EXHIBIT 10.18
UNSECURED CREDIT AGREEMENT
This UNSECURED CREDIT AGREEMENT is entered into as of
June 13, 1997, among BEDFORD PROPERTY INVESTORS, INC., a Maryland
corporation (the "Company"), BANK OF AMERICA NATIONAL TRUST AND
SAVINGS ASSOCIATION, a national banking association ("BofA"); the
several financial institutions from time to time party to this
Agreement (collectively, the "Banks"; individually a "Bank"), and BANK
OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION, as arranger and as
administrative agent for the Banks.
WHEREAS, the Company has requested that the Banks make
available to the Company an unsecured revolving line of credit in the
maximum principal amount of $25,000,000; and
WHEREAS, the Banks have agreed to make available to the
Company an unsecured revolving credit facility upon the terms and
subject to the conditions set forth in this Agreement;
NOW, THEREFORE, in consideration of the mutual agreements,
provisions and covenants contained herein, the parties agree as
follows:
1. Definitions.
1.1 Defined Terms. In addition to the terms defined
elsewhere in this Agreement, the following terms have the following
meanings:
"Administrative Agent" means BofA in its capacity as
administrative agent for the Banks hereunder, and any successor
administrative agent designated under Section 9.5.
"Affiliate" means, as to any Person, any other Person which,
directly or indirectly, is in control of, is controlled by, or is
under common control with, such Person. A Person shall be deemed to
control another Person if the controlling Person possesses, directly
or indirectly, the power to direct or cause the direction of the
management and policies of the other Person, whether through the
ownership of voting securities, by contract or otherwise. In no event
shall any of the Banks be deemed an "Affiliate" of the Company or of
any Subsidiary of the Company.
"Agent-Related Persons" means BofA and any successor
administrative agent designated under Section 9.5, together with their
respective Affiliates and the officers, directors, employees and
agents of such Persons.
"Agent's Payment Office" means the address for payments set
forth herein for the Administrative Agent, or such other address as
the Administrative Agent may from time to time specify.
"Agreement" means this Unsecured Credit Agreement, as
amended, supplemented or modified from time to time.
"Applicable Margin" means (a) with respect to Reference Rate
Loans, twenty-five (25) basis points; and (b) with respect to LIBOR
Rate Loans, 175 basis points.
"Approved Unencumbered Parcel" means a Parcel satisfying all
of the conditions set forth in Section 4.1.
"Assignee" has the meaning specified in subsection 10.8.1.
"Attorney Costs" means and includes all reasonable fees and
disbursements of any law firm or other external legal counsel, the
allocated cost of internal legal services and all disbursements of
internal counsel.
"Availability" means, at any time, the difference between
(a) the lesser of (i) the Maximum Commitment Amount at such time and
(ii) the greater of (A) $10,000,000.00 and (B) the Total Approved
Unencumbered Parcel Value at such time, and (b) the principal amount
outstanding under the Swing Line at such time.
"Bank" has the meaning specified in the introductory
sentence of this Agreement; BofA in its capacity as a lender hereunder
and in its capacity as the Swing Line Lender is one of the Banks.
"Bankruptcy Code" means the Federal Bankruptcy Reform Act
of 1978, as amended from time to time (11 U.S.C. 101, et seq.).
"BofA" means Bank of America National Trust and Savings
Association, a national banking association.
"Borrowing" means a borrowing hereunder consisting of Loans
of the same Type made to the Company on the same day by the Banks
under Article 2 and, other than in the case of Reference Rate Loans,
having the same Interest Period, but does not include (a) a conversion
of Loans of one Type to another Type or (b) a continuation of a Loan
as a Loan of the same Type, but with a new Interest Period.
"Borrowing Notice" means a notice substantially in the form
of Exhibit A given by the Company to the Administrative Agent pursuant
to Section 2.4.
"Business Day" means any day other than a Saturday, Sunday
or other day on which commercial banks in San Francisco, California,
are authorized or required by law to close and, if the applicable
Business Day relates to any LIBOR Rate Loan, means such a day on which
dealings are carried on in the applicable offshore dollar interbank
market.
"Capital Adequacy Regulation" means any guideline, request
or directive of any Governmental Authority, or any other law, rule or
regulation, whether or not having the force of law, in each case,
regarding capital adequacy of any Bank or of any corporation
controlling any Bank.
"Capitalization Rate" means, at any time, the capitalization
rate most recently established by the Administrative Agent, with the
consent of the Majority Banks, for determining the Current Value of
each of the Approved Unencumbered Parcels. The Banks agree that the
initial Capitalization Rate is nine and one-half percent (9.5%), and
the Capitalization Rate shall be adjusted by the Administrative Agent,
with the consent of the Majority Banks, annually on the anniversary of
the date of this Agreement.
"Cash Flow" means, as of any calendar quarter, four (4)
times the sum of (i) the quarterly consolidated income from property
operations for the Company, its Subsidiaries and all of the Permitted
Partnerships (excluding income from minority interests in Persons
other than Permitted Partnerships), and (ii) the consolidated
depreciation and amortization of the Company, its Subsidiaries and all
of the Permitted Partnerships (excluding depreciation and amortization
from minority interests in Persons other than Permitted Partnerships)
for such quarter, as evidenced by the Company's most recently
delivered quarterly financial statements.
"CERCLA" means the Comprehensive Environmental Response
Compensation and Liability Act of 1980.
"Closing Date" means the date on which all conditions
precedent set forth in Section 4.2 are satisfied or waived by the
Administrative Agent.
"Code" means the Internal Revenue Code of 1986, as amended
from time to time, and any regulations promulgated thereunder.
"Commitment" means the amount of the credit and the
outstanding Loans for which each Bank is obligated.
"Contingent Obligation" means, as to any Person, (a) any
Guaranty Obligation of that Person, and (b) any direct or indirect
obligation or liability, contingent or otherwise, of that Person in
respect of (i) any letter of credit or similar instrument issued for
the account of that Person or as to which that Person is otherwise
liable for reimbursement of drawings or (ii) any Swap Contract. The
amount of any Contingent Obligation shall (subject, in the case of
Guaranty Obligations, to the last sentence of the definition of
"Guaranty Obligation") be deemed equal to the maximum reasonably
anticipated liability in respect thereof.
"Contractual Obligation" means, as to any Person, any
provision of any security issued by such Person or of any agreement,
undertaking, contract, indenture, mortgage, deed of trust or other
instrument, document or agreement to which such Person is a party or
by which it or any of its property is bound.
"Controlled Group" means the Company and all Persons
(whether or not incorporated) under common control or treated as a
single employer with the Company pursuant to Section 414(b), (c), (m)
or (o) of the Code.
"Conversion Date" means any date on which the Company elects
to convert a Reference Rate Loan to a LIBOR Rate Loan or a LIBOR Rate
Loan to a Reference Rate Loan.
"Conversion/Continuation Notice" means a notice
substantially in the form of Exhibit B given by the Company to the
Administrative Agent pursuant to Section 2.5.
"Covenant Debt Service" means, at any time, the amount
necessary to amortize the aggregate amount of secured Indebtedness and
commercial unsecured Indebtedness of the Company, its Subsidiaries and
all of the Permitted Partnerships (as evidenced by negotiable
instruments or other written agreements; and based on the most
recently received consolidated balance sheet, and including as
Indebtedness all then-outstanding but undrawn letters of credit issued
by BofA for the account of the Company) in twenty-five (25) equal
annual installments of principal and interest at a per annum rate
equal to the greater of (i) 2.50% per annum above the average yield on
ten-year United States treasury bonds maturing approximately ten (10)
years from the date of determination (as determined from the Wall
Street Journal published on the determination date) or (ii) 9.0%,
computed on the basis of a year of 365 or 366 days, as applicable, and
actual day months.
"Current Value" means, for any Approved Unencumbered Parcel
at any time, an amount equal to (a) the Net Operating Income for such
Approved Unencumbered Parcel at such time divided by (b) the
Capitalization Rate at such time.
"Default" means any event or circumstance which, with the
giving of notice, the lapse of time, or both, would (if not cured or
otherwise remedied) constitute an Event of Default.
"Eligible Assignee" means (i) a commercial bank organized
under the laws of the United States, or any state thereof, and having
a combined capital and surplus of at least $100,000,000; (ii) a Person
that is primarily engaged in the business of commercial banking and is
an Affiliate of a Bank, or (iii) any Person approved by Majority Banks
and the Administrative Agent.
"Entitled Land" means unimproved real Property satisfying
all of the following conditions: (a) the Company's intended use of
such real Property is permissible under the applicable general plan or
its equivalent, (b) such intended use is permissible under any
applicable specific plan, zoning classification and development
agreement, (c) such real Property has access to roads and utilities
adequate for the Company's intended use, and (d) the Company intends
to improve such real property within twenty-four (24) months of its
acquisition.
"Environmental Claims" means all claims, however asserted,
by any Governmental Authority or other Person alleging potential
liability or responsibility for violation of any Environmental Laws or
for injury to the environment or threat to public health, personal
injury (including sickness, disease or death), property damage,
natural resources damage, or otherwise alleging liability or
responsibility for damages (punitive or otherwise), cleanup, removal,
remedial or response costs, restitution, civil or criminal penalties,
injunctive relief, or other type of relief, resulting from or based
upon (a) the presence, placement, discharge, emission or release
(including intentional and unintentional, negligent and non-negligent,
sudden or non-sudden, accidental or non-accidental placement, spills,
leaks, discharges, emissions or releases) of any Hazardous Material
at, in or from any real Property at any time owned by the Company, any
of its Subsidiaries or any Permitted Partnership, or (b) any other
circumstances forming the basis of any violation, or alleged
violation, of any Environmental Laws.
"Environmental Laws" means all federal, state or local laws,
statutes, common law duties, rules, regulations, ordinances and codes,
together with all administrative orders, directed duties, requests,
licenses, authorizations and permits of, and agreements with, any
Governmental Authorities, in each case relating to environmental,
health, safety and land use matters; including CERCLA, the Clean Air
Act, the Federal Water Pollution Control Act of 1972, the Solid Waste
Disposal Act, the Federal Resource Conservation and Recovery Act, the
Toxic Substances Control Act, the Emergency Planning and Community
Right-to-Know Act, the California Hazardous Waste Control Law, the
California Solid Waste Management, Resource, Recovery and Recycling
Act, the California Water Code and the California Health and Safety
Code.
"Environmental Permits" has the meaning specified in
subsection 5.12(b).
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and regulations promulgated
thereunder.
"ERISA Affiliate" means any trade or business (whether or
not incorporated) under common control with the Company within the
meaning of Section 414(b), 414(c) or 414(m) of the Code.
"ERISA Event" means (a) a Reportable Event with respect to a
Qualified Plan or a Multi-employer Plan; (b) withdrawal by the Company
or any ERISA Affiliate from a Qualified Plan subject to Section 4063
of ERISA during a plan year in which it was a substantial employer (as
defined in Section 4001(a)(2) of ERISA); (c) a complete or partial
withdrawal by the Company or any ERISA Affiliate from a Multi-employer
Plan; (d) the filing of a notice of intent to terminate, the treatment
of a plan amendment as a termination under Section 4041 or 4041A of
ERISA, or the commencement of proceedings by the PBGC to terminate a
Qualified Plan or Multi-employer Plan subject to Title IV of ERISA;
(e) failure by the Company or any member of the Controlled Group to
make required contributions to a Qualified Plan or Multi-employer
Plan; (f) an event or condition which might reasonably be expected to
constitute grounds under Section 4042 of ERISA for the termination of,
or the appointment of a trustee to administer, any Qualified Plan or
Multi-employer Plan; (g) the imposition of any liability under
Title IV of ERISA, other than PBGC premiums due but not delinquent
under Section 4007 of ERISA, upon the Company or any ERISA Affiliate;
(h) an application for a funding waiver or an extension of any
amortization period pursuant to Section 412 of the Code with respect
to any Plan; (i) a non-exempt prohibited transaction occurs with
respect to any Plan for which the Company or any Subsidiary of the
Company may be directly or indirectly liable; or (j) a violation of
the applicable requirements of Section 404 or 405 of ERISA or the
exclusive benefit rule under Section 401(a) of the Code by any
fiduciary or disqualified person with respect to any Plan for which
the Company or any member of the Controlled Group may be directly or
indirectly liable.
"Event of Default" means any of the events or circumstances
specified in Section 8.1.
"Federal Funds Rate" means, for any day, the rate published
by the Federal Reserve Bank of New York for the preceding Business Day
as "Federal Funds (Effective)"; (or, if not published, the arithmetic
mean of the rates for overnight Federal funds arranged prior to 9:00
a.m. (New York City time) on that day quoted by three brokers of
Federal Funds in New York City as determined by the Administrative
Agent).
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any successor thereof.
"Funds from Operations" means, for any fiscal quarter, the
net income of the Company for such quarter, excluding gains or losses
from debt restructuring and sales of property, plus depreciation and
amortization, after adjustments for unconsolidated ventures.
"GAAP" means generally accepted accounting principles set
forth from time to time in the opinions and pronouncements of the
Accounting Principles Board and the American Institute of Certified
Public Accountants and statements and pronouncements of the Financial
Accounting Standards Board (or agencies with similar functions of
comparable stature and authority within the accounting profession), or
in such other statements by such other entity as may be in general use
by significant segments of the U.S. accounting profession, which are
applicable to the circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
state or other political subdivision thereof, any central bank (or
similar monetary or regulatory authority) thereof, any entity
exercising executive, legislative, judicial, regulatory or
administrative functions of, or pertaining to, government, and any
corporation or other entity owned or controlled, through stock or
capital ownership or otherwise, by any of the foregoing.
"Guarantor" means each Person who has executed a Guaranty.
"Guaranty" means a guaranty of the Obligations for the
benefit of the Banks.
"Guaranty Obligation" means, as applied to any Person, any
direct or indirect liability of that Person with respect to any
Indebtedness, lease, dividend, letter of credit or other obligation
(the "primary obligations") of another Person. The amount of any
Guaranty Obligation shall be deemed equal to the stated or
determinable amount of the primary obligation in respect of which such
Guaranty Obligation is made or, if not stated or if indeterminable,
the maximum reasonably anticipated liability in respect thereof.
"Hazardous Materials" means all those substances which are
regulated by, or which may form the basis of liability under, any
Environmental Law, including all substances identified under any
Environmental Law as a pollutant, contaminant, hazardous waste,
hazardous constituent, special waste, hazardous substance, hazardous
material or toxic substance, or petroleum or petroleum derived
substance or waste.
"Indebtedness" of any Person means, without duplication,
(a) all indebtedness for borrowed money; (b) all obligations issued,
undertaken or assumed as the deferred purchase price of property or
services; (c) all reimbursement obligations with respect to surety
bonds, letters of credit and similar instruments (in each case, to the
extent material or non-contingent); (d) all obligations evidenced by
notes, bonds, debentures or similar instruments, including obligations
so evidenced incurred in connection with the acquisition of property,
assets or businesses; (e) all indebtedness created or arising under
any conditional sale or other title retention agreement, or incurred
as financing, in either case with respect to property acquired by the
Person (even though the rights and remedies of the seller or lender
under such agreement in the event of default are limited to
repossession or sale of such property); (f) all indebtedness referred
to in clauses (a) through (e) above secured by (or for which the
holder of such Indebtedness has an existing right, contingent or
otherwise, to be secured by) any Lien upon or in property owned by
such Person, even though such Person has not assumed or become liable
for the payment of such Indebtedness; and (g) all Guaranty Obligations
in respect of indebtedness or obligations of others of the kinds
referred to in clauses (a) through (e) above.
"Indemnified Liabilities" has the meaning specified in
Section 10.5.
"Indemnified Person" has the meaning specified in
Section 10.5.
"Insolvency Proceeding" means (a) any case, action or
proceeding before any court or other Governmental Authority relating
to bankruptcy, reorganization, insolvency, liquidation, receivership,
dissolution, winding-up or relief of debtors, or (b) any general
assignment for the benefit of creditors, composition, marshaling of
assets for creditors or other similar arrangement in respect of its
creditors generally or any substantial portion of its creditors; in
each case (a) and (b) undertaken under U.S. federal, state or foreign
law, including the Bankruptcy Code.
"Interest Payment Date" means the first day of each month
following disbursement of the initial Loan.
"Interest Period" means, with respect to any LIBOR Rate
Loan, the period commencing on the Business Day the Loan is disbursed
or continued or on the Conversion Date on which the Loan is converted
to a LIBOR Rate Loan and ending on the date thirty (30), sixty (60),
ninety (90) or one hundred eighty (180) days, or one (1) year,
thereafter, as selected by the Company in its Borrowing Notice or
Conversion/Continuation Notice; provided that:
(a) if any Interest Period pertaining to a LIBOR Rate
Loan would otherwise end on a day that is not a Business Day,
that Interest Period shall be extended to the next succeeding
Business Day unless the result of such extension would be to
carry such Interest Period into another calendar month, in which
event such Interest Period shall end on the immediately preceding
Business Day; and
(b) any Interest Period pertaining to a LIBOR Rate
Loan that begins on the last Business Day of a calendar month (or
on a day for which there is no numerically corresponding day in
the calendar month at the end of such Interest Period) shall end
on the last Business Day of the calendar month at the end of such
Interest Period.
"Lending Office" means, as to any Bank, the office specified
as its "Lending Office" opposite its name on the signature pages
hereto, or such other office as such Bank may specify to the Company
and the Administrative Agent from time to time.
"LIBOR" means the per annum rate of interest, rounded
upward, if necessary, to the nearest 1/16th of one percent (0.0625%),
at which the Administrative Agent's London Branch, London, England,
would offer U.S. dollar deposits in amounts and for periods comparable
to those of the applicable LIBOR Rate Loan and Interest Period to
major banks in the London U.S. dollar inter-bank market at
approximately 11:00 a.m., London time, on the first Business Day after
the Company's rate election.
"LIBOR Rate" means, for each Interest Period in respect of
any LIBOR Rate Loan, the per annum rate of interest, rounded upward,
if necessary, to the nearest 1/100th of one percent, determined by the
following formula:
LIBOR
LIBOR Rate =
(1.00 - Reserve Percentage)
"LIBOR Rate Borrowing" means a Borrowing consisting of LIBOR
Rate Loans.
"LIBOR Rate Loan" means a Loan that bears interest based on
the LIBOR Rate.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, charge or deposit arrangement, encumbrance,
lien (statutory or other) or preference, priority or other security
interest or preferential arrangement of any kind or nature whatsoever
(including those created by, arising under or evidenced by any
conditional sale or other title retention agreement, the lessor's
interest under a capital lease (determined in accordance with GAAP),
any financing lease having substantially the same economic effect as
any of the foregoing, or the filing of any financing statement under
the UCC or any comparable law naming the owner of the asset to which
such lien relates as debtor) and any contingent or other agreement to
provide any of the foregoing, but not including the interest of a
lessor under an operating lease (determined in accordance with GAAP).
"Loan" means an extension of credit by a Bank to the Company
pursuant to Article 2, and may be a Reference Rate Loan, a LIBOR Rate
Loan or, in the case of the Swing Line Lender, a Swing Loan.
"Loan Documents" means (a) this Agreement, (b) the Revolving
Notes, (c) each Guaranty and (d) all documents delivered to the
Administrative Agent, on behalf of the Banks, in connection therewith,
but excludes the Secured Loan Agreement and all documents delivered to
the Administrative Agent, on behalf of the Banks, in connection with
the Secured Loan Agreement.
