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LOAN NO. 3752ZR
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CREDIT AGREEMENT
AMONG
PACIFIC GULF PROPERTIES INC.,
A MARYLAND CORPORATION,
AS BORROWER,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION
TOGETHER WITH THE OTHER LENDERS NAMED HEREIN
AND SUCH OTHER ASSIGNEES
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.12, AS LENDERS,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS AGENT
Dated as of April 9, 1998
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TABLE OF CONTENTS
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ARTICLE I DEFINITIONS.......................................................................1
1.1 CERTAIN DEFINED TERMS................................................................1
1.2 COMPUTATION OF TIME PERIODS.........................................................27
1.3 TERMS...............................................................................27
ARTICLE II LOANS...........................................................................28
2.1 LOAN ADVANCES AND REPAYMENT.........................................................28
2.2 AUTHORIZATION TO OBTAIN LOANS.......................................................32
2.3 LENDERS' ACCOUNTING.................................................................33
2.4 INTEREST ON THE LOANS...............................................................33
2.5 FEES................................................................................38
2.6 PAYMENTS............................................................................40
2.7 INCREASED CAPITAL...................................................................41
2.8 NOTICE OF INCREASED COSTS...........................................................41
ARTICLE III UNENCUMBERED POOL PROPERTIES...................................................42
3.1 ACCEPTANCE OF UNENCUMBERED POOL PROPERTIES..........................................42
3.2 TERMINATION OF DESIGNATION AS UNENCUMBERED POOL PROPERTY............................44
ARTICLE IV CONDITIONS TO LOANS.............................................................45
4.1 CONDITIONS TO INITIAL DISBURSEMENT OF LOANS.........................................45
4.2 CONDITIONS PRECEDENT TO ALL LOANS...................................................48
ARTICLE V REPRESENTATIONS AND WARRANTIES...................................................50
5.1 ORGANIZATION; CORPORATE POWERS......................................................50
5.2 AUTHORITY...........................................................................50
5.3 NO CONFLICT.........................................................................50
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5.4 CONSENTS AND AUTHORIZATIONS.........................................................50
5.5 GOVERNMENTAL REGULATION.............................................................51
5.6 PRIOR FINANCIALS....................................................................51
5.7 FINANCIAL STATEMENTS; PROJECTIONS AND FORECASTS.....................................51
5.8 PRIOR OPERATING STATEMENTS..........................................................51
5.9 QUARTERLY OPERATING REPORTS AND PROJECTIONS.........................................52
5.10 LITIGATION; ADVERSE EFFECTS.........................................................52
5.11 NO MATERIAL ADVERSE CHANGE..........................................................52
5.12 PAYMENT OF TAXES....................................................................52
5.13 MATERIAL ADVERSE AGREEMENTS.........................................................53
5.14 PERFORMANCE.........................................................................53
5.15 FEDERAL RESERVE REGULATIONS.........................................................53
5.16 DISCLOSURE..........................................................................53
5.17 REQUIREMENTS OF LAW.................................................................54
5.18 PATENTS, TRADEMARKS, PERMITS, ETC...................................................54
5.19 ENVIRONMENTAL MATTERS...............................................................54
5.20 UNENCUMBERED POOL PROPERTIES........................................................55
5.21 MAJOR AGREEMENTS; UPP LEASES........................................................55
5.22 SOLVENCY............................................................................55
5.23 TITLE TO ASSETS; NO LIENS...........................................................55
5.24 USE OF PROCEEDS.....................................................................55
5.25 CAPITALIZATION......................................................................55
5.26 ERISA...............................................................................55
5.27 STATUS AS A REIT....................................................................56
5.28 OWNERSHIP...........................................................................56
5.29 NYSE LISTING........................................................................56
5.30 REPRESENTATIONS AND WARRANTIES AS TO EACH GUARANTOR SUBSIDIARY......................56
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ARTICLE VI REPORTING COVENANTS.............................................................59
6.1 FINANCIAL STATEMENTS AND OTHER FINANCIAL AND OPERATING INFORMATION..................59
6.2 ENVIRONMENTAL NOTICES...............................................................64
6.3 CONFIDENTIALITY.....................................................................65
ARTICLE VII AFFIRMATIVE COVENANTS..........................................................65
7.1 EXISTENCE...........................................................................65
7.2 QUALIFICATION.......................................................................66
7.3 COMPLIANCE WITH LAWS, ETC...........................................................66
7.4 PAYMENT OF TAXES AND CLAIMS.........................................................66
7.5 MAINTENANCE OF PROPERTIES; INSURANCE................................................66
7.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS; DISCUSSIONS..............................67
7.7 MAINTENANCE OF PERMITS, ETC.........................................................67
7.8 CONDUCT OF BUSINESS.................................................................67
7.9 USE OF PROCEEDS.....................................................................67
7.10 SECURITIES LAW COMPLIANCE...........................................................67
7.11 CONTINUED STATUS AS A REIT; PROHIBITED TRANSACTIONS.................................67
7.12 LISTED COMPANY......................................................................68
7.13 CONSTRUCTION IN PROCESS.............................................................68
7.14 WITH RESPECT TO GUARANTOR SUBSIDIARIES..............................................68
7.15 INDEMNITY OF GUARANTOR SUBSIDIARIES.................................................69
ARTICLE VIII NEGATIVE COVENANTS............................................................70
8.1 LIENS, TRANSFERS, FUNDAMENTAL CHANGES...............................................70
8.2 AMENDMENT OF CONSTITUENT DOCUMENTS..................................................72
8.3 MARGIN REGULATIONS..................................................................73
8.4 MANAGEMENT..........................................................................73
8.5 BORROWER TO REMAIN A LISTED REIT....................................................73
8.6 MAJOR AGREEMENTS....................................................................73
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ARTICLE IX FINANCIAL COVENANTS.............................................................74
9.1 MINIMUM NET WORTH...................................................................74
9.2 LEVERAGE RATIO......................................................................74
9.3 SECURED DEBT TO GROSS ASSET VALUE RATIO.............................................74
9.4 EBITDA TO INTEREST EXPENSE RATIO....................................................74
9.5 EBITDA TO DEBT SERVICE AND CAPITAL EXPENDITURES RATIO...............................75
9.6 UNENCUMBERED NOI TO UNSECURED INTEREST EXPENSE RATIO................................75
9.7 DISTRIBUTIONS.......................................................................75
9.8 PERMITTED INVESTMENTS, ETC..........................................................75
9.9 CALCULATION.........................................................................76
ARTICLE X EVENTS OF DEFAULT; RIGHTS AND REMEDIES...........................................77
10.1 EVENTS OF DEFAULT...................................................................77
10.2 RIGHTS AND REMEDIES.................................................................80
10.3 RESCISSION..........................................................................81
ARTICLE XI AGENCY PROVISIONS...............................................................82
11.1 APPOINTMENT.........................................................................82
11.2 NATURE OF DUTIES....................................................................82
11.3 LOAN DISBURSEMENTS..................................................................83
11.4 DISTRIBUTION AND APPORTIONMENT OF PAYMENTS..........................................86
11.5 RIGHTS, EXCULPATION, ETC............................................................87
11.6 RELIANCE............................................................................88
11.7 INDEMNIFICATION.....................................................................88
11.8 AGENT INDIVIDUALLY..................................................................88
11.9 SUCCESSOR AGENT; RESIGNATION OF AGENT; REMOVAL OF AGENT.............................89
11.10 CONSENT AND APPROVALS..............................................................90
11.11 AGENCY PROVISIONS RELATING TO CERTAIN ENFORCEMENT ACTIONS..........................92
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11.12 ASSIGNMENTS AND PARTICIPATIONS....................................................93
11.13 RATABLE SHARING...................................................................96
11.14 DELIVERY OF DOCUMENTS.............................................................96
11.15 NOTICE OF EVENTS OF DEFAULT.......................................................97
ARTICLE XII MISCELLANEOUS..................................................................97
12.1 EXPENSES...........................................................................97
12.2 INDEMNITY..........................................................................98
12.3 CHANGE IN ACCOUNTING PRINCIPLES....................................................99
12.4 AMENDMENTS AND WAIVERS.............................................................99
12.5 INDEPENDENCE OF COVENANTS.........................................................101
12.6 NOTICES AND DELIVERY..............................................................101
12.7 SURVIVAL OF WARRANTIES, INDEMNITIES AND AGREEMENTS................................101
12.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE.............................101
12.9 PAYMENTS SET ASIDE................................................................102
12.10 SEVERABILITY.....................................................................102
12.11 HEADINGS.........................................................................102
12.12 GOVERNING LAW....................................................................102
12.13 LIMITATION OF LIABILITY..........................................................102
12.14 SUCCESSORS AND ASSIGNS...........................................................103
12.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY TRIAL.............103
12.16 SYNDICATION OF THE FACILITY......................................................104
12.17 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES.....................................104
12.18 CONSTRUCTION.....................................................................104
12.19 ENTIRE AGREEMENT.................................................................104
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LIST OF EXHIBITS AND SCHEDULES
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Exhibits:
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A - Form of Assignment and Assumption
B - Form of Unencumbered Pool Certificate
C - Form of Compliance Certificate
D - Form of Loan Notes
E - Form of Notice of Borrowing
F - Form of Fixed Rate Notice
G - Form of Subsidiary Guaranty
Schedules:
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1 - List of Unencumbered Pool Properties
5.1.19 - Environmental Matters
5.28 - Subsidiaries and Investment Partnerships
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of April 9, 1998 (as amended,
supplemented or modified from time to time, the "Agreement") and is among
PACIFIC GULF PROPERTIES INC., a Maryland corporation ("Borrower"), each of the
Lenders, as hereinafter defined, and XXXXX FARGO BANK, NATIONAL ASSOCIATION
("Xxxxx Fargo"), in its capacity as Agent and as a Lender.
RECITAL
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A. Borrower has requested that Lenders extend an unsecured
revolving loan facility to Borrower, the proceeds of which will be used in
accordance with the provisions of this Agreement, and Lenders are willing to
extend the requested facility on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
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DEFINITIONS
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1.1 Certain Defined Terms. The following terms used in this Agreement
shall have the following meanings (such meanings to be applicable, except to the
extent otherwise indicated in a definition of a particular term, both to the
singular and the plural forms of the terms defined):
"Accommodation Obligations", as applied to any Person, means (a)
any Indebtedness of another Person in respect of which that Person is liable,
including, without limitation, any such Indebtedness directly or indirectly
guaranteed, endorsed (otherwise than for collection or deposit in the ordinary
course of business), co-made or discounted or sold with recourse by that Person,
or in respect of which that Person is otherwise directly or indirectly liable,
including in respect of any Partnership in which that Person is a general
partner; or (b) Contractual Obligations (contingent or otherwise) arising
through any agreement to purchase, repurchase or otherwise acquire such
Indebtedness or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition,
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or to make payment other than for value received; but excluding, in the case of
Nonrecourse Indebtedness of an Investment Partnership that is otherwise included
in Indebtedness of Borrower, the amount of such Indebtedness in excess of
Borrower's Share thereof.
"Accountants" means Ernst & Young, LLP or any other "big six"
accounting firm or another firm of certified public accountants of national
standing selected by Borrower and acceptable to Agent.
"Acquisition Price" means the aggregate purchase price for an
asset including bona fide purchase money financing provided by the seller and
all (or Borrower's Share of, as applicable) existing Indebtedness pertaining to
such asset.
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control with,
that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under common
control with"), as applied to any Person, means (a) the possession, directly or
indirectly, of the power to vote ten percent (10%) or more of the Securities
having voting power for the election of directors of such Person or otherwise to
direct or cause the direction of the management and policies of that Person,
whether through the ownership of voting Securities or by contract or otherwise,
or (b) the ownership of a general partnership interest or a limited partnership
interest (or other ownership interest) representing ten percent (10%) or more of
the outstanding limited partnership interests or other ownership interests of
such Person.
"Agent" means Xxxxx Fargo in its capacity as agent for the
Lenders under this Agreement, and shall include any successor Agent appointed
pursuant hereto and shall be deemed to refer to Xxxxx Fargo in its individual
capacity as a Lender where the context so requires.
"Apartment Property" means a Property improved (or, in the case
of Construction in Process, being improved) with a multi-family apartment
project.
"Applicable LIBO Rate Margin" means, as of any date of
determination:
(a) If Borrower's senior long-term unsecured debt obligations are
rated by both Moody's and Standard & Poor's or by either Moody's or Standard &
Poor's and at least one other Rating Agency: (i) 0.80%, if Borrower's Rating is
at least A-/A3, (ii) 0.90%, if Borrower's Rating is at least BBB+/Baa1 but the
condition set forth in clause (i) of this definition is not satisfied, (iii)
1.00%, if Borrower's Rating is at least BBB/Baa2 but neither the condition set
forth
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in clause (i) of this definition nor the condition set forth in clause (ii) of
this definition is satisfied, or (iv) 1.10, if Borrower's Rating is at least
BBB-/Baa3 but neither the condition set forth in clause (i) of this definition,
nor the condition set forth in clause (ii) of this definition, nor the condition
set forth in clause (iii) of this definition, is satisfied; or
(b) in any other case (including, without limitation, if
Borrower's senior long-term unsecured debt obligations are not rated by at least
two Rating Agencies, one of which is either Moody's or Standard & Poor's, or if
Borrower's Rating is less than BBB-/Baa3, but subject to the proviso at the end
of the following paragraph): (i) 1.10% if, for the most recent Fiscal Quarter in
respect of which Borrower is required to have delivered Financial Statements,
the Leverage Ratio was less than 0.25:1; (ii) 1.20% if, for the most recent
Fiscal Quarter in respect of which Borrower is required to have delivered
Financial Statements, the Leverage Ratio was greater than or equal to 0.25:1 but
less than 0.35:1; (iii) 1.25% if, for the most recent Fiscal Quarter in respect
of which Borrower is required to have delivered Financial Statements, the
Leverage Ratio was greater than or equal to 0.35:1 but less than 0.45:1; or (iv)
1.30% if, for the most recent Fiscal Quarter in respect of which Borrower is
required to have delivered Financial Statements, the Leverage Ratio was not less
than 0.45:1.
If Borrower receives ratings from two or more Rating Agencies and such ratings
are not equivalent to each other, then either Moody's or Standard & Poor's (or,
if both have provided ratings which are not equivalent, then the higher of such
two ratings) shall constitute Borrower's "Rating" for purposes of determining
the Applicable LIBO Rate Margin. Each change in the Applicable LIBO Rate shall
become effective (x) if paragraph (a) of this definition applies, on the date as
of which any change in Borrower's Rating becomes effective; or (y) if paragraph
(b) of this definition applies, on the forty-fifth (45th) day after the end of
the relevant Fiscal Quarter; provided that if, as of the forty-fifth (45th) day
after the end of a Fiscal Quarter, Borrower has not delivered the Compliance
Certificate required to be delivered pursuant to Section 6.1.4 setting forth the
Leverage Ratio for such Fiscal Quarter, then, for the period commencing on such
forty-fifth (45th) day and continuing until such Compliance Certificate is so
delivered, the "Applicable LIBO Rate Margin" shall be 1.30%.
"Assignment and Assumption" means an Assignment and Assumption in
the form of Exhibit A hereto (with blanks appropriately filled in) delivered to
Agent in connection with each assignment of a Lender's interest under this
Agreement pursuant to Section 11.12.
"Base Rate" means, on any day, the higher of (a) the base rate of
interest per annum established from time to time by Xxxxx Fargo at its principal
office in San
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Francisco, California, and designated as its "prime rate" as in effect on such
day, and (b) one-half of one percent (0.5%) plus the Federal Funds Rate in
effect on such day.
"Base Rate Loans" means those Loans bearing interest at the Base
Rate.
"Benefit Plan" means any employee pension benefit plan as defined
in Section 3(2) of ERISA (other than a Multiemployer Plan) in respect of which a
Person or an ERISA Affiliate is, or within the immediately preceding five (5)
years was, an "employer" as defined in Section 3(5) of ERISA.
"Borrower Debt" means (without duplication) all Indebtedness of
Borrower or any Subsidiary of Borrower (without offset or reduction in respect
of prepaid interest, restructuring fees or similar items) minus, in the case of
Nonrecourse Indebtedness of an Investment Partnership that is otherwise included
in Indebtedness of Borrower, the amount of such Indebtedness in excess of
Borrower's Share thereof.
"Borrower's Share" means, in the case of an Investment
Partnership, Borrower's percentage ownership interest therein.
"Borrowing" means a borrowing under the Facility, including a
Swing Line Borrowing.
"Business Day" means (a) with respect to any Borrowing, payment
or rate determination of LIBOR Loans, a day, other than a Saturday or Sunday, on
which Agent is open for business in San Francisco and on which dealings in
Dollars are carried on in the London interbank market, and (b) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal holiday
under the laws of the State of California, or is a day on which banking
institutions located in California are required or authorized by law or other
governmental action to close.
"Business Park Property" means a Property, zoned for industrial
or other commercial use and improved (or, in the case of Construction in
Process, being improved) with one or more buildings designed for industrial or
warehouse purposes (and office space incidental to such use), with respect to
which the net rentable square footage of such Property occupied by tenants,
divided by the number of tenants of such Property, is less than 5,000 square
feet.
"Capital Expenditures" means for any period, the sum of the
following, as applicable: (a) for Industrial Properties and Business Park
Properties, the product of (i) $0.10 (prorated if the relevant period is shorter
or longer than one year) times (ii) the sum of (A) total net rentable square
footage of such Properties then owned or leased by
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Borrower or a Subsidiary of Borrower, plus (B) Borrower's Share of net rentable
square footage of such Properties then owned or leased by any Investment
Partnership; plus (b) for Apartment Properties, the product of (i) $250
(prorated, if the relevant period is shorter or longer than one year), times
(ii) the number of units included therein (or, in the case of an Investment
Partnership, Borrower's Share of such product); and, when used with respect to
one or more individual Properties, shall have a correlative meaning.
"Capital Leases", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on the
balance sheet of that Person.
"Cash Equivalents" means (a) marketable direct obligations issued
or unconditionally guaranteed by the United States Government or issued by an
agency thereof and backed by the full faith and credit of the United States, in
each case maturing within one (1) year after the date of acquisition thereof;
(b) marketable direct obligations issued by any state of the United States of
America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two of the Rating Agencies (or, if at any
time no two of the foregoing shall be rating such obligations, then from such
other nationally recognized rating services as may be acceptable to Agent) and
not listed for possible down-grade in Credit Watch published by Standard &
Poor's; (c) commercial paper, other than commercial paper issued by Borrower or
any of its Affiliates, maturing no more than ninety (90) days after the date of
creation thereof and, at the time of acquisition, having a rating of at least
A-1 or P-1 from either Standard & Poor's or Moody's (or, if at any time neither
Standard & Poor's nor Moody's shall be rating such obligations, then the highest
rating from such other nationally recognized rating services as may be
acceptable to Agent); and (d) domestic and Eurodollar certificates of deposit or
time deposits or bankers' acceptances maturing within ninety (90) days after the
date of acquisition thereof, overnight securities repurchase agreements, or
reverse repurchase agreements secured by any of the foregoing types of
securities or debt instruments issued, in each case, by (i) any commercial bank
organized under the laws of the United States of America or any state thereof or
the District of Columbia or Canada having combined capital and surplus of not
less than Two Hundred Fifty Million Dollars ($250,000,000) or (ii) any Lender.
"Clause (a) Property" has the meaning given to such term in the
definition of "Individual UPP Value".
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"Clause (b) Property" has the meaning given to such term in the
definition of "Individual UPP Value".
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.16.
"Commission" means the Securities and Exchange Commission.
"Commitment" means, with respect to any Lender, such Lender's Pro
Rata Share of the Facility, which amount shall not exceed the principal amount
set out under such Lender's name under the heading "Loan Commitment" on the
signature pages attached to this Agreement or as set forth on an Assignment and
Assumption executed by such Lender, as assignee.
"Compliance Certificate" means a certificate in the form of
Exhibit C delivered to Agent by Borrower pursuant to Section 6.1.4 or any other
provision of this Agreement and covering Borrower's compliance with the
covenants contained in Section 8.4 and Article IX.
"Confidential Information" has the meaning given to such term in
Section 6.3.
"Construction in Process" means an Apartment Property, Industrial
Property or Business Park Property on which building improvements are (or have
been) under construction, until six (6) months after completion of construction
of such improvements, and (a) a certificate of occupancy (or its equivalent), if
required, has been issued with respect to all such improvements or (b) with
respect to rehabilitation projects to which clause (a) does not apply, such
improvements are available for immediate occupancy.
"Contaminant" means any pollutant (as that term is defined in 42
U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 CFR Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C. 6903(5)),
radioactive material, special waste, petroleum (including crude oil or any
petroleum-derived substance, waste, or breakdown or decomposition product
thereof), any constituent of any such substance or waste, including, but not
limited to, polychlorinated biphenyls and asbestos, or any other substance or
waste deleterious to the environment the release, disposal or remediation of
which is now or at any time becomes subject to regulation under any
Environmental Law.
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"Contractual Obligation," as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including, without limitation, any
restrictive covenant affecting such Person or any of its properties).
"Court Order" means any judgment, writ, injunction, decree, rule
or regulation of any court or Governmental Authority binding upon or applicable
the Person in question.
"Debt Service" means, for any period, Interest Expense for such
period plus scheduled principal amortization (i.e., excluding any balloon
payment due at maturity) for such period on all Borrower Debt.
"Default Rate" has the meaning given to such term in Section
2.4.4.
"Defaulting Lender" means any Lender which fails or refuses to
perform its obligations under this Agreement within the time period specified
for performance of such obligation or, if no time frame is specified, if such
failure or refusal continues for a period of five (5) Business Days after notice
from Agent.
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States of
America.
"Duff & Xxxxxx" means Duff & Xxxxxx Credit Rating Co.
"EBITDA" means, at any time and for any period, (a) (i) the sum
of the amounts for such period of (A) Net Income (excluding any portion of the
net income of any Effectively Controlled Investment Partnership that would
otherwise be included in determining Net Income), (B) depreciation and
amortization expense and other non-cash items deducted on the Financial
Statements in determining such Net Income, (C) Interest Expense, (D) Taxes, (E)
Borrower's Share of the net income of any Effectively Controlled Investment
Partnership and (F) without redundancy, Borrower's Share of depreciation and
amortization expense and other non-cash items, Interest Expense and Taxes
deducted on the financial statements of any Investment Partnership in
determining the net income thereof, minus (ii) the sum for such period of the
net income of any Investment Partnership that is included in Net Income, except
to the extent of the amount of cash dividends or other cash distributions
actually paid to Borrower by such Person
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during such period; and (b) minus gains (and plus losses) for such period from
extraordinary items or asset sales or write-ups or write-downs or forgiveness of
Indebtedness.
"Effectively Controlled Investment Partnership" means any
Investment Partnership that Agent, in its reasonable discretion, has determined
is effectively controlled by Borrower.
"Eligible Assignee" means (a) (i) (A) a commercial bank organized
under the laws of the United States or any state thereof; (B) a savings and loan
association or savings bank organized under the laws of the United States or any
state thereof; or (C) a commercial bank organized under the laws of any other
country or a political subdivision thereof, provided that (x) such bank is
acting through a branch or agency located in the United States, or (y) such bank
is organized under the laws of a country that is a member of the Organization
for Economic Cooperation and Development or a political subdivision of such
country; that (ii) in each case, is (A) reasonably acceptable to Agent and
(provided that no Event of Default has occurred and is continuing) Borrower, and
(B) has total assets in excess of $10,000,000,000 and a rating on its (or its
parent's) senior unsecured debt obligations of at least BBB/Baa2 by one of the
Rating Agencies; or (b) any Lender or (after the occurrence and during the
continuation of any Event of Default) Affiliate of any Lender; provided that no
Affiliate of Borrower shall be an Eligible Assignee.
"Eligible Ground Lease" means (a) a Grandfathered Ground Lease or
(b) a ground lease (i) between Borrower, as lessee, and an owner of the
underlying fee, as lessor, (ii) which may be transferred and/or assigned and/or
subleased without the consent of the lessor (or as to which the lease expressly
provides that (A) such lease may be transferred and/or assigned with the consent
of the lessor and (B) such consent shall not be unreasonably withheld or
delayed), (iii) which has a remaining term (including any renewal terms
exercisable at the sole option of the lessee) of at least thirty (30) years,
(iv) under which no material default has occurred and is continuing, (v) with
respect to which a Lien may be granted without the consent of the lessor (or
with such consent, which is not to be unreasonably withheld or delayed), (vi)
under which at any time the rent payable by the lessee thereunder for the
preceding four (4) Fiscal Quarters does not exceed twenty percent (20%) of the
sum of (A) such rent and (B) the Net Operating Income of the Property for such
four (4) Fiscal Quarters (or, if such Property has been owned by the Borrower
for less than four Fiscal Quarters, the Borrower's projection of the Net
Operating Income for the first four Fiscal Quarters of its ownership of such
Property, adjusted to reflect the actual Net Operating Income for the Fiscal
Quarters in which the Borrower owns such Property, all as approved by Agent),
(vii) which contains lender protection provisions acceptable to Agent,
including, without limitation, provisions
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to the effect that (A) the lessor shall notify any holder of a Lien on Lessee's
interest under such lease of the occurrence of any default by the lessee under
such Lease and shall afford such holder the option to cure such default, and (B)
in the event that such lease is terminated, such holder shall have the option to
enter into a new lease having terms substantially identical to those contained
in the terminated lease, and (viii) otherwise in a form generally financible
under normal and customary criteria established by long-term institutional
lenders. Upon the submission to Agent of a written request for approval of the
lender protection provisions and other terms of a proposed Eligible Ground
Lease, Agent shall respond by accepting or rejecting such proposal within ten
(10) business days following receipt of such request; provided that the
foregoing shall not limit the general applicability of Article III regarding
acceptance of a proposed Property as a UPP, including the required approval of
Requisite Lenders.
"Environmental Laws" has the meaning set forth in Section 5.1.19.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (a) any liability under Environmental Laws, or (b) damages arising
from, or costs incurred by such Governmental Authority in response to, a Release
or threatened Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" means, as to any Person, any (a) corporation
which is, becomes, or is deemed to be a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal Revenue Code)
as such Person, (b) partnership, trade or business (whether or not incorporated)
which is, becomes or is deemed to be under common control (within the meaning of
Section 414(c) of the Internal Revenue Code) with such Person, (c) other Person
that is, becomes or is deemed to be a member of the same "affiliated service
group" (as defined in Section 414(m) of the Internal Revenue Code) as such
Person, or (d) any other organization or arrangement described in Section 414(o)
of the Internal Revenue Code which is, becomes or is deemed to be required to be
aggregated pursuant to regulations issued under Section 414(o) of the Internal
Revenue Code with such Person pursuant to Section 414(o) of the Internal Revenue
Code.
"Existing Facility" has the meaning given to such term is Section
4.1.15.
"Extension Fee" has the meaning given to such term in Section
2.1.4.
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"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly provided
therein.
"Facility" means the loan facility of One Hundred Fifty Million
Dollars ($150,000,000) described in Section 2.1.1.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of the
Federal Reserve System arranged by Federal Funds brokers, as published for such
day (or, if such day is not a Business Day, for the next preceding Business Day)
by the Federal Reserve Bank of New York, or, if such rate is not so published
for any day which is a Business Day, the average of the quotations for such day
on such transactions received by Agent from three Federal Funds brokers of
recognized standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
"Financial Statements" has the meaning given to such term in
Section 6.1.2.
"Fiscal Quarter" means each three-month period ending on March
31, June 30, September 30 and December 31.
"Fiscal Year" means the fiscal year of Borrower, which shall be
the twelve (12) month period ending on the last day of December in each year.
"Fitch" means Fitch Investors Service, L.P.
"Fixed Rate Notice" means, with respect to a LIBOR Loan pursuant
to Section 2.1.2, a notice substantially in the form of Exhibit F.
"Fixed Rate Price Adjustment" has the meaning given to such term
in Section 2.4.8(c).
"Funding Date" means, with respect to any Loan, the date of the
funding of such Loan.
"Funds from Operations" means, for any period, Net Income plus
the sum of depreciation of real estate assets, amortization (except for
amortization of deferred
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financing costs) and other non-cash items deducted on the Financial Statements
in determining such Net Income, minus gains (or plus losses) on sales of real
estate, Investments (excluding Cash Equivalents) or other assets, or other
extraordinary items, as such definition of "Funds from Operations" may be
amended from time to time by the National Association of Real Estate Investment
Trusts.
"GAAP" means generally accepted accounting principles set forth
in the opinions and pronouncements of the Accounting Principles Board and the
American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant segments
of the accounting profession, which are applicable to the circumstances as of
the date of determination.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or administrative
functions of or pertaining to government.
"Grandfathered Ground Lease" means each of the ground leases
identified on Schedule 1 attached hereto as a "Grandfathered Ground Lease," as
such lease is in effect on the date hereof or as hereafter amended with the
consent of Requisite Lenders.
"Gross Asset Value" means, as at any date of determination, the
sum of the following (without duplication of any item, and excluding from Gross
Asset Value that portion thereof which exceeds any limit thereon imposed under
Section 9.8):
(a) cash and Cash Equivalents of the Borrower or any Subsidiary
(but, in each case, excluding any tenant deposits or other amounts the use of
which is restricted in such a way as to make it unavailable for the paying of
such Person's general obligations in the ordinary course of business);
(b) in the case of Apartment Properties, Industrial Properties or
Business Park Properties other than Construction in Process, an amount equal to
(i) if such Property has been owned by Borrower, a Subsidiary or an Effectively
Controlled Investment Partnership for at least one Fiscal Quarter, (A) the
aggregate Net Operating Income of such Property (or in the case of Property
owned by an Effectively Controlled Investment Partnership, Borrower's Share of
such aggregate Net Operating Income) for the most recently ended Fiscal Quarter,
times (B) four (4), divided by (C) (1) 0.09, if such Property is an Apartment
Property not described in the following clause (2); (2) 0.075, if such Property
is an Apartment Property the construction, acquisition or rehabilitation of
which has been and continues to be financed by the issuance of debt Securities
the
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interest on which is exempt from federal income taxation; (3) 0.10, if such
Property is an Industrial Property; and (4) 0.105, if such Property is a
Business Park Property; or (ii) if such Property has not been owned by Borrower,
such Subsidiary or such Effectively Controlled Investment Partnership for at
least one Fiscal Quarter, the Acquisition Price of such Property (or, in the
case of a Property owned by an Effectively Controlled Investment Partnership,
Borrower's Share thereof).
(c) in the case of Non-Core Properties owned by Borrower or any
Subsidiary, the undepreciated book value thereof, as reflected in Borrower's
books and records maintained in accordance with GAAP;
(d) in the case of Land, zero; and
(e) (i) the book value of Construction in Process owned by
Borrower or any Subsidiary, as reflected in Borrower's books and records
maintained in accordance with GAAP, plus (ii) Borrower's Share of the book value
of Construction in Process of an Effectively Controlled Investment Partnership
as reflected in such Effectively Controlled Investment Partnership's books and
records maintained in accordance with GAAP.
"Guarantor Subsidiary" means any Subsidiary that is wholly-owned
by Borrower and the charter documents of which the Requisite Lenders have
approved in accordance with Section 3.1, which (i) owns one or more Unencumbered
Pool Properties, and (ii) has executed and delivered a Guaranty that is, at the
time of determination, in full force and effect.
