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LOAN AGREEMENT
dated as of November 25, 1997
among
THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP,
as Borrower,
FLEET NATIONAL BANK,
as a Bank,
PNC BANK, NATIONAL ASSOCIATION,
as a Bank,
the other Banks signatory hereto, each as a Bank
and
PNC BANK, NATIONAL ASSOCIATION,
as Administrative Agent
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TABLE OF CONTENTS
Page
ARTICLE I. DEFINITIONS; ETC..................................................1
Section 1.01 Definitions..........................................1
Section 1.02 Accounting Terms....................................14
Section 1.03 Computation of Time Periods.........................14
Section 1.04 Rules of Construction...............................15
ARTICLE II. THE LOANS.......................................................15
Section 2.01 The Loans...........................................15
Section 2.02 Purpose.............................................15
Section 2.03 Advances Generally..................................15
Section 2.04 Procedures for Advances.............................16
Section 2.05 Extension of Maturity Date..........................16
Section 2.06 Interest Periods; Renewals..........................16
Section 2.07 Interest............................................17
Section 2.08 Fees................................................17
Section 2.09 Notes...............................................17
Section 2.10 Prepayments.........................................18
Section 2.11 Changes of Commitments..............................18
Section 2.12 Method of Payment...................................18
Section 2.13 Elections, Conversions or Continuation of Loans.....19
Section 2.14 Minimum Amounts.....................................19
Section 2.15 Certain Notices Regarding Elections, Conversions
and Continuations of Loans..........................19
Section 2.16 Late Payment Premium................................19
ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC..............................20
Section 3.01 Additional Costs....................................20
Section 3.02 Limitation on Types of Loans........................21
Section 3.03 Illegality..........................................21
Section 3.04 Treatment of Affected Loans.........................22
Section 3.05 Certain Compensation................................22
Section 3.06 Capital Adequacy....................................23
Section 3.07 Substitution of Banks...............................23
ARTICLE IV. CONDITIONS PRECEDENT............................................24
Section 4.01 Conditions Precedent to the Initial Advance.........24
Section 4.02 Conditions Precedent to Advances After the Initial
Advance.............................................26
Section 4.03 Deemed Representations..............................26
ARTICLE V. REPRESENTATIONS AND WARRANTIES...................................26
Section 5.01 Due Organization....................................26
Section 5.02 Power and Authority; No Conflicts; Compliance With
Laws................................................26
Section 5.03 Legally Enforceable Agreements......................27
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Section 5.04 Litigation..........................................27
Section 5.05 Good Title to Properties............................27
Section 5.06 Taxes...............................................27
Section 5.07 ERISA...............................................27
Section 5.08 No Default on Outstanding Judgments or Orders.......28
Section 5.09 No Defaults on Other Agreements.....................28
Section 5.10 Government Regulation...............................28
Section 5.11 Environmental Protection............................28
Section 5.12 Solvency............................................28
Section 5.13 Financial Statements................................28
Section 5.14 Valid Existence of Affiliates.......................29
Section 5.15 Insurance...........................................29
Section 5.16 Accuracy of Information; Full Disclosure............29
ARTICLE VI. AFFIRMATIVE COVENANTS...........................................29
Section 6.01 Maintenance of Existence............................29
Section 6.02 Maintenance of Records..............................29
Section 6.03 Maintenance of Insurance............................29
Section 6.04 Compliance with Laws; Payment of Taxes..............30
Section 6.05 Right of Inspection.................................30
Section 6.06 Compliance With Environmental Laws..................30
Section 6.07 Payment of Costs....................................30
Section 6.08 Maintenance of Properties...........................30
Section 6.09 Reporting and Miscellaneous Document Requirements...30
ARTICLE VII. NEGATIVE COVENANTS.............................................34
Section 7.01 Mergers Etc.........................................34
Section 7.02 Investments.........................................34
Section 7.03 Sale of Assets......................................34
Section 7.04 Interest Rate Hedging...............................34
Section 7.05 Partnership Committee of Borrower...................34
ARTICLE VIII. FINANCIAL COVENANTS...........................................35
Section 8.01 Net Worth...........................................35
Section 8.02 Relationship of Total Outstanding Indebtedness to Gross
Asset Value.........................................35
Section 8.03 Relationship of Secured Indebtedness to Gross Asset
Value...............................................35
Section 8.04 Relationship of Combined EBITDA to Interest Expense.35
Section 8.05 Relationship of Combined EBITDA to Adjusted Total
Outstanding Indebtedness............................35
Section 8.06 Combined EBTDA......................................35
Section 8.07 Unsecured Debt Yield................................35
Section 8.08 Relationship of Unencumbered Combined EBITDA to
Interest Expense on Unsecured Indebtedness..........35
ARTICLE IX. EVENTS OF DEFAULT...............................................36
Section 9.01 Events of Default...................................36
Section 9.02 Remedies............................................38
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS......................38
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Section 10.01 Appointment, Powers and Immunities of Administrative
Agent...............................................38
Section 10.02 Reliance by Administrative Agent....................38
Section 10.03 Defaults............................................39
Section 10.04 Rights of Administrative Agent as a Bank............39
Section 10.05 Indemnification of Administrative Agent.............39
Section 10.06 Non-Reliance on Administrative Agent and Other
Banks...............................................40
Section 10.07 Failure of Administrative Agent to Act..............40
Section 10.08 Resignation or Removal of Administrative Agent......40
Section 10.09 Amendments Concerning Agency Function...............41
Section 10.10 Liability of Administrative Agent...................41
Section 10.11 Transfer of Agency Function.........................41
Section 10.12 Non-Receipt of Funds by Administrative Agent........41
Section 10.13 Withholding Taxes...................................41
Section 10.14 Minimum Commitment by Fleet and PNC.................42
Section 10.15 Pro Rata Treatment..................................42
Section 10.16 Sharing of Payments Among Banks.....................42
Section 10.17 Possession of Documents.............................42
ARTICLE XI. NATURE OF OBLIGATIONS...........................................43
Section 11.01 Absolute and Unconditional Obligations..............43
Section 11.02 Non-Recourse to TRG Partners........................43
ARTICLE XII. MISCELLANEOUS..................................................44
Section 12.01 Binding Effect of Request for Advance...............44
Section 12.02 Amendments and Waivers..............................44
Section 12.03 Usury...............................................44
Section 12.04 Expenses; Indemnification...........................44
Section 12.05 Assignment; Participation...........................45
Section 12.06 Documentation Satisfactory..........................47
Section 12.07 Notices.............................................47
Section 12.08 Intentionally Omitted...............................47
Section 12.09 Table of Contents; Headings.........................47
Section 12.10 Severability........................................47
Section 12.11 Counterparts........................................47
Section 12.12 Integration.........................................47
Section 12.13 GOVERNING LAW.......................................48
Section 12.14 Waivers.............................................48
Section 12.15 JURISDICTION; IMMUNITIES............................48
EXHIBIT A - Authorization Letter
EXHIBIT B - Solvency Certificate
EXHIBIT C - Note
EXHIBIT D - List of Affiliates
EXHIBIT E - Assignment and Assumption Agreement
iii
LOAN AGREEMENT ("this Agreement") dated as of November 25, 1997
among THE TAUBMAN REALTY GROUP LIMITED PARTNERSHIP, a limited partnership
organized and existing under the laws of the State of Delaware ("Borrower"),
FLEET NATIONAL BANK ("Fleet"), PNC BANK, NATIONAL ASSOCIATION (in its individual
capacity and not as Administrative Agent, "PNC") and the lenders signatory
hereto (Fleet, PNC, said other lenders signatory hereto, and the lenders who
from time to time become Banks pursuant to Section 3.07 or 12.05, each a "Bank"
and collectively, the "Banks") and PNC BANK, NATIONAL ASSOCIATION, as
administrative agent for the Banks (in such capacity, together with its
successors in such capacity, "Administrative Agent").
Borrower has requested that the Banks extend credit as provided
herein, and the Banks are prepared to extend such credit.
NOW, THEREFORE, in consideration of the premises and the mutual
agreements, covenants and conditions hereinafter set forth, Borrower,
Administrative Agent and each of the Banks agree as follows:
ARTICLE I. DEFINITIONS; ETC.
Section 1.01 Definitions. As used in this Agreement the following
terms have the following meanings (except as otherwise provided, terms defined
in the singular to have a correlative meaning when used in the plural and vice
versa):
"Acquisition Indebtedness Adjustment" means, as of any date, the
aggregate, for all acquisitions that occurred during the twelve (12)-month
period ending on such date, of the product of (1) the increase in Total
Outstanding Indebtedness as a result of indebtedness assumed and/or incurred in
connection with the acquisition and which is still outstanding as of such date,
multiplied by (2) the ratio of (A) three hundred sixty five (365) minus the
number of days between the closing of the acquisition and such date to (B) three
hundred sixty five (365).
"Acquisition Unsecured Indebtedness Adjustment" means, as of any
date, the aggregate, for all acquisitions that occurred during the twelve
(12)-month period ending on such date, of the product of (1) the increase in
Unsecured Indebtedness as a result of unsecured indebtedness assumed and/or
incurred in connection with the acquisition and which is still outstanding as of
such date, multiplied by (2) the ratio of (A) three hundred sixty five (365)
minus the number of days between the closing of the acquisition and such date to
(B) three hundred sixty five (365).
"Adjusted Total Outstanding Indebtedness" means, as of any date,
Total Outstanding Indebtedness plus the Disposition Indebtedness Adjustment less
the Acquisition Indebtedness Adjustment.
"Adjusted Unsecured Indebtedness" means, as of any date, Unsecured
Indebtedness plus the Disposition Unsecured Indebtedness Adjustment less the
Acquisition Unsecured Indebtedness Adjustment.
"Administrative Agent" has the meaning specified in the preamble.
"Administrative Agent's Office" means Administrative Agent's address
located at One PNC Plaza, 249 Fifth Avenue, P1-POPP-19-2, Pittsburgh,
Pennsylvania 15222, Attention: Real Estate Banking, or such other address in the
United States as Administrative Agent may designate by notice to Borrower and
the Banks.
"Affiliate" means, with respect to any Person (the "first Person"),
any other Person: (1) which directly or indirectly controls, or is controlled
by, or is under common control with the first Person; or (2) ten percent (10%)
or more of the beneficial interest in which is directly or indirectly owned or
held by the first Person. The term "control" means the possession, directly or
indirectly, of the power, alone, to direct or cause the direction of the
management and policies of a Person, whether through the ownership of voting
securities, by contract, or otherwise.
"Agreement" means this Loan Agreement, as amended, supplemented or
modified from time to time.
"Applicable Lending Office" means, for each Bank and for its LIBOR
Loan or Base Rate Loan, as applicable, the lending office of such Bank (or of an
Affiliate of such Bank) designated as such on its signature page hereof or in
the applicable Assignment and Assumption Agreement, or such other office of such
Bank (or of an Affiliate of such Bank) as such Bank may from time to time
specify to Administrative Agent and Borrower as the office by which its LIBOR
Loan or Base Rate Loan, as applicable, is to be made and maintained.
"Applicable Margin" means, with respect to Base Rate Loans and LIBOR
Loans, the respective rates per annum determined, at any time, based on
Borrower's Credit Rating at the time, in accordance with the following table.
Any change in Borrower's Credit Rating causing it to move to a different range
on the table shall effect an immediate change in the Applicable Margin.
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Borrower's Credit Rating Applicable Margin Applicable Margin
(S&P/Moody's/Duff & Phelps/Fitch for Base Rate Loans for LIBOR Loans
Ratings) (% per annum) (% per annum)
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A/A2/A/A or higher 0.00 0.60
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A-/A3/A-/A- 0.00 0.70
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BBB+/Baal/BBB+/BBB+ 0.00 0.80
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BBB/Baa2/BBB/BBB 0.00 0.90
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BBB-/Baa3/BBB-/BBB- 0.00 1.00
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Below BBB-/Baa3/BBB-/BBB- or
unrated 0.35 1.35
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"Assignee" has the meaning specified in Section 12.05.
"Assignment and Assumption Agreement" means an Assignment and
Assumption Agreement, substantially in the form of EXHIBIT E, pursuant to which
a Bank assigns and an Assignee assumes rights and obligations in accordance with
Section 12.05.
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"Authorization Letter" means a letter agreement executed by Borrower
in the form of EXHIBIT A.
"Bank" and "Banks" have the respective meanings specified in the
preamble.
"Bank Parties" means Administrative Agent and the Banks.
"Banking Day" means (1) any day on which commercial banks are not
authorized or required to close in Pittsburgh and Boston and (2) whenever such
day relates to a LIBOR Loan, an Interest Period with respect to a LIBOR Loan or
notice with respect to a LIBOR Loan, a day on which dealings in Dollar deposits
are also carried out in the London interbank market and banks are open for
business in London.
"Banks' Valuation Consultant" means Landauer Associates, Inc. or
such other appraisal firm(s) reasonably acceptable to Borrower, Fleet and PNC.
"Base Rate" means, for any day, the higher of (1) the Federal Funds
Rate for such day plus one-half percent (.50%), or (2) the Prime Rate for such
day.
"Base Rate Loan" means all or any portion (as the context requires)
of a Bank's Loan which shall accrue interest at a rate determined in relation to
the Base Rate.
"Borrower's Accountants" means Deloitte & Touche, or such other
accounting firm(s) selected by Borrower and reasonably acceptable to the
Required Banks.
"Borrower" has the meaning specified in the preamble.
"Borrower's Credit Rating" means the lower of the two (2) ratings
(if there are only two (2) ratings) or the lower of the two (2) highest ratings
(if there are more than two (2) ratings) assigned from time to time to
Borrower's unsecured and unsubordinated long-term indebtedness by, respectively,
S&P, Moody's, Duff & Phelps and Fitch. Unless such indebtedness of Borrower is
rated by at least two (2) of the Rating Agencies, at least one (1) of which must
be either S&P or Moody's, "Borrower's Credit Rating" shall be considered unrated
for purposes of determining both the Applicable Margin and Facility Fee Rate.
"Capital Lease" means any lease which has been or should be
capitalized on the books of the lessee in accordance with GAAP.
"Closing Date" means the date this Agreement has been executed by
all parties.
"Code" means the Internal Revenue Code of 1986, as amended from time
to time.
"Combined EBTDA" means, for any period of time, Combined EBITDA less
Interest Expense.
3
"Combined EBITDA" means, for any period of time, (1) revenues less operating
costs before interest, depreciation and amortization and unusual items for
Borrower and its Consolidated Businesses (based on the accounting principles
reflected in the TRG Consolidated Financial Statements as of and for the year
ended December 31, 1996 contained in the Form 10-K for such period of TRG, and
assuming that any dividends paid on any equity security shall not be deducted in
calculating Combined EBITDA unless such equity security may be converted into a
debt security at any time or is mandatory redeemable for cash within twenty (20)
years from its initial issuance) plus (2) Borrower's beneficial interest in
revenues less operating costs before interest, depreciation and amortization and
unusual items (after eliminating appropriate intercompany amounts) applicable to
each of the UJVs.
"Consolidated Businesses" means, collectively (1) each Affiliate of
Borrower, all of the equity interests of which are, or, under GAAP, are deemed
to be, owned by Borrower and (2) Taub-Co Management Inc., The Taubman Company
Limited Partnership and their respective Affiliates so long as more than ninety
percent (90%) of the equity interests in the entities referred to in this clause
(2) are owned directly or indirectly by Borrower.
"Consolidated Outstanding Indebtedness" means, as of any time,
mortgage notes payable and other notes payable of Borrower and its Consolidated
Businesses, as reflected in the TRG Consolidated Financial Statements.
"Contingent Liabilities" means the sum of (1) those liabilities, as
determined in accordance with GAAP, set forth and quantified as contingent
liabilities in the notes to the TRG Consolidated Financial Statements and (2)
contingent liabilities, other than those described in the foregoing clause (1),
which represent direct payment guaranties of Borrower; provided, however, that
Contingent Liabilities shall exclude contingent liabilities which represent the
"Other Party's Share" of "Duplicated Obligations" (as such quoted terms are
hereinafter defined). "Duplicated Obligations" means, collectively, all those
payment guaranties in respect of Debt of UJVs for which Borrower and another
party are jointly and severally liable, where the other party is, in the sole
judgment of the Required Banks, capable of satisfying the Other Party's Share of
such obligation. "Other Party's Share" means such other party's fractional
beneficial interest in the UJV in question.
"Continue", "Continuation" and "Continued" refer to the continuation
pursuant to Section 2.13 of a LIBOR Loan as a LIBOR Loan from one Interest
Period to the next Interest Period.
"Convert", "Conversion" and "Converted" refer to a conversion
pursuant to Section 2.13 of a Base Rate Loan into a LIBOR Loan or a LIBOR Loan
into a Base Rate Loan, each of which may be accompanied by the transfer by a
Bank (at its sole discretion) of all or a portion of its Loan from one
Applicable Lending Office to another.
"Debt" means: (1) indebtedness or liability for borrowed money, or
for the deferred purchase price of property or services (including trade
obligations); (2) obligations as lessee under Capital Leases; (3) current
liabilities in respect of unfunded vested benefits under any Plan; (4)
obligations under letters of credit issued for the account of any Person; (5)
all obligations arising under bankers' or trade acceptance facilities; (6) all
guarantees, endorsements (other than for collection or deposit in the ordinary
course of business), and other contingent
4
obligations to purchase any of the items included in this definition, to provide
funds for payment, to supply funds to invest in any Person, or otherwise to
assure a creditor against loss; (7) all obligations secured by any Lien on
property owned by the Person whose Debt is being measured, whether or not the
obligations have been assumed; and (8) all obligations under any agreement
providing for contingent participation or other hedging mechanisms with respect
to interest payable on any of the items described above in this definition.
"Default" means any event which with the giving of notice or lapse
of time, or both, would become an Event of Default.
"Default Rate" means a rate per annum equal to: (1) with respect to
Base Rate Loans, a variable rate three percent (3%) above the rate of interest
then in effect thereon (including the Applicable Margin); and (2) with respect
to LIBOR Loans, a fixed rate three percent (3%) above the rate(s) of interest in
effect thereon (including the Applicable Margin) at the time of Default until
the end of the then current Interest Period therefor and, thereafter, a variable
rate three percent (3%) above the rate of interest for a Base Rate Loan
(including the Applicable Margin).
"Disposition" means a sale (whether by assignment, transfer or
Capital Lease) of an asset.