"Majority Banks" means at any time at least two (2) Banks
then holding at least 66-2/3% of the then aggregate unpaid principal
amount of the Loans (or, if no principal amount is then outstanding,
at least two (2) banks then having at least 66-2/3% of the unborrowed
Commitments); provided, however, that if at any time there is only one
Bank, then such one Bank shall constitute Majority Banks.
"Margin Stock" means "margin stock" as such term is defined
in Regulation G, T, U or X of the Federal Reserve Board.
"Material Adverse Effect" means a material adverse change
in, or a material adverse effect upon, any of (a) the operations,
business, properties, condition (financial or otherwise) or prospects
of the Company, the Company and its Subsidiaries taken as a whole, or
the Company, its Subsidiaries and the Permitted Partnerships taken as
a whole; (b) the ability of the Company to perform under any Loan
Document and avoid any Event of Default; or (c) the legality,
validity, binding effect or enforceability of any Loan Document.
"Maturity Date" means June 1, 2000.
"Maximum Commitment Amount" means, at any time, an amount
equal to $25,000,000.00.
"Mortgage Value" means, for any Approved Unencumbered Parcel
at any time, the maximum amount for which 74.074% of the Net Operating
Income for such Approved Unencumbered Parcel at such time would be
sufficient to amortize such amount in twenty-five (25) equal annual
installments of principal and interest at a per annum rate equal to
the greater of (i) 2.50% per annum above the average yield on ten-year
United States treasury bonds maturing approximately ten (10) years
from the date of determination (as determined from the Wall Street
Journal published on the determination date) or (ii) 9.0%, computed on
the basis of a year of 365 or 366 days, as applicable, and actual day
months.
"Multi-employer Plan" means a "multi-employer plan" (within
the meaning of Section 4001(a)(3) of ERISA) to which any member of the
Controlled Group (i) makes, is making, or is obligated to make
contributions, or (ii) during the preceding three calendar years has
made, or has been obligated to make, contributions.
"Net Operating Income" means, for any Approved Unencumbered
Parcel as of any calendar quarter:
either (a) if such Approved Unencumbered Parcel has
been owned by the Company for at least four (4) consecutive
calendar quarters for which quarterly operating statements have
been delivered to the Banks, an amount equal to the difference
between (i) the aggregate amount of gross income (before capital
expenditures) for such Approved Unencumbered Parcel for the
immediately preceding four (4) consecutive calendar quarters less(ii)
the aggregate amount of actual operating expenses other than
capital expenditures relating to such Approved Unencumbered
Parcel for the immediately preceding four (4) consecutive
calendar quarters, in each case as evidenced by the most recently
received quarterly operating statements for such Approved
Unencumbered Parcel and the quarterly operating statements for
the three (3) immediately preceding quarters,
or (b) if such Approved Unencumbered Parcel has been owned
by the Company for fewer than four (4) consecutive calendar
quarters for which quarterly operating statements have been
delivered to the Banks, an amount equal to the product of (i) the
difference between (A) the aggregate amount of gross income
(before capital expenditures) for such Approved Unencumbered
Parcel for the most recent consecutive calendar quarters for
which quarterly operating statements have been delivered to the
Banks less (B) the aggregate amount of actual operating expenses
other than capital expenditures relating to such Approved
Unencumbered Parcel for the most recent consecutive calendar
quarters for which quarterly operating statements have been
delivered to the Banks multiplied by (ii) a ratio the numerator
of which is four (4) and the denominator of which is the number
of consecutive calendar quarters for which quarterly operating
statements for such Approved Unencumbered Parcel have been
delivered to the Banks,
less (c) if the Administrative Agent has determined that the
improvements located on such Approved Parcel consist of office
space, $2.00 per square foot of net rentable area of space
actually under lease on the first day of such calendar quarter in
such Approved Unencumbered Parcel, representing capital
expenditures for office space,
less (d) if the Administrative Agent has determined that the
improvements located on such Approved Parcel consist of retail
space, $0.80 per square foot of net rentable area of space
actually under lease on the first day of such calendar quarter in
such Approved Unencumbered Parcel, representing capital
expenditures for retail space,
less (e) if the Administrative Agent has determined that the
improvements located on such Approved Parcel consist of research
and development (other than office) space, $0.40 per square foot
of net rentable area of space actually under lease on the first
day of such calendar quarter in such Approved Unencumbered
Parcel, representing capital expenditures for research and
development (other than office) space,
less (f) if the Administrative Agent has determined that the
improvements located on such Approved Parcel consist of flexible
industrial (other than research and development or warehouse)
space, $0.25 per square of space actually under lease on the
first day of such calendar quarter in such Approved Unencumbered
Parcel, representing capital expenditures for flexible industrial
(other than research and development or warehouse) space,
less (g) if the Administrative Agent has determined that
the improvements located on such Approved Parcel consist of
warehouse space, $0.07 per square foot of net rentable area of
space actually under lease on the first day of such calendar
quarter in such Approved Unencumbered Parcel, representing
capital expenditures for warehouse space.
"Notice of Lien" means any "notice of lien" or similar
document intended to be filed or recorded with any court, registry,
recorder's office, central filing office or other Governmental
Authority for the purpose of evidencing, creating, perfecting or
preserving the priority of a Lien securing obligations owing to a
Governmental Authority.
"Obligations" means all Loans and other Indebtedness,
advances, debts, liabilities, obligations, covenants and duties owing
from the Company to the Administrative Agent, any Bank or any other
Person required to be indemnified under any Loan Document, of any kind
or nature, present or future, whether or not evidenced by any note,
guaranty or other instrument, and arising under this Agreement or
under any other Loan Document, whether or not for the payment of
money, whether arising by reason of an extension of credit, loan,
guaranty, indemnification or in any other manner, whether direct or
indirect (including those acquired by assignment), absolute or
contingent, due or to become due, now existing or hereafter arising
and however acquired.
"Ordinary Course of Business" means, in respect of any
transaction involving the Company, any Subsidiary of the Company or
any Permitted Partnership, the ordinary course of such Person's
business, substantially as conducted by any such Person prior to or as
of the Closing Date, and undertaken by such Person in good faith and
not for purposes of evading any covenant or restriction in any Loan
Document.
"Organization Documents" means, (a) for any corporation, the
certificate or articles of incorporation, the bylaws, any certificate
of determination or instrument relating to the rights of preferred
shareholders of such corporation, and all applicable resolutions of
the board of directors (or any committee thereof) of such corporation,
and (b) for any partnership, the partnership agreement, statement or
certificate of partnership and any fictitious business name or other
filing relating to such partnership.
"Parcel" means a parcel of real property that is owned in
fee by the Company.
"Participant" has the meaning specified in
subsection 10.8.3.
"PBGC" means the Pension Benefit Guaranty Corporation or any
entity succeeding to any or all of its functions under ERISA.
"Permitted Liens" has the meaning specified in Section 7.1.
"Permitted Partnership" means a limited partnership formed
to acquire one or more parcels of real property in which (i) the
Company is the sole general partner, (ii) the Company has sole
management control of such limited partnership and its properties,
(iii) such limited partnership has acquired all of its real property
assets from one or more of the limited partners, and the limited
partners have received only limited partnership interests in such
limited partnership in exchange for their contributions of real
property to such limited partnership, (iv) distributions on interests
in such limited partnership at any time are based solely on the amount
of dividends payable on the Company's common stock at such time, and
(v) such limited partnership has executed and delivered to the
Administrative Agent, for the benefit of the Banks, a guaranty of the
Company's obligations under the Loan Documents. Bedford Realty
Partners, L.P., a California limited partnership, is a Permitted
Partnership.
"Person" means an individual, partnership, corporation,
business trust, joint stock company, limited liability company, trust,
unincorporated association, joint venture or Governmental Authority.
"Plan" means an employee benefit plan (as defined in
Section 3(3) of ERISA) which the Company or any member of the
Controlled Group sponsors or maintains or to which the Company or any
member of the Controlled Group makes, is making or is obligated to
make contributions, and includes any Multi-employer Plan or Qualified
Plan.
"Property" means any estate or interest in any kind of
property or asset, whether real, personal or mixed, and whether
tangible or intangible.
"Pro Rata Share" means, as to any Bank at any time, the
percentage equivalent (expressed as a decimal rounded to the ninth
decimal place) at such time of such Bank's share of the credit and the
outstanding Loans.
"Qualified Plan" means a pension plan (as defined in
Section 3(2) of ERISA) intended to be tax-qualified under
Section 401(a) of the Code and which any member of the Controlled
Group sponsors, maintains, or to which it makes, is making or is
obligated to make contributions, or in the case of a multiple employer
plan (as described in Section 4064(a) of ERISA) has made contributions
at any time during the immediately preceding period covering at least
five (5) plan years, but excluding any Multi-employer Plan.
"Reference Rate" means the per annum rate of interest
publicly announced from time to time by the Administrative Agent at
San Francisco, California, as its "Reference Rate." The Reference
Rate is set by the Administrative Agent based on various factors,
including the Administrative Agent's costs and desired return, general
economic conditions and other factors, and is used as a reference
point for pricing loans. The Administrative Agent may price loans at,
above or below the Reference Rate. Any change in the Reference Rate
shall take effect on the day specified in the public announcement of
such change.
"Reference Rate Borrowing" means a Borrowing consisting of
Reference Rate Loans.
"Reference Rate Loan" means a Loan that bears interest based
on the Reference Rate.
"Reportable Event" means, as to any Plan, (a) any of the
events set forth in Section 4043(b) of ERISA or the regulations
thereunder, other than any such event for which the 30-day notice
requirement under ERISA has been waived in regulations issued by the
PBGC, (b) a withdrawal from a Plan described in Section 4063 of ERISA,
or (c) a cessation of operations described in Section 4062(e) of
ERISA.
"Requirement of Law" means, as to any Person, any law
(statutory or common), treaty, rule or regulation, or any
determination of an arbitrator or of a Governmental Authority, in each
case applicable to or binding upon such Person or any of its property
or to which such Person or any of its property is subject.
"Reserve Percentage" means the total of the maximum reserve
percentages for determining the reserves to be maintained by member
banks of the Federal Reserve System for "eurocurrency liabilities," as
defined in Federal Reserve Board Regulation D. The Reserve Percentage
shall be expressed in decimal form and rounded upward, if necessary,
to the nearest 1/100th of one percent, and shall include marginal,
emergency, supplemental, special and other reserve percentages.
"Responsible Officer" means the chief executive officer or
the president of the Company, or any other officer having
substantially the same authority and responsibility or, with respect
to financial matters, the chief financial officer or the treasurer of
the Company, or any other officer having substantially the same
authority and responsibility.
"Revolving Note" means a promissory note of the Company
payable to the order of a Bank in substantially the form of Exhibit C,
and any amendments, supplements, modifications, renewals,
replacements, consolidations and extensions thereof, evidencing the
aggregate indebtedness of the Company to a Bank resulting from Loans
made by such Bank pursuant to this Agreement; "Revolving Notes" means,
at any time, all of the Revolving Notes executed by the Company in
favor of a Bank outstanding at such time.
"SEC" means the Securities and Exchange Commission, or any
successor thereto.
"Secured Loan Agreement" means that certain Third Amended
and Restated Credit Agreement (Secured Loan) of even date herewith
among the Company, the Banks, and BofA, as administrative agent for
the Banks.
"Solvent" means, as to any Person at any time, that (a) the
fair value of the Property of such Person is greater than the amount
of such Person's liabilities (including disputed, contingent and
unliquidated liabilities) as such value is established and liabilities
evaluated for purposes of Section 101(32) of the Bankruptcy Code and,
in the alternative, for purposes of the California Uniform Fraudulent
Transfer Act and any other applicable fraudulent conveyance statute;
(b) the present fair saleable value of the Property of such Person is
not less than the amount that will be required to pay the probable
liability of such Person on its debts as they become absolute and
matured; (c) such Person is able to realize upon its Property and pay
its debts and other liabilities (including disputed, contingent and
unliquidated liabilities) as they mature in the normal course of
business; (d) such Person does not intend to, and does not believe
that it will, incur debts or liabilities beyond such Person's ability
to pay as such debts and liabilities mature; and (e) such Person is
not engaged in business or a transaction, and is not about to engage
in business or a transaction, for which such Person's property would
constitute unreasonably small capital.
"Specified Swap Contract" means any Swap Contract made or
entered into at any time, or in effect at any time, whether as a
result of assignment or transfer or otherwise, between the Company and
any Swap Provider, which Swap Contract is entered into for the purpose
of mitigating interest rate or currency exchange risk relating to any
Loan and as to which the Company's final scheduled payment is not
later than the Maturity Date.
"Specified Swap Exposure" means, at any time, an amount
equal to the sum of (a) ten percent (10%) of the notional amount of
each interest rate Specified Swap Contract outstanding at such time,
and (b) three percent (3%) of the notional amount of each interest
rate floor or interest rate collar Specified Swap Contract outstanding
at such time.
"Specified Swap Obligations" has the meaning specified in
Section 8.5.
"Subsidiary" of a Person means any corporation, association,
partnership, joint venture or other business entity of which more
than 50% of the voting stock, membership interests or other equity
interests (in the case of Persons other than corporations), is owned
or controlled directly or indirectly by the Person, or one or more of
the Subsidiaries of the Person, or a combination thereof.
"Swap Contract" means any agreement, whether or not in
writing, relating to any transaction that is a rate swap, basis swap,
forward rate transaction, commodity swap, commodity option, equity or
equity index swap or option, bond, note or xxxx option, interest rate
option, forward foreign exchange transaction, cap, collar or floor
transaction, currency swap, cross-currency rate swap, swaption,
currency option or any other, similar transaction (including any
option to enter into any of the foregoing) or any combination of the
foregoing and, unless the context otherwise clearly requires, any
master agreement relating to or governing any or all of the foregoing.
"Swap Provider" means any Bank, or any Affiliate of any
Bank, that is at the time of determination a party to a Swap Contract
with the Company.
"Swing Line" has the meaning specified in Section 2.2.
"Swing Line Availability" means, at any time, the difference
between (a) the Availability at such time, and (b) the sum of (i) the
principal amount outstanding under the Swing Line at such time and
(ii) the principal amount outstanding under the "swing line"
established under the Secured Loan Agreement at such time.
"Swing Line Lender" means BofA, in its capacity as the maker
of Swing Loans under Section 2.2.
"Swing Loan" has the meaning specified in Section 2.2.
"Tangible Net Worth" means, at any time, the total
consolidated stockholders' equity of the Company and its Subsidiaries
at such time, plus the amount of minority interests in all Permitted
Partnerships at such time (valuing preferred stock at face value and
excluding as assets (i) any loans to tenants for tenant improvements
and (ii) goodwill and other intangible assets, and valuing all real
property at the lower of book or market value (where market value of a
real property is based on the most recent appraisal of such real
property, if any, performed for the benefit of the Banks pursuant to
an agreement between the Company and the Banks)), as evidenced by the
Company's most recently delivered quarterly financial statements.
"Total Approved Unencumbered Parcel Value" means, at any
time, the lesser of (a) fifty percent (50%) of the Total Current Value
at such time and (b) the Total Mortgage Value at such time.
"Total Current Value" means, at any time, the sum of the
Current Values for all of the Approved Unencumbered Parcels at such
time.
"Total Mortgage Value" means, at any time, the sum of the
Mortgage Values for all of the Approved Unencumbered Parcels at such
time.
"Transferee" has the meaning specified in subsection 10.8.5.
"Type" means, in connection with a Loan, the
characterization of such loan as a Reference Rate Loan or a LIBOR Rate
Loan.
"UCC" means the Uniform Commercial Code as in effect in any
jurisdiction, as the same may be amended, modified or supplemented
from time to time.
"Unfunded Pension Liabilities" means the excess of a Plan's
benefit liabilities under Section 4001(a)(16) of ERISA, over the
current value of that Plan's assets, determined in accordance with the
assumptions used by the Plan's actuaries for funding the Plan pursuant
to section 412 of the Code for the applicable plan year.
1.2 Other Interpretive Provisions.
1.2.1 Use of Defined Terms. Unless otherwise
specified herein or therein, all terms defined in this Agreement shall
have the defined meanings when used in any certificate or other
document made or delivered pursuant to this Agreement. The meaning of
defined terms shall be equally applicable to the singular and plural
forms of the defined terms. Terms (including uncapitalized terms) not
otherwise defined herein and that are defined in the UCC shall have
the meanings therein described.
1.2.2 Certain Common Terms.
(a) The Agreement. The words "hereof," "herein,"
"hereunder" and words of similar import when used in this
Agreement shall refer to this Agreement as a whole and not to any
particular provision of this Agreement, and section, schedule and
exhibit references are to this Agreement unless otherwise
specified.
(b) Documents. The term "documents" includes any and
all instruments, documents, agreements, certificates, indentures,
notices and other writings, however evidenced.
(c) Including. The term "including" is not limiting,
and means "including without limitation."
(d) Performance. Whenever any performance obligation
hereunder (other than a payment obligation) shall be stated to be
due or required to be satisfied on a day other than a Business
Day, such performance shall be made or satisfied on the next
succeeding Business Day. In the computation of periods of time
from a specified date to a later specified date, the word "from"
means "from and including"; the words "to" and "until" each mean
"to but excluding," and the word "through" means "to and
including". If any provision of this Agreement refers to any
action taken or to be taken by any Person, or which such Person
is prohibited from taking, such provision shall be interpreted to
encompass any and all means, direct or indirect, of taking or not
taking such action.
(e) Contracts. Unless otherwise expressly provided
in this Agreement, references to agreements and other contractual
instruments shall be deemed to include all subsequent amendments
and other modifications thereto, but only to the extent such
amendments and other modifications are not prohibited by the
terms of any Loan Document.
(f) Laws. References to any statute or regulation
are to be construed as including all statutory and regulatory
provisions consolidating, amending or replacing the statute or
regulation.
(g) Captions. The captions and headings of this
Agreement are for convenience of reference only, and shall not
affect the construction of this Agreement.
(h) Independence of Provisions. The parties
acknowledge that this Agreement and the other Loan Documents may
use several different limitations, tests or measurements to
regulate the same or similar matters, and that such limitations,
tests and measurements are cumulative and must each be performed,
except as expressly stated to the contrary in this Agreement.
(i) Exhibits and Schedules. All of the exhibits and
schedules attached to this Agreement are incorporated herein by
this reference.
1.2.3 Accounting Principles.
(a) Accounting Terms. Unless the context otherwise
clearly requires, all accounting terms not expressly defined
herein shall be construed, and all financial computations
required under this Agreement shall be made, in accordance with
GAAP, consistently applied.
(b) Fiscal Periods. References herein to "fiscal
year" and "fiscal quarter" refer to such fiscal periods of the
Company.
2. The Credit.
2.1 Amount and Terms of Commitment. Each Bank severally
agrees, on the terms and subject to the conditions hereinafter set
forth, to make Loans to the Company from time to time on any Business
Day during the period from the Closing Date to the Maturity Date for
the purpose of (i) facilitating the Company's acquisition of improved
real property, and (ii) financing the Company's operations, in an
aggregate amount not to exceed at any time outstanding such Bank's Pro
Rata Share of the Availability. Notwithstanding any contrary
provision of this Agreement, the aggregate principal amount of all
outstanding Loans shall not at any time exceed the Availability.
