<PAGE>
EXHIBIT 10.34
EXECUTION COPY
================================================================================
$10,000,257
FACILITY AND GUARANTY AGREEMENT
AMONG
COLONIAL REALTY LIMITED PARTNERSHIP,
COLONIAL PROPERTIES TRUST,
BANK ONE, NA,
AS AGENT
AND
THE FINANCIAL INSTITUTIONS SIGNATORY HERETO,
AS LENDERS
DATED AS OF
DECEMBER 17, 1999
================================================================================
ARRANGED BY
BANC ONE CAPITAL MARKETS, INC.
<PAGE>
TABLE OF CONTENTS
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ARTICLE I
DEFINITIONS.......................................................................................................
1
ARTICLE II
AMOUNTS AND TERMS OF THE
LOANS....................................................................................
8
2.01
The
Loans.....................................................................................
8
2.02
Notes.........................................................................................
9
2.03
Disbursement of
Funds.........................................................................
9
2.04
Distribution of
Payments......................................................................
9
2.05
Funding
Indemnity.............................................................................
9
ARTICLE III
CONDITIONS
PRECEDENT..............................................................................................
11
3.01
Conditions to Obligations to Make
Loans.......................................................
11
ARTICLE IV
REPRESENTATIONS AND
WARRANTIES....................................................................................
13
4.01
Representations and
Warranties................................................................
13
ARTICLE V
COVENANTS.........................................................................................................
16
5.01
Affirmative
Covenants.........................................................................
16
5.02
Negative
Covenants............................................................................
20
ARTICLE VI
PROGRAM EVENTS OF DEFAULT;
ACCELERATION...........................................................................
23
6.01
Program Events of
Default.....................................................................
23
6.02
Acceleration..................................................................................
24
ARTICLE VII
GUARANTY..........................................................................................................
25
7.01
Guaranty of
Payment...........................................................................
25
7.02
Acceptance of Guaranty; No
Setoffs............................................................
25
7.03
Nature of Guaranty; Continuing, Absolute and
Unconditional....................................
25
7.04
Dealings With
Borrowers.......................................................................
26
7.05
Subrogation...................................................................................
26
7.06
Rights To Payments,
Etc.......................................................................
26
7.07
Miscellaneous.................................................................................
26
ARTICLE VIII
THE
AGENT.........................................................................................................
27
8.01
Appointment; Nature of
Relationship...........................................................
27
8.02
Powers........................................................................................
27
8.03
General
Immunity..............................................................................
27
8.04
No Responsibility for Loans, Recitals,
etc....................................................
27
8.05
Action on Instructions of
Lenders.............................................................
28
8.06
Employment of Agents and
Counsel..............................................................
28
8.07
Reliance on Documents;
Counsel................................................................
28
8.08
Agent's Reimbursement and
Indemnification.....................................................
28
8.09
Notice of
Default.............................................................................
29
8.10
Rights as a
Lender............................................................................
29
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ii
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8.11
Lender Credit
Decision........................................................................
29
8.12
Successor
Agent...............................................................................
29
8.13
Notes.........................................................................................
29
8.14
Agent's
Fee...................................................................................
30
8.15
Delegation to
Affiliates......................................................................
30
ARTICLE IX
RATABLE
PAYMENTS..................................................................................................
30
9.01
Ratable
Payments..............................................................................
30
ARTICLE X
BENEFIT OF AGREEMENT; ASSIGNMENTS;
PARTICIPATIONS.................................................................
30
10.01
Successors and
Assigns........................................................................
30
10.02
Participations................................................................................
30
10.03
Assignments...................................................................................
31
10.04
Dissemination of
Information..................................................................
31
10.05
Tax
Treatment.................................................................................
32
ARTICLE XI
NOTICES...........................................................................................................
32
11.01
Giving
Notice.................................................................................
32
11.02
Change of
Address.............................................................................
32
ARTICLE XII
MISCELLANEOUS.....................................................................................................
32
12.01
Amendments....................................................................................
32
12.02
Consent to
Novation...........................................................................
33
12.03
Preservation of
Rights........................................................................
33
12.04
Survival of
Representations...................................................................
33
12.05
Governmental
Regulation.......................................................................
33
12.06
Taxes.........................................................................................
33
12.07
Headings......................................................................................
33
12.08
Entire
Agreement..............................................................................
33
12.09
Several Obligations; Benefits of this
Agreement...............................................
33
12.10
Expenses;
Indemnification.....................................................................
34
12.11
Numbers of
Documents..........................................................................
35
12.12
Severability of
Provisions....................................................................
35
12.13
Nonliability of
Lenders.......................................................................
35
12.14
CHOICE OF
LAW.................................................................................
35
12.15
CONSENT TO
JURISDICTION.......................................................................
35
12.16
WAIVER OF JURY
TRIAL..........................................................................
35
12.17
Disclosure....................................................................................
36
12.18
Withholding Tax
Exemption.....................................................................
36
12.19
Execution in
Counterparts.....................................................................
36
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iii
<PAGE>
EXHIBITS
Exhibit A - Form of
Promissory Note
Exhibit B - Form of Letter
of Direction
Exhibit C - Form of Joinder
Agreement
Exhibit D - Form of
Compliance Certificate
Exhibit E - Form of Novation
Agreement
SCHEDULES
Schedule I
Commitments
Schedule 1.01 Interest Payment
Dates
Schedule 2.05(A) Fixed Reference Rates
Schedule 2.05(B) Zero Coupon Methodology
Schedule 4.01(j) Environmental Disclosures
iv
<PAGE>
FACILITY AND GUARANTY AGREEMENT
THIS FACILITY AND GUARANTY AGREEMENT, dated as of December 17,
1999, is
by and among COLONIAL REALTY LIMITED
PARTNERSHIP, a Delaware limited partnership
(the "Company"), COLONIAL PROPERTIES TRUST,
an Alabama real estate investment
trust (the "REIT"), the financial
institutions named herein (the "Lenders") and
BANK ONE, NA, a national banking
association with its principal office in
Chicago, Illinois, individually and as
Agent for the Lenders hereunder.
R E C I T A L S:
A. The
Company has requested the Lenders to make advances to
certain management employees of the Company
and trustees of the REIT in the
aggregate principal amount of up to
$10,000,257, the proceeds of which will be
used by such employees and trustees to
purchase Class A Units pursuant to an
executive unit purchase program adopted by
the Board of Trustees of the REIT as
the general partner of the Company.
B. By
virtue of the Eligible Persons' services to the Company and
the REIT, the Company and the REIT have
derived and will continue to derive
substantial benefits. The Company and the
REIT believe that the ownership of the
Class A Units by the Eligible Persons which
will be facilitated by the Loans
will provide incentive to the Eligible
Persons in performing their jobs so as to
more closely align the interests of the
Eligible Persons with those of the REIT
and the shareholders of the REIT, and thus
confer significant benefits upon the
Company and the REIT.
C. It
is a condition precedent to the obligation of the Lenders
to make Loans that the Company and the REIT
shall have executed and delivered
this Agreement.