"Disposition Indebtedness Adjustment" means, as of any date, the
aggregate, for all Dispositions that occurred during the twelve (12)-month
period ending on such date, of the product of (1) the reduction in Total
Outstanding Indebtedness as a result of indebtedness repaid in connection with
the Disposition, multiplied by (2) the ratio of (A) three hundred sixty five
(365) minus the number of days between the closing of the Disposition and such
date to (B) three hundred sixty five (365).
"Disposition Unsecured Indebtedness Adjustment" means, as of any
date, the aggregate, for all Dispositions that occurred during the twelve
(12)-month period ending on such date, of the product of (1) the reduction in
Unsecured Indebtedness as a result of unsecured indebtedness repaid in
connection with the Disposition, multiplied by (2) the ratio of (A) three
hundred sixty five (365) minus the number of days between the closing of the
Disposition and such date to (B) three hundred sixty five (365).
"Dollars" and the sign "$" mean lawful money of the United States of
America.
"Duff & Phelps" means Duff & Phelps Credit Rating Company.
"Elect", "Election" and "Elected" refer to election, if any, by
Borrower pursuant to Section 2.13 to have all or a portion of an advance of the
Loans be outstanding as LIBOR Loans.
"Environmental Discharge" means any discharge or release of any
Hazardous Materials in violation of any applicable Environmental Law.
"Environmental Law" means any Law relating to pollution or the
environment, including Laws relating to noise or to emissions, discharges,
releases or threatened releases of Hazardous Materials into the work place, the
community or the environment, or otherwise
5
relating to the generation, manufacture, processing, distribution, use,
treatment, storage, disposal, transport or handling of Hazardous Materials.
"Environmental Notice" means any written complaint, order, citation,
letter, inquiry, notice or other written communication from any Person (1)
affecting or relating to Borrower's compliance with any Environmental Law in
connection with any activity or operations at any time conducted by Borrower,
(2) relating to the occurrence or presence of or exposure to or possible or
threatened or alleged occurrence or presence of or exposure to Environmental
Discharges or Hazardous Materials at any of Borrower's locations or facilities,
including, without limitation: (a) the existence of any contamination or
possible or threatened contamination at any such location or facility and (b)
remediation of any Environmental Discharge or Hazardous Materials at any such
location or facility or any part thereof; and (3) any violation or alleged
violation of any relevant Environmental Law.
"ERISA" means the Employee Retirement Income Security Act of 1974,
as amended from time to time, including any rules and regulation promulgated
thereunder.
"ERISA Affiliate" means any corporation or trade or business which
is a member of the same controlled group of organizations (within the meaning of
Section 414(b) of the Code) as Borrower or is under common control (within the
meaning of Section 414(c) of the Code) with Borrower.
"Event of Default" has the meaning specified in Section 9.01.
"Facility Fee Rate" means the rate per annum determined, at any
time, based on Borrower's Credit Rating, in accordance with the following table.
Any change in Borrower's Credit Rating which causes it to move into a different
range on the table shall effect an immediate change in the Facility Fee Rate.
Borrower's Credit Rating Facility Fee Rate
(S&P/Moody's/Duff & Phelps/Fitch Ratings) (% per annum)
- ----------------------------------------- -------------
A/A2/A/A or higher 0.15
A-/A3/A-/A- 0.15
BBB+/Baa1/BBB+/BBB+ 0.20
BBB/Baa2/BBB/BBB 0.20
BBB-/Baa3/BBB-/BBB- 0.25
Below BBB-/Baa3/BBB-/BBB- or unrated 0.25
"Federal Funds Rate" means, for any day, the rate per annum (based
on a year of 360 days) announced by the Federal Reserve Bank of New York (or any
successor) on such day as being the weighted average of the rates on overnight
Federal funds transactions arranged by Federal funds brokers on the previous
trading day, as computed and announced by such Federal Reserve Bank (or any
successor) in substantially the same manner as such Federal Reserve Bank
computes and announces the weighted average it refers to as the "Federal Funds
Effective Rate" as of the date of this Agreement; provided, however, that if
such Federal Reserve Bank (or its
6
successor) does not announce such rate on any day, the "Federal Funds Rate" for
such day shall be the Federal Funds Effective Rate for the last day on which
such rate was announced.
"Fiscal Year" means each period from January 1 to December 31.
"Fitch" means Fitch Investors Service, L.P.
"GAAP" means generally accepted accounting principles in the United
States of America as in effect from time to time, applied on a basis consistent
with those used in the preparation of the financial statements referred to in
Section 5.13 (except for changes concurred in by Borrower's Accountants).
"Good Faith Contest" means the contest of an item if: (1) the item
is diligently contested in good faith, and, if appropriate, by proceedings
timely instituted; (2) adequate reserves are established with respect to the
contested item; (3) during the period of such contest, the enforcement of any
contested item is effectively stayed; and (4) the failure to pay or comply with
the contested item during the period of the contest is not likely to result in a
Material Adverse Change.
"Governmental Approvals" means any authorization, consent, approval,
license, permit, certification, or exemption of, registration or filing with or
report or notice to, any Governmental Authority.
"Governmental Authority" means any nation or government, any state
or other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or pertaining
to government.
"Great Lakes Crossing" means the single-level, enclosed,
super-regional value shopping center containing approximately 1,340,000 square
feet of gross leasable area to be constructed and operated by TAH on an
approximately 300 acre site located in Auburn Hills, Michigan owned by it.
"Gross Asset Value" means, as of any time, an amount, determined
annually as of June 30th of each year and effective for the twelve (12)-month
period beginning on the day after such date (it being agreed that Gross Asset
Value determined as of June 30, 1997 is $3,712,416,000), equal to the sum of:
(i) the lesser of (1) the aggregate book value of the long-term
assets of Borrower, as reflected in the TRG Consolidated Financial Statements as
of and for the year ended such June 30th, other than those assets described in
clause (ii) below, or (2) five percent (5%) of the amount determined pursuant to
said clause (ii); and
(ii) the amount, determined by Borrower with the concurrence of
the Banks' Valuation Consultant, equal to the aggregate of the
then-current values, on a free and clear basis, of the real properties
owned or leased, directly or indirectly, in whole or part, by Borrower,
which are included in the TRG Consolidated Financial Statements as of and
for the year ended as of such June 30th, multiplied by Borrower's
respective beneficial interests in such assets (it being understood that
the Banks' Valuation Consultant shall not determine the fractional
beneficial interest of Borrower in such real properties);
7
in each case, as adjusted for any Dispositions or acquisitions subsequent to the
most recent annual determination of Gross Asset Value by:
(1) in the case of Dispositions of assets described in clause (i)
above, deducting the book value of the asset disposed of, as reflected in
such annual determination, less the excess, if any, of the amount
determined pursuant to clause (i)(1) above over the amount determined
pursuant to clause (i)(2) above (in each case, prior to the Disposition in
question),
(2) in the case of Dispositions of assets described in clause (ii)
above, deducting the value for the asset determined pursuant to clause
(ii) above,
(3) in the case of acquisitions of assets described in clause (i)
above, adding the Purchase Price for the acquired asset, and
(4) in the case of acquisitions of assets described in clause (ii)
above, adding the lesser of (A) the Purchase Price for the acquired asset
or (B) the acquired asset's trailing twelve (12)-month net operating
income, less any management fee adjustment, if applicable, capitalized at
a rate of eight percent (8%) per annum; provided, however, that at
Borrower's request and expense, Administrative Agent shall promptly cause
the Banks' Valuation Consultant to appraise the acquired asset and, upon
the completion of such appraisal, provided such appraisal is reasonably
satisfactory to Administrative Agent, the appraised value of the acquired
asset as determined in such appraisal shall be substituted for the amount
calculated pursuant to clauses (A) and (B) above.
In no event shall any adjustment pursuant to clauses (2) or (3) above cause the
component of Gross Asset Value determined pursuant to clause (i) above to exceed
five percent (5%) of the component determined pursuant to clause (ii) above. Any
adjustment, pursuant to the operation of clauses (2) or (4) above, to the amount
determined pursuant to clause (ii) above shall also effect an automatic
adjustment to the component of Gross Asset Value determined pursuant to clause
(i) above by reason of the operation of clause (i)(2).
"Hazardous Materials" means any pollutant, effluents, emissions,
contaminants, toxic or hazardous wastes or substances, as any of those terms are
defined from time to time in or for the purposes of any relevant Environmental
Law, including asbestos fibers and friable asbestos, polychlorinated biphenyls,
and any petroleum or hydrocarbon-based products or derivatives.
"Initial Advance" means the first advance of proceeds of the Loans.
"Interest Expense" means, for any period of time, the consolidated
interest expense (without deduction of consolidated interest income) of Borrower
and its Consolidated Businesses (based on the accounting principles reflected in
the TRG Consolidated Financial Statements as of and for the year ended December
31, 1996 contained in the Form 10-K for such period of TRG), including, without
limitation or duplication (or, to the extent not so included, with the addition
of), (1) the portion of any rental obligation in respect of any Capital Lease
obligation allocable to interest expense in accordance with GAAP; (2) the
amortization of Debt discounts; (3) any payments or receipts (other than
up-front fees) with respect to interest rate swap or similar agreements; (4) any
dividends attributable to any equity security which may be
8
converted into a debt security of Borrower at any time or is mandatorily
redeemable for cash within twenty (20) years from its initial issuance; and (5)
the interest expense and items listed in clauses (1) through (4) above
applicable to each of the UJVs multiplied by Borrower's respective beneficial
interests in the UJVs (it being understood that the items listed in clauses (1),
(2) and (3) above shall be considered part of Interest Expense even if, due to a
change in GAAP, such items would no longer be considered interest expense under
GAAP).
"Interest Period" means, with respect to any LIBOR Loan, the period
commencing on the date the same is advanced, converted from a Base Rate Loan or
Continued, as the case may be, and ending, as Borrower may select pursuant to
Section 2.06, on the numerically corresponding day in the first, second, third,
or, if available to all of the Banks, sixth or twelfth, calendar month
thereafter, provided that each such Interest Period which commences on the last
Banking Day of a calendar month (or on any day for which there is no numerically
corresponding day in the appropriate subsequent calendar month) shall end on the
last Banking Day of the appropriate calendar month.
"Law" means any federal, state or local statute, law, rule,
regulation, ordinance, order, code, or rule of common law, now or hereafter in
effect, and any judicial or administrative interpretation thereof by a
Governmental Authority or otherwise, including any judicial or administrative
order, consent decree or judgment.
"LIBOR Base Rate" means, with respect to any Interest Period
therefor, the rate per annum for the first day of the Interest Period ("the
Reset Date") for deposits in Dollars for a period of the number of months
contained in the Interest Period (the "Designated Maturity") which appears on
Dow Jones Page 3750 (or such other display page on the Dow Jones System as may
replace such Page 3750) as of 11:00 A.M. (London time) on the day that is two
(2) Banking Days prior to that Reset Date for a period, and in an amount,
comparable to such Interest Period and principal amount of the LIBOR Loan in
question outstanding during such Interest Period. If such rate does not appear
on Dow Jones Page 3750 (or such replacement page), the rate for a Reset Date
will be determined on the basis of the rates at which deposits in Dollars are
offered by four (4) major banks in the London interbank market as selected by
Administrative Agent and agreed to by Borrower (the "Reference Banks") at
approximately 11:00 A.M. (London time) on the day that is two (2) Banking Days
preceding that Reset Date to prime banks in the London interbank market for a
period of the Designated Maturity commencing on that Reset Date and in an amount
comparable to the amount of the LIBOR Loan to be outstanding during such
Interest Period (the "Representative Amount"). Administrative Agent will request
the principal London office of each of the Reference Banks to provide a
quotation of its rate. If at least two (2) such quotations are provided, the
rate for that Interest Period will be the arithmetic mean of the quotations. If
fewer than two (2) quotations are provided as requested, the rate for that Reset
Date will the arithmetic mean of the rates quoted by major banks in New York
City, selected by Administrative Agent and agreed to by Borrower, at
approximately 11:00 A.M. (New York time) on that Reset Date for loans in Dollars
to leading European banks for a period of the Designated Maturity commencing on
that Reset Date and in a Representative Amount.
"LIBOR Interest Rate" means, for any LIBOR Loan, a rate per annum
(rounded upwards, if necessary, to the nearest 1/100 of 1%) determined by
Administrative Agent to be equal to the quotient of (1) the LIBOR Base Rate for
such LIBOR Loan for the Interest Period
9
therefor divided by (2) one minus the LIBOR Reserve Requirement for such LIBOR
Loan for such Interest Period.
"LIBOR Loan" means all or any portion (as the context requires) of
any Bank's Loan which shall accrue interest at rate(s) determined in relation to
LIBOR Interest Rate(s).
"LIBOR Reserve Requirement" means, for any LIBOR Loan, the rate at
which reserves (including any marginal, supplemental or emergency reserves) are
actually required to be maintained during the Interest Period for such LIBOR
Loan under Regulation D by the applicable Bank against "Eurocurrency
liabilities" (as such term is used in Regulation D). Without limiting the effect
of the foregoing, the LIBOR Reserve Requirement shall also reflect any other
reserves actually required to be maintained by any Bank by reason of any
Regulatory Change against (1) any category of liabilities which includes
deposits by reference to which the LIBOR Base Rate is to be determined as
provided in the definition of "LIBOR Base Rate" in this Section 1.01 or (2) any
category of extensions of credit or other assets which include loans the
interest rate on which is determined on the basis of rates referred to in said
definition of "LIBOR Base Rate".
"Lien" means any mortgage, deed of trust, pledge, security interest,
hypothecation, assignment for collateral purposes, deposit arrangement, lien
(statutory or other), or other security agreement or charge of any kind or
nature whatsoever of any third party (excluding any right of setoff but
including, without limitation, any conditional sale or other title retention
agreement, any financing lease having substantially the same economic effect as
any of the foregoing, and the filing of any financing statement under the
Uniform Commercial Code or comparable law of any jurisdiction to evidence any of
the foregoing).
"Loan" and "Loans" have the respective meanings specified in Section
2.01.
"Loan Commitment" means, with respect to each Bank, the obligation
to make a Loan in the principal amount set forth below or in the applicable
Assignment and Assumption Agreement, as such amount may be reduced from time to
time in accordance with the provisions of Section 2.11 or pursuant to an
Assignment and Assumption Agreement:
Bank Loan Commitment
---- ---------------
Fleet $ 46,000,000
PNC 46,000,000
Dresdner Bank AG 30,000,000
Commerzbank AG 30,000,000
Comerica Bank 20,000,000
Bayerische Hypotheken-und Wechsel-Bank AG 20,000,000
Landesbank Hessen-Thuringen Girozentrale 18,000,000
Total $210,000,000
============
10
"Loan Documents" means this Agreement, the Notes and the Solvency
Certificates.
"Material Adverse Change" means either (1) a material adverse change
in the status of the business, results of operations, financial condition,
property or prospects of Borrower or (2) any event or occurrence of whatever
nature which is likely to have a material adverse effect on the ability of
Borrower to perform its obligations under the Loan Documents.
"Maturity Date" means December 1, 2001, subject to extension in
accordance with Section 2.05.
"Moody's" means Moody's Investors Service, Inc.
"Multiemployer Plan" means a Plan defined as such in Section 3(37)
of ERISA to which contributions have been made by Borrower or any ERISA
Affiliate and which is covered by Title IV of ERISA.
"Net Worth" means the excess of Gross Asset Value over Total
Outstanding Indebtedness.
"Note" and "Notes" have the respective meanings specified in Section
2.09.
"Obligations" means each and every obligation, covenant and
agreement of Borrower, now or hereafter existing, contained in this Agreement,
and any of the other Loan Documents, whether for principal, reimbursement
obligations, interest, fees, expenses, indemnities or otherwise, and any
amendments or supplements thereto, extensions or renewals thereof or
replacements therefor, including but not limited to all indebtedness,
obligations and liabilities of Borrower to Administrative Agent and any Bank now
existing or hereafter incurred under or arising out of or in connection with the
Notes, this Agreement, the other Loan Documents, and any documents or
instruments executed in connection therewith; in each case whether direct or
indirect, joint or several, absolute or contingent, liquidated or unliquidated,
now or hereafter existing, renewed or restructured, whether or not from time to
time decreased or extinguished and later increased, created or incurred, and
including all indebtedness of Borrower, under any instrument now or hereafter
evidencing or securing any of the foregoing.
"Parent" means, with respect to any Bank, any Person controlling
such Bank.
"PBGC" means the Pension Benefit Guaranty Corporation and any entity
succeeding to any or all of its functions under ERISA.
"Person" means an individual, partnership, corporation, business
trust, joint stock company, trust, unincorporated association, joint venture,
Governmental Authority or other entity of whatever nature.
"Plan" means any employee benefit or other plan established or
maintained, or to which contributions have been made, by Borrower or any ERISA
Affiliate of Borrower and which is covered by Title IV of ERISA or to which
Section 412 of the Code applies.
11
"presence", when used in connection with any Environmental Discharge
or Hazardous Materials, means and includes presence, generation, manufacture,
installation, treatment, use, storage, handling, repair, encapsulation,
disposal, transportation, spill, discharge and release.
"Prime Rate" means that rate of interest from time to time announced
by PNC at its Principal Office as its then prime rate, which rate may not be the
lowest rate then being charged to commercial borrowers by PNC.
"Principal Office" means the principal office of PNC in the United
States, presently located at One PNC Plaza, 249 Fifth Avenue, Pittsburgh,
Pennsylvania 15222.
"Pro Rata Share" means, for purposes of this Agreement and with
respect to each Bank, a fraction, the numerator of which is the amount of such
Bank's Loan Commitment and the denominator of which is the Total Loan
Commitment.
"Prohibited Transaction" means any transaction set forth in Section
406 of ERISA or Section 4975 of the Code.
"Purchase Price" means, with respect to an acquisition, the total
consideration paid, including in the amount of such consideration (without
duplication) (1) any Debt that, at the time of such acquisition, is directly or
indirectly secured by a Lien on all or any portion of the property so acquired
and any Debt to which such property is subject, including, in the case of an
acquisition of any Person, any Debt of such Person, regardless of whether such
Debt is secured or unsecured, or recourse or non-recourse to such Person and (2)
the fair market value of any other non-cash consideration.
"Rating Agencies" means S&P, Moody's, Duff & Phelps and Fitch.
"Regulation D" means Regulation D of the Board of Governors of the
Federal Reserve System, as the same may be amended or supplemented from time to
time, or any similar Law from time to time in effect.
