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EXHIBIT 10.22
CREDIT AGREEMENT
Dated as of February 29, 2000
among
1700 SEVENTH L.P.
as Borrower,
AND
THE SEVERAL LENDERS
FROM TIME TO TIME PARTY HERETO
AND
BANK OF AMERICA, N.A.
as Administrative Agent
and as Project Administrative Agent
Arranged By:
BANC OF AMERICA SECURITIES LLC
as Lead Arranger and Book Manager
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TABLE OF CONTENTS
SECTION 1 DEFINITIONS.......................................................................1
1.1 Definitions...................................................................1
1.2 Computation of Time Periods..................................................20
1.3 Accounting Terms.............................................................20
SECTION 2 CREDIT FACILITIES................................................................21
2.1 Revolving Loans..............................................................21
2.2 Extension of Maturity Date...................................................23
SECTION 3 OTHER PROVISIONS RELATING TO CREDIT FACILITIES...................................24
3.1 Default Rate.................................................................24
3.2 Extension and Conversion.....................................................24
3.3 Prepayments..................................................................25
3.4 Termination and Reduction of Revolving Committed Amount......................26
3.5 Fees.........................................................................26
3.6 Capital Adequacy.............................................................27
3.7 Limitation on Eurodollar Loans...............................................27
3.8 Illegality...................................................................28
3.9 Requirements of Law..........................................................28
3.10 Treatment of Affected Loans..................................................29
3.11 Taxes........................................................................29
3.12 Compensation.................................................................31
3.13 Pro Rata Treatment...........................................................32
3.14 Sharing of Payments..........................................................33
3.15 Payments, Computations, Etc..................................................34
3.16 Evidence of Debt.............................................................36
SECTION 4 CONDITIONS.......................................................................36
4.1 Closing Conditions...........................................................36
4.2 Conditions to Initial Extension of Credit....................................41
4.3 Conditions to all Extensions of Credit.......................................42
SECTION 5 REPRESENTATIONS AND WARRANTIES...................................................44
5.1 Financial Condition..........................................................44
5.2 No Material Change...........................................................44
5.3 Organization and Good Standing...............................................44
5.4 Power; Authorization; Enforceable Obligations................................44
5.5 No Conflicts.................................................................45
5.6 No Default...................................................................45
5.7 Ownership....................................................................45
5.8 Indebtedness.................................................................45
5.9 Litigation...................................................................45
5.10 Taxes........................................................................46
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5.11 Compliance with Law..........................................................46
5.12 ERISA........................................................................46
5.13 Governmental Regulations, Etc................................................47
5.14 Purpose of Loans.............................................................49
5.15 Environmental Matters........................................................49
5.16 Intellectual Property........................................................50
5.17 Location of Collateral.......................................................50
5.18 Disclosure...................................................................50
5.19 Brokers' Fees................................................................50
5.20 Labor Matters................................................................50
5.21 Year 2000 Compliance.........................................................51
SECTION 6 AFFIRMATIVE COVENANTS............................................................51
6.1 Information Covenants........................................................51
6.2 Preservation of Existence and Franchises.....................................54
6.3 Books and Records............................................................54
6.4 Compliance with Law..........................................................54
6.5 Payment of Taxes and Other Indebtedness......................................54
6.6 Insurance....................................................................55
6.7 Maintenance of Property......................................................57
6.8 Performance of Obligations...................................................57
6.9 Use of Proceeds..............................................................57
6.10 Audits/Inspections...........................................................57
6.11 Year 2000 Compliance.........................................................58
6.12 Construction.................................................................58
6.13 Eminent Domain...............................................................58
6.14. Changes in Plans and Specifications; Change Orders...........................60
6.15 Abandonment of Construction..................................................60
6.16 Alley Vacation...............................................................61
SECTION 7 NEGATIVE COVENANTS...............................................................62
7.1 Indebtedness.................................................................62
7.2 Liens........................................................................63
7.3 Nature of Business...........................................................63
7.4 Consolidation, Merger, Dissolution, etc......................................63
7.5 Asset Dispositions...........................................................63
7.6 Investments..................................................................64
7.7 Restricted Payments..........................................................64
7.8 Other Indebtedness...........................................................64
7.9 Transactions with Affiliates.................................................65
7.10 Fiscal Year; Organizational Documents........................................65
7.11 Limitation on Restricted Actions.............................................65
7.12 Subsidiaries.................................................................65
7.13 Sale Leasebacks..............................................................65
7.14 No Further Negative Pledges..................................................65
7.15 Leases.......................................................................66
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7.16 Plans and Specifications.....................................................66
7.17 Floor Area Ratio.............................................................66
SECTION 8 EVENTS OF DEFAULT................................................................67
8.1 Events of Default............................................................67
8.2 Acceleration; Remedies.......................................................69
SECTION 9 AGENCY PROVISIONS................................................................70
9.1 Appointment, Powers and Immunities...........................................70
9.2 Reliance by Administrative Agent.............................................71
9.3 Defaults.....................................................................71
9.4 Rights as a Lender...........................................................72
9.5 Indemnification..............................................................72
9.6 Non-Reliance on Agents and Other Lenders.....................................72
9.7 Successor Agents.............................................................73
SECTION 10 MISCELLANEOUS...................................................................74
10.1 Notices......................................................................74
10.2 Right of Set-Off; Adjustments................................................75
10.3 Benefit of Agreement; Assignments............................................76
10.4 No Waiver; Remedies Cumulative...............................................78
10.5 Expenses; Indemnification....................................................78
10.6 Amendments, Waivers and Consents............................................79
10.7 Counterparts.................................................................80
10.8 Headings.....................................................................80
10.9 Survival.....................................................................81
10.10 Governing Law; Submission to Jurisdiction; Venue.............................81
10.11 Severability.................................................................81
10.12 Entirety.....................................................................82
10.13 Binding Effect...............................................................82
10.14 Confidentiality..............................................................82
10.15 Source of Funds..............................................................83
10.16 Conflict.....................................................................83
10.17 Oral Agreements Not Binding..................................................83
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SCHEDULES
Schedule 1.1(a) Controlling Stockholders
Schedule 1.1(b) Land and Tipp Property
Schedule 1.1(c) Permitted Liens
Schedule 2.1(a) Lenders
Schedule 4.3 Borrowing Conditions
Schedule 5.15 Environmental Matters
Schedule 5.17(a) Real Property
Schedule 5.17(b) Collateral Locations
Schedule 5.17(c) Chief Executive Offices/Principal Places
of Business
Schedule 6.6 Insurance
Schedule 7.9 Transactions with Affiliates
EXHIBITS
Exhibit 1.1(a) Form of Guaranty Agreement
Exhibit 2.1(b)(i) Form of Notice of Borrowing
Exhibit 2.1(e) Form of Revolving Note
Exhibit 2.2 Form of Estoppel Certificate
Exhibit 3.2 Form of Notice of Extension/Conversion
Exhibit 6.1(c) Form of Officer's Compliance Certificate
Exhibit 10.3(b) Form of Assignment and Acceptance
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CREDIT AGREEMENT
THIS CREDIT AGREEMENT, dated as of February 29, 2000 (as amended,
modified, restated or supplemented from time to time, the "Credit Agreement"),
is by and among 1700 SEVENTH L.P., a Washington limited partnership (formerly
known as 700 Olive L.P.) (the "Borrower"), the Lenders (as defined herein) and
BANK OF AMERICA, N.A., as Administrative Agent for the Lenders (in such
capacity, the "Administrative Agent") and as Project Administrative Agent for
the Lenders (in such capacity, the "Project Administrative Agent").
W I T N E S S E T H
WHEREAS, the Borrower has requested that the Lenders provide a credit
facility in an amount of $93,000,000 (the "Credit Facility") for the purposes
hereinafter set forth; and
WHEREAS, the Lenders have agreed to make the requested Credit Facility
available to the Borrower on the terms and conditions hereinafter set forth;
NOW, THEREFORE, IN CONSIDERATION of the premises and other good and
valuable consideration, the receipt and sufficiency of which is hereby
acknowledged, the parties hereto agree as follows:
SECTION 1
DEFINITIONS
1.1 DEFINITIONS.
As used in this Credit Agreement, the following terms shall have the
meanings specified below unless the context otherwise requires:
"Adjusted Base Rate" means the Base Rate plus the Applicable
Percentage.
"Adjusted Eurodollar Rate" means the Eurodollar Rate plus the
Applicable Percentage.
"Administrative Agent" means Bank of America, N.A. or any
successor administrative agent appointed pursuant to Section 9.7.
"Administrative Agent's Fee Letter" means that certain letter
agreement, dated as of August 27, 1999, among the Administrative Agent,
BAS, the Borrower and the Guarantor, as amended, modified, restated or
supplemented from time to time.
"Administrative Agent's Fees" shall have the meaning assigned to
such term in Section 3.5(c).
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"Affiliate" means, with respect to any Person, any other Person
that, directly or indirectly through one or more intermediaries,
controls, or is controlled by, or is under common control with, such
first Person. The term "control" means the possession, directly or
indirectly, of the power, whether or not exercised, to direct or cause
the direction of the management or policies of a Person, whether through
the ownership of Capital Stock by contract or otherwise, and the terms
"controlled" and "common control" have correlative meanings. Unless
otherwise indicated, "Affiliate" refers to an Affiliate of the Borrower.
Notwithstanding the foregoing, in no event shall any Lender or any
Affiliate of any Lender be deemed to be an Affiliate of the Borrower.
For avoidance of doubt, the parties agree that the Borrower is not an
Affiliate of the Guarantor.
"Agency Services Address" means Bank of America, N.A., 0000
Xxxxxxx Xxxx., 0xx Xxxxx, Xxxxxxx, Xxxxxxxxxx 00000, or such other
address as may be identified by written notice from the Administrative
Agent to the Borrower.
"Agents" means a collective reference to the Administrative
Agent and the Project Administrative Agent, and "Agent" means any one of
them.
"Applicable Lending Office" means, for each Lender, the office
of such Lender as such Lender may from time to time specify to the
Administrative Agent and the Borrower by written notice as the office by
which its Eurodollar Loans are made and maintained.
"Applicable Percentage" means, for purposes of calculating the
applicable interest rate for any day for any Loan and the applicable
rate of the Unused Fee for any day for purposes of Section 3.5(b), the
appropriate applicable percentage set forth below opposite the
applicable Senior Debt Rating then in effect as of the most recent
Ratings Date:
APPLICABLE PERCENTAGES
---------------------------------------
FOR FOR FOR
PRICING S&P MOODY'S EURODOLLAR BASE RATE UNUSED
LEVEL RATING RATING LOANS LOANS FEE
----- ------ ------ ----- ----- ---
I >/= A >/= A2 .75% 0% .125%
II >/= A- >/= A3 .875% 0% .15%
III >/=BBB+ >/=Baa1 1.0% 0% .175%
IV >/=BBB >/=Baa2 1.125% 0% .225%
The Applicable Percentages shall be determined based on the Senior Debt
Rating; provided, however, that (i) if the Guarantor shall not have a
rating for its Senior Debt by S&P and Moody's, then the Applicable
Percentages shall be based on Pricing Level IV and (ii) if the Guarantor
shall have a split Senior Debt Rating the higher of the two ratings
shall apply. The Applicable Percentages for the Revolving Loans and
Unused Fee shall be determined and adjusted on the date that the Senior
Debt Rating changes (each a "Ratings Date"). Each
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Applicable Percentage shall be effective from one Ratings Date until the
next Ratings Date. Any adjustment in the Applicable Percentages for the
Loans shall be applicable to all existing Loans as well as any new
Loans.
"Asset Disposition" means any disposition of any or all of the
Property of the Borrower whether by sale, lease, transfer or otherwise.
"Bank of America" means Bank of America, N.A.
"Bankruptcy Code" means the Bankruptcy Code in Title 11 of the
United States Code, as amended, modified, succeeded or replaced from
time to time.
"Bankruptcy Event" means, with respect to any Person, the
occurrence of any of the following with respect to such Person: (i) a
court or governmental agency having jurisdiction in the premises shall
enter a decree or order for relief in respect of such Person in an
involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or appointing a receiver,
liquidator, assignee, custodian, trustee, sequestrator (or similar
official) of such Person or for any substantial part of its Property or
ordering the winding up or liquidation of its affairs; or (ii) there
shall be commenced against such Person an involuntary case under any
applicable bankruptcy, insolvency or other similar law now or hereafter
in effect, or any case, proceeding or other action for the appointment
of a receiver, liquidator, assignee, custodian, trustee, sequestrator
(or similar official) of such Person or for any substantial part of its
Property or for the winding up or liquidation of its affairs, and such
involuntary case or other case, proceeding or other action shall remain
undismissed, undischarged or unbonded for a period of sixty (60)
consecutive days; or (iii) such Person shall commence a voluntary case
under any applicable bankruptcy, insolvency or other similar law now or
hereafter in effect, or consent to the entry of an order for relief in
an involuntary case under any such law, or consent to the appointment or
taking possession by a receiver, liquidator, assignee, custodian,
trustee, sequestrator (or similar official) of such Person or for any
substantial part of its Property or make any general assignment for the
benefit of creditors; or (iv) such Person shall be unable to, or shall
admit in writing its inability to, pay its debts generally as they
become due.
"BAS" means Banc of America Securities LLC.
"Base Rate" means, for any day, the rate per annum equal to the
higher of (a) the Federal Funds Rate for such day plus one-half of one
percent (0.5%) and (b) the Prime Rate for such day. Any change in the
Base Rate due to a change in the Prime Rate or the Federal Funds Rate
shall be effective on the effective date of such change in the Prime
Rate or Federal Funds Rate.
"Base Rate Loan" means any Loan bearing interest at a rate
determined by reference to the Base Rate.
"Borrower" means the Person identified as such in the heading
hereof, together with any permitted successors and assigns.
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"Business Day" means a day other than a Saturday, Sunday or other
day on which commercial banks in Seattle, Washington, San Francisco,
California or New York, New York are authorized or required by law to
close, except that, when used in connection with a Eurodollar Loan, such
day shall also be a day on which dealings between banks are carried on
in Dollar deposits in London, England.
"Businesses" means a collective reference to the businesses
operated at the Real Properties.
"Capital Lease" means, as applied to any Person, any lease of any
Property (whether real, personal or mixed) by that Person as lessee
which, in accordance with GAAP, is or should be accounted for as a
capital lease on the balance sheet of that Person.
"Capital Reserve" means an amount equal to the gross leaseable
square feet of the Improvements multiplied by $.10.
"Capital Stock" means (i) in the case of a corporation, capital
stock, (ii) in the case of an association or business entity, any and
all shares, interests, participations, rights or other equivalents
(however designated) of capital stock, (iii) in the case of a
partnership, partnership interests (whether general or limited), (iv) in
the case of a limited liability company, membership interests and (v)
any other interest or participation that confers on a Person the right
to receive a share of the profits and losses of, or distributions of
assets of, the issuing Person.
"Cash Equivalents" means, as at any date, (a) securities issued
or directly and fully guaranteed or insured by the United States or any
agency or instrumentality thereof (provided that the full faith and
credit of the United States is pledged in support thereof) having
maturities of not more than twelve months from the date of acquisition,
(b) Dollar denominated time deposits and certificates of deposit of (i)
any Lender, (ii) any domestic commercial bank of recognized standing
having capital and surplus in excess of $500,000,000 or (iii) any bank
whose short-term commercial paper rating from S&P is at least A-1 or the
equivalent thereof or from Xxxxx'x is at least P-1 or the equivalent
thereof (any such bank being an "Approved Bank"), in each case with
maturities of not more than 270 days from the date of acquisition, (c)
commercial paper and variable or fixed rate notes issued by any Approved
Bank (or by the parent company thereof) or any variable rate notes
issued by, or guaranteed by, any domestic corporation rated A-1 (or the
equivalent thereof) or better by S&P or P-1 (or the equivalent thereof)
or better by Moody's and maturing within six months of the date of
acquisition, (d) repurchase agreements entered into by any Person with a
bank or trust company (including any of the Lenders) or recognized
securities dealer having capital and surplus in excess of $500,000,000
for direct obligations issued by or fully guaranteed by the United
States in which such Person shall have a perfected first priority
security interest (subject to no other Liens) and having, on the date of
purchase thereof, a fair market value of at least 100% of the amount of
the repurchase obligations and (e) Investments, classified in accordance
with GAAP as current assets, in money market investment programs
registered under the Investment Company Act of 1940, as amended, which
are administered by reputable financial institutions having capital of
at least
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$500,000,000 and the portfolios of which are limited to Investments of
the character described in the foregoing subdivisions (a) through (d).
"Change of Control" means any of the following events: (i) any
Person or two or more Persons acting in concert (other than the
Controlling Stockholders) shall have acquired beneficial ownership
(within the meaning of Rule 13d-3 of the Securities and Exchange
Commission under the Securities Exchange Act of 1934), directly or
indirectly, of Voting Stock of the Guarantor (or other securities
convertible into such Voting Stock) representing 40% or more of the
combined voting power of all Voting Stock of the Guarantor, (ii) any
change in the ownership, membership or control of the Borrower, (iii)
Xxxxx Venture shall cease to remain the sole general partner of the
Borrower, (iv) any change in the ownership, membership or control of
Xxxxx Venture, or (v) any change in the ownership, membership or control
of Xxxxx Properties.
"City" means The City of Seattle, a Washington municipal
corporation.
"Xxxxx Properties" means Xxxxx Properties, Inc., a Washington
corporation.
"Xxxxx Venture" means Xxxxx Venture One LLC, a Washington limited
liability company.
"Closing Date" means the date hereof.
"Code" means the Internal Revenue Code of 1986, as amended, and
any successor statute thereto, as interpreted by the rules and
regulations issued thereunder, in each case as in effect from time to
time. References to sections of the Code shall be construed also to
refer to any successor sections.
"Collateral" means a collective reference to the collateral which
is identified in, and at any time will be covered by, the Collateral
Documents.
"Collateral Documents" means a collective reference to the
Mortgage Instrument and such other documents executed and delivered in
connection with the attachment and perfection of the Administrative
Agent's security interests and liens arising thereunder, including
without limitation, UCC financing statements.
"Commitment" means with respect to each Lender, the Revolving
Commitment of such Lender.
"Construction Costs" shall have the meaning assigned to such
term in Section 6.14.
"Consultant" shall have the meaning assigned to such term in
Schedule 4.3.
"Controlling Stockholders" means the individuals listed on
Schedule 1.1(a) hereto and the spouse and lineal descendants of any such
individual.
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"Credit Documents" means a collective reference to this Credit
Agreement, the Notes, the Guaranty Agreement, the Environmental
Indemnity Agreement, the Administrative Agent's Fee Letter and the
Collateral Documents (in each case as the same may be amended, modified,
restated, supplemented, extended, renewed or replaced from time to
time), and "Credit Document" means any one of them.
"Credit Parties" means a collective reference to the Borrower and
the Guarantor, and "Credit Party" means any one of them.
"Credit Party Obligations" means, without duplication, (i) all of
the obligations of the Credit Parties to the Lenders and the
Administrative Agent, whenever arising, under this Credit Agreement, the
Notes, the Guaranty Agreement, the Collateral Documents or any of the
other Credit Documents (including, but not limited to, any interest
accruing after the occurrence of a Bankruptcy Event with respect to any
Credit Party, regardless of whether such interest is an allowed claim
under the Bankruptcy Code) and (ii) all liabilities and obligations,
whenever arising, owing from the Borrower to any Lender, or any
Affiliate of a Lender, arising under any Hedging Agreement.
"Debt Service" means, as of any date for the twelve month period
ending on such date, the principal and interest payments (assuming (i) a
principal amortization schedule for a loan equal to the sum of the
aggregate outstanding principal amount of Revolving Loans then
outstanding with a term of twenty-five (25) years and (ii) an interest
rate equal to the greater of (x) the then applicable Treasury Rate plus
1.50% per annum and (y) eight percent (8.0%) per annum) which would be
due and payable during such twelve month period.
"Debt Service Coverage Ratio" means, for the twelve month period
ending as of the calendar month most recently ended, the ratio of (a)
Net Operating Income for such period to (b) Debt Service for such
period.
"Default" means any event, act or condition which with notice or
lapse of time, or both, would constitute an Event of Default.
"Defaulting Lender" means, at any time, any Lender that (a) has
failed to make a Loan or purchase a Participation Interest required
pursuant to the term of this Credit Agreement within one Business Day of
when due, (b) other than as set forth in (a) above, has failed to pay to
the Administrative Agent or any Lender an amount owed by such Lender
pursuant to the terms of this Credit Agreement within one Business Day
of when due, unless such amount is subject to a good faith dispute or
(c) has been deemed insolvent or has become subject to a bankruptcy or
insolvency proceeding or with respect to which (or with respect to any
of the assets of which) a receiver, trustee or similar official has been
appointed.
"Deposit Account" shall have the meaning assigned to such term in
Section 2.1(b)(iii).
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"Development Agreement" means that certain Development Agreement
dated as May 12, 1998 between the Borrower, Xxxxx Development LLC, a
Washington limited liability company and Nordstrom, as amended or
modified from time to time.
"Dollars" and "$" means dollars in lawful currency of the United
States.
"Eligible Assignee" means (i) a Lender; (ii) an Affiliate of a
Lender that is a "United States person" (as defined in Section
7701(a)(30) of the Code); and (iii) any other Person approved by the
Administrative Agent and, unless an Event of Default has occurred and is
continuing at the time any assignment is effected in accordance with
Section 10.3, the Borrower (such approval by the Administrative Agent or
the Borrower not to be unreasonably withheld or delayed); provided,
however, that neither the Borrower nor an Affiliate of the Borrower
shall qualify as an Eligible Assignee.
"Environmental Indemnity Agreement" means that certain
Certificate and Indemnity Agreement Regarding Building Laws and
Hazardous Substances dated as of the Closing Date between the Borrower
and the Administrative Agent, as amended or modified from time to time.
"Environmental Laws" means any and all lawful and applicable
Federal, state, local and foreign statutes, laws, regulations,
ordinances, rules, judgments, orders, decrees, permits, concessions,
grants, franchises, licenses, agreements or other governmental
restrictions relating to the environment or to emissions, discharges,
releases or threatened releases of pollutants, contaminants, chemicals,
or industrial, toxic or hazardous substances or wastes into the
environment including, without limitation, ambient air, surface water,
ground water, or land, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal, transport,
or handling of pollutants, contaminants, chemicals, or industrial, toxic
or hazardous substances or wastes.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended, and any successor statute thereto, as interpreted by
the rules and regulations thereunder, all as the same may be in effect
from time to time. References to sections of ERISA shall be construed
also to refer to any successor sections.
"ERISA Affiliate" means an entity which is under common control
with the Borrower within the meaning of Section 4001(a)(14) of ERISA, or
is a member of a group which includes the Borrower and which is treated
as a single employer under Sections 414(b) or (c) of the Code.
"ERISA Event" means (i) with respect to any Plan, the occurrence
of a Reportable Event or the substantial cessation of operations (within
the meaning of Section 4062(e) of ERISA); (ii) the withdrawal by the
Borrower or any ERISA Affiliate from a Multiple Employer Plan during a
plan year in which it was a substantial employer (as such term is
defined in Section 4001(a)(2) of ERISA), or the termination of a
Multiple Employer Plan; (iii) the distribution of a notice of intent to
terminate or the actual termination of a Plan pursuant to Section
4041(a)(2) or 4041A of ERISA; (iv) the institution of proceedings to
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terminate or the actual termination of a Plan by the PBGC under Section
4042 of ERISA; (v) any event or condition which might constitute grounds
under Section 4042 of ERISA for the termination of, or the appointment
of a trustee to administer, any Plan; (vi) the complete or partial
withdrawal of the Borrower or any ERISA Affiliate from a Multiemployer
Plan; (vii) the conditions for imposition of a lien under Section 302(f)
of ERISA exist with respect to any Plan; or (viii) the adoption of an
amendment to any Plan requiring the provision of security to such Plan
pursuant to Section 307 of ERISA.
"Eurodollar Loan" means any Loan that bears interest at a rate
based upon the Eurodollar Rate.
"Eurodollar Rate" means, for any Eurodollar Loan for any Interest
Period therefor, the rate per annum (rounded upwards, if necessary, to
the nearest 1/100 of 1%) determined by the Administrative Agent to be
equal to the quotient obtained by dividing (a) the Interbank Offered
Rate for such Eurodollar Loan for such Interest Period by (b) 1 minus
the Eurodollar Reserve Requirement for such Eurodollar Loan for such
Interest Period.
"Eurodollar Reserve Requirement" means, at any time, the maximum
rate at which reserves (including, without limitation, any marginal,
special, supplemental, or emergency reserves) are required to be
maintained under regulations issued from time to time by the Board of
Governors of the Federal Reserve System (or any successor) by member
banks of the Federal Reserve System with deposits exceeding $5 billion
against "Eurocurrency liabilities" (as such term is used in Regulation
D). Without limiting the effect of the foregoing, the Eurodollar Reserve
Requirement shall reflect any other reserves required to be maintained
by such member banks with respect to (i) any category of liabilities
which includes deposits by reference to which the Adjusted Eurodollar
Rate is to be determined, or (ii) any category of extensions of credit
or other assets which include Eurodollar Loans. The Adjusted Eurodollar
Rate shall be adjusted automatically on and as of the effective date of
any change in the Eurodollar Reserve Requirement.
"Event of Default" shall have the meaning assigned to such term
in Section 8.1.
"Executive Officer" of any Person means any of the chief
executive officer, chief operating officer, president, vice president,
chief financial officer or treasurer of such Person.
"Extension Period" shall have the meaning assigned such term in
Section 2.2.
"Federal Funds Rate" means, for any day, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) equal to the
weighted average of the rates on overnight Federal funds transactions
with members of the Federal Reserve System arranged by Federal funds
brokers on such day, as published by the Federal Reserve Bank of New
York on the Business Day next succeeding such day; provided that (a) if
such day is not a Business Day, the Federal Funds Rate for such day
shall be such rate on such transactions on the next preceding Business
Day as so published on the next succeeding Business Day, and (b) if no
such rate is so published on such next succeeding Business Day, the
Federal
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Funds Rate for such day shall be the average rate charged to the
Administrative Agent (in its individual capacity) on such day on such
transactions as determined by the Administrative Agent.
"Fees" means all fees payable pursuant to Section 3.5.
"Funding Date" means the date on which the conditions set forth
in Section 4.1 and Section 4.2 have been fulfilled, provided that such
date must be on or before March 14, 2000.
"Funds" shall have the meaning assigned to such term in Schedule
4.3.
"GAAP" means generally accepted accounting principles in the
United States applied on a consistent basis and subject to the terms of
Section 1.3.
"Governmental Authority" means any Federal, state, local or
foreign court or governmental agency, authority, instrumentality or
regulatory body.
"Ground Lease Agreement" means that certain ground lease
agreement dated as of September 30, 1997 by and between Xxxxxxx Avenue
Properties, a California general partnership and the Borrower (as
assignee in interest of the Guarantor), as amended or modified from time
to time.
"Guarantor" means Nordstrom, Inc., a Washington corporation.
"Guaranty Agreement" means that certain guaranty agreement dated
as of the date hereof in the form of Exhibit 1.1(a) executed by the
Guarantor, as amended, modified, restated or supplemented from time to
time.
"Guaranty Obligations" means, with respect to any Person, without
duplication, any obligations of such Person (other than endorsements in
the ordinary course of business of negotiable instruments for deposit or
collection) guaranteeing or intended to guarantee any Indebtedness of
any other Person in any manner, whether direct or indirect, and
including without limitation any obligation, whether or not contingent,
(i) to purchase any such Indebtedness or any Property constituting
security therefor, (ii) to advance or provide funds or other support for
the payment or purchase of any such Indebtedness or to maintain working
capital, solvency or other balance sheet condition of such other Person
(including without limitation keep well agreements, maintenance
agreements, comfort letters or similar agreements or arrangements) for
the benefit of any holder of Indebtedness of such other Person, (iii) to
lease or purchase Property, securities or services primarily for the
purpose of assuring the holder of such Indebtedness, or (iv) to
otherwise assure or hold harmless the holder of such Indebtedness
against loss in respect thereof. The amount of any Guaranty Obligation
hereunder shall (subject to any limitations set forth therein) be deemed
to be an amount equal to the outstanding principal amount (or maximum
principal amount, if larger) of the Indebtedness in respect of which
such Guaranty Obligation is made.