"Guaranty" means a guaranty of payment and performance executed
by a Guarantor Subsidiary in favor of Agent and Lenders in substantially the
form of Exhibit G hereto.
"Indebtedness", as applied to any Person (and without
duplication), means (a) the principal amount of all indebtedness of such Person
for borrowed money, (b) the principal amount of all indebtedness of such Person
evidenced by Securities or other similar instruments, (c) all reimbursement
obligations and other liabilities of such Person with respect to letters of
credit or banker's acceptances issued for such Person's account, (d) all
obligations of such Person to pay the deferred purchase price of Property or
services (but excluding deferred compensation owed to Borrower's employees), (e)
that portion of such Person's obligations in respect of Capital Leases that
would be reported as principal under GAAP, (f) all Accommodation Obligations of
such Person, (g) all indebtedness, obligations or other liabilities of such
Person or others secured by a Lien on any asset of such Person, whether or not
such indebtedness, obligations or liabilities are assumed by, or are a personal
liability of, such Person (including, without limitation, the
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principal amount of any indebtedness secured by a Lien encumbering any Property
subject to which such Person has taken title to such Property but excluding any
taxes, assessments or similar obligations encumbering any Property), (h) all
non-contingent net indebtedness, obligations or other liabilities (other than
interest expense liability) in respect of Interest Rate Contracts and foreign
currency exchange agreements, and (i) Borrower's Share of all Indebtedness of
any Effectively Controlled Investment Partnership to the extent not otherwise
included in Indebtedness. Indebtedness shall not include accrued ordinary
operating expenses payable on a current basis.
"Individual Occupancy Rate" means, with respect to any Property,
at any time, the ratio (expressed as a percentage), as of such date, of (a) if
such Property is not an Apartment Property, (i) the net rentable square footage
of such Property occupied by tenants paying rent pursuant to binding leases as
to which no monetary default has occurred and is continuing, to (ii) the total
net rentable square footage comprising such Property; and (b) if such Property
is an Apartment Property, (i) the total number of apartment units in such
Apartment Property that are occupied by tenants paying rent pursuant to binding
leases as to which not monetary default has occurred and is continuing, to (ii)
the total number of apartment units comprising such Apartment Property.
"Individual UPP Value" means, with respect to any Unencumbered
Pool Property or proposed Unencumbered Pool Property:
(a) if such Property has been owned by Borrower or the relevant
Guarantor Subsidiary for at least one Fiscal Quarter and the Individual
Occupancy Rate of such Property has been 85% or more for each of the three
consecutive months then most recently ended ("Clause (a) Property"), an amount
equal to (i) the aggregate Net Operating Income of such Property for the most
recently ended Fiscal Quarter, times (ii) four (4), divided by (iii) (A) 0.09,
if such Property is an Apartment Property; (B) 0.10 if such Property is an
Industrial Property; and (C) 0.105 if such Property is a Business Park Property;
(b) if such Property has been owned by Borrower or the relevant
Guarantor Subsidiary for at least one Fiscal Quarter and the Individual
Occupancy Rate of such Property has been less than 85% for any of the three
consecutive months then most recently ended ("Clause (b) Property"), an amount
equal the greater of (i) eight-five percent (85%) of such Property's book value,
as reflected in Borrower's books and records maintained in accordance with GAAP,
or (ii) the amount determined with respect to such Property in accordance with
the formula set forth in the preceding paragraph (a);
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(c) if such Property is Construction in Process, seventy-five
percent (75%) of the book value thereof; and
(d) if such Property is not Construction in Process and has not
been owned by Borrower or the relevant Guarantor Subsidiary for at least one
Fiscal Quarter, the Acquisition Price of such Property;
provided that, for any Grandfathered Ground Lease, "Individual UPP Value" shall
mean an amount equal to seventy-seven percent (77%) of the amount determined in
accordance with the preceding clauses (a) through (d), as applicable.
"Industrial Property" means a Property, zoned for industrial or
other commercial use and improved (or, in the case of Construction in Process,
being improved) with one or more buildings designed for industrial or warehouse
purposes (and office space incidental to such use), with respect to which the
net rentable square footage of such Property occupied by tenants, divided by the
number of tenants of such Property, is equal to or greater than 5,000 square
feet.
"Intangible Assets" means all assets that would be classified as
intangible assets under GAAP, including, without limitation, goodwill, patents,
trademarks, trade names, copyrights and franchises, treasury stock held by
Borrower or any consolidated Subsidiary of Borrower, and deferred charges
(including but not limited to unamortized debt discount and expense,
organization expenses, experimental and development (i.e., "R&D") expenses, but
excluding prepaid expenses).
"Interest Expense" means, for any period, the total of the
following in respect of Borrower Debt (without duplication): (a) total interest
expense for such period, determined in accordance with GAAP, plus (b) the total
of all interest capitalized during such period, other than capitalized interest
covered by an interest reserve established under a loan facility, plus (c) to
the extent not included in interest expense under GAAP, all commissions,
discounts and other fees and charges owed with respect to letters of credit, net
costs under Interest Rate Contracts, and Unused Facility Fees payable to
Lenders.
"Interest Period" means, relative to any LIBOR Loans comprising
part of the same Borrowing, the period beginning on (and including) the date on
which such LIBOR Loans are made as, or converted into, LIBOR Loans, and ending
on the last day of the period selected by Borrower pursuant to the provisions
below and, thereafter (to the extent applicable), each subsequent period
commencing on the last day of the immediately preceding Interest Period and
ending on the last day of the period selected by Borrower pursuant to the
provisions below. The duration of each such Interest Period
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shall be one (1), two (2), three (3) or six (6) months as Borrower may select in
its relevant Notice of Borrowing pursuant to Section 2.1.2; provided, however,
that:
(a) if such Interest Period would otherwise end on a day which is
not a Business Day, such Interest Period shall end on the next following
Business Day; provided, however, that, if such extension would cause the
Interest Period to end in the next following calendar month, the Interest Period
shall end on the next preceding Business Day;
(b) if such Interest Period begins on a day of an initial
calendar month for which there is no numerically corresponding day in the
calendar month that succeeds such initial calendar month by the number of months
equal to the number of months in such Interest Period, such Interest Period
shall end on the last Business Day of such succeeding calendar month; and
(c) no Interest Period may end later than the then applicable
Termination Date.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of 1986,
as amended from time to time hereafter, and any successor statute.
"Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not arise
from sales of goods or services to that Person in the ordinary course of
business.
"Investment Mortgages" mean first-lien mortgages securing
indebtedness directly or indirectly owned by Borrower or any Subsidiary of
Borrower, including senior certificates of interest in real estate mortgage
investment conduits.
"Investment Partnership" means any Partnership in which Borrower
or any Subsidiary of Borrower has an ownership interest, whose financial results
are not consolidated with those of Borrower under GAAP.
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"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Land" means unimproved real estate, including future phases of a
partially completed project, owned or leased for the purpose of future
development of building improvements. For purposes of the foregoing definition,
"unimproved" shall mean Land on which (a) no building permit has been issued, or
(b) if a building permit has been issued the construction of building
improvements has not commenced or, if commenced, has been discontinued for a
continuous period longer than sixty (60) days prior to completion.
"Lender Taxes" has the meaning given to such term in Section
2.4.7.
"Leverage Ratio" means, at any time, the ratio of Total
Liabilities to Gross Asset Value.
"Lenders" means Xxxxx Fargo and any other bank, finance company,
insurance or other financial institution which is or becomes a party to this
Agreement by execution of a counterpart signature page hereto or an Assignment
and Assumption, as a permitted assignee. At all times that there are no Lenders
other than Xxxxx Fargo, the terms "Lender" and "Lenders" means Xxxxx Fargo in
its individual capacity. With respect to matters requiring the consent to or
approval of all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders".
"Liabilities and Costs" means all claims, judgments, liabilities,
obligations, responsibilities, losses, damages (including lost profits),
punitive or treble damages, costs, disbursements and expenses (including,
without limitation, reasonable attorneys', experts' and consulting fees and
costs of investigation and feasibility studies), fines, penalties and monetary
sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR Loan
included in any Borrowing, the per annum rate (reserve adjusted as hereinbelow
provided) of interest quoted by Agent, rounded upwards, if necessary, to the
nearest one-sixteenth of one percent (0.0625%) at which Dollar deposits in
immediately available funds are offered by Agent to leading banks in the
Eurodollar interbank market at approximately 9:00 a.m. (Pacific Coast time) two
(2) Business Days prior to the beginning of such Interest Period, for delivery
on the first day of such Interest Period for a period approximately equal to
such Interest Period and in an amount equal or
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comparable to the LIBOR Loan to which such Interest Period relates. The
foregoing rate of interest shall be reserve adjusted by dividing LIBOR by one
(1.00) minus the LIBOR Reserve Percentage, with such quotient to be rounded
upward to the nearest whole multiple of one-hundredth of one percent (0.01%).
All references in this Agreement or other Loan Documents to LIBOR shall mean and
include the aforesaid reserve adjustment.
"LIBOR Loan" means a Loan bearing interest, at all times during
an Interest Period applicable to such Loan, at a fixed rate of interest
determined by reference to LIBOR.
"LIBOR Office" means, relative to any Lender, the office of such
Lender designated as such on the counterpart signature pages hereto or such
other office of a Lender as designated from time to time by notice from such
Lender to Agent, whether or not outside the United States, which shall be making
or maintaining LIBOR Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest Period
for LIBOR Loans made by any Lender, the reserve percentage (expressed as a
decimal) equal to the actual aggregate reserve requirements (including all
basic, emergency, supplemental, marginal and other reserves and taking into
account any transactional adjustments or other scheduled changes in reserve
requirements) announced within Agent as the reserve percentage applicable to
Agent as specified under regulations issued from time to time by the Federal
Reserve Board. The LIBOR Reserve Percentage shall be based on Regulation D of
the Federal Reserve Board or other regulations from time to time in effect
concerning reserves for "Eurocurrency Liabilities" from related institutions as
though Agent were in a net borrowing position.
"Lien" means any mortgage, deed of trust, pledge, hypothecation,
assignment, deposit arrangement, security interest, encumbrance (including, but
not limited to, easements, rights-of-way, zoning restrictions and the like),
lien (statutory or other), preference, priority or other security agreement or
preferential arrangement of any kind or nature whatsoever, including without
limitation any conditional sale or other title retention agreement, the interest
of a lessor under a Capital Lease, any financing lease having substantially the
same economic effect as any of the foregoing, and the filing of any financing
statement or document having similar effect (other than a financing statement
filed by a "true" lessor pursuant to Section 9408 of the Uniform Commercial
Code) naming the owner of the asset to which such Lien relates as debtor, under
the Uniform Commercial Code or other comparable law of any jurisdiction.
"Loan Account" has the meaning given to such term in Section 2.3.
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"Loan Availability" means, at any time, the lesser of (a) an
amount equal to the positive difference, if any, of (i) 57.14286% of the
Unencumbered Pool Value, less (ii) Unsecured Liabilities other than the
outstanding principal of the Loans; and (b) the amount of the Facility from time
to time.
"Loan Documents" means this Agreement, the Loan Notes and all
other agreements, instruments and documents (together with amendments and
supplements thereto and replacements thereof) now or hereafter executed by
Borrower, Guarantor Subsidiary or any other Person that evidence or guarantee
the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans in
the aggregate face amount of One Hundred Fifty Million Dollars ($150,000,000)
executed by Borrower in favor of Lenders, as they may be amended, supplemented,
replaced or modified from time to time. The initial Loan Notes, and any
replacements thereof, shall be substantially in the form of Exhibit D.
"Loans" means the loans made pursuant to the Facility (including,
except where the context otherwise requires, Swing Line Borrowings), as well as
each Loan, initially made under the Swing Line, that is deemed converted into a
Loan pursuant to Section 11.3.3; provided that (a) if any such Loan or Loans (or
portions thereof) is/are combined or subdivided pursuant to Section 2.1.2(c) or
by automatic conversion of LIBOR Loan into a Base Rate Loan, the term "Loan"
means such combination or each such subdivided portion, as the case may be, and
(b) where the context so requires, the term "Loan" means, with respect to a
particular Lender, the advance made (or required to be made) by such Lender in
the amount of such Lender's Pro Rata Share of a Borrowing under the Facility.
"Major Agreements" means, at any time, (a) each Major UPP Lease
and (b) each Eligible Ground Lease affecting an Unencumbered Pool Property.
"Major UPP Lease" means any UPP Lease of fifty percent (50%) or
more of the net rentable space of any Unencumbered Pool Property.
"Material Adverse Effect" means, with respect to a Person, a
material adverse effect upon the condition (financial or otherwise), operations,
performance, properties or prospects of such Person. The phrase "has a Material
Adverse Effect" or "will result in a Material Adverse Effect" or words
substantially similar thereto shall in all cases be intended to mean "has
resulted, or will or could reasonably be anticipated to result, in a Material
Adverse Effect", and the phrase "has no (or does not have a) Material Adverse
Effect" or "will not result in a Material Adverse Effect" or words substantially
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similar thereto shall in all cases be intended to mean "does not or will not or
could not reasonably be anticipated to result in a Material Adverse Effect".
"Moody's" means Xxxxx'x Investors Service.
"Multiemployer Plan" means an employee benefit plan defined in
Section 4001(a)(3) of ERISA which is, or within the immediately preceding six
(6) years was, contributed to by a Person or an ERISA Affiliate of such Person.
"Negative Pledge" means, with respect to a particular asset, that
it is not subject to any agreement (other than this Agreement or any other Loan
Document) that prohibits, restricts or conditions the creation of any Lien
thereon as security for the obligations of any Person under the Loan Documents;
provided, however, that an agreement that establishes a maximum ratio of
unsecured debt to unencumbered assets, or of secured debt to total assets, or
that otherwise conditions a Person's ability to encumber its assets upon the
maintenance of one or more specified ratios that limit such person's ability to
encumber its assets, shall not constitute a "Negative Pledge" for purposes of
the Loan Documents.
"Net Income" means, for any period, the net earnings (or loss) of
Borrower calculated for such period on a consolidated basis in conformity with
GAAP (i.e., after Taxes).
"Net Offering Proceeds" means (a) all cash proceeds received by
Borrower as a result of the sale of common, preferred or other classes of stock
in Borrower (if and only to the extent reflected in stockholders' equity on the
consolidated balance sheet of Borrower prepared in accordance with GAAP) less
customary costs and discounts of issuance paid by Borrower, plus (b) all cash
and the fair market value of the net equity of all properties contributed to
Borrower by one or more Persons, or other value realized by Borrower, in
exchange for equity Securities of Borrower (including, without limitation, upon
any conversion of any equity or debt Security of Borrower or any exercise of any
option, warrant or other right to acquire equity Securities of Borrower).
"Net Operating Income" means, with respect to any Property for
any period, (a) the net operating income of such Property for such period
determined in accordance with GAAP; minus (b) an amount equal to Capital
Expenditures with respect to such Property for such period. Notwithstanding the
foregoing, Net Operating Income may include collected lease termination charges
(amortized monthly over the remaining term of the lease) and delinquent rent
recoveries so long as (x) any such charge or recovery does not relate to a date
earlier than the commencement of the period for which Net Operating Income is
determined and (y) no such recovery shall be made for any
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month during or after which the space to which such charge or recovery relates
has been re-leased to another Person and such Person has an obligation to pay
rent for such month(s).
"Net Worth" means, at any time, Borrower's stockholders' equity,
as shown on its Financial Statements prepared in accordance with GAAP, minus
minority interests in Subsidiaries of Borrower (to the extent otherwise included
in Borrower's stockholders' equity), plus cumulative net additions to
depreciation and amortization reflected in statements of operation for periods
ending after December 31, 1997, minus Intangible Assets.
"Non-Core Properties" means any Property other than cash or Cash
Equivalents, an Apartment Property, an Industrial Property, a Business Park
Property or Land.
"Non Pro Rata Loan" means a Loan with respect to which fewer than
all Lenders have funded their respective Pro Rata Shares of such Loans and the
failure of the non-funding Lender or Lenders to fund its or their respective Pro
Rata Shares of such Loan constitutes a breach of this Agreement.
"Nonrecourse Indebtedness" means Indebtedness (i) with respect to
which recourse for payment is contractually limited to specific assets
encumbered by a Lien securing such Indebtedness, or (ii) of an Investment
Partnership of which Borrower is a general partner and in respect of which the
creditor has agreed in writing that Borrower shall have no personal liability
therefor.
"Notice of Borrowing" means, with respect to a proposed Borrowing
pursuant to Section 2.1.2, a notice substantially in the form of Exhibit E.
"Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, any Lender or any Person entitled to indemnification
pursuant to Section 12.2, or any of their respective successors, transferees or
assigns, of every type and description, whether or not evidenced by any note,
guaranty or other instrument, arising under or in connection with this Agreement
or any other Loan Document or the separate agreement referred to in Section
4.1.11, whether or not for the payment of money, whether direct or indirect
(including those acquired by assignment), absolute or contingent, due or to
become due, now existing or hereafter arising and however acquired. The term
includes, without limitation, all interest, charges, expenses, fees, reasonable
attorneys' fees and disbursements, reasonable fees and disbursements of expert
witnesses and other consultants, and any other sum now or hereinafter chargeable
to Borrower under or in connection with this Agreement or any other Loan
Document.
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"Officer's Certificate" means a certificate signed by a specified
officer of a Person certifying as to the matters set forth therein.
"Partnership" means any general or limited partnership, joint
venture, limited liability company or limited liability partnership.
"Partnership Agreement" means, with respect to any Partnership,
on a collective basis, its partnership agreement, its agreement of limited
partnership agreement and certificate of limited partnership (if any), its
operating or management agreement and articles or certificate of organization,
or other organizational or governance document(s).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted Investments" means Investments in Land, Securities,
Investment Partnerships, Investment Mortgages and Non-Core Properties, but only
to the extent permitted in Section 9.8.
"Permitted Liens" means:
(a) Liens (other than Environmental Liens and any Lien imposed
under ERISA) for taxes, assessments or charges of any Governmental Authority or
claims not yet due;
(b) Liens (other than any Lien imposed under ERISA) incurred or
deposits made in the ordinary course of business (including without limitation
surety bonds and appeal bonds) in connection with workers' compensation,
unemployment insurance and other types of social security benefits or to secure
the performance of tenders, bids, leases, contracts (other than for the
repayment of Indebtedness) or statutory obligations;
(c) any laws, ordinances, easements, rights of way, restrictions,
exemptions, reservations, conditions, limitations, covenants or other matters
that, in the aggregate, do not (i) materially interfere with the occupation, use
and enjoyment of the Property or other assets encumbered thereby, by the Person
owning such Property or other assets, in the normal course of its business or
(ii) materially impair the value of the Property subject thereto; and
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(d) Liens imposed by laws, such as mechanics' liens and other
similar liens arising in the ordinary course of business, which secure payment
of obligations not more than thirty (30) days past due.
"Person" means any natural person, employee, corporation, limited
partnership, general partnership, joint stock company, limited liability
company, joint venture, association, company, trust, bank, trust company, land
trust, business trust or other organization, whether or not a legal entity, or
any other non-governmental entity, or any Governmental Authority.
"Plan" means an employee benefit plan defined in Section 3(3) of
ERISA (other than a Multiemployer Plan) in respect of which Borrower or an ERISA
Affiliate of Borrower, as applicable, is an "employer" as defined in Section
3(5) of ERISA.
"Price Adjustment Date" has the meaning given to such term in
Section 2.4.8(c).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of the Lenders' Commitments.
"Proceedings" means, collectively, all actions, suits,
arbitrations and proceedings, at law, in equity or otherwise, before, and
investigations commenced or threatened by or before, any court or Governmental
Authority with respect to a Person.
"Property" means, as to any Person, any real or personal
property, building, facility, structure, equipment or unit, or other asset owned
and operated by such Person in the ordinary course of its business.
"Quarterly Operating Report" has the meaning given to such term
in Section 6.1.1.
"Rating Agency" means each of Standard & Poor's, Moody's, Fitch
and Xxxx & Xxxxxx, and such other nationally recognized rating service or
services as may be mutually agreed upon by Borrower and Agent.
"Regulations G, T, U and X" mean such Regulations of the Federal
Reserve Board as in effect from time to time.
"Release" means the release, spill, emission, leaking, pumping,
injection, deposit, disposal, discharge, dispersal, leaching or migration into
the indoor or outdoor
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environment or into or out of any property, including the movement of
Contaminants through or in the air, soil, surface water, groundwater or
property.
"Remedial Action" means any action required by applicable
Environmental Laws to (a) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (b) prevent the Release or
threat of Release or minimize the further Release of Contaminants so they do not
migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (c) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in Section
4043(b) of ERISA, other than an event for which the thirty (30) day notice
requirement is waived by regulations.
"Requirements of Law" mean, as to any Person, the charter and
by-laws, Partnership Agreement or other organizational or governing documents of
such Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person or
any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" mean, collectively, Lenders whose Pro Rata
Shares, in the aggregate, are at least sixty-six and two-thirds percent
(66-2/3%), provided that, in determining such percentage at any given time, all
then existing Defaulting Lenders will be disregarded and excluded and the Pro
Rata Shares of Lenders shall be redetermined, for voting purposes only, to
exclude the Pro Rata Shares of such Defaulting Lenders.
"Secretary's Certificate" has the meaning given to such term in
Section 4.1.
"Secured Borrower Debt" means all Borrower Debt that is secured
by a Lien on (a) any real property or (b) any equity interest in a Subsidiary or
Investment Partnership.
"Securities" means any stock, shares, voting trust certificates,
bonds, debentures, notes or other evidences of indebtedness, secured or
unsecured, convertible, subordinated or otherwise, or in general any instruments
commonly known as "securities", or any certificates of interest, shares, or
participations in temporary or interim certificates for the purchase or
acquisition of, or any right to subscribe to,
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purchase or acquire any of the foregoing, but shall not include any evidence of
the Obligations, provided that Securities shall not include Cash Equivalents,
Investment Mortgages or permitted equity interests in wholly-owned Subsidiaries
or in Investment Partnerships.
"Securities Act" means the Securities Act of 1933, as amended to
the date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Senior Loans" has the meaning given to such term in Section
11.4.2.
"September 30, 1997 Financials" has the meaning given to such
term in Section 5.6.
"Solvent" means, as to any Person at the time of determination,
that such Person (a) owns property the value of which (both at fair valuation
and at present fair salable value) is greater than the amount required to pay
all of such Person's liabilities (including contingent liabilities and debts);
(b) is able to pay all of its debts as such debts mature; and (c) has capital
sufficient to carry on its business and transactions and all business and
transactions in which it is about to engage.
"Standard & Poor's" means Standard & Poor's Rating Services.
"Subsidiary" of a Person means (a) any corporation, Partnership,
trust or other non-Partnership entity of which a majority of the stock (or
equivalent ownership or controlling interest) having voting power to elect a
majority of the Board of Directors (if a corporation) or to select the trustee
or equivalent controlling interest, shall, at the time such reference becomes
operative, be directly or indirectly owned or controlled by such Person, and (b)
any other Person in which such Person has an ownership interest the financial
results of which are consolidated with the financial results of such Person
under GAAP.
"Swing Line" has the meaning given to such term in Section
2.1.1(b).
"Swing Line Borrowing" means a Borrowing effected under the Swing
Line.
"Swing Line Lender" means Agent acting in its capacity as a
Lender hereunder.
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"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
"Termination Date" has the meaning given to such term in Section
2.1.4.
"Termination Event" means (a) any Reportable Event, (b) the
withdrawal of a Person, or an ERISA Affiliate from a Benefit Plan during a plan
year in which it was a "substantial employer" as defined in Section 4001(a)(2)
of ERISA, (c) the occurrence of an obligation arising under Section 4041 of
ERISA of a Person or an ERISA Affiliate of such Person to provide affected
parties with a written notice of an intent to terminate a Benefit Plan in a
distress termination described in Section 4041(c) of ERISA, (d) the institution
by the PBGC of proceedings to terminate any Benefit Plan under Section 4042 of
ERISA, (e) any event or condition which constitutes grounds under Section 4042
of ERISA for the appointment of a trustee to administer a Benefit Plan, (f) the
partial or complete withdrawal of such Person or any ERISA Affiliate of such
Person from a Multiemployer Plan, or (vii) the adoption of an amendment by any
Person or any ERISA Affiliate of such Person to terminate any Benefit Plan.
"Termination of Designation" has the meaning given to such term
in Section 3.2.
"Total Liabilities" of any Person means (a) all Indebtedness of
such Person, whether or not such Indebtedness would be included as a liability
on the balance sheet of such Person in accordance with GAAP, plus (b) all other
liabilities of every nature and kind of such Person that would be included as
liabilities on the balance sheet of such Person in accordance with GAAP, except,
however, liabilities with respect to tenant deposits to the extent that such
deposits (i) are in the possession of the relevant Person and (ii) are
subtracted from cash and Cash Equivalents held by such relevant Person for
purposes of determining either Gross Asset Value or Unencumbered Pool Value.
"Unencumbered NOI" means, for any period, the aggregate Net
Operating Income of all Unencumbered Properties for such period.
"Unencumbered Pool" means, collectively, the Unencumbered Pool
Properties.
"Unencumbered Pool Certificate" has the meaning given to such
term in Section 6.1.6.
"Unencumbered Pool Properties" means the Unencumbered Properties
listed on Schedule 1, as such Schedule 1 may be amended from time to time to
reflect the
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addition and deletion of Unencumbered Pool Properties pursuant to Article III;
provided, in each case, that such Property has not suffered (a) damage rendering
untenantable more than fifty percent (50%) (determined as if such Property had
not been damaged) of its (i) net rentable square footage (if such Property is
not an Apartment Property), or (ii) total units (if such Property is an
Apartment Property), (b) contamination due to one or more Releases of
Contaminants such that, in the reasonable determination of Agent, Agent would
decline to accept such Property into the Unencumbered Pool if (i) such Property
were not already an Unencumbered Pool Property and (ii) Borrower were to request
that such Property be designated an Unencumbered Pool Property, or (c) a claim
creating a material title defect; and provided further that (x) any Unencumbered
Pool Property that is (i) Construction in Process for a portion of any period of
eighteen consecutive months and (ii) Clause (b) Property for the remainder of
such period, shall cease to constitute an Unencumbered Pool Property on the last
day of such eighteen-month period; and (y) subject to the preceding clause (x),
any Unencumbered Pool Property that is Clause (b) Property for a period of
twelve consecutive months shall cease to constitute an Unencumbered Pool
Property on the last day of such twelve-month period.
"Unencumbered Pool Value" means, at any time, an amount equal to
the sum of (a) cash and Cash Equivalents owned by Borrower or any Guarantor
Subsidiary as of such date (but excluding any tenant deposits or other amounts
the use of which is restricted in such a way as to make it unavailable for the
paying of such Person's general obligations in the ordinary course of business),
provided that such cash or Cash Equivalents are not subject to any Lien or to
any Negative Pledge, plus (b) an amount equal to the sum of the Individual UPP
Values of the Unencumbered Pool Properties; provided that in determining the
Unencumbered Pool Value at any time, the Unencumbered Pool Value shall be
adjusted so that, notwithstanding the Individual UPP Values of Eligible Ground
Leases, Clause (b) Properties and Construction in Process constituting
Unencumbered Pool Properties, (x) no more than ten percent (10%) of the
Unencumbered Pool Value is attributable to Eligible Ground Leases; (y) no more
than twenty-five percent (25%) of the Unencumbered Pool Value is attributable to
Clause (b) Properties and Construction in Process; and (z) no more than fifteen
percent (15%) of the Unencumbered Pool Value is attributable to Construction in
Process.
"Unencumbered Property" means any Apartment Property, Industrial
Property or Business Park Property that is wholly-owned or leased (under an
Eligible Ground Lease) by Borrower or a Guarantor Subsidiary provided that
neither such real property, nor any interest in such Guarantor Subsidiary, is
subject to any Lien (other than Permitted Liens) or to any Negative Pledge.
"Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default, except that no
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"Unmatured Event of Default" shall exist by reason of Borrower's failure to pay,
at any time prior to the seventh day of the month, interest becoming due in
respect of the Loans on the first Business Day of such calendar month.
"Unsecured Interest Expense" means, for any period, (a) total
Interest Expense for such period, less (b) Interest Expense attributable to any
Secured Borrower Debt for such period.
"Unsecured Liabilities" means, at any time, (a) Total Liabilities
of Borrower and its Subsidiaries, less (b) Secured Borrower Debt.
"Unused Amount" has the meaning given to such term in Section
2.5.1.
"Unused Facility Fee" has the meaning given to such term in
Section 2.5.1.
"UPP" when used herein refers to an Unencumbered Pool Property.
"UPP Lease" means a tenant lease of an Unencumbered Pool
Property.
1.2 Computation of Time Periods. In this Agreement, in the computation
of periods of time from a specified date to a later specified date, unless
otherwise specified, the word "from" means "from and including" and the words
"to" and "until" each mean "to and including." Periods of days referred to in
this Agreement shall be counted in calendar days unless Business Days are
expressly prescribed.
1.3 Terms.
1.3.1 Any accounting terms used in this Agreement which are not
specifically defined shall have the meanings customarily given them in
accordance with GAAP. All references herein to Borrower or any other Person in
connection with any financial or related covenant, representation or calculation
shall be understood to mean and refer to Borrower or such other Person, as the
case may be, on a consolidated basis in accordance with GAAP, unless otherwise
specifically provided and subject in all events to any adjustments herein set
forth.
1.3.2 Any time the phrase "to the best of Borrower's knowledge"
or a phrase similar thereto is used herein, it means: "to the actual knowledge
of the then executive or senior officers of Borrower, after reasonable inquiry
of those agents, employees or contractors of Borrower or any of its Subsidiaries
who could reasonably be anticipated to have knowledge with respect to the
subject matter or circumstances in question and after review of those documents
or instruments which could reasonably be anticipated to be relevant to the
subject matter or circumstances in question."
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1.3.3 In each case where the consent or approval of Agent, all
Lenders and/or Requisite Lenders is required, or their non-obligatory action is
requested by Borrower, such consent, approval or action shall be in the sole and
absolute discretion of Agent and, as applicable, each Lender, unless otherwise
specifically indicated.
1.3.4 Any time the word "or" is used herein, unless the context
otherwise clearly requires, it has the inclusive meaning represented by the
phrase "and/or". The words "hereof", "herein", "hereby", "hereunder" and similar
terms refer to this Agreement as a whole and not to any particular provision of
this Agreement. Article, section, subsection, clause, exhibit and schedule
references are to this Agreement unless otherwise specified. Any reference in
this Agreement to this Agreement or to any other Loan Document includes any and
all amendments, modifications, supplements, renewals or restatements thereto or
thereof, as applicable.
ARTICLE II
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LOANS
-----
2.1 Loan Advances and Repayment.
2.1.1 Loan Availability.
(a) Subject to the terms and conditions set forth in this
Agreement, Lenders hereby agree to make Loans to Borrower from time to
time during the period from the Closing Date to the Business Day next
preceding the Termination Date, in an aggregate outstanding principal
amount (including outstanding Swing Line Borrowing) which shall not
exceed Loan Availability at any time; provided that if any Swing Line
Borrowings are outstanding on the Funding Date of any Loan other than a
Swing Line Borrowing, (i) such Loan shall be in an amount equal to at
least the aggregate principal amount of all outstanding Swing Line
Borrowings, and (ii) the proceeds thereof shall be applied first to the
payment of such outstanding Swing Line Borrowings. Except as provided in
Section 2.1.1(b) with respect to Swing Line Borrowings, all Loans under
this Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being understood
that no Lender shall be responsible for any failure by any other Lender
to perform its obligation to make a Loan hereunder and that the
Commitment of any Lender shall not be increased or decreased as a result
of the failure by any other Lender to perform its obligation to make a
Loan. Loans may be voluntarily prepaid pursuant to Section 2.6.1 and,
subject to the provisions of this Agreement, any amounts so prepaid may
be
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reborrowed under this Section 2.1.1. The principal balance of the Loans
shall be payable in full on the Termination Date. The Loans will be
evidenced by the Loan Notes.
