1
===============================================================================
CREDIT AGREEMENT
AMONG
XXXXXXX PROPERTIES, L.P.,
A CALIFORNIA LIMITED PARTNERSHIP,
AS BORROWER,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
DOING BUSINESS AS SEAFIRST BANK,
UNION BANK OF CALIFORNIA, N.A.,
U.S. BANK NATIONAL ASSOCIATION,
FKA FIRST BANK NATIONAL ASSOCIATION,
COMMERZBANK AKTIENGESELLSCHAFT, LOS ANGELES BRANCH,
BANKERS TRUST COMPANY,
THE FIRST NATIONAL BANK OF CHICAGO, AND
UNION BANK OF SWITZERLAND (NEW YORK BRANCH)
TOGETHER WITH THOSE ASSIGNEES
AND DESIGNATED BID LENDERS
BECOMING PARTIES HERETO PURSUANT
TO SECTION 11.12, AS LENDERS
OR DESIGNATED BID LENDERS,
AND
XXXXX FARGO BANK, NATIONAL ASSOCIATION,
AS AGENT
AND
XXXXXX GUARANTY TRUST COMPANY OF NEW YORK,
AS DOCUMENTATION AGENT
DATED AS OF AUGUST 8, 1997
===============================================================================
2
CREDIT AGREEMENT
THIS CREDIT AGREEMENT is dated as of August 8, 1997 (as
amended, supplemented or modified from time to time, the "Agreement") and is
among XXXXXXX PROPERTIES, L.P., a California limited partnership ("Borrower"),
each of the Lenders and Designated Bid Lenders, as hereinafter defined, XXXXX
FARGO BANK, NATIONAL ASSOCIATION ("Xxxxx Fargo"), in its capacity as agent and
as a Lender, and XXXXXX GUARANTY TRUST COMPANY OF NEW YORK ("Xxxxxx Guaranty"),
in its capacity as documentation agent and as a Lender.
RECITALS
A. Pursuant to that certain Credit Agreement dated as of
November 6, 1995, among Borrower, as borrower, Xxxxx Fargo and each of the
other lenders named therein, as lenders (the "Original Lenders"), Xxxxx Fargo,
as Agent, and The First National Bank of Boston, as Co-Agent, as amended by
Amendment No. 1 to Credit Agreement dated as of July 24, 1996 (as amended, the
"Original Credit Agreement"), the Original Lenders agreed to provide Borrower
with an unsecured revolving loan facility on the terms and conditions set forth
therein (the "Existing Facility").
B. Borrower has requested that Lenders extend both (i)
an unsecured revolving loan facility and (ii) a bid loan facility to Borrower,
the proceeds of which will be used in accordance with the provisions of this
Agreement (including that the proceeds of the initial Loan hereunder be
applied, as necessary, to the payment of all accrued and unpaid obligations of
Borrower under the Existing Facility), and Lenders are willing to extend the
requested facilities on the terms and conditions set forth herein.
NOW, THEREFORE, the parties hereto agree as follows:
ARTICLE I
DEFINITIONS
1.1 CERTAIN DEFINED TERMS. The following terms used in this
Agreement shall have the following meanings (such meanings to be applicable,
except to the extent otherwise indicated in a definition of a particular term,
both to the singular and the plural forms of the terms defined):
"Absolute Rate" means, in connection with any Absolute Rate
Auction, the rate of interest per annum (expressed in multiples of 1/1000th of
one percent) offered for any Bid Loan to be made pursuant thereto.
2
3
"Absolute Rate Auction" means a solicitation of Competitive
Bids setting forth Absolute Rates pursuant to Section 2.1.3.
"Absolute Rate Bid Loan" means a Bid Loan that bears interest
at an Absolute Rate.
"Accommodation Obligations", as applied to any Person, means
(i) any Indebtedness of another Person in respect of which that Person is
liable, including, without limitation, any such Indebtedness directly or
indirectly guaranteed, endorsed (otherwise than for collection or deposit in
the ordinary course of business), co-made or discounted or sold with recourse
by that Person, or in respect of which that Person is otherwise directly or
indirectly liable, including in respect of any Partnership in which that Person
is a general partner; or (ii) Contractual Obligations (contingent or otherwise)
arising through any agreement to purchase, repurchase or otherwise acquire such
Indebtedness or any security therefor, or to provide funds for the payment or
discharge thereof (whether in the form of loans, advances, stock purchases,
capital contributions or otherwise), or to maintain solvency, assets, level of
income, or other financial condition, or to make payment other than for value
received.
"Accountants" means Xxxxxx Xxxxxxxx & Co., any other "big six"
accounting firm or another firm of certified public accountants of national
standing selected by Borrower and acceptable to Agent.
"Acquisition Price" means the aggregate purchase price for an
asset including bona fide purchase money financing provided by the seller and
all (or Borrower's Share of, as applicable) existing Indebtedness pertaining to
such asset.
"Adjusted Percentage Interest" has the meaning given to it in
the definition of "Individual UPP Value."
"Affiliates" as applied to any Person, means any other Person
directly or indirectly controlling, controlled by, or under common control
with, that Person. For purposes of this definition, "control" (including, with
correlative meanings, the terms "controlling", "controlled by" and "under
common control with"), as applied to any Person, means (i) the possession,
directly or indirectly, of the power to vote ten percent (10%) or more of the
Securities having voting power for the election of directors of such Person or
otherwise to direct or cause the direction of the management and policies of
that Person, whether through the ownership of voting Securities or by contract
or otherwise, or (ii) the ownership of a general partnership interest or
managing member's interest in such Person or of a limited partnership interest
(or other ownership interest) representing ten percent (10%) or more of the
outstanding limited partnership interests or other ownership interests of such
Person.
3
4
"Agent" means Xxxxx Fargo in its capacity as agent for Lenders
under this Agreement, and shall include any successor Agent appointed pursuant
hereto and shall be deemed to refer to Xxxxx Fargo in its individual capacity
as a Lender where the context so requires.
"Aggregate Occupancy Rate" means, with respect to the
Unencumbered Pool Properties at any time, the ratio, as of such date, expressed
as a percentage, of (i) the net rentable square footage of all Unencumbered
Pool Properties occupied by tenants paying rent pursuant to binding leases as
to which no monetary default has occurred and is continuing, to (ii) the
aggregate net rentable square footage of all Unencumbered Pool Properties.
"Annual Operating Report" has the meaning given to such term
in Section 6.1.1.
"Applicable Base Rate Margin" means, as of any date of
determination: (i) 0.00%, if Borrower's senior long-term unsecured debt
obligations are rated at least BBB-/Baa3 by both Rating Agencies, or (ii)
0.25%, in any other case (including, without limitation, if Borrower's senior
long-term unsecured debt obligations are not rated by either or both of the
Rating Agencies). If one Rating Agency assigns a lower rating to Borrower's
senior long-term unsecured debt obligations than does the other Rating Agency,
the lower of the two ratings shall control for purposes of determining the
Applicable Base Rate Margin.
"Applicable Facility Fee Percentage" means, as of any date of
determination: (i) 0.15%, if Borrower's senior long-term unsecured debt
obligations were rated at least A-/A3 by both Rating Agencies as of the last
day of the immediately preceding Fiscal Quarter, (ii) 0.20%, if Borrower's
senior long-term unsecured debt obligations were rated at least BBB/Baa2 by
both Rating Agencies as of the last day of the immediately preceding Fiscal
Quarter but the condition set forth in clause (i) of this definition is not
satisfied, (iii) 0.25%, if Borrower's senior long-term unsecured debt
obligations were rated at least BBB-/Baa3 by both Rating Agencies as of the
last day of the immediately preceding Fiscal Quarter but neither the condition
set forth in clause (i) of this definition nor the condition set forth in
clause (ii) of this definition is satisfied, and (iv) 0.30%, in any other case
(including, without limitation, if Borrower's senior long-term unsecured debt
obligations were not rated by either or both of the Rating Agencies as of the
last day of the immediately preceding Fiscal Quarter. If one Rating Agency
assigns a lower rating to Borrower's senior long-term unsecured debt
obligations than does the other Rating Agency, the lower of the two ratings
shall control for purposes of determining the Applicable Facility Fee
Percentage.
"Applicable LIBOR Rate Margin" means, as of any date of
determination: (i) 0.65%, if Borrower's senior long-term unsecured debt
obligations are rated at least A-/A3
4
5
by both Rating Agencies, (ii) 0.70%, if Borrower's senior long-term unsecured
debt obligations are rated at least BBB+/Baa1 by both Rating Agencies but the
condition set forth in clause (i) of this definition is not satisfied, (iii)
0.80%, if Borrower's senior long-term unsecured debt obligations are rated at
least BBB/Baa2 by both Rating Agencies but neither the condition set forth in
clause (i) of this definition nor the condition set forth in clause (ii) of
this definition is satisfied, (iv) 0.95%, if Borrower's senior long-term
unsecured debt obligations are rated at least BBB-/Baa3 by both Rating Agencies
but neither the condition set forth in clause (i) of this definition, nor the
condition set forth in clause (ii) of this definition, nor the condition set
forth in clause (iii) of this definition is satisfied, or (v) 1.50%, in any
other case (including, without limitation, if Borrower's senior long-term
unsecured debt obligations are not rated by either or both of the Rating
Agencies). If one Rating Agency assigns a lower rating to Borrower's senior
long-term unsecured debt obligations than does the other Rating Agency, the
lower of the two ratings shall control for purposes of determining the
Applicable LIBOR Rate Margin.
"Approved Market" has the meaning ascribed to such term in
Section 3.1.2(a).
"Approved Property Type" has the meaning ascribed to such term
in Section 3.1.2(a).
"Assignment and Assumption" means an Assignment and
Assumption, substantially in the form of Exhibit A (with blanks appropriately
filled in), delivered to Agent in connection with each assignment of a Lender's
interest under this Agreement pursuant to Section 11.12.
"Base Rate" means, on any day, the higher of (i) the base rate
of interest per annum established from time to time by Xxxxx Fargo at its
principal office in San Francisco, California, and designated as its "prime
rate" as in effect on such day, and (ii) the Federal Funds Rate in effect on
such day plus one-half percent (0.5%) per annum.
"Base Rate Loans" means those Committed Loans bearing interest
at a rate determined with reference to the Base Rate.
"Benefit Plan" means, with respect to any Person, any employee
pension benefit plan as defined in Section 3(2) of ERISA (other than a
Multiemployer Plan) in respect of which such Person or an ERISA Affiliate of
such Person is, or within the immediately preceding six (6) years was, an
"employer" as defined in Section 3(5) of ERISA.
"Bid Loan" means a Loan by a Lender or its Designated Bid
Lender pursuant to the Bid Loan Facility, and may be either an Absolute Rate
Bid Loan or a LIBOR Bid Loan.
5
6
"Bid Loan Facility" means the credit facility for the
requesting and making of Bid Loans described in Section 2.1.1(b).
"Bid Loan Interest Period" means, with respect to any Bid
Loan, the period, commencing on the date of such Bid Loan and ending on a date
that is thirty (30), sixty (60) or ninety (90) days later, but not extending
beyond the Termination Date, as specified by Borrower in the relevant
Competitive Bid Request; provided however, that:
(a) if such Bid Loan Interest Period would otherwise end
on a day which is not a Business Day, such Bid Loan Interest Period
shall end on the next following Business Day; and
(b) no Bid Loan Interest Period may be selected that
would extend beyond the next succeeding Committed Facility Reduction
Date if the aggregate principal amount of the Bid Loans subject
thereto, when aggregated with the aggregate principal amount of all
other then outstanding Loans subject to Interest Periods that end
after such Committed Facility Reduction Date, would exceed the amount
of the Committed Facility, as reduced thereon.
"Bid Loan Limit" means One Hundred Fifty Million Dollars
($150,000,000).
"Borrower Debt" means (without duplication) all Indebtedness
of Borrower or any Subsidiary of Borrower (without offset or reduction in
respect of prepaid interest, restructuring fees or similar items) minus, in the
case of Nonrecourse Indebtedness of an Investment Partnership that is otherwise
included in Indebtedness of Borrower, the amount of such Indebtedness in excess
of Borrower's Share thereof.
"Borrower's Percentage Interest" means, in the case of any UPP
Subpartnership, the aggregate percentage of all outstanding equity interests in
such Person held by Borrower or another Person wholly-owned (directly or
indirectly) by the REIT or by Borrower.
"Borrower's Share" means, in the case of an Investment
Partnership, Borrower's percentage ownership interest in such Investment
Partnership.
"Borrowing" means a borrowing under the Committed Facility
(including a Swing Line Borrowing) or the Bid Loan Facility of Loans of the
same type (i.e., Committed Loans, Absolute Rate Bid Loans, or LIBOR Bid Loans)
made to Borrower on the same day and (except in the case of Base Rate Loans)
having the same Interest Period.
"Business Day" means (i) with respect to any Borrowing,
payment or rate determination of LIBOR Loans or LIBOR Bid Loans, a day, other
than a Saturday or Sunday, on which Agent is open for business in San Francisco
and on which dealings in
6
7
Dollars are carried on in the London interbank market, and (ii) for all other
purposes any day excluding Saturday, Sunday and any day which is a legal
holiday under the laws of the State of California, or is a day on which banking
institutions located in California are required or authorized by law or other
governmental action to close.
"Capital Expenditures" means, for any period, the product of
(i) $0.43 (prorated if the relevant period is shorter or longer than one year)
times (ii) the sum of (A) total net rentable square footage of properties then
owned or leased by Borrower or a Subsidiary of Borrower, plus (B) Borrower's
Share of net rentable square footage owned or leased by any Investment
Partnership.
"Capital Leases", as applied to any Person, means any lease of
any property (whether real, personal or mixed) by that Person as lessee which,
in conformity with GAAP, is or should be accounted for as a capital lease on
the balance sheet of that Person.
"Cash Equivalents" means (i) marketable direct obligations
issued or unconditionally guaranteed by the United States Government or issued
by an agency thereof and backed by the full faith and credit of the United
States, in each case maturing within one (1) year after the date of acquisition
thereof; (ii) marketable direct obligations issued by any state of the United
States of America or any political subdivision of any such state or any public
instrumentality thereof maturing within ninety (90) days after the date of
acquisition thereof and, at the time of acquisition, having one of the two
highest ratings obtainable from any two of Standard & Poor's Ratings Services,
Xxxxx'x Investors Service, Duff & Xxxxxx Credit Rating Co., or Fitch Investors
Service, L.P. (or, if at any time no two of the foregoing shall be rating such
obligations, then from such other nationally recognized rating services as may
be acceptable to Agent) and not listed for possible down-grade in Credit Watch
published by Standard & Poor's Ratings Services; (iii) commercial paper, other
than commercial paper issued by Borrower or any of its Affiliates, maturing no
more than ninety (90) days after the date of creation thereof and, at the time
of acquisition, having a rating of at least A-1 or P-1 from either Standard &
Poor's Ratings Services or Xxxxx'x Investors Service (or, if at any time
neither Standard & Poor's Ratings Services nor Xxxxx'x Investors Service shall
be rating such obligations, then the highest rating from such other nationally
recognized rating services as may be acceptable to Agent); and (iv) domestic
and Eurodollar certificates of deposit or time deposits or bankers' acceptances
maturing within ninety (90) days after the date of acquisition thereof,
overnight securities repurchase agreements, or reverse repurchase agreements
secured by any of the foregoing types of securities or debt instruments issued,
in each case, by (A) any commercial bank organized under the laws of the United
States of America or any state thereof or the District of Columbia or Canada
having combined capital and surplus of not less than Two Hundred Fifty Million
Dollars ($250,000,000) or (B) any Lender.
7
8
"Change in Control" means (i) any transaction or series of
related transactions in which any Person or two or more Persons acting in
concert acquire beneficial ownership, directly or indirectly, of securities of
the REIT (or of other securities convertible into securities of the REIT)
representing forty percent (40%) or more of the combined voting power of all
securities of the REIT entitled to vote in the election of directors; or (ii)
(a) during any period of up to twelve (12) consecutive months commencing on or
after the Closing Date individuals who were directors of the REIT at the
beginning of such period shall cease for any reason to constitute a majority of
the Board of Directors, and (b) the individuals replacing such directors shall
not have been nominated by the Board of Directors of the REIT.
"Closing Date" means the date on which this Agreement shall
become effective in accordance with Section 12.16.
"Commission" means the Securities and Exchange Commission.
"Committed Facility" means the revolving loan facility,
described in Section 2.1.1(a), in the amount of:
(a) from and including the Closing Date to but not
including the date that is thirty-nine (39) months after the Closing
Date: Two Hundred Fifty Million Dollars ($250,000,000);
(b) from and including the date that is thirty-nine (39)
months after the Closing Date to but not including the date that is
forty-two months after the Closing Date: Two Hundred Twenty-Five
Million Dollars ($225,000,000);
(c) from and including the date that is forty-two (42)
months after the Closing Date to but not including the date that is
forty-five months after the Closing Date: Two Hundred Million Dollars
($200,000,000);
(d) from and including the date that is forty-five (45)
months after the Closing Date to but not including the date that is
forty-eight months after the Closing Date: One Hundred Seventy-Five
Million Dollars ($175,000,000); and
(e) on and after the date that is forty-eight (48) months
after the Closing Date: Zero ($0.00).
"Committed Facility Reduction Date" means each date specified
in the definition of "Committed Facility" as a date on which a reduction in the
amount of the Committed Facility becomes effective.
8
9
"Committed Loan" means a Loan (including Loans made under the
Swing Line) made by Lenders pursuant to the Committed Facility; provided that
(i) if any such Loan or Loans (or portions thereof) is/are combined or
subdivided pursuant to Section 2.1.2(b) or by automatic conversion of a LIBOR
Loan to a Base Rate Loan, the term "Committed Loan" means such combination or
each such subdivided portion, as the case may be, and (ii) where the context so
requires, the term "Committed Loan" means, with respect to a particular Lender,
the advance made (or required to be made) by such Lender in the amount of such
Lender's Pro Rata Share of a Borrowing under the Committed Facility.
"Committed Loan Availability" means, at any time, the Loan
Availability less the aggregate principal amount of all Bid Loans then
outstanding.
"Commitment" means, with respect to any Lender, such Lender's
Pro Rata Share of the Committed Facility, which amount shall not exceed the
principal amount set out under such Lender's name under the heading "Revolving
Loan Commitment" on the signature pages attached to this Agreement or as set
forth on an Assignment and Assumption executed by such Lender, as assignee, as
reduced, on each Committed Facility Reduction Date, by such Lender's Pro Rata
Share of the reduction in the Committed Facility taking effect thereon.
"Competitive Bid" means an offer by a Lender to make a Bid
Loan in response to a Competitive Bid Request.
"Competitive Bid Request" means a notice, in substantially the
form of Exhibit H, requesting that Lenders submit bids for a Bid Loan.
"Compliance Certificate" means a certificate, in the form of
Exhibit D, delivered to Agent by Borrower pursuant to Section 6.1.4 or any
other provision of this Agreement and covering Borrower's compliance with the
covenant contained in Section 8.5 and the financial covenants contained in
Article IX.
"Confidential Information" has the meaning ascribed to such
term in Section 6.3.
"Contaminant" means any pollutant (as that term is defined in
42 U.S.C. 9601(33)) or toxic pollutant (as that term is defined in 33 U.S.C.
1362(13)), hazardous substance (as that term is defined in 42 U.S.C. 9601(14)),
hazardous chemical (as that term is defined by 29 CFR Section 1910.1200(c)),
toxic substance, hazardous waste (as that term is defined in 42 U.S.C.
6903(5)), radioactive material, special waste, petroleum (including crude oil
or any petroleum-derived substance, waste, or breakdown or decomposition
product thereof), any constituent of any such substance or waste, including,
but not limited to, polychlorinated biphenyls and asbestos, or any other
substance or waste deleterious to
9
10
the environment the release, disposal or remediation of which is now or at any
time becomes subject to regulation under any Environmental Law.
"Contractual Obligation", as applied to any Person, means any
provision of any Securities issued by that Person or any indenture, mortgage,
deed of trust, lease, contract, undertaking, document or instrument to which
that Person is a party or by which it or any of its properties is bound, or to
which it or any of its properties is subject (including, without limitation,
any restrictive covenant affecting such Person or any of its properties).
"Court Order" means any judgment, writ, injunction, decree,
rule or regulation of any court or Governmental Authority binding upon or
applicable to the Person in question.
"Debt Service" means, for any period, Interest Expense for
such period plus scheduled principal amortization (i.e., excluding any balloon
payment due at maturity) for such period on all Borrower Debt.
"December 31, 1996 Financials" has the meaning given to such
term in Section 5.1.7.
"Defaulting Lender" means any Lender or Designated Bid Lender
which fails or refuses to perform its obligations under this Agreement within
the time period specified for performance of such obligation or, if no time
frame is specified, if such failure or refusal continues for a period of five
(5) Business Days after notice from Agent.
"Designated Bid Lender" means a special purpose corporation,
organized under the laws of the United States or any subdivision thereof, that
is engaged in making, purchasing or otherwise investing in commercial loans in
the ordinary course of its business and that (i) shall have become a party to
this Agreement pursuant to Section 11.12.3, and (ii) is not otherwise a Lender.
References herein to a Lender's Designated Bid Lender or a Designating Lender's
Designated Bid Lender mean the Designated Bid Lender party to a Designation
Agreement with such Lender or Designating Lender.
"Designating Lender" means a Lender that has entered into a
Designation Agreement with a Designated Bid Lender pursuant to Section 11.12.3.
"Designation Agreement" means a designation agreement, in
substantially the form of Exhibit K, entered into by a Lender and a Designated
Bid Lender and accepted by the Borrower and the Agent.
"Documentation Agent" means Xxxxxx Guaranty in its capacity as
documentation agent for Lenders under this Agreement, and shall be deemed to
refer to Xxxxxx Guaranty in its individual capacity as a Lender where the
context so requires.
10
11
"DOL" means the United States Department of Labor and any
successor department or agency.
"Dollars" and "$" means the lawful money of the United States
of America.
"EBIDA" means, at any time, for the most recent three (3)
month period, (i) (A) the sum of the amounts for such period of (1) Net Income,
(2) depreciation and amortization expense and other non-cash items deducted on
the Financial Statements in determining such Net Income, (3) Borrower's Share
of depreciation and amortization expense and other non-cash items deducted on
the financial statements of any Investment Partnership in determining the net
income thereof, and (4) Interest Expense, minus (B) the sum for such period of
(1) the net income of any Person in which Borrower has an investment interest
that is included in Net Income, except to the extent of the amount of cash
dividends or other cash distributions actually paid to Borrower or any
Subsidiary of Borrower by such Person during such period, and (2) the income of
any consolidated Subsidiary of Borrower, to the extent that the declaration or
payment of dividends or other distributions by that Subsidiary of such income
is not at the time permitted by operation of any Contractual Obligation or
Requirement of Law applicable to such Subsidiary; (ii) minus gains (and plus
losses) from extraordinary items or asset sales or write-ups or forgiveness of
Indebtedness.
"Eligible Assignee" means (i) (A) (1) a commercial bank
organized under the laws of the United States or any state thereof; (2) a
savings and loan association or savings bank organized under the laws of the
United States or any state thereof; or (3) a commercial bank organized under
the laws of any other country or a political subdivision thereof, provided that
(x) such bank is acting through a branch or agency located in the United
States, or (y) such bank is organized under the laws of a country that is a
member of the Organization for Economic Cooperation and Development or a
political subdivision of such country; that (B) in each case, is (1) reasonably
acceptable to Agent and Borrower, and (2) has (or its parent that guaranties
its obligations hereunder has) total assets in excess of $10,000,000,000 and a
rating on its (or its parent's) senior unsecured debt obligations of at least
BBB (or its equivalent) by one of the Rating Agencies, by Xxxxx'x Investor
Service, or by Duff & Xxxxxx Credit Rating Co.; or (ii) any Lender or Affiliate
of any Lender; provided, however, that (x) no Affiliate of Borrower shall be an
Eligible Assignee; and (y) Borrower shall have no right of approval or consent
at any time that an Event of Default has occurred and is continuing.
"Environmental Laws" has the meaning set forth in Section
5.1.20.
"Environmental Lien" means a Lien in favor of any Governmental
Authority for (i) any liability under Environmental Laws, or (ii) damages
arising from, or costs
11
12
incurred by such Governmental Authority in response to, a Release or threatened
Release of a Contaminant into the environment.
"ERISA" means the Employee Retirement Income Security Act of
1974, as amended from time to time, and any successor statute.
"ERISA Affiliate" of any Person means any (i) corporation
which is, becomes, or is deemed to be a member of the same controlled group of
corporations (within the meaning of Section 414(b) of the Internal Revenue
Code) as such Person, (ii) partnership, trade or business (whether or not
incorporated) which is, becomes or is deemed to be under common control (within
the meaning of Section 414(c) of the Internal Revenue Code) with such Person,
(iii) other Person which is, becomes or is deemed to be a member of the same
"affiliated service group" (as defined in Section 414(m) of the Internal
Revenue Code) as such Person, or (iv) any other organization or arrangement
described in Section 414(o) of the Internal Revenue Code which is, becomes or
is deemed to be required to be aggregated pursuant to regulations issued under
Section 414(o) of the Internal Revenue Code with such Person pursuant to
Section 414(o) of the Internal Revenue Code.
"Executive Officers" means Xxxxxx X. Xxxxxxx, Xx., Xxxx X.
Xxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx Xxxxxx.
"Event of Default" means any of the occurrences set forth in
Article X after the expiration of any applicable grace period expressly
provided therein.
"FDIC" means the Federal Deposit Insurance Corporation or any
successor thereto.
"Federal Funds Rate" means, for any period, a fluctuating
interest rate per annum equal for each day during such period to the weighted
average of the rates on overnight Federal Funds transactions with members of
the Federal Reserve System arranged by Federal Funds brokers, as published for
such day (or, if such day is not a Business Day, for the next preceding
Business Day) by the Federal Reserve Bank of New York, or, if such rate is not
so published for any day which is a Business Day, the average of the quotations
for such day on such transactions received by Agent from three Federal Funds
brokers of recognized standing selected by Agent.
"Federal Reserve Board" means the Board of Governors of the
Federal Reserve System or any governmental authority succeeding to its
functions.
"Financial Statements" has the meaning given to such term in
Section 6.1.2.
"Fiscal Quarter" means each three-month period ending on March
31, June 30, September 30 and December 31.
12
13
"Fiscal Year" means the fiscal year of Borrower which shall be
the twelve (12) month period ending on the last day of December in each year.
"Fixed Rate Notice" means, with respect to a LIBOR Loan
pursuant to Section 2.1.2, a notice substantially in the form of Exhibit G.
"Fixed Rate Price Adjustment" has the meaning given to such
term in Section 2.4.8(c).
"Funding Date" means, with respect to any Loan made on or
after the Closing Date, the date of the funding of such Loan.
"Funds from Operations" means, for any period, Net Income plus
the sum of depreciation, amortization and other non-cash items deducted on the
Financial Statements in determining such Net Income, minus gains (or plus
losses) on sales of real estate, Investments (excluding Cash Equivalents) or
other assets, or other extraordinary items.
"GAAP" means generally accepted accounting principles set
forth in the opinions and pronouncements of the Accounting Principles Board and
the American Institute of Certified Public Accountants and statements and
pronouncements of the Financial Accounting Standards Board, or in such other
statements by such other entity as may be in general use by significant
segments of the accounting profession, which are applicable to the
circumstances as of the date of determination.
"Governmental Authority" means any nation or government, any
federal, state, local, municipal or other political subdivision thereof or any
entity exercising executive, legislative, judicial, regulatory or
administrative functions of or pertaining to government.
"Gross Asset Value" means, as at any date of determination,
the sum (without duplication of any item) of (i) cash and Cash Equivalents
owned by Borrower or any Subsidiary of Borrower as of such date (but excluding
any tenant deposits), and (ii) an amount equal to (A) (1) EBIDA for the most
recently ended Fiscal Quarter (as reasonably adjusted by Borrower, with Agent's
approval, to take into account any acquisitions or dispositions of Properties
by Borrower or any of its Subsidiaries during such Fiscal Quarter), less (2)
that portion of Net Income for such Fiscal Quarter attributable to cash or Cash
Equivalents, times (B) four (4), divided by (C) 0.10; provided that, with
respect to any Property owned by a Subsidiary in which Borrower owns less than
one hundred percent (100%) of the outstanding equity interests, there shall be
included, for purposes of the foregoing calculation, only that portion of the
EBIDA attributable to such Property for such period that corresponds to
Borrower's percentage interest in the equity of such Subsidiary (determined in
a manner consistent with the manner in which Borrower's "Adjusted Percentage
Interest" is determined with respect to UPP Subpartnerships).
13
14
"Guarantor Subpartnership" means SP #177 or any other
Partnership between (i) Borrower and SWIP or (ii) (A) Borrower or such other
Person or Persons, in each case, wholly-owned by the REIT, by Borrower, by the
REIT and Borrower, or by Borrower and one or more other Guarantor
Subpartnerships, as the Majority Lenders may approve (such approval not to be
unreasonably withheld), and (B) one or more Third Party Partners (provided that
the Borrower's Percentage Interest of each Guarantor Subpartnership shall at
all times equal at least ninety percent (90%)), in a form (1) including
partnership interest allocations, substantially identical to one or more of the
Guarantor Subpartnerships party to Guaranties as of the date of this Agreement
and approved by Agent (such approval not to be unreasonably withheld), or (2)
otherwise approved by the Majority Lenders (such approval not to be
unreasonably withheld); in any such case, which (x) owns one or more
Unencumbered Pool Properties, and (y) has executed and delivered a Guaranty.
"Guaranty" means each guaranty of payment and performance
executed by the REIT or a Guarantor Subpartnership in favor of Agent, Lenders
and Designated Bid Lenders.
"Indebtedness", as applied to any Person (and without
duplication), means (i) all indebtedness, obligations or other liabilities of
such Person for borrowed money, (ii) all indebtedness, obligations or other
liabilities of such Person evidenced by Securities or other similar
instruments, (iii) all reimbursement obligations and other liabilities of such
Person with respect to letters of credit or banker's acceptances issued for
such Person's account, (iv) all obligations of such Person to pay the deferred
purchase price of Property or services, (v) all obligations in respect of
Capital Leases of such Person, (vi) all Accommodation Obligations of such
Person, (vii) all indebtedness, obligations or other liabilities of such Person
or others secured by a Lien on any asset of such Person, whether or not such
indebtedness, obligations or liabilities are assumed by, or are a personal
liability of, such Person (including, without limitation, the principal amount
of any assessment or similar indebtedness encumbering any property), and (viii)
all indebtedness, obligations or other liabilities (other than interest expense
liability) in respect of Interest Rate Contracts and foreign currency exchange
agreements. Indebtedness shall not include accrued ordinary operating expenses
payable on a current basis.
"Individual UPP Value" means, with respect to any Unencumbered
Pool Property or proposed Unencumbered Pool Property, an amount equal to (A)
the aggregate Net Operating Income of such property (determined, in the case of
a proposed Unencumbered Pool Property, as if it were an Unencumbered Pool
Property) for the most recently ended Fiscal Quarter, times (B) four (4),
divided by (C) 0.10 (provided that, with respect to an Unencumbered Pool
Property owned by a UPP Subpartnership in which the Borrower's Percentage
Interest is less than 100%, there shall be included, for purposes of the
foregoing calculation only the Borrower's Percentage Interest in the Net
Operating Income of such Unencumbered Pool Property; provided that, if one or
more of the Third
14
15
Party Partners in such UPP Subpartnership are required, under the terms of the
Partnership Agreement of such UPP Subpartnership, to pay over to Borrower all
or any portion of any distributions to which such Third Party Partners
otherwise would be entitled in respect of any sale of such Unencumbered Pool
Property, then, for so long as Borrower's right to the payment of such
distributions is not interrupted, Borrower's Percentage Interest in such UPP
Subpartnership shall, for purposes of this calculation, be deemed to include
the entire percentage of the proceeds of any such sale to which Borrower would
be entitled (as so adjusted, Borrower's "Adjusted Percentage Interest").
"Interest Expense" means, for any period, total interest
expense, whether paid, accrued or capitalized (including the interest component
of Capital Leases but excluding capitalized interest in accordance with
accounting practices permitted under Section 8.1.3(c)) in respect of Borrower
Debt, including, without limitation, all commissions, discounts and other fees
and charges owed with respect to letters of credit, net costs under Interest
Rate Contracts, and Facility Fees payable to Lenders.
"Interest Period" means (i) any Bid Loan Interest Period, and
(ii) subject to Section 2.4.5(a), relative to any LIBOR Loans comprising part
of the same Borrowing, the period beginning on (and including) the date on
which such LIBOR Loans are made as, or converted into, LIBOR Loans, and ending
on (but excluding) the day which numerically corresponds to such date thirty
(30), sixty (60), ninety (90) or one hundred eighty (180) days thereafter, in
either case as Borrower may select in its relevant Notice of Borrowing pursuant
to Section 2.1.2; provided, however, that:
(a) if such Interest Period would otherwise end on a day
which is not a Business Day, such Interest Period shall end on the
next following Business Day;
(b) no Interest Period may end later than the Termination
Date; and
(c) no Interest Period may end later than the next
succeeding Committed Facility Reduction Date if the aggregate
principal amount of the Loans subject thereto, when aggregated with
the aggregate principal amount of all other then outstanding Loans
subject to Interest Periods that end after such Committed Facility
Reduction Date, would exceed the amount of the Committed Facility, as
reduced thereon.
"Interest Rate Contracts" means, collectively, interest rate
swap, collar, cap or similar agreements providing interest rate protection.
"Internal Revenue Code" means the Internal Revenue Code of
1986, as amended from time to time hereafter, and any successor statute.
15
16
"Investment" means, as applied to any Person, any direct or
indirect purchase or other acquisition by that Person of Securities, or of a
beneficial interest in Securities, of any other Person, and any direct or
indirect loan, advance (other than deposits with financial institutions
available for withdrawal on demand, prepaid expenses, advances to employees and
similar items made or incurred in the ordinary course of business), or capital
contribution by such Person to any other Person, including all Indebtedness and
accounts owed by that other Person which are not current assets or did not
arise from sales of goods or services to that Person in the ordinary course of
business.
"Investment Mortgages" mean mortgages securing indebtedness
directly or indirectly owned by Borrower or any Subsidiary of Borrower,
including certificates of interest in real estate mortgage investment conduits.
"Investment Partnership" means any Partnership in which
Borrower or any Subsidiary of Borrower has an ownership interest, whose
financial results are not consolidated under GAAP in the Financial Statements.
"IRS" means the Internal Revenue Service and any Person
succeeding to the functions thereof.
"Land" means unimproved real estate, including future phases
of a partially completed project, owned or leased by Borrower or any Subsidiary
of Borrower for the purpose of future development of improvements. For
purposes of the foregoing definition, "unimproved" shall mean Land on which the
construction of building improvements has not commenced or has been
discontinued for a continuous period longer than sixty (60) days prior to
completion.
"Lender Taxes" has the meaning given to such term in Section
2.4.7.
"Lenders" means Xxxxx Fargo and any other bank, finance
company, insurance or other financial institution which is or becomes a party
to this Agreement by execution of a counterpart signature page hereto or an
Assignment and Assumption, as assignee. At all times that there are no Lenders
other than Xxxxx Fargo, the terms "Lender" and "Lenders" means Xxxxx Fargo in
its individual capacity. With respect to matters requiring the consent or
approval of all Lenders at any given time, all then existing Defaulting Lenders
will be disregarded and excluded, and, for voting purposes only, "all Lenders"
shall be deemed to mean "all Lenders other than Defaulting Lenders".
Notwithstanding the foregoing, if a Defaulting Lender shall dispute Agent's
determination of the defaulted status of such Lender or Designated Bid Lender,
such Lender or Designated Bid Lender may give written notice to Agent and each
other Lender setting forth the basis upon which such Lender or Designated Bid
Lender disputes Agent's determination; under such circumstances, Lenders and
Designated Bid Lenders shall attempt in good faith to
16
17
resolve such dispute within the 90-day period following Agent's original
determination, and during such period the suspension of voting rights for such
Defaulting Lender referred to in the preceding sentence shall not apply;
however, if such dispute is not resolved within such 90-day period, then such
suspension of voting rights shall thereafter apply. The provisions of the
immediately preceding sentence shall not alter or condition any other provision
of this Agreement with respect to a failure on the part of any Lender to fund
its Pro Rata Share of any Committed Loan or of any Lender or Designated Bid
Lender to fund any Bid Loan pursuant to an offer accepted in whole or in part
as provided herein or otherwise to perform its obligations under the Loan
Documents, including, without limitations, the provisions of Section 11.4.
"Liabilities and Costs" means all claims, judgments,
liabilities, obligations, responsibilities, losses, damages (including lost
profits), punitive or treble damages, costs, disbursements and expenses
(including, without limitation, reasonable attorneys', experts' and consulting
fees and costs of investigation and feasibility studies), fines, penalties and
monetary sanctions, interest, direct or indirect, known or unknown, absolute or
contingent, past, present or future.
"LIBOR" means, relative to any Interest Period for any LIBOR
Loan or LIBOR Bid Loan included in any Borrowing, the per annum rate of
interest (reserve adjusted as hereinbelow provided and rounded upwards, if
necessary, to the nearest one-sixteenth of one percent (0.0625%)) quoted by
Agent as the rate at which Dollar deposits in immediately available funds are
available in the Eurodollar interbank market at approximately 9:00 a.m. (San
Francisco time) two (2) Business Days prior to the beginning of such Interest
Period, for delivery on the first day of such Interest Period for a period
approximately equal to such Interest Period and in an amount equal or
comparable to the LIBOR Loan or LIBOR Bid Loan to which such Interest Period
relates. The foregoing rate of interest shall be reserve adjusted by dividing
LIBOR by one (1.00) minus the LIBOR Reserve Percentage, with such quotient to
be rounded upward to the nearest whole multiple of one-hundredth of one percent
(0.01%). All references in this Agreement or other Loan Documents to LIBOR
shall mean and include the aforesaid reserve adjustment.
"LIBOR Auction" means a solicitation of Competitive Bids
setting forth LIBOR Bid Margins pursuant to Section 2.1.3.
"LIBOR Bid Loan" means a Bid Loan that bears interest, for the
relevant Bid Loan Interest Period, at a fixed rate equal to the relevant LIBOR
Bid Margin above (or below, as the case may be) LIBOR.
"LIBOR Bid Margin" means, in connection with any LIBOR
Auction, a margin (expressed in multiples of 1/1000th of one percent) above or
below LIBOR offered for any Bid Loan to be made pursuant thereto.
17
18
"LIBOR Loan" means a Committed Loan bearing interest, at all
times during an Interest Period applicable to such Committed Loan, at a fixed
rate of interest determined by reference to LIBOR.
"LIBOR Office" means, relative to any Lender or Designated Bid
Lender, the office of such Lender or Designated Bid Lender designated as such
on the counterpart signature pages hereto or such other office of a Lender as
designated from time to time by notice from such Lender or Designated Bid
Lender to Agent, whether or not outside the United States, which shall be
making or maintaining (i) in the case of a Lender, LIBOR Loans and LIBOR Bid
Loans of such Lender, or (ii) in the case of a Designated Bid Lender, LIBOR Bid
Loans of such Lender.
"LIBOR Reserve Percentage" means, relative to any Interest
Period for LIBOR Loans or LIBOR Bid Loans made by any Lender or Designated Bid
Lender, the reserve percentage (expressed as a decimal) equal to the actual
aggregate reserve requirements (including all basic, emergency, supplemental,
marginal and other reserves and taking into account any transactional
adjustments or other scheduled changes in reserve requirements) announced
within Agent as the reserve percentage applicable to Agent as specified under
regulations issued from time to time by the Federal Reserve Board. The LIBOR
Reserve Percentage shall be based on Regulation D of the Federal Reserve Board
or other regulations from time to time in effect concerning reserves for
"Eurocurrency Liabilities" from related institutions as though Agent were in a
net borrowing position.
