1
EXHIBIT 10.3
================================================================================
CREDIT AGREEMENT
dated as of
September 27, 1999,
among
AMB INSTITUTIONAL ALLIANCE FUND I, L.P., as Borrower,
AMB INSTITUTIONAL ALLIANCE REIT I, INC.,
The Lenders and the Issuing Bank Party Hereto,
THE CHASE MANHATTAN BANK,
as Syndication Agent,
BT REALTY RESOURCES, INC.,
as Administrative Agent,
and
THE CHASE MANHATTAN BANK,
as Agent
-----------------------------------------
CHASE SECURITIES INC. and DEUTSCHE BANK SECURITIES INC.,
as Joint Arrangers/Joint Book Managers
================================================================================
2
CREDIT AGREEMENT dated as of September 27, 1999, among AMB
INSTITUTIONAL ALLIANCE FUND I, L.P., a Delaware limited partnership, AMB
INSTITUTIONAL ALLIANCE REIT I, INC., a Maryland corporation, the LENDERS and the
ISSUING BANK party hereto, THE CHASE MANHATTAN BANK, as Syndication Agent, BT
REALTY RESOURCES, INC., as Administrative Agent, and THE CHASE MANHATTAN BANK,
as Agent.
The parties hereto agree as follows:
Article I
DEFINITIONS
Section 1.01 Defined Terms.
As used in this Agreement, the following terms have the meanings
specified below:
"ABR", when used in reference to any Loan or Borrowing, refers to
whether such Loan, or the Loans comprising such Borrowing, are bearing interest
at a rate determined by reference to the Alternate Base Rate.
"Accounting Changes" means any changes in accounting principles
(a) required by GAAP and implemented by any Credit Party, (b) recommended by any
Credit Party's certified public accountants, or (c) caused by a change in the
organizational structure of any Credit Party or its subsidiaries which results
in any change in liabilities for taxes.
"Acquisition Certificate" means a certificate, substantially in
the form of Exhibit I, of an officer or other authorized representative of the
Borrower.
"Adequately Capitalized" means compliance with the capital
standards for bank holding companies as described in the Bank Holding Company
Act of 1956, as amended, and regulations promulgated thereunder.
"Adjusted LIBO Rate" means, with respect to any Eurodollar
Borrowing for any Interest Period, an interest rate per annum (rounded upwards,
if necessary, to the next 1/16 of 1%) equal to (a) the LIBO Rate for such
Interest Period multiplied by (b) the Statutory Reserve Rate.
"Administrative Agent" means BT Realty Resources, Inc., in its
capacity as administrative agent hereunder.
"Administrative Questionnaire" means an Administrative
Questionnaire in a form supplied by the Agent.
3
"Affiliate" means, with respect to a specified Person, another
Person that directly, or indirectly through one or more intermediaries, Controls
or is Controlled by or is under common Control with the Person specified.
"Agent" means The Chase Manhattan Bank, in its capacity as agent
for the Lenders hereunder.
"Agents" means the Administrative Agent, the Agent, and the
Syndication Agent.
"Agreement" means this Credit Agreement.
"Alternate Base Rate" means, for any day, a rate per annum equal
to the greater of (a) the Prime Rate in effect on such day or (b) the Federal
Funds Effective Rate in effect on such day plus 0.50% (50 basis points). Any
change in the Alternate Base Rate due to a change in the Prime Rate or the
Federal Funds Effective Rate shall be effective from and including the effective
date of such change in the Prime Rate or the Federal Funds Effective Rate,
respectively.
"AMB REIT" means AMB Property Corporation, a Maryland
corporation.
"Annual Valuation Period" has the meaning given thereto in
Section (d)(5)(ii) of the Plan Asset Regulation.
"Applicable Percentage" means, with respect to any Lender, the
percentage of the total Commitments represented by such Lender's Commitment. If
the Commitments have terminated or expired, the Applicable Percentages shall be
determined based upon the Commitments most recently in effect, giving effect to
any assignments.
"Applicable Rate" means, for a Eurodollar Loan, 0.875% (87.5
basis points) per annum.
"Applicable Requirement" means (a) for any Included Investor that
is a bank holding company, (i) Adequately Capitalized status or better and (ii)
a long term senior unsecured indebtedness rating of BBB+ or better by S&P (if
rated by S&P) and Baa1 or better by Xxxxx'x (if rated by Xxxxx'x); (b) for any
Included Investor that is an insurance company, a long term senior unsecured
indebtedness rating of BBB+ or better by S&P (if rated by S&P) and Baa1 or
better by Xxxxx'x (if rated by Xxxxx'x) or a claims-paying ability rating of not
less than A+ or better by S&P (if rated by S&P) and A1 or better by Xxxxx'x (if
rated by Xxxxx'x ); or (c) for any Included Investor that is an ERISA Investor,
or the trustee or nominee of an ERISA Investor, (i) the Sponsor of such ERISA
Investor has a long term senior unsecured indebtedness rating of BBB+ or better
by S&P (if rated by S&P) and Baa1 or better by Xxxxx'x (if rated by Xxxxx'x),
and (ii) each Plan funded by the ERISA Investor which is a defined benefit
pension plan has a minimum Funding Ratio equal to the Minimum Funding Ratio
Percentage (an Investor that is an ERISA Investor, or the trustee or nominee of
an ERISA Investor, shall be deemed to have met the foregoing rating requirements
if such ERISA Investor's Sponsor meets the rating requirements set forth in
clause (a)(ii)); and (d) an Investor that is a Governmental Plan Investor, or
the Responsible Party with respect to such Governmental Plan Investor, shall be
deemed to have met the foregoing rating requirements if the Responsible Party
meets the rating
2
4
requirements set forth in clause (a)(ii); and (e) an Investor that is an
Endowment Fund Investor shall be deemed to have met the foregoing rating
requirements if such Endowment Fund Investor's Sponsor meets the rating
requirements set forth in clause (a)(ii) above, and unless such Sponsor is a
party to the Subscription Agreement of such Endowment Fund Investor and jointly
and severally liable for such Endowment Fund Investor's Capital Commitment, such
Sponsor guarantees the obligations of the Endowment Fund Investor to make its
Capital Commitment pursuant to an unconditional guaranty in form and substance
satisfactory to the Agent; and (f) an unrated or lower rated Investor that is a
subsidiary of an entity that satisfies the foregoing rating requirements (a
"Rated Entity") shall be deemed to have satisfied the foregoing rating
requirements if the Rated Entity guarantees the obligations of such Investor to
fund its Capital Commitments pursuant to an unconditional guaranty of such Rated
Entity in form and substance satisfactory to the Agent. In addition to the
foregoing rating requirements, (1) neither an ERISA Investor nor the trustee or
nominee of an ERISA Investor, and (2) neither a Governmental Plan Investor nor
the Responsible Party with respect to such Governmental Plan Investor will, if
such entity is a defined benefit plan, have satisfied the Applicable Requirement
unless it has a minimum Funding Ratio for the pension fund of at least the
Minimum Funding Ratio Percentage.
"Articles of Incorporation" means the Articles of Amendment and
Restatement of the Investor REIT dated as of September 24, 1999, as the same may
be further amended, restated, supplemented or otherwise modified from time to
time with the consent of the Agent, the Issuing Bank, and the Lenders to the
extent expressly required hereby.
"Assignment and Acceptance" means an assignment and acceptance
entered into by a Lender and an assignee (with the consent of any party whose
consent is required by Section 9.04), and accepted by the Agent, in the form of
Exhibit A or any other form approved by the Agent.
"Availability Period" means the period from and including the
Effective Date to but excluding the Termination Date.
"Available Borrowing Amount" means, at any time, an amount equal
to the lesser of (i) the total Commitments, as such Commitments may be reduced
from time to time pursuant to the provisions of this Agreement, and (ii) an
amount equal to the lesser of (x) 90% (ninety percent) (75% (seventy-five
percent) in the case of the Special Bridge Loan Investors) of the aggregate
Unpaid Capital Obligations of all Included Investors, and (y) $80,000,000.00.
"Bankruptcy Code" means Title 11 of the United States Code,
entitled "Bankruptcy", as amended from time to time, and any successor statute
or statutes.
"Board" means the Board of Governors of the Federal Reserve
System of the United States of America.
"Borrower" means AMB Institutional Alliance Fund I, L.P., a
Delaware limited partnership.
3
5
"Borrowing" means (a) a borrowing of Loans of the same Type,
made, converted or continued on the same date and, in the case of Eurodollar
Loans, as to which a single Interest Period is in effect, or (b) the issuance of
a Letter of Credit hereunder.
"Borrowing Request" means a request by the Borrower for a
Borrowing in accordance with Section 2.03.
"BT" means BT Realty Resources, Inc., in its individual capacity.
"Business Day" means any day that is not a Saturday, Sunday or
other day on which commercial banks in New York City are authorized or required
by law to remain closed; provided that, when used in connection with a
Eurodollar Loan, the term "Business Day" shall also exclude any day on which
banks are not open for dealings in dollar deposits in the London interbank
market.
"Capital Call" means a call upon the Investors to fund all or any
portion of the Capital Commitments pursuant to and in accordance with their
respective Subscription Agreements and the Articles of Incorporation.
"Capital Commitments" means the commitment of each Investor to
fund Capital Contributions to the Investor REIT in the amount set forth in, and
pursuant to the terms of, such Investor's Subscription Agreement and the
Articles of Incorporation (including any commitment in respect of any Capital
Contribution which is refunded and is subject to recall).
"Capital Contribution" means the payment by an Investor of the
Purchase Price (as defined in such Investor's Subscription Agreement) for shares
of capital stock of the Investor REIT.
"Capital Demand Notice" means any notice sent to Investors in
connection with a Capital Call.
"Capital Lease Obligations" of any Person means the obligations
of such Person to pay rent or other amounts under any lease of (or other
arrangement conveying the right to use) real or personal property, or a
combination thereof, which obligations are required to be classified and
accounted for as capital leases on a balance sheet of such Person under GAAP,
and the amount of such obligations shall be the capitalized amount thereof
determined in accordance with GAAP.
"Cash Collateral Agreement" means the Cash Collateral Account,
Security, Pledge and Assignment Agreement, substantially in the form of Exhibit
E, between the Investor REIT and the Agent.
"Change of Control" means the occurrence of any one or more of
the following events: (i) the Managing GP shall cease to Control the Borrower or
the Special GP; (ii) AMB REIT shall cease to Control the Managing GP or shall
cease to own at least a majority of the outstanding interests in the Managing
GP; (iii) AMB REIT shall acquire actual knowledge that any person or group (as
such terms are used in Sections 13(d) and 14(d)(2) of the Exchange Act)
4
6
is or becomes the beneficial owner (as defined under Rule 13d-3 of the Exchange
Act), directly or indirectly, of securities of AMB REIT representing more than
50% (fifty percent) of the combined voting power of AMB REIT's then outstanding
securities having the right to vote in an election of the Board of Directors of
AMB REIT; (iv) AMB REIT's stockholders shall approve a merger or consolidation
of AMB REIT with or into another Person (other than a merger in which AMB REIT
is the surviving corporation) or a plan of liquidation or dissolution of AMB
REIT; or (v) more than 50% (fifty percent) of the members of the Board of
Directors of AMB REIT shall not be Continuing Directors (as hereinafter
defined). For purposes of this definition, "Continuing Directors" shall mean the
members of the Board of Directors of AMB REIT listed on Schedule 1.01A, and any
other individual who becomes a member of the Board of Directors of AMB REIT if
his or her election or nomination for election as a director was approved by a
vote of at least a majority of the Continuing Directors then in office.
"Change in Law" means (a) the adoption of any law, rule or
regulation after the date of this Agreement, (b) any change in any law, rule or
regulation or in the interpretation or application thereof by any Governmental
Authority after the date of this Agreement or (c) compliance by any Lender or
the Issuing Bank (or, for purposes of Section 2.14(b), by any lending office of
such Lender or by such Lender's or the Issuing Bank's holding company, if any)
with any request, guideline or directive (whether or not having the force of
law) of any Governmental Authority made or issued after the date of this
Agreement.
"Chase" means The Chase Manhattan Bank, in its individual
capacity.
"Code" means the Internal Revenue Code of 1986, as amended from
time to time, and any successor statute or statutes.
"Collateral" means all property in which a security interest has
been granted or purported or intended to have been granted to the Agent for the
benefit of the Secured Parties under any Loan Document.
"Collateral Documents" has the meaning given thereto in Section
2.19(c)(i).
"Commitment" means, with respect to each Lender, the commitment
of such Lender to make Loans and to acquire participations in Letters of Credit
hereunder, expressed as an amount representing the maximum amount of such
Lender's Revolving Credit Exposure hereunder, as such commitment may be (a)
reduced from time to time pursuant to this Agreement, or (b) reduced or
increased from time to time pursuant to assignments by or to such Lender
pursuant to Section 9.04. The initial amount of each Lender's Commitment is set
forth on Schedule 2.01, or in the Assignment and Acceptance pursuant to which
such Lender shall have assumed its Commitment, as applicable. The initial
aggregate amount of the Lenders' Commitments is $80,000,000.00.
"Constituent Documents" means, with respect to any entity, its
constituent or organizational documents, including (i) in the case of a limited
partnership, its certificate of limited partnership and its limited partnership
agreement, (ii) in the case of a limited liability company, its certificate of
formation or organization and its operating agreement or limited
5
7
liability company agreement, and (iii) in the case of a corporation, its
articles or certificate of incorporation and its by-laws.
"Control" means the possession, directly or indirectly, of the
power to direct or cause the direction of the management or policies of a
Person, whether through the ability to exercise voting power, by contract or
otherwise (including the customary powers of a manager or managing member of a
limited liability company or a general partner of a limited partnership).
"Controlling" and "Controlled" have meanings correlative thereto.
"Control Agreement" means the Control Agreement, substantially in
the form of Exhibit F, among the Investor REIT, the Agent, and Chase in its
capacity as securities intermediary.
"CSI" means Chase Securities Inc., in its individual capacity.
"Credit Party" means each of the Borrower and the Investor REIT.
"DBSI" means Deutsche Bank Securities Inc., in its individual
capacity.
"Deal Party" means each Credit Party, the Managing GP, the
Special GP, and AMB REIT.
"Default" means any event or condition which constitutes an Event
of Default or which upon notice, lapse of time or both would, unless cured or
waived, become an Event of Default.
"Disclosed Matters" means the actions, suits and proceedings and
the environmental matters disclosed in Schedule 3.06.
"dollars" or "$" refers to lawful money of the United States of
America.
"Effective Date" means the date on which the conditions specified
in Section 4.01 are satisfied (or waived in accordance with Section 9.02).
"Endowment Fund Investor" means an Investor that is a wholly
owned, tax exempt, public charity subsidiary of a Sponsor, not wholly expendable
by such Sponsor on a current basis under the specific terms of all applicable
gift instruments, formed for the sole purpose of accepting charitable donations
on behalf of such Sponsor and investing the proceeds thereof.
"Environmental Affiliate" means (a) any subsidiary of any Credit
Party or (b) any Person otherwise Controlled, directly or indirectly, by any
Credit Party, (other than any Person (i) any securities of which have been
offered pursuant to registration under the Securities Exchange Act of 1934, or
that is an investment company under the Investment Company Act of 1940, and (ii)
that is not Controlled directly or indirectly by any Credit Party).
6
8
"Environmental Approval" means any permit, license, approval,
ruling, variance, exemption or other authorization required under any applicable
Environmental Law by a Governmental Authority having jurisdiction.
"Environmental Claim" means, with respect to any Person, any
written notice, claim, demand or similar communication against such Person by
any Governmental Authority having jurisdiction alleging potential liability for
investigatory costs, cleanup costs, governmental response costs, natural
resources damage, property damages, personal injuries, fines or penalties
arising out of, based on or resulting from (i) the presence, or release into the
environment, of any Hazardous Materials at any location, whether or not owned by
such Person, or (ii) circumstances forming the basis of any violation of any
applicable Environmental Law, in each case as to which there is a reasonable
possibility of an adverse determination with respect thereto and which, if
adversely determined, is likely to, individually or in the aggregate, have a
Material Adverse Effect on any Credit Party.
"Environmental Laws" means all laws, rules, regulations, codes,
ordinances, orders, decrees, judgments, injunctions, notices or binding
agreements issued, promulgated or entered into by any Governmental Authority,
relating in any way to the environment, preservation or reclamation of natural
resources, the management, release or threatened release of any Hazardous
Material or to health and safety matters.
"Environmental Liability" means any liability, contingent or
otherwise (including any liability for damages, costs of environmental
remediation, fines, penalties or indemnities), of the Borrower or any Subsidiary
directly or indirectly resulting from or based upon (a) violation of any
Environmental Law, (b) the generation, use, handling, transportation, storage,
treatment or disposal of any Hazardous Materials, (c) exposure to any Hazardous
Materials, (d) the release or threatened release of any Hazardous Materials into
the environment or (e) any contract, agreement or other consensual arrangement
pursuant to which liability is assumed or imposed with respect to any of the
foregoing.
"Environmental Lien" means any Lien in favor of any Governmental
Authority arising under any Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute or statutes.
"ERISA Affiliate" means any trade or business (whether or not
incorporated) that, together with any Credit Party, is treated as a single
employer under Section 414(b) or (c) of the Code or, solely for purposes of
Section 302 of ERISA and Section 412 of the Code, is treated as a single
employer under Section 414 of the Code.
"ERISA Investor" means an Investor that is an "employee benefit
plan" (as such term is defined in Section 3(3) of ERISA) trust or custody
account (or a master trust or custody account therefor) subject to Title I,
Subtitle B, Part 3 of ERISA, a group trust, as described in Revenue Ruling
81-100, or a partnership, commingled account or other fund that is a see-through
entity under the Plan Asset Regulation and has a partner, member or other
participant that is such an employee benefit plan trust, account or group trust.
7
9
"Eurodollar", when used in reference to any Loan or Borrowing,
refers to whether such Loan, or the Loans comprising such Borrowing, are bearing
interest at a rate determined by reference to the Adjusted LIBO Rate.
"Event of Default" has the meaning given thereto in Article VI.
"Exchange Act" means the Securities Exchange Act of 1934, as
amended from time to time, and any successor statute or statutes.
"Excluded Assets" means commercial income-producing Real Estate
Assets having an acquisition cost of at least $32,000,000.
"Excluded Taxes" means, with respect to any Agent, any Lender,
the Issuing Bank or any other recipient of any payment to be made by or on
account of any obligation of any Credit Party hereunder, (a) income or franchise
taxes imposed on (or measured by) its net income by the United States of
America, or by the jurisdiction under the laws of which such recipient is
organized or in which its principal office is located or, in the case of any
Lender, in which its applicable lending office is located, (b) any branch
profits taxes imposed by the United States of America or any similar tax imposed
by any other jurisdiction in which such Credit Party is located and (c) in the
case of a Foreign Lender (other than an assignee pursuant to a request by the
Borrower under Section 2.18(b)), any withholding tax that is imposed by the
United States of America or any jurisdiction thereof on amounts payable to such
Foreign Lender at the time such Foreign Lender becomes a party to this Agreement
(or designates a new lending office) or is attributable to such Foreign Lender's
failure to comply with Section 2.16(e), except to the extent that such Foreign
Lender (or its assignor, if any) was entitled, at the time of designation of a
new lending office (or assignment), to receive additional amounts from such
Credit Party with respect to such withholding tax pursuant to Section 2.16(a).
"Facility" means the credit facility established pursuant to this
Agreement, which constitutes a line of credit to the Borrower.
"Federal Funds Effective Rate" means, for any day, the weighted
average (rounded upwards, if necessary, to the next 1/100 of 1%) of the rates on
overnight Federal funds transactions with members of the Federal Reserve System
arranged by Federal funds brokers, as published on the next succeeding Business
Day by the Federal Reserve Bank of New York, or, if such rate is not so
published for any day that is a Business Day, the average (rounded upwards, if
necessary, to the next 1/100 of 1%) of the quotations for such day for such
transactions received by the Agent from three Federal funds brokers of
recognized standing selected by it.
"Fee Letter" means the letter dated September 21, 1999 among the
Borrower, Chase, CSI, BT, and DBSI regarding certain fees payable in connection
with the Facility.
"Foreign Lender" means any Lender that is organized under the
laws of a jurisdiction other than the United States of America, any State
thereof or the District of Columbia. For purposes of this definition, the United
States of America, each State thereof and the District of Columbia shall be
deemed to constitute a single jurisdiction.
8
10
"Funding Ratio" means (a) for a Governmental Plan Investor, the
percentage obtained by dividing (i) the total net fair market value of the
assets of the plan by (ii) the actuarial present value of the plan's total
benefit liabilities, each as reported in such plan's audited financial
statements, provided that if such market value funding ratio is not available,
the product of (x) the percentage obtained by dividing (i) the total actuarial
present value of the assets of the plan by (ii) the actuarial present value of
the plan's total benefit liabilities, each as reported in such plan's audited
financial statements, and (y) 1.1, and (b) for an ERISA Investor, the funded
current liability percentage reported on the more recent of (i) Schedule B to
the most recent Form 5500 filed by such plan with the United States Internal
Revenue Service, and (ii) the most recent annual report on Form 10-K of the
Sponsor of such ERISA Investor.
"GAAP" means generally accepted accounting principles in the
United States of America.
"Governmental Authority" means the government of the United
States of America, of any other nation or of any political subdivision of any
thereof, whether state or local, and any agency, authority, instrumentality,
regulatory body, court, central bank or other entity exercising executive,
legislative, judicial, taxing, regulatory or administrative powers or functions
of or pertaining to government.
"Governmental Plan Investor" means an Investor that is a
governmental plan as defined in Section 3(32) of ERISA.
"Guarantee" of or by any Person (the "guarantor") means any
obligation, contingent or otherwise, of the guarantor guaranteeing or having the
economic effect of guaranteeing any Indebtedness or other obligation of any
other Person (the "primary obligor") in any manner, whether directly or
indirectly, and including any obligation of the guarantor, direct or indirect,
(a) to purchase or pay (or advance or supply funds for the purchase or payment
of) such Indebtedness or other obligation or to purchase (or to advance or
supply funds for the purchase of) any security for the payment thereof, (b) to
purchase or lease property, securities or services for the purpose of assuring
the owner of such Indebtedness or other obligation of the payment thereof, (c)
to maintain working capital, equity capital or any other financial statement
condition or liquidity of the primary obligor so as to enable the primary
obligor to pay such Indebtedness or other obligation or (d) as an account party
in respect of any letter of credit or letter of guaranty issued to support such
Indebtedness or obligation; provided that the term Guarantee shall not include
endorsements for collection or deposit in the ordinary course of business.
"Hazardous Materials" means all explosive or radioactive
substances or wastes and all hazardous or toxic substances, wastes or other
pollutants, including petroleum or petroleum distillates, asbestos or asbestos
containing materials, polychlorinated biphenyls, radon gas, infectious or
medical wastes and all other substances or wastes of any nature regulated
pursuant to any Environmental Law.
"Included Investors" means those Investors that have delivered to
the Agent Investor Letters and Investor Opinions (except that any Investor
listed as an "Opinion Waiver Investor" on Schedule 1.01B shall, during the
thirty (30) day period commencing on the Effective
9
11
Date, be treated for purposes of this definition as if it had delivered an
Investor Opinion to the Agent, whether or not it has done so) and (i) that meet,
or are deemed to have met, the Applicable Requirement and that are approved as
Included Investors, from time to time, by the Agent and the Super-Required
Lenders, in writing and in the sole and absolute discretion of the Agent and
each such Lender, or (ii) that do not meet, and are not deemed to have met, the
Applicable Requirement and that are approved as Included Investors, from time to
time, by the Agent and all of the Lenders, in writing and in the sole and
absolute discretion of the Agent and each such Lender; provided that any
Investor in respect of which an Investor Disqualification Event has occurred
shall thereupon no longer be an Included Investor until such time as all
Investor Disqualification Events in respect of such Investor shall have been
cured and such Investor shall have been approved as an Included Investor in the
sole and absolute discretion of the Agent, the Issuing Bank, and all of the
Lenders; provided, further, that neither AMB REIT nor its Affiliates shall be an
Included Investor. The Included Investors as of the Effective Date are listed on
Schedule 1.01B. Each of the Investors listed on such Schedule became an Included
Investor as of the Effective Date pursuant to clause (i) rather than clause (ii)
of the first sentence of this paragraph, except any Investor listed as a
"Guaranty Waiver Investor" on Schedule 1.01B.
"Indebtedness" of any Person means, without duplication, (a) all
obligations of such Person for borrowed money or with respect to deposits or
advances of any kind, (b) all obligations of such Person evidenced by bonds,
debentures, notes or similar instruments, (c) all obligations of such Person
upon which interest charges are customarily paid, (d) all obligations of such
Person under conditional sale or other title retention agreements relating to
property acquired by such Person, (e) all obligations of such Person in respect
of the deferred purchase price of property or services (excluding current
accounts payable incurred in the ordinary course of business), (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
property owned or acquired by such Person, whether or not the Indebtedness
secured thereby has been assumed, (g) all Guarantees by such Person of
Indebtedness of others, (h) all Capital Lease Obligations of such Person, (i)
all obligations, contingent or otherwise, of such Person as an account party in
respect of letters of credit and letters of guaranty, or in respect of bankers'
acceptances, (j) all net payment obligations, contingent or otherwise, of such
Person under Rate Hedging Agreements, and (k) all other contingent obligations
of such Person. The Indebtedness of any Person shall include the Indebtedness of
any other entity (including any partnership in which such Person is a general
partner) to the extent such Person is liable therefor as a result of such
Person's ownership interest in or other relationship with such entity, except to
the extent the terms of such Indebtedness provide that such Person is not liable
therefor.
"Indemnified Taxes" means Taxes other than Excluded Taxes.
"Indemnitee" has the meaning given thereto in Section 9.03(b).
"Interest Election Request" means a request by the Borrower to
convert or continue a Borrowing in accordance with Section 2.06.
"Interest Payment Date" means (a) with respect to any ABR Loan,
the last day of each calendar month, and (b) with respect to any Eurodollar
Loan, the last day of the Interest Period applicable to the Borrowing of which
such Loan is a part and, in the case of a Eurodollar
10
12
Borrowing with an Interest Period of more than three months' duration, each day
prior to the last day of such Interest Period that occurs at intervals of three
months' duration after the first day of such Interest Period.
"Interest Period" means, with respect to any Eurodollar
Borrowing, the period commencing on the date of such Borrowing and ending on the
numerically corresponding day in the calendar month that is one or two months
thereafter, as the Borrower may elect; provided that (i) if any Interest Period
would end on a day other than a Business Day, such Interest Period shall be
extended to the next succeeding Business Day unless such next succeeding
Business Day would fall in the next calendar month, in which case such Interest
Period shall end on the next preceding Business Day and (ii) any Interest Period
that commences on the last Business Day of a calendar month (or on a day for
which there is no numerically corresponding day in the last calendar month of
such Interest Period) shall end on the last Business Day of the last calendar
month of such Interest Period. For purposes hereof, the date of a Borrowing
initially shall be the date on which such Borrowing is made, and thereafter
shall be the effective date of the most recent conversion or continuation of
such Borrowing.
"Investor" means, from time to time, each shareholder of the
Investor REIT.
"Investor Claims" means all debts and liabilities of each
Investor, in its capacity as an Investor, to the Investor REIT, whether such
debts and liabilities now exist or are hereafter incurred or arise, or whether
the obligations of such Investor thereon be direct, contingent, primary,
secondary, several, joint or several, or otherwise, and irrespective of whether
such debts or liabilities be evidenced by a note, contract, account, or
otherwise, and irrespective of the Person or Persons in whose favor such debts
or liabilities may, at their inception, have been, or may hereafter be created,
or the manner in which they have or may hereafter be acquired by the Investor
REIT. "Investor Claims" shall include all rights and claims of the Investor REIT
against each Investor under the applicable Subscription Agreement or the
Articles of Incorporation.