(b) (i) There is hereby established a sub-facility (the "Swing
Line"), in the amount of Twenty Million Dollars ($20,000,000), under and
as a part of the Facility. The Swing Line shall not for any purpose be
an addition to the Commitments or the Facility, but shall be a
sub-feature thereunder. All Loans requested to be made pursuant to the
Swing Line shall be subject to the same terms and conditions applicable
to other Borrowings under the Facility, and all outstanding Swing Line
Borrowings shall likewise be subject to the same terms and conditions
applicable to other outstanding Borrowings under the Facility, except as
expressly provided in (A) the following Section 2.1.1(b)(ii), (B)
Section 2.1.2(a)(iii) with respect to the number of Borrowings permitted
in any calendar month, the time within which the Notice of Borrowing for
Swing Line Borrowings must be given, the minimum and incremental amounts
applicable to Swing Line Borrowings and the interest rate applicable
thereto, (C) Section 2.6.1 with respect to prepayments of Swing Line
Borrowings, and (D) Section 11.3.3.
(ii) The Swing Line Lender hereby agrees to make advances to
Borrower from time to time during the period from the Closing Date to
the Business Day next preceding the Termination Date, in an aggregate
principal amount not exceeding at any one time the lesser of (A) (1) the
Loan Availability, less (2) the outstanding principal of all Loans other
than Swing Line Borrowings, and (B) Twenty Million Dollars
($20,000,000). The Swing Line Lender's obligation to fund Swing Line
Borrowings shall be unaffected by its making of any other Loans,
notwithstanding that the sum of the Swing Line Borrowings plus the Swing
Line Lender's Pro Rata Share of the aggregate principal amount of the
outstanding Loans other than Swing Line Borrowings may exceed the Swing
Line Lender's Commitment.
(c) If at any time the outstanding principal balance of the
Loans exceeds the Loan Availability, as a result of a reduction in the
Unencumbered Pool Value, the failure of any Property previously
constituting an Unencumbered Pool Property to qualify as such, the
incurrence of additional Unsecured Liabilities or for any other reason
whatsoever, Borrower shall, not later than thirty (30) days following
such occurrence, (i) reduce the Unsecured Liabilities in such amounts
and/or (ii) identify to Agent such additional Unencumbered Pool
Property(-ies) as Agent may approve and Requisite Lenders may accept
under Section 3.1 as are necessary so that the outstanding principal
balance of the Loans does not exceed the Loan Availability. Failure by
Borrower to have complied with the foregoing in
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a timely manner shall constitute an Event of Default without further
notice or grace period hereunder. No further Borrowings, or Termination
of Designation with respect to any Unencumbered Pool Property, shall be
permitted so long as such excess borrowing condition shall continue to
exist. Nothing in this subparagraph (c) shall excuse Borrower's
compliance with all terms, conditions, covenants and other obligations
imposed upon it under the Loan Documents during the period of such
excess borrowing, nor in any manner condition or impair Agent's or
Lenders' rights thereunder in respect of any such breach thereof by
Borrower.
2.1.2 Notice of Borrowing.
(a) (i) Whenever Borrower desires to borrow under this Section
2.1, but in no event more than seven (7) times during any one (1)
calendar month, Borrower shall give Agent, at Xxxxx Fargo Real Estate
Group Disbursement Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx Xxxxxxx,
Xxxxxxxxxx 00000, with a copy to: Xxxxx Fargo Bank, Real Estate Group,
0000 Xxxx Xxxxxx, Xxxxx 000, Xxxxxx, Xxxxxxxxxx 00000, Attention:
Relationship Manager, or such other address as Agent shall designate, an
original or facsimile Notice of Borrowing no later than 9:00 a.m.
(Pacific Coast time), not less than three (3) nor more than five (5)
Business Days prior to the proposed Funding Date of each Loan.
(ii) Each Notice of Borrowing shall specify (1) the Funding
Date (which shall be a Business Day) in respect of the Loan, (2) the
amount of the proposed Loan, provided that the aggregate amount of such
proposed Loan shall equal One Million Dollars ($1,000,000) or integral
multiples of One Hundred Thousand Dollars ($100,000) in excess thereof,
(3) whether the Loan to be made thereunder will be a Base Rate Loan or a
LIBOR Loan and, if a LIBOR Loan, the Interest Period, (4) to which
account of Borrower the funds are to be directed, and (5) the proposed
use of such Loan. Any Notice of Borrowing pursuant to this Section 2.1.2
shall be irrevocable.
(iii) Notwithstanding the foregoing or any other provision
hereof to the contrary: in addition to the number of Loans permissible
monthly under the general Facility pursuant to Section 2.1.2(a)(i),
Borrower shall be permitted to borrow under the Swing Line up to four
(4) times during any calendar month, provided that (A) the Notice of
Borrowing with respect to any Swing Line Borrowing shall be given by
Borrower to Agent no later than 9:00 a.m. (Pacific Coast time) on the
proposed Funding Date of such Swing Line Borrowing and shall designate
such Borrowing as a Base Rate Loan; and (B) each requested
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Borrowing under the Swing Line shall equal Five Hundred Thousand Dollars
($500,000) or an integral multiple of Ten Thousand Dollars ($10,000) in
excess thereof. The obligation of the Agent (as the Swing Line Lender)
to fund Swing Line Borrowings in accordance with Section 2.1.1(b) shall
not be subject to Section 11.3: the other Lenders have no obligation
under Section 11.3.1 to fund their Pro Rata Share of any Swing Line
Borrowing, and the Agent alone (as the Swing Line Lender) shall fund all
Swing Line Borrowings. Except as provided in Section 2.1.1(b), in the
preceding sentences of this Section 2.1.2(a)(iii), in Section 2.6.1(a)
or in Section 11.3, all other provisions of this Agreement shall apply
to any such Swing Line Borrowing.
(b) Borrower may elect (i) to convert LIBOR Loans or any portion
thereof into Base Rate Loans, (ii) to convert Base Rate Loans or any
portion thereof to LIBOR Loans, or (iii) to continue any LIBOR Loans or
any portion thereof for an additional Interest Period, provided,
however, that the aggregate amount of the Loans being converted into or
continued as LIBOR Loans shall, in the aggregate, equal One Million
Dollars ($1,000,000) or an integral multiple of One Hundred Thousand
Dollars ($100,000) in excess thereof. The applicable Interest Period for
the continuation of any LIBOR Loan shall commence on the day on which
the next preceding Interest Period expires. The conversion of a LIBOR
Loan to a Base Rate Loan shall only occur on the last Business Day of
the Interest Period relating to such LIBOR Loan; such conversion shall
occur automatically in the absence of an election under clause (iii)
above. Each election under clause (ii) or clause (iii) above shall be
made by Borrower giving Agent an original or facsimile Notice of
Borrowing no later than 9:00 a.m. (Pacific Coast time), not less than
three (3) nor more than five (5) Business Days prior to the date of a
conversion to or continuation of a LIBOR Loan, specifying, in each case
(1) the amount of the conversion or continuation, (2) the Interest
Period therefor, and (3) the date of the conversion or continuation
(which date shall be a Business Day).
(c) Upon receipt of a Notice of Borrowing in proper form
requesting LIBOR Loans under subparagraph (a) (i) or (b) above, Agent
shall determine the LIBOR applicable to the Interest Period for such
LIBOR Loans, and shall, two (2) Business Days prior to the beginning of
such Interest Period, give (by facsimile) a Fixed Rate Notice in respect
thereof to Borrower and Lenders; provided, however, that failure to give
such notice to Borrower shall not affect the validity of such rate. Each
determination by Agent of the LIBOR shall be conclusive and binding upon
the parties hereto in the absence of manifest error.
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(d) Borrower shall pay to Agent an administration fee of Fifty
Dollars ($50.00) for each determination by Agent of the LIBOR applicable
to the Interest Period for such LIBOR Loans.
2.1.3 Making of Loans. Subject to Section 11.3 or as otherwise provided
herein, Agent shall make the proceeds of Loans available to Borrower on the
applicable Funding Date and shall disburse such funds in Dollars in immediately
available funds to Borrower's commercial demand account at Xxxxx Fargo, Account
Number Account No. 0643122377 or such other account, acceptable to Agent, as may
be specified in the Notice of Borrowing or otherwise requested by Borrower in a
writing that is received by Agent no later than 9:00 a.m. (Pacific Coast time)
on such Funding Date.
2.1.4 Term. The outstanding balance of the Loans shall be payable in
full on the earliest to occur of (i) the third anniversary of the date of this
Agreement, or (ii) the acceleration of the Loans pursuant to Section 10.2.1 (the
"Termination Date"); provided, however, that Borrower shall have the right to
extend the Termination Date under the foregoing clause (i) for one (1) year,
provided that each of the following conditions is satisfied:
(a) Borrower gives Agent written notice of Borrower's election
to extend the Termination Date not earlier than ninety (90) days, or
later than thirty (30) days, prior to the then effective Termination
Date (a copy of which notice shall be sent promptly by Agent to each
other Lender);
(b) Not later than the giving of the extension notice under
subparagraph (a) above, Borrower pays to Agent an extension fee (the
"Extension Fee") (for the benefit of all Lenders) equal to 0.10% of the
amount of the Facility; and
(c) No Unmatured Event of Default or Event of Default has
occurred and is continuing either at the date of notice under
subparagraph (a) above or on the then effective Termination Date.
2.2 Authorization to Obtain Loans. Borrower shall provide Agent with
documentation satisfactory to Agent indicating the names of those employees of
Borrower authorized by Borrower to sign Notices of Borrowing, and Agent and
Lenders shall be entitled to rely on such documentation until notified in
writing by Borrower of any change(s) of the persons
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so authorized. Agent shall be entitled to act on the instructions of anyone
identifying himself or herself as one of the Persons authorized to execute a
Notice of Borrowing, and believed by Agent in good faith to be such a Person,
and Borrower shall be bound thereby in the same manner as if such Person were
actually so authorized. Borrower agrees to indemnify, defend and hold Lenders
and Agent harmless from and against any and all Liabilities and Costs which may
arise or be created by the acceptance of instructions in any Notice of
Borrowing, unless caused by the gross negligence or willful misconduct of the
Person to be indemnified.
2.3 Lenders' Accounting. Agent shall maintain a loan account (the "Loan
Account") on its books in which shall be recorded (i) the names and addresses
and the Commitments of Lenders, and principal amount of Loans owing to each
Lender from time to time, and (ii) all advances and repayments of principal and
payments of accrued interest under the Loans, as well as payments of the Unused
Facility Fee, as provided in this Agreement, separately identifying Loans and
prepayments under the Swing Line. All entries in the Loan Account shall be made
in accordance with Agent's customary accounting practices as in effect from time
to time. Monthly or at such other interval as is customary with Agent's
practice, Agent will render a statement of the Loan Account to Borrower and will
deliver a copy thereof to each Lender. Each such statement shall be deemed
final, binding and conclusive upon Borrower in all respects as to all matters
reflected therein (absent manifest error), unless Borrower, within thirty (30)
days after the date such statement is delivered to Borrower, delivers to Agent
written notice of any objections which Borrower may have to any such statement,
or within ten (10) days after discovery by Borrower of an error with respect to
which Borrower had no knowledge and which could not have been determined after
reasonable inquiry during said 30-day period. In that event, only those items
expressly objected to in such notice shall be deemed to be disputed by Borrower.
In the event that any such objection cannot be settled by Agent and Borrower
within thirty (30) days after Agent receives notice thereof from Borrower, Agent
shall notify all Lenders of such objection. Notwithstanding the foregoing,
Agent's entries in the Loan Account evidencing Loans and other financial
accommodations made from time to time shall be final, binding and conclusive
upon Borrower (absent manifest error) as to the existence and amount of the
Obligations recorded in the Loan Account.
2.4 Interest on the Loans.
2.4.1 Base Rate Loans. Subject to Section 2.4.4, all Base Rate Loans
shall bear interest on the actual daily unpaid principal amount thereof from the
date made until paid in full at a fluctuating rate per annum equal to the Base
Rate. Base Rate Loans shall be made in minimum amounts of One Million Dollars
($1,000,000) or an integral multiple of One Hundred Thousand ($100,000) in
excess thereof.
2.4.2 LIBOR Loans. Subject to Sections 2.4.4 and 2.4.8, all LIBOR Loans
shall bear interest on the unpaid principal amount thereof during the Interest
Period applicable thereto at a rate per annum equal to the sum of LIBOR for such
Interest Period plus the Applicable LIBO Rate Margin. LIBOR Loans shall be in
tranches of One
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Million Dollars ($1,000,000) or One Hundred Thousand Dollar ($100,000)
increments in excess thereof. No more than ten (10) LIBOR Loan tranches shall be
outstanding at any one time. Notwithstanding anything to the contrary contained
herein and subject to the Default Interest provisions contained in Section
2.4.4, if an Event of Default occurs and as a result thereof the Commitments are
terminated, all LIBOR Loans will convert to Base Rate Loans upon the expiration
of the applicable Interest Periods therefor or the date all Loans become due,
whichever occurs first.
2.4.3 Interest Payments. Subject to Section 2.4.4, interest accrued on
all Loans shall be payable by Borrower, in the manner provided in Section 2.6.2,
in arrears on the first Business Day of the first calendar month following the
Closing Date, the first Business Day of each succeeding calendar month
thereafter, and on the Termination Date.
2.4.4 Default Interest. Notwithstanding the rates of interest specified
in Sections 2.4.1 and 2.4.2 and the payment dates specified in Section 2.4.3,
effective immediately upon the occurrence and during the continuance of any
Event of Default, the principal balance of each Loan then outstanding and, to
the extent permitted by applicable law, any interest payments on the Loans not
paid when due, shall bear interest payable upon demand at a rate which is five
percent (5%) per annum in excess of the rate(s) of interest otherwise payable
from time to time under this Agreement (the "Default Rate"). All other amounts
due Agent or Lenders (whether directly or for reimbursement) under this
Agreement or any of the other Loan Documents if not paid when due, or if due
date is expressed, if not paid within ten (10) days after demand, shall bear
interest from and after demand at the rate set forth in this Section 2.4.4.
2.4.5 Late Fee. Borrower acknowledges that late payment to Agent will
cause Agent and Lenders to incur costs not contemplated by this Agreement. Such
costs include, without limitation, processing and accounting charges. Therefore,
if Borrower fails timely to pay any sum due and payable hereunder through the
Termination Date (other than payment of the entire outstanding balance of the
Loans on the Termination Date), unless waived by Agent pursuant to Section
11.11.1 or Requisite Lenders, a late charge of four cents ($.04) for each dollar
of any principal payment, interest or other charge due hereon and which is not
paid within fifteen (15) days after such payment is due, shall be charged by
Agent (for the benefit of Lenders) and paid by Borrower for the purpose of
defraying the expense incident to handling such delinquent payment. Borrower and
Agent agree that this late charge represents a reasonable sum considering all of
the circumstances existing on the date hereof and represents a fair and
reasonable estimate of the costs that Agent and Lenders will incur by reason of
late payment. Borrower and Agent further agree that proof of actual damages
would be costly and inconvenient. Acceptance of any late charge shall not
constitute a waiver of the default with respect to the overdue installment, and
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shall not prevent Agent from exercising any of the other rights available
hereunder or any other Loan Document. Such late charge shall be paid without
prejudice to any other rights of Agent.
2.4.6 Computation of Interest. Interest shall be computed on the basis
of the actual number of days elapsed in the period during which interest or fees
accrue and a year of three hundred sixty (360) days. In computing interest on
any Loan, the date of the making of the Loan shall be included and the date of
payment shall be excluded; provided, however, that if a Loan is repaid on the
same day on which it is made, one (1) day's interest shall be paid on that Loan.
Notwithstanding any provision in this Section 2.4, interest in respect of any
Loan shall not exceed the maximum rate permitted by applicable law. Changes in
the Base Rate shall take effect as of the date of any change in the Base Rate,
as defined, and changes in the Applicable LIBO Rate Margin shall take effect as
of the date set forth in the relevant clause of the definition of such term.
2.4.7 Changes; Legal Restrictions. In the event that after the Closing
Date (i) the adoption of or any change in any law, treaty, rule, regulation,
guideline or determination of a court or Governmental Authority or any change in
the interpretation or application thereof by a court or Governmental Authority,
or (ii) compliance by Agent or any Lender with any request or directive made or
issued after the Closing Date (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) from any
central bank or other Governmental Authority or quasi-governmental authority:
(a) subjects Agent or any Lender to any tax, duty or other
charge of any kind with respect to the Facility, this Agreement or any
of the other Loan Documents or the Loans, or changes the basis of
taxation of payments to Agent or such Lender of principal, fees,
interest or any other amount payable hereunder, except for net income,
gross receipts, gross profits or franchise taxes imposed by any
jurisdiction (all such non-excepted taxes, duties and other charges
being hereinafter referred to as "Lender Taxes");
(b) imposes, modifies or holds applicable, in the determination
of Agent or any Lender, any reserve, special deposit, compulsory loan,
FDIC insurance, capital allocation or similar requirement (other than a
requirement of the type described in Section 2.7) against assets held
by, or deposits or other liabilities in or for the account of, advances
or loans by, or other credit extended by, or any other acquisition of
funds by, Agent or such Lender or any applicable lending office (except
to the extent that the reserve and FDIC insurance requirements are
reflected in the "Base Rate" or in determining LIBOR); or
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(c) imposes on Agent or any Lender any other condition (other
than one described in Section 2.7) materially more burdensome in nature,
extent or consequence than those in existence as of the Closing Date,
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing, maintaining or participating in the Loans or to
reduce any amount receivable thereunder; then, in any such case, Borrower shall
promptly pay to Agent or such Lender, as applicable, upon demand, such amount or
amounts (based upon a reasonable allocation thereof by Agent or such Lender to
the financing transactions contemplated by this Agreement and affected by this
Section 2.4.7) as may be necessary to compensate Agent or such Lender for any
such additional cost incurred or reduced amounts received; provided, however,
that, if the payment of such compensation may not be legally made (whether by
modification of the applicable interest rate or otherwise), then Lenders shall
have no further obligation to make Loans that cause Agent or any Lender to incur
such increased cost, and all affected Loans shall become due and payable by
Borrower sixty (60) days thereafter. Agent or such Lender shall deliver to
Borrower (and in the case of a delivery by Lender, such Lender shall also
deliver to Agent) a written statement of the claimed additional costs incurred
or reduced amounts received and the basis therefor in reasonable detail as soon
as reasonably practicable after such Lender obtains knowledge thereof. If Agent
or any Lender subsequently recovers any amount of Lender Taxes previously paid
by Borrower pursuant to this Section 2.4.7, whether before or after termination
of this Agreement, then, upon receipt of good funds with respect to such
recovery, Agent or such Lender will refund such amount to Borrower if no Event
of Default or Unmatured Event of Default then exists or, if an Event of Default
or Unmatured Event of Default then exists, such amount will be credited to the
Obligations in the manner determined by Agent or such Lender.
2.4.8 Certain Provisions Regarding LIBOR Loans.
(a) LIBOR Lending Unlawful. If any Lender shall determine (which
determination shall, upon notice thereof to Borrower and Agent, be
conclusive and binding on the parties hereto) that the introduction of
or any change in or in the interpretation of any law makes it unlawful,
or any central bank or other Governmental Authority asserts that it is
unlawful, for such Lender to make or maintain any Loan as a LIBOR Loan,
(i) the obligations of such Lenders to make or maintain any Loans as
LIBOR Loans shall, upon such determination, forthwith be suspended until
such Lender shall notify Agent that the circumstances causing such
suspension no longer exist, and (ii) if required by such law or
assertion, the LIBOR Loans of such Lender shall automatically convert
into Base Rate Loans.
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(b) Deposits Unavailable. If Agent shall have determined in good
faith that adequate means do not exist for ascertaining the interest
rate applicable hereunder to LIBOR Loans, then, upon notice from Agent
to Borrower the obligations of all Lenders to make or maintain Loans as
LIBOR Loans shall forthwith be suspended until Agent shall notify
Borrower that the circumstances causing such suspension no longer exist.
Agent will give such notice when it determines, in good faith, that such
circumstances no longer exist; provided, however, that Agent shall not
have any liability to any Person with respect to any delay in giving
such notice.
(c) Fixed Rate Price Adjustment. Borrower acknowledges that
prepayment or acceleration of a LIBOR Loan during an Interest Period
shall result in Lenders incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. (For
all purposes of this subparagraph (c), any Loan not being made as a
LIBOR Loan in accordance with the Notice of Borrowing therefor, as a
result of Borrower's cancellation thereof or failure to satisfy the
conditions precedent thereto, shall be treated as if such LIBOR Loan had
been prepaid.) Therefore, on the date a LIBOR Loan is prepaid or the
date all sums payable hereunder become due and payable, by acceleration
or otherwise ("Price Adjustment Date"), Borrower will pay to Agent, for
the account of each Lender (in addition to all other sums then owing),
an amount ("Fixed Rate Price Adjustment") equal to the then present
value of (i) the amount of interest that would have accrued on the LIBOR
Loan for the remainder of the Interest Period at the rate applicable to
such LIBOR Loan, less (ii) the amount of interest that would accrue on
the same LIBOR Loan for the same period if LIBOR were set on the Price
Adjustment Date. The present value shall be calculated by using as a
discount rate LIBOR quoted on the Price Adjustment Date. Agent shall
calculate the Fixed Rate Price Adjustment on behalf of the affected
Lenders. Upon the written notice to Borrower from Agent, Borrower shall
immediately pay to Agent, for the account of the affected Lenders, the
Fixed Rate Price Adjustment payable with respect to each affected Loan.
Such written notice (which shall include calculations in reasonable
detail) shall, in the absence of manifest error, be conclusive and
binding on the parties hereto.
(d) Borrower understands, agrees and acknowledges the following:
(i) no Lender has any obligation to purchase, sell and/or match funds in
connection with the use of LIBOR as a basis for calculating the rate of
interest on a LIBOR Loan or a Fixed Rate Price Adjustment; (ii) LIBOR is
used merely as a reference in determining such rate and/or Fixed Rate
Price Adjustment; and (iii)
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Borrower has accepted LIBOR as a reasonable and fair basis for
calculating such rate and a Fixed Rate Price Adjustment. Borrower
further agrees to pay the Fixed Rate Price Adjustment and Lender Taxes,
if any, whether or not a Lender elects to purchase, sell and/or match
funds.
2.4.9 Withholding Tax Exemption. At least five (5) Business Days prior
to the first day on which interest or fees are payable hereunder for the account
of any Lender, each Lender that is not incorporated under the laws of the United
States of America, or a state thereof, agrees that it will deliver to Agent and
Borrower two (2) duly completed copies of United States Internal Revenue Service
Form 1001 or Form 4224, certifying in either case that such Lender is entitled
to receive payments under this Agreement without deduction or withholding of any
United States federal income taxes. Each Lender which so delivers a Form 1001 or
Form 4224 further undertakes to deliver to Agent and Borrower two (2) additional
copies of such form (or any applicable successor form) on or before the date
that such form expires (currently, three (3) successive calendar years for Form
1001 and one (1) calendar year for Form 4224) or becomes obsolete or after the
occurrence of any event requiring a change in the most recent forms so delivered
by it, and such amendments thereto or extensions or renewals thereof as may be
reasonably requested by Agent or Borrower, in each case certifying that such
Lender is entitled to receive payments under this Agreement without deduction or
withholding of any United States federal income taxes, unless an event
(including without limitation any change in treaty, law or regulation) has
occurred prior to the date on which any such delivery would otherwise be
required which renders all such forms inapplicable or which would prevent such
Lender from duly completing and delivering any such form with respect to it and
such Lender advises Agent that it is not capable of receiving payments without
any deduction or withholding of United States federal income taxes. If any
Lender cannot deliver such form, then Borrower may withhold from such payments
such amounts as are required by the Internal Revenue Code.
2.5 Fees.
2.5.1 Unused Facility Fee. From and after the Closing Date and until the
Obligations are paid in full and this Agreement is terminated or, if sooner, the
date the Commitments terminate, and subject to Section 11.4.2, Borrower shall
pay to Agent, for the account of each Lender, a fee accruing at the rate set
forth below upon an amount equal to (i) the average daily amount of the Facility
minus (ii) the average daily principal balance of all Loans (said difference
being the "Unused Amount"), as determined for each Fiscal Quarter. The aforesaid
fee (the "Unused Facility Fee") shall accrue at the applicable rate set forth
below:
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Average Daily Rate Per Annum
Unused Amount During Applicable to
Applicable Quarter Unused Amount
------------------ -------------
An amount equal to or greater
than 50% of the Facility 0.25%
An amount less than 50% of the
Facility 0.125%
The Unused Facility Fee shall be payable, in the manner provided in Section
2.6.2, in arrears on the first Business Day in each Fiscal Quarter, beginning
with the first Fiscal Quarter after the Closing Date, and on the date of payment
in full of all Obligations to Lenders pursuant to Section 2.1.4, with the Unused
Facility Fee to be prorated to the date of such payment. The Unused Facility Fee
shall be calculated on the basis of the actual number of days elapsed
(excluding, however, the date of payment in full of all Obligations to Lenders
pursuant to Section 2.1.4) in a three hundred sixty (360) day year.
2.5.2 Agency Fees. Borrower shall pay Agent such fees as are provided
for in the agency fee agreement between Agent and Borrower, as in existence from
time to time.
2.5.3 Payment of Fees. The fees described in Sections 2.1.4 and 4.1.11
and in this Section 2.5 represent compensation for services rendered and to be
rendered separate and apart from the lending of money or the provision of credit
and do not constitute compensation for the use, detention or forbearance of
money, and the obligation of Borrower to pay the fees described herein shall be
in addition to, and not in lieu of, the obligation of Borrower to pay interest,
other fees and expenses otherwise described in this Agreement. All fees shall be
payable when due in immediately available funds and shall be non-refundable when
paid. If Borrower fails to make any payment of fees or expenses specified or
referred to in this Agreement due to Agent or Lenders, including without
limitation those referred to in this Section 2.5, in Section 12.1, or otherwise
under this Agreement or any separate fee agreement between Borrower and Agent or
any Lender relating to this Agreement, when due, the amount due shall bear
interest until paid at the Base Rate and, after ten (10) days, at the Default
Rate (but not to exceed the maximum rate permitted by applicable law), and shall
constitute part of the Obligations.
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2.6 Payments.
2.6.1 Voluntary Prepayments. Borrower may, upon not less than two (2)
Business Days' prior written notice to Agent not later than 11:00 a.m. (Pacific
Coast time) on the date given, at any time and from time to time, prepay any
Loans in whole or in part; provided that, notwithstanding the foregoing,
Borrower may, upon not less than one (1) Business Day's prior written notice to
Agent not later than 11:00 a.m. (Pacific Coast time) on the date given, at any
time and from time to time, prepay Swing Line Borrowings in whole or in part.
If, at the time of prepayment of the Loans, there are outstanding Swing Line
Borrowings, such prepayment shall be applied first to the prepayment of
outstanding Swing Line Borrowings (in the order in which they were borrowed),
and second, to the prepayment of other Loans. Any notice of prepayment given to
Agent under this Section 2.6.1 shall specify the date of prepayment and the
aggregate principal amount of the prepayment. In the event of a prepayment of
LIBOR Loans, Borrower shall concurrently pay any Fixed Rate Price Adjustment
payable in respect thereof. Agent shall provide to each Lender a confirming copy
of such notice on the same Business Day such notice is received.
2.6.2 Manner and Time of Payment. All payments of principal, interest
and fees hereunder payable to Agent or the Lenders shall be made without
condition or reservation of right and free of set-off or counterclaim, in
Dollars and by wire transfer (pursuant to Agent's written wire transfer
instructions) of immediately available funds, to Agent, for the account of each
Lender, not later than 11:00 a.m. (Pacific Coast time) on the date due; and
funds received by Agent after that time and date shall be deemed to have been
paid on the next succeeding Business Day. In order to assure timely payment of
interest on the Loans and fees pursuant to Section 2.5, Borrower hereby
irrevocably authorizes Agent to directly debit Borrower's demand deposit account
with Agent (Account No. 0643122377) for payment when due of all such interest
and fees payable to Lenders. Written notice of the amount and purpose of any
such direct debit shall be given to Borrower by Agent not less than two (2)
Business Days prior to its effective date; provided, however, that Agent's
failure to give such notice shall not affect the validity of, or Borrower's
authorization of, such debit. In the event any direct debit hereunder is
returned for insufficient funds, Borrower shall, upon notice from Agent,
immediately deposit sufficient funds into said account to pay all interest, fees
and other related charges due and owing to Lenders; provided, however, that any
such insufficiency of funds in said account shall not excuse or delay the timely
payment by Borrower of the full amount of such interest, fees and related
charges or relieve Borrower of its obligations under Section 2.4.4 or 2.4.5 in
respect of any such insufficiency. The statement of the Loan Account provided by
Agent to Borrower shall show the amounts and dates of such direct debits.
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2.6.3 Payments on Non-Business Days. Whenever any payment to be made by
Borrower hereunder shall be stated to be due on a day which is not a Business
Day, payments shall be made on the next succeeding Business Day and such
extension of time shall be included in the computation of the payment of
interest hereunder and of any of the fees specified in Section 2.5, as the case
may be.
2.7 Increased Capital. If either (i) the introduction of or any change in or
in the interpretation of any law or regulation after the Closing Date or (ii)
compliance by Agent or any Lender with any guideline or request from any central
bank or other Governmental Authority (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) made or issued
after the Closing Date affects or would affect the amount of capital required or
expected to be maintained by Agent or such Lender or any corporation controlling
Agent or such Lender, and Agent or such Lender determines that the amount of
such capital is increased by or based upon the existence of Agent's obligations
hereunder or such Lender's Commitment, then, upon demand by Agent or such
Lender, Borrower shall immediately pay to Agent or such Lender, from time to
time as specified by Agent or such Lender, additional amounts sufficient to
compensate Agent or such Lender in the light of such circumstances, to the
extent that Agent or such Lender reasonably determines such increase in capital
to be allocable to the existence of Agent's obligations hereunder or such
Lender's Commitment; provided, however, that (i) neither Agent nor any Lender
may claim under this Section 2.7 any such additional amount attributable to any
period preceding the date that is ninety (90) days prior to the date of its
demand, and (ii) before making any such demand, Agent, and each Lender, agrees
to use reasonable efforts (consistent with its internal policy and legal and
regulatory restrictions) to designate a different lending office as its lending
office for purposes of the Loans and its Commitment, if the making of such a
designation (1) would avoid the need for, or reduce the amount of, such demand
and (2) would not, in the reasonable judgment of Agent or such Lender, as the
case may be, be otherwise disadvantageous to it. A certificate in reasonable
detail as to such amounts submitted to Borrower by Agent or such Lender shall,
in the absence of manifest error, be conclusive and binding for all purposes.