"Lien" means any mortgage, deed of trust, pledge,
hypothecation, assignment, deposit arrangement, security interest, encumbrance
(including, but not limited to, easements, rights-of-way, zoning restrictions
and the like), lien (statutory or other), preference, priority or other
security agreement or preferential arrangement of any kind or nature
whatsoever, including without limitation any conditional sale or other title
retention agreement, the interest of a lessor under a Capital Lease, any
financing lease having substantially the same economic effect as any of the
foregoing, and the filing of any financing statement or document having similar
effect (other than a financing statement filed by a "true" lessor pursuant to
Section 9408 of the Uniform Commercial Code) naming the owner of the asset to
which such Lien relates as debtor, under the Uniform Commercial Code or other
comparable law of any jurisdiction.
"Liquidity Provider" means, for any Designated Bid Lender and
at any time, on a collective basis, the financial institutions that at such
date are providing liquidity or credit support facilities to or for the account
of such Designated Bid Lender to fund such Designated Bid Lender's obligations
hereunder or to support the securities, if any, issued by such Designated Bid
Lender to fund such obligations.
"Loan Account" has the meaning given to such term in Section
2.3.1.
18
19
"Loan Availability" means, at any time, the lesser of (i) an
amount equal to the positive difference, if any, of (A) fifty-five percent
(55%) of the Unencumbered Pool Value, less (B) Unsecured Liabilities other than
the outstanding principal of the Loans; and (ii) the amount of the Committed
Facility from time to time.
"Loan Documents" means this Agreement, the Loan Notes, the
Guaranties and all other agreements, instruments and documents (together with
amendments and supplements thereto and replacements thereof) now or hereafter
executed by the REIT, Borrower or any Guarantor Subpartnership, which evidence
or guaranty the Obligations.
"Loan Notes" means the promissory notes evidencing the Loans,
executed by Borrower in favor of each of the Lenders (in their own capacities
and, if applicable, in their capacities as administrative agents for their
respected Designated Bid Lenders), as they may be amended, supplemented,
replaced or modified from time to time. The initial Loan Notes and any
replacements thereof shall be substantially in the form of Exhibit E.
"Loans" means the loans made pursuant to this Agreement,
whether constituting Committed Loans or Bid Loans.
"Major Agreements" means, at any time, (i) each Major UPP
Lease and (ii) each ground lease affecting an Unencumbered Pool Property.
"Major UPP Lease" means any UPP Lease of fifty percent (50%)
or more of the net rentable square footage of any Unencumbered Pool Property.
"Majority Lenders" means, collectively, (i) until the
Termination Date, Lenders whose Pro Rata Shares, in the aggregate, are at least
fifty-one percent (51%), and (ii) on and after the Termination Date, Lenders
whose outstanding Loans represent at least fifty-one percent (51%) of the
aggregate principal amount of all outstanding Loans, determined as if each
Designating Lender held (in addition to outstanding Committed Loans and Bid
Loans made for its own account) all outstanding Bid Loans made by its
Designated Bid Lender; provided, in each case, that, in determining such
percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares (or, if applicable, percentage
ownership of outstanding Loans) of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of (or, if applicable,
outstanding Loans owed to) such Defaulting Lenders, provided further, that the
foregoing suspension of voting rights shall be subject to the same provisions
set forth in the definition of "Lenders" in the case of any dispute as to the
defaulted status of a Lender or Designated Bid Lender.
"Majority Partnership" means any Partnership in which Borrower
has an ownership interest, whose financial results are consolidated under GAAP
in the Financial Statements.
19
20
"Material Adverse Effect" means with respect to a Person, a
material adverse effect upon the condition (financial or otherwise), results of
operations, business or properties of such Person and its consolidated
Subsidiaries, considered as a whole. The phrase "has a Material Adverse
Effect" or "will result in a Material Adverse Effect" or words substantially
similar thereto shall in all cases be intended to mean "has resulted, or will
or could reasonably be anticipated to result, in a Material Adverse Effect",
and the phrase "has no (or does not have a) Material Adverse Effect" or "will
not result in a Material Adverse Effect" or words substantially similar thereto
shall in all cases be intended to mean "does not or will not or could not
reasonably be anticipated to result in a Material Adverse Effect".
"Multiemployer Plan" means, with respect to any Person, an
employee benefit plan defined in Section 4001(a)(3) of ERISA which is, or
within the immediately preceding six (6) years was, contributed to by such
Person or an ERISA Affiliate of such Person.
"Negative Pledge" means, with respect to a particular asset,
that it is not subject to any agreement (other than (i) this Agreement or any
other Loan Document, or (ii) the documentation governing any Indebtedness
issued pursuant to (A) an effective registration statement filed under the
Securities Act or (B) the exemption from registration under the Securities Act
provided by Rule 144A issued thereunder) that prohibits the creation of any
Lien thereon as security for Indebtedness of the Person owning such asset;
provided, however, that an agreement that establishes a maximum ratio of
unsecured debt to unencumbered assets, or of secured debt to total assets, or
that otherwise conditions a Person's ability to encumber its assets upon the
maintenance of one or more specified ratios that limit such Person's ability to
encumber its assets but that do not generally prohibit the encumbrance of its
assets, or the encumbrance of specific assets, shall not constitute a "Negative
Pledge" for purposes of the Loan Documents.
"Net Income" means, for any period, the net earnings (or loss)
of the REIT, after Taxes and minority interests in consolidated Subsidiaries,
but before minority interests in Borrower, calculated for such period on a
consolidated basis in conformity with GAAP.
"Net Offering Proceeds" means (i) all cash proceeds received
by the REIT as a result of the sale of common, preferred or other classes of
stock in the REIT (if and only to the extent reflected in stockholders' equity
on the consolidated balance sheet of the REIT prepared in accordance with GAAP)
less customary costs and discounts of issuance paid by the REIT, all of which
proceeds shall have been concurrently contributed by the REIT to Borrower as
additional capital, plus (ii) all cash and the fair market value of the net
equity of all properties contributed to Borrower by one or more Persons in
exchange for limited partnership interests in Borrower.
20
21
"Net Operating Income" means, with respect to an Unencumbered
Property, the net operating income of such Property determined in accordance
with GAAP, except that Net Operating Income shall not include security or other
deposits, late fees, lease termination or other similar charges, delinquent
rent recoveries, unless previously reflected in reserves, or any other items of
a non-recurring nature. Notwithstanding the foregoing, Net Operating Income
may include collected lease termination charges (amortized monthly over the
remaining term of the lease) and delinquent rent recoveries so long as (i) any
such charge or recovery does not relate to a date earlier than twelve (12)
months prior to the end of the period for which Net Operating Income is
determined and (ii) no such recovery shall be made for any month during or
after which the space to which such charge or recovery relates has been
re-leased to another Person and such Person has an obligation to pay rent for
such month(s).
"Net Worth" means, at any time, the REIT's stockholders'
equity, as shown on its Financial Statements prepared in accordance with GAAP,
plus minority interests in Borrower, plus cumulative net additions to
depreciation and amortization reflected in statements of operation after
December 31, 1996, minus intangible assets. The parties acknowledge that the
Net Worth as of June 30, 1997, was approximately One Billion Twenty-Five
Million Seven Hundred Eighty-Eight Thousand Dollars ($1,025,788,000).
"Non Pro Rata Loan" means (i) a Committed Loan with respect to
which fewer than all Lenders have funded their respective Pro Rata Shares of
such Committed Loan, and (ii) any Borrowing comprised of Bid Loans with respect
to which any Bid Loan to be made as part of such Borrowing has not been funded
in full, and the failure of the non-funding Lender(s) or Designated Bid
Lender(s) to fund its or their respective Pro Rata Shares of such Committed
Loan or its or their Bid Loan(s), as the case may be, constitutes a breach of
this Agreement.
"Nonrecourse Indebtedness" means Indebtedness with respect to
which recourse for payment is contractually limited to specific assets
encumbered by a Lien securing such Indebtedness.
"Notice of Borrowing" means, with respect to a proposed
Borrowing pursuant to Section 2.1.2, a notice substantially in the form of
Exhibit F.
"Obligations" means, from time to time, all Indebtedness of
Borrower owing to Agent, any Lender or Designated Bid Lender or any Person
entitled to indemnification pursuant to Section 12.2, or any of their
respective successors, transferees or assigns, of every type and description,
whether or not evidenced by any note, guaranty or other instrument, arising
under or in connection with this Agreement or any other Loan Document, whether
or not for the payment of money, whether direct or indirect (including those
acquired by assignment), absolute or contingent, due or to become due, now
existing
21
22
or hereafter arising and however acquired. The term includes, without
limitation, all interest, charges, expenses, fees, reasonable attorneys' fees
and disbursements, reasonable fees and disbursements of expert witnesses and
other consultants, and any other sum now or hereinafter chargeable to Borrower
under or in connection with this Agreement or any other Loan Document.
"Officer's Certificate" means a certificate signed by a
specified officer of a Person certifying as to the matters set forth therein.
"Partnership" means any general or limited partnership, joint
venture, limited liability company or limited liability partnership.
"Partnership Agreement" means, with respect to any
Partnership, on a collective basis, its partnership agreement, its agreement of
limited partnership agreement and certificate of limited partnership (if any),
its operating or management agreement and articles or certificate of
organization, or other organizational or governance document(s).
"PBGC" means the Pension Benefit Guaranty Corporation or any
Person succeeding to the functions thereof.
"Permit" means any permit, approval, authorization, license,
variance or permission required from a Governmental Authority under an
applicable Requirement of Law.
"Permitted UPP Secured Debt" means Indebtedness of a UPP
Subpartnership to Borrower, incurred to replace Indebtedness secured by one or
more Unencumbered Pool Properties at the time such Unencumbered Pool Property
is first acquired by a UPP Subpartnership (excluding any such replaced
Indebtedness incurred in contemplation of such acquisition), that is secured
only by the Unencumbered Pool Property(ies), owned by the debtor UPP
Subpartnership, that secured such replaced Indebtedness at the time the
Permitted UPP Secured Debt was incurred.
"Permitted Investments" means Investments in (i) Land,
Securities, Third Party Partner Debt, Partnerships, Investment Mortgages, but
only to the extent permitted in Section 9.9, and (ii) Permitted UPP Secured
Debt.
"Permitted Liens" means:
(a) Liens (other than Environmental Liens and any Lien
imposed under ERISA) for taxes, assessments or charges of any
Governmental Authority or claims that are not yet due and payable,
unless they are being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established,
to the extent required by GAAP;
22
23
(b) Liens (other than any Lien imposed under ERISA)
incurred or deposits made in the ordinary course of business
(including without limitation surety bonds and appeal bonds) in
connection with workers' compensation, unemployment insurance and
other types of social security benefits or to secure the performance
of tenders, bids, leases, contracts (other than for the repayment of
Indebtedness), or statutory obligations;
(c) any laws, ordinances, easements, rights of way,
restrictions, exemptions, reservations, conditions, limitations,
covenants, options, leases, imperfections of title or other matters
that, in the aggregate, do not (i) materially interfere with the
occupation, use and enjoyment of the Property or other assets
encumbered thereby, by the Person owning such Property or other
assets, in the normal course of its business or (ii) materially impair
the value of the Property subject thereto; and
(d) Liens imposed by laws, such as mechanics, workers'
and materialmen's liens and other similar liens arising in the
ordinary course of business which secure payment of obligations not
more than thirty (30) days past due, unless such obligations are being
contested in good faith by appropriate proceedings and appropriate
reserves have been established, to the extent required by GAAP.
"Person" means any natural person, employee, corporation,
limited partnership, general partnership, joint stock company, limited
liability company, joint venture, association, company, trust, bank, trust
company, land trust, business trust or other organization, whether or not a
legal entity, or any other non-governmental entity, or any Governmental
Authority.
"Plan" means an employee benefit plan defined in Section 3(3)
of ERISA (other than a Multiemployer Plan) in respect of which Borrower or an
ERISA Affiliate of the Borrower, as applicable, is an "employer" as defined in
Section 3(5) of ERISA.
"Price Adjustment Date" has the meaning given to such term in
Section 2.4.8(c).
"Pro Rata Share" means, with respect to any Lender, a fraction
(expressed as a percentage), the numerator of which shall be the amount of such
Lender's Commitment and the denominator of which shall be the aggregate amount
of all of Lenders' Commitments.
"Proceedings" means, collectively, all actions, suits and
proceedings before, and investigations commenced or threatened by or before,
any court or Governmental Authority with respect to a Person.
23
24
"Property" means, as to any Person, all real or personal
property (including, without limitation, buildings, facilities, structures,
equipment and other assets, tangible or intangible) owned by such Person.
"Rating Agency" means each of (i) Standard & Poor's Ratings
Services, and (ii) Fitch Investors Service, L.P. (or, in lieu of Fitch
Investors Service, L.P., such other nationally-recognized rating agency as the
Majority Lenders may agree to).
"Regulations G, T, U and X" mean such Regulations of the
Federal Reserve Board as in effect from time to time.
"Regional Senior Vice President" means each of Xxxx X.
Xxxxxxxxx, Xxxxx X. Xxxx, Xxxx X. Xxxxxx, Xxxxxx X. Xxxxxxxxx and Xxxxx X.
Xxxxxxx.
"REIT" means Xxxxxxx Properties, Inc., a Maryland corporation.
"Release" means the release, spill, emission, leaking,
pumping, injection, deposit, disposal, discharge, dispersal, leaching or
migration into the indoor or outdoor environment or into or out of any
property, including the movement of Contaminants through or in the air, soil,
surface water, groundwater or property.
"Remedial Action" means any action required by applicable
Environmental Laws to (i) clean up, remove, treat or in any other way address
Contaminants in the indoor or outdoor environment; (ii) prevent the Release or
threat of Release or minimize the further Release of Contaminants so they do
not migrate or endanger or threaten to endanger public health or welfare or the
indoor or outdoor environment; or (iii) perform pre-remedial studies and
investigations and post-remedial monitoring and care.
"Reportable Event" means any of the events described in
Section 4043(b) of ERISA, other than an event for which the thirty (30) day
notice requirement is waived by regulations.
"Requirements of Law" mean, as to any Person, the charter and
by-laws, Partnership Agreement or other organizational or governing documents
of such Person, and any law, rule or regulation, Permit, or determination of an
arbitrator or a court or other Governmental Authority, in each case applicable
to or binding upon such Person or any of its property or to which such Person
or any of its property is subject, including without limitation, the Securities
Act, the Securities Exchange Act, Regulations G, T, U and X, FIRREA and any
certificate of occupancy, zoning ordinance, building, environmental or land use
requirement or Permit or occupational safety or health law, rule or regulation.
"Requisite Lenders" means, collectively, (i) until the
Termination Date, Lenders whose Pro Rata Shares, in the aggregate, are at least
sixty-six and two-thirds
24
25
percent (66-2/3%), and (ii) on and after the Termination Date, Lenders whose
outstanding Loans represent at least sixty-six and two-thirds percent (66-2/3%)
of the aggregate principal amount of all outstanding Loans, determined as if
each Designating Lender held (in addition to outstanding Committed Loans and
Bid Loans made for its own account) all outstanding Bid Loans made by its
Designated Bid Lender; provided, in each case, that, in determining such
percentage at any given time, all then existing Defaulting Lenders will be
disregarded and excluded and the Pro Rata Shares (or, if applicable, percentage
ownership of outstanding Loans) of Lenders shall be redetermined, for voting
purposes only, to exclude the Pro Rata Shares of (or, if applicable,
outstanding Loans owed to) such Defaulting Lenders, provided further, that the
foregoing suspension of voting rights shall be subject to the same provisions
set forth in the definition of "Lenders" in the case of any dispute as to the
defaulted status of a Lender or Designated Bid Lender.
"SP #177" means Xxxxxxx Properties #177, Limited Partnership,
a California limited partnership.
"SWIP" means Spieker Washington Interest Partners, a
California general partnership, of which Borrower and the REIT are 99% and 1%
general partners, respectively.
"Secretary's Certificate" has the meaning given to such term
in Section 4.1.
"Secured Borrower Debt" means all Borrower Debt that is
secured by a Lien on any Property of the REIT, Borrower or any Investment
Partnership or any of their respective Subsidiaries.
"Securities" means any stock, shares, voting trust
certificates, bonds, debentures, notes or other evidences of indebtedness,
secured or unsecured, convertible, subordinated or otherwise, or in general any
instruments commonly known as "securities", or any certificates of interest,
shares, or participations in temporary or interim certificates for the purchase
or acquisition of, or any right to subscribe to, purchase or acquire any of the
foregoing, but shall not include any evidence of the Obligations, provided that
Securities shall not include Cash Equivalents, Investment Mortgages, Third
Party Partner Debt or interests in Partnerships.
"Securities Act" means the Securities Act of 1933, as amended
to the date hereof and from time to time hereafter, and any successor statute.
"Securities Exchange Act" means the Securities Exchange Act of
1934, as amended to the date hereof and from time to time hereafter, and any
successor statute.
"Senior Loans" has the meaning given to such term in Section
11.4.2.
25
26
"Solvent" means, as to any Person at the time of
determination, that such Person (i) owns property the value of which (both at
fair valuation and at present fair saleable value) is greater than the amount
required to pay all of such Person's liabilities (including contingent
liabilities and debts); (ii) is able to pay all of its debts as such debts
mature; and (iii) has capital sufficient to carry on its business and
transactions and all business and transactions in which it is about to engage.
"Special UPP" means an Unencumbered Pool Property that (i) has
been designated by Borrower pursuant to Section 3.1.2 and (ii) is either (A) of
a type other than an Approved Property Type or (B) located in a market other
than an Approved Market, unless the Majority Lenders have specifically
consented to the inclusion of such Unencumbered Pool Property in the
Unencumbered Pool as other than a Special UPP.
"Subsidiary" of a Person means any corporation, Partnership,
trust or other non-Partnership entity of which a majority of the stock (or
equivalent ownership or controlling interest) having voting power to elect a
majority of the Board of Directors (if a corporation) or to select the trustee
or equivalent controlling interest, shall, at the time such reference becomes
operative, be directly or indirectly owned or controlled by such Person.
Without limiting the foregoing definition, SWIP, SP #177 and all UPP
Subpartnerships and Majority Partnerships constitute Subsidiaries of Borrower.
"Swing Line" has the meaning given to such term in Section
2.1.1(a)(ii).
"Swing Line Borrowing" means a Borrowing effected under the
Swing Line.
"Taxes" means all federal, state, local and foreign income and
gross receipts taxes.
"Termination Date" has the meaning given to such term in
Section 2.1.5.
"Termination Event" means (i) any Reportable Event, (ii) the
withdrawal of Borrower or the REIT, or an ERISA Affiliate of either of them,
from a Benefit Plan during a plan year in which it was a "substantial employer"
as defined in Section 4001(a)(2) of ERISA, (iii) the occurrence of an
obligation arising under Section 4041 of ERISA by the Borrower or the REIT, or
an ERISA Affiliate of either of them, to provide affected parties with a
written notice of an intent to terminate a Benefit Plan in a distress
termination described in Section 4041(c) of ERISA, (iv) the institution by the
PBGC of proceedings to terminate any Benefit Plan of the Borrower or the REIT,
or any ERISA Affiliate of either of them, under Section 4042 of ERISA, (v) any
event or condition which constitutes grounds under Section 4042 of ERISA for
the appointment of a trustee to administer such a Benefit Plan, (vi) the
partial or complete withdrawal of Borrower or the REIT, or any ERISA Affiliate
of either of them, from a Multiemployer Plan, or (vii) the adoption of an
amendment by any Person or any ERISA Affiliate to terminate any Benefit Plan.
26
27
"Termination of Designation" has the meaning given to such
term in Section 3.2.
"Third Party Partner" means a Person who, immediately prior to
the acquisition (whether direct or indirect) of a Property by Borrower, held an
interest in such Property or in the Person who owned it.
"Third Party Partner Debt" means Indebtedness of a Third Party
Partner owed to Borrower, Borrower's interest in which was acquired by Borrower
as part of its acquisition of a Property.
"Total Liabilities" of any Person means (i) all Indebtedness
of such Person, whether or not such Indebtedness would be included as a
liability on the balance sheet of such Person in accordance with GAAP, plus
(ii) all other liabilities of every nature and kind of such Person that would
be included as liabilities on the balance sheet of such Person in accordance
with GAAP.
"Total Liabilities to Gross Asset Value Ratio" has the meaning
given to such term in Section 9.2.
"Unencumbered NOI" means, for any period, the aggregate Net
Operating Income of all Unencumbered Properties for such period.
"Unencumbered Pool Certificate" has the meaning given to such
term in Section 6.1.6.
"Unencumbered Pool Properties" means the Unencumbered
Properties listed on Schedule 1, as such Schedule 1 may be amended from time to
time to reflect the addition and deletion of Unencumbered Pool Properties
pursuant to Article III.
"Unencumbered Pool Value" means, at any time, an amount equal
to the sum of (i) cash and Cash Equivalents owned by Borrower or a UPP
Subpartnership (or, if the Borrower's Percentage Interest in such UPP
Subpartnership is less than 100%, an amount equal to the Borrower's Adjusted
Percentage Interest thereof) as of such date (but excluding any tenant
deposits), provided that neither such cash or Cash Equivalents, nor any portion
of the Borrower's Percentage Interest, in the Person owning such property, is
subject to (A) any Lien (other than Permitted Liens), or (B) any Negative
Pledge, and (ii) an amount equal to (A) the aggregate Net Operating Income of
the Unencumbered Pool Properties for the most recently ended Fiscal Quarter,
times (B) four (4), divided by (C) 0.10 (provided that, with respect to
Unencumbered Pool Properties owned by a UPP Subpartnership in which the
Borrower's Percentage Interest is less than 100%, there shall be included, for
purposes of the foregoing calculation, only the Borrower's Adjusted Percentage
Interest in the Net Operating Income of such Unencumbered Pool Properties).
27
28
"Unencumbered Property" means real property (including ground
leases) improved with one or more completed office, industrial or retail
buildings, that is wholly-owned by Borrower or a UPP Subpartnership, provided
that neither such real property, nor any interest in the Person owning such
Property (other than interests held by Third Party Partners), is subject to (i)
any Lien, other than Permitted Liens or (ii) unless such Property is owned by a
UPP Subpartnership that is not a Guarantor Subpartnership, any Negative Pledge.
"Unmatured Event of Default" means an event which, with the
giving of notice or the lapse of time, or both, would constitute an Event of
Default.
"Unsecured Interest Expense" means, for any period, (i) total
Interest Expense for such period, less (ii) Interest Expense attributable to
any Secured Borrower Debt for such period.
"Unsecured Liabilities" means, at any time, (i) Total
Liabilities of Borrower and its Subsidiaries, less (ii) Secured Borrower Debt.
"UPP" when used herein refers to an Unencumbered Pool
Property.
"UPP Eligibility Certification" means the certification
delivered by Borrower to Agent with respect to any proposed Unencumbered Pool
Property in accordance with Section 3.1.2.
"UPP Eligibility Criteria" has the meaning given to such term
in Section 3.1.2.
"UPP Lease" means a tenant lease of an Unencumbered Pool
Property.
"UPP Subpartnership" means (i) any Guarantor Subpartnership,
and (ii) any other Partnership between (A) Borrower and SWIP or (B) (1)
Borrower or such other Person or Persons, in each case, wholly-owned by the
REIT, by Borrower, by the REIT and Borrower, or by Borrower and one or more
Guarantor Subpartnerships, as the Majority Lenders may approve (such approval
not to be unreasonably withheld), and (2) one or more Third Party Partners
(provided that the Borrower's Percentage Interest of each UPP Subpartnership
shall at all times equal at least fifty- one percent (51%)); in any such case,
which owns one or more Unencumbered Pool Properties.
"Voluntary Termination" has the meaning given to such term in
Section 2.1.5.
1.2 COMPUTATION OF TIME PERIODS. In this Agreement, in the
computation of periods of time from a specified date to a later specified date,
unless otherwise specified, the word "from" means "from and including" and the
words "to" and "until" each mean "to and
28
29
including". Periods of days referred to in this Agreement shall be counted in
calendar days unless Business Days are expressly prescribed.
1.3 TERMS.
1.3.1 Any accounting terms used in this Agreement which are
not specifically defined shall have the meanings customarily given them in
accordance with GAAP. All references herein to Borrower, the REIT or any other
Person, in connection with any financial or related covenant, representation or
calculation, shall be understood to mean and refer to Borrower, the REIT and
such other Person on a consolidated basis in accordance with GAAP, unless
otherwise specifically provided and subject in all events to any adjustments
herein set forth.
1.3.2 Any time the phrase "to the best of Borrower's
knowledge" or a phrase similar thereto is used herein, it means: "to the
actual knowledge of the general counsel of Borrower or the Executive Officers
or Regional Senior Vice Presidents or their respective successors in office."
1.3.3 In each case where the consent or approval of Agent,
all Lenders and Designated Bid Lenders, Majority Lenders and/or Requisite
Lenders is required, or their non-obligatory action is requested by Borrower,
such consent, approval or action shall be in the sole and absolute discretion
of Agent and, as applicable, each Lender and Designated Bid Lender, unless
otherwise specifically indicated.
1.3.4 Any time the word "or" is used herein, unless the
context otherwise clearly requires, it has the inclusive meaning represented by
the phrase "and/or". The words "hereof", "herein", "hereby", "hereunder" and
similar terms refer to this Agreement as a whole and not to any particular
provision of this Agreement. Article, section, subsection, clause, exhibit and
schedule references are to this Agreement unless otherwise specified. Any
reference in this Agreement to this Agreement or to any other Loan Document
includes any and all amendments, modifications, supplements, renewals or
restatements thereto or thereof, as applicable.
ARTICLE II
LOANS
2.1 LOAN ADVANCES AND REPAYMENT.
2.1.1 CREDIT FACILITIES.
(a) COMMITTED LOAN FACILITY.
29
30
(i) Subject to the terms and conditions
set forth in this Agreement, Lenders hereby agree to make
Committed Loans to Borrower from time to time during the
period from the Closing Date to the Business Day next
preceding the Termination Date, in an aggregate outstanding
principal amount which shall not exceed the Committed Loan
Availability at any time. All Committed Loans under this
Agreement shall be made by Lenders simultaneously and
proportionately to their respective Pro Rata Shares, it being
understood that no Lender shall be responsible for any failure
by any other Lender to perform its obligation to make a
Committed Loan hereunder and that the Commitment of any Lender
shall not be increased or decreased as a result of the failure
by any other Lender to perform its obligation to make a
Committed Loan. Committed Loans may be voluntarily prepaid
pursuant to Section 2.6.1 and, subject to the provisions of
this Agreement, any amounts so prepaid may be reborrowed under
this Section 2.1.1(a). The principal balance of the Committed
Loans shall be payable in full on the Termination Date. The
Committed Loans will be evidenced by the Loan Notes.
(ii) There is hereby established a
sub-facility (the "Swing Line"), in the amount of Twenty
Million Dollars ($20,000,000), under and as a part of the
Committed Facility. The Swing Line shall not for any purpose
be an addition to the Commitments or the Committed Facility,
but shall be a sub-feature thereunder. All Loans requested to
be made pursuant to the Swing Line shall be subject to the
same terms and conditions applicable to other Borrowings under
the Committed Facility, and all outstanding Swing Line
Borrowings shall likewise be subject to the same terms and
conditions applicable to other outstanding Borrowings under
the Committed Facility, except as expressly provided in (A)
Section 2.1.2(a)(ii) with respect to the number of Borrowings
permitted in any calendar month, the time within which the
Notice of Borrowing for Swing Line Borrowings must be given,
the minimum and incremental amounts applicable to Swing Line
Borrowings and the interest rate applicable thereto, and (B)
Section 2.6.1(a) with respect to prepayments of Swing Line
Borrowings.
(b) BID LOAN FACILITY.
(i) In addition to its agreement to make
Committed Loans under the Committed Facility, each Lender
severally agrees that, subject to the conditions that at the
time of Borrower's submission of the relevant Competitive Bid
Request (A) Borrower's senior long-term unsecured debt
obligations are rated at least BBB-/Baa3 by both Rating
Agencies, and (B) no Event of Default or Unmatured Event of
Default has occurred and is
30
31
continuing, Borrower may, in accordance with this Section
2.1.1(b), Section 2.1.3 and the other relevant provisions of
the Loan Documents, from time to time request that Lenders,
prior to the Termination Date, submit offers to make Bid Loans
to Borrower; provided, however that (X) at no time shall the
aggregate principal amount of all Loans (whether Committed
Loans or Bid Loans) at any time outstanding exceed the Loan
Availability; (Y) at no time shall the aggregate principal
amount of all Bid Loans exceed the Bid Loan Limit; and (Z) at
no time may the number of Bid Loan Interest Periods then
outstanding plus the number of Interest Periods for Committed
Loans then outstanding exceed eight.
(ii) Lenders may, but shall not be
obligated to, submit offers in response to any Competitive Bid
Request, and Borrower may, but shall not be obligated to,
accept any such offers. The obligation of a Lender to fund
its Pro Rata Share of Committed Loans shall be unaffected by
its (or its Designated Bid Lender's) making of any Bid Loans,
notwithstanding that the sum of such Lender's Pro Rata Share
of the aggregate principal amount of the outstanding Committed
Loans, plus the aggregate amount of such Lender's (and its
Designated Bid Lender's) outstanding Bid Loans, may exceed
such Lender's Commitment.
(iii) Any Bid Loan that would otherwise be
made by a Lender that is a Designating Lender may from time to
time be made by its Designated Bid Lender, in such Designated
Bid Lender's sole discretion. Nothing herein shall constitute
a commitment to make Bid Loans by such Designated Bid Lender;
provided, however, if such Designating Lender's Designated Bid
Lender elects not to, or fails to, make any such Bid Loan, for
any reason whatsoever, such Designating Lender shall make such
Bid Loan pursuant to the terms hereof, it being the obligation
of each Designating Lender to make each Bid Loan with respect
to a Competitive Bid submitted by such Designating Lender and
accepted by Borrower, in whole or in part, pursuant hereto,
except to the extent that such Bid Loan is in fact funded by
its Designated Bid Lender.
(iv) On the last day of each Bid Loan
Interest Period, Borrower shall pay to Agent, for the
respective accounts of Lenders and Designated Bid Lenders
making Bid Loans ending thereon, the full amount of the
principal of each Bid Loan ending thereon. The Bid Loans will
be evidenced by the Loan Notes.
(c) EXCESS BORROWING CONDITION. If at any time
(x) the outstanding principal balance of the Loans exceeds the Loan
Availability, as a result
31
32
of a reduction in the Unencumbered Pool Value, the incurrence of
additional Unsecured Liabilities or (subject to Section 2.1.1(d)) for
any other reason whatsoever, and (y) the aggregate principal amount of
all then outstanding Bid Loans having Bid Loan Interest Periods that
end within sixty (60) days following such occurrence is less than the
amount by which the outstanding principal balance of the Loans exceeds
the Loan Availability, then Borrower shall, not later than sixty (60)
days following the date on which the Loan Availability was exceeded,
(i) reduce the Unsecured Liabilities in such amounts and/or (ii)
identify to Agent such additional Unencumbered Pool Property(-ies) as
(A) Agent may approve and Majority Lenders may accept under Section
3.1.3, or (B) as may be designated as Unencumbered Pool Property(ies)
in accordance with Section 3.1.2, as are necessary so that the
outstanding principal balance of the Loans does not exceed the Loan
Availability. Failure by Borrower to have complied with the foregoing
in a timely manner shall constitute an Event of Default without
further notice or grace period hereunder. No further Borrowings, and
no Termination of Designation with respect to any Unencumbered Pool
Property, shall be permitted so long as such excess borrowing
condition shall continue to exist. Nothing in this subparagraph (c)
shall excuse Borrower's compliance with all terms, conditions,
covenants and other obligations imposed upon it under the Loan
Documents during the period of such excess borrowing, nor in any
manner condition or impair Agent's or any Lender's or Designated Bid
Lender's rights thereunder in respect of any such breach thereof by
Borrower.
(d) SCHEDULED REDUCTIONS IN COMMITTED FACILITY.
On each Committed Facility Reduction Date, Borrower shall pay, for
application to the repayment of the Committed Loans, that amount, if
any, by which the outstanding principal of all Loans exceeds the
amount of the Committed Facility, as reduced thereon.
2.1.2 COMMITTED LOAN BORROWINGS.
(a) (i) Whenever Borrower desires to borrow
under the Committed Facility, but in no event more than three (3)
times during any one (1) calendar month, Borrower shall give Agent, at
Xxxxx Fargo Real Estate Group Disbursement Center, 0000 Xxxx Xxxx
Xxxxx, Xxxxx 000, Xx Xxxxxxx, Xxxxxxxxxx 00000 (fax no. (310)
615-1014), with a copy to: Xxxxx Fargo Bank, Real Estate Group, 000
Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx, Xxxxxxxxxx 00000,
Attention: Xxxxx Xxxxx (fax no. (000) 000-0000), or to such other
address(es), persons or fax numbers as Agent shall designate, an
original or facsimile Notice of Borrowing no later than 9:00 a.m. (San
Francisco time), not less than three (3) nor more than five (5)
Business Days prior to the proposed Funding Date of each Committed
Loan.
32
33
(ii) Notwithstanding the foregoing or any
other provision hereof to the contrary: (A) a Notice of
Borrowing may be given not less than two (2) Business Days
prior to the proposed Funding Date of a Committed Loan if the
following conditions are met: (1) any Lender shall have
failed to fund its Pro Rata Share of a previously requested
Committed Loan, or a Bid Loan (unless such Bid Loan is funded
by such Lender's Designated Bid Lender), on the applicable
Funding Date; (2) the subject Notice of Borrowing shall have
been given by Borrower to Agent not later than three (3)
Business Days following the Funding Date referred to in the
foregoing clause (1) (or, in the case Agent shall have elected
to fund such Lender's Pro Rata Share (or such Lender's Bid
Loan, as the case may be) pursuant to Section 11.3.1, then not
later than the next Business Day following any demand for
repayment of such funding by Agent); and (3) the additional
Borrowing shall be requested as a Base Rate Loan; further, the
monthly frequency limit and the $1,000,000 minimum Borrowing
limit elsewhere referred to this Section 2.1.2 shall not apply
to such Borrowing; and (B) in addition to the number of
Committed Loans permissible monthly under the general
Committed Facility pursuant to Section 2.1.2(a)(i) or effected
pursuant to the foregoing clause (A), Borrower shall be
permitted to borrow under the Swing Line up to two (2) times
during any calendar month, provided that (1) the Notice of
Borrowing with respect to any Swing Line Borrowing shall be
given by Borrower to Agent no later than 9:00 a.m. (San
Francisco time) not less than one (1) Business Day prior to
the proposed Funding Date of such Swing Line Borrowing and
shall designate such Borrowing as a Base Rate Loan; (2) not
later than 1:00 P.M. (San Francisco time), Agent shall send a
copy of each Notice of Borrowing under the Swing Line by
facsimile to each Lender; (3) each Lender shall make available
to Agent (or the funding bank or entity designated by Agent),
the amount of such Lender's Pro Rata Share of such Swing Line
Borrowing in immediately available funds not later than 10:00
a.m. (San Francisco time) on the Funding Date designated in
the Notice of Borrowing; and (4) each requested Borrowing
under the Swing Line shall equal Five Hundred Thousand Dollars
($500,000) or an integral multiple of Ten Thousand Dollars
($10,000) in excess thereof. Except as provided in the
preceding sentence or (with respect to Swing Line Borrowings)
Section 2.6.1(a), all other provisions of this Agreement shall
apply to any such requested Borrowing.
(iii) Each Notice of Borrowing shall
specify (1) the Funding Date (which shall be a Business Day)
in respect of the Committed Loan requested therein, (2) the
amount of the proposed Committed Loan, provided that the
aggregate amount of such proposed Committed Loan shall equal
One Million Dollars ($1,000,000) or an integral multiple of
One
33
34
Hundred Thousand Dollars ($100,000) in excess thereof, (3)
whether the Committed Loan to be made thereunder will be a
Base Rate Loan or a LIBOR Loan and, if a LIBOR Loan, the
Interest Period, (4) to which account of Borrower the funds
are to be directed, and (5) the proposed use of such Committed
Loan. Any Notice of Borrowing pursuant to this Section 2.1.2
shall be irrevocable.
(b) Borrower may elect (i) to convert LIBOR Loans
or any portion thereof into Base Rate Loans, (ii) to convert Base Rate
Loans or any portion thereof to LIBOR Loans, or (iii) to continue any
LIBOR Loans or any portion thereof for an additional Interest Period,
provided, however, that the aggregate amount of the Committed Loans
being converted into or continued as LIBOR Loans shall, in the
aggregate, equal One Million Dollars ($1,000,000) or an integral
multiple of One Hundred Thousand Dollars ($100,000) in excess thereof.
The applicable Interest Period for the continuation of any LIBOR Loan
shall commence on the day on which the next preceding Interest Period
expires. The conversion of a LIBOR Loan to a Base Rate Loan shall
only occur on the last Business Day of the Interest Period relating to
such LIBOR Loan; such conversion shall occur automatically in the
absence of an election under clause (iii) above. Each election under
clause (ii) or clause (iii) above shall be made by Borrower giving
Agent an original or facsimile Notice of Borrowing no later than 9:00
a.m. (San Francisco time), not less than three (3) nor more than five
(5) Business Days prior to the date of a conversion to or continuation
of a LIBOR Loan, specifying, in each case (1) the amount of the
conversion or continuation, (2) the Interest Period therefor, and (3)
the date of the conversion or continuation (which date shall be a
Business Day).
(c) Upon receipt of a Notice of Borrowing in
proper form requesting LIBOR Loans under subparagraph (a) or (b)
above, Agent shall determine the LIBOR applicable to the Interest
Period for such LIBOR Loans, and shall, two (2) Business Days prior to
the beginning of such Interest Period, give (by facsimile) a Fixed
Rate Notice in respect thereof to Borrower and Lenders; provided,
however, that failure to give such notice to Borrower shall not affect
the validity of such rate, and no such notice need be given with
respect to the Loans subject to Sections 2.4.5(a)(i) and (ii). Each
determination by Agent of the LIBOR shall be conclusive and binding
upon the parties hereto in the absence of manifest error.
2.1.3 BID LOAN BORROWINGS.
(a) When Borrower desires to effect one or more
Borrowings consisting of one or more Bid Loans, but not more often
than once in any period of thirty (30) consecutive days, Borrower
shall notify Agent by telephone, followed promptly by facsimile of a
Competitive Bid Request, at Xxxxx Fargo Real Estate
34
35
Group Disbursement Center, 0000 Xxxx Xxxx Xxxxx, Xxxxx 000, Xx
Xxxxxxx, Xxxxxxxxxx 00000, with a copy to: Xxxxx Fargo Bank, Real
Estate Group, 000 Xxxxxxxxxx Xxxxxx, Xxxxx Xxxxx, Xxx Xxxxxxxxx,
Xxxxxxxxxx 00000, Attention: Xxxxx Xxxxx, or such other address as
Agent shall designate (to be received no later than 8:00 a.m. (San
Francisco time), (x) in the case of a LIBOR Auction, five Business
Days prior to the proposed Funding Date of the requested Borrowing(s),
or (y) in the case of an Absolute Rate Auction, two Business Days
prior to the proposed Funding Date of the requested Borrowing(s),
together with payment of the auction fee payable to Agent as provided
in the agency fee agreement referred to in Section 2.5.2), specifying
(together with the other information required to be provided pursuant
to Exhibit H):
(i) the Funding Date of such
Borrowing(s), which shall be a Business Day;
(ii) the aggregate amount of such
Borrowing(s), which shall be in an amount (subject to the
limitations set forth in other provisions of the Loan
Documents) equal to $15,000,000 or an integral multiple of
$1,000,000 in excess thereof;
(iii) whether the requested Borrowing(s)
is/are to be made as either (1) one or more LIBOR Bid Loans or
(2) one or more Absolute Rate Bid Loans; and
(iv) the duration of the requested Bid
Loan Interest Period (subject to the limitation that Borrower
may request no more than three Bid Loan Interest Periods in
any single Competitive Bid Request).
Borrower's right to request Competitive Bids for LIBOR Bid
Loans, and each Lender's or Designated Bid Lender's obligation
to fund any LIBOR Bid Loan pursuant to any Competitive Bid
accepted by Borrower, shall be subject in all respects to the
provisions of Section 2.4.8.