D. The
Company and the REIT desire to execute this Agreement to
satisfy the condition described in the
preceding paragraph and to induce the
Lenders to make the Loans contemplated
hereby, and the Lenders desire to make
the Loans only on the terms and subject to
the conditions set forth herein and
in the other Loan Documents.
NOW, THEREFORE, in consideration of the mutual covenants and
undertakings herein contained, and for
other good and valuable consideration,
the receipt and sufficiency of which are
hereby acknowledged, the parties hereto
hereby agree as follows:
ARTICLE I
DEFINITIONS
As used in this Agreement, the following terms shall have the
following
meanings:
"Affiliate" means any Person which, directly or indirectly,
controls,
or is controlled by, or is under common
control with, another Person. For
purposes of this definition, "control"
(including, with correlative meanings,
the terms "controlled by" and "under common
control with"), as used with respect
to any Person means the possession,
directly or indirectly, of the power to
direct or cause the direction of the
management and policies of such Person
whether through the ownership of voting
securities or by contract or otherwise;
provided, however, that neither any member
of the Lowder family, any member of
the Board of Trustees of the REIT or any
executive officer of the Company or the
REIT nor Colonial Properties Services, Inc.
shall be deemed an Affiliate of the
Company or the REIT.
"Advance" means, with respect to any Lender, such Lender's
Pro-rata
portion of any Loan.
1
<PAGE>
"Agent" means Bank One in its capacity as the agent for the
Lenders
pursuant to Article VIII hereof, and not in
its individual capacity as a Lender,
and any successor Agent appointed pursuant
to Article VIII hereof.
"Aggregate Commitment" means the aggregate of the Commitments of
all
the Lenders.
"Agreement" means this Facility and Guaranty Agreement as from time
to
time amended, supplemented, restated or
otherwise modified and in effect.
"Applicable Environmental Law" means any statutory law or case
law
pertaining to health or the environment, or
petroleum products, or oil, or
hazardous substances, including without
limitation the Comprehensive
Environmental Response, Compensation and
Liability Act of 1980, as amended by
the Superfund Amendments and
Reauthorization Act of 1986, as codified at 42
U.S.C. Section 9601 et. seq.; the Resource
Conservation and Recovery Act of
1976, as amended, as codified at 42 U.S.C.
Section 6901 et. seq.; and any state
or local law, regulation or ordinance
pertaining to such matters.
"Arranger" means Banc One Capital Markets, Inc. and its
successors.
"Bank One" means Bank One, NA, a national banking association
formerly
known as The First National Bank of Chicago
and having its principal place of
business in Chicago, Illinois, in its
individual capacity, and its successors.
"Borrower Account" has the meaning set forth in Section 4 of the
Note.
"Borrower Event of Repayment" has the meaning set forth in Section
6 of
the Note.
"Borrowers" means Eligible Persons who request and obtain a
Loan
hereunder.
"Business Day" means a day (other than a Saturday or Sunday) on
which
banks generally are open in Chicago and New
York City for the conduct of
substantially all of their commercial
lending activities and on which dealings
in United States Dollars are carried on in
the London interbank market.
"Capitalization Rate" shall mean 9.50% for multifamily
Properties,
10.00% for strip shopping centers, 9.50%
for Brookwood Mall, 9.50% for
Briarcliffe Mall, 8.00% for Macon Mall,
9.00% for Village Mall, 8.75% for River
Oaks Mall, and 10.00% for office complexes,
as such rates may be adjusted from
time to time pursuant to the Existing
Credit Agreement.
"Change of Control" means either (a) the REIT shall cease to be
the
sole general partner of the Company or (b)
a majority of the members of the
Board of Trustees of the REIT shall cease
to be Continuing Members. For this
purpose, "Continuing Member" means a member
of the Board of Trustees of the REIT
who either (1) was a member of the REIT's
Board of Trustees on the Closing Date
and has been such continuously thereafter
or (2) became a member of such Board
of Trustees after the Closing Date and
whose election or nomination for election
was approved by a vote of at least
two-thirds of the Continuing Members then
members of the REIT's Board of
Trustees.
"Class A Units" has the meaning ascribed to it in the Company's
Partnership Agreement.
"Closing Date" means the date on which the Loans are made by
the
Lenders hereunder, which, subject to the
conditions set forth in Article III,
shall be January 25, 2000.
"Commitment" means, for each Lender, the commitment of such Lender
to
make Loans on the Closing Date pursuant
hereto not in the aggregate exceeding
the amount set forth opposite such Lender's
name on Schedule I hereto.
"Common Shares" means the REIT's Common Shares of Beneficial
Interest,
$.01 par value per share.
"Company" has the meaning set forth in the introduction hereto.
2
<PAGE>
"Corporate Recurring Income" means recurring income received by one
or
more Subsidiaries of the Company or the
REIT for sales commissions, leasing
fees, and management fees relating to any
property not owned by the Company or
the REIT.
"Debt" shall mean the total indebtedness of the Company and the
REIT,
determined in accordance with GAAP.
"Dollars" and the symbol $ each means lawful currency of the
United
States of America.
"EBITDA" shall mean net operating income of the Company and the
REIT
for the immediately preceding fiscal
quarter on an annualized basis (or, in the
case of enclosed mall retail properties,
the most immediately preceding four (4)
fiscal quarters) before extraordinary items
(including gains or losses from debt
restructuring and sales of properties),
equity in earnings of Unconsolidated
Subsidiaries and minority interest in
earnings, plus (without redundancy) the
Company's and the REIT's pro-rata share of
net operating income from
Unconsolidated Subsidiaries. For purposes
hereof, operating expenses shall
exclude Interest Expense, depreciation,
amortization or income tax expense, but
shall include (i) accruals of those
expenses (including, but not limited to,
insurance and property taxes) to the extent
such expenses are not paid on a
monthly or quarterly basis, (ii) an imputed
management fee expense for all
Properties equal to three percent (3%) of
Effective Gross Income, and (iii) an
imputed reserve of $200 per unit per annum
for multifamily Properties and of
20(cent) per square foot per annum for
retail and office Properties.
"Early Payment Fee" has the meaning set forth in Section 7 of the
Note.
"Effective Gross Income" shall mean all collected rental income
from
all Properties, plus other reoccurring
Property income.
"Eligible Persons" means any management employee of the Company
or
trustee of the REIT qualified to acquire
Class A Units under the Program.
"Employee Plan" means any plan subject to Title IV of ERISA and
maintained in whole or in part for
employees of the Company and the REIT.
"ERISA" means the Employee Retirement Income Security Act of
1974,
together with all amendments from time to
time thereto, including any rules or
regulations promulgated thereunder.
"Existing Credit Agreement" means that certain Credit Agreement,
dated
as of July 10, 1997, among the Company, the
REIT, Colonial Properties Holding
Company, Inc., the lenders identified
therein and Southtrust Bank, National
Association, as amended or restated and in
effect from time to time.
"Final Payment Date" means January 25, 2005.
