EXHIBIT 10.81
LOAN AGREEMENT
Dated: As of December 20, 2002 Among
KRAMONT OPERATING PARTNERSHIP, L.P. a Delaware limited partnership
("Borrower")
and
FLEET NATIONAL BANK ("Administrative Agent"),
and
FLEET NATIONAL BANK, WILMINGTON TRUST OF PENNSYLVANIA, WACHOVIA
BANK, NATIONAL ASSOCIATION, COMPASS BANK, FIRSTRUST BANK and any other
Lenders, if any, which may become parties to this Agreement ( "Lenders")
----------------
FLEET SECURITIES, INC. ("Arranger")
----------------
TABLE OF CONTENTS
Page
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1. BACKGROUND .......................................................................... 1
1.1 Defined Terms ............................................................... 1
1.2 Borrower .................................................................... 1
1.3 Use of Loan Proceeds ........................................................ 1
1.4 Guaranties .................................................................. 1
1.5 Loan ........................................................................ 1
2. LOAN PROVISIONS ..................................................................... 2
2.1 General Loan Provisions ..................................................... 2
2.1.1 Limit ........................................................... 2
2.1.2 Procedures and Limits ........................................... 3
2.1.3 Funding Procedures .............................................. 3
2.2 Term of Loan ................................................................ 4
2.3 Interest Rate and Payment Terms ............................................. 4
2.3.1 Borrower's Options .............................................. 5
2.3.2 Selection To Be Made ............................................ 5
2.3.3 Notice .......................................................... 5
2.3.4 If No Notice .................................................... 5
2.3.5 Telephonic Notice ............................................... 5
2.3.6 Limits On Options, One Selection Per Month ...................... 5
2.3.7 Payment and Calculation of Interest ............................. 5
2.3.8 Mandatory Principal Payments .................................... 6
2.3.9 Prepayment ...................................................... 7
2.3.10 Maturity ........................................................ 7
2.3.11 Method of Payment; Date of Credit ............................... 7
2.3.12 ▇▇▇▇▇▇▇▇ ........................................................ 8
2.3.13 Default Rate .................................................... 8
2.3.14 Late Charges .................................................... 8
2.3.15 Breakage Fees ................................................... 8
2.4 Loan Fees; Administrative Agent's Fees ...................................... 9
2.4.1 Loan Fees ....................................................... 9
2.4.2 Administrative Agent's Fees ..................................... 9
2.4.3 Line Fee ........................................................ 9
2.4.4 Issuance Fees ................................................... 9
2.4.5 Letter of Credit Fees ........................................... 9
2.5 Acceleration ................................................................ 9
2.6 Additional Provisions Related to Interest Rate Selection .................... 9
2.6.1 Increased Costs ................................................. 9
2.6.2 Illegality ...................................................... 10
2.6.3 Additional LIBO Rate Conditions ................................. 10
2.6.4 Variable Rate Advances .......................................... 11
2.7 Letters of Credit ........................................................... 11
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3. SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS .................................. 14
3.1 Security ................................................................... 14
3.1.1 Mortgage/ Deed of Trust and Security Agreement .................. 14
3.1.2 Collateral Assignment of Leases and Rents ....................... 16
3.1.3 Collateral Assignment of Contracts .............................. 16
3.1.4 Guaranties ...................................................... 16
3.1.5 Environmental Compliance and Indemnification Agreement .......... 16
3.1.6 Ownership Interest and Inter-Company Loan Pledge ................ 16
3.2 Loan Documents and Security Documents ...................................... 16
3.3 Removal of Individual Property as a Borrowing Base Property - Borrower ..... 17
3.4 Removal of Individual Property as a Borrowing Base Property -
Administrative Agent ....................................................... 18
3.5 Additional Borrowing Base Property ......................................... 19
4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES .................................. 19
5. CONDITIONS PRECEDENT ................................................................ 20
5.1 Closing Loan and Funding Initial Loan Advance .............................. 20
5.1.2 Financial Information; No Material Change ....................... 20
5.1.3 Warranties and Representations Accurate ......................... 20
5.1.4 Validity and Sufficiency of Security Documents .................. 21
5.1.5 Litigation ...................................................... 21
5.1.6 Formation Documents and Entity Agreements ....................... 21
5.1.7 Compliance With Law ............................................. 22
5.1.8 Compliance With Financial Covenants ............................. 22
5.1.9 Indemnity/Contribution Agreement ................................ 22
5.1.10 Borrowing Base Property Due Diligence ........................... 22
5.1.11 Condition of Property ........................................... 22
5.1.12 Insurance ....................................................... 23
5.1.13 Third Party Consents and Agreements ............................. 23
5.1.14 Cash Management ................................................. 23
5.1.15 Legal and other Opinions ........................................ 23
5.1.16 No Default ...................................................... 23
6. WARRANTIES AND REPRESENTATIONS ...................................................... 23
6.1 Formation .................................................................. 23
6.2 Proceedings; Enforceability ................................................ 23
6.3 Conflicts .................................................................. 24
6.4 Ownership and Taxpayer Identification Numbers .............................. 24
6.5 Litigation ................................................................. 24
6.6 Information ................................................................ 24
6.7 Taxes ...................................................................... 24
6.8 Financial Information ...................................................... 25
6.9 Control Provisions ......................................................... 25
6.10 Formation Documents ........................................................ 25
6.11 Bankruptcy Filings ......................................................... 25
6.12 Investment Company ......................................................... 25
6.13 Holding Company ............................................................ 25
6.14 Collateral Properties ...................................................... 25
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6.15 Use of Proceeds ............................................................ 27
6.16 Insurance .................................................................. 27
6.17 Deferred Compensation and ERISA ............................................ 27
6.18 Conditions Satisfied ....................................................... 27
6.19 No Default ................................................................. 27
6.20 Other Loan Parties' Warranties and Representations ......................... 27
6.21 Qualification as a REIT .................................................... 27
6.22 Regarding Representations and Warranties ................................... 28
7. AFFIRMATIVE COVENANTS ............................................................... 28
7.1 Notices .................................................................... 28
7.2 Financial Statements; Reports; Officer's Certificates ...................... 28
7.2.1 Annual Statements .................................................... 28
7.2.2 Periodic Statements .................................................. 28
7.2.3 Borrowing Base Property Reports ...................................... 29
7.2.4 SEC Reports .......................................................... 29
7.2.5 Compliance Certificates .............................................. 29
7.2.6 Data Requested ....................................................... 29
7.2.7 Tax Returns .......................................................... 29
7.2.8 Lease Notices ........................................................ 29
7.2.9 Ground Lessor Interest Notices ....................................... 30
7.2.10 Entity Notices ...................................................... 30
7.2.11 Notice of Litigation ................................................ 30
7.3 Existence .................................................................. 30
7.4 Payment of Taxes ........................................................... 30
7.5 Insurance; Casualty, Taking ................................................ 30
7.6 Inspection ................................................................. 31
7.7 Loan Documents ............................................................. 31
7.8 Further Assurances ......................................................... 31
7.9 Books and Records .......................................................... 31
7.10 Business and Operations .................................................... 32
7.11 Title ...................................................................... 32
7.12 Estoppel ................................................................... 32
7.13 ERISA ...................................................................... 32
7.14 Depository Account ......................................................... 33
7.15 Costs and Expenses ......................................................... 33
7.16 Appraisals ................................................................. 34
7.16.1 Appraisal ........................................................... 34
7.16.2 Costs of Appraisal .................................................. 34
7.17 Indemnification ............................................................ 34
7.18 Leasing Matters ............................................................ 35
7.18.1 Administrative Agent's Approval Required ............................ 35
7.18.2 Borrower's Requests ................................................. 35
7.18.3 Response ............................................................ 35
7.18.4 Advance Information ................................................. 35
7.18.5 Preliminary Submission .............................................. 35
7.19 Interest Expense Coverage .................................................. 36
7.20 Leverage Ratio ............................................................. 36
7.21 Fixed Charge Ratio ......................................................... 36
7.22 Net Worth .................................................................. 36
7.23 Borrowing Base Property Covenants .......................................... 37
7.24 Replacement Documentation .................................................. 37
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7.25 Other Covenants ............................................................ 37
7.26 Maintenance of REIT Status ................................................. 37
7.27 Maintenance of NYSE Listing ................................................ 37
7.28 Lenders' Consultants ....................................................... 37
7.28.1 Right to Employ ..................................................... 37
7.28.2 Functions ........................................................... 37
7.28.3 Payment ............................................................. 38
7.28.4 Access .............................................................. 38
7.28.5 No Liability ........................................................ 38
8. NEGATIVE COVENANTS ................................................................. 38
8.1 No Changes to Borrower and other Loan Parties .............................. 38
8.2 Restrictions on Liens ...................................................... 38
8.3 Consolidations, Mergers, Sales of Assets, Issuance and Sale of Equity ...... 39
8.4 Restrictions on Debt ....................................................... 40
8.5 Respecting Collateral Properties ........................................... 40
8.6 Other Business ............................................................. 40
8.7 Change of Control .......................................................... 40
8.8 Forgiveness of Debt ........................................................ 40
8.9 Affiliate Transactions ..................................................... 41
8.10 ERISA ...................................................................... 41
8.11 Bankruptcy Filings ......................................................... 41
8.12 Investment Company ......................................................... 41
8.13 Holding Company ............................................................ 41
8.14 Use of Proceeds ............................................................ 41
8.15 Distributions .............................................................. 41
8.16 Restrictions on Investments ................................................ 41
8.17 Negative Pledges, etc ...................................................... 42
9. SPECIAL PROVISIONS ................................................................. 42
9.1 Legal Requirements ......................................................... 42
9.2 Limited Recourse Provisions ................................................ 42
9.2.1 Borrower Fully Liable ................................................ 42
9.2.2 Certain Non-Recourse ................................................. 42
9.2.3 Additional Matters ................................................... 42
9.3 Payment of Obligations ..................................................... 43
10. EVENTS OF DEFAULT .................................................................. 43
10.1 Default and Events of Default .............................................. 43
10.1.1 Failure to Pay the Loan ............................................. 43
10.1.2 Failure to Make Other Payments ...................................... 43
10.1.3 Note, Security Documents, and Other Loan Documents .................. 43
10.1.4 Default under Other Agreements ...................................... 43
10.1.5 Representations and Warranties ...................................... 44
10.1.6 Affirmative Covenants ............................................... 44
10.1.7 Negative Covenants .................................................. 44
10.1.8 Financial Status and Insolvency ..................................... 44
10.1.9 Loan Documents ...................................................... 44
10.1.10 Judgments .......................................................... 45
10.1.11 ERISA .............................................................. 45
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10.1.12 Change of Control ............................................... 45
10.1.13 Termination of Guaranty or Consent .............................. 45
10.1.14 Generally ....................................................... 45
10.2 Grace Periods and Notice ................................................... 45
10.2.1 No Notice or Grace Period ....................................... 45
10.2.2 Nonpayment of Interest .......................................... 46
10.2.3 Other Monetary Defaults ......................................... 46
10.2.4 Nonmonetary Defaults Capable of Cure ............................ 46
10.2.5 Borrowing Base Property Defaults ................................ 46
11. REMEDIES ........................................................................... 46
11.1 Remedies ................................................................... 46
11.1.1 Accelerate Debt ................................................. 46
11.1.2 Collateralize Letters of Credit ................................. 47
11.1.3 Pursue Remedies ................................................. 47
11.2 Written Waivers ............................................................ 47
11.3 Power of Attorney .......................................................... 47
12. SECURITY INTEREST AND SET-OFF ...................................................... 47
12.1 Security Interest .......................................................... 47
12.2 Set-Off .................................................................... 47
12.3 Right to Freeze ............................................................ 48
12.4 Additional Rights .......................................................... 48
13. THE ADMINISTRATIVE AGENT AND THE LENDERS ........................................... 48
13.1 Rights, Duties and Immunities of the Administrative Agent .................. 48
13.1.1 Appointment of Administrative Agent ............................. 48
13.1.2 Administration of Loan by Administrative Agent .................. 49
13.1.3 Delegation of Duties ............................................ 49
13.1.4 Exculpatory Provisions .......................................... 49
13.1.5 Reliance by Administrative Agent ................................ 50
13.1.6 Notice of Default ............................................... 50
13.1.7 Lenders' Credit Decisions ....................................... 50
13.1.8 Administrative Agent's Reimbursement and Indemnification ........ 51
13.1.9 Administrative Agent in its Individual Capacity ................. 51
13.1.10 Successor Administrative Agent .................................. 51
13.1.11 Duties in the Case of Enforcement ............................... 52
13.2 Respecting Loans and Payments .............................................. 53
13.2.1 Procedures for Loans ............................................ 53
13.2.2 Nature of Obligations of Lenders ................................ 53
13.2.3 Payments to Administrative Agent ................................ 53
13.2.4 Distribution of Liquidation Proceeds ............................ 54
13.2.5 Adjustments ..................................................... 54
13.2.6 Distribution by Administrative Agent ............................ 55
13.2.7 Delinquent Lender ............................................... 55
13.2.8 Holders ......................................................... 56
13.3 Assignment and Participation ............................................... 56
13.3.1 Conditions to Assignment by Lenders ............................. 56
13.3.2 Certain Representations and Warranties .......................... 56
13.3.3 Register ........................................................ 57
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13.3.4 New Notes .......................................................... 58
13.3.5 Participations ..................................................... 58
13.3.6 Disclosure ......................................................... 58
13.3.7 Miscellaneous Assignment Provisions ................................ 58
13.3.8 Assignment by Borrower ............................................. 59
13.4 Administrative Matters .................................................... 59
13.4.1 Amendment, Waiver, Consent, Etc .................................... 59
13.4.2 Deemed Consent or Approval ......................................... 59
13.5 Arranger .................................................................. 60
14. CASUALTY AND TAKING ................................................................ 60
14.1 Casualty or Taking; Obligation To Repair .................................. 60
14.2 Adjustment of Claims ...................................................... 60
14.3 Payment and Application of Insurance Proceeds and Condemnation
Awards .................................................................... 60
14.4 Conditions To Release of Insurance Proceeds ............................... 61
15. GENERAL PROVISIONS ................................................................. 63
15.1 Notices ................................................................... 63
15.2 Limitations on Assignment ................................................. 65
15.3 Further Assurances ........................................................ 65
15.4 Payments .................................................................. 65
15.5 Parties Bound ............................................................. 65
15.6 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial ....... 65
15.6.1 Substantial Relationship ........................................... 65
15.6.2 Place of Delivery .................................................. 65
15.6.3 Governing Law ...................................................... 66
15.6.4 Exceptions ......................................................... 66
15.6.5 Consent to Jurisdiction ............................................ 66
15.6.6 JURY TRIAL WAIVER .................................................. 66
15.7 Survival .................................................................. 67
15.8 Cumulative Rights ......................................................... 67
15.9 Claims Against Administrative Agent or Lenders ............................ 67
15.9.1 Borrower Must Notify ............................................... 67
15.9.2 Remedies ........................................................... 67
15.9.3 Limitations ........................................................ 68
15.10 Regarding Consents ........................................................ 68
15.11 Obligations Absolute ...................................................... 68
15.12 Table of Contents, Title and Headings ..................................... 68
15.13 Counterparts .............................................................. 68
15.14 Satisfaction of Term Sheet ................................................ 68
15.15 Time Of the Essence ....................................................... 68
15.16 No Oral Change ............................................................ 69
15.17 Monthly Statements ........................................................ 69
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EXHIBITS
Exhibits ................................................................ 1
Exhibit A -- Definitions ........................................... EA-1
Exhibit B-1 -- Requisition; Availability Certificate ................. EB-1
Exhibit B-2 -- Notice of Letter of Credit ............................ EB-8
Exhibit C -- Note .................................................. EC-1
Exhibit D -- Authorized Representatives ............................ ED-1
Exhibit E -- Required Property, Hazard and Other Insurance ......... EE-1
Exhibit F -- Ownership Interests and Taxpayer Identification Numbers EF-1
Exhibit G -- Compliance Certificate ................................ EG-1
Exhibit H -- Form of Assignment and Acceptance ..................... EH-1
Exhibit I -- Lenders, Commitment ................................... EI-1
Exhibit J -- Borrowing Base Properties ............................. EJ-1
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SCHEDULES
Schedule 6.14.2(i) ..................................................... 26
Schedule 6.14.4(ii) .................................................... 26
Schedule 6.14.4(iii) ................................................... 26
Schedule 6.14.4(iv) .................................................... 26
Schedule 6.14.5 ........................................................ 26
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LOAN AGREEMENT
This agreement ("Loan Agreement" or "Agreement") is made and entered into
as of the 20th day of December, 2002, by and between Kramont Operating
Partnership, L.P., a Delaware limited partnership having an address at ▇▇▇ ▇.
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇ ("Borrower") and FLEET
NATIONAL BANK, a national banking association, with a place of business at ▇▇▇
▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, WILMINGTON TRUST OF PENNSYLVANIA,
a Pennsylvania state banking institution, with a place of business at Suite 6,
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, WACHOVIA BANK, NATIONAL
ASSOCIATION, a national banking association, with a place of business at ▇▇▇
▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, COMPASS BANK,
an Alabama banking corporation, with a place of business at ▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇ ▇▇▇▇▇, FIRSTRUST BANK, a Pennsylvania
state chartered institution, with a place of business at ▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇, and the other lending institutions which may
become parties to this Agreement pursuant to Section 13.3 (the "Lenders") and
FLEET NATIONAL BANK, a national banking association, with a place of business at
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇, as agent for itself and such
other lending institutions (the "Administrative Agent").
WITNESSETH:
1. BACKGROUND.
1.1 Defined Terms. Capitalized terms used in this Agreement are defined
either in Exhibit A, or in specific sections of this Agreement, or in another
Loan Document, as referenced in Exhibit A.
1.2 Borrower. Borrower is a limited partnership organized under the laws
of the State of Delaware of which the sole general partner is Kramont Realty
Trust ("KRT").
1.3 Use of Loan Proceeds. Borrower has applied to Lenders for a revolving
loan of not to exceed ONE HUNDRED AND TWENTY-FIVE MILLION DOLLARS
($125,000,000.00) ("Loan"), the proceeds of which are to be used to provide
working capital to the Borrower, KRT, and the Borrower Subsidiaries, to provide
funds for acquisitions, development, capital expenditures, and refinancings of
real estate properties by the Borrower, KRT, and the Borrower Subsidiaries, to
pay certain closing and transactional costs as approved by the Administrative
Agent, and for other lawful REIT purposes.
1.4 Guaranties. As an inducement to Lenders to make the Loan, KRT and each
Borrowing Base Property Owner (as defined herein) (severally and collectively
called "Guarantor" or "Guarantors") have agreed to furnish guaranties to the
Administrative Agent, on behalf of the Lenders. The establishment of the
facility provided for herein and the making of the Loan is in the best interest
of each of the Guarantors as the proceeds of the Loan are being, or may be, used
to satisfy Debt of certain of the Guarantors and to make available funds to the
Guarantors for working capital purposes and for acquisitions, development,
capital expenditures, and refinancings of real estate properties. The Lenders
have advised the Borrower that the Lenders will not establish this facility
without the Guaranty from the Guarantors.
1.5 Loan. Subject to all of the terms, conditions and provisions of this
Agreement, and of the agreements and instruments referred to herein, each of the
Lenders agrees severally to make a loan to the Borrower up to a maximum
aggregate principal amount equal to such Lender's Commitment, and Borrower
agrees to accept and repay the Loan.
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2. LOAN PROVISIONS.
2.1 General Loan Provisions.
2.1.1 Limit.
(i) Subject to all of the terms and conditions hereof, the Lenders
hereby agree to lend to Borrower, and Borrower may borrow, reborrow and
repay from time to time sums (the "Loan Advances") between the date hereof
and the Maturity Date, (i) provided that (a) the aggregate of (1)
outstanding principal balance of the Loan plus (2) the L/C Exposure, shall
at no time exceed (a) the lesser of (1) the Established Loan Amount, (2)
the Total Commitments, or (3) the Availability (the lesser of (1), (2) or
(3), the "Maximum Loan Amount"), and (ii) provided, further, unless and
until the repayment in full of the Obligations or the demand by the
Administrative Agent for payment in full of the Obligations, the Borrower
shall not repay any Loan Advances such that the aggregate of (a)
outstanding principal balance of the Loan plus (b) the L/C Exposure, shall
be at any time less than the Minimum Loan Amount (such limitation being
the "Minimum Loan Amount Limitation").
(ii) The Borrower shall have a one time right to elect to increase
the Established Loan Amount to an amount not to exceed One-Hundred and
Twenty-Five Million ($125,000,000.00) Dollars; provided, however, after
such increase the Established Loan Amount shall not exceed the Total
Commitments (as such may be increased after the date hereof) as determined
by the Administrative Agent. Such right may be exercised by the Borrower
by written notice to the Administrative Agent on or before sixty (60) days
after the date hereof, which election shall designate the increased
Established Loan Amount and shall be accompanied by payment of the
required commitment fee in accordance with Section 2.4.1. The Borrower
shall execute, deliver and satisfy, and shall cause each Loan Party to
execute, deliver, and satisfy, any and all documentation and other
conditions reasonably required by the Administrative Agent in order to
evidence and effectuate the increase in the Established Loan Amount. Any
such increase of the Established Loan Amount shall not be effective until
written confirmation from the Administrative Agent to the Borrower and the
Lenders of such increased amount and the confirmation that such amount
does not exceed the Total Commitments. In connection with any increase in
the Established Loan Amount, no Lender shall be required to increase the
amount of such Lender's Commitment.
(iii) The Lenders and the Borrower agree that if none of the
Collateral Properties are located in the State of New York, the Minimum
Loan Amount and the Minimum Loan Amount Limitation shall not be
applicable, Further, if at any time any new Borrowing Base Property is
located in the State of New York, the Minimum Loan Amount Limitation shall
be deemed to be in effect for an adjusted Minimum Loan Amount as mutually
agreed to by the Administrative Agent and the Borrower.
(iv) The obligations of the Lenders hereunder are independent and
not joint. Failure of any Lender to fulfill its obligations hereunder
shall not result in any other Lender becoming obligated to advance more
than its Commitment Percentage of any Loan.
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2.1.2 Procedures and Limits. Until the Maturity Date, the Lenders shall,
subject to compliance with all of the other terms, conditions and provisions of
this Agreement and there then occurring no Default or Event of Default, make
disbursements to Borrower of Loan Advances in installments in accordance with
the following:
(i) Written Requests. Loan Advances shall be made, at Borrower's
written request to Administrative Agent, not more frequently than four (4)
times a month, on the basis of written requests, made in accordance with
the method and procedures described in Section 2.1.3 below; and
Administrative Agent shall act upon such requests within five (5) Business
Days following the receipt of a written request from Borrower for a Loan
Advance, which action may include, without limitation, funding the
requested Loan Advance, or specifying the basis for not funding and, when
applicable, requesting additional information and supporting
documentation. The date on which any Loan Advance is funded (or Letter of
Credit is issued) is herein called a "Drawdown Date."
(ii) Requisitions, Certifications. Each request for a Loan Advance
shall be in writing and in the form attached hereto as Exhibit B-1, and
shall include an updated Availability Certificate in the form of Exhibit
B-1 attached hereto. Each such request shall specify (i) the amount of the
Loan Advance requested, (ii) the purpose of the Loan Advance requested,
(iii) the aggregate outstanding principal balance of the Loan plus L/C
Exposure, (iv) the then aggregate remaining amount which may be funded
under the Notes, and (v) calculations evidencing the Borrower's continued
compliance with the Financial Covenants. Each request for a Loan Advance
hereunder shall be for (a) a minimum amount of $1,000,000.00, and (b) an
amount not to exceed (x) the Maximum Loan Amount less (y) the aggregate of
the then outstanding principal balance of the Loan plus L/C Exposure, and
shall be irrevocable and binding on Borrower and shall obligate Borrower
to accept the Loan Advance requested from respective Lenders on the
proposed Drawdown Date.
2.1.3 Funding Procedures. The following terms and provisions shall apply
to any Loan Advance:
(i) Upon the satisfaction of the conditions set forth in this
Section 2.1, to the extent applicable, Administrative Agent on behalf of
the Lenders will either (x) deposit into a Depository Account of the
Borrower or (y) disburse to, or for the benefit of, the Borrower or any
Borrower Subsidiary (as directed by the Borrower), the amount of the Loan
Advance requested by Borrower pursuant to this Section 2.1 provided the
Administrative Agent has received from the Lenders immediately available
funds not later than 1:00 p.m. (Eastern time) on the proposed Drawdown
Date (to the extent immediately available funds are received later than
1:00 p.m (Eastern time), Administrative Agent, on behalf of the Lenders,
will make the deposit into the Depository Account on the following
Business Day), provided that if Borrower's request for a Loan Advance so
specifies, instead of making such deposit, Administrative Agent on behalf
of the Lenders shall fund all or a portion of such Loan Advance received
by the Administrative Agent from the Lenders directly by wire transfer of
immediately available funds to a third party (in accordance with wiring
instruction specified in such request), in which event such funds shall be
wired by no later than 2:00 p.m. (Eastern time) on the proposed Drawdown
Date.
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(ii) Each request for a Loan Advance hereunder shall constitute a
representation and warranty by Borrower that the conditions set forth in
Section 5.1 hereof, as the case may be, have been satisfied on the date of
such request and will be satisfied on the proposed Drawdown Date (with
respect to Section 5.1.3, notwithstanding that the representations and
warranties of Borrower in Section 6 may be limited to being made as of the
date of this Agreement or as of any proposed Drawdown Date), unless
otherwise disclosed in writing to the Administrative Agent prior to or at
the time of such request. Notwithstanding any such disclosure, the
disclosure by Borrower to Administrative Agent that one or more of the
conditions set forth in Section 5.1 hereof are not satisfied as of the
date of Borrower's request for a Loan Advance or will not be satisfied as
of the proposed Drawdown Date shall entitle Lender to refuse to make the
Loan Advance requested by Borrower.
(iii) If any Event of Default shall occur and be continuing, the
Administrative Agent may, by notice to Borrower, terminate the obligation
of the Lenders to fund Loan Advances in respect of the then unfunded
portion of the Notes, and, upon such notice being given, such obligation
of the Lenders to make any further Loan Advances in respect of the then
unfunded portion of the Notes shall terminate immediately and the Lenders
shall be relieved of all further obligations to make any Loan Advances to
Borrower.
2.2 Term of Loan.
2.2.1 The Loan shall be for a term (the "Term") commencing on the
date hereof and ending on December 20, 2005 (such date, the Loan
Termination Date (if applicable), or such earlier date as the Loan is
accelerated upon an Event of Default, the "Maturity Date").
2.2.2 The Borrower shall have the right to terminate the Loan prior
to the originally scheduled Maturity Date by providing the Administrative
Agent with fifteen (15) days written notice of the Borrower's intention to
terminate the Loan (the date of such termination being the "Loan
Termination Date"). In the event that the Borrower provides such written
notice to the Administrative Agent, (i) such notice shall be irrevocable,
(ii) as of the date of the notice, the Lenders shall have no further
obligation to make or issue, and the Borrower shall have no further right
to receive or request, any Loan Advances or any Letters of Credit
hereunder, and (iii) the Borrower shall be obligated on the Loan
Termination Date to (x) pay in full all accrued interest, principal and
other charges due with respect to the Loan, including, without limitation,
any Breakage Fees due on account of such payment and (y) either (1)
provide Administrative Agent with cash collateral equal to the outstanding
amount of all outstanding Letters of Credit from a source other than the
proceeds of the Loan or (2) return all outstanding Letters of Credit to
the Administrative Agent. If such cash collateral is posted, such funds
shall be held in an interest bearing account at the Administrative Agent,
shall be pledged to secure the Obligations, and shall be refunded to the
Borrower upon the return to the Administrative Agent, or the expiration,
of all of the Letters of Credit and the payment in full of the
Obligations.
2.3 Interest Rate and Payment Terms. The Loan shall be payable as to
interest and principal in accordance with the provisions of this Agreement and
the Note. This Agreement also provides for interest at a Default Rate, Late
Charges and prepayment rights and fees. All payments for the account of Lenders
shall be applied to the respective accounts of the Lenders in accordance with
each Lender's Commitment Percentage of the Loan. Any and all interest rate
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selection and conversion provisions in this Agreement are to be administered by
the Administrative Agent and to be allocated on a pro rata basis to the portion
of the balance due under Note held by each Lender based upon such Lender's
Commitment Percentage.
2.3.1 Borrower's Options. Principal amounts outstanding under the
Loan shall bear interest at the following rates, at Borrower's selection,
subject to the conditions and limitations provided for in this Agreement:
(i) Variable Rate or (ii) Effective LIBO Rate.
2.3.2 Selection To Be Made. Borrower shall select, and thereafter
may change the selection of, the applicable interest rate, from the
alternatives otherwise provided for in this Agreement, by giving
Administrative Agent a Notice of Rate Selection (in accordance with the
requirements of Section 2.3.3, below): (i) prior to each Loan Advance,
(ii) prior to the end of each Interest Period applicable to an Effective
LIBO Rate Advance, or (iii) on any Business Day on which Borrower desires
to convert an outstanding Variable Rate Advance to an Effective LIBO Rate
Advance.
2.3.3 Notice. A "Notice of Rate Selection" shall be a written
notice, given by cable, tested telex, telecopier (with authorized
signature), or by telephone if immediately confirmed by such a written
notice, from an Authorized Representative of Borrower which: (i) is
irrevocable; (ii) is received by Administrative Agent not later than 10:00
a.m. (Eastern time): (a) if a Effective LIBO Rate is selected, at least
two (2) Business Days prior to the first day of the Interest Period to
which such selection is to apply, (b) if a Variable Rate is selected, on
the first day of the Interest Period to which it applies; and (iii) as to
each selected interest rate option, sets forth the aggregate principal
amount(s) to which such interest rate option(s) shall apply and the
Interest Period(s) applicable to each Effective LIBO Rate Advance.
2.3.4 If No Notice. If Borrower fails to select an interest rate
option in accordance with the foregoing prior to a Loan Advance, or prior
to the last day of the applicable Interest Period of an outstanding
Effective LIBO Rate Advance, or if an Effective LIBO Rate Advance is not
available, any new Loan Advance made shall be deemed to be a Variable Rate
Advance, and on the last day of the applicable Interest Period all
outstanding principal amounts of the applicable Effective LIBO Rate
Advance shall be deemed converted to a Variable Rate Advance.
2.3.5 Telephonic Notice. Without any way limiting Borrower's
obligation to confirm in writing any telephonic notice, Administrative
Agent may act without liability upon the basis of telephonic notice
believed by Administrative Agent in good faith to be from Borrower prior
to receipt of written confirmation. In each case Borrower hereby waives
the right to dispute Administrative Agent's record of the terms of such
telephonic Notice of Rate Selection in the absence of manifest error.
2.3.6 Limits On Options, One Selection Per Month. Each Effective
LIBO Rate Advance shall be in a minimum amount of $1,000,000.00. At no
time shall there be outstanding a total of more than seven (7) Effective
LIBO Rate Advances combined at any time. If Borrower shall make more than
one (1) Effective LIBO Rate interest rate selection in any thirty (30) day
period, excluding conversions of outstanding advances made at the end of
an applicable Interest Period of any previously outstanding Effective LIBO
Rate Advance, Administrative Agent may impose and Borrower shall pay a
reasonable processing fee for each such additional selection.
2.3.7 Payment and Calculation of Interest. All interest shall be:
(a) payable in arrears commencing January 1, 2003 and on the same day of
each month thereafter until
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the principal together with all interest and other charges payable with respect
to the Loan shall be fully paid; and (b) calculated on the basis of a 360 day
year and the actual number of days elapsed. Each change in the Prime Rate shall
simultaneously change the Variable Rate payable under this Agreement. Interest
at the Effective LIBO Rate shall be computed from and including the first day of
the applicable Interest Period to, but excluding, the last day thereof.
2.3.8 Mandatory Principal Payments.
(i) If, on any day, the aggregate of (a) the outstanding principal
balance of the Loan, plus (b) the L/C Exposure, exceeds the Maximum Loan
Amount, then the Borrower shall make a principal payment to the
Administrative Agent, on behalf of the Lenders, in the amount of such
excess, including, without limitation, any payment required to comply with
the terms of Section 3.4, below, in immediately available funds within
thirty (30) days of demand from the Administrative Agent; provided,
however, if during such thirty (30) day period the Borrower delivers to
the Administrative Agent satisfactory Funding Evidence, such thirty (30)
day period shall be extended for such additional time as is determined by
the Administrative Agent to be required for Borrower, acting in due
diligence, to obtain such funds, not to exceed an additional sixty (60)
days.
(ii) If at any time or from time to time the Borrower shall suffer a
Major Event of Loss with respect to a Borrowing Base Property or any
Borrowing Base Property as to which an Event of Loss (other than a Major
Event of Loss) has occurred is not, or ceases to be, a Restoration
Property, then the Borrower shall prepay the Loan in an amount equal to
the Release Price, if any, of such Borrowing Base Property in immediately
available funds within five (5) Business Days of the later of (x) written
demand from the Administrative Agent or (y) the receipt of the applicable
Net Proceeds by the applicable Loan Party.
(iii) If at any time or from time to time the Borrower shall suffer
a Major Event of Loss with respect to a Collateral Property (which is not
a Borrowing Base Property) or any Collateral Property (which is not a
Borrowing Base Property) as to which an Event of Loss (other than a Major
Event of Loss) has occurred is not, or ceases to be, a Restoration
Property, then the Borrower shall prepay the Loan in an amount equal to
the Net Proceeds relating to such Major Event of Loss or Event of Loss in
immediately available funds within five (5) Business Days of the later of
(x) written demand from the Administrative Agent or (y) the receipt of the
applicable Net Proceeds by the applicable Loan Party.
(iv) In connection with the release of the Lien in favor of the
Administrative Agent on behalf of the Lenders on any Borrowing Base
Property in accordance with Section 3.3, the Borrower shall prepay the
Loan in an amount equal to the Release Price, if any, of the said
Borrowing Base Property simultaneously with, or prior to, the release of
the said Lien.
(v) If the Borrower shall sell or otherwise transfer a Collateral
Property (which is not a Borrowing Base Property), then the Borrower shall
prepay the Loan in an amount equal to the net proceeds received from the
Borrower on account thereof in immediately available funds within five (5)
Business Days of the later of (x) written demand from the Administrative
Agent or (y) the receipt of the net proceeds of such sale or transfer by
the applicable
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Loan Party (any payment due under subsections (i), (ii), (iii),(iv), or
(v), a "Mandatory Principal Payment").
(vi) During any period in which the Minimum Loan Amount Limitation
is in effect, if the application of any Mandatory Principal Payment to the
Obligations would cause the Loan Balance Test to not be met, at
Administrative Agent's option, the Borrower shall deposit a portion of the
Mandatory Principal Payment equal to the Excess Payment Amount in an
interest bearing account at the Administrative Agent which shall be
pledged to the Administrative Agent, on behalf of the Lenders, to secure
the Obligations. Thereafter, if at any time the Loan Balance Test is met,
the Administrative Agent shall have the right to apply all or a portion of
the Excess Payment Amount in such account toward payment of the
Obligations provided that the Loan Balance Test at all times remains in
compliance. Further, thereafter, if at any time the Minimum Loan Amount
Limitation shall not be in effect, Administrative Agent shall have the
right to apply any amounts in such account toward payment of the
Obligations. Upon and during the continuance of an Event of Default,
Administrative Agent shall have the right to apply any amounts in such
account toward payment of the Obligations.
(vii) The entire principal balance of the Loan shall be due and
payable in full on the Maturity Date.
2.3.9 Prepayment. The Loan or any portion thereof may be prepaid in full
or in part at any time upon five (5) days, prior written notice to the
Administrative Agent without premium or penalty with respect to Variable Rate
Advances and, with respect to Effective LIBO Rate Advances subject to the
Breakage Fee. Any Mandatory Principal Prepayment and any other partial
prepayment of principal shall first be applied to the principal due in the
reverse order of maturity, and no such partial prepayment shall relieve Borrower
of the obligation to pay each installment of principal when due. Any amounts
prepaid may be reborrowed subject to the terms hereof.
(i) Neither all nor any portion of the principal which bears
interest at the Effective LIBO Rate may or shall be prepaid prior to the
last day of the applicable interest Period, except upon five (5) days'
prior written notice to Administrative Agent and the payment to
Administrative Agent of any amounts required pursuant to Section 2.3.15.
(ii) Once written notice of intention to prepay is given, the Loan,
or the applicable portion thereof, shall become due and payable in full on
the date specified in the notice of prepayment and the failure to so
prepay the loan on such date, together with any amounts required pursuant
to Section 2.3.15, shall constitute an Event of Default.
2.3.10 Maturity. At Maturity all accrued interest, principal and other
charges due with respect to the Loan shall be due and payable in full and the
principal balance and such other charges, but not unpaid interest, shall
continue to bear interest thereafter at the Default Rate until so paid.
2.3.11 Method of Payment; Date of Credit. All payments of interest,
principal and fees shall be made in lawful money of the United States in
immediately available funds, without counterclaim or setoff and free and clear
of, and without any deduction or withholding for, any taxes or other payments:
(a) by direct charge to an account of
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Borrower maintained with Administrative Agent (or the then holder of the Loan),
or (b) by wire transfer to Administrative Agent or (c) to such other bank or
address as the holder of the Loan may designate in a written notice to Borrower.
Payments shall be credited on the Business Day on which immediately available
funds are received prior to 1:00 p.m. (Eastern time); payments received after
1:00 p.m. (Eastern time) shall be credited to the Loan on the next Business Day.
Payments which are by check, which Administrative Agent may at its option accept
or reject, or which are not in the form of immediately available funds shall not
be credited to the Loan until such funds become immediately available to
Administrative Agent, and, with respect to payments by check, such credit shall
be provisional until the item is finally paid by the payor bank.
2.3.12 ▇▇▇▇▇▇▇▇. Administrative Agent may submit monthly ▇▇▇▇▇▇▇▇
reflecting payments due; however, any changes in the interest rate which occur
between the date of billing and the due date may be reflected in the billing for
a subsequent month. Neither the failure of Administrative Agent to submit a
billing nor any error in any such billing shall excuse Borrower from the
obligation to make full payment of all Borrower's payment obligations when due.
2.3.13 Default Rate. Administrative Agent shall have the option of
imposing, and Borrower shall pay upon billing therefor, an interest rate which
is four percent (4.0%) per annum above the Effective LIBO Rate or Variable Rate
then in effect with respect to Loan Advances (as the case may be) ("Default
Rate"): (a) while any monetary Default exists and is continuing, during that
period between the due date and the date of payment; (b) following any Event of
Default, unless and until the Event of Default is waived by Administrative
Agent; and (c) after Maturity. Borrower's right to select pricing options shall
cease upon the occurrence of a monetary Default or following any Event of
Default.
2.3.14 Late Charges. Borrower shall pay, upon billing therefor, a late
charge (herein, the "Late Charge") equal to five percent (5%) of the amount of
any payment of principal, other than principal due at Maturity, interest, or
both, which is not paid within ten (10) days of the due date thereof. Late
charges are: (a) payable in addition to, and not in limitation of, the Default
Rate, (b) intended to compensate Administrative Agent for administrative and
processing costs incident to late payments, (c) are not interest, and (d) shall
not be subject to refund or rebate or credited against any other amount due.
