iii)(Y) may be
made with respect to no more than fifteen (15) individual properties
collectively between the Borrower, all Subsidiaries and all Restricted Companies
(as defined in the Guaranty), at any one time, exclusive of the properties set
forth on Schedule 9.9A to the Guaranty and (iii) the aggregate of all such (X)
additional or mezzanine Indebtedness described in Section 8.11(a)(i) above and
(Y) primary Indebtedness described in Section 8.11(a)(ii) above in excess of
eighty percent (80%) of the appraised value of the property, in each case for
which such a pledge will be provided by the Borrower or a Subsidiary, shall not
exceed Two Hundred Million Dollars ($200,000,000) in the aggregate for all
pledges provided by the Borrower, its Subsidiaries and all Restricted Companies
(as defined in the Guaranty), taken together.
(c) The Borrower will deliver to the Agents and the Banks an updated
schedule in the form of Schedule 9.9 to the Guaranty listing all of the
properties as to which a pledge of stock or other ownership interest has been
provided to a lender in accordance with Section 8.11 (b)(ii) and (iii), within
forty-five (45) days after each Fiscal Quarterly Date.
SECTION 8.12. TRANSACTIONS WITH AFFILIATES. Except for loans permitted by
Section 8.06 of this Agreement, the Borrower will not and will not permit any of
its Subsidiaries to, enter into any transaction or series of transactions with
any Affiliate other than in the ordinary course of business and on terms and
conditions substantially as favorable as would be obtainable by the Borrower or
such Subsidiary, at the time, in a comparable arm's-length transaction with a
Person other than an Affiliate.
SECTION 8.13. DEBT SERVICE COVERAGE RATIO. The Borrower will not permit
the Debt Service Coverage Ratio in each case for the Test Period ending on each
Fiscal Quarterly Date to be less than 1.30:1.00.
SECTION 8.14(a). RESTRICTIONS ON DISTRIBUTIONS DURING AN EVENT OF DEFAULT
OTHER THAN A PAYMENT DEFAULT. If any Event of Default has occurred and is
continuing, or if any Event of Default would occur as a result of a Distribution
(as defined below), other than a Payment Default, the Borrower shall not
directly or indirectly declare, make, or pay any Dividends in respect of its
Capital Stock, or, notwithstanding any other provision of the Agreement to the
contrary, make any loans or advances to the Parent (any such Dividends, loans,
or advances are referred to hereinafter as "Distributions") in excess of the sum
of the amounts sufficient to pay, when due, all interest payments in respect of
the Senior Notes and the amounts sufficient to pay, when due, all taxes of the
Parent (collectively, "Permitted Distributions"); provided, that any Permitted
Distributions shall be applied by the Parent strictly to the permitted uses
specified above.
SECTION 8.14(b). RESTRICTIONS ON DISTRIBUTIONS DURING A PAYMENT DEFAULT.
In the event of and during the continuance of any Payment Default, or if a
Payment Default would occur as a result of a Distribution, the Borrower shall
not directly or indirectly declare or pay any Distributions to the Parent.
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SECTION 8.15. CROSS COLLATERALIZATION AND CROSS DEFAULTS
(a) Except as permitted in this Section 8.15, the Borrower shall not and
shall not permit any Subsidiary to:
(i) cross-default or agree to cross-default any Permitted Debt to
this Agreement or the Debt incurred hereunder;
(ii) agree to any financial covenants based on the performance of
the Borrower under any Permitted Debt (other than the Debt); or
(iii) cross-collateralize, or agree to cross-collateralize
Indebtedness owing to any one lender under one or more different loan
agreements or arrangements, provided, that the cross-defaulted and/or
cross-collateralized Indebtedness set forth on Schedule 8.15 attached
hereto shall be permitted.
(b) Notwithstanding Section 8.15(a) above:
(i) with respect to construction projects which are constructed in
multiple phases and/or stabilized properties, the Borrower and any
Subsidiary shall be permitted to cross-default and/or cross-collateralize
any Permitted Debt with other Permitted Debt (other than, in each case,
the Debt under this Agreement), but only if the phases to be
cross-collateralized and/or cross-defaulted consist of a single
identifiable project;
(ii) under the construction loan agreement or any other relevant
documents (other than a Completion Guaranty) relating to any Permitted
Debt (other than the Debt), any Subsidiary (but not the Borrower) shall be
permitted to cross-default or agree to cross-default such Permitted Debt
with this Agreement or the Debt, provided, that, the construction lender
shall not be permitted to call a default under its construction loan
agreement or other relevant documents due to an Event of Default under
this Agreement unless the Banks have provided a written notice of the
Event of Default to the Borrower and all applicable cure periods have
lapsed without remedy; provided, further, that the construction lender
shall not, under any circumstances, be permitted to call upon its
Completion Guaranty, if any, due to an Event of Default under this
Agreement; and
(iii) with respect to Hedge Agreements entered into by Forest City
Capital Corporation and permitted by this Agreement or the Guaranty, the
related documentation may provide that an Event of Default will constitute
an event of default under such Hedge Agreement, provided, that the Hedge
Agreement also provides that the counterparty may not terminate or have
any remedy under the Hedge Agreement on account of any Event of Default
unless (1) the Banks have provided a written notice of the Event of
Default to the Borrower, (2) all applicable cure periods have lapsed
without the Event of Default being cured and (3) the Banks may accelerate
the maturity of the Revolving Loans on the basis of the Event of Default.
SECTION 8.16. SENIOR NOTES. The Borrower shall not alter, amend, change or
modify the terms of any of the Senior Notes (a) to allow the maturity date of
any of the Senior Notes to be less than ten (10) years from the respective date
of issue, (b) to provide for payment
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of interest under any of the Senior Notes more frequently than quarterly, or (c)
to modify the redemption provisions contained therein, including adding
additional redemption provisions.
SECTION 8.17 CHANGES IN BUSINESS. The Borrower will not, and will not
permit any of its Subsidiaries to, materially alter the character of the
business of the Borrower and its Subsidiaries from that conducted on the Closing
Date.
ARTICLE IX
REPRESENTATIONS AND WARRANTIES
Subject only to such exceptions, if any, as may be fully disclosed in an
officer's certificate in the form of Schedule 9.00 hereto furnished by the
Borrower to each Bank prior to the execution and delivery hereof, the Borrower
represents and warrants as follows:
SECTION 9.01. EXISTENCE. The Borrower is a corporation duly organized and
validly existing in good standing under the laws of the State of Ohio and is
duly qualified to transact business and is in good standing as a foreign
corporation in all jurisdictions (other than jurisdictions in which the nature
of the property owned or business conducted, when considered in relation to the
absence of serious penalties, renders qualification as a foreign corporation
unnecessary as a practical matter) where the nature of the property owned and
business transacted by the Borrower render such qualification necessary. Each of
the Borrower's Subsidiaries is duly organized and existing in good standing in
the jurisdiction of its incorporation or formation. The Borrower and each of its
Subsidiaries has full power, authority, and legal right to own and operate its
respective properties and to carry on the business in which it engages and
intends to engage.
SECTION 9.02. RIGHT TO ACT. No registration with or approval of any
governmental agency of any kind is required for the due execution and delivery
or for the enforceability of this Agreement and any Note issued pursuant to this
Agreement. The Borrower has legal power and right to execute and deliver this
Agreement and any Note issued pursuant to this Agreement and to perform and
observe the provisions of this Agreement and any Note issued pursuant hereto and
all such actions have been duly authorized by all necessary corporate action of
the Borrower. By executing and delivering this Agreement and any Note issued
pursuant to this Agreement and by performing and observing the provisions of
this Agreement and any Note issued pursuant hereto, the Borrower will not
violate any existing provision of its Articles of Incorporation, Code of
Regulations or any applicable law or violate or otherwise become in default
under any existing contract, agreement, indenture or other obligation binding
upon the Borrower. The officers executing and delivering this Agreement on
behalf of the Borrower have been duly authorized to do so.
SECTION 9.03. BINDING EFFECT. This Agreement constitutes a valid and
binding agreement of the Borrower, and the Guaranty constitutes a valid and
binding agreement of the Parent, in both cases enforceable in accordance with
their respective terms, and the Notes, when executed and delivered in accordance
with this Agreement, will constitute valid and binding obligations of the
Borrower, enforceable in accordance with their respective terms.
SECTION 9.04. LITIGATION. No litigation or proceeding is pending or being
threatened against the Borrower, the Parent or any Subsidiary before any court
or any
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administrative agency which might, if successful, be expected to have a Material
Adverse Effect on the Borrower or the Parent. The Internal Revenue Service has
not alleged any default by the Borrower, the Parent or any Subsidiary in the
payment of any tax or threatened to make any assessment in respect thereof.
SECTION 9.05. EMPLOYEE RETIREMENT INCOME SECURITY ACT. No material Plan
established or maintained by the Borrower or any Domestic Subsidiary, which is
subject to Part 3 of Subtitle B of Title I of ERISA, had an accumulated funding
deficiency (as such term is defined in Section 302 of ERISA) as of the last day
of the most recent fiscal year of such Plan ended prior to the date hereof, or
would have had an accumulated funding deficiency (as so defined) on such day if
such year were the first year of such Plan to which Part 3 of Subtitle B of
Title I of that Act applied, and no material liability to the PBGC, has been, or
is expected by the Borrower or any Domestic Subsidiary to be, incurred with
respect to any such Plan by the Borrower or any Domestic Subsidiary.
SECTION 9.06. ENVIRONMENTAL COMPLIANCE. To the actual knowledge of the
Borrower, the Borrower and each Subsidiary are in compliance with any and all
Environmental Laws including, without limitation, all Environmental Laws in all
jurisdictions in which the Borrower or any Subsidiary owns or operates, or has
owned or operated, a facility or site, arranges or has arranged for disposal or
treatment of hazardous substances, solid waste or other wastes, accepts or has
accepted for transport any hazardous substances, solid waste or other wastes or
holds or has held any interest in real property or otherwise, for which failure
to comply is likely to result in claims, penalties or fines in excess of
$500,000 for any single claim of noncompliance or $5,000,000 in the aggregate
for all such claims and occurrences. No litigation or proceeding arising under,
relating to or in connection with any Environmental Law is pending or threatened
against the Borrower or any Subsidiary, any real property in which the Borrower
or any Subsidiary holds or has held an interest or any past or present operation
of the Borrower or any Subsidiary. To the actual knowledge of the Borrower, no
release, threatened release or disposal of hazardous waste, solid waste or other
wastes is occurring, or has occurred, on, under, from, or to any real property
in which the Borrower or any Subsidiary holds any interest or performs any of
its operations, in violation of any Environmental Law that could reasonably be
expected to result in claims of liability against the Borrower or any Subsidiary
in excess of $500,000 for any single claim or $5,000,000 in the aggregate for
all such claims. As used in this subsection, "litigation or proceeding" means
any demand, claim, notice, suit, suit in equity, action, administrative action,
investigation or inquiry whether brought by any governmental authority, private
person or entity or otherwise.
SECTION 9.07. SOLVENCY. The Borrower has received consideration which is
the reasonable equivalent value of the obligations and liabilities that the
Borrower has incurred to the Banks. The Borrower is not insolvent as defined in
any applicable state or federal statute, nor will the Borrower be rendered
insolvent by the execution and delivery of this Agreement or any Note to the
Banks. The Borrower is not engaged or about to engage in any business or
transaction for which the assets retained by it shall be an unreasonably small
capital, taking into consideration the obligations to the Banks incurred
hereunder. The Borrower does not intend to, nor does it believe that it will,
incur debts beyond its ability to pay them as they mature.
SECTION 9.08. FINANCIAL STATEMENTS. The annual financial statements of the
Borrower prepared as of January 31, 2003, certified by the Borrower's Chief
Financial Officer
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and heretofore furnished to each Bank, are true and complete, have been prepared
in accordance with GAAP applied on a basis consistent with those used by the
Borrower during its immediately preceding full fiscal year and fairly present
its financial condition as of those dates and the results of its operations for
the periods set forth therein. Since January 31, 2003, there has been no change
in the Borrower's financial condition, properties or business or in the
financial condition, properties or business of any Subsidiary, in each case that
has had or could reasonably be expected to have a Material Adverse Effect on the
Parent or the Borrower and its Subsidiaries taken as a whole.
SECTION 9.09. DEFAULTS. No Event of Default or Possible Default exists
hereunder, nor will any begin to exist immediately after the execution and
delivery hereof.
SECTION 9.10. OPERATIONS. The Borrower and its Subsidiaries have obtained
and continue to possess all permits, licenses and authorizations the absence of
which would materially and adversely affect the Borrower's or a Subsidiary's
ability to carry on its business in the ordinary course.
SECTION 9.11. TITLE TO PROPERTIES; PATENTS, TRADE MARKS, ETC. The Borrower
and its Subsidiaries have good and marketable title to all of their properties
and assets, including, without limitation, the properties and assets reflected
in the financial statements referred to in Section 9.08 (excepting, however,
inventory and other immaterial assets, in each case sold or otherwise disposed
of in the ordinary course of business subsequent to the date of such financial
statements). There are no Liens of any nature whatsoever on any of the
properties or assets of the Borrower and its Subsidiaries other than such as are
permitted under Section 8.05. The Borrower and its Subsidiaries owns or
possesses all the patents, trademarks, service marks, trade names, copyrights,
and licenses and rights with respect to the foregoing necessary for the conduct
of their respective businesses as now conducted, without any known conflict with
the valid rights of others which would be inconsistent with the conduct of its
business substantially as now conducted and as currently proposed to be
conducted.
SECTION 9.12. COMPLIANCE WITH OTHER INSTRUMENTS. The Borrower and, to the
best of the Borrower's knowledge, each Subsidiary is not in default in the
performance, observance or fulfillment of any of the material obligations,
covenants or conditions contained in any evidence of Indebtedness or Contingent
Obligations. Neither the execution and delivery of this Agreement, nor the
consummation of the transactions contemplated hereby, nor compliance with the
terms and provisions hereof will violate the provisions of any applicable law or
of any applicable order or regulations of any governmental authority having
jurisdiction over the Borrower or its Subsidiaries, or will conflict with any
material permit, license or authorization, or will conflict with or result in a
breach of any of the terms, conditions or provisions of any restriction or of
any agreement or instrument to which the Borrower is now a party, or will
constitute a default thereunder, or will result in the creation or imposition of
any Lien upon any of the properties or assets of the Borrower or any Subsidiary.
SECTION 9.13. MATERIAL RESTRICTIONS. Neither the Borrower, nor the Parent
nor any of their respective Subsidiaries are a party to any agreement or other
instrument or subject to any other restriction which would have a Materially
Adverse Effect on the Parent or the Borrower and its Subsidiaries taken as a
whole.
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SECTION 9.14. CORRECTNESS OF DATA FURNISHED. This Agreement and all
schedules and exhibits attached hereto do not contain any untrue statement of a
material fact or omit a material fact necessary to make the statements contained
herein or therein not misleading; and there is no fact not otherwise disclosed
in writing to the Agent which, to the knowledge of the Borrower, would have a
Material Adverse Effect on the Borrower and its Subsidiaries.
SECTION 9.15. TAXES. The Borrower, the Parent and each of their respective
Subsidiaries has (a) timely filed all returns required to be filed by it with
respect to all taxes, (b) paid all taxes shown to have become due pursuant to
such returns, and (c) paid all other taxes for which a notice of assessment or
demand for payment has been received other than taxes that the Borrower, the
Parent or such Subsidiary is contesting in good faith with appropriate
proceedings. All tax returns have been prepared in accordance with all
applicable laws and requirements and accurately reflect in all material respects
the taxable income (or other measure of tax) of the Borrower, the Parent or such
Subsidiary filing the same. The accruals for taxes contained in the financial
statements referred to in Section 9.08 are adequate under GAAP to cover all
liabilities for taxes for all periods ending on or before the date of such
financial statements and include adequate provision for all deferred taxes
(including deferred federal taxes), and nothing has occurred subsequent to that
date to make any of such accruals inadequate. All taxes for periods beginning
after the date of this Agreement through and including the Closing Date have
been paid or are adequately reserved against on the books of the Borrower or the
Parent, as applicable. The Borrower, the Parent and each of their respective
Subsidiaries has timely filed all information returns or reports which are
required to be filed and has accurately reported all information required to be
included on such returns or reports. There are no proposed assessments of taxes
against the Borrower, the Parent or any of their respective Subsidiaries nor
proposed adjustments to any tax return filed that, individually or in the
aggregate, would have a Material Adverse Effect on the Borrower or the Parent.
SECTION 9.16. COMPLIANCE WITH LAWS. Except as disclosed on Schedule 9.16,
the Borrower and, to the best of the Borrower's knowledge, the Parent and each
of their respective Subsidiaries is in compliance in all material respects with
all material laws, rules, regulations, court orders and decrees, and orders of
any governmental agency which are applicable to the Borrower, the Parent or
their respective Subsidiaries or to their respective properties.
SECTION 9.17. REGULATION U, ETC. The Borrower does not own, nor does it
have any present intention of acquiring, any "margin stock" within the meaning
of Regulation U (12 CFR Part 221) of the Board of Governors of the Federal
Reserve System (herein called "margin stock"). The proceeds of the Loans will
not be used, directly or indirectly, by the Borrower for the purpose of
purchasing or carrying, or for the purpose of reducing or retiring any
Indebtedness or other liability which was originally incurred to purchase or
carry, any margin stock or for any other purpose which might cause the
transactions contemplated hereby to be considered a "purpose credit" within the
meaning of said Regulation U, or which might cause this Agreement to violate
Regulation U, Regulation T, Regulation X or any other regulation of the Board of
Governors of the Federal Reserve System or the Securities Exchange Act of 1934.
Upon request, the Borrower will promptly furnish the Agent with a statement in
conformity with the requirements of Federal Reserve Form U-1 referred to in said
Regulation U.
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SECTION 9.18. HOLDING COMPANY ACT. The Borrower is not a "Holding Company"
or a "Subsidiary Company" of a "Holding Company", or an "Affiliate" of a
"Holding Company" or of a "Subsidiary Company" of a "Holding Company", as such
terms are defined in the Public Utility Holding Company Act of 1935, as amended.
SECTION 9.19. SECURITIES ACT, ETC. Neither the registration of any
security under the Securities Act of 1933, as amended, or any other federal,
state or local securities laws, nor the qualification of the Agreement, the
Notes and/or the Guaranty under the Trust Indenture Act of 1939, as amended, is
required in connection with the Loans or the issuance and delivery of the Notes
pursuant hereto.
SECTION 9.20. INVESTMENT COMPANY ACT. The Borrower is not, nor immediately
after the application by the Borrower of the proceeds of each Loan will the
Borrower be, an "investment company" within the meaning of the Investment
Company Act of 1940, as amended.
SECTION 9.21. INDEBTEDNESS OF SUBSIDIARIES. No Subsidiary has any
Indebtedness other than (a) on terms that limit recourse for the payment thereof
to the real property or other assets of the Subsidiary securing such
Indebtedness, provided, that the assets securing such Indebtedness were acquired
or developed with the proceeds of such Indebtedness, (b) such Indebtedness owed
by a Subsidiary, the sole assets of which consist of contiguous parcels of land,
the improvements, if any, thereon, furniture, fixtures and other equipment used
in connection therewith, receivables arising from tenants in connection
therewith and the proceeds of such receivables and other property directly
obtained from the ownership of such assets, or (c) Indebtedness permitted under
Section 8.04, 8.06 or 8.07(e) of this Agreement.
SECTION 9.22. GUARANTIES. (a) All outstanding guaranties, including, but
not limited to Completion Guaranties, issued by the Parent and the maximum
amounts guaranteed pursuant to each such guaranty are set forth on Schedule 9.22
attached hereto.
(b) With respect to each Completion Guaranty set forth on Schedule 9.22,
the Parent has received a budget for the relevant construction project and any
interest reserve provided in connection therewith is available to the
construction lender only through project completion and not through
stabilization of the project.
SECTION 9.23. INDEBTEDNESS. Schedule 9.23 attached hereto sets forth a
complete and accurate list of all Indebtedness, of each of the Parent and the
Borrower (other than the Loans and intercompany Indebtedness), not otherwise
disclosed on the most recent financial statements delivered by the Borrower to
the Banks or by the Parent to the Banks, as applicable. All intercompany
Indebtedness of the Parent and the Borrower is subordinated in all respects to
the Borrower's Debt to the Banks.
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ARTICLE X
EVENTS OF DEFAULT
Each of the following shall constitute an event of default (each an "Event
of Default") hereunder:
SECTION 10.01. PAYMENTS. If all or any installment of the principal of, or
interest on, any Note, or any fee provided hereunder shall not be paid in full
punctually when due and payable.
