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EXHIBIT F.2
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AMENDED AND RESTATED
CREDIT AGREEMENT
Dated as of April 20, 1998
by and among
ALLIED CAPITAL CORPORATION,
ALLIED CAPITAL REIT, INC.
and
ALLIED CAPITAL SBLC CORPORATION
as Borrowers,
THE FINANCIAL INSTITUTIONS PARTY HERETO
AND THEIR ASSIGNEES UNDER SECTION 12.5(a),
as Lenders,
▇▇▇▇▇ BANK N.A.,
as Managing Agent,
BANKBOSTON, N.A.,
as Disbursing Agent,
FIRST UNION NATIONAL BANK,
as Syndication Agent,
and
NATIONSBANK OF TEXAS, N.A.,
as Co-Agent
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TABLE OF CONTENTS
ARTICLE 1 DEFINITIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.1. DEFINITIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
SECTION 1.2. GENERAL; REFERENCES TO TIMES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .17
ARTICLE 2 CREDIT FACILITY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.1. LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .18
SECTION 2.2. RATES AND PAYMENT OF INTEREST ON LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .19
SECTION 2.3. NUMBER OF INTEREST PERIODS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.4. REPAYMENT OF LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.5. PREPAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.6. CONTINUATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20
SECTION 2.7. CONVERSION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 2.8. NOTE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .21
SECTION 2.9. VOLUNTARY REDUCTIONS OF THE COMMITMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
ARTICLE 3 PAYMENTS, FEES AND OTHER GENERAL PROVISIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 3.1. PAYMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 3.2. PRO RATA TREATMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .22
SECTION 3.3. SHARING OF PAYMENTS, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .23
SECTION 3.4. SEVERAL OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.5. MINIMUM AMOUNTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.6. FEES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.7. COMPUTATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .24
SECTION 3.8. USURY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 3.9. AGREEMENT REGARDING INTEREST AND CHARGES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 3.10. STATEMENTS OF ACCOUNT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 3.11. DEFAULTING LENDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .25
SECTION 3.12. TAXES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .27
ARTICLE 4 YIELD PROTECTION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 4.1. ADDITIONAL COSTS; CAPITAL ADEQUACY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .28
SECTION 4.2. SUSPENSION OF LIBOR LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 4.3. ILLEGALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .29
SECTION 4.4. COMPENSATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 4.5. TREATMENT OF AFFECTED LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .30
SECTION 4.6. CHANGE OF LENDING OFFICE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 4.7. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
ARTICLE 5 CONDITIONS PRECEDENT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 5.1. INITIAL CONDITIONS PRECEDENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .31
SECTION 5.2. CONDITIONS PRECEDENT TO ALL LOANS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .33
ARTICLE 6 REPRESENTATIONS AND WARRANTIES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 6.1. REPRESENTATIONS AND WARRANTIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .34
SECTION 6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
ARTICLE 7 AFFIRMATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.1. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.2. COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . .40
SECTION 7.3. MAINTENANCE OF PROPERTY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 7.4. CONDUCT OF BUSINESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
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SECTION 7.5. INSURANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 7.6. PAYMENT OF TAXES AND CLAIMS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 7.7. VISITS AND INSPECTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .41
SECTION 7.8. USE OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 7.9. ENVIRONMENTAL MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 7.10. BOOKS AND RECORDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 7.11. STATUS OF RIC AND BDC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .42
SECTION 7.12. ERISA EXEMPTIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 7.13. FURTHER ASSURANCES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 7.14. BORROWING SUBSIDIARIES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 7.15. YEAR 2000 COMPLIANCE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
ARTICLE 8 INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 8.1. QUARTERLY FINANCIAL STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .43
SECTION 8.2. YEAR-END STATEMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 8.3. COMPLIANCE CERTIFICATE; BORROWING BASE CERTIFICATE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .44
SECTION 8.4. OTHER INFORMATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .45
ARTICLE 9 NEGATIVE COVENANTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 9.1. FINANCIAL COVENANTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .47
SECTION 9.2. INDEBTEDNESS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .48
SECTION 9.3. CONTINGENT OBLIGATIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.4. INVESTMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .49
SECTION 9.5. LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.6. DISTRIBUTIONS TO SHAREHOLDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .50
SECTION 9.7. MERGER, CONSOLIDATION AND SALES OF ASSETS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.8. FISCAL YEAR. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.9. MODIFICATIONS TO MATERIAL CONTRACTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .51
SECTION 9.10. TRANSACTIONS WITH AFFILIATES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
ARTICLE 10 DEFAULT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.1. EVENTS OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .52
SECTION 10.2. REMEDIES UPON EVENT OF DEFAULT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .55
SECTION 10.3. REMEDIES UPON CERTAIN DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 10.4. ALLOCATION OF PROCEEDS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 10.5. PERFORMANCE BY AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .56
SECTION 10.6. RIGHTS CUMULATIVE. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
ARTICLE 11 THE AGENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 11.1. AUTHORIZATION AND ACTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .57
SECTION 11.2. AGENT'S RELIANCE, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 11.3. DEFAULTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 11.4. AGENT AS LENDER. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .58
SECTION 11.5. APPROVALS OF LENDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 11.6. LENDER CREDIT DECISION, ETC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .59
SECTION 11.7. INDEMNIFICATION OF AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .60
SECTION 11.8. SUCCESSOR AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
SECTION 11.9. SYNDICATION AGENT AND CO-AGENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .61
ARTICLE 12 MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 12.1. NOTICES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .62
SECTION 12.2. EXPENSES. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .63
SECTION 12.3. SETOFF. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .64
SECTION 12.4. JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY TRIAL . . . . . . . . . . . . . . . . . . . . . . .64
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SECTION 12.5. SUCCESSORS AND ASSIGNS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .65
SECTION 12.6. REMOVAL OF LENDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
SECTION 12.7. AMENDMENTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .68
SECTION 12.8. NONLIABILITY OF AGENT AND LENDERS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
SECTION 12.9. CONFIDENTIALITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .69
SECTION 12.10. INDEMNIFICATION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .70
SECTION 12.11. TERMINATION; SURVIVAL. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .71
SECTION 12.12. SEVERABILITY OF PROVISIONS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 12.13. GOVERNING LAW. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 12.14. COUNTERPARTS. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 12.15. LIMITATION OF LIABILITY. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 12.16. ENTIRE AGREEMENT. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .72
SECTION 12.17. CONSTRUCTION. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .73
SCHEDULE 6.1(b) Ownership Structure
SCHEDULE 6.1(g) Indebtedness and Liens
SCHEDULE 6.1(h) Material Contracts
SCHEDULE 9.3 Contingent Obligations
EXHIBIT A Form of Assignment and Acceptance Agreement
EXHIBIT B Form of Guaranty
EXHIBIT C Form of Notice of Borrowing
EXHIBIT D Form of Notice of Continuation
EXHIBIT E Form of Notice of Conversion
EXHIBIT F Form of Note
EXHIBIT G Form of Opinion of Counsel
EXHIBIT H Form of Compliance Certificate
EXHIBIT I-1 Form of Borrowing Base Certificate of Company
EXHIBIT I-2 Form of Borrowing Base Certificate of SBLC
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THIS AMENDED AND RESTATED CREDIT AGREEMENT dated as of April 20, 1998,
by and among ALLIED CAPITAL CORPORATION, a corporation organized under the laws
of the State of Maryland (the "Company"), ALLIED CAPITAL REIT, INC., a Maryland
corporation ("REIT"), ALLIED CAPITAL SBLC CORPORATION, a Maryland corporation
("SBLC," and together with the Company and REIT, collectively, the "Borrowers"
and individually, a "Borrower"), each of the financial institutions initially a
signatory hereto together with their assignees pursuant to Section 12.5(d) (the
"Lenders"), BANKBOSTON, N.A., a national banking association, as Disbursing
Agent (the "Disbursing Agent"), FIRST UNION NATIONAL BANK, a national banking
association, as Syndication Agent (the "Syndication Agent"), NATIONSBANK OF
TEXAS, N.A., a national banking association, as Co-Agent (the "Co-Agent") and
▇▇▇▇▇ BANK N.A., a national banking association, as Managing Agent (the
"Managing Agent").
RECITALS
Pursuant to the Credit Agreement dated as of January 8, 1998, among
the Company, SBLC, the Lenders parties thereto (the "Existing Lenders"), the
Disbursing Agent, the Syndication Agent and the Managing Agent (the "Existing
Credit Agreement"), the Existing Lenders agreed to make available to the
Company a $150,000,000 revolving credit facility (which includes a $30,000,000
sub-facility for SBLC). The parties hereto wish to amend and restate the
Existing Credit Agreement to, among other things, add REIT as a Borrower, add
an additional Lender and increase the amount of credit available.
The Lenders desire to make available to the Company and REIT a
$200,000,000 revolving credit facility (which includes a $40,000,000
sub-facility for SBLC) on the terms and conditions contained herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the parties hereto, the parties
hereto agree that, effective as of the date hereof, the Existing Credit
Agreement shall be and hereby is amended to read in its entirety as follows:
ARTICLE 1
DEFINITIONS
SECTION 1.1. DEFINITIONS.
In addition to terms defined elsewhere herein, the following terms
shall have the following meanings for the purposes of this Agreement:
"ADDITIONAL COSTS" has the meaning given that term in Section 4.1.
"ADJUSTED EBIT" means, for any period with respect to the Company and
its Subsidiaries on a consolidated basis, income after deduction of all
expenses and other proper charges other than taxes and Interest Expense,
including realized gains and losses, but excluding gain income related to asset
securitization transactions, unrealized gains and losses on
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Investments and the amortization of market discount income related to
Investments acquired at less than face value, all as determined in accordance
with GAAP.
"ADJUSTED EURODOLLAR RATE" means, with respect to each Interest Period
for any LIBOR Loan, the rate obtained by dividing (a) LIBOR for such Interest
Period by (b) a percentage equal to one minus the stated maximum rate (stated
as a decimal) of all reserves, if any, required to be maintained against
"Eurocurrency liabilities" as specified in Regulation D of the Board of
Governors of the Federal Reserve System (or against any other category of
liabilities which includes deposits by reference to which the interest rate on
LIBOR Loans is determined or any category of extensions of credit or other
assets which includes loans by an office of any Lender outside of the United
States of America to residents of the United States of America).
"AFFILIATE" means any Person (other than an Agent or any Lender): (a)
directly or indirectly controlling, controlled by, or under common control
with, the Company; (b) directly or indirectly owning or holding five percent
(5.0%) or more of any equity interest in the Company; or (c) five percent
(5.0%) or more of whose voting stock or other equity interest is directly or
indirectly owned or held by the Company. For purposes of this definition,
"control" (including with correlative meanings, the terms "controlling,"
"controlled by" and "under common control with") means the possession directly
or indirectly of the power to direct or cause the direction of the management
and policies of a Person, whether through the ownership of voting securities or
by contract or otherwise, other than by investment advisory contracts entered
into in the ordinary course of business of the Company or a Subsidiary of the
Company.
"AGENTS" means the Disbursing Agent, the Syndication Agent, the
Co-Agent and the Managing Agent, individually and collectively.
"AGREEMENT DATE" means the date as of which this Agreement is dated.
"APPLICABLE LAW" means all applicable provisions of constitutions,
statutes, rules, regulations and orders of all governmental bodies and all
orders and decrees of all courts, tribunals and arbitrators.
"ASSIGNEE" has the meaning given that term in Section l2.5(d).
"ASSIGNMENT AND ACCEPTANCE AGREEMENT" means an Assignment and
Acceptance Agreement among a Lender, an Assignee and each Agent, substantially
in the form of Exhibit A or such other form as may be agreed to by such Lender,
such Assignee and each Agent.
"BANKBOSTON RATE" means the rate of interest per annum announced
publicly by the Disbursing Agent as its base rate from time to time. The
BankBoston Rate is not necessarily the best or the lowest rate of interest
offered by the Disbursing Agent or any Lender.
"BASE RATE" means the per annum rate of interest equal to the greater
of (a) the BankBoston Rate or (b) the Federal Funds Rate plus one-half of one
percent (0.5%). Any change in the Base Rate resulting from a change in the
BankBoston Rate or the Federal Funds Rate shall become effective as of 12:01
a.m. on the Business Day on which each such change occurs. The
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Base Rate is a reference rate used by the Disbursing Agent in determining
interest rates on certain loans and is not intended to be the lowest rate of
interest charged by the Disbursing Agent or any Lender on any extension of
credit to any debtor.
"BASE RATE LOAN" means a Loan bearing interest at a rate based on the
Base Rate.
"BENEFIT ARRANGEMENT" means at any time an employee benefit plan
within the meaning of Section 3(3) of ERISA which is not a Plan or a
Multiemployer Plan and which is maintained or otherwise contributed to by any
member of the ERISA Group.
"BORROWER" has the meaning set forth in the introductory paragraph
hereof and shall include each Borrower's successors and assigns.
"BORROWING BASE" means, at any time, with respect to the Company or
SBLC and without duplication, (a) 100% of cash and Cash Equivalents owned by
such Borrower, free and clear of all Liens, plus (b) in the case of the
Borrowing Base of SBLC, 75% of Guaranteed 7(a) Loans owned by SBLC that are
Eligible Assets, plus (c) 50% of any other Eligible Assets owned by such
Borrower (or in the case of the Borrowing Base of the Company, the Subordinated
CMBS Tranches may be owned by the QRS and the Sale Leaseback Assets may be
owned by a Real Estate Sub), provided that: (1) not more than 50% of the
Borrowing Base of the Company shall be derived from Commercial Mortgage Loans
(excluding those made pursuant to Section 504 of the SBA Act) owned by the
Company; (2) not more than 50% of the Borrowing Base of the Company shall be
derived from Mezzanine Loans owned by the Company; (3) not more than 20% of the
Borrowing Base of the Company shall be derived from Subordinated CMBS Tranches
owned by the QRS; (4) not more than 15% of the Borrowing Base of the Company
shall be derived from Equity Investments owned by the Company, (5) not more
than 25% of the Borrowing Base of the Company shall be derived from Loans made
pursuant to Sections 7(a) and 504 of the SBA Act, and (6) not more than 25% of
the Borrowing Base of the Company shall be derived from Sale Leaseback Assets
and no Sale Leaseback Asset may be included in the Borrowing Base for more than
six months, minus (c) all Unsecured Indebtedness and Contingent Obligations of
such Borrower. For the purpose of determining the Borrowing Base, the value of
Eligible Assets shall be determined in accordance with the market valuation
method pursuant to GAAP, provided that (i) in no event shall a debt security be
valued at more than the outstanding principal balance thereof, and (ii) the
market valuation method used by the Company and the corresponding values of
Eligible Assets must be acceptable to the Managing Agent in its reasonable
discretion. For purposes of this definition, Eligible Assets owned by REIT
shall be deemed to be owned by the Company, and therefore included in the
Borrowing Base to the same extent as Eligible Assets that are in fact owned by
the Company.
"BORROWING BASE ASSETS" means, at any time, Eligible Assets included
in the Borrowing Base with respect to which Loans are outstanding.
"BORROWING BASE CERTIFICATE" has the meaning given such term in
Section 8.3.
"BUSINESS DAY" means (a) any day other than a Saturday, Sunday or
other day on which banks in New York City, New York, are authorized or required
to close and (b) with reference to
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a LIBOR Loan, any such day that is also a day on which dealings in Dollar
deposits are carried out in the London interbank market.
"CAPITALIZED LEASE OBLIGATION" means Indebtedness represented by
obligations under a lease that is required to be capitalized for financial
reporting purposes in accordance with GAAP, and the amount of such Indebtedness
shall be the capitalized amount of such obligations determined in accordance
with such principles.
"CASH EQUIVALENTS" means: (a) securities issued, guaranteed or
insured by the United States of America or any of its agencies with maturities
of not more than one year from the date acquired; (b) certificates of deposit
with maturities of not more than one year from the date acquired issued by a
United States federal or state chartered commercial bank of recognized
standing, which has capital and unimpaired surplus in excess of $500,000,000.00
and which bank or its holding company has a short-term commercial paper rating
of at least A-1 or the equivalent by Standard & Poor's Rating Group, a division
of ▇▇▇▇▇▇-▇▇▇▇, Inc. ("S&P") or at least P-1 or the equivalent by ▇▇▇▇▇'▇
Investors Services, Inc. ("Moody's"); (c) reverse repurchase agreements with
terms of not more than seven days from the date acquired, for securities of the
type described in clause (a) above and entered into only with commercial banks
having the qualifications described in clause (b) above; (d) commercial paper
issued by any Person incorporated under the laws of the United States of
America or any State thereof and rated at least A-1 or the equivalent thereof
by S&P or at least P-1 or the equivalent thereof by Moody's, in each case with
maturities of not more than one year from the date acquired; and (e)
investments in money market funds registered under the Investment Company Act
of 1940, which have net assets of at least $500,000,000.00 and at least 85% of
whose assets consist of securities and other obligations of the type described
in clauses (a) through (d) above.
"CMBS" means any security that entitles the holder thereof to receive
all or a specified portion of, or to receive payments based upon payments
received on, the proceeds of Commercial Mortgage Loans, either fixed or
revolving.
"COMMERCIAL MORTGAGE LOAN" means a loan secured by a Lien on improved
real estate used for commercial purposes and occupied by the applicable
Obligor.
"COMMITMENT" means, as to each Lender, such Lender's obligation to
make Loans pursuant to Section 2.1 in an amount up to, but not exceeding, the
amount set forth for such Lender on its signature page hereto as such Lender's
"Initial Commitment Amount" or as set forth in the applicable Assignment and
Acceptance Agreement, as the same may be reduced from time to time pursuant to
Section 2.9 or as appropriate to reflect any assignments to or by such Lender
effected in accordance with Section 12.5.
"COMMITMENT PERCENTAGE" means, as to each Lender, the ratio, expressed
as a percentage, of (a) the amount of such Lender's Commitment to (b) the sum
of the aggregate amount of the Commitments of all Lenders hereunder; provided,
however, that if at the time of determination the Commitments have terminated
or been reduced to zero, the "Commitment Percentage" of each Lender shall be
the Commitment Percentage of such Lender in effect immediately prior to such
termination or reduction.
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"COMPLIANCE CERTIFICATE" has the meaning given such term in Section
8.3.
"CONTINGENT OBLIGATION" as applied to any Person, means any direct or
indirect liability, contingent or otherwise, of that Person: (a) with respect
to any indebtedness, lease, dividend or other obligation of another Person if
the primary purpose or intent of the Person incurring such liability, or the
primary effect thereof, is to provide assurance to the obligee of such
liability that such liability will be paid or discharged, or that any
agreements relating thereto will be complied with, or that the holders of such
liability will be protected (in whole or in part) against loss with respect
thereto; (b) with respect to any letter of credit issued for the account of
that Person or as to which that Person is otherwise liable for reimbursement of
drawings; (c) under Interest Rate Agreements; or (d) under any foreign exchange
contract, currency swap agreement or other similar agreement or arrangement
designed to protect that Person against fluctuations in currency values.
Contingent Obligations shall include (i) the direct or indirect guaranty,
endorsement (other than for collection or deposit in the ordinary course of
business), comaking, discounting with recourse or sale with recourse by such
Person of the obligation of another, (ii) the obligation to make take or pay or
similar payments if required regardless of nonperformance by any other party or
parties to an agreement, and (iii) any liability of such Person for the
obligations of another through any agreement to purchase, repurchase or
otherwise acquire such obligation or any property constituting security
therefor, to provide funds for the payment or discharge of such obligation or
to maintain the solvency, financial condition or any balance sheet item or
level of income of another. The amount of any Contingent Obligation shall be
equal to the amount of the obligation so guaranteed or otherwise supported or,
if not a fixed and determined amount, the maximum amount so guaranteed. The
amount of any Contingent Obligation outstanding under clauses (c) or (d) shall
be the net amount determined in good faith by the Managing Agent using any
convention or method used by the Managing Agent in quantifying its own exposure
under such agreements or arrangements.
"CONTINUE," "CONTINUATION" AND "CONTINUED" each refers to the
continuation of a LIBOR Loan from one Interest Period to another Interest
Period pursuant to Section 2.6.
"CONVERT," "CONVERSION" AND "CONVERTED" each refers to the conversion
of a Loan of one Type into a Loan of another Type pursuant to Section 2.7.
"CREDIT EVENT" MEANS any of the following: (a) the making (or deemed
making) of any Loan and (b) the Conversion of a Loan.
"CREDIT RATING" means, at any time as to any Person, the lowest rating
assigned by a Rating Agency to each series of rated senior unsecured long term
indebtedness of such Person.
"DEFAULT" means any of the events specified in Section 10.1, whether
or not there has been satisfied any requirement for the giving of notice, the
lapse of time or both.
"DEFAULTING LENDER" has the meaning set forth in Section 3.l1.
"DISBURSING AGENT" means BankBoston, N.A., in its capacity as
contractual representative of the Lenders under the terms of this Agreement,
and any of its successors.
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"DOLLARS" or "$" means the lawful currency of the United States of
America.
"EFFECTIVE DATE" means the later of: (a) the Agreement Date; and (b)
the date on which all of the conditions precedent set forth in Section 5.1.
shall have been fulfilled.
"ELIGIBLE ASSETS" means any of the following Investments that satisfy
all of the Eligibility Requirements: (a) cash and Cash Equivalents, (b)
Commercial Mortgage Loans; (c) Subordinated CMBS Tranches; (d) Mezzanine Loans;
(e) Commercial Mortgage Loans made pursuant to Section 504 of the SBA Act; (f)
loans made pursuant to Section 7(a) of the SBA Act, (g) Equity Investments, and
(h) Sale Leaseback Assets.
"ELIGIBLE ASSIGNEE" means any Person who is: (i) currently a Lender;
(ii) a commercial bank, trust company, insurance company, investment bank or
pension fund organized under the laws of the United States of America, or any
state thereof, and having total assets in excess of $5,000,000,000; (iii) a
savings and loan association or savings bank organized under the laws of the
United States of America, or any state thereof, and having a tangible net worth
of at least $500,000,000; or (iv) a commercial bank organized under the laws of
any other country which is a member of the Organization for Economic
Cooperation and Development ("OECD"), or a political subdivision of any such
country, and having total assets in excess of $10,000,000,000, provided that
such bank is acting through a branch or agency located in the United States of
America. If such Person is not currently a Lender, such Person's senior
unsecured long term indebtedness must be rated BBB or higher by S&P, Baa2 or
higher by ▇▇▇▇▇'▇, or the equivalent or higher of either such rating by another
Rating Agency acceptable to the Managing Agent. Notwithstanding the foregoing,
if an Event of Default shall have occurred and be continuing under Section
10.1.(a) or (b), the "Eligible Assignee" shall mean any Person that is not an
individual.
"ELIGIBILITY REQUIREMENTS" means, for any Eligible Asset, that at all
times the following statements are accurate and complete:
(a) No Obligor on the Eligible Asset is an Affiliate of a Borrower;
(b) The Eligible Asset is owned by a Borrower or, in the case of
Subordinated CMBS Tranches, by the QRS, or, in the case of Sale Leaseback
Assets, by a Real Estate Sub;
(c) The Eligible Asset is a legal, valid and binding obligation of
each Obligor thereon, enforceable in accordance with its terms;
(d) No payment on the Eligible Asset is more than 45 days past due,
nor has such Eligible Asset been restructured during the most recently ended
12-month period in connection with the inability of the Obligor to perform its
obligations as they existed prior to such restructuring;
(e) The Eligible Asset is free and clear of all Liens, other than
Liens described in clause (a) of the definition of Permitted Liens;
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(f) The Eligible Asset complies with all Applicable Laws;
(g) Each Obligor on the Eligible Asset is a United States citizen or
corporation, partnership, limited liability company or other entity organized
and existing under the laws of one of the states of the United States.;
(h) The Eligible Asset is not owned by SBIC or SSBIC;
(i) The Eligible Asset is not secured by real or personal property
located outside of the United States; and
(j) The Eligible Asset does not arise out of a real estate equity
participation.
"ENVIRONMENTAL LAWS" means any Applicable Law relating to
environmental protection or the manufacture, storage, disposal or clean-up of
Hazardous Materials including, without limitation, the following: Clean Air
Act, 42 U.S.C. 7401 et seq.; Federal Water Pollution Control Act, 33 U.S.C.
1251 et seq.; Solid Waste Disposal Act, 42 U.S.C. 6901 et seq.; Comprehensive
Environmental Response, Compensation and Liability Act, 42 U.S.C. 9601 et seq.;
National Environmental Policy Act, 42 U.S.C. 4321 et seq.; regulations of the
Environmental Protection Agency and any applicable rule of common law and any
judicial interpretation thereof relating primarily to the environment or
Hazardous Materials.
"EQUITY INVESTMENT" means an Investment by the Company in an Equity
Issuance of a Person that is an operating business that sells goods or
services.
"EQUITY ISSUANCE" means any issuance or sale by a Person of its
capital stock or other similar equity security, or any warrants, options or
similar rights to acquire, or securities convertible into or exchangeable for,
such capital stock or other similar equity security.
"ERISA" means the Employee Retirement Income Security Act of 1974, as
in effect from time to time.
"ERISA GROUP" means the Company, any Subsidiary and all members of a
controlled group of corporations and all trades or businesses (whether or not
incorporated) under common control which, together with the Company or any
Subsidiary, are treated as a single employer under Section 414 of the Internal
Revenue Code.
"EVENT OF DEFAULT" means any of the events specified in Section 10.1,
provided that any requirement for notice or lapse of time or any other
condition has been satisfied.
"FEDERAL FUNDS RATE" means, for any day, the rate per annum (rounded
upward to the nearest l/l00th of 1%) equal to the weighted average of the rates
on overnight Federal funds transactions with members of the Federal Reserve
System arranged by Federal funds brokers on such day, as published by the
Federal Reserve Bank of New York on the Business Day next succeeding such day,
provided that (a) if such day is not a Business Day, the Federal Funds Rate for
such day shall be such rate on such transactions for the next preceding
Business Day, and (b)
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if no such rate is so published on such next succeeding Business Day, the
Federal Funds Rate for such day shall be the average rate quoted to the
Disbursing Agent by federal funds dealers selected by the Disbursing Agent on
such day on such transaction as determined by the Disbursing Agent.
"FEES" means the fees and commissions provided for or referred to in
Section 3.6 and any other fees payable by the Company hereunder or under any
other Loan Document.
"FOREIGN LENDER" means any Lender organized under the laws of a
jurisdiction other than the United States of America.
"GAAP" means accounting principles as promulgated from time to time in
statements, opinions and pronouncements by the American Institute of Certified
Public Accountants and the Financial Accounting Standards Board and in such
statements, opinions and pronouncements of such other entities with respect to
financial accounting of for-profit entities as shall be accepted by a
substantial segment of the accounting profession in the United States.
"GOVERNMENTAL APPROVALS" means all authorizations, consents,
approvals, licenses and exemptions of, registrations and filings with, and
reports to, all Governmental Authorities.
"GOVERNMENTAL AUTHORITY" means any national, state or local government
(whether domestic or foreign), any political subdivision thereof or any other
governmental, quasi-governmental, judicial, public or statutory
instrumentality, authority, body, agency, bureau or entity (including, without
limitation, the Federal Deposit Insurance Corporation, the Comptroller of the
Currency or the Federal Reserve Board, any central bank or any comparable
authority) or any arbitrator with authority to bind a party at law.
"GUARANTEED 7(A) LOAN" means a loan made by SBLC pursuant to Section
7(a) of the SBA Act and the payment of which is guaranteed by the SBA to the
maximum amount permitted by Section 7(a) of the SBA Act, provided that such
loan shall lose its status as a Guaranteed 7(a) Loan when all or any portion of
the amount thereof guaranteed by the SBA is sold by SBLC.
"GUARANTOR" means any Subsidiary that is required to execute and
deliver a Guaranty.
"GUARANTY" means a Guaranty executed by any Subsidiary and
substantially in the form of Exhibit B.
"HAZARDOUS MATERIALS" means all or any of the following: (a)
substances that are defined or listed in, or otherwise classified pursuant to,
any applicable Environmental Laws as "hazardous substances," "hazardous
materials," "hazardous wastes," "toxic substances" or any other formulation
intended to define, list or classify substances by reason of deleterious
properties such as ignitability, corrosivity, reactivity, carcinogenicity,
reproductive toxicity, "TLCP" toxicity, or "EP toxicity"; (b) oil, petroleum or
petroleum derived substances, natural gas, natural gas liquids or synthetic gas
and drilling fluids, produced waters and other wastes associated with the
exploration, development or production of crude oil, natural gas or geothermal
resources; (c) any flammable substances or explosives or any radioactive
materials;
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13
(d) asbestos in any form; or (e) electrical equipment which contains any oil or
dielectric fluid containing levels of polychlorinated biphenyls in excess of
fifty parts per million.
"INDEBTEDNESS" means, with respect to a Person, at the time of
computation thereof, all of the following (without duplication): (a)
obligations of such Person in respect of money borrowed; (b) obligations of
such Person (other than trade debt incurred in the ordinary course of
business), whether or not for money borrowed (i) represented by notes payable,
or drafts accepted, in each case representing extensions of credit, (ii)
evidenced by bonds, debentures, notes or similar instruments, (iii) consisting
of repurchase agreements, whether on a recourse or a non-recourse basis, or
(iv) constituting purchase money indebtedness, conditional sales contracts,
title retention debt instruments or other similar instruments, upon which
interest charges are customarily paid or that are issued or assumed as full or
partial payment for property, (c) Capitalized Lease Obligations of such Person;
(d) all reimbursement obligations of such Person under any letters of credit or
acceptances (whether or not the same have been presented for payment), and all
obligations of such Person as the issuer of any letters of credit or
acceptances (whether or not the same have been presented for payment); and (e)
all Indebtedness of other Persons which (i) such Person has guaranteed or which
is otherwise recourse to such Person or (ii) are secured by a Lien on any
property of such Person.
"INTELLECTUAL PROPERTY" has the meaning given that term in Section
6.1(r).
"INTEREST EXPENSE" means, with respect to a Person and for any period,
the total consolidated interest expense (including, without limitation,
capitalized interest expense and interest expense attributable to Capitalized
Lease Obligations) of such Person and in any event shall include all interest
expense with respect to any Indebtedness in respect of which such Person is
wholly or partially liable.