"Investor Disqualification Event" means, in respect of any
Investor, the occurrence of any one or more of the following events:
(i) the Investor or its Sponsor or Responsible Party, if
any, shall commence a voluntary case or other proceeding seeking liquidation,
reorganization or other relief with respect to itself or its debts under any
bankruptcy, insolvency or other similar law now or hereafter in effect or
seeking the appointment of a trustee, receiver, liquidator, custodian or other
similar official of it or any substantial part of its property, or shall consent
to any such relief or to the appointment of or taking possession by any such
official in an involuntary case or other proceeding commenced against it, or
shall make a general assignment for the benefit of creditors, or shall fail
generally to pay its debts as they become due;
(ii) an involuntary case or other proceeding shall be
commenced against the Investor or its Sponsor or Responsible Party, if any,
seeking liquidation, reorganization or other relief with respect to it or its
debts under any bankruptcy, insolvency or other similar law now or hereafter in
effect or seeking the appointment of a trustee, receiver, liquidator, custodian
or other similar official of it or any substantial part of its property, and
such involuntary case or other proceeding shall remain undismissed and unstayed
for a period of 90 days; or an order for
11
13
relief shall be entered against the Investor under the federal bankruptcy laws
as now or hereafter in effect;
(iii) the Investor (A) shall fail to timely fund a Capital
Call subject to any notice and time to cure in accordance with the terms of its
Subscription Agreement and the Articles of Incorporation, (B) shall repudiate,
challenge or declare unenforceable its obligation to fund Capital Commitments,
or (C) shall otherwise disaffirm or default under, or breach the terms of, its
Subscription Agreement, its Investor Letter, or the Articles of Incorporation;
(iv) the Investor shall be excused from all or a portion
of its Capital Commitment as a result of any Change in Law, any release or
otherwise;
(v) one or more judgments or decrees in an aggregate
amount equal to 15% (fifteen percent) or more of the Investor's net worth shall
be entered by a court or courts of competent jurisdiction against the Investor
or its Sponsor or Responsible Party, if any (other than any judgment as to
which, and only to the extent, a reputable insurance company has acknowledged
coverage of such claim in writing or has acknowledged in writing its willingness
to defend any such claim under a reservation of rights), and (A) any such
judgments or decrees shall not be stayed, discharged, paid, bonded or vacated
within thirty (30) days or (B) enforcement proceedings shall be commenced by any
creditor on any such judgments or decrees;
(vi) any representation, warranty, certification or
statement made by such Investor in its Investor Letter or Subscription Agreement
or in any certificate, financial statement or other document delivered pursuant
to this Agreement or such documents shall have been false or misleading in any
material respect when made;
(vii) any event shall occur which materially adversely
affects the ability of the Investor to fulfill its obligations under its
Subscription Agreement, its Investor Letter, or the Investor REIT's Constituent
Documents;
(viii) the Investor elects any termination of all or a
portion of its Capital Commitment (if permitted to do so pursuant to its
Subscription Agreement or the Articles of Incorporation) or any dissolution,
liquidation or termination of the Investor REIT, in any case without regard to
any notice period relating to any such election;
(ix) the Investor Transfers its interest in the Investor
REIT; or the Investor's interest in the Investor REIT is subject to any Lien;
(x) the Investor fails to satisfy and maintain the
Applicable Requirement; provided that this clause (x) shall not apply to the
Special Bridge Loan Investors or to Investors that became Included Investors
pursuant to clause (ii) of the definition of the term "Included Investors";
(xi) if the Investor is the funding vehicle for a Plan
which is a defined benefit pension plan, a Plan funded by such Investor fails to
maintain at all times a Funding Ratio of at least the Minimum Funding Ratio
Percentage;
12
14
(xii) the Investor fails to deliver to the Investor REIT,
within twenty (20) days after notice thereof by the Agent to the Investor REIT,
(A) to the extent available, the financial statements of such Investor as of the
end of its most recent fiscal year ended at least ninety (90) days prior to such
date (reported on by independent public accountants to the extent available), or
(B) from time to time upon the request of the Investor REIT at the request of
the Agent, a certificate of such Investor setting forth the remaining amount of
its Capital Commitment that it is obligated to fund;
(xiii) if the Investor is listed as a "Guaranty Waiver
Investor" on Schedule 1.01B, there shall not have been delivered to the Agent
within thirty (30) days after the Effective Date a guaranty, in form and
substance satisfactory to the Agent, by a Rated Entity of the obligation of such
Investor to fund its Capital Commitment; or
(xiv) if the Investor is listed as a "Temporary Foreign
Waiver Investor" on Schedule 1.01B, there shall not have been delivered to the
Agent within thirty (30) days after the Effective Date any documentation that
would have been required in respect of such Investor pursuant to Section
2.19(c)(iii)(B) or (C), as applicable, if such Investor were a Subsequent
Investor.
"Investor Letters" means, collectively, the instruments
substantially in the form of Exhibit C executed by Investors and delivered to
the Agent.
"Investor Opinion" means a written opinion (addressed to the
Agents, the Issuing Bank and the Lenders) of counsel to an Investor,
substantially in the form of Exhibit J and otherwise acceptable to the Agent,
and covering such other matters relating to the Investor, the Loan Documents,
the Investor's Constituent Documents, or the Transactions as the Agent or the
Required Lenders shall reasonably request.
"Investor REIT" means AMB Institutional Alliance REIT I, Inc., a
Maryland corporation.
"Investor REIT Obligations" means all obligations, liabilities
and Indebtedness of every nature of the Investor REIT from time to time owing to
any Secured Party, under or in connection with this Agreement or any other Loan
Document.
"Investors' Commitments Certificate" has the meaning given
thereto in Section 5.01(c).
"Issuing Bank" means The Chase Manhattan Bank, in its capacity as
the issuer of Letters of Credit hereunder, and its successors in such capacity
as provided in Section 2.04(i). The Issuing Bank may, in its discretion, arrange
for one or more Letters of Credit to be issued by Affiliates of the Issuing
Bank, in which case the term "Issuing Bank" shall include any such Affiliate
with respect to Letters of Credit issued by such Affiliate.
"LC Disbursement" means a payment made by the Issuing Bank
pursuant to a Letter of Credit.
13
15
"LC Exposure" means, at any time, the sum of (a) the aggregate
undrawn amount of all outstanding Letters of Credit at such time plus (b) the
aggregate amount of all LC Disbursements that have not yet been reimbursed by or
on behalf of the Borrower at such time. The LC Exposure of any Lender at any
time shall be its Applicable Percentage of the total LC Exposure at such time.
"Lenders" means the Persons listed on Schedule 2.01 and any other
Person that shall have become a party hereto pursuant to an Assignment and
Acceptance, other than any such Person that ceases to be a party hereto pursuant
to an Assignment and Acceptance.
"Letter of Credit" means any letter of credit issued pursuant to
this Agreement.
"LIBO Rate" means, with respect to any Eurodollar Borrowing for
any Interest Period, the rate appearing on Page 3750 of the Telerate Service (or
on any successor or substitute page of such Service, or any successor to or
substitute for such Service, providing rate quotations comparable to those
currently provided on such page of such Service, as determined by the Agent from
time to time for purposes of providing quotations of interest rates applicable
to dollar deposits in the London interbank market) at approximately 11:00 a.m.,
London time, two Business Days prior to the commencement of such Interest
Period, as the rate for dollar deposits with a maturity comparable to such
Interest Period. In the event that such rate is not available at such time for
any reason, then the "LIBO Rate" with respect to such Eurodollar Borrowing for
such Interest Period shall be the rate at which dollar deposits of $5,000,000.00
and for a maturity comparable to such Interest Period are offered by the
principal London office of the Agent in immediately available funds in the
London interbank market at approximately 11:00 a.m., London time, two Business
Days prior to the commencement of such Interest Period.
"Lien" means, with respect to any asset, (a) any mortgage, deed
of trust, lien (statutory or other), pledge, hypothecation, collateral
assignment, encumbrance, deposit arrangement, charge or security interest in, on
or of such asset, (b) the interest of a vendor or a lessor under any conditional
sale agreement, capital lease or title retention agreement (or any financing
lease having substantially the same economic effect as any of the foregoing)
relating to such asset, (c) the filing under the Uniform Commercial Code or
comparable law of any jurisdiction of any financing statement naming the owner
of the asset to which such Lien relates as debtor, (d) any other preferential
arrangement of any kind or nature whatsoever intended to assure payment of any
Indebtedness or other obligation, and (e) in the case of securities, any
purchase option, call or similar right of a third party with respect to such
securities.
"Loan Document" means each of this Agreement, the Notes, the
Pledge and Security Agreement, the Cash Collateral Agreement, the Control
Agreement, the Pledge Agreement, the Recognition Agreement, the Investor
Letters, any other Collateral Documents, the Fee Letter, any applications for
any Letters of Credit, any other instruments or agreements by any of the Credit
Parties or the Investors with or in favor of any or all of the Secured Parties
in connection with the Transactions, and any amendments to or waivers of any of
the foregoing executed and delivered from time to time.
"Loans" means the loans made by the Lenders to the Borrower
pursuant to this Agreement.
14
16
"Managing GP " means AMB Property, L.P., a Delaware limited
partnership.
"Material Adverse Effect" means a material adverse effect on (a)
the business, assets, operations, prospects or condition, financial or
otherwise, of the Borrower and the Subsidiaries taken as a whole or of the
Investor REIT and its subsidiaries taken as a whole, (b) the ability of any
Credit Party to perform any of its respective material obligations under any
Loan Document or (c) the validity or enforceability of any of the Loan Documents
or the material rights of or material benefits available to any Secured Party
under any Loan Document.
"Maturity Date" means December 15, 1999.
"Minimum Funding Ratio Percentage" means, with respect to a
pension plan, the applicable minimum Funding Ratio hereinafter set forth below
based upon the rating of its Sponsor or Responsible Party, as the case may be:
Sponsor or Responsible
Party Rating Minimum Funding Ratio
---------------------- ---------------------
A-/A3 or higher No minimum
BBB+/Baal 90% (ninety percent)
The first rating indicated in each case above is the S&P rating and the second
rating in each case above is the Xxxxx'x rating. In the event that there is a
discrepancy between the S&P rating and the Xxxxx'x rating, the minimum Funding
Ratio shall be based upon the lower of the two ratings.
"Moody's" means Xxxxx'x Investors Service, Inc.
"Multiemployer Plan" means a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
"Note" means each promissory note executed and delivered by the
Borrower to a Lender pursuant to this Agreement.
"Obligations" means all obligations, liabilities and Indebtedness
of every nature of the Borrower from time to time owing to any Secured Party,
under or in connection with this Agreement or any other Loan Document.
"Other Taxes" means any and all present or future stamp or
documentary taxes or any other excise or property taxes, charges or similar
levies arising from any payment made hereunder or from the execution, delivery
or enforcement of, or otherwise with respect to, this Agreement.
"Participant" has the meaning given thereto in Section 9.04(e).
"Pending Capital Call" means, at any time, Capital Calls made
upon the Investors no more than eighteen (18) days earlier than such time, which
Capital Calls have not yet been funded by the applicable Investor.
15
17
"Permitted Investments" means
(a) direct obligations of, or obligations the principal of
and interest on which are unconditionally guaranteed by, the United States of
America (or by any agency thereof to the extent such obligations are backed by
the full faith and credit of the United States of America), in each case
denominated in dollars and maturing within one year from the date of acquisition
thereof;
(b) investments in commercial paper denominated in dollars
and maturing within 270 days from the date of acquisition thereof and having, at
such date of acquisition, the highest credit rating obtainable from S&P or from
Moody's;
(c) investments denominated in dollars in certificates of
deposit, banker's acceptances and time deposits maturing within 180 days from
the date of acquisition thereof issued or guaranteed by or placed with, and
money market deposit accounts issued or offered by, any domestic office of any
commercial bank organized under the laws of the United States of America or any
State thereof which has a combined capital and surplus and undivided profits of
not less than $500,000,000.00; and
(d) fully collateralized repurchase agreements with a term
of not more than 30 days for securities described in clause (a) above and
entered into with a financial institution satisfying the criteria described in
clause (c) above.
"Permitted Recourse Debt" means Indebtedness permitted under
Section 5.09(b).
"Person" means any natural person, corporation, limited liability
company, trust, joint venture, association, company, partnership, Governmental
Authority or other entity.
"Placement Memorandum" means the Investor REIT's confidential
offering memorandum and any supplemental disclosure document provided to
Investors.
"Plan" means any employee pension benefit plan (other than a
Multiemployer Plan) subject to the provisions of Title IV of ERISA or Section
412 of the Code or Section 302 of ERISA, and in respect of which the Borrower or
any ERISA Affiliate is (or, if such plan were terminated, would under Section
4069 of ERISA be deemed to be) an "employer" as defined in Section 3(5) of
ERISA.
"Plan Asset Regulation" means Department of Labor Regulation
Section 2510.3-101, 29 C.F.R. Section 2510.3-101, and any successor statutory or
regulatory provisions.
"Pledge Agreement" means the Pledge and Security Agreement
(Interest in Fund), substantially in the form of Exhibit G, between the Investor
REIT and the Agent.
"Pledge and Security Agreement" means the Subscription Agreement
Pledge and Security Agreement, substantially in the form of Exhibit D, between
the Investor REIT and the Agent.
16
18
"Portfolio Management Agreement" means the Portfolio Management
and Reporting Agreement dated as of September 24, 1999 between the Investor REIT
and the Portfolio Manager.
"Portfolio Management Fee" means the Portfolio Management Fee
referred to in of the Portfolio Management Agreement.
"Portfolio Manager" means AMB Investment Management Limited
Partnership, a Maryland limited partnership.
"Prepayment Account" has the meaning given thereto in Section
2.10(f).
"Prepayment Trigger Date" has the meaning given thereto in
Section 2.10(a).
"Prime Rate" means the rate of interest per annum publicly
announced from time to time by Chase as its prime rate in effect at its
principal office in New York City; each change in the Prime Rate shall be
effective from and including the date such change is publicly announced as being
effective.
"Rate Hedging Agreement" means any interest rate protection
agreement, foreign currency exchange agreement, or other interest or currency
exchange rate hedging arrangement.
"Real Estate Asset" means a fee interest in real property owned
by the Borrower or a Subsidiary or a leasehold interest of the Borrower or a
Subsidiary in real property.
"Real Estate Interests" means, collectively, equity or debt
interests in real estate or in securities or other interests related to real
estate, including land or improvements thereon or participating as a partner,
member, shareholder, owner or other investor in general or limited partnerships,
joint ventures, limited liability companies, corporations, trusts or other
entities the business of which is related to real estate.
"Recognition Agreement" means the Recognition Agreement,
substantially in the form of Exhibit H, among the Borrower, the Managing GP, the
Special GP, the Investor REIT and the Agent.
"Register" has the meaning given thereto in Section 9.04.
"Related Parties" means, with respect to any specified Person,
such Person's Affiliates and the respective directors, officers, employees,
agents and advisors of such Person and such Person's Affiliates.
"REOC" means a "real estate operating company" within the meaning
of Section 2510.3-101(e) of the Plan Asset Regulation.
"Required Lenders" means, at any time, Lenders having Revolving
Credit Exposures and unused Commitments representing more than 50% (fifty
percent) of the sum of the total Revolving Credit Exposures and unused
Commitments at such time.
17
19
"Responsible Officer" means, (i) in the case of AMB REIT, its
President or any Vice President (and, in any case where two Responsible Officers
are acting on behalf of AMB REIT, the second such Responsible Officer may also
be the Secretary or an Assistant Secretary of AMB REIT), (ii) in the case of the
Managing GP, any individual described in the foregoing clause (i) acting on
behalf of AMB REIT in its capacity as sole general partner of the Managing GP,
(iii) in the case of the Borrower, any individual described in the foregoing
clause (i) acting on behalf of AMB REIT in its capacity as the sole general
partner of the Managing GP in its capacity as managing general partner of the
Borrower, and (iv) in the case of the Investor REIT, its President or any Vice
President (and, in any case where two Responsible Officers are acting on behalf
of the Investor REIT, the second such Responsible Officer may also be the
Secretary or an Assistant Secretary of the Investor REIT).
"Responsible Party" means, for any Governmental Plan Investor,
(a) if the state under which the Governmental Plan Investor operates is
obligated to fund the Governmental Plan Investor and is liable to fund any
shortfalls, such state, and (b) otherwise, the Governmental Plan Investor
itself.
"Revolving Credit Exposure" means, with respect to any Lender at
any time, the sum of the outstanding principal amount of such Lender's Loans and
its LC Exposure at such time.
"S&P" means Standard & Poor's Rating Services.
"Secured Parties" means each of the Lenders, the Agents, and the
Issuing Bank.
"Solvent" means, as to any Person, that such Person is not
"insolvent" within the meaning of Section 101(32) of the Bankruptcy Code or
Section 271 of the Debtor and Creditor Law of the State of New York.
"Special Bridge Loan Investors" means each of the Investors
listed as a "Special Bridge Loan Investor" on Schedule 1.01B, and each other
Investor (if any) approved in writing as a Special Bridge Loan Investor by the
Agent, the Issuing Bank and the Lenders in their sole and absolute discretion.
"Special GP" means AMB Fund Special GP, LLC, a Delaware limited
liability company.
"Sponsor" means, (i) for any ERISA Investor, a sponsor as that
term is understood under ERISA, specifically, the entity that established the
plan and is responsible for the maintenance of the plan and, in the case of a
plan that has a sponsor and participating employers, the entity that has the
ability to amend or terminate the plan, and (ii) for any Endowment Fund
Investor, the state chartered, "not-for-profit" university or college that has
established such fund for its exclusive use and benefit. As used herein, the
term "not-for-profit" means an entity formed not for pecuniary profit or
financial gain and for which no part of its assets, income or profit is
distributable to, or inures to the benefit of, its members, directors or
officers.
18
20
"Statutory Reserve Rate" means a fraction (expressed as a
decimal), the numerator of which is the number one and the denominator of which
is the number one minus the aggregate of the maximum reserve percentages
(including any marginal, special, emergency or supplemental reserves) expressed
as a decimal established by the Board to which the Agent is subject, with
respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred
to as "Eurocurrency Liabilities" in Regulation D of the Board). Such reserve
percentages shall include those imposed pursuant to such Regulation D.
Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be
subject to such reserve requirements without benefit of or credit for proration,
exemptions or offsets that may be available from time to time to any Lender
under such Regulation D or any comparable regulation. The Statutory Reserve Rate
shall be adjusted automatically on and as of the effective date of any change in
any reserve percentage.
"Subscription Account" means a collateral account(s) established
by the Investor REIT at The Chase Manhattan Bank, pursuant to the Cash
Collateral Agreement.
"Subscription Agreements" means, collectively, the Subscription
Agreements or related subscription documents, executed by the Investor REIT and
each Investor, respectively, as purchaser, in connection with the Investor's
purchase of shares of capital stock of the Investor REIT.
"Subsequent Investors" means Investors executing Subscription
Agreements after the date hereof who were not Investors (or in respect of shares
of capital stock of the Investor REIT not owned or committed to purchase) as of
the Effective Date.
"subsidiary" means, with respect to any Person (the "parent") at
any date, any corporation, limited liability company, partnership, association
or other entity the accounts of which would be consolidated with those of the
parent in the parent's consolidated financial statements if such financial
statements were prepared in accordance with GAAP as of such date, as well as any
other corporation, limited liability company, partnership, association or other
entity (a) of which securities or other ownership interests representing more
than 50% (fifty percent) of the equity or more than 50% (fifty percent) of the
ordinary voting power or, in the case of a partnership, more than 50% (fifty
percent) of the general partnership interests are, as of such date, owned,
controlled or held, or (b) that is, as of such date, otherwise Controlled, by
the parent or one or more subsidiaries of the parent or by the parent and one or
more subsidiaries of the parent.
"Subsidiary" means any subsidiary of the Borrower.
"Super-Required Lenders" means, at any time, Lenders having
Revolving Credit Exposures and unused Commitments representing more than 66-2/3%
(sixty-six and two-thirds percent) of the sum of the total Revolving Credit
Exposures and unused Commitments at such time.
"Syndication Agent" means The Chase Manhattan Bank, in its
capacity as syndication agent hereunder.
19
21
"Taxes" means any and all present or future taxes, levies,
imposts, duties, deductions, charges or withholdings imposed by any Governmental
Authority.
"Termination Date" means the date that is the earliest to occur
of (i) the Maturity Date, (ii) the date which is ninety (90) days after the
Effective Date, (iii) the date which is the "Permanent Loan Closing Date"
referred to in the Fee Letter, (iv) the date which is sixty (60) days prior to
the end of the scheduled period during which Investors are obligated to
contribute capital pursuant to their Subscription Agreements and the Investor
REIT's Constituent Documents, (v) the date on which the Capital Commitments of
the Investors shall be terminated or otherwise reduced to zero, (vi) the date on
which the Commitments hereunder shall be terminated or otherwise permanently
reduced to zero, or (vii) the date on which the Loans shall become due and
payable hereunder by acceleration or mandatory prepayment in full.
"Transactions" means the execution, delivery and performance by
the Portfolio Manager and Deal Parties of the Loan Documents to which they are
parties, the borrowing of Loans, the use of the proceeds thereof, the issuance
of Letters of Credit hereunder, the granting of collateral under the Loan
Documents, the execution, delivery and performance by the Investor REIT of the
Subscription Agreements, and the execution, delivery and performance by the
Investors of their respective Investor Letters.
"Transfer" and "Transferor" have the respective meanings given
thereto in Section 5.19(b).
"Type", when used in reference to any Loan or Borrowing, refers
to whether the rate of interest on such Loan, or on the Loans comprising such
Borrowing, is determined by reference to the Adjusted LIBO Rate, or the
Alternate Base Rate.
"Unpaid Capital Obligations" means, collectively for all of the
Investors at any time, an amount equal to (x) the total Capital Commitments
(including amounts which are subject to any Pending Capital Call) less (y) the
aggregate Capital Calls made upon the Investors regardless of whether the
Investors have actually funded all such Capital Calls, but not including in this
clause (y) Pending Capital Calls.
"VCOC" means a "venture capital operating company" within the
meaning of Section 2510.3-101(d) of the Plan Asset Regulation.
SECTION 1.02 Classification of Loans and Borrowings.
For purposes of this Agreement, Loans may be classified and
referred to by Type (e.g., a "Eurodollar Loan" or a "Eurodollar Borrowing").
SECTION 1.03 Terms Generally.
The definitions of terms herein shall apply equally to the
singular and plural forms of the terms defined. Whenever the context may
require, any pronoun shall include the corresponding masculine, feminine and
neuter forms. The words "include", "includes" and "including" shall be deemed to
be followed by the phrase "without limitation". The word "will" shall be
construed to have the same meaning and effect as the word "shall". Unless the
context
20
22
requires otherwise (a) any definition of or reference to any agreement,
instrument or other document herein shall be construed as referring to such
agreement, instrument or other document as from time to time amended,
supplemented or otherwise modified (subject to any restrictions on such
amendments, supplements or modifications set forth herein), (b) any reference
herein to any Person shall be construed to include such Person's successors and
assigns, (c) the words "herein", "hereof" and "hereunder", and words of similar
import, shall be construed to refer to this Agreement in its entirety and not to
any particular provision hereof, (d) all references herein to Articles,
Sections, Exhibits and Schedules shall be construed to refer to Articles and
Sections of, and Exhibits and Schedules to, this Agreement and (e) the words
"asset" and "property" shall be construed to have the same meaning and effect
and to refer to any and all tangible and intangible assets and properties,
including cash, securities, accounts and contract rights.
SECTION 1.04 Accounting Terms; GAAP.
Except as otherwise expressly provided herein, all terms of an
accounting or financial nature shall be construed in accordance with GAAP, as in
effect from time to time. In the event that any Accounting Changes shall occur
and such changes affect the financial covenants, standards or terms contained in
this Agreement, then the Credit Parties and Lenders agree to enter into
negotiations in order to amend such provisions of this Agreement, so as to
equitably reflect such Accounting Changes with the desired result that the
criteria for evaluating the financial condition of the Credit Parties shall be
the same after such Accounting Changes as if such Accounting Changes had not
been made, and until such time as such an amendment shall have been executed and
delivered by the Credit Parties and the Required Lenders, (a) all financial
covenants, standards and terms in this Agreement shall be calculated and/or
construed as if such Accounting Changes had not been made, and (b) the Credit
Parties shall prepare footnotes to each compliance certificate and the financial
statements required to be delivered hereunder that show the differences between
the financial statements delivered (which reflect such Accounting Changes) and
the basis for calculating financial covenant compliance (without reflecting such
Accounting Changes).
ARTICLE II
THE CREDITS
SECTION 2.01 Commitments.
Subject to the terms and conditions set forth herein, each Lender
agrees to make Loans to the Borrower from time to time during the Availability
Period in an aggregate principal amount that will not result in (a) such
Lender's Revolving Credit Exposure exceeding such Lender's Commitment or (b) the
total Revolving Credit Exposures exceeding the Available Borrowing Amount.
Within the foregoing limits and subject to the terms and conditions set forth
herein, the Borrower may borrow, prepay and reborrow Loans.
SECTION 2.02 Loans and Borrowings.
(a) Each Loan shall be made as part of a Borrowing consisting of
Loans made by the Lenders ratably in accordance with their respective
Commitments. The failure of any Lender
21
23
to make any Loan required to be made by it shall not relieve any other Lender of
its obligations hereunder; provided that the Commitments of the Lenders are
several and no Lender shall be responsible for any other Lender's failure to
make Loans as required.
(b) Subject to Section 2.13, each Borrowing shall be comprised
entirely of ABR Loans or Eurodollar Loans as the Borrower may request in
accordance herewith. Each Lender at its option may make any Eurodollar Loan by
causing any domestic or foreign branch or Affiliate of such Lender to make such
Loan; provided that any exercise of such option shall not affect the obligation
of the Borrower to repay such Loan in accordance with the terms of this
Agreement.
(c) At the commencement of each Interest Period for any
Eurodollar Borrowing, such Borrowing shall be in an aggregate amount that is an
integral multiple of $100,000.00 and not less than $1,000,000.00. At the time
that each ABR Borrowing is made, such Borrowing shall be in an aggregate amount
that is an integral multiple of $100,000.00 and not less than $1,000,000.00;
provided that an ABR Borrowing may be in an aggregate amount that is equal to
the entire unused balance of the total Commitments or that is required to
finance the reimbursement of an LC Disbursement as contemplated by Section
2.04(e). Borrowings of more than one Type may be outstanding at the same time;
provided that there shall not at any time be more than a total of eight (8)
Eurodollar Borrowings outstanding.
(d) Notwithstanding any other provision of this Agreement, the
Borrower shall not be entitled to request, or to elect to convert or continue,
any Borrowing if the Interest Period requested with respect thereto would end
after the Maturity Date.
SECTION 2.03 Requests for Borrowings.
To request a Borrowing, the Borrower shall notify the Agent of
such request by telephone (x) in the case of a Eurodollar Borrowing, not later
than 1:00 p.m., New York City time, three Business Days before the date of the
proposed Borrowing, or (y) in the case of an ABR Borrowing, not later than 1:00
p.m., New York City time, one Business Day before the date of the proposed
Borrowing. Each such telephonic Borrowing Request shall be irrevocable and shall
be confirmed promptly by hand delivery or telecopy to the Agent of a written
Borrowing Request in a form approved by the Agent and signed by the Borrower.
Each such telephonic and written Borrowing Request shall specify the following
information in compliance with Section 2.02:
(i) the aggregate amount of the requested Borrowing;
(ii) the date of such Borrowing, which shall be a
Business Day;
(iii) whether such Borrowing is to be an ABR Borrowing
or a Eurodollar Borrowing;
(iv) in the case of a Eurodollar Borrowing, the initial
Interest Period to be applicable thereto, which shall be a period contemplated
by the definition of the term "Interest Period";
22
24
(v) the location and number of the Borrower's account
to which funds are to be disbursed, which shall comply with the requirements of
Section 2.05; and
(vi) the Available Borrowing Amount (giving effect to
all factors affecting such amount).
If no election as to the Type of Borrowing is specified, then the requested
Borrowing shall be an ABR Borrowing. If no Interest Period is specified with
respect to any requested Eurodollar Borrowing, then the Borrower shall be deemed
to have selected an Interest Period of one month's duration. Promptly following
receipt of a Borrowing Request in accordance with this Section, the Agent shall
advise each Lender of the details thereof and of the amount of such Lender's
Loan to be made as part of the requested Borrowing.
SECTION 2.04 Letters of Credit.
(a) General. NOTWITHSTANDING ANYTHING TO THE CONTRARY CONTAINED
IN THIS AGREEMENT (INCLUDING REFERENCES HEREIN TO LETTERS OF CREDIT, LC
DISBURSEMENTS, LC EXPOSURE AND THE ISSUING BANK), NO LETTER OF CREDIT MAY BE
REQUESTED OR ISSUED HEREUNDER UNTIL SUCH TIME, IF ANY, AS ALL OF THE PARTIES
HERETO SHALL SO AGREE IN WRITING IN THEIR SOLE AND ABSOLUTE DISCRETION. Subject
to the terms and conditions set forth herein, the Borrower may request the
issuance of Letters of Credit for its own account, in a form reasonably
acceptable to the Agent and the Issuing Bank, at any time and from time to time
during the Availability Period other than the last thirty (30) days prior to the
Maturity Date. In the event of any inconsistency between the terms and
conditions of this Agreement and the terms and conditions of any form of letter
of credit application or other agreement submitted by the Borrower to, or
entered into by the Borrower with, the Issuing Bank relating to any Letter of
Credit, the terms and conditions of this Agreement shall control.
(b) Notice of Issuance, Amendment, Renewal, Extension; Certain
Conditions. To request the issuance of a Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), the Borrower shall
hand deliver or telecopy (or transmit by electronic communication, if
arrangements for doing so have been approved by the Issuing Bank) to the Issuing
Bank and the Agent (reasonably in advance of the requested date of issuance,
amendment, renewal or extension) a notice requesting the issuance of a Letter of
Credit, or identifying the Letter of Credit to be amended, renewed or extended,
the date of issuance, amendment, renewal or extension, the date on which such
Letter of Credit is to expire (which shall comply with paragraph (c) of this
Section), the amount of such Letter of Credit, the name and address of the
beneficiary thereof, such information as is required under Section 2.03 in
connection with a Borrowing, and such other information as shall be necessary to
prepare, amend, renew or extend such Letter of Credit. If requested by the
Issuing Bank, the Borrower also shall submit a letter of credit application on
the Issuing Bank's standard form in connection with any request for a Letter of
Credit. A Letter of Credit shall be issued, amended, renewed or extended only if
(and upon issuance, amendment, renewal or extension of each Letter of Credit the
Borrower shall be deemed to represent and warrant that), after giving effect to
such issuance, amendment, renewal or extension (i) the LC Exposure shall not
exceed $30,000,000.00 and (ii) the total Revolving Credit Exposures shall not
exceed the Available Borrowing Amount. Each
23
25
Letter of Credit shall have a stated amount of at least $1,000,000.00. The
Issuing Bank shall give the Borrower a copy of, and give the Agent reasonably
prompt notice of the issuance of, each Letter of Credit (or the amendment,
renewal or extension of an outstanding Letter of Credit), and the Agent, in
turn, shall give reasonably prompt notice thereof to the Lenders.
(c) Expiration Date. Each Letter of Credit shall expire at or
prior to the close of business on a date that is at least thirty (30) days prior
to the Maturity Date.