(b) Upon receipt of a Competitive Bid Request,
Agent shall promptly send a copy thereof to each of the Lenders by
facsimile, attaching thereto notice of the date and time by which
responses must be received in order to be considered by Borrower. The
Competitive Bid Request shall not constitute an offer by Borrower, but
merely an invitation to Lenders to submit Competitive Bids with
respect to the requested Borrowing(s).
(c) (i) Each Lender may, in its discretion,
submit a Competitive Bid containing an offer or offers to make Bid
Loans in response to any Competitive Bid Request. Each Competitive
Bid must comply with the provisions
35
36
of this Section 2.1.3(c) and must be submitted to Agent (or, in the case of a
Competitive Bid being submitted by Agent in its capacity as a Lender, to
Borrower), by facsimile, no later than 7:00 a.m. (or, in the case of a
Competitive Bid by Agent, 6:30 a.m.), San Francisco time, (1) in the case of a
LIBOR Auction, three Business Days prior to the Funding Date of the proposed
Borrowing(s), or (2) in the case of an Absolute Rate Auction, on such Funding
Date. Each Competitive Bid so submitted (subject only to the provisions of
Section 2.4.8, as described above, to Borrower's eligibility to request bids as
described in Section 2.1.1(b)(i) and to the satisfaction of all conditions
precedent to the requested Bid Loan(s)) shall be irrevocable, unless Borrower
otherwise agrees in writing.
(ii) Each Competitive Bid shall be in
substantially the form of Exhibit I, shall identify (and be
signed on behalf of) the submitting Lender and the date of the
proposed Borrowing(s) specified in the Competitive Bid Request
to which the submitting Lender is responding and shall
specify:
(A) the principal amount of each Bid
Loan for which the Competitive Bid is being made (which shall
not be limited by the submitting Lender's Commitment, but
which shall be in an amount, no greater than the amount of the
requested Borrowing, equal to $5,000,000 or an integral
multiple of $1,000,000 in excess thereof); and
(B) (1) in the case of a LIBOR
Auction, the LIBOR Bid Margin offered by the submitting
Lender, or (2) in the case of an Absolute Rate Auction, the
Absolute Rate offered by the submitting Lender.
A Competitive Bid may include up to three separate offers by
the submitting Lender with respect to each Bid Loan Interest
Period specified in the Competitive Bid Request to which it
responds. Any Competitive Bid that (X) does not include all
the information required by this Section 2.1.3(c), (Y)
contains language that qualifies or conditions the submitting
Lender's offer to make the Bid Loan(s) described therein or
proposes terms other than (or in addition to) the terms
proposed in the relevant Competitive Bid Request other than to
set an aggregate limit on the principal amount of Bid Loans
for which offers being made by the submitting Lender may be
accepted, or (Z) is received by Agent (or Borrower, as
applicable) after the time set forth in Section 2.1.3(c)(i)
(unless amended to bring it into compliance prior to the time
set forth in Section 2.1.3(c)(i)), shall be disregarded.
36
37
(d) Promptly upon receipt, but not later than
8:00 a.m. (San Francisco time) on the date by which Competitive Bids
are required to have been submitted with respect to a Competitive Bid
Request, Agent shall notify Borrower of (i) (A) the terms of each
Competitive Bid (other than one that is to be disregarded as described
above) received in response to the Competitive Bid Request, and (B)
the identity of the Lender submitting such Competitive Bid, and (ii)
(A) the aggregate principal amount of Bid Loans for which Competitive
Bids have been received for each Interest Period requested in the
Competitive Bid Request, and (B) the respective principal amounts and
LIBOR Bid Margins or Absolute Rates, as the case may be, so offered.
(e) No later than 8:30 a.m. (San Francisco time)
on the date by which Competitive Bids are required to have been
submitted with respect to a Competitive Bid Request, Borrower shall
notify Agent, by means of a notice reasonably acceptable to Agent in
form, of its acceptance or rejection of the offers notified to it as
provided in Section 2.1.3(d). Borrower shall have no obligation to
accept any such offer, and may choose to reject all of them. If
Borrower has failed to timely notify Agent of its acceptance or
rejection of any one or more offers by the time specified in the
preceding sentence, Borrower shall be deemed to have rejected such
offer(s). Borrower may accept any Competitive Bid (other than one
that is to be disregarded as provided above) in whole or in part,
provided that:
(i) the aggregate principal amount of
the Competitive Bids so accepted may not exceed the aggregate
amount of the Borrowing(s) requested in the relevant
Competitive Bid Request;
(ii) (A) subject to the provisions set
forth below with respect to multiple offers at the same LIBOR
Bid Margin or Absolute Rate, the principal amount of each
accepted Competitive Bid must be in an amount equal to
$5,000,000 or an integral multiple of $1,000,000 in excess
thereof, and (B) Competitive Bids must be accepted with
respect to an aggregate principal amount of at least
$15,000,000; and
(iii) with respect to each Bid Loan
Interest Period for which Competitive Bids were requested,
Borrower may accept offers solely on the basis of ascending
LIBOR Bid Margins or Absolute Rates, as the case may be
(provided that Borrower may, to the extent necessary to comply
with the preceding subparagraph (ii) or to accept offers in an
aggregate principal amount equal to the aggregate amount of
the Borrowing(s) requested in the relevant Competitive Bid
Request, accept only part of an offer at a particular LIBOR
Bid Margin or Absolute Rate and accept all or part of one or
more offers at a higher LIBOR Bid Margin or Absolute Rate).
37
38
If Borrower chooses to accept one or more offers, Borrower shall
deliver a notice to Agent (in such form as Agent may from time to time
reasonably request), specifying the aggregate principal amount of
offers with respect to each requested Bid Loan Interest Period that it
chooses to accept. If two or more Lenders offer the same LIBOR Bid
Margin or Absolute Rate for an aggregate principal amount greater than
the amount for which such offers were requested with respect to any
requested Bid Loan Interest Period, Borrower shall allocate the
principal amount of the affected Bid Loan among such Lenders as nearly
as possible (in such multiples, not less than $1,000,000, as Borrower
may deem appropriate) in proportion to the aggregate principal amounts
to which their respective offers related. Borrower's allocation, in
the absence of manifest error, shall be conclusive.
(f) Agent shall promptly notify each Lender
having submitted a Competitive Bid whether its offer has been accepted
and, if its offer has been accepted, of the amount of the Bid Loan(s)
to be made by it (or its Designated Bid Lender) on the date of the
relevant Borrowing(s).
(g) Promptly (but no later than one Business Day)
following each Borrowing of one or more Bid Loans, Agent shall notify
each Lender (whether or not such Lender submitted a Competitive Bid
with respect to such Borrowing) of the ranges of bids submitted and
the highest and lowest bids accepted for each Bid Loan Interest Period
requested by Borrower and of the aggregate amount of the Bid Loans
made pursuant to such Borrowing.
(h) Upon receipt of a Competitive Bid Request in
proper form requesting bids to make LIBOR Bid Loans under subparagraph
(a) above, Agent shall determine the LIBOR applicable to each of the
Bid Loan Interest Periods specified in the Competitive Bid Request,
and shall, two (2) Business Days prior to the beginning of such Bid
Loan Interest Period, give (by facsimile) notice of such rate (or
rates, as the case may be) to Borrower and Lenders; provided, however,
that failure to give such notice to any Person shall not affect the
validity of such rate. Each determination by Agent of the LIBOR shall
be conclusive and binding upon the parties hereto in the absence of
manifest error.
2.1.4 MAKING OF LOANS.
Subject to Section 11.3, Agent shall make the proceeds of
Loans available to Borrower on the relevant Funding Date and shall disburse
such funds in Dollars in immediately available funds to Borrower's commercial
demand account at Xxxxx Fargo, Account Number 4233-040799 or such other
account, acceptable to Agent, as may be specified in the Notice of Borrowing or
otherwise requested by Borrower in a writing that is received by Agent no later
than 9:00 a.m. (San Francisco time) on such Funding Date.
38
39
2.1.5 TERM.
The outstanding principal of each Bid Loan shall be payable in
full on the last day of the Bid Loan Interest Period applicable thereto. In
addition: the outstanding balance of the Loans (in the case of clause (iii)
only, except for the Bid Loans) shall be payable in full on the earliest to
occur of (i) the fourth anniversary of the Closing Date, (ii) the acceleration
of the Loans pursuant to Section 10.2.1, or (iii) Borrower's written notice to
Agent (pursuant to Section 2.6.1) of Borrower's election to prepay all accrued
Obligations in respect of the Committed Loans and terminate all Commitments
(the "Termination Date"). Any Bid Loan outstanding on the date on which a
termination described in the foregoing clause (iii) (a "Voluntary
Termination") becomes effective shall be permitted to remain outstanding and
(subject to acceleration thereof pursuant to Section 10.2.1) shall be due and
payable on the last day of the Bid Loan Interest Period applicable thereto.
2.2 AUTHORIZATION TO OBTAIN LOANS.
Borrower shall provide Agent with documentation satisfactory
to Agent indicating the names of those employees of Borrower authorized by
Borrower to sign Notices of Borrowing and Competitive Bid Requests, and Agent
and Lenders shall be entitled to rely on such documentation until notified in
writing by Borrower of any change(s) of the persons so authorized. Agent shall
be entitled to act on the instructions of anyone identifying himself or herself
as one of the Persons authorized to execute a Notice of Borrowing or
Competitive Bid Request, and Borrower shall be bound thereby in the same manner
as if such Person were actually so authorized. Borrower agrees to indemnify,
defend and hold Lenders and Agent harmless from and against any and all
Liabilities and Costs which may arise or be created by the acceptance of
instructions in any Notice of Borrowing, unless caused by the gross negligence
of the Person to be indemnified.
2.3 LENDERS' ACCOUNTING.
2.3.1 Agent shall maintain a loan account (the "Loan
Account") on its books in which shall be recorded (i) the names and addresses
and the Commitments of Lenders and the names and addresses of Designated Bid
Lenders, and the principal amount of Loans owing to each Lender and Designated
Bid Lender from time to time, and (ii) all advances and repayments of principal
and payments of accrued interest under the Loans, as well as payments of the
Facility Fee, as provided in this Agreement, separately identifying Loans and
prepayments (or repayments, as the case may be) under the Swing Line and under
the Bid Loan Facility. All entries in the Loan Account shall be made in
accordance with Agent's customary accounting practices as in effect from time
to time. Monthly or at such other interval as is customary with Agent's
practice, Agent will render a statement of the Loan Account to Borrower and
will deliver a copy thereof to each Lender (for itself and for transmittal to
its Designated Bid Lender, if any). Each such statement shall be deemed
39
40
final, binding and conclusive upon Borrower in all respects as to all matters
reflected therein (absent manifest error), unless Borrower, within thirty (30)
days after the date such statement is mailed or otherwise delivered to
Borrower, delivers to Agent written notice of any objections which Borrower may
have to any such statement, or within ten (10) days after discovery by Borrower
of an error with respect to which Borrower had no knowledge and which could not
have been determined after reasonable inquiry during said 30-day period. In
that event, only those items expressly objected to in such notice shall be
deemed to be disputed by Borrower. In the event that any such objection cannot
be settled by Agent and Borrower within thirty (30) days after Agent receives
notice thereof from Borrower, Agent shall notify all Lenders of such objection.
Notwithstanding the foregoing, Agent's entries in the Loan Account evidencing
Loans and other financial accommodations made from time to time shall be final,
binding and conclusive upon Borrower (absent manifest error) as to the
existence and amount of the Obligations recorded in the Loan Account.
2.3.2 From time to time, Borrower, Lenders and Designated
Bid Lenders shall furnish such information to Agent as Agent may reasonably
request relating to the Bid Loans, including the amounts, interest rates, dates
of Borrowing and last days of the applicable Bid Loan Interest Periods, for the
purpose of enabling Agent to allocate amounts received from Borrower to payment
of amounts due and owing under the Loan Documents.
2.4 INTEREST ON THE LOANS.
2.4.1 BASE RATE LOANS. Subject to Section 2.4.5, all Base
Rate Loans shall bear interest on the average daily unpaid principal amount
thereof from the date made until paid in full at a fluctuating rate per annum
equal to the sum of the Base Rate plus the Applicable Base Rate Margin. Base
Rate Loans shall be made in minimum amounts of One Million Dollars ($1,000,000)
or an integral multiple of One Hundred Thousand ($100,000) in excess thereof.
2.4.2 LIBOR LOANS. Subject to Sections 2.4.5 and 2.4.8,
all LIBOR Loans shall bear interest on the unpaid principal amount thereof
during the Interest Period applicable thereto at a rate per annum equal to the
sum of LIBOR for such Interest Period plus the Applicable LIBOR Rate Margin.
LIBOR Loans shall be in tranches of One Million Dollars ($1,000,000) or One
Hundred Thousand Dollar ($100,000) increments in excess thereof. Subject to
the limitation on the total number of Interest Periods that may be outstanding
at any time set forth in Section 2.1.1(b), no more than eight (8) LIBOR Loan
tranches shall be outstanding at any one time. Notwithstanding anything to the
contrary contained herein and subject to the Default Interest provisions
contained in Section 2.4.5, if an Event of Default occurs and as a result
thereof the Commitments are terminated, all LIBOR Loans will convert to Base
Rate Loans upon the expiration of the applicable Interest Periods therefor or
the date all Loans become due, whichever occurs first.
40
41
2.4.3 BID LOANS. Subject to Section 2.4.5 (and, in the
case of LIBOR Bid Loans, Section 2.4.8), each Bid Loan shall bear interest,
from and including the date it is made to but excluding the last day of the Bid
Loan Interest Period applicable thereto, at a rate per annum equal to (A) in
the case of an Absolute Rate Bid Loan, the Absolute Rate specified by the
Lender making (or whose Designated Bid Lender makes) such Absolute Rate Bid
Loan in its accepted Competitive Bid, and (B) in the case of a LIBOR Bid Loan,
the sum of (1) the LIBOR Bid Margin specified by the Lender making (or whose
Designated Bid Lender makes) such LIBOR Bid Loan in its accepted Competitive
Bid, plus (2) LIBOR. Any portion of the principal of a Bid Loan that is not
paid when due shall thereafter bear interest, from and including the date it
was due to but not including the date it is paid, at a rate that is five
percent (5%) per annum in excess of the non-default rate applicable to Base
Rate Loans.
2.4.4 INTEREST PAYMENTS. Subject to Section 2.4.5,
interest accrued on all Loans shall be payable by Borrower, in the manner
provided in Section 2.6.2, in arrears on (a) the first Business Day of the
first calendar month following the Closing Date, (b) the first Business Day of
each succeeding calendar month thereafter, and (c) (i) if the Termination Date
occurs by reason of an event other than a Voluntary Termination, on the
Termination Date, or (ii) in the case of a Voluntary Termination: (A) with
respect to the Committed Loans, on the Termination Date, and (B) with respect
to any Bid Loans that remain outstanding after the Termination Date, on the
first Business Day of each succeeding calendar month thereafter and on the last
day of the Bid Loan Interest Period applicable thereto (or upon acceleration
thereof pursuant to Section 10.2.1).
2.4.5 INITIAL LOANS; DEFAULT INTEREST.
(a) Notwithstanding the rates of interest
specified in Sections 2.4.1 and 2.4.2 (but subject to Section
2.4.5(b)), the Loans made on the initial Funding Date shall bear
interest as follows:
(i) as to $19,000,000, for an Interest
Period ending on August 27, 1997, as a LIBOR Loan at a per
annum rate equal to 6.61%;
(ii) as to $10,000,000, for an Interest
Period ending on August 21, 1997, as a LIBOR Loan at a per
annum rate equal to 6.49%; and
(iii) as to any portion of the Loans made
on the initial Funding Date in excess of of $29,000,000, at a
rate or rates determined in accordance with the other
provisions of this Agreement.
(b) Notwithstanding the rates of interest
specified in Sections 2.4.1, 2.4.2 and 2.4.3 and the payment dates
specified in Section 2.4.4, effective immediately upon the occurrence
and during the continuance of any Event of
41
42
Default, the principal balance of each Loan then outstanding and, to
the extent permitted by applicable law, any interest payments on the
Loans not paid when due, shall bear interest payable upon demand at a
rate which is five percent (5%) per annum in excess of the rate(s) of
interest otherwise payable from time to time under this Agreement.
All other amounts due Agent, Lenders or Designated Bid Lenders
(whether directly or for reimbursement) under this Agreement or any of
the other Loan Documents if not paid when due, or if no due date is
expressed, if not paid within ten (10) days after demand, shall bear
interest from and after such due date or demand, as the case may be,
at a rate that is five percent (5%) per annum in excess of the
non-default rate applicable to Base Rate Loans.
2.4.6 COMPUTATION OF INTEREST. Interest shall be computed
on the basis of the actual number of days elapsed in the period during which
interest or fees accrue and a year of three hundred sixty (360) days. In
computing interest on any Loan, the date of the making of the Loan shall be
included and the date of payment shall be excluded; provided, however, that if
a Loan is repaid on the same day on which it is made, one (1) day's interest
shall be paid on that Loan. Notwithstanding any provision in this Section 2.4,
interest in respect of any Loan shall not exceed the maximum rate permitted by
applicable law. Changes in the Applicable Base Rate Margin or the Applicable
LIBOR Rate Margin shall take effect as of the date on which the condition set
forth in the relevant clause of the definition of each such term is satisfied.
2.4.7 CHANGES; LEGAL RESTRICTIONS. In the event that after
the Closing Date (i) the adoption of or any change in any law, treaty, rule,
regulation, guideline or determination of a court or Governmental Authority or
any change in the interpretation or application thereof by a court or
Governmental Authority, or (ii) compliance by Agent or any Lender with any
request or directive made or issued after the Closing Date (whether or not
having the force of law and whether or not the failure to comply therewith
would be unlawful) from any central bank or other Governmental Authority or
quasi-governmental authority:
(a) subjects Agent or any Lender to any tax, duty
or other charge of any kind with respect to the Committed Facility,
the Bid Loan Facility, this Agreement or any of the other Loan
Documents or the Loans, or changes the basis of taxation of payments
to Agent or such Lender of principal, fees, interest or any other
amount payable hereunder, except for net income, gross receipts, gross
profits or franchise taxes imposed by any jurisdiction and not
specifically based upon loan transactions (all such non-excepted
taxes, duties and other charges being hereinafter referred to as
"Lender Taxes");
(b) imposes, modifies or holds applicable, in the
determination of Agent or any Lender, any reserve, special deposit,
compulsory loan, FDIC
42
43
insurance, capital allocation or similar requirement (other than a
requirement of the type described in Section 2.7) against assets held
by, or deposits or other liabilities in or for the account of,
advances or loans by, or other credit extended by, or any other
acquisition of funds by, Agent or such Lender or any applicable
lending office (except to the extent that the reserve and FDIC
insurance requirements are reflected in the "Base Rate" or in
determining LIBOR); or
(c) imposes on Agent or any Lender any other
condition (other than one described in Section 2.7) materially more
burdensome in nature, extent or consequence than those in existence as
of the Closing Date,
and the result of any of the foregoing is to increase the cost to Agent or any
Lender of making, renewing, maintaining or participating in the Loans or to
reduce any amount receivable thereunder; then, in any such case, Borrower shall
promptly pay to Agent or such Lender, as applicable, upon demand, such amount
or amounts (based upon a reasonable allocation thereof by Agent or such Lender
to the financing transactions contemplated by this Agreement and affected by
this Section 2.4.7) as may be necessary to compensate Agent or such Lender for
any such additional cost incurred or reduced amounts received; provided,
however, that if the payment of such compensation may not be legally made
whether by modification of the applicable interest rate or otherwise, then
Lenders shall have no further obligation to make Loans that cause Agent or any
Lender to incur such increased cost, and all affected Loans shall become
immediately due and payable by Borrower. Agent or such Lender shall deliver to
Borrower and in the case of a delivery by Lender, such Lender shall also
deliver to Agent, a written statement of the claimed additional costs incurred
or reduced amounts received and the basis therefor as soon as reasonably
practicable after such Lender obtains knowledge thereof. If Agent or any
Lender subsequently recovers any amount of Lender Taxes previously paid by
Borrower pursuant to this Section 2.4.7, whether before or after termination of
this Agreement, then, upon receipt of good funds with respect to such recovery,
Agent or such Lender will refund such amount to Borrower if no Event of Default
or Unmatured Event of Default then exists or, if an Event of Default or
Unmatured Event of Default then exists, such amount will be credited to the
Obligations in the manner determined by Agent or such Lender.
2.4.8 CERTAIN PROVISIONS REGARDING LIBOR LOANS AND BID
LOANS.
(a) LIBOR LENDING UNLAWFUL. If any Lender or
Designated Bid Lender shall determine (which determination shall, upon
notice thereof to Borrower and Agent, be conclusive and binding on the
parties hereto) that the introduction of or any change in or in the
interpretation of any law makes it unlawful, or any central bank or
other Governmental Authority asserts that it is unlawful, for such
Lender or Designated Bid Lender to make or maintain any Loan as a
LIBOR Loan or a LIBOR Bid Loan, as the case may be, (i) the
obligations of
43
44
such Lenders or Designated Bid Lenders to make or maintain any Loans
as LIBOR Loans or LIBOR Bid Loans shall, upon such determination,
forthwith be suspended until such Lender or Designated Bid Lender
shall notify Agent that the circumstances causing such suspension no
longer exist, and (ii) if required by such law or assertion, the LIBOR
Loans and LIBOR Bid Loans of such Lender or Designated Bid Lender
shall automatically convert into Base Rate Loans (which, in the case
of a LIBOR Bid Loan so converted, shall nevertheless be due and
payable in full on the last day of the relevant Bid Loan Interest
Period).
(b) DEPOSITS UNAVAILABLE. If Agent shall have
determined in good faith that adequate means do not exist for
ascertaining the interest rate applicable hereunder to LIBOR Loans or
LIBOR Bid Loans, then, upon notice from Agent to Borrower the
obligations of all Lenders and Designated Bid Lenders to make or
maintain Loans as LIBOR Loans or LIBOR Bid Loans, as the case may be,
shall forthwith be suspended until Agent shall notify Borrower that
the circumstances causing such suspension no longer exist. Agent will
give such notice when it determines, in good faith, that such
circumstances no longer exist; provided, however, that Agent shall not
have any liability to any Person with respect to any delay in giving
such notice.
(c) FIXED RATE PRICE ADJUSTMENT. Borrower
acknowledges that prepayment or acceleration of a LIBOR Loan or a Bid
Loan during an Interest Period shall result in the affected Lenders
and Designated Bid Lenders incurring additional costs, expenses and/or
liabilities and that it is extremely difficult and impractical to
ascertain the extent of such costs, expenses and/or liabilities. (For
all purposes of this subparagraph (c), any Loan not being made as a
LIBOR Loan or a Bid Loan in accordance with the Notice of Borrowing or
acceptance of a Competitive Bid therefor, as a result of Borrower's
cancellation thereof, shall be treated as if such LIBOR Loan or Bid
Loan, as the case may be, had been made by the Lender submitting such
Competitive Bid (and not by its Designated Bid Lender) and had been
prepaid.) Therefore, on the date a LIBOR Loan or Bid Loan is prepaid
or the date all sums payable hereunder become due and payable, by
acceleration or otherwise ("Price Adjustment Date"), Borrower will pay
to Agent, for the account of each affected Lender or Designated Bid
Lender (in addition to all other sums then owing), an amount ("Fixed
Rate Price Adjustment") equal to:
(i) in the case of a LIBOR Loan or a
LIBOR Bid Loan, the then present value of (A) the amount of
interest that would have accrued on the LIBOR Loan or LIBOR
Bid Loan for the remainder of the Interest Period at the rate
applicable to such LIBOR Loan or LIBOR Bid Loan, less (B) the
amount of interest that would accrue on the same Loan for the
same period if LIBOR were set on the Price Adjustment Date,
calculating the
44
45
present value by using as a discount rate LIBOR quoted on the
Price Adjustment Date; or
(ii) in the case of an Absolute Rate Bid
Loan, the sum of such losses and expenses as the Lender or
Designated Bid Lender who made such Absolute Rate Bid Loan may
reasonably incur by reason of such prepayment, including
without limitation any losses or expenses incurred in
obtaining, liquidating or employing deposits from third
parties, but excluding loss of margin for the period after
such prepayment.
(d) Upon the written notice to Borrower from
Agent, Borrower shall immediately pay to Agent, for the account of the
affected Lenders and Designated Bid Lenders, the Fixed Rate Price
Adjustment payable with respect to each affected Loan. Such written
notice (which shall include calculations in reasonable detail) shall,
in the absence of manifest error, be conclusive and binding on the
parties hereto.
(e) Borrower understands, agrees and acknowledges
the following: (i) no Lender or Designated Bid Lender has any
obligation to purchase, sell and/or match funds in connection with the
use of LIBOR as a basis for calculating the rate of interest on a
LIBOR Loan or LIBOR Bid Loan or a Fixed Rate Price Adjustment; (ii)
LIBOR is used merely as a reference in determining such rate and/or
Fixed Rate Price Adjustment; and (iii) Borrower has accepted LIBOR as
a reasonable and fair basis for calculating such rate and/or a Fixed
Rate Price Adjustment. Borrower further agrees to pay the Fixed Rate
Price Adjustment and Lender Taxes, if any, whether or not a Lender or
Designated Bid Lender elects to purchase, sell and/or match funds.
2.4.9 WITHHOLDING TAX EXEMPTION. At least five (5)
Business Days prior to the first day on which interest or fees are payable
hereunder for the account of any Lender, each Lender that is not incorporated
under the laws of the United States of America, or a state thereof, agrees that
it will deliver to Agent and Borrower two (2) duly completed copies of United
States Internal Revenue Service Form 1001 or Form 4224, certifying in either
case that such Lender is entitled to
45
46
receive payments under this Agreement without deduction or withholding of any
United States federal income taxes. Each Lender which so delivers a Form 1001
or Form 4224 further undertakes to deliver to Agent and Borrower two (2)
additional copies of such form (or any applicable successor form) on or before
the date that such form expires (currently, three (3) successive calendar years
for Form 1001 and one (1) calendar year for Form 4224) or becomes obsolete or
after the occurrence of any event requiring a change in the most recent forms
so delivered by it, and such amendments thereto or extensions or renewals
thereof as may be reasonably requested by Agent or Borrower, in each case
certifying that such Lender is entitled to receive payments under this
Agreement without deduction or withholding of any United States federal income
taxes, unless an event (including without limitation any change in treaty, law
or regulation) has occurred prior to the date on which any such delivery would
otherwise be required which renders all such forms inapplicable or which would
prevent such Lender from duly completing and delivering any such form with
respect to it and such Lender advises Agent that it is not capable of receiving
payments without any deduction or withholding of United States federal income
taxes. If any Lender cannot deliver such form, then Borrower may withhold from
such payments such amounts as are required by the Internal Revenue Code.
2.5 FEES.
2.5.1 FACILITY FEE. From and after the Closing Date and
until the Obligations are paid in full and this Agreement is terminated or, if
sooner, the date the Commitments terminate, Borrower shall pay to Agent, for
the account of each Lender, a fee (the "Facility Fee") in an annualized amount
equal to the Applicable Facility Fee Percentage of the Commitment. The
Facility Fee shall be payable, in the manner provided in Section 2.6.2, in
arrears, on the first Business Day in each Fiscal Quarter in an amount equal to
one-quarter of the Applicable Facility Fee Percentage of the Commitment as of
the day immediately preceding the date on which such payment is due, beginning
with the first Fiscal Quarter after the Closing Date, and on the date of
payment in full of all Obligations with respect to Committed Loans to Lenders
under Section 2.1.5 or of all Obligations to a Lender pursuant to Section 2.9,
with the Facility Fee to be prorated to the date of such payment in the case of
any partial quarter.
2.5.2 AGENCY FEES. Borrower shall pay Agent such fees as
are provided for in the agency fee agreement between Agent and Borrower, as in
existence from time to time.
2.5.3 PAYMENT OF FEES. The fees described in Section
4.1.13 and in this Section 2.5 represent compensation for services rendered and
to be rendered separate and apart from the lending of money or the provision of
credit and do not constitute compensation for the use, detention or forbearance
of money, and the obligation of Borrower to pay the fees described herein shall
be in addition to, and not in lieu of, the obligation of Borrower to pay
interest, other fees and expenses otherwise described in this Agreement. All
fees shall be payable when due in immediately available funds and shall be
non-refundable when paid. If Borrower fails to make any payment of fees or
expenses specified or referred to in this Agreement due to Agent, Lenders or
Designated Bid Lenders, including without limitation (in each case, to the
extent applicable) those referred to in this Section 2.5, in Section 12.1, or
otherwise under this Agreement or any separate fee agreement between Borrower
and Agent or any Lender relating to this Agreement, when due, the amount due
shall bear interest until paid at the Base Rate and, after ten (10) days at
46
47
the rate specified in Section 2.4.5 (but not to exceed the maximum rate
permitted by applicable law), and shall constitute part of the Obligations.
The Facility Fee (for partial quarters) and the fees referred to in Section
2.5.2 which are expressed as a per annum charge shall be calculated on the
basis of the actual number of days elapsed in a three hundred sixty (360) day
year.
2.6 PAYMENTS.
2.6.1 VOLUNTARY PREPAYMENTS; REDUCTION IN FACILITY.
(a) Borrower may, upon not less than three (3)
Business Days prior written notice to Agent not later than 11:00 a.m.
(San Francisco time) on the date given, at any time and from time to
time, prepay any Committed Loans in whole or in part; provided that,
notwithstanding the foregoing, Borrower may, upon not less than one
(1) Business Day's prior written notice to Agent not later than 11:00
a.m. (San Francisco time) on the date given, at any time and from time
to time, prepay Swing Line Borrowings in whole or in part. Any notice
of prepayment given to Agent under this Section 2.6.1 shall specify
the date of prepayment and the aggregate principal amount of the
prepayment, and, in the event Borrower wishes to have all or a portion
of such prepayment applied in reduction of the then outstanding
principal balance under the Swing Line, the amount of such prepayment
which should be so applied. In the event of a prepayment of LIBOR
Loans, other than in connection with the prepayment of all accrued
Obligations in respect of the Committed Loans and termination of all
Commitments pursuant to a notice delivered under this Section 2.6.1(a)
within thirty (30) days after a demand by Agent or any Lender for
payment or reimbursement pursuant to Section 2.7, Borrower shall
concurrently pay any Fixed Rate Price Adjustment payable in respect
thereof. Agent shall provide to each Lender a confirming copy of such
notice on the same Business Day such notice is received.
(b) BID LOANS. Borrower shall have no right to
pay all or any portion of any Bid Loan prior to the last day of the
Bid Loan Interest Period applicable thereto.
2.6.2 MANNER AND TIME OF PAYMENT. All payments of
principal, interest and fees hereunder payable to Agent, Lenders or Designated
Bid Lenders shall be made without condition or reservation of right and free of
set-off or counterclaim, in Dollars and by wire transfer (pursuant to Agent's
written wire transfer instructions) of immediately available funds, to Agent,
for the account of each Lender and Designated Bid Lender, not later than 11:00
a.m. (San Francisco time) on the date due; and funds received by Agent after
that time and date shall be deemed to have been paid on the next succeeding
Business Day. In order to assure timely payment of interest on the Loans and
fees pursuant to
47
48
Section 2.5, Borrower hereby irrevocably authorizes Agent to directly debit
Borrower's demand deposit account with Agent (Account No. 4233-040799) for
payment when due of all such interest and fees payable to Lenders and
Designated Bid Lenders. Written notice of the amount and purpose of any such
direct debit shall be given to Borrower by Agent not less than two (2) Business
Days prior to its effective date; provided, however, that Agent's failure to
give such notice shall not affect the validity of, or Borrower's authorization
of, such debit. In the event any direct debit hereunder is returned for
insufficient funds, Borrower shall, upon notice from Agent, immediately deposit
sufficient funds into said account to pay all interest, fees and other related
charges due and owing to Lenders and Designated Bid Lenders; provided, however,
that any such insufficiency of funds in said account shall not excuse or delay
the timely payment by Borrower of the full amount of such interest, fees and
related charges or relieve Borrower of its obligations under Section 2.4.5 in
respect of any such insufficiency. The statement of the Loan Account provided
by Agent to Borrower shall show the amounts and dates of such direct debits.
2.6.3 PAYMENTS ON NON-BUSINESS DAYS. Whenever any payment
to be made by Borrower hereunder shall be stated to be due on a day which is
not a Business Day, payments shall be made on the next succeeding Business Day
and such extension of time shall be included in the computation of the payment
of interest hereunder and of any of the fees specified in Section 2.5, as the
case may be.
2.7 INCREASED CAPITAL. If either (i) the introduction of or any
change in or in the interpretation of any law or regulation or (ii) compliance
by Agent or any Lender with any guideline or request from any central bank or
other Governmental Authority (whether or not having the force of law and
whether or not the failure to comply therewith would be unlawful) made or
issued after the Closing Date affects or would affect the amount of capital
required or expected to be maintained by Agent or such Lender or any
corporation controlling Agent or such Lender, and Agent or such Lender
determines that the amount of such capital is increased by or based upon the
existence of Agent's obligations hereunder or such Lender's Commitment, then,
upon demand by Agent or such Lender, Borrower shall immediately pay to Agent or
such Lender, from time to time as specified by Agent or such Lender, additional
amounts sufficient to compensate Agent or such Lender in the light of such
circumstances, to the extent that Agent or such Lender determines such increase
in capital to be allocable to the existence of Agent's obligations hereunder or
such Lender's Commitment; provided, however, that (i) neither Agent nor any
Lender may claim under this Section 2.7 any such additional amount attributable
to any period preceding the date that is ninety (90) days prior to the date of
its demand, and (ii) before making any such demand, Agent, and each Lender,
agrees to use reasonable efforts (consistent with its internal policy and legal
and regulatory restrictions) to designate a different lending office as its
lending office for purposes of the Loans and its Commitment, if the making of
such a designation (1) would avoid the need for, or reduce the amount of, such
demand and (2) would not, in the reasonable judgment of Agent or such Lender,
as the case may be, be
48
49
otherwise disadvantageous to it; and provided further that neither Agent nor
any Lender may claim under this Section 2.7 any such amount to the extent that
it is not, at the time such claim is asserted, such Person's general practice
to make claims for such amounts in similar circumstances, under comparable
provisions of credit agreements, if any, with similarly situated borrowers. A
certificate as to such amounts submitted to Borrower by Agent or such Lender
shall, in the absence of manifest error, be conclusive and binding for all
purposes.
2.8 NOTICE OF INCREASED COSTS. Each Lender and Designated Bid
Lender agrees that, as promptly as reasonably practicable after it becomes
aware of the occurrence of an event or the existence of a condition which would
cause it to be affected by any of the events or conditions described in Section
2.4.7 or 2.4.8 or Section 2.7 (in each case, to the extent applicable), it will
notify Borrower, and provide a copy of such notice to Agent, of such event and
the possible effects thereof, provided that the failure to provide such notice
shall not affect such Lender's or Designated Bid Lender's rights to
reimbursement provided for herein.
2.9 OPTION TO REPLACE LENDERS. If any Lender shall:
2.9.1 fail or refuse to fund its portion of any Loan
(including, in the case of any Designating Lender, any Bid Loan not funded by
its Designated Bid Lender) for any reason other than the failure of Borrower to
satisfy the conditions precedent to such Loan hereunder and such failure
continues for two (2) Business Days after notice from Borrower to such Lender
that Borrower intends to exercise its rights hereunder;
2.9.2 make any demand for payment or reimbursement pursuant
to Section 2.4.7; or
2.9.3 make any demand for payment or reimbursement pursuant
to Section 2.7,
then, in any of the foregoing cases, provided that (i) there does not then
exist any Unmatured Event of Default or Event of Default and (ii) the
circumstances resulting in such demand for payment or reimbursement are not
applicable to all Lenders, Borrower may cause the Commitment of such Lender to
be assumed by a replacement lender, in whole but not in part, by (1) giving
such Lender and Agent not less than three (3) Business Days' prior written
notice thereof, which notice shall be irrevocable and effective only upon
receipt thereof by such Lender and Agent and shall specify the effective date
of such assumption, (2) pursuant to the provisions of Section 11.12, bringing
in a new Lender, or obtaining the agreement of one or more existing Lenders, to
assume the entire amount of the Commitment of the Lender whose Commitment is
being assumed and to purchase all outstanding Loans, including Bid Loans, owed
to such Lender (and, for purposes of such
49
50
transaction, such Lender's Bid Loans may be assigned to such new Lender, or to
such existing Lender(s), notwithstanding any provision to the contrary
contained in any Loan Document), on the effective date of such assumption, (3)
paying to such Lender (and there shall become due and payable) on such date all
Obligations, other than in respect of principal or interest, owed to such
Lender, including, without limitation, amounts owing under (A) Sections 2.4.7,
2.4.8(d), Section 2.4.8(e), 2.5 and 2.7, and (B) except in the case of a demand
for payment or reimbursement pursuant to Section 2.7, Section 2.4.8(c), and (4)
if the Lender whose Commitment is being so assumed is also Agent, causing such
Agent to be replaced by a new agent pursuant to the provisions of Section 11.9.
Upon the satisfaction of all of the foregoing conditions, such Lender shall
cease to be a "Lender" for purposes of this Agreement, provided that Borrower
shall continue to be obligated to such Lender under Sections 12.1 and 12.2 with
respect to or on account of unpaid, unliquidated, unknown or similar claims or
liabilities accruing prior to such Lender ceasing to be a "Lender" for purposes
of this Agreement.
ARTICLE III
UNENCUMBERED POOL PROPERTIES
3.1 DESIGNATION/ACCEPTANCE OF UNENCUMBERED POOL PROPERTIES.
3.1.1 INITIAL UNENCUMBERED POOL PROPERTIES. Subject to
compliance with the terms and conditions of Section 4.1, Lenders have accepted
the properties listed on Schedule 1 as of the Closing Date as Unencumbered Pool
Properties.
3.1.2 DESIGNATION OF CERTAIN PROPERTIES AS UNENCUMBERED
POOL PROPERTIES.
(a) Borrower may from time to time designate an
additional property as an Unencumbered Pool Property by delivering to
Agent a written notice to that effect, together with a certification,
in substantially the form of Exhibit J, identifying the property and
certifying that each of the following criteria (the "UPP Eligibility
Criteria") is true and correct with respect to such property (such
certification, a "UPP Eligibility Certification"):
(i) the property is wholly-owned by
Borrower, a UPP Subpartnership or a Partnership that has
previously been approved by the Majority Lenders to become a
"UPP Subpartnership", and that neither such property, nor any
interest in the Person owning such Property (other than
interests held by Third Party Partners), is subject to (A) any
Lien (other than Permitted Liens) or (B) if such UPP
Subpartnership is (or is to be) a Guarantor Subpartnership,
any Negative Pledge;
50
51
(ii) either (A) the property is improved
with one or more completed (1) suburban office buildings or
(2) industrial buildings, or (3) buildings of such other type
as Lenders may from time to time unanimously approve for
purposes of the UPP Eligibility Criteria (the "Approved
Property Types"), or (B) (1) the Individual UPP Value of the
property, when added to the aggregate Individual UPP Values of
all Special UPPs of types other than the Approved Property
Types, would not exceed twenty-five percent (25%) of the
Unencumbered Pool Value, and (2) the Individual UPP Value of
the property would not exceed ten percent (10%) of the
Unencumbered Pool Value (in each case, determined as if such
property were an Unencumbered Pool Property) (and specifying
which of the preceding clauses (A) and (B) is applicable);
(iii) if such property were an
Unencumbered Pool Property: (A) the Aggregate Occupancy Rate,
as of the date of such UPP Eligibility Certification, would
not be less than ninety percent (90%); (B) the aggregate
Individual UPP Values of the Unencumbered Pool Properties
owned by UPP Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships), as of the date
of such UPP Eligibility Certification, would not exceed ten
percent (10%) of the Unencumbered Pool Value; and (C) the
aggregate Individual UPP Values of the Unencumbered Pool
Properties owned by UPP Subpartnerships that are not Guarantor
Subpartnerships, as of the date of such UPP Eligibility
Certification, would not exceed five percent (5%) of the
Unencumbered Pool Value.