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"Hedging Agreements" means any interest rate protection agreement
entered into by the Borrower in connection with the Loans.
"Housing Credits Letter of Credit" shall have the meaning
assigned to such term in Section 7.1(c).
"Housing Project" means the multifamily residential building
containing approximately sixty-five (65) units on five levels above one
street-level of retail space.
"HRG" means Housing Resources Group, a Washington nonprofit
corporation.
"Improvements" means all improvements (including, without
limitation, the Project) constructed by the Borrower on the Land.
"Indebtedness" means, with respect to any Person, without
duplication, (a) all obligations of such Person for borrowed money, (b)
all obligations of such Person evidenced by bonds, debentures, notes or
similar instruments, or upon which interest payments are customarily
made, (c) all obligations of such Person under conditional sale or other
title retention agreements relating to Property purchased by such Person
(other than customary reservations or retentions of title under
agreements with suppliers entered into in the ordinary course of
business), (d) all obligations of such Person issued or assumed as the
deferred purchase price of Property or services purchased by such Person
(other than trade debt incurred in the ordinary course of business and
due within twelve months of the incurrence thereof) which would appear
as liabilities on a balance sheet of such Person, (e) all obligations of
such Person under take-or-pay or similar arrangements or under
commodities agreements, (f) all Indebtedness of others secured by (or
for which the holder of such Indebtedness has an existing right,
contingent or otherwise, to be secured by) any Lien on, or payable out
of the proceeds of production from, Property owned or acquired by such
Person, whether or not the obligations secured thereby have been
assumed, (g) all Guaranty Obligations of such Person with respect to
Indebtedness of another Person, (h) the principal portion of all
obligations of such Person under Capital Leases, (i) all obligations of
such Person under Hedging Agreements, (j) the maximum amount of all
performance and standby letters of credit issued or bankers' acceptances
facilities created for the account of such Person and, without
duplication, all drafts drawn thereunder (to the extent unreimbursed),
(k) all preferred Capital Stock issued by such Person and which by the
terms thereof could be (at the request of the holders thereof or
otherwise) subject to mandatory sinking fund payments, redemption or
other acceleration at any time prior to the final Maturity Date
hereunder, (l) the principal portion of all obligations of such Person
under Synthetic Leases, (m) all obligations of such Person to repurchase
any securities which repurchase obligation is related to the issuance
thereof, including, without limitation, obligations commonly known as
residual equity appreciation potential shares, (n) the Indebtedness of
any partnership or unincorporated joint venture in which such Person is
a general partner or a joint venturer and (o) the aggregate amount of
uncollected accounts receivable of such Person subject at such time to a
sale of receivables (or similar transaction) regardless of whether such
transaction is effected without recourse to such
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Person or in a manner that would not be reflected on the balance sheet
of such Person in accordance with GAAP.
"Interbank Offered Rate" means, for any Eurodollar Loan for any
Interest Period therefor, the rate per annum (rounded upwards, if
necessary, to the nearest 1/100 of 1%) appearing on Telerate Page 3750
(or any successor page) as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period. If for any reason such rate is not
available, the term "Interbank Offered Rate" shall mean, for any
Eurodollar Loan for any Interest Period therefor, the rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) appearing on
Reuters Screen LIBO Page as the London interbank offered rate for
deposits in Dollars at approximately 11:00 a.m. (London time) two
Business Days prior to the first day of such Interest Period for a term
comparable to such Interest Period; provided, however, if more than one
rate is specified on Reuters Screen LIBO Page, the applicable rate shall
be the arithmetic mean of all such rates (rounded upwards, if necessary,
to the nearest 1/100 of 1%).
"Interest Payment Date" means (a) as to Base Rate Loans, each
March 31, June 30, September 30 and December 31 and the Maturity Date,
and (b) as to Eurodollar Loans, the last day of each applicable Interest
Period, the date of repayment of principal of such Loan and the Maturity
Date, and in addition where the applicable Interest Period for a
Eurodollar Loan is greater than three months, then also the date three
months from the beginning of the Interest Period and each three months
thereafter.
"Interest Period" means, as to Eurodollar Loans, a period of one,
two, three or six months' duration, as the Borrower may elect,
commencing, in each case, on the date of the borrowing (including
continuations and conversions thereof); provided, however, (a) if any
Interest Period would end on a day which is not a Business Day, such
Interest Period shall be extended to the next succeeding Business Day
(except that where the next succeeding Business Day falls in the next
succeeding calendar month, then on the next preceding Business Day), (b)
no Interest Period shall extend beyond the Maturity Date and (c) where
an Interest Period begins on a day for which there is no numerically
corresponding day in the calendar month in which the Interest Period is
to end, such Interest Period shall end on the last Business Day of such
calendar month.
"Investment" means (a) the acquisition (whether for cash,
property, services, assumption of Indebtedness, securities or otherwise)
of (i) all or any substantial portion of the assets of any Person or
(ii) the shares of Capital Stock, bonds, notes, debentures, partnership,
joint ventures or other ownership interests or other securities of any
Person or (b) any deposit with, or advance, loan or other extension of
credit to, any Person (other than deposits made in connection with the
purchase of equipment or other assets in the ordinary course of
business) or (c) any other capital contribution to or investment in such
Person, including, without limitation, any Guaranty Obligations
(including any support for a letter of credit issued on behalf of such
Person) incurred for the benefit of such Person.
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"Joint Development Agreement" means that certain Joint
Development Agreement dated as of April 2, 1998 by and among the
Guarantor, Seventh & Olive, Inc. and HRG.
"Land" means the real property located at 0000 Xxxxxxx Xxxxxx in
Seattle, Washington more particularly described as Parcels A and B in
Schedule 1.1(b).
"Lender" means any of the Persons identified as a "Lender" on the
signature pages hereto, and any Person which may become a Lender by way
of assignment in accordance with the terms hereof, together with their
successors and permitted assigns.
"Letter of Credit Agreement" means that certain Agreement
Regarding Letter of Credit to Secure Production of Low Income Housing
for Floor Area Bonus with an effective date of February 3, 2000 between
the Borrower and the City, acting through its Office of Housing.
"Lien" means any mortgage, pledge, hypothecation, assignment,
deposit arrangement, security interest, encumbrance, lien (statutory or
otherwise), preference, priority or charge of any kind (including any
agreement to give any of the foregoing, any conditional sale or other
title retention agreement, any financing or similar statement or notice
filed under the Uniform Commercial Code as adopted and in effect in the
relevant jurisdiction or other similar recording or notice statute, and
any lease in the nature thereof).
"Loan" or "Loans" means the Revolving Loans (or a portion of any
Revolving Loan bearing interest at the Adjusted Base Rate or the
Adjusted Eurodollar Rate), individually or collectively, as appropriate.
"Material Adverse Effect" means a material adverse effect on (i)
the condition (financial or otherwise), operations, business, assets,
liabilities or prospects of (a) the Borrower or (b) the Guarantor and
its Subsidiaries taken as a whole, (ii) the ability of any Credit Party
to perform any material obligation applicable to it under the Credit
Documents to which it is a party or (iii) the material rights and
remedies of the Administrative Agent and the Lenders under the Credit
Documents.
"LTV Ratio" means the ratio of (a) the Revolving Committed Amount
to (b) the fair market value of the Project, as determined in accordance
with appraisal delivered to the Agents pursuant to Section 2.2(h).
"Materials of Environmental Concern" means any gasoline or
petroleum (including crude oil or any fraction thereof) or petroleum
products or any hazardous or toxic substances, materials or wastes,
defined or regulated as such in or under any Environmental Laws,
including, without limitation, asbestos, polychlorinated biphenyls and
urea-formaldehyde insulation.
"Maturity Date" means August 29, 2002, as such date may be
extended pursuant to Section 2.2.
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"Moody's" means Xxxxx'x Investors Service, Inc., or any
successor or assignee of the business of such company in the business of
rating securities.
"Mortgage Instrument" shall have the meaning assigned such term
in Section 4.1(e).
"Mortgage Policy" shall have the meaning assigned to such term
in Section 4.2(e).
"Multiple Employer Plan" means a Plan (other than a Multiemployer
Plan) which the Borrower or any ERISA Affiliate and at least one
employer other than the Borrower or any ERISA Affiliate are contributing
sponsors.
"Net Operating Income" means, (i) assuming the Project has been
substantially complete for twelve months on the date of determination,
for the twelve month period most recently ending, an amount equal to (A)
the income of the Borrower with respect to the operation of the
Improvements (utilizing the actual parking revenues, expense
reimbursements and lease rates so long as such parking revenues, expense
reimbursements and lease rates do not exceed fair market value) for such
period, as determined in accordance with GAAP minus (B) the Vacancy
Reserve for such period minus (C) the Capital Reserve minus (D) an
amount equal to the greater of (I) the sum of all expenses (exclusive of
interest expense, depreciation and amortization expense) incurred or
accrued by the Borrower in connection with the ownership and/or
operation of the Improvements for such period, as determined in
accordance with GAAP and (II) the operating expenses at stabilization
for such period as set forth in the appraisal provided to the Project
Administrative Agent in accordance with Section 4.1(e)(vi) (provided,
however, with respect to any space in the Improvements which has not
been occupied for the complete twelve month period in question, the
income and expenses associated with the leasing of such space during the
twelve month period in question shall be annualized for purposes of
determining Net Operating Income for such twelve month period), or (ii)
if the Project has not been substantially complete for at least twelve
months on the date of determination, for that period in which the
Project has been substantially complete, an amount equal to (A)
annualized income of the Borrower with respect to the operation of the
Improvements (utilizing the actual parking revenues, expense
reimbursements and lease rates so long as such parking revenues, expense
reimbursements and lease rates do not exceed fair market value) for such
period, as determined in accordance with GAAP minus (B) annualized
Vacancy Reserve for such period minus (C) the Capital Reserve minus (D)
an amount equal to the greater of (I) annualized expenses (exclusive of
interest expense, depreciation and amortization expense) incurred or
accrued by the Borrower in connection with the ownership and/or
operation of the Improvements for such period, as determined in
accordance with GAAP and (II) annualized operating expenses at
stabilization for such period as set forth in the appraisal provided to
the Project Administrative Agent in accordance with Section 4.1(e)(vi).
"Nordstrom Credit Agreement" means that certain Amended and
Restated Credit Agreement dated as of October 15, 1999 among the
Guarantor, the lenders named therein, Banc One, NA, as syndication
agent, Xxxxxx Guaranty Trust Company of New York, as
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documentation agent and Bank of America, as administrative agent, as
amended, modified, supplemented or restated from time to time.
"Nordstrom Lease Agreement" means that certain agreement of lease
dated May 12, 1998, as amended, by and between the Borrower and the
Guarantor.
"Nordstrom Loan" means that certain loan or line of credit in an
amount not to exceed $20,000,000 in principal at any one time
outstanding made by the Guarantor to the Borrower.
"Note" or "Notes" means the Revolving Notes, individually or
collectively, as appropriate.
"Notice of Borrowing" means a written notice of borrowing in
substantially the form of Exhibit 2.1(b)(i), as required by Section
2.1(b)(i).
"Notice of Extension/Conversion" means the written notice of
extension or conversion in substantially the form of Exhibit 3.2, as
required by Section 3.2.
"Occupancy Rate" means, with respect to the Project, the ratio
(expressed as a percentage) equal to (i) the gross leaseable area in the
Project presently being rented by tenants pursuant to leases entered
into by the Borrower in accordance with Section 7.15 to (ii) the actual
gross leaseable area in the Project.
"Operating Lease" means, as applied to any Person, any lease
(including, without limitation, leases which may be terminated by the
lessee at any time) of any Property (whether real, personal or mixed)
which is not a Capital Lease other than any such lease in which that
Person is the lessor.
"Other Taxes" shall have the meaning assigned to such term in
Section 3.11.
"Participation Interest" means a purchase by a Lender of a
participation in any Loans as provided in Section 3.14.
"PBGC" means the Pension Benefit Guaranty Corporation established
pursuant to Subtitle A of Title IV of ERISA and any successor thereof.
"Permitted Investments" means Investments which are (i) cash and
Cash Equivalents; (ii) accounts receivable created, acquired or made by
the Borrower in the ordinary course of business and payable or
dischargeable in accordance with customary trade terms; and (iii)
Investments consisting of Capital Stock, obligations, securities or
other property received by the Borrower in settlement of accounts
receivable (created in the ordinary course of business) from bankrupt
obligors.
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"Permitted Liens" means:
(i) Liens in favor of the Administrative Agent to secure the
Credit Party Obligations;
(ii) Liens (other than Liens created or imposed under ERISA) for
taxes, assessments or governmental charges or levies not yet due or
Liens for taxes being contested in good faith by appropriate proceedings
for which adequate reserves determined in accordance with GAAP have been
established (and as to which the Property subject to any such Lien is
not yet subject to foreclosure, sale or loss on account thereof);
(iii) Liens in connection with attachments or judgments
(including judgment or appeal bonds) provided that the judgments secured
shall, (a) within 30 days after the entry thereof, have been discharged,
(b) within 30 days after execution thereof have been stayed pending
appeal and have been discharged within 30 days after the expiration of
any such stay or (c) have been covered in full by insurance by an
insurance carrier who has acknowledged coverage and has the ability to
perform;
(iv) easements, rights-of-way, restrictions (including zoning
restrictions), minor defects or irregularities in title and other
similar charges or encumbrances not, in any material respect, impairing
the use of the encumbered Property for its intended purposes;
(v) statutory Liens of mechanics, materialmen and suppliers and
other Liens imposed by law or pursuant to customary reservations or
retentions of title arising in the ordinary course of business, provided
that such Liens secure only amounts not yet due and payable or, if due
and payable, (A) are unfiled and no other action has been taken to
enforce the same or are being contested in good faith by appropriate
proceedings for which adequate reserves determined in accordance with
GAAP have been established (and as to which the Property subject to any
such Lien is not yet subject to foreclosure, sale or loss on account
thereof) or (B) (I) the Borrower has deposited a bond or other security
satisfactory to the Administrative Agent and the Project Administrative
Agent in an amount reasonably required by the Administrative Agent and
the Project Administrative Agent, but not more than the amounts
specified in RCW 60.04.161, as now or hereafter amended, (II) the
Borrower, to the extent the Borrower reasonably believes the Lien is
frivolous and made without reasonable cause, or is clearly excessive,
immediately commences its contest of such Lien, applies to court for a
show of cause as provided for in RCW 60.04.221(9), as now or hereafter
amended and continuously pursues the contest in good faith and with due
diligence, (III) foreclosure of the Lien is stayed and (IV) the Borrower
pays any judgment rendered for the lien claimant or other third party
within ten (10) days after the entry of the judgment;
(vi) leases or subleases granted to others not interfering in
any material respect with the business of any Credit Party;
(vii) any matters shown as an exception to title on the Mortgage
Policy as of the Closing Date;
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(viii) in order to obtain a certificate of acceptance for the
Housing Project from the City, (A) an agreement restricting the
occupancy and rents of the Housing Project consistent with the terms of
Section 4.2(b) of the Letter of Credit Agreement and (B) a deed of trust
recorded by the City against the Tipp Property to secure the owner of
the Housing Project's obligation to buyout the Housing Project in the
event such owner fails to restore or replace the Housing Project
following a casualty or condemnation; and
(ix) Liens existing on the date hereof and identified on Schedule
1.1(c); provided that no such Lien shall extend to any property other
than the property subject thereto on the Closing Date.
"Person" means any individual, partnership, joint venture, firm,
corporation, limited liability company, association, trust or other
enterprise (whether or not incorporated) or any Governmental Authority.
"Plan" means any employee benefit plan (as defined in Section
3(3) of ERISA) which is covered by ERISA and with respect to which the
Borrower or any ERISA Affiliate is (or, if such plan were terminated at
such time, would under Section 4069 of ERISA be deemed to be) an
"employer" within the meaning of Section 3(5) of ERISA.
"Plans and Specifications" shall have the meaning assigned to
such term in Section 4.1(g).
"Prime Rate" means the per annum rate of interest established
from time to time by Bank of America as its prime rate, which rate may
not be the lowest rate of interest charged by Bank of America to its
customers.
"Project" means the approximately 572,000 square foot office
building and 198,000 square foot parking garage located on the Land as
described in the Plans and Specifications.
"Project Administrative Agent" means Bank of America, N.A. or
any successor project administrative agent appointed pursuant to Section
9.7.
"Project Budget" shall have the meaning assigned to such term in
Section 6.14.
"Property" means any interest in any kind of property or asset,
whether real, personal or mixed, or tangible or intangible.
"Ratings Date" shall have the meaning assigned to such term in
the definition of "Applicable Percentage" set forth in this Section 1.1.
"Real Properties" means the collective reference to (a) the Land
and the Improvements and (b) the Tipp Property.
"Register" shall have the meaning assigned to such term in
Section 11.3(c).
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"Regulation D, T, U, or X" means Regulation D, T, U or X,
respectively, of the Board of Governors of the Federal Reserve System as
from time to time in effect and any successor to all or a portion
thereof.
"Reportable Event" means any of the events set forth in Section
4043(c) of ERISA, other than those events as to which the notice
requirement has been waived by regulation.
"Required Lenders" means, at any time, Lenders other than
Defaulting Lenders which are then in compliance with their obligations
hereunder (as determined by the Administrative Agent) and holding in the
aggregate more than 66 2/3% of (i) the Revolving Commitments (and
Participation Interests therein) or (ii) if the Revolving Commitments
have been terminated, the outstanding Loans and Participation Interests.
"Requirement of Law" means, as to any Person, the certificate of
incorporation and by-laws or other organizational or governing documents
of such Person, and any law, treaty, rule or regulation or determination
of an arbitrator or a court or other Governmental Authority, in each
case applicable to or binding upon such Person or to which any of its
material property is subject.
"Restricted Payment" means (i) any dividend or other payment or
distribution, direct or indirect, on account of any shares of any class
of Capital Stock of the Borrower or any of its Subsidiaries, now or
hereafter outstanding, (ii) any redemption, retirement, sinking fund or
similar payment, purchase or other acquisition for value, direct or
indirect, of any shares of any class of Capital Stock of the Borrower or
any of its Subsidiaries, now or hereafter outstanding or (iii) any
payment made to retire, or to obtain the surrender of, any outstanding
warrants, options or other rights to acquire shares of any class of
Capital Stock of the Borrower or any of its Subsidiaries, now or
hereafter outstanding.
"Revolving Commitment" means, with respect to each Lender, the
commitment of such Lender in an aggregate principal amount at any time
outstanding of up to such Lender's Revolving Commitment Percentage of
the Revolving Committed Amount to make Revolving Loans in accordance
with the provisions of Section 2.1(a).
"Revolving Commitment Percentage" means, for any Lender, the
percentage identified as its Revolving Commitment Percentage on Schedule
2.1(a), as such percentage may be modified in connection with any
assignment made in accordance with the provisions of Section 10.3.
"Revolving Committed Amount" shall have the meaning assigned to
such term in Section 2.1(a).
"Revolving Loans" shall have the meaning assigned to such term
in Section 2.1(a).
"Revolving Note" or "Revolving Notes" means the promissory notes
of the Borrower in favor of each Lender provided pursuant to Section
2.1(e) and evidencing the Revolving Loans of such Lender, individually
or collectively, as appropriate, as such
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promissory notes may be amended, modified, restated, supplemented,
extended, renewed or replaced from time to time.
"S&P" means Standard & Poor's Ratings Group, a division of The
McGraw Hill Companies, Inc., or any successor or assignee of the
business of such division in the business of rating securities.
"Sale and Leaseback Transaction" means any arrangement pursuant
to which the Borrower, directly or indirectly, becomes liable as lessee,
guarantor or other surety with respect to any lease, whether an
Operating Lease or a Capital Lease, of any Property (a) which the
Borrower has sold or transferred (or is to sell or transfer) to a Person
which is not the Borrower or (b) which the Borrower intends to use for
substantially the same purpose as any other Property which has been sold
or transferred (or is to be sold or transferred) by the Borrower to
another Person which is not the Borrower in connection with such lease.
"SCIDPDA TDR Agreement" means that certain Agreement for Purchase
and Sale of Transferable Development Rights dated as of December 28,
1999 by and between Seattle Chinatown International District
Preservation and Development Authority and the Borrower.
"Securities Exchange Act" means the Securities Exchange Act of
1934.
"Senior Debt" shall have the meaning given such term in the
definition of Senior Debt Rating.
"Senior Debt Rating" means the publicly announced ratings by S&P
and Xxxxx'x for the senior unsecured (non-credit enhanced) long term
debt of the Guarantor ("Senior Debt").
"Seventh and Xxxxxxx" means Seventh and Xxxxxxx LLC, a Washington
limited liability company.
"Single Employer Plan" means any Plan which is covered by Title
IV of ERISA, but which is not a Multiemployer Plan or a Multiple
Employer Plan.
"Solvent" means, with respect to any Person on a particular date,
that on such date (i) the property of such Person, at a fair valuation,
is greater than the total amount of such Person's absolute and matured
debts, and (b) such Person is generally paying his, her or its debts as
they become due.
"Stabilization" means, with respect to the Project, the condition
where (i) the Project has an Occupancy Rate of at least 90% for two
consecutive fiscal quarters and (ii) the Borrower has received a
certificate of occupancy from the appropriate Governmental Authority
with respect to the Project (in form and substance satisfactory to the
Project Administrative Agent).
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"Subordinated Debt" shall have the meaning assigned to such term
in Section 7.1(h).
"Subsidiary" means, as to any Person at any time, (a) any
corporation more than 50% of whose Capital Stock of any class or classes
having by the terms thereof ordinary voting power to elect a majority of
the directors of such corporation (irrespective of whether or not at
such time, any class or classes of such corporation shall have or might
have voting power by reason of the happening of any contingency) is at
such time owned by such Person directly or indirectly through
Subsidiaries, and (b) any partnership, association, joint venture or
other entity of which such Person directly or indirectly through
Subsidiaries owns at such time more than 50% of the Capital Stock. The
Borrower is not a Subsidiary of the Guarantor.
"Synthetic Lease" means any synthetic lease, tax retention
operating lease, off-balance sheet loan or similar off-balance sheet
financing product where such transaction is considered borrowed money
indebtedness for tax purposes but is classified as an Operating Lease
under GAAP.
"Taxes" shall have the meaning assigned to such term in Section
3.11.
"Tipp Property" means the real property described as Parcel C in
Schedule 1.1(b).
"Title Insurance Company" shall have the meaning assigned to such
term in Section 4.2(d).
"Transferable Development Rights Agreements" means a collective
reference to the SCIDPDA TDR Agreement and the YMCA TDR Agreement.
"Treasury Rate" means, for any day, a rate of interest equal to
the yield for actively traded U.S. Treasury securities having a ten (10)
year maturity as determined by the Administrative Agent prior to 9:00
a.m. (San Francisco, California time).
"Unused Fee" shall have the meaning assigned to such term in
Section 3.5(b).
"Unused Fee Calculation Period" shall have the meaning assigned
to such term in Section 3.5(b).
"Unused Revolving Committed Amount" means, for any period, the
amount by which (a) the then applicable Revolving Committed Amount
exceeds (b) the daily average sum for such period of the outstanding
aggregate principal amount of all Revolving Loans.
"Upfront Fee" shall have the meaning assigned to such term in
Section 3.5(a).
"Vacancy Reserve" means an amount equal to 2.6% of the income
generated by the Borrower from the operation of the Improvements for the
applicable period.
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"Voting Stock" means, with respect to any Person, Capital Stock
issued by such Person the holders of which are ordinarily, in the
absence of contingencies, entitled to vote for the election of directors
(or persons performing similar functions) of such Person, even though
the right so to vote has been suspended by the happening of such a
contingency.
"Wholly Owned Subsidiary" of any Person means any Subsidiary 100%
of whose Voting Stock is at the time owned by such Person directly or
indirectly through other Wholly Owned Subsidiaries.
"Year 2000 Problem" shall have the meaning assigned to such term
in Section 5.21.
"YMCA TDR Agreement" means that certain Agreement for Purchase
and Sale of Transferable Development Rights dated as of December 3, 1999
by and among Young Men's Christian Association of Greater Seattle, 909
4th YMCA Limited Partnership and the Borrower.
1.2 COMPUTATION OF TIME PERIODS.
For purposes of computation of periods of time hereunder, the word
"from" means "from and including" and the words "to" and "until" each mean "to
but excluding."
1.3 ACCOUNTING TERMS.
Except as otherwise expressly provided herein, all accounting terms used
herein shall be interpreted, and all financial statements and certificates and
reports as to financial matters required to be delivered to the Administrative
Agent and/or the Lenders hereunder shall be prepared, in accordance with GAAP
applied on a consistent basis. All calculations made for the purposes of
determining compliance with this Credit Agreement shall (except as otherwise
expressly provided herein) be made by application of GAAP applied on a basis
consistent with the most recent annual or quarterly financial statements
delivered pursuant to Section 6.1 (or, prior to the delivery of the first
financial statements pursuant to Section 6.1, consistent with the financial
statements as at December 31, 1998); provided, however, if (a) the Borrower
shall object to determining such compliance on such basis at the time of
delivery of such financial statements due to any change in GAAP or the rules
promulgated with respect thereto or (b) the Administrative Agent or the Required
Lenders shall so object in writing within 60 days after delivery of such
financial statements, then such calculations shall be made on a basis consistent
with the most recent financial statements delivered by the Borrower to the
Lenders as to which no such objection shall have been made.
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SECTION 2
CREDIT FACILITIES
2.1 REVOLVING LOANS.
(a) Revolving Commitment. Subject to the terms and conditions
hereof and in reliance upon the representations and warranties set forth
herein, each Lender severally agrees to make available to the Borrower
such Lender's Revolving Commitment Percentage of revolving credit loans
requested by the Borrower in Dollars ("Revolving Loans") from time to
time from the Funding Date until the Maturity Date, or such earlier date
as the Revolving Commitments shall have been terminated as provided
herein; provided, however, that the sum of the aggregate outstanding
principal amount of Revolving Loans shall not exceed NINETY THREE
MILLION DOLLARS ($93,000,000) (as such aggregate maximum amount may be
reduced from time to time as provided in Section 3.4, the "Revolving
Committed Amount"); provided, further, (A) with regard to each Lender
individually, such Lender's outstanding Revolving Loans shall not exceed
such Lender's Revolving Commitment Percentage of the Revolving Committed
Amount, (B) the sum of the aggregate outstanding principal amount of
Revolving Loans shall not exceed the Revolving Committed Amount, (C) a
Revolving Loan borrowing shall only be made available once per calendar
month and (D) each Revolving Loan borrowing is subject to the conditions
set forth in Schedule 4.3. Revolving Loans may consist of Base Rate
Loans or Eurodollar Loans, or a combination thereof, as the Borrower may
request; provided, however, that no more than six Eurodollar Loans shall
be outstanding hereunder at any time (it being understood that, for
purposes hereof, Eurodollar Loans with different Interest Periods shall
be considered as separate Eurodollar Loans, even if they begin on the
same date, although borrowings, extensions and conversions may, in
accordance with the provisions hereof, be combined at the end of
existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period). Once repaid, the Revolving Loans cannot be
reborrowed. No Revolving Loans shall be made available during the
Extension Period.
(b) Revolving Loan Borrowings.