2.3.15 Breakage Fees. Borrower shall pay to Administrative Agent,
immediately upon request and notwithstanding contrary provisions contained in
any of the Loan Documents, such amounts as shall, in the conclusive judgment of
Administrative Agent (in the absence of manifest error), compensate
Administrative Agent and the Lenders for the loss, cost or expense which it may
reasonably incur as a result of (i) any payment or prepayment, under any
circumstances whatsoever, whether voluntary or involuntary, of all or any
portion of an Effective LIBO Rate Advance on a date other than the last day of
the applicable Interest Period of an Effective LIBO Rate Advance, (ii) the
conversion, for any reason whatsoever, whether voluntary or involuntary, of any
Effective LIBO Rate Advance to a Variable Rate Advance on a date other than the
last day of the applicable interest Period, (iii) the failure of all or a
portion of a Loan which was to have borne interest at the Effective LIBO Rate
pursuant to the request of Borrower to be made under the Loan Agreement (except
as a result of a failure by any Lender to fulfill such Lender's obligations to
fund), or (iv) the failure of Borrower to borrow in accordance with any request
submitted by it for an Effective LIBO Rate Advance. Such amounts payable by
Borrower shall be equal to any administrative costs actually incurred plus any
amounts required to compensate for any loss, cost or expense
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incurred by reason of the liquidation or redeployment of deposits or other
funds acquired by Administrative Agent or any Lender to fund or maintain an
Effective LIBO Rate Advance (herein, collectively, the "Breakage Fee").
2.4 Loan Fees; Administrative Agent's Fees.
2.4.1 Loan Fees. Borrower shall pay Administrative Agent a
commitment fee in accordance with the written agreement between the
Borrower and the Administrative Agent, such commitment fee to be for the
benefit of any Lender only to the extent agreed to by the Administrative
Agent and such Lender.
2.4.2 Administrative Agent's Fees. Borrower shall pay to the
Administrative Agent for its own account an annual administrative fee
payable quarterly in arrears in accordance with the written agreement
between the Borrower and the Administrative Agent, such administrative fee
to not be for the benefit of any Lender. The first and last payments of
such administrative fee are to be prorated based upon the partial calendar
quarters to which they apply.
2.4.3 Line Fee. Borrower agrees to pay an unused line fee (the "Line
Fee") to Administrative Agent for the pro rata benefit of the Lenders
calculated at the rate of the Line Percentage multiplied by the average
daily amount during each quarter or portion thereof from the date hereof
to the Maturity Date by which the Total Commitments exceeds the aggregate
of (i) the outstanding principal balance of the Loan and (ii) the L/C
Exposure. The Line Fee shall be payable to the Administrative Agent, for
the pro rata benefit of the Lenders, quarterly in arrears on the first day
of each calendar quarter for the immediately preceding calendar quarter or
portion thereof, with a final payment on the Maturity Date and the first
and last payments to be prorated based upon the partial calendar quarters
to which they apply.
2.4.4 Issuance Fees. Upon the issuance of a Letter of Credit,
Borrower shall pay to the Administrative Agent for its own account an
issuance fee in the amount of one-eighth of one percent (0.125%) of the
face amount of each Letter of Credit.
2.4.5 Letter of Credit Fees. Borrower agrees to pay a Letter of
Credit fee to Administrative Agent for the pro rata benefit of the Lenders
equal to the effective Applicable Margin for LIBO Rate Loans, as set forth
herein, per annum of the face amount of each Letter of Credit, payable
quarterly in arrears. The first and last payments of such Letter of Credit
fee are to be prorated based upon the partial calendar quarters to which
they apply.
2.5 Acceleration. The Administrative Agent may, and upon the request of
the Required Lenders or as provided for in Section 13.1.11(ii), shall,
accelerate the Loan, following an Event of Default which at the time of such
acceleration is continuing. Upon such an acceleration, all principal, accrued
interest, Breakage Fee, and costs and expenses shall be due and payable together
with interest on such principal at the Default Rate from the date of the Event
of Default until paid.
2.6 Additional Provisions Related to Interest Rate Selection.
2.6.1 Increased Costs. If, due to any one or more of: (i) the
introduction of any applicable law or regulation or any change (other than
any change by way of imposition or increase of reserve requirements
already referred to in the definition of Effective LIBO Rate) in the
interpretation or application by any authority charged with
-9-
the interpretation or application thereof of any law or regulation; or
(ii) the compliance with any guideline or request from any governmental
central bank or other governmental authority (whether or not having the
force of law) (an event described in the preceding clause (i) or (ii) an
"Increased Cost Event"), there shall be an increase in the cost to any
Lender of agreeing to make or making, funding or maintaining Effective
LIBO Rate Advances, including without limitation changes which affect or
would affect the amount of capital or reserves required or expected to be
maintained by any Lender, with respect to all or any portion of the Loan,
or any corporation controlling any Lender, on account thereof, then
Borrower from time to time shall, upon written demand by Administrative
Agent, additional amounts sufficient to indemnify any Lender against the
increased cost. A certificate as to the amount of the increased cost and
the reason therefor submitted to Borrower by Administrative Agent, in the
absence of manifest error, shall be conclusive and binding for all
purposes. Notwithstanding the foregoing, Borrower shall only be
responsible for increased costs described in this paragraph which are
incurred with respect to Effective LIBO Rate Advances that (a) are made
after written notice to Borrower by Administrative Agent of an Increased
Cost Event and (b) are outstanding as of the date of such notice to
Borrower by Administrative Agent of an Increased Cost Event, provided such
notice is given to Borrower within thirty (30) days of the occurrence of
the Increased Cost Event.
2.6.2 Illegality. Notwithstanding any other provision of this
Agreement, if the introduction of or change in or in the interpretation of
any law, treaty, statute, regulation or interpretation thereof shall make
it unlawful, or any central bank or government authority shall assert by
directive, guideline or otherwise, that it is unlawful, for any Lender to
make or maintain Effective LIBO Rate Advances or to continue to fund or
maintain Effective LIBO Rate Advances then, on written notice thereof and
demand by Administrative Agent to Borrower, (a) the obligation of
Administrative Agent to make Effective LIBO Rate Advances and to convert
or continue any Loan as Effective LIBO Rate Advances shall terminate and
(b) Borrower shall convert all principal outstanding under this Agreement
into Variable Rate Advances.
2.6.3 Additional LIBO Rate Conditions. The selection by Borrower of
a Effective LIBO Rate and the maintenance of the Effective LIBO Rate
Advance at such rate shall be subject to the following additional terms
and conditions:
A. Availability. If, before or after Borrower has selected to
take or maintain an Effective LIBO Rate Advance, but before the
Interest Period with respect thereto commences, the Administrative
Agent notifies Borrower that:
(a) dollar deposits in the amount and for the maturity
requested are not available to Lenders in the London interbank
market at the rate specified in the definition of LIBO Rate set
forth above, or
(b) reasonable means do not exist for Administrative Agent to
determine the Effective LIBO Rate for the amounts and maturity
requested, then the principal which would have been an Effective
LIBO Rate Advance shall be a Variable Rate Advance.
B. Payments Net of Taxes. All payments and prepayments of
principal and interest under this Agreement shall be made net of any
taxes and costs resulting from having principal outstanding at or
computed with reference,
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to a Effective LIBO Rate. Without limiting the generality of the
preceding obligation, illustrations of such taxes and costs are
taxes, or the withholding of amounts for taxes, of any nature
whatsoever including income, excise, interest equalization taxes
(other than United States or state income taxes) as well as all
levies, imposts, duties or fees whether now in existence or as the
result of a change in or promulgation of any treaty, statute,
regulation, or interpretation thereof or any directive guideline or
otherwise by a central bank or fiscal authority (whether or not
having the force of law) or a change in the basis of, or the time of
payment of, such taxes and other amounts resulting therefrom.
Notwithstanding the foregoing, the Lenders shall not seek
reimbursement for such taxes and costs that are attributable to a
payment or prepayment of principal or interest previously made,
except as to Effective LIBO Rate Advances that are made after
written notice to Borrower by Administrative Agent of the event
giving rise to any increase in such tax or cost.
2.6.4 Variable Rate Advances. Each Variable Rate Advance shall
continue as a Variable Rate Advance until Maturity of the Loan, unless
sooner converted, in whole or in part, to an Effective LIBO Rate Advance,
subject to the limitations and conditions set forth in this Agreement.
2.7 Letters of Credit.
2.7.1 Borrower has requested the Administrative Agent, and
Administrative Agent has agreed, until the Maturity Date and subject to
compliance with all of the other terms, conditions and provisions of this
Agreement and there then occurring no Default or Event of Default, to
issue on behalf of the Lenders one or more letters of credit
(individually, a "Letter of Credit" and collectively, "Letters of Credit")
for the Borrower as the account party in an aggregate amount not to exceed
the lesser of (1) the difference between (x) the Maximum Loan Amount and
(y) the then outstanding principal amount of the Loan plus the L/C
Exposure or (2) Ten Million Dollars ($10,000,000.00). The Borrower shall
give the Administrative Agent written notice in the form of Exhibit B-2
attached hereto(each a "Notice of Letter of Credit") that it requires the
issuance of a Letter of Credit not later than 11:00 a.m. (Eastern time) on
the fourth (4th) Business Day preceding the requested date for issuance
thereof under this Agreement (or such later date as the Administrative
Agent may in its sole discretion agree to). Such notice shall be
irrevocable unless and until such request is denied by the Administrative
Agent and shall specify (i) the aggregate amount of the requested Letters
of Credit, (ii) the individual amount of each requested Letter of Credit
and the number of Letters of Credit to be issued, (iii) the date of such
issuance (which shall be a Business Day), (iv) the name and address of the
beneficiary and if other than the Borrower, the name and address of the
Borrower Subsidiary for whose account the Letter of Credit will be issued,
(v) the expiration date of the Letter of Credit, (vi) the purpose and
circumstances for which such Letter of Credit is being issued, (vii) the
terms upon which each such Letter of Credit may be drawn down (which terms
shall not leave any discretion to Administrative Agent), (viii) that no
Default or Event of Default has occurred or is continuing both before and
after giving effect to such issuance, (ix) that no material adverse change
in the financial condition of Borrower has occurred, (x) that the Borrower
and all Loan Parties are in compliance in all material respects with all
covenants set forth herein after giving effect to such issuance, (xi) that
all representations and warranties made under the Loan Documents (other
than representations and warranties which speak as of a specific date or
as to which the Administrative Agent has previously been advised in
writing by the Borrower are no longer true and correct) are true, correct
and complete in all material respects as if made as of the date of such
issuance, and (xii) the L/C Exposure. No later
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than 10:00 a.m. (Eastern time), on the date that is four (4) Business Days
prior to the date of issuance, the Borrower shall specify a precise
description of the documents and the verbatim text of any certificate to
be presented by the beneficiary of such Letter of Credit, which if
presented by such beneficiary prior to the expiration date of the Letter
of Credit would require the Administrative Agent to make a payment under
the Letter of Credit; provided, that Administrative Agent may, in its
reasonable judgment, require changes in any such documents and
certificates only in conformity with changes in customary and commercially
reasonable practice or law. In determining whether to pay on such Letter
of Credit, the Administrative Agent shall be responsible only to determine
that the documents and certificates required to be delivered under the
Letter of Credit have been delivered and that they comply on their face
with the requirements of that Letter of Credit.
2.7.2 In the event that prior to the Maturity Date, the beneficiary
of any Letter of Credit draws all or a portion of the amount thereof, then
the portion so drawn shall be treated as a Loan Advance under the Notes,
and shall bear interest at the Variable Rate (as defined in the Notes) and
shall be treated as a Variable Rate Advance under, and shall otherwise be
payable on the same terms and conditions hereof (provided that the portion
so drawn shall not be deemed to be a new Loan Advance for purposes of
calculating the Availability, to the extent the issuance of the Letter of
Credit shall have so reduced such Availability in accordance with the
terms of this Agreement). The foregoing is not intended to prohibit
Borrower from converting such Variable Rate Advance to an Effective LIBO
Advance in accordance with the provisions of the Notes.
2.7.3 Each Letter of Credit shall be issued using the standard form
of letter of credit then being used by Administrative Agent (which
standard form shall, at Borrower's request, be provided by Administrative
Agent to Borrower prior to the issuance of any Letter of Credit), and
shall have an expiration date no later than thirty (30) days prior to the
Maturity Date.
2.7.4 Notwithstanding anything to the contrary contained in this
Agreement or the Notes, in no event shall Borrower have the right to pay
off the entire indebtedness evidenced by the Notes and, in connection
therewith, advise Administrative Agent and the applicable Lenders that it
unconditionally waives its right to obtain further applicable Loan
Advances and Letters of Credit under the Loan (i.e., Borrower desires to
cancel the applicable Notes) unless Borrower either (i) provides
Administrative Agent with cash collateral equal to the outstanding amount
of the Letters of Credit from a source other than the proceeds of the Loan
or (ii) returns all outstanding Letters of Credit to the Administrative
Agent. If such cash collateral is posted, such funds shall be held in an
interest bearing account at the Administrative Agent for the benefit of
the Lenders, shall be pledged to secure the Obligations, and shall be
refunded to the Borrower upon the return to the Administrative Agent, or
the expiration, of all of the Letters of Credit and the payment in full of
the Obligations.
2.7.5 Upon the issuance of each Letter of Credit, a participation
therein, in an amount equal to each Lender's Commitment Percentage, shall
automatically be deemed granted by the Administrative Agent to each Lender
on the date of such issuance and each Lender shall automatically be
obligated, to reimburse the Administrative Agent to the extent of its
Commitment Percentage for all obligations incurred by the Administrative
Agent to third parties in respect of such Letters of Credit, if not
otherwise deemed to be a Loan Advance hereunder.
-12-
2.7.6 The Administrative Agent may accept or pay any draft presented
to it, regardless of when drawn and whether or not negotiated, if such
draft, the other required documents and any transmittal advice are
presented to the Administrative Agent and dated on or before the
expiration date of the Letter of Credit under which such draft is drawn.
The Administrative Agent may honor as complying with the terms of the
Letter of Credit and with this Agreement any drafts or other documents
otherwise in order signed or issued by an administrator, executor,
conservator, trustee in bankruptcy, debtor in possession, assignee for
benefit of creditors, liquidator, receiver or other legal representative
of the party authorized under such Letter of Credit to draw or issue such
other drafts or other documents.
2.7.7 The Uniform Customs and Practice for Documentary Credits (1993
Revision), International Chamber of Commerce Publication No. 500, and any
subsequent revisions thereof approved by a Congress of the International
Chamber of Commerce and adhered to by the Administrative Agent (the
"Uniform Customs and Practice"), shall be binding on the Borrower and the
Administrative Agent except to the extent otherwise provided herein, in
any Letter of Credit or in any other Loan Document. Anything in the
Uniform Customs and Practice to the contrary notwithstanding:
(i) None of the Loan Parties nor any beneficiary of any Letter
of Credit shall be deemed an agent of the Administrative Agent.
(ii) With respect to any Letter of Credit, neither the
Administrative Agent nor its correspondents shall be responsible for
or shall have any duty to ascertain:
A. the genuineness of any signature;
B. the validity, sufficiency, accuracy, genuineness or legal
effect of any endorsements;
▇. ▇▇▇▇▇ in giving, or failure to give, notice of arrival,
notice of refusal of documents or of discrepancies in respect of
which the Administrative Agent refuses the documents or any other
notice, demand or protest;
D. the performance by any beneficiary under any Letter of
Credit of such beneficiary's obligations to the Borrower or any Loan
Party;
E. inaccuracy in any notice received by the Administrative
Agent; or
F. the validity, sufficiency, accuracy, genuineness or legal
effect of any instrument, draft, certificate or other document
required by such Letter of Credit to be presented before payment of
a draft, or the office held by or the authority of any Person
signing any of the same.
(iii) The obligations of the Borrower under the Loan Documents
are absolute, unconditional, and irrevocable and shall be performed
strictly in accordance with the terms hereof under all
circumstances, whatsoever, including the following:
A. any lack of validity or enforceability or restriction,
restraint, or stay in the enforcement of this Agreement, the Letters
of Credit, or any other
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agreement or instrument relating thereto, unless the Administrative
Agent is restrained or stayed from honoring a drawing under the
subject Letter of Credit;
B. any amendment or waiver of, or consent to the departure
from, the Letters of Credit, unless the said amendment, waiver or
consent has been made in accordance with the Administrative Agent's
procedures with respect thereto and with the written authorization
or acknowledgment of the Administrative Agent; or
C. the existence of any claim, set-off, defense, or other
right which the Borrower may have at any time against the
beneficiary of the Letters of Credit.
(iv) The occurrence of any of the events referred to in the
preceding clauses of this Section 2.7.7 shall not affect or prevent
the vesting of any of the Administrative Agent's rights or powers
hereunder or the Borrower's obligation to make reimbursement of
amounts paid under any Letter of Credit or any draft accepted
thereunder.
(v) All directions, correspondence, and funds transfers
relating to the Letter of Credit are at the risk of the Borrower.
Administrative Agent shall have discharged Administrative Agent's
obligations under the Letter of Credit by the initiation of the
method of payment called for in any drawing which includes payment
instructions (or by any other commercially reasonable and comparable
method). The Lenders and, unless caused by the gross negligence or
willful misconduct of the Administrative Agent, the Administrative
Agent shall not have any responsibility to the Borrower for any
inaccuracy, interruption, error, or delay in transmission or
delivery by post, telegraph or cable, or for any inaccuracy of
translation.
(vi) The Borrower recognizes that:
A. Administrative Agent has no financial or other interests in
the beneficiary of Letters of Credit.
B. Administrative Agent is irrevocably obligated to honor a
proper drawing under the Letters of Credit.
C. In the event of any conflict between the provisions of this
Agreement and the Uniform Customs and Practice, the provisions of
this Agreement shall govern.
3. SECURITY FOR THE LOAN; LOAN AND SECURITY DOCUMENTS.
3.1 Security. The Loan together with interest thereon and all other
charges and amounts payable by, and all other obligations of, Borrower and the
other Loan Parties to the Administrative Agent and/or each of the Lenders,
whenever incurred, direct or indirect, absolute or contingent, arising under or
with respect to this Agreement, the Security Documents, or any other Loan
Document, together with all other Obligations, shall be secured by the following
collateral (the "Collateral") which Borrower agrees to provide and maintain, or
cause to be provided and maintained (whether provided for each in separate
agreements or combined with various other agreements):
3.1.1 Mortgage/ Deed of Trust and Security Agreement.
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(i) A first priority mortgage/deed of trust (as applicable) and
security agreement (individually and collectively, the "Mortgage") granted
by each Borrowing Base Property Owner to the Administrative Agent or a
trustee on behalf of the Administrative Agent, as applicable, on behalf of
the Lenders, on (i) each Collateral Property, (ii) all land, improvements,
furniture, fixtures, equipment, and other assets (including, without
limitation, property management agreements, contracts, contract rights,
accounts, Licenses and Permits and general intangibles), including all
after-acquired property, owned, or in which each Borrowing Base Property
Owner has or obtains any interest, in connection with each Collateral
Property; (iii) all insurance proceeds and other proceeds therefrom, and
(iv) all other assets of each Borrowing Base Property Owner, whether now
owned or hereafter acquired and related to each Collateral Property.
(ii) In the event that any Collateral Property is ground leased by
the Borrowing Base Property Owner, the reference herein to the "Mortgage"
shall include (i) if the ground lessor is an Affiliate of any Loan Party
and the fee interest has not been separately mortgaged by such Affiliate,
the said ground lessor joining in the Mortgage to include within the
Collateral the fee interest in the said Collateral Property or (ii) if the
ground lessor is not an Affiliate of any Loan Party or, if the ground
lessor is an Affiliate of any Loan Party and the fee interest has been
separately mortgaged by such Affiliate, an estoppel certificate from the
ground lessor in form and substance acceptable to the Administrative
Agent.
(iii) Each Mortgage shall secure the payment and performance of the
Obligations, except that for certain of the Collateral Properties, the
Administrative Agent may agree to limit the recourse to any Collateral
Property to a Maximum Property Amount (each Maximum Property Amount
established as of the Closing Date is set forth in Exhibit J, annexed
hereto).
(iv) At the option of the Administrative Agent, each Mortgage shall
be either (x) a first priority mortgage/deed of trust (as applicable) and
security agreement granted by the applicable Borrowing Base Property Owner
to the Administrative Agent or a trustee on behalf of the Administrative
Agent, as applicable, on behalf of the Lenders, or (y) an amendment,
restatement and consolidation of a first priority mortgage/deed of trust
(as applicable) and security agreement acquired by the Administrative
Agent, on behalf of the Lenders, with proceeds of a Loan Advance.
(v) In the event that in connection with the granting of any
Mortgage on a Borrowing Base Property, the Administrative Agent, on behalf
of the Lender, purchases by assignment an existing mortgage loan or loans
on such Borrowing Base Property, the Borrower represents, warrants,
covenants and agrees as follows:
(a) The request for the Administrative Agent to purchase by
assignment such loan or loan shall constitute a representation and
warranty by the Borrower that (i) all signatures by the Borrower,
any Borrower Subsidiary and all other persons or entities on the
assigned promissory note, mortgage, and all other documents,
instruments, and agreements executed in connection therewith are
genuine, (ii) such documents set forth the entire agreement binding
on the Lenders with
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respect to the loan arrangement evidenced thereby, (iii) the
applicable Borrowing Base Property Owner is absolutely and
unconditionally indebted under said documents and does not have any
offsets, defenses, or counterclaims thereunder, or otherwise against
the lender thereunder, or any predecessor in interest to such
lender;
(b) The Borrower waives, on its own behalf and on the behalf
of KRT and the Loan Parties, any offsets, defenses or counterclaims
that exist or may have existed with respect to such assigned loan
arrangement and assigned documents; and
(c) The Borrower shall cause to be delivered to the
Administrative Agent such documents, instruments and agreements as
the Administrative Agent shall reasonably require in order to
evidence and effectuate such assignment and the terms and conditions
hereof.
3.1.2 Collateral Assignment of Leases and Rents. A first priority
collateral assignment of leases and rents (individually and collectively,
the "Assignment of Leases and Rents") granted by each Borrowing Base
Property Owner to the Administrative Agent, on behalf of the Lenders, with
respect to all Leases of each Collateral Property and all income and
profits to be derived from the operation and leasing of each Collateral
Property.
3.1.3 Collateral Assignment of Contracts. A first priority
collateral assignment and security agreement granted by each Borrowing
Base Property Owner to the Administrative Agent, on behalf of the Lenders,
with respect to all Licenses and Permits and all contracts, agreements and
warranties now owned or hereafter acquired by each Collateral Property
Owner and related in any manner to each Collateral Property.
3.1.4 Guaranties. The unconditional, continuing guaranty (singly and
collectively the "Guaranty") from the Guarantor, pursuant to which each
Guarantor shall guaranty the prompt, punctual, and faithful payment of the
Loan and the performance of all Borrower's other Obligations to the
Administrative Agent and each of the Lenders under the Loan Documents.
3.1.5 Environmental Compliance and Indemnification Agreement. A
compliance and indemnification agreement with respect to environmental
matters ("Environmental Indemnity") from Borrower and each Guarantor in
favor of the Administrative Agent and each of the Lenders.
3.1.6 Ownership Interest and Inter-Company Loan Pledge. A first
priority pledge granted to the Administrative Agent, on behalf of the
Lenders, with respect to (i) the one-hundred (100%) percent ownership
interest in each Borrowing Base Property Owner and each manager/general
partner of a Borrowing Base Property Owner and (ii) any inter-company
loans from time to time due from any Borrowing Base Property Owner to the
Borrower.
3.2 Loan Documents and Security Documents. The Loan shall be made,
evidenced, administered, secured and governed by all of the terms, conditions
and provisions of the following loan documents (the "Loan Documents"), each as
the same may be hereafter modified or amended, consisting of: (i) this Loan
Agreement; (ii) a separate promissory note in the form of Exhibit C, annexed
hereto, payable to each Lender in the aggregate principal amount of Established
Loan Amount (as such amount may be increased as provided for herein) (together
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with any additional Notes delivered as provided herein, "Note"); (iii) the
various documents and agreements referenced in Section 3.1, above, and (iv) any
other documents, instruments, or agreements heretofore or hereafter executed to
further evidence or secure the Loan.
The Loan Documents, referenced in items 3.1.1 through and including 3.1.6,
together with any such other Loan Documents as may be executed in accordance
with Section 3.5, below, as to any Collateral Property, are sometimes referred
to herein, singly and collectively as the "Security Documents".
3.3 Removal of Individual Property as a Borrowing Base Property -
Borrower. From time to time during the term of this Agreement following (i)
Borrower's written request ("Collateral Release Request") indicating that (x)
the Borrower intends to sell or refinance the subject Borrowing Base Property or
(y) the removal of one or more Borrowing Base Properties is necessary to cure or
remedy a Default hereunder, and (ii) satisfaction of the Release Conditions, the
Administrative Agent shall release such Borrowing Base Property from the Lien
held by the Administrative Agent, release the subject Borrowing Base Property
Owner from the Guaranty, terminate the assignments made by such Borrowing Base
Property Owner pursuant to Sections 3.1.2 and 3.1.3, and release its Lien upon
the ownership interest in such Borrowing Base Property Owner and its manager or
general partner which was pledged by the Borrower as Collateral pursuant to
Section 3.1.6, and thereafter such Borrowing Base Property Owner shall no longer
be a Loan Party for the purposes of this Agreement (provided, however, any such
release by the Administrative Agent shall not be deemed to terminate or release
such Borrowing Base Property Owner from any obligation or liability under any
Loan Document which specifically by its terms survives the said release or the
payment in full of the Obligations). The "Release Conditions" are the following:
3.3.1 The Borrower shall make a Mandatory Principal Payment equal to
the Release Price, if any, relative to the subject Borrowing Base
Property.
3.3.2 Upon release of the Lien on the subject Borrowing Base
Property, the Financial Covenants shall remain satisfied (or be satisfied
if the release cures a Default which resulted from the Financial Covenants
not being satisfied).
3.3.3 No Default shall exist under this Agreement or the other Loan
Documents at the time of any such release, except for any Default which is
cured or remedied by the removal of such Individual Property from being a
Borrowing Base Property.
3.3.4 No Event of Default shall exist under this Agreement or the
other Loan Documents at the time of the Collateral Release Request or at
the time of any such release, except for any Default which is cured or
remedied by the removal of such Individual Property from being a Borrowing
Base Property.
3.3.5 All representations and warranties contained herein or in the
other Loan Documents shall be true and correct as of the time of any such
release (other than representations and warranties which speak as of a
specific date or which Administrative Agent was notified of were not true
and correct prior to a request for a Loan Advance which was nonetheless
made).
3.3.6 The Borrower shall pay or reimburse the Administrative Agent
for all appraisal fees, title insurance and recording costs, reasonable
legal fees and expenses and other reasonable costs and expenses incurred
by Administrative Agent in connection with the release.
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Any failure of any removal and release requested by the Borrower to meet
all of the Release Conditions shall be deemed a rejection of the proposed
Collateral Release Request and, subject to the other terms and conditions hereof
as to whether any Individual Property is a Borrowing Base Property, such
Borrowing Base Property shall remain a Borrowing Base Property hereunder and
shall be included within the Collateral.
3.4 Removal of Individual Property as a Borrowing Base Property -
Administrative Agent.
3.4.1 An Individual Property shall no longer be deemed to be a
Borrowing Base Property upon the determination by the Administrative Agent
of the occurrence of any of the following:
(i) A Borrowing Base Property is a Non-Stabilized Asset for a
period of twelve (12) consecutive months;
(ii) A Major Event of Loss occurs as to a Borrowing Base
Property;
(iii) A Borrowing Base Property as to which an Event of Loss
occurs is not, or ceases to be, a Restoration Property; or
(iv) The Required Lenders have instructed the Administrative
Agent to remove a Borrowing Base Property if a tenant or tenants
which have Leases of 25,000 rentable square fee or more in the
aggregate in such Borrowing Base Property are subject to bankruptcy
or insolvency proceedings and are not paying rent as required under
such Leases.
3.4.2 At the option of the Administrative Agent, on or after June
30, 2003, the Valley Fair Property shall no longer be deemed to be a
Borrowing Base Property.
3.4.3 Upon any such Individual Property no longer being deemed to be
a Borrowing Base Property, the Borrower shall make a Mandatory Principal
Payment when required equal to the Release Price for such Borrowing Base
Property.
3.4.4 With respect to any Individual Property determined by the
Administrative Agent to no longer be deemed a Borrowing Base Property in
accordance with this Section 3.4, if the Release Conditions are satisfied
with respect thereto, the Administrative Agent shall release such
Individual Property from the Lien held by the Administrative Agent,
release the subject Borrowing Base Property Owner from the Guaranty,
terminate the assignments made by such Borrowing Base Property Owner
pursuant to Sections 3.1.2 and 3.1.3, and release its Lien upon the
ownership interest in such Borrowing Base Property Owner and its manager
or general partner which was pledged by the Borrower as Collateral
pursuant to Section 3.1.6, and thereafter such Borrowing Base Property
Owner shall no longer be a Loan Party for the purposes of this Agreement
(provided, however, any such release by the Administrative Agent shall not
be deemed to terminate or release such Borrowing Base Property Owner from
any obligation or liability under any Loan Document which specifically by
its terms survives the said release or the payment in full of the
Obligations). However, if the said Release Conditions are not satisfied
with respect to such Individual Property, although such Individual
Property shall no longer be a Borrowing Base Property, the Individual
Property shall not be released from the Lien held by the Administrative
Agent (shall continue to be a Collateral Property) and there shall be no
release of the Collateral
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relating to such Individual Property or the subject Borrowing Base
Property Owner, until such time at the Release Conditions are satisfied
with respect thereto.
3.5 Additional Borrowing Base Property. From time to time during the term
of this Agreement following Borrower's written request ("Additional Collateral
Request"), compliance with the provisions of this Section 3.5, and compliance
with the requirements for inclusion as a Borrowing Base Property, as set forth
in the definition thereof, the Required Lenders shall authorize the
Administrative Agent to accept one or more Individual Properties as Borrowing
Base Properties (as identified by the Borrower in its written request) to be
held by the Administrative Agent as Collateral. The Lenders shall agree to the
acceptance of the Individual Property as an additional Borrowing Base Property
only upon the satisfaction of the following conditions, in a manner reasonably
acceptable to the Administrative Agent and the Required Lenders:
3.5.1 The Borrower shall have obtained Preliminary Approval for the
addition of such Individual Property.
3.5.2 The Borrower (or applicable Loan Party) shall have satisfied
all of the Borrowing Base Requirements as to such Individual Property.
3.5.3 No Default by Borrower shall exist under this Agreement or the
other Loan Documents at the time of any such Individual Property becoming
a Borrowing Base Property, except for any Default which is cured or
remedied by such Individual Property becoming a Borrowing Base Property.
3.5.4 No Event of Default shall exist under this Agreement or the
other Loan Documents at the time of the Additional Collateral Request or
at the time of any such Individual Property becoming a Borrowing Base
Property.
3.5.5 All representations and warranties contained herein or in the
other Loan Documents shall be true and correct as of the time of any such
Individual Property becoming a Borrowing Base Property (other than
representations and warranties which speak as of a specific date or which
Administrative Agent was notified of were not true and correct prior to a
request for a Loan Advance which was nonetheless made).
3.5.6 The Borrower shall pay or reimburse the Administrative Agent
for all appraisal fees, title insurance and recording costs, reasonable
legal fees and expenses and other costs and expenses incurred by
Administrative Agent in connection with the additional Borrowing Base
Property.
3.5.7 The Borrower, the subject Borrowing Base Property Owner, and
the subject Individual Property shall have satisfied all applicable
conditions precedent set forth in Article 5 prior to the inclusion of the
Individual Property as a Borrowing Base Property.
Any failure of the proposed Borrowing Base Property to meet all of the
foregoing conditions shall be deemed a rejection of the proposed Borrowing Base
Property for that Additional Collateral Request and such proposed Borrowing Base
Property shall not be included in the Borrowing Base for any purpose unless and
until it is accepted by Administrative Agent and the Required Lenders and all of
the foregoing conditions are satisfied or waived by the Administrative Agent and
the Required Lenders.
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4. CONTINUING AUTHORITY OF AUTHORIZED REPRESENTATIVES. Administrative
Agent and each of the Lenders are authorized to rely upon the continuing
authority of the persons, officers, signatories or agents hereafter designated
("Authorized Representatives") to bind Borrower with respect to all matters
pertaining to the Loan and the Loan Documents including, but not limited to, the
selection of interest rates, the submission of requests for Loan Advances or
Letters of Credit and certificates with regard thereto. Such authorization may
be changed only upon written notice to Administrative Agent accompanied by
evidence, reasonably satisfactory to Administrative Agent, of the authority of
the person giving such notice and such notice shall be effective not sooner than
five (5) Business Days following receipt thereof by Administrative Agent. The
present Authorized Representatives are listed on Exhibit D. The Administrative
Agent shall have a right of approval, not to be unreasonably withheld or
delayed, over the identity of the Authorized Representatives so as to assure
Administrative Agent and each of the Lenders that each Authorized Representative
is a responsible and senior official of Borrower.
5. CONDITIONS PRECEDENT.
5.1 Closing Loan and Funding Initial Loan Advance. It shall be a condition
precedent of Lenders' obligation to close the Loan and to fund the initial
proceeds of the Loan that each of the following conditions precedent be
satisfied in full (as determined by each Lender in its discretion which
discretion shall be exercised in good faith having due regard for the advice of
the Administrative Agent), unless specifically waived in writing by all of the
Lenders at or prior to the date of the closing and funding of the initial Loan
Advance (the "Closing Date") (in the event that the closing of the Loan is an
earlier date than the date of the initial funding of the Loan, then the Closing
Date shall refer to the date of the initial funding of the Loan):
5.1.1 Satisfactory Loan Documents. On the Closing Date, each of the
Loan Documents shall be satisfactory in form, content and manner of
execution and delivery to Administrative Agent and Administrative Agent's
counsel and all Loan Documents shall be in full force and effect.
5.1.2 Financial Information; No Material Change.
(i) No change shall have occurred in the financial condition,
business, affairs, operations or control of Borrower and/or the Loan
Parties, since the date of their respective financial statements of
financial projections most recently delivered to Administrative
Agent or any of the Lenders, which change has had or could
reasonably be expected to have a Material Adverse Effect; and
Borrower and the other Loan Parties shall have furnished
Administrative Agent such other financial information, projections,
and certifications as requested by the Administrative Agent.
(ii) The Borrower shall have provided to the Administrative
Agent such certificates, opinions and other evidence as the
Administrative Agent may reasonably require to evidence that the
Borrower, KRT and each of the Borrowing Base Property Owners (both
before and after giving effect to the Loan) is solvent, has assets
having a fair value in excess of the amount required to pay such
Person's probable liabilities and existing Debts as such become
absolute and mature, and has adequate capital for the conduct of
such Person's business and the ability to pay such Person's Debts
from time to time incurred in connection therewith as such Debts
mature.
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5.1.3 Warranties and Representations Accurate. All warranties and
representations made by or on behalf of any of the Borrower and the other Loan
Parties, or any of them, to Administrative Agent or any of the Lenders shall be
true, accurate and complete in all material respects and shall not omit any
material fact necessary to make the same not misleading.
5.1.4 Validity and Sufficiency of Security Documents. The Security
Documents shall create a valid and perfected lien in and to the Collateral and
each of the Security Documents and related UCC filings shall have been duly
recorded and filed to the satisfaction of Administrative Agent and
Administrative Agent's counsel, including, without limitation, as follows:
(i) On the Closing Date, the Borrower, the other Loan Parties, and
any other Persons executing Loan Documents on the Closing Date shall have
delivered to the Administrative Agent evidence of the completion of all
recordings and filings of, or with respect to, the Security Documents or,
in the case of UCC-1 financing statements, delivery of such financing
statements in proper form for recording, and shall have taken all such
other actions as may be necessary or, in the opinion of the Administrative
Agent, desirable to perfect the Liens and security interests intended to
be created by the Security Documents in the Collateral covered thereby.
Such filings, recordings and other actions shall include, without
limitation, in addition to the Mortgage, the Assignment of Leases and
Rents, and the UCC-1 financing statements; and
(ii) on or prior to the Closing Date, the Administrative Agent shall
have received the results of a UCC, tax lien and judgment search as may be
reasonably requested by the Administrative Agent with respect to the
Borrower, the Borrower Subsidiaries, and any other Loan Parties, and the
results of such search shall indicate there are no judgments or Liens not
permitted under the Loan Documents or to be satisfied with the proceeds of
the initial Loan Advance.
5.1.5 Litigation. On the Closing Date, there shall not be any actions,
suits or proceedings at law or in equity or by or before any governmental
instrumentality or other agency or regulatory authority by any entity (private
or governmental) pending or, to the best of the Borrower's knowledge, threatened
with respect to the Loan, the transactions contemplated in the Loan Documents,
or the Borrower, any other Loan Party, or any other Borrower Subsidiary, which
the Administrative Agent shall determine in good faith could have a Material
Adverse Effect.
5.1.6 Formation Documents and Entity Agreements.
(i) On the Closing Date, the Administrative Agent shall have
received a certificate of an officer of each limited liability company
which is a manager or general partner of a Loan Party or limited
partnership which is a general partner of a Loan Party annexing and
certifying as to (a) resolutions of such limited liability company
authorizing and approving the transactions contemplated by the Loan
Documents, and the execution and delivery thereof by such limited
liability company in respect of the documents to which it is a party on
its own behalf, or as a general partner or manager of such other Loan
Party or limited partnership, in respect of any of the Loan Documents, (b)
signatures and incumbency of all officers of such limited liability
company executing documentation on behalf of such entity or on behalf of
any entity as to which such limited liability company is a general partner
or manager, as the case may be, in connection with the
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transactions contemplated by the Loan Documents, (c) the Formation
Documents of such limited liability company, the Loan Party which it is a
manager or general partner of, the limited partnership which it is general
partner of, and the Loan Party which such limited partnership is a general
partner of, having been duly executed, delivered and filed (to the extent
required by applicable Legal Requirements) and remaining in full force and
effect and unmodified as of the date of such certificate (and annexing
copies thereof) and (d) such limited liability company, the Loan Party
which it is a manager or general partner of, the limited partnership which
it is general partner of, and the Loan Party which such limited
partnership is a general partner of, being in good standing and authorized
to do business in each jurisdiction where the conduct of its business and
ownership of its assets requires such qualification.
(ii) On the Closing Date, the Administrative Agent shall have
received a certificate of the secretary of each corporation which is a
Loan Party or the general partner of another Loan Party or the owner of
the majority beneficial interests of ▇▇▇▇▇▇▇▇▇▇ annexing and certifying as
to (a) corporate resolutions of such entity authorizing and approving the
transactions contemplated by the Loan Documents, and the execution and
delivery thereof by such entity in respect of the documents to which it is
a party on its own behalf, or as a general partner of such other Loan
Party, in respect of any of the Loan Documents, (b) signatures and
incumbency of all officers of such corporation executing documentation on
behalf of such entity or on behalf of any entity as to which such
corporation is a general partner, in connection with the transactions
contemplated by the Loan Documents, (c) the Formation Documents of such
corporation and Loan Party having been duly executed, delivered and filed
(to the extent required by applicable Legal Requirements) and remaining in
full force and effect and unmodified as of the date of such certificate
(and annexing copies thereof) and (d) such corporation and Loan Party
being in good standing and authorized to do business in each jurisdiction
where the conduct of its business and ownership of its assets requires
such qualification.
5.1.7 Compliance With Law. Administrative Agent and each of the Lenders
shall have received and approved evidence that there are no Legal Requirements
which prohibit or adversely limit the capacity or authority of the Borrower or
any Loan Party to enter into the Loan and perform the obligations of such Person
with respect thereto.
5.1.8 Compliance With Financial Covenants. Administrative Agent shall have
received an Officer's Certificate reflecting the Borrower's compliance with the
Financial Covenants and the terms and conditions hereof.
5.1.9 Indemnity/Contribution Agreement. Administrative Agent shall have
received an Indemnity and Contribution Agreement between and among the Borrower,
KRT, and the Borrowing Base Property Owners, in form and substance satisfactory
to the Administrative Agent.
5.1.10 Borrowing Base Property Due Diligence. Administrative Agent shall
have received and completed a review of such due diligence as the Administrative
Agent may require with respect to any Borrowing Base Property, including,
without limitation, satisfaction of the Borrowing Base Property Requirements.