(iv) either (A) the property is located
in California, Oregon or Washington, in Boise, Idaho or in
such other market as Lenders may from time to time unanimously
approve for purposes of the UPP Eligibility Criteria (the
"Approved Markets"), or (B) the Individual UPP Value of the
property, when added to the aggregate Individual UPP Values of
all Special UPPs located outside the Approved Markets, would
not exceed ten percent (10%) of the Unencumbered Pool Value
(determined as if such property were an Unencumbered Pool
Property) (and specifying which of the preceding clauses (A)
and (B) is applicable); and
(v) (A) (1) Borrower has obtained both a
"Phase I" environmental assessment and a structural/physical
report with respect to such property, in each case, prepared
as of a reasonably current (identified) date by a consultant
of good repute within the region in which such property is
located and believed by Borrower to be competent (and
identifying the consultant), (B) Borrower has reviewed each
such report and believes it reasonable to rely upon such
report, and (C) (1) in the case of an
51
52
environmental assessment, such assessment does not (a)
identify any contamination or potential contamination that has
resulted in, or that could reasonably be anticipated to result
in, a material adverse effect upon the condition (financial or
otherwise), fair market value, net operating income or
prospects of such property, or (2) recommend that any further
material investigation be undertaken, or (3) in the case of a
structural/physical report, such report does not identify any
material defect in construction or physical condition of the
property, material variance from any available plans and
specifications for the property or material violation of
applicable law, or other item of material concern with respect
to the structural integrity or physical condition of the
property.
Subject to Section 3.1.2(b) and to execution and delivery of such
items or documents as may be appropriate under the circumstances
(e.g., if the property is owned by a Partnership that has not
previously executed and delivered a Guaranty, the execution and
delivery of a Guaranty by such Partnership), Borrower's designation of
a property as an Unencumbered Pool Property in accordance with the
foregoing provisions of this Section 3.1.2 shall become effective on
the twentieth (20th) day following delivery of the relevant UPP
Eligibility Certification to Agent.
(b) Promptly following receipt by Agent of a UPP
Eligibility Certification with respect to a proposed Unencumbered Pool
Property, Agent shall transmit a copy thereof to each Lender, and, at
the request of any Lender made within twenty (20) days after Agent's
receipt of the UPP Eligibility Certification, shall request of
Borrower any or all of the information relating to such property
listed in Section 3.1.3 that may be relevant to determining the
accuracy of the UPP Eligibility Certification. If no such request is
made during such twenty-day period, then Borrower's designation of
such property as an Unencumbered Pool Property shall become effective
in accordance with the last sentence of Section 3.1.2(a). If any such
request is made:
(i) Borrower shall deliver the requested
information to Agent, and Agent shall promptly distribute the
information to the Lender requesting same. If, within twenty
(20) days after Agent's receipt of the requested information,
no notice has been received by Agent from any Lender
challenging the proposed designation on the grounds that the
property does not satisfy the UPP Eligibility Criteria, then
(subject to execution and delivery of such items or documents
as may be appropriate under the circumstances) the designation
of such property as an Unencumbered Pool Property shall become
effective at the end of such twenty-day period.
52
53
(ii) If, based on its review of such
information, any Lender concludes that the proposed property
does not satisfy each of the UPP Eligibility Criteria: (A)
such Lender shall notify Agent within twenty (20) days after
Agent's receipt of such information, identifying with
reasonable specificity the information giving rise to such
conclusion, and (B) Agent shall notify Borrower and each
Lender.
(iii) Agent shall, as expeditiously as
possible, review the information identified by such Lender as
the basis for its challenge to such property's satisfaction of
the UPP Eligibility Criteria. If, following consultation with
Agent and Borrower, such Lender is still of the opinion that
such property does not satisfy the UPP Eligibility Criteria,
Agent shall so notify Borrower and each Lender, and the
designation of such property as an Unencumbered Pool Property
shall not become effective. If the assertion of ineligibility
is based on the inaccuracy of any of clauses (ii), (iv) or (v)
of the UPP Eligibility Criteria (provided that the proposed
property must be a completed improvement of one of the types
included in the definition of "Unencumbered Pool Property",
and the acceptance of such property as an Unencumbered Pool
Property shall not cause any Unmatured Event of Default or
Event of Default to exist), Borrower may, at its option, elect
to request, pursuant to Section 3.1.3, that such property be
accepted as an Unencumbered Pool Property notwithstanding the
property's failure to satisfy the UPP Eligibility Criteria, in
which case the provisions of Section 3.1.3 shall apply to the
acceptance of such property as an Unencumbered Pool Property,
except that Borrower need only provide such additional
information regarding such property as Agent or any Lender
(through Agent) may request.
(c) Borrower may, in contemplation of its
designation for inclusion in the Unencumbered Property Pool of
property that is to be owned by a Partnership that has not previously
qualified as a UPP Subpartnership hereunder, deliver to Agent copies
of the Partnership Agreement of such Partnership and of such other
information regarding such Partnership as may be reasonably requested
by Agent for submittal to the Lenders and possible approval of the
Majority Lenders.
(d) If at any time following the designation of a
property as an Unencumbered Pool Property in accordance with this
Section 3.1.2 Agent, or Majority Lenders, shall determine that such
property is not in fact "Unencumbered Property" within the meaning of
that term set forth in Section 1.1, then, in addition to any other
consequences of such determination that may arise under the Loan
Documents, such property shall cease to constitute an "Unencumbered
Pool Property".
53
54
(e) Without limiting in any manner the general
application of Article XI to the performance of Agent's duties in
respect of the Loan Documents, Lenders agree that (i) Agent shall have
no responsibility, as Agent, to request additional information with
respect to any property for which Borrower submits a UPP Eligibility
Certification or (except to the extent expressly set forth above)
otherwise to make any determination regarding the satisfaction of the
UPP Eligibility Criteria with respect to any property; (ii) Agent's
performance of its duties under this Section 3.1.2 shall be subject in
all respects to the provisions of Article XI; and (iii) Agent shall be
entitled to all of the rights, protections and benefits of Article XI
with respect to its performance of its duties under this Section
3.1.2.
3.1.3 ACCEPTANCE OF CERTAIN UNENCUMBERED POOL PROPERTIES.
If Borrower desires that Lenders accept as an Unencumbered Pool Property (but
not as a Special UPP) (i) an additional property that does not satisfy the UPP
Eligibility Criteria, or that, if designated as an Unencumbered Pool Property
pursuant to Section 3.1.2, would be a Special UPP, or (ii) an Unencumbered Pool
Property that is currently a Special UPP, Borrower shall so notify Agent, and
Agent shall promptly notify each other Lender. In the case of a request that
an existing Special UPP be accepted as an Unencumbered Pool Property that is no
longer a Special UPP, Borrower shall deliver to Agent such information as may
be reasonably requested by Agent or any Lender in order to evaluate Borrower's
request. In the case of property other than an existing Special UPP, such
additional property will be evaluated by Lenders as a potential Unencumbered
Pool Property upon Borrowers delivery to Agent of such of the following as the
Agent may request in writing:
(a) A current operating statement for such
property audited or certified by Borrower as being true and correct in
all material respects and prepared in accordance with GAAP and
comparative operating statements (in the general form of the Quarterly
Operating Reports) for the current period and for the previous two (2)
Fiscal Years; provided, however, that, if Borrower shall have owned
such property for less than the period to be covered by such operating
statements, then the audit and certification requirements shall extend
only to the period of ownership by Borrower, so long as Borrower
provides operating statements prepared and certified by the former
owner(s) for the remainder of the period required hereunder;
(b) A current rent roll for such property and a
three (3) year operating and occupancy history of such property in
form satisfactory to Agent, and certified by Borrower to be true and
correct;
(c) A copy of Borrower's most recent Owner's
Policy of Title Insurance and survey of such Property (if any);
54
55
(d) The most recent "Phase I" environmental
assessment of such property, and any additional environmental studies
or assessments in Borrower's possession or control that have been
performed with respect to such property (including, in the case of a
request for information pursuant to Section 3.1.2, the environmental
assessment of such property relied upon by Borrower for purposes of
its UPP Eligibility Certification);
(e) Copies of all Major Agreements affecting such
property;
(f) Copies of engineering, mechanical, structural
or maintenance studies performed with respect to such property
(including, in the case of a request for information pursuant to
Section 3.1.2, the structural/physical report on such property relied
upon by Borrower for purposes of its UPP Eligibility Certification);
(g) If the property is to be owned by a
Partnership that has not previously qualified as a UPP Subpartnership
hereunder, copies of the Partnership Agreement of such Partnership and
of such other information regarding such Partnership as may be
reasonably requested by Agent; and
(h) Such other information as may be reasonably
requested by Agent or any Lender in order to evaluate the potential
Unencumbered Pool Property.
Following receipt of the foregoing documents and information, Agent shall
review them as expeditiously as is reasonably practicable under the
circumstances. If, following such review, Agent is prepared to proceed with
acceptance of such property as an Unencumbered Pool Property that is not a
Special UPP (including, if applicable, the acceptance of any proposed UPP
Subpartnership as a UPP Subpartnership), Agent will promptly (i) so notify
Borrower, and (ii) submit the foregoing documents and information to the
Lenders, for approval by the Majority Lenders. Upon such approval by the
Majority Lenders, and upon execution and delivery of such items or documents as
may be appropriate under the circumstances, such property shall become an
Unencumbered Pool Property that is not a Special UPP.
3.2 TERMINATION OF DESIGNATION AS UNENCUMBERED POOL PROPERTY.
From time to time Borrower may request, upon prior written notice to Agent
(which shall promptly send a copy thereof to each other Lender), that an
Unencumbered Pool Property cease to be designated as such, which termination of
designation ("Termination of Designation") shall be consented to by Agent if
all of the following conditions are satisfied as of the date of such
Termination of Designation:
3.2.1 No Unmatured Event of Default or Event of Default has
occurred and is continuing; and
55
56
3.2.2 Borrower shall have delivered to Agent an
Unencumbered Pool Certificate demonstrating on a pro forma basis, and Agent
shall have determined, that after giving effect to such Termination of
Designation and any prepayment to be made and/or the acceptance of any property
as an additional or replacement Unencumbered Pool Property to be given
concurrently with such Termination of Designation: (i) the outstanding
principal balance of the Loans will not exceed the Loan Availability, (ii) the
aggregate Individual UPP Values of all Special UPPs of types other than the
Approved Property Types will not exceed twenty-five percent (25%) of the
Unencumbered Pool Value, (iii) no remaining Special UPP of a type other than
the Approved Property Types will have an Individual UPP Value in excess of ten
percent (10%) of the Unencumbered Pool Value, (iv) the aggregate Individual UPP
Values of all Special UPPs located outside the Approved Markets will not exceed
ten percent (10%) of the Unencumbered Pool Value, (v) the Aggregate Occupancy
Rate will not be less than ninety percent (90%), (vi) the aggregate Individual
UPP Values of the Unencumbered Pool Properties owned by UPP Subpartnerships
(whether or not such UPP Subpartnerships are Guarantor Subpartnerships) will
not exceed ten percent (10%) of the Unencumbered Pool Value, and (vii) the
aggregate Individual UPP Values of the Unencumbered Pool Properties owned by
UPP Subpartnerships that are not Guarantor Subpartnerships will not exceed five
percent (5%) of the Unencumbered Pool Value.
ARTICLE IV
CONDITIONS TO LOANS
4.1 CONDITIONS TO INITIAL DISBURSEMENT OF LOANS. The obligation
of Lenders to make the initial disbursement of the Loans (which Loans shall be
made as Committed Loans) shall be subject to satisfaction of each of the
following conditions precedent on or before the Closing Date (including, in the
case of Borrower, each Guarantor Subpartnership and the REIT, a certificate of
each such entity's Secretary or an officer comparable thereto (a "Secretary's
Certificate") with respect to authorization, incumbency and all organizational
documents):
4.1.1 BORROWER DOCUMENTS. Borrower shall have executed
and/or delivered to Agent each of the following, in form and substance
acceptable to Agent and each other Lender (for its own use and for transmittal
to its Designated Bid Lender, if any):
(a) this Agreement;
(b) the Loan Notes;
56
57
(c) Certified copy of Borrower's Limited
Partnership Agreement, as amended**
(d) Certified copy of Borrower's Certificate
of Limited Partnership (Form LP-1) from
the California Secretary of State*;
(e) Certificate of Status - California Limited
Partnership from the California Secretary
of State*;
(f) Evidence of qualification and good
standing of Borrower in Oregon, Washington
and Idaho:
(i) Certificate of
Existence/Authorization of
Borrower from the Secretary
of State of Washington*;
(ii) Certificate of Existence of
Borrower from the Secretary
of State of Oregon*;
(iii) Master Business Application and
License of Borrower dba Xxxxxxx
Properties Washington, L.P. in
Washington (showing tradename of
business) (as filed and
published), issued by the
Washington Department of
Licensing; and
(iv) Certificate of Corporate Status
of Borrower from the Secretary
of State of Idaho; and
(g) Funds Transfer Agreement (on the Agent's
standard form).
4.1.2 GUARANTOR SUBPARTNERSHIP DOCUMENTS. The Guarantor
Subpartnerships shall have executed and/or delivered to Agent each of the
following, in form and substance acceptable to Agent and each other Lender:
FROM EACH GUARANTOR SUBPARTNERSHIP:
(a) Guaranty;
WITH RESPECT TO EACH GUARANTOR SUBPARTNERSHIP:
-------------
* All good standing certificates and certified documents issued by any
Governmental Authority shall be dated as of a date within 30 days of
the Closing Date.
57
58
(b) Certified copy of such Person's agreement
of limited partnership, partnership
agreement or operating agreement, as the
case may be, in each case, as amended*;
(c) If such Guarantor Subpartnership is a
limited partnership: Certified copies of
its Certificate of Limited Partnership
(Form LP-1) and each amendment thereto
(Form LP-2), from the Secretary of State
of California*;
(d) If such Guarantor Subpartnership is a
limited liability company: Certified
copies of its Articles of Organization and
each amendment thereto, from the Secretary
of State of California*;
(e) If such Guarantor Subpartnership is a
limited partnership or a limited liability
company: Certificate of Status from the
Secretary of State of California*;
(f) If such Guarantor Subpartnership owns an
Unencumbered Pool Property located in any
state other than California: evidence of
its qualification and good standing in
such other state:
(i) Certificate of
Existence/Authorization (or its
equivalent) from the Secretary of
State of such state*; and
(ii) in the case of SP #177
Certificate of Registration
issued under prior name of SP
#177, Xxxxxxx-Xxxxxxx-Xxxxxxxxx
#177 (showing tradename of
business), issued by the
Washington Department of
Licensing, and Amended
Application for Registration
of a Foreign Limited
Partnership (showing name
change to SP #177), filed
with the Washington
Department of Licensing;
(g) Partnership Certificate (re: authorization
to execute guaranty); and
(h) Solvency Certificate; and
WITH RESPECT TO SWIP:
58
59
(i) Certified copy of SWIP's General
Partnership Agreement*.
4.1.3 REIT DOCUMENTS. The REIT shall have executed and/or
delivered to Agent each of the following, in form and substance acceptable to
Agent and each other Lender:
(a) Guaranty;
(b) Articles of Incorporation, as amended, of
the REIT, as certified by the Secretary
of State of Maryland*;
(c) By-laws of the REIT, as certified by the
Secretary of the REIT*;
(d) Good Standing Certificate for the REIT
from the Secretary of State of Maryland*;
(e) Evidence of qualification and good
standing of the REIT in California,
Oregon and Washington:
(i) Certificate of Status of Foreign
Corporation - California Secretary
of State*;
(ii) Letter from the California
Franchise Tax Board regarding
status of the REIT in California*;
(iii) Certificate of
Existence/Authorization of the
REIT from the Washington Secretary
of State*;
(iv) Certificate of Existence of the
REIT from the Oregon Secretary
of State*;
(v) Master Business License (showing
tradename of business) issued
by the Washington Department of
Licensing; and
(vi) Letter from the Oregon Department
of Revenue regarding status of
taxes paid*;
(f) Corporate resolutions of the REIT, as
certified by the Secretary of the REIT*
(re: authorization to engage in
partnership activity, including borrowing,
and authorization to execute guaranty);
59
60
(g) Incumbency Certificate*; and
(h) Solvency Certificate.
4.1.4 UNENCUMBERED POOL PROPERTY DOCUMENTS. Agent shall
have received all required information with respect to each Unencumbered Pool
Property in form and substance acceptable to Agent and each other Lender.
4.1.5 UNENCUMBERED POOL CERTIFICATE; COMPLIANCE
CERTIFICATE. Borrower shall have delivered to Agent an Unencumbered Pool
Certificate evidencing sufficient Loan Availability to support the Loans being
requested and a Compliance Certificate.
4.1.6 NOTICE OF BORROWING. Borrower shall have delivered
to Agent a Notice of Borrowing, and, if applicable, Agent shall have delivered
to Borrower a Fixed Rate Notice, in each case in compliance with Section 2.1.2.
4.1.7 PERFORMANCE. Borrower, the REIT and each Guarantor
Subpartnership shall have performed in all material respects all agreements and
covenants required by Agent to be performed by them on or before the Closing
Date.
4.1.8 SOLVENCY. Each of the REIT, Borrower and each
Guarantor Subpartnership shall be Solvent.
4.1.9 MATERIAL ADVERSE CHANGES. No change, as determined
by Agent and Lenders, shall have occurred, during the period commencing
December 31, 1996, and ending on the Closing Date, which has a Material Adverse
Effect on Borrower or the REIT.
4.1.10 LITIGATION PROCEEDINGS. There shall not have been
instituted or threatened, during the period commencing December 31, 1996, and
ending on the Closing Date, any litigation or proceeding in any court or
Governmental Authority affecting or threatening to affect Borrower, any
Guarantor Subpartnership or the REIT which has a Material Adverse Effect on
Borrower or the REIT.
4.1.11 INDEFEASIBLE TITLE. Borrower and the UPP
Subpartnerships, as applicable, shall have good, indefeasible and merchantable
title to the Unencumbered Pool Properties, free and clear of all Liens other
than Permitted Liens.
4.1.12 NO EVENT OF DEFAULT; SATISFACTION OF FINANCIAL
COVENANTS. On the Closing Date and after giving effect to the initial
disbursements of the Loans, no Event of Default or Unmatured Event of Default
shall exist, and the covenant contained in Section 8.5, and each of the
financial covenants contained in Article IX, shall be satisfied.
60
61
4.1.13 FEES. Agent shall have received (i) for the ratable
account of Lenders, a loan fee in the amount separately agreed to between
Lenders and Borrower, (ii) for Agent's own account, an arrangement fee in the
amount separately agreed to between Agent and Borrower and the initial
installment of the administrative fee separately agreed to between Agent and
Borrower, and (iii) for the ratable account of Lenders or for Agent's own
account, as applicable, all other fees (if any) then due, and Borrower shall
have performed all of its other obligations as set forth in the Loan Documents
to make payments to Agent on or before the Closing Date; and all expenses of
Agent incurred prior to such Closing Date in connection with this Agreement
(including without limitation all attorneys' fees and costs), if requested by
Agent, shall have been paid by Borrower.
4.1.14 OBLIGATIONS UNDER EXISTING FACILITY. Agent shall
have received an amount (which may include proceeds of the initial Loan
hereunder) equal to all unpaid obligations of Borrower under the Existing
Facility, together with instructions to apply such sum to the payment of such
obligations in full.
4.1.15 OPINION OF COUNSEL. Agent shall have received, on
behalf of Agent and Lenders, favorable opinions of counsel (which may, as to
certain matters, be rendered by in-house counsel) for Borrower, each Guarantor
Subpartnership and the REIT dated as of the Closing Date, in form and substance
satisfactory to Agent, Lenders and their respective counsel.
4.1.16 CONSENTS AND APPROVALS. All material licenses,
permits, consents, regulatory approvals and corporate or partnership action
necessary to enter into this Agreement and the other Loan Documents to which
Borrower, the REIT or any Guarantor Subpartnership is (or is to become) a party
shall have been obtained by Borrower, the REIT or such Guarantor
Subpartnership, as the case may be.
4.1.17 ACCOUNTANT'S RELIANCE LETTER. Agent shall have
received an Accountant's reliance letter in customary form and in substance
satisfactory to Agent and Agent's counsel.
4.1.18 REPRESENTATIONS AND WARRANTIES. All representations
and warranties contained in this Agreement and the other Loan Documents shall
be true and correct in all material respects.
4.2 CONDITIONS PRECEDENT TO ALL LOANS. The obligation of each
Lender (or, in the case of a Bid Loan, its Designated Bid Lender) to make any
Loan requested to be made by it, on any date, is subject to satisfaction of the
following conditions precedent as of such date:
4.2.1 DOCUMENTS.
61
62
(a) With respect to a request for a Committed
Loan, Agent shall have received, on or before the Funding Date and in
accordance with the provisions of Section 2.1.2, an original and duly
executed Notice of Borrowing.
(b) With respect to a Borrowing comprised of one
or more Bid Loans, a Competitive Bid Request and one or more
Competitive Bids shall have been submitted, and one or more
Competitive Bids shall have been accepted in whole or in part, all in
accordance with the provisions of Section 2.1.3.
4.2.2 ADDITIONAL MATTERS. As of the Funding Date for any
Loan and after giving effect to the Loan(s) being requested:
(a) REPRESENTATIONS AND WARRANTIES. All of the
representations and warranties contained in this Agreement and in any
other Loan Document (other than representations and warranties which
expressly speak only as of a different date and other than for changes
permitted or contemplated by this Agreement), and each certification,
representation or warranty of Borrower set forth in the Notice of
Borrowing or Competitive Bid Request relating to such Loan(s), shall
be true and correct in all material respects on and as of such Funding
Date, as though made on and as of such date;
(b) NO DEFAULT. No Event of Default or Unmatured
Event of Default shall have occurred and be continuing or would result
from the making of the requested Loan(s), and the covenant contained
in Section 8.5, and each of the financial covenants contained in
Article IX, shall be satisfied; and
(c) NO MATERIAL ADVERSE CHANGE. Since the
Closing Date, no change shall have occurred which shall have a
Material Adverse Effect on Borrower or the REIT, as reasonably
determined by Agent, other than any such change the occurrence of
which has been waived by the Requisite Lenders in connection with any
prior Borrowing.
Each submission by Borrower to Agent of a Notice of Borrowing or a Competitive
Bid Request with respect to a Loan and the acceptance by Borrower of the
proceeds of each such Loan made hereunder shall constitute a representation and
warranty by Borrower as of the Funding Date in respect of such Loan that all
the conditions contained in this Section 4.2.2 have been satisfied.
62
63
ARTICLE
REPRESENTATIONS AND WARRANTIES
5.1 REPRESENTATIONS AND WARRANTIES AS TO BORROWER, ETC.. In order
to induce Lenders and Designated Bid Lenders to make the Loans, Borrower hereby
represents and warrants to Lenders and Designated Bid Lenders as follows:
5.1.1 ORGANIZATION; PARTNERSHIP POWERS. Borrower (i) is a
limited partnership duly organized, validly existing and in good standing under
the laws of the jurisdiction of its formation, (ii) is duly qualified to do
business as a foreign limited partnership and in good standing under the laws
of each jurisdiction in which it owns or leases real property or in which the
nature of its business requires it to be so qualified, except for those
jurisdictions where failure to so qualify and be in good standing would not
have a Material Adverse Effect on Borrower, and (iii) has all requisite
partnership power and authority to own and operate its property and assets and
to conduct its business as presently conducted and as proposed to be conducted
in connection with and following the consummation of the Loans contemplated by
the Loan Documents.
5.1.2 AUTHORITY. Borrower has the requisite partnership
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the general partner of Borrower, and no other partnership
proceedings or authorizations on the part of Borrower or its general or limited
partners are necessary to consummate such transactions. Each of the Loan
Documents to which Borrower is a party has been duly executed and delivered by
Borrower and constitutes its legal, valid and binding obligation, enforceable
against it in accordance with its terms, subject to bankruptcy, insolvency and
other laws affecting creditors' rights generally.
5.1.3 OWNERSHIP OF BORROWER, EACH UPP SUBPARTNERSHIP.
Schedule 5.1.3 sets forth the general partners and limited partners (or other
holders of ownership interests) of Borrower and each UPP Subpartnership and
their respective ownership percentages and there are no other partnership (or
other ownership) interests outstanding. Except as set forth or referred to in
the Partnership Agreement of Borrower or any UPP Subpartnership, no partnership
(or other ownership) interest (or any securities, instruments, warrants, option
or purchase rights, conversion or exchange rights, calls, commitments or claims
of any character convertible into or exercisable for such interests) in
Borrower or any UPP Subpartnership is subject to issuance under any security,
instrument, warrant, option or purchase rights, conversion or exchange rights,
call, commitment or claim of any right, title or interest therein or thereto.
All of the partnership (or other ownership) interests
63
64
in Borrower and each UPP Subpartnership have been issued in compliance with all
applicable Requirements of Law.
5.1.4 NO CONFLICT. The execution, delivery and performance
by Borrower of the Loan Documents to which it is or will be a party, and each
of the transactions contemplated thereby, do not and will not (i) conflict with
or violate Borrower's limited partnership agreement or certificate of limited
partnership or other organizational documents, as the case may be, or (ii)
conflict with, result in a breach of or constitute (with or without notice or
lapse of time or both) a default under any Requirement of Law, Contractual
Obligation or Court Order of or binding upon Borrower, or (iii) require
termination of any Contractual Obligation, or (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the properties or
assets of Borrower, other than Permitted Liens.
5.1.5 CONSENTS AND AUTHORIZATIONS. Borrower has obtained
all consents and authorizations required pursuant to its Contractual
Obligations with any other Person, and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, as may be necessary to allow Borrower to lawfully
execute, deliver and perform its obligations under the Loan Documents to which
Borrower is a party.
5.1.6 GOVERNMENTAL REGULATION. Neither Borrower, the REIT
nor any Guarantor Subpartnership is subject to regulation under the Public
Utility Holding Company Act of 1935, the Federal Power Act, the Interstate
Commerce Act, the Investment Company Act of 1940 or any other federal or state
statute or regulation such that its ability to incur indebtedness is limited or
its ability to consummate the transactions contemplated by the Loan Documents
is materially impaired.
5.1.7 PRIOR FINANCIALS. The (a) December 31, 1996
Consolidated Balance Sheet, Statement of Operations and Statement of Cash Flows
of the REIT contained in the REIT's Form 10K (the "December 31, 1996
Financials") and (b) March 31, 1997 Consolidated Balance Sheet, Statement of
Operations and Statement of Cash Flows of the REIT contained in the REIT's Form
10Q (in each case, delivered to Agent prior to the date hereof) were prepared
in accordance with GAAP and fairly present the assets, liabilities and
financial condition of the REIT on a consolidated basis, at the date thereof
and the results of its operations and its cash flows, on a consolidated basis,
for the period then ended.
5.1.8 FINANCIAL STATEMENTS; PROJECTIONS AND FORECASTS.
Each of the Financial Statements to be delivered to Agent pursuant to Sections
6.1.2 and 6.1.3 (i) has been, or will be, as applicable, prepared in accordance
with the books and records of the REIT on a consolidated basis, and (ii) either
fairly present, or will fairly present, as
64
65
applicable, the financial condition of the REIT on a consolidated basis, at the
dates thereof (and, if applicable, subject to normal year-end adjustments) and
the results of its operations and cash flows, on a consolidated basis, for the
period then ended. Each of the projections delivered to Agent prior to the
date hereof and the financial projections to be delivered to Agent pursuant to
Section 6.1.5 (1) has been, or will be, as applicable, prepared by Borrower in
light of the past business and performance of Borrower on a consolidated basis
and (2) represent, or will represent, as of the date thereof, the reasonable
good faith estimates of Borrower's financial personnel.
5.1.9 PRIOR OPERATING STATEMENTS. Each of the operating
statements pertaining to each of the Unencumbered Pool Properties delivered to
Agent prior to the date hereof was prepared in accordance with GAAP in effect
on the date such operating statement of each Unencumbered Pool Property was
prepared and fairly presents the results of operations of such Unencumbered
Pool Property for the period then ended.
5.1.10 ANNUAL OPERATING REPORTS AND PROJECTIONS. Each of
the Annual Operating Reports to be delivered to Agent pursuant to Section 6.1.1
(i) has been or will be, as applicable, prepared in accordance with the books
and records of the applicable Unencumbered Pool Property, and (ii) fairly
presents or will fairly present, as applicable, the results of operations of
such Unencumbered Pool Property for the period then ended. Each of the
projections, financial plans and budgets delivered to Agent prior to the date
hereof and the projections to be delivered to Agent pursuant to Section 6.1.5
(1) has been, or will be, as applicable, prepared for each Unencumbered Pool
Property in light of the past business and performance of such Unencumbered
Pool Property and (2) represents or will represent, as of the date thereof, the
reasonable good faith estimates of the REIT's financial personnel.
5.1.11 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to the best of
Borrower's knowledge, threatened against Borrower or any Property of
Borrower (including any Unencumbered Pool Property), which (i) result
in a Material Adverse Effect on Borrower, (ii) materially and
adversely affect the ability of any party to any of the Loan Documents
to perform its obligations thereunder, or (iii) materially and
adversely affect the ability of Borrower to perform its obligations
contemplated in the Loan Documents.
(b) Borrower is not (i) in violation of any
applicable law, which violation has a Material Adverse Effect on
Borrower, or (ii) subject to or in default with respect to any Court
Order which has a Material Adverse Effect on Borrower. There are no
material Proceedings pending or, to the best of Borrower's knowledge,
65
66
threatened against Borrower or any Unencumbered Pool Property, which,
if adversely decided, would have a Material Adverse Effect on
Borrower.
5.1.12 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996,
there has occurred no event which has a Material Adverse Effect on Borrower,
and no material adverse change in Borrower's ability to perform its obligations
under the Loan Documents to which it is a party or the transactions
contemplated thereby.
5.1.13 PAYMENT OF TAXES. All tax returns and reports to be
filed by Borrower have been timely filed, and all taxes, assessments, fees and
other governmental charges shown on such returns or otherwise payable by
Borrower have been paid when due and payable (other than real property taxes,
which may be paid prior to delinquency so long as no penalty or interest shall
attach thereto), except such taxes, if any, as are reserved against in
accordance with GAAP and are being contested in good faith by appropriate
proceedings or such taxes, the failure to make payment of which when due and
payable will not have, in the aggregate, a Material Adverse Effect on Borrower.
Borrower has no knowledge of any proposed tax assessment against Borrower that
will have a Material Adverse Effect on Borrower, which is not being actively
contested in good faith by Borrower.
5.1.14 MATERIAL ADVERSE AGREEMENTS. Borrower is not a party
to or subject to any Contractual Obligation or other restriction contained in
its limited partnership agreement, certificate of limited partnership or
similar governing documents which has a Material Adverse Effect on Borrower.
5.1.15 PERFORMANCE. Borrower is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, will not have a Material Adverse Effect on Borrower.
5.1.16 FEDERAL RESERVE REGULATIONS. No part of the proceeds
of any Loan hereunder will be used to purchase or carry any "margin security"
as defined in Regulation G or for the purpose of reducing or retiring any
indebtedness which was originally incurred to purchase or carry any margin
security or for any other purpose which might constitute this transaction a
"purpose credit" within the meaning of said Regulation G. Neither Borrower,
the REIT nor any Guarantor Subpartnership is engaged primarily in the business
of extending credit for the purpose of purchasing or carrying out any "margin
stock" as defined in Regulation U. No part of the proceeds of any Loan
hereunder will be used for any purpose that violates, or which is inconsistent
with, the provisions of Regulation X or any other regulation of the Federal
Reserve Board.
66
67
5.1.17 DISCLOSURE. The representations and warranties of
Borrower contained in the Loan Documents and all certificates, financial
statements and other documents delivered to Agent in connection therewith or
delivered to Xxxxx Fargo or any Original Lender in connection with the Existing
Facility, do not (or, in the case of items delivered in connection with the
Existing Facility, did not, as of the date so delivered) contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading. Borrower has given
to Agent true, correct and complete copies of all UPP Leases, organizational
documents, Financial Statements and all other documents and instruments
referred to in the Loan Documents as having been delivered to Agent.
5.1.18 REQUIREMENTS OF LAW. Borrower, the REIT and each UPP
Subpartnership are in compliance with all Requirements of Law (including
without limitation the Securities Act and the Securities Exchange Act, and the
applicable rules and regulations thereunder, state securities law and "Blue
Sky" laws) applicable to it and its respective businesses, in each case, where
the failure to so comply will have a Material Adverse Effect on Borrower or the
REIT. The REIT has made all filings with and obtained all consents of the
Commission required under the Securities Act and the Securities Exchange Act in
connection with the execution, delivery and performance by the REIT of the Loan
Documents.
5.1.19 PATENTS, TRADEMARKS, PERMITS, ETC. Borrower, the
REIT and each UPP Subpartnership own, are licensed or otherwise have the lawful
right to use, or have all permits and other governmental approvals, patents,
trademarks, trade names, copyrights, technology, know-how and processes used in
or necessary for the conduct of each such Person's business as currently
conducted, the absence of which would have a Material Adverse Effect upon
Borrower or the REIT. The use of such permits and other governmental
approvals, patents, trademarks, trade names, copyrights, technology, know-how
and processes by each such Person does not infringe on the rights of any
Person, subject to such claims and infringements as do not, in the aggregate,
give rise to any liability on the part of any such Person which would have a
Material Adverse Effect on Borrower or the REIT.
5.1.20 ENVIRONMENTAL MATTERS. Except as set forth on
Schedule 5.1.20, to the best of Borrower's knowledge, (i) the operations of
Borrower, the REIT and each UPP Subpartnership comply in all material respects
with all applicable local, state and federal environmental, health and safety
Requirements of Law ("Environmental Laws"); (ii) none of Borrower's or any UPP
Subpartnership's present Property or operations are subject to any Remedial
Action or other Liabilities and Costs arising from the Release or threatened
Release of a Contaminant into the environment in violation of any Environmental
Laws, which Remedial Action or other Liabilities and Costs would have a
Material Adverse Effect
67
68
on Borrower or the REIT; (iii) neither Borrower, the REIT nor any UPP
Subpartnership has filed any notice under applicable Environmental Laws
reporting a Release of a Contaminant into the environment in violation of any
Environmental Laws, except as the same may have been heretofore remedied; (iv)
there is not now on or in the Property of Borrower or any UPP Subpartnership
(except in compliance in all material respects with all applicable
Environmental Laws): (A) any underground storage tanks, (B) any
asbestos-containing material, or (C) any polychlorinated biphenyls (PCB's) used
in hydraulic oils, electrical transformers or other equipment owned by such
Person; and (v) neither Borrower, the REIT nor any UPP Subpartnership has
received any notice or claim to the effect that it is or may be liable to any
Person as a result of the Release or threatened Release of a Contaminant into
the environment.
5.1.21 UNENCUMBERED POOL PROPERTIES. Each of the Properties
listed on Schedule 1 qualifies as an Unencumbered Property. The Aggregate
Occupancy Rate is at or above the level required to be maintained under Section
9.7. The aggregate of the Individual UPP Values of Unencumbered Pool
Properties owned by UPP Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships) does not exceed ten percent
(10%) of the Unencumbered Pool Value; and the aggregate of the Individual UPP
Values of Unencumbered Pool Properties owned by UPP Subpartnerships that are
not Guarantor Subpartnerships does not exceed five percent (5%) of the
Unencumbered Pool Value.
5.1.22 MAJOR AGREEMENTS; UPP LEASES. With respect to each
Unencumbered Pool Property for which Agent has requested copies of Major
Agreements, Agent has received true, complete and correct copies of each Major
Agreement relating thereto. All such Major Agreements are in full force and
effect, and no default or event of default (or event or occurrence which upon
with the passage of time or the giving of notice, or both, will constitute a
default or event of default) exists or will exist under such Major Agreements
as a result of the consummation of the transactions contemplated by the Loan
Documents. Except as reflected on the most current rent rolls delivered to
Agent, all UPP Leases are in full force and effect and no default or event of
default (or event or occurrence which upon with the passage of time or the
giving of notice, or both, will constitute a default or event of default)
exists or will exist thereunder as a result of the consummation of the
transactions contemplated by the Loan Documents.
5.1.23 SOLVENCY. Borrower is and will be Solvent after
giving effect to each disbursement of the Loans and the payment and accrual of
all fees then payable.
5.1.24 TITLE TO ASSETS; NO LIENS. Borrower has good,
indefeasible and merchantable title to all Properties owned or leased by it,
including, without limitation, any Unencumbered Pool Properties owned or leased
by Borrower, and each of the Unencumbered Pool Properties is free and clear of
all Liens, except Permitted Liens.
68
69
5.1.25 USE OF PROCEEDS. Borrower's use of the proceeds of
the Loans are, and will continue to be, legal and proper uses (and to the
extent necessary, duly authorized by Borrower's partners) and such uses are
consistent with all applicable laws and statutes and Section 7.1.9.
5.2 REPRESENTATIONS AND WARRANTIES AS TO EACH UPP SUBPARTNERSHIP,
ETC. In order to induce Lenders and Designated Bid Lenders to make the Loans,
Borrower hereby represents and warrants to Lenders and Designated Bid Lenders
as follows:
5.2.1 ORGANIZATION; PARTNERSHIP POWERS. Each UPP
Subpartnership (i) is a Partnership duly organized, validly existing and in
good standing under the laws of the jurisdiction of its organization, (ii) is
duly qualified to do business as a foreign partnership and in good standing
under the laws of each jurisdiction in which it owns or leases real property or
in which the nature of its business requires it to be so qualified, except for
those jurisdictions where failure to so qualify and be in good standing would
not have a Material Adverse Effect on Borrower or the REIT, and (iii) has all
requisite power and authority, as an entity, to own and operate its Property
and assets and to conduct its business as presently conducted and as proposed
to be conducted in connection with and following the consummation of the
transactions contemplated by the Loan Documents.
5.2.2 AUTHORITY. Each Guarantor Subpartnership has the
requisite power and authority, as an entity, to execute, deliver and perform
each of the Loan Documents to which it is or will be a party. The execution,
delivery and performance thereof, and the consummation of the transactions
contemplated thereby, have been duly approved by the requisite partners of each
such Guarantor Subpartnership, and no other partnership or similar proceedings
on the part of any Guarantor Subpartnership are necessary to consummate such
transactions. The Partnership Agreement of each Guarantor Subpartnership
expressly authorizes such Guarantor Subpartnership's execution, delivery and
performance of each of the Loan Documents to which such Guarantor
Subpartnership is or is to become a party hereunder. Each of the Loan
Documents to which each Guarantor Subpartnership is a party has been duly
executed and delivered by each Guarantor Subpartnership and constitutes its
legal, valid and binding obligation, enforceable against each Guarantor
Subpartnership in accordance with its terms, subject to bankruptcy, insolvency
and other laws affecting creditors' rights generally.
5.2.3 NO CONFLICT. The execution, delivery and performance
of the Loan Documents by each Guarantor Subpartnership, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate such Guarantor Subpartnership's Partnership Agreement, (ii) conflict
with, result in a breach of or constitute (with or without notice or lapse of
time or both) a default under any Requirement of Law, Contractual Obligation or
Court Order of any Guarantor Subpartnership, (iii) require termination of any
Contractual Obligation, or (iv) result in or require the creation or imposition
of any Lien
69
70
whatsoever upon any of the properties or assets of any Guarantor Subpartnership
(other than Permitted Liens), or (iii) require any approval of any holders of
any ownership interest in any Guarantor Subpartnership which has not been
obtained.
5.2.4 CONSENTS AND AUTHORIZATIONS. Each Guarantor
Subpartnership has obtained all consents and authorizations required pursuant
to its Contractual Obligations with any other Person, and shall have obtained
all consents and authorizations of, and effected all notices to and filings
with, any Governmental Authority, as may be necessary to allow such Guarantor
Subpartnership to lawfully execute, deliver and perform its obligations under
the Loan Documents to which such Guarantor Subpartnership is a party.