(d) Participations. By the issuance of a Letter of Credit (or an
amendment to a Letter of Credit increasing the amount thereof) and without any
further action on the part of the Issuing Bank or the Lenders, the Issuing Bank
hereby grants to each Lender, and each Lender hereby acquires from the Issuing
Bank, a participation in such Letter of Credit equal to such Lender's Applicable
Percentage of the aggregate amount available to be drawn under such Letter of
Credit. In consideration and in furtherance of the foregoing, each Lender hereby
absolutely and unconditionally agrees to pay to the Agent, for the account of
the Issuing Bank, such Lender's Applicable Percentage of each LC Disbursement
made by the Issuing Bank and not reimbursed by the Borrower on the date due as
provided in paragraph (e) of this Section, or of any reimbursement payment
required to be refunded to the Borrower for any reason. Each Lender acknowledges
and agrees that its obligation to acquire participations pursuant to this
paragraph in respect of Letters of Credit is absolute and unconditional and
shall not be affected by any circumstance whatsoever, including any amendment,
renewal or extension of any Letter of Credit or the occurrence and continuance
of a Default or reduction or termination of the Commitments, and that each such
payment shall be made without any offset, abatement, withholding or reduction
whatsoever.
(e) Reimbursement. If the Issuing Bank shall make any LC
Disbursement in respect of a Letter of Credit, the Borrower shall reimburse such
LC Disbursement by paying to the Agent an amount equal to such LC Disbursement
not later than 12:00 noon, New York City time, on the date that such LC
Disbursement is made, if the Borrower shall have received notice of such LC
Disbursement prior to 10:00 a.m., New York City time, on such date, or, if such
notice has not been received by the Borrower prior to such time on such date,
then not later than 12:00 noon, New York City time, on (i) the Business Day that
the Borrower receives such notice, if such notice is received prior to 10:00
a.m., New York City time, on the day of receipt, or (ii) the Business Day
immediately following the day that the Borrower receives such notice, if such
notice is not received prior to such time on the day of receipt; provided that
the Borrower shall conclusively be deemed, subject to the conditions to
borrowing set forth herein (including the limitations stated in Section 2.01 and
the conditions stated in Section 4.02), to have requested that such payment be
financed with an ABR Borrowing in an equivalent amount and, to the extent so
financed, the Borrower's obligation to make such payment shall be discharged and
replaced by the resulting ABR Loans. If the Borrower fails to make such payment
when due, the Agent shall notify each Lender of the applicable LC Disbursement,
the payment then due from the Borrower in respect thereof and such Lender's
Applicable Percentage thereof. Promptly following receipt of such notice, each
Lender shall pay to the Agent its Applicable Percentage of the payment then due
from the Borrower, in the same manner as provided in Section 2.05 with respect
to Loans made by such Lender (and Section 2.05 shall apply, mutatis mutandis, to
the payment obligations of the Lenders), and the Agent shall promptly pay to the
Issuing Bank the
24
26
amounts so received by it from the Lenders. Promptly following receipt by the
Agent of any payment from the Borrower pursuant to this paragraph, the Agent
shall distribute such payment to the Issuing Bank or, to the extent that Lenders
have made payments pursuant to this paragraph to reimburse the Issuing Bank,
then to such Lenders and the Issuing Bank as their interests may appear. Any
payment made by a Lender pursuant to this paragraph to reimburse the Issuing
Bank for any LC Disbursement (other than the funding of ABR Loans as
contemplated above) shall not constitute a Loan and shall not relieve the
Borrower of its obligation to reimburse such LC Disbursement.
(f) Obligations Absolute. The Borrower's obligation to reimburse
LC Disbursements as provided in paragraph (e) of this Section shall be absolute,
unconditional and irrevocable, and shall be performed strictly in accordance
with the terms of this Agreement under any and all circumstances whatsoever and
irrespective of (i) any lack of validity or enforceability of any Letter of
Credit or this Agreement, or any term or provision therein, (ii) any draft or
other document presented under a Letter of Credit proving to be forged,
fraudulent or invalid in any respect or any statement therein being untrue or
inaccurate in any respect, (iii) payment by the Issuing Bank under a Letter of
Credit against presentation of a draft or other document that does not comply
with the terms of such Letter of Credit, or (iv) any other event or circumstance
whatsoever, whether or not similar to any of the foregoing, that might, but for
the provisions of this Section, constitute a legal or equitable discharge of, or
provide a right of setoff against, the Borrower's obligations hereunder. None of
the Secured Parties nor any of their respective Related Parties, shall have any
liability or responsibility by reason of or in connection with the issuance or
transfer of any Letter of Credit or any payment or failure to make any payment
thereunder (irrespective of any of the circumstances referred to in the
preceding sentence), or any error, omission, interruption, loss or delay in
transmission or delivery of any draft, notice or other communication under or
relating to any Letter of Credit (including any document required to make a
drawing thereunder), any error in interpretation of technical terms or any
consequence arising from causes beyond the control of the Issuing Bank; provided
that the foregoing shall not be construed to excuse the Issuing Bank from
liability to the Borrower to the extent of any direct damages (as opposed to
consequential damages, claims in respect of which are hereby waived by the
Borrower to the extent permitted by applicable law) suffered by the Borrower
that are caused by the Issuing Bank's failure to exercise care when determining
whether drafts and other documents presented under a Letter of Credit comply
with the terms thereof. The parties hereto expressly agree that, in the absence
of gross negligence or willful misconduct on the part of the Issuing Bank (as
finally determined by a court of competent jurisdiction), the Issuing Bank shall
be deemed to have exercised care in each such determination. In furtherance of
the foregoing and without limiting the generality thereof, the parties agree
that, with respect to documents presented which appear on their face to be in
substantial compliance with the terms of a Letter of Credit, the Issuing Bank
may, in its sole and absolute discretion, either accept and make payment upon
such documents without responsibility for further investigation, regardless of
any notice or information to the contrary, or refuse to accept and make payment
upon such documents if such documents are not in strict compliance with the
terms of such Letter of Credit.
(g) Disbursement Procedures. The Issuing Bank shall, promptly
following its receipt thereof, examine all documents purporting to represent a
demand for payment under a Letter of Credit. The Issuing Bank shall promptly
notify the Agent and the Borrower by
25
27
telephone (confirmed by telecopy) of such demand for payment and whether the
Issuing Bank has made or will make an LC Disbursement thereunder; provided that
any failure to give or delay in giving such notice shall not affect any rights
or obligations or create any liabilities.
(h) Interim Interest. If the Issuing Bank shall make any LC
Disbursement, then, unless the Borrower shall reimburse such LC Disbursement in
full on the date such LC Disbursement is made, the unpaid amount thereof shall
bear interest, for each day from and including the date such LC Disbursement is
made to but excluding the date that the Borrower reimburses such LC
Disbursement, at the rate per annum then applicable to ABR Loans; provided that,
if the Borrower fails to reimburse such LC Disbursement when due pursuant to
paragraph (e) of this Section, then Section 2.12(c) shall apply. Interest
accrued pursuant to this paragraph shall be for the account of the Issuing Bank,
except that interest accrued on and after the date of payment by any Lender
pursuant to paragraph (e) of this Section to reimburse the Issuing Bank shall be
for the account of such Lender to the extent of such payment.
(i) Replacement of the Issuing Bank. The Issuing Bank may be
replaced at any time by written agreement among the Borrower, the Agent, the
replaced Issuing Bank and the successor Issuing Bank. The Agent shall notify the
Lenders of any such replacement of the Issuing Bank. At the time any such
replacement shall become effective, the Borrower shall pay all unpaid fees
accrued for the account of the replaced Issuing Bank pursuant to Section
2.11(b). From and after the effective date of any such replacement, (i) the
successor Issuing Bank shall have all the rights and obligations of the Issuing
Bank under this Agreement with respect to Letters of Credit to be issued
thereafter and (ii) references herein to the term "Issuing Bank" shall be deemed
to refer to such successor or to any previous Issuing Bank, or to such successor
and all previous Issuing Banks, as the context shall require. After the
replacement of an Issuing Bank hereunder, the replaced Issuing Bank shall remain
a party hereto and shall continue to have all the rights and obligations of an
Issuing Bank under this Agreement with respect to Letters of Credit issued by it
prior to such replacement, but shall not be required to issue additional Letters
of Credit.
(j) Cash Collateralization. As provided under Section 6.04 or
under the circumstances referred to in Section 2.10(d), the Borrower shall
deposit in an account with the Agent, in the name of the Agent and for the
benefit of the Secured Parties, an amount in cash, as collateral security for
the LC Exposure plus any accrued and unpaid interest thereon, in accordance with
Section 2.10(d) or Section 6.04, as applicable. Such deposit shall be held by
the Agent as collateral for the payment and performance of the obligations of
the Borrower under this Agreement. The Agent shall have exclusive dominion and
control, including the exclusive right of withdrawal, over such account, which
account shall be governed by the provisions of Section 6.04.
SECTION 2.05 Funding of Borrowings.
(a) Each Lender shall make each Loan to be made by it hereunder
on the proposed date thereof by wire transfer of immediately available funds by
12:00 noon, New York City time, to the account of the Agent most recently
designated by it for such purpose by notice to the Lenders. No Lender shall fund
any portion of any Loan made by it from any account holding plan assets of any
"employee benefit plan" as defined in Section 3(3) of ERISA or "plan"
26
28
covered by Section 4975 of the Code. The Agent will make such Loans available to
the Borrower by promptly crediting the amounts so received, in like funds, to an
account of the Borrower maintained with the Agent in New York City and
designated by the Borrower or as otherwise instructed by the Borrower pursuant
to instructions acceptable to the Agent, in the applicable Borrowing Request.
(b) Unless the Agent shall have received notice from a Lender
prior to the proposed date of any Borrowing that such Lender will not make
available to the Agent such Lender's share of such Borrowing, the Agent may
assume that such Lender has made such share available on such date in accordance
with paragraph (a) of this Section and may, in reliance upon such assumption,
make available to the Borrower a corresponding amount. In such event, if a
Lender has not in fact made its share of the applicable Borrowing available to
the Agent, then the applicable Lender and the Borrower severally agree to pay to
the Agent forthwith on demand such corresponding amount with interest thereon,
for each day from and including the date such amount is made available to the
Borrower to but excluding the date of payment to the Agent, at (i) in the case
of such Lender, the greater of the Federal Funds Effective Rate and a rate
determined by the Agent in accordance with banking industry rules on interbank
compensation or (ii) in the case of the Borrower, the interest rate applicable
to ABR Loans. If such Lender pays such amount to the Agent, then such amount
shall constitute such Lender's Loan included in such Borrowing.
SECTION 2.06 Interest Elections.
(a) Each Borrowing initially shall be of the Type specified in
the applicable Borrowing Request and, in the case of a Eurodollar Borrowing,
shall have an initial Interest Period as specified in such Borrowing Request.
Thereafter, the Borrower may elect (subject to Section 2.15) to convert such
Borrowing to a different Type or to continue such Borrowing and, in the case of
a Eurodollar Borrowing, may elect Interest Periods therefor, all as provided in
this Section. The Borrower may elect different options with respect to different
portions of the affected Borrowing, in which case each such portion shall be
allocated ratably among the Lenders holding the Loans comprising such Borrowing,
and the Loans comprising each such portion shall be considered a separate
Borrowing (provided that each such portion would satisfy the requirement of a
Borrowing of that size and Type if made as a separate Borrowing initially rather
than in connection with an election of Interest Periods).
(b) To make an election pursuant to this Section, the Borrower
shall notify the Agent of such election by telephone by the time that a
Borrowing Request would be required under Section 2.03 if the Borrower were
requesting a Borrowing of the Type resulting from such election to be made on
the effective date of such election. Each such telephonic Interest Election
Request shall be irrevocable and shall be confirmed promptly by hand delivery or
telecopy to the Agent of a written Interest Election Request in a form approved
by the Agent and signed by the Borrower.
(c) Each telephonic and written Interest Election Request shall
specify the following information in compliance with Section 2.02:
27
29
(i) the Borrowing to which such Interest Election Request
applies and, if different options are being elected with respect to different
portions thereof, the portions thereof to be allocated to each resulting
Borrowing (in which case the information to be specified pursuant to clauses
(iii) and (iv) below shall be specified for each resulting Borrowing);
(ii) the effective date of the election made pursuant to
such Interest Election Request, which shall be a Business Day;
(iii) whether the resulting Borrowing is to be an ABR
Borrowing or a Eurodollar Borrowing; and
(iv) if the resulting Borrowing is a Eurodollar Borrowing,
the Interest Period to be applicable thereto after giving effect to such
election, which shall be a period contemplated by the definition of the term
"Interest Period".
If any such Interest Election Request requests a Eurodollar Borrowing but does
not specify an Interest Period, then the Borrower shall be deemed to have
selected an Interest Period of one month's duration.
(d) Promptly following receipt of an Interest Election Request,
the Agent shall advise each Lender of the details thereof and of such Lender's
portion of each resulting Borrowing.
(e) If the Borrower fails to deliver a timely Interest Election
Request with respect to a Eurodollar Borrowing prior to the end of the Interest
Period applicable thereto, then, unless such Borrowing is repaid as provided
herein, at the end of such Interest Period such Borrowing shall be converted to
an ABR Borrowing. Notwithstanding any contrary provision hereof, if an Event of
Default has occurred and is continuing then, so long as an Event of Default is
continuing (i) no outstanding Borrowing may be converted to or continued as a
Eurodollar Borrowing and (ii) unless repaid, each Eurodollar Borrowing shall be
converted to an ABR Borrowing at the end of the Interest Period applicable
thereto.
SECTION 2.07 Termination and Reduction of Commitments; Reduction
of Available Borrowing Amount.
(a) The Commitments shall terminate on the Termination Date. Any
termination or reduction of the Commitments shall be permanent. Each reduction
of the Commitments shall be made ratably among the Lenders in accordance with
their respective Commitments.
(b) The Borrower may at any time terminate, or from time to time
reduce, the Commitments; provided that (i) each reduction of the Commitments
pursuant to this paragraph shall be in an amount that is an integral multiple of
$1,000,000.00 and not less than $5,000,000.00, and (ii) the Borrower shall not
terminate or reduce the Commitments if, after giving effect to any concurrent
prepayment of the Loans in accordance with Section 2.09, the sum of the
Revolving Credit Exposures would exceed the Available Borrowing Amount. The
Borrower shall notify the Agent of any election to terminate or reduce the
Commitments under paragraph (b) of this Section at least three (3) Business Days
prior to the effective date of such termination or reduction, specifying such
election and the effective date thereof. Promptly
28
30
following receipt of any notice, the Agent shall advise the Lenders of the
contents thereof. Each notice delivered by the Borrower pursuant to this Section
shall be irrevocable; provided that a notice of termination of the Commitments
delivered by the Borrower may state that such notice is conditioned upon the
effectiveness of other credit facilities, in which case such notice may be
revoked by the Borrower (by notice to the Agent on or prior to the specified
effective date) if such condition is not satisfied; provided, further, that
Section 2.15 shall be applicable notwithstanding that such revocation is
permitted.
SECTION 2.08 Repayment of Loans; Evidence of Debt.
(a) The Borrower hereby unconditionally promises to pay to the
Agent for the account of each Lender the then unpaid principal amount of each
Loan on the Termination Date.
(b) Each Lender shall maintain in accordance with its usual
practice an account or accounts evidencing the indebtedness of the Borrower to
such Lender resulting from each Loan made by such Lender, including the amounts
of principal and interest payable and paid to such Lender from time to time
hereunder.
(c) The Agent shall maintain accounts in which it shall record
(i) the amount of each Loan made hereunder, the Type thereof and the Interest
Period applicable thereto, (ii) the amount of any principal or interest due and
payable or to become due and payable from the Borrower to each Lender hereunder
and (iii) the amount of any sum received by the Agent hereunder for the account
of the Lenders and each Lender's share thereof.
(d) The entries made in the accounts maintained pursuant to
paragraph (b) or (c) of this Section shall be prima facie evidence of the
existence and amounts of the obligations recorded therein; provided that the
failure of any Lender or the Agent to maintain such accounts or any error
therein shall not in any manner affect the obligation of the Borrower to repay
the Loans in accordance with the terms of this Agreement.
(e) Any Lender may request that Loans made by it be evidenced by
a promissory note. In such event, the Borrower shall execute and deliver to such
Lender a promissory note payable to the order of such Lender (or, if requested
by such Lender, to such Lender and its registered assigns) and in the form of
Exhibit B or another form approved by the Agent. Thereafter, the Loans evidenced
by such promissory note and interest thereon shall at all times (including after
assignment pursuant to Section 9.04) be represented by one or more promissory
notes in such form payable to the order of the payee named therein (or, if such
promissory note is a registered note, to such payee and its registered assigns).
SECTION 2.09 Optional Prepayment.
(a) The Borrower shall have the right at any time and from time
to time to prepay any Borrowing in whole or in part, without premium or penalty
(but subject to Section 2.15) subject to prior notice in accordance with
paragraph (b) of this Section.
(b) The Borrower shall notify the Agent by telephone (confirmed
by telecopy) of any prepayment hereunder (i) in the case of prepayment of a
Eurodollar Borrowing, not later than 1:00 p.m., New York City time, three
Business Days before the date of prepayment, or (ii) in the
29
31
case of prepayment of an ABR Borrowing, not later than 1:00 p.m., New York City
time, one Business Day before the date of prepayment. Each such notice shall be
irrevocable and shall specify the prepayment date and the principal amount of
each Borrowing or portion thereof to be prepaid; provided that, a notice of
prepayment delivered by the Borrower may state that such notice is conditioned
upon the effectiveness of other credit facilities, in which case such notice of
prepayment may be revoked by the Borrower (by notice to the Agent on or prior to
the specified effective date) if such condition is not satisfied (subject to
Section 2.15). Promptly following receipt of any such notice, the Agent shall
advise the Lenders of the contents thereof. Each partial prepayment of any
Borrowing shall be in an amount that would be permitted in the case of an
advance of a Borrowing of the same Type as provided in Section 2.02. Each
prepayment of a Borrowing shall be applied ratably to the Loans included in the
prepaid Borrowing. Prepayments shall be accompanied by accrued interest to the
extent required by Section 2.12.
SECTION 2.10 Mandatory Prepayment.
(a) If, on any day (a "Prepayment Trigger Date"), the sum of the
Revolving Credit Exposures exceeds the Available Borrowing Amount (including as
a consequence of an Investor Disqualification Event or a reduction in the total
Commitments), then the Credit Parties shall pay such excess to the Agent, for
the benefit of the Lenders, in immediately available funds, promptly and in any
event within two (2) Business Days after the applicable Prepayment Trigger Date
to the extent such funds are available in the Subscription Account or any other
account maintained by any Credit Party, otherwise within eighteen (18) days
after the applicable Prepayment Trigger Date (during which time the Investor
REIT shall issue a Capital Demand Notice to fund such required payment);
provided that the amount of such excess shall be paid to the Agent concurrently
with the creation of such excess if it results from any act at the election of
any Credit Party.
(b) The Borrower shall prepay all Obligations upon the occurrence
of any of the following events: (i) the dissolution or liquidation of any Credit
Party, (ii) a Change of Control, (iii) any public offering of securities of the
Borrower, (iv) termination of the Capital Commitments, or (v) the Managing GP or
other partners of the Borrower vote to terminate the Borrower, any "Termination
Determination" (as defined in the Borrower's partnership agreement) shall occur,
or the Board of Directors of the Investor REIT votes to terminate the Investor
REIT (regardless of whether shareholder approval is obtained) or any Credit
Party or the Managing GP shall otherwise terminate or action shall be taken to
that end.
(c) Nothing contained in this Section shall limit any rights or
remedies of any Secured Party in connection with any Event of Default (whether
or not related to any event referred to in this Section).
(d) If the amount required to be prepaid under any provision of
this Section exceeds the then outstanding principal balance of the Loans, the
amount of such excess shall be deposited as cash collateral in accordance with
Section 2.04(j) and subject to the provisions of Section 6.04; provided that
nothing contained in this Section shall limit any rights or remedies of any
Secured Party in connection with any Event of Default (whether or not related to
any event referred to in this Section).
30
32
(e) Amounts to be applied pursuant to any of the preceding
subsections of this Section 2.10 to the prepayment of Loans shall be applied,
first, to reduce outstanding ABR Loans. Amounts to be applied pursuant to
Section 2.10(b) to the prepayment of Loans shall next be applied, to the extent
of any remaining balance, to reduce outstanding Eurodollar Loans. Any amounts
remaining to be applied to prepayment pursuant to Section 2.10(a) (but not
Section 2.10(b)) shall, at the Borrower's option, be applied to prepay
Eurodollar Loans immediately or be deposited in the Prepayment Account. Each
prepayment of Loans shall be applied to prepay ratably the Loans of the Lenders.
(f) The Agent shall apply any cash deposited in the Prepayment
Account to prepay Eurodollar Loans on the last day of the Interest Period in
respect thereof (or, at the direction of the Borrower, subject to Section 2.15,
on any earlier date) until all outstanding Eurodollar Loans to be prepaid have
been prepaid or until all the allocable cash on deposit with respect to such
Loans has been exhausted. For purposes of this Agreement, "Prepayment Account"
shall mean an account established by the Borrower with the Agent, in the name of
the Agent, and over which the Agent shall have exclusive dominion and control,
including the exclusive right of withdrawal for application in accordance with
this Section 2.10(f). The Agent will, at the request and expense of the
Borrower, invest amounts on deposit in the Prepayment Account in Permitted
Investments (acceptable to the Agent in its discretion), in the name of the
Agent, maturing prior to the last day of the Interest Period in respect of the
Eurodollar Loans to be prepaid; provided that (i) the Agent shall not be
required to make any investment that, in its sole and absolute discretion, would
require or cause the Agent to be in, or would result in any, violation of any
law, statute, rule or regulation and (ii) the Agent shall have no obligation to
invest amounts on deposit in the Prepayment Account if a Default shall have
occurred and be continuing. The Borrower shall indemnify the Agent for any
losses relating to the investments so that the amount available to prepay
Eurodollar Loans on the last day of the Interest Period in respect thereof is
not less than the amount that would have been available had no investments been
made pursuant hereto. Other than any interest earned on such investments, the
Prepayment Account shall not bear interest. Interest or profits, if any, on such
investments shall be deposited in the Prepayment Account and reinvested as
specified above. If the maturity of the Loans shall be accelerated, the Agent
may, in its sole and absolute discretion, liquidate such investments and apply
all amounts on deposit in the Prepayment Account to satisfy any of the
Obligations, in which case Section 2.15 shall apply. The Borrower hereby grants
to the Agent, for the benefit of the Secured Parties, a security interest in the
Prepayment Account and all proceeds thereof to secure the Obligations.
SECTION 2.11 Fees.
(a) The Borrower agrees to pay to the Agent for the account of
each Lender an unused commitment fee ("Commitment Fee"), which shall accrue at
the rate of 0.175% (17.5 basis points) per annum on the daily unused amount of
the Commitment of such Lender during the period from and including the Effective
Date to but excluding the date on which such Commitment terminates; provided
that, in the sole and absolute discretion of the Agent, for purposes of
computing the Commitment Fee only, and for no other purpose, the Commitments
shall be calculated without giving effect to any reduction thereof (other than a
reduction pursuant to Section 6.02) during the period of time (if any) from the
date of such reduction to but
31
33
excluding the date on which the Agent shall have received notice from the
Borrower of such reduction. Accrued Commitment Fees shall be payable quarterly
in arrears on the last day of each March, June, September, and December of each
year, and on the date on which the Commitments terminate, commencing on the
first such date to occur after the date hereof. All unused Commitment Fees shall
be computed on the basis of a year of 360 days and shall be payable for the
actual number of days elapsed (including the first day but excluding the last
day).
(b) The Borrower agrees to pay (i) to the Agent for the account
of each Lender a participation fee with respect to its participations in Letters
of Credit, which shall accrue at the same Applicable Rate as would apply to
interest on Eurodollar Loans on the average daily amount of such Lender's LC
Exposure (excluding any portion thereof attributable to unreimbursed LC
Disbursements) during the period from and including the Effective Date to but
excluding the later of the date on which such Lender's Commitment terminates and
the date on which such Lender ceases to have any LC Exposure, and (ii) to the
Issuing Bank a fronting fee, which shall accrue at the rate or rates per annum
separately agreed upon in writing between the Borrower and the Issuing Bank on
the average daily amount of the LC Exposure (excluding any portion thereof
attributable to unreimbursed LC Disbursements) during the period from and
including the Effective Date to but excluding the later of the Termination Date
and the date on which there ceases to be any LC Exposure, as well as the Issuing
Bank's standard fees with respect to the issuance, amendment, renewal or
extension of any Letter of Credit or processing of drawings thereunder.
Participation fees and fronting fees accrued to but excluding the last day of
March, June, September and December of each year shall be payable on such last
day, commencing on the first such date to occur after the Effective Date;
provided that all such accrued and unpaid fees shall also be payable on the
Termination Date, and any such fees accruing after the Termination Date shall be
payable on demand. Any other fees payable to the Issuing Bank pursuant to this
paragraph shall be payable within ten (10) days after demand. All participation
fees and fronting fees shall be computed on the basis of a year of 360 days and
shall be payable for the actual number of days elapsed (including the first day
but excluding the last day).
(c) The Borrower agrees to pay to the Agent, for its own account,
fees payable in the amounts and at the times separately agreed upon in writing
between the Borrower and the Agent (including all fees required to be paid under
the Fee Letter).
(d) All fees payable hereunder shall be paid on the dates due, in
immediately available funds, to the Agent (or to the Issuing Bank, in the case
of fees payable to it) for distribution, in the case of Commitment Fees and
participation fees, to the Lenders.
Fees paid shall not be refundable under any circumstances.
SECTION 2.12 Interest.
(a) The Loans comprising each ABR Borrowing shall bear interest
at the Alternate Base Rate.
(b) The Loans comprising each Eurodollar Borrowing shall bear
interest at the Adjusted LIBO Rate for the Interest Period in effect for such
Borrowing plus the Applicable Rate.
32
34
(c) Notwithstanding the foregoing, if any principal of or
interest on any Loan or any fee or other amount payable by the Borrower
hereunder is not paid when due, whether at stated maturity, when required to be
prepaid, upon acceleration, or otherwise, such overdue amount shall bear
interest, after as well as before judgment, at a rate per annum equal to (i) in
the case of overdue principal of any Loan, 2% (two percent) plus the rate
otherwise applicable to such Loan as provided in the preceding paragraphs of
this Section or (ii) in the case of any other amount, 2% (two percent) plus the
rate applicable to ABR Loans as provided in paragraph (a) of this Section.
(d) Accrued interest on each Loan shall be payable in arrears on
each Interest Payment Date for such Loan and on the Termination Date; provided
that (i) interest accrued pursuant to paragraph (c) of this Section shall be
payable on demand, (ii) in the event of any repayment or prepayment of any Loan
(other than a prepayment of an ABR Loan prior to the end of the Availability
Period), accrued interest on the principal amount repaid or prepaid shall be
payable on the date of such repayment or prepayment and (iii) in the event of
any conversion of any Eurodollar Loan prior to the end of the current Interest
Period therefor, accrued interest on such Loan shall be payable on the effective
date of such conversion.
(e) All interest hereunder shall be computed on the basis of a
year of 360 days, except that interest computed by reference to the Alternate
Base Rate at times when the Alternate Base Rate is based on the Prime Rate shall
be computed on the basis of a year of 365 days (or 366 days in a leap year), and
in each case shall be payable for the actual number of days elapsed (including
the first day but excluding the last day). The applicable Alternate Base Rate,
Adjusted LIBO Rate or LIBO Rate shall be determined by the Agent, and such
determination shall be conclusive absent manifest error.
SECTION 2.13 Alternate Rate of Interest.
If prior to the commencement of any Interest Period for a
Eurodollar Borrowing:
(a) the Agent determines (which determination shall be conclusive
absent manifest error) that adequate and reasonable means do not exist for
ascertaining the Adjusted LIBO Rate or the LIBO Rate, as applicable, for such
Interest Period; or
(b) the Agent is advised by the Required Lenders that the
Adjusted LIBO Rate or the LIBO Rate, as applicable, for such Interest Period
will not adequately and fairly reflect the cost to such Lenders (or Lender) of
making or maintaining their Loans included in such Borrowing for such Interest
Period;
then the Agent shall give notice thereof to the Borrower and the Lenders by
telephone or telecopy as promptly as practicable thereafter and, until the Agent
notifies the Borrower and the Lenders that the circumstances giving rise to such
notice no longer exist, (i) any Interest Election Request that requests the
conversion of any Borrowing to, or continuation of any Borrowing as, a
Eurodollar Borrowing shall be ineffective, and (ii) if any Borrowing Request
requests a Eurodollar Borrowing, such Borrowing shall be made as an ABR
Borrowing.
33
35
SECTION 2.14 Increased Costs.
(a) If any Change in Law shall:
(i) impose, modify or deem applicable any reserve,
special deposit or similar requirement against assets of, deposits with or for
the account of, or credit extended by, any Lender (except any such reserve
requirement reflected in the Adjusted LIBO Rate) or the Issuing Bank; or
(ii) impose on any Lender, the Issuing Bank or the
London interbank market any other condition affecting this Agreement or
Eurodollar Loans made by such Lender or any Letter of Credit or participation
therein;
and the result of any of the foregoing shall be to increase the cost to such
Lender of making or maintaining any Eurodollar Loan (or of maintaining its
obligation to make any such Loan) or to increase the cost to such Lender or the
Issuing Bank of participating in, issuing or maintaining any Letter of Credit or
to reduce the amount of any sum received or receivable by such Lender or the
Issuing Bank hereunder (whether of principal, interest or otherwise), then the
Borrower will pay to such Lender or the Issuing Bank such additional amount or
amounts as will compensate such Lender or the Issuing Bank for such additional
costs incurred or reduction suffered.