5.1.11 Condition of Property. There shall have been no material uninsured
unrepaired or unrestored damage or destruction by fire or otherwise to any of
the real or
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tangible personal property comprising or intended to comprise the Borrowing Base
Properties.
5.1.12 Insurance. Borrower shall have provided to Administrative
Agent and each of the Lenders with respect to each Borrowing Base
Property, the Borrower and the Collateral evidence of: (i) insurance
coverages which meet the property, hazard, terrorism and other insurance
requirements set forth on Exhibit E of this Loan Agreement to the
satisfaction of Administrative Agent; and (ii) prepayment of the premiums
for such insurance in accordance with the requirements set forth in
Section 7.5.3.
5.1.13 Third Party Consents and Agreements. The Administrative Agent
shall have received such third party consents and agreements as the
Administrative Agent may reasonably require with respect to the Loan.
5.1.14 Cash Management. The Borrower shall open the Depository
Account, as provided for herein.
5.1.15 Legal and other Opinions. Administrative Agent shall have
received and approved legal opinion letters from counsel representing the
Borrower and the other Loan Parties which meet Administrative Agent's
legal opinion requirements and covering such matters incident to the
transactions contemplated herein as the Administrative Agent may request.
5.1.16 No Default. There shall not be any Default under any of the
Loan Documents.
To the extent that the Lenders made the initial funding of the Loan, the Lenders
shall be deemed to have waived the compliance with any of the above conditions
precedent to the closing of the Loan and the funding of the initial proceeds of
the Loan, and the Lenders shall have no further right hereunder to require the
Borrower to comply with such condition precedent so waived as to such initial
funding, except to the extent otherwise agreed to in writing by the Borrower.
This provision shall not be deemed to waive, modify or amend any of terms of any
other section of this Agreement, including, without limitation, Articles 7 and
8.
6. WARRANTIES AND REPRESENTATIONS. The Administrative Agent and the
Lenders acknowledge and agree that all representations and warranties made in
this Section 6 shall be deemed to be made only as of the date hereof; however,
as provided for in Section 6.22, all such representations and warranties shall
be deemed to be reaffirmed as of any proposed Drawdown Date, unless modified by
such additional disclosures as shall be provided to the Administrative Agent in
writing after the date hereof and prior to or with a request for a Loan Advance
and/or the issuance of a Letter of Credit. Subject to such limitations, Borrower
warrants and represents to Administrative Agent and each of the Lenders for the
express purpose of inducing Lenders to enter into this Agreement, to make each
Loan Advance, to issue each Letter of Credit, and to otherwise complete all of
the transactions contemplated hereby as follows
6.1 Formation. Each Loan Party has been duly formed and is validly
existing and in good standing as a corporation, partnership or limited liability
company, as the case may be, under the laws of the State of its formation. Each
Loan Party has the requisite corporate, partnership or company power and
authority, as applicable, to own its assets and conduct its businesses as
currently conducted and owned, and to enter into and perform its obligations
under each Loan Document to which it is a party. Each Loan Party is in good
standing and authorized to do business in each jurisdiction where the ownership
of its assets and/or the conduct of its
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business requires such qualification except where the failure to be so qualified
would not have a Material Adverse Effect.
6.2 Proceedings; Enforceability. Each Loan Party has taken all requisite
corporate, partnership or company action, as applicable, to authorize the
execution, delivery and performance by such Loan Party of the Loan Documents to
which it is a party. Each Loan Document which is required to be executed and
delivered on or prior to the date on which this representation and warranty is
being made has been duly authorized, executed and delivered and constitutes the
legal, valid and binding obligation of each Loan Party thereto, enforceable
against each such Loan Party in accordance with its respective terms except to
the extent that the enforceability thereof may be limited by applicable
bankruptcy, insolvency and similar laws affecting rights of creditors generally
and to general principles of equity (regardless of whether enforcement is sought
in a proceeding in equity or at law).
6.3 Conflicts. Neither the execution, delivery and performance of the Loan
Documents by the Loan Parties or compliance by any Loan Party with the terms and
provisions thereof (including, without limitation, the granting of Liens
pursuant to the Security Documents), (i) will contravene any provision of any
law, statute, rule or regulation or any order, writ, injunction or decree of any
court or governmental instrumentality, (ii) will conflict with or result in any
breach of any of the terms, covenants, conditions of, or constitute a default
under, or result in the creation or imposition (or the obligation to create or
impose) of any Lien (except pursuant to the Security Documents) upon any of the
property or assets of any Loan Party pursuant to the terms of any indenture,
mortgage, deed of trust, credit agreement or loan agreement or any other
agreement, contract or instrument to which any Loan Party is a party or by which
it or any of its properties or assets is bound or to which it may be subject, or
(iii) will violate any provision of any Formation Document of any Loan Party.
6.4 Ownership and Taxpayer Identification Numbers. All of the partners,
owners, stockholders, and members, respectively and as may be applicable, of
each Loan Party (other than the Borrower and KRT) are listed in Exhibit F (as
such may be updated from time to time in accordance with Section 6.22). The
exact correct name and organizational number(s) and federal employment
identification number(s) of the Borrower, KRT and each such Loan Party are
accurately stated in Exhibit F. Each Borrowing Base Property Owner is a
Wholly-Owned Subsidiary of the Borrower or as stated in Exhibit F, ▇▇▇▇▇▇▇▇▇▇ or
KRT.
6.5 Litigation. There are no actions, suits or proceedings at law or in
equity or by or before any governmental instrumentality or other agency or
regulatory authority by any entity (private or governmental) pending or, to the
best of each Loan Party's knowledge, threatened with respect to the Loan, the
transactions contemplated in the Loan Documents, or any other Borrower
Subsidiary, which are not fully covered by an insurance policy issued by a
reputable and financially viable insurance company, or, to the extent not so
covered, could have or reasonably be expected to have a Material Adverse Effect.
6.6 Information. All factual information furnished by or on behalf of the
Borrower or any Loan Party to the Administrative Agent and/or any of the Lenders
(including, without limitation, all information contained in the Loan Documents)
for purposes of or in connection with this Agreement, the other Loan Documents
or any transaction contemplated herein or therein is, and all other such factual
information hereafter furnished by or on behalf of the Borrower or any Loan
Party to the Administrative Agent and/or any of the Lenders will be, true and
accurate in all material respects on the date as of which such information is
dated or certified and not incomplete by omitting to state any fact necessary to
make such information not misleading in any material respect at such time in
light of the circumstances under which such information was provided. There is
no material fact presently known to the Borrower which has
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not been disclosed to Administrative Agent which could have or reasonably be
expected to have a Material Adverse Effect.
6.7 Taxes. All Loan Parties have made all required tax filings and are not
delinquent in the payment of any federal, state and local taxes, assessments,
impositions or other governmental charges applicable to them and/or their
respective assets, except to the extent same are being contested in a manner
which complies with the requirements of Section 8.2.3.
6.8 Financial Information. The financial statements and financial
projections of the Borrower, and the Loan Parties delivered to the
Administrative Agent present fairly the financial conditions of each at the
dates of such statements of financial condition and the results of operations
for the periods covered thereby. Since the dates of the relevant financial
statements, no change has occurred which could have or reasonably be expected to
have a Material Adverse Effect, except as may be disclosed in any update from
time to time in accordance with Section 6.22. All financial statements and
projections of the Borrower, the Borrower Subsidiaries, or any other Loan
Parties hereafter furnished to Administrative Agent or any of the Lenders shall
be true, accurate and complete in all material respects and shall fairly present
the financial condition of Borrower and respective Loan Party as of the date
thereof.
6.9 Control Provisions. The Borrower, controls, directly or indirectly,
and without the requirement for consent of any other Person (other than KRT),
the management of each Borrowing Base Property Owner.
6.10 Formation Documents. The Borrower has delivered or caused to be
delivered to the Administrative Agent true and complete copies of all Formation
Documents of the Loan Parties, and all amendments thereto.
6.11 Bankruptcy Filings. No Loan Party is contemplating either a filing of
a petition under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of its assets or property, and the
Borrower has no knowledge of any Person contemplating the filing of any such
petition against any Loan Party.
6.12 Investment Company. No Loan Party is an "investment company" or a
company "controlled" by an "investment company," within the meaning of the
Investment Company Act of 1940, as amended.
6.13 Holding Company. No Loan Party is 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.
6.14 Collateral Properties.
6.14.1 Each of the Borrowing Base Property Owners possesses such
Licenses and Permits issued by the appropriate federal, state, or local
regulatory agencies or bodies necessary to own and operate each Collateral
Property, except where the failure to possess any such License or Permit
would not have a Material Adverse Effect. The Borrowing Base Property
Owners are in material compliance with the terms and conditions of all
such Licenses and Permits, except where the failure so to comply would
not, singly or in the aggregate, result in a Material Adverse Effect. All
of the Licenses and Permits are valid and in full force and effect, except
where the invalidity of such Licenses and Permits or the failure of such
Licenses and Permits to be in full force and effect would not result in a
Material Adverse Effect. Neither the Borrower nor any of the
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Borrowing Base Property Owners has received any notice of proceedings
relating to the revocation or modification of any such Licenses and
Permits which, singly or in the aggregate, if the subject of an
unfavorable decision, ruling or finding, would result in a Material
Adverse Effect.
6.14.2 (i) The Borrowing Base Property Owners have either (x) fee
simple title to the Collateral Properties or (y) a leasehold estate
interest in the Collateral Properties, as set forth in Schedule
6.14.2(i)(as such may be updated from time to time in accordance with
Section 6.22); (ii) the interest of the Borrowing Base Property Owners in
the Collateral Properties are not subject to any Liens except for those in
favor of the Administrative Agent on behalf of the Lenders securing the
repayment of Obligations and other Permitted Liens, (iii) neither the
Borrower nor any of the Borrowing Base Property Owners has received notice
of the assertion of any claim by anyone adverse to any Loan Party's
ownership, or leasehold rights in and to any Collateral Property (except
as may be disclosed in any update from time to time in accordance with
Section 6.22); (iv) no Person has an option or right of first refusal to
purchase all or part of any Collateral Property or any interest therein
which has not been waived (except as may be disclosed in any update from
time to time in accordance with Section 6.22);
6.14.3 Except to the extent the failure of the following to be true
would not result in a Material Adverse Effect or is disclosed in the
Environmental Reports (as defined in the Environmental Indemnity), (i)
each Collateral Property is free of any Hazardous Materials in violation
of any Environmental Legal Requirements applicable to such property; (ii)
none of the Borrowing Base Property Owners or Borrower has received any
notice of a claim under or pursuant to any Environmental Legal
Requirements applicable to an Collateral Property or under common law
pertaining to Hazardous Materials on or originating from any Collateral
Property (except as may be disclosed in any update from time to time in
accordance with Section 6.22); and (iii) none of the Borrowing Base
Property Owners or Borrower has received any notice from any Governmental
Authority claiming any material violation of any Environmental Legal
Requirements that is uncured or unremediated (except as may be disclosed
in any update from time to time in accordance with Section 6.22);
6.14.4 Except to the extent the failure of the following to be true
would not result in a Material Adverse Effect, (i) with respect to the
Collateral Properties, each Major Lease is in full force and effect
(except as may be disclosed in any update from time to time in accordance
with Section 6.22), (ii) except as set forth in Schedule 6.14.4(ii) (as
such may be updated from time to time in accordance with Section 6.22), to
the Borrower's knowledge, none of the Borrowing Base Property Owners is in
default in the performance of any material obligation under any Major
Lease and the Borrower has no knowledge of any circumstances which, with
the passage of time or the giving of notice, or both, would constitute an
event of default by any party under any of the Major Leases, (iii) except
as set forth in Schedule 6.14.4(iii) (as such may be updated from time to
time in accordance with Section 6.22), to the Borrower's knowledge, no
tenant is in monetary default beyond 30 days or material nonmonetary
default under any Major Lease, (iv) except as otherwise expressly set
forth in Schedule 6.14.4(iv) (as such may be updated from time to time in
accordance with Section 6.22), to the Borrower's Knowledge, there are no
actions, voluntary or involuntary, pending against any tenant under a
Major Lease under any bankruptcy or insolvency laws, and (v) none of the
Major Leases and none of the rents or other amounts payable thereunder has
been assigned, pledged or encumbered by any of the Borrowing Base Property
Owners or any other Person, except with respect to the Lien in favor of
the Administrative Agent on behalf of the Lenders securing the repayment
of Obligations.
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6.14.5 Except to the extent the failure of the following to be true
would not result in a Material Adverse Effect, (i) each Ground Lease is
valid, binding and in full force and effect as against the applicable
Borrowing Base Property Owners and, to the Borrower's knowledge, the other
party thereto, (ii) none of the Ground Leases is subject to any pledge,
lien, assignment, license or other agreement granting to any third party
any interest therein, and (iii) no payments under any Ground Lease are
delinquent and no notice of default thereunder has been sent or received
by any Loan Party which has not been cured or waived prior to the date
hereof, and to the knowledge of the Borrower, there does not exist under
any of the Ground Leases any default by any Borrowing Base Property Owners
or any event which merely with notice or lapse of time or both, would
constitute such a default by any of the Borrowing Base Property Owners,
and (iv) the identity of each ground lessee and whether each such ground
lessee is an Affiliate of any Loan Party are set forth in Schedule 6.14.5.
6.15 Use of Proceeds. The proceeds of the Loan shall be used solely and
exclusively as provided in Section 1.3. No portion of the proceeds of the Loan
shall be used directly or indirectly, and whether immediately, incidentally or
ultimately (i) to purchase or carry any margin stock or to extend credit to
others for the purpose thereof or to repay or refund indebtedness previously
incurred for such purpose, or (ii) for any purpose which would violate or in
inconsistent with the provisions of regulations of the Board of Governors of the
Federal Reserve System including, without limitation, Regulations T, U and X
thereof.
6.16 Insurance. The Collateral Properties are insured by insurers of
recognized financial responsibility against such losses and risks in compliance
with the requirements of Exhibit E hereto.
6.17 Deferred Compensation and ERISA. Neither Borrower nor any other Loan
Party, other than KRT, has any pension, profit sharing, stock option, insurance
or other arrangement or Plan for employees covered by ERISA except as may be
designated to Administrative Agent in writing by Borrower from time to time and,
to the best of the Borrower's Knowledge, no Reportable Event has occurred and is
now continuing with respect to any such ERISA Plan. KRT sponsors The Kramont
Realty Trust 401K Plan, a 401(k) profit sharing plan The granting of the Loan,
the performance by Borrower and/or any of the Loan Parties of their respective
obligations under the Loan Documents and Borrower's and/or such other Loan
Parties' conducting of their respective operations do not and will not violate
any provisions of ERISA.
6.18 Conditions Satisfied. Assuming that the Administrative Agent and the
Lenders have approved or waived all matters requiring their approval, all of the
conditions precedent to closing and funding the initial Loan Advance have been
satisfied or waived.
6.19 No Default. There is no Default on the part of Borrower or any of the
other Loan Parties under this Agreement or any of the other Loan Documents and
no event has occurred and is continuing which could constitute a Default under
any Loan Document.
6.20 Other Loan Parties' Warranties and Representations. Borrower has no
reason to believe that any warranties or representations made in writing by any
of the Loan Parties to the Administrative Agent or any of the Lenders are
untrue, incomplete or misleading in any material respect.
6.21 Qualification as a REIT. KRT qualified as a REIT under the provisions
of the Code, as applicable for its fiscal years ended December 31, 2000 through
December 31, 2001, and from December 31, 2001 through the date hereof. All
appropriate federal income tax returns
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for the fiscal years through December 31, 2001 have been filed by KRT with the
IRS and no previously filed return has been examined and reported on by the IRS.
KRT has not incurred any liability for excise taxes pursuant to Section 4981 of
the Code. KRT is organized in conformity with the requirements for qualification
as a REIT pursuant to Sections 856 through 860 of the Code, and KRT's proposed
method of operation consistent with the KRT's business and the business
activities contemplated by this Agreement will enable it to meet the
requirements for qualification and taxation as a REIT under the Code.
6.22 Regarding Representations and Warranties Each request by any Borrower
for a Loan Advance and/or the issuance of a Letter of Credit: (i) shall
constitute an affirmation by Borrower that the foregoing representations and
warranties remain true and correct as of the date of such request (except as
modified by matters specifically disclosed in writing to Administrative Agent or
as reflected in any update to the representations or warranties, Schedules or
Exhibits referred to in this Article 6 delivered to the Administrative Agent
prior to or simultaneously with such written request) and, unless Administrative
Agent and each of the Lenders is notified to the contrary prior to the
disbursement of the requested Loan Advance or the issuance of the requested
Letter of Credit, will be so on the date of such Loan Advance or issuance of
such Letter of Credit, and (ii) shall constitute the representation and warranty
of Borrower that the information set forth in each such request is true and
correct and omits no material fact necessary to make the same not misleading.
All representations, warranties, covenants and agreements made in this Agreement
or in the other Loan Documents by each Loan Party shall be deemed to have been
relied upon by the Administrative Agent and each of the Lenders notwithstanding
any investigation heretofore or hereafter made by the Administrative Agent
and/or any of the Lenders or on its behalf.
7. AFFIRMATIVE COVENANTS. Borrower covenants and agrees that from the date
hereof and so long as any Obligations remain outstanding, as follows:
7.1 Notices. Borrower shall within five (5) days after it has actual
knowledge thereof, notify Administrative Agent and each of the Lenders in
writing of the occurrence of any act, event or condition which constitutes a
Default or Event of Default under any of the Loan Documents. Such notification
shall include a written statement of any remedial or curative actions which
Borrower proposes to undertake and/or to cause any of other Loan Parties to cure
or remedy such Default or Event of Default.
7.2 Financial Statements; Reports; Officer's Certificates. Borrower shall
furnish or cause to be furnished to Administrative Agent and each of the Lenders
from time to time, the following financial statements, reports, certificates,
and other information, all in form and manner of presentation acceptable to
Administrative Agent:
7.2.1 Annual Statements. Within one hundred five (105) days after
the close of each fiscal year of the Borrower, the Consolidated statements
of financial condition of the Borrower, KRT and each Borrower Subsidiary,
as at the end of such fiscal year and the related Consolidated statements
of income and retained earnings and statements of changes in financial
position for such fiscal year, in each case, commencing with the Fiscal
Year ending December 31, 2002, setting forth comparative figures for the
preceding fiscal year and certified, in the case of the Consolidated
financial statements, by BDO ▇▇▇▇▇▇▇ or other independent certified public
accountants of recognized national standing reasonably acceptable to the
Administrative Agent; such financial statements to include and to be
supplemented by such detail and supporting data and schedules as
Administrative Agent may from time to time reasonably determine;
7.2.2 Periodic Statements Within forty five (45) days after the
close of each
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calendar quarter (except for the quarter ending on December 31), the
following (i) the Consolidated statements of financial condition of the
Borrower, KRT, and each Borrower Subsidiary, internally prepared in
accordance with GAAP, consistently applied, as at the end of such
quarterly period and the related Consolidated statements of income and
retained earnings and statements of changes in financial position for such
quarterly period and for the elapsed portion of the fiscal year ended with
the last day of such quarterly period, in each case commencing with the
Fiscal Year ending December 31, 2002, setting forth comparative figures
for the related periods in the prior fiscal year, subject to normal
year-end audit adjustments, all in form and manner of presentation
acceptable to Administrative Agent, such financial statements to include
and to be supplemented by such detail and supporting data and schedules as
Administrative Agent may from time to time reasonably determine, (ii) an
Officer's Certificate from the Borrower certifying that such financial
statements are true, accurate, and complete and that no Default or Event
of Default has occurred and is continuing, or if it is, a statement as to
the nature thereof, and (iii) an updated Cash Flow Projection specifically
identifying, without limitation, (a) any changes to the Cash Flow
Projections provided in the then prior Officer's Certificate and (b) any
Distributions projected during the next one-hundred and eighty (180) days.
7.2.3 Borrowing Base Property Reports. Quarterly and annually, upon
delivery of each of the financial statements required pursuant to Sections
7.2.1 and 7.2.2, above, the following financial statements for each of the
Borrowing Base Property Owners internally prepared by Borrower and
certified by Borrower to be true, accurate and complete: (i) an operating
statement showing the results of operation for the prior quarter and on a
year-to-date basis for the period just ended and, annually, an operating
statement for the year just ended; (ii) a detailed, current rent roll of
the subject Collateral Property, containing such details as Administrative
Agent may reasonably request, and (iii) cash flows for the quarter just
ended;
7.2.4 SEC Reports. Within ten (10) days of being filed, copies of
all filings by Borrower or KRT with the SEC, and within ten (10) days of
being received, copies of all correspondence from the SEC, other than
routine non-substantive general communications from the SEC.
7.2.5 Compliance Certificates. Within forty-five (45) after the
close of each quarterly accounting period in each fiscal year of the
Borrower, a Compliance Certificate in form of Exhibit G, annexed hereto,
together with an Officer's Certificate from the Borrower providing and
otherwise certifying the compliance or non-compliance by the Borrower with
the Financial Covenants, with such supporting detail as is reasonably
deemed necessary by the Administrative Agent to verify the calculations
incorporated therein.
7.2.6 Data Requested. Within a reasonable period of time and from
time to time such other financial data or information as Administrative
Agent or the Lenders may reasonably request with respect to the Collateral
Properties, the Borrower, and/or the other Loan Parties including, but not
limited to, rent rolls, aged receivables, aged payables, leases, budgets,
forecasts, reserves, cash flow projections, deposit accounts, mortgage
information, physical condition of the Collateral Properties and pending
lease proposals;
7.2.7 Tax Returns. Upon Administrative Agent's request, copies of
all federal and state tax returns of the Borrower and the other Loan
Parties;
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7.2.8 Lease Notices. Concurrently with the giving thereof, and
within ten (10) Business Days of receipt thereof, copies of all notices,
other than routine correspondence, given or received by any Loan Party
and/or other Loan Party with respect to any Major Lease.
7.2.9 Ground Lessor Interest Notices. Concurrently with the giving
thereof, and within five (5) Business Days of receipt thereof, copies of
all notices, other than routine correspondence, given or received by any
Loan Party and/or any other Loan Party with respect to any Ground Lease.
7.2.10 Entity Notices. Concurrently with the issuance thereof,
copies of all material written notices (excluding routine correspondence)
given to the partners, owners, stockholders, and/or members, respectively,
of the Borrower.
7.2.11 Notice of Litigation. Within ten (10) Business Days after an
officer of either Borrower, any Borrower Subsidiary, or any Loan Party
obtains knowledge thereof, written notice of any pending or, to the best
of the Borrowers' knowledge, threatened action, suit or proceeding at law
or in equity or by or before any governmental instrumentality or other
agency or regulatory authority by any entity (private or governmental)
relating in any way to the Loan, the transactions contemplated in the Loan
Documents (including, without limitation, with regard to all
Distributions), or the transactions contemplated in any documentation
executed in connection therewith, or the Borrower, any other Loan Party,
or any other Borrower Subsidiary, which could have or reasonably be
expected to have a Material Adverse Effect.
7.3 Existence. Borrower shall do or cause to be done all things necessary
to (i) preserve, renew and keep in full force and effect (x) the partnership,
company or corporate existence, as applicable, of each Loan Party and (y) the
material rights, licenses, permits and franchises of each Loan Party, (ii)
comply with all laws and other Legal Requirements applicable to it and its
assets, business and operations, the non-compliance with which could have or
reasonably be expected to have a Material Adverse Effect, (iii) to the extent
applicable, at all times maintain, preserve and protect all material franchises
and trade names and all the remainder of its property used or useful in the
conduct of its business, and (iv) to keep and cause each Loan Party to keep, its
assets in good working order and repair, ordinary wear and tear and damage by
casualty or taking by condemnation excepted, and from time to time make, or
cause to be made, all reasonably necessary repairs, renewals, replacements,
betterments and improvements thereto.
7.4 Payment of Taxes. Borrower shall duly pay and discharge, and cause
each Loan Party to duly pay and discharge, before the same shall become overdue,
all taxes, assessments, impositions, and other governmental charges payable by
it or with respect to the Collateral Properties, to the extent that same are not
paid by the tenants under the respective Leases; provided, however, the failure
of any Loan Party to pay such taxes, assessments, impositions, or other
governmental charges shall not constitute a Default or Event of Default as long
as same are being contested in a manner which complies with the requirements of
Section 8.2.3.
7.5 Insurance; Casualty, Taking.
7.5.1 Borrower shall at all times maintain or cause the appropriate
Person to maintain in full force and effect the following insurance: (i)
the Collateral Properties shall be insured by insurers of recognized
financial responsibility against such losses and risks in compliance with
the Major Leases and the requirements set forth in Exhibit E, hereto, and
(ii) all other assets of the Borrower and the Borrower Subsidiaries shall
be
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insured with such insurance as is reasonable and usual for Persons
conducting business operations similar to those of the Borrower and in
compliance with the terms of any secured financing with respect thereto.
7.5.2 Without limiting the generality of the insurance requirements
set forth herein, only if commercially available at commercially
reasonable rates (in an amount reasonably consistent with the amount of
such insurance generally obtained by companies engaging in real estate
business operations of a similar size and nature as that of the Borrower)
either (i) the insurance policies required hereunder shall not include any
so called "terrorist exclusion" or similar exclusion or exception to
insurance coverage relating to the acts of terrorist groups or
individuals, or (ii) excess or blanket coverage with respect thereto shall
be provided, which excess or blanket coverage must be in an amount, from
an insurer, and in accordance with terms and conditions reasonably
acceptable to the Administrative Agent.
7.5.3 All insurance premiums shall be paid in equal quarterly
installments, following payment of an initial installment prior to the
inception of the relevant policy equal to 20% of the total annual premium,
and Administrative Agent shall be provided with evidence of such payment
of insurance premiums upon request.
7.5.4 In the event of any damage or destruction to any Collateral
Property by reason of fire or other hazard or casualty, Borrower shall
give immediate written notice thereof to Administrative Agent. With
respect to any such damage or destruction, the Borrower shall make the
Mandatory Principal Payment, if any is required, set forth herein. If
there is any condemnation for public use of any Collateral Property
Borrower shall give immediate written notice thereof to Administrative
Agent. With respect to any such condemnation, the Borrower shall make the
Mandatory Principal Payment, if any is required, set forth herein.
Further, Borrower shall upon the request of the Administrative Agent
provide to the Administrative Agent a report as to the status of any
insurance adjustment, condemnation claim, or restoration resulting from
any casualty or taking.
7.6 Inspection. Borrower shall cause the other Loan Parties to permit the
Administrative Agent and the Lenders and its/their agents, representatives and
employees to inspect the Collateral Properties, the Collateral, and any and all
other assets of the Borrower or any of the Loan Parties, at reasonable hours
upon reasonable notice.
7.7 Loan Documents. Borrower shall (and shall cause the other Loan Parties
to) observe, perform and satisfy all the terms, provisions, covenants and
conditions to be performed by it under, and to pay when due all costs, fees and
expenses, and other Obligations to the extent required under, the Loan
Documents.
7.8 Further Assurances. Borrower shall and shall cause the other Loan
Parties to execute and deliver to the Administrative Agent and the other Lenders
such documents, instruments, certificates, assignments and other writings, and
do such other acts, necessary or desirable in the reasonable judgment of the
Administrative Agent, to evidence, preserve and/or protect the Collateral at any
time securing or intended to secure the Obligations or for the better and more
effective carrying out of the intents and purposes of this Agreement and the
other Loan Documents.
7.9 Books and Records. Borrower shall and shall cause the other Loan
Parties and Borrower Subsidiaries to keep and maintain in accordance with GAAP
(or such other accounting basis reasonably acceptable to the Administrative
Agent), proper and accurate books, records and accounts reflecting all of the
financial affairs of the Borrower and such other Loan Parties
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and Borrower Subsidiaries and all items of income and expense in connection with
their respective business and operations and in connection with any services,
equipment or furnishings provided in connection with the operation of the
business of the Borrower, the other Loan Parties, and the Borrower Subsidiaries,
whether such income or expense is realized thereby or by any other Person. The
Administrative Agent shall have the right, not more than once each quarter
(unless an Event of Default shall have occurred and be continuing in which case
as often as the Administrative Agent shall determine), during normal business
hours and upon reasonable notice, to examine such books, records and accounts at
the office of the Person maintaining such books, records, correspondence, and
accounts and to make such copies or extracts thereof as the Administrative Agent
shall desire. Borrower shall maintain all of its business records at the address
specified at the beginning of this Agreement. The Administrative Agent may
discuss the financial and other affairs of the Borrower, the other Loan Parties,
and the Borrower Subsidiaries with any of its partners, owners, and any
accountants hired by Borrower, it being agreed that Administrative Agent and
each of the Lenders shall use reasonable efforts to not divulge information
obtained from such examination to others except in connection with Legal
Requirements and in connection with administering the Loan, enforcing its rights
and remedies under the Loan Documents and in the conduct, operation and
regulation of its banking and lending business (which may include, without
limitation, the transfer of the Loan or of participation interests therein). Any
assignee or transferee of the Loan, co-lender, or any holder of a participation
interest in the Loan shall be entitled to deal with such information in the same
manner and in connection with any subsequent transfer of its interest in the
Loan or of further participation interests therein.
7.10 Business and Operations. Borrower shall (and shall cause the other
Loan Parties and Borrower Subsidiaries) to (i) continue to engage in the type of
businesses, acquisition, sale, financing, development and operation of retail
properties and usual and customary uses incidental to such retail activities)
presently conducted by them as of the Closing Date, respectively, and (ii) be
qualified to do business and in good standing under the laws of each
jurisdiction, and otherwise to comply with all Legal Requirements, as and to the
extent the same are required for the ownership, maintenance, management and
operation of the assets of such Person except where the failure to be so
qualified could not have or reasonably be expected to have a Material Adverse
Effect.
7.11 Title. Borrower shall and shall cause the other Loan Parties to (i)
warrant and defend (x) the title to each item of Collateral owned by such Person
and every part thereof, subject only to the Liens (if any) permitted hereunder,
(y) the validity and priority of the Liens and security interests held by the
Administrative Agent pursuant to the Loan Documents, in each case against the
claims of all Persons whomsoever, and (z) the title to and in the Collateral
Properties, and (ii) Borrower and the other Loan Parties shall be responsible,
jointly and severally, to reimburse Administrative Agent and the Lenders for any
losses, costs, damages or expenses (including reasonable attorneys' fees and
court costs) incurred by the Administrative Agent and/or any of the Lenders if
an interest in any item of Collateral, other than as permitted hereunder, is
claimed by another Person.
7.12 Estoppel. Borrower shall (and shall cause the other Loan Parties to),
within ten (10) Business Days after a request therefor from the Administrative
Agent, which request shall not be made by Administrative Agent more than once
each quarter during each Fiscal Year, furnish to the Administrative Agent a
statement, duly acknowledged and certified, setting forth (i) the amount then
owing by Borrower in respect of the Obligations, (ii) the date through which
interest on the Loan has been paid, (iii) any offsets, counterclaims, credits or
defenses to the payment by any Loan Party to the Obligations and (iv) whether
any written notice of Default from Administrative Agent to the Borrower or any
of the other Loan Parties is then outstanding and acknowledging that this
Agreement and the other Loan Documents are in full force and
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effect and unmodified, or if modified, giving the particulars of such
modification.
7.13 ERISA. Borrower shall (and shall cause each of the other Loan Parties
and Borrower Subsidiaries to) as soon as possible and, in any event, within ten
(10) days after any Loan Party, Borrower Subsidiary, or any ERISA Affiliate
knows of the occurrence of any of the following which could have or reasonably
be expected to have a Material Adverse Effect, deliver to Administrative Agent a
certificate of an executive officer of the Borrower setting forth details as to
such occurrence and the action, if any, that the applicable Borrower or other
Loan Party or Borrower Subsidiary or such ERISA Affiliate is required or
proposes to take, together with any notices required or proposed to be given to
or filed with or by such Borrower, Loan Party, the ERISA Affiliate, the PBGC, a
Plan participant or the Plan administrator with respect thereto: (i) that a
Reportable Event has occurred; (ii) that an accumulated funding deficiency has
been incurred or an application may be or has been made to the Secretary of the
Treasury for a waiver or modification of the minimum funding standard (including
any required installment payments) or an extension of any amortization period
under Section 412 of the Code with respect to a Plan; (iii) that a contribution
required to be made to a Plan has not been timely made; (iv) that a Plan has
been or may be terminated, reorganized, partitioned or declared insolvent under
Title IV of ERISA; (v) that a Plan has an Unfunded Current Liability giving rise
to a lien under ERISA or the Code; (vi) that proceedings may be or have been
instituted to terminate or appoint a trustee to administer a Plan; (vii) that a
proceeding has been instituted pursuant to Section 515 of ERISA to collect a
delinquent contribution to a Plan; (viii) that such Borrower, Loan Party,
Borrower Subsidiary, or ERISA Affiliate will or may incur any liability
(including any indirect, contingent, or secondary liability) to or on account of
the termination of or withdrawal from a Plan under Section 4062, 4063, 4064,
4069, 4201, 4204 or 4212 of ERISA or with respect to a Plan under Section
401(a)(29), 4971, 4975 or 4980 of the Code or Section 409 or 502(i) or 502(l) of
ERISA; (ix) or that such Borrower, the Loan Party or Borrower Subsidiary may
incur any material liability pursuant to any employee welfare benefit plan (as
defined in Section 3(l) of ERISA) that provides benefits to retired employees or
other former employees (other than as required by Section 601 of ERISA) or any
employee pension benefit plan (as defined in Section 3(2) of ERISA). Upon the
request of the Administrative Agent, the Borrower shall (and shall cause the
other Loan Parties and Borrower Subsidiaries to) deliver to Administrative Agent
a complete copy of the annual report (Form 5500) of each Plan required to be
filed with the Internal Revenue Service. In addition to any certificates or
notices delivered to Administrative Agent pursuant to the first sentence hereof,
copies of any material notices received by any Borrower, a Loan Party, a
Borrower Subsidiary, or any ERISA Affiliate with respect to any Plan shall be
delivered to Administrative Agent no later than ten (10) days after the date
such report has been filed with the Internal Revenue Service or such notice has
been received by such Borrower, Loan Party or Borrower Subsidiary or ERISA
Affiliate, as applicable.
7.14 Depository Account.
7.14.1 Borrower shall maintain an operating and other depository
account (the "Depository Account") with Fleet National Bank (or any
successor thereto), unless otherwise agreed by Administrative Agent in
writing.
7.14.2 Administrative Agent is hereby authorized, on or after the
due date, to charge such Depository Account of Borrower with the amount of
all payments due under this Agreement, the Note or the other Loan
Documents. The failure of Administrative Agent to so charge such
Depository Account shall not affect or limit Borrower's obligation to make
any required payment.
7.15 Costs and Expenses. Borrower shall pay all costs and expenses
(excluding salaries or wages of full time employees of Administrative Agent)
reasonably incurred by
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Administrative Agent in connection with the implementation and syndication of
the Loan and the administration of the Loan, and reasonably incurred by the
Administrative Agent or any of the Lenders in connection with the enforcement of
the Administrative Agent's and Lenders' rights under the Loan Documents,
including, without limitation, legal fees and disbursements, appraisal fees,
inspection fees, plan review fees, travel costs, fees and out-of-pocket costs of
independent engineers and consultants. Borrower's obligations to pay such costs
and expenses shall include, without limitation, all reasonable attorneys' fees
and other costs and expenses for preparing and conducting litigation or dispute
resolution arising from any breach by Borrower or the Loan Parties of any
covenant, warranty, representation or agreement under any one or more of the
Loan Documents.
7.16 Appraisals
7.16.1 Appraisal. Administrative Agent shall have the right at its
option, from time to time, to order an appraisal of one or more of the
Borrowing Base Properties prepared at Administrative Agent's direction by
an appraiser selected by Administrative Agent (the "Appraisal"). An
appraiser selected by Administrative Agent shall be an MAI member with not
less than ten (10) years experience appraising commercial properties in
the respective area(s) of the Borrowing Base Properties and otherwise
qualified pursuant to provisions of applicable laws and regulations under
and pursuant to which Administrative Agent operates).
7.16.2 Costs of Appraisal. Borrower shall pay for the costs of each
Appraisal and each updated Appraisal only (i) after the occurrence of an
Event of Default or (ii) if Administrative Agent reasonably determines
that a material adverse change has occurred to any Borrowing Base
Property.
7.17 Indemnification. Borrower shall at all times, both before and after
repayment of the Loan, at its sole cost and expense defend, indemnify, exonerate
and save harmless Administrative Agent and each of the Lenders and all those
claiming by, through or under Administrative Agent and each of the Lenders
("Indemnified Party") against and from all damages, losses, liabilities,
obligations, penalties, claims, litigation, demands, defenses, judgments, suits,
proceedings, costs, disbursements or expenses of any kind whatsoever, including,
without limitation, attorneys, fees and experts' fees and disbursements, which
may at any time (including, without limitation, before or after discharge or
foreclosure of the Security Documents) be imposed upon, incurred by or asserted
or awarded against the Indemnified Party and arising from or out of:
(i) any liability for damage to person or property arising out of
any violation of any Legal Requirement, or
(ii) any and all liabilities, damages, penalties, costs, and
expenses, relating in any manner to any brokerage or finder's fees in
respect of the Loan arising from any act or course of dealing by the
Borrower or any Loan Party, or
(iii) any act, omission, negligence or conduct at any Collateral
Property, or arising or claimed to have arisen, out of any act, omission,
negligence or conduct of Borrower, any Borrower Subsidiary, or any tenant,
occupant or invitee thereof which is in any way related to any Collateral
Property.
Notwithstanding the foregoing, an Indemnified Party shall not be entitled to
indemnification in respect of claims arising from acts of its own gross
negligence or willful misconduct to the extent that such gross negligence or
willful misconduct is determined by the final judgment of a
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court of competent jurisdiction, not subject to further appeal, in proceedings
to which such Indemnified Party is a proper party.
7.18 Leasing Matters.
7.18.1 Administrative Agent's Approval Required.
(i) Except as provided for herein, the Loan Parties may enter
into any Lease for a Collateral Property without the approval of the
Administrative Agent or the Lenders.
(ii) Administrative Agent's prior written approval shall be
required in each instance as to any Major Lease described in clause
(i) of the definition of "Major Lease".
(iii) For any Major Lease requiring approval hereunder, the
approval shall relate to: (i) the economic and other terms of the
Major Lease; (ii) each tenant under a proposed Major Lease; (iii)
each guarantor of a tenant's obligations under a proposed Major
Lease; (iv) any modification or amendment to the Major Lease, and
(v) any optional termination, cancellation or surrender of any Major
Lease by the Loan Party thereto.
7.18.2 Borrower's Requests. Any request by Borrower for an approval
from Administrative Agent with respect to leasing matters shall be sent to
the Administrative Agent and shall be accompanied, at a minimum, by the
following: (i) the proposed lease or amendment or modification thereof
complete with all applicable schedules and exhibits; (ii) a complete copy
of any proposed guaranty; (iii) comprehensive financial information with
respect to the proposed tenant and, if applicable, the proposed guarantor
(as to new leases or amendments or modifications to existing leases
involving material economic changes); and (iv) an executive summary of the
terms and conditions of the proposed lease and, if applicable, the
proposed guaranty.
7.18.3 Response. The Administrative Agent shall act on requests from
Borrower for any approval required under Section 7.18 in a commercially
reasonable manner and shall use commercially reasonable efforts to respond
to any such request within ten (10) Business Days for approvals required
under Section 7.18, in each instance following Administrative Agent's
receipt thereof with all required supporting information. Administrative
Agent's response may consist of an approval or disapproval of the request,
or a conditional approval thereof subject to specified conditions, or a
request for further data or information, or any combination thereof. In
order to expedite the processing of requests for such approvals, Borrower
agrees to provide Administrative Agent with as much advance information as
is possible in a commercially reasonable manner in advance of Borrower's
formal request for an approval.