SECTION 10.02. COVENANTS(a). If the Borrower shall fail or omit to perform
or observe any agreement or other provision contained or referred to in Sections
7.13(a), 7.15, 7.16(a), 7.17 or Article 8 of this Agreement; or
(b) If the Borrower shall fail or omit to perform or observe any agreement
or other provision (other than those referred to in Sections 10.01 or 10.02(a)
hereof) contained or referred to in this Agreement or any Related Writing that
is on the Borrower's part to be complied with, and the Borrower shall not have
corrected such failure or omission within thirty (30) days after the giving of
written notice thereof to the Borrower by the Agent or any Bank that the
specified default is to be remedied.
SECTION 10.03. REPRESENTATIONS AND WARRANTIES. If any representation,
warranty or statement made in or pursuant to this Agreement or any Related
Writing or any other material information furnished by the Borrower to the
Agents, the Banks or any thereof or any other holder of any Note, shall be false
or erroneous in any material respect.
SECTION 10.04. CROSS DEFAULT. If the Borrower and/or any Subsidiary
defaults in any payment of principal or interest due and owing upon any
Indebtedness (other than the Debt) in excess of $1,000,000, or, in the case of
the Borrower, in the payment or performance of any obligation permitted to be
outstanding or incurred pursuant to Sections 8.04 or 8.05, 8.06, or 8.07 hereof
in excess of $1,000,000, beyond any period of grace provided with respect
thereto or in the performance of any other agreement, term or condition
contained in any agreement under which any such obligation is created, if the
effect of such default is to accelerate the maturity of the related Indebtedness
or to permit the holder thereof to cause such Indebtedness to become due prior
to its stated maturity or foreclose on any lien on property of the Borrower
securing the same, except that defaults in payment or performance of
non-recourse obligations of the Borrower or any Subsidiary shall not constitute
Events of Default under this Section 10.04 unless such defaults have,
individually or in the aggregate, a Material Adverse Effect on the Borrower.
SECTION 10.05. TERMINATION OF PLAN. If (a) any Reportable Event occurs and
the Banks, in their sole determination, deem such Reportable Event to constitute
grounds (i) for the termination of any Plan by the PBGC or (ii) for the
appointment by the appropriate United States district court of a trustee to
administer any Plan and such Reportable Event shall not have been fully
corrected or remedied to the full satisfaction of the Banks within thirty (30)
days after the giving of written notice of such determination to the Borrower by
the Banks or (b) any Plan shall be terminated within the meaning of Title IV of
ERISA or (c) a trustee shall be appointed by the appropriate United States
district court to administer any Plan, or (d) the PBGC shall institute
proceedings to terminate any Plan or to appoint a trustee to administer any
Plan.
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SECTION 10.06. DOMESTIC SUBSIDIARY SOLVENCY. If (a) any Domestic
Subsidiary shall (i) generally not pay its debts as such debts become due, or
(ii) make a general assignment for the benefit of creditors, or (iii) apply for
or consent to the appointment of a receiver, a custodian, a trustee, an interim
trustee or liquidator of itself or all or a substantial part of its assets, or
(iv) be adjudicated a debtor or have entered against it an order for relief
under Title 11 of the United States Code, as the same may be amended from time
to time, or (v) file a voluntary petition in bankruptcy or file a petition or an
answer seeking reorganization or an arrangement with creditors or seeking to
take advantage of any other law (whether federal or state) relating to relief of
debtors, or admit (by answer, by default or otherwise) the material allegations
of a petition filed against it in any bankruptcy, reorganization, insolvency or
other proceeding (whether federal or state) relating to relief of debtors, or
(vi) suffer or permit to continue unstayed and in effect for thirty (30)
consecutive days any judgment, decree or order, entered by a court of competent
jurisdiction, which approves a petition seeking its reorganization or appoints a
receiver, custodian, trustee, interim trustee or liquidator of itself or of all
or a substantial part of its assets, or (vii) take or omit to take any other
action in order thereby to effect any of the foregoing or (viii) fail to pay and
discharge all lawful taxes, assessments and governmental charges or levies
imposed upon it or its income, profits, or properties, and/or all lawful claims
for labor, materials and supplies, which, if unpaid, might become a lien or
charge against such properties, in all cases before the same shall become in
default, or (ix) fail to comply with any and all Environmental Laws applicable
to such Domestic Subsidiary, its properties or activities, or (x) fail to
observe, perform or fulfill any of its obligations, covenants or conditions
contained in any evidence of Indebtedness or Contingent Obligations or other
contract, decree, order, judgment, or instrument to which such Domestic
Subsidiary is a party or by which it or its assets are bound, and (b) any such
event or events described in (a) above shall in the reasonable judgment of the
Banks have a Material Adverse Effect on the Borrower.
SECTION 10.07. BORROWER'S SOLVENCY. If the Borrower shall (a) discontinue
business, or (b) generally not pay its debts as such debts become due, or (c)
make a general assignment for the benefit of creditors, or (d) apply for or
consent to the appointment of a receiver, a custodian, a trustee, an interim
trustee or liquidator of all or a substantial part of its assets, or (e) be
adjudicated a debtor or have entered against it an order for relief under Title
11 of the United States Code, as the same may be amended from time to time (the
"Bankruptcy Code"), or (f) file a voluntary petition under any chapter or
provision of the Bankruptcy Code or file a petition or an answer seeking
reorganization or an arrangement with creditors or seeking to take advantage of
any other law (whether federal or state) relating to relief of debtors, or admit
(by answer, by default or otherwise) the material allegations of a petition
filed against it in any bankruptcy, reorganization, insolvency or other
proceeding (whether federal or state) relating to relief of debtors, or (g)
suffer or permit to continue unstayed and in effect for thirty (30) consecutive
days any judgment, decree or order entered by a court or governmental commission
of competent jurisdiction, which assumes custody or control of the Borrower,
approves a petition seeking reorganization of the Borrower or any other judicial
modification of the rights of its creditors, or appoints a receiver, custodian,
trustee, interim trustee or liquidator for the Borrower or of all or a
substantial part of its assets, or (h) take or omit to take any action in order
thereby to effect any of the foregoing.
SECTION 10.08. CHANGE OF OWNERSHIP; CHANGE OF MANAGEMENT EVENT. If a
Change of Ownership Event or a Change of Management Event shall occur.
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SECTION 10.09. JUDGMENTS. If one or more judgments or decrees shall be
entered against the Borrower involving a liability (not paid or fully covered by
a reputable and solvent insurance company) in excess of $10,000,000 for all such
judgments or decrees and any such judgments or decrees shall not have been
vacated, discharged, stayed or bonded pending appeal within sixty (60) days from
the entry thereof.
SECTION 10.10. DEFAULT UNDER GUARANTY OR SENIOR NOTES. If the Parent
defaults in the payment or performance of any obligation in the Guaranty or in
the performance of any other agreement, covenant, term or condition in the
Guaranty, or in the payment or performance of any obligation under any of the
Senior Notes or the Indenture (after giving effect to any applicable grace
periods), or in the performance of any other agreement, covenant, term or
condition in any of the Senior Notes or the Indenture (after giving effect to
any applicable grace periods).
SECTION 10.11. DEFAULT UNDER SUBORDINATION AGREEMENT. If the Parent
defaults in the performance of any obligation in any Subordination Agreement or
in the performance of any other agreement, covenant, term or condition in any
Subordination Agreement (which default shall only be an Event of Default
hereunder when the Agent provides written notice of such default to the Parent
and/or the Borrower).
ARTICLE XI
REMEDIES UPON DEFAULT
Notwithstanding any contrary provision or inference herein or elsewhere,
the Banks may take any or all of the following actions if any Event of Default
occurs and is continuing:
SECTION 11.01. OPTIONAL DEFAULTS. If any Event of Default referred to in
Sections 10.01, 10.02(a), 10.02(b), 10.03, 10.04, 10.05, 10.06, 10.07 (other
than Section 10.07 (e), (f), (g) or (h) (solely as it relates to Section
10.07(a), (b), (c) or (d)) and/or Section 10.08, 10.09, 10.10 (other than an
Event of Default (as defined in the Guaranty) under Section 10(g) or 10(h) of
the Guaranty) or 10.11 shall occur, the Required Banks shall have the right in
their discretion, by directing the Agent, on behalf of the Banks, to give
written notice to the Borrower, and to
(a) terminate the Commitments and the credits hereby established and any
letter of credit which may be terminated in accordance with its terms, in each
case, if not theretofore terminated, and forthwith upon such election the
obligations of the Banks, and each thereof, to make any further Loan or Loans
and/or issue further letters of credit hereunder immediately shall be
terminated, and/or
(b) accelerate the maturity of all of Borrower's Debt to the Banks (if it
is not already due and payable), whereupon all of Borrower's Debt to the Banks
shall become and thereafter be immediately due and payable in full without any
presentment or demand and without any further or other notice of any kind, all
of which are hereby waived by the Borrower.
SECTION 11.02. AUTOMATIC DEFAULTS. If any Event of Default referred to in
Section 10.07(e), 10.07(f), 10.07(g), 10.07 (h) (solely as it relates to Section
10.07(e), (f) or (g))
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or 10.10 (with regard to an Event of Default (as defined in the Guaranty) under
Section 10(g) or 10(h) of the Guaranty) hereof shall occur,
(a) all of the Commitments and the credits hereby established shall
automatically and forthwith terminate, if not theretofore terminated, and no
Bank thereafter shall be under any obligation to grant any further Loan or Loans
and/or issue further letters of credit hereunder, and
(b) the principal of and interest on all Notes then outstanding, and all
of Borrower's Debt to the Banks shall thereupon become and thereafter be
immediately due and payable in full (if it be not already due and payable), all
without any presentment, demand or notice of any kind, all of which are hereby
waived by the Borrower.
SECTION 11.03. REMEDIES RELATING TO LETTERS OF CREDIT. In the event the
Commitments are terminated and/or the Debt is accelerated pursuant to Sections
11.01 or 11.02 above, the Borrower shall immediately deposit with the Agent an
amount of cash equal to the then aggregate amount of the stated amounts of all
letters of credit outstanding hereunder as security for reimbursement of any
drawings made on any such letters of credit and as collateral for repayment of
the Debt or any part thereof.
SECTION 11.04. OFFSETS. If there shall occur or exist any Possible Default
under Section 10.07 hereof or if the maturity of the Notes is accelerated
pursuant to Sections 11.01 or 11.02 hereof, each Bank shall have the right at
any time to set off against, and to appropriate and apply toward the payment of,
any and all Debt then owing by Borrower to that Bank (including, without
limitation, any participation purchased or to be purchased pursuant to Section
12.12 hereof), whether or not the same shall then have matured, any and all
deposit balances and all other Indebtedness then held or owing by that Bank to
or for the credit or account of the Borrower, all without notice to or demand
upon the Borrower or any other Person, all such notices and demands being hereby
expressly waived by the Borrower.
SECTION 11.05. APPLICATION OF PAYMENTS. Notwithstanding any other
provision of this Agreement, upon the occurrence and during the continuance of
an Event of Default, the Borrower waives any right it may have to direct the
application of any and all payments received by the Agent or the Banks on
account of the Debt and the Borrower agrees that the Agent and each Bank shall
have the right, in its sole and absolute discretion, to apply and re-apply any
and all such payments in such manner as the Agent or such Bank may deem
advisable, subject to the Pro rata sharing of any such payments among the Banks.
ARTICLE XII
THE AGENT
SECTION 12.01. APPOINTMENT AND AUTHORIZATION. Each Bank hereby irrevocably
designates and appoints KeyBank National Association as the Agent of such Bank
to act as specified in this Agreement and each such Bank hereby irrevocably
authorizes KeyBank National Association to take such action as the Agent on its
behalf and to exercise such powers and perform such duties hereunder as are
expressly delegated to the Agent by the terms of this Agreement or any Related
Writing, together with such other powers as are reasonably incidental thereto.
The Agent agrees to act as such upon the express conditions contained in this
Article XII. Notwithstanding any provision to the contrary elsewhere in this
Agreement, the
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Agent shall not have any duties or responsibilities, except those expressly set
forth in this Agreement, or any fiduciary relationship with any Bank or
participant, and no implied covenants, functions, responsibilities, duties,
obligations or liabilities shall be read into, created by or arise under this
Agreement or any Related Writing or otherwise exist against the Agent. Without
limiting the generality of the foregoing sentence, the use of the term "agent"
herein and in the Related Writings with reference to any Agent is not intended
to connote any fiduciary or other implied (or express) obligations arising under
agency doctrine of any applicable law. Instead, such term is used merely as a
matter of market custom, and is intended to create or reflect only an
administrative relationship between independent contracting parties. Subject to
the provisions of Sections 12.03 and 12.11, the Agent shall administer the Loans
in the same manner as it administers its own loans. The provisions of this
Article XII are solely for the benefit of the Agent and the Banks, and neither
the Borrower, the Parent nor any of their respective Subsidiaries shall have any
rights as a third party beneficiary of any of the provisions hereof. In
performing its functions and duties under this Agreement, the Agent shall act
solely as agent of the Banks and the Agent does not assume and shall not be
deemed to have assumed any obligation or relationship of agency or trust with or
for the Borrower, the Parent or their respective Subsidiaries.
SECTION 12.02. DELEGATION OF DUTIES. The Agent may execute any of its
duties under this Agreement, the Notes or any Related Writing by or through
agents, employees or attorneys-in-fact and shall be entitled to advice of
counsel and other consultants or experts concerning all matters pertaining to
such duties. The Agent shall not be responsible for the negligence or misconduct
of any agents or attorneys-in-fact selected by it in the absence of gross
negligence or willful misconduct.
SECTION 12.03. LIABILITY OF AGENT. Neither the Agent nor any of its
officers, directors, employees, agents, attorneys-in-fact or affiliates shall be
(a) liable for any action lawfully taken or omitted to be taken by such Person
under or in connection with this Agreement, the Notes or the other Related
Writings or the transactions contemplated hereby (except for its or such
Person's own gross negligence or willful misconduct in connection with its
duties expressly set forth herein) or (b) responsible in any manner to any of
the Banks or any participant for any recitals, statements, representations or
warranties made by the Borrower, the Parent, or any of their respective
Subsidiaries or any of their responsible officers, contained in this Agreement
or any Related Writing, or for any failure of the Borrower, the Parent or any of
their respective Subsidiaries or any of their respective officers, or any other
party to this Agreement or any Related Writing to perform its obligations
hereunder or thereunder, or for the validity, effectiveness, genuineness,
enforceability or sufficiency of this Agreement or any Related Writing. Each
Bank by its signature to this Agreement acknowledges and agrees that the Agent
has made no representation or warranty, express or implied, with respect to the
creditworthiness, financial condition or any other condition of Borrower, the
Parent or any Subsidiary, or with respect to the statements contained in any
information memorandum furnished in connection herewith or in any other oral or
written communication between the Agent and such Bank. Each Bank represents that
it has made and shall continue to make its own independent investigation of the
creditworthiness, financial condition and affairs of Borrower, the Parent and
any Subsidiary in connection with the extension of credit hereunder, and agrees
that the Agent has no duty or responsibility, either initially or on a
continuing basis, to provide any Bank with any credit or other information with
respect thereto (other than such notices as
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may be expressly required to be given by Agent to the Banks hereunder), whether
coming into its possession before the granting of the first Loans or at any time
or times thereafter. The Agent shall not be under any obligation to any Bank or
participant to ascertain or to inquire as to the observance or performance of
any of the agreements contained in, or conditions of, this Agreement or any
Related Writing, or to inspect the properties, books or records of the Parent,
the Borrower, any of their Subsidiaries or any Affiliate of any of them.
SECTION 12.04. RELIANCE BY AGENT. (a) The Agent shall be entitled to rely,
and shall be fully protected in relying, upon any note, writing, resolution,
signature, notice, consent, certificate, affidavit, letter, cablegram, facsimile
transmission, telex or teletype message, electronic mail message, statement,
order or other document or conversation reasonably believed by it to be genuine
and correct and to have been signed, sent or made by the proper Person or
Persons and upon advice and statements of legal counsel (including counsel to
the Borrower or the Parent), independent accountants and other experts selected
by the Agent. The Agent shall be fully justified in failing or refusing to take
any action under this Agreement or the Notes or any Related Writing unless it
shall first receive such advice or concurrence of the Required Banks or the
Super Majority Banks, as it deems appropriate, and, if it so requests, it shall
first be indemnified to its satisfaction by the Banks against any and all
liability and expense which may be incurred by it by reason of taking or
continuing to take any such action. The Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Agreement, the
Notes or the other Related Writings in accordance with a request or consent of
the Required Banks or the Super Majority Banks, as applicable, and such request
and any action or failure to act pursuant thereto shall be binding upon all the
Banks.
(b) For purposes of determining compliance with the conditions specified
in Article VI, each Bank that has signed this Agreement shall be deemed to have
consented to, approved or accepted or to be satisfied with, each document or
other matter required thereunder to be consented to or approved by or acceptable
or satisfactory to a Bank unless the Agent shall have received written notice
from such Bank prior to the Closing Date or from an Additional Bank prior to the
applicable Additional Bank Assumption Effective Date, as applicable, specifying
its objection thereto.
SECTION 12.05. RESIGNATION OR REMOVAL OF THE AGENT; SUCCESSOR AGENT. The
Agent may resign upon twenty (20) days' notice to the Banks or the Agent may be
removed by the vote of the Required Banks (excluding the Agent). Upon the
resignation or removal of the Agent, the Required Banks shall appoint from among
the Banks a successor Agent for the Banks subject to prior approval of the
Borrower so long as no Possible Default or Event of Default then exists (such
approval not to be unreasonably withheld or delayed), whereupon such successor
agent shall succeed to the rights, powers and duties of the Agent, and the term
"Agent" shall include such successor agent effective upon its appointment, and
the resigning or removed Agent's rights, powers and duties as the Agent shall be
terminated, without any other or further act or deed on the part of the former
Agent or any of the parties to this Agreement. After the resignation or removal
of the Agent hereunder, the provisions of this Article XII shall inure to its
benefit as to any actions taken or omitted to be taken by it while it was Agent
under this Agreement. In the event no successor agent has been appointed by the
end of such twenty (20) day period in the case of a resignation or upon the
removal of the Agent by the Required Banks (excluding the Agent), the
resignation or removal of the Agent shall become
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effective and the Required Banks shall perform the duties of the Agent until a
successor agent is appointed.
SECTION 12.06. NOTE HOLDERS. The Agent may deem and treat the payee of any
Note as the holder thereof for all purposes unless and until written notice of
the assignment, transfer or endorsement thereof, as the case may be, shall have
been filed with the Agent. Any request, authority or consent of any Person or
entity who, at the time of making such request or giving such authority or
consent, is the holder of any Note shall be conclusive and binding on any
subsequent holder, transferee, assignee or indorsee, as the case may be, of such
Note or of any Note or Notes issued in exchange therefor.
SECTION 12.07. CONSULTATION WITH COUNSEL. (a) The Agent may consult with
legal counsel reasonably selected by it and shall not be liable for any action
taken or suffered in good faith by it in accordance with the opinion of such
counsel.
(b) Should the Agent (i) employ counsel for advice or other representation
(whether or not any suit has been or shall be filed) with respect to this
Agreement, the Notes or any of the Related Writings, or (ii) commence any
proceeding or in any way seek to enforce its rights or remedies under this
Agreement, the Notes or any Related Writing, each Bank, upon demand therefor
from time to time, shall contribute its share (based on its Pro rata share) of
the reasonable costs and/or expenses of any such advice or other representation,
enforcement or acquisition, including, but not limited to, fees of receivers,
court costs and fees and expenses of attorneys to the extent not otherwise
reimbursed by Borrower; provided, that the Agent shall not be entitled to
reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between the Agent and the other Banks unless the
Agent shall be the prevailing party in any such dispute and, provided, further,
that the Agent shall only be entitled to such reimbursement from those Banks
that were involved in the dispute with the Agent. Any loss of principal and
interest resulting from any Event of Default shall be shared by the Banks in
accordance with their respective Pro rata shares.
SECTION 12.08. DOCUMENTS. The Agent shall not be under a duty to examine
into or pass upon the validity, effectiveness, genuineness or value of this
Agreement, the Notes or any other Related Writing furnished pursuant hereto or
in connection herewith or the value of any collateral obtained hereunder, and
the Agent shall be entitled to assume that the same are valid, effective and
genuine and what they purport to be.