2.8 Notice of Increased Costs. Each Lender agrees that, as promptly as
reasonably practicable after it becomes aware of the occurrence of an event or
the existence of a condition which would cause it to be affected by any of the
events or conditions described in Section 2.4.7 or 2.4.8 or Section 2.7, it will
notify Borrower, and provide a copy of such notice to Agent, of such event and
the possible effects thereof, provided that the failure to provide such notice
shall not affect Lender's rights to reimbursement provided for herein.
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ARTICLE III
-----------
UNENCUMBERED POOL PROPERTIES
----------------------------
3.1 Acceptance of Unencumbered Pool Properties. Subject to compliance with the
terms and conditions of Section 4.1, Lenders have accepted the Properties listed
on Schedule 1 as of the Closing Date as Unencumbered Pool Properties. If
Borrower desires that Lenders accept an additional Property as an Unencumbered
Pool Property, Borrower shall so notify Agent, and Agent shall promptly notify
each other Lender. No such additional Property will be evaluated by Lenders as a
potential Unencumbered Pool Property unless:
(a) such Property is an Apartment Property, an Industrial
Property or a Business Park Property;
(b) if such Property is a ground lease, such ground lease is an
Eligible Ground Lease;
(c) if such Property is not owned by Borrower, it is (or, upon
acceptance into the Unencumbered Pool in accordance with this Section
3.1, will be) owned by a Guarantor Subsidiary; and
(d) Borrower delivers to Agent the following:
3.1.2 A current operating statement for such Property audited or
certified by Borrower as being true and correct in all material respects and
prepared in accordance with GAAP and comparative operating statements (in the
general form of the Quarterly Operating Reports) for the current period and for
the previous two (2) Fiscal Years; provided, however, that, if Borrower (or the
relevant Guarantor Subsidiary) shall have owned such Property for less than the
period to be covered by such operating statements, then the audit and
certification requirements shall extend only to the period of ownership by
Borrower or such Guarantor Subsidiary, so long as (i) Borrower provides
operating statements prepared and certified by the former owner(s) for the
remainder of the period required hereunder, if such certified operating
statements are reasonably obtainable by Borrower, or (ii) if such certified
operating statements are not reasonably obtainable by Borrower, the best
available information obtainable by Borrower and certified as such by Borrower
with respect to such Property.
3.1.3 A current rent roll for such Property and a three (3) year
operating and occupancy history of such Property in form satisfactory to Agent,
and certified by Borrower to be true and correct (or, with respect to periods
prior to Borrower's (or such
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Guarantor Subsidiary's) acquisition thereof, if such information is not
reasonably obtainable by Borrower, the best available information obtainable by
Borrower and certified as such by Borrower with respect to such Property);
3.1.4 A copy of Borrower's most recent Owner's Policy of Title Insurance
and survey of such Property (if any);
3.1.5 The most recent "Phase I" environmental assessment of such
Property, and any additional environmental studies or assessments in Borrower's
possession or control that have been performed with respect to such Property;
3.1.6 Copies of all Major Agreements affecting such Property;
3.1.7 Copies of any existing engineering, mechanical, structural or
maintenance studies performed with respect to such Property, in Borrower's
possession or reasonably obtainable by Borrower;
3.1.8 Information regarding the age and location of the Property,
including copies of any existing engineering, mechanical, structural or
maintenance studies performed with respect to such Property, in Borrower's
possession or reasonably obtainable by Borrower;
3.1.9 If the Property is to be owned by a wholly-owned Subsidiary that
has not previously qualified as a Guarantor Subsidiary, copies of the
Partnership Agreement or other charter documents of such Subsidiary and of such
other information regarding such Subsidiary as Agent may reasonably request; and
3.1.10 Such other information as may be reasonably requested by Agent or
any Lender in order to evaluate the potential Unencumbered Pool Property.
Following receipt of the foregoing documents and information, Agent shall review
them as expeditiously as is reasonably practicable under the circumstances. If,
following such review, Agent is prepared to proceed with acceptance of such
Property as an Unencumbered Pool Property (including, if applicable, the
acceptance of any proposed Guarantor Subsidiary as a Guarantor Subsidiary),
Agent will promptly (i) so notify Borrower, and (ii) submit the foregoing
documents and information to the Lenders, for approval by Requisite Lenders.
Upon such approval by Requisite Lenders, and upon execution and delivery of such
items or documents as may be appropriate under the circumstances (including, if
such Guarantor Subsidiary has not previously executed and delivered a Guaranty,
delivery of a Guaranty duly executed by such Guarantor Subsidiary, together with
an opinion of counsel to Borrower, in form and substance
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reasonably acceptable to Agent, with respect thereto and such other documents
listed in Section 4.2 as may be applicable), such Property shall become an
Unencumbered Pool Property. Notwithstanding Lenders' acceptance of any Property
as an Unencumbered Pool Property, the inclusion of the Individual UPP Value of
such Property in determining the Unencumbered Pool Value shall be subject to the
limitations set forth in the definition of "Unencumbered Pool Value".
3.2 Termination of Designation as Unencumbered Pool Property. From time to
time Borrower may request, upon not less than ten (10) days' prior written
notice to Agent (which shall promptly send a copy thereof to each other Lender),
that an Unencumbered Pool Property cease to be designated as such, which
termination of designation ("Termination of Designation") shall be consented to
by Agent if all of the following conditions are satisfied as of the date of such
Termination of Designation:
3.2.1 No Unmatured Event of Default or Event of Default has occurred and
is continuing; and
3.2.2 Borrower shall have delivered to Agent an Unencumbered Pool
Certificate demonstrating on a pro forma basis, and Agent shall have determined,
that
(a) the outstanding principal balance of the Loans will not
exceed the Loan Availability after giving effect to such Termination of
Designation and any prepayment to be made and/or the acceptance of any
Property as an additional or replacement Unencumbered Pool Property to
be given concurrently with such Termination of Designation; and
(b) such Termination of Designation will not cause Borrower to
be in breach of any of the covenants set forth in Article IX (for tests
based on quarterly results, determined as if such Property had ceased to
be an Unencumbered Pool Property, and if any Property concurrently being
accepted as Unencumbered Pool Properties, had become an Unencumbered
Pool Property, effective as of the first day of the Fiscal Quarter then
most recently ended).
The provisions of this Section 3.2 shall not affect the operation of the
definition of "Unencumbered Pool Properties" with respect to Properties that
cease to qualify as Unencumbered Pool Properties thereunder.
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ARTICLE IV
----------
CONDITIONS TO LOANS
-------------------
4.1 Conditions to Initial Disbursement of Loans. The obligation of Lenders to
make the initial disbursement of the Loans shall be subject to satisfaction of
each of the following conditions precedent on or before the initial Funding Date
(including, in the case of Borrower, a certificate of the Secretary, or an
Assistant Secretary, of Borrower (a "Secretary's Certificate") with respect to
authorization, incumbency and all organizational documents):
4.1.1 Borrower Documents. Borrower shall have executed and/or delivered
to Agent each of the following, in form and substance acceptable to Agent and
each other Lender:
(a) this Agreement;
(b) the Loan Notes;
(c) Certified copy of Borrower's Articles of Incorporation, as
amended*, certified by the Maryland Secretary of State;
(d) Certified copy of Borrower's bylaws, certified by the
Secretary or an Assistant Secretary of Borrower;
(e) Certificate of Good Standing (or its equivalent) from the
Maryland Secretary of State*;
(f) Evidence of qualification and good standing of Borrower in
California, Washington and Nevada:
(i) Certificate of Status-Foreign Corporation from the
California Secretary of State*;
(ii) Certificate of Good Standing (or its equivalent) from
the Washington Department of Licensing*; and
--------
* All good standing certificates and certified documents issued by any
Governmental Authority shall be dated as of a date within 30 days of the
Closing Date.
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(iii) Certificate of Good Standing (or its equivalent) from
the Nevada Secretary of State*;
(g) Funds Transfer Agreement dated February 2, 1998 (on Agent's
standard form);
(h) Transfer Authorizer/Confirmer Designation and Transfer
Statement (on Agent's standard form);
(i) Corporate resolutions of Borrower authorizing Borrower's
execution, delivery and performance of the Loan Documents, as certified
by the Secretary or an Assistant Secretary of Borrower (which
certificate shall also certify the continued accuracy of the Incumbency
Certificate described below); and
(j) Incumbency Certificate of Borrower dated July 23, 1997.
4.1.2 Unencumbered Pool Property Documents. Agent shall have received
all required information with respect to each Unencumbered Pool Property in form
and substance reasonably acceptable to Agent and each other Lender.
4.1.3 Unencumbered Pool Certificate; Compliance Certificate. Borrower
shall have delivered to Agent an Unencumbered Pool Certificate evidencing
sufficient Loan Availability to support the Loans being requested and a
Compliance Certificate.
4.1.4 Notice of Borrowing. Borrower shall have delivered to Agent a
Notice of Borrowing, and, if applicable, Agent shall have delivered to Borrower
a Fixed Rate Notice, in each case in compliance with Section 2.1.2.
4.1.5 Performance. Borrower shall have performed in all material
respects all agreements and covenants required by Agent to be performed by it on
or before the such initial Funding Date.
4.1.6 Solvency. Borrower shall be Solvent.
4.1.7 Material Adverse Changes. No change, as determined by Agent and
Lenders, shall have occurred, during the period commencing September 30, 1997,
and ending on such initial Funding Date, which has a Material Adverse Effect on
Borrower.
4.1.8 Litigation Proceedings. There shall not have been instituted or
threatened, during the period commencing September 30, 1997, and ending on such
initial Funding Date, any litigation or proceeding in any court or Governmental
Authority
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affecting or threatening to affect Borrower, or any Unencumbered Pool Property,
which has a Material Adverse Effect on Borrower, as reasonably determined by
Agent.
4.1.9 Indefeasible Title. Borrower shall have good, indefeasible and
merchantable title to the Unencumbered Pool Properties, free and clear of all
Liens other than Permitted Liens.
4.1.10 No Event of Default; Satisfaction of Certain Covenants. On such
initial Funding Date and after giving effect to the initial disbursements of the
Loans, no Event of Default or Unmatured Event of Default shall exist and all of
the covenants contained in Section 8.4 and Article IX shall be satisfied.
4.1.11 Fees. Agent shall have received (i) an arrangement fee in the
amount separately agreed to between Agent and Borrower, and (ii) all other fees
then due (including the first annual fee due Agent under Section 2.5.2), and
Borrower shall have performed all of its other obligations as set forth in the
Loan Documents to make payments to Agent on or before such initial Funding Date;
and, to the extent requested by Agent, all expenses of Agent incurred prior to
such initial Funding Date in connection with this Agreement shall have been paid
by Borrower.
4.1.12 Opinion of Counsel. Agent shall have received, on behalf of Agent
and Lenders, favorable opinions of counsel for Borrower, dated as of the initial
Funding Date, in form and substance satisfactory to Agent and Lenders.
4.1.13 Consents and Approvals. All material licenses, permits, consents,
regulatory approvals and corporate action necessary to enter into the financing
transactions contemplated by this Agreement shall have been obtained by
Borrower.
4.1.14 Representations and Warranties. All representations and
warranties contained in this Agreement and the other Loan Documents shall be
true and correct in all material respects.
4.1.15 Payoff of Existing Facilities. Borrower shall have terminated all
commitments under (i) the Unsecured Loan Agreement dated as of February 2, 1998,
between Borrower and Xxxxx Fargo Bank (the "Existing Facility"), and (ii) the
Revolving Line of Credit Agreement dated as of August 30, 1996, between
Borrower, Bank of America NT&SA and certain other lenders, and shall have paid
all principal, interest and other amounts payable in respect of the foregoing.
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4.2 Conditions Precedent to All Loans. The obligation of each Lender to
make any Loan requested to be made by it, on any date, is subject to
satisfaction of the following conditions precedent as of such date:
4.2.1 Documents. With respect to a request for a Loan, Agent shall have
received, on or before the Funding Date and in accordance with the provisions of
Section 2.1.2, an original and duly executed Notice of Borrowing.
4.2.2 Additional Matters. As of the Funding Date for any Loan and after
giving effect to the Loans being requested:
(a) Representations and Warranties. All of the representations
and warranties contained in this Agreement and in any other Loan
Document (other than representations and warranties which expressly
speak only as of a different date and other than for changes permitted
or contemplated by this Agreement), and each certification,
representation or warranty of Borrower set forth in the Notice of
Borrowing relating to such Loan(s), shall be true and correct in all
material respects on and as of such Funding Date, as though made on and
as of such date;
(b) No Default. No Event of Default or Unmatured Event of
Default shall have occurred and be continuing or would result from the
making of the requested Loan, and all of the covenants contained in
Section 8.4 and Article IX shall be satisfied; and
(c) No Material Adverse Change. Since the Closing Date, no
change shall have occurred which shall have a Material Adverse Effect on
Borrower, as determined by Agent, other than any such change the
occurrence of which has been waived by Requisite Lenders in connection
with any prior Borrowing.
Each submission by Borrower to Agent of a Notice of Borrowing with respect to a
Loan and the acceptance by Borrower of the proceeds of each such Loan made
hereunder shall constitute a representation and warranty by Borrower as of the
Funding Date in respect of such Loan that all the conditions contained in this
Section 4.2.2 have been satisfied.
4.2.3 Guarantor Subsidiary Documents. On or before the first Funding
Date to follow the designation as an Unencumbered Pool Property of Property
owned by a Subsidiary that has not previously delivered the following documents,
such Guarantor Subsidiary shall have executed and/or delivered to Agent each of
the following, in form and substance acceptable to Agent and each other Lender:
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(a) A Guaranty;
(b) Certified copy of such Person's agreement of limited
partnership, partnership agreement, operating agreement or bylaws, as
the case may be, in each case, as amended*;
(c) If such Guarantor Subsidiary is a limited partnership:
certified copies of its Certificate of Limited Partnership (Form LP-1)
and each amendment thereto (Form LP-2) from the Secretary of the state
under the laws of which such Guarantor Subsidiary is organized*;
(d) If such Guarantor Subsidiary is a limited liability company:
certified copies of its Articles of Organization and each amendment
thereto, from the Secretary of the state under the laws of which such
Guarantor Subsidiary is organized*;
(e) If such Guarantor Subsidiary is a limited partnership,
corporation or a limited liability company: Certificate of Status from
the Secretary of State of the state under the laws of which such
Guarantor Subsidiary is organized*;
(f) If such Guarantor Subsidiary is a corporation: Certified
copies of its Articles or Certificate of Incorporation, as amended*,
certified by the Secretary of State of the state under the laws of which
such Guarantor Subsidiary is organized;
(g) If such Guarantor Subsidiary owns an Unencumbered Pool
Property located in any state other than California: (i) evidence of its
qualification and good standing in such other state; and (ii)
Certificate of Existence/Authorization (or its equivalent) from the
Secretary of State of such state*;
(h) If such Guarantor Subsidiary is not organized under the laws
of the State of California, evidence of qualification and Certificate of
Status from the Secretary of State of California; and
(i) The opinion of counsel referred to in Section 3.1.
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ARTICLE V
---------
REPRESENTATIONS AND WARRANTIES
------------------------------
In order to induce Lenders to make the Loans, Borrower hereby represents
and warrants to Lenders as follows:
5.1 Organization; Corporate Powers. Borrower (i) is a corporation duly
organized, validly existing and in good standing under the laws of the State of
Maryland, (ii) is duly qualified to do business as a foreign corporation and in
good standing under the laws of each jurisdiction in which it owns or leases
real property or in which the nature of its business requires it to be so
qualified, except for those jurisdictions where failure to so qualify and be in
good standing would not have a Material Adverse Effect on Borrower, and (iii)
has all requisite corporate power and authority to own and operate its property
and assets and to conduct its business as presently conducted and as proposed to
be conducted in connection with and following the consummation of the Loans
contemplated by the Loan Documents.
5.2 Authority. Borrower has the requisite corporate power and authority to
execute, deliver and perform each of the Loan Documents to which it is or will
be a party. The execution, delivery and performance thereof, and the
consummation of the transactions contemplated thereby, have been duly approved
by Board of Directors of Borrower, and no other corporate proceedings or
authorizations on the part of Borrower, its shareholders or any Affiliate are
necessary to consummate such transactions. Each of the Loan Documents to which
Borrower is a party has been duly executed and delivered by Borrower and
constitutes its legal, valid and binding obligation, enforceable against it in
accordance with its terms, subject to bankruptcy, insolvency and other laws
affecting creditors' rights generally.
5.3 No Conflict. The execution, delivery and performance by Borrower of the
Loan Documents to which it is or will be a party, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate
Borrower's Articles of Incorporation or bylaws, or (ii) conflict with, result in
a breach of or constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law, Contractual Obligation or Court Order of
or binding upon Borrower, or (iii) require termination of any Contractual
Obligation, or (iv) result in or require the creation or imposition of any Lien
whatsoever upon any of the properties or assets of Borrower, other than
Permitted Liens.
5.4 Consents and Authorizations. Borrower has obtained all consents and
authorizations required pursuant to its Contractual Obligations with any other
Person, and
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shall have obtained all consents and authorizations of, and effected
all notices to and filings with, any Governmental Authority, as may be necessary
to allow Borrower to lawfully execute, deliver and perform its obligations under
the Loan Documents to which Borrower is a party.
5.5 Governmental Regulation. Neither Borrower nor any Guarantor Subsidiary
is subject to regulation under the Public Utility Holding Company Act of 1935,
the Federal Power Act, the Interstate Commerce Act, the Investment Company Act
of 1940 or any other federal or state statute or regulation such that its
ability to incur indebtedness is limited or its ability to consummate the
transactions contemplated by the Loan Documents is materially impaired.
5.6 Prior Financials. The September 30, 1997 Consolidated Balance Sheet,
Statement of Operations and Statement of Cash Flows of Borrower contained in
Borrower's Form 10Q for the quarter ended September 30, 1997 (the "September 30,
1997 Financials") delivered to Agent prior to the date hereof were prepared in
accordance with GAAP and fairly present the assets, liabilities and financial
condition of Borrower on a consolidated basis, at such date and the results of
its operations and its cash flows, on a consolidated basis, for the period then
ended.
5.7 Financial Statements; Projections and Forecasts. Each of the Financial
Statements to be delivered to Agent pursuant to Sections 6.1.2 and 6.1.3 (i) has
been, or will be, as applicable, prepared in accordance with the books and
records of Borrower on a consolidated basis, and (ii) either fairly present, or
will fairly present, as applicable, the financial condition of Borrower on a
consolidated basis, at the dates thereof (and, if applicable, subject to normal
year-end adjustments) and the results of its operations and cash flows, on a
consolidated basis, for the period then ended. Each of the projections delivered
to Agent prior to the date hereof and the financial projections and property
budgets to be delivered to Agent pursuant to Section 6.1.5 (1) has been, or will
be, as applicable, prepared by Borrower in light of the past business and
performance of Borrower on a consolidated basis and (2) represent, or will
represent, as of the date thereof, the reasonable good faith estimates of
Borrower's financial personnel.
5.8 Prior Operating Statements. Each of the operating statements pertaining
to each of the Unencumbered Pool Properties prepared by or on behalf of Borrower
and delivered to Agent prior to the date hereof was prepared in accordance with
GAAP in effect on the date such operating statement of each Unencumbered Pool
Property was prepared and fairly presents the results of operations of such
Unencumbered Pool Property for the period covered thereby and to Borrower's best
knowledge, each of the operating statements pertaining to each of the
Unencumbered Pool Properties delivered to Agent prior to the date hereof that
was not prepared by or on behalf of Borrower was
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prepared in accordance with GAAP in effect on the date such operating statement
of each Unencumbered Pool Property was prepared and fairly presents the results
of operations of such Unencumbered Pool Property for the period covered thereby.
5.9 Quarterly Operating Reports and Projections. Each of the Quarterly
Operating Reports to be delivered to Agent pursuant to Section 6.1.1 (i) has
been or will be, as applicable, prepared in accordance with the books and
records of the applicable Unencumbered Pool Property, and (ii) fairly presents
or will fairly present, as applicable, the results of operations of such
Unencumbered Pool Property for the period then ended. Each of the projections,
financial plans and budgets delivered to Agent prior to the date hereof and the
projections and property budgets to be delivered to Agent pursuant to Section
6.1.5 (1) has been, or will be, as applicable, prepared for each Unencumbered
Pool Property in light of the past business and performance of such Unencumbered
Pool Property and (2) represents or will represent, as of the date thereof, the
reasonable good faith estimates of Borrower's financial personnel.
5.10 Litigation; Adverse Effects.
5.10.1 There is no Proceeding pending or, to the best of Borrower's
knowledge, threatened against Borrower or any Property of Borrower (including
any Unencumbered Pool Property), which (i) results in a Material Adverse Effect
on Borrower, (ii) materially and adversely affects the ability of any party to
any of the Loan Documents to perform its obligations thereunder, or (iii)
materially and adversely affects the ability of Borrower to perform its
obligations contemplated in the Loan Documents.
5.10.2 Borrower is not (i) in violation of any applicable law, which
violation has a Material Adverse Effect on Borrower, or (ii) subject to or in
default with respect to any Court Order which has a Material Adverse Effect on
Borrower. There are no material Proceedings pending or, to the best of
Borrower's knowledge, threatened against Borrower or any Unencumbered Pool
Property, which would have a Material Adverse Effect on Borrower.
5.11 No Material Adverse Change. Since September 30, 1997, there has
occurred no event which has a Material Adverse Effect on Borrower, and no
material adverse change in Borrower's ability to perform its obligations under
the Loan Documents or the transactions contemplated thereby.
5.12 Payment of Taxes. All tax returns and reports to be filed by Borrower
have been timely filed, and all taxes, assessments, fees and other governmental
charges shown on such returns or otherwise payable by Borrower have been paid
when due and payable (other than real property taxes, which may be paid prior to
delinquency so long as no
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penalty or interest shall attach thereto), except such taxes, if any, as are
reserved against in accordance with GAAP and are being contested in good faith
by appropriate proceedings or such taxes, the failure to make payment of which
when due and payable will not have, in the aggregate, a Material Adverse Effect
on Borrower. Borrower has no knowledge of any proposed tax assessment against
Borrower that will have a Material Adverse Effect on Borrower, which is not
being actively contested in good faith by Borrower.
5.13 Material Adverse Agreements. Borrower is not a party to or subject to
any Contractual Obligation or other restriction contained in its Articles of
Incorporation or other governing documents which has a Material Adverse Effect
on Borrower.
5.14 Performance. Borrower is not in default in the performance, observance
or fulfillment of any of the obligations, covenants or conditions contained in
any Contractual Obligation applicable to it, and no condition exists which, with
the giving of notice or the lapse of time or both, would constitute a default
under such Contractual Obligation in each case, except where the consequences,
direct or indirect, of such default or defaults, if any, will not have a
Material Adverse Effect on Borrower.
5.15 Federal Reserve Regulations. No part of the proceeds of the Loan
hereunder will be used to purchase or carry any "margin security" as defined in
Regulation G or for the purpose of reducing or retiring any indebtedness which
was originally incurred to purchase or carry any margin security or for any
other purpose which might constitute this transaction a "purpose credit" within
the meaning of said Regulation G. Neither Borrower nor any Guarantor Subsidiary
is engaged primarily in the business of extending credit for the purpose of
purchasing or carrying out any "margin stock" as defined in Regulation U. No
part of the proceeds of the Loan hereunder will be used for any purpose that
violates, or which is inconsistent with, the provisions of Regulation X or any
other regulation of the Federal Reserve Board.
5.16 Disclosure. The information, representations and warranties of Borrower
or any Guarantor Subsidiary contained in the Loan Documents and in other
certificates, financial statements and other documents delivered to Agent by or
on behalf of Borrower or any Guarantor Subsidiary in connection therewith, taken
as a whole, do not contain any untrue statement of a material fact or omit to
state a material fact necessary in order to make the statements contained herein
or therein, in light of the circumstances under which they were made, not
misleading. Borrower has given to Agent true, correct and complete copies of all
UPP Leases, organizational documents, Financial Statements and all other
documents and instruments referred to in the Loan Documents as having been
delivered to Agent. Borrower has not intentionally withheld any material fact
from Agent in regard to any matter raised in the Loan Documents. Notwithstanding
the foregoing,
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with respect to projections of Borrower's future performance such
representations and warranties are made in good faith and to the best judgment
of Borrower.
5.17 Requirements of Law. Borrower and its Subsidiaries are in compliance
with all Requirements of Law (including without limitation the Securities Act
and the Securities Exchange Act, and the applicable rules and regulations
thereunder, state securities law and "Blue Sky" laws) applicable to it and its
respective businesses, in each case, where the failure to so comply will have a
Material Adverse Effect on Borrower. Borrower has made all filings with and
obtained all consents of the Commission required under the Securities Act and
the Securities Exchange Act in connection with the execution, delivery and
performance by Borrower of the Loan Documents.
5.18 Patents, Trademarks, Permits, Etc. Borrower and its Subsidiaries own,
are licensed or otherwise have the lawful right to use, or have all permits and
other governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes used in or necessary for the conduct of each
such Person's business as currently conducted, the absence of which would have a
Material Adverse Effect upon Borrower. The use of such permits and other
governmental approvals, patents, trademarks, trade names, copyrights,
technology, know-how and processes by each such Person does not infringe on the
rights of any Person, subject to such claims and infringements as do not, in the
aggregate, give rise to any liability on the part of any such Person which would
have a Material Adverse Effect on Borrower.
5.19 Environmental Matters. Except as set forth on Schedule 5.1.19, to the
best of Borrower's knowledge, (i) the operations of Borrower and each of its
Subsidiaries comply in all material respects with all applicable local, state
and federal environmental, health and safety Requirements of Law ("Environmental
Laws"); (ii) none of Borrower's or any of its Subsidiaries' present Property or
operations are subject to any Remedial Action or other Liabilities and Costs
arising from the Release or threatened Release of a Contaminant into the
environment in violation of any Environmental Laws, which Remedial Action or
other Liabilities and Costs would have a Material Adverse Effect on Borrower;
(iii) neither Borrower nor any of its Subsidiaries has filed any notice under
applicable Environmental Laws reporting a Release of a Contaminant into the
environment in violation of any Environmental Laws, except as the same may have
been heretofore remedied; (iv) there is not now on or in the Property of
Borrower or any of its Subsidiaries (except in compliance in all material
respects with all applicable Environmental Laws): (A) any underground storage
tanks, (B) any asbestos-containing material, or (C) any polychlorinated
biphenyls (PCB's) used in hydraulic oils, electrical transformers or other
equipment owned by such Person; and (v) neither Borrower nor any of its
Subsidiaries has received any notice or claim to the effect that it is or may be
liable to any Person
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as a result of the Release or threatened Release of a Contaminant into the
environment.
5.20 Unencumbered Pool Properties. Each of the Properties listed on Schedule
1 qualifies as an Unencumbered Pool Property and is owned by Borrower or any
Guarantor Subsidiary.
5.21 Major Agreements; UPP Leases. With respect to each Unencumbered Pool
Property, Agent has received true, complete and correct copies of each Major
Agreement. All such Major Agreements are in full force and effect and have not
been terminated, and no default or event of default (or event or occurrence
which upon with the passage of time or the giving of notice, or both, will
constitute a default or event of default) exists or will exist under such Major
Agreements as a result of the consummation of the transactions contemplated by
the Loan Documents. Except as reflected on the most current rent rolls delivered
to Agent, all UPP Leases are in full force and effect and no default or event of
default (or event or occurrence which upon with the passage of time or the
giving of notice, or both, will constitute a default or event of default) exists
or will exist thereunder as a result of the consummation of the transactions
contemplated by the Loan Documents.
5.22 Solvency. Borrower is and will be Solvent after giving effect to each
disbursement of the Loans and the payment and accrual of all fees then payable.
5.23 Title to Assets; No Liens. Borrower has good, indefeasible and
merchantable title to all Properties owned or leased by it, including, without
limitation, any Unencumbered Pool Properties owned or leased by Borrower, and
each of the Unencumbered Pool Properties is free and clear of all Liens, except
Permitted Liens.
5.24 Use of Proceeds. Borrower's use of the proceeds of the Loans are, and
will continue to be, legal and proper uses (and to the extent necessary, duly
authorized by Borrower's Board of Directors and shareholders) and such uses are
consistent with all applicable laws and statutes and Section 7.9.
5.25 Capitalization. All of the capital stock and other Securities of
Borrower and each Affiliate have been issued in compliance with all applicable
Requirements of Law.
5.26 ERISA. Neither Borrower nor any ERISA Affiliate thereof has in the past
five (5) years maintained or contributed to or currently maintains or
contributes to any Benefit Plan. No Investment Partnership has or is likely to
incur any liability with respect to any Benefit Plan maintained or contributed
to by such Investment Partnership or its ERISA Affiliates, which would have a
Material Adverse Effect on Borrower. Neither Borrower nor any ERISA Affiliate of
Borrower has during the past five (5) years
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maintained or contributed to or currently maintains or contributes to any
employee welfare benefit plan within the meaning of Section 3(1) of ERISA which
provides benefits to retirees. Neither Borrower nor any ERISA Affiliate of
Borrower is now contributing nor has it ever contributed to or been obligated to
contribute to any Multiemployer Plan, no employees or former employees of
Borrower or such ERISA Affiliate have been covered by any Multiemployer Plan in
respect of their employment by Borrower, and no ERISA Affiliate of Borrower has
or is likely to incur any withdrawal liability with respect to any Multiemployer
Plan which would have a Material Adverse Effect on Borrower.
5.27 Status as a REIT. Borrower (i) is a real estate investment trust as
defined in Section 856 of the Internal Revenue Code (or any successor provision
thereto), (ii) has not revoked its election to be a real estate investment
trust, (iii) has not engaged in any "prohibited transactions" as defined in
Section 856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), and (iv) for its current "tax year" (as defined in the Internal
Revenue Code) is and for all prior tax years subsequent to its election to be a
real estate investment trust has been entitled to a dividends paid deduction
which meets the requirements of Section 857 of the Internal Revenue Code.
5.28 Ownership. Borrower does not own or have any interest in any other
Person, other than as set forth on Schedule 5.28, which sets forth, as of the
date of this Agreement, each Subsidiary of Borrower and each Investment
Partnership, the nature and jurisdiction of organization thereof, and the nature
and amount (including Borrower's Share) of Borrower's interest therein.
5.29 NYSE Listing. The common stock of the Borrower is listed for trading,
and is traded, on the New York Stock Exchange, and will continue to be listed
for trading and traded on either the New York Stock Exchange or the American
Stock Exchange.
5.30 Representations and Warranties as to Each Guarantor Subsidiary. In
order to induce Lenders to make the Loans, on any Funding Date on which a
Guarantor Subsidiary owns any Unencumbered Pool Property, Borrower hereby
represents and warrants to Lenders as follows:
5.30.1 Organization; Partnership Powers. Each Guarantor Subsidiary (i)
is duly incorporated or formed, validly existing and in good standing under the
laws of the jurisdiction of its organization, (ii) is duly qualified to do
business as a foreign limited liability company, limited partnership or
corporation, as applicable and in good standing under the laws of each
jurisdiction in which it owns or leases real property or in which the nature of
its business requires it to be so qualified, except for those jurisdictions
where failure to so qualify and be in good standing would not have a Material
Adverse Effect on
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Borrower and such Guarantor Subsidiary, and (iii) has all requisite corporate,
partnership or other organizational power and authority, as an entity, to own
and operate its Property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by the Loan Documents.