Within the limits of the Availability, and subject to the other terms
and conditions hereof, the Company may borrow under this Section 2.1,
repay pursuant to Section 2.7 and reborrow pursuant to this
Section 2.1.
2.2 Swing Line.
2.2.1 Upon the Company's request, and subject to
the terms and conditions of this Agreement, the Swing Line Lender may,
in its sole discretion, on and after the Closing Date and prior to the
Maturity Date, provide to the Company a swing line credit facility
(the "Swing Line") of up to $25,000,000.00; provided that the Swing
Line Lender shall not in any event be permitted to make any Loan under
the Swing Line (each a "Swing Loan") if, after giving effect thereto,
(i) the aggregate principal amount of all then-outstanding Loans other
than Swing Loans would exceed the Availability at such time, or
(ii) the aggregate principal amount of all then-outstanding Swing
Loans made by the Swing Line Lender would exceed the Swing Line
Availability at such time. Within the limits of the Swing Line
Availability, the Company may borrow under this subsection 2.2.1,
repay pursuant to subsections 2.2.4 or 2.2.5 and reborrow pursuant to
this subsection 2.2.1. Notwithstanding any contrary provision of this
Section 2.2, the Swing Line Lender shall not at any time be obligated
to make any Swing Loan.
2.2.2 Notwithstanding the provisions of
subsections 2.8.1 and 2.8.2, each Swing Loan outstanding under the
Swing Line shall accrue interest at a rate per annum equal to the
interest rate applicable to a Reference Rate Loan, which interest
shall be payable in arrears on each Interest Payment Date and on the
due date for Swing Loans set forth in subsection 2.2.3, and shall be
payable to the Administrative Agent for the account of the Swing Line
Lender; provided that, notwithstanding any other provision of this
Agreement, each Swing Loan shall bear interest for a minimum of one
(1) day.
2.2.3 Notwithstanding the provisions of Section
2.7, the principal outstanding under the Swing Line shall be due and
payable:
(i) at or before 10:00 a.m., San Francisco time, on
the fifth Business Day immediately following any date on which a
Swing Loan is made under the Swing Line; and
(ii) in any event on the Maturity Date;
provided that, if no Event of Default has occurred and remains
uncured, and the Company is permitted to borrow Loans under the terms
of this Agreement (the Availability being determined for such purpose
without giving effect to any reduction thereof occasioned by such
Swing Loans due and payable) at the time such Swing Loans are due,
then unless the Company notifies the Swing Line Lender that it will
repay such Swing Loans on their due date, the Company shall be deemed
to have submitted a Borrowing Notice for Reference Rate Loans in an
amount necessary to repay such Swing Loans on their due date, and the
provisions of Section 2.4 concerning (i) the minimum principal amounts
required for Borrowings and (ii) the funding of requested Borrowings
as Swing Loans shall not apply to Loans made pursuant to this
subsection 2.2.3.
2.2.4 Notwithstanding the provisions of
subsection 2.7.1, the Company may, from time to time on any Business
Day, make a voluntary prepayment, in whole or in part, of the
outstanding principal amount of any Swing Loans, without incurring any
premium or penalty; provided that:
(i) each such voluntary prepayment shall require
prior written notice given to the Administrative Agent and Swing
Line Lender no later than 10:00 a.m., San Francisco time, on the
day on which the Company intends to make a voluntary prepayment,
and
(ii) each such voluntary prepayment shall be in a
minimum amount of $250,000 (or, if less, the aggregate
outstanding principal amount of all Swing Loans then
outstanding).
2.2.5 Each Bank shall be deemed to have
unconditionally and irrevocably purchased a pro rata risk
participation from the Swing Line Lender in the Swing Loans, without
recourse or warranty, in an amount equal to such Bank's Pro Rata Share
of such Swing Loans. In addition, from and after the date that any
Bank funds such participation, such Bank shall, to the extent of its
Pro Rata Share, be entitled to receive a ratable portion of any
payment of principal and/or interest received by the Swing Line Lender
on account of such Swing Loans, payable to such Bank promptly upon
such receipt.
2.2.6 At any time during the continuance of an
Event of Default, the Swing Line Lender may, without the Company's
consent, upon one (1) Business Day's notice to the Company, terminate
the Swing Line and cause Reference Rate Loans to be made by the
Lenders in an aggregate amount equal to the amount of principal and
interest outstanding under the Swing Line (the Availability being
determined for such purpose without giving effect to any reduction
thereof occasioned by such Swing Loans), and the conditions precedent
set forth in Section 2.4 and Section 4.3, and any requirement of
Section 2.4 that a Borrowing be funded as a Swing Loan shall not apply
to such Loans. The proceeds of such Loans shall be paid to the Swing
Line Lender to retire the outstanding principal and interest owing
under the Swing Line.
2.2.7 The Swing Line Lender shall not, without
the approval of all Banks, make a Swing Loan if the Swing Line Lender
then has actual knowledge that a Default has occurred and is
continuing.
2.3 Loan Accounts.
2.3.1 The Loans made by each Bank shall be
evidenced by one or more loan accounts or records maintained by such
Bank and the Administrative Agent in the ordinary course of business.
The loan accounts or records maintained by the Administrative Agent
and each Bank shall be conclusive absent manifest error of the amounts
of the Loans made by the Banks to the Company and the interest and
payments thereon. Any failure so to record or any error in doing so
shall not, however, limit or otherwise affect the obligation of the
Company hereunder to pay any amount owing with respect to the Loans.
2.3.2 The Loans made by each Bank shall be
evidenced by a Revolving Note payable to the order of such Bank in an
amount equal to such Bank's Pro Rata Share of the Maximum Commitment
Amount on the Closing Date. In addition, the Swing Loans made by the
Swing Line Lender shall be evidenced by a Revolving Note payable to
the order of the Swing Line Lender in the amount of $25,000,000.00.
Such Bank may endorse on the schedule annexed to its Revolving Note(s)
the date, amount and maturity of each Loan that it makes (which shall
not include undrawn amounts on outstanding Letters of Credit, but
shall include the amounts of any drawings on outstanding Letters of
Credit), the purpose of the Loan, the amount of each payment of
principal that the Company makes with respect thereto and the source
of the funds from which each principal payment is made. The Company
irrevocably authorizes each Bank to endorse its Revolving Note(s), and
such Bank's record shall be conclusive absent manifest error;
provided, however, that any Bank's failure to make, or its error in
making, a notation thereon with respect to any Loan shall not limit or
otherwise affect the Company's obligations to such Bank hereunder or
under its Revolving Note(s).
2.4 Procedure for Obtaining Credit. Each Borrowing shall
be made upon the irrevocable written notice (including notice via
facsimile confirmed immediately by a telephone call) of the Company in
the form of a Borrowing Notice (which notice must be received by the
Administrative Agent prior to 9:30 a.m., San Francisco time,
(i) three (3) Business Days prior to the requested borrowing date, in
the case of LIBOR Rate Loans, or (ii) on the requested borrowing date,
in the case of Reference Rate Loans or Swing Loans), specifying:
(a) the amount of the Borrowing, which shall be in an
aggregate minimum principal amount of (i) Two Hundred Fifty
Thousand dollars ($250,000) for Reference Rate Borrowings or
Swing Loans, and (ii) One Million dollars ($1,000,000) for any
LIBOR Rate Borrowings;
(b) the requested borrowing date, which shall be a
Business Day;
(c) the Type of Loans comprising the Borrowing;
(d) in the case of a LIBOR Rate Borrowing, the
duration of the Interest Period applicable to the Loans
comprising such LIBOR Rate Borrowing. If the Borrowing Notice
fails to specify the duration of the Interest Period for the
Loans comprising a LIBOR Rate Borrowing, such Interest Period
shall be thirty (30) days.
Unless the Company's Borrowing Notice expressly requests a LIBOR Rate
Borrowing, each requested Borrowing shall initially be funded as a
Swing Loan, and shall be subject to the provisions of Section 2.2.
Unless the Majority Banks otherwise agree, during the existence of a
Default or Event of Default, the Company may not elect to have a Loan
made as, or converted into or continued as, a LIBOR Rate Loan. After
giving effect to any Loan, there shall not be more than eight (8)
different Interest Periods in effect.
2.5 Conversion and Continuation Elections.
2.5.1 The Company may, upon irrevocable written
notice to the Administrative Agent in accordance with
subsection 2.5.2:
(a) elect to convert, on any Business Day, any
Reference Rate Loans (or any part thereof in an amount not less
than $1,000,000.00) into LIBOR Rate Loans;
(b) elect to convert on any Interest Payment Date any
LIBOR Rate Loans maturing on such Interest Payment Date (or any
part thereof in an amount not less than $1,000,000.00) into
Reference Rate Loans; or
(c) elect to renew on any Interest Payment Date any
LIBOR Rate Loans maturing on such Interest Payment Date (or any
part thereof in an amount not less than $1,000,000.00);
provided, that if the aggregate amount of LIBOR Rate Loans in respect
of any Borrowing shall have been reduced, by payment, prepayment or
conversion of part thereof, to less than $1,000,000.00, such LIBOR
Rate Loans shall automatically convert into Reference Rate Loans, and
on and after such date the right of the Company to continue such Loans
as, and convert such Loans into, LIBOR Rate Loans shall terminate.
2.5.2 The Company shall deliver by telex, cable
or facsimile, confirmed immediately in writing, a Notice of
Conversion/Continuation (which notice must be received by the
Administrative Agent not later than 9:30 a.m. San Francisco time,
(i) at least three (3) Business Days prior to the Conversion Date or
continuation date, if the Loans are to be converted into or continued
as LIBOR Rate Loans, or (ii) on the Conversion Date, if the Loans are
to be converted into Reference Rate Loans) specifying:
(a) the proposed Conversion Date or continuation
date;
(b) the aggregate amount of Loans to be converted or
continued;
(c) the nature of the proposed conversion or
continuation; and
(d) if the Company elects to convert a Reference Rate
Loan into a LIBOR Rate Loan or elects to continue a LIBOR Rate
Loan, the duration of the Interest Period applicable to such
Loan. If the Conversion/Continuation Notice fails to specify the
duration of the Interest Period for a LIBOR Rate Loan, such
Interest Period shall be thirty (30) days.
2.5.3 If upon the expiration of any Interest
Period applicable to LIBOR Rate Loans the Company has failed to select
a new Interest Period to be applicable to LIBOR Rate Loans, or if any
Default or Event of Default shall then exist, the Company shall be
deemed to have elected to convert LIBOR Rate Loans into Reference Rate
Loans effective as of the expiration date of such current Interest
Period.
2.5.4 Notwithstanding any other provision
contained in this Agreement, after giving effect to any conversion or
continuation of any Loans, there shall not be more than eight (8)
different Interest Periods in effect.
2.6 Voluntary Termination or Reduction of Commitment. The
Company may, upon not less than ninety (90) days' prior written notice
to the Administrative Agent, terminate the Banks' commitment to make
Loans to the Company, or permanently reduce the Maximum Commitment
Amount by a minimum amount of $1,000,000.00 or any multiple of
$1,000,000.00 in excess thereof; provided, however, that the Company
shall reduce the Maximum Commitment Amount from time to time so as not
to exceed the "Maximum Commitment Amount" under and as defined in the
Secured Loan Agreement. Once reduced in accordance with this
Section 2.6, the Maximum Commitment Amount may not be increased. Any
reduction of the commitment amounts shall be applied to each Bank
according to its Pro Rata Share.
2.7 Principal Payments.
2.7.1 Optional Repayments. Subject to
Section 3.4, the Company may, at any time or from time to time, upon
at least one (1) Business Day's prior written notice to the
Administrative Agent, ratably prepay Loans other than Swing Loans in
part in an amount not less than $250,000.00. Such notice of
prepayment shall specify the date and amount of such prepayment and
the Type(s) of Loans to be repaid. The Administrative Agent will
promptly notify each Bank of its receipt of any such notice, and of
such Bank's Pro Rata Share of such prepayment. If the Company gives a
prepayment notice to the Administrative Agent, such notice is
irrevocable and the prepayment amount specified in such notice shall
be due and payable on the date specified therein, together with
accrued interest to such date, if required by the Administrative
Agent, on the amount prepaid and all amounts required to be paid
pursuant to Section 3.4.
2.7.2 Mandatory Repayments.
(a) Availability Limit. Should the aggregate
principal amount of the outstanding Loans other than Swing Loans at
any time exceed the Availability, the Company shall immediately repay
such excess to the Administrative Agent, for the account of the Banks.
Should the aggregate principal amount of the outstanding Swing Loans
at any time exceed the Swing Line Availability, the Company shall
immediately repay such excess to the Administrative Agent, for the
account of the Swing Line Lender.
(b) Annual Clean-Down. Notwithstanding any contrary
provision of this Agreement, the aggregate principal amount
outstanding under this Agreement shall be reduced to zero ($0) for at
least thirty (30) consecutive calendar days during each one-year
period prior to the Maturity Date commencing on June 1 and ending on
May 31, commencing with the period ending on May 31, 1998.
(c) Application of Repayments. Any repayments
pursuant to this subsection 2.7.2 shall be (i) subject to Section 3.4,
and (ii) applied first to any Reference Rate Loans then outstanding
and then to LIBOR Rate Loans with the shortest Interest Periods
remaining.
2.7.3 Repayment at Maturity. The Company shall
repay the principal amount of all outstanding Loans on the Maturity
Date or, if earlier, upon termination of the Banks' commitment
pursuant to Section 2.6.
2.8 Interest.
2.8.1 Accrual Rate. Subject to subsection 2.8.3,
each Loan shall bear interest on the outstanding principal amount
thereof from the date when made until it becomes due at a rate per
annum equal to the LIBOR Rate or the Reference Rate, as the case may
be, plus the Applicable Margin.
2.8.2 Payment. Interest on each Loan shall be
payable in arrears on each Interest Payment Date. Interest shall also
be payable on the date of any repayment of Loans pursuant to
subsections 2.7.1 and 2.7.2 for the portion of the Loans so repaid and
upon payment (including prepayment) in full thereof, if required by
the Administrative Agent, and, during the existence of any Event of
Default, interest shall be payable on demand.
2.8.3 Default Interest. Commencing (i) ten (10)
Business Days after the occurrence of any Event of Default under
subsection 8.1.3 or (ii) upon the occurrence of any other Event of
Default, and continuing thereafter while such Event of Default exists,
or after maturity or acceleration, the Company shall pay interest
(after as well as before entry of judgment thereon to the extent
permitted by law) on the principal amount of all Obligations due and
unpaid, at a rate per annum which is determined by adding 3% per annum
to the Applicable Margin then in effect for such Loans; provided,
however, that, on and after the expiration of any Interest Period
applicable to any LIBOR Rate Loan outstanding on the date of
occurrence of such Event of Default or acceleration, the principal
amount of such Loan shall, during the continuation of such Event of
Default or after acceleration, bear interest at a rate per annum equal
to the Reference Rate plus 3.25%.
2.8.4 Maximum Legal Rate. Notwithstanding any
contrary provision this Agreement, the Company's obligations to any
Bank hereunder shall be subject to the limitation that payments of
interest shall not be required, for any period for which interest is
computed hereunder, to the extent (but only to the extent) that such
Bank's contracting for or receiving such payment would be contrary to
the provisions of any law applicable to such Bank limiting the highest
rate of interest that such Bank may lawfully contract for, charge or
receive, and in such event the Company shall pay such Bank interest at
the highest rate permitted by applicable law.
2.9 Computation of Interest. All computations of interest
under this Agreement shall be made on the basis of a 360-day year and
actual days elapsed, which results in more interest being paid than if
computed on the basis of a 365-day year. Interest shall accrue during
each period during which interest is computed from the first day
thereof to the last day thereof. Any change in the interest rate on a
Loan resulting from a change in the Reference Rate or the Reserve
Percentage shall become effective as of the opening of business on the
day on which such change in the Reference Rate or the Reserve
Percentage becomes effective. Each determination of an interest rate
by the Administrative Agent pursuant to any provision of this
Agreement shall be conclusive and binding on the Company and the Banks
in the absence of manifest error.
2.10 Payments by the Company.
2.10.1 All payments (including prepayments) to be
made by the Company on account of principal, interest, fees and other
amounts required hereunder shall be made without set off or
counterclaim and shall, except as otherwise expressly provided herein,
be made to the Administrative Agent for the account of the Banks at
the Administrative Agent's Payment Office, in dollars and in
immediately available funds, no later than 10:00 a.m. San Francisco
time on the date specified herein. The Administrative Agent will
promptly distribute to each Bank its Pro Rata Share (or other
applicable share as provided herein) of such payment in like funds as
received. Any payment received by the Administrative Agent later than
10:00 a.m. San Francisco time shall be deemed to have been received on
the immediately succeeding Business Day and any applicable interest or
fee shall continue to accrue.
2.10.2 Subject to the provisions set forth in the
definition of the term "Interest Period," whenever any payment
hereunder is stated to be due on a day other than a Business Day, such
payment shall be made on the next succeeding Business Day, and such
extension of time shall in such case be included in the computation of
interest or fees, as the case may be.
2.10.3 Unless the Administrative Agent receives
notice from the Company prior to the date on which any payment is due
and payable to the Banks that the Company will not make such payment
in full as and when required, the Administrative Agent may assume that
the Company has made such payment in full to the Administrative Agent
on such date in immediately available funds and the Administrative
Agent may (but shall not be so required), in reliance upon such
assumption, distribute to each Bank on such date an amount equal to
the amount then due and payable to such Bank. If and to the extent
the Company has not made such payment in full to the Administrative
Agent, each Bank shall repay to the Administrative Agent on demand the
amount distributed to such Bank, together with interest thereon at the
Federal Funds Rate for each day from the date such amount is
distributed to such Bank until the date repaid.
2.11 Payments by the Banks to the Administrative Agent.
2.11.1 With respect to any Borrowing, unless the
Administrative Agent receives notice from a Bank at least one (1)
Business Day prior to the date of such Borrowing, that such Bank will
not make available to the Administrative Agent, for the account of the
Company, the amount of that Bank's Pro Rata Share of the Borrowing as
and when required hereunder, the Administrative Agent may assume that
each Bank has made such amount available to the Administrative Agent
in immediately available funds on the borrowing date and the
Administrative Agent may (but shall not be so required), in reliance
upon such assumption, make available to the Company on such date a
corresponding amount. If and to the extent any Bank shall not have
made its full amount available to the Administrative Agent in
immediately available funds and the Administrative Agent in such
circumstances has made available to the Company such amount, that Bank
shall, on the Business Day following such borrowing date, make such
amount available to the Administrative Agent, together with interest
at the Federal Funds Rate for each day during such period. A notice
of the Administrative Agent submitted to any Bank with respect to
amounts owing under this Section 2.11 shall be conclusive absent
manifest error. If such amount is so made available, such payment to
the Administrative Agent shall constitute such Bank's Loan on the date
of Borrowing for all purposes of this Agreement. If such amount is
not made available to the Administrative Agent on the Business Day
following the Borrowing Date, the Administrative Agent will notify the
Company of such failure to fund and, upon demand by the Administrative
Agent, the Company shall pay such amount to the Administrative Agent
for the Administrative Agent's account, together with interest thereon
for each day elapsed since the date of such Borrowing, at a rate per
annum equal to the interest rate applicable at the time to the Loans
comprising such Borrowing.
2.11.2 The failure of any Bank to make any Loan on
any Borrowing Date shall not relieve any other Bank of any obligation
hereunder to make a Loan on such Borrowing Date, but no Bank shall be
responsible for the failure of any other Bank to make the Loan to be
made by such other Bank on any borrowing date.