SECTION 12.09. KNOWLEDGE OF DEFAULT. It is expressly understood and agreed
that the Agent shall not be deemed to have knowledge or notice of the occurrence
of any Possible Default or Event of Default hereunder (other than the failure to
make available to the Agent any principal of or interest on the Loans for the
account of the Banks as required under this Agreement and the Notes), unless the
Agent has actually received written notice from a Bank or the Borrower
describing such Possible Default or Event of Default and stating that such
notice is a "notice of default." In the event that the Agent receives such a
notice, the Agent shall give prompt notice thereof to the Banks. The Agent shall
take such action with respect to such Default or Event of Default as shall be
reasonably directed by the Required Banks; provided, that unless and until the
Agent shall have received such directions, the Agent may (but shall not be
obligated to) take such action, or refrain from taking such action, with respect
to such Possible Default or Event of Default as it shall deem advisable or in
the best interests of the Banks.
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SECTION 12.10. INDEMNIFICATION. Whether or not the transactions
contemplated hereby are consummated, the Banks agree to indemnify upon demand
the Agent in its capacity as such (to the extent not reimbursed by the Borrower
and without limiting the Borrower's obligation to do so), Pro rata according to
the respective principal amounts of their Commitment from and against any and
all liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind or nature whatsoever which
may be imposed on, incurred by or asserted against the Agent in its capacity as
agent in any way relating to or arising out of this Agreement, the Notes or any
Related Writing, or the transactions contemplated hereby or thereby, or any
action taken or omitted to be taken by the Agent under or in connection with the
foregoing, provided, that no Bank shall be liable to the Agent for any portion
of such liabilities, obligations, losses, damages, penalties, actions,
judgments, suits, costs, expenses or disbursements to the extent determined in a
final, non-appealable judgment by a court of competent jurisdiction to have
resulted from the Agent's gross negligence, willful misconduct or from any
action taken or omitted by the Agent in any capacity other than as agent under
this Agreement, provided, that no action taken in accordance with the directions
of the Required Lenders or the Super Majority Lenders, as applicable, shall be
deemed to constitute gross negligence or willful misconduct for purposes of this
Section 12.10. If any indemnity furnished to the Agent for any purpose shall, in
the reasonable opinion of the Agent, be insufficient or become impaired, the
Agent may call for additional indemnity and cease, or not commence, to do the
acts indemnified against until such additional indemnity is furnished. The
agreements in this Section 12.10 shall survive the termination of this
Agreement, the payment of the Debt and the resignation of the Agent. Without
limitation of the foregoing, each Bank shall reimburse the Agent upon demand for
its Pro rata share of any costs or out-of-pocket expenses (including reasonable
attorneys' fees) incurred by the Agent in connection with the preparation,
negotiation, execution, delivery, administration, modification, amendment or
enforcement (whether through negotiations, legal proceedings or otherwise) of,
or legal advice in respect of rights or responsibilities under, this Agreement,
any Related Writing or any document contemplated by or referred to herein, to
the extent that the Agent is not reimbursed for such costs or expenses by or on
behalf of the Borrower.
SECTION 12.11. AGENTS IN THEIR INDIVIDUAL CAPACITIES. KeyBank National
Association, National City Bank and their respective Affiliates may make loans
to, issue letters of credit for the account of, accept deposits from, acquire
equity interests in and generally engage in any kind of banking, trust,
financial advisory, underwriting or other business with each of the Parent, the
Borrower and their respective Subsidiaries as though KeyBank National
Association or National City Bank, as applicable, were not an Agent and, without
notice to or consent of the Banks. The Banks acknowledge that, pursuant to such
activities, KeyBank National Association, National City Bank or their respective
Affiliates may receive information regarding the Parent, the Borrower or their
Subsidiaries (including information that may be subject to confidentiality
obligations in favor of the Parent, the Borrower or their Subsidiaries) and
acknowledge that the Agents shall be under no obligation to provide such
information to them. With respect to its Loans, each of KeyBank National
Association and National City Bank and their respective Affiliates shall have
the same rights and powers under this Agreement as any other Bank and may
exercise such rights and powers as though it were not the Agent or the
Syndication Agent, as the case may be, and the terms "Bank" and "Banks" include
KeyBank National Association and National City in their individual capacities.
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SECTION 12.13. EQUALIZATION PROVISION. Each Bank agrees with the other
Banks that if it at any time shall obtain any Advantage over the other Banks or
any thereof in respect of Borrower's Debt to the Banks including without
limitation in respect of the letters of credit described in Schedule 3.01 hereof
(except under Sections 4.06, 4.07, 4.08, 4.09, 4.10 and/or 4.11, hereof), it
will purchase from the other Banks, for cash and at par, such additional
participation in Borrower's Debt to the Banks as shall be necessary to nullify
the Advantage. If any said Advantage resulting in the purchase of an additional
participation as aforesaid shall be recovered in whole or in part from the Bank
receiving the Advantage each such purchase shall be rescinded, and the purchase
price restored (but without interest unless the Bank receiving the Advantage is
required to pay interest on the Advantage to the Person recovering the Advantage
from such Bank) ratably to the extent of the recovery. Each Bank further agrees
with the other Banks that if it at any time shall receive any payment from or on
behalf of Borrower on any Indebtedness owing by the Borrower to that Bank by
reason of offset of any deposit or other Indebtedness, it will apply such
payment first to any and all Debt owing by Borrower to that Bank pursuant to
this Agreement (including, without limitation, any participation purchased or to
be purchased pursuant to this Section 12.13) until Borrower's Debt has been paid
in full. The Borrower agrees that any Bank so purchasing a participation from
the other Banks pursuant to this Section may exercise all its rights of payment
(including the right of set-off) with respect to such participation as fully as
if such Bank were a direct creditor of the Borrower in the amount of such
participation.
ARTICLE XIII
MISCELLANEOUS
SECTION 13.01. NO WAIVER; CUMULATIVE REMEDIES. No failure or delay on the
part of the Agent or any Bank in exercising any right, power or privilege
hereunder and no omission or course of dealing on the part of Agent, any Bank or
the holder of any Note in exercising any right, power or remedy hereunder shall
operate as a waiver thereof; nor shall any single or partial exercise of any
such right, power or remedy preclude any other or further exercise thereof or
the exercise of any other right, power or remedy hereunder. The remedies herein
provided are cumulative and in addition to any other rights, powers or
privileges that the Agent or any Bank would otherwise have. No notice to or
demand on the Borrower in any case shall entitle the Borrower to any other or
further notice or demand in similar or other circumstances or constitute a
waiver of the rights of the Agent or the Banks to any other or further action in
any circumstances without notice or demand.
SECTION 13.02. AMENDMENTS, CONSENTS. No amendment, modification,
termination, or waiver of any provision of this Agreement or of the Notes or of
the Guaranty, nor consent to any variance therefrom, shall be effective unless
the same shall be in writing and signed by the Required Banks, the Super
Majority Banks or all of the Banks as appropriate under this Section 13.02, and
any such waiver or consent shall be effective only in the specific instance and
for the specific purpose for which given. Unanimous consent of the Banks, or, if
there is any borrowing hereunder, the holders of one hundred percent (100%) (by
outstanding principal amount) of the Notes, shall be required with respect to
(i) any increase in any Commitment, the extension of maturity of the Notes or
the payment date of interest thereunder, (ii) any reduction in the rate of
interest on the Notes, or in any amount of principal or interest due on any Note
or in the amount of any fees or other amounts due to the Banks (or any of them)
hereunder or under
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the Related Writings or any change in the manner of Pro rata application of any
payments made by the Borrower to the Banks hereunder, or any change in
amortization schedules, or in the manner of calculating fees or prepayment
penalties, (iii) any change in any percentage voting requirements in this
Agreement, or (iv) the release of all of the value of the Guaranty, or any
material amendment or modification thereto, or any other guarantee in favor of
the Banks, or (v) any amendment to the definitions of Required Banks, Super
Majority Banks or Reference Banks set forth herein or to this Section 13.02, or
(vi) any material amendment to any representation, warranty, covenant, Possible
Default, Event of Default or remedy provided for hereunder or under any Related
Writing. The consent of the holders of eighty percent (80%)(by outstanding
principal amount) of the Notes (the "Super Majority Banks") shall be required
for any amendments, modifications or other changes to Section 8.13 or to Section
9.14 of the Guaranty. Notice of amendments or consents ratified by the Banks
hereunder shall immediately be forwarded by the Agent to all Banks. Each Bank or
other holder of a Note shall be bound by any amendment, waiver or consent
obtained as authorized by this Section 13.02, regardless of its failure to agree
thereto.
SECTION 13.03. NOTICES. Except as otherwise expressly provided herein, all
notices, requests, demands and other communications provided for hereunder shall
be in writing (including telegraphic, telex, facsimile, transmission or cable
communication) and mailed, telexed, telegraphed, facsimile transmitted, cabled
or delivered, if to the Borrower, addressed to it at the address specified on
the signature pages of this Agreement, if to a Bank, addressed to the address of
such Bank specified on the signature pages of this Agreement and if to the
Agents, addressed to them at the address of the Agent or the Syndication Agent,
as applicable, specified on the signature pages of this Agreement. All notices,
statements, requests, demands and other communications provided for hereunder
shall be deemed to be given or made when delivered or forty-eight (48) hours
after being deposited in the mails with postage prepaid by registered or
certified mail or delivered to a telegraph company, addressed as aforesaid,
except that notices from the Borrower to the Agent or the Banks pursuant to any
of the provisions hereof shall not be effective until received by the Agent or
the Banks.
SECTION 13.04. COSTS, EXPENSES AND TAXES. The Borrower agrees to pay on
demand all costs and expenses of the Banks and the Agents, and any expenses
incurred in connection with the preparation of this Agreement, the Notes and any
Related Writings, including, without limitation (i) administration and
out-of-pocket expenses of the Agent in connection with the administration of
this Agreement, the Notes, the collection and disbursement of all funds
hereunder and the other instruments and documents to be delivered hereunder,
(ii) extraordinary expenses of the Agents or the Banks in connection with the
administration of this Agreement, the Notes and the other instruments and
documents to be delivered hereunder, (iii) the reasonable fees and out-of-pocket
expenses of ▇▇▇▇▇▇▇▇ ▇▇▇▇ LLP, counsel to the Agent, in connection with the
negotiation, preparation, execution and delivery of this Agreement and related
matters, and (iv) all costs and expenses, including reasonable attorneys' fees
and out-of-pocket expenses, in connection with the restructuring or enforcement
of this Agreement, the Notes or any Related Writing. In addition, the Borrower
shall pay any and all stamp and other taxes and fees payable or determined to be
payable in connection with the execution and delivery of this Agreement or the
Notes, and the other instruments and documents to be delivered hereunder, and
agrees to save the Agents and each Bank harmless from and against any and all
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liabilities with respect to or resulting from any delay in paying or omission to
pay such taxes or fees.
SECTION 13.05. SURVIVAL OF REPRESENTATIONS AND WARRANTIES. All
representations and warranties of the Borrower made in or pursuant to this
Agreement or in any certificate or other Related Writing in connection herewith
shall survive the closing hereof or the making of the Loans or other
transactions in connection with which given.
SECTION 13.06. OBLIGATIONS SEVERAL; NO FIDUCIARY OBLIGATIONS. The
obligations of the Banks hereunder are several and not joint. Nothing contained
in this Agreement and no action taken by the Agents or the Banks pursuant hereto
shall be deemed to constitute the Banks a partnership, association, joint
venture or other entity. No default by any Bank hereunder shall excuse the other
Banks from any obligation under this Agreement; but no Bank shall have or
acquire any additional obligation of any kind by reason of such default. The
relationship among the Borrower and the Banks with respect to this Agreement,
any Note and any Related Writing is and shall be solely that of debtor and
creditor, respectively, and no Bank has any fiduciary obligation toward the
Borrower with respect to any such documents or the transactions contemplated
thereby.
SECTION 13.07. EXECUTION IN COUNTERPARTS. This Agreement may be executed
in any number of counterparts and by different parties hereto in separate
counterparts, each of which when so executed and delivered shall be deemed to be
an original and all of which taken together shall constitute but one and the
same agreement.
SECTION 13.08. BINDING EFFECT; ASSIGNMENT. (a) This Agreement shall become
effective on the date (the "Closing Date") (i) when it shall have been executed
by the Borrower, the Agents and by each Bank and shall have been delivered to
the Agent and (ii) when the conditions set forth in Article VI are met to the
satisfaction of, or waived in writing by, the Agent and the Required Lenders,
and thereafter shall be binding upon and inure to the benefit of the Borrower
and each of the Banks and their respective successors and assigns, except that
the Borrower shall not have the right to assign its rights hereunder or any
interest herein without the prior written consent of all of the Banks, which
consent may be withheld in their sole discretion. Each Bank may at any time
grant participations in any of its rights hereunder or under its Note or Notes
to another commercial bank, financial institution, mutual fund or any
institutional "accredited investor" (as defined in Regulation D of the
Securities Act of 1933, as amended), provided, that in the case of any such
participation, the participant shall not have any rights under this Agreement,
the Notes or any Related Writing (the participant's rights against such Bank in
respect of any such participation to be those set forth in the agreement
executed by such Bank in favor of the participant relating thereto) and all
amounts payable by such Bank hereunder shall be determined as if such Bank had
not sold such participation; and provided further, that no Bank shall transfer,
assign or grant any participation under this Agreement under which the
participant shall have rights to approve any amendment to or waiver of this
Agreement or any Related Writing.
(b) Notwithstanding the foregoing, (i) any Bank may assign all or a
portion of its Loans and/or Commitments and its rights and obligations hereunder
to an affiliate of such Bank and (ii) with the consent of the Agent and the
Borrower so long as no Possible Default or Event of Default then exists (which
consents shall not be unreasonably withheld or delayed), any Bank
-54-
may assign all or a portion of its Loans and/or Commitments and its rights and
obligations hereunder to one or more commercial banks, financial institutions
(including one or more Banks), mutual funds or institutional "accredited
investors" (as defined in Regulation D of the Securities Act of 1933, as
amended), provided, that (A) any assignment of a Bank's Loans shall include a
ratable part of such Bank's Commitment, and (B) the consent of the Agent (which
consent shall not be unreasonably withheld or delayed) shall be required for any
assignment of a Commitment to the extent any letters of credit are outstanding.
No assignment pursuant to subsection (ii) of the immediately preceding sentence
shall be in an aggregate amount less than Ten Million Dollars ($10,000,000). If
any Bank so sells all or a part of its rights hereunder or under any Note, any
reference in this Agreement or such Note to such assigning Bank shall thereafter
refer to such Bank and to the respective assignee to the extent of their
respective interests and the respective assignee shall have, to the extent of
such assignment (unless otherwise provided therein), the same rights and
benefits as it would if it were such assigning Bank. Each assignment pursuant to
Section 13.08(b)(ii) shall be effected by the assigning Bank and the assignee
Bank executing a Bank Assignment and Assumption Agreement substantially in the
form of Exhibit G (appropriately completed). At the time of any such assignment
pursuant to Section 13.08(b)(ii), (X) Exhibit A shall be deemed to be amended to
reflect the Commitments of the respective assignee (which shall result in a
corresponding reduction of the Commitment of the assigning Bank) and of the
other Banks (Y) if any such assignment occurs after the Closing Date, the
Borrower will issue new Notes to the respective assignee and to the assigning
Bank (upon delivery of the existing Note or Notes of such assigning Bank) in
conformity with the requirements of this Agreement and (Z) the Agent shall
receive at the time of each such assignment, from the assigning or assignee
Bank, the payment of a nonrefundable assignment fee of $3,000.
(c) Notwithstanding any other provisions of this Section 13.08, no
transfer or assignment of the interests or obligations of any Bank hereunder or
any grant of participations therein shall be permitted if such transfer,
assignment or grant would require the Borrower to file a registration Statement
with the Securities and Exchange Commission or to qualify the loans under the
"Blue Sky" laws of any State.
(d) Notwithstanding any other provisions of this Section 13.08, so long as
no Event of Default has occurred and is continuing and the Administrative Agent
or the Syndication Agent, as applicable, has not resigned or been removed
pursuant to the provisions of this Agreement, each Agent agrees that it will not
assign or transfer any of its Loans and/or Commitments to the extent that the
amount of the Loans and/or Commitments that such Agent would continue to hold
following such assignment or transfer would be less than ten percent (10%) of
the aggregate Loans and/or Commitments of all of the Banks.
(e) Notwithstanding any other provision set forth in this Agreement, any
Bank may at any time pledge or assign all or any portion of its rights under
this Agreement, the Guaranty and the other documents executed and delivered in
connection therewith (including, without limitation, the Notes held by it) to
any Federal Reserve Bank in accordance with Regulation A of the Federal Reserve
Board without notice to, or the consent of, the Agents, the Borrower or the
Parent, provided, that no such pledge or assignment or enforcement thereof shall
release a Bank from any of its obligations hereunder or substitute any such
pledgee or assignee for such Bank as a party hereto.
-55-
SECTION 13.09. INDEMNIFICATION BY THE BORROWER. The Borrower shall
indemnify and hold harmless the Agents, the Banks and their respective
directors, officers, employees and Affiliates from and against any and all
liabilities, obligations, losses, damages, penalties, actions, judgments, suits,
costs, expenses and disbursements of any kind or nature whatsoever including,
without limitation, reasonable fees and disbursements of counsel and settlements
costs, which may be imposed on, incurred by, or asserted against the Agents, the
Banks and their respective directors, officers, employees and Affiliates in
connection with any investigative, administrative or judicial proceeding
(whether the Agents and the Banks are or are not designated as a party thereto)
relating to or arising out of this Agreement, the Notes or the other Related
Writings, the transactions contemplated thereby, including, but not limited to,
the Permitted Non-Affiliate Loans, or any actual or proposed use of proceeds
hereunder or thereunder, except that neither the Agents and the Banks nor any
directors, officers, employees and Affiliates thereof shall have the right to be
indemnified hereunder for their own gross negligence or willful misconduct. All
obligations under this Section 13.09 shall survive any termination of this
Agreement.
SECTION 13.10. GOVERNING LAW. This Agreement, each of the Notes and any
Related Writing shall be governed by and construed in accordance with the laws
of the State of Ohio, without regard to the principles of conflict of laws and
the respective rights and obligations of the Borrower and the Banks shall be
governed by Ohio law.
SECTION 13.11. SEVERABILITY OF PROVISIONS; CAPTIONS. Any provision of this
Agreement which is prohibited or unenforceable in any jurisdiction shall, as to
such jurisdiction, be ineffective to the extent of such prohibition or
unenforceability without invalidating the remaining provisions hereof or
affecting the validity or enforceability of such provision in any other
jurisdiction. The several headings to Sections and subsections herein are
inserted for convenience only and shall be ignored in interpreting the
provisions of this Agreement.
SECTION 13.12. PURPOSE. Each of the Banks represents and warrants to the
Borrower that it is entering into this Agreement with the present intention of
acquiring any Note issued pursuant hereto solely in connection with such Bank's
commercial lending activities and not for the purpose of distribution or resale,
it being understood, however, that each Bank shall at all times retain full
control over the disposition of its assets.
SECTION 13.13. CONSENT TO JURISDICTION. The Borrower agrees that any
action or proceeding to enforce or arising out of this Agreement may be
commenced in the Court of Common Pleas for Cuyahoga County, Ohio or in the
District Court of the United States for the Northern District of Ohio, and the
Borrower waives personal service of process and agrees that a summons and
complaint commencing an action or proceeding in any such court shall be properly
served and shall confer personal jurisdiction over the Borrower if served to the
Borrower at the address listed opposite the signature of the Borrower at the end
of this Agreement or as otherwise provided by the laws of the State of Ohio or
the United States.
SECTION 13.14. ENTIRE AGREEMENT. This Agreement, the Notes, the Related
Writings and any other agreement, document or instrument attached hereto or
referred to herein or executed on or as of the date hereof integrate all the
terms and conditions mentioned herein or
-56-
incidental hereto and supersede all oral representations and negotiations and
prior writings with respect to the subject matter hereof.
SECTION 13.15. JURY TRIAL WAIVER. THE BORROWER AND EACH OF THE BANKS WAIVE
ANY RIGHT TO HAVE A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING
IN CONTRACT, TORT OR OTHERWISE, AMONG BORROWER AND THE BANKS, OR ANY THEREOF,
ARISING OUT OF, IN CONNECTION WITH, RELATED TO, OR INCIDENTAL TO THE
RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR ANY
NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT EXECUTED OR DELIVERED IN
CONNECTION HEREWITH OR THE TRANSACTIONS RELATED THERETO. THIS WAIVER SHALL NOT
IN ANY WAY AFFECT, WAIVE, LIMIT, AMEND OR MODIFY ANY BANK'S ABILITY TO PURSUE
REMEDIES PURSUANT TO ANY CONFESSION OF JUDGMENT OR COGNOVIT PROVISION CONTAINED
IN ANY NOTE OR OTHER INSTRUMENT, DOCUMENT OR AGREEMENT AMONG THE BORROWER AND
THE BANKS, OR ANY THEREOF.