"Fixed Charges" shall mean the sum of the following amounts for
the
immediately preceding fiscal quarter on an
annualized basis: (i) Interest
Expense, (ii) debt amortization (including
accruals of debt amortization to the
extent not paid on a monthly or quarterly
basis and the Company's and the REIT's
pro-rata share of debt amortization from
Unconsolidated Subsidiaries) and (iii)
capital expenditures in an amount equal to
five percent (5%) of Funds From
Operations, plus the Company's and the
REIT's amortized leasing commissions and
tenant improvements and the Company's and
the REIT's pro-rata share of amortized
leasing commissions and tenant improvements
from Unconsolidated Subsidiaries.
"Funds From Operations" shall mean EBITDA less Interest Expense
and
amortization of debt financing costs.
"GAAP" means, as in effect from time to time, generally
accepted
accounting principles consistently applied
with respect to a Person conducting a
business the same as or similar to that of
the Company and the REIT.
3
<PAGE>
"GAV" shall mean the sum of (without redundancy) (i) EBITDA from
all
Properties which have not been acquired
within the applicable reporting period,
capitalized at the appropriate
Capitalization Rate, (ii) pro rata share of
EBITDA from Joint Ventures and
Unconsolidated Subsidiaries which have not been
acquired within the applicable reporting
period, capitalized at the appropriate
Capitalization Rate, (iii) Corporate
Recurring Income less corporate general and
administrative expenses, net of the imputed
management fee included in the
definition of EBITDA, all capitalized at
eighteen percent (18%), (iv) Gross Book
Value of Properties acquired during the
applicable reporting period, (v) pro
rata share of Gross Book Value of
Properties acquired by Joint Ventures and
Unconsolidated Subsidiaries during the
applicable reporting period and (vi)
recorded value of land and remaining
tangible assets, as determined in
accordance with GAAP.
"Gross Book Value" means the value of an asset as recorded in the
books
of the Company and the REIT, as determined
in accordance with GAAP, before
depreciation.
"Guaranteed Debt" has the meaning provided in Section 7.01
hereof.
"Guarantors" means the Company and the Other Guarantors and
"Guarantor"
means each of such Persons.
"Guaranty" means the provisions of Article VII hereof and the
rights
and obligations of the Company and the
Other Guarantors thereunder.
"Interest Expense" shall mean, for the immediately preceding
fiscal
quarter on an annualized basis, all
interest expense of the Company and the
REIT, plus (without redundancy) (i) the
pro-rata share of interest expense in
Unconsolidated Subsidiaries, (ii)
capitalized interest, and (iii) all accrued,
or paid interest incurred on any obligation
for which the Company and the REIT
are wholly or partially liable under
repayment, interest carry, or performance
guarantees, or other relevant
liabilities.
"Interest Payment Date" means each of the interest payment dates
set
forth on Schedule 1.01 attached hereto,
with the first such payment date being
February 14, 2000.
"Internal Revenue Code" means the Internal Revenue Code of
1986,
together with all amendments from time to
time thereto, including any rules or
regulations promulgated thereunder.
"Investments" means any investment in any Person, whether by means
of
purchase or acquisition of obligations or
securities of such Person, capital
contribution to such Person, loan or
advance to such Person or making of a time
deposit with such Person.
"Joint Venture(s)" means any investment by the Company or the REIT
in a
corporation, limited liability company,
limited liability partnership, tenancy
in common, and other similar entities.
"Lenders" means the lending institutions listed on the signature
pages
to this Agreement and their respective
successors and assigns.
"Letter of Direction" means a letter of direction in the form
of
Exhibit B hereto executed by each Borrower
and acknowledged by the Company and
the REIT.
"Lien" means any voluntary or involuntary mortgage, security deed,
deed
of trust, lien, pledge, assignment, charge,
security interest, title retention
agreement, financing lease, levy,
execution, seizure, judgment, attachment,
garnishment, charge or other encumbrance of
any kind. Notwithstanding the
foregoing, a notice of commencement filed
with respect to any Property located
in the State of Florida shall not
constitute a "Lien" hereunder provided that
(i) the cost of the work described in such
notice of commencement does not
exceed five percent (5%) of Property GAV,
and (ii) no other Liens relating to
the work described in such notice of
commencement are filed with respect to the
Property.
"Loan" means the sum of the amounts advanced to a Borrower by
the
Lenders on the Closing Date pursuant to
Section 2.01 and "Loans" means all such
Loans collectively.
4
<PAGE>
"Loan Documents" means this Agreement, each Note, each Letter
of
Direction, and any and all other documents,
joinder agreements or other
agreements contemplated hereby or thereby
and executed by the Company, any Other
Guarantor or any Borrower in favor of the
Agent or any Lender in connection with
this Agreement, as the same may be amended,
supplemented, restated or otherwise
modified from time to time and in
effect.
"Margin Stock" has the meaning provided such term by Regulation
U.
"Maturity Date" means, with respect to a Note, the earliest to
occur of
(a) the Final Payment Date, (b) the
occurrence of a Change of Control and (c)
the acceleration of such Note pursuant to
Section 6 thereof.
"Moody's" means Moody's Investors Service and its successors.
"Multiemployer Plan" has the meaning set forth in Section
4001(a)(3) of
ERISA.
"Non-Stabilized Property" means any Property which is not a
Stabilized
Property.
"Note" means a master promissory note in the form of Exhibit A
hereto
executed by a Borrower, and "Notes" means,
collectively, all such promissory
notes, as the same may be amended,
supplemented, restated or otherwise modified
from time to time and in effect.
"Notice of Assignment" has the meaning set forth in Section
10.03(b).
"Obligations" means all unpaid principal of and accrued and
unpaid
interest on the Notes, all accrued and
unpaid fees and all expenses,
reimbursements, indemnities and other
obligations of the Guarantors or any
Borrower to the Lenders or any Lender, the
Agent or any indemnified party
hereunder or under any other Loan Document,
arising under any of the Loan
Documents.
"Organization Documents" means (a) in the case of the REIT, its
declaration of trust and bylaws and (b) in
the case of the Company, its
partnership agreement and certificate of
limited partnership, together, in each
case, with all amendments thereto.
"Other Guarantors" means the REIT and the Subsidiary
Guarantors.
"Participants" has the meaning set forth in Section 10.02(a).
"Partnership Agreement" means that certain Third Amended and
Restated
Agreement of Limited Partnership of the
Company dated as of October 19, 1999, as
amended from time to time and in effect on
the date hereof.
"Person" means an individual, corporation, partnership,
association,
joint-stock company, trust, business trust,
unincorporated organization, joint
venture, or a court or governmental
authority.
"Pool" shall mean the Company's and the REIT's unencumbered asset
pool
which shall consist of (i) cash from a 1031
exchange, (ii) cash or cash
equivalents held by the Company and the
REIT for the sole purpose of liquidating
or retiring unsecured Debt, and (iii) all
Properties of the Company and the REIT
which meet all of the following criteria:
(a) a certificate of occupancy has
been issued for the Property and remains in
full force and effect, (b) the
Property has been at least fifty percent
(50%) leased (based on actual leasable
square footage at the Property) for the
most immediately preceding three (3)
consecutive months based on leases wherein
the tenants are paying at least the
average monthly lease payments required by
the terms of such leases and such
leases are free from default by either the
landlord or tenant thereunder, (c)
there is no Lien on the Property, and (d)
the Company and the REIT have provided
Agent with a Phase I environmental report
for the Property in form and content
reasonably acceptable to Lenders.