5.30.2 Authority. Each Guarantor Subsidiary has the requisite power and
authority, as an entity, to execute, deliver and perform each of the Loan
Documents to which it is or will be a party. The execution, delivery and
performance thereof, and the consummation of the transactions contemplated
thereby, have been duly approved by the requisite partners, shareholders or
members, as the case may be, of each such Guarantor Subsidiary, and no other
proceedings on the part of any Guarantor Subsidiary are necessary to consummate
such transactions. Each of the Loan Documents to which any Guarantor Subsidiary
is a party has been duly executed and delivered by such Guarantor Subsidiary and
constitutes its legal, valid and binding obligation, enforceable against such
Guarantor Subsidiary in accordance with its terms, subject to bankruptcy,
insolvency and other laws affecting creditors' rights generally.
5.30.3 No Conflict. The execution, delivery and performance of the Loan
Documents by each Guarantor Subsidiary, and each of the transactions
contemplated thereby, do not and will not (i) conflict with or violate such
Guarantor Subsidiary's articles of incorporation, bylaws, partnership agreement
or other charter documents, as the case may be, (ii) conflict with, result in a
breach of or constitute (with or without notice or lapse of time or both) a
default under any Requirement of Law, Contractual Obligation or Court Order of
any Guarantor Subsidiary, (iii) require termination of any Contractual
Obligation, or (iv) result in or require the creation or imposition of any Lien
whatsoever upon any of the properties or assets of any Guarantor Subsidiary
(other than Permitted Liens).
5.30.4 Consents and Authorizations. Each Guarantor Subsidiary has
obtained all consents and authorizations required pursuant to its Contractual
Obligations with any other Person, and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, as may be necessary to allow such Guarantor Subsidiary
to lawfully execute, deliver and perform its obligations under the Loan
Documents to which such Guarantor Subsidiary is a party.
5.30.5 Litigation; Adverse Effects.
(a) There is no action, suit, proceeding, governmental
investigation or arbitration, at law or in equity or before or by any
Governmental Authority, pending or, to the best of Borrower's knowledge,
threatened against any
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Guarantor Subsidiary or any Property of any Guarantor Subsidiary which
would (i) result in a Material Adverse Effect on Borrower, or (ii)
materially and adversely affect the ability of any party to any of the
Loan Documents to perform its obligations thereunder.
(b) No Guarantor Subsidiary is (i) in violation of any
applicable law, which violation has a Material Adverse Effect on such
Guarantor Subsidiary, or (ii) subject to or in default with respect to
any Court Order which has a Material Adverse Effect on such Guarantor
Subsidiary. There are no material Proceedings pending or, to the best of
Borrower's knowledge, threatened against any Guarantor Subsidiary which
would have a Material Adverse Effect on such Guarantor Subsidiary.
5.30.6 Payment of Taxes. All tax returns and reports to be filed by any
Guarantor Subsidiary have been timely filed, and all taxes, assessments, fees
and other governmental charges shown on such returns or otherwise payable by
such Guarantor Subsidiary have been paid when due and payable (other than real
property taxes, which may be paid prior to delinquency so long as no penalty or
interest shall attach thereto), except such taxes, if any, as are reserved
against in accordance with GAAP and are being contested in good faith by
appropriate proceedings or such taxes, the failure to make payment of which when
due and payable would not have, in the aggregate, a Material Adverse Effect on
any Guarantor Subsidiary. Borrower has no knowledge of any proposed tax
assessment against any Guarantor Subsidiary that would have a Material Adverse
Effect on any Guarantor Subsidiary, which is not being actively contested in
good faith by such Guarantor Subsidiary.
5.30.7 Performance. No Guarantor Subsidiary is in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect on such Guarantor Subsidiary.
5.30.8 Solvency. Each Guarantor Subsidiary is and will be Solvent, in
each case after giving effect to each disbursement of the Loans, and the payment
and accrual of all fees then payable.
5.30.9 Title to Assets; No Liens. Each Guarantor Subsidiary has good,
indefeasible and merchantable title to the Properties owned or leased by it and
each of the
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Unencumbered Pool Properties owned by any Guarantor Subsidiary is free and clear
of all Liens, except Permitted Liens.
5.30.10 Beneficial Owner. The sole beneficial owner of each Guarantor
Subsidiary is, and will continue to be, directly or indirectly, Borrower.
ARTICLE VI
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REPORTING COVENANTS
-------------------
Borrower covenants and agrees that, on and after the date hereof, until
payment in full of all of the Obligations, the expiration of the Commitments and
termination of this Agreement:
6.1 Financial Statements and Other Financial and Operating Information.
Borrower shall maintain or cause to be maintained a system of accounting
established and administered in accordance with sound business practices and
consistent with past practice to permit preparation of quarterly and annual
financial statements in conformity with GAAP, and each of the financial
statements described below shall be prepared on a consolidated basis for
Borrower from such system and records. Borrower shall deliver or cause to be
delivered to Agent (with copies sufficient for each Lender):
6.1.1 Quarterly Operating Reports. As soon as practicable, and in any
event within forty-five (45) days after the end of each Fiscal Quarter,
operating statements in the form approved by Agent and rent rolls (on Borrower's
detailed form of rent roll) for each Unencumbered Pool Property dated as of the
last day of such Fiscal Quarter (the "Quarterly Operating Reports"), in form and
substance satisfactory to Agent, certified by Borrower's chief financial
officer.
6.1.2 Quarterly Financial Statements Certified by CFO. As soon as
practicable, and in any event within forty-five (45) days after the end of each
Fiscal Quarter, consolidated balance sheets, statements of operations and
statements of cash flow for Borrower ("Financial Statements"), which may, in the
case of the first three Fiscal Quarters, be in the form provided to the
Commission on Borrower's Form 10Q, and certified by Borrower's chief financial
officer.
6.1.3 Annual Financial Statements. Within ninety (90) days after the
close of each Fiscal Year, annual Financial Statements of Borrower, on a
consolidated basis (in the form provided to the Commission on Borrower's Form
10K), audited and certified without qualification by the Accountants and
accompanied by a statement that, in the course of their audit (conducted in
accordance with generally accepted auditing
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standards), the Accountants obtained no knowledge that an Event of Default or
Unmatured Event of Default has occurred under Article IX hereof. To the extent
Agent desires additional details or supporting information with respect to
Subsidiaries, Investment Partnerships or individual Properties owned or leased
by Borrower, any Subsidiary of Borrower or any Investment Partnership (other
than Unencumbered Pool Properties) not contained in Borrower's Form 10K,
Borrower shall provide Agent with such details or supporting information as
Agent requests which is reasonably available to Borrower.
6.1.4 Officer's Certificate of Borrower. (i) Together with each delivery
of any Financial Statement pursuant to Sections 6.1.2 and 6.1.3, (A) an
Officer's Certificate of Borrower, stating that the executive officer who is the
signatory thereto (which officer shall be the chief executive officer, the chief
operating officer or the chief financial officer of Borrower) has reviewed, or
caused under his supervision to be reviewed, the terms of this Agreement and the
other principal Loan Documents, and has made, or caused to be made under his
supervision, a review in reasonable detail of the transactions and condition of
Borrower and its Subsidiaries during the accounting period covered by such
Financial Statements, and that such review has not disclosed the existence
during or at the end of such accounting period, and that the signers do not have
knowledge of the existence as of the date of the Officer's Certificate, of any
condition or event which constitutes an Event of Default or Unmatured Event of
Default, or, if any such condition or event existed or exists, specifying the
nature and period of existence thereof and what action has been taken, is being
taken and is proposed to be taken with respect thereto; and (B) a Compliance
Certificate demonstrating in reasonable detail (which detail shall include
actual calculation and supporting information) compliance during and at the end
of such accounting periods with the covenants contained in Section 8.4 and
Article IX.
6.1.5 Cash Flow Projections; Property Budgets. Within thirty (30) days
after the end of each Fiscal Year, projections of Borrower, on a consolidated
basis, detailing expected sources and uses of cash for the then current Fiscal
Year, together with property budgets for each of the Unencumbered Pool
Properties for the then current Fiscal Year. Borrower shall also provide such
additional supporting details as Agent may reasonably request.
6.1.6 Unencumbered Pool Certificate. As soon as practicable, and in any
event within forty-five (45) days after the end of each Fiscal Quarter (and more
often if so requested by Agent), a certificate in substantially the form of
Exhibit B, certified as being true and correct by Borrower's chief executive
officer, chief operating officer or chief financial officer (the "Unencumbered
Pool Certificate"). Each Unencumbered Pool Certificate shall set forth
calculations, including calculations of the Individual UPP
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Values of each Unencumbered Pool Property, Unencumbered Pool Value and Loan
Availability, updated since the date of the last prior Unencumbered Pool
Certificate, and shall reflect any material adverse changes in the Net Operating
Income or other condition of an Unencumbered Pool Property of which the signing
officer has knowledge and which is not reflected in the most recent Unencumbered
Pool Certificate.
6.1.7 Knowledge of Certain Events. Promptly upon Borrower obtaining
knowledge (i) of any condition or event which constitutes an Event of Default or
Unmatured Event of Default, or becoming aware that any Lender has given notice
or taken any other action with respect to a claimed Event of Default or
Unmatured Event of Default; (ii) of any condition or event which has a Material
Adverse Effect on Borrower, an Officer's Certificate specifying the nature and
period of existence of any such condition or event, or specifying the notice
given or action taken by such Lender and the nature of such claimed Event of
Default, Unmatured Event of Default, event or condition, and what action
Borrower has taken, is taking and proposes to take with respect thereto; or
(iii) of any occurrence causing a Property that theretofore constituted
Unencumbered Pool Property to cease to qualify as such.
6.1.8 Litigation, Arbitration or Government Investigation. Promptly upon
Borrower obtaining knowledge of (i) the institution of, or threat of, any
material Proceeding against or affecting Borrower or any of its Subsidiaries not
previously disclosed in writing by Borrower to Agent pursuant to this Section
6.1.8, including any eminent domain or other condemnation proceedings affecting
any Unencumbered Pool Property, or (ii) any material development in any
Proceeding already disclosed, which, in either case, has a Material Adverse
Effect on Borrower, a notice thereof to Agent and such other information as may
be reasonably available to it to enable Agent, Lenders and their counsel to
evaluate such matters.
6.1.9 ERISA Termination Event. As soon as possible, and in any event
within thirty (30) days after Borrower knows or has reason to know that a
Termination Event has occurred, a written statement of the chief financial
officer of Borrower describing such Termination Event and the action, if any,
which Borrower, or any ERISA Affiliate of any of Borrower, has taken, is taking
or proposes to take, with respect thereto, and, when known, any action taken or
threatened by the IRS, the DOL or the PBGC with respect thereto.
6.1.10 Prohibited ERISA Transaction. As soon as possible, and in any
event within thirty (30) days, after Borrower, or any ERISA Affiliate of
Borrower, knows or has reason to know that a prohibited transaction (defined in
Section 406 of ERISA and Section 4975 of the Internal Revenue Code) has
occurred, a statement of the chief financial officer of Borrower describing such
transaction.
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6.1.11 Benefit Plan Annual Report. Within ten (10) days after the filing
thereof with the DOL, the IRS or the PBGC, copies of each annual report,
including Schedule B thereto, filed with respect to each Benefit Plan of
Borrower or any ERISA Affiliate of Borrower.
6.1.12 Benefit Plan Funding Waiver Request. Within thirty (30) days
after the filing thereof with the IRS, a copy of each funding waiver request
filed with respect to any Benefit Plan of Borrower or any ERISA Affiliate of
Borrower and all communications received by Borrower, or any ERISA Affiliate of
Borrower, with respect to such request.
6.1.13 Establishment of Benefit Plan and Increase in Contributions to
the Benefit Plan. Not less than ten (10) days prior to the effective date
thereof, a notice to Agent of the establishment of a Benefit Plan (or the
incurrence of any obligation to contribute to a Multiemployer Plan) by Borrower
or any ERISA Affiliate of Borrower. Within thirty (30) days after the first to
occur of an amendment of any then existing Benefit Plan of Borrower or any ERISA
Affiliate of Borrower which will result in an increase in the benefits under
such Benefit Plan or a notification of any such increase, or the establishment
of any new Benefit Plan by Borrower or any ERISA Affiliate of Borrower or the
commencement of contributions to any Benefit Plan to which Borrower or any ERISA
Affiliate of Borrower was not previously contributing, a copy of said amendment,
notification or Benefit Plan.
6.1.14 Qualification of ERISA Plan. Promptly upon, and in any event
within thirty (30) days after, receipt by Borrower or any ERISA Affiliate of
Borrower of an unfavorable determination letter from the IRS regarding the
qualification of a Plan under Section 401(a) of the Internal Revenue Code, a
copy of said determination letter, if such disqualification would have a
Material Adverse Effect on Borrower.
6.1.15 Multiemployer Plan Withdrawal Liability. Promptly upon, and in
any event within thirty (30) days after receipt by Borrower or any ERISA
Affiliate of Borrower of a notice from a Multiemployer Plan regarding the
imposition of withdrawal liability, a copy of said notice.
6.1.16 Failure to Make Section 412 Payment. Promptly upon, and in any
event within thirty (30) days after, Borrower, or any ERISA Affiliate of
Borrower, fails to make a required installment under subsection (m) of Section
412 of the Internal Revenue Code or any other payment required under Section 412
of the Internal Revenue Code on or before the due date for such installment or
payment, a notification of such failure, if such failure could result in either
the imposition of a Lien under said Section 412 or
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otherwise have or could reasonably be anticipated to have a Material Adverse
Effect on Borrower.
6.1.17 Failure of Borrower to Qualify as Real Estate Investment Trust.
Promptly upon, and in any event within forty-eight (48) hours after Borrower
first has actual knowledge of (i) Borrower failing to continue to qualify as a
real estate investment trust as defined in Section 856 of the Internal Revenue
Code (or any successor provision thereof), (ii) any act by Borrower causing its
election to be taxed as a real estate investment trust to be terminated, (iii)
any act causing Borrower to be subject to the taxes imposed by Section 857(b)(6)
of the Internal Revenue Code (or any successor provision thereto), or (iv)
Borrower failing to be entitled to a dividends paid deduction which meets the
requirements of Section 857 of the Internal Revenue Code, a notice of any such
occurrence or circumstance.
6.1.18 Asset Acquisitions and Dispositions, Indebtedness, Etc. Without
limiting Article VIII or any other restriction in the Loan Documents, concurrent
with notice to Borrower's priority mailing list and in all events not later than
any public disclosure, prior written notice of any material Investments (other
than in Cash Equivalents), material acquisitions, asset purchases, dispositions,
disposals, divestitures or similar transactions involving Property, the raising
of additional equity or the incurring or repayment of material Indebtedness, by
Borrower or any Subsidiary.
6.1.19 Ratings. Promptly upon (i) the issuance by any Rating Agency of
any rating in respect of Borrower's senior long-term unsecured debt obligations,
or (ii) the change by any Rating Agency of any theretofore existing rating of
such obligations, notice of such issuance or change.
6.1.20 Other Information. Such other information, reports, contracts,
schedules, lists, documents, agreements and instruments in the possession or
under the control of Borrower with respect to (i) the Unencumbered Pool
Properties, (ii) any material change in Borrower's investment, finance or
operating policies, or (iii) Borrower's business, condition (financial or
otherwise), operations, performance, properties or prospects as Agent may from
time to time reasonably request, including, without limitation, annual
information with respect to cash flow projections, budgets, operating statements
(current year and immediately preceding year), rent rolls, lease expiration
reports, leasing status reports, note payable summaries, bullet note summaries,
equity funding requirements, contingent liability summaries, line of credit
summaries, line of credit collateral summaries, wrap note or note receivable
summaries, schedules of outstanding letters of credit, summaries of cash and
Cash Equivalents, projections of management and leasing fees and overhead
budgets. Provided that Agent gives Borrower reasonable prior notice and an
opportunity to participate, Borrower hereby authorizes
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Agent to communicate with the Accountants and authorizes the Accountants to
disclose to Agent any and all financial statements and other information of any
kind, including copies of any management letter or the substance of any oral
information, that such accountants may have with respect to Borrower's condition
(financial or otherwise), operations, properties, performance and prospects.
Concurrently therewith, Agent will notify Borrower of any such communication. At
Agent's request, Borrower shall deliver a letter addressed to the Accountants
instructing them to disclose such information in compliance with this Section
6.1.20.
6.1.21 Press Releases; Creditor Reports and SEC Filings; Tax Returns,
Etc. Telephonic or telecopy notice to Agent concurrent with or prior to issuance
of any material press release concerning Borrower and, as soon as practicable
after filing with the Commission, all reports and notices, proxy statements,
registration statements and prospectuses of Borrower. All materials sent or made
available generally by Borrower to the holders of its publicly held Securities
or to a trustee under any indenture or filed with the Commission, including all
periodic reports required to be filed with the Commission, will be delivered to
Agent within five (5) days after being so sent, made available or filed, as the
case may be; and all Federal income tax returns filed by Borrower shall be
delivered to Agent within ten (10) days after being so filed.
6.1.22 Accountant Reports. Copies of all reports prepared by the
Accountants and submitted to Borrower in connection with each annual, interim or
special audit or review of the financial statements or practices of Borrower or
any of its Subsidiaries, including the comment letter submitted by the
Accountants in connection with their annual audit.
6.2 Environmental Notices. Borrower shall notify Agent, in writing, as soon
as practicable, and in any event within ten (10) days after Borrower's learning
thereof, of any: (i) written notice or claim to the effect that Borrower or any
of its Subsidiaries is or may be liable to any Person as a result of any
material Release or threatened Release of any Contaminant into the environment;
(ii) written notice that Borrower or any of its Subsidiaries is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment; (iii) written notice that any Property is
subject to an Environmental Lien; (iv) written notice of violation to Borrower
or any of its Subsidiaries or awareness of a condition which might reasonably
result in a notice of violation of any Environmental Laws by Borrower or any of
its Subsidiaries; (v) commencement or written threat of any Proceeding alleging
a violation of any Environmental Laws; (vi) written notice from a Governmental
Authority of any changes to any existing Environmental Laws that will have a
Material Adverse Effect on the operations of Borrower; or (vii) any proposed
acquisition of stock, assets, real estate or
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leasing of property, or any other action by Borrower that, to the best of
Borrower's knowledge, could subject Borrower or any of its Subsidiaries to
environmental, health or safety Liabilities and Costs that will have a Material
Adverse Effect on Borrower. With regard to the matters referred to in clauses
(i) through (v) above, the same shall apply in respect of each Unencumbered Pool
Property and, in the case of other Property of Borrower or any of its
Subsidiaries only if the matter will have a Material Adverse Effect on Borrower.
6.3 Confidentiality. Confidential Information obtained by Agent or Lenders
pursuant to this Agreement or in connection with the Facility shall not be
disseminated by Agent or Lenders and shall not be disclosed to third parties
except to regulators, taxing authorities and other governmental agencies having
jurisdiction over Agent or such Lender or otherwise in response to Requirements
of Law, to their respective auditors and legal counsel and in connection with
regulatory, administrative and judicial proceedings as necessary or relevant
including enforcement proceedings relating to the Loan Documents, and to any
prospective assignee or permitted pledgee of or participant in a Lender's
interest under this Agreement or any prospective purchaser of the assets or a
controlling interest in any Lender, provided that such prospective assignee,
participant or purchaser first agrees to be bound by the provisions of this
Section 6.3. In connection with disclosures of Confidential Information to any
non-governmental third-party, the Lender(s) from whom the same has been
requested shall, to the extent feasible and permitted, give prior notice of such
request to Borrower; however, neither Agent nor any such Lender shall incur any
liability to Borrower for failure to do so. For purposes hereof, "Confidential
Information" shall mean all nonpublic information obtained by Agent or Lenders,
unless and until such information becomes publicly known, other than as a result
of unauthorized disclosure by Agent or Lenders of such information.
ARTICLE VII
-----------
AFFIRMATIVE COVENANTS
---------------------
Borrower covenants and agrees that, on and after the date hereof, until
payment in full of all of the Obligations, the expiration of the Commitments and
termination of this Agreement:
7.1 Existence. Borrower shall at all times maintain its existence as a
corporation and preserve and keep in full force and effect its rights and
franchises unless the failure to maintain such rights and franchises does not
have a Material Adverse Effect on Borrower.
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7.2 Qualification. Borrower shall qualify and remain qualified to do
business in each jurisdiction in which the nature of its business requires it to
be so qualified except for those jurisdictions where failure to so qualify does
not have a Material Adverse Effect on Borrower.
7.3 Compliance with Laws, Etc. Borrower shall (i) comply with all
Requirements of Law, and all restrictive covenants affecting Borrower or the
properties, performance, prospects, assets or operations of Borrower, and (ii)
obtain as needed all Permits necessary for its operations and maintain such in
good standing, except in each of the foregoing cases where the failure to do so
will not have a Material Adverse Effect on Borrower.
7.4 Payment of Taxes and Claims. Borrower shall pay (i) all taxes,
assessments and other governmental charges imposed upon it or on any of its
properties or assets or in respect of any of its franchises, business, income or
property before any penalty or interest accrues thereon, the failure to make
payment of which will have a Material Adverse Effect on Borrower, and (ii) all
claims (including, without limitation, claims for labor, services, materials and
supplies) for sums, material in the aggregate to Borrower, which have become due
and payable and which by law have or may become a Lien other than a judgment
lien upon any of Borrower's properties or assets, prior to the time when any
penalty or fine shall be incurred with respect thereto.
7.5 Maintenance of Properties; Insurance. Borrower shall maintain in good
repair, working order and condition, excepting ordinary wear and tear, all of
its Properties and will make or cause to be made all appropriate repairs,
renewals and replacements thereof. Borrower shall maintain commercially
reasonable and appropriate amounts of fire and extended coverage and liability
insurance, which insurance shall include in any event:
(a) with respect to each Property: (i) property and casualty insurance
(including coverage for flood and water damage for any Property located within a
100-year flood plain) in an amount not less than the replacement costs of the
improvements thereon, and (ii) loss of rental insurance income in an amount not
less than one year's gross revenues of such Property; and
(b) comprehensive general liability insurance in an amount not less than
$20,000,000 per occurrence.
At the request of Agent, Borrower shall provide, as to each Unencumbered Pool
Property evidence of insurance, including certificates of insurance and binders.
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7.6 Inspection of Property; Books and Records; Discussions. Borrower shall
permit, and shall cause each of its Subsidiaries to permit, any authorized
representative(s) designated by any Lender to visit and inspect any of its
properties, to inspect financial and accounting records and leases, and to make
copies and take extracts therefrom, all at such times during normal business
hours and as often as any Lender may reasonably request. In connection
therewith, Borrower shall pay all expenses of the types described in Section
12.1. Borrower will keep proper books of record and account in which entries, in
conformity with GAAP and as otherwise required by this Agreement and applicable
Requirements of Law, shall be made of all dealings and transactions in relation
to its businesses and activities and as otherwise required under Section 6.1.
7.7 Maintenance of Permits, Etc. Borrower will maintain in full force and
effect all Permits, franchises, patents, trademarks, trade names, copyrights,
authorizations or other rights necessary for the operation of its business,
except where the failure to obtain any of the foregoing would not have a
Material Adverse Effect on Borrower; and notify Agent in writing, promptly after
learning thereof, of the suspension, cancellation, revocation or discontinuance
of or of any pending or threatened action or proceeding seeking to suspend,
cancel, revoke or discontinue any material Permit, patent, trademark, trade
name, copyright, governmental approval, franchise authorization or right.
7.8 Conduct of Business. Except for Permitted Investments pursuant to
Section 9.8 and Investments in cash and Cash Equivalents, Borrower and its
Subsidiaries shall engage only in the business of direct ownership, operation
and development of Apartment Properties, Industrial Properties and Business Park
Properties of the same general type as owned by such Persons as of the Closing
Date in California, Washington and Nevada, and any other business activities of
Borrower and its Subsidiaries will remain incidental thereto.
7.9 Use of Proceeds. Borrower shall use the proceeds of the Loans only for
pre-development costs, development and construction costs, acquisitions, working
capital, equity Investments, capital expenditures, and repayment of Indebtedness
(including the Indebtedness referred to in Section 4.1.17), including required
interest and/or principal payments thereon.
7.10 Securities Law Compliance. Borrower shall comply in all material
respects with all rules and regulations of the Commission and file all reports
required by the Commission relating to Borrower's publicly held Securities.
7.11 Continued Status as a REIT; Prohibited Transactions. Borrower (i) will
continue to be a real estate investment trust as defined in Section 856 of the
Internal Revenue Code (or any successor provision thereto), (ii) will not revoke
its election to be a
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real estate investment trust, (iii) will not engage in any "prohibited
transactions" as defined in Section 856(b)(6)(iii) of the Internal Revenue Code
(or any successor provision thereto), and (iv) will continue to be entitled to a
dividend paid deduction meeting the requirements of Section 857 of the Internal
Revenue Code.
7.12 Listed Company. The common stock of Borrower shall at all times be
listed for trading and be traded on the New York Stock Exchange or the American
Stock Exchange.
7.13 Construction in Process: Borrower shall continuously and diligently
pursue the expeditious completion of all Construction in Process and shall
promptly notify Agent in writing of any interruption thereof on any Property for
a continuous period in excess of thirty (30) days, which notice shall include
the reason for such interruption and the anticipated date for resumption and
completion of such Construction in Process.
7.14 With Respect to Guarantor Subsidiaries:.
7.14.1 Existence. Borrower will cause each Guarantor Subsidiary at all
times to maintain its existence as a Partnership or corporation, as the case may
be, and preserve and keep in full force and effect its rights and franchises
unless the failure to maintain such rights and franchises would not have a
Material Adverse Effect on such Guarantor Subsidiary. Borrower will cause each
Guarantor Subsidiary to be owned and continue to be owned, directly or
indirectly, only by Borrower.
7.14.2 Qualification, Name. Borrower will cause each Guarantor
Subsidiary to qualify and remain qualified to do business in each jurisdiction
in which the nature of its business requires it to be so qualified except for
those jurisdictions where failure to so qualify does not have a Material Adverse
Effect on such Guarantor Subsidiary.
7.14.3 Compliance with Laws, Etc. Borrower will cause each Guarantor
Subsidiary to (i) comply with all Requirements of Law, and all restrictive
covenants affecting such Guarantor Subsidiary or the properties, performance,
prospects, assets or operations of such Guarantor Subsidiary, and (ii) obtain as
needed all Permits necessary for its operations and maintain such in good
standing, except in each of the foregoing cases where the failure to do so will
not have a Material Adverse Effect on such Guarantor Subsidiary.
7.14.4 Payment of Taxes and Claims. Borrower will cause each Guarantor
Subsidiary to pay (i) all taxes, assessments and other governmental charges
imposed upon it or on any of its properties or assets or in respect of any of
its franchises,
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business, income or property before any penalty or interest accrues thereon, the
failure to make payment of which will have a Material Adverse Effect on such
Guarantor Subsidiary, and (ii) all claims (including, without limitation, claims
for labor, services, materials and supplies) for sums, material in the aggregate
to such Guarantor Subsidiary, which have become due and payable and which by law
have or may become a Lien other than a judgment lien upon any of such Guarantor
Subsidiary's properties or assets, prior to the time when any penalty or fine
shall be incurred with respect thereto.
7.14.5 Material Contracts. Borrower will cause each Guarantor Subsidiary
to perform all of its obligations under its leases and agreements except where
the failure to perform such obligations will not have a Material Adverse Effect
on such Guarantor Subsidiary.
7.14.6 Maintenance of Permits, Etc. Borrower will cause each Guarantor
Subsidiary to maintain in full force and effect all Permits, franchises,
patents, trademarks, trade names, copyrights, authorizations or other rights
necessary for the operation of its business, except where the failure to obtain
any of the foregoing will not have a Material Adverse Effect on such Guarantor
Subsidiary; and Borrower shall notify Agent in writing, promptly after learning
thereof, of the suspension, cancellation, revocation or discontinuance of or of
any pending or threatened action or proceeding seeking to suspend, cancel,
revoke or discontinue any material Permit, patent, trademark, trade name,
copyright, governmental approval, franchise authorization or right.
7.14.7 Conduct of Business. Each Guarantor Subsidiary shall continue to
be a single purpose, Partnership or corporation with its sole business being
owning, operating and developing the Unencumbered Pool Properties owned by it.
7.15 Indemnity of Guarantor Subsidiaries. Borrower shall indemnify and hold
harmless each Guarantor Subsidiary from and against any liability (in the form
of indebtedness repaid to Lenders in respect of the Borrower's Obligations,
including (if applicable) by way of foreclosure on any collateral in which such
Guarantor Subsidiary may at any time hereafter grant to Lenders a security
interest) in excess of the benefit realized by such Guarantor Subsidiary from
the proceeds of the Loan. As between Borrower and each Guarantor Subsidiary,
Borrower shall be responsible to reimburse each Guarantor Subsidiary in respect
of amounts paid by such Guarantor Subsidiary under its guaranty of Borrower's
obligations under the Loan Documents to the end that Borrower, and each
Guarantor Subsidiary, ultimately bears the burden of payment of its respective
share of such obligations. Borrower's obligations to Guarantor Subsidiaries
under this section shall be subordinated to its obligations to Lenders as
provided in the Guaranties.
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7.16 Year 2000 Compliance. Borrower shall ensure that the following
properties and entities are Year 2000 Compliant in a timely fashion, but in no
event later than December 31, 1999: (i) any Property owned by Borrower, any
Subsidiary or any Effectively Controlled Investment Partnership; (ii) Borrower,
any Subsidiary and any Effectively Controlled Investment Partnership; (iii) any
other major commercial properties and entities in which Borrower holds an
interest; (iv) any major tenants or other major entities from which Borrower
receives payments (other than Agent and Lenders); and (v) any major contractors,
suppliers or service providers or other major entities from which Borrower
receives payments. As used in this Section 7.16, "major" shall mean properties
or entities the failure of which to be Year 2000 Compliant would have a Material
Adverse Effect on Borrower. The term "Year 2000 Compliant" shall mean, in regard
to any property or entity, that all software, hardware, equipment, goods or
systems utilized by or material to the physical operations, business operations,
or financial reporting of such property or entity (collectively, the "Systems")
will properly perform date sensitive functions before, during and after the year
2000. In furtherance of this covenant, Borrower shall, without limitation,
perform a comprehensive review and assessment of all Systems of Borrower and any
Property owned by Borrower, a Subsidiary or Effectively Controlled Investment
Partnership, and shall adopt a detailed plan, with itemized budget, for the
remediation, monitoring and testing of such systems. Borrower shall, within
thirty (30) days of the written request of Agent, provide Lenders with such
certifications or other evidence of Borrower's compliance with the terms of this
Section 7.16 as Agent or any Lender may from time to time reasonably require.
ARTICLE VIII
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NEGATIVE COVENANTS
------------------
Borrower covenants and agrees that, on and after the date hereof, until
payment in full of all of the Obligations, the expiration of the Commitments and
termination of this Agreement:
8.1 Liens, Transfers, Fundamental Changes: Borrower shall not:
8.1.1 Liens. (i) Directly or indirectly create, incur, assume or permit
to exist any Lien, except for Permitted Liens, on or with respect to all or any
portion of any Unencumbered Pool Property; or (ii) directly or indirectly
create, assume or permit to exist any Negative Pledge with respect to any
Unencumbered Pool Property.
8.1.2 Transfers of Unencumbered Pool Property. Transfer, directly or
indirectly, all or any interest in any Unencumbered Pool Property.