(b) If any Lender or the Issuing Bank determines that any Change
in Law regarding capital requirements has or would have the effect of reducing
the rate of return on such Lender's or the Issuing Bank's capital or on the
capital of such Lender's or the Issuing Bank's holding company, if any, as a
consequence of this Agreement or the Loans made by, or participations in Letters
of Credit held by, such Lender, or the Letters of Credit issued by the Issuing
Bank, to a level below that which such Lender or the Issuing Bank or such
Lender's or the Issuing Bank's holding company could have achieved but for such
Change in Law (taking into consideration such Lender's or the Issuing Bank's
policies and the policies of such Lender's or the Issuing Bank's holding company
with respect to capital adequacy), then from time to time the Borrower will pay
to such Lender or the Issuing Bank, as the case may be, such additional amount
or amounts as will compensate such Lender or the Issuing Bank or such Lender's
or the Issuing Bank's holding company for any such reduction suffered.
(c) A certificate of a Lender or the Issuing Bank setting forth
the amount or amounts necessary to compensate such Lender or the Issuing Bank or
its holding company, as the case may be, as specified in paragraph (a) or (b) of
this Section shall be delivered to the Agent, to be forwarded to the Borrower,
and shall be conclusive absent manifest error. The Borrower shall pay to the
Agent, for the account of such Lender or the Issuing Bank, as the case may be,
the amount shown as due on any such certificate within 10 days after receipt
thereof.
(d) Failure or delay on the part of any Lender or the Issuing
Bank to demand compensation pursuant to this Section shall not constitute a
waiver of such Lender's or the Issuing Bank's right to demand such compensation;
provided that the Borrower shall not be required to compensate a Lender or the
Issuing Bank pursuant to this Section for any increased costs or reductions
incurred more than 270 days prior to the date that such Lender or the Issuing
Bank, as the case may be, notifies the Borrower of the Change in Law giving rise
to such
34
36
increased costs or reductions and of such Lender's or the Issuing Bank's
intention to claim compensation therefor; provided, further, that, if the Change
in Law giving rise to such increased costs or reductions is retroactive, then
the 270 day period referred to above shall be extended to include the period of
retroactive effect thereof.
SECTION 2.15 Break Funding Payments.
In the event of (a) the payment of any principal of any
Eurodollar Loan other than on the last day of an Interest Period applicable
thereto (including as a result of any mandatory prepayment or an Event of
Default), (b) the conversion of any Eurodollar Loan other than on the last day
of the Interest Period applicable thereto, (c) the failure to borrow, convert,
continue or prepay any Loan on the date specified in any notice delivered
pursuant hereto (regardless of whether such notice may be revoked under Section
2.07(b) and is revoked in accordance therewith), or (d) the assignment of any
Eurodollar Loan other than on the last day of the Interest Period applicable
thereto as a result of a request by the Borrower pursuant to Section 2.18, then,
in any such event, the Borrower shall compensate each Lender for the loss, cost
and expense attributable to such event. In the case of a Eurodollar Loan, such
loss, cost or expense to any Lender shall be deemed to include an amount
determined by such Lender to be the excess, if any, of (i) the amount of
interest which would have accrued on the principal amount of such Loan had such
event not occurred, at the Adjusted LIBO Rate that would have been applicable to
such Loan, for the period from the date of such event to the last day of the
then current Interest Period therefor (or, in the case of a failure to borrow,
convert or continue, for the period that would have been the Interest Period for
such Loan), over (ii) the amount of interest which would accrue on such
principal amount for such period at the interest rate which such Lender would
bid were it to bid, at the commencement of such period, for dollar deposits of a
comparable amount and period from other banks in the eurodollar market. A
certificate of any Lender setting forth any amount or amounts that such Lender
is entitled to receive pursuant to this Section shall be delivered to the Agent,
to be forwarded to the Borrower, and shall be conclusive absent manifest error.
The Borrower shall pay to the Agent, for the account of such Lender, the amount
shown as due on any such certificate within 10 days after receipt thereof.
SECTION 2.16 Taxes.
(a) Any and all payments by or on account of any obligation of
any Credit Party hereunder shall be made free and clear of and without deduction
for any Indemnified Taxes or Other Taxes; provided that if any Credit Party
shall be required to deduct any Indemnified Taxes or Other Taxes from such
payments, then (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) each Secured Party receives an amount equal to
the sum it would have received had no such deductions been made, (ii) the
relevant Credit Party shall make such deductions and (iii) the relevant Credit
Party shall pay the full amount deducted to the relevant Governmental Authority
in accordance with applicable law.
(b) In addition, the relevant Credit Party shall pay any Other
Taxes to the relevant Governmental Authority in accordance with applicable law.
35
37
(c) Each Credit Party shall indemnify each Secured Party, within
ten (10) days after written demand therefor, for the full amount of any
Indemnified Taxes or Other Taxes paid by such Secured Party on or with respect
to any payment by or on account of any obligation of such Credit Party hereunder
(including Indemnified Taxes or Other Taxes imposed or asserted on or
attributable to amounts payable under this Section) and any penalties, interest
and reasonable expenses arising therefrom or with respect thereto, whether or
not such Indemnified Taxes or Other Taxes were correctly or legally imposed or
asserted by the relevant Governmental Authority. A certificate as to the amount
of such payment or liability delivered to the relevant Credit Party by a Lender
or the Issuing Bank, or by the Agent on its own behalf or on behalf of a Lender
or the Issuing Bank, shall be conclusive absent manifest error.
(d) As soon as practicable after any payment of Indemnified Taxes
or Other Taxes by any Credit Party to a Governmental Authority, such Credit
Party shall deliver to the Agent the original or a certified copy of a receipt
issued by such Governmental Authority evidencing such payment, a copy of the
return reporting such payment or other evidence of such payment reasonably
satisfactory to the Agent.
(e) Each Foreign Lender, before it signs this Agreement in the
case of each Foreign Lender listed on the signature pages hereof and before it
becomes a Lender hereunder in the case of each other Foreign Lender, and from
time to time thereafter if requested in writing by the Borrower to do so (but
only so long as such Foreign Lender remains lawfully able to do so), shall
deliver to the Borrower and the Agent a duly completed copy of United States
Internal Revenue Service Form 1001 or 4224 (or successor applicable form), as
the case may be, certifying in each case that such Lender is entitled to receive
payments under this Agreement without deduction or withholding of any United
States federal income taxes. Each Foreign Lender further agrees promptly to
notify the Borrower and the Agent of any change of circumstances (including any
change in any treaty, law or regulation) which would prevent such Foreign Lender
from receiving payments hereunder without any deduction or withholding of such
taxes.
SECTION 2.17 Payments Generally; Pro Rata Treatment; Sharing of
Set-offs.
(a) Each Credit Party shall make each payment required to be made
by it hereunder (whether of principal, interest, fees, or of amounts payable
under Section 2.14, 2.15 or 2.16, or otherwise) prior to 1:00 p.m., New York
City time (except, in the case of reimbursements of LC Disbursements, prior to
12:00 noon, New York City time), on the date when due, in immediately available
funds, without set-off or counterclaim. Any amounts received after such time on
any date may, in the discretion of the Agent, be deemed to have been received on
the next succeeding Business Day for purposes of calculating interest thereon.
All such payments shall be made to the Agent at its offices at 000 Xxxx Xxxxxx,
Xxx Xxxx, Xxx Xxxx (or to such other office as the Agent may hereafter specify
by notice to any Credit Party), except payments to be made directly to the
Issuing Bank as expressly provided herein and except that payments pursuant to
Sections 2.14, 2.15, 2.16 and 9.03 shall be made directly to the Persons
entitled thereto. The Agent shall distribute any such payments received by it
for the account of any other Person to the appropriate recipient promptly
following receipt thereof. If any payment hereunder shall be due on a day that
is not a Business Day, the date for payment shall be
36
38
extended to the next succeeding Business Day (subject however, to the provisions
of the definition of the term "Interest Period"), and, in the case of any
payment accruing interest, interest thereon shall be payable for the period of
such extension. All payments hereunder shall be made in dollars.
(b) If at any time insufficient funds are received by and
available to the Agent to pay fully all amounts of principal, unreimbursed LC
Disbursements, interest and fees then due hereunder, such funds shall be applied
(i) first, towards payment of interest and fees then due hereunder, ratably
among the parties entitled thereto in accordance with the amounts of interest
and fees then due to such parties, and (ii) second, towards payment of principal
and unreimbursed LC Disbursements then due hereunder, ratably among the parties
entitled thereto in accordance with the amounts of principal and unreimbursed LC
Disbursements then due to such parties.
(c) If any Lender shall, by exercising any right of set-off or
counterclaim or otherwise, obtain payment in respect of any principal of or
interest on any of its Loans or participations in LC Disbursements resulting in
such Lender receiving payment of a greater proportion of the aggregate amount of
its Loans and participations in LC Disbursements and accrued interest thereon
than the proportion received by any other Lender, then the Lender receiving such
greater proportion shall purchase (for cash at face value) participations in the
Loans and participations in LC Disbursements of other Lenders to the extent
necessary so that the benefit of all such payments shall be shared by the
Lenders ratably in accordance with the aggregate amount of principal of and
accrued interest on their respective Loans and participations in LC
Disbursements; provided that (i) if any such participations are purchased and
all or any portion of the payment giving rise thereto is recovered, such
participations shall be rescinded and the purchase price restored to the extent
of such recovery, without interest, and (ii) the provisions of this paragraph
shall not be construed to apply to any payment made by any Credit Party pursuant
to and in accordance with the express terms of this Agreement or any payment
obtained by a Lender as consideration for the assignment of or sale of a
participation in any of its Loans or participations in LC Disbursements to any
assignee or participant, other than to any Credit Party or any subsidiary or
Affiliate thereof (as to which the provisions of this paragraph shall apply).
Each Credit Party consents to the foregoing and agrees, to the extent it may
effectively do so under applicable law, that any Lender acquiring a
participation pursuant to the foregoing arrangements may exercise against the
Borrower rights of set-off and counterclaim with respect to such participation
as fully as if such Lender were a direct creditor of the Borrower in the amount
of such participation.
(d) Unless the Agent shall have received notice from the Borrower
prior to the date on which any payment is due to the Agent for the account of
the Lenders or the Issuing Bank hereunder that the Borrower will not make such
payment, the Agent may assume that the Borrower has made such payment on such
date in accordance herewith and may, in reliance upon such assumption,
distribute to the Lenders or the Issuing Bank, as the case may be, the amount
due. In such event, if the Borrower has not in fact made such payment, then each
of the Lenders or the Issuing Bank, as the case may be, severally agrees to
repay to the Agent forthwith on demand the amount so distributed to such Lender
or the Issuing Bank with interest thereon, for each day from and including the
date such amount is distributed to it to but excluding the date of
37
39
payment to the Agent, at the greater of the Federal Funds Effective Rate and a
rate determined by the Agent in accordance with banking industry rules on
interbank compensation.
(e) If any Lender shall fail to make any payment required to be
made by it pursuant to Section 2.04(d) or (e), 2.05(b), or 2.17(d), then the
Agent may, in its discretion (notwithstanding any contrary provision hereof),
apply any amounts thereafter received by the Agent for the account of such
Lender to satisfy such Lender's obligations under such Sections until all such
unsatisfied obligations are fully paid.
SECTION 2.18 Mitigation Obligations; Replacement of Lenders.
(a) If any Lender requests compensation under Section 2.14, or if
any Credit Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
then such Lender shall use reasonable efforts to designate a different lending
office for funding or booking its Loans hereunder or to assign its rights and
obligations hereunder to another of its offices, branches or affiliates, if, in
the judgment of such Lender, such designation or assignment (i) would eliminate
or reduce amounts payable pursuant to Section 2.14 or 2.16, as the case may be,
in the future and (ii) would not subject such Lender to any unreimbursed cost or
expense and would not otherwise be disadvantageous to such Lender. The Borrower
hereby agrees to pay all reasonable costs and expenses incurred by any Lender in
connection with any such designation or assignment.
(b) If any Lender requests compensation under Section 2.14, or if
any Credit Party is required to pay any additional amount to any Lender or any
Governmental Authority for the account of any Lender pursuant to Section 2.16,
or if any Lender defaults in its obligation to fund Loans hereunder, then the
Borrower may, at its sole expense and effort, upon notice to such Lender and the
Agent, require such Lender to assign and delegate, without recourse (in
accordance with and subject to the restrictions contained in Section 9.04), all
its interests, rights and obligations under this Agreement to an assignee that
shall assume such obligations (which assignee may be another Lender, if a Lender
accepts such assignment); provided that (i) the Borrower shall have received the
prior written consent of the Agent (and, if a Commitment is being assigned, the
Issuing Bank), which consent shall not unreasonably be withheld or delayed, (ii)
such Lender shall have received payment of an amount equal to the outstanding
principal of its Loans and participations in LC Disbursements, accrued interest
thereon, accrued fees and all other amounts payable to it hereunder, from the
assignee (to the extent of such outstanding principal and accrued interest and
fees) or the Borrower (in the case of all other amounts) and (iii) in the case
of any such assignment resulting from a claim for compensation under Section
2.14 or payments required to be made pursuant to Section 2.16, such assignment
will result in a reduction in such compensation or payments. A Lender shall not
be required to make any such assignment and delegation if, prior thereto, as a
result of a waiver by such Lender or otherwise, the circumstances entitling the
Borrower to require such assignment and delegation cease to apply.
SECTION 2.19 Liens and Security Interest.
(a) Capital Commitments; Capital Calls and Other Rights. To
secure performance by the Investor REIT of the Investor REIT Obligations, and in
accordance with the
38
40
Articles of Incorporation, the Investor REIT's other Constituent Documents, the
Subscription Agreements, and the Investor Letters:
(i) pursuant to the Pledge and Security Agreement, the
Investor REIT shall grant to the Agent, for the benefit of the Secured Parties,
an exclusive, perfected first priority security interest in all of the
Collateral described therein, including the Capital Commitments and any rights
to call for and receive payment of Capital Commitments as contemplated by the
Subscription Agreements or the Articles of Incorporation and to enforce the
payment thereof or any guarantees thereof now existing or hereafter arising;
(ii) pursuant to the Cash Collateral Agreement, the
Investor REIT shall grant to the Agent, for the benefit of the Secured Parties,
an exclusive, perfected first priority security interest in the Subscription
Account and all of the proceeds thereof as more fully described in the Cash
Collateral Agreement; and
(iii) pursuant to the Pledge Agreement, the Investor
REIT shall grant to the Agent, for the benefit of the Secured Parties, an
exclusive, perfected first priority security interest in the Collateral
described therein, including all of the Investor REIT's interest in the Borrower
now existing or hereafter arising.
(b) Subscription Account.
(i) In order to secure further the performance by the
Investor REIT of the Investor REIT Obligations and to effect and facilitate the
right of the Secured Parties to offset while any Obligations are outstanding,
(A) the Investor REIT hereby irrevocably appoints the Agent as subscription
agent and the sole party entitled in the name of the Investor REIT, upon the
occurrence and during the continuance of an Event of Default, to make any
Capital Calls upon the Investors pursuant to the terms of the Subscription
Agreements or the Investor REIT's Constituent Documents, and (B) the Investor
REIT shall direct each Investor to wire transfer to the Subscription Account all
monies or sums paid or to be paid by such Investor to the Investor REIT to fund
such Investor's Capital Commitment as and when such Investor is required
pursuant to its Subscription Agreement or the Investor REIT's Constituent
Documents to fund such Capital Commitment. In addition, to the extent that the
Investor REIT receives any payments of Capital Contributions from the Investors
during the term of this Agreement, it shall immediately deposit such payments
upon receipt into the Subscription Account.
(ii) Notwithstanding anything to the contrary herein
contained, it is expressly understood and agreed that neither the Agent nor any
other Secured Party undertakes any duties, responsibilities, or liabilities with
respect to Capital Calls. Neither the Agent nor any other Secured Party shall be
required to refer to the Investor REIT's Constituent Documents or Subscription
Agreements or take any other action with respect to any other matter which might
arise in connection with the Investor REIT's Constituent Documents or
Subscription Agreements or any Capital Call. Neither the Agent nor any other
Secured Party shall have any duty to determine or inquire into any happening or
occurrence or any performance or failure of performance of any Credit Party or
any Investor. Neither the Agent nor any other Secured Party has any duty to
inquire into the use, purpose, or reasons for the making of any Capital Call or
with respect to the investment or use of the proceeds thereof.
39
41
(iii) Except as provided in Section 2.19(b)(iv), the
Investor REIT shall have no right to withdraw any funds from the Subscription
Account if, at the time thereof or after giving effect thereto, (A) the sum of
the Revolving Credit Exposures shall exceed the sum of (x) the balance remaining
in the Subscription Account plus (y) the Available Borrowing Amount or (B) there
shall exist any Default in the payment of any amount under this Agreement, any
incurable Default of any kind, or any Event of Default of any kind. Any
withdrawal permitted to be made by the Investor REIT from the Subscription
Account may be used only for uses permitted hereunder, subject to the terms
hereof and the Cash Collateral Agreement.
(iv) The Investor REIT hereby irrevocably authorizes
and directs the Secured Parties, acting through the Agent, at any time following
the occurrence and during the continuance of an Event of Default while any
Obligations are outstanding, to charge from time to time the Subscription
Account and any other accounts of the Investor REIT at any of the Secured
Parties for amounts due to the Secured Parties or any of them hereunder. The
Agent, on behalf of and in the name of the Secured Parties, is hereby
authorized, in the name of the Investor REIT, at any time or from time to time
following the occurrence and during the continuance of an Event of Default while
any Obligations are outstanding, to notify any or all parties obligated to the
Investor REIT with respect to the Capital Commitments to make all payments due
or to become due thereon directly to the Agent on behalf of the Secured Parties,
at a different account number, or to initiate one or more Capital Calls of the
Capital Commitments in order to establish cash collateral for the Letters of
Credit as contemplated by Section 2.04(j) and Section 6.04 or to pay Obligations
or Investor REIT Obligations. With or without such general notification,
following the occurrence and during the continuance of an Event of Default while
any Obligations or Investor REIT's Obligations are outstanding, the Agent, on
behalf of the Secured Parties, (i) may make Capital Calls in the Investor REIT's
name (to the extent such Capital Call is permitted under the Subscription
Agreements or the Investor REIT's Constituent Documents), (ii) may take or bring
in the Investor REIT's name (to the extent permitted under the Subscription
Agreements or the Investor REIT's Constituent Documents) all steps, actions,
suits or proceedings deemed by the Agent necessary or desirable to effect
possession or collection of payments, (iii) may complete in the Investor REIT's
name any contract or agreement of the Investor REIT (to the extent permitted
under the Subscription Agreements or the Investor REIT's Constituent Documents)
required to realize upon the Capital Commitments, (iv) may compromise in the
Investor REIT's name any claims related to the Capital Commitments, (v) may
extend credit in its own name or the name of the Investor REIT (to the extent
permitted under the Subscription Agreements or the Investor REIT's Constituent
Documents), or (vi) may exercise in the Investor REIT's name any right,
privilege, power or remedy available to the Investor REIT (without limiting any
waiver of defenses by any Investor to the exercise of any such right, privilege,
power or remedy) to realize upon the Capital Commitments. Regardless of any
provision hereof, in the absence of gross negligence or willful misconduct by
the Agent or the other Secured Parties, neither the Agent nor any of the other
Secured Parties shall ever be liable for failure to collect or for failure to
exercise diligence in the collection, possession, or any transaction concerning
all or part of the Capital Calls or Capital Commitments or sums due or paid
thereon, nor shall they be under any obligation whatsoever to anyone by virtue
of the security interest and Liens relating to the Capital Calls or Capital
Commitments.
40
42
(v) The Agent, on behalf of the Secured Parties, is
hereby authorized and empowered, following the occurrence and during the
continuance of an Event of Default while any Letter of Credit or any Obligation
is outstanding, on behalf of the Investor REIT, to endorse the name of the
Investor REIT upon any check, draft, instrument, receipt, instruction or other
document or items, including all items evidencing payment upon a Capital Call of
any Person to the Investor REIT coming into the Agent's possession, and to
receive and apply the proceeds therefrom in accordance with the terms of the
Cash Collateral Agreement, the Pledge and Security Agreement, or this Agreement.
The Agent, on behalf of the Secured Parties, is hereby granted an irrevocable
power of attorney, which is coupled with an interest, to execute all checks,
drafts, receipts, instruments, instructions or other documents, agreements, or
items on behalf of the Investor REIT, either before or after demand of payment
on the Loans or any other Obligation or Investor REIT Obligation, but only
following the occurrence and during the continuance of an Event of Default, as
shall reasonably be deemed by the Agent to be necessary or advisable to protect
the security interests and Liens in the Capital Commitments or any other
Collateral or to obtain payment and performance of any past-due Obligations, and
neither the Agent nor any other Secured Party shall incur any liability in
connection with or arising from its exercise of such power of attorney in the
absence of gross negligence or willful misconduct.
(vi) Notwithstanding anything to the contrary contained
in this Agreement, upon the occurrence and during the continuation of an Event
of Default, the Investor REIT shall be permitted within eighteen (18) days
thereafter to make a single Capital Call provided (i) the proceeds of such
Capital Call are deposited into the Subscription Account, (ii) the Investor REIT
directs that such proceeds together with any other funds held in the
Subscription Account shall be withdrawn by the Agent to prepay the Loans in
their entirety and to provide cash collateral for all Letters of Credit,
together with costs, expenses, funding losses, indemnities, interest and
penalties incurred as expressly contemplated in this Agreement and (iii) the
Commitments are terminated.
(vii) The application by the Secured Parties of such
funds hereunder shall be, unless the Agent shall otherwise agree in writing,
first, to the payment of reasonable costs and expenses due the Secured Parties
under this Agreement and the other Loan Documents, second, to the payment of
accrued interest due on each Loan and unreimbursed LC Disbursement, third, to
the payment of the principal of each Loan and to the payment of unreimbursed LC
Disbursements, fourth, to the establishment of cash collateral for outstanding
Letters of Credit, fifth, to all other Obligations and any amounts due under any
other Loan Documents, and, sixth, to the Investor REIT or to such other Person
as may be entitled thereto.
(c) Further Assurances; Agreement to Deliver Additional
Collateral Documents.
(i) Each of the Credit Parties shall execute, deliver
and acknowledge such security agreements, financing statements, assignments,
control agreements, and other collateral documents (all of which shall be deemed
part of the "Collateral Documents"), in form and substance reasonably
satisfactory to the Agent, and take such further actions from time to time, as
the Agent acting on behalf of the Secured Parties may reasonably request from
time to time for the purpose of granting to, or maintaining or perfecting in
favor of, the Secured Parties, first priority and exclusive security interests
in the Capital Calls and Capital Commitments and the other Collateral, including
providing such reasonable assurances as to the enforceability and
41
43
priority of the Liens and security interest of the Secured Parties and
assurances of due recording of the Collateral Documents as the Agent may
reasonably require.
(ii) Upon the admission of Subsequent Investors into
the Investor REIT, the Investor REIT shall use its best efforts to promptly
deliver the following to the Agent: (A) duly executed original Investor Letters
with respect to such Subsequent Investors (and, if such Investor Letter was
signed by an attorney-in-fact, an opinion of the type described in the third
sentence of Section 4.01(h)) and (B) duly executed copies of Subscription
Agreements with respect to such Subsequent Investors. In addition, if any such
Subsequent Investor has not delivered an Investor Opinion to the Agent, the
Investor REIT shall use reasonable efforts to obtain and then promptly deliver
to the Agent copies of such Subsequent Investor's Constituent Documents or
enabling legislation, as applicable, and evidence indicating the authority of
such Subsequent Investor to execute and deliver its Investor Letter and
Subscription Agreement. Notwithstanding the failure of the Investor REIT to
deliver any of the foregoing documents with respect to any Subsequent Investor,
the Investor REIT must require all Subsequent Investors to fund their Capital
Calls into the Subscription Account.
(iii) Each of the Credit Parties acknowledges that it is
a condition, among others, to the inclusion of any Subsequent Investor as an
Included Investor that such Subsequent Investor deliver to the Agent (A) an
Investor Letter, an Investor Opinion and a copy of its Subscription Agreement,
(B) if such Subsequent Investor is organized under the laws of any jurisdiction
other than the United States of America or any state thereof, a written
submission to the jurisdiction of a United States Federal District Court and a
United States state court with respect to any litigation arising out of or in
connection with its Subscription Agreement or Investor Letter or any Constituent
Document of the Investor REIT (such submission to be in form and substance
satisfactory to the Agent in its sole and absolute discretion, including
provisions relating to waiver of objections to venue, waiver of defense of
inconvenient forum, and consent to service of process, and accompanied by an
Investor Opinion as to the enforceability of such submission), and (C) if such
Subsequent Investor is a Governmental Authority or an instrumentality of a
Governmental Authority or majority-owned by a Governmental Authority or
otherwise entitled to any immunity in respect of any litigation in any
jurisdiction, court or venue, a written waiver (in form and substance
satisfactory to the Agent in its sole and absolute discretion) of any such claim
of immunity and an Investor Opinion that such waiver is enforceable or such
Subsequent Investor and its property is not entitled to any immunity with
respect to any litigation arising out of or in connection with its Subscription
Agreement or Investor Letter or any Constituent Document of the Investor REIT.
In addition, a Subsequent Investor will not be an Included Investor unless the
Agent and the Super-Required Lenders (in the case of an Investor that meets the
Applicable Requirement) or the Agent, the Issuing Bank, and all of the Lenders
(in the case of an Investor that does not meet the Applicable Requirement)
approve in writing the inclusion of such Subsequent Investor as an Included
Investor, which approval may be withheld by the Agent and each such Lender in
its sole and absolute discretion.
(d) Subordination of Claims.
(i) Until the Obligations shall be paid and satisfied
in full, the Investor REIT shall not receive or collect, directly or indirectly,
from any Investor any amount upon the Investor Claims other than pursuant to
this Section.
42
44
(ii) Without the prior written consent of the Agent,
after the occurrence and during the continuation of an Event of Default the
Investor REIT shall not (i) exercise or enforce any rights of a creditor or
other right it may have against an Investor on account of any Investor Claims,
(ii) foreclose, repossess, sequester or otherwise take steps or institute any
action or proceedings (judicial or otherwise, including the commencement of, or
joinder in, any liquidation, bankruptcy, rearrangement, debtor's relief or
insolvency proceeding) to enforce any Liens, mortgages, deeds of trust, security
interest, collateral rights, judgments or other encumbrances on assets of such
Investor held by it as security for any Investor Claims, or (iii) exercise any
rights or remedies against an Investor under a Subscription Agreement or the
Investor REIT's Constituent Documents.
(iii) Each of the Credit Parties shall cause the
Portfolio Manager to subordinate its right to the Portfolio Management Fee to
the prior payment in full in cash of the Investor REIT Obligations; provided
that so long as no Event of Default has occurred and is continuing or would
exist after giving effect thereto, the Portfolio Manager shall be entitled to
receive the Portfolio Management Fee and all other amounts payable pursuant to
the terms of the Portfolio Management Agreement as in effect on the Effective
Date.
(iv) Each of the Credit Parties shall cause the
obligations of the Borrower to its partners to be subordinated to the prior
payment in full in cash of the Obligation so that no payment with respect to any
such obligation shall be made or received while any Event of Default exists.
(e) Constituent Documents. Each of the Credit Parties agrees that
until the Commitments have expired or terminated and the principal of and
interest on each Loan and all fees payable hereunder have been paid in full and
all Letters of Credit have expired or terminated and all LC Disbursements shall
have been reimbursed, (i) no provisions of the Investor REIT's Constituent
Documents or the Subscription Agreements shall be effective to permit, and each
of the Credit Parties hereby irrevocably waives and agrees not to assert against
any Secured Party any such provision which would otherwise permit (A) the
Investor REIT to reduce the Unpaid Capital Obligation of any Investor by
treating any amount payable or distributable by the Investor REIT to the
Investor as a Capital Contribution by such Investor, (B) the Investor REIT to
waive, cancel, release or terminate, in whole or in part, the Capital
Commitments, or (C) the Investors or any other Persons to limit calls for
payment of Capital Commitments; (ii) the Secured Parties shall be entitled to
the benefit of the Investor REIT's Constituent Documents and the Subscription
Agreements to the extent that such documents set forth rights or remedies in
respect of Capital Commitments; (iii) no side letter or other agreement with any
Investor may confer on the Investor REIT, any Investor, or any other Person any
rights that are inconsistent with the ability of the Agent to call for payment
of Capital Commitments or otherwise realize upon the Collateral, unless the
effects of such provisions are explicitly stated to be subject to all such
rights of the Secured Parties under the Facility, and each of the Credit Parties
hereby irrevocably waives and agrees not to assert against any Secured Party any
such side letter or other agreement; and (iv) the Investor REIT's Constituent
Documents, the Subscription Agreements or the Investor Letters shall provide (A)
that notices of and calls for payment of Capital Commitments by the Agent shall
have the force of notices and calls by the Investor REIT, (B) that Investors
shall not be excused from funding Capital Commitments as a result of ERISA, Bank
Holding
43
45
Company Act, or similar statutory or regulatory concerns (whether at the
election of the Investor or the Investor REIT), and (C) that each Investor is
responsible to contribute capital when called upon in respect of defaults by
other Investors in making contributions (subject to overall subscription limits
for such nondefaulting Investor).
ARTICLE III
REPRESENTATIONS AND WARRANTIES
Each Credit Party represents and warrants to (and, where
applicable, agrees with) each of the Secured Parties that:
SECTION 3.01 Organization; Powers.
(a) The Borrower is a limited partnership, duly formed, validly
existing and in good standing under the laws of the State of Delaware and has
all powers and all material governmental licenses, authorizations, consents and
approvals required to own its property and assets and carry on its business as
now conducted or as presently proposed to be conducted and has been duly
qualified and is in good standing in every jurisdiction in which the failure to
be so qualified and/or in good standing is likely to have a Material Adverse
Effect.