SECTION 13.16. SURVIVAL. All indemnities set forth herein shall survive
the execution and delivery of this Agreement and the making and repayment of the
Loans and the satisfaction of all other obligations under this Agreement.
SECTION 13.17. INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of a Possible Default or an Event of Default if such
action is taken or condition exists, and if a particular action or condition is
expressly permitted under any covenant, unless expressly limited to such
covenant, the fact that it would not be permitted under the general provisions
of another covenant shall not constitute a Possible Default or an Event of
Default if such action is taken or condition exists.
SECTION 13.18. INTERPRETATION. The Borrower, each Agent and each Bank
acknowledges that such party, either directly or through such party's
representatives, has participated in the drafting of this Agreement, and any
applicable rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in connection with the construction or
interpretation of this Agreement.
-57-
IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed and delivered as of the date set forth above, each by an officer
thereunto duly authorized.
Address: FOREST CITY RENTAL PROPERTIES
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Assistant
Secretary
Address: KEYBANK NATIONAL ASSOCIATION
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇ individually and as Agent
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
Address: NATIONAL CITY BANK individually and
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇ as Syndication Agent
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------
Title: Senior Vice President
Address: THE HUNTINGTON NATIONAL BANK
Commercial Real Estate Division
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇
-----------------------------------
Title: Vice President
Address: U.S. BANK NATIONAL ASSOCIATION
Attn: ▇▇▇▇ ▇▇▇▇▇▇, Asst. V.P.
Mailcode MW-IL-RY-4Q, Rookery Bldg.
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇
-----------------------------------
Title: Assistant Vice President
[Signature page to Credit Agreement]
Address: COMERICA BANK
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇., ▇▇▇ ▇▇▇▇▇
▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
------------------------------------
Title: Vice President
Address: FIRST MERIT BANK
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Senior Vice President
Address: LASALLE BANK NATIONAL
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇ ASSOCIATION
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Title: First Vice President
Address: MANUFACTURERS AND TRADERS
▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Vice President
Address: FIFTH THIRD BANK
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▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇ ▇. ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
Address: FLEET NATIONAL BANK
One Federal Street
Mail Code: MADE 10304X
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
[Signature page to Credit Agreement]
Address: CREDIT LYONNAIS
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇ ▇▇▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇▇ ▇▇▇▇▇
------------------------------------
Title: Vice President
Address: THE PROVIDENT BANK
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, V.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇ ▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
Address: BANK OF MONTREAL
Attn: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇,
Managing Director
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▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Managing Director
Address: CHARTER ONE BANK, N.A.
Attn: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, V.P.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
By: /s/ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇
------------------------------------
Title: Vice President
[Signature page to Credit Agreement]
EXHIBIT A
Bank Maximum Amount
---- --------------
KeyBank National Association $ 50,000,000
National City Bank $ 50,000,000
The Huntington National Bank $ 45,000,000
U.S. Bank National Association $ 40,000,000
Fleet National Bank $ 30,000,000
Comerica Bank $ 27,500,000
LaSalle Bank National Association $ 30,000,000
Bank of Montreal $ 23,750,000
Charter One Bank $ 23,750,000
Fifth Third Bank $ 30,000,000
First Merit Bank $ 25,000,000
Manufacturers and Traders Trust Company $ 30,000,000
The Provident Bank $ 20,000,000
Credit Lyonnais $ 25,000,000
------------
TOTAL $450,000,000
EXHIBIT B
GUARANTY OF PAYMENT
OF DEBT
OF
FOREST CITY ENTERPRISES, INC.
DATED AS OF MARCH 22, 2004
-----------------------------
TABLE OF CONTENTS
Page
----
1. DEFINITIONS .......................................................... 1
2. ACKNOWLEDGMENTS, CONSIDERATION ....................................... 8
3. GUARANTY ............................................................. 8
4. REINSTATEMENT ........................................................ 9
5. WAIVERS .............................................................. 9
6. ADDITIONAL AGREEMENTS ................................................ 9
7. REPRESENTATIONS AND WARRANTIES ....................................... 10
8. NOTICES .............................................................. 11
9. COVENANTS ............................................................ 11
10. DEFAULT; REMEDIES ................................................... 25
11. MISCELLANEOUS ....................................................... 28
12. JURY TRIAL WAIVER ................................................... 28
13. NOTICES ............................................................. 28
14. CONSENT TO JURISDICTION ............................................. 29
15. ENTIRE AGREEMENT .................................................... 29
16. INDEPENDENCE OF COVENANTS ........................................... 29
(i)
GUARANTY OF PAYMENT OF DEBT
THIS GUARANTY OF PAYMENT OF DEBT (this "Guaranty") is made and
issued by FOREST CITY ENTERPRISES, INC., an Ohio corporation (the "Guarantor"),
as of this 19th day of March, 2004, in order to induce the Banks (as hereinafter
defined), KEYBANK NATIONAL ASSOCIATION, as agent for the Banks (the "Agent") and
NATIONAL CITY BANK, as syndication agent for the Banks (the "Syndication Agent"
and together with the Agent, the "Agents"), to enter into, and lend money
pursuant to, a certain Credit Agreement of even date herewith (said Credit
Agreement as it may be from time to time amended, restated, or modified being
herein called the "Agreement"), by and among the Banks, the Agents and FOREST
CITY RENTAL PROPERTIES CORPORATION, a subsidiary of the Guarantor (the
"Borrower").
1. DEFINITIONS. As used in this Guaranty, the following terms
shall have the following meanings:
"Banks" shall mean each of the financing institutions that are
party to the Agreement as of the date of this Guaranty, any other bank(s) that
may become parties to the Agreement after the date hereof, and all successors
and assigns of any such bank; and "Bank" shall mean any one of the foregoing.
"Capital Stock" of any Person as used herein shall mean any
and all shares, interests, participations, or other equivalents (however
designated) of corporate stock or other equity participations or interests
including, without limitation, partnership interests, whether general or
limited, and membership interests, whether of managing or non-managing members,
of such Person.
"Cash Flow Coverage Ratio" shall mean, for any Test Period,
the ratio of (i) Consolidated Net Operating Cash Flow to (ii) Consolidated
Corporate Debt Service.
"Collateral" shall mean, collectively, all property, if any,
securing the Debt or any part thereof at the time in question.
"Company" shall mean the Guarantor and/or a Subsidiary of the
Guarantor.
"Completion Guaranty" shall mean any performance guarantee by
the Guarantor that construction of a real estate project will be completed in
accordance with applicable plans and specifications and that all costs
associated with such completion will be paid, provided, that such costs may
include an interest reserve only through completion of the project and not
through stabilization of such project.
"Consolidated Corporate Debt Service" shall mean, for any
period, the sum of (i) all scheduled payments of principal of (excluding balloon
payments) and interest on any Indebtedness owing by the Borrower (excluding any
non-recourse mortgage Indebtedness
owing by the Borrower or any Subsidiary of the Borrower and Indebtedness
relating to the Term Loan), (ii) all scheduled payments of principal of
(excluding balloon payments) and interest on any Indebtedness owing by the
Guarantor and (iii) Dividends paid by the Guarantor.
"Consolidated GAAP Shareholders' Equity" shall mean the
consolidated shareholders equity of the Guarantor, as calculated in accordance
with GAAP.
"Consolidated Net Operating Cash Flow" shall mean, for any
Test Period, Net Operating Income (a) less (i) all scheduled payments of
principal of non-recourse mortgage Indebtedness owing by the Guarantor and/or
its Subsidiaries (excluding any balloon payments), (ii) all interest payments on
such non-recourse Indebtedness, (iii) Twelve Million Dollars ($12,000,000) of
normal recurring capital expenditures and (b) plus (i) net income (loss) before
taxes and corporate interest expense of the Land Group, (ii) net income (loss)
before taxes of the Lumber Trading Group, (iii) net income (loss) before taxes
and corporate interest expense (including, but not limited to, interest incurred
on Debt, subordinated debt or any other third party debt) of the Corporate
Activity Group, (iv) actual cash taxes paid on the Net Operating Income and the
income set forth in subsections (b)(i), (b)(ii) and (b)(iii) above, (v) non-cash
interest expense accrued but not currently payable up to a maximum of Five
Million Dollars ($5,000,000) with respect to Indebtedness owing by the Guarantor
and its Subsidiaries other than Indebtedness owing by the Guarantor and/or its
Subsidiaries to the government of the United States or any state or municipality
thereof or any agencies of any of the foregoing and (vi) non-cash interest
expense accrued but not currently payable with respect to Indebtedness by the
Guarantor and/or its Subsidiaries owing to the government of the United States
or any state or municipality thereof or any agencies of any of the foregoing.
"Contingent Obligation" shall mean, with respect to any Person
at the time of any determination, without duplication, any obligation,
contingent or otherwise, of such Person guaranteeing or having the economic
effect of guaranteeing any Indebtedness of any other Person in any manner,
whether directly or otherwise; provided, that the term "Contingent Obligation"
shall not include endorsements for collection or deposit, in each case 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
Indebtedness in respect of which such Contingent Obligation is made or, if not
stated or determinable, the maximum reasonable anticipated liability in respect
thereof (assuming such Person is required to perform thereunder).
"Controlled Group" shall mean a controlled group of
corporations as defined in Section 1563 of the Internal Revenue Code of 1986, as
may be amended from time to time, of which Guarantor or any Subsidiary is a
part.
"Debt" shall mean, collectively, (a) all Indebtedness now
owing or hereafter incurred by the Borrower to the Agents and/or the Banks
arising under or in connection with the Agreement, whether pursuant to
commitment or otherwise, and including, without limitation, the principal amount
of all Loans made pursuant to the Agreement, all interest thereon determined as
provided in the Agreement, all fees provided to be paid by the Borrower to the
Banks and/or the Agents pursuant to the Agreement or any Related Writing and all
liabilities in respect of letters of credit issued by the Agent and/or any of
the Banks for the account of the Borrower (but not including Indebtedness held
by any Bank arising and outstanding under any
-2-
transaction or document referred to in Sections 8.04 (other than that referred
to in subclause (a) thereof), and/or 8.07 of the Agreement), (b) each renewal,
extension, consolidation or refinancing of any such Indebtedness in whole or in
part, and (c) all interest from time to time accruing on any of the foregoing
Indebtedness.
"Distributions" shall have the meaning set forth in Section
9.13(e) hereof.
"Dividends" shall include all dividends (in cash or otherwise)
paid, capital returned, and other distributions of any kind made on any share of
Capital Stock outstanding at the time.
"EBDT" shall mean net earnings from operations before
depreciation, amortization and deferred taxes on income and excludes provision
for decline in real estate, gain (loss) on disposition of properties and
extraordinary gains.
"Environmental Laws" means all provisions of law, statutes,
ordinances, rules, regulations, permits, licenses, judgments, writs,
injunctions, decrees, orders, awards and standards promulgated by the government
of the United States of America or by any state or municipality thereof or by
any court, agency, instrumentality, regulatory authority or commission of any of
the foregoing, now or hereafter in effect, and in each case, as amended,
concerning or relating to health, safety and protection of, or regulation of the
discharge of substances into, the environment.
"ERISA Net Worth" shall mean (a) as to any Subsidiary, the
excess of the net book value of such Subsidiary's assets (other than patents,
treasury stock, goodwill and similar intangibles but including unamortized
mortgage and lease costs) over all of its liabilities (other than liabilities to
any other Company), such excess being determined in accordance with GAAP applied
on a basis consistent with the Guarantor's present accounting procedures, and
(b) as to the Guarantor, the excess of the net book value (after deducting all
applicable reserves and deducting any value attributable to the re-appraisal or
write-up of any asset) of the Guarantor's assets (other than patents, good will,
treasury stock and similar intangibles but including unamortized mortgage and
lease costs) over all of its liabilities as determined on an accrued and
consolidated and consolidating basis and in accordance with GAAP not
inconsistent with the Guarantor's present accounting principles consistently
applied.
"Event of Default" shall have the meaning set forth in Section
10 hereof.
"Fiscal Quarterly Date" shall mean each of January 31, April
30, July 31 and October 31.
"GAAP" shall mean generally accepted accounting principles in
the United States of America, in effect from time to time.
"Hedge Agreement" shall mean any non-fully paid derivative,
such as interest rate swaps or collar agreements or other similar agreements or
arrangements designed to hedge the position of a Person with respect to interest
rates, excluding any such agreements as to which all obligations of such Person
are paid or payable within twelve (12) months of the date such agreement is
entered into by such Person.
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"Indebtedness" shall mean, with respect to any Person at the
time of any determination, without duplication, all obligations of such Person
which in accordance with GAAP should be classified upon the balance sheet of
such Person as liabilities, but in any event including: (a) all obligations of
such Person for borrowed money, (b) all obligations of such Person evidenced by
bonds, debentures, notes or other similar instruments, (c) all obligations of
such Person upon which interest charges are customarily paid or accrued, (d) all
written obligations of such Person to maintain working capital, equity capital
or other financial statement condition of another Person so as to enable such
other Person to pay its Indebtedness or otherwise to protect the holder of such
Indebtedness against loss in respect thereof, (e) all obligations of such Person
issued or assumed as the deferred purchase price of property or services, (f)
all obligations of others secured by any Lien on property owned or acquired by
such Person, whether or not the obligations secured thereby have been assumed,
(g) all capitalized lease obligations of such Person, (h) all obligations of
such Person in respect of Hedge Agreements, (i) all obligations of such Person,
actual or contingent, as an account party in respect of letters of credit or
bankers' acceptances, and, without duplication, all drafts drawn thereunder, and
(j) all obligations of any partnership or joint venture as to which such Person
is or may become personally liable, provided, that, Indebtedness shall not
include (i) any obligations incurred as a result of fraud, misappropriation,
misapplication and environmental indemnities, as are usual and customary in
commercial loan transactions, or (ii) trade payables, deferred revenue, taxes
and accrued expenses, in each case arising in the ordinary course of business
and that is due and payable less than twelve (12) months after the date such
debt was incurred.
"Indemnity Agreement" shall mean any indemnity agreement in
form and substance satisfactory to the Agents and the Banks, by and between the
Guarantor and a Surety, and as each such Indemnity Agreement may be amended,
restated or otherwise modified.
"Indenture" shall mean the indenture dated as of May 19, 2003,
between the Guarantor and The Bank of New York, as indenture trustee and
relating to the Senior Notes.
"Measured Credit Risk" shall mean the product of (i) the
notional amount of a Hedge Agreement entered into or guaranteed by the Guarantor
or entered into by Forest City Capital Corporation, in each case with any Person
other than a Bank that has a remaining time to maturity of greater than twelve
(12) months, times (ii) the number of years to maturity of such Hedge Agreement,
times (iii)1.25%.
"Net Earnings" shall mean the Guarantor's net earnings, as
determined separately for each fiscal year, after taxes, upon a consolidated
basis (after deducting minority interests) and in accordance with GAAP
consistently applied.
"Net Losses" shall mean the Guarantor's net losses, as
determined separately for each fiscal year, after taxes, upon a consolidated
basis (after deducting minority interests) in accordance with GAAP consistently
applied.
"Net Operating Income" shall mean for any relevant period, the
excess of the Borrower's revenues over the Borrower's operating expenses, in
each case as determined in accordance with the Pro Rata Consolidation Method.
For purposes of this definition, Net
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Operating Income (i) shall not include any gains or losses from the sale of
income producing real properties, other than gains or losses obtained from the
sale of net outlot parcels to a maximum aggregate amount of Twenty Million
Dollars ($20,000,000) for the immediately preceding four consecutive quarters
and (ii) shall include adjustments for cash flow of properties pursuant to which
the Borrower is receiving a preferred return over and above its ownership
percentage in such properties.
"Non-Affiliate Construction Project" shall mean any real
property and all improvements to be constructed thereon (collectively, the
"Non-Affiliate Property") (i) with respect to which the Borrower or a Subsidiary
of the Borrower, as the case may be, (a) makes a Permitted Non-Affiliate Loan,
and (b) is the developer pursuant to an agreement with a Non-Affiliated Entity
as owner of the Non-Affiliate Property; and (ii) with respect to which the
Borrower or an Affiliate of the Borrower, as the case may be, holds an
irrevocable option from either the Non-Affiliated Entity or the parent of the
Non-Affiliated Entity to acquire, respectively, either (a) the Non-Affiliate
Property, or (b) all of the equity interests owned by the parent of the
Non-Affiliated Entity in and to such Non-Affiliated Entity.
"Non-Affiliated Entity" shall mean any Person that is not an
Affiliate of the Borrower and that is wholly-owned by another Person.
"Obligor" shall mean any Person or entity who, or any of whose
property is or shall be, obligated on the Debt or any part thereof in any manner
and includes, without limiting the generality of the foregoing, the Borrower,
the Guarantor and any co-maker, endorser, other guarantor of payment,
subordinating creditor, assignor, grantor of a security interest, pledgor,
mortgagor or hypothecator of property, if any.
"Payment Default" shall mean any failure by the Borrower or
the Guarantor to make payment of principal of, or interest on, any Note (as
defined in the Agreement) or this Guaranty, as applicable, or any other fees or
expenses provided hereunder or under the Agreement, when due and payable,
whether at maturity or by acceleration.
"Permitted Debt" shall have the meaning set forth in Section
9.10 hereof.
"Permitted Distributions" shall have the meaning set forth in
Section 9.13(e) hereof.
"Permitted Non-Affiliate Loan" shall mean a loan by the
Borrower or any Subsidiary of the Borrower to a Non-Affiliated Entity for the
purposes of (a) purchasing or otherwise acquiring a Non-Affiliate Property or
(b) paying construction costs, in each case, in connection with a Non-Affiliate
Construction Project.
"Person" shall mean an individual, a corporation, a limited
liability company, a partnership, an association, a trust or any other entity or
organization, including, without limitation, a governmental or political
subdivision or an agency or instrumentality thereof.
"Plan" shall mean any employee pension benefit plan subject to
Title IV of the Employee Retirement Income Security Act of 1974, as amended,
established or maintained
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by the Guarantor, any Subsidiary, any member of the Controlled Group, or any
such Plan to which the Guarantor, any Subsidiary or any member of the Controlled
Group is required to contribute on behalf of its employees.
"Possible Default" shall mean an event or condition which,
with notice or lapse of time or both, would constitute an Event of Default
referred to in Section 10 hereof.
"Pro Rata Consolidation Method" shall mean the pro rata method
of consolidation as opposed to the full consolidation method of accounting.
"Receivable" shall mean a claim for moneys due or to become
due, whether classified as a contract right, account, chattel paper, instrument,
general intangible or otherwise.
"Related Writing" shall mean any Note, assignment, mortgage,
security agreement, guaranty agreement, Subordination Agreement, financial
statement, audit report, officer's certificate or other writing furnished by the
Borrower, the Guarantor or any of their respective officers to the Agents or the
Banks.
"Reportable Event" shall mean a reportable event as that term
is defined in Title IV of the Employee Retirement Income Security Act of 1974,
as amended, with respect to a Plan as to which the thirty (30) day notice
requirement has not been waived by the Pension Benefit Guaranty Corporation.
"Restricted Company" shall mean the Guarantor or a Restricted
Subsidiary.
"Restricted Subsidiary" shall mean any Subsidiary of the
Guarantor other than (a) the Borrower, and (b) any Subsidiary of the Borrower.
"Senior Notes" shall mean the 2003 Senior Notes and the 2004
Senior Notes.
"Subordination Agreement" shall mean any subordination
agreement in form and substance satisfactory to the Agents and the Banks entered
into by a Surety in favor of the Agents and the Banks, and as each such
Subordination Agreement may, from time to time, be amended, restated or
otherwise modified.
"Subsidiary" of any Person shall mean and include (a) any
corporation more than fifty percent (50%) of whose stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of the
directors of such corporation is at the time owned by such Person directly or
indirectly through Subsidiaries, (b) any partnership, limited liability company,
association (including business trusts) or other entity in which such Person
directly or indirectly through Subsidiaries, has more than a fifty percent (50%)
voting or equity interest at the time, and (c) any corporation, limited
liability company, partnership, association or other entity the accounts of
which are consolidated with those of its parent in the parent's consolidated
financial statements.
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"Surety" means any surety or insurance company reasonably
acceptable to the Agents.