2.12 Sharing of Payments, Etc. If, other than as expressly
provided elsewhere herein, any Bank shall obtain on account of the
Obligations owing to it any payment (whether voluntary, involuntary,
or otherwise) in excess of its ratable share (or other share
contemplated hereunder), such Bank shall immediately (a) notify the
Administrative Agent of such fact, and (b) purchase from the other
Banks such participations in the Loans made by them as shall be
necessary to cause such purchasing Bank to share the excess payment
pro rata with each of them; provided, however, that if all or any
portion of such excess payment is thereafter recovered from the
purchasing Bank, such purchase shall to that extent be rescinded, and
each other Bank shall repay to the purchasing Bank the purchase price
paid therefor, together with an amount equal to such paying Bank's
ratable share (according to the proportion of (i) the amount of such
paying Bank's required repayment to (ii) the total amount so recovered
from the purchasing Bank) of any interest or other amount paid or
payable by the purchasing Bank in respect of the total amount so
recovered. The Company agrees that any Bank so purchasing a
participation from another Bank may, to the fullest extent permitted
by law, exercise all its rights of payment (other than the right of
set-off) with respect to such participation as fully as if such Bank
were the direct creditor of the Company in the amount of such
participation. The Administrative Agent will keep records (which
shall be conclusive and binding in the absence of manifest error) of
participations purchased under this Section and will in each case
notify the Banks following any such purchases or repayments.
3. Taxes, Yield Protection and Illegality.
3.1 Taxes. If any taxes (other than taxes on a Bank's net
income) are at any time imposed on any payments under or in respect of
this Agreement or any instrument or agreement required hereunder,
including payments made pursuant to this Section 3.1, the Company
shall pay all such taxes and shall also pay to the Administrative
Agent, for the account of the applicable Bank, at the time interest is
paid, all additional amounts which such Bank specifies as necessary to
preserve the yield, after payment of such taxes, that such Bank would
have received if such taxes had not been imposed.
3.2 Illegality.
(a) If any Bank determines that (i) the introduction
of any Requirement of Law, or any change in any Requirement of
Law or in the interpretation or administration thereof, has made
it unlawful, or (ii) any central bank or other Governmental
Authority has asserted that it is unlawful, for such Bank or its
applicable Lending Office to make LIBOR Rate Loans, then, on
notice thereof by such Bank to the Company and the Administrative
Agent, the obligation of such Bank to make LIBOR Rate Loans shall
be suspended until such Bank shall have notified the Company and
the Administrative Agent that the circumstances giving rise to
such determination no longer exist.
(b) If any Bank determines that it is unlawful to
maintain any LIBOR Rate Loan, the Company shall, upon its receipt
of notice of such fact and demand from such Bank (with a copy to
the Administrative Agent), prepay in full all LIBOR Rate Loans of
that Bank then outstanding, together with interest accrued
thereon and any amounts required to be paid in connection
therewith pursuant to Section 3.4, either on the last day of the
Interest Period thereof, if such Bank may lawfully continue to
maintain such LIBOR Rate Loans to such day, or immediately, if
such Bank may not lawfully continue to maintain such LIBOR Rate
Loans.
(c) Notwithstanding any contrary provision of
Section 2.1, if the Company is required to prepay any LIBOR Rate
Loan immediately as provided in subsection 3.2(b), then
concurrently with such prepayment the Company shall borrow a
Reference Rate Loan from the affected Bank in the amount of such
repayment.
(d) If the obligation of any Bank to make or maintain
LIBOR Rate Loans has been terminated, the Company may elect, by
giving notice to such Bank through the Administrative Agent, that
all Loans which would otherwise be made by such Bank as LIBOR
Rate Loans shall instead be Reference Rate Loans.
(e) Before giving any notice to the Administrative
Agent or the Company pursuant to this Section 3.2, the affected
Bank shall designate a different Lending Office with respect to
its LIBOR Rate Loans if such designation would avoid the need for
giving such notice or making such demand and would not, in the
judgment of such Bank, be illegal or otherwise disadvantageous to
such Bank.
3.3 Increased Costs and Reduction of Return.
(a) If any Bank determines that, due to either (i)
the introduction of, or any change (other than a change by way of
imposition of, or increase in, reserve requirements included in
the Reserve Percentage) in or in the interpretation of, any law
or regulation or (ii) the compliance by such Bank (or its Lending
Office) or any Corporation controlling such Bank with any
guideline or request from any central bank or other Governmental
Authority (whether or not having the force of law), there shall
be any increase in the cost to such Bank of agreeing to make or
making, funding or maintaining any LIBOR Rate Loans, then the
Company shall be liable for, and shall from time to time, upon
demand therefor by such Bank with a copy to the Administrative
Agent, pay to the Administrative Agent for the account of such
Bank such additional amounts as are sufficient to compensate such
Bank for such increased costs.
(b) If any Bank determines that (i) the introduction
of any Capital Adequacy Regulation, (ii) any change in any
Capital Adequacy Regulation, (iii) any change in the
interpretation or administration of any Capital Adequacy
Regulation by any central bank or other Governmental Authority
charged with the interpretation or administration thereof, or
(iv) compliance by such Bank (or its Lending Office), or any
corporation controlling such Bank, with any Capital Adequacy
Regulation affects or would affect the amount of capital that
such Bank or any corporation controlling such Bank is required or
expected to maintain, and such Bank (taking into consideration
such Bank's or such corporation's policies with respect to
capital adequacy and such Bank's desired return on capital)
determines that the amount of such capital is increased as a
consequence of any of its loans, credits or obligations under
this Agreement, then, upon demand of such Bank to the Company
through the Administrative Agent, the Company shall immediately
pay to the Administrative Agent, for the account of such Bank,
from time to time as specified by such Bank, additional amounts
sufficient to compensate such Bank for such increase.
3.4 Funding Losses. The Company agrees to pay to the
Administrative Agent, from time to time, for the account of the Banks,
any amount that would be necessary to reimburse the Banks for, and to
hold the Banks harmless from, any loss or expense which the Banks may
sustain or incur as a consequence of:
(a) the failure of the Company to make any payment or
prepayment of principal of any LIBOR Rate Loan (including
payments made after any acceleration thereof);
(b) the failure of the Company to borrow, continue or
convert a Loan after the Company has given (or is deemed to have
given) a Borrowing Notice or a Conversion/Continuation Notice;
(c) the failure of the Company to make any prepayment
after the Company has given a notice in accordance with Section
2.6;
(d) the prepayment (including pursuant to
Section 2.7.2) of a LIBOR Rate Loan on a day which is not the
last day of the Interest Period with respect thereto;
(e) the conversion pursuant to subsection 2.5 of any
LIBOR Rate Loan to a Reference Rate Loan on a day that is not the
last day of the respective Interest Period;
including any such loss or expense arising from the liquidation or
reemployment of funds obtained to maintain the LIBOR Rate Loans
hereunder or from fees payable to terminate the deposits from which
such funds were obtained. Solely for purposes of calculating amounts
payable by the Company to the Administrative Agent, for the account of
the Banks, under this Section 3.4, each LIBOR Rate Loan (and each
related reserve, special deposit or similar requirement) shall be
conclusively deemed to have been funded at the LIBOR used in
determining the LIBOR Rate for such LIBOR Rate Loan by a matching
deposit or other borrowing in the applicable offshore dollar interbank
market for a comparable amount and for a comparable period, whether or
not such LIBOR Rate Loan is in fact so funded.
3.5 Inability to Determine Rates. If any Bank determines
that for any reason adequate and reasonable means do not exist for
ascertaining the LIBOR Rate for any requested Interest Period with
respect to a proposed LIBOR Rate Loan or that the LIBOR Rate
applicable pursuant to subsection 2.8.1 for any requested Interest
Period with respect to a proposed LIBOR Rate Loan does not adequately
and fairly reflect the cost to such Bank of funding such Loan, such
Bank will forthwith give notice of such determination to the Company
through the Administrative Agent. Thereafter, the obligation of such
Bank to make or maintain LIBOR Rate Loans hereunder shall be suspended
until such Bank revokes such notice in writing. Upon receipt of such
notice, the Company may revoke any Borrowing Notice or
Conversion/Continuation Notice then submitted by it. If the Company
does not revoke such notice, the affected Bank shall make, convert or
continue the Loans, as proposed by the Company, in the amount
specified in the applicable notice submitted by the Company, but such
Loans shall be made, converted or continued as Reference Rate Loans
instead of LIBOR Rate Loans.
3.6 Certificate of Bank. Any Bank, if claiming
reimbursement or compensation pursuant to this Article 3, shall
deliver to the Company through the Administrative Agent a certificate
setting forth in reasonable detail the amount payable to such Bank
hereunder, and such certificate shall be conclusive and binding on the
Company in the absence of manifest error.
3.7 Survival. The agreements and obligations of the
Company in this Article 3 shall survive the payment and performance of
all other Obligations.
4. Conditions Precedent.
4.1 Conditions to Approving Parcels. Subject to the
provisions of Section 10.18, a Parcel shall be considered an Approved
Unencumbered Parcel for purposes of this Agreement upon satisfaction
of all of the following conditions precedent:
4.1.1 Fee Ownership. The Company owns fee title to
such Parcel, and has owned fee title to such Parcel for at least
ninety (90) days.
4.1.2 Satisfactory Parcel. Such Parcel (i) is
satisfactory to the Majority Banks in their sole and absolute
discretion and (ii) satisfies all of the following additional
conditions: (1) the Parcel is improved, and the improvements located
on such Parcel are and will be used solely for suburban office,
industrial, warehouse or research and development purposes, (2) not
less than ninety percent (90%) of the net rentable area of the
improvements located on such Parcel are leased to and occupied by
third party tenants who are paying rent, (3) no construction on such
Parcel (other than construction of tenant improvements) is either in
progress or proposed by the Company, and (4) the Administrative Agent
has received evidence in form and substance satisfactory to the
Majority Banks of such Parcel's compliance with the foregoing
conditions.
4.1.3 No Hazardous Materials. Such Parcel shall be
free from all Hazardous Materials, including asbestos, other than
commercially reasonable quantities of Hazardous Materials typically
used in properties similar to such Parcel and permitted by all
applicable Environmental Laws, and the Administrative Agent shall have
received evidence in form and substance satisfactory to the Majority
Banks of such Parcel's compliance with this condition.
4.1.4 No Liens or Negative Pledges. Such Parcel and
all related personal property is (a) not subject to any negative
pledge for the benefit of any Person other than the Banks and (b) free
and clear of all Liens other than Liens securing nondelinquent taxes
or assessments.
4.2 Conditions of Initial Loan. The obligation of the
Banks to make the initial Loan after the Closing Date is subject to
the satisfaction of all of the following conditions precedent:
4.2.1 Deliveries to the Administrative Agent. The
Administrative Agent shall have received, on or before the Closing
Date, all of the following in form and substance satisfactory to the
Administrative Agent and its counsel:
(a) this Agreement and the Revolving Notes executed
by the Company;
(b) a Guaranty executed by each Subsidiary or
Permitted Partnership whose financial results are consolidated
with the Company's financial results for purposes of the
financial statements to be delivered to the Banks pursuant to
subsections 6.1(a) and 6.1(b);
(c) copies of the resolutions of the board of
directors of the Company and each Guarantor approving and
authorizing the execution, delivery and performance by the
Company or such Guarantor of this Agreement and the other Loan
Documents to be delivered hereunder to which such Person is a
party, and authorizing the borrowing or guarantee of the Loans,
as appropriate, certified as of the Closing Date by such Person's
Secretary or an Assistant Secretary of the Company;
(d) certificates of the Secretary or Assistant
Secretary of the Company and each Guarantor certifying the names
and true signatures of the officers of the Company or such
Guarantor authorized to execute and deliver, as applicable, this
Agreement and all other Loan Documents to be delivered hereunder
to which such Person is a party;
(e) the articles or certificate of incorporation of
the Company and each Guarantor as in effect on the Closing Date,
certified by the Secretary of State of the applicable Person's
state of incorporation as of a recent date and the applicable
Person's Secretary or Assistant Secretary as of the Closing Date;
(f) good standing certificates for the Company and
each Guarantor from the Secretary of State of (i) such Person's
state of incorporation and (ii) in the case of the Company, each
state in which an Approved Unencumbered Parcel is situated,
evidencing that the Company is qualified to do business as a
foreign corporation in said state as of a recent date, together
with bringdown certificates by telex or telefacsimile dated the
Closing Date;
(g) an opinion of Bartko, Zankel, Tarrant & Xxxxxx,
or other counsel to the Company and the Guarantors acceptable to
the Administrative Agent, addressed to the Administrative Agent,
substantially in the form of Exhibit D;
(h) a certificate signed by a Responsible Officer,
dated as of the Closing Date, stating that (i) the
representations and warranties contained in Article 5 are true
and correct on and as of such date, as though made on and as of
such date; (ii) no Default or Event of Default exists or would
result from the initial Loan; and (iii) there has occurred since
December 31, 1996, no event or circumstance that could reasonably
be expected to result in a Material Adverse Effect;
(i) a certified copy of financial statements of the
Company and its Subsidiaries referred to in Section 5.11; and
(j) such other approvals, opinions or documents as
the Administrative Agent may request.
4.2.2 Payment of Expenses. The Company shall have
paid all costs, accrued and unpaid fees and expenses incurred by the
Administrative Agent, to the extent then due and payable, on the
Closing Date, including Attorney Costs incurred by the Administrative
Agent, to the extent invoiced prior to or on the Closing Date,
together with such additional amounts of Attorney Costs as shall
constitute a reasonable estimate of Attorney Costs incurred or to be
incurred through the closing proceedings, provided that such estimate
shall not thereafter preclude final settling of accounts between the
Company and the Administrative Agent, including any such costs, fees
and expenses arising under or referenced in Section 10.4.
4.3 Conditions to All Borrowings. The obligation of the
Banks to make any Loan (including the initial Loan) is subject to the
satisfaction of all of the following conditions precedent on the
relevant borrowing date:
4.3.1 Availability. The aggregate outstanding
principal amount of the Loans (including the Loans to be made pursuant
to the contemplated Borrowing) does not exceed the Availability at
such time.
4.3.2 Notice of Borrowing. The Administrative Agent
shall have received a Borrowing Notice.
4.3.3 Continuation of Representations and
Warranties. The representations and warranties made by the Company
contained in Article 5 shall be true and correct on and as of such
borrowing date with the same effect as if made on and as of such
borrowing date (except to the extent such representations and
warranties expressly refer to an earlier date, in which case they
shall be true and correct as of such earlier date).
4.3.4 No Existing Default. No Default or Event of
Default shall exist or shall result from such Loan.
4.3.5 Further Assurances. The Company shall have
executed and acknowledged (or caused to be executed and acknowledged)
and delivered to the Administrative Agent all documents and taken all
actions, reasonably required by the Administrative Agent or the Banks
from time to time to confirm the rights created or now or hereafter
intended to be created by the Loan Documents, or otherwise to carry
out the purposes of the Loan Documents and the transactions
contemplated thereunder.
Each Borrowing Notice submitted by the Company hereunder shall
constitute a representation and warranty by the Company hereunder, as
of the date of each such Borrowing Notice and as of the date of each
Loan, that the conditions in Section 4.3 are satisfied.
5. Representations and Warranties. The Company represents and
warrants to the Administrative Agent and each of the Banks that:
5.1 Existence and Power. The Company and each of its
Subsidiaries (a) is a corporation duly organized, validly existing and
in good standing under the laws of the jurisdiction of its
incorporation; and (b) is duly qualified as a foreign corporation,
licensed and in good standing under the laws of each jurisdiction
where its ownership, lease or operation of property or the conduct of
its business requires such qualification. Each Permitted Partnership
(c) is a limited partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its creation; and
(d) is duly qualified as a foreign limited partnership, licensed and
in good standing under the laws of each jurisdiction where its
ownership, lease or operation of property or the conduct of its
business requires such qualification. The Company, each of its
Subsidiaries and each Permitted Partnership (e) has the power and
authority, and has obtained all governmental licenses, authorizations,
consents and approvals needed, to own its assets, to carry on its
business and to execute, deliver and perform its obligations under the
Loan Documents to which it is a party; and (f) is in compliance with
all Requirements of Law; except, in each case referred to in
clause (b), clause (d) or clause (f), to the extent that failure to do
so could not reasonably be expected to have a Material Adverse Effect.
5.2 Corporate Authorization; No Contravention. The
execution, delivery and performance by the Company of this Agreement
and any other Loan Document have been duly authorized by all necessary
corporate action, and do not and will not:
(a) contravene the terms of any of the Company's
Organization Documents;
(b) conflict with or result in any breach or
contravention of, or the creation of any Lien under, any
Contractual Obligation to which the Company is a party or any
order, injunction, writ or decree of any Governmental Authority
to which the Company or its Property is subject; or
(c) violate any Requirement of Law.
5.3 Governmental Authorization. No approval, consent,
exemption, authorization or other action by, or notice to or filing
with, any Governmental Authority is necessary or required in
connection with the execution, delivery or performance by, or
enforcement against, the Company of this Agreement or any other Loan
Document to which the Company is a party.
5.4 Binding Effect. This Agreement and each other Loan
Document constitute the legal, valid and binding obligations of the
Company, enforceable in accordance with their respective terms, except
as enforceability may be limited by applicable bankruptcy, insolvency
or similar laws affecting the enforcement of creditors' rights
generally or by equitable principles relating to enforceability.
5.5 Litigation. Except as specifically disclosed in
Schedule 5.5, there are no actions, suits, proceedings, claims or
disputes pending, or to the best knowledge of the Company threatened
or contemplated, at law, in equity, in arbitration or before any
Governmental Authority, against the Company, any of its Subsidiaries
or any Permitted Partnership, or any of their respective Properties,
which (a) purport to affect or pertain to this Agreement or any other
Loan Document, or any of the transactions contemplated hereby or
thereby, or (b) if determined adversely to the Company, one or more of
its Subsidiaries or one or more Permitted Partnerships would
reasonably be expected to have a Material Adverse Effect. No
injunction, writ, temporary restraining order or any order of any
nature has been issued by any court or other Governmental Authority
purporting to enjoin or restrain the execution, delivery or
performance of this Agreement or any other Loan Document, or directing
that the transactions provided for herein or therein not be
consummated as herein or therein provided.
5.6 No Default. No Default or Event of Default exists or
would result from the incurring of any Obligations by the Company.
Neither the Company nor any of its Subsidiaries nor any Permitted
Partnership is in default under or with respect to any Contractual
Obligation in any respect which, individually or together with all
such defaults, could reasonably be expected to have a Material Adverse
Effect.
5.7 ERISA Compliance. Each Plan and Multi-employer Plan
is in full compliance with applicable Requirements of Law, including
ERISA, and no ERISA Events or accumulated funding deficiencies within
the meaning of ERISA have occurred with respect to any Qualified Plan
or Multi-employer Plan that, in the aggregate, could result in a
Material Adverse Effect.
5.8 Use of Proceeds; Margin Regulations. The proceeds of
the Loans are intended to be and shall be used solely for the purposes
set forth in and permitted by Section 6.11, and are intended to be and
shall be used in compliance with Section 7.6.