Notwithstanding the foregoing, the amount of
Non-Stabilized Properties included in the
Pool shall not exceed twenty-five
percent (25%) of Pool GAV. (Any
Non-Stabilized Property included in the Pool
will be removed from the Pool if such
Property fails to meet the definition of a
"Stabilized Property" within nine (9)
months from the date such Property is
first included in the Pool.)
5
<PAGE>
"Pool
EBITDA" shall mean the sum of Property EBITDA of all Pool
Properties.
"Pool GAV" shall mean the sum of (without redundancy) (i) 100% of
Pool
EBITDA from Stabilized Properties,
capitalized at the appropriate Capitalization
Rate, (ii) for each Non-Stabilized Property
in the Pool, the lesser of (a) 75%
of the Gross Book Value of Non-Stabilized
Properties in the Pool, or (b) Pool
EBITDA of Non-Stabilized Properties
capitalized at the appropriate
Capitalization Rate, and (iii) cash from a
1031 exchange, and (iv) cash or cash
equivalents held by the Company and the
REIT for the sole purpose of liquidating
or retiring unsecured Debt. Notwithstanding
the foregoing, any Properties
acquired during the applicable reporting
period that qualify for Pool shall be
valued at Gross Book Value.
"Pool Properties" shall mean Properties included in the Pool.
"Program" means the executive unit purchase program adopted by
the
Board of Trustees of the REIT as the
general partner of the Company on April 22,
1999, entitling certain employees and
trustees of the Company and the REIT to
purchase Class A Units, as such Program may
be amended, supplemented, restated
or otherwise modified from time to time in
the sole discretion of the Company
and the REIT.
"Program Event of Default" has the meaning set forth in Section
6.01.
"Prohibited Transaction" means any transaction set forth in Section
406
of ERISA or Section 4975 of the Internal
Revenue Code.
"Property" or "Properties" means any multifamily, retail or office
real
estate property which is 100% owned by the
Company or the REIT.
"Property EBITDA" shall mean the net operating income of the
Property
for the immediately preceding fiscal
quarter on an annualized basis (or, in the
case of enclosed mall retail properties,
the most immediately preceding four (4)
fiscal quarters), before extraordinary
items (including gains or losses from
debt restructuring and sales of
properties). For purposes hereof, operating
expenses shall exclude Interest Expense,
depreciation, amortization or income
tax expense but shall include (i) accruals
of those expenses (including, but not
limited to, insurance and property taxes)
to the extent such expenses are not
paid on a monthly or quarterly basis, (ii)
an imputed management fee expense for
the Property equal to three percent (3%) of
all collected rental income from the
Property, plus other reoccurring Property
income, and (iii) an imputed reserve
of $200 per unit per annum for multifamily
Properties and of 20(cent) per square
foot for retail and office Properties.
"Property GAV" shall mean Property EBITDA, capitalized at the
appropriate Capitalization Rate, or if such
Property has been acquired during
the applicable reporting period, the Gross
Book Value of such Property.
"Pro-rata" means when used with respect to a Lender, and any
described
aggregate or total amount, an amount equal
to said Lender's pro-rata share or
portion based on its percentage of the
aggregate outstanding principal amount of
outstanding Notes.
"Purchaser" has the meaning set forth in Section 10.03(a).
"Qualified Rating Agency" means Moody's or S&P, or any other
rating
agency from time to time approved by
Lenders in writing as a Qualified Rating
Agency.
"Regulation T" means Regulation T of the Board of Governors of
the
Federal Reserve System as from time to time
in effect and shall include any
successor or other regulation or official
interpretation of said Board of
Governors relating to the extension of
credit by securities brokers and dealers
for the purpose of purchasing or carrying
margin stocks.
"Regulation U" means Regulation U of the Board of Governors of
the
Federal Reserve System as from time to time
in effect and any successor or other
regulation or official interpretation of
said Board of Governors relating to the
extension of credit by banks or other
Persons for the purpose of purchasing or
carrying margin stocks.
6
<PAGE>
"Regulation X" means Regulation X of the Board of Governors of
the
Federal Reserve System as from time to time
in effect and shall include any
successor or other regulation or official
interpretation of said Board of
Governors relating to the extension of
credit by the specified lenders for the
purpose of purchasing or carrying margin
stocks.
"Reimbursement Agreement" means an agreement entered into among
the
Company, the REIT and each Borrower in
connection with such Borrower's Loan, as
from time to time amended in the discretion
of the Company, the REIT and the
applicable Borrower.
"Reimbursement Obligations" means, with respect to any Borrower,
all
obligations of such Borrower to any
Guarantor which now exist or may arise out
of or in connection with the Guaranty or
the performance by any Guarantor of its
obligations thereunder, including all such
obligations under his or her
Reimbursement Agreement.
"REIT" has the meaning set forth in the opening paragraph of
this
Agreement.
"Related Fund" means, with respect to any Lender that is a fund
that
invests in bank loans, any other fund that
invests in bank loans and is advised
or managed by the same investment advisor
as such Lender.
"Reportable Event" means any of the events set forth in Section
4043(b)
of ERISA.
"Required Lenders" means Lenders in the aggregate having at
least
66-2/3% of the then aggregate unpaid
principal amount of all Loans or, if no
such principal amount is then outstanding,
Lenders in the aggregate holding at
least 66-2/3% of the Aggregate
Commitment.
"S&P" means Standard & Poor's Rating Services, a Division
of the McGraw
Hill Companies and its successors.
"Secured Liabilities" shall mean those Total Liabilities which
are
secured by a Lien.
"Stabilized Properties" shall mean any Property which meets all of
the
following criteria: (i) a certificate of
occupancy has been issued for the
Property and remains in full force and
effect, (ii) the Property has been at
least eighty-five percent (85%) occupancy
level if multifamily, retail, or
office (based on actual leasable square
footage at the property) for the most
immediately preceding three (3) consecutive
months based on leases wherein the
tenants are paying at least the average
monthly lease payments required by the
terms of such leases and such leases are
free from default by either the
landlord or tenant thereunder, and (iii)
there is no Lien on the Property.
However, if a historically Stabilized
Property drops below the above listed
occupancy threshold level, such Property
may again become classified as a
Stabilized Property after attaining a
ninety percent (90%) occupancy level for a
monthly reporting period if such Property
attains such ninety percent (90%)
occupancy level within three months of
previously being classified as a
Stabilized Property. Once a Property is
reclassified as a Stabilized Property,
then such Property shall remain classified
as a Stabilized Property if it
satisfies items (i) and (iii) above and
maintains at least eighty-five percent
(85%) occupancy level for each month
thereafter.
"Standby Letter of Credit" means one or more standby letter(s)
of
credit (a) issued by one or more financial
institutions which are satisfactory
to the Required Lenders and the long-term
unsecured debt securities of each of
which are rated not less than A by Standard
& Poor's Corporation or A-2 by
Moody's Investors Services, Inc., (b) in an
aggregate face amount at least equal
to the sum of the outstanding principal
amounts of all Notes as of the date of
issuance plus the aggregate amount of all
interest which has accrued and is
unpaid on such date plus the amount of
interest which would accrue on such
principal from such date to the Final
Payment Date, (c) having an expiry date
not earlier than January 31, 2005 and (d)
otherwise in form and substance
reasonably satisfactory to the Required
Lenders.