(b) The Managing GP is a limited partnership, duly formed,
validly existing and in good standing under the laws of the State of Delaware
and has all powers and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and carry on its
business as now conducted or as presently proposed to be conducted and has been
duly qualified and is in good standing in every jurisdiction in which the
failure to be so qualified and/or in good standing is likely to have a Material
Adverse Effect.
(c) The Special GP is a limited liability company, duly formed,
validly existing and in good standing under the laws of the State of Delaware
and has all powers and all material governmental licenses, authorizations,
consents and approvals required to own its property and assets and carry on its
business as now conducted or as presently proposed to be conducted and has been
duly qualified and is in good standing in every jurisdiction in which the
failure to be so qualified and/or in good standing is likely to have a Material
Adverse Effect.
(d) The Investor REIT is a corporation, duly formed, validly
existing and in good standing under the laws of the State of Maryland, and has
all powers and all material governmental licenses, authorizations, consents and
approvals required to own its property and assets and carry on its business as
now conducted or as presently proposed to be conducted and has been duly
qualified and is in good standing in every jurisdiction in which the failure to
be so qualified and/or in good standing is likely to have a Material Adverse
Effect.
(e) Each Subsidiary, if any, is duly organized, validly existing
and in good standing under the laws of the jurisdiction of its organization, has
all requisite power and authority to carry on its business as now conducted and,
except where the failure to do so, individually or in the aggregate, could not
reasonably be expected to result in a Material Adverse
44
46
Effect, is qualified to do business in, and is in good standing in, every
jurisdiction where such qualification is required. As of the Effective Date, the
Borrower has no Subsidiaries and the only subsidiary of the Investor REIT is the
Borrower.
(f) As of the Effective Date, (i) the sole limited partners of
the Borrower are the Managing GP and the Investor REIT, (ii) the sole general
partners of the Borrower are the Managing GP and the Special GP, (iii) the
Managing GP is the sole managing general partner of the Borrower, (iv) AMB REIT
is the sole general partner of the Managing GP, and (v) the Managing GP is the
sole manager of the Special GP.
SECTION 3.02 Authorization; Enforceability.
The Transactions are within the Borrower's partnership powers and
the Investor REIT's corporate powers. Each of the Portfolio Manager and the Deal
Parties has the power and authority to execute, deliver and carry out the terms
and provisions of each of the Loan Documents and the Subscription Agreements to
which it is a party or which it is executing in a representative capacity on
behalf of another party. All necessary action has been taken (including, if
required, by partners, directors, stockholders, managers, or members, as
applicable) to authorize the Transactions. Each of the Portfolio Manager and the
Deal Parties has duly executed and delivered each Loan Document or Subscription
Agreement to which it is a party or which it is executing in a representative
capacity on behalf of another party, and each such Loan Document or Subscription
Agreement constitutes the legal, valid and binding obligation of the Portfolio
Manager or such Deal Party that is a party thereto, as the case may be,
enforceable in accordance with its terms, except as enforceability may be
limited by applicable insolvency, bankruptcy or other laws affecting creditors
rights generally, or general principles of equity, whether such enforceability
is considered in a proceeding in equity or at law.
SECTION 3.03 No Conflicts.
Neither the execution, delivery or performance by or on behalf of
the Portfolio Manager or any Deal Party (whether for itself or in a representive
capacity on behalf of another party, as the case may be) of the Loan Documents
or the Subscription Agreements, nor compliance by the Portfolio Manager or any
Deal Party with the provision of any such Loan Document or Subscription
Agreement to which it is a party, as the case may be, nor the consummation of
the transactions contemplated by the Loan Documents or the Subscription
Agreements, nor the Borrower's borrowing of the Loans or obtaining Letters of
Credit hereunder, (i) will contravene any applicable provision of any material
law, statute, rule, regulation, order, writ, injunction or decree of any
Governmental Authority, (ii) will conflict in any material respect with or
result in any breach of, any material terms, covenants, conditions or provisions
of, or constitute a material default under, or result in the creation or
imposition of (or the obligation to create or impose) any Lien (except pursuant
to the Loan Documents) upon any of the property or assets of any Deal Party or
any of its respective subsidiaries pursuant to the terms of any indenture,
mortgage, deed of trust, or other agreement or other instrument to which any
Deal Party or any of its respective subsidiaries is a party or by which it or
any of its property or assets is bound or to which it is subject, or give rise
to a right thereunder to require any payment to be made by any Credit Party or
any of its subsidiaries, (iii) will violate or cause a default under any
45
47
Constituent Document of any Person in which any Deal Party has an interest
(direct or indirect), or violate or cause a default under any Deal Party's
Constituent Documents.
SECTION 3.04 Financial Condition.
(a) The Borrower has heretofore furnished to the Lenders and the
Issuing Bank its pro forma balance sheet as of the Effective Date. Such balance
sheet presents fairly, in all material respects, the financial position of the
Borrower as of the Effective Date.
(b) As of the Effective Date, after giving effect to this
Agreement, the Investor REIT has no material liabilities, absolute or
contingent, matured or unmatured, other than its obligations under this
Agreement, the other Loan Documents, the Subscription Agreements and the
Portfolio Management Agreement and its obligations as a limited partner of the
Borrower.
SECTION 3.05 Properties.
(a) Each of the Credit Parties and its subsidiaries has good
title to, or valid leasehold interests in, all its real and personal property
material to its business, except for minor defects in title that do not
interfere with its ability to conduct its business as currently conducted or to
utilize such properties for their intended purposes.
(b) Each of the Credit Parties and its subsidiaries owns, or is
licensed to use, all trademarks, tradenames, copyrights, patents and other
intellectual property material to its business, and the use thereof by the
Credit Parties and their respective subsidiaries does not infringe upon the
rights of any other Person, except for any such infringements that, individually
or in the aggregate, could not reasonably be expected to result in a Material
Adverse Effect.
SECTION 3.06 Litigation and Environmental Matters.
(a) There are no actions, suits or proceedings by or before any
arbitrator or Governmental Authority pending against or, to the knowledge of the
Credit Parties, threatened against or affecting the Portfolio Manager or any
Deal Party or any of their respective subsidiaries (i) as to which there is a
reasonable possibility of an adverse determination and that, if adversely
determined, could reasonably be expected, individually or in the aggregate, to
result in a Material Adverse Effect (other than the Disclosed Matters) or (ii)
that seek to enjoin the entering into or performance of this Agreement, any
other Loan Document, or the Transactions.
(b) Except for the Disclosed Matters and except with respect to
any other matters that, individually or in the aggregate, could not reasonably
be expected to result in a Material Adverse Effect, neither any Deal Party, nor
any subsidiary of any Deal Party (i) has failed to comply with any Environmental
Law or to obtain, maintain or comply with any permit, license or other approval
required under any Environmental Law, (ii) has become subject to any
Environmental Liability, (iii) has received notice of any claim with respect to
any Environmental Liability or (iv) knows of any basis for any Environmental
Liability.
(c) Since the date of this Agreement, there has been no change in
the status of the Disclosed Matters that, individually or in the aggregate, has
resulted in, or materially increased the likelihood of, a Material Adverse
Effect.
46
48
SECTION 3.07 Compliance with ERISA.
(a) Neither any Credit Party nor any of its subsidiaries has any
employees as of the date of this Agreement or the Effective Date. Neither Credit
Party is an ERISA Affiliate of any other Person.
(b) Each Credit Party is qualified as a VCOC or REOC or otherwise
in compliance with an exception set forth in the Plan Asset Regulation such that
none of the assets of any Credit Party is subject to Title 1 of ERISA.
(c) The Transactions contemplated by the Loan Documents will not
constitute a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject any Secured
Party to any tax or penalty on prohibited transactions imposed under Section
4975 of the Code or Section 502(i) of ERISA or any similar state law.
SECTION 3.08 Taxes.
Each Credit Party and its subsidiaries has timely filed or caused
to be filed all Tax returns and reports required to have been filed and has paid
or caused to be paid all Taxes required to have been paid by it, except (a)
Taxes that are being contested in good faith by appropriate proceedings and for
which such Credit Party or such subsidiary, as applicable, had set aside on its
books adequate reserves or (b) to the extent that the failure to do so could not
reasonably be expected to result in a Material Adverse Effect. The charges,
accruals and reserves on the books of each Credit Party and its subsidiaries in
respect of Taxes or other governmental charges are adequate.
SECTION 3.09 Disclosure.
All information heretofore furnished by the Portfolio Manager or
any Deal Party to any Secured Party for purposes of or in connection with this
Agreement, any other Loan Document or any transaction contemplated hereby is,
and all such information hereafter furnished by the Portfolio Manager or any
Deal Party to any Secured Party will be, true and accurate in all material
respects on the date as of which such information is stated or deemed stated.
The Credit Parties have disclosed to the Lenders in writing any and all facts
which materially and adversely affect or may in the future materially and
adversely affect (to the extent the Credit Parties can now reasonably foresee),
the business, operations or financial condition of any Credit Party or its
subsidiaries, taken as a whole, or the ability of any Credit Party to perform
its obligations under this Agreement or the other Loan Documents in any material
respect.
SECTION 3.10 Solvency.
On the Effective Date and after giving effect to the transactions
contemplated by the Loan Documents occurring on the Effective Date, each Credit
Party will be Solvent. It is in the best interest of the Investor REIT and in
pursuit of the purposes for which it was organized, and reasonably necessary and
convenient in connection with the conduct of the business conducted and proposed
to be conducted by it, to induce the Secured Parties to enter into this
Agreement and to extend credit to the Borrower by making the Guarantee
contemplated by this
47
49
Agreement and granting the Collateral provided for in the Loan Documents. The
credit available under this Agreement will directly or indirectly inure to the
Investor REIT's benefit, and by virtue of the foregoing it is receiving at least
reasonably equivalent value from the Secured Parties for its Guarantee
hereunder.
SECTION 3.11 Use of Proceeds; Margin Regulations.
All proceeds of the Loans, and the Letters of Credit, will be
used by the Borrower for real estate and other investments, for working capital,
and for general corporate purposes of the Borrower, all in accordance with its
Constituent Documents, the Placement Memorandum and this Agreement. Neither any
Credit Party nor any subsidiary thereof is engaged principally, or as one of its
important activities, in the business of extending credit for the purpose of
purchasing or carrying any margin stock (within the meaning of Regulation U of
the Board). Neither the making of any Loan nor the use of the proceeds thereof
will violate or be inconsistent with the provisions of Regulations T, U or X of
the Board.
SECTION 3.12 Governmental Approvals.
No order, consent, approval, license, authorization, or
validation of, or filing (except for financing statements which have heretofore
been filed or which have been delivered to the Agent for filing), recording or
registration with, or exemption or other action by, any Governmental Authority
is required to authorize, or is required in connection with the Transactions
other than those that have already been duly made or obtained and remain in full
force and effect.
SECTION 3.13 Investment Company Act; Public Utility Holding
Company Act.
Neither Credit Party is (x) an "investment company" or a company
"controlled" by an "investment company", within the meaning of the Investment
Company Act of 1940, as amended, (y) a "holding company" or a "subsidiary
company" of a "holding company" or an "affiliate" of either a "holding company"
or a "subsidiary company" within the meaning of the Public Utility Holding
Company Act of 1935, as amended, or (z) subject to any other federal or state
law or regulation which purports to restrict or regulate its ability to borrow
money.
SECTION 3.14 Capital Contributions.
Prior to the Effective Date, the Investor REIT has satisfied all
conditions to the Investor REIT's calling for Capital Contributions by
Investors, including any and all conditions contained in the Subscription
Agreements or the Investor REIT's Constituent Documents.
SECTION 3.15 Representations and Warranties in Loan Documents.
All representations and warranties made by each Credit Party in
the Loan Documents are true and correct in all material respects as of the date
of this Agreement and the Effective Date and as of any date that any Credit
Party is expressly obligated to confirm the same under this Agreement or any
other Loan Document.
48
50
SECTION 3.16 [Reserved.]
SECTION 3.17 No Default.
No Default has occurred and is continuing, nor is there any
default under any Subscription Agreement. Neither any Credit Party nor any
subsidiary thereof is in default in any material respect beyond any applicable
grace period under or with respect to any of its Constituent Documents or any
material agreement, instrument or undertaking to which it is a party or by which
it or any of its property is bound in any respect, the existence of which
default is likely to result in a Material Adverse Effect. No Investor is in
default in any material respect beyond any applicable grace period under or with
respect to any Subscription Agreement or any of the Investor REIT's Constituent
Documents.
SECTION 3.18 Licenses, etc.
Each Credit Party and its subsidiaries has obtained and holds in
full force and effect, all material franchises, licenses, permits, certificates,
authorizations, qualifications, accreditations, easements, rights of way and
other consents and approvals which are necessary for the operation of its
business as presently conducted, the absence of which is likely to have a
Material Adverse Effect.
SECTION 3.19 Compliance With Laws.
Each Credit Party and its subsidiaries is in compliance with all
laws, rules, regulations, orders, judgments, writs and decrees of any
Governmental Authority applicable to it or its property, including all building
and zoning ordinances and codes, the failure to comply with which is likely to
have a Material Adverse Effect.
SECTION 3.20 No Burdensome Restrictions.
Neither any Credit Party nor any subsidiary thereof is a party to
any agreement or instrument or subject to any other obligation or any charter or
corporate or partnership restriction, as the case may be, which, individually or
in the aggregate, is likely to have a Material Adverse Effect.
SECTION 3.21 Brokers' Fees.
Neither any Credit Party nor any subsidiary thereof has dealt
with any broker or finder with respect to the transactions contemplated by the
Loan Documents or otherwise in connection with the Loan Documents.
SECTION 3.22 Reserved.
SECTION 3.23 Insurance.
Each Credit Party and each of its subsidiaries currently
maintains all insurance which is required to be maintained by Section 5.03.
49
51
SECTION 3.24 Security Interests and Liens.
The Pledge and Security Agreement, the Control Agreement, the
Cash Collateral Agreement, the Pledge Agreement and the financing statements
filed (or, in the case of financing statements delivered to the Agent for
filing, upon the filing thereof) create, as security for the Investor REIT
Obligations, valid and enforceable, exclusive, perfected first priority security
interests in and Liens on all of the Collateral in which the Investor REIT has
any right, title or interest, in favor of the Agent as agent for the Secured
Parties, subject to no other Liens, except as enforceability may be limited by
applicable insolvency, bankruptcy or other laws affecting creditors' rights
generally, or general principles of equity, whether such enforceability is
considered in a proceeding in equity or at law. Such security interests in and
Liens on the Collateral in which the Investor REIT has any right, title or
interest shall be superior to and prior to the rights of all third parties in
such Collateral, and, other than in connection with any future change in the
Investor REIT's name, identity or structure or the location of the Investor
REIT's chief executive office, no further recordings or filings are or will be
required in connection with the creation, perfection or enforcement of such
security interests and Liens, other than the filing of continuation statements
in accordance with applicable law. Each Lien referred to in this Section 3.24 is
and shall be the sole and exclusive Lien on the Collateral in which the Investor
REIT has any right, title or interest. The Investor REIT shall not grant or
create (and shall not suffer any other Person to grant or create) any other
Liens on any Collateral, whether junior, equal or superior in priority to the
Liens created by the Loan Documents.
SECTION 3.25 Organizational Documents.
The documents delivered pursuant to Section 4.01(j) constitute,
as of the Effective Date, all of the Constituent Documents (together with all
amendments and modifications thereof) of each Deal Party and the Portfolio
Manager. The Borrower represents that it has delivered to the Agent true,
correct, and complete copies of each of the documents set forth in this Section.
SECTION 3.26 Principal Offices.
The principal office, chief executive office and principal place
of business of each Credit Party is located at 000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx,
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000.
SECTION 3.27 Capital Commitments and Investors.
Schedule 3.27 sets forth the names of all of the Investors and
their respective Capital Commitments and Unpaid Capital Obligations as of the
Effective Date. Schedule 3.27 also indicates which Investors, if any, are (i)
organized under the laws of any jurisdiction other than the United States of
America or any state thereof or (ii) a Governmental Authority or an
instrumentality of a Governmental Authority or majority owned by a Governmental
Authority or otherwise entitled to any immunity in respect of any litigation in
any jurisdiction, court or venue. Schedule 3.27 also indicates, as of the
Effective Date, (i) the aggregate Capital Commitments, (ii) the aggregate amount
of Capital Calls made on or prior to the Effective Date, (iii) the aggregate
amount of such Capital Calls that have been funded, and (iv) the aggregate
amount of such Capital Calls that remain to be funded, all of which amount
remaining to be funded is the subject of Pending Capital Calls. Each of the
Subscription Agreements is in the form previously
50
52
furnished to the Agent except for the completion of blank spaces, the date and
the name of the Investor, and except for such other changes as the Investor REIT
may specify in writing to the Agent (which the Investor REIT may do by marking a
copy to highlight or otherwise indicate the changes).
SECTION 3.28 Subsidiaries.
The direct and indirect Subsidiaries of each Credit Party and
their respective business forms, jurisdictions of organization, addresses,
respective equity owners and respective ownership interests thereof, including
diagrams or charts showing the structure and ownership of each such Subsidiary,
are set forth on Schedule 3.28 as may be amended from time to time pursuant to
supplements furnished from time to time to the Agent. Except as so disclosed on
Schedule 3.28, no Credit Party has any direct or indirect Subsidiaries or
investments in, or joint ventures or partnerships with (or other arrangements
under which it may become liable for any obligations of any entity by virtue of
holding an equity interest therein), any Person as of the Effective Date.
SECTION 3.29 Subscription Facility.
The obligations of the Investor REIT under this Agreement
constitute a "Guarantee" as defined in each Subscription Agreement. The Secured
Parties collectively constitute the "Lenders" as defined in each Subscription
Agreement. The assignment or pledge pursuant to the Loan Documents by the
Investor REIT of the Subscription Agreements and Capital Commitments of the
Investors and the execution and delivery of the Investor Letters by the Investor
REIT as attorney-in-fact for the Investors are expressly authorized by Section
5.7 of each Subscription Agreement.
SECTION 3.30 Year 2000.
Substantially all reprogramming required to permit the proper
functioning, in and following the year 2000, of (i) computer systems of the
Portfolio Manager, the Deal Parties or their respective subsidiaries, (ii)
equipment of the Portfolio Manager, the Deal Parties or their respective
subsidiaries containing embedded microchips, and (iii) to the best of each
Credit Party's knowledge, systems and equipment supplied by others but used by
the Portfolio Manager, the Deal Parties or any of their respective subsidiaries
or with which systems of the Portfolio Manager, the Deal Parties or any of their
respective subsidiaries interfaces and the testing of all such systems and
equipment, as so reprogrammed, has been completed. The cost to the Portfolio
Manager, the Deal Parties and their respective subsidiaries of such
reprogramming and testing and of the reasonably foreseeable consequences of year
2000 programming, systems and equipment failures to the Portfolio Manager, the
Deal Parties and their respective subsidiaries (including reprogramming errors
and the failure of others' systems or equipment) will not result in a Default or
a Material Adverse Effect. The computer and management information systems of
the Portfolio Manager, the Deal Parties and their respective subsidiaries are
and, with ordinary course upgrading and maintenance, will continue for the term
of this Agreement to be, sufficient to permit each of the Credit Parties and
their respective subsidiaries to conduct its business without a Material Adverse
Effect.
51
53
SECTION 3.31 REIT Status.
The Investor REIT is organized in conformity with the
requirements for qualification as a real estate investment trust under the Code.
The Investor REIT is in a position to qualify for its current fiscal year as a
real estate investment trust under the Code and its proposed methods of
operation will enable it so to qualify.
ARTICLE IV
CONDITIONS
SECTION 4.01 Effective Date.
The obligations of the Lenders to make Loans and of the Issuing
Bank to issue Letters of Credit hereunder shall not become effective until the
date when each of the following conditions is satisfied (or waived in accordance
with Section 9.02), each document described below to be dated the Effective Date
unless otherwise indicated:
(a) The Agent shall have received from each party hereto either
(i) a counterpart of this Agreement signed on behalf of such party or (ii)
written evidence satisfactory to the Agent (which may include telecopy
transmission of a signed signature page of this Agreement) that such party has
signed a counterpart of this Agreement.
(b) The Agent shall have received from the Borrower a signed
promissory note for the account of each Lender requesting the same, in form
reasonably satisfactory to the Agent.
(c) The Agent shall have received from each party thereto either
(i) a counterpart of the Pledge and Security Agreement, the Cash Collateral
Agreement, the Control Agreement, the Pledge Agreement, and the Recognition
Agreement signed on behalf of such party or (ii) written evidence satisfactory
to the Agent that such party has signed a counterpart thereof.
(d) The Agent shall have received copies of fully executed
Subscription Agreements (dated as of a date not later than the Effective Date)
from all Investors as of the Effective Date.
(e) Except as set forth on Schedule 4, the Agent shall have
received signed original Investor Letters (dated as of a date not later than the
Effective Date) from all Investors as of the Effective Date.
(f) The Agent shall have received from the Investor REIT signed
UCC financing statements satisfactory to the Agent with respect to the Pledge
Agreement, the Pledge and Security Agreement and the Cash Collateral Agreement
or written evidence satisfactory to the Agent that the same have been filed or
submitted for filing in the appropriate public filing office(s).
(g) The Agent shall have received a written opinion (addressed to
the Agents, the Issuing Bank and the Lenders) of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, counsel to the Deal
52
54
Parties, of Xxxxxxx Xxxxx Xxxxxxx & Ingersoll, LLP, Maryland counsel to the
Investor REIT and the Portfolio Manager, and of Xxxxx X. Xxxxx, Esq., counsel to
the Managing GP and AMB REIT, substantially in the form of Exhibit 4.01(g), and
covering such other matters relating to the Portfolio Manager, the Deal Parties,
their respective Constituent Documents, the Loan Documents, or the Transactions
as the Agent or the Required Lenders shall reasonably request. Each Credit Party
hereby requests such counsel to deliver such opinions, which may be delivered by
telecopy to the Agent, with the signed originals to follow within seven (7) days
after the Effective Date.
(h) The Agent shall have received an Investor Opinion from
counsel to each Included Investor (other than any Investor listed as an "Opinion
Waiver Investor" on Schedule 1.01(B)) as of the Effective Date. For each
Included Investor, other than any Investor listed as a "Permanent Foreign Waiver
Investor" or a "Temporary Foreign Waiver Investor" on Schedule 1.01B, that is
(i) organized under the laws of any jurisdiction other than the United States of
America or any state thereof or (ii) a Governmental Authority or an
instrumentality of a Governmental Authority or majority-owned by a Governmental
Authority or otherwise entitled to any immunity in respect of any litigation in
any jurisdiction, court or venue, such Investor Opinion shall, among other
things, cover the matters described in Section 2.19(c)(iii)(B) and (C), as
applicable, and the Agent shall have received in respect of such Investor the
submission to jurisdiction and/or waiver of any immunity described in such
subsections, as applicable. In addition, for each Investor Letter signed by an
attorney-in-fact, the Agent shall have received a written opinion (addressed to
the Agents, the Issuing Bank and the Lenders) of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, counsel to the Deal Parties, in form and substance satisfactory to the
Agent in its sole and absolute discretion, that such attorney-in-fact was
authorized to execute such Investor Letter on behalf of the relevant Investor
and that such Investor Letter is as binding upon the relevant Investor as if
that Investor had itself executed the Investor Letter. Each Credit Party hereby
requests such counsel to deliver such opinions.
(i) Except as set forth on Schedule 4, the Agents shall have
received all fees and other amounts due and payable on or prior to the Effective
Date, including pursuant to the Fee Letter and, to the extent invoiced,
reimbursement or payment of all expenses required to be reimbursed or paid by
the Borrower hereunder, including the reasonable fees and disbursements invoiced
through the Effective Date of Chase's special counsel, Moses & Singer LLP.
(j) Except as set forth on Schedule 4, the Agent shall have
received such documents and certificates as the Agent or its counsel may
reasonably request relating to the organization, existence and good standing of
the Portfolio Manager, the Deal Parties, the authority of the Transactions, and
any other matters relevant hereto, all in form and substance reasonably
satisfactory to the Agent, certified to be true, correct and complete by a
Responsible Officer of the Borrower as of the Effective Date.
(k) The Agent shall have received a certificate from a
Responsible Officer of each Credit Party (i) confirming compliance with the
conditions specified in Sections 4.02(c) and 4.02(d) and (ii) confirming that
all conditions under the Subscription Agreements or the Investor REIT's
Constituent Documents to the Investor REIT's calling for Capital Contributions
have been fulfilled.
53
55
(l) The Agent shall have received from each Credit Party a signed
certificate of a Responsible Officer thereof which shall certify the names of
the Persons authorized to sign the Loan Documents to be delivered pursuant to
the terms hereof by such Credit Party, together with the signatures of each such
Person and a certificate of another Responsible Officer of such Credit Party,
certifying as to the signature of such first Responsible Officer.
(m) The Agent shall have received an Acquisition Certificate with
respect to each Real Estate Interest acquired on or prior to the Effective Date.
(n) The Agent shall have received written opinions (addressed to
the Agents, the Issuing Bank and the Lenders) of Xxxxxx, Xxxxxxxxxx & Xxxxxxxxx
LLP, counsel to the Credit Parties, substantially in the form of Exhibit
4.01(n), concerning the status of the Borrower and the Investor REIT as a VCOC
or REOC and that neither the execution, delivery or performance of the Investor
Letters nor any of the Transactions will constitute a nonexempt prohibited
transaction (as such term is defined in Section 4975 of the Code or Section 406
of ERISA) that could subject any Secured Party to any tax or penalty on
prohibited transactions imposed under Section 4975 of the Code or Section 502(i)
of ERISA, and covering such other matters relating to ERISA or the Code as the
Agent or the Required Lenders shall reasonably request. Each Credit Party hereby
requests such counsel to deliver such opinions, which may be delivered by
telecopy to the Agent, with the signed originals to follow within seven (7) days
after the Effective Date.
(o) The Agent shall have received (i) a certificate from a
Responsible Officer of the Investor REIT attaching, to the extent in the
Investor REIT's possession, true and complete copies of the Constituent
Documents of each Investor and of documentation evidencing the authorization of
each Investor to execute and deliver its Subscription Agreement and Investor
Letter, or (ii) such other documentation (if any) in lieu thereof as the Agent
may require in its sole and absolute discretion.
(p) [Reserved].
(q) The Agent shall have received, in form and substance
satisfactory to the Agent in its sole and absolute discretion, one or more
written agreements effecting the subordinations referred to in Section
2.19(d)(iii) and (iv) or written evidence satisfactory to the Agent (which may
include telecopy transmission of a signed signature page thereof) that such
party has signed such agreement(s).
The Agent shall notify the Borrower, the Issuing Bank and the Lenders of the
Effective Date, and such notice shall be conclusive and binding.
SECTION 4.02 Borrowings.
The obligation of each Lender to make a Loan on the occasion of
any Borrowing and the obligation of the Issuing Bank to issue, amend, renew or
extend any Letter of Credit is subject to the satisfaction of the following
conditions:
(a) receipt by the Agent of a Borrowing Request, or the
application and information required by Section 2.04 in connection with the
issuance of a Letter of Credit;
54
56
(b) immediately after such Borrowing, the sum of the Revolving
Credit Exposures will not exceed the Available Borrowing Amount and, with
respect to each Lender (including after giving effect to its participations in
Letters of Credit), such Lender's Revolving Credit Exposure will not exceed such
Lender's Commitment;
(c) no Default shall have occurred and be continuing immediately
before or after giving effect to the making of such Loans or the issuance,
amendment, renewal or extension of such Letter of Credit;
(d) the representations and warranties of each Credit Party
contained in this Agreement and the other Loan Documents shall be true and
correct in all material respects on and as of the date of such Borrowing both
before and after giving effect to the making of such Loans or the issuance,
amendment, renewal or extension of such Letter of Credit; and since the
Effective Date there shall have been no material adverse change in the business,
assets, operations, prospects or condition, financial or otherwise, of the
Borrower and its Subsidiaries, taken as a whole, or of the Investor REIT and its
subsidiaries, taken as a whole;
(e) no law or regulation shall have been adopted, no order,
judgment or decree of any Governmental Authority shall have been issued, and no
litigation shall be pending or threatened, which enjoins, prohibits or restrains
(or with respect to any litigation seeks to enjoin, prohibit or restrain), the
making or repayment of the Loans or the reimbursement of LC Disbursements, the
issuance of any Letter of Credit or any participations therein or the
consummation of any of the other Transactions;
(f) no event, act or condition shall have occurred and be
continuing after the Effective Date which, in the reasonable judgment of the
Agent, has had or is likely to have a Material Adverse Effect;
(g) the Investor REIT shall have delivered to the Agent each
signed original Investor Letter and a copy of each executed Subscription
Agreement not previously delivered under this Section or Section 4.01; and
(h) receipt by the Agent of a certificate of the Investor REIT in
the form set forth as Exhibit 4.02(h) setting forth the Investors and the
Capital Commitment and Unpaid Capital Obligation of each Investor as of the date
of such Borrowing.
Each Borrowing hereunder shall be deemed to be a representation and warranty by
the Borrower on the date of such Borrowing as to the facts specified in clauses
(b), (c), (d), (e), (g) and (h) of this Section.
ARTICLE V
COVENANTS
Until the Commitments have expired or been terminated and the
principal of and interest on each Loan and all fees payable hereunder shall have
been paid in full and all Letters of
55
57
Credit shall have expired or terminated and all LC Disbursements shall have been
reimbursed, each Credit Party covenants and agrees that:
SECTION 5.01 Information.