"INTEREST PERIOD" means, with respect to any LIBOR Loan, each period
commencing on the date such LIBOR Loan is made or the last day of the next
preceding Interest Period for such Loan and ending on the numerically
corresponding day in the first, second, or third calendar month thereafter, as
the Company may select in a Notice of Borrowing, Notice of Continuation or
Notice of Conversion, as the case may be, except that each Interest Period for
a LIBOR Loan that commences on the last Business Day of a calendar month (or on
any day for which there is no numerically corresponding day in the appropriate
subsequent calendar month) shall end on the last Business Day of the
appropriate subsequent calendar month. Notwithstanding the foregoing: (i) if
any Interest Period would otherwise end after the Termination Date, such
Interest Period shall end on the Termination Date, (ii) each Interest Period
that would otherwise end on a day which is not a Business Day shall end on the
next succeeding Business Day (or, if such next succeeding Business Day falls in
the next succeeding calendar month, on the next preceding Business Day); and
(iii) notwithstanding the immediately preceding clause (i), no Interest Period
for any LIBOR Loan shall have a duration of less than one month and, if the
Interest Period for any LIBOR Loan would otherwise be a shorter period, such
Loan shall not be available hereunder for such period.
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"INTEREST RATE AGREEMENT" means any interest rate swap agreement,
interest rate cap agreement, interest rate collar agreement or other similar
contractual agreement or arrangement entered into with a nationally recognized
financial institution then having an Investment Grade Rating for the purpose of
protecting against fluctuations in interest rates.
"INTERNAL REVENUE CODE" means the Internal Revenue Code of 1986, as
amended.
"INVESTMENT" means, with respect to any Person and whether or not such
investment constitutes a controlling interest in such Person (a) the purchase
or other acquisition of any share of capital stock, evidence of Indebtedness or
other security issued by any other Person; (b) any loan, advance or extension
of credit to, or contribution (in the form of money or goods) to the capital
of, or the acquisition of a Sale Leaseback Asset from and the lease thereof to,
any other Person; (c) any guaranty of the Indebtedness of any other Person; (d)
any other investment in any other Person; and (e) any commitment or option to
make an Investment in any other Person.
"INVESTMENT COMPANY ACT" means the Investment Company Act of 1940, as
amended.
"INVESTMENT GRADE RATING" means a Credit Rating of BBB- or higher by
S&P, Baa3 or higher by ▇▇▇▇▇'▇, or the equivalent or higher of either such
rating by another Rating Agency.
"LENDER" means each financial institution from time to time party
hereto as a "Lender," together with its respective successors and assigns.
"LENDING OFFICE" means, for each Lender and for each Type of Loan, the
office of such Lender specified as such on its signature page hereto or in the
applicable Assignment and Acceptance Agreement, or such other office of such
Lender as such Lender may notify the Disbursing Agent in writing from time to
time.
"LIBOR" means, for any LIBOR Loan for any Interest Period therefor,
the rate per annum (rounded upwards, if necessary, to the nearest 1/100 of 1%)
appearing on Telerate Page 3750 (or any successor page) as the London interbank
offered rate for deposits in Dollars at approximately 11 :00 a.m. (London time)
two Business Days prior to the first day of such Interest Period. If for any
reason such rate is not available, the term "LIBOR" shall mean, for any LIBOR
Loan for any Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Reuters Screen LIBO Page as
the London interbank offered rate for deposits in Dollars at approximately
11:00 a.m. (London time) two Business Days prior to the first day of such
Interest Period for a term comparable to such Interest Period, provided,
however, if more than one rate is specified on Reuters Screen LIBO Page, the
applicable rate shall be the arithmetic mean of all such rates.
"LIBOR LOAN" means a Loan bearing interest at a rate based on LIBOR.
"LIEN" as applied to the property of any Person means: (a) any
security interest, encumbrance, mortgage, deed to secure debt, deed of trust,
pledge, lien, charge, ground lease or lease constituting a Capitalized Lease
Obligation, conditional sale or other title retention agreement, or other
security title or encumbrance of any kind in respect of any property of such
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15
Person, or upon the income or profits therefrom; (b) any arrangement, express
or implied, under which any property of such Person is transferred, sequestered
or otherwise identified for the purpose of subjecting the same to the payment
of Indebtedness or performance of any other obligation in priority to the
payment of the general, unsecured creditors of such Person; (c) the filing of
any financing statement under the Uniform Commercial Code or its equivalent in
any jurisdiction; and (d) any agreement by such Person to grant, give, or
otherwise convey any of the foregoing.
"LOAN" means a loan made by Lender to the Borrowers pursuant to
Section 2.1.
"LOAN DOCUMENT" means this Agreement, each Note, each Guaranty and
each other document or instrument now or hereafter executed and delivered by a
Borrower or any Subsidiary in connection with, pursuant to or relating to this
Agreement.
"MANAGING AGENT" means ▇▇▇▇▇ Bank N.A., in its capacity as contractual
representative of the Lenders under the terms of this Agreement, and any of its
successors.
"MASS MUTUAL" means Massachusetts Mutual Life Insurance Company.
"MASS MUTUAL AGREEMENT" means the Note Agreement, dated as of April
30, 1992, as amended on September 1, 1992, November 19, 1992, October 29, 1993,
and February 15, 1998, among Mass Mutual, Allied Capital Corporation, Allied
Investment Corporation and Allied Financial Services Corporation, which has
been assumed by the Company in connection with the merger described in the
Proxy.
"MATERIAL ADVERSE EFFECT" means a materially adverse effect on (a) the
business, assets, liabilities, financial condition, results of operations or
business prospects of the Company and its Subsidiaries taken as a whole, (b)
the ability of the Company to perform its obligations under any Loan Document
to which it is a party which does not result from a material adverse effect on
the items described in the immediate preceding clause (a), (c) the validity or
enforceability of any of the Loan Documents, (d) the rights and remedies of the
Lenders and the Agents under any of such Loan Documents or (e) the timely
payment of the principal of or interest on the Loans or other amounts payable
in connection therewith. Except with respect to representations made or deemed
made by the Company or any Subsidiary in any of the other Loan Documents to
which it is a party, all determinations of materiality shall be made by the
Requisite Lenders in their reasonable judgment unless expressly provided
otherwise.
"MATERIAL CONTRACT" means any contract or other arrangement (other
than Loan Documents), whether written or oral, to which the Company or any
Subsidiary is a party as to which the breach, nonperformance, cancellation or
failure to renew by any party thereto could have a Material Adverse Effect.
"MATERIAL PLAN" means at any time a Plan or Plans having aggregate
Unfunded Liabilities in excess of $5,000,000.
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"MATERIAL SUBSIDIARY" means, as of the date of any determination
thereof, any Subsidiary which has total assets having a value (determined in
accordance with the market valuation method pursuant to GAAP) greater than or
equal to $20,000,000.
"▇▇▇▇▇▇▇ ▇▇▇▇▇" means ▇▇▇▇▇▇▇ ▇▇▇▇▇ Mortgage Capital, Inc.
"▇▇▇▇▇▇▇ ▇▇▇▇▇ AGREEMENT" means, individually and collectively, (a)
the Amended and Restated Master Repurchase Agreement, dated as of March 22,
1996, as amended on November 11, 1996, July 30, 1997, and March 18, 1998, among
▇▇▇▇▇▇▇ ▇▇▇▇▇, Allied Capital Commercial Corporation and Business Mortgage
Investors, Inc., and (b) the Master Repurchase Agreement, dated as of March 22,
1996, as amended on November 11, 1996, and March 18, 1998, between ▇▇▇▇▇▇▇
▇▇▇▇▇ and Allied Capital Commercial Corporation, each of which has been assumed
by the Company in connection with the merger described in the Proxy.
"MEZZANINE LOANS" means loans that are not loans made pursuant to the
SBA Act and that are made to businesses for acquisitions, growth, working
capital and other business purposes, which may be combined with rights to
acquire equity interests in such businesses.
"▇▇▇▇▇'▇" means ▇▇▇▇▇'▇ Investors Services, Inc.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇" means ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Capital, Inc.
"▇▇▇▇▇▇ ▇▇▇▇▇▇▇ AGREEMENT" means the Master Loan and Security
Agreement, dated as of August 21, 1997, as amended on March 18, 1998, among
▇▇▇▇▇▇ ▇▇▇▇▇▇▇, Allied Capital Commercial Corporation and Business Mortgage
Investors, Inc., which has been assumed by the Company in connection with the
merger described in the Proxy.
"MULTIEMPLOYER PLAN" means at any time an employee pension benefit
plan within the meaning of Section 4001(a)(3) of ERISA to which any member of
the ERISA Group is then making or accruing an obligation to make contributions
or has within the preceding five plan years made contributions, including for
these purposes any Person which ceased to be a member of the ERISA Group during
such five year period.
"NET PROCEEDS" means, with respect to an Equity Issuance by a Person,
the aggregate amount of all cash received by such Person in respect of such
Equity Issuance net of investment banking fees, legal fees, accountants fees,
underwriting discounts and commissions and other customary fees and expenses
actually incurred by such Person in connection with such Equity Issuance.
"NOTE" has the meaning given such term in Section 2.8.
"NOTICE OF BORROWING" means a notice in the form of Exhibit C to be
delivered to the Disbursing Agent pursuant to Section 2.1(b) evidencing a
Borrower's request for a borrowing of Loans.
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"NOTICE OF CONTINUATION" means a notice in the form of Exhibit D to be
delivered to the Disbursing Agent pursuant to Section 2.6 evidencing a
Borrower's request for the Continuation of a LIBOR Loan.
"NOTICE OF CONVERSION" means a notice in the form of Exhibit E to be
delivered to the Disbursing Agent pursuant to Section 2.7 evidencing a
Borrower's request for the Conversion of a Loan from one Type to another Type.
"OBLIGATIONS" means, individually and collectively: (a) the aggregate
principal balance of and all accrued and unpaid interest on, all Loans and (b)
all other indebtedness, liabilities, obligations, covenants and duties of the
Borrowers owing to the Agents or any Lender of every kind, nature and
description, under or in respect of this Agreement or any of the other Loan
Documents, including, without limitation, all Fees and indemnification
obligations, whether direct or indirect, absolute or contingent, due or not
due, contractual or tortious, liquidated or unliquidated, and whether or not
evidenced by any promissory note.
"OBLIGOR" means each maker, endorser, guarantor and issuer of an
Eligible Asset, or, in the case of a Sale Leaseback Asset, the lessee of the
applicable real estate.
"OPIC" means Overseas Private Investment Corporation.
"OPIC AGREEMENT" means the Loan Agreement, dated as of April 10, 1995,
as amended on February 25, 1998, between OPIC and Allied Capital Corporation.
"OTHER RELEVANT SUBSIDIARY" means any Subsidiary, individually or
together with other Subsidiaries, the occurrence of any of the events described
in Sections 10.1(f) or 10.1(g) with respect to which could reasonably be
expected to have a Material Adverse Effect.
"PARTICIPANT" has the meaning given that term in Section 12.5(c).
"PBGC" means the Pension Benefit Guaranty Corporation and any
successor agency.
"PERMITTED LIENS" means, as to any Person: (a) Liens securing taxes,
assessments and other charges or levies imposed by any Governmental Authority
(excluding any Lien imposed pursuant to any of the provisions of ERISA) or the
claims of materialmen, mechanics, carriers, warehousemen or landlords for
labor, materials, supplies or rentals incurred in the ordinary course of
business, which are not at the time required to be paid or discharged under
Section 7.6; (b) Liens consisting of deposits or pledges made, in the ordinary
course of business, in connection with, or to secure payment of, obligations
under workmen's compensation, unemployment insurance or similar Applicable
Laws; (c) Liens in favor of the Managing Agent for the benefit of the Lenders;
and (d) in the case of a Sale Leaseback Asset, covenants, restrictions, rights
of way, easements and other matters of public record, and other matters to
which like properties are commonly subject, that singly or in the aggregate do
not materially and adversely affect the value or marketability of, or
materially interfere with the use or enjoyment of, such Sale Leaseback Asset.
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"PERSON" means an individual, corporation, partnership, limited
liability company, association, trust or unincorporated organization, or a
government or any agency or political subdivision thereof.
"PLAN" means at any time an employee pension benefit plan (other than
a Multiemployer Plan) which is covered by Title IV of ERISA or subject to the
minimum funding standards under Section 412 of the Internal Revenue Code and
either (i) is maintained, or contributed to, by any member of the ERISA Group
for employees of any member of the ERISA Group or (ii) has at any time within
the preceding five years been maintained, or contributed to, by any Person
which was at such time a member of the ERISA Group for employees of any Person
which was at such time a member of the ERISA Group.
"PORTFOLIO INVESTMENT" means any Investment of a Borrower made or
acquired in the ordinary course of business in an eligible portfolio company
(within the meaning of the Investment Company Act) or in any other Person,
provided that, in each case, such Investment may be classified as a portfolio
Investment in accordance with GAAP and such classification is acceptable to the
Managing Agent in its reasonable discretion.
"POST-DEFAULT RATE" means, in respect of any principal of any Loan or
any other Obligation that is not paid when due (whether at stated maturity, by
acceleration, by optional or mandatory prepayment or otherwise), a rate per
annum equal to two percent (2.0%) plus the Base Rate as in effect from time to
time.
"PRINCIPAL OFFICE" means the office of the Disbursing Agent located
at ▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, or such other office of the
Disbursing Agent as the Disbursing Agent may designate from time to time.
"PRO FORMA DEBT SERVICE" means at any time for the Company and its
Subsidiaries on a consolidated basis the sum of principal payments of
Indebtedness scheduled to be repaid during the next succeeding 12-month period
(excluding principal payments with respect to the Loans) plus estimated
Interest Expense for such 12-month period, as determined by the Managing Agent
in good faith using reasonable assumptions of outstanding Indebtedness and
interest rates applicable thereto.
"PROXY" means the Joint Proxy Statement/Prospectus, dated October 9,
1997, furnished to the stockholders of Allied Capital Corporation, Allied
Capital Corporation II, Allied Capital Commercial Corporation, Allied Capital
Lending Corporation and Allied Capital Advisers, Inc.
"QUARTERLY DATE" MEANS the last Business Day of March, June, September
and December in each year, the first of which shall be June 30, 1998.
"QRS" means a Wholly Owned Subsidiary of REIT that is a qualified real
estate investment trust subsidiary within the meaning of the Internal Revenue
Code.
"RATING AGENCY" means S&P, ▇▇▇▇▇'▇ or any other nationally recognized
securities rating agency selected by the Borrower and acceptable to the
Requisite Lenders.
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"REAL ESTATE SUB" means any Wholly-Owned Subsidiary of the REIT that
holds fee simple title to a Sale Leaseback Asset.
"REGISTER" has the meaning given that term in Section 12.5(e).
"REGULATORY CHANGE" means, with respect to any Lender, any change
effective after the Agreement Date in Applicable Law (including without
limitation, Regulation D of the Board of Governors of the Federal Reserve
System) or the adoption or making after such date of any interpretation,
directive or request applying to a class of banks, including such Lender, of or
under any Applicable Law (whether or not having the force of law and whether or
not failure to comply therewith would be unlawful) by any Governmental
Authority or monetary authority charged with the interpretation or
administration thereof or compliance by any Lender with any request or
directive made or issued after the Agreement Date regarding capital adequacy.
"REQUISITE LENDERS" means, as of any date, (a) when there are three or
fewer Lenders, all Lenders, and (b) when there are more than three Lenders,
Lenders having at least 66 2/3% of the aggregate amount of the Commitments, or
if the Commitments have been terminated or reduced to zero, Lenders holding at
least 66 2/3% of the principal amount of the Loans.
"RIC" means a Person qualifying for treatment as a "regulated
investment company" under the Internal Revenue Code.
"SALE LEASEBACK ASSET" means (a) commercial real estate that has been
acquired in fee simple by a Real Estate Sub in connection with a transaction
providing for a purchase of such Real Estate by the Real Estate Sub from the
owner thereof and the simultaneous lease of the real estate by the Real Estate
Sub to such owner or its designee, and (b) all of such Real Estate Sub's rights
as a lessor of such real estate.
"SBA" means the Small Business Administration.
"SBA ACT" means the Small Business Investment Act of 1958, as amended.
"SBIC" means Allied Investment Corporation, a Maryland corporation.
"SECURED INDEBTEDNESS" means, with respect to any Person, any
Indebtedness of such Person that is secured in any manner by any Lien, and
shall include such Person's pro rata share of the Secured Indebtedness of any
of such Person's Unconsolidated Affiliates.
"SECURITIES ACT" means the Securities Act of 1933, as amended from
time to time, together with all rules and regulations issued thereunder.
"SECURITIZED DEBT" means the Indebtedness of a Securitization Issuer
evidenced by a CMBS issuance of such Securitization Issuer, the proceeds of
which are used to purchase Commercial Mortgage Loans from REIT or a QRS.
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"SECURITIZATION ISSUER" means a trust or other Person formed for the
limited purpose of acquiring Commercial Mortgage Loans from REIT or a QRS with
the proceeds of a CMBS issuance.
"SOLVENT" means, when used with respect to any Person, that (a) the
fair value and the fair salable value of its assets (excluding any Indebtedness
due from any affiliate of such Person) are each in excess of the fair valuation
of its total liabilities (including all contingent liabilities); and (b) such
Person is able to pay its debts or other obligations in the ordinary course as
they mature and (c) that the Person has capital not unreasonably small to carry
on its business and all business in which it proposes to be engaged.
"S&P" means Standard & Poor's Rating Group, a division of ▇▇▇▇▇▇-▇▇▇▇
Companies, Inc.
"SSBIC" means Allied Capital Financial Corporation, a Maryland
corporation.
"SUBORDINATED CMBS TRANCHE" means the series of a CMBS issuance that
is junior to all CMBS in such issuance that carry a rating of a Rating Agency
and is senior to any other CMBS of such issuance.
"SUBORDINATED DEBT" means Indebtedness of the Company or any of its
Subsidiaries that is subordinated in right of payment and otherwise to the
Loans and the other Obligations in a manner satisfactory to the Managing Agent
and the Requisite Lenders in their sole and absolute discretion.
"SUBSIDIARY" means, for any Person, any corporation, partnership,
limited liability company or other entity of which at least a majority of the
securities or other ownership interests having by the terms thereof ordinary
voting power to elect a majority of the board of directors or other persons
performing similar functions of such corporation, partnership or other entity
(without regard to the occurrence of any contingency) is at the time directly
or indirectly owned or controlled by such Person or one or more Subsidiaries of
such Person or by such Person and one or more Subsidiaries of such Person.
"MAJORITY OWNED SUBSIDIARY" means any such corporation, partnership, limited
liability company or other entity of which greater than 50% of the equity
securities or other ownership interests are so owned or controlled. "WHOLLY
OWNED SUBSIDIARY" means any such corporation, partnership, limited liability
company or other entity of which all of the equity securities or other
ownership interests (other than, in the case of a corporation, directors'
qualifying shares) are so owned or controlled. Notwithstanding the foregoing,
a Portfolio Investment of a Borrower or a Subsidiary shall not be a Subsidiary
of such Borrower or such Subsidiary.
"SYNDICATION AGENT" means First Union National Bank, in its capacity
as contractual representative of the Lenders under this Agreement, and any of
its successors.
"TANGIBLE NET WORTH" means, for any Person and as of a given date,
such Person's total stockholder's equity minus (to the extent reflected in
determining stockholders' equity of such Person): (a) the amount of any net
write-up in the book value of any assets contained in any
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balance sheet of such Person resulting from revaluation thereof or any net
write-up in excess of the cost of such assets acquired and (b) the aggregate of
all amounts appearing on the assets side of any such balance sheet for
franchises, licenses, permits, patents, patent applications, copyrights,
trademarks, trade names, goodwill, treasury stock, experimental or
organizational expenses and other like assets which would be properly
classified as intangible assets under GAAP.
"TAXES" has the meaning given that term in Section 3.12.
"TERMINATION DATE" means June 30, 1999.
"TYPE" with respect to any Loan, refers to whether such Loan is a
LIBOR Loan or Base Rate Loan.
"UNCONSOLIDATED AFFILIATE" shall mean, with respect to any Person, any
other Person in whom such Person holds an Investment, which Investment is
accounted for in the financial statements of such Person on an equity basis of
accounting and whose financial results would not be consolidated under GAAP
with the financial results of such Person on the consolidated financial
statements of such Person.
"UNFUNDED LIABILITIES" means, with respect to any Plan at any time,
the amount (if any) by which (a) the value of all benefit liabilities under
such Plan, determined on a plan termination basis using the assumptions
prescribed by the PBGC for purposes of Section 4044 of ERISA, exceeds (b) the
fair market value of all Plan assets allocable to such liabilities under Title
IV of ERISA (excluding any accrued but unpaid contributions), all determined as
of the then most recent valuation date for such Plan, but only to the extent
that such excess represents a potential liability of a member of the ERISA
Group to the PBGC or any other Person under Title IV of ERISA.
"UNSECURED INDEBTEDNESS" means, with respect to a Person, all
Indebtedness of such Person that is not Secured Indebtedness.
SECTION 1.2. GENERAL; REFERENCES TO TIMES.
Unless otherwise indicated, all accounting terms, ratios and
measurements shall be interpreted or determined in accordance with GAAP in
effect as of the Agreement Date. References in this Agreement to "Sections,"
"Articles," "Exhibits" and "Schedules" are to sections, articles, exhibits and
schedules herein and hereto unless otherwise indicated. References in this
Agreement to any document, instrument or agreement (a) shall include all
exhibits, schedules and other attachments thereto, (b) shall include all
documents, instruments or agreements issued or executed in replacement thereof,
to the extent permitted hereby and (c) shall mean such document, instrument or
agreement, or replacement or predecessor thereto, as amended, supplemented,
restated or otherwise modified from time to time to the extent permitted hereby
and in effect at any given time. Wherever from the context it appears
appropriate, each term stated in either the singular or plural shall include
the singular and plural, and pronouns stated in the masculine, feminine or
neuter gender shall include the masculine, the
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feminine and the neuter. Unless explicitly set forth to the contrary, a
reference to "Subsidiary" means a Subsidiary of the Company or a Subsidiary of
such Subsidiary and a reference to an "Affiliate" means a reference to an
Affiliate of the Company. Titles and captions of Articles, Sections,
subsections and clauses in this Agreement are for convenience only, and neither
limit nor amplify the provisions of this Agreement. Unless otherwise
indicated, all references to time are references to Boston, Massachusetts,
time.
ARTICLE 2
CREDIT FACILITY
SECTION 2.1. LOANS.
(a) Generally. Subject to the terms and conditions hereof, during
the period from the Effective Date to but excluding the Termination Date, each
Lender severally and not jointly agrees to make Loans to the Borrowers in an
aggregate principal amount at any one time outstanding up to, but not
exceeding, the amount of such Lender's Commitment, provided, however, that in
no event shall (1) the aggregate principal amount of all outstanding Loans to
the Company and REIT exceed the lesser of (i) the Borrowing Base of the
Company, and (ii) the aggregate amount of the Commitments as in effect from
time to time, and (2) the aggregate principal amount of Loans to SBLC exceed
the lesser of (i) the Borrowing Base of SBLC, and (ii) $40,000,000, and (3) the
aggregate principal amount of all outstanding Loans exceed the aggregate amount
of the Commitments as in effect from time to time. Subject to the terms and
conditions of this Agreement, during the period from the Effective Date to but
excluding the Termination Date, the Borrowers may borrow, repay and reborrow
Loans hereunder.
(b) Requesting Loans. The Company and REIT shall give the
Disbursing Agent notice pursuant to a Notice of Borrowing or telephonic notice
of each borrowing of Loans. Each Notice of Borrowing shall be delivered to the
Disbursing Agent before 12:00 noon (a) in the case of LIBOR Loans, on the date
two Business Days prior to the proposed date of such borrowing and (b) in the
case of Base Rate Loans, on the proposed date of such borrowing. Any such
telephonic notice shall include all information to be specified in a written
Notice of Borrowing and shall be promptly confirmed in writing by the Company
and REIT pursuant to a Notice of Borrowing sent to the Disbursing Agent by
telecopy on the same day of the giving of such telephonic notice. The
Disbursing Agent will transmit by telecopy the Notice of Borrowing (or the
information contained in such Notice of Borrowing) to each Lender promptly upon
receipt by the Disbursing Agent (but in any event not later than 1:00 p.m. on
the date of receipt thereof). Each Notice of Borrowing or telephonic notice of
each borrowing shall be irrevocable once given and binding on the applicable
Borrower specified therein.
(c) Disbursements of Loan Proceeds. No later than 3:00 p.m. on
the date specified in the Notice of Borrowing, each Lender will make available
for the account of its applicable Lending Office to the Disbursing Agent at the
Principal Office, in immediately available funds, the proceeds of the Loan to
be made by such Lender. With respect to Loans to be made after the Effective
Date, unless the Disbursing Agent shall have been notified by any Lender prior
to the specified date of borrowing that such Lender does not intend to make
available to the Disbursing
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Agent the Loan to be made by such Lender on such date, the Disbursing Agent may
assume that such Lender will make the proceeds of such Loan available to the
Disbursing Agent on the date of the requested borrowing as set forth in the
Notice of Borrowing and the Disbursing Agent may (but shall not be obligated
to), in reliance upon such assumption, make available to the applicable
Borrower the amount of such Loan to be provided by such Lender. Subject to
satisfaction of the applicable conditions set forth in Article 5 for such
borrowing, the Disbursing Agent will make the proceeds of such borrowing
available to the applicable Borrower no later than 4:00 p.m. on the date and at
the account specified by the Company in such Notice of Borrowing.
SECTION 2.2. RATES AND PAYMENT OF INTEREST ON LOANS.
(a) Rates. The Company and REIT jointly and severally promise to
pay to the Disbursing Agent for the account of each Lender with respect to
Loans made to the Company or REIT, and SBLC severally promises to pay to the
Disbursing Agent for account of each Lender with respect to Loans made to SBLC,
interest on the unpaid principal amount of each such Loan for the period from
and including the date of the making of such Loan to but excluding the date
such Loan shall be paid in full, at the following per annum rates:
(1) during such periods as such Loan is a Base Rate Loan,
at the Base Rate (as in effect from time to time); and
(2) during such periods as such Loan is a LIBOR Loan, at
the Adjusted Eurodollar Rate for such Loan for the Interest Period
therefor, plus 1.25%.
Notwithstanding the foregoing, (i) during the continuance of an Event of
Default, and prior to maturity or acceleration of the Obligations, each
Borrower hereby promises to pay to the Disbursing Agent for account of each
Lender interest at 2% per annum in excess of the rates otherwise payable
hereunder on the aggregate outstanding principal of all Loans made by such
Lender to such Borrower and on any other amount payable by such Borrower
hereunder or under the Notes held by such Lender (including without limitation,
overdue accrued but unpaid interest to the extent permitted under Applicable
Law), and (ii) upon the maturity or acceleration of the Obligations in
accordance with the terms hereof, each Borrower promises to pay to the
Disbursing Agent for the account of each Lender interest at the Post-Default
Rate on such amounts.
(b) Payment of Interest. Accrued interest on each Loan shall be
payable as provided in each of the following clauses which apply to such Loan:
(i) in the case of a Base Rate Loan, monthly on the last Business Day of each
calendar month, (ii) in the case of a LIBOR Loan, on the last day of each
Interest Period therefor, (iii) in the case of a LIBOR Loan, upon the payment,
prepayment or Continuation thereof or the Conversion of such Loan to a Loan of
another Type (but only on the principal amount so paid, prepaid or Converted),
and (iv) in the case of any Base Rate Loan, upon the payment or prepayment
thereof in full. Interest payable during the continuance of an Event of
Default but prior to maturity or acceleration of the Obligations shall be
payable in accordance with the immediately preceding sentence. Interest
payable at the Post-Default Rate shall be payable from time to time on demand.
Promptly after the determination of any interest rate provided for herein or
any change therein, the Disbursing
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Agent shall give notice thereof to the Lenders to which such interest is
payable and to the Company. All determinations by the Disbursing Agent of an
interest rate hereunder shall be conclusive and binding on the Lenders and the
Borrowers for all purposes, absent manifest error.
SECTION 2.3. NUMBER OF INTEREST PERIODS.
There may be no more than five (5) different Interest Periods for
LIBOR Loans outstanding at the same time.
SECTION 2.4. REPAYMENT OF LOANS.
Each Borrower shall repay the entire outstanding principal amount of,
and all accrued but unpaid interest on, the Loans made to it on the Termination
Date. The Company and REIT shall be jointly and severally liable for Loans
made to the Company or REIT and SBLC shall be severally liable for Loans made
to it.
SECTION 2.5. PREPAYMENTS.
(a) Optional. Subject to Section 4.4, a Borrower may prepay any
Loan made to it at any time without premium or penalty.
(b) Mandatory. If at any time either (i) the aggregate principal
amount of all outstanding Loans, exceeds the aggregate amount of the
Commitments in effect at such time, or (ii) the aggregate principal amount of
all outstanding Loans to the Company and REIT exceeds the Borrowing Base of the
Company in effect at such time, or (iii) the aggregate principal amount of all
outstanding Loans to SBLC exceeds the Borrowing Base of SBLC in effect at such
time, then in any such case the applicable Borrower shall immediately pay to
the Disbursing Agent for the accounts of the Lenders the amount of such excess.
If the applicable Borrower is required to pay any outstanding LIBOR Loans by
reason of this Section prior to the end of the applicable Interest Period
therefor, such Borrower shall pay all amounts due under Section 4.4.
SECTION 2.6. CONTINUATION.
So long as no Default or Event of Default shall have occurred and be
continuing, the Company may on any Business Day, with respect to any LIBOR
Loan, elect to maintain such LIBOR Loan or any portion thereof as a LIBOR Loan,
as applicable, by selecting a new Interest Period for such Loan. Each new
Interest Period selected under this Section shall commence on the last day of
the immediately preceding Interest Period. Each selection of a new Interest
Period shall be made by the Company giving to the Disbursing Agent a Notice of
Continuation not later than 12:00 noon on the second Business Day prior to the
date of any such Continuation. Such notice by the Company of a Continuation
shall be by telephone or telecopy, confirmed immediately in writing if by
telephone, in the form of a Notice of Continuation, specifying (a) the proposed
date of such Continuation, (b) the LIBOR Loan, and portion thereof subject to
such Continuation and (c) the duration of the selected Interest Period, all of
which shall be specified in such manner as is necessary to comply with all
limitations on Loans outstanding hereunder. Each Notice of Continuation shall
be irrevocable by and binding on the applicable
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Borrower once given. Promptly after receipt of a Notice of Continuation (and
in any event not later than 1:00 p.m. on the date of receipt thereof), the
Disbursing Agent shall notify each Lender by telex or telecopy, or other
similar form of transmission of the proposed Continuation. If the Company
shall fail to select in a timely manner a new Interest Period for any LIBOR
Loan in accordance with this Section, such Loan will automatically, on the last
day of the current Interest Period therefor, Convert into a Base Rate Loan.
SECTION 2.7. CONVERSION.
So long as no Default or Event of Default shall have occurred and be
continuing, the Company may on any Business Day, upon the Company's giving of a
Notice of Conversion to the Disbursing Agent, Convert all or a portion of a
Loan of one Type into a Loan of another Type. Any Conversion of a LIBOR Loan
into a Base Rate Loan shall be made on, and only on, the last day of an
Interest Period for such LIBOR Loan. Each such Notice of Conversion shall be
given by the Company not later than 12:00 noon (a) on the Business Day prior to
the date of any proposed Conversion into Base Rate Loans or (b) on the second
Business Day prior to the date of any proposed Conversion into LIBOR Loans.