"Regulation U" means Regulation U of the Board of Governors of the
Federal Reserve System, as the same may be amended or supplemented from time to
time.
"Regulatory Change" means, with respect to any Bank, any change
after the date of this Agreement in United States federal, state, municipal or
foreign laws or regulations (including Regulation D) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks including such Bank of or under any United States, federal,
state, municipal or foreign laws or regulations (whether or not having the force
of law) by any court or governmental or monetary authority charged with the
interpretation or administration thereof.
"Reportable Event" means any of the events set forth in Section
4043(b) of ERISA.
"Required Banks" means at any time the Banks holding at least sixty
six and two-thirds percent (66-2/3%) of the then aggregate unpaid principal
amount of the Loans.
12
"Secured Indebtedness" means that portion of Total Outstanding
Indebtedness that is secured.
"Solvency Certificate" means a certificate in substantially the form
of EXHIBIT B, to be delivered by Borrower pursuant to the terms of this
Agreement.
"Solvent" means, when used with respect to any Person, that (1) the
fair value of the property of such Person, on a going concern basis, is greater
than the total amount of liabilities (including, without limitation, contingent
liabilities) of such Person; (2) the present fair saleable value of the assets
of such Person, on a going concern basis, is not less than the amount that will
be required to pay the probable liabilities of such Person on its debts as they
become absolute and matured; (3) such Person does not intend to, and does not
believe that it will, incur debts or liabilities beyond such Person's ability to
pay as such debts and liabilities mature; (4) such Person is not engaged in
business or a transaction, and is not about to engage in business or a
transaction, for which such Person's property would constitute unreasonably
small capital after giving due consideration to the prevailing practice in the
industry in which such Person is engaged; and (5) such Person has sufficient
resources, provided that such resources are prudently utilized, to satisfy all
of such Person's obligations. Contingent liabilities will be computed at the
amount that, in light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an actual or
matured liability.
"S&P" means Standard & Poor's Ratings Services, a division of
McGraw-Hill Companies.
"Supplemental Fee Letter" means that certain letter agreement, dated
the date hereof, among Fleet, PNC, Administrative Agent, Syndication Agent and
Borrower.
"Syndication Agent" means Fleet National Bank.
"TAH" means Taubman Auburn Hills Associates Limited Partnership, a
Delaware limited partnership in which Borrower owns an eighty percent (80%)
general partnership interest.
"TCI" means Taubman Centers, Inc., a Michigan corporation.
"Total Loan Commitment" means Two Hundred Ten Million Dollars
($210,000,000).
"Total Outstanding Indebtedness" means the sum, without duplication,
of (1) Consolidated Outstanding Indebtedness, (2) TRG's Share of UJV Combined
Outstanding
Indebtedness and (3) Contingent Liabilities.
"TRG Consolidated Financial Statements" means the consolidated
balance sheet and related consolidated statement of operations, accumulated
deficiency in assets and cash flows, and footnotes thereto, of Borrower,
prepared in accordance with GAAP.
"TRG's Share of UJV Combined Outstanding Indebtedness" means the sum
of the indebtedness of each of the UJVs contributing to UJV Combined Outstanding
Indebtedness multiplied by Borrower's respective beneficial interests in each
such UJV.
13
"UJV Combined Outstanding Indebtedness" means, as of any time, the
sum of (1) mortgage notes payable and (2) other notes payable, of the UJVs, on a
combined basis, as reflected in the balance sheets of each of the UJVs, prepared
in accordance with GAAP.
"UJVs" means the unconsolidated joint ventures in which Borrower
owns a beneficial interest and which are accounted for under the equity method
in the TRG Consolidated Financial Statements.
"Unencumbered Combined EBITDA" means that portion of Combined EBITDA
attributable to Unencumbered Wholly-Owned Assets.
"Unencumbered Wholly-Owned Assets" means assets, reflected on the
TRG Consolidated Financial Statements, wholly owned, directly or indirectly, by
Borrower and not subject to any Lien to secure all or any portion of Secured
Indebtedness; provided, however, that, for purposes of this definition only, the
loans described in the following table, so long as the documents in respect of
the same permit secondary financing, shall not be considered part of Secured
Indebtedness:
================================================================================
Description of
Debt Obligation Obligor Affected Asset Amount ($)
- ---- ---------- ------- -------------- ------ ---
- --------------------------------------------------------------------------------
UDAG Loan TL-Columbus Columbus City Center 8,022,470
Associates
- --------------------------------------------------------------------------------
Assessment Bonds - City Richmond Hilltop land 801,077
of Richmond Associates
- --------------------------------------------------------------------------------
Assessment Bonds - City Stoneridge Stoneridge land 1,312,368
Pleasanton Properties
- --------------------------------------------------------------------------------
Assessment Bond - City Biltmore Shopping Biltmore land 3,182,742
of Phoenix Center Partners
- --------------------------------------------------------------------------------
Capital South Centrum TL - Columbus Columbus City Center 1,000,000
Parking Right Associates
================================================================================
"Unsecured Debt Yield" means, for any calendar quarter, the ratio,
expressed as a percentage, of (1) Unencumbered Combined EBITDA for the twelve
(12)-month period ending with such calendar quarter to (2) Adjusted Unsecured
Indebtedness as of the end of such calendar quarter.
"Unsecured Indebtedness" means that portion of Total Outstanding
Indebtedness that is unsecured.
Section 1.02 Accounting Terms. All accounting terms not specifically
defined herein shall be construed in accordance with GAAP, and all financial
data required to be delivered hereunder shall be prepared in accordance with
GAAP.
Section 1.03 Computation of Time Periods. Except as otherwise
provided herein, in this Agreement, in the computation of periods of time from a
specified date to a later
14
specified date, the word "from" means "from and including" and words "to" and
"until" each means "to but excluding".
Section 1.04 Rules of Construction. When used in this Agreement: (1)
"or" is not exclusive; (2) a reference to a Law includes any amendment or
modification to such Law; (3) a reference to a Person includes its permitted
successors and permitted assigns; (4) except as provided otherwise, all
references to the singular shall include the plural and vice versa; (5) except
as provided in this Agreement, a reference to an agreement, instrument or
document shall include such agreement, instrument or document as the same may be
amended, modified or supplemented from time to time in accordance with its terms
and as permitted by the Loan Documents; (6) all references to Articles or
Sections shall be to Articles and Sections of this Agreement unless otherwise
indicated; and (7) all Exhibits to this Agreement shall be incorporated into
this Agreement.
ARTICLE II. THE LOANS
Section 2.01 The Loans. (a) Subject to the terms and conditions of
this Agreement, each of the Banks severally agrees to make a loan to Borrower
(each such loan by a Bank, a "Loan"; such loans, collectively, the "Loans")
pursuant to which the Bank shall from time to time advance to Borrower up to an
amount equal to such Bank's Loan Commitment. The Loans may be outstanding as:
(1) Base Rate Loans; (2) LIBOR Loans; or (3) a combination of the foregoing, as
Borrower shall elect and notify Administrative Agent in accordance with Section
2.15. The LIBOR Loan and Base Rate Loan of each Bank shall be maintained at such
Bank's Applicable Lending Office for its LIBOR Loan and Base Rate Loan,
respectively.
(b) The obligations of the Banks under this Agreement are several,
and no Bank shall be responsible for the failure of any other Bank to make any
advance of a Loan to be made by such other Bank. However, the failure of any
Bank to make any advance of the Loan to be made by it hereunder on the date
specified therefor shall not relieve any other Bank of its obligation to make
any advance of its Loan specified hereby to be made on such date.
Section 2.02 Purpose. Borrower shall use the proceeds of the Loans
solely (i) as a contribution of capital to TAH to pay all or part of TAH's
pre-development, development and construction costs in connection with Great
Lakes Crossing and (ii) to pay interest on the Loans and transaction costs
relating to the consummation of the transaction contemplated hereby.
Section 2.03 Advances Generally. The Initial Advance shall be in the
minimum amount of Two Million Dollars ($2,000,000) and in integral multiples of
One Hundred Thousand Dollars ($100,000) above such amount and shall be made upon
satisfaction of the conditions set forth in Section 4.01. Subsequent advances
shall be made no more frequently than monthly thereafter, upon satisfaction of
the conditions set forth in Section 4.02. The amount of each advance subsequent
to the Initial Advance shall be (x) in the case of advances of Base Rate Loans,
in the minimum amount of One Hundred Thousand Dollars ($100,000) and in integral
multiples of One Hundred Thousand Dollars ($100,000) above such amount and (y)
in the case of advances of LIBOR Loans, in the minimum amount of One Million
Dollars ($1,000,000) and in integral multiples of One Hundred Thousand Dollars
($100,000) above such amount.
15
Notwithstanding anything to the contrary contained herein, Borrower
shall not be entitled to any advances of proceeds of the Loans subsequent to the
original Maturity Date (i.e. during the one(1)-year extension term contemplated
by Section 2.05).
Section 2.04 Procedures for Advances. Borrower shall submit to
Administrative Agent a request for each advance hereunder, stating the amount
requested, and certifying that (x) no Default or Event of Default then exists or
would exist as a result of such advance, (y) the advance will be, and all prior
advances have been, used solely for the purposes described in Section 2.02 and
(z) none of the costs covered by said request for advance were the subject of
any previous request for advance, no later than 10:00 a.m. (Pittsburgh time) on
the date, in the case of advances of Base Rate Loans, which is two (2) Banking
Days, and, in the case of advances of LIBOR Loans, which is three (3) Banking
Days, prior to the date the advance is to be made. Administrative Agent, upon
its receipt and approval of the request for advance, will so notify the Banks
either by telephone or by facsimile. Not later than 10:00 a.m. (Pittsburgh time)
on the date of each advance, each Bank shall, through its Applicable Lending
Office and subject to the conditions of this Agreement, make the amount to be
advanced by it on such day available to Administrative Agent, at Administrative
Agent's Office and in immediately available funds, for the account of Borrower.
The amount so received by Administrative Agent shall, subject to the conditions
of this Agreement, be made available to Borrower, in immediately available
funds, by Administrative Agent's crediting an account of Borrower designated by
Borrower.
Section 2.05 Extension of Maturity Date. Provided there exists no
Default or Event of Default, Borrower shall have the option, exercisable once,
to extend the Maturity Date for a period of one (1) year, subject to (i)
Administrative Agent's receipt of (x) a written request from Borrower for such
extension between sixty (60) and ninety (90) days prior to the Maturity Date,
(y) an extension fee, for the account of the Banks, in the amount of .05% of the
outstanding principal amount of the Loans as of the Maturity Date and (z) such
note extension agreement(s) as Administrative Agent may reasonably require, (ii)
Borrower's Credit Rating, as of the date of Borrower's exercise of such option,
being "investment grade" (i.e., BBB- or better by S&P, Baa3 or better by Moody's
and BBB- or better by Duff & Phelps and Fitch) by at least two (2) of the Rating
Agencies, one (1) of which must be either S&P or Moody's and (iii)
Administrative Agent's determination (which shall be conclusive so long as made
on a reasonable basis) that, as of the Maturity Date, Borrower will remain in
compliance with the financial covenants set forth in Article VIII.
Section 2.06 Interest Periods; Renewals In the case of the LIBOR
Loans, Borrower shall select an Interest Period of any duration in accordance
with the definition of Interest Period in Section 1.01, subject to the following
limitations: (1) no Interest Period may extend beyond the Maturity Date; (2) if
an Interest Period would end on a day which is not a Banking Day, such Interest
Period shall be extended to the next Banking Day, unless such Banking Day would
fall in the next calendar month, in which event such Interest Period shall end
on the immediately preceding Banking Day; and (3) only five (5) discrete
segments of a Bank's Loan bearing interest at a LIBOR Interest Rate, for a
designated Interest Period, pursuant to a particular Election, Conversion or
Continuation, may be outstanding at any one time (each such segment of each
Bank's Loan corresponding to a proportionate segment of each of the other Banks'
Loans).
16
Upon notice to Administrative Agent as provided in Section 2.15,
Borrower may Continue any LIBOR Loan on the last day of the Interest Period of
the same or different duration in accordance with the limitations provided
above. If Borrower shall fail to give notice to Administrative Agent of such a
Continuation, such LIBOR Loan shall automatically become a Base Rate Loan on the
last day of the current Interest Period.
Section 2.07 Interest. Borrower shall pay interest to Administrative
Agent for the account of the applicable Bank on the outstanding and unpaid
principal amount of the Loans, at a rate per annum as follows: (1) for Base Rate
Loans at a rate equal to the Base Rate plus the Applicable Margin; and (2) for
LIBOR Loans at a rate equal to the applicable LIBOR Interest Rate plus the
Applicable Margin. Any principal amount not paid when due (when scheduled, at
acceleration or otherwise) shall bear interest thereafter, payable on demand, at
the Default Rate.
The interest rate on Base Rate Loans shall change when the Base Rate
changes. Interest on Base Rate Loans and LIBOR Loans shall not exceed the
maximum amount permitted under applicable law. Interest shall be calculated for
the actual number of days elapsed on the basis of, in the case of both Base Rate
Loans and LIBOR Loans, three hundred sixty (360) days.
Accrued interest shall be due and payable in arrears, in the case of
both Base Rate Loans and LIBOR Loans, on the first Banking Day of each calendar
month; provided, however, that interest accruing at the Default Rate shall be
due and payable on demand.
Section 2.08 Fees. (a) Borrower shall, during the term of the Loans,
pay to Administrative Agent for the account of each Bank a facility fee computed
on the daily Loan Commitment of such Bank (irrespective of usage), at a rate per
annum equal to the daily Facility Fee Rate, calculated on the basis of a year of
three hundred sixty (360) days for the actual number of days elapsed. The
accrued facility fee shall be due and payable in arrears on the tenth (10th) day
of December, March, June and September of each year (for the respective periods
September 1 through November 30, December 1 through February 28/29, March 1
through May 31 and June 1 through August 31), commencing on the first such date
after the Closing Date, and upon the Maturity Date or earlier termination of the
Loan Commitments.
(b) Borrower shall pay, for the accounts of the parties specified
therein, the fees provided for, on the dates specified, in the Supplemental Fee
Letter.
Section 2.09 Notes. The Loan made by each Bank under this Agreement
shall be evidenced by, and repaid with interest in accordance with, a promissory
note of Borrower in the form of EXHIBIT C duly completed and executed by
Borrower, in the principal amount equal to such Bank's Loan Commitment, payable
to such Bank for the account of its Applicable Lending Office (each such note,
as the same may hereafter be amended, modified, extended, severed, assigned,
substituted, renewed or restated from time to time, including any substitute
note pursuant to Section 3.07 or 12.05, a "Note"; all such notes, as so amended,
modified, extended, severed, assigned, substituted, renewed or restated from
time to time, collectively, the "Notes"). Each Note shall mature, and all
outstanding principal and accrued interest and other sums thereunder shall be
paid in full, on the Maturity Date, as the same may be accelerated or extended.
17
Each Bank is hereby authorized by Borrower to endorse on a schedule
attached to the Note held by it, the amount of each advance, and each payment of
principal received by such Bank for the account of its Applicable Lending
Office(s) on account of its Loan, which endorsements, if made, shall, in the
absence of manifest error, be conclusive as to the outstanding balance of the
Loan made by such Bank; provided, however, that the failure to make such
notations with respect to the Loans or each advance or payment shall not limit
or otherwise affect the obligations of Borrower under this Agreement or the Note
held by such Bank.
Section 2.10 Prepayments. Borrower may, upon at least one (1)
Banking Day's notice to Administrative Agent in the case of the Base Rate Loans,
and at least two (2) Banking Days' notice to Administrative Agent in the case of
LIBOR Loans (in each case to be received by Administrative Agent no later than
1:00 P.M., Pittsburgh time), prepay the Loans, provided that (1) any partial
prepayment under this Section shall be in integral multiples of One Million
Dollars ($1,000,000); (2) a LIBOR Loan may be prepaid only on the last day of
the Applicable Interest Period for such LIBOR Loan; and (3) each prepayment
under this Section shall include all interest accrued on the amount of principal
prepaid through the date of prepayment. Any prepayment shall effect a permanent
reduction in the Total Loan Commitment by the amount prepaid.
Section 2.11 Changes of Commitments. (a) At any time, Borrower shall
have the right, without premium or penalty, to terminate the unused Loan
Commitments, in whole or in part, from time to time, provided that: (1) Borrower
shall give notice of each such termination to Administrative Agent, specifying
the amount of the termination, no later then 10:00 a.m. (Pittsburgh time) on the
date which is fifteen (15) days prior to the effectiveness of such termination;
(2) the Loan Commitments of each of the Banks must be terminated ratably and
simultaneously with those of the other Banks; and (3) each partial termination
of the Loan Commitments as a whole (and corresponding reduction of the Total
Loan Commitment) shall be in an integral multiple of One Million Dollars
($1,000,000).
(b) The Loan Commitments, to the extent terminated, may not be
reinstated.
Section 2.12 Method of Payment. Borrower shall make each payment
under this Agreement and under the Notes not later than 11:00 A.M. (Pittsburgh
time) on the date when due in Dollars to Administrative Agent at Administrative
Agent's Office in immediately available funds. Administrative Agent will
thereafter, on the day of its receipt of each such payment (assuming receipt by
11:00 A.M.), cause to be distributed to each Bank (1) such Bank's appropriate
share (based upon the respective outstanding principal amounts and rate(s) of
interest under the Notes of the Banks) of the payments of principal and interest
in like funds for the account of such Bank's Applicable Lending Office; and (2)
fees payable to such Bank in accordance with the terms of this Agreement.
Borrower hereby authorizes Administrative Agent and the Banks, if and to the
extent payment by Borrower is not made when due under this Agreement or under
the Notes, to charge from time to time against any account Borrower maintains
with Administrative Agent or any Bank any amount so due to Administrative Agent
and/or the Banks.
Except to the extent provided in this Agreement, whenever any
payment to be made under this Agreement or under the Notes is due on any day
other than a Banking Day, such payment shall be made on the next succeeding
Banking Day, and such extension of time shall in
18
such case be included in the computation of the payment of interest and other
fees, as the case may be.
Section 2.13 Elections, Conversions or Continuation of Loans.
Subject to the provisions of Article III and Sections 2.06 and 2.14, Borrower
shall have the right to Elect to have all or a portion of any advance of the
Loans be LIBOR Loans, to Convert Base Rate Loans into LIBOR Loans, to Convert
LIBOR Loans into Base Rate Loans, or to Continue LIBOR Loans as LIBOR Loans, at
any time or from time to time, provided that: (1) Borrower shall give
Administrative Agent notice of each such Election, Conversion or Continuation as
provided in Section 2.15; and (2) a LIBOR Loan may be Converted or Continued
only on the last day of the applicable Interest Period for such LIBOR Loan.