5.9 Title to Properties. The Company, each of its
Subsidiaries and each Permitted Partnership has good record and
marketable title in fee simple to all real Property necessary or used
in the ordinary conduct of its business, except for such defects in
title as could not, individually or in the aggregate, have a Material
Adverse Effect. As of the Closing Date, the Property of the Company,
its Subsidiaries and each Permitted Partnership is subject to no Liens
that are not disclosed in the most recent financial statements
delivered to the Administrative Agent other than Permitted Liens and,
with respect to a Property other than an Approved Unencumbered Parcel
(i) Liens securing the performance of obligations under recorded
covenants, conditions and restrictions, easements or other agreements
among adjoining landowners, and (ii) Liens securing purchase money
financing of fixtures and equipment, or securing other indebtedness
that in the aggregate does not exceed $100,000.
5.10 Taxes. The Company, its Subsidiaries and each
Permitted Partnership have filed all federal and other material tax
returns and reports required to be filed, and have paid all federal
and other material taxes, assessments, fees and other governmental
charges levied or imposed upon them or their Properties, income or
assets otherwise due and payable, except those which are being
contested in good faith by appropriate proceedings and for which
adequate reserves have been provided in accordance with GAAP, and no
Notice of Lien has been filed or recorded. There is no proposed tax
assessment against the Company, any of its Subsidiaries or any
Permitted Partnership that would, if the assessment were made, have a
Material Adverse Effect.
5.11 Financial Condition.
(a) The unaudited consolidated financial statements
of the Company and its Subsidiaries dated December 31, 1996, and
the related consolidated statements of operations, shareholders'
equity and cash flows for the quarter ended on that date:
(i) were prepared in accordance with GAAP consistently
applied throughout the period covered thereby, except as otherwise
expressly noted therein;
(ii) are complete, accurate and fairly present the
financial condition of the Company and its Subsidiaries as of the date
thereof and results of operations for the period covered thereby; and
(iii) except as specifically disclosed in Schedule
5.11, show all material Indebtedness and other liabilities, direct or
contingent, of the Company and its consolidated Subsidiaries as of the
date thereof, including liabilities for taxes, material commitments
and Contingent Obligations.
(b) Since December 31, 1996, there has been no
Material Adverse Effect.
5.12 Environmental Matters.
(a) Except as specifically disclosed in Schedule
5.12, to the best knowledge of the Company the on-going
operations of the Company, each of its Subsidiaries and each
Permitted Partnership comply in all respects with all
Environmental Laws, except such non-compliance which would not
(if enforced in accordance with applicable law) result in
liability in excess of $50,000 in the aggregate.
(b) Except as specifically disclosed in
Schedule 5.12, the Company, each of its Subsidiaries and each
Permitted Partnership has obtained all licenses, permits,
authorizations and registrations required under any Environmental
Law ("Environmental Permits") and necessary for its ordinary
course operations, all such Environmental Permits are in good
standing, and the Company, each of its Subsidiaries and each
Permitted Partnership is in compliance with all material terms
and conditions of such Environmental Permits.
(c) Except as specifically disclosed in Schedule
5.12, none of the Company, any of its Subsidiaries, any Permitted
Partnership or any of their respective present Property or
operations is subject to any outstanding written order from, or
agreement with, any Governmental Authority, or subject to any
judicial or docketed administrative proceeding, respecting any
Environmental Law, Environmental Claim or Hazardous Material.
(d) Except as specifically disclosed in
Schedule 5.12, to the best knowledge of the Company there are no
Hazardous Materials or other conditions or circumstances existing
with respect to any Parcel, or arising from operations of the
Company, any of its Subsidiaries or any Permitted Partnership
prior to the Closing Date, that would reasonably be expected to
give rise to Environmental Claims with a potential liability of
the Company and its Subsidiaries in excess of $50,000 in the
aggregate for any such condition, circumstance or Parcel. In
addition, (i) neither the Company nor any of its Subsidiaries nor
any Permitted Partnership has any underground storage tanks (x)
that are not properly registered or permitted under applicable
Environmental Laws, or (y) that are leaking or disposing of
Hazardous Materials off-site, and (ii) the Company, its
Subsidiaries and each Permitted Partnership have notified all of
their employees of the existence, if any, of any health hazard
arising from the conditions of their employment and have met all
notification requirements under Title III of CERCLA and all other
Environmental Laws.
5.13 Regulated Entities. Neither the Company nor any
Person controlling the Company is (a) an "Investment Company" within
the meaning of the Investment Company Act of 1940; or (b) subject to
regulation under the Public Utility Holding Company Act of 1935, the
Federal Power Act, the Interstate Commerce Act, any state public
utilities code, or any other federal or state statute or regulation
limiting its ability to incur Indebtedness.
5.14 No Burdensome Restrictions. The Company is not a
party to, or bound by, any Contractual Obligation, or subject to any
charter or corporate restriction or any Requirement of Law, which
could reasonably be expected to have a Material Adverse Effect.
5.15 Solvency. The Company is Solvent, each of its
Subsidiaries is Solvent and each Permitted Partnership is Solvent.
5.16 Subsidiaries; Equity Investments. As of the Closing
Date, the Company has no Subsidiaries other than those specifically
disclosed in part (a) of Schedule 5.16, and has no equity investments
in any (i) Permitted Partnership other than those specifically
disclosed in part (b) of Schedule 5.16 or (ii) other corporation,
partnership or other entity other than those specifically disclosed in
part (c) of Schedule 5.16.
5.17 Brokers; Transaction Fees. Neither the Company nor
any of its Subsidiaries has any obligation to any Person in respect of
any finder's, broker's or investment banker's fee in connection with
the transactions contemplated hereby.
5.18 Insurance. The Properties of the Company, its
Subsidiaries and each Permitted Partnership are insured with
financially sound and reputable insurance companies in such amounts,
with such deductibles and covering such risks as are customarily
carried by companies engaged in similar businesses and owning similar
Properties in localities where the Company, such Subsidiary or such
Permitted Partnership operates.
5.19 Full Disclosure. None of the representations or
warranties made by the Company or any of its Subsidiaries in the Loan
Documents, as of the date such representations and warranties are made
or deemed made, and none of the statements contained in any exhibit,
report, statement or certificate furnished by or on behalf of the
Company or any of its Subsidiaries in connection with the Loan
Documents, contains any untrue statement of a material fact or omits
any material fact required to be stated therein or necessary to make
the statements made therein, in light of the circumstances under which
they are made, not misleading.
6. Affirmative Covenants. The Company covenants and agrees
that, so long as any Bank shall have any obligation hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, unless
the Administrative Agent, on behalf of the Majority Banks, waives
compliance in writing:
6.1 Financial Statements. The Company shall deliver to
each of the Banks, in form and detail satisfactory to the
Administrative Agent:
(a) as soon as publicly available, but not later than
120 days after the end of each calendar year, a copy of the
audited consolidated balance sheet of the Company, its
consolidated subsidiaries and each Permitted Partnership as at
the end of such year and the related consolidated statements of
income, shareholders' equity and cash flows for such calendar
year, setting forth in each case in comparative form the figures
for the previous year, and accompanied by the opinion of a
nationally recognized independent public accounting firm stating
that such consolidated financial statements present fairly the
financial position for the periods indicated in conformity with
GAAP applied on a basis consistent with prior years;
(b) as soon as publicly available, but not later than
60 days after the end of each calendar quarter of each year, a
copy of the unaudited consolidated balance sheet of the Company,
its consolidated Subsidiaries and each Permitted Partnership as
of the end of such quarter and the related consolidated
statements of income, shareholders' equity and cash flows for the
period commencing on the first day and ending on the last day of
such quarter, certified by an appropriate Responsible Officer as
being complete and correct and fairly presenting the financial
position and results of operations of the Company, the
Subsidiaries and the Permitted Partnerships in accordance with
GAAP;
(c) as soon as available, but not later than 60 days
after the end of each semi-annual period ending on June 30 and
December 31, rolling two-year consolidated cash flow projections
for the Company, each of its Subsidiaries and each Permitted
Partnership, certified by an appropriate Responsible Officer of
the Company as being complete and correct in all material
respects; and
(d) not later than 30 days after the end of each
calendar month, a report in form and substance satisfactory to
the Administrative Agent concerning the status of all development
activity of the Company, each of its Subsidiaries and each
Permitted Partnership.
6.2 Certificates; Other Information. The Company shall
furnish to the Administrative Agent, with sufficient copies for each
Bank:
(a) as soon as available, but not later than 45 days
after the end of each calendar quarter of each year, operating
statements and rent rolls for each Approved Unencumbered Parcel,
certified by an appropriate Responsible Officer as being complete
and correct, together with any additional information relating to
any such Approved Unencumbered Parcel reasonably requested by the
Administrative Agent;
(b) concurrently with the delivery of the financial
statements referred to in subsections 6.1(a) and (b) above, a
certificate of a Responsible Officer (i) stating that, to the
best of such officer's knowledge, the Company, during such
period, has observed and performed all of its covenants and other
agreements, and satisfied every condition contained in this
Agreement to be observed, performed or satisfied by it, and that
such officer has obtained no knowledge of any Default or Event of
Default except as specified (by applicable subsection reference)
in such certificate, and (ii) showing in detail the calculations
supporting such statement in respect of Sections 2.7.2(a), 7.10,
7.11, 7.14, 7.15, 7.16 and 7.17, (iii) listing the Approved
Unencumbered Parcels and the Current Value and the Mortgage Value
of each such Approved Unencumbered Parcel, (iv) certifying that
the Company will continue to maintain the Approved Unencumbered
Parcels so long as any amounts remain outstanding on the Loans,
and (v) certifying that the Company has not granted a negative
pledge covering any Approved Unencumbered Parcel to any other
Person;
(c) promptly after the same are sent, copies of all
financial statements and reports which the Company sends to its
shareholders; and promptly after the same are filed, copies of
all financial statements and regular, periodical or special
reports which the Company may make to, or file with, the SEC or
any successor or similar Governmental Authority; and
(d) promptly, such additional business, financial,
corporate affairs and other information as the Administrative
Agent may from time to time reasonably request.
6.3 Notices. The Company shall promptly notify the
Administrative Agent:
(a) upon, but in no event later than ten (10) days
after, becoming aware of (i) the occurrence of any Default or
Event of Default, and (ii) the occurrence or existence of any
event or circumstance that foreseeably will become a Default or
Event of Default;
(b) of (i) any breach or non-performance of, or any
default under, any Contractual Obligation of the Company, any of
its Subsidiaries or any Permitted Partnership which could result
in a Material Adverse Effect; and (ii) any dispute, litigation,
investigation, proceeding or suspension which may exist at any
time between the Company or any of its Subsidiaries or any
Permitted Partnership and any Governmental Authority;
(c) of the commencement of, or any material
development in, any litigation or proceeding affecting the
Company, any Subsidiary or any Permitted Partnership (i) in which
the amount of damages claimed is $500,000 or more, (ii) in which
injunctive or similar relief is sought and which, if adversely
determined, would reasonably be expected to have a Material
Adverse Effect, or (iii) in which the relief sought is an
injunction or other stay of the performance of this Agreement or
any Loan Document;
(d) upon, but in no event later than ten (10) days
after, becoming aware of (i) any and all enforcement, cleanup,
removal or other governmental or regulatory actions instituted,
completed or threatened against the Company, any Subsidiary or
any Permitted Partnership or any of their respective Properties
pursuant to any applicable Environmental Laws, (ii) all other
Environmental Claims, and (iii) any environmental or similar
condition on any real property adjoining or in the vicinity of
any real Property of the Company, any Subsidiary or any Permitted
Partnership that could reasonably be anticipated to cause such
Property or any part thereof to be subject to any restrictions on
the ownership, occupancy, transferability or use of such Property
under any Environmental Laws;
(e) of any of the following ERISA events affecting
the Company or any member of its Controlled Group (but in no
event more than ten (10) days after such event), together with a
copy of any notice with respect to such event that may be
required to be filed with a Governmental Authority and any notice
delivered by a Governmental Authority to the Company or any
member or its Controlled Group with respect to such event:
(i) an ERISA Event;
(ii) the adoption of any new Plan that is subject to Title
IV of ERISA or section 412 of the Code by any member of the Controlled
Group;
(iii) the adoption of any amendment to a Plan that is
subject to Title IV of ERISA or section 412 of the Code, if such
amendment results in a material increase in benefits or Unfunded
Pension Liabilities; or
(iv) the commencement of contributions by any member of the
Controlled Group to any Plan that is subject to Title IV of ERISA or
section 412 of the Code;
(f) any Material Adverse Effect subsequent to the
date of the most recent audited financial statements of the
Company delivered to the Administrative Agent pursuant to
subsection 6.1(a);
(g) of any change in accounting policies or financial
reporting practices by the Company, any of its Subsidiaries or
any Permitted Partnership within ten (10) days of their adoption;
and
(h) of any notice of redemption given with respect to
any or all of the Company's preferred shares, within ten (10)
days of the date of such notice.
Each notice pursuant to this Section shall be accompanied by a written
statement by a Responsible Officer of the Company setting forth
details of the occurrence referred to therein, and stating what action
the Company proposes to take with respect thereto and at what time.
Each notice under subsection 6.3(a) shall describe with particularity
any and all clauses or provisions of this Agreement or other Loan
Document that have been breached or violated.
6.4 Preservation of Corporate Existence, Etc. Subject to
the provisions of Section 7.2, the Company shall, and shall cause each
of its Subsidiaries and each Permitted Partnership to:
(a) preserve and maintain in full force and effect
its corporate or partnership existence and good standing under
the laws of its state or jurisdiction of incorporation;
(b) preserve and maintain in full force and effect
all rights, privileges, qualifications, permits, licenses and
franchises necessary or desirable in the normal conduct of its
business;
(c) use its reasonable efforts, in the Ordinary
Course of Business, to preserve its business organization; and
(d) in the case of each Permitted Partnership,
preserve and maintain in full force and effect, without amendment
or modification, such Permitted Partnership's agreement of
limited partnership and certificate of limited partnership, and
otherwise at all times continue to satisfy all of the
requirements set forth in the definition of the term "Permitted
Partnership".
6.5 Maintenance of Property. The Company shall maintain,
and shall cause each of its Subsidiaries and each Permitted
Partnership to maintain, and preserve all of its Property which is
used or useful in its business in good working order and condition,
ordinary wear and tear excepted and make all necessary repairs thereto
and renewals and replacements thereof except where the failure to do
so could not reasonably be expected to have a Material Adverse Effect.
6.6 Insurance. The Company shall maintain, and shall
cause each Subsidiary and each Permitted Partnership to maintain, with
financially sound and reputable independent insurers, insurance with
respect to its Properties and business against loss or damage of the
kinds customarily insured against by Persons engaged in the same or
similar business, of such types and in such amounts as are customarily
carried under similar circumstances by such other Persons, including
workers' compensation insurance, public liability insurance, property
and casualty insurance and rental interruption insurance, the amount
of which shall not be reduced by the Company, any Subsidiary or any
Permitted Partnership in the absence of thirty (30) days' prior notice
to the Administrative Agent. Upon request of the Administrative
Agent, the Company shall furnish the Administrative Agent at
reasonable intervals (but not more often than once per calendar year)
a certificate of a Responsible Officer of the Company (and, if
requested by the Administrative Agent any insurance broker for the
Company) setting forth the nature and extent of all insurance
maintained by the Company, its Subsidiaries and the Permitted
Partnership in accordance with this Section 6.6 (and which, in the
case of a certificate of a broker, were placed through such broker).
6.7 Payment of Obligations. The Company shall, and shall
cause its Subsidiaries and each Permitted Partnership to, pay and
discharge as the same shall become due and payable, all their
respective obligations and liabilities, including:
(a) all tax liabilities, assessments and governmental
charges or levies upon it or its properties or assets, unless the
same are being contested in good faith by appropriate proceedings
(which proceedings have the effect of preventing the imposition
of a Lien on, or the forfeiture or sale of, any Property of the
Company, any of its Subsidiaries or any Permitted Partnership)
and adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary or Permitted
Partnership;
(b) all lawful claims which, if unpaid, would by law
become a Lien upon its Property unless the same are being
contested in good faith by appropriate proceedings (which
proceedings have the effect of preventing the imposition of a
Lien on, or the forfeiture or sale of, any Property of the
Company, any of its Subsidiaries or any Permitted Partnership)
and adequate reserves in accordance with GAAP are being
maintained by the Company or such Subsidiary or Permitted
Partnership; and
(c) all Indebtedness, as and when due and payable,
but subject to any subordination provisions contained in any
instrument or agreement evidencing such Indebtedness.
6.8 Compliance with Laws. The Company shall comply, and
shall cause each of its Subsidiaries and each Permitted Partnership to
comply, in all material respects with all Requirements of Law of any
Governmental Authority having jurisdiction over it or its business or
any of its Property, except such as may be contested in good faith or
as to which a bona fide dispute may exist.
6.9 Inspection of Property and Books and Records. The
Company shall maintain, and shall cause each of its Subsidiaries and
each Permitted Partnership to maintain, proper books of record and
account in which full, true and correct entries in conformity with
GAAP consistently applied shall be made of all financial transactions
and matters involving the assets and business of the Company and such
Subsidiaries and Permitted Partnerships. The Company shall permit,
and shall cause each of its Subsidiaries and each Permitted
Partnership to permit, representatives of the Administrative Agent or
any Bank to visit and inspect any of their respective Properties, to
examine their respective corporate, financial and operating records,
and make copies thereof or abstracts therefrom, and to discuss their
respective affairs, finances and accounts with their respective
directors, officers and independent public accountants, all at the
expense of the Company (which shall include all internal or outside
legal and other consultant fees and other out-of-pocket expenses
incurred by the Administrative Agent or any of the Banks in connection
with any such inspection, but shall not include the Administrative
Agent's or any Bank's normal overhead or employee costs of
administering the Loans) and at such reasonable times during normal
business hours and as often as may be reasonably desired, upon
reasonable advance notice to the Company; provided, however, that when
an Event of Default exists the Administrative Agent or any Bank may do
any of the foregoing at the expense of the Company at any time during
normal business hours and without advance notice. No actions by the
Administrative Agent or any Bank pursuant to this Section 6.9 shall
unreasonably interfere with (a) the performance by the Company's
employees of their duties or (b) the occupancy of any of the Company's
tenants.
6.10 Environmental Laws. The Company shall, and shall
cause each of its Subsidiaries and each Permitted Partnership to,
conduct its operations and keep and maintain its Property in
compliance with all Environmental Laws whose violation could,
individually or in the aggregate, result in liability in excess of
$250,000. Upon the written request of the Administrative Agent or any
Bank, the Company shall submit, and cause each of its Subsidiaries and
each Permitted Partnership to submit, to the Administrative Agent,
with sufficient copies for each Bank, at the Company's sole cost and
expense, at reasonable intervals, a report providing an update of the
status of any environmental, health or safety compliance, hazard or
liability issue identified in any notice or report required pursuant
to subsection 6.3(d), that could, individually or in the aggregate,
result in liability in excess of $250,000.
6.11 Use of Proceeds. Subject to the provisions of
Section 3.2(c), the Company shall use the proceeds of the Loans solely
for the purpose of (i) facilitating the Company's acquisition of
improved real property (subject to the provisions of Section 7.12),
and (ii) financing the Company's operating expenses.
6.12 Solvency. The Company shall at all times be, and
shall cause each of its Subsidiaries and each Permitted Partnership to
be, Solvent.