Promptly upon receipt of a Notice of Conversion (and in any event not later
than 1:00 p.m. on the date of receipt thereof), the Disbursing Agent shall
notify each Lender by telecopy or other similar form of transmission of the
proposed Conversion. Subject to the restrictions specified above, each Notice
of Conversion shall be by telephone or telecopy confirmed immediately in
writing if by telephone, in the form of a Notice of Conversion specifying (1)
the requested date of such Conversion, (2) the Type of Loan to be Converted,
(3) the portion of such Type of Loan to be Converted, (4) the Type of Loan such
Loan is to be Converted into and (5) if such Conversion is into a LIBOR Loan,
the requested duration of the Interest Period of such Loan. Each Notice of
Conversion shall be irrevocable by and binding on the applicable Borrower once
given.
SECTION 2.8. NOTE.
(a) Note. The Loans made by each Lender shall, in addition to
this Agreement, also be evidenced by a promissory note of the applicable
Borrowers substantially in the form of Exhibit F (each a "Note"), payable to
the order of such Lender. The Note issued by the Company and REIT to each
Lender shall be in a principal amount equal to the amount of such Lender's
Commitment as originally in effect. The Note issued by SBLC to each Lender
shall be in a principal amount equal to such Lender's pro rata share of
$40,000,000.
(b) Records; Endorsement on Transfer. The date, amount, interest
rate, Type and duration of Interest Periods (if applicable) of each Loan made
by each Lender to each Borrower, and each payment made on account of the
principal thereof, shall be recorded by such Lender on its books and such
entries shall be prima facie evidence of such matters. Prior to the transfer
of any Note, the Lender shall endorse such items on such Note or any allonge
thereof; provided that the failure of such Lender to make any such recordation
or endorsement shall not affect the obligations of such Borrower to make a
payment when due of any amount owing hereunder or under such Note in respect of
the Loans evidenced by such Note.
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SECTION 2.9. VOLUNTARY REDUCTIONS OF THE COMMITMENT.
The Company shall have the right to terminate or reduce the aggregate
unused amount of the Commitments at any time and from time to time without
penalty or premium upon not less than five Business Days prior written notice
to the Disbursing Agent of each such termination or reduction, which notice
shall specify the effective date thereof and the amount of any such reduction
and shall be irrevocable once given and effective only upon receipt by the
Disbursing Agent. The Disbursing Agent will promptly transmit such notice to
each Lender. The Commitments, once terminated or reduced may not be increased
or reinstated.
ARTICLE 3
PAYMENTS, FEES AND OTHER GENERAL PROVISIONS
SECTION 3.1. PAYMENTS.
Except to the extent otherwise provided herein, all payments of
principal, interest and other amounts to be made by the Borrowers under this
Agreement or any other Loan Document shall be made in Dollars, in immediately
available funds, without deduction, set-off or counterclaim, to the Disbursing
Agent at its Principal Office, not later than 2:00 p.m. on the date on which
such payment shall become due (each such payment made after such time on such
due date to be deemed to have been made on the next succeeding Business Day).
Prior to making any such payment, the Company shall give the Disbursing Agent
notice of such payment. Subject to Sections 3.2 and 3.3, the Disbursing Agent,
or any Lender for whose account any such payment is made, may (but shall not be
obligated to) debit the amount of any such payment which is not made by such
time from any special or general deposit account of the applicable Borrower
with the Disbursing Agent or such Lender, as the case may be (with notice to
the Company, the other Lenders and the Disbursing Agent). The Company shall,
at the time of making each payment under this Agreement or any Note, specify to
the Disbursing Agent the amounts payable by the applicable Borrower hereunder
to which such payment is to be applied. Each payment received by the
Disbursing Agent for the account of a Lender under this Agreement or any Note
shall be paid to such Lender at the applicable Lending Office of such Lender no
later than 5:00 p.m. on the date of receipt. If the Disbursing Agent fails to
pay such amount to a Lender as provided in the previous sentence, the
Disbursing Agent shall pay interest on such amount until paid at a rate per
annum equal to the Federal Funds Rate from time to time in effect. If the due
date of any payment under this Agreement or any other Loan Document would
otherwise fall on a day which is not a Business Day such date shall be extended
to the next succeeding Business Day and interest shall be payable for the
period of such extension.
SECTION 3.2. PRO RATA TREATMENT.
Except to the extent otherwise provided herein: (a) each borrowing
from the Lenders under Section 2.1(a) shall be made from the Lenders, each
payment of the Fees under Section 3.6(a) shall be made for account of the
Lenders, and each termination or reduction of the amount of the Commitments
under Section 2.9 shall be applied to the respective Commitments of the
Lenders, pro rata according to the amounts of their respective Commitments; (b)
each payment or prepayment of principal of Loans shall be made for account of
the Lenders pro rata in
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accordance with the respective unpaid principal amounts of the Loans held by
them, provided that if immediately prior to giving effect to any such payment
in respect of any Loans the outstanding principal amount of the Loans shall not
be held by the Lenders pro rata in accordance with their respective Commitments
in effect at the time such Loans were made, then such payment shall be applied
to the Loans in such manner as shall result, as nearly as is practicable, in
the outstanding principal amount of the Loans being held by the Lenders pro
rata in accordance with their respective Commitments; (c) each payment of
interest on Loans shall be made for account of the Lenders pro rata in
accordance with the amounts of interest on such Loans then due and payable to
the respective Lenders; and (d) the making, Conversion and Continuation of
Loans of a particular Type (other than Conversions provided for by Section 4.5)
shall be made pro rata among the Lenders according to the amounts of their
respective Commitments (in the case of making of Loans) or their respective
Loans (in the case of Conversions and Continuations of Loans) and the then
current Interest Period for each Lender's portion of each Loan of such Type
shall be coterminous.
SECTION 3.3. SHARING OF PAYMENTS, ETC.
Each Borrower agrees that, in addition to (and without limitation of)
any right of set-off, banker's lien or counterclaim a Lender or an Agent may
otherwise have, each Lender and each Agent shall be entitled, at its option, to
offset balances held by it for the account of such Borrower at any of such
Lender's (or an Agent's) offices, in Dollars or in any other currency, against
any principal of, or interest on, any of such Lender's Loans to such Borrower
hereunder (or other Obligations of such Borrower owing to such Lender or an
Agent hereunder) which is not paid when due (regardless of whether such
balances are then due to such Borrower), in which case such Lender shall
promptly notify the Company, all other Lenders and the each Agent thereof;
provided, however, such Lender's failure to give such notice shall not affect
the validity of such offset. If a Lender shall obtain payment of any principal
of, or interest on, any Loan made by it to a Borrower under this Agreement, or
shall obtain payment on any other Obligation owing by a Borrower through the
exercise of any right of set-off, banker's lien or counterclaim or similar
right or otherwise or through voluntary prepayments directly to a Lender or
other payments made by a Borrower to a Lender not in accordance with the terms
of this Agreement and such payment should be distributed to the Lenders pro
rata in accordance with Section 3.2 or Section 10.4, as applicable, such Lender
shall promptly pay such amounts to the other Lenders and make such other
adjustments from time to time as shall be equitable, to the end that all the
Lenders shall share the benefit of such payment (net of any reasonable expenses
which may be incurred by such Lender in obtaining or preserving such benefit)
pro rata in accordance with Section 3.2 or Section 10.4. To such end, all the
Lenders shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must
otherwise be restored. Nothing contained herein shall require any Lender to
exercise any such right or shall affect the right of any Lender to exercise,
and retain the benefits of exercising, any such right with respect to any other
indebtedness or obligation of the Borrowers.
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SECTION 3.4. SEVERAL OBLIGATIONS.
No Lender shall be responsible for the failure of any other Lender to
make a Loan or to perform any other obligation to be made or performed by such
other Lender hereunder, and the failure of any Lender to make a Loan or to
perform any other obligation to be made or performed by it hereunder shall not
relieve the obligation of any other Lender to make any Loan or to perform any
other obligation to be made or performed by such other Lender.
SECTION 3.5. MINIMUM AMOUNTS.
(a) Borrowings and Conversions. Each borrowing of Base Rate Loans
shall be in an aggregate minimum amount of $1,000,000 and integral multiples of
$1,000,000 in excess thereof. Each borrowing of LIBOR Loans, and each
Conversion of Loans to LIBOR Loans shall be in an aggregate minimum amount of
$1,000,000 and integral multiples of $1,000,000 in excess of that amount.
(b) Prepayments. Each voluntary prepayment of Loans shall be in
an aggregate minimum amount of $1,000,000.
(c) Reductions of Commitments. Each reduction of the Commitments
under Section 2.9 shall be in an aggregate minimum amount of $5,000,000 and
integral multiples of $1,000,000 in excess thereof.
SECTION 3.6. FEES.
(a) Commitment Fee. The Company agrees to pay to the Disbursing
Agent for the account of the Lenders a commitment fee in respect of the
Commitments (whether or not utilized) at the rate of two-tenths of one percent
(0.20%) per annum for the period from and including the Agreement Date to but
excluding the Termination Date. Such commitment fee shall be payable quarterly
in arrears on each Quarterly Date and on the Termination Date.
(b) Facility Fee. The Company agrees to pay to the Disbursing
Agent for the account of the Lenders on the Agreement Date a facility fee in
the amount of 0.05% of the aggregate Commitments.
(c) Administrative and Other Fees. The Company agrees to pay the
administrative and other fees of each Agent as may be agreed to in writing from
time to time.
SECTION 3.7. COMPUTATIONS.
Unless otherwise expressly set forth herein, any accrued interest on
any Loan, any Fees or other Obligations due hereunder shall be computed on the
basis of a year of 360 days and the actual number of days elapsed.
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SECTION 3.8. USURY.
In no event shall the amount of interest due or payable on the Loans
or other Obligations exceed the maximum rate of interest allowed by Applicable
Law and, if any such payment is paid by a Borrower or received by any Lender,
then such excess sum shall be credited as a payment of principal, unless such
Borrower shall notify the respective Lender in writing that such Borrower
elects to have such excess sum returned to it forthwith. It is the express
intent of the parties hereto that the Borrowers not pay and the Lenders not
receive, directly or indirectly, in any manner whatsoever, interest in excess
of that which may be lawfully paid by the Borrowers under Applicable Law.
SECTION 3.9. AGREEMENT REGARDING INTEREST AND CHARGES.
The parties hereto hereby agree and stipulate that the only charge
imposed upon the Borrowers for the use of money in connection with this
Agreement is and shall be the interest specifically described in Section
2.2(a). Notwithstanding the foregoing, the parties hereto further agree and
stipulate that all agency fees, syndication fees, facility fees, underwriting
fees, default charges, late charges, funding or "breakage" charges, increased
cost charges, attorneys' fees and reimbursement for costs and expenses paid by
the Disbursing Agent or any Lender to third parties or for damages incurred by
the Disbursing Agent or any Lender, are charges made to compensate the
Disbursing Agent or any such Lender for underwriting or administrative services
and costs or losses performed or incurred, and to be performed or incurred, by
the Disbursing Agent and the Lenders in connection with this Agreement and
shall under no circumstances be deemed to be charges for the use of money.
SECTION 3.10. STATEMENTS OF ACCOUNT.
The Disbursing Agent will account to the Company monthly with a
statement of Loans, accrued interest and Fees, charges and payments made
pursuant to this Agreement and the other Loan Documents, and such account
rendered by the Disbursing Agent shall be deemed prima facie evidence of such
matters. The failure of the Disbursing Agent to deliver such a statement of
accounts shall not relieve or discharge a Borrower from any of its Obligations
hereunder.
SECTION 3.11. DEFAULTING LENDERS.
(a) Generally. If for any reason any Lender (a "Defaulting
Lender") shall fail or refuse to perform any of its obligations under this
Agreement or any other Loan Document to which it is a party within the time
period specified for performance of such obligation or, if no time period is
specified, if such failure or refusal continues for a period of two Business
Days after notice from the Disbursing Agent, then, in addition to the rights
and remedies that may be available to the Disbursing Agent or the Borrowers
under this Agreement or Applicable Law, such Defaulting Lender's right to
participate in the administration of the Loans, this Agreement and the other
Loan Documents, including without limitation, any right to vote in respect of,
to consent to or to direct any action or inaction of the Disbursing Agent or to
be taken into account in the calculation of the Requisite Lenders, shall be
suspended during the pendency of such failure or refusal. If a Lender is a
Defaulting Lender because it has failed to make timely
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payment to the Disbursing Agent of any amount required to be paid to the
Disbursing Agent hereunder (without giving effect to any notice or cure
periods), in addition to other rights and remedies which the Disbursing Agent
or the Borrowers may have under the immediately preceding provisions or
otherwise, the Disbursing Agent shall be entitled (i) to collect interest from
such Defaulting Lender on such delinquent payment for the period from the date
on which the payment was due until the date on which the payment is made at the
Federal Funds Rate, and (ii) to withhold or setoff and to apply in satisfaction
of the defaulted payment and any related interest, any amounts otherwise
payable to such Defaulting Lender under this Agreement or any other Loan
Document. Any amounts received by the Disbursing Agent in respect of a
Defaulting Lender's Loans shall not be paid to such Defaulting Lender and shall
be held uninvested by the Disbursing Agent and either applied against the
purchase price of such Loans under the following subsection (b) or paid to such
Defaulting Lender upon the Defaulting Lender's curing of its default. Neither
Borrower shall have any liability in respect of such action by the Disbursing
Agent.
(b) Purchase of Defaulting Lender's Commitment. Any Lender who is
not a Defaulting Lender shall have the right, but not the obligation, in its
sole discretion, to acquire all of a Defaulting Lender's Commitment. Any
Lender desiring to exercise such right shall give written notice thereof to the
Disbursing Agent no sooner than 2 Business Days and not later than 10 Business
Days after such Defaulting Lender became a Defaulting Lender. If more than one
Lender exercises such right, each such Lender shall have the right to acquire
an amount of such Defaulting Lender's Commitment in proportion to the
Commitments of the other Lenders exercising such right. Upon any such
purchase, the Defaulting Lender's interest in the Loans and its rights
hereunder (but not its liability in respect thereof or under the Loan Documents
or this Agreement to the extent the same relate to the period prior to the
effective date of the purchase) shall terminate on the date of purchase, and
the Defaulting Lender shall promptly execute all documents reasonably requested
to surrender and transfer such interest to the purchaser thereof including an
appropriate Assignment and Acceptance Agreement and, notwithstanding Section
12.5(d), shall pay to the Syndication Agent an assignment fee in the amount of
$3,000. The purchase price for the Commitment of a Defaulting Lender shall be
equal to the amount of the principal balance of the Loans outstanding and owed
by the Borrowers to the Defaulting Lender. Prior to payment of such purchase
price to a Defaulting Lender, the Disbursing Agent shall apply against such
purchase price any amounts retained by the Disbursing Agent pursuant to the
last sentence of the immediately preceding subsection (a). The Defaulting
Lender shall be entitled to receive amounts owed to it by the Borrowers under
the Loan Documents which accrued prior to the date of the default by the
Defaulting Lender, to the extent the same are received by the Disbursing Agent
from or on behalf of the Borrowers. There shall be no recourse against any
Lender or the Disbursing Agent for the payment of such sums except to the
extent of the receipt of payments from any other party or in respect of the
Loans. If, prior to a Lender's acquisition of a Defaulting Lender's Commitment
pursuant to this subsection, such Defaulting Lender shall cure the event or
condition which caused it to become a Defaulting Lender and shall have paid all
amounts owing by it hereunder as a result thereof, then such Lender shall no
longer have the right to acquire such Defaulting Lender's Commitment.
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SECTION 3.12. TAXES.
(a) Taxes Generally. All payments by each Borrower of principal
of, and interest on, the Loans and all other Obligations shall be made free and
clear of and without deduction for any present or future excise, stamp or other
taxes, fees, duties, levies, imposts, charges, deductions, withholdings or
other charges of any nature whatsoever imposed by any taxing authority in the
United States of America, but excluding (i) franchise taxes, (ii) any taxes
(other than withholding taxes that do not constitute back-up withholding taxes)
that would not be imposed but for a connection between the Disbursing Agent or
a Lender and the jurisdiction imposing such taxes (other than a connection
arising solely by virtue of the activities of the Disbursing Agent or such
Lender pursuant to or in respect of this Agreement or any other Loan Document),
(iii) any withholding taxes payable with respect to payments hereunder or under
any other Loan Document under Applicable Law in effect on the Agreement Date,
(iv) any taxes imposed on or measured by any Lender's assets, net income,
receipts or branch profits and (v) any taxes arising after the Agreement Date
solely as a result of or attributable to a Lender changing its designated
Lending Office after the date such Lender becomes a party hereto (such
non-excluded items being collectively called "Taxes"). If any withholding or
deduction from any payment to be made by a Borrower hereunder is required in
respect of any Taxes pursuant to any Applicable Law, then such Borrower will:
(i) pay directly to the relevant Governmental Authority
the full amount required to be so withheld or deducted;
(ii) promptly forward to the Disbursing Agent an official
receipt or other documentation reasonably satisfactory to the
Disbursing Agent evidencing such payment to such Governmental
Authority; and
(iii) pay to the Disbursing Agent for its account or the
account of the applicable Lender, as the case may be, such additional
amount or amounts as is necessary to ensure that the net amount
actually received by the Disbursing Agent or such Lender will equal
the full amount that the Disbursing Agent or such Lender would have
received had no such withholding or deduction been required .
(b) Tax Indemnification. If a Borrower fails to pay any Taxes
when due to the appropriate Governmental Authority or fails to remit to the
Disbursing Agent, for its account or the account of the respective Lender, as
the case may be, the receipts or other documentary evidence described in
subsection (a)(ii) above, such Borrower shall indemnify the Disbursing Agent
and the Lenders for any incremental Taxes, interest or penalties that may
become payable by the Disbursing Agent or any Lender as a result of any such
failure. For purposes of this Section, a distribution hereunder by the
Disbursing Agent or any Lender to or for the account of any Lender shall be
deemed a payment by the applicable Borrower.
(c) Tax Forms. Prior to the date that any Lender or Participant
organized under the laws of a jurisdiction outside the United States of America
becomes a party hereto, such Person shall deliver to the Company and the
Disbursing Agent such certificates, documents or other evidence, as required by
the Internal Revenue Code or Treasury Regulations issued pursuant
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thereto (including Internal Revenue Service Forms W-8, 4224 or 1001, as
applicable, or appropriate successor forms), properly completed, currently
effective and duly executed by such Lender or Participant establishing that
payments to it hereunder and under the Notes are (i) not subject to United
States Federal backup withholding tax and (ii) not subject to United States
Federal withholding tax under the Code because such payment is either
effectively connected with the conduct by such Lender or Participant of a trade
or business in the United States or totally exempt from United States Federal
withholding tax by reason of the application of the provisions of a treaty to
which the United States is a party or such Lender or Participant is otherwise
exempt.
ARTICLE 4
YIELD PROTECTION, ETC.
SECTION 4.1. ADDITIONAL COSTS; CAPITAL ADEQUACY.
(a) Additional Costs. Each Borrower shall promptly pay to the
Disbursing Agent for the account of a Lender from time to time such amounts
(without duplication of amounts payable under Section 3.12) as such Lender may
determine to be necessary to compensate such Lender for any costs incurred by
such Lender that it determines are attributable to its making or maintaining of
any LIBOR Loans to such Borrower or its obligation to make any LIBOR Loans to
such Borrower hereunder, any reduction in any amount receivable by such Lender
under this Agreement or any of the other Loan Documents in respect of any of
such Loans or such obligation or the maintenance by such Lender of capital in
respect of its Loans or its Commitments (such increases in costs and reductions
in amounts receivable being herein called "Additional Costs"), resulting from
any Regulatory Change (other than those applying solely to a Lender by reason
of a formal determination by the applicable regulator to be in a financially
troubled condition) that: (i) changes the basis of taxation of any amounts
payable to such Lender under this Agreement or any of the other Loan Documents
in respect of any of such Loans or its Commitments (other than taxes imposed on
or measured by the overall net income of such Lender or of its Lending Office
for any of such Loans by the jurisdiction in which such Lender has its
principal office or such Lending Office), or (ii) imposes or modifies any
reserve, special deposit or similar requirements (other than Regulation D of
the Board of Governors of the Federal Reserve System or other reserve
requirement utilized in the determination of the Adjusted Eurodollar Rate for
such Loan) relating to any extensions of credit or other assets of, or any
deposits with or other liabilities of, such Lender, or any commitment of such
Lender (including, without limitation, the Commitments of such Lender
hereunder); or (iii) has or would have the effect of reducing the rate of
return on capital of such Lender to a level below that which such Lender could
have achieved but for such Regulatory Change (taking into consideration such
Lender's policies with respect to capital adequacy).
(b) Lender's Suspension of LIBOR Loans. Without limiting the
effect of the provisions of the immediately preceding subsection (a), if by
reason of any Regulatory Change, any Lender either (i) incurs Additional Costs
based on or measured by the excess above a specified level of the amount of a
category of deposits or other liabilities of such Lender that includes deposits
by reference to which the interest rate on LIBOR Loans is determined as
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provided in this Agreement or a category of extensions of credit or other
assets of such Lender that includes LIBOR Loans or (ii) becomes subject to
restrictions on the amount of such a category of liabilities or assets that it
may hold, then, if such Lender so elects by notice to the Company (with a copy
to the Disbursing Agent), the obligation of such Lender to make or Continue, or
to Convert any other Type of Loan into LIBOR Loans hereunder shall be suspended
until such Regulatory Change ceases to be in effect (in which case the
provisions of Section 4.5 shall apply).
(c) Notification and Determination of Additional Costs. Each of
the Disbursing Agent and each Lender agrees to notify the Company of any event
occurring after the Agreement Date entitling the Disbursing Agent or such
Lender to compensation under any of the preceding subsections of this Section
as promptly as practicable; provided, however, the failure of the Disbursing
Agent or any Lender to give such notice shall not release a Borrower from any
of its obligations hereunder. The Disbursing Agent and or such Lender agrees
to furnish to the Company a certificate setting forth the basis and amount of
each request by the Disbursing Agent or such Lender for compensation under this
Section. Determinations by the Disbursing Agent or any Lender of the effect of
any Regulatory Change shall be conclusive, provided that such determinations
are made on a reasonable basis and in good faith.
SECTION 4.2. SUSPENSION OF LIBOR LOANS.
Anything herein to the contrary notwithstanding, if, on or prior to
the determination of any Adjusted Eurodollar Rate for any Interest Period:
(a) the Disbursing Agent reasonably determines (which
determination shall be conclusive) that by reason of circumstances affecting
the relevant market, adequate and reasonable means do not exist for
ascertaining the Adjusted Eurodollar Rate for such Interest Period, or
(b) the Disbursing Agent reasonably determines (which
determination shall be conclusive) that the Adjusted Eurodollar Rate will not
adequately and fairly reflect the cost to the Lenders of making or maintaining
LIBOR Loans for such Interest Period;
then the Disbursing Agent shall give the Company and each Lender prompt notice
thereof and, so long as such condition remains in effect, the Lenders shall be
under no obligation to, and shall not, make additional LIBOR Loans, Continue
LIBOR Loans, or Convert Loans into LIBOR Loans, as the case may be, and each
Borrower shall, on the last day of each current Interest Period for each
affected outstanding LIBOR Loan, either repay such Loan or Convert such Loan
into a Base Rate Loan.
SECTION 4.3. ILLEGALITY.
Notwithstanding any other provision of this Agreement, if it becomes
unlawful for any Lender to honor its obligation to make or maintain LIBOR Loans
hereunder, then such Lender shall promptly notify the Company thereof (with a
copy to the Disbursing Agent) and such Lender's obligation to make or Continue,
or to Convert Loans of any other Type into, LIBOR
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Loans shall be suspended until such time as such Lender may again make and
maintain LIBOR Loans (in which case the provisions of Section 4.5 shall be
applicable).
SECTION 4.4. COMPENSATION.
Each Borrower shall pay to the Disbursing Agent for account of each
Lender, upon the request of such Lender through the Disbursing Agent, such
amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost or expense that such Lender
determines is attributable to:
(a) any payment or prepayment (whether mandatory or optional) of a
LIBOR Loan, or Conversion of a LIBOR Loan, made by such Lender to such Borrower
for any reason (including, without limitation, acceleration) on a date other
than the last day of the Interest Period for such Loan; or
(b) any failure by such Borrower for any reason (including,
without limitation, the failure of any of the applicable conditions precedent
specified in Article 5 to be satisfied) to borrow a LIBOR Loan from such Lender
on the date for such borrowing, or to Convert a Loan of another Type into a
LIBOR Loan or Continue a LIBOR Loan on the requested date of such Conversion or
Continuation.
SECTION 4.5. TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make LIBOR Loans or to Continue, or
to Convert Loans into, LIBOR Loans shall be suspended pursuant to Section
4.1(b), Section 4.2 or Section 4.3, then such Lender's affected LIBOR Loans
shall be automatically Converted into Base Rate Loans on the last day(s) of the
then current Interest Period(s) for such LIBOR Loans (or, in the case of a
Conversion required by Section 4.1(b) or 4.3, on such earlier date as such
Lender may specify to the Company with a copy to the Disbursing Agent) and,
unless and until such Lender gives notice as provided below that the
circumstances specified in Section 4.1, 4.2 or 4.3 that gave rise to such
Conversion no longer exist:
(a) to the extent that such Lender's LIBOR Loans have been so
Converted, all payments and prepayments of principal that would otherwise be
applied to such Lender's LIBOR Loans shall be applied instead to its Base Rate
Loans; and
(b) all Loans that would otherwise be made or Continued by such
Lender as LIBOR Loans shall be made or Continued instead as Base Rate Loans,
and all Base Rate Loans of such Lender that would otherwise be Converted into
LIBOR Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Company (with a copy to the Disbursing
Agent) that the circumstances specified in Section 4.1 or 4.3 that gave rise to
the Conversion of such Lender's LIBOR Loans pursuant to this Section no longer
exist (which such Lender agrees to do promptly upon such circumstances ceasing
to exist) at a time when LIBOR Loans made by other Lenders are outstanding,
then such Lender's Base Rate Loans shall be automatically Converted, on the
first day(s) of the next succeeding Interest Period(s) for such outstanding
LIBOR Loans, to the
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extent necessary so that, after giving effect thereto, all Loans held by the
Lenders holding LIBOR Loans and by such Lender are held pro rata (as to
principal amounts, Types and Interest Periods) in accordance with their
respective Commitments.
SECTION 4.6. CHANGE OF LENDING OFFICE.
Each Lender agrees that it will use reasonable efforts to designate an
alternate Lending Office with respect to any of its Loans affected by the
matters or circumstances described in Sections 3.12, 4.l or 4.3 to reduce the
liability of the Borrowers or avoid the results provided thereunder, so long as
such designation is not disadvantageous to such Lender as determined by such
Lender in its sole discretion, except that such Lender shall have no obligation
to designate a Lending Office located in the United States of America.
SECTION 4.7. ASSUMPTIONS CONCERNING FUNDING OF LIBOR LOANS.
Calculation of all amounts payable to a Lender under this Article 4
shall be made as though such Lender had actually funded LIBOR Loans through the
purchase of deposits in the relevant market bearing interest at the rate
applicable to such LIBOR Loans in an amount equal to the amount of the LIBOR
Loans and having a maturity comparable to the relevant Interest Period
provided, however, that each Lender may fund each of its LIBOR Loans in any
manner it sees fit and the foregoing assumption shall be used only for
calculation of amounts payable under this Article 4.
ARTICLE 5
CONDITIONS PRECEDENT
SECTION 5.1. INITIAL CONDITIONS PRECEDENT.
The obligation of the Lenders to effect the occurrence of the first
Credit Event hereunder is subject to the following conditions precedent:
(a) The Managing Agent shall have received each of the following,
in form and substance satisfactory to the Lenders:
(i) Counterparts of this Agreement executed by each of
the parties hereto;
(ii) Notes executed by each Borrower, payable to each
Lender and complying with the terms of Section 2.8(a);
(iii) An opinion of ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇ & ▇▇▇▇▇▇▇ LLP,
counsel to the Borrower, addressed to the Managing Agent and the
Lenders, in substantially the form of Exhibit G;
(iv) The Articles of Incorporation of each Borrower
certified as of a recent date by the Secretary of State of the State
of Maryland, to the extent not provided to the Existing Lenders;
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(v) A good standing certificate with respect to each
Borrower issued as of a recent date by the Secretary of State of the
State of Maryland;
(vi) A certificate of incumbency signed by the Secretary
or Assistant Secretary of each Borrower with respect to each of the
officers of such Borrower authorized to execute and deliver the Loan
Documents to which such Borrower is a party and the officers of such
Borrower then authorized to deliver Notices of Borrowing, Notices of
Continuation and Notices of Conversion;
(vii) Copies (certified by the Secretary or Assistant
Secretary of such Borrower) of the bylaws of such Borrower, to the
extent not provided to the Existing Lenders, and of all corporate
action taken by such Borrower to authorize the execution, delivery and
performance of the Loan Documents to which it is a party;
(viii) To the extent not provided to the Existing Lenders,
the articles of incorporation, articles of organization, certificate
of limited partnership or other comparable organizational instrument
of each of SBIC and SSBIC certified as of a recent date by the
Secretary of State of the State of formation of such Subsidiary;
(ix) To the extent not provided to the Existing Lenders, a
certificate of good standing or certificate of similar meaning with
respect to each of SBIC and SSBIC issued as of a recent date by the
Secretary of State of the State of formation of each such Subsidiary;
(x) To the extent not provided to the Existing Lenders,
copies certified by the Secretary or Assistant Secretary of each of
SBIC and SSBIC (or other individual performing similar functions) of
the by-laws of each of SBIC and SSBIC;
(xi) A copy of each of the documents, instruments and
agreements evidencing any of the Indebtedness described on Schedule
6.1(g) and a copy of each Material Contract, certified as true,
correct and complete by the chief financial officer of the Company;
(xii) Evidence that all insurance required to be maintained
by the Company and the Subsidiaries under the terms of the Loan
Documents is in effect, or a certificate of an officer of the Company
to such effect;
(xiii) The Fees then due under Section 3.6;
(xiv) Subordination agreements with respect to any
intercompany Indebtedness of a Borrower or a Guarantor permitted by
Section 9.2(a)(4);
(xv) A pro-forma Compliance Certificate and pro-forma
Borrowing Base Certificates of each Borrower, each calculated as of
the Effective Date, together with Borrowing Base Certificates of the
Company and SBLC, each calculated as of February 28, 1998, and March
31, 1998, and any other information that should have been delivered to
the Existing Lenders pursuant to Article 8 of the Existing Credit
Agreement; and
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(xvi) Such other documents, agreements and instruments as
the Managing Agent on behalf of the Lenders may reasonably request;
and
(b) In the good faith judgment of the Managing Agent and the
Lenders:
(i) There shall not have occurred or become known to the
Managing Agent or the Lenders any event, condition, situation or
status since the date of the information contained in the financial
and business projections, budgets, pro forma data and forecasts
concerning the Company and its Subsidiaries delivered to the Managing
Agent and the Lenders prior to the Agreement Date that has had or
could reasonably be expected to result in a Material Adverse Effect;
(ii) No litigation, action, suit, investigation or other
arbitral, administrative or judicial proceeding shall be pending or
threatened which could reasonably be expected to (1) result in a
Material Adverse Effect or (2) restrain or enjoin, impose materially
burdensome conditions on, or otherwise materially and adversely affect
the ability of a Borrower to fulfill its obligations under the Loan
Documents;
(iii) The Company and its Subsidiaries shall have received
all approvals, consents and waivers, and shall have made or given all
necessary filings and notices as shall be required to consummate the
transactions contemplated hereby without the occurrence of any default
under, conflict with or violation of (1) any Applicable Law or (2) any
agreement, document or instrument to which the Company or any
Subsidiary is a party or by which any of them or their respective
properties is bound, except for such approvals, consents, waivers,
filings and notices the receipt, making or giving of which would not
reasonably be likely to (A) have a Material Adverse Effect, or (B)
restrain or enjoin, impose materially burdensome conditions on, or
otherwise materially and adversely affect the ability of a Borrower to
fulfill its obligations under the Loan Documents; and
(iv) There shall not have occurred or exist any other
material disruption of financial or capital markets that could
reasonably be expected to materially and adversely affect the
transactions contemplated by the Loan Documents.