"Surety Bonds" means the bonds, undertakings and other like
obligations executed by a Surety for the Guarantor subject to an Indemnity
Agreement and a Subordination Agreement in a maximum aggregate principal amount
of $30,000,000 for all Sureties.
"Term Loan" means that certain Term Loan made from certain of
the Banks to the Borrower pursuant to the Original Credit Agreement.
"Test Period" shall mean each period of four consecutive
fiscal quarters of the Guarantor or the Borrower, as applicable, in each case
taken as one accounting period, ended after the Closing Date and commencing
April 30, 2004.
"Trading Loans" shall mean any loans that are now or hereafter
outstanding from Forest City Trading Group, Inc. (but not from any other lender,
whether or not such lender is a Subsidiary of the Guarantor) to the Guarantor.
"2003 Senior Notes" shall mean the senior notes of the
Guarantor issued on May 19, 2003, pursuant to the Indenture, in an original
aggregate principal amount of $300,000,000.
"2004 Senior Notes" shall mean the senior notes of the
Guarantor issued on February 10, 2004, pursuant to the Indenture, in an original
aggregate principal amount of up to $100,000,000.
All capitalized terms used herein but not herein defined that
are defined in the Agreement shall have the respective meanings ascribed to them
in the Agreement.
All financial covenants contained in this Guaranty shall be
measured on each Fiscal Quarterly Date.
Accounting Principles
Any accounting term not specifically defined in this Section 1
or elsewhere in this Guaranty, shall have the meaning ascribed thereto by GAAP
not inconsistent with the Guarantor's present accounting procedures, provided,
that, if the Guarantor notifies the Agent that the Guarantor requests an
amendment to any provision hereof to eliminate the effect of any change
occurring after the Closing Date in GAAP or in the application thereof on the
operation of such provision (or if the Agent notifies the Guarantor that the
Required Lenders request an amendment to any provision hereof for such purpose),
regardless of whether any such notice is given before or after such change in
GAAP or in the application thereof, then such provision shall be interpreted on
the basis of GAAP as in effect and applied immediately before such change shall
have become effective until such notice shall have been withdrawn or such
provision amended in accordance herewith.
Notwithstanding the foregoing, the financial statements
furnished to the Banks pursuant hereto shall be made and prepared in accordance
with GAAP consistently
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applied throughout the periods involved (except as set forth in the notes
thereto or as otherwise disclosed in writing by the Guarantor to the Banks),
provided, that (a) all computations determining compliance with Sections 9.8 and
9.14, including definitions used therein, shall utilize accounting principles
based on the Pro Rata Consolidation Method, (b) all computations determining
compliance with Sections 9.8, 9.14 and 9.15, including definitions used therein,
shall exclude interest income received by the Borrower or any of its
Subsidiaries with respect to loans made by the Borrower or such Subsidiary
pursuant to Section 8.06(d) of the Agreement, unless such loans are funded with
the proceeds from Revolving Loans or the Senior Notes and (c) such financial
statements must also include a report (in the footnotes thereto or otherwise) of
the financial results of the Guarantor using accounting principles based on the
Pro Rata Consolidation Method.
2. ACKNOWLEDGMENTS, CONSIDERATION. The Guarantor desires that
the Agent and the ▇▇▇▇▇ ▇▇▇▇▇ the Borrower the loan(s), credit and financial
accommodations provided for under the Agreement. The Agreement provides, on and
subject to certain conditions therein set forth, for Revolving Loans by the
Banks to the Borrower up to an aggregate maximum principal amount of Four
Hundred Fifty Million Dollars ($450,000,000). There exists and will hereafter
exist economic and business relationships between the Guarantor and the Borrower
which will be of benefit to the Guarantor. The Guarantor finds it to be in the
direct business and economic interest of the Guarantor that the Borrower obtain
the loans, credit and financial accommodations from the Agents and the Banks
provided for in the Agreement. The Guarantor understands that the Agents and the
Banks are willing to grant the loans, credit and financial accommodations to the
Borrower provided for in the Agreement only upon certain terms and conditions,
one of which is that the Guarantor unconditionally guarantee the payment of the
Debt and this instrument is being executed and delivered by the Guarantor to
satisfy that condition and in consideration of the Agents and the Banks entering
into the Agreement.
3. GUARANTY. The Guarantor hereby absolutely, irrevocably and
unconditionally guarantees (a) the punctual and full payment of all and every
portion of the Debt when due, by acceleration or otherwise, whether now owing or
hereafter arising, (b) the prompt observance and performance by the Borrower of
each and all of the Borrower's covenants, undertakings, obligations and
agreements set forth in the Agreement, the Notes and/or any other instruments
evidencing or pertaining thereto, and (c) the prompt payment of all expenses and
costs, including reasonable attorneys' fees, incurred by or for the account of
the Agents and/or the Banks in connection with any action to enforce payment or
collection of the Debt from the Borrower and/or the Guarantor or to prepare any
amendments, restatements or modifications of the Agreement, the Notes and/or
this Guaranty. If the Debt or any part thereof shall not be paid in full
punctually when due and payable, the Agents and/or the Banks in each case shall
have the right to proceed directly against the Guarantor under this Guaranty
regardless of whether or not the Agents and/or the Banks shall have theretofore
proceeded or shall then be proceeding against the Borrower or any other Obligor
or Collateral, if any, or any of the foregoing, it being understood that the
Agents and/or the Banks in their sole discretion may proceed or not proceed
against the Borrower, the Obligors and/or any Collateral and may exercise or not
exercise each right, power or privilege that the Agents and/or the Banks may at
any time have, either simultaneously or separately and, in any event, at such
time or times and as often and in such order as the Agents and/or the Banks in
their sole discretion, may from time to time deem expedient, all without
affecting the obligations of the Guarantor hereunder or the right of the
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Agents and/or the Banks to demand and/or enforce performance by the Guarantor of
the Guarantor's obligations hereunder.
4. REINSTATEMENT. This Guaranty shall continue to be effective
or be reinstated, as the case may be, if any amount paid by or on behalf of the
Borrower to the Agents or the Banks on or in respect of the Debt is rescinded,
restored or returned in connection with the insolvency, bankruptcy, dissolution,
liquidation or reorganization of the Borrower or any other Obligor, or as a
result of the appointment of a receiver, intervenor or conservator of, or
trustee or similar officer for, the Borrower or any other Obligor or any part of
the property of the Borrower or any other Obligor, or otherwise, all as though
such payment had not been made.
5. WAIVERS. The Guarantor waives any and all contractual,
legal and/or equitable rights of subrogation, contribution, exoneration,
indemnity and/or reimbursement from or against the Borrower or any Obligor with
respect to the Debt and/or any payments made by the Guarantor on account of this
Guaranty.
6. ADDITIONAL AGREEMENTS. Regardless of the duration of time,
regardless of whether the Borrower may from time to time cease to be indebted to
the Banks and irrespective of any act, omission or course of dealing whatever on
the part of the Agents and/or the Banks, the Guarantor's liabilities and other
obligations under this Guaranty shall remain in full force and effect until the
full and final payment of all of the Debt. Without limiting the generality of
the foregoing:
6.1. The obligations of the Guarantor hereunder shall not be
released, discharged or in any way affected, nor shall the Guarantor have any
rights or recourse against the Agents or the Banks by reason of (a) any action
the Agents or the Banks may take or omit to take, or (b) any defense raised or
asserted by the Borrower against enforcement of the Agreement or the Notes or
any challenge to the sufficiency or enforceability of the Agreement, any of the
Notes or this Guaranty, or (c) any act or thing that might otherwise operate as
a legal or equitable discharge of a surety, as to which the Guarantor hereby
expressly waives any and all defenses available to a surety except irrevocable
payment in full of the Debt.
6.2. The obligations of the Guarantor under this Guaranty
shall be satisfied strictly in accordance with the terms of this Guaranty, under
all circumstances whatsoever, including, without limitation, the existence of
any claim, setoff, defense or right which the Guarantor or the Borrower may have
at any time against the Agents or the Banks or any other Person or entity,
whether in connection with this Guaranty, the Agreement, the Notes or the
transactions contemplated hereby or any unrelated transaction.
6.3. The Banks shall at no time be under any duty to the
Guarantor to grant any loans, credit or financial accommodation to the Borrower,
irrespective of any duty or commitment of the Banks to the Borrower, or to
follow or direct the application of the proceeds of any such loans, credit or
financial accommodation.
6.4. The Guarantor waives (a) notice of the granting of any
loan to the Borrower or the incurring of any other Indebtedness, including, but
not limited to the creation of the Debt by the Borrower or the terms and
conditions thereof, (b) presentment, notice of
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nonpayment, demand for payment, protest, notice of protest and notice of
dishonor of the Notes or any other Indebtedness incurred by the Borrower to the
Banks, (c) notice of any indulgence granted to any Obligor, (d) notice of the
Banks' acceptance of this Guaranty, and (e) any other notice to which the
Guarantor might, but for the within waiver, be entitled.
6.5. The Agents and/or the Banks in their sole discretion may,
without prejudice to their rights under this Guaranty, at any time or times (a)
grant the Borrower whatever loans, credit or financial accommodations that the
Banks, or any thereof, may from time to time deem advisable, even if the
Borrower might be in default and even if those loans, credit or financial
accommodations might not constitute Debt the payment of which is guaranteed
hereunder, (b) assent to any renewal, extension, consolidation or refinancing of
the Debt or any part thereof, (c) forbear from demanding security, if the Agents
and/or the Banks shall have the right to do so, (d) release any Obligor or
Collateral or assent to any exchange of Collateral, if any, irrespective of the
consideration, if any, received therefor, (e) grant any waiver or consent or
forbear from exercising any right, power or privilege that the Agents and/or the
Banks may have or acquire, (f) assent to any amendment, deletion, addition,
supplement or other modification in, to or of any writing evidencing or securing
any Debt or pursuant to which any Debt is created, (g) grant any other
indulgence to any Obligor, (h) accept any Collateral for or other Obligors upon
the Debt or any part thereof, or (i) fail, neglect or omit in any way to realize
upon any Collateral or to protect the Debt or any part thereof or any Collateral
therefor.
6.6. The Guarantor's liabilities and other obligations under
this Guaranty shall survive any merger, consolidation or dissolution of the
Guarantor.
6.7. The Guarantor's liabilities and other obligations under
this Guaranty shall be absolute and unconditional irrespective of any lack of
validity or enforceability of any agreement, instrument or document evidencing
the Debt or related thereto, or any other defense available to the Guarantor in
respect of this Guaranty.
7. REPRESENTATIONS AND WARRANTIES. The Guarantor represents
and warrants that (a) it is a duly organized and validly existing corporation
under the laws of the State of Ohio, (b) the execution, delivery and performance
of this Guaranty have been duly authorized by all necessary corporate action,
(c) there is no prohibition in either its Articles of Incorporation, Code of
Regulations or in any agreement, instrument, judgment, decree or order to which
it is a party that in any way restricts or prohibits the execution, delivery and
performance of this Guaranty in any respect, (d) this Guaranty has been duly
executed and delivered by the Guarantor and is a valid and binding obligation of
the Guarantor enforceable against the Guarantor in accordance with its terms,
and (e) as of October 31, 2003, there are 36,000,000 shares authorized of Class
B Common Stock of the Guarantor of which 13,716,192 shares are issued and
outstanding.
The Guarantor further represents and warrants that this
Guaranty is made in furtherance of the purposes for which the Guarantor was
incorporated and is necessary to promote and further the business of the
Guarantor and that the assumption by the Guarantor of its obligations hereunder
will result in direct financial benefits to the Guarantor.
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This Guaranty is not made in connection with any consumer loan
or consumer transaction.
The Guarantor further represents and warrants that (a) the
Guarantor has received consideration which is the reasonably equivalent value of
the obligations and liabilities that the Guarantor has incurred to the Agents
and/or the Banks, (b) the Guarantor is not insolvent as defined in any
applicable state or federal statute, nor will the Guarantor be rendered
insolvent by the execution and delivery of this Guaranty to the Agents and the
Banks, (c) the Guarantor is not engaged or about to engage in any business or
transaction for which the assets retained by the Guarantor shall be an
unreasonably small capital, taking into consideration the obligations to the
Agents and the Banks incurred hereunder, and (d) the Guarantor does not intend
to, nor does the Guarantor believe, that the Guarantor will incur debts beyond
the Guarantor's ability to pay as they become due.
The Guarantor further represents and warrants that the
Guarantor has provided to the Agent three copies of all promissory notes or
other writings evidencing any Trading Loans outstanding on the date hereof and
that the Guarantor has no other Indebtedness outstanding from any Subsidiary to
the Guarantor.
8. NOTICES. The Agents and/or the Banks shall be deemed to
have knowledge or to have received notice of any event, condition or thing only
if the Agents and/or the Banks shall have received written notice thereof as
provided in the Agreement. A written notice shall be deemed to have been duly
given to the Guarantor whenever a writing to that effect shall have been sent by
registered or certified mail to the Guarantor at the address set forth opposite
the Guarantor's signature below (or to such other address of the Guarantor as
the Guarantor may hereafter furnish to the Banks in writing for such purpose),
but no other method of giving notice to or making a request of the Guarantor is
hereby precluded.
9. COVENANTS. The Guarantor hereby agrees to perform and
observe and to cause each Subsidiary to perform and observe, all of the
following covenants and agreements:
9.1. INSURANCE. Each Company will:
(a) insure itself and all of its insurable properties to such
extent, by such insurers and against such hazards and liabilities as is
generally done by businesses similarly situated, it being understood that
the Guarantor has obtained a fidelity bond for such of its employees as
handle funds belonging to the Borrower or the Guarantor,
(b) give the Agent prompt written notice of any material
reduction or adverse change in that Company's insurance coverage, and
(c) forthwith upon any Bank's or the Agent's written request,
furnish to each Bank and the Agent such information in writing about that
Company's insurance as any Bank or the Agent, as applicable, may from time
to time reasonably request.
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9.2. MONEY OBLIGATIONS. Each Company will pay in full:
(a) prior in each case to the date when penalties would
attach, all taxes, assessments and governmental charges and levies (except
only those so long as and, to the extent that, the same shall be contested
in good faith by appropriate and timely proceedings diligently pursued and
taxes and assessments on inconsequential parcels of vacant land, the
nonpayment of which does not materially adversely affect the financial
condition of the Guarantor) for which it may be or become liable or to
which any or all of its properties may be or become subject,
(b) all of its wage obligations to its employees in compliance
with the Fair Labor Standards Act (29 U.S.C. Section 206-207) or any
comparable provisions, and
(c) all of its other obligations calling for the payment of
money (except only those so long as and to the extent that the same shall
be contested in good faith by appropriate and timely proceedings
diligently pursued) before such payment becomes overdue; provided that,
notwithstanding the foregoing, the Guarantor shall not make any payment on
account of any of the Senior Notes in the event of and during the
continuance of any Payment Default under the Agreement or this Guaranty.
9.3. RECORDS. Each Company will:
(a) at all times maintain true and complete records and books
of account and, without limiting the generality of the foregoing, maintain
appropriate reserves for possible losses and liabilities, all in
accordance with generally accepted accounting principles applied on a
basis not inconsistent with its present accounting procedures, and
(b) at all reasonable times permit each Bank to examine that
Company's books and records and to make excerpts therefrom and transcripts
thereof.
9.4. FRANCHISES. Each Company will preserve and maintain at
all times its corporate existence, rights and franchises; provided, that this
Section shall not apply to (a) any merger of a Subsidiary into the Guarantor or
into another Subsidiary, (b) any consolidation of a Subsidiary with another
Subsidiary, or (c) any dissolution of any Subsidiary, except in each case where
the Subsidiary is the Borrower.
9.5. NOTICE. The Guarantor will cause its Chief Financial
Officer, or in his or her absence another officer designated by the Chief
Financial Officer, to promptly notify the Banks whenever (a) any Event of
Default or Possible Default may occur hereunder (including, without limitation,
any default under any of the Senior Notes, the Indenture or any other document
relating thereto (after giving effect to any applicable grace period)) or any
representation or warranty made herein may for any reason cease in any material
respect to be true and complete, and/or (b) any Restricted Subsidiary shall (i)
be in default of any material (either with respect to the Borrower or the
Guarantor) obligation for payment of borrowed money, or, to the knowledge of the
Guarantor, any material obligations in respect of guarantees, taxes and/or
Indebtedness for goods or services purchased by, or other contractual
obligations of, such Subsidiary, and/or (ii) not, to the knowledge of the
Guarantor, be in compliance with any law, order, rule, judgment, ordinance,
regulation, license, franchise, lease or other agreement
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that has or could reasonably be expected to have a material adverse effect on
the business, operations, property or financial condition of the Subsidiary,
and/or (c) the Guarantor and/or the Subsidiary shall have received notice, or
have knowledge, of any actual, pending or threatened claim, notice, litigation,
citation, proceeding or demand relating to any matter(s) described in subclauses
(b)(i) and (b)(ii) of this Section 9.5. Further, the Guarantor shall notify the
Banks not less than thirty (30) days in advance of entering into any proposed
amendment or modification of any of the Senior Notes or the Indenture, whether
or not the Guarantor believes that the consent of the Required Banks is needed
therefor pursuant to Section 9.10(h)(iii) of this Guaranty.
9.6. ERISA COMPLIANCE. No Company will incur any material
accumulated funding deficiency within the meaning of the Employee Retirement
Income Security Act of 1974, as amended from time to time, and the regulations
thereunder or any material liability to the Pension Benefit Guaranty
Corporation, established thereunder in connection with any Plan. Each Company
will furnish (i) as soon as possible and in any event within thirty (30) days
after such Company knows or has reason to know that any Reportable Event with
respect to any Plan has occurred, a statement of the Chief Financial Officer of
such Company setting forth details as to such Reportable Event and the action
which such Company proposes to take with respect thereto, together with a copy
of the notice of such Reportable Event given to the Pension Benefit Guaranty
Corporation if a copy of such notice is available to such Company, (ii) promptly
after the filing thereof with the United States Secretary of Labor or the
Pension Benefit Guaranty Corporation, copies of each annual report with respect
to each Plan established or maintained by such Company for each plan year,
including (x) where required by law, a statement of assets and liabilities of
such Plan as of the end of such plan year and statements of changes in fund
balance and in financial position, or a statement of changes in net assets
available for plan benefits, for such plan year, certified by an independent
public accountant satisfactory to the Banks, and (y) an actuarial statement of
such Plan applicable to such plan year, certified by an enrolled actuary of
recognized standing acceptable to the Banks, and (iii) promptly after receipt
thereof a copy of any notice such Company, any Subsidiary or any member of the
Controlled Group may receive from the Pension Benefit Guaranty Corporation or
the Internal Revenue Service with respect to any Plan administered by such
Company; provided, that this latter clause shall not apply to notices of general
application promulgated by the Pension Benefit Guaranty Corporation or the
Internal Revenue Service. As used in this Section 9.6, "material" means the
measure of a matter of significance which shall be determined as being an amount
equal to five percent (5%) of each Company's ERISA Net Worth.