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8.1.3 Restrictions on Fundamental Changes.
(a) (i) Enter into, or permit any Subsidiary to enter into, any
merger or consolidation or liquidate, wind-up or dissolve (or suffer any
liquidation or dissolution); or (ii) except (A) with the prior written
consent of Requisite Lenders (which consent shall not be unreasonably
withheld, but which may be conditioned, among other things, upon
Borrower's delivery to Agent of a Compliance Certificate demonstrating
in reasonable detail (which detail shall include actual calculations)
compliance, after giving effect to such proposed transaction(s), with
the covenants contained in Section 8.4 and Article IX), and (B) under
circumstances such that, immediately following consummation thereof, no
Unmatured Event of Default or Event of Default exists, make any material
investment, acquisition, asset purchase, or similar transaction (either
as a single transaction or a related series of transactions).
Notwithstanding anything to the contrary contained herein, Borrower may,
without the prior written consent of Requisite Lenders and provided that
no Unmatured Event of Default or Event of Default then exists, or would
be caused thereby, liquidate a Subsidiary or enter into a merger or
consolidation (1) of a Subsidiary into Borrower or another wholly-owned
Subsidiary of Borrower, pursuant to which Borrower or such wholly-owned
Subsidiary is the surviving corporation or (2) with any Person so long
as (A) such merger or consolidation is not material, (B) Borrower is the
surviving corporation and (C) Borrower delivers to Agent, not later than
five (5) Business Days prior to such merger or consolidation, a
Compliance Certificate demonstrating in reasonable detail (which detail
shall include actual calculations) compliance, after giving effect to
such transaction, with the covenants contained in Section 8.4 and
Article IX. For purposes of this Section 8.1.3, any investment,
acquisition, asset purchase, merger or similar transaction shall be
considered "material" if it involves assets exceeding twenty-five
percent (25%) of Borrower's assets (as existing prior to giving effect
to such transaction), determined on a consolidated basis and in
accordance with GAAP.
(b) Change, or permit any Subsidiary to change, its Fiscal Year;
(c) Except for Permitted Investments, engage (or permit any
Subsidiary to engage) in any line of business other than as expressly
permitted under Section 7.8; or
(d) Create or acquire any Subsidiary, except in accordance with
the limitations set forth in Section 9.8.
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8.1.4 ERISA. Permit any ERISA Affiliate of Borrower to do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in a
Material Adverse Effect on Borrower:
(a) Engage, or knowingly permit an ERISA Affiliate of Borrower
to engage, in any prohibited transaction described in Section 406 of the
ERISA or Section 4975 of the Internal Revenue Code which is not exempt
under Section 407 or 408 of ERISA or Section 4975(d) of the Internal
Revenue Code for which a class exemption is not available or a private
exemption has not been previously obtained from the DOL;
(b) Permit to exist any accumulated funding deficiency (as
defined in Section 302 of ERISA and Section 412 of the Internal Revenue
Code), whether or not waived;
(c) Fail, or permit an ERISA Affiliate of Borrower to fail, to
pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Plan if such failure
could result in the imposition of a Lien or otherwise would have a
Material Adverse Effect on Borrower;
(d) Terminate, or permit an ERISA Affiliate of Borrower to
terminate, any Benefit Plan which would result in any liability of
Borrower or any ERISA Affiliate of Borrower under Title IV of ERISA; or
(e) Fail, or permit any ERISA Affiliate of Borrower to fail, to
pay any required installment under section (m) of Section 412 of the
Internal Revenue Code or any other payment required under Section 412 of
the Internal Revenue Code on or before the due date for such installment
or other payment, if such failure could result in the imposition of a
Lien or otherwise would have a Material Adverse Effect on Borrower.
8.2 Amendment of Constituent Documents. Except for any such amendment that
is required (i) under any Requirement of Law imposed by any Governmental
Authority or (ii) in order to maintain compliance with Section 7.11: Borrower
shall not, and shall not permit any Guarantor Subsidiary to, amend its articles
of incorporation or by-laws or other charter documents except (x) upon at least
ten (10) Business Days' prior written notice to Agent, and (y) if Agent notifies
Borrower within such 10-Business Day period that such amendment is, in Agent's
reasonable judgment, an amendment that reasonably could be expected to have a
material adverse effect on any rights of Lenders
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or of Borrower's or such Guarantor Subsidiary's ability to perform under the
Loan Documents, with the prior written consent of Requisite Lenders.
8.3 Margin Regulations. No portion of the proceeds of any Loans shall be
used in any manner which would cause the extension of credit or the application
of such proceeds to violate Regulation G, U or X or any other regulation of the
Federal Reserve Board or to violate the Securities Exchange Act or the
Securities Act, in each case as in effect on the applicable Funding Date.
8.4 Management. Xxxxx Xxxxxxxxx shall not cease to be active on a full time,
continuous basis in the senior management of Borrower (the occurrence of such an
event, a "Discontinuity in Management"); provided that, if the death,
incapacity, resignation or dismissal of Xxxxx Xxxxxxxxx results in a
Discontinuity in Management, Borrower shall have up to one hundred eighty (180)
days to obtain the approval of Requisite Lenders, which approval shall not
unreasonably be withheld, to one or more additional executives, such that the
remaining and new management executives, as a group, have substantial and
sufficient knowledge, experience and capabilities in the management of a
publicly held company engaged in the operation of a multi-asset real estate
business of the type engaged in by Borrower. In the event Borrower shall fail to
obtain approval of Requisite Lenders as aforesaid within said 180-day period,
then Borrower shall, at the election and upon the demand of Requisite Lenders,
pay in full all Obligations under the Loan Documents not later than thirty (30)
days after the end of such 180-day period, whereupon this Agreement and all
Commitments hereunder shall be terminated. Upon the occurrence of a
Discontinuity in Management, no further Borrowings shall be permitted until
Borrower shall have obtained approval of Requisite Lenders under this Section
8.4, or unless otherwise agreed to by Requisite Lenders.
8.5 Borrower to Remain a Listed REIT. Borrower shall at no time (i) cease to
be a listed company on either the New York Stock Exchange or the American Stock
Exchange, or (ii) cease to be a qualified real estate investment trust in the
manner referred to in Section 5.27.
8.6 Major Agreements. Neither Borrower nor any Guarantor Subsidiary shall
(a) amend any Eligible Ground Lease in a manner which causes such Eligible
Ground Lease to cease to qualify as an Eligible Ground Lease pursuant to the
terms of this Agreement or (b) amend any Grandfathered Ground Lease without the
prior consent of Requisite Lenders, which consent shall not be unreasonably
withheld. Neither Borrower nor any Subsidiary shall terminate any other Major
Agreement except upon ten (10) Business Days' prior written notice to Agent.
Borrower shall, promptly upon entering into any modification of a Major
Agreement, provide Agent with a copy of such modification.
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8.7 With Respect to Each Guarantor Subsidiary:
8.7.1 No Guarantor Subsidiary shall directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to, any unsecured Indebtedness, except its guaranty of the Obligations
and trade debt incurred in the ordinary course of business.
8.7.2 No Guarantor Subsidiary shall directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of its
Unencumbered Pool Property owned by it, except Permitted Liens.
8.7.3 There shall be no change in the ownership interests of any
Guarantor Subsidiary.
ARTICLE IX
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FINANCIAL COVENANTS
-------------------
Borrower covenants and agrees that, on and after the date of this
Agreement and until payment in full of all the Obligations, the expiration of
all Commitments and the termination of this Agreement:
9.1 Minimum Net Worth. Borrower will maintain a Net Worth of not less than
Three Hundred Fifty Million Dollars ($350,000,000) plus ninety percent (90%) of
Net Offering Proceeds received by Borrower after the December 31, 1997.
9.2 Leverage Ratio. The Leverage Ratio shall not exceed (a) at any time
prior to the last day of the fourth Fiscal Quarter to commence on or after the
Closing Date, 0.55:1; and (b) at any time on or after the last day of the fourth
Fiscal Quarter to commence on or after the Closing Date, 0.50:1.
9.3 Secured Debt to Gross Asset Value Ratio. The ratio of Secured Borrower
Debt to Gross Asset Value shall not exceed (a) at any time prior to the last day
of the fourth Fiscal Quarter to commence on or after the Closing Date, 0.40:1;
and (b) at any time on or after the last day of the fourth Fiscal Quarter to
commence on or after the Closing Date, 0.35:1.
9.4 EBITDA to Interest Expense Ratio. The ratio of EBITDA to Interest
Expense shall not be less than 2.00:1.
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9.5 EBITDA to Debt Service and Capital Expenditures Ratio. The ratio of
EBITDA to the sum of Debt Service and Capital Expenditures shall not be less
than 1.75:1.
9.6 Unencumbered NOI to Unsecured Interest Expense Ratio. The ratio of
Unencumbered NOI to Unsecured Interest Expense shall not be less than 1.75:1.
9.7 Distributions.
9.7.1 Subject to Section 9.7.2, aggregate distributions to shareholders
of Borrower and holders of any equity interest in any Subsidiary of Borrower in
any Fiscal Quarter shall not exceed ninety-five percent (95%) of Funds From
Operations for such Fiscal Quarter. For purposes of this Section 9.7, the term
"distributions" shall mean and include all dividends and other distributions to,
and the repurchase of stock or other equity interests from, the holder of any
equity interests in Borrower or any Subsidiary of Borrower.
9.7.2 No distributions shall be made during the continuance of any Event
of Default arising out of Borrower's failure to pay any of the Obligations when
due (a "Monetary Default"). Aggregate distributions during the continuance of
any Event of Default other than a Monetary Default shall not exceed the lesser
of (i) the aggregate amount permitted to be made during the continuance thereof
under Section 9.7.1, and (ii) the minimum amount that Borrower must distribute
to its shareholders in order to maintain compliance with Section 7.11.
9.8 Permitted Investments, Etc.
9.8.1 Notwithstanding the limitations set forth in Section 7.8, Borrower
may make the following Permitted Investments, so long as (i) the aggregate
amount of all Permitted Investments under this Section 9.8.1 does not exceed, at
any time, twenty-five percent (25%) of Borrower's Gross Asset Value, and (ii)
the aggregate amount of each of the following categories of Permitted
Investments does not exceed the specified percentage of Borrower's Gross Asset
Value, in each case as of the date made:
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Maximum Percentage
of Gross Asset
Permitted Investment Value
-------------------- -----
Land: 5%
Securities: 10%
Investment Mortgages: 10%
Investment Partnerships: 10%
Non-Core Properties: 10%
For purposes of calculating compliance with the foregoing: (1) (i) the amount of
each Investment in an Investment Partnership (other than an Effectively
Controlled Investment Partnership), a Security, an Investment Mortgage, a
Non-Core Property or Land, will be deemed to be the lesser of the original
Acquisition Price thereof or the amount at which such asset is carried on
Borrower's books, and (ii) holdings in each Effectively Controlled Investment
Partnership shall be valued as described in the definition of "Gross Asset
Value," based on the underlying Properties held by such Effectively Controlled
Investment Partnership; and (2) in the case of each Investment in Land,
Investment Mortgages, Non-Core Properties and Investment Partnerships, the
nature of each underlying real property asset and the conduct of business in
respect thereof shall in all respects comply with the limitations set forth in
Section 7.8.
9.8.2 In addition:
(a) at no time shall the sum of (i) the percentage of Borrower's
Gross Asset Value attributable to assets held in Subsidiaries (defined
in accordance with the definition of "Gross Asset Value"), plus (ii) the
value of Borrower's interests in Investment Partnerships (determined in
accordance with Section 9.8.1), expressed as a percentage of Borrower's
Gross Asset Value, exceed twenty percent (20%); and
(b) at no time shall the percentage of Borrower's Gross Asset
Value attributable to Construction in Process exceed fifteen percent
(15%).
9.9 Calculation. Each of the foregoing ratios and financial requirements
shall be calculated as of the last day of each Fiscal Quarter, but shall be
satisfied at all times. For purposes of determining compliance with Sections
9.4, 9.5 and 9.6, the period covered thereby shall be the Fiscal Quarter ending
on such last day.
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ARTICLE X
---------
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
--------------------------------------
10.1 Events of Default. Each of the following occurrences shall constitute an
Event of Default under this Agreement:
10.1.1 Failure to Make Payments When Due. Borrower or any Guarantor
Subsidiary shall fail to pay (i) any amount due on the Termination Date, (ii)
any principal when due, (iii) any monthly payment of interest due hereunder on
or before the fifteenth calendar day of the month in which such interest first
becomes due, or (iv) any other interest on any Loan, or any fee or other amount
included within the Obligations, within five (5) days after the same becomes due
(and, for purposes of this Section 10.1.1, amounts stated to be payable
"immediately" or "upon demand" are due upon demand).
10.1.2 Distributions. Borrower shall breach any covenant set forth in
Section 7.11 or 9.7.
10.1.3 Breach of Financial Covenants. (i) Borrower shall fail to satisfy
any financial covenant set forth in Article IX (other than the requirements in
Section 9.4, 9.5, 9.6 and 9.7) and such failure shall continue for thirty (30)
days; or (ii) Borrower shall fail to satisfy any financial covenant set forth in
Section 9.4, 9.5 or 9.6 as of the last day of any Fiscal Quarter and as of the
last day of the next calendar month (determined, in the latter case, on the
basis of the three-month period ended as of such date).
10.1.4 Other Defaults. Borrower, or any Guarantor Subsidiary, shall fail
duly and punctually to perform or observe any agreement, covenant or obligation
binding on Borrower or such Guarantor Subsidiary under this Agreement or under
any of the other Loan Documents (other than as described in any other provision
of this Section 10.1), and with respect to agreements, covenants or obligations
for which no time period for performance is otherwise provided and for which
cure is possible, such failure shall continue for fifteen (15) days after
Borrower or such Guarantor Subsidiary knew of such failure (or such lesser
period of time as is mandated by applicable Requirements of Law); provided,
however, if such failure is not capable of cure within such fifteen (15) day
period, but is capable of cure, then if Borrower promptly undertakes action to
cure such failure and thereafter diligently prosecutes such cure to completion
within forty-five (45) days after Borrower or such Guarantor Subsidiary knew of
such failure, then Borrower or such Guarantor Subsidiary, as the case may be,
shall not be in default hereunder.
10.1.5 Breach of Representation or Warranty. Any representation or
warranty made or deemed made by Borrower or any Guarantor Subsidiary to Agent or
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any Lender herein or in any of the other Loan Documents or in any statement,
certificate or financial statements at any time given by Borrower pursuant to
any of the Loan Documents shall be false or misleading in any material respect
on the date as of which made.
10.1.6 Default as to Other Indebtedness. (i) Borrower or any Subsidiary
of Borrower shall have (A) failed to pay when due (beyond any applicable grace
period), any amount in respect of any Indebtedness of such Person (other than
the Obligations), if the aggregate amount of such other Indebtedness is Two
Hundred and Fifty Thousand Dollars ($250,000) or more; or (B) otherwise
defaulted (beyond any applicable grace period) under any Indebtedness of such
Person (other than the Obligations) if (1) the aggregate amount of such other
Indebtedness is One Million Dollars ($1,000,000) or more, and (2) the holder of
such Indebtedness has accelerated such Indebtedness; or (ii) any such other
Indebtedness shall have otherwise become payable, or be required to be purchased
or redeemed, prior to its scheduled maturity; or (iii) the holder(s) of any
Lien, in any amount, commence foreclosure of such Lien upon any Property having
an aggregate value in excess of Two Hundred Fifty Thousand Dollars ($250,000).
10.1.7 Involuntary Bankruptcy; Appointment of Receiver, etc.
(a) An involuntary case shall be commenced against Borrower or
any Subsidiary of Borrower and the petition shall not be dismissed
within sixty (60) days after commencement of the case, or a court having
jurisdiction shall enter a decree or order for relief in respect of any
such Person in an involuntary case, under any applicable bankruptcy,
insolvency or other similar law now or hereinafter in effect; or any
other similar relief shall be granted under any applicable federal,
state or foreign law; or
(b) A decree or order of a court (or courts) having jurisdiction
in the premises for the appointment of a receiver, liquidator,
sequestrator, trustee, custodian or other officer having similar powers
over Borrower or any Subsidiary of Borrower, or over all or a
substantial part of the property of any such Person, shall be entered;
or an interim receiver, trustee or other custodian of any such Person or
of all or a substantial part of the property of any such Person, shall
be appointed or a warrant of attachment, execution or similar process
against any substantial part of the property of any such Person, shall
be issued and any such event shall not be stayed, vacated, dismissed,
bonded or discharged within sixty (60) days of entry, appointment or
issuance.
10.1.8 Voluntary Bankruptcy; Appointment of Receiver, Etc. Borrower or
any Subsidiary of Borrower shall have an order for relief entered with respect
to it or
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commence a voluntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or shall consent to the entry of an
order for relief in an involuntary case, or to the conversion of an involuntary
case to a voluntary case, under any such law, or shall consent to the
appointment of or taking of possession by a receiver, trustee or other custodian
for all or a substantial part of its property; any such Person shall make any
assignment for the benefit of creditors or shall be unable or fail, or admit in
writing its inability, to pay its debts as such debts become due; or Borrower's
Board of Directors (or any committee thereof) adopts any resolution or otherwise
authorizes any action to approve any of the foregoing.
10.1.9 Judgments and Attachments. (i) Any money judgment (other than a
money judgment covered by insurance but only if the insurer has admitted
liability with respect to such money judgment), writ or warrant of attachment,
or similar process involving in any case an amount in excess of Two Hundred
Fifty Thousand Dollars ($250,000) shall be entered or filed against Borrower or
any Subsidiary of Borrower or their respective assets and shall remain
undischarged, unvacated, unbonded or unstayed for a period of thirty (30) days,
or (ii) any judgment or order of any court or administrative agency awarding
material damages shall be entered against any such Person in any action under
the Federal securities laws seeking rescission of the purchase or sale of, or
for damages arising from the purchase or sale of, any Securities, such judgment
or order shall have become final after exhaustion of all available appellate
remedies and, in Agent's judgment, the payment of such judgment or order would
have a Material Adverse Effect on Borrower.
10.1.10 Dissolution. Any order, judgment or decree shall be entered
against Borrower or any Subsidiary of Borrower decreeing its involuntary
dissolution or split up and such order shall remain undischarged and unstayed
for a period in excess of thirty (30) days; or Borrower or any Subsidiary of
Borrower shall otherwise dissolve or cease to exist (except for mergers of
Subsidiaries into Borrower pursuant to which Borrower is the surviving
corporation, and for voluntary dissolutions of Subsidiaries).
10.1.11 Validity of Loan Documents; Subordination of Obligations. If for
any reason (i) any Loan Document shall cease to be in full force and effect, or
(ii) (A) any Obligation shall be subordinated in right of payment to any other
liability of the Borrower or (B) any obligation of a Guarantor Subsidiary under
its Guaranty shall be subordinated in right of payment to any other liability of
such Guarantor Subsidiary; and, in any such case, such condition or event shall
continue for fifteen (15) days after Borrower or any Guarantor Subsidiary knew
of such condition or event.
10.1.12 ERISA Liabilities. Any Termination Event occurs which will or is
reasonably likely to subject Borrower or any ERISA Affiliate of Borrower to a
liability
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which Agent reasonably determines will have a Material Adverse Effect on
Borrower, or the plan administrator of any Benefit Plan applies for approval
under Section 412(d) of the Internal Revenue Code for a waiver of the minimum
funding standards of Section 412(a) of the Internal Revenue Code and Agent
reasonably determines that the business hardship upon which the Section 412(d)
waiver was based will or would reasonably be anticipated to subject Borrower or
any Subsidiary of Borrower to a liability which Agent determines will have a
Material Adverse Effect on Borrower.
10.1.13 Environmental Liabilities. Borrower or any Subsidiary of
Borrower becomes subject to any Liabilities and Costs which Agent reasonably
deems to have a Material Adverse Effect on Borrower arising out of or related to
(i) the Release or threatened Release at any Property of any Contaminant into
the environment, or any Remedial Action in response thereto, or (ii) otherwise
any violation of any Environmental Laws.
10.1.14 Solvency; Material Adverse Change. Borrower or any Subsidiary of
Borrower shall cease to be Solvent, or there shall have occurred any material
adverse change in the business, operations, properties, assets or condition
(financial or otherwise) of Borrower.
10.1.15 Guaranties. (a) Any Guarantor Subsidiary shall disavow, or
purport to revoke, its obligations under its Guaranty; or (b) any Guaranty shall
fail to be valid or enforceable in any material respect.
An Event of Default shall be deemed "continuing" until cured or waived
in writing in accordance with Section 12.4.
10.2 Rights and Remedies.
10.2.1 Acceleration, Etc.. Upon the occurrence of any Event of Default
described in the foregoing Section 10.1.7 or 10.1.8 with respect to Borrower,
the Commitments shall automatically and immediately terminate and the unpaid
principal amount of and any and all accrued interest on the Loans shall
automatically become immediately due and payable, with all additional interest
from time to time accrued thereon and without presentment, demand or protest or
other requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
or notice of acceleration), all of which are hereby expressly waived by
Borrower, and the obligations of Lenders to make any Loans hereunder shall
thereupon terminate; and upon the occurrence and during the continuance of any
other Event of Default, Agent shall, at the request of Requisite Lenders, or
may, with the consent of Requisite Lenders, by written notice to Borrower, (i)
declare that the
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Commitments are terminated, whereupon the Commitments and the obligation of
Lenders to make any Loan hereunder shall immediately terminate, and/or (ii)
declare the unpaid principal amount of, any and all accrued and unpaid interest
on the Loans and all of the other Obligations to be, and the same shall
thereupon be, immediately due and payable with all additional interest from time
to time accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
and of acceleration), all of which are hereby expressly waived by Borrower.
Without limiting Agent's authority hereunder, on or after the Termination Date,
Agent shall, at the request, or may, with the consent, of Requisite Lenders
exercise any or all rights and remedies under the Loan Documents or applicable
law. Upon the occurrence of and during the continuance of an Event of Default,
Agent shall be entitled to request and receive, by or through Borrower or
appropriate legal process, any and all information concerning Borrower, any
Subsidiary of Borrower, or any property of Borrower or any Subsidiary of
Borrower, which is reasonably available to or obtainable by Borrower.
10.2.2 Waiver of Demand. Demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower. Borrower also waives, to the extent
permitted by law, the benefit of all exemption laws.
10.2.3 Waivers, Amendments and Remedies. No delay or omission of Agent
or Lenders to exercise any right under any Loan Document shall impair such right
or be construed to be a waiver of any Event of Default or an acquiescence
therein, and any single or partial exercise of any such right shall not preclude
other or further exercise thereof or the exercise of any other right, and no
waiver, amendment or other variation of the terms, conditions or provisions of
the Loan Documents whatsoever shall be valid unless in a writing signed by Agent
after obtaining written approval thereof or the signature thereon of those
Lenders required to approve such waiver, amendment or other variation, and then
only to the extent in such writing specifically set forth. All remedies
contained in the Loan Documents or by law afforded shall be cumulative and all
shall be available to Agent and Lenders until the Obligations have been paid in
full, the Commitments have expired or terminated and this Agreement has been
terminated.
10.3 Rescission. If at any time after acceleration of the maturity of the
Loans, Borrower shall pay all arrears of interest and all payments on account of
principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law, on
overdue interest, at the rates specified in this Agreement) and all Events of
Default and Unmatured Events of Default (other than nonpayment of principal of
and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.4, then by
written notice to Borrower, Requisite Lenders may elect, in their sole
discretion, to
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rescind and annul the acceleration and its consequences; but such action shall
not affect any subsequent Event of Default or Unmatured Event of Default or
impair any right or remedy consequent thereon. The provisions of the preceding
sentence are intended merely to bind Lenders to a decision which may be made at
the election of Requisite Lenders; they are not intended to benefit Borrower and
do not give Borrower the right to require Lenders to rescind or annul any
acceleration hereunder, even if the conditions set forth herein are met.
ARTICLE XI
----------
AGENCY PROVISIONS
-----------------
11.1 Appointment.
11.1.1 Each Lender hereby (i) designates and appoints Xxxxx Fargo as
Agent of such Lender under this Agreement and the Loan Documents, (ii)
authorizes and directs Agent to enter into the Loan Documents other than this
Agreement for the benefit of Lenders, and (iii) authorizes Agent to take such
action on its behalf under the provisions of this Agreement and the Loan
Documents and to exercise such powers as are set forth herein or therein,
together with such other powers as are reasonably incidental thereto, subject to
the limitations referred to in Sections 11.10.1 and 11.10.2. Agent agrees to act
as such on the express conditions contained in this Article XI.
11.1.2 The provisions of this Article XI are solely for the benefit of
Agent and Lenders, and Borrower shall not have any rights to rely on or enforce
any of the provisions hereof (other than as expressly set forth in Sections
11.3, 11.9 and 11.12), provided, however, that the foregoing shall in no way
limit Borrower's obligations under this Article XI. In performing its functions
and duties under this Agreement, Agent shall act solely as Agent of Lenders and
does not assume and shall not be deemed to have assumed any obligation toward or
relationship of agency or trust with or for Borrower or any other Person.
11.2 Nature of Duties. Agent shall not have any duties or responsibilities
except those expressly set forth in this Agreement or in the Loan Documents. The
duties of Agent shall be administrative in nature. Subject to the provisions of
Sections 11.5 and 11.7, Agent shall administer the Loans in the same manner as
it administers its own loans. Promptly following the effectiveness of this
Agreement, Agent shall send to each Lender its originally executed Note and the
executed original, to the extent the same are available in sufficient numbers,
of each other Loan Document other than the Notes in favor of other Lenders and
filed or recorded security document or instruments, if any, with the latter to
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be held and retained by Agent for the benefit of all Lenders. Agent shall not
have by reason of this Agreement a fiduciary relationship in respect of any
Lender. Nothing in this Agreement or any of the Loan Documents, expressed or
implied, is intended or shall be construed to impose upon Agent any obligation
in respect of this Agreement or any of the Loan Documents except as expressly
set forth herein or therein. Each Lender shall make its own independent
investigation of the financial condition and affairs of Borrower and each
Unencumbered Pool Property in connection with the making and the continuance of
the Loans hereunder and shall make its own appraisal of the creditworthiness of
Borrower and each Guarantor Subsidiary, and, except as specifically provided
herein, Agent shall not have any duty or responsibility, either initially or on
a continuing basis, to provide any Lender with any credit or other information
with respect thereto, whether coming into its possession before the Closing Date
or at any time or times thereafter.
11.3 Loan Disbursements.
11.3.1 Not later than 1:00 p.m. (Pacific Coast time) on the same
Business Day following receipt of a Notice of Borrowing, Agent shall send a copy
thereof by facsimile to each other Lender and shall otherwise notify each Lender
of the proposed Borrowing and the Funding Date. Except with respect to Swing
Line Borrowings to be funded by Agent pursuant to Section 2.1.1(b)(ii), each
Lender shall make available to Agent (or the funding bank or entity designated
by Agent), the amount of such Lender's Pro Rata Share of such Borrowing in
immediately available funds not later than the times designated in Section
11.3.2. Unless Agent shall have been notified by any Lender prior to such time
for funding in respect of any Borrowing that such Lender does not intend to make
available to Agent such Lender's Pro Rata Share of such Borrowing, Agent may
assume that such Lender has made such amount available to Agent. In any case
where a Lender does not for any reason make available to Agent such Lender's Pro
Rata Share of such Borrowing, Agent, in its sole discretion, may, but shall not
be obligated to, fund to Borrower such Lender's Pro Rata Share of such
Borrowing; provided, however, that Agent shall first have obtained Borrower's
concurrence in such funding by Agent if the same is to be made later than the
Funding Date for the subject Borrowing. If the amount so funded by Agent is not
in fact made available to Agent by the responsible Lender, then Borrower agrees
to repay to Agent such amount, together with interest thereon at the Base Rate
for each day from the date such amount is made available to Borrower until the
date such amount is repaid to Agent, not later than three (3) Business Days
following Agent's demand to Borrower that such repayment be made. In addition,
such Lender agrees to pay to Agent forthwith on demand such corresponding
amount, together with interest thereon at the Federal Funds Rate. If such Lender
shall pay to Agent such corresponding amount, such amount so paid shall
constitute such Lender's Pro Rata Share of such
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Borrowing, and if both such Lender and Borrower shall have paid and repaid,
respectively, such corresponding amount, Agent shall promptly return to Borrower
such corresponding amount in same day funds; interest paid by Borrower in
respect of such corresponding amount shall be prorated, as of the date of
payment thereof by such Lender to Agent. In the event that Agent shall not have
funded such Lender's Pro Rata Share under this Section 11.3.1, then Borrower
shall not be obligated to accept a late funding of such Lender's Pro Rata Share
if such funding is made more than two (2) Business Days following the applicable
Funding Date. If Borrower declines to accept such delinquent funding, Agent
shall promptly return to such Lender the amount of such funding. Nothing in this
Section 11.3.1 shall alter the respective rights and obligations of the parties
hereunder in respect of a Defaulting Lender or a Non-Pro Rata Loan.
11.3.2 Requests by Agent for funding by Lenders of Loans will be made by
telecopy. Each Lender shall make the amount of its Loan available to Agent in
Dollars and in immediately available funds, to such bank and account, in El
Segundo, California (or to such bank and account in such other place within the
United States) as Agent may designate, not later than 10:00 a.m. (Pacific Coast
time) on the Funding Date designated in the Notice of Borrowing with respect to
such Loan, but in no event earlier than two (2) Business Days following Lender's
receipt of the applicable Notice of Borrowing.