7.18.4 Advance Information. In order to expedite the processing of
requests for such approvals, Borrower agrees to provide Administrative
Agent with as much advance information as is possible in a commercially
reasonable manner in advance of Borrower's formal request for an approval.
7.18.5 Preliminary Submission.
(i) At Borrower's option, after the execution of a letter of
intent with any proposed tenant under a Major Lease requiring
approval herein, the Borrower
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may deliver to the Administrative Agent a preliminary submission
consisting of (x) an executive summary of the terms and conditions
of the proposed lease and, if applicable, the proposed guaranty and
(y) comprehensive financial information with respect to the proposed
tenant and, if applicable, the proposed guarantor. Administrative
Agent shall act on requests from Borrower for any approval under
this section in a commercially reasonable manner and shall use
commercially reasonable efforts to respond to any such request
within ten (10) Business Days following Lender's receipt thereof. In
the event that Administrative Agent approves such summary material
and financial information for any Major Lease, the material shall be
referred to herein as an "Approved Lease Term Sheet".
(ii) Administrative Agent shall not withhold its approval of
(x) the economic terms of any lease which are not less favorable
than the economic terms established by an Approved Lease Term Sheet,
or (y) the identity of the tenant and each guarantor, and any terms
or other substantive provisions, reflected in an Approved Lease Term
Sheet, unless there has been a material adverse change in the
financial condition of the tenant or any such guarantor since the
approval of such Approved Lease Term Sheet.
7.19 Interest Expense Coverage. The Interest Expense Coverage as
determined on each Calculation Date shall be not less than 1.75:1. The Interest
Expense Coverage covenant shall be tested by the Administrative Agent on the
Calculation Date with results based upon the results for the most recent
Calculation Period, such calculation and results to be as determined solely by
the Administrative Agent.
7.20 Leverage Ratio. The Leverage Ratio as determined on each Calculation
Date shall be less than sixty-five percent (65%). The Leverage Ratio covenant
shall be tested by the Administrative Agent on each Calculation Date, such
calculation and results to be as determined solely by the Administrative Agent.
7.21 Fixed Charge Ratio. The Fixed Charge Ratio as determined on each
Calculation Date shall be not less than the following during the relevant
periods indicated:
Relevant period Minimum Fixed Charge
Ratio
----------------------------------------- ----------------------------
Closing through December 31, 2003 1.35:1
January 1, 2004 through December 31, 2004 1.45:1
January 1, 2005 through the Maturity Date 1.50:1
The Fixed Charge Ratio covenant shall be tested by the Administrative Agent on
each Calculation Date with results based upon the results for the most recent
Calculation Period, such calculation and results to be as determined solely by
the Administrative Agent.
7.22 Net Worth. The Net Worth shall as determined on each Calculation Date
be equal to or greater than $240,000,000.00 plus ninety percent (90%) of the
cumulative net cash proceeds received from and the value of assets acquired (net
of Debt incurred or assumed in connection therewith) through the issuance of
Capital Stock by KRT or the Borrower after December 20, 2002. For purposes of
this section "net" means net of underwriters' discounts, commissions and other
reasonable out-of-pocket expenses of issuance actually paid to any Person (other
than a Loan Party or an Affiliate of any Loan Party). The Net Worth covenant
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shall be tested by the Administrative Agent on each Calculation Date, such
calculation and results to be as determined solely by the Administrative Agent.
7.23 Borrowing Base Property Covenants.
7.23.1 The aggregate Occupancy Ratio for the Borrowing Base
Properties shall not at any time be less than Eighty-Five (85%) percent
for a period of ninety (90) consecutive days.
7.23.2 The number of Borrowing Base Properties shall at no time be
less than (i) eight (8) if the Established Loan Amount is $100,000,000.00,
(ii) nine (9) if the Established Loan Amount is more than $100,000,000.00,
but equal to or less than $112,500,000.00, or (iii) ten (10) if the
Established Loan Amount is more than $112,500,000.00, but equal to of less
than $125,000,000.00.
7.23.3 Each Borrowing Base Property shall at all times be a retail
center consistent with the Borrower's business strategy.
7.24 Replacement Documentation. Upon receipt of an affidavit of an officer
of Administrative Agent as to the loss, theft, destruction or mutilation of the
Note or any other security document which is not of public record, and, in the
case of any such loss, theft, destruction or mutilation, upon surrender and
cancellation of such Note or other security document, Borrower will issue, in
lieu thereof, a replacement Note or other security document in the same
principal amount thereof and otherwise of like tenor.
7.25 Other Covenants. The Borrower hereby represents and warrants that no
Collateral is in the possession of any third party bailee (such as at a
warehouse). In the event that the Borrower and/or any of the other Loan Parties,
after the date hereof, intends to store or otherwise deliver any Collateral or
other personal property in which the Administrative Agent has been granted a
security interest to such a bailee, then the Borrower shall receive the prior
written consent of the Administrative Agent and such bailee must acknowledge in
writing that the bailee is holding such Collateral or such other personal
property for the benefit of the Administrative Agent and the Lenders.
7.26 Maintenance of REIT Status. KRT shall engage in such business
activities, and shall refrain from engaging in such activities, so as to
continue to meet the requirements for qualification and taxation as a REIT under
the Code.
7.27 Maintenance of NYSE Listing. KRT shall engage in such business
activities, and shall refrain from engaging in such activities, so as to
continue to be listed on the New York Stock Exchange.
7.28 Lenders' Consultants.
7.28.1 Right to Employ. The Borrower agrees that the Administrative
Agent shall have the right to employ on its behalf and on behalf of the
Lenders, its own personnel, or one or more engineers, architects,
environmental advisors, scientists, accountants, and attorneys to act as
an advisor to Administrative Agent and the Lenders in connection with the
Loan (each of which shall be a "Lenders' Consultant").
7.28.2 Functions. The functions of a Lenders' Consultant shall
include, without limitation: (i) inspection and physical review of any
Collateral Property; (ii) review and analysis of environmental matters;
(iii) review and analysis of financial and legal matters;
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and (iv) providing usual inspection and review services in the event of
the use of Net Proceeds for any Repair Work.
7.28.3 Payment. The reasonable costs and fees of Lenders'
Consultants shall be paid by Borrower upon billing therefor and, if not so
paid within thirty (30) days, may be paid directly by the Lenders through
a Loan Advance.
7.28.4 Access. Borrower shall provide Lenders' Consultants with
reasonable access to all Collateral Properties.
7.28.5 No Liability. Neither Administrative Agent nor any Lender
shall have liability to Borrower, any Loan Party, Guarantor, or third
party on account of: (i) services performed by Lenders' Consultant; or
(ii) any failure or neglect by Lenders' Consultant to properly perform
services . Borrower shall have no rights under or relating to any
agreement, report, or similar document prepared by any Lenders' Consultant
for Administrative Agent or Lenders. No Lenders' Consultant shall have
liability to Borrower, any Loan Party, Guarantor, or third party on
account of: (i) services performed by such Lenders' Consultant; or (ii)
any failure or neglect by such Lenders' Consultant to properly perform
services, except for its gross negligence or willful misconduct.
8. NEGATIVE COVENANTS. Borrower covenants and agrees that from the date
hereof and so long as any Obligations remain outstanding, the Borrower shall not
(and shall not suffer or permit the other Loan Parties, and/or the Borrower
Subsidiaries to):
8.1 No Changes to Borrower and other Loan Parties. Without the prior
written consent of the Administrative Agent, after not less than thirty (30)
days' prior written notice (with reasonable particularity of the facts and
circumstances attendant thereto):(i) change its jurisdiction of organization,
(ii) change its organizational structure or type, (iii) change its legal name,
or (iv) change the organizational number (if any) assigned by its jurisdiction
of formation or its federal employment identification number (if any).
8.2 Restrictions on Liens. Create, incur, assume or suffer to exist any
Lien upon or with respect to any property or assets (real or personal, tangible
or intangible, including, without limitation, the Collateral Properties),
whether now owned or hereafter acquired, or sell any such property or assets
subject to an understanding or agreement, contingent or otherwise, to repurchase
such property or assets (including sales of accounts receivable with recourse)
or assign any right to receive income or permit the filing of any financing
statement under the UCC or any other similar notice of Lien under any similar
recording or notice statute, or grant rights with respect to, or otherwise
encumber or create a security interest in, such property or assets (including,
without limitation, any item of Collateral) or any portion thereof or any other
revenues therefrom or the proceeds payable upon the sale, transfer or other
disposition of such property or asset or any portion thereof, or permit or
suffer any such action to be taken, except the following (singly and
collectively, "Permitted Liens"):
8.2.1 Liens created by the Loan Documents;
8.2.2 Liens to secure Permitted Debt, provided that (x) the Borrower
will be in compliance with the Financial Covenants considering the
consequences of the granting of any such Lien and (y) no such Lien shall
be secured by any Collateral Property, the ownership interest in any
Borrowing Base Property Owner, or any other assets of any Borrowing Base
Property Owner;
8.2.3 Liens for taxes, assessments or other governmental charges not
yet
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delinquent or which are being diligently contested in good faith and by
appropriate proceedings, if (x) to the extent such contest concerns a
Borrowing Base Property, reasonable reserves in an amount not less than
the tax, assessment or governmental charge being so contested shall have
been established in a manner satisfactory to the Administrative Agent or
deposited in cash (or cash equivalents) with the Administrative Agent to
be held during the pendency of such contest, or such contested amount
shall have been duly bonded in accordance with applicable law, (y) no risk
of sale, forfeiture or loss of any interest in any Collateral Property or
the Collateral or any part thereof arises during the pendency of such
contest and (z) such contest does not have and could not reasonably be
expected to have a Material Adverse Effect;
8.2.4 Liens in respect of property or assets imposed by law, which
do not secure Debt, such as judgment Liens (provided such judgment Liens
do not cause the occurrence of an Event of Default under Section 10.1),
carriers', warehousemen's, material men's and mechanics' liens and other
similar Liens arising in the ordinary course of business, (x) which,
except for such judgment Liens, do not in the aggregate materially detract
from the value of any property or assets or have, and could not reasonably
be expected to have, a Material Adverse Effect, (y) which, except for such
judgment Liens, are being contested in good faith by appropriate
proceedings, which proceedings have the effect of preventing the
forfeiture or sale of the property or assets subject to any such Lien, and
(z) which as to any Collateral Property do not have a lien priority prior
to the Lien in favor of the Administrative Agent, for the benefit of the
Lenders, with respect to the Obligations, including, without limitation,
any future Loan Advances;
8.2.5 Personal property financing leases entered into in the
ordinary course of business with respect to equipment, fixtures,
furniture, furnishings and similar assets
8.3 Consolidations, Mergers, Sales of Assets, Issuance and Sale of Equity.
(i) Dissolve, terminate, liquidate, consolidate with or merge with or into any
other Person, (ii) issue, sell, lease, transfer or assign to any Persons or
otherwise dispose of (whether in one transaction or a series of transactions)
any portion of its assets (whether now owned or hereafter acquired), including,
without limitation, any securities, membership or partnership interests, or
other interests of any kind in any other Loan Party or Borrower Subsidiary,
directly or indirectly (whether by the issuance of rights of, options or
warrants for, or securities convertible into, any such security, membership or
partnership interests or other interests of any kind), (iii) permit another
Person to merge with or into it, (iv) acquire all or substantially all the
capital stock, membership or partnership interests or assets of any other
Person, or (v) take any action which could have the effect, directly or
indirectly, of diluting the economic interest of any Loan Party in any other
Loan Party or Borrower Subsidiary; except the following:
8.3.1 Transfers pursuant to the Security Documents and other
agreements in favor of Administrative Agent on behalf of the Lenders;
8.3.2 Any such dissolution, liquidation, or termination which does
not involve a Loan Party;
8.3.3 Any consolidation, merger, or issuance provided that (x) the
Borrower will be in compliance with the Financial Covenants considering
the consequences of such event, (y) no such event shall cause a Change of
Control, and (z) each Borrowing Base Property Owner will continue to be a
Wholly-Owned Subsidiary of the Borrower, KRT, or, to the extent a
Wholly-Owned Subsidiary of ▇▇▇▇▇▇▇▇▇▇ as of the date hereof, ▇▇▇▇▇▇▇▇▇▇;
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8.3.4 Sales of any Borrowing Base Property, provided the Release
Conditions are satisfied with respect thereto;
8.3.5 Leases of all or any portion of any Borrowing Base Property
which either (i) are permitted by the terms of this Agreement without
Administrative Agent's or Lenders' consent or approval or (ii) are
approved as provided for in this Loan Agreement;.
8.3.6 Sales, leases, transfers or assignments of other assets of the
Borrower, any Loan Party or any Borrower Subsidiary which are not within
the Collateral, provided that the Borrower will be in compliance with the
Financial Covenants considering the consequences of the sale;
8.3.7 Sales or dispositions in the ordinary course of business of
worn, obsolete or damaged items of personal property or fixtures which are
suitably replaced;
8.3.8 Transactions, whether outright or as security, for which
Administrative Agent's prior written consent has been obtained; and
8.3.9 In connection with a Permitted Investment.
8.4 Restrictions on Debt. (i) Create, incur or assume any Debt, or make
any voluntary prepayments of any Debt in respect of which it is an obligor, (ii)
enter into, acquiesce, suffer or permit any amendment, restatement or other
modification of the documentation evidencing and/or securing any Debt under
which it is an obligor, (iii) increase the amount of any Debt existing as of the
Closing Date; except with respect to the following (singly and collectively,
"Permitted Debt"):
8.4.1 The Obligations;
8.4.2 Debt of the Borrower, KRT or any Borrower Subsidiary, other
than a Borrowing Base Property Owner; provided that the Borrower will be
in compliance with the Financial Covenants considering the consequences of
the incurrence of such Debt;
8.4.3 Indebtedness incurred in the ordinary course of business for
the purchase of goods or services which are payable, without interest,
within thirty (30) days of billing; and
8.4.4 Transactions, whether secured or unsecured, for which
Administrative Agent's prior written consent has been obtained; and
8.4.5 Debt of any Borrowing Base Property Owner under capital leases
of the type described in Section 8.2.5.
8.5 Respecting Collateral Properties. Permit or otherwise suffer to occur
any event such that the representations and warranties of the Borrower set forth
in Section 6.14 would be untrue or misleading in any material respect.
8.6 Other Business. Enter into any line of business or make any material
change in the nature of its business, purposes or operations, or undertake or
participate in activities other than the continuance of its present business
except as otherwise specifically permitted by this Agreement or the other Loan
Documents.
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8.7 Change of Control. Permit or otherwise suffer to occur any Change of
Control.
8.8 Forgiveness of Debt. Voluntarily cancel or otherwise forgive or
release any Debt owed to it by any Person, except for adequate consideration.
8.9 Affiliate Transactions. On and after the Closing Date, enter into, or
be a party to, any transaction with any Person which is an Affiliate of any Loan
Party, except transactions (a) involving the restructuring of the Recreation
Mortgage Notes Receivable on an arms' length basis (provided no additional Debt
is incurred in connection therewith), (b) involving the offering or sale of a
Person's equity interests on an arm's length basis, or (c) entered into in the
ordinary course of business and on terms which are no less favorable to such
Loan Party or Borrower Subsidiary than would be obtained in a comparable
arm's-length transaction with an unrelated third party, provided that this
clause shall not apply to transactions between and among Loan Parties or between
and among Borrower Subsidiaries or to transactions between Loan Parties and
Borrower Subsidiaries.
8.10 ERISA. Except for Code Section 401(k) plans, establish or be
obligated to contribute to any Plan.
8.11 Bankruptcy Filings. With respect to any of the Loan Parties, file a
petition under any state or federal bankruptcy or insolvency laws or the
liquidation of all or a major portion of its assets or property.
8.12 Investment Company. Become an "investment company" or a company
"controlled" by an "investment company," within the meaning of the Investment
Company Act of 1940, as amended.
8.13 Holding Company. Become 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.
8.14 Use of Proceeds. Permit the proceeds of the Loan, or any other
accommodation at any time made hereunder, to be used for any purpose which
entails a violation of, or is inconsistent with, Regulation T, U or X of the
Board, or for any purpose other than those set forth in Section 1.3.
8.15 Distributions. Authorize, declare, or pay any Distributions on behalf
of the Borrower, except for Permitted Distributions.
8.16 Restrictions on Investments. make or permit to exist or to remain
outstanding any Investment except which are in:
(i) marketable direct or guaranteed general obligations of the
United States of America which mature within one year from the date of
purchase;
(ii) bank deposits, certificates of deposit and banker's
acceptances, or other obligations in or of the Lenders or banks located
within and chartered by the United States of America or a state and having
assets of over $500,000,000.00;
(iii) the Borrower's Subsidiaries (both Subsidiaries as of the date
hereof and any other Person that becomes a Borrower Subsidiary), subject
in all instances to the terms of this Agreement; and
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(iv) Permitted Investments.
8.17 Negative Pledges, etc.. Enter into any agreement subsequent to the
Closing Date (other than a Loan Document) which (a) prohibits the creation or
assumption of any Lien upon any of the Collateral, including, without
limitation, any hereafter acquired property, (b) specifically prohibits the
amendment or other modification of this Agreement or any other Loan Document, or
(c) could have, or reasonably be expected to have, a Material Adverse Effect.
9. SPECIAL PROVISIONS.
9.1 Legal Requirements. Borrower, any Borrower Subsidiary or any Loan
Party may contest in good faith any claim, demand, levy or assessment under any
Legal Requirements by any person or entity if: (i) the contest is based upon a
material question of law or fact raised by Borrower in good faith; (ii) such
Person properly commences and thereafter diligently pursues the contest; (iii)
the contest will not materially impair the ability to ultimately comply with the
contested Legal Requirement should the contest not be successful; (iv) if the
contest concerns a Borrowing Base Property or a Borrowing Base Property Owner,
reasonable reserves in an amount necessary to undertake and pay for such contest
and any corrective or remedial action then or thereafter reasonably likely to be
necessary shall have been established in a manner satisfactory to the
Administrative Agent or deposited in cash (or cash equivalents) with the
Administrative Agent to be held during the pendency of such contest, or such
contested amount shall have been duly bonded in accordance with applicable law;
(vi) no Event of Default exists; (vii) if the contest relates to an
Environmental Legal Requirement, the conditions set forth in the Environmental
Indemnity relating to such contests shall be satisfied; (viii) no risk of sale,
forfeiture or loss of any interest in any Borrowing Base Property or the
Collateral or any part thereof arises during the pendency of such contest; and
(ix) such contest does not have and could not reasonably be expected to have a
Material Adverse Effect.
9.2 Limited Recourse Provisions.
9.2.1 Borrower Fully Liable. Borrower shall be fully liable for the
Loan and the Obligations of Borrower to each of the Lenders.
9.2.2 Certain Non-Recourse. This Agreement and all Loan Documents
have been executed by the undersigned in its capacity as an officer of
KRT, as general partner of the Borrower and not individually, and none of
the trustees, officers, members, limited partners, or shareholders of the
Borrower or KRT shall be bound or have any personal liability hereunder or
thereunder except under any Guaranty or other Loan Document signed by such
Person, other than a signature in a representative capacity. Under no
circumstances shall any party be entitled to seek recourse or commence any
action against any of the trustees, officers, members, limited partners,
or shareholders of the Borrower or KRT or any such Person's personal
assets for the performance or payment of any obligation hereunder. In all
other Loan Documents, all parties shall not seek recourse or commence any
action against any of the trustees, officers, members, limited partners,
or shareholders of Borrower or KRT or any of such Person's personal assets
for the performance or payment of any obligation hereunder or thereunder,
except under any Guaranty or other Loan Document signed by such Person,
other than a signature in a representative capacity.
9.2.3 Additional Matters. Nothing contained in the foregoing
non-recourse provisions or elsewhere shall: (i) limit the right of
Administrative Agent or any of the
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Lenders to obtain injunctive relief or to pursue equitable remedies under
any of the Loan Documents, excluding only any injunctive relief ordering
payment of obligations by any Person or entity for which personal
liability does not otherwise exist; or (ii) limit the liability of any
attorney, law firm, accountant or other professional who or which renders
or provides any written opinion or certificate to Administrative Agent or
any of the Lenders in connection with the Loan even though such person or
entity may be a limited partner of Borrower.
9.3 Payment of Obligations. Upon the return to the Administrative Agent,
or the expiration, of all of the Letters of Credit and the payment in full of
the Obligations, in immediately available funds, including, without limitation,
all unreimbursed costs and expenses of the Agent and of each Lender for which
the Borrower is responsible, and the termination of the Loan, the Agent shall
release any security and other collateral interests as provided for herein and
under the other Loan Documents and shall execute and deliver such documents and
termination statements as Borrower or any other Loan Party reasonably requests
to evidence such termination and release. However, such release by the Agent
shall not be deemed to terminate or release any Person from any obligation or
liability under the Loan Documents which specifically by its terms survives the
payment in full of the Obligations.
10. EVENTS OF DEFAULT. The following provisions deal with Default, Events
of Default, notice, grace and cure periods, and certain rights of Administrative
Agent following an Event of Default.
10.1 Default and Events of Default. The term "Default" as used herein or
in any of the other Loan Documents shall mean any fact or circumstance which
constitutes, or upon the lapse of time, or giving of notice, or both, could
constitute, an Event of Default. The occurrence of any of the following events,
respectively, shall constitute an event of default ("Event of Default"). Upon
the occurrence of any Event of Default described in Section 10.1.8, any and all
Obligations shall become due and payable without any further act on the part of
the Administrative Agent. Upon the occurrence of any other Event of Default, the
Administrative Agent may declare that any and all Obligations shall become
immediately due and payable. The occurrence of any Event of Default shall also
constitute, without notice or demand, a default under all other agreements
between the Administrative Agent and/or the Lenders and the Borrower and
instruments and papers heretofore, now, or hereafter given the Administrative
Agent and/or the Lenders by the Borrower.
10.1.1 Failure to Pay the Loan. The failure by the Borrower to pay
when due any principal of, interest on, or fees in respect of, the Loan.
10.1.2 Failure to Make Other Payments. The failure by the Borrower
to pay when due (or upon demand, if payable on demand) any payment
Obligation other than any payment Obligation on account of the principal
of, or interest on, or fees in respect of, the Loan.
10.1.3 Note, Security Documents, and Other Loan Documents. Any other
default in the performance of any term or provision of any Note, or of the
Security Documents, or of any of the other Loan Documents, or a breach, or
other failure to satisfy, any other term, provision, condition or warranty
under the Note, the Security Documents, or any other Loan Document,
regardless of whether any then undisbursed portion of the Loan is
sufficient to cover any payment of money required thereby, and the
specific grace period, if any, allowed for the default in question in
Section 10.2 or elsewhere in this Agreement shall have expired without
such default having been cured.
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10.1.4 Default under Other Agreements. The occurrence of any breach
of any covenant or Obligation imposed by, or of any default under, any
agreement (including any Loan Document) between the Administrative Agent
and/or the Lenders and the Borrower, and/or the Loan Parties in connection
with the Loan or any instrument given by the Borrower and such Persons to
the Administrative Agent and/or the Lenders, in connection with the Loan
and the expiry, without cure, of any applicable grace period in Section
10.2, elsewhere in this Agreement, or in the applicable Loan Document
(notwithstanding that the Administrative Agent and/or the Lenders may not
have exercised all or any of its/their rights on account of such breach or
default).
10.1.5 Representations and Warranties. If any representation or
warranty made by the Borrower or by any of the other Loan Parties or the
Borrower Subsidiaries in the Loan Documents was untrue or misleading in
any material respect as of the date made or deemed made (updated as
provided for herein), including, without limitation, all representations
and warranties made in Article 6 herein.
10.1.6 Affirmative Covenants. The breach of any covenant contained
in Article 7 herein, including, without limitation, the Financial
Covenants.
10.1.7 Negative Covenants. The breach of any covenant contained in
Article 8 herein. 10.1.8 Financial Status and Insolvency.
A. Borrower shall: (i) admit in writing its inability to pay its
debts generally as they become due; (ii) file a petition in bankruptcy or
a petition to take advantage of any insolvency act; (iii) make an
assignment for the benefit of creditors; (iv) consent to, or acquiesce in,
the appointment of a receiver, liquidator or trustee of itself or of the
whole or any substantial part of its properties or assets; (v) file a
petition or answer seeking reorganization, arrangement, composition,
readjustment, liquidation, dissolution or similar relief under the Federal
Bankruptcy laws or any other applicable law; (vi) have a court of
competent jurisdiction enter an order, judgment or decree appointing a
receiver, liquidator or trustee of Borrower, or of the whole or any
substantial part of the property or assets of Borrower, and such order,
judgment or decree shall remain unvacated or not set aside or unstayed for
sixty (60) days; (vii) have a petition filed against it seeking
reorganization, arrangement, composition, readjustment, liquidation,
dissolution or similar relief under the Federal Bankruptcy laws or any
other applicable law and such petition shall remain undismissed for sixty
(60) days; (viii) have, under the provisions of any other law for the
relief or aid of debtors, any court of competent jurisdiction assume
custody or control of Borrower or of the whole or any substantial part of
its property or assets and such custody or control shall remain
unterminated or unstayed for sixty (60) days; or (ix) have an attachment
or execution levied against any substantial portion of the property of
Borrower or against any portion of the Collateral which is not discharged
or dissolved by a bond within thirty (30) days; or
B. any such event set forth in subsection A above shall occur with
respect to any Loan Party;
10.1.9 Loan Documents. If any Loan Document for any reason other
than the satisfaction in full of all Obligations shall cease to be in full
force and effect (other than in accordance with its terms), thereby
preventing the Administrative Agent and/or the Lenders from obtaining the
practical realization of the benefits thereof, or if any Loan Document
shall be declared null and void or any Loan Party shall claim or declare
any
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such Loan Document to no longer be in full force and effect or is null and
void, or if the Liens and security interests purported to be created by
any of the Loan Documents shall cease to be valid, perfected, first
priority (except as otherwise expressly provided herein) security
interests;
10.1.10 Judgments. One or more judgments or decrees shall be entered
against Borrower or any Loan Party or Borrower Subsidiary involving a
liability (not paid or fully covered by a reputable and solvent insurance
company) and such judgments and decrees either shall be final and
non-appealable or shall not be vacated, discharged or stayed or bonded
pending appeal for any period of sixty (60) consecutive days, and the
aggregate amount of all such judgments exceeds five (5%) percent of the
Borrower's Net Worth;
10.1.11 ERISA. (i) If any Plan shall fail to satisfy the minimum
funding standard required for any plan year or part thereof and a waiver
of such standard or extension of any amortization period is not granted
under Section 412 of the Code, any Plan shall have had or is likely to
have a trustee appointed to administer such Plan, any Plan is, shall have
been or is likely to be terminated or to be the subject of a distress
termination proceeding under ERISA, any Plan shall have an Unfunded
Current Liability, a contribution required to be made to a Plan has not
been timely made, a Loan Party or any ERISA Affiliate has incurred or is
likely to incur a liability to or on account of a Plan under Section 409,
502(i), 502(l), 515, 4062, 4063, 4064, 4069, 4201, 4204 or 4212 of ERISA
or Section 401(a)(29), 4971, 4975 or 4980 of the Code, or a Loan Party has
incurred or is likely to incur liabilities pursuant to one or more
employee welfare benefit plans (as defined in Section 3(l) of ERISA) that
provide benefits to retired employees or other former employees (other
than as required by Section 601 of ERISA) or employee pension benefit
plans (as defined in Section 3(2) of ERISA) and any of the foregoing could
have a Material Adverse Effect; (ii) if there shall result from any such
event or events the imposition of a lien, the granting of a security
interest, or a liability or a material risk of incurring a liability which
could have, or reasonably be expected to have, a Material Adverse Effect;
or (iii) if any such lien, security interest or liability is imposed or
granted and, individually, and/or in the aggregate, in the reasonable
opinion of the Administrative Agent could have, or reasonably be expected
to have, a Material Adverse Effect.
10.1.12 Change of Control. If a Change of Control shall occur.
10.1.13 Termination of Guaranty or Consent. The termination or
attempted termination of any Guaranty by any Guarantor of the Obligations.
10.1.14 Generally. A default by Borrower in the performance of any
term, provision or condition of this Agreement to be performed by
Borrower, or a breach, or other failure to satisfy, any other term
provision, condition, covenant or warranty under this Agreement and such
default remains uncured beyond any applicable specific grace period
provided for in this Agreement, including, without limitation, as set
forth in Section 10.2. below;
10.2 Grace Periods and Notice. As to each of the foregoing events the
following provisions relating to grace periods and notice shall apply:
10.2.1 No Notice or Grace Period. There shall be no grace period and
no notice provision with respect to the payment of principal at maturity
and/or as required in connection with a Mandatory Principal Prepayment and
no grace period and no notice
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provision with respect to defaults related to the voluntary filing of bankruptcy
or reorganization proceedings or an assignment for the benefit of creditors, or
with respect to nonmonetary defaults which are not reasonably capable of being
cured, or with respect to a breach of warranty or representation under Article
6, or (subject to Section 10.2.5) with respect to the breach of any of the
affirmative covenants set forth in Article 7 (unless a grace or cure period is
specifically provided for therein) or (subject to Section 10.2.5) with respect
to the breach of any of the negative covenants set forth in Article 8.
10.2.2 Nonpayment of Interest. As to the nonpayment of interest
there shall be a ten (10) day grace period without any requirement of
notice from Administrative Agent.
10.2.3 Other Monetary Defaults. All other monetary defaults shall
have a five (5) day grace period following notice from Administrative
Agent.
10.2.4 Nonmonetary Defaults Capable of Cure. As to non-monetary
Defaults which are reasonably capable of being cured or remedied, unless
there is a specific shorter or longer grace period provided for in this
Loan Agreement or in another Loan Document, there shall be a thirty (30)
day grace period following notice from Administrative Agent or, if such
Default would reasonably require more than thirty (30) days to cure or
remedy, such longer period of time not to exceed a total of ninety (90)
days from Administrative Agent's notice as may be reasonably required so
long as Borrower shall commence reasonable actions to remedy or cure the
default within thirty (30) days following such notice and shall diligently
prosecute such curative action to completion within such ninety (90) day
period. However, where there is an emergency situation in which there is
danger to person or property such curative action shall be commenced as
promptly as possible. As to breaches of warranties and representations
(other than those related to financial information) there shall be a
thirty (30) day grace period following notice from Administrative Agent.
10.2.5 Borrowing Base Property Defaults As to any non-monetary
Defaults which are reasonably capable of being cured or remedied by the
removal of any Individual Property or Individual Properties from being
Borrowing Base Properties, there shall be a ninety (90) day grace period
following notice from the Administrative Agent for the Borrower to cure or
remedy such Default by compliance with the Release Conditions and the
terms and provisions of Section 3.3, hereof, concerning the removal of any
said Individual Properties from being Borrowing Base Properties (in the
event that the subject non-monetary Default is a failure to satisfy the
Occupancy Ratio set forth in Section 7.23.1, the said ninety (90) day
period shall run coterminously with the ninety (90) day cure period
provided for in Section 7.23.1).
11. REMEDIES.
11.1 Remedies. Upon the occurrence of an Event of Default, whether or not
the indebtedness evidenced by the Note and secured by the Security Documents
shall be due and payable or Administrative Agent shall have instituted any
foreclosure or other action for the enforcement of the Security Documents or the
Note, Administrative Agent may, or upon the direction of the Required Lenders or
as provided for in Section 13.1.11(ii) shall, in addition to any other remedies
which Administrative Agent may have hereunder or under the other Loan Documents,
or otherwise, and not in limitation thereof, and in Administrative Agent's sole
and absolute discretion:
11.1.1 Accelerate Debt. Administrative Agent may, or with the
direction of the
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Required Lenders or as provided for in Section 13.1.11(ii) shall, declare
the indebtedness evidenced by the Note and secured by the Security
Documents immediately due and payable (provided that in the case of a
voluntary petition in bankruptcy filed by Borrower or an involuntary
petition in bankruptcy filed against Borrower (after expiration of the
grace period, if any, set forth in Section 10.1.8), such acceleration
shall be automatic).:
11.1.2 Collateralize Letters of Credit. Administrative Agent may
require the Borrower to deposit into accounts maintained with, and pledged
to the Administrative Agent for the benefit of the Lenders, cash proceeds
in an amount equal to the L/C Exposure, which deposits shall secure the
L/C Exposure.
11.1.3 Pursue Remedies. Administrative Agent may, or with the
direction of the Required Lenders or as provided for in Section
13.1.11(ii) shall, pursue any and all remedies provided for hereunder,
under any one or more of the other Loan Documents, and/or otherwise.
11.2 Written Waivers. Except as otherwise provided in Section 13.4, if a
Default or an Event of Default is waived by the Required Lenders, in its sole
discretion, pursuant to a specific written instrument executed by an authorized
officer of Administrative Agent, the Default or Event of Default so waived shall
be deemed to have never occurred.
11.3 Power of Attorney. For the purpose of exercising the rights granted
by this Article 11, as well as any and all other rights and remedies of
Administrative Agent under the Loan Documents, Borrower hereby irrevocably
constitutes and appoints Administrative Agent (or any agent designated by
Administrative Agent) its true and lawful attorney-in-fact, with full power of
substitution, upon and following any Event of Default which is continuing, to
execute, acknowledge and deliver any instruments and to do and perform any acts
in the name and on behalf of Borrower. In connection with the foregoing power of
attorney, the Borrower hereby grants unto the Administrative Agent (acting
through any of its officers) full power to do any and all things necessary or
appropriate in connection with the exercise of such powers as fully and
effectually as the Borrower might or could do, hereby ratifying all that said
attorney shall do or cause to be done by virtue of this Agreement. The foregoing
power of attorney shall not be affected by any disability or incapacity suffered
by the Borrower and shall survive the same. All powers conferred upon the
Administrative Agent by this Agreement, being coupled with an interest, shall be
irrevocable until this Agreement is terminated by a written instrument executed
by a duly authorized officer of the Administrative Agent.
12. SECURITY INTEREST AND SET-OFF.
12.1 Security Interest. Borrower hereby grants (and shall cause each other
Loan Party to grant) to the Administrative Agent and each of the Lenders, a
continuing lien, security interest and right of setoff as security for all of
the Obligations, upon and against all deposits, credits, collateral and
property, now or hereafter in the possession, custody, safekeeping or control of
Administrative Agent or any of the Lenders or any entity under the control of
FleetBoston Financial Corporation and its successors and assigns, or in transit
to any of them.
12.2 Set-Off. If any payment is not made when due under any of the Loan
Documents, after giving regard to applicable grace periods, if any, or if any
Event of Default or other event which would entitle Administrative Agent or any
of the Lenders to accelerate the Loan occurs, any such deposits, balances or
other sums credited by or due from Administrative Agent, any affiliate of
Administrative Agent or FleetBoston Financial Corporation or any of the Lenders,
or from any such affiliate of Administrative Agent or FleetBoston Financial
Corporation or any of the Lenders, to Borrower may to the fullest extent not
prohibited by applicable law at any time or
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from time to time, without regard to the existence, sufficiency or adequacy of
any other collateral, and without notice or compliance with any other condition
precedent now or hereafter imposed by statute, rule of law or otherwise, all of
which are hereby waived, be set off, appropriated and applied by Administrative
Agent against any or all of Borrower's Obligations irrespective of whether
demand shall have been made and although such obligations may be unmatured, in
such manner as Administrative Agent in its sole and absolute discretion may
determine. Within five (5) Business Days of making any such set off,
appropriation or application, Administrative Agent agrees to notify Borrower
thereof, provided the failure to give such notice shall not affect the validity
of such set off or appropriation or application. ANY AND ALL RIGHTS TO REQUIRE
ADMINISTRATIVE AGENT OR ANY OF THE LENDERS TO EXERCISE ITS RIGHTS OR REMEDIES
WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN, PRIOR TO EXERCISING
ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS OR OTHER PROPERTY OF
THE BORROWER OR ANY GUARANTOR, ARE HEREBY KNOWINGLY, VOLUNTARILY AND IRREVOCABLY
WAIVED. Each of the Lenders agrees with each other Lender that (a) if an amount
to be set off is to be applied to indebtedness of the Borrower to such Lender,
other than the Obligations evidenced by the Note due to such Lender, such amount
shall be applied ratably to such other indebtedness and to the Obligations
evidenced by the Note due to such Lender, and (b) if such Lender shall receive
from the Borrower, whether by voluntary payment, exercise of the right of
setoff, counterclaim, cross action, enforcement of the claim evidenced by the
Note due to such Lender by proceedings against the Borrower at law or in equity
or by proof thereof in bankruptcy, reorganization, liquidation, receivership or
similar proceedings, or otherwise, and shall retain and apply to the payment of
the Note due to such Lender any amount in excess of its ratable portion of the
payments received by all of the Lenders with respect to Obligations under the
Note due to all of the Lenders, such Lender will make such disposition and
arrangements with the other Lenders with respect to such excess, either by way
of distribution, pro tanto assignment of claims, subrogation or otherwise as
shall result in each Lender receiving in respect of the Note its proportionate
payment as contemplated by this Agreement; provided that if all or any part of
such excess payment is thereafter recovered from such Lender, such disposition
and arrangements shall be rescinded and the amount restored to the extent of
such recovery, but without interest.
12.3 Right to Freeze. The Administrative Agent and each of the Lenders
shall also have the right, at its option, upon the occurrence of any event which
would entitle the Administrative Agent and each of the Lenders to set off or
debit as set forth in Section 12.2, to freeze, block or segregate any such
deposits, balances and other sums so that Borrower may not access, control or
draw upon the same.
12.4 Additional Rights. The rights of Administrative Agent, the Lenders
and each affiliate of Administrative Agent and each of the Lenders under this
Article 12 are in addition to, and not in limitation of, other rights and
remedies, including other rights of set off, which Administrative Agent or any
of the Lenders may have.
13. THE ADMINISTRATIVE AGENT AND THE LENDERS
13.1 Rights, Duties and Immunities of the Administrative Agent.
13.1.1 Appointment of Administrative Agent. Each Lender hereby
irrevocably designates and appoints Fleet National Bank as Administrative
Agent of such Lender to act as specified herein and in the other Loan
Documents, and each such Lender hereby irrevocably authorizes the
Administrative Agent to take such actions, exercise such powers and
perform such duties as are expressly delegated to or conferred upon the
Administrative Agent by the terms of this Loan Agreement and the other
Loan
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Documents, together with such other powers as are reasonably incidental
thereto. The Administrative Agent agrees to act as such upon the express
conditions contained in this Article 13. The Administrative Agent shall
not have any duties or responsibilities except those expressly set forth
herein or in the other Loan Documents, nor shall it have any fiduciary
relationship with any Lender, and no implied covenants, responsibilities,
duties, obligations or liabilities shall be read into this Loan Agreement
or otherwise exist against the Administrative Agent. Except as provided
for in Section 13.3, the provisions of this Article 13 are solely for the
benefit of the Administrative Agent and the Lenders, and the Borrower
shall not have any rights as a third party beneficiary of any of the
provisions hereof; provided, however, the Borrower may rely on any
consent, waiver, approval, certificate or instrument delivered by the
Administrative Agent as evidencing that the Administrative Agent has
received, to the extent required hereunder, the prior approval of the
Required Lenders or the Lenders.
13.1.2 Administration of Loan by Administrative Agent. The
Administrative Agent shall be responsible for administering the Loan on a
day-to-day basis. In the exercise of such administrative duties, the
Administrative Agent shall use the same diligence and standard of care
that is customarily used by the Administrative Agent with respect to
similar loans held by the Administrative Agent solely for its own account.