5.2.5 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to the best of
Borrower's knowledge, threatened against any UPP Subpartnership or any
Property of any UPP Subpartnership which would (i) result in a
Material Adverse Effect on Borrower or the REIT, (ii) materially and
adversely affect the ability of any party to any of the Loan Documents
to perform its obligations thereunder, or (iii) materially and
adversely affect the ability of any Guarantor Subpartnership to
perform its obligations as contemplated in the Loan Documents.
(b) No UPP Subpartnership is (i) in violation of
any applicable law, which violation has a Material Adverse Effect on
such UPP Subpartnership, or (ii) subject to or in default with respect
to any Court Order which has a Material Adverse Effect on such UPP
Subpartnership. There are no material Proceedings pending or, to the
best of Borrower's knowledge, threatened against any UPP
Subpartnership which, if adversely decided, would have a Material
Adverse Effect on any UPP Subpartnership.
5.2.6 PAYMENT OF TAXES. All tax returns and reports to be
filed by any UPP Subpartnership have been timely filed, and all taxes,
assessments, fees and other governmental charges shown on such returns or
otherwise payable by such Guarantor Partnership have been paid when due and
payable (other than real property taxes, which may be paid prior to delinquency
so long as no penalty or interest shall attach thereto), except such taxes, if
any, as are reserved against in accordance with GAAP and are being contested in
good faith by appropriate proceedings or such taxes, the failure to make
payment of which when due and payable would not have, in the aggregate, a
Material Adverse Effect on any UPP Subpartnership. Borrower has no knowledge
of any proposed tax assessment against any UPP Subpartnership that would have a
Material Adverse Effect
70
71
on any UPP Subpartnership, which is not being actively contested in good
faith by such UPP Subpartnership.
5.2.7 PERFORMANCE. No UPP Subpartnership is in default in
the performance, observance or fulfillment of any of the obligations, covenants
or conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect on Borrower or the REIT.
5.2.8 DISCLOSURE. The representations and warranties of
each Guarantor Subpartnership contained in the Loan Documents, and all
certificates, financial statements and other documents delivered to Agent in
connection therewith or delivered to Xxxxx Fargo or any Original Lender in
connection with the Existing Facility (or, in the case of items delivered in
connection with the Existing Facility, did not, as of the date so delivered),
do not contain any untrue statement of a material fact or omit to state a
material fact necessary in order to make the statements contained herein or
therein, in light of the circumstances under which they were made, not
misleading.
5.2.9 SOLVENCY. Each Guarantor Subpartnership is and will
be Solvent, in each case after giving effect to each disbursement of the Loans,
and the payment and accrual of all fees then payable.
5.2.10 TITLE TO ASSETS; NO LIENS. Each UPP Subpartnership
has good, indefeasible and merchantable title to the Properties owned or leased
by it and each of the Unencumbered Pool Properties owned by any UPP
Subpartnership is free and clear of all Liens, except Permitted Liens.
5.2.11 LIMITED PURPOSE. Each UPP Subpartnership is and will
continue to be engaged only in the business of owning, operating and developing
one or more Unencumbered Pool Properties. No UPP Subpartnership owns or has
any interest in any Person. The sole partners and beneficial owners of each
Guarantor Subpartnership are and will continue to be, directly or indirectly,
Borrower and the REIT and, with respect to no more than ten percent (10%) of
the equity interests in such Guarantor Subpartnership outstanding at any time,
one or more Third Party Partners. The sole partners and beneficial owners of
each UPP Subpartnership other than a Guarantor Subpartnership are and will
continue to be, directly or indirectly, Borrower and the REIT and, with respect
to no more than forty-nine percent (49%) of the equity interests in such UPP
Subpartnership outstanding at any time, one or more Third Party Partners.
71
72
5.3 REPRESENTATIONS AND WARRANTIES AS TO THE REIT. In order to
induce Lenders and Designated Bid Lenders to make the Loans, Borrower hereby
represents and warrants to Lenders and Designated Bid Lenders as follows:
5.3.1 ORGANIZATION; CORPORATE POWERS. The REIT (i) is a
corporation duly organized, validly existing and in good standing under the
laws of the State of Maryland, (ii) is duly qualified to do business as a
foreign corporation and in good standing under the laws of each jurisdiction in
which it owns or leases real property or in which the nature of its business
requires it to be so qualified, except for those jurisdictions where failure to
so qualify and be in good standing will not have a Material Adverse Effect on
the REIT, and (iii) has all requisite corporate power and authority to own and
operate its property and assets and to conduct its business as presently
conducted and as proposed to be conducted in connection with and following the
consummation of the transactions contemplated by the Loan Documents.
5.3.2 AUTHORITY. The REIT has the requisite corporate
power and authority to execute, deliver and perform each of the Loan Documents
to which it is or will be a party. The execution, delivery and performance
thereof, and the consummation of the transactions contemplated thereby, have
been duly approved by the Board of Directors of the REIT, and no other
corporate proceedings on the part of the REIT are necessary to consummate such
transactions. Each of the Loan Documents to which the REIT is a party has been
duly executed and delivered by Borrower and constitutes its legal, valid and
binding obligation, enforceable against it in accordance with its terms,
subject to bankruptcy, insolvency and other laws affecting creditors' rights
generally.
5.3.3 NO CONFLICT. The execution, delivery and performance
by the REIT of the Loan Documents to which it is party, and each of the
transactions contemplated thereby, do not and will not (i) conflict with or
violate its articles of incorporation, by-laws or other organizational
documents, (ii) conflict with, result in a breach of or constitute (with or
without notice or lapse of time or both) a default under any Requirement of
Law, Contractual Obligation or Court Order of the REIT, (iii) require
termination of any Contractual Obligation, (iv) result in or require the
creation or imposition of any Lien whatsoever upon any of the properties or
assets of the REIT, or (v) require any approval of the stockholders of the
REIT.
5.3.4 CONSENTS AND AUTHORIZATIONS. The REIT has obtained
all consents and authorizations required pursuant to its Contractual
Obligations with any other Person, and shall have obtained all consents and
authorizations of, and effected all notices to and filings with, any
Governmental Authority, as may be necessary to allow the REIT to lawfully
execute, deliver and perform its obligations under the Loan Documents to which
the REIT is a party.
72
73
5.3.5 CAPITALIZATION. All of the capital stock of the REIT
has been issued in compliance, in all material respects, with all applicable
Requirements of Law.
5.3.6 LITIGATION; ADVERSE EFFECTS.
(a) There is no action, suit, proceeding,
governmental investigation or arbitration, at law or in equity, or
before or by any Governmental Authority, pending or, to best of
Borrower's knowledge, threatened against the REIT or any Property of
the REIT, which will (i) result in a Material Adverse Effect on the
REIT, (ii) materially and adversely affect the ability of any party to
any of the Loan Documents to perform its obligations thereunder, or
(iii) materially and adversely affect the ability of the REIT to
perform its obligations as contemplated in the Loan Documents.
(b) The REIT is not (i) in violation of any
applicable law, which violation has a Material Adverse Effect on the
REIT, or (ii) subject to or in default with respect to any Court Order
which has a Material Adverse Effect on the REIT. There are no
Proceedings pending or, to the best of Borrower's knowledge,
threatened against the REIT, which, if adversely decided, would have a
Material Adverse Effect on the REIT or Borrower.
5.3.7 NO MATERIAL ADVERSE CHANGE. Since December 31, 1996,
there has occurred no event which has a Material Adverse Effect on the REIT,
and no material adverse change in the REIT's ability to perform its obligations
under the Loan Documents to which it is a party or the transactions
contemplated thereby.
5.3.8 PAYMENT OF TAXES. All tax returns and reports to be
filed by the REIT have been timely filed, and all taxes, assessments, fees and
other governmental charges shown on such returns have been paid when due and
payable, except such taxes, if any, as are reserved against in accordance with
GAAP and are being contested in good faith by appropriate proceedings or such
taxes, the failure to make payment of which when due and payable would not
have, in the aggregate, a Material Adverse Effect on the REIT. The REIT has no
knowledge of any proposed tax assessment against the REIT that would have a
Material Adverse Effect on the REIT, which is not being actively contested in
good faith by the REIT.
5.3.9 MATERIAL ADVERSE AGREEMENTS. The REIT is not a party
to or subject to any Contractual Obligation or other restriction contained in
its charter, by-laws or similar governing documents which has a Material
Adverse Effect on the REIT or the ability of the REIT to perform its
obligations under the Loan Documents to which it is a party.
73
74
5.3.10 PERFORMANCE. The REIT is not in default in the
performance, observance or fulfillment of any of the obligations, covenants or
conditions contained in any Contractual Obligation applicable to it, and no
condition exists which, with the giving of notice or the lapse of time or both,
would constitute a default under such Contractual Obligation in each case,
except where the consequences, direct or indirect, of such default or defaults,
if any, would not have a Material Adverse Effect on the REIT.
5.3.11 DISCLOSURE. The representations and warranties of
the REIT contained in the Loan Documents, and all certificates, financial
statements and other documents delivered to Agent in connection therewith or
delivered to Xxxxx Fargo or any Original Lender in connection with the Existing
Facility (or, in the case of items delivered in connection with the Existing
Facility, did not, as of the date so delivered), do not contain any untrue
statement of a material fact or omit to state a material fact necessary in
order to make the statements contained herein or therein, in light of the
circumstances under which they were made, not misleading.
5.3.12 ERISA. Neither the REIT nor any ERISA Affiliate
thereof (including, for all purposes under this Section 5.3.12, Borrower and
each Guarantor Partnership) has incurred any liability, with respect to any
Benefit Plan of the REIT or any ERISA Affiliate of the REIT, which would have a
Material Adverse Effect on Borrower or the REIT. Neither the REIT nor any
ERISA Affiliate thereof has during the past six (6) years maintained or
contributed to, or currently maintains or contributes to, any employee welfare
benefit plan within the meaning of Section 3(1) of ERISA which provides
benefits to retirees, the obligations with respect to which would have a
Material Adverse Effect on Borrower or the REIT. Neither the REIT nor any
ERISA Affiliate thereof is now contributing to, nor has it ever contributed to
or been obligated to contribute to, any Multiemployer Plan, and neither the
REIT nor any ERISA Affiliate of the REIT has or is likely to incur any
withdrawal liability with respect to any Multiemployer Plan which would have a
Material Adverse Effect on Borrower or the REIT.
5.3.13 SOLVENCY. The REIT is and will be Solvent, in each
case after giving effect to each disbursement of the Loans, and the payment and
accrual of all fees then payable.
5.3.14 STATUS AS A REIT. The REIT (i) is a real estate
investment trust as defined in Section 856 of the Internal Revenue Code (or any
successor provision thereto), (ii) has not revoked its election to be a real
estate investment trust, (iii) has not engaged in any "prohibited transactions"
as defined in Section 856(b)(6)(iii) of the Internal Revenue Code (or any
successor provision thereto), and (iv) for its current "tax year" (as defined
in the Internal Revenue Code) is and for all prior tax years subsequent to its
election to be a real estate investment trust has been entitled to a dividends
paid deduction which meets the requirements of Section 857 of the Internal
Revenue Code.
74
75
5.3.15 OWNERSHIP. The REIT does not own or have any
interest in any other Person, other than its general partnership interests in
Borrower and SWIP.
5.3.16 NYSE/AMEX LISTING. The common stock of the REIT is
and will continue to be listed for trading and traded on either the New York
Stock Exchange or the American Stock Exchange.
ARTICLE VI
REPORTING COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
6.1 FINANCIAL STATEMENTS AND OTHER FINANCIAL AND OPERATING
INFORMATION. Borrower shall maintain or cause to be maintained a system of
accounting established and administered in accordance with sound business
practices and consistent with past practice to permit preparation of quarterly
and annual financial statements in conformity with GAAP, and each of the
financial statements described below shall be prepared on a consolidated basis
for the REIT from such system and records. Borrower shall deliver or cause to
be delivered to Agent (with copies sufficient for each Lender):
6.1.1 ANNUAL OPERATING REPORTS; OTHER UPP REPORTS.
(a) As soon as practicable, and in any event
within ninety (90) days after the end of each Fiscal Year, operating
statements, in the form of Exhibit C or other form approved by Agent,
for the Unencumbered Pool Properties (the "Annual Operating Reports"),
in form and substance satisfactory to Agent and certified by the
REIT's chief financial officer.
(b) If requested by Agent, rent rolls (on
Borrower's detailed form of rent roll) for any or all of the
Unencumbered Pool Properties, dated within sixty (60) days prior to
the date of Agent's request, in form and substance satisfactory to
Agent and certified by the REIT's chief financial officer.
6.1.2 QUARTERLY FINANCIAL STATEMENTS CERTIFIED BY CFO. As
soon as practicable, and in any event within forty-five (45) days after the end
of each Fiscal Quarter: (i) consolidated balance sheets, statements of
operations and statements of cash flow for the REIT ("Financial Statements"),
which may, in the case of the first three Fiscal Quarters, be in the form
provided to the Commission on the REIT's Form 10Q, and certified by the REIT's
chief financial officer; and (ii) a copy of the Borrower's Form 10Q, in the
form provided to the Commission, and certified by the REIT's chief financial
officer.
75
76
6.1.3 ANNUAL FINANCIAL STATEMENTS. Within ninety (90) days
after the close of each Fiscal Year: (i) (A) annual Financial Statements of
the REIT, on a consolidated basis (in the form provided to the Commission on
the REIT's Form 10K), audited and certified without qualification by the
Accountants; and (B) a copy of the Borrower's Form 10K, in the form provided to
the Commission, audited and certified without qualification by the Accountants;
accompanied by (ii) a statement that, in the course of their audit (conducted
in accordance with generally accepted auditing standards), the Accountants
obtained no knowledge that an Event of Default or Unmatured Event of Default
occurred, and (iii) to the extent customarily provided by the Accountants, a
copy of a letter from the Accountants to Borrower acknowledging that (A)
Borrower intends to deliver such Financial Statements and auditor's report to
Lenders and Designated Bid Lenders, (B) Lenders and Designated Bid Lenders
intend to rely thereon, and (C) Borrower intends for Lenders and Designated Bid
Lenders to so rely, in substantially the form delivered prior to the Closing
Date. To the extent Agent desires additional details or supporting information
with respect to Majority Partnerships, Investment Partnerships or individual
Properties owned or leased by Borrower, any Subsidiary of Borrower or any
Investment Partnership (other than Unencumbered Pool Properties) not contained
in the REIT's or Borrower's Form 10K, Borrower shall provide Agent with such
details or supporting information as Agent requests which is reasonably
available to Borrower. Without limiting the foregoing, within ninety (90) days
after the end of each Fiscal Year, Borrower shall provide to Agent operating
statements and a schedule setting forth the percentage of leasable area leased
to tenants in occupancy, with footnotes indicating which leases are in default
in rent payments by more than forty-five (45) days (other than technical,
nonmaterial disputes concerning percentage rentals due) any other material
provisions in respect of which the landlord has issued a notice of default, for
each Property owned or leased by Borrower, any Subsidiary of Borrower or any
Investment Partnership which is not an Unencumbered Pool Property.
6.1.4 OFFICER'S CERTIFICATE OF BORROWER. (i) Together with
each delivery of any Financial Statement pursuant to Sections 6.1.2 and 6.1.3,
(A) an Officer's Certificate of the REIT, stating that the executive officer
who is the signatory thereto (which officer shall be the chief executive
officer, the chief operating officer or the chief financial officer of the
REIT) has reviewed, or caused under his supervision to be reviewed, the terms
of this Agreement and the other principal Loan Documents, and has made, or
caused to be made under his supervision, a review in reasonable detail of the
transactions and condition of Borrower, the REIT and each UPP Subpartnership,
during the accounting period covered by such Financial Statements, and that
such review has not disclosed the existence during or at the end of such
accounting period, and that the signers do not have knowledge of the existence
as of the date of the Officer's Certificate, of any condition or event which
constitutes an Event of Default or Unmatured Event of Default, or, if any such
condition or event existed or exists, specifying the nature and period of
existence thereof and what action
76
77
has been taken, is being taken and is proposed to be taken with respect
thereto; and (B) a Compliance Certificate demonstrating in reasonable detail
(which detail shall include actual calculation and supporting information)
compliance during and at the end of such accounting periods with the covenant
contained in Section 8.5 and each of the financial covenants contained in
Article IX.
6.1.5 CASH FLOW PROJECTIONS. Within ninety (90) days after
the end of each Fiscal Year, projections of Borrower, on a consolidated basis,
detailing expected sources and uses of cash for the next Fiscal Year. Borrower
shall also provide such additional supporting details as Agent may reasonably
request.
6.1.6 UNENCUMBERED POOL CERTIFICATE. As soon as
practicable, and in any event within forty-five (45) days after the end of each
Fiscal Quarter (and more often if so requested by Agent), a certificate in
substantially the form of Exhibit B, certified as being true and correct by the
REIT's chief executive officer, chief operating officer or chief financial
officer (the "Unencumbered Pool Certificate"). Each Unencumbered Pool
Certificate shall set forth calculations of Loan Availability as of the end of
such Fiscal Quarter.
6.1.7 KNOWLEDGE OF EVENT OF DEFAULT. Promptly upon
Borrower obtaining knowledge (i) of any condition or event which constitutes an
Event of Default or Unmatured Event of Default, or becoming aware that any
Lender (on its own account or in its capacity as administrative agent for its
Designated Bid Lender) has given notice or taken any other action with respect
to a claimed Event of Default or Unmatured Event of Default or (ii) of any
condition or event which has a Material Adverse Effect on Borrower or the REIT,
an Officer's Certificate specifying the nature and period of existence of any
such condition or event, or specifying the notice given or action taken by such
Lender and the nature of such claimed Event of Default, Unmatured Event of
Default, event or condition, and what action Borrower or the REIT has taken, is
taking and proposes to take with respect thereto.
6.1.8 LITIGATION, ARBITRATION OR GOVERNMENT INVESTIGATION.
Promptly upon Borrower, any UPP Subpartnership or the REIT obtaining knowledge
of the institution of, or written threat of, any material action, suit,
proceeding, governmental investigation or arbitration against or affecting
Borrower, any UPP Subpartnership or the REIT not previously disclosed in
writing by Borrower to Agent pursuant to this Section 6.1.8, including any
eminent domain or other condemnation proceedings affecting any Unencumbered
Pool Property.
6.1.9 ERISA TERMINATION EVENT. As soon as possible, and in
any event within thirty (30) days after Borrower, any UPP Subpartnership or the
REIT knows or has reason to know that a Termination Event has occurred that is
reasonably likely to cause a
77
78
material liability to Borrower or the REIT, a written statement of the chief
financial officer of the REIT describing such Termination Event and the action,
if any, which Borrower, any UPP Subpartnership, the REIT or any ERISA Affiliate
of any of them has taken, is taking or proposes to take, with respect thereto,
and, when known, any action taken or threatened by the IRS, the DOL or the PBGC
with respect thereto.
6.1.10 PROHIBITED ERISA TRANSACTION. As soon as possible,
and in any event within thirty (30) days, after Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them knows or has
reason to know that a prohibited transaction (defined in Section 406 of ERISA
and Section 4975 of the Internal Revenue Code) has occurred that is reasonably
likely to cause a material liability to Borrower or the REIT, a statement of
the chief financial officer of the REIT describing such transaction.
6.1.11 BENEFIT PLAN ANNUAL REPORT. Within ten (10) days
after Agent's request thereof (or, if not then readily available to Borrower,
as soon thereafter as reasonably practicable), copies of each annual report,
including Schedule B thereto, filed with respect to each Benefit Plan of
Borrower, any UPP Subpartnership, the REIT or any ERISA Affiliate of any of
them with the DOL, the IRS or the PBGC.
6.1.12 BENEFIT PLAN FUNDING WAIVER REQUEST. Within thirty
(30) days after the filing thereof with the IRS, a copy of each funding waiver
request filed with respect to any Benefit Plan of Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them and all
communications received by Borrower, any UPP Subpartnership, the REIT or any
ERISA Affiliate of any of them with respect to such request.
6.1.13 ESTABLISHMENT OF BENEFIT PLAN AND INCREASE IN
CONTRIBUTIONS TO THE BENEFIT PLAN. Not less than ten (10) days prior to the
effective date thereof, a notice to Agent of the establishment by Borrower or
the REIT, or any ERISA Affiliate of either of them, of a Benefit Plan (or the
incurrence of any obligation to contribute to a Multiemployer Plan) by Borrower
or the REIT or any ERISA Affiliate of either of them. Within thirty (30) days
after the first to occur of (i) an amendment of any then existing Benefit Plan
of Borrower or the REIT or any ERISA Affiliate of either of them which will
result in an increase in the benefits under such Benefit Plan, (ii) Borrower's
or the REIT's receipt of a notification of any such increase, or (iii) the
establishment of any new Benefit Plan by Borrower or the REIT or any ERISA
Affiliate of either of them or the commencement of contributions to any Benefit
Plan to which Borrower or the REIT, or any ERISA Affiliate of either of them,
was not previously contributing: a copy of said amendment, notification or
Benefit Plan.
6.1.14 QUALIFICATION OF ERISA PLAN. Promptly upon, and in
any event within thirty (30) days after, receipt by Borrower, any UPP
Subpartnership, the REIT or any
78
79
ERISA Affiliate of any of them of an unfavorable determination letter from the
IRS regarding the qualification of a Plan under Section 401(a) of the Internal
Revenue Code, a copy of said determination letter, if such disqualification
would have a Material Adverse Effect on Borrower, any UPP Subpartnership or the
REIT.
6.1.15 MULTIEMPLOYER PLAN WITHDRAWAL LIABILITY. Promptly
upon, and in any event within thirty (30) days after receipt by Borrower, any
UPP Subpartnership, the REIT or any ERISA Affiliate of any of them of a notice
from a Multiemployer Plan regarding the imposition of withdrawal liability, a
copy of said notice.
6.1.16 FAILURE TO MAKE SECTION 412 PAYMENT. Promptly upon,
and in any event within thirty (30) days after, Borrower, any UPP
Subpartnership, the REIT or any ERISA Affiliate of any of them fails to make a
required installment under subsection (m) of Section 412 of the Internal
Revenue Code or any other payment required under Section 412 of the Internal
Revenue Code on or before the due date for such installment or payment, a
notification of such failure, if such failure could result in either the
imposition of a Lien under said Section 412 or otherwise have or could
reasonably be anticipated to have a Material Adverse Effect on Borrower, any
UPP Subpartnership or the REIT.
6.1.17 FAILURE OF THE REIT TO QUALIFY AS REAL ESTATE
INVESTMENT TRUST. Promptly upon, and in any event within forty-eight (48)
hours after Borrower first has actual knowledge of (i) the REIT failing to
continue to qualify as a real estate investment trust as defined in Section 856
of the Internal Revenue Code (or any successor provision thereof), (ii) any act
by the REIT causing its election to be taxed as a real estate investment trust
to be terminated, (iii) any act causing the REIT to be subject to the taxes
imposed by Section 857(b)(6) of the Internal Revenue Code (or any successor
provision thereto), or (iv) the REIT failing to be entitled to a dividends paid
deduction which meets the requirements of Section 857 of the Internal Revenue
Code, a notice of any such occurrence or circumstance.
6.1.18 ASSET ACQUISITIONS AND DISPOSITIONS, INDEBTEDNESS,
ETC. Without limiting Article VIII or any other restriction in the Loan
Documents, concurrent with notice to Borrower's priority mailing list and in
all events not later than public disclosure of any material Investments (other
than in Cash Equivalents), material acquisitions, dispositions, disposals,
divestitures or similar transactions involving Property, the raising of
additional equity or the incurring or repayment of material Indebtedness, by or
with Borrower, any UPP Subpartnership or the REIT, telephonic or facsimile
notice thereof to Xxxxx Xxxxx or such other person(s) as Agent may designate
from time to time, and, promptly upon consummation of such transaction, a
Compliance Certificate demonstrating in reasonable detail (which detail shall
include actual calculations) compliance, after giving effect to such proposed
transaction(s), with the covenants contained in Section 8.5 and Article IX.
79
80
6.1.19 TOTAL LIABILITIES TO GROSS ASSET VALUE RATIO.
Promptly upon each occasion on which the Total Liabilities to Gross Asset Value
Ratio, having been below 0.55:1 for any period of time, first exceeds 0.55:1,
notice thereof, and, within fifteen (15) days after the end of each calendar
month (commencing with the month during, or as of the end of which, such
occasion occurs and continuing to and including the calendar month the end of
which is at least thirty (30) days after the Total Liabilities to Gross Asset
Value Ratio no longer exceeds 0.55:1), an Officer's Certificate reporting, and
certifying as to the accuracy of, the Total Liabilities to Gross Asset Value
Ratio as of the last day of such calendar month.
6.1.20 OTHER INFORMATION. Such other information, reports,
contracts, schedules, lists, documents, agreements and instruments in the
possession of the REIT, Borrower or a UPP Subpartnership with respect to (i)
the Unencumbered Pool Properties, (ii) any material change in the REIT's
investment, finance or operating policies, or (iii) Borrower's, any UPP
Subpartnership's or the REIT's business, condition (financial or otherwise),
operations, performance, properties or prospects as Agent may from time to time
reasonably request, including, without limitation, annual information with
respect to cash flow projections, budgets, operating statements (current year
and immediately preceding year), rent rolls, lease expiration reports, leasing
status reports, note payable summaries, bullet note summaries, equity funding
requirements, contingent liability summaries, line of credit summaries, line of
credit collateral summaries, wrap note or note receivable summaries, schedules
of outstanding letters of credit, summaries of cash and Cash Equivalents,
projections of management and leasing fees and overhead budgets. Provided that
Agent gives Borrower reasonable prior notice and an opportunity to participate,
Borrower hereby authorizes Agent to communicate with the Accountants and
authorizes the Accountants to disclose to Agent any and all financial
statements and other information of any kind, including copies of any
management letter or the substance of any oral information, that such
accountants may have with respect to Borrower's, any UPP Subpartnership's or
the REIT's condition (financial or otherwise), operations, properties,
performance and prospects. Concurrently therewith, Agent will notify Borrower
of any such communication. At Agent's request, Borrower shall deliver a letter
addressed to the Accountants instructing them to disclose such information in
compliance with this Section 6.1.20.
6.1.21 PRESS RELEASES; SEC FILINGS AND FINANCIAL STATEMENTS.
Telephonic or telecopy notice to Agent concurrent with or prior to issuance of
any material press release concerning the REIT or Borrower and, as soon as
practicable after filing with the Commission, all reports and notices, proxy
statements, registration statements and prospectuses of the REIT. All
materials sent or made available generally by the REIT to the holders of its
publicly-held Securities or to a trustee under any indenture or filed with the
Commission, including all periodic reports required to be filed with the
Commission, will be delivered to Agent as soon as available.
80
81
6.1.22 ACCOUNTANT REPORTS. Copies of all reports prepared
by the Accountants and submitted to Borrower or the REIT in connection with
each annual, interim or special audit or review of the financial statements or
practices of Borrower or the REIT, including the comment letter submitted by
the Accountants in connection with their annual audit.
6.1.23 TERMINATION OR MODIFICATION OF EARTHQUAKE COVERAGE.
Promptly upon, and in any event within thirty (30) days after Borrower first
has knowledge of the termination or modification (with respect to the amount of
either the coverage provided or the applicable deductible) of the coverage
provided by the blanket property insurance rider regarding earthquake insurance
for Properties located in "Zone 1" maintained by Borrower as of the date of
this Agreement, a notice of such termination or modification.
6.2 ENVIRONMENTAL NOTICES. Borrower shall notify Agent, in
writing, as soon as practicable, and in any event within ten (10) days after
Borrower's, any UPP Subpartnership's or the REIT's learning thereof, of any:
(i) written notice or claim to the effect that Borrower, any UPP Subpartnership
or the REIT is or may be liable to any Person as a result of any material
Release or threatened Release of any Contaminant into the environment; (ii)
written notice that Borrower, any UPP Subpartnership or the REIT is subject to
investigation by any Governmental Authority evaluating whether any Remedial
Action is needed to respond to the Release or threatened Release of any
Contaminant into the environment; (iii) written notice that any Property is
subject to an Environmental Lien; (iv) written notice of violation to Borrower,
any UPP Subpartnership or the REIT (or awareness of a condition which could
reasonably be expected to result in a notice of violation) of any Environmental
Laws by Borrower, any UPP Subpartnership or the REIT, if such violation has a
Material Adverse Effect on Borrower or the REIT; (v) commencement or written
threat of any judicial or administrative proceeding alleging a violation of any
Environmental Laws; or (vi) written notice from a Governmental Authority of any
changes to any existing Environmental Laws that will have a Material Adverse
Effect on the operations of Borrower or the REIT. With regard to the matters
referred to in clauses (i) through (v) above, the same shall apply in respect
of each Unencumbered Pool Property and, in the case of other Property of
Borrower, any UPP Subpartnership or the REIT, only if the matter will have a
Material Adverse Effect on Borrower or the REIT.
6.3 CONFIDENTIALITY. Confidential Information obtained by Agent,
any Lender or any Designated Bid Lender pursuant to this Agreement or in
connection with the Committed Facility or the Bid Loan Facility shall not be
disseminated by Agent, Lenders or Designated Bid Lenders, and shall not be
disclosed to third parties except to regulators, taxing authorities and other
governmental agencies having jurisdiction over Agent or such Lender or
Designated Bid Lender or otherwise in response to Requirements of Law, to their
respective auditors and legal counsel and in connection with regulatory,
administrative and
81
82
judicial proceedings as necessary or relevant including enforcement proceedings
relating to the Loan Documents, and to any prospective permitted pledgee or
assignee of or participant in a Lender's or Designated Bid Lender's interest
under this Agreement or any prospective purchaser of the assets or a
controlling interest in any Lender or Designated Bid Lender, provided that such
prospective assignee, participant or purchaser first agrees to be bound by the
provisions of this Section 6.3. In connection with disclosures of Confidential
Information to any non-governmental third-party, the Lender(s) or Designated
Bid Lender(s) from whom the same has been requested shall, to the extent
feasible and permitted, give prior notice of such request to Borrower; however,
neither Agent nor any such Lender or Designated Bid Lender shall incur any
liability to Borrower for failure to do so. For purposes hereof, "Confidential
Information" shall mean all nonpublic information obtained by Agent, any Lender
or any Designated Bid Lender, unless and until such information becomes
publicly known, other than as a result of unauthorized disclosure by Agent, any
Lender or any Designated Bid Lender of such information.
ARTICLE VII
AFFIRMATIVE COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
7.1 WITH RESPECT TO BORROWER:
7.1.1 EXISTENCE. Borrower shall at all times maintain its
existence as a limited partnership and preserve and keep in full force and
effect its rights and franchises unless the failure to maintain such rights and
franchises does not have a Material Adverse Effect on Borrower.
7.1.2 QUALIFICATION. Borrower shall qualify and remain
qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have a Material Adverse Effect on Borrower.
7.1.3 COMPLIANCE WITH LAWS, ETC. Borrower shall (i) comply
with all Requirements of Law, and all restrictive covenants affecting Borrower
or the properties, performance, prospects, assets or operations of Borrower,
and (ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on Borrower.
82
83
7.1.4 PAYMENT OF TAXES AND CLAIMS. Borrower shall pay (i)
all taxes, assessments and other governmental charges imposed upon it or on any
of its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have a Material Adverse Effect on Borrower, and
(ii) except to the extent being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established, to the
extent required by GAAP, all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
Borrower, which have become due and payable and which by law have or may become
a Lien other than a judgment lien upon any of Borrower's properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto.
7.1.5 MAINTENANCE OF PROPERTIES; INSURANCE. Borrower shall
maintain in good repair, working order and condition, excepting ordinary wear
and tear, all of its Properties and will make or cause to be made all
appropriate repairs, renewals and replacements thereof. Borrower shall
maintain commercially reasonable and appropriate amounts of fire and extended
coverage and liability insurance, which insurance shall include in any event:
(a) with respect to each Property: (i) property
and casualty insurance (including coverage for flood and water damage
for any Property located within a 100-year flood plain) in an amount
not less than the replacement costs of the improvements thereon, and
(ii) loss of rental insurance income in an amount not less than one
year's gross revenues of such Property; and
(b) comprehensive general liability insurance in
an amount not less than $20,000,000 per occurrence.
At the request of Agent, Borrower shall provide, as to each Unencumbered Pool
Property evidence of insurance, including certificates of insurance and
binders.
7.1.6 INSPECTION OF PROPERTY; BOOKS AND RECORDS;
DISCUSSIONS. Borrower shall permit, and shall cause the REIT and each UPP
Subpartnership to permit, any authorized representative(s) designated by any
Lender (for its own account or on behalf of, and as administrative agent for,
its Designated Bid Lender) to visit and inspect any of its properties, to
inspect financial and accounting records and leases, and to make copies and
take extracts therefrom, all upon reasonable notice and at such times during
normal business hours and as often as any Lender (for its own account or on
behalf of, and as administrative agent for, its Designated Bid Lender) may
reasonably request. In connection therewith, Borrower shall pay all expenses
of the types described in Section 12.1. Borrower will keep proper books of
record and account in which entries, in conformity with GAAP and as otherwise
required by this Agreement and applicable Requirements of Law, shall be made
83
84
of all dealings and transactions in relation to its businesses and activities
and as otherwise required under Section 6.1.
7.1.7 MAINTENANCE OF PERMITS, ETC. Borrower will maintain
in full force and effect all Permits, franchises, patents, trademarks, trade
names, copyrights, authorizations or other rights necessary for the operation
of its business, except where the failure to obtain any of the foregoing would
not have a Material Adverse Effect on Borrower; and notify Agent in writing,
promptly after learning thereof, of the suspension, cancellation, revocation or
discontinuance of or of any pending or threatened action or proceeding seeking
to suspend, cancel, revoke or discontinue any material Permit, patent,
trademark, trade name, copyright, governmental approval, franchise
authorization or right.
7.1.8 CONDUCT OF BUSINESS. Except for Permitted
Investments pursuant to Section 9.9 (including, subject to the limitations of
Section 9.9, Investments in UPP Subpartnerships), Investments in cash and Cash
Equivalents, and Investments in Permitted UPP Secured Debt, Borrower shall
engage only in the business of ownership, operation and development of
industrial/warehouse, office/R&D and retail properties of the general type
owned by Borrower as of the Closing Date in California, Washington, Oregon,
Idaho and Nevada, and any other business activities of Borrower will remain
incidental thereto.
7.1.9 USE OF PROCEEDS. Borrower shall use the proceeds of
the Loans only for pre-development costs, development costs, acquisitions,
capital expenditures, working capital, equity Investments and repayment of
Indebtedness (including Indebtedness under the Existing Facility), including
required interest and/or principal payments thereon. Loan proceeds shall not
be used for the payment of dividends or other distributions to, or the
repurchase of shares or limited partnership interests from, the holder of any
equity interest in Borrower or the REIT.
7.2 WITH RESPECT TO UPP SUBPARTNERSHIPS:
7.2.1 EXISTENCE. Borrower will cause each UPP
Subpartnership at all times to maintain its existence as a Partnership and
preserve and keep in full force and effect its rights and franchises unless the
failure to maintain such rights and franchises would not have a Material
Adverse Effect on Borrower. Borrower will cause each UPP Subpartnership to be
owned and continue to be owned, directly or indirectly, only by Borrower and
the REIT and one or more transferor(s) of property to such UPP Subpartnership,
as hereinabove more specifically referred to.
7.2.2 QUALIFICATION. Borrower will cause each UPP
Subpartnership to qualify and remain qualified to do business in each
jurisdiction in which the nature of its business requires it to be so qualified
except for those jurisdictions where failure to so qualify does not have a
Material Adverse Effect on Borrower.
84
85
7.2.3 COMPLIANCE WITH LAWS, ETC. Borrower will cause each
UPP Subpartnership to (i) comply with all Requirements of Law, and all
restrictive covenants affecting such UPP Subpartnership or the properties,
performance, prospects, assets or operations of such UPP Subpartnership, and
(ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on Borrower.
7.2.4 PAYMENT OF TAXES AND CLAIMS. Borrower will cause
each UPP Subpartnership shall pay (i) all taxes, assessments and other
governmental charges imposed upon it or on any of its properties or assets or
in respect of any of its franchises, business, income or property before any
penalty or interest accrues thereon, the failure to make payment of which will
have a Material Adverse Effect on Borrower, and (ii) except to the extent being
contested in good faith by appropriate proceedings and for which appropriate
reserves have been established, to the extent required by GAAP, all claims
(including, without limitation, claims for labor, services, materials and
supplies) for sums, material in the aggregate to such UPP Subpartnership, which
have become due and payable and which by law have or may become a Lien other
than a judgment lien upon any of such UPP Subpartnership's properties or
assets, prior to the time when any penalty or fine shall be incurred with
respect thereto.
7.2.5 MAINTENANCE OF PERMITS, ETC. Borrower will cause
each UPP Subpartnership to maintain in full force and effect all Permits,
franchises, patents, trademarks, trade names, copyrights, authorizations or
other rights necessary for the operation of its business, except where the
failure to obtain any of the foregoing will not have a Material Adverse Effect
on Borrower; and Borrower shall notify Agent in writing, promptly after
learning thereof, of the suspension, cancellation, revocation or discontinuance
of or of any pending or threatened action or proceeding seeking to suspend,
cancel, revoke or discontinue any material Permit, patent, trademark, trade
name, copyright, governmental approval, franchise authorization or right.
7.2.6 CONDUCT OF BUSINESS. Each UPP Subpartnership shall
continue to be a Partnership with its sole business being owning, operating and
developing the Unencumbered Pool Property(ies) owned by it.
7.3 WITH RESPECT TO THE REIT:
7.3.1 CORPORATE EXISTENCE. The REIT shall at all times
maintain its corporate existence and preserve and keep in full force and effect
its rights and franchises unless the failure to maintain such rights and
franchises will not have a Material Adverse Effect on the REIT.
85
86
7.3.2 QUALIFICATION, NAME. The REIT shall qualify and
remain qualified to do business in each jurisdiction in which the nature of its
business requires it to be so qualified except for those jurisdictions where
failure to so qualify does not have a Material Adverse Effect on the REIT.
7.3.3 SECURITIES LAW COMPLIANCE. The REIT shall comply in
all material respects with all rules and regulations of the Commission and file
all reports required by the Commission relating to the REIT's publicly-held
Securities.
7.3.4 CONTINUED STATUS AS A REIT; PROHIBITED TRANSACTIONS.
The REIT (i) will continue to be a real estate investment trust as defined in
Section 856 of the Internal Revenue Code (or any successor provision thereto),
(ii) will not revoke its election to be a real estate investment trust, (iii)
will not engage in any "prohibited transactions" as defined in Section
856(b)(6)(iii) of the Internal Revenue Code (or any successor provision
thereto), and (iv) will continue to be entitled to a dividend paid deduction
meeting the requirements of Section 857 of the Internal Revenue Code.
7.3.5 NYSE/AMEX LISTED COMPANY. The common stock of the
REIT shall at all times be listed for trading and be traded on the New York
Stock Exchange or the American Stock Exchange.
7.3.6 COMPLIANCE WITH LAWS, ETC. The REIT shall (i) comply
with all Requirements of Law and restrictive covenants affecting the REIT and
(ii) obtain as needed all Permits necessary for its operations and maintain
such in good standing, except in each of the foregoing cases where the failure
to do so will not have a Material Adverse Effect on the REIT.
7.3.7 PAYMENT OF TAXES AND CLAIMS. The REIT shall pay (i)
all taxes, assessments and other governmental charges imposed upon it or on any
of its properties or assets or in respect of any of its franchises, business,
income or property before any penalty or interest accrues thereon, the failure
to make payment of which will have a Material Adverse Effect on the REIT, and
(ii) except to the extent being contested in good faith by appropriate
proceedings and for which appropriate reserves have been established, to the
extent required by GAAP, all claims (including, without limitation, claims for
labor, services, materials and supplies) for sums, material in the aggregate to
the REIT, which have become due and payable and which by law have or may become
a Lien other than a judgment lien upon any of the REIT's properties or assets,
prior to the time when any penalty or fine shall be incurred with respect
thereto.