"Subsidiary" means any corporate entity, partnership, or other
business
entity, in which either the Company or the
REIT owns an ownership interest.
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"Subsidiary Guarantor" means each Person which becomes a
guarantor
hereunder by virtue of a joinder agreement
entered into with the Agent pursuant
to Section 5.01(t) and which has not been
released as a Guarantor pursuant to
such Section.
"Total Liabilities" shall mean (without redundancy), all mortgage
debt,
letters of credit, the deferred purchase
price pursuant to purchase agreements
or contracts, to the extent such deferred
purchase price is required to be
included in accordance with GAAP, forward
equity commitments (however, such
commitments shall not be considered debt if
such commitments are required to be
replaced dollar for dollar with equity),
pre-purchase deals (including all
assets and liabilities of such pre-purchase
deals), unsecured debt, subordinated
debt, payables, accrued expenses, lease
obligations (including ground leases),
guarantees of indebtedness and unfunded
obligations, pro rata share of
non-recourse debt in an Unconsolidated
Subsidiaries or joint ventures (where the
pro rata share of the asset has been
included) and any loan where either the
Company or the REIT is liable for debt as a
general partner, and one hundred
percent (100%) of recourse debt in
Unconsolidated Subsidiaries or joint
ventures, and one hundred percent (100%) of
recourse debt incurred by either the
Company or the REIT.
"Total Market Capitalization" shall mean the sum of (i) Debt and
(ii)
the product of (a) the total number of
shares of the REIT issued and outstanding
(including as issued the number of shares
of the REIT into which partnership
units of the Company are redeemable) and
(b) the closing price per share of the
REIT shares, as quoted in the New York
Stock Exchange Composite Transactions
printed in the financial press as of the
date of determination.
"Transferee" has the meaning set forth in Section 10.04.
"Unconsolidated Subsidiary" means a Subsidiary that is not
consolidated
with the Guarantors for financial reporting
purposes.
"Unmatured Default" means an event which but for the lapse of time
or
the giving of notice, or both, would
constitute a Program Event of Default.
"Unsecured Interest Expense" shall mean Interest Expense relating
to
Unsecured Liabilities.
"Unsecured Liabilities" shall mean those Total Liabilities which
are
not secured by a Lien.
"Wholly-Owned Subsidiary" of a Person means (i) any Subsidiary of
such
Person all of the outstanding voting
securities of which shall at the time be
owned or controlled, directly or
indirectly, by such Person or one or more
Wholly-Owned Subsidiaries of such Person,
or by such Person and one or more
Wholly-Owned Subsidiaries of such Person,
or (ii) any partnership, limited
liability company, association, joint
venture or similar business organization
100% of the ownership interests having
ordinary voting power of which shall at
the time be so owned or controlled.
The foregoing definitions shall be equally applicable to both
the
singular and plural forms of the defined
terms. The words "herein," "hereof" and
words of similar import as used in this
Agreement shall refer to this Agreement
as a whole and not to any particular
provision in this Agreement. References to
"Articles," "Sections," "subsections,"
"paragraphs," "Exhibits" and "Schedules"
in this Agreement shall refer to Articles,
Sections, subsections, paragraphs,
Exhibits and Schedules of this Agreement
unless otherwise expressly provided;
references to Persons include their
respective permitted successors and assigns
or, in the case of governmental Persons,
Persons succeeding to the relevant
functions of such persons; and all
references to statutes and related
regulations shall include any amendments of
same and any successor statutes and
regulations.
ARTICLE II
AMOUNTS AND TERMS OF THE LOANS
2.01
The Loans.
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(a) Each
Lender severally (and not jointly) agrees, on
the terms and conditions set forth in this
Agreement, to make Advances to the
Borrowers, severally and not jointly, on
the Closing Date in amounts not to
exceed in the aggregate the amount of its
respective Commitment. Each of the
Borrowers and the principal amount of each
Loan to be made to such Borrower
shall be identified in writing separately
delivered by the Company to the Agent
on the date hereof. No amount of the Loans
which are repaid or prepaid by the
Borrowers may be reborrowed hereunder.
(b) All Loans
shall be made on the Closing Date. The
obligation of each Borrower to repay the
Loan made to such Borrower shall be
evidenced by a Note executed by such
Borrower. The Loan to each Borrower
hereunder shall consist of Advances made to
such Borrower from the several
Lenders on a Pro-rata basis; provided that
no Lender shall be obligated to make
an Advance to a Borrower in an amount which
is not in excess of $25,000.
2.02
Notes.
(a) The Loan
made to each Borrower, and such Borrower's
obligation to repay such Loan, shall be
evidenced by a single Note issued by
such Borrower to the Agent (for the benefit
of all of the Lenders), which shall
provide, among other things, that (i) such
Note shall mature, and the
outstanding principal amount thereof and
the unpaid accrued interest thereon
shall be due and payable, on the Maturity
Date, (ii) such Borrower shall pay
interest on the unpaid principal amount of
the Loan made to such Borrower from
the Closing Date until such principal
amount is paid in full, payable to the
Agent, for the benefit of the Lenders, in
arrears on each Interest Payment Date
at the rate as provided in the Note, (iii)
such Note shall be prepayable only to
the extent provided in the Note and (iv)
any such prepayments shall be subject
to the payment of an Early Payment Fee and
related fees as set forth in the
Note. All interest payments and prepayments
in respect of any Loan shall be
applied by the Agent among the Lenders on a
Pro-rata basis (based on each
Lender's Pro-rata share of the outstanding
principal amount thereof).
(b) Upon the
occurrence and during the continuance of any
Program Event of Default, the Agent may
(and at the request of any Lender, the
Agent shall) request that the Borrowers
execute and deliver amended and restated
Notes for each Lender in replacement of the
existing Notes issued in accordance
with Section 2.02(a).
2.03
Disbursement of Funds. Pursuant to the Letters of Direction of
the Borrowers, the proceeds of all Loans
will be disbursed directly to the
Company for the account of the applicable
Borrower.
2.04
Distribution of Payments. All payments to the Agent from or on
behalf of the Borrowers shall (except as
the Lenders may otherwise agree) be
paid to the Lenders pursuant to the terms
of Section 3 of the Notes. The Lenders
acknowledge and agree that all prepayment
administrative fees payable under
Section 2(b)(iii) of the Notes shall be for
the account of Bank One and not for
the benefit of any Lender.
2.05
Funding Indemnity.