11.3.3 If (a) as of 10:00 a.m. (Pacific Coast time) on the second (2nd)
Business Day after the Swing Line Lender has funded any Swing Line Borrowing
(the date such Swing Line Borrowing was funded, the "Swing Line Funding Date"),
Borrower has neither (i) repaid such Swing Line Borrowing in full, nor (ii)
notified the Swing Line Lender in writing that Borrower intends to repay such
Swing Line Borrowing in full on the next Business Day, nor (iii) timely
delivered a Notice of Borrowing requesting a proposed Funding Date, no later
than the third (3rd) Business Day after such Swing Line Funding Date, with
respect to a Loan in a principal amount sufficient to repay such Swing Line
Borrowing in full; or (b) as of 11:00 a.m. (Pacific Coast time) on the third
(3rd) Business Day after such Swing Line Funding Date, (i) Borrower has not
repaid such Swing Line Borrowing in full, or (ii) the conditions precedent to
any requested Loan the proceeds of which were to have been used (in whole or in
part) to repay such Swing Line Borrowing have not been satisfied; or (c) at any
time prior to the repayment of any Swing Line Borrowing, an Event of Default
shall have occurred or the Loans shall be accelerated, or the Termination Date
shall occur, for any reason whatsoever: (1) the Swing Line Lender shall promptly
(or, if an Event of Default has occurred but the Loans have not been accelerated
and the Termination Date has not occurred, may) notify each Lender by telephone
(confirmed promptly by telex, facsimile transmission or cable), telex, facsimile
transmission, or cable of the amount of such Swing Line Borrowing; and (2) each
Lender
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shall (subject to the limitation that no Lender shall be required to fund any
Loan that would cause its Loans to exceed such Lender's Commitment), (A) in a
case described in clause (a) of this Section 11.3.3, before 10:00 a.m. (Pacific
Coast time) on the next Business Day, or (B) in a case described in clause (b)
or clause (c) of this Section 11.3.3, before 12:00 noon (Pacific Coast time) on
the date of such notice, pay to the Swing Line Lender, to such bank and account
in El Segundo, California (or to such bank and account in such other place
within the United States) as the Swing Line Lender may designate, in immediately
available funds, such Lender's Pro Rata Share of the principal amount of such
Swing Line Borrowing. Upon such funding, each Lender shall be deemed to have
acquired from the Swing Line Lender (and the Swing Line Lender shall be deemed
to have assigned to each such Lender) a percentage interest in such Swing Line
Borrowing equal to such Lender's Pro Rata Share, and, for purposes of
determining the availability of Swing Line Borrowings or Loans, such Swing Line
Borrowing shall be deemed a Loan (and no longer a Swing Line Borrowing);
provided that the obligations of the Lenders under this Section 11.3.3 shall not
be subject to the notice or amount requirements, or to satisfaction of
conditions precedent, otherwise applicable to the making of Loans. Each Lender's
obligation to fund, and to purchase from the Swing Line Lender, its Pro Rata
Share of a Swing Line Borrowing pursuant to this Section 11.3.3 shall be
absolute and unconditional under any and all circumstances (including, without
limitation, irrespective of any intervening bankruptcy of Borrower or
acceleration of the Loans). It is not the parties' intent that the obligations
of the Lenders under this Section 11.3.3 constitute guaranties or obligations of
suretyship. If and to the extent, however, that the obligations of any Lender
under this Section 11.3.3 are determined to be those of a guarantor or surety,
such Lender, with full knowledge of the consequences thereof, hereby expressly
waives the benefit of each and every right or defense of a guarantor or surety
the effect of which would relieve such Lender of all or any portion of its
obligations under this Section 11.3.3. In the event that any Lender fails to pay
to the Swing Line Lender when due any amount it is required to fund under this
Section 11.3.3, such Lender and Borrower severally agree to pay to the Swing
Line Lender, on demand, the amount such Lender has failed to so pay, together
with interest thereon for each day from the date on which such payment was due
until the date such amount is repaid to the Agent, at (p) in the case of
Borrower, the Base Rate, or (q) in the case of such Lender, the Federal Funds
Rate.
11.3.4 Nothing in this Section 11.3 shall be deemed to relieve any
Lender of its obligation (subject only to Section 2.1.1(b) in respect of the
funding of Swing Line Borrowings) hereunder to make its Pro Rata Share of Loans
on any Funding Date, nor shall any Lender be responsible for the failure of any
other Lender to perform its obligations to make any Loan hereunder, and the
Commitment of any Lender shall not be increased or decreased as a result of the
failure by any other Lender to perform its obligation to make a Loan.
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11.4 Distribution and Apportionment of Payments.
11.4.1 Subject to Section 11.4.2, payments actually received by Agent
for the account of Lenders shall be paid to them promptly after receipt thereof
by Agent, but in any event within two (2) Business Days, provided that Agent
shall pay to Lenders interest thereon, at the lesser of (i) Federal Funds Rate
and (ii) the rate of interest applicable to such Loans, from the Business Day
following receipt of such funds by Agent until such funds are paid in
immediately available funds to Lenders. Subject to Section 11.4.2, all payments
of principal and interest in respect of outstanding Loans, all payments of the
fees described in this Agreement (except those fees due Agent from Borrower as
referred to in Sections 2.5.2 and 4.1.11), and all payments in respect of any
other Obligations shall be allocated among such of Lenders as are entitled
thereto, in proportion to their respective Pro Rata Shares or otherwise as
provided herein. Agent shall promptly distribute, but in any event within two
(2) Business Days, to each Lender at its primary address set forth on the
appropriate signature page hereof or on the Assignment and Assumption, or at
such other address as a Lender may request in writing, such funds as it may be
entitled to receive, provided that Agent shall in any event not be bound to
inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender and may suspend all payments and seek appropriate
relief (including, without limitation, instructions from Requisite Lenders or
all Lenders, as applicable, or an action in the nature of interpleader) in the
event of any doubt or dispute as to any apportionment or distribution
contemplated hereby. The order of priority herein is set forth solely to
determine the rights and priorities of Lenders as among themselves and may at
any time or from time to time be changed by Lenders as they may elect, in
writing in accordance with Section 12.4, without necessity of notice to or
consent of or approval by Borrower or any other Person. All payments or other
sums received by Agent for the account of Lenders shall not constitute property
or assets of Agent and shall be held by Agent, solely in its capacity as agent
for itself and the other Lenders, subject to the Loan Documents.
11.4.2 Notwithstanding any provision hereof to the contrary: (a) The
Unused Facility Fee shall be apportioned among the Lenders in proportion to the
actual daily unused portions of their respective Commitments (treating Swing
Line Borrowings, for such purpose, as usage of Agent's Commitment above); and
(b) until such time as a Defaulting Lender has funded its Pro Rata Share of a
Loan which was previously a Non Pro Rata Loan, or all other Lenders have
received payment in full (whether by repayment or prepayment) of the principal
and interest due in respect of such Non Pro Rata Loan, all of the Obligations
owing to such Defaulting Lender hereunder shall be subordinated in right of
payment, as provided in the following sentence, to the prior payment in full of
all principal, interest and fees in respect of all Non Pro Rata Loans in which
the Defaulting
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Lender has not funded its Pro Rata Share (such principal, interest and fees
being referred to as "Senior Loans"). All amounts paid by Borrower and otherwise
due to be applied to the Obligations owing to the Defaulting Lender pursuant to
the terms hereof shall be distributed by Agent to the other Lenders in
accordance with their respective Pro Rata Shares (recalculated for purposes
hereof to exclude the Defaulting Lender's Commitment), until all Senior Loans
have been paid in full. This provision governs only the relationship among
Agent, each Defaulting Lender, and the other Lenders; nothing hereunder shall
limit the obligation of Borrower to repay all Loans in accordance with the terms
of this Agreement. The provisions of this section shall apply and be effective
regardless of whether an Event of Default occurs and is then continuing, and
notwithstanding (i) any other provision of this Agreement to the contrary, (ii)
any instruction of Borrower as to its desired application of payments or (iii)
the suspension of such Defaulting Lender's right to vote on matters which are
subject to the consent or approval of Requisite Lenders or all Lenders. No
Unused Facility Fee shall accrue in favor of, or be payable to, such Defaulting
Lender from the date of any failure to fund Loans or reimburse Agent for any
Liabilities and Costs as herein provided until such failure has been cured, and
Agent shall be entitled to (1) withhold or setoff, and to apply to the payment
of the defaulted amount and any related interest, any amounts to be paid to such
Defaulting Lender under this Agreement, and (2) bring an action or suit against
such Defaulting Lender in a court of competent jurisdiction to recover the
defaulted amount and any related interest. In addition, the Defaulting Lender
shall indemnify, defend and hold Agent and each of the other Lenders harmless
from and against any and all Liabilities and Costs, plus interest thereon at the
Default Rate, which they may sustain or incur by reason of or as a direct
consequence of the Defaulting Lender's failure or refusal to abide by its
obligations under this Agreement.
11.5 Rights, Exculpation, Etc. Neither Agent, any Affiliate of Agent, nor
any of their respective officers, directors, employees, agents, attorneys or
consultants, shall be liable to any Lender for any action taken or omitted by
them hereunder or under any of the Loan Documents, or in connection herewith or
therewith, except that Agent shall be liable for its gross negligence or willful
misconduct, or willful misconduct in the performance of its express obligations
hereunder. In the absence of gross negligence or willful misconduct, Agent shall
not be liable for any apportionment or distribution of payments made by it in
good faith pursuant to Section 11.4, and if any such apportionment or
distribution is subsequently determined to have been made in error the sole
recourse of any Person to whom payment was due, but not made, shall be to
recover from the recipients of such payments any payment in excess of the amount
to which they are determined to have been entitled. Agent shall not be
responsible to any Lender for any recitals, statements, representations or
warranties herein or for the execution, effectiveness, genuineness, validity,
enforceability, collectibility or sufficiency of this
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Agreement or any of the other Loan Documents, or any of the transactions
contemplated hereby and thereby; or for the financial condition of Borrower or
any of its Affiliates. Agent shall not be required to make any inquiry
concerning either the performance or observance of any of the terms, provisions
or conditions of this Agreement or any of the Loan Documents or the financial
condition of Borrower or any of its Affiliates, or the existence or possible
existence of any Unmatured Event of Default or Event of Default.
11.6 Reliance. Agent shall be entitled to rely upon any written notices,
statements, certificates, orders or other documents, telecopies or any telephone
message believed by it in good faith to be genuine and correct and to have been
signed, sent or made by the proper Person, and with respect to all matters
pertaining to this Agreement or any of the Loan Documents and its duties
hereunder or thereunder, upon advice of legal counsel (including counsel for
Borrower), independent public accountant and other experts selected by it.
11.7 Indemnification. To the extent that Agent is not reimbursed and
indemnified by Borrower, Lenders will reimburse, within ten (10) Business Days
after notice from Agent, and indemnify and defend Agent for and against any and
all Liabilities and Costs which may be imposed on, incurred by, or asserted
against it in any way relating to or arising out of this Agreement or any of the
other Loan Documents or any action taken or omitted by Agent or under this
Agreement or any of the other Loan Documents, in proportion to each Lender's Pro
Rata Share; provided that no Lender shall be liable for any portion of such
Liabilities and Costs resulting from Agent's gross negligence or willful
misconduct or in respect of normal administrative costs and expenses incurred by
Agent (prior to any Event of Default or any Unmatured Event of Default) in
connection with its performance of administrative duties under this Agreement
and the other Loan Documents. The obligations of Lenders under this Section 11.7
shall survive the payment in full of all Obligations and the termination of this
Agreement. In the event that after payment and distribution of any amount by
Agent to Lenders, any Lender or third party, including Borrower, any creditor of
Borrower or a trustee in bankruptcy, recovers from Agent any amount found to
have been wrongfully paid to Agent or disbursed by Agent to Lenders, then
Lenders, in proportion to their respective Pro Rata Shares, shall reimburse
Agent for all such amounts. Notwithstanding the foregoing, Agent shall not be
obligated to advance Liabilities and Costs and may require the deposit by each
Lender of its Pro Rata Share of any material Liabilities and Costs anticipated
by Agent before they are incurred or made payable.
11.8 Agent Individually. With respect to its Pro Rata Share of the
Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Requisite Lenders" or
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any similar terms may include Agent in its individual capacity as a Lender or
one of the Requisite Lenders, but Requisite Lenders shall not include Agent
solely in its capacity as Agent and need not necessarily include Agent in its
capacity as a Lender. Agent and any Lender and its Affiliates may accept
deposits from, lend money to, and generally engage in any kind of banking, trust
or other business with Borrower or any of its Affiliates as if it were not
acting as Agent or Lender pursuant hereto.
11.9 Successor Agent; Resignation of Agent; Removal of Agent.
11.9.1 Agent may resign from the performance of all its functions and
duties hereunder at any time by giving at least thirty (30) Business Days' prior
written notice to Lenders and Borrower, and shall automatically cease to be
Agent hereunder in the event a petition in bankruptcy shall be filed by or
against Agent or the Federal Deposit Insurance Corporation or any other
Governmental Authority shall assume control of Agent or Agent's interests under
the Facility. Further, Requisite Lenders may remove Agent at any time, for good
cause, by giving at least thirty (30) Business Days' prior written notice to
Agent, Borrower and all other Lenders. Such resignation or removal shall take
effect upon the acceptance by a successor Agent of appointment pursuant to
Section 11.9.2 or 11.9.3; concurrent with the effectiveness of such appointment,
Borrower shall pay to the retiring or removed Agent any accrued and unpaid
agency fee, or Agent shall refund to Borrower any prepaid agency fee, in each
case prorated to the effective date of such appointment of a successor Agent.
11.9.2 Upon any such notice of resignation by or removal of Agent,
Requisite Lenders shall appoint a successor Agent with the consent of Borrower,
which consent shall not be unreasonably withheld or delayed and which consent
shall not be required if there shall then exist any Event of Default. Any
successor Agent must be a bank (i) the senior debt obligations of which (or such
bank's parent's senior unsecured debt obligations) are rated not less than
BBB/Baa2 by Moody's or Standard & Poor's and (ii) which has total assets in
excess of Ten Billion Dollars ($10,000,000,000). Such successor Agent shall
separately confirm in writing with Borrower the fee to be paid to such Agent
pursuant to Section 2.5.2.
11.9.3 If a successor Agent shall not have been so appointed within said
thirty (30) Business Day period, the retiring or removed Agent, with (unless an
Event of Default has occurred and is continuing) the consent of Borrower (which
may not be unreasonably withheld or delayed), shall then appoint a successor
Agent who shall meet the requirements described in Section 11.9.2 and who shall
serve as Agent until such time, if any, as Requisite Lenders, with the consent
of Borrower, appoint a successor Agent as provided above. Each successor Agent
appointed pursuant to this Section 11.9 shall concurrently assume the rights and
obligations of the Swing Line Lender under this
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Agreement (including the Swing Line Lender's commitment to fund Swing Line
Borrowings and its interest in outstanding advances under the Swing Line). Upon
the acceptance of any appointment as Agent hereunder by a successor Agent, such
successor Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Agent and Swing Line
Lender, and the retiring Agent and Swing Line Lender shall be discharged from
its duties and obligations under this Agreement. Notwithstanding any provision
of Section 11.12 to the contrary, the commitment of the Swing Line Lender to
fund Swing Line Borrowings and the Swing Line Lender's interest in outstanding
Swing Line Borrowings may not be assigned to any Person other than a Person who
concurrently becomes both a successor Agent pursuant to this Section 11.9 and
the Swing Line Lender.
11.10 Consent and Approvals.
11.10.1 Each of the following shall require the approval or consent of
Requisite Lenders:
(a) Approval of each new Unencumbered Pool Property (Section
3.1);
(b) Approval of any material amendment of organizational
documents (Section 8.2);
(c) Approval of certain changes in management;
(d) Acceleration following an Event of Default (Section 10.2.1)
or rescission of such acceleration (Section 10.3);
(e) Approval of the exercise of rights and remedies under the
Loan Documents following an Event of Default (Section 10.2.1);
(f) Removal of Agent and appointment of a successor (Section
11.9);
(g) Approval of certain changes in GAAP affecting calculation of
financial covenants (Section 12.3);
(h) Except as referred to in Section 11.10.2 or 11.11.1,
approval of any amendment, modification or termination of this
Agreement, or waiver of any provision herein (Section 12.4);
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(i) Approval of any waiver of late charge pursuant to Section
2.4.5 for late payments by Borrower in excess of two (2) times in any
twelve (12) month period;
(j) Approval of any modification to a Grandfathered Ground Lease
(Section 8.6); and
(k) Approval of any Guarantor Subsidiary (Section 3.1).
11.10.2 Each amendment, modification or waiver specifically enumerated
in Section 12.4.1 shall require the consent of all Lenders. Each amendment,
modification or waiver specifically enumerated in Section 12.4.2 shall require
the consent of Agent and Requisite Lenders.
11.10.3 In addition to the required consents or approvals referred to in
Section 11.10.1, Agent may at any time request instructions from Requisite
Lenders with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such instructions
are promptly requested, Agent shall be absolutely entitled to refrain from
taking any action or to withhold any approval and shall not be under any
liability whatsoever to any Person for refraining from taking any action or
withholding any approval under any of the Loan Documents until it shall have
received such instructions from Requisite Lenders. Without limiting the
foregoing, no Lender shall have any right of action whatsoever against Agent as
a result of Agent acting or refraining from acting under this Agreement or any
of the other Loan Documents in accordance with the instructions of Requisite
Lenders or, where applicable, all Lenders. Agent shall promptly notify each
Lender at any time that the Requisite Lenders have instructed Agent to act or
refrain from acting pursuant hereto.
11.10.4 Each Lender agrees that any action taken by Agent at the
direction or with the consent of Requisite Lenders in accordance with the
provisions of this Agreement or any Loan Document, and the exercise by Agent at
the direction or with the consent of Requisite Lenders of the powers set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, shall be authorized and binding upon all Lenders, except for actions
specifically requiring the approval of all Lenders. All communications from
Agent to Lenders requesting Lenders' determination, consent, approval or
disapproval (i) shall be given in the form of a written notice to each Lender,
(ii) shall be accompanied by a description of the matter or thing as to which
such determination, approval, consent or disapproval is requested, or shall
advise each Lender where such matter or thing may be inspected, or shall
otherwise describe the matter or issue to be resolved, (iii) shall include, if
reasonably requested by a Lender and to the
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extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower in respect of the matter
or issue to be resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply promptly,
but in any event within ten (10) Business Days (the "Lender Reply Period").
Unless a Lender shall give written notice to Agent that it objects to the
recommendation or determination of Agent (together with a written explanation of
the reasons behind such objection) within the Lender Reply Period, such Lender
shall be deemed to have approved of or consented to such recommendation or
determination. With respect to decisions requiring the approval of Requisite
Lenders or all Lenders, Agent shall submit its recommendation or determination
for approval of or consent to such recommendation or determination to all
Lenders and upon receiving the required approval or consent shall follow the
course of action or determination recommended to Lenders by Agent or such other
course of action recommended by Requisite Lenders, and each non-responding
Lender shall be deemed to have concurred with such recommended course of action.
11.11 Agency Provisions Relating to Certain Enforcement Actions.
11.11.1 Agent is hereby authorized on behalf of all Lenders, without the
necessity of any notice to or further consent from any Lender, to waive the
imposition of late fees provided for in Section 2.4.5 up to a maximum of two (2)
times during any calendar year, including any extensions.
11.11.2 Should Agent (i) employ counsel for advice or other
representation (whether or not any suit has been or shall be filed) with respect
to any of the Loan Documents, or (ii) commence any proceeding or in any way seek
to enforce its rights or remedies under the Loan Documents, each Lender, upon
demand therefor from time to time, shall contribute its share (based on its Pro
Rata Share) of the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers, court costs and fees and expenses of attorneys to the extent not
otherwise reimbursed by Borrower; provided that Agent shall not be entitled to
reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between Agent and other Lenders unless Agent shall be
the prevailing party in any such dispute. Any loss of principal and interest
resulting from any Event of Default shall be shared by Lenders in accordance
with their respective Pro Rata Shares. It is understood and agreed that in the
event Agent determines it is necessary to engage counsel for Lenders from and
after the occurrence of an Event of Default, said counsel shall be selected by
Agent.
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11.12 Assignments and Participations.
11.12.1 After first obtaining the approval of Agent and (provided that
no Event of Default then exists) Borrower, which approval will not be
unreasonably withheld, each Lender may assign, to one or more Eligible
Assignees, all or a portion of its rights and obligations under this Agreement
(including without limitation all or a portion of its Commitment and the Loans
owing to it) and other Loan Documents; provided, however, that (i) each such
assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's rights and obligations under this Agreement and other Loan
Documents, and the assignment shall cover the same percentage of such Lender's
Commitment and Loans, (ii) unless Agent and Borrower otherwise consent, the
aggregate amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Assumption with respect to such assignment) shall in no event be less than
Ten Million Dollars ($10,000,000) and shall be an integral multiple of One
Million Dollars ($1,000,000), (iii) after giving effect to such assignment, the
aggregate amount of the Commitment retained by the assigning Lender shall in no
event be less than Ten Million Dollars ($10,000,000), (iv) at all times prior to
its resignation or replacement, Agent's Commitment shall be equal to or exceed
the Commitment of each other Lender, (v) the parties to each such assignment
shall execute and deliver to Agent, for its approval and acceptance (and, unless
an Event of Default has occurred and is continuing, for acknowledgment by
Borrower), an Assignment and Assumption, and (vi) Agent shall receive from the
assignor a processing fee of Three Thousand Dollars ($3,000). Unless Agent or
Borrower (if Borrower's approval is required) gives written notice to the
assigning Lender that it objects to the proposed assignment (together with a
written explanation of the reasons behind such objection) within ten (10)
Business Days following receipt of the assigning Lender's written request for
approval of the proposed assignment, Agent or Borrower, as the case may be,
shall be deemed to have approved such assignment. Upon such execution, delivery,
approval and acceptance, and upon the effective date specified in the applicable
Assignment and Assumption, (X) the assignee thereunder shall be a party hereto
and, to the extent that rights and obligations hereunder have been assigned to
(and assumed by) it pursuant to such Assignment and Assumption, have the rights
and obligations of a Lender hereunder, and (Y) the assigning Lender thereunder
shall, to the extent that rights and obligations hereunder have been assigned by
it (and assumed by its assignee) pursuant to such Assignment and Assumption,
relinquish its rights and be released from its obligations under this Agreement.
11.12.2 By executing and delivering an Assignment and Assumption, the
assigning Lender thereunder and the assignee thereunder confirm to and agree
with each other and the other parties hereto as follows: (i) other than as
provided in such
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Assignment and Assumption, such assigning Lender makes no representation or
warranty and assumes no responsibility with respect to any statements,
warranties or representations made in or in connection with this Agreement or
any other Loan Document or the execution, legality, validity, enforceability,
genuineness, sufficiency or value of this Agreement or any other Loan Document
or any other instrument or document furnished pursuant hereto; (ii) such
assigning Lender makes no representation or warranty and assumes no
responsibility with respect to the financial condition of Borrower, any
Guarantor Subsidiary or any of Borrower's Affiliates or the performance or
observance by Borrower of any of its obligations under any Loan Document or any
other instrument or document furnished pursuant hereto; (iii) such assignee
confirms that it has received a copy of this Agreement, together with copies of
the financial statements referred to in Article V or delivered pursuant to
Article VI to the date of such assignment and such other Loan Documents and
other documents and information as it has deemed appropriate to make its own
credit analysis and decision to enter into such Assignment and Assumption; (iv)
such assignee will, independently and without reliance upon Agent, such
assigning Lender 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 Agreement; (v) such assignee
appoints and authorizes Agent to take such action as Agent on its behalf and to
exercise such powers under this Agreement and the other Loan Documents as are
delegated to Agent by the terms hereof and thereof, together with such powers as
are reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the terms
of this Agreement are required to be performed by it as a Lender.
11.12.3 Agent shall maintain, at its address referred to on the
counterpart signature pages hereof, a copy of each Assignment and Assumption
delivered to and accepted by it and shall record in the Loan Account the names
and addresses of each Lender and the Commitment of, and principal amount of the
Loans owing to, such Lender from time to time. Borrower, Agent and Lenders may
treat each Person whose name is recorded in the Loan Account as a Lender
hereunder for all purposes of this Agreement.
11.12.4 Upon its receipt of an Assignment and Assumption executed by an
assigning Lender and an assignee, Agent shall, if such Assignment and Assumption
has been properly completed and is in substantially the form of Exhibit A, (i)
accept such Assignment and Assumption, (ii) record the information contained
therein in the Loan Account, and (iii) give prompt notice thereof to Borrower
(and, unless an Event of Default has occurred and is continuing, obtain
Borrower's acknowledgment thereon). Upon request, Borrower will execute and
deliver to Agent an appropriate replacement promissory note or replacement
promissory notes in favor of each assignee (and assignor,
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if such assignor is retaining a portion of its Commitment and Loans) reflecting
such assignee's (and assignor's) Pro Rata Share(s) of the Facility. Upon
execution and delivery of such replacement promissory notes the original
promissory note or notes evidencing all or a portion of the Commitments and
Loans being assigned shall be canceled and returned to Borrower.
11.12.5 Each Lender may sell participations to one or more banks or
other entities in or to all or a portion of its rights and obligations under
this Agreement (including without limitation all or a portion of its Commitment
and the Loans owing to it) and other Loan Documents; provided, however, that (i)
such Lender's obligations under this Agreement (including without limitation its
Commitment to Borrower hereunder) shall remain unchanged, (ii) such Lender shall
remain solely responsible to the other parties hereto for the performance of
such obligations, (iii) Borrower, Agent and the other Lenders shall continue to
deal solely and directly with such Lender in connection with such Lender's
rights and obligations under this Agreement and with regard to any and all
payments to be made under this Agreement, and (iv) the holder of any such
participation shall not be entitled to voting rights under this Agreement except
for voting rights with respect to (A) increases in the Facility; (B) extensions
of the Termination Date, except as provided in Section 2.1.4; and (C) decreases
in the interest rates described in this Agreement. No participant shall be
entitled to vote on any matter until the Lender with which such participant is
participating in the Facility and the Loans confirms such participant's status
as a participant hereunder.
11.12.6 Borrower will use reasonable efforts to cooperate with Agent and
Lenders in connection with the assignment of interests under this Agreement or
the sale of participations herein.
11.12.7 Anything in this Agreement to the contrary notwithstanding, and
without the need to comply with any of the formal or procedural requirements of
this Agreement, including this Section 11.12, any Lender may at any time and
from time to time pledge and assign all or any portion of its rights under all
or any of the Loan Documents to a Federal Reserve Bank; provided that no such
pledge or assignment shall release such Lender from its obligations thereunder.
To facilitate any such pledge or assignment, Agent shall, at the request of such
Lender, enter into a letter agreement with the Federal Reserve Bank in
substantially the form of the exhibit to Appendix C to the Federal Reserve Bank
of New York Operating Circular No. 12.
11.12.8 Anything in this Agreement to the contrary notwithstanding, any
Lender may assign all or any portion of its rights and obligations under this
Agreement to another branch or Affiliate of such Lender without first obtaining
the approval of Agent and Borrower, provided that (i) at the time of such
assignment such Lender is not a
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Defaulting Lender, (ii) such Lender gives Agent and Borrower at least fifteen
(15) days' prior written notice of any such assignment, (iii) the parties to
each such assignment execute and deliver to Agent an Assignment and Assumption,
and (iv) Agent receives from assignor a processing fee of Three Thousand Dollars
($3,000).
11.12.9 No assignee of any rights and obligations under this Agreement
shall be permitted to subassign such rights and obligations.
11.12.10 No Lender shall be permitted to assign or sell all or any
portion of its rights and obligations under this Agreement to Borrower or any
Affiliate of Borrower.
11.13 Ratable Sharing. Subject to Sections 11.3 and 11.4, Lenders agree
among themselves that (i) with respect to all amounts received by them which are
applicable to the payment of the Obligations, equitable adjustment will be made
so that, in effect, all such amounts will be shared among them ratably in
accordance with their Pro Rata Shares, whether received by voluntary payment, by
counterclaim or cross action or by the enforcement of any or all of the
Obligations, (ii) if any of them shall by voluntary payment or by the exercise
of any right of counterclaim or otherwise, receive payment of a proportion of
the aggregate amount of the Obligations held by it which is greater than its Pro
Rata Share of the payments on account of the Obligations, the one receiving such
excess payment shall purchase, without recourse or warranty, an undivided
interest and participation (which it shall be deemed to have done simultaneously
upon the receipt of such payment) in such Obligations owed to the others so that
all such recoveries with respect to such Obligations shall be applied ratably in
accordance with their Pro Rata Shares; provided, that if all or part of such
excess payment received by the purchasing party is thereafter recovered from it,
those purchases shall be rescinded and the purchase prices paid for such
participations shall be returned to that party to the extent necessary to adjust
for such recovery, but without interest except to the extent the purchasing
party is required to pay interest in connection with such recovery. Borrower
agrees that any Lender so purchasing a participation from another Lender
pursuant to this Section 11.13 may, to the fullest extent permitted by law,
exercise all its rights of payment with respect to such participation as fully
as if such Lender were the direct creditor of Borrower in the amount of such
participation.
11.14 Delivery of Documents. Agent shall as soon as reasonably practicable
distribute to each Lender at its primary address set forth on the appropriate
counterpart signature page hereof, or at such other address as a Lender may
request in writing, (i) copies of all documents to which such Lender is a party
or of which such Lender is a beneficiary set forth in Article IV, (as well as an
original counterpart of this Agreement and such Lender's original Loan Note),
(ii) all documents of which Agent receives copies
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from Borrower pursuant to Sections 6.1 and 12.6, (iii) all other documents or
information which Agent is required to send to Lenders pursuant to the terms of
this Agreement, (iv) other information or documents received by Agent at the
request of any Lender, and (v) all notices received by Agent pursuant to Section
6.2. In addition, within fifteen (15) Business Days after receipt of a request
in writing from a Lender for written information or documents provided by or
prepared by Borrower or any Subsidiary or other Affiliate of Borrower, Agent
shall deliver such written information or documents to such requesting Lender if
Agent has possession of such written information or documents in its capacity as
Agent or as a Lender.
11.15 Notice of Events of Default. Agent shall not be deemed to have
knowledge or notice of the occurrence of any Unmatured Event of Default or Event
of Default (other than nonpayment of principal of or interest on the Loans)
unless Agent has received notice in writing from a Lender or Borrower referring
to this Agreement or the other Loan Documents, describing such event or
condition and expressly stating that such notice is a notice of an Unmatured
Event of Default or Event of Default. Should Agent receive such notice of the
occurrence of an Unmatured Event of Default or Event of Default, or should Agent
send Borrower a notice of Unmatured Event of Default or Event of Default, Agent
shall promptly give notice thereof to each Lender.
ARTICLE XII
-----------
MISCELLANEOUS
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12.1 Expenses.
12.1.1 Generally. Borrower agrees upon demand to pay, or reimburse Agent
for, all of Agent's external audit, legal, appraisal, valuation and
investigation expenses and for all other reasonable out-of-pocket costs and
expenses of every type and nature (including, without limitation, the reasonable
fees, expenses and disbursements of Agent's internal appraisers, environmental
advisors or legal counsel) incurred by Agent at any time (whether prior to, on
or after the date of this Agreement) in connection with (i) its own audit and
investigation of Borrower and the Unencumbered Pool Properties; (ii) the
negotiation, preparation and execution of this Agreement (including, without
limitation, the satisfaction or attempted satisfaction of any of the conditions
set forth in Article IV) and the other Loan Documents and the making of the
Loans; (iii) the review and, if applicable, acceptance of additional
Unencumbered Pool Properties, including reasonable attorneys' fees and costs
incurred in connection therewith; (iv) administration of this Agreement, the
other Loan Documents and the Loans, including, without
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limitation, consultation with attorneys in connection therewith; and (v) the
protection, collection or enforcement of any of the Obligations.
12.1.2 After Event of Default. Borrower further agrees to pay, or
reimburse Agent and Lenders, for all reasonable out-of-pocket costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent or Lenders after the occurrence of an Event of
Default (i) in enforcing any Obligation or exercising or enforcing any other
right or remedy available by reason of such Event of Default; (ii) in connection
with any refinancing or restructuring of the credit arrangements provided under
this Agreement in the nature of a "work-out" or in any insolvency or bankruptcy
proceeding; (iii) in commencing, defending or intervening in any litigation or
in filing a petition, complaint, answer, motion or other pleadings in any legal
proceeding relating to Borrower or any of its Affiliates and related to or
arising out of the transactions contemplated hereby; or (iv) in taking any other
action in or with respect to any suit or proceeding (whether in bankruptcy or
otherwise).