(i) Notice of Borrowing. After having satisfied the
terms and conditions of Schedule 4.3 hereof with respect to any
request for the disbursement of Funds, the Borrower may then
make a request for a Revolving Loan in the amount approved by
the Project Administrative Agent with respect to such a request
for Funds in accordance with the terms of Schedule 4.3;
provided, however, if the Borrower submits a Notice of Borrowing
to the Administrative Agent prior to having satisfied the terms
and conditions of Schedule 4.3, the parties hereto agree that
the Administrative Agent shall not accept such Notice of
Borrowing, and the Borrower shall have to re-submit such Notice
of Borrowing after the Project Administrative Agent has
confirmed that the terms and conditions of Schedule 4.3 with
respect to such borrowing have been satisfied. The Borrower
shall request a Revolving Loan borrowing by written notice (or
telephonic notice promptly confirmed in writing) to the
Administrative Agent not later than 10:00 A.M. (San
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Francisco, California time) on the Business Day prior to the
date of the requested borrowing in the case of Base Rate Loans,
and on the third Business Day prior to the date of the requested
borrowing in the case of Eurodollar Loans. Each such request for
borrowing shall be irrevocable and shall specify (A) that a
Revolving Loan is requested, (B) the date of the requested
borrowing (which shall be a Business Day), (C) the aggregate
principal amount to be borrowed, and (D) whether the borrowing
shall be comprised of Base Rate Loans, Eurodollar Loans or a
combination thereof, and if Eurodollar Loans are requested, the
Interest Period(s) therefor. If the Borrower shall fail to
specify in any such Notice of Borrowing (I) an applicable
Interest Period in the case of a Eurodollar Loan, then such
notice shall be deemed to be a request for an Interest Period of
one month, or (II) the type of Revolving Loan requested, then
such notice shall be deemed to be a request for a Base Rate Loan
hereunder. The Administrative Agent shall give notice to each
affected Lender promptly upon receipt of each Notice of
Borrowing pursuant to this Section 2.1(b)(i), the contents
thereof and each such Lender's share of any borrowing to be made
pursuant thereto.
(ii) Minimum Amounts. (a) Each Eurodollar Loan shall be
in a minimum aggregate principal amount of $2,000,000 and
integral multiples of $100,000 in excess thereof (or the
remaining amount of the Revolving Committed Amount, if less),
and (b) each Base Rate Loan shall be in a minimum aggregate
principal amount of $100,000 (or the remaining amount of the
Revolving Committed Amount, if less).
(iii) Advances. Each Lender will make its Revolving
Commitment Percentage of each Revolving Loan borrowing available
to the Administrative Agent for the account of the Borrower as
specified in Section 3.15(a), or in such other manner as the
Administrative Agent may specify in writing, by 8:00 A.M. (San
Francisco, California time) on the date specified in the
applicable Notice of Borrowing in Dollars and in funds
immediately available to the Administrative Agent. Such
borrowing will then be made available to the Borrower by the
Administrative Agent by crediting the account of the Borrower
with Bank of America (the "Deposit Account") with the aggregate
of the amounts made available to the Administrative Agent by the
Lenders and in like funds as received by the Administrative
Agent.
(c) Repayment. The principal amount of all Revolving Loans shall
be due and payable in full on the Maturity Date, unless accelerated
sooner pursuant to Section 8.2.
(d) Interest. Subject to the provisions of Section 3.1,
(i) Base Rate Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Base Rate Loans,
such Base Rate Loans shall bear interest at a per annum rate
equal to the Adjusted Base Rate.
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(ii) Eurodollar Loans. During such periods as Revolving
Loans shall be comprised in whole or in part of Eurodollar
Loans, such Eurodollar Loans shall bear interest at a per annum
rate equal to the Adjusted Eurodollar Rate.
Interest on Revolving Loans shall be payable in arrears on each
applicable Interest Payment Date (or at such other times as may be
specified herein).
(e) Revolving Notes. The Revolving Loans made by each Lender
shall be evidenced by a duly executed promissory note of the Borrower to
such Lender in an original principal amount equal to such Lender's
Revolving Commitment Percentage of the Revolving Committed Amount and in
substantially the form of Exhibit 2.1(e).
2.2 EXTENSION OF MATURITY DATE.
Not more than 120 days and not less than 60 days prior to August 29,
2002 (the "Extension Date"), the Borrower may request in writing that the
Lenders extend the Maturity Date for an additional one year period (the
"Extension Period"). The Maturity Date shall be extended for an additional one
year period if, on the Extension Date, the following conditions are satisfied:
(a) no Default or Event of Default then exists;
(b) payment by the Borrower to each Lender of an extension fee
in an amount equal to 0.25% of such Lender's outstanding Revolving Loans
on the Extension Date;
(c) the Guarantor shall have a Senior Debt Rating of no less
than A- from S&P and A3 from Xxxxx'x;
(d) certificates of occupancy with respect to the Project (in
form and substance reasonably satisfactory to the Project Administrative
Agent) shall have been issued by the appropriate Governmental Authority;
(e) the Guarantor shall not be in default under any agreement
governing Indebtedness of the Guarantor for borrowed money;
(f) (i) the Nordstrom Lease Agreement shall be in full force and
effect and (ii) the Administrative Agent shall have received from the
Guarantor an estoppel certificate, in a form attached hereto as Exhibit
2.2;
(g) the Debt Service Coverage Ratio, as of the calendar month
most recently ended, for the twelve month period ending on such date,
shall be greater than or equal to 1.25 to 1.0;
(h) the Administrative Agent and the Project Administrative
Agent shall have received an appraisal of the Project prepared by a
qualified appraiser designated by and satisfactory to the Administrative
Agent and the Project Administrative Agent and otherwise satisfactory in
form and substance to the Administrative Agent and the Project
Administrative Agent, demonstrating an LTV Ratio less than or equal to
0.75 to 1.0;
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(i) the construction of the Project has been substantially
completed in accordance with the Plans and Specifications and a
certificate (in form and substance satisfactory to the Project
Administrative Agent) as to such completion shall have been issued by
the project architect;
(j) the Administrative Agent and the Project Administrative
Agent shall have received an updated title report for the Project
containing no exceptions not approved by the Administrative Agent and
the Project Administrative Agent and otherwise in form and substance
satisfactory to the Administrative Agent and the Project Administrative
Agent; and
(k) the Administrative Agent and the Project Administrative
Agent shall have received an as-built survey of the Project, certified
to the Administrative Agent by an independent professional licensed land
surveyor showing all improvements in place on the Land and otherwise in
form and substance satisfactory to the Administrative Agent and the
Project Administrative Agent, together with any endorsements to the
Title Policy reasonably requested by the Administrative Agent or the
Project Administrative Agent to address changes in the state of title
disclosed in such as-built survey.
SECTION 3
OTHER PROVISIONS RELATING TO CREDIT FACILITIES
3.1 DEFAULT RATE.
Upon the occurrence, and during the continuance, of an Event of Default,
the principal of and, to the extent permitted by law, interest on the Loans and
any other amounts owing hereunder or under the other Credit Documents shall bear
interest, payable on demand, at a per annum rate 2% greater than the rate which
would otherwise be applicable (or if no rate is applicable, whether in respect
of interest, fees or other amounts, then the Adjusted Base Rate plus 2%).
3.2 EXTENSION AND CONVERSION.
The Borrower shall have the option, on any Business Day, to extend
existing Loans into a subsequent permissible Interest Period or to convert Loans
into Loans of another interest rate type; provided, however, that (i) except as
provided in Section 3.8, Eurodollar Loans may be converted into Base Rate Loans
or extended as Eurodollar Loans for new Interest Periods only on the last day of
the Interest Period applicable thereto, (ii) without the consent of the Required
Lenders, Eurodollar Loans may be extended, and Base Rate Loans may be converted
into Eurodollar Loans, only if the conditions precedent set forth in Section 4.3
are satisfied on the date of extension or conversion, (iii) Loans extended as,
or converted into, Eurodollar Loans shall be subject to the terms of the
definition of "Interest Period" set forth in Section 1.1 and shall be in such
minimum amounts as provided in, with respect to Revolving Loans, Section
2.1(b)(ii), (iv) no more than six Eurodollar Loans shall be outstanding
hereunder at any time (it being understood that, for purposes hereof, Eurodollar
Loans with different Interest Periods shall be considered as separate Eurodollar
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Loans, even if they begin on the same date, although borrowings, extensions and
conversions may, in accordance with the provisions hereof, be combined at the
end of existing Interest Periods to constitute a new Eurodollar Loan with a
single Interest Period) and (v) any request for extension or conversion of a
Eurodollar Loan which shall fail to specify an Interest Period shall be deemed
to be a request for an Interest Period of one month. Each such extension or
conversion shall be effected by the Borrower by giving a Notice of
Extension/Conversion (or telephonic notice promptly confirmed in writing) to the
office of the Administrative Agent specified in Schedule 2.1(a), or at such
other office as the Administrative Agent may designate in writing, prior to
10:00 A.M. (San Francisco, California time) on the Business Day of, in the case
of the conversion of a Eurodollar Loan into a Base Rate Loan, and on the third
Business Day prior to, in the case of the extension of a Eurodollar Loan as, or
conversion of a Base Rate Loan into, a Eurodollar Loan, the date of the proposed
extension or conversion, specifying the date of the proposed extension or
conversion, the Loans to be so extended or converted, the types of Loans into
which such Loans are to be converted and, if appropriate, the applicable
Interest Periods with respect thereto. Each request for extension or conversion
shall be irrevocable and shall constitute a representation and warranty by the
Borrower of the matters specified in subsections (b), (c), (d), (e), (g) and (h)
of Section 4.3. In the event the Borrower fails to request extension or
conversion of any Eurodollar Loan in accordance with this Section, or any such
conversion or extension is not permitted or required by this Section, then such
Eurodollar Loan shall be automatically converted into a Base Rate Loan at the
end of the Interest Period applicable thereto. The Administrative Agent shall
give each Lender notice as promptly as practicable of any such proposed
extension or conversion affecting any Loan.
3.3 PREPAYMENTS.
(a) Voluntary Prepayments. The Borrower shall have the right to
prepay Loans in whole or in part from time to time; provided, however,
that (i) each partial prepayment of Eurodollar Loans shall be in a
minimum principal amount of $2,000,000 and integral multiples of
$100,000 in excess thereof (or the then remaining principal balance of
the Revolving Loans, if less) and (ii) each partial prepayment of Base
Rate Loans shall be in a minimum principal amount of $100,000 and
integral multiples of $100,000 in excess thereof (or the remaining
principal balance of Base Rate Loans, if less). Subject to the foregoing
terms, amounts prepaid under this Section 3.3(a) shall be applied as the
Borrower may elect; provided that if the Borrower fails to specify a
voluntary prepayment then such prepayment shall be applied to Revolving
Loans, in each case first to Base Rate Loans and then to Eurodollar
Loans in direct order of Interest Period maturities. All prepayments
under this Section 3.3(a) shall be subject to Section 3.12, but
otherwise without premium or penalty, and shall be accompanied by
interest on the principal amount prepaid through the date of prepayment.
(b) Mandatory Prepayments.
(i) Revolving Committed Amount. If at any time, the sum
of the aggregate outstanding principal amount of Revolving Loans
shall exceed the Revolving Committed Amount, the Borrower
immediately shall prepay the Revolving Loans in an amount
sufficient to eliminate such excess.
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(ii) Application of Mandatory Prepayments. All amounts
required to be paid pursuant to this Section 3.3(b) shall be
applied to the Revolving Loans. Within the parameters of the
applications set forth above, prepayments shall be applied first
to Base Rate Loans and then to Eurodollar Loans in direct order
of Interest Period maturities. All prepayments under this
Section 3.3(b) shall be subject to Section 3.12, but otherwise
without premium or penalty, and shall be accompanied by interest
on the principal amount prepaid through the date of prepayment.
3.4 TERMINATION AND REDUCTION OF REVOLVING COMMITTED AMOUNT.
(a) Voluntary Reductions. The Borrower may from time to time
permanently reduce or terminate the Revolving Committed Amount in whole
or in part (in minimum aggregate amounts of $5,000,000 or in integral
multiples of $1,000,000 in excess thereof (or, if less, the full
remaining amount of the then applicable Revolving Committed Amount))
upon five Business Days' prior written notice to the Administrative
Agent; provided, however, no such termination or reduction shall be made
which would cause the sum of the aggregate outstanding principal amount
of Revolving Loans to exceed the Revolving Committed Amount, unless,
concurrently with such termination or reduction, the Revolving Loans are
repaid to the extent necessary to eliminate such excess. The
Administrative Agent shall promptly notify each affected Lender of
receipt by the Administrative Agent of any notice from the Borrower
pursuant to this Section 3.4(a).
(b) Maturity Date. The Revolving Commitments of the Lenders
shall automatically terminate on the Maturity Date.
(c) General. The Borrower shall pay to the Administrative Agent
for the account of the Lenders in accordance with the terms of Section
3.5(b), on the date of each termination or reduction of the Revolving
Committed Amount, the Unused Fee accrued through the date of such
termination or reduction on the amount of the Revolving Committed Amount
so terminated or reduced.
3.5 FEES.
(a) Upfront Fees. The Borrower agrees to pay to the
Administrative Agent for the benefit of the Lenders in immediately
available funds on or before the Closing Date an upfront fee (the
"Upfront Fee") in the amount provided in the Administrative Agent's Fee
Letter.
(b) Unused Fee. In consideration of the Revolving Commitments of
the Lenders hereunder, the Borrower agrees to pay to the Administrative
Agent for the account of each Lender a fee (the "Unused Fee") on the
Unused Revolving Committed Amount computed at a per annum rate for each
day during the applicable Unused Fee Calculation Period (hereinafter
defined) at a rate equal to the Applicable Percentage in effect from
time to time. The Unused Fee shall commence to accrue on the Funding
Date and shall be due and payable in arrears on the last Business Day of
each March, June, September and December (and on any date that the
Revolving Committed Amount is reduced and on the
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Maturity Date) for the immediately preceding quarter (or portion
thereof) (each such quarter or portion thereof for which the Unused Fee
is payable hereunder being herein referred to as an "Unused Fee
Calculation Period"), beginning with the first of such dates to occur
after the Funding Date.
(c) Administrative Fees. The Borrower agrees to pay to the
Administrative Agent, for its own account, and for the account of BAS,
as applicable, the fees referred to in the Administrative Agent's Fee
Letter (collectively, the "Administrative Agent's Fees").
3.6 CAPITAL ADEQUACY.
If after the date hereof, the adoption or the becoming effective of, or
any change in, or any change by any Governmental Authority, central bank or
comparable agency charged with the interpretation or administration thereof in
the interpretation or administration of, any applicable law, rule or regulation
regarding capital adequacy, or compliance by any Lender with any request or
directive regarding capital adequacy (whether or not having the force of law) of
any such authority, central bank or comparable agency, has or would have the
effect of reducing the rate of return on such Lender's capital or assets as a
consequence of its commitments or obligations hereunder to a level below that
which such Lender could have achieved but for such adoption, effectiveness,
change or compliance (taking into consideration such Lender's policies with
respect to capital adequacy), then, upon notice from such Lender to the
Borrower, the Borrower shall be obligated to pay to such Lender such additional
amount or amounts as will compensate such Lender for such reduction. Each
determination by any such Lender of amounts owing under this Section shall be
prima facie evidence of such amounts.
3.7 LIMITATION ON EURODOLLAR LOANS.
If on or prior to the first day of any Interest Period for any
Eurodollar Loan:
(a) the Administrative Agent determines (which determination
shall be conclusive) that by reason of circumstances affecting the
relevant market, adequate and reasonable means do not exist for
ascertaining the Eurodollar Rate for such Interest Period; or
(b) the Required Lenders determine (which determination shall be
conclusive) and notify the Administrative Agent that the Eurodollar Rate
will not adequately and fairly reflect the cost to the Lenders of
funding Eurodollar Loans for such Interest Period;
then the Administrative Agent shall give the Borrower prompt notice thereof, and
so long as such condition remains in effect, the Lenders shall be under no
obligation to make additional Eurodollar Loans, continue Eurodollar Loans, or to
convert Base Rate Loans into Eurodollar Loans and the Borrower shall, on the
last day(s) of the then current Interest Period(s) for the outstanding
Eurodollar Loans, either prepay such Eurodollar Loans or convert such Eurodollar
Loans into Base Rate Loans in accordance with the terms of this Credit
Agreement.
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3.8 ILLEGALITY.
Notwithstanding any other provision of this Credit Agreement, in the
event that it becomes unlawful for any Lender or its Applicable Lending Office
to make, maintain, or fund Eurodollar Loans hereunder, then such Lender shall
promptly notify the Borrower thereof and such Lender's obligation to make or
continue Eurodollar Loans and to convert Base Rate Loans into Eurodollar Loans
shall be suspended until such time as such Lender may again make, maintain, and
fund Eurodollar Loans (in which case the provisions of Section 3.10 shall be
applicable).
3.9 REQUIREMENTS OF LAW.
If, after the date hereof, the adoption of any applicable law, rule, or
regulation, or any change in any applicable law, rule, or regulation, or any
change in the interpretation or administration thereof by any Governmental
Authority, central bank, or comparable agency charged with the interpretation or
administration thereof, or compliance by any Lender (or its Applicable Lending
Office) with any request or directive (whether or not having the force of law)
of any such Governmental Authority, central bank, or comparable agency:
(i) shall subject such Lender (or its Applicable Lending
Office) to any tax, duty, or other charge with respect to any
Eurodollar Loans, its Notes, or its obligation to make
Eurodollar Loans, or change the basis of taxation of any amounts
payable to such Lender (or its Applicable Lending Office) under
this Credit Agreement or its Notes in respect of any Eurodollar
Loans (other than taxes imposed on the overall net income of
such Lender by the jurisdiction in which such Lender has its
principal office or such Applicable Lending Office);
(ii) shall impose, modify, or deem applicable any
reserve, special deposit, assessment, or similar requirement
(other than the Eurodollar Reserve Requirement utilized in the
determination of the Adjusted Eurodollar Rate) relating to any
extensions of credit or other assets of, or any deposits with or
other liabilities or commitments of, such Lender (or its
Applicable Lending Office), including the Commitment of such
Lender hereunder; or
(iii) shall impose on such Lender (or its Applicable
Lending Office) or the London interbank market any other
condition affecting this Credit Agreement or its Notes or any of
such extensions of credit or liabilities or commitments;
and the result of any of the foregoing is to increase the cost to such Lender
(or its Applicable Lending Office) of making, converting into, continuing, or
maintaining any Eurodollar Loans or to reduce any sum received or receivable by
such Lender (or its Applicable Lending Office) under this Credit Agreement or
its Notes with respect to any Eurodollar Loans, then the Borrower shall pay to
such Lender on demand such amount or amounts as will compensate such Lender for
such increased cost or reduction. If any Lender requests compensation by the
Borrower under this Section 3.9, the Borrower may, by notice to such Lender
(with a copy to the Administrative Agent), suspend the obligation of such Lender
to make or continue Eurodollar Loans, or to convert Base Rate Loans into
Eurodollar Loans, until the event or condition giving rise to such request
ceases to
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be in effect (in which case the provisions of Section 3.10 shall be applicable);
provided that such suspension shall not affect the right of such Lender to
receive the compensation so requested. Each Lender shall promptly notify the
Borrower and the Administrative Agent of any event of which it has knowledge,
occurring after the date hereof, which will entitle such Lender to compensation
pursuant to this Section 3.9 and will designate a different Applicable Lending
Office if such designation will avoid the need for, or reduce the amount of,
such compensation and will not, in the reasonable judgment of such Lender, be
otherwise disadvantageous to it. Any Lender claiming compensation under this
Section 3.9 shall furnish to the Borrower and the Administrative Agent a
statement setting forth the additional amount or amounts to be paid to it
hereunder which shall be prima facie evidence of such amount or amounts. In
determining such amount, such Lender may use any reasonable averaging and
attribution methods.
3.10 TREATMENT OF AFFECTED LOANS.
If the obligation of any Lender to make any Eurodollar Loan or to
continue, or to convert Base Rate Loans into, Eurodollar Loans shall be
suspended pursuant to Section 3.7, 3.8 or 3.9 hereof, such Lender's Eurodollar
Loans shall be automatically converted into Base Rate Loans on the last day(s)
of the then current Interest Period(s) for such Eurodollar Loans (or, in the
case of a conversion, on such earlier date as such Lender may specify to the
Borrower with a copy to the Administrative Agent) and, unless and until such
Lender gives notice as provided below that the circumstances specified in
Section 3.7, 3.8 or 3.9 hereof that gave rise to such conversion no longer
exist:
(a) to the extent that such Lender's Eurodollar Loans have been
so converted, all payments and prepayments of principal that would
otherwise be applied to such Lender's Eurodollar Loans shall be applied
instead to its Base Rate Loans; and
(b) all Loans that would otherwise be made or continued by such
Lender as Eurodollar Loans shall be made or continued instead as Base
Rate Loans, and all Base Rate Loans of such Lender that would otherwise
be converted into Eurodollar Loans shall remain as Base Rate Loans.
If such Lender gives notice to the Borrower (with a copy to the Administrative
Agent) that the circumstances specified in Section 3.7, 3.8 or 3.9 hereof that
gave rise to the conversion of such Lender's Eurodollar Loans pursuant to this
Section 3.10 no longer exist (which such Lender agrees to do promptly upon such
circumstances ceasing to exist) at a time when Eurodollar Loans made by other
Lenders are outstanding, such Lender's Base Rate Loans shall be automatically
converted, on the first day(s) of the next succeeding Interest Period(s) for
such outstanding Eurodollar Loans, to the extent necessary so that, after giving
effect thereto, all Loans held by the Lenders holding Eurodollar Loans and by
such Lender are held pro rata (as to principal amounts, interest rate basis, and
Interest Periods) in accordance with their respective Commitments....
3.11 TAXES.
(a) Any and all payments by any Credit Party to or for the
account of any Lender or the Administrative Agent hereunder or under any
other Credit Document shall be
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made free and clear of and without deduction for any and all present or
future taxes, duties, levies, imposts, deductions, charges or
withholdings, and all liabilities with respect thereto, excluding, in
the case of each Lender and the Administrative Agent, taxes imposed on
its income, and franchise taxes imposed on it, by the jurisdiction under
the laws of which such Lender (or its Applicable Lending Office) or the
Administrative Agent (as the case may be) is organized or any political
subdivision thereof (all such non-excluded taxes, duties, levies,
imposts, deductions, charges, withholdings, and liabilities being
hereinafter referred to as "Taxes"). If any Credit Party shall be
required by law to deduct any Taxes from or in respect of any sum
payable under this Credit Agreement or any other Credit Document to any
Lender or the Administrative Agent, (i) the sum payable shall be
increased as necessary so that after making all required deductions
(including deductions applicable to additional sums payable under this
Section 3.11) such Lender or the Administrative Agent receives an amount
equal to the sum it would have received had no such deductions been
made, (ii) such Credit Party shall make such deductions, (iii) such
Credit Party shall pay the full amount deducted to the relevant taxation
authority or other authority in accordance with applicable law, and (iv)
such Credit Party shall furnish to the Administrative Agent, at its
address referred to in Section 11.1, the original or a certified copy of
a receipt evidencing payment thereof.
(b) In addition, the Borrower agrees to pay any and all present
or future stamp or documentary taxes and any other excise or property
taxes or charges or similar levies which arise from any payment made
under this Credit Agreement or any other Credit Document or from the
execution or delivery of, or otherwise with respect to, this Credit
Agreement or any other Credit Document (hereinafter referred to as
"Other Taxes").
(c) The Borrower agrees to indemnify each Lender and the
Administrative Agent for the full amount of Taxes and Other Taxes
(including, without limitation, any Taxes or Other Taxes imposed or
asserted by any jurisdiction on amounts payable under this Section 3.11)
paid by such Lender or the Administrative Agent (as the case may be) and
any liability (including penalties, interest, and expenses) arising
therefrom or with respect thereto.
(d) Each Lender that is not a United States Person under Section
7701(a)(30) of the Code, on or prior to the date of its execution and
delivery of this Credit Agreement in the case of each Lender listed on
the signature pages hereof and on or prior to the date on which it
becomes a Lender in the case of each other Lender, and from time to time
thereafter if requested in writing by the Borrower or the Administrative
Agent (but only so long as such Lender remains lawfully able to do so),
shall provide the Borrower and the Administrative Agent with (i)
Internal Revenue Service Form 1001 or 4224, as appropriate, or any
successor form prescribed by the Internal Revenue Service, certifying
that such Lender is entitled to benefits under an income tax treaty to
which the United States is a party which reduces the rate of withholding
tax on payments of interest or certifying that the income receivable
pursuant to this Credit Agreement is effectively connected with the
conduct of a trade or business in the United States, (ii) Internal
Revenue Service Form W-8 or W-9, as appropriate, or any successor form
prescribed by the Internal Revenue Service, and/or (iii) any other form
or certificate required by any taxing authority (including any
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certificate required by Sections 871(h) and 881(c) of the Internal
Revenue Code), certifying that such Lender is entitled to an exemption
from or a reduced rate of tax on payments pursuant to this Credit
Agreement or any of the other Credit Documents.
(e) For any period with respect to which a Lender has failed to
provide the Borrower and the Administrative Agent with the appropriate
form pursuant to Section 3.11(d) (unless such failure is due to a change
in treaty, law, or regulation occurring subsequent to the date on which
a form originally was required to be provided), such Lender shall not be
entitled to indemnification under Section 3.11(a) or 3.11(b) with
respect to Taxes imposed by the United States; provided, however, that
should a Lender, which is otherwise exempt from or subject to a reduced
rate of withholding tax, become subject to Taxes because of its failure
to deliver a form required hereunder, the Borrower shall take such steps
as such Lender shall reasonably request to assist such Lender to recover
such Taxes.
(f) If any Credit Party is required to pay additional amounts to
or for the account of any Lender pursuant to this Section 3.11 or
Section 7.11 of the Guaranty Agreement, then such Lender will agree to
use reasonable efforts to change the jurisdiction of its Applicable
Lending Office so as to eliminate or reduce any such additional payment
which may thereafter accrue if such change, in the reasonable judgment
of such Lender, is not otherwise disadvantageous to such Lender.
(g) Within thirty (30) days after the date of any payment of
Taxes, the applicable Credit Party shall furnish to the Administrative
Agent the original or a certified copy of a receipt evidencing such
payment.
(h) Without prejudice to the survival of any other agreement of
the Credit Parties hereunder, the agreements and obligations of the
Credit Parties contained in this Section 3.11 shall survive the
repayment of the Loans and other obligations under the Credit Documents
and the termination of the Commitments hereunder.
3.12 COMPENSATION.
Upon the request of any Lender, the Borrower shall pay to such Lender
such amount or amounts as shall be sufficient (in the reasonable opinion of such
Lender) to compensate it for any loss, cost, or expense incurred by it as a
result of:
(a) any payment, prepayment (other than a prepayment to the
Administrative Agent which is caused by the wrongful failure of a Lender
to fund a Eurodollar Loan), or conversion of a Eurodollar Loan for any
reason (including, without limitation, the acceleration of the Loans
pursuant to Section 8.2) on a date other than the last day of the
Interest Period for such Loan; or
(b) any failure by the Borrower for any reason (including,
without limitation, the failure of any condition precedent specified in
Section 4 and Schedule 4.3 to be satisfied) to borrow, convert,
continue, or prepay a Eurodollar Loan on the date for such borrowing,
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conversion, continuation, or prepayment specified in the relevant notice
of borrowing, prepayment, continuation, or conversion under this Credit
Agreement; or
(c) any Eurodollar Loan for any reason not being made (other
than a wrongful failure to fund by such Lender).
With respect to Eurodollar Loans, such indemnification may include an amount
equal to the excess, if any, of (a) the amount of interest which would have
accrued on the amount so prepaid, or not so borrowed, converted or continued,
for the period from the date of such prepayment or of such failure to borrow,
convert or continue to the last day of the applicable Interest Period (or, in
the case of a failure to borrow, convert or continue, the Interest Period that
would have commenced on the date of such failure) in each case at the applicable
rate of interest for such Eurodollar Loans provided for herein (excluding,
however, the Applicable Percentage included therein, if any) over (b) the amount
of interest (as reasonably determined by such Lender) which would have accrued
to such Lender on such amount by placing such amount on deposit for a comparable
period with leading banks in the interbank Eurodollar market. The covenants of
the Borrower set forth in this Section 3.12 shall survive the repayment of the
Loans and other obligations under the Credit Documents and the termination of
the Commitments hereunder. Notwithstanding the foregoing, the Borrower shall not
be responsible to any Lender for any costs hereunder that result from the
application of Section 3.8.