9.7. FINANCIAL STATEMENTS. The Guarantor will furnish to each
Bank:
(a) within forty-five (45) days (or fifty (50) days so long as
the Guarantor will not be reporting an Event of Default on such Form 10-Q
report) after the end of each quarter-annual period of each fiscal year of
the Guarantor, a copy of the Guarantor's Form 10-Q quarterly report as
filed by the Guarantor with the Securities and Exchange Commission,
(b) within forty-five (45) days (or fifty (50) days so long as
the Guarantor shall not have reported an Event of Default to the
Securities and Exchange Commission during such fiscal period nor on its
most recent filing with the Securities and Exchange
-13-
Commission) after the end of each of the first three (3) quarter-annual
fiscal periods of each fiscal year of the Guarantor, an unaudited
consolidated and consolidating balance sheet of the Guarantor as at the
end of that period and an unaudited consolidated and consolidating
statement of income of the Guarantor for the Guarantor's current fiscal
year to date, all prepared in form and detail in accordance with GAAP,
consistently applied, or the Pro Rata Consolidation Method, as applicable,
and certified by a Senior Officer of the Guarantor, subject to changes
resulting from quarter-end adjustments, together with a certificate of a
Senior Officer of the Guarantor (i) specifying the nature and period of
existence of each Event of Default and/or Possible Default, if any, and
the action taken, being taken or proposed to be taken by the Guarantor in
respect thereof or if none, so stating, and (ii) certifying that the
representations and warranties of the Guarantor set forth herein are true
and correct as of the date of such certificate, or, if not, all respects
in which they are not, and (iii) a covenant compliance worksheet in the
form and substance of Schedule 9.7(b) hereof completed as of the end of
such fiscal quarterly period,
(c) within ninety (90) days (or ninety-five (95) days so long
as the Guarantor shall not have reported an Event of Default to the
Securities and Exchange Commission during such fiscal period nor on its
most recent filing with the Securities and Exchange Commission) after the
end of each fiscal year of the Guarantor, an annual report on Form 10-K as
filed by the Guarantor with the Securities and Exchange Commission,
including the complete audited consolidated balance sheets and statements
of income of the Guarantor for that year certified by an independent
public accountant satisfactory to the Banks, and an unaudited
consolidating balance sheet and statement of income of the Parent for the
current fiscal year, each in form and detail satisfactory to the Banks,
and prepared in accordance with GAAP, consistently applied, or the Pro
Rata Consolidation Method, as applicable, together with (i) a report of
the independent certified public accountant with an opinion that is not
qualified as to the scope of the audit or as to the status of the
Guarantor or the Borrower as a going concern, (ii) a certificate of the
Senior Officer of the Guarantor (X) specifying the nature and period of
existence of each Event of Default and/or Possible Default, if any, and
the action taken, being taken or proposed to be taken by the Guarantor in
respect thereof or if none, so stating, and (Y) certifying that the
representations and warranties of the Guarantor set forth herein are true
and correct as of the date of such certificate, or, if not, all respects
in which they are not, and (iii) a fully completed covenant compliance
worksheet in the form and substance of Schedule 9.7(b) hereof relating to
such fiscal year duly certified by the Guarantor's accountants,
(d) concurrently with furnishing any quarterly financial
statement or audit report pursuant to this Section 9.7, a certificate by
▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇ or ▇▇▇▇▇▇ ▇. ▇▇▇▇▇
stating whether any Company has made any guaranty or incurred any
Indebtedness referred to in Section 9.10(d) or Section 9.12(g) hereof and,
if so, the details thereof,
(e) as soon as available, copies of all notices, reports,
proxy statements and other similar documents sent by the Guarantor to its
shareholders, to the holders of any of its debentures or bonds or the
trustee of any indenture securing the same or pursuant to which they have
been issued, to any securities exchange or to the Securities
-14-
Exchange Commission or any similar federal agency having regulatory
jurisdiction over the issuance of the Guarantor's securities,
(f) within forty-five (45) days after the end of each fiscal
quarter of the Guarantor, a schedule setting forth the aggregate Measured
Credit Risk as of the last day of such fiscal quarter, along with the
remaining available Measured Credit Risk permitted by Section 9.10(j),
(g) within one hundred twenty (120) days after the end of each
fiscal year of the Guarantor, a calculation of the consolidated leverage
of the Guarantor as of the last day of such fiscal year, with such details
and explanations as may be reasonably required by the Banks, and
(h) forthwith upon any Bank's written request such other
information of any Company's financial condition and business, including,
but not limited to any management letters of accountants addressed to the
Guarantor or the Borrower.
9.8. EBDT. The Guarantor will not suffer or permit its EBDT,
as of any Fiscal Quarterly Date falling within the periods set forth below, for
the Test Period ending on such Fiscal Quarterly Date, to be less than the amount
set forth below for the respective periods set forth below:
Period EBDT
------ ----
January 31, 2004 $190,000,000
February 1, 2004 through January 31, 2005 $200,000,000
February 1, 2005 through January 31, 2006 $210,000,000
February 1, 2006 and thereafter $220,000,000
9.9. COMBINATIONS, BULK TRANSFERS. (a) No Restricted Company
will be a party to any consolidation or merger or lease, sell or otherwise
transfer all or any substantial part of its assets or sell, pledge, hypothecate
or transfer its stock or other ownership interests in any Subsidiary; provided,
that this Section 9.9 shall not apply to any transfer (as opposed to a pledge)
effected in the normal course of business on commercially reasonable terms and
provided, further, that a Restricted Company shall only be permitted to pledge
its stock or other ownership interests in any of its Subsidiaries that is a
single asset or special purpose entity (each, a "Pledged Subsidiary") to secure
the following:
(i) additional or mezzanine Indebtedness incurred with
respect to a project encumbered by a first mortgage at the
time such additional or mezzanine Indebtedness is incurred, so
long as such additional or mezzanine Indebtedness is permitted
under Section 9.10 of this Guaranty provided, that the sum of
the then existing Indebtedness with respect to such project
plus such additional or mezzanine Indebtedness does not
-15-
exceed eighty percent (80%) of the appraised value of the
project at the time such additional or mezzanine Indebtedness
is incurred; or
(ii) primary Indebtedness (or the re-financing thereof)
incurred solely for the purpose of acquiring real property or
for construction or redevelopment purposes; provided, that
such primary Indebtedness (or the re-financing thereof) does
not exceed one hundred percent (100%) of the appraised value
of the acquired property at the time of such financing or
re-financing, as applicable.
(b) In addition to the foregoing, (i) such pledges of stock or
other ownership interests in a Pledged Subsidiary given to secure
Indebtedness described in Section 9.9(a)(i) or Section 9.9(b)(ii)(Y) may
be made with respect to no more than fifteen (15) individual properties,
collectively with the Borrower, all its Subsidiaries and all Restricted
Companies at any one time, exclusive of the properties set forth on
Schedule 9.9A of this Guaranty, and (ii) the aggregate of all such (X)
additional or mezzanine Indebtedness described in Section 9.9(a)(i) above
and (Y) primary Indebtedness described in Section 9.9(a)(ii) above in
excess of eighty percent (80%) of the appraised value of the property, in
each case for which such a pledge may be provided by a Restricted Company,
shall not exceed Two Hundred Million Dollars ($200,000,000) in the
aggregate for all pledges provided by the Restricted Companies, the
Borrower and its Subsidiaries, taken together.
(c) The Guarantor will deliver to the Agents and the Banks an
updated schedule, in the form of Schedule 9.9 attached hereto, listing all
of the properties as to which a pledge of stock or other ownership
interests has been provided to a lender in accordance with Section 9.9(b),
within forty-five (45) days after each Fiscal Quarterly Date.
9.10. BORROWINGS. No Restricted Company will create, assume or
suffer to exist any Indebtedness of any kind including, but not limited to,
leases required to be capitalized under Financial Accounting Standards Board
Standard No. 13 or any reimbursement obligations or other liabilities with
respect to letters of credit issued for any Restricted Company's account;
provided, that this Section 9.10 shall not apply to any of the following
(collectively, "Permitted Debt"):
(a) any loan obtained by Forest City Trading Group, Inc.,
formerly known as American International Forest Products, Inc. (or any of
its wholly-owned Subsidiaries) from any lender other than the Companies,
(b) any loan obtained from the Guarantor by any Restricted
Subsidiary and, in the ordinary course of business by Forest City Trading
Group, Inc. (or any of its wholly-owned Subsidiaries),
(c) any real estate loan heretofore or hereafter obtained or
guaranteed by the Guarantor for the purpose of financing any building to
be used only for the business
-16-
of Guarantor and its Subsidiaries, provided, that no such loan shall
exceed eighty percent (80%) of the lender's appraisal of the real estate
being financed,
(d) any loan or letter of credit that is obtained or
guaranteed by the Guarantor; provided, that the Guarantor's aggregate
personal liability in respect of all such loans (other than any loan
obtained by the Guarantor and permitted by any other clause of this
Section 9.10) and letters of credit and in respect of all guaranteed loans
referred to in clause (f) of Section 9.12 hereof, does not then exceed and
after incurring such loan or letter of credit or the guarantee thereof in
question would not exceed, Ten Million Dollars ($10,000,000),
(e) leases required to be capitalized under Financial
Accounting Standards Board Standard No. 13 in the aggregate amount for all
Restricted Subsidiaries of Three Million Dollars ($3,000,000),
(f) any secured Indebtedness of a Restricted Company created
in the course of purchasing or developing real estate or financing
construction (or any refinancings thereof) or other improvements thereon
or purchasing furniture, fixtures or other equipment therefor or any other
Indebtedness of any Restricted Company or any refinancings thereof;
provided, that no Restricted Company (other than a Restricted Company
whose sole assets consist of contiguous parcels of land which are being
purchased or developed with such financing, the improvements, if any,
thereon, furniture, fixtures and other equipment used in connection
therewith, receivables arising from tenants in connection therewith and
the proceeds of such receivables and other property directly obtained from
the ownership of such assets) shall have any personal liability for such
Indebtedness, the creditors' recourse being solely to the property being
pledged as collateral for such Indebtedness and the income therefrom,
(g) any Trading Loans, provided, that each of the following
conditions is satisfied as to each of such Trading Loans:
(i) the aggregate principal amount of all the Trading
Loans may not exceed Ten Million Dollars ($10,000,000);
(ii) no interest shall accrue or be payable with respect
to any Trading Loan;
(iii) there shall be no scheduled principal payments
prior to the maturity date of any Trading Loan, as any
promissory notes evidencing such Trading Loans may be extended
from time to time; no principal payments shall be made on any
Trading Loan at any time that a Possible Default or Event of
Default exists under the Guaranty or the Agreement, or at any
time that the Agent has determined, in its sole discretion,
that there has been a material adverse change in the financial
condition of the Guarantor; and the Trading Loans, either
individually or in the aggregate, shall not be revolving loans
and, if any principal payments are made on any Trading Loan,
the Ten Million Dollars ($10,000,000) maximum
-17-
amount of permissible Trading Loans set forth above shall
automatically and irrevocably decline by like amount upon such
payment;
(iv) each Trading Loan shall be expressly subordinate in
right of payment to the prior payment in full of the
Indebtedness under the Guaranty and the Agreement, whether
such Indebtedness arises due to a Term Loan, a Revolving Loan
or otherwise;
(v) an event of default as to any Trading Loan(s) will
automatically constitute an Event of Default under the
Agreement, the Notes and the Guaranty; and
(vi) each Trading Loan shall be evidenced by a written
promissory note, including the terms set forth above in
clauses (i) through (v) and shall otherwise be in form and
substance approved in advance by the Agent, executed by the
Guarantor and Forest City Trading Group, Inc. and, in the case
of any Trading Loan(s) on or after the date of the date
hereof, executed by such parties not later than the date of
the first disbursement of such Trading Loan, a copy of which
note(s) shall be provided within ten (10) days after
execution,
(h) any Indebtedness or obligations of the Guarantor under the
Senior Notes; provided, that,
(i) none of the Senior Notes nor the Indenture may
provide that an Event of Default under the Agreement or this
Guaranty constitutes a default under any of the Senior Notes
or the Indenture, except in the case of an Event of Default
that constitutes the failure to pay the principal of any Debt
when due and payable after the expiration of any applicable
grace period with respect thereto and shall have resulted in
the acceleration of such Debt or constitutes the failure to
pay any portion of the principal of the Debt when due and
payable after acceleration or maturity;
(ii) the Indebtedness represented by the Senior Notes
shall be unsecured, pari passu with the Guarantor's
obligations under this Guaranty and structurally subordinate
to the Borrower's Obligations to the Banks under the
Agreement;
(iii) none of the Senior Notes nor the Indenture shall
be amended or modified without the prior written consent of
the Required Banks, including, without limitation, (A) to
allow the maturity of any of the Senior Notes to be less than
ten (10) years from the respective date of issue, (B) to
provide for payment of interest under any of the Senior Notes
more frequently than quarterly, or (C) to modify the
redemption provisions contained therein, including adding
additional redemption provisions, other than amendments or
modifications that do not adversely
-18-
affect the Agreement or this Guaranty or their relationship to
any of the Senior Notes or the Indenture,
(iv) the outstanding and unredeemed principal amount of
the Senior Notes shall not, at any time, exceed Four Hundred
Million Dollars ($400,000,000) in the aggregate; and
(v) the terms and conditions of the 2003 Senior Notes,
the 2004 Senior Notes and the Indenture shall be satisfactory,
in form and substance, to the Agents and the Banks,
(i) any Indebtedness or obligations of the Guarantor under the
Surety Bonds or the Indemnity Agreement to a maximum aggregate principal
amount of $30,000,000.00 minus the aggregate stated amount of all letters
of credit then outstanding for the account of the Borrower under the
Agreement in excess of $10,000,000; provided, such Indebtedness is fully
subordinated to the obligations of the Guarantor under this Guaranty as
set forth in the Subordination Agreement,
(j) any Indebtedness of the Guarantor or Forest City Capital
Corporation under any Hedge Agreement relating to Indebtedness otherwise
permitted under this Guaranty, provided, that, any Hedge Agreement
proposed to be entered into or guaranteed by the Guarantor or entered into
by Forest City Capital Corporation, as applicable, in each case with a
Person that is not a Bank that results in an aggregate Measured Credit
Risk for all Hedge Agreements entered into with Persons other than a Bank,
in excess of $33,500,000, shall require the prior written consent of the
Required Banks (such written consent to be delivered by each consenting
Bank to the Agent not more than three (3) Business Days after the request
for such consent has been delivered by the Guarantor to the Agent,
provided, that, each Bank that does not deliver such written consent
within such three (3) Business Day period shall be deemed to have denied
the request for such Hedge Agreement).
(k) any Indebtedness of the Guarantor with respect to deferred
taxes that are due and payable in excess of twelve (12) months from the
date of the incurrence of such tax liability,
(l) any Indebtedness permitted by Section 9.12(g) hereof, or
(m) any Indebtedness of the Guarantor permitted by Section
9.13(d) hereof that replaces the Indebtedness evidenced by the Senior
Notes.
9.11. LIENS. No Restricted Company will:
(a) sell or otherwise transfer any Receivables, including, but
not limited to, any mortgages held by the Guarantor or any of its
Subsidiaries, other than in the ordinary course of business,
(b) acquire any property subject to any land contract,
conditional sale contract or other title retention contract, or
-19-
(c) suffer or permit any property now owned or hereafter
acquired by it to be or become encumbered by any mortgage, security
interest, financing statement, encumbrance or Lien of any kind or nature;
provided, that this Section 9.11 shall not apply to:
(i) any Lien for a tax, assessment or other governmental
charge or levy so long as the payment thereof is not required by Section
9.2(a) hereof,
(ii) any Lien securing only workmen's compensation,
unemployment insurance or similar obligations,
(iii) any mechanic's, warehousemen's, carrier's or similar
common law or statutory Lien incurred in the normal course of business,
(iv) any mortgage, security interest or other Lien encumbering
property of any Restricted Subsidiary for the purpose of securing any
Indebtedness owing by only that Subsidiary,
(v) any mortgage, security interest or other Lien encumbering
property of the Guarantor and securing any Indebtedness or liability of
the Guarantor permitted by clause (c) of Section 9.10 or by Section 9.12
hereof,
(vi) any Lien permitted by Section 8.15 of the Agreement,
(vii) any transfer made in the ordinary course of business by
Forest City Trading Group, Inc. (or any of its wholly-owned Subsidiaries),
or
(viii) any financing statement perfecting a security interest
permitted by this Section 9.11.
9.12. GUARANTEES. No Restricted Company will be or become a
guarantor of any kind; provided, that this Section 9.12 shall not apply to:
(a) any endorsement of a check or other medium of payment for
deposit or collection through normal banking channels or any similar
transaction in the normal course of business,
(b) any indemnity or guaranty of a surety bond for the
performance by a customer of a Restricted Company of the customer's
obligations under a land development contract,
(c) any guarantee by the Guarantor of a real estate loan
permitted by clause (c) of Section 9.10,
(d) any Completion Guaranty with respect to a real estate
building project, if the Guarantor or any Company is the developer of the
project or has a property interest in the project (including, but not
limited to, a Non-Affiliate Construction Project),
-20-
(e) the guarantee by the Guarantor set forth in Section 3
hereof,
(f) any other guarantee by the Guarantor, provided, that the
Guarantor's aggregate personal liability in respect of all of such other
guarantees and all Indebtedness described in subsection (a) of the
definition of Indebtedness (other than any loan permitted by clauses (a)
through (c), inclusive, of Section 9.10 hereof) does not exceed, and after
making the guarantee in question would not exceed, Ten Million Dollars
($10,000,000),
(g) any unsecured guarantee by the Guarantor or any Restricted
Subsidiary of the equity investment or performance of a Subsidiary (other
than any Indebtedness of such Subsidiary incurred for borrowed money) in
connection with a real estate project in favor of a partner or member, or
a partnership or limited liability company in which such Subsidiary is a
general partner or a member, as applicable, when the Guarantor or such
Restricted Subsidiary, as the case may be, deems it to be in its best
interest not to be a partner, a member, or have a direct interest in the
partnership or limited liability company, as applicable,
(h) the guarantee by the Guarantor of the obligations of
Franklin Town Towers Associates located in Philadelphia, Pennsylvania,
with respect to Museum Towers, in the original principal amount of Twenty
Million Four Hundred Thousand Dollars ($20,400,000), provided, that such
obligations shall not be amended, restated or otherwise modified without
the prior written consent of the Banks,
(i) any guarantee or indemnity by the Guarantor or any
Restricted Subsidiary for fraud, misappropriation, misapplication or
environmental problems, as are usual and customary in commercial mortgage
loan transactions entered into by the Guarantor and/or such Restricted
Subsidiary, provided, that such a guarantee or indemnity may be given by
the Guarantor or a Restricted Subsidiary, but not both (unless such
Restricted Subsidiary is also the borrower in the particular commercial
mortgage loan transaction), in connection with any particular commercial
mortgage loan transaction,
(j) subject to Section 9.10(j) hereof, any guarantee by the
Guarantor of an unsecured Hedge Agreement permitted by Section 8.04 of the
Agreement entered into by a Subsidiary (other than the Borrower),
(k) subject to the limitations set forth in Section 9.19 of
this Guaranty, any Completion Guaranty, or
(l) the guarantee in connection with the Park Creek
Metropolitan District and ▇▇▇▇▇▇▇▇▇ Land LLC located in ▇▇▇▇▇▇▇▇▇,
Colorado, with respect to the $19,000,000 Park Creek District Subordinate
Limited Property Tax Revenue Bonds, Series 2003A and the $10,000,000 Park
Creek District Subordinate Limited Property Tax Revenue Bonds, Series
2003-B, provided, that such guarantee obligations shall not be amended,
restated or otherwise modified without the prior written consent of the
Banks.
-21-
9.13. REDEMPTIONS, PREPAYMENTS, AND DIVIDENDS.
(a) The Guarantor will not directly or indirectly purchase,
acquire, redeem or retire any shares of its capital stock at any time
outstanding or set aside funds for any such purpose, except that, from and
after the Closing Date, so long as no Event of Default or violation of
Section 9.14 of this Guaranty shall have occurred or will result after
giving effect to such purchase acquisition, redemption or retirement, the
Guarantor may purchase, acquire, redeem or retire shares of its
outstanding capital stock in an aggregate amount not to exceed Thirty
Million Dollars ($30,000,000) minus any amounts paid as permitted by
Section 9.13(c) hereof, in any yearly period measured by the anniversary
dates of the Closing Date of the Agreement thereafter,
(b) The Guarantor will not directly or indirectly pay any
principal of, make sinking fund payments in respect of or purchase any
Indebtedness now or hereafter owing by the Guarantor other than any
principal payment, sinking fund payment or purchase the omission of which
would (or with the giving of notice or the lapse of any applicable grace
period or both) accelerate, or give any one the right to accelerate, the
maturity of such Indebtedness in accordance with the original terms
thereof; provided, that, notwithstanding the foregoing, the Guarantor
shall not make any payment on account of the Senior Notes in the event of
and during the continuance of any Payment Default under the Agreement or
this Guaranty,
(c) The Guarantor will not directly or indirectly declare or
pay any Dividends, except that, from and after the Closing Date, so long
as no Event of Default shall have occurred and be continuing hereunder and
no Event of Default shall have occurred and be continuing under the
Agreement, the Guarantor may pay Dividends in any aggregate amount not to
exceed Thirty Million Dollars ($30,000,000) minus any amounts paid as
permitted by Section 9.13(a) hereof, in any yearly period measured by the
anniversary dates of the Closing Date of the Agreement thereafter,
(d) The Guarantor shall not directly or indirectly exercise
its optional redemption rights, under the terms of any of the Senior Notes
or the Indenture, to redeem any of the Senior Notes prior to its maturity
date, or to deposit monies or other assets with the trustee under the
Indenture for the payment of any one or more Senior Notes or the release
of restrictive covenants thereunder, by defeasance, without in each case
the prior written consent of the Required Banks, except that the Guarantor
may take any of the above listed actions in connection with a refinancing
of the Indebtedness represented by the Senior Notes without the prior
consent of the Banks, in each case only so long as such refinancing does
not (i) result in an increase in the aggregate principal amount of
Indebtedness of the Guarantor as of the date of such proposed refinancing,
(ii) create Indebtedness that has a maturity earlier than the final
maturity of the Senior Notes, (iii) create a security interest in any
property of the Guarantor or any of its Subsidiaries, or (iv) result in
Indebtedness that is senior to the Indebtedness owing to the Banks under
this Guaranty or the Agreement. Executed copies of any and all
documentation evidencing or relating to such refinancing shall be
delivered to the Agent within five (5) Cleveland Banking Days of the
execution of such documentation,
-22-
(e) In the event of and during the continuance of any Event of
Default under the Agreement or under this Guaranty other than a Payment
Default, the Guarantor shall not cause the Borrower to declare, pay, or
make, and shall not accept payment of, any Dividends in respect of Capital
Stock of the Borrower, or, notwithstanding any other provision of the
Agreement or this Guaranty to the contrary, any loans or advances to the
Guarantor, (any such Dividends or loans are referred to herein as
"Distributions") in excess of the sum of the amount sufficient to pay,
when due, all interest payments in respect of the Senior Notes and the
amounts sufficient to pay, when due, all taxes of the Guarantor
(collectively, "Permitted Distributions"); provided, that any Permitted
Distributions shall be applied by the Guarantor strictly to the permitted
uses specified above, and
(f) Notwithstanding the provisions of Section 9.13(e) of this
Guaranty, in the event and during the continuance of any Payment Default,
the Guarantor shall not cause the Borrower to pay or make, and shall not
accept payment of, any Distributions.