Except as otherwise provided in this Agreement, each Election, Continuation and
Conversion shall be applicable to each Bank's Loan in accordance with its Pro
Rata Share.
Section 2.14 Minimum Amounts. With respect to the Loans as a whole,
each Election and each Conversion shall be in an amount at least equal to One
Million Dollars ($1,000,000) and in integral multiples of One Hundred Thousand
Dollars ($100,000).
Section 2.15 Certain Notices Regarding Elections, Conversions and
Continuations of Loans. Notices by Borrower to Administrative Agent of
Elections, Conversions and Continuations of LIBOR Loans shall be irrevocable and
shall be effective only if received by Administrative Agent not later than 10:00
a.m. (Pittsburgh time) on the number of Banking Days prior to the date of the
relevant Election, Conversion or Continuation specified below:
Number of
Notice Banking Days Prior
------ ------------------
Conversions into Base Rate Loans three (3)
Election of, Conversions into or Continuations as,
LIBOR Loan three (3)
Promptly following its receipt of any such notice, Administrative Agent shall so
advise the Banks either by telephone or by facsimile. Each such notice of
Election shall specify the portion of the amount of the advance that is to be
LIBOR Loans (subject to Section 2.14) and the duration of the Interest Period
applicable thereto (subject to Section 2.06); each such notice of Conversion
shall specify the LIBOR Loans or Base Rate Loans to be Converted; and each such
notice of Conversion or Continuation shall specify the date of Conversion or
Continuation (which shall be a Banking Day), the amount thereof (subject to
Section 2.14) and the duration of the Interest Period applicable thereto
(subject to Section 2.06). In the event that Borrower fails to Elect to have any
portion of an advance of the Loans be LIBOR Loans, the entire amount of such
advance shall constitute Base Rate Loans. In the event that Borrower fails to
Continue LIBOR Loans within the time period and as otherwise provided in this
Section, such LIBOR Loans will be automatically Converted into Base Rate Loans
on the last day of the then current applicable Interest Period for such LIBOR
Loans.
Section 2.16 Late Payment Premium. Borrower shall, at Administrative
Agent's option, pay to Administrative Agent for the account of the Banks a late
payment premium in the
19
amount of four percent (4%) of any payments of interest under the Loans made
more than fifteen (15) days after the due date thereof, which shall be due with
any such late payment.
ARTICLE III. YIELD PROTECTION; ILLEGALITY; ETC.
Section 3.01 Additional Costs. Borrower shall pay directly to each
Bank from time to time on demand such amounts as such Bank may determine to be
necessary to compensate it for any increased costs which such Bank determines
are attributable to its making or maintaining a LIBOR Loan, or its obligation to
make or maintain a LIBOR Loan, or its obligation to Convert a Base Rate Loan to
a LIBOR Loan hereunder, or any reduction in any amount receivable by such Bank
hereunder in respect of its LIBOR Loan or such obligations (such increases in
costs and reductions in amounts receivable being herein called "Additional
Costs"), in each case resulting from any Regulatory Change which:
(1) changes the basis of taxation of any amounts payable to such Bank
under this Agreement or the Notes in respect of any such LIBOR Loan (other
than changes in the rate of general corporate, franchise, branch profit,
net income or other income tax imposed on such Bank or its Applicable
Lending Office by the jurisdiction in which such Bank has its principal
office or such Applicable Lending Office); or
(2) (other than to the extent the LIBOR Reserve Requirement is taken
into account in determining the LIBOR Rate at the commencement of the
applicable Interest Period) imposes or modifies any reserve, special
deposit, deposit insurance or assessment, minimum capital, capital ratio
or similar requirements relating to any extensions of credit or other
assets of, or any deposits with or other liabilities of, such Bank
(including any LIBOR Loan or any deposits referred to in the definition of
"LIBOR Interest Rate" in Section 1.01), or any commitment of such Bank
(including such Bank's Loan Commitment hereunder); or
(3) imposes any other condition affecting this Agreement or the Notes
(or any of such extensions of credit or liabilities).
Notwithstanding the foregoing, in the event that any Bank determines that it
shall incur Additional Costs in maintaining a LIBOR Loan, such Bank shall
provide written notice thereof to Borrower (with a copy to Administrative
Agent), which notice shall include the dollar amount of the Additional Costs,
and Borrower shall have the option, which option must be exercised within five
(5) Banking Days of Borrower's receipt of such notice, to prepay such LIBOR Loan
or to Convert such LIBOR Loan into a Base Rate Loan, subject, however, to the
provisions of Section 3.05.
Without limiting the effect of the provisions of the first paragraph
of this Section, in the event that, by reason of any Regulatory Change, any Bank
either (1) incurs Additional Costs based on or measured by the excess above a
specified level of the amount of a category of deposits of other liabilities of
such Bank which includes deposits by reference to which the LIBOR Interest Rate
is determined as provided in this Agreement or a category of extensions of
credit or other assets of such Bank which includes loans based on the LIBOR
Interest Rate or (2) becomes subject to restrictions on the amount of such a
category of liabilities or assets which it may hold, then, if such Bank so
elects by notice to Borrower (with a copy to Administrative
20
Agent), the obligation of such Bank to permit Elections of, to Continue, or to
Convert Base Rate Loans into, LIBOR Loans shall be suspended (in which case the
provisions of Section 3.04 shall be applicable) until such Regulatory Change
ceases to be in effect.
Determinations and allocations by a Bank for purposes of this
Section of the effect of any Regulatory Change pursuant to the first or second
paragraph of this Section, on its costs or rate of return of making or
maintaining its Loan or portions thereof or on amounts receivable by it in
respect of its Loan or portions thereof, and the amounts required to compensate
such Bank under this Section, shall be conclusive absent manifest error.
To the extent that changing the jurisdiction of a Bank's Applicable
Lending Office would have the effect of minimizing Additional Costs, each such
Bank shall use reasonable efforts to make such a change, provided that same
would not otherwise be disadvantageous to each such Bank.
No Bank shall be entitled to any compensation pursuant to this
Section relating to any period more than ninety (90) days prior to the date
notice thereof is given to Borrower by such Bank.
Section 3.02 Limitation on Types of Loans. Anything herein to the
contrary notwithstanding, if, on or prior to the determination of the LIBOR
Interest Rate for any Interest Period:
(1) Administrative Agent determines (which determination shall be
conclusive) that quotations of interest rates for the relevant deposits
referred to in the definition of "LIBOR Interest Rate" in Section 1.01 are
not being provided in the relevant amounts or for the relevant maturities
for purposes of determining rates of interest for the LIBOR Loans as
provided in this Agreement; or
(2) a Bank determines (which determination shall be conclusive) and
promptly notifies Administrative Agent that the relevant rates of interest
referred to in the definition of "LIBOR Interest Rate" in Section 1.01
upon the basis of which the rate of interest for LIBOR Loans for such
Interest Period is to be determined do not adequately cover the cost to
such Bank of making or maintaining such LIBOR Loan for such Interest
Period;
then Administrative Agent shall give Borrower prompt notice thereof, and so long
as such condition remains in effect, the Banks (or, in the case of the
circumstances described in clause (2) above, the affected Bank) shall be under
no obligation to permit Elections of LIBOR Loans, to Convert Base Rate Loans
into LIBOR Loans or to Continue LIBOR Loans and Borrower shall, on the last
day(s) of the then current Interest Period(s) for the affected outstanding LIBOR
Loans, either (x) prepay the affected LIBOR Loans or (y) Convert the affected
LIBOR Loans into Base Rate Loans in accordance with Section 2.13.
Section 3.03 Illegality. Notwithstanding any other provision of this
Agreement, in the event that it becomes unlawful for any Bank or its Applicable
Lending Office to honor its obligation to make or maintain a LIBOR Loan
hereunder, to allow Elections of a LIBOR Loan or to Convert a Base Rate Loan
into a LIBOR Loan, then such Bank shall promptly notify Administrative Agent and
Borrower thereof and such Bank's obligation to make or maintain a
21
LIBOR Loan, or to permit Elections of, to Continue, or to Convert its Base Rate
Loan into, a LIBOR Loan shall be suspended (in which case the provisions of
Section 3.04 shall be applicable) until such time as such Bank may again make
and maintain a LIBOR Loan.
Section 3.04 Treatment of Affected Loans. If the obligations of any
Bank to make or maintain a LIBOR Loan, or to permit an Election of a LIBOR Loan,
to Continue its LIBOR Loan, or to Convert its Base Rate Loan into a LIBOR Loan,
are suspended pursuant to Sections 3.01 or 3.03 (each LIBOR Loan so affected
being herein called an "Affected Loan"), such Bank's Affected Loan shall be
automatically Converted into a Base Rate Loan on the last day of the then
current Interest Period for the Affected Loan (or, in the case of a Conversion
required by Sections 3.01 or 3.03, on such earlier date as such Bank may specify
to Borrower).
To the extent that such Bank's Affected Loan has been so Converted,
all payments and prepayments of principal which would otherwise be applied to
such Bank's Affected Loan shall be applied instead to its Base Rate Loan and
such Bank shall have no obligation to Convert its Base Rate Loan into a LIBOR
Loan.
In the event that the conditions giving rise to the suspension of
any Bank's obligations to permit an Election of a LIBOR Loan, to Continue its
LIBOR Loan, or to Convert its Base Rate Loan into a LIBOR Loan shall cease to
exist, such Bank shall provide Borrower with prompt written notice of same (with
a copy to Administrative Agent), and such Bank shall again be obligated to
permit an Election of a LIBOR Loan, to Continue its LIBOR Loan, or to Convert
its Base Rate Loan into a LIBOR Loan in accordance with this Agreement.
Section 3.05 Certain Compensation. Borrower shall pay to
Administrative Agent for the account of the applicable Bank, upon the request of
such Bank through Administrative Agent, such amount or amounts as shall be
sufficient (in the reasonable opinion of such Bank) to compensate it for any
loss, cost or expense which such Bank determines is attributable to:
(1) any payment, prepayment, Conversion or Continuation of a LIBOR
Loan made by such Bank on a date other than the last day of an applicable
Interest Period for such LIBOR Loan, whether by reason of acceleration or
otherwise; or
(2) any failure by Borrower for any reason to Convert or Continue a
LIBOR Loan to be Converted or Continued by such Bank on the date specified
therefor in the relevant notice under Section 2.15; or
(3) any failure by Borrower to borrow (or to qualify for a borrowing
of) a LIBOR Loan which would otherwise be made hereunder on the date
specified in the relevant Election notice under Section 2.15 given or
submitted by Borrower.
Without limiting the foregoing, such compensation shall include an
amount equal to the present value (using as the discount rate an interest rate
equal to the rate determined under (2) below) of the excess, if any, of (1) the
amount of interest which otherwise would have accrued on the principal amount so
paid, prepaid, Converted or Continued (or not Converted, Continued or borrowed)
for the period from the date of such payment, prepayment, Conversion or
Continuation (or failure to Convert, Continue or borrow) to the last day of the
then current applicable Interest Period (or, in the case of a failure to
Convert, Continue or borrow, to the last
22
day of the applicable Interest Period which would have commenced on the date
specified therefor in the relevant notice) at the applicable rate of interest
for the LIBOR Loan provided for herein, over (2) the amount of interest (as
reasonably determined by such Bank) based upon the interest rate which such Bank
would have bid in the London interbank market for Dollar deposits, for amounts
comparable to such principal amount and maturities comparable to such period. A
determination of any Bank as to the amounts payable pursuant to this Section
shall be conclusive absent manifest error.
Section 3.06 Capital Adequacy. If any Bank shall have determined
that, after the date hereof, the adoption of any applicable law, rule or
regulation regarding capital adequacy, or any change therein, or any change in
the interpretation or administration thereof by any Governmental Authority,
central bank or comparable agency charged with the interpretation or
administration thereof, or any request or directive regarding capital adequacy
(whether or not having the force of law) of any such Governmental Authority,
central bank or comparable agency, has or would have the effect of reducing the
rate of return on capital of such Bank (or its Parent) as a consequence of such
Bank's obligations hereunder to a level below that which such Bank (or its
Parent) could have achieved but for such adoption, change, request or directive
(taking into consideration its policies with respect to capital adequacy) by an
amount deemed by such Bank to be material, then from time to time, within
fifteen (15) days after demand by such Bank (with a copy to Administrative
Agent), Borrower shall pay to such Bank such additional amount or amounts as
will compensate such Bank (or its Parent) for such reduction. A certificate of
any Bank claiming compensation under this Section, setting forth in reasonable
detail the basis therefor, shall be conclusive absent manifest error.
Section 3.07 Substitution of Banks. If any Bank (an "Affected Bank")
(i) makes demand upon Borrower for (or if Borrower is otherwise required to pay)
Additional Costs pursuant to Section 3.01 or (ii) is unable to make or maintain
a LIBOR Loan as a result of a condition described in Section 3.03 or clause (2)
of Section 3.02, Borrower may, within ninety (90) days of receipt of such demand
or notice (or the occurrence of such other event causing Borrower to be required
to pay Additional Costs or causing said Section 3.03 or clause (2) of Section
3.02 to be applicable), as the case may be, give notice (a "Replacement Notice")
to Administrative Agent (which will promptly forward a copy of such notice to
each Bank) of Borrower's intention either (x) to prepay in full the Affected
Bank's Note and to terminate the Affected Bank's entire Loan Commitment or (y)
to replace the Affected Bank with another financial institution (the
"Replacement Bank") designated in such Replacement Notice.
In the event Borrower opts to give the notice provided for in clause
(x) above, and if the Affected Bank shall not agree within thirty (30) days of
its receipt thereof to waive the payment of the Additional Costs in question or
the effect of the circumstances described in Section 3.03 or clause (2) of
Section 3.02, then, so long as no Default or Event of Default shall exist,
Borrower may (notwithstanding the provisions of clause (2) of Section 2.11(a))
terminate the Affected Bank's entire Loan Commitment, provided that in
connection therewith it pays to the Affected Bank all outstanding principal and
accrued and unpaid interest under the Affected Bank's Note, together with all
other amounts, if any, due from Borrower to the Affected Bank, including all
amounts properly demanded and unreimbursed under Sections 3.01 and 3.05.
In the event Borrower opts to give the notice provided for in clause
(y) above, and if (i) Administrative Agent shall, within thirty (30) days of its
receipt of the Replacement Notice,
23
notify Borrower and each Bank in writing that the Replacement Bank is reasonably
satisfactory to Administrative Agent and (ii) the Affected Bank shall not, prior
to the end of such thirty (30)- day period, agree to waive the payment of the
Additional Costs in question or the effect of the circumstances described in
Section 3.03 or clause (2) of Section 3.02, then the Affected Bank shall, so
long as no Default or Event of Default shall exist, assign its Note and all of
its rights and obligations under this Agreement to the Replacement Bank, and the
Replacement Bank shall assume all of the Affected Bank's rights and obligations,
pursuant to an agreement, substantially in the form of an Assignment and
Assumption Agreement, executed by the Affected Bank and the Replacement Bank. In
connection with such assignment and assumption, the Replacement Bank shall pay
to the Affected Bank an amount equal to the outstanding principal amount under
the Affected Bank's Note plus all interest accrued thereon, plus all other
amounts, if any (other than the Additional Costs in question), then due and
payable to the Affected Bank; provided, however, that prior to or simultaneously
with any such assignment and assumption, Borrower shall have paid to such
Affected Bank all amounts properly demanded and unreimbursed under Sections 3.01
and 3.05. Upon the effective date of such assignment and assumption, the
Replacement Bank shall become a Bank Party to this Agreement and shall have all
the rights and obligations of a Bank as set forth in such Assignment and
Assumption Agreement, and the Affected Bank shall be released from its
obligations hereunder, and no further consent or action by any party shall be
required. Upon the consummation of any assignment pursuant to this Section, a
substitute Note shall be issued to the Replacement Bank by Borrower, in exchange
for the return of the Affected Bank's Note. The obligations evidenced by such
substitute note shall constitute "Obligations" for all purposes of this
Agreement and the other Loan Documents. If the Replacement Bank is not
incorporated under the laws of the United States of America or a state thereof,
it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 10.13.
Borrower, Administrative Agent and the Banks shall execute such
modifications to the Loan Documents as shall be reasonably required in
connection with and to effectuate the foregoing.
ARTICLE IV. CONDITIONS PRECEDENT
Section 4.01 Conditions Precedent to the Initial Advance. The
obligations of the Banks hereunder and the obligation of each Bank to make the
Initial Advance are subject to the condition precedent that Administrative Agent
shall have received on or before the Closing Date each of the following
documents, and each of the following requirements shall have been fulfilled:
(1) Fees and Expenses. The payment of (A) all fees and expenses
incurred by Administrative Agent and Syndication Agent (including, without
limitation, the reasonable fees and expenses of legal counsel); and (B)
those fees specified in the Supplemental Fee Letter to be paid on or
before the Closing Date;
(2) Note. The Notes for Fleet, PNC and each of the other Banks
signatory hereto, duly executed by Borrower;
24
(3) Financials of Borrower. Audited TRG Consolidated Financial
Statements as of and for the year ended December 31, 1996 and unaudited
TRG Consolidated Financial Statements as of and for the quarter ended
September 30, 1997, each acceptable to the Banks;
(4) Evidence of Formation of Borrower. Certified (as of the Closing
Date) copies of Borrower's certificate and agreement of limited
partnership, with all amendments thereto, and a certificate of the
Secretary of State of the jurisdiction of formation as to its good
standing therein;
(5) Evidence of All Partnership Action. Certified (as of the
Closing Date) copies of all documents evidencing partnership action taken
by Borrower authorizing the execution, delivery and performance of the
Loan Documents and each other document to be delivered by or on behalf of
Borrower pursuant to this Agreement;
(6) Incumbency and Signature Certificate of Borrower. A certificate
(dated as of the Closing Date) of the Secretary of the Partnership
Committee of Borrower certifying the names and true signatures of each
person authorized to sign on behalf of Borrower;
(7) Solvency Certificate. A Solvency Certificate, duly executed,
from Borrower;
(8) Compliance Certificate. A certificate of the sort required by
paragraph (4) of Section 6.09;
(9) Opinion of Counsel for Borrower. A favorable opinion, dated the
Closing Date, of Miro Weiner & Kramer, counsel for Borrower, as to such
matters as Administrative Agent may reasonably request;
(10) Authorization Letter. The Authorization Letter, duly executed
by Borrower;
(11) Request for Advance. A request for an advance in accordance
with Section 2.04;
(12) Certificate. The following statements shall be true and
Administrative Agent shall have received a certificate dated the Closing
Date signed by a duly authorized signatory of Borrower stating, to the
best of the certifying party's knowledge, the following:
(a) All representations and warranties contained in this
Agreement and in each of the other Loan Documents are true and
correct on and as of the Closing Date as though made on and as of
such date, and
(b) No Default or Event of Default has occurred and is
continuing, or could result from the transactions contemplated by
this Agreement and the other Loan Documents;
25
(13) Supplemental Fee Letter. The Supplemental Fee Letter,
duly executed by Borrower;
(14) Project Budget. A budget setting forth, on an item-by-item
basis, all hard and soft costs incurred, and estimated by Borrower
to be incurred, by TAH in connection with its development and
construction of Great Lakes Crossing; and
(15) Additional Documentation. Such other approvals, opinions
or documents as Administrative Agent or any Bank may reasonably
request.