Each Lender delegates to the Administrative Agent the full right and
authority on its behalf to take the following specific actions in connection
with its administration of the Loan:
(i) to fund the Loan in accordance with the provisions of the Loan
Documents, but only to the extent of immediately available funds provided
to the Administrative Agent by the respective Lenders for such purpose;
(ii) to receive all payments of principal, interest, fees and other
charges paid by, or on behalf of, the Borrower and, except for fees to
which the Administrative Agent is entitled pursuant to the Loan Documents
or otherwise, to distribute all such funds to the respective Lenders as
provided for hereunder;
(iii) to keep and maintain complete and accurate files and records
of all material matters pertaining to the Loan, and make such files and
records available for inspection and copying by each Lender and its
respective employees and agents during normal business hours upon
reasonable prior notice to the Administrative Agent; and
(iv) to do or omit doing all such other actions as may be reasonably
necessary or incident to the implementation, administration and servicing
of the Loan and the rights and duties delegated hereinabove.
13.1.3 Delegation of Duties. The Administrative Agent may execute
any of its duties under this Loan Agreement or any other Loan Document by
or through its agents or attorneys-in-fact, and shall be entitled to the
advice of counsel concerning all matters pertaining to its rights and
duties hereunder or under the Loan Documents. The Administrative Agent
shall not be responsible for the negligence or misconduct of any agents or
attorneys-in-fact selected by it with reasonable care.
13.1.4 Exculpatory Provisions. Neither the Administrative Agent nor
any of its officers, directors, employees, agents, attorneys-in-fact or
affiliates shall be liable for any action lawfully taken or omitted to be
taken by it or them under or in connection with this Loan Agreement or the
other Loan Documents, except for its or their gross negligence or willful
misconduct. Neither the Administrative Agent nor any of its officers,
directors,
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employees, agents, attorneys-in-fact or affiliates shall be responsible
for or have any duty to ascertain, inquire into, or verify (i) any
recital, statement, representation or warranty made by the Borrower or any
of its officers or agents contained in this Loan Agreement or the other
Loan Documents or in any certificate or other document delivered in
connection therewith; (ii) the performance or observance of any of the
covenants or agreements contained in, or the conditions of, this Loan
Agreement or the other Loan Documents; (iii) the state or condition of any
properties of the Borrower or any other obligor hereunder constituting
Collateral for the Obligations of the Borrower hereunder, or any
information contained in the books or records of the Borrower; (iv) the
validity, enforceability, collectibility, effectiveness or genuineness of
this Loan Agreement or any other Loan Document or any other certificate,
document or instrument furnished in connection therewith; or (v) the
validity, priority or perfection of any lien securing or purporting to
secure the Obligations or the value or sufficiency of any of the
Collateral.
13.1.5 Reliance by Administrative Agent. The Administrative Agent
shall be entitled to rely, and shall be fully protected in relying, upon
any notice, consent, certificate, affidavit, or other document or writing
believed by it to be genuine and correct and to have been signed, sent or
made by the proper person or persons, and upon the advice and statements
of legal counsel (including, without, limitation, counsel to the
Borrower), independent accountants and other experts selected by the
Administrative Agent. The Administrative Agent shall be fully justified in
failing or refusing to take any action under this Loan Agreement or any
other Loan Document, except as otherwise specifically provided for herein,
unless it shall first receive such advice or concurrence of the Required
Lenders as it deems appropriate or it shall first be indemnified to its
satisfaction by the Lenders against any and all liability and expense
which may be incurred by it by reason of the taking or failing to take any
such action. The Administrative Agent shall in all cases be fully
protected in acting, or in refraining from acting, under this Loan
Agreement and the other Loan Documents in accordance with any written
request of the Required Lenders, and each such request of the Required
Lenders, and any action taken or failure to act by the Administrative
Agent pursuant thereto, shall be binding upon all of the Lenders;
provided, however, that the Administrative Agent shall not be required in
any event to act, or to refrain from acting, in any manner which is
contrary to the Loan Documents or to applicable law.
13.1.6 Notice of Default. The Administrative Agent shall not be
deemed to have knowledge or notice of the occurrence of any Default or
Event of Default unless the Administrative Agent has actual knowledge of
the same or has received notice from a Lender or the Borrower referring to
this Loan Agreement, describing such Default or Event of Default and
stating that such notice is a notice of default (a "Notice of Default").
In the event that the Administrative Agent obtains such actual knowledge
or receives such a notice, the Administrative Agent shall give prompt
written notice thereof to each of the Lenders. The Administrative Agent
shall take such action with respect to such Default or Event of Default as
shall be reasonably directed by the Required Lenders. Unless and until the
Administrative Agent shall have received such direction, the
Administrative Agent may (but shall not be obligated to) take such action,
or refrain from taking such action, with respect to any such Default or
Event of Default as it shall deem advisable in the best interest of the
Lenders.
13.1.7 Lenders' Credit Decisions. Each Lender acknowledges that it
has, independently and without reliance upon the Administrative Agent or
any other Lender, and based on the financial statements prepared by the
Borrower and such other documents and information as it has deemed
appropriate, made its own credit analysis and investigation into the
business, assets, operations, property, and financial and other
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condition of the Borrower and has made its own decision to enter into this
Loan Agreement and the other Loan Documents. Each Lender also acknowledges
that it will, independently and without reliance upon the Administrative
Agent 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 determining whether or not conditions precedent to Closing
any Loan hereunder have been satisfied and in taking or not taking any
action under this Loan Agreement and the other Loan Documents.
13.1.8 Administrative Agent's Reimbursement and Indemnification. The
Lenders agree to reimburse and indemnify the Administrative Agent, ratably
in proportion to their respective Commitments, for (i) any amounts not
reimbursed by the Borrower for which the Administrative Agent is entitled
to reimbursement by the Borrower under this Loan Agreement or the other
Loan Documents, (ii) any other expenses incurred by the Administrative
Agent on behalf of the Lenders in connection with the preparation,
execution, delivery, administration, amendment, waiver and/or enforcement
of this Loan Agreement and the other Loan Documents, and (iii) any
liabilities, obligations, losses, damages, penalties, actions, judgments,
suits, costs, expenses or disbursements of any kind and nature whatsoever
which may imposed on, incurred by or asserted against the Administrative
Agent in any way relating to or arising out of this Loan Agreement or the
other Loan Documents or any other document delivered in connection
therewith or any transaction contemplated thereby, or the enforcement of
any of the terms hereof or thereof, provided that no Lender shall be
liable for any of the foregoing to the extent that they arise from the
gross negligence or willful misconduct of the Administrative Agent. If any
indemnity furnished to the Administrative Agent for any purpose shall, in
the opinion of the Administrative Agent, be insufficient or become
impaired, the Administrative Agent may call for additional indemnity and
cease, or not commence, to do the action indemnified against until such
additional indemnity is furnished.
13.1.9 Administrative Agent in its Individual Capacity. With respect
to its Commitment as a Lender, and the Loans made by it and the Note
issued to it, the Administrative Agent shall have the same rights and
powers hereunder and under any other Loan Document as any Lender and may
exercise the same as though it were not the Administrative Agent, and the
term "Lender" or "Lenders" shall, unless the context otherwise indicates,
include the Administrative Agent in its individual capacity. The
Administrative Agent and its subsidiaries and affiliates may accept
deposits from, lend money to, and generally engage in any kind of
commercial or investment banking, trust, advisory or other business with
the Borrower or any subsidiary or affiliate of the Borrower as if it were
not the Administrative Agent hereunder.
13.1.10 Successor Administrative Agent. Only if the Administrative
Agent, in its individual capacity as a Lender, retains an amount of its
Commitment of less than $20,000,000.00, the Administrative Agent may
resign at any time by giving thirty (30) days' prior written notice to the
Lenders and Borrower. The Required Lenders, for good cause, may remove
Administrative Agent at any time by giving thirty (30) days' prior written
notice to the Administrative Agent, the Borrower and the other Lenders.
Upon any such resignation or removal, the Required Lenders shall have the
right to appoint a successor Administrative Agent, which successor
Administrative Agent shall, if such appointment is prior to the occurrence
of an Event of Default which is continuing, be subject to the approval of
the Borrower, which approval shall not be unreasonably withheld or
delayed. If no successor Administrative Agent shall have been so appointed
by the Required Lenders and accepted such appointment within thirty (30)
days after the retiring Administrative Agent's giving notice of
resignation or the Required Lenders'
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giving notice of removal, as the case may be, then the retiring
Administrative Agent may appoint, on behalf of the Borrower and the
Lenders, a successor Administrative Agent. If in such instance the
retiring Administrative Agent appoints as the successor Administrative
Agent a Lender, such Lender shall accept such appointment. Each such
successor Administrative Agent shall be a Lender or a financial
institution which meets the requirements of an Eligible Assignee. Upon the
acceptance of any appointment as Administrative Agent hereunder by a
successor Administrative Agent, such successor Administrative Agent shall
thereupon succeed to and become vested with all the rights, powers,
privileges and duties of the retiring Administrative Agent, and the
retiring Administrative Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. After any
retiring Administrative Agent's resignation hereunder, the provisions of
this Article 13 shall continue in effect for its benefit in respect of any
actions taken or omitted to be taken by it while it was acting as the
Administrative Agent hereunder.
13.1.11 Duties in the Case of Enforcement.
(i) In case one or more Events of Default have occurred and
shall be continuing, and whether or not acceleration of the
Obligations shall have occurred, the Administrative Agent may or
shall, at either the request of the Required Lenders or as provided
for in Section 13.1.11(ii), proceed to enforce the provisions of
this Loan Agreement and the other Loan Documents respecting the
foreclosure, the sale, or other disposition of all or any part of
the Collateral and the exercise of any other legal or equitable
rights or remedies as it may have hereunder or under any other Loan
Document or otherwise by virtue of applicable law, or to refrain
from so acting if similarly requested by the Required Lenders. The
Administrative Agent shall be fully protected in so acting or
refraining from acting upon the instruction of the Required Lenders,
and such instruction shall be binding upon all the Lenders. The
Required Lenders may direct the Administrative Agent in writing as
to the method and the extent of any such foreclosure, sale or other
disposition or the exercise of any other right or remedy, the
Lenders hereby agreeing to indemnify and hold the Administrative
Agent harmless from all costs and liabilities incurred in respect of
all actions taken or omitted in accordance with such direction,
provided that the Administrative Agent need not comply with any such
direction to the extent that the Administrative Agent reasonably
believes the Administrative Agent's compliance with such direction
to be unlawful or commercially unreasonable in any applicable
jurisdiction.
(ii) In the event that the Administrative Agent provides to
the Lenders the written notice of the occurrence of an Event of
Default under Section 13.1.6 and within sixty (60) days thereafter,
the Required Lenders have not provided to the Administrative Agent
direction as a course of action to be undertaken by the
Administrative Agent with respect thereto, the Administrative Agent,
subject to receiving any direction thereafter from the Required
Lenders, shall accelerate the Loan and proceed to enforce the
provisions of this Loan Agreement and the other Loan Documents
respecting the foreclosure, the sale, or other disposition of all or
any part of the Collateral and the exercise of any other legal or
equitable rights or remedies as it may have hereunder or under any
other Loan Document or otherwise by virtue of applicable law, with
the same diligence and standard of care that is customarily used by
the Administrative Agent with respect to similar loans held by the
Administrative Agent solely for its own account. The Lenders agree
to indemnify and hold the Administrative Agent harmless from all
costs and
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liabilities incurred in respect of all actions taken or omitted by
the Administrative Agent in accordance with this subsection,
provided that no Lender shall be liable for any of the foregoing to
the extent that they arise from the gross negligence or willful
misconduct of the Administrative Agent.
(iii) The Administrative Agent may, in its discretion but
without obligation, in the absence of direction from the Required
Lenders, take such interim actions as it believes necessary to
preserve the rights of the Lenders hereunder and in and to any
Collateral securing the Obligations, including but not limited to
petitioning a court for injunctive relief, appointment of a receiver
or preservation of the proceeds of any Collateral. Each of the
Lenders acknowledges and agrees that no individual Lender may
separately enforce or exercise any of the provisions of any of the
Loan Documents against the Borrower, any of the Loan Parties or the
Collateral, including without limitation the Note, other than
through the Administrative Agent.
13.2 Respecting Loans and Payments.
13.2.1 Procedures for Loans. Administrative Agent shall give written
notice to each Lender of each request for a Loan Advance, or conversion of
an existing Loan Advance from a Variable Rate Advance to an Effective LIBO
Rate Advance, by facsimile transmission, hand delivery or overnight
courier, not later than 11:00 a.m. (Eastern time) (i) three (3) Business
Days prior to any Effective LIBO Rate Advance or conversion to an
Effective LIBO Rate Advance, or (ii) one (1) Business Day prior to any
Variable Rate Advance. Each such notice shall be accompanied by a written
summary of the request for a Loan Advance and shall specify (a) the date
of the requested Loan Advance, (b) the aggregate amount of the requested
Loan Advance, (c) each Lender's pro rata share of the requested Loan
Advance, and (d) the applicable interest rate selected by Borrower with
respect to such Loan Advance, or any portion thereof, together with the
applicable Interest Period, if any, selected, or deemed selected, by
Borrower. Each Lender shall, before 11:00 a.m. (Eastern time) on the date
set forth in any such request for a Loan Advance, upon Administrative
Agent's determination that the applicable conditions to making the
requested Loan Advance have been fulfilled or will be fulfilled prior to
the said Loan Advance, make available to Administrative Agent, at an
account to be designated by Administrative Agent at Fleet National Bank in
Boston, Massachusetts, in same day funds, each Lender's ratable portion of
the requested Loan Advance. After Administrative Agent's receipt of such
funds and upon Administrative Agent's determination that the applicable
conditions to making the requested Loan Advance have been fulfilled,
Administrative Agent shall make such funds available to Borrower as
provided for in this Loan Agreement. Within a reasonable period of time
following the making of each Loan Advance, but in no event later than ten
(10) Business Days following such Loan Advance, Administrative Agent shall
deliver to each Lender a copy of Borrower's request for Loan Advance.
Promptly after receipt by Administrative Agent of written request from any
Lender, Administrative Agent shall deliver to the requesting Lender the
accompanying certifications and such other instruments, documents,
certifications and approvals delivered by or on behalf of Borrower to
Administrative Agent in support of the requested Loan Advance.
13.2.2 Nature of Obligations of Lenders. The obligations of the
Lenders hereunder are several and not joint. Failure of any Lender to
fulfill that its obligations hereunder shall not result in any other
Lender becoming obligated to advance more than its Commitment Percentage
of the Loan, nor shall such failure release or diminish the
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obligations of any other Lender to fund its Commitment Percentage provided
herein.
13.2.3 Payments to Administrative Agent. All payments of principal
of and interest on the Loan or the Note shall be made to the
Administrative Agent by the Borrower or any other obligor or guarantor for
the account of the Lenders in immediately available funds as provided in
the Note and this Loan Agreement. Except as otherwise expressly provided
herein, the Administrative Agent agrees promptly to distribute to each
Lender, on the same Business Day upon which each such payment is made,
such Lender's proportionate share of each such payment in immediately
available funds excluding Liquidation Proceeds which shall be distributed
in accordance with Section 13.2.4 below. The Administrative Agent will
disburse such payments to the Lenders on the date of receipt thereof if
received prior to 10:00 a.m. on such date and, if not, on the next
Business Day. The Administrative Agent shall upon each distribution
promptly notify Borrower of such distribution and each Lender of the
amounts distributed to it applicable to principal of, and interest on, the
proportionate share held by the applicable Lender. Each payment to the
Administrative Agent under the first sentence of this Section shall
constitute a payment by the Borrower to each Lender in the amount of such
Lender's proportionate share of such payment, and any such payment to the
Administrative Agent shall not be considered outstanding for any purpose
after the date of such payment by the Borrower to the Administrative Agent
without regard to whether or when the Administrative Agent makes
distribution thereof as provided above. If any payment received by the
Administrative Agent from the Borrower is insufficient to pay both all
accrued interest and all principal then due and owing, the Administrative
Agent shall first apply such payment to all outstanding interest until
paid in full and shall then apply the remainder of such payment to all
principal then due and owing, and shall distribute the payment to each
Lender accordingly.
13.2.4 Distribution of Liquidation Proceeds. Subject to the terms
and conditions hereof, the Administrative Agent shall distribute all
Liquidation Proceeds in the order and manner set forth below:
First: To the Administrative Agent, towards any fees and any expenses
for which the Administrative Agent is entitled to reimbursement
under this Agreement or the other Loan Documents not theretofore
paid to the Administrative Agent.
Second: To all applicable Lenders in accordance with their proportional
share based upon their respective Commitment Percentages until
all Lenders have been reimbursed for all expenses which such
Lenders have previously paid to the Administrative Agent and not
theretofore paid to such Lenders.
Third: To all Lenders in accordance with their proportional share based
upon their respective Commitment Percentages until all Lenders
have been paid in full all principal and interest due to such
Lenders under the Loan, with each Lender applying such proceeds
for purposes of this Agreement first against the outstanding
principal balance due to such Lender under the Loan and then to
accrued and unpaid interest due under the Loan.
Fourth: To all applicable Lenders in accordance with their proportional
share based upon their respective Commitment Percentages until
all Lenders have been paid in full all other amounts due to such
Lenders under the Loan including, without limitation, any costs
and expenses incurred directly by such Lenders to the extent such
costs and expenses are reimbursable to such Lenders by the
Borrower under the Loan Documents.
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Fifth: To the Borrower or such third parties as may be entitled to claim
Liquidation Proceeds.
13.2.5 Adjustments. If, after Administrative Agent has paid each
Lender's proportionate share of any payment received or applied by
Administrative Agent in respect of the Loan and other Obligations, that
payment is rescinded or must otherwise be returned or paid over by
Administrative Agent, whether pursuant to any bankruptcy or insolvency
law, sharing of payments clause of any loan agreement or otherwise, such
Lender shall, at Administrative Agent's request, promptly return its
proportionate share of such payment or application to Administrative
Agent, together with the Lender's proportionate share of any interest or
other amount required to be paid by Administrative Agent with respect to
such payment or application.
13.2.6 Distribution by Administrative Agent. If in the opinion of
the Administrative Agent distribution of any amount received by it in such
capacity hereunder or under the Note or under any of the other Loan
Documents might involve any liability, it may refrain from making
distribution until its right to make distribution shall have been
adjudicated by a court of competent jurisdiction or has been resolved by
the mutual consent of all Lenders. In addition, the Administrative Agent
may request full and complete indemnity, in form and substance
satisfactory to it, prior to making any such distribution. If a court of
competent jurisdiction shall adjudge that any amount received and
distributed by the Administrative Agent is to be repaid, each person to
whom any such distribution shall have been made shall either repay to the
Administrative Agent its proportionate share of the amount so adjudged to
be repaid or shall pay over to the same in such manner and to such persons
as shall be determined by such court.
13.2.7 Delinquent Lender. If for any reason any Lender shall fail or
refuse to abide by its obligations under this Loan Agreement, including
without limitation its obligation to make available to Administrative
Agent its pro rata share of any Loans, expenses or setoff (a "Delinquent
Lender") and such failure is not cured within ten (10) days of receipt
from the Administrative Agent of written notice thereof, then, in addition
to the rights and remedies that may be available to Administrative Agent,
other Lenders, the Borrower or any other party at law or in equity, and
not at limitation thereof, (i) such Delinquent Lender's right to
participate in the administration of, or decision-making rights related
to, the Loans, this Loan Agreement or the other Loan Documents shall be
suspended during the pendency of such failure or refusal, and (ii) a
Delinquent Lender shall be deemed to have assigned any and all payments
due to it from the Borrower, whether on account of outstanding Loans,
interest, fees or otherwise, to the remaining non-delinquent Lenders for
application to, and reduction of, their proportionate shares of all
outstanding Loans until, as a result of application of such assigned
payments the Lenders' respective pro rata shares of all outstanding Loans
shall have returned to those in effect immediately prior to such
delinquency and without giving effect to the nonpayment causing such
delinquency. The Delinquent Lender's decision-making and participation
rights and rights to payments as set forth in clauses (i) and (ii)
hereinabove shall be restored only upon the payment by the Delinquent
Lender of its pro rata share of any Loans or expenses as to which it is
delinquent, together with interest thereon at the Default Rate from the
date when originally due until the date upon which any such amounts are
actually paid.
The non-delinquent Lenders shall also have the right, but not the
obligation, in their respective, sole and absolute discretion, to acquire
for no cash consideration, (pro rata, based on the respective Commitments
of those Lenders electing to exercise such right) the Delinquent Lender's
Commitment to fund future Loans (the "Future Commitment").
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Upon any such purchase of the pro rata share of any Delinquent Lender's
Future Commitment, the Delinquent Lender's share in future Loans and its
rights under the Loan Documents with respect thereto shall terminate on
the date of purchase, and the Delinquent Lender shall promptly execute all
documents reasonably requested to surrender and transfer such interest,
including, if so requested, an Assignment and Acceptance. Each Delinquent
Lender shall indemnify Administrative Agent and each non-delinquent Lender
from and against any and all loss, damage or expenses, including but not
limited to reasonable attorneys' fees and funds advanced by Administrative
Agent or by any non-delinquent Lender, on account of a Delinquent Lender's
failure to timely fund its pro rata share of a Loan or to otherwise
perform its obligations under the Loan Documents.
13.2.8 Holders. The Administrative Agent may deem and treat the
Lender designated in the Register as the proportionate owner of such
interest in the Note for all purposes hereof unless and until a written
notice of the assignment, transfer or endorsement thereof, as the case may
be, shall have been filed with the Administrative Agent. Any request,
authority or consent of any person or entity who, at the time of making
such request or giving such authority or consent, is the holder of any
designated interest in the Note shall be conclusive and binding on any
subsequent holder, transferee or endorsee, as the case may be, of such
interest in the Note or of any Note or Notes issued in exchange therefor.
13.3 Assignment and Participation.
13.3.1 Conditions to Assignment by Lenders. Except as provided
herein, each Lender may assign to one or more Eligible Assignees all or a
portion of its interests, rights and obligations under this Loan Agreement
(including all or a portion of its Commitment Percentage and Commitment
and the same portion of the Loans at the time owing to it and the portion
of the Note held by it), upon satisfaction of the following conditions:
(a) each of the Administrative Agent and the Borrower shall have given its
prior written consent to such assignment (provided that, (1) in the case
of the Borrower, such consent will not be unreasonably withheld, delayed,
or conditioned and such consent shall not be required if a Default or
Event of Default shall have occurred and be continuing and (2) in the case
of the Administrative Agent, such consent will not be unreasonably
withheld, delayed, or conditioned); (b) each such assignment shall be of a
constant, and not a varying, percentage of all the assigning Lender's
rights and obligations under this Loan Agreement, (c) each assignment
shall be in an amount that is at least $5,000,000.00 and is a whole
multiple of $1,000,000.00, (d) each Lender which is a Lender at the time
of such assignment shall retain, free of any such assignment, an amount of
its Commitment of not less than $5,000,000.00, (e) prior to the occurrence
of an Event of Default, the Administrative Agent, in its individual
capacity as a Lender, shall retain, free of any such assignment, an amount
of its Commitment of not less than $25,000,000.00, and (f) the parties to
such assignment shall execute and deliver to the Administrative Agent, for
recording in the Register (as hereinafter defined), an Assignment and
Acceptance, substantially in the form of Exhibit H hereto (an "Assignment
and Acceptance"). Upon such execution, delivery, acceptance and recording,
from and after the effective date specified in each Assignment and
Acceptance, which effective date shall be at least five (5) Business Days
after the execution thereof, and written notice thereof to the Borrower,
(x) the assignee thereunder shall be a party hereto and, to the extent
provided in such Assignment and Acceptance, have the rights and
obligations of a Lender hereunder, and (y) the assigning Lender shall, to
the extent provided in such assignment and upon payment to the
Administrative Agent of the registration fee referred to in Section
13.3.3, be released from its obligations under
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this Loan Agreement.
13.3.2 Certain Representations and Warranties. Limitations,
Covenants. By executing and delivering an Assignment and Acceptance, the
parties to the assignment thereunder confirm to and agree with each other
and the other parties hereto as follows:
(a) other than the representation and warranty that it is the legal
and beneficial owner of the interest being assigned thereby free and clear
of any adverse claim, the assigning Lender makes no representation or
warranty, express or implied, and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection
with this Loan Agreement or the execution, legality, validity,
enforceability, genuineness, sufficiency or value of this Loan Agreement,
the other Loan Documents or any other instrument or document furnished
pursuant hereto or the attachment, perfection or priority of any security
interest or mortgage;
(b) the assigning Lender makes no representation or warranty and
assumes no responsibility with respect to the financial condition of the
Borrower and its affiliates, related entities or subsidiaries or any other
person primarily or secondarily liable in respect of any of the
Obligations, or the performance or observance by the Borrower or any other
person primarily or secondarily liable in respect of any of the
Obligations of any of their obligations under this Loan Agreement or any
of the other Loan Documents or any other instrument or document furnished
pursuant hereto or thereto;
(c) such assignee confirms that it has received a copy of this Loan
Agreement, together with copies of the most recent financial statements
provided by the Borrower as required by the terms of this Loan Agreement,
together with such other documents and information as it has deemed
appropriate to make its own credit analysis and decision to enter into
such Assignment and Acceptance;
(d) such assignee will, independently and without reliance upon the
assigning Lender, the Administrative Agent or any other Lender and based
on such documents and information as it shall deem appropriate at the
time, continue to make its own credit decisions in taking or not taking
action under this Loan Agreement;
(e) such assignee represents and warrants that it is an Eligible
Assignee;
(f) such assignee appoints and authorizes the Administrative Agent
to take such action as agent on its behalf and to exercise such powers
under this Loan Agreement and the other Loan Documents as are delegated to
the Administrative Agent by the terms hereof or thereof, together with
such powers as are reasonably incidental thereto;
(g) such assignee agrees that it will perform in accordance with
their terms all of the obligations that by the terms of this Loan
Agreement are required to be performed by it as a Lender; and
(h) such assignee represents and warrants that it is legally
authorized to enter into such Assignment and Acceptance.
13.3.3 Register. The Administrative Agent shall maintain a copy of
each Assignment and Acceptance delivered to it and a register or similar
list (the "Register") for the recordation of the names and addresses of
the Lenders and the Commitment Percentage of, and principal amount of the
Loan owing to the Lenders from time to time. The entries in the Register
shall be conclusive, in the absence of manifest error, and the
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Borrower, the Administrative Agent and the Lenders may treat each person
whose name is recorded in the Register as a Lender hereunder for all
purposes of this Loan Agreement. The Register shall be available for
inspection by the Borrower and the Lenders at any reasonable time and from
time to time upon reasonable prior notice. Upon each such recordation, the
assigning Lender agrees to pay to the Administrative Agent a registration
fee in the sum of $2,500.00.
13.3.4 New Notes. Upon its receipt of an Assignment and Acceptance
executed by the parties to such assignment, together with each Note
subject to such assignment, the Administrative Agent shall (a) record the
information contained therein in the Register, and (b) give prompt notice
thereof to the Borrower and the Lenders (other than the assigning Lender).
Within ten (10) Business Days after receipt of such notice, the Borrower,
at no cost and expense to the Borrower, shall execute and deliver to the
Administrative Agent, in exchange for each surrendered Note, a new Note to
the order of such Eligible Assignee in an amount equal to the amount
assumed by such Eligible Assignee pursuant to such Assignment and
Acceptance and, if the assigning Lender has retained some portion of its
obligations hereunder, a new Note to the order of the assigning Lender in
an amount equal to the amount retained by it hereunder. Such new Notes
shall provide that they are replacements for the surrendered Notes, shall
be in an aggregate principal amount equal to the aggregate principal
amount of the surrendered Notes, shall be dated the effective date of such
Assignment and Acceptance and shall otherwise be in the form of the
assigned Notes. The surrendered Notes shall be cancelled and returned to
the Borrower.
13.3.5 Participations. At no cost to the Borrower, each Lender may
sell participations to one or more banks or other financial institutions
in all or a portion of such Lender's rights and obligations under this
Loan Agreement and the other Loan Documents; provided that (a) each such
participation shall be in a minimum amount of $5,000,000.00, (b) each
participant shall meet the requirements of an Eligible Assignee, (c) any
such sale or participation shall not affect the rights and duties of the
selling Lender hereunder to the Borrower, and (d) the only rights granted
to the participant pursuant to such participation arrangements with
respect to waivers, amendments or modifications of the Loan Documents
shall be the rights to approve waivers, amendments or modifications that
would reduce the principal of or the interest rate on any Loans, extend
the term or increase the amount of the Commitment of such Lender as it
relates to such participant, reduce the amount of any commitment fees to
which such participant is entitled or extend any regularly scheduled
payment date for principal or interest.
13.3.6 Disclosure. The Borrower agrees that in addition to
disclosures made in accordance with standard and customary banking
practices any Lender may disclose information obtained by such Lender
pursuant to this Loan Agreement to assignees or participants and potential
assignees or participants hereunder; provided that such assignees or
participants or potential assignees or participants shall agree (a) to
treat in confidence such information unless such information otherwise
becomes public knowledge, (b) not to disclose such information to a third
party, except as required by law or legal process and (c) not to make use
of such information for purposes of transactions unrelated to such
contemplated assignment or participation.
13.3.7 Miscellaneous Assignment Provisions. Any assigning Lender
shall retain its rights to be indemnified pursuant to Section 7.17 with
respect to any claims or actions arising prior to the date of such
assignment. If any assignee Lender is not incorporated under the laws of
the United States of America or any state thereof, it shall, prior to the
date on which any interest or fees are payable hereunder or under any of
the
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other Loan Documents for its account, deliver to the Borrower and the
Administrative Agent certification as to its exemption from deduction or
withholding of any United States federal income taxes. Anything contained
in this Section 13.3 to the contrary notwithstanding, any Lender may at
any time (i) pledge all or any portion of its interest and rights under
this Loan Agreement (including all or any portion of its Notes) to any of
the twelve Federal Reserve Banks organized under Section 4 of the Federal
Reserve Act, 12 U.S.C. Section 341 or (ii) assign all or any portion of
its interest and rights under this Loan Agreement to a Lender Affiliate.
No such pledge or the enforcement thereof shall release the pledgor Lender
from its obligations hereunder or under any of the other Loan Documents.
13.3.8 Assignment by Borrower. The Borrower shall not assign or
transfer any of its rights or obligations under any of the Loan Documents
without the prior written consent of each of the Lenders.
13.4 Administrative Matters.
13.4.1 Amendment, Waiver, Consent, Etc. Except as otherwise provided
herein or as to any term or provision hereof which provides for the
consent or approval of the Administrative Agent, no term or provision of
this Loan Agreement or any other Loan Document may be changed, waived,
discharged or terminated, nor may any consent required or permitted by
this Loan Agreement or any other Loan Document be given, unless such
change, waiver, discharge, termination or consent receives the written
approval of the Required Lenders.
Notwithstanding the foregoing, the unanimous written approval of all the
Lenders (other than a Defaulting Lender) shall be required with respect to any
proposed amendment, waiver, discharge, termination, or consent which:
(i) has the effect of (a) extending the final scheduled maturity or
the date of any amortization payment of any Loan or Note, (b) reducing the
rate or extending the time of payment of interest or fees thereon, (c)
increasing or reducing the principal amount thereof, or (d) otherwise
postponing or forgiving any indebtedness thereunder,
(ii) releases or discharges any material portion of the Collateral
other than in accordance with the express provisions of the Loan
Documents,
(iii) amends, modifies or waives any provisions of this Section
13.4,
(iv) amends any of the Financial Covenants,
(v) reduces the percentage specified in the definition of Required
Lenders,
(vi) except as otherwise provided in the Loan Agreement, changes the
amount of any Lender's Commitment or Commitment Percentage, or
(vii) releases or waives any guaranty of the Obligations or
indemnifications provided in the Loan Documents;
and provided, further, that without the consent of the Administrative Agent, no
such action shall amend, modify or waive any provision of this Article or any
other provision of any Loan Document which relates to the rights or obligations
of the Administrative Agent.
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13.4.2 Deemed Consent or Approval. With respect to any requested
amendment, waiver, consent or other action which requires the approval of
the Required Lenders or all of the Lenders, as the case may be, in
accordance with the terms of this Loan Agreement, or if the Administrative
Agent is required hereunder to seek, or desires to seek, the approval of
the Required Lenders or all of the Lenders, as the case may be, prior to
undertaking a particular action or course of conduct, the Administrative
Agent in each such case shall provide each Lender with written notice of
any such request for amendment, waiver or consent or any other requested
or proposed action or course of conduct, accompanied by such detailed
background information and explanations as may be reasonably necessary to
determine whether to approve or disapprove such amendment, waiver, consent
or other action or course of conduct. The Administrative Agent may (but
shall not be required to) include in any such notice, printed in capital
letters or boldface type, a legend substantially to the following effect:
"THIS COMMUNICATION REQUIRES IMMEDIATE RESPONSE. FAILURE TO RESPOND WITHIN
TEN (10) BUSINESS DAYS FROM THE RECEIPT OF THIS COMMUNICATION SHALL
CONSTITUTE A DEEMED APPROVAL BY THE ADDRESSEE OF THE ACTION REQUESTED BY
THE BORROWER OR THE COURSE OF CONDUCT PROPOSED BY THE ADMINISTRATIVE AGENT
AND RECITED ABOVE,"
and if the foregoing legend is included by the Administrative Agent in its
communication, a Lender shall be deemed to have approved or consented to such
action or course of conduct for all purposes hereunder if such Lender fails to
object to such action or course ( of conduct by written notice to the
Administrative Agent within ten (10) Business Days of such Lender's receipt of
such notice.
13.5 Arranger. Notwithstanding the provisions of this Agreement or of the
other Loan Documents, the Arranger shall have no powers, rights, duties,
responsibilities or liabilities with respect to this Agreement and the other
Loan Documents. To the extent requested by the Administrative Agent, the
Arranger has coordinated, or will coordinate, the initial syndication of the
Loan and the assignment of interests in the Loan.
14. CASUALTY AND TAKING.
14.1 Casualty or Taking; Obligation To Repair. In the event of the
occurrence of an Event of Loss as to any Collateral Property, Borrower shall
give immediate written notice thereof to Administrative Agent and proceed with
reasonable diligence, in full compliance with all Legal Requirements and the
other requirements of the Loan Documents, to repair, restore, rebuild or replace
the affected Collateral Property (each, the "Repair Work").
14.2 Adjustment of Claims. All insurance claims or condemnation or similar
awards shall be adjusted or settled by Borrower, at Borrower's sole cost and
expense, but subject to Administrative Agent's prior written approval which
approval shall not be unreasonably withheld; provided that (i) the
Administrative Agent shall have the right to participate in any adjustment or
settlement with respect to which the Net Proceeds in the aggregate are equal to
or greater than Five Hundred Thousand Dollars ($500,000.00) and (ii) if any
Default exists under any of the Loan Documents, Administrative Agent shall have
the right to adjust, settle, and compromise such claims without the approval of
Borrower.
14.3 Payment and Application of Insurance Proceeds and Condemnation
Awards.
14.3.1 All Net Proceeds shall be paid to Administrative Agent, on
behalf of the
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Lenders, and except as otherwise provided for herein, at Administrative
Agent's option, be applied to Borrower's Obligations or released, in whole
or in part, to pay for the actual cost of repair, restoration, rebuilding
or replacement (collectively, "Cost To Repair"). If any Net Proceeds are
received directly by any Loan Party, such Loan Party shall hold such Net
Proceeds in trust for the Administrative Agent and shall promptly deliver
such Net Proceeds in kind to the Administrative Agent.
14.3.2 Notwithstanding the terms and provisions hereof, if the Net
Proceeds do not exceed Five Hundred Thousand Dollars ($500,000.00) and the
Insurance/Taking Release Conditions have been satisfied in a manner
reasonably acceptable to the Administrative Agent, Administrative Agent
shall release so much of the Net Proceeds as may be required to pay for
the actual Cost to Repair and the applicable Loan Party shall commence and
diligently prosecute to completion, the Repair Work relative to the
subject Collateral Property.
14.3.3 Notwithstanding the terms and provisions hereof, if either
(i) the Net Proceeds are equal to or greater than Five Hundred Thousand
Dollars ($500,000.00) or (ii) the Net Proceeds do not exceed Five Hundred
Thousand Dollars ($500,000.00), but the Insurance/Taking Release
Conditions have not been satisfied with respect to such Event of Loss, the
Administrative Agent shall release so much of the Net Proceeds as may be
required to pay for the actual Cost To Repair in accordance the
limitations and procedures set forth in Section 14.4, if the following
conditions are satisfied in a manner acceptable to the Administrative
Agent:
(i) no Default or Event of Default shall have occurred and be
continuing under the Loan Documents;
(ii) in Administrative Agent's good faith judgment such Net
Proceeds together with any additional funds as may be deposited with
and pledged to Administrative Agent, on behalf of the Lenders, are
sufficient to pay for the Cost To Repair. In order to make this
determination, Administrative Agent shall be furnished by the
Borrower with an estimate of the Cost to Repair accompanied by an
independent architect's certification as to such Cost to Repair and
appropriate plans and specifications for the Repair Work;
(iii) the subject Event of Loss was not a Major Event of Loss;
(iv) Administrative Agent in the exercise of its reasonable
discretion, shall have determined that all rents from Leases of the
subject Collateral Property which are to ▇▇▇▇▇ pursuant to their
terms are to be payable to the Borrowing Base Property Owner,
subject to deductibles, if any, permitted pursuant to the insurance
policies to be maintained pursuant to this Agreement, from Rent Loss
Proceeds;
(v) in Administrative Agent's good faith judgment, the Repair
Work can reasonably be completed on or before the earliest to occur
of (A) the earliest date required for such completion under the
terms of any Major Lease and (B) such time as may be required under
applicable Legal Requirements; and
(vi) each tenant under a Major Lease which might otherwise
have a right to terminate its lease on account of such Event of Loss
shall have waived its right to so terminate conditioned only upon
the Repair Work being completed within a reasonable period of time
acceptable to Administrative Agent.
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14.4 Conditions To Release of Insurance Proceeds. If Administrative Agent
elects or is required to release insurance proceeds, Administrative Agent may
impose reasonable conditions on such release which shall include, but not be
limited to, the following:
14.4.1 Prior written approval by Administrative Agent, which
approval shall not be unreasonably withheld or delayed of plans,
specifications, cost estimates, contracts and bonds for the Repair Work;
14.4.2 Waivers of lien, architect's certificates, contractor's sworn
statements and other evidence of costs, payments and completion as
Administrative Agent may reasonably require;
14.4.3 The funds shall be released upon final completion of the
Repair Work, unless Borrower requests earlier funding, in which event
partial monthly disbursements equal to (i) 90% of the costs of the work
completed prior to the certification by the applicable Lender's Consultant
and if there is no Lender's Consultant, an independent architect retained
by the Borrower, that the Repair Work is 50% completed, and thereafter
(ii) 100% of the costs of the work completed thereafter (such that the
effective retainage upon completion of the Repair Work would be 5%), and
then (iii) upon final completion of the Repair Work as certified by such
Lender's Consultant or independent architect, and the receipt by
Administrative Agent of satisfactory evidence of payment and release of
all liens, the balance of the funds shall be released;
14.4.4 Determination by Administrative Agent that the undisbursed
balance of such Net Proceeds on deposit with Administrative Agent,
together with additional funds deposited for the purpose, shall be at
least sufficient to pay for the remaining Cost To Repair, free and clear
of all liens and claims for lien;
14.4.5 All work to comply with the standards, quality of
construction and Legal Requirements applicable to the construction of the
Improvements; and
14.4.6 The absence of any Default or Event of Default under any Loan
Documents.
14.5 The Administrative Agent shall have the right to hire, at the cost
and expense of the Borrower, a Lender's Consultant to assist the Administrative
Agent in the determination of the satisfaction of the conditions provided for
herein for the release of the Net Proceeds to pay the Costs to Repair and to
periodically inspect the status of the construction of any Repair Work.