3.13 PRO RATA TREATMENT.
Except to the extent otherwise provided herein:
(a) Loans. Each Loan, each payment or (subject to the terms of
Section 3.3) prepayment of principal of any Loan, each payment of
interest on the Loans, each payment of Unused Fees, each reduction of
the Revolving Committed Amount and each conversion or extension of any
Loan, shall be allocated pro rata among the Lenders in accordance with
the respective principal amounts of their outstanding Loans and
Participation Interests.
(b) Advances. No Lender shall be responsible for the failure or
delay by any other Lender in its obligation to make its ratable share of
a borrowing hereunder; provided, however, that the failure of any Lender
to fulfill its obligations hereunder shall not relieve any other Lender
of its obligations hereunder. Unless the Administrative Agent shall have
been notified by any Lender prior to the date of any requested borrowing
that such Lender does not intend to make available to the Administrative
Agent its ratable share of such borrowing to be made on such date, the
Administrative Agent may assume that such Lender has made such amount
available to the Administrative Agent on the date of such borrowing, and
the Administrative Agent in reliance upon such assumption, may (in its
sole discretion but without any obligation to do so) make available to
the Borrower a corresponding amount. If such corresponding amount is not
in fact made available to the Administrative Agent, the Administrative
Agent shall be able to recover such corresponding amount from such
Lender. If such Lender does not pay such corresponding amount forthwith
upon the Administrative Agent's demand therefor, the Administrative
Agent will promptly notify the Borrower, and the Borrower shall
immediately pay such corresponding amount to the
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Administrative Agent; provided, however, the Borrower shall maintain any
claims against such Lender provided hereunder or under applicable law
due to the failure of such Lender to pay such corresponding amount. The
Administrative Agent shall also be entitled to recover from the Lender
or the Borrower, as the case may be, interest on such corresponding
amount in respect of each day from the date such corresponding amount
was made available by the Administrative Agent to the Borrower to the
date such corresponding amount is recovered by the Administrative Agent
at a per annum rate equal to (i) from the Borrower at the applicable
rate for the applicable borrowing pursuant to the Notice of Borrowing
and (ii) from a Lender at the Federal Funds Rate.
3.14 SHARING OF PAYMENTS.
The Lenders agree among themselves that, in the event that any Lender
shall obtain payment in respect of any Loan or any other obligation owing to
such Lender under this Credit Agreement through the exercise of a right of
setoff, banker's lien or counterclaim, or pursuant to a secured claim under
Section 506 of Title 11 of the United States Code or other security or interest
arising from, or in lieu of, such secured claim, received by such Lender under
any applicable bankruptcy, insolvency or other similar law or otherwise, or by
any other means, in excess of its pro rata share of such payment as provided for
in this Credit Agreement, such Lender shall promptly purchase from the other
Lenders a Participation Interest in such Loans and other obligations in such
amounts, and make such other adjustments from time to time, as shall be
equitable to the end that all Lenders share such payment in accordance with
their respective ratable shares as provided for in this Credit Agreement. The
Lenders further agree among themselves that if payment to a Lender obtained by
such Lender through the exercise of a right of setoff, banker's lien,
counterclaim or other event as aforesaid shall be rescinded or must otherwise be
restored, each Lender which shall have shared the benefit of such payment shall,
by repurchase of a Participation Interest theretofore sold, return its share of
that benefit (together with its share of any accrued interest payable with
respect thereto) to each Lender whose payment shall have been rescinded or
otherwise restored. The Borrower agrees that any Lender so purchasing such a
Participation Interest may, to the fullest extent permitted by law, exercise all
rights of payment, including setoff, banker's lien or counterclaim, with respect
to such Participation Interest as fully as if such Lender were a holder of such
Loan or other obligation in the amount of such Participation Interest. Except as
otherwise expressly provided in this Credit Agreement, if any Lender or the
Administrative Agent shall fail to remit to the Administrative Agent or any
other Lender an amount payable by such Lender or the Administrative Agent to the
Administrative Agent or such other Lender pursuant to this Credit Agreement on
the date when such amount is due, such payments shall be made together with
interest thereon for each date from the date such amount is due until the date
such amount is paid to the Administrative Agent or such other Lender at a rate
per annum equal to the Federal Funds Rate. If under any applicable bankruptcy,
insolvency or other similar law, any Lender receives a secured claim in lieu of
a setoff to which this Section 3.14 applies, such Lender shall, to the extent
practicable, exercise its rights in respect of such secured claim in a manner
consistent with the rights of the Lenders under this Section 3.14 to share in
the benefits of any recovery on such secured claim.
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3.15 PAYMENTS, COMPUTATIONS, ETC.
(a) Generally. Except as otherwise specifically provided herein,
all payments hereunder shall be made to the Administrative Agent in
Dollars in immediately available funds, without setoff, deduction,
counterclaim or withholding of any kind, at the Administrative Agent's
office specified in Schedule 2.1(a) not later than 9:00 A.M. (San
Francisco, California time) on the date when due. Payments received
after such time shall be deemed to have been received on the next
succeeding Business Day. The Administrative Agent may (but shall not be
obligated to) debit the amount of any such payment which is not made by
such time to any ordinary deposit account of the Borrower maintained
with the Administrative Agent (with notice to the Borrower). The
Borrower shall, at the time it makes any payment under this Credit
Agreement, specify to the Administrative Agent the Loans, Fees, interest
or other amounts payable by the Borrower hereunder to which such payment
is to be applied (and in the event that it fails so to specify, or if
such application would be inconsistent with the terms hereof, the
Administrative Agent shall distribute such payment to the Lenders in
such manner as the Administrative Agent may determine to be appropriate
in respect of obligations owing by the Borrower hereunder, subject to
the terms of Section 3.13(a)). The Administrative Agent will distribute
such payments to such Lenders, if any such payment is received prior to
9:00 A.M. (San Francisco, California time) on a Business Day in like
funds as received prior to the end of such Business Day and otherwise
the Administrative Agent will distribute such payment to such Lenders on
the next succeeding Business Day. Whenever any payment hereunder shall
be stated to be due on a day which is not a Business Day, the due date
thereof shall be extended to the next succeeding Business Day (subject
to accrual of interest and Fees for the period of such extension),
except that in the case of Eurodollar Loans, if the extension would
cause the payment to be made in the next following calendar month, then
such payment shall instead be made on the next preceding Business Day.
Unless the Administrative Agent receives notice from the Borrower prior
to the date on which any payment is due to the Lenders that the Borrower
will not make such payment in full as and when required, the
Administrative Agent may assume that the Borrower has made such payment
in full to the Administrative Agent on such date in immediately
available funds and the Administrative Agent may (but shall not be so
required), in reliance upon such assumption, distribute to each Lender
on such date an amount equal to the amount then due such Lender. If and
to the extent the Borrower has not made such payment in full to the
Administrative Agent, each Lender shall repay to the Administrative
Agent on demand such amount distributed to such Lender, together with
interest thereon at the Federal Funds Rate for each day from the date
such amount is distributed to such Lender until the date repaid. Except
as expressly provided otherwise herein, all computations of interest and
fees shall be made on the basis of actual number of days elapsed over a
year of 360 days, except with respect to computation of interest on Base
Rate Loans which shall be calculated based on a year of 365 or 366 days,
as appropriate. Interest shall accrue from and include the date of
borrowing, but exclude the date of payment.
(b) Allocation of Payments After Event of Default.
Notwithstanding any other provisions of this Credit Agreement to the
contrary, after the occurrence and during the continuance of an Event of
Default, all amounts collected or received by the Administrative
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Agent or any Lender on account of the Credit Party Obligations or any
other amounts outstanding under any of the Credit Documents or in
respect of the Collateral shall be paid over or delivered as follows:
FIRST, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing the rights of the
Lenders under the Credit Documents which have accrued as of the date of
payment and any protective advances made by the Administrative Agent
with respect to the Collateral under or pursuant to the terms of the
Collateral Documents;
SECOND, to payment of any fees owed to the Administrative Agent
which have accrued as of the date of payment;
THIRD, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
the Administrative Agent in connection with enforcing its rights under
the Credit Documents or otherwise with respect to the Credit Party
Obligations which have accrued as of the date of payment;
FOURTH, to the payment of all of the Credit Party Obligations
consisting of accrued fees and interest;
FIFTH, to the payment of the outstanding principal amount of the
Credit Party Obligations;
SIXTH, to the payment of all reasonable out-of-pocket costs and
expenses (including without limitation, reasonable attorneys' fees) of
each of the Lenders in connection with enforcing its rights under the
Credit Documents or otherwise with respect to the Credit Party
Obligations owing to such Lender which have accrued as of the date of
payment;
SEVENTH, to all other Credit Party Obligations and other
obligations which shall have become due and payable under the Credit
Documents or otherwise and not repaid pursuant to clauses "FIRST"
through "SIXTH" above; and
EIGHTH, to the payment of the surplus, if any, to whoever may be
lawfully entitled to receive such surplus.
In carrying out the foregoing, (i) amounts received shall be applied in
the numerical order provided until exhausted prior to application to the
next succeeding category and (ii) each of the Lenders shall receive an
amount equal to its pro rata share (based on the proportion that the
then outstanding Loans held by such Lender bears to the aggregate then
outstanding Loans) of amounts available to be applied pursuant to
clauses "FOURTH", "FIFTH", "SIXTH" and "SEVENTH" above.
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3.16 EVIDENCE OF DEBT.
(a) Each Lender shall maintain an account or accounts evidencing
each Loan made by such Lender to the Borrower from time to time,
including the amounts of principal and interest payable and paid to such
Lender from time to time under this Credit Agreement. Each Lender will
make reasonable efforts to maintain the accuracy of its account or
accounts and to promptly update its account or accounts from time to
time, as necessary.
(b) The Administrative Agent shall maintain the Register
pursuant to Section 11.3(c), and a subaccount for each Lender, in which
Register and subaccounts (taken together) shall be recorded (i) the
amount, type and Interest Period of each such Loan hereunder, (ii) the
amount of any principal or interest due and payable or to become due and
payable to each Lender hereunder and (iii) the amount of any sum
received by the Administrative Agent hereunder from or for the account
of any Credit Party and each Lender's share thereof. The Administrative
Agent will make reasonable efforts to maintain the accuracy of the
subaccounts referred to in the preceding sentence and to promptly update
such subaccounts from time to time, as necessary.
(c) The entries made in the accounts, Register and subaccounts
maintained pursuant to subsection (b) of this Section 3.16 (and, if
consistent with the entries of the Administrative Agent, subsection (a))
shall be prima facie evidence of the existence and amounts of the
obligations of the Credit Parties therein recorded; provided, however,
that the failure of any Lender or the Administrative Agent to maintain
any such account, such Register or such subaccount, as applicable, or
any error therein, shall not in any manner affect the obligation of the
Credit Parties to repay the Credit Party Obligations owing to such
Lender.
SECTION 4
CONDITIONS
4.1 CLOSING CONDITIONS.
The obligation of the Lenders to enter into this Credit Agreement shall
be subject to satisfaction of the following conditions:
(a) Executed Credit Documents. Receipt by the Administrative
Agent of duly executed copies of: (i) this Credit Agreement, (ii) the
Guaranty Agreement, (iii) the Notes, (iv) the Environmental Indemnity
Agreement, (v) the Collateral Documents and (vi) all other Credit
Documents, each in form and substance acceptable to the Lenders.
(b) Corporate Documents. Receipt by the Administrative Agent of
the following:
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(i) Charter Documents. Copies of the articles or
certificates of incorporation or other charter documents of the
Credit Parties certified to be true and complete as of a recent
date by the appropriate Governmental Authority of the state or
other jurisdiction of its incorporation or organization and
certified by a secretary, assistant secretary or general partner
of such Credit Party, to be true and correct as of the Closing
Date.
(ii) Bylaws. A copy of the partnership agreement or
bylaws of the Credit Parties certified by a secretary, assistant
secretary or general partner of such Credit Party to be true and
correct as of the Closing Date.
(iii) Resolutions. Copies of resolutions of the Credit
Parties approving and adopting the Credit Documents to which it
is a party, the transactions contemplated therein and
authorizing execution and delivery thereof, certified by a
secretary, assistant secretary or general partner of such Credit
Party to be true and correct and in force and effect as of the
Closing Date.
(iv) Good Standing. Copies of certificates of good
standing, existence or its equivalent with respect to the Credit
Parties certified as of a recent date by the appropriate
Governmental Authorities of the state or other jurisdiction of
organization or incorporation.
(v) Incumbency. An incumbency certificate of the Credit
Parties certified by a secretary, assistant secretary or general
partner of such Credit Party, to be true and correct as of the
Closing Date.
(c) Opinions of Counsel. The Administrative Agent shall have
received an opinion, or opinions, in form and substance satisfactory to
the Administrative Agent dated as of the Closing Date from counsel to
the Credit Parties.
(d) Personal Property Collateral. The Administrative Agent shall
have received (in form and substance satisfactory to the Administrative
Agent):
(i) searches of Uniform Commercial Code filings in the
jurisdiction of the chief executive office of the Borrower and
each jurisdiction where any Collateral is located or where a
filing would need to be made in order to perfect the
Administrative Agent's security interest, for the benefit of the
Lenders in the Collateral, copies of the financing statements on
file in such jurisdictions and evidence that no Liens exist with
respect to the Collateral other than (A) Permitted Liens and (B)
the Guarantor's Lien against the Collateral (which Lien will be
terminated on or before the Funding Date);
(ii) duly executed UCC financing statements for each
appropriate jurisdiction as is necessary, in the Administrative
Agent's sole discretion, to perfect the Administrative Agent's
security interest, for the benefit of the Lenders, in the
Collateral which may be perfected under the UCC;
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(iii) duly executed consents as are necessary, in the
Administrative Agent's sole discretion, to perfect the
Administrative Agent's security interest, for the benefit of the
Lenders, in the Collateral.
(e) Real Property Collateral. The Administrative Agent shall
have received, in form and substance reasonably satisfactory to the
Administrative Agent:
(i) a fully executed and notarized deed of trust and
security agreement (as the same may be amended, modified,
restated or supplemented from time to time, the "Mortgage
Instrument") encumbering the Land and the Improvements, the
leasehold interest of the Borrower in the Tipp Property, the
personal property and fixtures more particularly described
therein and the transferable development rights and low income
housing credits or other such credits described therein;
(ii) a survey of the Land and the Tipp Property
certified to the Administrative Agent, the Borrower and the
Title Insurance Company in a manner reasonably satisfactory to
each of the Administrative Agent and the Title Insurance
Company, dated a date reasonably satisfactory to each of the
Administrative Agent and the Title Insurance Company by an
independent professional licensed land surveyor, which survey
shall show all boundaries of the Land and the Tipp Property with
courses and distances indicated and be sufficient to delete any
standard printed survey exception contained in the applicable
title policy and be made in accordance with the Minimum Standard
Detail Requirements for Land Title Surveys jointly established
and adopted by the American Land Title Association and the
American Congress on Surveying and Mapping in 1992, and, without
limiting the generality of the foregoing, there shall be
surveyed and shown on such survey the following: (A) the
locations on such sites of all the buildings, structures and
other improvements and the established building setback lines;
(B) the lines of streets abutting the sites and width thereof;
(C) all access and other easements appurtenant to the sites
necessary to use the sites; (D) all roadways, paths, driveways,
easements, encroachments and overhanging projections and similar
encumbrances affecting the site, whether recorded, apparent from
a physical inspection of the sites or otherwise known to the
surveyor; and (E) any encroachments on any adjoining property by
the building structures and improvements on the sites;
(iii) evidence as to (A) whether the Land and the Tipp
Property are in an area designated by the Federal Emergency
Management Agency as having special flood or mud slide hazards
(a "Flood Hazard Property") and (B) if the Land and the Tipp
Property are a Flood Hazard Property, (1) whether the community
in which the Land and the Tipp Property are located is
participating in the National Flood Insurance Program, (2) the
Borrower's written acknowledgment of receipt of written
notification from the Administrative Agent (a) as to the fact
that the Land and the Tipp Property are a Flood Hazard Property
and (b) as to whether the community in which the Flood Hazard
Property is
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located is participating in the National Flood Insurance Program
and (3) copies of insurance policy or certificate of insurance
of the Borrower evidencing flood insurance satisfactory to the
Administrative Agent and naming the Administrative Agent as sole
loss payee on behalf of the Lenders;
(iv) evidence satisfactory to the Administrative Agent
that the Project, and the uses of the Project, are in compliance
in all material respects with all applicable laws, regulations
and ordinances including without limitation health and
environmental protection laws, erosion control ordinances, storm
drainage control laws, doing business and/or licensing laws,
zoning laws (the evidence submitted as to zoning should include
the zoning designation made for the Project, the permitted uses
of the Project under such zoning designation and zoning
requirements as to parking, lot size, ingress, egress and
building setbacks) and laws regarding access and facilities for
disabled persons including, but not limited to, the federal
Architectural Barriers Act, the Fair Housing Amendments Act of
1988, the Rehabilitation Act of 1973 and the Americans With
Disabilities Act of 1990;
(v) an appraisal (in form and substance satisfactory to
the Administrative Agent and the Project Administrative Agent)
with respect to the Project from a qualified appraiser
satisfactory to the Administrative Agent and Project
Administrative Agent; and
(vi) with respect to the Tipp Property, (A) consent from
the landlord of the Tipp Property (which consent shall be in
form and substance satisfactory to the Administrative Agent) to
the execution and recordation of the Mortgage Instrument and (B)
evidence that a memorandum of lease with respect to the Tipp
Property has been recorded to the extent necessary in the
judgment of the Administrative Agent so as to enable the
Mortgage Instrument to effectively create a valid and
enforceable lien (subject only to Permitted Liens) on the
leasehold interest of the Borrower in the Tipp Property.
(f) Environmental Reports. The Administrative Agent shall have
received, in form and substance satisfactory to the Administrative
Agent, an environmental site assessment report with respect to the Land.
(g) Plans. Receipt by the Administrative Agent and the Project
Administrative Agent and the Consultant of the following (in form and
substance satisfactory to the Administrative Agent, the Project
Administrative Agent and the Consultant): (i) a set of the plans and
specifications for the construction of the Improvements (the "Plans and
Specifications"), (ii) a soil report made at the Land, such report to
include the recommendations of the soil testing firm as to the
preparation of the soil needed in order to adequately support the
Project, (iii) a construction budget for the Improvements and (iv) the
guaranteed maximum fixed price construction contract for the Project
with a general contractor satisfactory to the Administrative Agent and
the Project Administrative Agent.
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(h) Certified Copies. The Administrative Agent shall have
received a copy of (i) the Development Agreement, (ii) the Ground Lease
Agreement, (iii) the Nordstrom Lease Agreement and (iv) the Joint
Development Agreement, each such contract in form and substance
satisfactory to the Administrative Agent and the Project Administrative
Agent and certified as a true and correct copy by the Borrower.
(i) Consent of General Contractor. The Administrative Agent
shall have received the consent of general contractor (in form and
substance satisfactory to the Administrative Agent) to the Borrower's
assignment to the Administrative Agent, for the benefit of the Lenders,
of the Borrower's interests in the construction contract for the
Improvements. In addition, the Administrative Agent shall have received
the consent of the design architect (in form and substance satisfactory
to the Administrative Agent) to the Borrower's assignment to the
Administrative Agent, for the benefit of the Lenders, of the Borrower's
interests in the plans and specifications for the construction of the
Improvements.
(j) Evidence of Insurance. Receipt by the Administrative Agent
of copies of insurance policies or certificates of insurance of the
Borrower evidencing liability, casualty and builder's risk insurance
issued by companies satisfactory to the Lenders in their sole discretion
and otherwise meeting the requirements set forth in the Credit
Documents, including, but not limited to, naming the Administrative
Agent as additional insured (in the case of liability insurance) and
sole loss payee (in the case of hazard insurance and builder's risk
insurance) on behalf of the Lenders.
(k) Compliance with Laws. Receipt by the Project Administrative
Agent of evidence that the Land, and the intended uses of the Land are
in compliance with all applicable laws, regulations and ordinances. Such
evidence may include letters, licenses, permits, certificates and other
correspondence from the appropriate Governmental Authorities and such
other evidence reasonably requested by the Project Administrative Agent.
(l) Equity Investment. Receipt by the Administrative Agent of
evidence that (i) a cash equity investment of at least $2,800,000 shall
have been made by the Guarantor in the Borrower on terms that are
satisfactory to the Administrative Agent and (ii) an equity investment
by Seventh and Xxxxxxx shall have been made in the Borrower through the
contribution of real estate (satisfactory to the Project Administrative
Agent) valued at $12,500,000.
(m) Material Adverse Effect. No material adverse change shall
have occurred since January 31, 1999 in the business, assets,
liabilities (actual or contingent), operations, condition (financial or
otherwise), business, management or prospects of (i) the Borrower or
(ii) the Guarantor.
(n) Litigation. There shall not exist any pending or threatened
action, suit, investigation or proceeding against the Borrower that
could have a Material Adverse Effect. Except as disclosed on Schedule
3.5 to the Guaranty Agreement, there shall not exist any
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pending or threatened action, suit, investigation or proceeding against
the Guarantor or any of its Subsidiaries that could have a Material
Adverse Effect.
(o) Officer's Certificates.
(i) The Administrative Agent shall have received a
certificate executed by an Executive Officer of Xxxxx Properties
as of the Closing Date, in form and substance satisfactory to
the Administrative Agent, stating that (A) the Borrower is in
material compliance with all existing financial obligations, (B)
all governmental, shareholder and third party consents and
approvals, if any, with respect to the Credit Documents and the
transactions contemplated thereby have been obtained, (C) no
action, suit, investigation or proceeding is pending or
threatened in any court or before any arbitrator or governmental
instrumentality that purports to affect the Borrower or any
transaction contemplated by the Credit Documents, if such
action, suit, investigation or proceeding could have a Material
Adverse Effect, (D) no Default or Event of Default exists, and
(E) all representations and warranties of the Borrower contained
herein and in the other Credit Documents are true and correct in
all material respects.
(ii) The Administrative Agent shall have received a
certificate executed by an Executive Officer of the Guarantor as
of the Closing Date, in form and substance satisfactory to the
Administrative Agent, stating that (A) the Guarantor is in
material compliance with all existing financial obligations, (B)
immediately after giving effect to this Credit Agreement, the
Credit Documents and all transactions contemplated therein, the
Guarantor is Solvent and (C) the Guarantor is in compliance with
each of the financial covenants set forth in the Guaranty
Agreement.
(p) Fees and Expenses. Payment by the Borrower of all fees and
expenses owed by it to the Lenders, the Administrative Agent and the
Project Administrative Agent with respect to the Loans and the Credit
Documents, including, without limitation, payment to the Administrative
Agent of the fees set forth in the Administrative Agent's Fee Letter.
(q) Other. Receipt by the Lenders of such other documents,
instruments, agreements or information as reasonably requested by the
Administrative Agent on behalf of any Lender, including, but not limited
to, information regarding litigation, tax, accounting, labor, insurance,
pension liabilities (actual or contingent), real estate leases, material
contracts, debt agreements, property ownership and contingent
liabilities of the Borrower and the Guarantor.
4.2 CONDITIONS TO INITIAL EXTENSION OF CREDIT.
The obligations of each Lender to make the initial Loans are subject to
(i) satisfaction of the following conditions in addition to satisfaction on the
Closing Date of the conditions set forth in Section 4.1 and (ii) satisfaction of
the conditions set forth in Section 4.3:
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(a) Permits. The Project Administrative Agent shall have
received evidence (in form and substance satisfactory to the Project
Administrative Agent) that the Borrower has received all permits deemed
reasonably necessary (including without limitation, the Master Use
Permit Project No. 9606528 and foundation permit) by the Project
Administrative Agent for the applicable stage of construction; and
(b) Transferable Development Rights. Receipt by Project
Administrative Agent on or before March 14, 2000 of certified copies of
the fully executed Transferable Rights Development Agreements, each with
terms and conditions acceptable to the Project Administrative Agent
(including without limitation, approval of the City of the purchase
price set forth therein), pursuant to which the Borrower will acquire
the transferable development rights necessary for the Borrower to
construct the Project; and
(c) Low Income Housing Bonus Credits. Receipt by the Project
Administrative Agent on or before March 14, 2000 of (i) a certified copy
of the fully executed Letter of Credit Agreement with terms and
conditions acceptable to the Project Administrative Agent and (ii)
evidence that the Housing Credits Letter of Credit (in substantially the
form of Exhibit C to the Letter of Credit Agreement) has been delivered
to the City;
(d) Title. The Administrative Agent shall have received on or
before March 14, 2000 in form and substance satisfactory to the
Administrative Agent, an ALTA mortgagee title insurance policy (the
"Mortgage Policy") issued by a title insurer satisfactory to the
Administrative Agent (the "Title Insurance Company"), in an amount
satisfactory to the Administrative Agent, assuring the Administrative
Agent that the Mortgage Instrument creates a valid and enforceable first
priority mortgage lien on the Real Properties and the transferable
development rights described therein, free and clear of all defects and
encumbrances except Permitted Liens, which Mortgage Policy shall be in
form and substance reasonably satisfactory to the Administrative Agent
and shall provide for affirmative insurance and such reinsurance as the
Administrative Agent may reasonably request; and
(e) Refinancing. Receipt by the Administrative Agent on or
before March 14, 2000 of evidence (satisfactory in form and substance to
the Administrative Agent) that the Nordstrom Loan has been paid in full
or will be so repaid from the proceeds of such Loans.
4.3 CONDITIONS TO ALL EXTENSIONS OF CREDIT.
The obligations of each Lender to make, convert or extend any Loan
(including the initial Loans) are subject to (i) satisfaction of the following
conditions in addition to satisfaction on the Closing Date of the conditions set
forth in Section 4.1 and (ii) satisfaction of the conditions set forth in
Section 4.2:
(a) The Borrower shall have delivered an appropriate Notice of
Borrowing or Notice of Extension/Conversion (each such Notice of
Borrowing to include an update to the budget for the Improvements and a
representation that the remaining availability under the
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Revolving Committed Amount is sufficient to finance the completion of
the construction of the Improvements);
(b) The representations and warranties made by the Credit
Parties herein or in any other Credit Documents or which are contained
in any certificate furnished at any time under or in connection herewith
shall, subject to the limitations set forth therein, be true and correct
in all material respects as of such date (except for those which
expressly relate to an earlier date);
(c) There shall not have been commenced against any Credit Party
an involuntary case under any applicable bankruptcy, insolvency or other
similar law now or hereafter in effect, or any case, proceeding or other
action for the appointment of a receiver, liquidator, assignee,
custodian, trustee, sequestrator (or similar official) of such Person or
for any substantial part of its Property or for the winding up or
liquidation of its affairs, and such involuntary case or other case,
proceeding or other action shall remain undismissed, undischarged or
unbonded;
(d) No Default or Event of Default shall exist and be continuing
either prior to or after giving effect thereto;
(e) No development or event which has had or could have a
Material Adverse Effect shall have occurred since January 31, 1999;
(f) All of the conditions set forth in Schedule 4.3 shall have
been satisfied in a manner acceptable to the Administrative Agent and
the Project Administrative Agent;
(g) No action, suit or proceeding against the Guarantor or any
of its Subsidiaries has resulted in or caused a Material Adverse Effect.
(h) Immediately after giving effect to the making of such Loan
(and the application of the proceeds thereof), the sum of the aggregate
outstanding principal amount of Revolving Loans shall not exceed the
Revolving Committed Amount.
The delivery of each Notice of Borrowing and each Notice of Extension/Conversion
shall constitute a representation and warranty by the Credit Parties of the
correctness of the matters specified in subsections (b), (c), (d), (e), (g) and
(h) above.