86
87
ARTICLE VIII
NEGATIVE COVENANTS
Borrower covenants and agrees that, on and after the date
hereof, until payment in full of all of the Obligations, the expiration of the
Commitments and termination of this Agreement:
8.1 WITH RESPECT TO ALL PARTIES: Neither Borrower, the REIT nor
any UPP Subpartnership shall:
8.1.1 LIENS. (i) Directly or indirectly create, incur,
assume or permit to exist any Lien, except for Permitted Liens, on or with
respect to all or any portion of (A) any Unencumbered Pool Property or (B) any
interest of Borrower (direct or indirect) in any Person that owns any
Unencumbered Pool Property; (ii) directly or indirectly create, assume or
permit to exist any Lien on Permitted UPP Secured Debt; or (iii) directly or
indirectly create, assume or permit to exist any Negative Pledge on (A) any
Unencumbered Pool Property (other than Unencumbered Pool Property owned by a
UPP Subpartnership that is not a Guarantor Subpartnership), or (B) any interest
of Borrower (direct or indirect) in any Person that owns any Unencumbered Pool
Property.
8.1.2 TRANSFERS OF UNENCUMBERED POOL PROPERTY. Transfer,
directly or indirectly, all or any interest in (i) any Unencumbered Pool
Property except (A) upon the effectiveness of a Termination of Designation in
accordance with Section 3.2, or (B) to Borrower or to a UPP Subpartnership
(provided that Borrower shall not transfer any Unencumbered Pool Property to
(1) a UPP Subpartnership unless, upon giving effect to such transfer, the
aggregate Individual UPP Values of the Unencumbered Pool Properties owned by
UPP Subpartnerships (whether or not such UPP Subpartnerships are Guarantor
Subpartnerships) will not exceed ten percent (10%) of the Unencumbered Pool
Value, or (2) a UPP Partnership that is not a Guarantor Subpartnership unless,
upon giving effect to such transfer, the aggregate Individual UPP Values of the
Unencumbered Pool Properties owned by UPP Subpartnerships that are not
Guarantor Subpartnerships will not exceed five percent (5%) of the Unencumbered
Pool Value), or (ii) Permitted UPP Secured Debt.
8.1.3 RESTRICTIONS ON FUNDAMENTAL CHANGES.
(a) (i) Enter into any merger or consolidation
unless (A) if Borrower or the REIT is involved, (1) the Borrower or
REIT, as the case may be, is the surviving entity, and (2) as of the
closing of such merger or consolidation, Borrower would be in
compliance with each of the covenants contained in Article 9, in each
case, determined as of the end of the most recently concluded fiscal
quarter and as if such merger or consolidation had occurred on the
last day of such fiscal quarter, or (B) if one or more UPP
Subpartnerships (but not Borrower or the REIT)
87
88
is involved, a UPP Subpartnership is the surviving entity; or (b) in
the case of Borrower or the REIT, liquidate, wind-up or dissolve (or
suffer any liquidation or dissolution);
(b) Except for Permitted Investments, engage in
any line of business other than as expressly permitted under Section
7.1.8;
(c) Except with the prior written consent of
Agent, change its accounting practices with respect to the
capitalization of interest, as reflected in the December 31, 1996
Financials.
8.1.4 ERISA. Permit any ERISA Affiliates to do any of the
following to the extent that such act or failure to act would result in the
aggregate, after taking into account any other such acts or failure to act, in
a Material Adverse Effect on Borrower or the REIT:
(a) Engage, or knowingly permit an ERISA
Affiliate to engage, in any prohibited transaction described in
Section 406 of the ERISA or Section 4975 of the Internal Revenue Code
which is not exempt under Section 407 or 408 of ERISA or Section
4975(d) of the Internal Revenue Code for which a class exemption is
not available or a private exemption has not been previously obtained
from the DOL;
(b) Permit to exist any accumulated funding
deficiency (as defined in Section 302 of ERISA and Section 412 of the
Internal Revenue Code), whether or not waived;
(c) Fail, or permit an ERISA Affiliate to fail,
to pay timely required contributions or annual installments due with
respect to any waived funding deficiency to any Plan if such failure
could result in the imposition of a Lien or otherwise would have a
Material Adverse Effect on Borrower or the REIT;
(d) Terminate, or permit an ERISA Affiliate of
Borrower or the REIT to terminate, any Benefit Plan which would result
in any liability of Borrower or the REIT, or an ERISA Affiliate of
either of them, under Title IV of ERISA; or
(e) Fail, or permit any ERISA Affiliate to fail,
to pay any required installment under Section 412(m) of the Internal
Revenue Code or any other payment required under Section 412 of the
Internal Revenue Code on or before the due date for such installment
or other payment, if such failure could result in the imposition of a
Lien or otherwise would have a Material Adverse Effect on Borrower or
the REIT.
88
89
8.2 AMENDMENT OF CONSTITUENT DOCUMENTS. Except (i) for any such
amendment that is required (A) under any Requirement of Law imposed by any
Governmental Authority or (B) in order to maintain compliance with Section
7.3.4, or (ii) with the prior written consent of Majority Lenders: (1) neither
Borrower nor any UPP Subpartnership shall amend its or SWIP's Partnership
Agreement (including, without limitation, as to the admission of any new
partner, directly or indirectly), and (2) the REIT shall not amend its articles
of incorporation or by-laws; in any such case, in any manner that would have a
material adverse effect on the ability of such Person to perform its
obligations under the Loan Documents.
8.3 DISPOSAL OF UPP SUBPARTNERSHIP INTERESTS. Neither Borrower
nor the REIT will directly or indirectly convey, sell, transfer, assign, pledge
or otherwise encumber or dispose of any of its partnership (or other ownership)
interests in SWIP or in any UPP Subpartnership at any time when any Property
owned by such UPP Subpartnership is an Unencumbered Pool Property.
8.4 MARGIN REGULATIONS. No portion of the proceeds of any Loans
shall be used in any manner which might cause the extension of credit or the
application of such proceeds to violate Regulation G, U or X or any other
regulation of the Federal Reserve Board or to violate the Securities Exchange
Act or the Securities Act, in each case as in effect on the applicable Funding
Date.
8.5 CHANGE IN CONTROL. Borrower shall not permit the occurrence
of any Change in Control.
8.6 ORGANIZATION OF BORROWER, ETC. Borrower shall remain a
California limited partnership with the REIT as its sole general partner. At
no time shall Borrower be taxed as an association under the Internal Revenue
Code.
8.7 WITH RESPECT TO EACH UPP SUBPARTNERSHIP:
8.7.1 No UPP Subpartnership shall directly or indirectly
create, incur, assume or otherwise become or remain directly or indirectly
liable with respect to, any Indebtedness, except the Obligations, Permitted UPP
Secured Debt and trade debt incurred in the ordinary course of business.
8.7.2 No UPP Subpartnership shall directly or indirectly
create, incur, assume or permit to exist any Lien on or with respect to any of
its Property or assets, except Permitted Liens and Liens, in favor of Borrower,
securing Permitted UPP Secured Debt.
8.7.3 No UPP Subpartnership shall engage in any line of
business other than owning and operating one or more Unencumbered Pool
Properties.
89
90
8.7.4 There shall be no change in the ownership interests
of any UPP Subpartnership, other than transfers from one or more limited
partners to Borrower or the REIT or to another limited partner of such UPP
Subpartnership. There shall be no admission of partners to any UPP
Subpartnership after the date it becomes a UPP Subpartnership.
8.8 WITH RESPECT TO THE REIT:
8.8.1 The REIT shall not own any material assets or engage
in any line of business other than owning partnership interests in Borrower and
SWIP.
8.8.2 The REIT shall not directly or indirectly create,
incur, assume or otherwise become or remain directly or indirectly liable with
respect to, any Indebtedness, except the Obligations and other Borrower Debt.
8.8.3 The REIT shall not directly or indirectly create,
incur, assume or permit to exist any Lien on or with respect to any of its
Property or assets other than Permitted Liens.
8.8.4 The REIT shall at no time (i) cease to be a listed
company on either the New York Stock Exchange or the American Stock Exchange,
or (ii) cease to be a qualified real estate investment trust in the manner
referred to in Section 5.3.14.
8.8.5 The REIT will not directly or indirectly convey,
sell, transfer, assign, pledge or otherwise encumber or dispose of any of its
partnership interests in Borrower or SWIP.
ARTICLE IX
FINANCIAL COVENANTS
Borrower covenants and agrees that, on and after the date of
this Agreement and until payment in full of all the Obligations, the expiration
of all Commitments and the termination of this Agreement:
9.1 MINIMUM NET WORTH. Borrower will maintain a Net Worth of not
less than One Billion Twenty-Five Million Seven Hundred Eighty- Eight Thousand
Dollars ($1,025,788,000) plus ninety percent (90%) of Net Offering Proceeds
received by Borrower after the Closing Date.
9.2 TOTAL LIABILITIES TO GROSS ASSET VALUE RATIO. The ratio of
Total Liabilities of Borrower and its Subsidiaries (determined without
duplication) to Gross Asset Value (the "Total Liabilities to Gross Asset Value
Ratio") shall not exceed 0.55:1 other than during a
90
91
"Permitted Excess Period", as defined herein. Under no circumstances shall the
Total Liabilities to Gross Asset Value Ratio at any time exceed 0.60:1.
For purposes of this Section 9.2, "Permitted Excess Period" means a
period, during which the Total Liabilities to Gross Asset Value Ratio is
greater than 0.55:1 but less than or equal to 0.60:1, (a) the duration of which
does not exceed one hundred eighty (180) consecutive days, and (b) the first
day of which begins (i) at least thirty-one (31) days after the last day of the
Permitted Excess Period then most recently ended and (ii) at least one (1) year
after the last day of the Permitted Excess Period next preceding the Permitted
Excess Period then most recently ended.
9.3 SECURED DEBT TO GROSS ASSET VALUE RATIO. The ratio of Secured
Borrower Debt to Gross Asset Value shall not exceed, at any time, 0.30:1.
9.4 EBIDA TO INTEREST EXPENSE RATIO. The ratio of EBIDA to
Interest Expense shall not be less than 2.25:1.
9.5 EBIDA TO DEBT SERVICE AND CAPITAL EXPENDITURES RATIO. The
ratio of EBIDA to the sum of Debt Service and Capital Expenditures shall not be
less than 2.00:1.
9.6 UNENCUMBERED NOI TO UNSECURED INTEREST EXPENSE RATIO. The
ratio of Unencumbered NOI to Unsecured Interest Expense shall not be less than
2.00:1.
9.7 AGGREGATE OCCUPANCY RATE. The Aggregate Occupancy Rate of the
Unencumbered Pool Properties shall not be less than ninety percent (90%);
provided, however, that if, on or before the date on which the Aggregate
Occupancy Rate, having been at least ninety percent (90%), falls below that
level (such date, the "Initial Occupancy Deficiency Date"), Borrower has
delivered to Agent (i) a UPP Eligibility Certification pursuant to Section
3.1.2, or (ii) a request for the acceptance as Unencumbered Pool Property(ies)
pursuant to Section 3.1.3, with respect to one or more properties that, if
included as Unencumbered Pool Properties, would cause the Aggregate Occupancy
Rate to be at least ninety percent (90%) (the "Proposed Properties"), together
with calculations establishing that such is the case: no breach of this
covenant shall exist unless (1) either (A) such designation has not become
effective with respect to each of the Proposed Properties, or such request has
not been approved with respect to each of the Proposed Properties, as the case
may be, by the fortieth (40th) day after the Initial Occupancy Deficiency Date;
or (B) (if each designation or request with respect to a Proposed Property
becomes effective or is approved within such forty-day period) at the time that
the last of the Proposed Properties becomes an Unencumbered Pool Property (and
notwithstanding the inclusion of the Proposed Properties as Unencumbered Pool
Properties), the Aggregate Occupancy Level is below ninety percent (90%); or
(2) if either of the circumstances described in subclauses (A) and (B) of the
preceding clause (1) occurs, such deficiency in the Aggregate Occupancy
91
92
Rate is not otherwise cured by the earlier of (A) if such designation does not
become effective, or such request is not approved, with respect to any of the
Proposed Properties, the date as of which it is determined that such Proposed
Property will not become an Unencumbered Pool Property, or (B) the fortieth
(40th) day after the Initial Occupancy Deficiency Date.
9.8 DISTRIBUTIONS.
9.8.1 Subject to Section 9.8.2, aggregate distributions to
shareholders of the REIT and all limited partners of Borrower (except as
expressly excluded in the definition of Funds From Operations) shall not exceed
the sum of:
(a) the greater of (i) ninety-five percent (95%)
of Funds From Operations for any four (4) consecutive Fiscal Quarters,
or (ii) such greater amount, but not in excess of one hundred percent
(100%) of Funds From Operations for any four (4) consecutive Fiscal
Quarters, as Borrower may be required to distribute to its
shareholders in order to maintain compliance with Section 7.3.4; plus
(b) the amount of any previously undistributed
capital gains of Borrower.
For purposes of this Section 9.8, the term "distributions" shall mean and
include all dividends and other distributions to, and the repurchase of stock
or limited partnership interests from, the holder of any equity interests in
Borrower or the REIT.
9.8.2 No distributions shall be made during the continuance
of any Event of Default arising out of Borrower's failure to pay any of the
Obligations when due (a "Monetary Default"). Aggregate distributions during
the continuance of any Event of Default other than a Monetary Default shall not
exceed the lesser of (i) the aggregate amount permitted to be made during the
continuance thereof under Section 9.8.1(a), and (ii) the minimum amount that
the REIT must distribute to its shareholders in order to maintain compliance
with Section 7.3.4; and no distributions shall be made in respect of capital
gains during such continuance.
9.9 PERMITTED INVESTMENTS. Notwithstanding the limitations set
forth in Section 7.1.8, Borrower may make the following Permitted Investments,
so long as (i) the aggregate amount of all Permitted Investments (excluding
Investments in Permitted UPP Secured Debt) does not exceed, at any time, forty
percent (40%) of Gross Asset Value, and (ii) the aggregate amount of each of
the following categories of Permitted Investments does not exceed the specified
percentage of Gross Asset Value, in each case as of the date made:
92
93
Maximum
Percentage
Permitted Investment of Gross Asset Value
-------------------- --------------------
Land: 10%
Securities and Third Party Partner Debt: 10%
Investment Mortgages: 15%
Partnerships: 25%
provided that (i) the aggregate Investment in
Partnerships other than Majority Partnerships whose
properties are consistent with the type and location
of properties held by Borrower at the Closing Date
shall not exceed ten percent (10%) of Gross Asset
Value; (ii) the aggregate Individual UPP Values of
the Unencumbered Pool Properties owned by UPP
Subpartnerships (whether or not such UPP
Subpartnerships are Guarantor Subpartnerships) shall
not exceed ten percent (10%) of the Unencumbered Pool
Value; and (iii) the aggregate Individual UPP Values
of the Unencumbered Pool Properties owned by UPP
Subpartnerships that are not Guarantor
Subpartnerships shall not exceed five percent (5%) of
the Unencumbered Pool Value.
For purposes of calculating compliance with the foregoing: (1) the amount of
each Investment will be deemed to be the original Acquisition Price thereof;
(2) in the case of each Investment in Land, Investment Mortgages and
Partnerships, the nature of the underlying real property asset and the conduct
of business in respect thereof shall in all respects comply with the
limitations set forth in Section 7.1.8; and (3) "Partnerships" shall not
include the thirteen (13) Partnerships referred to on page 80 of Borrower's
Prospectus dated November 11, 1993 (which Partnerships own fifteen (15)
Properties in the State of Washington), so long as such Partnerships do not
acquire additional Properties and Borrower's direct or indirect interest
therein is not reduced.
93
94
9.10 CONSTRUCTION IN PROCESS. The net rentable square footage of
any and all Construction in Process (determined, for each construction project,
on the basis of the net rentable square footage it is projected to include upon
completion, per the applicable plans and specifications) shall not exceed
twenty percent (20%) of the aggregate net rentable square footage of all
improvements on real property (including Construction in Process and "build to
suit" projects excluded from the definition of that term as provided below)
owned or leased by Borrower or any Subsidiary. For purposes of this Section
9.10, "Construction in Process" shall include each improvement on real property
owned or leased by Borrower or any Subsidiary of Borrower as to which either of
the following is true:
(a) a certificate of occupancy (or its
equivalent) has not been issued with respect to such improvement; or
(b) less than eighty-five percent (85%) of the
net rentable square footage of such improvement is occupied by tenants
under fully executed leases who have commenced paying rent under such
leases;
provided that "Construction in Process" shall not include an improvement that
is being constructed for a single tenant that has agreed to occupy the entire
improvement pursuant to a fully executed lease under which (i) occupancy
thereunder is conditioned only upon completion of construction of such
improvement, and (ii) such tenant is otherwise unconditionally committed to
take occupancy upon completion of such construction.
9.11 CALCULATION. Each of the foregoing ratios and financial
requirements, other than under Section 9.2, shall be calculated as of the last
day of each Fiscal Quarter, but shall be satisfied at all times. The Total
Liabilities to Gross Asset Value Ratio shall be satisfied at all times, but
shall be reported (i) unless the Total Liabilities to Gross Asset Value Ratio,
as of the last day of any calendar month, exceeds 0.55:1, on a quarterly basis,
and (ii) if at any time the Total Liabilities to Gross Asset Value Ratio
exceeds 0.55:1, on a monthly basis thereafter until monthly reporting is no
longer required under Section 6.1.19. For purposes of determining compliance
with Sections 9.4, 9.5 and 9.6, the period covered thereby shall be the
immediately preceding Fiscal Quarter.
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.1 EVENTS OF DEFAULT. Each of the following occurrences shall
constitute an Event of Default under this Agreement:
10.1.1 FAILURE TO MAKE PAYMENTS WHEN DUE. Borrower shall
fail to pay (i) any amount due on the Termination Date, (ii) any principal when
due, or (iii) any interest on any Loan, or any fee or other amount payable
under any Loan Documents,
94
95
within five (5) days after the same becomes due (and, for purposes of this
Section 10.1.1, amounts stated to be payable "immediately" or "upon demand" are
due upon demand).
10.1.2 DISTRIBUTIONS. Borrower or the REIT shall breach any
covenant set forth in Section 7.3.4 or 9.8.
10.1.3 BREACH OF FINANCIAL COVENANTS. (i) Borrower shall
fail to satisfy any financial covenant set forth in Article IX (other than the
requirements in Section 9.2, 9.4, 9.5, 9.6 and 9.8) and such failure shall
continue for sixty (60) days; or (ii) Borrower shall fail to satisfy any
financial covenant set forth in Section 9.4, 9.5 or 9.6 as of the last day of
any Fiscal Quarter and as of the last day of each of the next two calendar
months (determined, in each of the latter cases, on the basis of the
three-month period ended as of such date); or (iii) Borrower shall fail to
satisfy the financial covenant set forth in Section 9.2 at any time.
10.1.4 OTHER DEFAULTS. Borrower, the REIT or any Guarantor
Subpartnership shall fail duly and punctually to perform or observe any
agreement, covenant or obligation binding on Borrower, the REIT or any
Guarantor Subpartnership under this Agreement or under any of the other Loan
Documents (other than as described in any other provision of this Section
10.1), and with respect to agreements, covenants or obligations for which no
time period for performance is otherwise provided, such failure shall continue
for fifteen (15) days after Borrower, the REIT or any Guarantor Subpartnership
knew of such failure (or such lesser period of time as is mandated by
applicable Requirements of Law); provided, however, if such failure is not
capable of cure within such fifteen (15) day period, then if Borrower promptly
undertakes action to cure such failure and thereafter diligently prosecutes
such cure to completion within forty-five (45) days after Borrower, the REIT or
any Guarantor Subpartnership knew of such failure (or within such longer period
of time as the Requisite Lenders may approve, in their sole discretion), then
Borrower shall not be in default hereunder; and provided further that if the
Aggregate Occupancy Rate falls below ninety percent (90%) and the proviso to
Section 9.7 applies, Borrower shall have no further opportunity to cure any
resulting breach of that Section prior to the occurrence of an Event of
Default, and such resulting breach shall constitute an Event of Default.
10.1.5 BREACH OF REPRESENTATION OR WARRANTY. Any
representation or warranty made or deemed made by Borrower, the REIT or any
Guarantor Subpartnership to Agent or any Lender or Designated Bid Lender herein
or in any of the other Loan Documents or in any statement, certificate or
financial statements at any time given by Borrower pursuant to any of the Loan
Documents (including, without limitation, any UPP Eligibility Certification)
shall be false or misleading in any material respect on the date as of which
made.
95
96
10.1.6 DEFAULT AS TO OTHER INDEBTEDNESS. (i) Borrower, the
REIT, any Guarantor Subpartnership or any Majority Partnership shall have (A)
failed to pay when due (beyond any applicable grace period), any amount in
respect of any Indebtedness of such party other than the Obligations if the
aggregate amount of such other Indebtedness is Ten Million Dollars
($10,000,000) or more; or (B) otherwise defaulted (beyond any applicable grace
period) under any Indebtedness of such party other than the Obligations if (1)
the aggregate amount of such other Indebtedness is Ten Million Dollars
($10,000,000) or more, and (2) the holder of such Indebtedness has accelerated
such Indebtedness; or (ii) any such other Indebtedness shall have otherwise
become payable, or be required to be purchased or redeemed, prior to its
scheduled maturity; or (iii) the holder(s) of any Lien, in any amount, commence
foreclosure of such Lien upon any Property having an aggregate value in excess
of Ten Million Dollars ($10,000,000); provided, however, that the foregoing
$10,000,000 limitation shall be increased to Twenty Million Dollars
($20,000,000) in the case of Nonrecourse Indebtedness, so long as such default
under or foreclosure on such Nonrecourse Indebtedness shall not give rise to an
Event of Default under Section 10.1.14.
10.1.7 INVOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
(a) At any time, an involuntary case or cases
shall have been commenced against (i) the REIT, (ii) Borrower, or
(iii) any one or more UPP Subpartnerships or other Subsidiaries of
Borrower contributing, in the aggregate, ten percent (10%) or more of
Borrower's Gross Asset Value at the time such case is commenced
(collectively, regardless of the number of such Persons, a "Material
Subsidiary"), and shall continue undismissed for a period of sixty
(60) consecutive days after commencement of the case(s), or a court
having jurisdiction shall enter a decree or order for relief in
respect of Borrower, the REIT or any Material Subsidiary in an
involuntary case(s), under any applicable bankruptcy, insolvency or
other similar law now or hereinafter in effect; or any other similar
relief shall be granted under any applicable federal, state or foreign
law with respect to Borrower, the REIT or any Material Subsidiary; or
(b) A decree or order of a court (or courts)
having jurisdiction in the premises for the appointment of a receiver,
liquidator, sequestrator, trustee, custodian or other officer having
similar powers over the REIT, Borrower or any Material Subsidiary, or
over all or a substantial part of the property of any such Person,
shall be entered; or an interim receiver, trustee or other custodian
of any such Person or of all or a substantial part of the property of
any such Person, shall be appointed or a warrant of attachment,
execution or similar process against any substantial part of the
property of any such Person, shall be issued and any such event shall
not be stayed, vacated, dismissed, bonded or discharged within sixty
(60) days of entry, appointment or issuance.
96
97
10.1.8 VOLUNTARY BANKRUPTCY; APPOINTMENT OF RECEIVER, ETC.
The REIT, Borrower or any Material Subsidiary shall have an order for relief
entered with respect to it or commence a voluntary case under any applicable
bankruptcy, insolvency or other similar law now or hereafter in effect, or
shall consent to the entry of an order for relief in an involuntary case, or to
the conversion of an involuntary case to a voluntary case, under any such law,
or shall consent to the appointment of or taking of possession by a receiver,
trustee or other custodian for all or a substantial part of its property; any
such Person shall make any assignment for the benefit of creditors or shall be
unable or fail, or admit in writing its inability, to pay its debts as such
debts become due; or the general partner (or Person(s) serving in a similar
capacity) or Board of Directors (or any committee thereof) of Borrower, the
REIT or any Material Subsidiary adopts any resolution or otherwise authorizes
any action to approve any of the foregoing.
10.1.9 JUDGMENTS AND ATTACHMENTS. (i) Any money judgment
(other than a money judgment covered by insurance but only if the insurer has
admitted liability with respect to such money judgment), writ or warrant of
attachment, or similar process involving in any case an amount in excess of Ten
Million Dollars ($10,000,000) shall be entered or filed against the REIT,
Borrower or any Majority Subsidiary or the assets of any such Person, and shall
remain undischarged, unvacated, unbonded or unstayed for a period of thirty
(30) days, or (ii) any judgment or order of any court or administrative agency
awarding material damages shall be entered against any such Person in any
action under the Federal securities laws seeking rescission of the purchase or
sale of, or for damages arising from the purchase or sale of, any Securities,
such judgment or order shall have become final after exhaustion of all
available appellate remedies and the payment of such judgment or order would
have a Material Adverse Effect on Borrower or the REIT.
10.1.10 DISSOLUTION. Any order, judgment or decree shall be
entered against the REIT, Borrower or any Material Subsidiary decreeing its
involuntary dissolution or split up and such order shall remain undischarged
and unstayed for a period in excess of thirty (30) days; or the REIT or
Borrower shall otherwise dissolve or cease to exist.
10.1.11 VALIDITY OF LOAN DOCUMENTS; SUBORDINATION OF
OBLIGATIONS. If for any reason (i) any Loan Document shall cease to be in full
force and effect, or (ii) any Obligation shall be subordinated in right of
payment to any other liability of Borrower, and, in either such case, such
condition or event shall continue for fifteen (15) days after Borrower, the
REIT or any Guarantor Subpartnership knew of such condition or event.
10.1.12 ERISA LIABILITIES. Any Termination Event occurs
which will or is reasonably likely to subject Borrower or the REIT, or any
ERISA Affiliate of either of them, to a liability which will have a Material
Adverse Effect on Borrower or the REIT, or the plan administrator of any
Benefit Plan applies for approval under Section 412(d) of the Internal Revenue
Code for a waiver of the minimum funding standards of Section 412(a) of
97
98
the Internal Revenue Code and the business hardship upon which the Section
412(d) waiver was based would have a Material Adverse Effect on Borrower or the
REIT.
10.1.13 CHANGE IN CONTROL. There shall occur any Change in
Control.
10.1.14 SOLVENCY; ENVIRONMENTAL LIABILITIES; MATERIAL ADVERSE
CHANGE. (i) Borrower or the REIT shall cease to be Solvent; or (ii) Borrower,
the REIT or any UPP Subpartnership becomes subject to any Liabilities and
Costs, which would have a Material Adverse Effect on Borrower or the REIT,
arising out of or related to (A) the Release or threatened Release at any
Property of any Contaminant into the environment, or any Remedial Action in
response thereto, or (B) otherwise any violation of any Environmental Laws; or
(iii) there shall have occurred any material adverse change in the business,
operations, properties, assets or condition (financial or otherwise) of
Borrower or the REIT.
10.1.15 BREACH OF GUARANTY. The REIT shall fail to duly and
punctually perform or observe any agreement, covenant or obligation under its
Guaranty, or any Guarantor Subpartnership shall fail to duly and punctually
perform or observe any agreement, covenant or obligation under its Guaranty.
An Event of Default shall be deemed "continuing" until cured
or waived in writing in accordance with Section 12.4.
10.2 RIGHTS AND REMEDIES.
10.2.1 ACCELERATION, ETC. Upon the occurrence of any Event
of Default described in the foregoing Section 10.1.7 or 10.1.8 with respect to
the REIT, Borrower or any UPP Subpartnership, the Commitments shall
automatically and immediately terminate and the unpaid principal amount of and
any and all accrued interest on the Loans shall automatically become
immediately due and payable, with all additional interest from time to time
accrued thereon and without presentment, demand or protest or other
requirements of any kind (including, without limitation, valuation and
appraisement, diligence, presentment, notice of intent to demand or accelerate
or notice of acceleration), all of which are hereby expressly waived by
Borrower, and the obligations of Lenders and (with respect to Bid Loans)
Designated Bid Lenders to make any Loans hereunder shall thereupon terminate;
and upon the occurrence and during the continuance of any other Event of
Default, Agent shall, at the request, or may, with the consent of the Requisite
Lenders, by written notice to Borrower, (i) declare that the Commitments are
terminated, whereupon the Commitments and the obligation of Lenders and (with
respect to Bid Loans) Designated Bid Lenders to make any Loan hereunder shall
immediately terminate, and/or (ii) declare the unpaid principal amount of, any
and all accrued and unpaid interest on the Loans and all of the other
Obligations to be, and the same shall thereupon be, immediately due and
98
99
payable with all additional interest from time to time accrued thereon and
without presentment, demand, or protest or other requirements of any kind
(including without limitation, valuation and appraisement, diligence,
presentment, notice of intent to demand or accelerate and of acceleration), all
of which are hereby expressly waived by Borrower. Without limiting Agent's
authority hereunder, on or after the Termination Date, Agent shall, at the
request, or may, with the consent, of the Requisite Lenders exercise any or all
rights and remedies under the Loan Documents or applicable law. Upon the
occurrence of and during the continuance of an Event of Default, Agent shall be
entitled to request and receive, by or through Borrower or appropriate legal
process, any and all information concerning the REIT, Borrower, any UPP
Subpartnership or any property of any of them, which is reasonably available to
or obtainable by Borrower.
10.2.2 WAIVER OF DEMAND. Except to the extent otherwise
expressly provided herein, demand, presentment, protest and notice of
nonpayment are hereby waived by Borrower. Borrower also waives, to the extent
permitted by law, the benefit of all exemption laws.
10.2.3 WAIVERS, AMENDMENTS AND REMEDIES. No delay or
omission of Agent, Lenders or Designated Bid Lenders to exercise any right
under any Loan Document shall impair such right or be construed to be a waiver
of any Event of Default or an acquiescence therein, and any single or partial
exercise of any such right shall not preclude other or further exercise thereof
or the exercise of any other right, and no waiver, amendment or other variation
of the terms, conditions or provisions of the Loan Documents whatsoever shall
be valid unless in a writing signed by Agent after obtaining written approval
thereof or the signature thereon of those Lenders (in their own capacities and,
to the extent that the consent of Designated Bid Lenders may be required, as
administrative agents for their respective Designated Bid Lenders) required to
approve such waiver, amendment or other variation, and then only to the extent
in such writing specifically set forth. All remedies contained in the Loan
Documents or by law afforded shall be cumulative and all shall be available to
Agent, Lenders and Designated Bid Lenders until the Obligations have been paid
in full, the Commitments have expired or terminated and this Agreement has been
terminated.
10.3 RESCISSION. If at any time after acceleration of the maturity
of the Loans, Borrower shall pay all arrears of interest and all payments on
account of principal of the Loans which shall have become due otherwise than by
acceleration (with interest on principal and, to the extent permitted by law,
on overdue interest, at the rates specified in this Agreement) and all Events
of Default and Unmatured Events of Default (other than nonpayment of principal
of and accrued interest on the Loans due and payable solely by virtue of
acceleration) shall be remedied or waived pursuant to Section 12.4, then by
written notice to Borrower, the Requisite Lenders may elect, in their sole
discretion, to rescind and annul the acceleration and its consequences; but
such action shall not affect any subsequent
99
100
Event of Default or Unmatured Event of Default or impair any right or remedy
consequent thereon. The provisions of the preceding sentence are intended
merely to bind Lenders and Designated Bid Lenders to a decision which may be
made at the election of the Requisite Lenders; they are not intended to benefit
Borrower and do not give Borrower the right to require Lenders or Designated
Bid Lenders to rescind or annul any acceleration hereunder, even if the
conditions set forth herein are met.
ARTICLE XI
AGENCY PROVISIONS
11.1 APPOINTMENT.
11.1.1 Each Lender hereby (i) designates and appoints Xxxxx
Fargo as Agent of such Lender under this Agreement and the Loan Documents, (ii)
for itself and on behalf of and as administrative agent for its Designated Bid
Lender (if any), authorizes and directs Agent to enter into the Loan Documents
other than this Agreement for the benefit of Lenders and Designated Bid
Lenders, and (iii) for itself and on behalf of and as administrative agent for
its Designated Bid Lender (if any), authorizes Agent to take such action on its
behalf and on behalf of its Designated Bid Lender under the provisions of this
Agreement and the Loan Documents and to exercise such powers as are set forth
herein or therein, together with such other powers as are reasonably incidental
thereto, subject to the limitations referred to in Sections 11.10.1, 11.10.2
and 11.10.3. Agent agrees to act as such on the express conditions contained
in this Article XI.
11.1.2 The provisions of this Article XI are solely for the
benefit of Agent, Lenders and Designated Bid Lenders, and Borrower shall not
have any rights to rely on or enforce any of the provisions hereof (other than
as expressly set forth in Sections 11.3, 11.9 and 11.12), provided, however,
that the foregoing shall in no way limit Borrower's obligations under this
Article XI. In performing its functions and duties under this Agreement, Agent
shall act solely as Agent of Lenders and does not assume and shall not be
deemed to have assumed any obligation toward or relationship of agency or trust
with or for Borrower or any other Person.
11.2 NATURE OF DUTIES. Agent shall not have any duties or
responsibilities except those expressly set forth in this Agreement or in the
Loan Documents. The duties of Agent shall be administrative in nature.
Subject to the provisions of Sections 11.5 and 11.7, Agent shall administer the
Loans in the same manner as it administers its own loans. Promptly following
the effectiveness of this Agreement, Agent shall send to each Lender its
originally executed Loan Note and the executed original, to the extent the same
are available in sufficient numbers, of each other Loan Document other than the
Loan Notes in favor of other Lenders and filed or recorded security document or
instruments, with the
100
101
latter to be held and retained by Agent for the benefit of all Lenders and
Designated Bid Lenders. Agent shall not have by reason of this Agreement a
fiduciary relationship in respect of any Lender or Designated Bid Lender.
Nothing in this Agreement or any of the Loan Documents, expressed or implied,
is intended or shall be construed to impose upon Agent any obligation in
respect of this Agreement or any of the Loan Documents except as expressly set
forth herein or therein. Each Lender and Designated Bid Lender shall make its
own independent investigation of the financial condition and affairs of the
REIT, Borrower, each UPP Subpartnership and each Unencumbered Pool Property in
connection with the making and the continuance of the Loans hereunder and shall
make its own appraisal of the creditworthiness of the REIT, Borrower and each
Guarantor Subpartnership, and, except as specifically provided herein, Agent
shall not have any duty or responsibility, either initially or on a continuing
basis, to provide any Lender or Designated Bid Lender with any credit or other
information with respect thereto, whether coming into its possession before the
Closing Date or at any time or times thereafter.
11.3 LOAN DISBURSEMENTS.
11.3.1 Promptly following receipt of a Notice of Borrowing,
Agent shall send a copy thereof by facsimile to each other Lender and shall
otherwise notify each Lender of the proposed Borrowing and the Funding Date.
Agent shall notify each Lender having an offer to make a Bid Loan accepted (in
whole or in part) of the amount of the Bid Loan(s) to be made by it (or its
Designated Bid Lender) on a particular Funding Date in accordance with Section
2.1.3(f). (a) Each Lender shall make available to Agent (or the funding bank
or entity designated by Agent) (i) in the case of a Borrowing consisting of
Committed Loans, the amount of such Lender's Pro Rata Share of such Borrowing,
or (ii) in the case of a Borrowing consisting of one or more Bid Loans, the
amount of the Bid Loans to be made by such Lender in connection therewith; and
(b) each Designated Bid Lender electing to fund one or more Bid Loans that
would otherwise have been made by its Designating Lender with respect to an
accepted Competitive Bid (or, if such Designated Bid Lender fails to do so, its
Designating Lender) shall make the aggregate amount of such Bid Loan(s)
available to Agent (or the funding bank or entity designated by Agent); in each
case, in immediately available funds not later than the times designated in
Section 11.3.2. Unless Agent shall have been notified by any Lender prior to
such time for funding in respect of any Borrowing that (1) such Lender does not
intend to make available to Agent such Lender's Pro Rata Share of such
Borrowing, or (2) in the case of a Bid Loan, neither such Lender nor its
Designated Bid Lender intends to make available to Agent the amount of such
Lender's Bid Loan(s), as the case may be, Agent may assume that such Lender
(or, if applicable, its Designated Bid Lender) has made such amount available
to Agent. In any case where, for any reason, neither a Lender nor (if
applicable) its Designated Bid Lender makes available to Agent the amount so
required to be made available by such Lender or its Designated Bid Lender,
Agent, in its sole discretion, may, but shall not be obligated to, fund to
Borrower such amount; provided, however, that Agent shall first have obtained
101
102
Borrower's concurrence in such funding by Agent if the same is to be made later
than the Funding Date for the subject Borrowing. If the amount so funded by
Agent is not in fact made available to Agent by the responsible Lender or its
Designated Bid Lender, then Borrower agrees to repay to Agent such amount,
together with interest thereon at the Base Rate for each day from the date such
amount is made available to Borrower until the date such amount is repaid to
Agent, not later than three (3) Business Days following Agent's demand to
Borrower that such repayment be made. In addition, such Lender agrees to pay
to Agent forthwith on demand such corresponding amount, together with interest
thereon at the Federal Funds Rate. If such Lender shall pay to Agent such
corresponding amount, such amount so paid shall constitute such Lender's Pro
Rata Share of such Borrowing (or such Lender's Bid Loan(s), as the case may
be), and if both such Lender and Borrower shall have paid and repaid,
respectively, such corresponding amount, Agent shall promptly return to
Borrower such corresponding amount in same day funds; interest paid by Borrower
in respect of such corresponding amount shall be prorated, as of the date of
payment thereof by such Lender to Agent. In the event that Agent shall not
have funded any amount to be funded by a Lender or its Designated Bid Lender
under this Section 11.3.1, then Borrower shall not be obligated to accept a
late funding of such Lender's Pro Rata Share or Bid Loan(s), as the case may
be, if such funding is made more than two (2) Business Days following the
applicable Funding Date. If Borrower declines to accept such delinquent
funding, Agent shall promptly return to such Lender the amount of such funding.
Nothing in this Section 11.3.1 shall alter the respective rights and
obligations of the parties hereunder in respect of a Defaulting Lender or a Non
Pro Rata Loan.
11.3.2 Requests by Agent for funding by Lenders or
Designated Bid Lenders of Loans will be made by telecopy. Each Lender shall
make the amount it is required to fund in respect of any Loan, and each
Designated Bid Lender shall make the amount of any Bid Loan that it elects to
fund, available to Agent in Dollars and in immediately available funds, to such
bank and account, in El Segundo, California (or to such bank and account in
such other place) as Agent may designate, not later than 10:00 a.m. (San
Francisco time) on the Funding Date designated in the Notice of Borrowing or
Competitive Bid with respect to such Loan, but, in the case of a Committed
Loan, in no event earlier than two (2) Business Days following Lender's receipt
of the applicable Notice of Borrowing. If any Bid Loan is funded by a
Designated Bid Lender, its Designating Lender shall provide Agent with notice
to that effect on the relevant Funding Date.
11.3.3 Nothing in this Section 11.3 shall be deemed to
relieve any Lender of its obligation hereunder to make its Pro Rata Share of
Loans, or to make any Bid Loan, on any Funding Date, nor, except to the extent
expressly provided (a) in Section 11.3.1 with respect to the obligation of any
Designating Bank to fund Bid Loans that are not funded by its Designated Bid
Lender or (b) in Section 11.12.3(b), shall any Lender or Designated Bid Lender
be responsible for the failure of any other Lender or Designated Bid Lender to
perform its obligations to make any Loan hereunder, and the Commitment of any
Lender
102
103
shall not be increased or decreased as a result of the failure by any other
Lender or Designated Bid Lender to perform its obligation to make a Loan.