Section 4.02 Conditions Precedent to Advances After the Initial
Advance. The obligation of each Bank to make advances of the Loans subsequent to
the Initial Advance shall be subject to satisfaction of the following conditions
precedent:
(1) All conditions of Section 4.01 shall have been and remain
satisfied as of the date of the advance;
(2) No Default or Event of Default shall have occurred and be
continuing as of the date of the advance;
(3) Each of the representations and warranties contained in this
Agreement and in each of the other Loan Documents shall be true and
correct as of the date of the advance; and
(4) Administrative Agent shall have received a request for an
advance in accordance with Section 2.04.
Section 4.03 Deemed Representations. Each request by Borrower for,
and acceptance by Borrower of, an advance of proceeds of the Loans shall
constitute a representation and warranty by Borrower that, as of both the date
of such request and the date of the advance (1) no Default or Event of Default
has occurred and is continuing, and (2) if any representation or warranty
contained in this Agreement or the other Loan Documents is untrue or incorrect,
the condition giving rise to such untruthfulness or incorrectness is not likely
to result in a Material Adverse Change.
ARTICLE V. REPRESENTATIONS AND WARRANTIES
Borrower represents and warrants to Administrative Agent and each Bank as
follows:
Section 5.01 Due Organization. Borrower is duly organized, validly
existing and in good standing under the laws of the jurisdiction of its
organization, has the partnership power and authority to own its assets and to
transact the business in which it is now engaged, and, if applicable, is duly
qualified as a foreign partnership and in good standing under the laws of each
other jurisdiction in which such qualification is required.
Section 5.02 Power and Authority; No Conflicts; Compliance With
Laws. The execution, delivery and performance of the obligations required to be
performed by Borrower of
26
the Loan Documents does not and will not (a) require the consent or approval of
its partners or such consent or approval has been obtained, (b) contravene its
partnership agreement, (c) violate any provision of, or require any filing,
registration, consent or approval under, any Law (including, without limitation,
Regulation U), order, writ, judgment, injunction, decree, determination or award
presently in effect having applicability to it, (d) result in a breach of or
constitute a default under or require any consent under any indenture or loan or
credit agreement or any other agreement, lease or instrument to which it may be
a party or by which it or its properties may be bound or affected except for
consents which have been obtained, (e) result in, or require, the creation or
imposition of any Lien, upon or with respect to any of its properties now owned
or hereafter acquired, or (f) cause it to be in default under any such Law,
order, writ, judgment, injunction, decree, determination or award or any such
indenture, agreement, lease or instrument; to the best of its knowledge,
Borrower is in compliance with all Laws applicable to it where the failure to be
in compliance would cause a Material Adverse Change to occur.
Section 5.03 Legally Enforceable Agreements. Each Loan Document is a
legal, valid and binding obligation of Borrower, enforceable against Borrower in
accordance with its terms, except to the extent that such enforcement may be
limited by applicable bankruptcy, insolvency and other similar laws affecting
creditors' rights generally.
Section 5.04 Litigation. There are no actions, suits or proceedings
pending or, to its knowledge, threatened against Borrower or any of its
Affiliates before any court or arbitrator or any Governmental Authority except
actions, suits or proceedings which have been disclosed to Administrative Agent
and the Banks in writing and which are fully covered by insurance or would, if
adversely determined, not substantially impair the ability of Borrower to pay
when due any amounts which may become payable under the Notes or to otherwise
pay and perform its obligations in connection with the Loan.
Section 5.05 Good Title to Properties. Borrower and each of its
Affiliates have good, marketable and legal title to all of the properties and
assets each of them purports to own (including, without limitation, those
reflected in the June 30, 1997 financial statements referred to in Section 5.13)
and, in the case of all of Borrower's shopping center properties, only with
exceptions which do not materially detract from the value of such property or
assets or the use thereof in Borrower's and such Affiliate's business, and
except to the extent that any such properties and assets have been encumbered or
disposed of since the date of such financial statements without violating any of
the covenants contained in Article VII or elsewhere in this Agreement. Borrower
and its Affiliates enjoy peaceful and undisturbed possession of all leased
property necessary in any material respect in the conduct of their respective
businesses. All such leases are valid and subsisting and are in full force and
effect.
Section 5.06 Taxes. Borrower has filed all tax returns (federal,
state and local) required to be filed and has paid all taxes, assessments and
governmental charges and levies due and payable without the imposition of a
penalty, including interest and penalties, except to the extent they are the
subject of a Good Faith Contest.
Section 5.07 ERISA. Borrower is in compliance in all material
respects with all applicable provisions of ERISA. Neither a Reportable Event nor
a Prohibited Transaction has occurred with respect to any Plan; no notice of
intent to terminate a Plan has been filed nor has any Plan been terminated
within the past five (5) years; no circumstance exists which constitutes
27
grounds under Section 4042 of ERISA entitling the PBGC to institute proceedings
to terminate, or appoint a trustee to administer, a Plan, nor has the PBGC
instituted any such proceedings; Borrower and the ERISA Affiliates thereof have
not completely or partially withdrawn under Sections 4201 or 4204 of ERISA from
a Multiemployer Plan; Borrower and the ERISA Affiliates thereof have met the
minimum funding requirements of each under ERISA with respect to the plans of
each and there are no unfunded vested liabilities with respect to any plan
established or maintained by each; and Borrower and the ERISA Affiliates thereof
have not incurred any liability to the PBGC under ERISA.
Section 5.08 No Default on Outstanding Judgments or Orders. Borrower
has satisfied all judgments which are not being appealed and is not in default
with respect to any judgment, order, writ, injunction, decree, rule or
regulation of any court, arbitrator or federal, state, municipal or other
Governmental Authority, commission, board, bureau, agency or instrumentality,
domestic or foreign.
Section 5.09 No Defaults on Other Agreements. Except as disclosed to
the Bank Parties in writing, including anything disclosed on financial
statements, Borrower, to the best of its knowledge, is not a party to any
indenture, loan or credit agreement or any lease or other agreement or
instrument or subject to any partnership, trust or other restriction which is
likely to result in a Material Adverse Change. To the best of its knowledge,
Borrower is not in default in any respect in the performance, observance or
fulfillment of any of the obligations, covenants or conditions contained in any
agreement or instrument which is likely to result in a Material Adverse Change.
Section 5.10 Government Regulation. Borrower is not subject to
regulation under the Investment Company Act of 1940, the Interstate Commerce
Act, the Federal Powers Act or any statute or regulation limiting any such
Person's ability to incur indebtedness for money borrowed as contemplated
hereby.
Section 5.11 Environmental Protection. To the best of Borrower's
knowledge, none of Borrower's or its Affiliates' properties contains any
Hazardous Materials that, under any Environmental Law currently in effect, (1)
would impose liability on Borrower that is likely to result in a Material
Adverse Change, or (2) is likely to result in the imposition of a Lien on any
assets of Borrower or its Affiliates, in each case if not properly handled in
accordance with applicable Law. To the best of Borrower's knowledge, neither it
nor any of its Affiliates is in violation of, or subject to any existing,
pending or threatened investigation or proceeding by any Governmental Authority
under, any Environmental Law.
Section 5.12 Solvency. Borrower is, and upon consummation of the
transactions contemplated by this Agreement, the other Loan Documents and any
other documents, instruments or agreements relating thereto, will be, Solvent.
Section 5.13 Financial Statements. The TRG Consolidated Financial
Statements most recently delivered to the Banks pursuant to the terms of this
Agreement are in all material respects complete and correct and fairly present
the financial condition of the subjects thereof as of the dates of and for the
periods covered by such statements, all in accordance with GAAP, and there has
been no Material Adverse Change since the date of such most recently delivered
TRG Consolidated Financial Statements.
28
Section 5.14 Valid Existence of Affiliates. As of the Closing Date,
the only material Affiliates of Borrower which own or lease operating shopping
centers or shopping centers under construction are listed on EXHIBIT D. Each
such Affiliate is a partnership, limited liability company or joint venture duly
organized and existing in good standing under the laws of the jurisdiction of
its formation. As to each such Affiliate, its correct name, the jurisdiction of
its formation and Borrower's percentage of beneficial interest therein are set
forth on said EXHIBIT D. Borrower and each of such Affiliates have the power to
own their respective properties and to carry on their respective businesses now
being conducted. Each of Borrower and such Affiliates is duly qualified as a
foreign partnership, company or venture to do business and is in good standing
in every jurisdiction in which the nature of the respective businesses conducted
by it or its respective properties, owned or held under lease, make such
qualification necessary.
Section 5.15 Insurance. Borrower and each of its Affiliates has in
force paid insurance with financially sound and reputable insurance companies or
associations in such amounts and covering such risks as are usually carried by
companies engaged in the same or a similar business and similarly situated.
Section 5.16 Accuracy of Information; Full Disclosure. Neither this
Agreement nor any documents, financial statements, reports, notices, schedules,
certificates, statements or other writings furnished by or on behalf of Borrower
to Administrative Agent or any Bank in connection with the negotiation of this
Agreement or the consummation of the transactions contemplated hereby, or
required herein to be furnished by or on behalf of Borrower, contains any untrue
or misleading statement of a material fact or omits a material fact necessary to
make the statements herein or therein not misleading. There is no fact which
Borrower has not disclosed to Administrative Agent and the Banks in writing
which materially affects adversely nor, so far as Borrower can now foresee, will
materially affect adversely the business, prospects, profits or financial
condition of Borrower or the ability of Borrower to perform this Agreement and
the other Loan Documents.
ARTICLE VI. AFFIRMATIVE COVENANTS
So long as any of the Notes shall remain unpaid or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to any
Bank hereunder or under any other Loan Document, Borrower shall:
Section 6.01 Maintenance of Existence. Preserve and maintain its
legal existence and, if applicable, good standing in the jurisdiction of
organization and, if applicable, qualify and remain qualified as a foreign
partnership in each jurisdiction in which such qualification is required, except
to the extent that failure to so qualify is not likely to result in a Material
Adverse Change.
Section 6.02 Maintenance of Records. Keep adequate records and books
of account, in which complete entries will be made in accordance with GAAP,
reflecting all of its financial transactions.
Section 6.03 Maintenance of Insurance. At all times, maintain and
keep in force, and cause each of its Affiliates to maintain and keep in force,
insurance with financially
29
sound and reputable insurance companies or associations in such amounts and
covering such risks as are usually carried by companies engaged in the same or a
similar business and similarly situated, which insurance may provide for
reasonable deductibility from coverage thereof.
Section 6.04 Compliance with Laws; Payment of Taxes. Comply in all
respects with all Laws applicable to it or to any of its properties or any part
thereof, such compliance to include, without limitation, paying before the same
become delinquent all taxes, assessments and governmental charges imposed upon
it or upon its property, except to the extent they are the subject of a Good
Faith Contest.
Section 6.05 Right of Inspection. At any reasonable time and from
time to time upon reasonable notice, permit Administrative Agent or any Bank or
any agent or representative thereof (provided that a representative of any Bank
must, at Borrower's request, be accompanied by a representative of Borrower), to
examine and make copies and abstracts from the records and books of account of,
and visit the properties of, Borrower and to discuss the affairs, finances and
accounts of Borrower with the independent accountants of Borrower.
Section 6.06 Compliance With Environmental Laws. Comply in all
material respects with all applicable Environmental Laws and immediately pay or
cause to be paid all costs and expenses incurred in connection with such
compliance, except to the extent there is a Good Faith Contest.
Section 6.07 Payment of Costs. Pay all costs and expenses required
for the satisfaction of the conditions of this Agreement.
Section 6.08 Maintenance of Properties. Borrower will do all things
reasonably necessary to maintain, preserve, protect and keep its and its
Affiliates' properties in good repair, working order and condition.
Section 6.09 Reporting and Miscellaneous Document Requirements.
Furnish directly to each of the Banks:
(1) Annual Financial Statements. As soon as available and in any
event within ninety (90) days after the end of each Fiscal Year, the TRG
Consolidated Financial Statements as of the end of and for such Fiscal
Year, in reasonable detail and stating in comparative form the respective
figures for the corresponding date and period in the prior Fiscal Year and
audited by Borrower's Accountants;
(2) Quarterly Financial Statements. As soon as available and in any
event within forty-five (45) days after the end of each calendar quarter
(other than the last quarter of the Fiscal Year), the unaudited TRG
Consolidated Financial Statements as of the end of and for such calendar
quarter, in reasonable detail and stating in comparative form the
respective figures for the corresponding date and period in the prior
Fiscal Year;
(3) Statement of Gross Asset Value. As soon as available and in any
event within ninety (90) days after June 30th of each year, a statement by
Borrower setting forth the calculation of Gross Asset Value, including
individual ten (10)-year projections for each asset (described in clause
(ii) of the definition of Gross Asset Value in Section 1.01) contributing
to Gross Asset Value and a summary of material assumptions,
30
accompanied by a concurrence letter from the Banks' Valuation Consultant
confirming that, based on their review of all relevant materials, there is
no more than a ten percent (10%) variation between the contribution to
Gross Asset Value from all the assets described in clause (ii) of the
definition of Gross Asset Value in Section 1.01, as determined by
Borrower, and the contribution from said assets to Gross Asset Value if
the same had been estimated by the reviewer in a full appraisal of the
same interests, which concurrence letter shall contain a one (1)-page
summary of its analysis for each of the individual assets contributing to
Gross Asset Value;
(4) Certificate of No Default and Financial Compliance. Within forty
five (45) days after the end of each of the first three quarters of each
Fiscal Year and within ninety (90) days after the end of each Fiscal Year,
a certificate of Borrower's chief financial officer or Treasurer (a)
stating that, to the best of his or her knowledge, no Default or Event of
Default has occurred and is continuing, or if a Default or Event of
Default has occurred and is continuing, specifying the nature thereof and
the action which is proposed to be taken with respect thereto; (b) stating
that the covenants contained in Sections 7.02, 7.03 and 7.04 and in
Article VIII have been complied with (or specifying those that have not
been complied with) and including computations demonstrating such
compliance (or non-compliance); and (c) setting forth the details of all
items comprising Total Outstanding Indebtedness (including amount,
maturity, interest rate and amortization requirements), Unencumbered
Combined EBITDA, Unsecured Interest Expense and Unsecured Indebtedness;
(5) Certificate of Borrower's Accountants. Simultaneously with the
delivery of the annual financial statements required by paragraph (1) of
this Section, a statement of Borrower's Accountants who audited such
financial statements comparing the computations set forth in the financial
compliance certificate required by paragraph (4) of this Section to the
audited financial statements required by paragraph (1) of this Section
(where such information appears in such financial statements);
(6) Notice of Litigation. Promptly after the commencement and
knowledge thereof, notice of all actions, suits, and proceedings before
any court or arbitrator, affecting Borrower which, if determined adversely
to Borrower is likely to result in a Material Adverse Change;
(7) Notices of Defaults and Events of Default. As soon as possible
and in any event within ten (10) days after Borrower becomes aware of the
occurrence of a material Default or any Event of Default a written notice
setting forth the details of such Default or Event of Default and the
action which is proposed to be taken with respect thereto;
(8) Dispositions or Acquisitions of Assets. Within thirty (30) days
after the occurrence thereof, written notice of any Disposition or
acquisition of assets (other than acquisitions or Dispositions of
investments such as certificates of deposit, Treasury securities and money
market deposits in the ordinary course of Borrower's cash management) in
excess of Twenty Five Million Dollars ($25,000,000), together with, in the
case of any acquisition of such an asset, (i) a certificate of the sort
required by paragraph (4)(b) of this Section, containing covenant
compliance calculations that include the pro-forma adjustments set forth
at the end of this Section, which calculations
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shall demonstrate Borrower's compliance, on a pro-forma basis, as of the
end of the most recently ended calendar quarter for which financial
results are required hereunder to have been reported by Borrower, with all
covenants enumerated in said paragraph (4)(b) and (ii) such other
information relating to the acquisition as Administrative Agent may
reasonably request, including, without limitation, (x) copies of the
agreements governing the acquisition and (y) historical balance sheets (to
the extent available) and statements of income and cash flows with respect
to the property acquired for at least the preceding three (3) years and
Borrower's revenue and expense projections for the property acquired for
at least the next five (5) years (all of the foregoing to be in form and
detail satisfactory to Administrative Agent);
(9) Material Adverse Change. As soon as is practicable and in any
event within five (5) days after knowledge of the occurrence of any event
or circumstance which is likely to result in or has resulted in a Material
Adverse Change, written notice thereof;
(10) Bankruptcy of Tenants. Promptly after becoming aware of the
same, written notice of the bankruptcy, insolvency or cessation of
operations of any tenant in any property of Borrower or in which Borrower
has an interest to which five percent (5%) or more of minimum rent payable
to Borrower directly or through its Consolidated Businesses or UJVs is
attributable;
(11) Offices. Thirty (30) days' prior written notice of any change
in the chief executive office or principal place of business of Borrower;
(12) Environmental and Other Notices. As soon as possible and in any
event within five (5) days after receipt, copies of all Environmental
Notices received by Borrower which are not received in the ordinary course
of business and which relate to a situation which is likely to result in a
Material Adverse Change;
(13) Insurance Coverage. Promptly, such information concerning
Borrower's insurance coverage as Administrative Agent may reasonably
request;
(14) Change in Borrower's Credit Rating. Within two (2) Banking Days
after any change in Borrower's Credit Rating, written notice of such
change;
(15) SEC Filings, Etc. As soon as possible and in any event within
ten (10) days of the sending or filing thereof, copies of all proxy
statements, financial statements and reports which TCI sends to its
shareholders, and copies of all annual reports on Form 10-K (without
exhibits), quarterly reports on Form 10-Q (without exhibits) and current
reports on Form 8-K (without exhibits), and all registration statements
which are declared effective which Borrower or TCI files with the
Securities and Exchange Commission or any Governmental Authority which may
be substituted therefor; and
(16) General Information. Promptly, such other information
respecting the condition or operations, financial or otherwise, of
Borrower or any properties of Borrower as Administrative Agent may from
time to time reasonably request.