Furthermore, the Lenders shall not be obligated to make any Loans subsequent to
the Funding Date until such time as the Title Insurance Company shall have
agreed to issue to the Administrative Agent an endorsement (in form and
substance satisfactory to the Administrative Agent) to the Mortgage Policy or
have otherwise agreed to insure that since the last Loan, there has been no
change in the state of title to the Land and the Improvements and the Tipp
Property (superior or subordinate to the interest of the Administrative Agent,
for the benefit of the Lenders, under the Mortgage Instrument) and there are no
liens (other than Permitted Liens) or other interests which have been permitted
to attach to the Land, the Improvements and/or the Tipp Property.
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SECTION 5
REPRESENTATIONS AND WARRANTIES
The Borrower hereby represents to the Administrative Agent and each
Lender that:
5.1 FINANCIAL CONDITION.
The financial statements delivered to the Administrative Agent pursuant
to Section 6.1(a) and (b) have been prepared in accordance with GAAP and present
fairly in all material respects (on the basis disclosed in the footnotes to such
financial statements) the financial condition, results of operations and cash
flows of the applicable parties as of such date and for such periods. As of the
Closing Date and the Funding Date (as applicable), the Borrower has no material
liabilities (contingent or otherwise) that are not reflected in the financial
statements or in the notes thereto provided to the Administrative Agent on or
prior to the Closing Date or Funding Date (as applicable) (other than the
Nordstrom Loan which will be outstanding as of the Closing Date).
5.2 NO MATERIAL CHANGE.
Since January 31, 1999, (a) there has been no development or event
relating to or affecting the Borrower which has had or could have a Material
Adverse Effect and (b) except as otherwise permitted under this Credit
Agreement, no dividends or other distributions have been declared, paid or made
upon the Capital Stock in the Borrower, nor has any of the Capital Stock in the
Borrower been redeemed, retired, purchased or otherwise acquired for value.
5.3 ORGANIZATION AND GOOD STANDING.
The Borrower (a) is duly organized, validly existing and is in good
standing under the laws of the State of Washington and (b) has the power and
authority, and the legal right, to own and operate its property, to lease the
property it operates as lessee and to conduct the business in which it is
currently engaged.
5.4 POWER; AUTHORIZATION; ENFORCEABLE OBLIGATIONS.
The Borrower has the power and authority, and the legal right, to make,
deliver and perform the Credit Documents to which it is a party, and to obtain
extensions of credit hereunder, and has taken all necessary action to authorize
the borrowings and other extensions of credit on the terms and conditions of
this Credit Agreement and to authorize the execution, delivery and performance
of the Credit Documents to which it is a party. No consent or authorization of,
filing with, notice to or other similar act by or in respect of, any
Governmental Authority or any other Person is required to be obtained or made by
or on behalf of the Borrower in connection with the borrowings or other
extensions of credit hereunder or with the execution, delivery, performance,
validity or enforceability of the Credit Documents to which the Borrower is a
party. This Credit Agreement has been, and each other Credit Document to which
the Borrower is a party will be, duly executed and delivered on behalf of the
Borrower. This Credit Agreement constitutes, and each other Credit Document to
which the Borrower is a party when executed and delivered will constitute, a
legal, valid and binding obligation of the Borrower enforceable against the
Borrower in accordance with
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its terms, except as enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium or similar laws affecting the enforcement
of creditors' rights generally and by general equitable principles (whether
enforcement is sought by proceedings in equity or at law).
5.5 NO CONFLICTS.
Neither the execution and delivery of the Credit Documents, nor the
consummation of the transactions contemplated therein, nor performance of and
compliance with the terms and provisions thereof by the Borrower will (a)
violate or conflict with any provision of its partnership agreement or other
organizational or governing documents, (b) violate, contravene or materially
conflict with any Requirement of Law or any other law, regulation (including,
without limitation, Regulation U or Regulation X), order, writ, judgment,
injunction, decree or permit applicable to it, (c) violate, contravene or
conflict with contractual provisions of, or cause an event of default under, any
agreement or instrument to which it is a party or by which it may be bound, the
violation of which could have a Material Adverse Effect, or (d) result in or
require the creation of any Lien (other than those contemplated in or created in
connection with the Credit Documents) upon or with respect to its properties.
5.6 NO DEFAULT.
The Borrower is not in default in any respect under any contract, lease
or other agreement or obligation to which it is a party or by which any of its
properties is bound which default could have a Material Adverse Effect. No
Default or Event of Default has occurred or exists except as previously
disclosed in writing to the Lenders.
5.7 OWNERSHIP.
The Borrower is the owner of, and has good and marketable title to, all
of its respective assets and none of such assets is subject to any Lien other
than (i) the Permitted Liens and (ii) prior to the funding of the Loans
hereunder on the Funding Date, the Guarantor's Liens against the Collateral.
5.8 INDEBTEDNESS.
Except as otherwise permitted under Section 7.1, the Borrower has no
Indebtedness.
5.9 LITIGATION.
There are no actions, suits or legal, equitable, arbitration or
administrative proceedings, pending or, to the knowledge of any Executive
Officer of the Borrower, the general partner of the Borrower or of the managing
member of the general partner of the Borrower, threatened against the Borrower
which could be reasonably expected to have a Material Adverse Effect.
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5.10 TAXES.
The Borrower has filed, or caused to be filed, all tax returns (federal,
state, local and foreign) required to be filed and paid (a) all amounts of taxes
shown thereon to be due (including interest and penalties) and (b) all other
taxes, fees, assessments and other governmental charges (including mortgage
recording taxes, documentary stamp taxes and intangibles taxes) owing by it,
except for such taxes (i) which are not yet delinquent or (ii) that are being
contested in good faith and by proper proceedings, and against which adequate
reserves are being maintained in accordance with GAAP. The Borrower is not aware
as of the Closing Date and the Funding Date (as applicable) of any proposed tax
assessments against it.
5.11 COMPLIANCE WITH LAW.
The Borrower is in compliance with all Requirements of Law and all other
laws, rules, regulations, orders and decrees (including without limitation
Environmental Laws) applicable to it, or to its properties, unless such failure
to comply could not reasonably be expected to have a Material Adverse Effect.
5.12 ERISA.
(a) During the five-year period prior to the date on which this
representation is made or deemed made: (i) no ERISA Event has occurred,
and, to the best knowledge of the Executive Officers of the Borrower,
the general partner of the Borrower and the managing member of the
general partner of the Borrower, no event or condition has occurred or
exists as a result of which any ERISA Event could reasonably be expected
to occur, with respect to any Plan; (ii) no "accumulated funding
deficiency," as such term is defined in Section 302 of ERISA and Section
412 of the Code, whether or not waived, has occurred with respect to any
Plan; (iii) each Plan has been maintained, operated, and funded in
compliance with its own terms and in material compliance with the
provisions of ERISA, the Code, and any other applicable federal or state
laws; and (iv) no lien in favor of the PBGC or a Plan has arisen or is
reasonably likely to arise on account of any Plan.
(b) The actuarial present value of all "benefit liabilities" (as
defined in Section 4001(a)(16) of ERISA), whether or not vested, under
each Single Employer Plan, as of the last annual valuation date prior to
the date on which this representation is made or deemed made
(determined, in each case, in accordance with Financial Accounting
Standards Board Statement 87, utilizing the actuarial assumptions used
in such Plan's most recent actuarial valuation report), did not exceed
as of such valuation date the fair market value of the assets of such
Plan.
(c) Neither the Borrower nor any ERISA Affiliate has incurred,
or, to the best knowledge of the Executive Officers of the Borrower, the
general partner of the Borrower and the managing member of the general
partner of the Borrower, could be reasonably expected to incur, any
withdrawal liability under ERISA to any Multiemployer Plan or Multiple
Employer Plan. Neither the Borrower nor any ERISA Affiliate would become
subject to any withdrawal liability under ERISA if the Borrower or any
ERISA Affiliate
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were to withdraw completely from all Multiemployer Plans and Multiple
Employer Plans as of the valuation date most closely preceding the date
on which this representation is made or deemed made. Neither the
Borrower nor any ERISA Affiliate has received any notification that any
Multiemployer Plan is in reorganization (within the meaning of Section
4241 of ERISA), is insolvent (within the meaning of Section 4245 of
ERISA), or has been terminated (within the meaning of Title IV of
ERISA), and no Multiemployer Plan is, to the best knowledge of the
Executive Officers of the Borrower, the general partner of the Borrower
and the managing member of the general partner of the Borrower,
reasonably expected to be in reorganization, insolvent, or terminated.
(d) No prohibited transaction (within the meaning of Section 406
of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility has occurred with respect to a Plan which has subjected
or may subject the Borrower or any ERISA Affiliate to any liability
under Sections 406, 409, 502(i), or 502(l) of ERISA or Section 4975 of
the Code, or under any agreement or other instrument pursuant to which
the Borrower or any ERISA Affiliate has agreed or is required to
indemnify any Person against any such liability.
(e) Neither the Borrower nor any ERISA Affiliates has any
material liability with respect to "expected post-retirement benefit
obligations" within the meaning of the Financial Accounting Standards
Board Statement 106. Each Plan which is a welfare plan (as defined in
Section 3(1) of ERISA) to which Sections 601-609 of ERISA and Section
4980B of the Code apply has been administered in compliance in all
material respects of such sections.
(f) Neither the execution and delivery of this Credit Agreement
nor the consummation of the financing transactions contemplated
thereunder will involve any transaction which is subject to the
prohibitions of Sections 404, 406 or 407 of ERISA or in connection with
which a tax could be imposed pursuant to Section 4975 of the Code. The
representation by the Borrower in the preceding sentence is made in
reliance upon and subject to the accuracy of the Lenders' representation
in Section 11.15 with respect to their source of funds and is subject,
in the event that the source of the funds used by the Lenders in
connection with this transaction is an insurance company's general asset
account, to the application of Prohibited Transaction Class Exemption
95-60, 60 Fed. Reg. 35,925 (1995), compliance with the regulations
issued under Section 401(c)(1)(A) of ERISA, or the issuance of any other
prohibited transaction exemption or similar relief, to the effect that
assets in an insurance company's general asset account do not constitute
assets of an "employee benefit plan" within the meaning of Section 3(3)
of ERISA of a "plan" within the meaning of Section 4975(e)(1) of the
Code.
5.13 GOVERNMENTAL REGULATIONS, ETC.
(a) No proceeds of the Loans will be used, directly or
indirectly, for the purpose of purchasing or carrying any "margin stock"
within the meaning of Regulation U, or for the purpose of purchasing or
carrying or trading in any securities. If requested by any Lender or the
Administrative Agent, the Borrower will furnish to the Administrative
Agent and each Lender a statement to the foregoing effect in conformity
with the requirements of FR Form
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U-1 referred to in Regulation U. No indebtedness being reduced or
retired out of the proceeds of the Loans was or will be incurred for the
purpose of purchasing or carrying any margin stock within the meaning of
Regulation U or any "margin security" within the meaning of Regulation
T. "Margin stock" within the meaning of Regulation U does not constitute
more than 25% of the value of the consolidated assets of the Borrower.
None of the transactions contemplated by this Credit Agreement
(including, without limitation, the direct or indirect use of the
proceeds of the Loans) will violate or result in a violation of the
Securities Act of 1933, as amended, or the Securities Exchange Act of
1934, as amended, or regulations issued pursuant thereto, or Regulation
T, U or X.
(b) The Borrower is not subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act or the
Investment Company Act of 1940, each as amended. In addition, the
Borrower is not (i) an "investment company" registered or required to be
registered under the Investment Company Act of 1940, as amended, and is
not controlled by such a company, or (ii) a "holding company", or a
"subsidiary company" of a "holding company", or an "affiliate" of a
"holding company" or of a "subsidiary" of a "holding company", within
the meaning of the Public Utility Holding Company Act of 1935, as
amended.
(c) No director, executive officer, principal shareholder or
partner of the Borrower is a director, executive officer or principal
shareholder of any Lender. For the purposes hereof the terms "director",
"executive officer" and "principal shareholder" (when used with
reference to any lender) have the respective meanings assigned thereto
in Regulation O issued by the Board of Governors of the Federal Reserve
System.
(d) The Borrower has obtained and holds in full force and
effect, all franchises, licenses, permits, certificates, authorizations,
qualifications, accreditations, easements, rights of way and other
rights, consents and approvals which are necessary for the ownership of
its respective Property and to the conduct of its respective businesses
as presently conducted.
(e) The Borrower is not in violation of any applicable statute,
regulation or ordinance of the United States, or of any state, city,
town, municipality, county or any other jurisdiction, or of any agency
thereof (including without limitation, environmental laws and
regulations), which violation could reasonably be expected to have a
Material Adverse Effect.
(f) The Borrower is current with all material reports and
documents, if any, required to be filed with any state or federal
securities commission or similar agency and is in full compliance in all
material respects with all applicable rules and regulations of such
commissions.
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5.14 PURPOSE OF LOANS.
The proceeds of the Loans hereunder shall be used solely by the Borrower
to (a) finance the Construction Costs, (b) pay other costs included in the
Project Budget and otherwise approved by the Project Administrative Agent in
accordance with the terms of (c)(ii) of Schedule 4.3 and (c) refinance existing
Indebtedness.
5.15 ENVIRONMENTAL MATTERS.
Except as set forth on Schedule 5.15:
(a) The Real Properties and all operations at the Real
Properties are in compliance with all applicable Environmental Laws, and
there is no violation of any Environmental Law with respect to the Real
Properties or the Businesses, and there are no conditions relating to
the Businesses or Real Properties that could give rise to liability
under any applicable Environmental Laws.
(b) None of the Real Properties contains, or has previously
contained, any Materials of Environmental Concern at, on or under the
Real Properties in amounts or concentrations that constitute or
constituted a violation of, or could give rise to liability under,
Environmental Laws.
(c) The Borrower has not received any written or verbal notice
of, or inquiry from any Governmental Authority regarding, any violation,
alleged violation, non-compliance, liability or potential liability
regarding environmental matters or compliance with Environmental Laws
with regard to any of the Real Properties or the Businesses, nor does
any Executive Officer of the Borrower, the general partner of the
Borrower or the managing member of the general partner of the Borrower
have knowledge or reason to believe that any such notice will be
received or is being threatened.
(d) Materials of Environmental Concern have not been transported
or disposed of from the Real Properties, or generated, treated, stored
or disposed of at, on or under any of the Real Properties or any other
location, in each case by or on behalf of the Borrower in violation of,
or in a manner that could reasonably be expected to give rise to
liability under, any applicable Environmental Law.
(e) No judicial proceeding or governmental or administrative
action is pending or, to the best knowledge of any Executive Officer of
the Borrower, the general partner of the Borrower and the managing
member of the general partner of the Borrower, threatened, under any
Environmental Law to which the Borrower is or will be named as a party,
nor are there any consent decrees or other decrees, consent orders,
administrative orders or other orders, or other administrative or
judicial requirements outstanding under any Environmental Law with
respect to the Real Properties or the Businesses.
(f) There has been no release, or threat of release, of
Materials of Environmental Concern at or from the Real Properties, or
arising from or related to the
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operations (including, without limitation, disposal) of the Borrower in
connection with the Real Properties or otherwise in connection with the
Businesses, in violation of or in amounts or in a manner that could give
rise to liability under Environmental Laws.
5.16 INTELLECTUAL PROPERTY.
The Borrower owns, or has the legal right to use, all trademarks,
tradenames, copyrights, patents, technology, know-how and processes (the
"Intellectual Property") necessary for it to conduct its business as currently
conducted except for those the failure to own or have such legal right to use
could not reasonably be expected to have a Material Adverse Effect. No claim has
been asserted and is pending by any Person challenging or questioning the use of
any such Intellectual Property or the validity or effectiveness of any such
Intellectual Property, nor does the Borrower know of any such claim, and, to the
knowledge of the Executive Officers of the Borrower, the general partner of the
Borrower and the managing member of the general partner of the Borrower, the use
of such Intellectual Property by Borrower does not infringe on the rights of any
Person, except for such claims and infringements that, in the aggregate, could
not reasonably be expected to have a Material Adverse Effect.
5.17 LOCATION OF COLLATERAL.
Set forth on Schedule 5.17(a) is a list of all real property located in
the United States and owned or leased by the Borrower with street address and
state where located. Set forth on Schedule 5.17(b) is a list of all locations
where any tangible personal property of the Borrower is located, including
street address and state where located. Set forth on Schedule 5.17(c) is the
chief executive office and principal place of business of the Borrower.
5.18 DISCLOSURE.
Neither this Credit Agreement nor any financial statements delivered to
the Lenders nor any other document, certificate or statement furnished to the
Lenders by or on behalf of the Borrower in connection with the transactions
contemplated hereby contains any untrue statement of a material fact or omits to
state a material fact necessary in order to make the statements contained
therein or herein not misleading.
5.19 BROKERS' FEES.
The Borrower has no obligation to any Person (other than the
Administrative Agent and the Project Administrative Agent) in respect of any
finder's, broker's, investment banking or other similar fee in connection with
any of the transactions contemplated under the Credit Documents.
5.20 LABOR MATTERS.
There are no collective bargaining agreements or Multiemployer Plans
covering the employees of the Borrower, and the Borrower has not suffered any
strikes, walkouts, work stoppages or other material labor difficulty within the
last five years.
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5.21 YEAR 2000 COMPLIANCE.
The Borrower has (i) completed a review and assessment of all areas
within its businesses and operations (including those affected by suppliers,
vendors and customers) that could be adversely affected by the "Year 2000
Problem" (that is, the risk that computer applications may be unable to
recognize and properly perform date-sensitive functions involving certain dates
prior to and any date after December 31, 1999), (ii) developed a plan and
timeline for addressing the Year 2000 Problem on a timely basis, and (iii)
substantially completed implementation of that plan in accordance with that
timetable. The Year 2000 Problem has not resulted in, and the Borrower
reasonably believes that the Year 2000 Problem will not result in, a Material
Adverse Effect.
SECTION 6
AFFIRMATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
6.1 INFORMATION COVENANTS.
The Borrower will furnish, or cause to be furnished, to the
Administrative Agent (which shall promptly provide copies to each Lender), for
the benefit of the Lenders:
(a) Annual Financial Statements. As soon as available, and in
any event within 120 days after the close of each fiscal year of the
Borrower, a balance sheet and income statement of the Borrower as of the
end of such fiscal year, together with related statements of operations
and retained earnings and of cash flows for such fiscal year, in each
case setting forth in comparative form figures for the preceding fiscal
year, all such financial information described above to be in reasonable
form and detail and audited by independent certified public accountants
of recognized national standing reasonably acceptable to the
Administrative Agent and whose opinion shall be to the effect that such
financial statements have been prepared in accordance with GAAP (except
for changes with which such accountants concur) and shall not be limited
as to the scope of the audit or qualified as to the status of the
Borrower as a going concern or any other material qualifications or
exceptions.
(b) Quarterly Financial Statements. As soon as available, and in
any event within 45 days after the close of each fiscal quarter of the
Borrower (other than the fourth fiscal quarter, in which case 90 days
after the end thereof) a balance sheet and income statement of the
Borrower as of the end of such fiscal quarter, together with related
statements of operations and retained earnings and of cash flows for
such fiscal quarter, in each case setting forth in comparative form
figures for the corresponding period of the preceding fiscal year, all
such financial information described above to be in reasonable
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form and detail and reasonably acceptable to the Administrative Agent,
and accompanied by a certificate of an Executive Officer of Xxxxx
Properties to the effect that such quarterly financial statements fairly
present in all material respects the financial condition of the Borrower
and have been prepared in accordance with GAAP, subject to changes
resulting from audit and normal year-end audit adjustments.
(c) Officer's Certificate. At the time of delivery of the
financial statements provided for in Sections 6.1(a) and 6.1(b) above, a
certificate of an officer of the authorized member of the general
partner of the Borrower substantially in the form of Exhibit 6.1(c),
stating that no Default or Event of Default exists, or if any Default or
Event of Default does exist, specifying the nature and extent thereof
and what action the Credit Parties propose to take with respect thereto.
(d) Accountant's Certificate. Within the period for delivery of
the annual financial statements provided in Section 6.1(a), a
certificate of the accountants conducting the annual audit stating that
they have reviewed this Credit Agreement and stating further whether, in
the course of their audit, they have become aware of any Default or
Event of Default and, if any such Default or Event of Default exists,
specifying the nature and extent thereof.
(e) Auditor's Reports. Promptly upon receipt thereof, a copy of
any other report or "management letter" submitted by independent
accountants to the Borrower in connection with any annual, interim or
special audit of the books of such Person.
(f) Reports. Promptly upon transmission or receipt thereof, (i)
copies of any filings and registrations with, and reports to or from,
the Securities and Exchange Commission, or any successor agency, and
copies of all financial statements, proxy statements, notices and
reports as the Borrower shall send to its shareholders and (ii) upon the
request of the Administrative Agent, all reports and written information
with respect to the Project to and from the United States Environmental
Protection Agency, or any state or local agency responsible for
environmental matters, the United States Occupational Health and Safety
Administration, or any state or local agency responsible for health and
safety matters, or any successor agencies or authorities concerning
environmental, health or safety matters.
(g) Notices. Upon any Executive Officer of the Borrower, the
general partner of the Borrower or the managing member of the general
partner of the Borrower obtaining knowledge thereof, the Borrower will
give written notice to the Administrative Agent (i) immediately of the
occurrence of an event or condition consisting of a Default or Event of
Default, specifying the nature and existence thereof and what action the
Borrower proposes to take with respect thereto, and (ii) promptly of the
occurrence of any of the following with respect to the Borrower (A) the
pendency or commencement of any litigation, arbitral or governmental
proceeding against such Person which if adversely determined is likely
to have a Material Adverse Effect or (B) the institution of any
proceedings against such Person with respect to, or the receipt of
notice by such Person of potential liability or responsibility for
violation, or alleged violation of any federal, state or local law, rule
or regulation,
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including but not limited to, Environmental Laws, the violation of which
could have a Material Adverse Effect.
(h) ERISA. Upon any Executive Officer of the Borrower, the
general partner of the Borrower or the managing member of the general
partner of the Borrower obtaining knowledge thereof, the Borrower will
give written notice to the Administrative Agent promptly (and in any
event within five Business Days) of: (i) any event or condition,
including, but not limited to, any Reportable Event, that constitutes,
or might reasonably lead to, an ERISA Event; (ii) with respect to any
Multiemployer Plan, the receipt of notice as prescribed in ERISA or
otherwise of any withdrawal liability assessed against the Borrower or
any ERISA Affiliates, or of a determination that any Multiemployer Plan
is in reorganization or insolvent (both within the meaning of Title IV
of ERISA); (iii) the failure to make full payment on or before the due
date (including extensions) thereof of all amounts which the Borrower or
any ERISA Affiliate is required to contribute to each Plan pursuant to
its terms and as required to meet the minimum funding standard set forth
in ERISA and the Code with respect thereto; or (iv) any change in the
funding status of any Plan that could have a Material Adverse Effect,
together with a description of any such event or condition or a copy of
any such notice and a statement by an Executive Officer of Xxxxx
Properties briefly setting forth the details regarding such event,
condition, or notice, and the action, if any, which has been or is being
taken or is proposed to be taken by the Borrower with respect thereto.
Promptly upon request, the Borrower shall furnish the Administrative
Agent and the Lenders with such additional information concerning any
Plan as may be reasonably requested, including, but not limited to,
copies of each annual report/return (Form 5500 series), as well as all
schedules and attachments thereto required to be filed with the
Department of Labor and/or the Internal Revenue Service pursuant to
ERISA and the Code, respectively, for each "plan year" (within the
meaning of Section 3(39) of ERISA).
(i) Environmental.
(i) Subsequent to a receipt of notice by the
Administrative Agent or the occurrence of an event where the
subject matter of such notice or circumstances of such event
would reasonably cause concern that a material environmental
problem existed at the Real Properties, upon the written request
of the Administrative Agent, the Borrower will furnish or cause
to be furnished to the Administrative Agent, at the Borrower's
expense, a report of an environmental assessment of reasonable
scope, form and depth, (including, where appropriate, invasive
soil or groundwater sampling) by a consultant reasonably
acceptable to the Administrative Agent as to the nature and
extent of the presence of any Materials of Environmental Concern
on the Real Properties (as defined in Section 5.16) and as to
the compliance by the Borrower with Environmental Laws at such
Real Properties. If the Borrower fails to deliver such an
environmental report within seventy-five (75) days after receipt
of such written request then the Administrative Agent may
arrange for same, and the Borrower hereby grants to the
Administrative Agent and their representatives access to the
Real Properties to reasonably undertake such an assessment
(including, where appropriate, invasive soil or groundwater
sampling). The reasonable cost of any
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assessment arranged for by the Administrative Agent pursuant to
this provision will be payable by the Borrower on demand and
added to the obligations secured by the Collateral Documents.
(ii) The Borrower will conduct and complete all
investigations, studies, sampling, and testing and all remedial,
removal, and other actions necessary to address all Materials of
Environmental Concern on, from or affecting any of the Real
Properties to the extent necessary to be in compliance with all
Environmental Laws and with the validly issued orders and
directives of all Governmental Authorities with jurisdiction
over such Real Properties to the extent any failure could
reasonably be expected to have a Material Adverse Effect.
(j) Leases. Promptly upon consummation thereof, copies of each
lease entered into by the Borrower with respect to the Improvements.
(k) Other Information. With reasonable promptness upon any such
request, such other information regarding the business, properties or
financial condition of any Credit Party as the Administrative Agent, on
behalf of any Lender, may reasonably request.
6.2 PRESERVATION OF EXISTENCE AND FRANCHISES.
The Borrower will do all things necessary to preserve and keep in full
force and effect its existence, rights, franchises and authority.
6.3 BOOKS AND RECORDS.
The Borrower will keep complete and accurate books and records of its
transactions in accordance with good accounting practices on the basis of GAAP
(including the establishment and maintenance of appropriate reserves).
6.4 COMPLIANCE WITH LAW.
The Borrower will comply with all laws, rules, regulations and orders,
and all applicable restrictions imposed by all Governmental Authorities,
applicable to it and its Property if noncompliance with any such law, rule,
regulation, order or restriction could reasonably be expected to have a Material
Adverse Effect.
6.5 PAYMENT OF TAXES AND OTHER INDEBTEDNESS.
The Borrower will pay and discharge (a) all taxes, assessments and
governmental charges or levies imposed upon it, or upon its income or profits,
or upon any of its properties, before they shall become delinquent, (b) all
lawful claims (including claims for labor, materials and supplies) which, if
unpaid, might give rise to a Lien upon any of its properties, and (c) except as
prohibited hereunder, all of its other Indebtedness as it shall become due;
provided, however, that the Borrower shall not be required to pay any such tax,
assessment, charge, levy, claim or Indebtedness which is being contested in good
faith by appropriate proceedings and as to which adequate reserves therefor have
been established in accordance with GAAP, unless the failure to make any
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such payment (i) could give rise to an immediate right to foreclose on a Lien
securing such amounts or (ii) could reasonably be expected to have a Material
Adverse Effect.
6.6 INSURANCE.
(a) The Borrower hereby agrees that it will at all times
maintain in full force and effect insurance (including, but not limited
to, liability insurance, casualty insurance and builders risk insurance)
in such amounts and covering such risks and liabilities and with such
deductibles as are in accordance with normal industry practice and the
provisions set forth below:
(i) The builder's risk insurance policy with respect to
the Land and the Improvements shall be an "all-risk" completed
value, non-reporting builder's risk insurance policy and shall
contain (A) coverage for vandalism and malicious mischief, (B)
provisions for a minimum 45-day advance written notice to the
Administrative Agent and the Project Administrative Agent of any
intended policy cancellation or non-renewal and provide for
copies of any notices of any policy cancellation or non-renewal
to be delivered to the Project Administrative Agent and the
Administrative Agent, (C) a standard mortgagee endorsement
designating the Administrative Agent, for the benefit of the
Lenders, as mortgagee and loss payee, (D) provisions sufficient
to avoid the application of any co-insurance provisions and (E)
a soft cost coverage endorsement.