6.13 Further Assurances. Promptly upon request by the
Administrative Agent, the Company shall (and shall cause any of its
Subsidiaries or any Permitted Partnership to) do such further acts,
and execute, acknowledge, deliver, record, re-record, file, re-file,
register and re-register any and all deeds, conveyances, security
agreements, deeds of trust, mortgages, assignments, estoppel
certificates, financing statements and continuations thereof,
termination statements, notices of assignment, transfers,
certificates, assurances and other instruments, as the Administrative
Agent may reasonably require from time to time in order to (i) carry
out more effectively the purposes of this Agreement or any other Loan
Document, and (ii) better assure, convey, grant, assign, transfer,
preserve, protect and confirm to the Administrative Agent and the
Banks the rights granted or now or hereafter intended to be granted to
the Administrative Agent or the Banks under any Loan Document or under
any other document executed in connection therewith.
7. Negative Covenants. The Company hereby covenants and agrees
that, so long as any Bank shall have any obligation hereunder, or any
Loan or other Obligation shall remain unpaid or unsatisfied, unless
the Administrative Agent, on behalf of the Majority Banks, waives
compliance in writing:
7.1 Limitation on Liens. The Company shall not, and shall
not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, directly or indirectly, make, create, incur, assume or
suffer to exist any Lien upon or with respect to any part of any
Approved Unencumbered Parcel, whether now owned or hereafter acquired,
other than the following ("Permitted Liens"):
(a) Liens for taxes, fees, assessments or other
governmental charges which are not delinquent or remain payable
without penalty, or to the extent that non-payment thereof is
permitted by Section 6.7, provided that no Notice of Lien has
been filed or recorded; or
(b) carriers', warehousemen's, mechanics',
landlords', materialmen's, repairmen's or other similar Liens
arising in the Ordinary Course of Business which are not
delinquent or remain payable without penalty or which are being
contested in good faith and by appropriate proceedings, which
proceedings have the effect of preventing the forfeiture or sale
of the Property subject thereto.
7.2 Consolidations and Mergers. The Company shall not,
and shall not suffer or permit any of its Subsidiaries or any
Permitted Partnership to, merge, consolidate with or into, or convey,
transfer, lease or otherwise dispose of (whether in one transaction or
in a series of transactions) all or substantially all of its assets
(whether now owned or hereafter acquired) to or in favor of any
Person, except:
(a) any Subsidiary of the Company or any Permitted
Partnership may merge with (i) the Company, provided that the
Company shall be the continuing or surviving Person, or (ii) any
one or more subsidiaries of the Company, provided that (A) if any
transaction shall be between a Permitted Partnership and a
Subsidiary, the Subsidiary shall be the continuing or surviving
Person and (B) if any transaction shall be between a Subsidiary
or any Permitted Partnership and a wholly-owned Subsidiary, the
wholly-owned Subsidiary shall be the continuing or surviving
Person; and
(b) any Subsidiary of the Company or any Permitted
Partnership may sell all or substantially all of its assets (upon
voluntary liquidation or otherwise) to the Company or a
wholly-owned Subsidiary of the Company;
provided, however, that so long as the continuing or surviving Person
remains liable for all of the Company's obligations to the Banks under
the Loan Documents, the Administrative Agent and the Banks shall not
unreasonably withhold their consent to any merger or consolidation of
the Company or any of its Subsidiaries or any Permitted Partnership
with or into any other Person.
7.3 Loans and Investments. The Company shall not, and
shall not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, make any advance, loan, extension of credit or capital
contribution to any Person, including any Affiliate of the Company, or
enter into any partnership, joint venture, limited liability company
or similar entity with any non-Affiliate of the Company, except for
(a) advances, loans, extensions of credit or capital contributions to
Permitted Partnerships whose assets, in the aggregate, do not exceed
twenty percent (20%) of the consolidated assets of the Company, its
Subsidiaries and any Permitted Partnerships, (b) loans to tenants for
tenant improvements in a maximum principal amount of $1,500,000 for
any such loan, and (c) loans to employees of the Company to finance
their purchase of Company stock, where such employee loans are
reported on the Company's financial statements in a manner that does
not affect the Company's total assets, total liabilities or net worth.
7.4 Limitation on Indebtedness. The Company shall not,
and shall not suffer or permit any of its Subsidiaries or any
Permitted Partnership to, create, incur, assume, suffer to exist, or
otherwise become or remain directly or indirectly liable with respect
to any unsecured Indebtedness in an aggregate principal amount in
excess of $2,500,000.00, except (a) accounts payable to trade
creditors for goods and services and current operating liabilities
(not the result of the borrowing of money) incurred in the Ordinary
Course of Business of the Company or such Subsidiary or Permitted
Partnership in accordance with customary terms and paid within the
specified time, and (b) a loan from the Company to Bedford Realty
Partners, L.P., a California limited partnership, in a principal
amount not to exceed $1,500,000.00.
7.5 Transactions with Affiliates. The Company shall not,
and shall not suffer or permit any of its Subsidiaries or any
Permitted Partnership to, enter into any transaction with any
Affiliate of the Company or of any such Subsidiary or Permitted
Partnership, except (a) as expressly permitted by this Agreement, or
(b) in the Ordinary Course of Business and pursuant to the reasonable
requirements of the business of the Company or such Subsidiary or
Permitted Partnership; in each case (a) and (b), upon fair and
reasonable terms no less favorable to the Company or such Subsidiary
or Permitted Partnership than would obtain in a comparable
arm's-length transaction with a Person not an Affiliate of the Company
or such Subsidiary or Permitted Partnership .
7.6 Use of Proceeds. The Company shall not, and shall not
suffer or permit any of its Subsidiaries or any Permitted Partnership
to, use any portion of the Loan proceeds, directly or indirectly,
(i) to purchase or carry Margin Stock, (ii) to repay or otherwise
refinance indebtedness of the Company or others incurred to purchase
or carry Margin Stock, (iii) to extend credit for the purpose of
purchasing or carrying any Margin Stock, (iv) to acquire any security
in any transaction that is subject to Section 13 or 14 of the
Securities and Exchange Act of 1934 or any regulations promulgated
thereunder, or (v) to purchase or redeem any equity security
(including any preferred shares) issued by the Company.
7.7 Contingent Obligations. The Company shall not, and
shall not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, create, incur, assume or suffer to exist any
Contingent Obligations except (i) endorsements for collection or
deposit in the Ordinary Course of Business or (ii) Guaranty
Obligations for the benefit of the Banks.
7.8 Creation of Subsidiaries. The Company shall not, and
shall not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, (i) form any additional Subsidiaries other than
wholly-owned Subsidiaries, or (ii) enter into any additional
partnership, joint venture or similar business arrangement with any
Person except a Permitted Partnership whose assets, when combined with
the aggregate assets of all other Permitted Partnerships, do not
exceed twenty percent (20%) of the consolidated assets of the Company,
its consolidated subsidiaries and any Permitted Partnerships.
7.9 Compliance with ERISA. The Company shall not, and
shall not suffer or permit any of its Subsidiaries to, (i) terminate
any Plan subject to Title IV of ERISA so as to result in any material
(in the opinion of the Administrative Agent) liability to the Company
or any ERISA Affiliate, (ii) permit to exist any ERISA Event, or any
other event or condition, which presents the risk of a material (in
the opinion of the Administrative Agent) liability to any member of
the Controlled Group, (iii) make a complete or partial withdrawal
(within the meaning of ERISA Section 4201) from any Multi-employer
Plan so as to result in any material (in the opinion of the
Administrative Agent) liability to the Company or any ERISA Affiliate,
(iv) enter into any new Plan or modify any existing Plan so as to
increase its obligations thereunder which could result in any material
(in the opinion of the Administrative Agent) liability to any member
of the Controlled Group, or (v) permit the present value of all
nonforfeitable accrued benefits under any Plan (using the actuarial
assumptions utilized by the PBGC upon termination of a Plan)
materially (in the opinion of the Administrative Agent) to exceed the
fair market value of Plan assets allocable to such benefits, all
determined as of the most recent valuation date for each such Plan.
7.10 Debt to Tangible Net Worth Ratio. The Company shall
not at any time permit the ratio of (a) its total consolidated
liabilities (including as liabilities all then-outstanding but undrawn
letters of credit issued by BofA for the Company's account pursuant to
the Secured Loan Agreement and all liabilities of Permitted
Partnerships) to (b) its Tangible Net Worth to be greater than the
ratio set forth below with respect to any fiscal quarter during the
corresponding period set forth below:
Period Ratio
On or before the third
anniversary of the Closing Date 1.00
7.11 Debt Service Coverage Ratio. The Company shall not
permit the ratio of (a) its Cash Flow to (b) its Covenant Debt Service
at any time to be less than 1.50 at any time.
7.12 Change in Business. The Company shall not, and shall
not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, engage in any material line of business substantially
different from those lines of business carried on by it on the date
hereof.
7.13 Accounting Changes. The Company shall not, and shall
not suffer or permit any of its Subsidiaries or any Permitted
Partnership to, make any significant change in accounting treatment or
reporting practices, except as required by GAAP, or change the fiscal
year of the Company or of any of its consolidated Subsidiaries or any
Permitted Partnership.
7.14 Limitation on Dividends. The Company shall not,
during any fiscal quarter, declare or pay dividends to its
shareholders (including the holders of any of its preferred shares) in
an amount that would cause the aggregate amount of dividends paid to
such shareholders during such fiscal quarter and the three (3)
immediately preceding fiscal quarters to exceed ninety-five percent
(95%) of the Company's Funds From Operations during the four (4)
consecutive fiscal quarters immediately preceding the declaration date
of any such dividend; provided, however, that the Company may declare
or pay dividends to its shareholders (including the holders of any of
its preferred shares) in any fiscal quarter in an amount that exceeds
ninety-five percent (95%) of the Company's Funds From Operations
during the fiscal quarter immediately preceding the declaration date
of such dividend only to the extent necessary to preserve the
Company's status as a real estate investment trust for federal income
tax purposes; and provided further, however, that for the calendar
quarter in which any equity offering is completed and the next two (2)
consecutive calendar quarters, the Company may pay dividends to its
shareholders that exceed, in the aggregate, the foregoing limitations
so long as (i) the portion of such dividend payments that relate to
the Company's common and preferred shares issued and outstanding prior
to such equity offering satisfy the foregoing limitations, (ii) such
dividend payments on any new issue of common stock do not exceed the
rate at which the Company pays dividends on its other common stock and
(iii) such dividend payments on any new issue of preferred stock do
not exceed the minimum amount needed to pay the required dividend on
such preferred stock.
7.15 Development Activity. The Company shall not, and
shall not permit any of its Subsidiaries or any Permitted Partnership
to, engage in real estate development activity other than projects
involving at any time aggregate acquisition, development and
construction costs not to exceed at any time an amount equal to twenty
percent (20%) of the consolidated assets of the Company, its
consolidated subsidiaries and any Permitted Partnerships at such time;
provided, however, that no individual project shall involve at any
time aggregate acquisition, development and construction costs in
excess of five percent (5%) of the consolidated assets of the Company,
its consolidated subsidiaries and any Permitted Partnerships.
7.16 Undeveloped Land. The Company will not, and will not
permit any of its Subsidiaries or any Permitted Partnership to,
purchase undeveloped land that (a) is not Entitled Land, or (b) is
encumbered by any Lien (other than a Lien for the benefit of (i) the
Banks, or (ii) the seller of such undeveloped land to secure a
nonrecourse obligation in an amount not to exceed the purchase price
of such undeveloped land), or (c) causes the aggregate value of
undeveloped land owned by the Company, its Subsidiaries and the
Permitted Partnerships to exceed fifteen percent (15%) of the
aggregate value of the consolidated net worth of the Company, its
Subsidiaries and the Permitted Partnerships, determined on a GAAP
basis.
7.17 Tangible Net Worth. The Company shall not at any time
permit its Tangible Net Worth to be less than the sum of (a) One
Hundred Eighty Million Dollars ($180,000,000.00) plus (b) seventy-five
percent (75%) of the proceeds of any equity offering of the Company
after payment of the reasonable expenses of such equity offering.
8. Events of Default and Remedies.
8.1 Event of Default. Any of the following shall
constitute an Event of Default:
8.1.1 Non-Payment. The Company fails to pay,
(i) when and as required to be paid herein, any amount of principal of
any Loan, or (ii) within twenty (20) days after the same shall become
due, any interest, fee or any other amount payable hereunder or
pursuant to any other Loan Document; or
8.1.2 Representation or Warranty. Any
representation or warranty by the Company, any of its Subsidiaries or
any Permitted Partnership made or deemed made in this Agreement or any
other Loan Document, or which is contained in any certificate,
document or financial or other statement by the Company, any of its
Subsidiaries, any Permitted Partnership, or their respective
Responsible Officers, furnished at any time under this Agreement or in
or under any other Loan Document, shall prove to have been incorrect
in any material respect on or as of the date made or deemed made; or
8.1.3 Specific Defaults. The Company fails to
perform or observe any term, covenant or agreement contained in
Sections 6.1, 6.2, 6.3, 6.6, 6.9, 7.10, 7.11 or 7.17; or
8.1.4 Other Defaults. The Company fails to perform
or observe any other term or covenant contained in this Agreement or
any other Loan Document, and such default shall continue unremedied
for a period of twenty (20) days after the earlier of (i) the date
upon which a Responsible Officer of the Company knew of such failure
or (ii) the date upon which written notice thereof is given to the
Company by the Administrative Agent; or
8.1.5 Cross-Default. Either (a) the Company fails
to make any payment in respect of any recourse Indebtedness owed by
the Company when due (whether by scheduled maturity, required
prepayment, acceleration, demand or otherwise) and such failure
continues after the applicable grace or notice period, if any,
specified in the relevant document on the date of such failure, or (b)
the occurrence of an "Event of Default" under and as defined in the
Secured Loan Agreement; or
8.1.6 Insolvency; Voluntary Proceedings. The
Company or any of its Subsidiaries or any Permitted Partnership or any
Guarantor (i) ceases or fails to be Solvent, or generally fails to
pay, or admits in writing its inability to pay, its debts as they
become due, subject to applicable grace periods, if any, whether at
stated maturity or otherwise; (ii) voluntarily ceases to conduct its
business in the ordinary course; (iii) commences any Insolvency
Proceeding with respect to itself; or (iv) takes any action to
effectuate or authorize any of the foregoing; or
8.1.7 Insolvency; Involuntary Proceedings. (i) Any
involuntary Insolvency Proceeding is commenced or filed against the
Company, any Subsidiary of the Company, any Permitted Partnership or
any Guarantor, or any writ, judgment, warrant of attachment, execution
or similar process, is issued or levied against a substantial part of
the Company's or any of its Subsidiaries' or any Permitted
Partnership's or any Guarantor's Properties, and any such proceeding
or petition shall not be dismissed, or such writ, judgment, warrant of
attachment, execution or similar process shall not be released,
vacated or fully bonded within sixty (60) days after commencement,
filing or levy; (ii) the Company or any of its Subsidiaries or any
Permitted Partnership or any Guarantor admits the material allegations
of a petition against it in any Insolvency Proceeding, or an order for
relief (or similar order under non-U.S. law) is ordered in any
Insolvency Proceeding; or (iii) the Company or any of its Subsidiaries
or any Permitted Partnership or any Guarantor acquiesces in the
appointment of a receiver, trustee, custodian, conservator,
liquidator, mortgagee in possession (or agent therefor), or other
similar Person for itself or a substantial portion of its Property or
business; or
8.1.8 ERISA Plans. The occurrence of any one or
more of the following events with respect to the Company, provided
such event or events could reasonably be expected, in the judgment of
the Administrative Agent, to subject the Company to any tax, penalty
or liability (or any combination of the foregoing) which, in the
aggregate, could have a material adverse effect on the financial
condition of the Company with respect to a Plan:
(a) A Reportable Event shall occur with respect
to a Plan which is, in the reasonable judgment of the
Administrative Agent likely to result in the termination of such
Plan for purposes of Title IV of ERISA; or
(b) Any Plan termination (or commencement of
proceedings to terminate a Plan) or the Company's full or partial
withdrawal from a Plan; or
8.1.9 Monetary Judgments. One or more final
(non-interlocutory) judgments, orders or decrees shall be entered
against the Company or any of its Subsidiaries or any Permitted
Partnership or any Guarantor involving in the aggregate a liability
(not fully covered by insurance) as to any single or related series of
transactions, incidents or conditions of $1,000,000 or more, and the
same shall remain unvacated and unstayed pending appeal for a period
of sixty (60) days after the entry thereof; or
8.1.10 Adverse Change. There shall occur a Material
Adverse Effect that continues unremedied for a period of thirty (30)
days after the earlier of (i) the date upon which a Responsible
Officer of the Company knew or should have known of such Material
Adverse Effect or (ii) the date upon which written notice thereof is
given to the Company by the Bank; or
8.1.11 Management Changes. The Chairman of the
Board or the chief executive officer of the Company resigns, is
terminated or otherwise ceases to act for any reason, and such officer
of the Company is not replaced with a person reasonably satisfactory
to the Majority Banks within six (6) months after he ceases to hold
such position.
8.1.12 Preferred Dividend Defaults. The Company
fails to pay in full any two (2) consecutive quarterly dividend
payments owing to holders of the Company's preferred shares.
8.1.13 Early Termination of a Specified Swap
Contract. There occurs under any Specified Swap Contract an Early
Termination Date (as defined in such Specified Swap Contract)
resulting from (i) any event of default under such Specified Swap
Contract as to which the Company is the Defaulting Party (as defined
in such Specified Swap Contract) or (ii) any Termination Event (as
defined in such Specified Swap Contract) as to which the Company is an
Affected Party (as defined in such Specified Swap Contract), the
occurrence of such Early Termination Date gives rise to a monetary
obligation owing from the Company to the Swap Provider under the
Specified Swap Contract, and the Company fails to pay such monetary
obligation within five (5) days of such Swap Provider's demand.
8.2 Remedies. If any Event of Default occurs, the
Administrative Agent shall, at the request of, or may, with the
consent of, the Majority Banks:
8.2.1 Termination of Commitment to Lend. Declare
the commitment of each Bank to make Loans to be terminated,
whereupon such commitment shall forthwith be terminated; and
8.2.2 Acceleration of Loans. Declare the unpaid
principal amount of all outstanding Loans, all interest accrued
and unpaid thereon, and all other amounts owing or payable
hereunder or under any other Loan Document to be immediately due
and payable, without presentment, demand, protest or other notice
of any kind, all of which are hereby expressly waived by the
Company; and
8.2.3 Exercise of Rights and Remedies. Exercise all
rights and remedies available to it under the Loan Documents or
applicable law; provided, however, that upon the occurrence of
any event specified in subsections 8.1.6 or 8.1.7 above (in the
case of clause (i) of subsection 8.1.7 upon the expiration of the
60-day period mentioned therein), the obligation of each Bank to
make Loans shall automatically terminate, and the unpaid
principal amount of all outstanding Loans and all interest and
other amounts as aforesaid shall automatically become due and
payable without further act of the Administrative Agent or any
Bank;
provided, however, that upon the occurrence of an Event of Default
under Section 8.1.12, the Administrative Agent may not exercise any of
its remedies under Sections 8.2.2 or 8.2.3 until the earlier of
(i) the first date on which a notice of redemption is given with
respect to any or all of the Company's preferred shares and
(ii) ninety (90) days after the occurrence of such Event of Default,
unless the Company cures such Event of Default during such ninety (90)
day period.