(a) Each Credit Party will deliver to each Secured Party as soon
as available and in any event within ninety (90) days after the end of each
fiscal year of such Credit Party, audited financial statements of such Credit
Party (with supporting schedules in form satisfactory to the Agent), including a
consolidated balance sheet of such Credit Party and its consolidated
subsidiaries as of the end of such fiscal year and the related consolidated
statements of operations and cash flows for such fiscal year, setting forth in
each case in comparative form (commencing with the first fiscal year for which
such Credit Party had a corresponding prior fiscal period) the figures for the
previous fiscal year (if any), all reported on by Xxxxxx Xxxxxxxx or other
independent public accountants of nationally recognized standing (without a
"going concern" or like qualification or exception and without any qualification
or exception as to the scope of such audit) to the effect that such consolidated
financial statements present fairly in all material respects the financial
condition and results of operations of such Credit Party and its consolidated
subsidiaries on a consolidated basis in accordance with GAAP consistently
applied;
(b) Each Credit Party will deliver to each Secured Party as soon
as available and in any event within sixty (60) days after the end of each of
the first three quarters of each fiscal year of such Credit Party, a
consolidated balance sheet of such Credit Party and its consolidated
subsidiaries as of the end of such quarter and the related consolidated
statements of operations and cash flows for such quarter and for the portion of
such Credit Party's fiscal year ended at the end of such quarter, setting forth
in each case in comparative form (commencing with the first fiscal quarter for
which such Credit Party had a corresponding quarter in the prior fiscal year)
the figures for the corresponding period or periods of the previous fiscal year
(if any), together with supporting schedules in form satisfactory to the Agent;
provided that such quarterly financial statements shall not be required in
respect of the quarter ending September 30, 1999;
(c) The Investor REIT will deliver to each Secured Party
concurrently with the delivery of each set of its financial statements referred
to in Section 5.01(a) or 5.01(b), a certificate of a Responsible Officer of the
Investor REIT (the "Investors' Commitments Certificate") substantially in the
form attached as Exhibit 5.01(c), (i) setting forth the respective Capital
Commitments and Unpaid Capital Obligations of each Investor and a calculation of
the Available Borrowing Amount (all as of the end of the relevant quarter), (ii)
specifying changes, if any, in the names of Investors, and (iii) listing all
Subsequent Investors who have not satisfied each of the requirements of Section
2.19(c)(i);
(d) Each Credit Party will deliver to each Secured Party
simultaneously with the delivery of each set of financial statements referred to
in Section 5.01(a) or 5.01(b), a certificate of a Responsible Officer, (i)
stating whether any Default exists on the date of such certificate and, if any
Default then exists, setting forth the details thereof and the action which such
Credit Party is taking or proposes to take with respect thereto; and (ii)
certifying (x) that such financial statements fairly present the financial
condition and the results of operations and cash flows of such Credit Party and
its consolidated subsidiaries on the dates and for the periods indicated, in
accordance with GAAP consistently applied, subject, in the case of interim
financial statements,
56
58
to normally recurring year-end adjustments and the absence of footnotes, and (y)
that such officer has reviewed the terms of the Loan Documents and has made, or
caused to be made under his or her supervision, a review in reasonable detail of
the business and condition of such Credit Party during the period beginning on
the date through which the last such review was made pursuant to this Section
5.01(d) (or, in the case of the first certification pursuant to this Section
5.01(d), the Effective Date) and ending on a date not more than ten (10)
Business Days prior to the date of such delivery and that on the basis of such
review of the Loan Documents, the Unpaid Capital Obligations of the Investors,
the use of the proceeds of the Loans and the use of the Letters of Credit and
the business and condition of such Credit Party, to the actual knowledge of such
officer, no Default occurred or, if any such Default has occurred, specifying
the nature and extent thereof and, if continuing, the action such Credit Party
proposes to take in respect thereof;
(e) Each Credit Party will deliver to each Secured Party promptly
and in any event within five (5) days after any Responsible Officer of such
Credit Party obtains knowledge of (i) any Default, if such Default is then
continuing, (ii) any litigation or governmental proceeding pending or action
threatened against or involving the Portfolio Manager or any Deal Party or any
Real Estate Interest of the Borrower or any of its Subsidiaries as to which
there is a reasonable possibility of an adverse determination and which, if
adversely determined, is reasonably likely to, individually or in the aggregate,
result in a Material Adverse Effect, (iii) any monetary or other material
default, if such default is then continuing, under any Permitted Recourse Debt,
or (iv) any other event, act or condition which is likely to result in a
Material Adverse Effect, a certificate of a Responsible Officer of such Credit
Party, setting forth the details thereof and the action which such Credit Party
is taking or proposes to take with respect thereto.
(f) The Investor REIT will deliver to each Secured Party to the
extent not otherwise provided hereunder, promptly upon the sending thereof to
Investors generally, copies of all financial statements, material reports,
material notices and other material information relating to any Credit Party so
sent;
(g) The Investor REIT will deliver to each Secured Party promptly
upon the receipt thereof, copies of all financial statements, material reports,
material notices, and other material information received by the Investor REIT
from Investors, including notices of default, notices of the election or
exercise of rights or remedies under the Investor REIT's Constituent Documents
or any Subscription Agreement, notices relating in any way to an Investor's
Capital Commitment and any notice containing any reference to misconduct of the
Investor REIT;
(h) Each Credit Party will deliver to each Secured Party promptly
and in any event within ten (10) Business Days after such Credit Party obtains
actual knowledge of any of the following events, a certificate of a Responsible
Officer of such Credit Party, specifying the nature of such condition and such
Credit Party's or, if such Credit Party has actual knowledge thereof, the
Environmental Affiliate's proposed initial response thereto: (i) the receipt by
such Credit Party, or, if such Credit Party has actual knowledge thereof,
receipt by any of the Environmental Affiliates, of any written communication,
whether from a Governmental Authority, citizens group, employee or otherwise,
that alleges that such Credit Party, or, if such Credit Party has actual
knowledge thereof, any of the Environmental Affiliates, is not in compliance
with any applicable Environmental Law, and such noncompliance is likely to have
a Material Adverse Effect, (ii) such Credit Party shall obtain actual knowledge
that there exists any Environmental
57
59
Claim pending or threatened against such Credit Party or any Environmental
Affiliate as to which there is a reasonable possibility of an adverse
determination and which, if adversely determined, is reasonably likely to,
individually or in the aggregate, result in a Material Adverse Effect or (iii)
such Credit Party obtains actual knowledge of any release, emission, discharge
or disposal of any Hazardous Materials that is likely to form the basis of any
Environmental Claim against such Credit Party or any Environmental Affiliate as
to which there is a reasonable possibility of an adverse determination and
which, if adversely determined, is reasonably likely to, individually or in the
aggregate, result in a Material Adverse Effect;
(i) Each Credit Party will deliver to each Secured Party from
time to time such additional information regarding the financial position or
business of each Credit Party and its subsidiaries as the Agent, at the request
of the Issuing Bank or any Lender, may reasonably request in writing (including
information or documentation as to the status of their efforts to address year
2000 computer related considerations);
(j) The Investor REIT will deliver to each Secured Party upon the
sending of a Capital Demand Notice, (i) a copy of such Capital Demand Notice and
(ii) an Investors' Commitments Certificate completed assuming each Investor
complies with its obligation to fund its Unpaid Capital Obligations pursuant to
such Capital Demand Notice;
(k) The Investor REIT will deliver to each Secured Party (i) to
the extent otherwise available, within ninety (90) days after the end of the
fiscal year of each Investor, such Investor's financial statements as of the end
of such fiscal year, reported on by independent public accountants to the extent
available, and (ii) from time to time upon the request of the Agent, a
certificate of any Investor setting forth the remaining amount of its Capital
Commitment which it is obligated to fund;
(l) The Borrower will deliver to each Secured Party as soon as
available and in any event within sixty (60) days after the end of each quarter
of each fiscal year of the Borrower, a completed and signed Acquisition
Certificate with respect to each Real Estate Interest acquired by the Borrower
or its Subsidiaries during such quarter;
(m) The Investor REIT will deliver to each Secured Party promptly
and in any event within five (5) Business Days after the Investor REIT obtains
actual knowledge of the occurrence of an Investor Disqualification Event
concerning an Included Investor, a notice setting forth the Investor
Disqualification Event, the Investor REIT's calculation of the Available
Borrowing Amount after taking into account such Investor Disqualification Event,
and the Investor REIT's calculation of the amount (if any) which the Investor
REIT is required to repay pursuant to Section 2.10 as a result of such Investor
Disqualification Event;
(n) [Reserved]
(o) At the request of the Agent, each Credit Party will deliver
to each Secured Party promptly and in any event within sixty (60) days after the
first day of each Annual Valuation Period for such Credit Party, a legal opinion
(in form and substance reasonably acceptable to the Agent) of Xxxxxx, Xxxxxxxxxx
& Xxxxxxxxx LLP (or other counsel for such Credit
58
60
Party reasonably acceptable to the Agent) that such Credit Party has remained
and still is a VCOC or REOC; and
(p) Each Credit Party will deliver to each Secured Party promptly
and in any event within five (5) Business Days after receipt thereof, a copy of
any management letter or management report from the accountants referred to in
Section 5.01(a).
SECTION 5.02 Payment of Obligations.
Each Credit Party will, and will cause each of its subsidiaries
to, pay and discharge, at or before maturity, all of its respective material
obligations and liabilities, including any obligation pursuant to any agreement
by which it or any of its properties is bound and any Tax liabilities, except
where (i) the validity or amount thereof is being contested in good faith by
appropriate proceedings diligently pursued, (ii) such Credit Party or such
subsidiary has set aside on its books adequate reserves with respect thereto in
accordance with GAAP and (iii) the failure to make payment pending such contest
could not reasonably be expected to result in a Material Adverse Effect.
SECTION 5.03 Maintenance of Property; Insurance.
(a) Each Credit Party will, and will cause each of its
subsidiaries to, keep and maintain all property useful and necessary in its
business in good working order and condition (ordinary wear and tear excepted),
except where the failure to do so could not reasonably be expected to result in
a Material Adverse Effect.
(b) Each Credit Party (i) shall maintain, and cause each of its
subsidiaries to maintain, with financially sound and reputable insurers,
insurance in such amounts and against such risks as are customarily maintained
by reputable companies under similar circumstances, and (ii) shall furnish to
the Agent from time to time, upon written request, copies of certificates of
insurance under which such insurance is issued and such other information
relating to such insurance as such Lender, the Issuing Bank or the Agent may
reasonably request.
SECTION 5.04 Conduct of Business; Limitations on Investor REIT
Activities.
(a) Each Credit Party will engage only in business of the type
contemplated by the Placement Memorandum and such Credit Party's Constituent
Documents as in effect on the Effective Date.
(b) The Investor REIT shall have no Indebtedness of any kind or
engage in activities of any kind other than (i) owning its limited partnership
interest in the Borrower and fulfilling its obligations as a limited partner of
the Borrower, (ii) enforcing the Capital Commitments of the Investors, (iii)
maintaining its existence and good standing, (iv) satisfying the Investor REIT
Obligations, (v) paying dividends or distributions expressly permitted to be
paid under Section 5.09(a), and (vi) engaging in activities incidental to any of
the foregoing. The Investor REIT shall not (i) enter into any merger or
consolidation, (ii) Transfer all or any substantial portion of its assets, (iii)
suffer its partnership interest in the Borrower to be less than a substantial
majority interest, (iv) liquidate, windup or dissolve (or suffer any liquidation
or
59
61
dissolution), or (v) amend any of its Constituent Documents without the prior
written consent of the Agent, the Issuing Bank and the Lenders in their sole and
absolute discretion.
SECTION 5.05 Compliance with Laws.
(a) Each Credit Party will comply, and will cause each of its
subsidiaries to comply, with all applicable laws, ordinances, rules,
regulations, and requirements of Governmental Authorities (including ERISA,
Environmental Laws, and all zoning and building codes with respect to the Real
Estate Assets) except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to result in a Material Adverse
Effect.
(b) In the ordinary course of its business, the Borrower shall
conduct a periodic review of the effect of Environmental Laws on the business,
operations and properties of the Borrower and its Subsidiaries, in the course of
which it shall seek to identify and evaluate applicable liabilities and costs
(including any capital or operating expenditures required as a matter of
Environmental Law for clean-up or closure of properties presently or previously
owned, any capital or operating expenditures required as a matter of
Environmental Law to achieve or maintain compliance with Environmental Law or as
a condition of any license, permit or contract to which Borrower or any
Subsidiary is a party or a beneficiary, any related constraints on operating
activities, including any periodic or permanent shutdown of any facility or
reduction in the level of or change in the nature of operations conducted
thereat, any costs or liabilities in connection with off-site disposal of wastes
or Hazardous Materials, and any actual or potential liabilities to third
parties, including employees, and any related costs and expenses). The Borrower
shall notify the Agent immediately if, on the basis of any such review, the
Borrower has reasonably concluded that such associated potential liabilities and
costs, including the costs of compliance with Environmental Laws, are likely to
have a Material Adverse Effect.
SECTION 5.06 Inspection of Property, Books and Records.
Each Credit Party will keep, and will cause each of its
subsidiaries to keep, proper books of record and account in which full, true and
correct entries shall be made of all material financial matters and transactions
in relation to its business and activities; and will permit representatives of
the Agent, the Issuing Bank or any Lender (at such Person's expense prior to the
occurrence of an Event of Default) to visit and inspect any of its properties,
to examine and make abstracts from any of its books and records and to discuss
its affairs, finances and accounts with its officers, employees and independent
public accountants, all at such reasonable times and as often as reasonably
requested.
SECTION 5.07 Existence.
Each Credit Party shall do or cause to be done, and cause each of
its subsidiaries to do or cause to be done, all things reasonably necessary to
preserve and keep in full force and effect its existence and its tradenames,
licenses, permits, certificates, authorizations, qualifications, accreditations,
easements, rights of way and other rights, consents and approvals the
nonexistence of which is likely to have a Material Adverse Effect.
60
62
SECTION 5.08 Subscription Account.
The Investor REIT shall establish and maintain with the Agent the
Subscription Account into which all Capital Contributions contributed by the
Investors shall be deposited and maintained until application of the same in
accordance with Section 2.19 and the Cash Collateral Agreement.
SECTION 5.09 Distributions; Debt; Rate Hedging Agreements.
(a) Dividends and Distributions; Redemptions.
(i) Neither the Borrower nor the Investor REIT shall
declare or pay any dividends or distributions except as permitted under its
Constituent Documents.
(ii) Neither the Borrower nor the Investor REIT shall
declare or pay any dividends or distributions during the continuance of any
Event of Default under Section 6.01(a)(i), (ii) or (iv).
(iii) The Investor REIT shall not, while any Investor
REIT Obligation is outstanding, make any payment to purchase, redeem, retire or
acquire any of its capital stock or any option, warrant or other right to
acquire such capital stock.
(b) No Additional Debt.
(i) Except as expressly permitted in clause (ii)
below, the Borrower shall not create, incur, assume, suffer to exist or
otherwise become or remain directly or indirectly liable with respect to any
Indebtedness other than under this Facility.
(ii) Subject to clause (iii) below, the following
Indebtedness of the Borrower shall be permitted under Section 5.09(b):
(A) Indebtedness that is non-recourse to the
Borrower (other than for customary carve-outs, including for environmental
indemnities); provided that such Indebtedness shall not be permitted under this
clause (A) if in connection therewith a personal recourse claim is established
by judgment, decree or award by any court of competent jurisdiction or
arbitrator of competent jurisdiction and execution or enforcement thereof shall
not be effectively stayed for 30 consecutive days or such Indebtedness shall not
be paid or otherwise satisfied within such 30-day period; and
(B) (x) Indebtedness for trade payables incurred
in the ordinary course of business and Indebtedness arising from the endorsement
of instruments for collection in the ordinary course of business; (y)
Indebtedness (contingent or otherwise) relating to Rate Hedging Agreements; and
(z) other recourse Indebtedness; provided that the aggregate principal amount of
Indebtedness (exclusive of customary recourse carve-outs as to which no personal
recourse claim has been established by judgment, decree or award by any court of
competent jurisdiction or arbitrator of competent jurisdiction) permitted under
the foregoing clauses (y) and (z) shall at no time exceed the lesser of
$50,000,000.00 or 20% (twenty percent) of the aggregate Capital Commitments at
such time.
61
63
(iii) Notwithstanding the foregoing clause (ii), at no
time shall the Borrower incur, create, assume, suffer to exist or otherwise
become or remain directly or indirectly liable in respect of any Indebtedness in
contravention of any provision of any of its Constituent Documents or Placement
Memorandum providing debt or leverage limitations for the Borrower.
(iv) This Section 5.09(b) does not limit Indebtedness
of Subsidiaries or Affiliates of the Borrower, but does limit Guarantees or
other contingent obligations of the Borrower relating to any Indebtedness of
Subsidiaries or Affiliates of the Borrower.
(c) Rate Hedging Agreements.
The Borrower will not, and will not permit any of its
Subsidiaries to, enter into any Rate Hedging Agreement other than Rate Hedging
Agreements entered into in the ordinary course of business (not for purposes of
speculation) to hedge or mitigate risks related to interest rates or currency
exchange rates to which the Borrower or any Subsidiary is exposed in the conduct
of its business or the management of its liabilities.
SECTION 5.10 Restriction on Fundamental Changes.
(a) The Borrower shall not (i) enter into any merger or
consolidation, unless the Borrower is the surviving entity and no Default exists
after giving effect thereto, (ii) liquidate, windup or dissolve (or suffer any
liquidation or dissolution), terminate, or discontinue its business, or (iii)
except to a Subsidiary, convey, lease, sell, transfer or otherwise dispose of,
in one transaction or a series of transactions, all or any substantial part of
its business or property, whether now or hereafter acquired. Nothing in this
Section 5.10(a) shall be deemed to prohibit (i) the leasing of portions of the
Real Estate Assets in the ordinary course of business for occupancy by the
tenants thereunder, (ii) the sale of Real Estate Assets in the ordinary course
of business, or (iii) the contribution by the Borrower of assets not
constituting (individually or in the aggregate) a majority of its assets to a
Person in consideration for an equity interest in such Person provided that (A)
such equity interest represents a fair value for the assets so contributed and
(B) notice of such contribution and the details thereof are given to Agent at
least thirty (30) days (or such shorter period as is acceptable to the Agent in
its sole and absolute discretion) prior to such contribution.
(b) No Credit Party shall amend or waive (or cause or permit to
be amended or waived) any instructions to pay Capital Commitments to the
Subscription Account or any of the provisions of any Subscription Agreement or
any Constituent Document of any Credit Party, in any material respect, without
the prior written consent of the Agent, which consent will not be unreasonably
withheld or delayed if, in the opinion of the Agent, such amendment or waiver
would not be adverse to any of the Secured Parties; provided that the Investor
REIT shall not amend any of its Constituent Documents without the prior written
consent of the Agent, the Issuing Bank and the Lenders in their sole and
absolute discretion. The relevant Credit Party will deliver a written notice to
the Agent setting forth the specific details of the proposed amendment and/or
waiver at least ten (10) days (or such lesser period as may be acceptable to the
Agent in its sole and absolute discretion) prior to its proposed effective date.
Without limiting the generality of the foregoing, any amendment or waiver shall
be deemed to be adverse to the interests of the
62
64
Lenders if it (i) may adversely affect the obligations of the Investors to make
payments of Capital Commitments, (ii) may otherwise adversely affect the
Collateral for the Obligations or Investor REIT Obligations, or (iii) would
amend any Constituent Document of the Borrower in any way that would permit
consolidated leverage (excluding this Facility) greater than 65% (sixty-five
percent).
(c) Notwithstanding the foregoing, the Investor REIT may enter
into new Subscription Agreements with investors to purchase shares of Capital
Stock of the Investor REIT. The Investor REIT shall furnish to the Agent notice
thereof no less than ten (10) days after the delivery of such Subscription
Agreements to the Investor REIT.
SECTION 5.11 Capital Calls and Capital Commitments.
The Investor REIT shall not make any Capital Calls in
contravention of this Agreement. No Capital Call shall be made unless,
simultaneously with the delivery of notice of such Capital Call to the
Investors, (a) the Investor REIT has provided the Agent with a copy of the
relevant Capital Demand Notice, (b) the Investor REIT has provided the Agent
with an Investors' Commitments Certificate, (c) except in the case of a Capital
Call in accordance with Section 2.19(b)(vi), no Event of Default shall have
occurred and be continuing, and (d) the proceeds of such Capital Call are
deposited into the Subscription Account pursuant to Section 2.19 and the Cash
Collateral Agreement. The Investor REIT shall not waive, amend, modify, cancel,
release, terminate or change in any manner the Capital Commitment of any of the
Investors or the obligation of any Investor to fund the same pursuant to Capital
Calls, without the prior written consent of the Agent, which consent shall not
be unreasonably withheld or delayed if, in the opinion of the Agent in its sole
and absolute discretion, such action would not be adverse to the Secured
Parties.
SECTION 5.12 No Liens.
Neither the Borrower nor the Investor REIT shall create or suffer
to exist any mortgage, pledge, security interest or other Lien or encumbrance on
(i) the right to make Capital Calls, (ii) the Capital Commitments, (iii) the
Investor REIT's direct or indirect interest as a limited partner of the
Borrower, (iv) any other Collateral, except pursuant to the Loan Documents, or
(v) the Excluded Assets; provided that the Investor REIT's interest in the
Borrower may be subject to a junior security interest in favor of the Borrower's
other partners pursuant to the Borrower's Constituent Documents provided that
such junior security interest is subordinated to the Agent's satisfaction to the
first priority security interest therein in favor of the Agent.
SECTION 5.13 Fiscal Year; Fiscal Quarter.
Neither the Borrower nor the Investor REIT shall change its
fiscal year or any of its fiscal quarters, without the Agent's prior written
consent, which consent shall not be unreasonably withheld or delayed.
63
65
SECTION 5.14 Employees.
Neither the Borrower nor the Investor REIT shall employ or engage
any employees at any time.
SECTION 5.15 Margin Stock.
The Borrower will not, directly or indirectly, use the proceeds
of any Loan or use any Letter of Credit in a manner which will violate or be
inconsistent with Regulations T, U, or X of the Board.
SECTION 5.16 ERISA.
Each of the Borrower and the Investor REIT shall at all times be
qualified as a VCOC or REOC or otherwise comply with an exception set forth in
the Plan Asset Regulation such that none of the assets of the Borrower or the
Investor REIT is subject to Title 1 of ERISA. Neither the Borrower nor the
Investor REIT shall take any action, or omit to take any action, which would
give rise to a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA) that could subject any Secured
Party to any tax or penalty on prohibited transactions imposed under Section
4975 of the Code or Section 502(i) of ERISA.
SECTION 5.17 Other Managing General Partner.
No additional or substitute managing general partner shall be
admitted to the Borrower without the prior written consent of the Agent, the
Issuing Bank and the Required Lenders in their sole and absolute discretion.
SECTION 5.18 Investments, Loans, Etc.
The Borrower will not, and will not permit any of its
Subsidiaries to, make any investments (by way of capital contribution or
otherwise) in or loans or advances to any Person other than (a) investments in
or loans or advances to Subsidiaries or the Borrower, (b) investments in Real
Estate Interests, (c) Permitted Investments, (d) Guarantees constituting
Indebtedness permitted by Section 5.09(b), and (e) other loans or advances in
the ordinary course of business not exceeding $50,000.00 in the aggregate;
provided that no investment, loan or advance shall be permitted under this
Section unless it is also permitted under the Borrower's Constituent Documents
and not inconsistent with the Placement Memorandum.
SECTION 5.19 Prohibited Transfers.
(a) Transfers of Partner's Interest. Neither the Managing GP nor
the Special GP nor the Investor REIT shall Transfer, voluntarily, involuntarily,
by operation of law or otherwise, all or any part of its interest in the
Borrower, except with the prior written consent of the Agent, the Issuing Bank
and the Required Lenders in their sole and absolute discretion.
(b) Transfers of Investor Interests and Substitution of
Investors. If the Investor REIT shall receive any request for the sale,
assignment, pledge, grant of a security interest in, transfer or other
disposition (each, a "Transfer") of the interest of any Investor, it shall
promptly
64
66
notify the Agent and shall send to the Agent all information about such proposed
Transfer and the proposed transferee as it shall receive or otherwise become
aware of. In the event that the Investor proposing to Transfer its interest (the
"Transferor") is an Included Investor, then, prior to the effectiveness of any
such Transfer, the Investor REIT shall request in writing the consent of the
Agent, the Issuing Bank and the Super-Required Lenders (or all of the Lenders,
if the proposed transferee does not satisfy the Applicable Requirement) to
include the proposed transferee as an Included Investor, which consent may be
granted or withheld in the sole and absolute discretion of the Agent, the
Issuing Bank, and such Lenders. If the Agent, the Issuing Bank and such Lenders
do not consent to the substitution of the proposed transferee as an Included
Investor, the Investor REIT shall, prior to the effectiveness of any such
Transfer or substitution, make a Capital Call to all existing Investors,
including the Transferor, in the amount, if any, necessary to prevent the total
Revolving Credit Exposures from exceeding the Available Borrowing Amount with
such Available Borrowing Amount calculated assuming that the Transferor is not
an Included Investor. The effectiveness of any Transfer by an Included Investor
consented to by the Agent, the Issuing Bank, and such Lenders shall be
contingent upon the receipt by the Agent of (i) an Investor Letter executed by
the transferee, (ii) an Investor Opinion from counsel to the transferee (and, if
such Investor Letter was signed by an attorney-in-fact, an opinion of the type
described in the third sentence of Section 4.01(h)), (iii) if such transferee is
organized under the laws of any jurisdiction other than the United States of
America or any state thereof, a written submission to the jurisdiction of a
United States Federal District Court and a United States state court with
respect to any litigation arising out of or in connection with its Subscription
Agreement or Investor Letter or any Constituent Document of the Borrower (such
submission to be in form and substance satisfactory to the Agent in its sole and
absolute discretion, including provisions relating to waiver of objections to
venue, waiver of defense of inconvenient forum, and consent to service of
process, and accompanied by an Investor Opinion as to the enforceability of such
submission), and (iv) if such transferee is a Governmental Authority or an
instrumentality of a Governmental Authority or majority-owned by a Governmental
Authority or otherwise entitled to any immunity in respect of any litigation in
any jurisdiction, court or venue, a written waiver (in form and substance
satisfactory to the Agent in its sole and absolute discretion) of any claim of
any such immunity and an Investor Opinion that such waiver is enforceable or
that such transferee and its property is not entitled to any immunity with
respect to any litigation arising out of or in connection with its Subscription
Agreement or Investor Letter or any Constituent Document of the Borrower.
SECTION 5.20 Transactions with Affiliates.
The Borrower will not, and will not permit any of its
Subsidiaries to, Transfer (including any lease) any property to, or purchase,
lease or otherwise acquire any property from, or otherwise engage in any other
transactions with, any of its Affiliates, except (a) in the ordinary course of
business at prices and on terms and conditions not less favorable to the
Borrower or such Subsidiary than could be obtained on an arm's-length basis from
unrelated third parties, (b) transactions between or among the Borrower and its
Subsidiaries not involving any other Affiliates, (c) any dividend or
distribution permitted by Section 5.09(a), (d) transactions (including the
formation of joint ventures, partnerships, and other entities) between or among
the Borrower, its Subsidiaries and joint ventures, partnerships, and other
entities in which the Borrower directly or indirectly owns securities or other
ownership interests representing at least 50% (fifty percent) of the equity or
voting power, to the extent such transactions are permitted by
65
67
the Borrower's Constituent Documents, or (e) the payment of any fees owing to
the Managing GP or the Portfolio Manager pursuant to the Borrower's Constituent
Documents or the Portfolio Management Agreement, each as in effect on the
Effective Date, or any indemnity obligations owing to the Investor REIT, the
Managing GP or the Special GP pursuant to the Borrower's Constituent Documents
as in effect on the Effective Date (provided that with respect to the Portfolio
Management Fee and such indemnity obligations, such fees and indemnity
obligations shall only be payable so long as no Event of Default shall have
occurred and be continuing or would exist after giving effect thereto).
SECTION 5.21 Portfolio Management Agreement.
The Investor REIT will not terminate, assign, or encumber its
rights under the Portfolio Management Agreement or permit the Portfolio Manager
to cease to be at least 93% (ninety-three percent) owned and Controlled by the
Managing GP; provided that the Portfolio Manager may be replaced with the prior
written consent of the Agent, the Issuing Bank and the Required Lenders in their
sole and absolute discretion.
SECTION 5.22 Maintain REIT Status.
The Investor REIT will operate its business at all times so as to
satisfy all requirements necessary to qualify as a real estate investment trust
under Sections 856 through 860 of the Code. The Investor REIT will maintain
adequate records so as to comply with all record-keeping requirements relating
to its qualification as a real estate investment trust as required by the Code
and applicable regulations of the Department of the Treasury promulgated
thereunder and will properly prepare and timely file with the Internal Revenue
Service all returns and reports required thereby to qualify as a real estate
investment trust each year. The Investor REIT will request from its shareholders
all shareholder information required by the Code and applicable regulations of
the Department of Treasury promulgated thereunder.
ARTICLE VI
DEFAULTS
SECTION 6.01 Events of Default.