(c) The Company shall have provided the Lenders with the executed
waivers and consents required by Section 7.15(b) of the Existing Credit
Agreement.
SECTION 5.2. CONDITIONS PRECEDENT TO ALL LOANS.
The obligation of the Lenders to make any Loans is subject to the
further condition precedent that: (a) no Default or Event of Default shall
have occurred and be continuing as of the date of the making of such Loan or
would exist immediately after giving effect thereto; (b) the representations
and warranties made or deemed made by the Company and its Subsidiaries in the
Loan Documents to which any of them is a party, shall be true and correct on
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and as of the date of the making of such Loan with the same force and effect as
if made on and as of such date except to the extent that such representations
and warranties expressly relate solely to an earlier date (in which case such
representations and warranties shall have been true and accurate on and as of
such earlier date) and except for changes in factual circumstances specifically
and expressly permitted hereunder; and (c) in the case of the borrowing of
Loans, the Disbursing Agent shall have received a timely Notice of Borrowing.
Each Credit Event shall constitute a certification by the Company to the effect
set forth in the preceding sentence (both as of the date of the giving of
notice relating to such Credit Event and, unless the Company otherwise notifies
the Managing Agent prior to the date of such Credit Event, as of the date of
the occurrence of such Credit Event). In addition, if such Credit Event is the
making of a Loan, the Company shall be deemed to have represented to the
Managing Agent and the Lenders at the time such Loan is made that all
conditions to the making of such Loan contained in Article 5 have been
satisfied.
ARTICLE 6
REPRESENTATIONS AND WARRANTIES
SECTION 6.1. REPRESENTATIONS AND WARRANTIES.
In order to induce the Agents and each Lender to enter into this
Agreement and to make Loans, each Borrower represents and warrants to the
Agents and each Lender as follows:
(a) Organization; Power; Qualification. Each of the Borrowers and
its Subsidiaries is a corporation, partnership or other legal entity, duly
organized or formed, validly existing and in good standing under the
jurisdiction of its incorporation or formation, has the power and authority to
own or lease its respective properties and to carry on its respective business
as now being and hereafter proposed to be conducted and is duly qualified and
is in good standing as a foreign corporation, partnership or other legal
entity, and authorized to do business, in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification or authorization and where the failure to be so qualified or
authorized would have, in each instance a Material Adverse Effect.
(b) Ownership Structure. As of the Agreement Date, Schedule
6.1(b) correctly sets forth the corporate structure and ownership interests of
the Subsidiaries including the correct legal name of each Subsidiary, its
jurisdiction of formation, the Persons holding equity interests in such
Subsidiary, and their percentage equity or voting interest in such Subsidiary .
As of the Agreement Date, SBLC, SBIC, SSBIC, REIT and QRS are the only Material
Subsidiaries. Except as set forth in such Schedule, and except for preferred
stock of REIT issued to 125 shareholders:
(i) no Subsidiary has issued to any third party any
securities convertible into such Subsidiary's capital stock or other
equity interests or any options, warrants or other rights to acquire
any securities convertible into such capital stock or other equity
interests, and
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(ii) the outstanding capital stock of, or other equity
interests in, each such Subsidiary are owned by the Company and its
Subsidiaries indicated on such Schedule free and clear of all Liens,
warrants, options and rights of others of any kind whatsoever. All
such outstanding capital stock and other equity interests have been
validly issued and, in the case of capital stock, are fully paid and
nonassessable.
(c) Authorization of Agreement, Notes, Loan Documents and
Borrowings. Each Borrower has the right and power, and has taken all necessary
action to authorize it, to borrow hereunder. Each Borrower has the right and
power, and has taken all necessary action to authorize it to execute, deliver
and perform each of the Loan Documents to which it is a party in accordance
with their respective terms and to consummate the transactions contemplated
hereby and thereby. The Loan Documents to which each Borrower is a party have
been duly executed and delivered by the duly authorized officers of such
Borrower, as applicable, and each is a legal, valid and binding obligation of
such Borrower, as applicable, enforceable against it in accordance with its
respective terms.
(d) Compliance of Agreement, Notes, Loan Documents and Borrowing
with Laws, etc. The execution, delivery and performance of this Agreement, the
Notes and the other Loan Documents to which each Borrower is a party in
accordance with their respective terms and the borrowings hereunder do not and
will not, by the passage of time, the giving of notice, or otherwise: (i)
require any Governmental Approval, other than such as have been obtained and
are in full force and effect, or violate any Applicable Law (including all
Environmental Laws) relating to such Borrower or any Subsidiary; (ii) conflict
with, result in a breach of or constitute a default under the articles of
incorporation or the bylaws of such Borrower or the organizational documents of
any Subsidiary, or any indenture, agreement or other instrument to which such
Borrower or any Subsidiary is a party or by which it or any of its respective
properties may be bound; or (iii) result in or require the creation or
imposition of any Lien upon or with respect to any property now owned or
hereafter acquired by such Borrower or any Subsidiary.
(e) Compliance with Law; Governmental Approvals. Each Borrower
and each Subsidiary is in compliance with each Governmental Approval applicable
to it and in compliance with all other Applicable Law relating to it, except
for noncompliances which, and Governmental Approvals the failure to possess
which, would not, individually or in the aggregate, cause a Default or Event of
Default or have a Material Adverse Effect.
(f) Ownership of Assets; Liens. Each Borrower has (or in the case
of Subordinated CMBS Tranches, the QRS, or in the case of Sale Leaseback
Assets, a Real Estate Sub has) good title to all of its Eligible Assets. There
are no Liens against any of such Eligible Assets except for Permitted Liens
described in clause (a) of the definition of such term, or in the case of Sale
Leaseback Assets, Permitted Liens described in clauses (a) and (d) of the
definition of such term.
(g) Indebtedness. Schedule 6.1(g) is, as of the Agreement Date, a
complete and correct listing of all Indebtedness of the Company and its
Subsidiaries, including all guaranties of the Company and its Subsidiaries and
all letters of credit and acceptance facilities extended to the Company or any
Subsidiary.
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(h) Material Contracts. Schedule 6.1(h) is a true, correct and
complete listing of all Material Contracts as of Agreement Date.
(i) Litigation. There are no actions, suits or proceedings
pending (nor, to the knowledge of the Company or any Subsidiary, are there any
actions, suits or proceedings threatened, nor is there any basis therefor)
against or in any other way relating adversely to or affecting the Company or
any Subsidiary or any of its respective property in any court or before any
arbitrator of any kind or before or by any other Governmental Authority which
is reasonably likely to be adversely determined and result in a Material
Adverse Effect, and there are no strikes, slow downs, work stoppages or
walkouts or other labor disputes in progress or threatened relating to the
Company or any Subsidiary.
(j) Taxes. All federal, state and other tax returns of the
Company and its Subsidiaries required by Applicable Law to be filed have been
duly filed, and all federal, state and other taxes, assessments and other
governmental charges or levies upon the Company and any of its Subsidiaries and
their respective properties, income, profits and assets which are due and
payable have been paid, except any such nonpayment which is at the time
permitted under Section 7.6. None of the United States income tax returns of
the Company and its Subsidiaries are under audit as of Agreement Date. All
charges, accruals and reserves on the books of the Company and each of its
Subsidiaries in respect of any taxes or other governmental charges are in
accordance with GAAP.
(k) Financial Statements: No Material Adverse Change. The
Company has furnished to each Lender copies of (i) the audited consolidated
balance sheets of the predecessors to the Company and its consolidated
Subsidiaries for the fiscal year ending December 31, 1996, and the related
consolidated statements of income, retained earnings and cash flow for the
fiscal year ending on such date, with the opinions thereon of ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇
& ▇▇▇▇▇, P.C., and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇, LLP, and (ii) the unaudited consolidated
balance sheets of the predecessors to the Company and its consolidated
Subsidiaries for the fiscal quarter ending September 30, 1997, and the related
consolidated statements of income, retained earnings and cash flow of such
predecessors for the fiscal quarter period ending on such date. Such balance
sheets and statements (including in each case related schedules and notes)
present fairly, in accordance with GAAP consistently applied throughout the
periods involved, the consolidated financial position of such predecessors as
at their respective dates and the results of operations and the cash flow for
such periods (subject, as to interim statements, to changes resulting from
normal year-end audit adjustments). Neither the Company nor any of its
Subsidiaries has on the Agreement Date any material contingent liabilities,
liabilities, liabilities for taxes, unusual or long-term commitments or
unrealized or forward anticipated losses from any unfavorable commitments,
except as referred to or reflected or provided for in said financial
statements. Since December 31, 1996, there has been no material adverse change
in the consolidated financial condition, results of operations, business or
prospects of the Company and its Subsidiaries taken as a whole. Each of the
Company and its Subsidiaries is Solvent.
(l) ERISA. Each member of the ERISA Group has fulfilled its
obligations under the minimum funding standards of ERISA and the Internal
Revenue Code with respect to each Plan
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and is in compliance with the presently applicable provisions of ERISA and the
Internal Revenue Code with respect to each Plan except for noncompliances which
would not, individually or in the aggregate, cause a Default or an Event of
Default or have a Material Adverse Effect. No member of the ERISA Group has
(i) sought a waiver of the minimum funding standard under Section 412 of the
Internal Revenue Code in respect of any Plan, (ii) failed to make any
contribution or payment to any Plan or Multiemployer Plan or in respect of any
Benefit Arrangement, or made any amendment to any Plan or Benefit Arrangement,
which has resulted or could result in the imposition of a Lien or the posting
of a bond or other security under ERISA or the Internal Revenue Code or (iii)
incurred any liability under Title IV of ERISA other than a liability to the
PBGC for premiums under Section 4007 of ERISA.
(m) Absence of Defaults. Neither the Company nor any Material
Subsidiary is in default under its articles of incorporation, bylaws,
partnership agreement or other similar organizational documents, and no event
has occurred, which has not been remedied, cured or waived: (i) which
constitutes a Default or an Event of Default; or (ii) which constitutes, or
which with the passage of time, the giving of notice, a determination of
materiality, the satisfaction of any condition, or any combination of the
foregoing, would constitute, a default or event of default by the Company or
any Subsidiary under any Indebtedness, Material Contract, any other agreement
(other than this Agreement) or judgment, decree or order to which the Company
or any Subsidiary is a party or by which the Company or any Subsidiary or any
of their respective properties may be bound where such default or event of
default could, individually or in the aggregate, have a Material Adverse
Effect.
(n) Environmental Laws. The Company and its Subsidiaries have
obtained all Governmental Approvals which are required under Environmental
Laws, and are in compliance with all terms and conditions of such Governmental
Approvals, which the failure to obtain or to comply with could reasonably be
expected to have a Material Adverse Effect. Each of the Company and its
Subsidiaries is also in compliance with all other limitations, restrictions,
conditions, standards, prohibitions, requirements, obligations, schedules, and
timetables contained in the Environmental Laws the failure with which to comply
could have a Material Adverse Effect. Neither the Company nor any Subsidiary
is aware of, or has received notice of, any past, present, or future events,
conditions, circumstances, activities, practices, incidents, actions, or plans
which, with respect to the Company or any of its Subsidiaries may interfere
with or prevent compliance or continued compliance with Environmental Laws, or
may give rise to any common-law or legal liability, or otherwise form the basis
of any claim, action, demand, suit, proceeding, hearing, study, or
investigation, based on or related to the manufacture, processing,
distribution, use, treatment, storage, disposal, transport or handling or the
emission, discharge, release or threatened release into the environment, of any
pollutant, contaminant, chemical, or industrial, toxic, or other Hazardous
Material that could be reasonably expected to have a Material Adverse Effect;
and there is no civil, criminal, or administrative action, suit, demand, claim,
hearing, notice, or demand letter, notice of violation, investigation, or
proceeding pending or, to the knowledge of the Company or any Subsidiary, after
due inquiry, threatened, against the Company or any of its Subsidiaries
relating in any way to Environmental Laws that could be reasonably expected to
have a Material Adverse Effect.
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(o) Investment Company; Public Utility Holding Company. Each of
the Company and SBLC is a "business development company" within the meaning of
the Investment Company Act. Neither the Company nor any Subsidiary is (i) 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," within the meaning of the Public Utility Holding Company Act of 1935,
as amended, or (ii) except for other Subsidiaries that are business development
companies, subject to any other Applicable Law which purports to regulate or
restrict its ability to borrow money or to consummate the transactions
contemplated by this Agreement or to perform its obligations under any Loan
Document to which it is a party.
(p) Margin Stock. Neither the Company nor any Subsidiary is
engaged principally, or as one of its important activities, in the business of
extending credit for the purpose, whether immediate, incidental or ultimate, of
buying or carrying "margin stock" within the meaning of Regulations G and U of
the Board of Governors of the Federal Reserve System.
(q) Affiliate Transactions. Except as permitted by Section 9.10,
neither the Company nor any Subsidiary is a party to or bound by any agreement
or arrangement (whether oral or written) to which any Affiliate of the Company
or any Subsidiary is a party. Neither the Company nor any Subsidiary is a
party to any agreement or arrangement which restricts or prohibits the payment
of dividends or the repayment of inter-company loans by a Subsidiary to the
Company, except for SBA approval of dividends paid by SBIC and SSBIC, which the
Company has no reason to believe will not be granted by the SBA.
(r) Intellectual Property. The Company and each Subsidiary owns
or has the right to use, under valid license agreements or otherwise, all
patents, licenses, franchises, trademarks, trademark rights, trade names, trade
name rights, trade secrets and copyrights (collectively, "Intellectual
Property") used in the conduct of its businesses as now conducted and as
contemplated by the Loan Documents, which the failure to own or have the right
to use could reasonably be expected to have a Material Adverse Effect, without
known conflict with any patent, license, franchise, trademark, trade secret,
trade name, copyright, or other proprietary right of any other Person.
(s) Accuracy and Completeness of Information. All written
information, reports and other papers and data furnished to the Managing Agent
or any Lender by, on behalf of, or at the direction of, the Company or any
Subsidiary were, at the time the same were so furnished, complete and correct
in all material respects, to the extent necessary to give the recipient a true
and accurate knowledge of the subject matter, or, in the case of financial
statements, present fairly, in accordance with GAAP consistently applied
throughout the periods involved, the financial position of the Persons involved
as at the date thereof and the results of operations for such periods. As of
the Agreement Date, no fact is known to the Company or any Subsidiary which has
had, or may in the future have (so far as the Company or any Subsidiary can
reasonably foresee), a Material Adverse Effect which has not been set forth in
the financial statements referred to in Section 6.1(k) or in such information,
reports or other papers or data or otherwise disclosed in writing to the
Managing Agent and the Lenders prior to the Effective Date. No document
furnished or written statement made to the Managing Agent or any Lender
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in connection with the negotiation, preparation of execution of this Agreement
or any of the other Loan Documents contains or will contain any untrue
statement of a fact material to the creditworthiness of the Company or any
Subsidiary or omits or will omit to state a material fact necessary in order to
make the statements contained therein not misleading. Notwithstanding the
first and third sentences of this Section 6.1(s), as to projected financial
information, each Borrower represents and warrants only that such information,
at the time furnished to the Managing Agent or any Lender, was prepared in good
faith based on reasonable assumptions under the circumstances.
(t) RIC and REIT Status. The Company is a RIC. REIT qualifies
for treatment as a "real estate investment trust" under the Internal Revenue
Code.
(u) Not Plan Assets. The assets of the Company or any Subsidiary
do not and will not constitute "plan assets," within the meaning of ERISA, the
Internal Revenue Code and the respective regulations promulgated thereunder.
The execution, delivery and performance of this Agreement, and the borrowing
and repayment of amounts hereunder, do not and will not constitute "prohibited
transactions" under ERISA or the Internal Revenue Code.
(v) Business. As of the Agreement Date, the Company and its
Subsidiaries are substantially engaged in the businesses described in the
Proxy.
(w) Borrowing Base Assets. At the time it is initially included
in a Borrowing Base, each Borrowing Base Asset:
(i) is owned by a Borrower, or in the case of
Subordinated CMBS Tranches, by the QRS, or in the case of Sale
Leaseback Assets, by a Real Estate Sub, free and clear of all Liens;
(ii) represents the valid, binding and enforceable
obligation of each Obligor with respect thereto;
(iii) complies in all material aspects with all Applicable
Laws relating thereto;
(iv) is not subject to any restriction or prohibition on
the assignment, pledge or transfer thereof; and
(v) satisfies all Eligibility Requirements.
(x) Year 2000 Compliance. The Company has (i) initiated a review
and assessment of all areas within its and each of its Subsidiaries' business
and operations (including those affected by suppliers and vendors) that could
be adversely affected by the "Year 2000 Problem" (that is, the risk that
computer applications used by the Company or any of its Subsidiaries (or
suppliers and vendors) may be unable to recognize and perform properly
date-sensitive functions involving certain dates prior to and any date after
December 31, 1999), (ii) developed a plan and timeline for addressing the Year
2000 Problem on a timely basis, and (iii) to date, implemented that plan in
accordance with that timetable. The Company believes that all computer
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applications (including those of its suppliers and vendors) that are material
to its or any of its Subsidiaries' business and operations will on a timely
basis be able to perform properly date-sensitive functions for all dates before
and after January 1, 2000 (that is, be "Year 2000 compliant"), except to the
extent that a failure to do so could not reasonably be expected to have
Material Adverse Effect.
SECTION 6.2. SURVIVAL OF REPRESENTATIONS AND WARRANTIES, ETC.
All statements contained in any certificate, financial statement or
other instrument delivered by or on behalf of the Company or any Subsidiary to
an Agent or any Lender pursuant to or in connection with this Agreement or any
of the other Loan Documents (including, but not limited to, any such statement
made in or in connection with any amendment thereto or any statement contained
in any certificate, financial statement or other instrument delivered by or on
behalf of the Company, REIT or SBLC prior to the Agreement Date and delivered
to an Agent or any Lender in connection with closing the transactions
contemplated hereby) shall constitute representations and warranties made by
the Borrowers under this Agreement. All representations and warranties made
under this Agreement and the other Loan Documents shall be deemed to be made at
and as of the Agreement Date, the Effective Date and at and as of the date of
the occurrence of any Credit Event, except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate on and as of such earlier date) and except for changes in factual
circumstances specifically permitted hereunder. All such representations and
warranties shall survive the effectiveness of this Agreement, the execution and
delivery of the Loan Documents and the making of the Loans.
ARTICLE 7
AFFIRMATIVE COVENANTS
For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.7, all of the Lenders) shall
otherwise consent in the manner provided for in Section 12.7, each Borrower
shall:
SECTION 7.1. PRESERVATION OF EXISTENCE AND SIMILAR MATTERS.
Except as otherwise permitted under Section 9.7, preserve and
maintain, and the Company shall cause each Material Subsidiary to preserve and
maintain, its respective existence, rights, franchises, licenses and privileges
in the jurisdiction of its incorporation or formation and qualify and remain
qualified and authorized to do business in each jurisdiction in which the
character of its properties or the nature of its business requires such
qualification and authorization and where the failure to be so authorized and
qualified could have a Material Adverse Effect.
SECTION 7.2. COMPLIANCE WITH APPLICABLE LAW AND MATERIAL CONTRACTS.
Comply, and the Company shall cause each Material Subsidiary to
comply, with (a) all Applicable Law, including the obtaining of all
Governmental Approvals, the failure with which
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to comply could have a Material Adverse Effect, and (b) all terms and
conditions of all Material Contracts to which it is a party.
SECTION 7.3. MAINTENANCE OF PROPERTY.
In addition to the requirements of any of the other Loan Documents,
(a) protect and preserve, and the Company shall cause each Material Subsidiary
to protect and preserve, all of its material properties, including, but not
limited to, all Intellectual Property, and maintain in good repair, working
order and condition all tangible properties, ordinary wear and tear excepted,
and (b) from time to time make or cause to be made all needed and appropriate
repairs, renewals, replacements and additions to such properties, so that the
business carried on in connection therewith may be properly and effectively
conducted at all times.
SECTION 7.4. CONDUCT OF BUSINESS.
Together with its Subsidiaries, at all times carry on their business
described in the Proxy.
SECTION 7.5. INSURANCE.
In addition to the requirements of any of the other Loan Documents,
maintain, and the Company shall cause each Material Subsidiary to maintain,
insurance with financially sound and reputable insurance companies against such
risks and in such amounts as is customarily maintained by Persons engaged in
similar businesses or as may be required by Applicable Law.
SECTION 7.6. PAYMENT OF TAXES AND CLAIMS.
Pay or discharge, and the Company shall cause each Material Subsidiary
to pay and discharge, when due (a) all taxes, assessments and governmental
charges or levies imposed upon it or upon its income or profits or upon any
properties belonging to it, and (b) all lawful claims of materialmen,
mechanics, carriers, warehousemen and landlords for labor, materials, supplies
and rentals which, if unpaid, might become a Lien on any properties of such
Person; provided, however, that this Section shall not require the payment or
discharge of any such tax, assessment, charge, levy or claim which is being
contested in good faith by appropriate proceedings which operate to suspend the
collection thereof and for which adequate reserves have been established on the
books of such Borrower or such Subsidiary, as applicable, in accordance with
GAAP.
SECTION 7.7. VISITS AND INSPECTIONS.
Permit, and the Company shall cause each Material Subsidiary to
permit, representatives or agents of the Managing Agent or any Lender, from
time to time, as often as may be reasonably requested and at the expense of the
Managing Agent (unless an Event of Default shall be continuing in which case
the exercise by the Managing Agent of its rights under this Section shall be at
the expense of the Company) or such Lender, but only during normal business
hours, to: (a) visit and inspect all properties of such Borrower and each
Material Subsidiary; (b) inspect and make extracts from their respective books
and records, including but not limited to management letters prepared by
independent accountants; and (c) discuss with its principal
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officers, and its independent accountants, its business, assets, liabilities,
financial conditions, results of operations and business prospects. If
requested by the Managing Agent, the Company shall execute an authorization
letter addressed to its accountants authorizing the Managing Agent or any
Lender to discuss the financial affairs of the Company and any Material
Subsidiary with its accountants.
SECTION 7.8. USE OF PROCEEDS.
Use the proceeds of Loans for working capital and general corporate
purposes, including without limitation, the origination and interim warehousing
of Eligible Assets. The Borrowers shall not, and the Company shall not permit
any Subsidiary to, use any part of such proceeds to purchase or carry, or to
reduce or retire or refinance any credit incurred to purchase or carry, any
margin stock (within the meaning of Regulations U and X of the Board of
Governors of the Federal Reserve System) or to extend credit to others for the
purpose of purchasing or carrying any such margin stock.
SECTION 7.9. ENVIRONMENTAL MATTERS.
Comply, and the Company shall cause all of its Subsidiaries to comply,
with all Environmental Laws, the failure with which to comply could have a
Material Adverse Effect. If a Borrower or any Subsidiary shall (a) receive
notice that any violation of any Environmental Law may have been committed or
is about to be committed by such Person, (b) receive notice that any
administrative or judicial complaint or order has been filed or is about to be
filed against a Borrower or any Subsidiary alleging violations of any
Environmental Law or requiring the Borrower or any Subsidiary to take any
action in connection with the release of Hazardous Materials, or (c) receive
any notice from a Governmental Authority or private party alleging that a
Borrower or any Subsidiary may be liable or responsible for costs associated
with a response to or cleanup of a release of a Hazardous Materials or any
damages caused thereby, and such notices, individually or in the aggregate,
could have a Material Adverse Effect, such Borrower shall provide the Managing
Agent with a copy of such notice within 10 days after the receipt thereof by
such Borrower or any of the Subsidiaries. The Borrowers and the Subsidiaries
shall promptly take all actions necessary to prevent the imposition of any
Liens on any of their respective properties arising out of or related to any
Environmental Laws.
SECTION 7.10. BOOKS AND RECORDS.
Maintain, and the Company shall cause each of the Subsidiaries to
maintain, books and records pertaining to its business operations in such
detail, form and scope as is consistent with good business practice in
accordance with GAAP.
SECTION 7.11. STATUS OF RIC AND BDC.
At all times maintain its status as a RIC under the Internal Revenue
Code and as a "business development company" under the Investment Company Act,
and cause REIT to maintain its status as a real estate investment trust under
the Internal Revenue Code.
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SECTION 7.12. ERISA EXEMPTIONS.
Not, and the Company shall not permit any Subsidiary to, permit any of
its respective assets to become or be deemed to be "plan assets" within the
meaning of ERISA, the Internal Revenue Code and the respective regulations
promulgated thereunder.
SECTION 7.13. FURTHER ASSURANCES.
At the Company's cost and expense, upon the request of the Managing
Agent, duly execute and deliver or cause to be duly executed and delivered, to
the Managing Agent and the Lenders such further instruments, documents and
certificates, and do and cause to be done such further acts that may be
necessary or advisable in the opinion of the Managing Agent to carry out more
effectively the provisions and purposes of this Agreement and the other Loan
Documents.
SECTION 7.14. BORROWING SUBSIDIARIES.
If SBLC, SBIC or SSBIC obtains a loan or advance from the Company
after the Agreement Date (which loan or advance shall be in compliance with the
limitations set forth in Sections 9.2(a) or 9.2(b), as applicable), within
three Business Days after receiving such loan or advance, deliver to the
Managing Agent each of the following in form and substance satisfactory to the
Managing Agent: (a) a Guaranty executed by such Subsidiary in the amount of
its borrowing from the Company and (b) the items that would have been delivered
under Sections 5.l(a)(iii) through (vii) if such Subsidiary had been a Borrower
on the Agreement Date.
SECTION 7.15. YEAR 2000 COMPLIANCE.
The Company will promptly notify the Bank in the event the Company
discovers or determines that any computer application (including those of its
suppliers and vendors) that is material to its or any of its Subsidiaries'
business and operations will not be Year 2000 compliant, except to the extent
that such failure could not reasonably be expected to have a Material Adverse
Effect.
ARTICLE 8
INFORMATION
For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.7, all of the Lenders) shall
otherwise consent in the manner set forth in Section 12.7, the Company shall
furnish to each Lender (or to the Managing Agent if so provided below) at its
Lending Office:
SECTION 8.1. QUARTERLY FINANCIAL STATEMENTS.
As soon as available and in any event within 45 days after the close
of each of the first, second and third fiscal quarters of the Company, the
consolidated and consolidating balance sheets of the Company and its
Subsidiaries as at the end of such period and the related consolidated and
consolidating statements of income, retained earnings and cash flows of the
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Company and its Subsidiaries for such period, setting forth in each case in
comparative form the figures for the corresponding periods of the previous
fiscal year, all of which shall be certified by the chief financial officer of
the Company, in his or her opinion, to present fairly, in accordance with GAAP,
the consolidated financial position of the Company and its Subsidiaries as at
the date thereof and the results of operations for such period (subject to
normal year-end audit adjustments).
SECTION 8.2. YEAR-END STATEMENTS.
As soon as available and in any event within 90 days after the end of
each fiscal year of the Company, the consolidated and consolidating balance
sheets of the Company and its Subsidiaries as at the end of such fiscal year
and the related consolidated and consolidating statements of income, retained
earnings and cash flows of the Company and its Subsidiaries for such fiscal
year, setting forth in comparative form the figures as at the end of and for
the previous fiscal year, all of which shall be certified by (a) the chief
financial officer of the Company, in his or her opinion, to present fairly, in
accordance with GAAP, the financial position of the Company and its
Subsidiaries as at the date thereof and the result of operations for such
period and (b) independent certified public accountants of recognized national
standing acceptable to the Requisite Lenders, whose certificate shall be
unqualified and in scope and substance satisfactory to the Requisite Lenders
and who shall have authorized the Company to deliver such financial statements
and certification thereof to the Managing Agent and the Lenders pursuant to
this Agreement.
SECTION 8.3. COMPLIANCE CERTIFICATE; BORROWING BASE CERTIFICATE.
(a) At the time the financial statements are furnished pursuant to
Sections 8.1 and 8.2, a certificate in the form of Exhibit H (a "Compliance
Certificate") executed by the chief financial officer of the Company: (a)
setting forth in reasonable detail as at the end of such quarterly accounting
period or fiscal year, as the case may be, the calculations required to
establish whether or not the Company, and its Subsidiaries, were in compliance
with the covenants contained in Sections 9.1, 9.2(a)(4), 9.2(b)(3), 9.2(b)(4),
and 9.4(d), (b) stating that, to the best of his or her knowledge, information
and belief, no Default or Event of Default exists, or, if such is not the case,
specifying such Default or Event of Default and its nature, when it occurred
and whether it is continuing and the steps being taken by the Company with
respect to such event, condition or failure. At the time the financial
statements are furnished pursuant to Section 8.2, the Company will deliver to
the Lenders a certificate of the independent accountants performing the audit
of such financial statements to the effect that, in making such audit, nothing
came to their attention that caused them to believe that any Borrower or its
Subsidiaries failed to comply with any of the terms, covenants, provisions or
conditions contained in this Agreement insofar as they relate to financial
matters. Such accountants, however, shall not be liable to any Person by
reason of their failure to obtain knowledge of any Event of Default or Default
which would not be disclosed in the course of an audit conducted in accordance
with GAAP.