8.3 Rights Not Exclusive. The rights provided for in this
Agreement and the other Loan Documents are cumulative and are not
exclusive of any other rights, powers, privileges or remedies provided
by law or in equity, or under any other instrument, document or
agreement now existing or hereafter arising.
8.4 Specified Swap Contract Remedies. Notwithstanding any
contrary provision of this Article 8 (other than Section 8.5), but
subject to the provisions of Section 8.5, each Swap Provider shall
have with respect to any Specified Swap Contract of such Swap Provider
the right, to the extent so provided in the applicable Specified Swap
Contract or any master agreement relating thereto, and after notice to
the Administrative Agent, but without the approval or consent of the
Administrative Agent or the other Banks, to (a) declare an event of
default, termination event or other similar event thereunder and to
create an Early Termination Date, and (b) to determine net termination
amounts in accordance with the terms of such Specified Swap Contract
and to set-off amounts between Specified Swap Contracts.
8.5 Subordination of Swap Obligations.
8.5.1 Each Swap Provider agrees that (a) any and all
present and future obligations or liabilities of the Company to a Swap
Provider under any Specified Swap Contract, whether fixed or
contingent, matured or unmatured, or liquidated or unliquidated,
including any net termination amounts payable to the Swap Provider
under any such Specified Swap Contract (collectively, the "Specified
Swap Obligations"), shall be at all times junior and subordinate to
the Obligations, including any claim for interest or expenses accruing
after the commencement of an Insolvency Proceeding by or against the
Company, and (b) all of the Specified Swap Obligations owing from the
Company to each Swap Provider shall have the same priority, and each
Swap Provider shall share equally and ratably (based on the relative
amounts of the Specified Swap Obligations owing from the Company to
each such Swap Provider) in any payment from the Company after all of
the Obligations have been paid or otherwise satisfied in full and the
obligations of the Banks to make Loans hereunder have been terminated.
8.5.2 Notwithstanding any contrary provision of any
Specified Swap Contract, upon the occurrence of any event of default,
a Termination Event or an Early Termination Date under a Specified
Swap Contract, the Swap Provider shall have no right to exercise any
of its rights or remedies against the Company under the Specified Swap
Contract, and the Swap Provider's sole rights and remedies against the
Company shall be limited to those of a "Bank" under the Loan
Documents. In particular, a Swap Provider shall have no right to
commence or prosecute any action against the Company under the
Specified Swap Contract or to set off against any deposit account of
the Company with the Swap Provider. Upon the occurrence and during
the continuance of any Event of Default, any payment by the Company to
a Swap Provider pursuant to a Specified Swap Contract, including any
payment on any claim filed by such Swap Provider in any Insolvency
Proceeding commenced by or against the Company, shall be considered to
be a payment on account of the Obligations that is subject to the
provisions of Section 2.13, until all of the Obligations have been
paid or otherwise satisfied in full, and shall thereafter be
considered to be a payment on account of all of the Specified Swap
Obligations, and shall be shared by all of the Swap Providers pursuant
to this Section 8.5 in the manner set forth in Section 2.13. Each
Swap Provider agrees that the provisions of this Section 8.5.2relating to
restrictions on the exercise of remedies shall not apply
to BofA acting in its capacity as Administrative Agent for the Banks.
8.5.3 Upon the occurrence of an Event of Default,
including an Event of Default under Section 8.1.13, any amounts
collected from the Company shall first be applied to the Obligations,
until all of the Obligations have been paid or otherwise satisfied in
full, and then to the Specified Swap Obligations, until all of the
Specified Swap Obligations have been paid or otherwise satisfied in
full.
8.5.4 Each Swap Provider agrees that its issuance of
a Specified Swap Contract shall not alter any of its rights, duties or
liabilities, or the rights, duties or liabilities of the
Administrative Agent or any other Bank, under the Loan Documents, and
each Swap Provider agrees that the Administrative Agent's or any
Bank's exercise of any of its rights under the Loan Documents, with or
without the consent of such Swap Provider, shall not alter, waive or
otherwise prejudice the Administrative Agent's or any Bank's rights
with respect to such Swap Provider under this Section 8.5.
8.5.5 The provisions of this Section 8.5 shall
survive the full repayment or satisfaction of the Obligations, and
shall continue in force until all of the Specified Swap Obligations
owing from the Company to each Swap Provider have been paid or
otherwise satisfied in full.
9. The Administrative Agent.
9.1 Appointment and Authorization of the Administrative
Agent. Each Bank hereby irrevocably appoints, designates and
authorizes the Administrative Agent to take such action on its behalf
under the provisions of this Agreement and each other Loan Document,
and to exercise such powers and perform such duties, as are expressly
delegated to it by the terms of this Agreement or any other Loan
Document, together with such powers as are reasonably incidental
thereto and as further provided in the Co-Lender Agreement described
below.
9.2 The Administrative Agent's Powers. Subject to the
limitations set forth in the Loan Documents and Co-Lender Agreement,
the Administrative Agent's powers include but are not limited to the
power: (a) to administer, manage and service the Loans; (b) to enforce
the Loan Documents; (c) to make all decisions under the Loan Documents
in connection with the day-to-day administration of the Loans, any
inspections required by the Loan Documents, and other routine
administration and servicing matters; (d) to collect and receive from
the Company or any third persons all payments of amounts due under the
terms of the Loan Documents and to distribute the amounts thereof to
the Banks; (e) to collect and distribute or disburse all other amounts
due under the Loan Documents; (f) to grant or withhold consents,
approvals or waivers, and make any other determinations in connection
with the Loan Documents; and (g) to exercise all such powers as are
incidental to any of the foregoing matters. The Administrative Agent
shall furnish to the Banks copies of material documents, including
confidential ones, received from the Company regarding the Loans, the
Loan Documents and the transactions contemplated thereby. The
Administrative Agent shall have no responsibility with respect to the
authenticity, validity, accuracy or completeness of the information
provided.
9.3 Limitation on the Administrative Agent's Duties.
Notwithstanding any contrary provision of any Loan Document, the
Administrative Agent shall not have any duties or responsibilities
except those expressly set forth in the Loan Documents or the Co-
Lender Agreement, nor shall the Administrative Agent have any
fiduciary relationship with any Bank, and no implied covenants,
responsibilities, duties, obligations or liabilities shall be read
into this Agreement, any other Loan Document or the Co-Lender
Agreement against the Administrative Agent.
9.4 Acknowledgment of Co-Lender Agreement. The Company
acknowledges that the Banks have executed a Co-Lender Agreement to
supplement the Loan Documents with respect to the relationship of the
Banks and the Administrative Agent among themselves in connection with
the Loans. The Co-Lender Agreement is not a Loan Document.
9.5 Successor Administrative Agent. The Administrative
Agent may, and at the request of the Majority Banks shall, resign as
Administrative Agent upon thirty (30) days' notice to the Banks. If
the Administrative Agent resigns under this Agreement, the Majority
Banks shall appoint from among the Banks a successor administrative
agent. If no successor administrative agent is appointed prior to the
effective date of the resignation of the Administrative Agent, the
Administrative Agent may appoint, after consulting with the Banks, a
successor administrative agent which would qualify as an Eligible
Assignee. Upon its acceptance of the appointment as successor
administrative agent hereunder, such successor administrative agent
shall succeed to all of the rights, powers and duties of the retiring
Administrative Agent, the term "Administrative Agent" shall mean such
successor administrative agent, and the retiring Administrative
Agent's appointment, powers and duties as Administrative Agent shall
terminate. After any retiring Administrative Agent's resignation
hereunder as Administrative Agent, the provisions of this Agreement
regarding payment of costs and expenses and indemnification of the
Administrative Agent shall inure to its benefit as to any actions that
such retiring Administrative Agent took or omitted to take while it
was Administrative Agent under this Agreement. If no successor
administrative agent has accepted appointment as Administrative Agent
by the date which is thirty (30) days following a retiring
Administrative Agent's notice of resignation, the retiring
Administrative Agent's resignation shall nevertheless thereupon become
effective, and the Banks shall perform all of the duties of the
Administrative Agent hereunder until such time, if any, as the
Majority Banks appoint a successor administrative agent in the manner
set forth above. Upon replacement of the Administrative Agent as
provided in this Agreement, the former Administrative Agent shall
promptly deliver to the new Administrative Agent copies of any books,
records and documents related to the Loans and the Collateral to which
the Banks are entitled and which is then in the former Administrative
Agent's possession.
10. Miscellaneous.
10.1 Amendments and Waivers. No amendment or waiver of any
provision of this Agreement or any other Loan Document, and no consent
with respect to any departure by the Company or any of its
Subsidiaries therefrom, shall be effective unless the same shall be in
writing and signed by the Administrative Agent at the written request
of the Majority Banks, and then such waiver shall be effective only in
the specific instance and for the specific purpose for which given;
provided however, that no such amendment or waiver shall do any of the
following unless it is in writing and signed by the Administrative
Agent at the written request of all the Banks:
(a) Increase the Commitment of any Bank;
(b) Postpone or delay any date fixed by this
Agreement or any other Loan Document for any payment of
principal, interest, fees or other amounts due to the Banks (or
any one of them) hereunder or under any other Loan Document;
(c) Reduce the rate of interest or any fees or other
amounts payable in connection with the Loan;
(d) Change the voting percentage of the Commitments
or of the aggregate unpaid principal amount of the Loans that is
required for the Banks, or any of them, to take any action
hereunder;
(e) Amend this or any provision requiring consent of
all Banks for action by the Banks or the Administrative Agent;
(f) Discharge the Company or any guarantor, except as
otherwise may be provided in the Loan Documents or except where
the consent of only the Majority Banks is expressly required by
any Loan Document;
(g) Amend Section 7.10, Section 7.11, Section 7.15,
Section 7.16, Section 7.17 or Section 8 of the Loan Agreement, or
the definitions of the terms "Current Value" or "Mortgage Value"
set forth in Section 1.1 of the Loan Agreement.
10.2 Notices.
(a) All notices, requests and other communications
provided for hereunder shall be in writing (including, unless the
context expressly otherwise provides, facsimile transmission) and
mailed (by certified mail, postage prepaid, return receipt
requested), delivered or telecopied to the address or number
specified for notices on the applicable signature page hereof, or
to such other address as shall be designated by such party in a
written notice to the other parties.
(b) All such notices and communications shall, when
transmitted by overnight delivery or telecopied by facsimile, be
effective when delivered for overnight delivery or transmitted by
telecopier, respectively, or if delivered, upon delivery, except
that notices pursuant to Article 2 shall not be effective until
actually received by the Administrative Agent. All notices and
communications telecopied by facsimile will also be mailed by
ordinary first class mail, postage prepaid. All such notices and
communications delivered by mail shall be effective upon the
earlier of (i) two (2) Business Days after deposit in the United
States mail, or (ii) actual receipt, as evidenced by the return
receipt.
(c) The Company acknowledges and agrees that any
agreement of the Administrative Agent at Article 2 herein to
receive certain notices by telephone and facsimile is solely for
the convenience and at the request of the Company. The
Administrative Agent and the Banks shall be entitled to rely on
the authority of any Person purporting to be a Person authorized
by the Company to give such notice, and the Administrative Agent
and the Banks shall not have any liability to the Company or any
other Person on account of any action taken or not taken by the
Administrative Agent or the Banks in reliance upon such
telephonic or facsimile notice. The obligation of the Company to
repay the Loans shall not be affected in any way or to any extent
by any failure by the Administrative Agent or the Banks to
receive written confirmation of any telephonic or facsimile
notice or the receipt by the Administrative Agent or the Banks of
a confirmation which is at variance with the terms understood by
the Administrative Agent or the Banks to be contained in the
telephonic or facsimile notice.
10.3 No Waiver; Cumulative Remedies. No failure on the
part of the Administrative Agent or any Bank in exercising, and no
delay in its exercising, any right, remedy, power or privilege
hereunder shall operate as a waiver thereof; nor shall any single or
partial exercise of any right, remedy, power or privilege hereunder
preclude any other or further exercise thereof or the exercise of any
other right, remedy, power or privilege.
10.4 Costs and Expenses. The Company shall, whether or not
the transactions contemplated hereby shall be consummated:
(a) pay or reimburse the Administrative Agent within
fifteen (15) Business Days after demand (subject to subsection
4.2.2) for all costs and expenses incurred by them in connection
with the development, preparation, delivery, administration
(other than normal overhead costs of administering the Loans) and
execution of, and any amendment, supplement, waiver or
modification to, this Agreement, any other Loan Document and any
other documents prepared in connection herewith or therewith, and
the consummation of the transactions contemplated hereby and
thereby, including Attorney Costs incurred by BofA (including in
its capacity as the Administrative Agent) with respect thereto;
(b) pay or reimburse the Administrative Agent within
fifteen (15) Business Days after demand (subject to subsection
4.2.2) for all costs and expenses incurred in connection with the
enforcement, attempted enforcement or preservation of any rights
or remedies (including in connection with any workout or
restructuring regarding the Loans) under this Agreement, any
other Loan Document, and any such other documents, including
Attorney Costs incurred by the Administrative Agent; and
(c) pay or reimburse BofA (including in its capacity
as the Administrative Agent) within thirty (30) days after demand
(subject to subsection 4.2.2) for all appraisal (including the
allocated cost of internal appraisal services), audit,
environmental inspection and review (including the allocated cost
of such internal services), search and filing costs, fees and
expenses incurred or sustained by BofA (including in its capacity
as the Administrative Agent) in connection with the matters
referred to under paragraphs (a) and (b) of this Section.
10.5 Indemnity. Whether or not the transactions
contemplated hereby shall be consummated, the Company shall pay,
indemnify, and hold the Agent-Related Persons, and each Bank and each
of their respective officers, directors, employees, counsel, agents
and attorneys-in-fact (each, an "Indemnified Person") harmless from
and against any and all liabilities, obligations, losses, damages,
penalties, actions, judgments, suits, costs, charges, expenses or
disbursements (including Attorney Costs) of any kind or nature
whatsoever which may be incurred by or asserted against any such
Indemnified Person arising out of relating to the execution, delivery,
enforcement, performance or administration of this Agreement or any
other Loan Documents, or the transactions contemplated hereby and
thereby, and with respect to any investigation, litigation or
proceeding related to this Agreement or the Loans or the use of the
proceeds thereof, whether or not any Indemnified Person is a party
thereto (all the foregoing, collectively, the "Indemnified
Liabilities"); provided, that the Company shall have no obligation
hereunder to any Indemnified Person with respect to Indemnified
Liabilities arising solely from the negligence or willful misconduct
of such Indemnified Person. The obligations in this Section 10.5
shall survive payment or satisfaction of all other Obligations. At
the election of any Indemnified Person, the Company shall defend such
Indemnified Person using legal counsel satisfactory to such
Indemnified Person in such Person's sole discretion, at the sole cost
and expense of the Company. All amounts owing under this Section 10.5
shall be paid within thirty (30) days after demand.
10.6 Marshaling; Payments Set Aside. Neither the
Administrative Agent not the Banks shall be under any obligation to
marshal any assets in favor of the Company or any other Person,
including any Swap Provider, or against or in payment of any or all of
the Obligations. To the extent that the Company makes a payment or
payments to the Administrative Agent or the Banks, or the
Administrative Agent or the Banks enforce their Liens, and such
payment or payments or the proceeds of such enforcement or any part
thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside or required to be repaid to a trustee,
receiver or any other party in connection with any Insolvency
Proceeding, or otherwise, then to the extent of such recovery the
obligation or part thereof originally intended to be satisfied shall
be revived and continued in full force and effect as if such payment
had not been made or such enforcement had not occurred.
10.7 Successors and Assigns. The provisions of this
Agreement shall be binding upon and inure to the benefit of the
parties hereto and their respective successors and assigns, except
that the Company may not assign or transfer any of its rights or
obligations under this Agreement without the prior written consent of
the Administrative Agent and each Bank.
10.8 Assignments, Participations, Confidentiality.
10.8.1 Assignments. Each Bank may at any time
assign and delegate to one or more Eligible Assignees (each, an
"Assignee") with the written consent of the Company, which consent
shall not be unreasonably withheld (provided that no written consent
of the Company shall be required (a) after the occurrence and during
the continuance of an Event of Default or (b) in connection with any
assignment and delegation to an Affiliate of such Bank), all of the
Loans, the Commitment and the other rights and obligations of such
Bank hereunder and under the other Loan Documents; provided, however,
that any Bank that is or becomes a party to this Agreement from time
to time shall at all times retain an interest in the Loans, the
Commitment and the other rights and obligations of a Bank hereunder in
an amount that bears the same proportion to the interests of all Banks
hereunder as such Bank retains in the loans, commitments and other
rights and obligations of a bank under the Secured Loan Agreement;
provided further, however, that the Company may continue to deal
solely and directly with the assignor Bank in connection with the
interest so assigned to an Assignee until (i) written notice of such
assignment, substantially in the form of Schedule 1 to the attached
Exhibit F, shall have been given to the Company and the Administrative
Agent by such Bank and the Assignee, (ii) such Bank and its Assignee
shall have delivered to the Administrative Agent and the Company an
Assignment and Assumption Agreement substantially in the form of the
attached Exhibit F ("Assignment and Assumption Agreement") (together
with any Note(s) subject to such assignment), and (iii) the Assignee
shall have paid to the Administrative Agent a processing fee in the
amount of $2,500. In the event that the Company elects to permanently
reduce the Maximum Commitment Amount pursuant to Section 2.6, the
minimum required hold amounts and the minimum amount of any assignment
of a Bank's interest in the Loans, the Commitment and the other rights
and obligations of such Bank hereunder and under the other Loan
Documents shall be reduced pro rata.
10.8.2 From and after the date on which the
Administrative Agent notifies the assigning Bank that all conditions
and requirements of the assignment have been met, then to the extent
that rights and obligations hereunder have been assigned (a) the
Assignee thereunder shall be a party hereto and shall have the rights
and obligations of a Bank under the Loan Documents and the Co-Lender
Agreement, (b) the assigning Bank shall relinquish such assigned
rights and be released from such assigned obligations under the Loan
Documents, (c) this Agreement shall be deemed to be amended to the
extent necessary to reflect the addition of the Assignee and the
resulting adjustment of the Pro Rata Shares of the Loans arising
therefrom, and (d) the Pro Rata Share allocated to an Assignee shall
reduce the Pro Rata Share of the assigning Bank.
10.8.3 Participations. Subject to the limitations
set forth in Section 10.8.1, which apply equally to participations and
assignments, any Bank (the "originating Bank") may at any time sell to
one or more Persons that are not Affiliates of the Company (each, a
"Participant") participating interests in any Loans, the Commitment
and the other interests of such originating Bank hereunder and under
the other Loan Documents; provided, however, that (a) the originating
Bank's obligations under this Agreement shall remain unchanged,
(b) the originating Bank shall remain solely responsible for the
performance of such obligations, (c) the Company and the
Administrative Agent shall continue to deal solely and directly with
the originating Bank in connection with the originating Bank's rights
and obligations under this Agreement and the other Loan Documents,
(d) the Participant shall, together with the originating Bank, be
entitled to the non-exclusive protections of Sections 3.1 and 3.3 as
though it were also the originating Bank hereunder, and (e) no Bank
shall transfer or grant any participating interest under which the
Participant has rights to approve any amendment, consent or waiver
with respect to any Loan Document, except to the extent such
amendment, consent or waiver would require unanimous consent of the
Banks. A Participant shall not have any rights under the Loan
Documents or the Co-Lender Agreement, and all amounts payable by the
Company hereunder shall be determined as if the originating Bank had
not sold such participation.