Each of the following events or conditions is an "Event of
Default":
(a) (i) the Borrower shall fail to pay any principal of any Loan
or any reimbursement in respect of any LC Disbursement when and as the same
shall become due and payable, whether at the due date thereof or at a date fixed
for prepayment thereof or otherwise;
(ii) the Borrower shall fail to pay any interest on any
Loan or any fee or any other amount (other than an amount referred to in the
foregoing clause (i)) payable under this Agreement, when and as the same shall
become due and payable, and such failure shall continue unremedied for a period
of three (3) Business Days;
66
68
(iii) any Credit Party shall fail to deliver any Capital
Contribution or any other Collateral required to be delivered by it hereunder or
under any other Loan Document, and such failure shall continue for three (3)
Business Days; or
(iv) any Credit Party shall fail to pay any other
amount not referred to elsewhere in this Section 6.01(a) that is payable
hereunder or under any other Loan Document when and as the same shall become due
and payable, and such failure shall continue unremedied for a period of five (5)
Business Days after the Agent shall have delivered a notice to the Borrower
thereof;
(b) any Credit Party (or such other party as may be bound to take
any action) shall fail to observe or perform any covenant, condition or
agreement contained in Sections 2.19(c), 2.19(d), 2.19(e), or 5.07 through 5.21
inclusive;
(c) any Credit Party shall fail to observe or perform any
covenant, condition or agreement contained in this Agreement or any other Loan
Document (other than those covered by Section 6.01(a) or (b) above and, except
to the extent a shorter time period is provided for in the applicable Loan
Document), and such failure, if capable of being remedied, shall continue
unremedied for a period of thirty (30) days after written notice thereof from
the Agent to such Credit Party (which notice will be given at the request of the
Issuing Bank or any Lender); provided that if such Default is not susceptible of
being cured with diligence within said thirty (30) day period, then such period
shall be extended for such additional period of time, not to exceed an
additional sixty (60) days, as may be reasonably necessary to cure the same
provided that such Credit Party commences such cure within such thirty (30) day
period and diligently prosecutes the same until its completion;
(d) any representation, warranty, certification or statement made
or deemed made by or on behalf of any Credit Party in or in connection with this
Agreement or any other Loan Document or any amendment or modification hereof or
thereof or any waiver hereunder or thereunder, or in any report, certificate,
financial statement or other document furnished pursuant to or in connection
with this Agreement or any other Loan Document or any amendment or modification
hereof or thereof or any waiver hereunder or thereunder, shall prove to have
been incorrect in any material respect when made or deemed made;
(e) any Deal Party other than the Special GP shall (i)
voluntarily commence any case or proceeding or file any petition seeking
liquidation, reorganization or other relief under any Federal, state or foreign
bankruptcy, insolvency, receivership or similar law now or hereafter in effect,
(ii) consent to the institution of, or fail to contest in a timely and
appropriate manner, any proceeding or petition described in Section 6.01(f),
(iii) apply for or consent to the appointment of a receiver, trustee, custodian,
sequestrator, conservator or similar official for any Deal Party other than the
Special GP or for a substantial part of its assets, (iv) file an answer
admitting the material allegations of a petition filed against it in any such
proceeding, (v) make a general assignment for the benefit of creditors, or (vi)
take any action for the purpose of effecting any of the foregoing;
(f) an involuntary case or other proceeding shall be commenced or
an involuntary petition shall be filed seeking (i) liquidation, reorganization
or other relief in respect of any Deal
67
69
Party other than the Special GP or its debts, or a substantial part of its
assets, under any Federal, state or foreign bankruptcy, insolvency, receivership
or similar law now or hereafter in effect or (ii) the appointment of a trustee,
receiver, liquidator, custodian, sequestrator, conservator or similar official
of it or any substantial part of its property, and, in any such circumstance,
such case or other proceeding or petition shall continue undismissed for sixty
(60) days or an order or decree approving or ordering any of the foregoing shall
be entered;
(g) the Investor REIT shall default in its obligations under any
Subscription Agreement;
(h) one or more Investors that individually or in the aggregate
have Capital Commitments aggregating 15% (fifteen percent) or more of the total
Capital Commitments shall repudiate, or default in, or be relieved of, their
obligation to fund any portion of their Capital Commitments;
(i) one or more judgments or decrees in an aggregate amount in
excess of $10,000,000.00 shall be rendered against one or more Credit Parties
and the same shall remain undischarged (unless coverage has been acknowledged in
writing by a reputable insurer) for a period of sixty (60) consecutive days
during which execution shall not be effectively stayed or any action shall be
legally taken by a judgment creditor to attach or levy upon any assets of any
Credit Party to enforce any such judgment or decree;
(j) (i) a judgment or decree with respect to any Environmental
Claim shall have been entered against any Credit Party or any Environmental
Affiliate or any Real Estate Asset by a court of competent jurisdiction, (ii)
any release, emission, discharge or disposal of any Hazardous Materials shall
have occurred, and such event is reasonably likely to form the basis of an
Environmental Claim by a Governmental Authority with jurisdiction against any
Credit Party or any Environmental Affiliate or any Real Estate Asset thereof, or
(iii) any Credit Party or any Environmental Affiliate shall have failed to
obtain any Environmental Approval necessary for the ownership or operation of
its business, property or assets or any such Environmental Approval shall be
revoked, terminated, or otherwise cease to be in full force and effect, in each
case, if the existence of such condition has had or is reasonably likely to have
a Material Adverse Effect;
(k) any assets of any Credit Party shall become subject to Title
1 of ERISA pursuant to the Plan Asset Regulation (or any comparable statute or
regulation applicable to the Investor);
(l) [Reserved];
(m) any Loan Document shall for any reason not be in full force
and effect, or shall not give the Agent the Liens, and the material rights,
powers and privileges purported to be created thereby; or the legality, validity
or enforceability of any Loan Document shall be contested by the Portfolio
Manager, any Deal Party or any Investor;
(n) the occurrence of any change in the financial condition of
any Deal Party other than the Special GP that the Agent reasonably determines is
likely to result in a Material Adverse Effect;
68
70
(o) the occurrence of any of the following events: (i) the
Managing GP ceases, voluntarily or involuntarily, to be a general partner of the
Borrower; (ii) the dissolution, liquidation or insolvency of the Portfolio
Manager; (iii) any material breach of any Constituent Document of any Credit
Party or the Portfolio Management Agreement or any actions inconsistent with the
Placement Memorandum by any Credit Party or the Portfolio Manager (and, if the
breach by its nature can be cured, failure to cure promptly and in any event
within thirty (30) days); or (iv) the Managing GP shall cease to own or Control
the Special GP if the Special GP continues to be a general partner of the
Borrower;
(p) any default shall occur and be continuing (beyond any
applicable grace period) under any other Permitted Recourse Debt having a
principal amount in excess of $10,000,000.00;
(q) any Credit Party shall become unable, admit in writing its
inability or fail generally to pay its debts as they become due; or
(r) any indebtedness for borrowed money of the Managing GP under
its present bank credit facility or any replacement thereof or any indebtedness
of the Managing GP under any debt securities registered pursuant to the
Securities Act of 1933, as amended from time to time, and any successor statute
or statutes, shall have been accelerated or shall be past-due.
SECTION 6.02 Rights and Remedies.
Upon the occurrence of any Event of Default described in Sections
6.01(e) or (f), the Commitments shall automatically terminate and the unpaid
principal amount of, and any and all accrued interest on, the Loans and any and
all accrued fees and other Obligations hereunder shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentment, demand, or protest or other
requirements of any kind (including valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower; and
upon the occurrence and during the continuance of any other Event of Default,
the Agent may, and at the request of the Required Lenders shall, take any or all
of the following actions: (i) exercise any of its rights and remedies pursuant
to this Agreement and the other Loan Documents, (ii) by notice to the Borrower
declare the Commitments terminated and the obligation of each Lender to make
Loans and of the Issuing Bank to issue Letters of Credit to be terminated,
whereupon the same shall forthwith terminate, or (iii) by notice to the Borrower
declare the unpaid principal amount of, and any and all accrued and unpaid
interest on, the Loans and any and all accrued fees and other Obligations
hereunder to be, and the same shall thereupon be, immediately due and payable
with all additional interest from time to time accrued thereon and without
presentment, demand, or protest or other requirements of any kind other than as
expressly provided in the Loan Documents (including valuation and appraisement,
diligence, presentment, notice of intent to demand or accelerate and notice of
acceleration), all of which are hereby expressly waived by the Borrower to the
extent permitted by law.
SECTION 6.03 Notice of Default.
The Agent shall promptly deliver to the Issuing Bank and each
Lender a copy of any notice of Default sent to any Credit Party.
69
71
SECTION 6.04 Actions in Respect of Letters of Credit.
Without limiting the provisions of Section 2.04(j):
(a) If, at any time and from time to time, any Letter of Credit
shall have been issued hereunder and an Event of Default shall have occurred and
be continuing, then, upon the occurrence and during the continuation thereof, or
in circumstances described in Section 2.10(d), the Agent may, whether in
addition to the taking by the Agent of any of the actions described in this
Article or otherwise, make a demand upon the Borrower to, and forthwith upon
such demand (but in any event within eighteen (18) days after such demand) the
Borrower shall, pay to the Agent, on behalf of the Secured Parties, in same day
funds at the Agent's office designated in such demand, for deposit in a special
cash collateral account (the "Letter of Credit Collateral Account") to be
maintained in the name of the Agent (on behalf of the Secured Parties) and under
its sole dominion and control at such place as shall be designated by the Agent,
an amount equal to the amount of the LC Exposure (or in circumstances described
in Section 2.10(d), the amount specified therein). Interest shall accrue on the
Letter of Credit Collateral Account at a rate equal to the rate on overnight
funds as determined by the Agent.
(b) The Borrower hereby pledges, assigns and grants to the Agent,
for the benefit of the Secured Parties, a Lien on and security interest in, the
following collateral (collectively, the "Letter of Credit Collateral"):
(i) the Letter of Credit Collateral Account, all cash
and other property deposited therein or credited thereto from time to time and
all certificates and instruments, if any, from time to time representing or
evidencing the Letter of Credit Collateral Account or any property deposited
therein or credited thereto;
(ii) all notes, certificates of deposit and other
instruments from time to time hereafter delivered to or otherwise possessed by
the Agent for or on behalf of the Borrower in substitution for or in respect of
any or all of the then existing Letter of Credit Collateral;
(iii) all interest, dividends, cash, instruments and
other property from time to time received, receivable or otherwise distributed
in respect of or in exchange for any or all of the then existing Letter of
Credit Collateral; and
(iv) to the extent not covered by the above clauses,
all proceeds and profits of any or all of the foregoing Letter of Credit
Collateral.
The Lien and security interest granted hereby secures the payment of all
Obligations.
(c) The Borrower hereby authorizes the Agent, for the benefit of
the Secured Parties, to apply, from time to time after funds are deposited in
the Letter of Credit Collateral Account, funds then held in the Letter of Credit
Collateral Account to the payment of any amounts, in such order as the Agent may
elect, as shall have become or shall become due and payable by the Borrower to
the Secured Parties in respect of the Letters of Credit.
70
72
(d) Neither the Borrower nor any Person claiming or acting on
behalf of or through the Borrower shall have any right to withdraw any of the
funds held in the Letter of Credit Collateral Account, except as provided in
Section 6.04(h).
(e) The Borrower agrees that it will not (i) sell or otherwise
dispose of any interest in the Letter of Credit Collateral or (ii) create or
permit to exist any Lien upon or with respect to any of the Letter of Credit
Collateral, except for the security interest created by this Section 6.04.
(f) If any Event of Default shall have occurred and be
continuing:
(i) The Agent may, in its sole and absolute
discretion, without notice to the Borrower except as may be required by law, at
any time and from time to time, charge, set off or otherwise apply all or any
part of the Letter of Credit Collateral Account to, first, any fees, expenses,
or other amounts relating to Letters of Credit, any unreimbursed LC
Disbursements and any interest thereon, and, second, any other unpaid
Obligations then due and payable, in such order as the Agent shall elect. The
rights of the Agent under this Section 6.04 are in addition to any rights and
remedies which any Secured Party may have.
(ii) The Agent may also exercise, in its sole and
absolute discretion, in respect of the Letter of Credit Collateral Account, in
addition to the other rights and remedies provided herein or otherwise available
to it, all the rights and remedies of a secured party upon default under the
Uniform Commercial Code as in effect in the State of New York at that time.
(g) The Agent shall be deemed to have exercised reasonable care
in the custody and preservation of the Letter of Credit Collateral if the Letter
of Credit Collateral is accorded treatment substantially equal to that which the
Agent accords its own property, it being understood that, assuming such
treatment, the Agent shall not have any responsibility or liability with respect
thereto.
(h) At such time as all Events of Default have been cured or
waived in writing, all Obligations have been paid, and all Letters of Credit
have been terminated, all amounts remaining in the Letter of Credit Collateral
Account shall be paid to the Borrower or to whomsoever may be lawfully entitled
to receive such surplus.
ARTICLE VII
THE AGENT
SECTION 7.01 Appointment and Authorization.
Each Lender and the Issuing Bank irrevocably appoints The Chase
Manhattan Bank as its Agent and authorizes the Agent to take such action as
agent on its behalf and to exercise such powers under this Agreement and the
other Loan Documents as are delegated to the Agent by the terms hereof or
thereof, together with all such powers as are reasonably incidental thereto.
Each Lender agrees that it shall not have any right individually to realize upon
the Collateral granted pursuant to any Loan Document, it being understood and
agreed that such
71
73
rights and remedies may be exercised by the Agent for the benefit of the Secured
Parties upon the terms thereof.
SECTION 7.02 Agent and Affiliates.
(a) Each bank serving as an Agent hereunder shall have the same
rights and powers in its capacity as a Lender as any other Lender and may
exercise or refrain from exercising the same as though it were not an Agent, and
such bank and its affiliates may accept deposits from, lend money to, and
generally engage in any kind of business with any Credit Party, any Subsidiary
or other Affiliate thereof, or any of the Investors as if it were not an Agent
hereunder.
(b) The Agent may perform any and all its duties and exercise its
rights and powers by or through any one or more sub-agents appointed by the
Agent. The Agent and any such sub-agent may perform any and all of its duties
and exercise its rights and powers through their respective Related Parties. The
exculpatory provisions of this Article VII and the indemnity provisions of this
Agreement and the other Loan Documents shall apply to any such sub-agent and to
the Related Parties of the Agent and any such sub-agent, and shall apply to
their respective activities in connection with the syndication of the credit
facilities provided for herein as well as activities as Agent.
SECTION 7.03 Actions of the Agent.
The Agent shall promptly forward to the Issuing Bank and each
Lender copies, or notify the Issuing Bank and each Lender as to the contents, of
all notices, financial statements and other significant materials and
communications received from any Credit Party pursuant to the terms of this
Agreement or any other Loan Document. In the event that the Borrower fails to
pay when due the principal of or interest on any Loan, the Agent shall promptly
give notice thereof to the Lenders if such payment was a regularly scheduled
payment or if the individuals administering this Agreement at the offices of the
Agent have actual knowledge of the Borrower's failure to make such payment when
due. As to any matters not expressly provided for by the Loan Documents, the
Agent 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 upon all the Lenders; provided
that the Agent shall not be required to take any action that exposes the Agent
to personal liability or that is contrary to this Agreement or applicable law.
If any Credit Party shall have made any payment of principal of and interest on
the Loans or any other amount due hereunder in accordance with Article II hereof
and the Agent shall not have distributed to each Lender its proper share of such
payment on the date on which such payment shall be received (other than as a
result of any shutdown of or disturbance in any payment system or any other
event or circumstance beyond the reasonable control of the Agent), then the
Agent shall pay such proper share to such Lender together with interest thereon
at the Federal Funds Effective Rate for each day from the date such payment
shall have been received from such Credit Party until the date such amount is
paid by the Agent to such Lender. If any Lender transfers funds to the Agent in
anticipation of the making of a Loan that is subsequently not made, then the
Agent agrees to repay such funds to such Lender upon the receipt of a notice
from such Lender requesting the repayment of such funds, together
72
74
with interest thereon at the Federal Funds Effective Rate for each day from the
date which is one Business Day after the day upon which Agent shall have
received a notice from such Lender requesting the repayment of such funds until
the date such amount is paid by the Agent to such Lender. Notwithstanding
anything to the contrary herein or in any other Loan Document, the Agent is
hereby irrevocably authorized by each Lender to release any Lien in any
Collateral (i) if such release is consented to in accordance with Section
9.02(b), or (ii) under the circumstances described in the following sentence. At
such time as the Loans and all other Obligations and Investor REIT Obligations
shall have been paid in full and all of the Letters of Credit and the
Commitments shall have terminated, the Collateral shall be released from the
Liens created by the Loan Documents, and all obligations (other than those
expressly stated to survive termination) of the Agent and each Credit Party
under the Loan Documents shall terminate, all without delivery of any instrument
or performance of any act by any Person.
SECTION 7.04 Obligations of the Agent.
The Agent shall not have any duties or obligations except those
expressly set forth hereunder or under the other Loan Documents. Without
limiting the generality of the foregoing, (a) the Agent shall not be subject to
any fiduciary or other implied duties, regardless of whether a Default has
occurred and is continuing, (b) the Agent shall not have any duty to take any
discretionary action or exercise any discretionary powers, except discretionary
rights and powers expressly contemplated hereby that the Agent is required to
exercise in writing by the Required Lenders (or such other number or percentage
of the Lenders as shall be necessary under the circumstances as provided in
Section 9.02), (c) the Agent shall not be responsible for insuring any
Collateral, for the payment of taxes, charges, assessments or Liens upon any
Collateral or otherwise as to the maintenance of any Collateral or any income
thereon or as to the preservation of rights against prior parties or any other
rights pertaining thereto (except the duty to accord such of the Collateral as
may be in its actual possession and control substantially the same care as it
accords its own assets and the duty to account for monies received by it), and
(d) except as expressly set forth herein, the Agent shall not have any duty to
disclose, and shall not be liable for the failure to disclose, any information
relating to any Deal Party, any Investor, or any of their respective
subsidiaries that is communicated to or obtained by the bank serving as Agent or
any of its Affiliates in any capacity. The Agent shall not have by reason of the
execution and delivery of the Loan Documents, the performance of any of its
obligations thereunder, or by the use of the term "Agent", a fiduciary
relationship in respect of any Lender, the Issuing Bank or any Credit Party.
SECTION 7.05 Consultation with Experts.
The Agent may consult with legal counsel (who may be counsel for
any Credit Party), independent public accountants and other experts selected by
it, and shall not be liable for any action taken or omitted to be taken by it in
accordance with the advice of any such counsel, accountants or experts.
SECTION 7.06 Liability of the Agent.
Neither the Agent nor any of its Related Parties shall be liable
for any action taken or not taken by it (i) with the consent or at the request
of the Required Lenders (or such other number or percentage of the Lenders as
shall be necessary under the circumstances as provided in
73
75
Section 9.02), or (ii) in the absence of its own gross negligence or willful
misconduct. The Agent shall be deemed not to have knowledge of any Default
unless and until written notice thereof is given to the Agent by any Credit
Party, the Issuing Bank or a Lender. Neither the Agent nor any of its Related
Parties shall be responsible for or have any duty to ascertain, inquire into or
verify (i) any statement, warranty or representation made in or in connection
with any Loan Document or any borrowing hereunder, (ii) the contents of any
certificate, report or other document delivered under any Loan Document or in
connection with any Loan Document, (iii) the performance or observance of any of
the covenants, agreements or other terms or conditions set forth in any Loan
Document, (iv) the satisfaction of any condition specified in Article IV or
elsewhere in the Loan Documents, except receipt of items required to be
delivered to the Agent, or (v) the validity, enforceability, effectiveness or
genuineness of this Agreement, the other Loan Documents or any other agreement,
instrument or document. The Agent shall be entitled to rely upon, and the Agent
shall not incur any liability for relying upon, any notice, request, consent,
certificate, statement, or other writing believed by it to be genuine or to be
signed or sent by the proper party or parties. The Agent also may rely upon any
statement made to it orally or by telephone and believed by it to be made by the
proper Person, and shall not incur any liability for relying thereon.
SECTION 7.07 Indemnification.
Each Lender shall, ratably in accordance with its Commitment,
indemnify the Agent and its Related Parties (to the extent not reimbursed by any
Credit Party as may be required under this Agreement) against any reasonable
cost or expense (including counsel fees and disbursements), claim, demand,
action, loss or liability (except such as result from such indemnitee's gross
negligence or willful misconduct) that such indemnitees may suffer or incur in
connection with this Agreement, the other Loan Documents or any action taken or
omitted by such indemnitees hereunder.
SECTION 7.08 Credit Decision.
Each Lender acknowledges that it has, independently and without
reliance upon any Agent, the Issuing Bank, any other Lender or their respective
Related Parties, and based on such documents and information as it has deemed
appropriate, made its own credit and legal analysis and decision to enter into
this Agreement. Each Lender also acknowledges that it will, independently and
without reliance upon any Agent, the Issuing Bank, any other Lender or their
respective Related Parties, and based on such documents and information as it
shall from time to time deem appropriate, continue to make its own decisions in
taking or not taking any action under or based upon this Agreement, any related
agreement, or any document furnished hereunder or thereunder.
SECTION 7.09 Successor Agent.
The Agent may resign at any time by giving notice thereof to the
Lenders and the Credit Parties. Upon any resignation by the Agent, the Required
Lenders shall have the right to appoint a successor Agent. If no successor Agent
shall have been so appointed by the Required Lenders, and shall have accepted
such appointment, within thirty (30) days after the retiring Agent gives notice
of resignation, then the retiring Agent may, on behalf of the Lenders, appoint a
successor Agent which shall be a bank with an office in New York, New York, or
an Affiliate
74
76
of any such bank. Except during the occurrence and continuance of an Event of
Default hereunder, the appointment of any successor Agent shall be subject to
the prior written consent of the Borrower, which consent shall not be
unreasonably withheld or delayed. Upon the acceptance of its appointment as the
Agent hereunder by a successor Agent, such successor Agent shall thereupon
succeed to and become vested with all the rights and duties of the retiring
Agent, and the retiring Agent shall be discharged from its duties and
obligations hereunder and under the other Loan Documents. The fees payable by
the Borrower to a successor Agent shall be the same as those payable to its
predecessor unless otherwise agreed between the Borrower and such successor.
After the Agent's resignation hereunder, the provisions of this Article and
Section 9.03 shall continue in effect for the benefit of such retiring Agent,
its sub-agents and their respective Related Parties in respect of any actions
taken or omitted to be taken by any of them while it was acting as Agent.
ARTICLE VIII
GUARANTY
SECTION 8.01 Guaranty of Obligations.
The Investor REIT hereby unconditionally and irrevocably
guarantees to the Agent, for the benefit of the Secured Parties, the prompt and
complete payment and performance by the Borrower when due (whether at stated
maturity, upon mandatory prepayment, by acceleration, or otherwise) of the
Obligations, and the Investor REIT further agrees to pay any and all expenses
(including all reasonable fees, charges and disbursements of counsel) that may
be paid or incurred by the Agent in enforcing any of such Obligations or any of
the terms hereof, this Guarantee being a guarantee of payment and not of
collectibility and being absolute and in no way conditional or contingent. In
the event any part of the Obligations shall not have been so paid in full when
due and payable, the Investor REIT will, immediately upon notice by the Agent
or, without notice, immediately upon the occurrence of an Event of Default under
Section 6.01(e) or (f), pay or cause to be paid to the Agent the amount of such
Obligations which are then due and payable and unpaid; provided that to the
extent that funds are not available in the Subscription Account or any other
account maintained by the Investor REIT to make such payment, then the Investor
REIT shall have a grace period of eighteen (18) days to make such payment so
long as within such grace period the Investor REIT shall be diligently pursuing
a call for capital contributions by its Investors in an amount sufficient to
enable the Investor REIT to satisfy its obligations under this Agreement. The
Investor REIT Obligations shall not be affected by the invalidity or
unenforceability of any Loan Document, or the unrecoverability of any of the
Obligations as against the Borrower or any other Person. For purposes hereof,
the Obligations shall be due and payable when and as the same shall be due and
payable under the terms of this Agreement or any other Loan Document
notwithstanding the fact that the collection or enforcement thereof may be
stayed or enjoined under the Bankruptcy Code or other applicable law.
75
77
SECTION 8.02 Continuing Obligation.
The Investor REIT acknowledges that the Secured Parties have
entered into this Agreement in reliance on this Article VIII being a continuing
irrevocable agreement, and the Investor REIT agrees that this Guarantee may not
be revoked in whole or in part. The obligations of the Investor REIT under this
Article VIII shall terminate when all of the Obligations have been indefeasibly
paid in full in cash and discharged; provided that:
(a) if a claim is made upon any Secured Party at any time for
repayment or recovery of any amounts or any property received by it from any
source on account of any of the Obligations and the Secured Party is obligated
to and does repay or return any amounts or property so received (including
interest thereon to the extent required to be paid by the Secured Party) or
(b) if any Secured Party becomes liable for any part of such
claim by reason of (i) any judgment or order of any Governmental Authority
having competent jurisdiction, or (ii) any settlement or compromise of any such
claim,
then the Investor REIT shall remain liable under this Agreement for the amounts
so repaid or property so returned or the amount for which the Secured Party
becomes liable (such amounts being deemed part of the Obligations) to the same
extent as if such amounts or property had never been received by such Secured
Party, notwithstanding any termination hereof or the cancellation of any
instrument or agreement evidencing any of the Obligations. Not later than
fifteen (15) days after receipt of notice from the Agent (together with evidence
of payment), the Investor REIT shall pay to the Secured Party an amount equal to
the amount of such repayment or return for which such Secured Party has so
become liable. Payments hereunder by the Investor REIT may be required by any
Secured Party on any number of occasions.
SECTION 8.03 Waivers with Respect to the Obligations.
Except to the extent expressly required by this Agreement or any
other Loan Document, the Investor REIT waives, to the fullest extent permitted
by the provisions of applicable law, all of the following (including all
defenses, counterclaims and other rights of any nature based upon any of the
following):
(a) presentment, demand for payment and protest of nonpayment of
any of the Obligations, and notice of protest, dishonor or nonperformance;
(b) notice of acceptance of this Guarantee and notice that credit
has been extended in reliance on the Investor REIT's guarantee of the
Obligations;
(c) notice of any Default or of any inability to enforce
performance of the obligations of the Borrower or any other Person with respect
to any Loan Document or notice of any acceleration of maturity or mandatory
prepayment of any Obligations;
(d) demand for performance or observance of, and any enforcement
of, any provision of this Agreement, the Obligations or any other Loan Document
or any pursuit or exhaustion of rights or remedies against the Borrower or any
other Person in respect of the
76
78
Obligations or any requirement of diligence or promptness on the part of any
Secured Party in connection with any of the foregoing;
(e) any act or omission on the part of any Secured Party which
may impair or prejudice the rights of the Investor REIT, including rights to
obtain subrogation, exoneration, contribution, indemnification or any other
reimbursement from the Borrower or any other Person, or otherwise operate as a
deemed release or discharge;
(f) any statute of limitations or any statute or rule of law
which provides that the obligation of a surety must be neither larger in amount
nor in other respects more burdensome than the obligation of the principal;
(g) any "single action" or "anti-deficiency" law which would
otherwise prevent the Agent from bringing any action, including any claim for a
deficiency, against the Investor REIT before or after the commencement or
completion of any foreclosure action, whether judicially, by exercise of power
of sale or otherwise, or any other law which would otherwise require any
election of remedies by any Secured Party;
(h) any merger, consolidation or amalgamation of the Borrower
into or with any other Person, or any Transfer (including any lease) of any of
the assets of the Borrower to any other Person, or any other change of form,
structure, or status under any law in respect of the Borrower, or any change in
the ownership of the Borrower;
(i) any increase in the principal amount of, or extension of the
time for payment of the principal of or interest on, any Obligation;
(j) all demands and notices of every kind with respect to the
foregoing;
(k) any and all other circumstances that (with or without notice
to or knowledge of the Borrower or the Investor REIT) constitute, or might be
construed to constitute, an equitable or legal discharge of the Borrower for the
Obligations or of the Investor REIT under this Article VIII; and
(l) to the extent not referred to above, all defenses (other than
payment) which the Borrower may now or hereafter have to the payment of the
Obligations, together with all suretyship defenses, which could otherwise be
asserted by the Investor REIT.
The Investor REIT represents that it has obtained the advice of counsel as to
the extent to which suretyship and other defenses may be available to it with
respect to its obligations hereunder in the absence of the waivers contained in
this Section 8.03. No delay or omission on the part of any Secured Party in
exercising any right under any other Loan Document or under any other guarantee
of the Obligations shall operate as a waiver or relinquishment of such right. No
action which any Secured Party or the Borrower may take or refrain from taking
with respect to the Obligations shall affect the provisions of this Agreement or
the obligations of the Investor REIT hereunder. The rights of the Secured
Parties shall not at any time in any way be prejudiced or impaired by any act or
failure to act on the part of the Borrower, or by any noncompliance by the
77
79
Borrower with any Loan Document, regardless of any knowledge thereof which any
Secured Party may have or otherwise be charged with.
SECTION 8.04 Power to Waive, etc.
The Investor REIT grants to each of the Agent, the Issuing Bank
and the Lenders full power in its discretion, without notice to or consent of
the Investor REIT, such notice and consent being expressly waived to the fullest
extent permitted by applicable law, and without in any way affecting the
liability of the Investor REIT under its Guarantee hereunder:
(a) to waive compliance with, and any Default under, and to
consent to any amendment to or modification or termination of any provision of,
or to give any waiver in respect of, this Agreement, any other Loan Document,
the Obligations or any guarantee thereof (each as from time to time in effect);
(b) to grant any extensions of the Obligations (for any
duration), and any other indulgence with respect thereto, and to effect any
total or partial release (by operation of law or otherwise), discharge,
compromise or settlement with respect to the obligations of the Borrower or any
other Person in respect of the Obligations, whether or not rights against the
Investor REIT under this Agreement are reserved in connection therewith;
(c) to obtain, modify or release any present or future guarantees
of, or collateral securing any of, the Obligations and to proceed or refrain
from proceeding against any such guarantees or collateral in any order;
(d) to collect or liquidate or realize upon any of the
Obligations or the Collateral in any manner or order or to refrain from
collecting or liquidating or realizing upon any of the Obligations or the
Collateral; and
(e) to extend credit under this Agreement, any other Loan
Document or otherwise in such amount as the Secured Parties may determine,
including increasing the amount of credit and the interest rate and fees with
respect thereto, even though the condition of the Borrower (financial or
otherwise, on an individual or consolidated basis) may have deteriorated since
the date hereof.
SECTION 8.05 Information regarding the Borrower; etc.