(b) Within 15 days after the end of each calendar month,
certificates of the Company and SBLC, in the forms of Exhibits I-1 and I-2,
respectively (each a "Borrowing Base
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Certificate"), executed by the chief financial officer of the Company, and
setting forth a calculation of the Borrowing Base of each such Borrower as of
the end of such calendar month, and accompanied by an asset listing and a past
due report with respect to the Eligible Assets, in form and scope acceptable to
the Requisite Lenders.
(c) Within 45 days after the end of each fiscal quarter, a
schedule of gains and losses and a valuation report with respect to the
Eligible Assets, as of the end of such fiscal quarter, in form and scope
acceptable to the Requisite Lenders.
SECTION 8.4. OTHER INFORMATION.
(a) Not later than 90 days prior to the last day of each fiscal
year of the Company, pro forma projected consolidated and consolidating
financial statements for the Company and its Subsidiaries reflecting the
forecasted financial condition and results of operations of the Company and its
Subsidiaries on a quarterly basis for the next succeeding year, accompanied by
calculations establishing whether or not the Company would be in compliance on
a pro forma basis with the covenants contained in Section 9.1, in each case in
form and detail reasonably acceptable to the Requisite Lenders;
(b) promptly upon receipt thereof, copies of all reports, if any,
submitted to the Company or its Board of Directors by its independent public
accountants including, without limitation, any management report;
(c) within five Business Days of the filing thereof, copies of all
registration statements (other than the exhibits thereto and any registration
statements on Form S-8 or its equivalent), reports on Forms 10-K, 10-Q and 8-K
(or their equivalents) and all other periodic reports which the Company shall
file with the Securities and Exchange Commission (or any Governmental Authority
substituted therefor) or any national securities exchange;
(d) promptly upon the mailing thereof to the shareholders of the
Company generally, copies of all financial statements, reports and proxy
statements so mailed and promptly upon the issuance thereof copies of all press
releases issued by the Company;
(e) if and when any member of the ERISA Group (i) gives or is
required to give notice to the PBGC of any "reportable event" (as defined in
Section 4043 of ERISA) with respect to any Plan which might constitute grounds
for a termination of such Plan under Title IV of ERISA, or knows that the plan
administrator of any Plan has given or is required to give notice of any such
reportable event, a copy of the notice of such reportable event given or
required to be given to the PBGC; (ii) receives notice of complete or partial
withdrawal liability under Title IV of ERISA or notice that any Multiemployer
Plan is in reorganization, is insolvent or has been terminated, a copy of such
notice; (iii) receives notice from the PBGC under Title IV of ERISA of an
intent to terminate, impose liability (other than for premiums under Section
4007 of ERISA) in respect of, or appoint a trustee to administer any Plan, a
copy of such notice; (iv) applies for a waiver of the minimum funding standard
under Section 412 of the Internal Revenue Code, a copy of such application; (v)
gives notice of intent to terminate any Plan under Section 4041(c) of ERISA, a
copy of such notice and other information filed with the PBGC;
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(vi) gives notice of withdrawal from any Plan pursuant to Section 4063 of
ERISA, a copy of such notice; or (vii) fails to make any payment or
contribution to any Plan or Multiemployer Plan or in respect of any Benefit
Arrangement or makes any amendment to any Plan or Benefit Arrangement which has
resulted or could result in the imposition of a Lien or the posting of a bond
or other security, a certificate of the controller of the Company setting forth
details as to such occurrence and action, if any, which the Company or
applicable member of the ERISA Group is required or proposes to take;
(f) to the extent the Company or any Subsidiary is aware of the
same, prompt notice of the commencement of any proceeding or investigation by
or before any Governmental Authority and any action or proceeding in any court
or other tribunal or before any arbitrator against or in any other way relating
adversely to, or adversely affecting, the Company or any Subsidiary or any of
their respective properties, assets or businesses which, if determined or
resolved adversely to such Person, could have a Material Adverse Effect, and
prompt notice of the receipt of notice that any United States income tax
returns of the Company or any of its Subsidiaries are being audited;
(g) to the extent not previously delivered hereunder, a copy of
the articles of incorporation, bylaws, partnership agreement or other similar
organizational documents of the Company, REIT, the QRS, or any Material
Subsidiary, and any amendment thereto, in each case within five Business Days
of the effectiveness thereof;
(h) prompt notice of any change in the business, assets,
liabilities, financial condition, results of operations or business prospects
of the Company or any Subsidiary which has had or may have Material Adverse
Effect,
(i) prompt notice of the occurrence of any Default or Event of
Default or any event which constitutes or which with the passage of time, the
giving of notice, or otherwise, would constitute a default or event of default
by the Company or any Subsidiary under any Material Contract to which any such
Person is a party or by which any such Person or any of its respective
properties may be bound;
(j) prompt notice of any order, judgment or decree in excess of
$5,000,000 having been entered against the Company or any Subsidiary or any of
their respective properties or assets;
(k) prompt notice of the acquisition, incorporation or other
creation of any Subsidiary, the purpose for such Subsidiary, the nature of the
assets and liabilities thereof and whether such Subsidiary is a Material
Subsidiary;
(l) notice of any Person becoming a Material Subsidiary within two
Business Days of the determination thereof;
(m) prompt notice of any strikes, slow downs, work stoppages or
walkouts or other labor disputes in progress or threatened relating to the
Company or any Subsidiary;
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(n) promptly upon entering into any Material Contract after the
Agreement Date, a copy to the Managing Agent of such Material Contract; and
(o) from time to time and promptly upon each request, such data,
certificates, reports, statements, opinions of counsel, documents or further
information regarding the business, assets, liabilities, financial condition,
results of operations or business prospects of the Company or any of its
Material Subsidiaries as the Managing Agent or any Lender may reasonably
request.
ARTICLE 9
NEGATIVE COVENANTS
For so long as this Agreement is in effect, unless the Requisite
Lenders (or, if required pursuant to Section 12.7, all of the Lenders) shall
otherwise consent in the manner set forth in Section 12.7, the Borrowers shall
not, directly or indirectly:
SECTION 9.1. FINANCIAL COVENANTS.
Permit:
(a) Ratio of Indebtedness to Tangible Net Worth. The ratio of (i)
the Indebtedness of the Company and its Subsidiaries determined on a
consolidated basis to (ii) Tangible Net Worth, to exceed 1.00 to 1.00 at the
end of any fiscal quarter.
(b) Ratio of Indebtedness and Securitized Debt to Tangible Net
Worth. The ratio of (i) the Indebtedness of the Company and its Subsidiaries
determined on a consolidated basis plus Securitized Debt to (ii) Tangible Net
Worth, to exceed 2.00 to 1.00 at the end of any fiscal quarter.
(c) Minimum Tangible Net Worth. The Tangible Net Worth of the
Company and its Subsidiaries determined on a consolidated basis to be less than
(i) $375,000,000 plus (ii) 75% of the Net Proceeds of all Equity Issuance
effected by the Company or any of its Subsidiaries at any time after the
Agreement Date (excluding the Net Proceeds of any Equity Issuance by a
Subsidiary to a Subsidiary or to the Company).
(d) Ratio of Adjusted EBIT to Interest Expense. The ratio of (i)
the Adjusted EBIT as of the end of each fiscal quarter to (ii) Interest Expense
of the Company and its Subsidiaries determined on a consolidated basis for such
fiscal quarter, to be less than 1.50 to 1.00 at the end of such fiscal quarter.
(e) Ratio of Adjusted EBIT to Pro Forma Debt Service. The ratio
of (i) Adjusted EBIT of the Company and its Subsidiaries determined on a
consolidated basis for the 12-month period ending as of the fiscal quarter most
recently ending to (ii) Pro Forma Debt Service for the next succeeding 12-month
period, to be less than 1.25 to 1.00 at the end of such fiscal quarter.
(f) Mass Mutual Covenants. A violation of the terms of Sections
5.6, 5.7 or 5.8 of the Mass Mutual Agreement, through and including the date on
which such terms shall either
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cease to be binding upon the Company or shall be amended so as to no longer be
more restrictive than the terms of Sections 9.1(c) and (d) above.
SECTION 9.2. INDEBTEDNESS.
(a) Create, incur, assume, or permit or suffer to exist, or permit
any Subsidiary other than SBLC or REIT to create incur, assume, or permit or
suffer to exist, any Indebtedness other than the following:
(1) the Obligations;
(2) Indebtedness set forth on Schedule 6.1(g), provided
that the terms of any such Indebtedness shall not be amended to
provide for covenants or borrowing base limitations that are more
restrictive than those contained in this Agreement, except that
Secured Indebtedness may be subject to more restrictive covenants
concerning the collateral therefor;
(3) Subordinated Debt;
(4) intercompany Indebtedness among the Company and such
Subsidiaries; provided however, that (i) the obligations of each
Borrower and Guarantor with respect to such intercompany Indebtedness
shall be subordinate to the Obligations on terms acceptable to the
Requisite Lenders in their sole discretion; (ii) the obligations of
SBIC and SSBIC to the Company (excluding those set forth on Schedule
6.1(g)) shall not exceed $10,000,000 in the aggregate at any one time
outstanding; (iii) the Company shall comply with the provisions of
Section 7.14; and (iv) the obligations of any such Subsidiary other
than SBLC, SBIC, and SSBIC shall be evidenced by promissory notes,
which shall have been pledged to the Managing Agent, for the benefit
of the Lenders, as security for the Obligations;
(5) Indebtedness arising as a result of Contingent
Obligations permitted under Section 9.3 or purchase money Indebtedness
permitted under Section 9.5; and
(6) other Indebtedness incurred or assumed after the
Agreement Date in the ordinary course of business to purchase, carry,
acquire or refinance Investments so long as immediately prior to the
incurring or assumption thereof, and immediately thereafter and after
giving effect thereto, (i) no Default or Event of Default is or would
be in existence, including without limitation, a Default or Event of
Default resulting from a violation of any of the covenants contained
in Section 9.1, and (ii) such Indebtedness of a Borrower or a
Guarantor shall not be subject to any covenants or borrowing base
limitations that are more restrictive than those contained in this
Agreement, provided that Secured Indebtedness may be subject to more
restrictive covenants concerning the collateral therefor.
(b) Permit REIT or SBLC to create, incur, assume or permit to
suffer or exist any Indebtedness, other than (1) Indebtedness set forth on
Schedule 6.1(g), (2) Indebtedness under
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the Loan Documents, (3) loans or advances from the Company to SBLC, for general
corporate purposes, not to exceed $10,000,000 in the aggregate at any time
outstanding, subordinated to the Obligations on terms acceptable to the
Requisite Lenders, and the Company shall comply with the provisions of Section
7.14 with regard to such loans or advances to SBLC, and (4) Indebtedness of the
Company secured by Commercial Mortgage Loans transferred by the Company to REIT
and assumed by REIT in contemplation of a securitization transaction, provided
that such Indebtedness is repaid within 21 days of such assumption with the
proceeds of such securitization transaction.
SECTION 9.3. CONTINGENT OBLIGATIONS.
Become or remain liable, or permit any Subsidiary to become or remain
liable, on or under any Contingent Obligation other than the following:
(a) Contingent Obligations in existence as of the Agreement Date
and set forth in Schedule 9.3;
(b) Contingent Obligations resulting from endorsement of
negotiable instruments for collection in the ordinary course of business;
(c) Contingent Obligations under Interest Rate Agreements (i) with
respect to the Loans and (ii) indexed to interest rates or yields on United
States Treasury Bills or Notes with respect to other Indebtedness incurred or
anticipated to be incurred by the Borrower or any of its Subsidiaries;
(d) Contingent Obligations incurred in the ordinary course of
business with respect to surety and appeal bonds, performance and
return-of-money bonds and other similar obligations;
(e) Contingent Obligations under letters of credit issued for
customers in the ordinary course of business; and
(f) Contingent Obligations incurred in the ordinary course of
business under foreign currency swap agreements for net Investments in foreign
Persons.
SECTION 9.4. INVESTMENTS.
Acquire, make or purchase after the Agreement Date any Investment
other than the following:
(a) intercompany Indebtedness among the Company and its
Subsidiaries provided that such Indebtedness is permitted by the terms
of Section 9.2;
(b) the transfer of Commercial Mortgage Loans to REIT in
connection with a securitization transaction;
(c) Portfolio Investments; and
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(d) other Investments not to exceed $74,000,000 in the
aggregate at any one time outstanding.
SECTION 9.5. LIENS; AGREEMENTS REGARDING LIENS; OTHER MATTERS.
(a) Create, assume, or incur, or permit or suffer to exist, or
permit any Material Subsidiary to create, incur, assume or permit or suffer to
exist, any Lien upon any of its assets, including, without limitation, the
equity interests of the Company in its Subsidiaries, other than:
(1) the Permitted Liens;
(2) Liens arising in connection with purchase money
Indebtedness, conditional sale agreements and Capitalized Lease
Obligations incurred for the acquisition of furniture, fixtures,
equipment or leasehold improvements in the ordinary course of
business;
(3) Liens in existence on the date hereof and securing
the Indebtedness described as being secured on Schedule 6.1(g);
(4) Liens permitted by Section 9.2(b)(4); and
(5) Liens on assets other than the Borrowing Base Assets
and equity interests in Subsidiaries to secure Indebtedness permitted
by Section 9.2(a).
(b) Enter into, assume or otherwise be bound by, or permit any
Subsidiary to enter into, assume or otherwise be bound by, any agreement (other
than the Loan Documents, the Mass Mutual Agreement and the OPIC Agreement)
prohibiting the creation or assumption of any Lien upon Borrowing Base Assets;
or
(c) Except for SBA consents that may be required for SBIC and
SSBIC, create or otherwise cause or suffer to exist or become effective, or
permit any Subsidiary to create or otherwise cause or suffer to exist or become
effective, any consensual encumbrance or restriction of any kind on the ability
of any Subsidiary to: (i) pay dividends or make any other distribution on any
of such Subsidiary's capital stock or other equity interests owned by the
Company or any other Subsidiary of the Company; (ii) pay any Indebtedness owed
to the Company or any other Subsidiary; (iii) make loans or advances to the
Company or any other Subsidiary; or (iv) transfer any of its property or assets
to the Company or any other Subsidiary.
SECTION 9.6. DISTRIBUTIONS TO SHAREHOLDERS.
If an Event of Default specified in Section 10.1(a) or Section 10.1(b)
occurs and is not cured within ten (10) Business Days thereafter, if a Default
or an Event of Default specified in Section 10.1(f) or Section 10.1(g) shall
have occurred and be continuing, or if as a result of the occurrence of any
other Event of Default the Obligations have been accelerated pursuant to
Section 10.2(a), the Company shall not, and shall not permit any Borrower or
Guarantor to, make (a) any dividend or other distribution on account of any
capital stock or other equity interest of a
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Borrower or a Guarantor; (b) any acquisition for value of any capital stock or
other equity interest of a Borrower or a Guarantor; or (c) any payment made to
retire, or to obtain the surrender of, any outstanding warrants, options or
other rights to acquire any capital stock or other equity interest of a
Borrower or a Guarantor.
SECTION 9.7. MERGER, CONSOLIDATION AND SALES OF ASSETS.
(a) Enter into, or permit any Material Subsidiary to enter into,
any transaction of merger or consolidation; (b) liquidate, wind-up or dissolve
itself (or suffer any liquidation or dissolution) or permit any Material
Subsidiary to do any of the foregoing; or (c) convey, sell, lease, sublease,
transfer or otherwise dispose of, in one transaction or a series of
transactions, all or any substantial part of its business or assets, or the
capital stock of or other equity interests in any of its Material Subsidiaries,
whether now owned or hereafter acquired or permit any Material Subsidiary to do
any of the foregoing; provided, however, that:
(i) any Subsidiary of the Company may merge or
consolidate with (A) the Company, so long as the Company shall be the
surviving entity or (B) a Subsidiary of the Company;
(ii) a Subsidiary may sell, transfer or dispose of its
assets to the Company or a Wholly Owned Subsidiary of the Company;
(iii) a Subsidiary may liquidate provided that immediately
prior to such liquidation and immediately thereafter and after giving
effect thereto, no Default or Event of Default is or would be in
existence;
(iv) the Company or any Subsidiary may merge or
consolidate with any other corporation, provided that (A) the Company
or such Subsidiary shall be the continuing or surviving corporation
and (B) immediately prior to such merger or consolidation and
immediately thereafter and after giving effect thereto, no Default or
Event of Default is or would be in existence; and
(v) the Company may transfer Commercial Mortgage Loans to
REIT in connection with a securitization transaction, and such
Commercial Mortgage Loans may be transferred or sold to any direct or
indirect Wholly Owned Subsidiary of the REIT.
SECTION 9.8. FISCAL YEAR.
Change its fiscal year from that in effect as of the Agreement Date.
SECTION 9.9. MODIFICATIONS TO MATERIAL CONTRACTS.
Enter into, or permit any Subsidiary to enter into, any amendment or
modification to any Material Contract which could have a Material Adverse
Effect or default in the performance of any obligations of the Company or any
Subsidiary under any Material Contract or permit any Material Contract to be
canceled or terminated prior to its stated maturity.
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SECTION 9.10. TRANSACTIONS WITH AFFILIATES.
Permit to exist or enter into, and will not permit any of its
Subsidiaries to permit to exist or enter into, any transaction (including the
purchase, sale, lease or exchange of any property or the rendering of any
service) with any Affiliate of the Company or with any director, officer or
employee of the Company, any Subsidiary or any other Affiliate, except (i)
transactions involving consideration in aggregate amount for all such
transactions not in excess of $5,000,000 per fiscal year, (ii) Investments
permitted by Section 9.4, and (iii) transactions in the ordinary course of, and
pursuant to the reasonable requirements of the, business of the Company or any
of its Subsidiaries and upon fair and reasonable terms which are no less
favorable to the Company or such Subsidiary than would be obtained in a
comparable arm's length transaction with a Person that is not an Affiliate.
ARTICLE 10
DEFAULT
SECTION 10.1. EVENTS OF DEFAULT.
Each of the following shall constitute an Event of Default, whatever
the reason for such event and whether it shall be voluntary or involuntary or
be effected by operation of Applicable Law or pursuant to any judgment or order
of any Governmental Authority:
(a) Default in Payment of Principal. A Borrower shall fail to pay
when due (whether upon demand, at maturity, by reason of acceleration or
otherwise) the principal of any of the Loans.
(b) Default in Payment of Other Amounts. A Borrower shall fail to
pay when due any interest on any of the Loans or any of the other payment
Obligations (other than the principal of any Loan) owing by such Borrower under
this Agreement or any other Loan Document and such failure shall continue for a
period of three Business Days after the earlier of (i) the date upon which such
Borrower or any Subsidiary obtains knowledge of such failure or (ii) the date
upon which the Company has received written notice of such failure from the
Managing Agent.
(c) Default in Performance. (i) A Borrower or any Subsidiary
shall fail to perform or observe any term, covenant, condition or agreement on
its part to be performed or observed contained in Sections 7.11, 7.12, or
8.4(i) or in Article 9 or (ii) a Borrower or any Subsidiary shall fail to
perform or observe any term, covenant, condition or agreement contained in this
Agreement or any other Loan Document to which it is a party and not otherwise
mentioned in this Section and in the case of this clause (ii) such failure
shall continue for a period of 30 days after the earlier of (x) the date upon
which a Borrower obtains knowledge of such failure or (y) the date upon which
the Borrower has received written notice of such failure from the Managing
Agent.
(d) Misrepresentations. Any written statement, representation or
warranty made or deemed made by or on behalf of a Borrower or any Subsidiary
under this Agreement or under any other Loan Document, or any amendment hereto
or thereto, or in any other writing or
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statement at any time furnished or made or deemed made by or on behalf of a
Borrower or any Subsidiary to an Agent or any Lender in connection with this
Agreement or the other Loan Documents, shall at any time prove to have been
incorrect or misleading in any material respect when furnished or made.
(e) Indebtedness Cross-Default.
(i) A Borrower or any Subsidiary shall fail to pay when
due and payable the principal of, or interest on, any Indebtedness
(other than the Loans) or any Contingent Obligations having an
aggregate outstanding principal amount of $5,000,000 or more, or
(ii) the maturity of any Indebtedness (other than the
Loans) of a Borrower or any Subsidiary having an aggregate outstanding
principal amount of $5,000,000 or more shall have (x) been accelerated
in accordance with the provisions of any indenture, contract or
instrument evidencing, providing for the creation of or otherwise
concerning such Indebtedness or (y) been required to be prepaid prior
to the stated maturity thereof; or
(iii) any other event shall have occurred and be continuing
with respect to any Indebtedness (other than the Loans) of a Borrower
or any Subsidiary having an aggregate outstanding principal amount of
$10,000,000 or more which, with or without the passage of time, the
giving of notice, or otherwise, would permit any holder or holders of
such Indebtedness, any trustee or agent acting on behalf of such
holder or holders or any other Person, to accelerate the maturity of
any such Indebtedness or require any such Indebtedness to be prepaid
prior to its stated maturity.
(f) Voluntary Bankruptcy Proceeding. A Borrower, any Material
Subsidiary or any Other Relevant Subsidiary shall: (i) commence a voluntary
case under the Bankruptcy Code of 1978, as amended or other federal bankruptcy
laws (as now or hereafter in effect); (ii) file a petition seeking to take
advantage of any other Applicable Laws, domestic or foreign, relating to
bankruptcy, insolvency, reorganization, winding-up, or composition or
adjustment of debts; (iii) consent to, or fail to contest in a timely and
appropriate manner, any petition filed against it in an involuntary case under
such bankruptcy laws or other Applicable Laws or consent to any proceeding or
action described in the immediately following subsection; (iv) apply for or
consent to, or fail to contest in a timely and appropriate manner, the
appointment of, or the taking of possession by, a receiver, custodian, trustee,
or liquidator of itself or of a substantial part of its property, domestic or
foreign; (v) admit in writing its inability to pay its debts as they become
due; (vi) make a general assignment for the benefit of creditors; (vii) make a
conveyance fraudulent as to creditors under any Applicable Law; or (viii) take
any corporate or similar action for the purpose of effecting any of the
foregoing.
(g) Involuntary Bankruptcy Proceeding. A case or other proceeding
shall be commenced against a Borrower, any Material Subsidiary or any Other
Relevant Subsidiary, in any court of competent jurisdiction seeking: (i)
relief under the Bankruptcy Code of 1978, as amended or other federal
bankruptcy laws (as now or hereafter in effect) or under any other Applicable
Laws, domestic or foreign, relating to bankruptcy, insolvency, reorganization,
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winding-up, or composition or adjustment of debts; or (ii) the appointment of a
trustee, receiver custodian, liquidator or the like of such Person, or of all
or any substantial part of the assets domestic or foreign, of such Person, and
such case or proceeding is not dismissed within 60 days after it is commenced.
(h) Contest of Loan Documents. A Borrower or any Subsidiary shall
disavow, revoke or terminate any Loan Document to which it is a party or shall
otherwise challenge or contest in any action, suit or proceeding in any court
or before any Governmental Authority the validity or enforceability of this
Agreement, any Note or any other Loan Document.
(i) Judgment. A judgment or order for the payment of money shall
be entered against a Borrower or any Subsidiary by any court or other tribunal
which exceeds, individually or together with all other such judgments or orders
entered against such Borrower and its Subsidiaries, $5,000,000 in amount (or
which shall otherwise have a Material Adverse Effect) and such judgment or
order shall continue unpaid for a period of 30 days without being stayed or
dismissed through appropriate appellate proceedings.
(j) Attachment. A warrant, writ of attachment, execution or
similar process shall be issued against any property of a Borrower or any
Subsidiary which exceeds, individually or together with all other such
warrants, writs, executions and processes, $5,000,000 in amount and such
warrant, writ, execution or process shall not be discharged, vacated, stayed or
bonded for a period of 30 days; provided, however, that if a bond has been
issued in favor of the claimant or other Person obtaining such warrant, writ,
execution or process, the issuer of such bond shall execute a waiver or
subordination agreement in form and substance satisfactory to the Managing
Agent pursuant to which the issuer of such bond subordinates its right of
reimbursement, contribution or subrogation to the Obligations and waives or
subordinates any Lien it may have on the assets of such Borrower or any of its
Subsidiaries.
(k) ERISA. Any member of the ERISA Group shall fail to pay when
due an amount or amounts aggregating in excess of $5,000,000 which it shall
have become liable to pay under Title IV of ERISA; or notice of intent to
terminate a Material Plan shall be filed under Title IV of ERISA by any member
of the ERISA Group, any plan administrator or any combination of the foregoing;
or the PBGC shall institute proceedings under Title IV of ERISA to terminate,
to impose liability (other than for premiums under Section 4007 of ERISA) in
respect of, or to cause a trustee to be appointed to administer any Material
Plan; or a condition shall exist by reason of which the PBGC would be entitled
to obtain a decree adjudicating that any Material Plan must be terminated; or
there shall occur a complete or partial withdrawal from, or a default, within
the meaning of Section 4219(c)(5) of ERISA, with respect to, one or more
Multiemployer Plans which could cause one or more members of the ERISA Group to
incur a current payment obligation in excess of $5,000,000.
(l) Loan Documents. An Event of Default (as defined therein)
shall occur under any of the other Loan Documents.
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(m) Change of Control.
(i) Any "person" or "group" (as such terms are used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Exchange Act")) is or becomes the "beneficial owner" (as
defined in Rules 13d-3 and 13d-5 under the Exchange Act, except that a
Person will be deemed to have "beneficial ownership" of all securities
that such Person has the right to acquire, whether such right is
exercisable immediately or only after the passage of time), directly
or indirectly, of more than 25% of the total voting power of the then
outstanding voting stock of the Company; or
(ii) During any twelve-month period (commencing on or
after the Agreement Date), a majority of the Board of Directors of the
Company shall no longer be composed of individuals (A) who were
members of such Board of Directors on the first date of such period,
(B) whose election or nomination to such Board of Directors was
approved by individuals referred to in clause (A) above constituting
at the time of such election or nomination at least a majority of such
Board of Directors or (C) whose election or nomination to such Board
of Directors was approved by individuals referred to in clauses (A)
and (B) above constituting at the time of such election or nomination
at least a majority of such Board of Directors.
(n) Dissolution. Any order, judgment or decree is entered against
a Borrower, any Material Subsidiary or any Other Relevant Subsidiary decreeing
the dissolution or split up of such Person and such order remains undischarged
or unstayed for a period in excess of 30 days.
SECTION 10.2. REMEDIES UPON EVENT OF DEFAULT.
Upon the occurrence of an Event of Default the following provisions
shall apply:
(a) Acceleration; Termination of Facilities.
(i) Automatic. Upon the occurrence of an Event of
Default specified in Sections 10.1(f) or 10.1(g), (A)(i) the principal
of, and all accrued interest on, the Loans and the Notes at the time
outstanding and (ii) all of the other Obligations of the Borrowers,
including, but not limited to, the other amounts owed to the Lenders
and the Managing Agent under this Agreement, the Notes or any of the
other Loan Documents shall become immediately and automatically due
and payable by the Borrowers without presentment, demand, protest, or
other notice of any kind, all of which are expressly waived by the
Borrowers and (B) each of the Commitments and the obligation of the
Lenders to make Loans shall immediately and automatically terminate;
(ii) Optional. If any other Event of Default shall have
occurred and be continuing, the Managing Agent may, and at the
direction of the Requisite Lenders shall: (I) declare (l) the
principal of, and accrued interest on, the Loans and the Notes at the
time outstanding and (2) all of the other Obligations, including, but
not limited to, the other amounts owed to the Lenders and the Managing
Agent under this Agreement, the Notes or any of the other Loan
Documents to be forthwith due and payable, whereupon the
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same shall immediately become due and payable without presentment,
demand, protest or other notice of any kind, all of which are
expressly waived by the Borrower and (II) terminate the Commitments
and the obligation of the Lenders to make Loans hereunder.
(b) Loan Documents. The Requisite Lenders may direct the Managing
Agent to, and the Managing Agent if so directed shall, exercise any and all of
its rights under any and all of the other Loan Documents.
(c) Applicable Law. The Requisite Lenders may direct the Managing
Agent to, and the Managing Agent if so directed shall, exercise all other
rights and remedies it may have under any Applicable Law.
SECTION 10.3. REMEDIES UPON CERTAIN DEFAULTS.
Upon the occurrence of a Default specified in Sections 10.1(f) or
10.1(g), the Commitments shall immediately and automatically terminate.
SECTION 10.4. ALLOCATION OF PROCEEDS.
If an Event of Default shall have occurred and be continuing and the
maturity of the Notes has been accelerated, all payments received by an Agent
under any of the Loan Documents, in respect of any principal of or interest on
the Obligations or any other amounts payable by the Borrowers hereunder or
thereunder, shall be applied by the Agents in the following order and priority:
(a) amounts due to the Agents and the Lenders in respect of Fees
and expenses due under Section 12.2;
(b) payments of interest on the Loans, to be applied for the
ratable benefit of the Lenders;
(c) payments of principal of Loans, to be applied for the ratable
benefit of the Lenders;
(d) amounts due to the Agents and the Lenders pursuant to Section
12.10;
(e) payments of all other amounts due under any of the Loan
Documents, if any, to be applied for the ratable benefit of the Lenders; and
(f) any amount remaining after application as provided above,
shall be paid to the Borrower or whomever else may be legally entitled thereto.
SECTION 10.5. PERFORMANCE BY AGENT.
If a Borrower shall fail to perform any covenant, duty or agreement
contained in any of the Loan Documents, an Agent may perform or attempt to
perform such covenant, duty or agreement on behalf of such Borrower after the
expiration of any cure or grace periods set forth
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herein. In such event, such Borrower shall, at the request of such Agent,
promptly pay any amount reasonably expended by such Agent in such performance
or attempted performance to such Agent, together with interest thereon at the
applicable Post-Default Rate from the date of such expenditure until paid.
Notwithstanding the foregoing, neither such Agent nor any Lender shall have any
liability or responsibility whatsoever for the performance of any obligation of
the Borrowers under this Agreement or any other Loan Document.
SECTION 10.6. RIGHTS CUMULATIVE.
The rights and remedies of the Agents and the Lenders under this
Agreement and each of the other Loan Documents shall be cumulative and not
exclusive of any rights or remedies which any of them may otherwise have under
Applicable Law. In exercising their respective rights and remedies the Agents
and the Lenders may be selective and no failure or delay by the Agents or any
of the Lenders in exercising any right shall operate as a waiver of it, nor
shall any single or partial exercise of any power or right preclude its other
or further exercise or the exercise of any other power or right.
ARTICLE 11
THE AGENTS
SECTION 11.1. AUTHORIZATION AND ACTION.