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In connection with each acquisition of assets that is required to be
reported pursuant to paragraph (8) of this Section, the following pro-forma
adjustments shall be made to the covenant compliance calculations required as of
the end of the most recently ended calendar quarter for which financial results
are required hereunder to have been reported by Borrower:
(i) Gross Asset Value shall be adjusted by adding thereto the
lesser of (A) the Purchase Price Borrower paid for the acquired asset or
(B) the acquired asset's trailing twelve (12)-month net operating income,
less any management fee adjustment, if applicable, capitalized at a rate
of eight percent (8%) per annum; provided, however, that, at Borrower's
request and expense, Administrative Agent shall promptly cause the Banks'
Valuation Consultant to appraise the acquired asset and, upon the
completion of such appraisal, provided such appraisal is reasonably
satisfactory to Administrative Agent, the appraised value of the acquired
asset as determined in such appraisal shall be substituted for the amount
calculated pursuant to clauses (A) and (B) above.
(ii) Total Outstanding Indebtedness, Secured Indebtedness and
Unsecured Indebtedness shall be adjusted by adding thereto, respectively,
all indebtedness, secured indebtedness and unsecured indebtedness that is
assumed and/or incurred by Borrower in connection with the acquisition.
For purposes of such adjustments, indebtedness, secured indebtedness and
unsecured indebtedness in connection with the acquisition shall be treated
in a manner consistent with the treatment of Total Outstanding
Indebtedness, Secured Indebtedness and Unsecured Indebtedness in the TRG
Consolidated Financial Statements.
(iii) Combined EBITDA, for any period, shall be adjusted by adding
(or subtracting, in the case of a loss) thereto actual revenues less
operating costs before interest, depreciation, amortization and
extraordinary items, for the same period (based on the same accounting
principles and assumptions as are set forth in the definition of "Combined
EBITDA" in Section 1.01, to the extent possible based on information
reasonably available with respect to the acquired asset), from the
acquired asset.
(iv) If, upon its acquisition, the acquired asset becomes part of
Unencumbered Wholly-Owned Assets, Unencumbered Combined EBITDA, for any
period, shall be adjusted by adding (or subtracting, in the case of a
loss) thereto actual income before interest expense, income taxes,
depreciation, amortization and extraordinary items, for the same period,
from the acquired asset.
(v) Interest Expense and Unsecured Interest Expense, for any
period, shall be adjusted by adding thereto interest expense to be
incurred on, respectively, all indebtedness and unsecured indebtedness
that is assumed and/or incurred by Borrower in connection with the
acquisition, assuming, for purposes of this calculation, that such
indebtedness were to bear interest at a rate 1.75% per annum in excess of
the rate of interest that would be payable on a ten (10)-year United
States Treasury Note issued as of the date of the acquisition.
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ARTICLE VII. NEGATIVE COVENANTS
So long as any of the Notes shall remain unpaid, or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to
Administrative Agent or any Bank hereunder or under any other Loan Document,
Borrower shall not do any or all of the following:
Section 7.01 Mergers Etc. Merge or consolidate with (except where
Borrower or a Person wholly-owned by Borrower is the surviving entity), or sell,
assign, lease or otherwise dispose of (whether in one transaction or in a series
of transactions) all or substantially all of its assets (whether now owned or
hereafter acquired) (or enter into any agreement to do any of the foregoing).
Section 7.02 Investments. Make any loan or advance to any Person or
purchase or otherwise acquire any capital stock, assets, obligations or other
securities of, make any capital contribution to, or otherwise invest in, or
acquire any interest in, any Person (any such transaction, an "Investment") if
(1) the Investment is in connection with something other than a retail shopping
center and the amount of any single such Investment (or the aggregate amount of
any single such Investment together with all related Investments), would exceed
twenty percent (20%) of Net Worth; (2) except to the extent permitted by clause
(3) below, such Investment constitutes the acquisition of a minority interest in
a Person (a "Minority Interest") and the amount of such Investment, together
with the value of all other Minority Interests acquired after the Closing Date
contributing to Gross Asset Value, would exceed ten percent (10%) of Net Worth,
or (3) such Investment constitutes the acquisition of a Minority Interest in a
regional shopping center or portfolio of regional shopping centers and the
amount of such Investment, together with the value of all other such Minority
Interests, would exceed twenty percent (20%) of Net Worth. A fifty percent (50%)
beneficial interest in a Person, in connection with which the holder thereof
exercises joint control over such Person with the holder(s) of the other fifty
percent (50%) beneficial interest, shall not constitute a "Minority Interest"
for purposes of this Section.
Section 7.03 Sale of Assets. Effect a Disposition of any of its now
owned or hereafter acquired assets, including assets in which Borrower owns a
beneficial interest through its ownership of interests in joint ventures,
aggregating more than forty percent (40%) of Gross Asset Value.
Section 7.04 Interest Rate Hedging. At any time, permit or suffer
more than twenty five percent (25%) of Total Outstanding Indebtedness not to be
"hedged"; for purposes of this Section, "hedged" shall mean bearing interest at
an effective fixed rate, either pursuant to the debt instrument itself or
through the operation of a "cap", "collar", "swap" or comparable interest rate
protection contract, such debt instrument, or instrument creating the "cap",
"collar", "swap" or comparable interest rate protection contract, as the case
may be, having an original term of at least twelve (12) months.
Section 7.05 Partnership Committee of Borrower. At any time, permit
or suffer the failure or inability of any one (1) or more of (1) TG Partners
Limited Partnership and/or Taub-Co Management, Inc.; (2) the General Motors
Hourly-Rate Employees Pension Trust and/or the General Motors Salaried Employees
Pension Trust, directly or indirectly (or a single
34
"GMPTS Transferee," as such quoted term is defined in Borrower's Amended and
Restated Agreement of Limited Partnership); and (3) TCI, to designate a majority
of Borrower's partnership committee.
ARTICLE VIII. FINANCIAL COVENANTS
So long as any of the Notes shall remain unpaid, or the Loan
Commitments remain in effect, or any other amount is owing by Borrower to
Administrative Agent or any Bank under this Agreement or under any other Loan
Document, Borrower shall not permit or suffer:
Section 8.01 Net Worth. At any time, Net Worth to be less than One
Billion Dollars ($1,000,000,000); or
Section 8.02 Relationship of Total Outstanding Indebtedness to Gross
Asset Value. At any time, Total Outstanding Indebtedness to exceed fifty percent
(50%) of Gross Asset Value; or
Section 8.03 Relationship of Secured Indebtedness to Gross Asset
Value. At any time, Secured Indebtedness to exceed thirty five percent (35%) of
Gross Asset Value; or
Section 8.04 Relationship of Combined EBITDA to Interest Expense. As
of the end of any calendar quarter, the ratio of (1) Combined EBITDA to (2)
Interest Expense, each for the twelve (12)-month period then ended and taken as
a whole, to be less than 1.85 to 1.0; or
Section 8.05 Relationship of Combined EBITDA to Adjusted Total
Outstanding Indebtedness. As of the end of any calendar quarter, the ratio
(expressed as a percentage) of (1) Combined EBITDA for the twelve (12)-month
period then ended and taken as a whole to (2) Adjusted Total Outstanding
Indebtedness as of the end of such calendar quarter to be less than thirteen
percent (13%); or
Section 8.06 Combined EBTDA. As of the end of any calendar quarter,
Combined EBTDA for such calendar quarter to be less than Twelve Million Five
Hundred Thousand Dollars ($12,500,000); or
Section 8.07 Unsecured Debt Yield. As of the end of any calendar
quarter, Unsecured Debt Yield for such calendar quarter to be less than eleven
and one half percent (11- 1/2%); or
Section 8.08 Relationship of Unencumbered Combined EBITDA to
Interest Expense on Unsecured Indebtedness. As of the end of any calendar
quarter, the ratio of (1) Unencumbered Combined EBITDA to (2) that portion of
Interest Expense attributable to Unsecured Indebtedness, each for the prior
twelve (12)-month period then ended and taken as a whole, to be less than 1.50
to 1.00.
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ARTICLE IX. EVENTS OF DEFAULT
Section 9.01Events of Default. Any of the following events shall be
an "Event of Default":
(1) If Borrower shall: fail to pay the principal of any Notes as and
when due; or fail to pay interest accruing on any Notes as and when due
and such failure to pay shall continue unremedied for five (5) days after
the due date of such amount; or fail to pay any fee or interest or any
other amount due under this Agreement or any other Loan Document as and
when due and such failure to pay shall continue unremedied for two (2)
days after notice by Administrative Agent of such failure to pay; or
(2) If any representation or warranty made by Borrower in this
Agreement or in any other Loan Document or which is contained in any
certificate, document, opinion, financial or other statement furnished at
any time under or in connection with a Loan Document shall prove to have
been incorrect in any material respect on or as of the date made; or
(3) If Borrower shall fail (a) to perform or observe any term,
covenant or agreement contained in Article VII or Article VIII; or (b) to
perform or observe any term, covenant or agreement contained in Article VI
or otherwise contained in this Agreement (other than obligations
specifically referred to elsewhere in this Section) or any Loan Document,
or any other document executed by Borrower and delivered to Administrative
Agent and/or the Banks in connection with the transactions contemplated
hereby and such failure shall remain unremedied for thirty (30)
consecutive calendar days after the occurrence thereof (or such shorter
cure period as may be expressly prescribed in the applicable Loan
Document); provided, however, that if any such default under clause (b)
above cannot by its nature be cured within such thirty (30) day, or
shorter, as the case may be, grace period and so long as Borrower shall
have commenced cure within such thirty (30) day, or shorter, as the case
may be, grace period and shall, at all times thereafter, diligently
prosecute the same to completion, Borrower shall have an additional
period, not to exceed sixty (60) days, to cure such default; in no event,
however, is the foregoing intended to effect an extension of the Maturity
Date; or
(4) If Borrower shall fail (a) to pay any Debt (other than the
payment obligations described in paragraph (1) of this Section) in an
amount equal to or greater than Ten Million Dollars ($10,000,000) when due
(whether by scheduled maturity, required prepayment, acceleration, demand,
or otherwise), or (b) to perform or observe any material term, covenant,
or condition under any agreement or instrument relating to any such Debt,
when required to be performed or observed, if the effect of such failure
to perform or observe is to accelerate, or to permit the acceleration of,
after the giving of notice or the lapse of time, or both (other than in
cases where, in the judgment of the Required Banks, meaningful discussions
likely to result in (i) a waiver or cure of the failure to perform or
observe, or (ii) otherwise averting such acceleration are in progress
between Borrower and the obligee of such Debt), the maturity of such Debt,
or any such Debt shall be declared to be due and payable, or required to
be prepaid (other than by a regularly scheduled or otherwise required
prepayment), prior to the stated maturity thereof; or
36
(5) If Borrower, or any Affiliate of Borrower to which One Hundred
Fifty Million Dollars ($150,000,000) or more of Gross Asset Value is
attributable, shall: (a) generally not, or be unable to, or shall admit in
writing its inability to, pay its debts as such debts become due; or (b)
make an assignment for the benefit of creditors, petition or apply to any
tribunal for the appointment of a custodian, receiver or trustee for it or
a substantial part of its assets; or (c) commence any proceeding under any
bankruptcy, reorganization, arrangement, readjustment of debt, dissolution
or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect; or (d) have had any such petition or application
filed or any such proceeding shall have been commenced, against it, in
which an adjudication or appointment is made or order for relief is
entered, or which petition, application or proceeding remains undismissed
or unstayed for a period of sixty (60) days or more; or (e) be the subject
of any proceeding under which all or a substantial part of its assets may
be subject to seizure, forfeiture or divestiture; or (f) by any act or
omission indicate its consent to, approval of or acquiescence in any such
petition, application or proceeding or order for relief or the appointment
of a custodian, receiver or trustee for all or any substantial part of its
property; or (g) suffer any such custodianship, receivership or
trusteeship for all or any substantial part of its property, to continue
undischarged for a period of sixty (60) days or more; or
(6) If one or more judgments, decrees or orders for the payment of
money in excess of Ten Million Dollars ($10,000,000) in the aggregate
shall be rendered against Borrower, and any such judgments, decrees or
orders shall continue unsatisfied and in effect for a period of thirty
(30) consecutive days without being vacated, discharged, satisfied or
stayed or bonded pending appeal; or
(7) If any of the following events shall occur or exist with respect
to Borrower, or any ERISA Affiliate of Borrower: (a) any Prohibited
Transaction involving any Plan; (b) any Reportable Event with respect to
any Plan: (c) the filing under Section 4041 of ERISA of a notice of intent
to terminate any Plan or the termination of any Plan; (d) any event or
circumstance which might constitute grounds entitling the PBGC to
institute proceedings under Section 4042 of ERISA for the termination of,
or for the appointment of a trustee to administer, any Plan, or the
institution by the PBGC of any such proceedings; or (e) complete or
partial withdrawal under Section 4201 or 4204 of ERISA from a
Multiemployer Plan or the reorganization, insolvency, or termination of
any Multiemployer Plan; and in each case above, if such event or
conditions, if any, could in the opinion of any Bank subject Borrower or
any ERISA Affiliate of Borrower to any tax, penalty, or other liability to
a Plan, Multiemployer Plan, the PBGC or otherwise (or any combination
thereof) which in the aggregate exceeds or may exceed Fifty Thousand
Dollars ($50,000); or
(8) If at any time TCI is not a qualified real estate investment
trust under Sections 856 through 860 of the Code or is not listed on the
New York Stock Exchange or the American Stock Exchange; or
(9) If at any time Borrower fails to operate as a real estate
operating company for ERISA purposes (within the meaning of C.F.R.
ss.2510.3-101); or
37
(10) If the Taubman Company Limited Partnership, the entity presently
providing property management and leasing services for all the regional
shopping center properties in which Borrower has an ownership interest,
shall discontinue providing such services for twenty five percent (25%) or
more of the regional shopping center properties then owned in whole or in
part by Borrower.
Section 9.02 Remedies. If any Event of Default shall occur and be
continuing, Administrative Agent shall, upon request of the Required Banks, by
notice to Borrower, (1) declare the outstanding Notes, all interest thereon, and
all other amounts payable under this Agreement, and any other Loan Documents to
be forthwith due and payable, whereupon the Notes, all such interest, and all
such amounts due under this Agreement, and under any other Loan Document shall
become and be forthwith due and payable, without presentment, demand, protest,
or further notice of any kind, all of which are hereby expressly waived by
Borrower; and/or (2) exercise any remedies provided in any of the Loan Documents
or by law.
ARTICLE X. ADMINISTRATIVE AGENT; RELATIONS AMONG BANKS
Section 10.01 Appointment, Powers and Immunities of Administrative
Agent. Each Bank hereby irrevocably appoints and authorizes Administrative Agent
to act as its agent hereunder and under any other Loan Document with such powers
as are specifically delegated to Administrative Agent by the terms of this
Agreement and any other Loan Document, together with such other powers as are
reasonably incidental thereto. Administrative Agent shall have no duties or
responsibilities except those expressly set forth in this Agreement and any
other Loan Document or required by law, and shall not by reason of this
Agreement be a fiduciary or trustee for any Bank except to the extent that
Administrative Agent acts as an agent with respect to the receipt or payment of
funds (nor shall Administrative Agent have any fiduciary duty to Borrower nor
shall any Bank have any fiduciary duty to Borrower or to any other Bank).
Administrative Agent shall not be responsible to the Banks for any recitals,
statements, representations or warranties made by Borrower or any officer,
partner or official of Borrower or any other Person contained in this Agreement
or any other Loan Document, or in any certificate or other document or
instrument referred to or provided for in, or received by any of them under,
this Agreement or any other Loan Document, or for the value, legality, validity,
effectiveness, genuineness, enforceability or sufficiency of this Agreement or
any other Loan Document or any other document or instrument referred to or
provided for herein or therein, for the perfection or priority of any Lien
securing the Obligations or for any failure by Borrower to perform any of its
obligations hereunder or thereunder. Administrative Agent may employ agents and
attorneys-in-fact and shall not be responsible, except as to money or securities
received by it or its authorized agents, for the negligence or misconduct of any
such agents or attorneys-in-fact selected by it with reasonable care. Neither
Administrative Agent nor any of its directors, officers, employees or agents
shall be liable or responsible for any action taken or omitted to be taken by it
or them hereunder or under any other Loan Document or in connection herewith or
therewith, except for its or their own gross negligence or willful misconduct.
Borrower shall pay any fee agreed to by Borrower and Administrative Agent with
respect to Administrative Agent's services hereunder.
Section 10.02 Reliance by Administrative Agent. Administrative Agent
shall be entitled to rely upon any certification, notice or other communication
(including any thereof by telephone, telex, telegram or cable) believed by it to
be genuine and correct and to have been
38
signed or sent by or on behalf of the proper Person or Persons, and upon advice
and statements of legal counsel, independent accountants and other experts
selected by Administrative Agent. Administrative Agent may deem and treat each
Bank as the holder of the Loan made by it for all purposes hereof and shall not
be required to deal with any Person who has acquired a participation in any Loan
or participation from a Bank. As to any matters not expressly provided for by
this Agreement or any other Loan Document, Administrative Agent shall in all
cases be fully protected in acting, or in refraining from acting, hereunder in
accordance with instructions signed by the Required Banks, and such instructions
of the Required Banks and any action taken or failure to act pursuant thereto
shall be binding on all of the Banks and any other holder of all or any portion
of any Loan or participation.