The Investor REIT has made such investigation as it deems
desirable of the risks undertaken by it in entering into this Agreement and the
other Loan Documents and is fully satisfied that it understands all such risks.
The Investor REIT waives any obligation which may now or hereafter exist on the
part of any Secured Party to inform it of the risks being undertaken by entering
into this Agreement and the other Loan Documents or of any changes in such risks
and, from and after the date hereof, the Investor REIT undertakes to keep itself
informed of such risks and any changes therein. The Investor REIT expressly
waives any duty which may now or hereafter exist on the part of any Secured
Party to disclose to the Investor REIT any matter related to the business,
operations, character, collateral, credit, condition (financial or otherwise),
income or prospects of the Borrower and its Affiliates or their properties or
management, whether now or hereafter known by any Secured Party. The Investor
REIT represents, warrants
78
80
and agrees that it assumes sole responsibility for obtaining from the Borrower
all information concerning this Agreement and the other Loan Documents and all
other information as to the Borrower and its Affiliates or their properties or
management as the Investor REIT deems necessary or desirable.
SECTION 8.06 Subrogation.
The Investor REIT agrees that, until the Obligations are paid in
full in cash, it will not exercise, and hereby waives, any right of
reimbursement, subrogation, contribution, offset or other claims against the
Borrower arising by contract or operation of law in connection with any payment
made or required to be made by the Investor REIT under this Agreement or the
other Loan Documents. After the indefeasible payment in full in cash of the
Obligations (other than Obligations in respect of contingent contractual
indemnities), the Investor REIT shall be entitled to exercise against the
Borrower all such rights of reimbursement, subrogation, contribution and offset,
and all such other claims, to the fullest extent permitted by law.
ARTICLE IX
MISCELLANEOUS
SECTION 9.01 Notices.
Except in the case of notices and other communications expressly
permitted to be given by telephone, all notices and other communications
provided for herein to any party hereunder shall be in writing and shall be
delivered by hand or overnight courier service, mailed by certified or
registered mail, or sent by telecopy, as follows: (x) in the case of any Credit
Party, the Issuing Bank or the Agent, or in the case of any Lender executing
this Agreement on the Effective Date, at its address or telecopy number set
forth on the signature pages hereof, (y) in the case of any other Lender, at its
address or telecopy number set forth in its Administrative Questionnaire, or (z)
in the case of any party, such other address or telecopy number as such party
may hereafter specify for the purpose by notice to the other parties hereto.
Each such notice or other communication shall be effective (i) if given by
telecopy, when such telecopy is transmitted to the telecopy number specified in
this Section and the appropriate confirmation is received (or if such day is not
a Business Day, on the next Business Day), (ii) if given by mail (return receipt
requested), on the earlier of receipt or three Business Days after such
communication is deposited in the mails with first class postage prepaid,
addressed as aforesaid, or (iii) if given by any other means, when delivered at
the address specified in this Section; provided that notices to the Agent under
Article II shall not be effective until received.
SECTION 9.02 Waivers; Amendments.
(a) No failure or delay by the Agent, the Issuing Bank or any
Lender in exercising any right or power hereunder or under any other Loan
Document shall operate as a waiver thereof, nor shall any single or partial
exercise of any such right or power, or any abandonment or discontinuance of
steps to enforce such a right or power, preclude any other or further exercise
thereof or the exercise of any other right or power. The rights and remedies of
the Secured Parties hereunder and under the other Loan Documents are cumulative
and are not exclusive of
79
81
any rights or remedies that they would otherwise have. No waiver of any
provision of this Agreement or consent to any departure by any Credit Party
therefrom shall in any event be effective unless the same shall be permitted by
paragraph (b) of this Section, and then such waiver or consent shall be
effective only in the specific instance and for the purpose for which given.
Without limiting the generality of the foregoing, the making of a Loan or
issuance, amendment, renewal or extension of a Letter of Credit shall not be
construed as a waiver of any Default, regardless of whether any Secured Party
may have had notice or knowledge of such Default at the time.
(b) Neither this Agreement nor any provision hereof may be
waived, amended or modified except pursuant to an agreement or agreements in
writing entered into by the Credit Parties, the Agent and the Required Lenders
or by the Credit Parties and the Agent with the consent of the Required Lenders;
provided that no such agreement shall (i) increase the Commitment of any Lender
without the written consent of such Lender, (ii) reduce the principal amount of
any Loan or LC Disbursement or reduce the rate of interest thereon, or reduce
any fees payable hereunder, without the written consent of each Lender affected
thereby, (iii) postpone the scheduled date of payment or any mandatory
prepayment of the principal amount of any Loan or LC Disbursement, or any
interest thereon, or any fees payable hereunder, or reduce the amount of, waive
or excuse any such payment, or postpone the scheduled date of expiration of any
Commitment, without the written consent of each Lender affected thereby, (iv)
release all or substantially all of the Collateral, except as contemplated by
Section 7.03, (v) consent to the release or material impairment of the Capital
Commitments of the Investors, (vi) change Section 2.17(b) or (c) in a manner
that would alter the pro rata sharing of payments required thereby, without the
written consent of each Lender, (vii) change any of the provisions of this
Section or the definition of "Required Lenders" or "Super-Required Lenders" or
any other provision hereof specifying the number or percentage of Lenders
required to waive, amend or modify any rights hereunder or make any
determination or grant any consent hereunder, or (viii) permit any Credit Party
to assign or delegate any of its obligations under the Loan Documents, without
the written consent of each Lender; provided, further, that in the event that
any Lender is any Credit Party or an Affiliate of any Credit Party, then such
Lender shall be disregarded for purposes of determining the Required Lenders or
Super-Required Lenders required for any waiver, amendment, modification or
consent; provided, further, that no such agreement shall amend, modify or
otherwise affect the rights or duties of the Agent or the Issuing Bank hereunder
without the prior written consent of the Agent or the Issuing Bank, as the case
may be.
SECTION 9.03 Expenses; Indemnity; Damage Waiver.
(a) Each Credit Party jointly and severally agrees to pay (i) all
reasonable expenses incurred by the Agent and its Affiliates (including the
reasonable fees, charges and disbursements of counsel for the Agent), in
connection with the syndication of the credit facilities provided for herein,
the preparation, execution and delivery of this Agreement and the other Loan
Documents, the administration thereof, and any amendments, modifications or
waivers of the provisions of any of the Loan Documents (whether or not the
transactions contemplated hereby or thereby shall be consummated) and (ii) all
expenses incurred by any of the Secured Parties (including reasonable fees,
charges and disbursements of any counsel for any Secured Party) in connection
with the enforcement or protection of its rights and remedies under or in
connection with the Loan Documents, including its rights under this Section, or
in connection with the Loans
80
82
made hereunder, including all such expenses incurred during any workout,
restructuring or negotiations in respect of such Loans.
(b) Each Credit Party jointly and severally agrees to indemnify
each Secured Party and each Related Party of any of the foregoing Persons (each
such Person being called an "Indemnitee") against, and hold each Indemnitee
harmless from, any and all losses, claims, damages, liabilities and related
expenses, including the fees, charges and disbursements of any counsel
(including internal counsel) for any Indemnitee, incurred by or asserted against
any Indemnitee arising out of, in connection with, or as a result of any one or
more of the following: (i) the execution or delivery of this Agreement or any
agreement or instrument contemplated hereby, the performance by the parties
hereto or thereto of their respective obligations hereunder or thereunder or the
consummation of the Transactions or any other transactions contemplated hereby,
(ii) any Loan or Letter of Credit or the use of the proceeds therefrom
(including any refusal by the Issuing Bank to honor a demand for payment under a
Letter of Credit if the documents presented in connection with such demand do
not strictly comply with the terms and conditions of such Letter of Credit),
(iii) any actual or alleged presence or release of Hazardous Materials or any
structural defects on or from any property owned or operated by any Credit Party
or any of their respective subsidiaries, or any Environmental Liability or
structural property liability related in any way to the Borrower or any of its
Subsidiaries, (iv) provided that the assets of the Borrower or the Investor REIT
are not subject to Title 1 of ERISA pursuant to the Plan Asset Regulation (or,
if such assets are so subject, provided that the indemnity herein does not
violate ERISA or itself constitute a nonexempt prohibited transaction (as such
term is defined in Section 4975 of the Code or Section 406 of ERISA)), any of
the Transactions, including the execution and delivery of any Investor Letter,
constituting a nonexempt prohibited transaction (as such term is defined in
Section 4975 of the Code or Section 406 of ERISA), or (v) any actual or
prospective claim, litigation, investigation or proceeding relating to any of
the foregoing, whether based on contract, tort or any other theory and
regardless of whether any Indemnitee is a party thereto; provided that such
indemnity shall not, as to any Indemnitee, be available to the extent that such
losses, claims, damages, liabilities or related expenses have resulted from the
gross negligence or willful misconduct of such Indemnitee.
(c) To the extent that any Credit Party fails to pay any amount
required to be paid by it to the Agent or the Issuing Bank under paragraph (a)
or (b) of this Section, each Lender severally agrees to pay to the Agent or the
Issuing Bank, as the case may be, such Lender's Applicable Percentage
(determined as of the time that the applicable unreimbursed expense or indemnity
payment is sought) of such unpaid amount; provided that the unreimbursed expense
or indemnified loss, claim, damage, liability or related expense, as the case
may be, was incurred by or asserted against the Agent or the Issuing Bank in its
capacity as such.
(d) To the extent permitted by applicable law, each Credit Party
shall not assert, and hereby waives, any claim against any Indemnitee, on any
theory of liability, for special, indirect, consequential, exemplary or punitive
damages (as opposed to direct or actual damages) arising out of, in connection
with, or as a result of, this Agreement or any agreement or instrument
contemplated hereby, the Transactions, any Loan or Letter of Credit or the use
of the proceeds thereof.
81
83
(e) All amounts due under this Section shall be payable not later
than five (5) days after written demand therefor.
SECTION 9.04 Successors and Assigns.
(a) The provisions of this Agreement shall be binding upon and
inure to the benefit of the parties hereto and their respective successors and
assigns permitted hereby (including any Affiliate of the Issuing Bank that
issues any Letter of Credit), except that neither Credit Party may assign or
otherwise transfer any of its rights or obligations hereunder without the prior
written consent of each Secured Party in its sole and absolute discretion (and
any attempted assignment or transfer by any Credit Party without such consent
shall be null and void). Nothing in this Agreement, expressed or implied, shall
be construed to confer upon any Person (other than the parties hereto, their
respective successors and assigns permitted hereby (including any Affiliate of
the Issuing Bank that issues any Letter of Credit) and, to the extent expressly
contemplated hereby, the Related Parties of each Secured Party) any legal or
equitable right, remedy or claim under or by reason of this Agreement.
(b) Any Lender may assign to one or more assignees all or a
portion of its rights and obligations under this Agreement (including all or a
portion of its Commitment and the Loans at the time owing to it); provided that
(i) except in the case of an assignment to a Lender or an Affiliate of a Lender,
the Borrower and the Agent (and, in the case of an assignment of all or a
portion of a Commitment or any Lender's obligations in respect of its LC
Exposure, the Issuing Bank) must give their prior written consent to such
assignment (which consent shall not be unreasonably withheld or delayed), (ii)
except in the case of an assignment to a Lender or an Affiliate of a Lender or
an assignment of the entire remaining amount of the assigning Lender's
Commitment, the amount of the Commitment of the assigning Lender subject to each
such assignment, and the amount of the Commitment retained by the assigning
Lender (determined as of the date the Assignment and Acceptance with respect to
such assignment is delivered to the Agent) shall not, in either case, be less
than $5,000,000.00 unless the Borrower and the Agent otherwise consent, (iii)
each partial assignment shall be made as an assignment of a proportionate part
of all the assigning Lender's rights and obligations under this Agreement, (iv)
the parties to each assignment shall execute and deliver to the Agent an
Assignment and Acceptance, together with a processing and recordation fee of
$3,500, (v) no assignment may be made to any Credit Party or an Affiliate of any
Credit Party, (vi) the assignee, if it shall not be a Lender, shall deliver to
the Agent an Administrative Questionnaire, and (vii) the assignee, if it shall
be a Foreign Lender, shall comply with Section 2.16(e); provided, further, that
if an Event of Default has occurred and is continuing, any consent of the
Borrower otherwise required under this paragraph shall not be required. Subject
to acceptance and recording thereof pursuant to paragraph (d) of this Section,
from and after the effective date specified in each Assignment and Acceptance
the assignee thereunder shall be a party hereto and, to the extent of the
interest assigned by such Assignment and Acceptance, have the rights and
obligations of a Lender under this Agreement, and the assigning Lender
thereunder shall, to the extent of the interest assigned by such Assignment and
Acceptance, be released from its obligations under this Agreement (and, in the
case of an Assignment and Acceptance covering all of the assigning Lender's
rights and obligations under this Agreement, such Lender shall cease to be a
party hereto but shall continue to be entitled to the benefits of Sections 2.14,
2.15, 2.16 and 9.03). Any assignment or transfer by a Lender of rights or
obligations under this Agreement that does not comply with this
82
84
paragraph shall be treated for purposes of this Agreement as a sale by such
Lender of a participation in such rights and obligations in accordance with
paragraph (e) of this Section.
(c) The Agent, acting for this purpose as an agent of the
Borrower, shall maintain at one of its offices in The City of New York a copy of
each Assignment and Acceptance delivered to 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 and LC Disbursements owing to, each Lender
pursuant to the terms hereof from time to time (the "Register"). The entries in
the Register shall be conclusive, and the Credit Parties, the Agent, the Issuing
Bank and the Lenders may treat each Person whose name is recorded in the
Register pursuant to the terms hereof as a Lender hereunder for all purposes of
this Agreement, notwithstanding notice to the contrary. The Register shall be
available for inspection by the Borrower, the Issuing Bank and any Lender, at
any reasonable time and from time to time upon reasonable prior notice.
(d) Upon its receipt of a duly completed Assignment and
Acceptance executed by an assigning Lender and an assignee, the assignee's
completed Administrative Questionnaire (unless the assignee shall already be a
Lender hereunder), the processing and recordation fee referred to in paragraph
(b) of this Section and any written consent to such assignment required by
paragraph (b) of this Section, the Agent shall accept such Assignment and
Acceptance and record the information contained therein in the Register. No
assignment shall be effective for purposes of this Agreement unless it has been
recorded in the Register as provided in this paragraph.
(e) Any Lender may, without the consent of any Credit Party, the
Issuing Bank or the Agent, sell participations to one or more banks or other
entities (a "Participant") in all or a portion of such Lender's rights and
obligations under this Agreement (including all or a portion of its Commitment
and the Loans owing to it); provided that (i) such Lender's obligations under
this Agreement shall remain unchanged, (ii) such Lender shall remain solely
responsible to the other parties hereto for the performance of such obligations
and (iii) the Credit Parties, the Agent, the Issuing Bank and the other Lenders
shall continue to deal solely and directly with such Lender in connection with
such Lender's rights and obligations under this Agreement. Any agreement or
instrument pursuant to which a Lender sells such a participation shall provide
that such Lender shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement; provided that such agreement or instrument may provide that such
Lender will not, without the consent of the Participant, agree to any amendment,
modification or waiver described in the first proviso to Section 9.02(b) that
affects such Participant. Subject to paragraph (f) of this Section, each Credit
Party agrees that each Participant shall be entitled to the benefits of Sections
2.14, 2.15 and 2.16 to the same extent as if it were a Lender and had acquired
its interest by assignment pursuant to paragraph (b) of this Section.
(f) A Participant shall not be entitled to receive any greater
payment under Section 2.14, 2.15 or 2.16 than the applicable Lender would have
been entitled to receive with respect to the participation sold to such
Participant, unless the sale of the participation to such Participant is made
with each Credit Party's prior written consent. A Participant that would be a
Foreign Lender if it were a Lender shall not be entitled to the benefits of
Section 2.16 unless each
83
85
Credit Party is notified of the participation sold to such Participant and such
Participant agrees, for the benefit of each Credit Party, to comply with Section
2.16(e) as though it were a Lender.
(g) Any Lender may at any time pledge or assign a security
interest in all or any portion of its rights under this Agreement to secure
obligations of such Lender, including any pledge or assignment to secure
obligations to a Federal Reserve Bank, and this Section shall not apply to any
such pledge or assignment of a security interest; provided that no such pledge
or assignment of a security interest shall release a Lender from any of its
obligations hereunder or substitute any such pledgee or assignee for such Lender
as a party hereto.
SECTION 9.05 Survival.
All covenants, agreements, representations and warranties made by
any Credit Party herein and in the certificates or other instruments delivered
in connection with or pursuant to this Agreement or the other Loan Documents
shall be considered to have been relied upon by the other parties hereto and
shall survive the execution and delivery of this Agreement and the making of any
Loans and issuance of any Letters of Credit, regardless of any investigation
made by any such other party or on its behalf and notwithstanding that any
Secured Party may have had notice or knowledge of any Default or incorrect
representation or warranty at the time any credit is extended hereunder, and
shall continue in full force and effect as long as the principal of or any
accrued interest on any Loan or any fee or any other amount payable under this
Agreement is outstanding and unpaid or any Letter of Credit is outstanding and
so long as the Commitments have not expired or terminated. The provisions of
Sections 2.14, 2.15, 2.16 and 9.03 and Article VII shall survive and remain in
full force and effect regardless of the consummation of the transactions
contemplated hereby, the repayment of the Loans, the expiration or termination
of the Letters of Credit and the Commitments or the termination of this
Agreement or any provision hereof.
SECTION 9.06 Counterparts; Integration; Effectiveness.
This Agreement may be executed in counterparts (and by different
parties hereto on different counterparts), each of which shall constitute an
original, but all of which when taken together shall constitute a single
contract. This Agreement and any separate letter agreements with respect to fees
payable to the Agent or the Issuing Bank constitute the entire contract among
the parties relating to the subject matter hereof and supersede any and all
previous agreements and understandings, oral or written, relating to the subject
matter hereof. Except as provided in Section 4.01, this Agreement shall become
effective when it shall have been executed by the Agent and when the Agent shall
have received counterparts hereof which, when taken together, bear the
signatures of each of the other parties hereto, and thereafter shall be binding
upon and inure to the benefit of the parties hereto and their respective
successors and assigns. Delivery of an executed counterpart of a signature page
of this Agreement by telecopy shall be effective as delivery of a manually
executed counterpart of this Agreement.
SECTION 9.07 Severability.
Any provision of this Agreement held to be invalid, illegal or
unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective
to the extent of such invalidity, illegality or unenforceability without
affecting the validity, legality and enforceability of the
84
86
remaining provisions hereof; and the invalidity of a particular provision in a
particular jurisdiction shall not invalidate such provision in any other
jurisdiction.
SECTION 9.08 Right of Setoff.
If an Event of Default shall have occurred and be continuing,
each Lender, the Issuing Bank and each of its respective Affiliates 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 obligations at any time
owing by such Lender, the Issuing Bank or Affiliate to or for the credit or the
account of any Credit Party against any of or all the obligations of such Credit
Party now or hereafter existing under this Agreement held by such Lender, or by
the Issuing Bank, irrespective of whether or not such Lender or the Issuing Bank
shall have made any demand under this Agreement and although such obligations
may be unmatured. The rights of each Lender and the Issuing Bank under this
Section are in addition to other rights and remedies (including other rights of
setoff) which such Lender or the Issuing Bank may have.
SECTION 9.09 GOVERNING LAW; JURISDICTION; CONSENT TO SERVICE OF
PROCESS.
(a) THIS AGREEMENT AND THE OTHER LOAN DOCUMENTS SHALL BE
CONSTRUED IN ACCORDANCE WITH AND GOVERNED BY THE LAWS OF THE STATE OF NEW YORK
(WITHOUT GIVING EFFECT TO THE PRINCIPLES THEREOF RELATING TO CONFLICT OF LAWS).
(b) Each Credit Party hereby irrevocably and unconditionally
submits, for itself and its property, to the nonexclusive jurisdiction of the
Supreme Court of the State of New York sitting in New York County and of the
United States District Court for the Southern District of New York, and any
appellate court from any thereof, in any action or proceeding arising out of or
relating to this Agreement or any other Loan Document, or for recognition or
enforcement of any judgment, and each of the parties hereto hereby irrevocably
and unconditionally agrees that all claims in respect of any such action or
proceeding may be heard and determined in such New York State or, to the extent
permitted by law, in such Federal court. Each of the parties hereto agrees that
a final judgment in any such action or proceeding shall be conclusive and may be
enforced in other jurisdictions by suit on the judgment or in any other manner
provided by law. Nothing in this Agreement shall affect any right that the Agent
or any Lender may otherwise have to bring any action or proceeding relating to
this Agreement against any Credit Party or its properties in the courts of any
jurisdiction.
(c) Each Credit Party hereby irrevocably and unconditionally
waives, to the fullest extent it may legally and effectively do so, any
objection which it may now or hereafter have to the laying of venue of any suit,
action or proceeding arising out of or relating to this Agreement or any other
Loan Document in any court referred to in paragraph (b) of this Section. Each of
the parties hereto hereby irrevocably waives, to the fullest extent permitted by
law, the defense of an inconvenient forum to the maintenance of such action or
proceeding in any such court.
(d) Each party to this Agreement irrevocably consents to service
of process in the manner provided for notices (other than notices by telecopy)
in Section 9.01. Nothing in this
85
87
Agreement will affect the right of any party to this Agreement to serve process
in any other manner permitted by law.
(e) Without limiting the foregoing, each Credit Party hereby
irrevocably designates National Registered Agents, Inc., 000 0xx Xxxxxx, Xxx
Xxxx, Xxx Xxxx 00000, as the designee, appointee and agent of such Credit Party
to receive, for and on behalf of such Credit Party, service of process in such
respective jurisdictions in any legal action or proceeding with respect to this
Agreement or any other Loan Document. It is understood that a copy of such
process served on such agent will be promptly forwarded by mail to such Credit
Party at its address set forth opposite its signature below, but the failure of
such Credit Party to receive such copy shall not affect in any way the service
of such process.
SECTION 9.10 WAIVER OF JURY TRIAL.
EACH PARTY HERETO HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED
BY APPLICABLE LAW, ANY RIGHT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL
PROCEEDING DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT,
THE OTHER LOAN DOCUMENTS OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY
(WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A)
CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS
REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE
EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES
THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS
AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS
SECTION.
SECTION 9.11 Headings.
Article and Section (and subsection) headings and any Table of
Contents used herein are for convenience of reference only, are not part of this
Agreement and shall not affect the construction of, or be taken into
consideration in interpreting, this Agreement.
SECTION 9.12 Confidentiality.
Each Secured Party agrees to maintain the confidentiality of the
Information (as defined below), except that Information may be disclosed (a) to
its and its Affiliates' directors, officers, employees and agents, including
accountants, legal counsel and other advisors (it being understood that the
Persons to whom such disclosure is made will be informed of the confidential
nature of such Information and instructed to keep such Information
confidential), (b) to the extent requested by any regulatory authority, (c) to
the extent required by applicable laws or regulations or by any subpoena or
similar legal process, (d) to any other party to this Agreement, (e) in
connection with the exercise of any remedies hereunder or under any other Loan
Document or any suit, action or proceeding relating to this Agreement or any
other Loan Document or the enforcement of rights hereunder or thereunder, (f)
subject to an agreement containing provisions substantially the same as those of
this Section, to any assignee of or Participant in, or any prospective assignee
of or Participant in, any of its rights or obligations under this Agreement, (g)
with the consent of any Credit Party, or (h) to the extent such Information (i)
becomes
86
88
publicly available other than as a result of a breach of this Section or (ii)
becomes available to any Secured Party on a nonconfidential basis from a source
other than any Credit Party. For the purposes of this Section, "Information"
means all information received from any Credit Party relating to any Credit
Party or its business, other than any such information that is available to any
Secured Party on a nonconfidential basis prior to disclosure by any Credit
Party; provided that, in the case of information received from any Credit Party
after the date hereof, such information is clearly identified at the time of
delivery as confidential. Any Person required to maintain the confidentiality of
Information as provided in this Section shall be considered to have complied
with its obligation to do so if such Person has exercised the same degree of
care to maintain the confidentiality of such Information as such Person would
accord to its own confidential information.
SECTION 9.13 Interest Rate Limitation.
Notwithstanding anything herein to the contrary, if at any time
the interest rate applicable to any Loan or other amount due hereunder, together
with all fees, charges and other amounts which are treated as interest on such
Loan or other amount under applicable law (collectively the "Charges"), shall
exceed the maximum lawful rate (the "Maximum Rate") which may be contracted for,
charged, taken, received or reserved by the Lender holding such Loan or other
party contracting for, charging, taking, receiving or reserving such other
amount in accordance with applicable law, the rate of interest payable in
respect of such Loan or other amount hereunder, together with all Charges
payable in respect thereof, shall be limited to the Maximum Rate and, to the
extent lawful, the interest and Charges that would have been payable in respect
of such Loan or other amount but were not payable as a result of the operation
of this Section shall be cumulated and the interest and Charges payable to such
party in respect of other Loans or amounts or periods shall be increased (but
not above the Maximum Rate therefor) until such cumulated amount, together with
interest thereon at the Federal Funds Effective Rate to the date of repayment,
shall have been received by such party.
SECTION 9.14 Marshalling; Recapture.
None of the Secured Parties shall be under any obligation to
marshal any assets in favor of any Credit Party or any other party or against or
in payment of any or all of the Obligations. To the extent any Lender or the
Issuing Bank receives any payment by or on behalf of any Credit Party which
payment or any part thereof is subsequently invalidated, declared to be
fraudulent or preferential, set aside or required to be repaid to any Credit
Party or any of its estates, trustees, receivers, custodians or any other party
under any bankruptcy law, state or federal law, common law or equitable cause,
then to the extent of such payment or repayment, the Obligations or part thereof
which has been paid, reduced or satisfied by the amount so repaid shall be
reinstated by the amount so repaid and shall be included within the liabilities
of such Credit Party to such Lender or the Issuing Bank, as the case may be, as
of the date such initial payment, reduction or satisfaction occurred.
SECTION 9.15 Recourse.
The Loans and the other Obligations shall be fully recourse to
each Credit Party. Notwithstanding the foregoing, no recourse under or upon any
obligation, covenant, or agreement of the Borrower contained in this Agreement
or any other Loan Document shall be had against
87
89
the Managing GP or the Special GP (other than for their fraud, theft, willful
misconduct or gross negligence), and neither the Managing GP nor the Special GP
shall be personally liable for payment of the Loans, the LC Disbursements or
other amounts due in respect thereof (all such liability being expressly waived
and released by each Secured Party). The agreements, covenants, representations
and warranties herein made by or referring to the Managing GP or the Special GP
in their individual capacity and not in their representative capacity as general
partners of the Borrower shall be fully recourse to the Managing GP or the
Special GP.
SECTION 9.16 Acknowledgements.
Each Credit Party hereby acknowledges that:
(a) it has been advised by counsel of its choice in the
negotiation, execution and delivery of this Agreement and the other Loan
Documents;
(b) none of the Secured Parties has any fiduciary relationship
with or fiduciary duty to any Credit Party arising out of or in connection with
this Agreement or any of the other Loan Documents, and the relationship between
the Secured Parties, on the one hand, and the Credit Parties, on the other hand,
in connection herewith or therewith is solely that of creditor and debtor; and
(c) no joint venture is created hereby or by the other Loan
Documents or otherwise exists by virtue of the transactions contemplated hereby
among the Lenders or among any Credit Party and the Lenders or among any Credit
Party and the Agent or among any Credit Party and the Issuing Bank or among any
combination of the foregoing.
SECTION 9.17 Syndication Agent and Administrative Agent.
Neither the Syndication Agent nor the Administrative Agent shall
have any duties, responsibilities or liabilities under this Agreement or any
other Loan Document in their respective capacities as Agents.
[SIGNATURE PAGES FOLLOW]
88
90
IN WITNESS WHEREOF, the parties hereto have caused this Credit
Agreement to be duly executed and delivered by their respective authorized
representatives as of the day and year first above written.
AMB INSTITUTIONAL ALLIANCE FUND I, L.P.,
a Delaware limited partnership
By: AMB PROPERTY, L.P., its managing general partner
By: AMB PROPERTY CORPORATION,
its general partner
By:
-------------------------------------
Name:
Title:
Address:
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
--------------------------------------
Telephone No.:
----------------------------------
Telecopy No.:
-----------------------------------
AMB INSTITUTIONAL ALLIANCE REIT I, INC.,
a Maryland corporation
By:
---------------------------------------------
Name:
Title:
Address:
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention:
--------------------------------------
Telephone No.:
----------------------------------
Telecopy No.:
-----------------------------------
S-1
91
Signature page to Credit Agreement with AMB Institutional Alliance Fund I, L.P.
and AMB Institutional Alliance REIT I, Inc.
THE CHASE MANHATTAN BANK, as a Lender, as
Issuing Bank, as Syndication Agent, and as Agent
By:
-------------------------------------
Name:
Title:
Address:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxx X. Xxxxxxxx, Xx.
Telephone No. : (000) 000-0000
Telecopy No.: (000) 000-0000
with copies to:
The Chase Manhattan Bank
000 Xxxx Xxxxxx
00xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xxxxxxx X. Xxxxx, Esq.
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
and
The Chase Manhattan Bank
One Chase Xxxxxxxxx Xxxxx
0xx Xxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention: Xx. Xxxxxxxxx Xxxxx
Telephone No.: (000) 000-0000
Telecopy No.: (000) 000-0000
S-2
92
Signature page to Credit Agreement with AMB Institutional Alliance Fund I, L.P.
and AMB Institutional Alliance REIT I, Inc.
BT REALTY RESOURCES, INC., as a Lender and as
Administrative Agent
By:
---------------------------------------
Name:
Title:
Address:
BT Realty Resources, Inc.
000 Xxxxxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000
Attention:
--------------------------------
Telephone No.:
----------------------------
Telecopy No.:
-----------------------------
S-3