Each Lender hereby appoints and authorizes each Agent to take such
action as agent on such Lender's behalf and to exercise such powers under this
Agreement and the other Loan Documents as are specifically delegated to such
Agent by the terms and thereof, together with such powers as are reasonably
incidental thereto. Each Agent shall administer the Loans in the same manner
that such Agent administers loans made for its own account. The relationship
between each Agent and the Lenders shall be that of principal and agent only
and nothing herein shall be construed to deem an Agent a trustee or fiduciary
for any Lender nor to impose on the Agent duties or obligations other than
those expressly provided for herein. At the request of a Lender, each Agent
will forward to each Lender copies or, where appropriate, originals of the
documents delivered to such Agent pursuant to this Agreement or the other Loan
Documents. Each Agent will also furnish to any Lender, upon the request of
such Lender, a copy of any certificate or notice furnished to such Agent by a
Borrower or any other Affiliate of a Borrower, pursuant to this Agreement or
any other Loan Document not already delivered to such Lender pursuant to the
terms of this Agreement or any such other Loan Document. As to any matters not
expressly provided for by the Loan Documents (including, without limitation,
enforcement or collection of any of the Obligations), the Agents shall not be
required to exercise any discretion or take any action, but shall be required
to act or to refrain from acting (and shall be fully protected in so acting or
refraining from acting) upon the instructions of the Requisite Lenders (or all
of the Lenders if explicitly required under any other provision of this
Agreement), and such instructions shall be binding upon all Lenders and all
holders of any of the Obligations, provided, however, that, notwithstanding
anything in this Agreement to the contrary, the Agents shall not be required to
take any action which is contrary to this Agreement or any other Loan Document
or Applicable Law. Not in limitation of the foregoing, an Agent shall not
exercise any
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right or remedy it or the Lenders may have under any Loan Document upon the
occurrence of a Default or an Event of Default unless the Requisite Lenders
have so directed such Agent to exercise such right or remedy.
SECTION 11.2. AGENT'S RELIANCE, ETC.
Notwithstanding any other provision of any Loan Document, including
without limitation the second sentence of Section 11.1, neither an Agent nor
any of its directors, officers, agents, employees or counsel shall be liable
for any action taken or omitted to be taken by it or them under or in
connection with this Agreement, except for its or their own gross negligence or
willful misconduct. Without limiting the generality of the foregoing, an
Agent: (a) may treat the payee of any Note as the holder thereof until such
Agent receives written notice of the assignment or transfer thereof signed by
such payee and in form satisfactory to such Agent; (b) may consult with legal
counsel (including its own counsel or counsel for the Borrowers), independent
public accountants and other experts selected by it and shall not be liable for
any action taken or omitted to be taken in good faith by it in accordance with
the advice of such counsel, accountants or experts; (c) makes no warranty or
representation to any Lender or any other Person and shall not be responsible
to any Lender or any other Person for any statements, warranties or
representations made by any Person in or in connection with this Agreement or
any other Loan Document; (d) shall not have any duty to ascertain or to inquire
as to the performance or observance of any of the terms, covenants or
conditions of any of this Agreement or any other Loan Document or the
satisfaction of any conditions precedent under this Agreement or any Loan
Document on the part of the Borrowers or other Persons or inspect the property,
books or records of the Borrowers or any other Person; (e) shall not be
responsible to any Lender for the due execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Agreement or any
other Loan Document, any other instrument or document furnished pursuant
thereto or any collateral covered thereby or the perfection or priority of any
Lien in favor of such Agent on behalf of the Lenders in any such collateral;
and (f) shall incur no liability under or in respect of this Agreement or any
other Loan Document by acting upon any notice, consent, certificate or other
instrument or writing (which may be by telephone or telecopy) believed by it to
be genuine and signed, sent or given by the proper party or parties.
SECTION 11.3. DEFAULTS.
An Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless such Agent has received
notice from a Lender or a Borrower referring to this Agreement, describing with
reasonable specificity such Default or Event of Default and stating that such
notice is a "notice of default." If any Lender becomes aware of any Default or
Event of Default, it shall promptly send to the Managing Agent such a "notice
of default" Further, if an Agent receives such a "notice of default," such
Agent shall give prompt notice thereof to the Lenders.
SECTION 11.4. AGENT AS LENDER.
Each Agent, as a Lender, shall have the same rights and powers under
this Agreement and any other Loan Document as any other Lender and may exercise
the same as though it were not
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an Agent; and the term "Lender" or "Lenders" shall, unless otherwise expressly
indicated, include each Agent in each case in its individual capacity. Each
Agent and its affiliates may each accept deposits from, maintain deposits or
credit balances for, invest in, lend money to, act as trustee under indentures
of, serve as financial advisor to, and generally engage in any kind of business
with a Borrower, any Subsidiary or any other Affiliate thereof as if it were
any other bank and without any duty to account therefor to the other Lenders.
Further, each Agent and any affiliate may accept fees and other consideration
from a Borrower for services in connection with this Agreement and otherwise
without having to account for the same to the other Lenders.
SECTION 11.5. APPROVALS OF LENDERS.
All communications from an Agent to any Lender requesting such
Lender's determination, consent, approval or disapproval (a) shall be given in
the form of a written notice to such Lender, (b) shall be accompanied by a
description of the matter or issue as to which such determination, approval,
consent or disapproval is requested, or shall advise such Lender where
information, if any, regarding such matter or issue may be inspected, or shall
otherwise describe the matter or issue to be resolved, (c) shall include, if
reasonably requested by such Lender and to the extent not previously provided
to such Lender, written materials and a summary of all oral information
provided to such Agent by a Borrower in respect of the matter or issue to be
resolved, and (d) shall include such Agent's recommended course of action or
determination in respect thereof. Each Lender shall reply promptly, but in any
event within ten Business Days (or such lesser period as may be required under
the Loan Documents for such Agent to respond). Unless a Lender shall give
written notice to such Agent that it objects to the recommendation or
determination of such Agent (together with a written explanation of the reasons
behind such objection) within the applicable time period for reply, such Lender
shall be deemed to have conclusively approved of or consented to such
recommendation or determination.
SECTION 11.6. LENDER CREDIT DECISION, ETC.
Each Lender expressly acknowledges and agrees that neither an Agent
nor any of its officers, directors, employees, agents, counsel,
attorneys-in-fact or other affiliates has made any representations or
warranties as to the financial condition, operations, creditworthiness,
solvency or other information concerning the business or affairs of the
Borrowers, any Subsidiary or other Person to such Lender and that no act by an
Agent hereinafter taken, including any review of the affairs of the Borrowers,
shall be deemed to constitute any such representation or warranty by such Agent
to any Lender. Each Lender acknowledges that it has, independently and without
reliance upon the Agents, any other Lender or counsel to the Agents, or any of
their respective officers, directors, employees and agents, and based on the
financial statements of the Borrowers, the Subsidiaries or any other Affiliate
thereof, and inquiries of such Persons, its independent due diligence of the
business and affairs of the Borrowers, the Subsidiaries and other Persons, its
review of the Loan Documents, the legal opinions required to be delivered to it
hereunder, the advice of its own counsel and such other documents and
information as it has deemed appropriate, made its own credit and legal
analysis and decision to enter into this Agreement and the transaction
contemplated hereby. Each Lender also acknowledges that it will, independently
and without reliance upon an Agent, any other Lender or counsel to an Agent or
any of their
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respective officers, directors, employees and agents, and based on such review,
advice, documents and information as it shall deem appropriate at the time,
continue to make its own decisions in taking or not taking action under the
Loan Documents. Except for notices, reports and other documents and
information expressly required to be furnished to the Lenders by an Agent under
this Agreement or any of the other Loan Documents, the Agents shall have no
duty or responsibility to provide any Lender with any credit or other
information concerning the business, operations, property, financial and other
condition or creditworthiness of the Borrowers, any Subsidiary or any other
Affiliate thereof which may come into possession of an Agent or any of its
officers, directors, employees, agents, attorneys-in-fact or other affiliates.
Each Lender acknowledges that the Managing Agent's legal counsel in connection
with the transactions contemplated by this Agreement is only acting as counsel
to the Managing Agent and is not acting as counsel to such Lender.
SECTION 11.7. INDEMNIFICATION OF AGENT.
Each Lender agrees to indemnify each Agent (to the extent not
reimbursed by the Borrower and without limiting the obligation of the Borrowers
to do so) pro rata in accordance with such Lender's respective Commitment
Percentage, 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 at any time be imposed on, incurred
by, or asserted against such Agent (in its capacity as "Agent" but not as a
"Lender") in any way relating to or arising out of the Loan Documents, any
transaction contemplated hereby or thereby or any action taken or omitted by
such Agent under the Loan Documents (collectively, "Indemnifiable Amounts");
provided, however, that no Lender shall be liable for any portion of such
Indemnifiable Amounts to the extent resulting from such Agent's gross
negligence or willful misconduct or if such Agent fails to follow the written
direction of the Requisite Lenders unless such failure is pursuant to the
advice of counsel that following such written direction would likely violate
Applicable Law or the terms of the Loan Documents and of which the Lenders have
received notice. Without limiting the generality of the foregoing, each Lender
agrees to reimburse each Agent promptly upon demand for its ratable share of
any out-of-pocket expenses (including reasonable counsel fees of the counsel(s)
of such Agent's own choosing) reasonably incurred by each Agent in connection
with the preparation, execution, administration, or enforcement of, or legal
advice with respect to the rights or responsibilities of the parties under, the
Loan Documents, any suit or action brought by such Agent to enforce the terms
of the Loan Documents and/or collect any Obligations, any "lender liability"
suit or claim brought against such Agent and/or the Lenders, and any claim or
suit brought against such Agent and/or the Lenders arising under any
Environmental Laws, to the extent that such Agent is not reimbursed for such
expenses by the Borrowers. Such out-of-pocket expenses (including counsel
fees) shall be advanced by the Lenders on the request of such Agent
notwithstanding any claim or assertion that the Agent is not entitled to
indemnification hereunder (other than any claim or assertion that such Agent is
not entitled to such out-of-pocket expenses as a result of its gross negligence
or willful misconduct or failure to follow the written direction of the
Requisite Lenders in the absence of the advice of counsel referred to above)
upon receipt of an undertaking by such Agent that such Agent will reimburse the
Lenders if it is actually and finally determined by a court of competent
jurisdiction that such Agent is not so entitled to indemnification. The
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agreements in this Section shall survive the payment of the Loans and all other
amounts payable hereunder or under the other Loan Documents and the termination
of this Agreement. If a Borrower shall reimburse an Agent for any
Indemnifiable Amount following payment by any Lender to such Agent in respect
of such Indemnifiable Amount pursuant to this Section, such Agent shall share
such reimbursement on a ratable basis with each Lender making any such payment.
SECTION 11.8. SUCCESSOR AGENT.
Each Agent may resign at any time as Agent under the Loan Documents by
giving at least 30 days' prior written notice thereof to the Lenders and the
Company. In the event of a material breach of its duties hereunder, an Agent
may be removed as Agent under the Loan Documents at any time by the Requisite
Lenders upon 30-days' prior notice. Upon any such resignation or removal, the
Requisite Lenders shall have the right to appoint a successor Agent which
appointment shall, provided no Default or Event of Default shall have occurred
and be continuing, be subject to the Company's approval, which approval shall
not be unreasonably withheld or delayed (except that Company shall, in all
events, be deemed to have approved each Lender as a successor Agent). If no
successor Agent shall have been so appointed by the Requisite Lenders, and
shall have accepted such appointment, within thirty days after the resigning
Agent's giving of notice of resignation or the Requisite Lenders' removal of
the resigning Agent, then the resigning or removed Agent may, on behalf of the
Lenders, appoint a successor Agent, which shall be a Lender, if any Lender
shall be willing to serve, and otherwise shall be a commercial bank having
total combined assets of at least $50,000,000,000. Upon the acceptance of any
appointment as Agent hereunder by a successor Agent, such successor Agent shall
thereupon succeed to and become vested with all the rights, powers, privileges
and duties of the resigning Agent, and the retiring Agent shall be discharged
from its duties and obligations under the Loan Documents arising or accruing
thereafter. After any resigning Agent's resignation or removal hereunder as
Agent, the provisions of this Article 11 shall inure to its benefit as to any
actions taken or omitted to be taken by it while it was Agent under the Loan
Documents.
SECTION 11.9. SYNDICATION AGENT AND CO-AGENT.
The Syndication Agent and the Co-Agent in such capacities do not
assume any responsibility or obligation hereunder, including, without
limitation, for servicing, enforcement or collection of any of the Loans, nor
any duties as an agent hereunder for the Lenders, except for the maintenance of
the Register in accordance with Section 12.5(e). The titles of "Syndication
Agent" and "Co-Agent" imply no fiduciary responsibility on the part of the
Syndication Agent or the Co-Agent, in their capacities as such, to the Agents,
the Borrowers or any Lender and the use of such titles does not impose on the
Syndication Agent or the Co-Agent any duties or obligations greater than those
of any other Lender or entitle the Syndication Agent or the Co-Agent to any
rights other than those to which any other Lender is entitled.
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ARTICLE 12
MISCELLANEOUS
SECTION 12.1. NOTICES.
Unless otherwise provided herein, communications provided for
hereunder shall be in writing and shall be mailed, telecopied or delivered as
follows:
If to the Borrowers:
Allied Capital Corporation
▇▇▇▇ ▇ ▇▇▇▇▇▇, ▇▇
▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Managing Director
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Disbursing Agent:
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: 01-10-08
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Managing Agent:
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Telecopy Number: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone Number: (▇▇▇) ▇▇▇-▇▇▇▇
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If to the Syndication Agent:
First Union Capital Markets Group
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇-▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇▇, Director
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to the Co-Agent:
NationsBank of Texas, N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Telecopier: (▇▇▇) ▇▇▇-▇▇▇▇
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
If to a Lender:
To such Lender's address or telecopy number, as applicable,
set forth on its signature page hereto or in the applicable
Assignment and Acceptance Agreement.
or, as to each party at such other address as shall be designated by such party
in a written notice to the other parties delivered in compliance with this
Section 12.1. All such notices and other communications shall be effective (i)
if mailed, when received; (ii) if telecopied, when transmitted; or (iii) if
hand delivered, when delivered. Notwithstanding the immediately preceding
sentence, all notices or communications to an Agent or any Lender under Article
2 shall be effective only when actually received. Neither an Agent nor any
Lender shall incur any liability to the Borrowers (nor shall an Agent incur any
liability to the Lenders) for acting upon any telephonic notice referred to in
this Agreement which such Agent or such Lender, as the case may be, believes in
good faith to have been given by a Person authorized to deliver such notice or
for otherwise acting in good faith under hereunder, except in the case of gross
negligence or willful misconduct.
SECTION 12.2. EXPENSES.
The Company agrees (a) to pay or reimburse the Managing Agent for all
of its reasonable out-of-pocket costs and expenses incurred in connection with
the preparation, negotiation and execution of, and any amendment, supplement or
modification to, any of the Loan Documents (including due diligence expenses
and travel expenses relating to closing), and the consummation of the
transactions contemplated thereby, including the reasonable fees (not to exceed
$30,000) and disbursements (which are in addition to such fee limitation) of
counsel to the Managing Agent, (b) to pay or reimburse each Agent and the
Lenders for all their costs and expenses incurred in connection with the
enforcement or preservation of any rights under the Loan
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Documents, including the reasonable fees and disbursements of their respective
counsel (including the reasonably allocated fees and expenses of in-house
counsel) and any payments in indemnification or otherwise payable by the
Lenders to the Agents pursuant to the Loan Documents, (c) to pay, indemnify and
hold each Agent and the Lenders harmless from any and all recording and filing
fees and any and all liabilities with respect to, or resulting from any failure
to pay or delay in paying, documentary, stamp, excise and other similar taxes,
if any, which may be payable or determined to be payable in connection with the
execution and delivery of any of the Loan Documents, or consummation of any
amendment, supplement or modification of, or any waiver or consent under or in
respect of, any Loan Document, and (d) to the extent not already covered by any
of the preceding subsections, to pay or reimburse the Agents and the Lenders
for all their costs and expenses incurred in connection with any bankruptcy or
other proceeding of the type described in Sections 10.1(f) or 10.1(g),
including the reasonable fees and disbursements of counsel to the Agents and
any Lender, whether such fees and expenses are incurred prior to, during or
after the commencement of such proceeding or the confirmation or conclusion of
any such proceeding.
SECTION 12.3. SETOFF.
Subject to Section 3.3 and in addition to any rights now or hereafter
granted under Applicable Law and not by way of limitation of any such rights,
each Agent, each Lender and each Participant is hereby authorized by each
Borrower, at any time or from time to time, without notice to such Borrower or
to any other Person, any such notice being hereby expressly waived, to set-off
and to appropriate and to apply any and all deposits (general or special,
including, but not limited to, indebtedness evidenced by certificates of
deposit, whether matured or unmatured) and any other indebtedness at any time
held or owing by such Agent, such Lender or any affiliate of such Agent or such
Lender, to or for the credit or the account of such Borrower against and on
account of any of the Obligations or such Borrower, irrespective of whether or
not any or all of the Loans and all other Obligations have been declared to be
due and payable as permitted by Section 10 2, and although such obligations
shall be contingent or unmatured.
SECTION 12.4. JURISDICTION; CONSENT TO SERVICE OF PROCESS; WAIVER OF JURY
TRIAL.
(a) Each Borrower hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State court or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against a Borrower or its properties in the courts of any
jurisdiction.
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(b) Each Borrower hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) Each Borrower and each other party hereto consents to service
of process in the manner provided for notices in Section 12.1. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(d) EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT
PERMITTED BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN
RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS. EACH PARTY
HERETO (1) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER
PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (2)
ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER
INTO THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS, AS APPLICABLE, BY, AMONG
OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
SECTION 12.5. SUCCESSORS AND ASSIGNS.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns, except that no Borrower may assign or otherwise transfer any of its
rights under this Agreement without the prior written consent of all Lenders.
(b) Any Lender may make, carry or transfer Loans at, to or for the
account of, any of its branch offices or the office of an affiliate of such
Lender except to the extent such transfer would result in increased costs to a
Borrower.
(c) Any Lender may at any time grant to one or more banks or other
financial institutions (each such bank or financial institution, a
"Participant") participating interests in its Commitment or the Obligations
owing to such Lender; provided however, (i) any such participating interest
must be for a constant and not a varying percentage interest, (ii) no Lender
may grant a participating interest in its Commitment, or if the Commitments
have been terminated, the aggregate outstanding principal balance of Notes held
by it, in an amount less than $10,000,000, and (iii) after giving effect to any
such participation by a Lender, the amount of its Commitment, or if the
Commitments have been terminated, the aggregate outstanding principal balance
of Notes held by it, in which it has not granted any participating interests
must be at least $10,000,000. No Participant shall have any rights or benefits
under this Agreement or any other Loan Document, except (1) as provided in
Section 12.3, and (2) a Participant shall be
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entitled to the benefits of the cost protection provisions contained in Section
3.12 and Article 4 to the same extent as if it were a Lender but not in excess
of the cost protections to which the Lender from which it purchased its
participation would be entitled. In the event of any such grant by a Lender of
a participating interest to a Participant, such Lender shall remain responsible
for the performance of its obligations hereunder, and the Borrowers and the
Agents shall continue to deal solely and directly with such Lender in
connection with such Lender's rights and obligations under this Agreement. Any
agreement pursuant to which any Lender may grant such a participating interest
shall provide that such Lender shall retain the sole right and responsibility
to enforce the obligations of the Borrowers hereunder including, without
limitation, the right to approve any amendment, modification or waiver of any
provision of this Agreement; provided, however, such Lender may agree with the
Participant that it will not, without the consent of the Participant, agree to
(i) increase, or extend the term or extend the time or waive any requirement
for the reduction or termination of, such Lender's Commitment, (ii) extend the
date fixed for the payment of principal of or interest on the Loans or portions
thereof owing to such Lender, (iii) reduce the amount of any such payment of
principal, or (iv) reduce the rate at which interest is payable thereon. An
assignment or other transfer which is not permitted by subsection (d) or (e)
below shall be given effect for purposes of this Agreement only to the extent
of a participating interest granted in accordance with this subsection (c).
The selling Lender shall notify the Agents and the Company of the sale of any
participation hereunder and the terms thereof.
(d) Any Lender may with the prior written consent of each Agent
and, so long as no Default or Event of Default shall have occurred and be
continuing, the Company (which consent, in the case of the Agents and the
Company, shall not be unreasonably withheld) assign to one or more Eligible
Assignees (each an "Assignee") all or a portion of its Commitment and its other
rights and obligations under this Agreement and the Notes; provided, however,
(i) no such consent by the Company or the Agents shall be required in the case
of any assignment to another Lender or any affiliate of such Lender (subject to
Section 12.5(b) above) or another Lender; (ii) any partial assignment shall be
in an amount at least equal to $10,000,000 and after giving effect to such
assignment the assigning Lender retains a Commitment, or if the Commitments
have been terminated, holds Notes having an aggregate outstanding principal
balance, of at least $10,000,000; (iii) each such assignment shall be effected
by means of an Assignment and Acceptance Agreement; and (iv) each Agent, in its
capacity as a Lender, shall not effect any assignment of its Commitment, if
after giving effect thereto, the amount of such Commitment would be less than
the amount of any other Lender's Commitment. Upon execution and delivery of
such instrument and payment by such Assignee to such transferor Lender of an
amount equal to the purchase price agreed between such transferor Lender and
such Assignee, such Assignee shall be deemed to be a Lender party to this
Agreement as of the effective date of the Assignment and Acceptance Agreement
and shall have all the rights and obligations of a Lender with a Commitment as
set forth in such Assignment and Acceptance Agreement, and the transferor
Lender shall be released from its obligations hereunder to a corresponding
extent, and no further consent or action by any party shall be required. Upon
the consummation of any assignment pursuant to this subsection (d), the
transferor Lender, the Agents and each Company shall make appropriate
arrangements so that new Notes are issued to the Assignee and such transferor
Lender, as appropriate. In connection with any such assignment, the transferor
Lender shall pay
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to the Syndication Agent an administrative fee for processing such assignment
in the amount of $3,000 provided, however, such fee shall not be payable in
connection with the first assignment of all or any portion of the Commitment of
any Lender initially a party to this Agreement to an affiliate of such Lender.
(e) The Syndication Agent shall maintain at the Principal Office a
copy of each Assignment and Acceptance Agreement delivered to and accepted by
it and a register for the recordation of the names and addresses of the Lenders
and the Commitment of each Lender from time to time (the "Register"). The
Syndication Agent shall give each Lender and the Company notice of the
assignment by any Lender of its rights as contemplated by this Section. The
Company, each Agent and the Lenders may treat each Person whose name is
recorded in the Register as a Lender hereunder for all purposes of this
Agreement. The Register and copies of each Assignment and Acceptance Agreement
shall be available for inspection by the Company or any Lender at any
reasonable time and from time to time upon reasonable prior notice to the
Syndication Agent. Upon its receipt of an Assignment and Acceptance Agreement
executed by an assigning Lender, together with each Note subject to such
assignment (the "Surrendered Note"), the Syndication Agent shall, if such
Assignment and Acceptance Agreement has been completed and if the Syndication
Agent receives the processing and recording fee described in subsection (d)
above, (i) accept such Assignment and Acceptance Agreement, (ii) record the
information contained therein in the Register, and (iii) give prompt notice
thereof to the Company.
(f) In addition to the assignments and participations permitted
under the foregoing provisions of this Section, any Lender may assign and
pledge all or any portion of its Loans and its Notes to any federal Reserve
Bank as collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank, and such Loans and Notes shall be fully
transferable as provided therein. No such assignment shall release the
assigning Lender from its obligations hereunder.
(g) A Lender may furnish any information concerning a Borrower or
any Subsidiaries in the possession of such Lender from time to time to
Assignees and Participants (including prospective Assignees and Participants)
subject to compliance with Section 12.9.
(h) Anything in this Section to the contrary notwithstanding, no
Lender may assign or participate any interest in any Loan held by it hereunder
to a Borrower or any Subsidiary or Affiliate of a Borrower.
(i) Each Lender agrees that, without the prior written consent of
the Company and the Agents, it will not make any assignment hereunder in any
manner or under any circumstances that would require registration or
qualification of, or filings in respect of, any Loan or Note under the
Securities Act or any other securities laws United States of America or of any
other jurisdiction.
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SECTION 12.6. REMOVAL OF LENDERS.
If (a) a Lender or a Participant requests compensation pursuant to
Section 3.12 or Section 4.l and the Requisite Lenders are not also doing the
same, or (b) the obligation of a Lender to make LIBOR Loans or to Continue, or
to Convert Loans into LIBOR Loans shall be suspended pursuant to Section
4.1(b), Section 4.2 or Section 4.3 but the obligation of the Requisite Lenders
shall not have been suspended under such Sections, the Company may either (A)
demand that such Lender or Participant (the "Affected Lender"), and upon such
demand the Affected Lender shall promptly, assign its Commitment and all of its
Loans to an Eligible Assignee subject to and in accordance with the provisions
of Section 12.5(d) for a purchase price equal to the aggregate principal
balance of Loans then owing to the Affected Lender plus any accrued but unpaid
interest thereon, accrued but unpaid Fees owing to the Affected Lender and any
amounts owing the Affected Lender under Section 4.4, or (B) pay to the Affected
Lender the aggregate principal balance of Loans then owing to the Affected
Lender plus any accrued but unpaid interest thereon, accrued but unpaid Fees
owing to the Affected Lender and any amounts owing the Affected Lender under
Section 4.4, whereupon the Affected Lender shall no longer be a party hereto or
have any rights or obligations hereunder or under any of the other Loan
Documents. Each of the Agents and the Affected Lender shall reasonably
cooperate in effectuating the replacement of an Affected Lender under this
Section, but at no time shall the Agents, the Affected Lender or any other
Lender be obligated in any way whatsoever to initiate any such replacement or
to assist in finding an Eligible Assignee. The exercise by the Company of its
rights under this Section shall be at the Company's sole cost and expenses and
at no cost or expense to the Agents, the Affected Lender or any of the other
Lenders. The terms of this Section shall not in any way limit each Borrower's
obligation to pay to any Affected Lender compensation owing to such Affected
Lender pursuant to Section 3.12 or Section 4.1.
SECTION 12.7. AMENDMENTS.
Except as otherwise expressly provided in this Agreement, any consent
or approval required or permitted by this Agreement or in any Loan Document to
be given by the Lenders may be given, and any term of this Agreement or of any
other Loan Document may be amended, and the performance or observance by each
Borrower or any Subsidiary of any terms of this Agreement or such other Loan
Document or the continuance of any Default or Event of Default may be waived
(either generally or in a particular instance and either retroactively or
prospectively) with, but only with, the written consent of the Requisite
Lenders (and, in the case of an amendment to any Loan Document, the written
consent of each Borrower). Notwithstanding the foregoing, no amendment, waiver
or consent shall, unless in writing, and signed by all of the Lenders (or the
Managing Agent at the written direction of all of the Lenders), do any of the
following: (i) increase the Commitments of the Lenders or subject the Lenders
to any additional obligations; (ii) reduce the principal of, or interest rates
that have accrued or that will be charged on the outstanding principal amount
of, any Loans or other Obligations; (iii) reduce the amount of any Fees payable
hereunder; (iv) postpone any date fixed for any payment of any principal of,
interest on, or Fees with respect to, any Loans or any other Obligations; (v)
change the Commitment Percentages; (vi) amend this Section or amend the
definitions of the terms used in this Agreement or the other Loan Documents
insofar as such
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definitions affect the substance of this Section; (vii) release any Subsidiary
from its obligations under a Guaranty; (viii) modify the definition of the term
"Requisite Lenders" or modify in any other manner the number or percentage of
the Lenders required to make any determinations or waive any rights hereunder
or to modify any provision hereof; or (ix) amend the definitions of "Borrowing
Base" or "Eligible Assets." Further, no amendment, waiver or consent unless in
writing and signed by the Agents, in addition to the Lenders required above to
take such action, shall affect the rights or duties of the Agents under this
Agreement or any of the other Loan Documents. No waiver shall extend to or
affect any obligation not expressly waived or impair any right consequent
thereon and any amendment, waiver or consent shall be effective only in the
specific instance and for the specific purpose set forth therein. No course of
dealing or delay or omission on the part of the Agents or any Lender in
exercising any right shall operate as a waiver thereof or otherwise be
prejudicial thereto. Except as otherwise explicitly provided for herein or in
any other Loan Document, no notice to or demand upon a Borrower shall entitle
such Borrower to other or further notice or demand in similar or other
circumstances.
SECTION 12.8. NONLIABILITY OF AGENT AND LENDERS.
The relationship between the Borrowers and the Lenders and the Agents
shall be solely that of borrower and lender. Neither the Agents nor any Lender
shall have any fiduciary responsibilities to a Borrower and no provision in
this Agreement or in any of the other Loan Documents, and no course of dealing
between or among any of the parties hereto, shall be deemed to create any
fiduciary duty owing by the Agents or any Lender to any Lender, a Borrower or
any Subsidiary. Neither the Agents nor any Lender undertakes any
responsibility to a Borrower to review or inform such Borrower of any matter in
connection with any phase of such Borrower's business or operations.
SECTION 12.9. CONFIDENTIALITY.
Except as otherwise provided by Applicable Law, each Agent and each
Lender shall utilize all non-public information obtained pursuant to the
requirements of this Agreement which has been identified as confidential or
proprietary by the Borrowers in accordance with its customary procedure for
handling confidential information of this nature and in accordance with safe
and sound banking practices but in any event may make disclosure: (a) to any
of their respective affiliates (provided they shall agree to keep such
information confidential in accordance with the terms of this Section), (b) as
reasonably required by any bona fide Assignee, Participant or other transferee
in connection with the contemplated transfer of any Commitment or
participations therein as permitted hereunder (provided they shall agree to
keep such information confidential in accordance with the terms of this
Section); (c) as required by any Governmental Authority or representative
thereof or pursuant to legal process; (d) to such Agent's or such Lender's
independent auditors and other professional advisors (provided they shall be
notified of the confidential nature of the information); and (e) after the
happening and during the continuance of an Event of Default, to any other
Person, in connection with the exercise by the Agents or the Lenders of rights
hereunder or under any of the other Loan Documents.
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SECTION 12.10. INDEMNIFICATION.