(a) The Early
Payment Fee payable under each Note to Bank
One in respect of any portion of the
principal amount thereof paid prior to the
Final Payment Date or, with respect to
Section 2.05(c), not borrowed on the
Closing Date, shall be an amount equal to
(i) the sum of (A) (1) an amount equal
to the positive difference, if any, between
the Present Value of the remaining
fixed rate payments under the Reference
Swap (exclusive of accruals to but
excluding the Break Date) minus the Present
Value of the fixed rate payments
under the Redeployment Swap; provided,
however, that if the value of (i)(A) is
negative, such amount shall not exceed the
amount of interest owed on the Note
plus (B) if the Break Date is not a
quarterly date, an amount equal to the
positive difference, if any, between the
Present Value of the Current Floating
Rate payment under the Redeployment Swap
minus the Present Value of the Current
Floating Rate payment under the Reference
Swap (exclusive of accruals to but
excluding the Break Date), or (ii) if the
Zero Coupon Rate cannot be determined,
the amount of all Losses of Bank One MINUS,
in the case of either clause (i) or
clause (ii) the amount of interest on the
principal amount of the Note paid
prior to the Final Payment Date accrued at
the Interest Rate (as defined in the
Note) for the period such principal amount
was outstanding.
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<PAGE>
(b) For
purposes of this Section 2.05, the following
terms shall have the following
meanings:
"Break Date" means, with respect to any Break Event, the date
on which such Break Event occurs.
"Break Event" means any voluntary or mandatory (whether as a
result of acceleration, a Change of Control or otherwise) repayment
of
all or any portion of any Loan prior to the Final Payment Date.
"Current Floating Rate" means, with respect to the Reference
Swap, LIBOR determined two London banking days prior to the
Interest
Payment Date next preceding the Break Date, and with respect to
the
Redeployment Swap, LIBOR referred to in the definition of
Redeployment
Swap.
"LIBOR" means the London interbank offered rate appearing as
of 11:00 a.m. (London time) on Telerate Page 3750.
"Loss" means, with respect to Bank One, an amount equal to the
total amount required by Bank One, as determined in good faith by
Bank
One as of the Break Date, to compensate it for any losses, costs
and
expenses that it may incur as a result of the occurrence of the
Break
Event, including, without limitation, loss of bargain and any costs
of
maintaining, terminating, hedging or deploying any fixed rate
or
floating rate funding arrangements or commitments and/or any
transactions employed to hedge differences arising between the
Interest
Rate (as defined in the Note) of the Loans and the floating rate
cost
of funds, as determined with reference to market interest rates
or
prices available or existing at or about the time of such Break
Event.
"Present Value" means, in respect of any amount, the value of
the amount on the Break Date after discounting such amount to
present
value from its respective due date at the Zero Coupon Rate in the
case
of fixed rate payments or at the Current Floating Rate of the
Redeployment Swap in the case of floating rate payments.
"Redeployment Swap" means, with respect to a Break Event, an
interest rate swap entered into at a rate per annum equal to the
fixed
rate a swap dealer would bid to enter into as a fixed rate
payor,
determined by Bank One in good faith (as of 2:00 p.m., Chicago
time,
two days prior to the Break Date) on the basis of the quotation
Bank
One would provide as a fixed rate payor to another swap dealer (or
if
Bank One declines to provide such quotation for whatever reason,
then
on the basis of what a leading interest rate swap dealer selected
by
Bank One in good faith is willing to bid as a fixed rate payor to
enter
into the Redeployment Swap as quoted to Bank One on such date
of
determination) and having the same terms as the Reference Swap,
except
that it (i) commences on the Break Date, (ii) has equal fixed
payments
and (iii) has an initial floating rate payment calculated at LIBOR
plus
1.65% per annum determined on the Break Date for U.S. Dollar
deposits
having a maturity equal to the period from such Break Date to the
next
succeeding Interest Payment Date, or, if there exists no LIBOR rate
for
U.S. Dollar deposits of such maturity, maturing immediately before
or
immediately after such maturity, whichever is higher. If the
Redeployment Swap has a notional amount less than $5,000,000, then
the
Redeployment Swap will be deemed to have a notional amount of
$5,000,000 for the sole purpose of obtaining any such
quotation.
"Reference Swap" means an interest rate swap (i) deemed to
have been entered into as of the date hereof and commencing on
the
Closing Date, (ii) having a notional amount at any time equal to
that
part of the aggregate principal amount of the Loans originally
scheduled to be outstanding at such time and which has become
subject
to the Break Event, (iii) maturing on the Final Payment Date and
(iv)
obligating the floating rate payor to make payments on each
Interest
Payment Date at LIBOR determined two London banking days before
the
next preceding Interest Payment Date for three-month U.S.
Dollar
deposits plus 1.65% per annum, calculated for actual days elapsed
on a
360-day year basis, in exchange for receiving fixed rate payments
from
a fixed rate payor on such dates calculated at such rates as set
forth
on Schedule 2.05(A) hereto (each such rate, the "Reference Fixed
Rate",
which the parties agree was the swap market rate when the Interest
Rate
was set), calculated for actual days elapsed on a 360-day year
basis.
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<PAGE>
"Telerate Page 3750" means the display designated as "Page
3750" on the Telerate Service (or such other page as may replace
Page
3750 on that service or such other service as may be nominated by
the
British Bankers' Association as the information vendor for the
purpose
of displaying British Bankers' Association Interest Settlement
Rates
for U.S. Dollar deposits).
"Zero Coupon Rate" means the rate of interest charged for a
future single payment assuming no interest payments prior to
the
payment date. Each fixed payment will be discounted using the
Zero
Coupon Methodology. The Zero Coupon Rate for each fixed payment
date
will be determined using the appropriate LIBOR rate and the
rates
implied by the "90 Day Euro$" futures contracts at the Chicago
Mercantile Exchange (IMM) at IMM Settlement (2:00 p.m. Chicago
time)
two days prior to the Break Date as appropriate to the
respective
payment dates.
"Zero Coupon Methodology" means the discounting methodology
set forth on Schedule 2.05(B) hereto.
(c) In the
event that any Eligible Person identified as
an anticipated Borrower by the Company on
the list furnished pursuant to Section
2.01(a) elects not to borrow on the Closing
Date its Loan in the amount
specified on such list, which election is
made after determination of the
Interest Rate (as defined in the Note) or
any Loan contemplated by such list is
not made on the Closing Date for any other
reason (other than a breach by a
Lender of its obligations hereunder), the
Company and the REIT will indemnify
each Lender upon demand for any loss or
cost incurred by it resulting therefrom,
including, without limitation, any loss or
cost (including lost profits)
incurred in liquidating or employing
deposits acquired to fund or maintain its
Loan or in terminating or unwinding any
interest rate exchange or similar
arrangement entered into by such Lender in
connection with such Loan. Such loss
or cost, in the case of Bank One only, will
be calculated in accordance with
Section 2.05(a).
(d) Each
Guarantor jointly and severally agrees that (i)
in the event of any repayment of all or any
portion of the principal of any
Borrower's Loan prior to the Final Payment
Date and after the occurrence of a
Program Event of Default or a Borrower
Event of Repayment described in Section
6(vi) of such Borrower's Note or (ii) in
the event of a voluntary repayment in
full of the principal of any Borrower's
Loan prior to the Final Payment Date
following such Borrower's election within
30 days after such Borrower's
Disability or Retirement (each as defined
in such Borrower's Note) to make such
repayment, then in either such event, such
Guarantor shall upon demand indemnify
each Lender against and promptly make
payment to the Lenders of any Early
Payment Fee which, but for the last
sentence of Section 7 of such Borrower's
Note, would have been due from such
Borrower in respect of such repayment
pursuant to such Section 7.