14.6 In the event that the Administrative Agent makes any Net Proceeds
available to any Loan Party for the payment of Costs to Repair as provided for
herein, upon the completion of the Repair Work as certified by the applicable
Lender's Consultant and if there is no Lender's Consultant, an independent
architect retained by the Borrower, and receipt by Administrative Agent of
satisfactory evidence of payment and release of all liens, any excess Net
Proceeds still held by the Administrative Agent shall be remitted by the
Administrative Agent to the Borrower provided that no Event of Default shall
have occurred and be continuing;
14.7 The terms and provisions of this Article 14 shall be subject to the
terms and provisions of any Lease as to which the Administrative Agent has
agreed otherwise with respect to the use and disbursement of Net Proceeds in any
agreement entered into between the tenant under such Lease and the
Administrative Agent.
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14.8 The Administrative Agent acknowledges that provided that no Event of
Default has occurred and is continuing, all Rent Loss Proceeds shall be payable
to the Borrower or the applicable Loan Party.
15. GENERAL PROVISIONS.
15.1 Notices. Any notice or other communication in connection with this
Loan Agreement, the Note, the Security Documents, or any of the other Loan
Documents, shall be in writing, and (i) deposited in the United States Mail,
postage prepaid, by registered or certified mail, or (ii) hand delivered by any
commercially recognized courier service or overnight delivery service such as
Federal Express, or (iii) sent by facsimile transmission if a FAX Number is
designated below addressed:
If to Borrower:
Kramont Operating Partnership, L.P.
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
with copies by regular mail or such hand delivery or facsimile transmission to:
Fox, Rothschild, O'Brien & ▇▇▇▇▇▇▇ LLP
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇▇▇▇▇▇, Esquire
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Administrative Agent or as Lender:
Fleet National Bank
▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
And
Attention: Commercial Real Estate Loan
Administration Manager,
with copies by regular mail or such hand delivery or facsimile transmission to:
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▇▇▇▇▇▇ & ▇▇▇▇▇▇▇▇▇▇ LLP
▇▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇, Esquire
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
If to Lenders:
Wilmington Trust of Pennsylvania
▇▇▇▇▇ ▇
▇▇▇ ▇. ▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Wachovia Bank, National Association
▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: Commercial Real Estate Department Head
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Compass Bank
15 So. 20th Street, 15th Floor
Birmingham, Alabama 35233
Attention: ▇▇ ▇▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
Firstrust Bank
▇▇ ▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇ ▇. ▇▇▇▇
FAX Number: (▇▇▇) ▇▇▇-▇▇▇▇
and to such addresses as set forth in the Assignment and Acceptance.
Any such addressee may change its address for such notices to such other address
in the United States as such addressee shall have specified by written notice
given as set forth above. All periods of notice shall be measured from the
deemed date of delivery.
A notice shall be deemed to have been given, delivered and received for
the purposes of all Loan Documents upon the earliest of: (i) if sent by such
certified or registered mail, on the third Business Day following the date of
postmark, or (ii) if hand delivered at the specified address by such courier or
overnight delivery service, when so delivered or tendered for delivery during
customary business hours on a Business Day, or (iii) if so mailed, on the date
of actual receipt as evidenced by the return receipt, or (iv) if so delivered,
upon actual receipt, or (v) if facsimile transmission is a permitted means of
giving notice, upon receipt as evidenced by confirmation.
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15.2 Limitations on Assignment. Borrower may not assign this Agreement or
the monies due thereunder without the prior written consent of the Required
Lenders in each instance, but in such event Lenders may nevertheless at its
option make the Loan under this Agreement to Borrower or to those who succeed to
the title of Borrower and all sums so advanced by Lenders shall be deemed a Loan
Advance under this Agreement and not to be modifications thereof and shall be
secured by all of the Collateral given at any time in connection herewith.
15.3 Further Assurances. Borrower shall upon request from Administrative
Agent from time to time execute, seal, acknowledge and deliver such further
instruments or documents which Administrative Agent may reasonably require to
better perfect and confirm its rights and remedies hereunder, under the Note,
under the Security Documents and under each of the other Loan Documents.
15.4 Payments.
(i) All payments shall be applied first to the payment of all fees,
expenses and other amounts due to the Administrative Agent or the Lenders (to
the extent reimbursable to the Lenders in accordance with the terms hereof)
(excluding principal and interest), then to accrued interest, and the balance on
account of outstanding principal; provided, however, that after an Event of
Default, payments will be applied to the obligations of Borrower to
Administrative Agent and the Lenders as Administrative Agent determines in its
sole discretion.
(ii) Any payments required by this Agreement, the Note or any of the
other Loan Documents, or any other instruments or agreements executed in
connection herewith or therewith, including, without limitation, may (but not
before the due date thereof) be deducted by each Lender from the amount, if any,
not already advanced, and the same shall be deemed to be a Loan Advance, or may
be deducted from any Loan Advance due hereunder. Any attorneys' fees, appraisal
charge, inspection fee, or any other expense payable by Borrower as herein
provided for, or incurred in connection with the drafting of the Loan Documents
and other instruments evidencing or securing the Obligations and all other Loan
Documents may be likewise deducted from the amounts, if any, not already
advanced or from any Loan Advance payable to Borrower and, in any event, charged
as a Loan Advance hereunder.
15.5 Parties Bound. The provisions of this Agreement and of each of the
other Loan Documents shall be binding upon and inure to the benefit of Borrower
and the Administrative Agent and each of the Lenders and their respective
successors and assigns, except as otherwise prohibited by this Agreement or any
of the other Loan Documents.
This Agreement is a contract by and among Borrower, the Administrative
Agent and each of the Lenders for their mutual benefit, and no third person
shall have any right, claim or interest against either Administrative Agent, any
of the Lenders or Borrower by virtue of any provision hereof.
15.6 Governing Law; Consent to Jurisdiction; Mutual Waiver of Jury Trial.
15.6.1 Substantial Relationship. It is understood and agreed that
all of the Loan Documents were negotiated, executed and delivered in The
Commonwealth of Massachusetts, which Commonwealth the parties agree has a
substantial relationship to the parties and to the underlying transactions
embodied by the Loan Documents.
15.6.2 Place of Delivery. Borrower agrees to furnish to
Administrative Agent at the Administrative Agent's office in Boston,
Massachusetts all further instruments,
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certifications and documents to be furnished hereunder.
15.6.3 Governing Law. This Agreement, except as otherwise provided
in Section 15.6.4, and each of the other Loan Documents shall in all
respects be governed, construed, applied and enforced in accordance with
the internal laws of the Commonwealth of Massachusetts without regard to
principles of conflicts of law.
15.6.4 Exceptions. Notwithstanding the foregoing choice of law:
(i) The procedures governing the enforcement by Administrative
Agent of its foreclosure and other remedies under the Security
Documents and under the other Loan Documents with respect to each
Collateral Property shall be governed by the laws of the State in
which such Collateral Property is located;
(ii) Administrative Agent shall comply with applicable law of
such State to the extent required by the law of such jurisdiction in
connection with the foreclosure of the security interests and liens
created under the Security Documents and the other Loan Documents
with respect to each Collateral Property or other assets situated in
such State; and
(iii) provisions of Federal law and the law of such State
shall apply in defining the terms Hazardous Materials, Environmental
Legal Requirements and Legal Requirements applicable to each
Collateral Property as such terms are used in this Loan Agreement,
the Environmental Indemnity and the other Loan Documents.
Nothing contained herein or any other provisions of the Loan Documents
shall be construed to provide that the substantive laws of any other State
shall apply to any parties, rights and obligations under any of the Loan
Documents, which, except as expressly provided in clauses (i), (ii) and
(iii) of this Section 15.6.4., are and shall continue to be governed by
the substantive law of Commonwealth of Massachusetts, except as set forth
in clauses (i), (ii) and (iii) of this Section 15.6.4. In addition, the
fact that portions of the Loan Documents may include provisions drafted to
conform to the law of any other State is not intended, nor shall it be
deemed, in any way, to derogate the parties, choice of law as set forth or
referred to in this Loan Agreement or in the other Loan Documents. The
parties further agree that the Administrative Agent may enforce its rights
under the Loan Documents including, but not limited to, its rights to ▇▇▇
the Borrower or to collect any outstanding indebtedness in accordance with
applicable law.
15.6.5 Consent to Jurisdiction. Borrower hereby consents to personal
jurisdiction in any state or Federal court located within The Commonwealth
of Massachusetts.
15.6.6 JURY TRIAL WAIVER. BORROWER, ADMINISTRATIVE AGENT, AND EACH
OF THE LENDERS MUTUALLY HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY
WAIVE THE RIGHT TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION BASED ON
THIS LOAN AGREEMENT, ARISING OUT OF, UNDER OR IN CONNECTION WITH THIS LOAN
AGREEMENT OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE EXECUTED IN
CONNECTION HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS,
STATEMENTS (WHETHER VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY, INCLUDING,
WITHOUT LIMITATION, ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS
OR ACTIONS OF ADMINISTRATIVE AGENT OR ANY LENDER RELATING TO THE
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ADMINISTRATION OF THE LOAN OR ENFORCEMENT OF THE LOAN DOCUMENTS, AND AGREE
THAT NEITHER PARTY WILL SEEK TO CONSOLIDATE ANY SUCH ACTION WITH ANY OTHER
ACTION IN WHICH A JURY TRIAL CANNOT BE OR HAS NOT BEEN WAIVED. EXCEPT AS
PROHIBITED BY LAW, BORROWER HEREBY WAIVES ANY RIGHT IT MAY HAVE TO CLAIM
OR RECOVER IN ANY LITIGATION ANY SPECIAL, EXEMPLARY, PUNITIVE OR
CONSEQUENTIAL DAMAGES OR ANY DAMAGES OTHER THAN, OR IN ADDITION TO, ACTUAL
DAMAGES. BORROWER CERTIFIES THAT NO REPRESENTATIVE, ADMINISTRATIVE AGENT
OR ATTORNEY OF ADMINISTRATIVE AGENT OR ANY LENDER HAS REPRESENTED,
EXPRESSLY OR OTHERWISE, THAT ADMINISTRATIVE AGENT OR ANY LENDER WOULD NOT,
IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER. THIS
WAIVER CONSTITUTES A MATERIAL INDUCEMENT FOR BORROWER, ADMINISTRATIVE
AGENT, AND EACH OF THE LENDERS TO ENTER INTO THE TRANSACTIONS CONTEMPLATED
HEREBY.
15.7 Survival. All representations, warranties, covenants and agreements
of Borrower, or a Loan Party, herein or in any other Loan Document, or in any
notice, certificate, or other paper delivered by or on behalf of Borrower or a
Loan Party pursuant hereto are significant and shall be deemed to have been
relied upon by Administrative Agent and each of the Lenders notwithstanding any
investigation made by Administrative Agent or any of the Lenders or on its
behalf and shall survive the delivery of the Loan Documents and the making of
the Loan pursuant thereto. No review or approval by Administrative Agent or the
Lenders or any of their representatives, of any opinion letters, certificates by
professionals or other item of any nature shall relieve Borrower or anyone else
of any of the obligations, warranties or representations made by or on behalf of
Borrower or a Loan Party, or any one or more of them, under any one or more of
the Loan Documents.
15.8 Cumulative Rights. All of the rights of Administrative Agent and the
Lenders hereunder and under each of the other Loan Documents and any other
agreement now or hereafter executed in connection herewith or therewith, shall
be cumulative and may be exercised singly, together, or in such combination as
Administrative Agent may determine in its sole good faith judgment.
15.9 Claims Against Administrative Agent or Lenders.
15.9.1 Borrower Must Notify. The Administrative Agent and each of
the Lenders shall not be in default under this Agreement, or under any
other Loan Document, unless a written notice specifically setting forth
the claim of Borrower shall have been given to Administrative Agent and
each of the Lenders within thirty (30) days after Borrower first had
actual knowledge or actual notice of the occurrence of the event which
Borrower alleges gave rise to such claim and Administrative Agent or any
of the Lenders does not remedy or cure the default, if any there be, with
reasonable promptness thereafter. Such actual knowledge or actual notice
shall refer to what was actually known by, or expressed in a written
notification furnished to, any of the persons or officials referred to in
Exhibit D as Authorized Representatives.
15.9.2 Remedies. If it is determined by the final order of a court
of competent jurisdiction, which is not subject to further appeal, that
Administrative Agent or any of the Lenders has breached any of its
obligations under the Loan Documents and has not remedied or cured the
same with reasonable promptness following notice thereof, Administrative
Agent's and each of the Lenders' responsibilities shall be limited to: (i)
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where the breach consists of the failure to grant consent or give approval in
violation of the terms and requirements of a Loan Document, the obligation to
grant such consent or give such approval and to pay Borrower's reasonable costs
and expenses including, without limitation, reasonable attorneys' fees and
disbursements in connection with such court proceedings; and (ii) the case of
any such failure to grant such consent or give such approval, or in the case of
any other such default by Administrative Agent or any of the Lenders, where it
is also so determined that Administrative Agent or any of the Lenders acted in
gross negligence or bad faith, the payment of any actual, direct, compensatory
damages sustained by Borrower as a result thereof plus Borrower's reasonable
costs and expenses, including, without limitation, reasonable attorneys' fees
and disbursements in connection with such court proceedings.
15.9.3 Limitations. In no event, however, shall Administrative Agent
and each of the Lenders be liable to Borrower or to any Loan Party or
anyone else for other damages such as, but not limited to, indirect,
speculative or punitive damages whatever the nature of the breach by
Administrative Agent or any of the Lenders of its obligations under this
Loan Agreement or under any of the other Loan Documents. In no event shall
Administrative Agent or any of the Lenders be liable to Borrower or to any
Loan Party or anyone else unless a written notice specifically setting
forth the claim of Borrower shall have been given to Administrative Agent
and each of the Lenders within the time period specified above.
15.10 Regarding Consents. Except to the extent expressly provided herein,
any and all consents to be made hereunder by the Administrative Agent, Required
Lenders, or Lenders shall be in the discretion of the Party to whom consent
rights are given hereunder.
15.11 Obligations Absolute. Except to the extent prohibited by applicable
law which cannot be waived, the Obligations of Borrower and the obligations of
the Guarantor and the other Loan Parties under the Loan Documents shall be joint
and several, absolute, unconditional and irrevocable and shall be paid strictly
in accordance with the terms of the Loan Documents under all circumstances
whatsoever, including, without limitation, the existence of any claim, set off,
defense or other right which Borrower or any Loan Party may have at any time
against Administrative Agent or any of the Lenders whether in connection with
the Loan or any unrelated transaction.
15.12 Table of Contents, Title and Headings. Any Table of Contents, the
titles and the headings of sections are not parts of this Loan Agreement or any
other Loan Document and shall not be deemed to affect the meaning or
construction of any of its or their provisions.
15.13 Counterparts. This Loan Agreement and each other Loan Document may
be executed in several counterparts, each of which when executed and delivered
is an original, but all of which together shall constitute one instrument. In
making proof of this agreement, it shall not be necessary to produce or account
for more than one such counterpart which is executed by the party against whom
enforcement of such loan agreement is sought.
15.14 Satisfaction of Term Sheet. The Loan being made pursuant to the
terms hereof and of the other Loan Documents is being made in satisfaction of
Administrative Agent's and each of the Lenders' obligations under the Term Sheet
dated October 2, 2002. The terms, provisions and conditions of this Agreement
and the other Loan Documents supersede the provisions of the Term Sheet.
15.15 Time Of the Essence. Time is of the essence of each provision of
this Agreement and each other Loan Document.
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15.16 No Oral Change. This Loan Agreement and each of the other Loan
Documents may only be amended, terminated, extended or otherwise modified by a
writing signed by the party against which enforcement is sought (except no such
writing shall be required for any party which, pursuant to a specific provision
of any Loan Document, is required to be bound by changes without such party's
assent). In no event shall any oral agreements, promises, actions, inactions,
knowledge, course of conduct, course of dealings or the like be effective to
amend, terminate, extend or otherwise modify this Loan Agreement or any of the
other Loan Documents.
15.17 Monthly Statements. While Administrative Agent may issue invoices or
other statements on a monthly or periodic basis (a "Statement"), it is expressly
acknowledged and agreed that: (i) the failure of Administrative Agent to issue
any Statement on one or more occasions shall not affect Borrower's obligations
to make payments under the Loan Documents as and when due; (ii) the inaccuracy
of any Statement shall not be binding upon Lenders and so Borrower shall always
remain obligated to pay the full amount(s) required under the Loan Documents as
and when due notwithstanding any provision to the contrary contained in any
Statement; (iii) all Statements are issued for information purposes only and
shall never constitute any type of offer, acceptance, modification, or waiver of
the Loan Documents or any of Lenders' rights or remedies thereunder; and (iv) in
no event shall any Statement serve as the basis for, or a component of, any
course of dealing, course of conduct, or trade practice which would modify,
alter, or otherwise affect the express written terms of the Loan Documents.
-69-
IN WITNESS WHEREOF this Agreement has been duly executed and delivered as
a sealed instrument at Boston, Massachusetts, as of the date first written
above.
BORROWER: KRAMONT OPERATING PARTNERSHIP, L.P.
By: Kramont Realty Trust,
Its general partner
By: ____________________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.
Title: President
ADMINISTRATIVE AGENT: FLEET NATIONAL BANK
By:______________________________
Name:
Title: Vice-President
LENDER: FLEET NATIONAL BANK
By:______________________________
Name:
Title: Vice-President
LENDER: WILMINGTON TRUST OF PENNSYLVANIA
By:______________________________
Name: J. ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Title: Vice President
LENDER: WACHOVIA BANK, NATIONAL ASSOCIATION
By: ______________________________
Name: ▇▇▇▇▇ ▇. ▇▇▇▇▇▇
Title: Senior Vice President,
Senior Portfolio Manager
LENDER: COMPASS BANK
By: ______________________________
Name: ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Title: Senior Vice President
S-1
LENDER: FIRSTRUST BANK
By: ______________________________
Name: ▇▇▇▇ ▇. ▇▇▇▇
Title: Vice President
S-2
EXHIBITS:
Section
-------
Reference
---------
Number
------
Exhibit A - Definitions ........................................... 1.1
Exhibit B-1 - Requisition; Availability Certificate ............... 2.1.2
Exhibit B-2 - Notice of Letter of Credit .......................... 2.7.1
Exhibit C - Note .................................................. 3.2
Exhibit D - Authorized Representatives ............................ 4
Exhibit E - Required Property, Hazard and Other Insurance ......... 5.1.12, 6.16, 7.5
Exhibit F - Ownership Interests and Taxpayer Identification Numbers 6.4
Exhibit G - Compliance Certificate ................................ 7.2.5
Exhibit H - Form of Assignment and Acceptance ..................... 13.3.1
Exhibit I - Lenders' Commitment ................................... Exhibit A
Exhibit J - Borrowing Base Properties ............................. Exhibit A
E-1
EXHIBIT A TO LOAN AGREEMENT
DEFINITIONS
Additional Collateral Request as defined in Section 3.3.
Administrative Agent. Fleet National Bank, acting as agent for the Lenders.
Adjusted Appraised Value. With respect to any Collateral Property that is the
subject of an Appraisal, the appraised value set forth in such Appraisal, as
such may be reviewed and adjusted by the Administrative Agent.
Adjusted Capitalized Value. With respect to any Borrowing Base Property, (i)
which is a Stabilized Asset, based upon the most recent two (2) fiscal quarters
Adjusted Net Operating Income for such Borrowing Base Property, annualized,
divided by at a nine and one-half percent (9.5%) capitalization rate and (ii)
which is a Non-Stabilized Asset, undepreciated Book Value (as reported on the
financial statements for the subject Borrowing Base Property Owner).
Adjusted LIBO Rate. The Term "Adjusted LIBO Rate" means for each Interest Period
the rate per annum obtained by dividing (i) the LIBO Rate for such Interest
Period, by (ii) a percentage equal to one hundred percent (100%) minus the
maximum reserve percentage applicable during such Interest Period under
regulations issued from time to time by the Board of Governors of the Federal
Reserve System for determining the maximum reserve requirements (including,
without limitation, any basic, supplemental, marginal and emergency reserve
requirements) for Administrative Agent (or of any subsequent holder of a Note
which is subject to such reserve requirements) in respect of liabilities or
assets consisting of or including Eurocurrency liabilities (as such term is
defined in Regulation D of the Board of Governors of the Federal Reserve System)
having a term equal to the Interest Period. Adjusted Net Operating Income: For
any period of determination, for any Real Estate Property (i) Net Operating
Income less (ii) management fees (calculated as the greater of either 3% of
total revenue or actual management expenses incurred), less (iii) allowances for
capital expenditures in the amount of $.25 per rentable square foot of completed
improvements.
Affiliate shall mean, as to any Person, any other Person that, directly or
indirectly, is in control of, is controlled by or is under common control with
such Person or is a director or officer of such Person. For purposes of this
definition, control of a Person shall mean the power, direct or indirect, (i) to
vote 10% or more of the securities having ordinary voting power for the election
of directors of such Person or (ii) to direct or cause the direction of the
management and policies of such Person, whether by contract or otherwise.
Aggregate Borrowing Base Value shall mean, as determined by the Administrative
Agent as of each Calculation Date, the aggregate of the Borrowing Base Values
for all Borrowing Base Properties; provided, however, to the extent that the
Borrowing Base Value of any single Borrowing Base Property represents more than
twenty (20%) percent of the Aggregate Borrowing Base Value, the Borrowing Base
Value of said Borrowing Base Property for purposes of the calculation of the
Aggregate Borrowing Base Value shall be limited to twenty (20%) percent of the
Aggregate Borrowing Base Value.
Agreement as defined in the Preamble.
Applicable Margin shall be determined based upon the then applicable Leverage
Ratio, as
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provided below, as follows.
Level Leverage Applicable Applicable
Ratio Margin for Margin for
LIBO Rate Variable
Loans Rate Loans
------------ ------------ ---------- ---------------
1 Leverage 175 basis 0 basis
Ratio<=50% points points
2 Leverage 200 basis 0 basis
Ratio>50% to points points
<=60%
3 Leverage 225 basis 25 basis
Ratio >60% points points
to <65%
The Applicable Margin shall remain in effect until the Administrative
Agent has provided the Borrower with written notice (in the manner provided in
the Loan Agreement) that the Applicable Margin has been modified due to a change
in the Leverage Ratio as of any Calculation Date. The initial Applicable Margin
hereunder shall be established at Level 3.
Appraisal shall mean an MAI appraisal in form and substance acceptable to the
Required Lenders and prepared by an appraiser acceptable to the Administrative
Agent.
Arranger as defined in the Preamble.
Assignment and Acceptance as defined in Section 13.3.1.
Authorized Representatives as defined in Section 4 and listed on Exhibit D.
Availability shall mean, from time to time, an amount determined by the
Administrative Agent as of each Calculation Date equal to the lesser of the
following:
(a) sixty-five percent (65%) of the Aggregate Borrowing Base Value of the
Borrowing Base Properties as of such Calculation Date; or
(b) the Implied Loan Amount.
Banking Day. The term "Banking Day" means a day on which banks are not required
or authorized by law to close in the city in which Administrative Agent's
principal office is situated.
Book Value shall mean the value of such property or asset, as determined in
accordance with GAAP.
Borrower as defined in the Preamble.
Borrower GP shall mean KRT.
Borrower Subsidiaries shall mean, individually and collectively, all of the
Subsidiaries of the Borrower and/or KRT, including, without limitation, each
Loan Party.
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Borrowing Base Property and Borrowing Base Properties. The Individual Properties
initially listed in Exhibit J hereto, plus any Individual Property which
subsequently becomes a Borrowing Base Property in accordance with Section 3.5,
hereof, less any Borrowing Base Property which is determined by the
Administrative Agent to no longer be a Borrowing Base Property in accordance
with Section 3.4, hereof, less any Borrowing Base Property which is released as
Collateral in accordance with Section 3.3, hereof.
Borrowing Base Property Requirements.
(a) The Individual Property satisfies all Eligibility Criteria.
(b) The Borrower (or applicable Loan Party) has executed all Security
Documents in connection with such Individual Property, including, without
limitation, the Security Documents set forth in Sections 3.1.1 through and
including Section 3.1.6, hereof.
(c) The Individual Property is owned by a Wholly-Owned Subsidiary of the
Borrower, KRT, or, to the extent a Wholly-Owned Subsidiary of ▇▇▇▇▇▇▇▇▇▇ as of
the date hereof, ▇▇▇▇▇▇▇▇▇▇.
(d) Administrative Agent shall have received and completed a satisfactory
review of such due diligence as the Administrative Agent may require with
respect to any Individual Property, including, without limitation:
(i) (1) A mortgagee's title insurance policy naming the
Administrative Agent, on behalf of the Lenders, as the first
mortgagee, which meets Administrative Agent's title insurance
requirements previously furnished to Borrower to the reasonable
satisfaction of Administrative Agent and Administrative Agent's
counsel; and (2) such other evidence of the perfection of its
security interests as Administrative Agent and Administrative
Agent's counsel may reasonably require;
(ii) A current, on site instrument survey of the Individual
Property containing a certification thereon, or on a separate
surveyor's certificate, of a land surveyor acceptable to
Administrative Agent which meets Administrative Agent's survey
requirements previously furnished to Borrower to the reasonable
satisfaction of Administrative Agent and its counsel;
(iii) If the Individual Property is ground leased by the
Borrowing Base Property Owner, a copy of the Ground Lease. Further,
in the event that the ground lessor of the Individual Property is
(i) an Affiliate of any Loan Party and the fee interest has not been
separately mortgaged by such Affiliate, the said ground lessor shall
join in the Mortgage to include within the Collateral the fee
interest in the said Individual Property or (ii) not an Affiliate of
any Loan Party, or, if an Affiliate of any Loan Party and the fee
interest has been separately mortgaged by such Affiliate, the
Administrative Agent shall receive an estoppel certificate from the
ground lessor in form and substance reasonably acceptable to the
Administrative Agent.
(iv) The Borrower has utilized reasonable efforts to obtain
executed estoppel certificates and subordination, nondisturbance and
attornment agreements from tenants under Major Leases;
(v) Copies of all Major Leases and, to the extent required by
the
EA-3
Administrative Agent, copies of other Leases;
(vi) A copy of the property management agreement with respect
to the Individual Property, if any, and, if requested by the
Administrative Agent, a consent by the property manager to the
collateral assignment of the property management agreement to the
Administrative Agent, on behalf of the Lenders;
(vii) A copy of any reciprocal easement agreements with
respect to the Individual Property and, only if there are material
financial obligations of a recurring and defined nature payable by
the owner of the Borrowing Base Property thereunder, if requested by
the Administrative Agent, an Estoppel Certificate from all of the
parties thereto in form and substance acceptable to the
Administrative Agent;
(viii) Evidence of existence of all Licenses and Permits to
evidence compliance with Legal Requirements with respect to the use
and operation of the Individual Property;
(ix) Evidence of insurance complying with the requirements of
Exhibit E, hereto;
(x) A current Appraisal;
(xi) A current environmental Phase I Site Assessment performed
by a firm acceptable to the Administrative Agent, which indicates
the property is free from recognized hazardous materials or
substances apparent from the inspection, or affected by such
environmental matters as may be acceptable to the Administrative
Agent in its sole and absolute discretion;
(xii) A current structural report relative to any improvements
on the Individual Property; and
(xiii) Such other real estate documents reasonably deemed
appropriate for commercially reasonable underwriting by the
Administrative Agent in respect of the Borrowing Base Property.
Borrowing Base Property Owner and Borrowing Base Property Owners shall mean,
from time to time, the Wholly-Owned Subsidiary or Subsidiaries of the Borrower
or KRT which is or are the owner or owners of the fee simple interest in, or the
ground lessee of, a Collateral Property or the Collateral Properties.
Borrowing Base Value shall mean, as determined by the Administrative Agent as of
each Calculation Date, (i) for each Borrowing Base Property which is a
Stabilized Asset, the lesser of the (x) Adjusted Appraised Value of such
Borrowing Base Property, as determined by an Appraisal completed within the
prior six (6) month period, or (y) Adjusted Capitalized Value of such Borrowing
Base Property, or (z) if applicable, the Maximum Property Amount (for any such
Borrowing Base Property as to which there is no such Appraisal, the Borrowing
Base Value thereof shall be the lesser of subsection (i)(y) or (i)(z), above)
and (ii) for each Borrowing Base Property which is a Non-Stabilized Asset, the
lesser of the (x) Adjusted Appraised Value of such Borrowing Base Property, as
determined by the most recent Appraisal of such Borrowing Base Property, or (y)
Adjusted Capitalized Value of such Borrowing Base Property, or (z) if
applicable, the Maximum Property Amount. Notwithstanding the above, for purposes
of determining the Borrowing Base Value, the Borrowing Base Value for any
Borrowing Base
EA-4
Property as to which an Event of Loss has occurred shall be equal to the lesser
of (1) Adjusted Capitalized Value of such Borrowing Base Property or (2) if
applicable, the Maximum Property Amount, for a period equal to the lesser of (i)
twelve (12) months from the occurrence of the Event of Loss or (ii) the
determination that the subject Borrowing Base Property is not, or ceases to be,
a Restoration Property.
Breakage Fees as defined in Section 2.3.15.
Business Day shall mean: any day of the year on which offices of Administrative
Agent are not required or authorized by law to be closed for business in Boston,
Massachusetts. If any day on which a payment is due is not a Business Day, then
the payment shall be due on the next day following which is a Business Day, and
such extension of time shall be included in computing interest and fees in
connection with such payment. Further, if there is no corresponding day for a
payment in the given calendar month (i.e., there is no "February 30th"), the
payment shall be due on the last Business Day of the calendar month.
Calculation Date shall mean the last day of each calendar quarter commencing
with December 31, 2002.
Calculation Period shall mean the following for each Calculation Date, the two
(2) immediately preceding calendar quarters (inclusive of the applicable
Calculation Date).
Capital Stock shall mean (i) with respect to any Person that is a corporation,
any and all shares, interests, participations or other equivalents (however
designated and whether or not voting) of corporate stock, including without
limitation, each class or series of common stock and preferred stock of such
Person and (ii) with respect to any Person that is not a corporation, any and
all investment units, partnership, membership or other equity interests of such
Person.
Cash Flow Projections shall mean a detailed schedule of all cash Distributions
projected to be made to the Borrower from the Borrower Subsidiaries within the
next one hundred and eighty (180) days, being initially the Cash Flow
Projections to be provided within thirty (30) days of the Closing Date based
upon information then available to the Borrower, and subject to change as shall
be detailed in the respective Officer's Certificate to be provided to the
Administrative Agent as set forth herein.
Change of Control shall mean the occurrence of the occurrence of any of the
following:
(a) The acquisition by any Person, or "group" (within the meaning of
Sections 13(d) and 14(d)(2) of the Securities Exchange Act of 1934, as
amended) of Persons acting in concert, of beneficial ownership (within the
meaning of Rule 13d-3 of the Securities and Exchange Commission under the
Securities Exchange Act of 1934, as amended), directly or indirectly, of
50% or more of the outstanding shares of voting stock of KRT;
(b) During any period of twelve (12) consecutive calendar months,
individuals:
(1) who were directors of KRT on the first day of such period; or
(2) whose election or nomination for election to the board of
directors of KRT was recommended or approved by at least a majority
of the directors then still in office who were directors of KRT on
the first day of such period, or whose election or nomination for
election was so approved,
shall cease to constitute a majority of the board of directors of
KRT.
EA-5
(c) KRT shall cease to be the sole general partner of Borrower; or
(d) KRT shall cease to own at least fifty percent (50%) of the beneficial
ownership interest in the Borrower; or
(e) The removal or replacement of the general partner or managing member
of any Borrowing Base Property Owner such that the sole general partner or
managing member thereof is not ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty L.P., the Borrower,
KRT or a Wholly-Owned Subsidiary of the Borrower, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty
L.P. or KRT; or
(f) With respect to any Borrowing Base Property Owner, the transfer of any
ownership interest therein such that such Borrowing Base Property Owner is
not a Wholly-Owned Subsidiary of the Borrower, ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty L.P.,
or KRT.
Closing Date as defined in Section 5.1.
Code shall mean the Internal Revenue Code of 1986, as amended from time to time,
and the regulations promulgated and rulings issued thereunder. Section
references to the Code are to the Code, as in effect at the date of this
Agreement and any subsequent provisions of the Code, amendatory thereof,
supplemental thereto or substituted therefor.
Collateral as defined in Section 5.1.4.
Collateral Property and Collateral Properties shall mean any Borrowing Base
Property or Borrowing Base Properties and other Individual Properties which were
a Borrowing Base Property, were no longer deemed such under Section 3.4.1, and
for which the Release Conditions have not been satisfied, as described in
Section 3.4.3.
Collateral Release Request as defined in Section 3.3.
Combined EBITDA shall mean the sum of (i) the EBITDA for each Consolidated
Kramont Entity and (ii) the Pro Rata share of the EBITDA for each Unconsolidated
Kramont Entity. In determining Combined EBITDA, (1) the excess of equity in
earnings from Unconsolidated Kramont Entities over ordinary cash dividends
actually received from such Unconsolidated Kramont Entities shall be subtracted,
(2) the excess of ordinary cash dividends actually received from such
Unconsolidated Kramont Entities over the equity in earnings from Unconsolidated
Kramont Entities shall be added, and (3) the foregoing shall be calculated
without duplication.
Commitment shall mean, with respect to each Lender, the amount set forth on
Exhibit I hereto as the amount of such Lender's commitment to make advances to
the Borrower, as may be amended from time to time by the Administrative Agent as
provided in Article 13.
Commitment Percentage shall mean, with respect to each Lender, the percentage
set forth on Exhibit I hereto as such Lender's percentage of the aggregate
Commitments of all of the Lenders, as may be amended from time to time by the
Administrative Agent as provided in Article 13.
Consolidated or Consolidating means consolidated or consolidating as defined in
accordance with GAAP.
Consolidated Kramont Entity or Consolidated Kramont Entities shall mean, singly
and collectively, the Borrower, KRT, ▇▇▇▇▇▇▇▇▇▇, and any Wholly-Owned Subsidiary
of the Borrower, KRT or ▇▇▇▇▇▇▇▇▇▇.
EA-6
Cost to Repair as defined in Section 14.3.1.
Debt shall mean, with respect to any Person, without duplication, (i) all
indebtedness of such Person for borrowed money, (ii) all indebtedness of such
Person for the deferred purchase price of property or services (other than
property and services purchased, and expense accruals and deferred compensation
items arising, in the ordinary course of business), (iii) all obligations of
such Person evidenced by notes, bonds, debentures or other similar instruments
(other than performance, surety and appeal bonds arising in the ordinary course
of business), (iv) all indebtedness of such Person created or arising under any
conditional sale or other title retention agreement with respect to property
acquired by such Person (even though the rights and remedies of the seller or
lender under such agreement in the event of default are limited to repossession
or sale of such property), (v) all obligations of such Person under leases which
have been, or should be, in accordance with generally accepted accounting
principles, recorded as capital leases, to the extent required to be so
recorded, (vi) all reimbursement, payment or similar obligations of such Person,
contingent or otherwise, under acceptance, letter of credit or similar
facilities (other than letters of credit in support of trade obligations or in
connection with workers' compensation, unemployment insurance, old-age pensions
and other social security benefits in the ordinary course of business), (vii)
all Debt in the nature of that referred to in clauses (i) through (vi) above
which is guaranteed directly or indirectly by such Person, or in effect
guaranteed directly or indirectly by such Person through an agreement (A) to pay
or purchase such Debt or to advance or supply funds for the payment or purchase
of such Debt, (B) to purchase, sell or lease (as lessee or lessor) property, or
to purchase or sell services, primarily for the purpose of enabling the debtor
to make payment of such Debt or to assure the holder of such Debt against loss
in respect of such Debt, (C) to supply funds to or in any other manner invest in
the debtor (including any agreement to pay for property or services irrespective
of whether such property is received or such services are rendered) or (D)
otherwise to assure a creditor against loss in respect of such Debt, (viii) any
obligation, contingent or otherwise, of such Person guaranteeing or having the
economic effect of guaranteeing any indebtedness or other obligation of any
Person, either directly or indirectly, of the nature described in clauses (i)
through (vi), and (ix) all Debt referred to in clauses (i) through (vi) above
secured by (or for which the holder of such Debt has an existing right,
contingent or otherwise, to be secured by) any Lien, security interest or other
charge or encumbrance upon or in property (including, without limitation,
accounts and contract rights) owned by such Person, even though such Person has
not assumed or become liable for the payment of such Debt. Without limiting the
generality of the foregoing, in determining Debt, Debt shall include any Debt
secured by the Recreation Mortgage Notes Receivable.
Default as defined in Section 10.1.
Default Rate as defined in Section 2.3.13.
Delinquent Lender as defined in Section 13.2.7.
Depository Account as defined in Section 7.14.1.
Development Assets shall mean Real Estate Properties as to which construction of
the associated or contemplated improvements has commenced (either new
construction or substantial renovation) but has not yet been completed such that
a certificate of occupancy (or the local equivalent) for a substantial portion
of the intended improvements has not yet been issued.
Distribution shall mean, with respect to any Person, that such Person has paid a
dividend or returned any equity capital to its stockholders, members or partners
or made any other distribution, payment or delivery of property (other than
common stock or partnership or
EA-7
membership interests of such Person) or cash to its stockholders, members or
partners as such, or redeemed, retired, purchased or otherwise acquired,
directly or indirectly, for a consideration any shares of any class of its
capital stock or any membership or partnership interests (or any options or
warrants issued by such Person with respect to its capital stock or membership
or partnership interests), or shall have permitted any of its Subsidiaries to
purchase or otherwise acquire for a consideration any shares of any class of the
capital stock or any membership or partnership interests of such Person (or any
options or warrants issued by such Person with respect to its capital stock or
membership or partnership interests). Without limiting the foregoing,
"Distributions" with respect to any Person shall also include all payments made
by such Person with respect to any stock appreciation rights, plans, equity
incentive or achievement plans or any similar plans.
Dollars shall mean lawful money of the United States.
Drawdown Date as defined in Section 2.1.2(i).
EBITDA shall mean for any Person the sum of (i) net income (or loss), plus (ii)
actual interest paid or payable respecting all Debt to the extent included as an
expense in the calculation of net income, plus (iii) total Tax Expenses to the
extent included as an expense in the calculation of net income, plus (iv) total
depreciation and amortization expense, whether paid or accrued, to the extent
included as an expense in the calculation of net income, plus (v) losses from
extraordinary items, nonrecurring items, asset sales, write-ups or forgiveness
of debt, to the extent included as an expense in the calculation of net income,
minus (vi) gains from extraordinary items, nonrecurring items, asset sales,
write-ups or forgiveness of debt, to the extent included as income in the
calculation of net income, minus (vii) an assumed replacement reserve in an
amount equal to $0.25 per annum multiplied by the average rentable square
footage of improvements on any applicable Real Estate Property, adjusted (viii)
for straight line rents, all of the foregoing as determined in accordance with
GAAP. Without limiting the generality of the foregoing, in determining EBITDA,
net income shall include as income, Rent Loss Proceeds, interest received on
account of the Recreation Mortgage Notes Receivable and as an expense, interest
paid or payable with respect to any Debt secured by such Recreation Mortgage
Notes Receivable.
Effective LIBO Rate. The term "Effective LIBO Rate" means the per annum rate
equal to the aggregate of (x) the Adjusted LIBO Rate, plus (y) the Applicable
Margin for Effective LIBO Rate Loans.
Effective LIBO Rate Advance. The term "Effective LIBO Rate Advance" means any
principal outstanding under this Agreement which pursuant to this Agreement
bears interest at the Effective LIBO Rate.
Eligibility Criteria shall mean the following criteria which must be satisfied
in a manner acceptable to the Administrative Agent for each Borrowing Base
Property:
(a) the Borrowing Base Property is a retail center consistent with the
Borrower's business strategy;
(b) the Borrower provides reasonably acceptable historical operating and
leasing information;
(c) the Borrower provides a certification as to the absence of any
material environmental issues;
EA-8
(d) the Borrower provides certification as to the absence of any material
structural issues; and
(e) no liens or encumbrances shall exist on the Borrowing Base Property
upon its inclusion as a Borrowing Base Property, other than Permitted Liens.