(ii) The general accident and public liability insurance
maintained by each of the Borrower and the general contractor
with respect to the Land and the Improvements shall (A) be
sufficient to insure against all claims for bodily injury, death
or property damage occurring upon, in or about the Project and
(B) include worker's compensation coverage in an amount
sufficient to satisfy statutory requirements.
(iii) Following completion of the Project, the
"all-risk" special form replacement cost insurance policy with
agreed amount endorsement with respect to the Land and the
Improvements must (i) eliminate all co-insurance provisions and
replace such provisions with a replacement cost endorsement,
(ii) include provisions for a minimum 30-day advance written
notice to the Administrative Agent of any intended policy
cancellation or non-renewal and (iii) designate the
Administrative Agent, for the benefit of the Lenders, as
mortgagee and loss payee in a standard mortgagee endorsement, as
its interest may appear.
(iv) A commercial general liability insurance policy
with respect to the Land and the Improvements insuring against
claims of bodily injury, death or property damage, in an amount
not less than $1,000,000, each occurrence form, naming the
Administrative Agent as additional insured for the benefit of
the Lenders.
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(b) In the event the Borrower fails to maintain insurance as
required hereunder, the Administrative Agent shall have the right to
procure such insurance whether or not the Borrower's failure to maintain
such insurance constitutes a Default or an Event of Default. Any amounts
paid by the Administrative Agent for insurance shall be due and payable
to the Administrative Agent upon demand and shall be secured by the
Collateral Documents.
(c) In the event of any material loss, the Borrower shall
promptly give written notice thereof to the Administrative Agent and the
insurance carrier describing the nature and extent of such damage or
destruction. The Administrative Agent may make proof of loss if not made
promptly by the Borrower. The Administrative Agent is hereby authorized,
upon the request and direction of the Required Lenders, to adjust,
compromise and collect the proceeds of any insurance claims. The
Borrower hereby assigns to the Administrative Agent, for the benefit of
the Lenders, the proceeds of any such insurance policies and hereby
directs and authorizes each insurance company to make payment for such
loss directly to the Administrative Agent. In the event the Borrower
shall receive any such insurance proceeds as a result of any loss,
damage or destruction with respect to the Collateral, the Borrower shall
immediately pay over such proceeds to the Administrative Agent as cash
collateral for the Credit Party Obligations. The Administrative Agent
agrees to release such insurance proceeds to the Borrower for
restoration or repair of the Collateral damaged provided the following
conditions are met:
(i) there exists no Default or Event of Default;
(ii) the Borrower presents sufficient evidence to the
Administrative Agent that there are sufficient funds from the
insurance proceeds and from equity funds, if needed, to
completely restore or repair the damaged collateral;
(iii) parties having existing or expected leasehold
interests in the Project constituting 75% of the gross leaseable
square footage in the Project agree in a manner satisfactory to
the Administrative Agent that they will continue or extend their
interests and arrangements for the contract terms then in effect
following the restoration or repair;
(iv) the Borrower presents sufficient evidence to the
Administrative Agent that the damaged Collateral will be
restored at least six (6) months prior to the Maturity Date;
(v) all parties having operating, management of
franchise interests in, and arrangements concerning the Land and
the Improvements agree that they will continue their interests
and arrangements for the contract terms then in effect following
the restoration;
(vi) the Administrative Agent and the Lenders will not
incur any liability to any other Person as a result of such use
or release of insurance proceeds;
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(vii) the insurance proceeds shall be held by the
Administrative Agent and disbursed as the repair or restoration
work progresses substantially in accordance with the
disbursement procedures of Sections 2.1 and 4.3 of this Credit
Agreement as if such proceeds were Loans; provided however that
insurance proceeds of $100,000 or less will be disbursed
directly to the Borrower for restoration or repair;
(viii) the plans and specifications, cost breakdown,
construction contract, construction schedule, contractor and
payment and performance bond for the work of repair or
reconstruction must all be acceptable to the Administrative
Agent and the Project Administrative Agent; and
(ix) the Nordstrom Lease Agreement shall not have been
terminated.
If the above-referenced conditions of this Section 6.6(c)(i), (ii),
(iii), (iv), (v), (vi), (vii), (viii) and (ix) are not satisfied within one
hundred twenty (120) days of loss, then the Administrative Agent may, at its
option, apply any insurance proceeds to the payment of the Revolving Loans. The
insurance coverage of the Borrower is outlined as to carrier, policy number,
expiration date, type and amount on Schedule 6.6.
6.7 MAINTENANCE OF PROPERTY.
The Borrower will maintain and preserve its properties and equipment
material to the conduct of its business in good repair, working order and
condition, normal wear and tear and casualty and condemnation excepted, and will
make, or cause to be made, in such properties and equipment from time to time
all repairs, renewals, replacements, extensions, additions, betterments and
improvements thereto as may be needed or proper, to the extent and in the manner
customary for companies in similar businesses.
6.8 PERFORMANCE OF OBLIGATIONS.
The Borrower will perform in all material respects all of its
obligations under the terms of all material agreements, indentures, mortgages,
security agreements or other debt instruments to which it is a party or by which
it is bound.
6.9 USE OF PROCEEDS.
The Borrower will use the proceeds of the Loans solely for the purposes
set forth in Section 5.14.
6.10 AUDITS/INSPECTIONS.
(a) Upon reasonable notice and during normal business hours, the
Borrower will permit representatives appointed by the Administrative Agent,
including, without limitation, independent accountants, agents, attorneys, and
appraisers to visit and inspect its property, including its books and records,
its accounts receivable and inventory, its facilities and its other business
assets, and to make photocopies or photographs thereof and to write down and
record any information such
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representative obtains and shall permit the Administrative Agent or its
representatives to investigate and verify the accuracy of information provided
to the Lenders and to discuss all such matters with the officers, employees and
representatives of such Person. The Borrower agrees that the Administrative
Agent may enter upon the Land at any time for the purpose of inspecting the
construction of the Project. The Borrower agrees that the Administrative Agent
may order appraisals or reappraisals of the Project and/or the Improvements (at
the Borrower's expense) if the Administrative Agent has a reasonable belief that
there has been a material change to the Project. Such appraisals shall be by a
qualified appraiser designated by and satisfactory to the Administrative Agent
and must be satisfactory to the Administrative Agent in form and substance.
(b) The Borrower will permit the Project Administrative Agent and its
authorized agents to enter upon the Land during normal working hours and as
often as the Project Administrative Agent desires, for the purpose of inspecting
the construction of the Project. Failure of the Project Administrative Agent or
its authorized agents to discover or to reject materials or workmanship shall
not make it liable to the Borrower or to any other person on account of such
deficiency, nor shall any prior failure constitute a waiver of the Project
Administrative Agent's right to subsequently reject any such workmanship or
materials.
6.11 YEAR 2000 COMPLIANCE.
The Borrower will promptly notify the Administrative Agent in the event
the Borrower discovers or determines that the Year 2000 Problem has resulted in,
or is reasonably expected to result in, a Material Adverse Effect.
6.12 CONSTRUCTION.
The Borrower hereby agrees that the Project shall be substantially
complete on or before October 31, 2001 in accordance with (a) the Plans and
Specifications and (b) all building, zoning and other applicable laws,
ordinances, codes, rules and regulations and requirements of all Federal, State
and municipal governments.
6.13 EMINENT DOMAIN.
(a) The Borrower hereby agrees that it will promptly notify the
Administrative Agent of any actual or threatened initiation of any eminent
domain proceeding as to any part of the Project and shall deliver to the
Administrative Agent copies of any and all papers served or received in
connection with such proceedings, and the Administrative Agent shall have the
right, upon the request and direction of the Required Lenders, to participate in
such proceedings at the expense of the Borrower (including, without limitation,
the Administrative Agent's attorney's fees) and the Borrower will execute such
documents and take such other steps as required to permit such participation.
The Administrative Agent is hereby authorized, upon the request and direction of
the Required Lenders, to adjust, compromise and collect any eminent domain award
or settle a claim for damages and to apply the same to the payment of the
Revolving Loans, subject to the provisions of subsection (b) below.
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(b) The Borrower assigns to the Administrative Agent, for the benefit of
the Lenders, any proceeds or awards which may become due by reason of any
condemnation or other taking for public use of the whole or any part of the Land
and the Improvements or any rights appurtenant thereto. The Administrative Agent
agrees to release the proceeds of any such condemnation award to the Borrower
for restoration or repair of the Collateral if the following conditions are met:
(i) there exists no Default or Event of Default;
(ii) the Borrower presents sufficient evidence to the
Administrative Agent that there are sufficient funds
from the condemnation proceeds and equity funds, if
needed, to completely restore or repair the damaged
Collateral;
(iii) parties having existing or expected leasehold interests
in the Project constituting 75% of the gross leaseable
square footage in the Project agree in a manner
satisfactory to the Administrative Agent that they will
continue to extend their interests and arrangements for
the contract terms then in effect following the
restoration or repair;
(iv) all parties having operating, management or franchise
interests in, and arrangements concerning, the Land and
the Improvements agree that they will continue their
interests and arrangements for the contract terms then
in effect following the restoration;
(v) the Borrower presents sufficient evidence to the
Administrative Agent that the damaged Collateral will be
restored at least six (6) months prior to the Maturity
Date;
(vi) the Administrative Agent and the Lenders will not incur
any liability to any other Person as a result of such
release of proceeds;
(vii) the condemnation award or proceeds shall be held by the
Administrative Agent and disbursed as the restoration
work progresses substantially in accordance with the
disbursement procedures of Sections 2.1 and 4.3 of the
Credit Agreement as if such proceeds were Loans;
provided, however, that condemnation awards or proceeds
of $100,000 or less will be disbursed directly to the
Borrower for restoration or repair;
(viii) the plans and specifications, cost breakdown,
construction contract, construction schedule, contractor
and payment and performance bond for the work of repair
or restoration work must all be acceptable to the
Administrative Agent and the Project Administrative
Agent; and
(ix) the Nordstrom Lease Agreement shall not have been
terminated.
If the above-referenced conditions of this Section 6.13(b)(i), (ii),
(iii), (iv), (v), (vi), (vii), (viii) and (ix) are not satisfied within one
hundred twenty (120) days of the date of the taking,
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then the Administrative Agent may, at its option, apply any condemnation
proceeds or award to the payment of the Revolving Loans.
(c) The Borrower agrees to execute such further assignments and
agreements as may be reasonably required by the Administrative Agent to assure
the effectiveness of this Section 6.13.
6.14. CHANGES IN PLANS AND SPECIFICATIONS; CHANGE ORDERS.
The Borrower shall provide the Project Administrative Agent with notice
of all changes in the Plans and Specifications, changes to the terms of the
construction contract for the Improvements, orders for extra work, or other
changes to the Project. All changes to the Plans and Specifications or the
Project (other than minor changes which do not affect the cost of the Project or
the scheduled completion date) shall be made by a written change order signed by
the Borrower and its general contractor. The Project Administrative Agent's
prior written approval (such approval not to be unreasonably withheld, delayed
or conditioned) shall be required for (a) any single change order or
modification which will result in an increase or decrease of more than $500,000
of the direct construction costs ("Construction Costs") specified in the
construction budget for the Project approved by the Project Administrative Agent
(the "Project Budget"); (b) any change order or modification which together with
the aggregate of all previous change orders or modifications (whether or not
previously approved by the Project Administrative Agent) will result in a net
cumulative increase or decrease in the Construction Costs of more than
$1,500,000; or any change order or modification or any amendment or modification
to the construction contract or the Plans and Specifications which will affect
the scheduled completion date of the Project. The Borrower will not permit the
performance of any work pursuant to any change order unless and until the
Borrower has received the approval of the Project Administrative Agent (such
approval not to be unreasonably withheld, delayed or conditioned), if such
approval is required pursuant to this Section 6.14. The Borrower shall provide
the Project Administrative Agent with copies of all change orders and
modifications, irrespective of amount, whether or not the Project Administrative
Agent's prior approval is required pursuant to this Section 6.14. Each of the
parties hereto agrees that the terms of this Section 6.14 shall not restrict or
otherwise impair the Borrower's right to receive insurance proceeds from the
Administrative Agent in accordance with Section 6.6 or condemnation proceeds
from the Administrative Agent in accordance with Section 6.13 nor shall receipt
of such proceeds in accordance with the respective sections be included in the
cumulative increase or decrease for purposes of required approvals under this
Section 6.14.
6.15 ABANDONMENT OF CONSTRUCTION.
The Borrower agrees if construction of the Improvements is at any time
abandoned or discontinued for fifteen (15) consecutive days or more, or if the
Project Administrative Agent in good faith determines the work is not being
performed in accordance with the approved Plans and Specifications and the
approved construction contract, the Project Administrative Agent, on behalf of
Lenders, may enter onto the Project (or designate a third party to enter onto
the Project) to complete the construction or correct any work improperly done or
replace any defective material. If the Project Administrative Agent exercise the
foregoing option, it may employ such workmen and furnish such materials as it
believes are necessary or appropriate to complete the Improvements or
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correct any errors or defects in construction or workmanship. All costs incurred
by the Project Administrative Agent pursuant to this Section 6.15, including
reasonable sums for supervision, attorneys' fees and all related costs and
expenses, shall be deemed additional advances to the Borrower and secured by the
Mortgage Instrument. On demand, the Borrower shall pay all costs and expenses
expended by the Project Administrative Agent pursuant to this Section 6.15. The
fifteen (15) day period set forth above shall be extended one (1) day for each
day that the abandonment or discontinuation of construction is caused by fire,
earthquake or other acts of God, strikes, lockout, acts of public enemy, riot,
insurrection or governmental regulation of the sale or transportation of
materials, supplies or labor, or any other cause beyond the reasonable control
of the Borrower; provided, in no event shall such fifteen (15) day period be
extended to a period of more than sixty (60) days, unless otherwise agreed in
writing by the Project Administrative Agent.
6.16 ALLEY VACATION.
At such time as the City vacates the alley abutting the Land, the
Borrower shall (i) promptly (and in any event within five (5) Business Days
thereafter) provide the Administrative Agent and the Project Administrative
Agent with notice of such vacation, (ii) (to the extent the Ground Lease
Agreement is still in effect), use commercially reasonable best efforts to,
enter into an amendment to the Ground Lease Agreement (in form and substance
reasonably satisfactory to the Administrative Agent) ground leasing to the
Borrower that portion of the alley vacated by the City to Xxxxxxx Avenue
Properties (or its successor or assignee, as ground lessor), (iii) within thirty
(30) days of the notice referenced in subclause (i) above, enter into an
amendment to the Mortgage Instrument which grants to the Administrative Agent,
for the benefit of the Lenders, a lien on and security interest in that portion
of the alley vacated to the Borrower and which is otherwise reasonably
satisfactory in form and substance to the Administrative Agent and (iv) within
thirty (30) days of the notice referenced in subclause (i) above, provide the
Administrative Agent with an endorsement to the Mortgage Policy (in form and
substance reasonably satisfactory to the Administrative Agent) with respect to
such alley vacation and amendment to Mortgage Instrument. If the Borrower enters
into the amendment to the Ground Lease Agreement referenced in subclause (ii)
above, the Borrower shall (within thirty (30) days of such amendment) provide
the Administrative Agent (a) with an amendment to the Mortgage Instrument (in
form and substance reasonably satisfactory to the Administrative Agent) which
grants to the Administrative Agent, for the benefit of the Lenders, a lien on
and security interest in all of the Borrower's rights and interests under the
Ground Lease Agreement (as amended pursuant to the amendment described in
subclause (ii) above) and (b) with an endorsement to the Mortgage Policy (in
form and substance reasonably satisfactory to the Administrative Agent) with
respect to such amendment to Ground Lease Agreement.
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SECTION 7
NEGATIVE COVENANTS
The Borrower hereby covenants and agrees that, so long as this Credit
Agreement is in effect or any amounts payable hereunder or under any other
Credit Document shall remain outstanding, and until all of the Commitments
hereunder shall have terminated:
7.1 INDEBTEDNESS.
The Borrower will not contract, create, incur, assume or permit to exist
any Indebtedness, except:
(a) Indebtedness arising under this Credit Agreement and the
other Credit Documents;
(b) obligations of the Borrower in respect of Hedging Agreements
entered into in order to manage existing or anticipated interest rate or
exchange rate risks and not for speculative purposes;
(c) Indebtedness of the Borrower with respect to that certain
letter of credit issued by Bank of America in the amount of $1,328,340
to secure the Borrower's obligations to construct the Housing Project
and satisfy other conditions to qualification for additional square feet
of floor area through the housing bonus (the "Housing Credits Letter of
Credit").
(d) obligation of the Borrower to pay (a) HRG $1,250,000 pursuant
to the Joint Development Agreement on account of HRG's construction,
development, ownership and operation of the Housing Project or (b) any
other Person reasonably acceptable to the Project Administrative Agent
up to $1,250,000 on account of such Person's construction, development,
ownership and operation of the Housing Project;
(e) obligation of the Borrower to purchase the Tipp Property in
the amount of up to $2,000,000 following (i) the exercise by the Ground
Lessor (as defined in the Ground Lease Agreement) of its right to sell
pursuant to the Ground Lease Agreement or (ii) the exercise by the
Borrower of its right to purchase pursuant to the Ground Lease Agreement
or any other arrangement under which the Borrower may purchase the Tipp
Property;
(f) obligation of the Borrower to guarantee each third party
lease on each retail space (at a triple net rent and on other market
terms) located below the Housing Project for the life of the tax exempt
bonds issued to finance the Housing Project, as required by (i) the
Joint Development Agreement or (ii) any other agreement entered into by
the Borrower with a Person reasonably acceptable to the Project
Administrative Agent regarding the construction, development, ownership
and operation of the Housing Project;
(g) such other obligations of the Borrower to HRG under the Joint
Development Agreement or any other Person reasonably acceptable to the
Project Administrative Agent
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under any other agreement entered into by the Borrower regarding the
construction, development, ownership and operation of the Housing
Project, including the Borrower's obligation to reimburse such Person
for out-of-pocket expenses related to the transfer of any unused housing
bonus to a third party and to reimburse such Person for hard costs and
soft costs related to the construction of the truck parking area on the
Tipp Property;
(h) additional unsecured subordinated Indebtedness of the
Borrower, provided that (a) such Indebtedness shall be subordinated to
the Loans pursuant to subordination terms satisfactory to the
Administrative Agent, (b) such Indebtedness shall not exceed $15,000,000
in the aggregate principal amount at any time outstanding, (c) no part
of the principal amount of such Indebtedness shall have a maturity date
earlier than the Maturity Date and (d) the Borrower shall not be
required to make any payments of principal or interest with respect to
such Indebtedness other than payments of interest in kind or made
through additional borrowings under such Indebtedness rather than direct
cash payments (collectively, the "Subordinated Debt"); and
(i) prior to the funding of the Loans hereunder on the Funding
Date, the Nordstrom Loan.
7.2 LIENS.
The Borrower will not contract, create, incur, assume or permit to exist
any Lien with respect to any of its Property, whether now owned or after
acquired, except for (i) Permitted Liens and (ii) prior to the funding of the
Loans hereunder on the Funding Date, the Guarantor's Liens against the
Collateral.
7.3 NATURE OF BUSINESS.
The Borrower will not substantively alter the character or conduct of
the business conducted by the Borrower as of the Closing Date, which shall be
limited to the ownership, development, improvement, leasing, operation and
management of the Project.
7.4 CONSOLIDATION, MERGER, DISSOLUTION, ETC.
The Borrower will not enter into any transaction of merger or
consolidation or liquidate, wind up or dissolve itself (or suffer any
liquidation or dissolution).
7.5 ASSET DISPOSITIONS.
The Borrower will not make any Asset Disposition (including without
limitation any Sale and Leaseback Transaction) other than (i) the sale of assets
in the ordinary course of business (ii) the sale or disposition of assets no
longer used or useful in the conduct of such Person's business, and (iii) the
transfer of the Tipp Property to HRG or any other Person reasonably acceptable
to the Project Administrative Agent; provided that, (a) use restrictions
(satisfactory in form and substance to the Project Administrative Agent) shall
have been placed on the Tipp Property such that the only permitted use of the
Tipp Property will be the construction and operation of the Housing Project and
construction of a truck parking area to serve the Project, (b) HRG or such other
Person shall
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have agreed to construct the Housing Project and such truck parking area in
accordance with all applicable permits, declarations, ordinances and laws and
otherwise on terms reasonably satisfactory to the Project Administrative Agent,
and (c) a permanent easement shall have been granted to the Borrower (in form
and substance satisfactory to the Project Administrative Agent) providing for
the Borrower's unlimited use and maintenance of such truck parking area on the
Tipp Property.
Upon the transfer of the Tipp Property permitted by this Section 7.5,
the Administrative Agent shall deliver to the Borrower, upon the Borrower's
request and at the Borrower's expense, such documentation as is reasonably
necessary to evidence the release of the Administrative Agent's Lien on the
Ground Lease Agreement or the Tipp Property (if the Borrower has purchased the
Tipp Property).
7.6 INVESTMENTS.
The Borrower will not make Investments in or to any Person, except for
Permitted Investments.
7.7 RESTRICTED PAYMENTS.
The Borrower will not directly or indirectly, declare, order, make or
set apart any sum for or pay any Restricted Payment, except (i) to make
dividends payable solely in the same class of Capital Stock of such Person, (ii)
for so long as the Borrower is not subject to federal, state or local taxes, the
Borrower shall be permitted to distribute from time to time such amounts as
Xxxxx Venture reasonably determines are sufficient to enable each partner of the
Borrower to pay any federal, state or local tax liability attributable to its
distributive share of the income and gain of the Borrower and (iii) so long as
(a) the Project has achieved Stabilization and (b) no Default or Event of
Default exists or would result therefrom, the Borrower may make cash dividends
or distributions to its members not more than once per quarter; provided, that,
(x) the Debt Service Coverage Ratio, as of the end of the fiscal quarter
immediately preceding such cash dividend or distribution, for the twelve month
period ending on such date, shall be greater than 1.25 to 1.0 and (y) the
Borrower shall have provided advance written notice to the Administrative Agent
of the date and amount of such cash dividend or distribution.
7.8 OTHER INDEBTEDNESS.
The Borrower will not (i) after the issuance thereof, amend or modify
(or permit the amendment or modification of) any of the terms of any other
Indebtedness of the Borrower (including without limitation the Subordinated
Debt) if such amendment or modification would add or change any terms in a
manner adverse to the Borrower, or shorten the final maturity or average life to
maturity or require any payment to be made sooner than originally scheduled or
increase the interest rate applicable thereto or change any subordination
provision thereof, or (ii) make (or give any notice with respect thereto) any
voluntary or optional payment or prepayment or redemption or acquisition for
value of (including without limitation, by way of depositing money or securities
with the trustee with respect thereto before due for the purpose of paying when
due), refund, refinance or
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exchange of any other Indebtedness of the Borrower (including without limitation
the Subordinated Debt) other than the Nordstrom Loan.
7.9 TRANSACTIONS WITH AFFILIATES.
Except for the agreements set forth on Schedule 7.9, the Borrower will
not enter into or permit to exist any transaction or series of transactions with
any officer, director, shareholder, Subsidiary or Affiliate of the Borrower
other than (a) normal compensation and reimbursement of expenses of officers and
directors and (b) except as otherwise specifically limited in this Credit
Agreement, other transactions which are entered into in the ordinary course of
the Borrower's business on terms and conditions substantially as favorable to
the Borrower as would be obtainable by it in a comparable arms-length
transaction with a Person other than an officer, director, shareholder,
Subsidiary or Affiliate.
7.10 FISCAL YEAR; ORGANIZATIONAL DOCUMENTS.
The Borrower will not change its fiscal year or amend, modify or change
its partnership agreement (or other similar organizational document).
7.11 LIMITATION ON RESTRICTED ACTIONS.
The Borrower will not directly or indirectly, create or otherwise cause
or suffer to exist or become effective any encumbrance or restriction on the
ability of the Borrower to (a) pay dividends or make any other distributions to
any Credit Party on its Capital Stock or with respect to any other interest or
participation in, or measured by, its profits, (b) pay any Indebtedness or other
obligation owed to any Credit Party, (c) make loans or advances to any Credit
Party or (d) sell, lease or transfer any of its properties or assets to any
Credit Party, except (in respect of any of the matters referred to in clauses
(a)-(d) above) for such encumbrances or restrictions existing under or by reason
of (i) this Credit Agreement and the other Credit Documents or (ii) applicable
law.
7.12 SUBSIDIARIES.
The Borrower agrees that it shall not form any Subsidiaries.
7.13 SALE LEASEBACKS.
The Borrower will not enter into any Sale and Leaseback Transaction.
7.14 NO FURTHER NEGATIVE PLEDGES.
The Borrower will not enter into, assume or become subject to any
agreement prohibiting or otherwise restricting the creation or assumption of any
Lien upon its properties or assets, whether now owned or hereafter acquired, or
requiring the grant of any security for any obligation if security is given for
any other obligation, except pursuant to this Credit Agreement and the other
Credit Documents.
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7.15 LEASES.
The Borrower will not enter into any lease with respect to office space
in the Project which (i) is on a form of lease not previously approved by the
Project Administrative Agent, (ii) is for a term of more than five (5) years,
not including renewal periods, or more than ten (10) years including renewal
periods, (iii) contains an option or right to purchase all or any part of the
Project, (iv) covers more than a full floor of space in the Project, (v) is with
an Affiliate of the Borrower or (vi) is for a base rental rate less than ninety
percent (90%) of the pro forma base rental rate of $34.50 per square foot for
office space in the Project, or provides for a tenant improvement allowance or
for tenant improvements costing more than one hundred ten percent (110%) of the
pro forma tenant allowance of $35.00 per square foot for office space in the
Project unless the Borrower has notified the Project Administrative Agent of
such lease and provided the Project Administrative Agent seven (7) Business Days
to review such lease. Furthermore, with respect to any lease of the Project
requiring the review of the Project Administrative Agent pursuant to the terms
of the preceding sentence, the Borrower shall not (i) permit the assignment or
subletting of all or any part of the lessee's rights under such lease unless the
right to assign or sublet is expressly reserved by the lessee under such lease,
(ii) amend or modify such lease or (iii) accept surrender of such lease or
terminate such lease except in accordance with the terms of such lease unless
the Borrower has notified the Project Administrative Agent of such assignment,
amendment or termination, as applicable, and provided the Project Administrative
Agent seven (7) Business Days to review such assignment, amendment or
termination, as applicable. The Project Administrative Agent agrees that it will
review each lease, assignment of lease, or amendment to lease, as applicable,
within seven (7) Business Days of receipt of such lease, assignment or
amendment, as applicable. Nothing contained in this Section 7.15 shall prohibit
the Borrower from entering into any lease, consenting to the assignment or
subletting of any lease, or accepting the surrender or termination of any lease
so long as the Administrative Agent is provided the notice and review period
required by this Section 7.15.
7.16 PLANS AND SPECIFICATIONS.
The Borrower will not make any material amendments or material
modifications to any of (i) the Plans and Specifications, (ii) the Development
Agreement, (iii) the construction contract for the Improvements, (iv) the
architect's contract for the Improvements, (v) the Transferable Development
Agreements or (vi) the Letter of Credit Agreement without the prior written
consent of the Administrative Agent.
7.17 FLOOR AREA RATIO.
The Borrower shall not permit the floor area ratio for the Land to drop
below that necessary to construct and operate the Project to its intended height
size and dimensions and in accordance with the Plans and Specifications.