9.14. CASH FLOW COVERAGE RATIO. The Guarantor will not permit
the Cash Flow Coverage Ratio, at any time, to be less than 2.25:1.00.
9.15. CONSOLIDATED GAAP SHAREHOLDERS' EQUITY. The Guarantor
will not permit the Consolidated GAAP Shareholders' Equity to be less than (a)
on the Closing Date, Six Hundred Twenty-Five Million Dollars ($625,000,000) and
(b) at any date of determination thereafter, the sum of (i) Six Hundred
Twenty-Five Million Dollars ($625,000,000), plus (ii) one hundred percent (100%)
of the cash proceeds from any sale or issuance of equity, plus (iii) fifty
percent (50%) of the Guarantor's consolidated GAAP net income, in each case, for
the year-to-date period ended on such Fiscal Quarterly Date.
9.16. ENVIRONMENTAL COMPLIANCE. The Guarantor will comply with
any and all Environmental Laws including, without limitation, all Environmental
Laws in jurisdictions in which the Guarantor or any Restricted Subsidiary owns
property, operates, arranges for disposal or treatment of hazardous substances,
solid waste or other wastes, accepts for transport any hazardous substances,
solid waste or other wastes or holds any interest in real property or otherwise.
The Guarantor will furnish to the Banks promptly after receipt thereof a copy of
any notice the Guarantor or any Restricted Subsidiary may receive from any
governmental authority, private person or entity or otherwise that any
litigation or proceeding pertaining to any environmental, health or safety
matter has been filed or is threatened against the Guarantor or such Restricted
Subsidiary, any real property in which the Guarantor or such Restricted
Subsidiary holds any interest or any past or present operation of the Guarantor
or such Restricted Subsidiary. The Guarantor will not knowingly allow the
storage, release or disposal of hazardous waste, solid waste or other wastes on,
under or to any real property in which the Guarantor holds any interest or
performs any of its operations, in violation of any Environmental Law. As used
in this Section, "litigation or proceeding" means any demand, claim, notice,
suit, suit in equity, action, administrative action, investigation or inquiry
whether brought by any governmental authority, private person or entity or
otherwise. The Guarantor shall defend, indemnify and hold the Banks harmless
against all costs, expenses, claims, damages, penalties and liabilities of every
kind or nature whatsoever (including attorneys' fees) arising out of or
resulting from the noncompliance of the Guarantor or any Restricted Subsidiary
with any
-23-
Environmental Law, provided, that, so long as and to the extent that the Banks
are not required to make any payment or suffer to exist any unsatisfied
judgment, order, or assessment against them, the Guarantor may pursue rights of
appeal to comply with such Environmental Laws. In any case of noncompliance with
any Environmental Law by a Restricted Subsidiary, the Banks' recourse for such
indemnity herein shall be limited solely to the property of the Restricted
Subsidiary holding title to the property involved in such noncompliance and such
recovery shall not be a lien, or a basis of a claim of lien or levy of
execution, against either the Guarantor's general assets or the general assets
of any of its Restricted Subsidiaries.
9.17. PLAN. Neither the Guarantor nor any Restricted
Subsidiary will suffer or permit any Plan to be amended if, as a result of such
amendment, the current liability under the Plan is increased to such an extent
that security is required pursuant to Section 307 of the Employee Retirement
Income Security Act of 1974, as amended from time to time. As used herein,
"current liability" means current liability as defined in Section 307 of such
Act.
9.18. [Reserved.]
9.19. CROSS COLLATERALIZATION AND CROSS DEFAULTS. (a) Except
as expressly permitted by this Section 9.19, neither the Guarantor nor any
Restricted Company will (i) cross-default or agree to cross-default any
Permitted Debt to this Guaranty or the Debt; (ii) agree to any financial
covenants based on the performance of the Guarantor under any other Permitted
Debt (other than the Debt); or (iii) cross-collateralize, or agree to
cross-collateralize Permitted Debt (other than the Debt) owing to any one lender
under one or more different loan agreements or arrangements, provided, that the
cross-defaulted and/or cross-collateralized Indebtedness set forth on Schedule
9.19 attached hereto shall be permitted, provided, further, that such Schedule
9.19 shall not be amended or otherwise modified after the Closing Date without
the prior written consent of the Agent.
(b) Notwithstanding Section 9.19(a) above:
(i) with respect to construction projects that are
constructed in multiple phases and/or stabilized properties,
any Restricted Company shall be permitted to cross-default
and/or cross-collateralize any Permitted Debt with other
Permitted Debt (other than, in each case, the Debt), but only
if the phases to be cross-collateralized in and/or
cross-defaulted consist of a single identifiable project;
(ii) under a Completion Guaranty granted by the
Guarantor to a construction lender, the Guarantor shall be
permitted to agree to a financial covenant solely with respect
to the Guarantor's net worth, but only if (A) the Indebtedness
related to such Completion Guaranty is in excess of One
Hundred Million Dollars ($100,000,000), (B) the Indebtedness
related to such Completion Guaranty has a maturity of two (2)
years or greater, not including extensions, (C) any net worth
financial covenant is calculated in substantially the same
manner as the covenant set forth in Section 9.15 of this
Guaranty and requires a net worth for the Guarantor of not
more than Two Hundred Seventy Five
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Million Dollars ($275,000,000) and (D) the aggregate of all
Indebtedness subject to such Completion Guaranties shall not
exceed Four Hundred Million Dollars ($400,000,000), exclusive
of the Indebtedness incurred in connection with the projects
set forth on Schedule 9.19 to this Guaranty;
(iii) under any Completion Guaranty granted by the
Guarantor that contains the net worth financial covenant
referred to in Section 9.19(b)(ii) above, (A) the construction
lender shall not be permitted to call upon such Completion
Guaranty due solely to a violation of such net worth financial
covenant and (B) the construction lender shall only be
permitted to call upon such Completion Guaranty if the project
is not performing (i.e. not on budget and/or schedule); and
(iv) with respect to Hedge Agreements permitted by this
Guaranty, the related documentation may provide that any Event
of Default that occurs and continues after the expiration of
any applicable grace period with respect thereto and that
permits the Banks to accelerate the maturity of the Debt,
constitutes a default under such documentation.
9.20. OWNERSHIP OF LAND. The Guarantor shall not, and shall
not permit any Restricted Subsidiary to purchase, lease or otherwise acquire any
real property of any kind after the Closing Date, other than any real property
to be used only for the business of the Guarantor or any such Restricted
Subsidiary, in each case, as such business has been conducted prior to the
Closing Date.
9.21. PERMITTED NON-AFFILIATE LOAN REPORTS. Within forty-five
(45) days after each Fiscal Quarterly Date, the Guarantor will furnish to each
Bank a report setting forth (a) each Permitted Non-Affiliate Loan that is
outstanding as of such Fiscal Quarterly Date and (b) for the three year period
ending on such Fiscal Quarterly Date, the aggregate amount of gain deferred for
federal income tax purposes on the consolidated return of the Guarantor in
connection with any Non-Affiliate Construction Projects, and, if requested by
the Agents or any Bank, accompanied by all applicable tax forms filed or to be
filed in connection with such Non-Affiliate Construction Projects.
10. DEFAULT; REMEDIES. The Guarantor shall be in default
hereunder in the event that any of the following (each an "Event of Default")
shall occur or exist:
(a) Any representation or warranty made by the Guarantor, or
any of its officers, herein, or in any written statement or certificate
furnished at any time in connection herewith, shall prove untrue in any
material respect as of the date it was made, or
(b) The Guarantor shall fail to observe, perform, or comply
with any obligation, covenant, agreement, or undertaking of the Guarantor
set forth in Sections 3, 9.5, 9.8, 9.13, 9.14 and/or 9.15 hereof, or
(c) The Guarantor shall fail to observe, perform, or comply
with any obligation, covenant, agreement, or undertaking of the Guarantor
set forth in any section
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or provision hereof other than those identified specifically in subsection
(b) above and the Guarantor shall not have corrected such failure within
thirty (30) days after the giving of written notice thereof to the
Guarantor by the Agent or any Bank that the specified failure is to be
corrected, or
(d) The Guarantor and/or any Restricted Subsidiary defaults in
any payment of principal or interest due and owing upon any Indebtedness
in excess of $1,000,000, or, in the case of the Guarantor, in the payment
or performance of any obligation permitted to be outstanding or incurred
pursuant to Sections 9.10 and/or 9.12 hereof in excess of $1,000,000,
beyond any period of grace provided with respect thereto or in the
performance of any other agreement, term or condition contained in any
agreement under which any such obligation is created, if the effect of
such default is to accelerate the maturity of the related Indebtedness or
to permit the holder thereof to cause such Indebtedness to become due
prior to its stated maturity or foreclose on any lien on property of the
Guarantor securing the same, except that defaults in payment or
performance of non-recourse obligations of the Guarantor or any Restricted
Subsidiary shall not constitute Events of Default under this Section 10(d)
unless such defaults have, individually or in the aggregate, a material
adverse effect on the business or financial condition of the Guarantor;
provided, that it shall be an Event of Default hereunder if any default
occurs (after giving effect to any applicable grace period) under the
Senior Notes permitted by Section 9.10(h) of this Guaranty or under the
Indenture, or
(e) (i) any Restricted Subsidiary shall (A) generally not pay
its debts as such debts become due, or (B) make a general assignment for
the benefit of creditors, or (C) apply for or consent to the appointment
of a receiver, a custodian, a trustee, an interim trustee or liquidator of
itself or all or a substantial part of its assets, or (D) be adjudicated a
debtor or have entered against it an order for relief under Title 11 of
the United States Code, as the same may be amended from time to time, or
(E) file a voluntary petition in bankruptcy or file a petition or an
answer seeking reorganization or an arrangement with creditors or seeking
to take advantage of any other law (whether federal or state) relating to
relief of debtors, or admit (by answer, by default or otherwise) the
material allegations of a petition filed against it in any bankruptcy,
reorganization, insolvency or other proceeding (whether federal or state)
relating to relief of debtors, or (F) suffer or permit to continue
unstayed and in effect for thirty (30) consecutive days any judgment,
decree or order, entered by a court of competent jurisdiction, which
approves a petition seeking its reorganization or appoints a receiver,
custodian, trustee, interim trustee or liquidator of itself or of all or a
substantial part of its assets, or (G) take or omit to take any other
action in order thereby to effect any of the foregoing or (H) fail to pay
and discharge all lawful taxes, assessments, and governmental charges or
levies imposed upon it or its income, profits, or properties, and/or all
lawful claims for labor, materials, and supplies, which, if unpaid, might
become a lien or charge against such properties, in all cases before the
same shall become in default, or (I) fail to comply with any and all
Environmental Laws applicable to such Subsidiary, its properties, or
activities, or (J) fail to observe, perform, or fulfill any of its
obligations, covenants or conditions contained in any evidence of
Indebtedness or other contract, decree, order, judgment, or instrument to
which such Subsidiary is a party or by which it or its assets are bound,
and (ii) any such event or events described in (i) above shall in the
reasonable
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judgment of the Banks have a material adverse effect on the business or
financial condition of the Guarantor, or
(f) An Event of Default specified in Article X of the
Agreement shall have occurred and be continuing, or
(g) The Guarantor shall (i) make a general assignment for the
benefit of creditors, (ii) file a voluntary petition under any chapter or
provision of Title 11 United States Code (Bankruptcy), as from time to
time in effect (the "Bankruptcy Code") or a petition or answer seeking
reorganization of the Guarantor or a readjustment of its Indebtedness
under the Bankruptcy Code or any other federal or state law providing for
relief of debtors, reorganization, liquidation, or arrangements with
creditors, (iii) consent to the appointment of a receiver or trustee of
its properties, or (iv) cease to be or be unable to pay its debts
generally as they become due, or
(h) Relief shall be ordered against the Guarantor as debtor in
any involuntary case under the Bankruptcy Code, or a petition or
proceedings for bankruptcy or for reorganization shall be filed against
the Guarantor under the Bankruptcy Code or any other federal or state law
providing for relief of debtors, reorganization, liquidation, or
arrangements with creditors, and the Guarantor shall admit the material
allegations thereof, or an order, judgment or decree entered therein shall
not be vacated or stayed within thirty (30) days of its entry, or a
receiver or trustee shall be appointed for the Guarantor or its properties
or any part thereof and remain in possession thereof for thirty (30) days,
or
(i) The Guarantor defaults in the performance of any
obligation in the Subordination Agreement or in the performance of any
other agreement, covenant, term or condition in the Subordination
Agreement,
then, in any such event (other than an Event of Default referred to in Section
10(g) or 10(h) above), and at any time thereafter, the Agent and/or the Required
Banks may at their option, by written notice delivered or mailed to the
Guarantor, do any one or more of the following: (a) declare the Debt to be
immediately due and payable, and upon any such declaration such Debt shall
become and be forthwith due and payable by Guarantor without any further notice,
presentment, or demand of any kind, all of which are expressly waived by the
Guarantor, or (b) require the Guarantor to purchase the Debt at par value,
without recourse, within ten (10) days after such notice, by paying to the
Agent, in immediately available U.S. funds, an amount equal to the unpaid
principal amount then outstanding on the Notes and any other matured or
unmatured Debt owing to the Banks, plus the unpaid accrued interest on the Notes
at the rate or rates determined in accordance with the Agreement. If any Event
of Default referred to in Section 10.07(e), 10.07(f) or 10.07(g) of the
Agreement or any Event of Default referred to in Section 10(g) or 10(h) of this
Guaranty shall occur, the Debt shall become and thereafter be immediately due
and payable by the Guarantor without any presentment, demand, or notice of any
kind, all of which are hereby waived by the Guarantor. The foregoing rights,
powers, and remedies of the Agent and the Banks are not exclusive and are in
addition to any and all other rights, powers, and remedies provided for
hereunder (including, without limitation, under Section 13 hereof), at law,
and/or in equity. The exercise by the Agent and/or the Banks of any
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right, power, or remedy shall not waive or preclude the exercise of any other
rights, powers, and/or remedies.
11. MISCELLANEOUS. The foregoing rights, powers, and remedies
of the Agent and the Banks are not exclusive and are in addition to any and all
other rights, powers, and remedies provided for hereunder, at law, and/or in
equity. The exercise by the Agent and/or the Banks of any right, power, or
remedy shall not waive or preclude the exercise of any other rights, powers,
and/or remedies. This Guaranty shall bind the Guarantor and its successors and
assigns and shall inure to the benefit of the Agent and the Banks and their
respective successors and assigns including (without limitation) each holder of
any Note. The provisions of this Guaranty and the respective rights and duties
of the Guarantor and the Agent and/or the Banks hereunder shall be interpreted
and determined in accordance with Ohio law, without regard to principles of
conflict of laws. If at any time one or more provisions of this Guaranty is or
becomes invalid, illegal or unenforceable in whole or in part, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby. This Guaranty constitutes a final written
expression of all of the terms of this Guaranty, is a complete and exclusive
statement of those terms and supersedes all oral representations, negotiations,
and prior writings, if any, with respect to the subject matter hereof. The
relationship between the Guarantor and the Agent and/or the Banks with respect
to this Guaranty is and shall be solely that of debtor and creditor,
respectively, and the Agent and/or the Banks have no fiduciary obligation to the
Guarantor with respect to this Guaranty or the transactions contemplated
thereby. All representations and warranties of the Guarantor shall survive the
execution and delivery of this Guaranty and be and remain true and correct until
this Guaranty is discharged. Captions herein are for convenient reference only
and shall have no effect on the interpretation of any provision hereof. The
Guarantor acknowledges that it, either directly or indirectly through its
representatives, has participated in the drafting of this Guaranty, and any
applicable rule of construction that ambiguities are to be resolved against the
drafting party shall not be applied in connection with the construction or
interpretation of this Guaranty.
12. JURY TRIAL WAIVER. THE GUARANTOR WAIVES THE RIGHT TO HAVE
A JURY PARTICIPATE IN RESOLVING ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT,
OR OTHERWISE, BETWEEN OR AMONG THE GUARANTOR AND THE AGENT, THE BANKS, AND/OR
THE BORROWER ARISING OUT OF OR IN CONNECTION WITH THE AGREEMENT, THIS GUARANTY,
OR ANY OTHER AGREEMENT, INSTRUMENT OR DOCUMENT EXECUTED OR DELIVERED IN
CONNECTION THEREWITH OR THE TRANSACTIONS RELATED THERETO.
13. NOTICES. Except as otherwise expressly provided herein,
all notices, requests, demands and other communications provided for hereunder
shall be in writing (including telegraphic, telex, facsimile, transmission or
cable communication) and mailed, telexed, telegraphed, facsimile transmitted,
cabled or delivered, if to the Guarantor, addressed to it at the address
specified on the signature pages of this Guaranty, if to a Bank, addressed to
the address of such Bank specified on the signature pages of the Agreement and
if to the Agents, addressed to them at the address of the Agent or the
Syndication Agent, as applicable, specified on the signature pages of the
Agreement. All notices, statements, requests, demands and other communications
provided for hereunder shall be deemed to be given or made when delivered or
forty-eight (48) hours after being deposited in the mails with postage prepaid
by registered or
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certified mail or delivered to a telegraph company, addressed as aforesaid,
except that notices from the Guarantor to the Agent or the Banks pursuant to any
of the provisions hereof shall not be effective until received by the Agent or
the Banks.
14. CONSENT TO JURISDICTION. The Guarantor agrees that any
action or proceeding to enforce or arising out of this Guaranty may be commenced
in the Court of Common Pleas for Cuyahoga County, Ohio or in the District Court
of the United States for the Northern District of Ohio, and the Guarantor waives
personal service of process and agrees that a summons and complaint commencing
an action or proceeding in any such court shall be properly served and shall
confer personal jurisdiction over the Guarantor if served to the Guarantor at
the address listed opposite the signature of the Guarantor at the end of this
Guaranty or as otherwise provided by the laws of the State of Ohio or the United
States.
15. ENTIRE AGREEMENT. This Guaranty and any other agreement,
document or instrument attached hereto or referred to herein or executed on or
as of the date hereof integrate all the terms and conditions mentioned herein or
incidental hereto and supersede all oral representations and negotiations and
prior writings with respect to the subject matter hereof.
16. INDEPENDENCE OF COVENANTS. All covenants hereunder shall
be given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default if such action is taken or
condition exists, and if a particular action or condition is expressly permitted
under any covenant, unless expressly limited to such covenant, the fact that it
would not be permitted under the general provisions of another covenant shall
not constitute an Event of Default if such action is taken or condition exists.
[The remainder of this page intentionally left blank.]
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IN WITNESS WHEREOF, the Guarantor has caused this Guaranty to
be executed as of the date set forth above, by an officer thereunto duly
authorized.
Address: FOREST CITY ENTERPRISES, INC.