10.8.4 Pledge to Federal Reserve Bank.
Notwithstanding any other provision, a Bank may pledge its interest in
the Commitment, in the Loans and under the Loan Documents in favor of
any Federal Reserve Bank in accordance with Federal law.
10.8.5 Confidentiality. Each Bank agrees to take
normal and reasonable precautions and exercise due care to maintain
the confidentiality of all non-public information provided to it by
the Company or any Subsidiary of the Company in connection with this
Agreement or any other Loan Document, and the Banks and any of its
Affiliates shall not use any such information for any purpose or in
any manner other than pursuant to the terms contemplated by this
Agreement, except to the extent such information (i) was or becomes
generally available to the public other than as a result of a
disclosure by such Bank, or (ii) was or becomes available on a
non-confidential basis from a source other than the Company (provided
that such source is not bound by a confidentiality agreement with the
Company known to such Bank); provided, however, that such Bank may
disclose such information (A) at the request or pursuant to any
requirement of any Governmental Authority to which such Bank is
subject or in connection with an examination of such Bank by any such
authority; (B) pursuant to subpoena or other court process; (C) when
required to do so in accordance with the provisions of any applicable
Requirement of Law; and (D) to such Bank's independent auditors and
other professional advisors. Notwithstanding the foregoing, the
Company authorizes each Bank to disclose to any Participant or
Assignee (each, a "Transferee"), and to any prospective Transferee,
such financial and other information in such Bank's possession
concerning the Company or its Subsidiaries which has been delivered to
such Bank pursuant to this Agreement or which has been delivered to
such Bank by the Company in connection with the Bank's credit
evaluation of the Company prior to entering into this Agreement;
provided that, unless otherwise agreed by the Company, such Transferee
agrees in writing with such Bank to keep such information confidential
to the same extent required of such Bank hereunder.
10.9 Counterparts. This Agreement may be executed by one
or more of the parties to this Agreement in any number of separate
counterparts, each of which, when so executed, shall be deemed an
original, and all of said counterparts taken together shall be deemed
to constitute but one and the same instrument.
10.10 Severability. The illegality or unenforceability of
any provision of this Agreement or any instrument or agreement
required hereunder shall not in any way affect or impair the legality
or enforceability of the remaining provisions of this Agreement or any
instrument or agreement required hereunder.
10.11 No Third Parties Benefited. This Agreement is made
and entered into for the sole protection and legal benefit of the
Company, the Banks, the Administrative Agent and the Agent-Related
Persons, and their permitted successors and assigns, and no other
Person (other than an Indemnified Person under Section 10.5) shall be
a direct or indirect legal beneficiary of, or have any direct or
indirect cause of action or claim in connection with, this Agreement
or any of the other Loan Documents. The Administrative Agent shall
have no obligation to any Person not a party to this Agreement or
other Loan Documents.
10.12 Time. Time is of the essence as to each term or
provision of this Agreement and each of the other Loan Documents.
10.13 Governing Law. This Agreement and the Revolving
Notes shall be governed by, and construed in accordance with, the laws
of the State of California (without regard to conflicts of law rules);
provided that the Administrative Agent and the Banks shall retain all
rights arising under federal law.
10.14 Arbitration; Reference.
(a) Mandatory Arbitration. Any controversy or claim
between or among the parties, including but not limited to those
arising out of or relating to this Agreement or any agreements or
instruments relating hereto or delivered in connection herewith
and any claim based on or arising from an alleged tort, shall at
the request of any party be determined by arbitration. The
arbitration shall be conducted in accordance with the United
States Arbitration Act (Title 9, U.S. Code), notwithstanding any
choice of law provision in this Agreement, and under the
Commercial Rules of the American Arbitration Association ("AAA").
The arbitrator(s) shall give effect to statutes of limitation in
determining any claim. Any controversy concerning whether an
issue is arbitrable shall be determined by the arbitrator(s).
Judgment upon the arbitration award may be entered in any court
having jurisdiction. The institution and maintenance of an
action for judicial relief or pursuit of a provisional or
ancillary remedy shall not constitute a waiver of the right of
any party, including the plaintiff, to submit the controversy or
claim to arbitration if any other party contests such action for
judicial relief.
(b) Real Property Collateral. Notwithstanding the
provisions of subparagraph 10.13(a), no controversy or claim
shall be submitted to arbitration without the consent of all
parties if, at the time of the proposed submission, such
controversy or claim arises from or relates to an obligation to
the Banks which is secured by real property collateral. If all
parties do not consent to submission of such a controversy or
claim to arbitration, the controversy or claim shall be
determined as provided in subparagraph 10.13(c).
(c) Judicial Reference. At the request of any party,
a controversy or claim which is not submitted to arbitration as
provided and limited in subparagraphs 10.13(a) and 10.13(b) shall
be determined by a reference in accordance with California Code
of Civil Procedure Section 638 et seq. If such an election is
made, the parties shall designate to the court a referee or
referees selected under the auspices of the AAA in the same
manner as arbitrators are selected in AAA-sponsored proceedings.
The presiding referee of the panel, or the referee if there is a
single referee, shall be an active attorney or retired judge.
Judgment upon the award rendered by such referee or referees
shall be entered in the court in which such proceeding was
commenced in accordance with California Code of Civil Procedure
Sections 644 and 645.
(d) Provisional Remedies, Self-Help and Foreclosure.
No provision of this Section 10.13 shall limit the right of any
party to this Agreement to exercise self-help remedies such as
set-off, foreclosure against or sale of any real or personal
property collateral or security, or obtaining provisional or
ancillary remedies from a court of competent jurisdiction before,
after or during the pendency of any arbitration or other
proceeding. The exercise of a remedy does not waive the right of
either party to resort to arbitration or reference. At Bank's
option, foreclosure under a deed of trust or mortgage may be
accomplished either by exercise of a power of sale under the deed
of trust or mortgage or by judicial foreclosure.
10.15 Notice of Claims; Claims Bar. THE COMPANY HEREBY
AGREES THAT IT SHALL GIVE PROMPT WRITTEN NOTICE OF ANY CLAIM OR CAUSE
OF ACTION IT BELIEVES IT HAS, OR MAY SEEK TO ASSERT OR ALLEGE, AGAINST
THE BANK, WHETHER SUCH CLAIM IS BASED IN LAW OR EQUITY, ARISING UNDER
OR RELATED TO THIS AGREEMENT OR ANY OF THE OTHER LOAN DOCUMENTS, OR TO
THE LOANS, OR ANY ACT OR OMISSION TO ACT BY THE ADMINISTRATIVE AGENT
OR ANY BANK WITH RESPECT HERETO OR THERETO, AND THAT IF IT SHALL FAIL
TO GIVE SUCH PROMPT NOTICE TO THE ADMINISTRATIVE AGENT OR SUCH BANK
WITH REGARD TO ANY SUCH CLAIM OR CAUSE OF ACTION, IT SHALL BE DEEMED
TO HAVE WAIVED, AND SHALL BE FOREVER BARRED FROM BRINGING OR
ASSERTING, SUCH CLAIM OR CAUSE OF ACTION IN ANY SUIT, ACTION OR
PROCEEDING IN ANY COURT OR BEFORE ANY GOVERNMENTAL AGENCY.
10.16 Entire Agreement. This Agreement, together with the
other Loan Documents, embodies the entire Agreement and understanding
among the Company, on the one hand, and the Administrative Agent and
the Banks, on the other, and supersedes all prior or contemporaneous
agreements and understandings of such Persons, verbal or written,
relating to the subject matter hereof and thereof, except for any
prior arrangements made with respect to the payment by the Company of
(or any indemnification for) any fees, costs or expenses payable to or
incurred (or to be incurred) by or on behalf of the Administrative
Agent or any of the Banks.
10.17 Interpretation. This Agreement is the result of
negotiations between, and has been reviewed by counsel to, the Company
and the Administrative Agent, and is the product of all parties
hereto. Accordingly, this Agreement and the other Loan Documents
shall not be construed against the Administrative Agent or the Banks
merely because of their involvement in the preparation of such
documents and agreements.
10.18 Existing Approved Unencumbered Parcels. The
Administrative Agent and each Bank acknowledges that, as of the date
of this Agreement, each of the Parcels identified on Exhibit E is an
Approved Unencumbered Parcel having the Current Value and the Mortgage
Value set forth therein.
IN WITNESS WHEREOF, the parties hereto have caused this
Agreement to be duly executed and delivered by their proper and duly
authorized officers as of the day and year first above written.
"Company"
BEDFORD PROPERTY INVESTORS, INC.,
a Maryland corporation
By ___/s/Xxxxx X. Bedford___________
Xxxxx X. Xxxxxxx
Chief Executive Officer
Notice Address:
000 Xxxxxxxxx Xxxxxx
Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxx X. Xxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
"Administrative Agent"
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION, as Administrative
Agent
By /s/Xxxxxx Xxxxxx Jr.
Xxxxxx Xxxxxx Jr., Vice President
[Printed Name and Title]
Notice Address:
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
"Banks"
BANK OF AMERICA NATIONAL TRUST
AND SAVINGS ASSOCIATION
By /s/Xxxxxx Xxxxxx Jr.
Xxxxxx Xxxxxx, Jr., Vice President
[Printed Name and Title]
Commitment: $12,500,000.00
Lending Office/Notice Address:
00 Xxxxxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxx Xxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
SANWA BANK CALIFORNIA,
a California corporation
By /s/Xxxxxx XxXxxxxx
Xxxxxx XxXxxxxx
Vice President
Commitment: $4,166,667.00
Lending Office/Notice Address:
0000 XxxXxxxxx Xxxxxxxxx
Xxxxxxx Xxxxx, XX 00000
Attention: Xxxxxxx XxXxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
THE FIRST NATIONAL BANK
OF CHICAGO
By /s/Xxxxxxx X. Xxxxxx
Xxxxxxx X. Xxxxxx
Corporate Banking Officer
Commitment: $2,500,000.00
Lending Office/Notice Address:
Xxx Xxxxx Xxxxxxxx Xxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxx 00000
Attention: Xxxxxxx XxXxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
UNION BANK OF CALIFORNIA, N.A.
By /s/ D. Xxx Xxxxxxx
D. Xxx Xxxxxxx, Vice President and Manager
[Printed Name and Title]
Lending Office/Notice Address:
Commitment: $3,333,333.00
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, Xxxxxxxxxx 00000
Attention: Xxxxxxx Xxxxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
KEYBANK NATIONAL ASSOCIATION
By /s/Xxxxx X. Xxxxxxxxx
Xxxxx X. Xxxxxxxxx, Assistant Vice President
[Printed Name and Title]
Commitment: $2,500,000.00
Lending Office/Notice Address:
000 Xxxxxx Xxxxxx, 0xx Xxxxx
Xxxxxxxxx, XX 00000-0000
Attention: Xxxxx X. Xxxxxxxxx
Telephone No.: (000) 000-0000
Telecopier No.: (000) 000-0000
UNSECURED CREDIT AGREEMENT
Among
BEDFORD PROPERTY INVESTORS, INC.,
THE BANKS PARTY HERETO
and
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION,
as Arranger and as Administrative Agent for the Banks
Dated as of June 13, 1997
TABLE OF CONTENTS
Page
1. Definitions. . . . . . . . . . . . . . . . . . . . . . .1
1.1 Defined Terms. . . . . . . . . . . . . . . . . . .1
1.2 Other Interpretive Provisions. . . . . . . . . . 18
2. The Credit . . . . . . . . . . . . . . . . . . . . . . 19
2.1 Amount and Terms of Commitment . . . . . . . . . 19
2.2 Swing Line . . . . . . . . . . . . . . . . . . . 20
2.3 Loan Accounts. . . . . . . . . . . . . . . . . . 22
2.4 Procedure for Obtaining Credit . . . . . . . . . 22
2.5 Conversion and Continuation Elections. . . . . . 23
2.6 Voluntary Termination or Reduction of Commitment 24
2.7 Principal Payments . . . . . . . . . . . . . . . 25
2.8 Interest . . . . . . . . . . . . . . . . . . . . 26
2.9 Computation of Interest. . . . . . . . . . . . . 26
2.10 Payments by the Company. . . . . . . . . . . . . 27
2.11 Payments by the Banks to the Administrative Agent27
2.12 Sharing of Payments, Etc . . . . . . . . . . . . 28
3. Taxes, Yield Protection and Illegality . . . . . . . . 29
3.1 Taxes. . . . . . . . . . . . . . . . . . . . . . 29
3.2 Illegality . . . . . . . . . . . . . . . . . . . 29
3.3 Increased Costs and Reduction of Return. . . . . 30
3.4 Funding Losses . . . . . . . . . . . . . . . . . 31
3.5 Inability to Determine Rates . . . . . . . . . . 32
3.6 Certificate of Bank. . . . . . . . . . . . . . . 32
3.7 Survival . . . . . . . . . . . . . . . . . . . . 32
4. Conditions Precedent . . . . . . . . . . . . . . . . . 32
4.1 Conditions to Approving Parcels. . . . . . . . . 32
4.2 Conditions of Initial Loan . . . . . . . . . . . 33
4.3 Conditions to All Borrowings . . . . . . . . . . 35
5. Representations and Warranties . . . . . . . . . . . . 35
5.1 Existence and Power. . . . . . . . . . . . . . . 35
5.2 Corporate Authorization; No Contravention. . . . 36
5.3 Governmental Authorization . . . . . . . . . . . 36
5.4 Binding Effect . . . . . . . . . . . . . . . . . 36
5.5 Litigation . . . . . . . . . . . . . . . . . . . 37
5.6 No Default . . . . . . . . . . . . . . . . . . . 37
5.7 ERISA Compliance . . . . . . . . . . . . . . . . 37
5.8 Use of Proceeds; Margin Regulations. . . . . . . 37
5.9 Title to Properties. . . . . . . . . . . . . . . 37
5.10 Taxes. . . . . . . . . . . . . . . . . . . . . . 38
5.11 Financial Condition. . . . . . . . . . . . . . . 38
5.12 Environmental Matters. . . . . . . . . . . . . . 38
5.13 Regulated Entities . . . . . . . . . . . . . . . 39
5.14 No Burdensome Restrictions . . . . . . . . . . . 39
5.15 Solvency . . . . . . . . . . . . . . . . . . . . 40
5.16 Subsidiaries . . . . . . . . . . . . . . . . . . 40
5.17 Brokers; Transaction Fees. . . . . . . . . . . . 40
5.18 Insurance. . . . . . . . . . . . . . . . . . . . 40
5.19 Full Disclosure. . . . . . . . . . . . . . . . . 40
6. Affirmative Covenants. . . . . . . . . . . . . . . . . 40
6.1 Financial Statements . . . . . . . . . . . . . . 40
6.2 Certificates; Other Information. . . . . . . . . 41
6.3 Notices. . . . . . . . . . . . . . . . . . . . . 42
6.4 Preservation of Corporate Existence, Etc . . . . 44
6.5 Maintenance of Property. . . . . . . . . . . . . 44
6.6 Insurance. . . . . . . . . . . . . . . . . . . . 45
6.7 Payment of Obligations . . . . . . . . . . . . . 45
6.8 Compliance with Laws . . . . . . . . . . . . . . 46
6.9 Inspection of Property and Books and Records . . 46
6.10 Environmental Laws . . . . . . . . . . . . . . . 46
6.11 Use of Proceeds. . . . . . . . . . . . . . . . . 47
6.12 Solvency . . . . . . . . . . . . . . . . . . . . 47
6.13 Further Assurances . . . . . . . . . . . . . . . 47
7. Negative Covenants . . . . . . . . . . . . . . . . . . 47
7.1 Limitation on Liens. . . . . . . . . . . . . . . 47
7.2 Consolidations and Mergers . . . . . . . . . . . 48
7.3 Loans and Investments. . . . . . . . . . . . . . 48
7.4 Limitation on Indebtedness . . . . . . . . . . . 49
7.5 Transactions with Affiliates . . . . . . . . . . 49
7.6 Use of Proceeds. . . . . . . . . . . . . . . . . 49
7.7 Contingent Obligations . . . . . . . . . . . . . 49
7.8 Creation of Subsidiaries . . . . . . . . . . . . 49
7.9 Compliance with ERISA. . . . . . . . . . . . . . 50
7.10 Debt to Tangible Net Worth Ratio . . . . . . . . 50
7.11 Debt Service Coverage Ratio. . . . . . . . . . . 50
7.12 Change in Business . . . . . . . . . . . . . . . 50
7.13 Accounting Changes . . . . . . . . . . . . . . . 51
7.14 Limitation on Dividends. . . . . . . . . . . . . 51
7.15 Development Activity . . . . . . . . . . . . . . 51
7.16 Undeveloped Land . . . . . . . . . . . . . . . . 51
7.17 Tangible Net Worth . . . . . . . . . . . . . . . 52
8. Events of Default and Remedies . . . . . . . . . . . . 52
8.1 Event of Default . . . . . . . . . . . . . . . . 52
8.2 Remedies . . . . . . . . . . . . . . . . . . . . 54
8.3 Rights Not Exclusive . . . . . . . . . . . . . . 55
8.4 Specified Swap Contract Remedies . . . . . . . . 55
8.5 Subordination of Swap Obligations. . . . . . . . 56
9. The Administrative Agent . . . . . . . . . . . . . . . 57
9.1 Appointment and Authorization of the Administrative Agent57
9.2 The Administrative Agent's Powers. . . . . . . . 57
9.3 Limitation on the Administrative Agent's Duties. 58
9.4 Acknowledgment of Co-Lender Agreement. . . . . . 58
9.5 Successor Administrative Agent . . . . . . . . . 58
10. Miscellaneous. . . . . . . . . . . . . . . . . . . . . 59
10.1 Amendments and Waivers . . . . . . . . . . . . . 59
10.2 Notices. . . . . . . . . . . . . . . . . . . . . 59
10.3 No Waiver; Cumulative Remedies . . . . . . . . . 60
10.4 Costs and Expenses . . . . . . . . . . . . . . . 60
10.5 Indemnity. . . . . . . . . . . . . . . . . . . . 61
10.6 Marshaling; Payments Set Aside . . . . . . . . . 62
10.7 Successors and Assigns . . . . . . . . . . . . . 62
10.8 Assignments, Participations, Confidentiality . . 62
10.9 Counterparts . . . . . . . . . . . . . . . . . . 64
10.10 Severability . . . . . . . . . . . . . . . . . . 64
10.11 No Third Parties Benefited . . . . . . . . . . . 65
10.12 Time . . . . . . . . . . . . . . . . . . . . . . 65
10.13 Governing Law. . . . . . . . . . . . . . . . . . 65
10.14 Arbitration; Reference . . . . . . . . . . . . . 65
10.15 Notice of Claims; Claims Bar . . . . . . . . . . 66
10.16 Entire Agreement . . . . . . . . . . . . . . . . 66
10.17 Interpretation . . . . . . . . . . . . . . . . . 67
10.18 Existing Approved Unencumbered Parcels . . . . . 67
Exhibit A - Form of Borrowing Notice
Exhibit B - Form of Conversion/Continuation Notice
Exhibit C - Form of Revolving Note
Exhibit D - Form of Opinion of Counsel
Exhibit E - List of Approved Unencumbered Parcels
Exhibit F - Form of Assignment and Assumption Agreement