12.2 Indemnity. Borrower further agrees to defend, protect, indemnify and
hold harmless Agent, each and all of the Lenders, each of their respective
Affiliates and participants and each of the respective officers, directors,
employees, agents, attorneys and consultants (including, without limitation,
those retained in connection with the satisfaction or attempted satisfaction of
any of the conditions set forth in Article IV) of each of the foregoing
(collectively called the "Indemnitees") from and against any and all Liabilities
and Costs imposed on, incurred by, or asserted against such Indemnitees (whether
based on any federal or state laws or other statutory regulations, including,
without limitation, securities and commercial laws and regulations, under common
law or in equity, and based upon contract or otherwise, including any
Liabilities and Costs arising as a result of a "prohibited transaction" under
ERISA to the extent arising from or in connection with the past, present or
future operations of Borrower or its predecessors in interest) in any manner
relating to or arising out of this Agreement or the other Loan Documents, or any
act, event or transaction related or attendant thereto, the making of and
participation in the Loans and the management of the Loans, or the use or
intended use of the proceeds of the Loans (collectively, the "Indemnified
Matters"); provided, however, that Borrower shall have no obligation to an
Indemnitee hereunder with respect to (i) matters for which such Indemnitee has
been compensated pursuant to or for which an exemption is provided in Section
2.4.7 or any other provision of this Agreement, and (ii) Indemnified Matters to
the extent caused by or resulting from the willful misconduct or gross
negligence of that Indemnitee or of that Indemnitee's officers, directors,
employees, agents, attorneys or consultants, as determined by a court of
competent jurisdiction. To the extent that the undertaking to indemnify, pay and
hold harmless set forth in the preceding sentence may be unenforceable because
it is violative of any law or
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public policy, Borrower shall contribute the maximum portion which it is
permitted to pay and satisfy under applicable law, to the payment and
satisfaction of all Indemnified Matters incurred by the Indemnitees.
12.3 Change in Accounting Principles. Except as otherwise provided herein,
if any changes in accounting principles from those used in the preparation of
the most recent financial statements delivered to Agent pursuant to the terms
hereof are hereinafter required or permitted by the rules, regulations,
pronouncements and opinions of the Financial Accounting Standards Board or the
American Institute of Certified Public Accountants (or successors thereto or
agencies with similar functions) and are adopted by Borrower with the agreement
of its independent certified public accountants and such changes result in a
change in the method of calculation of any of the financial covenants, standards
or terms found herein, the parties hereto agree to enter into negotiations in
order to amend such provisions so as to equitably reflect such changes with the
desired result that the criteria for evaluating the financial condition of
Borrower shall be the same after such changes as if such changes had not been
made; provided, however, that no change in GAAP that would affect the method of
calculation of any of the financial covenants, standards or terms shall be given
effect in such calculations until such provisions are amended, in a manner
satisfactory to Agent and Requisite Lenders, to so reflect such change in
accounting principles.
12.4 Amendments and Waivers. (i) No amendment or modification of any
provision of this Agreement shall be effective without the written agreement of
Requisite Lenders (after notice to all Lenders) and Borrower (except for
amendments to Section 11.4, which do not require the consent of Borrower), and
(ii) no termination or waiver of any provision of this Agreement, or consent to
any departure by Borrower therefrom (except as expressly provided in Section
11.11.1 with respect to waivers of late fees), shall in any event be effective
without the written concurrence of Requisite Lenders (after notice to all
Lenders), which Requisite Lenders shall have the right to grant or withhold at
their sole discretion, except that:
12.4.1 The following amendments, modifications or waivers shall require
the consent of all Lenders:
(a) increasing the Commitments or Lender's Commitments;
(b) changing the principal amount or final maturity of the Loans
except as provided in Section 2.1.4;
(c) reducing the interest rates applicable to the Loans;
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(d) reducing the rates on which fees payable pursuant hereto are
determined;
(e) forgiving or delaying any amount payable or receivable under
Article II (other than late fees);
(f) changing the definition of "Requisite Lenders", "Loan
Availability", "Pro Rata Shares", "Negative Pledge", "Unencumbered Pool
Value" or "Individual UPP Value";
(g) changing any provision contained in this Section 12.4;
(h) releasing any obligor under any Loan Document, except that
Agent may release the guaranty of any Person if, at the time of such
release, such Person owns no Unencumbered Pool Properties and there
exists no Unmatured Event of Default or Event of Default; or
(i) consent to assignment by Borrower of all of its duties and
Obligations hereunder pursuant to Section 12.14.
12.4.2 The following amendments, modifications or waivers shall require
the consent of Agent and Requisite Lenders:
(a) amending the Leverage Ratio that Borrower is required to
maintain pursuant to Section 9.2, waiving any failure of Borrower to
maintain such ratio or amending the definitions of "Total Liabilities,"
"Gross Asset Value," "Cash Equivalents," or "EBITDA", or of any defined
term used in the definition of "EBITDA"; and
(b) amending the definition of "Unsecured Liabilities" or "Net
Operating Income," or of any defined term used in any of the foregoing
definitions, or amending or waiving any portion of Section 2.1.1.
12.4.3 No amendment, modification, termination or waiver of any
provision of Article XI or any other provision referring to Agent shall be
effective without the written concurrence of Agent, but only if such amendment,
modification, termination or waiver alters the obligations or rights of Agent.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on Borrower
in any case shall entitle Borrower to any other further notice or demand in
similar or other circumstances. Any amendment, modification, termination, waiver
or consent effected in accordance
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with this Section 12.4 shall be binding on each assignee, transferee or
recipient of Agent's or any Lender's Commitment under this Agreement or the
Loans at the time outstanding.
12.5 Independence of Covenants. All covenants hereunder shall be given
independent effect so that if a particular action or condition is not permitted
by any of such covenants, the fact that it would be permitted by an exception
to, or be otherwise within the limitations of, another covenant shall not avoid
the occurrence of an Event of Default or Unmatured Event of Default if such
action is taken or condition exists, and if a particular action or condition is
expressly permitted under any covenant, unless expressly limited to such
covenant, the fact that it would not be permitted under the general provisions
of another covenant shall not constitute an Event of Default or Unmatured Event
of Default if such action is taken or condition exists.
12.6 Notices and Delivery. Unless otherwise specifically provided herein,
any consent, notice or other communication herein required or permitted to be
given shall be in writing and may be personally served, telecopied or sent by
courier service or United States mail and shall be deemed to have been given
when delivered in person or by courier service, upon receipt of a telecopy (or
on the next Business Day if such telecopy is received on a non-Business Day or
after 5:00 p.m. (at the office of the recipient) on a Business Day) or four (4)
Business Days after deposit in the United States mail (registered or certified,
with postage prepaid and properly addressed). Notices to Agent pursuant to
Article II shall not be effective until received by Agent. For the purposes
hereof, the addresses of the parties hereto (until notice of a change thereof is
delivered as provided in this Section 12.6) shall be as set forth below each
party's name on the signature pages hereof, or, as to each party, at such other
address as may be designated by such party in a written notice to all of the
other parties. All deliveries to be made to Agent for distribution to the
Lenders shall be made to Agent at the addresses specified for notice on the
signature page hereto and in addition, a sufficient number of copies of each
such delivery shall be delivered to Agent for delivery to each Lender at the
address specified for deliveries on the signature page hereto or such other
address as may be designated by Agent in a written notice.
12.7 Survival of Warranties, Indemnities and Agreements. All agreements,
representations, warranties and indemnities made or given herein shall survive
the execution and delivery of this Agreement and the other Loan Documents and
the making and repayment of the Loans hereunder and such indemnities shall
survive termination hereof.
12.8 Failure or Indulgence Not Waiver; Remedies Cumulative. No failure or
delay on the part of Agent or any Lender in the exercise of any power, right or
privilege under any of the Loan Documents shall impair such power, right or
privilege or be
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construed to be a waiver of any default or acquiescence therein, nor shall any
single or partial exercise of any such power, right or privilege preclude other
or further exercise thereof or of any other right, power or privilege. All
rights and remedies existing under the Loan Documents are cumulative to and not
exclusive of any rights or remedies otherwise available.
12.9 Payments Set Aside. To the extent that Borrower makes a payment or
payments to Agent or the Lenders or Agent or the Lenders exercise their rights
of setoff, and such payment or payments or the proceeds of such setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligation or part
thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred.
12.10 Severability. In case any provision in or obligation under this
Agreement or the other Loan Documents shall be invalid, illegal or unenforceable
in any jurisdiction, the validity, legality and enforceability of the remaining
provisions or obligations, or of such provision or obligation in any other
jurisdiction, shall not in any way be affected or impaired thereby, provided,
however, that if the rates of interest or any other amount payable hereunder, or
the collectibility thereof, are declared to be or become invalid, illegal or
unenforceable, Lenders' obligations to make Loans shall not be enforceable.
12.11 Headings. Section headings in this Agreement are included herein for
convenience of reference only and shall not constitute a part of this Agreement
for any other purpose or be given any substantive effect.
12.12 Governing Law. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL BE
CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF CALIFORNIA.
12.13 Limitation of Liability. To the extent permitted by applicable law, no
claim may be made by Borrower, any Lender or any other Person against Agent or
any Lender, or the affiliates, directors, officers, employees, attorneys or
agents of any of them, for any special, indirect, consequential or punitive
damages in respect of any claim for breach of contract or any other theory of
liability arising out of or related to the transactions contemplated by this
Agreement, or any act, omission or event occurring in connection therewith; and
Borrower and each Lender hereby waive, release and agree not to xxx upon any
claim for any such damages, whether or not accrued and whether or not known or
suspected to exist in its favor, provided that if a Lender refuses to fund a
Loan and a court
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of competent jurisdiction finds that (a) such refusal was without justification
and (b) such Lender's conduct constituted either gross negligence or willful
misconduct, such Lender may be liable to Borrower for Borrower's reasonable and
foreseeable damages resulting from such refusal to fund.
12.14 Successors and Assigns. This Agreement and the other Loan Documents
shall be binding upon the parties hereto and their respective successors and
assigns and shall inure to the benefit of the parties hereto and the successors
and permitted assigns of Agent and Lenders. The terms and provisions of this
Agreement shall inure to the benefit of any assignee or transferee of the Loans
and the Commitments of Lenders under this Agreement, and in the event of such
transfer or assignment, the rights and privileges herein conferred upon Agent
and Lenders shall automatically extend to and be vested in such transferee or
assignee, all subject to the terms and conditions hereof. Borrower's rights or
any interest therein hereunder, and Borrower's duties and Obligations hereunder,
shall not be assigned without the consent of all Lenders.
12.15 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial.
ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER WITH RESPECT TO THIS AGREEMENT
OR ANY OTHER LOAN DOCUMENT MAY BE, AND ALL JUDICIAL PROCEEDINGS BROUGHT BY
BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT SHALL BE,
BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION HAVING SITUS
WITHIN THE BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE SOUTHERN DISTRICT OF
CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS AGREEMENT, BORROWER ACCEPTS,
FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES, GENERALLY AND UNCONDITIONALLY,
THE JURISDICTION OF THE AFORESAID COURTS, AND IRREVOCABLY AGREES TO BE BOUND BY
ANY FINAL JUDGMENT RENDERED THEREBY FROM WHICH NO APPEAL HAS BEEN TAKEN OR IS
AVAILABLE. BORROWER IRREVOCABLY CONSENTS TO THE SERVICE OF PROCESS OF ANY OF THE
AFOREMENTIONED COURTS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING OF COPIES
THEREOF BY REGISTERED OR CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS
SPECIFIED ON THE SIGNATURE PAGES HEREOF. BORROWER, AGENT AND LENDERS EACH
IRREVOCABLY WAIVES (i) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO
THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT, AND (ii) ANY OBJECTION (INCLUDING,
WITHOUT LIMITATION, ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS
OF FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF
ANY SUCH ACTION OR
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PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT IN ANY
JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE RIGHT TO SERVE
PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE RIGHT OF AGENT
OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE COURTS OF ANY OTHER
JURISDICTION.
12.16 Syndication of the Facility. Borrower will use reasonable efforts to
cooperate with Agent and Lenders in connection with the assignment of interests
under this Agreement or the sale of participations herein. Borrower also agrees
to amend this Agreement to add such additional provisions, not materially
inconsistent with those herein as of the Closing Date, as Agent may reasonably
determine are necessary to facilitate syndication of the Facility, and to
refrain from activity in the loan syndication market until Agent has completed
the syndication of the Facility or until otherwise agreed in order to assure a
clear market for the syndication.
12.17 Counterparts; Effectiveness; Inconsistencies. This Agreement and any
amendments, waivers, consents or supplements may be executed in counterparts,
each of which when so executed and delivered shall be deemed an original, but
all such together shall constitute but one and the same instrument. This
Agreement shall become effective when Borrower, the initial Lenders and Agent
have duly executed and delivered execution pages of this Agreement to each other
(delivery by Borrower to Lenders and by any Lender to Borrower and any other
Lender being deemed to have been made by delivery to Agent). Agent shall send
written confirmation of the Closing Date to Borrower and each other Lender
promptly following the occurrence thereof. Effective as of the Closing Date, the
commitment of Xxxxx Fargo Bank under the Existing Facility shall terminate, and
all accrued and unpaid obligations of Borrower under the Existing Facility shall
be due and payable in full. This Agreement and each of the other Loan Documents
shall be construed to the extent reasonable to be consistent one with the other,
but to the extent that the terms and conditions of this Agreement are actually
and directly inconsistent with the terms and conditions of any other Loan
Document, this Agreement shall govern.
12.18 Construction. The parties acknowledge that each party and its counsel
have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.19 Entire Agreement. This Agreement, taken together with all of the other
Loan Documents and all certificates and other documents delivered by Borrower to
Agent (including documents incorporating separate agreements relating to the
payment of fees),
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embodies the entire agreement and supersede all prior agreements, written and
oral, relating to the subject matter hereof.
[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]
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IN WITNESS WHEREOF, this Agreement has been duly executed on the date
set forth above.
BORROWER: PACIFIC GULF PROPERTIES INC.,
a Maryland corporation,
By
----------------------------------
Title
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
0000 Xxx Xxxxxx, Xxxxxx Xxxxx
Xxxxxxx Xxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxxx
Executive Vice President and
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
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AGENT/LENDER: XXXXX FARGO BANK, NATIONAL
ASSOCIATION
By
----------------------------------
Title
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Real Estate Group
Orange County
0000 Xxxx Xxxxxx, Xxxxx 000
Xxxxxx, XX 00000
Attn: Xxxxxxx X. Xxxxxx
Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
Pro Rata Share: 50%
Loan Commitment:$75,000,000
LIBOR OFFICE:
Address: Real Estate Group
Disbursement Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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OTHER LENDERS: DRESDNER BANK AG
By
----------------------------------
Title
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Dresdner Bank New York
00 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxx Raddington
Tel: (000) 000-0000
Fax: (000) 000-0000
Pro Rata Share: 16.66666667%
Loan Commitment: $25,000,000
KEYBANK, NATIONAL ASSOCIATION
By
----------------------------------
Title
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
KeyBank N.A.
000 Xxxxxx Xxxxxx
Xxxxxxxxx, Xxxx 00000
Attn: Xxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Pro Rata Share: 16.66666667%
Loan Commitment: $25,000,000
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BANK OF AMERICA NT & SA
By
----------------------------------
Title
-------------------------------
ADDRESS FOR NOTICE AND DELIVERY:
Bank of America NT & SA
000 X. Xxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxx Xxxxxx
Tel: (000) 000-0000
Fax: (000) 000-0000
Pro Rata Share: 16.66666667%
Loan Commitment: $25,000,000
109
117
EXHIBIT D TO CREDIT AGREEMENT
FORM OF LOAN NOTE
-----------------
,
---------- ----
$
---------------
FOR VALUE RECEIVED, PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("BORROWER"), HEREBY PROMISES TO PAY to the order of _______________
("LENDER") the principal sum of (i) _______________ MILLION Dollars
($_______________), or if less, the aggregate unpaid principal amount of all
"LOANS" disbursed by Lender pursuant to Lender's "COMMITMENT" (as such terms are
defined in the Credit Agreement dated as of April 9, 1998 (as amended,
supplemented or restated from time to time, the "CREDIT AGREEMENT"), among
Borrower, Lender, certain other Lenders named therein or made parties thereto
and Xxxxx Fargo Bank, National Association, as Agent, together with interest on
the unpaid principal balance hereof at the rate (or rates) determined in
accordance with Section 2.4 of the Credit Agreement from the date such principal
is advanced until it is paid in full. It is contemplated that there will be
advances and payments under this Loan Note from time to time, but no advances or
payments under this Loan Note (including payment in full of the unpaid balance
of principal hereof prior to maturity) shall affect or impair the validity or
enforceability of this Loan Note as to future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of this Loan Note, unless accelerated in
accordance with the Credit Agreement as described below, if not sooner paid,
will be due and payable, together with all accrued and unpaid interest and other
amounts due and unpaid under the Credit Agreement, on the Termination Date.
Borrower may make voluntary prepayments of all or a portion of this Loan Note,
upon prior written notice, in accordance with the provisions of Section 2.6.1 of
the Credit Agreement.
Interest on the Loans is payable in arrears on the first Business
Day of each month during the term of the Credit Agreement, commencing with the
first Business Day of the first calendar month to begin after the date of this
Loan Note. Interest will be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of three hundred
sixty (360) days. The Credit Agreement provides for the payment by Borrower of
various other charges and fees, in addition to the interest charges described in
the Credit Agreement, as set forth more fully in the Credit Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars.
Upon and after the occurrence of an Event of Default, unless such
Event of Default is waived as provided in the Credit Agreement, this Loan Note
may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by
118
Agent, and in such case immediately shall become, due and payable. Upon and
after the occurrence of certain Events of Default, this Loan Note shall, without
any action by Lenders and without demand, notice or legal process of any kind,
automatically and immediately become due and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender may extend the time of payment of this
Loan Note, postpone the enforcement hereof, grant any indulgences, release any
party primarily or secondarily liable hereon or agree to any subordination of
Borrower's obligations hereunder without affecting or diminishing Lender's right
of recourse against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at Irvine,
California. This Loan Note shall be interpreted in accordance with, and the
rights and liabilities of the parties hereto shall be determined and governed
by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged in
respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall, at
Lender's election, either (a) promptly refund such excess interest to Borrower
or (b) credit such excess to the principal balance of the Loans. This provision
shall control over every other provision of all agreements between Borrower and
Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By:
--------------------------------
Its:
-------------------------------
2
119
EXHIBIT C TO CREDIT AGREEMENT
COMPLIANCE CERTIFICATE
This Compliance Certificate is delivered pursuant to the Credit
Agreement dated as of April 9, 1998 (as amended, supplemented or restated from
time to time, the "Agreement"), among Pacific Gulf Properties Inc., the Persons
named therein as Lenders and such other Persons as may become Lenders in
accordance with the terms of the Agreement, and Xxxxx Fargo Bank, National
Association, as Agent. (All capitalized terms used herein without definitions
shall have the meanings given to them in the Agreement.)
1. The undersigned hereby certifies that (a) the undersigned has
reviewed the terms of the Agreement and has made a review of the transactions,
financial condition and other affairs of Borrower, each Subsidiary, and any
Investment Partnership as of, and during the relevant accounting period ending
on, _______________, ____, and (b) such review has not disclosed the existence
during such accounting period, and the undersigned does not have knowledge of
the existence, as of the date hereof, of any condition or event constituting an
Unmatured Event of Default or an Event of Default except as set forth on
Attachment A hereto, which accurately describes the nature of the condition(s)
or event(s) that constitute Unmatured Event(s) of Default or Event(s) of Default
and the actions which Borrower (is taking) (is planning to take) with respect to
such condition(s) or event(s).
2. The calculations required to establish compliance with each of the
provisions of Article IX of the Agreement are attached hereto as Schedule 1.
3. The management covenant set forth in Section 8.4 of the Agreement is
being fully complied with, as confirmed on Schedule 1.
4. The aggregate outstanding principal amount of the Loans as of the
date hereof is equal to or less than Loan Availability.
------------------------------------
Chief Financial Officer of the REIT
Date: ,
------------ ------
1
120
LOAN NOTE
---------
$75,000,000 April 9, 1998
FOR VALUE RECEIVED, PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("BORROWER"), HEREBY PROMISES TO PAY to the order of XXXXX FARGO
BANK, NATIONAL ASSOCIATION ("LENDER") the principal sum of (i) SEVENTY-FIVE
MILLION Dollars ($ 75,000,000), or (ii) if less, the aggregate unpaid principal
amount of all "LOANS" disbursed by Lender pursuant to Lender's "COMMITMENT" (as
such terms are defined in the Credit Agreement dated as of April 9, 1998 (as
amended, supplemented or restated from time to time, the "CREDIT AGREEMENT"),
among Borrower, Lender, certain other Lenders named therein or made parties
thereto and Xxxxx Fargo Bank, National Association, as Agent, together with
interest on the unpaid principal balance hereof at the rate (or rates)
determined in accordance with Section 2.4 of the Credit Agreement from the date
such principal is advanced until it is paid in full. It is contemplated that
there will be advances and payments under this Loan Note from time to time, but
no advances or payments under this Loan Note (including payment in full of the
unpaid balance of principal hereof prior to maturity) shall affect or impair the
validity or enforceability of this Loan Note as to future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of this Loan Note, unless accelerated in
accordance with the Credit Agreement as described below, if not sooner paid,
will be due and payable, together with all accrued and unpaid interest and other
amounts due and unpaid under the Credit Agreement, on the Termination Date.
Borrower may make voluntary prepayments of all or a portion of this Loan Note,
upon prior written notice, in accordance with the provisions of Section 2.6.1 of
the Credit Agreement.
Interest on the Loans is payable in arrears on the first Business
Day of each month during the term of the Credit Agreement, commencing with the
first Business Day of the first calendar month to begin after the date of this
Loan Note. Interest will be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of three hundred
sixty (360) days. The Credit Agreement provides for the payment by Borrower of
various other charges and fees, in addition to the interest charges described in
the Credit Agreement, as set forth more fully in the Credit Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars.
Upon and after the occurrence of an Event of Default, unless such
Event of Default is waived as provided in the Credit Agreement, this Loan Note
may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by
121
Agent, and in such case immediately shall become, due and payable. Upon and
after the occurrence of certain Events of Default, this Loan Note shall, without
any action by Lenders and without demand, notice or legal process of any kind,
automatically and immediately become due and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender may extend the time of payment of this
Loan Note, postpone the enforcement hereof, grant any indulgences, release any
party primarily or secondarily liable hereon or agree to any subordination of
Borrower's obligations hereunder without affecting or diminishing Lender's right
of recourse against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at Irvine,
California. This Loan Note shall be interpreted in accordance with, and the
rights and liabilities of the parties hereto shall be determined and governed
by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged in
respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall, at
Lender's election, either (a) promptly refund such excess interest to Borrower
or (b) credit such excess to the principal balance of the Loans. This provision
shall control over every other provision of all agreements between Borrower and
Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By:
-------------------------------------
Its:
------------------------------------
2
122
LOAN NOTE
---------
$25,000,000 April 9, 1998
FOR VALUE RECEIVED, PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("BORROWER"), HEREBY PROMISES TO PAY to the order of DRESDNER BANK
AG ("LENDER") the principal sum of (i) TWENTY-FIVE MILLION Dollars ($
25,000,000), or (ii) if less, the aggregate unpaid principal amount of all
"LOANS" disbursed by Lender pursuant to Lender's "COMMITMENT" (as such terms are
defined in the Credit Agreement dated as of April 9, 1998 (as amended,
supplemented or restated from time to time, the "CREDIT AGREEMENT"), among
Borrower, Lender, certain other Lenders named therein or made parties thereto
and Xxxxx Fargo Bank, National Association, as Agent, together with interest on
the unpaid principal balance hereof at the rate (or rates) determined in
accordance with Section 2.4 of the Credit Agreement from the date such principal
is advanced until it is paid in full. It is contemplated that there will be
advances and payments under this Loan Note from time to time, but no advances or
payments under this Loan Note (including payment in full of the unpaid balance
of principal hereof prior to maturity) shall affect or impair the validity or
enforceability of this Loan Note as to future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of this Loan Note, unless accelerated in
accordance with the Credit Agreement as described below, if not sooner paid,
will be due and payable, together with all accrued and unpaid interest and other
amounts due and unpaid under the Credit Agreement, on the Termination Date.
Borrower may make voluntary prepayments of all or a portion of this Loan Note,
upon prior written notice, in accordance with the provisions of Section 2.6.1 of
the Credit Agreement.
Interest on the Loans is payable in arrears on the first Business
Day of each month during the term of the Credit Agreement, commencing with the
first Business Day of the first calendar month to begin after the date of this
Loan Note. Interest will be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of three hundred
sixty (360) days. The Credit Agreement provides for the payment by Borrower of
various other charges and fees, in addition to the interest charges described in
the Credit Agreement, as set forth more fully in the Credit Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars.
Upon and after the occurrence of an Event of Default, unless such
Event of Default is waived as provided in the Credit Agreement, this Loan Note
may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by
123
Agent, and in such case immediately shall become, due and payable. Upon and
after the occurrence of certain Events of Default, this Loan Note shall, without
any action by Lenders and without demand, notice or legal process of any kind,
automatically and immediately become due and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender may extend the time of payment of this
Loan Note, postpone the enforcement hereof, grant any indulgences, release any
party primarily or secondarily liable hereon or agree to any subordination of
Borrower's obligations hereunder without affecting or diminishing Lender's right
of recourse against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at Irvine,
California. This Loan Note shall be interpreted in accordance with, and the
rights and liabilities of the parties hereto shall be determined and governed
by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged in
respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall, at
Lender's election, either (a) promptly refund such excess interest to Borrower
or (b) credit such excess to the principal balance of the Loans. This provision
shall control over every other provision of all agreements between Borrower and
Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By:
-------------------------------------
Its:
------------------------------------
2
124
LOAN NOTE
---------
$25,000,000 April 9, 1998
FOR VALUE RECEIVED, PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("BORROWER"), HEREBY PROMISES TO PAY to the order of BANK OF AMERICA
NATIONAL TRUST & SAVINGS ASSOCIATION ("LENDER") the principal sum of (i)
TWENTY-FIVE MILLION Dollars ($ 25,000,000), or (ii) if less, the aggregate
unpaid principal amount of all "LOANS" disbursed by Lender pursuant to Lender's
"COMMITMENT" (as such terms are defined in the Credit Agreement dated as of
April 9, 1998 (as amended, supplemented or restated from time to time, the
"CREDIT AGREEMENT"), among Borrower, Lender, certain other Lenders named therein
or made parties thereto and Xxxxx Fargo Bank, National Association, as Agent,
together with interest on the unpaid principal balance hereof at the rate (or
rates) determined in accordance with Section 2.4 of the Credit Agreement from
the date such principal is advanced until it is paid in full. It is contemplated
that there will be advances and payments under this Loan Note from time to time,
but no advances or payments under this Loan Note (including payment in full of
the unpaid balance of principal hereof prior to maturity) shall affect or impair
the validity or enforceability of this Loan Note as to future advances
hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of this Loan Note, unless accelerated in
accordance with the Credit Agreement as described below, if not sooner paid,
will be due and payable, together with all accrued and unpaid interest and other
amounts due and unpaid under the Credit Agreement, on the Termination Date.
Borrower may make voluntary prepayments of all or a portion of this Loan Note,
upon prior written notice, in accordance with the provisions of Section 2.6.1 of
the Credit Agreement.
Interest on the Loans is payable in arrears on the first Business
Day of each month during the term of the Credit Agreement, commencing with the
first Business Day of the first calendar month to begin after the date of this
Loan Note. Interest will be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of three hundred
sixty (360) days. The Credit Agreement provides for the payment by Borrower of
various other charges and fees, in addition to the interest charges described in
the Credit Agreement, as set forth more fully in the Credit Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars.
Upon and after the occurrence of an Event of Default, unless such
Event of Default is waived as provided in the Credit Agreement, this Loan Note
may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by
125
Agent, and in such case immediately shall become, due and payable. Upon and
after the occurrence of certain Events of Default, this Loan Note shall, without
any action by Lenders and without demand, notice or legal process of any kind,
automatically and immediately become due and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender may extend the time of payment of this
Loan Note, postpone the enforcement hereof, grant any indulgences, release any
party primarily or secondarily liable hereon or agree to any subordination of
Borrower's obligations hereunder without affecting or diminishing Lender's right
of recourse against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at Irvine,
California. This Loan Note shall be interpreted in accordance with, and the
rights and liabilities of the parties hereto shall be determined and governed
by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged in
respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall, at
Lender's election, either (a) promptly refund such excess interest to Borrower
or (b) credit such excess to the principal balance of the Loans. This provision
shall control over every other provision of all agreements between Borrower and
Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By:
-------------------------------------
Its:
------------------------------------
2
126
LOAN NOTE
---------
April 9, 1998
$25,000,000
FOR VALUE RECEIVED, PACIFIC GULF PROPERTIES INC., a Maryland
corporation ("BORROWER"), HEREBY PROMISES TO PAY to the order of KEYBANK,
NATIONAL ASSOCIATION ("LENDER") the principal sum of (i) TWENTY-FIVE MILLION
Dollars ($ 25,000,000), or (ii) if less, the aggregate unpaid principal amount
of all "LOANS" disbursed by Lender pursuant to Lender's "COMMITMENT" (as such
terms are defined in the Credit Agreement dated as of April 9, 1998 (as amended,
supplemented or restated from time to time, the "CREDIT AGREEMENT"), among
Borrower, Lender, certain other Lenders named therein or made parties thereto
and Xxxxx Fargo Bank, National Association, as Agent, together with interest on
the unpaid principal balance hereof at the rate (or rates) determined in
accordance with Section 2.4 of the Credit Agreement from the date such principal
is advanced until it is paid in full. It is contemplated that there will be
advances and payments under this Loan Note from time to time, but no advances or
payments under this Loan Note (including payment in full of the unpaid balance
of principal hereof prior to maturity) shall affect or impair the validity or
enforceability of this Loan Note as to future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of this Loan Note, unless accelerated in
accordance with the Credit Agreement as described below, if not sooner paid,
will be due and payable, together with all accrued and unpaid interest and other
amounts due and unpaid under the Credit Agreement, on the Termination Date.
Borrower may make voluntary prepayments of all or a portion of this Loan Note,
upon prior written notice, in accordance with the provisions of Section 2.6.1 of
the Credit Agreement.
Interest on the Loans is payable in arrears on the first Business
Day of each month during the term of the Credit Agreement, commencing with the
first Business Day of the first calendar month to begin after the date of this
Loan Note. Interest will be computed on the basis of the actual number of days
elapsed in the period during which interest accrues and a year of three hundred
sixty (360) days. The Credit Agreement provides for the payment by Borrower of
various other charges and fees, in addition to the interest charges described in
the Credit Agreement, as set forth more fully in the Credit Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars.
Upon and after the occurrence of an Event of Default, unless such
Event of Default is waived as provided in the Credit Agreement, this Loan Note
may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by Agent,
127
and in such case immediately shall become, due and payable. Upon and after the
occurrence of certain Events of Default, this Loan Note shall, without any
action by Lenders and without demand, notice or legal process of any kind,
automatically and immediately become due and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender may extend the time of payment of this
Loan Note, postpone the enforcement hereof, grant any indulgences, release any
party primarily or secondarily liable hereon or agree to any subordination of
Borrower's obligations hereunder without affecting or diminishing Lender's right
of recourse against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at Irvine,
California. This Loan Note shall be interpreted in accordance with, and the
rights and liabilities of the parties hereto shall be determined and governed
by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged in
respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender has received interest
hereunder in excess of the highest rate applicable hereto, Lender shall, at
Lender's election, either (a) promptly refund such excess interest to Borrower
or (b) credit such excess to the principal balance of the Loans. This provision
shall control over every other provision of all agreements between Borrower and
Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
PACIFIC GULF PROPERTIES INC., a
Maryland corporation
By:
-------------------------------------
Its:
------------------------------------
2