Eligible Assignee shall mean any of (a) a commercial bank organized under the
laws of the United States, or any State thereof or the District of Columbia, and
having total assets in excess of $1,000,000,000; (b) a savings and loan
association or savings bank organized under the laws of the United States, or
any State thereof or the District of Columbia, and having a net worth of at
least $100,000,000, calculated in accordance with generally accepted accounting
principles; (c) a commercial bank organized under the laws of any other country
which is a member of the Organization for Economic Cooperation and Development
(the "OECD"), or a political subdivision of any such country, and having total
assets in excess of $1,000,000,000, provided that such bank is acting through a
branch or agency located in the country in which it is organized or another
country which is also a member of the OECD; (d) the central bank of any country
which is a member of the OECD; and (e) any other assignee that, in the
reasonable judgment of the Administrative Agent, is a reputable institutional
investor with substantial experience in lending and originating loans similar to
the Loan, or in purchasing, investing in or otherwise holdings such loans,
having a financial net worth of at least $100,000,000 and (f) any Lender
Affiliate or a Related Fund of a Lender. For the purposes hereof, "Lender
Affiliate" shall mean, (a) with respect to any Person who would otherwise be an
Eligible Assignee under clauses (a) - (e), above (a "Qualified Assignee"), (i)
an Affiliate of such Qualified Assignee or (ii) any entity (whether a
corporation, partnership, trust or otherwise) that is engaged in making,
purchasing, holding or otherwise investing in bank loans and similar extensions
of credit in the ordinary course of its business and is administered (including
as placement agent therefor) or managed by a Qualified Assignee or an Affiliate
of such Qualified Assignee and (b) with respect to any Lender that is a fund
which invests in bank loans and similar extensions of credit, any other fund
that invests in bank loans and similar extensions of credit and is managed by
the same investment advisor as such Lender or by an Affiliate of such investment
advisor (i.e., a Related Fund of such Lender). Further, for the purposes hereof,
"Related Fund" shall mean, with respect to a Lender which is a fund that invests
in loans, any other such fund managed by the same investment advisor as such
Lender or by an Affiliate of such Lender or such advisor. Neither the Borrower
nor an affiliate of the Borrower shall be Eligible Assignee.
Environmental Indemnity as defined in Section 3.1.5.
Environmental Legal Requirements as defined in the Environmental Indemnity.
ERISA shall mean the Employee Retirement Income Security Act of 1974, as amended
from time to time, and the regulations promulgated and rulings issued
thereunder. Section references to ERISA are to ERISA, as in effect at the date
of this Agreement and any subsequent provisions of ERISA, amendatory thereof,
supplemental thereto or substituted therefor.
ERISA Affiliate shall mean each person (as defined in Section 3(9) of ERISA)
which together with either Borrower or a Loan Party would be deemed to be a
"single employer" (i) within the meaning of Section 414(b), (c), (m) or (o) of
the Code or (ii) as a result of either Borrower or a Loan Party being or having
been a general partner of such person.
Established Loan Amount shall mean as of the date hereof One-Hundred Million
($100,000,000.00) Dollars, as such amount may be increased in accordance with
Section 2.1.1.
Event of Default as defined in Section 10.1.
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Event of Loss shall mean, with respect to any Collateral Property, any of the
following: (a) any loss or destruction of, or damage to, such Collateral
Property; or (b) any actual condemnation, seizure or taking, by exercise of the
power of eminent domain or otherwise, of such Collateral Property, or
confiscation of such Collateral Property or the requisition of such Collateral
Property by a Governmental Agency or any Person having the power of eminent
domain, or any voluntary transfer of such Collateral Property or any portion
thereof in lieu of any such condemnation, seizure or taking.
Excess Payment Amount shall mean upon receipt of any Mandatory Principal
Payment, the amount by the which the Minimum Loan Amount would exceed the
aggregate of (a) the outstanding principal balance of the Loan plus (b) the L/C
Exposure, if the Mandatory Principal Payment was applied toward payment of the
Obligations.
Federal Funds Rate shall mean: For any day, a fluctuating interest rate per
annum 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, as published for such day (or, if such day is not a Business Day,
for the next preceding Business Day) by the Federal Reserve Bank of New York, or
if such rate is not so published for any day that is a Business Day, the average
of the quotations for such day on such transactions received by the
Administrative Agent from three federal funds brokers of recognized standing
selected by the Administrative Agent.
FFO shall mean for KRT net income (loss) (computed in accordance with GAAP)
excluding gains (or losses) from debt restructurings and sales of depreciated
real property, plus real estate related depreciation and amortization and after
adjustments for unconsolidated partnerships and joint ventures, as set forth in
more detail under the definitions and interpretations thereof promulgated by the
National Association of Real Estate Investment Trusts or its successor.
Financial Covenants shall mean those covenants of the Borrower set forth in
Sections 7.19, 7.20, 7.21, 7.22, and 7.23.
Fiscal Year shall mean each twelve month period commencing on January 1 and
ending on December 31.
Fixed Charges shall mean the aggregate of all (a) Interest Expenses, (b) all
regularly scheduled principal amortization payments on all Debt of the
Consolidated Kramont Entities, (c) the Pro Rata share of all regularly scheduled
principal amortization payments on all Debt of the Unconsolidated Kramont
Entities, (d) all preferred dividend payments paid or payable by the
Consolidated Kramont Entities; (e) the Pro Rata share of all preferred dividend
payments paid or payable by the Unconsolidated Kramont Entities, (f) all Ground
Lease Payments, (g) all Tax Expenses for the Consolidated Kramont Entities, and
(h) the Pro Rata share of all Tax Expenses for the Unconsolidated Kramont
Entities, all of the foregoing as determined in accordance with GAAP. Without
limiting the generality of the foregoing, in determining Fixed Charges, Interest
Expense shall be net of interest paid or payable to the Borrower on account of
the Recreation Mortgage Notes Receivable and principal amortization shall be net
of the regularly scheduled principal amortization payments due to the Borrower
on account of the Recreation Mortgage Notes Receivable.
Fixed Charge Ratio shall mean, for each Calculation Period, the ratio of (a)
Combined EBITDA to (b) Fixed Charges.
Formation Documents shall mean, singly and collectively, the partnership
agreements, joint venture agreements, limited partnership agreements, limited
liability company or operating
EA-10
agreements and certificates of limited partnership and certificates of
formation, articles (or certificate) of incorporation and by-laws and any
similar agreement, document or instrument of any Person, as amended subject to
the terms and provisions hereof.
Funding Evidence shall mean, in connection with the Borrower raising the funds
necessary to make a Mandatory Principal Payment as required under Section
2.3.8(i), evidence in connection with (i) the sale of any asset, that the
Borrower has entered into a sales agreement, letter of intent, or listed the
asset for sale with a recognized broker or (ii) the financing or refinancing of
an asset, that the Borrower has obtained a commitment for such financing or
submitted a loan application to a recognized financial institution.
GAAP shall mean generally accepted accounting principles in the United States of
America as of the date applicable.
Governmental Authority shall mean any court, board, agency, commission, office
or authority of any nature whatsoever for any governmental ▇▇▇▇ (▇▇▇▇▇▇▇, ▇▇▇▇▇,
▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇, ▇▇▇▇ or otherwise) whether now or hereafter in
existence.
Ground Leases shall mean, from time to time, any Ground Lease relative to a
Collateral Property as to which a Loan Party is the ground lessee.
Ground Lease Payments shall mean the sum of (i) payments made by the
Consolidated Kramont Entities under ground leases, plus (ii) the Pro Rata share
of payments made under ground leases by Unconsolidated Kramont Entities.
Guaranty as defined in Section 3.1.4.
Guarantor or Guarantors as defined in Section 1.4.
Hazardous Materials shall mean and include asbestos, mold, flammable materials,
explosives, radioactive substances, polychlorinated biphenyls, radioactive
substances, other carcinogens, oil and other petroleum products, pollutants or
contaminants that could be a detriment to the environment, and any other
hazardous or toxic materials, wastes, or substances which are defined,
determined or identified as such in any past, present or future federal, state
or local laws, rules, codes or regulations, or any judicial or administrative
interpretation of such laws, rules, codes or regulations.
Implied Debt Service shall mean the annual amount of principal and interest
payable on a hypothetical loan in an amount equal to the Implied Loan Amount,
based upon a twenty-five (25) year direct reduction monthly amortization
schedule and a per annum interest rate equal to the greater of (i) the actual
blended interest rate for the Loan, or (ii) the 10-year Treasury Rate as of the
Calculation Date plus two percent (2%); however, using a minimum constant of
nine and 26/100 percent (9.26%).
Implied Debt Service Coverage Ratio shall mean as of each Calculation Date, the
ratio of the Adjusted Net Operating Income for all Borrowing Base Properties for
the most recent two (2) fiscal quarters, annualized, to Implied Debt Service.
Implied Loan Amount shall mean a principal amount which would generate as of any
Calculation Date an Implied Debt Service Coverage Ratio of 1.45 to 1.00.
Increased Cost Event as defined in Section 2.6.1.
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Increased Tax Event as defined in Section 2.6.3.
Indemnified Party as defined in Section 7.17.
Individual Property and Individual Properties shall mean, from time to time, all
real estate property owned or ground leased by any Consolidated Kramont Entity,
together with all improvements, fixtures, equipment, and personalty relating to
such property.
Insurance/Taking Release Conditions shall mean as to any Event of Loss, the
following conditions: (a) the Cost to Repair is less than or equal to Five
Hundred Thousand Dollars ($500,000.00); (b) no Event of Default shall have
occurred and be continuing; (c) the Collateral Property and the use thereof
after the Repair Work will be in compliance with, and permitted under, all
applicable Legal Requirements; and (d) such Event of Loss does not materially
impair access to the Collateral Property.
Interest Expense shall mean the sum of (i) the aggregate actual interest
(including capitalized interest) paid or payable respecting all Debt by the
Consolidated Kramont Entities, and (ii) the Pro Rata share of the aggregate
actual interest (including capitalized interest) paid or payable by the
Unconsolidated Kramont Entities. Without limiting the generality of the
foregoing, in determining Interest Expense, Interest Expense shall include
interest paid or payable with respect to any Debt secured by such Recreation
Mortgage Notes Receivable and Interest Expense shall be net of interest received
on account of the Recreation Mortgage Notes Receivable.
Interest Expense Coverage shall mean the ratio for each Calculation Period of:
(A) Combined EBITDA to (B) Interest Expense.
Interest Period.
(A) The term "Interest Period" means with respect to each Effective LIBO
Rate Advance: a period of one (1), three (3), or six (6) consecutive months,
subject to availability, as selected, or deemed selected, by Borrower at least
two (2) Business Days prior to the initial date of such Effective LIBO Rate
Advance, or if an advance is already outstanding, at least two (2) Business Days
prior to the end of the current Interest Period. Each such Interest Period shall
commence on the Business Day so selected, or deemed selected, by Borrower and
shall end on the numerically corresponding day in the first, third, or sixth
month thereafter, as applicable. Provided, however: (i) if there is no such
numerically corresponding day, such Interest Period shall end on the last
Business Day of the applicable month, (ii) if the last day of such an Interest
Period would otherwise occur on a day which is not a Business Day, such Interest
Period shall be extended to the next succeeding Business Day; but (iii) - if
such extension would otherwise cause such last day to occur in a new calendar
month, then such last day shall occur on the next preceding Business Day.
(B) The term "Interest Period" shall mean with respect to each Variable
Rate Advance consecutive periods of one (1) day each.
(C) No Interest Period may be selected which would end beyond the then
Maturity Date of the Loan. If the last day of an Interest Period would otherwise
occur on a day which is not a Business Day, such last day shall be extended to
the next succeeding Business Day, except as provided above in clause (A)
relative to an Effective LIBO Rate Advance.
Investment shall mean the acquisition of any real or tangible personal property
or of any stock or other security, any loan, advance, bank deposit, money market
fund, contribution to capital, extension of credit (except for accounts
receivable arising in the ordinary course of business and
EA-12
payable in accordance with customary terms), or purchase or commitment or option
to purchase or otherwise acquire real estate or tangible personal property or
stock or other securities of any party or any part of the business or assets
comprising such business, or any part thereof.
Knowledge or knowledge shall mean with respect to the Borrower, KRT and the
Borrower Subsidiaries, (a) the actual knowledge of ▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇.,
President of Kramont, ▇▇▇▇ ▇▇▇▇▇, Chief Financial Officer of Kramont, ▇▇▇▇▇▇▇
▇▇▇▇▇▇, Senior Vice President of Kramont, or ▇▇▇▇ ▇. ▇▇▇▇▇▇▇, Chief Accounting
Officer of Kramont, or (b) the actual knowledge of such Persons' successors to
their positions (or positions similar thereto) as officers of Kramont.
Notwithstanding the foregoing, such named parties and their successors are not
parties to this Agreement and shall have no liability for a breach of any
representation, warranty, covenant or agreement deemed to be made to their
actual knowledge.
Kramont Party and Kramont Parties shall mean, singly and collectively, each Loan
Party and each Borrower Subsidiary.
KRT as defined in Section 1.2.
Land Assets shall mean Real Estate Properties constituting raw or undeveloped
land as to which construction of contemplated improvements has not commenced.
Late Charge as defined in Section 2.3.14.
L/C Draw shall mean a payment made by the Administrative Agent pursuant to a
Letter of Credit which was presented to the Administrative Agent for a draw of
proceeds thereunder.
L/C Exposure shall mean, at any time, the sum of (a) the aggregate undrawn
amount of all outstanding Letters of Credit at such time, plus (b) the aggregate
amount of all L/C Draws that have not yet been reimbursed by or on behalf of the
Borrower, or repaid through a Loan Advance, at such time.
Lease shall mean any lease relative to all or any portion of a Collateral
Property.
Legal Requirements shall mean all applicable federal, state, county and local
laws, by-laws, rules, regulations, codes and ordinances, and the requirements of
any governmental agency or authority having or claiming jurisdiction with
respect thereto, including, but not limited to, those applicable to zoning,
subdivision, building, health, fire, safety, sanitation, the protection of the
handicapped, and environmental matters and shall also include all orders and
directives of any court, governmental agency or authority having or claiming
jurisdiction with respect thereto.
Lenders as defined in the Preamble.
Lenders' Consultant as defined in Section 7.28.
Letter of Credit as defined in Section 2.7.1.
Leverage Ratio shall mean the quotient (expressed as a percentage) resulting
from dividing (i) the aggregate of (x) the Total Liabilities and all Debt,
without duplication, of the Consolidated Kramont Entities and (y) the Pro Rata
share of the Total Liabilities and all Debt, without duplication, of the
Unconsolidated Kramont Entities by (ii) the Total Asset Value.
LIBO Rate. The term "LIBO Rate" means, as applicable to any Effective LIBO Rate
Advance, the rate per annum as determined on the basis of the offered rates for
deposits in Dollars, for a period
EA-13
of time equal to the Interest Period for the Effective LIBO Rate Advance which
appears on the "Telerate Page 3750" as of 11:00 a.m. London time on the day that
is two (2) London Banking Days preceding the first day of such Effective LIBO
Rate Advance (or if the Effective LIBO Rate Advance is the conversion of an
outstanding Effective LIBO Rate Advance, two London Banking Days preceding the
end of the Interest Period of such outstanding advance); provided, however, if
the rate described above does not appear on the Telerate System on any
applicable interest determination date, the LIBO Rate shall be the rate (rounded
upward, if necessary, to the nearest one hundred-thousandth of a percentage
point), determined on the basis of the offered rates for deposits in Dollars for
a period of time comparable to such Interest Period which are offered by four
major banks in the London interbank market at approximately 11:00 a.m. London
time, on the day that is two (2) London Banking Days preceding the first day of
such Effective LIBO Rate Advance as selected by Administrative Agent (or if the
Effective LIBO Rate Advance is the conversion of an outstanding Effective LIBO
Rate Advance, two London Banking Days preceding the end of the Interest Period
of such outstanding advance). The principal London office of each of the four
major London banks will be requested to provide a quotation of its Dollar
deposit offered rate. If at least two (2) such quotations are provided, the rate
for that date will be the arithmetic mean of the quotations. If fewer than two
(2) quotations are provided as requested, the rate for that date will be
determined on the basis of the rates quoted for loans in Dollars to leading
European banks for a period of time comparable to such Interest Period offered
by major banks in New York City at approximately 11:00 a.m. New York City time,
on the day that is two (2) London Banking Days preceding the first day of such
Effective LIBO Rate Advance (or if the Effective LIBO Rate Advance is the
conversion of an outstanding Effective LIBO Rate Advance, two London Banking
Days preceding the end of the Interest Period of such outstanding advance).
Lien shall mean any mortgage, deed of trust, lien, pledge, hypothecation,
assignment, security interest, or any other encumbrance, charge or transfer,
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and mechanic's, materialmen's and other similar liens and
encumbrances.
Licenses and Permits shall mean all licenses, permits, authorizations and
agreements issued by or agreed to by any governmental authority, or by a private
party pursuant to a Permitted Title Exception, and including, but not limited
to, building permits, occupancy permits and such special permits, variances and
other relief as may be required pursuant to Legal Requirements which may be
applicable to any Collateral Property.
Line Fee as defined in Section 2.4.3.
Line Percentage shall mean either (a) 0.05% for any quarter during which the
average daily balance for such quarter of the aggregate of (x) the outstanding
principal balance of the Loan and (y) the L/C Exposure is less than fifty
percent (50%) of the Total Commitment, or (b) 0.0375% for any quarter during
which the average daily balance for such quarter of the aggregate of (x) the
outstanding principal balance of the Loan and (y) the L/C Exposure is equal to
or greater than fifty percent (50%) of the Total Commitment.
Liquidation Proceeds. Amounts received by the Administrative Agent and/or the
Lenders in the exercise of the rights and remedies under the Loan Documents
(including, but not limited to, all rents, profits and other proceeds received
by the Administrative Agent and/or the Lenders from the liquidation of, or
exercising rights upon the occurrence of an Event of Default relative to, any
Collateral, but not including any amount bid at a foreclosure sale or on behalf
of the Administrative Agent or otherwise credited to the Borrower in, any
deed-in-lieu of foreclosure or similar transaction).
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Loan as defined in Section 1.3.
Loan Advances shall mean any advance of any proceeds of the Loan hereunder, and
as defined in Section 2.1.1.
Loan Agreement as defined in the Preamble.
Loan Balance Test shall mean the determination that the aggregate of (a)
outstanding principal balance of the Loan plus (b) the L/C Exposure, equals or
exceeds the Minimum Loan Amount.
Loan Documents as defined in Section 3.2.
Loan Party and Loan Parties shall mean, singly and collectively, the Borrower,
KRT, and any Borrower Subsidiary or Subsidiary of KRT which is a party to any
Loan Document or the beneficiary of any Letter of Credit, each Borrowing Base
Property Owner, and any Subsidiary and Affiliate of any of the foregoing which
is party to any Loan Document.
Loan Termination Date as defined in Section 2.2.2.
London Banking Day. The term "London Banking Day" means any day on which
dealings in deposits in Dollars are transacted in the London interbank market.
Major Event of Loss shall mean, with respect to any Collateral Property, both
(1) any of the following: (a) any loss or destruction of, or damage to, such
Collateral Property such that either (x) the repairs and restoration thereof
cannot be completed, in the judgment of the applicable Lender's Consultant and
if there is no Lender's Consultant, an independent architect retained by the
Borrower, within twelve (12) months after the occurrence of such loss, damage or
destruction or (y) rendering more than fifty (50%) percent of the said
Collateral Property unusable for the purposes conducted thereon immediately
prior to such loss, destruction or damage, as determined by the applicable
Lender's Consultant and if there is no Lender's Consultant, an independent
architect retained by the Borrower; or (b) any actual condemnation, seizure or
taking, by exercise of the power of eminent domain or otherwise, of such
Collateral Property, or confiscation of such Collateral Property or the
requisition of such Collateral Property by a Governmental Agency or any Person
having the power of eminent domain, or any voluntary transfer of such Collateral
Property or any portion thereof in lieu of any such condemnation, seizure or
taking, rendering more than fifty (50%) percent of the said Collateral Property
unusable for the purposes conducted thereon immediately prior to action, as
determined by the applicable Lender's Consultant and if there is no Lender's
Consultant, an independent architect retained by the Borrower, and (2) the
Administrative Agent does not elect under Section 14.3.3 to make the Net
Proceeds with respect to such Event of Loss available for Repair Work.
Major Lease shall mean (i) any Lease for space in any Collateral Property (x) in
excess of 25,000 rentable square feet or (y) in excess of twenty (20%) percent
of the rentable square footage of such Collateral Property or (ii) any Lease
with a tenant who is a tenant in more than one Collateral Property and who
leases 10,000 or more rentable square feet, in the aggregate, in all Collateral
Properties.
Mandatory Principal Payment as defined in Section 2.3.8(v).
Material Adverse Effect shall mean a material adverse effect on (i) the
business, assets, prospects, operations or financial or other condition of any
of the Borrower, KRT, or, taken as a whole, the Loan Parties, (ii) the ability
of any of the Borrower, KRT, or, taken as a whole, the Loan Parties to perform
any material Obligations or to pay any Obligations which it is or they are
obligated to pay
EA-15
in accordance with the terms hereof or of any other Loan Document, (iii) the
rights of, or benefits available to, the Administrative Agent and/or any of the
Lenders under any Loan Document or (iv) any Lien given to Administrative Agent
and/or any of the Lenders on any material portion of the Collateral or the
priority of any such Lien.
Maturity shall mean the Maturity Date, or, in any instance, upon acceleration of
the Loan, if the Loan has been accelerated by Lenders upon an Event of Default.
Maturity Date as defined in Section 2.2.
Maximum Loan Amount as defined in Section 2.1.1.
Maximum Property Amount shall mean for any Borrowing Base Property as to which
the Administrative Agent has agreed, or hereafter agrees, at Borrower's request,
in the applicable Mortgage to limit the portion of the guaranty by the
applicable Borrowing Base Property Owner secured by the Mortgage to less than
the entire amount of the Loan, the said limited principal amount. The Maximum
Property Amounts applicable as of the date hereof are initially listed in
Exhibit J hereto.
Minimum Loan Amount shall mean initially $8,690,000.00, as such amount may be
adjusted by the Administrative Agent in accordance with Section 2.1.1.
Minimum Loan Amount Limitation as defined in Section 2.1.1.
▇▇▇▇▇▇▇▇▇▇. ▇▇▇▇▇▇▇▇▇▇ ▇▇ Realty L.P., a Delaware limited partnership, the
general partner of which is CV GP L.P. and 99.87% of the equity interest therein
being owned, directly or indirectly, by the Borrower.
Net Operating Income: For any period of determination, (i) net operating income
generated by an Real Estate Property for such period (i.e., gross operating
income, inclusive of any Rent Loss Proceeds, less expenses (exclusive of debt
service, capital expenditures and vacancy allowances)), determined in accordance
with GAAP, as generated by, through or under Leases, and (ii) all other income
arising from direct operations of or licenses or operating agreements for any
part of the Real Estate Property determined on a GAAP basis. For purposes
hereof, all rental income shall be adjusted for straight line rents. Borrower
shall provide Administrative Agent with all information and materials required
by Administrative Agent necessary for the determination of Net Operating Income.
If any Leases are scheduled to expire during such period of determination, no
rents or other amounts payable under such Leases with respect to any portion of
such period occurring after such scheduled expiration date shall be included in
the determination of Net Operating Income for such period. If any Leases are
scheduled to commence (and rent and occupancy pursuant thereto are also
scheduled to commence) during such period of determination, the rents and other
amounts payable under such Leases with respect to any period occurring after the
scheduled commencement date shall be included in the determination of Net
Operating Income for such period.
Net Proceeds. (1) The net amount of all insurance proceeds received under any
insurance policies other than Rent Loss Proceeds as a result of the occurrence
of an Event of Loss described in clause (a) of the definition of Event of Loss
with respect to any Collateral Property, after deduction of the reasonable costs
and expenses (including, but not limited to reasonable counsel fees), if any, in
collecting the same, or (2) the net amount of all awards and payments received
with respect to the occurrence of an Event of Loss described in clause (b) of
the definition of Event of Loss, after deduction of the reasonable costs and
expenses (including, but not limited to reasonable counsel fees), if any, in
collecting the same, whichever the case may be.
EA-16
Net Worth shall mean the (a) the Total Asset Value, plus (b) the value of all
intangible assets, such as good will, of the Consolidated Kramont Entities
valued at cost as shown on the most recent financial statement of such
Consolidated Kramont Entity, plus (c) the Pro Rata share of the value of all
intangible assets, such as good will, of the Unconsolidated Kramont Entities
valued at cost as shown on the most recent financial statement of such
Unconsolidated Kramont Entity, less (d) the Total Liabilities of the
Consolidated Kramont Entities plus the Pro Rata Share of the Total Liabilities
of the Unconsolidated Kramont Entities, with (b) through (d) determined in
accordance with GAAP, without duplication.
Non-Stabilized Asset shall mean a Borrowing Base Property which has an Occupancy
Ratio of less than seventy percent (70%).
Note. Collectively, the Notes payable to each Lender in the aggregate original
principal amount of the Established Loan Amount (as such amount may be increased
as provided for herein).
Notice of Default as defined in Section 13.1.6.
Notice of Letter of Credit as defined in Section 2.7.1.
Notice of Rate Selection as defined in Section 2.3.3.
Obligations shall mean without limitation, all and each of the following,
whether now existing or hereafter arising:
(a) Any and all direct and indirect liabilities, debts, and
obligations of the Borrower or any Loan Party to the Administrative
Agent or any Lender under or arising out of the Loan Documents, each
of every kind, nature, and description.
(b) Each obligation to repay any loan, advance, indebtedness,
note, obligation, overdraft, or amount now or hereafter owing by the
Borrower or any Loan Party to the Administrative Agent or any Lender
(including all future advances whether or not made pursuant to a
commitment by the Administrative Agent or any Lender) under or
arising out of the Loan Documents, whether or not any of such are
liquidated, unliquidated, primary, secondary, secured, unsecured,
direct, indirect, absolute, contingent, or of any other type,
nature, or description, or by reason of any cause of action which
the Administrative Agent or any Lender may hold against the Borrower
or any Loan Party including, without limitation, any obligation
arising under any interest rate hedging, cap or other protection
arrangement with the Administrative Agent or any Lender.
(c) All notes and other obligations of the Borrower or any
Loan Party now or hereafter assigned to or held by the
Administrative Agent or any Lender under or arising out of the Loan
Documents, each of every kind, nature, and description.
(d) All interest, fees, and charges and other amounts which
may be charged by the Administrative Agent or any Lender to the
Borrower or any Loan Party and/or which may be due from the Borrower
or any Loan Party to the Administrative Agent or any Lender from
time to time under or arising out of the Loan Documents.
(e) All costs and expenses incurred or paid by the
Administrative Agent or any Lender in respect of any agreement
between the Borrower or any Loan Party and the Administrative Agent
or any Lender or instrument furnished by the Borrower or any Loan
Party to the Administrative Agent or any Lender (including, without
limitation, costs of collection, attorneys' reasonable fees, and all
court and litigation costs and
EA-17
expenses) in connection with the Loan.
(f) Any and all covenants of the Borrower or any Loan Party to
or with the Administrative Agent or any Lender and any and all
obligations of the Borrower or any Loan Party to act or to refrain
from acting in accordance with any agreement between the Borrower or
any Loan Party and the Administrative Agent or any Lender or
instrument furnished by the Borrower or any Loan Party to the
Administrative Agent or any Lender in connection with the Loan.
Occupancy Ratio shall mean with respect to any Borrowing Base Property, the
ratio as determined by the Administrative Agent of the rentable square footage
thereof as to which tenants are in physical occupancy and paying rent, to the
total rentable square footage thereof. For purposes of determining the Occupancy
Ratio, the Occupancy Ratio for any Borrowing Base Property as to which an Event
of Loss has occurred shall be equal to the greater of (i) the actual Occupancy
Ratio with respect thereto or (ii) the Occupancy Ratio immediately prior to the
said Event of Loss for a period equal to the lesser of (x) twelve (12) months
from the occurrence of the Event of Loss or (y) the determination that the
subject Borrowing Base Property is not, or ceases to be, a Restoration Property.
Further, for the purposes of this definition, it is acknowledged by the parties
that the total rentable square footage of the Borrowing Base Property owned by
KR Wampanong LLC is 190,357 square feet.
Officer's Certificate shall mean a certificate delivered to the Administrative
Agent by the Borrower, a Borrower Subsidiary, or a Guarantor, as the case may be
respectively, which is signed by an authorized officer thereof (or an authorized
officer of the direct or indirect managing general partner or managing member,
as applicable, of the Borrower, Borrower Subsidiary, or Guarantor, if and as
applicable).
PBGC shall mean the Pension Benefit Guaranty Corporation established pursuant to
Section 4002 of ERISA, or any successor thereto.
Permitted Debt as defined in Section 8.4.
Permitted Distributions shall mean (a) so long as no Default or Event of Default
exists and is continuing, or would be created thereby, any Distributions by the
Borrower and KRT (i) with respect to Fiscal Year 2002, which are necessary to
pay a dividend of $1.30 per share to the holders of the common stock of KRT, and
to pay the required dividend due with respect to any preferred shares of stock
of KRT which are outstanding, (ii) with respect to Fiscal Year 2003, which are
necessary to pay a dividend of $1.30 per share to the holders of the common
stock of KRT and to pay the required dividend due with respect to any preferred
shares of stock of KRT which are outstanding, but not exceeding one-hundred
(100%) percent of FFO for the trailing twelve (12) month period, (iii)
thereafter, in any amount, provided that such Distributions with respect to
Fiscal Year 2004 and thereafter shall not exceed ninety (90%) percent of FFO for
the trailing twelve (12) month period, (iv) concerning the repurchase or
redemption of stock of KRT or partnership interests in the Borrower, or (v)
concerning the issuance of operating partnership units or stock in return for
equity interests in connection with any Permitted Investment (provided, any
Distributions by the Borrower or Kramont shall be permitted as are necessary for
KRT to maintain REIT status, if such Distributions are greater than the amount
set forth in subclauses (a)(i) and (ii), above) or (b) at any time after and
during the continuance of any Default or Event of Default (other than a monetary
Event of Default), such Distributions as are necessary for KRT to maintain REIT
status (measured on a rolling four quarter basis).
Permitted Liens as defined in Section 8.2.
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Permitted Investments shall mean the following: (a) Investments in notes,
mortgages and unimproved real estate, which, in the aggregate, do not exceed
fifteen percent (15%) of Consolidated Total Asset Value; (b) Investments in
construction or Development Assets (total budgeted cost) which, in the
aggregate, do not exceed fifteen percent (15%) of Total Asset Value; (c)
Investment in Land Assets which, in the aggregate, do not exceed five percent
(5%) of Total Asset Value; (d) Investments in Unconsolidated Kramont Entities
which, in the aggregate, do not exceed ten percent (10%) of Total Asset Value;
provided, however, the aggregate of the Permitted Investments under subsections
(a) through (d), above, shall not exceed twenty-five percent (25%) of Total
Asset Value; and (e) Investments in entities for the purpose of making such
entities Borrower Subsidiaries.
Person shall mean any individual, corporation, partnership, joint venture,
estate, trust, unincorporated association or limited liability company, any
federal, state, county or municipal government or any bureau, department or
agency thereof and any fiduciary acting in such capacity on behalf of any of the
foregoing.
Plan shall mean any multiemployer or single-employer plan as defined in Section
4001 of ERISA, which is maintained or contributed to by (or to which there is an
obligation to contribute of) any Loan Party or an ERISA Affiliate, and each such
plan for the five year period immediately following the latest date on which
such Loan Party or an ERISA Affiliate maintained, contributed to or had an
obligation to contribute to such plan.
Preliminary Approval shall mean the following:
(a) Delivery by the Borrower to the Administrative Agent and the Lenders
of the following with respect to any Individual Property proposed to be a
Borrowing Base Property, each such item to the reasonable satisfaction of the
Administrative Agent:
(i) physical description;
(ii) current rent roll and operating statements;
(iii) to the extent then available in Borrower's files, the
following: a survey, environmental reports, copies of existing title
insurance policies or a title commitment, and copies of all title
exceptions, engineering reports and similar information; and
(iv) the Borrower's certification that to its knowledge the proposed
Borrowing Base Property presently satisfies (or is anticipated to satisfy
upon the grant of such Collateral) the Eligibility Criteria set forth in
subsections (a), (c), (d), (e), (f), (g), and (h) of the definition of
Eligibility Criteria.
(b) Administrative Agent and the Required Lenders shall, within ten (10)
Business Days after delivery of all items described in subsection (a), above,
grant or deny the preliminary approval for the proposed replacement Borrowing
Base Property.
Prime Rate. The term "Prime Rate" means the greater of (i) a variable per annum
rate of interest so designated from time to time by Fleet National Bank (or any
successor thereto), as its prime rate, or (ii) the Federal Funds Rate plus 0.50%
per annum. The Prime Rate is a reference rate and does not necessarily represent
the lowest or best rate being charged to any customer.
Pro Rata shall mean a calculation based on the percentage of the Capital Stock
of any Unconsolidated Kramont Entity owned, directly or indirectly, by the
Borrower and/or KRT.
Real Estate Property and Real Estate Properties shall mean (i) the Individual
Properties and (ii) all
EA-19
real estate property owned or ground leased by any Unconsolidated Kramont
Entity, together with all improvements, fixtures, equipment, and personalty
relating to such property.
Recreation Mortgage Notes Receivable shall mean the four (4) so called
Recreation Mortgage Notes totaling $34,000,000.0 as of September 30, 2002, such
Recreation Mortgage Notes secured by first mortgages on the recreation
facilities at three Century Village adult condominium communities in Southeast
Florida,
Register as defined in Section 13.3.3.
REIT means a "real estate investment trust" as such term is defined in Section
856 of the Code.
Release Conditions as defined in Section 3.3.
Release Price shall mean, with respect to any Borrowing Base Property, the
amount, if any, necessary to reduce the aggregate outstanding principal amount
of the Loans plus the L/C Exposure to the Maximum Loan Amount (computed without
regard to the Borrowing Base Property for which the Borrower is seeking
release).
Rent Loss Proceeds. The proceeds received under any rent loss or business
interruption insurance policies.
Repair Work as defined in Section 14.1.
Reportable Event shall mean an event described in Section 4043(b) of ERISA with
respect to a Plan other than those events as to which the 30-day notice period
is waived under subsection .13, .14, .16, .18, .19 or .20 of PBGC Regulation
Section 2615, or as otherwise now or hereafter defined in ERISA.
Required Lenders. As of any date, the Lenders, excluding any delinquent Lenders,
holding at least Sixty-Six and 2/3rds (66 2/3%) percent of the outstanding
principal amount due under the Note on such date; and if no such principal is
outstanding, the Lenders whose aggregate Commitments constitute at least
Sixty-Six and 2/3rds (66 2/3%) percent of the Total Commitment; provided,
however, in any calculation of Required Lenders, the outstanding principal
amount due under a Note held by a Delinquent Lender or the Commitment of a
Delinquent Lender, as applicable, shall not be included in the numerator or
denominator of such calculation.
Restoration Property. Any Collateral Property as to which an Event of Loss has
occurred and as to which the Net Proceeds are being made available in accordance
with the terms and provisions of Article 14 for Repair Work relative to the
subject Collateral Property.
Security Documents as defined in Section 3.2.
Stabilized Asset shall mean a Borrowing Base Property which has an Occupancy
Ratio of equal to or greater than seventy percent (70%). If due to the
occurrence of an Event of Loss as to any Borrowing Base Property which was a
Stabilized Asset prior to such Event of Loss, the Occupancy Ratio with respect
thereto is less than seventy percent (70%), such Borrowing Base Property shall
continue to be deemed to be a Stabilized Asset (notwithstanding that the
Occupancy Ratio with respect thereto is less than seventy percent (70%) as a
result of such Event of Loss) for a period equal to the lesser of (i) twelve
(12) months from the occurrence of the Event of Loss or (ii) the determination
that the subject Borrowing Base Property is not, or ceases to be, a Restoration
Property.
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State shall mean the State or Commonwealth in which the subject of such
reference or any part thereof is located.
Subsidiary shall mean, with respect to any Person, any corporation, association,
limited liability company, partnership or other business entity of which
securities or other ownership interests representing more than 50% of either (x)
the beneficial ownership interest or (y) ordinary voting power are, at the time
as of which any determination is being made, owned or controlled, directly or
indirectly, by such Person.
Tax Expenses shall mean tax expense (if any) attributable to income and
franchise taxes based on or measured by income, whether paid or accrued.
Total Asset Value shall mean the aggregate of:
(a) for all Individual Properties that are owned or ground leased by the
Consolidated Kramont Entities (which are not Individual Properties
acquired within the prior 180 days, Development Assets, Land Assets, or
Development Assets completed within the prior 180 days) the most recent
two (2) quarter's aggregate Adjusted Net Operating Income for all such
Individual Properties, annualized, capitalized at a rate of 9.50%, plus
(b) for other Real Estate Properties that are owned or ground leased by
the Unconsolidated Kramont Entities (which are not Real Estate Properties
acquired within the prior 180 days, Development Assets, Land Assets, or
Development Assets completed within the prior 180 days), the sum of, for
each such Real Estate Property, the Pro Rata share of the Total Asset
Value for each such Real Estate Property at such time, as calculated
pursuant to the foregoing clause (a), plus
(c) for Development Assets and Land Assets that are owned by the
Consolidated Kramont Entities, the undepreciated Book Value at such time
of Development Assets and Land Assets; plus
(d) for Development Assets and Land Assets that are owned by
Unconsolidated Kramont Entities, the Pro Rata share of the undepreciated
Book Value at such time of such Development Asset and such Land Asset;
plus
(e) for all unencumbered cash and cash equivalent investments, accounts
receivable, restricted cash held by a qualified intermediary, prepaid
assets and escrows, and the Recreation Mortgage Notes Receivable, owned by
the Consolidated Kramont Entities, the Book Value of such assets; plus
(f) for all unencumbered cash and cash equivalent investments, accounts
receivable, restricted cash held by a qualified intermediary, and prepaid
assets and escrows owned by Unconsolidated Kramont Entities, the Pro Rata
share of the Book Value at such time of such assets; plus
(g) deposits corresponding to outstanding Letters of Credit..
Real Estate Properties acquired or Development Assets completed during a
quarter will be valued at undepreciated Book Value for a maximum of one hundred
eighty (180) days from acquisition or completion (and until end of the following
quarter) and based on Adjusted Net Operating Income under subsections (a) or (b)
above thereafter.
Total Commitment. The sum of the Commitments of the Lenders, as in effect from
time to time.
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Total Liabilities shall mean for any Person, the total liabilities for such
Person determined in accordance with GAAP.
Treasury Rate The term "Treasury Rate" means, as of the date of any calculation
or determination, the latest published rate for United States Treasury Notes or
Bills (but the rate on Bills issued on a discounted basis shall be converted to
a bond equivalent) as published weekly in the Federal Reserve Statistical
Release H.15(519) of Selected Interest Rates in an amount which approximates (as
determined by Administrative Agent) the amount (i) approximately comparable to
the portion of the Loan to which the Treasury Rate applies for the Interest
Period, or (ii) in the case of a prepayment, the amount prepaid and with a
maturity closest to the original maturity of the installment which is prepaid in
whole or in part.
UCC or the Uniform Commercial Code means the Uniform Commercial Code in effect
in a State.
Unconsolidated Kramont Entity or Unconsolidated Kramont Entities shall mean each
Person, other than ▇▇▇▇▇▇▇▇▇▇, as to which the Borrower and/or KRT own, directly
or indirectly, any Capital Stock, but which is not a Wholly-Owned Subsidiary.