(e) In
addition, if for any reason any Early Payment Fee
which by the terms of a Borrower's Note is
payable by such Borrower is not
recoverable in full from such Borrower or
the Guarantors pursuant to the terms
of the applicable Note or Article VII, each
Guarantor agrees, as its joint and
several independent primary obligation, to
pay such amount to the applicable
Lender (without duplication of amounts
otherwise paid) upon demand as additional
consideration for entering into this
Agreement and funding the Loans.
ARTICLE III
CONDITIONS PRECEDENT
3.01
Conditions to Obligations to Make Loans. The obligations of
the Lenders to make Loans shall be subject
to the fulfillment of each of the
following conditions precedent and receipt
by the Agent, with sufficient copies
for each Lender, of each of the following
(each such document to be in form and
substance reasonably satisfactory to the
Agent and its counsel):
(a) Agreement.
An executed original of this Agreement,
which shall be in full force and effect,
together with all schedules and
exhibits hereto.
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<PAGE>
(b) Notes. A
Note duly executed by each Borrower
evidencing the Loan to such Borrower, dated
the Closing Date, and payable to the
order of the Agent, for the benefit of all
of the Lenders.
(c) Borrower
Information. Each Borrower shall have
delivered to the Agent a personal financial
statement and other financial
information as the Agent may reasonably
request, in each case, in form and
substance reasonably satisfactory to the
Agent.
(d) Legal
Opinions. A written opinion of (i) Hogan &
Hartson L.L.P., counsel to the Company and
the REIT, and (ii) Sirote & Permutt,
P.C., local counsel to the Company and the
REIT, each in form and substance
reasonably satisfactory to the Agent.
(e) Letters of
Direction. A Letter of Direction executed
by each Borrower (and, if the applicable
Borrower Account is a joint account,
executed by each joint account holder).
(f) Charter
Documents. Copies of the Organization
Documents of each Guarantor, together with
all amendments, and a certificate of
good standing, both certified by the
appropriate governmental officer in its
jurisdiction of organization, together with
such certificates of good standing
issued by the Secretary of State of such
other jurisdictions as shall be
requested by the Agent.
(g) By-Laws
and Resolutions. Copies, certified by the
Secretary or Assistant Secretary of each
Guarantor, of its by-laws, if
applicable, and of its Board of Directors',
Board of Trustees', members' or
partners' resolutions authorizing the
execution, delivery and performance of the
Loan Documents to which such Guarantor is a
party.
(h)
Secretary's Certificate. An incumbency certificate,
executed by the Secretary or Assistant
Secretary of each Guarantor, which shall
identify by name and title and bear the
signature of the officers of such
Guarantor authorized to sign the Loan
Documents upon which certificate the Agent
and the Lenders shall be entitled to rely
until informed of any change in
writing by such Guarantor.
(i) Officer's
Certificate. A certificate, dated the
Closing Date, signed by the chief financial
officer of the Company and the REIT,
stating that, as of the Closing Date, (i)
the representations and warranties
contained in Article IV are true and
correct on and as of such date, (ii) on
such date, no Program Event of Default or
Unmatured Default has occurred and is
continuing and (iii) since December 31,
1998, there has been no material adverse
change in the financial condition,
business, operations or prospects of any
Guarantor.
(j) List of
Borrowers and Loan Amounts. On the date
hereof, a list identifying each anticipated
Borrower and the principal amount of
the Loan to be made to such Borrower.
(k) Account
Applications. A completed account application
and such other supporting documentation
from each Borrower sufficient to open
the Borrower Account of such Borrower.
(l) Interest
Rates and Schedules. On the date hereof, the
Company and the Agent shall have agreed to
(i) the interest rates and other
amounts to be inserted into each of the
Notes where such rates and amounts are
bracketed in the form of Note and (ii) the
information to be included on
Schedule 2.05(A); and all of the schedules
hereto and the other Loan Documents
shall be completed on or prior to the
Closing Date and be in form and substance
reasonably satisfactory to the Agent.
(m) Fees. The
Company shall have paid all fees in
accordance with and at the times specified
in the fee letter dated November 19,
1999 between the Company and Bank One.
(n) Other
Documents. Such other documents as the Agent or
its counsel may reasonably request.
Subject to the following sentence, if each of the conditions
precedent
set forth in this Section 3.01 has not been
fully satisfied or waived, and the
Loans have not been made by the Lenders as
contemplated hereunder, on or before
February 1, 2000, then this Agreement and
the other Loan Documents shall
automatically terminate and be of
12
<PAGE>
no further force and effect without any
further action by any party hereto or
thereto, provided that all indemnification
provisions set forth in the Loan
Documents shall survive such termination.
If all of the above conditions are
satisfied on or before February 1, 2000,
except with respect to one or more
Borrowers (each a "Deficient Borrower"),
any condition set forth in Section
3.01(b), (c), (e) or (k) is not satisfied,
the Lenders shall not be obligated to
make Loans to the Deficient Borrowers but
shall remain obligated to make Loans
to the other Borrowers. Solely for purposes
of Section 3.01(b), (c), (e) and (k)
only, required delivery shall be deemed to
have been made to the Agent if
arrangements for the delivery thereof have
been made which are satisfactory to
the Agent. In reliance upon the provisions
of the Guaranty (and particularly
Section 7.03(xii)), the Lenders authorize
the Agent to rely upon verbal
assurances from the Company as to the
expected delivery of any such items.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES
4.01
Representations and Warranties. The Company and the REIT
represent and warrant to the Agent and to
each Lender as follows:
(a) Existence,
Power and Qualification.
(i) The REIT
is duly organized, validly existing
and in good standing under the laws of the
State of Alabama, has the power and
authority and the legal right to own its
property and to conduct its business in
the manner in which it is now conducted or
hereafter contemplates conducting its
business, and qualifies as a "real estate
investment trust" under the applicable
provisions of the Internal Revenue
Code.
(ii)
The Company is duly organized, validly
existing and in good standing under the
laws of the State of Delaware, has the
power and authority and the legal right to
own its property and to conduct its
business in the manner in which it is now
conducted or hereafter contemplates
conducting its business, and is duly
qualified and registered to do business
under the laws of the State of Alabama and
any other states where its ownership
of property or conduct or proposed conduct
of its business requires such
qualification.
(b) Authority
Hereunder. The Guarantors have the power
and authority and the legal right to make,
deliver and perform the Loan
Documents to which they are a party. The
Guarantors have taken all necessary
action on their part to authorize the
execution, delivery and performance of the
Loan Documents to which they are a party,
and the Guaranty contemplated hereby.
No consent or authorization of, or filing
with, any federal, state, county or
municipal government, or any department or
agency of any such government, is
required of any Guarantor in connection
with the execution, delivery,
performance, validity or enforceability of
the Loan Documents, or the Guaranty
contemplated hereby except, with respect to
the offering of the Class A Units,
filings required under state or federal
securities laws which the Company or the
REIT will make within thirty days of the
date hereof.