(a) Each Borrower shall and hereby agrees to indemnify, defend and
hold harmless each Agent, any affiliate of each Agent and each of the Lenders
and their respective directors, officers, shareholders, agents, employees and
counsel (each referred to herein as an "Indemnified Party") from and against
any and all losses, costs, claims, damages, liabilities, deficiencies,
judgments or expenses of every kind and nature (including, without limitation,
amounts paid in settlement, court costs and the fees and disbursements of
counsel incurred in connection with any litigation, investigation, claim or
proceeding or any advice rendered in connection therewith) (the foregoing items
referred to herein as "Claims and Expenses") incurred by an Indemnified Party
in connection with, arising out of, or by reason of, any suit, cause of action,
claim, arbitration, investigation or settlement, consent decree or other
proceeding (the foregoing referred to herein as an "Indemnity Proceeding")
arising out of: (i) this Agreement or any other Loan Document or the
transactions contemplated thereby, (ii) the making of any Loans hereunder;
(iii) any actual or proposed use by a Borrower of the proceeds of the Loans;
(iv) an Agent's or any Lender's entering into this Agreement; (v) the fact that
the Agents and the Lenders have established the credit facility evidenced
hereby in favor of the Borrowers; (vi) the fact that the Agents and the Lenders
are creditors of the Borrowers and have or are alleged to have information
regarding the financial condition, strategic plans or business operations of
the Borrowers and the Subsidiaries; (vii) the fact that the Agents and the
Lenders are material creditors of the Borrowers and are alleged to influence
directly or indirectly the business decisions or affairs of the Borrowers and
the Subsidiaries or their financial condition; (viii) the exercise of any right
or remedy the Agents or the Lenders may have under this Agreement or the other
Loan Documents; provided, however, that the Borrower shall not be obligated to
indemnify any Indemnified Party for any acts or omissions of such Indemnified
Party in connection with matters described in this clause (viii) that
constitute gross negligence or willful misconduct; (ix) any violation or
non-compliance by a Borrower or any Subsidiary of any Applicable Law (including
any Environmental Law) including, but not limited to, any Indemnity Proceeding
commenced by (A) the Internal Revenue Service or state taxing authority or (B)
any Governmental Authority or other Person under any Environmental Law,
including any Indemnity Proceeding commenced by a Governmental Authority or
other Person seeking remedial or other action to cause a Borrower or its
Subsidiaries (or its respective properties) (or the Agents and/or the Lenders
as successors to the Borrower) to be in compliance with such Environmental
Laws.
(b) Each Borrower's indemnification obligations under this Section
shall apply to all Indemnity Proceedings arising out of, or related to, the
foregoing whether or not an Indemnified Party is a named party in such
Indemnity Proceeding. In this connection, this indemnification shall cover all
costs and expenses of any Indemnified Party in connection with any deposition
of any Indemnified Party or compliance with any subpoena (including any
subpoena requesting the production of documents). This indemnification shall,
among other things, apply to any Indemnity Proceeding commenced by other
creditors of a Borrower or any Subsidiary, any shareholder of a Borrower or any
Subsidiary (whether such shareholder(s) are prosecuting such Indemnity
Proceeding in their individual capacity or derivatively on behalf of a
Borrower), any account debtor of a Borrower or any Subsidiary or by any
Governmental Authority. This
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indemnification shall apply to any Indemnity Proceeding arising during the
pendency of any bankruptcy proceeding filed by or against a Borrower and/or any
Subsidiary.
(c) All out-of-pocket fees and expenses of, and all amounts paid
to third-persons by, an Indemnified Party shall be advanced by the Borrowers at
the request of such Indemnified Party notwithstanding any claim or assertion by
the Borrowers that such Indemnified Party is not entitled to indemnification
hereunder upon receipt of an undertaking by such Indemnified Party that such
Indemnified Party will reimburse the Borrowers if it is actually and finally
determined by a court of competent jurisdiction that such Indemnified Party is
not so entitled to indemnification hereunder.
(d) An Indemnified Party may conduct its own investigation and
defense of, and may formulate its own strategy with respect to, any Indemnified
Proceeding covered by this Section and, as provided above, all costs and
expenses incurred by the Indemnified Party shall be reimbursed by the
Borrowers. No action taken by legal counsel chosen by an Indemnified Party in
investigating or defending against any such Indemnified Proceeding shall
vitiate or in any way impair the obligations and duties of the Borrowers
hereunder to indemnify and hold harmless each such Indemnified Party, provided,
however, that (i) if a Borrower is required to indemnify an Indemnified Party
pursuant hereto and (ii) such Borrower has provided evidence reasonably
satisfactory to such Indemnified Party that such Borrower has the financial
wherewithal to reimburse such Indemnified Party for any amount paid by such
Indemnified Party with respect to such Indemnified Proceeding, such Indemnified
Party shall not settle or compromise any such Indemnified Proceeding without
the prior written consent of such Borrower (which consent shall not be
unreasonably withheld or delayed).
(e) If and to the extent that the obligations of a Borrower
hereunder are unenforceable for any reason, such Borrower hereby agrees to make
the maximum contribution to the payment and satisfaction of such obligations
which is permissible under Applicable Law. Each Borrower's obligations
hereunder shall survive any termination of this Agreement and the other Loan
Documents and the payment in full of the Obligations, and are in addition to,
and not in substitution of, any other of their obligations set forth in this
Agreement or any other Loan Document to which it is a party.
SECTION 12.11. TERMINATION; SURVIVAL.
At such time as (a) all of the Commitments have been terminated, (b)
none of the Lenders is obligated any longer under this Agreement to make any
Loans and (c) all Obligations (other than obligations which survive as provided
in the following sentence) have been paid and satisfied in full, this Agreement
shall terminate. Notwithstanding any termination of this Agreement, or of the
other Loan Documents, the indemnities to which the Agents and the Lenders are
entitled under the provisions of Sections 11.7, 12.2 and 12.10 and any other
provision of this Agreement and the other Loan Documents, and the waivers of
jury trial and submission to jurisdiction contained in Section 12.4, shall
continue in full force and effect and shall protect the Agents and the Lenders
against events arising after such termination as well as before.
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SECTION 12.12. SEVERABILITY OF PROVISIONS.
Any provision of this Agreement which is prohibited or unenforceable
in any jurisdiction shall, as to such jurisdiction, be ineffective only to the
extent of such prohibition or unenforceability without invalidating the
remainder of such provision or the remaining provisions or affecting the
validity or enforceability of such provision in any other jurisdiction.
SECTION 12.13. GOVERNING LAW.
THIS AGREEMENT SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH,
THE LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE
FULLY PERFORMED, IN SUCH STATE, AND WITHOUT REFERENCE TO CONFLICTS OF LAWS
PRINCIPLES OR PROVISIONS.
SECTION 12.14. COUNTERPARTS.
This Agreement and any amendments, waivers, consents or supplements
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 an original, but all of which counterparts together shall constitute but
one and the same instrument.
SECTION 12.15. LIMITATION OF LIABILITY.
(a) Neither an Agent nor any Lender, nor any affiliate, officer,
director, employee, attorney, or agent of an Agent or any Lender shall have any
liability with respect to, and each Borrower hereby waives, releases, and
agrees not to ▇▇▇ any of them upon, any claim for any special, indirect,
incidental, or consequential damages suffered or incurred by a Borrower in
connection with, arising out of, or in any way related to, this Agreement or
any of the other Loan Documents, or any of the transactions contemplated by
this Agreement or any of the other Loan Documents. Each Borrower hereby
waives, releases, and agrees not to ▇▇▇ an Agent or any Lender or any of an
Agent's or any Lender's affiliates, officers, directors, employees, attorneys,
or agents for punitive damages in respect of any claim in connection with,
arising out of, or in any way related to, this Agreement or any of the other
Loan Documents, or any of the transactions contemplated by this Agreement or
financed hereby.
(b) Notwithstanding any provisions to the contrary contained
herein or in any other Loan Document, to the extent that the obligations of
REIT would be unenforceable because of any federal or state law relating to
fraudulent conveyance or transfers, then the obligations of REIT under the Loan
Documents shall be limited to the maximum amount that would be permitted under
such applicable laws in order to avoid such invalidity or unenforceability.
SECTION 12.16. ENTIRE AGREEMENT.
This Agreement, the Notes, and the other Loan Documents embody the
final, entire agreement among the parties hereto and supersede any and all
prior commitments, agreements, representations, and understandings, whether
written or oral, relating to the subject matter hereof
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and may not be contradicted or varied by evidence of prior, contemporaneous, or
subsequent oral agreements or discussions of the parties hereto.
SECTION 12.17. CONSTRUCTION.
The Agents, each Borrower and each Lender acknowledge that each of
them has had the benefit of legal counsel of its own choice and has been
afforded an opportunity to review this Agreement and the other Loan Documents
with its legal counsel and that this Agreement and the other Loan Documents
shall be construed as if jointly drafted by the Agents, the Borrowers and each
Lender.
[Signatures on Following Pages]
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IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be executed by their authorized officers all as of the day and
year first above written.
BORROWERS:
ALLIED CAPITAL CORPORATION
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
-----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Title: Principal and Chief Financial Officer
--------------------------------------
ALLIED CAPITAL REIT, INC.
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Principal and Chief Financial Officer
-------------------------------------
ALLIED CAPITAL SBLC CORPORATION
By: /s/▇▇▇ ▇. ▇▇▇▇▇▇
----------------------------------------
Name: ▇▇▇ ▇. ▇▇▇▇▇▇
--------------------------------------
Title: Principal and Chief Financial Officer
-------------------------------------
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
APRIL 20, 1998, WITH ALLIED CAPITAL CORPORATION
AND ALLIED CAPITAL SBLC CORPORATION]
BANKBOSTON, N.A.,
AS DISBURSING AGENT AND AS A LENDER
By: /s/▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
----------------------------------
Name: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------
Title: Vice President
--------------------------------
INITIAL COMMITMENT AMOUNT:
$50,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
--------------------------------------
--------------------------------------
--------------------------------------
Attn:
----------------
Telecopier:
--------------
Telephone:
--------------
[Signatures Continued on Next Page]
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[SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
APRIL 20, 1998, WITH ALLIED CAPITAL CORPORATION
AND ALLIED CAPITAL SBLC CORPORATION]
▇▇▇▇▇ BANK N.A.,
AS MANAGING AGENT AND AS A LENDER
By: /s/▇▇▇▇▇ ▇. ▇▇▇▇▇
--------------------------------------------------
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇
------------------------------------------------
Title: Vice President
-----------------------------------------------
INITIAL COMMITMENT AMOUNT:
$50,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
-----------------------------------------------------
-----------------------------------------------------
-----------------------------------------------------
Attn:
----------------
Telecopier:
--------------
Telephone:
--------------
[Signatures Continued on Next Page]
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81
[SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
APRIL 20, 1998, WITH ALLIED CAPITAL CORPORATION
AND ALLIED CAPITAL SBLC CORPORATION]
FIRST UNION NATIONAL BANK,
AS SYNDICATION AGENT AND AS A LENDER
By: /s/▇▇▇▇ ▇. ▇▇▇▇▇▇▇
---------------------------------------------
Name: ▇▇▇▇ ▇. ▇▇▇▇▇▇▇
-------------------------------------------
Title: Senior Vice President
------------------------------------------
INITIAL COMMITMENT AMOUNT:
$50,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
------------------------------------------------
------------------------------------------------
------------------------------------------------
Attn:
----------------
Telecopier:
--------------
Telephone:
--------------
[Signatures Continued on Next Page]
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82
[SIGNATURE PAGE TO CREDIT AGREEMENT DATED AS OF
APRIL 20, 1998, WITH ALLIED CAPITAL CORPORATION
AND ALLIED CAPITAL SBLC CORPORATION]
NATIONSBANK OF TEXAS, N.A.,
AS CO-AGENT AND AS A LENDER
By: /s/▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
---------------------------------------
Name: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇
-------------------------------------
Title: Vice President
------------------------------------
INITIAL COMMITMENT AMOUNT:
$50,000,000
LENDING OFFICE (ALL TYPES OF LOANS):
------------------------------------------
------------------------------------------
------------------------------------------
Attn:
----------------
Telecopier:
--------------
Telephone:
--------------
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83
EXHIBIT A
FORM OF ASSIGNMENT AND ACCEPTANCE AGREEMENT
THIS ASSIGNMENT AND ACCEPTANCE AGREEMENT dated as of ____________, 19___ (the
"Agreement"), by and among _________________________ (the "Assignor"),
_______________________, (the "Assignee"), ALLIED CAPITAL CORPORATION, ALLIED
CAPITAL REIT, INC., and ALLIED CAPITAL SBLC CORPORATION (the "Borrowers") and
BANKBOSTON, N.A., FIRST UNION NATIONAL BANK, ▇▇▇▇▇ BANK N.A., and NATIONSBANK
OF TEXAS, N.A., as Agents (the "Agents").
WHEREAS, the Assignor is a Lender under that certain Amended and
Restated Credit Agreement dated as of April 20, 1998 (as amended, restated,
supplemented or otherwise modified from time to time, the "Credit Agreement"),
by and among the Borrowers, the financial institutions party thereto and their
assignees under Section 12.5(d) thereof (the "Lenders"), BankBoston, N.A., as
Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent, and First Union National
Bank, as Syndication Agent;
WHEREAS, the Assignor desires to assign to the Assignee all or a
portion of the Assignor's Commitment under the Credit Agreement, all on the
terms and conditions set forth herein;
WHEREAS, the Borrowers and the Agents consent to such assignment on
the terms and conditions set forth herein.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which hereby are acknowledged by the parties hereto, the parties
hereto hereby agree as follows:
Section l. Assignment.
(a) Subject to the terms and conditions of this Agreement and in
consideration of the payment to be made by the Assignee to the Assignor
pursuant to Section 2 of this Agreement, effective as of __________________
(the "Assignment Date"), the Assignor hereby irrevocably sells, transfers and
assigns to the Assignee, without recourse, a $______________ interest (such
interest being the "Assigned Commitment") in and to the Assignor's Commitment
and all of the other rights and obligations of the Assignor under the Credit
Agreement, such Assignor's Notes and the other Loan Documents (representing
_______% in respect of the aggregate amount of all Lenders' Commitments),
including without limitation, a principal amount of outstanding Loans equal to
$____________, all voting rights of the Assignor associated with the Assigned
Commitment, all rights to receive interest on such amount of Loans and all
commitment and other Fees with respect to the Assigned Commitment and other
rights of the Assignor under the Credit Agreement and the other Loan Documents
with respect to the Assigned Commitment, all as if the Assignee were an
original Lender under and signatory to the Credit Agreement having a Commitment
equal to such amount of the Assigned Commitment. The Assignee, subject to the
terms and conditions hereof, hereby assumes all obligations of the Assignor
with respect to the
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Assigned Commitment as if the Assignee were an original Lender under and
signatory to the Credit Agreement having a Commitment equal to the Assigned
Commitment, which obligations shall include, but shall not be limited to, the
obligation of the Assignor to make Loans to the Borrowers with respect to the
Assigned Commitment and the obligation to indemnify the Agent as provided
therein (the foregoing enumerated obligations, together with all other similar
obligations more particularly set forth in the Credit Agreement and the other
Loan Documents, shall be referred to hereinafter, collectively, as the
"Assigned Obligations"). The Assignor shall have no further duties or
obligations with respect to, and shall have no further interest in, the
Assigned Obligations or the Assigned Commitment from and after the Assignment
Date.
(b) The assignment by the Assignor to the Assignee hereunder is
without recourse to the Assignor. The Assignee makes and confirms to the
Agents, the Assignor, and the other Lenders all of the representations,
warranties and covenants of a Lender under Article 11 of the Credit Agreement.
Not in limitation of the foregoing, the Assignee acknowledges and agrees that,
except as set forth in Section 4 below, the Assignor is making no
representations or warranties with respect to, and the Assignee hereby releases
and discharges the Assignor for any responsibility or liability for: (i) the
present or future solvency or financial condition of any Borrower or any of its
Subsidiaries, (ii) any representations, warranties, statements or information
made or furnished by any Borrower or any of its Subsidiaries in connection with
the Credit Agreement or otherwise, (iii) the validity, efficacy, sufficiency,
or enforceability of the Credit Agreement, any Loan Document or any other
document or instrument executed in connection therewith, or the collectibility
of the Assigned Obligations, (iv) the perfection, priority or validity of any
Lien with respect to any collateral at any time securing the Obligations or the
Assigned Obligations under the Notes or the Credit Agreement and (v) the
performance or failure to perform by any Borrower or any of its Subsidiaries of
any obligation under the Credit Agreement or any other Loan Document. Further,
the Assignee acknowledges that it has, independently and without reliance upon
the Agents, or on any affiliate or subsidiary thereof, or any other Lender and
based on the financial statements supplied by the Borrowers and such other
documents and information as it has deemed appropriate, made its own credit
analysis and decision to become a Lender under the Credit Agreement. The
Assignee also acknowledges that it will, independently and without reliance
upon the Agents or any other Lender and based on such documents and information
as it shall deem appropriate at the time, continue to make its own credit
decisions in taking or not taking action under the Credit Agreement or any Note
or pursuant to any other obligation. Except as expressly provided in the
Credit Agreement, the Agents shall have no duty or responsibility whatsoever,
either initially or on a continuing basis, to provide the Assignee with any
credit or other information with respect to any Borrower or any of its
Subsidiaries or to notify the Assignee of any Default or Event of Default. The
Assignee has not relied on the Agents as to any legal or factual matter in
connection therewith or in connection with the transactions contemplated
thereunder.
Section 2. Payment by Assignee. In consideration of the
assignment made pursuant to Section 1 of this Agreement, the Assignee agrees to
pay to the Assignor on the Assignment Date, an amount equal to $____________
representing the aggregate principal amount outstanding of the Loans owing to
the Assignor under the Credit Agreement and the other Loan Documents being
assigned hereby.
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Section 3. Payments by Assignor. The Assignor agrees to pay to
the Syndication Agent on the Assignment Date the administration fee, if any,
payable under the applicable provisions of the Credit Agreement.
Section 4. Representations and Warranties of Assignor. The
Assignor hereby represents and warrants to the Assignee that (a) as of the
Assignment Date (i) the Assignor is a Lender under the Credit Agreement having
a Commitment under the Credit Agreement (without reduction by any assignments
thereof which have not yet become effective), equal to $_________ and that the
Assignor is not in default of its obligations under the Credit Agreement; and
(ii) the outstanding balance of Loans owing to the Assignor (without reduction
by any assignments thereof which have not yet become effective) is
$____________; and (b) it is the legal and beneficial owner of the Assigned
Commitment which is free and clear of any adverse claim created by the
Assignor.
Section 5. Representations, Warranties and Agreements of
Assignee. The Assignee (a) represents and warrants that it is (i) legally
authorized to enter into this Agreement and (ii) an "accredited investor" (as
such term is used in Regulation D of the Securities Act) and an Eligible
Assignee; (b) confirms that it has received a copy of the Credit Agreement,
together with copies of the most recent financial statements delivered pursuant
thereto and such other documents and information (including without limitation
the Loan Documents) as it has deemed appropriate to make its own credit
analysis and decision to enter into this Agreement; (c) appoints and authorizes
each Agent to take such action as contractual representative on its behalf and
to exercise such powers under the Loan Documents as are delegated to such Agent
by the terms thereof together with such powers as are reasonably incidental
thereto; and (d) agrees that it will become a party to and shall be bound by
the Credit Agreement, the other Loan Documents to which the other Lenders are a
party on the Assignment Date and will perform in accordance therewith all of
the obligations which are required to be performed by it as a Lender.
Section 6. Recording and Acknowledgment by the Syndication
Agent. Following the execution of this Agreement, the Assignor will deliver to
the Syndication Agent (a) a duly executed copy of this Agreement for
acknowledgment and recording by such Agent and (b) the Assignor's Notes. Each
Borrower agrees to exchange such Note for a new Note as provided in Section
12.5(d) of the Credit Agreement. Upon such acknowledgment and recording, from
and after the Assignment Date, the Syndication Agent shall make all payments in
respect of the interest assigned hereby (including payments of principal,
interest, Fees and other amounts) to the Assignee. The Assignor and Assignee
shall make all appropriate adjustments in payments under the Credit Agreement
for periods prior to the Assignment Date directly between themselves.
[Include this Section only if Company's consent is required under
Section 12.5(d)]
Section 7. Agreements of the Company. The Company hereby agrees
that the Assignee shall be a Lender under the Credit Agreement having a
Commitment equal to the Assigned Commitment. The Company agrees that the
Assignee shall have all of the rights and remedies of a Lender under the Credit
Agreement and the other Loan Documents as if the Assignee were an original
Lender under and signatory to the Credit Agreement, including, but
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not limited to, the right of a Lender to receive payments of principal and
interest with respect to the Assigned Obligations, and to the Loans made by the
Lenders after the date hereof and to receive the commitment and other Fees
payable to the Lenders as provided in the Credit Agreement. Further, the
Assignee shall be entitled to the indemnification provisions from the Borrowers
in favor of the Lenders as provided in the Credit Agreement and the other Loan
Documents. The Company further agrees, upon the execution and delivery of this
Agreement, to execute, and to cause SBLC to execute, in favor of the Assignee a
Note in an initial amount equal to the Assigned Commitment for each Borrower.
Further, the Company agrees that, upon the execution and delivery of this
Agreement, the Borrowers shall owe the Assigned Obligations to the Assignee as
if the Assignee were the Lender originally making such Loans and entering into
such other obligations. Upon receipt by the Assignor of the amounts due the
Assignor under Section 2, the Assignor agrees to surrender to each Borrower
such Assignor's Note.
Section 8. Addresses. The Assignee specifies as its address for
notices and its Lending Office for all Loans, the offices set forth below:
Notice Address:
-----------------------------------
-----------------------------------
-----------------------------------
Telephone No.:
---------------------
Telecopy No.:
----------------------
Domestic Lending Office:
-----------------------------------
-----------------------------------
-----------------------------------
Telephone No.:
---------------------
Telecopy No.:
----------------------
LIBOR Lending Office:
-----------------------------------
-----------------------------------
-----------------------------------
Telephone No.:
---------------------
Telecopy No.:
----------------------
Section 9. Payment Instructions. All payments to be made to the
Assignee under this Agreement by the Assignor, and all payments to be made to
the Assignee under the Credit Agreement, shall be made as provided in the
Credit Agreement in accordance with the following instructions:
Section 10. Effectiveness of Assignment. This Agreement, and the
assignment and assumption contemplated herein, shall not be effective until (a)
this Agreement is executed and delivered by each of the Assignor, the Assignee,
the Agents, and if required under Section 12.5(d) of the Credit Agreement, the
Company, and (b) the payment to the Assignor of the amounts owing by the
Assignee pursuant to Section 2 hereof and (c) the payment to the Syndication
Agent of the amounts owing by the Assignor pursuant to Section 3 hereof. Upon
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recording and acknowledgment of this Agreement by the Agents, from and after
the Assignment Date, (i) the Assignee shall be a party to the Credit Agreement
and, to the extent provided in this Agreement, have the rights and obligations
of a Lender thereunder and (ii) the Assignor shall, to the extent provided in
this Agreement, relinquish its rights and be released from its obligations
under the Credit Agreement; provided, however, that if the Assignor does not
assign its entire interest under the Loan Documents, it shall remain a Lender
entitled to all of the benefits and subject to all of the obligations
thereunder with respect to its Commitment.
Section 11. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE, AND WITHOUT
REFERENCE TO CONFLICT OF LAWS PRINCIPLES OR PROVISIONS.
Section 12. Counterparts. This Agreement may be executed in any
number of counterparts each of which, when taken together, shall constitute one
and the same agreement.
Section 13. Headings. Section headings have been inserted herein
for convenience only and shall not be construed to be a part hereof.
Section 14. Amendments; Waivers. This Agreement may not be
amended, changed, waived or modified except by a writing executed by the
Assignee and the Assignor; provided, however, any amendment, waiver or consent
which shall affect the rights or duties of the [Company or the] Agents under
this Agreement shall not be effective unless signed by the [Company or the]
Agents[, as applicable].
Section 15. Entire Agreement. This Agreement embodies the entire
agreement between the Assignor and the Assignee with respect to the subject
matter hereof and supersedes all other prior arrangements and understandings
relating to the subject matter hereof.
Section 16. Binding Effect. This Agreement shall be binding upon
and inure to the benefit of the parties hereto and their respective successors
and permitted assigns.
Section 17. Definitions. Terms not otherwise defined herein are
used herein with the respective meanings given them in the Credit Agreement.
[Signatures on Following Pages]
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IN WITNESS WHEREOF, the parties hereto have duly executed this
Assignment and Acceptance Agreement as of the date and year first written
above.
ASSIGNOR:
[NAME OF ASSIGNOR]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
ASSIGNEE:
[NAME OF ASSIGNEE]
By:
-------------------------------
Name:
-----------------------------
Title:
----------------------------
[Include signature of the Company
only if required under Section
12.5(d) of the Credit Agreement]
Agreed and consented to as of the
date first written above.
COMPANY:
ALLIED CAPITAL CORPORATION
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
[Signatures Continued on Following Page]
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Accepted as of the date first written above.
AGENTS:
BankBoston, N.A., as Disbursing Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
First Union National Bank, as Syndication Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
NationsBank of Texas, N.A., as Co-Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
▇▇▇▇▇ Bank N.A., as Managing Agent
By:
------------------------------------------------
Name:
----------------------------------------------
Title:
---------------------------------------------
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EXHIBIT B
FORM OF GUARANTY
THIS GUARANTY dated as of ___________________ executed and delivered
by __________________________, a ______________________ (the "Guarantor") in
favor of (a) ▇▇▇▇▇ Bank N.A., in its capacity as Managing Agent (the "Agent")
for the Lenders under that certain Amended and Restated Credit Agreement dated
as of April 20, 1998 (as the same may be amended, restated, supplemented or
otherwise modified from time to time in accordance with its terms, the "Credit
Agreement"), by and among Allied Capital Corporation, a Maryland corporation,
Allied Capital REIT, Inc., a Maryland corporation, and Allied Capital SBLC
Corporation, a Maryland corporation (the "Borrowers"), the financial
institutions initially party thereto and their assignees under Section 12.5(d)
thereof (the "Lenders"), BankBoston, N.A., as Disbursing Agent, ▇▇▇▇▇ Bank
N.A., as Managing Agent, NationsBank of Texas, N.A., as Co-Agent, and First
Union National Bank, as Syndication Agent and (b) the Lenders.
WHEREAS, pursuant to the Credit Agreement, the Agents and the Lenders
have agreed to make available to the Borrowers certain financial accommodations
on the terms and conditions set forth in the Credit Agreement,
WHEREAS, the Company owns, directly or indirectly, _________________
of the issued and outstanding capital stock of, or other equity interests in,
the Guarantor;
WHEREAS, the Borrowers, the Guarantor and the other Subsidiaries of
the Borrower, though separate legal entities, are mutually dependent on each
other in the conduct of their respective businesses as an integrated operation
and have determined it to be in their mutual best interests to obtain financing
from the Agents and the Lenders through their collective efforts;
WHEREAS, the Guarantor acknowledges that it has received advances from
the Company and will receive other direct and indirect benefits from the Agents
and the Lenders making such financial accommodations available to the Borrowers
under the Credit Agreement and, accordingly, the Guarantor is willing to
guarantee the Borrowers' obligations to the Agent and the Lenders on the terms
and conditions contained herein; and
WHEREAS, the Guarantor's execution and delivery of this Guaranty is a
condition to the Agents and the Lenders making, and continuing to make, such
financial accommodations to the Borrowers.
NOW, THEREFORE, for good and valuable consideration, the receipt and
sufficiency of which are hereby acknowledged by the Guarantor, the Guarantor
agrees as follows:
Section 1. Guaranty. The Guarantor hereby absolutely,
irrevocably and unconditionally guaranties the due and punctual payment and
performance when due, whether at stated maturity, by acceleration or otherwise,
of all of the following (collectively referred to as the "Guaranteed
Obligations"): (a) all indebtedness and obligations owing by the Borrowers to
any Lender or the Agents under or in connection with the Credit Agreement and
any other Loan
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Document, including without limitation, the repayment of all principal of the
Loans, and the payment of all interest, Fees, charges, attorneys fees and other
amounts payable to any Lender or the Agent thereunder or in connection
therewith; (b) any and all extensions, renewals, modifications, amendments or
substitutions of the foregoing; (c) all expenses, including, without
limitation, attorneys' fees and disbursements, that are incurred by the Lenders
and the Agents in the enforcement of any of the foregoing or any obligation of
the Guarantor hereunder and (d) all other Obligations, provided, however, that
the Guarantor's obligations hereunder shall not exceed a principal sum of
$_____________ plus interest thereon on the applicable default rate provided
for in the Credit Agreement from the date demand is made hereunder.
Section 2. Guaranty of Pavement and Not of Collection. This
Guaranty is a guaranty of payment, and not of collection, and a debt of the
Guarantor for its own account. Accordingly, the Lenders and the Agents shall
not be obligated or required before enforcing this Guaranty against the
Guarantor: (a) to pursue any right or remedy the Lenders or the Agent may have
against the Borrowers or any other Person or commence any suit or other
proceeding against the Borrowers or any other Person in any court or other
tribunal; (b) to make any claim in a liquidation or bankruptcy of the Borrower
or any other Person; or (c) to make demand of the Borrowers or any other Person
or to enforce or seek to enforce or realize upon any collateral security held
by the Lenders or the Agents which may secure any of the Guaranteed
Obligations.
Section 3. Guaranty Absolute. The Guarantor guarantees that the
Guaranteed Obligations will be paid strictly in accordance with the terms of
the documents evidencing the same, regardless of any Applicable Law now or
hereafter in effect in any jurisdiction affecting any of such terms or the
rights of the Agents or the Lenders with respect thereto. The liability of the
Guarantor under this Guaranty shall be absolute and unconditional in accordance
with its terms and shall remain in full force and effect without regard to, and
shall not be released, suspended, discharged, terminated or otherwise affected
by, any circumstance or occurrence whatsoever, including without limitation,
the following (whether or not the Guarantor consents thereto or has notice
thereof):
(a) (i) any change in the amount, interest rate or due date or
other term of any of the Guaranteed Obligations, (ii) any change in the time,
place or manner of payment of all or any portion of the Guaranteed Obligations,
(iii) any amendment or waiver of, or consent to the departure from or other
indulgence with respect to, the Credit Agreement, any other Loan Document, or
any other document or instrument evidencing or relating to any Guaranteed
Obligations, or (iv) any waiver, renewal, extension, addition, or supplement
to, or deletion from, or any other action or inaction under or in respect of,
the Credit Agreement, any of the other Loan Documents, or any other documents,
instruments or agreements relating to the Guaranteed Obligations or any other
instrument or agreement referred to therein or evidencing any Guaranteed
Obligations or any assignment or transfer of any of the foregoing;
(b) any lack of validity or enforceability of the Credit
Agreement, any of the other Loan Documents, or any other document, instrument
or agreement referred to therein or evidencing any Guaranteed Obligations or
any assignment or transfer of any of the foregoing;
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(c) any furnishing to the Agents or the Lenders of any additional
security for the Guaranteed Obligations, or any sale, exchange, release or
surrender of, or realization on, any security for the Guaranteed Obligations;
(d) any settlement or compromise of any of the Guaranteed
Obligations, any security therefor, or any liability of any other party with
respect to the Guaranteed Obligations, or any subordination of the payment of
the Guaranteed Obligations to the payment of any other liability of the
Borrowers or any other obligor with respect to the Guaranteed Obligations;
(e) any bankruptcy, insolvency, reorganization, composition,
adjustment, dissolution, liquidation or other like proceeding relating to the
Guarantor, the Borrowers or any other Person, or any action taken with respect
to this Guaranty by any trustee or receiver, or by any court, in any such
proceeding;
(f) any act or failure to act by the Borrowers or any other Person
which may adversely affect the Guarantor's subrogation rights, if any, against
the Borrowers to recover payments made under this Guaranty;
(g) any nonperfection of any security interest or other Lien on
any collateral securing in any way any of the Obligations;
(h) any application of sums paid by the Borrowers or any other
Person with respect to the liabilities of the Borrowers to the Agents or the
Lenders, regardless of what liabilities of the Borrowers remain unpaid;
(i) any defect, limitation or insufficiency in the borrowing
powers of the Borrowers or in the exercise thereof; or
(j) any other circumstance which might otherwise constitute a
defense available to, or a discharge of, the Guarantor hereunder.