Section 10.03 Defaults. Administrative Agent shall not be deemed to
have knowledge of the occurrence of a Default or Event of Default unless
Administrative Agent has received notice from a Bank or Borrower specifying such
Default or Event of Default and stating that such notice is a "Notice of
Default." In the event that Administrative Agent receives such a notice of the
occurrence of a Default or Event of Default, Administrative Agent shall give
prompt notice thereof to the Banks. Administrative Agent, following consultation
with the Banks, shall (subject to Section 10.07) take such action with respect
to such Default or Event of Default which is continuing as shall be directed by
the Required Banks; provided that, unless and until Administrative Agent shall
have received such directions, Administrative Agent may take such action, or
refrain from taking such action, with respect to such Default or Event of
Default as it shall deem advisable in the best interest of the Banks; and
provided further that Administrative Agent shall not send a notice of Default or
acceleration to Borrower without the approval of the Required Banks. In no event
shall Administrative Agent be required to take any such action which it
determines to be contrary to law.
Section 10.04 Rights of Administrative Agent as a Bank. With respect
to its Loan Commitment and the Loan provided by it, Administrative Agent in its
capacity as a Bank hereunder shall have the same rights and powers hereunder as
any other Bank and may exercise the same as though it were not acting as
Administrative Agent, and the term "Bank" or "Banks" shall, unless the context
otherwise indicates, include Administrative Agent in its capacity as a Bank.
Administrative Agent and its Affiliates may (without having to account therefor
to any Bank) accept deposits from, lend money to (on a secured or unsecured
basis), and generally engage in any kind of banking, trust or other business
with Borrower (and any Affiliates of Borrower) as if it were not acting as
Administrative Agent.
Section 10.05 Indemnification of Administrative Agent. Each Bank
agrees to indemnify Administrative Agent (to the extent not reimbursed under
Section 12.04 or under the applicable provisions of any other Loan Document, but
without limiting the obligations of Borrower under Section 12.04 or such
provisions), for its Pro Rata Share of any and all liabilities, obligations,
losses, damages, penalties, actions, judgments, suits, costs, expenses or
disbursements of any kind and nature whatsoever which may be imposed on,
incurred by or asserted against Administrative Agent in any way relating to or
arising out of this Agreement, any other Loan Document or any other documents
contemplated by or referred to herein or the transactions contemplated hereby or
thereby (including, without limitation, the costs and expenses which Borrower is
obligated to pay under Section 12.04) or under the applicable provisions of any
other Loan Document or the enforcement of any of the terms hereof or thereof or
of any such other documents or instruments; provided that no Bank shall be
liable for (1) any
39
of the foregoing to the extent they arise from the gross negligence or willful
misconduct of the party to be indemnified, (2) any loss of principal or interest
with respect to Administrative Agent's Loan or (3) any loss suffered by
Administrative Agent in connection with a swap or other interest rate hedging
arrangement entered into by Administrative Agent with Borrower.
Section 10.06 Non-Reliance on Administrative Agent and Other Banks.
Each Bank agrees that it has, independently and without reliance on
Administrative Agent or any other Bank, and based on such documents and
information as it has deemed appropriate, made its own credit analysis of
Borrower and the decision to enter into this Agreement and that it will,
independently and without reliance upon Administrative Agent or any other Bank,
and based on such documents and information as it shall deem appropriate at the
time, continue to make its own analysis and decisions in taking or not taking
action under this Agreement or any other Loan Document. Administrative Agent
shall not be required to keep itself informed as to the performance or
observance by Borrower of this Agreement or any other Loan Document or any other
document referred to or provided for herein or therein or to inspect the
properties or books of Borrower. Except for notices, reports and other documents
and information expressly required to be furnished to the Banks by
Administrative Agent hereunder, Administrative Agent shall not have any duty or
responsibility to provide any Bank with any credit or other information
concerning the affairs, financial condition or business of Borrower (or any
Affiliate of Borrower) which may come into the possession of Administrative
Agent or any of its Affiliates. Administrative Agent shall not be required to
file this Agreement, any other Loan Document or any document or instrument
referred to herein or therein, for record or give notice of this Agreement, any
other Loan Document or any document or instrument referred to herein or therein,
to anyone.
Section 10.07 Failure of Administrative Agent to Act. Except for
action expressly required of Administrative Agent hereunder, Administrative
Agent shall in all cases be fully justified in failing or refusing to act
hereunder unless it shall have received further assurances (which may include
cash collateral) of the indemnification obligations of the Banks under Section
10.05 in respect of any and all liability and expense which may be incurred by
it by reason of taking or continuing to take any such action.
Section 10.08 Resignation or Removal of Administrative Agent.
Provided there exists no Event of Default, Administrative Agent hereby agrees
not to unilaterally resign except in the event it becomes an Affected Bank and
is removed or replaced as a Bank pursuant to Section 3.07, in which event it
shall have the right to resign. Administrative Agent may be removed at any time
with or without cause by the Required Banks, provided that Borrower and the
other Banks shall be promptly notified thereof. Upon any such resignation or
removal, the successor Administrative Agent shall, at Fleet's option, be Fleet.
If Fleet elects not to become the successor Administrative Agent, the Required
Banks shall have the right to appoint a successor Administrative Agent. If no
successor Administrative Agent shall have been so appointed by the Required
Banks and shall have accepted such appointment within thirty (30) days after the
Required Banks' removal of the retiring Administrative Agent, then the retiring
Administrative Agent may, on behalf of the Banks, appoint a successor
Administrative Agent, which shall be one of the Banks. The Required Banks or the
retiring Administrative Agent, as the case may be, shall upon the appointment of
a successor Administrative Agent promptly so notify Borrower and the other
Banks. Upon the acceptance of any appointment as Administrative Agent hereunder
by a successor Administrative Agent, such successor
40
Administrative Agent shall thereupon succeed to and become vested with all the
rights, powers, privileges and duties of the retiring Administrative Agent, and
the retiring Administrative Agent shall be discharged from its duties and
obligations hereunder. After any retiring Administrative Agent's removal
hereunder as Administrative Agent, the provisions of this Article X shall
continue in effect for its benefit in respect of any actions taken or omitted to
be taken by it while it was acting as Administrative Agent.
Section 10.09 Amendments Concerning Agency Function. Notwithstanding
anything to the contrary contained in this Agreement, Administrative Agent shall
not be bound by any waiver, amendment, supplement or modification of this
Agreement or any other Loan Document which affects its duties, rights, and/or
function hereunder or thereunder unless it shall have given its prior written
consent thereto.
Section 10.10 Liability of Administrative Agent. Administrative
Agent shall not have any liabilities or responsibilities to Borrower on account
of the failure of any Bank to perform its obligations hereunder or to any Bank
on account of the failure of Borrower to perform its obligations hereunder or
under any other Loan Document.
Section 10.11 Transfer of Agency Function. Without the consent of
Borrower or any Bank, Administrative Agent may at any time or from time to time
transfer its functions as Administrative Agent hereunder to any of its offices
wherever located in the United States, provided that Administrative Agent shall
promptly notify Borrower and the Banks thereof.
Section 10.12 Non-Receipt of Funds by Administrative Agent. Unless
Administrative Agent shall have received notice from a Bank or Borrower (either
one as appropriate being the "Payor") prior to the date on which such Bank is to
make payment hereunder to Administrative Agent of the proceeds of a Loan or
Borrower is to make payment to Administrative Agent, as the case may be (either
such payment being a "Required Payment"), which notice shall be effective upon
receipt, that the Payor will not make the Required Payment in full to
Administrative Agent, Administrative Agent may assume that the Required Payment
has been made in full to Administrative Agent on such date, and Administrative
Agent in its sole discretion may, but shall not be obligated to, in reliance
upon such assumption, make the amount thereof available to the intended
recipient on such date. If and to the extent the Payor shall not have in fact so
made the Required Payment in full to Administrative Agent, the recipient of such
payment shall repay to Administrative Agent forthwith on demand such amount made
available to it together with interest thereon, for each day from the date such
amount was so made available by Administrative Agent until the date
Administrative Agent recovers such amount, at the customary rate set by
Administrative Agent for the correction of errors among Banks for three (3)
Banking Days and thereafter at the Base Rate.
Section 10.13 Withholding Taxes. Each Bank represents that it is
entitled to receive any payments to be made to it hereunder without the
withholding of any tax and will furnish to Administrative Agent such forms,
certifications, statements and other documents as Administrative Agent or
Borrower may request from time to time to evidence such Bank's exemption from
the withholding of any tax imposed by any jurisdiction or to enable
Administrative Agent to comply with any applicable Laws or regulations relating
thereto. Without limiting the effect of the foregoing, if any Bank is not
created or organized under the laws of the United States of America or any state
thereof, such Bank will furnish to
41
Administrative Agent Form 4224 or Form 1001 of the Internal Revenue Service, or
such other forms, certifications, statements or documents, duly executed and
completed by such Bank as evidence of such Bank's exemption from the withholding
of U.S. tax with respect thereto. Administrative Agent shall not be obligated to
make any payments hereunder to such Bank in respect of any Loan or participation
or such Bank's Loan Commitment or obligation to purchase participations until
such Bank shall have furnished to Administrative Agent the requested form,
certification, statement or document.
Section 10.14 Minimum Commitment by Fleet and PNC. Subsequent to the
Closing Date, each of Fleet and PNC agree to maintain a Loan Commitment in an
amount no less than Twenty Five Million Dollars ($25,000,000), provided there
exists no Event of Default, and each of them further agrees to hold and not to
participate or assign any of such amount other than an assignment to a Federal
Reserve Bank or to their respective Parent or respective majority-owned
subsidiary.
Section 10.15 Pro Rata Treatment. Except to the extent otherwise
provided, (1) each advance of proceeds of the Loans shall be made by the Banks,
(2) each reduction of the amount of the Total Loan Commitment under Section 2.10
or Section 2.11 shall be applied to the Loan Commitments of the Banks, and (3)
each payment of the facility fee accruing under Section 2.08(a) shall be made
for the account of the Banks, ratably according to the amounts of their
respective Loan Commitments.
Section 10.16 Sharing of Payments Among Banks. If a Bank shall
obtain payment of any principal of or interest on any Loan made by it through
the exercise of any right of setoff, banker's lien, counterclaim, or by any
other means (including direct payment), and such payment results in such Bank
receiving a greater payment than it would have been entitled to had such payment
been paid directly to Administrative Agent for disbursement to the Banks, then
such Bank shall promptly purchase for cash from the other Banks participations
in the Loans made by the other Banks in such amounts, and make such other
adjustments from time to time as shall be equitable to the end that all the
Banks shall share ratably the benefit of such payment. To such end the Banks
shall make appropriate adjustments among themselves (by the resale of
participations sold or otherwise) if such payment is rescinded or must otherwise
be restored. Borrower agrees that any Bank so purchasing a participation in the
Loans made by other Banks may exercise all rights of setoff, banker's lien,
counterclaim or similar rights with respect to such participation. Nothing
contained herein shall require any Bank to exercise any such right or shall
affect the right of any Bank to exercise, and retain the benefits of exercising,
any such right with respect to any other indebtedness of Borrower.
Section 10.17 Possession of Documents. Each Bank shall keep
possession of its own Note. Administrative Agent shall hold all the other Loan
Documents and related documents in its possession and maintain separate records
and accounts with respect thereto, and shall permit the Banks and their
representatives access at all reasonable times to inspect such Loan Documents,
related documents, records and accounts.
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ARTICLE XI. NATURE OF OBLIGATIONS
Section 11.01 Absolute and Unconditional Obligations. Borrower
acknowledges and agrees that its obligations and liabilities under this
Agreement and under the other Loan Documents shall be absolute and unconditional
irrespective of: (1) any lack of validity or enforceability of any of the
Obligations, any Loan Documents, or any agreement or instrument relating
thereto; (2) any change in the time, manner or place of payment of, or in any
other term in respect of, all or any of the Obligations, or any other amendment
or waiver of or consent to any departure from any Loan Documents or any other
documents or instruments executed in connection with or related to the
Obligations; (3) any exchange or release of any collateral, or of any other
Person from all or any of the Obligations; or (4) any other circumstances which
might otherwise constitute a defense available to, or a discharge of, Borrower
or any other Person in respect of the Obligations.
The obligations and liabilities of Borrower under this Agreement and
other Loan Documents shall not be conditioned or contingent upon the pursuit by
any Bank or any other Person at any time of any right or remedy against Borrower
or any other Person which may be or become liable in respect of all or any part
of the Obligations or against any collateral or security or guarantee therefor
or right of setoff with respect thereto.
Section 11.02 Non-Recourse to TRG Partners. Notwithstanding anything
to the contrary contained in this Agreement, in any of the other Loan Documents,
or in any other instruments, certificates, documents or agreements executed in
connection with the Loans (all of the foregoing, for purposes of this Section,
hereinafter referred to, individually and collectively, as the "Relevant
Documents"), no recourse under or upon any Obligation, representation, warranty,
promise or other matter whatsoever shall be had against any of the constituent
partners of Borrower or their successors or assigns (said constituent partners
and their successors and assigns, for purposes of this Section, hereinafter
referred to, individually and collectively, as the "TRG Partners") and each Bank
expressly waives and releases, on behalf of itself and its successors and
assigns, all right to assert any liability whatsoever under or with respect to
the Relevant Documents against, or to satisfy any claim or obligation arising
thereunder against, any of the TRG Partners or out of any assets of the TRG
Partners, provided, however, that nothing in this Section shall be deemed to:
(1) release Borrower from any personal liability pursuant to, or from any of its
respective obligations under, the Relevant Documents, or from personal liability
for its fraudulent actions or fraudulent omissions; (2) release any TRG Partner
from personal liability for its or his own fraudulent actions or fraudulent
omissions; (3) constitute a waiver of any obligation evidenced or secured by, or
contained in, the Relevant Documents or affect in any way the validity or
enforceability of the Relevant Documents; or (4) limit the right of
Administrative Agent and/or the Banks to proceed against or realize upon any
collateral hereafter given for the Loans or any and all of the assets of
Borrower (notwithstanding the fact that the TRG Partners have an ownership
interest in Borrower and, thereby, an interest in the assets of Borrower) or to
name Borrower (or, to the extent that the same are required by applicable law or
are determined by a court to be necessary parties in connection with an action
or suit against Borrower or any collateral hereafter given for the Loans, any of
the TRG Partners) as a party defendant in, and to enforce against any collateral
hereafter given for the Loans and/or assets of Borrower any judgment obtained by
Administrative Agent and/or the Banks with respect to, any action or suit under
the Relevant Documents so long as no judgment shall be taken (except to the
extent taking a judgment is required by applicable law or determined by a court
to be necessary
43
to preserve Administrative Agent's and/or Banks' rights against any collateral
hereafter given for the Loans or Borrower, but not otherwise) or shall be
enforced against the TRG Partners, their successors and assigns, or their
assets.
ARTICLE XII. MISCELLANEOUS
Section 12.01 Binding Effect of Request for Advance. Borrower agrees
that, by its acceptance of any advance of proceeds of the Loans under this
Agreement, it shall be bound in all respects by the request for advance
submitted on its behalf in connection therewith with the same force and effect
as if Borrower had itself executed and submitted the request for advance and
whether or not the request for advance is executed and/or submitted by an
authorized person.
Section 12.02 Amendments and Waivers. No amendment or material
waiver of any provision of this Agreement or any other Loan Document nor consent
to any material departure by Borrower therefrom, shall in any event be effective
unless the same shall be in writing and signed by the Required Banks and, solely
for purposes of its acknowledgment thereof, Administrative Agent, and then such
waiver or consent shall be effective only in the specific instance and for the
specific purpose for which given, provided, however, that no amendment, waiver
or consent shall, unless in writing and signed by all the Banks do any of the
following: (1) reduce the principal of, or interest on, the Notes or any fees
due hereunder or any other amount due hereunder or under any Loan Document; (2)
postpone any date fixed for any payment of principal of, or interest on, the
Notes or any fees due hereunder or under any Loan Document, or waive any default
in the payment of principal, interest or any other amount due hereunder or under
any Loan Documents; (3) change the definition of Required Banks; (4) amend this
Section or any other provision requiring the consent of all the Banks or of the
Required Banks; (5) waive any default under paragraph (5) of Section 9.01; (6)
increase the Loan Commitment of any Bank; or (7) amend Section 10.15 or Section
10.16. Any advance of proceeds of the Loans made prior to or without the
fulfillment by Borrower of all of the conditions precedent thereto, whether or
not known to Administrative Agent and the Banks, shall not constitute a waiver
of the requirement that all conditions, including the non-performed conditions,
shall be required with respect to all future advances. No failure on the part of
Administrative Agent or any Bank to exercise, and no delay in exercising, any
right hereunder shall operate as a waiver thereof or preclude any other or
further exercise thereof or the exercise of any other right. The remedies herein
provided are cumulative and not exclusive of any remedies provided by law.
Section 12.03 Usury. Anything herein to the contrary
notwithstanding, the obligations of Borrower under this Agreement and the Notes
shall be subject to the limitation that payments of interest shall not be
required to the extent that receipt thereof would be contrary to provisions of
law applicable to a Bank limiting rates of interest which may be charged or
collected by such Bank.
Section 12.04 Expenses; Indemnification. Borrower agrees to
reimburse Administrative Agent on demand for all costs, expenses, and charges
(including, without limitation, all reasonable fees and charges of engineers,
appraisers and external legal counsel) incurred by Administrative Agent in
connection with the Loans and to reimburse each of the Banks for reasonable
legal costs, expenses and charges incurred by each of the Banks in
44
connection with the performance or enforcement of this Agreement, the Notes, or
any other Loan Documents; provided, however, that Borrower is not responsible
for costs, expenses and charges incurred by the Bank Parties in connection with
the administration or syndication of the Loans (other than the syndication
expenses and administration fee required by the Supplemental Fee Letter).
Borrower agrees to indemnify Administrative Agent and each Bank and their
respective directors, officers, employees and agents from, and hold each of them
harmless against, any and all losses, liabilities, claims, damages or expenses
incurred by any of them arising out of or by reason of (x) any claims by brokers
due to acts or omissions by Borrower, or (y) any investigation or litigation or
other proceedings (including any threatened investigation or litigation or other
proceedings) relating to any actual or proposed use by Borrower of the proceeds
of the Loans, including without limitation, the reasonable fees and
disbursements of counsel incurred in connection with any such investigation or
litigation or other proceedings (but excluding any such losses, liabilities,
claims, damages or expenses incurred by reason of the gross negligence or
willful misconduct of the Person to be indemnified).
The obligations of Borrower under this Section shall survive the
repayment of all amounts due under or in connection with any of the Loan
Documents and the termination of the Loans.