Unfunded Current Liability of any Plan means the amount, if any, by which the
actuarial present value of the accumulated plan benefits under the Plan as of
the close of its most recent plan year exceeds the fair market value of the
assets allocable thereto, each determined in accordance with Statement of
Financial Accounting Standards No. 35, based upon the actuarial assumptions used
by the Plan's actuary in the most recent annual valuation of the Plan.
United States and U.S. shall each mean the United States of America.
Valley Fair Property shall mean and refer to the 112,000 square foot (65,213
square feet included in the Borrowing Base Property) neighborhood shopping
center in Tredyffrin, Pennsylvania.
Variable Rate. The term "Variable Rate" means a per annum rate equal at all
times to the Prime Rate plus the Applicable Margin for Prime Rate Loans, with
changes therein to be effective simultaneously without notice or demand of any
kind with any change in the Prime Rate.
Variable Rate Advance. The term "Variable Rate Advance" means any principal
amount outstanding under this Agreement which pursuant to this Agreement bears
interest at the Variable Rate.
Wholly-Owned Subsidiary shall mean, with respect to any Person, any other Person
as to which one-hundred (100%) percent of the Capital Stock thereof is owned,
directly or indirectly, by such Person.
EA-22
EXHIBIT B-1 TO LOAN AGREEMENT
REQUISITION AND AVAILABILITY CERTIFICATE
TO: Fleet National Bank ("Administrative Agent")
RE: Loan Agreement dated as of December 20, 2002 (the "Loan Agreement")
between Administrative Agent, the lenders described therein and Kramont
Operating Partnership, L.P. ("Borrower")
LOAN REQUEST NO.:________________
AMOUNT OF LOAN ADVANCE REQUESTED:$__________________
DATE:________________, 200__
This Borrower's Certificate and Request for Loan Advance is submitted by
Borrower to Administrative Agent pursuant to the provisions of the Loan
Agreement in order to induce Lenders to make the Loan Advance identified above.
Capitalized terms used herein which are not otherwise specifically defined shall
have the same meaning herein as in the Loan Agreement.
Borrower hereby requests Lenders to make a Loan Advance under the Notes in
the following amount: $_________________.
The Loan Advance is requested for the following purposes:________________
_______________________________________________________________________________
______________________________________________________________________________.
The Loan Advance requested of $______________, when added to prior Loan
Advances under the Notes of $________________, plus the L/C Exposure of
$__________________, will result in aggregate Loans plus L/C Exposure of
$_______________.
The Maximum Loan Amount shall not be exceeded upon the making of the Loan
Advance requested hereunder. Calculations of the Maximum Loan Amount, current
Loan balance, and amount of the Loan available to be advanced and/or L/C's
available to be issued are set forth on the Availability Certificate annexed
hereto.
Borrower hereby certifies, warrants and represents to Administrative Agent
and the Lenders that (except for each condition precedent to Lender's obligation
to make the requested Loan Advance) this request: (i) constitutes an affirmation
by Borrower that, except as otherwise disclosed in writing to the Administrative
Agent, each of the warranties and representations made in the Loan Agreement
remains true and correct as of the date of this request and, unless
Administrative Agent is notified to the contrary prior to the disbursement of
the Loan Advance, will be so on the date of such Loan Advance; and (ii)
constitutes the representation and warranty of Borrower that the information set
forth in this request is true, accurate and complete.
The Borrower hereby further certifies, warrants and represents to
Administrative Agent and the Lenders that: (i) to the best of the Borrower's
knowledge, the information provided on the accompanying financial statements is
true and accurate in all material respects; (ii) the Borrower is in compliance
with the financial covenants contained in the Loan Agreement to the extent set
forth below; (iii) to the best of the Borrower's knowledge, an Event of Default
which
EB-1
is continuing has not occurred under the Loan Agreement or any of the other Loan
Documents.
COVENANT REQUIREMENT ACTUAL
------------------------- ------------------------------ ------------
Interest Expense Coverage Not less than 1.75:1
Leverage Ratio Less than 65%
Fixed Charge Ratio Closing Date through
December 31, 2003, not less
than 1.35:1.
January 1, 2004 through
December 31, 2004, not less
than 1.45:1.
January 1, 2005 through
Maturity Date, not less than
1.50:1.
Borrower's Net Worth Not less than $240,000,000
plus 90% of cumulative net
cash proceeds and value of
assets acquired, as set forth in
the Loan Agreement
Calculations of the Financial Covenants are set forth on the worksheet
annexed hereto.
This request is submitted to Administrative Agent for the purpose of
inducing Lenders to make a Loan Advance and Borrower intends that Administrative
Agent and the Lenders shall rely upon the same being true, accurate and
complete.
If all conditions precedent to Lenders' obligation to make a Loan Advance
are satisfied, please disburse the Loan Advance on ______________, 200__.
WITNESS the execution hereof as an instrument under seal as of the _______
day of _____________, 200__.
KRAMONT OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Kramont Realty Trust,
its general partner
By:
------------------------------------
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AVAILABILITY CERTIFICATE
16. MAXIMUM LOAN AMOUNT
16.1 Established Loan Amount $____________
16.2 Total Commitment $____________
16.3 Availability (calculated below) $____________
lesser of (a), (b) and (c)
$____________
17. LOAN BALANCE
17.1 Outstanding Balance of Loan $____________
plus
17.2 L/C Exposure $____________
(a) plus (b) $____________
18. AMOUNT OF LOAN AVAILABLE TO
BE ADVANCED AND/OR L/C'S
AVAILABLE TO BE ISSUED
1 minus 2 $____________
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AVAILABILITY CALCULATION
18.1 Aggregate Borrowing Base Value* $____________
(calculated below)
18.2 Implied Loan Amount $____________
(calculated below)
lesser of (a) or (b) $____________
* Reduce any single Borrowing Base Property Borrowing Base Value, if
necessary, to 20% of Aggregate Borrowing Base Value
EB-4
BORROWING BASE VALUE CALCULATION
(prepare for each Borrowing Base Property)
(a) If Stabilized Asset
(i) Adjusted Appraised Value $____________
(complete only if Appraisal completed
within prior 6 months)
(ii) Adjusted Capitalized Value** $____________
(calculated below)
(iii) Maximum Property Amount $____________
(complete only if applicable)
lesser of (i), (ii), and (iii) $____________
Multiplied by 65% $____________
** Adjusted Capitalized Value Calculation (For Stabilized Asset)
Adjusted Net Operating Income for most recent
two (2) fiscal quarters, annualized $____________
divided by 9.5% $____________
(b) If Non-Stabilized Asset
(i) Adjusted Appraised Value $____________
(ii) Adjusted Capitalized Value $____________
(Undepreciated Book Value)
(iii) Maximum Property Amount $____________
(complete only if applicable)
lesser of (i), (ii), and (iii) $____________
Multiplied by 65% $____________
EB-5
CALCULATION OF BORROWING BASE VALUE IF EVENT OF LOSS HAS OCCURRED
(i) Adjusted Capitalized Value $____________
(calculated in the manner set forth
above for Stabilized Asset, or
No-Stabilized Asset, as applicable)
(ii) Maximum Property Amount $____________
(complete only if applicable)
lesser of (i) or (ii) $____________
Multiplied by 65% $____________
EB-6
Implied Loan Amount Calculation
Principal amount which generates Implied Debt Service Coverage Ratio of 1.45 to
1.00, calculated in accordance with the worksheet which is to be annexed hereto.
EB-7
EXHIBIT B-2 TO LOAN AGREEMENT
NOTICE OF LETTER OF CREDIT
Date of Request:______________
TO: Fleet National Bank ("Administrative Agent")
RE: Loan Agreement dated as of December 20, 2002 (the "Loan Agreement")
between Administrative Agent, the lenders described therein and Kramont
Operating Partnership, L.P. ("Borrower")
This confirms the following request for the issuance of Letter of Credit as
follows:
AGGREGATE AMOUNT OF REQUESTED LETTERS OF CREDIT: $______________
NUMBER OF LETTERS OF CREDIT TO BE ISSUED: ______________
INDIVIDUAL DOLLAR AMOUNT FOR EACH LETTER OF CREDIT TO BE ISSUED:
1) $________________
2) $________________
3) $________________
4) $________________
PURPOSE OF EACH LETTER OF CREDIT TO BE ISSUED:
1) ________________
2) ________________
3) ________________
4) ________________
PROPOSED DATE OF ISSUANCE OF LETTERS OF CREDIT: ______________
IF OTHER THAN THE BORROWER, THE ACCOUNT PARTY OF EACH LETTER OF CREDIT:
1)______________________________________________________________
2)______________________________________________________________
3)______________________________________________________________
4)______________________________________________________________
EB-8
NAME AND ADDRESS OF BENEFICIARY UNDER LETTERS OF CREDIT:
1)______________________________________________________________
2)______________________________________________________________
3)______________________________________________________________
4)______________________________________________________________
EXPIRATION DATE OF EACH LETTER OF CREDIT:
1)______________________________________________________________
2)______________________________________________________________
3)______________________________________________________________
4)______________________________________________________________
CURRENT OUTSTANDING LETTER OF CREDIT OBLIGATIONS: $_______________
The following are the terms upon which each such Letter of Credit may be
drawn down upon by the beneficiary thereunder: _________________________________
________________________________________________________________________________
________________________________________________________________________________
_______________________________________________________________________________.
The Letters of Credit requested, aggregating $______________, when added
to prior Loan Advances under the Notes of $________________, plus the L/C
Exposure of $__________________, will result in aggregate Loans plus L/C
Exposure of $_________________ .
The Maximum Loan Amount shall not be exceeded upon the issuance of Letters
of Credit requested hereunder. Calculations of the Maximum Loan Amount, current
Loan balance, and amount of the Loan available to be advanced and/or L/C's
available to be issued are set forth on the Availability Certificate annexed
hereto.
This request shall constitute a certification by the Borrower that (i) no
Default or Event of Default has occurred and is continuing or would result from
the issuance of the above Letters of Credit, (ii) no material adverse change in
the financial condition of Borrower has occurred, (iii) the Borrower and all
Loan Parties are, and will continue to be after the requested issuance of the
Letters of Credit, in compliance in all material respects with all of the
covenants set forth in the Loan Agreement, and (iv) each of the representations
and warranties under the Loan Documents (other than those representations and
warranties which speak as of a specific date or as to which the Administrative
Agent has previously been advised in writing by the Borrower are no longer true
and correct) are true, correct and complete in all material respects as of the
date of the issuance of the Letters of Credit, with the same effect as if made
at and as of that time.
EB-9
This Notice is irrevocable and binding on the Borrower.
KRAMONT OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Kramont Realty Trust,
its general partner
By:
------------------------------------
EB-10
EXHIBIT C TO LOAN AGREEMENT
NOTE
____________________ December 20, 2002
1. Promise To Pay.
FOR VALUE RECEIVED, Kramont Operating Partnership, L.P., a Delaware
limited partnership having an address at ▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇, ▇▇▇▇▇▇▇▇
Meeting, Pennsylvania 19462 (hereinafter, the "Borrower") promises to pay to the
order of _______________________ (hereinafter, a "Lender"), the principal sum of
_____________________________($___________) DOLLARS, or so much thereof as may
be advanced or readvanced by or on behalf of Lender, with interest thereon as
provided in the Loan Agreement (as defined herein), or on the amount thereof
from time to time outstanding, to be computed, as provided in the Loan
Agreement, on each advance from the date of its disbursement until such
principal shall be fully paid. Interest and principal shall be payable in
installments as set forth in the Loan Agreement. The total principal sum, or the
amount thereof outstanding, together with any accrued but unpaid interest, shall
be due and payable in full on December 20, 2005 (hereinafter, the "Maturity
Date"), which term is further defined in, and is subject to acceleration, in
accordance with, the Loan Agreement pursuant to which this Note has been issued.
2. Loan Agreement.
This Note is issued pursuant to the terms, provisions and conditions of an
agreement captioned "Loan Agreement" (hereinafter, the "Loan Agreement") dated
as of even date among Borrower, Lender and the other financial institutions
named therein (the Lender and such other institutions, the "Lenders") and Fleet
National Bank as Agent (hereinafter the "Agent") and evidences the Loan and Loan
Advances made by or on behalf of the Lender pursuant thereto. Capitalized terms
used herein which are not otherwise specifically defined shall have the same
meaning herein as in the Loan Agreement, which capitalized terms are hereby
incorporated by reference herein. This Note is one of two or more Notes executed
and delivered by the Borrower to the Lenders in accordance with the terms and
provisions of the Loan Agreement.
3. Acceleration; Event of Default.
At the option of the Agent, subject to the terms of the Loan Agreement,
this Note and the indebtedness evidenced hereby shall become immediately due and
payable without further notice or demand, and notwithstanding any prior waiver
of any breach or default, or other indulgence, upon the occurrence of an Event
of Default. Upon the occurrence and during the continuance of an Event of
Default and subject to the terms of the Loan Agreement, Agent shall have, in
addition to any rights and remedies contained herein, any and all rights and
remedies set forth in the Loan Agreement or any other Loan Document.
4. Certain Waivers, Consents and Agreements.
Each and every party liable hereon or for the indebtedness evidenced
hereby whether as maker, endorser, guarantor, surety or otherwise (except to the
extent provided in such Guarantor's Guaranty) hereby: (a) waives presentment,
demand, protest, suretyship defenses and defenses in the nature thereof; (b)
waives any defenses based upon and specifically assents to
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any and all extensions and postponements of the time for payment, changes in
terms and conditions and all other indulgences and forbearances which may be
granted by the Agent or the holder to any party now or hereafter liable
hereunder or for the indebtedness evidenced hereby; (c) agrees to any
substitution, exchange, release, surrender or other delivery of any security or
collateral now or hereafter held hereunder or in connection with the Loan
Agreement, or any of the other Loan Documents, and to the addition or release of
any other party or person primarily or secondarily liable; (d) agrees that if
any security or collateral given to secure this Note or the indebtedness
evidenced hereby or to secure any of the obligations set forth or referred to in
the Loan Agreement, or any of the other Loan Documents, shall be found to be
unenforceable in full or to any extent, or if Agent or any other party shall
fail to duly perfect or protect such collateral, the same shall not relieve or
release any party liable hereon or thereon nor vitiate any other security or
collateral given for any obligations evidenced hereby or thereby; (e) agrees to
pay all reasonable costs and expenses actually incurred by Agent and Lenders or
any other holder of this Note in connection with the indebtedness evidenced
hereby pursuant to the Loan Agreement, including, without limitation, all
reasonable attorneys' fees and costs, for the implementation of the Loan, the
collection of the indebtedness evidenced hereby and the enforcement of rights
and remedies hereunder or under the other Loan Documents, whether or not suit is
instituted; and (f) consents to all of the terms and conditions contained in
this Note, the Loan Agreement, the Mortgage, the Assignment of Leases and Rents,
and all other instruments now or hereafter executed evidencing or governing all
or any portion of the security or collateral for this Note and for such Loan
Agreement, or any one or more of the other Loan Documents.
5. Delay Not A Bar.
No delay or omission on the part of the Agent or the holder in exercising
any right hereunder or any right under any instrument or agreement now or
hereafter executed in connection herewith, or any agreement or instrument which
is given or may be given to secure the indebtedness evidenced hereby or by the
Loan Agreement, or any other agreement now or hereafter executed in connection
herewith or therewith shall operate as a waiver of any such right or of any
other right of such holder, nor shall any delay, omission or waiver on any one
occasion be deemed to be a bar to or waiver of the same or of any other right on
any future occasion.
6. Partial Invalidity.
The invalidity or unenforceability of any provision hereof, of the Loan
Agreement, of the other Loan Documents, or of any other instrument, agreement or
document now or hereafter executed in connection with the Loan made pursuant
hereto and thereto shall not impair or vitiate any other provision of any of
such instruments, agreements and documents, all of which provisions shall be
enforceable to the fullest extent now or hereafter permitted by law.
7. Compliance With Usury Laws.
All agreements among Borrower, Guarantor, Agent and Lenders are hereby
expressly limited so that in no contingency or event whatsoever, whether by
reason of acceleration of maturity of the indebtedness evidenced hereby or
otherwise, shall the amount paid or agreed to be paid to Agent or Lenders for
the use or the forbearance of the indebtedness evidenced hereby exceed the
maximum permissible under applicable law. As used herein, the term "applicable
law", shall mean the law in effect as of the date hereof, provided, however,
that in the event there is a change in the law which results in a higher
permissible rate of interest, then this Note shall be governed by such new law
as of its effective date. In this regard, it is expressly agreed that it is the
intent of Borrower, Agent and Lenders in the execution, delivery and acceptance
of this Note to contract in strict compliance with the laws of the Commonwealth
of Massachusetts from
EC-2
time to time in effect. If, under or from any circumstances whatsoever,
fulfillment of any provision( hereof or of any of the Loan Documents or the
Security Documents at the time performance of such provision shall be due, shall
involve transcending the limit of validity prescribed by applicable law, then
the obligation to be fulfilled shall automatically be reduced to the limit of
such validity, and if under or from any circumstances whatsoever Agent or
Lenders should ever receive as interest an amount which would exceed the highest
lawful rate, such amount which would be excessive interest shall be applied to
the reduction of the principal balance evidenced hereby and not to the payment
of interest. This provision shall control every other provision of all
agreements among Borrower, the Guarantor, Agent and Lenders.
8. Use of Proceeds.
All proceeds of the Loan shall be used solely for the purposes more
particularly provided for and limited by the Loan Agreement.
9. Security.
This Note is secured by certain collateral as set forth in the Loan
Agreement, and any and all other collateral in which an interest may from time
to time be granted to the Agent, on behalf of the Lenders, as security herefor.
The collateral for this Note shall be held by the Agent, on behalf of the Lender
and the other Lenders.
10. Notices.
Any notices given with respect to this Note shall be given in the manner
provided for in the Loan Agreement.
11. Governing Law and Consent to Jurisdiction.
11.1 Substantial Relationship. It is understood and agreed that all of the
Loan Documents were delivered in the Commonwealth of Massachusetts, which
Commonwealth the parties agree has a substantial relationship to the parties and
to the underlying transactions embodied by the Loan Documents.
11.2 Place of Delivery. Borrower agrees to furnish to Lender at Lender's
office in Boston, Massachusetts all further instruments, certifications and
documents to be furnished hereunder, if any.
11.3 Governing Law. This Note shall in all respects be governed,
construed, applied and enforced in accordance with the internal laws of the
Commonwealth of Massachusetts without regard to principles of conflicts of law.
11.4 Consent to Jurisdiction. Borrower hereby consents to the nonexclusive
personal jurisdiction in any state or Federal court located within the
Commonwealth of Massachusetts.
12. Waiver of Jury Trial.
BORROWER, AND, BY THEIR ACCEPTANCE HEREOF, AGENT AND LENDERS MUTUALLY
HEREBY KNOWINGLY, VOLUNTARILY AND INTENTIONALLY WAIVE THE RIGHT TO A TRIAL BY
JURY IN RESPECT OF ANY LITIGATION BASED HEREON, ARISING OUT OF, UNDER OR IN
CONNECTION WITH THIS NOTE OR ANY OTHER LOAN DOCUMENTS CONTEMPLATED TO BE
EXECUTED IN CONNECTION
EC-3
HEREWITH, OR ANY COURSE OF CONDUCT, COURSE OF DEALINGS, STATEMENTS (WHETHER
VERBAL OR WRITTEN) OR ACTIONS OF ANY PARTY. THIS WAIVER CONSTITUTES A MATERIAL
INDUCEMENT FOR LENDER TO ACCEPT THIS NOTE AND MAKE THE LOAN.
13. No Oral Change.
This Note and the other Loan Documents may only be amended, terminated,
extended or otherwise modified by a writing signed by the party against which
enforcement is sought. In no event shall any oral agreements, promises, actions,
inactions, knowledge, course of conduct, course of dealing, or the like be
effective to amend, terminate, extend or otherwise modify this Note or any of
the other Loan Documents.
14. Rights of the Agent and Holder.
This Note and the rights and remedies provided for herein may be enforced
by Agent, the Lender, or any subsequent holder hereof. Wherever the context
permits each reference to the term "holder" herein shall mean and refer to
Agent, the Lender, or the then subsequent holder of this Note.
15. Right to Pledge.
Lender may at any time pledge all or any portion of its rights under the
Loan Documents including any portion of this Note to any of the twelve (12)
Federal Reserve Banks organized under Section 4 of the Federal Reserve Act, 12
U.S.C. Section 341. No such pledge or enforcement thereof shall release Lender
from its obligations under any of the Loan Documents.
16. Setoff
Borrower hereby grants to Agent and each of the Lenders, a continuing
lien, security interest and right of setoff as security for all Obligations of
Borrower to Agent and the Lenders, whether now existing or hereafter arising,
upon and against all deposits, credits, collateral and property, now or
hereafter in the possession, custody, safekeeping or control of Agent or any
Lender or any entity under the control of Fleet National Bank and its successors
and assigns, or in transit to any of them. If any payment is not made when due
hereunder or under any of the Loan Documents, after giving regard to applicable
grace periods, if any, or if any Event of Default or other event which would
entitle Agent or any of the Lenders to accelerate the Loan occurs, the same or
any part thereof may to the fullest extent not prohibited by applicable law at
any time or from time to time, without regard to the existence, sufficiency or
adequacy of any other collateral, and without notice or compliance with any
other condition precedent now or hereafter imposed by statute, rule of law or
otherwise, all of which are hereby waived, be set off, appropriated and applied
by Agent or a Lender against any Obligation of Borrower irrespective of whether
demand shall have been made and although such Obligations may be unmatured, in
such manner as Agent in its sole and absolute discretion may determine. Within
five (5) Business Days of making any such set off, appropriation or application,
Agent agrees to notify Borrower thereof, provided the failure to give such
notice shall not affect the validity of such set off or appropriation or
application. ANY AND ALL RIGHTS TO REQUIRE AGENT OR LENDERS TO EXERCISE ITS
RIGHTS OR REMEDIES WITH RESPECT TO ANY OTHER COLLATERAL WHICH SECURES THE LOAN,
PRIOR TO EXERCISING ITS RIGHT OF SETOFF WITH RESPECT TO SUCH DEPOSITS, CREDITS
OR OTHER PROPERTY OF THE BORROWER ARE HEREBY KNOWINGLY, VOLUNTARILY AND
IRREVOCABLY WAIVED.
EC-4
17. Limitations on Recourse.
The limitations on recourse set forth in Section 9.2 of the Loan Agreement
are incorporated herein by this reference.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
EC-5
IN WITNESS WHEREOF, Borrower has caused this Note to be duly executed as
of the date set forth above as a sealed instrument.
Witness: BORROWER:
KRAMONT OPERATING PARTNERSHIP, L.P.,
A Delaware limited partnership
By: Kramont Realty Trust,
its sole general partner
By:______________________________
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇., President
EC-6
EXHIBIT D TO LOAN AGREEMENT
AUTHORIZED REPRESENTATIVES
▇▇▇▇▇ ▇. ▇▇▇▇▇▇, ▇▇. - President of Kramont Realty Trust
▇▇▇▇ ▇▇▇▇▇ - Chief Financial Officer of Kramont Realty Trust
▇▇▇▇ ▇▇▇▇▇▇▇ - Chief Accounting Officer of Kramont Realty Trust
ED-1
EXHIBIT E TO LOAN AGREEMENT
REQUIRED PROPERTY, HAZARD AND OTHER INSURANCE
Borrower or the applicable Loan Party shall at all times provide and
maintain the following insurance coverages with respect to the Property and the
Collateral issued by companies qualified to do business in the applicable
jurisdictions where the Collateral Property is located, having a Best's Rating
of not less than A-VIII and otherwise acceptable to Administrative Agent in its
sole reasonable discretion:
(i) physical insurance on an all-risk basis without exception
(including, without limitation, flood required if property is in a
"Special Flood Hazard Area" A or V), vandalism and malicious mischief,
earthquake, collapse, boiler explosion, sprinkler coverage, mold
infestation, cost of demolition, increased costs of construction and the
value of the undamaged portion of the building and soft costs coverage)
covering all the real estate, fixtures and personal property to the extent
of the full insurable value thereof, on a builder's risk non-reporting
form prior to completion and occupancy to Occupy Endorsement, having
replacement cost and agreed amount endorsements (with deductibles not in
excess of it of insurable value);
(ii) rent loss or business interruption insurance in an amount equal
to one year's projected rentals or gross revenues;
(iii) public liability insurance, with underlying and umbrella
coverages totaling not less than $25,000,000.00 per occurrence and
$25,000,000.00 in the aggregate or such other amounts as may be determined
by Administrative Agent from time to time;
(iv) automobile liability insurance (including non-owned automobile)
with a coverage of $1,000,000 per occurrence during construction;
(v) worker's compensation, employer's liability and other insurance
required by law;
(vi) such other insurance coverages in such amounts as
Administrative Agent may request consistent with the customary practices
of prudent developers and owners of similar properties.
An actual insurance policy or certified copy thereof, or a binder, certificate
of insurance, or other evidence of property coverage in the form of ▇▇▇▇▇ 27
(Evidence of Property Coverage), ▇▇▇▇▇ 25 (Certificate of Insurance), or a
30-day binder in form acceptable to Administrative Agent with an unconditional
undertaking to deliver the policy or a certified copy within thirty (30) days,
shall be delivered at closing of the Loan and prior to the first Loan Advance.
Flood insurance shall be provided if the property or the collateral is
located in a flood prone, flood risk or flood hazard area as designated pursuant
to the Federal Flood Disaster Protection Act of 1973, as amended, and the
Regulations thereunder, or if otherwise reasonably required by Administrative
Agent.
Administrative Agent, on behalf of the Lenders, shall be named as first
mortgagee on policies of all-risk-type insurance on the Collateral Property, as
loss payee on the Collateral and its contents, and as first mortgagee on
rent-loss or business interruption coverages related thereto.
EE-1
Except with respect to public liability insurance, as to which
Administrative Agent, on behalf of the Lenders, shall be named as an additional
insured with respect to the Collateral Property or the Collateral, all other
required insurance coverages shall have a so-called "Mortgagee's endorsement" or
"Lenders' loss-payable endorsement" which shall provide in substance as follows:
A. Subject to the terms of this Agreement, loss or damage, if any,
under the policy shall be paid to Administrative Agent and its successors
and assigns, on behalf of the Lenders, in whatever form or capacity its
interest may appear and whether said interest be vested in said
Administrative Agent in its individual or in its disclosed or undisclosed
fiduciary or representative capacity, or otherwise, or vested in a nominee
or trustee of said Administrative Agent.
B. The insurance under the policy, or under any rider or endorsement
attached thereto, as to the interest only of Administrative Agent and its
successors and assigns, on behalf of the Lenders, shall not be invalidated
nor suspended:
(a) by any error, omission or change respecting the ownership,
description, possession or location of the subject of the insurance
or the interests therein or the title thereto; or
(b) by the commencement of foreclosure or similar proceedings
or the giving of notice of sale of any of the property covered by
the policy by virtue of any mortgage, deed of trust, or security
interest; or
(c) by any breach of warranty, act, omission, neglect, or
noncompliance with any provisions of the policy by the named
insured, or any one else, whether before or after a loss, which
under the provisions of the policy of insurance, would invalidate or
suspend the insurance as to the named insured, excluding, however,
any acts or omissions of Administrative Agent while exercising
active control and management of the insured property.
C. Insurer shall provide Administrative Agent and each of the
Lenders with not less than thirty (30) days, prior written notice of
cancellation of the policy (for non-payment or any other reason) or of the
non-renewal thereof.
D. The insurer reserves the right to cancel the policy at any time,
but only as provided by its terms. However, in such case this policy shall
continue in force for the benefit of Administrative Agent, on behalf of
the Lenders, for thirty (30) days after written notice of such
cancellation is received by Administrative Agent and shall then cease.
E. Should legal title to and beneficial ownership of any of the
property covered under the policy become vested in Administrative Agent or
its agents, successors or assigns, insurance under the policy shall
continue for the term thereof for the benefit of Administrative Agent.
F. All notices herein provided to be given by the insurer to
Administrative Agent in connection with this policy and Administrative
Agent's loss payable endorsement shall be mailed to or delivered to
Administrative Agent by certified or registered mail, return receipt
requested, as follows:
EE-2
Fleet National ▇▇▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇ ▇▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇▇-▇▇▇▇
Mail Code CT4M10J
Attention: Central Insurance Unit
EE-3
EXHIBIT F TO LOAN AGREEMENT
OWNERSHIP INTERESTS AND TAXPAYER IDENTIFICATION NUMBERS
EF-1
EXHIBIT G TO LOAN AGREEMENT
COMPLIANCE CERTIFICATE
TO: The Administrative Agent and Lenders party to the Loan Agreement Described
Below
This Compliance Certificate is furnished pursuant to that certain Loan
Agreement dated as of December 20, 2002 (the "Loan Agreement"), among Kramont
Operating Partnership, L.P. ("Borrower"), Fleet National Bank, as Administrative
Agent and the Lenders identified therein. Unless otherwise defined herein,
capitalized terms used in this Compliance Certificate have the meanings ascribed
thereto in the Loan Agreement.
THE UNDERSIGNED HEREBY CERTIFIES THAT:
1. I am the duly elected/authorized ______________________ of Kramont
Realty Trust, general partner of the Borrower.
2. I have reviewed the terms of the Loan Agreement and I have made, or
have caused to be made under my supervision, a review of the transactions and
conditions of the Borrower during the accounting period covered by the attached
financial statements.
3. The examinations described in paragraph 2 did not disclose, and I have
no knowledge of, the existence of any condition or event which constitutes an
Event of Default or an event which, with notice or the passage of time or both,
would constitute an Event of Default during or at the end of the accounting
period covered by the attached financial statements or as of the date of this
Certificate, except as set forth below.
4. Schedule 1 attached hereto sets forth financial data and computations
for the period ending __________ evidencing the Borrower's compliance with
certain covenants of the Loan Agreement, except as set forth below, all of which
data and computations are true, complete and correct to my knowledge.
Described below are the exceptions, if any, to paragraphs 3 and 4, listing
the nature of the condition or event, the period during which it has existed and
the action which the Borrower has taken, is taking, or proposes to take with
respect to each such condition or event:
________________________________________________________________________________
________________________________________________________________________________
EG-1
IN WITNESS WHEREOF, the undersigned has executed this Certificate this ___
day of __________, 200___.
KRAMONT OPERATING PARTNERSHIP, L.P.,
a Delaware limited partnership
By: Kramont Realty Trust,
its general partner
By:
------------------------------------
EG-2
SCHEDULE 1 TO COMPLIANCE CERTIFICATE
COVENANT REQUIREMENT ACTUAL
------------------------- ----------------------------- ----------------
Interest Expense Coverage Not less than 1.75:1
Leverage Ratio Less than 65%
Fixed Charge Ratio Closing Date through
December 31, 2003, not less than 1.35:1.
January 1, 2004 through
December 31, 2004, not less
than 1.45:1.
January 1, 2005 through
Maturity Date, not less than
1.50:1.
Borrower's Net Worth Not less than $240,000,000
plus 90% of cumulative net
cash proceeds and value of
assets acquired, as set forth in
the Loan Agreement
EG-3
EXHIBIT H TO LOAN AGREEMENT
FORM OF ASSIGNMENT AND ACCEPTANCE
Dated: as of _______________
Reference is made to the Loan Agreement, dated as of December 20, 2002 (as
amended and in effect from time to time, the "Loan Agreement"), among Kramont
Operating Partnership, L.P., a Delaware limited partnership (the "Borrower"),
Fleet National Bank (the "Administrative Agent") and the Lenders named therein.
Capitalized terms used herein and not otherwise defined shall have the meanings
assigned to such terms in the Loan Agreement.
________________ (the "Assignor") and _____________ (the "Assignee") agree
as follows:
5. The Assignor hereby sells and assigns to the Assignee, and the Assignee
hereby purchases and assumes from the Assignor, a __________ (____%) interest in
and to all of the Assignor's rights and obligations under the Loan Documents as
of the Effective Date (as hereinafter defined). The amount of the Assignor's
Commitment being purchased by and assigned to the Assignee as of the Effective
Date is $____________
6. The Assignor (i) represents that as of the date hereof, its Commitment
Percentage (without giving effect to assignments thereof which have not yet
become effective) is ______ and the outstanding balance of the Loan owing to the
Assignor under the Note held by the Assignor (unreduced by any assignments
thereof which have not yet become effective) is $__________; (ii) makes no
representation or warranty and assumes no responsibility with respect to any
statements, warranties or representations made in or in connection with the Loan
Documents or the execution, legality, validity, enforceability, genuineness,
sufficiency or value of the Loan Documents or any other instrument or document
furnished pursuant thereto, other than that the Assignor is the legal and
beneficial owner of the interest being assigned by it hereunder, that such
interest is free and clear of any adverse claim, that it is legally authorized
to enter into this Assignment and Acceptance, and it has no knowledge of the
occurrence of an Event of Default under the Loan Agreement; (iii) makes no
representation or warranty and assumes no responsibility with respect to the
financial condition of the Borrower, Guarantor, or any other person which may be
primarily or secondarily liable in respect of any of the Obligations or any of
their obligations, or the performance or observance by the Borrower, Guarantor,
or any other person primarily or secondarily liable in respect of any of the
obligations under any of the Loan Documents or any other instrument or document
delivered or executed pursuant thereto; and (iv) requests that the
Administrative Agent reflect on the Register maintained by the Administrative
Agent the assignment to the Assignee of that portion of the Assignor `s
Commitment as set forth herein.
7. The Assignee (i) represents and warrants that it is legally authorized
to enter into this Assignment and Acceptance; (ii) confirms that it has received
a copy of the Loan Documents, together with copies of the most recent financial
statements of the Borrower and the Guarantor delivered pursuant to the Loan
Agreement and such other documents and information as the
EH-1
Assignee has deemed appropriate to make its own credit analysis and decision to
enter into this Assignment and Acceptance; (iii) agrees that it will,
independently and without reliance upon the Assignor or any 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 Loan Documents; (iv) confirms that it is an Eligible Assignee; (v) appoints
and authorizes the Administrative Agent to take such action as Administrative
Agent on its behalf and to exercise such powers as are expressly delegated to or
conferred upon the Administrative Agent as Administrative Agent by the terms of
the Loan Documents together with such other powers as are reasonably incidental
thereto; (vi) agrees that it will perform all the obligations which by the terms
of the Loan Documents are required to be performed by the Assignee as a Lender
in accordance with the terms of the Loan Documents; and (vii) specifies as to
its address for notices the office set forth beneath its name on the signature
page hereof.
8. The effective date for this Assignment and Acceptance shall be
______________ , ______(the "Effective Date"). Following the execution of this
Assignment and Acceptance, it will be delivered to the Administrative Agent for
acceptance and recording in the Register by the Administrative Agent.
9. Upon such acceptance and recording, from and after the Effective Date,
(i) the Assignee shall be a party to the Loan Agreement and, to the extent
provided in this Assignment and Acceptance, have the rights and obligations of a
Lender thereunder, and (ii) the Assignor shall, with respect to that portion of
its interest under the Loan Documents assigned hereunder relinquish its future
rights and be released from its future obligations under the Loan Documents but
shall remain liable for all obligations which arose prior to such assignment.
10. Upon such acceptance and recording, from and after the Effective Date,
the Administrative Agent shall make all payments in respect of the rights and
obligations 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 for periods prior to the Effective Date by
the Administrative Agent or with respect to the making of this assignment
directly between themselves.
11. THIS ASSIGNMENT AND ACCEPTANCE IS INTENDED TO TAKE EFFECT AS A SEALED
INSTRUMENT TO BE GOVERNED BY, AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE
COMMONWEALTH OF MASSACHUSETTS.
EH-2
IN WITNESS WHEREOF, intending to be legally bound, each of the undersigned
has caused this Assignment and Acceptance to be executed on its behalf by its
officer thereunto duly authorized, as of the date first above written.
______________
"Assignor"
By:___________________________
Title:________________________
______________
"Assignee"
By:___________________________
Title:________________________
Notice Address: ______________
______________
______________
Telephone No.: _____________
Telecopier No.: _____________
EH-3
EXHIBIT I TO LOAN AGREEMENT
LENDERS' COMMITMENT
Lender Commitment Amount Commitment Percentage
------ ----------------- ---------------------
Fleet National Bank $52,500,000.00 52.5%
Wilmington Trust of $15,000,000.00 15.00%
Pennsylvania
Wachovia Bank, National $10,000,000.00 10.00%
Association
Compass Bank $15,000,000.00 15.00%
Firstrust Bank $ 7,500,000.00 7.50%
EI-1
EXHIBIT J
BORROWING BASE PROPERTIES
Borrowing Base Property Adjusted Appraised Value Maximum Property Amount
as of Closing
--------------------------- ------------------------ ------------------------
Park Center, Columbia, $7,150,000
South Carolina; 190,705 sf
▇▇▇▇ ▇▇▇▇▇▇-▇▇▇▇▇ ▇▇▇▇, ▇▇,▇▇▇,▇▇▇
▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
36,000 ▇▇
▇▇▇▇▇▇ Square, Northampton, $7,150,000
Pennsylvania; 75,005 sf
Century Plaza, Deerfield $12,000,000 $13,200,000.00
Beach, Florida; 90,669 ▇▇
▇▇▇▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇,▇▇▇,▇▇▇
▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇▇▇; 143,729
sf
Wampanoag Plaza, East $9,500,000
Providence, Rhode Island;
190,357 sf
Barn Plaza, Doylestown, $5,950,000
Pennsylvania; 48,840 sf
The Mall at Cross County, $7,900,000 $ 8,690,000.00
Yonkers, New York; 46,200
▇▇
▇▇▇▇▇▇▇▇ Center, $6,900,000
Chambersburg,
Pennsylvania; 174,892 sf
Magnolia Plaza, Morganton, $5,700,000
North Carolina; 104,539 sf
Tower Plaza, Carrollton, $4,400,000
Georgia; 87,990 sf
Valley Fair, Tredyffrin, $6,650,000
Pennsylvania; 65,213 sf
EJ-1
▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇, ▇▇,▇▇▇,▇▇▇
▇▇▇▇▇▇▇▇▇▇▇, ▇▇▇▇▇ ▇▇▇▇▇▇▇▇;
190,687 sf
Northpark Center, Macon, $12,500,000
Georgia; 195,355 sf
Killingly Plaza, Killingly, $8,350,000
Connecticut; 75,376 sf
Harrodsburg, Harrodsburg, $3,800,000
Kentucky; 60,048 sf
EJ-2
SCHEDULE 6.14.2(i)
Schedule of Borrowing Base Property Owners with Leasehold Estates
1 KR Barn, L.P. - Barn Plaza
2. Lilac DE LLC - Mall at Cross County (leasehold estate in Block 5175, Lot 1
only)
3. KR Development LP - Valley Fair
Sch-1
SCHEDULE 6.14.4(ii)
To the Borrower's knowledge, none of the Borrowing Base Property Owners is in
default in the performance of any material obligation under any Major Lease,
except as alleged in the estoppel certificates delivered to Lenders as of the
date of the Loan Agreement for the following tenants under Major Leases:
TENANT UNDER A MAJOR LEASE: BORROWING BASE PROPERTY:
--------------------------- ------------------------
▇▇▇▇▇ Mart, Inc. Park Centre ▇▇▇▇▇ Mart
KMart Corporation Bainbridge Town Center
Family Dollar Stores of Georgia, Inc. Tower Plaza
Sch-2
SCHEDULE 6.14.4(iii)
Sch-3
SCHEDULE 6.14.4(iv)
Tenants under a Major Lease against whom action, voluntary or involuntary, is
pending under bankruptcy or insolvency laws:
TENANT UNDER A MAJOR LEASE: BORROWING BASE PROPERTY:
--------------------------- ------------------------
KMart Corporation Magnolia
KMart Corporation NorthPark Center
KMart Corporation Bainbridge Town Center
Sch-4
SCHEDULE 6.14.5
Schedule of Ground Lessees
1. KR Barn, L.P. - Affiliate
2. Lilac DE LLC - Affiliate
3. KR Development LP - Affiliate
751410.3
Sch-5