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SECTION 8
EVENTS OF DEFAULT
8.1 EVENTS OF DEFAULT.
An Event of Default shall exist upon the occurrence of any of the
following specified events (each an "Event of Default"):
(a) Payment. The Borrower shall
(i) default in the payment when due of any principal of any
of the Loans, or
(ii) default, and such default shall continue for three (3)
or more Business Days, in the payment when due of any interest on
the Loans, or of any Fees or other amounts owing hereunder, under
any of the other Credit Documents or in connection herewith or
therewith; or
(b) Representations. Any representation, warranty or statement
made or deemed to be made by any Credit Party herein, in any of the
other Credit Documents, or in any statement or certificate delivered or
required to be delivered pursuant hereto or thereto shall prove untrue
in any material respect on the date as of which it was deemed to have
been made; or
(c) Covenants. The Borrower shall
(i) default in the due performance or observance of any term,
covenant or agreement contained in Sections 6.2, 6.4, 6.9, 6.11
or 7.1, 7.3, 7.4, 7.5, 7.8, 7.10, 7.11, 7.12, 7.13, 7.16 or 7.17;
(ii) default in the due performance or observance of any
term, covenant or agreement contained in Sections 6.1(a), (b) (c)
or (d), 6.12, 6.13, 6.16, 7.2, 7.6, 7.9, 7.14 or 7.15 and such
default shall continue unremedied for a period of at least 5
Business Days after the earlier of any Executive Officer of the
Borrower, the general partner of the Borrower or the managing
member of the general partner of the Borrower becoming aware of
such default or notice thereof by the Administrative Agent; or
(iii) default in the due performance or observance by it of
any term, covenant or agreement (other than those referred to in
subsections (a), (b), (c)(i) or (c)(ii) of this Section 8.1)
contained in this Credit Agreement or any other Credit Document
and such default shall continue unremedied for a period of at
least 30 days after the earlier of any Executive Officer of the
Borrower, the general partner of the Borrower or the managing
member of the general partner of the Borrower becoming aware of
such default or notice thereof by the Administrative Agent,
except for a default of Section 6.7 of this Credit Agreement or a
default of
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Section 2.8 of the Mortgage Instrument which cannot be cured
within such 30 day period in which case if the Credit Parties
have begun a cure within such 30 day period and are pursuing it
with all due diligence, the Credit Parties shall have an
additional 30 days to cure such default; or
(d) Other Credit Documents. Any Credit Document shall fail to be
in full force and effect or to give the Administrative Agent and/or the
Lenders the Liens, rights, powers and privileges purported to be created
thereby, or any Credit Party shall so state in writing; or
(e) Guaranties. The guaranty given by the Guarantor under the
Guaranty Agreement or any provision thereof shall cease to be in full
force and effect, or the Guarantor under the Guaranty Agreement or any
Person acting by or on behalf of the Guarantor shall deny or disaffirm
the Guarantor's obligations under the Guaranty Agreement, or the
Guarantor shall default in the due performance or observance of any
term, covenant or agreement on its part to be performed or observed
pursuant to the Guaranty Agreement; or
(f) Bankruptcy, etc. Any Bankruptcy Event shall occur with
respect to the Borrower; or
(g) Defaults under Other Indebtedness.
(i) The Borrower shall default in the performance or
observance (beyond the applicable grace period with respect
thereto, if any) of any material obligation or condition of any
contract or lease material to the Borrower; or
(ii) With respect to any Indebtedness (other than
Indebtedness outstanding under this Credit Agreement) of the
Borrower in an aggregate principal amount in excess of $500,000,
(A) the Borrower shall (1) default in any payment (beyond the
applicable grace period with respect thereto, if any) with
respect to any such Indebtedness, or (2) default in the
observance or performance relating to such Indebtedness or
contained in any instrument or agreement evidencing, securing or
relating thereto, or any other event or condition shall occur or
condition exist, the effect of which default or other event or
condition is to cause, or permit, the holder or holders of such
Indebtedness (or trustee or Administrative Agent on behalf of
such holders) to cause (determined without regard to whether any
notice or lapse of time is required), any such Indebtedness to
become due prior to its stated maturity; or (B) any such
Indebtedness shall be declared due and payable, or required to be
prepaid other than by a regularly scheduled required prepayment,
prior to the stated maturity thereof; or
(h) Judgments. One or more judgments or decrees shall be entered
against the Borrower involving a liability of $500,000 or more in the
aggregate (to the extent not paid or fully covered by insurance provided
by a carrier who has acknowledged coverage and has
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the ability to perform) and any such judgments or decrees shall not have
been vacated, discharged or stayed or bonded pending appeal within 30
days from the entry thereof; or
(i) ERISA. Any of the following events or conditions, if such
event or condition could have a Material Adverse Effect: (i) any
"accumulated funding deficiency," as such term is defined in Section 302
of ERISA and Section 412 of the Code, whether or not waived, shall exist
with respect to any Plan, or any lien shall arise on the assets of the
Borrower or any ERISA Affiliate in favor of the PBGC or a Plan; (ii) an
ERISA Event shall occur with respect to a Single Employer Plan, which
is, in the reasonable opinion of the Administrative Agent, likely to
result in the termination of such Plan for purposes of Title IV of
ERISA; (iii) an ERISA Event shall occur with respect to a Multiemployer
Plan or Multiple Employer Plan, which is, in the reasonable opinion of
the Administrative Agent, likely to result in (A) the termination of
such Plan for purposes of Title IV of ERISA, or (B) the Borrower or any
ERISA Affiliate incurring any liability in connection with a withdrawal
from, reorganization of (within the meaning of Section 4241 of ERISA),
or insolvency (within the meaning of Section 4245 of ERISA) of such
Plan; or (iv) any prohibited transaction (within the meaning of Section
406 of ERISA or Section 4975 of the Code) or breach of fiduciary
responsibility shall occur which may subject the Borrower or any ERISA
Affiliate to any liability under Sections 406, 409, 502(i), or 502(l) of
ERISA or Section 4975 of the Code, or under any agreement or other
instrument pursuant to which the Borrower or any ERISA Affiliate has
agreed or is required to indemnify any person against any such
liability; or
(j) Ownership. There shall occur a Change of Control; or
(k) Nordstrom Credit Agreement. There shall occur an Event of
Default (as defined in the Nordstrom Credit Agreement) under the
Nordstrom Credit Agreement; or
(l) Cross Default. There shall occur a default or event of
default under (i) the Development Agreement, (ii) the Letter of Credit
Agreement, (iii) the Guaranty Agreement, (iv) the Ground Lease Agreement
or (v) any of the Transferable Development Rights Agreements.
8.2 ACCELERATION; REMEDIES.
Upon the occurrence of an Event of Default, and at any time thereafter
unless and until such Event of Default has been waived by the requisite Lenders
(pursuant to the voting requirements of Section 10.6) or cured to the
satisfaction of the requisite Lenders (pursuant to the voting procedures in
Section 10.6), the Administrative Agent shall, upon the request and direction of
the Required Lenders, by written notice to the Borrower take any of the
following actions:
(a) Termination of Commitments. Declare the Commitments
terminated whereupon the Commitments shall be immediately terminated.
(b) Acceleration. Declare the unpaid principal of and any accrued
interest in respect of all Loans and any and all other indebtedness or
obligations of any and every kind
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owing by the Borrower to the Administrative Agent and/or any of the
Lenders hereunder to be due whereupon the same shall be immediately due
and payable without presentment, demand, protest or other notice of any
kind, all of which are hereby waived by the Borrower.
(c) Enforcement of Rights. Enforce any and all rights and
interests created and existing under the Credit Documents including,
without limitation, all rights and remedies existing under the
Collateral Documents, all rights and remedies against the Guarantor and
all rights of set-off.
Notwithstanding the foregoing, (i) if an Event of Default specified in
Section 8.1(f) shall occur with respect to the Borrower or (ii) if an Event of
Default (as defined in the Guaranty Agreement) specified in Section 6.1(e) of
the Guaranty Agreement shall occur with respect to the Guarantor, then the
Commitments shall automatically terminate and all Loans, all accrued interest in
respect thereof, all accrued and unpaid Fees and other indebtedness or
obligations owing to the Administrative Agent and/or any of the Lenders
hereunder automatically shall immediately become due and payable without the
giving of any notice or other action by the Administrative Agent or the Lenders.
SECTION 9
AGENCY PROVISIONS
9.1 APPOINTMENT, POWERS AND IMMUNITIES.
(a) Each Lender hereby irrevocably appoints and authorizes (i) the
Administrative Agent to act as its Administrative Agent under this Credit
Agreement and the other Credit Documents and (ii) the Project Administrative
Agent to act as its project administrative agent under this Credit Agreement and
the other Credit Documents with such powers and discretion as are specifically
delegated to the Administrative Agent and the Project Administrative Agent
respectively by the terms of this Credit Agreement and the other Credit
Documents, together with such other powers as are reasonably incidental thereto.
The Administrative Agent (which term as used in this sentence and in Section 9.5
and the first sentence of Section 9.6 hereof shall include its Affiliates and
its own and its Affiliates' officers, directors, employees, and Administrative
Agents) and the Project Administrative Agent: (a) shall not have any duties or
responsibilities except those expressly set forth in this Credit Agreement and
shall not be a trustee or fiduciary for any Lender; (b) shall not be responsible
to the Lenders for any recital, statement, representation, or warranty (whether
written or oral) made in or in connection with any Credit Document or any
certificate or other document referred to or provided for in, or received by any
of them under, any Credit Document, or for the value, validity, effectiveness,
genuineness, enforceability, or sufficiency of any Credit Document, or any other
document referred to or provided for therein or for any failure by any Credit
Party or any other Person to perform any of its obligations thereunder; (c)
shall not be responsible for or have any duty to ascertain, inquire into, or
verify the performance or observance of any covenants or agreements by any
Credit Party or the satisfaction of any condition or to inspect the property
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(including the books and records) of any Credit Party or any of its Subsidiaries
or Affiliates; (d) shall not be required to initiate or conduct any litigation
or collection proceedings under any Credit Document; and (e) shall not be
responsible for any action taken or omitted to be taken by it under or in
connection with any Credit Document, except for its own gross negligence or
willful misconduct. The Agents may employ agents and attorneys-in-fact and shall
not be responsible for the negligence or misconduct of any such agents or
attorneys-in-fact selected by it with reasonable care.
(b) Each Lender hereby consents to and approves the terms of the
Guaranty Agreement. By execution hereof, the Lenders authorize and direct the
Administrative Agent to enter into the Guaranty Agreement on behalf of the
Lenders.
9.2 RELIANCE BY ADMINISTRATIVE AGENT.
The Agents shall be entitled to rely upon any certification, notice,
instrument, writing, or other communication (including, without limitation, any
thereof by telephone or telecopy) believed by it to be genuine and correct and
to have been signed, sent or made by or on behalf of the proper Person or
Persons, and upon advice and statements of legal counsel (including counsel for
any Credit Party), independent accountants, and other experts selected by the
Agents. The Administrative Agent may deem and treat the payee of any Note as the
holder thereof for all purposes hereof unless and until the Administrative Agent
receives and accepts an Assignment and Acceptance executed in accordance with
Section 10.3(b) hereof. As to any matters not expressly provided for by this
Credit Agreement, the Agents shall not be required to exercise any discretion or
take any action, but shall be required to act or to refrain from acting (and
shall be fully protected in so acting or refraining from acting) upon the
instructions of the Required Lenders, and such instructions shall be binding on
all of the Lenders; provided, however, that the Agents shall not be required to
take any action that exposes the Agents to personal liability or that is
contrary to any Credit Document or applicable law or unless it shall first be
indemnified to its satisfaction by the Lenders against any and all liability and
expense which may be incurred by it by reason of taking any such action.
9.3 DEFAULTS.
An Agent shall not be deemed to have knowledge or notice of the
occurrence of a Default or Event of Default unless such Agent has received
written notice from a Lender or a Credit Party specifying such Default or Event
of Default and stating that such notice is a "Notice of Default". In the event
that the Administrative Agent receives such a notice of the occurrence of a
Default or Event of Default, the Administrative Agent shall give prompt notice
thereof to the Lenders. The Administrative Agent shall (subject to Section 8.2
hereof) take such action with respect to such Default or Event of Default as
shall reasonably be directed by the Required Lenders (or such other Lenders as
required by Section 10.6), provided that, unless and until the Administrative
Agent shall have received such directions, the Administrative Agent may (but
shall not be obligated to) take such action, or refrain from taking such action,
with respect to such Default or Event of Default as it shall deem advisable in
the best interest of the Lenders.
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9.4 RIGHTS AS A LENDER.
With respect to its Commitment and the Loans made by it, Bank of America
(and any successor acting as the Administrative Agent) in its capacity as a
Lender hereunder shall have the same rights and powers hereunder as any other
Lender and may exercise the same as though it were not acting as the
Administrative Agent, and the term "Lender" or "Lenders" shall, unless the
context otherwise indicates, include the Administrative Agent in its individual
capacity. Bank of America (and any successor acting as Administrative Agent) and
its Affiliates may (without having to account therefor to any Lender) accept
deposits from, lend money to, make investments in, provide services to, and
generally engage in any kind of lending, trust, or other business with any
Credit Party or any of its Subsidiaries or Affiliates as if it were not acting
as Administrative Agent, and Bank of America (and any successor acting as
Administrative Agent) and its Affiliates may accept fees and other consideration
from any Credit Party or any of its Subsidiaries or Affiliates for services in
connection with this Credit Agreement or otherwise without having to account for
the same to the Lenders.
9.5 INDEMNIFICATION.
The Lenders agree to indemnify the Agents (to the extent not reimbursed
under Section 10.5 hereof, but without limiting the obligations of the Credit
Parties under such Section) ratably (in accordance with their respective (i)
Revolving Commitments (or, if the Revolving Commitments have been terminated,
the outstanding Revolving Loans) for any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses
(including attorneys' fees), or disbursements of any kind and nature whatsoever
that may be imposed on, incurred by or asserted against an Agent (including by
any Lender) in any way relating to or arising out of any Credit Document or the
transactions contemplated thereby or any action taken or omitted by an Agent
under any Credit Document: provided that no Lender shall be liable for any of
the foregoing to the extent they arise from the gross negligence or willful
misconduct of the Person to be indemnified. Without limitation of the foregoing,
each Lender agrees to reimburse an Agent promptly upon demand for its ratable
share of any costs or expenses payable by the Credit Parties under Section 10.5
and Section 6.6, to the extent that such Agent is not promptly reimbursed for
such costs and expenses by the Credit Parties. The agreements in this Section
9.5 shall survive the repayment of the Loans and other obligations under the
Credit Documents and the termination of the Commitments hereunder.
9.6 NON-RELIANCE ON AGENTS AND OTHER LENDERS.
Each Lender agrees that it has, independently and without reliance on
the Agents or any other Lender, and based on such documents and information as
it has deemed appropriate, made its own credit analysis of the Credit Parties
and their Subsidiaries and decision to enter into this Credit Agreement and that
it will, independently and without reliance upon the Agents or any other Lender,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under the Credit Documents. Except for notices, reports, and other
documents and information expressly required to be furnished to the Lenders by
an Agent hereunder, the Agents shall not have any duty or responsibility to
provide any Lender with any credit or other information concerning the
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affairs, financial condition, or business of any Credit Party or any of its
Subsidiaries or Affiliates that may come into the possession of any Agent or any
of its Affiliates.
9.7 SUCCESSOR AGENTS.
An Agent may resign at any time by giving notice thereof to the Lenders
and the Credit Parties. An Agent may be removed at any time for cause by written
action of the Required Lenders delivered to such Agent. Upon any such
resignation or removal, the Required Lenders and, unless a Default or Event of
Default has occurred and is continuing, the Borrower shall have the right to
appoint a successor Administrative Agent or Project Administrative Agent, as
applicable. If no successor Administrative Agent shall have been so appointed
within thirty (30) days after the retiring Administrative Agent's giving of
notice of resignation or removal of the Administrative Agent, then the retiring
or removed Administrative Agent may, on behalf of the Lenders, appoint a
successor Administrative Agent which shall be a commercial bank organized under
the laws of the United States having combined capital and surplus of at least
$100,000,000. Upon the acceptance of any appointment as Administrative Agent
hereunder by a successor, such successor shall thereupon succeed to and become
vested with all the rights, powers, discretion, privileges, and duties of the
retiring or removed Administrative Agent, and the retiring or removed
Administrative Agent shall be discharged from its duties and obligations
hereunder. If no successor Administrative Agent has accepted appointment as
Administrative Agent within thirty (30) days after the retiring Administrative
Agent's giving notice of resignation or removal of the Administrative Agent, the
retiring Administrative Agent's resignation or removal shall nevertheless become
effective, and the Lenders shall perform all duties of the Administrative Agent
hereunder until such time, if any, as the Required Lenders and, unless a Default
or Event of Default has occurred and is continuing, the Borrower appoint a
successor Administrative Agent as provided above. If no successor Project
Administrative Agent shall have been so appointed by the Required Lenders within
thirty (30) days after the retiring Project Administrative Agent's giving of
notice of resignation or removal of the Project Administrative Agent, then the
retiring or removed Project Administrative Agent may, on behalf of the Lenders,
appoint a successor Project Administrative Agent which shall be a commercial
bank organized under the laws of the United States having combined capital and
surplus of at least $100,000,000. Upon the acceptance of any appointment as
Project Administrative Agent hereunder by a successor, such successor shall
thereupon succeed to and become vested with all the rights, powers, discretion
and duties of the retiring or removed Project Administrative Agent, and the
retiring or removed Project Administrative Agent shall be discharged from its
duties and obligations hereunder. If no successor Project Administrative Agent
has accepted appointment as Project Administrative Agent within thirty (30) days
after the retiring Project Administrative Agent's giving notice of resignation
or removal of the Project Administrative Agent, the retiring Project
Administrative Agent's resignation or removal shall nevertheless become
effective, and the Lenders shall perform all duties of the Project
Administrative Agent hereunder until such time, if any, as the Required Lenders
and, unless a Default or Event of Default has occurred and is continuing, the
Borrower shall appoint a successor Project Administrative Agent as provided
above. Upon any retiring Agent's resignation or removal, the provisions of this
Section 9 shall continue in effect for its benefit in respect of any actions
taken or omitted to be taken by it while it was acting as an Agent.
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SECTION 10
MISCELLANEOUS
10.1 NOTICES.
Except as otherwise expressly provided herein, all notices and other
communications shall have been duly given and shall be effective (a) when
delivered, (b) when transmitted via telecopy (or other facsimile device) to the
number set out below, (c) the Business Day following the day on which the same
has been delivered prepaid to a reputable national overnight air courier
service, or (d) the third Business Day following the day on which the same is
sent by certified or registered mail, postage prepaid, in each case to the
respective parties at the address, in the case of the Credit Parties and the
Administrative Agent, set forth below, and, in the case of the Lenders, set
forth on Schedule 2.1(a), or at such other address as such party may specify by
written notice to the other parties hereto:
if to the Borrower:
1700 Seventh L.P.
c/x Xxxxx Venture One LLC
0000 Xxxxx Xxxxxx, Xxxxx #000
Xxxxxxx, Xxxxxxxxxx 00000
Attn: A.M. Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
with a copy to:
Nordstrom, Inc.
0000 0xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
if to the Guarantor:
Nordstrom, Inc.
0000 0xx Xxxxxx
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Chief Financial Officer
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
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if to the Project Administrative Agent:
Bank of America, N.A.
000 Xxxxx Xxxxxx, 00xx Xxxxx
Mail Code WA1-102-15-01
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
if to the Administrative Agent:
Bank of America, N.A.
0000 Xxxxxxx Xxxx., 0xx Xxxxx
Mail Code CA4-706-05-09
Xxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
with a copy to:
Bank of America, N.A.
000 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Mail Code: CA5-705-41-89
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attn: Xxxxx Xxxxxxx
Telephone: (000) 000-0000
Facsimile: (000) 000-0000
10.2 RIGHT OF SET-OFF; ADJUSTMENTS.
Upon the occurrence and during the continuance of any Event of Default,
each Lender is hereby authorized at any time and from time to time, to the
fullest extent permitted by law, to set off and apply any and all deposits
(general or special, time or demand, provisional or final) at any time held and
other indebtedness at any time owing by such Lender (or any of its Affiliates)
to or for the credit or the account of the Borrower against any and all of the
obligations of the Borrower now or hereafter existing under this Credit
Agreement, under the Notes, under any other Credit Document or otherwise,
irrespective of whether such Lender shall have made any demand hereunder or
thereunder and although such obligations may be unmatured. Each Lender agrees
promptly to notify the Borrower after any such set-off and application made by
such Lender; provided, however, that the failure to give such notice shall not
affect the validity of such set-off and application. The rights of each Lender
under this Section 10.2 are in addition to other rights and remedies (including,
without limitation, other rights of set-off) that such Lender may have.
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10.3 BENEFIT OF AGREEMENT; ASSIGNMENTS.
(a) This Credit Agreement shall be binding upon and inure to the
benefit of and be enforceable by the respective successors and assigns
of the parties hereto; provided that the Borrower may not assign or
transfer any of its interests and obligations without prior written
consent of each of the Lenders; provided further that the rights of each
Lender to transfer, assign or grant participations in its rights and/or
obligations hereunder shall be limited as set forth in this Section
10.3.
(b) Each Lender may assign to one or more Eligible Assignees all
or a portion of its rights and obligations under this Credit Agreement
(including, without limitation, all or a portion of its Loans, its
Notes, and its Commitment); provided, however, that
(i) each such assignment shall be to an Eligible Assignee and
subject to the restrictions contained in the definition of
"Eligible Assignee";
(ii) except in the case of an assignment to another Lender,
an Affiliate of an existing Lender or any fund that invests in
bank loans and is advised or managed by an investment advisor to
an existing Lender or an assignment of all of a Lender's rights
and obligations under this Credit Agreement, any such partial
assignment shall be in an amount at least equal to $5,000,000
(or, if less, the remaining amount of the Commitment being
assigned by such Lender) or an integral multiple of $1,000,000 in
excess thereof; and
(iii) the parties to such assignment shall execute and
deliver to the Administrative Agent for its acceptance an
Assignment and Acceptance in the form of Exhibit 10.3(b) hereto,
together with any Note subject to such assignment and a
processing fee of $3,500.
Upon execution, delivery, and acceptance of such Assignment and
Acceptance, the assignee thereunder shall be a party hereto and, to the
extent of such assignment, have the obligations, rights, and benefits of
a Lender hereunder and the assigning Lender shall, to the extent of such
assignment, relinquish its rights and be released from its obligations
under this Credit Agreement. Upon the consummation of any assignment
pursuant to this Section 10.3(b), the assignor, the Administrative Agent
and the Borrower shall make appropriate arrangements so that, if
required, new Notes are issued to the assignor and the assignee. If the
assignee is not a United States person under Section 7701(a)(30) of the
Code, it shall deliver to the Borrower and the Administrative Agent
certification as to exemption from deduction or withholding of Taxes in
accordance with Section 3.11.
(c) The Administrative Agent shall maintain at its address
referred to in Section 10.1 a copy of each Assignment and Acceptance
delivered to and accepted by it and a register for the recordation of
the names and addresses of the Lenders and the Commitment of, and
principal amount of the Loans owing to, each Lender from time to time
(the "Register"). The entries in the Register shall be conclusive and
binding for all purposes, absent manifest error, and the Credit Parties,
the Administrative Agent and the
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Lenders may treat each Person whose name is recorded in the Register as
a Lender hereunder for all purposes of this Credit Agreement. The
Register shall be available for inspection by the Credit Parties or any
Lender at any reasonable time and from time to time upon reasonable
prior notice. Any assignment of any Loan or other Credit Party
Obligations shall be effective only upon an entry with respect thereto
being made in the Register.
(d) Upon its receipt of an Assignment and Acceptance executed by
the parties thereto, together with any Note subject to such assignment
and payment of the processing fee, the Administrative Agent shall, if
such Assignment and Acceptance has been completed and is in
substantially the form of Exhibit 10.3(b) hereto, (i) accept such
Assignment and Acceptance, (ii) record the information contained therein
in the Register and (iii) give prompt notice thereof to the parties
thereto.
(e) Each Lender may sell participations to one or more Persons in
all or a portion of its rights, obligations or rights and obligations
under this Credit Agreement (including all or a portion of its
Commitment or its Loans); provided, however, that (i) such Lender's
obligations under this Credit Agreement shall remain unchanged, (ii)
such Lender shall remain solely responsible to the other parties hereto
for the performance of such obligations, (iii) the participant shall be
entitled to the benefit of the yield protection provisions contained in
Sections 3.7 through 3.12, inclusive (but only to the extent that the
costs of the Borrower resulting from such benefit does not exceed the
costs which the Borrower would have incurred in respect of such Lender
absent the participation), and the right of set-off contained in Section
10.2, and (iv) the Credit Parties shall continue to deal solely and
directly with such Lender in connection with such Lender's rights and
obligations under this Credit Agreement, and such Lender shall retain
the sole right to enforce the obligations of the Credit Parties relating
to the Credit Party Obligations owing to such Lender and to approve any
amendment, modification, or waiver of any provision of this Credit
Agreement (other than amendments, modifications, or waivers decreasing
the amount of principal of or the rate at which interest is payable on
such Loans or Notes, extending any scheduled principal payment date or
date fixed for the payment of interest on such Loans or Notes, or
extending its Commitment).
(f) Notwithstanding any other provision set forth in this Credit
Agreement, any Lender may at any time assign and pledge all or any
portion of its Loans and its Notes to any Federal Reserve Bank as
collateral security pursuant to Regulation A and any Operating Circular
issued by such Federal Reserve Bank. No such assignment shall release
the assigning Lender from its obligations hereunder.
(g) Any Lender may furnish any information concerning the Credit
Parties in the possession of such Lender from time to time to assignees
and participants (including prospective assignees and participants),
subject, however, to the provisions of Section 10.14 hereof.
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10.4 NO WAIVER; REMEDIES CUMULATIVE.
No failure or delay on the part of the Administrative Agent or any
Lender in exercising any right, power or privilege hereunder or under any other
Credit Document and no course of dealing between the Administrative Agent or any
Lender and any of the Credit Parties shall operate as a waiver thereof; nor
shall any single or partial exercise of any right, power or privilege hereunder
or under any other Credit Document preclude any other or further exercise
thereof or the exercise of any other right, power or privilege hereunder or
thereunder. The rights and remedies provided herein are cumulative and not
exclusive of any rights or remedies which the Administrative Agent or any Lender
would otherwise have. No notice to or demand on any Credit Party in any case
shall entitle the Credit Parties to any other or further notice or demand in
similar or other circumstances (except as specifically required by the Credit
Documents), or constitute a waiver of the rights of the Administrative Agent or
the Lenders to any other or further action in any circumstances without notice
or demand.
10.5 EXPENSES; INDEMNIFICATION.
(a) The Borrower agrees to pay on demand all costs and expenses
of the Agents in connection with the syndication, preparation,
execution, delivery, administration, modification, and amendment of this
Credit Agreement, the other Credit Documents, and the other documents to
be delivered hereunder, including, without limitation, the reasonable
fees and expenses of counsel for the Agents (including the cost of
internal counsel) with respect thereto and with respect to advising the
Agents as to their rights and responsibilities under the Credit
Documents. The Borrower further agrees to pay on demand all costs and
expenses of the Agents and the Lenders, if any (including, without
limitation, reasonable attorneys' fees and expenses and the cost of
internal counsel), in connection with the enforcement (whether through
negotiations, legal proceedings, or otherwise) of the Credit Documents
and the other documents to be delivered hereunder.