Section 12.05 Assignment; Participation. This Agreement shall be
binding upon, and shall inure to the benefit of, Borrower, Administrative Agent,
the Banks and their respective successors and permitted assigns. Borrower may
not assign or transfer its rights or obligations hereunder.
Subject to the provisions of Section 10.14, any Bank may at any time
grant to one or more banks or other institutions (each a "Participant")
participating interests in its Loan (each a "Participation") subject to the
consent of Fleet and PNC, which consents shall not be unreasonably withheld or
delayed, and provided that any such Participation shall be in the minimum amount
of Ten Million Dollars ($10,000,000). In the event of any such grant by a Bank
of a Participation to a Participant, whether or not Borrower or Administrative
Agent was given notice, such Bank shall remain responsible for the performance
of its obligations hereunder, and Borrower and Administrative Agent shall
continue to deal solely and directly with such Bank in connection with such
Bank's rights and obligations hereunder. Any agreement pursuant to which any
Bank may grant a Participation shall provide that such Bank shall retain the
sole right and responsibility to enforce the obligations of Borrower hereunder
and under any other Loan Document including, without limitation, the right to
approve any amendment, modification or waiver of any provision of this Agreement
or any other Loan Document; provided that such participation agreement may
provide that such Bank will not agree to any modification, amendment or waiver
of this Agreement described in Section 12.02 without the consent of the
Participant.
Subject to the provisions of Section 10.14, any Bank having a Loan
Commitment in an amount equal to or exceeding Fifteen Million Dollars
($15,000,000) may at any time assign to any bank or other institution, with the
acknowledgment of Administrative Agent and the consent of Fleet, PNC and,
provided there exists no Event of Default, of Borrower, which consents shall not
be unreasonably withheld or delayed (such assignee, a "Consented Assignee"), or
to one or more banks or other institutions which are majority owned subsidiaries
of a Bank or to the Parent of a Bank (each Consented Assignee or subsidiary bank
or institution, an
45
"Assignee") all, or a proportionate part of all, of its rights and obligations
under this Agreement and its Note, and such Assignee shall assume rights and
obligations, pursuant to an Assignment and Assumption Agreement executed by such
Assignee and the assigning Bank, provided that, in each case, after giving
effect to such assignment, the Assignee's Loan Commitment, and, in the case of a
partial assignment, the assigning Bank's Loan Commitment, each will be equal to
or greater than Five Million Dollars ($5,000,000). Upon (i) execution and
delivery of such instrument, (ii) payment by such Assignee to the Bank of an
amount equal to the purchase price agreed between the Bank and such Assignee and
(iii) payment by such Assignee to Administrative Agent of a fee, for
Administrative Agent's own account, in the amount of $2,500, on account of
Administrative Agent's fees and expenses in connection with such assignment,
such Assignee shall be a Bank Party to this Agreement and shall have all the
rights and obligations of a Bank as set forth in such Assignment and Assumption
Agreement, and the assigning Bank shall be released from its obligations
hereunder to a corresponding extent, and no further consent or action by any
party shall be required. Upon the consummation of any assignment pursuant to
this paragraph, substitute Notes shall be issued to the assigning Bank and
Assignee by Borrower, in exchange for the return of the original Note. The
obligations evidenced by such substitute notes shall constitute "Obligations"
for all purposes of this Agreement and the other Loan Documents. If the Assignee
is not incorporated under the laws of the United States of America or a state
thereof, it shall, prior to the first date on which interest or fees are payable
hereunder for its account, deliver to Borrower and Administrative Agent
certification as to exemption from deduction or withholding of any United States
federal income taxes in accordance with Section 10.13.
Any Bank may at any time assign all or any portion of its rights
under this Agreement and its Note to a Federal Reserve Bank. No such assignment
shall release the transferor Bank from its obligations hereunder.
Borrower recognizes that in connection with a Bank's selling of
Participations or making of assignments, any or all documentation, financial
statements, appraisals and other data, or copies thereof, relevant to Borrower
or the Loans may be exhibited to and retained by any such Participant or
assignee or prospective Participant or assignee. In addition, such documentation
etc. may be exhibited to and retained by Affiliates of a Bank. In connection
with a Bank's delivery of any financial statements and appraisals to any such
Participant or assignee or prospective Participant or assignee, such Bank shall
also deliver its standard confidentiality statement indicating that the same are
delivered on a confidential basis. Borrower agrees to provide all assistance
reasonably requested by a Bank to enable such Bank to sell Participations or
make assignments of its Loan as permitted by this Section. Each Bank agrees to
provide Borrower with notice of all Participations sold by such Bank.
Notwithstanding the foregoing provisions of this Section, no Bank
shall assign, grant, convey, or transfer all or any portion of or interest
(participation or otherwise) in the Loan to any Person if such Person is (i) a
greater than 10% partner (determined in accordance with Treasury Regulations
Section 1.752-2(d)(1) of the Code) of Borrower (a "Greater than 10% Partner"),
(ii) an 80% or greater partner, member or shareholder of any Greater than 10%
Partner or (iii) a person who is under 80% or greater common ownership with (x)
a Greater than 10% Partner or (y) a shareholder, member or partner of any
Greater than 10% Partner. For purposes of clauses (ii) and (iii), percentage
ownership shall be determined pursuant to Sections 267(b) and 707(b) of the Code
as modified by Treasury Regulations Section 1.752-4. Any Person
46
described above is referred to as a "Disqualified Person". Any Person who
becomes a Bank or Participant in accordance with the terms of this Agreement
agrees to be bound by the provisions of this Section and, other than obtaining,
in connection with a bankruptcy proceeding of a constituent partner of Borrower,
any interest as (a) a partner in Borrower or (b) an 80% or greater interest as a
partner, member or shareholder of any partner of Borrower, agrees not to take
any action that would make it a Disqualified Person. In addition, any Bank or
Participant shall be a "qualified person" within the meaning of Section
465(b)(6)(D)(i) and 49(a)(1)(D)(iv) of the Code.
Section 12.06 Documentation Satisfactory. All documentation required
from or to be submitted on behalf of Borrower in connection with this Agreement
and the documents relating hereto shall be subject to the prior approval of, and
be satisfactory in form and substance to, Administrative Agent, its counsel and,
where specifically provided herein, the Banks. In addition, the persons or
parties responsible for the execution and delivery of, and signatories to, all
of such documentation, shall be acceptable to, and subject to the approval of,
Administrative Agent and its counsel and the Banks.
Section 12.07 Notices. Unless the party to be notified otherwise
notifies the other party in writing as provided in this Section, and except as
otherwise provided in this Agreement, notices shall be given to Administrative
Agent by telephone, confirmed by writing, and to the Banks and to Borrower by
ordinary mail or overnight courier addressed to such party at its address on the
signature page of this Agreement. Notices shall be effective: (1) if by
telephone, at the time of such telephone conversation, (2) if given by mail,
three (3) days after mailing; and (3) if given by overnight courier, upon
receipt.
Section 12.08 Intentionally Omitted.
Section 12.09 Table of Contents; Headings. Any table of contents and
the headings and captions hereunder are for convenience only and shall not
affect the interpretation or construction of this Agreement.
Section 12.10 Severability. The provisions of this Agreement are
intended to be severable. If for any reason any provision of this Agreement
shall be held invalid or unenforceable in whole or in part in any jurisdiction,
such provision shall, as to such jurisdiction, be ineffective to the extent of
such invalidity or unenforceability without in any manner affecting the validity
or enforceability thereof in any other jurisdiction or the remaining provisions
hereof in any jurisdiction.
Section 12.11 Counterparts. This Agreement may be executed in any
number of counterparts, all of which taken together shall constitute one and the
same instrument, and any party hereto may execute this Agreement by signing any
such counterpart.
Section 12.12 Integration. The Loan Documents and Supplemental Fee
Letter set forth the entire agreement among the parties hereto relating to the
transactions contemplated thereby and supersede any prior oral or written
statements or agreements with respect to such transactions.
47
Section 12.13 GOVERNING LAW. THIS AGREEMENT SHALL BE GOVERNED BY,
AND INTERPRETED AND CONSTRUED IN ACCORDANCE WITH, THE LAWS OF THE STATE OF NEW
YORK.
Section 12.14 Waivers. In connection with the obligations and
liabilities as aforesaid, Borrower hereby waives: (1) promptness and diligence;
(2) notice of any actions taken by any Bank Party under this Agreement, any
other Loan Document or any other agreement or instrument relating thereto except
to the extent otherwise provided herein; (3) all other notices, demands and
protests, and all other formalities of every kind in connection with the
enforcement of the Obligations, the omission of or delay in which, but for the
provisions of this Section, might constitute grounds for relieving Borrower of
its obligations hereunder; (4) any requirement that any Bank Party protect,
secure, perfect or insure any Lien on any collateral or exhaust any right or
take any action against Borrower or any other Person or any collateral; (5) any
right or claim of right to cause a marshalling of the assets of Borrower; and
(6) all rights of subrogation or contribution, whether arising by contract or
operation of law (including, without limitation, any such right arising under
the Federal Bankruptcy Code) or otherwise by reason of payment by Borrower,
either jointly or severally, pursuant to this Agreement or other Loan Documents.
Section 12.15 JURISDICTION; IMMUNITIES. BORROWER, THE ADMINISTRATIVE
AGENT AND EACH BANK HEREBY IRREVOCABLY SUBMIT TO THE JURISDICTION OF ANY NEW
YORK STATE OR UNITED STATES FEDERAL COURT SITTING IN NEW YORK CITY OVER ANY
ACTION OR PROCEEDING ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE NOTES OR
ANY OTHER LOAN DOCUMENT. BORROWER, THE ADMINSTRATIVE AGENT, AND EACH BANK
IRREVOCABLY AGREE THAT ALL CLAIMS IN RESPECT OF SUCH ACTION OR PROCEEDING MAY BE
HEARD AND DETERMINED IN SUCH NEW YORK STATE OR UNITED STATES FEDERAL COURT.
BORROWER, THE ADMINISTRATIVE AGENT, AND EACH BANK IRREVOCABLY CONSENT TO THE
SERVICE OF ANY AND ALL PROCESS IN ANY SUCH ACTION OR PROCEEDING BY THE MAILING
OF COPIES OF SUCH PROCESS TO BORROWER, THE ADMINISTRATIVE AGENT OR EACH BANK, AS
THE CASE MAY BE, AT THE ADDRESSES SPECIFIED HEREIN. BORROWER, THE ADMINISTRATIVE
AGENT AND EACH BANK FURTHER WAIVE ANY OBJECTION TO VENUE IN THE STATE OF NEW
YORK AND ANY OBJECTION TO AN ACTION OR PROCEEDING IN THE STATE OF NEW YORK ON
THE BASIS OF FORUM NON CONVENIENS. BORROWER, THE ADMINISTRATIVE AGENT AND EACH
BANK AGREE THAT ANY ACTION OR PROCEEDING BROUGHT AGAINST BORROWER, THE
ADMINISTRATIVE AGENT OR ANY BANK, AS THE CASE MAY BE, SHALL BE BROUGHT ONLY IN A
NEW YORK STATE COURT SITTING IN NEW YORK CITY OR A UNITED STATES FEDERAL COURT
SITTING IN NEW YORK CITY.
Nothing in this Section shall affect the right of Borrower,
Administrative Agent or any Bank to serve legal process in any other manner
permitted by law.
To the extent that Borrower, Administrative Agent or any Bank have
or hereafter may acquire any immunity from jurisdiction of any court or from any
legal process (whether from service or notice, attachment prior to judgment,
attachment in aid of execution, execution or otherwise) with respect to itself
or its property, Borrower, Administrative Agent and each
48
Bank hereby irrevocably waive such immunity in respect of its obligations under
this Agreement, the Notes and any other Loan Document.
BORROWER, ADMINISTRATIVE AGENT AND EACH BANK WAIVE ANY RIGHT EACH
SUCH PARTY MAY HAVE TO JURY TRIAL IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING BROUGHT WITH RESPECT TO THIS AGREEMENT, THE NOTES OR THE LOANS. IN
ADDITION, BORROWER HEREBY WAIVES, IN CONNECTION WITH ANY SUIT, ACTION OR
PROCEEDING BROUGHT BY ADMINISTRATIVE AGENT OR THE BANKS WITH RESPECT TO THE
NOTES, ANY RIGHT BORROWER MAY HAVE TO (1) INTERPOSE ANY COUNTERCLAIM THEREIN
(OTHER THAN A COUNTERCLAIM THAT IF NOT BROUGHT IN THE SUIT, ACTION OR PROCEEDING
BROUGHT BY ADMINISTRATIVE AGENT OR THE BANKS COULD NOT BE BROUGHT IN A SEPARATE
SUIT, ACTION OR PROCEEDING OR WOULD BE SUBJECT TO DISMISSAL OR SIMILAR
DISPOSITION FOR FAILURE TO HAVE BEEN ASSERTED IN SUCH SUIT, ACTION OR PROCEEDING
BROUGHT BY ADMINISTRATIVE AGENT OR THE BANKS) OR (2) HAVE THE SAME CONSOLIDATED
WITH ANY OTHER OR SEPARATE SUIT, ACTION OR PROCEEDING. NOTHING HEREIN CONTAINED
SHALL PREVENT OR PROHIBIT BORROWER FROM INSTITUTING OR MAINTAINING A SEPARATE
ACTION AGAINST ADMINISTRATIVE AGENT OR THE BANKS WITH RESPECT TO ANY ASSERTED
CLAIM.
49
IN WITNESS WHEREOF, the parties hereto, intending to be legally
bound, have caused this Agreement to be duly executed as of the day and year
first above written.
THE TAUBMAN REALTY GROUP LIMITED
PARTNERSHIP, a Delaware
limited partnership
By: /s/ Shire Rothbart
-----------------------------
Shire Rothbart,
its authorized signatory
Address for Notices:
c/o The Taubman Company
Limited Partnership
200 East Long Lake Road - Suite 300
Bloomfield Hills, Michigan 48304
Attention: Mr. Shire Rothbart
with copy to:
Miro Weiner & Kramer
500 North Woodward Avenue
Suite 100 - P.O. Box 908
Bloomfield Hills, Michigan 48303-0908
Attention: Martin L. Katz, Esq.
50
PNC BANK, NATIONAL ASSOCIATION
(as Bank and Administrative Agent)
By: /s/ Dina S. Muth
-------------------------------
Name: Dina S. Muth
Title: Real Estate Officer
Address for notices and Applicable
Lending Office:
One PNC Plaza
249 Fifth Avenue
P1-POPP-19-2
Pittsburgh, Pennsylvania 15222
Attention: Ms. Dina Muth
Telephone: (412) 762-9118
Telecopy: (412) 762-6500
with copy to:
One PNC Plaza
249 Fifth Avenue
P1-POPP-03-2
Pittsburgh, Pennsylvania 15222
Attention: Ms. Arlene Ohler
Telephone: (412) 762-3627
Telecopy: (412) 762-8672
FLEET NATIONAL BANK
By: /s/ Margaret A. Mulcahy
----------------------------
Name: Margaret A. Mulcahy
Title: Senior Vice President
Address for notices and Applicable
Lending Office:
75 State Street
MA BOF 11-C
Boston, Massachusetts 02109
Attention: Ms. Margaret Mulcahy
Telephone: (617) 346-4291
Telecopy: (617) 346-3220
51
DRESDNER BANK AG, New York and
Grand Cayman Branches
By /s/ Brigitte Sacin
-----------------------------
Name: Brigitte Sacin
Title: Assistant Treasurer
By /s/ Beverly G. Cason
------------------------------
Name: Beverly G. Cason
Title: Vice President
Address for notices and Applicable
Lending Office:
Dresdner Bank AG, New York and
Grand Cayman Branches
190 South LaSalle Street, Suite 2700
Chicago, Illinois 60603
Attention: Ms. Maureen M. Slentz
Telephone: (312) 444-1316
Telecopy: (312) 444-1301 or 1305
COMMERZBANK AG, Chicago Branch
By /s/ Douglas P. Traynor
-----------------------------
Name: Douglas P. Traynor
Title: Vice President
By /s/ E. Marcus Perry
-----------------------------
Name: E. Marcus Perry
Title: Assistant Treasurer
Address for notices and Applicable
Lending Office:
Commerzbank AG, Chicago Branch
c/o Commerzbank AG, New York Branch
2 World Financial Center
New York, New York 10281-1050
Attention: Mr. Douglas P. Traynor
Telephone: (212) 266-7569
Telecopy: (212) 266-7530
52
KEY BANK NATIONAL ASSOCIATION
By
----------------------------------
Name:
Title:
Address for notices and Applicable
Lending Office:
Key Bank National Association
Commercial Real Estate Division
127 Public Square, 6th Floor
Cleveland, Ohio 44114-1306
Attention: Ms. Mary Ellen Fowler
Telephone: (216) 689-4975
Telecopy: (216) 689-4997
BAYERISCHE HYPOTHEKEN- UND
WECHSEL-BANK AKTIENGESELLSCHAFT
(New York Branch)
By /s/ Stephen G. Melidones
---------------------------------
Name: Stephen G. Melidones
Title: Assistant Vice President
By /s/ Eva Lam
----------------------------------
Name: Eva Lam
Title: Assistant Treasurer
Address for notices and Applicable
Lending Office:
Bayerische Hypotheken- Und
Wechsel-Bank Aktiengesellschaft
(New York Branch)
Financial Square
32 Old Slip
New York, New York 10005
Attention: Mr. Stephen G. Melidones
Telephone: (212) 440-0844
Telecopy: (212) 440-0824
53
COMERICA BANK
By /s/ Kristine L. Andersen
-------------------------------
Name: Kristine L. Andersen
Title: Account Officer
Address for notices and Applicable
Lending Office:
Comerica Bank
U.S. Banking-East
Comerica Tower at Detroit Center
500 Woodward Avenue
Detroit, Michigan 48226
Attention: Ms. Kristine L. Andersen
Telephone: (313) 222-3648
Telecopy: (313) 222-3330
LANDESBANK HESSEN-THURINGEN
GIROZENTRALE, New York Branch
By /s/ Robert W. Becker
----------------------------------
Name: Robert W. Becker
Title: Vice President
By /s/ Michael A. Pierro
-----------------------------------
Name: Michael A. Pierro
Title: Assistant Vice President
Address for notices and Applicable
Lending Office:
Landesbank Hessen-Thuringen
Girozentrale, New York Branch
420 Fifth Avenue, 24th Floor
New York, New York 10018-2729
Attention: Mr. Michael Pierro
Telephone: (212) 703-5209
Telecopy: (212) 703-5296
54