(c) Due
Execution and Enforceability. The Loan Documents
have been duly executed and delivered on
behalf of the Guarantors, and
constitute the legal, valid and binding
obligation of the Guarantors enforceable
against the Guarantors in accordance with
their respective terms, except as
enforceability may be limited by applicable
bankruptcy, insolvency,
reorganization, moratorium or similar laws
affecting the enforcement of
creditors' rights generally, and general
principles of equity which may limit
the availability of equitable remedies.
(d) Material
Claims. There is no litigation, claim,
lawsuit, investigation, action or other
proceeding pending or, to the knowledge
of the Guarantors, threatened before any
court, agency, arbitrator or other
tribunal which individually or in the
aggregate could reasonably be expected to
result in any material adverse change in
the financial condition, operations,
businesses or prospects of the
Guarantors.
(e) Financial
Statements Accurate. All financial
statements heretofore or hereafter provided
by the Guarantors are and will be
true and complete in all material respects
as of their respective dates and will
fairly present the financial condition of
the Guarantors, and there are no
liabilities, direct or indirect, fixed or
contingent, as of the dates of such
statements which are not reflected therein
or in the notes thereto or in a
written certificate delivered with such
statements. All financial statements
have been or will be prepared in accordance
with GAAP.
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Since December 31, 1998, there has been no
material adverse change in the
financial condition, business, operations,
or prospects of any Guarantor.
(f) No
Defaults or Restrictions. There is no declared
default under any agreement or instrument
nor does there exist any restriction
in the Organizational Documents of the
Guarantors that causes or would cause a
material adverse effect on the business,
properties, operations or condition,
financial or otherwise, of the Guarantors
(except for restrictions applicable to
real estate investment trusts under the
Internal Revenue Code).
(g) Payment of
Taxes. The Guarantors have filed all
federal, state, and local tax returns which
are required to be filed and have
paid, or made adequate provision for the
payment of, all taxes which have or may
become due pursuant to said returns or to
assessments received by Company.
(h) Necessary
Permits, Etc. The Guarantors possess all
franchises, trademarks, permits, licenses,
consents, agreements and governmental
approvals that are necessary or required by
any authority to carry on their
businesses as now conducted. The Guarantors
have received no notice of default
or termination of any material agreement or
any notice of noncompliance with any
law, rule or regulation by which they are
bound, which would cause a material,
adverse effect upon the business,
properties, operations or condition, financial
or otherwise, of the Guarantors.
(i) Title to
Assets. The Guarantors have good and
marketable title to all of their assets
subject only to immaterial liens and
other liens not resulting in a violation of
Section 5.02 (h)(vii).
(j)
Compliance with
Applicable Environmental Law. Except
as set forth in Schedule 4.01(j), (i) the
Properties and the Guarantors are not
in violation of or the subject of any
existing, pending or, to the best of the
Guarantors' knowledge, threatened
investigation or inquiry by any governmental
authority and are not liable for any
response costs or remedial obligations
under any Applicable Environmental Law;
(ii) the Guarantors have obtained all
permits, licenses or similar authorizations
necessary pursuant to any Applicable
Environmental Law to construct, occupy,
operate or use any buildings,
improvements, fixtures or equipment located
upon the Properties; (iii) the
Guarantors have taken all steps reasonably
necessary to determine and have
determined that no petroleum products, oil,
hazardous substances, or solid
wastes have been disposed of or otherwise
released on the Properties, other than
quantities permitted by Applicable
Environmental Law and which would not,
individually or in the aggregate,
reasonably be expected to have a material
adverse effect on the operations or
financial condition of the Guarantors; and
(iv) the use which the Guarantors have made
of the Properties has not resulted
in the location on or disposal or other
release of any petroleum products, oil,
hazardous substances or solid waste on or
to the Properties, other than
quantities permitted by Applicable
Environmental Law and which would not,
individually or in the aggregate,
reasonably be expected to have a material
adverse effect on the operations or
financial condition of the Guarantors. The
Guarantors hereby agree to pay any fines,
charges, fees, expenses, damages,
losses, liabilities, or response costs to
the extent required by Applicable
Environmental Law and to indemnify and
forever save Lenders harmless from any
and all judgments, fines, charges, fees,
expenses, damages, losses, liabilities,
response costs, and reasonable attorneys'
fees and expenses incurred by the
Lenders under any such Applicable
Environmental Law. Each of the Guarantors
agrees to notify Lenders in the event that
any governmental agency or other
entity notifies any of them that they may
not be in compliance with any
Applicable Environmental Law. The
Guarantors agree to permit Lenders to have
access to the Properties at all reasonable
times and upon reasonable notice in
order to conduct, at the Guarantors'
expense, any tests which Lenders deem are
necessary to ensure that the Guarantors and
the Properties are in compliance
with all Applicable Environmental Laws.
Terms used in this Section 4.01(j) which
are defined in any Applicable Environmental
Law shall have the meanings given
therein.
(k)
Disclosure. Neither this Agreement nor any other
document, financial statement, credit
information, certificate or statement
required herein to be furnished to Lenders
by the Guarantors in connection with
this Agreement contains any untrue,
incorrect or misleading statement of
material fact, and all of these documents
taken as a whole do not omit to state
a material fact necessary to make the
statements contained herein not
misleading. All representations and
warranties made herein or any certificate or
other document delivered to Lenders by or
on behalf of the Guarantors, pursuant
to or in connection with this Agreement,
shall be deemed to have been relied
upon by Lenders notwithstanding any
investigation heretofore or hereafter made
by Lenders or on their behalf, and shall
survive the making of Advances as
contemplated hereby.
14
<PAGE>
(l) Controlled
Companies. None of the Guarantors is an
"investment company" within the meaning of
the Investment Company Act of 1940,
as amended, nor is any Guarantor subject to
regulation under the Public Utility
Holding Act of 1935, the Federal Power Act,
or any other law or regulation which
relates to the incurring of debt,
including, but not limited to, laws and
regulations regulating common or contract
carriers or the sale of electricity,
gas, steam, water or other public utility
services.
(m)
Insolvency. The Guarantors are now and, after giving
effect to the transactions contemplated
hereby, at all times will be, solvent.
(n) ERISA.
Each Guarantor is in compliance with all
applicable material provisions of ERISA. No
Guarantor has received any notice to
the effect that it is not in full
compliance with any of the requirements of
ERISA and the regulations promulgated
thereunder. No fact or situation that
could result in a material adverse change
in the financial condition of the
Guarantors, including, but not limited to,
any Reportable Event or Prohibited
Transaction, exists in connection with any
Employee Plan. Neither the Guarantors
nor any of the Subsidiaries has any
withdrawal liability in connection with a
Multiemployer Plan.
(o) Existing
Debt. To the best of their knowledge, the
Guarantors are not in default with respect
to any of their existing Debt. The
Guarantors have not received any written
notice of a default or event of default
from any creditor with respect to the
Guarantors' Debt. The Total Liabilities of
the Guarantors are, and will be, accurately
and completely set forth in an
attachment to the Compliance
Certificate.
(p) Regulation
T, U and X. No part of the proceeds of any
Loan will be used in a manner which would
violate, or result in a violation of,
Regulation T, Regulat