(b) The Borrower shall indemnity, defend and hold harmless the
Agents and each Lender and each of their Affiliates and the officers,
directors, employees, agents, attorneys, affiliates, successors and
assigns of the Agents and each Lender and each of their Affiliates
(collectively, the "Indemnitees") from and against (i) any and all
transfer taxes, documentary taxes, assessments or charges made by any
Governmental Authority by reason of the execution and delivery of the
Credit Documents or the making of the Loans (provided that any Lender
claiming any additional amounts payable pursuant to this Section
10.5(b)(i) shall use reasonable efforts (consistent with its internal
policy and legal and regulatory restrictions) to change the jurisdiction
of its Applicable Lending Office if the making of such a change would
avoid the need for, or reduce the amount of, any such additional amounts
that may thereafter accrue and would not, in the reasonable judgment of
such Lender, be otherwise disadvantageous to such Lender), and (ii) any
and all liabilities, losses, damages, penalties, judgments, claims,
costs and expenses of any kind or nature whatsoever (including
reasonable attorneys' fees, including allocated costs of in-house
counsel, and disbursements in connection with any actual or threatened
investigative, administrative or judicial proceeding, whether or not
such Indemnitee shall
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be designated a party thereto) that may be imposed on, incurred by or
asserted against such Indemnitee, in any manner relating to or arising
out of the Credit Documents, the Loans, or the use or intended use of
the proceeds of the Loans (the "Indemnified Liabilities"); provided that
no Indemnitee shall have the right to be indemnified or held harmless
hereunder for its own gross negligence, or willful misconduct, as
determined by a final judgment of a court of competent jurisdiction. The
Borrower agrees not to assert any claim against the Agents, any Lender,
any of their Affiliates, or any of their respective directors, officers,
employees, attorneys, agents, and advisers, on any theory of liability,
for special, indirect, consequential, or punitive damages arising out of
or otherwise relating to the Credit Documents, any of the transactions
contemplated herein or the actual or proposed use of the proceeds of the
Loans.
(c) To the extent that the undertaking to indemnify and hold
harmless set forth in this Section 10.5 may be unenforceable as
violative of any applicable law or public policy, the Borrower shall
make the maximum contribution to the payment and satisfaction of each of
the Indemnified Liabilities that is permissible under applicable law.
All Indemnified Liabilities shall be payable on demand.
(d) Without prejudice to the survival of any other agreement of
the Borrower hereunder, the agreements and obligations of the Borrower
contained in this Section 10.5 shall survive the repayment of the Loans
and other obligations under the Credit Documents and the termination of
the Commitments hereunder.
10.6 AMENDMENTS, WAIVERS AND CONSENTS.
Neither this Credit Agreement nor any other Credit Document nor any of
the terms hereof or thereof may be amended, changed, waived, discharged or
terminated unless such amendment, change, waiver, discharge or termination is in
writing entered into by, or approved in writing by, the Required Lenders and the
Credit Parties, provided, however, that:
(a) without the consent of each Lender affected thereby, neither
this Credit Agreement nor any other Credit Document may be amended to
(i) extend the final maturity of any Loan or any portion
thereof,
(ii) reduce the rate or extend the time of payment of
interest (other than as a result of waiving the applicability of
any post-default increase in interest rates) thereon or Fees
hereunder,
(iii) reduce or waive the principal amount of any Loan,
(iv) increase the Commitment of a Lender over the amount
thereof in effect (it being understood and agreed that a waiver
of any Default or Event of Default or mandatory reduction in the
Commitments shall not constitute a change in the terms of any
Commitment of any Lender),
(v) release all or substantially all of the Collateral;
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(vi) release the Borrower or the Guarantor from its or their
obligations under the Credit Documents,
(vii) amend, modify or waive any provision of this Section
10.6 or Section 3.6, 3.7, 3.8, 3.9, 3.10, 3.11, 3.12, 3.13, 3.14,
3.15, 8.1(a), 10.2, 10.3, 10.5 or 10.9,
(viii) reduce any percentage specified in, or otherwise
modify, the definition of Required Lenders, or
(ix) consent to the assignment or transfer by the Borrower or
the Guarantor of any of its or their rights and obligations under
(or in respect of) the Credit Documents except as permitted
thereby; and
(b) without the consent of the Administrative Agent, no provision
of Section 10 may be amended.
Notwithstanding the fact that the consent of all the Lenders is required in
certain circumstances as set forth above, (x) each Lender is entitled to vote as
such Lender sees fit on any bankruptcy reorganization plan that affects the
Loans, and each Lender acknowledges that the provisions of Section 1126(c) of
the Bankruptcy Code supersedes the unanimous consent provisions set forth herein
and (y) the Required Lenders may consent to allow a Credit Party to use cash
collateral in the context of a bankruptcy or insolvency proceeding.
10.7 COUNTERPARTS.
This Credit Agreement may be executed in any number of counterparts,
each of which when so executed and delivered shall be an original, but all of
which shall constitute one and the same instrument. It shall not be necessary in
making proof of this Credit Agreement to produce or account for more than one
such counterpart for each of the parties hereto. Delivery by facsimile by any of
the parties hereto of an executed counterpart of this Credit Agreement shall be
as effective as an original executed counterpart hereof and shall be deemed a
representation that an original executed counterpart hereof will be delivered.
10.8 HEADINGS.
The headings of the sections and subsections hereof are provided for
convenience only and shall not in any way affect the meaning or construction of
any provision of this Credit Agreement.
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10.9 SURVIVAL.
All indemnities set forth herein, including, without limitation, in
Section 2.2(i), 3.11, 3.12, 9.5 or 10.5 shall survive the execution and delivery
of this Credit Agreement, the making of the Loans, the repayment of the Loans
and other obligations under the Credit Documents and the termination of the
Commitments hereunder, and all representations and warranties made by the Credit
Parties herein or in any of the other Credit Documents shall survive delivery of
the Notes and the making of the Loans hereunder.
10.10 GOVERNING LAW; SUBMISSION TO JURISDICTION; VENUE.
(a) THIS CREDIT AGREEMENT AND, UNLESS OTHERWISE EXPRESSLY
PROVIDED THEREIN, THE OTHER CREDIT DOCUMENTS AND THE RIGHTS AND
OBLIGATIONS OF THE PARTIES HEREUNDER AND THEREUNDER SHALL BE GOVERNED BY
AND CONSTRUED AND INTERPRETED IN ACCORDANCE WITH THE LAWS OF THE STATE
OF WASHINGTON. Any legal action or proceeding with respect to this
Credit Agreement or any other Credit Document may be brought in the
courts of the State of Washington in King County, or of the United
States for the Western District of Washington, and, by execution and
delivery of this Credit Agreement, the Borrower hereby irrevocably
accepts for itself and in respect of its property, generally and
unconditionally, the nonexclusive jurisdiction of such courts. Nothing
herein shall affect the right of the Administrative Agent or any Lender
to serve process in any manner permitted by law or to commence legal
proceedings or to otherwise proceed against the Borrower in any other
jurisdiction.
(b) The Borrower hereby irrevocably waives any objection which it
may now or hereafter have to the laying of venue of any of the aforesaid
actions or proceedings arising out of or in connection with this Credit
Agreement or any other Credit Document brought in the courts referred to
in subsection (a) above and hereby further irrevocably waives and agrees
not to plead or claim in any such court that any such action or
proceeding brought in any such court has been brought in an inconvenient
forum.
(c) TO THE EXTENT PERMITTED BY LAW, EACH OF THE ADMINISTRATIVE
AGENT, THE LENDERS, AND THE BORROWER HEREBY IRREVOCABLY WAIVES ALL RIGHT
TO TRIAL BY JURY IN ANY ACTION, PROCEEDING OR COUNTERCLAIM ARISING OUT
OF OR RELATING TO THIS CREDIT AGREEMENT, ANY OF THE OTHER CREDIT
DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY.
10.11 SEVERABILITY.
If any provision of any of the Credit Documents is determined to be
illegal, invalid or unenforceable, such provision shall be fully severable and
the remaining provisions shall remain in full force and effect and shall be
construed without giving effect to the illegal, invalid or unenforceable
provisions.
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10.12 ENTIRETY.
This Credit Agreement together with the other Credit Documents represent
the entire agreement of the parties hereto and thereto, and supersede all prior
agreements and understandings, oral or written, if any, including any commitment
letters or correspondence relating to the Credit Documents or the transactions
contemplated herein and therein.
10.13 BINDING EFFECT.
This Credit Agreement shall become effective at such time on or after
the Closing Date when it shall have been executed by the Borrower and the
Administrative Agent, and the Administrative Agent shall have received copies
hereof (telefaxed or otherwise) which, when taken together, bear the signatures
of each Lender, and thereafter this Credit Agreement shall be binding upon and
inure to the benefit of the Borrower, the Administrative Agent and each Lender
and their respective successors and assigns; provided, however, unless the
conditions set forth in Section 4.2 have been satisfied by the Borrower on or
before Xxxxx 00, 0000, xxxx of the Administrative Agent, the Project
Administrative Agent or the Lenders shall have any obligations under the Credit
Agreement.
10.14 CONFIDENTIALITY.
The Administrative Agent and each Lender (each, a "Lending Party")
agrees to keep confidential any information furnished or made available to it by
the Credit Parties pursuant to this Credit Agreement that is marked
confidential; provided that nothing herein shall prevent any Lending Party from
disclosing such information (a) to any other Lending Party or any Affiliate of
any Lending Party, or any officer, director, employee, Administrative Agent, or
advisor of any Lending Party or Affiliate of any Lending Party, (b) to any other
Person if reasonably incidental to the administration of the Loans, (c) as
required by any law, rule, or regulation, (d) upon the order of any court or
administrative agency, (e) upon the request or demand of any regulatory agency
or authority, (f) that is or becomes available to the public or that is or
becomes available to any Lending Party other than as a result of a disclosure by
any Lending Party prohibited by this Credit Agreement, (g) in connection with
any litigation to which such Lending Party or any of its Affiliates may be a
party, (h) to the extent necessary in connection with the exercise of any remedy
under this Credit Agreement or any other Credit Document, (i) to the National
Association of Insurance Commissioners or any similar organization or any
nationally recognized rating agency that requires access to information about a
Lender's investment portfolio in connection with ratings issued with respect to
such Lender, (j) to any direct or indirect contractual counterparty in swap
agreements or such contractual counterparty's professional advisor (so long as
such contractual counterparty or professional advisor to such contractual
counterparty (i) has been approved in writing by the Borrower and (ii) agrees in
a writing enforceable by the Borrower to be bound by the provisions of this
Section 10.14) and (k) subject to provisions substantially similar to those
contained in this Section 10.14, to any actual or proposed participant or
assignee.
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10.15 SOURCE OF FUNDS.
Each of the Lenders hereby represents and warrants to the Borrower that
at least one of the following statements is an accurate representation as to the
source of funds to be used by such Lender in connection with the financing
hereunder:
(a) no part of such funds constitutes assets allocated to any
separate account maintained by such Lender in which any employee benefit
plan (or its related trust) has any interest;
(b) to the extent that any part of such funds constitutes assets
allocated to any separate account maintained by such Lender, such Lender
has disclosed to the Borrower the name of each employee benefit plan
whose assets in such account exceed 10% of the total assets of such
account as of the date of such purchase (and, for purposes of this
subsection (b), all employee benefit plans maintained by the same
employer or employee organization are deemed to be a single plan);
(c) to the extent that any part of such funds constitutes assets
of an insurance company's general account, such insurance company has
complied with all of the requirements of the regulations issued under
Section 401(c)(1)(A) of ERISA; or
(d) such funds constitute assets of one or more specific benefit
plans which such Lender has identified in writing to the Borrower.
As used in this Section 10.15, the terms "employee benefit plan" and "separate
account" shall have the respective meanings assigned to such terms in Section 3
of ERISA. Nothing contained in this Section 10.15 shall be deemed a consent by
the Borrower to an assignment by a Lender of its rights and obligations under
this Credit Agreement.
10.16 CONFLICT.
To the extent that there is a conflict or inconsistency between any
provision hereof, on the one hand, and any provision of any Credit Document, on
the other hand, this Credit Agreement shall control.
10.17 ORAL AGREEMENTS NOT BINDING.
ORAL AGREEMENTS OR ORAL COMMITMENTS TO LOAN MONEY, EXTEND CREDIT OR
FORBEAR FROM ENFORCING REPAYMENT OF A DEBT ARE NOT ENFORCEABLE UNDER WASHINGTON
LAW.
[Signature Page to Follow]
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IN WITNESS WHEREOF, each of the parties hereto has caused a counterpart
of this Credit Agreement to be duly executed and delivered as of the date first
above written.
BORROWER: 1700 SEVENTH L.P., a Washington limited partnership
--------
By: XXXXX VENTURE ONE LLC, a Washington limited
liability company, its sole general partner
By: XXXXX PROPERTIES, INC., a Washington
corporation, its authorized member
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
LENDERS: BANK OF AMERICA, N.A., individually in its
capacity as a Lender, in its capacity as
Administrative Agent and in its capacity as Project
Administrative Agent
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
XXXXX FARGO BANK, NATIONAL ASSOCIATION
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
BANK ONE, NA (MAIN OFFICE-CHICAGO)
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
90
U.S. BANK
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
KEYBANK NATIONAL ASSOCIATION
By:
-----------------------------------------------
Name:
---------------------------------------------
Title:
---------------------------------------------
91
SCHEDULE 4.3
Capitalized terms used in this Schedule 4.3 and not otherwise defined
shall have the meanings given to them in the Credit Agreement. In addition to
the terms of Section 2.1 and Section 4.3 of the Credit Agreement, each Revolving
Loan advance under the Credit Agreement, and the disbursement of any equity or
other funds deposited with the Project Administrative Agent pursuant to the
terms of this Schedule 4.3 (collectively the "Funds") shall be subject to the
following terms and provisions:
(a) General Conditions to Disbursements. Each disbursement of Funds at
the request of the Borrower is subject to the following general conditions:
(i) Neither the Improvements nor any other part of the Project shall
have been materially damaged by fire or other casualty, and there shall be no
eminent domain or condemnation proceeding pending or threatened against the
Project. This condition shall be deemed satisfied if the Borrower has satisfied
the conditions to the use of insurance and condemnation proceeds set forth in
Sections 6.6 and 6.13 of the Credit Agreement.
(ii) Upon completion of the foundations of the Improvements, the
Administrative Agent shall have received a foundation endorsement to the
Mortgage Policy, in form and content acceptable to the Administrative Agent,
showing no encroachments of the foundations onto other property.
(iii) The Project Administrative Agent must be satisfied that the
Revolving Loans are "in balance" pursuant to subparagraph (e) below, or the
Borrower must have deposited the additional Funds with the Project
Administrative Agent required pursuant to such subparagraph (e).
(iv) The Lenders are not prohibited from disbursing Funds under any
applicable lien laws or stop notice statutes or otherwise except to the extent
that such Funds are withheld as provided in subparagraph (b) below.
(v) No legal or administrative proceeding challenging the validity
of or seeking to enjoin, set aside, review or otherwise challenge any
governmental permit or approval applicable to the Project shall be pending or
threatened.
Unless all the foregoing conditions of subsection (a) are met to the
Project Administrative Agent's satisfaction, neither the Lenders, nor the
Administrative Agent, nor the Project Administrative Agent shall have any
obligation to make any disbursement of Funds requested by the Borrower; however,
the Required Lenders may elect to make an advance of the Funds notwithstanding
that any one or more of the foregoing conditions is not satisfied, and by doing
so they shall not be deemed to have waived the right to require the satisfaction
of any such conditions with respect to any other advance of the Funds. The
proceeds of the Revolving Loans and other Funds will be deposited in the Deposit
Account and from which any payments that the Borrower is required to make will
be automatically withdrawn.
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(b) Disbursements for Construction Costs.
(i) The Borrower may request disbursements of Funds to pay direct
construction costs provided for in the Project Budget once a month. All requests
for payment of the Construction Costs specified in the Project Budget shall be
pursuant to a draw request ("Draw Request") submitted to the Project
Administrative Agent. Each Draw Request shall be on an AIA form of Application
and Certificate for Payment (or other form approved by the Project
Administrative Agent), signed by the general contractor, the Borrower and the
project architect, as required by the Project Administrative Agent. Subject to
the conditions set forth in Sections 2.1 and 4.3 of the Credit Agreement, and
the other conditions to disbursement set forth in this Schedule 4.3, Revolving
Loan advances shall be made after the Project Administrative Agent's receipt and
approval of the Draw Request and any supplementary documentation or information
required by the Project Administrative Agent in accordance with the terms of the
Credit Agreement and this Schedule 4.3. The Project Administrative Agent agrees
that it will review the Draw Request and any supplemental documentation or
information required by the Project Administrative Agent and make a
determination as to whether such Draw Request and other documentation or
information are acceptable to the Project Administrative Agent within seven (7)
Business Days of receipt of such items. The Project Administrative Agent
additionally agrees that it will immediately notify the Borrower of its approval
of any Draw Request and related materials. The Project Administrative Agent
agrees that it will provide copies of any Draw Request or any other supplemental
documentation or information provided to the Project Administrative Agent in
accordance with this Schedule 4.3 to any Lender which requests copies of any
such Draw Request, documentation or information. The Project Administrative
Agent also agrees to provide a copy of the Project Budget to any Lender which
requests a copy of the Project Budget.
(ii) Unless otherwise agreed in writing by the Project
Administrative Agent, each Draw Request shall be accompanied by the following,
all of which must be acceptable to the Project Administrative Agent in its
reasonable discretion (l) a Certificate of Job Progress signed by the Borrower
and the general contractor stating the percentage of the Project completed
through the date payment is requested; (2) if requested by the Project
Administrative Agent, invoices (or other reasonable evidence) substantiating the
Construction Costs covered by the Draw Request; and (3) executed acknowledgments
of payment and releases of liens (through the date covered by the immediately
preceding monthly advance) from the general contractor and, if required by the
Project Administrative Agent, from all laborers, subcontractors and materialmen
performing labor or services or supplying materials in connection with the
Project ("Subcontractors").
(iii) The Project Administrative Agent will withhold from each
advance for Construction Costs an amount (the "Retention") equal to five percent
(5%) of the amount of the Construction Costs for which disbursement is
requested. The amount of the Retention shall be held by the Project
Administrative Agent until the conditions for final advance set forth below are
satisfied. If a disbursement is requested to pay for materials stored off-site,
prior to making the disbursement, the Project Administrative Agent must receive
(1) a copy of a xxxx of sale or other acceptable evidence establishing that such
materials were purchased free and clear of liens and encumbrances and not
pursuant to a conditional sales contract, (2) evidence the materials are
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stored at a suitable location acceptable to the Project Administrative Agent,
and are insured against damage or destruction for the full insurable value under
a policy of insurance which names the Administrative Agent as an additional loss
payee on behalf of the Lenders, and (3) evidence the materials are segregated
from materials and equipment not intended to be incorporated into the Project.
(iv) In the event the Project Administrative Agent receives a notice
of a potential lien pursuant to RCW 60.04.221, to the extent there is not bond
in place for such item pursuant to either RCW 60.04.161 or RCW 60.04.221, the
Project Administrative Agent shall withhold from the next and subsequent draws
the amount claimed to be due as stated in the notice. Sums so withheld shall not
be disbursed by the Project Administrative Agent, except by the written
agreement of the potential lien claimant owner, and prime contractor in such
form as may be prescribed by the Project Administrative Agent, or the order of a
court of competent jurisdiction, but the Project Administrative Agent shall not
otherwise refuse to allow a Draw Request on the basis of such a notice.
(v) The Project Administrative Agent shall have no obligation to
approve a Draw Request for the payment of Construction Costs if (a) the
percentage of Construction Costs in the Project Budget which has already been
disbursed is greater than the percentage of completion of the Project, as
certified to the Project Administrative Agent in any Certificate of Job Progress
and verified by the Project Administrative Agent or the Consultant; or (b) the
percentage of any Construction Cost line item in the then current Project Budget
which is already paid out is greater than the percentage of completion of that
line item.
(c) Disbursements for Other Costs.
(i) Interest. If there is an interest reserve in the Project Budget,
prior to completion of Improvements (and after completion of the Improvements to
the extent the Net Operating Income is insufficient to pay interest due on the
Revolving Loans), the Project Administrative Agent will make monthly
disbursements of Funds from the interest reserve set forth in the Project Budget
to pay interest on the Revolving Loans. If in the Project Administrative Agent's
reasonable opinion, the undisbursed amount of the interest reserve in the
Project Budget (plus any anticipated Net Operating Income) is not sufficient to
pay interest on the Revolving Loans as it comes due under the Credit Agreement,
the Borrower shall pay the interest from its own monies (not Revolving Loan
proceeds or other Funds) in accordance with Section 2.1 of the Credit Agreement
or shall deposit additional funds with the Project Administrative Agent to be
added to the interest reserve, at the Project Administrative Agent's option. The
foregoing is not intended to alter or limit the Borrower's obligation to make
the interest payments on the Revolving Loans as required by Section 2.1 of the
Credit Agreement if the interest reserve is not adequate or if the Project
Administrative Agent otherwise is not required to make such disbursements.
(ii) Non-Construction Costs. The Borrower may from time to time
request the disbursement of Funds to pay costs other than Construction Costs if
such other costs are included in the Project Budget, and the disbursement
request is otherwise approved by the Project Administrative Agent. With each
request, the Borrower will provide the Project Administrative
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Agent with such evidence as the Project Administrative Agent may require
verifying the amount and purpose of the costs for which disbursement is
requested. Prior to disbursing Funds for any Project management or development
fees, real estate fees or commissions or otherwise, the Project Administrative
Agent shall have received, reviewed and approved executed copies of the
applicable agreement providing for the payment of such fees or commissions, and
the Project Administrative Agent shall be reasonably satisfied the Person to be
paid has duly performed the services for which payment is requested.
(d) Inspections by Project Administrative Agent. The Project
Administrative Agent may retain, at the Borrower's expense, an architect,
structural engineer or other construction consultant (the "Consultant") to
inspect the Project, review Draw Requests, the construction contract, the Plans
and Specifications, the Project Budget and such other documents or information
as the Project Administrative Agent may require, visit the Project and perform
such other duties as the Project Administrative Agent deems necessary or
desirable. The Project Administrative Agent shall instruct the Consultant and
shall otherwise take reasonable steps to cause the Consultant to provide such
services in a timely manner so as not to delay and reasonably complete the Draw
Request. The Consultant may make periodic inspections of the Improvements during
construction to review and comment on construction progress and percentage of
completion, conformity of the work with the Plans and Specifications, activity
and coordination among trades and quality of workmanship, and the accuracy of
the statement of percentage of completion reflected in any Certificate of Job
Progress submitted to the Project Administrative Agent. Any inspections by the
Project Administrative Agent or the Consultant shall be solely for the purpose
of protecting the interests of the Project Administrative Agent, the
Administrative Agent and the Lenders, and such inspections shall not be
construed as a representation to the Borrower or any other Person that there has
been or will be strict compliance on the part of any contractors or
subcontractors with the Plans and specifications or that construction of the
Improvements is or will be free from faulty materials or workmanship. If the
Consultant does not approve a Certificate of Job Progress, or any other
materials or information submitted to the Project Administrative Agent with a
Draw Request, the Project Administrative Agent will have no obligation to
approve the requested advance in an amount greater than the amount approved by
the Consultant.
(e) Loan Balancing. The Lenders shall have no obligation to make a
Revolving Loan advances and the Project Administrative Agent has no obligation
to disburse any Funds if in the Project Administrative Agent's reasonable
opinion the Revolving Loans are not "in balance"; i.e., the undisbursed balance
of the Revolving Loans, plus any undisbursed Funds previously deposited by the
Borrower with the Project Administrative Agent, if any, are not sufficient to
pay all costs necessary to complete the Project (including without limitation
the payment of interest on the Revolving Loans) in accordance with the approved
Plans and Specifications and the Project Budget, free and clear of all liens,
encumbrances and conditional sales contracts, whether the deficiency is
attributable to changes in the work or in the Plans and Specifications or to any
other cause. If at any time the Project Administrative Agent determines the
Revolving Loans are not in balance, within five (5) days after demand, the
Borrower will deposit with the Project Administrative Agent the amount necessary
to "balance" the Revolving Loans, and all Funds so deposited with the Project
Administrative Agent shall be held and disbursed by the Project Administrative
Agent in accordance with this Schedule 4.3 prior to
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making any additional disbursement of Funds. If the Project Administrative Agent
makes such demand, the Lenders shall have no obligation to make further
Revolving Loan advances and the Project Administrative Agent shall have no
obligation to disburse any Funds until such additional funds are deposited with
the Project Administrative Agent by the Borrower. Each Draw Request or other
request for disbursement submitted to the Project Administrative Agent will
constitute the Borrower's representation and warranty to the Project
Administrative Agent and the Lenders that the Revolving Loans are "in balance".
(f) Use and Application of Funds. The Project Administrative Agent shall
have no obligation to assure that Funds advanced to the Borrower or others are
applied against the cost of the Project. The Borrower accepts full
responsibility for the proper application of all Funds advanced at the
Borrower's request. The Project Administrative Agent may rely solely on Draw
Requests or other disbursement requests submitted by the Borrower or its agents
and upon other affidavits, statements or reports submitted by the Borrower or
its agents in making advances of Funds. The Borrower shall defend, indemnify and
hold the Project Administrative Agent, the Administrative Agent and the Lenders
harmless from any losses, demands, claims, attorneys' fees and expenses which
may arise out of the misapplication or misuse of Revolving Loans (or other
Funds) by the Borrower or by any other person paid at the Borrower's direction.
(g) Final Disbursement. The final disbursement of Funds, including the
Retention, shall be made only if the conditions set forth below are met to the
Project Administrative Agent's satisfaction:
(i) The Improvements and the Project are completed in accordance
with the Plans and Specifications as confirmed by the project architect and the
Project Administrative Agent or the Consultant, and the Project Administrative
Agent shall have received as-built Plans and Specifications for the Project.
(ii) The Administrative Agent shall have received, at the
Borrower's expense, an endorsement (in form and substance satisfactory to the
Administrative Agent) to the Mortgage Policy insuring the lien-free completion
of the Project, without exceptions other than those previously approved by the
Administrative Agent.
(iii) The Project Administrative Agent and the Administrative
Agent shall have received an as-built survey of the Project and an endorsement
to the Title Policy eliminating title exceptions regarding possible
encroachments and/or violations of easement rights.
(iv) The Project Administrative Agent shall have received copies
of all licenses, permits and certificates necessary for the lawful use and
occupancy of the Project, including but not limited to a copy of the final
certificate of occupancy for the Project, which shall be unconditional unless
otherwise agreed by the Project Administrative Agent, or other evidence
acceptable to the Project Administrative Agent that the Project is completed and
accepted by all necessary governmental authorities.
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(v) If requested by the Project Administrative Agent, the
Project Administrative Agent shall have received a final accounting of Project
costs from the Borrower and/or its general contractor.
(vi) The Project Administrative Agent shall have received fully
executed lien releases from General Contractor and, if required by the Project
Administrative Agent, the Subcontractors, or the Borrower shall have provided
the Administrative Agent on behalf of the Lenders with an appropriate surety
bond from a surety acceptable to the Project Administrative Agent or affirmative
title insurance coverage with respect to potential laborers', mechanics' or
materialmen's liens.
(h) Expenses, Fees and Interest. Notwithstanding any other provision of
this Schedule 4.3 or the Credit Agreement, the Project Administrative Agent may
elect (after having provided notice to the Borrower) to use Funds to pay when
due expenses of the Project Administrative Agent, the Administrative Agent or
the Lenders which are the Borrower's responsibility under the Credit Agreement
or any of the other Credit Documents, and such other sums as may be payable from
time to time by the Borrower to the Project Administrative Agent, the
Administrative Agent or the Lenders with respect to the Revolving Loans. Such
payments at the option of the Project Administrative Agent may be made by
debiting or charging the Funds in the amount of such payments without first
disbursing such amounts to Borrower. In addition, the Borrower hereby authorizes
the Administrative Agent, at its option, to make such other payments as the
Administrative Agent deems necessary or desirable to maintain the validity and
priority of the Mortgage Instrument, including the following, unless the
Borrower makes the payment within ten (10) days after written notice from
Administrative Agent: (i) pay delinquent assessments and taxes on the Project;
(ii) pay title insurance premiums, recording fees, and hazard, liability and
flood insurance premiums; (iii) pay contractor's liens or claims of liens
against the Project, subject to any right the Borrower may have to contest such
liens pursuant to the terms of the Mortgage Instrument or the other Credit
Documents, and (iv) pay judgments affecting the Project, subject to any right
the Borrower may have to contest such judgment's pursuant to the terms of the
Mortgage Instrument or the other Credit Documents.