▇▇▇▇ ▇▇▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇ By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Executive Vice President, Chief
Financial Officer and Secretary
[Signature page of Guaranty]
EXHIBIT C
[Intentionally Omitted]
EXHIBIT D
REVOLVING LOAN NOTE
(Bank)
$____________ Cleveland, Ohio
March ___, 2004
FOR VALUE RECEIVED, the undersigned, FOREST CITY RENTAL PROPERTIES
CORPORATION, an Ohio corporation (the "Borrower"), hereby promises to pay to the
order of _______________________________(the "Holder"), in lawful money of the
United States of America, at the main office of KeyBank National Association,
Administrative Agent, ▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, the principal
sum of ___________________________ DOLLARS ($___________), or, if lesser, the
aggregate unpaid principal amount of all Revolving Loans evidenced by this Note
made by the Holder to the Borrower pursuant to Section 2.03 of the Credit
Agreement (as defined hereinafter). The unpaid principal balance outstanding on
this Revolving Loan Note (this "Note") from time to time and interest thereon
shall be determined by the ledgers and records of the Holder as accurately
maintained.
This Note is one of the Revolving Loan Notes defined and referred to
in, and is entitled to the benefits of, a certain Credit Agreement, dated as of
March ____, 2004, by and among the Borrower, the Banks named therein, KeyBank
National Association, as Administrative Agent, and National City Bank, as
Syndication Agent (said Credit Agreement, as it may be amended, restated, or
otherwise modified from time to time, being herein called the "Credit
Agreement"). A statement of the rights of the Holder and the duties and
obligations of the Borrower in relation thereto is made by reference to the
Credit Agreement, but neither this reference to the Credit Agreement nor any
provision thereof shall affect or impair the absolute and unconditional
obligation of the Borrower to pay the principal of and interest on this Note
when due. Capitalized terms used in this Note but not defined herein shall have
the respective meanings ascribed to them in the Credit Agreement.
The principal of this Note shall be due and payable on the
Termination Date, or earlier as provided in the Credit Agreement. The Borrower
also promises to pay interest on the unpaid principal amount of this Note from
time to time outstanding from the date of this Note until the payment in full
thereof at the rates per annum determined in accordance with the Credit
Agreement. Interest shall be payable on each date provided for in or determined
in accordance with the provisions of the Credit Agreement; provided, that
interest on any principal not paid when due shall be due and payable on demand.
Interest on this Note shall be calculated on the basis of a 360 day
year for the actual number of days elapsed.
-1-
Reference is hereby made to the Credit Agreement, which contains
provisions for the acceleration of the maturity hereof upon the happening of
certain stated events and for voluntary prepayments hereon. The term "Holder"
includes the successors and assigns, if any, of the Holder named in the first
paragraph hereof.
If this Note shall not be paid at maturity, whether such maturity
occurs by reason of lapse of time or by operation of any provision for
acceleration of maturity contained in the Credit Agreement, the principal hereof
and the unpaid interest thereon shall bear interest, until paid, at a rate(s)
equal to the rate(s) otherwise in effect pursuant to the Credit Agreement plus
two percent (2%) per annum. All payments of principal and interest on this Note
shall be made in immediately available funds.
The Borrower waives demand, presentment for payment, notice of
dishonor, protest, notice of protest, and diligence in collection and bringing
suit, and agrees that the Holder may extend the time for payment, accept partial
payment, take security therefor or exchange or release any collateral, without
discharging or releasing the Borrower.
This Note was executed in Cleveland, Cuyahoga County, Ohio. The
construction, validity and enforceability of this Note shall be governed by and
interpreted according to the laws of the State of Ohio.
The Borrower authorizes any attorney at law to appear before any
court of record, whether state or Federal, in the county where this Note was
executed or where the Borrower resides or may be found, after the unpaid
principal balance of this Note becomes due, either by lapse of time or by
operation of any provision for acceleration of maturity contained in the Credit
Agreement, and waive the issuance and service of process, admit the maturity of
this Note, by reason of acceleration or otherwise, and confess judgment against
the Borrower in favor of the Holder of this Note for the amount then appearing
due on this Note, together with interest thereon and costs of suit, and
thereupon to release all errors and waive all rights of appeal and stays of
execution. The Borrower expressly authorizes any attorneys or agents for the
Holder to receive compensation from the Holder for services rendered in
exercising the foregoing warrant of attorney and in the enforcement of any
judgment obtained against the Borrower in favor of the Holder on this Note, and
the Borrower expressly waives any conflict of interest to which any attorneys
for the Holder may be subject that may arise in connection with such attorneys
exercising any of the rights and/or powers of the Holder provided for herein or
the enforcement of any judgment hereon in favor of the Holder. The foregoing
warrant of attorney shall survive any judgment and may be used from time to time
without exhausting the right to further use the warrant of attorney and, if any
judgment be vacated for any reason, the Holder of this Note nevertheless may use
the foregoing warrant of attorney to obtain an additional judgment or judgments
against the Borrower.
-2-
"WARNING -- BY SIGNING THIS PAPER YOU GIVE UP YOUR RIGHT TO NOTICE AND
COURT TRIAL. IF YOU DO NOT PAY ON TIME A COURT JUDGMENT MAY BE TAKEN AGAINST YOU
WITHOUT YOUR PRIOR KNOWLEDGE AND THE POWERS OF A COURT CAN BE USED TO COLLECT
FROM YOU REGARDLESS OF ANY CLAIMS YOU MAY HAVE AGAINST THE CREDITOR WHETHER FOR
RETURNED GOODS, FAULTY GOODS, FAILURE ON HIS PART TO COMPLY WITH THE AGREEMENT,
OR ANY OTHER CAUSE."
FOREST CITY RENTAL PROPERTIES
CORPORATION
By: ____________________________________
▇▇▇▇▇▇ ▇. ▇▇▇▇▇
Vice President and Assistant
Secretary
-3-
EXHIBIT E
FORM OF LETTER OF CREDIT REQUEST
No. ______(1) Dated ____________(2)
KeyBank National Association, as Administrative Agent under the
Credit Agreement (as amended, modified or supplemented from
time to time, the "Credit Agreement"), dated as of March ___, 2004,
among Forest City Rental Properties Corporation, the Banks
from time to time party thereto, KeyBank National Association,
as Administrative Agent, and National City Bank, as Syndication Agent
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention: _______________________
Dear Sirs:
We hereby request that KeyBank National Association, in its capacity as
Administrative Agent, issue a Letter of Credit for the account of the
undersigned on ____________(3) (the "Date of Issuance") in the aggregate stated
amount of ____________(4). The requested Letter of Credit shall be denominated
in U.S. dollars.
For purposes of this Letter of Credit Request, unless otherwise defined herein,
all capitalized terms used herein shall have the respective meanings provided in
the Credit Agreement.
----------
(1) Letter of Credit Request Number.
(2) Date of Letter of Credit Request.
(3) Date of Issuance which shall be at least five Cleveland Banking Days
after the date of this Letter of Credit Request (or such shorter
period as is acceptable to KeyBank National Association).
(4) Aggregate initial stated amount of Letter of Credit.
The beneficiary of the requested Letter of Credit will be _________________(1),
and such Letter of Credit will be in support of ___________________(2) and will
have a stated expiration date of ____________(3).
We hereby certify that:
(1) the representations and warranties contained in the Credit
Agreement and the Related Writings will be true and correct in all
material respects on the Date of Issuance, both before and after giving
effect to the issuance of the Letter of Credit requested hereby (it being
understood and agreed that any representation or warranty which by its
terms is made as of a specified date shall be required to be true and
correct in all material respects only as of such specified date); and
(2) no Possible Default or Event of Default has occurred and is
continuing nor, after giving effect to the issuance of the Letter of
Credit requested hereby, would such a Possible Default or an Event of
Default occur.
Copies of all relevant documentation with respect to the supported transaction,
as required by the Credit Agreement, are attached hereto.
FOREST CITY RENTAL PROPERTIES
CORPORATION
By: ____________________________________
Title:
----------
(1) Insert name and address of beneficiary.
(2) Insert description of the Indebtedness and describe obligation to
which it relates or a description of the commercial transaction which is being
supported, as applicable.
(3) Insert last date upon which drafts may be presented which may not be
later than the Termination Date.
-2-
EXHIBIT F
FORM OF NOTICE OF BORROWING
___________ ___, 200_
KeyBank National Association, as Administrative Agent under the
Credit Agreement (referred to below), dated as of March ____, 2004
▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
Attention:
Ladies and Gentlemen:
The undersigned, Forest City Rental Properties Corporation (the "Borrower"),
hereby gives you notice, irrevocably, pursuant to Section 5.01 of the Credit
Agreement, dated as of March ____, 2004 (as amended from time to time, the
"Credit Agreement"; the terms defined therein being used herein as so defined),
among the Borrower, various Banks from time to time party thereto, National City
Bank, as Syndication Agent, and you, as Administrative Agent for such Banks,
that the undersigned requests a Loan under the Credit Agreement and for that
purpose sets forth below the information relating to such Loan (the "Proposed
Loan"):
(i) The proposed borrowing is to be a Revolving Loan.
(ii) The aggregate principal amount of the Proposed Loan is
$_________________.
(iii) The Cleveland Banking Day of the Proposed Loan is
__________________.(1)
(iv) The Proposed Loan shall be initially maintained subject to the
[Base Rate Option] [the LIBOR Rate Option].
----------
(1) Shall be a Cleveland Banking Day at least one Cleveland Banking Day in the
case of Loans subject to the Base Rate Option and two Cleveland Banking Days
in the case of Loans subject to the LIBOR Rate Option, in each case, after the
date hereof.
(v) The initial Interest Period for the Proposed Loan (if subject to
the LIBOR Rate Option) is __________ month(s).
The undersigned hereby certifies that the following statements are true and
correct on the date hereof, and will be true and correct on the date of the
Proposed Loan:
(A) the representations and warranties contained in the Credit
Agreement and the Related Writings are and will be true and correct in all
material respects, both before and after giving effect to the Proposed
Loan and to the application of the proceeds thereof, as though made on
such date (it being understood and agreed that any representation or
warranty which by its terms is made as of a specified date shall be
required to be true and correct in all material respects only as of such
specified date); and
(B) no Possible Default or Event of Default has occurred and is
continuing, or would result from such Proposed Loan or from the
application of the proceeds thereof.
FOREST CITY RENTAL PROPERTIES
CORPORATION
By: ____________________________________
Name:
Title:
-2-
EXHIBIT G
FORM OF ASSIGNMENT AND ASSUMPTION AGREEMENT
This Assignment and Assumption Agreement (this "Assignment Agreement")
between __________________ (the "Assignor") and _____________ (the "Assignee")
is dated as of ___________.
W I T N E S S E T H:
WHEREAS, the Assignor is a party to a certain Credit Agreement, dated as
of March _____, 2004, by and among Forest City Rental Properties Corporation, an
Ohio corporation (the "Borrower"), the Banks named therein, KeyBank National
Association, as Administrative Agent (hereinafter referred to as the "Agent"),
and National City Bank, as Syndication Agent (said Credit Agreement, as it may
be amended, restated, or otherwise modified from time to time, being herein
called the "Credit Agreement"). Capitalized terms used herein and not otherwise
defined herein shall have the meanings attributed to them in the Credit
Agreement; and
WHEREAS, the Assignor is willing to sell and assign to the Assignee, and
the Assignee is willing to purchase and assume from the Assignor, all or a
portion of the Assignor's Loans and/or Commitments under the Credit Agreement;
NOW, THEREFORE, it is mutually agreed as follows:
1. The Assignor hereby sells and assigns (without recourse) to the
Assignee, and the Assignee hereby purchases and assumes from the Assignor, as of
the date hereof, all or a portion of the Assignor's Revolving Loans, which
amount shall not be less than Ten Million Dollars ($10,000,000) to the extent
that the Assignee is not an Affiliate of the Assignor, and the pro-rata share of
the Assignor's Commitment as each specified on Schedule 1 attached hereto and
the Assignor's corresponding rights and obligations under the Credit Agreement.
After giving effect to such sale and assignment, the Assignee's Commitment and
the amount of the Revolving Loans owing to the Assignee will be as set forth in
Item 2(C) and Item 2(F) of Schedule 1 respectively.
2. The effective date of this Assignment Agreement (the "Effective Date")
shall be the date specified in Item 3 of Schedule 1. In no event will the
Effective Date occur if the assignment fees required to be paid to the Agent
under Section 3 hereof are not paid on or prior to the proposed Effective Date,
unless otherwise agreed to in writing by the Agent. The Assignor will (i) no
later than three (3) Business Days prior to the proposed Effective Date, notify
the Agent of the proposed Effective Date; (ii) if the Assignor and the Assignee
are not affiliated entities, obtain consents of this assignment from the Agent
and the Borrower, if required, prior to the proposed Effective Date, which
consent shall not be unreasonably withheld or delayed, and (iii) to the extent
any letters of credit are outstanding, obtain consents of this assignment from
the Agent prior to the proposed Effective Date, which consent shall not be
unreasonably withheld or delayed. Upon such acceptance and recording by the
Agent, as of the Effective Date, (i) the Assignee shall be a party to the Credit
Agreement and, to the extent provided in this Assignment Agreement, have the
same rights and obligations thereunder as it
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would if it were the Assignor; and (ii) the Assignor shall relinquish its rights
and be released from its corresponding obligations under the Credit Agreement
with respect to the rights and obligations assigned to the Assignee hereunder.
3. The Agent shall be paid a nonrefundable assignment fee by [the
Assignor] [the Assignee] in the amount of $3,000 on or prior to the Effective
Date. On and after the Effective Date, the Assignee shall be entitled to receive
from the Agent all payments of principal, interest and fees with respect to the
interest assigned hereby. In consideration for the sale and assignment of Loans
hereunder, the Assignee shall pay the Assignor, on or prior to the Effective
Date, an amount equal to $____________. The Assignee will promptly remit to the
Assignor (i) the portion of any principal payments assigned hereunder and
received from the Agent with respect to any such Loan prior to the Effective
Date and (ii) any amounts of interest on Loans and fees received from the Agent
which relate to the portion of the Loans assigned to the Assignee hereunder for
periods prior to the Effective Date and not previously paid by the Assignee to
the Assignor. In the event that either party hereto receives any payment to
which the other party hereto is entitled under this Assignment Agreement, then
the party receiving such amount shall promptly remit it to the other party
hereto.
4. Upon such acceptance and recording by the Agent, from and after the
Effective Date, the Agent shall make all payments under the Credit Agreement and
the Revolving Loan Notes in respect of the interest assigned hereby (including,
without limitation, all payments of principal, interest and commitment fees with
respect thereto) to the Assignee. The Assignor and Assignee shall make all
appropriate adjustments in payments under the Credit Agreement and the Revolving
Loan Notes for periods prior to the Effective Date directly between themselves.
5. If any reduction in the Revolving Loans occurs between the date of this
Assignment Agreement and the Effective Date, the percentage interest specified
in Item 2(B) of Schedule 1 shall remain the same, but the dollar amount
purchased shall be recalculated based on the reduced Revolving Loan amount.
6. The Assignor (i) represents and warrants that (A) it is the legal and
beneficial owner of the interest being assigned by it hereunder, (B) such
interest is free and clear of any adverse claim, and (C) no Possible Default or
Event of Default exists; (ii) makes no representation or warranty and assumes no
responsibility with respect to any statements, warranties or representations
made in or in connection with the Credit Agreement or the execution, legality,
validity, enforceability, genuineness, sufficiency or value of the Credit
Agreement or any other instrument or document furnished pursuant thereto; (iii)
makes no representation or warranty and assumes no responsibility with respect
to the financial condition or the creditworthiness of the Borrower or the
performance or observance by the Borrower of any of its obligations under the
Credit Agreement or any other instrument or document furnished pursuant thereto;
and (iv) attaches the Revolving Loan Note or Revolving Loan Notes held by the
Assignor and requests that the Agent exchange such Revolving Loan Note or
Revolving Loan Notes for a new Revolving Loan Note or Revolving Loan Notes
payable to the order of the Assignee in an amount equal to the Commitment
assumed by the Assignee pursuant hereto and the Assignor in an amount equal to
the Commitment retained by the Assignor under the Credit Agreement,
respectively, as specified on Schedule 1. It is understood and agreed that the
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assignment and assumption hereunder are made without recourse to the Assignor
and that the Assignor makes no other representation or warranty of any kind to
the Assignee.
7. The Assignee (i) represents and warrants that it is a commercial bank,
financial institution, mutual fund or institutional "accredited investor" (as
defined in Regulation D of the Securities Act of 1933, as amended); (ii)
confirms that it has received a copy of the Credit Agreement and each of the
other Related Writings, together with copies of the financial statements
requested by the Assignee and such other documents and information as it has
deemed appropriate to make its own credit analysis and decision to enter into
this Assignment Agreement; (iii) agrees that it will, independently and without
reliance upon any Agent, the Assignor or any other Bank and based on such
documents and information as it shall deem appropriate at the time, continue to
make its own credit decisions in taking or not taking action under the Credit
Agreement; (iv) appoints and authorizes the Agent to take such action as agent
on its behalf and to exercise such powers and discretion under the Credit
Agreement as are delegated to the Agent by the terms thereof, together with such
powers and discretion as are reasonably incidental thereto; (v) agrees that it
will perform in accordance with their terms of all of the obligations that by
the terms of the Credit Agreement are required to be performed by it as a Bank;
(vi) if the Assignee is organized under the laws of a jurisdiction outside the
United States, attaches the forms prescribed by the Internal Revenue Service of
the United States certifying as to the Assignee's status for purposes of
determining exemption from United States withholding taxes with respect to all
payments to be made to the Assignee under the Credit Agreement and the Revolving
Loan Notes or such other documents as are necessary to indicate that all such
payments are subject to such taxes at a rate reduced by an applicable tax
treaty; and (vii) confirms that none of the funds, monies, assets or other
consideration being used to make the purchase and assumption hereunder are "plan
assets" as defined under ERISA and that its rights, benefits and interests in
and under the Credit Agreement and Related Writings will not be "plan assets"
under ERISA.
8. The Assignor and the Assignee agree to indemnify and hold the Agent
harmless against any and all losses, costs and expenses (including, without
limitation, reasonable attorneys' fees) and liabilities incurred by the Agent in
connection with or arising in any manner from this assignment.
9. After the Effective Date, the Assignee shall have the right pursuant to
Section 13.08 of the Credit Agreement to assign the rights which are assigned to
the Assignee hereunder to any qualified entity as provided in Section 13.08 of
the Credit Agreement, provided that (i) any such subsequent assignment does not
violate any of the terms and conditions of the Credit Agreement or Related
Writings or any law, rule, regulation, order, writ, judgment, injunction or
decree and that any consent required under the terms of the Credit Agreement or
Related Writings has been obtained and (ii) unless the prior written consent of
the Assignor is obtained, the Assignee is not thereby released from its
obligations to the Assignor hereunder.
10. Each party to this Assignment Agreement agrees to pay its own fees and
expenses incurred by it in connection with the negotiation, preparation and
execution of this Assignment Agreement.
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11. COUNTERPARTS. This Assignment Agreement and any amendments, waivers,
consents or supplements may be executed in counterparts, each of which when so
executed and delivered shall be deemed an original, but all of which together
shall constitute but one and the same instrument.
12. ENTIRE AGREEMENT. This Assignment Agreement together with attached
Schedule 1 embody the entire agreement and understanding between the parties
hereto and supersede all prior agreements and understandings between the parties
hereto relating to the subject matter hereof.
13. GOVERNING LAW. This Assignment Agreement shall be governed by the
internal law, and not the law of conflicts, of the State of Ohio.
14. NOTICES. Notices shall be given under this Assignment Agreement in the
manner set forth in the Credit Agreement. For the purpose hereof, the addresses
of the parties hereto (until notice of a change is delivered) shall be the
address set forth in the Credit Agreement or the attached Schedule 1, if a
different address is therein provided.
IN WITNESS WHEREOF, the parties hereto have executed this Assignment
Agreement by their duly authorized officers as of the date first above written.
(Assignor Bank)
By: ________________________________
Name: __________________________
Title: _________________________
(Assignee Bank)
By: ________________________________
Name: __________________________
Title: _________________________
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SCHEDULE 1
to Assignment and Assumption Agreement
1. Date of Assignment and Assumption Agreement:
2. Amounts (as of the date of Item 1 above unless indicated otherwise):
A. Assignor's Commitment $
B. Percentage of Assignor's Commitment assigned %
C. Amount of Assignor's Commitment Assigned
to Assignee (A * B) $
D. Amount of Assignor's Commitment retained
after Effective Date (A-C) $
E. Assignor's aggregate outstanding principal amount of
Revolving Loans $
F. Aggregate outstanding principal amount of Revolving
Loans assigned to Assignee $
G. Assignor's aggregate principal amount of Revolving Loans
Retained after Effective Date (E-F) $
H. Aggregate outstanding amount of accrued interest and fees
assigned $
3. Effective Date:
4. Address of Assignee:
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