Section 4. Action with Respect to Guaranteed Obligations. The
Lenders and the Agents may, at any time and from time to time, without the
consent of, or notice to, the Guarantor, and without discharging the Guarantor
from its obligations hereunder take any and all actions described in Section 3
and may otherwise: (a) amend, modify, alter or supplement the terms of any of
the Guaranteed Obligations, including, but not limited to, extending or
shortening the time of payment of any of the Guaranteed Obligations or changing
the interest rate that may accrue on any of the Guaranteed Obligations; (b)
amend, modify, alter or supplement the Credit Agreement or any other Loan
Document; (c) sell, exchange, release or otherwise deal with all, or any part,
of any collateral; (d) release any Person liable in any manner for the payment
or collection of the Guaranteed Obligations; (e) exercise, or refrain from
exercising, any rights against the Borrowers or any other Person; and (f) apply
any sum, by whomsoever paid or however realized, to the Guaranteed Obligations
in such order as the Lenders shall elect.
Section 5. Representations and Warranties. The Guarantor hereby
makes to the Agents and the Lenders all of the representations and warranties
made by the Borrowers with
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respect to or in any way relating to the Guarantor in the Credit Agreement and
the other Loan Documents, as if the same were set forth herein in full.
Section 6. Covenants. The Guarantor will comply with all
covenants which the Company is to cause the Guarantor to comply with under the
terms of the Credit Agreement or any of the other Loan Documents.
Section 7. Waiver. The Guarantor, to the fullest extent
permitted by Applicable Law, hereby waives notice of acceptance hereof or any
presentment, demand, protest or notice of any kind, and any other act or thing,
or omission or delay to do any other act or thing, which in any manner or to
any extent might vary the risk of the Guarantor or which otherwise might
operate to discharge the Guarantor from its obligations hereunder.
Section 8. Inability to Accelerate Loan. If the Agents and/or
the Lenders are prevented under Applicable Law or otherwise from demanding or
accelerating payment of any of the Guaranteed Obligations by reason of any
automatic stay or otherwise, the Agents and/or the Lenders shall be entitled to
receive from the Guarantor, upon demand therefor, the sums which otherwise
would have been due had such demand or acceleration occurred.
Section 9. Reinstatement of Guaranteed Obligations. If claim is
ever made on the Agents or any Lender for repayment or recovery of any amount
or amounts received in payment or on account of any of the Guaranteed
Obligations, and such Agent or such Lender repays all or part of said amount by
reason of (a) any judgment, decree or order of any court or administrative body
of competent jurisdiction, or (b) any settlement or compromise of any such
claim effected by such Agent or such Lender with any such claimant (including a
Borrower or a trustee in bankruptcy for a Borrower), then and in such event the
Guarantor agrees that any such judgment, decree, order, settlement or
compromise shall be binding on it, notwithstanding any revocation hereof or the
cancellation of the Credit Agreement, any of the other Loan Documents, or any
other instrument evidencing any liability of a Borrower, and the Guarantor
shall be and remain liable to such Agent or such Lender for the amounts so
repaid or recovered to the same extent as if such amount had never originally
been paid to the Agent or such Lender.
Section 10. Subrogation. Upon the making by the Guarantor of any
payment hereunder for the account of the Borrower, the Guarantor shall be
subrogated to the rights of the payee against the Borrower; provided, however,
that the Guarantor shall not enforce any right or receive any payment by way of
subrogation or otherwise take any action in respect of any other claim or cause
of action the Guarantor may have against a Borrower arising by reason of any
payment or performance by the Guarantor pursuant to this Guaranty, unless and
until all of the Guaranteed Obligations have been indefeasibly paid and
performed in full. If any amount shall be paid to the Guarantor on account of
or in respect of such subrogation rights or other claims or causes of action,
the Guarantor shall hold such amount in trust for the benefit of the Agents and
the Lenders and shall forthwith pay such amount to the Managing Agent to be
credited and applied against the Guaranteed Obligations, whether matured or
unmatured, in accordance with the terms of the Credit Agreement or to be held
by the Managing Agent as collateral security for any Guaranteed Obligations
existing.
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Section 11. Payments Free and Clear.
(a) All payments by the Guarantor of principal of, and interest
on, Loans and all other Guaranteed Obligations shall be made free and clear of
and without deduction for any present or future excise, stamp or other taxes,
fees, duties, levies, imposts, charges, deductions, withholdings or other
charges of any nature whatsoever imposed by any taxing authority in the United
States of America, but excluding (1) franchise taxes, (2) any taxes (other than
withholding taxes that do not constitute back-up withholding taxes) that would
not be imposed but for a connection between an Agent or a Lender and the
jurisdiction imposing such taxes (other than a connection arising solely by
virtue of the activities of an Agent or such Lender pursuant to or in respect
of this Agreement or any other Loan Document), (3) any withholding taxes
payable with respect to payments hereunder or under any other Loan Document
under Applicable Law in effect on the Agreement Date, (4) any taxes imposed on
or measured by any Lender's assets, net income, receipts or branch profits, and
(5) any taxes arising after the Agreement Date solely as a result of or
attributable to a Lender changing its designated Lending Office after the date
such Lender becomes a party hereto (such non-excluded items being collectively
called "Taxes"). If any withholding or deduction from any payment to be made
by the Guarantor hereunder is required in respect of any Taxes pursuant to any
Applicable Law, then such Guarantor will:
(i) pay directly to the relevant Governmental Authority
the full amount required to be so withheld or deducted;
(ii) promptly forward to the Disbursing Agent an official
receipt or other documentation reasonably satisfactory to the
Disbursing Agent evidencing such payment to such Governmental
Authority; and
(iii) pay to the Disbursing Agent for its account or the
account of the applicable Lender, as the case may be, such additional
amount or amounts as is necessary to ensure that the net amount
actually received by the Disbursing Agent or such Lender will equal
the full amount that the Disbursing Agent or such Lender would have
received had no such withholding or deduction been required .
(b) If the Guarantor fails to pay any Taxes when due to the
appropriate Governmental Authority or fails to remit to the Disbursing Agent,
for its account or the account of the respective Lender, as the case may be,
the receipts or other documentary evidence described in subsection (a)(ii)
above, the Guarantor shall indemnify the Disbursing Agent and the Lenders for
any incremental Taxes, interest or penalties that may become payable by the
Disbursing Agent or any Lender as a result of any such failure. For purposes
of this Section, a distribution hereunder by the Disbursing Agent or any Lender
to or for the account of any Lender shall be deemed a payment by the Guarantor.
Section 12. Set-off. In addition to any rights now or hereafter
granted under any of the other Loan Documents or Applicable Law and not by way
of limitation of any such rights, the Guarantor hereby authorizes each Lender,
at any time or from time to time, without any prior notice to the Guarantor or
to any other Person, any such notice being hereby expressly waived, to
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set-off and to appropriate and to apply any and all deposits (general or
special, including, but not limited to, indebtedness evidenced by certificates
of deposit, whether matured or unmatured) and any other indebtedness at any
time held or owing by any Lender, or any affiliate of any Lender, to or for the
credit or the account of the Guarantor against and on account of any of the
Guaranteed Obligations, although such obligations shall be contingent or
unmatured. Each Lender agrees to give the Guarantor prompt notice after the
exercise by the Lender of such right of set-off but the failure of a Lender to
give such notice shall not affect the validity of any such set-off. The
Guarantor agrees, to the fullest extent permitted by Applicable Law, that any
Participant may exercise rights of setoff or counterclaim and other rights with
respect to its participation as fully as if such Participant were a direct
creditor of the Guarantor in the amount of such participation.
Section 13. Subordination. The Guarantor hereby expressly
covenants and agrees for the benefit of the Agents and the Lenders that all
obligations and liabilities of the Borrowers to the Guarantor of whatever
description, including without limitation, all intercompany receivables of the
Guarantor from the Borrower (collectively, the "Junior Claims") shall be
subordinate and junior in right of payment to all Guaranteed Obligations. If
an Event of Default shall have occurred and be continuing, then the Guarantor
shall not accept any direct or indirect payment (in cash, property, securities
by setoff or otherwise) from the Borrower on account of or in any manner in
respect of any Junior Claim until all of the Guaranteed Obligations have been
indefeasibly paid in full.
Section 14. Avoidance Provisions. It is the intent of the
Guarantor, the Agents and the Lenders that in any Proceeding, the Guarantor's
maximum obligation hereunder shall equal, but not exceed, the maximum amount
which would not otherwise cause the obligations of the Guarantor hereunder (or
any other obligations of the Guarantor to the Agents and the Lenders) to be
avoidable or unenforceable against the Guarantor in such Proceeding as a result
of Applicable Law, including without limitation, (a) Section 548 of the
Bankruptcy Code of 1978, as amended (the "Bankruptcy Code") and (b) any state
fraudulent transfer or fraudulent conveyance act or statute applied in such
Proceeding, whether by virtue of Section 544 of the Bankruptcy Code or
otherwise. The Applicable Laws under which the possible avoidance or
unenforceability of the obligations of the Guarantor hereunder (or any other
obligations of the Guarantor to the Agents and the Lenders) shall be determined
in any such Proceeding are referred to as the "Avoidance Provisions."
Accordingly, to the extent that the obligations of the Guarantor hereunder
would otherwise be subject to avoidance under the Avoidance Provisions, the
maximum Guaranteed Obligations for which the Guarantor shall be liable
hereunder shall be reduced to that amount which, as of the time any of the
Guaranteed Obligations are deemed to have been incurred under the Avoidance
Provisions, would not cause the obligations of the Guarantor hereunder (or any
other obligations of the Guarantor to the Agents and the Lenders), to be
subject to avoidance under the Avoidance Provisions. This Section is intended
solely to preserve the rights of the Agent and the Lenders hereunder to the
maximum extent that would not cause the obligations of the Guarantor hereunder
to be subject to avoidance under the Avoidance Provisions, and neither the
Guarantor nor any other Person shall have any right or claim under this Section
as against the Agent and the Lenders that would not otherwise be available to
such Person under the Avoidance Provisions.
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Section 15. Information. The Guarantor assumes all
responsibility for being and keeping itself informed of the financial condition
of the Borrowers, and of all other circumstances bearing upon the risk of
nonpayment of any of the Guaranteed Obligations and the nature, scope and
extent of the risks that the Guarantor assumes and incurs hereunder, and agrees
that neither the Agents nor any Lender shall have any duty whatsoever to advise
the Guarantor of information regarding such circumstances or risks.
Section 16. Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY,
AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW YORK APPLICABLE
TO CONTRACTS EXECUTED, AND TO BE FULLY PERFORMED, IN SUCH STATE, AND WITHOUT
REFERENCE TO CONFLICT OF LAWS PRINCIPLES OR PROVISIONS.
Section 17. Jurisdiction; Consent to Service of Process; Waiver
of Jury Trial.
(a) The Guarantor hereby irrevocably and unconditionally submits,
for itself and its property, to the nonexclusive jurisdiction of any New York
State court or Federal court of the United States of America sitting in New
York City, and any appellate court from any thereof, in any action or
proceeding arising out of or relating to this Agreement or the other Loan
Documents, or for recognition or enforcement of any judgment, and each of the
parties hereto hereby irrevocably and unconditionally agrees that all claims in
respect of any such action or proceeding may be heard and determined in such
New York State court or, to the extent permitted by law, in such Federal court.
Each of the parties hereto agrees that a final judgment in any such action or
proceeding shall be conclusive and may be enforced in other jurisdictions by
suit on the judgment or in any other manner provided by law. Nothing in this
Agreement shall affect any right that any Agent or any Lender may otherwise
have to bring any action or proceeding relating to this Agreement or the other
Loan Documents against the Guarantor or its properties in the courts of any
jurisdiction.
(b) The Guarantor hereby irrevocably and unconditionally waives,
to the fullest extent it may legally and effectively do so, any objection which
it may now or hereafter have to the laying of venue of any suit, action or
proceeding arising out of or relating to this agreement or the other Loan
Documents in any New York State or Federal court. Each of the parties hereto
hereby irrevocably waives, to the fullest extent permitted by law, the defense
of an inconvenient forum to the maintenance of such action or proceeding in any
such court.
(c) The Guarantor and each other party hereto consents to service
of process in the manner provided for notices in Section 24. Nothing in this
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(d) Each party hereto hereby waives, to the fullest extent
permitted by applicable law, any right it may have to a trial by jury in
respect of any litigation directly or indirectly arising out of, under or in
connection with this Agreement or any of the other Loan Documents. Each party
hereto (1) certifies that no representative, agent or attorney of any other
party has represented, expressly or otherwise, that such other party would not,
in the event of litigation, seek to enforce the foregoing waiver and (2)
acknowledges that it and the other parties hereto have been induced
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97
to enter into this Agreement and the other Loan Documents, as applicable, by,
among other things, the mutual waivers and certifications in this Section.
Section 18. Loan Accounts. The Agents and each Lender may
maintain books and accounts setting forth the amounts of principal, interest
and other sums paid and payable with respect to the Guaranteed Obligations, and
in the case of any dispute relating to any of the outstanding amount, payment
or receipt of any of the Guaranteed Obligation or otherwise, the entries in
such books and accounts shall be deemed prima facie evidence of the matters set
forth therein. The failure of the Agents or any Lender to maintain such books
and accounts shall not in any way relieve or discharge the Guarantor of any of
its obligations hereunder.
Section l9. Waiver of Remedies. No delay or failure on the part
of the Agents or any Lender in the exercise of any right or remedy it may have
against the Guarantor hereunder or otherwise shall operate as a waiver thereof,
and no single or partial exercise by the Agents or any Lender of any such right
or remedy shall preclude other or further exercise thereof or the exercise of
any other such right or remedy.
Section 20. Termination. This Guaranty shall remain in full
force and effect until indefeasible payment in full of the Guaranties
Obligations and the other Obligations and the termination or cancellation of
the Credit Agreement.
Section 21. Successors and Assigns. Each reference herein to the
Agents or the Lenders shall be deemed to include such Person's respective
successors and assigns (including, but not limited to, any holder of the
Guaranteed Obligations) in whose favor the provisions of this Guaranty also
shall inure, and each reference herein to the Guarantor shall be deemed to
include the Guarantor's successors and assigns, upon whom this Guaranty also
shall be binding. The Lenders may, in accordance with the applicable
provisions of the Credit Agreement, assign, transfer or sell any Guaranteed
Obligation, or grant or sell participations in any Guaranteed Obligations, to
any Person without the consent of, or notice to, the Guarantor and without
releasing, discharging or modifying the Guarantor's obligations hereunder. The
Guarantor hereby consents to the delivery by the Agents or any Lender to any
Assignee or Participant (or any prospective Assignee or Participant) of any
financial or other information regarding the Borrowers or the Guarantor. The
Guarantor may not assign or transfer its obligations hereunder to any Person.
Section 22. Amendments. This Guaranty may not be amended except
in writing signed by the Requisite Lenders (or all of the Lender if required
under the terms of the Credit Agreement), the Agent and the Guarantor.
Section 23. Payments. All payments to be made by the Guarantor
pursuant to this Guaranty shall be made in Dollars, in immediately available
funds to the Managing Agent at the Principal Office, not later than 2:00 p.m.
on the date of demand therefor.
Section 24. Notices. All notices and other communications
required or provided for hereunder shall be in writing (including facsimile
transmission or similar writing) and all such notices and other communications
shall be deemed effective (a) if mailed, when received; (b) if
B-8
98
telecopied, when transmitted, or (c) if hand delivered, when delivered;
provided, however, that any notice of a change of address for notices shall not
be effective until received.
Section 25. Severability. In case any provision of this Guaranty
shall be invalid, illegal or unenforceable in any jurisdiction, the validity,
legality and enforceability of the remaining provisions shall not in any way be
affected or impaired thereby.
Section 26. Headings. Section headings used in this Guaranty are
for convenience only and shall not affect the construction of this Guaranty.
Section 27. Definitions. (a) For the purposes of this Guaranty:
"Proceeding" means any of the following: (i) a voluntary or
involuntary case concerning the Guarantor shall be commenced under the
Bankruptcy Code of 1978, as amended; (ii) a custodian (as defined in such
Bankruptcy Code or any other applicable bankruptcy laws) is appointed for, or
takes charge of, all or any substantial part of the property of the Guarantor
(iii) any other proceeding under any Applicable Law, domestic or foreign,
relating to bankruptcy insolvency, reorganization, winding-up or composition
for adjustment of debts, whether now or hereafter in effect, is commenced
relating to the Guarantor; (iv) the Guarantor is adjudicated insolvent or
bankrupt; (v) any order of relief or other order approving any such case or
proceeding is entered by a court of competent jurisdiction; (vi) the Guarantor
makes a general assignment for the benefit of creditors; (vii) the Guarantor
shall fail to pay, or shall state that it is unable to pay, or shall be unable
to pay, its debts generally as they become due; (viii) the Guarantor shall call
a meeting of its creditors with a view to arranging a composition or adjustment
of its debts; (ix) the Guarantor shall by any act or failure to act indicate
its consent to approval of or acquiescence in any of the foregoing; or (x) any
corporate action shall be taken by the Guarantor for the purpose of effecting
any of the foregoing.
(b) Terms not otherwise defined herein are used herein with the
respective meanings given them in the Credit Agreement.
[Signature on Next Page]
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IN WITNESS WHEREOF, the Guarantor has duly executed and delivered this
Guaranty as of the date and year first written above.
[GUARANTOR]
By:
----------------------------------------
Name:
--------------------------------------
Title:
-------------------------------------
Address for Notices:
-------------------------------------------
-------------------------------------------
-------------------------------------------
Attention:
---------------------------------
Telecopier ( )
--------------------------
Telephone: ( )
------------------------
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EXHIBIT C
FORM OF NOTICE OF BORROWING
__________________, _____
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: 01-10-08
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit
Agreement dated as of April 20, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Allied Capital Corporation, Allied Capital REIT, Inc., and Allied Capital SBLC
Corporation (the "Borrowers"), the financial institutions initially party
thereto and their assignees under Section 12.5(d) thereof (the "Lenders"),
BankBoston, N.A., as Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent,
NationsBank of Texas, N.A., as Co-Agent, and First Union National Bank, as
Syndication Agent (the "Agents"). Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
1. Pursuant to Section 2.1(b) of the Credit Agreement, the
Company and REIT hereby request that the Lenders make Loans to
[the Company] [REIT] [SBLC] in an aggregate amount equal to
$__________________.
2. The Company and REIT request that such Loans be made available
on ________________, ____.
3. The Company and REIT hereby request that the requested Loans
all be of the following Type:
[CHECK ONE BOX ONLY]
[ ] Base Rate Loans
[ ] LIBOR Loans, each with an initial Interest Period
for a duration of:
[CHECK ONE BOX ONLY] [ ] one month
[ ] two months
[ ] three months
4. The proceeds of this borrowing of Loans will be used for the
following purpose:
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5. The Company and REIT request that the proceeds of this
borrowing of Loans be made available by:
-----------------
The Company and REIT hereby certify to the Disbursing Agent and the
Lenders that as of the date hereof and as of the date of the making of the
requested Loans and after giving effect thereto, (a) no Default or Event of
Default has or shall have occurred and be continuing, and (b) the
representations and warranties made or deemed made by each Borrower and its
Subsidiaries in the Loan Documents to which any of them is a party, are and
shall be true and correct, except to the extent that such representations and
warranties expressly relate solely to an earlier date (in which case such
representations and warranties were true and accurate on and as of such earlier
date) and except for changes in factual circumstances specifically and
expressly permitted under the Credit Agreement. In addition, the Company and
REIT certify to the Disbursing Agent and the Lenders that all conditions to the
making of the requested Loans contained in Article 5 of the Credit Agreement
will have been satisfied at the time such Loans are made.
If notice of the requested borrowing of Loans was previously given by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.1(b) of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
ALLIED CAPITAL REIT, INC.
By:
-------------------------------------
Name:
-----------------------------------
Title:
----------------------------------
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EXHIBIT D
FORM OF NOTICE OF CONTINUATION
_________________, _____
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: 01-10-08
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit
Agreement dated as of April 20, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Allied Capital Corporation, Allied Capital REIT, Inc., and Allied Capital SBLC
Corporation (the "Borrowers"), the financial institutions initially party
thereto and their assignees under Section 12.5(d) thereof (the "Lenders"),
BankBoston, N.A., as Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent,
NationsBank of Texas, N.A., as Co-Agent, and First Union National Bank, as
Syndication Agent (the "Agents"). Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
Pursuant to Section 2.6 of the Credit Agreement, the Company hereby
requests a Continuation of a borrowing of LIBOR Loans under the Credit
Agreement, and in that connection sets forth below the information relating to
such Continuation as required by such Section of the Credit Agreement:
1. The proposed date of such Continuation is _________________,
____.
2. The aggregate principal amount of LIBOR Loans subject to the
requested Continuation is $_______________ and was originally
borrowed by [the Company] [REIT] [SBLC] on ________________,
____.
3. The portion of such principal amount subject to such
Continuation is $__________________.
4. The current Interest Period for each of the LIBOR Loans
subject to such Continuation ends on _________________, ____.
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103
5. The duration of the new Interest Period for each of such LIBOR
Loans or portion thereof subject to such Continuation is:
[CHECK ONE BOX ONLY] [ ] one month
[ ] two months
[ ] three months
The Company hereby certifies to the Agents and the Lenders that as of
the date hereof, as of the proposed date of the requested Continuation, and
after giving effect to such Continuation, no Default or Event of Default has or
shall have occurred and be continuing.
If notice of the requested Continuation was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.6 of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
-----------------------------------
Name:
---------------------------------
Title:
--------------------------------
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104
EXHIBIT E
FORM OF NOTICE OF CONVERSION
_________________, _____
BankBoston, N.A.
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇ ▇▇▇▇▇
Mail Code: 01-10-08
Attention: ▇▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Vice President
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit
Agreement dated as of April 20, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Allied Capital Corporation, Allied Capital REIT, Inc., and Allied Capital SBLC
Corporation (the "Borrowers"), the financial institutions initially party
thereto and their assignees under Section 12.5(d) thereof (the "Lenders"),
BankBoston, N.A., as Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent,
NationsBank of Texas, N.A., as Co-Agent, and First Union National Bank, as
Syndication Agent (the "Agents"). Capitalized terms used herein, and not
otherwise defined herein, have their respective meanings given them in the
Credit Agreement.
Pursuant to Section 2.7 of the Credit Agreement, the Company hereby
requests a Conversion of a borrowing of Loans of one Type into Loans of another
Type under the Credit Agreement, and in that connection sets forth below the
information relating to such Conversion as required by such Section of the
Credit Agreement:
l. The proposed date of such Conversion is _________________,
_____.
2. The Loans to be Converted pursuant hereto are currently:
[CHECK ONE BOX ONLY] [ ] Base Rate Loans
[ ] LIBOR Loans
3. The aggregate principal amount of Loans subject to the
requested Conversion is $____________ and was originally
borrowed by [the Company] [REIT] [SBLC] on ____________,
_____.
4. The portion of such principal amount subject to such
Conversion is $_________________.
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105
5. The amount of such Loans to be so Converted is to be converted
into Loans of the following Type:
[CHECK ONE BOX ONLY]
[ ] Base Rate Loans
[ ] LIBOR Loans, each with an initial Interest Period
for a duration of:
[CHECK ONE BOX ONLY] [ ] one month
[ ] two months
[ ] three months
The Company hereby certifies to the Agents and the Lenders that as of
the date hereof and as of the date of the requested Conversion and after giving
effect thereto, (a) no Default or Event of Default has or shall have occurred
and be continuing, and (b) the representations and warranties made or deemed
made by the Company and its Subsidiaries in the Loan Documents to which any of
them is a party, are and shall be true and correct, except to the extent that
such representations and warranties expressly relate solely to an earlier date
(in which case such representations and warranties were true and accurate on
and as of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement.
If notice of the requested Conversion was given previously by
telephone, this notice is to be considered the written confirmation of such
telephone notice required by Section 2.7 of the Credit Agreement.
ALLIED CAPITAL CORPORATION
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
▇-▇
▇▇▇
▇▇▇▇▇▇▇ ▇
FORM OF NOTE
$_____________________ _________________, 19___
FOR VALUE RECEIVED, the undersigned, [ALLIED CAPITAL CORPORATION and
ALLIED CAPITAL REIT, INC.] [ALLIED CAPITAL SBLC CORPORATION], [each] a Maryland
corporation (the "Borrower[s]"), hereby [jointly and severally] promise[s] to
pay to the order of ___________________________ (the "Lender"), in care of
BankBoston, N.A., as Disbursing Agent (the "Disbursing Agent") at
_______________ __________________________________________, or at such other
address as may be specified by the Disbursing Agent to the Borrower[s], the
principal sum of _______________________ AND ___/100 DOLLARS (or such lesser
amount as shall equal the aggregate unpaid principal amount of Loans made by
the Lender to the Borrower[s] under the Credit Agreement), on the dates and in
the principal amounts provided in the Credit Agreement, and to pay interest on
the unpaid principal amount owing hereunder, at the rates and on the dates
provided in the Credit Agreement.
The date, amount of each Loan made by the Lender to the Borrower[s],
and each payment made on account of the principal thereof, shall be recorded by
the Lender on its books and, prior to any transfer of this Note, endorsed by
the Lender on the schedule attached hereto or any continuation thereof,
provided that the failure of the Lender to made any such recordation or
endorsement shall not affect the obligations of the Borrower[s] to make a
payment when due of any amount owing under the Credit Agreement or hereunder in
respect of such Loans made by the Lender.
This Note is one of the Notes referred to in the Amended and Restated
Credit Agreement dated as of April 20, 1998 (as amended, restated, supplemented
or otherwise modified from time to time in accordance with its terms, the
"Credit Agreement") among Allied Capital Corporation, Allied Capital REIT,
Inc., Allied Capital SBLC Corporation, the financial institutions initially
party thereto and their assignees under Section 12.5(d) thereof, BankBoston,
N.A., as Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent, NationsBank of
Texas, N.A., as Co-Agent, and First Union National Bank, as Syndication Agent,
and evidences Loans made by the Lender thereunder. Terms used but not
otherwise defined in this Note have the respective meanings assigned to them in
the Credit Agreement.
The Credit Agreement provides for the acceleration of the maturity of
this Note upon the occurrence of certain events and for prepayments of Loans
upon the terms and conditions specified therein.
Except as permitted by Section 12.5(d) of the Credit Agreement, this
Note may not be assigned by the Lender to any other Person.
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107
THIS NOTE SHALL BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE
LAWS OF THE STATE OF NEW YORK APPLICABLE TO CONTRACTS EXECUTED, AND TO BE FULLY
PERFORMED, IN SUCH STATE, AND WITHOUT REFERENCE TO CONFLICT OF LAWS PRINCIPLES
OR PROVISIONS.
The Borrower hereby waives presentment for payment; demand, notice of
demand, notice of non-payment, protest, notice of protest and all other similar
notices.
Time is of the essence for this Note.
IN WITNESS WHEREOF, the undersigned has executed and delivered this
Note under seal as of the date first written above.
[ALLIED CAPITAL CORPORATION]
[ALLIED CAPITAL SBLC CORPORATION]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ATTEST:
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[CORPORATE SEAL]
[ALLIED CAPITAL REIT, INC.]
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
ATTEST:
By:
--------------------------------
Name:
------------------------------
Title:
-----------------------------
[CORPORATE SEAL]
F-2
108
SCHEDULE OF LOANS
This Note evidences Loans made under the within-described Credit
Agreement to the Borrower[s], on the dates and in the principal amounts set
forth below, subject to the payments and prepayments of principal set forth
below:
DATE OF LOAN PRINCIPAL AMOUNT PAID UNPAID PRINCIPAL NOTATION
------------ --------- ----------- ---------------- --------
AMOUNT OF LOAN OR PREPAID AMOUNT MADE BY
-------------- ---------- ------ -------
F-3
109
EXHIBIT G
FORM OF OPINION OF COUNSEL
110
EXHIBIT H
FORM OF COMPLIANCE CERTIFICATE
▇▇▇▇▇ Bank N.A.
▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇.▇.
▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇.▇. ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Vice President
Each of the Lenders Party to the Credit
Agreement referred to below
Ladies and Gentlemen:
Reference is made to that certain Amended and Restated Credit
Agreement dated as of April 20, 1998 (as amended, restated, supplemented or
otherwise modified from time to time, the "Credit Agreement"), by and among
Allied Capital Corporation, Allied Capital REIT, Inc., and Allied Capital SBLC
Corporation (the "Borrowers"), the financial institutions initially party
thereto and their assignees under Section 12.5(d) thereof, BankBoston, N.A., as
Disbursing Agent, ▇▇▇▇▇ Bank N.A., as Managing Agent, NationsBank of Texas,
N.A., as Co-Agent, and First Union National Bank, as Syndication Agent (the
"Agents"). Capitalized terms not otherwise defined herein are used herein with
the respective meanings given them in the Credit Agreement.
Pursuant to Section 8.3 of the Credit Agreement, the undersigned
hereby certifies to the Lender as follows:
(l) The undersigned is the chief financial officer of the
Company.
(2) The undersigned has examined the books and records of the
Borrowers and has conducted such other examinations and investigations as are
reasonably necessary to provide this Compliance Certificate.
(3) To the best of the undersigned's knowledge, information and
belief, no Default or Event of Default exists [if such is not the case, specify
such Default or event of Default and its nature, when if occurred and whether
it is continuing and the steps being taken by the Borrower with respect to such
event, condition or failure.]
(4) To the best of the undersigned's knowledge, information and
belief, the representations and warranties made or deemed made by each Borrower
and its Subsidiaries in the Loan Documents to which any of them is a party, are
true and correct on and as of the date hereof except to the extent that such
representations and warranties expressly relate solely to an earlier date (in
which case such representations and warranties shall have been true and
accurate
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on and as of such earlier date) and except for changes in factual circumstances
specifically and expressly permitted under the Credit Agreement.
(5) Attached hereto as Schedule l are the calculations required to
establish whether or not the Company and its Subsidiaries, were in compliance
with the covenants contained in Sections 9.1, 9.2(a)(4), 9.2(b)(3), and 9.4(d).
IN WITNESS WHEREOF, the undersigned has executed this certificate as
of the date first above written.
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Title: of
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Allied Capital Corporation
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