11.4 DISTRIBUTION AND APPORTIONMENT OF PAYMENTS.
11.4.1 Subject to Section 11.4.2, payments actually received
by Agent for the account of Lenders and Designated Bid Lenders shall be paid to
Lenders (for their own accounts and, in their capacities as administrative
agents for their respective Designated Bid Lenders, for the accounts of such
Designated Bid Lenders) promptly after receipt thereof by Agent, but in any
event within two (2) Business Days, provided that Agent shall pay to Lenders
(for their own accounts and, in their capacities as administrative agents for
their respective Designated Bid Lenders, for the accounts of such Designated
Bid Lenders) interest thereon, at the lesser of (i) Federal Funds Rate and (ii)
the rate of interest applicable to such Loans, from the Business Day following
receipt of such funds by Agent until such funds are paid in immediately
available funds to Lenders (for their own accounts and, in their capacities as
administrative agents for their respective Designated Bid Lenders, for the
accounts of such Designated Bid Lenders). Subject to Section 11.4.2, (x) all
payments of principal and interest in respect of outstanding Committed Loans,
all payments of the fees described in this Agreement, and all payments in
respect of any other Obligations relating to the Committed Facility, shall be
allocated among such of Lenders as are entitled thereto, in proportion to their
respective Pro Rata Shares or otherwise as provided herein; and (y) all
payments of principal, interest or any other amount in respect of any Bid Loan
shall be paid to the Lender to whom, or whose Designated Bid Lender to whom,
such amount is due (for such Lenders' own accounts and, in their capacities as
administrative agents for their respective Designated Bid Lenders, for the
accounts of such Designated Bid Lenders), or otherwise as provided herein.
Agent shall promptly distribute, but in any event within two (2) Business Days,
to each Lender at its primary address set forth on the appropriate signature
page hereof or on the Assignment and Assumption, or at such other address as a
Lender may request in writing, such funds as it or its Designated Bid Lender
may be entitled to receive, provided that Agent shall in any event not be bound
to inquire into or determine the validity, scope or priority of any interest or
entitlement of any Lender or Designated Bid Lender and may suspend all payments
and seek appropriate relief (including, without limitation, instructions from
the Requisite Lenders or all Lenders and Designated Bid Lenders, as applicable,
or an action in the nature of interpleader) in the event of any doubt or
dispute as to any apportionment or distribution contemplated hereby. The order
of priority herein is set forth solely to determine the rights and priorities
of Lenders and Designated Bid Lenders as among themselves and may at any time
or from time to time be changed by Lenders and Designated Bid Lenders as they
may elect, in writing in accordance with Section 12.4, without necessity of
notice to or consent of or approval by Borrower or any other Person. All
payments or other sums received by Agent for the account of Lenders or
Designated Bid Lenders shall not constitute property or assets
103
104
of Agent and shall be held by Agent, solely in its capacity as agent for itself
and the other Lenders, subject to the Loan Documents.
11.4.2 Notwithstanding any provision hereof to the contrary,
until such time as a Defaulting Lender (or, in the case of a Defaulting Lender
that is a Designated Bid Lender, its Designating Lender) has funded (i) its Pro
Rata Share of a Committed Loan or its Bid Loan (in either such case, that was,
until such payment, a Non Pro Rata Loan) or all other Lenders and Designated
Lenders have received payment in full (whether by repayment or prepayment) of
the principal and interest due in respect of such Non Pro Rata Loan, such
Defaulting Lender's right to receive principal in respect of any Loan owing to
such Defaulting Lender hereunder (but not such Lender's or Designated Bid
Lender's right to receive payment of any other Obligation due to it) shall be
subordinated in right of payment, as provided in the following sentence, to the
prior payment in full of all principal, interest and fees in respect of all Non
Pro Rata Loans in which the Defaulting Lender has not funded the full amount it
was required to have funded with respect thereto (such principal, interest and
fees being referred to as "Senior Loans"). All amounts paid by Borrower and
otherwise due to be applied to the principal of Obligations owing to the
Defaulting Lender pursuant to the terms hereof (i) if due with respect to the
Committed Loans, shall be distributed by Agent to the other Lenders in
accordance with their respective Pro Rata Shares (recalculated for purposes
hereof to exclude the Defaulting Lender's Commitment), until all Senior Loans
constituting Committed Loans have been paid in full, and (ii) if due with
respect to any Bid Loan, shall be distributed by Agent to the other Lenders who
have (or whose Designated Bid Lenders have) Bid Loans then due and payable (for
such Lenders' own accounts and, in their capacities as administrative agents
for their respective Designated Bid Lenders, for the accounts of such
Designated Bid Lenders), in accordance with their respective pro rata shares
(based on the ratio of the aggregate amount due each such other Lender or
Designated Bid Lender to the aggregate amount then due and payable to all
Lenders and Designated Bid Lenders, but calculated for purposes hereof to
exclude amounts due to the Defaulting Lender with respect to the Bid Loans),
until all Senior Loans constituting Bid Loans then due and payable have been
paid in full. This provision governs only the relationship among Agent, each
Defaulting Lender, and the other Lenders and Designated Bid Lenders; nothing
hereunder shall limit the obligation of Borrower to repay all Loans in
accordance with the terms of this Agreement. The provisions of this section
shall apply and be effective regardless of whether an Event of Default occurs
and is then continuing, and notwithstanding (i) any other provision of this
Agreement to the contrary, (ii) any instruction of Borrower as to its desired
application of payments or (iii) the suspension of such Defaulting Lender's
right to vote on matters which are subject to the consent or approval of the
Requisite Lenders, the Majority Lenders or all Lenders and Designated Bid
Lenders. In addition, until any Lender's or Designated Bid Lender's failure to
reimburse Agent for any Liabilities and Costs as herein provided has been cured
(which, in the case of any failure to pay by a Designated Bid Lender, may be
104
105
cured by its Designating Bank), Agent shall be entitled to (1) withhold or
setoff, and to apply to the payment of the defaulted amount and any related
interest, any amounts to be paid to such Defaulting Lender under this
Agreement, and (2) (A) if such Defaulting Lender is a Lender, bring an action
or suit against such Defaulting Lender, or (B) if such Defaulting Lender is a
Designated Bid Lender, bring an action or suit against such Defaulting Lender's
Designating Lender (or, subject to the provisions of Section 11.12.3(e), such
Defaulting Lender) in a court of competent jurisdiction to recover the
defaulted amount and any related interest. In addition, the Defaulting Lender
(and, in the case of a Defaulting Lender that is a Designated Bid Lender, its
Designating Bank) shall indemnify, defend and hold Agent and each of the other
Lenders harmless from and against any and all Liabilities and Costs, plus
interest thereon at the Default Rate, which they may sustain or incur by reason
of or as a direct consequence of the Defaulting Lender's failure or refusal to
abide by its obligations under this Agreement.
11.5 RIGHTS, EXCULPATION, ETC. Neither Agent, any Affiliate of
Agent, nor any of their respective officers, directors, employees, agents,
attorneys or consultants, shall be liable to any Lender or Designated Bid
Lender for any action taken or omitted by them hereunder or under any of the
Loan Documents, or in connection herewith or therewith, except that Agent shall
be liable for its gross negligence or willful misconduct, or willful misconduct
in the performance of its express obligations hereunder. In the absence of
gross negligence or willful misconduct, Agent shall not be liable for any
apportionment or distribution of payments made by it in good faith pursuant to
Section 11.4, and if any such apportionment or distribution is subsequently
determined to have been made in error the sole recourse of any Person to whom
payment was due, but not made, shall be to recover from the recipients of such
payments any payment in excess of the amount to which they are determined to
have been entitled. Agent shall not be responsible to any Lender or Designated
Bid Lender for any recitals, statements, representations or warranties herein
or for the execution, effectiveness, genuineness, validity, enforceability,
collectibility or sufficiency of this Agreement or any of the other Loan
Documents, or any of the transactions contemplated hereby and thereby; or for
the financial condition of the REIT, Borrower, any UPP Subpartnership or any of
their Affiliates. Agent shall not be required to make any inquiry concerning
either the performance or observance of any of the terms, provisions or
conditions of this Agreement or any of the Loan Documents or the financial
condition of the REIT, Borrower, any UPP Subpartnership or any of their
Affiliates, or the existence or possible existence of any Unmatured Event of
Default or Event of Default.
11.6 RELIANCE. Agent shall be entitled to rely upon any written
notices, statements, certificates, orders or other documents, telecopies or any
telephone message believed by it in good faith to be genuine and correct and to
have been signed, sent or made by the proper Person, and with respect to all
matters pertaining to this Agreement or any of the Loan Documents and its
duties hereunder or thereunder, upon advice of legal counsel
105
106
(including counsel for Borrower), independent public accountant and other
experts selected by it.
11.7 INDEMNIFICATION. To the extent that Agent is not reimbursed
and indemnified by Borrower, Lenders will reimburse, within ten (10) Business
Days after notice from Agent, and indemnify and defend Agent for and against
any and all Liabilities and Costs which may be imposed on, incurred by, or
asserted against it in any way relating to or arising out of this Agreement or
any of the other Loan Documents or any action taken or omitted by Agent or
under this Agreement or any of the other Loan Documents, in proportion to each
Lender's Pro Rata Share; provided that no Lender shall be liable for any
portion of such Liabilities and Costs resulting from Agent's gross negligence
or willful misconduct or in respect of normal administrative costs and expenses
incurred by Agent (prior to any Event of Default or any Unmatured Event of
Default) in connection with its performance of administrative duties under this
Agreement and the other Loan Documents. The obligations of Lenders under this
Section 11.7 shall survive the payment in full of all Obligations and the
termination of this Agreement. In the event that after payment and
distribution of any amount by Agent to Lenders or Designated Bid Lenders, any
Lender or third party, including Borrower, any creditor of Borrower or a
trustee in bankruptcy, recovers from Agent any amount found to have been
wrongfully paid to Agent or disbursed by Agent to Lenders or Designated Bid
Lenders, then Lenders and Designated Bid Lenders, in proportion to their
respective allocable shares of such distribution, shall reimburse Agent for all
such amounts; provided, however, that the foregoing provisions shall not
prohibit any Designating Lender from agreeing with its Designated Bid Lender
that, as between such Designating Lender and Designated Bid Lender, such
Designating Lender shall be responsible for any reimbursement due to Agent
hereunder by its Designated Bid Lender, and such Designated Bid Lender's
obligations under this Section 11.7 shall be discharged to the extent that its
Designating Lender so reimburses Agent.
11.8 AGENT INDIVIDUALLY. With respect to its Pro Rata Share of the
Commitments hereunder and the Loans made by it, Agent shall have and may
exercise the same rights and powers hereunder and is subject to the same
obligations and liabilities as and to the extent set forth herein for any other
Lender. The terms "Lenders", "Majority Lenders", or "Requisite Lenders", or
any similar terms, may include Agent in its individual capacity as a Lender or
one of the Requisite Lenders, but neither "Majority Lenders" nor "Requisite
Lenders" shall include Agent solely in its capacity as Agent and neither such
term shall necessarily include Agent in its capacity as a Lender. Agent and
any Lender or Designated Bid Lender, and any Affiliate of any of the foregoing,
may accept deposits from, lend money to, and generally engage in any kind of
banking, trust or other business with Borrower or any of its Affiliates as if
it were not acting as Agent or Lender pursuant hereto.
11.9 SUCCESSOR AGENT; RESIGNATION OF AGENT; REMOVAL OF AGENT.
106
107
11.9.1 Agent may resign from the performance of all its
functions and duties hereunder at any time by giving at least thirty (30)
Business Days' prior written notice to Lenders and Borrower, and shall
automatically cease to be Agent hereunder in the event a petition in bankruptcy
shall be filed by or against Agent or the Federal Deposit Insurance Corporation
or any other Governmental Authority shall assume control of Agent or Agent's
interests under the Loan Documents. Further, the Requisite Lenders may remove
Agent at any time, for good cause, by giving at least thirty (30) Business
Days' prior written notice to Agent, Borrower and all other Lenders. Such
resignation or removal shall take effect upon the acceptance by a successor
Agent of appointment pursuant to Section 11.9.2 or 11.9.3; immediately
following the effectiveness of such appointment, Borrower shall pay to the
retiring or removed Agent any accrued and unpaid agency fee, or Agent shall
refund to Borrower any prepaid agency fee, in each case prorated to the
effective date of such appointment of a successor Agent.
11.9.2 Upon any such notice of resignation by or removal of
Agent, the Requisite Lenders shall appoint a successor Agent with the consent
of Borrower, which consent shall not be unreasonably withheld or delayed and
which consent shall not be required if there shall then exist any Event of
Default. Any successor Agent must be a Lender (i) the senior debt obligations
of which (or such Lender's parent's senior unsecured debt obligations) are
rated not less than BBB (or its equivalent) by one of the Rating Agencies, by
Xxxxx'x Investors Service, or by Duff & Xxxxxx Credit Rating Co., and (ii)
which has total assets in excess of Ten Billion Dollars ($10,000,000,000).
Such successor Agent shall separately confirm in writing with Borrower the fee
to be paid to such Agent pursuant to Section 2.5.2.
11.9.3 If a successor Agent shall not have been so appointed
within said thirty (30) Business Day period, the retiring or removed Agent,
with (unless an Event of Default has occurred and is continuing) the consent of
Borrower (which may not be unreasonably withheld or delayed), shall then
appoint a successor Agent who shall meet the requirements described in Section
11.9.2 and who shall serve as Agent until such time, if any, as the Requisite
Lenders, with the consent of Borrower, appoint a successor Agent as provided
above.
11.10 CONSENT AND APPROVALS.
11.10.1 Each of the following shall require the approval or
consent of the Majority Lenders:
(a) Approval of a new rating agency in place of
Fitch Investors Service, L.P. (per the definition of "Rating Agency");
107
108
(b) Approval of any new Unencumbered Pool
Property that does not meet the UPP Eligibility Criteria (Section
3.1.3);
(c) Approval of any amendment of organizational
documents that would have a material adverse effect on the ability of
Borrower or the REIT to perform their obligations under the Loan
Documents (Section 8.2); and
(d) Approval of any new UPP Subpartnership (per
the definition of that term).
11.10.2 Each of the following shall require the approval or
consent of the Requisite Lenders:
(a) Acceleration following an Event of Default
(Section 10.2.1) or rescission of such acceleration (Section 10.3);
(b) Approval of the exercise of rights and
remedies under the Loan Documents following an Event of Default
(Section 10.2.1);
(c) Removal of Agent and appointment of a
successor (Section 11.9);
(d) Approval of certain changes in GAAP affecting
calculation of financial covenants (Section 12.3); and
(e) Except as referred to in Section 11.10.3,
approval of any amendment, modification or termination of this
Agreement or any other Loan Document, or waiver of any provision
herein or therein (Section 12.4).
11.10.3 (i) Approval of (A) additional types of properties
that will constitute Approved Property Types for purposes of the UPP
Eligibility Criteria (Section 3.1.2(a)(ii) and (B) additional markets that will
constitute Approved Markets for purposes of the UPP Eligibility Criteria
(Section 3.1.2(a)(iv)), and (ii) each amendment, modification or waiver
specifically enumerated in Section 12.4.1, shall require the consent of all
Lenders.
11.10.4 In addition to the required consents or approvals
referred to in Section 11.10.1 or 11.10.2, Agent may at any time request
instructions from the Requisite Lenders or the Majority Lenders, as the case
may be, with respect to any actions or approvals which, by the terms of this
Agreement or of any of the Loan Documents, Agent is permitted or required to
take or to grant without instructions from any Lenders, and if such
instructions are promptly requested, Agent shall be absolutely entitled to
refrain from taking any action or to withhold any approval and shall not be
under any liability whatsoever to any Person for refraining from taking any
action or withholding any approval under any of
108
109
the Loan Documents until it shall have received such instructions from the
Requisite Lenders or the Majority Lenders, as applicable. Without limiting the
foregoing, no Lender or Designated Bid Lender shall have any right of action
whatsoever against Agent as a result of Agent acting or refraining from acting
under this Agreement or any of the other Loan Documents in accordance with the
instructions of the Requisite Lenders or, where applicable, the Majority
Lenders or all Lenders. Agent shall promptly notify each Lender at any time
that the Majority Lenders or the Requisite Lenders, as the case may be, have
instructed Agent to act or refrain from acting pursuant hereto.
11.10.5 Each Lender and Designated Bid Lender agrees that any
action taken by Agent at the direction or with the consent of the Majority
Lenders or the Requisite Lenders in accordance with the provisions of this
Agreement or any Loan Document, and the exercise by Agent at the direction or
with the consent of the Majority Lenders or the Requisite Lenders, as
applicable, of the powers set forth herein or therein, together with such other
powers as are reasonably incidental thereto, shall be authorized and binding
upon all Lenders and Designated Bid Lenders, except for actions specifically
requiring the approval of a greater number of Lenders or of Lenders holding a
greater aggregate interest in the Commitments or the outstanding Loans, as the
case may be. All communications from Agent to Lenders requesting Lenders'
determination, consent, approval or disapproval (i) shall be given in the form
of a written notice to each Lender (in its own capacity and, if such Lender is
a Designating Lender, in its capacity as administrative agent for its
Designated Bid Lender), (ii) shall be accompanied by a description of the
matter or thing as to which such determination, approval, consent or
disapproval is requested, or shall advise each Lender where such matter or
thing may be inspected, or shall otherwise describe the matter or issue to be
resolved, (iii) shall include, if reasonably requested by a Lender and to the
extent not previously provided to such Lender, written materials and a summary
of all oral information provided to Agent by Borrower in respect of the matter
or issue to be resolved, and (iv) shall include Agent's recommended course of
action or determination in respect thereof. Each Lender shall reply (on its
own behalf and on behalf of and as administrative agent for its Designated Bid
Lender, if any) promptly, but in any event within ten (10) Business Days (the
"Lender Reply Period"). Unless a Lender shall give written notice to Agent
that it (or, if applicable, its Designated Bid Lender) objects to the
recommendation or determination of Agent (together with a written explanation
of the reasons behind such objection) within the Lender Reply Period, such
Lender or its Designated Bid Lender, as the case may be, shall be deemed to
have approved of or consented to such recommendation or determination. With
respect to decisions requiring the approval of the Majority Lenders, the
Requisite Lenders or all Lenders, Agent shall submit its recommendation or
determination for approval of or consent to such recommendation or
determination to all Lenders and upon receiving the required approval or
consent shall follow the course of action or determination recommended to
Lenders by Agent or such other course of action recommended by the Requisite
Lenders or the
109
110
Majority Lenders, as applicable, and each non-responding Lender, and its
Designated Bid Lender, if any, shall be deemed to have concurred with such
recommended course of action.
11.10.6 Nothing contained in this Article XI, or in any other
provision of the Loan Documents, is intended to confer upon any Designated Bid
Lender the right to approve or consent to any matter other than a matter on
which Designated Bid Lenders are entitled to vote as described in Section
11.12.3.
11.11 AGENCY PROVISIONS RELATING TO CERTAIN ENFORCEMENT ACTIONS.
Should Agent (i) employ counsel for advice or other representation (whether or
not any suit has been or shall be filed) with respect to any of the Loan
Documents, or (ii) commence any proceeding or in any way seek to enforce its
rights or remedies under the Loan Documents, each Lender, upon demand therefor
from time to time, shall contribute its share (based on its Pro Rata Share) of
the reasonable costs and/or expenses of any such advice or other
representation, enforcement or acquisition, including, but not limited to, fees
of receivers, court costs and fees and expenses of attorneys to the extent not
otherwise reimbursed by Borrower; provided that Agent shall not be entitled to
reimbursement of its attorneys' fees and expenses incurred in connection with
the resolution of disputes between Agent and other Lenders or Designated Bid
Lenders unless Agent shall be the prevailing party in any such dispute. Any
loss of principal and interest resulting from any Event of Default shall be
shared by Lenders and Designated Bid Lenders in accordance with their
respective pro rata shares (determined on the basis of its outstanding Bid
Loans and on its Pro Rata Share of all outstanding Committed Loans) of all
Loans outstanding as of the date the Termination Date has occurred and all
outstanding Loans become, or are declared to be, due and payable in accordance
with the Loan Documents (subject to the provisions of Section 11.13); provided,
however, that the foregoing provisions shall not prohibit any Designating
Lender from agreeing with its Designated Bid Lender that, as between such
Designating Lender and Designated Bid Lender, such Designating Lender shall
bear any losses otherwise allocable to its Designated Bid Lender, and such
Designating Lender shall be permitted to pay over to its Designated Bid Lender
any amount to which such Designating Lender would be entitled hereunder.
11.12 ASSIGNMENTS AND PARTICIPATIONS.
11.12.1 Subject to Section 2.9, after first obtaining the
approval of Agent and (unless any Unmatured Event of Default or Event of
Default has occurred and is continuing) Borrower, which approval will not be
unreasonably withheld, each Lender may assign, to one or more Eligible
Assignees, all or a portion of its rights and obligations under this Agreement
(including without limitation all or a portion of its Commitment and the
Committed Loans owing to it) and other Loan Documents other than with respect
to outstanding Bid Loans made by such Lender; provided, however, that (i) each
such assignment shall be of a constant, and not a varying, percentage of the
assigning Lender's
110
111
rights and obligations under this Agreement and other Loan Documents (excluding
any rights or obligations with respect to outstanding Bid Loans), and the
assignment shall cover the same percentage of such Lender's Commitment and
Committed Loans, (ii) unless Agent and (unless an Unmatured Event of Default or
Event of Default has occurred and is continuing) Borrower otherwise consent,
the aggregate amount of the Commitment of the assigning Lender being assigned
pursuant to each such assignment (determined as of the date of the Assignment
and Assumption with respect to such assignment) shall in no event be less than
Fifteen Million Dollars ($15,000,000) and shall be an integral multiple of One
Million Dollars ($1,000,000), (iii) unless such assignment is an assignment of
the assigning Lender's entire remaining Commitment: after giving effect to
such assignment, the aggregate amount of the Commitment retained by the
assigning Lender shall in no event be less than Ten Million Dollars
($10,000,000), (iv) at all times prior to its resignation or replacement,
Agent's Commitment shall be equal to or exceed the Commitment of each other
Lender, (v) if, upon giving effect to any assignment by Xxxxxx Guaranty of any
portion of its interest in the Loans, Xxxxxx Guaranty's Pro Rata Share is no
longer at least as great as the Pro Rata Share of each Lender other than Agent,
Xxxxxx Guaranty shall cease, upon Borrower's written request, to be
Documentation Agent (without any need to appoint a successor Documentation
Agent), (vi) the parties to each such assignment shall execute and deliver to
Agent, for its approval and acceptance (and, unless an Unmatured Event of
Default or Event of Default has occurred and is continuing, for acknowledgement
by Borrower), an Assignment and Assumption, and (vii) Agent shall receive from
the assignor a processing fee of Three Thousand Dollars ($3,000). Unless Agent
or Borrower gives written notice to the assigning Lender that it objects to the
proposed assignment (together with a written explanation of the reasons behind
such objection) within ten (10) Business Days following receipt of the
assigning Lender's written request for approval of the proposed assignment,
Agent or Borrower, as the case may be, shall be deemed to have approved such
assignment. Upon such execution, delivery, approval and acceptance, and upon
the effective date specified in the applicable Assignment and Assumption, (X)
the assignee thereunder shall be a party hereto and, to the extent that rights
and obligations hereunder have been assigned to (and assumed by) it pursuant to
such Assignment and Assumption, have the rights and obligations of a Lender
hereunder, and (Y) the assigning Lender thereunder shall, to the extent that
rights and obligations hereunder have been assigned by it (and assumed by its
assignee) pursuant to such Assignment and Assumption, relinquish its rights and
be released from its obligations under this Agreement.
11.12.2 By executing and delivering an Assignment and
Assumption, the assigning Lender thereunder and the assignee thereunder confirm
to and agree with each other and the other parties hereto as follows: (i)
other than as provided in such Assignment and Assumption, such assigning Lender
makes no representation or warranty and assumes no responsibility with respect
to any statements, warranties or representations made in or in connection with
this Agreement or any other Loan Document or the execution, legality,
111
112
validity, enforceability, genuineness, sufficiency or value of this Agreement
or any other Loan Document or any other instrument or document furnished
pursuant hereto; (ii) such assigning Lender makes no representation or warranty
and assumes no responsibility with respect to the financial condition of the
REIT, Borrower or any UPP Subpartnership or the performance or observance by
the REIT, Borrower or any Guarantor Subpartnership of any of their respective
obligations under any Loan Document or any other instrument or document
furnished pursuant hereto; (iii) such assignee confirms that it has received a
copy of this Agreement, together with copies of the financial statements
referred to in Article V or delivered pursuant to Article VI to the date of
such assignment and such other Loan Documents and other documents and
information as it has deemed appropriate to make its own credit analysis and
decision to enter into such Assignment and Assumption; (iv) such assignee will,
independently and without reliance upon Agent, such assigning Lender or any
other Lender and based on such documents and information as it shall deem
appropriate at the time, continue to make its own credit decisions in taking or
not taking action under this Agreement; (v) such assignee appoints and
authorizes Agent to take such action as Agent on its behalf and to exercise
such powers under this Agreement and the other Loan Documents as are delegated
to Agent by the terms hereof and thereof, together with such powers as are
reasonably incidental thereto; and (vi) such assignee agrees that it will
perform in accordance with their terms all of the obligations which by the
terms of this Agreement are required to be performed by it as a Lender.
11.12.3
(a) Any Lender may at any time, with the prior
written consent of Borrower and Agent, which consent shall not be
unreasonably withheld, designate one Designated Bid Lender to fund Bid
Loans on behalf of such Designating Lender subject to the terms of
this Section 11.12.3, and the provisions of Sections 11.12.1 and
11.12.2 shall not apply to such designation, except that no
Designating Lender shall enter into any agreement under which its
Designated Bid Lender 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 amend any right of Designated Bid
Lenders or would (i) increase the amount of the Bid Loan Facility at
any time while any Bid Loan made by such Designated Bid Lender is
outstanding, (ii) extend the maturity date of any Bid Loan made by
such Designated Bid Lender, or (iii) decrease the interest rate
applicable to any Bid Loan made by such Designated Bid Lender. No
Lender may designate more than one Designated Bid Lender at any one
time, and, following the termination of a designation with respect to
one Designated Bid Lender, no new Designated Bid Lender may be
designated until all outstanding Bid Loans made by the prior
Designated Bid Lender have been paid in full. The parties to each
such designation shall execute and deliver to Borrower and Agent for
their acceptance a Designation Agreement, and, upon Agent's receipt of
(A) an appropriately completed Designation Agreement (1)
112
113
executed by a Designating Lender and a designee representing that it
is a Designated Bid Lender and (2) accepted by Borrower, and (B) a
processing fee in the amount of One Thousand Five Hundred Dollars
($1,500), Agent shall accept such Designation Agreement and register
such Designated Bid Lender as a Designated Bid Lender, and give prompt
notice thereof to Borrower, whereupon: from and after the effective
date specified in the Designation Agreement, the Designated Bid Lender
shall become a party to this Agreement, as a Designated Bid Lender,
with (X) a right to make Bid Loans on behalf of its Designating Lender
pursuant to Section 2.1.1(b)(iii) with respect to any Competitive Bid
of such Designating Lender that is accepted in whole or in part by
Borrower, and (Y) the other rights, and the obligations, provided
herein and therein, subject to the limitation, however, that,
notwithstanding the assumption by a Designated Bid Lender of certain
of the obligations of its Designating Lender (but without limiting the
Designating Lender's obligations under the following paragraph (b)),
no Designated Bid Lender shall be required to make payments with
respect to any of its obligations under this Agreement or any other
Loan Document except to the extent of excess cash flow of such
Designated Bid Lender (i.e., cash that is not otherwise required to
repay obligations of such Designated Bid Lender that are then due and
payable).
(b) Notwithstanding any other provision of this
Agreement or any other Loan Document: regardless of any designation
of a Designated Bid Lender hereunder, the Designating Lender making
such designation (i) shall be and remain obligated to Borrower, Agent
and each of the other Lenders and other Designated Bid Lenders for
each and every one of the obligations of the Designating Lender and
its Designated Bid Lender with respect to this Agreement or any other
Loan Document (including, without limitation, any indemnification
obligations and any other obligation to pay any amount otherwise
payable to Borrower by the Designated Bid Lender); and (ii) shall
indemnify, defend and hold Agent, Borrower, each Lender and each
Designated Bid Lender harmless from and against any and all losses,
costs, expenses (including reasonable attorneys' fees and the cost of
any services of in-house counsel) and liabilities incurred by any such
Person in connection with or arising from (A) (1) the non-performance
by such Designating Lender's Designated Bid Lender of any obligation
assumed by the Designated Bid Lender under its Designation Agreement,
(2) any other act or omission of the Designated Bid Lender committed
in violation of the provisions of any Loan Document, or (3) the
failure of any representation or warranty made by such Designating
Lender's Designated Bid Lender for the benefit of Agent, Borrower, any
other Lender or any other Designated Bid Lender to be true and correct
in all material respects, or (B) such Designating Lender's
nonperformance of any obligation owed to its Designated Bid Lender
under the Designation Agreement or
113
114
any other agreement between such Designating Lender and its Designated
Bid Lender with respect to the transactions contemplated hereby.
(c) Notwithstanding any designation hereunder,
Borrower and Agent shall continue to deal solely and directly with the
Designating Lender in connection with the Loans (including any Bid
Loans made by such Designating Lender's Designated Bid Lender) and the
Loan Documents. Each Designating Lender shall serve as the
administrative agent of its Designated Bid Lender and shall on behalf
of the Designated Bid Lender: (i) receive any and all payments made
for the benefit of the Designated Bid Lender (and Borrower's and
Agent's obligation to make any payment to the Designated Bid Lender
shall be satisfied upon payment of such amount to its Designating
Lender for the benefit of such Designated Bid Lender, without any duty
to see to the application thereof by such Designating Lender), and
(ii) give and receive all communications and notices and take all
actions under any Loan Document, including, without limitation, votes,
approvals, waivers, consents and amendments under or relating to this
Agreement and the other Loan Documents; and any notice or other
communication so delivered to a Designating Lender shall be deemed
validly delivered to its Designated Bid Lender, without any duty on
the part of Borrower or Agent to verify whether such notice or other
communication is actually delivered by such Designating Lender to its
Designated Bid Lender. Agent shall have no responsibility for, and
shall not incur liability to any Designated Bid Lender arising out of,
the disposition by such Designated Bid Lender's Designating Lender of
any funds or notice or other communication delivered to such
Designating Lender for the account of such Designated Bid Lender in
accordance herewith. Any notice, communication, vote, approval,
waiver, consent or amendment of or with respect to any Loan Document
that is delivered or executed on behalf of any Designated Bid Lender
shall be signed by its Designating Lender as administrative agent for
the Designated Bid Lender (whether or not noted as such thereon), and
need not be signed by the Designated Bid Lender on its own behalf.
Borrower, Agent, Lenders and the other Designated Bid Lenders may rely
thereon without any requirement that the Designated Bid Lender sign or
acknowledge the same. No Designated Bid Lender may assign or transfer
all or any portion of its interest hereunder or under any other Loan
Documents, other than (X) an assignment to the Designating Lender
which originally designated such Designated Bid Lender, or (Y) in
accordance with the provisions of Section 11.12.6 or Section 11.12.8.
(d) A Designated Bid Lender shall not have any
right to the payment of any amount under the Loan Documents other
thanwith respect to (i) principal of and interest (including, to the
extent, interest at the Default Rate) on Bid Loans made by such
Designated Bid Lender, (ii) the indemnity obligations of Borrower
under Section 12.2, and (iii) compensatory amounts payable by Borrower
114
115
pursuant to Section 2.4.8(c) in respect of Bid Loans made by such
Designated Bid Lender that are paid prior to the last day of the Bid
Loan Interest Period applicable thereto; and all other amounts payable
by Borrower hereunder or under any other Loan Document shall be
determined as if such Designated Bid Lender's Designating Lender had
not made such designation.
(e) Each of Borrower, Lenders, Designated Bid
Lenders and Agent hereby agrees that it will not institute against any
Designated Bid Lender, or join with any other Person in instituting
against any Designated Bid Lender, any bankruptcy, reorganization,
arrangement, insolvency or liquidation proceeding under any federal or
state bankruptcy or similar law, at any time prior to the date that is
one year and one day after payment in full of the latest maturing
commercial paper note issued by such Designated Bid Lender.
11.12.4 Agent shall maintain, at its address referred to on
the counterpart signature pages hereof, a copy of each Assignment and
Assumption and Designation Agreement delivered to and accepted by it and shall
record in the Loan Account the names and addresses of (i) each Lender and the
Commitment of, and principal amount of the Loans owing to, such Lender from
time to time and (ii) each Designated Bid Lender and the principal amount of
the Bid Loans owing to such Designated Bid Lender from time to time. Borrower,
Agent, Lenders and Designated Bid Lenders may treat each Person whose name is
recorded in the Loan Account as a Lender or Designated Bid Lender, as the case
may be, as such hereunder for all purposes of this Agreement.
11.12.5
(a) Upon its receipt of an Assignment and
Assumption executed by an assigning Lender and an assignee, Agent
shall, if such Assignment and Assumption has been properly completed
and is in substantially the form of Exhibit A, (i) accept such
Assignment and Assumption and (unless an Unmatured Event of Default or
Event of Default has occurred and is continuing) obtain the
acknowledgment of Borrower, (ii) record the information contained
therein in the Loan Account, and (iii) give prompt notice thereof to
Borrower. Upon request, Borrower will execute and deliver to Agent an
appropriate replacement promissory note or replacement promissory
notes in favor of each assignee (and assignor, if such assignor is
retaining a portion of its Commitment and Loans) reflecting such
assignee's (and assignor's) Pro Rata Share(s) of the Committed
Facility, as well as any then outstanding Bid Loans made by the
assigning Lender and any Bid Loans made in the future, by the
assigning Lender or its assignee, respectively; and Agent shall
promptly send each such replacement note to the relevant payee. Upon
execution and delivery of such replacement promissory notes the
original
115
116
promissory note or notes evidencing all or a portion of the
Commitments and Loans being assigned shall be cancelled and returned
to Borrower.
(b) Upon its receipt of a Designation Agreement
executed by a Designating Lender and its Designated Bid Lender and
accepted by Borrower, Agent shall, if such Designation Agreement has
been properly completed and is in substantially the form of Exhibit K,
(i) accept such Designation Agreement, (ii) record the information
contained therein in the Loan Account, and (iii) give prompt notice
thereof to Borrower.
11.12.6 Each Lender and Designated Bid Lender may sell
participations to one or more banks or other entities in or to all or a portion
of its rights and obligations under this Agreement (including without
limitation all or a portion of its Commitment (if applicable) and the Loans,
including Bid Loans, owing to it) and other Loan Documents; provided, however,
that (subject to the provisions of Section 11.12.3 with respect to dealings
between Agent and Lenders and any Designated Bid Lender): (i) such Lender's or
Designated Bid Lender's obligations under this Agreement (including without
limitation, in the case of a Lender, its Commitment to Borrower hereunder)
shall remain unchanged; (ii) (A) such Lender or (B) in the case of a
participation by a Designated Bid Lender, such Designated Bid Lender and its
Designating Lender, shall remain solely responsible to the other parties hereto
for the performance of such obligations; (iii) Borrower, Agent and the other
Lenders and Designated Bid Lenders shall continue to deal solely and directly
with such Lender or Designated Bid Lender in connection with such Lender's or
Designated Bid Lender's rights and obligations under this Agreement (including
with respect to any matters on which such participant may be entitled to vote
in accordance with this Section 11.12.6, and with regard to any and all
payments to be made under this Agreement; (iv) the governing participation
agreement shall not entitle the holder of any such participation to vote with
respect to any matter under this Agreement or any other Loan Document except
for (A) in the case of a participation by a Lender that includes an interest in
such Lender's Commitment, (1) increases in the Committed Facility or the Bid
Loan Facility, (2) extensions of the Termination Date or of the maturity date
of any Bid Loan in which such participant holds an interest, and (3) decreases
in the interest rates described in this Agreement; and (B) in the case of a
participation that is limited to an interest in one or more Bid Loans, (1)
increases in the amount of the Bid Loan Facility at any time while any Bid Loan
in which such participant has an interest is outstanding, (2) extensions of the
maturity date of any Bid Loan in which such participant holds an interest, and
(3) decreases in the interest rate applicable to any Bid Loan in which such
participant has an interest.
11.12.7 Borrower will use reasonable efforts to cooperate
with Agent, Lenders and Designated Bid Lenders in connection with the
assignment of interests under this Agreement, the designation of Designated Bid
Lenders or the sale of participations
116
117
herein; provided, however, that Borrower shall have no obligation to pay the
processing fees due Agent in respect of any assignment or designation.
11.12.8 Anything in this Agreement to the contrary
notwithstanding, and without the need to comply with any of the formal or
procedural requirements of this Agreement, including this Section 11.12, (i)
any Lender or Designated Bid Lender may at any time and from time to time
pledge and assign all or any portion of its rights under all or any of the Loan
Documents to a Federal Reserve Bank, and (ii) any Designated Bid Lender may at
any time and from time to time pledge its interest in Borrower's obligations
under the Loan Documents in respect of any Bid Loan in favor of any Liquidity
Provider qualifying as such with respect to the Bid Loan so pledged; provided,
in any such case, that no such pledge or assignment shall release such Lender
or Designated Bid Lender (or its Designating Bank), as the case may be, from
its obligations thereunder. To facilitate any such pledge or assignment to a
Federal Reserve Bank, Agent shall, at the request of such Lender or Designated
Bid Lender, enter into a letter agreement with the Federal Reserve Bank in
substantially the form of the exhibit to Appendix C to the Federal Reserve Bank
of New York Operating Circular No. 12.
11.12.9 Anything in this Agreement to the contrary
notwithstanding, any Lender may assign all or any portion of its rights and
obligations under this Agreement (including, without limitation, with respect
to outstanding Bid Loans, but only if such assignee is also being assigned, or
has previously been assigned, all or some portion of such Lender's Commitment),
to another branch or Affiliate of such Lender without first obtaining the
approval of Agent and Borrower, provided that (i) at the time of such
assignment such Lender is not a Defaulting Lender, (ii) such Lender gives Agent
and Borrower at least fifteen (15) days' prior written notice of any such
assignment, (iii) the parties to each such assignment execute and deliver to
Agent an Assignment and Assumption (modified as necessary to reflect any
assignment of an interest in Bid Loans), and (iv) Agent receives from assignor
a processing fee of Three Thousand Dollars ($3,000).
11.12.10 No Lender or Designated Bid Lender shall be
permitted to assign or sell all or any portion of its rights and obligations
under this Agreement to Borrower or any Affiliate of Borrower.
11.13 RATABLE SHARING. Subject to Sections 11.3 and 11.4, Lenders
and Designated Bid Lenders agree among themselves that (a) (i) unless the
Termination Date has occurred and all outstanding Loans have become, or have
been declared, due and payable in full: with respect to all amounts received
by them (whether received by voluntary payment, by counterclaim or cross action
or by the enforcement of any or all of the Obligations) which are applicable to
the payment of the principal, interest, fees or any other amount payable under
the Loan Documents, equitable adjustment will be made so that, in effect, all
such amounts will be shared among them ratably in accordance with their
117
118
pro rata shares of the amount to be so applied, based, in each case, on the
ratio of (A) the principal, interest, fees or other amount then due and payable
to each Lender or Designated Bid Lender, to (B) the aggregate amount then due
and payable to all of Lenders and Designated Bid Lenders in respect of
principal, interest, fees or such other amount, as the case may be (and, for
purposes of the allocation of payments of principal in respect of the Committed
Loans, a portion of such payment equal to each Lender's Pro Rata Share thereof
shall be deemed to be due and payable to such Lender as of the date of any such
payment); and (ii) if the Termination Date has occurred and all outstanding
Loans have become, or have been declared, due and payable in full: with
respect to all amounts received by them (whether received by voluntary payment,
by counterclaim or cross action or by the enforcement of any or all of the
Obligations) which are applicable to the payment of the Obligations, equitable
adjustment will be made so that, in effect, all such amounts will be shared
among them ratably in accordance with their pro rata shares of the amount to be
so applied, based, in each case, on the ratio of the aggregate principal amount
of all outstanding Loans owed to each Lender or Designated Bid Lender to the
aggregate principal amount of all of the outstanding Loans; and (b) if any of
them shall, by voluntary payment or by the exercise of any right of
counterclaim or otherwise, receive payment of a proportion of the aggregate
amount of the Obligations held by it which is greater than its share of the
payments on account of the Obligations (determined in accordance with the
preceding clause (a)), the one receiving such excess payment shall purchase,
without recourse or warranty, an undivided interest and participation (which it
shall be deemed to have done simultaneously upon the receipt of such payment)
in such Obligations owed to the others so that all such recoveries with respect
to such Obligations shall be applied ratably in accordance with the preceding
clause (a); provided, that if all or part of such excess payment received by
the purchasing party is thereafter recovered from it, those purchases shall be
rescinded and the purchase prices paid for such participations shall be
returned to that party to the extent necessary to adjust for such recovery, but
without interest except to the extent the purchasing party is required to pay
interest in connection with such recovery. Borrower agrees that any Lender or
Designated Bid Lender so purchasing a participation from another Lender or
Designated Bid Lender pursuant to this Section 11.13 may, to the fullest extent
permitted by law, exercise all its rights of payment with respect to such
participation as fully as if such Lender or Designated Bid Lender were the
direct creditor of Borrower in the amount of such participation.
11.14 DELIVERY OF DOCUMENTS. Agent shall as soon as reasonably
practicable distribute to each Lender (for itself or for transmittal to its
Designated Bid Lender, as applicable) at such Lender's primary address set
forth on the appropriate counterpart signature page hereof, or at such other
address as a Lender may request in writing, (i) all documents to which such
Lender or its Designated Bid Lender is a party or of which such Lender or its
Designated Bid Lender is a beneficiary set forth in Section 4.1, (ii) all
documents of which Agent receives copies from Borrower pursuant to Sections 6.1
and
118
119
12.6, (iii) all other documents or information which Agent is required to send
to Lenders and Designated Bid Lenders pursuant to the terms of this Agreement,
(iv) other information or documents received by Agent at the request of any
Lender (on its own behalf or on behalf of, and as administrative agent for, its
Designated Bid Lender), and (v) all notices received by Agent pursuant to
Section 6.2. In addition, within fifteen (15) Business Days after receipt of a
request in writing from a Lender for written information or documents provided
by or prepared by Borrower, the REIT or any UPP Subpartnership or Majority
Partnership, Agent shall deliver such written information or documents to such
requesting Lender if Agent has possession of such written information or
documents in its capacity as Agent or as a Lender.
11.15 NOTICE OF EVENTS OF DEFAULT. Agent shall not be deemed to
have knowledge or notice of the occurrence of any Unmatured Event of Default or
Event of Default (other than nonpayment of principal of or interest on the
Loans) unless Agent has received notice in writing from a Lender or Borrower
referring to this Agreement or the other Loan Documents, describing such event
or condition and expressly stating that such notice is a notice of an Unmatured
Event of Default or Event of Default. Should Agent receive such notice of the
occurrence of an Unmatured Event of Default or Event of Default, or should
Agent send Borrower a notice of Unmatured Event of Default or Event of Default,
Agent shall promptly give notice thereof to each Lender.
ARTICLE
MISCELLANEOUS
12.1 EXPENSES.
12.1.1 GENERALLY. Borrower agrees upon demand to pay, or
reimburse Agent for, all of Agent's reasonable external audit, legal,
appraisal, valuation and investigation expenses and for all other reasonable
out-of-pocket costs and expenses of every type and nature (including, without
limitation, the reasonable fees, expenses and disbursements of Agent's internal
appraisers, environmental advisors or legal counsel) incurred by Agent at any
time (whether prior to, on or after the date of this Agreement) in connection
with (i) its own audit and investigation of Borrower and the Unencumbered Pool
Properties; (ii) the negotiation, preparation and execution of this Agreement
(including, without limitation, the satisfaction or attempted satisfaction of
any of the conditions set forth in Article IV) and the other Loan Documents and
the making of the Loans; (iii) the review and, if applicable, acceptance of
additional Unencumbered Pool Properties, including reasonable attorneys' fees
and costs incurred in connection therewith; (iv) administration of this
Agreement, the other Loan Documents and the Loans, including, without
limitation, consultation with attorneys in connection therewith; and (v) the
protection, collection or enforcement of any of the Obligations.
119
120
12.1.2 AFTER EVENT OF DEFAULT. Borrower further agrees to
pay, or reimburse Agent and Lenders, for all reasonable out-of-pocket costs and
expenses, including without limitation reasonable attorneys' fees and
disbursements incurred by Agent or Lenders after the occurrence of an Event of
Default (i) in enforcing any Obligation or exercising or enforcing any other
right or remedy available by reason of such Event of Default; (ii) in
connection with any refinancing or restructuring of the credit arrangements
provided under this Agreement in the nature of a "work-out" or in any
insolvency or bankruptcy proceeding; (iii) in commencing, defending or
intervening in any litigation or in filing a petition, complaint, answer,
motion or other pleadings in any legal proceeding relating to Borrower, the
REIT or any UPP Subpartnership and related to or arising out of the
transactions contemplated hereby; or (iv) in taking any other action in or with
respect to any suit or proceeding (whether in bankruptcy or otherwise).
12.2 INDEMNITY. Borrower further agrees to defend, protect,
indemnify and hold harmless Agent, each and all of Lenders and Designated Bid
Lenders, each of their respective Affiliates and participants and each of the
respective officers, directors, employees, agents, attorneys and consultants
(including, without limitation, those retained in connection with the
satisfaction or attempted satisfaction of any of the conditions set forth in
Article IV) of each of the foregoing (collectively called the "Indemnitees")
from and against any and all Liabilities and Costs imposed on, incurred by, or
asserted against such Indemnitees (whether based on any federal or state laws
or other statutory regulations, including, without limitation, securities and
commercial laws and regulations, under common law or in equity, and based upon
contract or otherwise, including any Liabilities and Costs arising as a result
of a "prohibited transaction" under ERISA to the extent arising from or in
connection with the past, present or future operations of the REIT, Borrower or
any UPP Subpartnership or their respective predecessors in interest) in any
manner relating to or arising out of this Agreement or the other Loan
Documents, or any act, event or transaction related or attendant thereto, the
making of and participation in the Loans and the management of the Loans, or
the use or intended use of the proceeds of the Loans (collectively, the
"Indemnified Matters"); provided, however, that Borrower shall have no
obligation to (i) an Indemnitee hereunder with respect to (A) matters for which
such Indemnitee has been compensated pursuant to or for which an exemption is
provided in Section 2.4.7 or any other provision of this Agreement, and (B)
Indemnified Matters to the extent caused by or resulting from the willful
misconduct or gross negligence of that Indemnitee, as determined by a court of
competent jurisdiction; or (ii) any Designating Lender or Designated Bid Lender
(or other Indemnitee who is an Indemnitee solely by reason of its relationship
with such Designating Lender or Designated Bid Lender) in respect of any matter
with respect to which Borrower is entitled to be indemnified pursuant to
Section 11.12.3(b) or in respect of any act or omission by such Designating
Lender or its Designated Bid Lender under their Designation Agreement or any
other agreement entered into between them in connection therewith. To the
extent that the undertaking to
120
121
indemnify, pay and hold harmless set forth in the preceding sentence may be
unenforceable because it is violative of any law or public policy, Borrower
shall contribute the maximum portion which it is permitted to pay and satisfy
under applicable law, to the payment and satisfaction of all Indemnified
Matters incurred by the Indemnitees.
12.3 CHANGE IN ACCOUNTING PRINCIPLES. Except as otherwise provided
herein, if any changes in accounting principles from those used in the
preparation of the most recent financial statements delivered to Agent pursuant
to the terms hereof are hereinafter required or permitted by the rules,
regulations, pronouncements and opinions of the Financial Accounting Standards
Board or the American Institute of Certified Public Accountants (or successors
thereto or agencies with similar functions) and are adopted by the REIT,
Borrower or any UPP Subpartnership with the agreement of its independent
certified public accountants and such changes result in a change in the method
of calculation of any of the financial covenants, standards or terms found
herein, the parties hereto agree to enter into negotiations in order to amend
such provisions so as to equitably reflect such changes with the desired result
that the criteria for evaluating the financial condition of Borrower shall be
the same after such changes as if such changes had not been made; provided,
however, that no change in GAAP that would affect the method of calculation of
any of the financial covenants, standards or terms shall be given effect in
such calculations until such provisions are amended, in a manner satisfactory
to Agent and the Requisite Lenders, to so reflect such change in accounting
principles.
12.4 AMENDMENTS AND WAIVERS. (i) No amendment or modification of
any provision of this Agreement shall be effective without the written
agreement of the Requisite Lenders (after notice to all Lenders) and Borrower
(except for amendments to Section 11.4.1 or Section 11.4.2, which do not
require the consent of Borrower), and (ii) no termination or waiver of any
provision of this Agreement, or consent to any departure by Borrower therefrom,
shall in any event be effective without the written concurrence of the
Requisite Lenders (after notice to all Lenders), which the Requisite Lenders
shall have the right to grant or withhold at their sole discretion, except
that:
12.4.1 The following amendments, modifications or waivers
shall require the consent of all Lenders:
(a) increasing the Commitments or any Lender's
Commitment;
(b) changing the principal amount or final
maturity of the Committed Loans or of any Bid Loan;
(c) reducing the interest rates applicable to any
of the Loans;
(d) reducing the rates on which fees payable
pursuant hereto are determined;
121
122
(e) forgiving or delaying any amount payable or
receivable under Article II (other than late fees);
(f) changing the definition of "Requisite
Lenders", "Committed Facility", "Bid Loan Limit", "Loan Availability",
"Majority Lenders", "Pro Rata Shares" or "Unencumbered Pool Value";
(g) changing any provision contained in this
Section 12.4;
(h) releasing any obligor under any Loan
Document;
(i) consent to assignment by Borrower of all of
its duties and Obligations hereunder pursuant to Section 12.14;
(j) amending the ratio of Total Liabilities to
Gross Asset Value that Borrower is required to maintain pursuant to
Section 9.2; waiving any failure of Borrower to maintain such ratio;
or amending the definitions of "Total Liabilities", "Gross Asset
Value", "Cash Equivalents", "EBIDA", any defined term used in the
definition of "EBIDA", or "Permitted Excess Period"; and
(k) amending the definition of "Unsecured
Liabilities" or "Net Operating Income", or of any defined term used in
any of the foregoing definitions; amending the Aggregate Occupancy
Rate that Borrower is required to maintain with respect to the
Unencumbered Pool Properties pursuant to Section 9.7 or waiving any
failure of Borrower to maintain such Aggregate Occupancy Rate; or
amending or waiving any portion of Section 2.1.1 or Section 2.1.3.
12.4.2 No amendment, modification, termination or waiver of
any provision of Article XI or any other provision referring to Agent shall be
effective without the written concurrence of Agent, but only if such amendment,
modification, termination or waiver alters the obligations or rights of Agent.
Any waiver or consent shall be effective only in the specific instance and for
the specific purpose for which it was given. No notice to or demand on
Borrower in any case shall entitle Borrower to any other further notice or
demand in similar or other circumstances. Any amendment, modification,
termination, waiver or consent effected in accordance with this Section 12.4
shall be binding on each assignee, transferee or recipient of Agent's or any
Lender's Commitment under this Agreement or the Loans at the time outstanding.
12.5 INDEPENDENCE OF COVENANTS. All covenants hereunder shall be
given independent effect so that if a particular action or condition is not
permitted by any of such covenants, the fact that it would be permitted by an
exception to, or be otherwise within the limitations of, another covenant shall
not avoid the occurrence of an Event of Default or
122
123
Unmatured Event of Default if such action is taken or condition exists, and if
a particular action or condition is expressly permitted under any covenant,
unless expressly limited to such covenant, the fact that it would not be
permitted under the general provisions of another covenant shall not constitute
an Event of Default or Unmatured Event of Default if such action is taken or
condition exists.
12.6 NOTICES AND DELIVERY. Unless otherwise specifically provided
herein, any consent, notice or other communication herein required or permitted
to be given shall be in writing and may be personally served, telecopied or
sent by courier service or United States mail and shall be deemed to have been
given when delivered in person or by courier service, upon receipt of a
telecopy (or on the next Business Day if such telecopy is received on a
non-Business Day or after 5:00 p.m. (at the office of the recipient) on a
Business Day) or four (4) Business Days after deposit in the United States mail
(registered or certified, with postage prepaid and properly addressed).
Notices to Agent pursuant to Article II shall not be effective until received
by Agent. For the purposes hereof, the addresses of the parties hereto (until
notice of a change thereof is delivered as provided in this Section 12.6) shall
be as set forth below each party's name on the signature pages hereof, or, as
to each party, at such other address as may be designated by such party in a
written notice to all of the other parties. All deliveries to be made to Agent
for distribution to Lenders (or their respective Designated Bid Lenders) shall
be made to Agent at Lenders' respective addresses specified for notice on the
signature page hereto and in addition, a sufficient number of copies of each
such delivery shall be delivered to Agent for delivery to each Lender at the
address specified for deliveries on the signature page hereto or such other
address as may be designated by Agent in a written notice.
12.7 SURVIVAL OF WARRANTIES, INDEMNITIES AND AGREEMENTS. All
agreements, representations, warranties and indemnities made or given herein
shall survive the execution and delivery of this Agreement and the other Loan
Documents and the making and repayment of the Loans hereunder, and such
indemnities shall survive termination hereof.
12.8 FAILURE OR INDULGENCE NOT WAIVER; REMEDIES CUMULATIVE. No
failure or delay on the part of Agent, any Lender or any Designated Bid Lender
in the exercise of any power, right or privilege under any of the Loan
Documents shall impair such power, right or privilege or be construed to be a
waiver of any default or acquiescence therein, nor shall any single or partial
exercise of any such power, right or privilege preclude other or further
exercise thereof or of any other right, power or privilege. All rights and
remedies existing under the Loan Documents are cumulative to and not exclusive
of any rights or remedies otherwise available.
12.9 PAYMENTS SET ASIDE. To the extent that Borrower makes a
payment or payments to Agent, Lenders or Designated
123
124
Bid Lenders, or Agent, Lenders or Designated Bid Lenders exercise their rights
of setoff, and such payment or payments or the proceeds of such setoff or any
part thereof are subsequently invalidated, declared to be fraudulent or
preferential, set aside and/or required to be repaid to a trustee, receiver or
any other party under any bankruptcy law, state or federal law, common law or
equitable cause, then to the extent of such recovery, the Obligation or part
thereof originally intended to be satisfied, and all rights and remedies
therefor, shall be revived and continued in full force and effect as if such
payment had not been made or such setoff had not occurred. Each Lender
severally agrees to pay to Agent upon demand (i) in the case of an amount
received in respect of a Bid Loan, its allocable share of any amount so
recovered from or repaid by Agent, and (ii) in the case of any other amount
received under the Loan Documents, its Pro Rata Share of any amount so
recovered from or repaid by Agent; and each Designated Bid Lender agrees to pay
such Designated Bid Lender's allocable share of any amount so recovered from or
repaid by Agent in respect of any Bid Loan made by such Designated Bid Lender;
provided, however, that the foregoing clause shall not prohibit any Designating
Lender from agreeing with its Designated Bid Lender that, as between such
Designating Lender and Designated Bid Lender, such Designating Lender shall pay
to Agent any amount that would otherwise be due to Agent under this Section
12.9, and such Designated Bid Lender shall not be liable for any payment of any
such amount to the extent that its Designating Lender makes such payment.
12.10 SEVERABILITY. In case any provision in or obligation under
this Agreement or the other Loan Documents shall be invalid, illegal or
unenforceable in any jurisdiction, the validity, legality and enforceability of
the remaining provisions or obligations, or of such provision or obligation in
any other jurisdiction, shall not in any way be affected or impaired thereby,
provided, however, that if the rates of interest or any other amount payable
hereunder, or the collectibility thereof, are declared to be or become invalid,
illegal or unenforceable, Lenders' obligations to make Loans shall not be
enforceable.
12.11 HEADINGS. Section headings in this Agreement are included
herein for convenience of reference only and shall not constitute a part of
this Agreement for any other purpose or be given any substantive effect.
12.12 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY, AND SHALL
BE CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF
CALIFORNIA.
12.13 LIMITATION OF LIABILITY. To the extent permitted by
applicable law, no claim may be made by Borrower, any Lender or Designated Bid
Lender or any other Person against Agent, Documentation Agent or any Lender or
Designated Bid Lender, or the affiliates, directors, officers, employees,
attorneys or agents of any of them, for any special, indirect, consequential or
punitive damages in respect of any claim for breach of contract or any other
theory of liability arising out of or related to the transactions contemplated
by this
124
125
Agreement, or any act, omission or event occurring in connection therewith; and
Borrower and each Lender and Designated Bid Lender hereby waive, release and
agree not to xxx upon any claim for any such damages, whether or not accrued
and whether or not known or suspected to exist in its favor, provided that if a
Lender or Designated Bid Lender refuses to fund a Loan and a court of competent
jurisdiction finds that such refusal was without justification and in bad
faith, such Lender or Designated Bid Lender (and, in the case of a Designated
Bid Lender, its Designating Lender) may be liable to Borrower for Borrower's
reasonable and foreseeable damages resulting from such refusal to fund.
12.14 SUCCESSORS AND ASSIGNS. This Agreement and the other Loan
Documents shall be binding upon the parties hereto and their respective
successors and assigns and shall inure to the benefit of the parties hereto and
the successors and permitted assigns of Agent, Lenders and Designated Bid
Lenders. The terms and provisions of this Agreement shall inure to the benefit
of any assignee or transferee of the Loans and the Commitments of Lenders under
this Agreement, and in the event of such transfer or assignment, the rights and
privileges herein conferred upon Agent and Lenders shall automatically extend
to and be vested in such transferee or assignee, all subject to the terms and
conditions hereof. Borrower's rights or any interest therein hereunder, and
Borrower's duties and Obligations hereunder, shall not be assigned without the
consent of all Lenders.
12.15 CONSENT TO JURISDICTION AND SERVICE OF PROCESS; WAIVER OF JURY
TRIAL. ALL JUDICIAL PROCEEDINGS BROUGHT AGAINST BORROWER WITH RESPECT TO THIS
AGREEMENT OR ANY OTHER LOAN DOCUMENT MAY BE, AND ALL JUDICIAL PROCEEDINGS
BROUGHT BY BORROWER WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN DOCUMENT
SHALL BE, BROUGHT IN ANY STATE OR FEDERAL COURT OF COMPETENT JURISDICTION
HAVING SITUS WITHIN THE BOUNDARIES OF THE FEDERAL COURT DISTRICT OF THE
NORTHERN DISTRICT OF CALIFORNIA, AND BY EXECUTION AND DELIVERY OF THIS
AGREEMENT, BORROWER ACCEPTS, FOR ITSELF AND IN CONNECTION WITH ITS PROPERTIES,
GENERALLY AND UNCONDITIONALLY, THE JURISDICTION OF THE AFORESAID COURTS, AND
IRREVOCABLY AGREES TO BE BOUND BY ANY FINAL JUDGMENT RENDERED THEREBY FROM
WHICH NO APPEAL HAS BEEN TAKEN OR IS AVAILABLE. BORROWER IRREVOCABLY CONSENTS
TO THE SERVICE OF PROCESS OF ANY OF THE AFOREMENTIONED COURTS IN ANY SUCH
ACTION OR PROCEEDING BY THE MAILING OF COPIES THEREOF BY REGISTERED OR
CERTIFIED MAIL, POSTAGE PREPAID, TO ITS NOTICE ADDRESS SPECIFIED ON THE
SIGNATURE PAGES HEREOF. BORROWER, AGENT AND LENDERS EACH IRREVOCABLY WAIVES
(i) TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR
ANY OTHER LOAN DOCUMENT, AND (ii) ANY OBJECTION (INCLUDING, WITHOUT LIMITATION,
ANY OBJECTION OF THE LAYING OF VENUE OR BASED ON THE GROUNDS OF
125
126
FORUM NON CONVENIENS) WHICH IT MAY NOW OR HEREAFTER HAVE TO THE BRINGING OF ANY
SUCH ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OTHER LOAN
DOCUMENT IN ANY JURISDICTION SET FORTH ABOVE. NOTHING HEREIN SHALL AFFECT THE
RIGHT TO SERVE PROCESS IN ANY OTHER MANNER PERMITTED BY LAW OR SHALL LIMIT THE
RIGHT OF AGENT OR ANY LENDER TO BRING PROCEEDINGS AGAINST BORROWER IN THE
COURTS OF ANY OTHER JURISDICTION.
12.16 COUNTERPARTS; EFFECTIVENESS; INCONSISTENCIES. This Agreement
and any amendments, waivers, consents or supplements may be executed in
counterparts, each of which when so executed and delivered shall be deemed an
original, but all such together shall constitute but one and the same
instrument. This Agreement shall become effective when Borrower, the initial
Lenders and Agent have duly executed and delivered execution pages of this
Agreement to each other (delivery by Borrower to Lenders and by any Lender to
Borrower and any other Lender being deemed to have been made by delivery to
Agent). Agent shall send written confirmation of the Closing Date to Borrower
and each other Lender promptly following the occurrence thereof. Effective as
of the Closing Date, the commitments of the Original Lenders under the Existing
Facility shall terminate, and all accrued and unpaid obligations of Borrower
under the Existing Facility shall be due and payable in full. This Agreement
and each of the other Loan Documents shall be construed to the extent
reasonable to be consistent one with the other, but to the extent that the
terms and conditions of this Agreement are actually and directly inconsistent
with the terms and conditions of any other Loan Document, this Agreement shall
govern.
12.17 CONSTRUCTION. The parties acknowledge that each party and its
counsel have reviewed and revised this Agreement and that the normal rule of
construction to the effect that any ambiguities are to be resolved against the
drafting party shall not be employed in the interpretation of this Agreement or
any amendments or exhibits hereto.
12.18 OBLIGATIONS UNSECURED. It is the intent of the parties that
the Obligations, and the obligations of the REIT and the Guarantor
Subpartnerships under their respective Guaranties, shall constitute unsecured
obligations of Borrower, the REIT and each Guarantor Subpartnership,
respectively. Neither the restrictions and prohibitions set forth herein with
respect to the creation, incurrence, assumption or existence of any Lien on any
Property of Borrower or any other Person (including, without limitation,
Unencumbered Pool Properties and interests in Persons owning any Unencumbered
Pool Property), nor those set forth in any other Loan Document, are intended to
create or constitute a Lien of any nature upon any Property of Borrower, the
REIT or any other Person, and no such restriction or prohibition shall be
deemed to constitute any such Lien. This Section 12.18 shall not be deemed to
prevent Agent, any Lender or any Designated Bid Lender from obtaining a Lien as
security for the Obligations at any time hereafter pursuant to a mutual
126
127
agreement among the parties hereto expressly providing for such Lien or during
the continuance of any Event of Default.
12.19 ENTIRE AGREEMENT. This Agreement, taken together with all of
the other Loan Documents and all certificates and other documents delivered by
Borrower to Agent (including documents incorporating separate agreements
relating to the payment of fees), embodies the entire agreement and supersede
all prior agreements, written and oral, relating to the subject matter hereof.
127
128
IN WITNESS WHEREOF, this Agreement has been duly executed on the date
set forth above.
BORROWER: XXXXXXX PROPERTIES, L.P., a
California limited partnership
By: XXXXXXX PROPERTIES, INC.,
a Maryland corporation, its
general partner
By_________________________
Its_______________________
ADDRESS FOR NOTICE AND DELIVERY:
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: Xxxxx Xxxxxx
Executive Vice President and
Chief Financial Officer
Tel: (000) 000-0000
Fax: (000) 000-0000
with a copy to:
0000 Xxxx Xxxx Xxxx, Xxxxx 000
Xxxxx Xxxx, XX 00000
Attn: General Counsel
Tel: (000) 000-0000
Fax: (000) 000-0000
128
129
AGENT/LENDER: XXXXX FARGO BANK, NATIONAL ASSOCIATION
By______________________________
Xxxxxxxx Xxxxx
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Real Estate Industries Group
000 Xxxxxxxxxx Xxxxxx, 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxxxxxx Xxxxx
Vice President
Tel: (000) 000-0000
Fax: (000) 000-0000
Pro Rata Share: 12.0%
Revolving Loan
Commitment: $30,000,000
LIBOR OFFICE:
Real Estate Group Disbursement Center
0000 Xxxx Xxxx Xxxxx, Xxxxx 000
Xx Xxxxxxx, XX 00000
Attn:Xxxxx Xxxxxx
Telephone: (000)000-0000
Telecopy: (000)000-0000
129
130
DOCUMENTATION
AGENT/LENDER: XXXXXX GUARANTY TRUST COMPANY OF NEW YORK
By______________________________
Xxxxxxx X. Xxxxxxxxxx
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Xxxxxx Guaranty Trust Company of New York
00 Xxxx Xxxxxx
Xxx Xxxx, XX 00000-0000
Attn: Xxxxxxx X. Xxxxxxxxxx
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Xxxxxx Guaranty Trust Company of New York
c/o X.X. Xxxxxx Services, Inc.
Loan Operations, 3rd Floor
000 Xxxxxxx Xxxxxxxxxx Xxxx
Xxxxxx, XX 00000
Attn: Xxxxxxxx XxxXxxxxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
130
131
OTHER LENDERS: BANK OF AMERICA NATIONAL TRUST AND SAVINGS ASSOCIATION
doing business as SEAFIRST BANK
By______________________________
Xxxx Xxxxxx
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Seafirst Bank
Commercial Real Estate Group
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Seafirst Bank
Commercial Real Estate Group
000 Xxxxx Xxxxxx, Xxxxx 00
Xxxxxxx, XX 00000
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Note: the given addresses are for manual/courier delivery. For mail (to
either office), use the following:
Seafirst Bank
Commercial Real Estate Group, XXX-00
X.X. Xxx 0000
Xxxxxxx, XX 00000-0000
131
000
XXXXX XXXX XX XXXXXXXXXX, N.A.
By______________________________
Xxxx X. Xxxxxxx
Vice President
ADDRESS FOR NOTICE AND DELIVERY:
Capital Markets Division
000 Xxxxxxxxxx Xx. 0xx Xxxxx
Xxx Xxxxxxxxx, XX 00000
Attn: Xxxx X. Xxxxxxx
Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
000 Xxxxxxx Xxxxxx, Xxxxx 000
Xxxxxx Xxxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
132
133
COMMERZBANK AKTIENGESELLSCHAFT,
LOS ANGELES BRANCH
By_________________________________
Name_______________________________
Title______________________________
By_________________________________
Name_______________________________
Title______________________________
ADDRESS FOR NOTICE AND DELIVERY:
Commerzbank AG, Los Angeles Branch
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Commerzbank AG, Los Angeles Branch
000 Xxxx Xxxxx Xxxxxx, Xxxxx 0000
Xxx Xxxxxxx, XX 00000
Attn: Xxxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
133
134
BANKERS TRUST COMPANY
By______________________________
Xxxx Xxxxxxx
Managing Director
ADDRESS FOR NOTICE AND DELIVERY:
000 Xxxxxxx Xxxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxxxx XxXxxx
Associate
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
000 Xxxxxxx Xxxxxx, 00xx Xxxxx
Xxx Xxxx, XX 00000
Attn: Xxxxxx Xxxxxx
Assistant Vice President
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
134
135
THE FIRST NATIONAL BANK OF CHICAGO
By________________________________
Name______________________________
Title_____________________________
ADDRESS FOR NOTICE AND DELIVERY:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx X. Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
The First National Bank of Chicago
Xxx Xxxxx Xxxxxxxx Xxxxx
Xxxxx 0000
Xxxxxxx, XX 00000
Attn: Xxxxx Xxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
135
000
XXXXX XXXX XX XXXXXXXXXXX
Xxx Xxxx Branch
By_____________________________
Name___________________________
Title___________________________
By_____________________________
Name___________________________
Title___________________________
ADDRESS FOR NOTICE AND DELIVERY:
Union Bank of Switzerland
(New York Branch)
Real Estate Finance Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
Union Bank of Switzerland
(New York Branch)
Real Estate Finance Group
000 Xxxx Xxxxxx
Xxx Xxxx, Xxx Xxxx 00000-0000
Attn: Xxxxxxx Xxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
136
137
U.S. BANK NATIONAL ASSOCIATION,
fka FIRST BANK NATIONAL ASSOCIATION
By____________________________________
Name__________________________________
Title_________________________________
ADDRESS FOR NOTICE AND DELIVERY:
U.S. Bank National Association
First Xxxx Xxxxx, XXXX0000
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxxxxx Xxxxxx/
Xxxxxxx Xxxxxx
Telephone: (000) 000-0000/
(000) 000-0000
Telecopy: (000) 000-0000
Pro Rata Share: 11.0%
Revolving Loan
Commitment: $27,500,000
LIBOR OFFICE:
U.S. Bank National Association
First Xxxx Xxxxx, XXXX0000
000 Xxxxxx Xxxxxx Xxxxx
Xxxxxxxxxxx, Xxxxxxxxx 00000-0000
Attn: Xxxx Xxxxxxx
Telephone: (000) 000-0000
Telecopy: (000) 000-0000
137
138
LIST OF EXHIBITS AND SCHEDULES
Exhibits:
A - Form of Assignment and Assumption
B - Form of Unencumbered Pool Certificate
C - Form of Annual Operating Report
D - Form of Compliance Certificate
E - Form of Loan Notes
F - Form of Notice of Borrowing
G - Form of Fixed Rate Notice
H - Form of Competitive Bid Request
I - Form of Competitive Bid
J - Form of UPP Eligibility Certification
K - Form of Designation Agreement
Schedules:
1 - List of Unencumbered Pool Properties
5.1.3 - General Partners and Limited Partners of Borrower and
Each Guarantor Subpartnership
5.1.20 - Environmental Matters
138
139
TABLE OF CONTENTS
PAGE
ARTICLE I
DEFINITIONS
1.1 Certain Defined Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
1.2 Computation of Time Periods . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
1.3 Terms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
ARTICLE II
LOANS
2.1 Loan Advances and Repayment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
2.2 Authorization to Obtain Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.3 Lenders' Accounting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
2.4 Interest on the Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
2.5 Fees . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
2.6 Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
2.7 Increased Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
2.8 Notice of Increased Costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
2.9 Option to Replace Lenders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
ARTICLE III
UNENCUMBERED POOL PROPERTIES
3.1 Designation/Acceptance of Unencumbered Pool Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51
3.2 Termination of Designation as Unencumbered Pool Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
ARTICLE IV
CONDITIONS TO LOANS
4.1 Conditions to Initial Disbursement of Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
4.2 Conditions Precedent to All Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
ARTICLE V
REPRESENTATIONS AND WARRANTIES
5.1 Representations and Warranties as to Borrower, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
5.2 Representations and Warranties as to each UPP Subpartnership, Etc . . . . . . . . . . . . . . . . . . . . . . . . 70
5.3 Representations and Warranties as to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
139
140
ARTICLE VI
REPORTING COVENANTS
6.1 Financial Statements and Other Financial and Operating Information . . . . . . . . . . . . . . . . . . . . . . . . 76
6.2 Environmental Notices. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82
6.3 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 83
ARTICLE VII
AFFIRMATIVE COVENANTS
7.1 With Respect to Borrower . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 84
7.2 With Respect to UPP Subpartnerships . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 86
7.3 With Respect to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 87
ARTICLE VIII
NEGATIVE COVENANTS
8.1 With Respect to all Parties: Neither Borrower, the REIT nor any UPP Subpartnership shall . . . . . . . . . . . . 88
8.2 Amendment of Constituent Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.3 Disposal of UPP Subpartnership Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.4 Margin Regulations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.5 Change in Control . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.6 Organization of Borrower, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.7 With Respect to each UPP Subpartnership . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 91
8.8 With Respect to the REIT . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
ARTICLE IX
FINANCIAL COVENANTS
9.1 Minimum Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.2 Total Liabilities to Gross Asset Value . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 92
9.3 Secured Debt to Gross Asset Value Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.4 EBIDA to Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.5 EBIDA to Debt Service and Capital Expenditures Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.6 Unencumbered NOI to Unsecured Interest Expense Ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.7 Aggregate Occupancy Rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 93
9.8 Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.9 Permitted Investments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 94
9.10 Construction in Process . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 96
140
141
9.11 Calculation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
ARTICLE X
EVENTS OF DEFAULT; RIGHTS AND REMEDIES
10.1 Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 97
10.2 Rights and Remedies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 101
10.3 Rescission . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
ARTICLE XI
AGENCY PROVISIONS
11.1 Appointment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 102
11.2 Nature of Duties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.3 Loan Disbursements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 103
11.4 Distribution and Apportionment of Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 105
11.5 Rights, Exculpation, Etc . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 107
11.6 Reliance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.7 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 108
11.8 Agent Individually . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.9 Successor Agent; Resignation of Agent; Removal of Agent . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 109
11.10 Consent and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110
11.11 Agency Provisions Relating to Certain Enforcement Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 112
11.12 Assignments and Participations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 113
11.13 Ratable Sharing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 120
11.14 Delivery of Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
11.15 Notice of Events of Default . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 121
ARTICLE XII
MISCELLANEOUS
12.1 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.2 Indemnity . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 122
12.3 Change in Accounting Principles . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
12.4 Amendments and Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 123
12.5 Independence of Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.6 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125
12.7 Survival of Warranties, Indemnities and Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.8 Failure or Indulgence Not Waiver; Remedies Cumulative . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.9 Payments Set Aside . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
12.10 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 126
141
142
12.11 Headings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.12 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.13 Limitation of Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.14 Successors and Assigns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 127
12.15 Consent to Jurisdiction and Service of Process; Waiver of Jury Trial . . . . . . . . . . . . . . . . . . . . . . . 127
12.16 Counterparts; Effectiveness; Inconsistencies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 128
12.17 Construction . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.18 Obligations Unsecured . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
12.19 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 129
142
143
EXHIBIT E TO CREDIT AGREEMENT
LOAN NOTE
______________, 1997
FOR VALUE RECEIVED, XXXXXXX PROPERTIES, L.P., a California
limited partnership ("Borrower"), HEREBY PROMISES TO PAY to the order of
______________________________________ ("Lender") (for Lender's own account and,
in its capacity as administrative agent for its "Designated Bid Lender" (if
any), for the account of its Designated Bid Lender with respect to "Bid Loans"
funded by such Designated Bid Lender): the principal sum of (i)
_______________________ Million Dollars ($_______________) or if less, the
aggregate unpaid principal amount of all "Committed Loans" disbursed by Lender
pursuant to Lender's "Commitment" (as such terms are defined in the Credit
Agreement dated as of August __, 1997 (as amended, supplemented or restated from
time to time the "Credit Agreement"), among Borrower, Lender, certain other
Lenders and Designated Bid Lenders named therein or made parties thereto and
Xxxxx Fargo Bank, National Association, as Agent and Xxxxxx Guaranty Trust
Company of New York, as Documentation Agent), plus (ii) the aggregate unpaid
principal amount of all Bid Loans disbursed by Lender or its Designated Bid
Lender pursuant to the Loan Agreement, in each case, together with interest on
the unpaid principal balance of each such Committed Loan and Bid Loan at the
rate (or rates) determined in accordance with Section 2.4 of the Credit
Agreement from the date such principal is advanced until it is paid in full. It
is contemplated that there will be advances and payments under this Loan Note
from time to time, but no advances or payments under this Loan Note (including
payment in full of the unpaid balance of principal hereof prior to maturity)
shall affect or impair the validity or enforceability of this Loan Note as to
future advances hereunder.
This Loan Note is one of the Loan Notes referred to in and
governed by the Credit Agreement, which Credit Agreement, among other things,
contains provisions for the acceleration of the maturity hereof and for the
payment of certain additional sums to Lender upon the happening of certain
stated events. Capitalized terms used in this Loan Note without definition have
the same meanings as in the Credit Agreement.
The principal amount of each Bid Loan made by Lender or its
Designated Bid Lender, unless accelerated in accordance with the provisions of
the Credit Agreement as described below, is due and payable at the end of the
Bid Loan Interest Period applicable thereto. The principal amount of this Loan
Note, if not sooner paid, will be
144
due and payable, together with all accrued and unpaid interest and other amounts
due and unpaid under the Credit Agreement, on the Termination Date. Borrower may
make voluntary prepayments of all or a portion of the Committed Loans evidenced
by this Loan Note, upon prior written notice, in accordance with the provisions
of Section 2.6.1 or Section 2.9 of the Credit Agreement. Borrower may not make
voluntary prepayments of any Bid Loan.
Interest on the Loans is payable in arrears on the first
Business Day of each month during the term of the Credit Agreement, commencing
with the first Business Day of the first calendar month to begin after the date
of this Loan Note. Interest will be computed on the basis of the actual number
of days elapsed in the period during which interest accrues and a year of three
hundred sixty (360) days. The Credit Agreement provides for the payment by
Borrower of various other charges and fees, in addition to the interest charges
described in the Credit Agreement, as set forth more fully in the Credit
Agreement.
All payments of any amount becoming due under this Loan Note
shall be made in the manner provided in the Credit Agreement, in Dollars. Lender
may (and is hereby authorized, but shall not be obligated, to) attach to this
Note a schedule showing the amount of each Committed Loan or Bid Loan made by
Lender or its Designated Bid Lender pursuant to the Credit Agreement, the
Funding Date (and, in the case of a Bid Loan, maturity date) thereof, the rate
of interest applicable thereto from time to time, and each payment of principal
thereof or interest thereon. Such schedule, if so attached, shall be presumptive
evidence of the information set forth thereon, absent manifest error; provided,
however, that Lender's failure to attach such schedule or, if a schedule is
attached, to record all such information with respect to the Committed Loans and
Bid Loans evidenced hereby, shall not impair Borrower's obligation to pay in
full, in accordance with the Credit Agreement, all amounts due in respect of
such Loans.
Upon and after the occurrence of an Event of Default, unless
such Event of Default is waived as provided in the Credit Agreement, this Loan
Note may, at the option of Requisite Lenders and without demand, notice or legal
process of any kind, be declared by Agent, and in such case immediately shall
become, due and payable. Upon and after the occurrence of certain Events of
Default, this Loan Note shall, without any action by Lenders and without demand,
notice or legal process of any kind, automatically and immediately become due
and payable.
Demand, presentment, protest and notice of nonpayment and
protest, notice of intention to accelerate maturity, notice of acceleration of
maturity and notice of dishonor are hereby waived by Borrower. Subject to the
terms of the Credit Agreement, Lender (on its own behalf or as administrative
agent for, and on behalf of, its Designated Bid Lender, with respect to Bid
Loans funded by its Designated Bid Lender) may extend
2
145
the time of payment of this Loan Note, postpone the enforcement hereof, grant
any indulgences, release any party primarily or secondarily liable hereon or
agree to any subordination of Borrower's obligations hereunder without affecting
or diminishing Lender's (or its Designated Bid Lender's) right of recourse
against Borrower, which right is hereby expressly reserved.
This Loan Note has been delivered and accepted at San
Francisco, California. This Loan Note shall be interpreted in accordance with,
and the rights and liabilities of the parties hereto shall be determined and
governed by, the laws of the State of California.
In no contingency or event whatsoever shall interest charged
in respect of the Loans evidenced hereby, however such interest may be
characterized or computed, exceed the highest rate permissible under any law
that a court of competent jurisdiction shall, in a final determination, deem
applicable hereto. If such a court determines that Lender (or its Designated Bid
Lender) has received interest hereunder in excess of the highest rate applicable
hereto, Lender or its Designated Bid Lender, as the case may be shall, at
Lender's (or, if applicable, such Designated Bid Lender's) election, either (a)
promptly refund such excess interest to Borrower or (b) credit such excess to
the principal balance of the Loans funded by such Person. This provision shall
control over every other provision of all agreements between Borrower and Lender
or its Designated Bid Lender.
Whenever possible each provision of this Loan Note shall be
interpreted in such manner as to be effective and valid under applicable law,
but if any provision of this Loan Note shall be prohibited by or invalid under
applicable law, such provision shall be ineffective to the extent of such
prohibition or invalidity, without invalidating the remainder of such provision
or the remaining provisions of this Loan Note.
XXXXXXX PROPERTIES, L.P.,
a California limited partnership
By: XXXXXXX PROPERTIES, INC., a
Maryland corporation,
its general partner
By____________________________
Its_________________________
3
